Guangdong Rieys Group Company Ltd
The Third Quarterly Report 2010
§1. Important Notice
1.1 The Board of Directors, the Supervisory Committee as well as directors, supervisors and senior
management of Guangdong Rieys Group Company Ltd (hereinafter referred to as “the Company”)
warrant that this report does not contain any false or misleading statements or omit any material
facts and shoulder individual and joint responsibility for the factuality, accuracy and completeness
of the contents of this report.
1.2 No objection has been raised against this report.
1.3 The Financial Report of the Third Quarterly Report has not been audited by a CPA firm.
1.4 Chen Hongcheng, Person in charge of the Company, and Chen Peixia, Chief Financial Officer
as well as person in charge of accounting organ, hereby declare that they would guarantee the
authenticity and completeness of the Financial Report in this Quarterly Report.
§2 Company Profile
2.1 Main accounting data and financial indices
Unit: RMB Yuan
30 Sep. 2010 31 Dec. 2009 Increase/decrease (%)
Total assets (Yuan) 607,119,067.68 640,024,704.10 -5.14%
Owner’s equity attributable to
shareholders of listed company (Yuan) 334,741,558.55 349,348,058.06 -4.18%
Share capital (Share) 318,600,000.00 318,600,000.00 0.00%
Net assets per share attributable to
shareholders of listed company
(Yuan/share)
1.05 1.10 -4.55%
Jul.-Sep. 2010 Increase/decrease
year-on-year (%) Jan.-Sep. 2010 Increase/decrease
year-on-year (%)
Operating revenue (Yuan) 36,779,725.03 17.84% 116,408,282.07 10.72%
Net profit attributable to shareholders of
listed company (Yuan) -3,266,996.73 -59.15% -14,606,499.51 -48.68%
Net cash flow arising from operating
activities (Yuan) - - 42,529,009.34 8,551.97%
Net cash flow per share arising from
operating activities (Yuan/share) - - 0.13 8,551.97%
Basic earnings per share (Yuan/share) -0.01 -66.67% -0.05 -44.44%
Diluted earnings per share (Yuan/share) -0.01 -66.67% -0.05 -44.44%
Weighted average ROE (%) -0.96% 1.56% -4.27% 4.70%
Weighted average ROE after deducting
non-recurring gains and losses (%) -0.73% 1.79% -4.01% 5.32%
Items of non-recurring gains and losses Amount from the year-begin to
the end of report period Note
Gains and losses from disposal of non-current assets 2,600.00
Other non-operating income and expense except the aforesaid items -944,631.46
Impact on income tax 15,310.88
Impact on minority interest 23,049.08
Total -903,671.50 -2
2.2 Total number of shareholders at the end of the report period and statement on shares held by the
top ten shareholders with shares not subject to trading moratorium
Unit: Share
Total number of shareholders 15,798
The top ten shareholders holding shares not subject to trading moratorium
Full name of shareholders Tradable shares held at period-end Type of share
SU YOU HE 6,001,167 Domestically listed foreign share
XU XIN FENG 1,773,970 Domestically listed foreign share
LUO DONG HUI 1,400,000 Domestically listed foreign share
XU HAI 1,378,700 Domestically listed foreign share
Taifook Securities Company Limited-Account
Client 1,197,459 Domestically listed foreign share
NGAI KWOK PAN 1,145,816 Domestically listed foreign share
WANG YAN FENG 701,867 Domestically listed foreign share
CHEN ZHEN QI 701,800 Domestically listed foreign share
ZHOU XIAO QUN 635,800 Domestically listed foreign share
LIU QING NAN 538,581 Domestically listed foreign share
§3. Significant events
3.1 Particular about large-margin change in main item of accounting statement and financial index
and reason for change
√Applicable □Inapplicable
Statement of items that with a gains and loses changing ratio over 30%.
Balance sheet Balance at
period-end
Balance at
year-begin
Increase/decr
ease (%) Explanation
Monetary funds 8,116,086 2,168,571 274.26 Goods payments and some incomings were
received.
Other accounts receivable 75,630,917 121,470,760 -37.74 Incomings from Rieys Paper, etc. were
received.
Construction in progress 4,858,812 1,040,572 366.94 The new construction project of the
Company’s fences
Accounts payable 6,768,448 4,521,833 49.68 Increase of purchases on tally
Paid to and for employees 1,132,058 2,666,808 -57.55
The main course of the Company was under
conversion and the managerial effectiveness
was improved.
Liabilities in advance 4,919,585 Limited interest relief was approved by
Construction Bank
Income statement
Amount in
current
period
Amount in
the last
period
Increase/decrea
se proportion
(%)
Explanation
Asset impairment
loss 10,093,152 2,878,04 -450.69 The quality of assets is improved.
3.2 The progress of significant events and its influence, as well as the analysis and explanation on
solutions
3.2.1 Non-standard audit opinion
√Applicable □Inapplicable
ASIA (Group) Accounting Firm, the audit agency engaged by the Company for the 2009 annual3
audit, issued an unqualified audit report with highlighted events for the Company’s annual report of
2009.
The highlighted events were as follows, “For Y2009, the net profit attributable to shareholders of
parent company stood at RMB 3,726,700, and at -48,631,600 after deducting non-occurring gains
and losses, which shows a successive loss of main business for the third year. In 2010, the main
business scope of the Company was transformed from garments to both garments and real estate
development. However, there still existed uncertainty to whether the real estate business would
generate a profit or not. Rieys Group Company Ltd has disclosed the intended solutions to adapt,
but the ability of consistent business operation is still uncertain. This paragraph has no impact on
the audited opinions that has bee revealed.”
The board of directors believed that the replacement of assets at the end of 2009 has cleaned the
obstacles that hinder the development of the Company fundamentally. In that case, the Company
made an evident improvement on the quality of the assets. Though the Company showed a loss on
the third quarterly report, the loss volume is decreasing sharply. At the same time, the sales of the
Company’s garments business jump year-on-year. The process of the property item on Puning is
going well. But the development of property item is periodic that profit is not able to show in a
short term. To sum up, the business of the Company is turning in a positive direction and the
going-concern ability is fully guaranteed.
3.2.2 Whether the Company provided funds to the controlling shareholder or its related parties or
provided guarantees to external parties in violation of the prescribed procedure
□Applicable √Inapplicable
3.2.3 Signing and execution of significant contracts concerning routine operations
□Applicable √Inapplicable
3.2.4 Others
□Applicable √Inapplicable
3.3 Fulfillment of commitments made by the Company, shareholders and the actual controller
□Applicable √Inapplicable
3.4 Warnings of possible loss or great change of the accumulated net profit made during the period
from the beginning of the year to the end of the next report period compared with the same period
of the last year according to prediction, as well as explanations on the reasons
√Applicable □Inapplicable
Performance forecast Deficit
From year-begin to the end of
the next report period Same period of last year Increase/decrease（%）
Estimated accumulative net
profit (RMB’0000) -2,500.00 372.67 Decrease -800.00%
Basic earnings per share
(Yuan/share) -0.08 0.01 Decrease -800.00%
Notes to performance forecast
During the report period, the Company smoothed the way for the progress of real estate projects as
well as made a big improvement on the quality of assets. But the period of the property projects is long
that it is impossible for it to be accomplished this year. Though the expenses of the Company
decreased compared year-on-year, but the base is huge that 2010 is expected to loss.4
3.5 Other significant events that need to be explained
3.5.1 Securities investment
□Applicable √Inapplicable
3.5.2 Interviews, communications and visits in the reporting period
Time Location Means Investor Topics discussed and information
provided
26 Aug. 2010 Office of the Board Communication by
telephone Shareholder Basic information of the Company
3.6 Investment in derivative products
□Applicable √Inapplicable
3.6.1 Derivative products held at the end of report period
□Applicable √Inapplicable
§4 Appendix
4.1 Balance sheet
Prepared by Guangdong Rieys Group Company Ltd 30 Sep. 2010 Unit: RMB (Yuan)
Items
Balance at the period-end Balance at the year-begin
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary funds 8,116,085.93 2,576,931.29 2,168,571.06 647,412.49
Settlement fund reserve
Dismantle funds
Transaction financial assets
Notes receivable
Account receivable 59,023,742.12 832,452.93 56,358,542.78 11,421,549.96
Account paid in advance 66,625,947.80 63,583,703.28 4,039,432.45
Premium receivable
Reinsurance premium
Receivable reinsurance contract
reserve
Profit receivable
Dividends receivable
Other receivables 75,630,916.88 119,364,960.33 121,470,760.04 149,219,951.35
Financial assets under
agreement to resell
Inventories 203,088,502.00 195,246,476.67 3,884,313.41
Non-current assets due within 1
year 5,000,000.00 5,000,000.00 5,000,000.00 5,000,000.00
Other non-current assets 9,853.19 53,335.50
Total current assets 417,495,047.92 127,774,344.55 443,881,389.33 174,212,659.66
Non-current assets:
Loans and advances5
Tradable financial assets
Held-to-maturity investment
Long-term receivable
Long-term equity investment 250,832,508.68 250,832,508.68
Investing property
Fixed assets 106,191,286.98 99,155,172.11 113,529,392.33 105,415,799.26
Construction in progress 4,858,812.22 4,858,812.22 1,040,571.59 1,040,571.59
Engineering materials 1,530,000.00 1,530,000.00 1,530,000.00 1,530,000.00
Disposal of fixed assets
Production biological assets
Oil-air assets
Intangible assets 66,817,055.31 66,817,055.31 67,944,705.09 67,944,705.09
Development expenses
Goodwill
Long-term amortization
expenses
Deferred income tax 10,226,865.25 2,366,374.16 12,098,645.76 2,513,148.55
Other non-current assets
Total non-current assets 189,624,019.76 425,559,922.48 196,143,314.77 429,276,733.17
Total assets 607,119,067.68 553,334,267.03 640,024,704.10 603,489,392.83
Current liabilities:
Short-term borrowings 180,300,055.36 165,300,055.36 213,583,282.66 192,765,650.75
Loans from central bank
Deposits and sue to banks and
other financial institutions
Call loan received
Transaction financial liabilities
Notes payable
Account payable 6,768,448.44 19,940.47 4,521,832.85 102,434.92
Account pay in advance 897,850.76 570,447.24
Financial assets sold for
repurchase
Handling charges and
commissions
Employee’s compensation
payable 1,132,058.36 160,808.99 2,666,808.00 428,362.11
Tax payable 8,299,201.95 536,457.55 8,406,437.19 2,235,632.14
Interest payable 58,083,390.27 52,723,781.85 46,682,049.12 42,298,670.85
Dividends payable
Other payables 6,052,949.20 79,876,242.25 7,721,559.81 88,842,039.66
Reinsurance premiums payable
Insurance contract reserve
Money received for acting
trading of securities
Money paid for acting
underwriting of securities
Non-current liabilities due
within 1 year
Other liabilities6
Total current liabilities 261,533,954.34 298,617,286.47 284,152,416.87 326,672,790.43
Current liabilities:
Long-term borrowings
Bonds payable
Long-term accounts payable
Specific payable
Provisions for contingent
liabilities 4,919,585.47 4,919,585.47
Deferred income tax liabilities
Other non-current liabilities 500,000.00 500,000.00
Total non-current liabilities 5,419,585.47 4,919,585.47 500,000.00
Total liabilities 266,953,539.81 303,536,871.94 284,652,416.87 326,672,790.43
Owners’ equity(or shareholders’
equity)
Paid-up capital(or share capital) 318,600,000.00 318,600,000.00 318,600,000.00 318,600,000.00
Capital reserve 52,129,496.58 52,129,496.58 52,129,496.58 52,129,496.58
Less: treasury share
Specific reserve
Surplus reserve 86,036,260.20 86,036,260.20 86,036,260.20 86,036,260.20
Provision for general risk
Retained interest -122,024,198.23 -206,968,361.69 -107,417,698.72 -179,949,154.38
Foreign exchange differences
Total owners’ equity attributable
to parent company 334,741,558.55 249,797,395.09 349,348,058.06 276,816,602.40
Minority interest 5,423,969.32 6,024,229.17
Total owners’ equity 340,165,527.87 249,797,395.09 355,372,287.23 276,816,602.40
Total liabilities and owners’
equity 607,119,067.68 553,334,267.03 640,024,704.10 603,489,392.83
4.2 Income statement in this report period
Prepared by Guangdong Rieys Group Company Ltd Jul.-Sep.2010 Unit: RMB (Yuan)
Items
Current period Last period
Consolidation Parent company Consolidation Parent company
I. Total operating income 36,779,725.03 417,000.00 31,211,579.00 4,872,358.00
Including: operating income 36,779,725.03 417,000.00 31,211,579.00 4,872,358.00
Interest income
Premium income
Handling charges and
commissions
II. Total cost of sales 39,280,127.71 8,671,557.76 38,115,586.00 11,596,421.00
Including: Cost of sales 28,907,253.37 400,263.99 21,583,806.00 4,360,942.00
Interests expenses
Handling charges and
commission expenses
Cash surrender value
Net amount of claims
Net amount of withdrawn
from the insurance contract
reserve7
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
charges 30,231.42 25,925.00
Selling expenses 3,242,078.96 96.00 4,521,497.00 304,489.00
Administrative
expenses 6,186,898.92 3,832,223.80 7,710,516.00 2,970,108.00
Financial expenses 6,190,251.26 4,438,973.97 4,273,842.00 3,960,882.00
Impairment loss -5,276,586.22
Add: gain from change in fair
value (“-” means loss)
Gain from investment (“-”
means loss)
Including: income form
investment on affiliated enterprise
and jointly enterprise
Foreign exchange difference
(“-” means loss) -2,294.00
III. Business profit (“-” means
loss) -2,500,402.68 -8,254,557.76 -6,906,301.00 -6,724,063.00
Add: non-operation income 0.80 1,526.00 5.00
Less: non-business expense 189,644.72 115,610.52 489,879.00 8,635.00
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) -2,690,046.60 -8,370,168.28 -7,394,654.00 -6,732,693.00
Less: Tax expense 793,996.87 669,992.00
V. Net profit (“-” means loss) -3,484,043.47 -8,370,168.28 -8,064,646.00 -6,732,693.00
Attributable to owners
of parent company -3,266,996.73 -8,370,168.28 -7,998,119.00 -6,732,693.00
Minority interest -217,046.74 -66,527.00
VI. Earnings per share
(I) Basic earnings per
share -0.01 -0.03 -0.03 -0.02
(II) Diluted earnings per
share -0.01 -0.03 -0.03 -0.02
VII. Other comprehensive income 0.00 0.00
VIII. Total comprehensive income -3,484,043.47 -8,370,168.28 -8,064,646.00 -6,732,693.00
Attributable to owners
of parent company -3,266,996.73 -8,370,168.28 -7,998,119.00 -6,732,693.00
Minority interest -217,046.74 -66,527.00
4.3 Income statement from the year-beginning to the end of report period
Prepared by Guangdong Rieys Group Company Ltd Jan.-Sep. 2010 Unit: RMB (Yuan)
Items
Current period Last period
Consolidation Parent company Consolidation Parent company
I. Total operating income 116,408,282.07 9,240,130.70 105,136,659.00 5,194,077.00
Including: operating income 116,408,282.07 9,240,130.70 105,136,659.00 5,194,077.00
Interest income
Premium income8
Handling charges and
commissions
II. Total cost of sales 125,518,717.52 35,231,775.71 133,083,545.00 28,062,050.00
Including: Cost of sales 86,610,473.31 9,461,885.25 75,368,610.00 4,693,888.00
Interests expenses
Handling charges and
commission expenses
Cash surrender value
Net amount of claims
Net amount of withdrawn
from the insurance contract
reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
charges 88,281.17 109,030.00
Selling expenses 9,780,506.27 86,207.28 12,308,499.00 310,463.00
Administrative
expenses 19,717,157.18 10,805,661.69 26,075,206.00 9,068,807.00
Financial expenses 19,415,451.62 15,465,119.06 16,344,156.00 13,988,892.00
Impairment loss -10,093,152.03 -587,097.57 2,878,044.00
Add: gain from change in fair
value (“-” means loss)
Gain from investment (“-”
means loss) 1,847,417.00
Including: income form
investment on affiliated enterprise
and jointly enterprise
1,847,417.00
Foreign exchange difference
(“-” means loss) -114,978.00
III. Business profit (“-” means
loss) -9,110,435.45 -25,991,645.01 -26,214,447.00 -22,867,973.00
Add: non-operation income 58,913.19 16,218.01 36,015.00 15.00
Less: non-business expense 1,000,944.65 897,005.92 969,928.00 59,428.00
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) -10,052,466.91 -26,872,432.92 -27,148,360.00 -22,927,386.00
Less: Tax expense 5,154,292.44 146,774.39 1,399,018.00
V. Net profit (“-” means loss) -15,206,759.35 -27,019,207.31 -28,547,378.00 -22,927,386.00
Attributable to owners
of parent company -14,606,499.51 -27,019,207.31 -28,459,688.00 -22,927,386.00
Minority interest -600,259.84 -87,690.00
VI. Earnings per share
(I) Basic earnings per
share -0.05 -0.08 -0.09 -0.07
(II) Diluted earnings per
share -0.05 -0.08 -0.09 -0.07
VII. Other comprehensive income 0.00 0.00 0.00 0.00
VIII. Total comprehensive income -15,206,759.35 -27,019,207.31 -28,547,378.00 -22,927,386.00
Attributable to owners
of parent company -14,606,499.51 -27,019,207.31 -28,459,688.00 -22,927,386.009
Minority interest -600,259.84 -87,690.00
4.4 Cash flow statement from the year-beginning to the end of report period
Prepared by Guangdong Rieys Group Company Ltd Jan.-Sep. 2010 Unit: RMB (Yuan)
Items
Current period Last period
Consolidation Parent company Consolidation Parent company
I. Cash flow arising from
operating activities
Cash received from sales of
goods and rendering of services 114,070,486.25 19,829,227.73 145,684,848.00 24,868,223.00
Net increase of deposits from
customers and dues from banks
Net increase of loans from
central bank
Net increase of funds
borrowed from other financial
institutions
Cash received from premium
of original insurance contracts
Net cash flow received from
reinsurance business
Net increase of savings of
policy holders and investment
fund
Net increase received from
disposal of tradable financial
assets
Cash received from interest,
handling charges and
commissions
Net increase of borrowed
inter-bank funds
Net increase of buying
goods for repurchase
Net increase of buy-back
funds 8,746,650.76 8,394,651.00
Tax refunds received 67,437,537.25 59,872,464.64 10,494,759.00 27,006,349.00
Sub-total cash inflows
from operating activities 190,254,674.26 79,701,692.37 164,574,258.00 51,874,572.00
Cash paid for purchase of
commodities and reception of
service
88,826,246.11 4,063,354.38 115,529,920.00 11,386,479.00
Net increase of customer
lending and advance
Net increase of funds
deposited in the central bank and
amount due from banks
Cash for paying claims of the
original insurance contract
Cash for paying interest,
handling charges and
commissions
Cash for paying policy10
dividends
Cash paid to and for
employees 18,692,973.48 1,957,857.86 21,190,172.00 1,819,181.00
Various taxes paid 6,393,708.65 3,232,602.91 3,589,618.00 348,216.00
Payment of cash relating to
operating activities 33,812,736.68 39,082,021.40 24,767,733.00 27,782,896.00
Subtotal of cash outflows
from operating activities 147,725,664.92 48,335,836.55 165,077,443.00 41,336,772.00
Net cash flows from
operating activities 42,529,009.34 31,365,855.82 -503,185.00 10,537,800.00
II. Cash Flows from investment
activities:
Cash received from return of
investments 2,000,000.00 2,000,000.00
Cash received from
investment income
Net cash received from
disposal of fixed assets, intangible
assets and other long-term assets
389,600.00 8,210,838.00 48,000.00
Net cash received from
disposal of subsidiary or other
operating business units
1.00 1.00
Other cash received relating
to investment activities
Subtotal of cash inflows
from investment activities 2,389,600.00 2,000,000.00 8,210,839.00 48,001.00
Cash paid to acquire fixed
assets, intangible assets and other
long-term assets
4,683,398.60 3,818,240.63 625,370.00
Cash paid to investment 500,000.00
Net increase of pledged loans
Net cash paid by subsidiaries
and other operating business units
Payment of cash relating to
other investment activities
Subtotal of cash outflows
from investment activities 4,683,398.60 3,818,240.63 625,370.00 500,000.00
Net cash flows from
investment activities -2,293,798.60 -1,818,240.63 7,585,469.00 -451,999.00
III. Cash flows from financing
activities:
Cash received from absorbing
investment
Including: Cash received from
increase in minority interest
Cash received from
borrowings 15,000,000.00
Cash received from issuance
of bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from
financing activities 15,000,000.00
Cash repayments of amounts
borrowed 33,283,227.30 27,465,595.39 21,314,348.00 6,314,348.0011
Cash paid interest expenses
and distribution of dividends or
profit
1,004,468.57 152,501.00 2,612,896.00 2,480,933.00
Including: dividends or profit
paid to minority interest
Other cash payments relating
to financing activities
Sub-total of cash outflows
from financing activities 34,287,695.87 27,618,096.39 23,927,244.00 8,795,281.00
Net cash flow from
financing activities -34,287,695.87 -27,618,096.39 -8,927,244.00 -8,795,281.00
IV. Effect of foreign exchange
rate changes on cash and cash
equivalents
-114,978.00
V. Increase in cash and cash
equivalents 5,947,514.87 1,929,518.80 -1,959,938.00 1,290,520.00
Add : Cash and cash
equivalents at year-begin 2,168,571.06 647,412.49 13,151,057.00 1,602,714.00
VI. Cash and cash equivalents at
period-end 8,116,085.93 2,576,931.29 11,191,119.00 2,893,234.00
4.5 Auditor’s report
Auditor’s opinion: un-audited
