- -
BLU SPA HOLDINGS LIMITED
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 8176)
INTERIM ANNOUNCEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK
EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)
GEM has been established as a market designed to accommodate companies to which a high
investment risk may be attached. In particular, companies may list on GEM with neither a track
record of profitability nor any obligation to forecast future profitability. Furthermore, there may
be risks arising out of the emerging nature of companies listed on GEM and the business sectors
or countries in which the companies operate. Prospective investors should be aware of the potential
risks of investing in such companies and should make the decision to invest only after due and
careful consideration. The greater risk profile and other characteristics of GEM mean that it is
a market more suited to professional and other sophisticated investors.
Given the emerging nature of companies listed on GEM, there is a risk that securities traded on
GEM may be more susceptible to high market volatility than securities traded on the Main Board
and no assurance is given that there will be a liquid market in the securities traded on GEM.
The principal means of information dissemination on GEM is publication on the internet website
operated by the Stock Exchange. Listed companies are not generally required to issue paid
announcements in gazetted newspapers. Accordingly, prospective investors should note that they
need to have access to the GEM website in order to obtain up-to-date information on GEM-listed
issuers.

This announcement, for which the directors (the “Directors”) of Blu Spa Holdings Limited (the
“Company”) collectively and individually accept responsibility, includes particulars given in compliance
with the Rules Governing the Listing of Securities on GEM (the “GEM Listing Rules”) for the purpose of
giving information with regard to Blu Spa Holdings Limited. The Directors, having made all reasonable
enquiries, confirm that, to the best of their knowledge and belief (1) the information contained in this
announcement is accurate and complete in all material respects and not misleading: (2) there are no
other matters the omission of which would make any statement in this announcement misleading: and
(3) all opinions expressed in this announcement have been arrived at after due and careful consideration
and are founded on bases and assumptions that are fair and reasonable.

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SUMMARY

– The unaudited consolidated turnover of the Group for the six months ended 3 December 007
was approximately HK$5,888,000, representing an increase of approximately HK$5,33,000
or approximately 7 times as compared to the unaudited consolidated turnover of the Group of
approximately HK$755,000 for the corresponding period in 006.
– The loss attributable to shareholders for the six months ended 3 December 007 was
approximately HK$,50,000, representing an decrease of loss of approximately HK$,97,000
or approximately 46% as compared to the loss attributable to shareholders of approximately
HK$,87,000 for the corresponding period in 006.
– The board did not recommend the payment of an interim dividend for the six months ended
3 December 007.

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UNAUDITED INTERIM RESULTS

The board of directors (the “Board”) of Blu Spa Holdings Limited (the “Company”) is pleased to
announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (the
“Group”) for the six months and three months ended 3 December 007 together with the comparative
figures for the corresponding periods in 006. The condensed consolidated interim financial statements
have not been audited, but have been reviewed by the Company’s audit committee.
CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited) (Unaudited)
For the six For the six For the three For the three
months ended months ended months ended months ended
31 December 3 December 31 December 3 December
2007 006 2007 006

Notes HK$’000 HK$’000 HK$’000 HK$’000
Turnover 3 5,888 755 2,677 648
Cost of sales (4,205 ) (,7 ) (1,671 ) (,098 )

Gross profit/(loss) 1,683 (36 ) 1,006 (450 )
Other revenue 19 79 17 79
Distribution costs – – – 36
Administrative expenses (2,885 ) (,69 ) (1,740 ) (67 )

Loss from operations 4 (1,183 ) (,45 ) (717 ) (,006 )
Finance costs 5 (337 ) (365 ) (147 ) (89 )

Loss before taxation (1,520 ) (,87 ) (864 ) (,95 )
Taxation 6 – – – –

Loss attributable to
shareholders (1,520 ) (,87 ) (864 ) (,95 )

Loss per share
(in HK cents) 8 (0.25 ) (0.46 ) (0.14 ) (0.0 )

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CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited) (Audited)
As at As at
31 December 30 June
2007 007

Notes HK$’000 HK$’000
NON-CURRENT ASSETS

Intangible assets 10,764 ,3
Plant and equipment 590 578

11,354 ,80

CURRENT ASSETS

Inventories 514 6
Trade receivables 9 3,266 ,44
Deposits and other receivables 701 557
Bank balances and cash 221 6

4,702 ,978

CURRENT LIABILITIES

Deposit received 1,150 676
Accruals and other payables 6,761 5,87
Amount due to directors 10 15,749 0,576
Amount due to shareholders 11 – ,550
Amount due to related companies 12 2,956 67
Obligation under finance lease – 0
Provision for taxation 4 4

(26,620 ) (9,60 )

NET CURRENT LIABILITIES (21,918 ) (7,8 )

TOTAL ASSETS LESS CURRENT LIABILITIES (10,564 ) (5,47 )

NON-CURRENT LIABILITIES

Amount due to shareholders 11 – 3,57

– (3,57 )

NET LIABILITIES (10,564 ) (9,044 )

CAPITAL AND RESERVES

Share capital 13 6,068 6,068
Reserves (16,632 ) (5, )

(10,564 ) (9,044 )

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)
Share Share Merger Translation Accumulated
Capital Premium Difference Reserve Losses Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At July 007 6,068 19,740 22,735 (9 ) (57,578 ) (9,044 )
Exchange differences
arising from
translation of
operations outside
Hong Kong – – – – – –
Loss for the period – – – – (1,520 ) (1,520 )

At 3 December 007 6,068 19,740 22,735 (9 ) (59,098 ) (10,564 )

At July 006 6,068 9,740 ,735 ( ) (53,843 ) (5,30 )
Exchange differences
arising from
translation of
operations outside
Hong Kong – – – 3 – 3
Loss for the period – – – – (,87 ) (,87 )

At 3 December 006 6,068 9,740 ,735 (56,660 ) (8,5 )

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CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(Unaudited) (Unaudited)
For the six For the six
months ended months ended
31 December 3 December
2007 006

HK$’000 HK$’000
NET CASH GENERATED FROM/(USED IN)
OPERATING ACTIVITIES 5,185 (,58 )
NET CASH (USED IN) INVESTING ACTIVITIES (83 ) –
NET CASH (USED IN)/GENERATED FROM
FINANCING ACTIVITIES (5,142 ) ,397

(DECREASE)/INCREASE IN CASH
AND CASH EQUIVALENTS (40 ) 39
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 261 70

EFFECT OF FOREIGN EXCHANGE RATE CHANGES – 3

CASH AND CASH EQUIVALENTS
AT ENDED OF PERIOD,

represented by bank balances and cash 221

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NOTES
1. GENERAL AND BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company was incorporated in the Cayman Islands on 30 August 00 as an exempted company with
limited liability under the Companies Law Cap. (Law 3 of 96, as consolidated and revised) of the
Cayman Islands.
The Company is an investment holding company.
Basis of Preparation of Financial Statements
The Group incurred a loss attributable to the shareholders of approximately HK$,50,000 for the six
months ended 3 December 007. In addition, the Group had net current liabilities and net liabilities of
approximately HK$,98,000 and HK$0,564,000, respectively, as at 3 December 007. Notwithstanding
this, the financial statements have been prepared on the assumption that the Group will continue to operate as
a going concern. In the opinion of the Directors, the Group will have sufficient working capital to continue
its operations in the coming year, after taking into consideration of the following:
(a) The Group is undergoing serious negotiations with interested investors for new equity to be introduced
to the Group;
(b) The Group has taken ongoing action to tighten cost controls over various general and administrative
expenses;
(c) The Group will continue to promote and sell its products through selected distributors. At present, the
Group engaged distributors for Hong Kong, the PRC and Taiwan markets respectively. The Group will
continue to identify and negotiate with other prospective distributors in the Southeast Asia market;
(d) The Group will continue to negotiate to set up more spa centers in the club house of prestige residential
developments in Hong Kong.
In the opinion of the Directors, in light of the measures taken to date and on the basis of the above-
mentioned assumptions, the Group would have sufficient working capital to finance its operation to maintain
its operating existence in the foreseeable future. Accordingly, the Directors are satisfied that it is appropriate
to prepare the accounts on a going concern basis.
The financial statements have not incorporated any adjustments for the possible failure of the Group to
implement the aforesaid measures. Should the Group be unable to continue as a going concern, adjustments
would have to be made to restate the values of the assets to their recoverable amounts, to provide for any
further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and
liabilities, respectively. The consequential effects of these potential adjustments have not been reflected in
the financial statements as at 3 December 007.

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2. PRINCIPAL ACCOUNTING POLICIES

The unaudited condensed consolidated financial statements have been prepared under the historical cost
convention.
The unaudited condensed consolidated financial statements for the six months ended 3 December 007
have been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial
Reporting” and the applicable disclosure requirements of Chapter 8 of the GEM Listing Rules. The
accounting policies used in the unaudited consolidated financial statements are consistent with those followed
in the preparation of the Group’s annual financial statements for the year ended 30 June 007.
Impact of new Hong Kong Financial Reporting Standards
The Hong Kong Institute of Certified Public Accountants has issued a number of new standards, amendments
and interpretations (“new HKFRSs”), which are either effective for annual periods beginning on or after
November 006, January 007 or March 007. The Group has adopted the following new HKFRSs,
which are applicable to the Group’s financial statements for the six months ended 3 December 007:
HKAS (Amendment) Capital disclosures

HKFRS 7 Financial instruments: Disclosures

HK(IFRIC) – Int 0 Interim Financial Reporting and Impairment

HK(IFRIC) – Int HKFRS – Group and Treasury Share Transactions
3

Effective for annual periods beginning on or after 1 January 2007.

Effective for annual periods beginning on or after 1 November 2006.
3
Effective for annual periods beginning on or after 1 March 2007.
The adoption of the new HKFRSs had no material effect on how the results for the current or prior accounting
periods have been prepared and presented. Accordingly, no prior period adjustment has been required.
3. BUSINESS AND GEOGRAPHICAL SEGMENTS

Turnover represents the net amounts received and receivables for goods sold, therapy services performed
and beauty training services rendered, less returns and allowances, by the Group to outside customers.
An analysis of the Group’s turnover and contribution to operating results and segment assets and liabilities
by business and geographical segments is as follows:

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For the six months ended 31 December 2007 (Unaudited)
The
People’s
Republic
of China Hong Kong Others Consolidated
HK$’000 HK$’000 HK$’000 HK$’000
TURNOVER

External sales
– Distributorship 4,451 23 – 4,474
– Retailing and therapy services – 414 – 414
– Beauty training 1,000 – – 1,000

Total revenue 5,451 437 – 5,888

RESULT

Segment result 3,019 (1,336 ) – 1,683

Unallocated corporate income 18
Unallocated corporate expense (2,885 )
Interest income 1
Finance costs (337 )
Taxation –

Loss for the period (1,520 )

Assets and liabilities at 31 December 2007 (Unaudited)
ASSETS

Segment assets – 3,266 – 3,266
Unallocated corporate assets 12,790

Consolidated total assets 16,056

LIABILITIES

Segment liabilities – – – –
Unallocated corporate liabilities 26,620

Consolidated total liabilities 26,620

- 0 -
For the six months ended 3 December 006 (Unaudited)
The
People’s
Republic
of China Hong Kong Others Consolidated
HK$’000 HK$’000 HK$’000 HK$’000
TURNOVER

External sales
– Distributorship 469 86 3 568
– Retailing and therapy services 9 58 – 87

Total revenue 498 44 3 755

RESULT

Segment result 4 (777 ) 4 (36 )

Unallocated corporate income 79
Unallocated corporate expenses (,69 )
Interest income –
Finance costs (365 )
Taxation –

Loss for the period (,87 )

Assets and liabilities at 3 December 006 (Unaudited)
ASSETS

Segment assets – 38 – 38
Unallocated corporate assets 3,088

Consolidated total assets 3,6

LIABILITIES

Segment liabilities – – – –
Unallocated corporate liabilities ,34

Consolidated total liabilities ,34

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4. LOSS FROM OPERATIONS

(Unaudited) (Unaudited)
Six months ended Three months ended
31 December 31 December
2007 006 2007 006

HK$’000 HK$’000 HK$’000 HK$’000
Loss from operations has been
arrived at after charging:
Directors’ remuneration 1 5 –
Other staff costs 1,593 , 812 68
Retirement benefit scheme
contributions 41 43 11

Total staff costs 1,635 ,70 823 64

Depreciation 80 98 42 49
Amortization of intangible assets 468 468 234 34

5. FINANCE COSTS

(Unaudited) (Unaudited)
Six months ended Three months ended
31 December 31 December
2007 006 2007 006

HK$’000 HK$’000 HK$’000 HK$’000
Interest on:
Loans from shareholders and directors 337 363 148 88
Interest on finance lease – (1 )

337 365 147 89

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6. TAXATION

(Unaudited) (Unaudited)
Six months ended Three months ended
31 December 31 December
2007 006 2007 006

HK$’000 HK$’000 HK$’000 HK$’000
The charge (credit) comprises:
Company and subsidiaries
Current period profits tax
– PRC – – – –
Deferred tax
Credit of current period – – – –

Taxation attributable to the Group – – – –

Tax arising in the PRC are calculated at the rates of tax prevailing in the PRC.
No provision for Hong Kong Profits Tax has been made for the six months ended 3 December 007 and
the corresponding period in 006, as the Group has no assessable profits for the respective periods.
7. DIVIDEND

No dividend was paid or proposed for the six months ended 3 December 007 (006: HK$Nil), nor has
any dividend been proposed since the balance sheet date.
8. LOSS PER SHARE

The calculation of the basic loss per share for the six months ended 3 December 007 is based on the loss
for the period of approximately HK$,50,000 (006: approximately HK$,87,000) and on the weighted
average of 606,800,000 (006: 606,800,000) shares in issue during the period.
No diluted loss per share for the six months ended 3 December 007 and 006 was presented as the Company
did not assume the exercise of share option outstanding because the exercise prices of the Company’s share
options were higher than the average market price for shares.

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9. TRADE RECEIVABLES

The Group allows an average credit period of three months to six months to its trade customers. Details of
the aged analysis of trade receivables are as follows:
(Unaudited) (Audited)
As at As at
31 December 30 June
2007 007

HK$’000 HK$’000
Aged:
0-60 days 750 780
6-0 days 500 307
Over 0 days 2,016 57

3,266 ,44

10. AMOUNT DUE TO DIRECTORS

As at 3 December 007, the amounts due to directors include an amount of approximately HK$9,384,000
(30 June 007: approximately HK$7,784,000) which is repayable on demand and bears interest at Hong
Kong Dollar prime lending rate quoted by The Hongkong and Shanghai Banking Corporation Limited from
time to time. The remaining balances are unsecured, non-interest bearing and repayable on demand.
11. AMOUNT DUE TO SHAREHOLDERS

(Unaudited) (Audited)
As at As at
31 December 30 June
2007 007

Note HK$’000 HK$’000
Current liabilities
Profit Trick Holdings Limited 1 – ,550
Non-current liabilities
XO-Holdings Limited 2 – 3,57

– 5,

Note:
. As at 3 December 007, the balance of HK$,550,000 due to Profit Trick Holdings Limited, a substantial shareholder of
the Company, was assigned to Ms. Chan Choi Har, Ivy, a Director of the Company.
As at 30 June 007, the amount of HK$,550,000 due to Profit Trick Holdings Limited is repayable on demand and bears
interest at Hong Kong Dollar prime lending rate quoted by The HongKong and Shanghai Banking Corporation Limited.

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. As at 3 December 007, the balance of approximately HK$3,57,000 due to XO-Holdings Limited, a substantial shareholder
of the Company, was assigned to Ms. Chan Choi Har, Ivy. XO-Holdings Limited is beneficially owned as to 65% by Ms
Chan Choi Har, Ivy.
As at 30 June 007, the amount of approximately HK$3,57,000 due to XO-Holdings Limited is unsecured and non-interest
bearing. XO-Holdings Limited has undertaken to the Company that (i) it will not demand repayment of the amount due to it
of approximately HK$3,57,000 within one year from the listing of the shares of the Company on GEM; and (ii) it will not
demand repayment of any outstanding amount due to it after one year from the date of listing of the shares of the Company
on GEM unless the Group has positive cash flow from operations and retained earnings in a financial year and each of the
independent non-executive directors has given an opinion that such payment will not adversely affect the operations of the
Group and the implementation of the business objectives of the Company as stated in the Prospectus.
12. AMOUNT DUE TO RELATED COMPANIES

As at 3 December 007, the balance of approximately HK$,956,000 (30 June 007: approximately
HK$67,000) due to a related company, the controlling shareholder of which is the chief executive officer
of a subsidiary of the Company, is unsecured, non-interest bearing and repayable on demand.
13. SHARE CAPITAL

Number of
Shares of
HK$0.01 each Amount
HK$’000
Authorised:
At 3 December (Unaudited) and 30 June (Audited) 007 0,000,000,000 00,000

Issued and fully paid:
At 3 December (Unaudited) and 30 June (Audited) 007 606,800,000 6,068

14. OPERATING LEASE COMMITMENTS

(Unaudited) (Audited)
As at As at
31 December 30 June
2007 007

HK$’000 HK$’000
Accrued lease payments 13 975
Within one year 1,857 ,50
In the second to fifth year inclusive 1,841 ,49

3,711 4,906

Operating lease payments represent rentals payable by the Group for its office premises, warehouse and
certain of its beauty centers. Leases are negotiated for an average term of 4 years.
15. RETIREMENT BENEFIT SCHEME

The Group operates a Mandatory Provident Fund Scheme (the “MPF” Scheme) for all employees. The MPF
Scheme is registered with the Mandatory Provident Fund Scheme Authority under the Mandatory Provident
Fund Schemes Ordinance. The assets of the MPF Scheme are held separately from those of the Group in
funds under the control of an independent trustee. Under the rule of the MPF Scheme, the employer and
its employees are each required to make contributions to the scheme at rates specified in the rules. The
only obligation of the Group with respect of MPF Scheme is to make the required contributions under the
scheme.
The retirement benefits cost charged to the income statement represents contributions payable to the scheme
by the Group at rates specified in the rules of the scheme.

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16. EMPLOYEE AND REMUNERATION POLICIES

As at 3 December 007, the Group had 5 employees (006: 4) and staff cost for the six months ended
3 December 007 (excluding directors’ remuneration) amounted to approximately HK$,593,000 (006:
approximately HK$,,000) whilst the directors’ remuneration for the six months ended 3 December
007 amounted to approximately HK$,000 (006: approximately HK$5,000). Remuneration is determined
by reference to market conditions and the performance, qualification and experience of individual employee.
Other benefits include Pre-IPO share option scheme as detailed in the prospectus dated 4 February 00 and
contributions to statutory mandatory provident fund scheme to its employees in Hong Kong.
17. RELATED PARTY TRANSACTIONS

For the six months ended 3 December 007, the Group had the transactions with the following parties:
(Unaudited) (Audited)
As at As at
Name of party Nature of transactions 31 December 2007 30 June 007
Notes HK$’000 HK$’000
Ms. Chan Choi Har, Ivy (i) Loan from a director 15,749 0,576
Profit Trick Holdings Limited (i) Loan from shareholders – ,550
Garrick International Limited (ii) Purchases of products 2,318 56
Garrick International Limited (ii) Provision of finance lease 1 84

Notes:
i. The amounts due to directors include an amount of approximately HK$9,384,000 (30 June 007: approximately HK$7,784,000)
which is repayable on demand and bears interest at Hong Kong Dollar prime lending rate quoted by The Hongkong and
Shanghai Banking Corporation Limited from time to time. The remaining balances are unsecured, non-interest bearing and
repayable on demand.
The amount due to Profit Trick Holdings Limited is repayable on demand and bears interest at Hong Kong Dollar prime
lending rate quoted by The HongKong and Shanghai Banking Corporation Limited.
During the six months ended 3 December 007, the Group had not paid any interest but has accrued interest for the loan
from Ms. Chan Choi Har, Ivy in amount of approximately HK$335,000 and Profit Trick Holdings Limited in amount of
approximately HK$,000.
ii. Ms. Keung Wai Fun, Samantha, who is the chief executive officer of Blu Spa (Hong Kong) Limited, a subsidiary of the
Company, is the controlling shareholder and director of Garrick International Limited.
Garrick International Limited has signed the contract of purchasing machine on behalf of the Group, amounting to
HK$0,000 under finance lease. Garrick International Limited has paid an amount of approximately HK$9,4 including
interest of approximately HK$886 on behalf of the Group for the six months ended 3 December 007.
In addition, the Group had certain balances with its shareholders and related company, details of these are set out in notes
and respectively.

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MANAGEMENT DISCUSSION AND ANALYSIS

Results of operation
For the six months ended 3 December 007, the Group recorded a turnover of approximately
HK$5,888,000, representing an increase of approximately 7 times as compared to last year (006:
approximately HK$755,000). This significant increase in turnover was attributable to the Group’s
transition from retail business to distributorship business and re-deployment of its resources to the
development of distributorship business pursuant to its revamped marketing strategy.
The Group had gross profit of approximately HK$,683,000 for the six months ended 3 December
007 and gross loss of approximately HK$36,000 for the six months ended 3 December 006.
The Group’s administrative expense was approximately HK$,885,000 for the six months ended 3
December 007, representing an increase of approximately 33% as compared to last year (006:
approximately HK$,69,000).
The Group’s finance cost was approximately HK$337,000 for the six months ended 3 December
007, representing a decrease of approximately 7.7% as compared to last year (006: approximately
HK$365,000).
For the six months ended 3 December 007, the loss attributable to shareholders of the Group amounted
to approximately HK$,50,000, representing a decrease of loss of approximately HK$,97,000 as
compared to last year (006: approximately HK$,87,000).
Liquidity and financial resources
For the six months ended 3 December 007, the Group mainly financed its operations with loan from
a director of the Company, Ms. Chan Choi Har, Ivy.
As at 3 December 007, the Group had cash and cash equivalents of approximately HK$,000 (30
June 007: approximately HK$6,000).
Total assets of the Group as at 3 December 007 was approximately HK$6,056,000 (30 June 007:
approximately HK$3,788,000).
Total liabilities of the Group as at 3 December 007 was approximately HK$6,60,000 (30 June
007: approximately HK$,83,000) in which amount due to a director amounted to approximately
HK$5,749,000 (30 June 007: approximately HK$0,576,000) accounting for approximately 59.%
(30 June 007: approximately 46.3%) of total liabilities.
Net liabilities of the Group as at 3 December 007 was approximately HK$0,564,000 (30 June 007:
approximately HK$9,044,000), representing an increase of net liabilities of approximately 6.8% as
compared with that as at 30 June 007.

- 7 -
Capital structure
As at 3 December 007, total loan was approximately HK$5,749,000, representing an increase of
approximately HK$5,000 as compared with that as at 30 June 007 (30 June 007: approximately
HK$5,698,000).
(Unaudited) (Audited)
As at 31 December As at 30 June
2007 007

HK$’000 HK$’000
Amounts due to directors (Note 10) 15,749 0,576
Profit Trick Holdings Limited (Note 11) – ,550
XO-Holdings Limited (Note 11) – 3,57

15,749 5,698

The cash and cash equivalents and loans of the Group were mostly denominated in Hong Kong
dollars.
Gearing Ratio
As at 3 December 007, the Group’s gearing ratio, expressed as a percentage of total borrowings
(comprising amounts due to directors and shareholders) to total assets of the Group, was approximately
98.% (30 June 007: approximately 3.9%). The Directors believe that the gearing ratio is at a high
level for the Group and the Group was actively seeking interested investors to inject fresh funds to
repay the loans and improve its cash position.
INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend for the six months ended 3
December 007 (for the six months ended 3 December 006: Nil).
BUSINESS REVIEW

During the period under review, the Group continued to direct its focus to distributorship business. The
retail market including the beauty care segment continued to benefit from the remarkable growth as a
result of the strong and sustained economic growth of the region, growing number of visitor arrivals
and stronger consumer spending power in Hong Kong.

- 8 -
The Group continued to direct its efforts to identification and recruitment of prospective distributors
in major Chinese cities such as Guangzhou, Shanghai and Chengdu and in Asian countries including
South Korea, Philippines, Thailand, and Dubai. With the objective to attract potential distributors in
the PRC and Asian region, the Group stepped up its brand building and promotional efforts in Hong
Kong and the PRC.
In the period under review, the Group was in the process of finalizing the product design, packaging
design and/or formulations of those Blu Spa products that were targeted for new product launch in
the first quarter of 008. At the same time, the Group stepped up its efforts to identify new innovative
ingredients and premium quality botanical beauty care products, utilizing Blu Spa brand name to
promote its enlarged specialist product line featuring new product design, new packaging design and
new formulations. During the period under review, the Group’s research and development (including
sample testing) of new innovative formulations for existing product lines progressed in earnest. High
performance and top quality new innovative skin care continued to be the primary focus of the Group’s
research and development activities. The Group opened a 704 sq. ft. spa centre in Lan Kuai Fong,
Central in June, 007 to meet the after-office and week-end spa service needs of retail customers. As
a result, the spa services were centralized in the Lan Kuai Fong spa center to spare office area for
beauty training lessons at Worldwide House for better management. With the successful opening in
February 007 of the spa center at AquaMarine under the Group’s management, the Group was given
the opportunity to manage the second spa center at Hampton Place, a luxurious residential apartment
complex developed by Cheung Kong (Holding) Limited in West Kowloon.
In November 007, the Group participated as exhibitor in Cosmoprof Asia 007, a high profile
international annual beauty industry event, held at the Hong Kong Convention & Exhibition Centre as
part of its continuing marketing and promotional efforts.
Following the opening of Blu Spa cosmetic sales counters in Shenyang and Chongqing respectively
in January and March 007, the PRC distributor pursued its market development plan by opening two
additional Blu Spa cosmetic sales counters at two high pedestrian traffic locations, namely, Beijing
Shin Kong Misukoshi (-) department store and Beijing Sunlight department store (
) respectively in April 007. In the same month, the PRC distributor also opened its new office/spa
centre in Century Plaza Hotel (-), Shenzhen. The PRC Distributor’s market expansion efforts
continued with the opening in June 007 of two Blu Spa cosmetic sales counters in Yixing and Suzhou.
As at 30 June 007, the PRC Distributor was operating a total of seven Blu Spa retail outlets in Beijing,
Shenzhen, Shenyang, Chongqing, Yizing and Suzhou respectively.

- 9 -
PROSPECTS

Given the robust and stable global economy and the continuing economic growth of the PRC, the Group
is confident of its future prospects. The Group will devote its efforts to research and development and
timely introduction of new innovative botanical beauty care products and therapies/treatments to the
end-users, brand building and advertisement (promoting women new-age holistic lifestyle concepts
and introducing new innovative and prestigious botanical beauty care products and services to the
consumers). In addition, the Group will continue to collaborate with local co-operative partners in
co-branding joint promotional campaigns with the aim to drive market recognition of Blu Spa brand
products and services.
Furthermore, the Group will place special emphasis on customer service and customer support (retail and
wholesale). The Directors perceive the continuing rollout of Blu Spa cosmetic retail outlets in Shenyang,
Chongqing, Beijing, Shenzhen, Yixing, and Suzhou and additional cosmetic sales counters in other
major cities in China as a show of confidence by the PRC Distributor in the Group’s products, quality
service and professionalism. In strengthening its retail network in the PRC, a spa centre/beauty academy
is expected to open under the management of the PRC Distributor at the Mayfair Hotel in Tianjin in
November 007. As advised by the PRC Distributor, expansion of their Shenzhen office is due to take
place in December 007. The Group’s optimism in its near term business prospects is reinforced by
the growing attractions of Hong Kong, Macau and China as destination of choice for overseas tourists.
This phenomenon is largely prompted by the buoyant casino market in Macau, Hong Kong Disneyland,
Hong Kong Ocean Park and 008 Beijing Olympics. While expressing every confidence in its future
strong and sustained growth in the turnover, the Group will devote its efforts to identifying and recruiting
distributors in Asia and overseas countries by taking advantage of international and regional cosmetics
exhibitions and trade shows. Given the high turnout of visiting guests at Blu Spa booth in Cosmoprof
Asia 007, such trade event is perceived as an efficient and cost effective means to promote market
awareness of Blu Spa products and services.
The successful opening in February 007 of the spa centre at AquaMarine has opened new business
opportunities to the Group in managing additional spa centres at luxurious residential clubhouses of
similar class. Current negotiations with other estate management for spa facility management right
in high-end residential estates are underway. In view of the growing consumer demand, the Group is
currently sourcing additional spa outlets in Kowloon to satisfy the needs of its customers for top quality
spa treatments and experience across the harbour. The Group is committed to provide premium quality
beauty care products and services to the end users. Market launch of the Group’s newly designed,
packaged and formulated Blu Spa products is scheduled to take place in the first quarter of 008. The
Directors further believe that through the introduction of the Beauteca skin care line, the Group is
better positioned to support its distributors in developing new distribution channels such as Duty Free
Shops and cosmetic surgery clinics. In the meanwhile, the PRC Distributor is planning to manage spa
centre at hotels and luxurious residential projects in tier-one cities in China as part of their ongoing
efforts in distribution channels development for Blu Spa products and services. In light of the on-going
development mentioned above, the Directors are optimistic that the Group will see stronger and better
business performance in the coming future.

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DISCLOSURE OF THE INTERESTS AND SHORT POSITIONS OF DIRECTORS AND
CHIEF EXECUTIVE IN THE SHARES, UNDERLYING SHARES AND DEBENTURES

As at 3 December 007, the interests and short positions of each Director and Chief Executive of
the Company in the shares, underlying shares and debentures of the Company or any of its associated
corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) which are
required to be entered in the register pursuant to section 35 of the SFO or interests or short positions
which are required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules, to be notified to the
Company and the Stock Exchange were as follows:
A. Long position in shares
Percentage of
issued share
Name Type of interests Number of shares capital
Chan Choi Har, Ivy Corporate interest 0,657,870 8.4%
Note: These shares are held by XO-Holdings Limited. Ms. Chan Choi Har, Ivy is the beneficial owner as to
65% of the issued share capital of XO-Holdings Limited.
B. Short position in shares
No short position of Directors and Chief Executives in the shares of the Company and its associated
corporations were recorded in the register or as otherwise notified to the Company and the Stock
Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules.
C. Share options
OptionstosubscribeforsharesintheCompany:
Number of
shares options
outstanding as at
Name Date of grant Exercise price 31 December 2007
HK$
Chan Choi Har, Ivy 30 January 00 0.30 0,50,000
Note: 50% of the outstanding share options may be exercised at any time after the expiry of months from
the date of grant and the remaining 50% may be exercised at any time after 4 months from the date
of grant, and in each case not later than 9 January 0.

- -
Save as disclosed above, as at 3 December 007, the Directors are not aware of any Director and Chief
Executive of the Company had or was deemed to have any interests or short positions in the shares,
underlying shares or debentures of the Company or any associated corporation (within the meaning of
the SFO) which will be required to be notified to the Company and the Stock Exchange pursuant to
the Division 7 and 8 of Part XV of the SFO, or will be required pursuant to Section 35 of the SFO
to be entered in the register maintained by the Company, or will be required pursuant to Rules 5.46 to
5.67 of the GEM Listing Rules relating to securities transactions by Directors and Chief Executive of
the Company to be notified to the Company and the Stock Exchange.
SHARE OPTION SCHEMES

On 30 January 00, the Company adopted the Pre-IPO Share Option Scheme (the “Pre-IPO Scheme”)
and a new share option scheme (the “Scheme”), for the primary purpose of providing incentives or
rewards to the Directors and employees of the Group and to recognise the contribution of such eligible
persons to the growth of the Group, and will expire on 9 January 0. No options had been granted
under the Pre-IPO Scheme and the Scheme during the period.
Share options
(1) Pre-IPO share option scheme
Under the Pre-IPO Scheme, the Board may grant options to Directors and employees of the
Company or any subsidiaries, to subscribe for shares in the Company at any time upon the adoption
date of the Pre-IPO Scheme and prior to the listing date. Any grant of options to a connected
person or any of its associates must be approved by all the independent non-executive directors
(the “INEDs”) of the Company.
As at 3 December 007, the number of shares in respect of which options had been granted and
remained outstanding under the Pre-IPO Scheme was 0,50,000 shares, representing .69% of
the shares of the Company in issue at that date. The total number of shares in respect of which
options may be granted under the Pre-IPO Scheme and any other scheme is not permitted to exceed
30% of the issued share capital of the Company from time to time. Subject to the above rule, the
total number of shares in respect of which options may be granted under the Pre-IPO Scheme and
any other scheme is 4,000,000 shares, representing 0% of the total issued share capital of the
Company as at the listing date, without prior approval from the Company’s shareholders.

- -
The number of shares issued and issuable in respect of which options may be granted under the
Pre-IPO Scheme and any other scheme to any individual within -month period immediately
preceding the date of such new grant is not permitted to exceed % of the issued share capital of the
Company at the date of such new grant, without prior approval from the Company’s shareholders.
Options granted to substantial shareholders or INEDs, when aggregated with the options granted
under the Pre-IPO Scheme and any other scheme in the past months, in excess of 0.% of the
Company’s share capital or with a value in excess of HK$5 million must be approved in advance
by the Company’s shareholders. Options granted must be taken up within 8 days of the date
of grant, upon payment of HK$ per grant. The exercise price is HK$0.30 representing the IPO
placing price. 50% of the options may be exercised at any time after the expiry of months from
the date of grant and the remaining 50% may be exercised at any time after 4 months from the
date of grant, and in each case not later than 9 January 0.
(2) Share option scheme
Under the Scheme, the Board may grant options to Directors and employees of the Company or
any subsidiaries, to subscribe for shares in the Company within 0 years from the adoption date of
the Scheme. Any grant of options to a connected person or any of its associates must be approved
by all the INEDs of the Company.
As at 3 December 007, no options had been granted under the Scheme. The total number of
shares in respect of which options may be granted under the Scheme and any other scheme is not
permitted to exceed 30% of the issued share capital of the Company from time to time. Subject
to the above rule, the total number of shares in respect of which options may be granted under
the Scheme and any other scheme is 4,000,000 shares, representing 0% of the total issued
share capital of the Company as at the listing date, without prior approval from the Company’s
shareholders.
The number of shares issued and issuable in respect of which options may be granted under the
Scheme and any other scheme to any individual within -month period immediately preceding the
date of such new grant is not permitted to exceed % of the issued share capital of the Company
at the date of such new grant, without prior approval from the Company’s shareholders. Options
granted to substantial shareholders or INEDs, when aggregated with the options granted under the
Scheme and any other scheme in the past months, in excess of 0.% of the Company’s share
capital or with a value in excess of HK$5 million must be approved in advance by the Company’s
shareholders.
Options granted must be taken up within 8 days of the date of grant, upon payment of HK$ per
grant. Options may be exercised at any time from the date of grant to the 0th anniversary of the
date of grant. The exercise price is determined by the Board, and will not be less than the higher
of the closing price of the Company’s shares on the date of grant, and the average closing price
of the Company’s shares for the five business days immediately preceding the date of grant.

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The following table discloses movements in the Company’s share options granted under the Pre-IPO
Scheme during the period:
Outstanding at
Outstanding Lapsed during 31 December
at 1 July 2007 the period 2007
Directors
Chan Choi Har, Ivy 0,50,000 – 0,50,000

Total for Directors 0,50,000 – 0,50,000

Employees – – –

Grand Total 0,50,000 – 0,50,000

Details of the options are as follows:
Vesting Exercisable Exercise
Date of grant period period price
HK$
30..00 30..00- 30..003- 0.30
9..003 9..0

Note: 50% of the options may be exercised at any time after the expiry of months from the date of grant and
the remaining 50% may be exercised at any time after 4 months from the date of grant, and in each case
not later than 9 January 0.
DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES
Save as disclosed under the heading “Share Options Schemes”, at no time during the period was the
Company, or any of its subsidiaries a party to any arrangements to enable the Directors of the Company
to acquire by means of acquisition of shares in, or debt securities, including debentures, of the Company
or any other body corporate, and none of the Directors or their spouses or children under the age 8
had any right to subscribe for the securities of the Company, or had exercised any such right.

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SUBSTANTIAL SHAREHOLDERS

As at 3 December 007, the register of substantial shareholders required to be maintained under Section
336 of the SFO showed that, the following shareholders had an interest of 5% or more in the issued
share capital of the Company:
Long position in shares
Percentage of
issued share
Name of shareholders Number of shares capital
Chan Choi Har, Ivy (Note 1) 0,657,870 8.4%
XO-Holdings Limited (Note 2) 0,657,870 8.4%
Wah Hing Consultants Limited (Notes 2 and 3) 0,657,870 8.4%
Heung See Wai, Angela (Note 3) 0,657,870 8.4%
Rajewski, Natalie N. (Note 4) 84,099,330 3.86%
Eastpoint Resources Limited (Note 4) 84,099,330 3.86%
Well Arts Enterprises Limited (Note 5) 84,099,330 3.86%
Wai Suk Chong, Helena (Note 6) 07,3,600 7.66%
Profit Trick Holdings Limited (Note 6) 07,3,600 7.66%
David Chiu (Note 7) 46,5,360 4.09%
Rocket High Investments Limited (Note 7) 46,5,360 4.09%
Notes:
. The interests of Chan Choi Har, Ivy in the Company comprise 8.4% shareholding interest through her
65% interest in XO-Holdings Limited.
. These shares are held by XO-Holdings Limited which is beneficially owned as to 65% by Chan Choi Har,
Ivy and as to 35% by Wah Hing Consultants Limited.
3. Wah Hing Consultants Limited is beneficially owned as to 00% by Heung See Wai, Angela.
4. These shares are held by Eastpoint Resources Limited, a company whose entire issued share capital is held
by Well Arts Enterprises Limited in its capacity as trustee of the Eastpoint Trust, a discretionary trust, the
discretionary objects of which include Rajewski, Natalie N. and certain of her family members.
5. Well Arts Enterprises Limited holds the entire issued share capital of Eastpoint Resources Limited in its
capacity as trustee of the Eastpoint Trust, a discretionary trust and Well Arts Enterprises Limited is deemed
to have an interest in the 84,099,330 shares in the Company in which Eastpoint Resources Limited is
interested.

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6. These shares are held by Profit Trick Holdings Limited. The entire issued share capital of Profit Trick
Holdings Limited is beneficially owned by Wai Suk Chong, Helena.
7. These shares are held by Rocket High Investments Limited. The entire issued share capital of Rocket High
Investments Limited is beneficially owned by David Chiu.
Save as disclosed above, the Company has not been notified of any other interests representing 5% or
more or any short positions in the issued share capital of the Company as at 3 December 007.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s
listed securities for the six months ended 3 December 007.
ADVANCES TO AN ENTITY

As at 3 December 007, the Group did not have, in its normal and ordinary course of business, any
relevant advance to an entity that is required to be disclosed pursuant to Rule 7. and 7.4 of the
GEM Listing Rules.
COMPETING INTERESTS

During the period under review, none of the Directors or the management shareholders (as defined in
the GEM Listing Rules) of the Company had any interest in business that competed or might compete
with the business of the Group.
CORPORATE GOVERNANCE

The Company had complied with the Code on Corporate Governance Practices (the “CCGP”) contained
in Appendix 5 of the GEM Listing Rules during the period ended 3 December 007 except the
following deviations.
According to Code Provision A.4. of the CCGP, non-executive Directors must be appointed for a
specific term and subject to re-election. The existing non-executive Directors of the Company do not
have specific terms of appointment. However, pursuant to the Bye-laws of the Company, all Directors
of the Company (including executive and non-executive Directors, except the Chairman of the Board
and/or the Chief Executive Officer) shall be subject to retirement by rotation in every annual general
meeting.
According to Code Provision A.4. of the CCGP every director is subject to retirement by rotation at
least once every three years. Pursuant to the Bye-laws of the Company, at each annual general meeting,
one-third of the directors must retire. Notwithstanding any requirements of that provision, the Chairman
of the Board and/or the Chief Executive Officer of the Company is not subject to retirement by rotation
or taken into account in determining the number of Directors to retire. During the period under review,
Mr. Wu Wenzhi was the Chairman of the Board and executive Director of the Company. He had

- 6 -
resigned as the Chairman of the Board and executive Director on 8 August 007, and Ms. Chan Choi
Har, Ivy took up the duty of Chairman of the Board and Chief Executive Officer of the Company. As
Ms. Chan Choi Har, Ivy is one of the founders of the Group and is responsible for the overall market
development of the Group, the Board believes that continuity is the key to implementing the long-term
business plans successfully, and that with the Chairman or Chief Executive Officer continuing in office,
it can provide the Group with strong and consistent leadership, thus long-term business strategies can
be planned and implemented more effectively. The Board is of the view that the Chairman of the Board
and/or the Chief Executive Officer should not be subject to retirement by rotation.
According to Code Provision A.. of the CCGP, the roles of chairman and chief executive should be
separate and should not be performed by the same individual. During the period from 8 August 007
to 3 December 007, Ms. Chan Choi Har, Ivy held the positions of Chairman and Chief Executive
Officer of the Company. Ms Chan Choi Har, Ivy is one of the founders of the Group and is responsible
for the overall market development of the Group. The Board believes that vesting the roles of both
Chairman and Chief Executive Officer in the same person is beneficial to the business development
of the Group. The Board will review the effectiveness of such management structure and arrangement
from time to time.
The Board’s annual review of the effectiveness of the system of internal control of the Group pursuant
to C.. of the CCGP will be reported in the forthcoming corporate governance report to be contained
in the Company’s annual report for the financial year ending 30 June 008.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

During the period under review, the Company has adopted a code of conduct regarding directors’
securities transactions on terms no less exacting than the required standard of dealings as set out in
Rules 5.48 to 5.67 of the GEM Listing Rules. Having made specific enquiry of all Directors of the
Company, the Company was not aware of any non-compliance with the required standard of dealings
and its code of conduct regarding securities transactions by the directors throughout the period ended
3 December 007.
BOARD OF DIRECTORS

The Board of the Company comprises five Directors, of which two are Executive Directors, namely,
Ms. Chan Choi Har, Ivy and Mr. Chan Shun Kuen, Eric and three are INEDs, namely, Mr. Chan Sze
Hon, Mr. Lam Wai Pong and Mr. Yeung Mario Bercasio. The Directors are collectively responsible for
the development of the Group’s strategies and policies. The Executive Directors are responsible for the
daily operation of the Group while the INEDs provide their professional advices to the Group.
The INEDs have professional experiences in legal, finance and accounting, property development and
engineering respectively. The Company has received confirmation from each of the INEDs as regards
to their independence to the Company and considers that each of the INEDs is independent of the
Company.

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One-third of all the Directors, except the Chairman of the Board and/or the Chief Executive Officer,
shall retire by rotation from office each year in accordance with the Company’s Bye-laws. The term
of office of the Directors is the period up to their retirement by rotation. Those Directors at any time
appointed by the Board shall hold office only until the next following annual general meeting of the
Company and shall be eligible for re-election but shall not be taken into account in determining the
Directors who are to retire by rotation at such meeting.
AUDIT COMMITTEE

As required by Rules 5.8 to 5.33 of the GEM Listing Rules, the Company has established an audit
committee (the “Audit Committee”) on 0 December 00 with written terms of reference, which deal
clearly with its authorities and duties. The primary duties of the Audit Committee are to advise the
Board on the appointment and removal of external auditors, approve the remuneration and terms of
appointment of the external auditors, as well as review and supervise the financial reporting process
and internal control system of the Group and review the Company’s annual reports and accounts and
interim and quarterly reports, and provide advice and recommendations to the Board thereon.
The Audit Committee comprises three INEDs, namely, Mr. Chan Sze Hon, Mr. Lam Wai Pong, Mr.
Yeung Mario Bercasio. Mr. Chan Sze Hon is the chairman of the Audit Committee.
REMUNERATION COMMITTEE

The Company established a remuneration committee (the “Remuneration Committee”) on 30 March
005 with written terms of reference. The Remuneration Committee currently comprises three INEDs
of the Company, namely, Mr. Chan Sze Hon, Mr. Lam Wai Pong, Mr. Yeung Mario Bercasio. Mr. Chan
Sze Hon is the chairman of the Remuneration Committee.
The Remuneration Committee is largely responsible for making recommendations to the Board on all
Company’s policies and structures in connection with the remuneration of Directors, establishing a set of
formal and transparent procedures for the formulation of the remuneration policy. It is also responsible
for determining the specific remuneration packages of all executive Directors and senior management,
reviewing and approving the performance-based remuneration and the compensation payable to
executive Directors and senior management as a result of their departure from office, termination of
their employment, dismissal and removal, and ensuring that no Directors or their associates are involved
in determining their own remuneration.
PUBLIC FLOAT

Based on the information that is publicly available to the Company and within the knowledge of its
Directors, as at the date of this announcement, there is sufficient public float, as not less than 5% of
the Company’s issued shares are held by the public.

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BOARD PRACTICES AND PROCEDURES

The Company has complied with the board practices and procedures as set out in Rules 5.34 of the
GEM Listing Rules during the period.
By order of the Board
Blu Spa Holdings Limited
Chan Choi Har, Ivy
Chairman
As at the date hereof, the Board comprises of two executive Directors, namely, Ms. Chan Choi Har,
Ivy and Mr. Chan Shun Kuen, Eric; and three INDEs, namely, Mr. Chan Sze Hon, Mr. Lam Wai Pong
and Mr. Yeung Mario Bercasio.
Hong Kong, February 008
This announcement will remain on the GEM website on the “Latest Company Announcements” page
for at least 7 days from the date of its posting.