2007/2008 Interim Report MT49MT51MT55MT48MT54MT49MT50 MT54MT48MT53MT52MT54MT55 MT45MT44MT44MT46MT43MT45MT44MT44MT47 MT58MT65MT65MT57MT56MT58MT65MT65MT59MT61MT60MT64MT63MT62 >Table of Contents

Corporate Information 1

Financial Highlights 2

Management Discussion and Analysis 4

Unaudited Condensed Consolidated Interim Financial Information 18

Notes to the Financial Statements 23

Other Information 41

1INTERIM REPORT 2007 / 2008
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Corporate Information
Executive Directors
Ms. Lilly Huang (Chairman)
Mr. Zhou Tian Bao
Ms. Zhang Zhen Juan
Mr. Yang Bin
Mr. Dai Wei
Mr. Chen Xiang Dong
Non-Executive Director
Mr. Lee Cheuk Yin, Dannis
Independent Non-Executive
Directors
Mr. Choi Tat Ying, Jacky
Ms. Zhang Xin, Cindy
Mr. Zhang Jian Chun
Company Secretary
Mr. Chiu Ka Wing
Audit Committee
Mr. Choi Tat Ying, Jacky (Chairman)
Ms. Zhang Xin, Cindy
Mr. Zhang Jian Chun
Remuneration Committee
Mr. Choi Tat Ying, Jacky (Chairman)
Ms. Zhang Xin, Cindy
Mr. Zhang Jian Chun
Mr. Lee Cheuk Yin, Dannis
Nomination Committee
Mr. Lee Cheuk Yin, Dannis (Chairman)
Mr. Choi Tat Ying, Jacky
Ms. Zhang Xin, Cindy
Mr. Zhang Jian Chun
Auditor
RSM Nelson Wheeler
Principal Bankers
The Hong Kong and Shanghai Banking
Corporation Limited
Hang Seng Bank Limited
Bank of Tokyo-Mitsubishi UFJ Limited
DBS Bank (Hong Kong) Limited
Hua Xia Bank
Oversea-Chinese Banking Corporation Limited
Commerzbank
KBC Bank N.V.
State Bank of India
Sanpaolo Imi S.p.A.
Banca di Roma
Wing Hang Bank Limited
Public Relations Consultant
Strategic Financial Relations Limited
Unit A, 29th Floor, Tower I, Admiralty Centre
18 Harcourt Road
Admiralty, Hong Kong
Website : www.sprg.com.hk
Principal Share Registrar and
Transfer Office
Bank of Bermuda (Cayman) Limited
P.O. Box 513 GT
Strathvale House
North Church Street, George Town
Grand Cayman, Cayman Islands
British West Indies
Hong Kong Branch Share
Registrar and Transfer Office
Computershare Hong Kong Investor
Services Limited
Shop 1712 – 1716, 17th Floor
Hopewell Centre
183 Queen’s Road East
Wan Chai, Hong Kong
Registered Office
Cricket Square
Hutchins Drive
P.O. Box 2681
Grand Cayman
KY 1-1111

Cayman Islands
Head Office and Principal Place
of Business In Hong Kong
19th Floor, Tower II, Admiralty Centre
18 Harcourt Road
Admiralty, Hong Kong
Stock Code
HKEx : 2339
Website
www.norstar.com.hk

NORSTAR FOUNDERS GROUP LIMITED2
Financial Highlights
For the six months ended 30 September
2007 2006 Change %
(Unaudited) (Unaudited)
Operating results
Turnover RMB’000 1,946,521 1,635,944 18.98
Gross profit RMB’000 318,744 287,519 10.86
EBITDA RMB’000 293,983 244,225 20.37
Profit attributable to shareholders RMB’000 222,539 192,790 15.43
Ratio
Gross profit margin % 16.4 17.6 -6.83
Net profit margin % 11.4 11.8 -2.97
Interest cover times 7.7 7.4 4.05
Current ratio times 7.2 4.1 75.61
Net debt / equity ratio % Net Cash Net Cash Not applicable
Share data
Shares in issue thousands 1,259,462 1,248,130 0.91
Share closing price (as at period end) HK$ 2.93 2.59 13.13
Market capitalization HK$’000 3,690,222 3,232,658 14.15
Basic earnings per share RMB cents 17.74 15.85 11.92
Interim dividend per share HK cents 2.20 2.20 9.09
Net asset value per share RMB 2.49 2.22 12.09
Glossary
EBITDA = Earnings before associate, interest, tax, depreciation and amortisation
Profit attributable
Gross profit to shareholders
Gross profit margin = Net profit margin =
Turnover Turnover
Profit from operations Current assets
Interest cover = Current ratio =
Interest expenses Current liabilities
Gross Debt -
cash & bank balances
Net debt / equity ratio =
Shareholders’ funds

3INTERIM REPORT 2007 / 2008
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NORSTAR FOUNDERS GROUP LIMITED4
Management Discussion and Analysis
Business and Financial Review
For the six months ended 30 September 2007 (the “Period”), the Group’s total turnover reached
RMB1,946,521,000, representing a 19% increase from RMB1,635,944,000 in the same period
last year. Gross profit grew 11% to approximately RMB318,743,000 against around
RMB287,519,000 in the same period last year.
Including the profits of the associated company, profit attributable to shareholders was
RMB222,539,000, an year-on-year increase of 15.4% from last year’s approximately
RMB192,790,000. Earnings per share were RMB17.74 cents, 11.9% higher than in the same
period last year.
The Board of Directors recommended payment of an interim dividend of HK$0.022 per share for
the Period payable to shareholders whose names appear on the Register of Members of the
Company on 17 January 2008.
During the Period, the booming China automobile market presented abundant opportunities to the
auto parts industry. However, the persistently strong Chinese economy and changes in the global
market, appreciation of the RMB and fluctuation of material cost due to inflation also created a
challenging operational environment for the Group.
Committed to quality as a means to maintain strong customer relations and through striving for
technology innovation and developing high value-added products to attract new customers, plus
enjoying stable global after-market demand and rising demand for auto parts from automobile
manufacturers worldwide and a thriving domestic OE market, the Group recorded continuous and
stable sales growth.

5INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
The technological cooperation between the Group and Delphi Technologies, Inc., (“Delphi”) on
producing friction materials, which began in September 2006, has improved the Group’s production
technology of friction materials for brake pads and enabled the Group to improve sales of high
value-added products. In addition, the sales of axle modules/suspension systems and shock absorbers
manufactured in Beijing grew along with overall sales in the country, resulting in an optimized
currency mix of the Group’s turnover.
The overall gross profit margin for the Period was approximately 16.4%, while that of last year’s
was approximately 17.6%. During the Period, the Group started to produce disc brake pads for
OE market and supplied products to Shanghai General Motors in China, leading to enhance the
gross profit margin of the auto parts operation. Nevertheless, since the gross profit margin of axle
modules/suspension systems and shock absorbers in production from 2005 was relatively lower
than those of other products, plus the accelerating appreciation of the RMB translating into exchange
loss on export, the Group’s overall gross profit margin was affected. At the effort of the Group to
develop more high value-added products, producing and processing core components by its own
for assembly operation, and enjoying increasing economies of scale resulting from continuous
expansion of production capacity, the overall gross profit margin of the Group is expected to
return on the up trend in the near future.

NORSTAR FOUNDERS GROUP LIMITED6
Business and Financial Review (continued)
Auto Parts
This segment continued to be the Group’s core business. During the Period, its turnover amounted
to approximately RMB1,717,070,000, increased by 17.9% from last year’s approximately
RMB1,456,536,000, accounting for around 88.2% of the Group’s total turnover. However, the
gross profit margin of this segment decreased from last year’s 18.3% to 17.3%, mainly attributable
to the exchange loss on export business brought by appreciation of the RMB. Excluding such
impact, the gross profit margin of this segment should be 19.8%.
Relative to other products, axle modules/suspension systems have lower gross profit margins.
However, as they enter into the growth phase from infancy, their gross profit margins have been
rising. The Group expanded the production capacities for these products in July 2006 and the
utilization rate of related production facilities also climbed accordingly. The gradual increase in
own production of core components for suspension system assembly, such as ball joints, brake
systems and core parts of shock absorbers, and the expanded production capacity of assembly
business together has presented strong economies of scale benefit to the Group for increasing its
market shares in China. The Group expects its overall gross profit margin to improve in the future.
Market analysis
During the Period, sales of axle modules/suspension systems and shock absorbers in China increased
notably as compared with the same period last year. That plus contribution from domestic sales of
newly developed disc brake pads to OE customers together boosts the percentage of sales
contribution from the China market. Sales of these products have much room for growth in the
China market and are set to become the Group’s sales and profit drivers in the future.

7INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
Market analysis (continued)
The US, Canada and Europe accounted for 38%, 22% and 23% of overall sales of auto parts
respectively, as compared to last year’s 39%, 25% and 24%. The slight decrease in percentage
contribution from overseas market was mainly because contribution from China market increased
from last year’s approximately 12% to 17%.
At the end of last year, the Group reached agreement with overseas customers about raising the
prices of auto parts to offset some of the loss incurred as a result of appreciation of the RMB with
effect from 1 April 2007. The Group expects sales to the US, Canada and Europe to increase
mildly in the coming year, while it focuses on expanding the proportion of sales from the China
market.

NORSTAR FOUNDERS GROUP LIMITED8
Business and Financial Review (continued)
Manufacturing business
During the Period, the Group’s auto parts manufacturing business grew steadily. Sales achieved a
11% year-on-year growth to RMB1,291,131,000 and accounted for approximately 75.2% of the
total turnover from auto parts.
The sales of disc brake pads and lined brake shoes increased by approximately 7% against the
same period last year, resulting from increased utilization rate. As for brake plates/shoes, sales
grew around 15.6% when compared with the corresponding period last year.
Currently, around 50.1% of the sales of auto parts business came from disc brake pads and lined
brake shoes of over 600 product models. The friction materials technological cooperation agreement
reached with Delphi in September 2006 has given the Group access to Delphi’s friction material
technology of disc brake pads for the OE market. In January 2007, production commenced and
supplied for the LaCrosse and GL8 series, etc. car models of Shanghai General Motors Co. Ltd.
These orders represented a breakthrough for the Group in developing its international brand in the
domestic OE market. Seeing strong demand for friction materials in the domestic OE market, the
Group plans to increase the production capacity of OE products in the coming year. The management
will strive to enhance the Group’s ability to apply and improve the new friction material formula
obtained from Delphi. OE production lines and capacity will also be expanded and relevant
testing facilities will be installed to cater for domestic and overseas demands. Regarding market
expansion, apart from negotiating for a supply agreement with General Motors Co. Ltd., the
Group continues to embark on cooperation with other well-known automobile manufacturers to
develop OEM and OES products. It aims to increase product value and generate higher RMB
revenue.

9INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
Assembly business
The turnover from axle modules/suspension systems and shock absorbers manufactured by Norstar
Auto Suspension Manufacturing (Beijing) Inc. in Beijing Economic and Technological Development
Area increased from RMB158,861,000 to RMB280,797,000, and in terms of percentage of the
total turnover of auto parts business from around 11% to 16%, benefiting from enhanced production
utilization rate of axle modules/suspension systems. During the Period, the annual utilization rate
of production facilities increased from 66% in the same period last year to 85%.
More domestic automobile manufacturers are seeking to enhance product quality by sourcing
better quality auto parts and more Sino-foreign automobile joint ventures are sourcing more local
contents to lower their production cost. Production and sales of automobiles in China have also
been climbing continuously. The management sees strong growth potential in the sales of high
value-added products like axle modules/suspension systems and shock absorbers which are poised
to become the Group’s mainstream products and major impetus for turnover growth. As for assembly
business, which is mainly settled in RMB, its growth would help to optimise the currency mix of the
Group’s overall turnover and adjust the impact of appreciation of the RMB on the results of the
Group.
Trading business
Compared with the same period last year, income from trading of auto parts slightly increased by
6.5% to approximately RMB145,142,000, accounting for approximately 8.5% of the total turnover
of the Group’s auto parts business. During the Period, universal joints and transmission shafts were
the major auto parts products sourced for customers.
Riding on its extensive procurement network in China, the Group will continue to source high
quality auto parts products from domestic suppliers to meet the booming sourcing needs of customers.
The Group expects its trading business to maintain growth momentum for the rest of the financial
year, with the aim of satisfying quality and quantity demand of existing customers.
Construction Decorative Hardware
During the Period, the Group’s construction decorative hardware operation recorded turnover of
approximately RMB229,451,000, an increase of 28% when compared with the same period last
year. The segment with increased sales accounted 11.8% of the total turnover of the Group, a
slight increase from 11.0% in the same period last year.

NORSTAR FOUNDERS GROUP LIMITED10
Business and Financial Review (continued)
Manufacturing Costs
The Group continued to optimise the product mix and in turn the cost structure of the segment.
During the Period, the rapid expansion of axle module/suspension system assembly business
increased the proportion of total costs of parts and components used by the assembly business in
the Group’s total production cost to 14.6%, against 10.6% in the same period last year. Cost of
steel made up the largest share in the Group’s production cost at 39.7%, a slight increase from
37.9% in the same period last year. Cost of friction materials accounted for 17.9% of total cost for
the Period, against 19% in the same period last year. Cost of chemical used for surface finishing
and electroplating accounted for 15% of the total cost for the period, against 17% in the same
period last year.
Average unit steel cost increased by around 2.7% compared with the same period last year. Prices
of raw materials used in producing friction materials and industrial chemicals used for surface
processing remained generally stable.
Gross Profit Margin
The Group’s overall gross profit margin declined slightly from 17.6% to 16.4% mainly because the
accelerating appreciation of the RMB during the Period. Exchange loss was incurred when turnover
from export business in US dollar was converted into RMB and accordingly overall gross profit
margin was affected. The sales of axle modules/suspension systems and shock absorbers recorded
sustained growth. This plus expansion in production capacity has gradually brought economies of
scale, benefiting the gross profit margin of assembly business. To keep improving the gross profit
margin of assembly business, the Group has commenced a new project, which is to manufacture
some of the core parts and components including ball joints, core parts of shock absorbers and
brake systems in the manufacturing plant in Anhui and supplied to the assembly plant in Beijing
instead of resorting to outside sources.
To reflect appreciation of the RMB, the Group adjusted its book exchange rate between US dollar
and RMB from 7.9 to 7.6 on 1 April 2007, resulting in a lower RMB book value for US dollar
earnings. Presuming the book exchange rate had not been adjusted, the Group would actually be
reporting an enhanced blended gross profit margin of 18.9% thanks to improved production
efficiency in the Period.
Looking ahead, the management expects the moves to produce its own core parts for the assembly
business to bring better economies of scale and speed up to increase the domestic sales in China,
which will help to enhance the Group’s profitability and mitigate impact on the Group’s profit from
future RMB appreciation. In the middle to long run, the Group will seek to raise gross profit margin
by gradually increasing the production proportion of high value-added OE products, pushing for
vertical integration of production and expanding production capacity. It will also exercise stringent
cost control to ensure its profit margin grow steadily.

11INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
Prospects
The Group sees ample opportunities in the market with more automobile makers from Europe and
the US setting up procurement centers, product design research centers and manufacturing facilities
in China to hasten purchase of China-made auto parts. Furthermore, China’s own automobile
production and sales market has been thriving. According to China Automotive Industry Association
statistics, over 7,200,000 new automobiles hit the road in the entire year of 2006 and the number
for the first half of 2007 was already above 4,000,000, on the way to meeting the forecast of
more than 8,000,000 by the end of 2007. The trend points to continuous growth in demand for
quality auto parts in the China market. As a leading provider of auto parts in China, the Group’s
long term strategic goal is to become a world-class auto parts manufacturer and system integrator.
Looking ahead, it will seek to expand production scale and boost R&D capabilities through investing
/ joint investment in building new plants, and merger and acquisition and restructuring, pushing
towards the goal of becoming a world-class auto parts manufacturer and integrator.
Market/customer prospects
The Group expects its brake plate/shoe and disc brake pad/lined brake shoe products to mature
and start to see balanced development in the international aftermarket. Its aim is to satisfy the
sourcing needs of existing customers. The Group will focus resources on developing the high value-
added product market.
In China, capitalizing on the friction material technology cooperation with Delphi, the Group is not
only supplying friction materials for different vehicle models to Shanghai General Motors, but is
also exploring opportunities in OE markets in the country and overseas. It is in active negotiation
with many renowned automobile manufacturers on potential supply arrangements.
The Group has so far secured more than 10 OE customers for its axle modules/suspension systems
and shock absorbers in Beijing. Among them are Beijing Benz-Daimler Chrysler Automotive Co.
Ltd. and Beijing Automotive Industrial Holdings Company Limited (/8p"!),
from which the Group has derived satisfactory returns. The Group is expanding production capacity
to cater for the increasing demands of existing customers. Also, the Group is negotiating with
several new customers, including automobile manufacturers in Europe, the US, Japan, Korea and
the PRC about joint development and testing of new axle modules/suspension systems.
In coming years, the Group will focus on boosting sales of axle modules/suspension systems,
shock absorbers, disc brake pads, ball joints and brake systems in the China OE market. Its aim is
to increase overall sales in China to above 30% of its total turnover within the next 2 years.

NORSTAR FOUNDERS GROUP LIMITED12
Business and Financial Review (continued)
Progress of projects
– Suspension system assembly
The Group expanded the production capacity for axle modules/suspension systems in July
2006. The surging demands from existing customers have seen the Group’s assembly business
using up to 85% of its production capacity annually. Taking into account that the Group is
developing axle modules/suspension systems and for new car models with potential customers,
demand for axle modules/suspension systems is expected to rise continuously. The Group is
aiming to expand its production capacity for axle modules/suspension systems to 200,000
sets by the end of FY2007/08.
– Disc brake pads for OE market
Delphi’s friction material technology is mainly developed for the OE market. As the demand
from both the domestic and overseas OE markets continues to grow, the Group will gradually
increase production capacity of this manufacturing business and deploy production and
inspection facilities to ensure the high quality of its products, satisfying the needs of both the
domestic and overseas customers.
– Suspension system parts
To effectively raise the overall profit margin of the axle modules/suspension systems and
shock absorbers assembly business, the Group’s plant in Anhui has started its plan to
manufacture some of the major parts of suspension systems and shock absorbers instead of
resorting to outside sources. This will not only effectively raise the gross profit margin of the
assembly business in Beijing, but will also ensure the Group has stable supply of quality
components. Apart from satisfying needs of the Beijing plant, the components also have
huge domestic and export market potential. The Group is currently negotiating with many
renowned automobile manufacturers and top auto parts suppliers on supply arrangements.
The Group commenced production of ball joints in second half of FY2007/08 at the initial
designed annual production capacity of 3,000,000 pieces to satisfy the needs of the Beijing
assembly plant and some customers. The planned initial production capacity for core parts of
shock absorbers is 2,000,000 pieces and, with related equipments purchased and are
being installed and adjusted, it is expected to achieve internal supply and commence sales
in 2008.

13INTERIM REPORT 2007 / 2008
>>
Business and Financial Review (continued)
Progress of projects (continued)
– Brake systems
The Group’s existing disc brake pad/lined brake shoe products are major components of
brake systems. The Group has begun its plan to produce brake systems at its Anhui plant. The
initial designed annual production capacity for disc brakes/drum brakes is 400,000 sets.
Related equipment are being installed and adjusted and it is expected to achieve internal
supply and commence sales in 2008.
Research & Development plan
Looking ahead, the Group will inject more resources into R&D to enhance its technological
capabilities, especially for high value-added products or services including individual suspension
systems, axle modules/suspension system assembly of SUV, MPV and sedan, new formulae friction
materials for the OE market, shock absorbers, ball joints and brake systems, etc. for domestic and
overseas OE customers. The development of these new products will not only help to contribute
new sources of income to the Group, but will also raise its exposure among customers. In the
future, the Group will step up efforts in the area and seek to ride on the corporation with Delphi to
bring in ceramic formula employing DCM technique, enhance its proprietary formulae to facilitate
a wider application in the market, apart from supplying to General Motors. It will also continue to
work in step with domestic and overseas automobile manufacturers on R&D, aiming to strengthen
cooperation on both the technical and marketing aspects and enter the middle to high-end auto
parts market. At the same time, the Group will introduce world-class advanced product testing and
inspection equipment to support especially the OE’s product development needs.
Orders for the next quarter
In the third quarter of FY2007/08, sales orders received by the Group’s existing businesses amounted
in all to approximately RMB941,550,000 (exchange rate: USD1 = RMB7.6). If the effect of
appreciation of the RMB was excluded, sales orders would amount to RMB972,070,000 (exchange
rate: USD1 = RMB7.9), representing an increase of 13.4% from RMB857,000,000 in the same
period last year.
Operating cost
Distribution and selling expenses
The Group’s total distribution and selling expenses were 5% lower than the same period last year.
Such decrease was mainly attributable to more efficient logistic arrangement adopted for local
transportation. Sea freight and local transportation charges accounted for 93.5% of the Group’s
total distribution and selling expenses.

NORSTAR FOUNDERS GROUP LIMITED14
Business and Financial Review (continued)
Administrative expenses
The Group’s total administrative expenses rose 2.8% during the period. Such moderate increase is
mainly attributable to more efficient cost control measures adopted though the production capacity
of Beijing’s suspension system assembly operation expanded.
Other income
Other income rose by 72% during the period. Interest income soared by 99.6% during the period,
due mainly to the increase in cash balance which surged 37.5% compared with the year ended
31 March 2007 and an increase in placement of idle cash in fixed deposits. It also served the
function of eliminating the risk of RMB appreciation. Likewise, income from the sale of scrap metals
and waste materials slightly increased during the period.
Finance costs
During the period under review, total finance costs were 15% higher than the same period last
year. Interest expenses on bank borrowings, resulting from higher average loan balance during
the period remained major contributors to the increase in finance costs. Interests on convertible
bonds were however sharply reduced. As at 30 September 2007, outstanding convertible bonds
totaled USD4,250,000, representing 10.6% of the total issued amount. Though a total syndicated
loan of HKD1,150,000,000 were drawn down on 4 May 2007 and 14 May 2007 respectively,
HKD576,752,000 out of it was for repayment of old loan. Furthermore, decrease of interest rate
during period help lower our total interest cost.
Share of profits of an associate
The Group owns a 40% stake in Profound Global Group, which is currently engaged in the
manufacturing of metal hardware products for sale in China and overseas, as well as the distribution
of auto-parts within the PRC. During the period under review, Profound Global Group recorded
total turnover of approximately RMB668,823,000, un-audited profit before taxation of
RMB33,097,000 and un-audited net profit of RMB21,225,000. The net profit figure represented
a sharp decrease as compared to the same period last year and was due to the impact of RMB
appreciation.

15INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
Impact of RMB appreciation
During the period, the Group generated approximately 83% of its sales from export markets
including the US, Canada and Europe. Most of the Group’s export sales are denominated in US
dollars while its purchases and expenditures are denominated in RMB, except for certain capital
expenditures which are settled in US dollars.
The Group’s book exchange rate of US dollar against the RMB was 7.9 until 31 March 2007
when the rate was adjusted to 7.6 to reflect the continuing RMB appreciation. The adjustment in
book exchange rate has resulted in 3.8% decrease in the Group’s total export revenue. Exchange
loss totaling RMB4,719,000 (30 September 2006: RMB17,721,000 exchange loss) was incurred
with respect to the settlement and revaluation of the Group’s account receivable balances recorded
during the period. Such decrease in exchange loss was mainly due to the change of book rate
reflecting a smaller difference between book and actual exchange rate at the point of settlement or
revaluation. The continual appreciation of RMB against HK dollars has therefore resulted in foreign
exchange gains upon revaluation of the Group’s dividend receivables from subsidiaries. Such
revaluation amounted to approximately RMB11,968,000 exchange gains reflected in the Group’s
consolidated income statement.
All in all, the Group’s net exchange gain was RMB7,249,000 during the period (30 September
2006: RMB17,405,000 net exchange loss).
The Group has adopted a few measures which aim at mitigating the impact of RMB appreciation
on its profits. Apart from its plan to increase its PRC turnover to over 30% within the next 2 years,
the Group has been maintaining a bank loan portfolio which is mainly denominated in foreign
currencies, i.e. US dollars and HK dollars. The continual appreciation of RMB against both US and
HK dollars has therefore resulted in foreign exchange gains upon revaluation of the Group’s
foreign currency loan portfolio.

NORSTAR FOUNDERS GROUP LIMITED16
Business and Financial Review (continued)
The Group’s financial position, liquidity and capital structure
As at 30 September 2007, the Group had total net assets of approximately RMB3,133,436,000
and net current assets of around RMB2,890,283,000, compared with approximately
RMB2,770,254,000 and RMB1,929,203,000 respectively as at 30 September 2006.
The average receivable turnover for the period was 58 days same as 58 days for the same period
last year and 60 days for FY2006/07. The Group has maintained its credit terms of 30-90 days.
The average payable turnover for the period was 19 days as opposed to 13 days for the same
period last year and 18 days for FY2006/07. Average inventory turnover remained as 13 days
decreased from 17 days for the same period last year and compared with 8 days for FY2006/07.
Inventory turnover days measured at year-ends are usually exceptionally low due to the Group’s
policy to slow down raw materials in-take and speed up finished goods delivery prior to year-ends
to facilitate smoother physical stock-take. Inventory turnover days averaged at 2-3 weeks throughout
the rest of the year.
During the period under review, total cashflow from operations amounted to RMB241,154,000,
compared to RMB165,136,000 for the same period last year. Capital expenditure for the period
amounted to RMB50,383,000.
As at 30 September 2007, the Group maintained a total cash and bank balance of approximately
RMB2,397,254,000, which was principally denominated in RMB with a small portion in HK
dollars and US dollars. Ongoing RMB appreciation has prompted management to maintain most
of the Group’s cash and bank balances in RMB in order to minimize foreign exchange losses for its
cash holdings. Total bank borrowings for the Group, which amounted to approximately
RMB1,438,789,000 as at 30 September 2007 or RMB1,404,097,000 excluding US dollar-
denominated convertible bonds, was however principally denominated in foreign currencies, i.e.
US and HK dollars. Such a foreign currency loan portfolio has cushioned the Group from the
negative impact of RMB appreciation as discussed in the section “Impact from RMB appreciation”.
As at 30 September 2007, after excluding the convertible bonds item, less than 10% of total bank
borrowings bore fixed interest charges while the remaining followed a floating basis thus abiding
by prevailing market rates. The Group will closely monitor and manage its currency and interest
rate exposure, though the market generally believes that the current US interest rate cycle has
already peaked with room for interest rate reductions in the near future.
Looking ahead, the Group’s cash and bank balances will be principally used to finance operations
and capital expenditures required for various green-field and capacity expansion projects.

17INTERIM REPORT 2007 / 2008
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Business and Financial Review (continued)
Charge on assets
As at 30 September 2007, bank deposits of approximately RMB16,258,000 (31 March 2007:
RMB16,450,000) were pledged as security for certain banking facilities of the Group.
Capital commitments and contingent liabilities
As at 30 September 2007, the Group’s total capital commitments amounted to RMB31,367,000
(31 March 2007: RMB148,068,000). There were no material contingent liabilities as at 30
September 2007 (31 March 2007: Nil).
Employees and remuneration policies
As at 30 September 2007, the Group had a total of more than 2,380 employees. Total staff costs
amounted to RMB45,642,000 during the period. Remuneration packages are determined by
reference to the qualifications and experience of the staff concerned and are reviewed annually by
management with reference to market conditions and performance of the staff. The Group also
participates in Mandatory Provident Fund Scheme in Hong Kong and State-managed retirement
benefit scheme in the PRC. On 26 September 2006, the Group granted a total of 21,025,000
share options to directors and eligible staff in order to reward them for their contribution to the
Group.

NORSTAR FOUNDERS GROUP LIMITED18
Condensed Consolidated Income Statement
For the six months ended 30 September 2007
Note 2007 2006
(RMB’000) (unaudited) (unaudited)
Turnover 3 1,946,521 1,635,944
Cost of goods sold (1,627,777) (1,348,425)
Gross profit 318,744 287,519
Other income 3 37,026 21,554
Distribution and selling expenses (27,201) (28,620)
Administrative expenses (48,584) (47,240)
Profit from operations 4 279,985 233,213
Finance costs 5 (41,366) (36,041)
238,619 197,172

Share of profit of an associate 8,490 20,009
Profit before tax 247,109 217,181
Income tax expense 6 (24,570) (24,391)
Profit for the period attributable to
equity holders of the Company 222,539 192,790
Dividends 7 27,015 27,871
Earnings per share 8
Basic RMB17.74 cents RMB15.85 cents
Diluted RMB17.47 cents RMB15.51 cents

19INTERIM REPORT 2007 / 2008
>>
Condensed Consolidated Balance Sheet
At 30 September 2007
Note 30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Non-current assets
Property, plant and equipment 9 862,698 854,567
Prepaid land lease payments 55,658 56,282
Goodwill 29,639 29,639
Other intangible assets 8,749 743
Interest in an associate 432,195 423,357
1,388,939 1,364,588

Current assets
Inventories 123,901 81,202
VAT receivable 77,367 145,625
Trade and other receivables 10 759,298 715,059
Cash and bank balances 2,397,254 1,743,535
3,357,820 2,685,421

Current liabilities
Trade and other payables 11 160,630 186,867
Short-term borrowings 12 217,768 186,978
Current portion of non-current borrowings 13 40,544 361,265
Convertible bonds 14 34,692 56,753
Current Tax liabilities 13,903 14,128
467,537 805,991

NORSTAR FOUNDERS GROUP LIMITED20
Condensed Consolidated Balance Sheet (continued)
At 30 September 2007
Note 30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Net current assets 2,890,283 1,879,430
Total assets less current liabilities 4,279,222 3,244,018
Non-current liabilities
Non-current borrowings 13 1,145,786 279,720
1,145,786 279,720
NET ASSETS 3,133,436 2,964,298

Capital and reserves
Share capital 15 132,383 131,598
Reserves 3,001,053 2,832,700
Equity attributable to Equity
holders of the Company 3,133,436 2,964,298

21INTERIM REPORT 2007 / 2008
>>
Condensed Consolidated Statement of Changes
in Equity (unaudited)
For the six months ended 30 September 2007
Attributable to equity holders of the Company
Foreign Share-
Currency based General Enterprise
Share Share Capital translation payment Merger reserve expansion Retained
capital premium reserve reserve reserve reserve fund fund profits Total
(in RMB’000)
At 1 April 2007 131,598 1,699,017 1,190 26,984 3,554 (299,310) 136,304 136,304 1,128,657 2,964,298
Profit for the period ————————222,539 222,539
Recognition of share-based payments ————3,341 ————3,341
Issuance of shares upon conversion of
convertible bonds 785 20,508 (404) ——————20,889
Transfer to General &
Enterprise expansion fund ——————3,054 3,054 (6,108) —
Exchange arised from Assoicate ———1,852 —————1,852
2007 Final dividend paid ————————(79,483) (79,483)
At 30 September 2007 132,383 1,719,525 786 28,836 6,895 (299,310) 139,358 139,358 1,265,605 3,133,436
At 1 April 2006 113,940 1,099,998 1,411 15,927 — (299,310) 98,592 98,592 901,080 2,030,230
Exchange translation ———12,290 —————12,290
Net income recognised directly in equity ———12,290 —————12,290
Profit for the period ————————192,790 192,790
Total recognised income and
expenses for the period ———12,290 ————192,790 205,080
Recognition of share-based payments ————95 ————95
Issuance of shares 17,255 608,239 ———————625,494
Issuance of shares upon conversion
of convertible bonds 82 2,046 (42) ——————2,086
Share issue expenses — (19,453) ———————(19,453)
2006 Final dividend paid ————————(73,278) (73,278)
At 30 September 2006 131,277 1,690,830 1,369 28,217 95 (299,310) 98,592 98,592 1,020,592 2,770,254

NORSTAR FOUNDERS GROUP LIMITED22
Condensed Consolidated Cash Flow Statement
For the six months ended 30 September 2007
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Net cash generated from operating activities 241,154 165,136
Net cash used in investing activities (49,832) (127,746)
Net cash inflow from financing activities 480,131 481,108
Net increase in cash and cash equivalents 671,453 518,498
Effect of foreign exchange rate changes (17,542) (1,972)
Cash and cash equivalents at 1 April 1,727,085 1,063,163
Cash and cash equivalents at 30 September 2,380,996 1,579,689
Analysis of cash and cash equivalents
Cash and bank balances 2,397,254 1,596,321
Pledged bank deposits (16,258) (16,632)
2,380,996 1,579,689

23INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements
For the six months ended 30 September 2007
1. Basis of Preparation
The condensed 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 Significant Accounting Policies
The condensed financial statements have been prepared on historical cost basis, as modified
by the revaluation of investments which are carried at their fair values. The accounting policies
used in the condensed financial statements are consistent with those followed in the preparation
of the Group’s annual financial statements for the year ended 31 March 2007.
The Group has not applied any new standards or interpretation that is not yet effective for the
current accounting period. The Group has already commenced an assessment of the impact
of these new standards and interpretations but the management considered the new standards
has no material impact to the Group’s accounting policies.

NORSTAR FOUNDERS GROUP LIMITED24
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
3. Turnover, Other Income and Segment Information
The Group is principally engaged in the manufacture and sale of auto parts and construction
decorative hardware products. The Group’s turnover which represents the sales of goods to
customers and other income are as follows:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Turnover
Auto parts 1,717,070 1,456,536
Construction decorative hardware products 229,451 179,408
1,946,521 1,635,944

Other income
Interest income 21,703 10,872
Income from scrap sales 9,633 9,445
Sundry income 5,690 1,237
37,026 21,554

Total turnover and other income 1,983,547 1,657,498
Primary reporting format — geographical segments
The Group operates within one geographical segment in the PRC. All segment assets, liabilities
and capital expenditure are located in the PRC and therefore no geographical segments are
presented, except for the segment turnover and segment results. Segment turnover and segment
results are presented based on geographical location of customers.
Secondary reporting format — business segments
The Group’s business is mainly categorised into two business segments:
— Auto parts; and
— Construction decorative hardware products.

25INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
3. Turnover, Other Income and Segment Information (continued)
(i) Primary reporting format — geographical segments
For the six months ended 30 September 2007 (unaudited)
United
(RMB’000) States Canada Europe PRC Total
Segment turnover 810,199 448,103 387,764 300,455 1,946,521
Segment results 128,771 77,159 64,324 48,490 318,744
For the six months ended 30 September 2006 (unaudited)
United
(RMB’000) States Canada Europe PRC Total
Segment turnover 672,812 435,900 352,765 174,467 1,635,944
Segment results 120,393 82,052 62,861 22,213 287,519
(ii) Secondary reporting format — business segments
For the six months ended 30 September 2007 (unaudited)
Construction
decorative
hardware
(RMB’000) Auto parts products Total
Turnover 1,717,070 229,451 1,946,521
Segment results 296,453 22,291 318,744
Other income 37,026
Unallocated costs (75,785)
Profit from operations 279,985

NORSTAR FOUNDERS GROUP LIMITED26
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
3. Turnover, Other Income and Segment Information (continued)
(ii) Secondary reporting format — business segments (continued)
For the six months ended 30 September 2006 (unaudited)
Construction
decorative
hardware
(RMB’000) Auto parts products Total
Turnover 1,456,536 179,408 1,635,944
Segment results 265,654 21,865 287,519
Other income 21,554
Unallocated costs (75,860)
Profit from operations 233,213
4. Profit from Operations
Profit from operations has been arrived at after charging:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Staff costs 45,642 30,520
Cost of inventories sold 1,627,777 1,348,425
Amortization of other intangible assets 463 —
Depreciation 32,971 21,260
Operating lease rentals in respect of:
— Land 624 624
— Factory and office premises 4,028 3,108
— Plant and machinery 2,550 2,550
Net exchange (gain) / loss (7,249) 17,405

27INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
5. Finance Costs
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Interest on bank borrowings 37,605 31,681
Interest on convertible bonds 791 2,127
Finance charges on obligations
under finance leases 904 1,712
Bank charges 2,066 521
41,366 36,041

6. Income tax expense
The amount of taxation charged to the condensed consolidated income statement represents:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
PRC enterprise income tax 24,570 24,391
24,570 24,391

No provision for Hong Kong profits tax has been made for the current and prior period as
the Group had no assessable profits in Hong Kong.
Norstar Automotive is entitled for a reduced tax rate of 11.5% which is granted on a yearly
basis to enterprises with export-oriented status.
(a) Deferred taxation
As at 30 September 2006 and 2007 respectively, no provision for deferred tax has
been made in the financial statements as tax effect of temporary differences is immaterial
to the Group.

NORSTAR FOUNDERS GROUP LIMITED28
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
6. Income tax expense (continued)
(b) As the Group’s major operation and income were located in the PRC, the applicable
tax rate to the Group was the tax rate of 11.5% during the period (six months ended
30 September 2006: 11.5%) applicable to the PRC subsidiary as mentioned above.
Reconciliation between tax expense and accounting profit at applicable tax rate:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Profit before tax (excluding share
of profit of an associate) 238,619 197,172
Tax at the applicable tax rate 27,441 22,675
Tax effect of (income) / expenses that
are not (taxable) /
deductible in determining taxable profit (6,704) (2,370)
Tax effect of unrecognized tax losses 3,833 4,086
Income tax expense 24,570 24,391

29INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
7. Dividends
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
2006/07 Final, paid of HK$0.065 per
ordinary share (2005/06 Final:
HK$0.057 per ordinary share) 79,483 73,278
2007/08 Interim, proposed of HK$0.022 per
ordinary share (2006/07 Interim:
HK$0.022 per ordinary share) 27,015 27,871
106,498 101,149

At a meeting of board of directors held on 13 December 2007, an interim dividend of
HK$0.022 per ordinary share has been declared by the directors for the year ending 31
March 2008. This interim dividend is not reflected as a dividend payable in these condensed
financial statements, but will be reflected as an appropriation of retained profits for the year
ended 31 March 2008.

NORSTAR FOUNDERS GROUP LIMITED30
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
8. Earnings Per Share
The calculation of the basic and diluted earnings per share is based on the following:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Earnings
Earnings for the purpose of
calculating basic earnings per share 222,539 192,790
Finance costs saving on exercise of
convertible bonds (239) 189
Earnings for the purpose of calculating
diluted earnings per share 222,300 192,979
Number of shares
Issued ordinary shares at 1 April 1,251,367,851 1,077,320,976
Effect of shares issued — 138,415,301
Effect of conversion of convertible bonds 2,985,400 252,100
Weighted average number of
ordinary shares for the purpose of
calculating basic earnings per share 1,254,353,251 1,215,988,377
Effect of dilutive potential ordinary shares
arising from convertible bonds outstanding 13,759,375 25,090,625
arising from share options 4,512,631 3,098,436
Weighted average number of
ordinary shares for the purpose
of calculating diluted
earnings per share 1,272,625,257 1,244,177,438

31INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
9. Property, Plant and Equipment
(RMB’000) (unaudited)
Net book value at 1 April 2007 854,567
Adjustment 109
Additions 41,683
Disposal (666)
Depreciation (32,971)
Exchange realignment (24)
Net book value at 30 September 2007 862,698
10. Trade and Other Receivables
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Trade receivables 591,899 641,509
Dividend receivable 7,722 7,914
Prepayments and other receivables 159,545 65,636
Due from director (note a) 132 —
759,298 715,059

Aging analysis of trade receivables is as follows:
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
0 – 90 days 591,899 641,005
91 – 180 days — 504
181 – 365 days — —
591,899 641,509

Normally, 30 to 90 days’ credit terms are granted to customers.

NORSTAR FOUNDERS GROUP LIMITED32
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
11. Trade and Other Payables
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Trade payables 66,585 94,303
Accruals and other payables 93,597 84,804
VAT payable 448 6,428
Due to directors (note a) — 1,332
160,630 186,867

(a) The amounts due are unsecured, interest-free and have no fixed repayment terms.
Aging analysis of trade payables is as follows:
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
0 – 90 days 54,078 84,946
91 – 180 days 4,348 7,573
181 – 365 days 3,747 —
Over 1 year 4,412 1,784
66,585 94,303

33INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
12. Short-Term Borrowings
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Wholly repayable within one year
Guaranteed by the Company (a) 67,768 56,978
Guaranteed by a related party (b) 150,000 130,000
217,768 186,978

(a) Bore effective interest ranging from 1.7% to 6.5% per annum (31 March 2007: 4.2%
to 6.4% per annum)
(b) Denominated in RMB and bore effective interest of 5.5% per annum (31 March 2007:
5.5% per annum)
13. Non-Current Borrowings
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Interest bearing borrowings
Bank loans – unsecured 1,150,415 612,725
Obligations under finance leases 35,915 28,260
1,186,330 640,985

Current portion of non-current borrowings (40,544) (361,265)
1,145,786 279,720

NORSTAR FOUNDERS GROUP LIMITED34
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
14. Convertible Bonds
On 16 December 2004, the Company issued US$40 million worth of zero coupon Convertible
Bonds with maturity date on 16 December 2007 (the “Maturity Date”). The bonds are
convertible, at the option of their holders, into ordinary shares of the Company, par value
HK$0.10 per share, at the conversion price of the equivalent of HK$2.70 per share at any
time on or after 15 June 2005 and prior to 6 December 2007. On 16 December 2005, the
conversion price was adjusted to HK$2.43 per share in accordance to the terms of the
indenture. On 4 May 2006, the conversion price was further adjusted to HK$2.40 per
share. Unless previously redeemed, converted or purchased and cancelled, these bonds will
be redeemed in US dollars at 112.4864% of their principal amount on the Maturity Date.
The fair value of the liability component of the convertible bonds was determined at the
issuance date, using the prevailing market interest rate for similar debt without a conversion
option of 4.75% and is carried as a long term liability. The remaining portion was allocated
to the conversion option that was recognised and included in shareholders’ equity.
The interest charged for the year is calculated by applying an effective interest rate of 4.75%
per annum to the liability component for the 36 month period since the loan notes were
issued.
The Directors estimate the fair value of the liability component of the convertible bonds at 30
September 2007 to be approximately RMB34,692,000. This fair value has been calculated
by discounting the future cash flows at the market rate.
The convertible bonds will nature on 16 December 2007 and hence they are reclassified to
current liabilities.

35INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
15. Share Capital
Ordinary share capital
No. of shares at HK$0.1 each
In millions HK$’000 RMB’000
Authorized :
At 1 April and
30 September 2007 5,000 500,000
Issued and fully paid :
At 1 April 2007 1,251 125,137 131,598
Shares issued upon conversion
of convertible bonds (a) 8 809 785
At 30 September 2007 1,259 125,946 132,383
(a) During the period, convertible bonds with total nominal value of USD2,500,000 were
converted into ordinary shares of the Company. The conversions were conducted on
predetermined exchange rate and conversion price of HK$2.40 per ordinary share of
the Company. Totally 8,093,750 new ordinary shares of HK$0.1 each were issued as
a result of the conversions.
16. Share-based payment
The Company adopted a share option scheme on 4 September 2003 whereby the Directors
of the Company were authorized, at their discretion, to invite, inter alia, employees of the
Group (including Directors of any company in the Group) to take up options to subscribe for
shares of the Company.

NORSTAR FOUNDERS GROUP LIMITED36
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
16. Share-based payment (continued)
A total of 21,025,000 share options were granted to eligible participants on 26 September
2006 under the share option scheme of the Company. The following table discloses movements
of the Company’s share options during the six months ended 30 September 2007.
Number of share options
Granted Exercised Lapsed
Date of As at during during during As at
Share option holders grant 01/04/2007 the period the period the period 30/09/2007
Director
Ms. Zhang Zhen Juan 26/09/2006 5,000,000 ———5,000,000
Mr. Dai Wei 26/09/2006 2,500,000 2,500,000
Mr. Chen Xiang Dong 26/09/2006 2,500,000 ———2,500,000
Mr. Yang Bin 26/09/2006 500,000 500,000
Mr. Lee Cheuk Yin, Dannis 26/09/2006 250,000 ———250,000
Mr. Choi Tat Ying, Jacky 26/09/2006 250,000 250,000
11,000,000 ———11,000,000
Employees of the Group
In aggregate 26/09/2006 10,025,000 ——1,125,000 8,900,000
Total for all categories 21,025,000 ——1,125,000 19,900,000
Details of options granted
Number
of options Exercise
Date of grant granted Vesting period Exercise period Price
26/9/2006 7,004,000 26/09/2006 – 25/9/2008 26/9/2008 - 03/09/2013 HK$2.57
26/9/2006 7,004,000 26/09/2006 – 25/9/2009 26/9/2009 - 03/09/2013 HK$2.57
26/9/2006 7,017,000 26/09/2006 – 25/9/2010 26/9/2010 - 03/09/2013 HK$2.57

37INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
16. Share-based payment (continued)
Notes:
(1) Consideration paid to the Company for each grant of options was HK$1.00.
(2) The closing price of the shares of the Company quoted on the Stock Exchange on 25 September
2006, being the trading date immediately before the date on which the share options were granted
during the year, was HK$2.55.
(3) There was no exercisable share option at the end of the period. The options outstanding at the end
of the year have a remaining contractual life of 6 years (2006: 7 years) and the exercise price is
HK$2.57 (2006:HK$2.57)
(4) The Binomial model was applied to estimate the fair value of share options granted by the Company.
This pricing model requires the input of highly subjective assumptions, including the volatility of the
share price and expected life of option. Expected volatility was determined by calculating the
historical volatility of the Company’s share price over the previous three years. The expected life
used in the model has been adjusted, based on management’s best estimate, for the effects of non
transferability, effective exercise price, exercise restrictions and behavioural considerations. The
changes in input assumptions can materially affect the fair value estimate. The following significant
assumptions were used to deliver the fair value.
Share price at grant date: HK$2.56
Expected life: 4.0-6.3 years from grant date
Expected volatility: 43.7% based on historical volatility
Expected dividend yield: 1.5% on semi-annual basis, based on historical dividend payments
Risk free interest rate: 3.816% based on 7-year Exchange Fund Notes
Exit rate: 0% for Directors; 20% for employees
Trigger price multiple: 2 times for Directors; 1.5 times for employees
All the options forfeited before expiry of the options will be treated as lapsed options under the
relevant share option scheme.
Based on the above assumptions, the computed fair value under the options granted during the
period was approximately HK$0.908 per option share. The expenses recognised in the consolidated
income statement for share options during the period ended 30 September 2007 was approximately
RMB3,340,000 (six months ended 30 September 2006: RMB95,000)

NORSTAR FOUNDERS GROUP LIMITED38
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
17. Capital Commitments
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Contracted but not provided for
— purchases of machineries and equipment 31,367 144,217
— construction in progress — 3,851
31,367 148,068

18. Lease Commitments
As at 30 September 2007, the Group had outstanding commitments for future minimum
lease payments under non-cancellable operating leases in respect of plant, factory and
machinery and equipment in the PRC as follows:
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Within one year 4,620 8,250
After one year but within five years 5,190 7,800
9,810 16,050

39INTERIM REPORT 2007 / 2008
>>
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
18. Lease Commitments (continued)
The Group also had the future minimum lease payments under non-cancellable operating
leases in respect of its office premises and staff quarters located in the PRC and Hong Kong
as follows:
30 September 31 March
2007 2007

(RMB’000) (unaudited) (audited)
Within one year 1,755 1,800
After one year but within five years 1,392 2,328
3,147 4,128

The Group leases a number of properties and items of plant, machinery and equipment
under operating leases. The leases run for an initial period from one to three years, with an
option to renew the lease and renegotiate. The terms at the expiring date or dates will be
mutually agreed between the Group and respective lessors. None of these include contingent
rentals.
19. Related Party Transactions
During the six months ended 30 September 2007, the Group had significant related party
transactions as summarized below:
Six months ended
30 September
2007 2006

(RMB’000) (unaudited) (unaudited)
Rental for leased office building, manufacturing
premises and plant and machinery
paid to AITC (Note a) 3,900 3,900
Rental for office building and staff quarters
paid to related Companies (Note b) 878 583

NORSTAR FOUNDERS GROUP LIMITED40
Notes to the Financial Statements (continued)
For the six months ended 30 September 2007
19. Related Party Transactions (continued)
Notes :
(a) Pursuant to lease agreements entered into between Norstar Automotive and Anhui Industries and
Trading Corporation (“AITC”), AITC has leased to Norstar Automotive certain office buildings,
manufacturing premises and plant and machinery. AITC, a company established in the PRC, is
jointly owned and managed by Mr. Zhou Tian Bao, a director of the Company, and his spouse.
(b) Those premises are beneficially owned by Mr. Zhou Tian Bao.
A related company provided corporate guarantee of up to a maximum amount of RMB200
million in respect of short-term banking facilities given to the Group.
20. Contingent liabilities
As at 30 September 2007, the Group had no significant contingent liabilities (31 March
2007: Nil).

41INTERIM REPORT 2007 / 2008
>>
Other Information
Interests of directors and chief executive
At 30 September 2007, the interests and short positions of each director and chief executive of the
Company in the shares, underlying shares and debentures of the Company and its associated
corporations (within the meaning of the Securities and Futures Ordinance (“SFO”)), as recorded in
the register maintained by the Company under Section 352 of the SFO or as notified to the
Company and the Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to the
Model Code for Securities Transactions by directors of listed Companies were as follows:
Number of shares held
Underlying Approximate
shares of aggregate
Personal Corporate outstanding percentage
Name of directors interests interests Total share options of interests
Ms. Lilly Huang (Note 1) — 600,000,000 600,000,000 — 47.64%
Mr. Zhou Tian Bao (Note 2) 8,832,000 645,000,000 653,832,000 — 51.91%
Ms. Zhang Zhen Juan ———5,000,000 —
Mr. Dai Wei 2,500,000 —
Mr. Chen Xiang Dong ———2,500,000 —
Mr. Yang Bin 500,000 —
Mr. Lee Cheuk Yin, Dannis ———250,000 —
Mr. Choi Tat Ying, Jacky 250,000 —
Details of share options granted to Directors are stated in the note “Share-based Payment” in Note 16 to the
financial statements.
Interests in shares and underlying shares stated above represent long positions.
Notes:
(1) The shares are held by Century Founders Group Limited in which Ms. Lilly Huang owns a 63% shareholding
interest. Ms. Lilly Huang is therefore deemed to be interested in the entire interest of Century Founders
Group Limited in the Company for the purpose of Part XV of the SFO.

NORSTAR FOUNDERS GROUP LIMITED42
(2) Mr. Zhou Tian Bao is interested and deemed to be interested in an aggregate of 653,832,000 shares in
the Company. These shares are held in the following capacity:
i) 8,832,000 shares are held in his personal name;
ii) 45,000,000 shares are held by Mark Up Investments Limited which is a company wholly-owned by
Mr. Zhou Tian Bao. Mr. Zhou Tian Bao is therefore deemed to be interested in the entire interest of
Mark Up Investments Limited in the Company for the purpose of Part XV of the SFO;
iii) 600,000,000 shares are held by Century Founders Group Limited in which Mark Up Investments
Limited own a 37% shareholding interest. Mr. Zhou Tian Bao is therefore deemed to be interested
in the entire interest of Century Founders Group Limited in the Company for the purpose of Part XV
of the SFO.
Save as disclosed above, none of directors and the chief executive of the Company was interested
or had any short position in any shares, underlying shares and debentures of the Company and its
associated corporations (within the meaning of Part XV of the SFO) as at 30 September 2007.
Interests of substantial shareholders
So far as is known to the directors of the Company, as at 30 September 2007, other than the
interests of the directors of the Company as disclosed above, the following persons had interests in
the shares or underlying shares of the Company which would fall to be disclosed to the Company
and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which
were recorded in the register required to be kept by the Company under Section 336 of the SFO.
Approximate
percentage of
Number of shareholding
Name of shareholders shares held (Note 3)
Century Founders Group Limited (Note 2) 600,000,000 47.64%
Mark Up Investments Limited 645,000,000 51.21%
Ms. Lilly Huang (Note 2) 600,000,000 47.64%
Mr. Zhou Tian Bao 653,832,000 51.91%
Sansar Capital Management, LLC 164,470,000 13.06%
Templeton Asset Management Ltd 75,035,000 5.96%
UBS AG 64,002,700 5.08%

43INTERIM REPORT 2007 / 2008
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Notes:
(1) Interests in shares stated above represent long positions.
(2) Century Founders Group Limited owns 600,000,000 shares. Ms. Lilly Huang owns a 63% shareholding
interest in Century Founders Group Limited and the remaining 37% shareholding interest is owned by
Mark Up Investments Limited, a company wholly-owned by Mr. Zhou Tian Bao.
(3) The calculation is based on the number of shares as a percentage of the total number of issued shares (ie.
1,259,461,601 shares) of the Company as at 30 September 2007.
Save as disclosed above and so far as the directors are aware, as at 30 September 2007, no
other person (other than the directors of the Company) had an interest or short position in the
Company’s shares which would fall to be disclosed to the Company and the Stock Exchange under
the provisions of Divisions 2 and 3 of Part XV of the SFO and as recorded in the register required
to be kept under Section 336 of the SFO.
Directors’ interests in contacts
Save for those transactions described in the note “Related Party Transaction” in Note 19 to the
financial statements, none of the Directors had material interest, whether directly or indirectly, in
any contract of significance to the business of the Group to which the Company or any of its
subsidiaries was a party during the period.
Purchase, sale or redemption of securities
During the six months period ended 30 September 2007, neither the Company nor any of its
subsidiaries has purchased, sold or redeemed any of the Company’s listed shares.
Interim dividend
The Board is pleased to declare the payment of an interim dividend of HK$0.022 (2006: HK$0.022)
per share for the six months ended 30 September 2007. The dividend will be payable on 24
January 2008 to shareholders whose names appear on the Register of Members of the Company
on 17 January 2008.

NORSTAR FOUNDERS GROUP LIMITED44
Closure of register of members
The Company’s register of members will be closed from 15 January 2008 to 17 January 2008,
both days inclusive, during which period no transfer of shares can be registered. In order to qualify
for the interim dividend, all transfer of shares accompanied by the relevant share certificates and
the appropriate share transfer forms must be lodged with the Company’s share registrar in Hong
Kong, Computershare Hong Kong Investor Services Limited, at Shop 1712-1716, 17/F Hopewell
Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:00 p.m. on
14 January 2008.
Compliance with the code on corporate governance practices
The Board and the management of the Company are committed to the maintenance of good
corporate governance practices and procedures. The Company is firmly committed to maintaining
a quality Board, sound internal control, and transparency and accountability to all shareholders.
The Company had complied with the Code on Corporate Governance Practices (the “CG Code”)
as set out in appendix 14 of the Listing Rules throughout the six months ended 30 September
2007.

Compliance with the Model Code
The Company has adopted the Model Code for Securities Transactions by directors of the listed
Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules. Having made specific
enquiry of all directors, they all confirmed that they have complied with the Model Code throughout
the period under review.
The Board
The Board is comprised of six executive Directors and four non-executive Directors. Of the four non-
executive Directors, three of them are independent non-executive Directors.
The Board is responsible for preparing the accounts, and is accountable to shareholders for the
overall activities and financial performance of the Group. The Board considers that the financial
statements have been prepared in conformity with the generally accepted accounting standards in
Hong Kong, and reflect amounts that are based on the best estimates and reasonable, informed
and prudent judgment of the Board with an appropriate consideration to materiality. As at 30
September 2007, the Board, having made appropriate enquiries, is not aware of any material
uncertainties relating to events or conditions which may cast significant doubt upon the Company’s
ability to continue as a going concern. Accordingly, the Board has prepared the financial statements
of the Company on a going concern basis.

45INTERIM REPORT 2007 / 2008
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Audit committee
The Company has established an audit committee in compliance with Rule 3.21 of the Listing
Rules.
The existing audit committee is comprised of three independent non-executive Directors, namely,
Mr. Choi Tat Ying, Jacky (Chairman), Mr. Zhang Jian Chun and Ms. Zhang Xin, Cindy. The primary
duty of the audit committee include the review and supervision of the Group’s financial reporting
process and internal control systems, review of the Group’s financial information and monitors the
appointment and function of the Group’s external auditor.
The financial statements for the six months ended 30 September 2007 have been reviewed by the
audit committee.
Remuneration committee
The remuneration committee is comprised of three independent non-executive Directors, namely,
Mr. Choi Tat Ying, Jacky (Chairman), Mr. Zhang Jian Chun, Ms. Zhang Xin, Cindy and one non-
executive Director, Mr. Lee Cheuk Yin, Dannis. The primary duties of the committee are to make
recommendation to the Board the remuneration of executive Directors, senior management and the
fees and emoluments of non-executive Directors.
Nomination committee
The nomination committee is comprised of one non-executive Director, Mr. Lee Cheuk Yin, Dannis
(Chairman) and three independent non-executive Directors, namely, Mr. Choi Tat Ying, Jacky, Mr.
Zhang Jian Chun and Ms. Zhang Xin, Cindy. The primary duties of the committee are to consider
and assess the qualifications and character of candidates for directorships on the Board. The
nomination committee shall meet before the holding of an annual general meeting where appointment
of directors will be considered. Additional meetings shall be held as the work of the Committee
demands.
By Order of the Board
Norstar Founders Group Limited
Lilly Huang
Chairman
Hong Kong, 13 December 2007

NORSTAR FOUNDERS GROUP LIMITED46
As at the date of this report, the Board comprises of:
Ms. Lilly Huang Executive Director and Chairman
Mr. Zhou Tian Bao Executive Director and Chief Executive Officer
Ms. Zhang Zhen Juan Executive Director
Mr. Yang Bin Executive Director
Mr. Dai Wei Executive Director
Mr. Chen Xiang Dong Executive Director
Mr. Lee Cheuk Yin, Dannis Non-executive Director
Mr. Choi Tat Ying, Jacky Independent Non-Executive Director
Ms. Zhang Xin, Cindy Independent Non-Executive Director
Mr. Zhang Jian Chun Independent Non-Executive Director