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RNS Number : 5600R
Asia Ceramics Holdings PLC
29 June 2015
 

 

Asia Ceramics Holdings plc

 

('Asia Ceramics' or 'the Company' or together with its subsidiaries 'the Group')

 

Final Results for the year ended 31 December 2014

 

The Directors of Asia Ceramics are pleased to present the Company's final results for the year ended 31 December 2014.

 

A copy of the Company's annual report will be sent to shareholders and will be available shortly on the Company's website at www.asiaceramicplc.com.

 

Enquiries:

 

Alei Duan

Asia Ceramics Holdings plc

Tel: 07776 481 237




James Joyce / James Bavister

WH Ireland Limited

Tel: 0207 220 1666

 

Highlights:

·      Profit for the year at £50k (2013: £21k)

·      Net assets at £1,025k (2013: £956k)

·      Cash at bank of £33k (2013: £288k)

·      Basic EPS 0.46 pence (2013: 0.20 pence)

 

CHAIRMAN'S STATEMENT

 

Introduction

 

I have great pleasure in presenting the annual report and financial statements for Asia Ceramics Holdings Plc for the financial year ending 31 December 2014.

 

Results

 

The Group's turnover for the year to 31 December 2014 was £11 million (2013: £11 million). The profit for the year was £50k (2013: £21k).

 

Review for the year

 

The Group's main trading activity is the export of ceramic products from China, which has grown by approximately 10 per cent during the year under review.  The Group's main export markets are Europe, Asia, Far East, America and Australia.  Export sales for the year ended 31 December 2014 amounted to £8.4million of sales (2013: £7.6 million), which represented 78% (2013: 69%) of Group turnover for the year.

 

An improvement in the in gross margin led to an increase in the Group's profitability for the year on similar levels of turnover.

 

Employees

 

The Board would like to extend their personal thanks to all employees of the Group for their enthusiasm, hard work and commitments. In particular the Board would like to thank the Chief Executive Officer, Dr Dingxin Pu, for his continued contribution to the development of the Group.

 

Outlook

 

The Board is actively taking steps to improve the gross margin further as well as to achieve further sales in its export markets, as well as in China, and thus increase the Group's profit in 2015.

 

I look forward to reporting further progress in 2015.

 

 

 



CHIEF EXECUTIVE OFFICER'S STATEMENT

 

The Group was established in July 2010 to distribute and sell ceramic wall and floor tiles, sanitary ware products and other home improvement products in China and internationally.

 

Financial Performance

·      Group net sales of £11 million (2013: £11 million)

·      Profit for the year of £50k (2013: £21k)                                                                

 

Group operating net cash used for the year ended 31 December 2014 was £10k (2013: £49k). Cash at bank at 31 December 2014 was £33k (2013: £288k). 

 

Operations

 

During the year to 31 December 2014, the Group employed 70 (2013: 69) members of staff. The head office is in Foshan as well as the main showroom.

 

The Group's administration, information technology, human resources, finance, sales and marketing are controlled from the head office in Foshan. The Group also designs its own ceramic tiles, and enters into contracts with OEM suppliers to manufacture its own designed products.

 

The Group's main trading operations are:

 

·      Our export division that exports ceramic and sanitary ware product internationally; and

·      Three retail stores, one in Hong Kong, the other two in mainland China that sell ceramic and sanitary ware products.

 

The head office in Foshan:

 

·      seeks appropriate locations for stores;

·      provides IT, logistics, finance and administration support;

·      manages the wholesale and export division;

·      provides training for the staff;

·      ensures that all rules and regulations are complied with; and

·      ensures that the UK Bribery Act of 2010 is complied with.

 

Outlook

 

We are looking to make further progress in increasing sales in our export division and improving gross margin, despite the difficult trading conditions as well as in our domestic markets.  I look forward therefore, to demonstrating further growth in profits and building shareholders' value in 2015.

 

 

CORPORATE GOVERNANCE STATEMENT

Principles of Corporate Governance

 

As a company listed on AIM, the company is not governed by the Combined Code adopted by the London Stock Exchange ('the Combined Code') but is required to operate principles of good governance and best practice. Accordingly, the directors are committed to the Combined Code and believe that an effective system of corporate governance supports the enhancement of shareholder value. These principles have been in place since the company's listing on 6 September 2010.

 

The directors acknowledge the importance of the Combined Code and intend, following Admission, to continue to apply its principles so far as is practicable taking into account the company's size and stage of development. The company has three non-executive directors.

 

The directors have established an audit committee (the "Audit Committee"), a remuneration committee (the "Remuneration Committee") and an AIM rules compliance committee (the "AIM Rules Compliance Committee") with formally delegated duties and responsibilities to operate with effect from Admission.

 

Audit Committee

 

The Audit Committee, which initially comprise Alei Duan as Chairman, as well as Wenxian Liu and Marcus Paciocco, will determine and examine any matters relating to the financial affairs of the company including the terms of engagement of the Group's auditor and, in consultation with the auditors, the scope of the audit. The Audit Committee will receive and review reports from the management and the external auditors of the Group relating to the annual and interim accounts and the accounting and internal control systems of the Group. In addition, it will consider the financial performance, position and prospects of the company and ensure they are properly monitored and reported on.

 

Remuneration Committee

 

The Remuneration Committee is responsible for making recommendations to the Board on the company's framework of executive remuneration and its cost. The Committee determines the contract terms, remuneration and other benefits for each of the executive directors and senior employees, including performance related bonus schemes, pension rights and compensation payments.

 

The Remuneration Committee, which comprise Alei Duan, Wenxian Liu and Marcus Paciocco with Alei Duan acting as Chairman, will review the performance of the executive directors and senior management, set and review their remunerations and the terms of their service contracts, determine the payment of bonuses to the executive directors and consider the Group's bonus and option schemes.

 

AIM Compliance Committee

 

In addition, the Board has established an AIM Rules Compliance Committee comprising Alei Duan and Shouyuan Wu which has responsibility for ensuring that the company complies fully with the AIM Rules.

 

The directors will comply with Rule 21 of the AIM Rules relating to directors' dealings and will take all reasonable steps to ensure compliance by the company's applicable employees. The company has adopted and operates a share dealing code for directors, and employees in accordance with the AIM Rules.

 

The Board

 

The Board is responsible to shareholders for the proper management of the company. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered. The Board has a formal schedule of matters reserved to it and has discussions on a monthly basis since its listing on the AIM. The Board is responsible for overall strategies, reviewing management accounts, approval of major capital expenditure projects and consider of significant financing matters.

 

Directors

 

During the year, the Board comprised the non-executive chairman Alei Duan (London based), the chief executive officer, the finance director, two executive directors and two further non-executive directors.

 

Internal Controls

 

The directors are responsible for the company's system of internal controls and reviewing its effectiveness. The Board has designed the company's system of internal controls in order to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal controls can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatements or losses.

 

The key elements of the control systems in operation are:

 

·      the Board meets regularly with a formal schedule of matters reserved to it for decision;

·      it has put in place an organisational structure with clear lines of responsibility defined and with appropriate delegation of authority;

·      established procedures for the planning, approval and monitoring of capital expenditure and information systems for monitoring the company's financial performance against approved budgets and forecasts;

·      departmental heads are required annually to undertake a full assessment process to identify and quantify the risks that face their businesses and functions and assess the adequacy of the prevention, monitoring and modification practices in place for those risks;

·      significant risks and associated controls and monitoring procedures are reported regularly to the Board to enable the directors to review the effectiveness of the system of internal controls.

 

Relations with shareholders

 

The Board attaches great importance to maintain a good relationship with shareholders. The Board regards the annual general meeting as a good opportunity to communicate directly with investors who are encouraged to make inquiries to officers of the company.

 

 

 

DIRECTORS' REPORT

The Directors present their report and financial statements for the year ended 31 December 2014.

 

Principal activities

 

The principal activity of the Group is the sale of ceramic wall and floor tiles and sanitary ware products in China and internationally.

 

Business review

 

A detailed review of the business and a description of the main trends and factors likely to affect the future development, performance and position of the Group can be found in the Chairman's Statement and Chief Executive Officer's Statement.

 

Risks and uncertainties

 

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance and could cause actual results to differ materially from expected and historic results. The Board monitors risks on an ongoing basis and implements appropriate procedures and processes to try and mitigate the adverse consequences of such risks.

 

The business faces two principal risks. Firstly, the Group needs to expand and retain its current position in the retail ceramic industry. Future growth will be both organic and through potential acquisitions. There are a number of uncertainties relating to future acquisitions and there can be no guarantee that the Group will be able to expand as envisaged. Secondly, the Group may need to raise additional capital to fund its future expansion. There can be no assurance that the Group will be able to obtain such funding.

 

In addition, the financial instruments and risk profiles of the Group are set in note 24 on page 36.

 

Results and dividends

 

The results of the year are set out in the Statement of Comprehensive Income.

 

The directors do not recommend a dividend payment for the year.

 

Directors and their interests

 

The following directors have held office during the year and their interests as at 31 December 2014, all of which are beneficial unless otherwise stated; whether direct or indirect, of the directors and their families in the issued share capital of the company is as follows:

 

 

 

Director

Number of

Ordinary

Shares

Percentage of Ordinary Shares




Dr Dingxin Pu

7,572,071

68.90%

Yangjing Zhang

72,180

0.66%

Weifeng Liu

92,803

0.84%

Frank Lewis (Resigned on 3 June 2015)

-

-

Alei Duan

185,700

1.69%

Wenxian Liu

Shouyuan Wu

742,424

-

6.76%

-

Marcus Paciocco (Appointed on 11 May 2015)

-

-

 

 

Directors' remuneration






  2014


  2013






£'000


£'000









Frank Lewis (Resigned on 3 June 2015)





32


32

Dr Dingxin Pu





59


61

Yangjing Zhang





-


17

Weifeng Liu





12


17

Alei Duan





10


10

Wenxian Liu

Shouyuan Wu





-

18


-

18

Marcus Paciocco (Appointed on 11 May 2015)





-


-






131


155

 

Employment policies

 

The Group pursues a policy of equal opportunities to all employees and potential employees. The Group has continued its policy of giving fair consideration to applications for employment made by disabled persons, bearing in mind the requirements for skills and aptitude for the job. In the areas of planned employee training and career development, the Group strives to ensure that disabled employees receive equal treatments, including opportunities for promotion. Every effort is made to ensure that continuing employment and opportunities are also provided for employees who become disabled. It is the Company's policy to take views of employees into account in making decisions, and wherever possible to encourage the involvement of employees in Group's performance.

 

Payments to suppliers

 

The company's policy for the year ended 31 December 2014 is to settle payments with suppliers when agreeing the terms of the business transactions;

 

-     ensure that suppliers are aware of the terms of payments by the inclusion of the relevant terms in contracts;

-     pay in accordance with the company's contractual and other legal obligations

 

The number of days of trade purchases outstanding for the Group as at 31 December was 30 days.

 

Going concern

 

The directors are required to report that the business is a going concern, with supporting assumptions or qualifications as necessary. The directors consider that the Group has adequate resources and committed borrowing facilities to continue in operational existence for the foreseeable future. Consequently, they have adopted the going concern basis in preparing the financial statements.

 

Substantial shareholders

 

As at 30 April 2015, the company had been notified of the following beneficial interest of 3% or more in its shares other than directors:

 

Name of holder

Number

of shares

Percentage

shareholding




Weiguo Peng

425,757

3.87%

Jianwei Huang

425,757

3.87%

Better Group (Holding) Co Limited

632,900

5.76%

 

 

Statement of Directors' responsibilities

 

The directors are responsible for preparing the annual report and the financial statements. The directors are required to prepare financial statements for the Group and Company in accordance with International Financial Reporting Standards as adopted by the EU (together, "IFRS").

 

International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group and Company's financial position, financial performance and cash flows. This requires the faithful representation of transactions, other events and conditions in accordance with the definitions and recognition criteria for the assets, liabilities, income and expenses set out in by the International Accounting Standards Board's

 

"Framework for the Preparation and Presentation of Financial Statements". In virtually all circumstances, a fair representation will be achieved by compliance with all IFRS. Directors are also required to:

 

-     select suitable accounting policies and then apply them consistently,

-     present information, including accounting policies, in a manner that provides relevant, reliable, comparable  and understandable information, and

-     provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company's financial position and financial performance.

 

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Group and Company. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Statement of disclosure to auditor

 

The Directors have confirmed that:

 

-     so far as each Director is aware, there is no relevant audit information of which the Group and Company's auditor is unaware; and

-     each Director has taken all the necessary steps he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Group and Company's auditor is aware of that information.

 

 

Auditors

 

A resolution proposing the reappointment of UHY Hacker Young as auditors of the Group and authorising the Board to determine their remuneration will be put to the Annual General Meeting.

 

By order of the Board

 

 

INDEPENDENT AUDITORS' REPORT

 

We have audited the financial statements of Asia Ceramics Holdings Plc for the year ended 31 December 2014 which comprise the Consolidated and Company Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Cash Flows, the Consolidated and Company Statements of Changes in Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union (together, "IFRSs").

 

This report is made solely to the company's members, as a body. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of directors and auditor

 

As explained more fully in the Directors' Responsibilities Statement set out on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors. We are not required to consider whether the board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the company's corporate governance procedures or its risk and control procedures.

 

Scope of the audit of the financial statements

 

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

 

Opinion on financial statements

 

In our opinion the financial statements:

 

·              give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2014 and of the group's and the parent company's profit or loss for the year then ended;

·              have been properly prepared in accordance with IFRSs as adopted by the European Union; and

·              have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

 

Matters on which we are required to report by exception

 

We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

 

·              proper accounting records have not been kept, or proper returns adequate for our audit have not been received from branches not visited by us; or

·              the financial statements are not in agreement with the accounting records and returns; or

·              we have not received any information or explanation that was necessary for our audit.

 

 

Julie Wilson

for and on behalf of UHY Hacker Young

Chartered Accountants

Statutory Auditors

Quadrant House

4 Thomas More Square

London E1W 1YW

 

29 June 2015

 

The maintenance and integrity of the Asia Ceramics Holdings Plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website; and legislation governing the preparation and dissemination of financial statements may differ from one jurisdiction to another.

 

CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 


Group

Year

 ended

 31 December 2014

     

Group

Year ended

 31 December 2013

 

Company

Year

ended

 31 December 2014

 

Company

Year

ended

31 December 2013


 

£'000

 

£'000

 

£'000

 

£'000


 

 

 

 

 

 

 

 

Revenue

3

10,797

 

10,998

 

-

 

-

Cost of sales

 

(8,743)

 

(9,204)

 

-

 

-


 

 

 

 

 

 

 

 

Gross profit

 

2,054

 

1,794

 

-

 

-


 

 

 

 

 

 

 

 

Selling and distribution expenses

 

(1,215)

 

(766)

 

-

 

-

Administrative expenses

 

(869)

 

(914)

 

(140)

 

(144)


 

 

 

 

 

 

 

 

Profit /(loss) from operation

 

(30)

 

114

 

(140)

 

(144)


 

 

 

 

 

 

 

 

Net non-operating income/(expenses)

 

(1)

 

(7)

 

-

 

-

Net finance income /(costs)

6

35

 

(71)

 

 

 

 


 

 

 

 

 

 

 

 

Profit /(loss) before taxation

 

4

 

36

 

(140)

 

(144)


 

 

 

 

 

 

 

 

Income tax expenses

7

 46

 

(15)

 

-

 

-


 

 

 

 

 

 

 

 

Profit /(loss) for the year

 

50

 

21

 

(140)

 

(144)


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Exchange difference arising on translation of foreign operations

 

 

19

 

 

 

-

 

 

 

 


 

 

 

 

 

 

 

 

Total comprehensive income for the year attributable to equity holders

 

 

69

 

 

21

 

 

 

 


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Earnings per ordinary share (pence)

8

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Basic

 

0.46

 

0.20

 

 

 

 


 

 

 

 

 

 

 

 

Diluted

 

0.46

 

0.20

 

 

 

 


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

All amounts are derived from continuing operations



CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2014

 

 

 


Note

2014

 

2013

 

2014

 

2013


 

£'000

 

£'000

 

£'000

 

£'000


 

Group

 

Group

 

Company

 

Company


 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

Property, plant and equipment

Investments                                        

Trade and other receivables

9

10

12

110

-

-

 

151

-

-

 

-

1

1,118

 

-

1

1,211

Deferred tax assets

14

65

 

32

 

-

 

-


 

175

 

183

 

1,119

 

1,212


 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Inventory

11

11

 

5

 

-

 

-

Trade and other receivables

12

5,032

 

3,808

 

-

 

-

Cash and cash equivalents

13

33

 

288

 

3

 

3


 

5,076

 

4,101

 

3

 

3


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Total assets

 

5,251

 

4,284

 

1,122

 

1,215


 

 

 

 

 

 

 

 

 

Equity and reserves

 

 

 

 

 

 

 

 

 

Share capital

Share premium

Other reserves

Retained earnings

15

15

17

55

1,201

111

(342)

 

55

1,201

92

 (392)

 

55

1,201

27

(734)

 

55

1,201

27

(594)


 

1,025

 

956

 

549

 

689


 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Loan from director

18

501

 

500

 

501

 

500


 

501

 

500

 

501

 

500


 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Income tax liabilities

 

15

 

68

 

-

 

-

Trade and other payables

19

3,710

 

2,760

 

72

 

26


 

3,725

 

2,828

 

72

 

26


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Total equity and liabilities


5,251

 

4,284

 

1,122

 

1,215


 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

The financial statements were approved by the Board of Directors and authorised for issue on 29 June 2015.

 

 

 

 

 

Dr Dingxin Pu                                                  Shouyuan Wu 

Chief Executive Director                                           Executive Finance Director



CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

 

 

 

2014

 

2013

 

2014

 

2013

 

Notes

£'000

 

£'000

 

£'000

 

£'000

 

 

Group

 

Group

 

Company

 

Company

 

 


 

 

 

 

 

 

Profit/(loss) from operations

 

4

 

44

 

(140)

 

(144)

 

 


 

 

 

 

 

 

Adjustment for:

 


 

 

 

 

 

 

Depreciation of property, plant and equipment

 

50

 

50

 

-

 

-

Loss on disposal of property, plant and equipment

 

2

 

-

 

-

 

-

Movement due to exchange difference

 

14

 

-

 

-

 

-

Operating cash flows before movements in working capital

 

70

 

94

 

(140)

 

(144)

Decrease/(increase) in inventory

 

(6)

 

-

 

 

 

-

Decrease/(increase) in trade and other receivables

 

(990)

 

(1,609)

 

94

 

(7)

Increase/(decrease) in trade and other payables

 

931

 

1,477

 

46

 

151

Net cash generated from/(used in) operations

 

5

 

(38)

 

-

 

-

Interest paid

 

-

 

(8)

 

-

 

-

Income tax paid

 

(15)

 

(3)

 

-

 

-

 

Net cash used in operating activities

 

 

 

(10)

 

 

(49)

 

 

-

 

 

-

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

(7)

 

(2)

 

-

 

-

Interest received

 

-

 

-

 

-


-

 

Net cash used in investing activities

 

 

(7)

 

 

(2)

 

 

-

 

 

-

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

Loan to director

 

(239)

 

-


-

 

-

Repayment of bank loan

 

-

 

(158)

 

-

 

-

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

(239)

 

(158)

 

-

 

-

 

 

 

 

 

 

 


 

Net decrease in cash and cash equivalents

 

 

(256)

 

 

(209)

 

 

-


 

-

 

 

 

 

 

 

 


 

Cash and cash equivalents at beginning of period

 

 

288

 

 

497

 

 

3


 

3

 

 

 

 

 

 

 

 

 

Exchange difference

 

1

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

13

33

 

288


3

 

3

 



CONDOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

 

 

Group

Share capital


Share premium


Other reserves


Retained earnings


Total


£'000


£'000


£'000


£'000


£'000

Balance at 31 December 2012

55


1,201


114


(435)


935

 

Comprehensive income










Exchange difference arising on the translation of foreign operations

 

-


 

-


 

-


 

-


 

-

Profit for the year

-


-


-


21


21

Total comprehensive income for the year

-


-


-


21


21











Transfer of share option reserve

-


-


(22)


22


-

 

Balance at 31 December 2013

 

55


 

1,201


 

92


 

(392)


 

956











Comprehensive income










Exchange difference arising on the translation of foreign operations

 

-


 

-


 

19


 

-


 

19

Profit for the year

-


-


  -


50


50











Total comprehensive income for the year

-


-


19


50


69





















Balance at 31 December 2014

55


1,201


111


(342)


1,025

 

 

Company

Share capital


Share premium


Other reserves


Retained earnings


Total

 

 

£'000


£'000


£'000


£'000


£'000

Balance at 31 December 2012

55


1,201


49


(472)


833











Comprehensive income










Loss for the year

-


-


-


(144)


(144)

Total comprehensive income for the year

-


-


-


(144)


(144)











Share option reserve

-


-


(22)


22


-











 

Balance at 31 December 2013

 

55


 

1,201


 

27


 

(594)


 

689











Comprehensive income










Loss for the year

-

 


-

 


-

    


(140)


  (140)

Total comprehensive income for the year

-


-


-


(140)


  (140)











 

Balance at 31 December 2014

 

55


 

1,201


 

27


 

(734)


 

549

 

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2014

 

1      GENERAL INFORMATION

 

Asia Ceramics Holdings Plc is a company incorporated in Jersey under the Companies (Jersey) Law 1991. The company is governed by its articles of association and the principal statute governing the company is Jersey law. The company has an unlimited life and the liability of the members of the company is limited. The company is domiciled in Jersey and its registered office is 12 Castle Street, St. Helier, Jersey JE2 3RT. The principal places of the business of the Group's are at G/F, No 17 Wah Hong Building, 13 - 20 Hong Lok Street, Mongkok, Kowloon in Hong Kong and No 9 Zhangcuo Street, Tancheng Disctrict, Foshan City in People's Republic of China ("PRC").

 

The principal activity of the company is that of an investment holding company. The principal activities of its subsidiaries are set out in note 10.

 

These financial statements are presented in pounds sterling and rounded to the nearest thousand ('000).

 

2      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

2.1   Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (''IFRS'') issued by the International Accounting Standard Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

 

Asia Ceramics Holding Plc has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2014.

 

At the end of the reporting period, the Group has not adopted the following standards and interpretations as they are either not effective or not applicable to the Group's business.

 

Standards, amendments and interpretations (not yet endorsed by EU at 31 December 2014)

 

-               IAS 27 "Separate Financial Statements (2014)"

-               IAS 28 "Investments in Associates and Joint Ventures (2014)"

-               IFRS 9 "Financial Instruments"

-               IFRS 10 "Consolidated Financial Statements"

-               IFRS 12 "Disclosure of Interests in Other Entities"

-               Amendments to IAS 32 "Offsetting Financial Assets and Financial Liabilities"

-               Amendments to IAS 12 "Deferred Tax: recovery of Underlying Assets"

-               Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

-               Amendments to IFRS 10, IFRS 12 and IAS 27 "Investment Entities"

-               Amendments to IAS 36 "Recoverable amount disclosures for non-financial assets"

-               IFRIC 21 "Levies"

-               IFRS 9 "Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39)"

 

There are no other standards, amendments and interpretations in issue but not yet adopted that the directors anticipate will have material effect on the reported income or net assets of the group.

 

2.2     Basis of preparation

These consolidated financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

  

The Board has reviewed the accounting policies set out in these financial statements and consider them to be the most appropriate to the Group's business activities.

 

2.3     Going Concern policy

 

The financial statements have been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the necessity of liquidation, nor ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, management takes into account all available information for the foreseeable future, in particular for the twelve months from the date of approval of the financial statements. Based on the budgets prepared, management have a reasonable expectation that the group has adequate resources to continue its operational exercises for the foreseeable future and the group has adopted the going concern basis of accounting in preparing the financial statements.

 

2.4      Basis of consolidation

 

The consolidated financial statements incorporate the financial statements of the company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

 

The results of subsidiaries acquired or disposed of during the year are included in the Consolidated Statement of Comprehensive Income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

 

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

Business combinations

 

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The consideration transferred in a business combination is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquire. Acquisition related costs are generally recognised in profit or loss. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3: Business Combinations are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.

 

Goodwill arising on acquisition is recognised as an asset and initially measured as the excess of the consideration transferred over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceed the consideration transferred, the excess is recognised immediately in the profit and loss as a bargain purchase.

 

Non-controlling interests that are present ownership interest and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non- controlling interests' proportionate share of the recognised amounts of the recognised identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value, when applicable, on the basis specified in another IFRS.

 

 

2.5        Foreign currencies

    .

            Functional and presentational currency

 

         Items included in the financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates. The functional currencies of the operating subsidiaries are Renminibi (RMB), US Dollars (USD) and Hong Kong Dollars (HKD). For the purpose of the consolidated financial statements, the results and financial position of the Group is expressed in Pounds Sterling (£), for reporting in the United Kingdom, which is the company's presentational currency. 

 

         The presentational currency of the Group is Pounds Sterling and therefore the financial statements have been translated from RMB to £ and from HKD to £ at the following exchange rates:





Year end rates

Average rates




31 December 2014

£1 = RMB9.68

£1 = HKD12.10

 

£1 = RMB10.15

£1 = HKD12.78

31 December 2013

£1 = RMB10.01

£1 = HKD12.82

£1 = RMB9.62

£1 = HKD12.13




         Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-translation at period end exchange rates of the monetary assets and liabilities denominated in foreign currencies are recognised in profit and loss in the period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

 

            Group companies

 

         The results and financial position of the Group's foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentational currency are translated into the presentational currency as follows:

 

·      assets and liabilities of the Group's foreign operations are translated using exchange rates prevailing at the end of the reporting period;

        

·      income and expense items are translated at average exchange rates for the period unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expense items are translated at the rate on the dates of the transactions; and all resulting exchange differences are recognised in other comprehensive income and accumulated in equity (attributed to non-controlling interest as appropriate).

 

2.6        Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Domestic sales

Sales of goods are recognised when goods are delivered and title has passed and all revenue recognised is in respect of the sale of goods.

Export sales

Sales of goods are recognised when the goods cleared the customs and the title has passed.

           

2.7       Segment reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

 

2.8         Taxation

 

Income tax expense represents the sum of the tax currently payable and deferred tax.

 

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

 

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss, except when it relates to items charged or credited directly to equity, in which case it is recognised in equity.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

 

2.9        Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit and loss on a straight-line basis over the period of the lease.)

 

2.10      Share-based payment arrangement

           

            Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the services. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 16.

 

Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

 

2.11      Property, plant and equipment

Property, plant and equipment are stated in the consolidated statement of financial position at cost less any subsequent accumulated depreciation and any recognised impairment loss.

Cost includes purchase price and all directly attributable costs of bringing the asset to its location and condition necessary to operate as intended.

 

Depreciation is provided at rates calculated to write off the cost less estimated residual value from 0-10% of each asset over its estimated useful economic life as follows

            Furniture, fixtures and equipment                         2 - 5 years

            Motor vehicles                                                   5 years           

             Showroom and office renovation                                        5 years

                       

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (refer Note 2.18.2).

 

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the profit and loss.

 

Asset in the course of construction is stated at cost less impairment losses. Cost comprises direct costs of construction capitalised during the periods of construction. Capitalisation of these costs ceases and construction-in-progress is transferred to property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided for in respect of construction-in-progress until it is completed and ready for its intended use.

 

2.12      Investment in subsidiaries

 

            Investment in subsidiaries is stated at cost less provision for impairment.

 

2.13     Inventories

 

Inventories and work in progress are measured at the lower of cost and net realisable value.

 

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories and work in progress, other than those for which specific identification of costs are appropriate, is assigned by using the first-in, first-out (FIFO basis). When the inventories and work in progress are sold, the carrying amount of those inventories and work in progress are recognised as an expense in the same period as the revenue.

 

The amount of any write-down of inventories and work in progress to net realisable value are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of a write-down of inventories and work in progress are recognised as a reduction in the amount of inventories and work in progress recognised as an expense in the period in which the reversal occurs.

 

2.14      Financial instruments

 

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

2.15      Financial assets

 

Financial assets within the scope of IAS 39 are classified as either financial asset at 'fair value through profit and loss' (FVTPL), loans and receivables, held to maturity investments, or available-for-sale financial assets, as appropriate. 

 

The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation or convention in the market place concerned.

 

All arm's length purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset.  Such purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place concerned.

 

2.15.1   Effective interest method

 

This is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of debt instrument, or where appropriate, a shorter period, to the net carrying amount on initial recognition.

 

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified at FVTPL.

 

2.15.2   Financial assets at FVTPL

 

Financial assets classified as held for trading are included in the category financial assets at fair value through profit or loss.  Financial assets are classified as held for trading if they are acquired for the purpose of sale in the short term.  Derivative financial instruments are also classified as held for trading unless they are designated and effective as a hedging instrument. Financial assets at FVTPL are stated at fair value with any gains or losses arising on re-measurement recognised in profit or loss.

 

The Group does not designate any financial assets not held for trading as financial assets as fair value through profit and loss.

 

2.15.3   Held-to-maturity investments

 

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intent and ability to hold the assets to maturity.  Investments intended to be held for an undefined period are not included in this classification.  Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method less any impairment.  

 

2.15.4   Loans and receivables

 

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables (including trade and other receivables, bank balances and cash) are measured at amortised cost using the effective interest method less any impairment.

 

Interest income is recognised by applying the effective interest rate except for short-term receivables when the recognition of interest would be immaterial.

 

2.15.5   Available-for-sale financial assets

 

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories.  After initial recognition, available-for-sale assets are measured at fair value with gains or losses being recognised in other comprehensive income and accumulated under fair value adjustment reserve until the investment is derecognised or until the investment is determined to be impaired at which time the accumulate gain or loss previously reported in equity is included in the profit or loss. The fair value of investments that are traded in active market at the end of each reporting period is determined by reference to the relevant stock exchange's quoted market bid prices at the close of business on the reporting period date.  For investments where there is no active market, fair value is determined using valuation techniques.  Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

 

2.16     Financial liabilities and equity

                               

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.  Significant financial liabilities include trade payables and other payables.

 

Trade and other payables are stated initially at their fair value and subsequently measured at amortised cost suing the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

 

            Equity instruments are recorded at the fair value of consideration received, net of direct issue costs.

 

2.17     Borrowings

 

Borrowings are recognised initially at the proceeds received, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method.  Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the end of reporting date.

 

2.18      Impairment of assets

 

2.18.1   Financial assets

 

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting date. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investment have been affected.

 

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and present value of the estimated future cash flows discounted at the original effective interest rate.  An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

 

For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis that share similar credit risk characteristics.

 

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

 

The carrying amount of the financial assets is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

 

When available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

 

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases which can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

 

In respect of available-for-sale equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under fair value adjustment reserve. In respect of available-for-sale debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

 

2.18.2   Non-financial assets

 

The carrying amounts of the Group's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment.  If any such indication exists, then the asset's recoverable amount is estimated.  For assets that have indefinite lives, the recoverable amount is estimated at each reporting date.

 

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.  In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the asset.  For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or group of assets (the "cash generating unit").  The goodwill acquired in a business combination, for the purposes of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

 

An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount.  Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.

 

An impairment loss in respect of goodwill is not reversed.  In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.  An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.  An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that has been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

 

2.19      Cash and cash equivalents

 

Cash and cash equivalents include cash in hand, deposits, bank balances, demand deposits and other short term, highly liquid investments that are readily convertible to known amount of cash and are subject to an insignificant risk of changes in value.

 

2.20      Contingent liabilities and contingent assets

 

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.  It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

 

A contingent liability is not recognised but is disclosed in the notes to the accounts.  When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.  A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group.  Contingent assets are not recognised but are disclosed in the notes to the accounts when an inflow of economic benefits is probable.  When inflow is virtually certain, an asset is recognised.

 

2.21     Provisions

 

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefit will be required to settle the obligation, and a reliable estimate of the amount can be made.

 

2.22      Employee Benefits

 

Short Term Employee Benefits

 

Wages, salaries, annual leave and sick leave, social security contributions, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees.

 

Post-employment benefits

 

For the subsidiary of the Group in PRC, there are contributory retirement plans operated by the local government. The employees participate in the defined contribution retirement plan whereby the company is required to contribute to the schemes at fixed rates of the employees' salary costs. The company's contributions to these plans are charged to profit or loss when incurred. The company has no obligation for the payment of retirement and other post-retirement benefits of staff other than the contributions described above. 

 

Contribution made to the defined contribution retirement plan includes basic pension insurance in PRC which is charged to the profit and loss in the period to which they are related. 

 

Under the pension plan which the Group pays fixed contributions and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current or prior financial periods.  Once the contributions have been paid, the Group has no further payment obligations.

 

2.23      Capital Risk Management

 

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the loan disclosed in Note 18, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings.

 

 

2.24      Critical accounting estimates and judgements

 

The preparation of financial information requires management to make judgement estimates and assumptions that effect the application of accounting policies together with the reported amounts of assets, liabilities, income and expenses.

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates may differ from the related actual results.

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within future financial years are addressed below.

 

a)   Impairment of property, plant and equipment

The carrying value of the property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable in accordance with the accounting policies as disclosed in the relevant parts of note 2.11. If such indication exists, the recoverable amounts of the property, plant and equipment are determined on value-in-use calculations, which require the use of judgment and estimates.

 

b)   Depreciation

The Group's management determines the estimated residual value, useful lives and related depreciation charges for the property, plant and equipment with reference to the estimated periods that the Company intends to derive future economic benefits from the use of these assets. Management will revise the depreciation and amortisation charge where useful lives are different to previously estimated.

 

c)   Net realisable value of inventories

Net realisable value of inventories is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These estimates are based on the current market condition and the historical experience of manufacturing and selling products of similar nature. It could change significantly as a result of changes in customer demand and competitor actions in response to severe industry cycle. Management reassesses these estimates at each balance sheet date.

 

d)   Income tax and other taxes

The Company's subsidiaries that operate in the People's Republic of China are subject to corporate income tax in the People's Republic of China. Significant judgement is required in determining the provision for income taxes and other taxes. There are some transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and Value-added tax in the period in which such determination is made.

 

e)    Measurement of fair values

A number of the group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

            The group currently does not have a control framework with respect to the measurement of fair values. The significant unobservable inputs were provided by the management to their best knowledge.

When measuring the fair value of an asset or a liability, the management uses market observable data as far possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

·      Level 1: quoted prices (unadjusted) in active markets or identical assets or liabilities;

·      Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices);

·      Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 The information account the assumptions made in measuring fair values is included in the relevant notes.

 

 f)    Provisions for doubtful debts

 

Each debtor balance is assessed to determine recoverability of debt.  Provisions are made for all those debtors where evidence indicates that recoverability is doubtful.  Amounts are written off when they are deemed irrecoverable. Any changes to estimates made in relation to debtors' recoverability may result in material difference amounts being reported in the Group's financial statements.

 

g)             Share-based payment

 

The Group has share option schemes for certain suppliers.  Judgements and estimates are required in determining the share-based payment charge as an expense in the income statement.  The directors have used Black-Scholes model one of the most widely used models in valuing the share based payment charge. The directors are in the opinion that the model used has been adjusted to their best estimate in arriving at the charge. 

3.                     BUSINESS AND GEOGRAPHICAL SEGMENTS

 

For the purpose of IFRS 8, the chief operating decision maker takes the form of the Board of Directors. The Directors are of the opinion that the business of the Group comprises of a single activity, being the sale of ceramic products in PRC (including Hong Kong). In Sep 2011, the operating subsidiary in PRC obtained the export licence. Therefore the Group has expanded its sales overseas. At the meetings between the Directors, the income, expenditure cash flows, assets and liabilities are reviewed on a whole-group basis.

 

The Group has a policy to invest in prime locations in PRC. Sub-division of sales by type, function, by town or city of location in PRC is therefore of little significance in reviewing operations.

 

Based on the above considerations, there is considered to be one reportable business segment, the sale of ceramic products.

 

Internal and external reporting is on a consolidated basis, with transactions between Group companies eliminated on consolidation. Therefore the financial information of the single segment is the same as that set out in the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity and the consolidated statement of cash flows.

 

All the Group's non-current assets are located within PRC. No Group non-current assets are located in the entity's country of domicile.

 

  Geographical information: 

  Analysis of revenue by geographical area:


Group


Group


  2014


  2013


  £'000


  £'000





PRC (included Hong Kong)

Asia (excluded PRC & HK)

Europe

America

Africa

2,389

3,737

2,494

844

1,333


3,419

2,933

2,208

1,082

1,356


10,797


10,998

 

Information about major customers

 

Including in revenue sales of approximate £2.58 million (2013: £3.67 million) are revenues which arose from sales to the Group's three largest customers.

 

The Group export sales in PRC are exempted from value-added tax. In addition to this, approximate 9% of the value-added tax paid on purchases relating to export sales will be refunded by the tax authority.

 

4.        EXPENSES BY NATURE

                                                                       

Group


Group


Company


Company


  2014


  2013


  2014


  2013


  £'000


  £'000


  £'000


  £'000









Changes in inventories

Inventory costs

Employee benefit expense (note 5)

Depreciation

Operating lease payments

Legal and professional

(6)

8,749

431

49

84

103


1

9,203

451

50

111

116


-

-

42

-

-

98


-

-

42

-

-

102

Other expenses

1,417


952


-


-

Total cost of sales, distribution costs and administrative expenses

 

10,827


 

10,884


 

140


 

144

 

Included in legal and professional, audit fees of £26k (2013: £26k) for parent company and group auditors and £5k (2013: £5k) to overseas subsidiary auditors.

5.       EMPLOYEE BENEFIT EXPENSE

                                

                                                                       

Group


Group


Company


Company


  2014


  2013


  2014


  2013


  £'000


  £'000


  £'000


  £'000









Wages and salaries

Social security costs and welfare

381

50


414

37


42

-


42

-


 

431


 

451


 

42


 

42

 

                                                                       













  2014


  2013






  Number


  Number

The average monthly number of employees:








Management (including Executive Directors)

Sales and marketing staff





10

60


22

47

Total





70


69

6.       NET FINANCE INCOME /(COSTS)

                                

                                                                       

Group


Group


Company


Company


  2014


  2013


  2014


  2013


  £'000


  £'000


  £'000


  £'000

 

Bank interest paid

 

-


 

(8)


 

-


 

-

Bank charges

Foreign exchange (loss) / gains

Bank interest received

(22)

57

-


(16)

(48)

1


-

-

-


-

-

-


 

35


 

(71)


 

-


 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

7.      INCOME TAX EXPENSE





  2014


  2013





 £'000


  £'000








Current income tax charge




19


45

Adjustment in respect of current income tax of previous year




(34)


2

Deferred tax (Note 14)




(31)


(32)





 

(46)


 

15








The income tax expense for the year can be reconciled as follow:

 







Profit before taxation




4


36








Income tax calculated at 25%




1


9

Effect of income that is exempt from taxation

Effect of different tax rate of subsidiary operating in other jurisdiction




(22)

(15)


36

(23)

Adjustment in respect of current income tax of previous year




(34)


2

Unrelieved tax losses c/f




16


-

Unrelieved tax losses forfeited




35


22

Deferred tax arising from unused tax losses (Note 14)




(31)


(32)

Other adjustment




4


1





 

(46)


 

15

 

The applicable tax of the Group is derived from the consolidation of all Group companies applicable tax band on their domestic tax rates. The applicable tax rate for Asia Ceramics (HK) Ltd is 16.5% and 25% for all Chinese subsidiaries.

8.       EARNINGS PER SHARE

           

Basic profit per share is calculated by dividing the profit attributable to equity shareholders of the company by the weighted average number of ordinary shares in issue during the year.

 

Diluted profit per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares in the company are share options. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary rights attached to outstanding share options. The number of shares calculated above is compared with the number of shares that would have issued assuming the exercise of the share options.

 

 

 

 

 

 

 

2014

 

2013

 

 

£

 

£

Earnings

 

 

 

 

Earnings for the purposes of basic and diluted earnings per share being net profit/(loss) attributable to equity holders of the parent

 

 

50,072

 

 

21,522

 

 

 

 

 

Number of shares

 

 

 

 

Weighted average number of ordinary shares for the purposes of basic earnings per share

 

 

10,990,071

 

 

10,990,071

 

 

 

 

 

Effect of dilutive potential ordinary shares:

 

 

 

 

Share options

 

-

 

-

 

 

 

 

 

Weighted average number of ordinary shares for the purposes of diluted earnings per share

 

     

10,990,071

 

     

10,990,071

 

Profit / (loss) per share

 

 

 

 

Basic (pence)

 

0.46

 

0.20

 

 

 

 

 

Diluted (pence)

 

0.46

 

0.20

 

9.      PROPERTY, PLANT AND EQUIPMENT

          GROUP

 

 

Showroom

and

office


Fixtures and

fittings


Motor vehicles


Total


£'000


£'000


£'000


£'000

Cost








 

At 31 December 2012

212


4


34


250

Additions

Exchange differences

-

3


-

-


2

-


2

3









At 31 December 2013

215


4


36


255

Additions

Disposals

Exchange differences

-

-

7


2

-

-


5

(2)

2


7

(2)

9









At 31 December 2014

222


6


41


269

 

Accumulated depreciation
















At 31 December 2012

42


2


9


53

Charge for the period

43


1


6


50

Exchange differences

1


-


-


1









At 31 December 2013

86


3


15


104

Charge for the period

42


-


7


49

Exchange differences

5


-


1


6









At 31 December 2014

133


3


23


159









 








Carrying amount








 








At 31 December 2014

89


3


18


110

 








At 31 December 2013

129


1


21


151

 

 

10.     INVESTMENTS COMPANY

                                               













  2014


  2013






  £'000


  £'000









At beginning of the period

Investment in subsidiaries





1

-


1

-

 

At 31 December 2014





 

1


 

1

 

 

Details of the Company's investment in subsidiaries at 31 December 2014 are as follows:

 

Name of

subsidiary

Place of

incorporation

(or registration)

and operation

Proportion

of ownership

interest

%


Principal activities

 

 

 

 

Shenyang Louis Building    Materials Co., Ltd **

 

P.R. China

100

  

Establishment of ceramics retail shops in PRC and sale of ceramics products.

 

Foshan Louis Valentino Ceramics Co., Ltd **

P.R. China

100

  

Sale of ceramics products in PRC and export market

 

 

          ** Held by subsidiary company

11.     INVENTORIES

GROUP                                               













  2014


  2013






  £'000


  £'000









Finished goods





11


5

 

 





 

11


 

5

 

All inventories can be sold in the normal business operating process. No finished goods in the current year have been carried at fair value less costs to sell, same for previous year.

12.     TRADE AND OTHER RECEIVABLES


Group

2014


Group

2013


Company

2014


Company

2013


£'000


£'000


£'000


£'000

Non-current

Intercompany balances

 

-


 

-


 

1,118


 

1,211










-


-


1,118


1,211

Current








Account receivables

1,158


1,657


-


-

Payment on accounts

1,997


1,569


-


-

Other debtors

Amount due from related party (note 22)

1,022

385


21

363


-

-


-

-

Amount due from director (note 22)

329


94


-


-

VAT

141


104


-


-










5,032


3,808


-


-









          Intercompany balances are considered to be recoverable and are carried at their approximate fair value.

 

13.     CASH AND CASH EQUIVALENTS

 

 

 

 

Group

2014


 

Group

2013


 

Company

2014


 

Company

2013


£'000


£'000


£'000


£'000









Cash at bank and in hand

33


288


3


3










33


288


3


3

Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

14.     DEFERRED TAX

 

 

 

 

Group

2014


 

Group

2013


 

Company

2014


 

Company

2013


£'000


£'000


£'000


£'000









Beginning of financial year

32


-


-


-

Credited to profit and loss (Note 7)

33


32


-


-










65


32


-


-

 

The PRC companies have estimated losses of RMB2.5 million (2013: RMB1.3 million) available for carry forward against future trading profits. Deferred tax asset was computed at PRC corporation tax rate of 25%.

15.     SHARE CAPITAL AND SHARE PREMIUM

         

The company has one class of ordinary share capital which carry no rights to fixed income, any preferences or restrictions.

Share Capital

2014


2013


£'000


£'000

Authorised:




20,000,000,000 Ordinary shares of £0.005 each

100,000


100,000





Issued and fully paid:




10,990,071 Ordinary shares of £0.005 each

55


55

No movement of shares during the year.

Share Premium




2014


2013




 

£'000


£'000















Balance at 1 January and 31 December




1,201


1,201








 At 31 December 2014, the company had the following outstanding share options:








Number


Exercise price


Date of grant


Exercise period

206,229


£0.66


31.08.2010


31.08.2010 - 06.09.2015

 

 

16.     SHARE OPTIONS

 

On 31 August 2010 the company executed a deed poll constituting warrants to subscribe for ordinary shares in favour of WH Ireland. Pursuant to this instrument, WH Ireland will be entitled to subscribe for such number of Ordinary Shares as is equal to 2.5% of the fully diluted share capital of the company on Admission at an exercise price of £0.66 until the third anniversary of Admission. On 6 September 2013, the share option has not been exercised and has now been expired.

 

On the same date, the company granted warrants to Alexander David to subscribe for such number of Ordinary Shares as is equal to 2% of the company's issued Ordinary Share capital following Admission at an exercise price of £0.66 per Ordinary Share. The warrants are exercisable at any time following Admission until the fifth anniversary of Admission.

As at 31 December 2014, none of the above options had been exercised and the share option granted to WHI has been expired.

          Details of the share options outstanding during the year are as follows:

 

           

2014


2013


Average exercise price in £ per share


  Option 1


Option 2


 Average exercise price in £ per share


  Option 1


Option 2








 





At beginning of the year

0.66


-


206,229


0.66


257,786


206,229

Granted

-


-


-


-


-


-

Forfeited

-


-


-


-


-


-

Executed

-


-


-


-


-


-

Expired

-


-


-


-


(257,786)


-

 

At end of year

 

0.66


 

-


 

206,229


 

0.66


 

-


 

206,229

The weighted average estimated fair value of share option granted in the share option agreements dated 31 August 2010 are 8.72 pence for option 1 and 12.8 pence for option 2.

These estimated fair values were calculated using the Black-Scholes option pricing model. The model inputs were as follow:








  Option 2









Bid price







£0.58

Exercise price







£0.66

Expected volatility







25%

Expected dividend yield







-

Risk-free interest rate

 







2.75%

The expected volatility is based on the historical share prices to the management's best estimate. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restriction and behavioural considerations.

 

The management has discounted the bid price by 25% in the calculation as the management estimated that in order to place substantial block of shares in the market a discount in the region of 20% to 25% of bid price would be needed.

 

17.     OTHER RESERVES

Other reserves include translation reserves which arising from the translation of foreign operations into presentational currency, share option reserves and statutory reserves.

 

 

 

Group

2014


 

Group

2013


 

Company

2014


 

Company

2013


£'000


£'000


£'000


£'000









Share option reserve (note 16)

27


27


27


27

Statutory reserve

42


42


-


-

Foreign currency reserve

42


23


-


-










111


92


27


27

In accordance with the relevant regulations applicable in the PRC, companies now comprising the Group established in the PRC are required to transfer at least 10% of their statutory annual profits after tax to the statutory reserve until the balance of the reserve reaches 50% of their respective registered share capital. Subject to certain restrictions as set out in the relevant PRC regulations, the statutory reserve may be used to offset against accumulated losses of the respective PRC companies. The amount of the transfer is subject to the approval of the board of directors of the respective companies.

18.     BORROWINGS

 

Non-current

 

 

Group

2014


 

Group

2013


 

Company

2014


 

Company

2013


£'000


£'000


£'000


£'000









Loan from director (note 22)

501


500


501


500


















501


500


501


500

 

19.     TRADE AND OTHER PAYABLES

 

 

 

 

Group

2014


 

Group

2013


 

Company

2014


 

Company

2013


£'000


£'000


£'000


£'000









Trade payables

457


405


-


-

Payment received in advance

1,749


1,148


-


-

Bills payable

418


1,095


-


-

Other payables

1,086


112


72


26










3,710


2,760


72


26

 

 

 

 

 

20.     COMMITMENTS GROUP                                                                                                                                                                       

Capital commitments













  2014


  2013






  £'000


  £'000

Commitments for the renovation of office and showroom





 

-


 

-

 

                                                                                                                                               

Commitments under operating leases

 

At the reporting date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follow:

 






  2014


  2013






  £'000


  £'000

Land and buildings








Within one year





127


84

In two to five years





195


194

More than five years





-


-






 

322


 

278

 

Operating lease payments represent rentals payable by the Group for its office and showroom.

 

21.      ULTIMATE CONTROLLING PARTY

 

The ultimate controlling party of the Group is Dr Dingxin Pu, the majority shareholder and a director of the company.

22.      RELATED PARTY TRANSACTIONS

 

Transactions within the Group have been eliminated in the preparation of the financial information set out in this report and are not disclosed in this note. Balance with other related parties have been disclosed under the relevant notes.

 

i)          On 18 August 2010, Dr Dingxin Pu, the Chief Executive Officer and the majority shareholder of the company entered into a loan facility agreement with the company, whereby Dr Dingxin Pu agreed to make available to the company a loan facility of £500k. The loan is interest free and is repayable over five equal quarterly instalments commencing from 18 months following the date of the loan facility agreement. The loan was fully drawn down on 18 August 2010.

 

On 20 February 2014, the loan has extended the date of repayment to five equal instalments commencing on 31 January 2015 subject to the Company having sufficient funds to meet the repayments.

 

On 11 May 2015, the loan facility has further extended with the existing loan of £500,000 and by up to a further £250,000 to a total of £750,000. The loan is repayable on 31 December 2018 subject to the Company having sufficient funds and is extendable at the option of the Company by a further 3 years.

 

ii)          At 31 December 2014, included in other debtors an amount of HKD 755k due from (2013: HKD936.2k due to) Dr Dingxin Pu, Chief Executive Officer and majority shareholder of the company. This balance is unsecured, interest free and repayable on demand.

 

iii)         The company has entered into a relationship and non-compete agreement dated 31 August 2010 with Dr Dingxin Pu, Asia Ceramics (HK) Limited and China Ceramics Holdings Limited (''CCH'') pursuant to which Dr Dingxin Pu has agreed to certain conditions in respect of his control of the company. The agreement contains terms and conditions intended to ensure that the company will be at all times capable of carrying on its business independently of Dr Dingxin Pu and companies controlled by him, including CCH. This agreement also contains obligations to ensure that CCH, Dr Dingxin Pu and employees of companies controlled by him, do not compete with the business carried on by the Group in the PRC and Hong Kong.

 

iv)         The Company has entered into a brand licensing agreements dated 22 August 2010 with Dr Dingxin Pu, Asia Ceramics (HK) Limited and Shenyang Louis Building Materials Co., Limited pursuant to which Dr Dingxin Pu has granted an exclusive, irrevocable and royalty free licence to use the trademark "Baitao" and ''Bally''in the PRC and Hong Kong, and a non-exclusive licence throughout the rest of the world, until such time as the trademark is registered in the company's name.

           

v)          During the year, the Group made no sales (2013: £519k) to Louis Valentino Investment & Development Co. Ltd (''LVID''). Due to lack of export experience and expertise in dealing with international business, the Group requested LVID to assist its export business in the initial stage, and will gradually takeover by signing contracts with customers on its own name and receiving payments from customers directly. During this period, LVID has made no profit from its assistance. On 5 March 2013, the company has entered into an agreement with LVID and its parent company, CCH to formalise this relationship.

 

At the end of reporting period, the balance due from LVID is £385k (2013: £363k). LVID is company connected to Dr Dingxin Pu, a director and majority shareholder of the Asia Ceramics Holdings Plc.

Key management compensation

Key management includes directors of the company and its subsidiaries. The compensation paid or payable to key management for the employee services is shown on Directors' Report (Page 8).

 

23.     EVENT AFTER THE REPORTING DATE

There are no events after the reporting date to be disclosed.

 

24.     FINANCIAL INSTRUMENTS

 

A financial instrument is any contract that gives arise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

 

The Group's financial instruments comprise cash and cash equivalents, receivables, payables and borrowings.  The accounting policies and methods adopted, including the basis of measurement applied are disclosed above, where relevant.  The information about the extent and nature of these recognised financial instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows are disclosed in the respective notes above, where applicable.

 

         The Group does not enter into derivative transactions (such as interest rate swaps and forward foreign currency contracts) and it is, and has been throughout the period under review, the Group's policy that no trading in financial instruments shall be undertaken.

 

The following table details the carrying amounts and fair values of financial assets and financial liabilities:

 

GROUP

Carrying value


Fair value


2014

£'000


2013

£'000


2014

£'000


2013

£'000

Financial assets








Cash and cash equivalents

33


288


33


288

Trade and other receivables

5,032


3,808


5,032


3,808










5,065


4,096


5,065


4,096

 

Financial liabilities



 




 

Trade and other payables

3,710


2,760


3,710


2,760

Borrowings

501


502


501


502


 

4,211


3,262


 

4,211


3,262









COMPANY

Carrying value


Fair value


2014

£'000


2013

£'000


2014

£'000


2013

£'000

Financial assets








Cash and cash equivalents

3


3


3


3

Trade and other receivables

-


-


-


-










3


3


3


3

 

Financial liabilities








Trade and other payables

72


26


72


26

Borrowings

501


500


501


500










573


534


573


534

 

The Group's activities expose it to a variety of financial risks; currency risk, credit risk, liquidity risk and interest rate risk.  These risks are limited by the Group's financial management policies and practices as described below:

 

Credit Risk

 

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers and investment securities.

 

The Group has credit risk management policies in place and exposure to credit risk is monitored on an ongoing basis.  Management generally adopts conservative strategies and tight control on credit policy.  The Group has limited the amount of credit exposure to customers.

 

The average credit period on sales is 30 days. No interest is charged on the trade receivables. Trade receivable due from LVID, the connect party, is guaranteed by Dr Pu personally.

 

Before accepting any new customer, the Group will check the credit worthiness of any new customers. No provision for doubtful debts was made during the year.

 

The trade and other receivables do not contain impaired assets as they are still considered recoverable by reference to no default experience so far. In determining the recoverability of trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.

 

The credit risk on cash and cash equivalent is limited because the counterparties are banks with high credit ratings recognised by international credit rating agencies.

 

The Group does not hold any collateral as security.

 

Liquidity risks

 

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.  The Group's approach to managing liquidity is to ensure as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

 

To ensure liquidity, the Group maintains sufficient cash and cash equivalents on demand to meet its obligations as and when they fall due.

 

Market risks

 

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instrument.  The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising return on risk.

 

Foreign currency exchange risks

 

The Group does not hedge its foreign currencies.  Transactions with customers and vendors are mainly denominated in Hong Kong Dollars (HKD), Chinese Yuan (RMB) and US Dollars (USD).  Management considered that the currency exposure arising from these transactions is not significant to the Group.  Transactions with Group companies denominated in Pounds Sterling (£), which are exposed to foreign currency translation risks, are not significant to the Group.  The Group has bank accounts in HKD, RMB, USD and £ in order to mitigate against exchange risks.

 

The Group's exposure to foreign currency risk was as follow:

 

2014

HKD

£'000


RMB

£'000


USD

£'000


Others

£,000


Total

£'000

 

Trade and other receivables

23


3,657


1,320


17


5,017

Cash and cash equivalent

9


11


8


2


30

Trade and other payables

11


731


1,635


-


2,377












43


4,399


2,963


19


7,424

 

 

2013

HKD

£'000


RMB

£'000


USD

£'000


Total

£'000

 

Trade and other receivables

671


1,564


1,560


3,795

Cash and cash equivalent

29


218


36


283

Trade and other payables

107


1,031


1,122


2,260










807


2,813


2,718


6,338

 

Sensitivity analysis

 

A 10% strengthening of £ against the following currencies at the reporting date would have increased/(decreased) equity and profit or loss by amounts shown below. This analysis assumes that all variables, in particular interest rates, remain constant.

 


2014


2013


Equity

 


Effect in profit or (loss)


Equity


Effect in profit or (loss)


£'000


£'000


£'000


£'000









HKD

(4)


(4)


(73)


(73)

RMB

(400)


(400)


(256)


(256)

USD

(269)


(269)


(247)


(247)

Others

(2)


(2)


-


-

 

 

A 10% weakening of £ against the following currencies at the reporting date would have increased/(decreased) equity and profit or loss by amounts shown below. This analysis assumes that all variables, in particular interest rates, remain constant.

 


2014


2013


Equity

 


Effect in profit or (loss)


Equity


Effect in profit or (loss)


£'000


£'000


£'000


£'000









HKD

5


5


90


90

RMB

489


489


313


313

USD

329


329


302


302

Others

2


2


-


-

 

Cash flow and fair value interest rate risks

 

The Group's primary interest rate risk relates to interest bearing debts.  Investments in financial assets are mainly short term in nature and are not held for speculative purposes but are placed in fixed deposits.

 

The Group manages its interest rate exposure by maintaining a fixed rate borrowing to mitigate the risk associated to interest rate fluctuation.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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