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e-Kong Group Limited
(Incorporated in Bermuda with limited liability)
www.e-kong.com
(Stock Code : 524)
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
HIGHLIGHTS

• Turnover increased to HK$398.0 million as compared to HK$330.7 million for the
corresponding period in 2006
• EBITDA was up by HK$10.3 million to HK$38.5 million while net profit was up from
HK$22.8 million to HK$26.6 million
• Cash and bank balances increased by 60.3% to HK$160.9 million
• ZONE US signed an agreement with a major wireless service provider and will offer
MVNO mobile services in the United States by year end
• ZONE Asia established a presence in China and commenced business with Chinese
enterprises in Shenzhen in the reselling of telecommunication products and services
INTERIM RESULTS

The board of directors (the “Board”) of e-Kong Group Limited (the “Company”) herein
announces the unaudited interim results of the Company and its subsidiaries (collectively, the
“Group”) for the six months ended 30 June 2007, together with comparative figures for the
corresponding period in 2006. The results were unaudited but have been reviewed by the
Audit Committee and the auditors of the Company.

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Condensed Consolidated Income Statement
Six months ended 30 June
2007 2006

(Unaudited) (Unaudited)
Notes HK$’000 HK$’000
Turnover 2 397,956 330,709
Cost of sales (294,011) (234,882)
Gross profit 103,945 95,827
Other income 3 19,357 1,228
123,302 97,055

Selling and distribution expenses (29,100) (26,620)
Business promotion and marketing expenses (4,068) (2,760)
Operating and administrative expenses (51,613) (39,411)
Depreciation and amortisation (8,466) (2,688)
Profit from operations 30,055 25,576
Finance costs 4 (1,229) (1,379)
Profit before taxation 4 28,826 24,197
Taxation 5 (2,227) (1,423)
Profit for the period 26,599 22,774
Attributable to:
Equity holders of the Company 26,659 22,774
Minority interests (60) –
26,599 22,774
EBITDA 6 38,521 28,264

HK cents HK cents
Earnings per share 7
Basic 5.3 4.8
Diluted N/A N/A

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Condensed Consolidated Balance Sheet
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
Notes HK$’000 HK$’000
Non-current assets
Property, plant and equipment 15,914 17,117
Intangible assets 8 46,776 51,659
Deferred tax assets 10,866 10,866
73,556 79,642

Current assets
Trade and other receivables 9 104,275 86,630
Pledged bank deposits 2,050 1,547
Cash and bank balances 160,853 100,362
267,178 188,539

Current liabilities
Trade and other payables 10 104,603 99,686
Current portion of bank borrowings 9,513 9,188
Current portion of obligations under
finance leases 202 198
Taxation payable 3,142 3,996
117,460 113,068

Net current assets 149,718 75,471
Total assets less current liabilities 223,274 155,113
Non-current liabilities
Bank borrowings 17,748 22,577
Obligations under finance leases 317 419
NET ASSETS 205,209 132,117

Capital and reserves
Share capital 5,229 4,709
Reserves 198,952 127,408
Equity attributable to equity holders
of the Company 204,181 132,117
Minority interests 1,028 –
TOTAL EQUITY 205,209 132,117

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Notes:
1. Basis of preparation and accounting policies
The condensed consolidated financial statements are unaudited and have been prepared in
accordance with the Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued
by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and applicable disclosure
requirements under the Rules Governing the Listing of Securities on The accounting policies and bases of preparation
adopted in these interim financial statements are consistent with those adopted in the Company’s
2006 Annual Report.
The Group has not early adopted the new and revised standards or interpretations issued by
HKICPA that are not yet effective for the current period. The Group anticipates that the adoption
of these standards or interpretations in the future periods will have no material impact on the
results of the Group.
2. Turnover and segmental information
Analyses of the Group’s turnover and results by geographical and business segments during the
period are as set out below.
(a) By geographical segments:
Six months ended 30 June
2007 2006

North Asia North Asia
America Pacific Eliminations Consolidated America Pacific Consolidated
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Turnover
External sales 349,476 48,480 – 397,956 276,158 54,551 330,709
Inter-segment sales – 664 (664) – –––
349,476 49,144 (664) 397,956 276,158 54,551 330,709
Results
Segment results 11,598 11,655 – 23,253 15,477 13,406 28,883
Finance costs (1,229) (1,379)
Other operating income
and expenses 6,802 (3,307)
Profit before taxation 28,826 24,197
Taxation (2,227) (1,423)
Profit for the period 26,599 22,774
Inter-segment sales are charged at prevailing market prices.

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(b) By business segments:
Six months ended 30 June
2007 2006

Telecom- Telecom-
munication munication
services Other Consolidated services Other Consolidated
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Turnover
External sales 396,177 1,779 397,956 325,772 4,937 330,709
Results
Segment results 23,284 (31) 23,253 28,863 20 28,883
Finance costs (1,229) (1,379)
Other operating income
and expenses 6,802 (3,307)
Profit before taxation 28,826 24,197
Taxation (2,227) (1,423)
Profit for the period 26,599 22,774
3. Other income
Six months ended 30 June
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Interest income on bank deposits 1,955 1,220
Gain on the deemed partial disposal of subsidiary (Note) 17,402 –
Others – 8
19,357 1,228

Note: The gain on the deemed partial disposal of subsidiary arose from the subscription by an
institutional investor for 5% of the share capital of a subsidiary.

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4. Profit before taxation
This is stated after charging:
Six months ended 30 June
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Finance costs
Interest on bank loan and other borrowings (1,218) (1,365)
Finance charges on obligations under finance leases (11) (14)
5. Taxation
Six months ended 30 June
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Current tax
Hong Kong profits tax – –
Overseas income taxes (2,227) (1,138)
(2,227) (1,138)
Deferred tax
Origination and reversal of temporary differences – (285)
(2,227) (1,423)
Overseas taxation represents income taxes provided by certain subsidiaries, calculated at the tax
rates prevailing in the countries in which the subsidiaries operate.
6. EBITDA

EBITDA represents earnings before interest expenses, taxation, depreciation and amortisation.
7. Earnings per share
The calculation of basic earnings per share for the six months ended 30 June 2007 was based on
the consolidated profit attributable to equity holders of the Company of HK$26,659,000 (30
June 2006: HK$22,774,000) and on the weighted average number of 506,518,509 (30 June
2006: 470,894,200) shares in issue during the period.
The diluted earnings per share for the six months ended 30 June 2007 and 2006 have not been
presented as the exercise prices of the share options were higher than the average market price
of the shares.

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8. Intangible assets
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
HK$’000 HK$’000
Development costs 3,547 3,137
Customer contracts 52,933 52,933
56,480 56,070

Less: amortisation (9,704) (4,411)
46,776 51,659

Development costs represent the costs incurred for the development of new IP-based
communication products and services.
Customer contracts represent intangible assets purchased pursuant to an asset purchase agreement
with a third party to acquire certain telecommunication service assets in connection with the
provision of long distance telecommunication services in the United States. The costs were
capitalised and are being amortised under the straight-line method over 5 years.
9. Trade and other receivables
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
HK$’000 HK$’000
Trade receivables 93,785 76,119
Other receivables
Deposits, prepayments and other debtors 10,490 10,511
104,275 86,630

The Group’s credit terms on sales mainly range from 30 to 90 days. Included in trade and other
receivables are trade debtors (net of provision for bad and doubtful debts) with the following
ageing analysis:
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
HK$’000 HK$’000
Current 86,737 68,042
1 to 3 months 6,836 7,858
More than 3 months but less than 12 months 212 219
93,785 76,119

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10. Trade and other payables
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
HK$’000 HK$’000
Trade payables 39,727 44,924
Other payables
Accrued charges and other creditors 64,876 54,762
104,603 99,686

Included in trade and other payables are trade creditors with the following ageing analysis:
As at As at
30 June 31 December
2007 2006

(Unaudited) (Audited)
HK$’000 HK$’000
Current 34,095 26,733
1 to 3 months 5,538 17,992
More than 3 months but less than 12 months 94 199
39,727 44,924

11. Comparative figures
Certain comparative figures have been reclassified to conform to the current period presentation.

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INTERIM DIVIDEND

The Board does not recommend the payment of a dividend for the six months ended 30 June
2007 (30 June 2006: Nil).
BUSINESS REVIEW AND OUTLOOK

During the period under review, the Group continued to achieve an increase in turnover while
maintaining profitable results. Turnover of the Group amounted to HK$398.0 million, up
20.3% from HK$330.7 million for the previous corresponding period. ZONE telecommunication
operations in the United States remained the key contributor towards the Group’s revenue
growth for this period. The Group’s net profit increased by 16.8% from HK$22.8 million for
the corresponding period in 2006 to HK$26.6 million. EBITDA increased 36.3% to HK$38.5
million when compared to HK$28.3 million for the corresponding period in the previous year.
The Group further strengthened its balance sheet position with total net assets of HK$205.2
million, representing an increase of 55.3% over the prior year, while cash and bank balances
increased by 60.3% to HK$160.9 million.
ZONE operations in the United States (“ZONE US”) achieved turnover of HK$349.5 million
during the first six months of 2007 which represented an increase of HK$73.3 million over the
same period of 2006. This increased turnover was based primarily on growth in sales to the
wholesale segment of ZONE US’s customer base which comprises one-third of independent
local exchange carriers (“ILECs”) located throughout the United States and other carrier
customers. This segment of revenue increased from about one-third of the total revenue of
ZONE US for the previous corresponding period and now accounts for more than half of total
revenue for the period under review. Over the course of the first half of 2007, ZONE US has
taken steps to improve efficiencies in its existing facilities, and to add suites of new products
and services for its different categories of customers. Increased utilisation of the Company’s
switch facilities and the implementation of advanced routing capabilities have helped to improve
margins on telecom traffic. The use of Voice-over-Internet Protocol (“VoIP”) technologies has
presented ZONE US with a multitude of new routing options, including sending IP wholesale
traffic to and from its associates in Asia and business partners globally.
ZONE US has reached an agreement with a major nationwide US wireless network provider
which will enable the Group to penetrate into the domestic US mobile market as a Mobile
Virtual Network Operator (MVNO) before the end of 2007. ZONE will, as an initial stage,
offer cellular services to its ILEC customers which will in turn render mobile voice and data
services to their end user customers under the ILEC’s own brand name. This additional range
of services has been received by ZONE’s ILEC customers with enthusiasm, as it provides
them with a seamless way to add a mobile product to their existing fixed line offerings. It is
expected to further solidify the relationships between participating ILECs and ZONE US.
Turnover from ZONE’s operations in Asia (“ZONE Asia”) decreased by HK$2.9 million to
HK$46.7 million as compared to HK$49.6 million for the previous period. Profit from ZONE
Asia’s operations for the period under review was HK$11.7 million compared to HK$13.4
million for the previous period. These reductions in revenue and profit in Asia are mainly due
to a lower contribution from ZONE operations in Hong Kong where the telecommunication
sector remains highly competitive with major fixed line operators still aggressively pricing
their services in order to gain market share.

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ZONE Hong Kong operations continue to move forward with its strategic plan to expand into
China. After establishing a wholly foreign-owned enterprise (WFOE) named
"! in March 2007 and having set up its operating office in Shenzhen, ZONE has
successfully concluded business management and consultancy arrangements in August with
two local Chinese enterprises, both of which are reselling telecommunication products and
services to business customers in the Shenzhen area for the major telecom operators in China.
Under the arrangements, ZONE utilises its key operational staff and management systems
from its Hong Kong office to work with these enterprises in order to develop their
telecommunication-related businesses and receive the economic benefits thereof while
maintaining effective control over the business and operations of the local Chinese enterprises.
ZONE Singapore maintained its intense marketing drive to grow its customer base, with
particular focus on acquiring high value corporate customers. It continues to introduce
innovative product packaging and value-added services to differentiate itself from its
competitors. This strategy has contributed to favourable results in terms of both revenue and
earnings during the first six months as compared to the same period last year. With its
deployment of VoIP technologies, ZONE Singapore is now also providing telecom services to
an increasing number of customers around the region as well as expanding into IP wholesale
voice traffic business, thus broadening its revenue and customer base. ZONE Singapore will
continue to deploy new technologies to improve efficient use of network resources. Lower
operating costs and healthier margins are expected with the use of the new IP-based
technologies.
ZONE Asia’s global VoIP offering “ZoiPPE” (www.zoippe.com) continues to focus on increasing
its user base through viral marketing and co-branding/white-labelling alliances and partnerships.
To facilitate its reach into other larger markets, besides English and Chinese (both traditional
and simplified) languages, the ZoiPPE softphone interface is also available in Japanese and it
is in the pipeline to add other languages including Thai, Korean and Hindi. Upgrades and
other enhancements are being incorporated into the communication service platform to improve
the system robustness as well as to introduce new features and increase the mix of product
offerings.
In February 2007, the Group successfully completed a placement of 52 million shares of the
Company, generating net proceeds of approximately HK$45.4 million and recording share
premium of HK$44.9 million. At the same time, the Group raised additional capital of US$2.5
million (approximately HK$19.5 million) from an institutional investor for development of
the ZoiPPE business, realising a gain of HK$17.4 million.
During the first six months, in addition to the business development initiatives in the Shenzhen
area, the Group has been actively exploring various opportunities to penetrate, by way of
acquisition or otherwise, into the telecommunication-related sector in China.
During the period under review, the Group delivered on its objectives to continue to grow
both revenue and profit, to establish a business presence in China and to enhance the technology
robustness and scalability of the ZoiPPE platform and intensify its promotion drive globally.

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Looking ahead to the second half of 2007, the Group anticipates that steady revenue growth
will be maintained, ZONE’s operations in China will begin to contribute to the Group’s
turnover and the ZoiPPE user base will be further increased following the introduction of new
features and improvements in system robustness while the Group will strive to create new
revenue stream opportunities. The Group is excited about entering the domestic US mobile
market as an MVNO this period and is confident of the growth potential for this latest service
offering.
FINANCIAL REVIEW

Results
During the period under review, the Group’s turnover recorded significant growth and reached
HK$398.0 million, representing an increase of 20.3% when compared to HK$330.7 million
for the corresponding period in 2006.
The gross profit for this period increased by 8.5% to HK$103.9 million, compared to HK$95.8
million for the corresponding period in the previous year.
The Group’s EBITDA for the period under review reached HK$38.5 million, representing an
increase of 36.3% from HK$28.3 million for the same period last year.
The operating profit for the period amounted to HK$30.1 million, representing an increase of
17.5% when compared to HK$25.6 million for the first six months of 2006.
Consolidated net profit attributable to equity holders of the Company increased by 17.1% to
HK$26.7 million when compared to HK$22.8 million for the previous corresponding period.
Interim Dividend
The Board does not recommend the payment of a dividend for the six months ended 30 June
2007 (30 June 2006: Nil).
Capital Structure, Liquidity and Financing
The Group’s liquidity position was further strengthened by the continuing growth of the
ZONE business around the world, as well as the private placement of shares of the Company
and the allotment of 5% shareholding interest in a subsidiary in February 2007. The net assets
of the Group improved to HK$205.2 million as at 30 June 2007 (31 December 2006: HK$132.1
million).
With an enhanced capital structure and operating cash flow, cash and bank balances (excluding
pledged bank deposits) amounted to HK$160.9 million as at 30 June 2007 (31 December
2006: HK$100.4 million). The Group had pledged bank deposits amounting to HK$2.1 million
as at 30 June 2007 (31 December 2006: HK$1.5 million) to banks for guarantees made by
them to certain telecommunication carriers for payments due by the Group.

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As at 30 June 2007, the Group’s bank borrowings, represented by the bank loan advanced to a
subsidiary for the purpose of the WRLD Alliance transaction, reduced to HK$27.3 million (31
December 2006: HK$31.8 million) as a result of partial repayment of principal during the
period. The Group’s bank borrowings are in United States dollars at a fixed interest rate and
secured through, among others, a pledge of the trade receivables of the subsidiary.
As at 30 June 2007, the Group’s liabilities under equipment lease financing amounted to
HK$0.5 million (31 December 2006: HK$0.6 million).
The Group’s gearing ratio, measured on the basis of total borrowings as a percentage of net
assets, improved to 13.5% (31 December 2006: 24.5%) mainly due to the enhanced capital
structure and profits for the period.
Foreign Exchange Exposure
Since most of the Group’s assets and liabilities, revenue and payments are denominated in
Hong Kong and United States dollars, the Group considers there is no significant exposure to
foreign exchange fluctuations so long as the Hong Kong-United States dollar exchange rate
remains pegged. As cash contributions from the Singapore operations continue to grow, the
Group will closely monitor the Singapore-United States dollar exchange rate and, whenever
appropriate, take any necessary action to reduce such exchange risks.
Contingent Liabilities and Commitments
As at 30 June 2007, there were no material contingent liabilities and commitments.
EMPLOYEE REMUNERATION POLICIES

As at 30 June 2007, the Group employed, altogether, 146 employees (31 December 2006: 145
employees) in Hong Kong and overseas. The Group’s total staff costs for the six months
ended 30 June 2007 amounted to HK$40.2 million (30 June 2006: HK$34.9 million).
The Group’s remuneration policies are formulated on the basis of the performance and
experience of individual employees and are in line with local market practices where the
Group operates. The Group has established incentive bonus schemes to motivate and reward
employees at all levels to achieve its objectives. In addition to salary and bonus payments, the
Group also offers other fringe benefits, including provident fund and medical benefits, to its
employees.
CORPORATE GOVERNANCE

The Company is committed to maintaining high standards of corporate governance. Except for
a deviation described below, no director of the Company is aware of any information which
would reasonably indicate that the Company is not, or was not, at any time during the six
months ended 30 June 2007, acting in compliance with the Code on Corporate Governance
Practices (“CG Code”) as set out in Appendix 14 to the Listing Rules.

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CG Code A.2.1 stipulates that the roles of chairman and chief executive officer should be
separate and should not be performed by the same individual. Nevertheless, Mr. Richard John
Siemens, the Chairman of the Company, assumed the role of the chief executive officer of the
Company following the passing away of Mr. Kuldeep Saran, the then Deputy Chairman and
Managing Director, on 16 June 2007. The Board anticipates that the role of the chief executive
officer by Mr. Siemens is only an interim measure.
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed
Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules as its own securities
code. All directors have confirmed, following specific enquiries by the Company, that they
have fully complied with the required standards set out in the Model Code throughout the six
months ended 30 June 2007.
AUDIT COMMITTEE

The Audit Committee has reviewed, with the management and the auditors of the Company,
the accounting principles and practices adopted by the Group and discussed auditing, internal
control and financial reporting matters, including a review of the unaudited consolidated
financial statements of the Company for the six months ended 30 June 2007. The review
conducted by the auditors of the Company were in accordance with Hong Kong Standard on
Review Engagements 2410, “Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public
Accountants.
CHANGE OF AUDITORS

The Company announced on 5 June 2007 that Messrs. Moores Rowland Mazars resigned as
auditors of the Group following the reorganisation of the firm and Mazars CPA Limited was
appointed as auditors of the Group on 1 June 2007.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
During the period, neither the Company nor any of its subsidiaries purchased, sold or redeemed
any of the Company’s listed securities.
PUBLICATION OF THE INTERIM RESULTS ANNOUNCEMENT

This interim results announcement is published on the website of Hong Kong Exchanges and
Clearing Limited at www.hkex.com.hk under “Latest Listed Companies Information” and on
the website of the Company at www.e-kong.com under “Investors’ Information/
Announcements”.

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APPRECIATION

The Board wishes to express its sincere appreciation to Mr. Kuldeep Saran, the Deputy Chairman
and Managing Director of the Company who passed away on 16 June 2007, for his invaluable
leadership and contribution to the Group in the past.
The Board would also like to thank the customers, shareholders, business associates and
professional advisers for their support and extend its appreciation to all employees for their
hard work, dedication and commitment to the Group during the period.
By Order of the Board
Richard John Siemens
Chairman
Hong Kong, 18 September 2007
As at the date of this announcement, the Board of the Company comprised of Executive
Directors, Richard John Siemens and Lim Shyang Guey; Non-executive Director, William
Bruce Hicks and Independent Non-executive Directors, Shane Frederick Weir, John William
Crawford and Gerald Clive Dobby.