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BLU SPA HOLDINGS LIMITED
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 8176)
FIRST QUARTERLY RESULTS ANNOUNCEMENT
FOR THE THREE MONTHS ENDED 30 SEPTEMBER 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 turnover of the Group for the three months ended 30 September 2007 was approximately
HK$3,211,000, representing an increase of approximately HK$3,104,000 or approximately
29.0 times as compared to the turnover of the Group of approximately HK$107,000 for the
corresponding period in 2006.
– The loss attributable to shareholders for the three months ended 30 September 2007 was
approximately HK$656,000, representing a decrease of loss of approximately HK$966,000
or approximately 59.6% as compared to the loss attributable to shareholders of approximately
HK$1,622,000 for the corresponding period in 2006.
– The Board did not recommend the payment of an interim dividend for the three months
ended 30 September 2007.
UNAUDITED QUARTERLY RESULTS

The board of directors (the “Board”) of Blu Spa Holdings Limited (the “Company”) is pleased to
announce the unaudited condensed consolidated results of the Company and its subsidiaries (the
“Group”) for the three months ended 30 September 2007, together with the comparative figures for
the corresponding period in 2006. The condensed consolidated quarterly financial results have not
been audited, but have been reviewed by the Company’s audit committee.

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CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)
For the three months ended
30 September
2007 2006

Notes HK$’000 HK$’000
Turnover 3 3,211 107
Cost of sales (2,534) (19)
Gross profit 677 88
Other revenue 2 –
Distribution costs – (36)
Administrative expenses (1,145) (1,498)
Loss from operations 4 (466) (1,446)
Finance costs 5 (190) (176)
Loss before taxation (656) (1,622)
Taxation 6 – –
Loss attributable to shareholders (656) (1,622)
Basic loss per share (in HK cents) 8 (0.11) (0.27)

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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 2001 as an exempted company with
limited liability under the Companies Law Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman
Islands.
The Company is an investment holding company.
The condensed consolidated results for the three months ended 30 September 2007, have been prepared on a
going concern basis as referred to the Group’s annual financial statements for the year ended 30 June 2007.
2. PRINCIPAL ACCOUNTING POLICIES

The unaudited consolidated financial statements have been prepared under the historical cost convention.
The unaudited quarterly results of the Group have been prepared in accordance with Hong Kong Financial
Reporting Standards (“HKFRS”), Hong Kong Accounting Standards (“HKASs”) and interpretations (“INTs”)
issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), accounting principles generally
accepted in Hong Kong, the disclosure requirements of the Hong Kong Companies Ordinance and the GEM
Listing Rules of the Stock Exchange.
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 2007.
Impact of new Hong Kong Financial Reporting Standards
HKICPA has issued a number of new standards, amendments and interpretations (“new HKFRSs”), which are
either effective for annual periods beginning on or after 1 November 2006, 1 January 2007 or 1 March 2007.
The Group has adopted the following new HKFRSs, which are applicable to the Group’s financial statements
for the three months ended 30 September 2007:
HKAS 1 (Amendment) Capital disclosures
1
HKFRS 7 Financial instruments: Disclosures
1
HK(IFRIC) – Int 10 Interim Financial Reporting and Impairment
2
HK(IFRIC) – Int 11 HKFRS 2 – Group and Treasury Share Transactions
3
1
Effective for annual periods beginning on or after 1 January 2007.
2
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.

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3. BUSINESS AND GEOGRAPHICAL SEGMENTS

Turnover represents the net amounts received and receivable 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 by business and geographical segments is as follows:
For the three months ended 30 September 2007 (Unaudited)
The
People’s
Republic
of China Hong Kong Others Consolidated
HK$’000 HK$’000 HK$’000 HK$’000
TURNOVER

External sales
– Distributorship 2,451 – – 2,451
– Retailing and therapy services 1 220 – 221
– Beauty training 500 39 – 539
Total revenue 2,952 259 – 3,211
For the three months ended 30 September 2006 (Unaudited)
The
People’s
Republic
of China Hong Kong Others Consolidated
HK$’000 HK$’000 HK$’000 HK$’000
TURNOVER

External sales
– Distributorship 9 14 13 36
– Retailing – 71 – 71
Total revenue 9 85 13 107

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4. LOSS FROM OPERATIONS

(Unaudited)
For the three months ended
30 September
2007 2006

HK$’000 HK$’000
Loss from operations has been
arrived at after charging:
Director’s remuneration 1 3
Other staff costs 781 604
Retirement benefit scheme contributions 30 22
Total staff costs 812 629
Depreciation 38 49
Amortization of intangible assets 234 234
Fixed assets written-off – –
5. FINANCE COSTS

(Unaudited)
For the three months ended
30 September
2007 2006

HK$’000 HK$’000
Interest on:
Loans from shareholders and directors 189 175
Interest on obligation under finance lease 1 1
190 176
6. TAXATION

(Unaudited)
For the three months ended
30 September
2007 2006

HK$’000 HK$’000
Current – Hong Kong profits tax – –
Current – PRC profits tax – –
Deferred tax – –
– –
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 three months ended 30 September 2007 and the
corresponding period in 2006, as the Group has no assessable profits for the respective periods.

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7. DIVIDEND

The Board do not recommend the payment of an interim dividend for the three months ended 30 September
2007, nor has any dividend been proposed since this period ended date (2006: Nil).
8. BASIC LOSS PER SHARE

The calculation of the basis loss per share for the three months ended 30 September 2007 is based on the loss
attributable to shareholders of approximately HK$656,000 (2006: approximately HK$1,622,000) and on the
weighted average of 606,800,000 (2006: on 606,800,000) shares in issue during the period.
No diluted loss per share for the three months ended 30 September 2007 and 2006 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 latest available.
9. RESERVES

The movements in the reserve of the Group are as follows:
(Unaudited)
Share Merger Translation Accumulated
Premium Difference Reserve Losses Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 July 2006 19,740 22,735 (1) (53,843) (11,369)
Exchange differences arising
from translation of
operations outside
Hong Kong – – – – –
Loss for the period – – – (1,622) (1,622)
At 30 September 2006 19,740 22,735 (1) (55,465) (12,991)
At 1 July 2007 19,740 22,735 (9) (57,578) (15,112)
Exchange differences arising
from translation of
operations outside
Hong Kong – – (1) – (1)
Loss for the period – – – (656) (656)
At 30 September 2007 19,740 22,735 (10) (58,234) (15,769)

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MANAGEMENT DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS

For the three months ended 30 September 2007, the Group recorded a turnover of approximately
HK$3,211,000 which represented an increase of approximately 29.0 times when compared with that
of the corresponding period last year. It was because the Group revamped its marketing strategy in
Year 2006 to redirect its focus to distributorship business, and the retailing outlets have been
terminated to minimize its operating cost.
Cost of sales for the three months ended 30 September 2007 was approximately HK$2,534,000
(2006: approximately HK$19,000) of which fixed overheads incurred for both existing and newly
open spa centers amounted to approximately HK$893,000.
The gross profit amounted to approximately HK$677,000 for the three months ended 30 September
2007 whereas the gross profit amounted to approximately HK$88,000 in last corresponding period.
Administrative expenses incurred by the Group for the three months ended 30 September 2007
amounted to approximately HK$1,145,000 (2006: approximately HK$1,498,000), representing an
decrease of approximately 23.6% as compared to last corresponding period.
Finance costs incurred by the Group for the three months ended 30 September 2007 amounted to
approximately HK$190,000 (2006: approximately HK$176,000), representing an increase of
approximately HK$14,000 or approximately 8.0% as compared to last corresponding period. As at
30 September 2007, there were directors’ and shareholders’ loans of approximately HK$9,384,000
and nil respectively (2006: approximately HK$3,934,000 and HK$5,400,000), which were interest
bearing at Hong Kong Dollar prime lending rate as quoted by The Hongkong and Shanghai Banking
Corporation Limited from time to time.
The loss attributable to shareholders amounted to approximately HK$656,000 (2006: approximately
HK$1,622,000) for the three months ended 30 September 2007, representing an decrease of
approximately HK$966,000 or approximately 59.6% as compared to the loss attributable to
shareholders for the corresponding period in previous year.
INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend for the three months ended 30
September 2007 (2006: Nil).
BUSINESS REVIEW

During the period under review, the Group continued to focus its attention on distributorship business.
The retail market including the beauty care products and service segment continued to experience
healthy growth attributable largely to the robust and sustained economic growth of the region,
growing number of visitor arrivals and stronger consumer spending power in Hong Kong.

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The Group continued its efforts in identifying and recruiting prospective distributors in major
Chinese cities such as Guangzhou, Shanghai and Chengdu and in Asian countries such as South
Korea, Thailand, and Dubai. With the aim to attract potential distributors in the PRC and South-East
Asian region, the Group intensified its brand building and promotional efforts in Hong Kong and
the PRC.
In the period under review, the Group had been in close liaison and coordination with a small group
of Canadian OEM manufacturers and Chinese suppliers (shortlisted after a long screening process)
to pave way for the introduction of newly designed, packaged and/or formulated Blu Spa products.
In addition, the Group continued its efforts in sourcing high quality botanical beauty care products,
using its brand name to promote anti-aging, whitening, fabric mask, hydrating and purifying face
care products. These product lines are targeted for re-launch over the first quarter of 2008 featuring
new designs and packaging. During the period, the Group continued its research and development
(including sample testing) of new and enhanced formulations for current products. Research and
development efforts were also directed to high quality new innovative skin care products and
product quality improvement.
As a result of the growing demand of retail customers for after-office and week-end spa services,
the Group opened a 1704 sq. ft. spa centre in Lan Kwai Fong, Central in June, 2007. To facilitate
efficient management and to provide additional area for beauty training lessons, the spa services
had been relocated from the Worldwide House to the Lan Kwai Fong spa centre.
After the opening of Blu Spa cosmetic sales counters in Shenyang and Chongqing respectively in
January and March 2007, the PRC distributor opened two additional cosmetic sales counters at
Beijing Shin Kong Misukoshi-department store and Beijing Sunlight department store
respectively in April 2007 and a new office/spa centre in Century Plaza Hotel-
, Shenzhen. The PRC Distributor’s continuing expansion programme also underpinned the opening
in June 2007 of two Blu Spa cosmetic sales counters in Yixing and Suzhou respectively. As at 30
June 2007, the PRC Distributor, had a total of seven Blu Spa retail outlets in Beijing, Shenzhen,
Shenyang, Chongqing, Yixing and Suzhou respectively.
SIGNIFICANT ACQUISITIONS AND DISPOSALS

For the three months ended 30 September 2007, the Group had no significant acquisitions and
disposals of subsidiaries and affiliated companies (2006: Nil).
EMPLOYEES AND REMUNERATION POLICIES

As at 30 September 2007, the Group had 22 employees and staff costs (excluding directors’
remuneration) amounted to approximately HK$811,000 (2006: HK$626,000) whilst the directors’
remuneration amounted to approximately HK$1,000 (2006: HK$3,000). 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 2002 and contributions to statutory mandatory provident fund scheme to its employees in
Hong Kong.

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PROSPECTS

In view of the strong and steady worldwide economic recovery and the sustained economic growth
of the PRC, the Group is confident of its future prospects. The Group will direct its efforts to
developing and introducing new innovative botanical beauty care products and therapies/treatments
to the end-users, brand building and advertisement (designed to promote women new-age holistic
lifestyle concepts and to introduce new innovative and prestigious botanical beauty care products
and services to the consumers). At the same time, the Group will continue its collaboration with
local co-operative partners in co-branding joint promotional campaigns aimed to promote market
awareness of Blu Spa brand products and services.
Apart from continuous product promotions, the Group will direct its attention to customer service
and support for both retail and wholesale customers. The Directors believe that the continuing
opening of Blu Spa brand retail outlets in cities like Shenyang, Chongqing, Beijing, Shenzhen,
Yixing, and Suzhou and additional cosmetic sales counters in other major cities in China is a show
of confidence by the PRC Distributor in the Group’s products and quality service. In this connection,
a spa centre/beauty academy is scheduled to open under the management of the PRC Distributor at
the Mayfair Hotel in Tianjin in November 2007. As advised by the PRC Distributor, expansion of
their Shenzhen office is due to take place in December 2007. The Group’s optimism in its near term
business prospects is fortified by the growing attractions of Hong Kong, Macau and China attributable
mainly to the buoyant casino market in Macau, Hong Kong Disneyland, Hong Kong Ocean Park and
2008 Olympic Games in Beijing. While expressing every confidence in its future sustained and
strong growth in the turnover, the Group will continue its efforts in identifying and recruiting
distributors in Asia and overseas countries through the participation of international and regional
cosmetics exhibitions and trade shows. The Group will participate as one of the exhibitors in
Cosmoprof Asia 2007, scheduled to be held in mid-November at the Hong Kong Convention &
Exhibition Centre.
The successful opening in February 2007 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 such as the Hampton Place, a luxurious residential apartment project developed by
Cheung Kong (Holding) Limited in West Kowloon. The Hampton Place spa centre is due to open in
November 2007 under the management of the Group. 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 also locating additional spa outlets in Kowloon to
satisfy the needs of its customers for top quality spa treatments and experience on the other side of
the harbour. The Group is committed to provide premium quality beauty care products and services
to the end users. The Group plans to introduce to the market newly designed and packaged Blu Spa
products in the first quarter of 2008. The Directors believe that by introducing the Beauteca skin
care line, the Group is well positioned to support its distributors in developing new distribution

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channels such as Duty Free Shops and cosmetic surgery clinics. Furthermore, the PRC Distributor
is planning to manage spa centre at hotels and luxurious residential projects in major cities in China
as part of their ongoing efforts in developing new distribution channels for Blu Spa products and
services. In light of the on-going development mentioned above, the Directors are optimistic that
the Group will achieve stronger and better business performance in the coming future.
DISCLOSURE OF THE INTERESTS AND SHORT POSITIONS OF DIRECTORS AND
CHIEF EXECUTIVE IN THE SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 September 2007, 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 352 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
Number of issued share
Name Type of interests shares capital
Chan Choi Har, Ivy Corporate interest 110,657,870 18.24%
Note: These shares are held by XO-Holdings Limited. 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.
Save as disclosed above, none of the Directors and the Chief Executive of the Company had
any interests or short position in share capital of the Company or its associated corporations as
at 30 September 2007. There were no debt securities issued by the Group during the period.

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C. Share options
Options to subscribe for shares in the Company
Number of
shares options
outstanding as at
Name of Director Date of grant Exercise price 30 September 2007
HK$
Chan Choi Har, Ivy 30 January 2002 0.30 10,250,000
Note: 50% of the outstanding share options may be exercised at any time after the expiry of 12 months from
the date of grant and the remaining 50% may be exercised at any time after 24 months from the date of
grant, and in each case not later than 29 January 2012.
Save as disclosed above, as at 30 September 2007, 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 352
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 2002, 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 29 January 2012. 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 of the Company.

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As at 30 September 2007, the number of shares in respect of which options had been granted
and remained outstanding under the Pre-IPO Scheme was 10,250,000 shares, representing
1.69% 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 41,000,000 shares, representing
10% 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 12-month period
immediately preceding the date of such new grant is not permitted to exceed 1% 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 independent non-
executive directors, when aggregated with the options granted under the Pre-IPO Scheme and
any other scheme in the past 12 months, in excess of 0.1% 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 28 days of the date of grant, upon
payment of HK$1 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 12 months from the
date of grant and the remaining 50% may be exercised at any time after 24 months from the
date of grant, and in each case not later than 29 January 2012.
(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 10 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 independent non-executive directors of the Company.
As at 30 September 2007, 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 41,000,000 shares, representing 10% of the
total issued share capital of the Company as at the listing date, without prior approval from
the Companys shareholders.

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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 12-month period immediately
preceding the date of such new grant is not permitted to exceed 1% of the issued share capital
of the Company at the date of such new grant, without prior approval from the Companys
shareholders. Options granted to substantial shareholders or independent non-executive directors,
when aggregated with the options granted under the Scheme and any other scheme in the past
12 months, in excess of 0.1% of the Companys share capital or with a value in excess of
HK$5 million must be approved in advance by the Companys shareholders.
Options granted must be taken up within 28 days of the date of grant, upon payment of HK$1
per grant. Options may be exercised at any time from the date of grant to the 10th anniversary
of the date of grant. The exercise price is determined by the Board, and will not be less than
the higher of the closing price of the Company’s shares on the date of grant, and the average
closing price of the Companys shares for the five business days immediately preceding the
date of grant.
The following table discloses movements in the Company’s share options granted under the
Pre-IPO Scheme during the period:
Outstanding at
Outstanding Lapsed during 30 September
at 1 July 2007 the period 2007
Directors
Chan Choi Har, Ivy 10,250,000 – 10,250,000
Total for Directors 10,250,000 – 10,250,000
Employees –––
Grand Total 10,250,000 – 10,250,000
Details of the options are as follows:
Vesting Exercisable Exercise
Date of grant period period price
HK$
30.1.2002 30.1.2002- 30.1.2003- 0.30
29.1.2003 29.1.2012

Note: 50% of the options may be exercised at any time after the expiry of 12 months from the date of grant and
the remaining 50% may be exercised at any time after 24 months from the date of grant, and in each case
not later than 29 January 2012.

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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 benefits 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 18 had any right to subscribe for the securities of the Company, or had
exercised any such right.
SUBSTANTIAL SHAREHOLDERS

As at 30 September 2007, 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
Number of issued share
Name of shareholders shares capital
Chan Choi Har, Ivy (Note 1) 110,657,870 18.24%
XO-Holdings Limited (Note 2) 110,657,870 18.24%
Wah Hing Consultants Limited (Notes 2 and 3) 110,657,870 18.24%
Heung See Wai, Angela (Note 3) 110,657,870 18.24%
Rajewski, Natalie N. (Note 4) 84,099,330 13.86%
Eastpoint Resources Limited (Note 4) 84,099,330 13.86%
Well Arts Enterprises Limited (Note 5) 84,099,330 13.86%
Wai Suk Chong, Helena (Note 6) 107,132,600 17.66%
Profit Trick Holdings Limited (Note 6) 107,132,600 17.66%
David Chiu (Note 7) 146,151,360 24.09%
Rocket High Investments Limited (Note 7) 146,151,360 24.09%
Notes:
1. The interests of Chan Choi Har, Ivy in the Company comprise 18.24% shareholding interest through her 65%
interest in XO-Holdings Limited.
2. 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 100% 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.

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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.
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 30 September 2007.
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 period ended 30 September 2007.
.
ADVANCES TO AN ENTITY

As at 30 September 2007, 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 17.22 and 17.24
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 competes or might
compete with the business of the Group.
PRE-EMPTIVE RIGHTS

There is no provision for pre-emptive rights under the Company’s Articles of Association, or the
laws of the Cayman Islands, which would oblige the Company to offer new shares on a pro-rata
basis to existing shareholders.
CORPORATE GOVERNANCE

The Company had complied with the Code on Corporate Governance Practices (the “CCGP”)
contained in Appendix 15 of the GEM Listing Rules during the period ended 30 September 2007
except the following deviations.
According to Code Provision A.4.1 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

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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.4.2 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 resigned as the Chairman of the Board and executive Director on
8 August 2007, 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.2.1 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
2007 to 30 September 2007, 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.2.1 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 2008.
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 30 September 2007.

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AUDIT COMMITTEE

As required by Rules 5.28 to 5.33 of the GEM Listing Rules, the Company has established an audit
committee (the “Audit Committee”) on 10 December 2001 with written terms of reference which
precisely specifies its powers 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 independent non-executive Directors (“INEDs”), namely, Mr.
Chan Sze Hon, Mr. Lam Wai Pong and Mr. Yeung, Mario Bercasio. Mr. Chan is the Chairman of the
Audit Committee.
REMUNERATION COMMITTEE

The Company established a remuneration committee (the “Remuneration Committee”) on 30 March
2005 with written terms of reference. The Remuneration Committee comprises three INEDs, namely,
Mr. Chan Sze Hon, Mr. Lam Wai Pong and Mr. Yeung, Mario Bercasio. Mr. Chan 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 report, there is sufficient public float, as not less than 25% 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 Rule 5.34 of the
GEM Listing Rules during the period.
By order of the Board
Blu Spa Holdings Limited
Chan Choi Har, Ivy
Chairman
Hong Kong, 9 November 2007
As at the date hereof, the Board comprises of two executive Directors, namely, and Ms. Chan Choi
Har, Ivy and Mr. Chan Shun Kuen, Eric; and three independent non-executive Directors, namely,
Mr. Chan Sze Hon, Mr. Lam Wai Pong and Mr. Yeung, Mario Bercasio.