(incorporated in Bermuda with limited liability)

For the six months ended 30 September 2000


The Board of Directors (the "Board") of Bossini International Holdings Limited (the "Company") announces the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30 September 2000. The results, together with the comparative figures for the corresponding period in 1999, are summarised below:

Condensed consolidated profit and loss account

                                                  Six months ended
                                                    30 September
                                                  2000            1999
                                            (Unaudited)     (Unaudited)
                                 Notes         HK$'000         HK$'000

TURNOVER                           2           690,828         558,634
Cost of sales                                 (402,687)       (334,516)
                                           -----------     -----------
Gross profit                                   288,141         224,118

Other revenue                      3             7,578           6,111
Selling and distribution costs                (204,906)       (137,774)
Administrative expenses                        (54,270)        (39,312)
Other operating expenses                       (20,641)        (17,764)
                                           -----------     -----------
  ACTIVITIES                       4            15,902          35,379
Finance costs                                     (821)           (908)
Share of losses of associates                        -            (141)
                                           -----------     -----------
PROFIT BEFORE TAXATION                          15,081          34,330
Taxation                           5            (3,969)         (5,706)
                                           -----------     -----------
  INTERESTS                                     11,112          28,624
Minority interests                                (466)             (4)
                                           -----------     -----------
  TO SHAREHOLDERS                               10,646          28,620
                                           ===========     ===========
DIVIDENDS                          6                 -          12,343
                                           ===========     ===========
  REVALUATION RESERVE              7               202             202
                                           ===========     ===========
BASIC EARNINGS PER SHARE           8        3.88 cents     10.43 cents
                                           ===========     ===========

Condensed consolidated balance sheet

                                                     As at        As at
                                              30 September     31 March
                                                      2000         2000
                                                (Unaudited)    (Audited)
                                    Notes          HK$'000      HK$'000

Fixed assets                                       165,114      131,876
Intangible assets                                    6,437        8,582
                                                ----------   ----------
                                                   171,551      140,458
                                                ----------   ----------
Inventories                                        212,864      165,301
Debtors                               9             13,719        5,972
Bills receivable                                    10,908        8,815
Deposits paid                                       57,868       46,157
Prepayments and other receivables                   46,665       46,332
Time deposits                                       50,038       85,000
Cash and bank balances                              31,026       16,349
                                                ----------   ----------
                                                   423,088      373,926
                                                ----------   ----------
Creditors and accruals               10            205,817       98,135
Bills payable                                        1,076       14,539
Tax payable                                         11,287       11,818
Dividend payable                                    19,201       19,201
Bank loans and overdrafts                           38,886       40,051
                                                ----------   ----------
                                                   276,267      183,744
                                                ----------   ----------
NET CURRENT ASSETS                                 146,821      190,182
                                                ----------   ----------
  CURRENT LIABILITIES                              318,372      330,640

MINORITY INTERESTS                                     455            -
                                                ----------   ----------
                                                   317,917      330,640
                                                ==========   ==========
Share capital                                       27,430       27,430
Reserves                                           290,487      303,210
                                                ----------   ----------
                                                   317,917      330,640
                                                ==========   ==========


1. Significant accounting policies

(a) Basis of preparation

The condensed interim financial statements are prepared in accordance with Hong Kong Statement of Standard Accounting Practice ("SSAP") No. 25 "Interim financial reporting". The accounting policies and basis of preparation used in the preparation of the interim financial statements are the same as those used in the annual financial statements for the year ended 31 March 2000.

(b) Comparative figures

Certain comparative figures have been reclassified to conform with the current presentation as required under SSAP No. 1 "Presentation of financial statements".

2. Turnover and contribution to profit from operating activities

The Group's turnover and profit from operating activities were derived predominantly from the retail and export sales of garments.

An analysis of the Group's turnover and contribution to profit from operating activities by geographical area of operations for the period ended 30 September 2000, together with the comparative figures for the corresponding period in 1999, is as follows:

                                                 Contribution to
                                                   profit from
                              Turnover        operating activities
                          Six months ended      Six months ended
                            30 September          30 September
                            2000       1999       2000       1999
                         HK$'000    HK$'000    HK$'000    HK$'000

The People's
  Republic of China
  Hong Kong              498,436    427,138     11,845     26,081
  Elsewhere               96,563     74,846     (2,715)    (1,146)
Others                    95,829     56,650      6,772     10,444
                        --------   --------   --------   --------
                         690,828    558,634     15,902     35,379
                        ========   ========   ========   ========

3. Other revenue

                               Six months ended
                                 30 September
                                 2000       1999
                              HK$'000    HK$'000

Interest income                 2,700      2,664
Royalty income                    646        516
Rental income                     254        151
Others                          3,978      2,780
                              -------    -------
                                7,578      6,111
                              =======    =======

4. Profit from operating activities

Profit from operating activities is arrived at after charging:

                                           Six months ended
                                             30 September
                                            2000         1999
                                         HK$'000      HK$'000

Interest expense                             821          908
Depreciation                              24,954       14,307
Amortisation of intangible assets          2,145            -
                                         =======      =======

5. Taxation

Hong Kong profits tax has been provided at the rate of 16% (1999: 16%) on the estimated assessable profits arising in Hong Kong during the period ended 30 September 2000. Taxes on profits assessable elsewhere have been calculated at the rates of taxation prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

                                       Six months ended
                                         30 September
                                         2000       1999
                                      HK$'000    HK$'000

Hong Kong                               2,235      4,180
Elsewhere                               1,734      1,526
                                      -------    -------
Taxation charge for the period          3,969      5,706
                                      =======    =======

6. Dividends

                                    Six months ended
                                      30 September
                                      2000       1999
                                   HK$'000    HK$'000

Interim dividend: Nil
  (1999: 4.5 cents per share)            -     12,343
                                   =======    =======

7. Release from revaluation reserve

The revaluation reserve arising from revaluation of fixed assets is realised and transferred directly to retained earnings on a systematic basis, as the corresponding asset is used by the Group. The amount realised is the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset's original cost.

8. Basic earnings per share

Basic earnings per share is calculated based on the net profit attributable to shareholders for the period of HK$10,646,000 (1999: HK$28,620,000) and on 274,297,493 shares (1999: 274,297,493 shares) in issue during the period.

Diluted earnings per share has not been calculated for the six months ended 30 September 2000 and 1999 as no diluting events existed during these periods.

9. Debtors

Other than cash and credit card sales, the Group normally allows an average credit period of 60 days to its trade customers.

The age analysis of trade debtors is as follows:

                                As at             As at
                    30 September 2000     31 March 2000
                              HK$'000           HK$'000

0 - 30 days                     4,411             2,866
31 - 60 days                    8,627                55
61 - 90 days                      584             2,155
Over 90 days                       97               896
                             --------          --------
Total                          13,719             5,972
                             ========          ========

10. Creditors and accruals

Included in creditors and accruals is a trade creditors balance of HK$90,828,000 (31 March 2000: HK$43,185,000).

The age analysis of trade creditors is as follows:

                              As at             As at
                  30 September 2000     31 March 2000
                            HK$'000           HK$'000

0 - 30 days                  71,537            37,588
31 - 60 days                 17,684             3,124
61 - 90 days                    655             1,705
Over 90 days                    952               768
                            -------           -------
Total                        90,828            43,185
                            =======           =======


The Board has resolved not to declare an interim dividend for the six months ended 30 September 2000 (1999: 4.5 cents per share).


Business Review

The Group's consolidated turnover for the six months ended 30 September 2000 increased by 23.7%, from HK$558,634,000 for the corresponding period last year to HK$690,828,000. The net profit attributable to shareholders amounted to HK$10,646,000 (1999: HK$28,620,000).

The reduction in profits for the period was mainly due to the strategic increase in expenses for advertising programmes, shop renovation and human resources. Advertising expenditure incurred to promote and strengthen the image and popularity of the bossini brand during the period was HK$31,800,000, more than double that of the corresponding period last year.

To provide customers with a more comfortable and trendy shopping environment, the Group's strategy is to devote substantial resources to renovating its retail outlets in Hong Kong and Macau during the two financial years starting from 1999/2000. This renovation caused a sizeable increase of HK$10,647,000 in depreciation charges during the period compared with last year's corresponding period.

In addition, the Group has also focused on raising the morale and upgrading the service quality of its sales team by allocating resources to recruiting additional staff and improving their salary package. To further strengthen its human resources, the Group offered staff better and more diversified training programmes, targeted at enhancing customer service quality in line with the Group's quality pledge.

Although these expenditures have squeezed profits somewhat in the short term, the Group views them as strategically necessary long-term investments. In the long run, providing more value added services and raising service standards are vital to winning customer support and strengthening the Group's market position. The Group will benefit from these measures in future years.

Hong Kong

Despite the gradual recovery of the Hong Kong economy, local purchasing power was still weak during the period, with most people remaining cautious in their spending. Despite this difficult business environment, the Group still achieved a 12.7% increase in retail sales. Following the business direction stated in the 1999/2000 Annual Report, the Group increased the number of its outlets in Hong Kong and Macau from 36 at the end of March 2000 to 41 at the end of the period.


On 1 September 2000, the Group acquired the retail operations and business assets of its licensee in Taiwan for approximately HK$45,000,000. The transition presented no significant difficulty, with operations continuing to run smoothly following the take-over. As at 30 September 2000, the Group operated 45 retail outlets in Taiwan with a total floor area of approximately 64,000 square feet.

Other Markets

The business performance of the Group's two other major markets, Mainland China and Singapore, was quite stable. The Group invested more in advertising and promotion programmes during the period to expand its market. The results were satisfactory, with an increase of 29% and 41.4% in turnover in Mainland China and Singapore, respectively, compared to the corresponding period last year. As at 30 September 2000, the Group operated 63 outlets in Mainland China and 21 outlets in Singapore (1999: 69 and 16, respectively).


The Group will continue proactively expanding its business in its major markets. The key focus will be on diversifying product lines, excelling in customer service and strengthening the value of its brand name. The Group is confident of achieving better results in the second half of the year.

Following the successful launch of the ladies' bodywear and handbag collection, the Group will continue to introduce new product lines. At the same time, the Group will maintain the high quality of its products in order to cater to market needs by offering superior value. Efforts to strengthen staff recruitment and training will continue to have a positive effect in further upgrading staff efficiency and the quality of customer service. At the same time, the Group will continue its promotion and advertising strategy to further accentuate the brand image of bossini.

The acquisition of the Taiwan business contributes to the geographical diversification of the Group. With numerous business opportunities and good potential for further development, Taiwan will be one of the Group's key markets. Indeed, it is expected to become the Group's second largest market by the financial year 2001/2002.

To keep pace with worldwide developments in information technology, the Group will continue to employ Internet technology to improve its operating efficiency and to allow convenient sharing of information and resources among staff and business associates.

Financial Position

The Group continued to maintain a prudent approach to managing its financial requirements. The Group relied on its internally generated cash flows and certain use of import and export-related banking facilities to finance its operations during the period.

As at 30 September 2000, the Group's total assets amounted to HK$594,639,000 (31 March 2000: HK$514,384,000) and its net cash balance was HK$42,178,000 (31 March 2000: HK$61,298,000). Even after the acquisition of the Taiwan operations and business assets, the Group recorded a current ratio of 1.53 (31 March 2000: 2.04).


Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the period.


The Audit Committee has reviewed with management the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters including the review of the unaudited interim financials.


None of the directors of the Company is aware of any information that would reasonably indicate that the Company is not, or was not for any part of the six months ended 30 September 2000, in compliance with the Code of Best Practice as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, except that the independent non-executive directors of the Company are not appointed for any specific terms, but are subject to retirement by rotation and re-election at annual general meeting in accordance with the Bye-laws of the Company.

By Order of the Board
Ka Sing LAW

Hong Kong, 30 November 2000

The full text of the Company's interim results announcement will be available on the Internet at

Source: Bossini International Holdings Limited
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