EASYKNIT INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)
(Stock Code: 1218)
ANNOUNCEMENT OF INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007

The board of directors of Easyknit International Holdings Limited (the “Company”) is
pleased to announce the unaudited interim results of the Company and its subsidiaries
(collectively the “Group”) for the six months ended 30 September 2007 together with
comparative figures. These interim results 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$’000
(Unaudited)
HK$’000
(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)
—1—

CONDENSED CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2007

30 September 31 March
NOTES 2007 2007

HK$’000
(Unaudited)
HK$’000
(Audited)
Non-current assets
Property, plant and equipment 16,907 17,938
Properties held for re-development — 156,283
Investment properties 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 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 8 18,864 49,278
Loans receivable 7,550 43,255
Bills receivable 9 47,765 46,661
Bank balances and cash 550,108 343,353
892,145 541,207

Current liabilities
Trade and other payables 10 53,580 46,903
Bills payable 9 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

— 2 —

30 September 31 March
NOTES 2007 2007

HK$’000
(Unaudited)
HK$’000
(Audited)
Capital and reserves
Share capital 7,942 7,942
Reserves 1,495,643 1,361,236
1,503,585 1,369,178

Non-current liabilities
Deferred taxation 23,119 28,233
1,526,704 1,397,411
NOTES
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 The Stock
Exchange of Hong Kong Limited (the “Stock Exchange”) and with Hong Kong Accounting Standard 34
“Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (the
“HKICPA”).
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 HKFRS2-Groupandtreasury 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.
— 3 —

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.
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
sourcing and
exporting
Property
investments
Property
development
Investment
in securities
Loan
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.
— 4 —

For the six months ended 30 September 2006
Garment
sourcing and
exporting
Property
investments
Property
development
Investment
in securities
Loan
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.
4. FINANCE COSTS

Six months ended
30 September
2007 2006

HK$’000 HK$’000
Interest on borrowings wholly repayable within five years — 30
— 5 —

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 (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.
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)
— 6 —

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. 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

9. BILLS RECEIVABLE/BILLS PAYABLE
The bills receivable and bills payable of the Group are aged within 90 days.
— 7 —

10. 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
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).
— 8 —

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.
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.
— 9 —

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.
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.
— 10 —

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.
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.
— 11 —

Capital Structure
The Group has no debt securities or other capital instruments as at 30 September 2007 and
up to the date of this announcement.
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.
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
— 12 —

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.
Post Balance Sheet Events
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$53,746,000.
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.
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 charge of investments held for trading from 1 October 2007 to the date of
disposal amounted to HK$1,240,000.
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
Holdings Limited (“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
— 13 —

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 or on any other grounds 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.
As announced by Easyknit Enterprises 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. As at the date of this
announcement, the Company, through Landmark Profits Limited (“Landmark Profits”), a
wholly-owned subsidiary of the Company, is interested in 1,410,852,520 shares of Easyknit
Enterprises, representing approximately 35.93% of the total issued share capital of Easyknit
Enterprises. Landmark Profits has irrevocably undertaken to Easyknit Enterprises and the
underwriter of the rights issue that, among others, the rights shares to be allotted will be
taken up in full, representing 705,426,260 rights shares. Landmark Profits will not apply for
any excess rights shares.
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.
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.
— 14 —

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.
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.
— 15 —

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.
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
Easyknit International Holdings Limited
Tse Wing Chiu, Ricky
President and Chief Executive Officer
Hong Kong, 12 December 2007
As at the date of this announcement, the board 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.

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