Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

YUE YUEN INDUSTRIAL (HOLDINGS) LIMITED

裕 元 工 業（ 集 團 ）有 限 公 司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 00551) INSIDE INFORMATION AN UPDATE ON THE STRIKE AND ADJUSTMENT OF EMPLOYEE BENEFIT PAYMENTS

Reference is made to the announcement of the Company dated 17 April 2014 (the "Announcement"). Unless otherwise defined herein, terms in this announcement shall have the same meanings as those ascribed to them in the Announcement.
As announced in the Announcement, some employees of the Gaobu Factory have gone on strike recently. The total number of employees employed by the Group in the Gaobu Factory is about 45,000. As of the date of this announcement, more than 80% of the employees in the Gaobu Factory has returned to work.
For the year ended 31 December 2013, the production volume of the Gaobu Factory relative to the Group amounted to approximately 10%.
Based on the information currently available to the Board, as at the date of this announcement, it is estimated that the loss caused directly by the interruption of Gaobu Factory operations is approximately USD27 million, including additional costs for air freight, loss of profit due to production disruptions, and other fixed costs incurred.
On 17 April 2014, the Company announced that the adjustment of Employee Benefit Payments may have a material adverse effect on the financial performance of the Group. Subsequently, the Company agreed to provide employees of the Gaobu Factory with an additional living allowance of RMB230 per month. It is estimated that the adjustment to the Employee Benefit Payments, together with the said monthly living allowance, will increase the Group's employee benefit expenses for the year ending 31 December 2014 by approximately USD31 million. In addition, the Group will also make post-payment

* for identification purposes only

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contributions to the Employee Benefit Payments. The exact magnitude of which depends on various factors, including but not limited to, the large amount of employees and documentation involved and the particulars in relation to the contributions. Therefore, the contributions cannot be quantified for the time being. The Company will make further announcement regarding the amount of the post-payment contributions in due course.
The information contained in the announcement is only based on the preliminary assessment by the Company's management according to the unaudited consolidated management accounts by the Group currently available which has not been confirmed or reviewed by the auditor of the Company. The Company will continue to evaluate the impact of the strike and the adjustment of the Employee Benefit Payments. Further announcement will be made by the Company as and when required.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By Order of the Board

Lu Chin Chu

Chairman

As at the date of this announcement, the directors of the Company are: Executive Directors:

Mr. Lu Chin Chu (Chairman), Ms. Tsai Pei Chun, Patty (Managing Director), Mr. Tsai Chi Neng, Mr. Kuo Tai Yu, Mr. Kung Sung Yen, Mr. Chan Lu Min, Mr. Li I Nan, Steve, Mr. Lee Shao Wu, Mr. Tsai Ming-Lun, Ming and Mr. George Hong-Chih Liu.

Independent Non-executive Directors:

Dr. Liu Len Yu, Mr. Leung Yee Sik, Mr. Huang Ming Fu, Mr. Chu Li-Sheng, Mr. Yen Mun-Gie (also known as Teresa Yen) and Mr. Hsieh, Yung Hsiang (also known as Alfred Hsieh).

Hong Kong, 25 April 2014
Website: http://www.yueyuen.com
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