The board of directors of the Alibaba Health Information Technology Limited announced that the shareholders of the company and potential investors that the group expects to record a substantial loss for the year ended March 31, 2015 as compared to the loss for the year ended March 31, 2014. Based on the information currently available to the group and preliminary review of the unaudited consolidated financial information of the group for the year ended March 31, 2015, the Substantial Loss is mainly attributable to a significant increase in staff costs and sales and marketing expenses, particularly incurred during the fourth quarter of such financial year. Losses from write off of intangible assets and provisions for bad debts also contributed to the Substantial Loss.

The company expects that the Substantial Loss represents an increase in loss of around 200% compared with the loss for the year ended March 31, 2014 (the loss for the year ended March 31, 2014 was approximately HKD 34.6 million (restated)). The group had expected to recognize a before tax gain of approximately HKD 114.1 million in respect of the Settlement Agreement and the reversal of related accruals for the year ended March 31, 2015. Based on further assessment of the company's management, the group expects that it would recognize a before tax gain of approximately HKD 88.0 million in respect of the Settlement Agreement and the reversal of related accruals for the year ended March 31, 2015.

The Substantial Loss has taken into account such difference in estimate of the before tax gain in respect of the Settlement Agreement and the reversal of related accruals.