The board of directors informed the shareholders of the Shirble Department Store Holdings (China) Limited and potential investors that based on the preliminary review by the company of the consolidated financial results of the Group for the twelve months ended December 31, 2011, there may be a substantial decrease in the net profit of the Group for the year ended December 31, 2011 as compared to the year ended December 31, 2010. The factors attributable to the decrease in net profit include, the increase in administrative expenses and operating costs (mainly rental expenses and personnel costs) incurred for the immature stores opened in 2010 and 2011 outpacing the increment in sales during the year; impairment loss; increase in personnel costs; and the decrease in advertising and promotion income as a result of more stringent policy imposed by the government of the People's Republic of China in the year.