The board of directors of Serrano Limited announced that the shareholders of the company that the group's net loss for the year ended December 31, 2016 is expected to deepen due to the following reasons: lower turnover due to reduced business activities from the Group's interior fit-out business; cost overruns for projects under the Group's interior fit-out business incurred for variation orders which were not approved by the Group's customers, and reworks undertaken in connection with reinstallation works performed due to non-conformity of specifications with contract requirements, for which the revenue contribution has been fully recognised or reversed due to a reduction in the scope of work, contractual termination by the customer, or contract withdrawals initiated by the Group with the mutual agreement of the Group's customers; write-off of doubtful receivables, overdue retention sums as well as claims for variation orders not approved; and allowance for impairment losses in respect of, inter alia, third parties trade receivables, plant and equipment, retention sums, slow-moving inventories, intangible assets and available-for- sale financial assets.