The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Guangdong Rieys Group Company Ltd.
The First Quarterly Report 2011
§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 will shoulder individual and joint responsibility for the factuality, accuracy and
completeness of the contents of this report.
1.2 Directors, supervisors and senior management had no object on this report.
1.3 All other directors attended in person the board meeting where this quarterly report was
reviewed.
1.4 The Financial Report of the First Quarterly Report has not been audited by a CPA firm.
1.5 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.
English version for reference only. Should there be any discrepancy between the two versions, the
Chinese version shall prevail.
§2 Company Profile
2.1 Main accounting data and financial indices
Unit: RMB Yuan
31 Mar. 2011 31 Dec. 2010 Increase/decrease (%)
Total assets (Yuan) 561,129,455.34 586,050,810.45 -4.25%
Owner’s equity attributable to shareholders
298,758,795.06 308,161,044.95 -3.05%
of listed company (Yuan)
Share capital (Share) 318,600,000.00 318,600,000.00 0.00%
Net assets per share attributable to
0.94 0.97 -3.09%
shareholders of listed company (Yuan/share)
Jan.-Mar. 2011 Jan.-Mar. 2010 Increase/decrease (%)
Operating revenue (Yuan) 22,872,741.74 40,059,360.01 -42.90%
Net profit attributable to shareholders of
-9,402,249.89 -5,807,090.68 0.00%
listed company (Yuan)
Net cash flow arising from operating
1,442,617.26 27,935,193.95 -94.84%
activities (Yuan)
Net cash flow per share arising from
0.0045 0.0876 -94.86%
operating activities (Yuan/share)
Basic earnings per share (Yuan/share) -0.03 -0.02 -50.00%
Diluted earnings per share (Yuan/share) -0.03 -0.02 -50.00%
Weighted average ROE (%) -3.10% -1.94% -1.16%
Weighted average ROE after deducting
-2.94% -1.81% -1.13%
non-recurring gains and losses (%)
Items of non-recurring gains and losses
√Applicable □Inapplicable
Unit: RMB Yuan
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Amount from the year-begin to
Items of non-recurring gains and losses Note(if applicable)
the end of reporting period
Gains and losses from disposal of non-current assets 2,600.00
Government subsidies recorded into current gains and losses,
excluding those related closely to the routine business of the
172,716.48
Company and continuously enjoyed by the Company at fixed
amounts or ratios according to state policies and regulations
Gains/losses from fair value changes of transactional financial
assets and liabilities held by the Company, and investment gains
from disposal of transactional financial assets and liabilities and 108,547.06
financial assets available for sale, excluding effective hedging
business related to the Company’s common operations
Other non-operating incomes and expenses, excluding the
-759,500.02
aforesaid items
Impact on income tax -9,072.87
Impact on minority interest -10,075.47
Total -494,784.82
2.2 Total number of shareholders at the end of the reporting period and statement on shares held by
the top ten shareholders with shares not subject to trading moratorium
Unit: Share
Total number of shareholders 15,233
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 5,941,363 Domestically listed foreign share
ZHEN SU XIAN 1,721,118 Domestically listed foreign share
LUO DONG HUI 1,400,000 Domestically listed foreign share
XU HAI 1,378,800 Domestically listed foreign share
NGAI KWOK PAN 1,145,816 Domestically listed foreign share
TAIFOOK SECURITIES COMPANY
1,087,459 Domestically listed foreign share
LIMITED-ACCOUNT CLIENT
WANG YAN FENG 969,259 Domestically listed foreign share
DUAN DE JIN 732,100 Domestically listed foreign share
CHEN ZHEN QI 701,800 Domestically listed foreign share
KE ZHONG FENG 699,900 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
Explanation on items with a movement over 30%:
Items in the balance Increase/decrease
Closing balance Opening balance Explanation
sheet (%)
Receipt of some goods
Monetary funds 8,015,213 30,095,398 -73.37 payments and
inter-Group payments
Transactional financial
5,877,454 0 Stock investments
assets
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Receipt of some goods
payments and decrease
Accounts receivable 40,357,187 60,384,108 -33.17
of sales in the first
quarter
Receipt of the rest of the
payment for equity
interests of Shanxi
Non-current assets due
0 5,000,000 -100.00 Chuanglian Information
within one year
Network Technology
Co., Ltd. transferred by
the Company
Some payables for
Accounts payable 3,592,937 5,208,298 -31.02
goods were settled.
Items in the income Increase/decrease
Jan.-Mar. 2011 Jan.-Mar. 2010 Explanation
statement (%)
Revenue from the
22,872,742 40,059,360 -42.90 Decrease of export
main business
Costs of the main
18,383,989 27,125,462 -32.23 Decrease of export
business
Selling expense 2,344,397 3,843,779 -39.01 Decrease of sales
Gains on fair value Fair value changes of
172,716 0
changes stock investments
Income from stock
Investment income 108,547 0
investments
No income tax payable
due to decrease of
Income tax expense 0 1,909,038 -100.00
export and deficits of
subsidiaries
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 2010 annual
audit, issued an unqualified audit report with highlighted events for the Company’s annual report of
2010. The highlighted events were as follows, “We would like to inform readers of financial report
that as stated in (X) under Note. X, the net profit attributable to shareholders of parent company
stood at RMB -4,118,700 for 2010, and at RMB -42,204,000 after deducting non-occurring gains
and losses. In 2010, the main business of the Company was changed to real estate development and
garments from garments. As the real estate project has been put into operation and net yet conduct
pre-sale that 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 of materially uncertainty. This paragraph has no
impact on the audited opinions that has bee revealed.”
Now that garments and real estate project constitute the main business of the Company that though
traditional garments business still under normal operation, its profitability is lower than cost of all
operations. Meanwhile, the real estate project is periodic and still under development stage. In 2010,
the Company would further vitalizing inventory assets, continuing adopting forceful method to
clear accounts receivable, selling business of brand name garments, keeping subsidies with
profitability, draw all resources to focus on development and construction of real estate item,
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
endeavour to make profit on main business in 2011.
Through several years of adjustment, business of the Company has transformed from single
garments to both garments and real estate development that big improvement has been made on the
quality of the assets of the Company. Moreover, the Company properly settled band loan problem
and capital problem that troubled the Company for long term, so the consistent operation ability of
the Company achieved a big advance.
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 reporting 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 Same period of last
Increase/decrease（%）
of the next reporting period year
Estimated accumulative net
-750.67 -1,133.95 Decrease -33.80%
profit (RMB’0000)
Basic earnings per share
-0.0235 -0.0355 Decrease -33.80%
(Yuan/share)
The Company revealed a decrease in deficit when compared to corresponding period of last
Notes to performance year mainly due to the Company gained investment income of about RMB 6.5 million for
forecast sale of Shenzhen Missk Fashion Co., Ltd.(The said exchange still need to forward to the
Board of Directors for review and approval.)
3.5 Other significant events that need to be explained
3.5.1 Securities investment
√Applicable □Inapplicable
Unit: Yuan
Proportion
to total Gains/losses
Short Holding Book value
Serial Type of Initial register securities during
Stock code form of shares as at as at
number securities capital (Yuan) investment reporting
stock period-end period-end
as at 31 Mar. period
2011 (%)
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
1 Stock 600135 Luck film 5,600,000.00 358,600 5,877,454.00 100.00% 108,547.06
Other holding shares of securities investment
0.00 - 0.00 0.00% 0.00
as at period-end
Gains and losses from sale of securities
- - - - 0.00
investment during the reporting period
Total 5,600,000.00 - 5,877,454.00 100% 108,547.06
Explanations for particulars about securities investment
With purpose of promoting the use efficiency of idle capital, securities investment of the Company is in accordance with
management authorities and all procedure as well as decision approval of conducting securities. While securities
investment of the Company is of a small amount, low profitability that has a little impact on business performance of the
reporting period.
3.5.2 Interviews, communications and visits in the reporting period
Time Location Means Investor Topics discussed and information provided
Communication by Inquired about current operating
21 Feb. 2011 Office Individual investor
telephone information of the Company
Communication by Inquired about when the Company
25 Feb. 2011 Office Individual investor
telephone disclosures the First Quarterly Report 2011
Communication by Inquired about operating information of
8 Mar. 2011 Office Individual investor
telephone the Company in 2010
Communication by Inquired about the process of the real
10 Mar. 2011 Office Individual investor
telephone estate item
Communication by Inquired about financial data of the
29 Mar. 2011 Office Individual investor
telephone Company such as current net assets etc.
Inquired about whether the Company
Communication by would confront with delisting risk warning
31 Mar. 2011 Office Individual investor
telephone and particulars on development of real
estate item
3.6 Investment in derivative products
□Applicable √Inapplicable
3.6.1 Derivative products held at the end of reporting period
□Applicable √Inapplicable
§4 Appendix
4.1 Balance sheet
Prepared by Guangdong Rieys Group Company Ltd 31 Mar. 2011 Unit: RMB (Yuan)
Closing balance Opening balance
Items
Consolidation Parent Company Consolidation Parent Company
Current Assets:
Monetary funds 8,015,212.86 5,322,784.06 30,095,398.06 28,150,078.47
Settlement reserves
Lendings to banks and other
financial institutions
Transactional financial assets 5,877,454.00 2,937,088.00
Notes receivable
Accounts receivable 40,357,186.77 60,384,107.71
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Accounts paid in advance 77,701,187.68 968,244.00 69,492,604.59 338,244.00
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 27,462,574.40 106,836,415.50 27,781,691.68 106,997,618.63
Financial assets purchased
under agreements to resell
Inventories 214,413,483.82 205,006,377.50
Non-current assets due within 1
year
5,000,000.00 5,000,000.00
Other current assets 9,853.19
Total current assets 373,836,952.72 116,064,531.56 397,760,179.54 140,485,941.10
Non-current assets:
Entrusted loans and advances
granted
Available-for-sale financial
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 243,312,509.68 243,312,509.68
Investing property
Fixed assets 108,770,263.29 101,915,748.24 110,872,936.68 103,288,925.43
Construction in progress
Engineering materials 54,526.00 54,526.00 54,526.00 54,526.00
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 66,065,288.79 66,065,288.79 66,441,172.05 66,441,172.05
R&D expense
Goodwill
Long-term deferred expenses 865,440.00
Deferred income tax assets 10,056,556.18 5,048,816.11 10,056,556.18 5,048,816.11
Other non-current assets 2,345,868.36
Total of non-current assets 187,292,502.62 416,396,888.82 188,290,630.91 418,145,949.27
Total assets 561,129,455.34 532,461,420.38 586,050,810.45 558,631,890.37
Current liabilities:
Short-term borrowings 137,500,000.00 122,500,000.00 158,500,000.00 143,500,000.00
Borrowings from Central Bank
Customer bank deposits and
due to banks and other financial
institutions
Borrowings from banks and
other financial institutions
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Transactional financial
liabilities
Notes payable
Accounts payable 3,592,936.66 19,442.64 5,208,298.06 19,442.64
Accounts received in advance 39,821.24 39,821.24
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee’s compensation
payable
1,229,715.70 158,494.93 1,316,693.31 163,554.90
Tax payable 5,455,132.72 636,670.29 6,660,913.34 1,460,207.15
Interest payable 71,549,693.59 65,045,806.99 67,636,166.85 61,952,339.22
Dividend payable
Other accounts payable 39,371,013.13 122,351,026.83 34,590,357.22 122,403,842.79
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting
underwriting of securities
Non-current liabilities due
within 1 year
Other current liabilities 99,671.66
Total current liabilities 258,738,313.04 310,711,441.68 274,051,921.68 329,499,386.70
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 258,738,313.04 310,711,441.68 274,051,921.68 329,499,386.70
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 reserves 52,129,496.58 52,129,496.58 52,129,496.58 52,129,496.58
Less: Treasury stock
Specific reserves
Surplus reserves 86,036,260.20 86,036,260.20 86,036,260.20 86,036,260.20
Provisions for general risks
Retained profits -158,006,961.72 -235,015,778.08 -148,604,711.83 -227,633,253.11
Foreign exchange difference
Total equity attributable to owners 298,758,795.06 221,749,978.70 308,161,044.95 229,132,503.67
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
of the Company
Minority interests 3,632,347.24 3,837,843.82
Total owners’ equity 302,391,142.30 221,749,978.70 311,998,888.77 229,132,503.67
Total liabilities and owners’
equity
561,129,455.34 532,461,420.38 586,050,810.45 558,631,890.37
4.2 Income statement
Prepared by Guangdong Rieys Group Company Ltd Jan.-Mar.2011 Unit: RMB (Yuan)
Jan.-Mar. 2011 Jan.-Mar. 2010
Items
Consolidation Parent company Consolidation Parent company
I. Total operating income 22,872,741.74 417,000.00 40,059,360.01 3,537,411.88
Including: operating income 22,872,741.74 417,000.00 40,059,360.01 3,537,411.88
Interest income
Premium income
Handling charges and commissions
II. Total cost of sales 32,004,851.73 7,287,597.04 43,991,389.74 11,561,708.29
Including: Cost of sales 18,383,988.74 400,263.99 26,987,411.47 3,194,757.21
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 40,234.73 33,971.52
Selling expenses 2,344,397.05 80,000.00 3,843,779.24 82,645.28
Administrative expenses 6,343,248.70 3,306,208.83 7,853,254.18 3,745,066.99
Financial expenses 4,982,459.76 3,501,124.22 5,272,973.33 4,539,238.81
Impairment loss -89,477.25
Add: gain from change in fair value (“-”
means loss)
172,716.48 70,745.00
Gain from investment (“-” means loss) 108,547.06 69,647.12
Including: income form
investment on affiliated enterprise and
jointly enterprise
Foreign exchange difference (“-”
means loss)
III. Business profit (“-” means loss) -8,850,846.45 -6,730,204.92 -3,932,029.73 -8,024,296.41
Add: non-operation income 39,995.46 20,195.45 56,898.01 16,198.01
Less: non-business expense 796,895.48 672,515.50 510,868.69 505,557.55
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) -9,607,746.47 -7,382,524.97 -4,386,000.41 -8,513,655.95
Less: Tax expense 1,528,264.59
V. Net profit (“-” means loss) -9,607,746.47 -7,382,524.97 -5,914,265.00 -8,513,655.95
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Attributable to owners of parent
company
-9,402,249.89 -7,382,524.97 -5,807,090.68 -8,513,655.95
Minority interest -205,496.58 -107,174.32
VI. Earnings per share
(I) Basic earnings per share -0.03 -0.02 -0.02 -0.03
(II) Diluted earnings per share -0.03 -0.02 -0.02 -0.03
VII. Other comprehensive income
VIII. Total comprehensive income -9,607,746.47 -7,382,524.97 -5,914,265.00 -8,513,655.95
Attributable to owners of parent
company
-9,402,249.89 -7,382,524.97 -5,807,090.68 -8,513,655.95
Attributable to minority
shareholders
-205,496.58 -107,174.32
Where there were business combinations under the same control in the reporting period, the
combined parties achieved net profits of RMB 0.00 before the combinations.
4.3 Cash flow statement
Prepared by Guangdong Rieys Group Company Ltd Jan.-Mar. 2011 Unit: RMB (Yuan)
Jan.-Mar. 2011 Jan.-Mar. 2010
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities and
42,572,139.93 30,110,637.75 14,158,030.00
rendering of service
Net increase of deposits from customers and dues
from banks
Net increase of loans from the central bank
Net increase of funds borrowed from other financial
institutions
Cash received from premium of original insurance
contracts
Net cash received from reinsurance business
Net increase of deposits of policy holders and
investment fund
Net increase of disposal of tradable financial assets
Cash received from interest, handling charges and
commissions
Net increase of borrowings from banks and other
financial institutions
Net increase of funds in repurchase business
Tax refunds received 3,186,428.37 4,550,420.99
Other cash received relating to operating activities 329,184.07 612,265.97 36,398,695.78 21,293,830.00
Subtotal of cash inflows from operating activities 46,087,752.37 612,265.97 71,059,754.52 35,451,860.00
Cash paid for goods and services 34,396,611.36 24,618,026.21 4,464,482.00
Net increase of customer lendings and advances
Net increase of funds deposited in the central bank
and amount due from banks
Cash for paying claims of the original insurance
contracts
Cash for paying interest, handling charges and
commissions
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The First Quarterly Report 2011 of Guangdong Rieys Group Company Ltd.
Cash for paying policy dividends
Cash paid to and for employees 4,192,045.35 444,105.17 7,919,124.00 868,719.00
Various taxes paid 2,054,017.14 853,244.73 1,428,192.00 173,710.00
Other cash payment relating to operating activities 4,002,461.26 2,298,514.60 9,159,218.36 5,740,262.00
Subtotal of cash outflows from operating
44,645,135.11 3,595,864.50 43,124,560.57 11,247,173.00
activities
Net cash flows from operating activities 1,442,617.26 -2,983,598.53 27,935,193.95 24,204,687.00
II. Cash flows from investing activities:
Cash received from disposal of investments 5,000,000.00 5,000,000.00 2,000,000.00 2,000,000.00
Cash received from return on investments
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries or
other business units
Other cash received relating to investing activities 137,189.17 87,976.00
Subtotal of cash inflows from investing activities 5,137,189.17 5,087,976.00 2,000,000.00 2,000,000.00
Cash paid to acquire fixed assets, intangible assets
1,509,612.00 630,000.00 3,875,648.83 3,818,241.00
and other long-term assets
Cash paid for investment 5,733,379.63 2,884,671.88
Net increase of pledged loans
Net cash paid to acquire subsidiaries and other
business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 7,242,991.63 3,514,671.88 3,875,648.83 3,818,241.00
Net cash flows from investing activities -2,105,802.46 1,573,304.12 -1,875,648.83 -1,818,241.00
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Including: Cash received from minority
shareholder investments by subsidiaries
Cash received from borrowings
Cash received from issuance of bonds
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities
Repayment of borrowings 21,000,000.00 21,000,000.00 3,299,999.00 3,299,999.00
Cash paid for interest expenses and distribution of
417,000.00 417,000.00 152,501.00 152,501.00
dividends or profit
Including: dividends or profit paid by
subsidiaries to minority shareholders
Other cash payments relating to financing
19,000,000.00 19,000,000.00
activities
Sub-total of cash outflows from financing activities 21,417,000.00 21,417,000.00 22,452,500.00 22,452,500.00
Net cash flows from financing activities -21,417,000.00 -21,417,000.00 -22,452,500.00 -22,452,500.00
IV. Effect of foreign exchange rate changes on cash
and cash equivalents
V. Net increase in cash and cash equivalents -22,080,185.20 -22,827,294.41 3,607,045.12 -66,054.00
Add: Cash and cash equivalents at year-begin 30,095,398.06 28,150,078.47 2,168,571.06 647,412.00
VI. Cash and cash equivalents at the period-end 8,015,212.86 5,322,784.06 5,775,616.18 581,358.00
4.4 Auditor’s report
Auditor’s opinion: un-audited
10
