Final Results

JQW plc

("JQW" or the "Group"*)

Final Results

JQW, the AIM quoted domestic Chinese B2B e-commerce operator, today announces its audited final results for the year ended 31 December 2014.

Highlights

The illustrative exchange rate as at 31 December 2014 is 1 GBP: 9.54 RMB.

* Group, below, is defined as JQW, its subsidiaries and indirect subsidiary

Cai Yongde, Chairman of JQW, commented: "2014 was an important and exciting year for JQW in which the Group has transformed itself from a local market oriented internet platform to an international B2B internet enterprise. The Group's 2014 financial results reflect this progression and show a strong increase in both revenue and profit before tax of 59% and 24% respectively.

"Nevertheless, 2014 has also been a challenging year for the Group with the effects of a slowing Chinese economy and government policies making an impact on the Group's end market of small and medium sized enterprises. In order for JQW to sustain the Group's growth in this more challenging business environment, it has been paramount for the JQW team to continue to focus its efforts on adapting and responding quickly to this evolving marketplace. The team has reacted positively by introducing innovative technologies and additional value-add services to JQW's members, which the Board believes will place the Group in a strong competitive position. Trading in 2015 has started positively and the Board views the future with optimism."

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About JQW plc

JQW is a leading domestic business-to-business e-commerce provider based in the Chinese province of Jiangsu. The Group's core business is its online B2B platform, www.jqw.com, which has been developed to encourage domestic trade by connecting Chinese SMEs with potential trade partners. Founded in 2004, the platform was developed to help to market Chinese SME's websites. JQW has evolved rapidly to become one of the top three B2B e-commerce website in China in terms of traffic and operates, what the Director's believe to be, the first dedicated B2B search engine, www.jqw.cn.

JQW offers a low-cost entry point for Chinese SMEs to promote themselves and their B2B products to potential buyers. In order to increase transaction opportunities, JQW offers its clients a broad range of services including website design, commercial search services and advertising.

There are approximately 50 million SMEs in China manufacturing a diverse range of products, accounting for 60% of the country's GDP. The number of mobile internet-access users in China stood at 871 million at September 2014 and investment in the country's telecommunications infrastructure continues to accelerate. These factors have driven an increased demand for domestic trade of B2B, B2C and C2C e-commerce. With the majority of these SMEs requiring the use of third party B2B e-commerce platforms to promote their businesses and access trade partners, the Board believes that JQW offers a robust and highly reputable branded platform. With exposure in over 50 industry sectors and considerable scope for future growth, JQW is in a strong position to capitalise on the development of this market.

At the end of 2014, the Group had:

11 million Registered users

5 million Page views per day

1,046,000 Sheng-Yi-Tong members with website "shops"

241,000 Fee-paying members

600 Rated in the top 600 websites for global website traffic rankings

44 Sales agencies

3 Top 3 in Chinese B2B website traffic rankings

Chairman's Statement

Since JQW was admitted to the AIM market of the London Stock Exchange at the end of 2013, the Group has transformed itself from a local market oriented internet platform to an international B2B internet enterprise. JQW's reputation has been enhanced in China and internationally with the public profile gained from joining AIM. JQW plans to explore the new opportunities for future development that arise from its status as a public company on a recognised international stock market.

2014 was an important and exciting year for JQW. The Board is pleased to announce the Group's 2014 financial results which show an increase in revenue and profit before tax of 59% and 24% respectively. JQW's growth has been driven by a combination of factors, including the external influences of the rapid development of the e-commerce industry in China as well as the increasing importance of e-commerce to China's approximately 50million small and medium-sized enterprises ("SMEs"), who are the Group's main target market. In addition to this, internal factors such as fast growth in the number of JQW's sales agencies to 44 at the end of 2014, an increase of 14 new agencies, covering new cities in China such as Changchun, Chongqing, Shijiazhuang, Jinan, Changsa and others.

The reputation and profile of JQW was further enhanced through a number of prestigious awards that the Group has won over the year, including '2014 Preferred Service Provider for China SMEs' by China Centre for Promotion of SME Development, a state-owned entity under the Ministry of Industry and Information Technology of the People's Republic of China (the "PRC") and the China International Cooperation Association of SMEs. Only 106 service providers in China have won the award in 2014. Other award winners for 2014 included recognised companies such as Microsoft, Sina, China Telecom and Huawei. During the 2015 International Day for Protecting Consumers' Rights, JQW and other well-known international enterprises such as Suning, Subaru and Foton Daimler were also selected by China Foundation of Consumer Protection as quality and reliable service providers in China.

Nevertheless, 2014 has also been a challenging year for the Group. China's economic slow-down has continued with GDP reported at 7.4% in 2014, which was slightly down from 7.7% in 2013. At the same time, the business environment in China has also encountered a number of changes, such as increasing operating costs and a shortage of labour. Furthermore, anti-corruption and credit tightening policies have been introduced by the Chinese government and internet anti-counterfeit efforts have also been enforced by the Chinese State Administration for Industry and Commerce. The combined effect of these factors have dampened the high growth rates previously seen in the Chinese e-commerce sector.

In order for JQW to sustain the Group's growth in this more challenging business environment, the JQW team continues to focus its efforts on adapting and responding quickly to this evolving marketplace. The team has reacted positively by introducing innovative technologies and additional value-add services to JQW's members, which the Board believes will place the Group in a strong competitive position for future growth against our B2B peer group. Trading in 2015 has started positively and JQW views the future with optimism.

Cai Yongde

Chairman

30 April 2015

Group Chief Executive's Statement

JQW has recently celebrated the 10th anniversary of the Group as well as the first year of being admitted to the AIM market of the London Stock Exchange. The Chairman and I would like to thank the Board and our staff for their continued hard work and commitment to the Group. The support from all stakeholders including our members, agents, suppliers, users, advisers, local authorities and shareholders are all highly appreciated. I am certain that the achievements of JQW over the last year could not have been realised without the support and involvement from all of our stakeholders.

In the past 10 years, JQW has evolved from being a website designer in small region of southern China to one of the mainstream B2B platform operators in China. The Group has also in this time managed to expand and improve its core offering from that of pure website design to other value-added services such as business search engine facility, marketing clients' websites and their businesses, providing a marketplace for users to trade their products online in China and internationally. The enhancement of JQW's offering has been a key factor in the rapid growth of the Group in recent years. The strength of JQW's position in the Chinese e-commerce sector and the quality of its platform is also reflected in the results that the Group has achieved during 2014.

Results

Revenue increased by 59% to RMB 783.8 million (2013: RMB 493.1 million). In spite of some pressure on growth margin, this led to pre-tax profits increasing by 24% to RMB 213.2 million (2013: RMB 171.4 million) and to net profit after tax rising by 14% to RMB 146.7 million (2013: RMB 128.4 million). Earnings per share on a fully diluted basis went up from RMB 0.69 to RMB 0.76 when using a pro forma figure for 2014.

The Group's gross profit margin decreased to 40%, from 50% for the year ended 2013. Consistent with the Company's strategy, JQW's distribution mix has seen a further rise in the sales agencies channel, as opposed to the Group's own sales force channel, from 78% of revenues in 2013 to 84% in 2014. This has translated into higher cost of sales as a result of commissions paid to agents. In addition, JQW's client base has continued to trade up to more expensive packages, which provide them with advertorial services through other media channels. The cost for JQW to purchase advertising rights on different media channels to support the advertorial services rose significantly from RMB 9.8 million in 2013 to RMB 58.0 million in 2014. The utilisation rate by customers of JQW's advertorial services increased from 16% in 2013 to 66% in 2014, reflecting our clients' recognition of the value of this service. This has also translated into a decline in gross margin.

JQW remains a highly cash generative business. During 2014, the Group's cash balances increased by RMB 50.6 million to RMB 394.7 million, after the Company paid out total dividends of RMB 114.4 million during the year. The Group's robust cash position provides JQW with the ability to invest in new opportunities to deliver further growth for our business.

JQW's two internal sales centres in Yangzhou of Jiangsu Province and Shishi of Fujian Province have performed well in the year and have contributed to the growth of the Group's sales. The number of sales agencies increased by 14 to 44 at the end of 2014 (2013: 30 agencies) and the Board maintains its target to have at least 60 sales agencies by the end of 2015. Sales generated from agents have continued to grow fast, up 69% from RMB 388.0 million in 2013 to RMB 656.6 million in 2014, which contributed 84% of total sales. The Group maintained its strategy to expand through the agency model which the Board believes offers the most efficient channel for the Group's continued growth. The agency model has allowed the Company to expand its distribution network and geographical presence quickly, while limiting the required investments and limiting the risks generally associated with opening up new regional operations. The management team continues to evaluate suitable agency candidates and analyse new potential locations in China in order to expand its sales agent network. In the first three months of 2015, the Group has added three new sales agencies, taking the total number to 47 as at 31 March 2015. The growth in the number of new sales agencies in the first quarter of 2015 was slower due to China's festival season and long New Year public holiday. The Board anticipates that there will be an increase in the signing up of new sales agencies in the subsequent months of 2015.

JQW has also generated excellent growth in the numbers of fee paying members, which increased by 22% to 241,000 year-on-year at the year ended 2014, which will be one of the Group's Key Performance Indicators for 2015 revenue growth.

Platform development

B2B e-commerce platform

The Group is well aware of the increase in demand for faster, more secure and more convenient transactions in the market. With the improvement of facilities including internet coverage, logistic systems and existing payment platforms having occurred, the provision of on-line transactions will now be a crucial development for all B2B platforms in China.

In July 2014, JQW launched its English language B2B e-commerce platform www.jqwmall.com. The platform was established to enable certain of JQW's premier members and other new members to consider expanding their sales internationally through JQW Mall.

Initially the Group chose to focus on suppliers in industries where there was an international price competitive position and where there were lower barriers for exports. At the end of 2014, JQW Mall successfully engaged with 52 local suppliers with more than 600 products being promoted through the platform. Although the contribution at this stage is still small in relation to the Group's overall financial results, the management believes that the contribution from JQW Mall will grow in the future and the international platform will become a more meaningful revenue stream for the Group. JQW continues to strengthen the quality of this platform as well as attracting more high quality suppliers to it.

In the second half of 2015, JQW intends to launch its Chinese-based e-commerce function on the existing Chinese B2B platform. This Chinese transaction platform is mainly targeting the domestic market. The new e-commerce platform will significantly improve functionality that will allow purchasers to place orders and make payments through the platform, using carefully selected partner firms with which JQW has established good relations. In line with JQW's competitors, the Group will not charge commission on transactions undertaken as it is important for JQW to offer value-added functionality and to boost the number of users trading through JQW's platform. Going forward, it is the intention of the Group to create a sales commission-based model. The Board will provide further updates as this service is being launched in H2 2015.

Mobile Homepage on WeChat Platform

In July 2014, JQW introduced a new package to the market, 'Gold We King', which was priced at RMB 4,000 per year. The services included in this new package are similar to the 'Gold Shop King' package (priced at RMB 3,000 per year) however, added to this service was the ability to create an online shop on the 'WeChat' platform, a popular mobile text and voice messaging communication application in China. Through this new package, JQW's members can now enjoy easier access to business information, link their PC homepage to a mobile homepage, provide e-catalogue as well as facilitate instant communication tools.

Up to the end of December 2014, more than 8,000 members subscribed for the new 'Gold We King' package and it contributed revenue of RMB 7.9 million. JQW will continue to explore for other potential selling points to encourage more members to upgrade from JQW's base package to this new package.

Mobile applications

JQW sees mobile applications as an important route for attracting new customers to the JQW platform and the Group has been working on the technical aspects of broadening its services in the mobile applications space. The Group has now developed JQW's smartphone applications for both iOS and Android systems, which were launched in January 2015 and February 2015, respectively. The Board believes that mobile applications will significantly improve clients overall experience of JQW services and the team is also looking for new value-added features to be added to these mobile applications.

Financial services

As a result of credit tightening in China, SME's are facing difficulties in obtaining bank loan financing. In this respect, JQW has been working with CreditEase Group, a financial institution which provides wealth management, credit management, microfinance investment, and microcredit loan origination and services in China, to provide a platform and a direct link to a financial institution that provides SMEs with microloan services. This service commenced in the fourth quarter of 2014. Through a cooperation agreement, CreditEase Group will provide microloan financing services to JQW's members with a lower interest rate provided that they can fulfil certain criteria, such as having being a subscribed member of JQW for a defined period of time. CreditEase Group will receive exposure to those SMEs registered as members of JQW. The benefit of the agreement for JQW is that the Group is able to provide a new additional service to its existing members and can also sell this service to attract new SME members to JQW who might need microloan financing. JQW does not bear the credit risk from this arrangement with CreditEase Group.

The Group is also exploring the possibility of using its specialist knowledge of the Chinese SME sector in certain business information and e-commerce services in order to provide more valuable data to financial institutions for credit assessment. This is important to create a better opportunity for the Group to diversify its future source of income by sharing the introduction fee with the financial institutions and JQW will be well positioned to negotiate for improved financing terms for JQW's members.

Facilities upgraded

In the middle of 2014, server mirroring was successfully completed in the Shenzhen internet data centre. As part of this upgrade, some of the older servers were replaced. The server capacity is now sufficient to accommodate the Group's development for the next few years.

Dividend

For financial year 2014, JQW has declared a total dividend of 5.2 pence per share (an interim dividend of 0.2 pence per share as well as a special dividend of 5.0 pence per share), with approximately RMB 101.6 million paid out as dividend to shareholders on 23 October 2014. In light of the significant amount paid at that time, the Board has decided to not propose any final dividend in respect to the financial year 2014.

Going forward, the Directors intend to resume the payment of regular dividends, which will take into account the Group's profitability, growth, availability of cash and distributable reserves as well as expected financing requirements to develop and expand the operations.

Share Price

The Board is disappointed by the share price performance of the Company since the 2014 interim results were issued, and feels that the share price has been disconnected from the positive financial and operational performance of the Company since admission. This has been caused in part by share disposals by a number of the overseas and early stage investors who have realised returns on their original investments. The Board is in late stage discussions to appoint a new UK-based broker, who will focus on introducing new investors to the Company in the coming months.

Outlook

The Board is committed to ensuring that the Group responds to changes in the market so that it continues to improve its product mix as well as provide a competitive and low cost entry point into e-commerce for Chinese SMEs.

As mentioned in the Chairman's Statement, the business environment in China is characterised by several traits including the slow-down in the overall growth of the Chinese economy, increasing operating costs, labour shortages, anti-corruption legislation and credit tightening policies. Those changes in the macro environment have also affected the SME's operating in China. E-commerce in China is still expected to see rapid growth over the next few years; however this has led to significant amounts of capital support for new market entrants and other leading players and this has directly increased the challenges from competitors who offer lower prices and innovative features to their product mix. In addition to responding to these changes in the market, the rapid changes in technology has also required JQW to accelerate investment in technology and innovation to upgrade its products and services.

The Board believes that some of the negative factors in the macro-environment may lead to a slow-down in the growth of e-commerce enterprises in China, including JQW. However, this is a transitional period that the Group will navigate carefully after the rapid growth seen in recent years. With JQW's early awareness of the potential risk and its depth of skills and financial resources, the Group is well positioned and prepared to overcome these challenges

Chen Daocai

Group Chief Executive Officer

30 April 2015

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

Notes To The Financial Statements - (Amounts in thousands of Renminbi ("RMB")

1. Corporate information

JQW plc (the "Company") was incorporated in Jersey with registration number 113593. The registered office of the Company is 13-14 Esplanade, St Helier, Jersey JE1 1BD, Channel Islands (PO Box 207).

On 26 July 2013, the Company was incorporated with the issuance of two ordinary shares at no par value. On 15 August 2013, the two shares of JQW plc were transferred toWang Xiufang, the largest shareholder of the Company as at the date of the financial statements (each share to be held through Tian Sheng Enterprises Limited and ChengTong International Limited) and with de-facto control of the Company.

Pursuant to a share swap agreement (the "Share Swap Agreement") dated 5 September 2013 between, inter alia, the Company, Junde International Holdings Limited ("JIL") and Wang Xiufang, JQW plc acquired 1 share of HKD1 in the issued share capital of JIL in consideration for the issue of 147,531,198 Ordinary Shares of no par value in the capital of the Company at a price of 70 pence per Ordinary Share (the "Consideration Shares"). Pursuant to the Share Swap Agreement, the Consideration Shares were allotted, 92,901,598 Ordinary Shares to Wang Xiufang (to be held through Tian Sheng Enterprises Limited and ChengTong International Limited), 10,009,600 Ordinary Shares to Hansen Drison Venture Capital Co. Ltd, 10,009,600 Ordinary Shares to Universe Glory Enterprises Limited, 23,680,800 Ordinary Shares to Fortune United Capital Limited, 5,464,800 Ordinary Shares to One Capital Group Investment Limited and 5,464,800 Ordinary Shares to Midasi Investment Limited by way of performance of certain investment agreements entered into between persons connected with the allottees and Wang Xiufang.

On 15 October 2013, JIL and its controlled subsidiaries including Yangzhou Junde Investment Consulting Development Co., Ltd. ("Yangzhou Junde"), Jiangsu Province JQW Technology Co., Ltd. ("Jiangsu JQW"), Shishi JQW Technology Co., Ltd. ("Shishi JQW") and Shenzhen JQW Information Co., Ltd. ("Shenzhen JQW"), were transferred to JQW plc and became wholly owned subsidiaries of JQW plc (the "Reorganisation"). These entities were ultimately controlled and managed by the same parties before and after the transfer to JQW plc and that control was not transitory (common control).

On 5 September 2013, the Company, Cai Yongde (the Chairman of JQW plc), Chen Daocai(the Chief Executive Officer of JQW plc), Cai Peixuan (the son of Cai Yongde), Champ Public Limited, a BVI company of which 54.7% of the issued share capital is directly owned by Cai Yongde and 45.3% is directly owned by Chen Daocai and Dong Feng Developments Limited, a BVI company wholly owned by Cai Peixuan entered into a subscription agreement (the "Subscription Agreement") whereby Champ Public Limited was allotted 29,182,400 Ordinary Shares and Dong Feng Developments Limited was allotted 7,286,400 Ordinary Shares in consideration for services provided by Cai Yongde, Chen Daocai and Cai Peixuan to the Company.

The Reorganisation and share transfers were completed on 3 December 2013.

The consolidated financial statements include the financial statements of the Company, its controlled subsidiaries and an entity consolidated under contractual arrangements, collectively referred to as the "Group".

The Group is principally engaged in the provision of business-to-business ("B2B") e-commerce services in the People's Republic of China (the "PRC").

JQW plcdoes not conduct any substantive operations on its own but instead conducts its business operations through its subsidiaries.

The consolidation financial statements reflect the historical operations of the Group as if the current organisation structure had existed since 1 January 2013.

2. Summary of significant accounting policies

2.1. Basis of preparation

The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU issued by the International Accounting Standards Board ("IASB"), including related Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC").

The individual financial information of each entity is measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group are presented in Renminbi ("RMB"), which is the presentation currency for the consolidated financial statements. The functional currency of each of the individual entity is the local currency of each individual entity.

All financial information presented in RMB has been recorded to the nearest thousand.

The consolidated financial statements have been prepared on the historical cost basis. The principal accounting policies adopted, which have been applied consistently in the financial year, are outlined below.

As permitted by Jersey Company Law only the consolidated financial statements are presented.

2.2. Standards, amendments and interpretations to published standards not yet effective

As at the date of approval of these financial statements, the following standards and interpretations were in issue but not yet effective:

Issued but not yet EU adopted:

IFRS 14 Regulatory Deferral Accounts

IFRS 15 Revenue from Contracts with Customers

IFRS 9 Financial Instruments

IFRS 11 Amendments: Accounting for Acquisitions of Interests in Joint Operations

IAS 16 and IAS 38 Amendments: Clarification of Acceptable Methods of Depreciation and Amortisation

IAS 16 and IAS 41 Amendments: Agriculture: Bearer Plants

IAS 27 Amendment - Equity Method in Separate Financial Statements

IFRS 10 and IAS 28 Amendments: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Postponed: waiting Exposure Draft from IASB)

Annual improvements to IFRSs 2012-2014 Cycle

Amendments to IAS 1: Disclosure Initiative

Amendments to IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception

The Directors do not anticipate that the adoption of these standards and interpretations in future reporting periods will have a material impact on the Group's results.

2.3. Basis of consolidation

The consolidated financial statements incorporate the financial information of the Group. Subsidiaries are entities (including special purposes entities) over which the Company has the power to govern the financial operating policies, generally accompanied by ownership of the majority of the voting rights, so as to obtain benefits from their activities.

A subsidiary is consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intra-Group balances and transactions and any income and expenses arising from intra-Group transactions are eliminated on consolidation. Unrealised gains and losses arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group's interest in the investee.

Financial information of subsidiaries is prepared for the same reporting period as that of JQW plc using consistent accounting policies.

Interests under contractual arrangements (non-controlling interest) in the net assets of consolidated subsidiaries are identified separately from the Group's equity. Interests under contractual arrangements consist of the amount of those interests at the date of the business combination (see note 2.5 below) and the Interests under contractual arrangements share of changes in equity since the date of the combination.

Contractual arrangements

The significant terms of the contractual arrangements are listed below:

As at 31 December 2014, the Group operates the www.jqw.com domain through contractual arrangements. Shenzhen JQW holds a license to provide Internet information services in China. Yangzhou Junde has entered into a series of contractual agreements with Shenzhen JQW such that Yangzhou Junde has the right to collect the economic benefits of Shenzhen JQW and to exercise effective control over Shenzhen JQW.

The series of contractual agreements include an Entrusted Management Agreement, an Exclusive Option Agreement, a Shareholder Proxy Voting Agreement, and an Equity Pledge Agreement.

The Group does not enjoy direct equity ownership of Shenzhen JQW. Instead, the contractual agreements enable the Group to:

• exercise effective control over Shenzhen JQW;

• receive substantially all of the economic benefits and residual returns, and absorb all the risks of the expected losses from Shenzhen JQW as if it were a wholly-owned subsidiary; and

• have an exclusive option to acquire all of the equity interests in Shenzhen JQW.

The Group, through these contractual agreements, gained control of Shenzhen JQW. These contractual agreements require Shenzhen JQW to be treated as part of the Group for accounting purposes.

2.4. Going Concern

The financial information has 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 intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. In assessing whether the going concern assumption is appropriate, management has considered the group's existing working capital position and, if required, its ability to raise potential financing. Management are of the opinion that the Group has adequate resources to undertake its planned program of activities for the 12 months from the date of approval of the financial statements.

2.5. Business combinations outside the scope of IFRS 3

The Directors considered IFRS 3 "Business Combinations" (Revised 2008) as the appropriate accounting treatment. However, they concluded that this Group fell outside of the scope of IFRS 3 (revised 2008) since the Group represents a combination of entities under common control.

In accordance with IAS 8 "Accounting policies, changes in accounting estimates and errors", in developing an appropriate accounting policy, the Directors have considered the pronouncements of other standard setting bodies and specifically looked to generally accepted accounting practice in the United Kingdom ("UK GAAP") for guidance (FRS 6 - Acquisitions and mergers) which does not conflict with IFRS and reflects the economic substance of the transaction.

Under UK GAAP, the assets and liabilities of the transferee and transferor are recorded at book value, not fair value (although adjustments are made to achieve uniform accounting policies), intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer in accordance within applicable IFRS, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented.

Therefore, although the Group reconstruction did not become unconditional until 15 October 2013, the consolidated financial statements are presented as if the Group structure had been in place throughout the period under audit, including the activity from incorporation of the Group's subsidiary. All entities had common management as well as majority shareholders.

On this basis, the Directors have decided that it is appropriate to reflect the combination using merger accounting principles as a group reconstruction under FRS 6 - Acquisitions and mergers in order to give a true and fair view. No fair value adjustments have been made as a result of the combination.

2.6. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of property, plant and equipment includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the property, plant and equipment. Depreciation of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The estimated useful lives, residual values and depreciation methods are reviewed, and adjusted as appropriate, at the end of each financial year.

The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in comprehensive income statement.

Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use.

2.7. Intangible assets (Domain names)

www.jqw.com and www.jqw.cn have a life of 64 years and 16 years, registered on 15 September 1999 and 17 March 2003 respectively. These were gifted to the Group by one of the founders of the business; therefore, the cost is shown as nil.

2.8. Impairment of tangible and intangible assets excluding goodwill

At the end of each financial year, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its value in use. 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.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the comprehensive income statement, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the comprehensive income statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

2.9. Income tax

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

The tax currently payable is based on taxable profit for each year. Taxable profit differs from profit as reported in the comprehensive income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Group's liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where JIL and its subsidiaries operate by the end of the financial period.

Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities in the financial information and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the financial position liability 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 taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised on taxable temporary differences arising on investment in subsidiary, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each financial year 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 realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the financial year.

Deferred tax is charged or credited to the comprehensive income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity, or where they arise from the initial accounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer's interest in the net fair value of the acquirer's identifiable assets, liabilities and contingent liabilities over cost.

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.

2.10. Financial instruments

Financial assets and financial liabilities are recognised on the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and allocating the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on 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 the financial instrument, or where appropriate, a shorter period, to the net carrying amount of the financial instrument. Income and expense are recognised on an effective interest basis for debt instruments other than those financial instruments at fair value through comprehensive income statement.

Financial assets

Financial assets within the scope of IAS 39 are classified as either:

(i) financial assets at fair value through profit or loss

(ii) loans and receivables

(iii) held-to-maturity investments

(iv) available-for-sale financial assets

The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this classification at every reporting date. As at the financial position date of the financial statements, the Group did not have any financial assets at fair value through profit or loss, and in the categories of held-to-maturity investments and available-for-sale financial assets.

All regular way purchases and sales of financial assets are recognised on the trade date, i.e. the date that the Group commits to purchase the asset. Regular way purchases and sales are purchases or sales of financial assets that require delivery of the financial assets within the period generally established by regulation or convention of the market place concerned.

Financial assets are derecognised when the rights to receive cash flow from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets are classified in this category if they are acquired for the purpose of selling in the short term. Gains or losses on investments held for trading are recognised in the comprehensive income statement.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in active market are classified as loans and receivables. Loans and receivables are measured at amortised cost, using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets, other than FVTPL, are assessed for indicators of impairment at the end of each financial year. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For financial assets carried, at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amounts of all financial assets are reduced by the impairment loss directly 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 comprehensive income statement.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through comprehensive income statement to the extent 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 instruments, any subsequent increase in fair value after an impairment loss is recognised directly in equity.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds receivable.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through the comprehensive income statement or other financial liabilities.

Financial liabilities are classified as at fair value through the comprehensive income statement if the financial liability is either held for trading or it is designated as such upon initial recognition.

Other financial liabilities

Trade and other payables

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

2.11. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

2.12. Leases

Rentals payable under operating leases are charged to the comprehensive income statement on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

2.13. 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 the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of each financial year, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in comprehensive income statement when the changes arise.

2.14. Retirement benefit costs

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the social security plan in PRC on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

Contributions to defined contribution plans are recognised as an expense in the Statement of Comprehensive Income in the same financial year as the employment that gives rise to the contributions.

The expenses recognised for defined contribution plans are RMB 6,359,000 for the year ended 31 December 2014 (31 December 2013: RMB 4,402,000).

2.15. Related parties

A party is related to an entity if:-

(i) directly, or indirectly through one or more intermediaries, the party:-

· controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries and fellow subsidiaries);

· has an interest in the entity that gives it significant influence over the entity; or

· has joint control over the entity;

(ii) the party is an associate of the entity;

(iii) the party is a joint venture in which the entity is a venturer;

(iv) the party is a member of the key management personnel of the entity or its parent;

(v) the party is a close member of the family of any individual referred to in (i) or (iv);

(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

2.16. Revenue recognition

Revenue

Revenue is derived from providing B2B e-commerce services to small to medium sized suppliers in PRC who pay varying service fees depending on the service packages they subscribe for.

Revenue is recognised upon the transfer of significant risks and rewards of ownership of the services to the customers, which generally coincides with delivery time and is recognised over the life specified in the terms of the contracts.

Revenue from operating activities is made up of the sale of packages directly to customers or through agencies. The revenue stated in the Statement of Consolidated Comprehensive Income is gross of commission paid to agencies.

Deferred revenue is spread over a period of three months to one year depending on which service package the customer subscribed to.

Commission income

The Group earns commission income from the suppliers when completing transactions on the Group's marketplaces. Revenue related to commission income is recognised in the consolidated statement of comprehensive income at the time when the underlying transaction is completed.

Interest income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable effective interest rate.

2.17. Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. An operating segment's operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

2.18. Dividend distribution

Dividend distributions to shareholders are recognised as a liability in the Group's financial information in the period in which the dividends are approved by the Company's shareholders.

JQW plc is a holding company incorporated in Jersey. The ability of JQW plc to pay dividends depends substantially on the receipt of dividends from its subsidiaries. In particular, each of the subsidiaries in the PRC and Hong Kong may pay dividends only out of its accumulated distributable profits, if any, determined in accordance with its articles of association, and the accounting standards and related regulations.

Moreover, pursuant to relevant PRC laws and regulations applicable to the subsidiaries in the PRC, a certain percentage of after-tax profits are required to be set aside in a statutory common reserve fund. Allocations to these statutory reserves may only be used for specific purposes and are not distributable to JIL in the form of loans, advances, or cash dividends.

Furthermore, if any of JQW plc's subsidiaries incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to JQW plc.

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in Note 2, management made judgements, estimates and assumptions about the carrying amounts of assets and liabilities that were not readily apparent from other sources. The estimates and associated assumptions were based on historical experience and other factors that were considered to be reasonable under the circumstances. Actual results may differ from these estimates. These estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

There are no key assumptions concerning the future and other key sources of estimation uncertainty at the end of each financial year, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

4. Property, plant and equipment

5. Trade and other receivables

The carrying amounts of trade and other receivables approximate their fair values.

6. Cash and cash equivalents

7. Trade and other payables

The carrying amounts of other payables approximate their fair values.

8. Stated capital account

On 26 July 2013, the Company was incorporated with issuance of two ordinary shares at no par value.

The admission of the enlarged share capital to trading was effective on 9 December 2013, with a placing of 9,549,991 ordinary shares of no par value at ￡0.70 per share (totaling RMB 67,518,000) as part of the admission to trading on AIM. The share issue costs associated with this transaction of RMB 9,606,000 have been deducted from the Company's stated capital.

On 3 December 2013, the Company issued 183,999,998 ordinary shares at no par value pursuant to the Share Swap Agreement and the Subscription Agreement (Note 1).

The holders of ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share at meetings of the Company.

Under the terms of a warrant deed dated 9 December 2013 the Company issued a total of 5,080,687 warrants to subscribe for ordinary shares at 70 pence per share to Cairn Financial Advisers LLP and Argento Capital Markets Limited as part of the fee arrangements with those advisers in relation to the Company's IPO. The fair value of the warrants granted have been estimated using a Black Scholes option pricing model with the following inputs: warrant price - 70p, share price - 70p, expected volatility - 50%, risk free rate of interest - 0.5%, expected dividend yield - 0% and expected life - 1-3 years. The fair value of the warrants using the above methodology is RMB 8,628,000. The fair value of the warrants has been recognised in the stated capital account.

9. (a) Statutory reserve

According to the relevant PRC regulations and the Articles of Association of the subsidiaries, it is required to transfer 10% of each subsidiary's respective profit after income tax to its statutory surplus reserve until its reserve balance reaches 50% of its registered capital. The transfer to this reserve must be made before the distribution of dividends to equity owners. Statutory surplus reserve can be used to make good previous years' losses, if any, and be converted into paid-in capital in proportion to the existing interests of equity owners, provided that the balance after such conversion is not less than 25% of the registered capital.

(b) Foreign exchange translation reserve

The foreign exchange translation reserves arose from the translation of the financial statements of foreign subsidiaries and are not distributable by way of dividends.

10. Profit before taxation

11. Income tax expenses

The tax rate used for the reconciliations below is the effective weighted average rate of tax applicable in the jurisdiction concerned.

The deferred tax is derived from the deferred revenue stated in the following table:

The inclusion of a deferred tax asset in the accounts for the years ended 31 December 2014 and 2013 was derived from deferred revenue.

The above deferred tax assets are recognised to the extent that it is probable that the future taxable profits will allow the deferred tax assets to be recovered.

The charge for each year can be reconciled to the profit or loss per the consolidated income statements as follows:

12. Earnings per share

The calculation for earnings per share, based on the weighted average number of shares, is shown in the table below:

13. Subsidiaries

The details of the Company's subsidiaries are as follows

As described in Note 2.4 above, although the Group reconstruction did not become unconditional until 3 December 2013, share capital is presented on a pro-forma basis as if the Group structure had been in place continually during 2013.

Note 1 Shenzhen JQW is controlled through contractual arrangements as described in Note 2.3.

14. Operating lease commitments

As at each of the financial position dates, the future aggregated minimum lease payments under non-cancellable operating leases contracted for but not recognised as liabilities, are as follows:

15. Significant related party transactions

There have been no related party transactions that have been material to either party and have therefore, in accordance with IAS 24, have not been disclosed.

Key management compensation

Key management personnel compensation is analysed as follows:

16. Financial risk management

The main risks arising from the Group's financial statements are credit risk, liquidity risk and foreign currency risk. The Group reviews and agrees policies for managing each of these risks and they are summarised below:

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in a loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group performs ongoing credit evaluation of its counterparties' financial condition and does not hold any collateral as security over its customers. The Group's major classes of financial assets are cash and cash equivalents, trade and other receivables.

As at the end of each financial year, the Group's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the consolidated statements of financial position.

As at 31 December 2013 and 2014 substantially all the cash and cash equivalents as detailed in Note 6 to the consolidated financial statements are held in major financial institutions which are regulated and located in the PRC, which management believes are of high credit quality. The management of the Group does not expect any losses arising from non-performance by these counterparties.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date of the Group is as follows:

The Group has no significant concentrations of credit risk. Cash is placed with established financial institutions. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

Trade receivables not impaired

The Group's trade receivables that are not impaired are as follows:

There was no requirement for an allowance for doubtful debts to be provided during the financial year ended 31 December 2014.

Currency risk

The Group has no significant exposure to foreign exchange risk as its cash flows and financial assets and liabilities are mainly denominated in the respective functional currency of the companies comprising the Group. Therefore, any increase of decrease in foreign exchange rate against functional currency, assuming such change had occurred as at 31 December 2014, would not have a significant impact on the Group's results of operation and financial position.

Interest rate risk

The Group has no significant interest rate risk as the Group has no loan facilities, term loans or overdraft facilities as at financial position date. Therefore, any increase of decrease in interest rate, assuming such change had occurred as at 31 December 2014, would not have a significant impact on the Group's results of operation and financial position.

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principal liabilities of the Group arise in respect of income tax payables, trade and other payables. The liabilities of the Group are all payable within 12 months.

The Board reviews cash flow projections on a regular basis as well as information on cash balances.

Derivatives, financial instruments and risk management

The Group does not use derivative instruments or other financial instruments to manage its exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices.

Capital risk management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. It is also the Group's objective to manage its capital structure in order to reduce the cost of capital. The capital structure comprises the shareholders' equity of the Company, borrowings and cash and cash equivalents.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during each of the years ended 31 December 2013 and 2014.

17. Fair value of financial instruments

The carrying amount of the financial assets and financial liabilities in the consolidated financial statements approximate their fair values due to the relative short term maturity of these financial instruments. The fair values of other classes of financial assets and liabilities are disclosed in the respective notes to the financial information.

The fair values of financial assets and financial liabilities are determined as follows:

(i) the fair value of financial assets and financial liabilities with standard terms and conditions and trade on active liquid markets are determined with reference to quoted market prices;

(ii) the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow; and

(iii) the fair value of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash flow analysis is used, based on the applicable yield curve of the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

18. Segment Information

Operating segments are based on internal reports about components of the Group which are regularly reviewed by the Board of Directors by the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance.

The Group reporting segments are direct sales and distribution sales. Only segmental revenues are considered by the CODM for strategic decision making purposes. The activities of the Group took place solely in the PRC and as such no geographical segment information is stated during the financial years.

The segment information provided to management for the reportable segments for the year ended 31 December 2014 is as follows:

Year ended 31 December 2014

The segment information provided to management for the reportable segments for the year ended 31 December 2013 is as follows:

Year ended 31 December 2013