LU THAI TEXTILE CO., LTD.INTERIM REPORT 2020
August 2020
Part I Important Notes, Table of Contents and DefinitionsThe Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Lu Thai Textile Co., Ltd. (hereinafter referred to as the“Company”) hereby guarantee the factuality, accuracy and completeness of the contents ofthis Report and its summary, and shall be jointly and severally liable for anymisrepresentations, misleading statements or material omissions therein.Liu Zibin, the Company’s legal representative, Zhang Hongmei, the Company’s ChiefAccountant, and Zhang Keming, the Company’s Financial Manager hereby guarantee thatthe financial statements carried in this Report are factual, accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Reportand its summary.The Company has described in detail in this Report the possible risks facing it. Please refer tothe section headed “Risks Facing the Company and Countermeasures” of “Part IV OperatingPerformance Discussion and Analysis” of this Report.The Company has no interim dividend plan, either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should therebe any discrepancies or misunderstandings between the two versions, the Chinese versionsshall prevail.
Table of Contents
Interim Report 2020 ...... 1
Part I Important Notes, Table of Contents and Definitions ...... 2
Part II Corporate Information and Key Financial Information ...... 5
Part III Business Summary ...... 8
Part IV Operating Performance Discussion and Analysis ...... 11
Part V Significant Events ...... 22
Part VI Share Changes and Shareholder Information ...... 38
Part VII Preferred Shares ...... 43
Part VIII Convertible Corporate Bonds ...... 44
Part IX Directors, Supervisors and Senior Management ...... 47
Part X Corporate Bonds ...... 50
Part XI Financial Statements ...... 51
Part XII Documents Available for Reference ...... 167
Definitions
Term | Definition |
The “Company”, “LTTC”, “Issuer” or “we” | Lu Thai Textile Co., Ltd. and its consolidated subsidiaries, except where the context otherwise requires |
The Board of Directors | The Board of Directors of Lu Thai Textile Co., Ltd. |
The Supervisory Committee | The Supervisory Committee of Lu Thai Textile Co., Ltd. |
CSRC | The China Securities Regulatory Commission |
RMB, RMB’0,000 | Expressed in the Chinese currency of Renminbi, expressed in tens of thousands of Renminbi |
The “Company Law” | The “Company Law of the People‘s Republic of China” |
The “Securities Law” | The “Securities Law of the People‘s Republic of China” |
The “Reporting Period” or “Current Period” | The period from 1 January 2020 to 30 June 2020 |
Part II Corporate Information and Key Financial InformationI Corporate Information
Stock name | LTTC, LTTC-B | Stock code | 000726, 200726 |
Changed stock name (if any) | N/A | ||
Stock exchange for stock listing | Shenzhen Stock Exchange | ||
Company name in Chinese | 鲁泰纺织股份有限公司 | ||
Abbr. (if any) | 鲁泰纺织 | ||
Company name in English (if any) | LU THAI TEXTILE CO.,LTD | ||
Abbr. (if any) | LTTC | ||
Legal representative | Liu Zibin |
II Contact Information
Board Secretary | Securities Representative | |
Name | Zhang Keming | Zheng Weiyin and Li Kun |
Address | No. 81, Songling East Road, Zichuan District, Zibo, Shandong, P.R.China | No. 81, Songling East Road, Zichuan District, Zibo, Shandong, P.R.China |
Tel. | 0533-5277008 | 0533-5285166 |
Fax | 0533-5418805 | 0533-5418805 |
Email address | zhangkeming@lttc.com.cn | wyzheng@lttc.com.cn,likun@lttc.com.cn |
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address andemail address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2019 Annual Report.
2. Media for Information Disclosure and Place where this Report is LodgedIndicate by tick mark whether any change occurred to the information disclosure media and the place for lodging the Company’speriodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing theCompany’s periodic reports and the place for lodging such reports did not change in the Reporting Period. The said information canbe found in the 2019 Annual Report.IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2020 | H1 2019 | Change (%) | |
Operating revenue (RMB) | 2,286,744,080.79 | 3,185,448,344.01 | -28.21% |
Net profit attributable to the listed company’s shareholders (RMB) | 144,119,579.22 | 411,446,216.59 | -64.97% |
Net profit attributable to the listed company’s shareholders before exceptional gains and losses (RMB) | 108,105,593.17 | 376,816,535.93 | -71.31% |
Net cash generated from/used in operating activities (RMB) | 209,392,265.69 | 119,717,062.57 | 74.91% |
Basic earnings per share (RMB/share) | 0.17 | 0.480 | -64.58% |
Diluted earnings per share (RMB/share) | 0.16 | 0.480 | -66.67% |
Weighted average return on equity (%) | 1.85% | 5.70% | -3.85% |
30 June 2020 | 31 December 2019 | Change (%) | |
Total assets (RMB) | 12,863,406,129.65 | 11,885,431,553.08 | 8.23% |
Equity attributable to the listed company’s shareholders (RMB) | 7,848,129,418.22 | 7,697,135,324.92 | 1.96% |
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises(CAS) and International Financial Reporting Standards (IFRS) and Foreign AccountingStandards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item | Amount | Note |
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -503,782.07 | |
Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform standards) | 37,754,439.82 | |
Gain or loss on fair-value changes in trading and derivative financial assets and liabilities & income from disposal of trading and derivative financial assets and liabilities and investments in other debt obligations (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) | 9,613,583.08 | |
Non-operating income and expense other than the above | -108,188.60 | |
Less: Income tax effects | 7,325,580.81 | |
Non-controlling interests effects (net of tax) | 3,416,485.37 | |
Total | 36,013,986.05 | -- |
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/LossItems:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
Part III Business SummaryI Principal Activity of the Company in the Reporting PeriodNo changes occurred to the Company’s core businesses, primary products, business models and major growth drivers in theReporting Period.Lu Thai has always adhered to its mission of “creating wealth, contributing to the society, clothing the world and weaving our way toevery corner of the globe”, as well as to its values of “people foremost policy, rigorous scientific attitude, client oriented principleand integrity for win-win outcome” for a long time. It is devoted to improving and expanding its industrial chain, making it arenowned textile and garment business group combing spinning, bleaching and dyeing, neatening, testing, garment making andmarketing. Lu Thai produces and sells middle and high-grade yarn-dyed fabric and dyeing fabric for shirts and garment. It claimed itsfame for its comprehensive management, R&D ability, advanced technology, international development plan and stable quality.Moreover, it also attaches great importance to improve the added value of its products, explore the emerging market and renew itsservice philosophy. With natural fabric as its flagship, multi-component functional fiber fabric as its spearhead and wash-and-wearnon-ironing technology as its core competency, the Company kept a watchful eye on the latest consumption trend. Great attentionwas paid to improve its healthy product series so as to satisfy the needs from the diversified and personalized market.Lu Thai has become the world’s largest high-grade yarn dyed fabric producer and a world-class premium shirt provider. It had pavedits development pattern featured in going green, low-carbon growth, science and technology and humanism.II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Not applicable
2. Major Assets Overseas
√ Applicable □ Not applicable
Asset | Source | Asset value (RMB) | Location | Management model | Control measures to protect asset safety | Return generated (RMB) | As % of the Company’s net asset value | Material impairment risk (yes/no) |
Lu Thai (Hong Kong) Textile Co., Ltd. | Incorporated | 193,525,344.88 | Hong Kong | Marketing | Main management personnel sent by the Company as the parent | 5,031,239.90 | 2.29% | No |
Lu Thai (America) Textile Co., Ltd. | Incorporated | 12,942,380.98 | New York | Marketing | Main management personnel sent by | 76,768.01 | 0.15% | No |
the Company as the parent | ||||||||
Lu Thai (Cambodia) Textile Co., Ltd. | Incorporated | 194,741,122.06 | Svay Rieng | Manufacturing | Main management personnel sent by the Company as the parent | 6,922,869.29 | 2.30% | No |
Lu Thai (Burma) Textile Co., Ltd. | Incorporated | 91,676,813.06 | Rangoon | Manufacturing | Main management personnel sent by the Company as the parent | 4,129,974.69 | 1.08% | No |
Lu Thai (Vietnam) Textile Co., Ltd. | Incorporated | 2,669,422,156.25 | Tay Ninh | Manufacturing | Main management personnel sent by the Company as the parent | 3,137,289.96 | 31.58% | No |
Lu An Garments Co., Ltd. | Incorporated | 189,250,696.08 | Anjiang, Vietnam | Manufacturing | Main management personnel sent by the Company as the parent | 8,202,957.22 | 2.24% | No |
III Core Competitiveness Analysis
1. The Company has a comprehensive vertical industrial chain and internationalized layout. As the Company possesses the wholeindustrial chain integrating spinning, bleaching and dyeing, neatening, testing, and garment making, it has corresponding costadvantage covering various links of the production of high-end yarn-dyed fabrics. In order to take full advantage of its internationalresources, realize the internationalized industrial distribution and reinforce the leading international status in manufacturing theyarn-dyed fabrics, the Company has built various production bases in Cambodia, Burma and Vietnam etc., and established the designagency in Italy, and the market service offices in the U.S.A, Japan and India.
2. The Company has better integrated management capability and high-level management system architecture. Since 1995, theCompany has successively passed the certification of ISO9000 quality management system, ISO14000 environmental managementsystem, OHSAS18000 Occupation Health Safety Management System, SA8000 Social Responsibility Management System, TheWorldwide Responsible Apparel Production Standard (WRAP), Sustainable Textile Production (STeP), Global Organic TextileStandard (GOTS), Global Recycle Standard (GRS) and China National Accreditation Service for Conformity Assessment (CNAS),and realized the internationalization, standardization and normalization of the corporate management. In order to make outstandingachievement in its operating management, better improve the Company’s business performance and capabilities, the Company hasintroduced the GB/T19580 Criteria for Performance Excellence step by step, set up the “big quality” system, promoted themanagement innovation and guaranteed the management quality.
3. The Company establishes its high-level technical cooperation platform by virtue of strong R&D capability. In fact, the Companyalways insists on the independent innovation, enhances its technical cooperation with various research institutes, colleges anduniversities, strategic clients and important suppliers by relying on various technical platforms including the national enterprise
technical center, the national industrial design center, the national demonstration base for introducing talents, the nationalpost-doctoral scientific research station and Shandong Provincial Engineering Technology Research Center, dedicates itself to thecutting-edge technical research, and gradually transforms from technology research to integrated product development. Besides, theCompany will also transform from the overcoming of key technical difficulties to the mastery of technical principles and theformulation of industrial standards, and from the focus on technical innovation to the dynamic integration of new techniqueexploration with model innovation, improve the low-carbon, green and sustainable development, enhance the impetus and vigor forthe enterprise development, promote the contribution of scientific and technological progress to the industrial development andpropel the industrial upgrading.
Part IV Operating Performance Discussion and AnalysisI OverviewThe COVID-19 pandemic had an enormous impact on China’s foreign trade sector in the first half of 2020. In face of a slowingdown macro-economy and declining demand both at home and abroad, the Company adhered to its own developmentphilosophy and the customer-oriented principle, overcame difficulties, resumed production and explored new products andmarkets. However, the pandemic still adversely affected the Company’s production and operation to some degree. For theReporting Period, the Company recorded operating revenue of RMB2,287 million, an operating profit of RMB175 million, a netprofit attributable to the listed company’s shareholders of RMB144 million and a net profit attributable to the listed company’sshareholders before exceptional gains and losses of RMB108 million, down 28.21%, 64.56%, 64.97% and 71.31% respectivelyfrom the same period of last year.During the Reporting Period, there was no change to the Company’s main businesses or major profit sources and components. As anadvantaged enterprise in the textile manufacturing industry, the Company was granted with the titles of “Top 100 Private Enterpriseswith the Highest Brand Value of Shandong Province of 2020” by Shandong Council for Brand Development and “High-End BrandBuilders in the Manufacturing Sector of Shandong Province” by Shandong Administration for Market Regulation. During theReporting Period, the Company carried out a series of work in developing new products, expanding markets and improving staffcompetencies.
1. Proactively developing new products, new markets and new channels
During the Reporting Period, the Company took measures to ensure normal businesses with traditional customers, strengthened thedevelopment of products and customers, closely followed the actual demands of customers, and positively addressed the challenge ofbusiness decline oriented by “new products and new markets”. Based on the epidemic development in the places where major foreigncustomers are located, the Company developed and introduced protective products to overseas customers, particularly on Japan’smarket, satisfying their product demands for basic protection, environmental protection and reusability and gaining marketrecognition. Subsequently, the Company will continue to provide related countries and markets with protective products that meettheir demands.As the pandemic developed in foreign countries, the Company experienced increasing impact on its overseas business. By adjustingthe focus of its sale, the Company proactively developed potential domestic and foreign markets and customers and exhibited thenew products of its fabric exhibition hall via its official TikTok account. It launched its “NARCISU” shirt customization service on“Biyao Mall”, with good effect achieved.
2. Continuing to strengthen product development and implementing measures to reduce costs and enhance efficiencyDuring the Reporting Period, the Company implemented 31 corporate-level product development projects and promoted processupgrading, energy conservation and reduction of energy consumption. Meanwhile, it launched the customized development of fabricstargeting strategic and key accounts. The Company focused its investment in the development of projects concerning ecologicalnon-iron fabrics, four-sided elastic fabrics, renewable and degradable fabrics, and anti-virus and protective fabrics and clothing, andmade smooth progress in the projects. During the Reporting Period, the Company was granted with 16 patents, with the “TextileFabric Color Digitization Key Technology and Industrialization” project winning the title of “Shandong Textile and ApparelIndustrial New Technology (Achievement)” by the Department of Industry and Information Technology of Shandong Province.
3. Enhancing the professional skills of staff as part of the effort to improve its internal competitivenessDuring the Reporting Period, the Company organized all its employees to hold the “100-Day Competition” activity. By advancing theactivity in four stages, namely, mobilization, planning, implementation and appraisal, the Company aimed to improve the expertise
and professional skills of all its employees in their respective areas, and successfully held the 30
thsession of technology competitionactivity on schedule. By carrying out the above various activities, the Company enabled its staff to maintain their enthusiasm forcontinuously learning new skills, and competing with, catching up with, helping and outperforming others, laying a technological andprofessional foundation for future business.In the second half year of 2020, the Company will continue to implement the annual development plan, deepen its business reforms,make effort in developing products, channels and markets, and cultivate new opportunities for its future development.II Core Business Analysis
Overview:
For the Reporting Period, the Company recorded operating revenue of RMB2,287 million (a 28.21% year-on-year decrease); cost ofsales of RMB1,684 million (a 23.84% year-on-year decrease), including selling expense of RMB82 million (a 5.01% year-on-yearrise) and administrative expense of RMB178 million (a 6.96% year-on-year decrease); research and development expense ofRMB123 million (a 23.77% year-on-year drop); and net cash generated from operating activities of RMB209 million (a 74.91%year-on-year increase).Year-on-year changes in key financial data:
Unit: RMB
H1 2020 | H1 2019 | Change (%) | Main reason for change | |
Operating revenue | 2,286,744,080.79 | 3,185,448,344.01 | -28.21% | |
Cost of sales | 1,683,752,331.27 | 2,210,886,955.53 | -23.84% | |
Selling expense | 81,739,905.59 | 77,836,942.94 | 5.01% | |
Administrative expense | 177,893,599.47 | 191,205,597.74 | -6.96% | |
Finance costs | 25,207,309.68 | 52,554,570.05 | -52.04% | Increase in interest income and decrease in exchange loss |
Income tax expense | 27,067,833.69 | 74,839,232.29 | -63.83% | Decrease in profit before tax |
R&D investments | 123,441,723.06 | 161,939,039.23 | -23.77% | |
Net cash generated from/used in operating activities | 209,392,265.69 | 119,717,062.57 | 74.91% | Decrease in taxes paid and payments to and for employees |
Net cash generated from/used in investing activities | -129,138,967.68 | -346,327,704.43 | 62.71% | Increase in income from disposal of held-for-trading financial assets |
Net cash generated from/used in financing activities | 1,059,376,072.72 | 315,262,989.36 | 236.03% | Increase in borrowings obtained as a result of the offering of convertible corporate bonds in the current period |
Net increase in cash and cash equivalents | 1,140,089,624.57 | 88,423,644.38 | 1,189.35% | Offering of convertible corporate bonds in the current period |
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
H1 2020 | H1 2019 | Change (%) | |||
Operating revenue | As % of total operating revenue (%) | Operating revenue | As % of total operating revenue (%) | ||
Total | 2,286,744,080.79 | 100% | 3,185,448,344.01 | 100% | -28.21% |
By operating division | |||||
Textile and apparel | 2,030,174,545.12 | 88.78% | 2,934,448,827.78 | 92.12% | -30.82% |
Personal protective equipment (PPE) | 75,350,026.50 | 3.30% | 100.00% | ||
Cotton | 1,943,648.71 | 0.08% | 6,856,226.38 | 0.22% | -71.65% |
Electricity and steam | 107,378,501.63 | 4.70% | 99,820,071.53 | 3.13% | 7.57% |
Others | 71,897,358.83 | 3.14% | 144,323,218.32 | 4.53% | -50.18% |
By product category | |||||
Fabric products | 1,612,566,391.94 | 70.52% | 2,334,195,650.45 | 73.28% | -30.92% |
Shirts | 417,608,153.18 | 18.26% | 600,253,177.33 | 18.84% | -30.43% |
Personal protective equipment (PPE) | 75,350,026.50 | 3.30% | 100.00% | ||
Cotton | 1,943,648.71 | 0.08% | 6,856,226.38 | 0.22% | -71.65% |
Electricity and steam | 107,378,501.63 | 4.70% | 99,820,071.53 | 3.13% | 7.57% |
Others | 71,897,358.83 | 3.14% | 144,323,218.32 | 4.53% | -50.18% |
By operating segment | |||||
Hong Kong | 116,864,760.52 | 5.11% | 193,620,677.72 | 6.08% | -39.64% |
Japan And South Korea | 200,810,815.94 | 8.78% | 227,171,179.04 | 7.13% | -11.60% |
Southeast Asia | 598,894,637.52 | 26.19% | 853,969,711.97 | 26.81% | -29.87% |
Europe and America | 299,568,719.70 | 13.10% | 579,841,115.57 | 18.20% | -48.34% |
Others | 216,712,978.98 | 9.48% | 267,533,852.91 | 8.40% | -19.00% |
Mainland China | 853,892,168.13 | 37.34% | 1,063,311,806.80 | 33.38% | -19.70% |
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit:
√ Applicable □ Not applicable
Unit: RMB
Operating revenue | Cost of sales | Gross profit margin | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
By operating division | ||||||
Textile and apparel | 2,030,174,545.12 | 1,478,461,157.09 | 27.18% | -30.82% | -26.37% | -4.40% |
Personal protective equipment (PPE) | 75,350,026.50 | 50,271,228.30 | 33.28% | 100.00% | 100.00% | 33.28% |
By product category | ||||||
Fabric products | 1,612,566,391.94 | 1,174,569,458.23 | 27.16% | -30.92% | -25.97% | -4.87% |
Shirts | 417,608,153.18 | 303,891,698.86 | 27.23% | -30.43% | -27.86% | -2.59% |
Personal protective equipment (PPE) | 75,350,026.50 | 50,271,228.30 | 33.28% | 100.00% | 100.00% | 33.28% |
By operating segment | ||||||
Southeast Asia | 598,894,637.52 | 436,144,963.42 | 27.18% | -29.87% | -24.92% | -4.80% |
Europe and America | 299,568,719.70 | 216,150,609.49 | 27.85% | -48.34% | -45.98% | -3.14% |
Mainland China | 853,892,168.13 | 644,110,531.75 | 24.57% | -19.70% | -15.02% | -2.92% |
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
√ Applicable □ Not applicable
1. The changes in sales revenue from textile and apparel and from Europe and America were primarily attributed to decreased unitsales due to the global pandemic of COVID-19.
2. The change in respect of sales revenue from PPE was primarily attributed to the new business of PPE production and marketing inthe current period.III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount | As % of profit before tax | Source/Reason | Exceptional or recurrent | |
Investment income | 150,730,013.89 | 86.11% | Gains from disposal of held-for-trading financial assets | No |
Gain/loss on changes in fair value | -144,695,954.16 | -82.66% | Gains on variation recognized of fair value reversed from disposal of held-for-trading financial assets | No |
Asset impairments | -24,613,079.38 | -14.06% | Withdrawal of inventory impairment provision | No |
Non-operating income | 2,125,819.41 | 1.21% | Income of non-operating compensation, etc | No |
Non-operating expense | 2,383,926.90 | 1.36% | Non-operating donations and compensation, etc. | No |
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2020 | 30 June 2019 | Change in percentage (%) | Reason for any material change | |||
Amount | As % of total assets | Amount | As % of total assets | |||
Monetary assets | 2,028,297,550.15 | 15.77% | 623,926,353.74 | 5.57% | 10.20% | |
Accounts receivable | 390,917,955.82 | 3.04% | 381,453,061.31 | 3.41% | -0.37% | |
Inventories | 2,595,135,869.67 | 20.17% | 2,338,090,631.11 | 20.87% | -0.70% | |
Investment property | 44,888,691.70 | 0.35% | 38,718,468.86 | 0.35% | ||
Long-term equity investments | 149,646,776.65 | 1.16% | 100,637,911.44 | 0.90% | 0.26% | |
Fixed assets | 5,911,198,566.20 | 45.95% | 5,729,951,131.93 | 51.15% | -5.20% | |
Construction in progress | 543,763,930.47 | 4.23% | 460,389,887.15 | 4.11% | 0.12% | |
Short-term borrowings | 1,881,237,261.83 | 14.62% | 2,137,653,250.29 | 19.08% | -4.46% | |
Long-term borrowings | 14,159,000.00 | 0.11% | 0.11% |
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Item | Beginning amount | Gain/loss on fair-value changes in the Reporting Period | Cumulative fair-value changes charged to equity | Impairment allowance for the Reporting Period | Purchased in the Reporting Period | Sold in the Reporting Period | Ending amount | Item |
Financial assets | ||||||||
1. Held-for-trading financial assets (exclusive of derivative financial assets) | 330,505,598.85 | 2,000,000.00 | 193,985,718.44 | 138,519,880.41 | ||||
Subtotal of financial assets | 330,505,598.85 | 2,000,000.00 | 193,985,718.44 | 138,519,880.41 | ||||
Accounts receivable financing | 26,963,818.87 | -12,156,275.76 | 14,807,543.11 | |||||
Total of the above | 357,469,417.72 | 2,000,000.00 | 193,985,718.44 | -12,156,275.76 | 153,327,423.52 | |||
Financial liabilities | 0.00 | -841,402.78 | 841,402.78 |
Content of other changeCaused by changes in amount of accounts receivable financing
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
For details, see Part XI-VII. 61. Assets with restricted ownership and using right in this Report.V Investments Made
1. Total Investments Made
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Assets Measured by Fair Value
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
RMB’0,000
Operator | Relationship with the Company | Related-party transaction | Type of derivative | Initial investment amount | Starting date | Ending date | Beginning investment amount | Purchased in the Reporting Period | Sold in the Reporting Period | Impairment provision (if any) | Ending investment amount | Proportion of ending investment amount in the Company’s ending net assets | Actual gain/loss in the Reporting Period |
Commercial bank | Non-related | No | Forward exchange settlement | 39,398.69 | 21 January 2020 | 31 March 2020 | 0 | 39,398.69 | 39,398.69 | 0 | 0 | 228.05 | |
Commercial bank | Non-related | No | Foreign exchange option | 68,951.65 | 19 March 2020 | 25 December 2020 | 0 | 68,951.65 | 34,151.65 | 0 | 34,800 | 4.11% | 598.57 |
Commercial bank | Non-related | No | Forward exchange transactions | 15,471.23 | 9 March 2020 | 17 September 2020 | 0 | 15,471.23 | 112.81 | 0 | 15,358.42 | 1.82% | 2.8 |
Total | 123,821.57 | -- | -- | 0 | 123,821.57 | 73,663.15 | 0 | 50,158.42 | 5.93% | 829.42 |
Capital source for derivative investment | The Company’s own money |
Lawsuit (if applicable) | N/A |
Disclosure date of board of directors announcement on approval of derivative investment (if any) | 30 April 2019 |
Disclosure date of general meeting of shareholders announcement on approval of derivative investment (if any) | |
Analysis on risks and control measures of derivative products held in the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operation risk, law risk, etc.) | The Company conducted derivatives products transaction in order for hedging. And the forward settlement hedging was operated by installments, with the relevant amount not more than the planned derivatives products transactions. And all derivatives products transaction was zero-deposit. Meanwhile, the Company had a complete risk control system for sufficient analysis and prevention of possible risks such as market risk, liquidity risk and credit risk, operation risk and risk of laws and regulation. 1. Market risk: when the international and domestic economic situations change, the corresponding changes in exchange rates and interest rates may have an adverse impact on the financial derivatives transactions of the Company. Precautionary measures to be taken include: the Company chooses risk-controlled financial derivative tools with simple structure and good liquidity to carry out the hedging business, strictly controls the scale of financial derivatives trading by staged operations, and adjusts the strategy according to market changes in a timely manner. 2. Liquidity risk and credit risk: a credit risk arising from failure of the contractually due Company or counterparty in performing the contract due to liquidity or factors other than liquidity. Precautionary measures to be taken include: the Company determines the upper limit of derivatives transaction amounts according to production and operation scale as well as foreign exchange income, and conducts operations by stage according to the budget of future collections and disbursement. The derivative trades are free of guarantee deposit and can still be guaranteed in performance after the contract expires by means of extension and balance settlement etc. to prevent the Company from credit damages due to lack of liquidity. The Company selects financial institutions with strong capability and good reputation as a counterparty and signs standard derivative trading contracts to strictly control credit risk of the counterparty. 3. Operation risk: The derivatives had high specialty and complexity, so imperfect internal operation procedures, staffs and external events would make the Company to undertake risks during the transaction. Risk control measures: The Company promulgated strict authorization and approval system and perfect regulatory mechanism, fixed the operation procedures and approval procedures system to conduct derivative products transaction, implemented strict authorization and post checks and balances system, meanwhile, it improved the overall quality of relevant personnel through strengthening the professional ethics education and business training for them. Besides, it established the System of Reporting the Abnormal Situation Timely so as to ensure to lower the operation risks to the maximum. |
4. Risk of laws and regulation: The Company conducted derivatives products transaction in strict accordance with relevant laws and rules. If there were no standard operation procedures and strict approval procedures, it was easy to cause compliant and regulatory risks existing in the validity and feasibility of contract, commitments and other legal documents signed. Risk control measures: The Company carefully studied and mastered laws, regulations and policies relevant to derivative products transaction, formulated internal control rules for the forward settlement hedging business, standardized the operation procedures. And strengthened the compliant examination on derivative products transaction business. The Company conducted derivative transaction business according to the relevant approval procedure, which was in line with relevant laws, regulations, the Company’s Articles of Association, the Management Rules for Derivative Transaction of Lu Thai Textile Co., Ltd., and the Proposal on the Plan of Lu Thai Textile Co., Ltd. for Derivative Transactions approved at the 26th Meeting of the 8th Board of Directors on 29 April 2019, and performed relevant information disclosure responsibilities. | |
Changes of market prices or fair values in the Reporting Period of the invested derivatives. And the analysis on the fair value of the derivatives should include the specific use methods and the relevant assumptions and parameters. | 1. As of 30 June 2020, the Company held 13 undue financial derivatives contracts, totaling USD80 million, among which 8 contracts were the forward exchange option portfolio, totaling USD58 million, and 5 contracts were forward exchange transactions, totaling USD22 million. 2. In January - June 2020, the amount of maturing financial derivatives of the Company amounted to USD104.6616 million which was executed as per the contract in full, which generated gains of RMB8.2942 million. The amount of delivered settlements of forward exchange was USD56.5 million, which generated the gain of RMB2.2805 million. The amount of delivered foreign exchange options was USD48 million, which generated the gain of RMB5.9857 million. The amount of delivered foreign exchange transactions was USD161,600, which generated the gain of RMB28, 000. |
Whether significant changes occurred to the Company’s accounting policy and specific accounting principles of derivatives in the Reporting Period compared to the previous Reporting Period | No significant changes |
Specific opinion from independent directors on the Company’s derivatives investment and risk control | The Company’s independent directors Zhou Zhiji, Bi Xiuli, Pan Ailing, Wang Xinyu and Qu Dongmei expressed the following professional opinions on the Company’s engagement in the transaction of derivatives: In our opinions, the Company engaged in the transaction of derivatives strictly in accordance with related laws and regulations, the Articles of Incorporation and the Management Policy of Lu Thai for the Transaction of Derivatives during the Reporting Period, which complied with the derivative transaction plan considered and approved by the Board of Directors, with the operation process complying with laws and regulations. While ensuring its normal production and operations, the Company may use the transaction of derivatives dominated by forward settlement and sale of foreign exchange as an effective instrument to avert exchange rate risks. By strengthening internal control and |
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit:
Unit: RMB
implementing measures to prevent losses and risks, the risks of derivative transactions are relativelycontrollable and thus, such transactions will help to improve the Company’s ability to defense againstexchange rate fluctuations, and will not harm the rights and interests of the Company and itsshareholders.
Name
Name | Relationship with the Company | Principal activity | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
Lufeng Weaving & Dyeing Co., Ltd. | Subsidiary | Fabric | 706,160,000 | 1,624,995,663.61 | 1,265,703,463.70 | 606,784,342.44 | 37,575,760.82 | 30,732,000.50 |
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about major majority- and minority-owned subsidiaries:
Lufeng Weaving & Dyeing Co., Ltd. (hereinafter called “Lufeng Weaving & Dyeing”) is the holding subsidiary corporation of theCompany. Registration place: Zibo, Shandong; registered capital: RMB706.160 million. It was authenticated to be high-techenterprise in October 2014, and authenticated to be high-tech enterprise again for re-evaluation in 2017, mainly manufacturing andselling textile printing and dyeing products and the products of clothing and garments. During the Reporting Period, Lufeng Weaving& Dyeing actively made adjustment to address the changes in market demands under the impact of COVID-19. By upholding thebusiness concept of standard operations, environmental protection and sustainable development, it continued to increase R&D andinnovation spending, further enhanced the added value of products, and achieved operating revenue of RMB 607 million, down
24.68% year on-year and net profit of RMB30.73 million, down 41.88% year-on-year.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2020
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end ofthe next reporting period, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
(1) Impacts generated by the economic environment: Currently there is an increasing risk in the uncertainties brought by theeconomic policies, in particular the trade policies of global major economies. In the coming period of the year, coupled with theimpact of the global pandemic, the Company will be subject togreat uncertainties. At the same time, as China’s economy is facing thedownward pressure in the period recovery from the epidemic, the Company will continue to strictly implement the anti-epidemicmeasures, ensure the resumption of work and production, strive to coordinate various resources, and make use of the crisis toimprove its capabilities. It will be geared to greater post-epidemic development opportunities on the basis of stabilizing productionand operations.
(2) Fluctuations in raw material prices: the raw cotton used by the Company is long-staple cotton, whose price is affected by manyfactors such as market supply and demand, climate, policies, exchange rates and quotas. Therefore, the Company must study themarket dynamics to reduce the cost fluctuations due to changes in raw cotton price.
(3) Exchange rate changes: With the operations of its overseas production bases, the Company will continue to have a big proportionof sales from international markets for long time in the future, with US dollars accounting for a great proportion of the exportrevenue. In addition, major machinery and equipment and some raw materials used by the Company are imported and paid in USdollars and other currencies. Therefore, the Company will remain sensitive to changes in the US exchange rates.In order to reduce adverse influence of exchange rate fluctuation, the Company adopted the following measures: firstly, the Companyconducted foreign exchange hedging, using forward FX sales and purchase, forward foreign exchange trading and option portfoliosto avoid some risks Secondly, the Company made reasonable arrangement on settlement day and currency structure and conclusionof agreements on fixed foreign exchange rate to avoid exchange rate-related risks. Thirdly, the Company adjusted the Renminbi andforeign-currency liabilities structure to control financial costs. Fourthly, according to the fluctuation trend of exchange rates, theCompany properly adjusted imports of raw and auxiliary materials to partially offset the influence of exchange rate fluctuations onthe Company.
Part V Significant EventsI Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Meeting | Type | Investor participation ratio | Convened date | Disclosure date | Index to disclosed information |
The 1st Extraordinary General Meeting of 2020 | Extraordinary General Meeting | 40.82% | 8 May 2020 | 9 May 2020 | Announcement of Resolution (No. 2020-042) published on Securities Times, China Securities Journal, Shanghai Securities News, and Hong Kong Ta Kung Pao and http://www.cninfo.co on 9 May 2020 |
The 2019 Annual General Meeting | Annual General Meeting | 42.79% | 21 May 2020 | 22 May 2020 | Announcement of Resolution (No. 2020-047) published on Securities Times, China Securities Journal, Shanghai Securities News, and Hong Kong Ta Kung Pao and http://www.cninfo.co on 22 May 2020 |
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed VotingRights
□ Applicable √ Not applicable
II Interim Dividend Plan for the Reporting Period
□ Applicable √ Not applicable
The Company has no interim dividend plan.III Commitments of the Company’s Actual Controller, Shareholders, Connected Parties andAcquirer, as well as the Company and Other Commitment Makers, Fulfilled in the ReportingPeriod or still Ongoing at Period-End
√ Applicable □ Not applicable
Commitment | Promisor | Type of commitment | Details of commitment | Date of commitment making | Term of commitment | Fulfillment |
Commitments made in share reform | ||||||
Commitments made in acquisition documents or shareholding alteration documents | ||||||
Commitments made in time of asset restructuring | ||||||
Commitments made in time of IPO or refinancing | Controlling shareholder, actual controller | Dilution of at sight returns on public offering A-share convertible corporate bonds | 1. Not intervene the Company’s operation and management beyond the authority and not occupy the Company’s interests. 2. From the issuance date of this commitment to the completion of the implementation of the Company's public offering of A-share convertible corporate bonds, if the CSRC makes other new regulatory provisions on remedial measures for returns and the commitment, and the above commitment fails to meet the requirements of the CSRC, the company / I promise to issue supplementary commitment then in accordance with the latest regulations of CSRC. 3. Commitment is made to fulfill the Company's relevant remedial measures for returns and any commitment made herein by the company / me. If the company / I violate(s) such commitment and cause(s) losses to the Company or investors, the company / I will bear the compensation | 23 May 2019 | From 23 May 2019 to 8 April 2026 | On-going |
responsibility to the Company or investors in accordance with the law. | |||||
Directors and senior management of the Company | Dilution of at sight returns on public offering A-share convertible corporate bonds | 1. Commitment is made not to transfer benefits to other units or individuals free of charge or under unfair conditions, and no other ways damaging the interests of the Company will be taken. 2. I will strictly abide by the budget management of the Company, and accept the strict supervision and management of the Company to avoid waste or excessive consumption. Any position-related consumption behaviors of myself will occur within the scope necessary for the performance of my duties. 3. Commitment is made not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of duties. 4. Commitment is made that the remuneration system developed by the Board of Directors or the Remuneration Committee is linked to the implementation of the Company's remedial measures for returns. 5. Commitment is made that the conditions for exercising the Equity Incentive Plan to be issued | 23 May 2019 | From 23 May 2019 to 8 April 2026 | On-going |
in the future will be linked to the implementation of the Company's remedial measures for returns. 6. From the issuance date of this commitment to the completion of the implementation of the Company's public offering of A-share convertible corporate bonds, if the CSRC makes other new regulatory provisions on remedial measures for returns and the commitment, and the above commitment fails to meet the requirements of the CSRC, I promise to issue supplementary commitment then in accordance with the latest regulations of CSRC. 7. Commitment is made to fulfill the Company's relevant remedial measures for returns and any commitment made herein by me. If I violate such commitment and causes losses to the Company or investors, I will bear the compensation responsibility to the Company or investors in accordance with the law. | ||||||
Equity incentive commitments | ||||||
Other commitments made to minority interests | ||||||
Executed on time or not | Yes |
IV Engagement and Disengagement of CPAs FirmHas the Interim financial report been audited?
□Yes √ No
This Interim Report is unaudited.V Explanations Given by Board of Directors and Supervisory Committee Regarding“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issuedfor Last Year
□ Applicable √ Not applicable
VII Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.VIII Legal MattersSignificant lawsuits or arbitrations:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Other legal matters:
□ Applicable √ Not applicable
IX Media Query
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.XI Credit Conditions of the Company as well as its Controlling Shareholder and ActualController
□ Applicable √ Not applicable
XII Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measuresfor Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Significant Related-party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
√Applicable □ Not applicable
Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes.
√ Yes □ No
Liabilities of related parties to account payable:
Related party | Relation with the Company | Formation reason | Beginning balance (RMB’0,000) | Amount newly added in current period (RMB’0,000) | Amount returned in current period (RMB’0,000) | Interest rate | Current interest (RMB’0,000) | Ending balance (RMB’0,000) |
Zibo Lucheng Textile Investment Co., Ltd | The Company as the parent | Currencies deposit | 0 | 16,000 | 16,000 | 4.35% | 131.23 | 0 |
Influences from liabilities of parties related on operating results and financial situations of the Company | No |
5. Other Major Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Particulars about the Non-operating Occupation of Funds by the ControllingShareholder and Other Related Parties of the Company
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major guarantees
√ Applicable □ Not applicable
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company as the parent for its subsidiaries | ||||||||
Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date (date of agreement signing) | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not |
Lu Thai (Vietnam) Textile Co., Ltd. | 25 January 2017 | 11,327.2 | 20 January 2017 | 0 | Joint-liability | Five years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 25 January 2017 | 19,468.63 | 20 January 2017 | 8,506.93 | Joint-liability | Five years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 27 October 2017 | 29,733.9 | 25 October 2017 | 7,186.78 | Joint-liability | Five years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 22 August 2018 | 7,787.45 | 20 August 2018 | 4,492.83 | Joint-liability | Three years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 29 March 2019 | 4,247.7 | 27 March 2019 | 0 | Joint-liability | Three years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 22 August 2018 | 2,831.8 | 20 August 2018 | 0 | Joint-liability | Two years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 29 March 2019 | 10,619.25 | 27 March 2019 | 0 | Joint-liability | Two years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 29 March 2019 | 31,857.75 | 27 March 2019 | 25,840.18 | Joint-liability | Two years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd. | 29 March 2019 | 5,592.81 | 27 March 2019 | 0 | Joint-liability | Two years since the approval of the board of the Company | No | Yes |
Lu Thai (Vietnam) Textile Co., Ltd./ Lu Thai (Tan | 28 September 2019 | 8,141.43 | 27 September 2019 | 5,578.52 | Three years since the approval of the board of the Company | No | Yes |
Chau) Textile Co., Ltd. | |||||||||||||||
Lu Thai (Tan Chau) Textile Co., Ltd. | 28 September 2019 | 7,079.5 | 27 September 2019 | 7,079.5 | Three years since the approval of the board of the Company | No | Yes | ||||||||
Lu Thai (Vietnam) Textile Co., Ltd. | 28 September 2019 | 12,035.15 | 27 September 2019 | 9,911.3 | Three years since the approval of the board of the Company | No | Yes | ||||||||
Lu Thai (Vietnam) Textile Co., Ltd. | 28 September 2019 | 3,185.78 | 27 September 2019 | 0 | Three years since the approval of the board of the Company | No | Yes | ||||||||
Total approved line for such guarantees in the Reporting Period (B1) | 0 | Total actual amount of such guarantees in the Reporting Period (B2) | 53,138.51 | ||||||||||||
Total approved line for such guarantees at the end of the Reporting Period (B3) | 153,908.35 | Total actual balance of such guarantees at the end of the Reporting Period (B4) | 68,596.04 | ||||||||||||
Guarantees provided between subsidiaries | |||||||||||||||
Obligor | Disclosure date of the guarantee line announcement | Line of guarantee | Actual occurrence date (date of agreement signing) | Actual guarantee amount | Type of guarantee | Term of guarantee | Having expired or not | Guarantee for a related party or not | |||||||
Total guarantee amount (total of the three kinds of guarantees above) | |||||||||||||||
Total guarantee line approved in the Reporting Period (A1+B1+C1) | 0 | Total actual guarantee amount in the Reporting Period (A2+B2+C2) | 53,138.51 | ||||||||||||
Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) | 153,908.35 | Total actual guarantee balance at the end of the Reporting Period (A4+B4+C4) | 68,596.04 | ||||||||||||
Total actual guarantee amount (A4+B4+C4) as % of the Company’s net assets | 8.74% | ||||||||||||||
Of which: | |||||||||||||||
Balance of guarantees provided for shareholders, actual controller and their related parties (D) | 0 |
Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) | 0 |
Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) | 0 |
Total of the three amounts above (D+E+F) | 0 |
Explanations about joint and several liability for repayment in respect of undue guarantee (if any) | Naught |
Explanation about external guarantee violating established procedure (if any) | The Company never provided guarantees for companies except controlling subsidiaries. |
Compound guarantees:
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted for Wealth Management
√ Applicable □ Not applicable
RMB’0,000
Specific type | Capital resources | Amount incurred | Undue Balance | Overdue amount |
Trusted financial products | Self-owned funds | 5,000 | 0 | 0 |
Total | 5,000 | 0 | 0 |
Particulars of entrusted cash management with single significant amount or low security, bad liquidity, and no capital preservation
√ Applicable □ Not applicable
RMB’0,000
Name of the trustee | Type of the trustee | Type of the product | Amount | Resource of funds | Initial date | Ended Date | Use of fund | Method of payment determination | Annual yield for reference | Estimate profit (if any) | Amount of actual profits or losses in Reporting Period | Actual recovery of profits or losses in Reporting Period | Amount withdrawn impairment provision (if any) | Whether go through stator procedures | Whether there is wealth management entrustment plan in future or not | Overview of the item and the related index for inquiring (if any) |
AVIC Trust Co., | Trust company | Constant return | 5,000 | Self-owned funds | Self-owned funds | 7 March 2019 | 9 March 2020 | No fixed directi | 8.00% | 400 | 402.19 | Timely recove | 0 | Yes | Not yet |
Ltd | on | ry | |||||||||||||
Total | 5,000 | -- | -- | -- | -- | -- | -- | 400 | 402.19 | -- | 0 | -- | -- | -- |
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment forentrusted asset management
□ Applicable √ Not applicable
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Social Responsibilities
1. Significant Environment Protection
Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protectionauthorities.Yes
Name of polluter | Name of major pollutants | Way of discharge | Number of discharge outlets | Distribution of discharge outlets | Discharge concentration | Discharge standards implemented | Total discharge | Approved total discharge | Excessive discharge |
Lu Thai Textile Co., Ltd | COD and ammonia nitrogen | Continuous discharge | 2 | Huangjiapu Industrial Park; East Zone Industrial Park | COD≤140mg/L; ammonia nitrogen≤5mg/L | Emission standard of water pollutants in textile dyeing and finishing industry GB 4287-2012 COD: 200mg/L, ammonia nitrogen: 20mg/L | COD is198.717t and ammonia nitrogen is 4.045t. | COD is1495.08t; ammonia nitrogen is 149.51t | No |
Lu Thai Textile Co., Ltd | COD and ammonia nitrogen | Continuous discharge | 1 | Lufeng chief discharge outlet | COD≤140mg/L; ammonia nitrogen≤6mg/L | Emission standard of water pollutants in textile dyeing and finishing | COD is 140.358t; ammonia nitrogen is 4.504t | COD is 575.985t; ammonia nitrogen is 57.6t | No |
industry GB 4287-2012 COD: 200mg/L, ammonia nitrogen: 20mg/L | |||||||||
Zibo Xinsheng Thermal Power Co., Ltd. | SO2, NQx, and smoke | Continuous discharge | 4 | Production plant of Xinsheng Thermal Power | SO2:≤35mg/m3, NQx:≤ 50 mg/m3, smoke:≤5mg/m3 | Emission standard of air pollutants of Thermal Power Plant in Shandong Province DB37/664-2019 | SO2 is 24.14t, NQx is 67.55t, and smoke is 2.424t. | SO2 is 259.09t, NQx is 740.25t, and smoke is 74.03t. | No |
Lu Thai (Vietnam) Textile Co., Ltd. | Sewage | Discharge into the ecological pond in the park district after treatment | 1 | Beside sewage plant | COD≤52mg/L; ammonia nitrogen≤1.5mg/L | QCVN40: 2011/BTNMT | Sewage discharge is 517,000 t. | / | No |
Lu Thai (Vietnam) Textile Co., Ltd. | Exhaust gas | Direct discharge after treatment | 4 | Beside boiler room | / | QCVN19: 2009/BTNMT | Gas emission is 105 million m3. | / | No |
Construction of pollution prevention equipment and operation conditionLu Thai Textile Co., Ltd. and its majority-owned subsidiary Lufeng Weaving & Dyeing Co., Ltd. strictly implement the “ThreeSimultaneous” management system for environmental protection in project constructions. The companies are equipped withcomplete facilities for waste gas and waste water treatment. Lu Thai Textile Co., Ltd. and its majority-owned subsidiary LufengWeaving & Dyeing Co., Ltd. carried out the waste water treatment system transformation project to improve the treated water qualityby systematic and comprehensive reform, further improving the river water quality and local ecological environment. In May 2020,Lu Thai Textile Co., Ltd. and its majority-owned subsidiary Lufeng Weaving & Dyeing Co., Ltd. uploaded the emission data ofVOCs to the government environmental monitoring system so as to monitor the emission data of VOCs comprehensively. Supportteams were set up to be responsible for daily operation maintenance and inspection to guarantee the normal operation of facilities.Both the exhaust emission and waste water discharge meet the emission standards.The wholly-owned subsidiary Zibo Xinsheng Thermal Power Co., Ltd. enforces the “Three Simultaneous” management system forenvironmental protection in extension project construction in accordance with the government requirements, and adopts the“limestone-gypsum method” to reduce emission concentration of sulfur dioxide, the “Low-nitrogen combustion + SNCR” and“SNCR+SCR method” to reduce emission concentration of nitrogen oxides, and the “electric-bag electrostatic precipitator + wetelectrostatic precipitator” to reduce soot emission concentration. The overall system works well.The waste water treatment project of the wholly-owned subsidiary Lu Thai (Vietnam) Textile Co., Ltd. is designed to treat 6,500 tons
of sewage water daily, among which, sewage plan I is designed to treat 3,000 tons of sewage water daily, and the sewage plant II isdesigned to treat 3,500 tons of sewage water daily. The Company adopts a comprehensive treatment process of “pre-materialization +A2O biochemistry + post-materialization + ozone oxidation+ active sand filtration” for waste water treatment, and the treated waterquality is better than the QCVN 40: 2011/BTNMT A-level emission standards stipulated by the Vietnam government. The treatedwaste water is all discharged to the ecological pond in the park. Treated water quality analysis for the first half year of 2020: TheCOD (mean value) was 50.7 mg/L, the chrominance (mean value) was 27, the ammonia nitrogen (mean value) was 0.65 mg/L, andthe total phosphorus (mean value) was 0.35 mg/L. All the parameters met the A-level emission standards set in the “Regulations onParameters of Industrial Drainage in Vietnam” (QCVN40: 2011/BTNMT). Waste water discharge in the whole year met the standardswithout violation. The total amount of waste water discharged in the first half year of 2020 was 517,000 tons, among which, thechemical oxygen demand (COD) was 26.96 tons, ammonia nitrogen (NH3-N) was 0.28 tons and total phosphorus (TP) was 0.17 ton.The Company is equipped with multi-pipe and water film dust-separation devices to process the exhaust gas discharged from boilersof the Company. In the first half year of 2020, all the equipment was in normal operation, and the exhaust gas inspection parameterswere lower than the QCVN19: 2009/BTNMT emission standards set by Vietnam government. In the first half year of 2020, the totalamount of sulfur dioxide emissions was 21.6 tons, and the total amount of nitrogen oxides emissions was 17.7 tons.Project Environmental Impact Assessment and Other Administrative Permission for Environmental ProtectionIn 2020, the main part of “Lu Thai Textile Co., Ltd. High-Concentration PVA Wastewater Treatment and Sewage ComprehensiveUpgrading Project (1)” has been completed and entered the commissioning stage; the “Lu Thai Textile Co., Ltd. IntelligentTechnology Upgrading Project of 25 million-meter High-grade Fabric Production Line” has been approved and is under construction;the “Engineering Technology Research Institute Project” has been established and entered the stage of preparing the environmentalassessment report; the “Technology Upgrading Project of Regenerated Fibre Production Line and Colored Spun Yarn” has beenestablished and entered the stage of preparing the environmental assessment report; the “Lufeng Weaving and Dyeing Co., Ltd.High-end Printing and Dyeing Fabric Production Line Project” of the holding subsidiary Lufeng Weaving and Dyeing Co., Ltd. hasbeen approved and is under construction.The wholly-owned subsidiary Zibo Xinsheng Thermal Power Co., Ltd. obtained the“Response of the Environmental Impact Report of the Shandong Provincial Department of Environmental Protection on theExtension Project of Zibo Xinsheng Thermal Power Co., Ltd.” (Luhuanjian [2015] No. 241), expansion project II The period is underconstruction. The wholly-owned subsidiary Lu Thai (Vietnam) Co., Ltd. Spinning Phase I and Dyeing Park Phase I environmentalprotection projects have been completed and accepted for confirmation. The spinning phase II and yarn dyeing park Phase IIenvironmental assessment reports have been approved.Emergency plan for environmental incidentsLu Thai Textile Co., Ltd. and its majority-owned subsidiary Lufeng Weaving & Dyeing Co., Ltd. prepared the Emergency Plan forEnvironmental Incidents, which was filed with Zibo Environmental Protection Bureau Xichuan Branch. The wholly-ownedsubsidiary Zibo Xinsheng Thermal Power Co., Ltd. has formulated the “Emergency Plan for Environmental Incidents” and filed itwith the environmental protection management department. The identification and risk assessment of environmental risk sources,prevention and early warning mechanisms, emergency protection and supervision and management were included in the plan. Thewholly-owned subsidiary Lu Thai (Vietnam) Co., Ltd. has prepared emergency plans for different environmental incidents to reducetheir impacts.Environmental self-monitoring programLu Thai Textile Co., Ltd. and its majority-owned subsidiary Lufeng Weaving & Dyeing Co., Ltd. observed the requirements of thecompetent environment authorities to install online monitoring devices to monitor sewage and waste gas. They establishedenvironmental self-test plans strictly in accordance with the “Guidance for Pollutant Discharge Units on Self-monitoring Technology- Textile and Dyeing Industry”. In addition, they invited a qualified testing institution to conduct tests on sewage and waste gasaccording to the frequency requirement in the self-monitoring plan, duly disclosed the monitoring data to the Shandong PollutionSource Self-monitoring Sharing System, and submitted the test reports to the competent environment authorities. The wholly-ownedsubsidiary Zibo Xinsheng Thermal Power Co., Ltd. has implemented online real-time monitoring of environmental data in
accordance with the requirements of the superior environmental protection department, and has achieved emission standards. Thewholly-owned subsidiary Lu Thai (Vietnam) Co., Ltd. installs automatic sewage sampling and water quality automatic onlinemonitoring devices, real-time automatic sampling and online monitoring of sewage effluent water quality; the company invitesexternal qualified testing institutions to conduct sewage, sludge and exhaust gas quarterly Test and submit the test report to theenvironmental supervision department.Other environment information that should be disclosedNoOther related environment protection informationNo
2. Measures Taken for Targeted Poverty Alleviation
(1) Plans
The Company assumes social responsibilities by carrying out poverty alleviation. The Company helps poor people to find jobs andpeasants financially in the areas where majority-owned subsidiaries locate to maintain their basic livelihood.
(2) Summary of the Related Work Done in the Reporting Period
The Company assumes social responsibilities by carrying out poverty alleviation. The Company helps poor people to find jobs andpeasants financially in the areas where majority-owned subsidiaries locate to maintain their basic livelihood.
(3) Results
Indicator | Measurement unit | Quantity/Progress |
I. General results | —— | —— |
Of which: 1.1 Funds | Ten thousand | 20.58 |
1.3. Number of people out of poverty being helped to establish archival cards | Person | 31 |
II. Itemized results | —— | —— |
1. Out of poverty by industrial development | —— | —— |
2. Out of poverty by transferring employment | —— | —— |
2.3 Number of poverty-stricken family in employment being helped to establish archival cards | Person | 31 |
3. Out of poverty by relocation | —— | —— |
4. Out of poverty by education | —— | —— |
5. Out of poverty by improving health | —— | —— |
6. Out of poverty by protecting ecological environment | —— | —— |
7. Subsidy for the poorest | —— | —— |
8. Social poverty alleviation | —— | —— |
9. Other items | —— | —— |
9.2 Amount of input | Ten thousand | 20.58 |
III. Accolades received (for what and at what level) | —— | —— |
(4) Subsequent Plans
None
XVII Other Significant Events
√ Applicable □ Not applicable
The Company reviewed and approved various proposals including the Proposal of the Company’s Plan for the Public Issue of AShare Convertible Bonds during the 28
th Meeting of the 8
th Board of Directors and the 3
rdExtraordinary Shareholders Meeting in2019. Please refer to relevant announcements (No.: 2019-039, 2019-041, 2019-042, 2019-043, 2019-044, 2019-045 and 2019-059)respectively issued on 24 May 2019 and 17 September 2019 via www.cninfo.com.cn for details.The Company received the CSRC Administrative License Application Acceptance Notice on 15 October 2019 and the Notice on FirstFeedback of CSRC Administrative License Project Review on 19 November 2019. Please refer to relevant announcements (No.:
2019-064 and 2019-068) respectively issued on 16 October 2019 and 20 November 2019 via www.cninfo.com.cn for details.On 27 November 2019, the Company held the 7
th
Meeting of the 9
th
Board of Directors, and reviewed and approved five proposalsincluding the Proposal of Adjusting the Fund-raising Scale of A Share Convertible Bonds to Be Publicly Issued by the Company.Please refer to relevant announcements (No.: 2019-074, 2019-075, 2019-076, 2019-077 and 2019-078) issued on 28 November 2019via www.cninfo.com.cn for details.On 29 November 2019, the Company disclosed the Reply on the First Feedback of A Share Convertible Bonds Public IssueApplication Documents of Lu Thai Textile (Announcement No.: 2019-079); on 2 January 2020, the Company received the Notice onMaking Preparations for the Lu Thai Textiles’ Convertible Bonds Public Issue IEC Meeting and replied. Please refer to relevantannouncement (No.: 2020-001) and the Reply on the Notice on Making Preparations for the Lu Thai Textiles’ Convertible BondsPublic Issue IEC Meeting issued on 3 January 2020 via www.cninfo.com.cn for details.On 9 January 2020, the Company’s application for the public issue of A Share convertible bonds was approved by the IssuanceExamination Committee (IEC) of CSRC. On 6 March 2020, the Company received the Reply on Approving the Public Issue ofConvertible Bonds by Lu Thai Textile Co., Ltd. (ZJXK [2020] No. 299) issued by CSRC. Please refer to relevant announcements(No.: 2020-002 and 2020-010) respectively issued on 10 January 2020 and 7 March 2020 via www.cninfo.com.cn for details.On 3 April 2020, the Company held the 10
th Meeting of the 9
thBoard of Directors. In the meeting, the Company reviewed andapproved the Proposal of Further Establishing the Concrete Scheme for the Company’s Public Issue of A Share Convertible Bonds,the Proposal of the Listing of the Company’s Public Issue of A Share Convertible Bonds and the Proposal of Opening A SpecialAccount for the Funds Raised for the Company’s Public Issue of A Share Convertible Bonds and Signing the Raised FundSupervision Agreement, and disclosed the Prospectus and Summary for the Public Issue of A Share Convertible Bonds viawww.cninfo.com.cn. Please refer to relevant announcements and documents (No.: 2020-011, 2020-013 and 2020-014) for details.The Company issued the Prompt Notice on the Public Issue of A Share Convertible Bonds, Announcement on the DTOR for thePublic Issue of A Share Convertible Bonds and the Placement Priority Result, Announcement on the Online Lot-winning Result of thePublic Issue of A Share Convertible Bonds and Announcement on the Result of the Public Issue of A Share Convertible Bondsrespectively on 9 April, 10 April, 13 April and 15 April in 2020. Please refer to relevant announcements (No.: 2020-017, 2020-018,2020-020 and 2020-022) issued via www.cninfo.com.cn for details.
On 12 May 2020, the Company published the “Announcement on the Listing of A-Share Convertible Corporate Bonds throughPublic Offering”. On 13 May 2020, Lu Thai’s convertible corporate bonds were listed on Shenzhen Stock Exchange for trading. Theduration of the bonds was set from 9 April 2020 to 8 April 2026. The period for converting into shares will be from 15 October 2020to 8 April 2026. For more detail, refer to the announcement (No.: 2020-043) on www.cninfo.com.cn.On 2 July 2020, the Company published the “Announcement on the Adjustment to the Price for Converting Convertible CorporateBonds into Shares”. According to the “Proposal on the Company’s Profit Distribution Plan for 2019”, which was considered andapproved at the Company’s Annual General Meeting of 2019 held on 21 May 2020, a cash amount of RMB 1.00 (inclusive of tax)would be distributed to every 10 shares, with the 858,121,541 shares of share capital on 31 December 2019 as the base. The shareregistration date for the Company’s equity distribution of 2019 was 8 July 2020 and the ex-rights and ex-dividend date was 9 July2020. Therefore, the share conversion price of “Lu Thai Convertible Bonds” was adjusted from RMB 9.01 per share to RMB 8.91 pershare, and the new price after the adjustment took effect on and as of 9 July 2020 (the ex-rights and ex-dividend date). For moredetail, refer to the announcement (No.: 2020-054) on www.cninfo.com.cn.
XVIII Significant Events of Subsidiaries
□ Applicable √ Not applicable
Part VI Share Changes and Shareholder InformationI. Share Changes
1. Share Changes
Unit: share
Before | Increase/decrease (+/-) | After | |||||||
Number | Percentage (%) | New issues | Bonus shares | Bonus issue from profit | Other | Subtotal | Number | Percentage (%) | |
1. Restricted shares | 119,038,937 | 13.87% | 8,438 | 8,438 | 119,047,375 | 13.87% | |||
1.3 Shares held by other domestic investors | 806,537 | 0.09% | 8,438 | 8,438 | 814,975 | 0.09% | |||
Shares held by domestic natural person | 806,537 | 0.09% | 8,438 | 8,438 | 814,975 | 0.09% | |||
1.4 Oversea shareholdings | 118,232,400 | 13.78% | 118,232,400 | 13.78% | |||||
Among which: shares held by oversea legal person | 118,232,400 | 13.78% | 118,232,400 | 13.78% | |||||
Shares held by oversea natural person | 0 | ||||||||
2. Unrestricted shares | 739,082,604 | 86.13% | -8,438 | -8,438 | 739,074,166 | 86.13% | |||
2.1 RMB ordinary shares | 561,264,288 | 65.41% | -8,438 | -8,438 | 561,255,850 | 65.41% | |||
2.2 Domestically listed foreign shares | 177,818,316 | 20.72% | 177,818,316 | 20.72% | |||||
3. Total shares | 858,121,541 | 100.00% | 0 | 0 | 858,121,541 | 100.00% |
Reasons for the share changes
√ Applicable □ Not applicable
Due to the demission of Senior Executive, China Securities Depository and Clearing Co., Ltd. Shenzhen Branch adjusted the numberof lock-up shares held by Senior Executive.Approval of share changes:
√ Applicable □ Not applicable
The foreign sponsor shareholder of the Company, Tailun (Thailand) Textile Co., Ltd. holds 118,232,400 non-listed foreign shares,which have changed the registration to be restricted tradable B-shares with 1 year restricted period at China Securities Depositoryand Clearing Co., Ltd. Shenzhen Branch 30 June 2020, and the restriction shall be unlocked on 1 July 2021.Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchases:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinaryshareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Name of shareholder | Beginning restricted shares | Increased in Reporting Period | Unlocked in Reporting Period | Ending restricted shares | Reason for restriction | Date of unlocking |
Lyu Yongchen | 25,312 | 8,438 | 33,750 | Locked the shareholding of the Senior Executives | 6 months after the expiration of the original term | |
Total | 25,312 | 0 | 8,438 | 33,750 | -- | -- |
II Issuance and Listing of Securities
√ Applicable □ Not applicable
Name of stocks and derivative securities | Issued date | Issue price (or interest rate) | Number | Listing date | Number of listed transaction with approval | Termination date | Index to disclosed information | Disclosure date |
Stock | ||||||||
Convertible bonds, separate bargaining convertible bonds and corporate bonds | ||||||||
Lu Thai convertible bond | 9 April 2020 | 100 | 14,000,000 | 13 May 2020 | 14,000,000 | 8 April 2026 | Announcement of Resolution (No. 2020-013) published on Securities Times, China Securities Journal, Shanghai Securities News, and Hong Kong | 7 April 2020 |
Ta Kung Pao and http://www.cninfo.co on 7 April 2020 | ||
Other derivative securities |
Notes to securities issuance during the Reporting Period:
On 9, 10, 13 and 15 April 2020, the Company published the “Suggestive Announcement on the Issue of A-Share ConvertibleCorporate Bonds through Public Offering”, the “Announcement on the Online Winning Rate and Priority Allotment Result of thePublic Offering of A-Share Convertible Corporate Bonds”, the “Announcement on the Online Winning Result of the Public Offeringof A-Share Convertible Corporate Bonds”, and the “Announcement on the Result of the Issue of A-Share Convertible CorporateBonds through Public Offering”. For more detail, refer to the related announcements (No: 2020-017, 2020-018, 2020-020 and2020-022) on www.cninfo.com.cn. On 9 April, the Company issued convertible corporate bonds of RMB 1.4 billion (14 millionbonds) on Shenzhen Stock Exchange under the short name of Lu Thai Convertible Bonds with the bond code of 127016.On 12 May 2020, the Company published the “Announcement on the Listing of A-Share Convertible Corporate Bonds throughPublic Offering”. On 13 May 2020, Lu Thai’s convertible corporate bonds were listed on Shenzhen Stock Exchange for trading. Theduration of the bonds was set from 9 April 2020 to 8 April 2026. The period for converting into shares will be from 15 October 2020to 8 April 2026. For more detail, refer to the announcement (No.: 2020-043) on www.cninfo.com.cn.On 2 July 2020, the Company published the “Announcement on the Adjustment to the Price for Converting Convertible CorporateBonds into Shares”. According to the “Proposal on the Company’s Profit Distribution Plan for 2019”, which was considered andapproved at the Company’s Annual General Meeting of 2019 held on 21 May 2020, a cash amount of RMB 1.00 (inclusive of tax)would be distributed to every 10 shares, with the 858,121,541 shares of share capital on 31 December 2019 as the base. The shareregistration date for the Company’s equity distribution of 2019 was 8 July 2020 and the ex-rights and ex-dividend date was 9 July2020. Therefore, the share conversion price of “Lu Thai Convertible Bonds” was adjusted from RMB 9.01 per share to RMB 8.91 pershare, and the new price after the adjustment took effect on and as of 9 July 2020 (the ex-rights and ex-dividend date). For moredetail, refer to the announcement (No.: 2020-054) on www.cninfo.com.cn.III Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of ordinary shareholders at the period-end | 58,376 | Total number of preference shareholders with resumed voting rights at the period-end (if any) (see Note 8) | 0 | ||||||||
5% or greater ordinary shareholders or the top 10 ordinary shareholders | |||||||||||
Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Total shares held at the period-end | Increase/decrease during the Reporting Period | Number of restricted shares held | Number of non-restricted shares held | Pledged or frozen shares | ||||
Status | Number | ||||||||||
Zibo Lucheng Textile Investment Co., Ltd. | Domestic non-state-owned legal person | 16.36% | 140,353,583 | 0 | 0 | 140,353,583 |
Tailun (Thailand) Textile Co., Ltd. | Foreign legal person | 13.78% | 118,232,400 | 0 | 118,232,400 | |||||
Hong Kong Securities Clearing Co. Ltd | Foreign legal person | 2.70% | 23,180,137 | -2,520,512 | 23,180,137 | |||||
Central Huijin Assets Management Co., Ltd. | State-owned legal person | 2.37% | 20,315,300 | 0 | 20,315,300 | |||||
China Securities Finance Corporation Limited | Domestic non-state-owned legal person | 2.13% | 18,313,391 | 0 | 18,313,391 | |||||
T.ROWE PRICE INTL DISCOVERY FUND | Foreign legal person | 1.71% | 14,712,012 | -5,236,207 | 14,712,012 | |||||
Hong Kong Monetary Authority-self-owned funds | Foreign legal person | 1.49% | 12,754,384 | -1,287,500 | 12,754,384 | |||||
National Social Security Fund Portfolio 413 | Domestic non-state-owned legal person | 1.09% | 9,360,051 | 1,050,000 | 9,360,051 | |||||
First State Investment Management (Britain) Co., Ltd.- First State China A Share Fund | Foreign legal person | 1.02% | 8,764,322 | 3,350,322 | 8,764,322 | |||||
Generali China Life Insurance Co., Ltd.-Dividend product 2 | Domestic non-state-owned legal person | 0.63% | 5,385,759 | -1,279,200 | 5,385,759 | |||||
Strategic investors or general corporations becoming top-ten shareholders due to placing of new shares (if any) (see Note 3) | Naught | |||||||||
Related or acting-in-concert parties among the shareholders above | Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder and the actual controller of the Company. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder and the foreign sponsor of the Company. All the other shareholders are holding tradable A-shares or B-shares. And it is unknown whether there is any related party or acting-in-concert party among them. | |||||||||
Shareholdings of the top ten non-restricted ordinary shareholders | ||||||||||
Name of shareholder | Number of non-restricted shares held at the period-end | Type of shares | ||||||||
Type | Shares | |||||||||
Zibo Lucheng Textile Investment Co., Ltd. | 140,353,583 | RMB ordinary share | 140,353,583 | |||||||
Hong Kong Securities Clearing Co. Ltd | 23,180,137 | RMB ordinary share | 23,180,137 | |||||||
Central Huijin Assets Management Co., Ltd. | 20,315,300 | RMB ordinary | 20,315,300 |
share | |||
China Securities Finance Corporation Limited | 18,313,391 | RMB ordinary share | 18,313,391 |
T.ROWE PRICE INTL DISCOVERY FUND | 14,712,012 | Domestically listed foreign share | 14,712,012 |
Hong Kong Monetary Authority-self-owned funds | 12,754,384 | RMB ordinary share | 12,754,384 |
National Social Security Fund Portfolio 413 | 9,360,051 | RMB ordinary share | 9,360,051 |
First State Investment Management (Britain) Co., Ltd.- First State China A Share Fund | 8,764,322 | RMB ordinary share | 8,764,322 |
Generali China Life Insurance Co., Ltd.-Dividend Product 2 | 5,385,759 | RMB ordinary share | 5,385,759 |
Industrial and Commercial Bank of China- Fullgoal CSI Dividend Index Enhanced Securities Investment Funds | 5,270,243 | RMB ordinary share | 5,270,243 |
Explanation on connected relationship among the top ten shareholders of tradable share not subject to trading moratorium, as well as among the top ten shareholders of tradable share not subject to trading moratorium and top ten shareholders, or explanation on acting-in-concert | Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder and the actual controller of the Company. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder and the foreign sponsor of the Company. All the other shareholders are holding tradable A-shares or B-shares. And it is unknown whether there is any related party or acting-in-concert party among them. | ||
Particular about shareholder participate in the securities lending and borrowing business (if any) (note 4) | Naught |
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.IV Change of the Controlling Shareholder or the Actual ControllerChange of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Part VII Preferred Shares
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Part VIII Convertible Corporate Bonds
√ Applicable □ Not applicable
I Previous Adjustments of Conversion PriceOn 9 April 2020, the Company publicly issued 14 million A-share convertible corporate bonds (short name: Lu Thai ConvertibleBonds, bond code: 127016) on Shenzhen Stock Exchange with an issue price of RMB100 per share and a share conversion price ofRMB9.01 per share. The bonds were listed on Shenzhen Stock Exchange on 13 May 2020. In accordance with related terms of the“Prospectus for the Public Offering of A-Share Convertible Corporate Bonds of Lu Thai Textile Co., Ltd.”, as well as the regulationsof China Securities Regulatory Commission on the public offering of convertible corporate bonds, if the Company has anydistribution of share dividends, conversion into share capital, additional issue of new shares (excluding share capital increase due toconversion into shares from the convertible corporate bonds issued this time), share allotment and distribution of cash dividends afterthe issue of “Lu Thai Convertible Bonds”, adjustment shall be made to the share conversion price. On 21 May 2020, the Companyheld the Annual General Meeting of 2019, where the “Proposal on the Company’s Profit Distribution Plan for 2019” was consideredand approved. According to the Proposal, a cash amount of RMB 1.00 (inclusive of tax) would be distributed to every 10 shares, withthe 858,121,541 shares of share capital on 31 December 2019 as the base. The share registration date for the Company’s equitydistribution of 2019 was 8 July 2020 and the ex-rights and ex-dividend date was 9 July 2020. Therefore, the share conversion price of“Lu Thai Convertible Bonds” was adjusted from RMB9.01 per share to RMB8.91 per share, and the new price after the adjustmenttook effect on and as of 9 July 2020 (the ex-rights and ex-dividend date).
II Accumulative Conversion
□ Applicable √ Not applicable
III Top 10 Convertible Bond Holders
Unit: share
No. | Name of holders | Nature of holders | Number of convertible bonds held at the period-end (share) | Amount of convertible bonds held at the period-end (RMB) | As % of convertible bonds held at the period-end |
1 | Guosen Securities Co., Ltd. | State-owned legal person | 1,600,001 | 160,000,100.00 | 11.43% |
2 | China Pacific Insurance (Group)Co., Ltd.-Dividend- Individual dividends | Domestic non-state-owned legal person | 637,716 | 63,771,600.00 | 4.56% |
3 | Shanghai Pudong Development Bank-E Fund | Domestic | 512,435 | 51,243,500.00 | 3.66% |
Yuxiang Return Bond Securities Investment Fund | non-state-owned legal person | ||||
4 | Industrial and Commercial Bank of China-Fullgoal TianLi Growth Bond Investment Fund | Domestic non-state-owned legal person | 467,938 | 46,793,800.00 | 3.34% |
5 | Industrial and Commercial Bank of China-China Universal Convertible Bond Securities Investment Fund | Domestic non-state-owned legal person | 445,714 | 44,571,400.00 | 3.18% |
6 | National Social Security Fund Portfolio 005 | Domestic non-state-owned legal person | 425,369 | 42,536,900.00 | 3.04% |
7 | ICBC Credit Suisse Tainfeng Convertible Benefit Pension Product-Bank of China Limited | Domestic non-state-owned legal person | 409,986 | 40,998,600.00 | 2.93% |
8 | China Everbright Bank-E Fund Yujing Tianli 6-month Regular Open Bond Securities Investment Fund | Domestic non-state-owned legal person | 356,534 | 35,653,400.00 | 2.55% |
9 | Essence Securities Co., Ltd. | State-owned legal person | 277,400 | 27,740,000.00 | 1.98% |
10 | ICBC Credit Suisse Fund-China Minsheng Bank Corp. Ltd.-Jiangsu International Trust-Jiangsu Trust·Minsheng Wealth Single Fund Trust | Domestic non-state-owned legal person | 256,132 | 25,613,200.00 | 1.83% |
IV Significant Changes in Profitability, Assets Condition and Credit Status of Guarantors
□ Applicable √ Not applicable
V The Company’s Liabilities, Credit Changes at the Period-end and Cash Arrangements toRepay Debts in Future Years
1. YoY changes of main financial index between the period-end and the end of last year (or the same reporting period as prior year)
Item | Period-end | The end of last year | Increase/decrease |
Current ratio | 189.60% | 132.78% | 56.83% |
Asset-liability ratio | 34.28% | 30.17% | 4.10% |
Quick ratio | 96.35% | 56.78% | 39.57% |
Reporting Period | Same period of last year | YoY increase/decrease | |
EBITDA interest coverage ratio | 10.66 | 16.49 | -5.83 |
Rate of redemption | 100% | 100% | - |
Interest coverage | 100% | 100% | - |
Major reasons for more than 30% year-on-year changes in the aforementioned accounting data and financial indicators: the currentratio as at the end of this Reporting Period increased by 56.83% from the end of last year, which was mainly due to the increase inthe monetary fund in current assets after the Company issued the convertible corporate bonds; the quick ratio as at the end of thisReporting Period increased by 39.57% from the end of last year, which was mainly due to the increase in the monetary fund in quickassets after the Company issued the convertible corporate bonds.
2. United Credit Ratings Co., Ltd. (hereinafter referred to as “Untied Ratings”), the credit ratings institution of the Company’sconvertible bonds, issued the “Credit Ratings Report on the A-Share Convertible Corporate Bonds Publicly Issued by Lu Thai TextileCo., Ltd.” on 27 September 2019. According to the Report, the Company’s corporate credit rating was “AA+” with a rating outlookof “Stable”, and the bond credit rating was “AA+”. United Ratings will perform follow-up rating once every year during the durationof the corporate bonds. On 17 June 2020, United Ratings issued the “Follow-up Ratings Report of 2020 for the ConvertibleCorporate Bonds of Lu Thai Textile Co., Ltd.”. According to the Report, the Company’s corporate credit rating remained “AA+” andthe bond credit rating remained “AA+”. Disclosure index: “Follow-up Ratings Report of 2020 for the Convertible Corporate Bondsof Lu Thai Textile Co., Ltd.” was disclosed on www.cninfo.com.cn on 19 June 2020.
Part IX Directors, Supervisors and Senior Management
I Change in Shareholdings of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name | Office title | Incumbent/former | Beginning shareholding (share) | Increase in the Current Period (share) | Decrease in the Current Period (share) | Ending shareholding (share) | Number of granted restricted shares at the period-begin (share) | Number of restricted shares granted in the Current Period (share) | Number of granted restricted shares at the period-end (share) |
Liu Zibin | Chairman and GM | Incumbent | 148,290 | 148,290 | |||||
Xu Zhinan | Vice President | Incumbent | |||||||
Fujiwara Hidetoshi | Director | Incumbent | |||||||
Chen Ruimou | Director | Incumbent | |||||||
Zeng Facheng | Director | Incumbent | |||||||
Wang Fangshui | Director, Vice GM, and Chief Engineer | Incumbent | 146,753 | 146,753 | |||||
Liu Deming | Director, controller of Global Marketing Department | Incumbent | |||||||
Qin Guiling | Director | Incumbent | 126,542 | 126,542 | |||||
Zhang Hongmei | Director and Chief Accountant | Incumbent | 92,500 | 92,500 |
Zhou Zhiji | Independent director | Incumbent | |||||||
Bi Xiuli | Independent Director | Incumbent | |||||||
Pan Ailing | Independent Director | Incumbent | |||||||
Wang Xinyu | Independent Director | Incumbent | |||||||
Qu Dongmei | Independent director | Incumbent | |||||||
Zhang Shougang | Supervisory Committee Chairman, Controller of Human Resources Department | Incumbent | 73,100 | 73,100 | |||||
Liu Zilong | Supervisor | Incumbent | 10,000 | 10,000 | |||||
Dong Shibing | Supervisor, Manager of Logistics Management Department | Incumbent | 5,000 | 5,000 | |||||
Zhang Jianxiang | Vice president, controller of Functional Fabric Manufacturing Center | Incumbent | 52,150 | 52,150 | |||||
Wang Jiabin | Vice president, Security Controller, Controller of Yarn-dyed Fabric Manufacturing Center | Incumbent | 83,700 | 83,700 | |||||
Zhang Zhanqi | Vice president, controller of Dyeing and Finishing Fabric Manufacturing Center | Incumbent | 80,300 | 80,300 | |||||
Zhang Keming | Board Secretary, controller of Financial Management Department | Incumbent | 77,700 | 77,700 |
Li Wenji | CIO | Incumbent | 10,000 | 10,000 | |||||
Zhang Wei | Controller of Strategy and Market Department | Incumbent | |||||||
Wang Changzhao | Vice controller of Global Marketing Department | Incumbent | 22,500 | 22,500 | |||||
Fujiwara Matsuzaka | GM of Japan Office | Incumbent | |||||||
Yu Shouzheng | Controller of Energy and Environment Protection Department | Incumbent | 83,100 | 83,100 | |||||
Shang Chenggang | Controller of Garment Manufacturing Center | Incumbent | 30,000 | 30,000 | |||||
Du Lixin | Deputy chief engineer, Executive Dean of Lu Thai Engineering Technology Institute | Incumbent | |||||||
Guo Heng | Manager of Business Management | Incumbent | |||||||
Lyu Yongchen | Non-director senior executive | Former | 33,750 | 33,750 | |||||
Total | -- | -- | 1,075,385 | 0 | 0 | 1,075,385 | 0 | 0 | 0 |
II Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name | Office title | Type of change | Date of change | Reason for change |
Lyu Yongchen | Non-director senior executive | Former | 2 March 2020 | Left for personal reason |
Part X Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of thisReport or were due but could not be redeemed in full?No
Part XI Financial StatementsI Independent Auditor’s ReportAre these interim financial statements audited by an independent auditor?
□Yes √ No
They are unaudited by such an auditor.
II Financial StatementsCurrency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Lu Thai Textile Co., Ltd.
30 June 2020
Unit: RMB
Item | 30 June 2020 | 31 December 2019 |
Current assets: | ||
Monetary assets | 2,028,297,550.15 | 924,322,008.17 |
Held-for-trading financial assets | 52,356,098.85 | |
Derivative financial assets | ||
Notes receivable | 72,130,996.17 | 104,737,949.91 |
Accounts receivable | 390,917,955.82 | 515,306,599.62 |
Accounts receivable financing | 14,807,543.11 | 26,963,818.87 |
Prepayments | 61,112,805.74 | 56,828,987.59 |
Other receivables | 34,453,389.96 | 59,743,471.84 |
Including: Interest receivable | ||
Dividends receivable | ||
Financial assets purchased under resale agreements | ||
Inventories | 2,595,135,869.67 | 2,421,500,259.30 |
Contract assets | ||
Assets held for sale | ||
Current portion of non-current assets | ||
Other current assets | 79,489,297.56 | 68,788,674.10 |
Total current assets | 5,276,345,408.18 | 4,230,547,868.25 |
Non-current assets: | ||
Long-term receivables | 7,080,682.04 | 7,058,233.71 |
Long-term equity investment | 149,646,776.65 | 103,226,300.00 |
Other equity instrument investment | ||
Other non-current financial assets | 138,519,880.41 | 278,149,500.00 |
Investment property | 44,888,691.70 | 45,896,747.87 |
Fixed assets | 5,911,198,566.20 | 6,012,094,104.67 |
Construction in progress | 543,763,930.47 | 400,235,070.01 |
Intangible assets | 508,639,397.75 | 516,479,519.15 |
Development costs | ||
Goodwill | 20,563,803.29 | 20,563,803.29 |
Long-term deferred expenses | 157,331,360.54 | 153,031,253.79 |
Deferred income tax assets | 97,673,474.64 | 99,307,233.72 |
Other non-current assets | 7,754,157.78 | 18,841,918.62 |
Total non-current assets | 7,587,060,721.47 | 7,654,883,684.83 |
Total assets | 12,863,406,129.65 | 11,885,431,553.08 |
Current liabilities: | ||
Short-term borrowings | 1,881,237,261.83 | 2,120,154,330.61 |
Held-for-trading financial liabilities | 841,402.78 | |
Derivative financial liabilities | ||
Notes payable | 3,233,148.00 | 85,219,724.63 |
Accounts payable | 224,782,981.19 | 305,346,284.94 |
Advances from customers | 108,783,148.03 | |
Contract liabilities | 111,405,604.38 | |
Payroll payable | 275,261,176.37 | 335,576,560.36 |
Taxes payable | 33,128,004.92 | 25,051,630.06 |
Other payables | 195,332,422.01 | 104,982,189.40 |
Including: Interest payable | ||
Dividends payable | 86,253,267.74 | 441,113.64 |
Current portion of non-current liabilities | 57,591,068.49 | 101,111,297.49 |
Other current liabilities | ||
Total current liabilities | 2,782,813,069.97 | 3,186,225,165.52 |
Non-current liabilities: |
Provision for insurance contracts | ||
Long-term borrowings | 14,159,000.00 | 42,364,019.74 |
Bonds payable | 1,324,932,419.54 | |
Long-term payables | ||
Long-term payroll payable | 52,317,084.85 | 105,589,249.56 |
Provisions | ||
Deferred income | 162,647,704.62 | 157,668,211.41 |
Deferred income tax liabilities | 70,536,666.51 | 92,440,358.41 |
Other non-current liabilities | 1,840,000.00 | 1,840,000.00 |
Total non-current liabilities | 1,626,432,875.52 | 399,901,839.12 |
Total liabilities | 4,409,245,945.49 | 3,586,127,004.64 |
Owners’ equity: | ||
Share capital | 858,121,541.00 | 858,121,541.00 |
Other equity instruments | 71,391,357.42 | |
Capital reserves | 258,046,245.42 | 258,046,245.42 |
Less: Treasury stock | ||
Other comprehensive income | 112,921,882.51 | 91,626,571.75 |
Specific reserve | ||
Surplus reserves | 1,117,267,351.63 | 1,117,267,351.63 |
General reserve | ||
Retained earnings | 5,430,381,040.24 | 5,372,073,615.12 |
Total equity attributable to owners of the Company as the parent | 7,848,129,418.22 | 7,697,135,324.92 |
Non-controlling interests | 606,030,765.94 | 602,169,223.52 |
Total owners’ equity | 8,454,160,184.16 | 8,299,304,548.44 |
Total liabilities and owners’ equity | 12,863,406,129.65 | 11,885,431,553.08 |
Legal representative: Liu Zibin Chief Accountant: Zhang HongmeiFinancial Manager: Zhang Keming
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item | 30 June 2020 | 31 December 2019 |
Current assets: | ||
Monetary assets | 1,357,902,448.38 | 259,320,863.08 |
Held-for-trading financial assets | 52,356,098.85 | |
Derivative financial assets | ||
Notes receivable | 40,214,591.24 | 67,898,885.35 |
Accounts receivable | 264,980,445.66 | 417,599,518.08 |
Accounts receivable financing | 3,170,000.00 | 2,675,090.00 |
Prepayments | 25,204,392.09 | 10,178,452.88 |
Other receivables | 981,462,785.76 | 838,523,449.52 |
Including: Interest receivable | ||
Dividends receivable | ||
Inventories | 1,359,654,442.14 | 1,280,620,296.02 |
Current portion of non-current assets | ||
Other current assets | 1,707.49 | 5,780,635.28 |
Total current assets | 4,032,590,812.76 | 2,934,953,289.06 |
Non-current assets: | ||
Investments in debt obligations | ||
Investments in other debt obligations | ||
Long-term receivables | ||
Long-term equity investments | 2,713,239,081.49 | 2,510,868,604.84 |
Investments in other equity instruments | ||
Other non-current financial assets | 126,519,880.41 | 266,149,500.00 |
Investment property | 30,411,749.80 | 31,089,260.38 |
Fixed assets | 2,535,355,316.06 | 2,603,258,003.94 |
Construction in progress | 33,567,305.93 | 53,443,768.04 |
Intangible assets | 231,391,216.61 | 235,277,114.25 |
Development costs | ||
Goodwill | ||
Long-term deferred expenses | ||
Deferred income tax assets | 61,185,242.93 | 60,974,304.57 |
Other non-current assets | 2,328,457.86 | |
Total non-current assets | 5,733,998,251.09 | 5,761,060,556.02 |
Total assets | 9,766,589,063.85 | 8,696,013,845.08 |
Current liabilities: | ||
Short-term borrowings | 712,419,330.83 | 816,301,973.60 |
Held-for-trading financial liabilities |
Derivative financial liabilities | ||
Notes payable | 278,243,091.90 | 602,741,973.76 |
Accounts payable | 145,727,979.94 | 105,588,631.54 |
Advances from customers | 53,418,950.04 | |
Contract liabilities | 55,727,385.25 | |
Payroll payable | 213,270,291.86 | 242,300,723.41 |
Taxes payable | 25,440,208.22 | 11,995,830.49 |
Other payables | 159,757,664.88 | 149,255,207.79 |
Including: Interest payable | ||
Dividends payable | 86,253,267.74 | 441,113.64 |
Liabilities held for sale | ||
Current portion of non-current liabilities | 955,068.49 | |
Other current liabilities | ||
Total current liabilities | 1,591,541,021.37 | 1,981,603,290.63 |
Non-current liabilities: | ||
Long-term borrowings | ||
Bonds payable | 1,324,932,419.54 | |
Long-term payables | ||
Long-term payroll payable | 52,317,084.85 | 105,589,249.56 |
Provisions | ||
Deferred income | 115,087,900.64 | 112,187,678.66 |
Deferred income tax liabilities | 48,867,677.05 | 70,445,859.76 |
Other non-current liabilities | ||
Total non-current liabilities | 1,541,205,082.08 | 288,222,787.98 |
Total liabilities | 3,132,746,103.45 | 2,269,826,078.61 |
Owners’ equity: | ||
Share capital | 858,121,541.00 | 858,121,541.00 |
Other equity instruments | 71,391,357.42 | |
Capital reserves | 317,206,232.47 | 317,206,232.47 |
Less: Treasury stock | ||
Other comprehensive income | ||
Specific reserve | ||
Surplus reserves | 1,114,158,611.99 | 1,114,158,611.99 |
Retained earnings | 4,272,965,217.52 | 4,136,701,381.01 |
Total owners’ equity | 6,633,842,960.40 | 6,426,187,766.47 |
Total liabilities and owners’ equity | 9,766,589,063.85 | 8,696,013,845.08 |
3. Consolidated Income Statement
Unit: RMB
Item | H1 2020 | H1 2019 |
1. Revenue | 2,286,744,080.79 | 3,185,448,344.01 |
Including: Operating revenue | 2,286,744,080.79 | 3,185,448,344.01 |
2. Costs and expenses | 2,127,801,124.48 | 2,737,159,910.26 |
Including: Cost of sales | 1,683,752,331.27 | 2,210,886,955.53 |
Taxes and surcharges | 35,766,255.41 | 42,736,804.77 |
Selling expense | 81,739,905.59 | 77,836,942.94 |
Administrative expense | 177,893,599.47 | 191,205,597.74 |
Development cost | 123,441,723.06 | 161,939,039.23 |
Finance costs | 25,207,309.68 | 52,554,570.05 |
Including: Interest expense | 38,659,705.45 | 47,316,465.76 |
Interest income | 13,506,359.51 | 4,338,765.10 |
Add: Other income | 36,850,705.82 | 32,226,225.91 |
Return on investment (“-” for loss) | 150,730,013.89 | 10,417,475.41 |
Including: Share of profit or loss of joint ventures and associates | -3,579,523.35 | 5,083,101.54 |
Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
Exchange gain (“-” for loss) | ||
Net gain on exposure hedges (“-” for loss) | ||
Gain on changes in fair value (“-” for loss) | -144,695,954.16 | 5,282,600.00 |
Credit impairment loss (“-” for loss) | -1,553,716.48 | -530,951.31 |
Asset impairment loss (“-” for loss) | -24,613,079.38 | -1,543,199.38 |
Asset disposal income (“-” for loss) | -353,863.18 | 513,490.00 |
3. Operating profit (“-” for loss) | 175,307,062.82 | 494,654,074.38 |
Add: Non-operating income | 2,125,819.41 | 3,097,024.44 |
Less: Non-operating expense | 2,383,926.90 | 2,214,356.54 |
4. Profit before tax (“-” for loss) | 175,048,955.33 | 495,536,742.28 |
Less: Income tax expense | 27,067,833.69 | 74,839,232.29 |
5. Net profit (“-” for net loss) | 147,981,121.64 | 420,697,509.99 |
5.1 By operating continuity | ||
5.1.1 Net profit from continuing operations (“-” for net loss) | 147,981,121.64 | 420,697,509.99 |
5.1.2 Net profit from discontinued operations (“-” for net loss) | ||
5.2 By ownership | ||
5.2.1 Net profit attributable to owners of the Company as the parent | 144,119,579.22 | 411,446,216.59 |
5.2.1 Net profit attributable to non-controlling interests | 3,861,542.42 | 9,251,293.40 |
6. Other comprehensive income, net of tax | 21,295,310.76 | 11,806,511.25 |
Attributable to owners of the Company as the parent | 21,295,310.76 | 11,806,511.25 |
6.1 Items that will not be reclassified to profit or loss | ||
6.1.1 Changes caused by re-measurements on defined benefit schemes | ||
6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
6.1.3 Changes in the fair value of investments in other equity instruments | ||
6.1.4 Changes in the fair value arising from changes in own credit risk | ||
6.1.5 Other | ||
6.2 Items that will be reclassified to profit or loss | 21,295,310.76 | 11,806,511.25 |
6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
6.2.2 Changes in the fair value of investments in other debt obligations | ||
6.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
6.2.4 Credit impairment allowance for investments in other debt obligations | ||
6.2.5 Reserve for cash flow hedges | ||
6.2.6 Differences arising from the translation of foreign currency-denominated financial statements | 21,295,310.76 | 11,806,511.25 |
6.2.7 Other | ||
Attributable to non-controlling interests | ||
7. Total comprehensive income | 169,276,432.40 | 432,504,021.24 |
Attributable to owners of the Company as the parent | 165,414,889.98 | 423,252,727.84 |
Attributable to non-controlling interests | 3,861,542.42 | 9,251,293.40 |
8. Earnings per share | ||
8.1 Basic earnings per share | 0.17 | 0.480 |
8.2 Diluted earnings per share | 0.16 | 0.480 |
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees beforethe combinations was RMB0, with the amount for the same period of last year being RMB0.Legal representative: Liu Zibin Chief Accountant: Zhang HongmeiFinancial Manager: Zhang Keming
4. Income Statement of the Company as the Parent
Unit: RMB
Item | H1 2020 | H1 2019 |
1. Operating revenue | 1,524,486,328.98 | 2,488,329,566.37 |
Less: Cost of sales | 1,181,364,557.21 | 1,847,868,451.77 |
Taxes and surcharges | 23,730,341.94 | 28,685,411.40 |
Selling expense | 46,988,183.91 | 46,460,101.19 |
Administrative expense | 111,338,619.84 | 115,345,994.08 |
R&D expense | 82,599,289.44 | 111,017,731.29 |
Finance costs | 5,664,248.42 | 12,593,818.90 |
Including: Interest expense | 10,420,836.93 | 14,948,218.54 |
Interest income | 3,879,751.58 | 1,707,105.18 |
Add: Other income | 26,850,419.74 | 20,170,944.34 |
Return on investment (“-” for loss) | 297,360,063.89 | 156,928,724.90 |
Including: Share of profit or loss of joint ventures and associates | -3,579,523.35 | 5,083,101.54 |
Income from the derecognition of financial assets at amortized cost (“-” for loss) | ||
Net gain on exposure hedges (“-” for loss) | ||
Gain on changes in fair value (“-” for loss) | -143,854,551.38 | 5,282,600.00 |
Credit impairment loss (“-” for loss) | 1,110,012.04 | -2,533,623.96 |
Asset impairment loss (“-” for loss) | -20,100,921.17 | |
Asset disposal income (“-” for loss) | -414,285.87 | 593,665.89 |
2. Operating profit (“-” for loss) | 233,751,825.47 | 506,800,368.91 |
Add: Non-operating income | 1,982,724.35 | 2,310,510.04 |
Less: Non-operating expense | 1,505,277.66 | 1,023,788.67 |
3. Profit before tax (“-” for loss) | 234,229,272.16 | 508,087,090.28 |
Less: Income tax expense | 12,153,281.55 | 56,933,685.54 |
4. Net profit (“-” for net loss) | 222,075,990.61 | 451,153,404.74 |
4.1 Net profit from continuing operations (“-” for net loss) | 222,075,990.61 | 451,153,404.74 |
4.2 Net profit from discontinued operations (“-” for net loss) | ||
5. Other comprehensive income, net of tax | ||
5.1 Items that will not be reclassified to profit or loss | ||
5.1.1 Changes caused by re-measurements on defined benefit schemes | ||
5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||
5.1.3 Changes in the fair value of investments in other equity instruments | ||
5.1.4 Changes in the fair value arising from changes in own credit risk | ||
5.1.5 Other | ||
5.2 Items that will be reclassified to profit or loss | ||
5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method | ||
5.2.2 Changes in the fair value of investments in other debt obligations | ||
5.2.3 Other comprehensive income arising from the reclassification of financial assets | ||
5.2.4 Credit impairment allowance for investments in other debt obligations | ||
5.2.5 Reserve for cash flow hedges | ||
5.2.6 Differences arising from the translation of foreign currency-denominated financial statements | ||
5.2.7 Other | ||
6. Total comprehensive income | 222,075,990.61 | 451,153,404.74 |
7. Earnings per share | ||
7.1 Basic earnings per share | 0.26 | 0.53 |
7.2 Diluted earnings per share | 0.26 | 0.53 |
5. Consolidated Cash Flow Statement
Unit: RMB
Item | H1 2020 | H1 2019 |
1. Cash flows from operating activities: | ||
Proceeds from sale of commodities and rendering of services | 2,349,623,633.05 | 3,110,163,161.87 |
Tax rebates | 88,289,716.37 | 95,975,203.98 |
Cash generated from other operating activities | 55,602,212.50 | 46,482,650.58 |
Subtotal of cash generated from operating activities | 2,493,515,561.92 | 3,252,621,016.43 |
Payments for commodities and services | 1,263,252,180.21 | 1,987,264,167.92 |
Cash paid to and for employees | 818,429,524.90 | 882,377,720.86 |
Taxes paid | 98,517,829.70 | 171,428,644.27 |
Cash used in other operating activities | 103,923,761.42 | 91,833,420.81 |
Subtotal of cash used in operating activities | 2,284,123,296.23 | 3,132,903,953.86 |
Net cash generated from/used in operating activities | 209,392,265.69 | 119,717,062.57 |
2. Cash flows from investing activities: | ||
Proceeds from disinvestment | 50,131,167.06 | 30,000,000.00 |
Return on investment | 146,015,342.75 | 2,402,138.74 |
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 2,828,220.00 | 2,599,510.60 |
Net proceeds from the disposal of subsidiaries and other business units | ||
Cash generated from other investing activities | 46,094,785.79 | 9,836,798.66 |
Subtotal of cash generated from investing activities | 245,069,515.60 | 44,838,448.00 |
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 318,762,103.03 | 336,291,428.03 |
Payments for investments | 52,215,000.00 | 50,000,000.00 |
Net increase in pledged loans granted | ||
Net payments for the acquisition of subsidiaries and other business units | ||
Cash used in other investing activities | 3,231,380.25 | 4,874,724.40 |
Subtotal of cash used in investing activities | 374,208,483.28 | 391,166,152.43 |
Net cash generated from/used in investing activities | -129,138,967.68 | -346,327,704.43 |
3. Cash flows from financing activities: | ||
Capital contributions received | 50,000,000.00 | 50,000,000.00 |
Including: Capital contributions by non-controlling interests to subsidiaries | 50,000,000.00 | 50,000,000.00 |
Borrowings raised | 2,152,485,725.20 | 2,583,222,673.24 |
Cash generated from other financing activities | 174,000,000.00 | 19,000,000.00 |
Subtotal of cash generated from financing activities | 2,376,485,725.20 | 2,652,222,673.24 |
Repayment of borrowings | 1,075,621,432.55 | 1,801,353,379.40 |
Interest and dividends paid | 81,488,219.93 | 514,442,200.45 |
Including: Dividends paid by subsidiaries to non-controlling interests | 50,000,000.00 | 50,000,000.00 |
Cash used in other financing activities | 160,000,000.00 | 21,164,104.03 |
Subtotal of cash used in financing activities | 1,317,109,652.48 | 2,336,959,683.88 |
Net cash generated from/used in financing activities | 1,059,376,072.72 | 315,262,989.36 |
4. Effect of foreign exchange rates changes on cash and cash equivalents | 460,253.84 | -228,703.12 |
5. Net increase in cash and cash equivalents | 1,140,089,624.57 | 88,423,644.38 |
Add: Cash and cash equivalents, beginning of the period | 878,559,018.92 | 535,134,772.90 |
6. Cash and cash equivalents, end of the period | 2,018,648,643.49 | 623,558,417.28 |
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item | H1 2020 | H1 2019 |
1. Cash flows from operating activities: | ||
Proceeds from sale of commodities and rendering of services | 1,618,771,452.43 | 2,462,659,877.36 |
Tax rebates | 36,161,757.59 | 61,662,415.98 |
Cash generated from other operating activities | 32,417,593.75 | 21,521,514.73 |
Subtotal of cash generated from operating activities | 1,687,350,803.77 | 2,545,843,808.07 |
Payments for commodities and services | 1,120,352,074.73 | 1,310,008,487.94 |
Cash paid to and for employees | 497,295,354.33 | 584,827,906.35 |
Taxes paid | 43,095,322.48 | 111,246,694.11 |
Cash used in other operating activities | 70,463,669.09 | 44,098,655.74 |
Subtotal of cash used in operating activities | 1,731,206,420.63 | 2,050,181,744.14 |
Net cash generated from/used in operating activities | -43,855,616.86 | 495,662,063.93 |
2. Cash flows from investing activities: | ||
Proceeds from disinvestment | 50,131,167.06 | 30,000,000.00 |
Return on investment | 296,015,342.75 | 152,402,138.74 |
Net proceeds from the disposal of fixed assets, intangible assets and other long-lived assets | 9,912,775.89 | 2,577,416.61 |
Net proceeds from the disposal of subsidiaries and other business units | ||
Cash generated from other investing activities | 411,047,820.90 | 71,873,773.84 |
Subtotal of cash generated from investing activities | 767,107,106.60 | 256,853,329.19 |
Payments for the acquisition of fixed assets, intangible assets and other long-lived assets | 28,778,618.38 | 122,593,981.68 |
Payments for investments | 208,165,000.00 | 402,922,200.00 |
Net payments for the acquisition of subsidiaries and other |
business units | ||
Cash used in other investing activities | 535,327,516.63 | 240,578,744.40 |
Subtotal of cash used in investing activities | 772,271,135.01 | 766,094,926.08 |
Net cash generated from/used in investing activities | -5,164,028.41 | -509,241,596.89 |
3. Cash flows from financing activities: | ||
Capital contributions received | ||
Borrowings raised | 1,538,788,675.65 | 1,694,064,390.96 |
Cash generated from other financing activities | 58,280,000.00 | 130,000,000.00 |
Subtotal of cash generated from financing activities | 1,597,068,675.65 | 1,824,064,390.96 |
Repayment of borrowings | 298,208,024.53 | 1,115,914,126.27 |
Interest and dividends paid | 16,129,305.81 | 434,574,114.51 |
Cash used in other financing activities | 135,072,100.00 | 196,713,504.03 |
Subtotal of cash used in financing activities | 449,409,430.34 | 1,747,201,744.81 |
Net cash generated from/used in financing activities | 1,147,659,245.31 | 76,862,646.15 |
4. Effect of foreign exchange rates changes on cash and cash equivalents | -58,014.74 | -1,121,122.58 |
5. Net increase in cash and cash equivalents | 1,098,581,585.30 | 62,161,990.61 |
Add: Cash and cash equivalents, beginning of the period | 259,320,863.08 | 191,305,104.80 |
6. Cash and cash equivalents, end of the period | 1,357,902,448.38 | 253,467,095.41 |
7. Consolidated Statements of Changes in Owners’ Equity
H1 2020
Unit: RMB
Item | H1 2020 | ||||||||||||||
Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
Preferred shares | Perpetual bonds | Other | |||||||||||||
1. Balances as at the end of the prior year | 858,121,541.00 | 258,046,245.42 | 91,626,571.75 | 1,117,267,351.63 | 5,372,073,615.12 | 7,697,135,324.92 | 602,169,223.52 | 8,299,304,548.44 | |||||||
Add: Adjustments for changed accounting policies | |||||||||||||||
Adjustments for corrections of previous errors | |||||||||||||||
Adjustments for business combinations under common control | |||||||||||||||
Other adjustments | |||||||||||||||
2. Balances as at the beginning of the year | 858,121,541.00 | 258,046,245.42 | 91,626,571.75 | 1,117,267,351.63 | 5,372,073,615.12 | 7,697,135,324.92 | 602,169,223.52 | 8,299,304,548.44 | |||||||
3. Increase/ decrease in the period (“-” for decrease) | 71,391,357.42 | 21,295,310.76 | 58,307,425.12 | 150,994,093.30 | 3,861,542.42 | 154,855,635.72 | |||||||||
3.1 Total comprehensive income | 21,295,310.76 | 144,119,579.22 | 165,414,889.98 | 3,861,542.42 | 169,276,432.40 | ||||||||||
3.2 Capital increased and reduced by owners | 71,391,357.42 | 71,391,357.42 | 50,000,000.00 | 121,391,357.42 |
3.2.1 Ordinary shares increased by shareholders | 50,000,000.00 | 50,000,000.00 | |||||||||||||
3.2.2 Capital increased by holders of other equity instruments | 71,391,357.42 | 71,391,357.42 | 71,391,357.42 | ||||||||||||
3.2.3 Share-based payments included in owners’ equity | |||||||||||||||
3.2.4 Other | |||||||||||||||
3.3 Profit distribution | -85,812,154.10 | -85,812,154.10 | -50,000,000.00 | -135,812,154.10 | |||||||||||
3.3.1 Appropriation to surplus reserves | |||||||||||||||
3.3.2 Appropriation to general reserve | |||||||||||||||
3.3.3 Appropriation to owners (or shareholders) | -85,812,154.10 | -85,812,154.10 | -50,000,000.00 | -135,812,154.10 | |||||||||||
3.3.4 Other | |||||||||||||||
3.4 Transfers within owners’ equity | |||||||||||||||
3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
3.4.3 Loss offset by surplus reserves | |||||||||||||||
3.4.4 Changes in |
defined benefit pension schemes transferred to retained earnings | |||||||||||||||
3.4.5 Other comprehensive income transferred to retained earnings | |||||||||||||||
3.4.6 Other | |||||||||||||||
3.5 Specific reserve | |||||||||||||||
3.5.1 Increase in the period | |||||||||||||||
3.5.2 Used in the period | |||||||||||||||
3.6 Other | |||||||||||||||
4. Balances as at the end of the period | 858,121,541.00 | 71,391,357.42 | 258,046,245.42 | 112,921,882.51 | 1,117,267,351.63 | 5,430,381,040.24 | 7,848,129,418.22 | 606,030,765.94 | 8,454,160,184.16 |
H1 2019
Unit: RMB
Item | H1 2019 | ||||||||||||||
Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Other | Subtotal | |||||
Preferred shar | Perpetual bonds | Other |
es | |||||||||||||||
1. Balances as at the end of the prior year | 922,602,311.00 | 699,493,647.48 | 486,922,944.94 | 61,157,013.37 | 1,022,717,451.40 | 4,927,500,989.55 | 7,146,548,467.86 | 579,276,247.53 | 7,725,824,715.39 | ||||||
Add: Adjustments for changed accounting policies | -520,200.00 | 15,797,284.81 | 15,277,084.81 | 15,277,084.81 | |||||||||||
Adjustments for corrections of previous errors | |||||||||||||||
Adjustments for business combinations under common control | |||||||||||||||
Other adjustments | |||||||||||||||
2. Balances as at the beginning of the year | 922,602,311.00 | 699,493,647.48 | 486,922,944.94 | 60,636,813.37 | 1,022,717,451.40 | 4,943,298,274.36 | 7,161,825,552.67 | 579,276,247.53 | 7,741,101,800.20 | ||||||
3. Increase/ decrease in the period (“-” for decrease) | -64,480,770.00 | -442,861,219.20 | -486,922,944.94 | 11,806,511.25 | -17,614,553.91 | -26,227,086.92 | 8,640,988.50 | -17,586,098.42 | |||||||
3.1 Total comprehensive income | 11,806,511.25 | 411,446,216.59 | 423,252,727.84 | 9,251,293.40 | 432,504,021.24 | ||||||||||
3.2 Capital increased and reduced by owners | -64,480,770.00 | -442,861,219.20 | -486,922,944.94 | -20,419,044.26 | 49,389,695.10 | 28,970,650.84 | |||||||||
3.2.1 Ordinary shares increased by shareholders | -64,480,770.00 | -442,630,569.04 | -486,922,944.94 | -20,188,394.10 | 50,000,000.00 | 29,811,605.90 | |||||||||
3.2.2 Capital increased by holders of other equity instruments | |||||||||||||||
3.2.3 Share-based payments included in |
owners’ equity | |||||||||||||||
3.2.4 Other | -230,650.16 | -230,650.16 | -610,304.90 | -840,955.06 | |||||||||||
3.3 Profit distribution | -429,060,770.50 | -429,060,770.50 | -50,000,000.00 | -479,060,770.50 | |||||||||||
3.3.1 Appropriation to surplus reserves | |||||||||||||||
3.3.2 Appropriation to general reserve | |||||||||||||||
3.3.3 Appropriation to owners (or shareholders) | -429,060,770.50 | -429,060,770.50 | -50,000,000.00 | -479,060,770.50 | |||||||||||
3.3.4 Other | |||||||||||||||
3.4 Transfers within owners’ equity | |||||||||||||||
3.4.1 Increase in capital (or share capital) from capital reserves | |||||||||||||||
3.4.2 Increase in capital (or share capital) from surplus reserves | |||||||||||||||
3.4.3 Loss offset by surplus reserves | |||||||||||||||
3.4.4 Changes in defined benefit pension schemes transferred to retained earnings | |||||||||||||||
3.4.5 Other comprehensive income transferred to retained earnings |
3.4.6 Other | |||||||||||||||
3.5 Specific reserve | |||||||||||||||
3.5.1 Increase in the period | |||||||||||||||
3.5.2 Used in the period | |||||||||||||||
3.6 Other | |||||||||||||||
4. Balances as at the end of the period | 858,121,541.00 | 256,632,428.28 | 72,443,324.62 | 1,022,717,451.40 | 4,925,683,720.45 | 7,135,598,465.75 | 587,917,236.03 | 7,723,515,701.78 |
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2020
Unit: RMB
Item | H1 2020 | |||||||||||
Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
Preferred shares | Perpetual bonds | Other | ||||||||||
1. Balances as at the end of the prior year | 858,121,541.00 | 317,206,232.47 | 1,114,158,611.99 | 4,136,701,381.01 | 6,426,187,766.47 | |||||||
Add: Adjustments for changed accounting policies | ||||||||||||
Adjustments for corrections of previous errors | ||||||||||||
Other adjustments | ||||||||||||
2. Balances as at the beginning of the year | 858,121,541.00 | 317,206,232.47 | 1,114,158,611.99 | 4,136,701,381.01 | 6,426,187,766.47 | |||||||
3. Increase/ decrease in the period (“-” for decrease) | 71,391,357.42 | 136,263,836.51 | 207,655,193.93 |
3.1 Total comprehensive income | 222,075,990.61 | 222,075,990.61 | ||||||||||
3.2 Capital increased and reduced by owners | 71,391,357.42 | 71,391,357.42 | ||||||||||
3.2.1 Ordinary shares increased by shareholders | ||||||||||||
3.2.2 Capital increased by holders of other equity instruments | 71,391,357.42 | 71,391,357.42 | ||||||||||
3.2.3 Share-based payments included in owners’ equity | ||||||||||||
3.2.4 Other | ||||||||||||
3.3 Profit distribution | -85,812,154.10 | -85,812,154.10 | ||||||||||
3.3.1 Appropriation to surplus reserves | ||||||||||||
3.3.2 Appropriation to owners (or shareholders) | -85,812,154.10 | -85,812,154.10 | ||||||||||
3.3.3 Other | ||||||||||||
3.4 Transfers within owners’ equity | ||||||||||||
3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
3.4.3 Loss offset by surplus reserves | ||||||||||||
3.4.4 Changes in defined benefit pension schemes transferred to retained earnings | ||||||||||||
3.4.5 Other comprehensive income transferred to retained earnings |
3.4.6 Other | ||||||||||||
3.5 Specific reserve | ||||||||||||
3.5.1 Increase in the period | ||||||||||||
3.5.2 Used in the period | ||||||||||||
3.6 Other | ||||||||||||
4. Balances as at the end of the period | 858,121,541.00 | 71,391,357.42 | 317,206,232.47 | 1,114,158,611.99 | 4,272,965,217.52 | 6,633,842,960.40 |
H1 2019
Unit: RMB
Item | H1 2019 | |||||||||||
Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Other | Total owners’ equity | |||
Preferred shares | Perpetual bonds | Other | ||||||||||
1. Balances as at the end of the prior year | 922,602,311.00 | 759,836,756.57 | 486,922,944.94 | 520,200.00 | 1,019,608,711.76 | 3,714,813,049.43 | 5,930,458,083.82 | |||||
Add: Adjustments for changed accounting policies | -520,200.00 | 15,797,284.81 | 15,277,084.81 | |||||||||
Adjustments for corrections of previous errors | ||||||||||||
Other adjustments | ||||||||||||
2. Balances as at the beginning of the year | 922,602,311.00 | 759,836,756.57 | 486,922,944.94 | 1,019,608,711.76 | 3,730,610,334.24 | 5,945,735,168.63 | ||||||
3. Increase/ decrease in the period (“-” for decrease) | -64,480,770.00 | -442,630,524.10 | -486,922,944.94 | 22,092,634.24 | 1,904,285.08 | |||||||
3.1 Total comprehensive income | 451,153,404.74 | 451,153,404.74 | ||||||||||
3.2 Capital increased and reduced by owners | -64,480,770.00 | -442,630,524.10 | -486,922,944.94 | -20,188,349.16 | ||||||||
3.2.1 Ordinary shares increased by shareholders | -64,480,770.00 | -442,630,569.04 | -486,922,944.94 | -20,188,394.10 |
3.2.2 Capital increased by holders of other equity instruments | ||||||||||||
3.2.3 Share-based payments included in owners’ equity | ||||||||||||
3.2.4 Other | 44.94 | 44.94 | ||||||||||
3.3 Profit distribution | -429,060,770.50 | -429,060,770.50 | ||||||||||
3.3.1 Appropriation to surplus reserves | ||||||||||||
3.3.2 Appropriation to owners (or shareholders) | -429,060,770.50 | -429,060,770.50 | ||||||||||
3.3.3 Other | ||||||||||||
3.4 Transfers within owners’ equity | ||||||||||||
3.4.1 Increase in capital (or share capital) from capital reserves | ||||||||||||
3.4.2 Increase in capital (or share capital) from surplus reserves | ||||||||||||
3.4.3 Loss offset by surplus reserves | ||||||||||||
3.4.4 Changes in defined benefit pension schemes transferred to retained earnings | ||||||||||||
3.4.5 Other comprehensive income transferred to retained earnings | ||||||||||||
3.4.6 Other | ||||||||||||
3.5 Specific reserve | ||||||||||||
3.5.1 Increase in the period | ||||||||||||
3.5.2 Used in the period | ||||||||||||
3.6 Other | ||||||||||||
4. Balances as at the end of the period | 858,121,541.00 | 317,206,232.47 | 1,019,608,711.76 | 3,752,702,968.48 | 5,947,639,453.71 |
III Company ProfileLu Thai Textile Co., Ltd. (hereinafter referred to as the “Company”) is a joint venture invested by Zibo Lucheng Textile InvestmentCo., Ltd (originally named Zibo Lucheng Textile Co., Ltd, hereinafter referred to as Lucheng Textile) and Thailand Tailun Textile Co.,Ltd. On 3 February 1993, the Company is approved by the former Ministry of Foreign Trade and Economy of the State (1993) inWJMZEHZ No. 59 to convert into a joint-stock enterprise. Zibo Administration for Industry and Commerce issued the Companycorporate business license with the registration No. of QGLZZZ No. 000066.In July 1997, the Company is approved by the Securities Committee of the Department of the State in the ZWF (1997) No. 47 toissue 80 million shares of domestically listed foreign share( B-shares) at the price of RMB 1.00 per share. Upon approved byShenzhen Stock Exchange with No. (1997) 296 Listing Notice, the Company is listed on the Shenzhen Stock Exchange on 19 August1997 with B-shares stock code of 200726. On 24 November 2000, approved by ZJGSZ [2000] No.199 by CSRC, the Companyincreased publication of 50 million shares of general share (A-shares) at the book value of RMB 1.00, which are listed on theShenzhen Stock Exchange on 25 December 2000 with A-shares stock code of 000726 through approval by Shenzhen Stock Exchangewith No. (2000) 162 Listing Notice.As approved by 2000 Annual General Meeting in May 2001, the Company carried out the distribution plan that 10 shares of capitalpublic reserve are converted to 3 more shares for each 10 shares.As approved by Resolutions of 2001 Annual General Meeting in June 2002, the Company implemented the distribution plan that 10shares of capital public reserve are converted 3 more shares for each 10 shares again.As approved by 2002 Annual General Meeting in May 2003, the Company implemented the distribution plan that 10 shares of capitalpublic reserve are 2 more shares for each 10 shares, and inner employees’ shared increased to 40.56 million shares. As examined andapproved by ZJGSZ No. [2000] 199 of CSRC, the inner employees’ shares will start circulation 3 years later since listing on theA-share market. On 25 December 2003, the inner employees’ shares reach 3 years since listing on the A-share stock market, and theyset out circulation on 26 December 2003.As approved by the Annual General Meeting 2006 held in June 2007, the Company implemented the plan on converting 10 shares toall its shareholders with capital reserves for every 10 shares. After capitalization, the registered capital of the Company was RMB
844.8648 million.
The Company, in accordance with the official reply on approving Lu Thai Textile Co., Ltd. to issue additional shares (ZJXK [2008]No. 890 document) from CSRC, issued the Renminbi common shares (A shares) amounting to 150 million shares on 8 December2008.According to the relevant resolution of the 2
nd Special Extraordinary General Meeting of 2011, the relevant resolution of the 15
th
Meeting of the 6
thBoard of Directors, the Opinion of China Securities Regulatory Commission on the Restricted Share IncentivePlan of Lu Thai Textile Co., Ltd. (Shang-Shi-Bu-Han [2011] No. 206), the Company applied for a registered capital increment ofRMB 14.09 million, which was contributed by restricted share incentive receivers with monetary funds.In accordance with the resolution of Proposal on Repurchasing and Canceling Partial Restricted Shares already Granted for theOriginal Incentive Targets not Reaching the Incentive Conditions made at the 23
rd Session of the 6
thBoard of Directors on 13 August2012, the Company canceling a total of 60,000.00 shares already granted for the original incentive targets not reaching the incentiveconditions.According to the second temporary resolution of Proposal on counter purchase of part of the domestic listed foreign share (B share)on 25 June 2012, the Company counter purchase domestic listed foreign share (B share) 48,837,300 shares.According to the Proposal on Repurchase and Cancel Part of Unlocked Restricted Share of the Original Incentive Personnel notConforming to the Incentive Condition, Proposal on Repurchase and Cancel unlocked Restricted Share in Second Unlocked Period ofall the Incentive Personnel reviewed and approved by the 26
th Meeting of the 6
thBoard of Directors on 27 March 2013, the Companyrepurchase and cancel 4,257,000 shares owned by original people whom to motivate.According to the Proposal on Repurchase and Write-off of Partly of the Original Incentive Targets Not Met with the Incentive
Conditions but Granted Restricted Shares approved on the 11
th
Meeting of the 7
thBoard of Directors on 11 June 2014, to executerepurchase and write-off of the whole granted shares of 42,000 shares of the original incentive targets not met with the incentivetargets of the Company.As per the Proposal on Buy-back of Some A- and B-shares considered and approved as a resolution at the 1
stspecial meeting ofshareholders on 5 August 2015, the Company repurchased 33,156,200 domestically listed foreign shares (B-shares).As per the Proposal on Buy-back of Some B-shares considered and approved as a resolution at the 2
ndExtraordinary General Meetingon 23 March 2018, the Company repurchased 64,480,800 domestically listed foreign shares (B-shares).As of 30 June 2020, the registered capital of the Company was RMB858.1215 million.The Company’s registered address: No. 11, Mingbo Road, Hi-tech Development Zone, Zibo, ShandongThe Company’s unified social credit code: 91370300613281175KThe Company’s legal representative: Liu ZibinThe Company establishes the corporate governance structure consisting of the shareholders meeting, the Board of Directors and theSupervisory Committee. At present, the Company has set up various departments including the production department, the qualitymanagement department, the yarn BD, the weaving BD, the dyeing BD, the fabric finishing BD, the clothing manufacturingdepartment, the clothing manufacturing BD, the clothing marketing department, the global marketing department, the enterprisemanagement department, the financial department, the design & development department and the strategy and market departmentetc..The scope of business of the Company and its subsidiaries (hereinafter referred to as “the Group”) shall include: the design, R&D,production and sales of various textiles and garments including yarns, fabrics, blouses/shirts, suits and coats etc.; the textiles andclothing testing; the production and sales of Class I medical devices; the production and sales of non-medical masks and protectiveclothing; the technical development, service and consultation based on the e-commerce platform; the processing and sales ofmechanical and electrical products; the procurement of agricultural products; hotel, restaurant, catering, conference and trainingservices; the lease of self-owned premises and lands; the non-quota license management; the procurement and sales of non-exclusivegoods.The Company’s financial statements and Notes thereof have been approved for issue by the 13
th
Meeting of the 9
th
Board of Directorsheld on 26 August 2020.There were 18 subsidiaries included into the consolidation scope of the Company from January to June 2020, and for the details,please refer to Notes VIII. “Equities among Other Entities”.
IV Basis for Preparation of Financial Statements
1. Preparation Basis
This financial statement is prepared in accordance with the accounting standards for business enterprises, and the application guide,interpretation and other relevant regulations (hereinafter collectively referred to as “Accounting Standards for Business Enterprises”)issued by the Ministry of Finance. In addition, the Group also disclosed relevant financial information in accordance with theRegulations on Information Disclosure and Compilation for Companies Public Offering Securities No. 15-General Provisions onFinancial Report (revised in 2014) issued by China Securities Regulatory Commission.The Group's accounting is based on the accrual basis. Except for certain financial instruments, this financial statement is measured onthe basis of historical cost. If the asset is impaired, the corresponding impairment provision shall be made in accordance with relevantregulations.
2. Going-concern
The financial statements are presented on the basis of continuing operations.V Significant Accounting Policies and EstimatesSpecific accounting policies and accounting estimates indicators:
1. Statement of Compliance with the Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for BusinessEnterprises, which factually and completely present the Company’s, and the Company’s financial positions as at 30 June 2020,business results and cash flows for the January to June of 2020, and other relevant information.
2. Fiscal Year
The Company’s fiscal year starts on 1 January and ends on 31 December of every year according to the Gregorian calendar.
3. Operating Cycle
The Group regards 12 months as an operating cycle.
4. Recording Currency
The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company’s overseas subsidiaries confirm toadopt HK Dollar and US Dollar as the recording currency according their major economic environment of the operating. Whenpreparing the financial statements for the Reporting Period, the Group adopted RMB as the recording currency.
5. Accounting Treatment for Business Combinations under the Common Control and Not under theCommon Control
(1) Business combinations under the same control
For business combinations under the same control, the assets and liabilities of the merged party acquired by the merger party in themerger, except for adjustments due to different accounting policies, shall be measured at the carrying value of the merged party in theconsolidated financial statement of the final controller on the combination date. As for the difference between the carrying value ofthe merger consideration and carrying value of the net assets obtained in the merger, the capital reserve (capital stock premium) shallbe adjusted, and if the capital reserve (capital stock premium) is insufficient to offset, the retained earnings shall be adjusted.
(2) Business combinations not under the same control
For a business combination not under the same control, the cost of the combination is the assets paid, liabilities incurred or assumed,and the fair value of the equity securities issued on the acquisition date to obtain control over the purchased party. On the purchasedate, the acquired assets, liabilities and contingent liabilities of the purchased party are recognized at fair value.The difference between the merger cost and the fair value of the identifiable net assets of the acquired party acquired in the merger(the former is greater than the latter) is recognized as goodwill, and subsequent measurement is made based on the cost deducting theaccumulated impairment provision; the difference between the merger cost and the fair value of the identifiable net assets of the
acquired party acquired in the merger (the former is less than the latter) shall be recorded into the current profit or loss after therecheck.
(3) Treatment of transaction costs in business combinations
Intermediary expenses such as auditing, legal services, evaluation and consulting and other related management expenses incurredfor the business combination shall be included in the current profit and loss when incurred. The transaction costs of equity securitiesor debt securities issued as the merger consideration shall be included in the initial recognition amount of equity securities or debtsecurities.
6. Preparation of the Consolidated Financial Statements
(1) Consolidation scope
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control means that theCompany has the power over the invested unit, enjoys variable returns by participating in the related activities of the invested unit,and has the ability to use the power over the invested unit to influence the amount of its return. Subsidiaries refer to the entitiescontrolled by the Company (including enterprises, divisible parts of invested entities, structured entities, etc.).
(2) Preparation method of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the Company and itssubsidiaries and other relevant materials. When preparing the consolidated financial statements, the accounting policies andaccounting fiscal of the Company and those of subsidiaries shall be consistent and the large transactions and intercourse balanceamong companies shall be offset. Subsidiaries and businesses increased due to business combinations under the same control duringthe Reporting Period shall be included into the Company’s combination scope since the date when they are jointly controlled by thefinal controller, and the operating result and cash flow since then shall be respectively included into the consolidated incomestatement and consolidated cash flow statement. As for subsidiaries and businesses increase due to business combinations not underthe same control during the Reporting Period, the revenue, expenses and profit or those subsidiaries and businesses from the purchasedate to the end of the Reporting Period shall be included into the consolidated income statement and the cash flow thereof shall beincluded into the consolidated cash flow statement. The share of shareholders’ equity in subsidiaries not belonging to the Companyshall be regarded as the minority interests and separately listed under the item of shareholders’ equity in the consolidated balancesheet. The share of current portion of net profit or loss in subsidiaries belonging to minority interests shall presented as the item ofminority interests under the item of net profit in the consolidated income statement. The difference between the losses of subsidiariesborn by not-controlling shareholders and the share of the company’s owners’ equity at the period-beginning the not-controllingshareholders enjoy (the former is larger than the latter) shall be offset the minority interests.
(3) Purchase of minority shareholders' equity of subsidiaries
As for the difference between the cost of a long-term equity investment newly acquired due to the purchase of the minority sharesand the share of net assets of the subsidiary continuously accounted from the purchase date or combination date the Company shallenjoy based on the new shareholding ratio and the difference between the disposal price of partial equity investments in thesubsidiary under the premise of remaining the control power and the share of net assets of the subsidiary continuously accountedfrom the purchase date or combination date the Company shall enjoy and corresponding to the disposal of long-term equityinvestments, the capital reserve (capital stock premium) in the consolidated balance sheet shall be adjusted and when the capitalreserve is insufficient to offset, the retained earnings shall be adjusted.
(4) Treatment of loss of control over subsidiaries
If the control over the original subsidiary is lost due to the disposal of partial equity investments or other reasons, the residual equityshall be remeasured at the fair value on the date of losing the control power; the balance of the sum of the consideration obtainedfrom equity disposal and the fair value of residual equity after deducting the sum of the share of the carrying value of net assets in theoriginal subsidiary continuously accounted from the purchase date the Company shall enjoy based on the original shareholding ratio
and the goodwill shall be recorded into the investment income of the period when the control power is lost. The other comprehensiveincome related to the equity investments in the original subsidiary shall be transferred to the current profit or loss when the controlpower is lost except for the other comprehensive income arising from changes in net liabilities or net assets due to the remeasurementof defined benefit plan by the investee.
7. Confirmation Standard for Cash and Cash Equivalent
The term “cash” refers to cash on hand and deposits that are available for payment at any time. Cash equivalents refer to investmentsheld by the Group that are short-term, highly liquid, easily convertible into known amounts of cash, and have little risk of change invalue.
8. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
The Group's foreign currency business is translated into the amount of the recording currency at the spot exchange rate on thetransaction date.On the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. Theexchange difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rateat the time of initial recognition or the previous balance sheet date is included in the current profit and loss; for foreign currencynon-monetary items measured at historical cost, the translation adopts the spot exchange rate on the day the transaction occurs; forforeign currency non-monetary items measured at fair value, the translation adopts the spot exchange rate on the day when the fairvalue is confirmed, and the difference between the amount of recording currency and the amount of original recording currency shallbe included into the current profit or loss.
(2) Conversion of foreign currency financial statements
When converting the foreign currency financial statements of overseas subsidiaries on the balance sheet date, the assets and liabilitiesitems in the balance sheet shall be converted at the spot exchange rate on the balance sheet date. Other items of shareholders' equityexcept for "undistributed profits" shall be converted at the spot exchange rate on the occurrence date.Income and expense items in the income statement shall be converted using the current average exchange rate on the transaction date.All items in the cash flow statement are converted according to the current average exchange rate on the occurrence date of cash flow.The impact of exchange rate changes on cash is taken as a reconciling item, and the item "impact of exchange rate changes on cashand cash equivalents" is separately listed in the cash flow statement to reflect.The difference arising from the conversion of financial statements is reflected in the "other comprehensive income" under theshareholders' equity in the balance sheet.When disposing of the overseas operation and losing control rights, the foreign currency statement conversion difference related tothe overseas operation shown under the shareholders' equity in the balance sheet shall be transferred to current profit and loss ofdisposal in whole or in proportion to the disposal of overseas operation.
9. Financial Instruments
Financial instruments refer to contracts that form one party’s financial assets and form other parties’ financial liabilities or equityinstruments.
(1) Recognition and derecognition of financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract.Where a financial asset satisfies any of the following requirements, the recognition of it is terminated:
① The contractual rights for collecting the cash flow of the said financial asset are terminated;
② The said financial asset has been transferred and meet the following derecognition conditions for transfer of financial assets.Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liabilitybe terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existingfinancial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability issubstantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability,and at the same time recognizes the new financial liability.The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized respectively at theprice of transaction date.
(2) Classification and measurement of financial assets
The Group classifies financial assets into the following three categories according to the business mode of managing financial assetsand the contractual cash flow characteristics of financial assets upon initial recognition: financial assets measured at amortized cost,financial assets measured at fair value and whose changes are included in other comprehensive income, and financial assets measuredat fair value and whose changes are included in current profit and loss.Financial assets measured at amortized costThe Group classifies financial assets that meet the following conditions and are not designated to be measured at fair value andwhose changes are included in current profit and loss as financial assets measured at amortized cost:
The Group's business model for managing this financial asset is aimed at collecting contractual cash flow;The contractual terms of this financial asset stipulate that the cash flow generated on the specific date is only the payment of principaland interest based on the principal amount outstanding.Such financial assets are measured in amortized cost by the effective interest method after initial recognition. Gains or losses arisingfrom financial assets measured in amortized cost that are not part of any hedging relationship are included in current profit and losswhen derecognition, amortization according to the effective interest method, or impairment is recognized.Financial assets measured at fair value and whose changes are included in other comprehensive incomeThe Group classifies financial assets that meet the following conditions and are not designated to be measured at fair value andwhose changes are included in current profit and loss as financial assets measured at fair value and whose changes are included inother comprehensive income:
The Group's business model for managing this financial asset is aimed at both collecting the contractual cash flow and selling thisfinancial asset;The contractual terms of this financial asset stipulate that the cash flow generated on the specific date is only the payment of principaland interest based on the principal amount outstanding.Such financial assets are subsequently measured at fair value after initial recognition. Interest, impairment losses or gains andexchange gains and losses calculated by the effective interest method are included in current profit and loss, while other gains orlosses are included in other comprehensive income. When the financial asset is derecognized, the accumulated gains or lossespreviously included in other comprehensive income are transferred out and included in current profit and loss.Financial assets measured at fair value and whose changes are included in current profit and lossExcept for the above financial assets measured at amortized cost and at fair value with changes included in other comprehensiveincome, the Group classifies all other financial assets as financial assets measured at fair value with changes included in currentprofit and loss. Upon initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Group irrevocablydesignates some financial assets that should have been measured at amortized cost or at fair value and whose changes are included inother comprehensive income as financial assets measured at fair value and whose changes are included in current profit and loss.Such financial assets are subsequently measured at fair value after initial recognition, and the resulting gains or losses (includinginterest and dividend income) are included in current profit and loss unless the financial assets are part of the hedging relationship.
The business model of managing financial assets refers to how the Group manages financial assets to generate cash flow. Thebusiness model determines whether the cash flow of the financial assets managed by the Group comes from the collection ofcontractual cash flow, the sale of financial assets or both. The Group determines the business model for managing financial assets onthe basis of objective facts and specific business objectives decided by key management personnel to manage financial assets.The Group evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flowgenerated by the relevant financial assets on the specific date is only the payment of principal and interest based on the principalamount outstanding. Among them, the principal refers to the fair value of financial assets upon initial recognition; interest includesconsideration for the time value of money, credit risks related to the principal amount outstanding in the specific period, and otherbasic lending risks, costs and profits. In addition, the Group evaluates the contract terms that may lead to changes in the timedistribution or amount of contractual cash flow of financial assets to determine whether they meet the requirements of theabove-mentioned contractual cash flow characteristics.Only when the Group changes the business mode of managing financial assets will all affected related financial assets be reclassifiedon the first day of the first reporting period after business model changes, otherwise financial assets cannot be reclassified after initialrecognition.Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value and whose changes areincluded in current profit and loss, relevant transaction expenses are directly included in current profit and loss; for other types offinancial assets, relevant transaction expenses are included in the initial recognition amount. For accounts receivable arising from thesale of products or the provision of labor services, which do not include or do not consider significant financing components, theamount of consideration the Group is expected to be entitled to receive is taken as the initial recognition amount.
(3) Classification and measurement of financial liabilities
The Group's financial liabilities are classified upon initial recognition as: financial liabilities measured at fair value and whosechanges are included in current profit and loss, and financial liabilities measured at amortized cost. For financial liabilities that arenot classified as measured at fair value and whose changes are included in current profit and loss, relevant transaction costs areincluded in the initial recognition amount.Financial liabilities measured at fair value and whose changes are included in current profit and lossFinancial liabilities measured at fair value and whose changes are included in current profit and loss include transactional financialliabilities and financial liabilities designated as measured at fair value upon initial recognition and whose changes are included incurrent profit and loss. Subsequent measurement shall be carried out according to fair value for such financial liabilities. Gains orlosses resulting from changes in fair value and dividends and interest expenses related to such financial liabilities shall be included incurrent profit and loss.Financial liabilities measured at amortized costOther financial liabilities are subsequently measured at amortized cost by using the effective interest method. Gains or lossesresulting from derecognition or amortization are included in current profit and loss.Distinction between financial liabilities and equity instrumentsFinancial liabilities refer to liabilities that meet one of the following conditions:
① The contractual obligation to deliver cash or other financial assets to other parties.
② The contractual obligation to exchange financial assets or financial liabilities with other parties under potentially unfavorableconditions.
③ Non-derivative contracts that must be or can be settled with the enterprise's own equity instruments in the future, and theenterprise will deliver a variable number of its own equity instruments according to the contract.
④ Derivative contracts that must be or can be settled with the enterprise's own equity instruments in the future, except derivativescontracts that exchange a fixed amount of cash or other financial assets with a fixed amount of its own equity instruments.
Equity instruments refer to contracts that can prove that an enterprise has the residual equity in its assets after deducting all liabilities.If the Group cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets, thecontractual obligation meets the definition of financial liability.If a financial instrument must be or can be settled with the Group's own equity instruments, it is necessary to consider whether theGroup's own equity instruments used to settle the instrument are used as substitutes for cash or other financial assets or to enable theholder of this instrument to enjoy the residual equity in the assets after deducting all liabilities from the issuer. If it is the former, thisinstrument is the Group's financial liability; if the latter is the case, this instrument is the Group's equity instrument.
(4) Derivative financial instruments and embedded derivatives
The Group's derivative financial instruments include forward foreign exchange contracts. Initially, the fair value on the date when thederivative transaction contract is signed shall be used for measurement, and the fair value shall be used for subsequent measurement.Derivative financial instruments with positive fair value are recognized as an asset, while those with negative fair value are indeedrecognized as a liability. Any gains or losses arising from changes in fair value that do not conform to the provisions of hedgeaccounting are directly included in current profit and loss.For hybrid instruments containing embedded derivatives, such as the main contract is a financial asset, the relevant provisions onclassification of financial assets shall apply to the hybrid instruments as a whole. If the main contract is not a financial asset, and thehybrid instrument is not measured at fair value and its changes are included in current profit and loss for accounting treatment, theembedded derivative instrument has no close relationship with the main contract in terms of economic characteristics and risks, andhas the same conditions as the embedded derivative instrument, and the separate existing instrument meets the definition ofderivative instrument, the embedded derivative instrument shall be separated from the hybrid instrument and treated as a separatederivative financial instrument. If it is not possible to separately measure embedded derivative instruments at the time of acquisitionor the subsequent balance sheet date, the hybrid instruments as a whole are designated as financial assets or financial liabilitiesmeasured at fair value and their changes are included in current profit and loss.
(5) Fair value of financial instruments
See Note V (10) for the method of determining the fair value of financial assets and liabilities.
(6) Impairment of financial assets
The Group conducts impairment accounting treatment for the following items and confirms the loss provision based on the expectedcredit losses:
Financial assets measured at amortized cost;Receivables and creditors' investments measured at fair value and whose changes are included in other comprehensive income;Lease receivables;Financial guarantee contracts (except those that are measured at fair value and whose changes are included in current profit and loss,the transfer of financial assets does not meet the conditions for derecognition or continue to involve in the transferred financialassets).Measurement of expected credit lossExpected credit loss refers to the weighted average of the credit losses of financial instruments weighted by the risk of default. Creditloss refers to the difference between all contractual cash flows discounted at the original effective interest rate and receivableaccording to the contract and all cash flows expected to be collected of the Group, i.e. the present value of all cash shortfalls.Considering the reasonable and reliable information about past events, current situation and the forecast of future economic situation,the company takes the risk of default as the weight, calculates the probability weighted amount of the present value of the differencebetween the cash flow receivable from the contract and the cash flow expected to be received, and confirms the expected credit loss.The Group separately measures the expected credit losses of financial instruments at different stages. If the credit risk of financialinstruments has not increased significantly since the initial recognition, it is in the first stage. The Group measures the loss reserve
according to the expected credit loss in the next 12 months; if the credit risk of financial instruments has increased significantly sinceits initial recognition but no credit impairment has occurred, it is in the second stage. The Group measures the loss reserve accordingto the expected credit loss during the whole duration of this instrument; if the financial instrument has suffered credit impairmentsince its initial recognition, it is in the third stage. The Group measures the loss reserve according to the expected credit loss duringthe whole duration of this instrument.For financial instruments with low credit risk on the balance sheet date, the Group assumes that their credit risk has not increasedsignificantly since the initial recognition, and measures the loss reserve according to the expected credit loss in the next 12 months.The expected credit loss during the whole duration refers to the expected credit loss caused by all possible default events during thewhole expected duration of financial instruments. The expected credit loss in the next 12 months refers to the expected credit losscaused by the possible default events of financial instruments within 12 months (or the expected duration if the expected duration offinancial instruments is less than 12 months) after the balance sheet date, which is part of the expected credit loss in the wholeduration.When measuring the expected credit loss, the longest term that the Group needs to consider is the longest contract term that theenterprise faces credit risk (including the option to renew the contract).The Group calculates interest income based on the book balance before deducting impairment provisions and the effective interestrate for financial instruments in the first and second stages and with low credit risk. The interest income shall be calculated accordingto their book balance minus the amortized cost after impairment provision and the effective interest rate for financial instruments inthe third stage.The Group always measures its loss reserves at an amount equivalent to the expected credit loss during the entire duration for notesreceivable and accounts receivable, regardless of whether there is any significant financing component.If a single financial asset cannot be used to evaluate the expected credit loss information at a reasonable cost, the Group will dividethe notes receivable and accounts receivable into portfolio on the basis of the credit risk features, and calculate the expected creditloss based on the portfolio. The basis for determining the portfolio is as follows:
A. Notes receivableNotes receivable portfolio 1: bank acceptance bills and L/CNotes receivable portfolio 2: commercial acceptance billsB. Accounts receivableAccounts receivable portfolio 1: payment not overdue (with credit insurance)Accounts receivable portfolio 2: payment not overdue (without credit insurance)Accounts receivable portfolio 3: payment overdue (with credit insurance)Accounts receivable portfolio 4: payment overdue (without credit insurance)For notes receivable divided into portfolios, with reference to historical credit loss experience, combined with current conditions andpredictions of future economic conditions, the Group has calculated expected credit losses through default risk exposure andexpected credit loss rate for the entire duration.For accounts receivable divided into portfolios, with reference to historical credit loss experience, combined with current conditionsand predictions of future economic conditions, the Group has prepared a comparison table between the number of overdue days ofaccounts receivable and the expected credit loss rate over the entire duration, and has calculated the expected credit loss.Other receivablesThe Group divides other receivables into several portfolios based on the features of credit risk, and calculates the expected creditlosses on the basis of the combination. The basis for determining the portfolio is as follows:
Other receivables portfolio 1: Receivables from related parties within the scope of consolidationOther receivables portfolio 2: Tax refund receivable
Other receivables portfolio 3: Deposit receivable and security depositOther receivables portfolio 4: other accountsFor other receivables that are divided into portfolios, the Group calculates the expected credit loss with the default risk exposure andthe expected credit loss rate within the next 12 months or the entire duration.Long-term receivablesThe long-term receivables of the Group include finance lease receivables and long-term advance receivables.Based on credit risk characteristics, the Group divides long-term receivables into portfolios of finance lease receivables and otherlong-term receivables, calculates expected credit losses based on the portfolio. The basis for determining the portfolio is as follows:
A. Finance lease receivable portfolio: finance lease receivableB. Other long-term receivables: prepaid receivablesFor the financial lease receivables, the with reference to the historical credit loss experience, in combination with the current situationand the prediction of the future economic situation, the Group calculates the expected credit loss with the default risk exposure andthe expected credit loss rate for the entire duration.Others, except finance lease receivables, are divided into portfolio long-term receivables; the Group calculates expected credit losseswith default risk exposure and expected credit loss rate within the next 12 months or the entire duration.Creditors' investment and other creditors' investmentFor creditors' investment and other creditors' investment, the Group calculates the expected credit based on the nature of theinvestment, as well as kinds of types of counterparties and risk exposures, the default risk exposure and the expected credit loss ratewithin the next 12 months or the entire duration loss.Assessment on significant increase of credit riskIn order to determine the relative changes in the default risk of financial instruments during their expected life and to assess whetherthe credit risk of financial instruments has increased significantly since initial recognition, the Group compares the default risk offinancial instruments on the balance sheet date with the default risk on the initial recognition date.When determining whether the credit risk has risen greatly since the initial recognition, the Group considers reasonable and reliableinformation (forward-looking information inclusive) that can be obtained without unnecessary extra costs or efforts. The informationthe Group considers shall include:
The debtor fails to pay the principal and interest according to the contract expiration date;The external or internal credit ratings (if any) of financial instruments, which have occurred or are expected, deteriorate significantly;The debtor’s operating results, which have occurred or are expected, deteriorate significantly;Existing or expected changes in technology, market, economy or legal environment will lead to a great adverse effect on the debtor'sability to repay the Group.Based on the nature of financial instruments, the Group assesses whether there is great risk in credit risk on the basis of individualfinancial instruments or financial instrument portfolios. During assessment based on financial instrument portfolios, the Group candivide financial instruments on the basis of common credit risk characteristics, such as overdue information and credit risk ratings.In case that the period overdue exceeds 30 days, the Group determines that there is a significant increase in the credit risk of financialinstruments.Financial assets with depreciation of creditThe Group assesses, on the balance sheet date, whether there is any credit impairment to financial assets measured at amortized costand creditors' investment measured at fair value and whose changes are included in other comprehensive income. In case of one ormore events that adversely affect the expected future cash flow of a financial asset occur, the financial asset will become financialassets with depreciation of credit. The observable information below can be treated as evidence for credit impairment to financialassets:
The issuer or debtor is caught in a serious financial difficulty;The debtor breaches the agreement of contract, such as default or overdue payment of interest or principal, or other default;Due to economic or contractual considerations related to the debtor's financial difficulties, the Group gives concessions to the debtor;and the concessions will not be made under any other circumstances;There lies a great probability of bankruptcy or other financial restructuring for the debtor;The issuer or debtor is caught in financial difficulties, which leads to the disappearance of the active market of the financial asset;Presentation of expected credit loss provisionThe Group remeasures expected credit losses on each balance sheet date to reflect the changes in the credit risk of financialinstruments since initial recognition; the increase or reversal amount of the loss reserve formed there from shall be included in thecurrent profit and loss as impairment losses or gains. For financial assets measured at amortized cost, the loss allowance offsets thecarrying amount of the financial asset listed in the balance sheet; for creditors’ investment that are measured at fair value and itschanges are included in other comprehensive income, the Group recognizes its loss reserve in other comprehensive income and willnot offset the carrying amount of the financial asset.Write-offsIn case that the Group fails to reasonably expect the contract cash flow of the financial asset to be recovered in a full or partial scale,the book balance of the financial asset will be written off directly. Such write-downs may constitute the derecognition for relatedfinancial assets. This situation occurs frequently when the Group determines that the debtor does not have any assets or any source ofincome to generate sufficient cash flow to repay the amount that will be written off. However, in accordance with the procedures forrecovering due payments of the Group, the written-off financial assets may still be affected by the execution activities.In case that the financial asset written off is recovered later, it shall be included in the current profit and loss as the reversal of theimpairment loss.
(7) Transfer of financial assets
The transfer of financial assets refers to the transfer or delivery of financial assets to another party (transferee) other than the issuer ofthe financial asset.If the Group has transferred almost all the risks and rewards of the ownership of financial assets to the transferee, derecognize thefinancial asset; if it retains almost all the risks and rewards of the ownership of financial assets, the financial asset will not bederecognized.If the Group has neither transferred nor retained almost all the risks and rewards of the ownership of financial assets, it shall be dealtwith in the following situations: if the control of the financial asset is abandoned, the confirmation of the financial asset shall beterminated and the generated assets and liabilities shall be confirmed; If the financial assets are controlled, the relevant financial assetsshall be recognized according to the extent of their continued involvement in the transferred financial assets, and the relevant liabilitiesshall be recognized accordingly.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities,and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financialasset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances,financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
10. Measurement of Fair Value
Fair value refers to the price that market participants can receive from sales of a asset or shall pay for transfer of a liability in theorderly transaction that occurs on the measurement date.The Group measures related assets or liabilities at fair value, assuming that the orderly transaction of selling assets or transferring
liabilities is conducted in the main market of related assets or liabilities; if there is no main market, the Group assumes that thetransaction is conducted in the most beneficial market. The main market (or the most favorable market) is the trading market that theGroup can enter on the measurement date. The Group uses the assumptions used by market participants to maximize their economicbenefits when pricing the asset or liability.For financial assets or financial liabilities with active markets, the Group uses the quotation in active markets to determine its fairvalue. If there is no active market for financial instruments, the Group uses valuation techniques to determine its fair value.When measuring non-financial assets at fair value, the ability of market participants to best use the asset for generating economicbenefits, or the ability to sell the asset to other market participants that can best use the asset to generate economic benefits shall beconsidered.The Group adopts valuation techniques that are applicable in the current situation and have sufficient available data and otherinformation to support it. Priority is given to using relevant observable input values. Only when observable input values areunavailable or are not feasible to obtain, the unobservable input values can be used. For assets and liabilities measured or disclosed atfair value in the financial statements, the fair value hierarchy to which they belong is determined based on the lowest level inputvalue that is important to the fair value measurement as a whole: the first level input value is the unadjusted quotation of the sameassets or liabilities able to be obtained in an active market on the measurement date; the second level input value is the directly orindirectly observable input value of the relevant asset or liability except the first level input value; the third level input value isunobservable input value of related assets or liabilities.On each balance sheet date, the Group reassessed the assets and liabilities continuously measured at fair value confirmed in thefinancial statements to determine whether there is a transition among levels of fair value measurement.Presented respectively without mutual offset.
11. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress, stock products, product processed on entrustment, consumptivebiological assets and etc.
(2) Valuation method of inventories acquiring and issuing
Inventories shall be measured at actual cost when acquired, and the cost of the inventories including the procurement cost, processingcost and other costs. Grey yarn, dyed yarn, and plus material shall be measured at first-in first-out method when acquired anddelivered; other inventories shall be measured as per the weighted average method
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventoriesNet realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, theestimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidenceobtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value isbelow the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value isdetermined by the difference of the cost of individual item less its realizable value. After the provision for decline in value ofinventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that thenet realizable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal isincluded in profit or loss for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of the low-value consumption goods and packing articles
For the Low-value consumption goods, should be amortized by one-off amortization method when consuming.
For the packing articles, should be amortized by one-off amortization method when consuming.
12. Long-term Equity Investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and associated enterprises. The investee thatthe Group is able to exert significant influence is an associated enterprise of the Group.
(1) Determination of initial investment cost
Long-term equity investment that forms a business combination: Long-term equity investment obtained by business combinationunder the same control, on the merger date, based on the book value share of the merged party’s owners’ equity in the finalcontroller’s consolidated financial statements as investment cost; The long-term equity investment acquired by a businesscombination shall be the investment cost of the long-term equity investment according to the cost of the combination.For long-term equity investments obtained by other means: the long-term equity investment obtained by paying cash shall be theinitial investment cost according to the actual purchase price; the long-term equity investment obtained by issuing equity securitiesshall be the initial investment cost of the fair value of the equity securities issued.
(2) Subsequent measurement and profit and loss confirmation method
Investment in subsidiaries is accounted for using the cost method unless the investment meets the conditions for holding for sale;investment in associates and joint ventures is accounted for using the equity method.For long-term equity investments that are accounted for using the cost method, in addition to the cash dividends or profits that havebeen declared but not yet included in the actual payment or consideration included in the investment, the cash dividends or profitsdeclared by the invested entity are recognized as investment income and recorded into the current profit and loss.For long-term equity investments accounted for using the equity method, where the initial investment cost is greater than the fairvalue share of the investee’s identifiable net assets at the time of investment, the investment cost of the long-term equity investmentis not adjusted; when the initial investment cost is less than the investment, the investee ’s If the fair value share of net assets isidentified, the book value of the long-term equity investment is adjusted, and the difference is included in the current profit and lossof the investment.When using the equity method of accounting, the investment income and other comprehensive income are recognized separatelyaccording to the share of net profit and loss and other comprehensive income realized by the invested unit that should be enjoyed orshared, and the book value of the long-term equity investment is adjusted at the same time; The distribution of profits or cashdividends should be calculated to reduce the book value of long-term equity investment; the investee's other changes in owner'sequity other than net profit and loss, other comprehensive income and profit distribution, adjust the book value of long-term equityinvestment and Included in capital reserves (other capital reserves). When confirming the share of the investee’s net profit or loss,based on the fair value of the investee’s identifiable assets at the time of investment, and in accordance with the Group’s accountingpolicies and accounting period, the net profit of the investee Confirm after making adjustments.If the additional investment and other reasons can exert significant influence on the investee or exercise joint control but do notconstitute control, on the conversion date, the sum of the fair value of the original equity plus the additional investment cost will beused as the initial accounting for the equity method cost of investment. The difference between the fair value of the original equity onthe conversion date and the book value, as well as the cumulative changes in fair value originally included in other comprehensiveincome, are transferred to the current profit and loss accounted for using the equity method.If the joint control or significant influence on the invested unit is lost due to the disposal of part of the equity investment, etc., theremaining equity after the disposal shall be changed to the Accounting Standards for Business Enterprises No. 22-Recognition andMeasurement of Financial Instruments is performed, and the difference between fair value and book value is included in the currentprofit and loss. Other comprehensive income recognized by the original equity investment due to the equity method of accountingshall be accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when the equity method ofaccounting is terminated; changes in other owners ’equity related to the original equity investment Transfer to current profit and loss.
If the control of the invested unit is lost due to the disposal of part of the equity investment, if the remaining equity after the disposalcan exercise joint control or exert significant influence on the invested unit, the equity method is used for accounting and theremaining equity is treated as When acquiring, the equity method is adopted for adjustment; if the remaining equity after disposalcannot exercise joint control or exert significant influence on the investee, the accounting shall be changed according to the relevantprovisions of "Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial Instruments Thedifference between the fair value and the book value on the date of loss of control is included in the current profit and loss.If the shareholding ratio of the company decreases due to the capital increase of other investors, thereby losing control but being ableto exercise joint control or exert significant influence on the investee, the new shareholding ratio shall be used to confirm that thecompany should enjoy the capital increase of the investee. The difference between the increase in share and the increase in the shareof net assets and the original book value of the long-term equity investment corresponding to the decrease in the proportion of theshareholding that should be carried forward are included in the current profit and loss; That is, adjustments are made using the equitymethod of accounting.The unrealized internal transaction gains and losses that occur between the Group and associates and joint ventures are calculatedaccording to the shareholding ratio and are attributed to the Group, and the investment gains and losses are recognized on the basis ofoffset. However, the unrealized internal transaction losses incurred by the Group and the investee are the impairment losses of thetransferred assets and shall not be offset.
(3) Determine the basis for joint control and significant influence on the invested unit
Joint control refers to the common control of an arrangement in accordance with the relevant agreement, and related activities of thearrangement must be agreed upon by the parties sharing control rights before they can make decisions. When judging whether thereis joint control, first determine whether all participants or a combination of participants collectively control the arrangement, andsecondly determine whether the decision-making related activities of the arrangement must be unanimously agreed by theparticipants who collectively control the arrangement. If all participants or a group of participants must act in concert to determinethe relevant activities of an arrangement, it is considered that all participants or a group of participants collectively control thearrangement; if there is a combination of two or more participants can collectively Controlling an arrangement does not constitutejoint control. When judging whether there is joint control, the protective rights enjoyed are not considered.Significant influence means that the investor has the right to participate in the decision-making of the financial and operating policiesof the invested unit, but cannot control or jointly control the formulation of these policies with other parties. When determiningwhether it can exert significant influence on the invested unit, consider that the investor directly or indirectly holds the voting sharesof the invested unit and the current executable potential voting rights held by the investor and other parties are assumed to beconverted into the invested unit After the equity of the company, the impact includes the current convertible warrants, stock optionsand convertible corporate bonds issued by the investee.When the company directly or indirectly owns more than 20% (including 20%) but less than 50% of the voting shares of the investedunit, it is generally considered to have a significant impact on the invested unit, unless there is clear evidence that such circumstancescannot participate in the production and operation decisions of the invested unit, and does not have a significant impact; when theGroup owns less than 20% (excluding) voting rights of the invested unit, it generally does not consider it to have a significant impacton the invested unit unless there is clear evidence that Under these circumstances, it can participate in the production and operationdecisions of the invested unit and have a significant impact.
(4) Impairment test method and impairment provision method
For the investments in subsidiaries, associates and joint ventures, the method of accruing asset impairment is shown in the NoteV-18.
13. Investment Property
Measurement model of investment real estate
Costing method measurementDepreciation or amortization methodThe investment real estate refers to the real estate gaining the rent or capital appreciation or both. It includes rented land use right,holding land use right to be transferred after the appreciation and rented building, etc.The investment real estate is measured initially according to the cost and withdraw depreciation or amortization as regulations offixed assets or intangible assets.The Company adopts the cost mode to conduct the subsequent measurement on the investment real estate, see the Note V-18 for themethod of withdrawing asset impairment provision.The difference between the disposal income of investment real estate sales, transfer, scrap or damage after deducting its book value andrelated taxes is included in the current profit and loss.
14. Fixed Assets
(1) Conditions for Recognition
The term “fixed assets” refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for the sakeof producing commodities, rendering labor service, renting or business management; and (b) their useful life is in excess of one fiscalyear. The fixed assets are only recognized when the relevant economic benefits probably flow in the Company and its cost could bereliable measured. The fixed assets of the Group are initially measured at the actual cost at the time of acquisition. Please refer toNote V-18 for the test method of impairment of fixed assets and the method of impairment provision.
(2) Depreciation Methods
Category of fixed assets | Method | Useful life | Salvage value | Annual deprecation |
Housing and building | Average method of useful life | 5-30 | 0-10 | 20.00-3.00 |
Machinery equipments | Average method of useful life | 10-18 | 0-10 | 10.00-5.00 |
Transportation vehicle | Average method of useful life | 5 | 0-10 | 20.00-18.00 |
Electronic equipments and others | Average method of useful life | 5 | 0-10 | 20.00-18.00 |
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Assets by Finance Lease
When the fixed assets leased by the Group meet one or more of the following criteria, it is recognized as fixed assets leased byfinancing: ① When the lease term expires, the ownership of the leased assets is transferred to the Group. ② The Group has theoption to purchase leased assets, and the purchase price concluded is expected to be much lower than the fair value of the leasedassets when the option is exercised, so it can be reasonably determined that the Group will exercise this option on the lease start date.
③Even if the ownership of the asset is not transferred, the lease period accounts for most of the service life of the leased asset. ④The present value of the Group's minimum lease payment on the lease start date is almost equivalent to the fair value of the leasedasset on the lease start date. ⑤ The leased assets are of a special nature and only the Group can use them without major renovation.The fixed assets leased under financial leases shall be the booked value at the lower of the fair value of the leased assets on the lease
start date and the present value of the minimum lease payment. The minimum lease payment is taken as the book value of long-termpayables, and the difference is taken as unrecognized financing expenses. The initial direct costs such as handling fees, attorney’sfees, travel expenses, and stamp taxes that occurred during the lease negotiation and signing of the lease contract are included in thevalue of the leased asset. Unrecognized financing expenses are allocated using the effective interest rate method in each period of thelease period. Financing leased fixed assets adopts the same policy as its own fixed assets to withdraw depreciation of leased assets. Ifit can be reasonably determined that the ownership of the leased asset will be acquired at the end of the lease period, depreciation willbe accrued within the useful life of the leased asset; if it cannot be reasonably determined that the ownership of the leased asset canbe acquired at the end of the lease period, the depreciation shall be accrued in the shorter period between the lease period and theresidual life of the leased asset.
(4) Other Notes
At the end of each year, review is carried out by the Group for the service life, estimated net residual value and depreciation methodof fixed assets. If there is any difference between the expected service life and the original estimated service life, the service life offixed assets will be adjusted; if there is any difference between the expected net residual value and the original estimated net residualvalue, the expected net residual value will be adjusted.Major repair expenses incurred by the Group in the regular inspection of fixed assets are included in the cost of fixed assets ifevidences show that they meet the recognition conditions of fixed assets, and those fail to meet the recognition conditions of fixedassets are included in the current profit and loss. Fixed assets at intervals of regular major repairs shall be depreciated as accrued.
15. Construction in Progress
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible forcapitalization before the fixed assets being ready for their intended us and other relevant costs.Construction in process is transferred to fixed assets when the assets are ready for their intended use.See the details of the impairment provision withdrawal method of the construction in progress to Notes V-18.
16. Biological Assets
(1) Criteria for determination of biological assets
Biological assets refer to the assets composed of living animals and plants. It shall be recognized if biological assets meet thefollowing conditions at the same time:
① The enterprise owns or controls the biological assets on account of past transactions or events;
② The economic benefits or service potential related to the biological assets are likely to flow into the enterprise;
③ The cost of the biological assets can be reliably measured.
(2) Classification of biological assets
The biological assets of the Group include consumptive biological assets and productive biological assets.
①Consumptive biological assets
Consumptive biological assets refer to the biological assets held for sale or to be harvested as agricultural products in future,including crops, vegetables under growing, timber production forest and domestic animals for sale. The consumptive biologicalassets shall be measured based on cost. All costs for planting, creating, cultivating or raising of consumptive biological assets shall bethe necessary expenses directly added to such assets that accrued before harvest, including any loan that satisfies capitalizationconditions. Subsequent expenses for keeping and feeding the consumptive biological assets after the harvest should be recognized asthe losses and gains of the current period.
Upon harvest or sale, the cost of consumptive biological assets shall be based on its book value through weighted average.
②Productive biological assets
Productive biological assets refer to agricultural products produced, and biological assets held for labor provision or lease, includingeconomic forest, firewood forest, productive animals and labor animals. The productive biological assets shall be measured based oncost. All costs for creating or fostering productive biological assets shall be the necessary expenses directly added to such assets thataccrued before it reaches expected production purpose, including any loan that satisfies capitalization conditions.The management, maintenance and feed cost, which incurred after the productive biological assets are closed or the expectedproduction and operation purpose are achieved, will be included in the current profit and loss.The depreciation of productive biological assets is calculated by the straight-line method. The depreciation rate is determined asfollows after deducting the residual value based on the estimated service life of various biological assets:
Category | Service life (year) | Residuals rate % | Annual depreciation rate % |
Stockbreeding | |||
① Livestock | 5 | 5 | 19 |
The Company shall review the service life, expected net residuals and depreciation method of the productive biological assets at leastby the end of the year. In case of any change, it shall be deemed as accounting estimate change.The difference between proceedings from disposal (sale, loss, death or damage) of the productive biological assets deducted by bookvalue and related tax shall be recognized as loss and gain for the current period.
(3) Treatment of impairment of biological assets
If the net realizable value of the consumptive biological asset is lower than its carrying amount, falling price reserves of thebiological asset shall be accrued according to the difference between the net realizable value and the carrying amount, and it shall beincluded in the current profit and loss. If the factors influencing the impairment of consumptive biological assets have beeneliminated, the write-down amount shall be recovered and reversed within the amount of the original falling price reserves, and thereversed amount shall be included in the current profit and loss.Please refer to Note V-18 for the method of provision for impairment of assets of productive biological assets.
17. Intangible Assets
(1) Pricing Method, Useful Life and Impairment Test
The intangible assets of the Group include land use right, patent right, etc.Intangible assets are initially measured at cost, and their service life is analyzed and determined when intangible assets are acquired.If the service life of intangible assets is limited, the intangible assets shall be amortized by the method that can reflect the expectedrealization method of the economic benefits related to the assets within the expected service life since they are available for use. Thestraight-line method shall be used for amortization if no expected realization method can be determined reliably. Intangible assetswith uncertain service life shall not be amortized.The amortization method of intangible assets with limited service life is as follows:
Category | Service life | Amortization method | Note |
Land use right | Stipulated in the land certificate | Method of line |
Patent use right | 10 years | Method of line |
Software use right | 1-3 years | Method of line |
Brand use right | 10 years | Method of line |
At the end of each year, the Group reviews the service life and amortization method of intangible assets with limited service life. Ifthe estimate is different from the previous one, the original estimate shall be adjusted and treated as per accounting estimate change.If it is estimated that an intangible asset can no longer bring future economic benefits to the enterprise on the date of balance sheet,this carrying amount of the intangible asset shall be transferred into the current profit and loss.The method of withdrawing impairment on intangible assets was stated in the Note V-18.
(2) Accounting Policy for Internal Research and Development Expenditures
The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures anddevelopment expenditures.The research expenditures shall be recorded into the profit or loss for the current period.The development expenditures can be capitalized only when they satisfy the following conditions simultaneously: ① It is feasibletechnically to finish intangible assets for use or sale; ② It is intended to finish and use or sell the intangible assets; ③ The usefulnessof methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potentialmarket for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself orthe intangible assets will be used internally; ④ It is able to finish the development of the intangible assets, and able to use or sell theintangible assets, with the support of sufficient technologies, financial resources and other resources; ⑤ The developmentexpenditures of the intangible assets can be reliably measured. The development expenditures shall be recorded into profit or loss forthe current period when they don’t satisfy the following conditions.The research and development project of the Group will enter the development stage after meeting the above conditions and theproject is approved and initiated through technical feasibility and economic feasibility study.The capitalized expenditure in the development stage is listed as expenditure for development on the balance sheet, and it will betransferred to intangible assets from the date when the project reaches the intended purpose.
18. Impairment of Long-term Assets
For long term equity investment in subsidiaries, associated enterprises and joint ventures, investment real estate which follow-upmeasurement is carried out by cost pattern, fixed assets, project under construction, productive biological assets measured by costpattern, intangible assets, business reputation, etc. (excluding inventory, investment real estate measured by fair value pattern,deferred income tax assets, financial assets), the impairment of assets shall be determined according to the following methods:
On the date of the balance sheet, determination shall be made to see whether there is any sign of possible impairment of assets. Ifthere is, the Group will estimate its recoverable amount and conduct impairment test. For goodwill, intangible assets with uncertainservice life and intangible assets that have not reached the serviceable state due to business merger, impairment test shall be carriedout every year regardless of whether there is any sign of impairment.The recoverable amount is determined according to the net amount of the fair value of the asset minus the disposal expenses and thepresent value of the expected future cash flow of the asset, the higher amount shall be prevail. The Group estimates the recoverableamount on the basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable amount ofthe asset group shall be determined based on the asset group to which the asset belongs. The asset group is determined on the basis ofwhether the main cash inflow generated by the asset group is independent of the cash inflow of other assets or asset groups.When the recoverable amount of an asset or asset group is lower than its carrying amount, the group will write down its carryingamount to the recoverable amount, and the written down amount will be included in the current profit and loss, and the correspondingasset impairment reserve will be accrued.
Regarding the impairment test of business reputation, the carrying amount of business reputation formed by business merger shall beapportioned to the relevant asset group in a reasonable way from the date of purchase. If it is difficult to apportion to the relevantasset group, it shall be apportioned to the relevant combination of asset group. The relevant asset group or combination of assetgroups is the one that can benefit from the synergy effect of business merger, and is the one smaller than the reportable segmentdetermined by the Group.In the impairment test, if there is any sign of impairment in the asset group or combination of asset groups related to businessreputation, first, impairment test shall be carried out on the asset group or combination of asset groups not containing businessreputation, to calculate the recoverable amount and recognize the corresponding impairment loss. Then impairment test shall becarried out on the asset group or combination of asset group containing business reputation to compare the carrying amount with therecoverable amount. If the recoverable amount is lower than the carrying amount, the impairment loss of business reputation shall berecognized.Once the impairment loss of assets is recognized, it will not be reversed in the future accounting period.
19. Long-term Deferred Expenses
The long-term expenses to be amortized incurred by the Group are valued at the actual cost and amortized averagely according to theexpected benefit period. For long-term expenses to be amortized, the amortized value that cannot benefit the future accounting periodshall be included in the current profit and loss.
20. Contract liabilities
Contract liabilities reflect the Company’s obligation of transferring commodities to customers for the consideration received orreceivable from them. Before the transfer of a commodity to a customer, if the customer has paid the contract consideration or gainedthe right to charge the contract consideration unconditionally, the contract liability should be recognized by the amount received orreceivable at the earlier between the customer’s actual payment and the due date of the amount payable. Contract assets and contractliabilities under the same contract are presented in net amounts, and contract assets and contract liabilities under different contractsshould not be offset.
21. Payroll
(1) Accounting Treatment of Short-term Compensation
During the accounting period in which employees provide services, the Group recognizes the actual employee wages, bonuses, socialinsurance premiums such as medical insurance premiums, industrial injury insurance premiums, and maternity insurance premiumsand housing provident funds paid to employees according to the prescribed standards and proportions as liabilities and included themin the current profit and loss or related asset costs. If the liability is not expected to be fully paid within twelve months after the endof the annual reporting period for employees to provide related services, and the financial impact is significant, the liability will bemeasured at the discounted amount.
(2) Accounting Treatment of the Welfare after Departure
The post-employment benefit plan includes a defined contribution plan and a defined benefit plan. Among them, the definedcontribution plan refers to the post-employment benefit plan that the enterprise no longer assumes further payment obligations afterthe fixed fund has paid a fixed fee; the defined benefit plan refers to the post-employment benefit plan other than the established
contribution plan.Set withdrawal planThe set contribution plan includes basic pension insurance and unemployment insurance.During the accounting period in which employees provide services, the amount of deposit payable calculated according to the setwithdrawal plan is recognized as a liability and included in the current profit and loss or related asset costs.Define a benefit planFor the defined benefit plan, an independent actuary performs an actuarial valuation on the annual balance sheet date, and the cost ofproviding benefits is determined by the expected cumulative benefit unit method. The employee compensation cost caused by theGroup's defined benefit plan includes the following components:
①Service cost, including current service cost, past service cost and settlement gains or losses. Among them, the current service costrefers to the increase in the present value of the defined benefit plan obligations caused by the employees providing services in thecurrent period; the past service cost refers to the defined benefit related to the employee services in the previous period caused by themodification of the defined benefit plan An increase or decrease in the present value of plan obligations.
② The net interest of the net liabilities or net assets of the defined benefit plan, including the interest income of the plan assets, theinterest expense of the defined benefit plan obligations and the interest affected by the asset ceiling.
③ Re-measure the changes caused by the net liabilities or net assets of the defined benefit plan.Unless other accounting standards require or allow employee benefit costs to be included in the cost of assets, the Group will includethe above items ① and ② into the current profit and loss; item ③ is included in other comprehensive income and will not betransferred back to profit or loss in the subsequent accounting period When the defined benefit plan is terminated, all the partsoriginally included in other comprehensive income are carried forward to undistributed profits within the scope of equity.
(3) Accounting Treatment of the Demission Welfare
The Company relieves the labor relation with the employees before the due date of the labor contacts or puts forward the advice ofproviding the compensation for urging the employees volunteered to receive the downsizing and when the Company could notunilaterally withdraw the demission welfare owning to the relieving plan of the labor relation or the downsizing advice, shouldconfirm the liabilities of the employees’ salary from the demission welfare on the earlier day between the cost confirmed by theCompany and the cost related to the reorganization of the payment of the demission welfare and includes which in the current gainsand losses.Regarding the implementation of internal retirement plan of the employees, the economic compensation before the official retirementdate belongs to the dismissal welfare. From the date when the employees stop providing services to the normal retirement date, thewages and social insurance premiums to be paid to the early retired employees shall be included in the current profit and loss at onetime. Financial compensation (such as normal pension) after the official retirement date shall be handled as welfare after separation.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
Other long-term employee benefits provided by the Group to employees that meet the conditions of defined contribution plans shallbe handled in accordance with the above-mentioned relevant provisions on defined contribution plans. Those in line with the definedbenefit plan shall be handled in accordance with the above-mentioned relevant provisions on the defined benefit plan. However, thepart of "changes caused by remeasuring the net liabilities or net assets of the defined benefit plan" in the salary cost of relevantemployees shall be included in the current profit and loss or the relevant asset cost.
22. Revenue
Accounting policies adopted for the recognition and measurement of revenue
(1) General principle
The Company recognizes revenue when it has fulfilled its contract performance obligation in a contract, namely, when the customerobtains the control over the related commodity or service.
① Selling commodities
The Company recognizes operating revenue when: the major risks and remunerations in respect of the commodity ownership havebeen transferred to the buyer in the sales of a commodity; the Company no longer exercises continued management and actualcontrol over the commodity; economic interests in relation to the transaction are very likely to flow in the Company; and revenue andcosts in relation to the sales of the commodity can be reliably measured.The specific sales revenue recognition time point in major transaction models:
The sales revenue recognition time point is when: the goods specified in a contract have been delivered with the receiptacknowledgement of the customer; the payment voucher has been obtained and related economic interests are very likely to flow inthe Company; and the costs in relation to the products can be measured reliably.
② Providing labor service
For labor commenced and completed in the same accounting year, the revenue is recognized at the completion of the labor service; ifthe commencement and completion of a labor service fall in different accounting years, the labor service revenue should berecognized at the end of the period by the percentage of the service completed towards completion, provided that the result ofproviding the labor transaction can be estimated reliably; the specific recognition method: After providing a labor service, theCompany recognizes the revenue when the other party inspects and accepts the service and issues the invoice.
③ Assigning the right to use an asset
The interests revenue and the use revenue obtained from the assignment of the right to use an asset are recognized when economicinterests in relation to the transaction are able to flow in the Company and the amount of revenue can be measured reliably. Revenuefrom the assignment of the right to use an asset includes interests revenue and use revenue. The amount of the interests revenueshould be recognized according to the period of the party using the Company’s monetary fund and the effective interest rate; theamount of the use revenue should be recognized according to the period and method specified in the related contract or agreement.Differences in accounting policies for revenue recognition due to different business models of the same type of business
(2) Specific methods
The Company uses the following methods to recognize the revenue from commodity sales:
For revenue from domestic sales of products, the Company recognizes the revenue after delivering the products to the purchaserpursuant to the contract with receipt acknowledgement from the purchaser.For revenue from export sales of products, the Company recognizes the revenue when obtaining the bill of lading after customsdeclaration and departure from the port pursuant to the contract.Differences in accounting policies for revenue recognition due to different business models of the same type of businessNot applicable.
23. Government Grants
Government grants are recognized when they meet the conditions attached to government grants and when they can be received.Government grants for monetary assets shall be measured according to the amount received or receivable. Government grants fornon-monetary assets shall be measured by fair value, and they shall be measured by the nominal amount of RMB1 if the fair value
cannot be obtained reliably. Asset related government grants refer to the government grants obtained by the Group for acquisition andconstruction or other forms of long-term assets. In addition, they are government grants related to income.Regarding the government grants that the government document does not specify the object of subsidy and can form long-term assets,the part of government subsidy corresponding to the asset value shall be regarded as the asset-related government subsidy and therest shall be regarded as income-related government subsidy. If it is difficult to distinguish, the government subsidy shall be regardedas the income-related government subsidy.The government grants related to assets shall be recognized as the deferred income, which shall be included in the profit and loss ininstallment in a reasonable and systematic way within the service life of the relevant assets. Income-related government grants whichare used to compensate the relevant costs or losses incurred shall be included in the current profit and loss. Those used to compensatethe relevant costs or losses in the later period shall be included in the deferred income, and shall be included in the current profit andloss during the recognition period of the relevant costs or losses. The government grants measured according to the nominal amountshall be directly included in the current profit and loss. The same method is adopted for the same or similar government subsidybusinesses of the Group.Government grants related to daily activities shall be included in other incomes according to the essence of business transactions.Government grants irrelevant to daily activities are included in non-business income.When the recognized government grants need to be returned, the book balance of relevant deferred income shall be offset if there is abalance of relevant deferred income, and the excess part shall be included in the current profit and loss. Otherwise, it shall be directlyincluded in the current profit and loss.Regarding the interest subsidy of the policy preferential loan obtained, if the Ministry of Finance allocates the interest subsidy to theloan bank, the actual received loan amount shall be taken as the entry value of the loan, and the loan cost shall be calculatedaccording to the loan principal and the policy preferential interest rate. If the Ministry of Finance allocates the interest subsidydirectly to the Group, the interest subsidy will offset the borrowing costs.
24. Deferred Income Tax Assets/Deferred Income Tax Liabilities
Income tax includes current income tax and deferred income tax. All shall be included in the current profit and loss as income taxexpense except the adjustment business reputation arising from business merger, or the deferred income tax related to the transactionsor events directly included in the owner's equity is included in the owner's equity.Pursuant to the temporary difference between the carrying amount of assets and liabilities on the date of balance sheet and the taxbasis, the Group recognizes the deferred income tax by balance sheet liability method.For all taxable temporary differences, related deferred income tax liabilities are recognized, unless the taxable temporary differencesare generated in the following transactions:
(1) The initial recognition of business reputation or the initial recognition of assets or liabilities arising from transactions with thefollowing characteristics: The transaction is not a business merger, and does not affect the accounting profit or taxable income whenit occurs;
(2) Regarding the taxable temporary difference related to the investment of subsidiaries, joint ventures and associated enterprises, thetime of reversal of the temporary difference can be controlled and the temporary difference is unlikely to be reversed in theforeseeable future.For deductible temporary differences, deductible losses and tax credits that can be carried forward in subsequent years, the Group islikely to obtain the future taxable income as the limit to offset the deductible temporary differences, deductible losses and tax credits,in which way to recognize the deferred income tax assets arising from the deductible temporary differences, deductible losses and taxcredits, unless the deductible temporary differences are generated in the following transactions:
(1) The transaction is not a business merger, and does not affect the accounting profit nor taxable income when it occurs;
(2) The corresponding deferred income tax assets shall be recognized if the deductible temporary differences related to the
investment of subsidiaries, joint ventures and associated enterprises meet the following conditions simultaneously: The temporarydifferences are likely to be reversed in the foreseeable future, and the taxable income used to deduct the deductible temporarydifferences is likely to be obtained in the future.On the date of the balance sheet, the income tax assets and deferred income tax liabilities shall be measured by the Group on thebasis of the applicable tax rate during the period when the assets are expected to be recovered or the liabilities are expected to be paidoff, and the income tax impact on the expected recovery of assets on the date of the balance sheet or on the method to pay off theliabilities shall be reflected.The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxableincome to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall be writtendown. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income will beavailable.
25. Lease
(1) Accounting Treatment of Operating Lease
(1) The Group as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the current period by using the straight-linemethod over each period of the lease term. The initial direct costs shall be recorded into current profits and losses.
(2) The Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of thecurrent period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as theprofits and losses of the current period.
(2) Accounting Treatments of Financial Lease
(1) The Company as the lessor
On the beginning date of the lease term, the Company shall recognize the sum of the minimum lease receipts on the lease beginningdate and the initial direct costs as the entering value in an account of the financing lease values receivable, and record theunguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs andthe unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income.Unrecognized financing incomes shall be adopted by the effective interest rate method in the lease term, so as to calculate andrecognize current financing revenues.
(2) The Company as the lessee
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of theminimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum leasepayments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of theleased asset and the long-term account payable as unrecognized financing charges. The initial direct costs shall be recorded into valueof leased assets. Unrecognized financing charges shall be adopted by the effective interest rate method in the lease term, so as tocalculate and recognize current financing charges. The Group adopts a depreciation policy consistent with its own fixed assets toaccrue the depreciation of leased assets.
26. Other Significant Accounting Policies and Estimations
Pursuant to historical experience and other factors and reasonable expectations for future events, the Group continuously evaluatesthe important accounting estimates and key assumptions adopted. The important accounting estimates and key assumptions that arelikely to cause major adjustment risk to the carrying amount of assets and liabilities in the next fiscal year are listed as follows:
Classification of financial assetsDuring the recognition of the classification of financial assets by the Group, the major judgments involved include the analysis ofbusiness model and contract cash flow characteristics, etc.The Group determines the business model for managing financial assets at the level of financial asset portfolio, and factorsconsidered include methods of evaluation and reporting financial asset performance to key management personnel, risks affectingfinancial asset performance and their management methods, and the way in which relevant business management personnel are paid.When assessing whether the contractual cash flow of financial assets is consistent with the basic lending arrangements, the Group hasthe following main judgments: Whether the principal may change in the time distribution or amount during the duration due toprepayment and other reasons; whether the interest include only the time value of money, credit risk, other basic lending risks, andconsiderations of costs and profits. For example, whether the amount of prepayment only reflect the unpaid principal and interestbased on the unpaid principal, as well as reasonable compensation due to early termination of the contract.Measurement of expected credit loss of accounts receivableThe Group calculates the expected credit loss of accounts receivable through the default risk exposure and the expected credit lossrate of accounts receivable, and determines the expected credit loss rate based on the default probability and loss given default. Whendetermining the expected credit loss rate, the Group adjusts the historical data by using internal historical credit loss experience andother data, and combining the current situation and forward-looking information. The indicators used by the Group include risks ofeconomic downturn, changes in external market environment, technological environment and customer conditions, etc. whenconsidering forward-looking information. The Group regularly monitors and reviews assumptions related to the calculation ofexpected credit losses.Impairment of goodwillThe Group assesses whether goodwill is impaired at least annually. This requires estimating the value in use of the asset group towhich goodwill has been allocated. When estimating the value in use, the Group needs to estimate the future cash flows from theasset group and select the appropriate discount rate to calculate the present value of future cash flows.Deferred income tax assetsIn a limit providing large possibility of offset losses from sufficient taxable profits, the Group shall recognize deferred income taxassets in line with all unused tax losses, which requires management staffs of the Group to estimate the time when future taxableprofits occurs and the amount thereof by applying plenty of judgments and combining tax planning strategies, so as to determine theamount of the recognizable deferred income tax assets.Recognition of fair value of unlisted equity investmentWhen confirming the fair value of unlisted equity investments, the Group will choose an appropriate valuation method. The valuationmethod makes maximum use of observable market information. However, the management will estimate the significant unobservableinformation included in the valuation method when observable market information is unavailable. Under limited circumstances, if theinformation used to determine the fair value is insufficient, or the possible estimated amount of fair value is widely distributed, andthe cost represents the best estimate of fair value within the range, the cost may represent the appropriate estimate of fair value withinthe distribution range.
27. Changes in Main Accounting Policies and Estimates
(1) Significant Changes in Accounting Policies
√ Applicable □ Not applicable
Contents of changes in accounting policies and reasons thereof | Approval procedures | Note |
On 5 July 2017, the Ministry of Finance published the revision on the “Accounting Standards for Business Enterprises No. 14 - Revenue” (hereinafter referred to as “the new revenue standards”) (CK [2017] No. 22). Domestic listed companies shall implement the new revenue standards starting from 1 January 2020. Main content of the changes in the “Accounting Standards for Business Enterprises No. 14 - Revenue” includes (1) The current two standards for revenue and construction contracts are integrated into a unified revenue recognition model; (2) the transfer of control is used to replace the transfer of risks and remunerations as the criteria to judge the time point of revenue recognition; (3) clearer guidance is provided for the accounting treatment of a contract containing multiple transaction arrangements; (4) specific regulations are provided for the revenue recognition and measurement in some specific transactions (or matters). | The Company approved this change in accounting policies on the 13th Meeting of the 9th Board of Directors held on 28 April 2020. |
(2) Significant Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any NewStandards Governing Revenue or Leases since 2020ApplicableWhether need to adjust items of balance sheet at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Item | 31 December 2019 | 1 January 2020 | Adjusted |
Current assets: | |||
Monetary assets | 924,322,008.17 | 924,322,008.17 | |
Settlement reserve | |||
Interbank loans granted | |||
Held-for-trading financial assets | 52,356,098.85 | 52,356,098.85 | |
Derivative financial assets | |||
Notes receivable | 104,737,949.91 | 104,737,949.91 |
Accounts receivable | 515,306,599.62 | 515,306,599.62 | |
Accounts receivable financing | 26,963,818.87 | 26,963,818.87 | |
Prepayments | 56,828,987.59 | 56,828,987.59 | |
Premiums receivable | |||
Reinsurance receivables | |||
Receivable reinsurance contract reserve | |||
Other receivables | 59,743,471.84 | 59,743,471.84 | |
Including: Interest receivable | |||
Dividends receivable | |||
Financial assets purchased under resale agreements | |||
Inventories | 2,421,500,259.30 | 2,421,500,259.30 | |
Contract assets | |||
Assets held for sale | |||
Current portion of non-current assets | |||
Other current assets | 68,788,674.10 | 68,788,674.10 | |
Total current assets | 4,230,547,868.25 | 4,230,547,868.25 | |
Non-current assets: | |||
Loans and advances to customers | |||
Investments in debt obligations | |||
Investments in other debt obligations | |||
Long-term receivables | 7,058,233.71 | 7,058,233.71 | |
Long-term equity investments | 103,226,300.00 | 103,226,300.00 | |
Investments in other equity instruments | |||
Other non-current financial assets | 278,149,500.00 | 278,149,500.00 | |
Investment property | 45,896,747.87 | 45,896,747.87 | |
Fixed assets | 6,012,094,104.67 | 6,012,094,104.67 | |
Construction in progress | 400,235,070.01 | 400,235,070.01 | |
Productive living assets | |||
Oil and gas assets | |||
Right-of-use assets | |||
Intangible assets | 516,479,519.15 | 516,479,519.15 | |
Development costs | |||
Goodwill | 20,563,803.29 | 20,563,803.29 | |
Long-term prepaid expense | 153,031,253.79 | 153,031,253.79 |
Deferred income tax assets | 99,307,233.72 | 99,307,233.72 | |
Other non-current assets | 18,841,918.62 | 18,841,918.62 | |
Total non-current assets | 7,654,883,684.83 | 7,654,883,684.83 | |
Total assets | 11,885,431,553.08 | 11,885,431,553.08 | |
Current liabilities: | |||
Short-term borrowings | 2,120,154,330.61 | 2,120,154,330.61 | |
Borrowings from the central bank | |||
Interbank loans obtained | |||
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | 85,219,724.63 | 85,219,724.63 | |
Accounts payable | 305,346,284.94 | 305,346,284.94 | |
Advances from customers | 108,783,148.03 | -108,783,148.03 | |
Contract liabilities | 108,783,148.03 | 108,783,148.03 | |
Financial assets sold under repurchase agreements | |||
Customer deposits and interbank deposits | |||
Payables for acting trading of securities | |||
Payables for underwriting of securities | |||
Employee benefits payable | 335,576,560.36 | 335,576,560.36 | |
Taxes payable | 25,051,630.06 | 25,051,630.06 | |
Other payables | 104,982,189.40 | 104,982,189.40 | |
Including: Interest payable | |||
Dividends payable | 441,113.64 | 441,113.64 | |
Handling charges and commissions payable | |||
Reinsurance payables | |||
Liabilities directly associated with assets held for sale | |||
Current portion of non-current liabilities | 101,111,297.49 | 101,111,297.49 | |
Other current liabilities | |||
Total current liabilities | 3,186,225,165.52 | 3,186,225,165.52 | |
Non-current liabilities: | |||
Insurance contract reserve | |||
Long-term borrowings | 42,364,019.74 | 42,364,019.74 | |
Bonds payable |
Including: Preferred shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | |||
Long-term employee benefits payable | 105,589,249.56 | 105,589,249.56 | |
Provisions | |||
Deferred income | 157,668,211.41 | 157,668,211.41 | |
Deferred income tax liabilities | 92,440,358.41 | 92,440,358.41 | |
Other non-current liabilities | 1,840,000.00 | 1,840,000.00 | |
Total non-current liabilities | 399,901,839.12 | 399,901,839.12 | |
Total liabilities | 3,586,127,004.64 | 3,586,127,004.64 | |
Owners’ equity: | |||
Share capital | 858,121,541.00 | 858,121,541.00 | |
Other equity instruments | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Capital reserves | 258,046,245.42 | 258,046,245.42 | |
Less: Treasury stock | |||
Other comprehensive income | 91,626,571.75 | 91,626,571.75 | |
Specific reserve | |||
Surplus reserves | 1,117,267,351.63 | 1,117,267,351.63 | |
General reserve | |||
Retained earnings | 5,372,073,615.12 | 5,372,073,615.12 | |
Total equity attributable to owners of the Company as the parent | 7,697,135,324.92 | 7,697,135,324.92 | |
Non-controlling interests | 602,169,223.52 | 602,169,223.52 | |
Total owners’ equity | 8,299,304,548.44 | 8,299,304,548.44 | |
Total liabilities and owners’ equity | 11,885,431,553.08 | 11,885,431,553.08 |
Note for adjustmentBalance Sheet of the Company as the Parent
Unit: RMB
Item | 31 December 2019 | 1 January 2020 | Adjusted |
Current assets: | |||
Monetary assets | 259,320,863.08 | 259,320,863.08 | |
Held-for-trading financial assets | 52,356,098.85 | 52,356,098.85 |
Derivative financial assets | |||
Notes receivable | 67,898,885.35 | 67,898,885.35 | |
Accounts receivable | 417,599,518.08 | 417,599,518.08 | |
Accounts receivable financing | 2,675,090.00 | 2,675,090.00 | |
Prepayments | 10,178,452.88 | 10,178,452.88 | |
Other receivables | 838,523,449.52 | 838,523,449.52 | |
Including: Interest receivable | |||
Dividends receivable | |||
Inventories | 1,280,620,296.02 | 1,280,620,296.02 | |
Contract assets | |||
Assets held for sale | |||
Current portion of non-current assets | |||
Other current assets | 5,780,635.28 | 5,780,635.28 | |
Total current assets | 2,934,953,289.06 | 2,934,953,289.06 | |
Non-current assets: | |||
Investments in debt obligations | |||
Investments in other debt obligations | |||
Long-term receivables | |||
Long-term equity investments | 2,510,868,604.84 | 2,510,868,604.84 | |
Investments in other equity instruments | |||
Other non-current financial assets | 266,149,500.00 | 266,149,500.00 | |
Investment property | 31,089,260.38 | 31,089,260.38 | |
Fixed assets | 2,603,258,003.94 | 2,603,258,003.94 | |
Construction in progress | 53,443,768.04 | 53,443,768.04 | |
Productive living assets | 235,277,114.25 | ||
Oil and gas assets | |||
Right-of-use assets | |||
Intangible assets | 235,277,114.25 | ||
Development costs | |||
Goodwill | |||
Long-term prepaid expense | |||
Deferred income tax assets | 60,974,304.57 | 60,974,304.57 | |
Other non-current assets | |||
Total non-current assets | 5,761,060,556.02 | 5,761,060,556.02 |
Total assets | 8,696,013,845.08 | 8,696,013,845.08 | |
Current liabilities: | |||
Short-term borrowings | 816,301,973.60 | 816,301,973.60 | |
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | 602,741,973.76 | 602,741,973.76 | |
Accounts payable | 105,588,631.54 | 105,588,631.54 | |
Advances from customers | 53,418,950.04 | -53,418,950.04 | |
Contract liabilities | 53,418,950.04 | 53,418,950.04 | |
Employee benefits payable | 242,300,723.41 | 242,300,723.41 | |
Taxes payable | 11,995,830.49 | 11,995,830.49 | |
Other payables | 149,255,207.79 | 149,255,207.79 | |
Including: Interest payable | |||
Dividends payable | 441,113.64 | 441,113.64 | |
Liabilities directly associated with assets held for sale | |||
Current portion of non-current liabilities | |||
Other current liabilities | |||
Total current liabilities | 1,981,603,290.63 | 1,981,603,290.63 | |
Non-current liabilities: | |||
Long-term borrowings | |||
Bonds payable | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Lease liabilities | |||
Long-term payables | |||
Long-term employee benefits payable | 105,589,249.56 | 105,589,249.56 | |
Provisions | |||
Deferred income | 112,187,678.66 | 112,187,678.66 | |
Deferred income tax liabilities | 70,445,859.76 | 70,445,859.76 | |
Other non-current liabilities | |||
Total non-current liabilities | 288,222,787.98 | 288,222,787.98 | |
Total liabilities | 2,269,826,078.61 | 2,269,826,078.61 | |
Owners’ equity: | |||
Share capital | 858,121,541.00 | 858,121,541.00 |
Other equity instruments | |||
Including: Preferred shares | |||
Perpetual bonds | |||
Capital reserves | 317,206,232.47 | 317,206,232.47 | |
Less: Treasury stock | |||
Other comprehensive income | |||
Specific reserve | |||
Surplus reserves | 1,114,158,611.99 | 1,114,158,611.99 | |
Retained earnings | 4,136,701,381.01 | 4,136,701,381.01 | |
Total owners’ equity | 6,426,187,766.47 | 6,426,187,766.47 | |
Total liabilities and owners’ equity | 8,696,013,845.08 | 8,696,013,845.08 |
Note for adjustmentNone
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any NewStandards Governing Revenue or Leases since 2020
√ Applicable □ Not applicable
28. Other
VI Taxation
1. Main Taxes and Tax Rate
Category of taxes | Tax basis | Tax rate |
VAT | Taxable income | 13%, 10%, 9%, 6%, 5%, 3%, 0 |
Urban maintenance and construction tax | Turnover tax payable | 7%, 5%, 1% |
Enterprise income tax | Income tax payable | 0, 15%, 16.5%, 20%, 25% |
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Taxpayer | Income tax rate |
The Company | 15% |
Lufeng Weaving & Dyeing | 15% |
Lu Thai Hong Kong | 16.50% |
Xinjiang Lu Thai | 25% |
Luqun Textile | 25% |
Xinsheng Power | 25% |
Shanghai Lu Thai | 20% |
Beijing Youxian | 20% |
Shanghai Zhinuo | 20% |
Xinjiang Textile | 15% |
Lulian New Materials | 25% |
Lujia Import & Export | 20% |
Lu Thai Cambodia | 20% |
Lu Thai Burma | 0% |
Lu Thai Vietnam | 0% |
Lu Thai Tan Chau | 0% |
Lu An Garments | 0% |
Lu Thai America | Refer to 2. Tax Preference presented as follows for details |
2. Tax Preference
According to the Notice on the Recognition of 2078 Enterprises as High-tech Enterprises for 2017 such as Weihai Tuozhan FiberCo., Ltd. (LK Zi [2018] No. 37) issued by the Department of Science and Technology of Shandong Province, Shandong ProvincialFinance Department, State Administration of Taxation of Shandong Province and Local Taxation Bureau of Shandong Province, theCompany and the holding subsidiary Lufeng Weaving & Dyeing were identified as high-tech enterprises. Pursuant to Article 28 ofthe Law of the PRC on Enterprise Income Tax and the No. 23 Announcement revised and published by the State Administration ofTaxation in 2018, namely Management of Preferential Policy on Corporate Income Tax, the Measures for the Administration of theRecognition of High and New Technological Enterprises (GKFH [2016] No. 195) and Announcement on Implementing thePreferential Policies regarding Enterprise Income Tax for High-Tech Enterprises (GJSWZJY2017No.24) revised and published bythe Ministry of Science and Technology, Ministry of Finance and State Administration of Taxation, the Company and the holdingsubsidiary Lufeng Weaving & Dyeing enjoy a corporate income tax rate of 15%.According to the Announcement on Implementing the Universal Income Tax Reduction and Exemption Policy Published the StateAdministration of Taxation (SAT) (SAT Announcement No.2 of 2019), from 1 January 2019 to 31 December 2021, the portion ofannual taxable income of within RMB1 million of the wholly-owned subsidiaries of the Company Shanghai Lu Thai, BeijingYouxian, Shanghai Zhinuo and Lujia Import & Export (the small-scale and low-profit enterprise) shall be included in taxable incomeby reduction of 25% based on the enterprise income tax rate of 20%; for the portion exceeding RMB1 million but within RMB3million, it shall be included in taxable income by reduction of 50% based on the enterprise income tax rate of 20%.According to the Notice of the Ministry of Finance, the General Administration of Customs and the State Administration of Taxationon Tax Policy Issues concerning Further Implementing the Western China Development Strategy (CS[2011] No. 58), XinjiangTextile Co., Ltd., the subsidiary of Lu Thai in Xinjiang, enjoys a preferential corporate income tax rate of 15%.Lu Thai (Hong Kong) Textile Co., Ltd. (hereinafter refers as Lu Thai (Hong Kong) Textile), the wholly-owned subsidiary companyof the Company, was incorporated in Hong Kong SAR, whose profit tax shall be paid at tax rate of 16.5%.The wholly own subsidiary Lu Thai Cambodia, according to the Lu Thai Cambodia Profits tax free approval issued by InvestmentCommittee of Cambodia, the preferential term expired, enjoys the enterprise income tax rate of 20%.The wholly own subsidiary Lu Thai Burma, according to the Burma’s Special Economic Zone Law issued by Pyidaungsu Hluttaw,Lu Thai Burma enjoys tax preference on corporate income tax of 7 (7 years tax holiday) + 5 (5 years tax revenues drop by half) + 5(re-invest the profits within 1 year and continues to enjoy the half tax revenues 5 years afterwards). After grace period, enterprise
income tax rate was of 25%. Year 2020 is the fifth year of tax holiday.The wholly-owned subsidiary Lu Thai (Vietnam) Textile Co., Ltd. shall enjoy the preference of enterprise income tax at 3 years’starting term + 4 years’ duty-free term + 9 years’ half-tax term according to the investment license issued by Vietnamese Tay NinhIndustrial Zone Management Committee, and it will enter into 2 years’ duty-free term if it is profitable within 3 years’ starting term.The Company shall enjoy 10% of the preference tax rate within 15 years since the tax year to get the first production and operationincome, and the enterprise income tax rate shall be 20% after the preference term ends. Year 2020 is the third year of the duty-freeterm.The wholly-owned subsidiary of Lu Thai Vienam, Lu Thai Tan Chau, shall enjoy the preference of enterprise income tax at 3 years’starting term + 4 years’ duty-free term + 9 years’ half-tax term according to the investment license issued by Vietnamese Tay NinhInvestment Planning Office, and it will enter into 2 years’ duty-free term if it is profitable within 3 years’ starting term. TheCompany shall enjoy 10% of the preference tax rate within 15 years since the tax year to get the first production and operationincome, and the enterprise income tax rate shall be 20% after the preference term ends. Year 2020 is the second year of the startingterm.The wholly-owned subsidiary Lu An Garments Co., Ltd. shall enjoy the preference of enterprise income tax at 3 years’ starting term+ 2 years’ duty-free term + 4 years’ half-tax term according to the investment license issued by Vietnamese Anjiang ProvinceEconomic Zone Management Committee, and it will enter into duty-free term if the profitability is realized at any year within 3years’ starting term. The Company shall enjoy 17% of the preference tax rate within 10 years since the tax year to get the firstproduction and operation income, and the enterprise income tax rate shall be 20% after the preference term ends. Year 2020 is thesecond year of the duty-free term.Lu Thai America, the wholly-owned subsidiary of the Company registered in New York, America, was imposed the federalenterprise income tax at progressive tax rate in excess of specific amount of 15%-39%, and imposed the New York Enterpriseincome tax at the rate of 6.5%. The income tax rate shall be 6.5% when the sales income in New York was below US$10 million,while 8.85% when above US$10 million. The 6.5% of income tax rate was applied in 2020.
3. Others
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Cash on hand | 9,094,993.18 | 9,544,377.41 |
Bank deposits | 2,014,615,919.85 | 870,590,467.70 |
Other monetary funds | 4,586,637.12 | 44,187,163.06 |
Total | 2,028,297,550.15 | 924,322,008.17 |
Of which: total amount deposited overseas | 394,517,114.44 | 299,088,689.18 |
Total amount of restriction in use by guaranteed, pledged or frozen | 4,586,637.12 | 44,187,163.06 |
Other notes:
(1) On 30 June 2020, the monetary assets with restricted ownership of the Company was of RMB4.5866 million, which was L/Cguarantee deposit of RMB1.9433 million for the Company’s subsidiary Lu Thai Vietnam; L/C guarantee deposit of RMB1.423
million for the Company’s subsidiary Lu Thai Tan Chau; L/C guarantee deposit of RMB0.925 million for the Company’s subsidiaryLulian New Materials; and L/C guarantee deposit of RMB0.2953 for the Company’s subsidiary Xinjiang Lu Thai.
(2) The interest receivable in bank deposits was RMB5,062,269.54.
2. Trading Financial Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Financial assets at fair value through profit or loss | 52,356,098.85 | |
Of which: | ||
Debt instrument investment | 52,356,098.85 | |
Of which: | ||
Total | 52,356,098.85 |
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item | Ending balance | Beginning balance |
Bank acceptance bill | 15,386,031.86 | 13,622,998.20 |
L/C | 56,744,964.31 | 91,114,951.71 |
Total | 72,130,996.17 | 104,737,949.91 |
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general modeof expected credit loss to withdraw bad debt provision of notes receivable.
□ Applicable √ Not applicable
(2) Notes Receivable which Had Endorsed by the Company or Had Discounted and Had not Due on theBalance Sheet Date at the Period-end
Unit: RMB
Item | Amount of recognition termination at the period-end | Amount of not terminated recognition at the period-end |
Bank acceptance bill | 158,108,463.95 | |
Total | 158,108,463.95 |
4. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Category | Ending balance | Beginning balance | ||||||||
Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
Of which: | ||||||||||
Accounts receivable withdrawal of bad debt provision of by group | 424,558,081.29 | 100.00% | 33,640,125.47 | 7.92% | 390,917,955.82 | 546,428,127.56 | 100.00% | 31,121,527.94 | 5.70% | 515,306,599.62 |
Of which: | ||||||||||
Group 1: Undue accounts (credit insurance insured) | 120,187,113.74 | 28.31% | 1,261,964.64 | 1.05% | 118,925,149.10 | 146,231,602.81 | 26.76% | 1,535,431.83 | 1.05% | 144,696,170.98 |
Group 2: Undue accounts(no credit insurance) | 114,352,857.84 | 26.94% | 5,717,642.90 | 5.00% | 108,635,214.94 | 298,971,131.80 | 54.72% | 14,948,556.59 | 5.00% | 284,022,575.21 |
Group 3: Overdue accounts (credit insurance insured) | 116,685,694.57 | 27.48% | 12,485,369.25 | 10.70% | 104,200,325.32 | 59,793,875.78 | 10.94% | 6,397,944.71 | 10.70% | 53,395,931.07 |
Group 4: Overdue accounts (no credit insurance) | 73,332,415.14 | 17.27% | 14,175,148.68 | 19.33% | 59,157,266.46 | 41,431,517.17 | 7.58% | 8,239,594.81 | 19.89% | 33,191,922.36 |
Total | 424,558,081.29 | 100.00% | 33,640,125.47 | 7.92% | 390,917,955.82 | 546,428,127.56 | 100.00% | 31,121,527.94 | 5.70% | 515,306,599.62 |
Bad debt provision separately accrued:
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general modeof expected credit loss to withdraw bad debt provision of accounts receivable.
√ Applicable □ Not applicable
Disclosure by aging
Unit: RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 415,233,048.36 |
1 to 2 years | 8,698,826.62 |
2 to 3 years | 287,070.75 |
Over 3 years | 339,135.56 |
3 to 4 years | 339,135.56 |
Total | 424,558,081.29 |
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
Withdrawal | Reversal or recovery | Verified | Other | |||
Bad debt provision of accounts receivable | 31,121,527.94 | 2,518,597.53 | 33,640,125.47 | |||
Total | 31,121,527.94 | 2,518,597.53 | 33,640,125.47 |
(3) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Name of entity | Ending balance | Proportion to total ending balance of accounts receivable | Ending balance of bad debt provision |
A | 38,710,993.71 | 9.12% | 5,036,493.37 |
B | 35,475,317.09 | 8.36% | 2,714,450.81 |
C | 20,855,871.57 | 4.91% | 229,475.50 |
D | 16,934,300.99 | 3.99% | 846,715.05 |
E | 16,612,273.70 | 3.91% | 1,913,619.05 |
Total | 128,588,757.06 | 30.29% |
5. Accounts Receivable Financing
Unit: RMB
Item | Ending balance | Beginning balance |
Notes receivable | 14,807,543.11 | 26,963,818.87 |
Total | 14,807,543.11 | 26,963,818.87 |
The changes of accounts receivable financing in the Reporting Period and the changes in fair value
□ Applicable √ Not applicable
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of accounts receivable financing.
□ Applicable √ Not applicable
Other notes:
There was no bank acceptance bill for which bad debt provision accrued separately in the Company. On 30 June 2020, the Companybelieved that there was no significant credit risk in the bank acceptance bill held by the Company, and no significant loss caused bybank defaults.
6. Prepayment
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Aging | Ending balance | Beginning balance | ||
Amount | Proportion | Amount | Proportion | |
Within 1 year | 59,302,005.11 | 97.04% | 53,283,453.85 | 93.76% |
1 to 2 years | 350,207.34 | 0.57% | 3,529,989.66 | 6.21% |
2 to 3 years | 1,445,049.21 | 2.36% | 0.00% | |
Over 3 years | 15,544.08 | 0.03% | 15,544.08 | 0.03% |
Total | 61,112,805.74 | -- | 56,828,987.59 | -- |
(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment TargetThe total top 5 prepayment in ending balance collected according to the prepayment target for the Company was RMB34,867,312.99,accounting for 57.05% of total ending balance of prepayment.
7. Other Accounts Receivable
Unit: RMB
Item | Ending balance | Beginning balance |
Other accounts receivable | 34,453,389.96 | 59,743,471.84 |
Total | 34,453,389.96 | 59,743,471.84 |
(1) Other Accounts Receivable
1) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature | Ending carrying amount | Beginning carrying amount |
Export taxes refund | 114,937.20 | 10,107,773.06 |
VAT to be returned | 7,166,722.20 | 28,015,795.39 |
Advance payment | 14,980,474.50 | 12,156,529.38 |
Cash Pledge & Margin | 9,875,778.47 | 6,749,222.66 |
Borrowings and petty cash | 2,720,501.23 | 6,971,063.51 |
Other | 4,494,114.55 | 1,210,146.25 |
Total | 39,352,528.15 | 65,210,530.25 |
2) Withdrawal of Bad Debt Provision
Unit: RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
Balance of 1 January 2020 | 3,043,394.21 | 1,831,226.97 | 592,437.23 | 5,467,058.41 |
Balance of 1 January 2020 in the Current Period | —— | —— | —— | —— |
Withdrawal of the Current Period | -1,206,855.30 | 638,935.08 | 0.00 | -567,920.22 |
Balance of 30 June 2020 | 1,836,538.91 | 2,470,162.05 | 592,437.23 | 4,899,138.19 |
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 29,361,581.37 |
1 to 2 years | 2,873,988.95 |
2 to 3 years | 2,288,889.85 |
Over 3 years | 4,828,067.98 |
3 to 4 years | 317,386.98 |
4 to 5 years | 325,486.20 |
Over 5 years | 4,185,194.80 |
Total | 39,352,528.15 |
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of bad debt provision withdrawn:
Unit: RMB
Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
Withdrawal | Reversal or recovery | Verified | Other | |||
Bad debt provision of other receivables | 5,467,058.41 | -567,920.22 | 4,899,138.19 | |||
Total | 5,467,058.41 | -567,920.22 | 4,899,138.19 |
4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Name of the entity | Nature | Ending balance | Aging | Proportion to total ending balance of other accounts receivable | Ending balance of bad debt provision |
VAT receivable to be returned | Input VAT | 7,166,722.20 | Within 1 year | 18.21% | 358,336.11 |
Xining Electric Power Company | Intercourse borrowing | 3,537,824.38 | Within 1 year | 8.99% | 176,891.22 |
Zibo Customs, P.R.China | Security deposit for imported equipment | 3,481,705.53 | Within 1 year | 8.85% | 174,085.28 |
Advance electric charge of branches | Payment of electric charge on behalf | 2,336,299.11 | Within 1 year | 5.93% | 116,814.96 |
Migrant workers’ wage margin in Zichuan District of Zibo | Migrant workers’ wage margin of infrastructural project | 2,242,126.50 | Within 1 year, over 3 years | 5.70% | 112,106.33 |
Total | -- | 18,764,677.72 | -- | 47.68% | 938,233.90 |
8. Inventory
Whether the Company needs to comply with the disclosure requirements for real estate industryNo
(1) Category of Inventory
Unit: RMB
Item | Ending balance | Beginning balance | ||||
Carrying amount | Depreciation reserves of | Carrying value | Carrying amount | Depreciation reserves of | Carrying value |
inventories or impairment provision for contract performance costs | inventories or impairment provision for contract performance costs | |||||
Raw materials | 1,146,718,983.35 | 1,146,718,983.35 | 1,022,913,125.05 | 1,022,913,125.05 | ||
Goods in process | 460,496,199.39 | 460,496,199.39 | 583,495,292.95 | 583,495,292.95 | ||
Inventory goods | 1,073,612,442.52 | 97,641,596.89 | 975,970,845.63 | 888,016,891.18 | 102,276,414.38 | 785,740,476.80 |
Consumptive living assets | 1,472,972.75 | 576,304.29 | 896,668.46 | 1,472,972.75 | 576,304.29 | 896,668.46 |
Assigned processing products | 11,053,172.84 | 11,053,172.84 | 28,454,696.04 | 28,454,696.04 | ||
Total | 2,693,353,770.85 | 98,217,901.18 | 2,595,135,869.67 | 2,524,352,977.97 | 102,852,718.67 | 2,421,500,259.30 |
(2) Falling Price Reserves of Inventory and Impairment Provision for Contract Performance Costs
Unit: RMB
Item | Beginning balance | Increased amount | Decreased amount | Ending balance | |||||
Withdrawal | Other | Reversal or write-off | Other | ||||||
Inventory goods | 102,276,414.38 | 24,613,079.38 | 29,247,896.87 | 97,641,596.89 | |||||
Consumptive living assets | 576,304.29 | 576,304.29 | |||||||
Total | 102,852,718.67 | 24,613,079.38 | 29,247,896.87 | 98,217,901.18 | |||||
Item | Specific basis of withdrawal of inventory falling price reserves | Reasons for write-off or write-back | |||||||
Inventory goods | The lower one between cost of each item of inventory and its realizable net value | Sales | |||||||
Consumptive living assets | The lower one between cost of each item of inventory and its realizable net value |
(3) Ending Balance of Inventories Including Capitalized Borrowing Expense
(4) Amount of Contract Performance Costs Amortized in the Reporting Period
9. Other Current Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Prepaid income tax | 18,272,897.64 | 18,801,867.00 |
Input VAT | 61,216,399.92 | 49,986,686.74 |
Prepaid other taxes | 120.36 | |
Total | 79,489,297.56 | 68,788,674.10 |
10. Long-term Receivables
(1) List of Long-term Receivables
Unit: RMB
Item | Ending balance | Beginning balance | Interval of discount rate | ||||
Carrying amount | Bad debt provision | Carrying value | Carrying amount | Carrying value | Carrying amount | ||
Financing lease accounts | 250,000.00 | 250,000.00 | 250,000.00 | 250,000.00 | |||
Of which: unrealized financing income | 26,400.76 | 26,400.76 | |||||
Long-term advances receivable | 7,190,191.62 | 359,509.58 | 6,830,682.04 | 7,564,704.12 | 756,470.41 | 6,808,233.71 | |
Total | 7,440,191.62 | 359,509.58 | 7,080,682.04 | 7,814,704.12 | 756,470.41 | 7,058,233.71 | -- |
Impairment of bad debt provision
Unit: RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
Balance of 1 January 2020 | 756,470.41 | 756,470.41 | ||
Balance of 1 January 2020 in the Current Period | —— | —— | —— | —— |
Withdrawal of the Current Period | -396,960.83 | -396,960.83 |
Balance of 30 June 2020 | 359,509.58 | 359,509.58 |
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
11. Long-term Equity Investment
Unit: RMB
Investees | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserves | |||||||
Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of depreciation reserves | Other | ||||
I. Joint ventures | |||||||||||
II. Associated enterprises | |||||||||||
Ningbo Mei shan Bonded Port Area Haohong Equity Investment Partnership (L.P) (hereinafter referred to as “Haohong Investment”) | 103,226,300.00 | -3,709,556.61 | 99,516,743.39 | ||||||||
Ningbo Haoying Equity Investment Partnership (L.P) (hereinafter referred to as “Haoying Investment”) | 50,000,000.00 | 130,033.26 | 50,130,033.26 | ||||||||
Subtotal | 103,226,300.00 | 50,000,000.00 | -3,579,523.35 | 149,646,776.65 | |||||||
Total | 103,226,300.00 | 50,000,000.00 | -3,579,523.35 | 149,646,776.65 |
Other notes
12. Other Non-current Financial Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Equity instrument investment | 126,519,880.41 | 266,149,500.00 |
Financial assets assigned measured by fair value and the changes be included in the current gains and losses | 12,000,000.00 | 12,000,000.00 |
Total | 138,519,880.41 | 278,149,500.00 |
13. Investment Property
(1) Investment Property Adopted the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item | Houses and buildings | Land use right | Construction in progress | Total |
I. Original carrying value | ||||
1. Beginning balance | 60,832,966.04 | 60,832,966.04 | ||
2. Increased amount of the period | ||||
(1) Outsourcing | ||||
(2)Transfer from inventory/fixed assets/construction in progress | ||||
(3) Enterprise combination increase | ||||
3. Decreased amount of the period | ||||
(1) Disposal | ||||
(2) Other transfer | ||||
4. Ending balance | 60,832,966.04 | 60,832,966.04 | ||
II. Accumulative depreciation and accumulative amortization | ||||
1. Beginning balance | 14,936,218.17 | 14,936,218.17 | ||
2. Increased amount of the period | 1,008,056.17 | 1,008,056.17 | ||
(1) Withdrawal or amortization | 1,008,056.17 | 1,008,056.17 | ||
3. Decreased amount of the period | ||||
(1) Disposal | ||||
(2) Other transfer | ||||
4. Ending balance | 15,944,274.34 | 15,944,274.34 |
III. Depreciation reserves | ||||
1. Beginning balance | ||||
2. Increased amount of the period | ||||
(1) Withdrawal | ||||
3. Decreased amount of the period | ||||
(1) Disposal | ||||
(2) Other transfer | ||||
4. Ending balance | ||||
IV. Carrying value | ||||
1. Ending carrying value | 44,888,691.70 | 44,888,691.70 | ||
2. Beginning carrying value | 45,896,747.87 | 45,896,747.87 |
14. Fixed Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Fixed assets | 5,911,198,566.20 | 6,012,094,104.67 |
Total | 5,911,198,566.20 | 6,012,094,104.67 |
(1) List of Fixed Assets
Unit: RMB
Item | Houses and buildings | Machinery equipment | Transportation equipment | Electronic equipment and others | Total |
I. Original carrying value | |||||
1. Beginning balance | 3,566,066,620.95 | 6,950,430,267.50 | 66,490,962.47 | 145,125,211.07 | 10,728,113,061.99 |
2. Increased amount of the period | 35,719,541.15 | 106,836,999.02 | 3,863,521.81 | 5,472,067.02 | 151,892,129.00 |
(1) Purchase | 42,562.00 | 88,696,317.74 | 3,775,948.23 | 4,957,581.06 | 97,472,409.03 |
(2) Transfer from construction in progress | 23,911,624.53 | 3,101,939.48 | 0.00 | 426,254.98 | 27,439,818.99 |
(3) Enterprise combination increase | |||||
(4) Other increase | 11,765,354.62 | 15,038,741.80 | 87,573.58 | 88,230.98 | 26,979,900.98 |
3. Decreased amount of the period | 2,077.90 | 28,221,896.60 | 4,412,343.76 | 992,867.74 | 33,629,186.00 |
(1) Disposal or scrap | 2,077.90 | 28,221,896.60 | 4,412,343.76 | 992,867.74 | 33,629,186.00 |
4. Ending balance | 3,601,784,084.20 | 7,029,045,369.92 | 65,942,140.52 | 149,604,410.35 | 10,846,376,004.99 |
II. Accumulative depreciation | |||||
1. Beginning balance | 1,055,126,921.87 | 3,453,435,496.65 | 45,436,360.53 | 101,913,448.80 | 4,655,912,227.85 |
2. Increased amount of the period | 59,321,095.33 | 173,849,716.41 | 3,002,788.38 | 8,061,719.89 | 244,235,320.01 |
(1) Withdrawal | 58,483,036.20 | 171,636,818.56 | 2,953,992.96 | 8,003,021.75 | 241,076,869.47 |
(2) Other increase | 838,059.13 | 2,212,897.85 | 48,795.42 | 58,698.14 | 3,158,450.54 |
3. Decreased amount of the period | 2,077.90 | 16,152,983.00 | 3,994,696.23 | 945,019.89 | 21,094,777.02 |
(1) Disposal or scrap | 2,077.90 | 16,152,983.00 | 3,994,696.23 | 945,019.89 | 21,094,777.02 |
4. Ending balance | 1,114,445,939.30 | 3,611,132,230.06 | 44,444,452.68 | 109,030,148.80 | 4,879,052,770.84 |
III. Depreciation reserves | |||||
1. Beginning balance | 5,090,742.73 | 54,860,025.36 | 26,383.69 | 129,577.69 | 60,106,729.47 |
2. Increased amount of the period | |||||
(1) Withdrawal | |||||
3. Decreased amount of the period | 3,940,581.21 | 41,480.31 | 3,982,061.52 | ||
(1) Disposal or scrap | 3,940,581.21 | 41,480.31 | 3,982,061.52 | ||
4. Ending balance | 5,090,742.73 | 50,919,444.15 | 26,383.69 | 88,097.38 | 56,124,667.95 |
IV. Carrying value | |||||
1. Ending carrying value | 2,482,247,402.17 | 3,366,993,695.71 | 21,471,304.15 | 40,486,164.17 | 5,911,198,566.20 |
2. Beginning carrying value | 2,505,848,956.35 | 3,442,134,745.49 | 21,028,218.25 | 43,082,184.58 | 6,012,094,104.67 |
(2) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item | Ending carrying value |
Houses and buildings | 2,885,865.83 |
(3) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item | Carrying value | Reason |
Lufeng weaving dye gray yarn | 11,529,607.08 | Under the relevant certificate procedures of acceptance, measurement, |
warehouse | examination by the real estate trading center and other departments |
Other notes
15. Construction in Progress
Unit: RMB
Item | Ending balance | Beginning balance |
Construction in progress | 248,852,110.85 | 165,841,680.32 |
Engineering materials | 294,911,819.62 | 234,393,389.69 |
Total | 543,763,930.47 | 400,235,070.01 |
(1) Construction in Progress
Unit: RMB
Item | Ending balance | Beginning balance | ||||
Carrying amount | Depreciation reserves | Carrying value | Carrying amount | Depreciation reserves | Carrying value | |
Reform project of Xinsheng Thermal Power | 3,493,638.27 | 3,493,638.27 | 2,837,138.88 | 2,837,138.88 | ||
Expansion project of Xinsheng Thermal Power (Phase II) | 24,870,169.90 | 24,870,169.90 | 22,186,638.85 | 22,186,638.85 | ||
Dormitory project of Lu Thai (Vietnam) | 11,266,561.67 | 11,266,561.67 | 7,701,372.43 | 7,701,372.43 | ||
Spinning project of Lu Thai Tan Chau | 57,596,392.37 | 57,596,392.37 | 52,700,509.90 | 52,700,509.90 | ||
Functional Fabric Intelligent Ecological Park Project Phase I | 128,024,572.68 | 128,024,572.68 | 56,365,451.33 | 56,365,451.33 | ||
Other retails projects | 23,600,775.96 | 23,600,775.96 | 24,050,568.93 | 24,050,568.93 | ||
Total | 248,852,110.85 | 248,852,110.85 | 165,841,680.32 | 165,841,680.32 |
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Item | Budget | Beginning balance | Increased amount | Transferred in fixed assets | Other decreased amount | Ending balance | Proportion of accumulated investment in construc | Job schedule | Accumulated amount of interest capitalization | Of which: amount of capitalized interests for the Reporting Period | Capitalization rate of interests for the Reporting Period | Capital resources |
tions to budget | ||||||||||||
Reform project of Xinsheng Thermal Power | 26,000,000.00 | 2,837,138.88 | 3,429,063.26 | 2,772,563.87 | 0.00 | 3,493,638.27 | 24.00% | 24% | Other | |||
Expansion project of Xinsheng Thermal Power (Phase II) | 110,690,000.00 | 22,186,638.85 | 3,193,015.69 | 509,484.64 | 0.00 | 24,870,169.90 | 111.00% | 99% | Other | |||
Dormitory project of Lu Thai (Vietnam) | 21,626,200.00 | 7,701,372.43 | 3,451,151.26 | 0.00 | -114,037.98 | 11,266,561.67 | 52.00% | 52% | Other | |||
Spinning project of Lu Thai Tan Chau | 153,470,000.00 | 52,700,509.90 | 11,029,873.82 | 6,914,353.53 | -780,362.18 | 57,596,392.37 | 90.00% | 90% | Other | |||
Functional Fabric Intelligent Ecological Park Project Phase I | 217,211,000.00 | 56,365,451.33 | 71,659,121.35 | 0.00 | 0.00 | 128,024,572.68 | 59.00% | 59% | 5,092,555.05 | 5,092,555.05 | 3.68% | Raised through equity offering |
Other retails projects | 24,050,568.93 | 16,787,974.40 | 17,243,416.95 | -5,649.58 | 23,600,775.96 | |||||||
Total | 528,997,200.00 | 165,841,680.32 | 109,550,199.78 | 27,439,818.99 | -900,049.74 | 248,852,110.85 | -- | -- | 5,092,555.05 | 5,092,555.05 | 3.68% | -- |
(3) Engineering Materials
Unit: RMB
Item | Ending balance | Beginning balance | ||||
Carrying amount | Depreciation | Carrying value | Carrying | Depreciation | Carrying value |
reserves | amount | reserves | ||||
Special equipment | 294,911,819.62 | 294,911,819.62 | 234,393,389.69 | 0.00 | 234,393,389.69 | |
Total | 294,911,819.62 | 294,911,819.62 | 234,393,389.69 | 0.00 | 234,393,389.69 |
16. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item | Land use right | Patent right | Non-patent technologies | Software use rights | Brand use rights | Total |
I. Original carrying value | ||||||
1. Beginning balance | 633,234,119.27 | 1,985,176.47 | 5,960,347.27 | 300,000.00 | 641,479,643.01 | |
2. Increased amount of the period | 644,070.79 | 644,070.79 | ||||
(1) Purchase | 644,070.79 | 644,070.79 | ||||
(2) Internal R&D | ||||||
(3) Business combination increase | ||||||
3. Decreased amount of the period | 25,057.34 | 950,371.07 | 975,428.41 | |||
(1) Disposal | ||||||
(2) Invalid and recognition terminated portion | 25,057.34 | 950,371.07 | 975,428.41 | |||
4. Ending balance | 633,209,061.93 | 1,985,176.47 | 5,654,046.99 | 300,000.00 | 641,148,285.39 | |
II. Accumulated amortization | ||||||
1. Beginning balance | 119,122,908.13 | 1,819,745.40 | 3,907,470.33 | 150,000.00 | 125,000,123.86 | |
2. Increased amount of the period | 7,311,646.62 | 99,258.84 | 1,084,879.93 | 15,000.00 | 8,510,785.39 | |
(1) Withdrawal | 7,311,646.62 | 99,258.84 | 1,084,879.93 | 15,000.00 | 8,510,785.39 | |
3. Decreased amount of the period | 49,369.10 | 952,652.51 | 1,002,021.61 | |||
(1) Disposal | 49,369.10 | 952,652.51 | 1,002,021.61 | |||
4. Ending balance | 126,385,185.65 | 1,919,004.24 | 4,039,697.75 | 165,000.00 | 132,508,887.64 | |
III. Depreciation reserves | ||||||
1. Beginning balance | ||||||
2. Increased amount of the |
period | ||||||
(1) Withdrawal | ||||||
3. Decreased amount of the period | ||||||
(1) Disposal | ||||||
4. Ending balance | ||||||
IV. Carrying value | ||||||
1. Ending carrying value | 506,823,876.28 | 66,172.23 | 1,614,349.24 | 135,000.00 | 508,639,397.75 | |
2. Beginning carrying value | 514,111,211.14 | 165,431.07 | 2,052,876.94 | 150,000.00 | 516,479,519.15 |
The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance ofintangible assets was 0.00%.
17. Development Costs
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance | ||
Internal development costs | Other | Recognized as intangible assets | Transferred into the current profit or loss | |||
R&D of products | 123,441,723.06 | 123,441,723.06 | ||||
Total | 123,441,723.06 | 123,441,723.06 |
18. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Name of the invested units or events generating goodwill | Beginning balance | Increase | Decrease | Ending balance | ||
Formed by business combination | Disposal | |||||
Xinsheng Power | 20,563,803.29 | 20,563,803.29 | ||||
Total | 20,563,803.29 | 20,536,803.29 |
19. Long-term Prepaid Expense
Unit: RMB
Item | Beginning balance | Increased amount | Amortization amount of the | Other decreased amount | Ending balance |
period | |||||
Land contracting fee of Xinjiang Lu Thai | 24,521,204.92 | 543,109.50 | 0.00 | 23,978,095.42 | |
Decoration fee | 486,407.69 | 81,067.98 | 0.00 | 405,339.71 | |
Land rent of overseas subsidiaries | 128,023,641.18 | 1,520,353.98 | -1,895,708.56 | 128,398,995.76 | |
Charge for supporting facilities | 4,587,155.95 | 38,226.30 | 4,548,929.65 | ||
Total | 153,031,253.79 | 4,587,155.95 | 2,182,757.76 | -1,895,708.56 | 157,331,360.54 |
20. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Item | Ending balance | Beginning balance | ||
Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Provision for impairment of assets | 175,881,729.93 | 28,713,937.96 | 180,480,880.04 | 29,370,310.33 |
Internal unrealized profit | 104,223,041.48 | 12,437,892.74 | 123,500,857.32 | 14,085,213.14 |
Deductible losses | 31,584,302.32 | 5,600,742.22 | 31,584,302.32 | 5,600,742.22 |
One-time listed decoration expenses | 3,496,364.02 | 874,091.01 | 3,496,364.02 | 874,091.01 |
Payroll payable | 140,654,344.00 | 21,198,255.31 | 140,654,344.00 | 21,198,255.31 |
Deferred income | 162,647,704.62 | 25,656,165.40 | 157,668,211.41 | 24,986,231.71 |
Changes in fair value of other non-current financial assets | 21,282,600.00 | 3,192,390.00 | 21,282,600.00 | 3,192,390.00 |
Total | 639,770,086.37 | 97,673,474.64 | 658,667,559.11 | 99,307,233.72 |
(2) Deferred Income Tax Liabilities Had not Been Off-set
Unit: RMB
Item | Ending balance | Beginning balance | ||
Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
Depreciation of fixed assets | 350,186,466.49 | 55,734,466.30 | 349,845,317.15 | 55,676,007.33 |
Internal unrealized profit | 8,245,287.26 | 1,236,793.09 | 10,805,075.00 | 1,620,761.25 |
Changes in fair value of trading financial assets | 0.00 | 0.00 | 2,356,098.85 | 353,414.83 |
Changes in fair value of other non-current financial assets | 90,436,047.47 | 13,565,407.12 | 231,934,500.00 | 34,790,175.00 |
Total | 448,867,801.22 | 70,536,666.51 | 594,940,991.00 | 92,440,358.41 |
(3) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item | Ending balance | Beginning balance |
Deductible temporary difference | 15,930,114.89 | 19,823,624.86 |
Deductible losses | 23,975,983.50 | 23,728,086.37 |
Total | 39,906,098.39 | 43,551,711.23 |
(4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years | Ending amount | Beginning amount | Notes |
Y2020 | 13,393,727.33 | 13,393,727.33 | |
Y2021 | 4,250,703.45 | 4,250,703.45 | |
Y2022 | 3,730,297.90 | 3,730,297.90 | |
Y2023 | 0.00 | 0.00 | |
Y2024 | 2,353,357.69 | 2,353,357.69 | |
Y2025 | 247,897.13 | 0.00 | |
Total | 23,975,983.50 | 23,728,086.37 | -- |
21. Other Non-current Assets
Unit: RMB
Item | Ending balance | Beginning balance | ||||
Carrying amount | Impairment provision | Carrying value | Carrying amount | Impairment provision | Carrying value | |
Prepayment for equipment | 7,754,157.78 | 7,754,157.78 | 18,841,918.62 | 18,841,918.62 | ||
Total | 7,754,157.78 | 7,754,157.78 | 18,841,918.62 | 18,841,918.62 |
22. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item | Ending balance | Beginning balance |
Mortgage loan | 200,000,000.00 | 309,422,409.94 |
Guaranteed loan | 615,165,368.62 | 479,189,664.03 |
Credit loan | 1,066,071,893.21 | 1,331,542,256.64 |
Total | 1,881,237,261.83 | 2,120,154,330.61 |
Notes of the category for short-term loans:
(1) As of 30 June 2020, he Company’s subsidiary Xinjiang Lu Thai pledged the inventory with carrying value ofRMB76,161,332.00 and the land use rights with carrying value of RMB97,498,130.83 for bank short-term borrowing ofRMB200,000,000.00.
(2) The guaranteed loan at the period-end was the guarantee provided for the bank loan of the subsidiary Lu Thai (Vietnam)by the Company. Refer to Note XII-2 for details.
(3) The short-term borrowings include interest payable of RMB 7,340,636.27.
23. Trading Financial Liabilities
Unit: RMB
Item | Ending balance | Beginning balance |
Trading financial liabilities | 841,402.78 | |
Of which: | ||
Derivative financial liabilities | 841,402.78 | |
Of which: | ||
Total | 841,402.78 |
24. Notes Payable
Unit: RMB
Item | Ending balance | Beginning balance |
Trade acceptance | 848,873.48 | |
Bank’s acceptance bill | 3,233,148.00 | 84,370,851.15 |
Total | 3,233,148.00 | 85,219,724.63 |
The total overdue but unpaid notes payable at the period-end were RMB0.00.
25. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item | Ending balance | Beginning balance |
Payment for goods | 97,246,497.38 | 159,191,179.02 |
Engineering equipment | 101,306,194.97 | 135,578,852.63 |
Other | 26,230,288.84 | 10,576,253.29 |
Total | 224,782,981.19 | 305,346,284.94 |
26. Contract Liabilities
Unit: RMB
Item | Ending balance | Beginning balance |
Payment for goods | 111,405,604.38 | 108,783,148.03 |
Total | 111,405,604.38 | 108,783,148.03 |
27. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance |
I. Short-term salary | 327,102,126.87 | 809,960,231.98 | 865,693,350.19 | 271,369,008.66 |
II. Post-employment benefit-defined contribution plans | 8,474,433.49 | 49,230,274.99 | 53,812,540.77 | 3,892,167.71 |
Total | 335,576,560.36 | 859,190,506.97 | 919,505,890.96 | 275,261,176.37 |
(2) List of Short-term Salary
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance |
1. Salary, bonus, allowance, subsidy | 267,390,519.63 | 719,066,736.26 | 777,680,537.39 | 208,776,718.50 |
2. Employee welfare | 0.00 | 41,192,308.46 | 41,192,308.46 | 0.00 |
3. Social insurance | 486,333.39 | 31,013,459.50 | 31,264,502.75 | 235,290.14 |
Of which: 1. Medical insurance premiums | 21,917.76 | 28,774,976.64 | 28,779,514.66 | 17,379.74 |
Work-related injury insurance | 464,415.63 | 2,237,981.18 | 2,484,486.41 | 217,910.40 |
Maternity insurance | 0.00 | 501.68 | 501.68 | 0.00 |
4. Housing fund | 0.00 | 8,542,617.20 | 8,542,617.20 | 0.00 |
5. Labor union budget and employee education budget | 59,225,273.85 | 10,145,110.56 | 7,013,384.39 | 62,357,000.02 |
Total | 327,102,126.87 | 809,960,231.98 | 865,693,350.19 | 271,369,008.66 |
(3) List of Defined Contribution Plans
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance |
1. Basic pension benefits | 8,119,137.55 | 46,847,776.72 | 51,237,893.95 | 3,729,020.32 |
2. Unemployment insurance | 355,295.94 | 2,382,498.27 | 2,574,646.82 | 163,147.39 |
Total | 8,474,433.49 | 49,230,274.99 | 53,812,540.77 | 3,892,167.71 |
Other notes:
The Company, in line with the requirement, participate the endowment insurance, unemployment insurance scheme and so on.Except the monthly payment, the Company no longer shoulder the further payment obligation, the relevant expense occurred wasrecorded into current profits and losses or related assets costs.
28. Taxes Payable
Unit: RMB
Item | Ending balance | Beginning balance |
VAT | 4,216,792.63 | 3,285,763.29 |
Corporate income tax | 12,742,870.58 | 4,184,737.55 |
Personal income tax | 4,461,704.23 | 714,935.78 |
Urban maintenance and construction tax | 982,146.45 | 4,805,486.91 |
Stamp tax | 236,011.40 | 423,497.30 |
Property tax | 4,866,325.70 | 4,802,550.30 |
Land use tax | 4,241,519.13 | 2,477,984.56 |
Education surcharge | 434,131.03 | 2,128,521.32 |
Local education surcharge | 289,420.68 | 1,419,014.22 |
Local water conservancy facility construction fund | 70,788.15 | 342,756.22 |
Resource tax | 137,168.00 | 116,530.00 |
Environmental protection tax | 189,815.83 | 349,852.61 |
Tax for foreign contractors | 259,311.11 | |
Total | 33,128,004.92 | 25,051,630.06 |
29. Other Payables
Unit: RMB
Item | Ending balance | Beginning balance |
Dividends payable | 86,253,267.74 | 441,113.64 |
Other payables | 109,079,154.27 | 104,541,075.76 |
Total | 195,332,422.01 | 104,982,189.40 |
(1) Dividends Payable
Unit: RMB
Item | Ending balance | Beginning balance |
Ordinary stock dividends | 85,812,154.10 | |
Dividends payable to individual shareholders | 441,113.64 | 441,113.64 |
Total | 86,253,267.74 | 441,113.64 |
Other notes: including significant dividends payable unpaid for over one year, the unpaid reason shall be disclosed:
Name | Amount | Reason |
Dividends payable to individual shareholders | 441,113.64 | Cash dividend of previous year not received by individual shareholders |
Total | 441,113.64 | -- |
(2) Other Payables
1) Other Payables Listed by Nature of Account
Unit: RMB
Item | Ending balance | Beginning balance |
Deposits and cash deposits etc. | 7,018,209.82 | 19,949,169.11 |
Collecting payment on behalf of others | 23,391,793.62 | 22,312,587.01 |
Intercourse funds | 60,899,499.87 | 51,201,798.22 |
Other | 17,769,650.96 | 11,077,521.42 |
Total | 109,079,154.27 | 104,541,075.76 |
2) Significant Other Accounts Payable Aging over One Year
Unit: RMB
Item | Ending balance | Unpaid/Un-carry-over reason |
Cotton and Linen Company | 11,925,000.00 | Received deposit of sale contract |
Total | 11,925,000.00 | -- |
Other notes
30. Current Portion of Non-current Liabilities
Unit: RMB
Item | Ending balance | Beginning balance |
Current portion of long-term borrowings | 56,636,000.00 | 101,111,297.49 |
Interest of current portion of bonds payable | 955,068.49 | |
Total | 57,591,068.49 | 101,111,297.49 |
31. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
Item | Ending balance | Beginning balance |
Guarantee loan | 70,795,000.00 | 143,475,317.23 |
Less: current portion of long-term borrowings | -56,636,000.00 | -101,111,297.49 |
Total | 14,159,000.00 | 42,364,019.74 |
Note to the category of long-term borrowings:
(1) The guarantee loan was the guarantee provided for the bank loan of the subsidiary Lu Thai (Vietnam) by theCompany. Refer to Note XII-2 for details.
32. Bonds Payable
(1) Bonds Payable
Unit: RMB
Item | Ending balance | Beginning balance |
Convertible corporate bonds | 1,324,932,419.54 | |
Total | 1,324,932,419.54 |
(2) Changes of Bonds Payable (Excluding Other Financial Instruments Divided as Financial Liabilities suchas Preferred Shares and Perpetual Bonds)
Unit: RMB
Bonds name | Par value | Issue date | Bond duration | Issue amount | Beginning balance | Issued in the Reporting Period | Interest accrued at par value | Amortization of premium and depreciation | Repaid in the Rep | Less: interest of current portion of bonds | Ending balance |
orting Period | payable | ||||||||||
LuThai Convertible Bond 127016 | 100.00 | 9 April 2020 | 6 | 1,400,000,000.00 | 1,314,891,661.48 | 955,068.49 | 10,040,758.06 | 955,068.49 | 1,324,932,419.54 | ||
Total | -- | -- | -- | 1,400,000,000.00 | 1,314,891,661.48 | 955,068.49 | 10,040,758.06 | 955,068.49 | 1,324,932,419.54 |
(3) Convertible Conditions and Time for Convertible Corporate Bonds
On 9 April 2020, the Company publicly issued 14 million A-share convertible corporate bonds (short name: Luthai Convertible Bonds,bond code: 127016) on Shenzhen Stock Exchange with an issue price of RMB 100 per share and a share conversion price of RMB 9.01per share. The bonds were listed on Shenzhen Stock Exchange on 13 May 2020. The period for converting the convertible bonds intoshares will start from the first trading day next to six months upon the end of the bond issue (15 April 2020, T+4) and end on thematurity of the convertible bonds, namely, from 15 October 2020 till 8 April 2026.
33. Long-term Payroll Payable
(1) List of Long-term Payroll Payable
Unit: RMB
Item | Ending balance | Beginning balance |
III. Other long-term welfare | 52,317,084.85 | 105,589,249.56 |
Total | 52,317,084.85 | 105,589,249.56 |
34. Deferred Income
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance | Reason for formation |
Government grants | 157,641,810.65 | 11,502,800.00 | 6,496,906.03 | 162,647,704.62 | Government grants |
Unrealized financing incomes | 26,400.76 | 26,400.76 | 0.00 | Finance lease | |
Total | 157,668,211.41 | 11,502,800.00 | 6,523,306.79 | 162,647,704.62 | -- |
Item involving government grants:
Unit: RMB
Item | Beginning balance | Amount of newly subsidy | Amount recorded into non-operating income in the Reporting Period | Amount recorded into other income in the Reporting Period | Amount offset cost in the Reporting Period | Other changes | Ending balance | Related to assets/related income |
Land | 56,479,453.57 | 0.00 | 0.00 | 696,578.94 | 0.00 | 0.00 | 55,782,874.63 | Related to the assets |
Equipment | 79,175,495.32 | 8,702,800.00 | 0.00 | 2,493,310.22 | 0.00 | 0.00 | 85,384,985.10 | Related to the assets |
Production living assets | 425,000.12 | 0.00 | 0.00 | 42,499.90 | 0.00 | 0.00 | 382,500.22 | Related to the assets |
Overseas investment | 500,000.00 | 800,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,300,000.00 | Related to the assets |
R&D | 10,012,000.00 | 2,000,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 12,012,000.00 | Related to the income |
public rental housing | 1,189,710.65 | 0.00 | 0.00 | 24,115.74 | 0.00 | 0.00 | 1,165,594.91 | Related to the assets |
Transformation of garden greens | 9,860,150.99 | 0.00 | 0.00 | 3,240,401.23 | 0.00 | 0.00 | 6,619,749.76 | Related to the income |
Total | 157,641,810.65 | 11,502,800.00 | 0.00 | 6,496,906.03 | 0.00 | 0.00 | 162,647,704.62 |
Other notes:
35. Other Non-current Liabilities
Unit: RMB
Item | Ending balance | Beginning balance |
Loan project | 1,840,000.00 | 1,840,000.00 |
Total | 1,840,000.00 | 1,840,000.00 |
36. Share Capital
Unit: RMB
Beginning balance | Increase/decrease (+/-) | Ending balance | |||||
New shares issued | Bonus shares | Bonus issue from profit | Other | Subtotal | |||
The sum of shares | 858,121,541.00 | 858,121,541.00 |
37. Other Equity Instruments
(1) Basic Information about Other Outstanding Financial Instruments such as Preferred Shares andPerpetual Bonds at the Period-end
On 9 April 2020, the Company publicly issued 14 million A-share convertible corporate bonds (short name: Luthai Convertible Bonds,bond code: 127016) on Shenzhen Stock Exchange with an issue price of RMB 100 per share and a share conversion price of RMB 9.01per share. The bonds were listed on Shenzhen Stock Exchange on 13 May 2020.
(2) Changes of Outstanding Financial Instruments such as Preferred Shares and Perpetual Bonds at thePeriod-end
Unit: RMB
Outstanding financial instruments | Period-beginning | Increase | Decrease | Period-end | ||||
Number | Carrying value | Number | Carrying value | Number | Carrying value | Number | Carrying value | |
Equity part of LuThai Convertible Bonds | 14,000,000 | 71,391,357.42 | 14,000,000 | 71,391,357.42 | ||||
Total | 14,000,000 | 71,391,357.42 | 14,000,000 | 71,391,357.42 |
Changes of other equity instruments in the Reporting Period, reasons thereof and basis of related accounting treatment:
Other notes;The Company analyzed the debt and equity components in convertible bonds issued: after taking the issue expense into account, thefair value of RMB1,314,891,661.48 of debt part shall be recorded into bonds payable and the fair value of RMB71,391,357.42 of theequity part shall be recorded into other equity instruments.
38. Capital Reserves
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance |
Capital premium (premium on stock) | 197,609,646.20 | 197,609,646.20 | ||
Other capital reserves | 60,436,599.22 | 60,436,599.22 | ||
Total | 258,046,245.42 | 258,046,245.42 |
39. Other Comprehensive Income
Unit: RMB
Item | Beginning balance | Reporting Period | Ending balance | |||||
Income before taxation in the Current Period | Less: recorded in other comprehensive | Less: recorded in other comprehensive | Less: Income tax | Attributable to owners of the Company as | Attributable to non-cont |
income in prior period and transferred in profit or loss in the Current Period | income in prior period and transferred in retained earnings in the Current Period | expense | the parent after tax | rolling interests after tax | ||||
II. Other comprehensive income that may subsequently be reclassified to profit or loss | 91,626,571.75 | 21,295,310.76 | 21,295,310.76 | 112,921,882.51 | ||||
Differences arising from translation of foreign currency-denominated financial statements | 91,626,571.75 | 21,295,310.76 | 21,295,310.76 | 112,921,882.51 | ||||
Total of other comprehensive income | 91,626,571.75 | 21,295,310.76 | 21,295,310.76 | 112,921,882.51 |
40. Surplus Reserves
Unit: RMB
Item | Beginning balance | Increase | Decrease | Ending balance |
Statutory surplus reserves | 1,113,925,779.05 | 1,113,925,779.05 | ||
Discretional surplus reserves | 3,341,572.58 | 3,341,572.58 | ||
Total | 1,117,267,351.63 | 1,117,267,351.63 |
41. Retained Profits
Unit: RMB
Item | Reporting Period | Same period of last year |
Beginning balance of retained profits before adjustments | 5,372,073,615.12 | 4,927,500,989.55 |
Total beginning retained profits of the adjustments ( “+” for increase, “-” for decrease) | 15,797,284.81 | |
Beginning balance of retained profits after | 5,372,073,615.12 | 4,943,298,274.36 |
adjustments | ||
Add: Net profit attributable to owners of the Company as the parent | 144,119,579.22 | 411,446,216.59 |
Dividend of ordinary shares payable | 85,812,154.10 | 429,060,770.50 |
Ending retained profits | 5,430,381,040.24 | 4,925,683,720.45 |
List of adjustment of beginning retained profits:
1) RMB0.00 beginning retained profits was affected by retrospective adjustment conducted according to the Accounting Standardsfor Business Enterprises and relevant new regulations.
2) RMB0.00 beginning retained profits was affected by changes in accounting policies.
3) RMB0.00 beginning retained profits was affected by correction of significant accounting errors.
4) RMB0.00 beginning retained profits was affected by changes in combination scope arising from same control.
5) RMB0.00 beginning retained profits was affected totally by other adjustments.
42. Operating Revenue and Cost of Sales
Unit: RMB
Item | Reporting Period | Same period of last year | ||
Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
Main operations | 2,222,332,890.30 | 1,634,158,882.29 | 3,067,390,155.73 | 2,138,306,997.45 |
Other operations | 64,411,190.49 | 49,593,448.98 | 118,058,188.28 | 72,579,958.08 |
Total | 2,286,744,080.79 | 1,683,752,331.27 | 3,185,448,344.01 | 2,210,886,955.53 |
Performance obligations:
NaughtInformation in relation to the transaction price apportioned to the residual contract performance obligation:
As at the end of the Reporting Period, the revenue amount corresponding to the contract performance obligation yet to be fulfilled oryet to be completed under a signed contract is RMB 0.00, including RMB 0.00 expected to be recognized as revenue in the year,RMB 0.00 expected to be recognized as revenue in the year, and RMB 0.00 expected to be recognized as revenue in the year.Other notesNaught
43. Taxes and Surtaxes
Unit: RMB
Item | Reporting Period | Same period of last year |
Urban maintenance and construction tax | 7,630,680.55 | 12,942,977.77 |
Education Surcharge | 3,402,460.99 | 6,280,555.02 |
Resources tax | 262,578.00 | 273,812.00 |
Property tax | 10,624,279.89 | 10,445,304.80 |
Land use tax | 8,760,353.77 | 4,971,821.88 |
Vehicle and vessel usage tax | 75,368.72 | 67,558.06 |
Stamp duty | 1,668,370.50 | 1,974,918.20 |
Local education surcharge | 2,268,305.20 | 4,186,251.77 |
Local water conservancy facility construction fund | 541,123.15 | 906,978.57 |
Environmental protection tax | 532,734.64 | 686,626.70 |
Total | 35,766,255.41 | 42,736,804.77 |
44. Selling Expense
Unit: RMB
Item | Reporting Period | Same period of last year |
Salary | 24,858,302.63 | 20,574,080.44 |
Transport fees | 18,556,351.95 | 23,619,036.59 |
Advertising expense | 218,938.82 | 842,219.72 |
Port surcharge | 5,552,752.80 | 6,962,843.36 |
Depreciation charge | 3,364,600.96 | 2,590,789.92 |
Business travel charges | 963,154.55 | 2,276,163.13 |
Rental charges | 2,003,837.09 | 352,005.53 |
Sales service fee | 4,662,986.11 | 9,324,787.65 |
Publicity expenses | 8,117,611.43 | 5,672,646.13 |
Expense for repairmen and loss | 7,115,057.20 | 1,040,128.85 |
Other | 6,326,312.05 | 4,582,241.62 |
Total | 81,739,905.59 | 77,836,942.94 |
45. Administrative Expense
Unit: RMB
Item | Reporting Period | Same period of last year |
Salary | 67,681,094.74 | 70,734,616.39 |
Depreciation charge | 17,659,534.12 | 16,165,351.08 |
Warehouse funding | 20,442,304.85 | 18,689,030.12 |
Travel expense | 12,025,932.80 | 9,626,697.87 |
Rental charges | 6,948,195.24 | 7,783,345.21 |
Labor-union expenditure | 5,915,433.42 | 7,253,250.66 |
Employee education budget | 4,188,129.15 | 4,917,654.51 |
Amortization of intangible assets | 6,766,430.80 | 6,659,983.58 |
Carriage charges | 3,500,431.81 | 3,978,013.51 |
Other | 32,766,112.54 | 45,397,654.81 |
Total | 177,893,599.47 | 191,205,597.74 |
46. R&D Expense
Unit: RMB
Item | Reporting Period | Same period of last year |
Labor cost | 63,175,350.86 | 81,442,048.22 |
Material expense | 43,001,450.30 | 61,389,843.36 |
Depreciation charge | 6,678,502.09 | 5,495,504.06 |
Other | 10,586,419.81 | 13,611,643.59 |
Total | 123,441,723.06 | 161,939,039.23 |
47. Finance Costs
Unit: RMB
Item | Reporting Period | Same period of last year |
Interest expense | 43,752,260.50 | 47,316,465.76 |
Less: Interest income | 13,506,359.51 | 4,338,765.10 |
Less: Capitalized interest | 5,092,555.05 | |
Foreign exchange gains or losses | -3,962,751.87 | 4,695,399.57 |
Less: Capitalized foreign exchange gains or losses | ||
Other | 4,016,715.61 | 4,881,469.82 |
Total | 25,207,309.68 | 52,554,570.05 |
48. Other Income
Unit: RMB
Sources | Reporting Period | Same period of last year |
Government grants | 36,850,705.82 | 32,226,225.91 |
Total | 36,850,705.82 | 32,226,225.91 |
49. Investment Income
Unit: RMB
Item | Reporting Period | Same period of last year |
Long-term equity investment income accounted by equity method | -3,579,523.35 | 5,083,101.54 |
Investment income from disposal of long-term equity investment | -46,137.60 | |
Investment income from holding of trading financial assets | 1,382,405.99 | |
Investment income from disposal of trading financial assets | 154,309,537.24 | 3,998,105.48 |
Total | 150,730,013.89 | 10,417,475.41 |
50. Gain on Changes in Fair Value
Unit: RMB
Sources | Reporting Period | Same period of last year |
Trading financial assets | -143,854,551.38 | 405,000.00 |
Trading financial liabilities | -841,402.78 | 4,877,600.00 |
Total | -144,695,954.16 | 5,282,600.00 |
51. Credit Impairment Loss
Unit: RMB
Item | Reporting Period | Same period of last year |
Bad debt loss of other receivables | 567,920.22 | 597,634.52 |
Bad debt loss of long-term receivables | 396,960.83 | -62,635.15 |
Bad debt loss of accounts receivable | -2,518,597.53 | -1,065,950.68 |
Total | -1,553,716.48 | -530,951.31 |
52. Asset Impairment Loss
Unit: RMB
Item | Reporting Period | Same period of last year |
II. Inventory falling price loss and impairment provision for contract performance costs | -24,613,079.38 | -1,543,199.38 |
Total | -24,613,079.38 | -1,543,199.38 |
53. Asset Disposal Income
Unit: RMB
Sources | Reporting Period | Same period of last year |
Fixed asset disposal income (“-” for loss) | -405,636.42 | 513,490.00 |
Intangible asset disposal income (“-” for loss) | 51,773.24 | 0.00 |
Total | -353,863.18 | 513,490.00 |
54. Non-operating Income
Unit: RMB
Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
Gains on exchange of non-monetary assets | 16,961.25 | ||
Other | 2,125,819.41 | 3,080,063.19 | |
Total | 2,125,819.41 | 3,097,024.44 |
55. Non-operating Expense
Unit: RMB
Item | Reporting Period | Same period of last year | Amount recorded in the current non-recurring profit or loss |
Donations | 1,000,000.00 | 102,676.14 | |
Losses from damage and scrap of non-current assets | 149,918.89 | 24,624.99 | |
Other | 1,234,008.01 | 2,087,055.41 | |
Total | 2,383,926.90 | 2,214,356.54 |
56. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item | Reporting Period | Same period of last year |
Current income tax expense | 26,171,457.60 | 72,479,054.50 |
Deferred income tax expense | 896,376.09 | 2,360,177.79 |
Total | 27,067,833.69 | 74,839,232.29 |
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item | Reporting Period |
Profit before taxation | 175,048,955.33 |
Current income tax expense accounted at statutory/applicable tax rate | 26,257,343.30 |
Influence of applying different tax rates by subsidiaries | 4,031,973.86 |
Influence of income tax before adjustment | -2,684,554.97 |
Profit/loss of associated enterprises and joint ventures accounted by equity method | -536,928.50 |
Income tax expense | 27,067,833.69 |
57. Other Comprehensive Income
Refer to Note VII-39 for details.
58. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Government subsidies | 42,760,333.79 | 31,316,634.62 |
Claim income | 657,147.73 | 2,085,818.06 |
Recovery of employee borrowings, petty cash and deposit | 7,829,609.00 | 10,419,971.60 |
Collection for employees | 1,507,827.48 | 1,888,073.17 |
Other | 2,847,294.50 | 772,153.13 |
Total | 55,602,212.50 | 46,482,650.58 |
(2) Cash Used in Other Operating Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Freight and miscellaneous charges | 25,102,769.53 | 27,584,811.06 |
Rental charges | 11,393,199.71 | 10,519,175.31 |
Advertising expense | 1,074,493.45 | 1,918,696.01 |
Business travel charges | 14,492,835.30 | 11,411,011.08 |
Insurance | 2,130,902.85 | 6,869,594.27 |
Audit advisory announcement fee | 9,146,615.17 | 2,301,944.65 |
Decoration & repair expenses | 1,368,170.04 | 82,537.34 |
Donation | 1,000,000.00 | 22,546.59 |
Pre-payment | 1,750,359.55 | 5,086,731.48 |
Payment of employee borrowings, petty cash and deposit | 6,298,914.86 | 11,643,401.71 |
Other | 30,165,500.96 | 14,392,971.31 |
Total | 103,923,761.42 | 91,833,420.81 |
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Interest income | 8,467,672.27 | 3,366,107.52 |
Income from forward foreign exchange | 8,657,194.49 | 6,470,691.14 |
Cash deposit of L/C for purchasing equipment | 28,969,919.03 | |
Total | 46,094,785.79 | 9,836,798.66 |
(4) Cash Used in Other Investing Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Forward settlement exchange loss | 363,000.00 | 4,874,724.40 |
Payment of deposit for the L/C of equipment purchase | 2,868,380.25 | |
Total | 3,231,380.25 | 4,874,724.40 |
(5) Cash Generated from Other Financing Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Return of loan guarantees | 14,000,000.00 | 10,000,000.00 |
Recovery of intercourse accounts | 160,000,000.00 | 9,000,000.00 |
Total | 174,000,000.00 | 19,000,000.00 |
(6) Cash Used in Other Financing Activities
Unit: RMB
Item | Reporting Period | Same period of last year |
Payment of the B-share buy-back amount | 8,573,104.03 | |
Payment for intercourse accounts | 160,000,000.00 | 11,750,000.00 |
Acquisition of minority equity of subsidiaries | 841,000.00 | |
Total | 160,000,000.00 | 21,164,104.03 |
59. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information | Reporting Period | Same period of last year |
1. Reconciliation of net profit to net cash flows generated from operating activities | -- | -- |
Net profit | 147,981,121.64 | 420,697,509.99 |
Add: Provision for impairment of assets | 26,166,795.86 | 2,074,150.69 |
Depreciation of fixed assets, oil-gas assets, and productive living assets | 242,090,445.82 | 226,725,498.16 |
Amortization of intangible assets | 8,510,785.39 | 9,965,756.01 |
Amortization of long-term prepaid expenses | 2,182,757.76 | 1,602,913.05 |
Losses from disposal of fixed assets, intangible assets and other long-lived assets (gains: negative) | 353,863.18 | -513,490.00 |
Losses from scrap of fixed assets (gains: negative) | 149,918.89 | 7,663.74 |
Losses from changes in fair value (gains: negative) | 143,854,551.38 | -5,282,600.00 |
Finance costs (gains: negative) | 21,190,594.07 | 47,673,100.23 |
Investment loss (gains: negative) | -150,730,013.89 | -10,417,475.41 |
Decrease in deferred income tax assets (gains: negative) | 1,633,759.08 | 2,508,867.66 |
Increase in deferred income tax liabilities (“-” means decrease) | 21,903,691.90 | -148,689.87 |
Decrease in inventory (gains: negative) | -169,000,792.88 | -221,528,624.76 |
Decrease in accounts receivable generated from operating activities (gains: negative) | 188,207,459.72 | -174,035,167.80 |
Increase in accounts payable used in operating activities (decrease: negative) | -275,102,672.23 | -179,612,349.12 |
Net cash generated from/used in operating activities | 209,392,265.69 | 119,717,062.57 |
2. Significant investing and financing activities without involvement of cash receipts and payments | -- | -- |
3. Net increase/decrease of cash and cash equivalent: | -- | -- |
Ending balance of cash | 2,018,648,643.49 | 623,558,417.28 |
Less: beginning balance of cash | 878,559,018.92 | 535,134,772.90 |
Net increase in cash and cash equivalents | 1,140,089,624.57 | 88,423,644.38 |
(2) Cash and Cash Equivalents
Unit: RMB
Item | Ending balance | Beginning balance |
I. Cash | 2,018,648,643.49 | 878,559,018.92 |
Including: Cash on hand | 9,094,993.18 | 9,544,377.41 |
Bank deposit on demand | 2,009,553,650.31 | 869,014,641.51 |
III. Ending balance of cash and cash equivalents | 2,018,648,643.49 | 878,559,018.92 |
60. Notes of Items in Owners’ Equity Change
Specific name of “other” related to the adjustment of the ending balance of last year and adjusted amount: Not applicable.
61. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item | Ending carrying value | Reason for restriction |
Monetary assets | 4,586,637.12 | Cash deposit for L/G and L/C |
Inventory | 76,161,332.00 | Mortgaged for short-term borrowings |
Intangible assets | 97,498,130.83 | Mortgaged for short-term borrowings |
Total | 178,246,099.95 | -- |
62. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Item | Ending foreign currency balance | Exchange rate | Ending balance converted to RMB |
Monetary assets | -- | -- | |
Of which: USD | 58,303,032.08 | 7.0795 | 412,756,315.61 |
EUR | 90,052.92 | 7.9610 | 716,911.30 |
HKD | 3,204,206.74 | 0.9134 | 2,926,722.44 |
JPY | 34,192,053.00 | 0.0658 | 2,249,837.09 |
GBP | 2,667.18 | 8.7144 | 23,242.87 |
CHF | 163.16 | 7.4434 | 1,214.47 |
SEK | 800.00 | 0.7589 | 607.12 |
Dong | 873,916,580,881.03 | 0.000305 | 266,531,448.42 |
MMK | 296,405,273.21 | 0.00515 | 1,525,776.97 |
Riel | 450,723,939.55 | 0.0017 | 779,599.62 |
Notes receivable | |||
Of which: USD | 8,015,391.52 | 7.0795 | 56,744,964.31 |
Accounts receivable | -- | -- | |
Of which: USD | 42,608,540.53 | 7.0795 | 301,647,162.68 |
EUR | 63,901.92 | 7.9610 | 508,723.19 |
HKD | |||
Dong | 10,407,738,019.90 | 0.000305 | 3,174,203.98 |
Other receivables | |||
Of which: USD | 133,004.59 | 7.0795 | 941,606.00 |
JPY | 1,395,039.97 | 0.0658 | 91,793.63 |
Dong | 13,996,291,784.84 | 0.000305 | 4,268,659.05 |
GBP | 9,250.00 | 8.7144 | 80,608.20 |
MMK | 1,099,999.15 | 0.00515 | 5,662.36 |
Accounts payable | |||
Of which: USD | 7,271,078.54 | 7.0795 | 51,475,600.52 |
HKD | 350,463.00 | 0.9134 | 320,112.90 |
JPY | 8,087,725.08 | 0.0658 | 532,172.31 |
EUR | 433,568.07 | 7.9610 | 3,451,635.41 |
Dong | 9,502,365,788.48 | 0.000305 | 2,898,079.03 |
MMK | 51,969,718.34 | 0.00515 | 267,519.53 |
Other payables | |||
Of which: USD | 86,080.00 | 7.0795 | 609,403.36 |
HKD | 16,868,397.14 | 0.9134 | 15,407,593.95 |
Dong | 241,549,846.71 | 0.000305 | 73,669.08 |
MMK | 999,999.22 | 0.005148 | 5,147.60 |
Short-term borrowings | |||
Of which: USD | 184,755,016.35 | 7.0795 | 1,307,973,138.29 |
Dong | 237,146,179,601.00 | 0.000305 | 72,325,994.33 |
Current portion of long-term borrowings | |||
Of which: USD | 8,000,000.00 | 7.0795 | 56,636,000.00 |
Long-term borrowings | -- | -- | |
Of which: USD | 2,000,000.00 | 7.0795 | 14,159,000.00 |
EUR | |||
HKD |
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, RecordingCurrency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, RelevantReasons Shall Be Disclosed.
√ Applicable □ Not applicable
The operating places of Company’s subsidiaries Lu Thai (Hong Kong), Lu Thai (Cambodia), Lu Thai (Burma), Lu Thai (America),and Lu Thai (Vietnam), Lu An Garment Co., Ltd., and the sub-subsidiary Lu Thai Tan Chau were Hong Kong, Cambodia, Burma,America, Vietnam, Vietnam and Vietnam, and the recording currency was HKD for Lu Thai (Hong Kong), and USD for otheroverseas companies..
63. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Category | Amount | Listed items | Amount recorded in the current profit or loss |
Provincial industrial transformation development fund | 2,000,000.00 | Deferred income | |
Central government foreign trade and economic development fund | 800,000.00 | Deferred income | |
Enterprise technology improvement fund | 8,702,800.00 | Deferred income | |
Fund for providing generous support to local enterprises | 16,455,600.00 | Other income | 16,455,600.00 |
Subsidy for stabilizing employment | 4,970,305.36 | Other income | 4,970,305.36 |
Transport subsidy for the transfer of cotton yarns | 2,641,138.52 | Other income | 2,641,138.52 |
Support incentive fund of national and provincial science and technology awards | 1,000,000.00 | Other income | 1,000,000.00 |
Subsidy for electricity bills | 871,326.00 | Other income | 871,326.00 |
Support of national science and technology awards | 800,000.00 | Other income | 800,000.00 |
Loans with discounted interests | 630,534.00 | Finance costs | 630,534.00 |
Social insurance subsidies | 531,858.71 | Other income | 531,858.71 |
Rebate of surcharges for withholding taxes | 379,942.04 | Other income | 379,942.04 |
Fund for the conversion from old to new industrial growth drivers | 336,600.00 | Other income | 336,600.00 |
Training subsidy for the new apprenticeship system | 330,000.00 | Other income | 330,000.00 |
Municipal commerce and trade fund subsidy | 289,900.00 | Other income | 289,900.00 |
Imports with discounted interests | 273,200.00 | Finance costs | 273,200.00 |
Project subsidy for the introduction of overseas engineers at the municipal level | 270,000.00 | Other income | 270,000.00 |
Subsidy for market expansion in commerce and trade development at the provincial level | 256,300.00 | Other income | 256,300.00 |
Central government foreign trade and economic development fund | 198,000.00 | Other income | 198,000.00 |
Once-off new employment subsidy fund | 196,000.00 | Other income | 196,000.00 |
Subsidy fund for the conversion from old to new industrial growth drivers | 180,000.00 | Other income | 180,000.00 |
Bonus of national science and technology awards | 150,000.00 | Other income | 150,000.00 |
Municipal foreign trade and economic development fund | 123,400.00 | Other income | 123,400.00 |
Transport subsidy for outbound transfer of cotton from Xinjiang | 116,238.53 | Other income | 116,238.53 |
VAT exemption amount | 96,254.89 | Other income | 96,254.89 |
Workstation subsidy to the payment to technicians | 80,000.00 | Other income | 80,000.00 |
Municipal business area fund | 55,500.00 | Other income | 55,500.00 |
Social insurance subsidy for absorbing personnel with difficulties in finding jobs | 19,519.67 | Other income | 19,519.67 |
Additional deduction amount of VAT | 3,800.48 | Other income | 3,800.48 |
VAT deduction of GTS equipment | 1,540.00 | Other income | 1,540.00 |
VAT reduction and exemption | 575.59 | Other income | 575.59 |
Total | 42,760,333.79 | 31,257,533.79 |
(2) Return of Government Grants
□ Applicable √ Not applicable
Other notes:
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Way of gaining | |
Directly | Indirectly | |||||
Luthai (Hong Kong) | Hong Kong | Hong Kong | Wholesale and retail industry | 100.00% | Set-up | |
Shanghai Luthai | Shanghai | Shanghai | Wholesale and retail industry | 100.00% | Set-up | |
Xinjiang Luthai | Xinjiang | Xinjiang | Manufacturing industry | 59.92% | Business combination not under the same control | |
Lufeng Weaving & Dyeing | Zibo | Zibo | Manufacturing industry | 75.00% | Set-up | |
Luqun Textile | Zibo | Zibo | Manufacturing industry | 100.00% | Set-up | |
Xinsheng Power | Zibo | Zibo | Manufacturing industry | 100.00% | Business combination not under the same control | |
Xinjiang Textile (sub-subsidiary) | Xinjiang | Xinjiang | Manufacturing industry | 59.92% | Set-up | |
Beijing Youxian | Beijing | Beijing | Wholesale and retail industry | 100.00% | Set-up | |
Shanghai Zhinuo | Shanghai | Shanghai | Technology development, technical consultancy and transfer of technologies | 100.00% | Set-up | |
Lulian New Materials | Zibo | Zibo | Manufacturing industry | 75.00% | Set-up | |
Lujia Import & Export | Zibo | Zibo | Import and export trade | 100.00% | Set-up | |
Lu Thai Occupational Training School | Zibo | Zibo | Skill training | 100.00% | Set-up | |
Lu Thai (Cambodia) | Cambodia | Cambodia | Manufacturing industry | 100.00% | Set-up |
Lu Thai (Burma) | Burma | Burma | Manufacturing industry | 100.00% | Set-up | |
Lu Thai (America) | America | America | Wholesale and retail industry | 100.00% | Set-up | |
Lu Thai (Vietnam) | Vietnam | Vietnam | Manufacturing industry | 100.00% | Set-up | |
Lu Thai Tan Chau (sub-subsidiary) | Vietnam | Vietnam | Manufacturing industry | 100.00% | Set-up | |
Lu An Garments | Vietnam | Vietnam | Manufacturing industry | 100.00% | Set-up |
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Name | Shareholding proportion of non-controlling interests | The profit or loss attributable to the non-controlling interests | Declaring dividends distributed to non-controlling interests | Balance of non-controlling interests at the period-end |
Xinjiang Luthai | 40.08% | -2,166,723.45 | 193,750,107.65 | |
Lufeng Weaving & Dyeing | 25.00% | 7,992,782.43 | 50,000,000.00 | 314,776,411.66 |
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Name | Ending balance | Beginning balance | ||||||||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liability | Total liabilities | |
Xinjiang Luthai | 311,441,726.96 | 502,104,237.30 | 813,545,964.26 | 315,701,499.54 | 4,369,911.06 | 320,071,410.60 | 420,902,264.09 | 514,128,662.24 | 935,030,926.33 | 441,046,827.41 | 4,493,264.80 | 445,540,092.21 |
Lufeng Weaving & Dyeing | 835,342,238.42 | 789,653,425.19 | 1,624,995,663.61 | 315,764,776.90 | 43,527,423.01 | 359,292,199.91 | 869,432,992.40 | 806,983,371.55 | 1,676,416,363.95 | 200,786,105.11 | 40,658,795.64 | 241,444,900.75 |
Unit: RMB
Name | Reporting Period | Same period of last year | ||||||
Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows from operating activities | |
Xinjiang Luthai | 182,903,647.38 | -8,070,795.31 | -8,070,795.31 | 94,628,954.27 | 314,368,667.80 | -5,299,119.43 | -5,299,119.43 | 30,794,222.48 |
Lufeng Weaving & Dyeing | 606,784,342.44 | 30,732,000.50 | 30,732,000.50 | -27,139,185.20 | 805,575,459.05 | 52,877,665.09 | 52,877,665.09 | 106,151,171.66 |
Other notes:
2. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Name | Main operating place | Registration place | Nature of business | Holding percentage (%) | Accounting treatment of the investment to joint venture or associated enterprise | |
Directly | Indirectly | |||||
Haohong Investment | Ningbo | Ningbo | Equity investment | 33.33% | Equity method | |
Haoying Investment | Ningbo | Ningbo | Equity investment | 47.62% | Equity method |
(2) Main Financial Information of Significant Associated Enterprises
Unit: RMB
Ending balance/Reporting Period | Beginning balance/The same period of last year | |
Haohong Investment | Haohong Investment | |
Current assets | 298,700,085.17 | 312,249,946.34 |
Total assets | 298,700,085.17 | 312,249,946.34 |
Current liabilities | 150,000.00 | 150,000.00 |
Total liabilities | 150,000.00 | 150,000.00 |
Net assets | 298,550,085.17 | 312,099,946.34 |
Equity attributable to shareholders of the Company as the parent | 298,550,085.17 | 312,099,946.34 |
Net assets shares calculated at the shareholding proportion | 99,516,743.39 | 104,032,882.42 |
--Other | 0.00 | -806,582.42 |
Carrying value of investment to associated enterprises | 99,516,743.39 | 103,226,300.00 |
Net profit | -13,549,861.17 | 15,250,829.70 |
Total comprehensive income | -13,549,861.17 | 15,250,829.70 |
Other notes:
According to the partnership agreement, all the partners shall enjoy 80% of surplus earnings in partnerships in proportionto their contributions, and the general partner shall enjoy the rest of 20%. Therefore, there was difference between the netassets shares calculated at shareholding proportion and he carrying value of equity investment in associated enterprises
for the Company.
(3) Summary Financial Information of Insignificant Joint Ventures and Associated Enterprises
Unit: RMB
Ending balance/Reporting Period | Beginning balance/The same period of last year | |
Joint ventures: | -- | -- |
Total of the following calculated at the shareholding proportion | -- | -- |
Associated enterprises: | -- | -- |
Total carrying value of investments | 50,130,033.26 | |
Total of the following calculated at the shareholding proportion | -- | -- |
--Net profit | 130,033.26 | |
-- Total comprehensive income | 130,033.26 |
IX. The Risk Related to Financial Instruments
The Group’s major financial instruments include the monetary assets, notes receivable, accounts receivables, accounts receivablefinancing, other receivables, other current assets, trading financial assets, other equity instrument investments, other non-currentfinancial assets, long-term receivables, notes payable, accounts payable, other payables, the short-term borrowings, trading financialliabilities, non-current liabilities due within one year and long-term borrowings. Details of various financial instruments are disclosedin relevant Notes. Possible risks related to these financial instruments and various risk management policies implemented to reducethese risks are described as follows. The Group’s management has controlled and monitored these risk exposures in order to controlthe above-mentioned risks within the limited scope.
1. Risk management objectives and policies
The Group has conducted the risk management to achieve an appropriate balance between the risk and the income and to minimizethe adverse influence of financial risks on the Group’s financial performance. According to such risk management objective, theCompany has formulated corresponding risk management policy to recognize and analyze possible risks encountered by the Group,set the appropriate acceptable risk level and designed corresponding internal control procedures to monitor the Group’s risk level.Meanwhile, the Group will regularly review these risk management policies and relevant internal control system so as to cater for themarket or respond to any change in the Group’s business operations. Accordingly, the Group’s internal audit department will alsoregularly or randomly check whether the internal control system is implemented in conformity with relevant risk managementpolicies.The major risks caused by financial instruments of the Group are credit risk, liquidity risk and market risk (including foreignexchange risk and interest rate risk).The Board of Directors shall be responsible for planning and establishing the risk management framework for the Group,determining the Group’s risk management policies and relevant guidelines and monitoring the implementation of various riskmanagement measures. However, the Company has established corresponding risk management policies to recognize and analyzepossible risks encountered by the Group. Besides, various risks are specified in these risk management policies, including the creditrisk, the liquidity risk and the market risk management etc.. On a regular basis, the Group will evaluate the specific marketing
environment and various changes in the Group’s business operations so as to determine whether any risk management policy andsystem need be updated.
(1) Credit risk
Credit Risk means that the Group will suffer any financial losses due to the counter party’s failure in fulfilling the contractobligations.The Group shall manage the credit risk based on the specific Group Classification, and the credit risk mainly arises from bank deposit,notes receivable, accounts receivable, other receivables and long-term accounts receivable etc..The Group’s bank deposits are mainly saved in state-owned banks and other large and medium-sized listed banks. The Group’s bankdeposits are expected not to suffer any major credit risks.For notes receivable, accounts receivable, other accounts receivable and long-term accounts receivable, the Group has establishedrelevant policies to control the credit risk exposure. According to the client’s financial status, credit record and other factors(including the current market condition), the Group will evaluate the client’s credit qualification and set corresponding credit period.In addition, the Group will regularly monitor the client’s credit record. For clients with poor credit records, the Group will issue thewritten Reminder Notice, shorten the credit period or cancel the credit period to guarantee the Group’s overall credit risk undercontrol.The hugest credit risk exposure borne by the Group is the book value of each financial asset reflected in the balance sheet, and theGroup has not provided any other guarantees that may cause the Company to bear any credit risk.In terms of accounts receivable, the top 5 customers in accounts receivable were accounted for 30.29% of the total amount ofaccounts receivable of the Group (22.71% in 2019). In terms of other receivables, the top 5 of the ending balance according to thearrears party was accounted for 47.68% of the total amount of other receivables of the Group (71.72% in 2019).Investment in debt obligationsThe Group supervised the changes of credit risk through tracking the published external credit ratings. In order to make sure whetherthe credit rating was the latest, and whether the credit risk has increased obviously of evaluation report date but not been reflected inthe published external ratings, the Group has supplemented through examining the changes of bond yield and the available news andsupervision information.On the balance sheet date, the carrying value of investment in debt obligations of the Group are listed as follows according to reportitems (Unit: RMB’0,000).
Item | 2020.6.30 | 2019.12.31 |
Trading financial assets | 0 | 5,235.61 |
Available-for-sale financial assets | ||
Total | 5,235.61 |
(2) Liquidity risk
Liquidity Risk refers to the risk of capital shortage encountered by the Group during the cash payment or the settlement of otherfinancial assets.During the management of liquidity risk, the Group shall reserve and monitor corresponding cash and cash equivalent deemedsufficient by the management so as to meet the Group’s operational requirements and mitigate the impact caused by the cash flowfluctuation. The Group’s management will monitor the use of bank loans and guarantee the fulfillment of loan agreement. Meanwhile,major financial institutions shall promise to provide the Group with sufficient reserve funds in order to satisfy the short-term andlong-term fund demand. The Group shall raise its working capital based on the capital generated from business operations and bankloans.
(3) Market risk
The financial instrument’s market risk refers to the fluctuation risk of fair value of financial instrument or future cash flow caused bythe changes of market price, including the interest rate risk and the exchange rate risk.
Interest rate riskInterest rate risk refers to the fluctuation risk of fair value of financial instrument or future cash flow caused by the changes of marketinterest rate. The interest rate can derive from the recognized interest-bearing financial instruments and unrecognized financialinstruments (including certain loan commitment).The Group’s interest rate risk mainly arises from the bank loan. Financial liabilities based on the floating interest rate will cause thecash flow interest rate risk to the Group, and financial liabilities based on the fixed interest rate the fair value interest rate risk.However, the Group has paid close attention the impact of interest rate fluctuations on the Group’s interest rate risk. At present, theGroup has not taken any interest rate hedging measures. The rise of interest rate will increase the cost of newly-addedinterest-bearing debts and the interest cost of the Group’s unsettled interest-bearing debts based on the floating interest rate, andcause major adverse influence on the Group’s financial performance. The management will timely make corresponding adjustmentaccording to the latest market situation, and corresponding interest rate swap will be arranged to reduce the interest rate risk.On 30 June 2020, if the lending rate calculated at floating interest rate up or down 100 basis points with other variables unchanged,the net profit and shareholders’ equity will be decreased or increased about RMB9.8156 million.Foreign exchange riskForeign exchange risk is referred to the fluctuation risk of fair value of financial instruments or future cash flows resulted from thechange of foreign exchange rate. The foreign exchange rate was originated from the financial instruments denominated in foreigncurrencies other than the recording currency.On 30 June 2020, the amount of foreign currency financial assets and foreign currency financial liabilities converted to renminbi is asfollows (Unit: RMB’0,000):
Item | Foreign currency liabilities | Foreign currency assets | ||
Ending balance | Beginning balance | Ending balance | Beginning balance |
USD | 143,085.31 | 142,862.43 | 77,209.00 | 103,091.39 |
EUR | 345.16 | 93.50 | 122.56 | 108.54 |
JPY | 53.22 | 178.21 | 234.16 | 47.88 |
HKD | 1,572.77 | 833.05 | 292.67 | 4,879.34 |
GBP | - | 10.39 | 11.68 | |
CHF | - | 47.44 | 0.12 | 40.82 |
SEK | - | 0.06 | 0.06 | |
Dong | 7,529.77 | 9,156.70 | 27,397.43 | 11,176.75 |
MMK | 27.27 | 153.14 | 71.20 |
Riel | - | 77.96 | 63.82 | |
Total | 152,613.50 | 153,171.32 | 105,497.49 | 119,491.47 |
2. Capital management
The objectives of capital management policies of the Group are to insure the continuous operation of the Group so as to provide returnto shareholders and benefit other stakeholders, as well as to reduce capital cost by maintaining the optimal capital structure.In order to maintain or adjust capital structure, the Group might adjust financing method and the dividends paid to shareholders, returncapital to shareholders, issue new shares and other equity instrument or sell assets to reduce debts.The Group supervised the capital structure based on the asset-liability ratio (namely total liabilities divide total assets). On 30 June 2020,the asset-liability ratio was 34.28% of the Group (30.17% on 31 December 2019).
X. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Item | Ending fair value | |||
Fair value measurement items at level 1 | Fair value measurement items at level 2 | Fair value measurement items at level 3 | Total | |
I. Consistent fair value measurement | -- | -- | -- | -- |
(II) Accounts receivable financing | 14,807,543.11 | 14,807,543.11 | ||
(III) Other non-current financial assets | 90,519,880.41 | 48,000,000.00 | 138,519,880.41 | |
The total amount of assets consistently measured at fair value | 90,519,880.41 | 62,807,543.11 | 153,327,423.52 | |
(VI) Trading financial liabilities | 841,402.78 | 841,402.78 | ||
The total amount of liabilities consistently measured at fair value | 841,402.78 | 841,402.78 | ||
II. Inconsistent fair value measurement | -- | -- | -- | -- |
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
As for the unlisted equity investment of Rongchang Pharmacy, the fair value was determined in accordance with the transactionvalue of the most recent period.
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters forConsistent and Inconsistent Fair Value Measurement Items at Level 3For the trust investment not existing in the active market, the Company shall recognize its fair value based on the estimated value onthe balance sheet day provided by the asset manager.For the unlisted equity investment into Rongchang Pharmacy, the Company adopts the comparable listed company comparisonmethod, and the non-observable input value of the comparable listed company comparison method includes the liquidity discount.The investment into Shandong Hongqiao Thermoelectric Co., Ltd. made by Luqun Textile (the Company’s subsidiary) is expected tobe held in the long run for obtaining the discount on power purchase. As no revenue distribution right is vested in the investment, theinvested unit’s operating profit and loss are not shared or borne, and the equity transfer is not proposed, the Company regards it asthe financial asset which shall be measured based on the fair value and whose variations are included in the current profit and loss,and the investment cost is deemed as the fair value of the financial asset.For accounts receivables financing at fair value and the changes included in other comprehensive income, its fair value shall bedetermined by the discount cash flow method.
4. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and financial liabilities measured at amortized cost mainly include: monetary assets, notes receivable, accountsreceivable, other receivables, long-term receivables, short-term borrowings, notes payable, accounts payables, other payables, currentportion of long-term borrowings and long-term borrowings, etc..
5. Other
XI. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Name | Registration place | Nature of business | Registered capital | Proportion of share held by the Company as the parent against the Company (%) | Proportion of voting rights owned by the Company as the parent against the Company (%) |
Zibo Lucheng Textile Investment Co., Ltd. | Zibo | Textile, chemistry and investment | RMB63.26 million | 16.36% | 16.36% |
Notes: information on the Company as the parentThe final controllers of the Company are Mr. Liu Zibin and Mr. Liu Deming.
2. Subsidiaries of the Company
Refer to Note IX-1.
3. Information on the Joint Ventures and Associated Enterprises of the CompanyRefer to Note IX-3.
4. Information on Other Related Parties
Name | Relationship with the Company |
Zibo Limin Purified Water Co., Ltd. (hereinafter called Limin Purified Water) | Wholly-owned subsidiary of the Company as the parent |
Zibo Luqun Land Co., Ltd (hereinafter called Luqun Land) | Wholly-owned subsidiary of the Company as the parent |
Zibo Lurui Fine Chemical Co., Ltd. (hereinafter referred to as Lurui Chemical) | Majority-owned subsidiary of the Company as the parent |
Zibo Lujia Property Management Co. , Ltd. (hereinafter referred to as Lujia Property) | Wholly-owned subsidiary of the Company as the parent |
Hong Kong Tung Hoi International Company Limited | Wholly-owned subsidiary of the Company as the parent |
(hereinafter called Tung Hoi International) | |
Zibo Chengshun Hosiery Co., Ltd. (hereinafter referred to as Chengshun Hosiery) | Majority-owned subsidiary of the Company as the parent |
Zibo Chengshun Economic and Trade Co., Ltd. (hereinafter referred to as Chengshun Economic and Trade) | Wholly-owned subsidiary of the Company as the parent |
Chengshun Petrochemical (Zhejiang Zhoushan) Co., Ltd. (hereinafter referred to as Chengshun Petrochemical) | Wholly-owned subsidiary of the Company as the parent |
Zibo Lucheng Petrochemical Sales Co., Ltd. (hereinafter referred to as Lucheng Petrochemical) | Wholly-owned subsidiary of the Company as the parent |
Shanghai Hengjiu Textile New Materials Co., Ltd. | Majority-owned subsidiary of the Company as the parent |
Lumei New Materials Co., Ltd. | Majority-owned subsidy of wholly-owned subsidiary of the Company as the parent |
Unikorn Nonwovens Co., Ltd. | Wholly-owned subsidiary of wholly-owned subsidiary of the Company as the parent |
Zibo Lumei Economic and Trade Co., Ltd. | Wholly-owned subsidiary of the Company as the parent |
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
Related party | Content | Reporting Period | The approval trade credit | Whether exceed trade credit or not | Same period of last year |
Lucheng Textile | Towels, socks, oils, supermarket retail, welfare, electronics, computer equipment, computer supplies, paper cores, etc. | 6,177,619.85 | |||
Limin Purified Water | Recycled water, sewage treatment, materials | 9,822,323.88 | 11,800,000.00 | No | 11,140,353.11 |
Chengshun Petroleum | Gas | No | 22,728,978.86 | ||
Lurui Chemical | Auxiliaries | 36,593,447.10 | 44,000,000.00 | No | 57,285,041.23 |
Chengshun Hosiery | Socks, paper cores, hose processing, etc. | 3,909,785.92 | 4,700,000.00 | No | |
Chengshun Economic and Trade | Supermarket retail | 1,796,605.97 | 2,200,000.00 | No |
Lucheng Petrochemical | Oils | 844,180.74 | 1,020,000.00 | No | |
Chengshun Petrochemical | Gas and Oils | 16,749,727.55 | 20,100,000.00 | No | |
Unikorn Nonwovens | Clothes | 6,187.61 | No |
Information of sales of goods and provision of labor service
Unit: RMB
Related party | Content | Reporting Period | Same period of last year |
Lucheng Textile | Sales of materials, electricity, running water, draught water, gas etc. | 56,265.15 | |
Lucheng Textile | Sales of grey yarn, dyed yarn, garment etc. | 252,090.27 | |
Chengshun Hosiery | Materials, electricity, running water, heating, steam | 64,659.60 | |
Chengshun Hosiery | Sales of grey yarn, dyed yarn | 186,772.14 | |
Chengshun Economic and Trade | Materials, electricity, running water | 98,220.46 | |
Lucheng Petrochemical | Electricity, materials | 11,892.89 | |
Limin Purified Water | Sales of materials, garment, electricity etc. | 750,467.47 | 865,399.14 |
Lurui Fine Chemical | Sales of garment, water & electricity, lunch components and materials | 27,177.52 | 155,742.15 |
Lujia Property | Sales of materials and recycled water | 95,382.35 | 45,794.67 |
Unikorn Nonwovens | Materials and table money | 2,563.14 | |
Luqun Property | Materials | 463.68 | |
Luqun Property | Heating utilities | 1,720,174.32 |
(2) Information on Related-party Lease
The Company was lessor:
Unit: RMB
Name of lessee | Category of leased assets | The lease income confirmed in the Reporting Period | The lease income confirmed in the same period of last year |
Zibo Lucheng Textile Investment Co., Ltd. | Houses and buildings | 36,108.00 | |
Chengshun Economic and Trade | Houses and buildings | 36,108.00 | |
Lurui Fine Chemical | Houses and buildings | 4,091.82 | 4,091.82 |
The Company was lessee:
Unit: RMB
Name of lessor | Category of leased assets | The lease fee confirmed in the Reporting Period | The lease fee confirmed in the same period of last year |
Zibo Lucheng Textile Investment Co., Ltd. | Rent of land | 1,807,428.60 | 1,807,428.60 |
Zibo Lucheng Textile Investment Co., Ltd. | Rent of gas station | 116,571.42 | 250,857.12 |
Zibo Lucheng Textile Investment Co., Ltd. | Rent of buildings | 5,511,114.30 | 5,511,114.30 |
Luqun Property | Rent of land and buildings | 985,714.26 | 697,142.82 |
(3) Information on Inter-bank Lending of Capital of Related Parties
Unit: RMB
Related party | Amount | Start date | End date | Note |
Borrowing | ||||
Lucheng Textile | 10,000,000.00 | 16 January 2020 | 9 March 2020 | |
Lucheng Textile | 20,000,000.00 | 16 January 2020 | 12 March 2020 | |
Lucheng Textile | 20,000,000.00 | 16 January 2020 | 16 March 2020 | |
Lucheng Textile | 40,000,000.00 | 16 January 2020 | 24 March 2020 | |
Lucheng Textile | 40,000,000.00 | 16 January 2020 | 26 March 2020 | |
Lucheng Textile | 30,000,000.00 | 16 January 2020 | 8 April 2020 | |
Lending |
6. Accounts Receivable and Payable of Related Party
(1) Accounts Payable
Unit: RMB
Item | Related party | Ending carrying amount | Beginning carrying amount |
Accounts payable | Chengshun Economic and Trade | 2,794.00 | |
Accounts payable | Lurui Fine Chemical | 806,304.80 | |
Contract liabilities | Luqun Property | 708,147.44 | |
Contract liabilities | Chengshun Economic and Trade | 784.00 |
XII. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
Commitments signed but hasn’t been recognized in financial statements | 2020.6.30 | 2019.12.31 |
Commitment on constructing and purchasing long-lived assets (RMB’0,000) | 18,487.40 | 19,386.82 |
2. Contingency
(1) Significant Contingency on Balance Sheet Date
(1) Contingent liabilities formed by the debt guarantee provided to other entities and the financial impactAs of 30 June 2020, the Company provided guarantee to loans of the following entities:
Name | Item | Currency | Foreign currency amount | Amount converted to RMB | Start date | Due date | Remark |
I. Subsidiary | |||||||
Lu Thai (Vietnam) | Short-term borrowings | Dong | 21,820,795,310.00 | 6,655,012.12 | 2020/1/3 | 2020/7/3 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 6,176,783,618.00 | 1,883,825.50 | 2020/1/15 | 2020/7/15 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 19,962,139,440.00 | 6,088,150.32 | 2020/1/20 | 2020/7/20 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 4,573,845,114.00 | 1,394,953.53 | 2020/1/20 | 2020/7/20 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 5,439,698,125.00 | 1,659,025.60 | 2020/1/21 | 2020/7/21 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 14,570,655,511 | 4,443,829.34 | 2020/2/11 | 2020/8/11 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 10,986,788,576 | 3,350,804.16 | 2020/2/19 | 2020/8/19 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 4,377,113,788 | 1,334,953.42 | 2020/2/25 | 2020/8/25 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 6,115,007,882 | 1,864,984.83 | 2020/2/26 | 2020/8/26 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 22,011,511,752 | 6,713,177.86 | 2020/3/5 | 2020/9/5 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 7,449,117,623 | 2,271,868.12 | 2020/3/19 | 2020/9/19 |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 4,398,499,302 | 1,341,475.69 | 2020/3/24 | 2020/9/24 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 7,642,691,864 | 2,330,905.34 | 2020/3/24 | 2020/9/24 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 23,515,375,245 | 7,171,833.39 | 2020/4/6 | 2020/10/6 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 12,019,783,770 | 3,665,852.04 | 2020/4/7 | 2020/10/7 | |
Lu Thai (Vietnam) | Short-term borrowings | Dong | 23,555,323,880 | 7,184,017.14 | 2020/5/8 | 2020/11/8 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,052,074.08 | 7,448,158.45 | 2020/1/17 | 2020/7/15 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 337,443.80 | 2,388,933.38 | 2020/2/4 | 2020/8/2 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 859,256.80 | 6,083,108.52 | 2020/2/6 | 2020/8/4 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,184,915.24 | 8,388,607.44 | 2020/2/24 | 2020/8/22 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,774,709.07 | 12,564,052.86 | 2020/2/27 | 2020/8/25 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 34,858.37 | 246,779.83 | 2020/3/4 | 2020/8/31 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 917,605.42 | 6,496,187.57 | 2020/3/6 | 2020/9/2 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,495,446.52 | 10,587,013.64 | 2020/3/31 | 2020/9/27 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 606,091.37 | 4,290,823.85 | 2020/4/14 | 2020/10/11 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,314,673.55 | 9,307,231.40 | 2020/5/6 | 2020/11/2 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 574,465.01 | 4,066,925.04 | 2020/6/18 | 2020/12/15 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 10,000,000.00 | 70,795,000.00 | 2019/7/8 | 2020/7/6 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 8,000,000.00 | 56,636,000.00 | 2019/8/19 | 2020/8/17 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 7,500,000.00 | 53,096,250.00 | 2019/8/28 | 2020/8/26 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 3,000,000.00 | 21,238,500.00 | 2019/9/24 | 2020/9/22 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 5,000,000.00 | 35,397,500.00 | 2020/3/9 | 2021/3/8 |
Lu Thai (Vietnam) | Short-term borrowings | USD | 3,000,000.00 | 21,238,500.00 | 2020/3/13 | 2020/9/11 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 2,000,000.00 | 14,159,000.00 | 2020/6/24 | 2020/12/22 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 10,000,000.00 | 70,795,000.00 | 2020/6/26 | 2020/12/24 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 2,000,000.00 | 14,159,000.00 | 2020/3/12 | 2020/9/14 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,428,322.58 | 10,111,809.71 | 2020/4/16 | 2020/10/16 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 263,451.94 | 1,865,108.01 | 2020/4/23 | 2020/10/23 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 198,444.50 | 1,404,887.84 | 2020/4/24 | 2020/10/24 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 816,660.35 | 5,781,546.95 | 2020/4/27 | 2020/10/27 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 316,614.44 | 2,241,471.93 | 2020/5/5 | 2020/11/5 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 608,779.44 | 4,309,854.05 | 2020/5/15 | 2020/11/15 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,435,131.73 | 10,160,015.08 | 2020/2/14 | 2020/8/12 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 2,157,057.73 | 15,270,890.20 | 2020/3/2 | 2020/8/29 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 1,401,178.90 | 9,919,646.02 | 2020/5/28 | 2020/11/24 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 290,695.81 | 2,057,980.99 | 2020/6/5 | 2020/12/2 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 573,641.66 | 4,061,096.13 | 2020/6/25 | 2020/12/22 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 285,540.84 | 2,021,486.38 | 2020/3/9 | 2020/9/5 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 203,005.65 | 1,437,178.50 | 2020/3/13 | 2020/9/9 | |
Lu Thai (Vietnam) | Short-term borrowings | USD | 5,314,478.07 | 37,623,847.50 | 2020/5/5 | 2021/5/5 | |
Lu Thai Tan Chau | Short-term borrowings | Dong | 5,943,610,398.00 | 1,812,711.21 | 2020/5/6 | 2020/11/2 | |
Lu Thai Tan Chau | Short-term borrowings | Dong | 5,692,613,415.00 | 1,736,160.93 | 2020/5/7 | 2020/11/3 | |
Lu Thai Tan Chau | Short-term borrowings | Dong | 8,247,906,497.00 | 2,515,486.59 | 2020/6/15 | 2020/12/12 |
Lu Thai Tan Chau | Short-term borrowings | USD | 1,360,796.50 | 9,633,758.82 | 2020/5/6 | 2021/5/6 | |
Lu Thai Tan Chau | Short-term borrowings | USD | 245,277.96 | 1,736,445.32 | 2020/6/4 | 2020/12/1 | |
Lu Thai Tan Chau | Short-term borrowings | USD | 102,655.00 | 726,746.08 | 2020/6/23 | 2020/12/20 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 244,800.00 | 1,733,061.60 | 2019/9/30 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 2,436,000.00 | 17,245,662.00 | 2019/9/30 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 285,296.40 | 2,019,755.86 | 2019/10/3 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 160,650.00 | 1,137,321.68 | 2019/10/3 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 194,256.00 | 1,375,235.35 | 2019/10/7 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 51,840.00 | 367,001.28 | 2019/10/11 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 171,720.00 | 1,215,691.74 | 2019/10/17 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 189,802.91 | 1,343,709.70 | 2019/10/21 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 48,030.00 | 340,028.39 | 2019/10/21 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 7,560.00 | 53,521.02 | 2019/10/21 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 104,024.05 | 736,438.26 | 2019/11/7 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 109,656.67 | 776,314.40 | 2019/11/7 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 2,507,548.87 | 17,752,192.23 | 2019/11/20 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 461,217.60 | 3,265,190.00 | 2019/11/20 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 128,520.00 | 909,857.34 | 2019/12/4 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 2,588,953.33 | 18,328,495.10 | 2019/12/5 | 2021/8/30 | |
Lu Thai Tan Chau | Long-term borrowings | USD | 310,124.17 | 2,195,524.05 | 2019/12/17 | 2021/8/30 |
Total | 685,960,368.62 |
(2) Explanation shall be given even if there is no significant contingency for the Company to discloseThere was no significant contingency in the Company to disclose.XIII. Events after Balance Sheet Date
1. Notes to Other Events after Balance Sheet Date
On 13 August 2020, the 16
th
Meeting of the 9
thBoard of Directors of the Company reviewed and approved the Proposal on Sales ofEquity Interests in Xinjiang Lu Thai Fengshou Cotton Industry Co., Ltd. The Company will sell all equity interest in Xinjiang LuThai held it to Mr. Li Jingquan at the price of RMB195.86 million. After the transfer, the Company will no longer hold equity interestof Xinjiang Lu Thai. On the same date, the Company signed the Transfer Agreement of Equity Interest in Xinjiang Lu Thai FengshouCotton Industry Co., Ltd. with Mr. Li Jingquan.XIV. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Listed by Category
Unit: RMB
Category | Ending balance | Beginning balance | ||||||||
Carrying amount | Bad debt provision | Carrying value | Carrying amount | Bad debt provision | Carrying value | |||||
Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
Of which: | ||||||||||
Accounts receivable withdrawal of bad debt provision of by group | 286,056,872.94 | 100.00% | 21,076,427.28 | 7.37% | 264,980,445.66 | 439,725,290.44 | 100.00% | 22,125,772.36 | 5.03% | 417,599,518.08 |
Of which: | ||||||||||
Group 1: Undue accounts (credit insurance insured) | 36,312,575.11 | 12.69% | 381,282.04 | 1.05% | 35,931,293.07 | 87,886,175.56 | 19.99% | 922,804.84 | 1.05% | 86,963,370.72 |
Group 2: Undue accounts (no credit insurance) | 163,120,806.29 | 57.02% | 8,156,040.32 | 5.00% | 154,964,765.97 | 312,932,456.44 | 71.16% | 15,646,622.82 | 5.00% | 297,285,833.62 |
Group 3: Overdue accounts (credit insurance insured) | 50,529,410.66 | 17.67% | 5,406,646.94 | 10.70% | 45,122,763.72 | 26,018,416.33 | 5.92% | 2,783,970.55 | 10.70% | 23,234,445.78 |
Group 4: Overdue accounts (no credit insurance) | 36,094,080.88 | 12.62% | 7,132,457.98 | 19.76% | 28,961,622.90 | 12,888,242.11 | 2.93% | 2,772,374.15 | 21.51% | 10,115,867.96 |
Total | 286,056,872.94 | 100.00% | 21,076,427.28 | 7.37% | 264,980,445.66 | 439,725,290.44 | 100.00% | 22,125,772.36 | 5.03% | 417,599,518.08 |
Withdrawal of bad debt provision by single item: RMB0.00.Withdrawal of bad debt provision by group:
Unit: RMB
Name | Ending balance | ||
Carrying amount | Bad debt provision | Withdrawal proportion | |
Group 1: Undue accounts (credit insurance insured) | 36,312,575.11 | 381,282.04 | 1.05% |
Group 2: Undue accounts (no credit insurance) | 163,120,806.29 | 8,156,040.32 | 5.00% |
Group 3: Overdue accounts (credit insurance insured) | 50,529,410.66 | 5,406,646.94 | 10.70% |
Group 4: Overdue accounts (no credit insurance) | 36,094,080.88 | 7,132,457.98 | 19.76% |
Total | 286,056,872.94 | 21,076,427.28 | -- |
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general modeof expected credit loss to withdraw bad debt provision of accounts receivable.
√ Applicable □ Not applicable
Disclosure by aging
Unit: RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 279,555,324.65 |
1 to 2 years | 6,167,185.37 |
2 to 3 years | 0.00 |
Over 3 years | 334,362.92 |
3 to 4 years | 334,362.92 |
Total | 286,056,872.94 |
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Category | Beginning balance | Changes in the Reporting Period | Ending balance | |||
Withdrawal | Reversal or | Verification | Other |
recovery | ||||||
Bad debt provision | 22,125,772.36 | -1,049,345.08 | 21,076,427.28 | |||
Total | 22,125,772.36 | -1,049,345.08 | 21,076,427.28 |
(3) Top 5 of the Ending Balance of the Accounts Receivable Collected according to Arrears Party
Unit: RMB
Name of entity | Ending balance | Proportion to total ending balance of accounts receivable | Ending balance of bad debt provision |
A | 28,492,484.05 | 9.96% | 2,081,690.53 |
B | 27,904,570.30 | 9.75% | 4,058,695.57 |
C | 16,934,300.99 | 5.92% | 846,715.05 |
D | 8,707,125.10 | 3.04% | 435,356.26 |
E | 7,382,558.18 | 2.58% | 694,234.44 |
Total | 89,421,038.62 | 31.25% |
2. Other Receivables
Unit: RMB
Item | Ending balance | Beginning balance |
Other receivables | 981,462,785.76 | 838,523,449.52 |
Total | 981,462,785.76 | 838,523,449.52 |
(1) Other Receivables
1) Other Receivables Classified by Account Nature
Unit: RMB
Nature | Ending carrying amount | Beginning carrying amount |
Intercourse funds | 974,395,331.33 | 820,813,180.93 |
Export rebates | 9,928,747.48 | |
Payment on behalf | 1,272,190.64 | 7,908,873.14 |
Guarantee deposit and cash deposit | 4,185,003.44 | 3,290,964.29 |
Borrowings and petty cash | 1,130,004.89 | 998,879.96 |
Other | 5,085,023.38 | 248,238.60 |
Total | 986,067,553.68 | 843,188,884.40 |
2) Withdrawal of Bad Debt Provision
Unit: RMB
Bad debt provision | First stage | Second stage | Third stage | Total |
Expected credit loss of the next 12 months | Expected loss in the duration (credit impairment not occurred) | Expected loss in the duration (credit impairment occurred) | ||
Balance of 1 January 2020 | 3,457,541.15 | 1,207,893.73 | 4,665,434.88 | |
Balance of 1 January 2020 in the Current Period | —— | —— | —— | —— |
Withdrawal of the Current Period | -75,997.38 | 15,330.42 | -60,666.96 | |
Balance of 30 June 2020 | 3,381,543.77 | 1,223,224.15 | 4,604,767.92 |
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging | Ending balance |
Within 1 year (including 1 year) | 981,425,199.70 |
1 to 2 years | 366,693.63 |
2 to 3 years | 2,262,046.85 |
Over 3 years | 2,013,613.50 |
4 to 5 years | 300,000.00 |
Over 5 years | 1,713,613.50 |
Total | 986,067,553.68 |
3) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Name of the entity | Nature | Ending balance | Aging | Proportion to ending balance of total other receivables% | Ending balance of bad debt provision |
Lu Thai (Vietnam) | Intercourse funds | 637,155,000.00 | Within 1 year | 64.62% | 1,911,465.00 |
Lufeng Weaving & Dyeing | Intercourse funds | 130,400,946.63 | Within 1 year | 13.22% | 391,202.84 |
Lu Thai Tan Chau | Intercourse funds | 111,148,150.00 | Within 1 year | 11.27% | 333,444.45 |
Lu An Garments | Intercourse funds | 95,573,250.00 | Within 1 | 9.69% | 286,719.75 |
year | |||||
Migrant workers’ wage margin in Zichuan District of Zibo | Migrant workers’ wage margin of infrastructural project | 1,458,593.50 | Over 3 years | 0.15% | 72,929.68 |
Total | -- | 975,735,940.13 | -- | 98.95% | 2,995,761.72 |
3. Long-term Equity Investment
Unit: RMB
Item | Ending balance | Beginning balance | ||||
Carrying amount | Depreciation reserve | Carrying value | Carrying amount | Depreciation reserve | Carrying value | |
Investment to subsidiaries | 2,578,715,316.04 | 15,123,011.20 | 2,563,592,304.84 | 2,422,765,316.04 | 15,123,011.20 | 2,407,642,304.84 |
Investment to joint ventures and associated enterprises | 149,646,776.65 | 149,646,776.65 | 103,226,300.00 | 103,226,300.00 | ||
Total | 2,728,362,092.69 | 15,123,011.20 | 2,713,239,081.49 | 2,525,991,616.04 | 15,123,011.20 | 2,510,868,604.84 |
(1) Investment to Subsidiaries
Unit: RMB
Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | |||
Additional investment | Reduced investment | Withdrawal of depreciation reserve | Other | ||||
Xinjiang Luthai | 147,303,034.16 | 147,303,034.16 | |||||
Xinsheng Power | 176,340,737.93 | 176,340,737.93 | |||||
Lufeng Weaving & Dyeing | 529,620,000.00 | 529,620,000.00 | |||||
Luqun Textile | 171,784,550.00 | 171,784,550.00 | |||||
Luthai (Hong Kong) | 128,771,800.00 | 128,771,800.00 | |||||
Shanghai Luthai | 20,000,000.00 | 20,000,000.00 | |||||
Lu Thai (Cambodia) | 108,242,335.38 | 108,242,335.38 | |||||
Lu Thai (America) | 10,209,050.00 | 10,209,050.00 | |||||
Lu Thai | 62,337,238.57 | 62,337,238.57 |
(Burma) | |||||||
Beijing Youxian | 3,717,988.80 | 3,717,988.80 | 15,123,011.20 | ||||
Lu Thai (Vietnam) | 834,936,510.00 | 834,936,510.00 | |||||
Lu An Garments | 64,229,060.00 | 64,229,060.00 | |||||
Lulian New Materials | 150,000,000.00 | 150,000,000.00 | 300,000,000.00 | ||||
Lujia Import & Export | 50,000.00 | 5,950,000.00 | 6,000,000.00 | ||||
Lu Thai Occupational Training School | 100,000.00 | 100,000.00 | |||||
Total | 2,407,642,304.84 | 155,950,000.00 | 2,563,592,304.84 | 15,123,011.20 |
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Investee | Beginning balance (carrying value) | Increase/decrease | Ending balance (carrying value) | Ending balance of depreciation reserve | ||||||||||
Additional investment | Reduced investment | Gains and losses recognized under the equity method | Adjustment of other comprehensive income | Changes of other equity | Cash bonus or profits announced to issue | Withdrawal of impairment provision | Other | |||||||
I. Joint ventures | ||||||||||||||
II. Associated enterprises | ||||||||||||||
Haohong Investment | 103,226,300.00 | -3,709,556.61 | 99,516,743.39 | |||||||||||
Haoying Investment | 50,000,000.00 | 130,033.26 | 50,130,033.26 | |||||||||||
Subtotal | 103,226,300.00 | 50,000,000.00 | -3,579,523.35 | 149,646,776.65 | ||||||||||
Total | 103,226,300.00 | 50,000,000.00 | -3,579,523.35 | 149,646,776.65 |
(3) Other Notes
As of 30 June 2020, the Company didn’t invest to the subsidiary Shanghai Zhinuo.
4. Operating Revenue and Cost of Sales
Unit: RMB
Item | Reporting Period | Same period of last year | ||
Operating revenue | Cost of sales | Operating revenue | Cost of sales | |
Main operations | 1,433,647,769.93 | 1,095,226,641.53 | 2,354,610,227.06 | 1,732,468,733.73 |
Other operations | 90,838,559.05 | 86,137,915.68 | 133,719,339.31 | 115,399,718.04 |
Total | 1,524,486,328.98 | 1,181,364,557.21 | 2,488,329,566.37 | 1,847,868,451.77 |
Information about performance obligations:
NaughtInformation in relation to the transaction price apportioned to the residual contract performance obligation:
As at the end of the Reporting Period, the revenue amount corresponding to the contract performance obligation yet to be fulfilled oryet to be completed under a signed contract is RMB 0.00, including RMB 0.00 expected to be recognized as revenue in the year,RMB 0.00 expected to be recognized as revenue in the year, and RMB 0.00 expected to be recognized as revenue in the year.Other notes:
Naught
5. Investment Income
Unit: RMB
Item | Reporting Period | Same period of last year |
Long-term equity investment income accounted by cost method | 150,000,000.00 | 150,000,000.00 |
Long-term equity investment income accounted by equity method | -3,579,523.35 | 5,083,101.54 |
Investment income from holding of trading financial assets | 1,382,405.99 | |
Investment income from disposal of trading financial assets | 150,939,587.24 | 463,217.37 |
Total | 297,360,063.89 | 156,928,724.90 |
6. Other
XV. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item | Amount | Note |
Gains/losses from the disposal of non-current assets | -503,782.07 | |
Government grants recognized in the current period, except for those acquired in the ordinary | 37,754,439.82 |
course of business or granted at certain quotas or amounts according to the government’s unified standards | ||
Gain/loss from change of fair value of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment in other debt obligations, other than valid hedging related to the Company’s common businesses | 9,613,583.08 | |
Other non-operating income and expense other than the above | -108,188.60 | |
Less: Income tax effects | 7,325,580.81 | |
Non-controlling interests effects | 3,416,485.37 | |
Total | 36,013,986.05 | -- |
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the ExplanatoryAnnouncement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains andLosses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √Not applicable
2. Return on Equity and Earnings Per Share
Profit as of Reporting Period | Weighted average ROE (%) | EPS (Yuan/share) | |
EPS-basic | EPS-diluted | ||
Net profit attributable to ordinary shareholders of the Company | 1.85% | 0.17 | 0.16 |
Net profit attributable to ordinary shareholders of the Company after deduction of non-recurring profit or loss | 1.39% | 0.13 | 0.12 |
3. Other
Part XII Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative, Chief Accountant andFinancial Manager;
2. The originals of all the Company’s announcements and documents disclosed to the public during the ReportingPeriod on Securities Times, Shanghai Securities News, China Securities Journal and Ta Kung Pao.
Chairman of the Board: Liu Zibin
Lu Thai Textile Co., Ltd.
28 August 2020