EASYKNIT INTERNATIONAL HOLDINGS LIMITED
7
(Stock Code Vk: 1218)
2007

Interim Report
{h9
EASYKNIT INTERNATIONAL HOLDINGS LIMITED

7
(Stock Code Vk: 1218)
2007

Interim Report
{h9

Easyknit International Holdings Limited 1
The board of directors of Easyknit International Holdings Limited (the “Company”) is
pleased to present the unaudited condensed consolidated financial statements of the
Company and its subsidiaries (collectively the “Group”) for the six months ended 30
September 2007 together with comparative figures. These interim financial statements
have been reviewed by the Company’s audit committee.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007

Six months ended
30 September
NOTES 2007 2006

HK$’000 HK$’000
(Unaudited) (Unaudited)
Turnover 3 282,563 257,628
Cost of sales (230,025) (209,199)
Gross profit 52,538 48,429
Other income 13,835 5,991
Distribution and selling expenses (6,363) (6,961)
Administrative expenses (21,559) (24,230)
Gain on fair value changes of
investments held for trading 22,365 174
Gain arising on change in fair value of
investment properties 27,848 5,600
Impairment loss on available-for-
sale investments (19,450) (14,147)
Loss on disposal of available-for-
sale investments (6,182) (15,134)
Share of results of associates (4,652) (1,640)
Finance costs 4 — (30)
Profit (loss) before taxation 5 58,380 (1,948)
Taxation credit (charge) 6 2,107 (163)
Profit (loss) for the period attributable to
equity holders of the Company 60,487 (2,111)
Basic earnings (loss) per share 7 HK cents 7.6 HK cents (1.1)

Easyknit International Holdings Limited2
CONDENSED CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2007

30 September 31 March
NOTES 2007 2007

HK$’000 HK$’000
(Unaudited) (Audited)
Non-current assets
Property, plant and equipment 9 16,907 17,938
Properties held for re-development 10 — 156,283
Investment properties 11 541,600 606,170
Intangible asset 921 921
Interests in associates 57,001 60,590
Available-for-sale investments 98,676 84,830
Loans receivable 4,600 5,125
719,705 931,857

Current assets
Properties held for re-development 10 176,882 —
Properties held for sale 3,644 7,228
Investments held for trading 85,048 41,566
Inventories 2,284 9,866
Trade and other receivables 12 18,864 49,278
Loans receivable 7,550 43,255
Bills receivable 13 47,765 46,661
Bank balances and cash 550,108 343,353
892,145 541,207

Current liabilities
Trade and other payables 14 53,580 46,903
Bills payable 13 4,473 4,648
Tax payable 27,093 24,102
85,146 75,653

Net current assets 806,999 465,554
1,526,704 1,397,411

Capital and reserves
Share capital 15 7,942 7,942
Reserves 1,495,643 1,361,236
1,503,585 1,369,178

Non-current liabilities
Deferred taxation 16 23,119 28,233
1,526,704 1,397,411

Easyknit International Holdings Limited 3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007

Attributable to equity holders of the Company (unaudited)
Investment Property Share
Share Share Capital Translation Special Contributed revaluation revaluation option Accumulated
capital premium reserve reserve reserve surplus reserve reserve reserve profits Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 April 2007 7,942 218,330 196,565 2,565 9,800 220,937 (28,190) 2,521 — 738,708 1,369,178
Change in fair value of available
-for-sale investments — — ————47,61———47,61
Exchange difference on translation of
foreign operations — — — (236) — — ————(236)
Share of translation reserve
of associates — — — 1,063 — — ————1,063
Net income recognised
directly in equity — — — 827 — — 47,461 — — — 48,288
Released on disposal of available-
for-sale investments — — ————6,182 — — — 6,182
Impairment loss on available-
for-sale investments — — ————19,450———19,450
Profit for the period — — ———————60,48760,487
Total recognised income
and expense for the period — — — 827 — — 73,093 — — 60,487 134,407
At 30 September 2007 7,942 218,330 196,565 3,392 9,800 220,937 44,903 2,521 — 799,195 1,503,585
At 1 April 2006 132,367 4,412 — 737 9,800 220,937 (191,630 ) — 1,900 852,405 1,030,928
Change in fair value of available-
for-sale investments — — ————(5,6)———(5,666)
Share of translation reserve
of associates — — — 796 — — ————796
Net income (expense) recognised
directly in equity — — — 796 — — (5,666 ) — — — (4,870)
Released on disposal of available-
for-sale investments — — ————15,34———15,34
Impairment loss on available-
for-sale investments — — ————14,7———14,7
Los for the priod —————————(2,111) (2,111)
Total recognised income
and expense for the period — — — 796 — — 23,615 — — (2,111) 22,300
Rights issue of shares at a price of
HK$0.12 per rights share (see
note 15 (b) 6,18413,27————————79,421
Share issue expenses — (502) ————————(502)
6,18412,735————————78,91
At 30 September 2006 198,551 17,147 — 1,533 9,800 220,937 (168,015 ) — 1,900 850,294 1,132,147

Easyknit International Holdings Limited4
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 from operating activities 68,764 52,492
Net cash from (used in) investing activities
Proceeds on disposal of investment properties 92,418 —
Proceeds on disposal of
available-for-sale investments 33,615 —
Acquisition of properties held for re-development — (155,503)
Acquisition of available-for-sale investments — (13,090)
Other investing activities 11,958 3,925
137,991 (164,668)
Net cash from financing activities
Proceeds from rights issue of shares — 78,919
Other financing activities — (3,207)
— 75,712
Net increase (decrease) in cash and
cash equivalents 206,755 (36,464)
Cash and cash equivalents at
beginning of the period 343,353 174,580
Cash and cash equivalents at end of the period,
represented by bank balances and cash 550,108 138,116

Easyknit International Holdings Limited 5
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
1. GENERAL AND BASIS OF PREPARATION

The condensed consolidated financial statements have been prepared in accordance with the
applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of
Securities on
2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared on the historical cost
basis except for certain properties and financial instruments, which are measured at fair
values, as appropriate.
The accounting policies used in the condensed consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual financial statements
for the year ended 31 March 2007.
In the current interim period, the Group has applied, for the first time, the following new
standard, amendment and interpretations (“new HKFRSs”) issued by the HKICPA which are
effective for the Group’s financial period beginning 1 April 2007.
HKAS 1 (Amendment) Capital disclosures
1
HKFRS 7 Financial instruments: Disclosures
1
HK(IFRIC) - INT 8 Scope of HKFRS 2
2
HK(IFRIC) - INT 9 Reassessment of embedded derivatives
3
HK(IFRIC) - INT 10 Interim financial reporting and impairment
4
HK(IFRIC) - INT 11 HKFRS 2 - Group and treasury share transactions
5
1
Effective for annual periods beginning on or after 1 January 2007.
2
Effective for annual periods beginning on or after 1 May 2006.
3
Effective for annual periods beginning on or after 1 June 2006.
4
Effective for annual periods beginning on or after 1 November 2006.
5
Effective for annual periods beginning on or after 1 March 2007.
The adoption of these new HKFRSs had no material effect on the results or financial position
of the Group for the current or prior accounting periods. Accordingly, no prior period
adjustment has been recognised.
The Group has not early applied the new standards or interpretations that have been issued
but are not yet effective. The directors of the Company anticipate that the application of these
standards or interpretations will have no material impact on the results or financial position of
the Group.

Easyknit International Holdings Limited6
3. SEGMENT INFORMATION

Business segments
For management purposes, the Group is currently organised into five main operating divisions
- garment sourcing and exporting, property investments, property development, investment in
securities and loan financing. These divisions are the bases on which the Group reports its
segment information.
For the six months ended 30 September 2007
Garment Investment
sourcing Property Property in Loan
and exporting investments development securities financing Eliminations Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Turnover
External 264,719 13,964 3,880 — — — 282,563
Inter-segment — 1,329 — — — (1,329) —
264,719 15,293 3,880 — — (1,329) 282,563
Result
Segment result 15,283 41,353 46 (1,044) 1,848 (1,516) 55,970
Unallocated corporate income 8,315
Unallocated corporate expenses (1,253)
Share of results of associates (4,652)
Profit before taxation 58,380
Taxation credit 2,107
Profit for the period 60,487
Note: Inter-segment sales are charged at prevailing market prices.

Easyknit International Holdings Limited 7
3. SEGMENT INFORMATION (Cont’d)
For the six months ended 30 September 2006
Garment Investment
sourcing Property Property in Loan
and exporting investments development securities financing Eliminations Consolidated
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Turnover
External 240,695 12,780 4,153 — — — 257,628
Inter-segment — 1,655 — — — (1,655) —
240,695 14,435 4,153 — — (1,655) 257,628
Result
Segment result 9,437 18,488 119 (28,388 ) 1,489 (1,516) (371)
Unallocated corporate income 3,345
Unallocated corporate expenses (3,252)
Share of results of associates (1,640)
Finance costs (30)
Loss before taxation (1,948)
Taxation charge (163)
Loss for the period (2,111)
Note: Inter-segment sales are charged at prevailing market prices.

Easyknit International Holdings Limited8
4. FINANCE COSTS

Six months ended
30 September
2007 2006

HK$’000 HK$’000
Interest on borrowings wholly repayable within five years — 30
5. PROFIT (LOSS) BEFORE TAXATION
Six months ended
30 September
2007 2006

HK$’000 HK$’000
Profit (loss) before taxation has been arrived at after
charging:
Depreciation of property, plant and equipment 578 762
and after crediting:
Dividend income from listed investments 2,224 719
Interest income 9,282 4,921
6. TAXATION

Six months ended
30 September
2007 2006

HK$’000 HK$’000
The (credit) charge comprises:
Hong Kong Profits Tax
Current period 2,991 —
Underprovision in prior periods 16 —
3,007 —
Deferred tax (credit) charge (note 16) (5,114) 163
Tax (credit) charge attributable to the Company
and its subsidiaries (2,107) 163
Hong Kong Profits Tax is calculated at 17.5% (six months ended 30 September 2006: 17.5%)
of the estimated assessable profit for the period.
No provision for Hong Kong Profits Tax had been made in the condensed consolidated
financial statements for the previous period as the estimated assessable profit for that period
was wholly absorbed by tax losses brought forward.

Easyknit International Holdings Limited 9
7. BASIC EARNINGS (LOSS) PER SHARE
The calculation of the basic earnings (loss) per share is based on the following data:
Six months ended
30 September
2007 2006

HK$’000 HK$’000
Earnings (loss) for the purposes of calculating
basic earnings (loss) per share 60,487 (2,111)
Six months ended
30 September
2007 2006

Number of shares
Number of shares/weighted average number
of shares for the purposes of calculating basic
earnings (loss) per share 794,204,028 192,138,497
No diluted earnings per share for the six months ended 30 September 2007 is presented as
the Company has no potential ordinary shares outstanding during the period.
No diluted loss per share for the six months ended 30 September 2006 is presented as the
exercise price of the Company’s outstanding share options was higher than the average
market price for that period.
8. DIVIDEND

The directors do not recommend the payment of an interim dividend for both periods.
9. PROPERTY, PLANT AND EQUIPMENT

During the period, the Group spent HK$123,000 (six months ended 30 September 2006:
HK$1,715,000) on acquisition of property, plant and equipment. In addition, the Group
disposed of certain property, plant and equipment with a carrying amount of HK$576,000 for
a consideration of HK$576,000 and no gain or loss resulted in this disposal.
10. PROPERTIES HELD FOR RE–DEVELOPMENT
As at 31 March 2007, due to the uncertainty on the timing of the successful acquisition of the
remaining units of the building (the “Remaining Properties”) for re-development purpose
within the Group’s normal operating cycle, properties held for re-development were not
included as the Group’s current assets in the condensed consolidated balance sheet.
During the six months ended 30 September 2007, the Group completed the acquisition of the
Remaining Properties at a total consideration of HK$12,880,000 and the re-development
project has been commenced. Properties held for re-development at 30 September 2007 were
therefore included in current assets in the condensed consolidated balance sheet as it is
expected that the properties may be realised in the Group’s normal operating cycle for
properties re-development, which is expected to be more than twelve months after the
balance sheet date.

Easyknit International Holdings Limited10
11. INVESTMENT PROPERTIES

During the period, the Group disposed of an investment property with a carrying value of
HK$92,800,000 (six months ended 30 September 2006: nil).
The Group’s investment properties are held for rental purposes under operating leases. They
were valued by Knight Frank Petty Limited, a firm of independent professional valuers, on
market value basis at 30 September 2007. The gain arising on change in fair value of the
investment properties of HK$27,848,000 has been recognised in the condensed consolidated
income statement for the six months ended 30 September 2007 (six months ended 30
September 2006: HK$5,600,000).
12. TRADE AND OTHER RECEIVABLES

30 September 31 March
2007 2007

HK$’000 HK$’000
Trade receivables 13,684 19,050
Deposits to suppliers 1,304 25,100
Other receivables 3,876 5,128
18,864 49,278

The Group allows an average credit period ranging from 30 to 90 days to its trade customers.
The aged analysis of trade receivables at the balance sheet date is as follows:
30 September 31 March
2007 2007

HK$’000 HK$’000
0 - 60 days 13,228 17,919
61 - 90 days 267 533
Over 90 days 189 598
13,684 19,050

13. BILLS RECEIVABLE/BILLS PAYABLE
The bills receivable and bills payable of the Group are aged within 90 days.

Easyknit International Holdings Limited 11
14. TRADE AND OTHER PAYABLES

The aged analysis of trade payables at the balance sheet date is as follows:
30 September 31 March
2007 2007

HK$’000 HK$’000
0 - 60 days 23,035 28,927
61 - 90 days 17 2
Over 90 days 243 155
23,295 29,084
15. SHARE CAPITAL

Nominal
value Number
Notes per share of shares Amount
HK$ HK$’000
Authorised:
At 1 April 2006 0.10 10,000,000,000 1,000,000
Consolidation of shares (a) (9,000,000,000 ) —
Subdivision of shares (a) 99,000,000,000 —
At 31 March 2007, 1 April 2007
and 30 September 2007 0.01 100,000,000,000 1,000,000
Issued and fully paid:
At 1 April 2006 0.10 1,323,673,386 132,367
Rights issue of shares at a price
of HK$0.12 per rights share (b) 0.10 661,836,693 66,184
Consolidation of shares (a) (1,786,959,072 ) —
Subdivision of shares and reduction
of share capital (a) — (196,565 )
Rights issue of shares at a price
of HK$0.35 per rights share (c) 0.01 595,653,021 5,956
At 31 March 2007, 1 April 2007
and 30 September 2007 0.01 794,204,028 7,942

Easyknit International Holdings Limited12
15. SHARE CAPITAL (Cont’d)
Notes:
(a) As announced by the Company on 30 August 2006, the Company proposed to effect (i)
a share consolidation (the “Share Consolidation”) pursuant to which every ten issued
and unissued then existing shares of HK$0.10 each were consolidated into one
consolidated share of HK$1.00 each (“Consolidated Share”); (ii) reduction of par value
of each Consolidated Share from HK$1.00 each to HK$0.01 each by cancelling HK$0.99
paid up share capital for each Consolidated Share in issue, subdivision of each unissued
Consolidated Share with par value of HK$1.00 each into 100 new shares with par value
of HK$0.01 each and transfer of credit arising therefrom with the amount of
approximately HK$196,565,000 to the capital reserve account (the “Capital Reduction”,
together with the Share Consolidation, collectively referred to the “Capital
Reorganisation”). Details of the Capital Reorganisation are set out, inter alia, in the
circular of the Company dated 22 September 2006. A special resolution approving the
Capital Reorganisation was passed at the special general meeting of the Company held
on 16 October 2006. The Capital Reorganisation became effective on 17 October 2006.
(b) 661,836,693 rights shares of HK$0.10 each were allotted on 24 April 2006 at a
subscription price of HK$0.12 per rights share to the shareholders of the Company in
the proportion of one rights share for every two existing shares then held. The Company
raised HK$78,919,000 (net of directly attributable expenses of HK$502,000), which was
used as partial payment for acquisition of the building, including the Remaining
Properties, for re–development purpose (see note 10). All shares issued rank pari passu
with the then existing shares in issue in all respects.
(c) 595,653,021 rights shares of HK$0.01 each were allotted on 3 November 2006 at a
subscription price of HK$0.35 per rights share to the shareholders of the Company in
the proportion of three rights shares for every existing share then held. The Company
raised HK$207,139,000 (net of directly attributable expenses of HK$1,339,000), which
shall be used to expand the Group’s property portfolio and for general working capital
purpose. All shares issued rank pari passu with the then existing shares in issue in all
respects.

Easyknit International Holdings Limited 13
16. DEFERRED TAXATION

Major deferred tax liabilities and assets recognised and movements thereon are as follows:
Accelerated
tax Investment Tax
depreciation properties losses Total
HK$’000 HK$’000 HK$’000 HK$’000
At 1 April 2006 390 43,883 (21,795 ) 22,478
Charge (credit) to the condensed
consolidated income statement 99 874 (810 ) 163
At 30 September 2006 489 44,757 (22,605 ) 22,641
(Credit) charge to the condensed
consolidated income statement (165 ) 940 4,817 5,592
At 31 March 2007 and 1 April 2007 324 45,697 (17,788 ) 28,233
(Credit) charge to the condensed
consolidated income statement (166 ) (10,768) 5,820 (5,114)
At 30 September 2007 158 34,929 (11,968 ) 23,119
For the purposes of balance sheet presentation, the above deferred tax liabilities and assets
have been offset.
At 30 September 2007, the Group has unused tax losses of HK$180,489,000 (31 March 2007:
HK$212,028,000) available for offset against future profits. A deferred tax asset has been
recognised in respect of HK$68,388,000 (31 March 2007: HK$101,646,000) of such losses. No
deferred tax asset has been recognised in respect of the remaining tax losses of
HK$112,101,000 (31 March 2007: HK$110,382,000) due to the unpredictability of future
profits streams. The unrecognised tax losses may be carried forward indefinitely except for
losses of HK$45,153,000 (31 March 2007: HK$45,153,000) which will expire as follows:
30 September 31 March
2007 2007

HK$’000 HK$’000
Year of expiry:
2022 1,821 1,821
2023 2,163 2,163
2024 11,225 11,225
2025 13,272 13,272
2026 7,650 7,650
2027 9,022 9,022
45,153 45,153

Easyknit International Holdings Limited14
17. RELATED PARTY TRANSACTIONS/CONNECTED TRANSACTIONS
(a) During the period, the Group had the following transactions with persons deemed to be
“connected persons” by the Stock Exchange, being entities controlled by certain
relatives of Ms. Lui Yuk Chu, a director of the Company:
Six months ended
30 September
2007 2006

HK$’000 HK$’000
Commission income 54 —
Rental income 315 286
Purchases of garments — 25,310
At the balance sheet date, amounts due from these entities comprise:
30 September 31 March
2007 2007

HK$’000 HK$’000
Trade and other receivables 54 —
(b) During the six months ended 30 September 2007, the Group provided administrative
services to Easyknit Enterprises Holdings Limited (“Easyknit Enterprises”), a company in
which Ms. Lui Yuk Chu, a director of the Company, has beneficial interests, and received
service income of HK$120,000 from Easyknit Enterprises (six months ended 30
September 2006: HK$120,000). Easyknit Enterprises is an associate of the Group, whose
shares are also listed on the Stock Exchange.
In addition, the Group also disposed of a motor vehicle amounting to HK$576,000 (six
months ended 30 September 2006: nil) to a subsidiary of Easyknit Enterprises.
(c) Compensation of key management personnel
The remuneration of directors and other members of key management during the period
amounted to HK$2,784,000 (six months ended 30 September 2006: HK$2,199,000).
18. POST BALANCE SHEET EVENTS

The following significant events took place subsequent to 30 September 2007:
(a) As announced by the Company on 10 October 2007, the Group had during the period
from 13 July 2007 to 8 October 2007 acquired from the market an aggregate of
572,000 shares in China Mobile Limited, which were classified as investments held for
trading, for a total consideration of HK$67,514,700, of which 372,000 shares in China
Mobile Limited were acquired during the period from 1 October 2007 to 8 October
2007 for a total consideration of HK$49,272,200. In addition, on 8 October 2007 the
Group acquired 212,000 shares in Hong Kong Exchanges and Clearing Limited, which
were classified as available–for–sale investments, for a total consideration of
HK$53,746,400.

Easyknit International Holdings Limited 15
18. POST BALANCE SHEET EVENTS (Cont’d)
(b) As announced by the Company on 31 October 2007, the Group planned to bid up to
HK$1,200,000,000, being the maximum price which the Company was willing to
consider to pay, at a public auction to be held on 30 November 2007 for a property, Tai
Sang Commercial Building at Nos. 24-34 Hennessy Road, Wan Chai, Hong Kong, by the
order of the court on an “as-is” basis (the “Possible Acquisition”). Details of the
Possible Acquisition are set out in the circular of the Company dated 15 November
2007. The Possible Acquisition was approved by the shareholders at the special general
meeting held on 30 November 2007. However, the bid was not successful.
(c) As announced by the Company on 14 November 2007, the Group had on 9 November
2007 disposed of through the market certain investments held for trading comprising
1,000,000 shares in Petrochina Company Limited for gross sale proceeds of
HK$15,960,000. The gain on fair value change of the investments held for trading from
1 October 2007 to the date of disposal amounted to HK$1,240,000.
(d) As announced by Easyknit Enterprises, the Group’s associate, on 6 December 2007,
Easyknit Enterprises proposed to raise approximately HK$102.1 million before expenses
by way of rights issue of 1,963,537,620 rights shares at a price of HK$0.052 per rights
share. The Group has irrevocably undertaken to Easyknit Enterprises and the underwriter
of the rights issue that, among others, the rights shares to be allotted to the Group will
be taken up in full. The subscription cost will be amounted to approximately HK$36.7
million based on the Group’s shareholding in Easyknit Enterprises as at the date of this
report. The Group will not apply for any excess rights shares.
(e) The Company included in note 39 (c) of the Group’s annual financial statements for the
year ended 31 March 2007, details of, among others, a possible merger of Easyknit
Enterprises, the Group’s associate, and Wits Basin Precious Minerals Inc. (“Wits Basin”)
which involves a possible issue of approximately 3 billion shares by Easyknit Enterprises
to the shareholders of Wits Basin which may lead to a dilution of the Company’s
shareholding in Easyknit Enterprises from approximately 35.93% to approximately
19.40%. Wits Basin is a company incorporated in Minnesota, the United States of
America (the “US”) whose principal business was the exploration and development of
minerals in Mexico, Colorado and South Africa.
The Company further announced on 20 August and 6 November 2007 jointly with
Easyknit Enterprises that Wits Basin had sent a letter to Easyknit Enterprises purporting
to terminate the merger agreements on the grounds cited as disclosed in the
announcements. Easyknit Enterprises did not admit any allegations made by Wits Basin
or that Wits Basin was entitled to terminate the merger agreements on the grounds
cited or on any other grounds. Easyknit Enterprises is taking legal advice in the US about
the purported termination of the merger agreements and has instructed their lawyers in
the US to claim from Wits Basin a break up fee of US$30,000,000 (approximately
HK$234 million) as according to the termination clauses noted in the merger
agreements. The directors of Easyknit Enterprises consider that it is premature to opine
on the outcome of the dispute with Wits Basin and the break up fee claimed from Wits
Basin has not been recognised by Easyknit Enterprises in its financial statements.

Easyknit International Holdings Limited16
INTERIM DIVIDEND

The board of directors has resolved not to declare an interim dividend for the six months
ended 30 September 2007 (six months ended 30 September 2006: Nil).
MANAGEMENT DISCUSSION AND ANALYSIS

Financial Results
For the six months ended 30 September 2007, the Group recorded a turnover of
approximately HK$282,563,000, representing an increase of approximately 9.7% as
compared to approximately HK$257,628,000 for the same period last year. Gross profit
was approximately HK$52,538,000, representing an increase of approximately 8.5% as
compared to approximately HK$48,429,000 for the corresponding period last year.
Gross profit margin dropped slightly from 18.8% to 18.6%.
Profit attributable to shareholders was approximately HK$60,487,000 as compared to
loss attributable to shareholders of approximately HK$2,111,000 for the same period
last year. Such remarkable increase in profit during the period under review was largely
attributable to increase in other income of approximately $7,844,000, increase in gain
on fair value changes of investments held for trading of approximately HK$22,191,000,
reduction in loss on disposal of available-for-sale investments of approximately
HK$8,952,000, as well as increase in gain arising on change in fair value of investment
properties of approximately HK$22,248,000. This was partly offset by increase in
impairment loss on available-for-sale investments and increase in share of loss of
associates of approximately HK$5,303,000 and approximately HK$3,012,000
respectively. Basic earnings per share was approximately HK cents 7.6 (six months ended
30 September 2006: basic loss per share of approximately HK cents 1.1).
Cost of sales rose by approximately 10.0% to approximately HK$230,025,000, from
approximately HK$209,199,000 for the corresponding period last year, indicating an
increase in sales for the period under review. The total operating expenses dropped by
10.5% to approximately HK$27,922,000 (six months ended 30 September 2006:
approximately HK$31,191,000).
For the period under review, no finance cost was recorded versus HK$30,000 for the six
months ended 30 September 2006, the reason being no bank borrowings had been
made by the Group.

Easyknit International Holdings Limited 17
MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)
Business Review
During the six months ended 30 September 2007, the Group was principally engaged in
sourcing and exporting of cotton-based knitted garments for infants, children and
women, and property investment and development.
Garment Sourcing and Exporting
During the period under review, the turnover for the Group’s major business in garment
sourcing and exporting came to HK$264,719,000, constituted an approximate 10.0%
increase from approximately HK$240,695,000 for the same period last year. It
represented an approximate 93.7% of the Group’s total turnover (six months ended 30
September 2006: approximately 93.4%). Profit gained from this segment augmented
significantly by approximately 61.9% to approximately HK$15,283,000 as compared to
approximately HK$9,437,000 for the same period last year, largely due to the increase in
gross profit resulting from the increase in sales. Catering to the changing market needs,
the product mix of infants wear and ladies wear changed from 37:47 for the six months
ended 30 September 2006 to 35:46 for the parallel period this year.
Property Investment and Development
During the period under review, the property investment and development segments
contributed approximately HK$17,844,000 or 6.3% (six months ended 30 September
2006: approximately HK$16,933,000 or 6.6%) to the Group’s total turnover. Profit of
these segments reached approximately HK$41,399,000 (six months ended 30 September
2006: HK$18,607,000) with an increase of approximately 122.5%, mainly due to the
increase in gain arising on change in fair value of investment properties of approximately
HK$22,248,000. Rental income from investment properties which are all located in
Hong Kong, increased approximately 9.3% to approximately HK$13,818,000 (six months
ended 30 September 2006: HK$12,641,000). As at 30 September 2007, the Group’s
commercial rental properties were 100% leased. Its industrial rental properties
continued to maintain a high occupancy rate of approximately 97.2%. The building
management fee income was approximately HK$146,000 (six months ended 30
September 2006: approximately HK$139,000).
In April 2007, the Group completed the acquisition of the remaining units, namely
Ground Floor, No. 1A and 1st Floor, No. 1 of Victory Avenue, Kowloon, Hong Kong at a
total consideration of HK$12,880,000. In addition to the 18 units acquired in July 2006,
the Group currently has the ownership over the whole building for re-development.
In September 2007, the Group completed the disposal of premises situated at Ground
Floor and cockloft of No. 31 Granville Road, Tsim Sha Tsui, Kowloon, Hong Kong at a
consideration of HK$92,800,000. A gain of HK$18,818,000 arising on change in fair
value of this property was recognised during the period under review.

Easyknit International Holdings Limited18
MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)
Property Investment and Development (Cont’d)
The sale of residential units of Fa Yuen Plaza in Mongkok generated approximately
HK$3,880,000 cash inflow to the Group during the period under review (six months
ended 30 September 2006: approximately HK$4,153,000). As at 30 September 2007,
approximately 96.9% of the available units were sold with the average selling price per
square feet gross floor area decreased from approximately HK$3,940 for six months
ended 30 September 2006 to approximately HK$3,680 for the same period this year.
As at 30 September 2007, the Group’s entire portfolio amounted to approximately
HK$722,126,000 (31 March 2007: approximately HK$769,681,000).
Geographical Analysis of Turnover
The United States of America (the “US”) remained to be the major export market and
contributed 86.3% to the Group’s total turnover (six months ended 30 September 2006:
approximately 86.4%). Besides the US, the Hong Kong, European and Mexican markets,
contributed 6.3%, 5.2% and 2.2% respectively to the Group’s total turnover.
Prospects
Garment Sourcing and Exporting
Hong Kong is renowned for its skill in sourcing of garment products, where orders are
allocated to different locations according to cost, level of sophistication and availability
in quotas. It remains to be one of the preferred garment sourcing and exporting centers
in the world. With experiences built exactly on this area and coupled with stable orders
from its well-established customer base, the Group is confident about the prospects of
its business in this industry. A steady income flow of this segment is expected in the
second half of the financial year ending 31 March 2008.
Looking forward, the Group will strive to further enhance its garment sourcing and
exporting business by expanding its customer base and exploring other potential
markets. Facing different challenges such as vigorous competition from other emerging
export countries, and factors like overseas protectionism and regulatory changes in the
People’s Republic of China, the Group will closely monitor on the market developments,
sharpen its marketing and sourcing strategies as well as adjust its product range so as to
satisfy the ever changing and growing customer needs.

Easyknit International Holdings Limited 19
MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)
Property Investment and Development
The real estate market is expected to remain prosperous as blessed by positive factors
like low interest rate and rising wages and employment rate. With exceptional gains
from the surging equity market, an ample amount of capital is expected to divert to the
real estate sector, further stimulating the property prices. Based on this continued
momentum, the Group intends to play a more active role in the property market
business and to expand its property portfolio so that more income will be generated
from these segments of business.
The booming economy and rising visitors’ arrival stimulate the retail market. Rental
income from the Group’s investment properties located in prime retail areas like
Mongkok and Causeway Bay will be benefited. Hong Kong is also considered as one of
the most preferred locations for international and mainland companies managing their
operations in Asia Pacific. Seeing the soaring demand for commercial offices, capitalising
the investment opportunities on the thriving office leasing market is one of the Group’s
long-term development strategies.
Liquidity and Financial Resources
During the six months ended 30 September 2007, the Group financed its operations
mainly by internally generated resources. As the Group had no bank borrowings as at 30
September 2007 (31 March 2007: nil), no gearing ratio of the Group was presented.
The Group continued to sustain a good liquidity position. As at 30 September 2007, the
Group had net current assets of approximately HK$806,999,000 (31 March 2007:
approximately HK$465,554,000) and cash and cash equivalents of approximately
HK$550,108,000 (31 March 2007: approximately HK$343,353,000). The Group’s cash
and cash equivalents are mainly denominated in Hong Kong dollars and US dollars. As at
30 September 2007, the current ratio of the Group was approximately 10.48 (31 March
2007: approximately 7.15), which was calculated on the basis of current assets of
approximately HK$892,145,000 (31 March 2007: approximately HK$541,207,000) to
current liabilities of approximately HK$85,146,000 (31 March 2007: approximately
HK$75,653,000). During the period under review, the Group serviced its debts primarily
through internally generated resources.
The directors believe that the Group has sufficient financial resources for its operations.
The Directors will remain cautious in the Group’s liquidity management.

Easyknit International Holdings Limited20
MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)
Exposure to Fluctuations in Exchange Rates and Related Hedges
Most of the Group’s revenues and payments are in Hong Kong dollars and US dollars. As
the Hong Kong dollars are pegged to the US dollars, the Group had no significant
exposure to fluctuations in exchange rates during the period under review. Hence, no
financial instrument for hedging purposes was employed.
Capital Structure
The Group has no debt securities or other capital instruments as at 30 September 2007
and up to the date of this report.
Material Acquisitions and Disposals
The Group had no material acquisitions or disposal of subsidiaries or associates during
the six months ended 30 September 2007.
Charges on Group Assets
As at 30 September 2007, certain investment properties of the Group with carrying
amount of approximately HK$133,400,000 (31 March 2007: approximately
HK$131,000,000) were pledged to banks to secure the banking facilities granted to the
Group.
Capital Expenditure and Capital Commitments
During the six months ended 30 September 2007, the Group spent approximately
HK$123,000 (six months ended 30 September 2006: approximately HK$1,715,000) on
acquisition of property, plant and equipment.
As at 31 March 2007 and 30 September 2007, the Group had no significant capital
commitments.
Contingent Liabilities
As at 30 September 2007, the outstanding amount of the Group’s banking facilities
utilised to the extent of approximately HK$4,473,000 (31 March 2007: approximately
HK$4,648,000) were supported by the Company’s corporate guarantees given to the
bank.
Save as disclosed above, the Group did not have any significant contingent liabilities as
at 30 September 2007.

Easyknit International Holdings Limited 21
MANAGEMENT DISCUSSION AND ANALYSIS (Cont’d)
Significant Investment
As at 30 September 2007, the Group had significant investments in a portfolio of equity
securities listed in Hong Kong, which comprised available-for-sale investments of
approximately HK$98,676,000 (31 March 2007: approximately HK$84,830,000) and
investments held for trading of approximately HK$85,048,000 (31 March 2007:
approximately HK$41,566,000). All these investments were stated at fair value and their
fair values were determined by reference to the bid prices quoted in active markets.
In respect of the listed securities performance for the period under review, the Group
recorded an increase in gain on change in fair value of investments held for trading from
HK$174,000 for the six months ended 30 September 2006 to approximately
HK$22,365,000 for the parallel period this year. Impairment loss on available-for-sale
investments went up to approximately HK$19,450,000 (six months ended 30 September
2006: HK$14,147,000). Loss on disposal of available-for-sale investments dropped from
HK$15,134,000 for the six months ended 30 September 2006 to approximately
HK$6,182,000 for the same period this year.
Save as disclosed above and the completion of acquisition of the whole building at
Victory Avenue for redevelopment as mentioned in the section of “Business Review”
above, the Group did not have any significant investment held or any significant
investment plans as at 30 September 2007.
Future Plan for Material Investments
While the directors of the Company are constantly looking for investment opportunities,
no concrete new investment projects have been identified.
Employment and Remuneration Policy
As at 30 September 2007, the number of employees of the Group in Hong Kong and the
US was about 60 and 10 respectively. Staff costs (including directors’ emoluments)
amounted to approximately HK$14,465,000 for the period under review (six months
ended 30 September 2006: approximately HK$13,054,000). The Group remunerates its
employees based on their performance, experience and prevailing industry practice. The
Group has set up the Mandatory Provident Fund Scheme for the Hong Kong’s employees
and has made contributions to the pension scheme for the US staff. The Group also has
a share option scheme to motivate valued employees.

Easyknit International Holdings Limited22
DIRECTORS’ INTERESTS IN SECURITIES
As at 30 September 2007, the interests and short positions of the directors and chief
executives of the Company and their respective associates in the shares, underlying shares
or debentures of the Company or any of its associated corporations (within the meaning
of Part XV of the Securities and Futures Ordinance (the “SFO”)) as recorded in the register
required to be kept by the Company under Section 352 of the SFO or as otherwise
notified to the Company and the Stock Exchange pursuant to the Model Code for
Securities Transactions by Directors of Listed Issuers (the “Model Code“) were as follows:
A. Interests in the Company
Approximate
percentage
Number of to issued
issued ordinary ordinary
shares held shares of
Name of director Capacity (long position) the Company
Lui Yuk Chu (Note) Beneficiary of a trust 291,794,804 36.74%
Note: These shares were registered in the name of and were beneficially owned by Magical
Profits Limited, which was wholly-owned by Accumulate More Profits Limited which in
turn was wholly-owned by Hang Seng Bank Trustee International Limited as trustee of
The Magical 2000 Trust (the beneficiaries of which include Ms. Lui Yuk Chu and her
family members other than her spouse).
B. Interests in associated corporations
1. Easyknit Enterprises Holdings Limited (“Easyknit Enterprises”)
Approximate
percentage
to issued
ordinary
Number of ordinary shares of
shares held Easyknit
Name of director Capacity (long position) Enterprises
Lui Yuk Chu (Note) Beneficiary of a trust 1,410,852,520 35.93%
Note: These shares were registered in the name of and were beneficially owned by
Landmark Profits Limited which was a wholly-owned subsidiary of the Company.
Magical Profits Limited was interested in approximately 36.74% of the issued
share capital of the Company and it was wholly-owned by Accumulate More
Profits Limited which in turn was wholly-owned by Hang Seng Bank Trustee
International Limited as trustee of The Magical 2000 Trust (the beneficiaries of
which include Ms. Lui Yuk Chu and her family members other than her spouse).

Easyknit International Holdings Limited 23
DIRECTORS’ INTERESTS IN SECURITIES (Cont’d)
B. Interests in associated corporations (Cont’d)
2. Wellmake Investments Limited (“Wellmake”) (Note a)
Percentage
Number of to issued
non-voting non-voting
deferred deferred
shares held shares of
Name of director Capacity (long position) Wellmake
Lui Yuk Chu (Note b) 2 100%
Notes:
(a) All the issued ordinary shares in the share capital of Wellmake which carry voting
rights were held by the Company.
(b) One non-voting deferred share was held by Ms. Lui Yuk Chu as beneficial owner
and the other one was held by her spouse, Mr. Koon Wing Yee.
Save as disclosed above, as at 30 September 2007, none of the directors or chief
executives of the Company or their respective associates had any 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) which had been
recorded in the register kept by the Company pursuant to Section 352 of the SFO or as
otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
DIRECTORS’ RIGHTS TO ACQUIRE SHARES OR DEBENTURES
At no time during the six months ended 30 September 2007 was the Company, or any
of its holding companies, fellow subsidiaries or subsidiaries, a party to any arrangement
to enable the directors of the Company to acquire benefits by means of acquisition of
shares in, or debentures of, the Company or any other body corporate, and none of the
directors or any of their spouses or children under the age of 18, was granted any right
to subscribe for the equity or debt securities of the Company or any other body
corporate nor had exercised any such right.
SHARE OPTION SCHEME

On 18 February 2002, a share option scheme (the “Scheme”) was approved by the
shareholders of the Company pursuant to the requirements of Chapter 17 of the Listing
Rules. No share options were granted, exercised or cancelled under the Scheme during
the period.

Easyknit International Holdings Limited24
SUBSTANTIAL SHAREHOLDERS

As at 30 September 2007, the persons (other than the directors or chief executives of
the Company) who had an interest or a short position in the shares and underlying
shares of the Company as recorded in the register required to be kept by the Company
under Section 336 of the SFO were as follows:
Approximate
percentage
Number of to issued
issued ordinary ordinary
Name of substantial shares held shares of
shareholder Capacity (long position) the Company
Koon Wing Yee (Note a) Interest of spouse 291,794,804 36.74%
Magical Profits Limited Beneficial owner 291,794,804 36.74%
(Notes a & b)
Accumulate More Profits Interest of controlled 291,794,804 36.74%
Limited (Notes a & b) corporation
Hang Seng Bank Trustee Trustee 291,794,804 36.74%
International Limited
(Notes a & c)
Hang Seng Bank Limited Interest of controlled 291,794,804 36.74%
(Note c) corporation
The Hongkong and Shanghai Interest of controlled 291,794,809 36.74%
Banking Corporation corporation
Limited (Notes c & d)
HSBC Asia Holdings BV Interest of controlled 291,794,809 36.74%
(Note d) corporation
HSBC Asia Holdings (UK) Interest of controlled 291,794,809 36.74%
(Note d) corporation
HSBC Holdings BV (Note d) Interest of controlled 291,794,809 36.74%
corporation
HSBC Finance (Netherlands) Interest of controlled 291,794,809 36.74%
(Note d) corporation
HSBC Holdings plc (Note d) Interest of controlled 291,794,809 36.74%
corporation

Easyknit International Holdings Limited 25
SUBSTANTIAL SHAREHOLDERS (Cont’d)
Notes:
(a) The 291,794,804 shares relate to the same block of shares. These shares were registered in
the name of and were beneficially owned by Magical Profits Limited, which was a wholly-
owned subsidiary of Accumulate More Profits Limited which in turn was wholly-owned by
Hang Seng Bank Trustee International Limited as trustee of The Magical 2000 Trust (the
beneficiaries of which included Ms. Lui Yuk Chu and her family members other than her
spouse). Mr. Koon Wing Yee, being the spouse of Ms. Lui Yuk Chu was deemed to be
interested in the 291,794,804 shares by virtue of the SFO.
(b) Ms. Lui Yuk Chu, being a director of the Company, is also a director of Magical Profits Limited
and Accumulate More Profits Limited.
(c) Hang Seng Bank Trustee International Limited was a wholly-owned subsidiary of Hang Seng
Bank Limited. Hang Seng Bank Limited was owned as to approximately 62.14% by The
Hongkong and Shanghai Banking Corporation Limited.
(d) The 291,794,809 shares relate to the same block of shares. Out of the 291,794,809 shares,
291,794,804 shares were registered in the name of and were beneficially owned by Magical
Profits Limited. The remaining 5 shares were held by HSBC Broking Securities (Asia) Limited,
which was a wholly-owned subsidiary of HSBC Broking Services (Asia) Limited which in turn
was wholly-owned by The Hongkong and Shanghai Banking Corporation Limited. The
Hongkong and Shanghai Banking Corporation Limited was wholly-owned by HSBC Asia
Holdings BV which was a wholly-owned subsidiary of HSBC Asia Holdings (UK). HSBC Asia
Holdings (UK) was wholly-owned by HSBC Holdings BV which in turn was wholly-owned by
HSBC Finance (Netherlands). HSBC Finance (Netherlands) was a wholly-owned subsidiary of
HSBC Holdings plc.
Save as disclosed above, as at 30 September 2007, the Company had not been notified
of any interests or short positions in the shares and underlying shares of the Company
which were required to be recorded in the register kept by the Company under Section
336 of the SFO.
PURCHASE, SALE AND REDEMPTION OF THE COMPANY’S LISTED
SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the
Company’s listed securities during the six months ended 30 September 2007.

Easyknit International Holdings Limited26
AUDIT COMMITTEE

The Company has established an Audit Committee with written terms of reference. The
Audit Committee currently comprises three independent non-executive directors, namely
Mr. Wong Sui Wah, Michael (Committee Chairman), Mr. Tsui Chun Kong and Mr. Jong
Koon Sang. The Audit Committee has reviewed with the management and the
Company’s auditors the accounting principles and practices adopted by the Group and
discussed financial reporting matters, including review of the unaudited interim
condensed consolidated financial statements for the six months ended 30 September
2007.
REMUNERATION COMMITTEE

The Company has established a Remuneration Committee with written terms of
reference. The Remuneration Committee currently comprises three independent non-
executive directors, namely Mr. Tsui Chun Kong (Committee Chairman), Mr. Wong Sui
Wah, Michael and Mr. Jong Koon Sang. The Remuneration Committee reviews and
makes recommendations to the board on the Company’s policy and structure for all
remuneration of directors and on the establishment of a formal and transparent
procedure for developing policy on such remuneration.
EXECUTIVE COMMITTEE

The Company has established an Executive Committee with written terms of reference.
The Executive Committee currently comprises all the executive directors of the Company,
namely Mr. Tse Wing Chiu, Ricky (Committee Chairman), Ms. Lui Yuk Chu and Mr.
Kwong Jimmy Cheung Tim. It meets as and when required between regular board
meetings of the Company, and operates as a general management committee under the
direct authority of the board. Within the parameters of authority delegated by the
board, the Executive Committee implements the Group’s strategy set by the board,
monitors the Group’s investment and trading performance, appraises the funding and
financing requirements and reviews the performance of management.

Easyknit International Holdings Limited 27
CORPORATE GOVERNANCE

During the six months ended 30 September 2007, the Company complied with all the
code provisions of the Code on Corporate Governance Practices (the “Code”) set out in
Appendix 14 to the Listing Rules except for the following deviations:
Code provision A.2.1
Mr. Tse Wing Chiu, Ricky is the President and Chief Executive Officer of the Company.
The office of the President is equivalent to that of the Chairman for the purpose of the
Company’s Bye-Laws and the Companies Act 1981 of Bermuda (as amended). The board
considers that the combination of the roles of President and Chief Executive Officer will
not impair the balance of power and authority between the board and the management
of the Company as the board will meet regularly to consider major matters affecting the
operations of the Group. The board is of the view that this structure provides the Group
with strong and consistent leadership, which can facilitate the formulation and
implementation of its strategies and decisions and enable it to grasp business
opportunities and react to changes efficiently. As such, it is beneficial to the business
prospects of the Group.
Code provision A.4.1
All the non-executive directors of the Company are not appointed for a specific term,
but they are subject to retirement by rotation no later than the third annual general
meeting after they were last elected or re-elected pursuant to the Bye-Laws of the
Company.
Code provisions B.1.3(a) and (b)
The terms of reference of the Remuneration Committee adopted by the Company are in
compliance with the Code provision B.1.3 except that the Remuneration Committee
should make recommendations to the board on the Company’s policy and structure for
all remuneration of “directors” only (as opposed to “directors and senior management”
under the Code provision B.1.3(a)); and should “review” (as opposed to “determine”
under the Code provision B.1.3(b)) and make recommendations to the board on the
remuneration packages of “executive directors” only (as opposed to “executive directors
and senior management” under the Code provision B.1.3(b)).
The reasons for the above deviations are set out in the section headed “Corporate
Governance Practices” in the “Corporate Governance Report” contained in the
Company’s annual report for the financial year ended 31 March 2007.

Easyknit International Holdings Limited28
MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED
ISSUERS

The Company has adopted the Model Code set out in Appendix 10 to the Listing Rules
as its own code of conduct in relation to directors’ securities transactions. All directors
of the Company have confirmed, following specific enquiry by the Company, their
compliance with the required standard set out in the Model Code throughout the six
months ended 30 September 2007.
By order of the board of
Easyknit International Holdings Limited
Tse Wing Chiu, Ricky
President and Chief Executive Officer
Hong Kong, 12 December 2007
As at the date of this report, the board of the Company comprises Mr. Tse Wing Chiu,
Ricky, Ms. Lui Yuk Chu and Mr. Kwong Jimmy Cheung Tim as executive directors and Mr.
Wong Sui Wah, Michael, Mr. Tsui Chun Kong and Mr. Jong Koon Sang as independent
non-executive directors.