1
C Y FOUNDATION GROUP LIMITED

(Incorporated in Bermuda with limited liability)
(Stock code #1182)
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
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 3 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 4 (13,013) (5,854)
Finance costs 5 (1,158) (327)
Excess of net assets value over the consideration
arising from acquisition of subsidiaries 1,336 –
Loss before income tax (12,835) (6,181)
Income tax 6 – –
Loss from continuing operations (12,835) (6,181)
Discontinued operation
Loss from discontinued operation – (14,830)
Loss for the period (12,835) (21,011)
Loss attributable to:
Equity holders of the Company (12,605) (21,011)
Minority interest (230) –
(12,835) (21,011)
Loss per share 7
Basic
– Continuing operations (0.37) cent (7.07) cents
– Discontinued operation – (16.96) cents
Diluted N/A N/A

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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 4,942 730
Loan receivables 17,098 –
Licenses 27,036 –
49,076 730

Current assets
Inventories 1,530 17,206
Trade and other receivables 8 28,465 15,231
Pledged bank deposits – 497
Bank fiduciary deposit 557,200 328,276
Cash and cash equivalents 197,128 460,573
784,323 821,783
LIABILITIES

Current liabilities
Trade and other payables 9 54,773 745,830
Current portion of obligations
under 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
Non-current liabilities
Obligations under finance lease 948 –
Convertible note 18,891 3,016
Provision for long service payments 959 959
20,798 3,975
NET ASSETS 757,472 47,328

3
As at As at
30 September 31 March
2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
CAPITAL AND RESERVES

Share capital 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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NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
1. 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 unaudited condensed consolidated interim financial statements should be read in conjunction
with the annual financial statements for the year ended 31 March 2007.
2. PRINCIPAL ACCOUNTING POLICIES

The unaudited condensed consolidated interim financial statements have been prepared under
the historical cost convention.
Except for the accounting policies of consolidation and intangible assets, 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 Trading
Company Limited (“Beijing Horizon”) and its subsidiaries 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.
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.

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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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3. 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 99
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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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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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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4. 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 operations
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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5. 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 847 –
1,158 327

Discontinued operation – –
6. 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,
jq"!5P (“j ”), 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 forj5P for the six months ended 30 September 2007 asj
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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7. 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 – (1,661,011)
Effect of issue of new shares 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
(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.

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8. 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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9. 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
DIVIDEND

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

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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 attributable to shareholders 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.
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.

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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.
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.
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.

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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.
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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• 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.
• 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.
• 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.
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
A.4.1 Non-executive directors should
be appointed for a specific
term, subject to re-election
B.1.1 A remuneration committee
should be set up with majority
members to be INEDs
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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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
As at the date hereof, the Executive Directors of the Company are Mr. Cheng Chee Tock
Theodore (Chairman), Dato Poh Po Lian, and Mr. Sam Woelm; Non-executive Directors are
Mr. Wu Chuang John and Mr. Cao Dongxin; and the Independent Non-executive Directors are
Mr. Sze Tsai Ping Michael, Dr. Chow Steven, and Mr. Wang Shan Chuan.