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