09:42     BLU SPA<08176> - Quarterly Results Announcement (2)                 

                                                                              
    2. PRINCIPAL ACCOUNTING POLICIES                                          
                                                                              
    The principal accounting policies adopted in preparing the unaudited      
    consolidated financial statements are consistent                          
    with accounting policies used in the preparation of the Group's annual    
    report for the year ended 30 June 2004.                                   
                                                                              
    In the current period, the Group has adopted the following                
    Hong Kong Financial Reporting Standards ("HKFRSs")                        
    issued by the Hong Kong Institute of Certified Public                     
    Accountants (the "HKICPA"), the term of HKFRSs is                         
    inclusive of Statement of Standard Accounting Practice                    
    ("SSAPs") and the Interpretations approved by the HKICPA:                 
                                                                              
    SSAP 12 (Revised) Income taxes                                            
                                                                              
    In the current period, the Group has adopted SSAP 12                      
    (Revised) "Income Taxes".  The principle effect of the                    
    implementation of SSAP 12 (Revised) is in relation to deferred tax.       
    SSAP 12 (Revised) requires the adoption of a balance sheet liability      
    method, whereby deferred tax is recognized in respect of all temporary    
    differences between the carrying amounts of assets and liabilities in     
    the financial statements and the corresponding tax bases used in the      
    computation of taxable profits, with limited exceptions.  In the absence  
    of any apecific transitional requirement in SSAP 12 (Revised), the new    
    accounting policy has been applied retrospectively. Comparative amounts   
    for 2004 have been restated accordingly. The effect of the change is a    
    decreased credit to the income taxes on the current period of HK$Nil      
    (2004: credit HK$20,000).                                                 
                                                                              
    3. TURNOVER                                                               
                                                                              
    Turnover represents the net amounts received and receivable for goods     
    sold and therapy services performed, less returns and allowances,         
    by the Group to outside customers.                                        
                                                                              
    4. OTHER REVENUE                                                          
                                                                              
    Other Revenue for the nine months ended 31 March 2005 mainly              
    represents joint promption income with other vender,                      
    Whilst the other revenue for the previous corresponding period in 2004    
    represented the cash discount received from professional fee payment.     
                                                                              
    5. FINANCE COSTS                                                          
                                                                              
    The finance cost being the interest expenses payable to sharehoders'      
    loans from Profit Trick Holdings Limited and Rocket High Investments      
    Limited. The loan is repayable on demand and bear interest at Hong        
    Kong Dollar prime lending rate quoted by HSBC.                            
                                                                              
    6. TAXATION                                                               
                                                                              
    No provision for Hong Kong Profits Tax has been made for the nine         
    months ended 31 March 2005 and the corresponding period in                
    2004, as the Group had no assessable profits for the respective period.   
                                                                              
    7. DIVIDEND                                                               
                                                                              
    The directors do not recommend the payment of a dividend                  
    for the nine months ended 31 March 2005 (2004: Nil).                      
                                                                              
    8. BASIC LOSS PER SHARE                                                   
                                                                              
    The calculation of the basic loss per share for the                       
    nine months ended 31 March 2005 is based on the loss attributable         
    to the shareholders of approximately HK$3.8 million                       
    (2004: the loss attributable to the shareholders HK$3.6 million); and     
    on the weighted average number of ordinary shares of 606,800,000          
    (2004: 606,800,000) ordinary shares of the Company in issue               
    during the period.                                                        
                                                                              
    No diluted loss per share for the nine month ended 31 March 2005          
    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.