Interim Report 2007-2008 Daisho Microline Holdings Limited
FINANCIAL HIGHLIGHTS

RESULTS 6 months ended 30 September
2007 2006 %Change
Revenue(HK$’000) 335,913 458,944 –27%
Profitattributabletoequityholders(HK$’000) 73,631 97,687 –25%
Grossprofitratio (%) 38 47 –9%
Basicearningspershare (HK cents) 15.32 20.52 –25%
Interimdividendpershare(HK cents) 4.0 4.0 –
FINANCIAL POSITION 30 September 31March
2007 2007 %Change
Netassets(HK$’000) 442,624 373,588 +18%
Gearingratio(times) 0.12 0.20 –40%
Currentratio (times) 1.66 1.54 +8%

Daisho Microline Holdings Limited Interim Report 2007-2008
UNAUDITED INTERIM REPORT

TheBoardofDirectors(the“Board”)ofDaishoMicrolineHoldingsLimited(the“Company”)ispleasedtopresentthe
unaudited interim report of the Company and its subsidiaries (the “Group”) for the 6 months ended 30 September
2007asfollows:
CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)
6 months ended 30 September
2007 2006

Notes HK$’000 HK$’000
REVENUE 3 335,913 458,944

Costofsales (209,338 ) (241,506)

Grossprofit 126,575 217,438
Otherincomeandgains 5,254 2,237
Sellinganddistributioncosts (25,359 ) (81,963)
Administrativeexpenses (19,656 ) (19,576)
Otherexpenses (89 ) (755)
Financecosts 4 (2,128 ) (2,899)

PROFITBEFORETAX 4 84,597 114,482

Tax 5 (10,966 ) (16,795)

PROFITFORTHEPERIOD 73,631 97,687

AttributabletoequityholdersoftheCompany 73,631 97,687

INTERIMDIVIDEND 6 19,225 19,225

EARNINGSPERSHARE
ATTRIBUTABLETOORDINARY
EQUITYHOLDERSOFTHECOMPANY 7

–Basic HK15.32 cents HK20.52cents

–Diluted HK15.27 cents HK20.33cents

Interim Report 2007-2008 Daisho Microline Holdings Limited
CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited) (Audited)
30 September 31March
2007 2007

Notes HK$’000 HK$’000
NON-CURRENTASSETS

Property,plantandequipment 8 321,947 316,886
Prepaidlandleasepayments 4,197 4,171
Depositspaidforacquisitionofitemsof
property,plantandequipment 8,073 4,007

Totalnon-currentassets 334,217 325,064

CURRENTASSETS

Inventories 54,496 40,569
Tradedebtors 9 114,389 85,078
Available-for-saleinvestment 10 63,052 15,625
Sundrydebtors,prepayments&deposits 14,545 11,440
Cashandcashequivalents 11 70,760 85,562

Totalcurrentassets 317,242 238,274

CURRENTLIABILITIES

Tradecreditors 12 99,879 62,344
Othercreditorsandaccruals 31,245 35,322
Interest-bearingbankandotherborrowings 13 36,869 41,293
Taxpayable 22,832 16,105

Totalcurrentliabilities 190,825 155,064

NETCURRENTASSETS 126,417 83,210

TOTALASSETSLESSCURRENTLIABILITIES 460,634 408,274
NON-CURRENTLIABILITIES

Interest-bearingbankandotherborrowings 13 17,810 34,486
Deferredtaxliabilities 200 200

Totalnon-currentliabilities 18,010 34,686

Netassets 442,624 373,588

EQUITY

Equity attributable to equity holders of the Company
Issuedsharecapital 48,061 48,061
Reserves 394,563 311,109
Proposedfinaldividend – 14,418

Totalequity 442,624 373,588

Daisho Microline Holdings Limited Interim Report 2007-2008
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)
6 months ended 30 September 2007
Issued Share Exchange Proposed
share premium Contributed equalisation Retained final Total
capital account surplus reserve profits dividend equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At1April2007 48,061 92,031 9,379 9,820 199,879 14,418 373,588
Exchangerealignmentandtotalincome
andexpensefortheperiodrecognised
directlyinequity – – – 9,823 – – 9,823
Profitfortheperiod – – – – 73,631 – 73,631
Paymentoffinaldividendfor2006/07 – – – – – (14,418) (14,418)

At 30 September 2007 48,061 92,031 9,379 19,643 273,510 – 442,624

(Unaudited)
6monthsended30September2006
Issued Share Exchange Proposed
share premium Contributed equalisation Retained final Total
capital account surplus reserve profits dividend equity
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At1April2006 47,176 90,613 9,379 (15,155) 91,076 14,252 237,341
Exchangerealignmentandtotalincome
andexpensefortheperiodrecognised
directlyinequity – – – 10,684 – – 10,684
Profitfortheperiod – – – – 97,687 – 97,687
Issueofordinarysharesfromexerciseof
shareoptions 885 1,417 – – – – 2,302
Paymentoffinaldividendfor2005/06 – – – – (166) (14,252) (14,418)

At30September2006 48,061 92,030 9,379 (4,471) 188,597 – 333,596

These reserve accounts comprise the consolidated reserves of HK$394,563,000 (31 March 2007: HK$311,109,000) in the
consolidatedbalancesheet.

Interim Report 2007-2008 Daisho Microline Holdings Limited
CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
CASHFLOWSFROMOPERATINGACTIVITIES

Profitbeforetax 84,597 114,482
Netadjustmentsfornon-cashflowitems 17,978 40,968

Operatingprofitbeforeworkingcapitalchanges 102,575 155,450
Netincreaseinworkingcapital (9,741 ) (76,163)

Cashgeneratedfromoperations 92,834 79,287
Netinterestpayment (380 ) (2,033)
Nettaxpayment (4,240 ) (6,788)

Netcashinflowfromoperatingactivities 88,214 70,466
CASHFLOWSFROMINVESTINGACTIVITIES

Netcashoutflowfrominvestingactivities (68,781 ) (50,912)
CASHFLOWSFROMFINANCINGACTIVITIES

Netcashoutflowfromfinancingactivities (35,518 ) (30,921)

NETDECREASEINCASHANDCASHEQUIVALENTS (16,085 ) (11,367)
Cashandcashequivalentsatbeginningoftheperiod 85,562 53,355
Effectofforeignexchangeratechanges,net 1,283 427

CASHANDCASHEQUIVALENTSATENDOFTHEPERIOD 70,760 42,415

ANALYSISOFBALANCESOFCASHANDCASHEQUIVALENTS

Cashandbankbalances 61,608 22,921
Non-pledgedtimedepositswithoriginalmaturityof
lessthanthreemonthswhenacquired 9,152 19,494

Cashandcashequivalents 70,760 42,415

Daisho Microline Holdings Limited Interim Report 2007-2008
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION AND CHANGES IN ACCOUNTING POLICIES

ThisinterimreporthasbeenpreparedinaccordancewithHongKongAccountingStandard(“HKAS”)34“Interim
FinancialReporting”issuedbytheHongKongInstituteofCertifiedPublicAccountantsandAppendix16ofthe
RulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(“ListingRules”).
Except for the changes mentioned below, the accounting policies and methods of computation used in the
preparation of this interim report are the same as those adopted in preparing the annual audited financial
statementsfortheyearended31March2007.
Change in accounting policies
TheGrouphaschangedcertainofitsaccountingpoliciesfollowingitsadoptionofthefollowingnew/revised
HongKongFinancialReportingStandards(“HKFRSs”),HKASsandInterpretations(hereinaftercollectivelyreferred
toasthe“newHKFRSs”)whichareeffectiveforaccountingperiodsbeginningonorafter1April2007.
HKAS1Amendment CapitalDisclosure
HKFRS7 FinancialInstruments:Disclosures
HK(IFRIC)–Int8 ScopeofHKFRS2
HK(IFRIC)–Int9 ReassessmentofEmbeddedDerivatives
HK(IFRIC)–Int10 InterimFinancialReportingandImpairment
HK(IFRIC)–Int11 HKFRS2–GroupandTreasuryShareTransactions
TheapplicationofthesenewHKFRSsdidnothaveanymaterialimpactontheresultsorthefinancialpositionof
theGroupforthecurrentorprioraccountingperiod.Accordingly,nopriorperiodadjustmentsarerequired.
Change in estimated useful life of machinery and equipment
Priorto31March2007,theestimatedusefullifeoftheGroup’smachineryandequipmentwas5years.After
reviewingthedepreciationpolicyofcomparablecompaniesandtheexpecteddurationduringwhichtheGroup’s
machineryandequipmentcanbeutilized,theBoardisoftheopinionthattheestimatedusefullifeoftheGroup’s
machineryandequipmentshouldbechangedfrom5yearsto10yearswitheffectfrom1April2007inorderto
reflecttherealperformanceoftheGroupandhelpprovideaclearfinancialcomparisonwithothercomparable
companies.Thisconstitutesachangeinaccountingestimateandwillbeappliedprospectively.IftheGroupadopts
5yearsastheestimatedusefullifeofitsmachineryandequipment,thedepreciationchargeforthecurrentperiod
andthecurrentfinancialyearwillincreasebyaboutHK$23millionandHK$43millionrespectively.

Interim Report 2007-2008 Daisho Microline Holdings Limited
2. IMPACT OF ISSUED BUT NOT YET EFFECTIVE HONG KONG FINANCIAL
REPORTING STANDARDS

TheGrouphasnotappliedthefollowingnewandrevisedHKFRSs,thathavebeenissuedbutnotyeteffective,
inthisinterimreport.
HKAS23(Revised) BorrowingCosts
1
HKFRS8 OperatingSegments
1
HK(IFRIC)–Int12 ServiceConcessionArrangements
2
HK(IFRIC)–Int13 CustomerLoyaltyProgrammes
3
HK(IFRIC)–Int14 HKAS19–TheLimitonaDefinedBenefitAsset,MinimumFundingRequirements
andtheirInteraction
2
1
Effectiveforannualperiodsbeginningonorafter1January2009
2
Effectiveforannualperiodsbeginningonorafter1January2008
3
Effectiveforannualperiodsbeginningonorafter1July2008
TheGroupanticipatesthattheapplicationsoftheseneworrevisedstandard,amendmentandinterpretations
wouldnothavesignificantimpactontheresultandfinancialpositionoftheGroup.
3. REVENUE AND SEGMENT INFORMATION

TheprincipalactivitiesoftheGrouparethemanufactureandtradingofprintedcircuitboards.Therewasno
changeinthenatureoftheGroup’sprincipalactivitiesduringthecurrentperiod.
Revenue represents the net invoiced value of goods sold, after allowances for goods returns and trade
discounts.
(a) Business segment
TheGrouphasonlyonebusinesssegment,whichisthemanufactureandtradingofprintedcircuitboards.
Therefore,nobusinesssegmentanalysisispresented.
(b) Geographical segments
In presenting information by geographical segment, segment revenue is based on the location of the
customers.
(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
Segmentrevenue:
Salestoexternalcustomers
MainlandChina 172,091 196,008
Europe 61,252 169,407
Japan 36,236 26,705
HongKong 34,666 31,940
Others 31,668 34,884

335,913 458,944

Daisho Microline Holdings Limited Interim Report 2007-2008
4. PROFIT BEFORE TAX

Profitbeforetaxisarrivedataftercreditingand(charging):
(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
(a) Finance costs:
Intereston:
Bankloansandotherloanswhollyrepayable
withinfiveyears (240 ) (645)
Financeleasesandhirepurchasecontracts (1,888 ) (2,254)

(2,128 ) (2,899)

(b) Other items:
Depreciation (17,615 ) (34,058)
Amortizationoflandleasepayments (63 ) (59)
Staffcosts(includingdirectors’remuneration) (23,990 ) (21,077)
Bankinterestincome 1,827 724

Asmentionedinnote1underthesub-paragraphof“Changeinestimatedusefullifeofmachinery
andequipment”,theGrouphaschangedtheestimatedusefullifeofitsmachineryandequipment
from5yearsinthepastto10yearswitheffectfrom1April2007.IftheGroupadopts5yearsas
theestimatedusefullifeofitsmachineryandequipment,thedepreciationchargeforthecurrent
periodwillincreasebyaboutHK$23million.
5. TAX

Hong Kong profits tax has been provided at the rate of 17.5% on the estimated assessable profits arising in
HongKongforthecurrentperiod.Taxesonprofitsassessableelsewherehavebeencalculatedattheratesof
taxprevailinginthejurisdictionsinwhichtheGroupoperates,basedonexistinglegislation,interpretationsand
practicesinrespectthereof.
Deferredtaxhasbeenprovidedontemporarydifferencesusingthecurrentapplicablerate.
(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
Group:
Current–HongKong
Chargefortheperiod 3,757 6,450
Current–Elsewhere
Chargefortheperiod 7,209 8,575
Deferred – 1,770

Totaltaxchargefortheperiod 10,966 16,795

Interim Report 2007-2008 Daisho Microline Holdings Limited
6. INTERIM DIVIDEND

(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
ProposedinterimdividendofHK4.0cents
(2006:HK4.0cents)perordinaryshare 19,225 19,225

AttheBoardmeetingheldon11December2007,theBoardhasresolvedtodeclareaninterimdividendofHK4.0
centsperordinarysharefortheyearending31March2008.Thisproposedinterimdividendisnotreflectedas
adividendpayableinthecondensedconsolidatedfinancialstatementsforthe6monthsended30September
2007,butwillbereflectedasanappropriationofretainedprofitsfortheyearending31March2008.
Theamountoftheproposedinterimdividendisbasedon480,613,785sharesinissueat11December2007.
7. EARNINGS PER SHARE

(a) Basic earnings per share
Thecalculationofbasicearningspershareisbasedontheprofitfortheperiodattributabletoordinary
equity holders of the Company of HK$73,631,000 (2006: HK$97,687,000) and the weighted average
numberof480,613,785(2006:476,103,402)ordinarysharesinissueduringtheperiod.
(b) Diluted earnings per share
Thecalculationofdilutedearningspershareisbasedontheprofitfortheperiodattributabletoordinary
equity holders of the Company of HK$73,631,000 (2006: HK$97,687,000) and the weighted average
numberof482,081,630(2006:480,616,527)ordinarysharesafteradjustingfortheeffectsofalldilutive
potentialordinaryshares.
(c) Reconciliation
(Unaudited)
6 months ended 30 September
2007 2006

Number of Numberof
shares shares
Weightedaveragenumberofordinarysharesused
incalculatingbasicearningspershare 480,613,785 476,103,402
Deemedissueofordinarysharesfornoconsideration
arisingfromshareoptions 1,467,845 4,513,125

Weightedaveragenumberofordinarysharesused
incalculatingdilutedearningspershare 482,081,630 480,616,527

0
Daisho Microline Holdings Limited Interim Report 2007-2008
8. PROPERTY, PLANT AND EQUIPMENT

(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
Purchaseofproperty,plantandequipment 16,047 108,327

9. TRADE DEBTORS

TheGrouphasapolicywhichallowsanaveragecreditperiodof60daystoitscustomers.Anagedanalysisof
thetradedebtorsasattheperiodend,basedonthepaymentduedateandnetofprovisions,isasfollows:
(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Currentto1month 112,804 83,897
1to2months 595 423
2to3months 147 35
Over3months 843 723

114,389 85,078

10. AVAILABLE-FOR-SALE INVESTMENT

(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Structureddeposits 41,324 15,625
Corporatebonds 7,401 –
Equitylinkednotes 14,327 –

63,052 15,625

Interim Report 2007-2008 Daisho Microline Holdings Limited
11. CASH AND CASH EQUIVALENTS

(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Cashandbankbalances 61,608 33,708
Timedeposits 9,152 51,854

Cashandcashequivalentsinthe
condensedconsolidatedcashflowstatement 70,760 85,562

12. TRADE CREDITORS

Anagedanalysisofthetradecreditorsasattheperiodend,basedonthepaymentduedate,isasfollows:
(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Currentto1month 91,963 56,481
1to2months 3,556 4,611
2to3months 3,028 666
Over3months 1,332 586

99,879 62,344

13. INTEREST-BEARING BANK AND OTHER BORROWINGS

(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Currentliabilities
Bankloans–unsecured 4,722 5,000
Financeleaseandhirepurchasecontractpayables 32,147 36,293

36,869 41,293

Non-currentliabilities
Bankloans–unsecured 1,111 3,333
Financeleaseandhirepurchasecontractpayables 16,699 31,153

17,810 34,486

Total 54,679 75,779

Daisho Microline Holdings Limited Interim Report 2007-2008
14. CAPITAL COMMITMENTS

TheGrouphadthefollowingcapitalcommitmentsasattheperiodend:
(Unaudited) (Audited)
30 September 31March
2007 2007

HK$’000 HK$’000
Capitalcommitments,
Contractedbutnotprovidedfor,inrespectofacquisition
ofitemsofproperty,plantandequipment 23,947 4,688

15. SHARE OPTION SCHEME

TheCompanyoperatesashareoptionschemeforthepurposeofencouragingtheeligibleparticipantstoperform
theirbestinachievingthegoalsoftheCompanyandatthesametimeallowstheeligibleparticipantstoenjoy
the results of the Company attained through their effort and contribution. Eligible participants of the share
optionschemeincludeanyfull-timeemployees,directorsorprofessionaladvisersoftheCompanyoranyofits
subsidiariesorassociatedcompanies.Theshareoptionschemebecameeffectiveon28August2003and,unless
otherwisecancelledoramended,willremaininforcefor10yearsfromthatdate.
TheshareoptionspreviouslygrantedbytheCompanywerevestedatthedateofgrantandwillbesettledby
shares.
Asat30September2007,1,650,000shareoptionswhichweregrantedon15June2004remainedunexercised.
Theseshareoptionsareexercisableduringtheperiodfrom15June2004to14June2009atanexerciseprice
ofHK$0.20pershare.Iftheseoutstandingshareoptionsarefullyexercised,theyshallrepresentapproximately
0.34%oftheexistingissuedsharecapitaloftheCompany.
ThemovementoftheshareoptionsundertheSchemeduringtheperiodisasfollows:
Number of share options Price of Company’s Shares

Exercise
At Granted Exercised At Date of price At
Name or category 1 April during during 30 September grant of share Exercise period of share grant date
of participant 2007 the period the period 2007 options of share options options of options
HK$ HK$
Director:
HirotoSasaki 1,650,000 – – 1,650,000 15-6-04 15-6-04to14-6-09 0.20 0.192

Notes
Theexercisepriceoftheshareoptionsissubjecttoadjustmentinthecaseofrightsorbonusissues,or
othersimilarchangesintheCompany’ssharecapital.
ThepriceoftheCompany’ssharesdisclosedasatthedateofthegrantoftheshareoptionsistheStock
Exchangeclosingpriceonthedateofgrantoftheoptions.

Interim Report 2007-2008 Daisho Microline Holdings Limited
16. RELATED PARTY TRANSACTIONS

(a) TheGrouphadthefollowingtransactionswithrelatedpartiesduringtheperiod:
(Unaudited)
6 months ended 30 September
2007 2006

Notes HK$’000 HK$’000
Saleofprintedcircuitboardstoarelatedparty (i) 36,236 26,705
Technicalsupportfeespaidtoarelatedparty (ii) – 794

Notes:
(i) PrintedcircuitboardsweresoldtoasubsidiaryofDaishoDenshiCo.,Ltd.,asubstantialshareholder
oftheCompanywhohassignificantinfluenceovertheGroup,andtheproductssoldwereunique
andtailor-madetothecustomer'srequirementsandspecifications.Thesellingpricesoftheprinted
circuit boards were determined based on the complexity of the specifications and were agreed
betweentherespectiveparties.
(ii) TechnicalsupportfeeswerepaidtoDaishoDenshiCo.,Ltd.fortheprovisionoftechnicalsupport
servicesfortheGroup'smanufacturingofprintedcircuitboards.Thetechnicalsupportfeeswere
determinedonbasesagreedbetweentherespectiveparties.
(b) CompensationofkeymanagementpersonneloftheGroup:
(Unaudited)
6 months ended 30 September
2007 2006

HK$’000 HK$’000
Shorttermemployeebenefits 2,949 2,728
Post-employmentbenefits 129 119

Totalcompensationpaidtokeymanagementpersonnel 3,078 2,847

Daisho Microline Holdings Limited Interim Report 2007-2008
MANAGEMENT DISCUSSION AND ANALYSIS

Business Review
TheGroup’srevenueforthecurrentperiodfellshortofthatinthelastcorrespondingperiodby27%mainlyduetothe
gradualshiftinthetechnologicalrequirementofHDIPCBformobilephonetowardsamoreadvancelevelbysomeofthe
Group’sworld-renownedtelecommunicationproductcustomerssincethesecondhalfoflastfinancialyearasmentioned
inthelastAnnualReportoftheCompany.AlthoughtheGroupisnowcapableofproducingthemoreadvancelevel
ofHDIPCB,theformalapprovaloftheGroupinthesupplyofsuchHDIPCBtothesecustomersisexpecteduntilafter
theendofthecurrentfinancialyear.
Inspiteofthechallengementionedabove,theGroup’srevenueforthecurrentperiodincreasedby15%ascompared
tothesecondhalfoflastfinancialyearbecausetheGrouphasdevelopedsomepotentialoriginaldesignmanufacturers
ofmobilephoneintheMainlandChinaconsumingHDIPCBwithrequirementsnolessinferiortothoserequiredby
theGroup’sexistingworld-renownedtelecommunicationproductcustomersduringthecurrentperiodandtheresult
isencouraging.ThesalesvalueofPCBfromtheoriginaldesignmanufacturersofmobilephoneintheMainlandChina
asaproportionoftheGroup’srevenueincreasedfromabout6%inthesecondhalfoflastfinancialyeartoabout20%
inthecurrentperiod.
The Group’s PCB average selling price for the current period decreased by about 10% as compared to the last
correspondingperiodandthiswasconsistentwiththedropinthepercentageoftheGroup’ssellinganddistribution
costsonrevenuefromabout18%inlastcorrespondingperiodtoabout8%incurrentperiod.Becausetheinitialcost
forestablishingbusinessrelationshipwithnewcustomersisalwayshigh,theGroupusuallybuildsinsuchcostinthePCB
sellingpricefornewmodelsbypractice.ThisaccountsforthehighpercentageoftheGroup’ssellinganddistribution
costsonrevenueinlastcorrespondingperiod.Oncethecostrequiredtomaintainthebusinessrelationshipdiminishes,
theGroupwillconsiderreducingthePCBsellingpriceandsharethebenefitwiththecustomers.Thisaccountsforthe
dropintheGroup’sPCBaveragesellingpricealongwiththesellinganddistributioncostsincurrentperiod.
TheGroup’sgrossprofitmargindecreasedfromabout47%inlastcorrespondingperiodtoabout38%inthecurrent
period. Apart from the decrease in the Group’s PCB average selling price as mentioned above, the increase in the
Group’s average purchase price of certain major raw material items such as laminate and precious metal during the
currentperiodbyabout20%ascomparedtothelastcorrespondingperioderodedthegrossprofitmarginduringthe
currentperiod.
Financial Review
The Group’s gearing ratio (defined as the ratio of interest-bearing bank and other borrowings to total equity) at 30
September 2007 and 31 March 2007 was 0.12 times and 0.20 times respectively while the Group’s current ratio at
30September2007and31March2007was1.66timesand1.54timesrespectively.Thesefinancialratiosimproved
substantiallybecausetheGroup’sPCBoperationsgeneratednetcashinflowofaboutHK$88millionduringthecurrent
period.
Asat30September2007,theGroup’sinterest-bearingbankandotherborrowingsamountingtoHK$54,679,000(31
March2007:HK$75,779,000)outofwhichHK$36,869,000(31March2007:HK$41,293,000)wererepayablewithinthe
next12months.TheseborrowingswerealldenominatedinHongKongdollars(“HK$”),originallyrepayablemonthly
over3yearsandsubjectedtofloatinginterestratesforabout94%(31March2007:91%)ofthem.TheGrouphasnot
adoptedanyinterestratehedgingtoolfortheseborrowings.CertainmachineryandequipmentoftheGroupwitha
netbookvalueat30September2007ofHK$106,324,000(31March2007:HK$109,420,000)werepledgedtosecured
theseborrowings.
Asat30September2007,theGroup’sassetsandliabilitiesweremostlydenominatedineitherHK$,US$orRenminbi
(“RMB”).BecausetheexchangerateforUS$againstHK$isrelativelystableinHongKongforthemoment,theGroup
hasnotadoptedanyhedgingtoolagainstitsassetsorliabilitiesdenominatedinUS$.AlsobecausetheGroup’ssubsidiary

Interim Report 2007-2008 Daisho Microline Holdings Limited
inMainlandChinahasnetassetsasat30September2007andRMBisexpectedtoappreciategradually,thereisonly
aremotepossibilitythattheGroupwillsufferexchangelossonthetranslationofthesenetassetsandsotheGroup
hasnotadoptedanyhedgingtoolagainstthesenetassetsdenominatedinRMB.However,theGrouphasmadeuseof
foreignexchangeforwardcontractsduringthecurrentperiodtohedgeagainstallitsoperatingexpensestobepaidin
RMBinlightoftheexpectedappreciationofRMB.
Employee Benefits
As at 30 September 2007, the Group had 1,733 (31 March 2007: 1,505) employees, including directors, working
mainlyinMainlandChina.Fortheperiodended30September2007,theGroup’stotalstaffcostsincludingdirectors’
remunerationwereHK$23,990,000(2006:HK$21,077,000).
AccordingtotheGroup’sstaffremunerationpolicy,theremunerationofanemployeeandtheCompany’sdirectoris
determinedbytheBoardandtheCompany’sRemunerationCommitteerespectivelyfromtimetotimewithreferenceto
hisperformanceandduties,theperformanceandprofitabilityofhisemployerandtheprevailingmarketconditions.
Outlook
ItisgenerallyexpectedthattheChinesegovernmentwillsoonissuethethirdgeneration(“3G”)telecommunicationlicences
totheserviceoperatorsbeforetheOlympicGamesinBeijinginAugust2008.Theprovisionof3Gtelecommunication
servicesintheMainlandChinawillboostthehugedemandfor3Gmobilephonesthereandwillstimulatethedemand
forhighdensityinterconnect(“HDI”)PCBindirectly.Besidestheexistingworld-renownedtelecommunicationproducts
customers,theGrouphasbeguntodevelopbusinesswiththeoriginaldesignmanufacturersformobilephoneinthe
MainlandChinaandtheresultisencouraging.TheGroupwilldefinitelybenefitfromtheforthcominghugedemand
for3GmobilephonesintheMainlandChina.
Furthermore,theproductapplicationsofHDIPCBarenotmerelyrestrictedtomobilephone.TheGrouphassucceeded
indealingwithafamousJapanesedigitalcameramanufacturerwhocommencestoplacesalesordersforHDIPCBwith
theGroupfromDecember2007onwardsandthefuturemonthlysalesorderscomingfromthiscustomerisexpected
toreachseveralmillionsofHongKongdollars.TheGroupisnegotiatingwithotherpotentialnon-telecommunication
productcustomerssoastobroadenitscustomerbase.
Although the year ahead looks promising, the Board is well aware of the following challenging factors that could
adverselyaffecttheGroup.
It is noteworthy that the Group’s purchase prices of copper and precious metal have once reached their historically
highlevelduring2007andtheyareexpectedtoremainathighlevelforawhile.However,theGroupistryingvarious
meanssuchasincreaseinPCBsellingpriceandincreaseinproductioncapacityutilizationrateetc.soastocounteract
theimpactofthehighrawmaterialcost.
Althoughsomerecentsignificanteconomiceventssuchassub-primemortgagecrisisintheUnitedStatesofAmerica
andtheupsurgeinglobalpetroleumpricemaynotincreasetheoperatingcostsoftheGrouptoagreatextent,they
mayhinderthegrowthoftheworldeconomyandthebusinessoftheGroupmaybeadverselyaffectedaccordingly.
Inspiteoftheaboveconcern,theBoardisoptimisticabouttheresultsoftheGroupforthecurrentfinancialyearbarring
anyunforeseencircumstances.
INTERIM DIVIDEND

TheBoardhasresolvedtodeclareaninterimdividendofHK4.0centsperordinarysharefortheyearending31March
2008 (2007: HK4.0 cents). The interim dividend will be paid on 30 January 2008 to shareholders whose names are
registeredintheregisterofmembersoftheCompanyon16January2008.

Daisho Microline Holdings Limited Interim Report 2007-2008
CLOSURE OF REGISTER OF MEMBERS

Theregisterofmemberswillbeclosedfrom14January2008to16January2008,bothdaysinclusiveduringwhichperiod
notransferofshareswillberegistered.Inordertoqualifyfortheinterimdividend,allcompletedtransferdocuments
accompaniedbytherelevantsharecertificatesmustbelodgedwiththeCompany’sHongKongshareregistrars,Tricor
TengisLimitedat26thFloor,TesburyCentre,28Queen’sRoadEast,HongKongnotlaterthan4:00p.m.on11January
2008.
CORPORATE GOVERNANCE

Intheopinionofthedirectors,theCompanyhascompliedwiththeapplicablecodeprovisionsoftheCodeonCorporate
Governance Practices as set out in Appendix 14 of the Listing Rules throughout the 6 months ended 30 September
2007,exceptforthefollowingdeviations:
Chairman and Chief Executive Officer
AccordingtotheCodeProvisionA.2.1,therolesofchairmanandchiefexecutiveofficer(“CEO”)shouldbeseparate
andshouldnotbeperformedbythesameindividual.ThedivisionofresponsibilitiesbetweenthechairmanandCEO
shouldbeclearlyestablishedandsetoutinwriting.
TheCompanydoesnothaveaseparateChairmanandCEO,andMr.ChanSikMing,Harrycurrentlyholdsbothpositions.
TheBoardbelievesthatvestingtherolesofbothChairmanandCEOinthesamepersonensuresconsistentleadership
withintheGroupandenablesmoreeffectiveandefficientplanningoflong-termstrategiesandimplementationofbusiness
plans.TheBoardbelievesthatthebalanceofpowerandauthoritywillnotbeimpairedandisadequatelyensuredby
an effective Board which comprises experienced and high calibre individuals with a sufficient number thereof being
independentnon-executivedirectors.
Non-executive directors
Under the Code Provision A.4.1, non-executive directors should be appointed for a specific term subject to
re-election.
Theindependentnon-executivedirectorsoftheCompanydonothaveaspecifictermofappointment,butaresubject
toretirementbyrotationandre-electioninaccordancewiththerelevantprovisionsoftheCompany’sbye-laws.
Re-election of directors
Under the Code Provision A.4.2, every director, including those appointed for a specific term, should be subject to
retirementbyrotationatleastonceeverythreeyears.
TheCompanyissubjecttoaprivateactknownas“TheJukoLaboratoriesHoldingsLimitedCompanyAct1990”whichis
anActoftheCompany’sformernameofJukoLaboratoriesHoldingsLimitedwhenitwasfirstestablished.TheChairman
oftheCompanyisnotrequiredtobesubjecttorotationinaccordancewiththeBye-LawsoftheCompany.However,
inthespiritofgoodcorporategovernancepractice,theexistingChairmanoftheCompanyhasagreedtoretireona
voluntarybasisatleastonceeverythreeyearsattheannualgeneralmeetingoftheCompany.

Interim Report 2007-2008 Daisho Microline Holdings Limited
DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING
SHARES

At 30 September 2007, the interests and short positions of the directors in the shares and underlying shares of the
Companyoritsassociatedcorporations(withinthemeaningofPartXVoftheSecuritiesandFuturesOrdinance(the
“SFO”)),asrecordedintheregisterrequiredtobekeptbytheCompanypursuanttoSection352oftheSFO,oras
otherwisenotifiedtotheCompanyandTheStockExchangeofHongKongLimited(the“StockExchange”)pursuantto
the“ModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuers”,wereasfollows:
Long positions in ordinary shares of the Company:
Percentage of the
Directly Beneficiary Company’s issued
Name of director beneficially owned of a trust Total share capital
ChanSikMing,Harry 39,680,000 103,621,417 143,301,417 29.82
Au-YeungWaiHung 4,200,000 N/A 4,200,000 0.87
HirotoSasaki 2,950,000 N/A 2,950,000 0.61
ChanSikMing,Harryandhisfamilyaretheobjectsofadiscretionarytrust,whichhasappointedEarnwellLimited
as its trustee. At 30 September 2007, Earnwell Limited held 103,621,417 shares representing approximately
21.56%oftheissuedsharecapitaloftheCompany.
Long positions in underlying shares of the Company:
Percentage of
the Company’s
existing issued
share capital
Name of director Number of share options
#
if fully exercised
HirotoSasaki 1,650,000 0.34
#
TheseshareoptionsweregrantedbytheCompanyon15June2004andareexercisableduringtheperiodfrom
15June2004to14June2009atanexercisepriceofHK$0.20pershare.
DetailsoftheoptionsarestatedunderNote15ofthisInterimReport.
Saveasdisclosedabove,noneofthedirectorshadregisteredaninterestorshortpositioninthesharesandunderlying
sharesoftheCompanyoranyofitsassociatedcorporationsthatwasrequiredtoberecordedunderSection352of
theSFO,orasotherwisenotifiedtotheCompanyandtheStockExchangepursuanttothe“ModelCodeforSecurities
TransactionsbyDirectorsofListedIssuers”.
SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS IN SHARES
AND UNDERLYING SHARES

At30September2007,thefollowinginterestsof5%ormoreoftheissuedsharecapitaloftheCompanywererecorded
intheregisterofinterestsrequiredtobekeptbytheCompanypursuanttoSection336oftheSFO:
Long positions:
Percentage of the
Capacity and Number of ordinary Company’s issued
Name nature of interest shares held share capital
EarnwellLimited Trustee 103,621,417 21.56
DaishoDenshiCo.,Ltd. Directlybeneficiallyowned 50,000,000 10.40

Daisho Microline Holdings Limited Interim Report 2007-2008
Saveasdisclosedabove,noperson,otherthanthedirectorsoftheCompany,whoseinterestsaresetoutinthesection
“Directors’ interests and short positions in shares and underlying shares” above, had registered an interest or short
position in the shares and underlying shares of the Company that was required to be recorded pursuant to Section
336oftheSFO.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
Duringthecurrentperiod,therewasnopurchase,saleorredemptionbytheCompanyoranyofitssubsidiariesofthe
Company’slistedsecurities.
AUDIT COMMITTEE

The Audit Committee of the Company comprises the three independent non-executive directors of the Company. It
wasestablishedincompliancewiththeListingRulesforthepurposesofreviewingandprovidingsupervisionoverthe
Group’sfinancialreportingprocessandinternalcontrols.
TheAuditCommitteeoftheCompanyhasreviewedwithmanagementtheaccountingprinciplesandpracticesadopted
bytheGroup,anddiscussedinternalcontrolsandfinancialreportingmattersincludingareviewoftheunauditedinterim
reportforthe6monthsended30September2007.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED
ISSUERS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in
Appendix10oftheListingRules(the“ModelCode”)asitscodeofconductregardingdirectors’securitiestransactions.
TheCompanyhasmadespecificenquiriesofalldirectorsandalldirectorshaveconfirmedthattheyhavecompliedwith
therequiredstandardsetoutintheModelCodeduringthe6monthsended30September2007.
ByOrderoftheBoard
Chan Sik Ming, Harry
Chairman
HongKong,11December2007
AsatthedateofthisInterimReport,theBoardcomprisesthefollowingmembers:
Executivedirectors: Independentnon-executivedirectors:
CHANSikMing,Harry (Chairman & CEO) KohuKASHIWAGI
MotofumiTSUMURA CHANYukTong
HirotoSASAKI LIChiKwong
HiroyukiKIKUCHI
AU-YEUNGWaiHung