The board of directors of Zhong Fa Zhan Holdings Limited informed the shareholders of the company and potential investors that the factors causing such loss continued to exist in the second half of the year ending March 31, 2013, and therefore, it is the current estimate of the company's management that the group is expected to record a loss for the year ending March 31, 2013 as compared to a profit for the year ended March 31, 2012. Based on the financial information currently available to the group, the loss for the year ending March 31, 2013 is mainly attributable to: the company has issued share options to the directors of the company and other eligible participants in June 2012, the fair value of the share options has been recorded as an expense to the company in the reporting period as required by the Hong Kong Financial Reporting Standard 2 share based payment (HKFRS 2) issued by the Hong Kong Institute of Certified Public Accountants; in the year ended March 31, 2012, significant profit was generated from the group's now discontinued operations, which does not recur in the current year; decrease in gross profit with additional production costs and administrative expenses following the group reorganization in 2011.