The board of directors of the company informed the shareholders of China Seven Star Shopping Limited and potential investors that the group will continue to record a loss for the year ended December 31, 2011 which is mainly due to the pro-rata recognition of the advertisement expenses and the deemed finance charge during the year ended December 31, 2011 according to an agreement dealing with media management services entered into between Shanghai Seven Star Advertising Co., Ltd, and (transliterated as Guangdong Television) on December 31, 2009 and the lower gross margin of home shopping division.