The board of directors of China Water Industry Group Limited informed the shareholders of the company and potential investors of the company that the group is expected to record a consolidated net profit for the year ended 31 December 2012 as compared to a consolidated net loss of HKD 515.81 million recorded in the year of 2011. Such turnaround is primarily attributable to waiver of interests on loans made to the group; interest income received from loan receivables; reversal of impairment losses on loan receivables; non-recurrence losses and impairment losses recognized in 2011 (including, among others, the loss on deemed partial disposal of an associate, the loss on reclassification from an associate to available-for-sale investments and the impairment loss on goodwill); and the substantial decrease in the impairment losses recognized on concession intangible assets, trade and other receivables, and property, plant and equipment.