The board of directors of KFM Kingdom Holdings Limited based on the preliminary review of the unaudited consolidated results of the Group for the ten months ended 31 January 2016 and the information currently available to the company, it is expected that the Group will record a loss for the year ending 31 March 2016, as opposed to a profit for the year ended 31 March 2015. This was mainly attributable to, among other things, decline in revenue of the Group during the ten months ended 31 January 2016 by approximately 20% as compared to the same period last year, among which included a decline of about 44% of the revenue from the Group's metal lathing segment; a decrease in the Group's overall gross margin as a result of the increase in labour cost arising from the increased minimum wages in the PRC; certain professional fees in relation to the Group's corporate actions during the year ending 31 March 2016; additional expenses in relation to the relocation of operation in Suzhou after completion of the Group's new production facilities construction during the period; and the cessation of interest capitalisation of the bank borrowings upon the completion of the Group's new production facilities in Suzhou during the period.