The board of directors of Fujikon Industrial Holdings Limited expects that the net profit of the company and its subsidiaries (collectively the group) for the six months ended September 30, 2013 will show a decrease as compared to that for the six months ended September 30, 2012. Due to, mainly, (i) the increase in labor costs as a result of the increase in the minimum wage requirement in the PRC; (ii) impairment loss of inventories and property, plant and equipment of the group due to flooding in October 2013 in Zhejiang Province where one of the group's factories, which is principally engages in the production of accessories and components, locates; and (iii) change in the combination of the group's products sold, the group's net profit for the six months ended September 30, 2013 has been adversely affected as compared with the corresponding period in 2012.