Wisdomcome Group Holdings Ltd. — Management Reports 2002

Dec 19, 2002

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

R A I N B O W C O S M E T I C

RAINBOW INTERNATIONAL HOLDINGS LIMITED

(incorporated in the Cayman Islands with limited liability)

MONTHLY UPDATE ON THE GROUP’S FINANCIAL POSITION, OPERATIONS AND LITIGATION STATUS

The Directors refer to the Group’s financial position and operations for the month of November 2002. Based on the UNAUDITED MANAGEMENT ACCOUNTS, the amount of cash and bank balances was approximately HK$0.48 million as at 30th November, 2002 and turnover for the month of November 2002 amounted to approximately HK$1.42 million. The operations of the Group remain the same as disclosed in the Announcement. After the publish of the Announcement and up to the date hereof, judgments for seven Claims have been granted.

Reference is made to the announcement of the Company dated 27th November, 2002 (the “Announcement”) regarding its undertaking to disclose the Group’s monthly financial position and operations. Terms used herein, unless defined otherwise, shall have the same respective meanings as defined in the Announcement.

FINANCIAL POSITION OF THE GROUP

Based on the UNAUDITED MANAGEMENT ACCOUNTS, the amount of cash and bank balances was approximately HK$0.48 million as at 30th November, 2002 and the turnover for the month of November 2002 amounted to approximately HK$1.42 million.

The Directors confirm that, from the date of the Announcement up to the date hereof, there is no material change in the Group’s business that may affect its cash flow position.

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OPERATIONS OF THE GROUP

The operations of the Group remain the same as disclosed in the Announcement. As at 30th November, 2002, the Group has been operating two direct sales centers in Causeway Bay and Mongkok, two beauty centers in Causeway Bay and Mongkok, two warehouses in Western District and Quarry Bay and one retail outlet and one beauty center in Macau with a total of 73 employees.

LITIGATION TO THE GROUP

As at the date of this announcement, the Group has received eight Writs, twenty five Claims under the Small Claims Tribunal and six Claims under the Labour Tribunal. Four of the Writs and three Claims are related to outstanding rental, rates and management fee in the aggregate amount of HK$3,090,273.89 in relation to Rainbow Cosmetic retail outlets in Central, Mong Kok, Causeway Bay and the previous head office of the Group in Chai Wan. The other three Writs and the twenty Claims are related to unpaid goods sold and delivered. One of the Writs is related to the bank commercial loan and overdraft. The remaining six Claims are related to the unpaid salary. As at the date hereof, the total gross amount claimed under all writs and claims received by the Group is approximately HK$6.359 million. After the publish of the Announcement and up to the date hereof, judgments for the following Claims have been made: -

	and the twenty Claims are related to unpaid goods sold andof the Writs is related to the bank commercial loan andmaining six Claims are related to the unpaid salary. As at theotal gross amount claimed under all writs and claims received approximately HK$6.359 million. After the publish of the	and the twenty Claims are related to unpaid goods sold andof the Writs is related to the bank commercial loan andmaining six Claims are related to the unpaid salary. As at theotal gross amount claimed under all writs and claims received approximately HK$6.359 million. After the publish of the
	nd up to the date hereof, judgments for the following Claims
	-aintiffDefendantAmountNoteUpdated PositionHK$rld HairRainbow Cosmetic27,418.48Order granted on
Action No.PlaintiffDefendantAmountNoteUpdated PositionHK$SCTC053469/02World HairCosmetics Co LtdRainbow CosmeticCo Ltd27,418.48Order granted on28/11/02SCTC056565/02Winful CompanyRainbow CosmeticCo Ltd6,444.00Order granted on3/12/02SCTC074687/02The IncorporatedOwners of SzeHing LoongIndustrial BuildingRainbow CosmeticCo Ltd18,289.37Order granted on11/12/02SCTC069198/02World HairCosmetics Co LtdRainbow CosmeticCo Ltd11,025.92Order granted on12/12/02SCTC069063/02Rainbow CosmeticCo Ltd18,280.00Order granted on12/12/02	aintiffDefendantAmountNoteUpdated PositionHK$rld HairRainbow Cosmetic27,418.48Order granted on
	smetics Co LtdCo Ltd28/11/02flCRibCi644400Odd
	ners of Szeng LoongCo Ltd11/12/02
	ustrial Buildingrld Hairsmetics Co LtdRainbow CosmeticCo Ltd11,025.92Order granted on12/12/02
	Rainbow CosmeticCo Ltd18,280.00Order granted on12/12/02

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Action No.	Plaintiff	Defendant	Amount	Note	Updated Position
			HK$
SCTC060097/02	May Fair	Rainbow Cosmetic	43,920.70		Order granted on
	Cosmetics Ltd	Co Ltd			17/12/02
SCTC074929/02	Kao(Hong Kong)	Rainbow Cosmetic	28,285.10		Order granted on
	Ltd	Co Ltd			17/12/02

As at the date hereof, judgments for two Writs and 21 Claims were given against the respective defendants including Rainbow Cosmetic Co. Ltd., Jet Legend Ltd., Rainbow Cosmetic (Central) Co. Ltd., Newide International Ltd. and Harmony Century Hong Kong Ltd. which are all the Insolvent Subsidiaries. Given that these subsidiaries of the Company have ceased business operations and would be unable to settle the outstanding liabilities, the Group will further negotiate with those plaintiff for restructuring the debts, failing of which may, however, lead to liquidation of the relevant subsidiaries of the Company.

This announcement and the financial data including the cash and bank balances and the turnover of the Group as disclosed herein have been reviewed by the audit committee of the Company and approved by the board of Directors on 19th December, 2002.

By Order of the Board Rainbow International Holdings Limited Li Ngan Kwan, Aldy Chairman

Hong Kong, 19th December, 2002

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.

This announcement will remain on the GEM website at www.hkgem.com on the “Latest Company Announcements” page for seven days from the day of its posting.

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