lnterim Report 2007/2008
C Y Foundation Group Limited
(Incorporated in Bermuda with limited liability)
Stock code : 1182
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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED INCOME STATEMENT

The unaudited condensed consolidated results of C Y Foundation Group
Limited (the “Company”) and its subsidiaries (the “Group”) for the six months
ended 30 September 2007 together with the comparative figures for the last
corresponding period are as follows:
Six months ended
30 September
2007 2006

Note HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Continuing Operations
Turnover 4 29,345 36,514
Cost of sales (15,781 ) (18,480 )
Gross profit 13,564 18,034
Other revenue 19,366 468
Selling and distribution costs (15,129 ) (16,338 )
Administrative expenses (30,814 ) (8,018 )
Loss from operations 5 (13,013 ) (5,854 )
Finance costs 6 (1,158 ) (327 )
Excess of net assets value over the
consideration arising from
acquisition of subsidiaries 18 1,336 –
Loss before income tax (12,835 ) (6,181 )
Income tax 7 – –
Loss from continuing operations (12,835 ) (6,181 )
Discontinued operation
Loss from discontinued operation 8 – (14,830 )
Loss for the period (12,835 ) (21,011 )
Loss attributable to:
Equity holders of the Company 9 (12,605 ) (21,011 )
Minority interest (230 ) –
(12,835 ) (21,011 )
Loss per share 10
Basic
– Continuing operations (0.37) cent (7.07) cents
– Discontinued operation – (16.96) cents
Diluted N/A N/A

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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED BALANCE SHEET

As at 30 September 2007
As at As at
30 September 31 March
2007 2007

Note HK$’000 HK$’000
(Unaudited) (Audited)
ASSETS

Non-current assets
Property, plant and equipment 11 4,942 730
Loan receivables 12 17,098 –
Licenses 27,036 –
49,076 730

Current assets
Inventories 1,530 17,206
Trade and other receivables 13 28,465 15,231
Pledged bank deposits – 497
Bank fiduciary deposit 14 557,200 328,276
Cash and cash equivalents 197,128 460,573
784,323 821,783
LIABILITIES

Current liabilities
Trade and other payables 15 54,773 745,830
Current portion of obligations
00.0 finance lease 356 –
Short term loan, secured – 25,380
55,129 771,210

Net current assets 729,194 50,573
Total assets less current liabilities 778,270 51,303

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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
As at 30 September 2007
As at As at
30 September 31 March
2007 2007

Note HK$’000 HK$’000
(Unaudited) (Audited)
Non-current liabilities
Obligations under finance lease 948 –
Convertible note 16 18,891 3,016
Provision for long service payments 959 959
20,798 3,975
NET ASSETS 757,472 47,328
CAPITAL AND RESERVES

Share capital 17 3,687 3,087
Reserves 752,734 44,241
Total equity attributable to equity
shareholders of the Company 756,421 47,328
MINORITY INTEREST 1,051 –
TOTAL EQUITY 757,472 47,328

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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY

For the six months ended 30 September 2007
Reserves

Capital Accumu-
Share Share Fair value Capital Translation redemption Reserve lated Total Minority
capital premium reserve reserve reserve reserve funds losses reserves interest Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Note (a)) (Note (b))
As at 1 April 2006 1,748 709,633 (12,845 ) – – 1,190 135 (655,942 ) 42,171 – 43,919
Capital and share
premium reduction
(Note 17(a)) (1,661 ) (709,633 ) – – – – – 711,294 1,661 – –
Reserve realised upon
disposal of available-
for-sale financial assets – – 12,845 – – – – – 12,845 – 12,845
Loss for the period – – – – – – – (21,011 ) (21,011 ) – (21,011 )
As at 30 September 2006 87 – – – – 1,190 135 34,341 35,666 – 35,753
As at 1 April 2007 3,087 27,000 – 992 47 1,190 135 14,877 44,241 – 47,328
Issue of new shares
(Note 17(e)) 600 717,190 – – – – – – 717,190 – 717,790
Share premium reduction
(Note (c)) – (15,208 ) – – – – – 15,208 – – –
Equity component of
convertible note issued
(Note 16) – – – 4,972 – – – – 4,972 – 4,972
Acquisition of subsidiaries
(Note 18) – – – – – – – – – 1,281 1,281
Exchange realignment – – – – (1,064 ) – – – (1,064 ) – (1,064 )
Loss for the period – – – – – – – (12,605 ) (12,605 ) (230 ) (12,835 )
As at 30 September 2007 3,687 728,982 – 5,964 (1,017 ) 1,190 135 17,480 752,734 1,051 757,472

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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED STATEMENT OF CHANGES

IN EQUITY (Continued)
For the six months ended 30 September 2007
Notes:
(a) The fair value reserve comprises the cumulative net change in the fair value
of available-for-sale financial assets held at the balance sheet date and is
dealt with in accordance with the Company’s accounting policy.
(b) Pursuant to the relevant laws and regulations in the People’s Republic of
China (“PRC”), a portion of the profit of the Group’s subsidiaries in the PRC
has been transferred to reserve funds which are restricted as to use.
(c) Pursuant to a resolution passed at the annual general meeting of the
Company on 23 August 2007, it was resolved that, subject to compliance with
section 46 (2) (b) of the Companies Act 1981 of Bermuda (as amended), the
share premium account of the Company would be reduced by HK$ 15,208,000
and such amount be transferred to the contributed surplus account of the
Company where it was utilised by the directors in accordance with the Bye-
laws of the Company and all applicable laws to apply such amount to set off
against the accumulated losses of the Company.

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Interim Report 2007/2008
C Y Foundation Group Limited
CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2007
Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
NET CASH (USED IN)/GENERATED FROM
OPERATING ACTIVITIES (762,145 ) 3,850
NET CASH USED IN INVESTING ACTIVITIES (213,950 ) (1,397 )
NET CASH GENERATED FROM/(USED IN)
FINANCING ACTIVITIES 713,714 (63 )
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (262,381 ) 2,390
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 460,573 14,621
EFFECT OF FOREIGN EXCHANGE RATE

CHANGES (1,064 ) –
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 197,128 17,011

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Interim Report 2007/2008
C Y Foundation Group Limited
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
INTERIM FINANCIAL STATEMENTS

For the six months ended 30 September 2007
1. GENERAL

The Company was incorporated in Bermuda with limited liability and its
shares are listed on Its ultimate holding company is Luck Continent Limited (“Luck
Continent”) (incorporated in the British Virgin Islands) on 31 March 2007. The
addresses of the registered office and principal place of business of the
Company are Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
and 17/F., Silver Base Centre, 200 Gloucester Road, Wanchai, Hong Kong
respectively.
The unaudited condensed consolidated interim financial statements are
presented in Hong Kong dollars, which is the same as the functional currency
of the Company.
The Company is an investment holding company. The principal activities of the
Company and its subsidiaries (the “Group”) are investment holding, apparel
trading, strategic investments and provision of online game tournament
services in the PRC.
The operations of the online game tournament services in the PRC were
initially conducted through T-Matrix Culture Company Limited (“T-Matrix”), a
limited liability company established in the PRC on 11 September 2003. T-Matrix
is a wholly owned subsidiary of Beijing Horizon Trading Company Limited
(“Beijing Horizon”), a limited liability company established in the PRC on 15
July 1999. Beijing Horizon is legally owned by certain individual owners, who
are PRC citizens (the “Registered Shareholders”).

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Interim Report 2007/2008
C Y Foundation Group Limited
1. GENERAL (Continued)
The PRC laws and regulations restrict foreign ownership of companies
providing value-added telecommunications services, which included
activities and services operated by T-Matrix. In order to enable certain foreign
companies to make investments into the business of the Group, the Company
established a subsidiary, o (“o ”), which is a wholly
foreign owned enterprise established in the PRC on 30 December 2006.
Certain contractual arrangements have been made among o , Beijing
Horizon and the Registered Shareholders so that the decision-making rights
and operating and financing activities of Beijing Horizon are ultimately
controlled by the Company. o are also entitled to substantially all of
the operating profits and residual benefits generated by Beijing Horizon under
these arrangements. In particular, the Registered Shareholders are required
under their contractual arrangements with the Group to transfer these
interests in Beijing Horizon to the Group or the Group’s designee upon the
Group’s request at a pre-agreed consideration.
Further, pursuant to the contractual arrangements between o and
Beijing Horizon, the Group owns the intellectual property developed by
Beijing Horizon. It also receives the cash flow derived from the operations
of Beijing Horizon through the levying of service and consultancy fees and
sales of software. The ownership interests in Beijing Horizon have also been
pledged by the Registered Shareholders to the Group. As a result, Beijing
Horizon is accounted for as a special purpose entity and a subsidiary of the
Group for accounting purposes. This approach was adopted because in the
management’s beliefs it best reflects the substance of the formation of the
Group.

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Interim Report 2007/2008
C Y Foundation Group Limited
2. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements for the six
months ended 30 September 2007 have been prepared in accordance with
Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting”
issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”)
and the applicable disclosure requirements of Appendix 16 to the Rules
Governing the Listing of Securities (the “Listing Rules”) on the Stock Exchange.
The unaudited condensed consolidated interim financial statements should
be read in conjunction with the annual financial statements for the year
ended 31 March 2007.
3. PRINCIPAL ACCOUNTING POLICIES

The unaudited condensed consolidated interim financial statements have
been prepared under the historical cost convention.
Except for those mentioned below, the accounting policies and methods
of computation used in the preparation of these unaudited condensed
consolidated interim financial statements are consistent with those used in the
annual financial statements for the year ended 31 March 2007. In particular,
we have consolidated Beijing Horizon and its subsidiaries (“Beijing Horizon
Group”) into the financial statements of the Group notwithstanding the lack
of legal equity ownership of Beijing Horizon, because in substance certain
contractual arrangements enacted with Beijing Horizon give the Company
control over Beijing Horizon by way of controlling more than one half of the
voting rights of Beijing Horizon, governing its financial and operational policies
and appointing or removing the majority of the members of its controlling
authorities, and casting the majority of votes at meetings of such authorities.
In addition, such contractual arrangements also transfer the risks and rewards
of Beijing Horizon to the Company.
In the current period, the Group has applied, for the first time, a number of
new standard, amendment and interpretations (“new HKFRSs”) issued by the
HKICPA which are effective for the financial year ending 31 March 2008.

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Interim Report 2007/2008
C Y Foundation Group Limited
3. PRINCIPAL ACCOUNTING POLICIES (Continued)
HKAS 1 (Amendment) Presentation of Financial Statements:
Capital Disclosures
HKFRS 7 Financial Instruments: Disclosures
HK(IFRIC) – Int 8 Scope of HKFRS 2
HK(IFRIC) – Int 9 Reassessment of Embedded Derivatives
HK(IFRIC) – Int 10 Interim Financial Reporting and Impairment
HK(IFRIC) – Int 11 HKFRS 2 - Group and Treasury Share Transactions
The adoption of the new HKFRSs had no material effect on how the results
and financial position for the current or prior accounting periods have been
prepared and presented. Accordingly, no prior period adjustment has been
required.
The Group has not early applied the following new/revised standards and
interpretations that have been issued but are not yet effective. The directors
of the Company anticipate that the application of these standards and
interpretations will have no material impact on the results and financial
position of the Group.
HKAS 23 (Revised) Borrowing Costs
1
HKFRS 8 Operating Segments
1
HK(IFRIC) – Int 12 Service Concession Arrangements
2
HK(IFRIC) – Int 13 Customer Loyalty Programmes
3
HK(IFRIC) – Int 14 HKAS 19 - The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and
their Interaction
2
1
Effective for annual periods beginning on or after 1 January 2009
2
Effective for annual periods beginning on or after 1 January 2008
3
Effective for annual periods beginning on or after 1 July 2008

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Interim Report 2007/2008
C Y Foundation Group Limited
3. PRINCIPAL ACCOUNTING POLICIES (Continued)
(a) Consolidation
Subsidiaries are all entities (including special purpose entities) over
which the Group has the power to govern the financial and operating
policies generally accompanying a shareholding of more than one
half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group.
They are de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued
and liabilities incurred or assumed at the date of exchange, plus costs
directly attributable to the acquisition. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date. The
excess of the cost of acquisition over the fair value of the Group’s share
of the identifiable net assets acquired is recorded as goodwill. If the cost
of acquisition is less than the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the income statement.

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Interim Report 2007/2008
C Y Foundation Group Limited
3. PRINCIPAL ACCOUNTING POLICIES (Continued)
(a) Consolidation (Continued)
To comply with PRC laws and regulations that restrict foreign ownership
of companies that operate online game tournament services and
other restricted business, the Group operates and provides such
restricted services in the PRC through a PRC domestic company whose
equity interests are held by certain individual owners. The domestic
company has entered into a business cooperation and technical
service agreement with the Group, which makes it obligatory for the
Group to absorb a substantial majority of the risk of losses from the
PRC domestic company’s activities and entitles the Group to receive
a substantial majority of its residual returns. In addition, the Group has
entered into certain agreements with those individual owners, including
loan agreement for them to contribute paid-in capital to the domestic
company, option agreement for the Group to acquire the equity in the
PRC domestic company subject to compliance with PRC laws, pledge
agreement over the equity interests of the PRC domestic company held
by those individual owners, and proxy agreement irrevocably authorising
individuals designated by the Group to exercise the equity owners’ rights
over the PRC domestic company, whichever is applicable. Based on
these contractual agreements, the Group believes that, notwithstanding
the lack of equity ownership, the contractual arrangements described
above give the Group control over the PRC domestic company in
substance. Accordingly, the financial position and operating results of the
entity are included in the unaudited condensed consolidated interim
financial statements.
Inter-company transactions, balances and unrealised gains on
transactions between the group companies are eliminated. Unrealised
losses are also eliminated but considered as an impairment indicator
of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies
adopted by the Group.
(b) Intangible assets
Intangible asset includes licenses acquired from business combinations.
They are initially recognised and measured at estimated fair value upon
acquisition. Cost of licenses are being amortised on a straight-line basis
over the licenses period.

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Interim Report 2007/2008
C Y Foundation Group Limited
4. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business Segments
The Group comprised the following main business segments:
(a) Online game tournament services
(b) Apparel trading
(c) Strategic investments and others
The analysis of the Group’s turnover and results for the six months ended 30
September 2007 and 2006 regarding business segments is as follows:
For the six months ended 30 September 2007
Discontinued
Continuing operations operation

Online game Strategic
tournament Apparel investments Securities
services trading and others Sub-total trading Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Turnover 131 29,214 – 29,345 – 29,345

Segment results (1,548 ) (8,553 ) – (10,101 ) – (10,101 )

Interest income 19,007 19,007
Unallocated income 9 9
Group overheads (21,928 ) (21,928 )

Loss from operations (13,013 ) (13,013 )
Finance costs (1,158 ) (1,158 )
Excess of net assets value
over the consideration
arising from acquisition
of subsidiaries 1,336 1,336

Loss before income tax (12,835 ) (12,835 )
Income tax – –

Loss from continuing
operations (12,835 )

Loss for the period (12,835 )

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Interim Report 2007/2008
C Y Foundation Group Limited
4. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued)
Business Segments (Continued)
For the six months ended 30 September 2006 (Restated)
Discontinued
Continuing operations operation

Online game Strategic
tournament Apparel investments Securities
services trading and others Sub-total trading Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Turnover – 36,514 – 36,514 55 36,569

Segment results – (4,997 ) – (4,997 ) (1,542 ) (6,539 )

Interest income 149 149
Group overheads (1,006 ) (1,006 )

Loss from operations (5,854 ) (7,396 )
Finance costs (327 ) (327 )
Loss on disposal of
available-for-sale
financial assets – (13,288 ) (13,288 )

Loss before income tax (6,181 ) (21,011 )
Income tax – –

Loss from continuing
operations (6,181 )

Loss for the period (21,011 )

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Interim Report 2007/2008
C Y Foundation Group Limited
4. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued)
Geographical segments
The Group’s operations are principally located in the PRC and Hong Kong.
The analysis of the Group’s turnover and results by geographical segment is
as follows:
Six months ended 30 September

Hong Kong The PRC Consolidated

2007 2006 2007 2006 2007 2006

HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Segment revenue:
Turnover
– Continuing operations 21,949 24,744 7,396 11,770 29,345 36,514
– Discontinued operation – 55 – – – 55
21,949 24,799 7,396 11,770 29,345 36,569

Segment results
– Continuing operations (13,608 ) (4,751 ) 773 (1,430 ) (12,835 ) (6,181 )
– Discontinued operation – (14,830 ) – – – (14,830 )
(13,608 ) (19,581 ) 773 (1,430 ) (12,835 ) (21,011 )

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Interim Report 2007/2008
C Y Foundation Group Limited
5. LOSS FROM OPERATIONS

Loss from operations has been arrived at after charging/(crediting):
Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Continuing operations
Cost of sales 15,781 18,480
Auditors’ remuneration
Non-audit fee 280 –
Depreciation 830 999
Loss on disposal/write-off of property,
plant and equipment – 451
Operating lease rentals in respect of
land and buildings 4,325 909
Royalty expenses 1,636 –
Staff salaries and other benefits 15,421 3,395
Staff retirement benefits scheme
contributions, net of forfeited
contributions of HK$ Nil (Six months
ended 30 September 2006: HK$ Nil) 121 –
Total staff costs including directors’
emoluments 15,542 3,395
Discontinued operation
Cost of sales – 59
Depreciation – 16
Operating lease rentals in respect of
land and buildings – 422
Staff salaries and other benefits – 363
Staff retirement benefits scheme
contributions, net of forfeited
contributions of HK$ Nil (Six months
ended 30 September 2006: HK$Nil) – –
Total staff costs including directors’
emoluments – 363

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Interim Report 2007/2008
C Y Foundation Group Limited
6. FINANCE COSTS

Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Continuing operations
Interest on short term loan wholly
repayable within five years 311 327
Imputed interest on convertible note
(Note 16) 847 –
1,158 327

Discontinued operation – –
7. INCOME TAX

No provision for Hong Kong Profits Tax has been made in the financial
statements as the Company and its subsidiaries had no assessable profits for
the six months ended 30 September 2007 and 2006.
Pursuant to a notice dated 7 March 2005 issued by Shanghai Local Tax Bureau
Xu Hui Branch, PiW (“Pi ”), a subsidiary of the Group, is
exempted from PRC enterprise income tax (“EIT”) for the period from 1 May
2004 to 31 December 2006. No provision has been made for Pi for the
six months ended 30 September 2007 as Pi sustained a loss for taxation
purpose during the period.
No provision for EIT has been made for other subsidiaries operating in the PRC
as they did not generate any assessable profits during the six months ended
30 September 2007 and 2006.

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Interim Report 2007/2008
C Y Foundation Group Limited
8. DISCONTINUED OPERATION

On 21 March 2007, the Group disposed of the entire equity interest in a
subsidiary, Gold Venture Corporation Limited (“Gold Venture”), and the
amount due from Gold Venture to the Group at a total consideration of
approximately HK$321,000. Gold Venture was principally engaged in securities
trading.
The loss from the discontinued operation is analysed as follows:
Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Gain on disposal – –
Loss from operation of Gold Venture – (14,830 )
– (14,830 )

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Interim Report 2007/2008
C Y Foundation Group Limited
8. DISCONTINUED OPERATION (Continued)
The results of Gold Venture were as follows:
Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Turnover – 55
Cost of sales – (59 )
Gross loss – (4 )
Administrative expenses – (1,538 )
Loss from operation – (1,542 )
Loss on disposal of available-for-sale
financial assets – (13,288 )
Loss before income tax – (14,830 )
Income tax – –
Loss for the period – (14,830 )
9. LOSS ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY

The loss attributable to equity holders of the Company is dealt with in the
unaudited condensed consolidated interim financial statements of the
Company to the extent of HK$12,605,000 (Six months ended 30 September
2006: HK$21,011,000).

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Interim Report 2007/2008
C Y Foundation Group Limited
10. LOSS PER SHARE

(a) Basic loss per share
The calculation of the basic loss per share is based on the following
data:
Six months ended
30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
(Restated)
Loss
Loss for the purpose of the basic loss per share
Continuing operations (12,835) (6,181 )
Discontinued operation – (14,830 )
Continuing and discontinued operations (12,835) (21,011 )
Weighted average number of ordinary shares
‘000 ‘000
Issued ordinary shares at beginning of period 3,087,422 1,748,433
Effect of share consolidation (Note 17(b)) – (1,661,011 )
Effect of issue of new shares (Note 17(e)) 422,951 –
Weighted average number of ordinary
shares at end of period 3,510,373 87,422
Basic loss per share
Continuing operations (0.37) cent (7.07) cents
Discontinued operation – (16.96) cents
Continuing and discontinued operations (0.37) cent (24.03) cents

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Interim Report 2007/2008
C Y Foundation Group Limited
10. LOSS PER SHARE (Continued)
(b) Diluted loss per share
Diluted loss per share for the six months ended 30 September 2007 has
not been disclosed as the potential ordinary shares outstanding during
the period had an anti-dilutive effect on the basic loss for the period.
Diluted loss per share was not presented for the six months ended 30
September 2006 as there were no dilutive potential shares in issue during
the period.
11. PROPERTY, PLANT AND EQUIPMENT

HK$’000
(Unaudited)
Net book value as at 1 April 2007 730
Additions 2,778
Acquisition of subsidiaries (Note 18) 2,264
Depreciation (830 )
Net book value as at 30 September 2007 4,942
12. LOAN RECEIVABLES

The amounts were unsecured and bearing interest at 0.5% to 1% per annum. In
the opinion of directors, the carrying value of loan receivables approximates
their fair value.

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Interim Report 2007/2008
C Y Foundation Group Limited
13. TRADE AND OTHER RECEIVABLES

As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
Trade receivables (Note (a)) 2,396 6,822
Other receivables 4,177 3,121
Deposits and prepayments 19,626 5,288
Due from a director 206 –
Due from minority shareholders of a subsidiary 2,060 –
28,465 15,231

Note:
(a) An ageing analysis of trade receivables, net of provision for impairment
loss for bad and doubtful debts is as follows:
As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
0 – 60 days 2,114 6,820
61 – 90 days 33 –
91 – 180 days 138 –
181 – 365 days 109 –
Over 1 year 2 2
2,396 6,822

The Group allows a credit period normally ranging from cash on delivery
to 60 days (At 31 March 2007: 60 days) to its trade customers.

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Interim Report 2007/2008
C Y Foundation Group Limited
14. BANK FIDUCIARY DEPOSIT

As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
Balance as at period/year end 557,200 328,276
The Group’s bank fiduciary deposit represents the cash deposit in LGT Bank
in Liechtenstein Ltd. (“LGT Bank”). According to the agreement between the
Company and LGT Bank, the Company instructed LGT Bank to place capital
investments in the form of money market investments in the name of LGT Bank
by using the fiduciary deposit, but for the account and exclusive risk of the
Company with foreign banks. LGT Bank shall act at its discretion and act as
the agent of the Company.
The first time a placement is made it shall be executed according to
instructions received from the Company. Subsequently, LGT Bank shall be
empowered to extend/renew and increase/reduce the sum of the investment
with the same or another foreign bank at conditions it shall stipulate, provided
it does not receive contrary instructions from the Company not later than
two working days before the deposit falls due. Such fiduciary placements
may only be made up to the limit of the Company’s own funds. In no
circumstances may the LGT Bank, in making such discretionary placements,
make use of credit facilities available to the Company. All risks of any type
connected with such placements shall be exclusively for the account of the
Company.

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Interim Report 2007/2008
C Y Foundation Group Limited
15. TRADE AND OTHER PAYABLES

As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
Trade payables (Note (a)) 1,244 1,427
Bills payable 9 336
Deposits received 909 4,539
Accruals and other payables 51,902 19,785
Due to a director 709 –
Due to the ultimate holding company – 719,743
54,773 745,830

Note:
(a) An ageing analysis of trade payables is as follows:
As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
0 – 60 days – 183
61 – 90 days –
91 – 180 days –
181 – 365 days – –
Over 1 year 1,244 1,244
1,244 1,427

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Interim Report 2007/2008
C Y Foundation Group Limited
16. CONVERTIBLE NOTE

On 29 January 2007, a resolution was passed at a special general meeting
of the Company pursuant to which a zero-coupon convertible note in an
aggregate principal amount of HK$24,000,000 (“Convertible Note”) would
be issued to Super Bonus Management Limited (“Super Bonus”) in which Mr.
Cheng Chee Tock Theodore, a director of the Company, held 100% interest.
The Convertible Note has a maturity date of the third anniversary of the date
of the issue of the Convertible Note. The noteholder has the right to convert
the Convertible Note into ordinary shares in the Company at any time during
the period from the date of the issue of the Convertible Note to the third
anniversary of the date of the issue of the Convertible Note at an initial
conversion price of HK$0.01 per share, subject to adjustment. On the maturity
date, the outstanding Convertible Note will be redeemed at par in cash.
On 21 March 2007, the Company issued a zero-coupon convertible note in
an aggregate principal amount of HK$4,000,000 (“First Convertible Note”) to
Super Bonus. On the same date, the First Convertible Note was transferred to
Copernicus Trading Limited, a company wholly owned by Mr. Cheng Chee
Tock Theodore. The First Convertible Note has a maturity date of 20 March
2010 and had not been converted during the six months ended 30 September
2007.

On 13 April 2007, the Company issued a zero-coupon convertible note in an
aggregate principal amount of HK$20,000,000 (“Second Convertible Note”)
to Super Bonus. The Second Convertible Note has a maturity date of 12 April
2010.

The convertible notes were split into liability and equity components of
HK$18,036,000 and HK$5,964,000, respectively upon initial recognition
by recognising the liability component at its fair value and attributing
to the equity component the residual amount. The liability component
is subsequently carried at amortised cost and the equity component is
recognised in the capital reserve.

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Interim Report 2007/2008
C Y Foundation Group Limited
16. CONVERTIBLE NOTE (Continued)
The movements of the liability component of the Convertible Note for the
period/year is as follows:
As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
Liability component at beginning of
period/year 3,016 –
Principal amount of Convertible
Note issued 20,000 4,000
Equity component (4,972 ) (992 )
Interest expense (Note 6) 847 8
Liability component at end of period/year 18,891 3,016
Interest expense on the Convertible Note is calculated using the effective
interest method by applying the effective interest rate of 9.97% and 10% per
annum to the liability component of the First Convertible Note and Second
Convertible Note respectively.

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C Y Foundation Group Limited
17. SHARE CAPITAL

Number
of shares
’000 HK$’000
Authorised:
As at 30 September 2006 and 30 September 2007:
Ordinary shares of HK$0.001 each 300,000,000 300,000
Issued and fully paid:
As at 1 April 2006 1,748,433 1,748
Capital reduction (Note (a)) – (1,661 )
Share consolidation (Note (b)) (1,661,011 ) –
As at 30 September 2006 87,422 87
As at 1 April 2007 3,087,422 3,087
Issue of new shares (Note (e)) 600,000 600
At 30 September 2007 3,687,422 3,687
Notes:
(a) Capital and share premium reduction
On 26 April 2006, the issued capital of the Company was reduced by
HK$0.00095 per issued share by cancelling an equivalent amount of
paid-up capital per issued share so that the nominal value of each
issued share was reduced from HK$0.001 to HK$0.00005. Accordingly,
based upon 1,748,433,048 shares in issue as at the date of the
announcement, the issued share capital of the Company of HK$1,748,000
would be reduced by HK$1,661,000 to HK$87,000.
On the same date, the share premium of the Company of
HK$709,633,000 was cancelled. The credit arising from the capital
reduction and the share premium reduction respectively was transferred
to the contributed surplus account of the Company where it was utilised
by the directors in accordance with the Bye-laws of the Company
and all applicable laws to apply such credit to set-off against the
accumulated losses of the Company.

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C Y Foundation Group Limited
17. SHARE CAPITAL (Continued)
Notes: (Continued)
(b) Share consolidation
On 26 April 2006, the share consolidation was implemented whereby
every 20 shares of HK$0.00005 each resulting from the capital reduction
as mentioned in note 17(a) above were consolidated into one
consolidated share of HK$0.001.
(c) Issue of new shares
On 31 January 2007, 3,000,000,000 new shares of HK$0.001 each in the
Company was subscribed by Luck Continent at a subscription price of
HK$0.01 per share. The new shares rank pari passu in all respects with the
then existing shares in the Company. The premium arose from the issue
of the new shares of HK$27,000,000 was credited to the share premium
account. The Company used the net proceeds as general working
capital of the Group.
(d) Issue of warrant
After considering the number of shares to be subscribed by Luck
Continent as mentioned in note 17(c) above, on 31 January 2007, the
Company issued by way of bonus to Luck Continent an unlisted warrant
(“Warrant”) which confers rights to subscribe up to HK$6,000,000 in
aggregate in cash for shares in the Company at an initial subscription
price of HK$0.01 per share, subject to adjustment.
The subscription rights attaching to the Warrant may be exercised in
whole or in part within the period from the date of the issue of the
Warrant to the third anniversary of the date of the issue of the Warrant.
Up to the date of the report, no warrant has been exercised.

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Interim Report 2007/2008
C Y Foundation Group Limited
17. SHARE CAPITAL (Continued)
Notes: (Continued)
(e) Issue of new shares
On 25 May 2007, 600,000,000 new shares of HK$0.001 each in the
Company was subscribed by Luck Continent at a subscription price of
HK$1.28 per share. The new shares rank pari passu in all respects with the
then existing shares in the Company. The premium arose from the issue of
the new shares of HK$767,400,000 and after net of share issue expenses
of HK$50,210,000 was credited to the share premium account. The net
proceeds were expected to be used to finance the Group’s plan to
expand into online game and electronic tournament game market in
the PRC.
18. BUSINESS COMBINATION

Acquisition of 100% controlling interest in Beijing Horizon Group
On 1 August 2007, the Group acquired 100% controlling interest in Beijing
Horizon Group through certain contractual arrangements among o ,
Beijing Horizon and the Registered Shareholders (as described in note 1, note
2 and note 3 above) at a zero consideration. Notwithstanding the Group
lacks equity ownership in Beijing Horizon, such contractual arrangements
in substance give the Group control over Beijing Horizon Group by way of
controlling all the voting rights of Beijing Horizon, governing its financial and
operational policies and appointing or removing the majority of the members
of its controlling authorities, and casting the majority of votes at meetings of
such authorities. In addition, such contractual arrangements also transfer the
risks and rewards of Beijing Horizon Group to the Group. As a result, Beijing
Horizon is accounted for as a special purpose entity and thus a subsidiary
of the Group for accounting purpose. This acquisition has been accounted
for using the purchase method of accounting. The excess of the fair value
of the net assets of Beijing Horizon Group over the cost of acquisition was
approximately HK$1,336,000 and recognised in the unaudited condensed
consolidated income statement for the six months ended 30 September 2007.

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Interim Report 2007/2008
C Y Foundation Group Limited
18. BUSINESS COMBINATION (Continued)
The details of net assets of Beijing Horizon Group at the date of acquisition
are as follows:
Recognised
Pre-acquisition Fair value values on
carrying amount adjustments acquisition
HK$’000 HK$’000 HK$’000
(Unaudited) (Unaudited) (Unaudited)
Property, plant and equipment
(Note 11) 2,264 – 2,264
Licenses 27,036 – 27,036
Trade and other receivables 5,958 – 5,958
Cash and cash equivalents 18,591 – 18,591
Trade and other payables (26,499 ) – (26,499 )
Loans to a related company (24,733 ) – (24,733 )
Minority interest (1,281 ) – (1,281 )
Net assets 1,336 – 1,336
Total consideration –
Excess of net assets value
over the consideration 1,336
In the opinion of directors, the carrying amounts of net assets of Beijing
Horizon Group at the date of acquisition approximate their fair value.

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C Y Foundation Group Limited
19. CONTINGENT LIABILITIES

Litigation
In August 2005, Orient Rise Limited (“Orient Rise”) initiated a legal action
against French Trade Marketing Limited and Prime Axis Limited (formerly
known as “Euro Fashion Trading Company Limited”), two wholly-owned
subsidiaries of the Group, for a breach of the terms of sublicence causing loss
and damages to Orient Rise.
Up to the date of this report, the directors believed that there is no ground for
Orient Rise to make the claim and therefore, no provision has been made in
the unaudited condensed consolidated interim financial statements.
20. RELATED PARTY TRANSACTIONS

(a) In addition to the transactions and balances disclosed elsewhere in the
unaudited condensed consolidated interim financial statements, the
Group did not have any significant related party transaction during the
period.
(b) The key management compensation for the six months ended 30
September 2007 and 2006 is detailed as follows:
As at As at
30 September 30 September
2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
Fees 784 150
Salaries and other allowances 710 304
Contributions to retirement
benefit schemes – –
1,494 454

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Interim Report 2007/2008
C Y Foundation Group Limited
21. EVENTS AFTER BALANCE SHEET DATE

(a) On 9 October, 2007, the Group entered into a letter of intent with an
independent third party for the acquisition of a property located in
Beijing at a total consideration of approximately HK$64,592,000.
(b) On 9 October 2007, the Group entered into a sale & purchase
agreement with an independent third party for the acquisition of the
entire issued share capital of and the shareholder loan advanced
to Mansion Gains Holdings Limited whose sole underlying asset is the
property located in Hong Kong, at a total consideration of approximately
HK$53,500,000.
(c) On 5 November 2007, the note-holders have converted the Convertible
Note in an aggregate principal amount of HK$2,000,000 into 200,000,000
ordinary shares of HK$0.001 each at a conversion price of HK$0.01 per
share.
22. COMPARATIVE FIGURES

Certain comparative figures have been restated or re-classified as a result of
the presentation of discontinued operation and conformation with the current
period’s presentation.

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Interim Report 2007/2008
C Y Foundation Group Limited
DIVIDEND

The Board did not recommend any interim dividend for the underlying period
(2006: Nil).
REVIEW AND OUTLOOK

Financial Review
Operating results
For the six months ended 30 September 2007, the Group recorded a turnover
of HK$29.3 million as compared to HK$36.5 million for the last corresponding
period. The decrease was due to the gradual phasing out of the apparel
trading business as well as the Group’s new focus on its new business
development in online game tournaments. The Group also reported a net
loss of HK$12.8 million as compared to a loss of HK21.0 million in the last
corresponding period. The loss was mainly attributable to the loss from
the gradually discontinued operation - apparel trading business and the
establishing cost for the online game tournament business.
As the new business of online game tournaments is still at its early
development stage and takes time to establish, the current financial figures
reflect mainly the being phased out apparel business operation. The benefits
from the anticipated high growth in online game tournaments is expected to
emerge from the next financial year and onwards.
Business Review – Old Business
At the beginning of the period under review, the Board had determined to
focus on the development of the new online game tournaments business
and has gradually shifted the resources away from its apparel business. This
business recorded a turnover of HK$29.2 million and a net loss of HK$8.9 million
for the period under review. The portfolio of the apparel trading is expected
to be scaled down in the forthcoming financial year.

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Interim Report 2007/2008
C Y Foundation Group Limited
REVIEW AND OUTLOOK (Continued)
New Course – Online Game Tournaments
The revenue from the new business started to accrue to the Group from
August 2007. During two months’ period, the revenue generated from the new
business of the Group amounted to approximately HK$0.13 million and the net
loss for this period was approximately HK$3.9 million. The Group’s core business
is to organize and manage nationwide online game tournaments. Players
from all over China will participate in online tournaments that will feature
casual games such as mahjong, doudizhu, Texas Hold’em poker, tuolaji, and
animated entertainment games.
Tournaments
The Group operates online P2P (player to player) game tournaments for
prizes all across China. The Group is the company dedicated to the online
tournament market in China and sees enormous potential in a country where
the online gaming market is estimated to comprise more than 45 million
players (2006) and is growing at more than 39% per year.
The online tournament market in China is new. The Group maintains a first
mover advantage and is developing unique tournament formats suitable for
multiple market segments. The Group’s online tournaments will feature hugely
popular card games such as Doudizhu and Texas Hold’em.
Distribution Channel
The Group’s main distribution channel is internet cafes; there are over 120,000
licensed internet cafes nationwide with 27 million visitors per day. Through
Network Media Center, the Group has access to a wide range of resources
to accelerate the roll out and popularity of our online tournament platform,
including a network of 20,000 internet cafes.

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Interim Report 2007/2008
C Y Foundation Group Limited
REVIEW AND OUTLOOK (Continued)
New Course – Online Game Tournaments (Continued)
Tournament Platform
The Group will accelerate roll out of tournaments to a large network of
internet cafes by developing a proprietary tournament platform. The platform
will contain a full suite of services that will offer players a seamless and
exciting game-user experience. This will include membership, payment, prize
distribution and tournament statistics services.
Enternet
The online tournaments will gain further support and exposure through our
high-end flagship entertainment centers, located in the major cities across
China. The entertainment centers feature a full spectrum of entertainment
including P2P tournament playing section, VIP rooms, digital cinemas playing
international films and live sports, internet cafe and a refreshment area. Our
first entertainment center opened on 14 September 2007 in Shanghai. Future
locations to be open soon include Shenzhen and Beijing.
Acquisition
During the period, the Group acquired T-Matrix Culture Company Limited
to speed up the roll out of the Group’s online tournament platform. T-Matrix
has over 1,000 internet cafe franchisees and allied internet cafe partners
in over 9 provinces across China. T-Matrix is one of only 7 active license
owners authorised by the PRC’s Minsitry of Culture to franchise internet cafes
nationwide in China. Internet cafes in this T-Matrix group will become the
Group’s online tournament platform and hold nationwide tournaments. The
acquisition of T-Matrix had expedited the establishment of marketing channels
in promoting the online game tournaments. The Group began operating
online tournaments throughout the T-Matrix network since early August 2007.

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Interim Report 2007/2008
C Y Foundation Group Limited
REVIEW AND OUTLOOK (Continued)
New Course – Online Game Tournaments (Continued)
Rolling out of tournaments
Various electronic tournaments have been launched since mid of the year.
The latest one named China Youth Electronic Tournament or CYET was
launched in October 2007 and had proved a huge success with nearly 29,000
players signing up for the tournament. Since then, CYET has been launched in
over 230 internet cafes in Wuxi, China.
The entertainment centre and the tournaments took the Group a great
step forward towards our objective of establishing a sizeable online gaming
community. The Group looks forward to rolling out more tournament via its
proprietary platform to more cities across China and the growth of our player
base as well as the geographical reach.
Capital resources and currency exposure
As at 30 September 2007, the cash and cash equivalents (including bank
fiduciary deposit) of the Group amounted to approximately HK$754.3 million
and there was no bank borrowing. The gearing ratio of interest bearing
borrowing (net of the zero coupon rate convertible notes) against the total
equity at 31 March 2007 was 53.6%. As majority of the cash on hand is in US
currency, the Group’s exchange risk exposure is mainly in the downward
trend of US currency. Therefore, the Group has planned to convert a portion
of the US currency on hand to other major currencies in order to reduce the
potential exchange fluctuations.
Capital commitment
As at 30 September 2007, the Group has not committed nor had any plan to
commit for any material investment or capital assets.
Subsequent event
Subsequent to the period under review, the Group announced the acquisition
of a property in Hong Kong and a property in Beijing for office use. The
consideration was and will be financed partly by the internal source of
funding of the Group and partly by mortgage financing from bank.

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Interim Report 2007/2008
C Y Foundation Group Limited
REVIEW AND OUTLOOK (Continued)
Prospects
The Board is highly positive on the growth potential of the new business based
on the market size of China’s online game players and its fast growth rate.
With the huge success of CYET in Wuxi, the Group is planning to roll out more
tournament events in more cities including Zhengzhou, Chengdu, Guangzhou,
Wuhan and Shanghai over the next few months. The Group expects to see a
huge increase in the growth of its player base as the brand expands across
China. The next major tournament will culminate with a 1 million Renminbi final
to be held in Shanghai at the end of April 2008.
Aside from this, The Group plans to work closely with its strategic partner
to utilise its vast resources such as its 75 million membership base and
relationships with over 20,000 internet cafes across China to maximize the
market position of its online tournament platform.
EMPLOYEE INFORMATION

At the end of the underlying period, the Group employed 106 permanent
employees, including 23 employees in Hong Kong and 83 in the PRC. The
Group continued to review the remuneration packages of employees with
reference to the level and composition of pay, general market condition
and individual performance. Staff benefits include contribution to Mandatory
Provident Fund Scheme and discretionary bonus, share option scheme,
medical allowance and hospitalisation scheme and housing allowance.

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Interim Report 2007/2008
C Y Foundation Group Limited
DIRECTORS’ INTERESTS IN SECURITIES
As at 30 September 2007, the interests or short positions of the Directors
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”)) as
recorded in the register required to be kept under section 352 of the SFO, or
otherwise as required to be notified to the Company and the Stock Exchange
pursuant to Divisions 7 and 8 of Part XV of the SFO or the Model Code for
Securities Transactions by Directors of Listed Companies were as follows:
1. Long positions in shares
Number of shares

Personal Corporate
Name Capacity interest interest Shareholding
(%)
Poh Po Lian
(a)
Interest in a controlled corporation – 2,646,264,127 71.76
2. Long positions in underlying shares – warrant
Exercise Number of Percentage
Date of Exercise Amount of price per exercisable to issued
Name issue period warrant share shares shares
(HK$) (HK$) (%)
Poh Po Lian
(a)
2007-01-31 2007-01-31 6,000,000 0.01 600,000,000 16.28

to 2010-01-30

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Interim Report 2007/2008
C Y Foundation Group Limited
DIRECTORS’ INTERESTS IN SECURITIES (Continued)
3. Long positions in underlying shares – convertible note
Amount of Conversion Number of Percentage
Date of Conversion convertible price per convertible to issued
Name issue period note share shares shares
(HK$) (HK$) (%)
Cheng Chee Tock 2007-04-13 2007-04-13 20,000,000 0.01 2,000,000,000 54.24
Theodore
(b)
to 2010-04-12
4. Aggregate long positions in shares and underlying shares
Number of Aggregate Percentage to
Name Number of shares underlying shares in number issued shares
(%)
Cheng Chee Tock – 2,000,000,000 2,000,000,000 54.24
Theodore
(b)
Poh Po Lian
(a)
2,646,264,127 600,000,000 3,246,264,127 88.04
2,646,264,127 2,600,000,000 5,246,264,127

(c)
142.28

5. Notes:
(a) The shares were held by Luck Continent Limited (“Luck Continent”)
which was wholly owned by Dato Poh. Dato Poh was deemed to be
interested in all these shares which are also disclosed in the section
headed “Substantial Shareholders” below.
(b) The underlying shares were held by Super Bonus Management Limited
(“Super Bonus”) which was wholly owned by Mr Cheng. Mr Cheng was
deemed to be interested in all these shares which are also disclosed in
the section headed “Substantial Shareholders” below.
(c) The figure is distorted to above 100% as dilution upon issue of the
underlying shares is not taken into consideration in accordance with the
applicable rules for the disclosure requirement hereof.

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Interim Report 2007/2008
C Y Foundation Group Limited
DIRECTORS’ INTERESTS IN SECURITIES (Continued)
Save as disclosed above, as at 30 September 2007, none of the Directors,
chief executive or their associates had any personal, family, corporate or
other beneficial interests or short positions in the shares, underlying shares or
debentures of the Company or any of its associated corporations (within the
meaning of Part XV of the SFO) as recorded in the register required to be kept
under section 352 of the SFO, or otherwise as required to be notified to the
Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of
the SFO or the Model Code for Securities Transactions by Directors of Listed
Companies.
SUBSTANTIAL SHAREHOLDERS

As at 30 September 2007, the persons/companies, other than a Director or
chief executive of the Company, who had interests or short positions in the
shares and underlying shares in the Company which would fall to be disclosed
to the Company under the provisions of Divisions 2 and 3 of Part XV of the
SFO and as recorded in the register of the Company were as follows:
1. Long positions in shares
Name Capacity Number of shares Shareholding
(%)
Luck Continent
(a)
Beneficial owner 2,646,264,127 71.76
Playtech Software Limited
(“Playtech”)
(b)
Beneficial owner 53,750,000 1.46
2,700,014,127 73.22

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Interim Report 2007/2008
C Y Foundation Group Limited
SUBSTANTIAL SHAREHOLDERS (Continued)
2. Long positions in underlying shares
Number of Percentage
Financial underlying to issued
Name Capacity instrument shares shares
(%)
Luck Continent
(a)
Beneficial owner Warrant 600,000,000 16.28
Super Bonus
(c)
Beneficial owner Convertible note 2,000,000,000 54.24
Copernicus Trading Limited Beneficial owner Convertible note 400,000,000 10.85
(“Copernicus”)
(d)
Emphasis Services Limited Interest in a Convertible note 400,000,000 10.85
(“ESL”)
(d)
controlled corporation
TSLIB Limited (“TSLIB”)
(d)
Interest in a Convertible note 400,000,000 10.85
controlled corporation
Hall Thomas Alexej (“Hall”)
(d)
Interest in a Convertible note 400,000,000 10.85
controlled corporation
Evermore Trading Limited Interest in a Convertible note 400,000,000 10.85
(“Evermore”)
(d)
controlled corporation
Playtech
(d)
Interest in a Convertible note 400,000,000 10.85
controlled corporation

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Interim Report 2007/2008
C Y Foundation Group Limited
SUBSTANTIAL SHAREHOLDERS (Continued)
3. Notes:
(a) Pursuant to the SFO, Dato Poh Po Lian, a Director, was deemed to be
interested in these shares details of which have been disclosed in the
section headed “Directors’ Interest” above.
(b) Playtech was recorded in the underlying register in view of its total
interest upon aggregating its interest in the underlying shares.
(c) Pursuant to the SFO, Mr Cheng Chee Tock Theodore, a Director, was
deemed to be interested in the underlying shares details of which have
been disclosed in the section headed “Directors’ Interest” above.
(d) These refer to the same number of 400,000,000 underlying shares under
a convertible note. These shares were held by Copernicus which was
held as to (a) 31.25% by ESL which was in turn held as to 33.45% by TSLIB
(wholly owned by Hall) and 4.95% by Hall; and (b) 50% by Evermore
which was in turn wholly owned by Playtech. Each underlying share
under the convertible note may be issued at a conversion price of
HK$0.01 with conversion period up to 20 March 2010.
Save as disclosed above, as at 30 September 2007, no other person/
company, other than a Director or chief executive of the Company, had any
personal, family, corporate or other beneficial interests or short positions in the
shares or underlying shares in the Company which would fall to be disclosed
to the Company under the provisions of Divisions 2 and 3 of Part XV of the
SFO and as recorded in the register of the Company.

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Interim Report 2007/2008
C Y Foundation Group Limited
CORPORATE GOVERNANCE

The summary of the major areas of deviations from the Code on Corporate
Governance Practices (“CG Code”) during the underlying period is as follows.
CG Code Deviation
A.2.1 Segregated roles of
chairman and CEO
Before 9 May 2007, the Group did not
maintain a CEO in the Board and the
Chairman assumed the general duties
of a CEO.
On 9 May 2007, a CEO was appointed
to the Board.
A.4.1 Non-executive directors
should be appointed for
a specific term, subject
to re-election
Before 9 May 2007, all Independent
Non-executive Directors (“INED(s)”)
were not appointed for a specific
term but were subject to retirement by
rotation at the annual general meeting
in accordance with the Company’s
Bye-laws.
With effect from 9 May 2007, all INEDs
and Non-executive Directors (“NED(s)”)
shall retire but be eligible for re-election
at every annual general meeting of the
Company.
B.1.1 A remuneration
committee should be
set up with majority
members to be INEDs
During the period from 9 May 2007
until 31 May 2007, the Remuneration
Committee was not composed of a
majority of INEDs due to the resignation
of all former INEDs from the Board and/
or the Remuneration Committee.
On 1 June 2007, 2 new INEDs were
appointed as the new members of the
Remuneration Committee fulfilling the
requirement.
All of the above deviations have been remedied and complied with before
the end of the underlying period as stated above.

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Interim Report 2007/2008
C Y Foundation Group Limited
COMPLIANCE WITH THE MODEL CODE

Throughout the underlying period, the Model Code for Securities Transactions
by Directors of Listed Issuers (“Securities Code”) had been taken as the
Company’s code of conduct regarding Directors’ securities trading. All
Directors have confirmed, following specific enquiry by the Company, that
they fully complied with the Securities Code throughout the underlying period.
REVIEW OF RESULTS

The Group’s unaudited condensed consolidated results for the six months
ended 30 September 2007 have been reviewed by the auditors and the Audit
Committee of the Company.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S
SECURITIES

During the six months ended 30 September 2007, neither the Company nor
any of its subsidiaries purchased, sold or redeemed any of the Company’s
listed securities.
On behalf of the Board
Cheng Chee Tock Theodore
Chairman
Hong Kong, 19 December 2007