ONEALL INTERNATIONAL LIMITED AND ITS SUBSIDIARIES · 2016. 2. 26. · ONEALL INTERNATIONAL LIMITED...

ONEALL INTERNATIONAL LIMITED AND ITS SUBSIDIARIES

ABN 75 606 740 701

HALF-YEAR REPORT ENDED 31 DECEMBER 2015 Content

- Corporate Directory - Appendix 4D - Consolidated Financial Statements

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OneAll International Limited – Half Year Report

CORPORATE DIRECTORY

OneAll International Limited ACN 606 740 701 Directors Mr Huatang Li (Executive Chairman & Joint-CEO) Mr Jianhui Cao (Managing Director & Joint-CEO) Mr Jia Ying Chen (Executive Director) Mr Peter Neville Hogan (Non-Executive Director) Mr Fook Weng Au (Non-Executive Director) Company Secretary Mr Su-King Hii Registered Office Level 27 AMP Centre 50 Bridge Street Sydney NSW 2000 Mailing Address PO BOX R126, Royal Exchange NSW 1223 Principal Place of Business in Australia Suite 54 Level 8, 591 George Street, SYDNEY NSW 2000 Principal Place of Business in China Unit 704, No. 123 Ti Yu Xi Road, Guangzhou 510620, China Bankers Bank of China Limited, Sydney Branch, 39-41 York Street, Sydney NSW 2000 Share Registrar Boardroom Pty Ltd Level 12 225 George Street Sydney NSW 2000 Auditors BDO East Coast Partnership Level 14, 140 William Street Melbourne, VIC 3000 Internet Address http://www.oneallinternational.com (English Website)

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OneAll International Limited

– Half Year Report

Appendix 4D

Half Year Report Given to the ASX under Listing Rule 4.2A Name of entity

OneAll International Limited

ABN

75 606 740 701

Reporting period

Half Year ended 31 December 2015

Previous corresponding period

Half Year ended 31 December 2014

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1. Results for Announcement to the Market

Revenue from continuing operations Up 6% to $17,832,189 Profit from ordinary operations after income tax attributable to members

Down 12% to $4,105,769

Net profit for the period attributable to members Down 12% to $4,105,769

Net tangible asset value per share As at 31 December 2015 $0.26 As at 30 June 2015 N/A

2. Review of Operations

A review of operations is included in the Directors’ Report.

3. Details of Controlled Entities

During the period the Company gained control of Gardenart Furniture Co. Limited and its controlled subsidiaries. A summary is included in the Directors’ report.

4. Details of Associates and Joint Venture Entities

N/A

5. Dividends

An unfranked dividend for 4 cents per fully paid shares was declared on 7 December 2015. Dividend Dates Ex-dividend date 17 February 2016 Record date 19 February 2016 Payment date 26 February 2016

6. Audit Disputes or Qualifications

There are no audit disputes or qualifications.

7. Accounting Standards

Australian Accounting Standards have been used in complying the information contained in Appendix 4D.

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ONEALL INTERNATIONAL LIMITED AND ITS SUBSIDIARIES ABN 75 606 740 701

Consolidated Financial Statements For the Half Year Ended 31 December 2015

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Contents Page

Directors’ Report 7

Auditor’s Independence Declaration 10

Consolidated Statement of Profit or Loss and Other Comprehensive Income 11

Consolidated Statement of Financial Position 12

Consolidated Statement of Changes in Equity 13

Consolidated Statement of Cash Flows 14

Notes to the Consolidated Financial Statements 15

Declaration by Directors 21

Independent Auditor’s Review Report 22

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Directors’ Report 31 December 2015

1. General Information

The Directors in office at any time during, or since the end of the period are:

Mr Huatang Li (Executive Chairman & Joint-CEO) (appointed 29 June 2015) Mr Jianhui Cao (Managing Director & Joint-CEO) (appointed 29 June 2015) Mr Jia Ying Chen (Executive Director) (appointed 29 June 2015) Mr Peter Neville Hogan (Non-Executive Director) (appointed 18 August 2015) Mr Fook Weng Au (Non-Executive Director) (appointed 18 August 2015)

2. Principal activities

The consolidated Group is a leading premium outdoor furniture designer, manufacturer and distributor recognised for its innovative and award-winning designs, as well as high-quality manufacturing capabilities. During the period, the principal activities of the consolidated entity consisted of the design, manufacture, sale and distribution of outdoor furniture.

3. Review of operations

The Group recorded sales revenue of $17,638,622 (or RMB 81 million) for the 6 months ended 31 December 2015, an encouraging result compared to $16,665,571 (or RMB 91 million) for the previous corresponding period in 2014. Net profit after tax for the 6 months to 31 December 2015 was $4,105,769 (or RMB 19 million), compared to the previous corresponding period in 2014 of $4,654,675 (or RMB 26 million). While the Group's sales revenue for the half year as expressed in AUD remained strong and gross margins achieved by the Group over the range of its products continued to improve, a significant contributor to this outcome was the weakening of the AUD during this period. However, the benefit of the weakening AUD helped soften the impact of difficult trading conditions experienced in a number of our key markets which resulted in a reduction to the overall volume of units sold when compared to the corresponding period in 2014. The Group experienced some challenging market conditions in Europe and other key regions during the period, with weakened consumer confidence leading to a number of customers deferred or cancelled purchase plans for its outdoor furniture products. The important June to August order period for outdoor furniture in the northern hemisphere was also impacted by an unseasonably wet month here in May 2015, which subsequently affected sales in June and July 2015. A decision by the Turkish Government to impose an additional 50% import duty on furniture from China naturally resulted in a serious decline in exports to this country. The significant devaluation of some currencies against the US dollar (USD), in particular in Turkey and Brazil, also had a negative effect on sales as all the Group’s sales are made in USD. Improvements in the Group's production capacity resulted in a reduction in the lead time for orders during the period from January to June 2015. As a result, sales revenue in that period was significantly more than the sales revenue in the corresponding period in 2014. However, this acceleration of shipments also contributed to the reduction in sales volume in the December 2015 half year period. Despite this, total sales revenue from January to December in 2015 was $40,948,382, whereas total sales revenue in the corresponding period from January to December in 2014 was $36,382,000. Despite the difficult trading conditions experienced during the half year it is very encouraging that the Group's gross margin increased from 39% to 45% when compared to the corresponding period in 2014. This positive outcome suggests that customers continue to value the Group's products design, branding, manufacturing quality and the services provided by the Group. The decrease in Group's net profit after tax was largely due to an increase in administration costs of $1.4 million (RMB 5.8 million). This increase was mainly due to the significant uncapitalised IPO related costs, along with an increase in employee costs. The Group's income tax liability also increased by $0.8 million (RMB 3.4 million) as the Group expanded its business operations conducted by Gardenart Hong Kong.

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Directors’ Report (Continued)

31 December 2015

3. Review of operations (continued) The Group anticipates that consumer confidence in some key markets will remain weak for the remainder of the financial year as the economies in those markets continue to experience challenges. Weak consumer confidence is expected to continue to put pressure on sales volumes in these markets. It is also expected that the USD will continue to strengthen and this will put pressure on sales volumes in some markets. However, from an overall prospective, a strong USD is expected to have a positive impact on the Group’s financial results. Despite challenging market conditions, the Group expects to experience for the remainder of the financial year, margins are expected to remain strong as lead times and service delivery strategies continue to improve. Sales volume are also expected to improve as market share in key regions is grown. As such, the Group is confident that its financial performance in the second half of the financial year will be significantly improved over the first half. 4. Significant changes in the state of affairs

The Company was incorporated in Australia on 29 June 2015. Restructuring The operating business companies are Gardenart Furniture Co. Limited (“Gardenart Hong Kong”) and its subsidiaries Zhaoqing Vcare Industrial Co., Ltd (“Zhaoqing Vcare”),Guangzhou Gardenart Furniture Co., Ltd (“Gardenart Guangzhou”), and Gardenart Co., Limited (“Gardenart BVI”), collectively the “Gardenart Group”. In order to IPO on the ASX, a Group restructure, commenced in June 2015 and completed in August 2015, resulted in:

- the acquisition by the Company of Gardenart Hong Kong, together with its wholly owned subsidiaries Zhaoqing Vcare which is the main manufacturing base of the business in China and Gardenart BVI;

- the acquisition by Zhaoqing Vcare of Gardenart Guangzhou which is the main exporting/quality controlling company in China.

This restructuring constitutes a business combination under common control and, therefore, this financial report has been prepared as a continuation of the Gardenart Group. Through the transactions above, effective control of Gardenart Hong Kong and its subsidiaries passed to the Company. The transaction is one referred to in AASB 3 Business Combination as a business combination of entities or business under common control, where following the reconstruction the Company took control of Gardenart Hong Kong and its subsidiaries with no change in underlying control. On 3 December 2015, the Company completed its initial public offering (IPO) and was listed on the Australian Securities Exchange (ASX), successfully raising gross proceeds of $13,000,000, for a price of $1.00 per share issuing 13,000,000 shares for a transaction cost of $2,275,414. There were no other significant changes in the state of affairs of the consolidated entity during the financial period. 5. Dividends

During the period, an unfranked dividend for 4 cents per fully paid shares was declared on 7 December 2015, amounting to $5,160,000. It will be paid on 26 February 2016.

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Directors’ Report (Continued) 31 December 2015 6. Auditor’s Independence Declaration A copy of the independence declaration by the lead auditor under section 307C is included on Page 10 to these half year financial statements. This report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by: ________________________________ Huatang Li Executive Chairman 26 February 2016 Gold Coast, Australia

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Level 14, 140 William St Melbourne VIC 3000 GPO Box 5099 Melbourne VIC 3001 Australia

Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au

BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

DECLARATION OF INDEPENDENCE BY WAI AW TO THE DIRECTORS OF ONEALL INTERNATIONAL

LIMITED

As lead auditor for the review of OneAll International Limited for the half-year ended 31 December

2015, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the review; and

2. No contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of OneAll International Limited and the entities it controlled during the

period.

WAI AW

Partner

BDO East Coast Partnership

Melbourne, 26 February 2016

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ONEALL INTERNATIONAL LIMITED AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS

FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

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Consolidated Statement of Profit or Loss and Other Comprehensive Income For The Half-Year Ended 31 December 2015

Note

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $ Revenue from continuing operations 5 17,832,189 16,834,621 Cost of sales (9,820,891) (10,195,466) Gross profit 8,011,298 6,639,155 Other income 295,158 - Administration expenses (2,020,094) (634,154) Sales expenses (1,058,312) (923,652) Research and development expenses (27,176) (38,090) Finance costs (22,789) (18,127) Other expenses (104,312) (173,681) Profit before income tax expense 5,073,773 4,851,451 Income tax expense 7 (968,004) (196,776) Net Profit for the period 4,105,769 4,654,675 Other comprehensive income

Items that may be reclassified subsequently to profit or loss Foreign currency translation differences (67,821) 2,356,569 Other comprehensive income for the period, net of tax (67,821) 2,356,569 Total comprehensive income for the period 4,037,948 7,011,244

Profit is attributable to Owners of OneAll International Limited 4,105,769 4,654,675 4,105,769 4,654,675

Total comprehensive income for the year is attributable to Owners of OneAll International Limited 4,037,948 7,011,244 4,037,948 7,011,244

Earnings per share Cents Cents Overall operations Basic earnings per share 5.34 N/A Diluted earnings per share 5.34 N/A

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

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Consolidated Statement of Financial Position As at 31 December 2015

Note

31 December 2015

30 June 2015

$ $ ASSETS Current assets Cash and cash equivalents 13,096,245 13,885,411 Trade and other receivables 3,949,924 7,433,351 Inventories 11,701,377 7,442,844 Prepayments and other assets 1,971,152 341,207 Total current assets 30,718,698 29,102,813 Non-current assets Property, plant and equipment 4,898,365 4,758,142 Prepaid lease assets 826,145 831,967 Total non-current assets 5,724,510 5,590,109 Total assets 36,443,208 34,692,922

LIABILITIES Current liabilities Trade and other payables 5,853,677 6,239,638 Other liabilities 3,591,026 2,489,670 Current tax liabilities 1,517,563 802,821 Dividend payable 6 5,160,000 14,442,388 Total current liabilities 16,122,266 23,974,517 Total liabilities 16,122,266 23,974,517

Net assets 20,320,942 10,718,405

EQUITY Contributed equity 8 12,021,870 1,297,281 Reserves 9 4,911,951 4,979,772 Retained earnings 3,387,121 4,441,352 Total equity 20,320,942 10,718,405

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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Consolidated Statement of Changes in Equity For The Half-Year Ended 31 December 2015

Contributed equity

Retained earnings Foreign currency translation reserve

Total equity

$ $ $ $

At 1 July 2014 1,297,281 9,440,303 1,538,102 12,275,686

Total comprehensive income

Profit for the period - 4,654,675 - 4,654,675 Other comprehensive income - - 2,356,569 2,356,569

Total comprehensive income - 4,654,675 2,356,569 7,011,244

Transactions with owners in their capacity as owners - - - - At 31 December 2014 1,297,281 14,094,978 3,894,671 19,286,930

At 1 July 2015 1,297,281 4,441,352 4,979,772 10,718,405

Total comprehensive income

Profit for the period - 4,105,769 - 4,105,769 Other comprehensive income - - (67,821) (67,821)

Total comprehensive income - 4,105,769 (67,821) 4,037,948 Contributions of equity, net of transaction costs 10,724,589 - - 10,724,589 Dividends declared - (5,160,000) - (5,160,000) Transactions with owners in their capacity as owners 10,724,589 (5,160,000) - 5,564,589

At 31 December 2015 12,021,870 3,387,121 4,911,951 20,320,942 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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Consolidated Statement of Cash Flows For The Half-Year Ended 31 December 2015

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from customers 23,309,424 15,565,090

Payments to suppliers and employees (19,754,017) (13,194,715)

Interest received 24,711 2,926

Income tax paid (233,098) -

NET CASH PROVIDED BY OPERATING ACTIVITIES 3,347,020 2,373,301

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for purchase of property, plant and equipment (330,550) (145,176)

NET CASH USED IN INVESTING ACTIVITIES (330,550) (145,176)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of shares 13,000,000 -

Share issue transaction costs (2,275,414) -

Dividends paid to company shareholders (14,996,158) (3,171,194)

NET CASH USED IN FINANCING ACTIVITIES (4,271,572) (3,171,194)

NET DECREASE IN CASH HELD (1,255,102) (943,069)

Cash and cash equivalents at beginning of the period 13,885,411 6,413,243 Effect of exchange rate changes on the balance of cash held in foreign currency 465,936 884,632

CASH AT END OF PERIOD 13,096,245 6,354,806

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Notes to the Consolidated Financial Statements For The Half-Year Ended 31 December 2015 Note 1. Corporate information The financial statements of OneAll International Limited for the period ended 31 December 2015 were authorised for issue in accordance with a resolution of the directors on 26 February 2016 and covers OneAll International Limited as the consolidated entity consisting of OneAll International Limited and its subsidiaries as required by the Corporations Act 2001. OneAll International Limited is a for-profit entity for the purpose of preparing these financial statements. The financial statements are presented in Australian dollars. OneAll International Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. Its registered office and principal place of business are: Registered Office Level 27 AMP Centre 50 Bridge Street Sydney NSW 2000 Principal Place of Business in Australia Suite 54 Level 8, 591 George Street, SYDNEY NSW 2000 Principal Place of Business in China Unit 704, No. 123 Ti Yu Xi Road, Guangzhou 510620, China Note 2. Significant accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. Basis of preparation This is the first financial report of OneAll International Limited as a consolidated entity consisting of OneAll International Limited and the entities it controlled. These general purpose financial statements for this interim half-year reporting period ended 31 December 2015 have been prepared in accordance with Australian Accounting Standard AASB 134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'. These financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the audited accounts of the Gardenart Group lodged with ASX and the Company’s financial section of the Prospectus dated 20 October 2015 issued as part of the IPO. New, revised or amending Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Historical cost convention The financial statements have been prepared under the historical cost convention. Restructuring The operating business companies are Gardenart Furniture Co. Limited (“Gardenart Hong Kong”) and its subsidiaries Zhaoqing Vcare Industrial Co., Ltd (“Zhaoqing Vcare”),Guanzhou Gardenart Furniture Co., Ltd (“Gardenart Guangzhou”), and Gardenart Co., Limited (“Gardenart BVI”), collectively the “Gardenart Group”. The Group has been restructured as part of an IPO process with OneAll International Limited (“OneAll”) being incorporated in Australia on 29 June 2015.

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Notes to the Consolidated Financial Statements For The Half-Year Ended 31 December 2015 Note 2. Significant accounting policies (continued) Restructuring (continued) In order to IPO on ASX, a Group restructure, commenced in June 2015 and was completed in August 2015, resulted in:

- the acquisition by the Company of Gardenart Hong Kong, together with its wholly owned subsidiaries Zhaoqing Vcare which is the main manufacturing base of the business in China and GardenartBVI;

- the acquisition by Zhaoqing Vcare of Gardenart Guangzhou which is the main exporting/quality controlling company in China.

This restructuring constitutes a business combination under common control and, therefore, this financial report has been prepared as a continuation of the Gardenart Group Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3. Fair value When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. The carrying amount of other current receivables, prepayment and current payables is assumed to approximate the fair value. Foreign currency translation The financial statements are presented in Australian dollars. The functional currency of Gardenart Furniture Co. Limited and its subsidiaries is Chinese Yuan Renminbi. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rate at the date of the transaction, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. Basis of consolidation The consolidated financial statements comprise the financial statements of OneAll International Limited and its subsidiaries at 31 December 2015 (“the Group”). The Group was restructured as part of an IPO process and the transaction represents a common control transaction.

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Notes to the Consolidated Financial Statements For The Half-Year Ended 31 December 2015

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Note 2. Significant accounting policies (continued)

Basis of consolidation (continued) Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Where shareholding is less than one-half of the voting rights, the Group is considered to have control over the entity when it can exercise power over more than one-half of its voting rights by virtue of an agreement with other shareholders. Acquisitions of entities under common control Business combinations arising from transfer of interests in entities that are under the control of the shareholders that controls the Group are accounted for as if the acquisition had occurred at the beginning of the earliest comparative year presented or, if later, at the date that common control was established; for this purpose comparatives are restated. The assets and liabilities acquired are recognised at the carrying amounts recognised previously in the Group controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to the same components within the Group equity and any gain/loss arising is recognised directly in equity. Subsidiaries Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Potential voting rights that are currently exercisable or convertible are considered when assessing control. Consolidated financial statements include all the subsidiaries other than those acquired in business combinations involving entities under common control from the date that control commences until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from intra Group transactions have been eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Investments in subsidiaries are accounted for in the parent entity financial statements at cost. Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Estimation of useful lives of assets The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life prepaid lease assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold are written off or written down. Income tax The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

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Note 3. Critical accounting judgements, estimates and assumptions (continued) Provision for impairment of inventories The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence. Note 4. Segment Information Description of segment The Company’s segment information is presented using a 'management approach', i.e. segment information is provided on the same basis as information used for internal reporting purposes by the chief operating decision maker (the board of directors that makes strategic decisions). The Company has only one operating segment, which is the sales of self-produced and designed outdoor furniture. No additional information needs to be disclosed. Note 5.Revenue

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $

Sales revenue

Sales of goods 17,638,622 16,665,571

17,638,622 16,665,571

Other revenue

Interest 24,711 2,926

Others 168,856 166,124

193,567 169,050

Total revenue 17,832,189 16,834,621

Note 6. Dividends

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $

Dividends declared 5,160,000 -

5,160,000 -

An unfranked dividend for 4 cents per fully paid shares was declared on 7 December 2015. The Group generates all operating profits from overseas subsidiaries in Hong Kong, mainland China and British Virgin Island and therefore all dividends were unfranked dividends.

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Note 6. Dividends (continued)

31 December 2015

30 June 2015

$ $

Dividend payable 5,160,000 14,442,388

During the period, there were $5,160,000 of dividend declared, which will be paid on 26 February 2016. Dividend payable at 30 June 2015 (RMB 68,833,856) was paid to the shareholders during the current period. Note 7. Income tax expense The Group calculates the period income tax expense using the tax rate that would be applicable to expected total annual earnings. The major components of income tax expense in the interim statement of profit or loss are:

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $

Income tax expense

Current income tax expense 968,004 196,776

Income tax expense recognised in the statement of profit or loss 968,004 196,776

Note 8.Equity –contributed equity (a)Share capital

31 December 2015 30 June 2015

Shares $ Shares $

Ordinary shares fully paid 129,000,000 12,021,870 N/A* 1,297,281*

*The contributed equity represents the accumulated contributed equity within the subsidiaries (i.e Gardenart Group of companies). (b) Movements in share capital

Details Date Number of shares Issue price $

Issued on incorporation 29/06/2015 3 $1.00 3

Issued as part of the restructure 27/08/2015 115,999,997 $0.01 1,297,281

Initial public offering on ASX 03/12/2015 13,000,000 $1.00 13,000,000 Less: transaction costs arising on shares issued (2,275,414)

At 31 December 2015 129,000,000 12,021,870

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Note 9. Equity - reserves

31 December 2015

30 June 2015

$ $

Foreign currency reserve 4,911,951 4,979,772

Foreign currency reserve The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to Australian dollars. Note 10.Contingencies The consolidated entity has no contingent liabilities and capital commitments as at 31 December 2015 (30 June 2015: Nil). Note 11.Related party transactions Transactions with related parties The following transactions occurred with related parties:

Half-Year ended

31 December 2015

Half-Year ended

31 December 2014

$ $

Payment for goods and services:

Qihe Trading Co., Ltd (Director related entity of Jianhui Cao and Huatang Li) 120,229 249,263

Receivable from and payable to related parties The following balances are outstanding at the reporting date in relation to transactions with related parties:

31 December 2015

30 June 2015

$ $

Current payables:

Trade payables to Qihe (Director related entity of Jianhui Cao and Huatang Li)

219,418 198,032

Other payables (Director Huatang Li) 137,975 - Current receivables: Trade receivables from Qihe (Director related entity of Jianhui Cao and Huatang Li)

287,357 347,997

Terms and conditions All transactions were made on normal commercial terms and conditions and at market rates. Note 12.Events occurring after the reporting period No other matter or circumstance has arisen since 31 December 2015 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. F

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Declaration by Directors The directors of the company declare that:

(a) The financial statements and notes set out on pages 11 to 20 are in accordance with the Corporations Act 2001 and:

(i) comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

(ii) give a true and fair view of the consolidated entity's financial position as at 31 December 2015 and of its performance for the half-year ended on that date.

(b) In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and

when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

________________________________ Huatang Li Executive Chairman 26 February 2016 Gold Coast, Australia

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Level 14, 140 William St Melbourne VIC 3000 GPO Box 5099 Melbourne VIC 3001 Australia

Tel: +61 3 9603 1700 Fax: +61 3 9602 3870 www.bdo.com.au

BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees.

INDEPENDENT AUDITOR’S REVIEW REPORT

To the members of OneAll International Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of OneAll International Limited, which

comprises the consolidated statement of financial position as at 31 December 2015, the consolidated

statement of profit or loss and other comprehensive income, the consolidated statement of changes in

equity and the consolidated statement of cash flows for the half-year ended on that date, notes

comprising a statement of accounting policies and other explanatory information, and the directors’

declaration of the consolidated entity comprising the company and the entities it controlled at the

half-year’s end or from time to time during the half-year.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that

gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act

2001 and for such internal control as the directors determine is necessary to enable the preparation of

the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We

conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review

of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether,

on the basis of the procedures described, we have become aware of any matter that makes us believe

that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving

a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and its

performance for the half-year ended on that date; and complying with Accounting Standard AASB 134

Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of OneAll

International Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to

the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible

for financial and accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with Australian Auditing Standards

and consequently does not enable us to obtain assurance that we would become aware of all significant

matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations

Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which

has been given to the directors of OneAll International Limited, would be in the same terms if given to

the directors as at the time of this auditor’s review report.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us

believe that the half-year financial report of OneAll International Limited is not in accordance with the

Corporations Act 2001 including:

(a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015

and of its performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations

Regulations 2001.

BDO East Coast Partnership

Wai Aw

Partner

Melbourne, 26 February 2016

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ONEALL INTERNATIONAL LIMITED AND ITS SUBSIDIARIES · 2016. 2. 26. · ONEALL INTERNATIONAL LIMITED...

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