NEW ISLAND PRINTING HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)
(Stock code: 0377)
INTERIM RESULTS 2007/2008

INTERIM RESULTS

The board of directors (“the Directors”) of New Island Printing Holdings Limited (“the
Company”) announces the unaudited consolidated results of the Company and its
subsidiaries (“the Group”) for the six months ended 30th September, 2007 as follows:-
CONSOLIDATED INCOME STATEMENT

For the six months ended 30th September, 2007 - unaudited
Six months ended
30th September,
2007 2006

Note
HK$’000 HK$’000
Turnover 2 283,624 277,638
Cost of sales (226,677) (219,318)
56,947 58,320

Other revenue 4,146 2,723
Other net income 7,250 2,337
Selling and distribution costs (15,423) (14,868)
Administrative expenses (33,271) (27,942)
Profit from operations 19,649 20,570
Finance costs 3(a) (8,538) (9,547)
Profit before taxation 3 11,111 11,023
Income tax 4 (1,002) (2,658)
Profit for the period 10,109 8,365
Earnings per share 5
- Basic HK4.54cents HK3.76cents
- Diluted HK4.54cents HK3.76cents

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CONSOLIDATED BALANCE SHEET

At 30th September, 2007 - unaudited

Note
At 30th September,
2007

At 31st March,
2007

HK$’000 HK$’000 HK$’000 HK$’000
Non-current assets
Fixed assets
-Property, plant and equipment 363,649 378,074
-Interest in leasehold land
held for own use under

operating leases 29,929 29,943
393,578 408,017

Current assets
Inventories 90,173 74,032
Trade debtors, prepayments and
deposits

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180,007

108,720

Current taxation recoverable — 3,764
Pledged bank deposit 1,038 11,134
Cash and cash equivalents 37,163 43,160
308,381 240,810

Current liabilities
Bank loans and overdrafts 131,849 130,391
Obligations under finance leases 24,109 15,805
Trade creditors and accrued
charges 7

124,858

85,192

Bills payable 27,657 17,447
Current taxation payable 2,192 1,817
310,665 250,652

Net current liabilities (2,284) (9,842)
Total assets less current liabilities 391,294 398,175
Non-current liabilities
Bank loans 80,367 82,977
Obligations under finance leases 17,360 33,426
Deferred taxation 17,532 19,220
(115,259) (135,623)
NET ASSETS 276,035 262,552

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CONSOLIDATED BALANCE SHEET

At 30th September, 2007 - unaudited (cont’d)
At 30th September,
2007

At 31st March,
2007

HK$’000 HK$’000 HK$’000 HK$’000
Capital and reserves
Share capital 22,253 22,253
Reserves 253,782 240,299
TOTAL EQUITY 276,035 262,552

NOTES

1. Basis of preparation
The interim financial information for the six months ended 30th September, 2007 has
been prepared in accordance with applicable disclosure provisions of the Rules
Governing the Listing of Securities on The interim financial report should be read in
conjunction with the annual financial statements for the year ended 31st March, 2007.
The interim financial report has been prepared in accordance with the same
accounting policies adopted in the 2007 annual financial statements.

The interim financial report is unaudited, but has been reviewed by the independent
auditor, KPMG, 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 HKICPA. The interim financial report has also
been reviewed by the Audit Committee of the Company.

The financial information relating to the financial year ended 31st March, 2007 that
is included in the interim financial report as being previously reported information
does not constitute the Company’s statutory financial statements for that financial
year but is derived from those financial statements. Statutory financial statements for
the year ended 31st March, 2007 are available from the Company’s registered office.

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2. Turnover
The principal activities of the Group are printing and manufacture of high quality
multi-colour packaging products, carton boxes, books, brochures and other paper
products.
Turnover represents the invoiced value of goods sold, net of sales tax, returns and
discounts.
All the Group’s turnover and operating result are generated from the printing and
manufacture of high quality multi-colour packaging products, carton boxes, books,
brochures and other paper products. Further, the Group’s business participates in only
one geographical location classified by the location of assets, i.e. the People’s
Republic of China (“PRC”). Accordingly, no segmental analysis is provided.
3. Profit before taxation
Profit before taxation is arrived at after charging/(crediting):
Six months ended
30th September,
2007 2006

HK$’000 HK$’000
(a) Finance costs:
Finance charges on obligations under finance leases 1,333 376
Interest payable on bank loans and overdrafts 7,205 9,171
8,538 9,547

(b) Other items:
Cost of inventories sold 226,677 219,318
Depreciation
-owned assets 12,626 18,366
-assets held under finance leases 5,745 1,336
Amortisation of land lease premium 387 479
Gain on disposal of fixed assets (6,185) (1,960)

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4. Income tax
Six months ended
30th September,
2007 2006

HK$’000 HK$’000

Current tax — Provision for Hong Kong Profits Tax
Tax for the period 992
—
Current tax — PRC income tax
Tax for the period 1,644 4,468
2,636 4,468

Deferred tax
Origination and reversal of temporary differences (1,634) (1,810)
1,002 2,658

Hong Kong Profits Tax

The provision for Hong Kong Profits Tax for the period is calculated at 17.5% (2006:
17.5%) of the estimated assessable profits for the period.

PRC Income Tax

Income tax for subsidiaries in the PRC is calculated using the estimated annual
effective rates of taxation that would be applicable to the relevant areas in which the
subsidiaries operate, being 27% (2006: 27%).

On 16th March, 2007, the Fifth Plenary Session of the Tenth National People’s
Congress passed the Corporate Income Tax Law of the People’s Republic of China
(“New Tax Law”) which will take effect on 1st

January, 2008. As a result of the
New Tax Law, it is expected that the income tax rate for subsidiaries in the PRC will
be reduced to 25% from 1st

January, 2008. The new tax rate of 25% has been
applied in the measurement of the Group’s deferred tax liabilities as at 30th
September, 2007 which are expected to be reversed subsequent to 1st January, 2008.

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5. Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share is based on the consolidated profit for
the period of HK$10,109,000 (2006: HK$8,365,000) and on the number of
222,529,000 shares (2006: 222,529,000 shares) in issue during the period.
(b) Diluted earnings per share
There were no dilutive potential shares during the six months ended 30th
September, 2007 and 2006 and diluted earnings per share is the same as basic
earnings per share.

6. Trade debtors, prepayments and deposits
Included in trade debtors, prepayments and deposits are trade debtors (net of
impairment losses for bad and doubtful debts) with the following ageing analysis:

At 30th September,
2007

HK’000
At 31st March,
2007

HK$000

Current 88,786 64,185
One to three months overdue 55,148 22,840
More than three months overdue 4,058 11,433
147,992 98,458

Trade debtors are due not more than 90 days from the date of billing.



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7. Trade creditors and accrued charges
Included in trade creditors and accrued charges are trade creditors with the following
ageing analysis:
At 30th September,
2007

HK’000
At 31st March,
2007

HK$000

Current 55,078 32,056
One to three months overdue 27,533 13,470
More than three months overdue 1,102 3,243
83,713 48,769

MANAGEMENT DISCUSSIONS AND ANALYSIS

The Group reported a turnover of approximately HK$283.6 million for the six months
period ended 30th September, 2007 (the “Review Period”), as compared to approximately
HK$277.6 million for the corresponding period in 2006/2007 (the “Corresponding
Period”). Profit before taxation and net profit for the Review Period increased to
approximately HK$11.1 million and approximately HK$10.1 million, as compared to
approximately HK$11.0 million and approximately HK$8.4 million for the Corresponding
Period.

During the Review Period, turnover increased by approximately 2% over the
Corresponding Period due mainly to an increase in overseas sales. However, with the
rising cost pressures, the operating environment remained difficult and challenging.
Driven by further increments in statutory wages in the Guangdong Province and the
Shanghai areas, labour costs continued to increase. Coupled with the increase in raw
material costs, and notwithstanding the efforts made by the Group to improve production
efficiencies, gross profit margin declined marginally from approximately 21.0% during
the Coresponding Period to approximately 20.1% during the Review Period.
Accordingly, gross profit also declined by approximately 2% from the Corresponding
Period to approximately HK$56.9 million for the Review Period.

To counter the rising cost pressures, the Group continued to take measures, including the
retraining of workers, the reorganisation of workshops and the automation of selected
hand assembly processes, with a view to improve productivities and production
efficiencies. The Group had also completed during the Review Period the construction

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of a new factory building with a gross floor area of approximately 146,000 sq.ft. for the
Shanghai plant and continued to review the Shanghai plant’s operational requirements
which had led to the decision to dispose of certain machineries. The disposal of these
machineries generated positive gains for the Group during the Review Period.

Due mainly to an increase in freight costs reflecting by the increase in turnover especially
in overseas sales as well as the increase in freight rates, selling and distribution costs
during the Review Period increased by approximately 4% over the Corresponding Period.
Administration expenses increased by approximately 19% during the Review Period when
compared to the Corresponding Period due mainly to the inclusion of the depreciation
expenses associated with the recently completed administration block at the Dongguan
plant and an increase in various administrative fees in connection with the Group’s
operations in the PRC.

Finance costs during the Review Period, on the other hand, fell by approximately 11%
from the Corresponding Period as the Group continued to strengthen its financial position
and cut down the level of its borrowings. There was also a reduction of approximately
HK$1.7 million in income tax when compared to the Corresponding Period as the Group
took advantage of the tax relieves of a Shanghai subsidiary which commenced operations
during the Review Period. Accordingly, net profit increased by approximately 21%
from the Corresponding Period to approximately HK$10.1 million for the Review Period.

With a view to further strengthening its financial standing, the Group continued to adopt a
prudent financial management approach. In spite of the increase in working capital
financing for the high season with inventories and trade debtors increasing by a total of
approximately HK$66 million from the end of the last financial year to the end of the
Review Period, the net borrowings (defined as total borrowings less cash holdings) of the
Group increased by only approximately HK$17 million during the same period. Net
current liabilities, in fact, fell from approximately HK$10 million as at 31st March, 2007
to approximately HK$2 million as at 30th September, 2007. The Directors are confident
that the Group would be able to continue to strengthen its financial position particularly
when the high season effects subsided by the end of the financial year.


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FINANCIAL AND CAPITAL RESOURCES

During the Review Period, the Group spent a total of approximately HK$14 million on
fixed assets investment. These investing activities and the daily operating activities of
the Group were generally funded by the cash flow generated from the Group’s operations
and its banking facilities.

As at 30th September, 2007, the total borrowings of the Group, which were either
denominated in Hong Kong dollars or Chinese Renminbi, stood at approximately HK$281
million (31st March, 2007: HK$280 million). Of these borrowings, approximately
HK$152 million (31st March, 2007: HK$112 million) were secured by mortgages over
the Group’s land and buildings, machinery, trade debtors and pledged bank deposits with
an aggregate net book value of approximately HK$251 million (31st March, 2007:
HK$276 million). The gearing ratio (defined as total interest-bearing borrowings
divided by total assets) of the Group as at 30th September, 2007 was approximately 40%
(31st March, 2007: 43%).

CONTINGENT LIABILITIES

The Company has given guarantees to banks to secure facilities of HK$330 million (31st
March, 2007: HK$307 million) granted to subsidiaries, of which HK$207 million (31st
March, 2007: HK$192 million) was utilised at 30th September, 2007.
COMMITMENTS

Capital commitments outstanding at 30th September, 2007, not provided for in the interim
financial report were as follows:
At 30th September,
2007

At 31st March,
2007

HK$’000 HK$’000
Contraced for 8,728 7,104

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STAFF

As at 30th September, 2007, the Group had a total staff of 3,238 (31st March, 2007: 3,493)
of which 3,164 (31st March, 2007: 3,421) were employed in the PRC for the Group’s
manufacturing and distribution businesses.
The Group provides employee benefits such as staff insurance, retirement schemes and
discretionary bonus and also provides in-house training programmes and external training
sponsorship.
INTERIM DIVIDEND

The Directors resolved not to pay an interim dividend for the six months ended 30th
September, 2007 (2006: HK$ nil).

CORPORATE GOVERNANCE

The Company has complied with the code provisions in the Code on Corporate
Governance Practices contained in Appendix 14 of the Listing Rules during the six
months period ended 30th September, 2007.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors
(“Model Code”) set out in Appendix 10 to the Listing Rules as the code of conduct
regarding securities transactions by the Directors. Having made specific enquiry of all
Directors, the Company confirmed that all Directors have complied with the required
standard set out in the Model Code.


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AUDIT COMMITTEE

The audit committee comprises three Independent Non-Executive Directors and a
Non-Executive Director and reports directly to the Directors. The audit committee meets
regularly with the Group’s senior management and the Company’s external auditors to
review the financial reporting and internal control systems of the Group as well as the
financial statements of the Company. The audit committee has reviewed the interim
results of the Group for the six months ended 30th September, 2007.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S SHARES
During the six months ended 30th September, 2007, neither the Company nor any of its
subsidiaries has purchased, sold or redeemed any of the Company’s shares.

By Order of the Board
LI SAU YAN, PHILIP

Secretary
Hong Kong, 21st December, 2007

As at the date of this announcement, the Board comprises Madam So Chau Yim Ping, BBS, JP, Mrs. Cheong So Ka
Wai, Patsy, Mrs. Fung So Ka Wah, Karen and Mr. So Wah Sum, Conrad as Executive Directors; Mr. Ting Woo
Shou, Kenneth, SBS, JP as Non-Executive Director and Mr. Hui Yin Fat, O.B.E. JP, Mr. Wong Wang Fat, Andrew,
O.B.E. (Hon.), JP. and Mr. She Chiu Shun, Ernest as Independent Non-Executive Directors.