Good morning my name is Felicia and I will be your conference operator today. At this time I’d like to welcome everyone to the China Ceramics Second Quarter 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the conference over to David Rudnick. Please go ahead sir.

Thank you Felicia. Good morning ladies and gentlemen and good evening those of you who are joining us from China. Welcome to China Ceramics second quarter 2014 earnings conference call. With us today are China Ceramics Chairman, Chief Executive Officer Mr. Jia Dong Huang and Chief Financial Officer, Mr. Edmund Hen. Before I turn the call over to Mr. Huang, may I remind our listeners that during this call, management’s prepared remarks contain forward-looking statements which are subject to risks and uncertainties and management may make additional forward-looking statements in response to your questions. Therefore the company claims protection of the Safe Harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today. Refer to more detailed discussion of the risks and uncertainties in the company’s filings with the Securities and Exchange Commission. In addition, any projections as the company’s future performance represent management’s estimates as of today August 18, 2014. China Ceramics assumes no obligation to update these projections in the future as market conditions changed. And now, it’s my pleasure to turn the call over to China Ceramics’, Chairman, CEO, Mr. Jia Dong Huang and China Ceramics’, CFO, Mr. Edmund Hen. Precept Investor Relations [indiscernible] will be translating Mr. Huang. Mr. Huang, you may proceed.

Thank you David. On behalf of the company I’d like to welcome everyone to our second quarter 2014 earnings conference call. We’re pleased to report improved revenue and gross profit performance for the second quarter as compared to the same period a year ago consistent with the more normalized operating environment. Revenue increased 21% from the second quarter while gross profit grows 9%. The second quarter also saw 11% increase in sales volume and 9% rise in average selling price as compared to the second quarter of 2013. Higher advertising cost to promote newly developed ceramic tiles and losses attributable to foreign currency agreements impeded our profitability in a quarter. As stated previously I, the company’s largest shareholder, agreed to assume these agreements. As a result, the company will not be required to fund any losses related to these agreements and it will neither suffer any future liabilities arising under those agreements nor realize any benefits arising under those agreements. In the second quarter, we maintain to reduce either addition of existing operating strength capacity in order to just market environment a lower operating cost. We’re currently utilizing plant production facilities capable of producing 43 million square meters of ceramic tiles per year out of our total annual production capacity of 72 million square meters of ceramic tiles. This was 54% increase over what was utilized at this time last year. We hope to bring additional capacity online going forward as our business sector continues to improve. In addition to the improved market environment, we believe that our good relationships with our customers account for our volume and price increases in the second quarter and then our marketing will enable us to continue to penetrate tier 2 and tier 3 market the solid results in the quarters ahead. While our business sector continues to be highly competitive, our brand name recognition and reputation for quality and services has enabled us to raise our average selling price over the past year. The urbanization and geographic trend in China, a long-term phenomena that we believe will lead to rising future demands for our products even as the real estate and construction environment fluctuates from time-to-time. Recent government proposals promoting urbanization as vital to continued domestic economic growth should improve the macroeconomic conditions under which we operate and enable us to expand our footprint into new geographical urban areas. We continue to be strategically positioned as a producer of high-end ceramic tiles and we will continue to innovate and offer superior product mix to our customer, so as to sustain our competitive advantage. With that I would like to turn over the call to the company’s Chief Financial Officer, Mr. Edmund Hen, who will discuss the company’s earnings results in more detail. Thank you.

Thank you, Mr. Huang. I will move onto a more detailed discussion of our financial results for the second quarter ended June 30, 2014. Our revenue for the second quarter ended June 30, 2014 was RMB 268.6 million or US$43.3 million, an increase of 20.6% from second quarter of 2013. The sales volume of ceramic tiles in the second quarter was 9.2 million square meters, an increase of 10.8% as compared the sales volume in the year ago quarter and our average selling price or ASP rose 9% as compared to the same period a year ago. The rise in ASP reflects a more normalized market environment. As notified by Mr. Huang, the continuous trend of pricing increases that have occurred since the fourth quarter of 2012 where we temporarily reduced pricing on certain of products to retain market position. Gross profit for the second quarter ended June 30, 2014 was RMB 24.2 million or US$3.9 million, an increase of 9% from the second quarter of 2013. The year-over-year increase in gross profit was due to a rise in both sales volume and ASP. Our gross profit margin for the second quarter was 9.0% compared to 10% for the same period of 2013. This slight decrease primarily caused by an increase in material and labor costs. Profits before taxes for the second quarter of 2014 was RMB 3.2 million or US$0.5 million, as compared to RMB 9.9 million or US$1.6 million in the second quarter of 2013. The year-over-year decrease was due to a rise in advertising fees associated with newly developed strong accounts and on realized losses on derivative financial instruments. Net profits for the second quarter of 2014 was RMB 0.7 million or US$0.1 million as compared to RMB 9.6 million or US$1.5 million for the same period…

(Operator Instructions). And your first question comes from the line of Howard Flinker with Flinker and Company. Howard Flinker - Flinker & Company: In the release of the derivatives will that add any cash to the balance sheet of China Ceramics?

No, the derivatives of the instrument has already transferred to Mr. Huang already. So we will not incur any future losses. Howard Flinker - Flinker & Company: And we’ll not release any cash to turn the ceramics too?

No. Howard Flinker - Flinker & Company: Okay. Second question. I am not sure about this. You said you raised prices 5%, does that 5% included the second quarter or is that subsequent to the second quarter?

It’s subsequent to the second quarter. Howard Flinker - Flinker & Company: Okay. And the final question is I am curious why did Huang Jia Dong take the liability, I have never seen that before for the derivatives.

This is because the derivative product is now a good five years and a lot of them have the company’s suffer, he arranged and [indiscernible] by which he will pick any further loss by himself and should be assured that the company learned from this event and that auditions decision making confidence (Ph) and transparency that would be better for it. Howard Flinker - Flinker & Company: It wasn’t a good idea in the beginning but I’m still curious never seen anybody take responsibility for a corporate mistake, what was the reasoning of Huang Jia Dong to absorb that very large loss?

May I have your question again? Howard Flinker - Flinker & Company: Sure, you said Huang Jia Dong took it because it was a corporate mistake but still corporate mistakes happen all the time and I haven’t seen Chief Executives take the loss themselves, what was going through Huang Jia Dong’s mind when he said I’m going to transfer the loss to me instead of to the company?

At the first place, what we noticed that RMB has [indiscernible] since 2005. Howard Flinker - Flinker & Company: Alright.

And initial decisions to have this foreign exchange contract [indiscernible] the company would benefit from the strong RMB . And actually we had a cash gain of US$0.5 million at the end of 2013 and that was recorded in the financial results. But the RMB started to depreciate against the U.S. dollar since the February, early of this year and that was totally a surprise for us. Howard Flinker - Flinker & Company: I’m taking it to next step I’m guess though, that Huang Jia Dong decide that he was responsible for this mistake and that’s why he took the loss themselves starting in the third quarter of this year?

That’s in total interest of the public shareholders [indiscernible] the company suffer. Mr. Huang arranged a mechanism by which he’d personally pick up on the future losses himself related to this contract. Howard Flinker - Flinker & Company: Okay.

Your next question comes from the line of James Kahn with Oppenheimer.

Good morning, I applaud the decision to pick the loss himself instead of giving it to the shareholders and I think it’s a wonderful gesture of honesty. I just want to clarify one thing based on the last question; does this mean that the 11 million that was lost in the last quarter is coming back or just that no future losses growth occur?

This is a future loss that maybe occurred.

So the loss, so even though he is guarantying against future losses, the past lost is still there and still company to the tune of $11 million, is that correct.

No, the past loss has already transferred to the Mr. Huang.

Okay, so that means money is coming back or I mean what actually happened, I’m confused about the trends, you said that there was no cash coming into the balance sheet. So, you just take a little liability of thing removed does that correct?

Correct.

Okay, and my second quarter is, in Grant Thornton -- in the letters that they sent to you the second letter said that you did not address the question of the difference between the taxes that you declared you had paid on your return with Grant Thornton and the taxes that the local authorities collected, can you please explain the discrepancy?

The descriptions followings are specific in terms the differences and the outcome -- and we tend to be as transparent as possible. I’d like to point out that none of this issued process will be an issue of [indiscernible] Hong Kong we are not only comfortable with our procedures but they made no adjustment in the audit to our financial years 2011 and 2012. And has a no difficulties with 2013 audit in some. We communicated to Grant Thornton that there was no problem with our financial statement and there were not [indiscernible] as there is still outstanding litigation. The prudent thing to do is to refer you back to our public filings in terms of the details and not copying this detail further in the call.

There is still outstanding litigation you’re seeing and that’s why you can’t explain the difference between the two numbers, is that right?

You may refer back to our public filings and that is where we express it in terms of difference and outcome.

Okay. In closing I just want to say that you went through a difficult period where sales were down and now things seem to be turning and I’m happy about that. Thank you.

Thank you very much.

(Operator Instructions) And your next question comes from the line of John [indiscernible] with Private Investor.

Hello everybody. Thank you for hosting the call and congratulations on getting back to a more normal situation. Could you share some comments about demand for some the tile types where your entire margins in the past like the rustic tiles, ultrathin tiles and extra-large size tiles?

Yes, for the new titles we see that some of this high price tiles has a more demand that is coming back and also we found these ultrathin tiles is still our major contribution from the revenue. And also you can see that because our high price tiles is selling back in the second quarter we have small profit for the second quarter and we have the trend to increase our selling price 5% to 10% in third quarter.

Okay. Thank you for that information. Have you developed any sales through your relationship with China State Decoration?

Yes, we’re still working with them, but this is state-owned company bring through their success channel we need to go through a lot of relationship background in China and we are happy to do business with them and we’re still following some products from them.

Okay. Have you developed any new exclusive or primary supply relationships with real estate developers?

Yes, we always have some new reference, for example, we have already become exclusive [indiscernible] and also [indiscernible] we also supply some goods to, some products to the [indiscernible] referring China.

So will you be the exclusive supplier to [indiscernible] one of the largest developers in China.

Yes, we are one of the exclusive supplier for the ceramics to them.

Okay. Thank you very much for that information.

Thank you.

(Operator Instructions) Thank you. Your next question comes from the line of Dwayne Robert (Ph) with SHS Fund.

Good morning. Can you give us a snapshot of what the housing market looks like right now China?

The housing market right now is still relatively slow compared to two or three years ago and we see building and construction become more stable rate since one and half years ago and we believe that after this period the building market we will have a steady growth but that maybe happen next year or middle of next year. And now it’s still at a very stable and quite stage.

So from your analysis you are saying that the housing market is basically fast dropping at this point?

In terms of housing market, we found that for the major cities, the prices still stand a very high price already but for some tier 2 and tier 3 cities, the supply of the housing is in excess of demand, so the housing price just stay at a very stable very stable rates right now [indiscernible] has some growth or decrease in price.

And so at one point, there were cities growing out nowhere basically in China. The people or where the government will go in and just a develop basically a whole new city is that still happening or has that slowed down or what’s going over there right now?

May I have your question again?

Yes. At one point, cities were growing really fast; multiple cities were growing really fast in Mainland China. A lot of people were moving from what -- a lot of people were moving from the countryside into these major cities. Do you still have growth there or have people stopped moving from the countryside into the major cities?

Actually it happens always. And even now a lot of people from the rural area would like to move to the urban area. But the government has some spending on the rural area to give up some kind of a local city from this area. So I think the movement from the rural area to urban area in terms of the growth rate is not such as 10 or 20 years ago.

One of the reasons why people will move from countryside to the major cities is because of jobs; in which their housing market will? What do you think is analysis what is the job market like right now in China?

It’s still pretty good especially in the major cities but for some traditional business for the [indiscernible] intensive business I think the growth rates will be much lower than before.

All right, that’s good analysis. So what percentage of the tile market in China do you have?

The building market always has ups and downs and tile business is still very popular nowadays in China and a lot of this housing building and some commercial building still would like to use tiles in China.

So what percentage of the tile market do you guy own your company owns?

The tile market?

What percentage does your firm own, how much like you guys have 10%?

We believe we have about 65% of the markets in China.

Are there acquisition opportunities for you guys to look forward then?

We always look into some good business and we are still looking for some potential business to our firm. We will have -- we will take it seriously on this topic.

Any acquisition opportunities outside of the Mainland?

Of course, there’s always the opportunity. But before we acquire this material (Ph) new business we have to do our own due diligence and we [indiscernible] for some work before we make a decision.

(Operator Instructions). And there are no further questions as this time. I would like to hand the conference over to Mr. Rudnick for any closing remarks.

On behalf of the entire Management team, we’d like to thank all of you for your interest and participation in this call. This concludes China Ceramics second quarter 2014 earnings call. Thank you all very much.