Half Year Financial Statement And Announcement for the Period Ended 31/12/2010

AUSSINO GROUP LTD Company Registration No.: 199100323H Half Year Financial Statement And Announcement for the Period Ended 31/12/2010 PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1(a) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year. Quarter Ended Increase / 6 Months Ended Increase / 31/12/2010 31/12/2009 (Decrease) 31/12/2010 31/12/2009 (Decrease) $'000 $'000 % $'000 $'000 % Revenue 13,079 20,392 (35.9%) 27,554 38,272 (28.0%) Cost of sales (7,509) (11,348) (33.8%) (16,323) (21,814) (25.2%) Gross profit 5,570 9,044 (38.4%) 11,231 16,458 (31.8%) Other income 681 214 218.2% 3,286 585 461.7% Selling and distribution expenses (4,526) (5,686) (20.4%) (9,160) (11,531) (20.6%) Administrative expenses (2,821) (3,920) (28.0%) (5,713) (7,322) (22.0%) Other expenses (14) (5) 180.0% (88) (18) 388.9% Finance costs (68) (48) 41.7% (129) (95) 35.8% Loss before income tax (1,178) (401) 193.8% (573) (1,923) (70.2%) Income tax expenses 104 (5) 2180.0% - (5) (100.0%) Loss after income tax (1,074) (406) 164.5% (573) (1,928) (70.3%) Other comprehensive income: Foreign currency translation differences (763) 1,807 (142.2%) (3,602) (337) (968.8%) Total comprehensive income for the period (1,837) 1,401 (231.1%) (4,175) (2,265) 84.3% Profit/(Loss) attributable to: Owners of the parent (1,070) (401) 166.8% (568) (1,931) (70.6%) Non-controlling interests (4) (5) (20.0%) (5) 3 (266.7%) Total comprehensive income attributable to: (1,074) (406) 164.5% (573) (1,928) (70.3%) Owners of the parent (1,819) 1,420 (228.1%) (4,126) (2,233) 84.8% Non-controlling interests (18) (19) (5.3%) (49) (32) 53.1% (1,837) 1,401 (231.0%) (4,175) (2,265) 84.3% Basic and diluted loss per share attributable to the owners of the parent (cents) -0.43 cents -0.16 cents -0.23 cents -0.80 cents Page 1 of 11

Quarter Ended Increase / 6 Months Ended Increase / 31/12/2010 31/12/2009 (Decrease) 31/12/2010 31/12/2009 (Decrease) $'000 $'000 % $'000 $'000 % Interest on deposits - (5) (100%) - (7) (100%) Foreign exchange gain (657) (18) 3550% (3,161) (342) 824% Interest on borrowings 68 48 42% 128 95 35% Depreciation and amortisation 294 642 (54%) 631 1,229 (49%) Provision for doubtful trade written back (52) - NM (52) - NM Property, plant and equipment written off - 18 (100%) 46 18 156% Write back of impairment of plant and equipment - (97) (100%) - (198) (100%) Write back of allowance for obsolete inventories (31) - NM (31) - NM Other income includes:- Gain on sale of property, plant and equipment - (33) (100%) - (33) (100%) NM - Not meaningful Page 2 of 11

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year. Company Company 31/12/2010 30/06/2010 31/12/2010 30/06/2010 S$'000 S$'000 S$'000 S$'000 Non-Current Assets Property, plant and equipment 11,328 10,985 27 41 Investment property - - 1,041 1,053 Intangible assets 1,660 1,447 54 56 Investments in subsidiaries - - 15,008 15,008 Available-for-sale financial asset 368 368 368 368 Deferred tax asset 379 363 - - 13,735 13,163 16,498 16,526 Current Assets Inventories 12,711 15,422 - - Trade and other receivables 15,889 13,536 20,942 19,048 Tax recoverable 537 499 - - Cash and cash equivalents 5,499 10,737 372 621 34,636 40,194 21,314 19,669 Current Liabilities Trade and other payables 14,502 17,719 23,185 24,178 Provision for claims 2,079 2,079 - - Current income tax payable 384 92 74 74 Interest-bearing liabilities 6,026 4,806 1,528 1,409 22,991 24,696 24,787 25,661 Net Current Assets / (Liabilities) 11,645 15,498 (3,473) (5,992) Non-Current Liabilities Interest-bearing liabilities (810) (1,053) - - 24,570 27,608 13,025 10,534 Capital and Reserves Share capital 17,803 16,666 17,803 16,666 Reserves 7,275 11,401 (4,778) (6,132) Total attributable to owners of the parent 25,078 28,067 13,025 10,534 Non-controlling interests (508) (459) - - 24,570 27,608 13,025 10,534 Page 3 of 11

1(b)(ii) Aggregate amount of group s borrowings and debt securities. Amount repayable in one year or less, or on demand As at 31/12/2010 As at 30/06/2010 Secured Unsecured Secured Unsecured $4,499,000 $1,527,000 $3,398,000 $1,408,000 Amount repayable after one year As at 31/12/2010 As at 30/06/2010 Secured Unsecured Secured Unsecured $13,000 $797,000 $16,000 $1,037,000 Details of any collateral Included in the 's secured borrowings are certain plant and equipment under finance lease contracts. The bank overdraft for the Australian subsidiary is secured by a mortgage over the business premises of the Australian subsidiary, mortgage debenture over the assets and uncalled capital of the subsidiary and a guarantee from the Company. Bank overdraft as at 31/12/2010 was $1,914,998 (30/06/2010: $797,486). The loan under the China subsidiary is secured over the warehouse of the China subsidiary. Page 4 of 11

1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year. Quarter ended 6 months ended 31/12/2010 31/12/2009 31/12/2010 31/12/2009 $'000 $'000 $'000 $'000 Operating activities Loss before income tax (1,178) (401) (573) (1,923) Adjustments for: Amortisation of intangible assets 1 1 2 2 Depreciation of property, plant and equipment 293 641 629 1,227 Write back of impairment of plant and equipment - (97) - (198) Provision for doubtful trade debts written back (52) - (52) - Gain on disposal of property, plant and equipment - (33) - (33) Property, plant and equipment written off - 18 46 18 Write back of allowance for obsolete inventories (31) - (31) - Interest expense 68 48 128 95 Interest income - (5) - (7) Operating profit/(loss) before working capital changes (899) 172 149 (819) Working capital changes: Inventories 940 (1,900) 2,740 (1,484) Trade and other receivables 396 1,305 (2,301) (214) Trade and other payables (284) 983 (2,924) 4,442 Bills payable 909-119 - Cash generated from/(used in) operations 1,062 560 (2,217) 1,925 Income taxes paid 272 (24) - (393) Interest paid (68) (48) (128) (95) Interest income received - 5-7 Net cash from/(used in) operating activities 1,266 493 (2,345) 1,444 Investing activities Purchase of property, plant and equipment (1,282) (281) (1,415) (527) Net cash used in investing activities (1,282) (281) (1,415) (527) Financing activities Proceeds from borrowings - - 1,972 - Release of finance lease obligations - 87-87 Repayment of finance lease obligations (84) (10) 3 (114) Repayment of bank loan (55) (116) (2,234) (229) Proceed from issuance of shares - - 1,137 - Net cash used in financing activities (139) (39) 878 (256) Net effect of exchange rate changes in consolidating subsidiaries (495) (77) (3,473) (486) Net decrease in cash and cash equivalents (650) 96 (6,355) 175 Cash and cash equivalents at beginning of period 4,234 10,450 9,939 10,371 Cash and cash equivalents at end of period 3,584 10,546 3,584 10,546 Cash and cash equivalents comprise of: Cash and bank balances 5,499 11,563 5,499 11,563 Bank overdraft (1,915) (1,017) (1,915) (1,017) 3,584 10,546 3,584 10,546 Page 5 of 11

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year. GROUP Equity Foreign attributable Currency Fair to the Non- Share Restricted Translation Value Accumulated owners of controlling Total Capital Reserves Reserves Reserves Profits the parent interests Equity S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 Balance at 1 July 2009 - restated 16,666 1,600 (4,083) (1,062) 33,358 46,479 (446) 46,033 Total comprehensive loss - (51) (251) - (1,931) (2,233) (32) (2,265) Balance at 31 December 2009 16,666 1,549 (4,334) (1,062) 31,427 44,246 (478) 43,768 Balance at 1 July 2010 16,666 1,548 (6,160) (1,062) 17,075 28,067 (459) 27,608 Total comprehensive loss - (67) (3,491) - (568) (4,126) (49) (4,175) Increase in share capital 1,137 - - - - 1,137-1,137 Balance at 31 December 2010 17,803 1,481 (9,651) (1,062) 16,507 25,078 (508) 24,570 COMPANY Share Fair Value Accumulated Capital Reserves Profits Total S$'000 S$'000 S$'000 S$'000 Balance at 1 July 2009 16,666 (1,062) 1,187 16,791 Total comprehensive income - - 234 234 Balance at 31 December 2009 16,666 (1,062) 1,421 17,025 Balance at 1 July 2010 16,666 (1,062) (5,070) 10,534 Total comprehensive income - - 1,354 1,354 Increase in share capital 1,137 - - 1,137 Balance at 31 December 2010 17,803 (1,062) (3,716) 13,025 Page 6 of 11

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year. Since the end of the previous financial period reported on to the date of this announcement, 12,632,000 new ordinary shares were issued by the Company pursuant to a private placement exercise. The Company did not hold any treasury shares as at 31 December 2010 and 30 June 2010. 1(d)(iii) To show the total number of issued shares excluding treasury shares as at end of the current financial period and as at the end of the immediately preceding year. The total number of issued shares excluding treasury shares as at 31 December 2010 was 252,632,000 (30 June 2010: 240,000,000). 1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on. There were no sales, transfers, disposal, cancellation and/or use of treasury shares as at 31 December 2010. 2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice. The figures in this announcement have not been audited or reviewed. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of a matter). Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied. The has applied the same accounting policies and methods of computation in the preparation of the financial statements for the current reporting period as in those applied in the most recent audited annual financial statements, except for the adoption of new and revised Financial Reporting Standards (FRS) which become effective for the financial year beginning on or after 1 July 2010. Page 7 of 11

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change. On 1 July 2010, the adopted the new/revised FRS and interpretation of FRS ( INT FRS ) which are effective for annual periods on or after 1 July 2010. The following are the new or amended FRS that are relevant to the :- (i) FRS 101 First-Time Adoption of Financial Reporting Standards - Limited Exemption from Comparative FRS 107 Disclosures for First-Time Adopters The adoption of the above FRS did not result in any substantial change to the s accounting policies nor any significant impact on the financial statements. 6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends. 6 Months Ended 31/12/2010 31/12/2009 Loss per ordinary share (based on net loss for the period):- (i) Based on weighted average number of ordinary shares in issue -0.23 cents -0.80 cents (ii) On a fully diluted basis -0.23 cents -0.80 cents Notes : The loss per ordinary share for the current financial period ended 31 December 2010 is calculated based on 252,632,000 ordinary shares while the loss per ordinary share for the previous financial period ended 31 December 2009 was calculated based on 240,000,000 ordinary shares in issue. 7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:- (a) (b) current financial period reported on; and immediately preceding financial year. Company Company 31/12/2010 30/6/2010 31/12/2010 30/6/2010 Net asset value per ordinary share based on existing issued share capital as at the end of the period 9.93 cents 11.69 cents 5.16 cents 4.39 cents Notes : The net asset value per ordinary share as at 31 December 2010 was calculated based on 252,632,000 ordinary shares while the net asset value per ordinary share as at 30 June 2010 was calculated based on 240,000,000 ordinary shares in issue. Page 8 of 11

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. It must include a discussion of the following:- (a) (b) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on. For the first half year ended 31 December 2010, the registerd a turnover of $27.6 million. The s loss before tax was reduced to $0.6 million for the first six months of this financial year compared to a loss of $1.9 million in the same period last year. The reduction in sales is mainly from the wholesale market in USA and from retail markets in China. While the retail sector in USA is improving slowly, home fashion industry remains competitive. Wholesale sales in USA has dropped by 32% when compared to last year. We are working closely with customers to develop products to meet customers demand. For China, the drop in sales is mainly due to the closing down of unprofitable counters and stores. While retail markets in Korea and Hong Kong remain soft, we see improving trend in the retail markets in Singapore and Malaysia, especially after the new concept has been introduced to the flagship store at The Paragon. The continue with stringent costs control and the effort has paid off with a $4.0 million reduction in expenses. The s distribution and selling expenses, administrative expenses and other operating expenses is $14.9 million, compared to $18.9 million same period last year, a 21.1% improvement. The reduction in expenses is mainly from the costs cutting effort in China, while other entities in the remain costs cautious. We will continue to streamline our operations in the retail market by optimise the size of the retail stores in order to achieve maximum return for the stores. The stronger SGD which has a favourable impact on the operational costs of the group, contributes to the better net result of the group as well. Cash and bank balances reduced by $5.2 million when compared to 30 June 2010 mainly due to cash being used in operating activites and the renovation costs for the Paragon store in Singapore. Trade and other payables reduced by $3.2 million between 31 December 2010 and 30 June 2010 mainly due to the timing difference in payment between the two periods. Page 9 of 11

Inventories reduced by $2.7 million when compared to June 2010. This is mainly due to reduction in inventory holdings in China. When comparing similar periods for December 2010 and December 2009, the inventory and inventory turnover (in days) are as follows: 31/12/2010 31/12/2009 Inventory Inventory turnover (in days) $12.7 million 142 days $20.0 million 168 days In the view of the Board of Directors, there is no obsolescence risk or inventory impairment. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results. Not applicable. 10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months. Whilst the market conditions continue to be challenging in the short term, we notice a positive trend in our retail markets. New season products will be launched in the coming months, and we will open a new store at Clementi Mall in Singapore at end of March 2011. The also plans to open its first Aussino stand alone store in Australia in the 4 th quarter. New international distributors in Middle East and Africa will join us in the near future as well. The has also appointed a Chief Operating Officer coming on board in March 2011 to strengthen the operations in China and to develop distributors and corporate sales as well as online internet business. We are cautiously optimistic about the outlook of the in the next 12 months. 11. Dividend (a) Current Financial Period Reported On Any dividend declared for the current financial period reported on? No. (b) Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? No. (c) Date payable Not applicable. (d) Books closure date Not applicable. Page 10 of 11

12. If no dividend has been declared/recommended, a statement to that effect. No dividend has been declared/recommended in the financial period ended 31 December 2010. 13. Confirmation pursuant to Rule 705(4) of the Listing Manual To the best of our knowledge, nothing has come to the attention of the Board of Directors which may render the unaudited interim financial results of the, comprising the balance sheets as at 31 December 2010 and the results of the business, cash flow statement, and statement of changes in equity for the six months ended on that date, together with their accompanying notes, to be false or misleading in any material respect. On Behalf of the Board Aussino Limited Anthony Lim Chairman Joanne Chow Director BY ORDER OF THE BOARD Anthony Lim Chairman 11/02/2011 Page 11 of 11