Lu Thai Textile Co. Ltd. Annual Report 2024
LU THAI TEXTILE CO. LTD.ANNUAL REPORT 2024
April 2025
1Lu Thai Textile Co. Ltd. Annual Report 2024
ANNUAL REPORT 2024
Part I Important Notes Table of Contents and Definitions
The Board of Directors (or the “Board”) the Board of Supervisors 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
of this Report and its summary and shall be jointly and severally liable for any
misrepresentations misleading statements or material omissions therein.Liu Zibin the Company’s legal representative and Zhang Keming Head of Accounting
Affairs and Head of the Accounting Department (equivalent to Accounting Manager) hereby
guarantee that the 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 Report
and its summary.The Company has described in detail in this Report the possible risks. Please refer to the
contents about the major risks and countermeasures in “Prospects” in “Part III ManagementDiscussion and Analysis” of this Report. Securities Times Shanghai Securities News China
Securities Journal Ta Kung Pao and www.cninfo.com.cn have been designated by the
Company for its information disclosure in 2025. And all information about the Company shall
be subject to what’s disclosed by the Company on the aforesaid media. Investors are kindly
reminded to exercise caution when making investment decisions.The Company shall abide by relevant disclosure requirements of the Self-Regulatory
Guidelines of Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information
Disclosure on textile and garment industry.In 2024 the global economic environment was complex and challenging with continued
geopolitical tensions frequent local conflicts and the spread of unilateralism and trade
protectionism. In the face of weak global economic growth and sluggish domestic demand
governments at the central and local levels have continuously introduced and implemented
policies aimed at “protecting people’s livelihoods” and “stimulating consumption.” According
to data from the National Bureau of Statistics China’s GDP in 2024 was RMB134.91 trillion
representing a year-on-year growth of 5%. The Chinese economy continues to move forward
steadily with strong resilience and vitality. On the other hand China has achieved growth in
its import and export business thanks to its important position in the global industrial chain
strong product competitiveness and the continued advancement of the “Belt and Road”
initiative. According to data from the General Administration of Customs China’s total
import and export value of goods in 2024 reached USD6.2 trillion a year-on-year increase of
3.8%. Looking ahead to 2025 there are still numerous risks and uncertainties related to
global geopolitical conflicts inflation rebound and the monetary policies of various central
banks. Export-oriented textile enterprises will continue to adhere to an innovation-driven
development strategy and a globalised industrial layout deepen structural reforms optimise
asset structures and continuously enhance their ability to cope with geopolitical risks and
economic structural transformation in order to achieve sustainable and high-quality
development. For details please refer to Part III Management Discussion and Analysis.The profit distribution plan approved by the Board of Directors is as follows: Based on a total
of 817306010 shares a cash dividend of RMB1.00(including tax) will be distributed for every
ten shares to all shareholders with no bonus shares (including tax) to be issued and no
2Lu Thai Textile Co. Ltd. Annual Report 2024
capitalisation of reserves into share capital.This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions the Chinese versions
shall prevail.
3Lu Thai Textile Co. Ltd. Annual Report 2024
Table of Contents
Part I Important Notes Table of Contents and Defin....2
Part II Corporate Information and Key Financial In... 7
Part III Management Discussion and Analysis ........ 11
Part IV Corporate Governance ....................... 36
Part V Environmental and Social Responsibility ..... 64
Part VI Significant Events ..........................68
Part VII Share Changes and Shareholder Information...77
Part VIII Preference Shares ........................ 86
Part IX Bonds .......................................86
Part X Financial Statements ........................ 90
4Lu Thai Textile Co. Ltd. Annual Report 2024
Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative Chief
Accountant and Financial Manager;
2. The original Independent Auditor’s Report stamped by the CPA firm as well as signed and
stamped by the relevant certified public accountants; and
3. The originals of all the Company’s announcements and documents disclosed to the public during
the Reporting Period on Securities Times Shanghai Securities News China Securities Journal and
Ta Kung Pao.
5Lu Thai Textile Co. Ltd. Annual Report 2024
Definitions
Term Refers to Definition
The “Company” “LTTC” “Issuer”
or “we” Refers to Lu Thai Textile Co. Ltd.Board of Directors Refers to The Board of Directors of Lu ThaiTextile Co. Ltd.Board of Supervisors Refers to The Board of Supervisors of Lu ThaiTextile Co. Ltd.CSRC Refers to China Securities RegulatoryCommission
Expressed in the Chinese currency of
RMB RMB’0000 Refers to Renminbi expressed in ten thousand
Renminbi
Company Law Refers to Company Law of the People’sRepublic of China
Securities Law Refers to Securities Law of the People’sRepublic of China
“Reporting Period” or “CurrentPeriod” Refers to 1 January 2024 to 31 December 2024
6Lu Thai Textile Co. Ltd. Annual Report 2024
Part II Corporate Information and Key Financial Information
I. Corporate Information
Stock name LTTC LTTC-B Stock code 000726 200726
Previous stock name (if any) N/A
Stock exchange for stocklisting Shenzhen Stock Exchange (“SZSE)Company name in Chinese 鲁泰纺织股份有限公司
Abbr. 鲁泰纺织
Company name in English (if
any) LU THAI TEXTILE CO. LTD
Abbr. (if any) LTTC
Legal representative Liu Zibin
Registered address 61 Luthai Boulevard High-tech Development Zone Zibo City Shandong ProvinceP.R.China
Zip code 255086
Past changes of registered 11 Mingbo Road Zibo High-tech Development Zone Shandong Province
address P.R.China
Office address 81 Songling East Road Zichuan District Zibo City Shandong Province P.R.China
Zip code 255100
Company website www.lttc.com.cn
Email address lttc@lttc.com.cn
II. Contact Information
Board Secretary Securities Representative
Name Zheng Weiyin Li Kun
81 Songling East Road Zichuan 81 Songling East Road Zichuan
Address District Zibo City Shandong District Zibo City Shandong
Province P.R.China Province P.R.China
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805 0533-5418805
Email address wyzheng@lttc.com.cn likun@lttc.com.cn
III. Media for Information Disclosure and Place Where This Report Is Lodged
Stock exchange website where this Report is
disclosed Shenzhen Stock Exchange: http://www.szse.cn
Media and website where this Report is Securities Times Shanghai Securities News China Securities
disclosed Journal Ta Kung Pao and www.cninfo.com.cn
Place where this Report is lodged Securities Department of the Company
IV. Change to Company Registered Information
Unified social credit code 91370300613281175K
Change to principal activity of the Company since going
public (if any) No change
Every change of controlling shareholder since
incorporation (if any) No change
V. Other Information
The independent audit firm hired by the Company:
Name Grant Thornton Zhitong Certified Public AccountantsLLP
Office address 5/F Scitech Palace 22 Jianguomen Wai AvenueChaoyang District Beijing
Accountants writing signatures He Feng Cui Xiaoli
7Lu Thai Textile Co. Ltd. Annual Report 2024
The independent sponsor hired by the Company to exercise constant supervision over the Company
in the Reporting Period:
□ Applicable□ Not applicable
The independent financial advisor hired by the Company to exercise constant supervision over the
Company in the Reporting Period:
□ Applicable□ Not applicable
VI. Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes□ No
2024 2023 2024-Over-2023Change (%) 2022
Operating revenue (RMB) 6090615025.20 5961477252.98 2.17% 6938342135.90
Net profit attributable to the
listed company’s 410321398.17 403444254.42 1.70% 963864819.43
shareholders (RMB)
Net profit attributable to the
listed company’s
shareholders before 482338741.63 386135437.00 24.91% 795473953.21
exceptional gains and losses
(RMB)
Net cash generated
from/used in operating 1244212151.94 854864537.42 45.54% 1422310774.26
activities (RMB)
EPS-basic 0.50 0.47 6.38% 1.10
EPS-diluted 0.47 0.42 11.90% 0.95
Weighted average ROE (%) 4.39% 4.40% -0.01% 11.31%
Change of 31
31 December 2024 31 December 2023 December 2024over 31 December 31 December 2022
2023(%)
Total assets (RMB) 13929715649.21 13430286222.94 3.72% 13351097602.03
Equity attributable to the
listed company’s 9438728389.28 9230806905.80 2.25% 9014156872.71
shareholders (RMB)
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s
shareholders before and after exceptional gains and losses was negative for the last three accounting
years and the latest independent auditor’s report indicated that there was uncertainty about the
Company’s ability to continue as a going concern.□ Yes□ No
Indicate by tick mark whether the lower of the net profit attributable to the listed company’s
shareholders before and after exceptional gains and losses was negative.□ Yes□ No
8Lu Thai Textile Co. Ltd. Annual Report 2024
VII. Accounting Data Differences under Chinese Accounting Standards (CAS) and
International Accounting Standards (IAS) and Foreign Accounting Standards
1. Net Profit and Equity under IAS and CAS
□ Applicable□ Not applicable
No difference for the Reporting Period.
2. Net Profit and Equity under Foreign Accounting Standards and CAS
□ Applicable□ Not applicable
No difference for the Reporting Period.VIII. Key Financial Information by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 1382655063.47 1447833622.14 1570583102.90 1689543236.69
Net profit attributable to the
listed company’s shareholders 68241726.33 101318243.21 118293394.86 122468033.77
Net profit attributable to the
listed company’s shareholders
before exceptional gains and 122504699.15 141226585.40 87100142.55 131507314.53
losses
Net cash flow from operating
activities 93395090.36 358026562.33 309665213.19 483125286.06
Indicate by tick mark whether any of the quarterly financial data in the table above or their
summations differs materially from what have been disclosed in the Company’s quarterly or interim
reports.□ Yes□ No
IX. Exceptional Gains and Losses
□ Applicable □ Not applicable
Unit: RMB
Item 2024 2023 2022 Note
Gain or loss on disposal of non-current assets
(inclusive of impairment allowance write-offs) -5481717.67 -9741769.37 -228367.44
Government grants recognised in profit or loss for the
current period (except for government grants closely
related to the Company’s normal operating business
in compliance with national policies and in accordance 34326278.48 45294185.95 50298092.20
with defined criteria and having a continuous impact
on the Company’s profit or loss)
Gains and losses arising from changes in fair value of
financial assets and financial liabilities held by non-
financial enterprises and gains and losses arising from
the disposal of financial assets and financial liabilities -116104499.14 -18190072.86 154877757.70
other than effective hedging business related to the
Company’s normal operating business
Reversal of provision for impairment of receivables
separately tested for impairment 1349345.50 163992.17
9Lu Thai Textile Co. Ltd. Annual Report 2024
Other non-operating income and expense other than
the above 3383103.88 4819447.10 -1810393.39
Less: Income tax effects -11186738.74 4629001.56 33015346.77
Non-controlling interests effects (after tax) 676593.25 407964.01 1730876.08
Total -72017343.46 17308817.42 168390866.22 --
Details of other profit and loss items in line with the definition of non-recurring gains and losses:
□ Applicable□ Not applicable
There are no other profit and loss items in line with the definition of non-recurring gains and losses
in the Company.Note to define the non-recurring profit and loss items listed in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring
Gains and Losses as recurring profit and loss items.□ Applicable□ Not applicable
No such cases for the Reporting Period.
10Lu Thai Textile Co. Ltd. Annual Report 2024
Part III Management Discussion and Analysis
I. Industry Overview for the Reporting Period
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.In 2024 China’s textile industry demonstrated strong development resilience with the overall
economic performance of the industry remaining stable. Key operating indicators showed recovery
and textile and apparel exports achieved steady growth. According to statistics from the General
Administration of Customs China’s textile and apparel export value in 2024 was USD301.1 billion
marking a year-on-year increase of 2.8%. Of this textile exports amounted to USD141.96 billion a
year-on-year increase of 5.7% while apparel exports totalled USD159.14 billion reflecting a year-
on-year increase of 0.3%. The textile industry has developed into a highly globalised and fully
market-oriented sector. In the face of the current complex and challenging market situation the
impact of geopolitics and insufficient effective demand China’s textile industry will leverage its
complete industrial chain and efficient supply chain capabilities. By strengthening systematic
research on technological trends market changes and global developments the industry will strive
to find the optimal balance in areas such as scale and structure speed and quality development and
security international and domestic markets resources and the environment as well as competition
and cooperation. This will ensure the industry’s continued green fashionable and sustainable
development.II. Principal Activity of the Company in the Reporting Period
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.In 2024 amidst the severe and complex external situation China’s textile industry remained
committed to deepening its transformation and upgrading continuously enhancing its development
resilience. In response to the changes in the international trade landscape and insufficient effective
demand the Company adhered to the philosophy of “customer-centricity” focusing on the
domestic market while expanding into overseas markets. The Company continued to advance the
strategies of “Improve Quality and Efficiency” and “Overall Internationalization” while adjusting
its structure and building capacity. Efforts were intensified to explore new markets and new
overseas projects were pushed forward for rapid commissioning and stable operation. Focusing on
core businesses the Company increased investment in research and development innovation drove
the upgrading and iteration of products and services and ensured that various management and
operational tasks were carried out in an orderly manner.During the Reporting Period the Company achieved total operating revenue of RMB6091 million
operating profit of RMB467 million net profit attributable to the parent company of RMB410
million and net profit attributable to the parent company after deducting non-recurring gains and
losses of RMB482 million. These figures represent year-on-year growth of 2.17% 7.80% 1.70%
and 24.91% respectively. No changes occurred to the Company’s principal operations primary
products business models or the primary factors driving the Company’s growth in the Reporting
Period.During the Reporting Period the Company was successively selected as the “Chinese Textile andApparel Brand of 2024 with Competitive Edge” by the China National Textile and Apparel Council
named as a “Sustained Innovation Unit” for the top ten categories of textile innovation products by
the China Textile Information Centre and recognised by the Shandong Textile and Apparel
11Lu Thai Textile Co. Ltd. Annual Report 2024
Association as the “Digital Transformation Innovation Unit” for the Shandong textile and apparel
industry in 2023. During the reporting period the Company mainly focused on the following
aspects:
i. Continuously improve the Lu Thai Production System (LTPS) and deeply promote cost reduction
and efficiency enhancement
The Company deeply implemented the excellent performance management mode continuously
improved the LTPS and promoted lean production. By implementing management and technical
improvements star-level factory evaluations technical competitions and a series of team-building
activities the Company aimed to stimulate employee enthusiasm and creativity. These efforts
contributed to the continuous enhancement of management capabilities and levels in areas such as
quality control production operations and risk management. The Company actively responded to
market changes continuously strengthened internal management adhered to high-quality
development and consistently maintained its leading position in the cotton textile industry. During
the Reporting Period the Company achieved its expected goals in areas such as the stable operation
of overseas production bases new product research and development expansion into new markets
capacity optimisation and the stability of its workforce.ii. Expand the global marketing network and improve the overall production solution capabilities
The Company built a global marketing network centred around the Group’s headquarters actively
explored new markets and new customers focused on the promotion of core products emphasised
the development of leisure categories and strengthened cost expense and risk control. The
Company advanced its “key account strategy” and leveraged the advantages of a globalised
industrial layout and a vertically integrated production chain to continuously improve its
cooperation with strategic customers and create a win-win development model. The Company
integrated internal and external resources to enhance its capabilities in producing and delivering
knitted fabrics functional fabrics and new categories of apparel products thereby creating a
competitive advantage through complementary synergy across its diverse product categories. The
Company focused on maintaining and servicing key customers improved the vertical supply chain
cooperation system for fabrics and apparel and continuously promoted the development of
integrated domestic and international fabric and apparel service capabilities thereby providing
customers with products and services that offer greater commercial value.iii. Focus on customer value creation and advance R&D innovation and cooperation
By leveraging the advantages of its entire industry chain and “domestic + overseas” production
layout the Company continued to deepen its market-oriented and performance-driven product
development mechanism. It strengthened joint development with upstream and downstream
industry partners and research institutions and focused on product functionality enhancement
green sustainability and processing technology research to promote the implementation of fabric
leisurewear and functional-related research projects. During the Reporting Period the Company
was granted 20 national invention patents participated in the formulation or revision of nineindustry standards and successfully passed the mid-term and annual assessments for the “14thFive-Year” National Key R&D Project and Key R&D Project of Shandong Province (Major
Innovation Projects). Several research and development achievements received awards. The
Company and its majority-owned subsidiaries’ projects Key Technologies for Efficient Green
Fashion Online Dyeing and Their Industrialisation and Key Technologies and Applications of
Functional Fabrics Based on Interface Chemistry and Microstructure Regulation were awarded
the First Prize for Scientific and Technological Progress by the China National Textile & Apparel
Council. The project Key Technologies and Industrialisation of Thermal and Humidity Comfort
Functional Textiles Structure Design and Manufacturing received the Second Prize for Scientific
12Lu Thai Textile Co. Ltd. Annual Report 2024
and Technological Progress from the same council. Additionally the fabric design work Green
Wonderland won the Gold Award at the China International Fabric Design Competition.iv. Strengthen corporate culture to enhance competitive awareness and operational capabilities
The Company implemented a corporate culture enhancement project to further unify thinking
consolidate strength and motivate employees thereby improving team capabilities. The Company
accelerated the development of an international talent pool improved the training and management
of key position personnel and actively responded to changes in the international political andeconomic landscape as well as market challenges. Adhering to the principle of “pursuing excellenceintegrity and win-win cooperation” the Company was committed to a sustainable development
approach of “green low-carbon and intelligent manufacturing.” It strived to transform itself into a
global green fashion textile and apparel industry group with leading fabrics as its core.III. Core Competitiveness Analysis
1. The Company has a comprehensive vertical industrial chain and internationalized layout. It
possesses the whole industrial chain integrating spinning bleaching and dyeing neatening testing
and garment making as well as excellent quality control capabilities through various links of the
production of high-end yarn-dyed fabrics. The Company has established overseas production bases
design institutions and market service agencies enabling it to integrate and allocate international
resources. This leverages the advantages of its global industrial layout and highlights its leading
position in the production of yarn-dyed fabrics.
2. The Company has better integrated management capability and high-level management system
architecture. Since 1995 the Company has successively passed the certification of ISO9001 quality
management system ISO14001 environmental management system ISO45001 Occupation Health
Safety Management System SA8000 Social Responsibility Management System The Worldwide
Responsible Apparel Production Standard (WRAP) Sustainable Textile Production (STeP) Global
Organic Textile Standard (GOTS) Global Recycle Standard (GRS) HIGG (FEM and FSLM) and
China National Accreditation Service for Conformity Assessment (CNAS) and realized the
internationalization standardization and normalization of the corporate management. In order to
make outstanding achievement in its operating management better improve the Company’s
business performance and capabilities the Company has introduced the GB/T19580 Criteria for
Performance Excellence step by step set up the “big quality” system promoted the management
innovation and guaranteed the management quality.
3. The Company establishes its high-level technical cooperation platform by virtue of strong R&D
capability. The Company always insists on the independent innovation by relying on technological
platforms such as the National Enterprise Technical Centre National Industrial Design Centre
National Post-doctoral Scientific Research Station and Shandong Provincial Engineering
Technology Research Centre. It has established long-term technical cooperation and joint product
development with research institutions universities strategic customers and key suppliers. The
Company focuses on both frontier technology reserves and application technology innovation
continuously strengthening new product development driven by commercial value realisation. It
gradually enhances its capabilities in technological research and product integration development
consistently contributing more green low-carbon and sustainable new technologies and high-
quality products to the industry thus achieving low-carbon green and circular development.
13Lu Thai Textile Co. Ltd. Annual Report 2024
IV. Core Business Analysis
1. Overview
During the Reporting Period the Company recorded operating revenue of RMB6091 million (a
2.17% year-on-year increase); cost of sales of RMB4644 million (a 1.14% year-on-year increase)
selling expense of RMB151 million (a 1.72% year-on-year increase) and administrative expense of
RMB344 million (a 9.94% year-on-year decrease); research and development expense of RMB207
million (a 13.74% year-on-year decrease); and net cash generated from operating activities of
RMB1244 million (a 45.54% year-on-year increase).
2. Revenue and Cost Analysis
(1) Breakdown of Operating Revenue
Unit: RMB
20242023
As % of Total As % of Total Year-on-
Amount Operating Revenue Amount Operating Revenue Year Change
(%)(%)
Total 6090615025.20 100% 5961477252.98 100% 2.17%
By operating division
Textile and
apparel 5707337704.95 93.71% 5554873179.03 93.18% 2.74%
Electricity and
steam 231572771.61 3.80% 214716930.11 3.60% 7.85%
Other 151704548.64 2.49% 191887143.84 3.22% -20.94%
By product category
Fabric products 4335423361.05 71.18% 4224792352.66 70.87% 2.62%
Apparel 1371914343.90 22.53% 1330080826.37 22.31% 3.15%
Electricity and
steam 231572771.61 3.80% 214716930.11 3.60% 7.85%
Other 151704548.64 2.49% 191887143.84 3.22% -20.94%
By operating segment
Japan And
South Korea 347853952.05 5.71% 363082297.41 6.09% -4.19%
Southeast Asia 1828264195.92 30.02% 1691776529.18 28.38% 8.07%
Europe and
America 870289906.47 14.29% 933632800.12 15.66% -6.78%
Other 769089924.78 12.63% 639996479.08 10.74% 20.17%
Mainland China 2275117045.98 37.35% 2332989147.19 39.13% -2.48%
By sales model
Direct sales 6090615025.20 100.00% 5961477252.98 100.00% 2.17%
(2) Operating division product category operating segment or sales model contributing over
10% of operating revenue or operating profit
□ Applicable□ Not applicable
14Lu Thai Textile Co. Ltd. Annual Report 2024
(3) Whether revenue from physical sales is higher than service revenue
□ Yes □ No
Industry
Classification Item Unit 2024 2023 Change (%)
Unit sales 0000 meters 18662.18 18092.94 3.15%
Fabric Output 0000 meters 20522.78 20230.04 1.45%
Inventory 0000 meters 4056.57 4036.91 0.49%
Unit sales 0000 pieces 1769.07 1756.50 0.72%
Shirts Output 0000 pieces 1825.26 1769.07 3.18%
Inventory 0000 pieces 176.64 135.69 30.18%
Unit sales 000 KWH 188015.03 173716.42 8.23%
electrical Output 000 KWH 415172.76 406726.09 2.08%
Inventory 000 KWH
Unit sales Ton 295936.22 268048.41 10.40%
Steam Output Ton 1031887.31 1041382.00 -0.91%
Inventory Ton
Any over 30% YoY movements in the data above and why:
□ Applicable □ Not applicable
Shirt inventory increased 30.18% year-on-year mainly due to the increase in shirt orders at the end
of Reporting Period.
(4) Execution progress of major signed sales and purchase contracts in the Reporting Period
□ Applicable□ Not applicable
(5) Breakdown of cost of sales
By operating division and product category
Unit: RMB
2024 2023 Year-on-
Industry Item As % of Total As % of Total YearClassification Amount Cost of Sales Amount Cost of Sales Change
(%)(%)
Textile and Cost of
apparel Sales 4295996602.48 92.52% 4208891944.15 91.67% 2.07%
Electricity and Cost of
steam Sales 226356834.36 4.87% 228107386.45 4.97% -0.77%
Other Cost ofSales 121225507.79 2.61% 154389584.80 3.36% -21.48%
Unit: RMB
20242023
Product As % of Total As % of Total Change
Category Item Amount Cost of Sales Amount Cost of Sales (%)
(%)(%)
Fabric Cost of
products Sales 3265807582.72 70.33% 3219884044.35 70.13% 1.43%
Apparel Cost ofSales 1030189019.76 22.19% 989007899.80 21.54% 4.16%
Electricity and Cost of
steam Sales 226356834.36 4.87% 228107386.45 4.97% -0.77%
15Lu Thai Textile Co. Ltd. Annual Report 2024
Other Cost ofSales 121225507.79 2.61% 154389584.80 3.36% -21.48%
Note
Name Period Raw Materials Labor Cost Depreciation Energy Manufacture Expenses Total
202446.71%17.75%7.31%17.76%10.47%100.00%
Fabric
202348.13%17.66%7.10%17.59%9.52%100.00%
202460.00%26.26%2.39%1.28%10.07%100.00%
Apparel
202359.65%26.22%2.42%1.13%10.58%100.00%
(6) Changes in the scope of consolidated financial statements for the Reporting Period
□ Yes □ No
In this year the subsidiary Shanghai Zhinuo Textile New Materials Co. Ltd. was deregistered and
a new subsidiary Tianyi Apparel Co. Ltd. was established.
(7) Major changes to the business scope or product or service range in the Reporting Period
□ Applicable□ Not applicable
(8) Major customers and suppliers
Major customers:
Total sales to top five customers (RMB) 1062056133.14
Total sales to top five customers as % of total sales of the
Reporting Period (%) 17.44%
Total sales to related parties among top five customers
as % of total sales of the Reporting Period (%) 0.00%
Information about top five customers:
Sales Revenue Contributed
No. Customer for the Reporting Period As % of Total Sales
(RMB) Revenue (%)
Total -- 1062056133.14 17.44%
Other information about major customers:
□ Applicable□ Not applicable
Major suppliers:
Total purchases from top five suppliers (RMB) 535738292.24
Total purchases from top five suppliers as % of total
purchases of the Reporting Period (%) 14.74%
Total purchases from related parties among top five
suppliers as % of total purchases of the Reporting Period 2.17%
(%)
Information about top five suppliers:
No. Supplier Purchase in the Reporting As % of Total PurchasesPeriod (RMB) (%)
Total -- 535738292.24 14.74%
16Lu Thai Textile Co. Ltd. Annual Report 2024
Other information about major suppliers:
□ Applicable□ Not applicable
3. Expense
Unit: RMB
2024 2023 Change (%) Reason for Any SignificantChange
Selling expense 151004439.35 148454814.21 1.72%
Administrative
expense 344326973.11 382327532.79 -9.94%
Financial expenses -3750186.31 5448844.47 -168.83% Increased net exchange gain.R&D expense 206820921.71 239775343.18 -13.74%
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.For details of selling expense please refer to “49. Selling expense” of “VII. Notes to main items ofconsolidated financial statements” of “Part X Financial Statements”.
4. Other Information Required by Information Disclosure Guide for Companies Engaged in
Textile and Garment Services
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.
(1) Capacity
The Company’s own capacity
Industry
Classification Item 2024 2023
Total capacity
(1000028400.0029745.00
meters)
Rate of
capacity 79% 74%
utilization
Fabric The Company’s convertible bond The Company’s convertible bondfundraising project: Equipment and fundraising projects: The “Functional FabricPlants under supporting facilities for the “Overseas Intelligent Eco-park Project (Phase I)” withconstruction Product Line Project of High-grade an annual capacity of 35 million meters ofFabrics (Phase I)” have been high-grade functional fabrics and theprogressively completed and put into “Overseas Product Line Project of High-operation. grade Fabrics (Phase I)” were in progress.Total capacity
(10000
standard 2385.00 2230.00
pieces)
Apparel Rate of
capacity 86% 84%
utilization
Plants under The overseas investment in the
construction construction of a 3 million-piece
17Lu Thai Textile Co. Ltd. Annual Report 2024
garment production line entered the
trial production stage in August 2024.Year-on-year change in the rate of capacity utilization above 10%
□ Yes□ No
Overseas capacity
□ Yes □ No
Industry
Classification Item Domestic Overseas
Percentage of capacity 73% 27%
Fabric Capacity layout Mainly in Shandong Province Mainly in Southeast Asia
Rate of capacity
utilization 79% 78%
Percentage of capacity 31% 69%
Apparel Capacity layout Mainly in Shandong Province Mainly in Southeast Asia
Rate of capacity
utilization 84% 87%
(2) Sales model and channels
Product sales channels and operation methods
a. Sales model
The Company adopted the order-based sales model. With the self-owned trademark “Luthai” for its
fabric sales it provided product development and design solutions tailored to customer needs
including patterns functionality and material specifications. Shirts were mainly made according to
the orders of customers at home and abroad and sold by brand owners.The Company actively expanded its own brand portfolio. The Company operated its self-owned
brand through self-owned exclusive shops such as Lu Thai Exhibition and Sales Pavilion counters
of affiliated stores in malls and e-networking marketing expanding its business footprint through
all channels. In addition the Company also offered “high-end custom” shirt and corporate attire
customization services to meet the diverse needs of end customers.b. Sales channels: Direct sales: The Company focused on its own brand with a dedicated sales
department responsible for managing the sales and after-sales services of the Company’s products.The global market was divided into different sales regions for management with unified planning
and deployment to effectively handle fabric and apparel orders ensuring the completion of product
sales. Additionally to enrich its terminal brand matrix and expand the market the Company
launched a new brand ‘Luthai 1987’ to meet the diverse needs of end customers.Online sales: To keep up with the digitalization wave the Company was fully committed to
expanding its online sales channels. On one hand the Company built its own e-commerce platform
and deeply integrated corporate resources to directly connect the brand with consumers; on the
other hand it formed strategic partnerships with major well-known online shopping platforms to
expand traffic channels. After transactions were completed through the internet the goods were
accurately delivered to customers via express delivery.Unit: RMB
Sales Operating Cost of Sales Gross YoY Change in YoY Change in YoY Change
18Lu Thai Textile Co. Ltd. Annual Report 2024
Channels Revenue Profit Operating Cost of Sales in Gross Profit
Margin Revenue Margin
Online
sales 2087914.97 1010522.76 51.60% -37.23% -32.20% -3.59%
Direct sales 4344572214.59 3268776650.71 24.76% 2.57% 1.43% 0.84%
OEM/ODM 1360677575.39 1026209429.01 24.58% 3.40% 4.21% -0.59%
Total 5707337704.95 4294262102.56 24.76% 2.74% 2.03% 0.53%
(3) Franchise and distribution
Franchisees and distributors recorded more than 30% of sales revenue
□ Yes□ No
(4) Online sales
Online sales recorded more than 30% of sales revenue
□ Yes□ No
Self-developed sales platforms
□ Yes □ No
Start of operation 30 March 2009
Number of registered users 145000
Average number of active monthly users (AMU) 3000
Return rate of main brands 2.80%
Return rate of main types 2.80%
Cooperation with third-party sales platforms
□ Yes □ No
Unit: RMB
Platform Name Transaction Amount during theReporting Period Return Rate
Online sales channels opened or closed by the Company
□ Applicable□ Not applicable
Impact on the Company in the current period and subsequent periods:
Not applicable
(5) Agency operation model
Agency operation model involved
□ Yes□ No
(6) Inventory
Inventory
Days of
Main Products Turnover of Quantity of Inventory Year-on-year Change in
Inventories Inventory Age Inventory Balance
Reason for Change
Fabric (10000
meters) 87 3353.32
Within one
year -0.94%
19Lu Thai Textile Co. Ltd. Annual Report 2024
Fabric (10000
meters) 703.25
Over one
year 7.90%
Shirts (10000 Within one Increased orders at the
pieces) 30 158.86 year 34.58% end of the ReportingPeriod.Shirts (10000 17.78 Over onepieces) year 0.76%
Inventory valuation allowances:
31 December 2024
Item
Carrying Amount Valuation Allowance or Provision forImpairment on Contract Performance Cost Carrying Value
Raw materials 806501875.49 55650999.99 750850875.50
Work-in-progress 520394109.82 6229881.12 514164228.70
Inventory goods 952987895.46 208856231.77 744131663.69
Commissioned
products 10737638.41 0.00 10737638.41
Total 2290621519.18 270737112.88 2019884406.30
(7) Brand building
Production and sales of brand clothing apparel and home textile products
□ Yes □ No
Self-owned brands:
Brand Trademark Main Target Price Zone
Name Name Product Characteristics Consumer of Main
Main Sales
Areas City LevelsTypes Group Products
East China Provincial
LTGRFF LTGRFF Shirts Classic business Business RMB500-
South China capital cities
and suits attire people 3000 and and otherSouthwest prefecture-
China level cities
East China Provincial
Luthai South China capital cities
1987 Luthai 1987 Shirts Business casual Elite men
RMB500-
3000 and and otherSouthwest prefecture-
China level cities
Trademark ownership disputes
□ Applicable□ Not applicable
(8) Other information
Engaged in business related to apparel design
□ Yes□ No
Whether the Company held meetings for the placement of orders
□ Yes□ No
5. R&D Investments
□ Applicable □ Not applicable
Names of Main Goals of Projects Progresses of Projects Intended Goals Estimated Impact on
20Lu Thai Textile Co. Ltd. Annual Report 2024
R&D Projects Future Development of
the Company
The variety of flame-
retardant fabrics on the
market is relatively
limited with many
using a high proportion The performance of
Research on key of aramid fibres and commonly used The Company aims
processing with very high prices flame-retardant fibres to optimise process This project is
technologies for and many problems such was analysed and the parameters for each expected to enhance
biomass finishing as poor comfort This processes of spinning procedure develop the performance
of functional project is aimed to dyeing finishing and a range of fabric quality of the
waterproof develop flame-retardant printing were studied. products and Company’s functional
breathable and fabrics with better The capability to test establish the products and
flame retardant overall performance and and evaluate flame- capacity for large- strengthen core
fabrics higher cost-effectiveness retardant performance scale production. competitiveness.by achieving a was established.synergistic flame-
retardant effect through
the combination of
multiple fibres.Green low-carbon and
sustainable development
are the main trends in
the textile industry.Based on a commitment
to a responsible future The Company aims
and society the to achieve qualified
Company is dedicated to standards for pre-
low-carbon sustainable wash and 20 post-
Research and green development. Six series of products wash probiotic
development of key Efforts have made in have been developed function of fabrics; This project is
technologies for areas such as water including Probiotic green non-iron
green resources energy Skin Renewal HCP + products yarn
expected to maintain
the Company’s leading
environmentally chemicals wastewater Eco Bleaching Full ecological boilingand exhaust emissions Process Natural and bleaching technological level infriendly
lightweight sustainability Finishing Eco treatment without
the industry and lead
functional cotton certifications and Washing HCP the use of hazardous
the industry
sustainable product Upgrades and chemicals development.fibres and products innovation. This project Freshening. formaldehyde and
is aimed to vigorously formaldehyde aging
promote energy < 16 ppm ironing-
conservation and free stability ≥ grade
emission reduction 3.5.enhance the Company’s
product
competitiveness and
foster technological
progress in the industry.This project is aimed to The research focused The key processing
Research on key not use silver ions and on the trial production technologies and
preparation other antimicrobial and improvement of The Company aims industrialisation of this
technologies for additives etc. the the loose-style liquid to complete process project is expected to
sunlight-driven textile itself through the ammonia finishing align with the
antibacterial sunlight drive with equipment the in-situ
trials and develop a
range of fabrics with development
antiviral and antibacterial disinfection complexation reaction large-volume guidelines of the textile
multifunctional efficacy safe broad- between liquid production capacity. industry and meet the
protective fabrics spectrum long-lasting ammonia and urgent demand for
and non-resistant. functional inorganic healthy textiles. With asmall molecules the wide range of
21Lu Thai Textile Co. Ltd. Annual Report 2024
impact of auxiliary applications it is
functional finishing expected to be in line
agents on the fabric’s with market trends and
antibacterial and have a very promising
antiviral properties as future.well as the synergistic
enhancement between
post-finishing
wrinkle-resistant
agents and
photocatalytic self-
disinfecting
compounds.The Company aims
to complete a
variety of forms of
dyeing such as
This project is aimed to The machine bamboo yarn This project is
Research on key conduct research on salt- equipment segmented colour expected to enhance
technologies for less and water-less modifications have yarn colour point the Company’s dyeing
salt-free and low- dyeing for regenerated been completed and yarn multi-colour technology level
water green dyeing cellulose fibre cylinder the relevant dyeing yarn snowflake enrich the Company’s
of regenerated yarns which has high process technology yarn ripple yarn variety of casual wear
cellulose fibre yarn technical content saves has been optimized etc. and to achieve fabrics and strengthenenergy and reduces enabling mass a reduction of more the Company’s
carbon emissions. production. than 60% in water competitiveness.consumption
compared with the
advanced level
abroad.Details about R&D personnel:
2024 2023 Change (%)
Number of R&D personnel 1255 1396 -10.10%
R&D personnel as % of
total employees 12.80% 13.26% -0.46%
Educational background of R&D personnel
Bachelor 185 196 -5.61%
Master 29 28 3.57%
Age structure of R&D personnel
Below 30 140 166 -15.66%
30~40716847-15.47%
Above 40 399 383 4.18%
Details about R&D investments:
2024 2023 Change (%)
R&D investments (RMB) 206820921.71 239775343.18 -13.74%
R&D investments as % of
operating revenue 3.40% 4.02% -0.62%
Capitalized R&D investments
(RMB) 0.00 0.00 0.00%
Capitalized R&D investments as %
of total R&D investments 0.00% 0.00% 0.00%
Reasons for any significant change to the composition of R&D personnel and the impact:
22Lu Thai Textile Co. Ltd. Annual Report 2024
□ Applicable□ Not applicable
Reasons for any significant YoY change in the percentage of R&D expense in operating revenue:
□ Applicable□ Not applicable
Reason for any sharp variation in the percentage of capitalized R&D expense and rationale:
□ Applicable□ Not applicable
6. Cash Flows
Unit: RMB
Item 2024 2023 Change (%)
Subtotal of cash generated from
operating activities 6120282310.84 5733287497.87 6.75%
Subtotal of cash used in operating
activities 4876070158.90 4878422960.45 -0.05%
Net cash flow from operating
activities 1244212151.94 854864537.42 45.54%
Subtotal of cash generated from
investing activities 1748289321.17 9682671841.39 -81.94%
Subtotal of cash used in investing
activities 2980405818.85 10635911372.48 -71.98%
Net cash generated from/used in
investing activities -1232116497.68 -953239531.09 -29.26%
Subtotal of cash generated from
financing activities 2146986621.30 1289724006.83 66.47%
Subtotal of cash used in financing
activities 2174973262.02 1677384015.94 29.66%
Net cash generated from/used in
financing activities -27986640.72 -387660009.11 92.78%
Net increase in cash and cash
equivalents 17796953.59 -469281964.23 103.79%
Explanation of why any of the data above varies significantly:
□ Applicable □ Not applicable
During the Reporting Period the net cash flow from operating activities increased by 45.54% year-
on-year primarily due to an increase in cash received from sales of goods. Cash inflows from
investing activities decreased by 81.94% year-on-year mainly due to a reduction in wealth
management investments. Cash outflows from investing activities decreased by 71.98% year-on-
year primarily due to a reduction in wealth management investments paid. Cash inflows from
financing activities increased by 66.47% year-on-year mainly due to an increase in cash received
from loans. The net cash flow from financing activities increased by 92.78% year-on-year mainly
due to an increase in cash received from loans. The net increase in cash and cash equivalents
increased by 103.79% year-on-year primarily due to the increase in net cash flow from operating
activities.Reason for any big difference between the net operating cash flow and the net profit for this
Reporting Period
□ Applicable □ Not applicable
This was mainly due to factors such as depreciation of various assets fair value changes and adecrease in inventory. For further details please refer to “(1) Supplemental information for cash
23Lu Thai Textile Co. Ltd. Annual Report 2024flow statement” of “62. Supplemental information for cash flow statement” of “VII. Notes to mainitems of consolidated financial statements” of “Part X Financial Statements”.V Analysis of Non-Core Businesses
□ Applicable □ Not applicable
Unit: RMB
Amount As % of TotalProfit Source/Reason Recurrent or Not
Return on -46506250.57 -9.94% Return on held-for-trading financialinvestment assets Not
Gain/loss on Loss on changes in fair value of
changes in fair -90826774.15 -19.42% held-for-trading financial assets and Not
value liabilities
Asset impairments -110133501.21 -23.54% Inventory valuation allowances Not
Non-operating Income of non-operating
income 9574940.35 2.05% compensation etc Not
Non-operating Loss on destruction and retirement
expense 8534087.54 1.82% of non-operating non-current assets Notetc.VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
End of 2024 Beginning of 2024 Change in Reason for Any
As % of As % of Percentage Significant
Amount Total Amount Total (%) Change
Assets Assets
Monetary
capital 2055856788.37 14.76% 1558252048.03 11.60% 3.16%
Accounts
receivable 849168539.27 6.10% 826467684.78 6.15% -0.05%
Inventories 2019884406.30 14.50% 2124139574.70 15.82% -1.32%
Investment
property 18675533.63 0.13% 19578175.93 0.15% -0.02%
Long-term
equity 120084271.29 0.86% 143537479.77 1.07% -0.21%
investments
Fixed assets 6053755987.08 43.46% 5597692505.07 41.68% 1.78%
Construction in
progress 95026709.37 0.68% 868496878.41 6.47% -5.79%
Right-of-use
assets 470238928.19 3.38% 463226419.21 3.45% -0.07%
Short-term loan 849686824.33 6.10% 580704772.27 4.32% 1.78%
Contract
liability 191551003.79 1.38% 188073335.89 1.40% -0.02%
Long-term
borrowings 396244110.21 2.84% 259992974.40 1.94% 0.90%
Lease liabilities 91353320.80 0.66% 86580224.41 0.64% 0.02%
Indicate whether overseas assets account for a large proportion of the total assets.□ Applicable □ Not applicable
24Lu Thai Textile Co. Ltd. Annual Report 2024
Reason Control As % of Material
Asset for Asset Value Location Operation Measures to
Return the Impairment
Formation (RMB) Model Protect
Generated
(RMB) Company’s RiskAsset Safety Equity (yes/no)
Main
Hong management
Kong Set-up 269184627.77 HongKong Marketing
personnel
company sent by the
20696306.81 2.74% Not
Company as
the parent
Main
Overseas management
production Set-up 4554415091.97 SoutheastAsia Manufacturing
personnel
sent by the 158438088.37 46.36% Notbases Company as
the parent
2. Assets and Liabilities at Fair Value
□ Applicable □ Not applicable
Unit: RMB
Gain/Loss on Fair- Cumulative Impairment
Item Beginning Value Changes in
Fair-Value Allowance Purchased in The Sold in the Other
Amount The Reporting Changes for The Reporting Period Reporting Period Changes Ending Amount
Period Recorded in ReportingEquity Period
Financial assets
1. Held-for-
trading
financial
assets
(excluding 713539243.86 -110037211.06 1421182973.92 1331188784.27 693496222.45
derivative
financial
assets)
2.
Derivative
financial 10261031.53 -5766681.34 2108000.00 6125900.00 476450.19
assets
5. Other
non-current
financial 88750000.00 -5950000.00 82800000.00
assets
Subtotal of
financial 812550275.39 -121753892.40 1423290973.92 1337314684.27 776772672.64
assets
Other 18248205.76 -50005.02 -8013300.15 10184900.59
Total of the
above 830798481.15 -121753892.40 -50005.02 1423290973.92 1337314684.27 -8013300.15 786957573.23
Financial
liabilities 46785831.47 30927118.25 218400.00 218400.00 15858713.22
Content of other change:
Changes in accounts receivable financing.Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes□ No
25Lu Thai Textile Co. Ltd. Annual Report 2024
3. Restricted Asset Rights as at the Period-End
For details see Part X. VII. 23. Assets with restricted ownership and using right in this Report.VII. Investments Made
1. Total Investment Amount
□ 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 Investments
(1) Securities Investments
□ Applicable□ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable □ Not applicable
1) Derivative Investments for Hedging Purposes during the Reporting Period
□ Applicable □ Not applicable
Unit: RMB’0000
Gain/Loss Proportion
Investments on Fair- Cumulative Of Closing
Type of Initial at the Value Fair-Value
Purchased Sold in Investments Investment
Investment Beginning Changes Changes in the the at the End Amount inDerivative Amount of the in the Recorded Reporting Reporting of the the
Period Reporting in Equity Period Period Period Company’s
Period Ending NetAssets
Foreign
exchange 56400 56400 0 0 28552.1 84952.1 0 0.00%
option
Total 56400 56400 0 0 28552.1 84952.1 0 0.00%
Whether
significant
changes
occurred to
the
Company’s
accounting
policy and No significant changes
specific
accounting
principles of
derivatives in
the Reporting
Period
26Lu Thai Textile Co. Ltd. Annual Report 2024
compared to
the previous
Reporting
Period
Actual 1. As at 31 December 2024 the Company had not held any outstanding financial derivative contracts that
gain/loss in have not yet matured.the Reporting 2. From January to December 2024 the Company had financial derivatives maturing with a total amount
Period of USD134 million all executed according to the contracts with a delivery of USD134 million and a lossof RMB4694400 all related to foreign exchange options.The Company conducts foreign exchange (FX) derivative transactions with the intention of hedging.Effectiveness Specifically the business is carried out to fix costs avoid exchange rate risks and improve resistance
of hedges against FX rate fluctuations. As a result the Company has gained better capabilities of avoiding andpreventing the risks of FX rate fluctuations and the financial robustness of the Company has been
enhanced.Capital source
for derivative Own funds.investment
The Company conducted derivatives products transaction in order for hedging. And the forward
settlement hedging was operated by instalments 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 derivative
transactions of the Company. Precautions: The Company chooses financial instruments with simple
structures high liquidity and controllable risk and strictly controls the scale of derivative transactions
performing them by stages and in batches. Means such as extension and balance settlement can be
adopted to ensure contract performance after the contract expires.Analysis on 2. Liquidity risk and credit risk: Credit risk arises when the Company or counterparties in transactions
risks and couldn’t perform contracts due now to liquidity or other factors that result in further economic loss.control Precautions: The derivative transactions can only be done with financial institutions qualified for
measures of derivative transactions as authorized by relevant national authorities or financial or foreign exchange
derivative authorities in the country or region where the Company operates. Derivative transactions with other
products held institutions or individuals are not allowed so as to control related risk concerning counterparties.in the 3. Internal risk control: Derivative transactions are highly specialized and complex. Therefore there is a
Reporting risk of loss in derivative transactions due to the imperfect internal control system when business is
Period performed. Precautions: The Company should strictly implement Management Policy for Investments in
(including but Securities and Derivative Transactions of Lu Thai Textile Co. Ltd. continuously optimize the business
not limited to operation process and authorization management system strengthen professional ethics education and
market risk business training for relevant personnel clarify job responsibilities engage in derivative transaction
liquidity risk business strictly within the scope of authorization and establish a timely reporting system for abnormal
credit risk conditions to avoid operational risks.operation risk 4. Risk of laws and regulation: Derivative transactions of the Company must be strictly in compliance
law risk etc.) with relevant national laws and regulations. Otherwise signed contracts commitments and other legal
documents may entail compliance risk and regulatory risk in terms of effectiveness and enforceability.Precautions: The Company should strengthen the supervision and inspection of the standardization of
derivative transactions the effectiveness of internal control mechanism and the authenticity of
information disclosure to avoid possible legal risks. The Company has fulfilled relevant approval
procedures for its derivative transactions business which is in line with the relevant national laws
regulations the Articles of Association the Management Rules for Derivative Trading of Lu Thai
Company the Proposal on the Company’s Derivative Transaction Plan deliberated and adopted at the
9th meeting of the 10th session of the Board of Directors held on 26 May 2023 and the Proposal on the
Company’s Derivative Transaction Plan deliberated and adopted at the 22nd meeting of the 10th session
of the Board of Directors held on 28 May 2024 and fulfilled the relevant information disclosure
obligations.Changes of In accordance with the relevant provisions and guidelines of the Accounting Standards for Business
market prices Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting
or fair values Standards for Business Enterprises No. 37 - Presentation of Financial Instruments issued by the
in the Ministry of Finance the Company took the relevant accounting measures for its business of FX
Reporting derivative transactions to reflect the relevant items in the balance sheet and the income statement. During
27Lu Thai Textile Co. Ltd. Annual Report 2024
Period of the the Reporting Period the Company determined the fair value of FX options based on the bank’s forward
invested option quotations at the end of the period.derivatives.And the
analysis on
the fair value
of the
derivatives
should
include the
specific use
methods and
the relevant
assumptions
and
parameters.Lawsuit (if
applicable) N/A
Disclosure
date of board
of directors
announcement
on approval of 27 May 2023
derivative
investment (if
any)
Disclosure
date of board
of directors
announcement
on approval of 29 May 2024
derivative
investment (if
any)
2) Derivative Investments for Speculative Purposes during the Reporting Period
□ Applicable□ Not applicable
No such cases in the Reporting Period.
5. Use of Funds Raised
□ Applicable □ Not applicable
(1) Overall Use of Funds Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Usage Total
Ratio of of
Raised Raised CumulatiTotal Ratio of Total
Amou
Total of Cumulati Funds Capital
ve nt of
Securiti ve at the which Amount
Cumulati of Purpose Raised
Raisin ve Raise andRaising es of Net Raised of Raised Capitag Manner Listing Raised Procee Capital
Amount End of Purpos Capital Amount d Direction l
Year Date Capita ds (1) Used
of Raised the e is
Capital Reporti Chang which
which Capit of Raised
l in this Purpose al Capital
Unuse
Period Used (2) ng ed in
Purpose is Unuse Unused d for
Period the is Two
(3) = Report Changed
Changed d Years
(2) / (1) Period
2020 Converti 13 May 1400 13880 9897. 144394. 104.03 0 51371.5 37.01% 0 The 0
28Lu Thai Textile Co. Ltd. Annual Report 2024
ble 2020 00 0 11 95 % 8 remaining
corporate interest
bonds from the
raised
funds
amounts
to
RMB36.1
1 which
will be
permanen
tly added
to the
working
capital.Total -- -- 1400 13880 9897. 144394. 104.03 0 51371.500 0 11 95 % 8 37.01% 0 -- 0
General use situation of raised capital
(I) Amount of actual raised capital and arrival date
Upon approval by the CSRC in the document “ZJXK [2020]299” the Company publicly issued 14000000 convertible bonds on 9 April 2020 at par
value RMB100 the issued amount was RMB1.4 billion and the Company actually received the amount of raised capital RMB1388 million after
deducted the underwriting fee RMB12 million. The above amount was remitted in cash in RMB. After deducted legal fee accountant fee credit
rating fee information disclosure fee issuing commission and other costs RMB2.54 million in total from the above actually raised capital the net
amount of raised capital was RMB1385.46 million which entered the account on 15 April 2020 and Grant Thornton International Ltd (Special
General Partnership) issued the capital verification report with reference No. Grant Thornton Verification [2020] 371ZC0090 for it after verification.(II) Use situation and balance of raised capital
As at 31 December 2024 the Company had directly invested a total of RMB1443949500 of raised funds into the fundraising projects. In accordance
with relevant regulations the remaining interest from the raised funds amounts to RMB36.11 which will be permanently added to the working
capital. All special accounts for the raised funds were closed on 28 November 2024 and the corresponding fundraising supervision agreement was
also terminated.
(2) Commitments on Projects with Funds Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Committed Whether
Investment theProject Total of Adjusted Amount Accumulative Investment Date of Realized Accumulative Whether
Financing Securities Projects Has Committed Total Invested Investment Schedule Reaching Income Benefits Whether
Project Listing and Use Amount of Amount at Recorded as Reached
Project
Direction Project Nature Been Investment the in this the End of as the Intended in the at the End of Anticipated FeasibilityName Date of Over Altered of Raised Investment Report the Reporting Period-end Use of the Reporting Changed
Raised (or Capital (1) Period Period (2) (3)=(2)/(1) Project Period
the Reporting Income Significantly
Capital Partially
Period
Altered)
Committed investment projects
Functional Functional
fabric fabric
smart eco- 13 May smart eco- Production 31
park 2020 park and Yes 85000 58628.42 0 58628.42 100.00% December 0 0 N/A Not
project project construction 2024
(Phase 1) (Phase 1)
Overseas Overseas
high-end high-end
fabric 13 May fabric Production 31
production 2020 production and Yes 25000 34000 4832.2 35813.63 105.33% December 0 0 N/A Not
line project line project construction 2024
(Phase I) (Phase I)
Supplement 13 May Supplementworking 2020 working
Supplementary
capital capital liquidity
Yes 28800 46171.58 5064.91 49952.9 108.19% 0 0 N/A Not
29Lu Thai Textile Co. Ltd. Annual Report 2024
Subtotal of committed investment projects -- 138800 138800 9897.11 144394.95 -- -- 0 0 -- --
Use direction of over raised capital
N/A 13 May2020 N/A N/A Not 0 N/A Not
Repayment of bank loans (if any) -- 0 0 0 0 0.00% -- -- -- -- --
Supplement working capital (if any) -- 0 0 0 0 0.00% -- -- -- -- --
Subtotal of use director of over raised capital -- 0 0 0 0 -- -- 0 0 -- --
Total -- 138800 138800 9897.11 144394.95 -- -- 0 0 -- --
Explain project by
project situation and
reasons that it did not
reach the planned
progress or expected The “Functional Fabric Intelligent Eco-park Project (Phase I)” and the “Overseas Product Line Project of High-grade Fabrics (Phase I)” were in progress. Neither
return (including of the two projects has yet achieved scaled production or met the expected returns.reason for inputting
“N/A” for “Whetherreached the expectedbenefit”)
Note for significant
change of project N/A
feasibility
Amount purpose and
use progress of over N/A
raised capital
Change of
implementation site of N/A
capital raising project
Adjustment of
implementation mode
of capital raising N/A
project
Applicable
Advance investment
and displacement of By 30 April 2020 the total amount of displaced capital was RMB191428800 including the amount RMB189838800 invested in the project with the self-raised
capital raising project capital of the Company in advance and payment of issuing cost RMB1.59 million with its self-raised capital.Temporary
supplement to
working capital with N/A
unused raised capital
Balance of raised
capital after
implement of project N/A
and relevant reasons
Purpose and use
direction of unused As at 31 December 2024 the unused raised funds amounted to RMB0.raised capital
Problems existing in
use and information
disclosure of raised N/A
capital or other
situation
(3) Changes in Projects with Funds Raised
□ Applicable □ Not applicable
Unit: RMB’0000
Financing Raising Items after Corresponding Total Actual Actual Investment Date of Realized Whether Whether
30Lu Thai Textile Co. Ltd. Annual Report 2024
Project Manner Changes Original Raised Investment Accumulative Progress Reaching Income Reached Occurred
Name Committed Funds Amount in Investment by the End Intended in the Anticipated Significant
Items to Be the Amount by of the Use of the Reporting Income Changes
Invested Reporting the End of Reporting Project Period in Project
in the Period the Reporting Period (3) Feasibility
New Period (2) ＝ (2)/(1)
Project
(1)
High-end
Public Issuance of Overseas printing and
issuance of convertible high-end dyeing fabric
A-share corporate fabric production 31
convertible bonds to production line project 34000 4832.2 35813.63 105.33% December 0 N/A Not
bonds in unspecified line functional 2024
2020 investors project fabric smart(Phase I) eco-park
project
Total -- -- -- 34000 4832.2 35813.63 -- -- 0 -- --
In accordance with the Company’s global strategic layout and market demand the Company planned to
adjust its capacity structure.
1. On 9 June 2022 the second extraordinary general meeting and the first bondholders’ meeting of 2022
deliberated and adopted the Proposal on Changing the Purpose of Partial Raised Capital Unused. The aim
was to terminate the “High-end printing and dyeing fabric production line project” and leverage the raised
Statement on the reasons for capital of this project of RMB250 million for construction of overseas high-end fabric production line
alteration the decision-making project (Phase I) disclosed on 10 June 2022 on the cninfo website (“www.cninfo.com.cn”).procedure and the information 2. On 25 September 2023 the second extraordinary general meeting and the first bondholders’ meeting of
disclosure (by specific project) 2023 deliberated and adopted the Proposal on Changing the Purpose of Partial Raised Capital Unused. TheCompany decided to repurposed the remaining raised funds of the “functional fabric smart eco-park project(Phase I) implemented by its majority-owned subsidiary Shandong Lulian New Materials Co. Ltd. usingRMB90 million of the remaining raised funds for the “overseas high-end fabric production line project(Phase I)” which have been disclosed on the cninfo website (“www.cninfo.com.cn”) dated 26 September
2023 and 27 September 2023 respectively.
Statement on the failure to achieve
the scheduled progress and/or the
anticipated returns and its reasons N/A
(by specific project)
Notes of condition of significant
changes occurred in project N/A
feasibility after changes
VIII. 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
IX. 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’0000
The
Subsidiary Company Principal Registered Total Operating Operating NetType of Activity Capital Assets Net Assets Revenue Profit Profit
Change
31Lu Thai Textile Co. Ltd. Annual Report 2024
LuFeng
Company Subsidiary Fabric 70616.00 174517.38 153855.63 133551.47 9831.11 8993.10
Limited
Shandong
Lulian New
Materials Co. Subsidiary Fabric 90000.00 62870.55 57078.58 16284.77 -3241.49
-
3212.34
Ltd.Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable□ Not applicable
Information about major majority- and minority-owned subsidiaries:
LuFeng Company Limited is the holding subsidiary of the Company. Registration place: Zibo
Shandong; registered capital: RMB706.16 million. The mainly manufacturing and selling textile
printing and dyeing products and the products of clothing and garments and it were authenticated
to be high-tech enterprise in October 2014. During the Reporting Period net profit increased year-
on-year mainly due to the decrease in related expenses and impairment loss provisions compared to
the previous year.Shandong Lulian New Materials Co. Ltd. with its registered location in Zibo Shandong and a
registered capital of RMB900 million was approved by the Company’s 10th Board of Directors at
its 23rd meeting. The Company acquired the minority shareholder’s equity and the registration
process was completed on 12 July 2024 making it a wholly-owned subsidiary of the Company that
primarily engages in the production and sale of functional fabrics. During the Reporting Period net
profit increased year-on-year mainly due to the decrease in impairment loss provisions and related
costs and expenses compared to the previous year.X. Structured Bodies Controlled by the Company
□ Applicable □ Not applicable
See “X Interests in other entities” of Part X.XI. Prospects
1. Industry competition and development trend
The textile industry of China has certain strength in the global textile industry mainly showing in
industry chain technology labour efficiency and other aspects. The global economic downturn has
impacted the economy and trade of various countries in recent years but the competitive edge of
the textile industry of China in the international market still remains. When the domestic
environmental protection requirements are becoming more stringent production costs are going up
and the transformation and upgrade policy is implemented in China the textile industry may face
structural adjustment. Currently fabric demand change towards small batch multiple categories
diversification functionality and leisure.
2. Development strategy of the Company
The Company is a large-scale textile enterprise with a complete industrial chain integrating
spinning dyeing weaving post-treatment and garment manufacturing. It is the world’s largest
production base for yarn-dyed fabrics for shirts providing blending of three major series of fabrics
of pure cotton and natural fibre cotton and natural fibre as well as cotton and functional fibre. And
the newly developed knitted fabric and functional fabric are also popular in markets. In order to
maintain the outstanding advantages of the Company in global yarn-dyed fabrics the Company is
pushing intelligent manufacturing upgrades and integrating domestic and foreign advantageous
32Lu Thai Textile Co. Ltd. Annual Report 2024
resources to deepen internationalization of the Company with regional advantages. The Company is
committed to combining quality innovation with customer needs to meet the diverse demands of its
customers. Furthermore the Company increases investment in innovation to improve R&D and
design and develop new fabrics. The Company holds the concept of low-carbon environmental
protection for sustainable development.
3. Business plan (the following description does not constitute any commitment of the Company)
(1) In terms of corporate governance in order to ensure the healthy stable and sustainable
development of the Company at the institutional level the Company will establish an internal
control system to improve organizational structure corporate governance structure and risk
prevention mechanism.
(2) In the aspect of market development the Company actively develops emerging markets on the
basis of maintaining the existing market accurately understands market trend and customers’
demand and fully improves service capacity so that the Company could be a global green fashion
textile and apparel group based on leading fabric.
(3) In the aspect of business administration the Company continually implements the strategy of
“quality and efficiency improvement” and “comprehensive internationalization” makes more
efforts in developing market adjusting structure and improving capacity promotes innovation
while meeting market demand integrates internal and external resources deepens the application of
information technology and big data builds up a flexible rapid response efficient and traceable
supply system chain and effectively improves operational capabilities.
(4) In terms of industrial overall arrangement in order to maintain the leading position of the
Company in the global yarn-dyed industry the Company rationally allocates domestic and foreign
resources and improves production efficiency while keeping product quality relying on the
advantages of Milan and Tokyo Office in market development design and R&D customer service
and talent development and the cost advantages of the overseas production bases.
4. Capital needs sources and planning
The “Overseas Product Line Project of High-grade Fabrics” (Phase I) has been largely completed
and is now entering the capacity and efficiency ramp-up stage. The subsequent funding
requirements are mainly for operating capital sourced from the Company’s own funds and self-
raised capital.
5. Major potential risks and countermeasures
(1) Impact of economic environment: The global economic slowdown and ongoing geopolitical
risks continue to persist. The Company will still face challenges from changes in international trade
policies and market dynamics in the future. The Company will leverage its global industrial layout
and vertical supply chain advantages coordinate various resources both domestically and
internationally and continuously explore domestic and international markets.
(2) Price fluctuation of raw materials: cotton is the major production material of the Company and
the price of cotton is impacted by market supply and demand climate policy exchange rate and
other factors. Therefore the Company will coordinate domestic and international production
closely monitor global cotton market trends develop rational procurement strategies and fully
leverage the advantages of global procurement of high-quality raw cotton.
(3) Change of exchange rate: The Company has a significant proportion of import and export
business as well as overseas assets with most transactions denominated in US dollars. In recent
years the two-way fluctuation of the RMB exchange rate has become the norm and exchange rate
33Lu Thai Textile Co. Ltd. Annual Report 2024
elasticity has significantly increased. To mitigate the impact of exchange rate fluctuations the
Company adheres to a neutral approach to exchange rate risk management integrating exchange
rate risk into daily operations. Based on the actual needs of production and business the Company
flexibly uses various types of foreign exchange derivatives with different maturities for hedging
aiming to minimize the impact of exchange rate fluctuations on the Company’s financial
performance. Firstly the Company appropriately conducted foreign exchange hedging using
financial derivatives such as forwards swaps and option portfolios to avoid currency risks.Secondly the Company made reasonable arrangement on settlement day and currency and
vigorously promoted cross-border settlement with RMB to avoid exchange rate-related risks.Thirdly the Company adjusted the Renminbi and foreign-currency liabilities structure to actively
prevent currency fluctuation risks.XII. Communications with the Investment Community Such as Researches Inquiries and
Interviews during the Reporting Period
□ Applicable □ Not applicable
Date of Place of Visit Way of Type of
Contents and Index to Main Inquiry
Visit Visit Visitor Visitor MaterialsProvided Information
For details please refer to the
The About basic Investor Relations31 January Company’s Institutional Management Information
2024 conference By phone Institution investor information of 20240201 disclosed by the
room the Company company on the Cninfo
website on 1 February 2024
For details please refer to the
The About basic Investor Relations12 April Company’s Institutional Management Information
2024 conference By phone Institution investor information ofthe Company 20240415 disclosed by theroom company on the Cninfo
website on 15 April 2024
For details please refer to the
The Investor Relations
29 April Company’s By phone Institution Institutional
About basic
2024 conference investor information of
Management Information
the Company 20240430 disclosed by theroom company on the Cninfo
website on 30 April 2024.For details please refer to the
The About basic Investor Relations
8 May 2024 Company’s Online Management Informationconference exchange Other Investor information ofthe Company 20240508 disclosed by theroom company on the Cninfo
website on 8 May 2024
For details please refer to the
The Investor Relations
13 May Company’s One-on- About basic
2024 conference one Institution
Institutional
investor information of
Management Information
room meeting the Company
20240516 disclosed by the
company on the Cninfo
website on 16 May 2024
For details please refer to the
The
16 May Company’s One-on- Institutional About basic
Investor Relations
2024 conference one Institution investor information of
Management Information
20240516 disclosed by the
room meeting the Company company on the Cninfo
website on 16 May 2024
4 June 2024 The One-on- Institution Institutional About basic For details please refer to theCompany’s one investor information of Investor Relations
34Lu Thai Textile Co. Ltd. Annual Report 2024
conference meeting the Company Management Information
room 20240605 disclosed by the
company on the Cninfo
website on 5 June 2024
For details please refer to the
The Investor Relations
30 August Company’s By phone Institution Institutional
About basic
2024 conference investor information of
Management Information
the Company 20240830 disclosed by theroom Company on 30 August 2024
on the Cninfo website.For details please refer to the
The Investor Relations2
September Company’s By phone Institution Institutional
About basic Management Information
2024 conference investor
information of 20240903 disclosed by the
room the Company company on the Cninfowebsite on 3 September
2024.
For details please refer to the
The Investor Relations
31 October Company’s By phone Institution Institutional
About basic Management Information
2024 conference investor information of 20241101 disclosed by the
room the Company company on the Cninfowebsite on 1 November
2024.
For details please refer to the
The Investor Relations
31 October Company’s Institutional About basic Management Information
2024 conference By phone Institution investor information of 20241101 disclosed by the
room the Company company on the Cninfowebsite on 1 November
2024.
XIII. The Formulation and Implementation of the Market Value Management System and
Valuation Promotion Plan
Has the Company established a market value management system
□ Yes□ No
Has the Company disclosed a valuation improvement plan
□ Yes □ No
In accordance with the CSRC’s Guideline No. 10 for Listed Companies — Market Value
Management companies with long-term market value below par are required to disclose their plans
for improving the company’s valuation. As at 31 December 2024 the price of Luthai A-shares had
fallen into a long-term below-par situation. Therefore in line with its industry position
development strategy and business plans the Company has formulated and disclosed a valuation
enhancement plan. For specific details please refer to the Valuation Enhancement Plan of Lu Thai
Textile Co. Ltd. published by the Company on 1 March 2025 on http://www.cninfo.com.cn.XIV. Implementation of the “Quality and Earnings Dual Improvement” Action Plan
Has the Company disclosed its action plan for “dual enhancement of quality and profitability”
□ Yes□ No
35Lu Thai Textile Co. Ltd. Annual Report 2024
Part IV Corporate Governance
I. General Information of Corporate Governance
During the Reporting Period the Company strictly conforms to Company Law (Revised in 2023)
Securities Law (Revised in 2019) Governing Rules for Listed Company in China Self-Regulatory
Guidelines No. 1 for Companies Listed on Shenzhen Stock Exchange - Standard Operation of Listed
Companies on the Main Board (Revised in December 2023) and Administrative Measures for
Independent Directors of Listed Companies as well as relevant stipulations and requirements from
normative documents continuously improves the corporate governance structure safeguards the
standardized and efficient operation of three Committees and one Management forms a sound and
effective internal control system to safeguard legitimate interests of the Company and investors.During the Reporting Period the Company made revisions to the relevant provisions of nine
regulations including the Articles of Association of Lu Thai Textile Co. Ltd. and the Rules of
Procedure of the Board of Directors of Lu Thai Textile Co. Ltd.
1. Shareholders and Shareholders’ General Meeting.
The Company shall convene and hold the shareholders meeting in strict accordance with the
Shareholders Meeting Procedural Rules and guarantee that all shareholders especially the minority
shareholders could have equal status and fully execute their rights.
2. The relationship between the majority shareholders and the Company
The Company’s majority shareholders acted according to relevant standards without directly or
indirectly intervening the Company’s decision-making and operating activities; the Company was
independent with its majority shareholders in business personnel assets organization finance and
the Company’s Board of Directors Board of Supervisors and Internal Organs could completely
independent to operate. There was no situation about annexing the assets or occupation of funds of
the Company by principal shareholders or other events on infringing the interest of the Company
and other shareholders.
3. The directors and Board of Directors
The Company’s Board of Directors shall perform their duties in strict accordance with Articles of
Association and the Rules of Procedures for the Board of Directors. Under the Board of Directors
the Company established the Strategy Committee the Audit Committee the Nomination
Committee and the Remuneration Committee. Various specialized committees would fully perform
their functions and further guarantee the high-efficient operation and the scientific decision-making
of the Board of Directors.
4. Supervisors and Board of Supervisors
The Company’s Board of Supervisors will perform their duties in strict accordance with Articles of
Association and the Rules of Procedures for the Board of Supervisors. The number of members and
the composition of the Company’s Board of Supervisors shall comply with applicable laws and
regulations; the Company’s supervisors shall strictly abide by relevant provisions seriously execute
their duties and supervise the Company’s financial status and the legal execution of duties of the
directors president and other senior managers by adhering to the principle of being responsible for
the shareholders and the listed company.
5. Information disclosure
The Company strictly in accordance with the laws regulations and the Articles of Association
disclosed relevant information in a true accurate complete and timely manner. The Company has
36Lu Thai Textile Co. Ltd. Annual Report 2024
formulated the Information Disclosure Management System Information Insider Registration
Management System and Investor Relations Management System etc. to ensure the fairness
openness and fairness of information disclosure.
6. Investor relations management
During the Reporting Period as required by Investor Relations Management System to maintain
good communication with investors the Company accepted on-site investigations and consultations
of investors through on-site investigations and telephone consultations and promptly answered
questions asked by investors on the SZSE Easy-IR.Indicate by tick market whether there is any material incompliance with the applicable laws
administrative regulations and the CSRC rules for the governance of listed companies.□ Yes□ No
No such cases in the Reporting Period.II. The Company’s Independence from Its Controlling Shareholder and Actual Controller in
Assets Personnel Financial Affairs Organization and Business
1. As for the business: the Company shall establish its independent and complete business system
with the market-oriented independent management ability. In the respect of business operation the
Company is completely separated from the controlling shareholders.
2. As for the personnel: the Company’s labour personnel and remuneration management
departments shall be independent with their own sound systems and separated from that of the
substantial shareholder. The Company’s senior managers are not allowed to simultaneously hold
any office in any shareholder’s unit.
3. As for the assets: the Company possesses the entire and independent legal person property right
with independent and perfect the production system auxiliary production systems and supporting
facilities; and possesses the independent ownership of the intangible assets such as the industrial
property trademarks non-patented technology.
4. As for the institution: the Company’s Board of Directors Board of Supervisors and other internal
organization shall be sound and involved in independent operation. The substantial shareholder
shall legally execute its rights fulfil corresponding obligations and not surpass the shareholders
meeting to directly or indirectly interfere the Company’s business activities.
5. As for the finance: the Company possesses independent financial departments with normative
financial accounting system and financial management system as well as internal control system
with independent bank account.III. Horizontal Competition
□ Applicable□ Not applicable
IV. Annual and Special General Meetings Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor
Meeting Type Participation Convened Disclosure Meeting Resolutions
Ratio Date Date
Resolutions of the Extraordinary Ten proposals including the
First Extraordinary General 33.02% February February Proposal on Amending Certain
General Meeting of Meeting 05 2024 06 2024 Clauses of the Articles of
37Lu Thai Textile Co. Ltd. Annual Report 2024
Shareholders in 2024 Association of Lu Thai Textile
Co. Ltd. were deliberated and
approved
Six proposals including the
The 2023 Annual
General Meeting of Annual General 35.28% May 15 16 May
Proposal on 2023 Annual Work
Report of the Board of
Shareholders Meeting 2024 2024 Directors were deliberated and
approved.Two proposals including the
Resolutions of the
Second Extraordinary Extraordinary
Proposal on the By-election of
General 34.62% June 14 15 June Mr. Shang Chenggang asGeneral Meeting of Meeting 2024 2024 Supervisor of the 10th Board ofShareholders in 2024 Supervisors were deliberated
and approved.The 3rd Extraordinary Extraordinary Proposal on the Profit
General Meeting of General 35.45% September September Distribution Plan for the First
2024 Meeting 20 2024 21 2024 Half of 2024 was deliberatedand approved.
the Fourth Extraordinary Proposal on the ProfitExtraordinary General General 35.23% November November Distribution Plan for the ThirdMeeting of Meeting 18 2024 19 2022 Quarter of 2024 wasShareholders in 2024 deliberated and approved.
2. Special General Meetings Convened at the Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable□ Not applicable
V. Directors Supervisors and Senior Management
1. Basic Information
Increase Decrease
Beginning in the in the Other Ending Reason
Name Gender Age Office Title Incumbent/Former Start of End ofTenure Tenure Shareholding Reporting Reporting Increase/Decrease Shareholding for(share) Period Period (share) (share) Change
(share) (share)
Liu Zibin Male 60 Chairman Incumbent 6 June 8 June2016 2025 148290 148290
Liu Zibin Male 60 President Incumbent 6 June 8 June2007 2025 148290 148290
Xu Zhinan Male 95 ViceChairman Incumbent
6 May 8 June
20042025
Xu Jianlyu Female 50 Director Incumbent 9 June 8 June2022 2025
Zheng Male 37 Director Incumbent 9 June 8 JuneHuisheng 2022 2025
Director
Vice
Liu Male 35 Controller of Incumbent 12 May 8 JuneDeming Global 2017 2025
Marketing
Department
38Lu Thai Textile Co. Ltd. Annual Report 2024
Zhang
Zhanqi Male 53 Director Incumbent
9 June 8 June
20222025580300580300
Vice
President
and Director
of the
Global
Zhang Marketing
Zhanqi Male 53 Department; Incumbent
6 June 8 June 580300 580300
Dean of Lu 2016 2025
Thai
Engineering
Technology
Research
Institute
Zhang
Keming Male 57 Director Incumbent
9 June 8 June
20222025377700377700
Chief
Accountant
Zhang and Director
Keming Male 57 of the Incumbent
6 June 8 June
2019 2025 377700 377700Financial
Management
Department
Director and
Du Lixin Male 50 Chief Incumbent 9 June 8 June
Engineer 2022 2025
250000250000
10
Zhou Zhiji Male 62 IndependentDirector Incumbent March
8 June
20192025
Qu Female 56 Independent 10 June 8 JuneDongmei Director Incumbent 2019 2025
Peng Yanli Female 64 IndependentDirector Incumbent
9 June 8 June
20222025
Quan
Yuhua Female 69
Independent
Director Incumbent
9 June 8 June
20222025
Shang Chairman of
Chenggang Male 52 the Board of Incumbent
June 14 8 June
Supervisors 2024 2025
330000330000
Liu Zilong Male 57 Supervisor Incumbent 6 June 8 June2007 2025 10000 10000
Supervisor
Chairman of
the Labor
Dong Male 56 UnionShibing Manager of Incumbent
6 June 8 June
2007202550005000
Logistics
Management
Department
President
Assistant
Yu Male 57 Head of 6 June 8 JuneShouzheng Energy and Incumbent 2007 2025 383100 383100
Environment
Protection
39Lu Thai Textile Co. Ltd. Annual Report 2024
Department
Head of
Guo Heng Male 53 Functional
18 8 June
Fabric Incumbent January 2025 300000 300000
Product Line 2018
Deputy
Head of
Yarn Dyed
Fabric
Product
Lyu Line
Wenquan Male 52 Manager of Incumbent
9 June 8 June
Yarn Dyed 2022 2025
200000200000
Fabric
Production
and
Management
Department
Deputy
Head of
Yarn Dyed
Fabric
Product
Xu Feng Male 48 Line. Head Incumbent 9 June 8 June 190000 190000
of Overseas 2022 2025
Operation
and
Management
Centre
Zheng Male 59 Board Incumbent April 25 8 JuneWeiyin Secretary 2024 2025 40000 40000
Zhang Chairman of 8
Shougang Male 55 the Board of Former February
14 June 73100 73100
Supervisors 2018 2024
Dean of Lu
Thai
Li Wenji Male 58 Engineering
21
Technology Former
8 June
2016 December 260000 260000
Research 2024
Institute
Total -- -- -- -- -- -- 3147490 0 0 0 3147490 --
Indicate by tick mark whether any director supervisor or senior management departed the Company
before the expiry of their tenures during the Reporting Period.□ Yes □ No
Mr. Zhang Shougang Chairman of the Board of Supervisors resigned from his positions as
Supervisor and Chairman of the 10th Board of Supervisors on 14 June 2024 due to personal reasons.After his resignation he continued to serve as Deputy Party Secretary of the Company.Change of directors supervisors and senior management
□ Applicable □ Not applicable
Name Office Title Type of Change Date of Change Reason for Change
Fujiwara Matsuzaka Senior management Contract termination 2 January 2024 Job transfer
40Lu Thai Textile Co. Ltd. Annual Report 2024
Zhang Keming Board Secretary Contract termination 19 April 2024 Job transfer
Zheng Weiyin Board Secretary Appointment 25 April 2024 Job transfer
Shang Chenggang Senior management Contract termination 25 May 2024 Job transfer
Zhang Shougang Chairman of theBoard of Supervisors Former 14 June 2024 Personal reasons
Shang Chenggang Chairman of theBoard of Supervisors Election 14 June 2024 Job transfer
Li Wenji Senior management Contract termination 21 December 2024 Personal reasons
2. Biographical information
Professional backgrounds major work experience and current duties in the Company of the
incumbent directors supervisors and senior management:
1. Mr. Liu Zibin: Chairman and President of the Company born in 1965 with a master degree. He
served as the GM and Chairman of Zibo Lucheng Textile Co. Ltd. And he currently serves as the
Chairman and President of Luthai Textile Co. Ltd. the Chairman of Lufeng Company Limited the
Chairman of Zibo Xinsheng Thermoelectric Co. Ltd. the Chairman of Zibo Lu Qun Textile Co.Ltd. the Chairman of Luthai (Hong Kong) Co. Ltd. the Chairman of Shandong Lulian New
Materials Co. Ltd. the Chairman of Shandong Lujia Import and Export Co. Ltd. and the Chairman
of Hainan Huilin International Holdings Co. Ltd.
2. Mr. Xu Zhinan: Vice Chairman of the Company born in 1930 Thai nationality. He used to be
Director and GM of Thai Fibre Cloth Factory Co. Ltd. Director of Thai Fibre Co. Ltd. Director of
Thai Fibre Printing and Dyeing Co. Ltd. Director and Deputy GM of Lu Thai Textile Co. Ltd.And he currently serves as the Director and Deputy Chairman of the Company and GM of Thailand
Fiber Co. Ltd.
3. Ms. Xu Jianlyu: Director of the Company born in 1975 Thai nationality. She currently serves as
President of Cassardi International Co. Ltd.
4. Mr. Zheng Huisheng: Director of the Company born in 1988 Thai nationality. He currently
serves as Director of Cassardi International Co. Ltd.
5. Mr. Liu Deming: Director of the Company Deputy Head of Global Marketing Department born
in 1990 with a master degree. Currently he serves as Chairman and GM of Zibo Lucheng Textile
Investment Co. Ltd. Director of Lu Thai Textile Co. Ltd. and Deputy Head of Global Marketing
Department of Lu Thai Textile Co. Ltd. 6. Mr. Zhang Zhanqi: Director Vice President and Head
of Global Marketing Department of the Company Director of Lu Thai Engineering Technology
Research Institute and General Manager of LuFeng Company Limited born in 1972 with a master
degree of business administration. Also he serves as a Senior Engineer once was the Factory
Director of Fabric Finishing Factory and Manager of Quality Management Department of the
Company.
7. Mr. Zhang Keming: Director of the Company Chief Accountant and Head of the Financial
Management Department born in 1968. Holds an MBA is a Senior Accountant and formerly
served as Deputy Manager and Manager of the Finance Department and Board Secretary of the
Company.
8. Mr. Du Lixin: Director of the Company and Chief Engineer born in 1975. Previously held
various positions at Lu Thai including spinning operator production planner at the Weaving
Factory Deputy Director of the Dispatch Office of the Production Department Factory Director of
41Lu Thai Textile Co. Ltd. Annual Report 2024
the Weaving Factory Manager of the Weaving Business Unit Deputy Manager of the Production
Department and Executive Dean of Lu Thai Engineering Technology Research Institute.
9. Mr. Zhou Zhiji: Independent Director of the Company born in 1963 with a bachelor degree. He
is in possession of the certificates of CPA and Senior Accountant. Now he serves as a Supervisor
of Shandong Jinheng Consulting Co. Ltd. Director of Shandong Menglv Information Technology
Co. Ltd. and Director of Shandong Fabric Button Network Technology Co. Ltd. He served as a
cadre of Shandong Provincial Department of Finance Director of department of Shandong
accounting firm Chief Accountant of Shandong Zhengyuan Accounting Firm Director and
Manager of Shandong Yingshida Enterprise Management Consulting Co. Ltd. chairman of
Shandong Jinheng Consulting Co. Ltd.
10. Ms. Qu Dongmei: Independent Director of the Company born in 1969 holds a Doctorate in
Economic Law. Formerly a Professor at the School of Law Shandong Normal University.Currently serves as a Master’s Supervisor in Civil and Commercial Law at Shandong Normal
University a lawyer at Grandall Law Firm (Jinan) an arbitrator of the Jinan Arbitration
Commission and a public mediator at the China Securities Capital Market Legal Service Centre.
11. Ms. Peng Yanli: Independent director of the Company born in 1961 with a master degree of
business administration. She is a senior engineer. As a former official in the Former Ministry of the
Textile Industry and the former China Textile Federation she served as president of China Wool
Textile Association deputy secretary general of China National Textile and Apparel Council vice
chairman of China Textile Engineering Society and deputy director of China Textile Information
Centre.
12. Ms. Quan Yuhua: Independent Director of the Company born in 1956 with a bachelor degree.
She is a Senior Accountant. Moreover she served as Manager of the Financing Department of the
CCB Shandong Branch Trust and Investment Company the Director Assistant in the Information
and Research Office the Entrusted Loan Office and the Fee-based Business Department of the
CCB Shandong Branch and the level-5 customer manager in the Zhenzhuquan Branch of CCB in
Jinan City.
13. Mr. Shang Chenggang: Chairman of the Board of Supervisors of the Company. Born in 1973
he served as Deputy Director Director of GM office Manager of Enterprise Management
Department Management Representative and Manager of Garment Production Department Head
of Garment Manufacturing Centre & Manager of Garment Production Management Department of
the Company. He now serves as Director of the garment product line.
14. Mr. Liu Zilong: Supervisor of the Company born in 1968 with a master degree of business
administration. In addition he has served as the GM of Luthai (Hong Kong) since 2002.
15. Mr. Dong Shibing: Supervisor of the Company born in 1969 formerly Deputy Director of the
GM’s Office. Currently serves as Chairman of the Labour Union Manager of the Logistics
Management Department and General Manager of Zibo Banyang Villa Hotel Co. Ltd.
16. Mr. Yu Shouzheng: President Assistant Head of the Energy and Environmental Protection
Department of the Company GM of Zibo Xinsheng Thermal Power Co. Ltd. born in 1968 with a
master degree of business administration. As an engineer he once worked as the Director of the
Power Department and Manager of the Energy Division of the Company.
17. Mr. Guo Heng: Head of Functional Fabric Product Line. Born in 1972 he served as the deputy
director of the spinning factory of Lu Thai the deputy manager of the yarn business department
and the manager of the yarn business department and head of enterprise management department of
Lu Thai.
42Lu Thai Textile Co. Ltd. Annual Report 2024
18. Mr. Lyu Wenquan: Deputy Head of the Yarn-dyed Fabric Product Line Manager of the Yarn-
dyed Production Management Department born in 1973. He serves as a Senior Engineer as well as
a Chief Technician in Qilu. Moreover he is one of the middle-aged and young experts in Zibo City
and one of the “Torch Talents” for Zibo High-tech Zone. In addition he served as a Factory
Director and the Manager of the Fabric Finishing Business Department of Lu Thai. 19. Mr. Xu
Feng: Deputy Head of the yarn-dyed Fabric Product Line Head of Overseas Operation and
Management Centre born in 1977. He is an engineer and served as Assistant Manager of the
Bleaching and Dyeing Business Department.
20. Mr. Zheng Weiyin: Board Secretary and Manager of the Securities Department born in 1966
holds a bachelor’s degree. Previously served as Head of the Securities Section and Deputy Manager
of the Securities Department of the Company.Offices held concurrently in shareholding entities:
□ Applicable □ Not applicable
Office held in Remuneration or
Name Shareholding Entity the Allowance fromShareholding Start of Tenure End of Tenure the Shareholding
Entity Entity
Liu Zibin Zibo Lucheng TextileInvestment Co. Ltd. Director 26 February 1999 Not
Xu Zhinan Tailun (Thailand)Textile Co. Ltd. GM 29 January 1985 Not
Liu Deming Zibo Lucheng Textile Chairman andInvestment Co. Ltd. GM 1 February 2017 Not
Mr. Liu Zibin is the Director of Zibo Lucheng Textile Investment Co. Ltd. holding 4% equities of
Explanations Zibo Lucheng Textile Investment Co. Ltd. Basic information of Mr. Liu Zibin: Chinese no right of
about holding residence in other countries or regions. Mr. Liu Deming holds the post of Chairman and GM of Zibo
posts in Lucheng Textile Investment Co. Ltd. holding 21% equities of Zibo Lucheng Textile Investment Co.shareholders’ Ltd. Basic information of Mr. Liu Deming: Chinese no right of residence in other countries or
companies regions. Mr. Xu Zhinan is the sponsor of foreign capital of the Company shareholder of Tailun(Thailand) Textile Co. Ltd. and Tailun (Thailand) Textile Co. Ltd. is the second largest shareholder
of the Company. Basic information about Mr. Xu Zhinan: Thai.Offices held concurrently in other entities:
□ Applicable □ Not applicable
Name Other Entity Office Held in End of
Remuneration or
the Entity Start of Tenure Tenure Allowance fromthe Entity
LuFeng Company Limited Zibo
Luqun Textile Co. Ltd. Zibo
Xinsheng Thermal Power Co.Ltd. Lu Thai (HK) Textile Co. Chairman of
Liu Zibin Ltd Shandong Lulian New the Board 7 December 2015 Not
Materials Co. Ltd. Shandong Director GM
Lujia Import and Export Co. Ltd.Hainan Huilin International
Holdings Co. Ltd.LuFeng Company Limited Zibo
Xinsheng Thermal Power Co.Liu Deming Ltd. Zibo Luqun Textile Co. Ltd.Shandong Lulian New Materials Director 21 August 2017 Not
Co. Ltd. Beijing Zhishu
Management Consulting Co. Ltd.Zhang LuFeng Company Limited Director and 5 July 2014 Not
43Lu Thai Textile Co. Ltd. Annual Report 2024
Zhanqi GM
Zibo Luqun Textile Co. Ltd.Zhang Shandong Lulian New Materials
Keming Co. Ltd. LuFeng Company
Director 3 March 2022 Not
Limited Shanghai Lu Thai Supervisor
Textile Garment Co. Ltd.Zhou Zhiji Shandong Jinheng ConsultingCo. Ltd Supervisor 1 October 2015 Yes
Qu Dongmei Grandall Law Firm (Jinan) Lawyer 1 September 2002 Yes
Liu Zilong Lu Thai (Hong Kong) Textile Co.Ltd. GM 9 May 2005 Not
Dong Zibo Banyang Villa Hotel Co. Director and
Shibing Ltd. GM 2 April 2021 Not
Yu Zibo Xinsheng Thermal Power Director and
Shouzheng Co. Ltd. GM 13 April 2021 Not
Guo Heng Shandong Lulian New Materials Director andCo. Ltd. GM 28 August 2021 Not
Explanations
about
holding Except for independent directors all other entities the Company’s directors supervisors and senior
posts in management hold posts are majority-owned subsidiaries of the Company.other entities
Punishments imposed in the recent three years by the securities regulator on the incumbent directors
supervisors and senior management as well as those who left in the Reporting Period:
□ Applicable□ Not applicable
3. Remuneration of Directors Supervisors and Senior Management
Decision-making procedure determination basis and actual payments of remuneration for directors
supervisors and senior management:
The Remuneration and Appraisal Committee under the Board of Directors of the Company is liable
to not only preparing appraisal criteria for directors and senior management of the Company and
appraising them but also preparing and reviewing remuneration policies and plans for directors and
senior management of the Company who is liable to the Board of Directors. The Remuneration and
Appraisal Committee shall propose the remuneration amount of directors and senior management
according to the Company’s management condition and post performance results and shall report
to the Board of Directors for ratification after the approval by voting.The Controller of Financial Management Department the Corporate Management Department and
the HR Department of the Company shall be liable to the preliminary preparation for the decision of
the Remuneration and Appraisal Committee including but not limited to providing information
such as the Company’s main financial indicators and the completion of management objectives.The Remuneration and Appraisal Committee shall confirm the annual appraisal results of directors
and officers in accordance with the completion of the Company’s performance and the
remuneration criteria for officers and shall report to the Board of Directors for ratification after the
approval by voting.The number of incumbent directors supervisors and senior executives is 20 among which there are
18 persons actually receiving remuneration from the Company during the Reporting Period. By 31
December 2024 the total amount of annual payment drawn from the Company by directors
supervisors and senior executives is RMB14913900 (before tax).Remuneration of directors supervisors and senior management for the Reporting Period
44Lu Thai Textile Co. Ltd. Annual Report 2024
Unit: RMB’0000
Total Before-tax Any
Name Gender Age Office Title Incumbent/Former Remuneration Remuneration
from the Company from RelatedParty
Liu Zibin Male 60 Chairman and President Incumbent 198.11 Not
Xu Zhinan Male 95 Vice Chairman Incumbent 0 Not
Xu Jianlyu Female 50 Director Incumbent 0 Not
Zheng
Huisheng Male 37 Director Incumbent 0 Not
Director Vice Controller
Liu Deming Male 35 of Global Marketing Incumbent 110.62 Not
Department
Zhang Director Vice President
Zhanqi Male 53 Controller of Global Incumbent 113.91 NotMarketing Department
Director Board Secretary
Zhang Male 57 Chief AccountantKeming Controller of Financial Incumbent 111.94 Not
Management Department
Director Chief Engineer
Du Lixin Male 50 Executive Dean of Lu ThaiEngineering Technology Incumbent 111.31 Not
Research Institute
Zhou Zhiji Male 62 Independent Director Incumbent 7 Not
Qu
Dongmei Female 56 Independent Director Incumbent 7 Not
Peng Yanli Female 64 Independent Director Incumbent 0 Not
Quan
Yuhua Female 69 Independent Director Incumbent 7 Not
Shang Chairman of the Board of
Chenggang Male 52 Supervisors and Head of Incumbent 93.96 Notthe Garment Product Line
Liu Zilong Male 57 Supervisor Incumbent 84.08 Not
Supervisor Manager of the
Dong Male 56 Logistics ManagementShibing Department Chairman of Incumbent 84.63 Not
the Labour Union
President Assistant Head
Yu Male 57 of Energy andShouzheng Environment Protection Incumbent 91.86 Not
Department
Guo Heng Male 53 Head of Functional FabricProduct Line Incumbent 82.31 Not
Deputy Head of Yarn
Lyu Dyed Fabric Product Line
Wenquan Male 52 Manager of Yarn Dyed Incumbent 80.73 NotFabric Production and
Management Department
Deputy Director of the
Xu Feng Male 48 Yarn-dyed Fabric Product Incumbent 91.87 Not
Line
Zheng
Weiyin Male 59 Board Secretary Incumbent 69.16 Not
Zhang Male 55 Chairman of the Board ofShougang Supervisors Former 63.75 Not
Li Wenji Male 58 Dean of Lu Thai Former 82.15 Not
45Lu Thai Textile Co. Ltd. Annual Report 2024
Engineering Technology
Research Institute
Total -- -- -- -- 1491.39 --
Other notes:
□ Applicable□ Not applicable
VI Performance of Duty by Directors in the Reporting Period
1. Board Meeting Convened during the Reporting Period
Meeting Convened DisclosureDate Date Meeting Resolutions
18th Meeting of
the 10th Board of 19 January 20 January Three proposals including the Proposal on Routine Related
Directors 2024 2024 Transactions were deliberated and approved
19th Meeting of
the 10th Board of 19 March 20 March Two proposals including the Proposal on Routine Related
Directors 2024 2024 Transactions were deliberated and approved.
20th Meeting of Fifteen proposals including the Proposal on the 2023 Annual Work
the 10th Board of 10 April 12 April Report of the Board of Directors and the Proposal on the 2023
Directors 2024 2024 Annual Work Report of the President were deliberated andapproved.
21th Meeting of
the 10th Board of 25 April 27 April Two proposals including the Proposal on the 2024 First Quarter
Directors 2024 2024 Report were deliberated and approved.
22nd Meeting of Six proposals including Proposal on Modifying Certain Clauses of
the 10th Board of 28 May 29 May2024 2024 the Company’s Articles of Association According to the GeneralDirectors Meeting’s Authorization were deliberated and approved.
23rd Meeting of
the 10th Board of 6 July 2024 9 July 2024 Two proposals including the Proposal on Acquiring Minority Equity
Directors Interests in a Subsidiary were deliberated and approved.
24th Meeting of Seven proposals including the Proposal on the Full Text and
the 10th Board of 28 August 30 August Summary of the Company’s 2024 Semi-annual Report and the
Directors 2024 2024 Proposal on the Profit Distribution Plan for the First Half of 2024were deliberated and approved.
25th Meeting of 12 13
the 10th Board of September September Proposal on Additional Investment in Shandong Lulian New
Directors 2024 2024 Materials Co. Ltd. was deliberated and approved.
26th Meeting of
the 10th Board of 29 October 31 October Three proposals including the Proposal on the Company’s 2023 Q1
Directors 2024 2024 Report were deliberated and approved.
27th Meeting of 30 31 Two resolutions the Proposal on Waiving the Notice Period for the
the 10th Board of December December 27th Meeting of the 10th Board of Directors and the Proposal on Not
Directors 2024 2024 Lowering the Conversion Price of Lu Thai Convertible Bonds weredeliberated and approved.
2. Attendance of Directors at Board Meetings and General Meetings
Attendance of Directors at Board Meetings and General Meetings
Total Number Board The Director
of Board Board Board Meetings Board Meetings Failed to
Director Meetings the Meetings Attended by Way
Meetings Attend Two General
Director was Attended on of Attended
the
Director Consecutive Meetings
Eligible to Site Telecommunication Through aProxy Failed to
Board Attended
Attend Attend Meetings(yes/no)
Liu Zibin 10 10 0 0 0 Not 4
46Lu Thai Textile Co. Ltd. Annual Report 2024
Xu
Zhinan 10 0 10 0 0 Not 0
Liu
Deming 10 10 0 0 0 Not 2
Xu
Jianlyu 10 0 10 0 0 Not 0
Zheng
Huisheng 10 0 10 0 0 Not 0
Zhang
Zhanqi 10 10 0 0 0 Not 5
Zhang
Keming 10 10 0 0 0 Not 5
Du Lixin 10 10 0 0 0 Not 5
Zhou
Zhiji 10 1 9 0 0 Not 2
Qu
Dongmei 10 0 10 0 0 Not 0
Peng
Yanli 10 1 9 0 0 Not 0
Quan
Yuhua 10 1 9 0 0 Not 1
Why any director failed to attend two consecutive board meetings:
Not applicable
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any directors raised any objections on any matter of the Company.□ Yes□ No
No such cases in the Reporting Period.
4. Other Information about the Performance of Duty by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.□ Yes □ No
Suggestions from directors adopted or not adopted by the Company
During the Reporting Period directors of the Company carried out their work conscientiously and
responsibly in strict accordance with the Company Law Securities Law Code of Corporate
Governance for Listed Companies in China Self-Regulatory Guidelines No. 1 for Companies Listed
on Shenzhen Stock Exchange - Standard Operation of Listed Companies on the Main Board
Articles of Association and Rules of Procedure of the Board of Directors. Based on the Company’s
reality they made scientifically sound and careful decisions on the Company’s various reviewed
matters and formed opinions through full communication and discussion. They resolutely
supervised and promoted the implementation of the resolutions of the Board of Directors to ensure
scientific timely and efficient decision-making and fully safeguard the legitimate rights and
interests of the Company and all shareholders.VII. Performance of Duty by Specialized Committees under the Board in the Reporting
Period
Number Important Other Details
Committee Members of Convened Content Opinions and Information About
Meetings Date Suggestions about the Issues with
47Lu Thai Textile Co. Ltd. Annual Report 2024
Convened Raised Performance Objections
of Duty (If Any)
The opinions were
as follows:
(1) Preparing the
Company’s
financial
accounting
statements in
accordance with
the Company’s
accounting policies
and applying
accounting policies
properly it carried
out accounting
estimate fully and
reasonably which
conformed to the
New Accounting
Mainly the Standards for
Company’s Business
financial Enterprises
statements accounting system
submitted to for enterprises and
Grant Thornton the requirements of
Certified Public relevant provisions
Accountants issued by theZhou
Zhiji Qu LLP for
Ministry of
Finance;
Audit Dongmei 17 preliminary
Committee and 1 January audit were
(2) Unit statements -
Zhang 2024 reviewed
of the Company’s
financial
Keming writtenopinions were statements that
expressed and were included in
communication the scope of
with Leader of consolidation were
annual audit complete while
accountant the statement
project was consolidation basis
conducted. was accurate;(3) (3) The
financial
statements of the
Company were
objective true and
accurate without
any major
misstatement or
omission;
(4) And due to the
fact that there still
is a period of time
from the day for
review of the
financial
statements to the
day for audit report
and financial
statement release
48Lu Thai Textile Co. Ltd. Annual Report 2024
the Financial
Management
Department of the
Company was
submitted to focus
on and cope with
post balance sheet
events so as to
ensure the fairness
authenticity and
integrity of the
financial
statements. The
Audit Committee
thought that the
financial
accounting
statements could
be submitted to
Annual Certified
Public Accountant
for audit according
to annual audit
plan. Mainly the
Company’s
financial
statements
submitted to Grant
Thornton Certified
Public
Accountants LLP
for preliminary
audit were
reviewed written
opinions were
expressed and
communication
with Leader of
annual audit
accountant project
was conducted.The following (1) Regarding the
matters were written opinion
mainly audited: issued after the
(1) The accounting firm’s
Company’s preliminary audit
2023 Annual opinion on the
Financial Company’s
Zhou Report audited financial
Audit Zhiji QuDongmei 5 10 April
by the statements: The
Committee 2024 accounting procedure of -Liu firm. financial statement
Deming (2) Evaluation preparation was
Report on the reasonable and
Performance of normative as the
the Accounting Company
Firm in 2023 conformed to the
and Report on New Accounting
the Fulfilment Standards for
of Supervisory Business
49Lu Thai Textile Co. Ltd. Annual Report 2024
Responsibilities Enterprises and
by the Audit relevant provisions
Committee. of the Company’s
(3) Proposal on financial system
the renewal of which fairly
Grant Thornton reflected the
Certified Public Company’s assets
Accountants liabilities
LLP As the shareholders’
Company’s equity and
2024 Annual operating results
Financial Audit by 31December
and Internal 2023 which were
Control Audit true accurate and
Institution. complete. The
(4) 2023 Audit Committee
Internal Control thought that the
Assessment Company’s 2023
Report and Annual Financial
issuance of Accounting Report
written that was
assessment preliminarily
opinions approved by Grant
(5) Report of Thornton Certified
the 2023 Public
Annual Deposit Accountants LLP
and Use of the could be submitted
Raised Funds. to the 20th
(6) Report on Meeting of the
the 10th Board of
Implementation Directors for
of the 2023 review. (2)
Annual Internal Regarding the
Audit Plan. written opinion
(7) 2024 issued on the
Annual Internal Company’s 2023
Audit Plan. internal control
self-assessment
report: According
to Fundamental
Norms for Internal
Control of
Enterprises
Supporting
Guidelines for
Internal Control of
Enterprises and
relevant provisions
prescribed by
securities
regulators for the
internal control
establishment of
listed companies
combining the
actual status of the
Company’s
business the
Company
established the
50Lu Thai Textile Co. Ltd. Annual Report 2024
internal control
system that covers
all stages including
production and
management as
well as adapts to
the Company’s
management
requirements and
development
needs. It is
relatively
normative and
complete for
which its
organization is
complete and
reasonably
designed its
implementation is
basically effective
effectively
protecting the
fundamental
interests of all
shareholders of the
Company. We
believe that the
assessment and
evaluation process
as well as the
format of the 2023
Annual Internal
Control Evaluation
Report comply
with the
requirements of the
Fundamental
Norms for Internal
Control of
Enterprises and
Regulations on
Information
Disclosure and
Compilation for
Companies Public
Offering Securities
No. 21 -- General
Provisions on
Annual Internal
Control
Assessment
Reports. The
report content
comprehensively
objectively and
truthfully reflects
the actual situation
of the Company’s
current internal
51Lu Thai Textile Co. Ltd. Annual Report 2024
control system
construction
operation system
implementation
and supervision.The Company’s
internal control
system is sound
and internal
controls are
effective.The Audit
Committee thought
that the 2023
Internal Control
Self-evaluation
Report could be
submitted at the
20th Meeting of
the 10th Board of
Directors for
review.The following The following
matters were proposals were
mainly audited: adopted by a
(1) Special combination of on-
Report on the site and
Deposit and telecommunication
Zhou Use of the voting: Special
Audit Zhiji Qu 22 April Raised Funds Report on the
Committee Dongmei 5 of 2024 Q1. Deposit and Use of -Liu 2024 (2) Report on the Raised Funds
Deming the of 2024 Q1 Report
Implementation on the
of Internal Implementation of
Audit Plan of Internal Audit Plan
2024 Q1. of 2024 Q1 and
(2) 2024 Q1 the 2024 Q1
Report. Report.The following
The following proposals were
matters were adopted by a
mainly audited: combination of on-
(3) Special site and
Interim Report telecommunication
2024 of the voting: Special
Deposit and Interim Report
Zhou Use of the 2024 of the
Audit Zhiji Qu 19 August Raised Funds. Deposit and Use of
Committee Dongmei 5 2024 (2) Interim the Raised Funds -Liu Report 2024 on Interim Report
Deming the 2024 on the
Implementation Implementation of
of Internal Internal Audit
Audit Plan. Plan and the
(3) Interim Interim Financial
Financial Statements Report
Statements of 2024. The
Report of 2024 submission of the
first and third
52Lu Thai Textile Co. Ltd. Annual Report 2024
proposal to the
24th meeting of
the 10th Board of
Directors for
deliberation was
approved.The following
proposals were
adopted by a
The following combination of on-
matters were site and
mainly audited: telecommunication
(1) Special voting: Special
Report on the Report on the
Deposit and Deposit and Use of
Use of the the Raised FundsZhou Raised Funds of 2024 Q3 Report
Audit Zhiji Qu 25 on the
Committee Dongmei 5 October
of 2024 Q3. Implementation of -
Liu 2024 (2) Report onthe Internal Audit PlanDeming Implementation of 2024 Q3 and
of Internal Financial
Audit Plan of Statements of 2023
2024 Q3. Q3. The
(3) Financial submission of the
Statements of first proposal to
2024 Q3. the 26th meetingof the 10th Board
of Directors for
deliberation was
approved.The time
arrangement plan
for 2024 annual
financial audit
The time work was
Zhou arrangement for unanimously
Audit Zhiji Qu 11 the Company’s
determined at the
meeting through
Committee Dongmei 5 November 2024 annual -Liu 2024 financial audit the negotiation
Deming work was with the 2024
negotiated. annual auditinstitution Grant
Thornton Certified
Public
Accountants LLP
of the Company.The main topics The following
of the meeting proposals were
were: adopted by voting
Peng (1) The at the meeting: The
Yanli Liu Proposal of Lu Proposal of Lu
Remuneration Zibin 10 April Thai Textile Thai Textile Co.Committee Zhou 2 2024 Co. Ltd. on the Ltd. on the -Zhiji and Appraisal Appraisal Results
Qu Results of of Directors and
Dongmei Directors and Senior
Senior Management
Management Personnel in 2023
Personnel in the Appraisal
53Lu Thai Textile Co. Ltd. Annual Report 2024
2023. (2) The Report on the
Appraisal Performance of the
Report on the 2023 Restricted
Performance of Share Incentive
the 2023 Scheme (Reserved
Restricted Portion) the
Share Incentive Proposal on the
Scheme Achievement of
(reserved Lifting the
portion). (3) Restriction
The Proposal Conditions in the
on the Second Restriction
Achievement of Period for the
Lifting the Reserved Grant of
Restriction the 2021 Restricted
Conditions in Share Incentive
the Second Scheme. The
Restriction submission of the
Period for the first and third
Reserved Grant proposal to the
of the 2021 20th meeting of
Restricted the 10th Board of
Share Incentive Directors for
Scheme. deliberation was
approved.The following
The main topics proposals were
of the meeting adopted by voting
were: (1) at the meeting: The
Appraisal Appraisal Report
Report on the on the Personal
Personal Performance of the
Performance of 2023 Restricted
the 2023 Share Incentive
Restricted Scheme and the
Peng Share Incentive Proposal on the
Yanli Liu Scheme. (2) Achievement ofLifting the
Remuneration ZibinZhou 2 25 May
The Proposal Restriction
Committee Zhiji and 2024
on the
Achievement of Conditions in the
-
Qu Lifting the Third Restriction
Dongmei Restriction Period for the
Conditions in First Grant of the
the Third 2021 Restricted
Restriction Share Incentive
Period for the Scheme. The
First Grant of submission of the
the 2021 second proposal to
Restricted the 22nd meeting
Share Incentive of the 10th Board
Scheme. of Directors fordeliberation was
approved.Liu Zibin The Overall The following
Xu Strategic proposal was
Strategy Zhinan 10 April Planning of Lu adopted by a
Committee Liu 1 Thai Textile of combination of on- -Deming 2024 2022 to 2026 site and
Xu (2024 Revised telecommunication
Jianlyu Version) was voting: The
54Lu Thai Textile Co. Ltd. Annual Report 2024
Zheng deliberated. Overall Strategic
Huisheng Planning of Lu
Zhang Thai Textile of
Zhanqi 2022 to 2026
Zhang (2024 Revised
Keming Version).Du Lixin
Zhou
Zhiji Qu
Dongmei
Peng
Yanli
Quan
Yuhua
The Proposal on
the Nomination of
Qu The main topic Candidates for the
Dongmei of the meeting Audit Committee of
Liu Zibin was the the 10th Board of
Xu Proposal on the Directors wasNomination Zhinan 2 16 March Nomination of deliberated andCommittee -Zhou 2024 Candidates for approved as well
Zhiji the Audit as submitted to the
Peng Committee of 19th meeting of
Yanli the 10th Board the 10th Board ofof Directors. Directors for
deliberation and
approval.The Proposal on
the Nomination of
The main topic Senior
of the meeting Management
Qu was the Personnel and the
Dongmei Proposal on the Board Secretary
Liu Zibin Nomination of Candidates for the
Nomination Xu Senior 10th Board of
Committee Zhinan 2
22 April
2024 Management Directors was -Zhou Personnel and deliberated and
Zhiji the Board approved as well
Peng Secretary as submitted to the
Yanli Candidates for 20th meeting of
the 10th Board the 10th Board of
of Directors. Directors for
deliberation and
approval.VIII. Performance of Duty by the Board of Supervisors
Indicate by tick mark whether the Board of Supervisors found any risk to the Company during its
supervision in the Reporting Period.□ Yes□ No
The Board of Supervisors raised no objections in the Reporting Period.IX. Employees
1. Number Functions and Educational Backgrounds of Employees
Number of in-service employees of the Company as the
parent at the period-end 7589
55Lu Thai Textile Co. Ltd. Annual Report 2024
Number of in-service employees of major subsidiaries at
the period-end 16399
Total number of in-service employees 23988
Total number of paid employees in the Reporting Period 23988
Number of retirees to whom the Company as the parent or
its major subsidiaries need to pay retirement pensions 0
Functions
Function Employees
Production 17799
Sales 582
Technical 4939
Financial 106
Administrative 562
Total 23988
Educational Backgrounds
Educational Background Employees
Doctor 3
Master 87
Bachelor 1465
College 4517
High school and below 17916
Total 23988
2. Employee Remuneration Policy
The Company has formulated a remuneration management system with its principle being
“payment according to one’s work and more pay for more work”. Through post evaluation and
through researches of Social salary levels carried out as multi-faceted as well as the formulation of
the reasonable salary management system fully demonstrates the internal fairness self-fairness and
external fairness. It has greatly motivated the employees and enhanced the corporate management.
3. Employee Training Plans
Trainings will be carried out according to requirements of the Company’s strategic development
planning improvement of employees’ capability performance management employees’ career
planning etc. The annual training plan is determined by carrying out researches on training needs.And the training courses fall into three major categories i.e. management technical skills and
general knowledge. Through these trainings the Company will improve the knowledge structure of
its employees improve their job skills and increase their comprehensive quality to provide excellent
human resources for the long-term sustained and stable development of the Company.
4. Labor Outsourcing
□ Applicable□ Not applicable
X. Profit Distributions (in the Form of Cash and/or Stock)
How the profit distribution policy especially the cash dividend policy was formulated executed or
revised in the Reporting Period:
□ Applicable□ Not applicable
Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for
56Lu Thai Textile Co. Ltd. Annual Report 2024
shareholders despite the facts that the Company has made profits in the Reporting Period and the
profits of the Company as the parent distributable to shareholders are positive.□ Applicable□ Not applicable
Final dividend plan for the Reporting Period
□ Applicable □ Not applicable
Bonus shares for every ten shares (share) 0
Dividend for every ten shares (RMB) (tax inclusive) 1.00
Bonus issue from capital reserves (share/10 shares) 0
Total shares as the basis for the profit distribution
proposal (share) 817306010
Cash dividends (RMB) (tax inclusive) 81730601.00
Cash dividends in other forms (such as share repurchase)
(RMB) 37866957.62
Total cash dividends (including those in other forms)
(RMB) 119597558.62
Distributable profit (RMB) 5791958278.26
Total cash dividends (including those in other forms)
as % of total profit distribution 100%
Cash Dividend Policy
If the Company is in a mature development stage and has plans for any significant expenditure in profit allocation the
ratio of cash dividends in the profit allocation shall be 40% or above.Details About the Proposal for Profit Distribution and Converting Capital Reserve into Share Capital
Based on a capital base of 817306010 shares as at 31 December 2024 a cash dividend of RMB1.00 (inclusive of tax)
will be distributed for every ten shares resulting in a total dividend payout of RMB81730601.00. The individual
income tax for A Share shall be subject to related regulations under CS [2015] No. 101 Notice on Certain Question
about the Differentiated Individual Income Tax Policy for Cash Dividend of Listed Companies jointly issued by
Ministry of Finance State Administration of Taxation (“SAT”) and CSRC. The individual income tax for B Share shall
be conversed to HKD based on the central parity rate on interbank exchange market released by the People’s Bank of
China on the following day after shareholder’s meeting (for domestic individual shareholders tax is paid pursuant to CS
[2015] No. 101; for foreign shareholders tax is free pursuant to CSZ (1994) No. 020 regulations; and non-residential
corporate shareholders is entitled to a 10% reduction of enterprise income tax according to related regulations under
Enterprise Income Tax Law of the People’s Republic of China). Since the Company is in the period of transferring
convertible bonds into shares the profit distribution will be conducted based on the total share capital on the equity
registration date for implementing this profit distribution plan with no change in the amount per share.XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable □ Not applicable
1. Equity Incentive
No. DeliberationTime Relevant Meeting Overview of Execution Disclosure Index
The Board of Directors reviewed and approved
18th meeting of the Proposal on Repurchase and Cancel
the 10th Board of Authorized but Unlocked Restricted Share of For details see the relevant
1 19 January Directors and 12th
the Incentive Personnel not Conforming to the
2024 meeting of the Incentive Condition. The Board of Supervisors
announcements disclosed
on 20 January 2024 on
10th Board of reviewed and approved the foregoing proposal
Supervisors and issued the written review opinions. Beijing
www.cninfo.com.cn.DHH Law Firm Qingdao Office issued a legal
opinion.
57Lu Thai Textile Co. Ltd. Annual Report 2024
It deliberated on and approved the Proposal on
The 1st Repurchase and Cancel Authorized but For details see the relevant
5 February Extraordinary Unlocked Restricted Share of the Incentive announcement (No.: 2024-2 2024 Shareholders’ Personnel not Conforming to the Incentive 012) disclosed on 7
Meeting of 2024 Condition and disclosed the Announcement of February 2024 onCapital Reduction on Repurchase and Cancel www.cninfo.com.cn.Partial Restricted Shares on 7 February 2024.The Board of Directors reviewed and approved
the Proposal on the Achievement of Lifting the
Restriction Conditions in the Second
Restriction Period for the Reserved Grant of
the 2021 Restricted Share Incentive Scheme.
20th meeting of The Board of Supervisors reviewed and
the 10th Board of approved the foregoing proposal and issued the For details see the relevant
3 10 April Directors and 13th written review opinions. Beijing DHH Law announcement disclosed2024 meeting of the Firm Qingdao Office issued a legal opinion. on 12 April 2024 on
10th Board of The number of the subjects of incentive www.cninfo.com.cn.
Supervisors participating in the assessment in the second
restriction period for the reserved grant of the
2021 restricted share incentive scheme of the
Company were up to 340 and the total amount
of restricted shares that can be released was
2901500.
As audited and confirmed by SZSE and the
Shenzhen Branch of China Clear the For details see the relevant
24 April procedures of repurchasing and cancelling announcement (No.: 2024-4 2024 - 66500 shares of authorized and unlocked 030) disclosed on 24 Aprilrestricted share of the incentive personnel not 2024 on
conforming to the incentive condition were www.cninfo.com.cn.completed.The Company issued the Indicative
Announcement on the Trading on the Market of For details see the relevant
27 April Lifting the Restriction in the Second Restriction announcements (No.:5 2024 - Period for the Reserved Shares for Grant of the 2024-035) disclosed on 272021 Restricted Share Incentive Scheme. The April 2024 on
restricted shares released this time were listed www.cninfo.com.cn.and traded on 6 May 2024.The Board of Directors reviewed and approved
the Proposal on the Achievement of Lifting the
Restriction Conditions in the Third Restriction
Period for the First Grant of the 2021
Restricted Share Incentive Scheme and the
Proposal on Repurchase and Cancel
22nd meeting of Authorized but Unlocked Restricted Share of
the 10th Board of the Incentive Personnel not Conforming to the For details see the relevant
6 28 May 2024 Directors and 15th Incentive Condition. The Board of Supervisors announcement disclosedmeeting of the reviewed and approved the foregoing two on 29 May 2024 on
10th Board of proposals and issued the written review www.cninfo.com.cn.
Supervisors opinions. Beijing DHH Law Firm Qingdao
Office issued a legal opinion. In 2021 the
Company’s first restricted stock incentive plan
granted shares to 704 individuals whose third
restricted period conditions were met allowing
a total of 6901500 shares to be released from
restriction.The Company issued the Indicative For details see the relevant
Announcement on the Trading on the Market of announcement (No.: 2024-
7 4 June 2024 - Lifting the Restriction in the Third Restriction 047) disclosed on 1 June
Period for the First Grant of the 2021 2023 on
Restricted Share Incentive Scheme. The www.cninfo.com.cn.
58Lu Thai Textile Co. Ltd. Annual Report 2024
restricted shares released this time were listed
and traded on 7 June 2024.It deliberated on and approved the Proposal on
The 2nd Repurchase and Cancel Authorized but For details see the relevant
Extraordinary Unlocked Restricted Share of the Incentive announcement (No.: 2024-8 14 June 2024 Shareholders’ Personnel not Conforming to the Incentive 051) disclosed on 15 June
Meeting of 2024 Condition and disclosed the Announcement of 2024 onCapital Reduction on Repurchase and Cancel www.cninfo.com.cn.Partial Restricted Shares on 15 June 2024.As audited and confirmed by SZSE and the
Shenzhen Branch of China Clear the For details see the relevant
16 August procedures of repurchasing and cancelling announcement (No.: 2024-9 2024 - 59000 shares of authorized and unlocked 057) disclosed on 16restricted share of the incentive personnel not August 2024 on
conforming to the incentive condition were www.cninfo.com.cn.completed.Equity incentives for directors supervisors and senior management in the Reporting Period:
□ Applicable □ Not applicable
Unit: share
Number
Shares Exercise Number of Number
Share Share Feasible Shares Price of Share of Number
Options Options to Exercised Exercised Options Market Price Restricted of
Restricted
Shares The Grant
of
Restricted
Name Office Title Held at Granted Exercise During Shares Held at at the Shares
Released newly Price ofShares Restricted Sharesthe in the During the During the the Period-end Held at for the Granted shares Held atPeriod- Reporting the Reporting Reporting Period- (RMB/share) the during the
begin Period Reporting Period Period end Period- Reporting the (RMB/share)
Period (RMB/share) begin Period
Period-
Reporting end
Period
Board of
Directors
Vice
President
Head of
Global
Zhang Marketing
Zhanqi Department 190000 190000 0
and Dean of
Lu Thai
Engineering
Technology
Research
Institute
Director
Chief
Zhang Accountant
Keming Head of 110000 110000 0Financial
Management
Department
Director and
Du Lixin Chief 110000 110000 0
Engineer
Yu Senior
Shouzheng management 110000 110000 0
Guo Heng Seniormanagement 110000 110000 0
Lyu Senior
Wenquan management 70000 70000 0
Xu Feng Seniormanagement 95000 95000 0
Zheng Board
Weiyin Secretary 40000 40000 0
Total -- 0 0 0 0 -- 0 -- 835000 835000 0 -- 0
59Lu Thai Textile Co. Ltd. Annual Report 2024
Appraisal of and incentive for senior management
During the Reporting Period the Company constantly improved the performance evaluation
mechanism and made the evaluation and incentive of the Senior Executives concerned with the
Company’s performances and the individual working results. According to the overall development
strategy and the annual operating target of the Company at the period-begin the Company confirms
the annual performance comprehensive indication and the management duty of each Senior
Executives and executes the performance examination and the redemption of the rewards and
punishment for the Senior Executives by the Remuneration and Examination Committee affiliated
to the Board of Directors at the year-end. The Company will constantly improve the evaluation and
incentive mechanism that to tightly concern the salary of the Senior Executives with the
management level and the operating performance so that to fully mobilize and inspire the initiative
and creativity of them.
2. Implementation of Employee Stock Ownership Plans
□ Applicable□ Not applicable
3. Other Incentive Measures for Employees
□ Applicable □ Not applicable
For the second restricted period of the reserved grant of shares of the 2021 restricted share incentive
scheme the restricted shares were released for trading on 6 May 2024. Excluding directors and
senior executives the Company lifted the restrictions on 2426500 restricted shares for 331 mid-
level managers and core personnel. For the third restricted period of the initial grant of shares of the
2021 restricted share incentive scheme the restricted shares were released for trading on 7 June
2024. Excluding directors and senior executives the Company lifted the restrictions on 6391500
restricted shares for 695 mid-level managers and core personnel.XII Establishment and Execution of the Internal Control System for the Reporting Period
1. Establishment and Execution of the Internal Control System
According to Fundamental Norms for Internal Control of Enterprises Supporting Guidelines for
Internal Control of Enterprises and relevant provisions prescribed by securities regulators for the
internal control establishment of listed companies combining the actual status of the Company’s
business the Company established the internal control system that covers all stages including
production and management as well as adapts to the Company’s management requirements and
development needs. It is relatively normative and complete for which its organization is complete
and reasonably designed its implementation is basically effective and there is no substantial
omission so as to ensure that the Company’s operation and management is legal and compliant the
assets are safe and the financial reports and related information are true and complete and maintain
the fundamental interests of all shareholders of the Company.Within Reporting Period relevant systems and procedures were timely streamlined and optimized
and the sound operation of risk management and internal control system was ensured by the
Company in line with the change of all business procedures and audit results without any violation
of laws regulations or Articles of Association.
2. Material Internal Control Weaknesses Identified for the Reporting Period
□ Yes□ No
60Lu Thai Textile Co. Ltd. Annual Report 2024
XIII. Management and Control over Subsidiaries by the Company for the Reporting Period
Subsidiary Integration Integration Countermeasures Settlement
Follow-up
Plan Progress Problem Taken Progress SettlementPlan
-------
XIV. Internal Control Evaluation Report or Independent Auditor’s Report On Internal
Control
1. Internal Control Evaluation Report
Disclosure date of the internal
control self-evaluation report 10 April 2025
Index to the disclosed internal For details please refer to the Self-appraisal Report on Internal Control of Lu Thai
control self-evaluation report Textile Co. Ltd. simultaneously disclosed on www.cninfo.com.cn with the 2024Annual Report of the Company.Evaluated entities’ combined
assets as % of consolidated total 80.45%
assets
Evaluated entities’ combined
operating revenue as % of 86.75%
consolidated operating revenue
Identification standards for internal control weaknesses
Category Weaknesses in internal control over Weaknesses in internal control notfinancial reporting related to financial reporting
Great defect: (1) seriously violated the
Great defect: (1) malpractices of the national laws and regulations; (2) the
Directors Supervisors and Senior decision-making of the enterprise was
Executives; (2) the CPA founded the not scientific that led to the serious
current financial report occurred mistakes of itself; (3) outflow of the
significant misstatement while during management personnel or the technician
the implementation process of the personnel was serious; (4) frequently
internal control could not founded the appeared the negative news from the
misstatement; (3) the supervision of the Media; (5) the significant business
Audit Committee and the internal audit lacked of systematic control or the
institution of the Company on the systematic control was invalid; (6) the
internal control was invalid; (4) other result of the internal control assessment
defects that may cause the Company to which was the great defect event had
deviate significantly from its control not been revised. Significant defeat: (1)
Nature standard objectives. Significant defeat: (1) had violated the enterprise internalnot abide by the generally accepted regulations that caused rather serious
accounting principles to choose and losses; (2) significant business lacked of
apply the accounting policies; had not systematic control; (3) outflow of the
built up the anti-fraud and significant rather important personnel was serious;
counterbalance mechanism and control (4) the Media reported the negative
measures; (2) during the financial report news that caused rather serious negative
process there occurred single or influence; (5) rather important business
multiple defects which not reached the lacked of systematic control or the
recognition standard of the significant systematic control was invalid; (6) the
defeat but influenced the true and results of the internal control
accurate target of the financial report. assessment which as the significant
General defect: other internal control defect had not been revised. General
defect which had not constructed as the defect: other internal control defect
great defeat significant defect. which had not constructed as the great
defeat significant defect.Great defect: misstatement ≥ 0.4% of Great defect: losses ≥ 0.4% of the total
Quantitative standard the total operating income; misstatement operating income; losses ≥ 0.4% of the≥ 0.4% of the total owners’ equities total owners’ equities amount; losses ≥
amount; misstatement ≥ 0.3% of the 0.3% of the total assets amount. Great
61Lu Thai Textile Co. Ltd. Annual Report 2024
total assets amount. Not insignificant: defect: 0.2% of the total operating
0.2% of the total operating income; ≤ income ≤ losses < 0.4% of the total
misstatement < 0.4% of the total operating income; 0.2% of the total
operating income; 0.2% of the total owners’ equities amount ≤ losses <
owners’ equities amount ≤ misstatement 0.4% of the total owners’ equities
< 0.4% of the total owners’ equities amount; 0.15% of the total assets
amount; 0.15% of the total assets amount ≤ losses < 0.3% of the total
amount ≤ misstatement < 0.3% of the assets amount. General defect: losses
total assets amount. Insignificant: <0.2% of the total operating income;
misstatement < 0.2% of the total losses < 0.2% of the total owners’
operating income; misstatement < 0.2% equities amount; losses < 0.15% of the
of the total owners’ equities amount; total assets amount.misstatement < 0.15% of the total assets
amount.Number of material weaknesses in
internal control over financial 0
reporting
Number of material weaknesses in
internal control not related to 0
financial reporting
Number of serious weaknesses in
internal control over financial 0
reporting
Number of serious weaknesses in
internal control not related to 0
financial reporting
2. Independent Auditor’s Report on Internal Control
□ Applicable □ Not applicable
Opinion Paragraph in the Independent Auditor’s Report on Internal Control
To the shareholders of Lu Thai Textile Co. Ltd:
According to Audit Guidelines for Enterprise Internal Control and the relevant requirements of Auditing Standards for
Chinese Certified Public Accountants we have audited the effectiveness of internal control in the financial report of Lu
Thai Textile Co. Ltd. (Hereinafter referred to as Lu Thai Textile) by 31 December 2024.I. Responsibilities of Lu Thai Textile for internal control
The Board of Directors of Lu Thai Textile is responsible for establishing improving and implementation the internal
controls and evaluating its effectiveness in accordance with Standard for Enterprise Internal Control Application
Guidelines for Enterprise Internal Control Enterprise Internal Control Audit Guidelines.II. Responsibilities of certified public accountants
It is our responsibility to issue an audit opinion on the effectiveness of internal controls in financial report on the basis
of the implementation of the audit and to disclose significant deficiencies in the internal controls of non-financial
reports that have been noted.III. Inherent limitations of internal control
Internal control has inherent limitations and there is a possibility that misreporting cannot be prevented. In addition
because the change of circumstances may cause the internal control to become inappropriate or the degree of
compliance with the control policies and procedures is reduced it is risky to infer the effectiveness of the future internal
control based on the audit results of the internal control.IV. Audit Opinion on Internal Control in Financial Report
We believe that Lu Thai Textile Co. Ltd. kept effectively internal control on financial reporting in all respects
according to Fundamental Norms for Internal Control of Enterprises and the relevant provisions on 31 December 2024.Independent auditor’s report on internal control disclosed
or not Disclosed
Disclosure date 10 April 2025
For details please refer to the Auditor’s Report on Internal
Index to such report disclosed Control on www.cninfo.com.cn at the same time of
disclosing the Company’s 2024 Annual Report.Type of the auditor’s opinion Unmodified unqualified opinion
Material weaknesses in internal control not related to Not
62Lu Thai Textile Co. Ltd. Annual Report 2024
financial reporting
Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report
on the Company’s internal control.□ Yes□ No
Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is
consistent with the internal control self-evaluation report issued by the Company’s Board.□ Yes □ No
XV Rectifications of Problems Identified by Self-Inspection in the Special Action for Listed
Company Governance
Not applicable
63Lu Thai Textile Co. Ltd. Annual Report 2024
Part V Environmental and Social Responsibility
I. Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business
identified by the environmental protection authorities of China.□ Yes □ No
Policies and industry standards pertaining to environmental protection
During production and operation Lu Thai Textile Co. Ltd. and its subsidiaries LuFeng Company
Limited and Shandong Lulian New Materials Co. Ltd. Zibo Xinsheng Thermal Power Co. Ltd.are subject to the following laws and regulations and industry standards related to environmental
protection: The Environmental Protection Law of the People’s Republic of China the Law of the
People’s Republic of China on Prevention and Control of Water Pollution the Law of the People’s
Republic of China on the Prevention and Control of Atmospheric Pollution the Law of the People’s
Republic of China on the Prevention and Control of Solid Waste Pollution the Contingency
Management Measures for Environmental Emergencies the Emission Standards of Water
Pollutants in Textile Dyeing and Finishing Industry (GB4287-2012) the Standard for Pollution
Control on the Municipal Solid Waste Incineration (GB18485-2014) and the Emission Standard of
Air Pollutants of Thermal Power Plants (DB37/664-2019).Status of environmental protection administrative license
Lu Thai Textile Co. Ltd. and its holding subsidiaries including LuFeng Company Limited
Shandong Lulian New Materials Co. Ltd. and Zibo Xinsheng Thermal Power Co. Ltd. carried out
pollutant discharge permit management and were granted the pollutant discharge permit by the
Ecology and Environment Bureau of Zibo. The current pollutant discharge permit of Lu Thai
Textile Co. Ltd. is valid until 9 June 2026; that of LuFeng Company Limited is valid until 22
November 2026; that of Shandong Lulian New Materials Co. Ltd. is valid until 25 October 2026;
that of Zibo Xinsheng Thermal Power Co. Ltd. is valid until 22 June 2025.The regulations for industrial emissions and the particular requirements for controlling pollutant
emissions those are associated with production and operational activities.Type of Name of Number Distribution
Name Major Major Way of of of Discharge
Discharge Total Approved Excessive
Pollutants Pollutants Discharge Discharge Discharge Concentration/Intensity
Standards
Implemented Discharge
Total
Discharge DischargeOutlets Outlets
Chief Emission
discharge standard of COD: COD:outlet of water 248.109 1495.08Lu Thai COD and
Textile Sewage ammonia Continuous
Huangjiapu COD ≤ 200mg/L; pollutants in tons; tons;
Co. Ltd. nitrogen discharge
2 Industrial ammonia nitrogen ≤ textile ammonia N/A
Park ; chief 20mg/L dyeing and Ammonia nitrogen:
discharge finishing Nitrogen:3.424 tons 149.51outlet of industry GB tons
East Zone 4287-2012
Emission
Chief standard of COD iswater COD: 103 653.53
LuFeng COD and discharge
Company Sewage ammonia Continuous 1 outlet of
COD ≤ 200 mg/L; pollutants in tons; tons;
Limited nitrogen discharge LuFeng
ammonia nitrogen ≤ 20 textile Ammonia ammonia N/A
Company mg/L dyeing and Nitrogen: nitrogen
Limited finishing 1.241 tons is 65.3industry GB tons
Shandong Sewage COD and Continuous 1 Chief COD ≤ 200mg/L; Emission COD: COD isLulian ammonia discharge discharge ammonia nitrogen ≤ standard of 15.834 175.30 N/A
64Lu Thai Textile Co. Ltd. Annual Report 2024
New nitrogen outlet of 20mg/L water tons; tons;
Materials Lulian New pollutants in Ammonia ammonia
Co. Ltd. Materials textile nitrogen: nitrogen
dyeing and 0.352 tons is 17.5
finishing tons
industry GB
Emission Sulfur
standard of Dioxide:
Zibo air pollutants 20.2 tons SO2 is
Xinsheng Waste SO2 Organized SO2: ≤35 mg/m
3 of Thermal Nitrogen 236.13
Thermal gas NQx and continuous 4
Production
plant NQx: ≤50 mg/m
3 PM: Power Plant Oxides: t/a NQx: N/A
Power PM discharge ≤5 mg/m3 in Shandong 148 tons 674.63
Co. Ltd. Province Particulate t/a PM:
DB37/664- Matter: 67.47 t/a.
2019 6.68 tons
Treatment of pollutants
Lu Thai Textile Co. Ltd. (hereinafter referred to as “the Company”) and its subsidiary LuFeng
Company Limited (hereinafter referred to as “Lufeng”) and Shandong Lulian New Materials Co.Ltd. (hereinafter referred to as “Lulian New Materials”) strictly implement the “three simultaneous”
management policy for environmental protection in construction projects and build wastewater and
exhaust gas pollution control facilities. (hereinafter referred to as “Lulian New Materials”) strictly
implement the “Three Simultaneous” management system for environmental protection in project
constructions. The companies are equipped with complete facilities for waste gas and waste water
treatment. Lu Thai Textile Co. Ltd. and its majority-owned subsidiary Lufeng Company Limited
and Shandong Lulian New Materials Co. Ltd. continuously optimize the dyeing waste water
treatment progress improve the treated water quality ensure that the pollutant emission
concentration is better than the national standard further improve the river water quality and local
ecological environment. The Company and Lufeng Weaving & Dyeing centralizedly collected and
coped with the dyeing and finishing waste gas so as to greatly reduce the pollutant emission
concentration. Online supporting monitoring facilities were built whose data was uploaded to the
government environmental monitoring system to comprehensively monitor the Company’s
emission pollutants such as waste water and waste gas. Support teams 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 subsidiary Zibo Xinsheng Thermal Power Co. Ltd. (hereinafter referred to as “XinshengThermal Power”) enforces the “Three Simultaneous” management system for environmental
protection in extension project construction in accordance with the government requirements and
adopts the “limestone-gypsum method” to reduce emission concentration of sulphur dioxide the
“Low-nitrogen combustion+SNCR” and “SNCR+SCR method” to reduce emission concentration of
nitrogen oxides and the “electric-bag electrostatic precipitator+wet electrostatic precipitator” to
reduce soot emission concentration. The overall system works well.Emergency plan for environmental incidents
In order to prevent environmental pollution accidents the Company and its subsidiary Lufeng and
Lulian New Materials respectively prepared the Emergency Plan for Environmental Incidents
which were filed with Zibo Environmental Protection Bureau Zichuan Branch. The Plan includes
contents such as environmental risk sources identification and risk assessment prevention and early
warning mechanism emergency security and supervision and management.The subsidiary Zibo Xinsheng Thermal Power Co. Ltd. has formulated the Emergency Plan for
Environmental Incidents and filed it with the ecological and environmental management department.
65Lu Thai Textile Co. Ltd. Annual Report 2024
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.Environmental self-monitoring program
In accordance with the requirements of the competent environment authorities the Company and its
subsidiary Lufeng and Lulian New Materials observed the requirements of the superior
environmental protection department to install automatic wastewater monitoring facilities and
achieve real-time monitoring of wastewater discharge. Besides the automatic environment
monitoring plan was prepared as required by emission permit. In addition they invited a qualified
testing institution to conduct tests on sewage and waste gas based on the frequency of monitoring
disclosed the monitoring data in time and submitted the test reports to the competent environment
authorities ensuring the monitoring data is true and valid.The subsidiary 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.Input in environment governance and protection and payment of environmental protection tax
During the Reporting Period the input in environment governance and protection and payment of
environmental protection tax for the Company and its subsidiaries LuFeng Lulian New Materials
and Xinsheng Thermal Power are RMB44784500 in total among which RMB43622000 for
input in environment governance and protection and RMB1162500 for payment of environmental
protection tax.Measures taken to decrease carbon emission in the Reporting Period and corresponding effects
□ Applicable □ Not applicable
The Company installed and connected 70.26 MW of solar photovoltaic power generation
accounting for 13% of the total electricity usage within the installation range reducing carbon
dioxide emissions by 78000 tons.Administrative penalties imposed for environmental issues during the Reporting Period
Influence on
Name Reason Case Result Production and Rectification
Operation Measures
N/A N/A N/A N/A N/A N/A
Other environment information that should be disclosed
N/A
Other related environment protection information
N/A
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.Related environmental accidents information
N/A
66Lu Thai Textile Co. Ltd. Annual Report 2024
II. Social Responsibility
For more details please refer to the ESG Report 2024 simultaneously disclosed with the Annual
Report 2024.III. Consolidation and Expansion of Poverty Alleviation Outcomes And Rural Revitalization
Not applicable
67Lu Thai Textile Co. Ltd. Annual Report 2024
Part VI Significant Events
I. Fulfilment of Commitments
1. Commitments of the Company’s De Facto Controller Shareholders Related Parties and
Acquirers as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Ongoing at the Period-End
□ Applicable □ Not applicable
Commitment Promisor Type of
Date of
Commitment Details of Commitment Commitment
Term of
Making Commitment
Fulfilment
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
Dilution of at above commitment fails
sight returns to meet the
Commitments Controlling on public requirements of the
made in time shareholder offering A- CSRC the company / I From 23 May
of IPO or actual share promise to issue 23 May 2019 2019 to 8 On-going
refinancing controller convertible supplementary April 2026
corporate commitment then in
bonds accordance with the
latest regulations of
CSRC. 3. Commitment
is made to fulfil 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
responsibility to the
Company or investors
in accordance with the
law.Commitments Directors and Dilution of at 1. Commitment is made 23 May 2019 From 23 May On-going
68Lu Thai Textile Co. Ltd. Annual Report 2024
made in time senior sight returns not to transfer benefits 2019 to 8
of IPO or management on public to other units or April 2026
refinancing of the offering A- individuals free of
Company share charge or under unfair
convertible conditions and no other
corporate ways damaging the
bonds 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
behaviours of me 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 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
69Lu Thai Textile Co. Ltd. Annual Report 2024
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 fulfil 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.Based on confidence in
the Company’s future
development and value
judgment to maintain
stability in the capital
market and to promote
the Company’s
continuous stable and
healthy development as
well as to protect the
interests of the vast
Commitment number of investors
to not reduce the Company’s
Other Controlling company controlling shareholders 23 August 23 August
commitments shareholder share holdings commit: From the date 2023 2023 to 22 Completed
within the of signing this August 2024
next year commitment not to
reduce their holdings of
the Company’s shares
for a period of one year
including any
additional shares arising
during the commitment
period due to capital
reserve capitalisation
distribution of stock
dividends rights issues
or additional issues etc.Executed on
time or not Yes
70Lu Thai Textile Co. Ltd. Annual Report 2024
2. Where there had been an earnings forecast for an asset or project and the reporting period
was still within the forecast period explain why the forecast has been reached for the
Reporting Period.□ Applicable□ Not applicable
II. Occupation of the Company’s Capital by the Controlling Shareholder or Any of Its
Related Parties for Non-Operating Purposes
□ Applicable□ Not applicable
No such cases in the Reporting Period.III. Irregularities in the Provision of Guarantees
□ Applicable□ Not applicable
No such cases in the Reporting Period.IV. Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion”
on the Financial Statements
□ Applicable□ Not applicable
V. Explanations Given by the Board of Directors the Board of Supervisors and the
Independent Directors (If Any) Regarding the Independent Auditor’s “Modified Opinion” on
the Financial Statements of the Reporting Period
□ Applicable□ Not applicable
VI. YoY Changes to Accounting Policies Estimates or Correction of Material Accounting
Errors
□ Applicable□ Not applicable
During the Reporting Period there were no changes in accounting policies estimates or corrections
of significant accounting errors.VII. YoY Changes to the Scope of the Consolidated Financial Statements
□ Applicable□ Not applicable
No such cases in the Reporting Period.VIII. Engagement and Disengagement of Independent Auditor
Current independent auditor:
Name of the domestic independent auditor Grant Thornton China (Special General Partnership)
The Company’s payment to the domestic independent
auditor (RMB’0000) 173.5
How many consecutive years the domestic independent
auditor has provided audit service for the Company 6
Names of the certified public accountants from the
domestic independent auditor writing signatures on the He Feng Cui Xiaoli
auditor’s report
How many consecutive years the certified public
accountants have provided audit service for the Company 5
Indicate by tick mark whether the independent auditor was changed for the Reporting Period.
71Lu Thai Textile Co. Ltd. Annual Report 2024
□ Yes□ No
Independent auditor financial advisor or sponsor engaged for the audit of internal controls:
□ Applicable □ Not applicable
The Company held the 2023 Annual General Meeting on 15 May 2024 and approved the Proposal
on Renewal Engagement of the 2024 Financial Audit and Internal Control Auditor and decided to
renew the contract with Grant Thornton China (Special General Partnership) for 2024 financial
audit and internal control affairs and paid RMB1735000 in total for 2023 financial report audit and
the internal control audit.IX. Possibility of Delisting after Disclosure of this Report
□ Applicable□ Not applicable
X. Insolvency and Reorganization
□ Applicable□ Not applicable
No such cases in the Reporting Period.XI. Major Legal Matters
□ Applicable□ Not applicable
No such cases in the Reporting Period.XII. Punishments and Rectifications
□ Applicable□ Not applicable
No such cases in the Reporting Period.XIII. Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable□ Not applicable
XIV. Major Related-Party Transactions
1. Significant Related-Party Transactions Relevant to the Company’s Day-To-Day
Management
□ Applicable□ Not applicable
The Company had no related-party transactions relevant to day-to-day management 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-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable□ Not applicable
No such cases in the Reporting Period.
72Lu Thai Textile Co. Ltd. Annual Report 2024
4. Credits and Liabilities with Related Parties
□ Applicable□ Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□ Applicable□ Not applicable
The Company did not make deposits in receive loans or credit from and was not involved in any
other finance business with any related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□ Applicable□ Not applicable
The finance company controlled by the Company did not make deposits receive loans or credit
from and was not involved in any other finance business with any related parties.
7. Other Major Related-Party Transactions
□ 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
Unit: RMB’0000
Guarantees Provided by the Company as the Parent and Its Subsidiaries for External Parties (Exclusive of Those for Subsidiaries)
Disclosure Guarantee
Date of the Line of Actual Actual Type of Collateral Counter- Having for aObligor Guarantee Guarantee Occurrence Guarantee
Term Of
Guarantee (If Any) Guarantee Expired RelatedLine Date Amount (If Any) Guarantee or Not Party or
Announcement Not
Guarantees Provided by the Company for its Subsidiaries
Disclosure Line of Actual Actual Counter- Having GuaranteeObligor Date of the Guarantee Occurrence Guarantee
Type of Collateral Guarantee Term Of Expired for a
Guarantee Date Amount Guarantee (If Any) (If Any) Guarantee or Not Related
73Lu Thai Textile Co. Ltd. Annual Report 2024
Line Party or
Announcement Not
Three
years
Wholly- since the
owned 26 August 23721.72 24 August 0 Joint-2022 2022 liability N/A N/A
approval
Subsidiaries of the
Yes Yes
board of
the
Company
Three
years
Wholly- since the
owned 1 July 2023 7188.4 30 June 0 Joint- N/A N/A approval Yes Yes
Subsidiaries 2023 liability of theboard of
the
Company
Total approved line for such Total actual amount of
guarantees in the Reporting 0 such guarantees in the 558.54
Period (B1) Reporting Period (B2)
Total approved line for such Total actual balance of
guarantees at the end of the 0 such guarantees at the
Reporting Period (B3) end of the Reporting
0
Period (B4)
Guarantees provided between subsidiaries
Disclosure Guarantee
Obligor date of the Line of
Actual Actual Counter- Having for a
guarantee line guarantee occurrence guarantee
Type of Collateral Term of
date amount guarantee (if any)
guarantee expired related
announcement (if any)
guarantee or not party or
not
Three
years
Wholly- since the
owned 9 July 2024 25159.4 6 July2024 9186.2
Joint- N/A N/A approval Not Yes
Subsidiaries liability of theboard of
the
Company
Three
years
Wholly- since the
owned 30 August 21565.2 August 28 0 Joint- N/A N/A approval Not Yes
Subsidiaries 2024 2024 liability of theboard of
the
Company
Total approved line for such Total actual amount of
guarantees in the Reporting 46724.6 such guarantees in the 9186.2
Period (C1) Reporting Period (C2)
Total approved line for such Total actual balance of
guarantees at the end of the 46724.6 such guarantees at theend of the Reporting 9186.2Reporting Period (C3) Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line Total actual guarantee
approved in the Reporting 46724.6 amount in the
Period (A1+B1+C1) Reporting Period
9744.74
(A2+B2+C2)
Total approved guarantee Total actual guarantee
line at the end of the 46724.6 balance at the end ofReporting Period the Reporting Period 9186.2
(A3+B3+C3) (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
Company’s net assets 0.97%
Of which:
74Lu Thai Textile Co. Ltd. Annual Report 2024
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 0
(E)
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
Joint responsibilities possibly borne or already borne in
the Reporting Period for undue guarantees (if any) N/A
Explanation about external guarantee violating
established procedure (if any) N/A
Compound guarantees:
N/A
The Company shall abide by relevant disclosure requirements of the Self-Regulatory Guidelines of
Shenzhen Stock Exchange for Listed Companies No.3 - Industry Information Disclosure on textile
and garment industry.Whether the Company provides guarantees or financial assistance for dealers
□ Yes□ No
3. Cash Entrusted for Wealth Management
(1) Cash Entrusted for Wealth Management
□ Applicable □ Not applicable
Overviews of cash entrusted for wealth management during the Reporting Period
Unit: RMB’0000
Overdue Amount
Specific Type Capital Resources Amount Incurred Undue Balance Overdue Amount with Provision for
Impairment
Bank financial
products Self-owned funds 29500 23000 0 0
Bank financial
products Raised funds 5000 0 0 0
Brokerage
financial products Self-owned funds 15000 15000 0 0
Others Self-owned funds 0 40000 0 0
Total 49500 78000 0 0
Particulars of entrusted cash management with single significant amount or low security bad
liquidity and no capital preservation
□ Applicable□ Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which
may cause impairment for entrusted asset management
□ Applicable□ Not applicable
(2) Entrusted Loans
□ Applicable□ Not applicable
75Lu Thai Textile Co. Ltd. Annual Report 2024
No such cases in the Reporting Period.
4. Other Major Contracts
□ Applicable□ Not applicable
No such cases in the Reporting Period.XVI. Other Significant Events
□ Applicable □ Not applicable
The Proposal on Repurchase of Domestically Listed Foreign Shares (B-Stock) was approved at the
10th Meeting of the 10th Board of Directors and the First Extraordinary General Meeting of 2023.
As such an amount of no more than RMB200 million would be used to repurchase shares with a
price limit of HKD4.80 per share within 12 months from the date when the share repurchase plan
was approved at the general meeting. On 21 August 2023 the Company first implemented a
repurchase plan. As at 21 February 2024 the repurchase of the Company’s B-shares listed
domestically had been completed with a total of 46176428 shares repurchased accounting for
5.35% of the total share capital. The highest repurchase price was HKD4.80 per share and the
lowest was HKD4.53 per share. The total payment amounted to HKD218386229.84 (including
commissions etc.).On 1 March 2024 the repurchased B-shares were cancelled and the procedure was completed with
China Securities Depository and Clearing Corporation Limited Shenzhen Branch. For details see
the relevant announcement (No.: 2024-015) disclosed on 2 March 2024 on www.cninfo.com.cn.XVII. Significant Events of Subsidiaries
□ Applicable□ Not applicable
76Lu Thai Textile Co. Ltd. Annual Report 2024
Part VII Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/Decrease in the Reporting Period (+/-) After
Shares as Shares as
dividend dividend
Shares Percentage New converted Percentage(%) issues converted from Other Subtotal Sharesfrom (%)
profit capitalreserves
I. Restricted
shares 11467817 1.33% -8806925 -8806925 2660892 0.33%
1. Shares
held by State
2. Shares
held by
state-owned
legal person
3. Shares
held by other
domestic 11467817 1.33% -8806925 -8806925 2660892 0.33%
investors
Among
which:
Shares held
by domestic
legal person
Shares held
by domestic
natural 11467817 1.33% -8806925 -8806925 2660892 0.33%
person
4. Shares
held by other
foreign 0
investors
Among
which:
Shares held 0
by foreign
corporations
Shares held
by foreign
natural 0
person
II.Unrestricted 852139817 98.67% - -
shares 37494699 37494699
81464511899.67%
1. RMB
ordinary 579894874 67.15% 8681729 8681729 588576603 72.01%
shares
2.
Domestically - -
listed foreign 272244943 31.52% 46176428 46176428 226068515 27.66%
shares
3. Overseas 0
77Lu Thai Textile Co. Ltd. Annual Report 2024
listed foreign
shares
4. Other 0
III. Total - -
shares 863607634 100.00% 46301624 46301624 817306010 100.00%
Reasons for share changes:
□ Applicable □ Not applicable
a) Due to the fact that the Company had issued convertible A-share bonds on 9 April 2020
convertible bonds were converted to 304 shares in the period from the beginning of 2024 to 31
December 2024.b) On 6 May 2024 and 7 June 2024 2901500 and 6901500 shares of restricted shares were lifted
from restriction.c) On 1 March 2024 the cancellation of the repurchased B-shares listed domestically was
completed with 46176428 shares cancelled.d) 125500 shares of equity incentive restricted shares were repurchased and cancelled.e) The shares held by the directors supervisors and senior management shall be locked and adjusted
in accordance with relevant regulations on executive share management.Approval of share changes:
□ Applicable □ Not applicable
a) On 10 April 2024 the Company held the 20th Meeting of the 10th Board of Directors and the
13th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the
Achievement of Lifting the Restriction Conditions in the Second Restriction Period for the Reserved
Grant of the 2021 Restricted Share Incentive Scheme. Also the Company agreed to process the
restriction lifting matters for 2901500 restricted shares held by 340 incentive personnel who met
the restriction lifting conditions in the second restriction period for the reserved shares for grant
under the 2021 Restricted Share Incentive Scheme.b) On 28 May 2024 the Company held the 22nd Meeting of the 10th Board of Directors and the
15th Meeting of the 10th Board of Supervisors and reviewed and approved the Proposal on the
Achievement of Lifting the Restriction Conditions in the Third Restriction Period for the First Grant
of the 2021 Restricted Share Incentive Scheme. Also the Company agreed to process the restriction
lifting matters for 6901500 restricted shares held by 704 incentive personnel who met the
restriction lifting conditions in the third restriction period for the first grant of the 2021 Restricted
Share Incentive Scheme.c) The Company held the 10th Meeting of the 10th Board of Directors on 19 June 2023 and the 1st
Extraordinary General Meeting of 2023 on 6 July 2023 reviewing and approving the Proposal on
Repurchase of the Domestically Listed Foreign Shares (B Share). The Company repurchased
46176428 B-shares in total through call auction via its securities account for repurchase and
completed the formalities for cancellation of the foregoing repurchased shares at the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited on 1 March 2024.d) The repurchase and cancellation of 125500 restricted shares was approved at the Company’s
First Extraordinary General Meeting of 2024 on 5 February 2024 and the Second Extraordinary
General Meeting of 2024 on 14 June 2024.Transfer of share ownership:
78Lu Thai Textile Co. Ltd. Annual Report 2024
□ Applicable □ Not applicable
The Company completed the formalities for cancellation of the 46176428 repurchased B-shares
and 66500 shares of equity incentive restricted shares at the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited respectively on 1 March 2024 1 April 2024 and 14
August 2023.Effects of share changes on the basic and diluted earnings per share equity per share attributable to
the Company’s ordinary shareholders and other financial indicators of the prior year and the prior
accounting period respectively:
□ Applicable □ Not applicable
See relevant contents of “VI Key financial information” under “Part II Corporate Information andKey Financial Information”.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
Restricted Restricted
Name of Shares
Restricted Restricted
Amount at Shares Shares
Shares
Amount at Restricted Restricted Shares RelievedShareholder the Period- Increased of Relieved of the Period- Reasons Date
Begin the Period the Period End
Zhang Management 100000 shares on 6 May
Zhanqi 435225 190000 190000 435225 lock-up 2024 and 90000 shares on 7shares June 2024
Yu Management 50000 shares on 6 May
Shouzheng 287325 110000 110000 287325 lock-up 2024 and 60000 shares on 7shares June 2024
Zhang Management 50000 shares on 6 May
Keming 283275 110000 110000 283275 lock-up 2024 and 60000 shares on 7shares June 2024
Management 50000 shares on 6 May
Li Wenji 195000 175000 110000 260000 lock-up 2024 and 60000 shares on 7
shares June 2024
Shang Management 50000 shares on 6 May
Chenggang 247500 110000 110000 247500 lock-up 2024 and 60000 shares on 7shares June 2024
Management 78425 shares on 12 January
Wang Jiabin 313700 90000 168425 235275 lock-up 2024 and 90000 shares on 7
shares June 2024
Management 50000 shares on 6 May
Guo Heng 225000 110000 110000 225000 lock-up 2024 and 60000 shares on 7
shares June 2024
Management 50000 shares on 6 May
Du Lixin 187500 110000 110000 187500 lock-up 2024 and 60000 shares on 7
shares June 2024
Lyu Management 25000 shares on 6 May
Wenquan 150000 70000 70000 150000 lock-up 2024 and 45000 shares on 7shares June 2024
Xu Feng 142500 95000 95000 142500 Management 50000 shares on 6 May
79Lu Thai Textile Co. Ltd. Annual Report 2024
lock-up 2024 and 45000 shares on 7
shares June 2024
On 6 May 2024 2426500
shares were lifted from
restriction and on 7 June
Other Management 2024 6271500 shares were
restricted 9000792 30000 8698000 207292 lock-up lifted from restriction. On
shareholders shares 22 April 2024 and 14August 2024 66500 and
59000 restricted shares
were cancelled
respectively.Total 11467817 1200000 9881425 2660892 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period
□ Applicable□ Not applicable
2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures
□ Applicable □ Not applicable
The Company’s total shares at the beginning of 2024 were 863607634 shares (of which
591305241 were A-shares and 272302393 were B-shares). As at 1 March 2024 the cancellation
of 46176428 repurchased B-shares was completed. The repurchase and cancellation of 66500
restricted shares and 59000 restricted shares were completed on 22 April 2024 and 14 August 2024.Because of Lu Thai convertible bonds were cumulatively converted into 304 A-shares from 1
January 2024 to 31 December 2024. By 31 December 2024 the Company possessed 817306010
shares in total (591180045 A-shares and 226125965 B-shares inclusive) which had no
significant impact on the Company’s assets and liability structure.
3. Existing Staff-Held Shares
□ Applicable□ Not applicable
III. Shareholders and Actual Controller
1. Total Number of Shareholders and Their Shareholdings
Unit: share
Number of
Ordinary Number Of Number of Preferred
Shareholder Preferred Shareholders With
Number of s at the Shareholders Resumed Voting Rights at
Ordinary 47043 Month-End 47219 With Resumed 0 the Month-End Prior to 0
Shareholders Prior to the Voting Rights (If the Disclosure of this
Disclosure Any) (See Note Report (If Any) (See Note
of this 8) 8)
Report
5% or Greater Shareholders or Top Ten Shareholders (Exclusive of Shares Lent in Refinancing)
Name of Nature of Holding
Total
Shares Increase/Decreas Restricte Unrestricte
Shares in Pledge Marked
Shareholde Percentage e in the d Shares d Shares or FrozenShareholder r (%) Held at thePeriod-end Reporting Period Held Held Status Number
Zibo Lucheng Domestic
Textile non-state-
Investment owned 17.17%
14035358 0 0 14035358 N/A 0
Co. Ltd. legal
33
person
80Lu Thai Textile Co. Ltd. Annual Report 2024
Tailun
(Thailand) Foreign 11523240 11523240
Textile Co. legal 14.10% 0 -3000000 0 0 N/A 0
Ltd. person
Central Huijin State-
Assets owned
Management legal 2.43% 19884100 0 0 19884100 N/A 0
Co. Ltd. person
National
Social Security
Fund Portfolio Other 1.82% 14910051 720000 0 14910051 N/A 0
413
ICBC Credit
Suisse
Innovation
Power Stock
Type Other 1.47% 12000000 90000 0 12000000 N/A 0
Securities
Investment
Fund
Dongfanghong
Zhihua Three-
Year Holding
Mixed Other 0.81% 6600000 148250 0 6600000 N/A 0
Securities
Investment
Fund
FEDERATED
HERMES
GLOBAL
INVESTMEN
T FD
(CAYMAN)
MASTER Foreign
SPC legal 0.78% 6334711 134528 0 6334711 N/A 0
OBOAFTAO person
FEDERATED
HERMES
EMG ASIA
EQUITY FD
MASTER S.P.Dongfanghong
JD Big Data
Flexible
Allocation
Mixed Other 0.72% 5889382 889300 0 5889382 N/A 0
Securities
Investment
Fund
Dongfanghong
New Power
Flexible
Allocation
Mixed Other 0.60% 4893800 -106700 0 4893800 N/A 0
Securities
Investment
Fund
Domestic
Chen Aiting natural 0.57% 4631466 499661 0 4631466 N/A 0
person
Strategic investors or
general corporations
becoming top-ten
shareholders due to placing N/A
of new shares (if any) (see
Note 3)
81Lu Thai Textile Co. Ltd. Annual Report 2024
Related or acting-in-concert Zibo Lucheng Textile Investment Co. Ltd. is the largest shareholder and the actual controller of the
parties among the Company. Tailun (Thailand) Textile Co. Ltd. is the second largest shareholder and the foreign
shareholders above sponsor of the Company. All the other shareholders are holding tradable A-shares or B-shares. And itis unknown whether there is any related party or acting-in-concert party among them.Explain if any of the
shareholders above was
involved in entrusting/being N/A
entrusted with voting rights
or waiving voting rights
Special account for share
repurchases (if any) among
the top ten shareholders (see N/A
Note 10)
Shareholdings of Top Ten Unlimited Shareholders (Excluding Shares Lent trough Refinancing and Management Lock-up Shares)
Type
Name of Shareholder Unrestricted Shares Held at the Period-end
Type Number
Zibo Lucheng Textile RMB
Investment Co. Ltd. 140353583 ordinary
14035358
share 3
Domesticall
Tailun (Thailand) Textile
Co. Ltd. 115232400
y listed 11523240
foreign 0
shares
Central Huijin Assets RMB
Management Co. Ltd. 19884100 ordinary 19884100share
National Social Security RMB
Fund Portfolio 413 14910051 ordinary 14910051share
ICBC Credit Suisse
Innovation Power Stock RMB
Type Securities Investment 12000000 ordinary 12000000
Fund share
Dongfanghong Zhihua RMB
Three-Year Holding Mixed 6600000 ordinary 6600000
Securities Investment Fund share
FEDERATED HERMES
GLOBAL INVESTMENT
FD (CAYMAN) MASTER Domesticall
SPC OBOAFTAO 6334711 y listed
FEDERATED HERMES foreign
6334711
EMG ASIA EQUITY FD shares
MASTER S.P.Dongfanghong JD Big Data RMB
Flexible Allocation Mixed 5889382 ordinary 5889382
Securities Investment Fund share
Dongfanghong New Power RMB
Flexible Allocation Mixed 4893800 ordinary 4893800
Securities Investment Fund share
RMB
Chen Aiting 4631466 ordinary 4631466
share
Related or acting-in-concert
parties among top ten
unrestricted public Zibo Lucheng Textile Investment Co. Ltd. is the largest shareholder and the actual controller of the
shareholders as well as Company. Tailun (Thailand) Textile Co. Ltd. is the second largest shareholder and the foreign
between top ten unrestricted sponsor of the Company. All the other shareholders are holding tradable A-shares or B-shares. And it
public shareholders and top is unknown whether there is any related party or acting-in-concert party among them.ten shareholders
Top ten ordinary
shareholders involved in
securities margin trading (if N/A
any) (see Note 4)
Participation of Shareholders with a shareholding bigger than 5% the top ten shareholders and the
top ten shareholders of non-restricted tradable shares in the lending of shares through refinancing
82Lu Thai Textile Co. Ltd. Annual Report 2024
□ Applicable□ Not applicable
Changes in the top ten shareholders and the top ten shareholders of non-restricted tradable shares
from the previous Period due to lending/return through refinancing
□ Applicable□ Not applicable
Indicate by tick mark whether any of the top ten ordinary shareholders or the top ten unrestricted
ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.□ Yes□ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of the controlling shareholder: Controlled by a natural person
Type of the controlling shareholder: Legal person
Name of Controlling Legal
Shareholder Representative/Person
Date of Unified Social Credit
in Charge Establishment Code
Principal Activity
Investment on textile
electricity and
Zibo Lucheng Textile 25 September
Investment Co. Ltd. Liu Deming 1998 91370303164200391J
chemical; purchase
process and sale of
cotton; retail service
etc.Particulars about
shareholding of
controlling shareholders
controlling and holding N/A
shares of other listed
companies during the
Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable□ Not applicable
No such cases in the Reporting Period.
3. Actual Controller and Its Acting-in-Concert Parties
Nature of the actual controller: Domestic natural person
Type of the actual controller: Natural person
Name of the Actual Controller Relations with the Actual
Whether Gain the Right of
Controller Nationality Residence in OtherCountries or Regions or Not
Liu Zibin In person China Not
Concerted action (including
Liu Deming agreement relatives and China Not
same control)
Liu Zibin is the Chairman of the Board and President of Lu Thai Textile
Professions and titles Co. Ltd. Liu Deming is the Chairman of the Board and GM of Zibo
Lucheng Textile Investment Co. Ltd.Particulars about listed companies with
shares ever held by the actual controller N/A
83Lu Thai Textile Co. Ltd. Annual Report 2024
over the past ten years
Change of the actual controller during the Reporting Period:
□ Applicable□ Not applicable
No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:
Liu Zibin Liu Deming
Zibo Lucheng Textile Investment Co. Ltd.Lu Thai Textile Co. Ltd.Indicate by tick mark whether the actual controller controls the Company via trust or other ways of
asset management.□ Applicable□ Not applicable
4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder
or the Largest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all
shares of the Company held by Them
□ Applicable□ Not applicable
5. Other 10% or Greater Corporate Shareholders
□ Applicable□ Not applicable
6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual
Controller Reorganizer and Other Commitment Makers
□ Applicable□ Not applicable
IV. Specific Implementation of Share Repurchase during the Reporting Period
Progress on any share repurchase
□ Applicable □ Not applicable
Number of
Shares Repurchased
Disclosure Intended to As % of Shares Shares as a
Time of the be Total Amount Period Usage Repurchased Percentage of the
Plan Repurchased Share (Share) Underlying
(Share) Capital Shares Coveredby the Equity
Incentive Plan (if
84Lu Thai Textile Co. Ltd. Annual Report 2024
any)
7 July 2023 27000000- 3.13%-
Not
54000000 6.25% exceeding
6 July 2023 to 5
RMB20000 July 2024
Cancelled 46176428 0.00%
Progress on reducing the repurchased shares by means of centralized bidding
□ Applicable□ Not applicable
85Lu Thai Textile Co. Ltd. Annual Report 2024
Part VIII Preference Shares
□ Applicable□ Not applicable
No preference shares in the Reporting Period.Part IX Bonds
□ Applicable □ Not applicable
I. Enterprise Bonds
□ Applicable□ Not applicable
No enterprise bonds in the Reporting Period.II. Corporate Bonds
□ Applicable□ Not applicable
No corporate bonds in the Reporting Period.III. Debt Financing Instruments of Non-financial Enterprises
□ Applicable□ Not applicable
No such cases in the Reporting Period.IV. Convertible Corporate Bonds
□ Applicable □ Not applicable
1. Previous Adjustments of Conversion Price
On 9 April 2020 the Company publicly issued 14 million A-share convertible corporate bonds
(short name: Lu Thai Convertible Bonds bond code: 127016) on SZSE with an issue price of
RMB100 per share and a share conversion price of RMB9.01 per share. The bonds were listed onSZSE on 13 May 2020. In accordance with related terms of the “Prospectus for the Public Offeringof A-Share Convertible Corporate Bonds of Lu Thai Textile Co. Ltd.” as well as the regulations of
CSRC on the public offering of convertible corporate bonds if the Company has any distribution of
share dividends conversion into share capital additional issue of new shares (excluding share
capital increase due to conversion into shares from the convertible corporate bonds issued this time)
share allotment and distribution of cash dividends after the issue of “Lu Thai Convertible Bonds”
adjustment shall be made to the share conversion price.On 21 May 2020 the Company held the Annual General Meeting of 2019 where the Proposal on
the Company’s Profit Distribution Plan for 2019 was considered and approved. According to the
Proposal a cash amount of RMB1.00 (inclusive of tax) would be distributed to every ten shares
with the 858121541 shares of share capital on 31 December 2019 as the base. The share
registration date for the Company’s equity distribution of 2019 was 8 July 2020 and the ex-rightsand ex-dividend date was 9 July 2020. Therefore the share conversion price of “Lu ThaiConvertible Bonds” was adjusted from RMB9.01 per share to RMB8.91 per share and the new
price after the adjustment took effect on and as of 9 July 2020 (the ex-rights and ex-dividend date).On 3 June 2021 the Company completed the registration of first-granted restricted stocks of
restricted share incentive scheme at the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited (China Clear). 7 June 2021 is designated as the listing date of first-
86Lu Thai Textile Co. Ltd. Annual Report 2024
granted restricted stocks of the Company in 2021. The Company grants 750 subjects of incentive
24285000 restricted shares at a price of RMB3.31 per share accounting for 2.83% of total share
capital of the Company. The source of the stock is RMB A-share ordinary shares issued by the
Company to subjects of incentive. Therefore the conversion price of Lu Thai Convertible Bond
will be adjusted from RMB8.91 per share to RMB8.76 per share with the adjusted conversion price
coming into force from 7 June 2021.The 2020 annual general meeting convened on 20 April 2021 deliberated on and adopted the
Company’s Proposal on Profit Appropriation Plan in 2020 which distributes cash of RMB0.50 per
ten shares (including tax) with total share capital at the record date of this distribution scheme as
base. The record date of the Company’s interest distribution in 2020 is set on 17 June 2021. The ex-
date is set on 18 June 2021. Therefore the conversion price of Lu Thai Convertible Bond will be
adjusted from RMB8.76 per share to RMB8.71 per share with the adjusted conversion price
coming into force from 18 June 2021 (the ex-date).On 22 March 2022 the Company completed the registration of granting reserved shares under the
2021 restricted share incentive scheme at the Shenzhen Branch of China Clear. 22 March 2022 was
designated as the listing date for granting reserved restricted shares of the Company. The Company
granted 343 incentive personnel 5838000 restricted shares at a price of RMB3.56 per share
accounting for 0.66% of total share capital of the Company. The source of the stock is RMB A-
share ordinary shares issued by the Company to incentive personnel. Therefore the conversion
price of Lu Thai convertible bond will be adjusted from RMB8.71 per share to RMB8.68 per share
with the adjusted conversion price coming into force from 22 March 2022.The 2021 annual general meeting convened on 20 May 2022 deliberated and adopted the
Company’s Proposal on Profit Appropriation Plan in 2021 which distributes cash of RMB0.70 per
ten shares (including tax) with total share capital at the record date of this distribution scheme as
base. The record date of the Company’s interest distribution in 2021 was set on 22 June 2022. The
ex-date was set on 23 June 2022. Therefore the conversion price of Lu Thai convertible bond will
be adjusted from RMB8.68 per share to RMB8.61 per share with the adjusted conversion price
coming into force from 23 June 2022.The Company completed the formalities for cancellation of the 23935748 repurchased B-shares at
the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited on 25 May
2023. In accordance with the issuance clauses in the Company’s Prospectus and relevant
regulations of the CSRC on the issuance of convertible bonds the conversion price of Lu Thai
convertible bond shall be adjusted from RMB8.61 per share to RMB8.73 per share. The adjusted
conversion price came into force on 26 May 2023.The Company implemented the 2022 Equity Distribution Plan on 16 June 2023. In accordance with
the issuance clauses in the Company’s Prospectus and relevant regulations of the CSRC on the
issuance of convertible bonds the conversion price of Lu Thai convertible bond shall be adjusted
from RMB8.73 per share to RMB8.63 per share. The adjusted conversion price came into force on
16 June 2023.
The Company completed the formalities for cancellation of the 46176428 repurchased B-shares at
the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited on 1 March
2024. In accordance with the issuance clauses in the Company’s Prospectus and relevant
regulations of the CSRC on the issuance of convertible bonds the conversion price of Lu Thai
convertible bond shall be adjusted from RMB8.63 per share to RMB8.87 per share. The adjusted
conversion price came into force on 4 March 2024.
87Lu Thai Textile Co. Ltd. Annual Report 2024
The Company implemented the 2023 Equity Distribution Plan on 19 June 2024. In accordance with
the issuance clauses in the Company’s Prospectus and relevant regulations of the CSRC on the
issuance of convertible bonds the conversion price of Lu Thai convertible bond shall be adjusted
from RMB8.87 per share to RMB8.74 per share. The adjusted conversion price came into force on
19 June 2024.
The Company implemented the 2024 Equity Distribution Plan on 8 November 2024. In accordance
with the issuance clauses in the Company’s Prospectus and relevant regulations of the CSRC on the
issuance of convertible bonds the conversion price of Lu Thai convertible bond shall be adjusted
from RMB8.74 per share to RMB8.64 per share. The adjusted conversion price came into force on
8 November 2024.
The Company implemented the 2024 Equity Distribution Plan on 19 December 2024. In accordance
with the issuance clauses in the Company’s Prospectus and relevant regulations of the CSRC on the
issuance of convertible bonds the conversion price of Lu Thai convertible bond shall be adjusted
from RMB8.64 per share to RMB8.59 per share. The adjusted conversion price came into force on
19 December 2024.
2. Accumulative Conversion
□ Applicable □ Not applicable
Converted
Shares as %
Total Accumulati Accumulati of total Unconverted
Abbreviati Start Circulati Total Amount ve Amount ve Shares Shares Issued Unconvert Amount
on Date on (RMB) Converted Converted by the ed Amount as % of Total
(Piece) (RMB) (share) Company (RMB)Before the Amount
Start Date of
Conversion
Octob
Lu Thai er 15
Convertibl 2020 140000 1400000000.to 8 00 00 152300.00 17145 0.00%
1399844
e Bonds 700.00
99.99%
April
2026
3. Top ten convertible bond holders
Number of Amount of As % of
Nature Convertible Convertible Convertible
No. Name of Holders of Bonds Held at Bonds Held at Bonds Held
Holders the Period-end the Period-end at the
(share) (RMB) Period-end
1 China Construction Bank - E Fund EnhancedIncome Bond Securities Investment Fund Other 698782 69878200.00 4.99%
2 ICBC Credit Suisse Tianfeng Fixed BenefitPension Product - Bank of China Limited Other 613944 61394400.00 4.39%
China Merchants Bank Co. Ltd. – Bosera CSI
3 Convertible Bonds and Exchangeable Bonds Other 611676 61167600.00 4.37%
ETF
4 Dajia Life Insurance Co. Ltd. - TraditionalProduct Other 569590 56959000.00 4.07%
Shanghai Pudong Development Bank Co. Ltd. -
5 E Fund Yuxiang Return Bond Securities Other 495122 49512200.00 3.54%
Investment Bond
6 Fuguo Fumin Fixed Income Pension Product -China Construction Bank Corporation Other 425499 42549900.00 3.04%
88Lu Thai Textile Co. Ltd. Annual Report 2024
China Merchants Bank Co. Ltd. -
7 Dongfanghong Juli Bond Securities Investment Other 327356 32735600.00 2.34%
Fund
Huatai Yousheng Convertible Bond Fixed
8 Income Pension Product－China Merchants Other 313590 31359000.00 2.24%
Bank Co. Ltd.
9 Bank of China Co. Ltd.—GF Jvxin BondInvestment Fund Other 276285 27628500.00 1.97%
10 China Pacific Life Insurance Co. Ltd. –Dividend - Individual Dividend Other 252283 25228300.00 0.65%
4. Significant Changes in Profitability Assets Condition and Credit Status of Guarantors
□ Applicable□ Not applicable
5. The Company’s Liabilities Credit Changes at the Period-end and Cash Arrangements to
Repay Debts in Future Years
For the relevant indicators please refer to the Part IX Bonds - VIII The major accounting data and
the financial indicators of the recent two years of the Company up the period-end.The credit rating of the Company’s convertible bonds for the Reporting Period is AA+ which has
not changed compared with that of the same period of last year.V. Losses of Scope of Consolidated Financial Statements during the Reporting Period
Exceeding 10% of Net Assets up the Period-end of Last Year
□ Applicable□ Not applicable
VI. Matured Interest-bearing Debt excluding Bonds up the Period-end
□ Applicable□ Not applicable
VII. Whether there was any Violation of Rules and Regulations during the Reporting Period
□ Yes□ No
VIII. The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-end
Unit: RMB’0000
Item Period-end The End of Last Year Increase/Decrease
Current ratio 3.39 3.43 -1.17%
Asset-liability ratio 29.49% 28.39% 1.10%
Quick ratio 2.25 2.12 6.13%
Reporting Period Same Period of Last Year YoY Increase/Decrease
Net profit after deducting non-
recurring profit or loss 48233.87 38613.54 24.91%
Debt/EBITDA ratio 39.11% 41.97% -2.86%
Interest cover (times) 5.55 5.29 4.91%
Cash-to-interest cover (times) 12.45 8.82 41.16%
EBITDA interest coverage ratio 10.58 10.40 1.73%
Rate of redemption 100.00% 100.00% 0.00%
Interest coverage 100.00% 100.00% 0.00%
89Lu Thai Textile Co. Ltd. Annual Report 2024
Part X Financial Statements
I. Independent Auditor’s Report
Type of the independent auditor’s opinion Unmodified unqualified opinion
Date of signing this report 8 April 2025
Name of the independent auditor Grant Thornton China (Special General Partnership)
No. of independent auditor’s report Grant Thornton SZ (2025) No. 371A008379
Name of the certified public accountants He Feng Cui Xiaoli
Text of the Independent Auditor’s Report
To the shareholders of Lu Thai Textile Co. Ltd:
I. Opinion
We have audited the financial statements of Lu Thai Textile Co. Ltd. (hereinafter referred to as the
“Company”) which comprise the consolidated and parent company balance sheets as of 31
December 2023 the consolidated and parent company statements of income cash flows and
changes in owners’ equity for the year then ended as well as the notes to the financial statements.In our opinion the financial statements referred to above present fairly in all material respects the
consolidated and parent company financial position of the Company at 31 December 2024 and the
consolidated and parent company operating results and cash flows for the year then ended in
conformity with the Accounting Standards for Business Enterprises.II. Basis for Opinion
We conducted our audits in accordance with the Audit Standards for Chinese Registered
Accountants. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for Audit of Financial Statements section of our report. We are independent of the
Company in accordance with the China Code of Ethics for Certified Public Accountants and we
have fulfilled our other ethical responsibilities in accordance with the said Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.III. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole and in forming our opinion thereon and
we do not provide a separate opinion on these matters.i. Recognition of revenue
For details please refer to the Note III-27 and the Note V-46 of the financial report.
1. Event description
The main businesses of Lu Thai Textile Co. Ltd. mainly are production and sales of yarn-dyed
fabrics and shirts. The operation revenue of the Company in 2024 was RMB6090615000 of
which export income accounted for over 50%. For the income from domestic sales the amount of
product sales income is recognised when the products are delivered to and confirmed by the
purchaser according to the contract. The income is recognised when the purchaser obtains control of
the product. For the income from export sales the amount of sales income is recognised when
products are declared and depart from port according to the contract and the bill of lading is
received. The income is recognised when the purchaser obtains control of the product.
90Lu Thai Textile Co. Ltd. Annual Report 2024
Since income is one of the key performance indicators of Lu Thai Textile Co. Ltd. there is an
inherent risk that the management of Lu Thai Textile Co. Ltd. (hereinafter referred to as the
management) manipulates income to achieve specific goals or expectations therefore we identify
income recognition as a key audit matter.
2. Audit response
The audit procedures for revenue recognition mainly include: (1) Understand and evaluate the
design effectiveness of internal control related to revenue recognition and test the effectiveness of
operation; (2) Through interviewing the management and reviewing the relevant contract terms
understand and evaluate whether the income confirmation accounting policy meets the requirements
of the Accounting Standards for Business Enterprises; (3) Perform analytical procedures on revenue
and costs to analyse the rationality of fluctuations in sales volume unit price and gross profit in
each month current year and previous year of the current period; (4) Select samples to check the
supporting evidence such as sales contract product delivery order invoice customs declaration
lading bill and signing receipt; (5) Select samples to verify the balance and transaction amount; (6)
Select samples to verify the amounts related to export sales revenue export tax refund declarations
and China E-Port export data among other relevant information; (7) Select samples to perform a
cut-off test on the revenue recognised before and after the balance sheet date and check the product
delivery slip invoice customs declaration lading bill signing receipt etc. to assess whether the
revenue is recognised within the appropriate period.ii. Inventory falling price reserves
For details please refer to the Note III-13 and the Note V-8 of the financial report.
1. Event description
As at 31 December 2024 the inventory balance of Lu Thai Textile Co. Ltd. was
RMB2290621500 and the inventory depreciation reserve was RMB270737100. The
management withdrew the inventory falling price reserves with significant judgments and estimates
and therefore we identify inventory falling price reserves as a key audit item.
2. Audit response
The audit procedures for inventory falling price reserves mainly include:
(1) Understand and evaluate the design effectiveness of the internal control related to the provision
of inventory decline price and test the effectiveness of operation;
(2) Understand and evaluate the appropriateness of the company’s inventory depreciation reserve
provision policy;
(3) Monitor the inventory and pay attention to the status of the inventory check whether the
defective and inventory with long aging have been identified;
(4) Obtain the inventory age table and conduct an analytical review of the long-age inventory status
and turnover;
(5) Check the changes in the inventory depreciation reserves accrued in previous years and evaluate
the rationality of the changes in inventory depreciation reserves;
(6) Obtain the inventory falling price reserves calculation sheet; recheck and evaluate the rationality
of major estimations made by the management during the determination of net realizable value;
conduct the recalculation check the selling price after the period and analyse the rationality of the
predicted selling price.
91Lu Thai Textile Co. Ltd. Annual Report 2024
iii. Assessment of fair value of financial assets measured at fair value and changes included in
current profit or loss
For details please refer to Note III-11 and Note V-2 12 and 54 of the financial report about
relevant information disclosure.
1. Event description
As at 31 December 2024 the balance of financial asset measured based on the fair value whose
variations were included the current profit and loss of Lu Thai Textiles was RMB776772700 of
which the fair value of financial assets which are classified as Level 1 input values using
quotations from active markets for identical assets was RMB117979000 the fair value of
financial asset classified into the tier-2 input value by adopting the observable input value was
RMB575993700 and the fair value of financial asset classified into the tier-3 input value by
adopting the non-observable input value was RMB82.8 million. Considering that the fair value
changes of this financial asset have a significant impact on Lu Thai Textile Company’s profit or
loss for 2024 and that the company uses valuation techniques to determine its fair value which
typically involves assumptions and estimates relying on subjective judgment the use of different
valuation techniques or assumptions could result in significant differences in the fair value
estimation of the financial instrument. Therefore we identify this matter as a key audit matter.
2. Audit response
The audit procedures for the assessment of financial instrument’s fair value mainly include: (1)
Study and evaluate the effectiveness of the designed internal control for the valuation of financial
instruments and test the operational effectiveness; (2) Assess the professional quality competence
and objectiveness of the independent appraiser employed by the Company’s management; evaluate
the rationality of various assumptions applied by the independent appraiser in the evaluation report
and the appropriateness of the financial instrument valuation models; (3) Assess the rationality and
appropriateness of the observable key input value applied during the valuation of the tier-2 fair
value;
(4) Recheck the rationality appropriateness and calculation accuracy of the key input value during
the fair value assessment for the tier-3 financial instrument measured based the fair value and
involving the management’s major judgment.IV. Other Information
The Company’s management is responsible for the other information. The other information
comprises all of the information included in the Company’s 2024 Annual Report other than the
financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other
information and in doing so consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this
other information we are required to report that fact. We have nothing to report in this regard.
92Lu Thai Textile Co. Ltd. Annual Report 2024
V. Responsibilities of Management and Those Charged with Governance for Financial
Statements
The Company’s management (hereinafter referred to as the “Management”) is responsible for the
preparation of the financial statements that give a fair view in accordance with CAS and for
designing implementing and maintaining such internal control as the management determines is
necessary to enable the preparation of financial statements that are free from material misstatement
whether due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s
ability to continue as a going concern disclosing as applicable matters related to going concern
and using the going concern basis of accounting unless the management either intends to liquidate
the Company or to cease operations or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting
process.VI. Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement whether due to fraud or error and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with CAS will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if individually or in
the aggregate they could reasonably be expected to influence the economic decisions of users taken
on the basis of these financial statements.As part of an audit in accordance with CAS we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to
fraud or error design and perform audit procedures responsive to those risks and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error as
fraud may involve collusion forgery intentional omissions misrepresentations or the override of
internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Management.
(4) Conclude on the appropriateness of the Management’s use of going concern assumptions.
Meanwhile draw a conclusion of the matters that might produce major doubts about the ability of
Lu Thai Textile Company to continue as a going concern and judge whether there are major
uncertainties according to the audit evidence obtained. If we conclude that a material uncertainty
exists we are required by CAS to draw users’ attention in our auditor’s report to the related
disclosures in the financial statements or if such disclosures are inadequate we should modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However future events or conditions may cause the Company to cease to continue as a
going concern.
93Lu Thai Textile Co. Ltd. Annual Report 2024
(5) Evaluate the overall presentation structure and content of the financial statements and whether
the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction supervision and performance of the Company audit. We remain solely
responsible for our audit opinion.We communicate with those charged with governance of the Company regarding the planned scope
and timing of the audit and significant audit findings including any noteworthy deficiencies in
internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence and communicate with them all relationships
and other matters that may reasonably be thought to bear on our independence and where
applicable related safeguards (if applicable).From the matters communicated with those charged with governance we determine those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when in extremely rare circumstances
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.Grant Thornton China Chinese CPA:
(Special General Partnership) (Engagement Partner):
Chinese CPA:
Beijing · China 8 April 2025
II. Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Lu Thai Textile Co. Ltd.
31 December 2024
Unit: RMB
Item Ending Balance Beginning Balance
Current assets:
Monetary assets 2055856788.37 1558252048.03
Held-for-trading financial assets 693972672.64 723800275.39
Derivative financial assets
Notes receivable 51339990.35 99642708.67
94Lu Thai Textile Co. Ltd. Annual Report 2024
Accounts receivable 849168539.27 826467684.78
Receivables financing 10184900.59 18248205.76
Prepayments 94340345.68 51863447.56
Other receivables 23107489.38 22168807.43
Including: Interest receivable
Dividend receivable
Inventories 2019884406.30 2124139574.70
Including: Data resources
Contract assets
Available-for-sale assets
Current portion of non-current assets 154176585.64
Other current assets 59034547.73 145112114.03
Total current assets 6011066265.95 5569694866.35
Non-current assets:
Long-term receivables
Long-term equity investments 120084271.29 143537479.77
Investments in other equity
instruments
Other non-current financial assets 82800000.00 88750000.00
Investment property 18675533.63 19578175.93
Fixed assets 6053755987.08 5597692505.07
Construction in progress 95026709.37 868496878.41
Right-of-use assets 470238928.19 463226419.21
Intangible assets 333384747.50 343347879.42
Including: Data resources
Development costs
Including: Data resources
Goodwill 20563803.29 20563803.29
Long-term deferred expenses 5634560.27 1815838.60
Deferred income tax assets 148530519.94 157892110.06
Other non-current assets 569954322.70 155690266.83
Total non-current assets 7918649383.26 7860591356.59
Total assets 13929715649.21 13430286222.94
Current liabilities:
Short-term loan 849686824.33 580704772.27
Trading financial liabilities 15858713.22 46785831.47
Accounts payable 272079091.51 275502915.05
Advances from customers
Contract liability 191551003.79 188073335.89
95Lu Thai Textile Co. Ltd. Annual Report 2024
Payroll payable 301227361.89 284344973.72
Taxes payable 57261948.01 42633232.55
Other payables 17437799.60 47549373.52
Including: Interest payable
Dividends payable 441113.64 441113.64
Current portion of non-current
liabilities 27788571.75 96207192.49
Other current liabilities 42829460.18 63646908.11
Total current liabilities 1775720774.28 1625448535.07
Non-current liabilities:
Long-term borrowings 396244110.21 259992974.40
Bonds Payable 1509420449.46 1476572070.79
Lease liabilities 91353320.80 86580224.41
Long-term payables
Long-term payroll payable 58494991.36 57276675.61
Provisions
Deferred income 145395121.11 151768947.92
Deferred income tax liabilities 131519037.79 155178797.04
Other non-current liabilities
Total non-current liabilities 2332427030.73 2187369690.17
Total liabilities 4108147805.01 3812818225.24
Owners’ equity:
Share capital 817306010.00 863607634.00
Other equity instruments 71383438.11 71383677.78
Including: Preferred shares
Perpetual bonds
Capital reserves 178518667.31 334792614.76
Less: Treasury stock 193438720.78
Other comprehensive income 166925985.26 131343141.63
Specific reserve
Surplus reserves 1271429282.44 1260661015.34
General reserve
Retained earnings 6933165006.16 6762457543.07
Total equity attributable to owners of
the Company as the parent 9438728389.28 9230806905.80
Equity of non-controlling interests 382839454.92 386661091.90
Total owners’ equity 9821567844.20 9617467997.70
Total liabilities and owners’ equity 13929715649.21 13430286222.94
Legal representative: Liu Zibin Chief Accountant: Zhang Keming Financial Manager: Zhang Keming
96Lu Thai Textile Co. Ltd. Annual Report 2024
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item Ending Balance Beginning Balance
Current assets:
Monetary assets 1098738844.86 932232103.80
Held-for-trading financial assets 348853051.29 446874251.41
Derivative financial assets
Notes receivable 34955445.32 54622178.42
Accounts receivable 381343801.66 356483425.59
Receivables financing 8604909.79 11214873.48
Prepayments 37339639.22 21426761.45
Other receivables 1444344599.59 2064459414.54
Including: Interest receivable
Dividend receivable
Inventories 833923667.33 955634154.13
Including: Data resources
Contract assets
Available-for-sale assets
Current portion of non-current assets 154176585.64
Other current assets 1285523.29 2443246.51
Total current assets 4343566067.99 4845390409.33
Non-current assets:
Long-term receivables
Long-term equity investments 3886201497.79 3579497806.27
Investments in other equity
instruments
Other non-current financial assets 70800000.00 76750000.00
Investment property 61235932.80 64745052.00
Fixed assets 1829970463.91 2048332131.98
Construction in progress 25572141.50 3320771.05
Right-of-use assets 94200828.47 90043845.90
Intangible assets 191804122.33 197852690.71
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term deferred expenses 253990.93 689403.73
Deferred income tax assets 83559877.27 80728077.79
Other non-current assets 502059650.58 153767959.47
97Lu Thai Textile Co. Ltd. Annual Report 2024
Total non-current assets 6745658505.58 6295727738.90
Total assets 11089224573.57 11141118148.23
Current liabilities:
Short-term loan 3180000.00
Trading financial liabilities
Of which: Derivative financial
liabilities
Notes payable 60000000.00
Accounts payable 202868261.19 108266517.50
Advances from customers
Contract liability 62755259.28 106140758.76
Payroll payable 196441126.83 188784236.01
Taxes payable 38807426.46 23490180.58
Other payables 14071692.51 133819575.89
Including: Interest payable
Dividends payable 441113.64 441113.64
Held-for-sale liabilities
Current portion of non-current
liabilities 26337442.97 95832728.97
Other current liabilities 31411042.17 44293993.88
Total current liabilities 632692251.41 703807991.59
Non-current liabilities:
Long-term borrowings 396244110.21 259992974.40
Bonds Payable 1509420449.46 1476572070.79
Including: Preferred shares
Perpetual bonds
Lease liabilities 88480054.92 89388836.15
Long-term payables
Long-term payroll payable 58494991.36 57276675.61
Provisions
Deferred income 110138851.32 114149056.16
Deferred income tax liabilities 98766520.96 120804925.25
Other non-current liabilities
Total non-current liabilities 2261544978.23 2118184538.36
Total liabilities 2894237229.64 2821992529.95
Owners’ equity:
Share capital 817306010.00 863607634.00
Other equity instruments 71383438.11 71383677.78
Including: Preferred shares
Perpetual bonds
98Lu Thai Textile Co. Ltd. Annual Report 2024
Capital reserves 246054960.86 396172649.00
Less: Treasury stock 193438720.78
Other comprehensive income -35886.10 -41439.79
Specific reserve
Surplus reserves 1268320542.80 1257552275.70
Retained earnings 5791958278.26 5923889542.37
Total owners’ equity 8194987343.93 8319125618.28
Total liabilities and owners’ equity 11089224573.57 11141118148.23
3. Consolidated Income Statement
Unit: RMB
Item 2024 2023
1. Revenue 6090615025.20 5961477252.98
Including: Operating revenue 6090615025.20 5961477252.98
2. Costs and expenses 5404431529.13 5430655421.05
Including: Cost of sales 4643578944.63 4591388915.40
Taxes and surcharges 62450436.64 63259971.00
Selling expense 151004439.35 148454814.21
Administrative expense 344326973.11 382327532.79
R&D expense 206820921.71 239775343.18
Financial expenses -3750186.31 5448844.47
Including: Interest expense 102900852.62 86305243.50
Interest income 60956758.61 51052872.64
Add: Other income 34200236.81 45126894.28
Return on investment (“-” for loss) -46506250.57 39364608.46
Including: Share of profit or loss of joint ventures and
associates -23453208.47 -9556170.35
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) -90826774.15 -65020725.14
Credit impairment loss (“-” for loss) -3007666.35 -2300057.75
Asset impairment loss (“-” for loss) -110133501.21 -105876786.52
Asset disposal income (“-” for loss) -3139466.60 -9123336.47
3. Operating profit (“-” for loss) 466770074.00 432992428.79
Add: Non-operating income 9574940.35 9347696.19
Less: Non-operating expense 8534087.54 5146681.99
4. Profit before tax (“-” for loss) 467810926.81 437193442.99
Less: Income tax expense 41549193.80 40841005.37
99Lu Thai Textile Co. Ltd. Annual Report 2024
5. Net profit (“-” for net loss) 426261733.01 396352437.62
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net loss) 426261733.01 396352437.62
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to shareholders of the Company
as the parent 410321398.17 403444254.42
5.2.2 Net profit attributable to non-controlling interests 15940334.84 -7091816.80
6. Other comprehensive income net of tax 35589812.50 23717765.01
Attributable to owners of the Company as the parent 35582843.63 23714243.54
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 35582843.63 23714243.54
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 35556383.35 23714956.57
5.2.7 Other 26460.28 -713.03
Attributable to non-controlling interests 6968.87 3521.47
7. Total comprehensive income 461851545.51 420070202.63
Attributable to owners of the Company as the parent 445904241.80 427158497.96
Attributable to non-controlling interests 15947303.71 -7088295.33
8. Earnings per share
7.1 Basic earnings per share 0.50 0.47
7.2 Diluted earnings per share 0.47 0.42
Where business combinations under common control occurred in the current period the net profit achieved by the
acquirees before the combinations was RMB0.00 with the amount for the same period of last year being RMB0.00.Legal representative: Liu Zibin Chief Accountant: Zhang Keming Financial Manager: Zhang Keming
4. Income Statement of the Company as the Parent
Unit: RMB
100Lu Thai Textile Co. Ltd. Annual Report 2024
Item 2024 2023
1. Operating Revenue 3198292063.60 3427661629.75
Less: Cost of sales 2446188630.00 2657436337.48
Taxes and surcharges 40423609.51 40216738.61
Selling expense 101521242.89 100621317.61
Administrative expense 198977886.85 201565813.64
R&D expense 146201535.79 157866751.74
Financial expenses -21078637.21 -19059608.38
Including: Interest expense 56893451.24 44494486.25
Interest income 45288590.49 33971447.09
Add: Other income 23815868.45 20954801.42
Return on investment (“-” for loss) -56295296.97 217442278.85
Including: Share of profit or loss of joint ventures and
associates -23453208.47 -9556170.35
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) -133010200.12 -17222836.45
Credit impairment loss (“-” for loss) 2110379.60 6673149.93
Asset impairment loss (“-” for loss) -22480583.36 -48963959.94
Asset disposal income (“-” for loss) 5313762.77 -43734.52
2. Operating profit (“-” for loss) 105511726.14 467853978.34
Add: Non-operating income 6928229.84 7022950.83
Less: Non-operating expense 2375328.10 1850658.24
3. Profit before tax (“-” for loss) 110064627.88 473026270.93
Less: Income tax expense 2381956.91 17659482.92
4. Net profit (“-” for net loss) 107682670.97 455366788.01
4.1 Net profit from continuing operations (“-” for net loss) 107682670.97 455366788.01
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income net of tax 5553.69 -11277.45
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 5553.69 -11277.45
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
101Lu Thai Textile Co. Ltd. Annual Report 2024
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 5553.69 -11277.45
6. Total comprehensive income 107688224.66 455355510.56
7. Earnings per share
7.1 Basic earnings per share 0.13 0.53
7.2 Diluted earnings per share 0.16 0.49
5. Consolidated Cash Flow Statement
Unit: RMB
Item 2024 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and
rendering of services 6004666410.54 5492424305.68
Tax rebates 71079349.71 125496730.53
Cash generated from other operating activities 44536550.59 115366461.66
Subtotal of cash generated from operating
activities 6120282310.84 5733287497.87
Payments for commodities and services 3040825877.39 3008274838.63
Cash paid to and for employees 1551618475.12 1565653879.04
Taxes paid 131551451.03 146230769.74
Cash used in other operating activities 152074355.36 158263473.04
Subtotal of cash used in operating activities 4876070158.90 4878422960.45
Net cash flow from operating activities 1244212151.94 854864537.42
2. Cash flows from investing activities:
Proceeds from disinvestment 1020261000.00 9465141937.71
Return on investment 7261003.02 57805732.66
Net proceeds from the disposal of fixed assets
intangible assets and other long-lived assets 1118393.70 6391414.47
Cash generated from other investing activities 719648924.45 153332756.55
Subtotal of cash generated from investing
activities 1748289321.17 9682671841.39
Payments for the acquisition of fixed assets
intangible assets and other long-lived assets 217461635.75 846768782.56
Payments for investments 1225227200.56 9664068682.71
Cash used in other investing activities 1537716982.54 125073907.21
Subtotal of cash used in investing activities 2980405818.85 10635911372.48
Net cash generated from/used in investing
activities -1232116497.68 -953239531.09
102Lu Thai Textile Co. Ltd. Annual Report 2024
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by non-
controlling interests to subsidiaries
Borrowings raised 2146986621.30 1289625206.43
Cash generated from other financing activities 98800.40
Subtotal of cash generated from financing
activities 2146986621.30 1289724006.83
Repayment of borrowings 1822885554.18 1345902236.09
Interest and dividends paid 293297631.61 140337440.33
Including: Dividends paid by subsidiaries to
non-controlling interests
Cash used in other financing activities 58790076.23 191144339.52
Subtotal of cash used in financing activities 2174973262.02 1677384015.94
Net cash generated from/used in financing
activities -27986640.72 -387660009.11
4. Effect of foreign exchange rates changes on
cash and cash equivalents 33687940.05 16753038.55
5. Net increase in cash and cash equivalents 17796953.59 -469281964.23
Add: Cash and cash equivalents beginning of
the period 1353615305.93 1822897270.16
6. Cash and cash equivalents end of the
period 1371412259.52 1353615305.93
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item 2024 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and
rendering of services 3098290208.00 3400282767.04
Tax rebates 9939935.39 18736021.12
Cash generated from other operating activities 37691532.06 104254111.11
Subtotal of cash generated from operating
activities 3145921675.45 3523272899.27
Payments for commodities and services 1588520778.34 2159792398.75
Cash paid to and for employees 732960267.90 800852277.47
Taxes paid 62188734.71 76441020.56
Cash used in other operating activities 102078177.17 81704187.26
Subtotal of cash used in operating activities 2485747958.12 3118789884.04
Net cash flow from operating activities 660173717.33 404483015.23
2. Cash flows from investing activities:
Proceeds from disinvestment 1073041912.36 9682135302.71
Return on investment 10767395.90 224820810.27
Net proceeds from the disposal of fixed assets
intangible assets and other long-lived assets 798733.70 27474017.14
Net proceeds from the disposal of subsidiaries
103Lu Thai Textile Co. Ltd. Annual Report 2024
and other business units
Cash generated from other investing activities 3147468380.82 2278859489.72
Subtotal of cash generated from investing
activities 4232076422.78 12213289619.84
Payments for the acquisition of fixed assets
intangible assets and other long-lived assets 31771255.39 39152926.47
Payments for investments 1636027200.56 10390555710.00
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing activities 3132102262.33 2206901511.31
Subtotal of cash used in investing activities 4799900718.28 12636610147.78
Net cash generated from/used in investing
activities -567824295.50 -423320527.94
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised 760660043.27 287145597.90
Cash generated from other financing activities 142001000.00 90098800.40
Subtotal of cash generated from financing
activities 902661043.27 377244398.30
Repayment of borrowings 700610915.91 485589548.34
Interest and dividends paid 268140822.07 119661804.52
Cash used in other financing activities 289369382.06 274154122.94
Subtotal of cash used in financing activities 1258121120.04 879405475.80
Net cash generated from/used in financing
activities -355460076.77 -502161077.50
4. Effect of foreign exchange rates changes on
cash and cash equivalents 5033615.48 2858399.67
5. Net increase in cash and cash equivalents -258077039.46 -518140190.54
Add: Cash and cash equivalents beginning of
the period 765705926.26 1283846116.80
6. Cash and cash equivalents end of the
period 507628886.80 765705926.26
104Lu Thai Textile Co. Ltd. Annual Report 2024
7. Consolidated Statements of Changes in Owners’ Equity
Amount during the current period
Unit: RMB
2024
Equity Attributable to Owners of the Company as the Parent
Item Equity of Non-
Other Equity Instruments Total Owners’
Share capital Capital Less: Treasury
Other controlling
Preferred Perpetual Reserves Stock Comprehensive
Specific Surplus Reserves General Retained Equity
Other Income Reserve Reserve Earnings
Other Subtotal Interests
Shares Bonds
1. Balances as
at the end of 863607634.00 71383677.78 334792614.76 193438720.78 131343141.63 1260661015.34 6762457543.07 9230806905.80 386661091.90 9617467997.70
the prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Other
2. Balances as
at the
beginning of 863607634.00 71383677.78 334792614.76 193438720.78 131343141.63 1260661015.34 6762457543.07 9230806905.80 386661091.90 9617467997.70
the year
3. Increase/
decrease in the - -
period (“-” for -46301624.00 -239.67 156273947.45 193438720.78 35582843.63 10768267.10 170707463.09 207921483.48 -3821636.98 204099846.50
decrease)
105Lu Thai Textile Co. Ltd. Annual Report 2024
3.1 Total
comprehensive 35582843.63 410321398.17 445904241.80 15947303.71 461851545.51
income
3.2 Capital
increased and
reduced by -46301624.00 -239.67
--
156273947.45193438720.78-9137090.34-19768940.69-28906031.03
owners
3.2.1 Ordinary
shares -
increased by -46301624.00 123788382.82 -170090006.82 -19768940.69 -189858947.51
shareholders
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 -239.67 -32485564.63 -193438720.78 160952916.48 160952916.48
3.3 Profit
distribution 10768267.10 -239613935.08 -228845667.98 -228845667.98
3.3.1
Appropriation
to surplus 10768267.10 -10768267.10
reserves
106Lu Thai Textile Co. Ltd. Annual Report 2024
3.3.2
Appropriation
to general
reserve
3.3.3
Appropriation
to owners (or -228845667.98 -228845667.98 -228845667.98
shareholders)
3.2.4 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
107Lu Thai Textile Co. Ltd. Annual Report 2024
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 817306010.00 71383438.11 178518667.31 166925985.26 1271429282.44 6933165006.16 9438728389.28 382839454.92 9821567844.20
the period
Previous period
Unit: RMB
Item 2023
108Lu Thai Textile Co. Ltd. Annual Report 2024
Equity Attributable to Owners of the Company as the Parent
Equity of
Other Equity Instruments Less: Other Gener
Non- Total Owners’
Share capital Capital Treasury Comprehensi Specific Surplus al Retained Othe
controlling Equity
Preferr Perpetu Reserves Stock ve Income Reserve Reserves Reser Earnings r
Subtotal interests
ed al Other ve
Shares Bonds
1. Balances
as at the end 887633151. 71383830. 395872135. 154396198. 107628898. 1215124336. 6490910719. 9014156872. 393749387. 9407906259.of the prior 00 75 71 73 09 54 35 71 23 94
year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for
corrections
of previous
errors
Other
2. Balances
as at the 887633151. 71383830. 395872135. 154396198. 107628898. 1215124336. 6490910719. 9014156872. 393749387. 9407906259.beginning of 00 75 71 73 09 54 35 71 23 94
the year
3. Increase/
decrease in - -
the period 24025517.0 -152.97 61079520.9 39042522.0 23714243.5 45536678.80 271546823.7 216650033.0 - 209561737.7
(“-” for 0 5 5 4 2 9 7088295.33 6
decrease)
3.1 Total
comprehensi 23714243.5 403444254.4 427158497.9 - 420070202.6
ve income 4 2 6 7088295.33 3
109Lu Thai Textile Co. Ltd. Annual Report 2024
3.2 Capital
increased - - 39042522.0 - -
and reduced 24025517.0 -152.97 61079520.9 5 124147712.9 124147712.9
by owners 0 5 7 7
3.2.1
Ordinary - - - -
shares 24025517.0 76058492.6 100084009.6 100084009.6
increased by 0 2 2 2
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
3.2.3 Share-
based
payments 16824114.8
included in 6 16824114.86 16824114.86
owners’
equity
3.2.4 Other -152.97 - 39042522.0 - -1845143.19 5 40887818.21 40887818.21
3.3 Profit -
distribution 45536678.80 131897430.7
--
086360751.9086360751.90
3.3.1
Appropriatio
n to surplus 45536678.80
-
45536678.80
reserves
110Lu Thai Textile Co. Ltd. Annual Report 2024
3.3.2
Appropriatio
n to general
reserve
3.3.3
Appropriatio
n to owners - - -
(or 86360751.90 86360751.90 86360751.90
shareholders
)
3.2.4 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
111Lu Thai Textile Co. Ltd. Annual Report 2024
3.4.4
Changes in
defined
benefit
pension
schemes
transferred
to retained
earnings
3.4.5 Other
comprehensi
ve income
transferred
to retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in 6075563. 6075563.41 6075563.41
the period 41
3.5.2 Used -
in the period 6075563. -6075563.41 -6075563.4141
3.6 Other
4. Balances
as at the end 863607634. 71383677. 334792614. 193438720. 131343141. 1260661015. 6762457543. 9230806905. 386661091. 9617467997.of the period 00 78 76 78 63 34 07 80 90 70
8. Statements of Changes in Owners’ Equity of the Company as the Parent
Amount during the current period
Unit: RMB
112Lu Thai Textile Co. Ltd. Annual Report 2024
2024
Other Equity Instruments
Item
Share capital Capital Less: Treasury
Other Specific Retained Total Owners’
Preferred Perpetual Other Reserves Stock
Comprehensive
Income Reserve
Surplus Reserves Earnings Other Equity
Shares Bonds
1. Balances as
at the end of 863607634.00 71383677.78 396172649.00 193438720.78 -41439.79 1257552275.70 5923889542.37 8319125618.28
the prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Other
2. Balances as
at the
beginning of 863607634.00 71383677.78 396172649.00 193438720.78 -41439.79 1257552275.70 5923889542.37 8319125618.28
the year
113Lu Thai Textile Co. Ltd. Annual Report 2024
3. Increase/
decrease in the - -
period (“-” for -46301624.00 -239.67 150117688.14 193438720.78 5553.69 10768267.10 -131931264.11 -124138274.35
decrease)
3.1 Total
comprehensive 5553.69 107682670.97 107688224.66
income
3.2 Capital
increased and
reduced by -46301624.00 -239.67
--
150117688.14193438720.78-2980831.03
owners
3.2.1 Ordinary
shares
increased by -46301624.00
-
123788382.82-170090006.82
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
114Lu Thai Textile Co. Ltd. Annual Report 2024
3.2.3 Share-
based
payments
included in
owners’ equity
3.2.4 Other -239.67 -26329305.32 -193438720.78 167109175.79
3.3 Profit
distribution 10768267.10 -239613935.08 -228845667.98
3.3.1
Appropriation
to surplus 10768267.10 -10768267.10
reserves
3.3.2
Appropriation
to owners (or -228845667.98 -228845667.98
shareholders)
3.3.3 Other
115Lu Thai Textile Co. Ltd. Annual Report 2024
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
116Lu Thai Textile Co. Ltd. Annual Report 2024
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 817306010.00 71383438.11 246054960.86 -35886.10 1268320542.80 5791958278.26 8194987343.93
the period
Previous period
Unit: RMB
117Lu Thai Textile Co. Ltd. Annual Report 2024
2023
Other Equity Instruments
Item
Share capital Capital Less: Treasury
Other
Comprehensive SpecificPreferred Perpetual reserves Stock Reserve Surplus Reserves
Retained
Earnings Other
Total Owners’
Shares Bonds Other Income
Equity
1. Balances as
at the end of 887633151.00 71383830.75 457252169.95 154396198.73 -30162.34 1212015596.90 5600420185.06 8074278572.59
the prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Other
2. Balances as
at the
beginning of 887633151.00 71383830.75 457252169.95 154396198.73 -30162.34 1212015596.90 5600420185.06 8074278572.59
the year
3. Increase/
decrease in the
period (“-” for -24025517.00 -152.97 -61079520.95 39042522.05 -11277.45 45536678.80 323469357.31 244847045.69
decrease)
118Lu Thai Textile Co. Ltd. Annual Report 2024
3.1 Total
comprehensive -11277.45 455366788.01 455355510.56
income
3.2 Capital
increased and
reduced by -24025517.00 -152.97 -61079520.95 39042522.05 -124147712.97
owners
3.2.1 Ordinary
shares
increased by -24025517.00 -76058492.62 -100084009.62
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
3.2.3 Share-
based
payments 16824114.86 16824114.86
included in
owners’ equity
3.2.4 Other -152.97 -1845143.19 39042522.05 -40887818.21
3.3 Profit
distribution 45536678.80 -131897430.70 -86360751.90
119Lu Thai Textile Co. Ltd. Annual Report 2024
3.3.1
Appropriation
to surplus 45536678.80 -45536678.80
reserves
3.3.2
Appropriation
to owners (or -86360751.90 -86360751.90
shareholders)
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
120Lu Thai Textile Co. Ltd. Annual Report 2024
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 863607634.00 71383677.78 396172649.00 193438720.78 -41439.79 1257552275.70 5923889542.37 8319125618.28
the period
121Lu Thai Textile Co. Ltd. Annual Report 2024
III. Company Profile
Lu Thai Textile Co. Ltd. (hereinafter referred to as “the Company”) originally Lu Thai Textile Ltd.was a Sino-foreign joint venture established by Zibo Lucheng Textile Investment Co. Ltd.(formerly Zibo Lucheng Textile Co. Ltd. hereinafter referred to as “Lucheng Textile”) and Tailun
(Thailand) Textile Co. Ltd. In February 1993 it was restructured into a joint-stock company.In July 1997 with the approval of the Securities Committee of the State Council 80000000
foreign shares (B-shares) were listed domestically. On 19 August 1997 it was listed on the SZSE
with the B-share stock code being 200726. On 24 November 2000 the CSRC approved the issuance
of an additional 50000000 ordinary shares (A-shares) which were listed on the SZSE on 25
December 2000 with the A-share stock code being 000726.According to the resolution passed at the 10th meeting of the 10th Board of Directors on 19 June
2023 and the Proposal on Repurchase of Domestically Listed Foreign Shares (B-Stock) passed at
the First Extraordinary General Meeting on 6 July 2023 the Company repurchased and cancelled
46176428.00 shares.
According to the resolution passed at the 18th meeting of the 10th Board of Directors on 19 January
2024 and the Proposal on Repurchase and Cancel Authorized but Unlocked Restricted Share of the
Incentive Personnel not Conforming to the Incentive Condition passed at the First Extraordinary
General Meeting on 5 February 2024 the Company repurchased and cancelled 66500.00 shares.According to the resolution passed at the 22nd meeting of the 10th Board of Directors on 28 May
2024 and the Proposal on Repurchase and Cancel Authorized but Unlocked Restricted Share of the
Incentive Personnel not Conforming to the Incentive Condition passed at the Second Extraordinary
General Meeting on 14 June 2024 the Company repurchased and cancelled 59000.00 shares.After several capital increases and repurchases as at 31 December 2024 the Company’s registered
capital was RMB817306000. Specifically there were 59118000 A-shares and 22612600 B-
shares.The Company’s registered address: 61 Luthai Boulevard High-tech Development Zone Zibo City
Shandong Province P.R.China
The Company’s unified social credit code: 91370300613281175K.The Company’s legal representative: Liu Zibin.The scope of business of the Company and its subsidiaries shall include general projects: Fabric
printing and dyeing processing; garment manufacturing wholesale; procurement of primary
agricultural products; power generation and transmission business. The Company’s financial
statements and Notes thereof have been approved by the 30th Meeting of the 10th Board of
Directors held on 8 April 2025.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 Company also disclosed relevant financial information in accordance
with the Regulations on Information Disclosure and Compilation for Companies Public Offering
Securities No. 15-General Provisions on Financial Report (Revised in 2023) issued by CSRC.
122Lu Thai Textile Co. Ltd. Annual Report 2024
The Company’s accounting is based on the accrual basis. Except for certain financial instruments
this financial statement is measured on the basis of historical cost. If the asset is impaired the
corresponding impairment provision shall be made in accordance with relevant regulations.
2. Going-concern
The financial statements are presented on the basis of continuing operations.V. Significant Accounting Policies and Estimates
Specific accounting policies and accounting estimates indicators:
The Company determines income recognition policy according to its production and operation
characteristics and the specific accounting policies are shown in Note V-27.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the
Accounting Standards for Business Enterprises which factually and completely present the
consolidated and the Company’s financial positions as at 31 December 2024 business results and
cash flows for 2024 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 Company 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 to adopt HK Dollar and US Dollar as the recording currency
according their major economic environment of the operating. When preparing the financial
statements for the Reporting Period the Company adopted RMB as the recording currency.
5. Methods for Determining Materiality Standards and Selection Criteria
□ Applicable □ Not applicable
Item Materiality Criteria
Significant receivables withdrawal of
bad debt provision separately accrued Individual receivables exceeding 0.3% of total assets
Significant receivables reversed or
recovered during the Reporting Period Individual receivables exceeding 0.3% of total assets
Significant written-off of receivables
during the Reporting Period Individual receivables exceeding 0.3% of total assets
Significant prepayments aging over
one year Individual prepayment amounts exceeding 0.3% of total assets
Significant construction in progress Individual investment amounts exceeding 1% of total assets
Significant accounts payable aging
over one year Individual accounts payable amounts exceeding 0.3% of total assets
Significant non-wholly-owned A subsidiary whose total assets operating income or total profit (or absolute
subsidiary loss amount) exceeds 10% of the corresponding item in the consolidatedfinancial statements is considered a significant non-wholly owned subsidiary
Significant investment activity projects Individual investment amounts exceeding 5% of total assets
123Lu Thai Textile Co. Ltd. Annual Report 2024
6. Accounting Treatment for Business Combinations under the Common Control and Not
under the Common 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 the merger shall be measured at the carrying value of the merged
party in the consolidated financial statement of the final controller on the combination date. As for
the difference between the carrying value of the merger consideration and carrying value of the net
assets obtained in the merger the capital reserve shall be adjusted and if the capital reserve is
insufficient to offset the retained earnings shall be adjusted.Realize business combination under the same control in steps by transaction several times
The assets and liabilities of the combined party acquired by the combining party in the combination
shall be measured at the book value of the combined party in the consolidated financial statement of
the final controller on the combination date; the difference between the sum of the book value of
investment held before combination plus the book value newly paid on the combination date and
the book value of the net assets acquired in combination is used for adjusting the capital reserve
(capital stock premium) and if the capital reserve (capital stock premium) is insufficient to offset
the retained earnings shall be adjusted. The long-term equity investment held by the merging party
before it obtained control of the merged party has been confirmed to be relevant between the date of
acquiring the original equity and the date when the merging party and the merged party are under
the final control of the same party whichever is later to the date of merger. Changes in profits and
losses other comprehensive income and other owners’ equity should be offset against the opening
retained earnings or current profits and losses during the comparative statement period respectively.
(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 purchase date the acquired
assets liabilities and contingent liabilities of the purchased party are recognised 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 recognised as
goodwill and subsequent measurement is made based on the cost deducting the accumulated
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 the recheck.Achieve business combination not under the same control step by step through multiple transactions
The cost of consolidation is the sum of the consideration paid at the purchase date and the fair value
at the purchase date of the equity already held by the acquired party before the purchase date. For
equity of the acquired party that is already held before the purchase date it shall be re-measured
according to the fair value of the equity on the purchase date and the difference between the fair
value and its book value shall be included in the current investment income. If the equity of the
acquired party held before the purchase date involves other comprehensive income and the changes
of other owner’s equity it shall be transferred to current income on the purchase date other
comprehensive income arising from the remeasurement of the net liability or net asset of a defined
benefit plan by the investee as well as other comprehensive income related to investments in non-
trading equity instruments designated at fair value through other comprehensive income are
excluded.
124Lu Thai Textile Co. Ltd. Annual Report 2024
(3) Treatment of transaction costs in business combinations
Intermediary expenses such as auditing legal services evaluation and consulting and other related
management expenses incurred for the business combination shall be included in the current profit
and loss when incurred. The transaction costs of equity securities or debt securities issued as the
merger consideration shall be included in the initial recognition amount of equity securities or debt
securities.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial
Statements
(1) Criteria for judging control
The consolidation scope of the consolidated financial statements is determined on the basis of
control. Control means that the Company 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. When changes in relevant facts
and circumstances lead to changes in the elements involved in the definition of control the
Company will reassess.In determining whether to include a structured entity within the consolidation scope the Company
considers all facts and circumstances including assessing the purpose and design of the structured
entity’s establishment identifying the types of variable returns and evaluating whether the
Company controls the structured entity based on whether it has assumed some or all of the
variability in returns by participating in its relevant activities.
(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 its subsidiaries and other relevant materials. When preparing
consolidated financial statements the accounting policies and accounting period requirements of the
Company and its subsidiaries are consistent and significant inter-company transactions and
balances are offset.Subsidiaries and businesses increased due to business combinations under the same control during
the Reporting Period shall be included into the Company’s combination scope since the date when
they are jointly controlled by the final controller and the operating result and cash flow since then
shall be respectively included into the consolidated income statement and consolidated cash flow
statement.As for subsidiaries and businesses increase due to business combinations not under the same control
during the Reporting Period the revenue expenses and profit or those subsidiaries and businesses
from the purchase date to the end of the Reporting Period shall be included into the consolidated
income statement and the cash flow thereof shall be included into the consolidated cash flow
statement.The share of shareholders’ equity in subsidiaries not belonging to the Company shall be regarded as
the minority interests and separately listed under the item of shareholders’ equity in the
consolidated balance sheet. The share of current portion of net profit or loss in subsidiaries
belonging to minority interests shall presented as the item of minority interests under the item of net
profit in the consolidated income statement. The difference between the losses of subsidiaries born
by not-controlling shareholders and the share of the company’s owners’ equity at the period-
beginning the not-controlling shareholders enjoy (the former is larger than the latter) shall be offset
the minority interests.
125Lu Thai Textile Co. Ltd. Annual Report 2024
8. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Joint arrangement refers to an arrangement under the joint control of two or more participants. The
Company’s joint arrangements are divided into joint operations and joint ventures.
(1) Joint operations
A joint operation refers to a joint arrangement whereby the Company enjoys relevant assets of the
arrangement and assumes obligations relevant liabilities of the arrangement.The Company recognises the following items related to the interest share in joint operation and
conducts accounting treatment in accordance with relevant provisions of the Accounting Standard
for Business Enterprises:
a) It recognises separately held assets and jointly held assets according to the proportion;
b) It recognises separately assumed liabilities and jointly assumed liabilities according to the
proportion;
c) Income from the sale of the proportion of joint operation output is recognised;
d) Income from the sale of the joint operation output is recognised according to the proportion.e) While the separately incurred fee is recognised the incurred fee for joint operation is recognised
according to the proportion.
(2) Joint ventures
A joint venture refers to a joint arrangement whereby the Company enjoys the right of the net assets
of the arrangement only.Accounting treatment of the investment of a joint venture is conducted by the Company in line with
the provisions of relevant equity method of accounting for long-term equity investment.
9. 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 investments held by the Company that are short-term highly liquid easily
convertible into known amounts of cash and have little risk of change in value.
10. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
The Company’s foreign currency business is translated into the amount of the recording currency at
the approximate exchange rate of the spot exchange rate on the transaction date.On the balance sheet date foreign currency monetary items are translated at the spot exchange rate
on the balance sheet date. The exchange difference arising from the difference between the spot
exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition
or the previous balance sheet date is included in the current profit and loss; for foreign currency
non-monetary items measured at historical cost the translation adopts the spot exchange rate on the
day the transaction occurs; for foreign currency non-monetary items measured at fair value the
translation adopts the spot exchange rate on the day when the fair value is confirmed and the
difference between the amount of recording currency and the amount of original recording currency
shall be included into the current profit or loss or other comprehensive income based on the nature
of non-monetary items.
126Lu Thai Textile Co. Ltd. Annual Report 2024
(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 liabilities items in the balance sheet shall be converted at the spot
exchange rate on the balance sheet date. Other items of shareholders’ equity except for
“undistributed profits” shall be converted at the spot exchange rate on the occurrence date.Items under income and costs in the income statement are translated at the spot exchange rate on the
transaction date.All items in the cash flow statement are converted according to the approximate spot 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 cash and 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 “othercomprehensive income” under the shareholders’ equity in the balance sheet.When disposing of the overseas operation and losing control rights the foreign currency statement
conversion difference related to the overseas operation shown under the shareholders’ equity in the
balance sheet shall be transferred to current profit and loss of disposal in whole or in proportion to
the disposal of overseas operation.
11. Financial Instruments
Financial instruments refer to contracts that form one party’s financial assets and form other parties’
financial liabilities or equity instruments.
(1) Recognition and derecognition of financial instruments
The Company recognises 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:
a) The contractual rights for collecting the cash flow of the said financial asset are terminated;
b) 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 liability be terminated in all or partly. Where the Company (debtor)
enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of
any new financial liability and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability it terminates the
recognition of the existing financial liability and at the same time recognises the new financial
liability.The purchase and sale of financial assets under the normal ways shall be recognised and stopped to
be recognised respectively at the price of transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into the following three categories according to the
business mode of managing financial assets and the contractual cash flow characteristics of
financial assets upon initial recognition: financial assets measured at amortized cost financial assets
127Lu Thai Textile Co. Ltd. Annual Report 2024
measured at fair value and whose changes are included in other comprehensive income and
financial assets measured at fair value and whose changes are included in current profit and loss.Financial assets are measured at fair value upon initial recognition. For financial assets measured at
fair value and whose changes are included in current profit and loss relevant transaction expenses
are directly included in current profit and loss; for other types of financial assets relevant
transaction expenses are included in the initial recognition amount. For accounts receivable arising
from the sale of products or the provision of labour services which do not include or do not
consider significant financing components the amount of consideration the Company is expected to
be entitled to receive is taken as the initial recognition amount.Financial assets measured at amortized cost
The Company classifies financial assets that meet the following conditions and are not designated
to be measured at fair value and whose changes are included in current profit and loss as financial
assets measured at amortized cost:
The Company’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 principal and 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 arising from financial assets measured in amortized cost that are not
part of any hedging relationship are included in current profit and loss when derecognition
amortization according to the effective interest method or impairment is recognised.Financial assets measured at fair value and whose changes are included in other comprehensive
income
The Company classifies financial assets that meet the following conditions and are not designated
to be measured at fair value and whose changes are included in current profit and loss as financial
assets measured at fair value and whose changes are included in other comprehensive income:
The Company’s business model for managing this financial asset is aimed at both collecting the
contractual cash flow and selling this financial asset;
The contractual terms of this financial asset stipulate that the cash flow generated on the specific
date is only the payment of principal and interest based on the principal amount outstanding.Such financial assets are subsequently measured at fair value after initial recognition. Interest
impairment losses or gains and exchange gains and losses calculated by the effective interest
method are included in current profit and loss while other gains or losses are included in other
comprehensive income. When the financial asset is derecognised the accumulated gains or losses
previously included in other comprehensive income are transferred out and included in current
profit and loss.Financial assets at fair value through profit or loss
Except for the above financial assets measured at amortized cost and at fair value with changes
included in other comprehensive income the Company classifies all other financial assets as
financial assets measured at fair value with changes included in current profit and loss. Upon initial
recognition in order to eliminate or significantly reduce accounting mismatches the Company
irrevocably designates some financial assets that should have been measured at amortized cost or at
128Lu Thai Textile Co. Ltd. Annual Report 2024
fair value and whose changes are included in other 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 (including interest 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 Company manages financial
assets to generate cash flow. The business model determines whether the cash flow of the financial
assets managed by the Company comes from the collection of contractual cash flow the sale of
financial assets or both. The Company determines the business model for managing financial assets
on the basis of objective facts and specific business objectives decided by key management
personnel to manage financial assets.The Company evaluates the contractual cash flow characteristics of financial assets to determine
whether the contractual cash flow generated by the relevant financial assets on the specific date is
only the payment of principal and interest based on the principal amount outstanding. Among them
the principal refers to the fair value of financial assets upon initial recognition; interest includes
consideration for the time value of money credit risks related to the principal amount outstanding
in the specific period and other basic lending risks costs and profits. In addition the Company
evaluates the contract terms that may lead to changes in the time distribution or amount of
contractual cash flow of financial assets to determine whether they meet the requirements of the
above-mentioned contractual cash flow characteristics.Only when the Company changes the business mode of managing financial assets will all affected
related financial assets be reclassified on the first day of the first reporting period after business
model changes otherwise financial assets cannot be reclassified after initial recognition.
(3) Classification and measurement of financial liabilities
The Company’s financial liabilities are classified upon initial recognition as: financial liabilities
measured at fair value and whose changes are included in current profit and loss and financial
liabilities measured at amortized cost. For financial liabilities that are not classified as measured at
fair value and whose changes are included in current profit and loss relevant transaction costs are
included in the initial recognition amount.Financial liabilities measured at fair value and whose changes are included in current profit and loss
Financial liabilities measured at fair value and whose changes are included in current profit and loss
include transactional financial liabilities and financial liabilities designated as measured at fair value
upon initial recognition and whose changes are included in current profit and loss. Subsequent
measurement shall be carried out according to fair value for such financial liabilities. Gains or
losses resulting from changes in fair value and dividends and interest expenses related to such
financial liabilities shall be included in current profit and loss.Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective
interest method. Gains or losses resulting from derecognition or amortization are included in current
profit and loss.Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
a) The contractual obligation to deliver cash or other financial assets to other parties.
129Lu Thai Textile Co. Ltd. Annual Report 2024
b) The contractual obligation to exchange financial assets or financial liabilities with other parties
under potentially unfavourable conditions.c) Non-derivative contracts that must be or can be settled with the enterprise’s own equity
instruments in the future and the enterprise will deliver a variable number of its own equity
instruments according to the contract.d) Derivative contracts that must be or can be settled with the enterprise’s own equity instruments
in the future except derivatives contracts 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 Company cannot unconditionally avoid performing a contractual obligation by delivering
cash or other financial assets the contractual obligation meets the definition of financial liability.If a financial instrument must be or can be settled with the Company’s own equity instruments it is
necessary to consider whether the Company’s own equity instruments used to settle the instrument
are used as substitutes for cash or other financial assets or to enable the holder of this instrument to
enjoy the residual equity in the assets after deducting all liabilities from the issuer. If it is the former
this instrument is the Company’s financial liability; if the latter is the case this instrument is the
Company’s equity instrument.
(4) Derivative financial instruments and embedded derivatives
The Company’s derivative financial instruments include forward foreign exchange contracts and
exchange option contracts etc. Initially the fair value on the date when the derivative 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 recognised as an asset
while those with negative fair value are indeed recognised as a liability. Any gains or losses arising
from changes in fair value that do not conform to the provisions of hedge accounting 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 on classification of financial assets shall apply to the hybrid
instruments as a whole. If the main contract is not a financial asset and the hybrid instrument is not
measured at fair value and its changes are included in current profit and loss for accounting
treatment the embedded derivative instrument has no close relationship with the main contract in
terms of economic characteristics and risks and has the same conditions as the embedded derivative
instrument and the separate existing instrument meets the definition of derivative instrument the
embedded derivative instrument shall be separated from the hybrid instrument and treated as a
separate derivative financial instrument. If it is not possible to separately measure embedded
derivative instruments at the time of acquisition or the subsequent balance sheet date the hybrid
instruments as a whole are designated as financial assets or financial liabilities measured at fair
value and their changes are included in current profit and loss.
(5) Fair value of financial instruments
See Note V-12 for the method of determining the fair value of financial assets and liabilities.
(6) Impairment of financial assets
The Company conducts impairment accounting treatment for the following items and confirms the
loss provision based on the expected credit losses:
130Lu Thai Textile Co. Ltd. Annual Report 2024
Financial assets measured at amortized cost;
Receivables and debt instrument investments measured at fair value and whose changes are
included in other comprehensive income;
Contract assets defined in the Accounting Standards for Business Enterprises No. 14-Revenue;
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 financial assets).Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial instruments
weighted by the risk of default. Credit loss refers to the difference between all contractual cash
flows discounted at the original effective interest rate and receivable according to the contract and
all cash flows expected to be collected of the Company 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 difference between the cash flow
receivable from the contract and the cash flow expected to be received and confirms the expected
credit loss.The Company separately measures the expected credit losses of financial instruments at different
stages. If the credit risk of financial instruments has not increased significantly since the initial
recognition it is in the first stage. The Company 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 since its initial recognition but no credit impairment has occurred it is in the second
stage. The Company measures the loss reserve according to the expected credit loss during the
whole duration of this instrument; if the financial instrument has suffered credit impairment since
its initial recognition it is in the third stage. The Company measures the loss reserve according to
the expected credit loss during the whole duration of this instrument.For financial instruments with low credit risk on the balance sheet date the Company assumes that
their credit risk has not increased significantly 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 the whole expected duration of financial instruments. The expected
credit loss in the next 12 months refers to the expected credit loss caused by the possible default
events of financial instruments within 12 months (or the expected duration if the expected duration
of financial instruments is less than 12 months) after the balance sheet date which is part of the
expected credit loss in the whole duration.When measuring the expected credit loss the longest term that the Company needs to consider is
the longest contract term that the enterprise faces credit risk (including the option to renew the
contract).For financial instruments with low credit risk in Stage 1 and Stage 2 the Company shall calculate
the interest income according to the carrying balance and effective interest rate before deducting the
impairment allowances. For financial instruments in Stage 3 interest income is calculated at the
131Lu Thai Textile Co. Ltd. Annual Report 2024
effective interest rate and on the amortized cost by reducing the allowance for asset impairment
from the carrying balance.The Company calculates interest income based on the book balance before deducting impairment
provisions and the effective interest rate for financial instruments in the first and second stages and
with low credit risk. The interest income shall be calculated according to their book balance minus
the amortized cost after impairment provision and the effective interest rate for financial
instruments in the third stage. For receivables such as notes receivable accounts receivable
accounts receivable financing other receivables and contract assets if the credit risk characteristics
of a particular customer significantly differ from those of other customers in the portfolio or if
there is a significant change in the customer’s credit risk characteristics the Company will make
receivables withdrawal of bad debt provision separately accrued. Apart from receivables withdrawal
of bad debt provision separately accrued are made the Company classifies receivables into
portfolios based on credit risk characteristics and calculates the allowance for doubtful debts on a
portfolio basis.Notes receivable accounts receivable and contract assets
The Company always measures its loss reserves at an amount equivalent to the expected credit loss
during the entire duration for notes receivable contract assets and accounts receivable regardless of
whether there is any significant financing component.Company will divide the notes receivable accounts receivable and contract assets into portfolio on
the basis of the credit risk features and calculate the expected credit loss based on the portfolio. The
basis for determining the portfolio is as follows:
A. Notes receivable
Notes receivable portfolio 1: bank acceptance bills with low credit rating
Notes receivable portfolio 2: commercial acceptance bills
B. Accounts receivable
Accounts receivable portfolio 1: payment not overdue (with L/C)
Accounts receivable portfolio 2: payment not overdue (with credit insurance)
Accounts receivable portfolio 3: payment overdue (without credit insurance)
Accounts receivable portfolio 4: payment overdue (with credit insurance)
Accounts receivable portfolio 5: payment overdue (without credit insurance)
For notes receivable and contract assets divided into portfolios with reference to historical credit
loss experience combined with current conditions and predictions of future economic conditions
the Company has calculated expected credit losses through default risk exposure and expected
credit loss rate for the entire duration.For accounts receivable divided into portfolios with reference to historical credit loss experience
combined with current conditions and predictions of future economic conditions the Company has
prepared a comparison table between the number of aging/overdue days of accounts receivable and
the expected credit loss rate over the entire duration and has calculated the expected credit loss.The aging of accounts receivable is calculated from the date of recognition/the number of days
overdue is calculated from the expiry date of the credit period.Other receivables
The Company divides other receivables into several portfolios based on the features of credit risk
and calculates the expected credit losses on the basis of the combination. The basis for determining
the portfolio is as follows:
132Lu Thai Textile Co. Ltd. Annual Report 2024
Other receivables portfolio 1: Receivables from related parties within the scope of consolidation
Other receivables portfolio 2: Tax refund receivable
Other receivables portfolio 3: Deposit receivable and security deposit
Other receivables portfolio 4: other receivables
For other receivables that are divided into portfolios the Company calculates the expected credit
loss with the default risk exposure and the expected credit loss rate within the next 12 months or the
entire duration. For other receivables classified into portfolios by aging the aging is calculated from
the date of recognition. Creditors’ investment and other creditors’ investment
Creditors’ investment and other creditors’ investment
For creditors’ investment and other creditors’ investment the Company calculates the expected
credit based on the nature of the investment as well as kinds of types of counterparties and risk
exposures the default risk exposure and the expected credit loss rate within the next 12 months or
the entire duration loss.Assessment on significant increase of credit risk
In order to determine the relative changes in the default risk of financial instruments during their
expected life and to assess whether the credit risk of financial instruments has increased
significantly since initial recognition the Company compares the default risk of financial
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
Company considers reasonable and reliable information (forward-looking information inclusive)
that can be obtained without unnecessary extra costs or efforts. The information the Company
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’s ability to repay the Company.Based on the nature of financial instruments the Company assesses whether there is great risk in
credit risk on the basis of individual financial instruments or financial instrument portfolios. During
assessment based on financial instrument portfolios the Company can divide 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 Company determines that there is a significant
increase in the credit risk of financial instruments.Financial assets with depreciation of credit
The Company assesses on the balance sheet date whether there is any credit impairment to
financial assets measured at amortized cost and creditors’ investment measured at fair value and
whose changes are included in other comprehensive income. In case of one or more events that
adversely affect the expected future cash flow of a financial asset occur the financial asset will
133Lu Thai Textile Co. Ltd. Annual Report 2024
become financial assets with depreciation of credit. The observable information below can be
treated as evidence for credit impairment to financial assets:
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
Company 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 provision
The Company remeasures expected credit losses on each balance sheet date to reflect the changes in
the credit risk of financial instruments since initial recognition; the increase or reversal amount of
the loss reserve formed there from shall be included in the current profit and loss as impairment
losses or gains. For financial assets measured at amortized cost the loss allowance offsets the
carrying amount of the financial asset listed in the balance sheet; for creditors’ investment that are
measured at fair value and its changes are included in other comprehensive income the Company
recognises its loss reserve in other comprehensive income and will not offset the carrying amount of
the financial asset.Verification
In case that the Company 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 related financial assets. This
situation occurs frequently when the Company determines that the debtor does not have any assets
or any source of income to generate sufficient cash flow to repay the amount that will be written off.However in accordance with the procedures for recovering due payments of the Company 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 the impairment 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 of the financial asset.If the Company has transferred almost all the risks and rewards of the ownership of financial assets
to the transferee derecognise the financial asset; if it retains almost all the risks and rewards of the
ownership of financial assets the financial asset will not be derecognised.If the Company has neither transferred nor retained almost all the risks and rewards of the
ownership of financial assets it shall be dealt with in the following situations: if the control of the
financial asset is abandoned the confirmation of the financial asset shall be terminated and the
generated assets and liabilities shall be confirmed; If the financial assets are controlled the relevant
financial assets shall be recognised according to the extent of their continued involvement in the
transferred financial assets and the relevant liabilities shall be recognised accordingly.
134Lu Thai Textile Co. Ltd. Annual Report 2024
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognised 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 financial asset 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.
12. Measurement of Fair Value
Fair value refers to the price that market participants can receive from sales of an asset or shall pay
for transfer of a liability in the orderly transaction that occurs on the measurement date.The Company 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 Company assumes that the transaction is
conducted in the most beneficial market. The main market (or the most favourable market) is the
trading market that the Company can enter on the measurement date. The Company uses the
assumptions used by market participants to maximize their economic benefits when pricing the
asset or liability.For financial assets or financial liabilities with active markets the Company uses the quotation in
active markets to determine its fair value. If there is no active market for financial instruments the
Company 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 economic benefits or the ability to sell the asset to other market participants
that can best use the asset to generate economic benefits shall be considered.The Company adopts valuation techniques that are applicable in the current situation and have
sufficient available data and other information to support it. Priority is given to using relevant
observable input values. Only when observable input values are unavailable or are not feasible to
obtain the unobservable input values can be used.For assets and liabilities measured or disclosed at fair value in the financial statements the fair
value hierarchy to which they belong is determined based on the lowest level input value that is
important to the fair value measurement as a whole: the first level input value is the unadjusted
quotation of the same assets or liabilities able to be obtained in an active market on the
measurement date; the second level input value is the directly or indirectly observable input value
of the relevant asset or liability except the first level input value; the third level input value is
unobservable input value of related assets or liabilities.On each balance sheet date the Company reassessed the assets and liabilities continuously
measured at fair value confirmed in the financial statements to determine whether there is a
transition among levels of fair value measurement.
13. Inventory
(1) Classification
Inventories mainly include raw materials work-in-progress stock products products processed on
entrustment and etc.
(2) Valuation method of inventories acquiring and issuing
135Lu Thai Textile Co. Ltd. Annual Report 2024
Inventories shall be measured at actual cost when acquired and the cost of the inventories including
the procurement cost processing cost and other costs. Grey yarn dyed yarn and plus material shall
be measured at first-in first-out method when acquired and delivered; 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 inventories
On the balance sheet date the inventories shall be measured at the lower of cost and net realizable
value. When their net realizable value falls below cost an allowance for inventory impairment is
provided.Net realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion the estimated costs necessary to make the sale and relevant taxes.Net realizable value is determined on the basis of clear evidence obtained and takes into
consideration the purpose of holding inventories and effect of post balance sheet events.The Company generally provides for inventory depreciation on a per-item basis. For inventories
that are numerous in quantity and low in unit price an allowance for inventory impairment is
provided based on inventory categories.On the balance sheet date if the factors affecting the value of inventories previously written down
have disappeared the provision for inventory write-downs is reversed to the extent of the original
amount provided.
(4) Stock system of inventory
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 and the packing articles should be amortized by one-off
amortization method when consuming.
14. Long-term Equity Investments
Long-term equity investments include equity investments in subsidiaries joint ventures and
associated enterprises. The investee that the Company is able to exert significant influence is an
associated enterprise of the Company.
(1) Determination of initial investment cost
Long-term equity investment that forms a business combination: Long-term equity investment
obtained by business combination under the same control on the merger date based on the book
value share of the merged party’s owners’ equity in the final controller’s consolidated financial
statements as investment cost; The long-term equity investment acquired by a business combination
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 the initial investment cost according to the actual purchase price;
the long-term equity investment obtained by issuing equity securities shall be the initial investment
cost of the fair value of the equity securities issued.
(2) Subsequent measurement and profit and loss confirmation method
136Lu Thai Textile Co. Ltd. Annual Report 2024
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 have been declared but not yet included in the actual payment or
consideration included in the investment the cash dividends or profits declared by the invested
entity are recognised 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 fair value share of the investee’s identifiable net assets at the
time of investment the investment cost of the long-term equity investment is not adjusted; when the
initial investment cost is less than the investment the investee ‘s If the fair value share of net assets
is identified the book value of the long-term equity investment is adjusted and the difference is
included in the current profit and loss of the investment.When using the equity method of accounting the investment income and other comprehensive
income are recognised separately according to the share of net profit and loss and other
comprehensive income realized by the invested unit that should be enjoyed or shared and the book
value of the long-term equity investment is adjusted at the same time; The distribution of profits or
cash dividends should be calculated to reduce the book value of long-term equity investment; the
investee’s other changes in owner’s equity other than net profit and loss other comprehensive
income and profit distribution adjust the book value of long-term equity investment 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 Company’s accounting policies 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 not constitute control on the conversion date the sum of the fair value
of the original equity plus the additional investment cost will be used as the initial accounting for
the equity method cost of investment. If the original equity is classified as non-trading equity
instrument investment measured at fair value whose changes are included in other comprehensive
income the relevant original and accumulative changes in fair value included in other
comprehensive income shall be transferred to retained earnings when accounting by 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. the remaining equity after the disposal shall be changed to the
Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial
Instruments is performed and the difference between fair value and book value is included in the
current profit and loss. Other comprehensive income recognised by the original equity investment
due to the equity method of accounting shall be accounted for on the same basis as the investee’s
direct disposal of related assets or liabilities when the equity method of accounting 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 disposal can exercise joint control or exert significant influence on the
invested unit the equity method is used for accounting and the remaining equity is treated as When
acquiring the equity method is adopted for adjustment; if the remaining equity after disposal cannot
exercise joint control or exert significant influence on the investee the accounting shall be changedaccording to the relevant provisions of “Accounting Standards for Business Enterprises No. 22-
137Lu Thai Textile Co. Ltd. Annual Report 2024
Recognition and Measurement of Financial Instruments The difference 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 able to exercise joint control or exert significant influence on the
investee the new shareholding ratio shall be used to confirm that the company should enjoy the
capital increase of the investee. The difference between the increase in share and the increase in the
share of net assets and the original book value of the long-term equity investment corresponding to
the decrease in the proportion of the shareholding that should be carried forward are included in the
current profit and loss; That is adjustments are made using the equity method of accounting.The unrealized internal transaction gains and losses that occur between the Company and associates
and joint ventures are calculated according to the shareholding ratio and are attributed to the
Company and the investment gains and losses are recognised on the basis of offset. However the
unrealized internal transaction losses incurred by the Company and the investee are the impairment
losses of the transferred 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 the arrangement must be agreed upon by the parties sharing
control rights before they can make decisions. When judging whether there is joint control first
determine whether all participants or a combination of participants collectively control the
arrangement and secondly determine whether the decision-making related activities of the
arrangement must be unanimously agreed by the participants who collectively control the
arrangement. If all participants or a Company of participants must act in concert to determine the
relevant activities of an arrangement it is considered that all participants or a Company of
participants collectively control the arrangement; if there is a combination of two or more
participants can collectively Controlling an arrangement does not constitute joint 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 policies of the invested unit but cannot control or jointly control the
formulation of these policies with other parties. When determining whether it can exert significant
influence on the invested unit consider that the investor directly or indirectly holds the voting
shares of the invested unit and the current executable potential voting rights held by the investor
and other parties are assumed to be converted into the invested unit After the equity of the company
the impact includes the current convertible warrants stock options and 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 invested unit it is generally considered to have a significant impact on
the invested unit unless there is clear evidence that such circumstances cannot participate in the
production and operation decisions of the invested unit and does not have a significant impact;
when the Company owns less than 20% (excluding) voting rights of the invested unit it generally
does not consider it to have a significant impact on the invested unit unless there is clear evidence
that Under these circumstances it can participate in the production and operation decisions 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 Note V-22.
138Lu Thai Textile Co. Ltd. Annual Report 2024
15. Investment Property
Measurement model of investment real estate
Costing method measurement
Depreciation or amortization method
The 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 withdrawn depreciation or
amortization as regulations of fixed assets or intangible assets.The Company adopts the cost mode to conduct the subsequent measurement on the investment real
estate see the Note V-22 for the method 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 and related taxes is included in the current profit and loss.
16. 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 sake of producing commodities rendering labour service renting
or business management; and (b) their useful life is in excess of one fiscal year.The fixed assets are only recognised when the relevant economic benefits probably flow in the
Company and its cost could be reliable measured.The fixed assets of the Company are initially measured at the actual cost at the time of acquisition.The subsequent expenditures related to the fixed assets shall be included in the cost of the fixed
assets when the economic benefits related to the fixed assets are likely to flow into the Company
and the costs can be measured reliably. The daily repair expenses of fixed assets that do not meet
the conditions of capitalized subsequent expenditures of fixed assets shall be included in the current
profit and loss or the cost of relevant assets according to the beneficiaries when incurred. The book
value of the replaced part shall be terminated.
(2) Depreciation Methods
Category Method Useful Life Salvage Value (%) Annual Deprecation(%)
Houses and buildings Average method ofuseful life 5-30 0-10 20.00-3.00
Machinery equipment Average method ofuseful life 10-18 0-10 10.00-5.00
Transportation Average method of
equipment useful life 5 0-10 20.00-18.00
Electronic equipment Average method of
and others useful life 5 0-10 20.00-18.00
(3) Recognition Basis Pricing and Depreciation Method of Fixed Asset under Finance Lease
See the Note V-22 for details.
139Lu Thai Textile Co. Ltd. Annual Report 2024
(4) At the end of each year review is carried out by the Company for the service life
estimated net residual value and depreciation method of fixed assets.If there is any difference between the expected service life and the original estimated service life
the service life of fixed assets will be adjusted; if there is any difference between the expected net
residual value and the original estimated net residual value the expected net residual value will be
adjusted
(5) Disposal of Fixed Assets
A fixed asset shall be derecognised when it is disposed of or it is expected that no economic benefit
can be generated by using or disposing of it. The amount of the disposal income of sales transfer
scrap or damage of the fixed asset after deducting its book value and related taxes is included in the
current profit and loss.
17. Construction in Progress
Construction in process is measured at actual cost. Actual cost comprises construction costs
borrowing costs that are eligible for capitalization 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
Note V-22.
18. Engineering Materials
Engineering materials of the Company refer to various materials prepared for projects under
construction including engineering materials equipment not yet installed tools and instruments
prepared for production etc.The purchased engineering materials will be measured according to the cost. The received
engineering materials will be transferred to the project under construction and the remaining
engineering materials after the completion of the project will be stored as inventory.Please refer to Note V-22 for the method of provision for impairment of assets for engineering
materials.In the balance sheet the ending balance of engineering materials is listed in the “project underconstruction” item.
19. Borrowing Costs
(1) Confirmation principle of Capitalized Borrowing Expense
The borrowing expenses incurred by the Company if can directly belong to acquisition
construction or production of assets meeting capitalization conditions are capitalized and included
in relevant asset cost; other borrowing expenses are confirmed as expense according to its amount
at the time of occurrence and included in the current profits and losses. If the borrowing expenses
meet the following conditions capitalization starts:
a) Assets expenditure has occurred and asset expenditure includes the expenditure occurring in the
form of payment in cash transferring noncash asset or assuming interest bearing debt for acquiring
constructing or producing the assets meeting capitalization conditions;
b) Borrowing expenses have occurred;
140Lu Thai Textile Co. Ltd. Annual Report 2024
c) The acquisition construction or production activities required for making assets usable or
saleable as intended have started.
(2) Capitalization period of borrowing expenses
When the Company acquires constructs or produces assets which meet capitalization conditions
and reach the intended usable or saleable status the borrowing expenses stop capitalization. The
borrowing expenses that occur after the assets meeting capitalization conditions reach the intended
usable or saleable status are confirmed as expenses according to its amount at the time of
occurrence and are included in the current profits and losses.If the assets meeting capital conditions generate improper interruption in the course of acquisition
construction or production and the interruption time continuously exceeds three months
capitalization of borrowing expenses suspends; the borrowing expenses in the normal interruption
period are continually capitalized.
(3) Capitalization rate of borrowing expenses and calculation method of capitalized amount
The interest expenses of special borrowing actually occurring in the current period minus the
interest income of the unused borrowed capital obtained from depositing in bank or the gain on
temporary investment are capitalized; for common borrowing the weighted average of asset
expenditure of the part that the cumulative asset expenditure exceeds special borrowing is
multiplied by the capitalization rate of the occupied common borrowing to determine capitalization
amount. Capitalization rate is calculated and determined according to the weighted average rate of
common borrowing.In the period of capitalization the exchange difference of special borrowing in foreign currency is
fully capitalized; the exchange difference of special borrowing in foreign currency is included in the
current profits and losses.
20. Intangible Assets
The Company’s intangible assets include land use rights software licenses patents and others.Intangible assets are initially measured at cost and their service life is analysed 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 expected realization method of the
economic benefits related to the assets within the expected service life since they are available for
use. The straight-line method shall be used for amortization if no expected realization method can
be determined reliably. Intangible assets with uncertain service life shall not be amortized.The amortization method of intangible assets with limited service life is as follows:
Category Service Life AmortizationMethod Notes
Land use right Stipulated in the land certificate Method of line
Patent use right Ten years Method of line
Software use rights One to three years Method of line
Trademark right Ten years Method of line
At the end of each year the Company reviews the service life and amortization method of
intangible assets with limited service life. If the estimate is different from the previous one the
original estimate shall be adjusted and treated as per accounting estimate change.
141Lu Thai Textile Co. Ltd. Annual Report 2024
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-22.
21. Research and Development Expenditures
The Company’s R&D expenditure relates directly to R&D activities including R&D personnel’s
employee remuneration direct input expenses depreciation expenses and long-term amortization
expenses design expenses equipment commissioning expenses amortization expenses of
intangible assets commissioned external research and development expenses and other expenses
etc. The wages of R&D personnel are allocated to R&D expenditure based on project hours. R&D
activities that share equipment production lines or sites with other production and operational
activities are allocated to R&D expenditure based on the proportion of hours or area used.The expenditures for internal research and development projects of an enterprise shall be classified
into research expenditures and development 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: It is feasible technically to finish intangible assets for use or sale; It is intended to
finish and use or sell the intangible assets; The usefulness of methods for intangible assets to
generate economic benefits shall be proved including being able to prove that there is a potential
market for the products manufactured by applying the intangible assets or there is a potential market
for the intangible assets itself or the intangible assets will be used internally; It is able to finish the
development of the intangible assets and able to use or sell the intangible assets with the support of
sufficient technologies financial resources and other resources; The development expenditures of
the intangible assets can be reliably measured. The development expenditures shall be recorded into
profit or loss for the current period when they don’t satisfy the following conditions.The research and development project of the Company will enter the development stage after
meeting the above conditions and the project 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 be transferred to intangible assets from the date when the project
reaches the intended purpose.
22. Impairment of Long-term Assets
For long term equity investment in subsidiaries associated enterprises and joint ventures
investment real estate which follow-up measurement is carried out by cost pattern fixed assets
construction in progress right-of-use assets intangible assets business reputation etc. (excluding
inventory 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. If there is the Company will estimate its recoverable amount and
conduct impairment test. For goodwill intangible assets with uncertain service life and intangible
assets that have not reached the serviceable state due to business merger impairment test shall be
carried out every year regardless of whether there is any sign of impairment.
142Lu Thai Textile Co. Ltd. Annual Report 2024
The recoverable amount is determined according to the net amount of the fair value of the asset
minus the disposal expenses and the present value of the expected future cash flow of the asset the
higher amount shall prevail. The Company estimates the recoverable amount on the basis of a
single asset. If it is difficult to estimate the recoverable amount of a single asset the recoverable
amount of the asset group shall be determined based on the asset group to which the asset belongs.The asset group is determined on the basis of whether 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 carrying amount to the recoverable amount and the written down amount will
be included in the current profit and loss and the corresponding asset impairment reserve will be
accrued.Regarding the impairment test of business reputation the carrying amount of business reputation
formed by business merger shall be apportioned to the relevant asset group in a reasonable way
from the date of purchase. If it is difficult to apportion to the relevant asset group it shall be
apportioned to the relevant combination of asset group. The relevant asset group or combination of
asset groups is the one that can benefit from the synergy effect of business merger and is the one
smaller than the reportable segment determined by the Company.In the impairment test if there is any sign of impairment in the asset group or combination of asset
groups related to business reputation first impairment test shall be carried out on the asset group or
combination of asset groups not containing business reputation to calculate the recoverable amount
and recognise the corresponding impairment loss. Then impairment test shall be carried out on the
asset group or combination of asset group containing business reputation to compare the carrying
amount with the recoverable amount. If the recoverable amount is lower than the carrying amount
the impairment loss of business reputation shall be recognised.Once the impairment loss of assets is recognised it will not be reversed in the future accounting
period.
23. Long-term Deferred Expenses
The long-term expenses to be amortized incurred by the Company are valued at the actual cost and
amortized averagely according to the expected benefit period. For long-term expenses to be
amortized the amortized value that cannot benefit the future accounting period shall be included in
the current profit and loss.
24. Payroll
(1) Scope of Employee Remuneration
Payroll refers to the various forms of remuneration or compensation given by an enterprise for
services provided by employees or for the termination of employment relations. Payroll mainly
includes short-term salary welfare after departure demission welfare and other long-term staff
welfare. Benefits provided to employees’ spouses children dependents survivors of deceased
employees and other beneficiaries also belong to the payroll.Based on liquidity payroll is presented in the balance sheet under the items “payroll payable” and
“long-term payroll payable”.
(2) Accounting Treatment of Short-term Compensation
During the accounting period in which employees provide services the Company recognises the
actual employee wages bonuses social insurance premiums such as medical insurance premiums
143Lu Thai Textile Co. Ltd. Annual Report 2024
industrial injury insurance premiums and maternity insurance premiums and housing provident
funds paid to employees according to the prescribed standards and proportions as liabilities and
included them in the current profit and loss or related asset costs.
(3) 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 defined contribution plan refers to the post-employment benefit plan that the
enterprise no longer assumes further payment obligations after the 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 plan
The 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 set withdrawal plan is recognised as a liability and included in the
current profit and loss or related asset costs.
(4) Accounting Treatment of the Demission Welfare
The Company relieves the labour relation with the employees before the due date of the labour
contacts or puts forward the advice of providing the compensation for urging the employees
volunteered to receive the downsizing and when the Company could not unilaterally withdraw the
demission welfare owning to the relieving plan of the labour relation or the downsizing advice
should confirm the liabilities of the employees’ salary from the demission welfare on the earlier day
between the cost confirmed by the Company and the cost related to the reorganization of the
payment of the demission welfare and includes which in the current gains and losses.
(5) Accounting Treatment of the Welfare of Other Long-term Staffs
Other long-term employee benefits provided by the Company to employees that meet the conditions
of defined contribution plans shall be handled in accordance with the above-mentioned relevant
provisions on defined contribution plans. Those in line with the defined benefit plan shall be
handled in accordance with the above-mentioned relevant provisions on the defined benefit plan.However the part of “changes caused by remeasuring the net liabilities or net assets of the definedbenefit plan” in the salary cost of relevant employees shall be included in the current profit and loss
or the relevant asset cost.
25. Provisions
If the obligation related to contingency meets the following conditions at the same time the
Company will recognise it as a provision.
(1) The obligation is the current obligation assumed by the Company;
(2) The performance of the obligation is likely to cause an outflow of economic benefits of the
Company;
(3) The amount of the obligation can be measured reliably.
The provisions are initially measured in accordance with the optimal estimate of the necessary
expenditures for the fulfilment of the current obligation with factors such as risks uncertainty and
the time value of money related to contingencies taken into consideration comprehensively. Where
the time value of money has a significant impact the best estimate is determined by discounting the
144Lu Thai Textile Co. Ltd. Annual Report 2024
relevant future cash outflow. The Company re-checks the book value of the provisions on the
balance sheet date and adjusts the book value to reflect the current best estimate.If all or part of the expenditure required to settle recognised provisions is expected to be
compensated by a third party or other parties the amount of compensation shall be recognised
separately as an asset only when it is substantially certain that it will be received. The recognised
amount of compensation shall not exceed the book value of the recognised liabilities.
26. Share-based Payments and Equity Instruments
(1) Category of share-based payment
The share-based payments of the Company are divided into equity-settled share payments and cash-
settled share payments.
(2) Method of determining the fair value of equity instruments
The Company shall determine the fair value of equity instruments such as options granted in active
markets according to the quotations in active markets. For granted equity instruments such as
options without active markets the fair value is determined by option pricing model. The following
factors shall be considered for the selected option pricing model: a) Exercise price of the option; b)
Expiration date of the option; c) Current price of the object shares; d) Expected fluctuation rate of
stock price; e) Estimated dividends of shares; f) Risk-free interest rate within the option term.
(3) Ground for recognizing the optimal estimation of feasible right equity instruments
On each balance sheet date during the waiting period the Company shall make the optimal estimate
based on subsequent information such as the latest change in the number of employees with feasible
rights and revise the number of equity instruments for the estimated feasible rights. On the feasible
right date the final estimated number of feasible right equity instruments shall be the same as the
actual number of feasible rights.
(4) Relevant accounting treatment for implementing modifying and terminating share-based
payment plan
Equity-settled share-based payments shall be measured at the fair value of the equity instruments
granted to employees. Where the right is exercised immediately after the grant relevant costs or
fees shall be included in accordance with the fair value of the equity instruments on the grant date to
accordingly increase the capital reserve. Where the right is exercised upon the completion of the
services during the waiting period or the achievement of the specified result conditions the services
obtained in the current period shall be included in the relevant costs or fees and the capital reserve
according to the fair value of the equity instruments on the grant date based on the optimal estimate
of the number of feasible right equity instruments on each balance sheet date during the waiting
period. The recognised related costs or fees and total owner’s equity after the feasible right date
shall not be adjusted any more.When the Company modifies a share-based payment plan if the modification increases the fair
value of the equity instruments granted the increase in the services acquired shall be recognised
accordingly according to the increase in the fair value of the equity instruments; if the modification
increases the number of equity instruments granted the fair value of the increased equity
instruments shall be recognised accordingly as the increase in the services acquired. The increase in
the fair value of the equity instruments refers to the difference between the fair values of the equity
instruments before and after the modification on the modification date. If the modification reduces
the total fair value of the share-based payment or any other method not conducive to the employees
is adopted to modify the terms and conditions of the share-based payment plan the accounting
145Lu Thai Textile Co. Ltd. Annual Report 2024
treatment of the services acquired would continue as if such change had never occurred unless the
Company cancels some or all of the granted equity instruments.During the waiting period if the granted equity instrument is cancelled (Excluding those cancelled
due to failure to meet non-market-based vesting conditions such as service conditions or non-
market-based performance conditions.) the Company shall treat the cancelled equity instrument as
an accelerated exercise immediately include the left amount to be recognised during the waiting
period in the current profit and loss and recognise the capital reserve at the same time. Where the
employee or other party can choose to meet the non-feasible right condition but fails during the
waiting period it shall be treated as the cancellation of the granted equity instrument.
(5) Restricted Shares In the equity incentive plan the Company grants restricted stocks to the
incentive personnel who firstly subscribe the stocks. If the unlocking conditions specified in the
equity incentive plan are not met the Company will repurchase the stocks at the previously agreed
price. Where the restricted stocks issued to the employees has gone through capital increase
procedures such as registration in accordance with relevant provisions the Company shall on the
grant date recognise the share capital and the capital reserve in conformity with the subscription
payment received from the employees. Meanwhile it shall recognise the treasury stocks and other
payables with respect to repurchase obligations.
27. Revenue
Accounting policies adopted for the recognition and measurement of revenue disclosed by type of
business
(1) General principle
The Company recognises revenue when it has fulfilled its contract performance obligation in a
contract namely when the customer obtains the control over the related commodity or service.If a contract contains two or more performance obligations the Company allocates transaction price
to single performance obligations on the contract commencement date according to the relative ratio
of separate price of goods or services committed by single performance obligation and income is
measured according to the transaction price allocated to single performance obligation.When meeting one of the following conditions the Company belongs to performance of contract
performing obligations in a period or otherwise the Company belongs to performance of contract
performing obligations at a point of time:
a) While the Company is performing the contract the customer acquires and consumes the
economic benefit arising from performance by the Company.b) The customer can control the goods in construction in the course of performance by the
Company.c) The goods outputted in the course of performance by the Company have irreplaceable purpose
and the Company has the right to collection of money for the completed performance part
cumulative up to now in the whole term of contract.For the performance obligation performed in a period the Company confirms income according to
the performance progress in such period. When the performance progress cannot be reasonably
determined if the cost that the Company has incurred is expected to be compensated income is
confirmed according to the cost amount that has occurred until the performance progress can be
reasonably determined.
146Lu Thai Textile Co. Ltd. Annual Report 2024
For the performance obligation performed at a point of time income is confirmed at the point of
time when the customer acquires the control right to relevant goods or services. When it judges
whether the customer has acquired the control right to the goods or services the Company will
consider the following indications:
a) The Company enjoys the current collection right to the goods or services i.e. the customer
undertakes current payment obligation to the goods.b) The Company has transferred the legal ownership of the goods to the customer that is the
customer has owned the legal ownership of the goods.c) The Company has transferred the kind of the goods to the customer namely the customer has
possessed the good in kind.d) The Company has transferred the major risks and remuneration on the ownership of the goods
i.e. the customer has acquired the major risks and remuneration on the ownership of the goods.e) The customer has accepted the goods or services.f) Other indications showing that the customer has acquired the control right to the goods.The Company has transferred goods or services and has the right to collect consideration (and the
right depends on factors other than time elapse) as contract assets and contract asset is accrued
impairment on the basis of expected credit loss (refer to Note V-11. The right of the Company
unconditionally (only depending on time elapse) charging consideration from the customer is listed
as receivable. The obligation of the Company that shall transfer goods or services to the customer
for the consideration that has been or shall be collected is liability to the contract.The contract assets and contract liabilities under the same contract are listed in net amount. If net
amount is debit balance it is listed in the items “contract asset” or “other non-current asset”
according to its fluidity; if net amount is credit balance it is listed in the items “contract liability” or
“other non-current liability” according to its fluidity.
(2) Specific methods
The specific income confirming methods of the Company are following:
For income of domestic products after the Company delivers products to the purchaser according to
the provisions of the contract and the purchaser confirms receipt the purchaser acquires the control
right of products and the Company confirms income.For income of exportable products after the Company completes customs declaration of products
departure and obtains bill of lading according to the provisions of the contract the purchaser
acquires the control right of products and the Company confirms income.Differences in methods for the recognition and measurement of revenue caused by different
business models for the same type of business
Not applicable
28. Contract Costs
Contract cost includes the incremental cost incurred for acquiring contract and contract performance
cost.The incremental cost incurred for acquiring contract refers to the cost that will not occur if the
Company has not acquired contract (for example sales commission). If the cost is expected to be
147Lu Thai Textile Co. Ltd. Annual Report 2024
recovered the Company regards it as contract acquiring cost and confirms it as an asset. The
expenses incurred by the Company for acquiring contract other than the incremental cost expected
to be recovered are included in the current profits and losses at the time of occurrence.If the cost incurred for performance of contract does not belong to inventory and other scope of
other corporate accounting standards and meets the following conditions the Company will regard
it as contract performance cost and confirm it as an asset:
a) The cost is directly related to a copy of contract currently acquired or expected to be acquired
including direct labour direct materials manufacture expenses (or similar expenses) cost
determined to be undertaken by the customer and other cost incurred due to the contract;
b) The cost increases the resources of the Company that will be used for performance of contract
obligations in the future;
c) The cost is expected to be recovered.The assets confirmed by the contract acquiring cost and the assets confirmed by the contract
performance cost (“assets related to contract cost”) are amortized according to the same basis as
confirmation of goods or service income related to the asset and are included in the current profits
and losses. If the amortization term does not exceed one year it will be included in the current
profits and losses at the time of occurrence.When the book value of an asset related to contract cost is higher than the difference between the
following two items the Company accrues provision for impairment to the excessive part and
confirms it as impairment loss:
a) The remaining consideration that the Company expects to acquire from transfer of goods or
services related to the asset;
b) The cost that will occur for transfer of such related goods or services as estimated.
29. Government Grants
Government grants are recognised 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 for non-monetary assets shall be measured by fair value.Asset related government grants refer to the government grants obtained by the Company for
acquisition and construction 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 the rest shall be regarded as
income-related government subsidy. If it is difficult to distinguish the government subsidy shall be
regarded as the income-related government subsidy.The government grants related to assets shall be recognised as the deferred income which shall be
included in the profit and loss in instalment in a reasonable and systematic way within the service
life of the relevant assets. Income-related government grants which are used to compensate the
relevant costs or losses incurred shall be included in the current profit and loss. Those used to
compensate the relevant costs or losses in the later period shall be included in the deferred income
and shall be included in the current profit and loss during the recognition period of the relevant
148Lu Thai Textile Co. Ltd. Annual Report 2024
costs or losses. The government grants measured according to the nominal amount shall be directly
included in the current profit and loss. The same method is adopted for the same or similar
government subsidy businesses of the Company.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 recognised government grants need to be returned and are used to offset the carrying
value of related assets when initially recognised the carrying value of the assets shall be adjusted;
the book balance of relevant deferred income shall be offset if there is a balance of relevant deferred
income and the excess part shall be included in the current profit and loss. Otherwise it shall be
directly included 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 the loan bank the actual received loan amount shall be taken as the
entry value of the loan and the loan cost shall be calculated according to the loan principal and the
policy preferential interest rate. If the Ministry of Finance allocates the interest subsidy directly to
the Company the interest subsidy will offset the borrowing costs.
30. 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 tax expense except the adjustment business reputation arising from
business merger or the deferred income tax related to the transactions or 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 tax basis the Company recognises the deferred income tax by balance
sheet liability method.For all taxable temporary differences related deferred income tax liabilities are recognised unless
the taxable temporary differences are generated in the following transactions:
(1) The initial recognition of business reputation or the initial recognition of assets or liabilities
arising from transactions with the following characteristics: The transaction is not a business merger
and does not affect the accounting profit or taxable income when it occurs (Excluding transactions
that initially recognised assets and liabilities resulting in equal taxable temporary differences and
deductible temporary differences.);
(2) Regarding the taxable temporary difference related to the investment of subsidiaries joint
ventures and associated enterprises the time of reversal of the temporary difference can be
controlled and the temporary difference is unlikely to be reversed in the foreseeable future.For deductible temporary differences deductible losses and tax credits that can be carried forward
in subsequent years the Company is likely to obtain the future taxable income as the limit to offset
the deductible temporary differences deductible losses and tax credits in which way to recognise
the deferred income tax assets arising from the deductible temporary differences deductible losses
and tax credits 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 (Excluding transactions that initially recognised assets and liabilities
resulting in equal taxable temporary differences and deductible temporary differences.);
149Lu Thai Textile Co. Ltd. Annual Report 2024
(2) The corresponding deferred income tax assets shall be recognised if the deductible temporary
differences related to the investment of subsidiaries joint ventures and associated enterprises meet
the following conditions simultaneously: The temporary differences are likely to be reversed in the
foreseeable future and the taxable income used to deduct the deductible temporary differences 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 Company on the basis of the applicable tax rate during the period when the assets
are expected to be recovered or the liabilities are expected to be paid off 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 the
liabilities 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 taxable income to offset against the benefit of the deferred income tax
asset the book value of the deferred income tax assets shall be written down. Any such write-down
should be subsequently reversed where it becomes probable that sufficient taxable income will be
available.As at the balance sheet date deferred income tax assets and deferred income tax liabilities are
presented as a net amount when the following conditions are simultaneously met:
(1) The tax entity within the Company has a legally enforceable right to set off current income tax
assets against current income tax liabilities;
(2) The deferred income tax assets and deferred income tax liabilities are related to income taxes
levied by the same taxation authority on the same taxable entity within the Company.
31. Lease
(1) Identification of lease
On the start date of the contract the Company assessed as the lessee or the lessor whether the
customers in the contract are entitled to obtain almost all the economic benefits arising from the use
of the identified assets during the use period and have the right to dominate the use of the identified
assets during the use period. If a party to the contract transferred the right allowing the control over
the use of one or more assets that have been identified within a certain period in exchange for a
consideration such contract is determined by the Company to be a lease or includes a lease.
(2) As the lessee
On the commencement date of the lease term the Company recognises the right-of-use assets and
lease liabilities for all leases except for short-term leases and low-value asset leases with simplified
treatment.For accounting policies for the right-of-use assets see Note V-32.Lease liabilities are initially measured in line with the lease payments not yet paid on the
commencement date of the lease term using the present value calculated by the interest rate implicit
in lease. If the interest rate implicit in lease cannot be determined the incremental borrowing rate
shall be used as the discount rate. Lease payments include: Fixed payment and substantial fixed
payment and the relevant amount after deducting the lease incentive if any; variable lease payments
depending on index or ratio; exercise price of the purchased option provided that the lessee
reasonably determines that the option will be exercised; the amount to be paid for the exercise of
the lease termination options provided that the lease term reflects that the lessee will exercise the
options to terminate the lease; and estimated payments due to the guaranteed residual value
150Lu Thai Textile Co. Ltd. Annual Report 2024
provided by the lessee. Subsequently it calculates the interest expenses of the lease liabilities
during each period of the lease term at a fixed periodic interest rate and includes them in current
profit and loss. Variable lease payments that are not covered in the measurement of the lease
liabilities are included in current profit or loss when actually incurred.Short-term lease
A short-term lease refers to a lease for a period not exceeding 12 months on the commencement
date of the lease except for leases with a purchase option.The Company includes the short-term lease payment in the cost of relevant assets or the current
profit and loss in each period of the lease term by the straight-line method.Low-value asset lease
A low-value asset lease refers to a lease where the value is lower than RMB40000 and a single
leased asset is a new asset.The Company includes the lease payment of the low-value asset lease in the cost of relevant assets
or the current profit and loss in each period of the lease term by the straight-line method.For low-value asset lease it chooses to adopt the aforesaid simplified treatment method in line with
the specific status of each lease.Lease change
If a lease changes and meets the following conditions simultaneously the lease change shall be
regarded as a separate lease for accounting treatment: a) The lease change expands its lease cope by
increasing one or multiple use rights of lease assets; and b) The increased consideration is
equivalent to the amount of the separate price for the expanded part of the lease which is adjusted
according to the contract.Where the lease change is not regarded as a separate lease for accounting treatment on the effective
date of the lease change by the Company the consideration of the contract is amortized again upon
change the lease term is redetermined and the lease liabilities are remeasured according to the
present value that is calculated by the lease payments and the revised discount rate upon change.The Company shall correspondingly reduce the book value of the right-of-use assets and include the
profit or loss of the lease terminated in part or whole in the current profit or loss if the lease change
narrows the scope of lease or shortens the lease term.The Company shall correspondingly adjust the book value of the right-of-use assets if other lease
changes result in the re-calculation of the lease liability.
(3) As the lessor
When the Company is a lessor it shall recognise leases that substantially transfer all risks and
remuneration related to the ownership of assets as finance leases and leases other than finance
leases as operating leases.Financial lease
In a finance lease the Company recognises the net lease investment as the book value of finance
lease receivables on the commencement date of the lease term. The net lease investment is the sum
of the unguaranteed residual value and the present value of lease receivables not yet received on the
commencement date of the lease term at the interest rate implicit in lease. The Company calculates
and confirms the interest income at a fixed periodic interest rate in each period in the lease term.
151Lu Thai Textile Co. Ltd. Annual Report 2024
Variable lease payments obtained that are not included in the net lease investment for measurement
where the Company is the lessor are included in the profit or loss of the current period when
actually incurred.Accounting treatment shall be conducted for the derecognition and impairment of finance lease
receivables in accordance with the provisions of the Accounting Standard for Business Enterprises
No.22 - Recognition and Measurement of Financial Instruments and the Accounting Standard for
Business Enterprises No.23 - Transfer of Financial Assets.Operating leases
The Company shall recognise the current profit and loss of the rent of the operating lease in each
period of the lease term by the straight-line method. The initial direct costs related to the operating
lease shall be capitalized amortized within the lease term on the same basis as the recognition of
rental earning and included in profit or loss for the current period. The received variable lease
payments related to the operating lease that are not included in the lease payments receivable are
included in profit or loss for the current period when they are actually incurred.Lease change
Where an operating lease changes the accounting treatment is conducted for it which is regarded as
a new lease from the effective date of the change and receivables in advance or lease receivables
related to lease before change are deemed as the receivables in the new lease.Where a finance lease changes and meets the following conditions simultaneously the change is
regarded as a separate lease by the Company for accounting treatment: a) The change expands its
lease cope by increasing one or multiple use rights of lease assets; and b) The increased
consideration is equivalent to the amount of the separate price for the expanded part of the lease
which is adjusted according to the contract.Where a finance lease changes and is not regarded as a separate lease for accounting treatment the
Company treats the changed lease under the following circumstances: a) If the change comes into
force on the commencement date of the lease term the lease will be clarified as an operating lease
while it will be regarded as a new lease for accounting treatment by the Company on the effective
date of the lease change and the net lease investment before the effective date of lease change will
be regarded as the book value of lease assets; and b) If the change comes into force on the
commencement date of the lease term the lease will be clarified as a finance lease the Company
will carry out accounting treatment in accordance with the provisions on modification or
renegotiation of a contract of the Accounting Standard for Business Enterprises No. 22 -
Recognition and Measurement of Financial Instruments.
32. Right-of-Use Assets
(1) Recognition conditions for right-of-use assets
The term “right-of-use assets” refers to the right of the Company as lessee to use the leased assets
during the lease term.At the start date of the lease term the Company initially measures the right-of-use assets at cost.The cost includes: the initial measurement amount of lease obligations; the lease payment amount
paid on or prior to the inception of the lease (less the related amount of lease incentives already
enjoyed if any); the initial direct cost incurred by the lessee; and the anticipated cost of dismantling
and removing the leasehold property restoring the site where the leasehold property is located or
bringing the leasehold property back to the state agreed upon in the lease terms. As the lessee the
Company shall recognise and measure the cost of demolition and restoration in accordance with the
152Lu Thai Textile Co. Ltd. Annual Report 2024
Accounting Standards for Business Enterprises No.13 - Contingencies. Subsequent adjustments are
made for any re-measurement of the lease liabilities.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation.Where it can be reasonably certain that the Company the lessee can obtain ownership of the leased
assets at the expiry of the lease term the leased assets are depreciated over the residual service life.If the Company cannot reasonably determine that it can acquire the ownership of underlying assets
upon the expiration of the lease term the depreciation of such underlying assets is recognised
during the shorter period between the lease term and the service life of the underlying assets.
(3) Impairment test method and impairment provision method of right-of-use assets See Note V-22.
33. Cost of Safety Production and Maintenance
In accordance with the regulations of the Notice on Issuing the Management Measures for the
Provision and Use of Enterprise Production Safety Costs (C.Z. [2022] No. 136) issued by the
Ministry of Finance and the Ministry of Emergency and based on the above actual annual operating
revenue of power generation and supply enterprises the Company adopts the method where the
deduction rate declines when the operating revenue increases to deduct safety production costs
according to the following standards:
Annual actual sales revenue standard Proportion of safety production cost (%)
Not exceeding RMB10 million 3
RMB10 million to RMB100 million 1.5
RMB100 million to RMB1 billion 1
RMB1 billion to RMB5 billion 0.8
Safety production costs and costs for sustaining simple reproduction are included in the cost of
relevant production or current loss and profit when deducted and are simultaneously included in the
“specific reserve”.When using the deducted safety production costs and the costs for sustaining simple reproduction in
conformity with regulations the outgoing expenditures shall directly be used to offset the specific
reserve; the costs becoming fixed assets shall be aggregated under “construction in progress” and
then be recognised as fixed assets when the safety project is completed and reaches the intended
available status. The aforesaid fixed assets will not be depreciated as accrued in the future period.
34. Repurchase of Shares
Before the shares repurchased by the Company are cancelled or transferred they are managed as
treasury shares and all expenditures for the repurchase of shares are transferred to the cost of
treasury shares. Consideration and transaction costs paid in share repurchase reduce shareholders’
equity. When buying back transferring or cancelling shares in the Company no profits or losses
are recognised.The transfer of inventory shares shall be credited to the capital reserve on the basis of the difference
between the amount actually received and the carrying amount of the treasury stock. Write off
surplus reserves and undistributed profits if capital reserves are insufficient to offset. Write-off of
treasury stocks can reduce shares in par with par value and number of write-out stocks. The capital
reserve is offset based on the difference between book balance and face value of cancelled treasury
stocks. Write off surplus reserves and undistributed profits if capital reserves are insufficient to
offset.
153Lu Thai Textile Co. Ltd. Annual Report 2024
35. Material Accounting Judgments and Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an
ongoing basis based on historical experience and other factors including reasonable expectations
of future events. Important accounting estimates and critical assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next
fiscal year are listed as follows:
Classification of financial assets
The significant judgments involved when the Company determines the classification of financial
assets include analysis of business models and contractual cash flow characteristics.The Company determines the business model for managing financial assets at the level of the
financial asset portfolio taking into account factors such as the approach of evaluating and
reporting the performance of financial assets to key management personnel the risks affecting the
performance of financial assets and the manner in which they are managed and way in which the
relevant business management personnel are compensated. When the Company evaluates whether
the contractual cash flows of financial assets are consistent with the basic lending arrangements it
makes the following main judgments: whether the time distribution or amount of the principal may
change during the duration due to early repayment; whether the interest is only Includes time value
of money credit risk other fundamental lending risks and consideration against costs and profits.For example whether the amount of early repayment reflects only the outstanding principal and
interest based on the outstanding principal as well as reasonable compensation paid for early
termination of the contract.Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to
default risk of accounts receivable and the expected credit loss ratio and determines the expected
credit loss ratio based on the probability of default and the default loss ratio. When determining the
expected credit loss ratio the Company uses data such as internal historical credit loss experience
and adjusts historical data to take into account current conditions and forward-looking information.When considering forward-looking information the Company uses indicators such as the risk of
economic downturn and changes in the external market environment technological environment
and customer profile. The Company regularly monitors and reviews the assumptions related to the
calculation of expected credit losses.Goodwill impairment
We shall assess whether there is impairment of goodwill at least annually. This requires estimating
the use value of the asset group to which goodwill has been assigned. When estimating the use
value the Company shall estimate the future cash flows from the asset group and select the
appropriate discount rate to calculate the present value of future cash flows at the same time.Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses the
Company recognises deferred income tax assets for all unused tax losses. This requires the
Company’s management to use many judgments to estimate the timing and amount of future
taxable profits taking into account tax planning strategies so as to determine the amount of
deferred income tax assets to be recognised.Determination of fair value of unlisted equity investment
154Lu Thai Textile Co. Ltd. Annual Report 2024
The fair value of unlisted equity investment is the expected future cash flows discounted at the
current discount rate for items with similar terms and risk characteristics. Such valuation requires
the Company to estimate expected future cash flows and discount rates and is therefore subject to
uncertainty. Under limited circumstances if the information used to determine fair value is
insufficient or if the range of possible estimates of fair value is wide and the cost represents the
best estimate of fair value within that range the cost may represent its appropriate estimate of fair
value within that range of distribution.
36. Changes in Main Accounting Policies and Estimates
(1) Significant Changes in Accounting Policies
□ Applicable□ Not applicable
(2) Significant Changes in Accounting Estimates
□ Applicable□ Not applicable
VI Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
Taxable value-added amount (the taxable amount is
VAT calculated by multiplying the taxable sales by theapplicable tax rate and deducting the input tax 13% 9% 6% 5% 3% 0
allowed to be deducted in the current period)
Urban maintenance and
construction tax Turnover tax actually paid 7% 5%
Enterprise income tax Income tax payable 0 11% 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 Company Limited 15%
Lulian New Materials 15%
Lu Thai Hong Kong 16.5?0?%
Luqun Textile 25%
Xinsheng Power 25%
Shanghai Luthai 2?0?%
Lujia Import & Export 20%
Zhishu Consulting 20? %?
Lu Thai Occupational Training School 0? ?%
Banyang Mountain Villa 2?0%?
Huilin International 15%
Tianyi Apparel 0%
VACL 11%
2. Tax Preference
In accordance with the Notice for Announcing the First Batch of Hi-tech Enterprise Identification
List of Shandong Province in 2023 with reference No. Lu Ke Zi [2024] 4 the Company was
identified as a hi-tech enterprise and the certificate issuing date was 29 November 2023; the
majority-owned subsidiary LuFeng Company Limited was identified as a hi-tech enterprise and the
certificate issuing date was 29 November 2023. In accordance with the Notice for Announcing Hi-
tech Enterprise List of Shandong Province in 2022 the majority-owned subsidiary Lulian New
Materials was identified as a hi-tech enterprise and the certificate issuing date was 12 December
155Lu Thai Textile Co. Ltd. Annual Report 2024
2022. Therefore in accordance with Article 28 of the Enterprise Income Tax Law of the People’s
Republic of China and the Announcement of the State Administration of Taxation on Issues
Concerning the Implementation of Preferential Income Tax Policies for High-tech Enterprises
(Announcement No. 24 [2017] of the State Administration of Taxation) the applicable enterprise
income tax rate shall be 15%. The wholly-owned subsidiaries including Shanghai Lu Thai Zhishu
Consulting Banyang Villa and Lujia Import and Export have been recognised as small low-profit
enterprises. According to the Announcement of the Ministry of Finance and the State Taxation
Administration on Preferential Income Tax Policies for Small Low-profit Enterprises and Privately
or Individually-owned Businesses (Announcement No. 6 [2023] of the Ministry of Finance and the
State Taxation Administration) and Announcement of the Ministry of Finance and the State
Taxation Administration on Further Implementing the Preferential Income Tax Policies for Micro
and Small Enterprises (Announcement No. 13 [2022] of the Ministry of Finance and the State
Taxation Administration) the portion of the annual taxable income of small low-profit enterprises
not exceeding RMB3 million shall be included in the taxable income at a reduced rate of 25% and
the enterprise income tax shall be paid at the tax rate of 20%.The wholly-owned subsidiary Lu Thai Vocational Training School has been recognised as a non-
profit making organization exempt from tax between 2021 and 2025. According to Article 26 Item
4 of the Enterprise Income Tax Law of the People’s Republic of China the policy whereby eligible
non-profit making organizations are exempt from enterprise income tax shall apply to the foregoing
subsidiary.Lu Thai (Hong Kong) Textile Co. Ltd. (hereinafter refers as Lu Thai (Hong Kong) Textile) the
wholly-owned subsidiary of the Company was incorporated in Hong Kong SAR whose profit tax
shall be paid at tax rate of 16.5%.The wholly own subsidiary VACL according to the Burma’s Special Economic Zone Law issued
by Pyidaungsu Hluttaw VACL 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 22%. Year 2024 is the second year of tax halving period with the enterprise income
tax rate at 11%.The wholly-owned subsidiary Tianyi Apparel enjoys a three-year corporate income tax exemption
starting from the operating year in accordance with the Myanmar Investment Law issued by the
Myanmar Parliament. After grace period enterprise income tax rate was of 22%. 2024 is the first
year of the tax exemption period.The wholly-owned subsidiary Huilin International which was registered in the Hainan Free Trade
Port and operates in the encouraged industry shall pay enterprise income tax at a reduced tax rate of
15% between 1 January 2020 and 31 December 2024 according to the Announcement of the
Ministry of Finance and the State Taxation Administration on the Preferential Income Tax Policies
for Enterprises Registered in the Hainan Free Trade Port (Announcement No. 31 [2020] of the
Ministry of Finance and the State Taxation Administration).VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 4283695.11 2633018.72
Bank deposits 2051573093.26 1280487534.58
156Lu Thai Textile Co. Ltd. Annual Report 2024
Other monetary funds 275131494.73
Total 2055856788.37 1558252048.03
Of which: total amount deposited
overseas 293656210.45 271126295.17
Other notes:
As at 31 December 2024 the restricted cash amounted to RMB0.The bank deposits include accrued interest of RMB10960046.31.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value through profit or loss 693972672.64 723800275.39
Of which:
Investment in debt instruments 230874092.14 203706725.51
Equity instrument investment 462622130.31 509832518.35
Derivative financial assets 476450.19 10261031.53
Of which:
Total 693972672.64 723800275.39
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bills 50959990.35 99642708.67
Trade acceptance notes 380000.00
Total 51339990.35 99642708.67
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying Carrying amount Bad debt provision Carrying
Amount Proportion Amount Withdrawal valueproportion Amount Proportion amount
Withdrawal value
proportion
Of which:
Notes
receivable
of bad debt
provision 51359990.35 100.00% 20000.00 0.04% 51339990.35 99642708.67 100.00% 99642708.67
withdrawn
by groups
Of which:
Commercial
acceptance 400000.00 0.78% 20000.00 5.00% 380000.00
bills
Bank
acceptance
bills with 50959990.35 99.22% 50959990.35 99642708.67 100.00% 99642708.67
low credit
ratings
Total 51359990.35 100.00% 20000.00 51339990.35 99642708.67 100.00% 99642708.67
Provision for bad debts on a portfolio basis: Bank acceptance bills with low credit ratings
157Lu Thai Textile Co. Ltd. Annual Report 2024
Unit: RMB
Name Ending balanceCarrying amount Bad debt provision Withdrawal proportion
Bank acceptance bills with
low credit ratings 50959990.35
Total 50959990.35
Notes to the determination basis for the group:
Based on the fact that the likelihood of loss on the notes receivable is minimal and the amount of
expected credit losses on the notes receivable is not material the Company has not provided for bad
debts on the notes receivable.Bad debt provision for commercial acceptance bills is made on a portfolio basis considering the
aging and credit risk characteristics of the bills.Unit: RMB
Name Ending balanceCarrying amount Bad debt provision Withdrawal proportion
Commercial acceptance
bills 400000.00 20000.00 5.00%
Total 400000.00 20000.00
Notes to the determination basis for the group:
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes
receivable:
□ Applicable□ Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Beginning Changes in the current periodCategory balance Withdrawal Reversed or
Ending
recovered Verification Other balance
Commercial
acceptance 20000.00 20000.00
bills
Total 20000.00 20000.00
Including: Significant amount of provision for bad debts recovered or reclassified in the Reporting
Period:
□ Applicable□ Not applicable
(4) Notes Receivable which Had Endorsed by the Company or had Discounted and had not
Due on the Balance Sheet Date at the Period-end
Unit: RMB
Item Amount of recognition termination at Amount of not terminated recognitionthe period-end at the period-end
Bank acceptance bills 34463775.21
Total 34463775.21
158Lu Thai Textile Co. Ltd. Annual Report 2024
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 904143884.57 878555822.01
One to two years 2598409.10 3129451.20
Two to three years 767071.40 143033.80
More than three years 435318.77 7777701.22
Three to four years 206818.00 3717366.06
Four to five years 195961.82 4037499.15
Over 5 years 32538.95 22836.01
Total 907944683.84 889606008.23
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying Carrying amount Bad debt provision Carrying
Amount Proportion Amount Withdrawal valueproportion Amount Proportion Amount
Withdrawal value
proportion
Accounts
receivable
withdrawal
of Bad debt 1380525.86 0.15% 1380525.86 100.00% 5481360.70 0.62% 5481360.70 100.00%provision
separately
accrued
Of which:
Accounts
receivable
withdrawal 906564157 99.85% 57395618.7 6.33% 84916853 884124647. 99.38% 57656962.7 6.52% 826467684.of bad debt .98 1 9.27 53 5 78
provision of
by group
Of which:
Group 1:
Undue 164066967 16406696 158223236. 158223236.accounts .38 18.07% 7.38 80 17.79% 80
(L/C)
Undue
accounts
(credit 108041036.63 11.90% 1134430.94 1.05%
10690660137080593.
5.691815.41%1439346.211.05%
135641246.
insurance 97
insured)
Undue
accounts (no 489845177 24492258.8 46535291 447692502.credit .53 53.95% 9 5.00% 8.64 26 50.32%
22384625.05.00%425307877.917
insurance)
Overdue
accounts
(credit 42135584.31 4.64% 6615286.73 15.70%
35520297.47975300.4
5885.39%7532122.1615.70%
40443178.3
insurance 2
insured)
Overdue
accounts (no 102475392 11.29% 25153642.1 24.55% 77321749. 93153014.8 10.47% 26300869.2 28.23% 66852145.5credit .13 5 98 1 9 2
insurance)
Total 907944683 100.00% 58776144.5 6.47% 84916853 889606008. 100.00% 63138323.4.84 7 9.27 23 5 7.10%
826467684.
78
Bad debt provision separately accrued: 2024
Unit: RMB
159Lu Thai Textile Co. Ltd. Annual Report 2024
Beginning balance Ending balance
Name Carrying Bad debt Carrying Bad debt Withdrawal Reason for
amount provision amount provision proportion withdraw
Customer 1 2751489.34 2751489.34 1380525.86 1380525.86 100.00% Customer infinancial difficulty
Customer 2 2729871.36 2729871.36
Total 5481360.70 5481360.70 1380525.86 1380525.86
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts
receivable.□ Applicable□ Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Beginning Changes in the current periodCategory balance Withdrawal Reversed orrecovered Verification Other
Ending balance
Bad debt
provision 63138323.45 2992091.75 7354270.63 58776144.57
Total 63138323.45 2992091.75 7354270.63 58776144.57
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 7354270.63
Notes to verification of accounts receivable:
There were no write-offs of significant accounts receivable.
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected
according to Arrears Party
Unit: RMB
Ending balance of bad
Name of Ending balance of
Ending Ending balance of Proportion to total
accounts balance of accounts ending balance of
debt provision of
entity receivable contract receivable and accounts receivable
accounts receivable and
assets contract assets and contract assets impairment provision forcontract assets
Customer
169454344.8169454344.817.65%60655.12
Customer
239391513.1839391513.184.34%845465.98
Customer
335537927.6535537927.653.91%8422488.85
Customer
429274136.3329274136.333.22%1463706.81
Customer
527576176.5227576176.523.04%1489797.05
Total 201234098.49 201234098.49 22.16% 12282113.81
160Lu Thai Textile Co. Ltd. Annual Report 2024
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Notes receivable 10234905.61 18336324.55
Less: Other comprehensive income-
fair value change -50005.02 -88118.79
Total 10184900.59 18248205.76
(2) Other Notes
The Company and some subsidiaries based on their daily cash management needs discount and
endorse a portion of the bank acceptance bills. Therefore the bank acceptance bills with high credit
ratings from the Company and these subsidiaries are classified as financial assets measured at fair
value with changes recognised in other comprehensive income.There was no bank acceptance bill for which bad debt provision accrued separately in the Company.On December 31 2024 the Company believed that there was no significant credit risk in the bank
acceptance bill held by the Company and no significant loss caused by bank defaults.
(1) At the end of the period the Company has no pledged receivables
(2) At the end of the period the Company has endorsed or discounted receivables that are not yet
due.Category Amount of recognition termination Amount of not terminatedat the period-end recognition at the period-end
Bank acceptance bills 154967910.84
Trade acceptance notes
Total 154967910.84
The bank acceptance bill used for discount is accepted by a bank with high credit grade the credit
risk and deferred payment risk are low and the interest rate risk related to the bill has been
transferred to the bank. It can be judged that the main risk and reward on the ownership of the bill
have been transferred so the bank acceptance bill was derecognised at the period-end.
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 23107489.38 22168807.43
Total 23107489.38 22168807.43
(1) Other Accounts Receivable
1) Other Receivables Classified by Nature
Unit: RMB
Nature Ending balance Beginning carrying amount
Export rebates 4399746.28 3798857.69
VAT to be returned 7514820.14 7283733.09
Payment on behalf 8666645.96 8669608.81
Guarantee deposit and cash deposit 2181386.82 1613961.78
161Lu Thai Textile Co. Ltd. Annual Report 2024
Borrowings and petty cash 1255511.54 1962604.48
Other 5311251.41 5078173.43
Total 29329362.15 28406939.28
2) Disclosure by Aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 18125208.20 17090150.86
One to two years 1153509.15 7685279.13
Two to three years 6434852.90 177000.00
More than three years 3615791.90 3454509.29
Three to four years 166000.00 35020.00
Four to five years 846.87 78300.00
Over 5 years 3448945.03 3341189.29
Total 29329362.15 28406939.28
3) Withdrawal of Bad Debt Provision
Bad debt provision in the first stage at the period-end:
Expected rate of
Category Carryingamount credit losses in the
Bad debt Carrying
provision value Reasonnext 12 months (%)
Bad debt provision
separately accrued
Withdrawal of bad
debt provision by 18670016.05 5.00 933500.80 17736515.25
group
Tax receivable 4399746.28 5.00 219987.32 4179758.96 Not pastdue
Security deposit and 2181386.82 5.00 109069.34 2072317.48 Not pastmargin receivable due
VAT to be returned 879184.02 5.00 43959.20 835224.82 Not pastdue
Other receivables 11209698.93 5.00 560484.94 10649213.99 Not pastdue
Total 18670016.05 5.00 933500.80 17736515.25
Bad debt provision in the second stage at the period-end:
Expected credit loss
Category Carrying amount rate for the entire Bad debtprovision Carrying value Reasonduration (%)
Bad debt provision
separately accrued
Withdrawal of bad
debt provision by 10496334.05 48.83 5125359.92 5370974.13
group
VAT to be returned 6635636.12 48.83 3240181.12 3395455.00 Over due
Other receivables 3860697.93 48.83 1885178.80 1975519.13 Over due
Total 10496334.05 48.83 5125359.92 5370974.13
Bad debt provision in the third stage at the period-end:
Category Carrying Expected credit loss Bad debt Carryingamount rate for the entire provision value Reason
162Lu Thai Textile Co. Ltd. Annual Report 2024
duration (%)
Bad debt provision
separately accrued 163012.05 100.00 163012.05
Customer 1 163012.05 100.00 163012.05 Customer infinancial difficulty
Total 163012.05 100.00 163012.05
Bad debt provision in the first stage at the end of the previous year:
Category Carrying
Expected rate of
amount credit losses in the
Bad debt
provision Carrying value Reasonnext 12 months (%)
Bad debt provision
separately accrued
Withdrawal of bad debt
provision by group 17605269.82 5.00 880263.44 16725006.38
Tax receivable 3798857.69 5.00 189942.89 3608914.80 Not pastdue
Security deposit and 1613961.78 5.00 80698.09 1533263.69 Not pastmargin receivable due
VAT to be returned 303857.45 5.00 15192.87 288664.58 Not pastdue
Other receivables 11888592.90 5.00 594429.59 11294163.31 Not pastdue
Total 17605269.82 5.00 880263.44 16725006.38
Bad debt provision in the second stage at the end of the previous year:
Expected credit
Category Carrying loss rate for the Bad debtamount entire duration provision Carrying value Reason
(%)
Bad debt provision
separately accrued
Withdrawal of bad
debt provision by 10638657.41 48.83 5194856.36 5443801.05
group
VAT to be returned 6979875.64 48.83 3408273.28 3571602.36 Over due
Other receivables 3658781.77 48.83 1786583.08 1872198.69 Over due
Total 10638657.41 48.83 5194856.36 5443801.05
Bad debt provision in the third stage at the end of the previous year:
Category Carrying
Expected credit
amount loss rate for the
Bad debt Carrying
provision value Reasonentire duration (%)
Bad debt provision
separately accrued 163012.05 100.00 163012.05
Customer 1 163012.05 100.00 163012.05 Customer infinancial difficulty
Total 163012.05 100.00 163012.05
4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
163Lu Thai Textile Co. Ltd. Annual Report 2024
Unit: RMB
Changes in the current period
Category Beginningbalance Withdrawal Reversed or
Charged- Ending
recovered off/Written- Other balanceoff
Expected credit loss of the
next 12 months at the first 880263.44 65071.04 11833.68 933500.80
stage
Expected loss in the
duration (credit impairment
not occurred) at the second 5194856.36 69496.44 5125359.92
stage
Expected loss in the
duration (credit impairment 163012.05 163012.05
occurred) at the third stage
Total 6238131.85 65071.04 69496.44 11833.68 6221872.77
5) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears
Party
Unit: RMB
Name of Proportion to total
entity Nature Ending balance Aging ending balance of
Ending balance of
other receivables % bad debt provision
Customer Rebate of Within 1 year 1 to 2
1 VAT 7514820.14 years 2 to 3 years and 25.62% 3284140.33over 3 years
Customer Payment on
2 behalf 5902639.81 Within 1 year 20.13% 295131.99
Customer
3 Export rebates 4399746.28 Within 1 year 15.00% 219987.31
Customer Payment on
4 behalf 1425253.29 Within 1 year 4.86% 71262.66
Customer Payment on
5 behalf 1173027.75 Within 1 year 4.00% 58651.39
Total 20415487.27 69.61% 3929173.68
7. Prepayment
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Aging Ending balance Beginning balanceAmount Proportion Amount Proportion
Within 1 year 94018468.42 99.66% 51843880.46 99.96%
One to two years 321877.26 0.34% 17437.82 0.04%
More than three years 2129.28
Total 94340345.68 51863447.56
Notes of the reasons of the prepayment aging over 1 year with significant amount but failed settled
in time:
There were no significant prepayments aged over one year during the year.
164Lu Thai Textile Co. Ltd. Annual Report 2024
(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment Target
Other notes: The advances to suppliers from the top five of prepaid parties classified based on the
ending balance totals RMB85110945.93 in the current period accounting for 90.22% of the total
ending balance of the advances to suppliers.
8. Inventory
Whether the Company needs to comply with the disclosure requirements for the real estate industry
Not
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Depreciation Depreciation
reserves of reserves of
inventories or inventories or
Item Carrying impairment
amount provision for Carrying value
Carrying impairment
amount provision for Carrying value
contract contract
performance performance
costs costs
Raw materials 806501875.49 55650999.99 750850875.50 961742257.63 48846493.37 912895764.26
Work-in-
progress 520394109.82 6229881.12 514164228.70 504407562.92 11183192.80 493224370.12
Inventory
goods 952987895.46 208856231.77 744131663.69 886717966.10 181209030.54 705508935.56
Commissioned
products 10737638.41 10737638.41 12510504.76 12510504.76
Total 2290621519.18 270737112.88 2019884406.30 2365378291.41 241238716.71 2124139574.70
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance
Costs
Unit: RMB
Increased amount of the Decreased amount for the
Item Beginning current period current periodbalance Transferred-back Ending balanceWithdrawal Other or charged-off Other
Raw materials 48846493.37 9933886.27 3129379.65 55650999.99
Work-in-
progress 11183192.80 4953311.68 6229881.12
Inventory
goods 181209030.54 72555066.14 44907864.91 208856231.77
Total 241238716.71 82488952.41 52990556.24 270737112.88
Item The specific basis for determining the net realizable
Reasons for charge-off/write-off of
value inventory falling price reserves in thecurrent period
Raw Estimated selling price deducts the estimated selling
materials expense and the relevant taxes Sales
Inventory Estimated selling price deducts the estimated selling
goods expense and the relevant taxes Sales
Work-in- Estimated selling price of finished goods deducts the cost
progress estimated until completion estimated sales taxes and Salesrelevant taxes
165Lu Thai Textile Co. Ltd. Annual Report 2024
9. Current portion of non-current assets
Unit: RMB
Item Ending balance Beginning balance
Debt investment due within one year 150000000.00
Interest payable of investment in debt
obligations 4176585.64
Total 154176585.64
(1) Investments in Debt Obligations Due within One Year
□ Applicable □ Not applicable
1) Significant debt investments maturing within one year at the end of the period
Unit: RMB
Item Par value Coupon
Actual interest rate Overdue principal
rate Maturity Ending Beginning Ending Beginning
balance balance balance balance
Return
voucher 150000000.00 3.00% 22 December 2025
Total 150000000.00
(2) Other Investments in Debt Obligations Due within One Year
□ Applicable□ Not applicable
10. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
Other tax 8592405.88 801750.09
Prepaid income tax 37101.68 2774815.63
Prepaid other taxes 205457.78 3453982.70
Convertible broken lot fund 199662.42 199680.79
Deposit for recognisance 49999919.97 137881884.82
Total 59034547.73 145112114.03
11. Long-term Equity Investment
Unit: RMB
Increase/decrease
Beginning Beginning Gains and Ending
balance balance of losses Adjustment of
Cash
Changes bonus or Withdrawal
Ending balance
Investee (carrying depreciation Additional Reduced other of (carrying
balance of
recognised of other profits Other depreciation
value) reserve investment investment value)under the comprehensiveincome equity announced
impairment reserve
equity method to issue provision
I. Joint ventures
II. Associated enterprises
Ningbo Mei
sham
Bonded Port 48257699.71 -
Area 16932009.13
31325690.58
Haohong
166Lu Thai Textile Co. Ltd. Annual Report 2024
Equity
Investment
Partnership
(L.P)
(hereinafter
referred toas “HaohongInvestment”)
Ningbo
Haoying
Equity
Investment
Partnership
(L.P) 95279780.06 -6521199.35 88758580.71
(hereinafter
referred toas “HaoyingInvestment”)
Subtotal 143537479.77 -23453208.48 120084271.29
Total 143537479.77 -23453208.48 120084271.29
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□ Applicable□ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
12. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Equity instrument investment 70800000.00 76750000.00
Financial assets assigned measured by fair value and the
changes be included in the current gains and losses 12000000.00 12000000.00
Total 82800000.00 88750000.00
13. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
□ Applicable □ Not applicable
Unit: RMB
Item Houses and Land use Constructionbuildings right in progress Total
I. Original carrying value
1. Beginning balance 33708658.12 33708658.12
2. Increased amount for the current period
(1) Outsourcing
(2) Transfer from inventory/fixed
assets/construction in progress
(3) Business combination increase
3. Decreased amount for the current period
(1) Disposal
167Lu Thai Textile Co. Ltd. Annual Report 2024
(2) Other transfer
4. Ending balance 33708658.12 33708658.12
II. Accumulative depreciation and
accumulative amortization
1. Beginning balance 14130482.19 14130482.19
2. Increased amount for the current period 902642.30 902642.30
(1) Withdrawal or amortization 902642.30 902642.30
3. Decreased amount for the current period
(1) Disposal
(2) Other transfer
4. Ending balance 15033124.49 15033124.49
III. Depreciation reserves
1. Beginning balance
2. Increased amount for the current period
(1) Withdrawal
3. Decreased amount for the current period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 18675533.63 18675533.63
2. Beginning carrying value 19578175.93 19578175.93
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□ Applicable□ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
(2) Investment Property Adopting the Fair Value Measurement Mode
□ Applicable□ Not applicable
14. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 6053755987.08 5597692505.07
Liquidation of fixed assets
Total 6053755987.08 5597692505.07
(1) List of Fixed Assets
Unit: RMB
168Lu Thai Textile Co. Ltd. Annual Report 2024
Item Houses and Machinery Transportation
Electronic
buildings equipment equipment equipment and Totalothers
I. Original
carrying value:
1. Beginning
balance 3771409356.61 7498350318.66 55476805.41 130828101.77 11456064582.45
2. Increased
amount for the 431603027.12 556519470.71 6071045.62 18029952.11 1012223495.56
current period
(1) Purchase 17050.66 536700439.47 5877573.44 17909841.29 560504904.86
(2) Transfer from
construction in 415431437.32 2803693.83 418235131.15
progress
(3) Business
combination
increase
(4) Other increase 16154539.14 17015337.41 193472.18 120110.82 33483459.55
3. Decreased
amount for the 49606894.55 55372088.11 3920827.69 2498436.34 111398246.69
current period
(1) Disposal or
scrap 14230252.41 53606237.41 3920827.69 2498436.34 74255753.85
(2) Transfer from
construction in 35376642.14 1765850.70 37142492.84
progress
(3) Transfer from
investment
properties
(4) Other
decrease
4. Ending balance 4153405489.18 7999497701.26 57627023.34 146359617.54 12356889831.32
II. Accumulative
depreciation
1. Beginning
balance 1343515450.34 4311518011.89 43379836.82 116797266.54 5815210565.59
2. Increased
amount for the 136146707.14 343134282.19 3693397.15 6770393.19 489744779.67
current period
(1) Withdrawal 132593176.28 334960656.12 3551712.53 6673488.94 477779033.87
(2) Other
Increases 3553530.86 8173626.07 141684.62 96904.25 11965745.80
3. Decreased
amount for the 27812556.33 37462666.70 3488784.11 2165771.19 70929778.33
current period
(1) Disposal or
scrap 11751599.38 37462666.70 3488784.11 2165771.19 54868821.38
(2) Transfer from
construction in 16060956.95 16060956.95
progress
(3) Transfer from
investment
properties
(4) Other
decrease
4. Ending balance 1451849601.15 4617189627.38 43584449.86 121401888.54 6234025566.93
III. Depreciation
reserves
1. Beginning 429416.16 42691703.55 5671.30 34720.78 43161511.79
169Lu Thai Textile Co. Ltd. Annual Report 2024
balance
2. Increased
amount for the 25386028.32 7115964.65 95867.51 32597860.48
current period
(1) Withdrawal 25386028.32 7115964.65 95867.51 32597860.48
(2) Other
Increases
3. Decreased
amount for the 6650364.96 730.00 6651094.96
current period
(1) Disposal or
scrap 6650364.96 730.00 6651094.96
(2) Other
decrease
4. Ending balance 25815444.48 43157303.24 5671.30 129858.29 69108277.31
IV. Carrying
value
1. Ending
carrying value 2675740443.55 3339150770.64 14036902.18 24827870.71 6053755987.08
2. Beginning
carrying value 2427464490.11 3144140603.22 12091297.29 13996114.45 5597692505.07
(2) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item Ending carrying amount
Houses and buildings 5549546.45
(3) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Lufeng weaving dye Under the relevant certificate procedures of acceptance
grey yarn warehouse 11376516.78 measurement examination by the real estate trading centre and otherdepartments
Lu Thai Textile
Warehouse 01 02 5953194.32 The same as above
Lulian New Materials
Yarn Warehouse 7549747.37 The same as above
Overseas production 1042686246.55 To be submitted to the relevant department for processing uponbase factory completion
Other notes:
Other increases are due to the foreign exchange translation differences of overseas subsidiaries.The Company has no fixed assets that are mortgaged or guaranteed.
15. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 77047650.62 383113337.09
Engineering materials 17979058.75 485383541.32
Total 95026709.37 868496878.41
170Lu Thai Textile Co. Ltd. Annual Report 2024
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation
amount reserves value amount reserves Carrying value
Production line
project of high-
grade fabrics 23298916.44 23298916.44 375973427.49 375973427.49
(Phase I)
Reform project
of Xinsheng 1824455.78 1824455.78 4783916.38 4783916.38
Thermal Power
Other sporadic
projects 51924278.40 51924278.40 2355993.22 2355993.22
Total 77047650.62 77047650.62 383113337.09 383113337.09
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Other Proportion Of which:
decreased of Accumulated amount of Capitalization
Project Beginning Increased Transferred in amount Ending accumulated capitalized rate of
Name Budget balance amount of the
Job amount of
fixed assets for the balance investment schedule interest interests interests for
Capital
current period current in capitalization for the the Reporting
resources
period constructions Reporting Periodto budget Period
Production Public
line offering
project of
high-grade 464800000.00 375973427.49 57080609.60 409755120.65 23298916.44 107.80% 99.00 11598184.16
fund and
self-
fabrics raised
(Phase I) fund
Reform
project of
Xinsheng 9200000.00 4783916.38 2537476.05 5496936.65 1824455.78 94.40% 95.00 Other
Thermal
Power
Other
sporadic 2355993.22 52551359.03 2983073.85 51924278.40 Other
projects
Total 474000000.00 383113337.09 112169444.68 418235131.15 77047650.62 11598184.16
(3) Impairment Test of Construction in Progress
□ Applicable□ Not applicable
(4) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation
amount reserves value amount reserves Carrying value
Special
materials 871768.43 871768.43
Special
equipment to 17979058.75 17979058.75 484511772.89 484511772.89
be installed
Total 17979058.75 17979058.75 485383541.32 485383541.32
171Lu Thai Textile Co. Ltd. Annual Report 2024
16. Right-of-use Assets
(1) List of Right-of-use Assets
Unit: RMB
Item Houses and buildings Land use right Total
I. Original carrying value
1. Beginning balance 57851702.69 452496166.65 510347869.34
2. Increased amount for the current period 20306315.10 13684124.37 33990439.47
(1) Rent 20246757.65 7535013.28 27781770.93
(2) Lease Liabilities Adjustment
(3) Other Increase 59557.45 6149111.09 6208668.54
3. Decreased amount for the current period 535874.95 535874.95
(1) Sublease is a financial lease
(2) Transfer or hold for sale
(3) Maturity 535874.95 535874.95
(4) Other decrease
4. Ending balance 77622142.84 466180291.02 543802433.86
II. Accumulative depreciation
1. Beginning balance 14623691.51 32497758.62 47121450.13
2. Increased amount for the current period 11481964.66 15495965.83 26977930.49
(1) Withdrawal 11434329.96 15157850.85 26592180.81
(2) Other Increases 47634.70 338114.98 385749.68
3. Decreased amount for the current period 535874.95 535874.95
(1) Disposal
(1) Sublease is a financial lease
(2) Transfer or hold for sale
(3) Maturity 535874.95 535874.95
(4) Other decrease
4. Ending balance 25569781.22 47993724.45 73563505.67
III. Depreciation reserves
1. Beginning balance
2. Increased amount for the current period
(1) Withdrawal
(2) Other Increases
3. Decreased amount for the current period
(1) Disposal
(1) Sublease is a financial lease
(2) Transfer or hold for sale
(3) Maturity
172Lu Thai Textile Co. Ltd. Annual Report 2024
(4) Other decrease
4. Ending balance
IV. Carrying value
1. Ending carrying value 52052361.62 418186566.57 470238928.19
2. Beginning carrying value 43228011.18 419998408.03 463226419.21
(2) Impairment Test of Right-of-use Assets
□ Applicable□ Not applicable
Other notes:
The Company recognises lease expenses related to short-term leases and leases of low-value assets
as detailed in Note VII-64.
17. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Patent Non-patent Software use Trademarkright technologies rights right Total
I. Original carrying
value
1. Beginning balance 470338494.00 409550.00 2137122.72 472885166.72
2. Increased amount
for the current period 512519.79 283018.87 795538.66
(1) Purchase 510185.35 283018.87 793204.22
(2) Internal R&D
(3) Business
combination increase
(4) Other increase 2334.44 2334.44
3. Decreased amount
for the current period 385389.39 385389.39
(1) Disposal 385389.39 385389.39
(2) Invalid and
recognition
terminated portion
(3) Other decrease
4. Ending balance 470338494.00 409550.00 2264253.12 283018.87 473295315.99
II. Accumulated
amortization
1. Beginning balance 128418319.87 112626.36 1006341.07 129537287.30
2. Increased amount
for the current period 10096399.25 40955.04 614734.46 6581.83 10758670.58
(1) Withdrawal 10096399.25 40955.04 613500.16 6581.83 10757436.28
(2) Other Increases 1234.30 1234.30
3. Decreased amount
for the current period 385389.39 385389.39
(1) Disposal 385389.39 385389.39
(2) Invalid and
recognition
terminated portion
(3) Other decrease
173Lu Thai Textile Co. Ltd. Annual Report 2024
4. Ending balance 138514719.12 153581.40 1235686.14 6581.83 139910568.49
III. Depreciation
reserves
1. Beginning balance
2. Increased amount
for the current period
(1) Withdrawal
(2) Other Increases
3. Decreased amount
for the current period
(1) Disposal
(2) Other decrease
4. Ending balance
IV. Carrying value
1. Ending carrying
value 331823774.88 255968.60 1028566.98 276437.04 333384747.50
2. Beginning
carrying value 341920174.13 296923.64 1130781.65 343347879.42
The proportion of intangible assets formed from the internal R&D of the Company at the Period-
end to the ending balance of intangible assets was 0.00%.
(2) Impairment Test of Intangible Assets
□ Applicable□ Not applicable
18. Development Costs
Item Beginning Increase for the current Decrease for the currentbalance period period Ending balance
R&D of
products 206820921.71 206820921.71
Total 206820921.71 206820921.71
For details refer to Note VIII. Research and Development Expenditure with restricted ownership or
use right.
19. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Increase for the current Decrease for the
Name of the invested period current period
units or events generating Beginning balance Formed by Ending balance
goodwill business Disposal
combination
Xinsheng Power 20563803.29 20563803.29
Total 20563803.29 20563803.29
20. Long-term Prepaid Expense
Unit: RMB
Beginning Increased amount AmortizationItem balance of the current amount of the
Other decreased Ending balance
period current period amount
174Lu Thai Textile Co. Ltd. Annual Report 2024
Decoration fee 1694425.58 5690170.07 1825724.78 5558870.87
Technical service
charges 44220.80 35376.60 8844.20
Other prepaid
expense 77192.22 121041.91 131388.93 66845.20
Total 1815838.60 5811211.98 1992490.31 5634560.27
21. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible
temporary Deferred income Deductible temporary Deferred income
difference tax assets difference tax assets
Provision for impairment of
assets 252197942.77 41534310.54 230431449.02 36029044.63
Internal unrealized profit 105336586.06 13724860.21 107060058.13 14691107.03
Deductible losses 46878524.12 7031778.62 109351504.69 19934589.31
Payroll payable 73682968.78 11052700.68 67324258.61 10109806.74
Deferred income 145143951.32 22467375.60 151500472.11 23556894.11
Contract liability 78698329.68 19615211.56 89450421.20 22157141.99
The changes of accounts
receivable financing in fair 50005.02 7500.75 81235.81 12185.37
value
Lease liabilities 99332484.45 14899872.67 93523870.95 14028580.65
Restricted stock incentive
fees 27488845.13 4123326.77
Convertible corporate bonds 72707821.06 10906173.16 46083362.71 6912504.41
Associated enterprises 30636716.16 4595507.42 13704707.03 2055706.05
Fund losses 17968191.53 2695228.73 28541486.65 4281223.00
Total 922633520.95 148530519.94 964541672.04 157892110.06
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Depreciation of fixed
assets 606505309.17 95362712.06 632363989.77 99342402.95
Changes in fair value
of trading financial 122951766.13 18442764.92 245835380.61 36875307.09
assets
Changes in the fair
value of other non-
current financial 13517400.00 2027610.00 19467400.00 2920110.00
assets
Associated
enterprises 13000764.22 1950114.63 19521963.57 2928294.54
175Lu Thai Textile Co. Ltd. Annual Report 2024
Right-of-use assets 91572241.18 13735836.18 87417883.01 13112682.46
Total 847547480.70 131519037.79 1004606616.96 155178797.04
(3) Deferred income tax assets or liabilities had been off-set listed in net amount
Unit: RMB
Ending off-set Ending balance of Beginning off-set
Item amount of deferred deferred income tax amount of deferred
Beginning balance of
income tax assets and income tax assets and deferred income tax
liabilities assets and liabilities liabilities assets and liabilities
Deferred income tax
assets 148530519.94 157892110.06
Deferred income tax
liabilities 131519037.79 155178797.04
(4) List of unrecognised deferred income tax assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary difference 42605021.03 65448810.95
Deductible losses 315591935.20 257150469.99
Total 358196956.23 322599280.94
(5) Deductible losses of unrecognised deferred income tax assets will due in the following
years
Unit: RMB
Years Ending amount Beginning amount Note
Y2025 299.83 299.83
Y2026 71029659.21 71235558.18
Y2027 96904257.37 96904257.37
Y2028 87257787.10 89010354.61
Y2029 60399931.69
Total 315591935.20 257150469.99
22. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying value Carrying Depreciationamount reserves amount reserves Carrying value
Project
prepayment 672659.25 672659.25
Prepayment for
equipment 797518.51 797518.51 2008677.98 2008677.98
Prepayment for
land transfer 25432036.39 25432036.39
fee
Term deposits
over 1 year 525000000.00 525000000.00 150000000.00 150000000.00
Interest
receivable 18724767.80 18724767.80 3008929.60 3008929.60
176Lu Thai Textile Co. Ltd. Annual Report 2024
from term
deposits over 1
year
Total 569954322.70 569954322.70 155690266.83 155690266.83
23. Assets with Restricted Ownership or Right to Use
Unit: RMB
Period-end Period-beginning
Item Carrying Carrying Type of Status of Carrying Type of Status of
amount value restriction restriction amount Carrying value restriction restriction
Monetary
capital 4024123.14 4024123.14
Deposit
frozen
Endorsed or Endorsed or
Notes discounted discounted
receivable 34463775.21 34463775.21 but not yet 51979653.25 51979653.25 but not yetdue for due for
derecognition derecognition
Other
current 49999919.97 49999919.97 Deposit forrecognisance 137881884.82 137881884.82
Deposit for
assets recognisance
Total 84463695.18 84463695.18 193885661.21 193885661.21
24. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Borrowings secured by guarantee 91941851.96 68275604.36
Credit loan 757744972.37 512429167.91
Total 849686824.33 580704772.27
Notes of the category for short-term loans:
The short-term borrowing includes interest payable of RMB857387.01.
(2) List of the Short-term Borrowings Overdue but not Returned
There were no outstanding short-term borrowings overdue at the end of the Reporting Period.
25. Trading Financial Liabilities
Unit: RMB
Item Ending balance Beginning balance
Trading financial liabilities 15858713.22 46785831.47
Of which:
Of which: Derivative financial
liabilities 15858713.22 46785831.47
Of which:
Total 15858713.22 46785831.47
26. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
177Lu Thai Textile Co. Ltd. Annual Report 2024
Item Ending balance Beginning balance
Payment for goods 174951225.51 127198717.36
Engineering equipment 58703628.27 106150377.55
Other 38424237.73 42153820.14
Total 272079091.51 275502915.05
(2) Significant Accounts Payable Aging over One Year or Overdue
No significant accounts payable over one year old at the end of the Current Period.
27. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 441113.64 441113.64
Other payables 16996685.96 47108259.88
Total 17437799.60 47549373.52
(1) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Dividends payable to individual
shareholders 441113.64 441113.64
Total 441113.64 441113.64
Other notes including the reasons for non-payment of significant dividends payable that have not
been paid for more than one year:
Name of shareholder Amount of dividends payable Reason
Dividends payable to individual 441113.64 Cash dividend of previous year notshareholders received by individual shareholders
Total 441113.64 --
(2) Other Payables
1) Other payables listed by nature
Unit: RMB
Item Ending balance Beginning balance
Deposits and cash deposits etc. 5412393.10 5026687.70
Collecting payment on behalf of
others 2071915.32 213812.12
Restricted stock repurchase
obligations 31556265.00
Other 9512377.54 10311495.06
Total 16996685.96 47108259.88
28. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
178Lu Thai Textile Co. Ltd. Annual Report 2024
Advance from sales 200833613.26 203270689.03
Less: contract liability recorded in
other non-current liabilities -9282609.47 -15197353.14
Total 191551003.79 188073335.89
Significant contract liabilities aging over one year
Unit: RMB
Item Ending balance Unpaid/Un-carry-over reason
N/A 0.00
Total 0.00
29. Payroll Payable
(1) List of payroll payable
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
I. Short-term salary 284329504.63 1430882250.49 1414000384.86 301211370.26
II. Post-employment benefit-
defined contribution plans 15469.09 174903707.53 174903184.99 15991.63
III. Termination benefits 946980.58 946980.58
Total 284344973.72 1606732938.60 1589850550.43 301227361.89
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
1. Salary bonus allowance
subsidy 213425517.98 1275594062.23 1264196808.05 224822772.16
2. Employee welfare 211683.08 40317797.57 40529477.85 2.80
3. Social insurance 32536.50 78311592.09 78310834.25 33294.34
Of which: Medical insurance
premiums 31411.48 71013991.28 71013987.85 31414.91
Work-related injury
insurance premiums 375.01 7288448.65 7287719.58 1104.08
Maternity insurance 750.01 9152.16 9126.82 775.35
4. Housing fund 14105049.80 14105049.80
5. Labor union budget and
employee education budget 70659767.07 22553748.80 16858214.91 76355300.96
Total 284329504.63 1430882250.49 1414000384.86 301211370.26
(3) List of defined contribution plans
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
1. Basic pension
insurance 15000.32 166108702.32 166108195.60 15507.04
2. Unemployment
insurance premiums 468.77 8795005.21 8794989.39 484.59
Total 15469.09 174903707.53 174903184.99 15991.63
Other notes:
179Lu Thai Textile Co. Ltd. Annual Report 2024
The Company in line with the requirement participates in endowment insurance unemployment
insurance plans and so on. Under these plans the Company makes monthly contributions to these
plans at 16% and 0.7% of the social security contribution base respectively. No further payment
obligations will be incurred by the Company beyond the above monthly contribution fees. The
relevant expense occurred was recorded into current profits and losses or related asset costs.
30. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 13958538.83 15261850.74
Enterprise income tax 27102242.22 14347230.63
Personal income tax 1581994.81 1266426.62
Urban maintenance and construction
tax 3433797.45 2753492.14
Stamp duty 826522.82 848769.75
Real estate tax 5239688.51 5059177.21
Land use tax 2097384.98 668899.85
Educational fee 1551805.29 1253814.31
Local education surcharge 1039303.54 843626.22
Tax on natural resources 160264.60 31938.00
Environmental protection tax 270404.96 298007.08
Total 57261948.01 42633232.55
31. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Current portion of long-term
borrowings 12676401.72 88930000.00
Lease obligation matured within 1
year 15112170.03 7277192.49
Total 27788571.75 96207192.49
(1) Current portion of long-term borrowings
Item Ending balance Closing balance of last year
Credit loan 12676401.72 88930000.00
Total 12676401.72 88930000.00
32. Other current liabilities
Unit: RMB
Item Ending balance Beginning balance
Tax to be charged off 9282609.47 15197353.14
Endorsed undue bill under non-
derecognition 33546850.71 48449554.97
Total 42829460.18 63646908.11
180Lu Thai Textile Co. Ltd. Annual Report 2024
33. Long-term Borrowings
(1) Category of long-term borrowings
Unit: RMB
Item Ending balance Beginning balance
Credit loan 408920511.93 348922974.40
Less: current portion of long-term
borrowings -12676401.72 -88930000.00
Total 396244110.21 259992974.40
Notes of the category for long-term loans:
Other notes including the interest rate range:
Item Ending balance Interest rate range Closing balance of last Interest rate range(%) year (%)
Credit loan 408920511.93 2.05-2.80 348922974.40 2.60-3.50
34. Bonds Payable
(1) Bonds payable
Unit: RMB
Item Ending balance Beginning balance
Convertible corporate bonds 1509420449.46 1476572070.79
Total 1509420449.46 1476572070.79
(2) Changes of bonds payable (excluding other financial instruments divided as financial
liabilities such as preferred shares and perpetual bonds)
Unit: RMB
Issued in Amortization
Name Par value Coupon Issue Bond Beginning the
Interest of premium Repaid in the Current Default
rate date duration Issue amount balance Reporting accrued at par and Reporting shares Ending balance
Period value depreciation Period converted
or not
LuThai
Convertible
Bond 1400000000.00 2020/4/9 6 years 1400000000.00 1476572070.79 24112049.06 29738768.51 20997738.90 4700.00 1509420449.46 Not
(127016)
Total -- 1400000000.00 1476572070.79 24112049.06 29738768.51 20997738.90 4700.00 1509420449.46 --
(3) Notes to the convertible corporate bonds
According to the Approval of the Public Issue of Convertible Corporate Bonds of Lu Thai Textile
Co. Ltd. (ZH.J.X.K [2020] No. 299) of the China Securities Regulatory Commission the Company
issued 14 million convertible bonds with a face value of RMB100 each for a total issue amount of
RMB1.4 billion with a maturity of 6 years i.e. from 9 April 2020 to 8 April 2026.The coupon rates of the convertible bonds issued by the Company are 0.3% 0.6% 1% 1.5% 1.8%
and 2% in the following order from the first stage to the sixth stage with interest payable annually.The conversion period shall commence from (and include) the first trading day on 15 October 2020
six months after the date of issue and shall end on (and include) the trading day prior to the
maturity date of the convertible bonds (8 April 2026). Holders may apply for conversion during the
conversion period.The initial conversion price of convertible corporate bonds was RMB9.01 per share when it was
issued but was adjusted to RMB8.91 per share since July 9 2020 after the Company implemented
181Lu Thai Textile Co. Ltd. Annual Report 2024
the 2019 profit sharing agreement on July 8 2020. After the Company implemented the restricted
stock incentive plan in 2021 the price was adjusted to RMB8.76 per share accordingly since June 7
2021. Upon the implementation of the 2020 profit sharing agreement by the Company on June 18
2021 it was adjusted to RMB8.71 per share accordingly again since June 18 2021. Upon the
implementation of the 2021 profit sharing agreement by the Company on June 23 2022 it was
adjusted to RMB8.61 per share accordingly again since June 23 2022. The Company completed the
formalities for cancellation of the repurchased shares on 25 May 2023 and the conversion price of
the convertible bond was adjusted accordingly to RMB8.73 per share on 26 May 2023. Upon the
implementation of the 2021 Profit Distribution Plan by the Company on 16 June 2023 the
conversion price of the convertible bond was adjusted to RMB8.63 per share accordingly on 16
June 2023. The Company completed the formalities for cancellation of the repurchased shares on 1
March 2024 and the conversion price of the convertible bond was adjusted accordingly to
RMB8.87 per share on 4 March 2024. After implementing the 2023 annual profit distribution plan
on 19 June 2024 the conversion price of the convertible bonds was adjusted to RMB8.74 per share
effective from 19 June 2024. After implementing the 2024 interim profit distribution plan on 8
November 2024 the conversion price of the convertible bonds was adjusted to RMB8.64 per share
effective from 8 November 2024. After implementing the 2024 third-quarter profit distribution plan
on 19 December 2024 the conversion price of the convertible bonds was adjusted to RMB8.59 per
share effective from 19 December 2024.
35. Lease obligation
Unit: RMB
Item Ending balance Beginning balance
Lease payments 133128147.33 123608615.06
Unrecognised financing costs -26662656.50 -29751198.16
Less: Current portion of lease
liabilities -15112170.03 -7277192.49
Total 91353320.80 86580224.41
Other notes:
The amount of interest expense on lease liabilities accrued in 2024 was RMB4932489.33 which
was included in financial costs - interest expense.
36. Long-term Payroll Payable
(1) List of long-term payroll payable
Unit: RMB
Item Ending balance Beginning balance
III. Other long-term welfare 58494991.36 57276675.61
Total 58494991.36 57276675.61
37. Deferred Income
Unit: RMB
Item Beginning Increase for the Decrease for the Reason forbalance current period current period Ending balance formation
Government 151768947.92 1090000.00 7463826.81 145395121.11 Governmentgrants grants
Total 151768947.92 1090000.00 7463826.81 145395121.11 --
182Lu Thai Textile Co. Ltd. Annual Report 2024
Other notes:
38. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning New Shares converted
balance shares Bonus from capital Other Subtotal Ending balance
issued shares reserve
Total - -
shares 863607634.00 46301624.00 46301624.00 817306010.00
Other notes:
(1) In accordance with the resolution passed at the 10th meeting of the 10th Board of Directors on
19 June 2023 and the Proposal on Repurchase of the Company’s Domestically Listed Foreign
Shares (B Share) approved at the First Extraordinary General Meeting on 6 July 2023 the
Company repurchased 46176428 B-shares and completed the cancellation procedures for the
repurchased shares with Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited on 1 March 2024. This change in share capital has been audited by Zhitong Accounting
Firm (Special General Partnership) and the capital verification report ZTYZ (2024) No.
371C000075 was issued on 26 February 2024.
(2) A total of 304.00 shares of convertible bonds of the Company can be converted in the Reporting
Period.
(3) For details regarding the repurchase and cancel authorized but unlocked restricted share of the
incentive personnel not conforming to the incentive condition please refer to Note III Company
Profile.
39. Other Equity Instruments
(1) Changes of outstanding financial instruments such as preferred shares and perpetual
bonds at the period-end
Unit: RMB
Outstanding Period-beginning Increase for the Decrease for the
financial current period current period
Period-end
instruments Number Carrying Number Carrying Carrying Carryingvalue value Number value Number value
Convertible debt
to equity 71383677.78 239.67 71383438.11
Total 71383677.78 239.67 71383438.11
40. Capital Reserves
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
Capital premium
(premium on stock) 249154010.40 30049600.00 153840530.40 125363080.00
Other capital reserves 85638604.36 3722842.26 36205859.31 53155587.31
Total 334792614.76 33772442.26 190046389.71 178518667.31
Other notes including a description of the increase or decrease for the current period and the
reasons for the change:
183Lu Thai Textile Co. Ltd. Annual Report 2024
(1) According to the resolution passed at the 10th meeting of the 10th Board of Directors on 19
June 2023 and the Proposal on Repurchase of the Company’s Domestically Listed Foreign Shares
(B Share) approved at the First Extraordinary General Meeting on 6 July 2023 the Company
repurchased and cancelled 46176428 B-shares reducing the capital reserve—share premium by
RMB153572985.40.
(2) According to the resolution passed at the 18th meeting of the 10th Board of Directors on 19
January 2024 and the Proposal on Repurchase and Cancel Authorized but Unlocked Restricted
Share of the Incentive Personnel not Conforming to the Incentive Condition passed at the First
Extraordinary General Meeting on 5 February 2024 the Company repurchased and cancelled
66500.00 shares reducing the capital reserve—share premium by RMB140485.00. According to
the resolution passed at the 22nd meeting of the 10th Board of Directors on 28 May 2024 and the
Proposal on Repurchase and Cancel Authorized but Unlocked Restricted Share of the Incentive
Personnel not Conforming to the Incentive Condition passed at the Second Extraordinary General
Meeting on 14 June 2024 the company repurchased and cancelled 59000.00 shares reducing the
capital reserve—share premium by RMB127060.00.
(3) The incentive expenses for restricted stock in this period increased the capital reserve—other
capital reserve by RMB2817226.19. The portion of the restricted stock that has matured and been
unlocked was transferred from the capital reserve—other capital reserve to the capital reserve—
share premium in the amount of RMB30049600.00.
(4) The capital reserves—capital premium arising from the conversion of convertible bonds
increased by RMB2547.58 in the Reporting Period.
(5) The purchase of minority shareholder equity in this period reduced the capital reserve—other
capital reserve by RMB6156259.31.
41. Treasury stocks
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
Restricted stock 31556265.00 31556265.00
Repurchase of B-
shares 161882455.78 37866957.62 199749413.40
Total 193438720.78 37866957.62 231305678.40
Other notes including a description of the increase or decrease for the current period and the
reasons for the change:
(1) RMB31556265.00 was reduced due to the restricted stock expiration unlock and repurchase
during the Reporting Period.
(2) According to the resolution passed at the 10th meeting of the 10th Board of Directors on 19
June 2023 and the Proposal on Repurchase of the Company’s Domestically Listed Foreign Shares
(B Share) approved at the First Extraordinary General Meeting on 6 July 2023 the Company
repurchased B-shares and completed the cancellation procedures for the repurchased shares with
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited on 1 March
2024. In this period the Company repurchased 8685783.00 B-shares increasing the treasury B-
shares by RMB37866957.62 and reducing the treasury B-shares by RMB199749413.40.
42. Other comprehensive income
Unit: RMB
184Lu Thai Textile Co. Ltd. Annual Report 2024
Amount of the current period
Less: recorded Less: recorded
Amount in other in other
before comprehensive comprehensiveBeginning income in income in Less:
Attributable
to the AttributableItem balance deducting Income Ending balance
income tax prior period prior period tax Company as
minority
and transferred and transferred the parent shareholdersfor the current in profit or in retained expenseperiod after tax
after tax
loss in the earnings in the
Current Period Current Period
II. Other
comprehensive
income that
may
subsequently 131343141.63 35594497.12 4684.62 35582843.63 6968.87 166925985.26
be reclassified
to profit or
loss
Differences
arising from
translation of
foreign
currency- 131410451.64 35556383.35 35556383.35 166966834.99
denominated
financial
statements
The changes
of accounts
receivable -67310.01 38113.77 4684.62 26460.28 6968.87 -40849.73
financing in
fair value
Total of other
comprehensive 131343141.63 35594497.12 4684.62 35582843.63 6968.87 166925985.26
income
43. Special Reserve
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
Safety production
costs 4794302.65 4794302.65
Total 4794302.65 4794302.65
44. Surplus Reserves
Unit: RMB
Item Beginning balance Increase for the Decrease for thecurrent period current period Ending balance
Statutory surplus
reserves 1257319442.76 10768267.10 1268087709.86
Discretional surplus
reserves 3341572.58 3341572.58
Total 1260661015.34 10768267.10 1271429282.44
45. Retained Earnings
Unit: RMB
Item Reporting period Same period of last year
Beginning balance of retained profits
before adjustments 6762457543.07 6490910719.35
185Lu Thai Textile Co. Ltd. Annual Report 2024
Beginning balance of retained profits after
adjustments 6762457543.07 6490910719.35
Add: Net profit attributable to owners of
the Company as the parent 410321398.17 403444254.42
Less: Withdrawal of statutory surplus
reserves 10768267.10 45536678.80
Dividends of common shares payable 228845667.98 86360751.90
Ending retained profits 6933165006.16 6762457543.07
List of adjustment of beginning retained profits:
1) RMB0.00 beginning retained profits was affected by retrospective adjustment conducted
according to the Accounting Standards for 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.
46. Operating revenue and cost of sales
Unit: RMB
Amount of the current period Amount of the previous period
Item
Revenue Cost Revenue Cost
Principal business 5938910476.56 4522353436.84 5769590109.14 4436999330.60
Others 151704548.64 121225507.79 191887143.84 154389584.80
Total 6090615025.20 4643578944.63 5961477252.98 4591388915.40
Whether the lower of the net profit before and after deduction of non-recurring gains and losses
through audit is negative
□ Yes□ No
47. Taxes and surtaxes
Unit: RMB
Item Reporting period Same period of last year
Urban maintenance and construction
tax 15631280.11 16393990.50
Educational fee 6743881.62 7007721.81
Tax on natural resources 452338.60 554816.00
Real estate tax 21869937.53 21199515.92
Land use tax 9267774.49 9265984.60
Vehicle and vessel usage tax 73457.91 76087.36
Stamp duty 2752099.21 2878128.65
Local education surcharge 4495921.14 4883047.87
Environmental protection tax 1163746.03 1000678.29
186Lu Thai Textile Co. Ltd. Annual Report 2024
Total 62450436.64 63259971.00
Other notes:
Please refer to Note VI. Taxes for details of various taxes and additional standards for calculation
and payment.
48. Administrative expense
Unit: RMB
Item Amount of the current period Amount of the previous period
Salary 151357352.41 150508460.24
Warehouse funding 37943652.85 37027435.82
Depreciation charge 35024005.14 38324764.84
Office operating fee 23139520.72 22400178.37
Start-up costs 20703414.66
Restricted stock incentive fees 2817226.19 16758063.86
Amortization of intangible assets 13540031.82 14975654.46
Labor-union expenditure 12900758.43 11144934.24
Travel expenses 11242624.14 10821318.60
Security service charges 9637131.16 8977477.55
Decoration & repair expenses 5797832.50 8198163.75
Employee education budget 7570924.52 7863725.72
Energy cost 6788543.36 5724113.91
Insurance 3810379.01 3383248.24
Audit and assessment fees 3470923.10 3307933.56
Other 19286067.76 22208644.97
Total 344326973.11 382327532.79
49. Selling expense
Unit: RMB
Item Amount of the current period Amount of the previous period
Salary 64888185.22 67286568.27
Sales service expenses 23663931.01 20406411.01
Advertising expense 22152800.12 19238310.32
Depreciation charge 6730304.45 7009619.02
Expense for repairmen and loss 3787945.84 8413985.12
Business entertainment expenses 5577169.95 3958206.27
Travel expenses 7551720.70 8462597.19
Insurance 2083319.33 3063096.84
Office cost 1819802.88 1842252.81
Express fees 3194167.06 2458673.29
187Lu Thai Textile Co. Ltd. Annual Report 2024
Inspection fees 2133986.68 1826450.84
Other 7421106.11 4488643.23
Total 151004439.35 148454814.21
50. R&D expense
Unit: RMB
Item Reporting period Same period of last year
Labor cost 111941746.30 127993607.00
Material expense 63752049.15 79121927.42
Depreciation charge 17615844.34 17240537.12
Other 13511281.92 15419271.64
Total 206820921.71 239775343.18
50. Financial costs
Unit: RMB
Item Reporting period Same period of last year
Interest expense 102900852.62 99033706.35
Less: Capitalized interest -12728462.85
Interest income -60956758.61 -52183151.33
Add: Capitalized interest income 1130278.69
Exchange loss -51830925.57 -37916375.66
Less: Capitalized foreign exchange
gains or losses
Commission charge and other 6136645.25 8112849.27
Total -3750186.31 5448844.47
52. Other income
Unit: RMB
Sources Reporting period Same period of last year
Subsidies for the price of heating coal 12000000.00
Subsidies for equipment 5831228.28 5871101.54
Subsidy for environmental protection 953396.23 5283018.87
Human resources subsidy 5460951.18 4382702.42
Tax relief 17985047.46 4209600.05
R&D subsidy 460115.21 3565104.58
Special funds for the conversion of
new and old industrial kinetic energy 3500000.00
Special fund for foreign trade and
commerce and circulation 691350.26 2753789.50
Land subsidy 1354251.84 1354251.84
Financing subsidy 700000.00 952000.00
188Lu Thai Textile Co. Ltd. Annual Report 2024
Strengthen the enterprise government
subsidy 768900.00
Rebate of surcharges for withholding
taxes 394664.87 268194.00
Reward for science and technology 50000.00 150000.00
Subsidy for public rental housing 48231.48 48231.48
Reward or funding for supporting
high-quality development 200000.00 10000.00
Design reward 71000.00 10000.00
Total 34200236.81 45126894.28
53. Gain on changes in fair value
Unit: RMB
Sources Amount of the current period Amount of the previousperiod
Financial asset held for trading -121753892.40 -22511823.37
Of which: Income from changes in fair value
generated by derivative financial instruments -5766681.34 -20958877.30
Trading financial liabilities 30927118.25 -42508901.77
Total -90826774.15 -65020725.14
Other notes:
The details of the fair value changes in trading financial assets are as follows:
Item Reporting period Same period of last year
Trading equity instrument investments -
Equity investments -114115577.69 -3653802.10
Trading debt instrument investments - Debt
investments -1871633.37 2100856.03
Derivatives not designated as hedging -5766681.34 -20958877.30
Included: Forward foreign exchange contracts -20958877.30
Other -5766681.34
Total -121753892.40 -22511823.37
54. Investment income
Unit: RMB
Item Reporting period Same period of last year
Long-term equity investment income
accounted by equity method -23453208.48 -9556170.35
Investment income from holding of held-for-
trading financial asset 8650404.35 10537021.78
Investment income from disposal of trading
financial assets -35880032.08 38383757.03
Interest income from debt investments
during the holding period 4176585.64
Total -46506250.57 39364608.46
189Lu Thai Textile Co. Ltd. Annual Report 2024
Other notes:
The details of investment income obtained from the disposal of trading financial assets are as
follows:
Item Reporting period Same period of last year
Trading equity instrument investments -
Equity investments 1376121.43 21036646.84
Trading debt instrument investments - Debt
investments 136311.38 1876234.28
Derivatives not designated as hedging -37392464.89 15470875.91
Included: Forward foreign exchange
contracts -4694000.00 10981450.00
Other -32698464.89 4489425.91
Total -35880032.08 38383757.03
55. Credit impairment loss
Unit: RMB
Item Reporting period Same period of last year
Loss on uncollectible notes
receivable -20000.00
Loss on uncollectible accounts
receivable -2992091.75 -1998736.62
Loss on uncollectible other
receivables 4425.40 -1278336.84
Impairment losses on dividend
receivable 977015.71
Total -3007666.35 -2300057.75
56. Asset impairment loss
Unit: RMB
Item Reporting period Same period of last year
I. Inventory falling price loss and impairment
provision for contract performance costs -77535640.73 -88745330.21
IV. Impairment loss on fixed assets -32597860.48 -17131456.31
Total -110133501.21 -105876786.52
57. Asset disposal income
Unit: RMB
Sources Reporting period Same period of last year
Fixed asset disposal income (“-” for loss) -3139466.60 -9123336.47
58. Non-operating income
Unit: RMB
Amount recorded in the
Item Reporting period Same period of last year current non-recurring profit
or loss
Claim income 5774318.01 4451354.70 5774318.01
190Lu Thai Textile Co. Ltd. Annual Report 2024
Gains on damage and scrap
of non-current assets 1250000.00
Other 3800622.34 3646341.49 3800622.34
Total 9574940.35 9347696.19 9574940.35
59. Non-operating expense
Unit: RMB
Amount recorded in the
Item Reporting period Same period of last year current non-recurring profit
or loss
Donations 970430.10 1054579.52 970430.10
Losses from damage and
scrap of non-current assets 2342251.07 1868432.90 2342251.07
Other 5221406.37 2223669.57 5221406.37
Total 8534087.54 5146681.99 8534087.54
60. Income tax expense
(1) List of income tax expense
Unit: RMB
Item Reporting period Same period of last year
Current income tax expense 55890058.99 40870126.23
Deferred income tax expense -14340865.19 -29120.86
Total 41549193.80 40841005.37
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Reporting period
Profit before taxation 467810926.81
Current income tax expense accounted at statutory/applicable tax
rate 70171639.02
Influence of applying different tax rates by subsidiaries -9498804.49
Influence of income tax before adjustment 342447.39
Influence of non-taxable income -9073552.30
Influence of not deductible costs expenses and losses 5929668.42
Influence of utilizing deductible losses of unrecognised deferred
income tax assets from prior years -10294.95
Effect of deductible temporary differences or deductible losses on
deferred income tax assets not recognised in the period 6380013.18
Effect of changes in tax rates on the balance of deferred income
taxes at the beginning of the period 153323.78Influence of additional deduction of R&D expenses (filled in with “-”)-22769567.51
Influence of other expense deduction (filled in with “-”) -75678.75
Income tax expense 41549193.80
191Lu Thai Textile Co. Ltd. Annual Report 2024
61. Cash flow statement
(1) Cash related to operating activities
Cash generated from other operating activities
Unit: RMB
Item Reporting period Same period of last year
Government grants 8844125.34 37448096.51
Claim income 6749891.76 40162446.43
Refund of prepaid income tax 4524464.01 18522628.85
Recovery of employee borrowings
petty cash and deposit 15299763.96 11200463.32
Collection for employees 7175308.33 7302950.37
Other 1942997.19 729876.18
Total 44536550.59 115366461.66
Cash used in other operating activities
Unit: RMB
Item Reporting period Same period of last year
Business travel charges 46363110.18 43118560.30
Insurance 4816280.91 4041804.87
Audit advisory announcement fee 8021658.82 5707687.46
Decoration & repair expenses 16812233.45 4645997.08
Donation 1265841.05 1054579.52
Payment of employee borrowings
petty cash and deposit 16786177.27 10900343.11
Agency service fee 25314251.64 21262143.20
Other 32694802.04 67532357.50
Total 152074355.36 158263473.04
(2) Cash related to investing activities
Cash generated from other investing activities
Unit: RMB
Item Reporting period Same period of last year
Interest income 50343450.79 52875557.97
Income from forward foreign
exchange 920000.00 16121450.00
Time deposit maturity 666771403.91 84335748.58
Cash deposit of L/C 1614069.75
Total 719648924.45 153332756.55
Cash generated from important investing activities
Unit: RMB
192Lu Thai Textile Co. Ltd. Annual Report 2024
Item Reporting period Same period of last year
Government bond reverse repo 321061000.00 8566561000.00
Structural deposits 699200000.00 777500000.00
Wealth management products 90000000.00
Total 1020261000.00 9434061000.00
Cash used in other investing activities
Unit: RMB
Item Amount of the current period Amount of the previous period
Forward settlement exchange loss 5614000.00 5140000.00
Term deposits 1532102982.54 33470284.27
Deposit for recognisance 86463622.94
Total 1537716982.54 125073907.21
Significant cash paid related to investing activities
Unit: RMB
Item Amount of the current period Amount of the previous period
Government bond reverse repo 270102000.56 8617522000.00
Structural deposits 779200000.00 927500000.00
Wealth management products 150000000.00
Total 1199302000.56 9545022000.00
(3) Cash Related to Financing Activities
Cash Generated from Other Financing Activities
Unit: RMB
Item Amount of the current period Amount of the previous period
Other 98800.40
Total 98800.40
Cash used in other financing activities
Unit: RMB
Item Amount of the current period Amount of the previous period
Repayment of lease liabilities and
prepaid rent 20964987.89 18746507.86
Repurchase of B-shares 37825088.34 172397831.66
Total 58790076.23 191144339.52
Changes in liabilities arising from financing activities
□ Applicable □ Not applicable
Unit: RMB
193Lu Thai Textile Co. Ltd. Annual Report 2024
Increase for the current period Decrease for the current period
Item Beginning balance EndingCash Non-cash Cash Non-cash balance
fluctuations fluctuations fluctuations fluctuations
Short- 580704772.27 1386326578. 30558250.99 1147902776.9 849686824.3term loan 03 6 3
Long-
term
borrowin 348922974.40 760660043.27 18266322.04 718928827.78
408920511.9
gs
Bonds
Payable 1476572070.79 53850817.57 20997738.90 -4700.00
1509420449.
46
Lease
liabilities 93857416.90 33573061.82 20964987.89
106465490.8
3
Total 2500057234.36 2146986621. 136248452.4 1908794331.530 2 3 -4700.00
2874493276.
55
62. Supplemental information for cash flow statement
(1) Supplemental information for cash flow statement
Unit: RMB
Supplemental information Amount during thecurrent period Previous period
1. Reconciliation of net profit to net cash flows generated
from operating activities
Net profit 426261733.01 396352437.62
Add: Provision for impairment of assets 113141167.56 108176844.27
Depreciation of fixed assets oil-gas assets and productive
biological assets 478703217.22 464547764.15
Depreciation of right-of-use assets 26592180.81 27017455.52
Amortization of intangible assets 10757436.27 10577354.94
Amortization of long-term prepaid expenses 1992490.31 3990981.43
Losses from disposal of fixed assets intangible assets and
other long-lived assets (gains: negative) 3139466.60 9123336.47
Losses from scrap of fixed assets (gains: negative) 2342251.07 618432.90
Losses from changes in fair value (gains represented by “-”) 90826774.15 65020725.14
Finance costs (gains: negative) -11085007.09 -3920412.41
Investment loss (gains represented by “-”) 46506250.57 -39364608.46
Decrease in deferred income tax assets (gains: negative) 9318894.06 -3964485.10
Increase in deferred income tax liabilities (“-” means
decrease) -23659759.25 3935364.24
Decrease in inventory (gains: negative) 74756772.23 -15594018.10
Decrease in accounts receivable generated from operating
activities (gains represented by “-”) -25459430.42 -38266103.45
Increase in accounts payable used in operating activities
(decrease represented by “-”) 20077714.84 -133386531.74
Other
Net cash flow from operating activities 1244212151.94 854864537.42
2. Significant investing and financing activities without
involvement of cash receipts and payments
Conversion of debt to capital
194Lu Thai Textile Co. Ltd. Annual Report 2024
Convertible corporate bonds matured within one year
Fixed asset under finance lease
3. Net increase/decrease of cash and cash equivalent:
Closing balance of cash 1371412259.52 1353615305.93
Less: Opening balance of cash 1353615305.93 1822897270.16
Plus: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 17796953.59 -469281964.23
(2) Cash and cash equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 1371412259.52 1353615305.93
Including: Cash on hand 4283695.11 2633018.72
Bank deposits on demand 1367128564.41 1079820776.67
Other monetary assets on demand 271161510.54
III. Ending balance of cash and cash
equivalents 1371412259.52 1353615305.93
(3) Monetary assets not classified as cash and cash equivalents
Unit: RMB
Item Amount during Previous period Reason for not classifying the item as cashthe current period and cash equivalents
The Company will hold time deposits to
Bank deposits -- time deposits of 673484482.54 184470284.27 maturity not for the purpose of meetingless than one year short-term cash needs for external
payments.Other monetary funds – deposits
etc. 4024123.14 Restriction on use
Bank deposits -- interest
receivable 10960046.31 16142334.69 Interests receivable
Total 684444528.85 204636742.10
63. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Item Closing foreign currencybalance Exchange rate
Ending balance converted
to RMB
Monetary capital
Of which: USD 163798470.65 7.1884 1177448926.42
EUR 335882.35 7.5257 2527749.80
HKD 1089000.19 0.9260 1008414.18
JPY 1609074.00 0.0462 74339.22
GBP 27.18 9.0765 246.70
Dong 227162816717.20 0.0003 64125443.48
195Lu Thai Textile Co. Ltd. Annual Report 2024
MMK 1171741241.41 0.0034 4010926.28
Riel 541762914.00 0.0018 967554.91
Accounts receivable
Of which: USD 83689016.91 7.1884 601590129.18
EUR 197065.19 7.5257 1483053.50
HKD
Dong 18024192860.00 0.0003 5088021.73
MMK 791263194.00 0.0034 2708531.61
Other receivables:
Of which: USD 158445.20 7.1884 1138967.47
EUR 15500.00 7.5257 116648.35
JPY 1515285.11 0.0462 70006.17
Dong 1516160812.38 0.0003 427994.75
MMK 111900600.00 0.0034 383041.08
Accounts payable:
Of which: USD 10790467.56 7.1884 77566197.01
JPY 3227926.90 0.0462 149130.22
EUR 24965.93 7.5257 187886.10
Dong 85132203299.20 0.0003 24031980.13
MMK 653931430.40 0.0034 2238439.30
Other payables:
Of which: USD 3836.59 7.1884 27578.94
Dong 303000000.00 0.0003 85533.40
MMK 1000000.00 0.0034 3423.05
Short-term borrowings:
Of which: USD 91600761.92 7.1884 658462916.96
Dong 178211257547.00 0.0003 50306982.54
Long-term borrowings
Of which: USD
EUR
HKD
(2) Notes to overseas entities including: for significant oversea entities main operating place
recording currency and selection basis shall be disclosed; if there are changes in recording
currency relevant reasons shall be disclosed.□ Applicable □ Not applicable
The operating places of the Company’s subsidiaries were Hong Kong Burma America Vietnam
Singapore and Cambodia and the recording currency was HKD for Hong Kong and USD for other
overseas companies.
64. Leases
(1) The Company Was Lessee:
□ Applicable □ Not applicable
Variable lease payments that are not covered in the measurement of the lease liabilities
196Lu Thai Textile Co. Ltd. Annual Report 2024
□ Applicable□ Not applicable
Simplified short-term lease or lease expense for low-value assets
□ Applicable □ Not applicable
Item Amount of the current period
Expense relating to short-term leases 487369.18
Low-value lease expenses
Variable lease payments that are not covered in the measurement of
the lease liabilities
Total 487369.18
Circumstances involving sale and leaseback transactions
(2) The Company Was Lessor:
Operating leases with the Company as lessor
□ Applicable □ Not applicable
Unit: RMB
Of which: Income related to variable
Item Rental income lease payments not included in lease
receipts
Rental income 3421414.69
Total 3421414.69
Finance leases with the Company as lessor
□ Applicable□ Not applicable
Undiscounted lease receipts for each of the next five years
□ Applicable □ Not applicable
Unit: RMB
Undiscounted lease receipts per year
Item Investments at the end of the period Investments at the beginning of theperiod
The first year 1240588.20 1215336.80
The second year 426120.60 310390.00
The third year 20160.00
Total undiscounted lease receipts
after five years - - 1686868.80 1525726.80
(3) Recognition of Gain or Loss on Sales under Finance Leases with the Company as a
Manufacturer or Distributor
□ Applicable□ Not applicable
VIII. Research and Development Expenditure
Unit: RMB
Item Amount of the current period Amount of the previous period
197Lu Thai Textile Co. Ltd. Annual Report 2024
Labor cost 111941746.30 127993607.00
Material expense 63752049.15 79121927.42
Depreciation charge 17615844.34 17240537.12
Other 13511281.92 15419271.64
Total 206820921.71 239775343.18
Of which: Expensed research and
development expenditure 206820921.71 239775343.18
1. Development costs
Increase for the current period Decrease for the current period
Item Beginning Internalbalance development Other Recognized as
Included in the Ending
current period balance
Expense increase Intangibleassets Profit and loss
R&D of
products 206820921.71 206820921.71
Total 206820921.71 206820921.71
IX. Change of Consolidation Scope
1. Disposal of subsidiaries
Whether there were any transactions or events during the Reporting Period in which control of
subsidiaries was lost
□ Yes□ No
Whether there was a step-by-step disposal of investments in subsidiaries through multiple
transactions and loss of control during the Reporting Period
□ Yes□ No
2. Other reasons for changes of consolidation scope
Notes of other changes in the combination scope (e.g. new subsidiaries liquidation of subsidiaries
etc.) and relevant situations:
In this year the subsidiary Shanghai Zhinuo Textile New Materials Co. Ltd. was deregistered and
a new subsidiary Tianyi Apparel Co. Ltd. was established.X. Equity in Other Entities
1. Equity in Subsidiary
(1) Compositions of the Group
Unit: RMB
Name Registered
Main
operating Registration Nature of
Holding percentage
(%) Way ofcapital place place business Directly Indirectly gaining
Lu Thai (Hong
Kong) Textile 128771800.00 Hong Hong Kong Wholesale andCo. Ltd. Kong retail industry 100.00% Set-up
(hereinafter
198Lu Thai Textile Co. Ltd. Annual Report 2024
referred to as
“Lu Thai (HK)”)
Shanghai Lu
Thai Textile
Garment Co.Ltd. (hereinafter 20000000.00 Shanghai Shanghai Wholesale andretail industry 100.00% Set-upreferred to as“Shanghai LuThai”)
LuFeng
Company
Limited
(hereinafter 706160000.00 Zibo Zibo Manufacturingindustry 75.00% Set-upreferred to as“LuFengCompany”)
Zibo Luqun
Textile Co. Ltd.(hereinafter Manufacturing
referred to as 168220000.00 Zibo Zibo industry 100.00% Set-up“LuqunTextile”)
Zibo Xinsheng
Thermal Power
Co. Ltd. Business
(hereinafter Manufacturing combination
referred to as 162435600.00 Zibo Zibo industry 100.00% not under the“Xinsheng same controlThermalPower”)
Shandong
Lulian New
Materials Co.Ltd. (hereinafter 900000000.00 Zibo Zibo Manufacturingindustry 75.00% 25.00% Set-upreferred to as“Lulian NewMaterials”)
Shandong Lujia
IMP. & EXP.Co. Ltd.(hereinafter 10000000.00 Zibo Zibo Import and 100.00% Set-up
referred to as export trade“Lujia IMP. &EXP.”)
Beijing Zhishu
Management
Consulting Co.Ltd. (hereinafter 2000000.00 Beijing Beijing Management
referred to as consulting
100.00% Set-up“ZhishuConsulting”)
Lu Thai
Occupational 100000.00 Zibo Zibo Skill training 100.00% Set-up
Training School
Zibo Banyang
Villa Hotel Co.Ltd. (hereinafter
referred to as 5000000.00 Zibo Zibo
Catering
services 100.00% Set-up“BanyangVilla”)
199Lu Thai Textile Co. Ltd. Annual Report 2024
Hainan Huilin
InternationalHoldings Co. 880000000.00 Wenchang Wenchang Modern serviceindustry 100.00% Set-upLtd. (“HuilinInternational”)
Wholesale
TP Company 398203876.00 Singapore Singapore textiles andleather holding 100.00% Set-up
company
Vanguard
Apparel Co.Ltd. (hereinafter 62337887.93 Burma Burma Manufacturingreferred to as industry 100.00% Set-up“VanguardApparel”)
Lu Thai (USA)
Textile Co. Ltd.(hereinafter
referred to as 6139710.00 America America
Wholesale and
retail industry 100.00% Set-up“Lu Thai(USA)”)
Tianyi Apparel
Co. Ltd.(hereinafter Manufacturing
referred to as 10719000.00 Burma Burma industry 100.00% Set-up“TianyiApparel”)
Yuanhui
Dividend No. 2
Private
Securities 100.00% Subscribe
Investment Fund(“YuanhuiFund”)
Basis of controlling significant structural entities incorporated in the scope of combination:
The structural entity incorporated in the scope of consolidation of the Group is Yuanhui Dividend
No. 2 Private Securities Investment Fund. The Group assesses its share of investment holdings the
power it enjoys and variable returns comprehensively and includes the structural entity that the
Company has control power into the consolidation scope.
(2) Significant non-wholly-owned subsidiary
Unit: RMB
Shareholding The profit or loss Declaring Balance of non-
Name proportion of non- attributable to the non- dividends
controlling interests controlling interests distributed to non-
controlling interests at
controlling interests the period-end
Lufeng
Company 25.00% 21928134.59 382839454.92
Limited
(3) The main financial information of significant not wholly-owned subsidiary
Unit: RMB
Ending balance Beginning balance
Name Current Non-
assets current Total assets
Current Non- Total Current Non-
liabilities current liabilities assets current Total assets
Current Non- Total
liabilities current liabilities
200Lu Thai Textile Co. Ltd. Annual Report 2024
assets liability assets liability
Lufeng
Company 10969386 6482351 17451737 1562242 503932 2066174 9251700 6663513 15915213 8964427 532727 1429170
Limited 32.35 24.19 56.54 47.67 32.00 79.67 25.16 50.97 76.13 4.83 78.47 53.30
Unit: RMB
Amount of the current period Amount of the previous period
Cash flows
Name Operating Total Cash flows Total
Revenue Net profit comprehensive from operating
Operating
Revenue Net profit comprehensive
from
income activities income operatingactivities
Lufeng
Company 1335514726.95 89930961.56 89951954.04 401125951.79 1375045198.83 57390726.91 57411695.78 -
Limited 79614020.15
2. Equity in joint ventures or associated enterprises
(1) Significant joint ventures or associated enterprises
Holding percentage (%) Accounting
treatment of
Main the investment
Name operating Registration Nature of
place place business Directly Indirectly
to joint
venture or
associated
enterprise
I. Joint
ventures
II. Associated
enterprises
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 oflast year
Haohong Haoying Haohong Haoying
Investment Investment Investment Investment
Current assets 97221745.84 193217687.26 148022853.32 210335493.18
Non-current assets
Total assets 97221745.84 193217687.26 148022853.32 210335493.18
Current liabilities 3253866.05 3253866.05
Non-current liability
Total liabilities 3253866.05 3253866.05
Net assets 93967879.79 193217687.26 144768987.27 210335493.18
Equity of non-controlling interests
Equity attributable to shareholders
of the Company as the parent 93967879.79 193217687.26 144768987.27 210335493.18
Net assets shares calculated at the
shareholding proportion 31325690.58 92010262.67 48257699.71 100161761.85
Adjusted items
- Goodwill
- Unrealized profit of internal
transactions
- Others -3251681.96 -4881981.79
Carrying value of investment to
associated enterprises 31325690.58 88758580.71 48257699.71 95279780.06
201Lu Thai Textile Co. Ltd. Annual Report 2024
Fair value of equity investments in
associated enterprises with
publicly quoted prices
Operating Revenue
Net profit -50801107.48 -17117805.92 23601152.08 -45732975.48
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income -50801107.48 -17117805.92 23601152.08 -45732975.48
Dividends received from the
associates in the current period
XI. Government Grants
1. Government Grants Included in Deferred Income
Item Beginning balance Increase for the Decrease for the Reason forcurrent period current period Ending balance formation
Government
grants 151768947.92 1090000.00 7463826.81 145395121.11
Government
grants
Total 151768947.92 1090000.00 7463826.81 145395121.11
(1) Government grants included in deferred income and subsequently measured using the gross
method
Listed
Amounts items
Amount of carried carried
newly forward to forward
Item Category Beginning Other to Related tobalance subsidy for profit or lossthe current for the changes
Ending balance profit assets/income
period current or loss
period for thecurrent
period
Land Financial Other Related to
subsidy appropriation 49350582.41 1354251.84 47996330.57 gains assets
Subsidies
for Financial Other Related to
equipment appropriation
93120347.28 5831228.28 86789119.00 gains assets
R&D Financial
subsidies appropriation 8301233.50 1090000.00 230115.21 9661118.29
Other Related to
gains income
Subsidy
for public Financial
rental appropriation 996784.73 48231.48 948553.25
Other Related to
gains assets
housing
Total 151768947.92 1090000.00 7463826.81 145395121.11
2. Government Grants Included in Current Profit or Loss Using the Gross Method
Amounts
included in Amounts Listed items
Item_110723 Category profit or loss included in included in Related to
for the current profit or loss in profit or assets/income
period the prior period loss
Subsidy for environmental Financial
protection appropriation 953396.23 5283018.87 Other gains
Related to
income
202Lu Thai Textile Co. Ltd. Annual Report 2024
Human resources subsidy Financialappropriation 5460951.18 4382702.42 Other gains
Related to
income
Special funds for the
conversion of new and old Financial 3500000.00 Other gains Related to
industrial kinetic energy appropriation income
Financing subsidy Financial Related toappropriation 700000.00 952000.00 Other gains income
Special fund for foreign
trade and commerce and Financialappropriation 691350.26 826389.50 Other gains
Related to
circulation income
Strengthen the enterprise Financial
government subsidy appropriation 768900.00 Other gains
Related to
income
R&D subsidy Financialappropriation 230000.00 210000.00 Other gains
Related to
income
Reward for science and Financial
technology appropriation 50000.00 150000.00 Other gains
Related to
income
Reward for supporting Financial
high-quality development appropriation 200000.00 10000.00 Other gains
Related to
income
Design reward Financial Related toappropriation 71000.00 10000.00 Other gains income
Total 8356697.67 16093010.79
3. Government Grants Using the Net Method to Reduce Related Costs
Amounts of
offsetting Amounts of Listed items of
Item Category related costs in offsetting related Related to
the current costs in the
offsetting related
costs assets/income
period previous period
Financial discount Financial
funds for loans discount 126041.67 167291.67
Financial Related to
expenses income
Total 126041.67 167291.67
XII. Risks Associated with Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The Company’s major financial instruments include monetary capital notes receivable accounts
receivable accounts receivable financing other receivables trading financial assets other non-
current financial assets other non-current assets - time deposits over one year accounts payable
other payables short-term borrowings current portion of non-current liabilities other current
liabilities - endorsed outstanding notes long-term borrowings bonds payable lease liabilities and
other equity instruments. Details of various financial instruments are disclosed in relevant Notes.Risks related to these financial instruments and risk management policies the Company has
adopted to reduce these risks are described as follows. The Company management manages and
monitors the risk exposure to ensure the above risks are controlled in a limited scope.
1. Risk management objectives and policies
The Company has conducted the risk management to achieve an appropriate balance between the
risk and the income and to minimize the adverse influence of financial risks on the Company’s
financial performance. According to such risk management objective the Company has formulated
corresponding risk management policy to recognise and analyse possible risks encountered by the
Company set the appropriate acceptable risk level and designed corresponding internal control
procedures to monitor the Company’s risk level. Meanwhile the Company will regularly review
these risk management policies and relevant internal control system so as to cater for the market or
respond to any change in the Company’s business operations. Accordingly the Company’s internal
203Lu Thai Textile Co. Ltd. Annual Report 2024
audit department will also regularly or randomly check whether the internal control system is
implemented in conformity with relevant risk management policies.The major risks caused by financial instruments of the Company are credit risk liquidity risk and
market risk (including foreign exchange risk interest rate risk and commodity price risk).The Board of Directors shall be responsible for planning and establishing the risk management
framework for the Company determining the Company’s risk management policies and relevant
guidelines and monitoring the implementation of various risk management measures. However the
Company has established corresponding risk management policies to recognise and analyse
possible risks encountered by the Company. Besides various risks are specified in these risk
management policies including the credit risk the liquidity risk and the market risk management
etc. On a regular basis the Company will evaluate the specific marketing environment and various
changes in the Company’s business operations so as to determine whether any risk management
policy and system need be updated.
(1) Credit risk
Credit Risk means that the Company will suffer any financial losses due to the counter party’s
failure in fulfilling the contract obligations.The Company 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 investment in debt obligations etc.The Group’s bank deposits are mainly saved in state-owned banks and other large and medium-
sized banks. The Group’s bank deposits are expected not to suffer any major credit risks.For notes receivable accounts receivable and other accounts receivable the Company has
established relevant 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 Company will
evaluate the client’s credit qualification and set corresponding credit period. The Company
regularly monitors the credit records of customers. For customers with bad credit records the
Company adopted corresponding methods such as written pressing for payment shortening credit
period and cancelling credit period so as to ensure the Company’s overall credit risk is controllable.The hugest credit risk exposure borne by the Company is the book value of each financial asset
reflected in the balance sheet.In terms of accounts receivable the top 5 customers in accounts receivable were accounted for
22.16% of the total amount of accounts receivable of the Company (24.80% in 2023). As for other
receivables the top 5 of the ending balance according to the arrears party was accounted for 69.61%
of the total amount of other receivables of the Company (69.38% in 2023).Investment in debt obligations
The Company generally limits its exposure to credit risk by investing only in securities for which
there is an active market (other than long-term strategic investments) and for which the counterpart
has a high credit rating.The Group supervised the changes of credit risk through tracking the published external credit
ratings. In order to make sure whether the credit rating was the latest and whether the credit risk
has increased obviously of evaluation report date but not been reflected in the published external
ratings the Company has supplemented through examining the changes of bond yield and the
available news and supervision information.
204Lu Thai Textile Co. Ltd. Annual Report 2024
On the balance sheet date the carrying value of investment in debt obligations of the Company are
listed as follows according to report items.Ending balance Closing balance of last year
Financial asset held for trading 230874092.14 203706725.51
Debt investment due within one year 154176585.64
Total 385050677.78 203706725.51
(2) Liquidity risk
Liquidity Risk refers to the risk of capital shortage encountered by the Company during the cash
payment or the settlement of other financial assets.During the management of liquidity risk the Company shall reserve and monitor corresponding
cash and cash equivalent deemed sufficient by the management so as to meet the Company’s
operational requirements and mitigate the impact caused by the cash flow fluctuation. The Group’s
management will monitor the use of bank loans and guarantee the fulfilment of loan agreement.Meanwhile major financial institutions shall promise to provide the Group with sufficient reserve
funds in order to satisfy the short-term and long-term fund demand. The Group shall raise its
working capital based on the capital generated from business operations and bank loans.At the end of the period the analysis of financial liabilities and off-balance sheet guarantee items
held by the Company based on the maturity period of the undiscounted remaining contractual cash
flows is as follows:
Ending balance
Item
Within one year Within one to five years Over 5 years Total
Financial
liabilities:
Short-term loan 855549333.86 855549333.86
Accounts
payable 272079091.51 272079091.51
Other payables 17437799.60 17437799.60
Long-term
borrowings 21948346.33 405344416.41 427292762.74
Bonds Payable 1399844700.00 1399844700.00
Lease liabilities 20183287.07 58411429.64 54533430.61 133128147.33
Total 1187197858.37 1863600546.05 54533430.61 3105331835.04
At the end of the previous year the analysis of financial liabilities and off-balance sheet guarantee
items held by the Company based on the maturity period of the undiscounted remaining contractual
cash flows is as follows:
Closing balance of last year
Item
Within one year Within one to fiveyears Over 5 years Total
Financial
liabilities:
Short-term loan 586472143.14 586472143.14
205Lu Thai Textile Co. Ltd. Annual Report 2024
Accounts
payable 275502915.05 275502915.05
Other payables 47549373.52 47549373.52
Long-term
borrowings 96845778.69 269810195.43 366655974.12
Bonds Payable 1399849400.00 1399849400.00
Lease liabilities 11411875.72 56966108.73 55230630.61 123608615.06
Total 1017782086.12 1726625704.16 55230630.61 2799638420.89
The amounts of financial liabilities disclosed in the table above represent undiscounted contractual
cash flows and may differ from the carrying amounts in the balance sheet.
(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 by the changes of market price including the interest rate risk
the exchange rate risk and other price risk.Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows of financial
instruments arising from changes in market interest rates. The interest rate can derive from the
recognised interest-bearing financial instruments and unrecognised financial instruments (including
certain loan commitment).The Group’s interest rate risk mainly arises from the long-term interest-bearing debt such as the
bank loan. Financial liabilities based on the floating interest rate will cause the cash flow interest
rate risk to the Company and financial liabilities based on the fixed interest rate the fair value
interest rate risk.However the Company has paid close attention the impact of interest rate fluctuations on the
Company’s interest rate risk. At present the Company has not taken any interest rate hedging
measures. The rise of interest rate will increase the cost of newly-added interest-bearing debts and
the interest cost of the Company’s unsettled interest-bearing debts based on the floating interest rate
and cause major adverse influence on the Company’s financial performance. The management will
timely make corresponding adjustment according to the latest market situation and corresponding
interest rate swap will be arranged to reduce the interest rate risk.The interest-bearing financial instruments held by the Company are as follows (Unit: RMB’0000):
Item Amount of Current Period Amount of the PreviousPeriod
Fixed-interest financial instruments
Including: short-term borrowings 70968.68 46535.28
Current portion of long-term borrowings 425 230
Long-term borrowings 6174.19
Bonds Payable 150942.04 147657.21
Total 222335.73 200596.68
Floating-interest financial instruments
Financial assets 38505.07 20370.67
Including: trading financial assets 23087.41 20370.67
206Lu Thai Textile Co. Ltd. Annual Report 2024
Debt investment due within one year 15417.66
Financial liabilities 40467.05 40023.31
Including: short-term borrowings 11535.20
Current portion of long-term borrowings 842.64 8663.00
Long-term borrowings 39624.41 19825.11
Total 78972.12 60393.98
On 31 December 2024 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 RMB3439700 (compared to RMB3479700 as of the end of last year).For financial instruments held at the balance sheet date that expose the Company to fair value
interest rate risk the impact on net income and shareholders’ equity in the sensitivity analysis above
is the impact of re-measuring the above financial instruments at the new interest rate assuming that
there is a change in interest rates at the balance sheet date. For floating rate non-derivative
instruments held at the balance sheet date that expose the Company to cash flow interest rate risk
the impact on net income and shareholders’ equity in the above sensitivity analysis is the impact of
changes in the above interest rates on interest expense or income estimated on an annualized basis.The previous year’s analysis was based on the same assumptions and methodology.Foreign exchange risk
Foreign exchange risk is referred to the fluctuation risk of fair value of financial instruments or
future cash flows resulted from the change of foreign exchange rate. The foreign exchange rate was
originated from the financial instruments denominated in foreign currencies other than the recording
currency.The Company’s recognised foreign currency assets and liabilities as well as future foreign currency
transactions (the denomination currencies of foreign currency assets and liabilities and foreign
currency transactions are mainly USD Dong EUR and HKD) are exposed to foreign exchange risk.On 31 December 2024 the amount of foreign currency financial assets and foreign currency
financial liabilities converted to renminbi is as follows (Unit: RMB’0000):
Foreign currency liabilities Foreign currency assets
Item
Ending balance Closing balance of Ending balance Closing balance oflast year last year
USD 73605.67 61952.45 178017.80 121933.38
EUR 18.79 154.36 412.75 386.82
JPY 14.91 248.23 14.43 123.83
HKD 100.84 2124.70
GBP 0.02 0.05
CHF 0.01
Dong 7442.45 5439.51 6964.15 6351.53
MMK 224.19 22.97 710.25 292.27
Riel 96.76 13.27
Total 81306.01 67817.51 186317.00 131225.87
The Group has paid close attention the impact of exchange rate fluctuations on the Group’s
exchange rate risk. The Company has signed contracts of futures exchange for the purpose of the
aversion of foreign exchange risk. As at the end of each reporting period for the Group’s monetary
207Lu Thai Textile Co. Ltd. Annual Report 2024
capital bills receivable accounts receivable accounts payable short-term borrowings and other
payables denominated in foreign currencies assuming a 10% appreciation or depreciation of RMB
against foreign currencies while other factors remain unchanged the impact of possible reasonable
changes in the Company’s foreign currency exchange rate against RMB on the Company’s profit
and loss for the current period is as follows (Unit: RMB’0000):
Exchange rate This year Last year
fluctuations Impact on after-tax Impact on Impact on after-tax Impact on
profit shareholders’ equity profit shareholders’ equity
10% appreciation
against RMB -8567.83 -8567.83 -5101.33 -5101.33
10% depreciation
against RMB 8567.83 8567.83 5101.33 5101.33
Other price risks
Other price risks are the risks of fluctuations due to changes in market prices other than exchange
rate risk and interest rate risk whether these changes result from factors relating to a single
financial instrument or its issuer or from those relating to all similar financial instruments traded
within the market. Other price risks can arise from changes in commodity prices stock market
index equity instrument prices and other risk variables.Investments in listed equity instruments held by the Company which are classified as transactional
financial assets are measured at fair value at the balance sheet date. As a consequence the Company
is undertaking the risk of changes in equity markets.The Company closely monitors the impact of price changes on the price risk of the Company’s
investments in equity and securities. The Company does not currently take any steps for other price
risk aversion. Nevertheless the management is liable for supervisory control on other price risks
and shall consider reducing the price risk of investments in equity and securities by holding a
diversified portfolio investment in equity and securities when required.With all other variables being constant the pre-tax impact on the Company’s profit or loss for the
current period and other comprehensive income of a 10% change in the price of investments in
equity and securities for the year is as follows (Unit: RMB’0000):
After-tax profits up (down) Other comprehensive income up(down)
Item Amount of Amount of the Amount of Amount of the
Current Period Previous Period Current Period Previous Period
Due to increase in the price of
investments in equity securities 3932.29 4333.58
Due to a decline in the price of
investments in equity securities -3932.29 -4333.58
2. Capital management
The objectives of capital management policies of the Company are to ensure the continuous
operation of the Company so as to provide return to 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 Company might adjust financing method and the
dividends paid to shareholders return capital to shareholders issue new shares and other equity
instrument or sell assets to reduce debts.
208Lu Thai Textile Co. Ltd. Annual Report 2024
The Group supervised the capital structure based on the asset-liability ratio (namely total liabilities
divide total assets). On 31 December 2024 the asset-liability ratio was 29.49% of the Company
(28.39% on 31 December 2023).
3. Financial asset transfer
(1) Classification of transfer methods
Transfer Nature of financial Amount of financial Derecognition Basis for determiningmethods assets transferred assets transferred derecognition
Bills Almost all risks and
endorsement Receivables financing 125400149.23 Derecognition remuneration have beentransferred.Bills Almost all risks and
discounting Receivables financing 29567761.61 Derecognition remuneration have beentransferred.Bills
endorsement Notes receivable 33546850.71
Not
derecognised
Bills
discounting Notes receivable 916924.50
Not
derecognised
Total 189431686.05
(2) Financial assets derecognised due to transfer
Item Transfermethods Derecognised amount Gains or losses related to derecognition
Receivables Bills
financing endorsement 125400149.23
Receivables Bills
financing discounting 29567761.61 -102815.32
Total 154967910.84 -102815.32
The total carrying value of the bank acceptance bills endorsed by the Company to the supplier but
not due and bank acceptance bills discounted to the bank but not due amounted to
RMB189431686.05 of which the Company believed that the notes receivable with a carrying
value of RMB154967910.84 (31 December 2023: RMB151938439.51) had transferred almost all
risks and rewards at the time of discounting meeting the conditions for derecognition of financial
assets. Therefore the related notes receivable were derecognised. The maximum exposure to risk
that continues to be associated with these derecognised notes receivable is equal to the
undiscounted cash flows from the repurchase of the notes which is equal to the carrying value of
the notes receivable. The Company does not consider the continued involvement in the fair value of
the derecognised notes receivable to be material.
(3) Amount of assets and liabilities formed due to transfer of financial assets and continuous
involvement
Item Asset transfer Amount of assets formed due to Amount of liabilities formed due tomethods continuous involvement continuous involvement
Notes
receivable Bills endorsement 33546850.71 33546850.71
Notes
receivable Bills discounting 916924.50 916924.50
Total 34463775.21 34463775.21
209Lu Thai Textile Co. Ltd. Annual Report 2024
XIII. Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Closing fair value
Item Fair value Fair value Fair value
measurement items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair value
measurement -- -- -- --
(I) Trading financial assets 117978959.15 575993713.49 693972672.64
1. Financial assets at fair
value through profit or loss 117978959.15 575993713.49 693972672.64
(1) Investment in debt
instruments 230874092.14 230874092.14
(2) Equity investments 117978959.15 344643171.16 462622130.31
(3) Derivative financial assets 476450.19 476450.19
(II) Accounts receivable
financing 10184900.59 10184900.59
(III) Other non-current
financial assets 82800000.00 82800000.00
(VI) Trading financial
liabilities 15858713.22 15858713.22
Of which: Derivative
financial liabilities 15858713.22 15858713.22
II. Inconsistent Fair Value
Measurement -- -- -- --
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement
Items at Level 1
Quoted prices in active markets for identical assets or liabilities (unadjusted).
3. Valuation technique adopted and nature and amount determination of important
parameters for consistent and inconsistent fair value measurement items at level 2
The Company determines the fair value of structured deposits and wealth management products
based on the prospective earning rate as agreed in the contract.The Company determines the fair value of fund products based on the changes in net value
published by the private equity funds.The Company determines the fair value of option-based products based on bank forward foreign
exchange quotations at the end of the period.
4. Valuation technique adopted and nature and amount determination of important
parameters for consistent and inconsistent fair value measurement items at level 3
For the unlisted equity investment the Company adopts the comparable listed company comparison
method 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 to be held in the long run for obtaining the discount on power
purchase. As no revenue distribution right is vested in the investment the invested unit’s operating
210Lu Thai Textile Co. Ltd. Annual Report 2024
profit and loss are not shared or borne and the equity transfer is not proposed the Company regards
it as the 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 be determined by the discount cash flow method.
5. Reconciliation of Fair Value Measurements Classified in Level 3 of the Fair Value
Hierarchy
For assets
Total gains or losses for the
current period Purchase issuance sale and settlement
held at the
end of the
reporting
Item period the
(amount for Beginning Transferred Transferred Ending change in
the current balance to Level 3 out of Level 3 Recognised in balance unrealisedRecognised
period) other Issuance gains or lossesas profit or comprehensive Purchase of Sale Settlement recognised inloss income profit or loss
for the
current
period
Financial
asset held for
trading:
Investment
in debt
instruments
Equity
instrument
investment
Other non-
current
financial 88750000.00 -5950000.00 82800000.00 -5950000.00
assets
Total 88750000.00 -5950000.00 82800000.00 -5950000.00
The following is the information on gains and losses related to financial and non-financial assets
included in the gains and losses recognised in profit or loss for the current period:
Item (amount for the current period) Gains and losses related to Gains and losses related to non-financial assets financial assets
Total gains or losses for the current period
recognised in profit or loss -5950000.00
For assets held at the end of the reporting period
the change in unrealised gains or losses -5950000.00
recognised in profit or loss for the current period
Total gains or losses for Purchase issuance sale and For assets
the current period settlement held at the
end of the
reporting
Item period the
(Amount change in
for the Beginning Transferred
Transferred
balance to Level 3 out of Level
Recognised in Ending unrealisedRecognised
Previous 3 other Issuance balance gains oras profit or
Period) comprehensive
Purchase of Sale Settlement lossesloss income recognised
in profit or
loss for the
current
period
211Lu Thai Textile Co. Ltd. Annual Report 2024
Financial
asset held
for trading:
Investment
in debt
instruments
Equity
instrument
investment
Other non-
current
financial 89080000.00 -330000.00 88750000.00 -330000.00
assets
Total 89080000.00 -330000.00 88750000.00 -330000.00
The following is the information on gains and losses related to financial and non-financial assets
included in the gains and losses recognised in profit or loss for the previous period:
Item (Amount for the Previous Period) Gains and losses related Gains and losses relatedto financial assets to non-financial assets
Total gains or losses for the current period recognised in
profit or loss -330000.00
For assets held at the end of the reporting period the
change in unrealised gains or losses recognised in profit or -330000.00
loss for the current period
6. 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 other non-current assets - time deposits notes receivable accounts receivable other
receivables short-term borrowings notes payable accounts payables other payables current
portion of long-term borrowings long-term borrowings and bonds payable.XIV. Related Party and Related-party Transactions
1. Information related to the company as the parent of the Company
Proportion of Proportion of
share held by the voting rights
Name Registrationplace Nature of business Registered capital company as the
owned by the
parent against the company as the
company (%) parent against thecompany (%)
Lucheng Textile Zibo Textile chemistry andinvestment RMB63260000 17.17% 17.17%
Notes: information on the Company as the parent
The final controllers of the Company are Mr. Liu Zibin and Mr. Liu Deming.
2. Subsidiaries of the Company
Refer to Note X-1.
3. Information on the joint ventures and associated enterprises of the Company
Refer to Note X-2.
4. Information on other related parties
Name Relationship with the company
212Lu Thai Textile Co. Ltd. Annual Report 2024Zibo Limin Purified Water Co. Ltd. (hereinafter referred to as “Limin PurifiedWater”) Same parent
Zibo Luqun Land Co. Ltd (hereinafter referred to as “Luqun Land”) Same parent
Zibo Lurui Fine Chemical Co. Ltd. (hereinafter referred to as “Lurui Chemical”) Same parentZibo Lujia Property Management Co. Ltd. (hereinafter referred to as “LujiaProperty”) Same parent
Hong Kong Tung Hoi International Company Limited (hereinafter referred to as
“Tung Hoi International”) Same parentZibo Chengshun Hosiery Co. Ltd. (hereinafter referred to as “ChengshunHosiery”) Same parent
Zibo Chengshun Economic and Trade Co. Ltd. (hereinafter referred to as
“Chengshun Economic and Trade”) Same parent
Chengshun Petrochemical (Zhejiang Zhoushan) Co. Ltd. (hereinafter referred to
as “Chengshun Petrochemical”) Same parentZibo Lucheng Petrochemical Sales Co. Ltd. (hereinafter referred to as “LuchengPetrochemical”) Same parent
Shanghai Hengjiu Textile New Materials Co. Ltd. (hereinafter referred to as
“Hengjiu Textile”) Same parentShandong Xirui New Material Co. Ltd. (hereinafter referred to as “Xirui New Subsidiary of the parentMaterial”) company’s subsidiaryZibo Lumei Economic and Trade Co. Ltd. (hereinafter referred to as “LumeiEconomic and Trade”) Same parentZibo Hesheng Chemical Trading Co. Ltd. (hereinafter referred to as “Hesheng Subsidiary of the parentChemical Trading”) company’s subsidiary
ZhiFeng (Vietnam) International Trading Co. Ltd. (hereinafter referred to as Subsidiary of the parent
“ZhiFeng International”) company’s subsidiary
Liu Zibin Xu Zhinan Xu Jianlyu Zheng Huisheng Liu Deming Zhang Zhanqi
Zhang Keming Du Lixin Zhou Zhiji Qu Dongmei Peng Yanli Quan Yuhua
Shang Chenggang Liu Zilong Dong Shibing Yu Shouzheng Guo Heng Lyu Key management personnel
Wenquan Xu Feng Zheng Weiyin
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labour service
Information on acquisition of goods and reception of labour service
Unit: RMB
Whether
Related party Content Amount of the The approval
exceed Amount of the
current period trade credit tradecredit or previous period
not
Chengshun Hosiery Paper core hosieryaccessories etc. 7391882.48 11266666.67 Not 7193988.38
Limin Purified Water Recycled water sewagetreatment etc. 25480134.69 37920000.00 Not 28246470.62
Lurui Fine Chemical
and Tung Hoi Auxiliaries 113904742.76 130300000.00 Not 101314234.28
International
Chengshun Economic Supermarket retail
and Trade service expenses 1641835.36 3760000.00 Not 2468796.20
Lucheng
Petrochemical and Oil products urea
Chengshun natural gas 52370735.70 77077333.33 Not 55480873.42
Petrochemical
Luqun Property electrical 147619.12 150295.22
213Lu Thai Textile Co. Ltd. Annual Report 2024
Information of sales of goods and provision of labour service
Unit: RMB
Related party Content Amount of the current Amount of the previousperiod period
Chengshun Hosiery Materials power energyetc. 265162.23 255336.33
Chengshun Hosiery Yarn garments fabrics 390647.37 552386.10
Chengshun Economic and Materials power energy
Trade etc. 443521.90 200452.64
Lucheng Petrochemical Materials electricitygarments fabrics 14652.32 14104.15
Limin Purified Water Materials electricitygarments fabrics etc. 6947311.98 5611202.34
Limin Purified Water Sludge treatment 943396.23 283018.87
Lurui Fine Chemical Materials yarns garmentsfabrics etc. 1584349.53 295841.93
Lujia Property Materials power energyetc. 40571.28 28133.85
Xirui New Materials Clothing 550.44
Xirui New Materials Catering services etc. 50541.98 114555.82
Lumei Economic and Trade Garments fabricscomputer supplies 63.72
Luqun Property Garments fabrics cateringservices 365076.11
Luqun Property Heating unit accountopening 3292155.06
(2) Information on related-party lease
The Company was lessor:
Unit: RMB
The lease income The lease income
Name of lessee Category of leased assets confirmed in the current confirmed in the same
period period of last year
Chengshun Economic and Rent of houses and
Trade buildings 55478.67 36108.00
Chengshun Hosiery Rent of houses andbuildings 16800.00 16800.00
The Company was lessee:
Unit: RMB
Variable lease
Rental expense payments that
of simplified are not covered
short-term leases in the Rent payable Interest expense on lease Added right-of-
Categor and low-value measurement of liabilities borne use assetsName y of asset leases (if the leaseof leased applicable) liabilities (iflessor assets applicable)Amou Amoun Amou Amoun Amou Amoun
nt of t of the nt of t of the Amount of Amount of Amount of Amount of nt of t of the
the previo the previo the current the previous the current the the previo
current us current us period period period previous current us
period period period period period period period
214Lu Thai Textile Co. Ltd. Annual Report 2024
Luchen
g Rent of 3614857.2 3614857.2land 0 0 974130.19
1093886.
Textile 24
Luchen Rent of
g gas 233142.84 233142.84 99697.35 105749.06
Textile station
Luchen Rent of
g buildin 11022228. 11022228. 2122455. 1831460.Textile gs 60 60 64 66
Rent of
Luqun land
Propert and 1971428.5 1971428.5 1087948. 1128013.y buildin 2 2 39 88
gs
(3) Information on remuneration for key management personnel
Unit: RMB
Item Amount of the current period Amount of the previous period
Remuneration for key management
personnel 14913891.17 12214104.92
6. Accounts receivable and payable of related party
(1) Accounts payable
Unit: RMB
Item Related party Ending balance Beginning carrying amount
Accounts payable Lurui Fine Chemical 230514.74 398433.04
Accounts payable Tung Hoi International 3445679.03 5597739.70
XV. Stock Payment
1. The overall situation of share-based payments
□ Applicable □ Not applicable
Unit: RMB
Category of grant Awarded in the Option exercise in Unlocked in the current Lapsed in the current
recipients current period the current period period periodNumber Amount Number Amount Number Amount Number Amount
Management core
technical and 9803000 9803000.00 125500 125500.00
business backbone
Total 9803000 9803000.00 125500 125500.00
Stock options or other equity instruments outstanding at the end of the period
□ Applicable□ Not applicable
2. Equity-settled share-based payments
□ Applicable □ Not applicable
Unit: RMB
Methods for determining the fair value of equity Difference between the market price of the stock and the
instruments on the grant date grant price on the grant date
Basis for determining the number of feasible right equity Optimal estimation of expected feasible right in the future
215Lu Thai Textile Co. Ltd. Annual Report 2024
instruments
Reasons for the significant discrepancy between the
current period estimates and the previous estimates N/A
Accumulated amount of equity-settled share-based
payment included in capital reserves 87876756.71
The total amount of the expense recognised for the
current period paid on equity-settled shares 2817226.19
3. Cash-settled share-based payments
□ Applicable□ Not applicable
4. Share-Based Payment Expenses for the Period
□ Applicable □ Not applicable
Unit: RMB
Category of grant recipients Equity-settled share-based payments Cash-settled share-based payments
Management core technical and
business backbone 2817226.19
Total 2817226.19
XVI. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
(1) Capital commitments
Commitments signed but hasn’t been recognised in financial
statements Ending balance
Closing balance of last
year
Commitment on constructing and purchasing long-lived assets
(RMB’0000) 3244.50 5147.75
2. Contingency
(1) Explanation shall be given even if there is no significant contingency for the Company to
disclose
There was no significant contingency in the Company to disclose.XVII. Events after Balance Sheet Date
1. Distribution of Profit
Amount to be distributed for every ten shares
(RMB) 1.00
Dividend shares to be distributed for every ten
shares (share) 0
Number of shares to be converted into share
capital for every ten shares (share) 0
Amount to be distributed for every ten shares
after consideration and approval (RMB) 1.00
Dividend shares to be distributed for every ten
shares after consideration and approval (share) 0
Number of shares to be converted into share
capital for every ten shares after consideration 0
and approval (share)
Profit distribution plan On 8 April 2025 the 30th meeting of the 10th Board of Directors ofthe Company approved the profit distribution plan for 2024 as
216Lu Thai Textile Co. Ltd. Annual Report 2024
follows: Based on the share capital of 817306010 shares it was
proposed that cash dividends in the amount of RMB81730601.00
would be distributed at the rate of RMB1.00per ten shares (inclusive
of tax). The above distribution plan will be implemented after it is
submitted to the 2024 Annual General Meeting of Shareholders for
consideration and approval.
2. Notes to other events after balance sheet date
As at 8 April 2025 the Company has no other events after balance sheet date that should be
disclosed.XVIII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure by aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 405094184.12 380684242.95
One to two years 1507926.77 2423615.15
Two to three years 550870.00 13571.80
More than three years 367200.00 3026023.60
Three to four years 200763.00 20913.49
Four to five years 166437.00 3005110.11
Total 407520180.89 386147453.50
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra Carrying Withdra Carrying
Amount Proporti Amount wal value Amount Proportion proportio on Amount
wal value
proportio
n n
Accounts
receivabl
e
withdraw
al of Bad
debt 1380525.86 0.34%
1380525.8
6100.00%5481360.701.42%
5481360.7
0100.00%
provision
separatel
y
accrued
Of
which:
Accounts
receivabl
e
withdraw
al of bad 406139655. 99.66% 24795853. 6.11% 381343801. 380666092. 98.58% 24182667. 6.35% 356483425.debt 03 37 66 80 21 59
provision
of by
group
Of
which:
Group 1:
Undue 53016898.7 13.01% 53016898.7 35791868.5accounts 5 5 4 9.27%
35791868.5
(L/C)
Undue 11429561.6 2.80% 120010.40 1.05% 11309551.2 23003716.8 5.96% 241539.03 1.05% 22762177.8
217Lu Thai Textile Co. Ltd. Annual Report 2024
accounts 2 2 7 4
(credit
insuranc
e
insured)
Undue
accounts
(no 298370197. 14918509. 283451687. 275912255.credit 72 73.22% 88 5.00% 84 37 71.45%
13795612.5.00%262116642.7760
insuranc
e)
Overdue
accounts
(credit 14193001.9 3.48% 2228301.3 15.70% 11964700.6 15309159.8insuranc 9 1 8 3 3.96%
2403538.0
915.70%
12905621.7
4
e
insured)
Overdue
accounts
(no 29129994.9 7.15% 7529031.7 25.85% 21600963.1 30649092.1 7.94% 7741977.3 25.26% 22907114.8credit 5 8 7 9 2 7
insuranc
e)
Total 407520180. 100.00% 26176379. 6.42% 381343801. 386147453.89 23 66 50 100.00%
29664027.356483425.
917.68%59
Bad debt provision separately accrued: 2024
Unit: RMB
Beginning balance Ending balance
Name Carrying Bad debt Carrying Bad debt Withdrawal Reason for
amount provision amount provision proportion withdraw
Customer in
Customer 1 2751489.34 2751489.34 1380525.86 1380525.86 100.00% financial
difficulty
Customer 2 2729871.36 2729871.36
Total 5481360.70 5481360.70 1380525.86 1380525.86
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts
receivable.□ Applicable□ Not applicable
(3) Bad Debt Provision Withdrawal Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Category Beginning balance
Withdrawal Reversed or
Ending balance
recovered Verification Other
Bad debt
provision 29664027.91 325158.70 3162489.98 26176379.23
Total 29664027.91 325158.70 3162489.98 26176379.23
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 3162489.98
218Lu Thai Textile Co. Ltd. Annual Report 2024
Notes to verification of accounts receivable:
There were no write-offs of significant accounts receivable.
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected
according to Arrears Party
Unit: RMB
Ending Ending balance Proportion to total Ending balance of bad
Name of Ending balance of balanceaccounts of of accounts ending balance of
debt provision of
entity receivable contract receivable and accounts receivable
accounts receivable and
assets contract assets and contract assets
impairment provision for
contract assets
Customer 1 32703382.90 32703382.90 8.02% 1635169.15
Customer 2 23654705.71 23654705.71 5.80% 1182735.29
Customer 3 22365718.66 22365718.66 5.49% 1118285.93
Customer 4 20055191.67 20055191.67 4.92% 1002759.58
Customer 5 16398877.01 16398877.01 4.02% 249713.49
Total 115177875.95 115177875.95 28.25% 5188663.44
2. Notes Receivable
Ending balance Closing balance of last year
Category Carrying Bad debt
amount provision Carrying value
Carrying Bad debt
amount provision Carrying value
Bank
acceptance 34575445.32 34575445.32 54622178.42 54622178.42
bills
Commercial
acceptance 400000.00 20000.00 380000.00
bills
Total 34975445.32 20000.00 34955445.32 54622178.42 54622178.42
(1) The Company had no pledged notes receivable at the end of the period.
(2) Notes receivable endorsed by the Company or discounted and not due on the balance sheet date
at the period-end
Category Amount of recognition termination at the Amount of not terminatedperiod-end recognition at the period-end
Bank acceptance bills 26302178.06
Trade acceptance notes
Total 26302178.06
(3) Disclosure by withdrawal methods for bad debts
Ending balance Closing balance of last year
Carrying amount Bad debt provision Carrying amount Bad debt
Category_3108 provision
13 Expecte Carrying Expecte Carrying
Percenta d credit valueAmount Amount loss Amount Percenta Amou
d credit value
ge (%) rate ge (%) nt
loss
rate
(%)(%)
219Lu Thai Textile Co. Ltd. Annual Report 2024
Bad debt
provision
separately
accrued
Withdrawal of
bad debt 34975445. 100 20000.0 0.06 34955445. 54622178. 100 54622178.4provision by 32 0 32 42 2
group
Of which: -
Commercial 20000.0
acceptance bills 400000.00 1.14 0 5 380000.00
Bank
acceptance bills 34575445.with low credit 32 98.86
34575445.54622178.
3242100
54622178.4
2
ratings
Total 34975445. 100 20000.0 34955445. 54622178. 100 54622178.432 0 32 42 2
Notes receivable of bad debt provision withdrawn by groups
Grouping-based provision item: Bank acceptance bills with low credit ratings
Ending balance
Name_210024
Notes receivable Bad debt provision Expected credit lossrate (%)
Bank acceptance bills with
low credit ratings 34575445.32
Total 34575445.32
Note: Based on the fact that the likelihood of loss on the notes receivable is minimal and the
amount of expected credit losses on the notes receivable is not material the Company has not
provided for bad debts on the notes receivable.Grouping-based provision item: Commercial acceptance bills ratings
Ending balance Closing balance of last year
Name
Notes receivable Bad debt
Expected Expected
provision credit loss
Notes Bad debt
rate (%) receivable provision
credit loss
rate (%)
Commercial
acceptance bills 400000.00 20000.00 5
Total 400000.00 20000.00 5
(4) Bad Debt Provision Withdrawal Reversed or Recovered in the Reporting Period
Amount of Bad Debt Provision
Beginning balance
Withdrawal of the Current Period 20000.00
Reversed or Recovered in the Reporting Period
Write-off in the Reporting Period
Ending balance 20000.00
3. Other Receivables
Unit: RMB
220Lu Thai Textile Co. Ltd. Annual Report 2024
Item Ending balance Beginning balance
Other receivables 1444344599.59 2064459414.54
Total 1444344599.59 2064459414.54
(1) Other Accounts Receivable
1) Other receivables classified by category
Unit: RMB
Nature Ending balance Beginning carrying amount
Intercourse funds 1438423895.04 2060091836.09
Payment on behalf 6572485.56 6736525.76
Guarantee deposit and cash deposit 2109217.68 1549661.78
Borrowings and petty cash 949740.81 1533557.54
Other 2656594.02 2720459.54
Total 1450711933.11 2072632040.71
2) Disclosure by aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 1371173184.48 1629128024.64
One to two years 27700512.72 184755200.00
Two to three years 13105000.00 79555623.95
More than three years 38733235.91 179193192.12
Three to four years 36109026.05 176599422.10
Four to five years 78000.00
Over 5 years 2624209.86 2515770.02
Total 1450711933.11 2072632040.71
(3) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Category Carrying amount Bad debt provision Carrying amount Bad debt provision
Carrying value Carrying value
Amount Proportion Amount Withdrawalproportion Amount Proportion Amount
Withdrawal
proportion
Of which:
Withdrawal
of bad debt
provision 1450711933.11 100.00% 6367333.52 0.44% 1444344599.59 2072632040.71 100.00% 8172626.17 0.39% 2064459414.54
by group
Of which:
Bad debt
provision
in the first 1447622162.05 99.79% 4775185.04 0.33% 1442846977.01 2069707269.65 99.86% 6661047.19 0.32% 2063046222.46
stage
Bad debt
provision
in the 2926759.01 0.20% 1429136.43 48.83% 1497622.58 2761759.01 0.13% 1348566.93 48.83% 1413192.08
second
221Lu Thai Textile Co. Ltd. Annual Report 2024
stage
Bad debt
provision
in the third 163012.05 0.01% 163012.05 100.00% 163012.05 0.01% 163012.05 100.00%
stage
Total 1450711933.11 100.00% 6367333.52 0.44% 1444344599.59 2072632040.71 100.00% 8172626.17 0.39% 2064459414.54
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
First stage Second stage Third stage
Bad debt provision Expected credit
Expected loss in the
loss of the next duration (credit
Expected loss in the
impairment not duration (credit
Total
12 months occurred) impairment occurred)
Balance of 1 January 2024 6661047.19 1348566.93 163012.05 8172626.17
Balance of 1 January 2024
in the Current Period
Withdrawal of the Current
Period 80569.50 80569.50
Reclassification in the
Reporting Period 1885862.15 1885862.15
Balance of 31 December
20244775185.041429136.43163012.056367333.52
The basis for the division of each stage and the withdrawal proportion of bad debt provision
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable□ Not applicable
4) Bad Debt Provision Withdrawn Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Beginning Changes in the current periodCategory Endingbalance Withdrawal Reversed or Charged- balancerecovered off/Written-off Other
Bad debt
provision 8172626.17 80569.50 1885862.15 6367333.52
Total 8172626.17 80569.50 1885862.15 6367333.52
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears
Party
Unit: RMB
Proportion to
Name of Nature Ending balance Aging ending balance of
Ending balance of
entity total other bad debt
receivables provision
Unit 1 Intercourse 971464156.38 Within one year; one to twofunds years; two to three years 66.96% 2914392.47
Unit 2 Intercoursefunds 259505275.71 Within 1 year 17.89% 778515.83
Unit 3 Intercoursefunds 133735396.68 Within 1 year 9.22% 401206.19
Unit 4 Intercourse 40922421.76 One to two years; Over 2.82% 122767.27
222Lu Thai Textile Co. Ltd. Annual Report 2024
funds three years
Unit 5 Intercoursefunds 12000000.00 Within 1 year 0.83% 36000.00
Total 1417627250.53 97.72% 4252881.76
4. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item
Carrying amount Depreciation Carrying value Carrying amount Depreciationreserves reserves Carrying value
Investment
to 3776326276.50 10209050.00 3766117226.50 3446169376.50 10209050.00 3435960326.50
subsidiaries
Investment
to joint
ventures and 120084271.29 120084271.29 143537479.77 143537479.77
associated
enterprises
Total 3896410547.79 10209050.00 3886201497.79 3589706856.27 10209050.00 3579497806.27
(1) Investment to subsidiaries
Unit: RMB
Beginning Beginning
Increase/decrease Ending
Withdrawal
Investee balance (carrying balance of Ending balance balance ofdepreciation Additional Reduced ofvalue) Other (carrying value) depreciationreserve investment investment impairment reserve
provision
Xinsheng
Power 176340737.93 176340737.93
Lufeng
Company 529620000.00 529620000.00
Limited
Luqun
Textile 171784550.00 171784550.00
Luthai
(Hong 128771800.00 128771800.00
Kong)
Shanghai
Luthai 20000000.00 20000000.00
Lu Thai
(America) 0.00 10209050.00 10209050.00
VACL 62337238.57 62337238.57
Lulian New
Materials 300000000.00 525925200.00 206481300.00 619443900.00
Lujia Import
& Export 10000000.00 10000000.00
Lu Thai
Occupational
Training 100000.00 100000.00
School
Shanghai
Zhinuo 6000.00 6000.00
Zhishu
Consulting 2000000.00 2000000.00
Huilin
International 1630000000.00 1630000000.00
Banyang
Mountain 5000000.00 5000000.00
Villa
Tianyi 10719000.00 10719000.00
223Lu Thai Textile Co. Ltd. Annual Report 2024
Apparel
Yuanhui
Fund 400000000.00 400000000.00
Total 3435960326.50 10209050.00 536644200.00 206487300.00 3766117226.50 10209050.00
(2) Investment to joint ventures and associated enterprises
Unit: RMB
Increase/decrease
Beginning Beginning Gains and Adjustment of Cash
Ending
Investee balance balance of
Ending balance
losses Changes bonus or Withdrawal (carrying balance of(carrying depreciation Additional Reduced recognised other of depreciation
value) reserve investment investment under the comprehensive
of other profits Other value)
income equity announced
impairment reserve
equity method to issue provision
I. Joint ventures
II. Associated enterprises
Haohong -
Investment 48257699.71 16932009.13 31325690.58
Haoying
Investment 95279780.06 -6521199.35 88758580.71
Subtotal 143537479.77 -23453208.48 120084271.29
Total 143537479.77 -23453208.48 120084271.29
The recoverable amount is determined based on the net amount of the fair value minus disposal
costs
□ Applicable□ Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.□ Applicable□ Not applicable
5. Operating Revenue and Cost of Sales
Unit: RMB
Item Amount of the current period Amount of the previous periodRevenue Cost Revenue Cost
Principal business 2943776911.86 2279103044.60 3147505850.27 2471357276.44
Others 254515151.74 167085585.40 280155779.48 186079061.04
Total 3198292063.60 2446188630.00 3427661629.75 2657436337.48
6. Investment Income
Unit: RMB
Item Amount of the current period Amount of the previous period
Long-term equity investment income
accounted by cost method 14383890.10 170639188.72
Long-term equity investment income
accounted by equity method -23453208.48 -9556170.35
Investment income from disposal of long-
term equity investment -55556100.00 22374515.10
Investment income from holding of held-
for-trading financial asset 4301934.88 3837780.60
Investment income from disposal of
trading financial assets -148399.11 30146964.78
Interest income from debt investments
during the holding period 4176585.64
Total -56295296.97 217442278.85
224Lu Thai Textile Co. Ltd. Annual Report 2024
XIX. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
□ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains and losses on disposal of non-current assets -5481717.67
Government grants recognised in profit or loss for the current period (except for
government grants closely related to the Company’s normal operating business in
compliance with national policies and in accordance with defined criteria and having a 34326278.48
continuous impact on the Company’s profit or loss)
Gains and losses arising from changes in fair value of financial assets and financial
liabilities held by non-financial enterprises and gains and losses arising from the
disposal of financial assets and financial liabilities other than effective hedging business -116104499.14
related to the Company’s normal operating business
Reversal of provision for impairment of receivables separately tested for impairment 1349345.50
Other non-operating income and expense other than the above 3383103.88
Less: Income tax effects -11186738.74
Non-controlling interests effects (after tax) 676593.25
Total -72017343.46 --
Details of other profit and loss items in line with the definition of non-recurring gains and losses:
□ Applicable□ Not applicable
There are no other profit and loss items in line with the definition of non-recurring gains and losses
in the Company.Note to define the non-recurring profit and loss items listed in the Explanatory Announcement No.
1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring
Gains and Losses as recurring profit and loss items.□ Applicable□ Not applicable
2. Return on Equity and Earnings Per Share
EPS
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary
shareholders of the Company 4.39% 0.50 0.47
Net profit attributable to ordinary
shareholders of the Company after 5.16% 0.59 0.54
deduction of non-recurring profit or loss
Chairman of the Board: Liu Zibin
Lu Thai Textile Co. Ltd.
10 April 2025
225
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