David Rudnick – IR Jia Dong Huang – CEO Edmund Hen – CFO Paul Kelly – Chairman

Steve Martin – Slater Capital Management Chris White – Greenstone

Good morning my name is Melissa and I will be your conference operator today. At this time, I would like to welcome everyone to the China Ceramics Fourth Quarter and Fiscal Year End 2012 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) I would now turn the call over to David Rudnick of CCG Investor Relations. You may begin your conference.

Thank you, Melissa. Good morning ladies and gentlemen, and good evening to those of you who are joining us from China. Welcome to China Ceramics fourth quarter and fiscal year end 2012 earnings conference call. With us today are China Ceramics’, Chairman and Chief Executive Officer, Jia Dong Huang and the Chief Financial Officer, Mr. Edmund Hen. Before I turn the call over to Mr. Huang, I remind all listeners that during this call management’s prepared remarks contains forward-looking statements which are subject to risk 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’s contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from those discussed today and we refer you to a more detailed discussion of the risk and uncertainties with company’s filings with the Securities and Exchange Commission. In addition, any projections as the company’s future performance represents management’s estimates as of today, April 24, 2013. China Ceramics assumes no obligation to update these projections in the future as market conditions changed. To supplement its financial results presented in accordance with IFRS, management may make reference to certain non-GAAP financial measures which the company believes provide meaningful additional information to understand the company’s performance. The statement reconciling any non-GAAP measures to nearest GAAP equivalents can be found on the earnings press release earlier today. And now, it’s my pleasure to turn the call over to China Ceramics Chairman and CEO, Mr. Jia Dong Huang; and China Ceramics CFO, Mr. Edmund Hen. CCG’s Mabel Zhang who will be translating for Mr. Huang. Mr. Huang, you may proceed.

Thank you, David. On behalf of the company I would like to welcome everyone to our fourth quarter and fiscal year end 2012 earnings conference call. We are pleased to report record strong financial results for the full-year 2012 and despite a challenging marketing environment that has progressed in our structure over the last 6 months of the year. We were able to generate CD revenues for the full-year 2012 in profitability which is relative to 2011. And we have communicated through the market last year. We expected that the general slowdown of the construction industry in China will have a negative impact on our revenues in the fourth quarter. In the fourth quarter of 2012, we see a substantial decrease in the sales volume of ceramic tiles relative to the fourth quarter of 2011. Our average selling price also fueled in the quarter from the year ago, first quarter due to intensified pricing competition in our sector. Despite the fourth quarter it’s a disappointing result, we believe that operating fundamentals of our business are sound. We are cautiously optimistic about an improved outlook in the second quarter of 2013 with a pick-up in product demand and a rebound in pricing. In order to adjust to the current market conditions and reduced operating costs, (inaudible) capacity during the fourth quarter. We are currently utilizing production facilities capable of producing 46 million square meters per year about a total annual productivity – productive capability of 70 million square meters. We will continue to monitor the macroeconomic environment and that was prudent in terms of utilizing our full production capacity. We applied this cost to our ceramic tile product in the fourth quarter in order to compete head-on, with competitors and retain our customers and market share. Although the average of selling price for our ceramic tiles in the first quarter declined 13.8% from the year ago quarter. We anticipate return to a more normalized pricing environment, whereas the business conditions in our building material sector improved. We are confident that urbanization and demographic trends in China are a long-term phenomenon that will lead to raising future demands for our products as current real estate fluctuations moderate over time. It continue to be strategically positioned as a producer of high-end ceramic tiles that becoming standard in many new construction and development project in China. Even as our – even as we adapt measures in the short-term enable us to reach our customers more effectively. We are confident that our branding and positioning enabled us to successfully execute upon our long term strategies, which is will be a prominent producer of specialized building materials products. Now at this time, 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 and thank you Mabel. I will now move on to a more detailed discussion of our preliminary financial results for the fourth quarter and full year ended December 31, 2012. Our revenue for the fourth quarter 2012 was RMB 245.3 million or US$40 million down 39.3% from RMB 404.5 million or US$63.8 million in the fourth quarter of 2011. The year-over-year decrease in revenue was due to a 29.8% decrease in the sales volume of ceramic tiles to 8.7 million square meters in the fourth quarter of 2012 from the fourth quarter of 2011. As well as a 13.8% decrease in the company’s average selling price versus the comparable year ago quarter. We attribute the reduced sales volume in the quarter to the challenging business conditions in China’s construction sector and the decrease in our average selling price to competitive pressures and our strategy to hold our market position. Gross profits for the fourth quarter of 2012 was RMB 29.3 million or US$4.9 million as compared to RMB 139.4 million or US$21.9 million for the fourth quarter of 2011. The year-over-year decrease in gross profit was due to lower sales volumes and the decrease in average sales price of our ceramic tiles in the most recent quarter. Our gross profit margin for the fourth quarter was 12% compared to a 34.5% for the same period of 2011, was caused primarily by decrease in average selling price of ceramic tiles in the quarter. Profit before taxes for the fourth quarter of 2012 was RMB 18.6 million or US$3.2 million as compared to RMB 125.4 million or US$19.7 million in the fourth quarter of 2011. Net profit for the fourth quarter of 2012 was RMB 13.3 million or US$2.3 million as compared to RMB 92.2 million or US$14.5 million in the same period of 2011. The year-over-year decrease in net profit was the result of lower gross profits in the period. Earnings per fully diluted share were RMB 0.65 or US$0.11 for the fourth quarter of 2012. That’s compared to RMB 4.51 or US$0.71 in the comparable quarter in 2012. EPS in the fourth quarter of 2012 and 2012 was completely using 20.4 million shares. Now on GAAP net profits which is a quote share based compensation expenses was RMB 14.6 million or US$2.5 million in the fourth quarter of 2012 as compared to RMB 97.5 million or US$15.3 million in the fourth quarter 2011. And non-GAAP earnings per fully diluted share which is quota share based to compensation expenses was RMB 0.71 or US$0.12 in the fourth quarter of 2012 as compared to RMB 4.77 or US$0.75 in the same period of 2011. For the full-year and December 31, 2012 revenue was RMB 1444.9 million or US$230.7 million, a decrease of 3.1% that’s compared to fiscal year 2011. Gross profit was RMB 381 million or US$60.8 million down 18.5% from 2011. Gross margin for the full year 2012 was 26.4% compared to 31.3% for 2011. Net profits for the year was RMB 243.6 million or US$28.9 million down 17.2% from the full-year 2011. Non-GAAP net profits which exclude share based compensation expenses was RMB $249.5 million or US$39.8 million a decrease of 20% from 2011. Fully diluted EPS for the full-year 2012 was RMB 11.93 or US$1.19. On a non-GAAP basis fully diluted EPS was RMB 12.21 or US$1.95. Turning to our balance sheet, as of December 31, 2012 we had cash and bank balances were RMB 89.4 million or US$14.4 million, compared to RMB 42.1 million or US$6.7 million as of December 31, 2011. The decrease in cash and bank balances over the year was a result of sustained probability and a modest LIFO capital expenditure during the year. Our total debt is RMB 60 million or US$9.6 million as of fiscal year end 2012. (inaudible) during the year RMB 185 million or US$29.4 million as of fiscal year 2011. As of December 31, 2012, we had an inventory turnover 101 day compared to 84 days as of December 31, 2011. The increase in inventory turnover reflects the decrease in sales volume of ceramic tiles, which we started in slower moving or finished goods at year end 2012. Moving on to a further business review and outlook has been testified our CEO Mr. Huang, as a result of slowdown in China’s construction and others et cetera. We experienced a construction in both our sales volume and average selling prices in the fourth quarter 2012 relative to the comparable year third quarter as well as the third quarter in 2012. The company’s sales volume decreased 29.8% in the fourth quarter in 2012 as compared to the year ago quarter in our average selling price decrease to 13.7% as compared to fourth quarter in 2011. Given the market environment and intensified competition in the fourth quarter we increased our sales effort and that’s a temporary strategy to reduce the selling price of our ceramic tiles product in order to retain our market position. We have been strategic in terms of those products from which we have temporarily reduced the prices. In order to avoid widespread – factory pricing environment and (ianudible) of our main brand for than a more normalized operating environment returns. However, we believe that we need to conquer the action of ceramic tiles producer for an entire portion of our market and (ianudible) with in order to protect our business, retaining our customer and defend our market share. We believe that as research condition in our factory could be tougher. The overall pricing environment improvement and held us to retain our historical cost margin effort. Important we believe that such as price decrease as well as inelastic such as the pricing environment have changed due to this slowdown in the concession incentive and competitive prices reduction did not result in an increase in sales volume. Therefore, we felt that as AFG increases in the months ahead, we will return to a normalized volume level as the constructions set is stabilized. Given the continued challenging climates we are currently utilizing science facilities can produce 40-60 million square meters of ceramic tiles annually out of our productive capacity of 72 million square meters. This represents a decrease in plants capacity utilized from what we used in the third quarter in 2012, where we operate the plant’s capacity have a total of producing 56 million square meters of ceramic tiles annually. In terms of our outlook for 2013, the company experienced a reduction in this space such as likely to result in a decline in revenue for the first quarter in 2013 relative to the year ago period. Our (ianudible) in the first quarter of 2013 is approximately RMB 141.9 million or US$22.8 million which will represent a decrease in revenue for the first quarter of 2013 as compared to revenue take off in the first quarter of 2012. This year-over-year comparison has changed from previous quarter which had a generally so strong positive year-over-year comparison. Our backlog is an indicator of distance in the next quarter under normal circumstances so this can change as a result of unforeseen business conditions. The company estimated the sales volume of ceramic tiles in the first quarter of 2013, it will approximately 6.1 million square meters as indicated in our (ianudible) for this to the market last September. The guidance has already decline in our fourth quarter revenues. We continue to be different reduction in our backlog as to do with a general slowdown in the construction industry that has suffered in China. As our customer we are deferring order and have been waiting to start new projects. Many developers have been waiting for the new government to come in, a new guideline and incentive by the new leadership that’s related to the housing and construction industry. As indicated in the mornings earnings press release, we believe that our average selling price to begin to normalize by the second quarter of 2013. We experienced an increase in our average selling price in February and March from the lows that occurred in the December to January time frame, where we reduced our average selling price in order to meet competitors’ sharp discounting and retain market share. Further, recent data from April shows a return to a lesser discount price environment, which was in place prior to December of 2012. The fundamental growth trend for housing in China is still strong. You have heard that news that the government is pursuing policies to migrate speculations of expensive real estate in some big cities based on our proprietary research that’s all our public information. With that for the full year 2013 rapid development in construction activity through the midpoint even exceeds the year 2012. Further, we are confident that we can be relatively nimble and cost effective in terms of retaining capacity online to meet the sectors turnaround in growth and demand. In order to retain our competitive edge, we’ll maintain its currently wide range of product offerings and continue to augment it with new products from its research and development program, which has the potential to result in products that realize higher margins. The company believes that a core competitive advantage is its ability to innovate and introduce new products into the product mix that offers to U.S. customers. China Ceramics new plants, facility also have new design and production capability as well as the ability to operate more efficiently. We are optimistic as to the long-term prospect of our business and plan of go on working even closer with our customer during this challenging time in order to take advantage of the opportunity available to us. Before we begin the Q&A, I would like to mention a couple of other items. As many of you are aware, although we are reporting within SEC guidelines, there was a delay in announcement – announcing our fourth quarter and fiscal year end 2012 results in terms of what have been – has been our typical practice. Since our market capitalization has been somewhat below our net book value and IFRS standard because the company to access the advantage, the impairment to the book value of our asset has occurred. Since the market price of our stock did not significantly increase up to year end, we engaged an appraisal firm to provide appraisal report during the month of March after review of this report by the company and the auditor, he was concluded that and the impairment adjustment was not required to be reckon. This process need to address this issue caused the delay in announcing our 2012 results. Also as previously indicated, we’ll be paying a semi-annual cash dividend of $0.10 per share payable on July 13, 2013 and January 14, 2014, with record dates of June 13, 2013 and December 13, 2013, respectively. With that, we would like to open up the call to any questions pretending to our fourth quarter and full year 2012 financial and operating performance. Operator?

(Operator Instructions). Your first question comes from [Howard Flinker].

I have two questions. One do I understand that your prices are now back to where they were before the discount? And second, volumes are increasing, orders are increasing they are still somewhat below last year’s orders?

We’re on the way to get back to the normal level of the average selling price. And we’re very near to the price before we discount right now. And for the second question is that, the volume is still probably as heavy and is still lower than the same period last year at this moment.

And approximately how much are the orders below last year at this time and while they are recovering?

We’ve no final figure yet, yet it is still early. Well, probably you’ll be noticed during the first quarter of 2012 I think.

Do you not have those numbers yet?

We do not have those numbers yet.

Okay. Thank you.

Okay.

And your next question comes from Steve Martin with Slater Capital Management. Steve Martin – Slater Capital Management: Hi, guys. I guess we’re all a little disappointed because you insisted on adding all that capacity when we urged you not to and now you are not using it. What I would like to understand is why with your volume down as much as it is and your projected revenue is down as much as they are, your inventory and receivables are flat and should be down and your payables are down and so it seems you are paying your vendors but you are not getting paid from your customers?

Yes for the – the actual relative with that (inaudible) are difficult moments. We just want to give some support to our customer. And we extended some of the terms to more than 90 days. And at the same time, we also, we still need some close relationship if I was supplier so we still pay them on high. It’s the reason why our economy is difficult and recently it looks flat compared to the last period. And for the, I think for the capacity, we’ve increased that for the past few years and so we’re preparing for growth but unfortunately the downturn for the Chinese ethylene market, we just need to wait for – wait for a while. And as you can see, we did not have much capital expenditure during the past year. Steve Martin – Slater Capital Management: Right. Now let’s go back, can we go back to the inventories for a second if you are – if your backlog is only US$22 million and you produce inventories to order why are your inventories more than twice your backlog?

First of all because some of our customers just also have slowdown in business and lots of them have – some of them have delayed their – picking up for the inventory, for the goods. It’s a reason why you can see the inventory turn up as spun up a little. Steve Martin – Slater Capital Management: Right. But if you know what your backlog is, why are you producing more inventory?

We, first of all, I think the inventory will be picking up very soon in the first quarter or so and also because of the Chinese New Year. We have that Chinese New Year very near to the year-end. And a loss of pay for inventory has been picked up during this period and for the backlog. So, that’s why we take about 90 days period to produce such a inventory. So we actually have those, you can see our production capacity, actually we are using less than before and we just slowdown our production capacity during this period also in order to lower the inventory backlog. Steve Martin – Slater Capital Management: All right. Well, I would urge to focus on generating cash and not using it. Obviously the Chinese market is what it is. We all tried to warn you and you ignored it. So, thank you.

Our next question comes from the line (Liang Sue) with King Capital.

Hi, good morning.

Hi.

I understand that there is a general slowdown in the real estate and construction sectors in China, but if we compare your financial performances as you know in the recent quarter to the overall China’s construction industry, it appeared that you have, you know somewhat underperformed the industry. So, I know you have providing price concession in the fourth quarter tried to retain your market share but are you losing market share there or you know have you been able to retain your market share? Thank you. And that’s, that’s my first question. And my second question is just wondering if you can now provide some update on the, your strategic supply relationship with the China Decoration, have you made your first delivery and when do you expect that you have more like commercial delivery to China Decoration? Thank you.

Actually it at the very end of last year and our competitor has entered in price war. That forced us to reduce our price to maintain our market share until now. Why I think is, our mark, we still have a very positive market shares in the markets. And what we understand some of this small competitor has already started their production already. So, probably we need to wait for a while before we get back to normal for our pricing or the systematic situation. And for your second question, we are still working with this China Decoration right now, we hoped and with this we will have (inaudible) differ some of the goods to them very soon probably in the late second quarter or third quarter, beginning of the third quarter. But at this moment we have – know any figures that can be announced to the public yet.

Okay. Is it true that China Decoration is highly exposed to the mode of economic housing as supposed to – in other words, it is more exposed to the economic housing so it’s such a loss to the slowdown in the construction because the government is supporting it. And that was somewhat because being a strategic supplier to China Decoration, you will be able to somewhat picked up on the volume?

I surely notice China Decoration is stable business and behalf of our (inaudible) business operations and economic housing is one of their revenue I think. And they also have lots of overseas projects. And I’m not sure how – what is their – revenue mix within their corporation, I think that will really help us to have a more stable revenue pattern in future if we can have a very good relationship – business relationship with them.

Okay. Thank you.

Thank you.

Your next question comes from Chris White with Greenstone. Chris White – Greenstone: Yes, Edmund. First of all, I think I heard you on the call where you said you like to take care of your customers, I would just like to make the statement that we would appreciate if you take care of your shareholders with the same manner and given the fact that you told me that you wouldn’t be discounting pricing (inaudible) record is doing that in December it’s pretty disappointing and a bit of a knock to your credibility personally may so, very disappointing. Now with regards to the dividend, I appreciate that I’m stressing and its obviously noticeable that investors are only looking to really invest in companies that think about shareholders and return in capital. Given the slowdown in your business today the low utilization can, you or Paul or Bill please talk to the fact about the dividend policy the thought behind implementing that in Q4 and return in future capital to shareholders either by increasing that dividend or buyback as the business turns around and can you or the board please address that question? Thank you.

You want me to answer that Edmund?

Yeah, please do it. Thank you, Paul.

Yeah. The Board has Edmund indicated announced an annual dividend, the Board has undertaken a dividend policy which it hopes to continue to replicate (inaudible), what’s in our intention to have two back-to-back special dividends, the idea was that this would be an annual dividend. And as long as everything is within our power, I mean, there are those strange things that happen in the future which could affect any business or any accounting area so forth. To the second aspect of the – and by the way let me just say in terms of dividend one would hope that if we grow as we would expect to use growing experience, as the dividend will grow in a commensurate fashion. Now, as we have not considered, if we had considered a buyback that would have been announced that has not been something that which the board has considered or which has any statements regarding it. Chris White – Greenstone: So Paul, can I clarify how you think about the dividend, is it at the synergy of free cash flow going forward, can we have a little bit more clarification on that just that we can think about having – would turnaround relative to the business?

I think in general as I indicated to you, a growing business, growing earnings equals growing dividend, we have not formulated as far as I’m concerned because we can see forward as Board what our needs maybe for cash generators and there maybe some needs under certain circumstances which are necessary that we put back into the business rather than paying – being paid externally. So naturally a growing business means that you got growing cash flow, is growing cash. But, we don’t have a formula that we are (ianudible) at this point.

Right. Well, do you want to share appreciate working with you and the board through this and we do appreciate those return and thinking about shareholders rather than just spending but it is very disappointed to see some of the underlying business exits has gone on with (ianudible) here in the fourth quarter. I think I feel lucky that I value the company on a book value basis and not based on the current metrics of the underlying income statement (ianudible).

Could I also say Edmund, I think it would be good to extrapolate on another aspect here which it relates to the price tags that were in effect in December and we will carryover in part into early January. As you mentioned the company has given additional terms in terms of accounts receivable to help customers to that are match off good deliveries with the slowdowns by some of the developers. But what that does is it changes somewhat, some portion of our business because everybody doesn’t get longer trade terms. It changes the product cycle which everybody has gotten used to that the backlog at the end of the particular quarter was a very good indicator for the coming quarter. Obviously if you have terms that are beyond 90 days the tendency would be – it’s always sales to actually hit the income statement not in the next quarter but in the quarter after that. So I would say that I would be mindful of this and not necessarily apply the same market if you did previously in a different economic environment. That’s all I have to say now. Chris White – Greenstone: Thanks.

(Operator Instructions)

I actually if I could extrapolate my own answer just a second ago. In pushing forward that means that an order taken may not actually be booked as a sale during the second quarter thereafter. And so there would be lag if those sales represented any discounts and it was a restoration of normal pricing would be something that you would necessarily see in the quarter after that becomes a general market situation but rather something that would be seen more in the second quarter thereafter.

There are no further questions. I would now turn the call over to David Rudnick of CCG.

Thank you, Melissa. And on the behalf of the entire China Ceramic’s management team I would like to thank all of you for your interest and participation on this call. This concludes China Ceramics fourth quarter and fiscal year end 2012 earnings conference call. Thank you all very much.

This concludes today’s conference call, you may now disconnect.