The board of directors of Sparkle Roll Group Limited announced that based on the preliminary assessment of the unaudited financial information currently available to the Board, the Group is expected to record a substantial loss for the year ended March 31, 2015 as compared with a net profit recorded for the year ended March 31, 2014. This expected loss was mainly as a result of (i) decrease in revenue and gross profit from sales of automobiles, watches and jewelries due to the PRC government's anti-extravagance policies which adversely impacted the demand for the Group's luxury products particularly in the fourth quarter of the current financial year; (ii) approximately HKD 10,000,000 losses on forward foreign exchange contracts as a result of the depreciation of the Euro and Swiss Franc against Hong Kong dollars; and (iii) approximately 30% increase in finance costs arising from purchase of automobiles in the fourth quarter of the current financial year. In addition, in view of the persistent operating losses in watch, jewelry and fine wine segments, the Board expects that the group might also incur impairment losses on certain carrying amounts of intangible assets, property, plant and equipment, in which a substantial amount of impairment losses might be incurred in the business of such segments.

Furthermore, due to decline in financial performance of the automobile business, there is also an impairment indication for the goodwill. Therefore, the Board expects that such impairment losses will further adversely affect the results of the Group for the year ended March 31, 2015.