The board of directors of Yueshou Environmental Holdings Limited informed potential investors and shareholders of the company that based on preliminary assessment of the unaudited consolidated management accounts of the group, the group is expected to record substantial increase in losses for the financial year ended July 31, 2012 as compared with that for the financial year ended 31 July 2011. Such additional losses are primarily attributable to reduction in the sales of development properties held by the Group; loss on fair value change in the plantation assets in the PRC; increase in impairment loss in goodwill of the forestry business in the Philippines and intangible assets; and reduction in gain on fair value change of investment properties.