Preliminary Results

5 June 2014

New trend lifestyle GROUP PLC

("NTL", the "Company" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31st DECEMBER 2013

New Trend Lifestyle Group (AIM: NTLG), the Feng Shui products and services group, operating in Singapore, Hong Kong and mainland China, announces its preliminary results for the year to 31 December 2013.

At present, the majority of NTL's business is transacted in Singapore Dollars (SGD) and therefore Group figures are presented in that currency.

Highlights

· Revenues increased to SGD 11,067k (2012: SGD 10,663k)

· Trading loss of SGD 1,003k (2012: SGD 90k)

· Loss before taxation of SGD 1,040k (2012: profit SGD 323k)

· Earnings per share SGD (0.01) (2012: loss SGD 0.01)

· Net Cash inflow from operations of SGD 127k (2012: outflow SGD 551k)

Post Period Events 

· Convertible loan notes to raise SGD1,140,000 (approximately £543,000)

Robert Goddard, Chairman of NTL, commented:

 "The Group's performance has remained resilient to the general macro-economic downturn in the Singapore retail market. The Group will focus on maintaining a strong retail offering in Singapore, whilst further developing the Chinese market with a franchising model. This will improve traction in this developing but important target market.

"Year-to-year comparable sales in Singapore for the year outperformed the sharply diminished general retail market and this is testimony to the quality of the Group's offering. Retail market statistics for the early part of 2014 in Singapore suggest a very slight improvement in retail market demand over the full year of 2013.

"We will continue to refresh and upgrade the Singapore network and expect to roll out a new retail and service concept early in the second half of 2014. Managed by an experienced professional in the field, this will be a beauty parlour chain based on Feng Shui principles. The other initiatives in hand will continue to be progressed."

For further information:

About New Trend Lifestyle

The Company was established in 2005 by Master Hillary Phang. NTL's Feng Shui services include building and office design consultancy, astrology readings, marriage matching, aura readings, business talks and seminars for large corporations. These are complemented by Tarot Card readings and an on-line dating service using Feng Shui principles.

OVERVIEW

This is the first Annual Report of New Trend Lifestyle Group (the "Company" or the "Group") since its first full year of trading as a company listed on the AIM Market of the London Stock Exchange (admitted in mid-2012). Group revenues increased to SGD11,067k compared to SGD10,663k in 2012, and the Group loss for the year was SGD1,143k compared with a loss of SGD534k in 2012 (which included AIM admission costs of SGD1,158k).

General retail environment

Retail sales in Singapore are markedly seasonal and volatile. This was particularly so in 2013 and in July there was a 12-year record month-on-month shrinkage of 6.9%. For 2013 as a whole, retail sales fell by 8.6%, compared with a fall of 1.2% in 2012.

The results for the Company need to be considered against this background.

Trading, in summary

Profit and loss

In addition to the downturn in national retail activity, a number of other factors adversely affected the Company's sales. These included a number of trained staff leaving Singapore outlets and then setting up in competition, a lower number of total 'shop-open' days (down 9%) and the forced sale of the freehold, and therefore migration of the Company's second-most profitable shop at Sims avenue to a new location in early 2013.

Despite these internal and external factors, sales in Singapore increased marginally to SGD10,600k (2012: SGD10,595k). This was complemented by an increased level of sales in China of SGD467k (2012: SGD68k), resulting in Group sales of SGD11,067K for the year (2012: SGD10,663).

It is pleasing to note that like-for-like sales in Singapore rose by 4.7% since this attests to the ongoing strength of the offering in the face of reduced consumer spend elsewhere in the retail environment.

For 2013, most types of commission expenses were re-classified as costs of sales. Accordingly, in this commentary, comparisons with 2012 have been made with the commission-adjusted figures for that year.

Gross margin in Singapore improved in 2013 to 74.1% compared with 71.7% in 2012 so that gross profit was 1.2% up at SGD7,853k (2012: SGD7,762k).

After adjusting operating expenses in 2012 and 2013 for, among other things the change in classification of commissions, an impairment loss on an investment in a listed Hong Kong Company and an impairment loss on the property that the Company was forced by legislation to sell, expenses increased by 16.8% to SGD9,245k (2012: SGD7,913k). The additional SGD1,332k was due mainly to an increase in staff costs of SGD584k, SGD185k greater depreciation, SGD128k more expenditure on marketing expenses and a SGD297k increase in shop leases.

The trading loss for the year amounted to SGD1,003k This compares with a trading loss of SGD90k in 2012.

Various adjustments to other income and non-trading expenses resulted in a total comprehensive loss of SGD1,143k (2012: loss of SGD534k after AIM admission costs of SGD1,158k).

___________________________

[1] At present, the majority of NTL's business is transacted in Singapore Dollars (SGD) and therefore group figures are presented in that currency. (SGD 1.97 to £1.00 at 31 Dec 2013). The group also had transactions in Hong Kong Dollars (HKD) and Renminbi (RMB) (HKD 12.79 and RMB 10.07 to £1.00 at 31 Dec 2013).

Balance sheet

The main changes in the balance sheet were as a result of the sale of the Sims Avenue property (with the resulting decrease in borrowings) and an impairment against the investment in LZYE Plc. Inventory control remained strong, resulting in little change to both gross inventories and provisions.

Cash flow

Cash flow from operating activities improved to an inflow of SGD127K compared with an outflow of SGD551K in 2012. Cash and cash equivalents decreased to SGD2,160K from SGD2,430K in 2012.

Looking forward

The Group's performance has remained resilient to the general macro-economic downturn in the Singapore retail market. The Group will focus on maintaining a strong retail offering in Singapore, whilst moving forward in China with a franchising model. This will improve traction in this developing but important target market.

Profit and loss

Sales and gross profit

In order to provide more-comparable figures, staff commissions have been added to the cost of sales in the comparisons that follow.

Group-wide, sales revenue was up at SGD11,067k (2012: SGD10,663). Group-wide margins strengthened from 75.7% to 76.0% on sales of physical products.

Singapore

In addition to the downturn in national retail activity mentioned in the overview, a number of other factors constrained the Company's sales. These included a number of trained staff leaving the Singapore outlets and then setting up in competition, a lower number of total 'shop-open' days (down 9%) and the forced sale of the freehold, and therefore closure of the Company's second-most profitable shop.

Despite all these adverse factors retail sales increased in Singapore to SGD10,600k (2012: SGD10,595k). Encouragingly, 'like-for-like' sales improved by 4.7% (2012: 8.0% decrease) to SGD7,476k. Also, like-for-like service revenue was up only slightly in the year so overall growth was almost entirely due to an increase of 7.5% in product sales.

Across the Singapore estate as a whole, product sales slipped back by 2.6% to SGD6,175k (2012: SGD6,344k) and services by 1.2% to SGD4,424k (2012: SGD4,477k), largely because it took until December 2013 to replace the high volume outlet that the Company was forced to dispose of earlier in the year. However, even after operating for just 25 days, the replacement outlet's daily sales are already among the best in the network.

Gross margins held up well. Overall, they progressed from 71.7% to 74.1% and from 76.2% to 77.6% on a like-for-like basis. These marked improvements resulted from a sustained programme to incentivise shop staff to promote those products and services with higher margins.

The improved margins more than offset the slight fall back in volume so that overall gross profit grew by 1.2% to SGD7,853k from SGD7,762k in 2012. On a like-for-like basis, gross profit was up by a pleasing 6.6% on 2012. On product sales alone, like-for-like gross profit was 11.0% on last year, but service revenues eased by 0.7% reflecting the departure of several of the trained masters during the period.

China

The sales in China increased to SGD467k compared with SGD68k in 2012. Gross profit in 2013 from the outlets in China represented just 5.3% of the total outlet sales for the Group and so any more-detailed analysis of them would not contribute usefully to the overall picture.

Expenses

To provide a more-meaningful comparison of the year-to-year performance of the business, those expenses not relating directly to the production of a 'trading' profit have been 'backed out' from the figures in this analysis.

Staff costs rose by 14.4% in the year to SGD4,638k compared with SGD4,054k in 2012. This was accounted for by extra staff recruited to boost sales and a full year of directors' fees, all offset by a reduction in bonus payments of SGD64k.

The Group's headquarters building was acquired during the course of 2012 and the full year effect of this, together with higher costs of shop renovations in Singapore accounted for the SGD185k increase in depreciation and amortisation to SGD609k.

Greater promotional effort, including a Feng Shui magazine for China, and additional graphic design services accounted for the bulk of the 46.7% increase in advertising and promotional costs to SGD402k (2012: SGD274k).

The expenses in China have increased as the Group continues to develop this market, and have not yet been covered by revenue and gross profit.

Profit

There was an impairment loss of SGD951k on the Group's legacy investment in LZYE plc in Hong Kong and in 2012 an impairment loss of SGD411k on the Sims Avenue property. These losses have not been taken account of in the expenses used to arrive at trading profit (loss) figures for 2013 and 2012 of SGD(1,003)k and SGD(90)k respectively.

Balance Sheet

Property, plant and equipment increased to SGD2,236k (2012: SGD1,791k) as a result of the renovation costs for new outlets opened during the year amounting to SGD 867k and additions in furniture and fittings and motor vehicles amounting to SGD 185k. This was offset by the annual depreciation charge for the year.

Inventories remained in line with the prior year at SGD1,138k (2012: SGD 1,111k), with little change in gross inventories and provision for obsolescence. Trade and other receivables decreased marginally to SGD1,097k (2012: SGD1,162k). Financial assets were subject to a large impairment (SGD951k), as the value of the investment in LZYE Plc had significantly eroded as at the year end. As at 27 May 2014, the trading in the shares remains suspended on the Alternative Investment Market, and there is no certainty as to when or if trading in the securities will resume. Cash and cash equivalents reduced by SGD270k to SGD 2,160k (2012: SGD2,430k) in the year, but remain at viable levels.

The Sims Avenue property was sold in March 2013, having previously been reclassified as an asset held for sale. The property was sold for SGD3,350k.

Trade and other payables decreased overall by SGD51k to SGD1,276k (2012: 1,327k), as an increase in trade payables was more than offset by decreases in accruals and options fee deposits for the Sims Avenue property. Borrowings decreased significantly in the year, as a result of the sale of the Sims Avenue property. This enabled the settlement of the related property loan of approximately SGD2,200k. Provision for restoration costs increased by SGD132k in the year, to SGD180k (2012: SGD48k), as a result of the provisions for new outlets opened during the year.

On 31 July 2013, 600,000 options were granted equally amongst the four serving directors at that time, with an exercise price of 8p and exercisable at any time up to the tenth anniversary of the grant.

Cash flow

Cash inflow from operating activities was a marked improvement on the prior year at SGD127k (2012: SGD (551)K). The positive cash impact of the sale of the Sims Avenue property was offset to some extent by the repayment of the related property loan and the fixed asset additions of SGD1,109k, and the cash and cash equivalents remained at viable levels at SGD2,160k (2012: SGD 2,430k).

POST BALANCE SHEET EVENTS

James Tan resigned as a director of the Company with effect from 31 January 2014.

On 28 May 2014, the Company raised SGD1,140,000 by way of the issue of convertible loan notes, at a conversion price of 10p. The funds will be used for general working capital purposes.

OUTLOOK

Year-to-year comparable sales in Singapore in the year outperformed the sharply diminished general retail market and this is testimony to the quality of the Group's offering. Retail market statistics for the early part of 2014 in Singapore suggest a very slight (0.7%) improvement in retail market demand over the full year of 2013.

We will continue to refresh and upgrade the Singapore network and expect to roll out a new retail and service concept early in the second half of 2014. Managed by an experienced professional in the field, this will be a beauty parlour chain based on Feng Shui principles. The other initiatives in hand will continue to be progressed.

Also in the second half of 2014, the Company expects to improve its performance in China with a new approach to the Guang Zhou distribution network. It is also the intention to franchise some of our existing outlets in Singapore. The franchisees are expected to bring in additional customers from their own pre-existing networks. The income model from franchises is an initial fee to the Company, ongoing franchise fees and profit from the sale of NTL's exclusive goods. Where viable, there will be an option for the Company to buy out the franchise after an agreed period for an amount based on a multiple of profit. Further announcements in respect of these developments will be made at the appropriate time.

These measures to be taken over the course of the remainder of 2014, will strengthen the business overall and position it for further growth.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

The notes on pages 27 to 66 are an integral part of these consolidated financial statements.

Included in direct costs is an amount of SGD1,644k (2012: SGD1,666k) related to staff commission costs.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

The notes on pages 27 to 66 are an integral part of these consolidated financial statements.

The financial statements were approved by the Board of directors and authorised for issue on 4 June 2014. They were signed on its behalf by:

Director

4 June 2014

Company Number: 8000104

CONSOLIDATED STATEMENT OF CASH FLOWS

CONSOLIDATED STATEMENT OF CASH FLOWS (continued)

Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with maturity of three months or less, as adjusted for any bank overdrafts.

The notes are an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. General information

New Trend Lifestyle Group Plc ("the Company") is a company incorporated in England on 21 March 2012 under the Companies Act 2006 but domiciled in Singapore. It was listed on the AIM market on 28 June 2012. The address of the registered office is given at the start of the annual report. The nature of the Group's operations and its principal activities are set out in the Chairman's Statement.

2. Basis of preparation and significant accounting policies

The consolidated financial statements of New Trend Lifestyle Group Plc have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS's as adopted by the EU), IFRS Interpretations Committee and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, available-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

Going concern

These financial statements have been prepared on the assumption that the Group is a going concern.

When assessing the foreseeable future, the directors have looked at a period of twelve months from the date of approval of this report. The forecast cash-flow requirements of the business are contingent upon the ability of the Group to generate future sales.

After making enquiries, the directors firmly believe that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

New and amended standards adopted by the company

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1 January 2013 that would be expected to have a material impact on the group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 January 2013 and have not been early adopted:

The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the financial statements of the Group.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31st December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to profit and loss in the year of acquisition. The interest of minority shareholders is stated at the minority's proportion of the fair values of the assets and liabilities recognised. Subsequently, any losses applicable to the minority interest in excess of the minority interest are allocated against the interests of the Parent Company. See also accounting policy on group reorganisation for acquisitions categorised as group reorganisation.

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

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

The Company acquired its 100% interest in New Trend Lifestyle Pte Ltd ("NTL") in 2012 by way of a share for share exchange. This is a business combination involving entities under common control and the consolidated financial statements are issued in the name of the Group but they are a continuance of those of NTL. Therefore the assets and liabilities of NTL have been recognised and measured in these consolidated financial statements at their pre combination carrying values. The retained earnings and other equity balances recognised in these consolidated financial statements are the retained earnings and other equity balances of the Company and NTL. The equity structure appearing in these consolidated financial statements (the number and the type of equity instruments issued) reflect the equity structure of the Company including equity instruments issued by the Company to effect the consolidation.

The difference between consideration given and net assets of NTL at the date of acquisition is included in a group reorganisation reserve.

Functional and presentation currency

The individual financial statements of each entity are measured using the currency of the primary economic environment in which the entity operates ("functional currency").

The consolidated financial statements are presented in Singapore dollars (SGD), which is the functional currency of the Group.

Transactions and balances

Transactions in a currency other than the functional currency ("foreign currency") are measured in the respective functional currencies and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Transactions and balances (continued)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Company's net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity in the consolidated financial statements. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Translation of the Group's financial statements

The assets and liabilities of foreign operations are translated into Singapore dollars at the rate of exchange ruling at the balance sheet date and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profit or loss.  

Revenue recognition 

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is made.

Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates and sales taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:

Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and title has passed.

Revenue from services is recognised upon the delivery and acceptance of the service to the customer.

Revenue from franchise fees is derived from fees receivable from franchisees in China.

Rental income arising from operating leases is recognised on a straight-line basis over the lease terms.

Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the effective interest rates applicable.

Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all terms and conditions relating to the grants have been complied with. When the grant relates to an asset, the fair value is recognised as deferred capital grant on the balance sheet and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Government grants (continued)

Where the grant relates to income, the government grant shall be recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income may be presented as a credit in profit or loss, either separately or under a general heading such as "Other income". Alternatively, they are deducted in reporting the related expenses.

The Group participates in the national schemes as defined by the laws of the countries in which it has operations.

Singapore

The Group makes contributions to the Central Provident Fund (CPF) Scheme in Singapore, a defined contribution pension schemes.

Foreign subsidiaries

The subsidiaries, incorporated and operating in the HK and PRC are required to provide certain retirement plan contribution to their employees under existing HK and PRC regulations. Contributions are provided at rates stipulated by the HK and PRC regulations and are managed by government agencies, which are responsible for administering these amounts for the subsidiaries' employees.

Obligations for contributions to defined contribution retirement plans are recognised as an expense in the period in which the related service is performed.

(ii) Employee leave entitlement 

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability as a result of services rendered by employees up to the balance sheet date.

Borrowing costs

Borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is 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. The cost of an item of property, plant and equipment including subsequent expenditure is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

When significant parts of property, plant and equipment is required to be replaced in intervals, the Group recognises such parts as individual assets with specific lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance expenses are recognised in profit or loss when incurred.  

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Property, plant and equipment (continued)

After initial recognition, property, plant and equipment except for freehold land is stated at cost less accumulated depreciation and any accumulated impairment loss.

Freehold land is subsequently stated at revalued amount less accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using for values at the balance sheet date.

Any revaluation increase arising on the revaluation of freehold land is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit arising on the revaluation of freehold land is charged to profit or loss to the extent that it exceeds the balance, if any, held in the asset revaluation reserve relating to a previous revaluation of that asset.

The estimated useful life and depreciation method are reviewed, and adjusted as appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. Fully depreciated assets are retained in the financial statements until they are no longer in use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss on retirement or disposal is determined as the difference between any sales proceeds and the carrying amounts of the asset and is recognised in the profit or loss within "Other income (expenses)" and the asset revaluation reserve related to those asset, if any, is transferred directly to retained earnings.

Investment properties

Investment properties are properties that are either owned by the Group or leased under a finance lease in order to earn rentals or for capital appreciation, or both, rather than for use in the production or supply of goods or services, or for administrative purposes, or in the ordinary course of business. Investment properties comprise completed investment properties and properties that are being constructed or developed for future use as investment properties. Properties held under operating leases are classified as investment properties when the definition of investment properties is met and they are accounted for as finance leases.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Investment properties (continued)

Investment properties are initially measured at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met. Subsequent to initial recognition, investment properties are measured at fair value which reflects market conditions at the balance sheet date. Gains or losses arising from changes in the fair value of investment properties are included in the profit or loss in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The gain or loss on the retirement or disposal of an investment property is determined as the difference between any sales proceeds and the carrying amounts of the asset and is recognised in profit or loss in the year of retirement or disposal within "Other income (expenses)".

Financial instruments

A financial instrument is recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group transfers the financial assets to another party without retaining control or substantially all risks and rewards of the asset. Regular purchases and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group's obligations specified in the contract expire or are discharged or cancelled.

Fair values

The carrying amounts of the financial assets and liabilities such as cash and cash equivalents, receivables and payables of the Group at the balance sheet date approximated their fair values, due to the relatively short term nature of these financial instruments.

The Company provides financial guarantees to licensed banks for credit facilities extended to a subsidiary company. The fair value of such financial guarantees is not expected to be significantly different as the probability of the subsidiary company defaulting on the credit lines is remote.

Initial recognition and measurement

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are initially recognised at fair value plus, in the case of financial assets classified as held-to-maturity, directly attributable transaction costs.

The Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the nature of the assets and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and for held-to-maturity investments, re-evaluates this designation at every balance sheet date. As at the balance sheet date, the Group has no financial assets in the category of held-to-maturity investments and available-for-sale financial assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

 Subsequent measurement

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

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if they are acquired principally for the purpose of selling or repurchasing in the short term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets designated at fair value through profit or losses are those that are managed and their performance is evaluated on a fair value basis, in accordance with the Group's investment policy. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains and losses arising from changes in fair value of the financial assets are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables comprise cash and cash equivalents, trade and other receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest rate method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Derecognition

Financial assets are derecognised when the contractual rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

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

Derivative financial instruments

A derivative financial instrument is initially recognized at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Derivative financial instruments (continued)

Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settle within 12 months. Other derivatives are presented as current assets or current liabilities.

Impairment of financial assets

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

 (i) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the financial asset's original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in the profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

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 was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Financial assets carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition. Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. As at the balance sheet date, the Group did not have any financial liabilities in the category of financial liabilities at fair value through profit or loss.

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the profit or loss.

A provision is recognised when the Group has a present obligation, legal or constructive, as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities.

Borrowings are initially recorded at fair value, net of transaction costs and subsequently carried for at amortised costs using the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowings which are due to be settled within twelve months after the balance sheet date are included in current borrowings in the balance sheet even though the original term was for a period longer than twelve months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the financial statements are authorised for issue.

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

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using tax rates and tax laws that have been substantively enacted by the balance sheet date in the countries where the Group operates and generates taxable income. Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, is accounted for using the balance sheet 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.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, 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 each balance sheet date 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 utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow deferred tax assets 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 tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to other comprehensive income or equity, in which case the deferred tax is also dealt with in other comprehensive income or equity.

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

Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset's recoverable amount.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Impairment of non-financial assets (continued)

An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely dependent on those from other assets. Where the carrying amount of an asset or cash generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

Impairment losses are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount of an asset since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. This increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in the profit and loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

Inventories comprise finished goods held for resale and are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to be incurred for selling and distribution.

Assets classified as held for sale

Non-current assets (or disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Cash and cash equivalents

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months.

Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital.

Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.

i As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in this Note. Contingent rents are recognised as revenue in the period in which they are earned.

ii. As lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are treated as reduction of the lease obligation on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group's general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Rental leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement.

Related parties

A related party is defined as follows:

(a) A person or a close member of that person's family is related to the Group and the Company if that person:

(i) Has control or joint control over the Company;

(ii) Has significant influence over the Company; or

(iii) Is a member of the key management personnel of the Group or the Company or of a parent of the Company.

(b) An entity is related to the Group and the Company if any of the following conditions applies:

(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

Related parties (continued)

(v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in (a);

(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

3. Critical accounting estimates and judgements

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

i. Critical accounting estimates and assumptions.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Useful lives of freehold building

The cost of freehold building is depreciated on a straight-line basis over the estimated economic useful lives. Management estimates the useful lives of the freehold building to be 50 years. This is a common life expectancy applied in the industry. Changes in the physical conditions of the freehold building and/or expected level of usage and technological developments could impact the economic useful life of the asset. Therefore, future depreciation charges could be revised. As at 31 December 2013, there are no indications that the remaining economic useful life of the asset is significantly lower than the remaining useful life. The carrying amount of the Group's freehold building at the balance sheet date is disclosed in Note 14 to the financial information.

(b) Impairment of inventories

An impairment review is made periodically on inventory for excess inventory, obsolescence and declines in net realisable value below cost and an allowance is recorded against the inventory balance for any such declines. These reviews require management to estimate future demand for the products. Possible changes in these estimates could result in revisions to the valuation of inventory. The carrying amount of inventories as at 31 December 2013 is disclosed in Note 15 to the financial information.  

(c) Fair value measurement of the derivative financial instrument and convertible loan

Where the fair values of financial instruments recorded on the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the discounted cash flow model. The inputs to these models are derived from observable market data where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The determination of the fair value is based on a probability - weighted expected outcome for the conversion right and taking into consideration of certain parameters such as the issuer's probability of listing on AIM from inception until the maturity of the convertible loan note and the expected return based on the issuer's estimated credit rating. Changes in assumptions about these factors could affect the reported fair value of the derivative financial instrument and convertible loan.

The basis of estimates and the carrying amounts of the derivative financial instrument and convertible loan as at 31 December 2013 are disclosed in Note 16 to the financial information.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Critical accounting estimates and judgements (continued)

ii. Critical judgement in applying the entity's accounting policies

In the opinion of the management, there are no critical judgements made in applying the Group's accounting policies, apart from those involving estimations, which has a significant effect on the amounts recognised in the financial statements.

4. Segmental reporting

In the opinion of the Directors the Group has one class of business, being the provider of Feng Shui services in Singapore, Hong Kong and People's Republic of China.

The Group's primary reporting format is determined by the geographical segment according to the location of its establishments. There are currently two geographic reporting segments: Singapore and, China.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year (2012: nil).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Revenue

6. Other income

7. Personnel expenses and staff numbers (including Directors)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Personnel expenses and staff numbers (including Directors) (continued)

8. Finance expenses, net

9. Other operating expenses

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. Taxation

The Company is incorporated in the UK but is treated as a Singapore resident for tax purposes.

11. Loss per share

Loss per share data is based on the Group profit for the year and the weighted average number of shares in issue.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Investment property

Transfer from property, plant and equipment

On 21 May 2012, the Group transferred leasehold building that was held as owner-occupied property to investment property

The investment property held by the Group as at 31 December 2013 is as follows;

Valuation of investment property

The fair value of the leasehold property is determined by an independent professional valuer with a recognised and relevant professional qualification and with recent experience in the location and category of the property being valued. Valuation is based on the comparison method that considers the sales of similar properties that have been transacted in the open market with adjustments for difference in factors that affect the value.

Property pledge as security

Investment property is secured against the Group's borrowings (Note 22).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Property, plant and equipment

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Property, plant and equipment (continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

14. Property, plant and equipment (continued)

Note A

In the previous financial year, the Group completed the acquisition of a leasehold building with a total floor area of 1,424 square metre for a purchase consideration of SGD 3.2 million from a third party. The Group has also reclassified a certain portion of the leasehold building with a net carrying amount of SGD 2,236,074 to investment property (Note 13) as it has been leased to a third party to generate income during the current financial year. Accordingly, the remaining portion of the leasehold building is used by the Group as its corporate office.

Assets held under finance leases 

During the previous financial year, the Group acquired motor vehicles with an aggregate cost of SGD Nil (2012: SGD 183,499) by means of finance lease.

The carrying amount of office equipment, motor vehicles and renovation held under finance leases at the balance sheet date was SGD 183,499 (2012: SGD 160,356).

Leased assets are pledged as security for the lease obligations (Note 22).

15. Inventories

The cost of inventories recognised as expense and included in 'direct purchase and costs' amounted to SGD 1,056,635 (2012: SGD 1,037,110). 

16. Derivative financial asset

On 22 September 2012, NTL, through its subsidiary, New Trend Lifestyle (HK) Limited ("NTL HK"), entered into a convertible loan agreement ("Agreement") with a third party (the "Issuer") to subscribe for unsecured convertible loan notes ("Convertible Loan Notes") amounting to HKD 2,500,000 (equivalent to SGD 417,875), satisfied in full by cash payment. Under the terms of the Agreement, upon the Issuer's admission to the London's Alternative Investment Market, the Group had the right, but not the obligation, to convert the principal amount into ordinary shares at 50 percent of the subscription price.

Pursuant to the terms of the Agreement, the principal amount was repayable in full, with 6% interest charged per annum, if the conversion did not take place by 31 March 2012. On 30 March 2012, NTL HK and the Issuer agreed to extend the conversion date to 30 September 2012.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

16. Derivative financial asset (continued)

In accordance with IAS 39 Financial Instruments: Recognition and Measurement, the Group has assessed and classified the Convertible Loan Notes as an embedded derivative. Accordingly the Group has engaged an independent professional valuer to determine the fair value of the convertible loan and the derivative financial instrument, taking into consideration certain parameters such as the issuer's probability of listing on AIM from inception until the maturity of the convertible loan note and the expected return based on the issuer's estimated credit rating.

The total subscribed amount for the unsecured convertible loan notes of HKD 2,500,000 (equivalent to SGD 417,875), were segregated into derivative financial instrument component and other receivables (Note 18) of HKD1,219,359 (equivalent to SGD 203,816) and HKD1,280,641 (equivalent to SGD 214,059) respectively.

On 2 August 2012, the Issuer, another third party ("Investee") and NTL HK entered into another agreement ("Second Agreement") and agreed that, subject to the admission of the issued ordinary shares of the Investee on the AIM, NTL HK would subscribe for the Investee's shares and the Investee would allot and issue the Investee's shares to NTL HK at a fully issued and paid up price of £0.04 per share. Accordingly, the principal amount of the Convertible Loan Notes payable by the Issuer under the First Agreement would be applied in satisfaction of the amount to be subscribed by NTL HK for the Investee's shares.

On 17 August 2012 ("Conversion Date"), all the terms and conditions of the Second Agreement were fulfilled and the Convertible Loan Notes were converted into 5,000,000 ordinary shares of the Investee ("Quoted Investments"). Accordingly, the carrying amounts of the derivative financial instrument and other receivable were derecognised and the fair value of the Quoted Investments was recognised at the Conversion Date. The directors assessed, based on the nature and purpose of the Quoted Investments, and concluded to classify as financial assets held at fair value through profit and loss (Note 17). The difference between the carrying amounts of Convertible Loan Notes and the fair value of the Quoted Investments, amounting to HKD 3,907,625 (equivalent to SGD 629,518) was recognised in the consolidated income statement as a gain on conversion during the financial year ended 31 December 2012.

17. Financial assets at fair value through profit or loss

Movements of financial assets, at fair value through profit or loss are as follows: