IRC Limited — Annual Report 2015

Oct 15, 2015

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(Stock Code: 488)

ANNOUNCEMENT OF FINAL RESULTS FOR THE YEAR ENDED 31 JULY 2015

RESULTS

The board of directors (the “ Board ”) of Lai Sun Development Company Limited (the “ Company ”) is pleased to announce the consolidated results of the Company and its subsidiaries (the “ Group ”) for the year ended 31 July 2015 together with the comparative figures of the last year as follows:

Consolidated Income Statement

For the year ended 31 July 2015

		2015	2014
	Notes	HK$’000	HK$’000
TURNOVER	3	1,541,686	2,109,647
Cost of sales		(646,115)	(1,051,747)
		__	__
Gross profit		895,571	1,057,900
Other revenue	4	128,826	79,563
Selling and marketing expenses		(23,534)	(56,660)
Administrative expenses		(240,557)	(252,786)
Other operating expenses, net	6(b)	(186,026)	(140,770)
Fair value gains on investment properties		1,289,257	928,755
Provision for tax indemnity	5	- __	(139,017) __
PROFIT FROM OPERATING ACTIVITIES	6(a)	1,863,537	1,476,985
Finance costs	7	(180,016)	(242,723)
Share of profits and losses of associates		90,127	106,513
Share of profits and losses of joint ventures		354,243	110,702
Discount on acquisition of additional interest in an associate	8	- __	150,660 __
PROFIT BEFORE TAX		2,127,891	1,602,137
Tax	9	(79,397)	(90,489)
		__	__
PROFIT FOR THE YEAR		2,048,494 __	1,511,648 __
		__	__
Attributable to:
Owners of the Company		2,018,262	1,478,730
Non-controlling interests		30,232 __	32,918 __
		2,048,494 __	1,511,648 __
		__	__
EARNINGS PER SHARE ATTRIBUTABLE TO
OWNERS OF THE COMPANY	11
Basic		HK$0.101 __	HK$0.074 __
		__	__
Diluted		HK$0.100 _ _	HK$0.073 _ _

• 1 -

Consolidated Statement of Comprehensive Income

For the year ended 31 July 2015

	2015	2014
	HK$’000	HK$’000
PROFIT FOR THE YEAR	2,048,494	1,511,648
	__	__
OTHER COMPREHENSIVE INCOME/(EXPENSE)
Other comprehensive income/(expense) to be reclassified to profit or loss
in subsequent periods:
Available-for-sale investments:
Changes in fair values	(31,818)	13,208
Reclassification adjustment for impairment loss
included in the consolidated income statement	6,141	-
	__	__
	(25,677)	13,208
Exchange realignments	(52,306)	16,537
Release of exchange reserve upon liquidation of a subsidiary	-	(548)
Share of other comprehensive (expense)/income of associates	(25,242) __	11,891 __
OTHER COMPREHENSIVE (EXPENSE)/INCOME FOR THE YEAR	(103,225)	41,088
	__	__
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	1,945,269 __	1,552,736 __
	__	__
Attributable to:
Owners of the Company	1,915,037	1,519,924
Non-controlling interests	30,232 __	32,812 __
	1,945,269 _ _	1,552,736 _ _

• 2 -

Consolidated Statement of Financial Position

As at 31 July 2015

Consolidated Statement of Financial Position As at 31 July 2015
		2015	2014
	Notes	HK$’000	HK$’000
NON-CURRENT ASSETS
Property, plant and equipment	12	2,380,267	554,635
Prepaid land lease payments		21,928	22,955
Investment properties		15,236,780	12,669,295
Properties under development for sale		653,845	109,158
Interests in associates		3,930,309	3,841,870
Interests in joint ventures		5,937,793	6,018,543
Available-for-sale financial assets		1,215,485	1,232,466
Pledged bank balances and time deposits		-	138,049
Deposits paid and other receivables		141,968 __	727,468 __
Total non-current assets		29,518,375	25,314,439
		__	__
CURRENT ASSETS
Completed properties for sale		641,048	832,633
Equity investments at fair value through profit or loss		5,574	2,159
Inventories		12,704	8,106
Debtors, deposits paid and other receivables	13	175,672	134,032
Pledged bank balances and time deposits		185,467	-
Cash and cash equivalents		1,068,038 __	1,671,478 __
Total current assets		2,088,503	2,648,408
		__	__
CURRENT LIABILITIES
Creditors, deposits received and accruals	14	409,301	299,723
Tax payable		170,783	132,825
Bank borrowings		1,012,594 __	416,808 __
Total current liabilities		1,592,678	849,356
		__	__
NET CURRENT ASSETS		495,825	1,799,052
		__	__
TOTAL ASSETS LESS CURRENT LIABILITIES		30,014,200	27,113,491
		__	__
NON-CURRENT LIABILITIES
Bank borrowings		3,270,608	2,274,414
Guaranteed notes		2,703,324	2,698,122
Deferred tax		121,020	111,620
Provision for tax indemnity	5	729,387	729,387
Long term rental deposits received		81,907	71,087
Deferred rental		4,380	4,366
		__	__
Total non-current liabilities		6,910,626	5,888,996
		__	__
		23,103,574 __	21,224,495 __
		__	__
EQUITY
Equity attributable to owners of the Company
Share capital		3,135,561	3,129,961
Investment revaluation reserve		1,117,849	1,131,735
Share option reserve		65,172	64,469
Hedging reserve		(963)	(963)
Capital reduction reserve		4,692	4,692
General reserve		646,700	646,700
Other reserve		263,684	256,582
Statutory reserve		24,518	-
Exchange fluctuation reserve		22,373	111,712
Retained profits		17,382,957 __	15,429,660 __
		22,662,543	20,774,548
Non-controlling interests		441,031 __	449,947 __
		23,103,574 _ _	21,224,495 _ _

• 3 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“ HKASs ”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties, equity investments at fair value through profit or loss and certain available-for-sale financial assets, which have been measured at fair value. These financial statements are presented in Hong Kong dollars (“ HK$ ”) and all values are rounded to the nearest thousand except when otherwise indicated.

The financial information relating to the years ended 31 July 2015 and 31 July 2014 included in this preliminary announcement of annual results for the year ended 31 July 2015 does not constitute the Company’s statutory annual consolidated financial statements for those years but, in respect of the year ended 31 July 2014, is derived from those financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Companies Ordinance is as follows:

The Company has delivered the financial statements for the year ended 31 July 2014 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance and will deliver the financial statements for the year ended 31 July 2015 in due course.

Auditors’ reports have been prepared on these financial statements of the Group for both years. The auditors’ reports were unqualified; did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying its reports; and did not contain a statement under sections 406(2), 407(2) or (3) of the Companies Ordinance.

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the revised HKFRSs’ standards and new interpretation, which are effective for the first time for the current year’s financial statements. The adoption of these revised HKFRSs’ standards and new interpretation has had no significant financial effect on the financial statements.

In addition, the requirement of Part 9 "Accounts and Audit" of the Hong Kong Companies Ordinance (Cap. 622) came into effect for the first time during the current financial year. The main impact to the financial statements is on the presentation and disclosure of certain information in the financial statements.

Final dividends are recognised as a liability when they are approved by the shareholders in a general meeting. In prior years, final dividends proposed by the directors were classified as a separate allocation of retained earnings within the equity section of the statement of financial position, until it has been approved by the shareholders in a general meeting. Following the implementation of the Hong Kong Companies Ordinance (Cap. 622), proposed final dividends are disclosed in the notes to the financial statements.

• 4 -

3. SEGMENT INFORMATION

Segment revenue and results

The following table presents revenue and results for the Group’s reportable segments:

	Property	Property
	development		Property			Hotel	Restaurant
	and sales		investment		operation		operation		Others		Eliminations		Consolidated
	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Segment revenue:
Sales to external customers	277,8111,046,947		655,476	502,335	383,973	372,139	201,726	167,082	22,700	21,144	-	-	1,541,686	2,109,647
Intersegment sales	-	-	12,400	11,002	360	270	-	-	22,700	22,732	(35,460)	(34,004)	-	-
Other revenue	4,703 2,140 ___ __		1,357 _	1,042 __	25 __	7 __	- _	2,345 ______	5,159 ______	1,509 ______	- ______	- ______	11,244 __	7,043 __
Total	282,5141,049,087 ___ __		669,233 _	514,379 __	384,358 __	372,416 __	201,726 _	169,427 ______	50,559 ______	45,385 ______	(35,460) ______	(34,004) ______	1,552,930 __	2,116,690 __
	___ __		_	__	__	__	_	______	______	______	______	______	__	__
Segment results	53,301 ___	346,558 _	535,444 _	386,022 __	69,956 __	86,476 __	(8,587) _	(13,049) ______	(8,171) ______	1,422 ______	- ______	- ______	641,943	807,429
	___	_	_	__	__	__	_	______	______	______	______	______
Interest income from bank deposits - unallocated													3,977	19,007
Unallocated revenue													113,605	53,513
Fair value gains on investment properties	-	-	1,289,257	928,755	-	-	-	-	-	-	-	-	1,289,257	928,755
Unallocated expenses													(185,245)	(192,702)
Provision for tax indemnity													- __	(139,017) __
Profit from operating activities													1,863,537	1,476,985
Finance costs													(180,016)	(242,723)
Share of profits and losses of associates	444	52	-	-	-	-	(2,462)	(2,094)	-	-	-	-	(2,018)	(2,042)
Share of profits and losses of associates - unallocated													92,145	108,555
Share of profits and losses of joint ventures	(686)	5,882	354,929	104,820	-	-	-	-	-	-	-	-	354,243	110,702
Discount on acquisition of additional interest in an associate													- __	150,660 __
Profit before tax													2,127,891	1,602,137
Tax													(79,397) __	(90,489) __
Profit for the year													2,048,494 _ _	1,511,648 _ _

• 5 -

3. SEGMENT INFORMATION (continued)

The following table presents the total assets and liabilities and other segment information for the Group’s reportable segments:

		Property
	development			Property		Hotel	Restaurant
		and sales		investment		operation	operation		Others		Consolidated
	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Segment assets and liabilities
Segment assets	1,349,283	1,495,842	15,367,059	12,732,170	2,503,471	885,267	381,659	272,520	135,991	46,726	19,737,463	15,432,525
Interests in associates	7,114	7,199	-	-	-	-	21,669	18,610	-	-	28,783	25,809
Interests in associates - unallocated											3,901,526	3,816,061
Interests in joint ventures	948,346	1,494,050	4,989,447	4,524,493	-	-	-	-	-	-	5,937,793	6,018,543
Unallocated assets											2,001,313 ___	2,669,909 ___
Total assets											31,606,878 ___	27,962,847 ___
											___	___
Segment liabilities	99,813	70,333	184,020	151,066	122,509	61,587	20,976	17,180	8,344	6,537	435,662	306,703
Bank borrowings											4,283,202	2,691,222
Guaranteed notes											2,703,324	2,698,122
Other unallocated liabilities											1,081,116 ___	1,042,305 ___
Total liabilities											8,503,304 ___	6,738,352 ___
											___	___
Other segment information
Amortisation of prepaid land lease payments	-	-	-	-	1,027	1,027	-	-	-	-	1,027	1,027
Depreciation	352	352	322	593	17,615	12,059	19,273	15,860	69	22	37,631	28,886
Depreciation - unallocated											10,982 ___	5,601 ___
											48,613 ___	34,487 ___
											___	___
Capital expenditure	544,687	13,492	1,384,367	968,490	1,850,422	6,235	15,898	51,855	262	29	3,795,636	1,040,101
Capital expenditure - unallocated											7,998 ___	23,232 ___
											3,803,634 _ _	1,063,333 _ _

• 6 -

3. SEGMENT INFORMATION (continued)

Geographical information

During the year, management changed its reporting segment by geographical location to (i) Hong Kong; (ii) United Kingdom; (iii) Vietnam; and (iv) others as a result of growing importance of the United Kingdom segment to the Group. The corresponding information for the year ended 31 July 2014 has been re-presented accordingly.

The following table presents revenue and assets by geographical location of the assets:

	Hong Kong	Hong Kong	United	Kingdom		Vietnam		Others	Consolidated	Consolidated
	2015	2014	2015	2014	2015	2014	2015	2014	2015	2014
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Segment revenue
Sales to external customers	1,035,066	1,727,365	122,946	11,874	380,775	367,208	2,899	3,200	1,541,686	2,109,647
Other revenue	11,219	6,158	-	-	4	7	21	878	11,244	7,043
	___	___	___	___	___	___	___	___	___	___
Total	1,046,285	1,733,523	122,946	11,874	380,779	367,215	2,920	4,078	1,552,930	2,116,690
	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _
Segment assets
Non-current assets	15,401,620	12,380,675	2,665,250	1,312,940	269,930	274,913	1,430	1,785	18,338,230	13,970,313
Current assets	954,557	1,061,035	76,713	25,737	364,060	372,212	3,903	3,228	1,399,233	1,462,212
	___	___	___	___	___	___	___	___	___	___
Total	16,356,177	13,441,710	2,741,963	1,338,677	633,990	647,125	5,333	5,013	19,737,463	15,432,525
	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _	_ _

Information about major customers

For both the years ended 31 July 2015 and 31 July 2014, there was no revenue derived from a single customer which contributed more than 10% of the Group’s revenue for the respective years.

• 7 -

4. OTHER REVENUE

	2015	2014
	HK$’000	HK$’000
Interest income from bank deposits	3,977	19,007
Interest income from held-to-maturity debt investments	-	134
Other interest income	5,130	1,092
Dividend income from listed equity investments at fair value through profit or loss	-	101
Dividend income from unlisted available-for-sale financial assets	97,149	38,154
Gain on disposal of unlisted available-for-sale financial assets	-	11,640
Gain on disposal of a listed equity investment at fair value through profit or loss	-	786
Gain on disposal of items of property, plant and equipment	69	-
Fair value gain on a listed equity investment at fair value through profit or loss	3,415	-
Others	19,086	8,649
	__	__
	128,826 _ _	79,563 _ _

5. PROVISION FOR TAX INDEMNITY

Pursuant to an indemnity deed (the “ Lai Fung Tax Indemnity Deed ”) dated 12 November 1997 entered into between the Company and Lai Fung Holdings Limited (“ Lai Fung ”), the Company has undertaken to indemnify Lai Fung in respect of certain potential income tax and land appreciation tax (“ LAT ”) of the People’s Republic of China (“ PRC ”) payable or shared by Lai Fung in consequence of the disposal of any of the property interests attributable to Lai Fung through its subsidiaries and its associates as at 31 October 1997 (the “ Property Interests ”). These tax indemnities given by the Company apply in so far as such tax is applicable to the difference between (i) the value of the Property Interests in the valuation thereon by Chesterton Petty Limited (currently known as “ Knight Frank Petty Limited ”), independent chartered surveyors, as at 31 October 1997 (the “ Valuation ”); and (ii) the aggregate costs of such Property Interests incurred up to 31 October 1997, together with the amount of unpaid land costs, unpaid land premium and unpaid costs of resettlement, demolition and public utilities and other deductible costs in respect of the Property Interests. The Lai Fung Tax Indemnity Deed assumes that the Property Interests are disposed of at the values attributed to them in the Valuation, computed by reference to the rates and legislation governing PRC income tax and LAT prevailing at the time of the Valuation.

The indemnities given by the Company do not cover (i) new properties acquired by Lai Fung subsequent to the listing of the shares of Lai Fung on The Stock Exchange of Hong Kong Limited (the “ Listing ”); (ii) any increase in the relevant tax which arises due to an increase in tax rates or changes to the legislation prevailing at the time of the Listing; and (iii) any claim to the extent that provision for deferred tax on the revaluation surplus has been made in the calculation of the adjusted net tangible asset value of Lai Fung as set out in Lai Fung’s prospectus dated 18 November 1997.

After taking into account the Property Interests currently held by Lai Fung as at 31 July 2015 which are covered under the Lai Fung Tax Indemnity Deed and the prevailing tax rates and legislation governing PRC income tax and LAT, the total amount of tax indemnity given by the Company is estimated to be HK$1,350,000,000 (2014: HK$1,350,000,000).

After taking into account the plans and the status of the Property Interests held by Lai Fung as at 31 July 2015 and 31 July 2014 which are covered under the Lai Fung Tax Indemnity Deed and the prevailing tax rates and legislation governing PRC income tax and LAT, the Group recorded an aggregate provision for tax indemnity of HK$729,387,000. During the year ended 31 July 2014, the Group recognised an additional provision of tax indemnity of HK$139,017,000 in the consolidated income statement. Besides, the Group settled HK$24,302,000 of the tax indemnity upon receiving request from Lai Fung during the year ended 31 July 2014.

• 8 -

6. PROFIT FROM OPERATING ACTIVITIES

(a) The Group’s profit from operating activities is arrived at after charging:

	2015	2014
	HK$’000	HK$’000
Cost of inventories sold	80,132	74,980
Cost of completed properties sold	198,892	638,906
Depreciation#	48,613	34,487
Amortisation of prepaid land lease payments*	1,027	1,027
Loss on disposal of items of property, plant and equipment*	-	2,125
Fair value loss on a listed equity investment at fair value through profit or loss*	- _ _	2,796 _ _

• Depreciation charge of approximately HK$44,352,000 (2014: HK$31,942,000) for property, plant and equipment is included in “other operating expenses, net” on the consolidated income statement.

• These items are included in “other operating expenses, net” on the consolidated income statement.

• (b) Other than those mentioned in note 6(a) above, “other operating expenses, net” also include service fee for operation of a club of approximately HK$67,296,000 (2014: HK$56,026,000).

7. FINANCE COSTS

	2015	2014
	HK$’000	HK$’000
Interest on bank borrowings	92,694	66,635
Interest on guaranteed notes	158,825	158,771
Bank financing charges	22,727 __	18,544 __
	274,246	243,950
Less: Amount capitalised in a hotel development project	(72,000)	-
Amount capitalised in properties under development for sale	(22,230) __	(1,227) __
	180,016 _ _	242,723 _ _

8. DISCOUNT ON ACQUISITION OF ADDITIONAL INTEREST IN AN ASSOCIATE

In the prior year, during the period from November 2013 to December 2013, the Group acquired 1.33% additional interest in eSun Holdings Limited (“ eSun ”) from the public shareholders at a cost of approximately HK$18,545,000 and the Group's interest in eSun was increased from 39.93% to 41.26%. In May 2014, the Group further acquired 0.66% additional interest in eSun from the public shareholders at a cost of approximately HK$7,635,000 and the Group’s interest in eSun was increased from 41.26% to 41.92%. Discount on acquisition of approximately HK$150,660,000 arose from these acquisitions for the year ended 31 July 2014.

• 9 -

9. TAX

Hong Kong profits tax has been provided at the rate of 16.5% (2014: 16.5%) on the estimated assessable profits arising in Hong Kong during the year.

Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the places in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

		2015	2014
		HK$’000	HK$’000
	Current tax
	Hong Kong	44,321	64,149
	Overseas	23,135	18,199
		__	__
		67,456	82,348
	Deferred tax	9,400	5,565
	Prior years’ (overprovision)/underprovision
	Hong Kong	(35)	216
	Overseas	2,576	2,360
		__	__
		2,541	2,576
		__	__
	Tax charge for the year	79,397 __	90,489 __
		__	__
**10. **	DIVIDEND
		2015	2014
		HK$’000	HK$’000
	Proposed final – HK0.25 cent (2014: HK0.25 cent) per ordinary share	50,236 _ _	50,157 _ _

The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the forthcoming annual general meeting.

11. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY

	2015	2014
	HK$’000	HK$’000
Earnings
Earnings for the purpose of basic earnings per share	2,018,262	1,478,730
Effect of dilutive potential ordinary shares arising from adjustment to the
share of profit of an associate based on dilution of its earnings per share	(90) __	(300) __
Earnings for the purpose of diluted earnings per share	2,018,172 _ _	1,478,430 _ _

• 10 -

11. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY (continued)

	’000	’000
Number of shares
Weighted average number of ordinary shares for the purpose of basic
earnings per share	20,078,670	20,062,893
Effect of dilutive potential ordinary shares arising from share options	82,892 __	90,749 __
Weighted average number of ordinary shares for the purpose of diluted
earnings per share	20,161,562 _ _	20,153,642 _ _

12. PROPERTY, PLANT AND EQUIPMENT

During the current year, increase in property, plant and equipment (net of depreciation and disposals) of approximately HK$1,826 million mainly includes additions to a hotel development project as disclosed in the Company’s circular dated 20 June 2014 amounting to approximately HK$1,844 million.

13. DEBTORS, DEPOSITS PAID AND OTHER RECEIVABLES

The Group maintains various credit policies for different business operations in accordance with business practices and market conditions in which the respective subsidiaries operate. Sales proceeds receivable from the sale of properties are settled in accordance with the terms of the respective contracts. Rent and related charges in respect of the leasing of properties are receivable from tenants, and are normally payable in advance with rental deposits received in accordance with the terms of the tenancy agreements. Hotel and restaurant charges are mainly settled by customers on a cash basis except for those corporate clients who maintain credit accounts with the respective subsidiaries, the settlement of which is in accordance with the respective agreements.

An ageing analysis of the trade debtors, based on the payment due date, as at the end of the reporting period is as follows:

	2015	2014
	HK$’000	HK$’000
Trade debtors:
Not yet due or less than 30 days past due	7,257	8,278
31 – 60 days past due	1,358	1,397
61 – 90 days past due	403	201
Over 90 days past due	2,088 __	1,059 __
	11,106	10,935
Other receivables	50,112	61,283
Deposits paid and prepayments	114,454 __	61,814 __
	175,672 _ _	134,032 _ _

• 11 -

14. CREDITORS, DEPOSITS RECEIVED AND ACCRUALS

An ageing analysis of the trade creditors, based on the payment due date, as at the end of the reporting period is as follows:

	2015	2014
	HK$’000	HK$’000
Trade creditors:
Not yet due or less than 30 days past due	11,611	8,967
31 – 60 days past due	458	770
61 – 90 days past due	22	199
Over 90 days past due	479 __	174 __
	12,570	10,110
Other payables and accruals	194,668	158,050
Deposits received and other provisions	202,063 __	131,563 __
	409,301 _ _	299,723 _ _

15. COMPARATIVE AMOUNTS

Certain comparative amounts have been reclassified to conform with the current year’s presentation.

• 12 -

FINAL DIVIDEND

The Directors have resolved to recommend the payment of a final dividend of HK0.25 cent per share (2014: HK0.25 cent per share), amounting to HK$50,236,000 for the financial year ended 31 July 2015 to shareholders of the Company (“ Shareholders ”) whose names appear on the Register of Members of the Company on Tuesday, 22 December 2015 subject to the approval of Shareholders at the forthcoming annual general meeting of the Company to be held on Friday, 11 December 2015 (“ AGM ”).

No interim dividend was declared during the year (2014: Nil).

The Directors propose that shareholders be given the option to receive the final dividend in new shares in lieu of cash. The scrip dividend proposal is subject to: (1) the approval of the proposed final dividend at the AGM; and (2) The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) granting the listing of and permission to deal in the new shares to be issued pursuant to this proposal.

A circular containing details of the scrip dividend proposal will be despatched to shareholders together with the form of election for scrip dividend on or about Wednesday, 30 December 2015. It is expected that the final dividend warrants and share certificates for the scrip dividend will be despatched to Shareholders on or about Friday, 29 January 2016.

ANNUAL GENERAL MEETING

The AGM of the Company will be held on Friday, 11 December 2015. Notice of the AGM together with proxy form and the Company’s Annual Report for the year ended 31 July 2015 will be published on the respective websites of the Stock Exchange and the Company and despatched to Shareholders in early November 2015.

CLOSURE OF REGISTER OF MEMBERS

In order to be eligible to attend and vote at the AGM, Shareholders should ensure that all transfers accompanied by the relevant share certificates are lodged with the Company’s share registrar, Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration no later than 4:30 p.m. on Tuesday, 8 December 2015.

The proposed final dividend is subject to the approval of the Shareholders at the AGM. The record date for the proposed final dividend is at the close of business on Tuesday, 22 December 2015. For determining the entitlement to the proposed final dividend, the register of members of the Company will be closed from Monday, 21 December 2015 to Tuesday, 22 December 2015, both dates inclusive, during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend, all relevant transfer document(s) and share certificate(s) must be lodged with the Company’s share registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Friday, 18 December 2015.

• 13 -

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW AND OUTLOOK

The global economies continue to tread on a delicate recovery path with few bright spots. Economic fundamentals remain delicate despite continuous support from central banks around the world. Geopolitical tensions around the world has not subsided which further shrouds the already uncertain outlook. This backdrop combined with the slowing economy in the PRC has affected Hong Kong’s economic performance as a result.

The property sector in Hong Kong continues to perform steadily notwithstanding the challenging conditions. The retail market, particularly street level retail, has been affected negatively as seen in high profile tenants terminating their leases early. Office leasing remains robust. Low vacancy supports further rental growth despite the fear of interest rate hikes. The residential market continues to outperform, particularly for smaller units, notwithstanding the control measures implemented a couple of years ago. New launches report robust prices being achieved and arguably reflect strong underlying demand. It is very likely that these control measures, barring any unforeseen circumstances, are here to stay until land supply has caught up, which is likely to take some years notwithstanding the government’s emphasis and effort. Labour shortage in the construction industry is driving wage inflation and continues to pose a challenge on the cost management side.

The Group performed admirably against this challenging environment. The rental portfolio of approximately 1.8 million square feet generated steady rental income at high occupancy rates. Rental income increased through tenant mix adjustments, rental reversion and a full year’s contribution from the London properties. The completion of the 8 Observatory Road property in June 2015 added an attributable gross floor area (“ GFA ”) of 82,585 square feet in the prime Tsim Sha Tsui area of Hong Kong. As at the date of this announcement, approximately 44% of the floor area of the building has been leased or has offers to lease with another approximately 30% of floor area under negotiation. 3 out of 9 units of the 339 Tai Hang Road luxury residential property were sold during the year under review with another 2 units sold post year end.

The management believes it is paramount to prepare the Group for the challenges and opportunities ahead. The Group completed a series of corporate activities as part of the new strategy to improve funding sources, execution capabilities and overall coordination with the wider Lai Sun Group since refocusing the strategy in 2012. Set out below are the projects the Group secured after the implementation of the new rental focused strategy:

rental focused strategy:
		Total GFA		Expected
Date	Secured Projects	(square feet)	Use	Completion Date
Hong Kong	Development Properties
November 2012	Tseung Kwan O Project	572,852	Commercial/	Q4 2017
			Residential
April 2014	Ma Tau Kok Project	111,444	Commercial/	Q1 2018
			Residential
May 2014	The Hong Kong Ocean	366,000	Hotel	Q4 2017
	Park Marriott Hotel
	(“Ocean Hotel”)
September 2015	Sai Wan Ho Street	64,303	Commercial/	2020
	Project		Residential
London, United Kingdom	Investment Properties
April 2014	107-112 Leadenhall	146,606	Office	N/A
	Street
November 2014	100 Leadenhall Street	177,700	Office	N/A

• 14 -

The Group’s strong cash position of HK$1,253.5 million of cash on hand with a net debt to equity ratio of 25.3% as at 31 July 2015 provides the Group with full confidence and the means to review opportunities more actively. However, the Group will continue its prudent and flexible approach in growing the landbank and managing its financial position.

OVERVIEW OF FINAL RESULTS

For the year ended 31 July 2015, the Group recorded turnover of HK$1,541.7 million (2014: HK$2,109.6 million) and a gross profit of HK$895.6 million (2014: HK$1,057.9 million), representing a decrease of approximately 26.9% and 15.3%, respectively over last year. The decrease in turnover and gross profit was primarily due to the sale of over 90% of the residential units in Ocean One being completed prior to 31 July 2014 and less properties being available for sale in 2015. Set out below is the turnover by segment:

	**For the year **	ended 31 July	Difference (HK$million)	% change
	2015 (HK$ million)	2014 (HK$million)
Propertyinvestment	655.5	502.3	153.2	30.5%
Property development and sales	277.8	1,046.9	-769.1	-73.5%
Restaurant operation	201.7	167.1	34.6	20.7%
Hotel operation and others	406.7	393.3	13.4	3.4%
Total:	1,541.7	2,109.6	-567.9	-26.9%

Net profit attributable to owners of the Company was approximately HK$2,018.3 million (2014: HK$1,478.7 million), representing an increase of approximately 36.5% over last year. The substantial increase is a mix of lower profit before revaluation of the Group’s investment properties and a substantial increase in revaluation of the Group’s investment properties during the year under review. Excluding the effect of property revaluations, net profit attributable to owners of the Company was approximately HK$290.6 million (2014: HK$333.2 million). Basic earnings per share including and excluding the effect of property revaluations was HK$0.101 (2014: HK$0.074) and HK$0.014 (2014: HK$0.017), respectively.

	For the year	ended 31 July
Profit attributable to owners of the Company (HK$ million)	2015	2014
Reported	2,018.3	1,478.7
Less: Adjustments in respect of revaluation gains of investment
properties held by
- the Company and subsidiaries	(1,289.3)	(928.8)
- associates andjoint ventures	(438.4)	(216.7)
Netprofit after tax excludingrevaluationgains of investmentproperties	290.6	333.2

Equity attributable to owners of the Company as at 31 July 2015 amounted to HK$22,662.5 million, up from HK$20,774.5 million as at 31 July 2014. Net asset value per share attributable to owners of the Company increased by 9% to HK$1.128 per share as at 31 July 2015 from HK$1.035 per share as at 31 July 2014.

• 15 -

PROPERTY PORTFOLIO COMPOSITION

As at 31 July 2015, the Group maintained a property portfolio with attributable GFA of approximately 2.6 million square feet. Approximate attributable GFA (in ’000 square feet) of the Group’s major properties and number of car-parking spaces is as follows:

	Commercial /Retail (in ’000 square feet)	Office (in ’000 square feet)	Industrial (in ’000 square feet)	Residential (in ’000 square feet)	Hotel (in ’000 square feet)	Total (excluding car-parking spaces & ancillary facilities) (in ’000 square feet)	No. of car-parking spaces attributable to theGroup
Completed Properties Held for Rental1	521	1,123	59	-	-	1,703	1,010
Completed Hotel Properties	-	-	-	-	98	98	-
Properties Under Development2	74	-	-	324	366	764	201
Completed Properties Held for Sale	27	-	-	24	-	51	17
Total GFA of major properties of the Group	622	1,123	59	348	464	2,616	1,228

1. Completed and rental generating properties

2. All properties under construction

The above table does not include GFA of properties held by Lai Fung Holdings Limited (“ Lai Fung ”).

PROPERTY INVESTMENT

Rental Income

During the year under review, the Group’s rental operations recorded a turnover of HK$655.5 million (2014: HK$502.3 million), representing a 30.5% increase over last year. The increase is primarily due to the full-year contributions from newly acquired rental properties in London, as well as continued management of tenant mix and rental reversion at major investment properties during the year under review.

The Group wholly owns three major investment properties in Hong Kong, namely Cheung Sha Wan Plaza, Causeway Bay Plaza 2 and Lai Sun Commercial Centre. The 50:50 joint venture with Henderson Land at 8 Observatory Road, Kowloon was completed in June 2015 and is expected to contribute to the Group’s results in the coming financial year.

• 16 -

Breakdown of rental turnover by major investment properties is as follows:

	For the year ended 31 July	For the year ended 31 July	% Change	Year end occupancy (%)
	2015 (HK$ million)	2014 (HK$million)
Hong Kong
Cheung Sha Wan Plaza (includingcar-parkingspaces)	293.9	275.3	6.8	98.6
Causeway Bay Plaza 2 (includingcar-parkingspaces)	170.9	153.9	11.0	99.7
Lai Sun Commercial Centre (includingcar-parkingspaces)	56.4	50.2	12.4	97.8
Subtotal:	521.2	479.4	8.7
**London, United Kingdom **
36Queen Street	26.7	3.5	662.9	100.0
107-112 Leadenhall Street	53.7	8.4	539.3	100.0
100 Leadenhall Street	42.5	-	N/A	100.0
Subtotal:	122.9	11.9	932.8
Others	11.4	11.0	3.6
Total:	655.5	502.3	30.5
Rental proceeds from joint venture project
Hong Kong
CCB Tower(50% basis)	113.6	108.0	5.2	99.0

• 17 -

Breakdown of turnover by usage of our major rental properties is as follows:

	**For **	**the year ended 31 **	July 2015	For theyear ended 31 July2014	For theyear ended 31 July2014	For theyear ended 31 July2014
	Group interest	Turnover (HK$ million)	Total GFA (square feet)	Group interest	Turnover (HK$million)	Total GFA (square feet)
Hong Kong
CheungSha Wan Plaza	100%			100%
Commercial		158.1	233,807		151.0	233,807
Office		118.5	409,896		108.0	409,896
Car-parkingspaces		17.3	N/A		16.3	N/A
Subtotal:		293.9	643,703		275.3	643,703
CausewayBayPlaza 2	100%			100%
Commercial		114.1	109,770		101.0	109,770
Office		52.1	96,268		48.2	96,268
Car-parkingspaces		4.7	N/A		4.7	N/A
Subtotal:		170.9	206,038		153.9	206,038
Lai Sun Commercial Centre	100%			100%
Commercial		33.4	95,063		31.0	95,063
Office		7.7	74,181		6.3	74,181
Car-parkingspaces		15.3	N/A		12.9	N/A
Subtotal:		56.4	169,244		50.2	169,244
Others		11.4	59,302*		11.0	59,302_*_
Subtotal:		532.6	1,078,287		490.4	1,078,287
**London, United Kingdom **
36Queen Street	100%			100%
Office		26.7	60,816		3.5	60,816
107-112 Leadenhall Street	100%			100%
Office		53.7	146,606		8.4	146,606
100 Leadenhall Street	100%			-
Office		42.5	177,700		-	-
Subtotal:		122.9	385,122		11.9	207,422
Total:		655.5	1,463,409		502.3	1,285,709
Joint Venture Project**
Hong Kong
CCB Tower_#_ (50% basis)	50%			50%
Office		113.6	114,555_##_		108.0	114,555_##_

*

Excluding 10% interest in AIA Central ** Excluding 50:50 joint venture project at 8 Observatory Road, Kowloon, which was completed in June 2015

# CCB Tower is a joint venture project with China Construction Bank Corporation (“ CCB ”) in which each of the Group and CCB has an effective 50% interest. For the year ended 31 July 2015, the rental proceeds recorded by the joint venture is HK$227.2 million.

##

Referring to GFA attributable to the Group. The total GFA of CCB Tower is 229,110 square feet.

Review of major investment properties

Hong Kong Properties

Cheung Sha Wan Plaza

The asset comprises of a 8-storey and a 7-storey office towers erected on top of a retail podium which was completed in 1989. It is located on top of the Lai Chi Kok MTR station with a total GFA of 643,703 square feet (excluding car-parking spaces). The arcade is positioned to serve the local communities nearby with major banks and recognised restaurants chains as the key tenants.

• 18 -

Causeway Bay Plaza 2

The asset comprises of a 28-storey commercial/office building with car-parking facilities at basement levels which was completed in 1992. It is located at the heart of Causeway Bay with a total GFA of 206,038 square feet (excluding car-parking spaces). Key tenants include a HSBC branch and commercial offices and major restaurants.

Lai Sun Commercial Centre

The asset comprises a 13-storey commercial/carpark complex completed in 1987. It is located near the Lai Chi Kok MTR station with a total GFA of 169,244 square feet (excluding car-parking spaces).

8 Observatory Road

The Group has a 50:50 interest with Henderson Land in this joint development project at Observatory Road, Kowloon. The property is a 19-storey commercial building with a total GFA of 165,170 square feet (excluding car-parking spaces). The property was completed in June 2015 and as at the date of this announcement, approximately 44% of the floor area of the building has been leased or has offers to lease with another approximately 30% of floor area under negotiation.

CCB Tower, 3 Connaught Road Central

The Group has a 50:50 interest with CCB in the joint redevelopment project of the former Ritz-Carlton Hotel in Central. This 27-storey office tower is a landmark property in Central featuring underground access to the Central MTR station. The property has a total GFA of 229,110 square feet (excluding car-parking spaces). CCB Tower was completed in 2012 and added 114,555 square feet of attributable GFA to our portfolio. CCB Tower is now fully leased out with 15 floors of the office floors and 2 banking hall floors leased to CCB for its Hong Kong operations.

Overseas Properties

36 Queen Street, London EC4, United Kingdom

In February 2011, the Group acquired an office building in the City in central London located at 36 Queen Street. Completed in 1986, it comprises 60,816 square feet of office accommodation extending over basement, ground and six upper floors. Comprehensive refurbishment and renovation work has been completed and the building is currently fully leased out.

107-112 Leadenhall Street, London EC3, United Kingdom

In April 2014, the Group acquired a property located at the core of the insurance district in the City of London, surrounded by 30 St Mary Axe (commonly known as the Gherkin), Lloyd’s of London and the Willis Building at 51 Lime Street. It is a freehold commercial property housing commercial, offices and retail space. The building comprises 146,606 square feet of office accommodation extending over basement, ground, mezzanine and seven upper floors. The building is currently fully leased out.

100 Leadenhall Street, London EC3, United Kingdom

Following the acquisition of 107-112 Leadenhall Street in April 2014, the Group announced the acquisition of 100 Leadenhall Street in November 2014 which was completed in January 2015. This property comprises a basement, a lower ground floor, ground floor and nine upper floors and provides 177,700 square feet of offices and ancillary accommodation. The property is currently fully let to ACE Global Markets Limited.

• 19 -

PROPERTY DEVELOPMENT

For the year ended 31 July 2015, recognised turnover from sales of properties was HK$277.8 million (2014: HK$1,046.9 million), representing a decrease of 73.5% over last year. The significant decrease was due to the sale of over 90% of the residential units in Ocean One being completed prior to 31 July 2014 and less properties being available for sale in 2015.

Review of major projects for sale

Ocean One, 6 Shung Shun Street, Yau Tong

The Group wholly owns this development project, namely “Ocean One” located at No. 6 Shung Shun Street, Yau Tong, Kowloon. This property is a residential-cum-commercial property with a total GFA of about 122,000 square feet (excluding car-parking spaces) or 124 residential units and 2 commercial units. The total development cost (including land cost and lease modification premium) is about HK$730 million.

During the year under review, we have completed the sale of 7 residential units and 14 car-parking spaces with total sales proceeds of HK$81.3 million recognised during the year under review and the average selling price based on saleable area is approximately HK$13,700 per square foot as at 31 July 2015. All units have been sold other than two shops and several car-parking spaces.

339 Tai Hang Road, Hong Kong

The Group wholly owns the development project located at 339 Tai Hang Road, Hong Kong. The development project is a luxury residential property with a total GFA of about 30,400 square feet (excluding car-parking spaces). The total development cost (including land cost and lease modification premium) is about HK$670 million.

The property is now open for sale. As at 31 July 2015, we have completed the sale of 3 residential units with total saleable area of 5,420 square feet and total sales proceeds of HK$196.5 million recognised during the year under review and the average selling price based on saleable area is approximately HK$36,300 per square foot as at 31 July 2015. We further sold 2 units post year end.

Review of major projects under development

Area 68A2, Tseung Kwan O

In November 2012, the Group successfully tendered for and secured a site located at Area 68A2, Tseung Kwan O, New Territories, through a 50% joint venture vehicle. The lot has an area of 229,338 square feet with a total GFA of 572,852 square feet split into 458,582 square feet for residential use and 114,270 square feet for commercial use. The current intention is to develop the lot primarily into a residential project for sale, comprising residential towers as well as houses. Completion is expected to be in the fourth quarter of 2017.

Ocean Hotel project

The Group was named the most preferred proponent by Ocean Park for the Ocean Hotel project in October 2013 and was officially awarded the project in May 2014. The Ocean Hotel, to be operated by the Marriott group, will provide a total of 471 rooms and add 366,000 square feet of attributable rental space to the existing rental portfolio of the Group of approximately 1.8 million square feet. The total development cost is estimated to be approximately HK$4.4 billion. Completion is expected to be in the fourth quarter of 2017.

• 20 -

Ma Tau Kok project

Since securing the Tseung Kwan O site in November 2012, the Group participated in a number of government tenders. Other than the Ocean Hotel project, the Group was successful in April 2014 in its bid for the development right to the San Shan Road/Pau Chung Street project from the Urban Renewal Authority in Ma Tau Kok, Kowloon, Hong Kong. The lot has an area of 12,599 square feet with a total GFA of 111,444 square feet split into 94,486 square feet for residential use and 16,958 square feet for commercial use. The total development cost is estimated to be approximately HK$1 billion and completion is expected to be in the first quarter of 2018.

Sai Wan Ho Street project

The Group was successful in September 2015 in its bid for the development rights to the Sai Wan Ho project from the Urban Renewal Authority in Shau Kei Wan, Hong Kong. The project site covers an area of 7,642 square feet. Upon completion, it is planned to provide about 140 residential units with a total residential GFA of 57,523 square feet and 6,780 square feet of commercial GFA. The total development cost is estimated to be approximately HK$0.9 billion and completion is expected to be in 2020.

RESTAURANT OPERATION

For the year ended 31 July 2015, the restaurant operations contributed HK$201.7 million to the Group’s turnover (2014: HK$167.1 million), representing an increase of approximately 20.7% from last year. The contribution from the restaurants segment was boosted by a full year’s contribution from the newly added restaurants, including CIAK-In The Kitchen and China Tang Hong Kong at Landmark in Central, Hong Kong which had a grand opening in December 2013.

As at 31 July 2015, the restaurant operation includes the Group’s interests in 12 restaurants in Hong Kong and Mainland China, including the Michelin 3-star Italian restaurant 8[½] Otto e Mezzo BOMBANA Hong Kong, Michelin 2-star Japanese restaurant Wagyu Takumi, Michelin 1-star Italian restaurant CIAK-In The Kitchen at Landmark, Michelin 1-star Japanese restaurant Wagyu Kaiseki Den, 8[½] Otto e Mezzo BOMBANA Shanghai, Opera BOMBANA in Beijing, Gin Sai, Rozan, Kowloon Tang, Island Tang, Chiu Tang, China Tang Hong Kong at Landmark in Central, Hong Kong. Post year end, our new casual dining brand Tang[2] was opened in August 2015 at Cheung Sha Wan Plaza and we will have Beefbar in Central and Howard’s Gourmet (好酒好蔡) at CCB Tower opening in late October and early November 2015, respectively.

HOTEL OPERATION

Turnover from hotel operation was mainly derived from the Group’s operation of the Caravelle Hotel in Ho Chi Minh City, Vietnam. For the year ended 31 July 2015, the hotel operation contributed HK$384.0 million to the Group’s turnover (2014: HK$372.1 million).

Caravelle Hotel is a leading international 5-star hotel in the centre of the business, shopping and entertainment district in Vietnam. It is an elegant 24-storey tower with a mixture of French colonial and traditional Vietnamese style and has 335 superbly appointed rooms, suites, exclusive Signature Floors, Signature Lounge and a specially equipped room for the disabled. Total GFA attributable to the Group is 98,376 square feet.

The Group was awarded the hotel tender at Ocean Park in May 2014 and the Ocean Hotel, to be operated by the Marriott group, will provide a total of 471 rooms upon its completion in 2017. The Group is optimistic about the prospects of the Ocean Hotel project given the strong popularity of Ocean Park, which is underpinned by robust growth in visitor numbers to Hong Kong coinciding with its expansion.

• 21 -

The hotel operation has extensive experience in providing consultancy and management services to hotels in Mainland China, Hong Kong and other Asian countries. The division’s key strategy going forward will continue to focus on providing management services, particularly to capture opportunities arising from the developments of Lai Fung in Shanghai, Guangzhou, Zhongshan and Hengqin. The hotel division will manage Lai Fung’s serviced apartments in Shanghai and Zhongshan under the “STARR” brand. STARR Resort Residence Zhongshan soft opened in August 2013 and comprises two 16-storey blocks with 90 fully furnished serviced apartment units located in the Palm Lifestyle complex in Zhongshan Western district at Cui Sha Road, opposite to the new Zhongshan traditional Chinese medical centre. STARR Hotel Shanghai soft opened in November 2013 and is a 17-storey hotel with 239 fully furnished and equipped hotel units with kitchenette located in the Mayflower Lifestyle complex right in the heart of the Zhabei inner ring road district, within walking distance to Lines 1, 3 and 4 of the Shanghai Metro Station with easy access to major motorways.

INTERESTS IN ASSOCIATES (eSun)

As at 31 July 2015, the Group’s interest in eSun Holdings Limited (“ eSun ”) is 41.92%.

Film production and distribution, media and entertainment divisions and cinema operations demonstrated improvements across the board. Lai Fung’s results were encouraging given the challenging operating environment in the property sector in Mainland China.

The steady fundamental performance was offset by the lower revaluation gains and fair value loss on the cross currency swap of Lai Fung and led to a slight decrease in share of profit of associates amounting to HK$108.3 million (2014: HK$109.3 million).

INTERESTS IN JOINT VENTURES

During the year under review, contribution from joint ventures increased to HK$354.2 million (2014: HK$110.7 million), representing an increase of 220%. This is primarily due to stronger revaluation gain of the newly completed 8 Observatory Road project and CCB Tower.

Revaluation gains Other results Contribution from joint ventures	For the year ended 31 July
	2015 (HK$ million) 2014 (HK$million)
	282.9 37.1 71.3 73.6
	354.2 110.7

• 22 -

LIQUIDITY AND FINANCIAL RESOURCES

As at 31 July 2015, cash and bank balances and undrawn facilities held by the Group amounted to HK$1,253.5 million and HK$1,590.0 million, respectively.

The Group’s sources of funding comprise mainly internal funds generated from the Group’s business operations, loan facilities provided by banks and guaranteed notes issued to investors.

As at 31 July 2015, the Group had bank borrowings of approximately HK$4,283.2 million and guaranteed notes of approximately HK$2,703.3 million. The net debt to equity ratio expressed as a percentage of the total outstanding net debt (being the total outstanding bank borrowings and guaranteed notes less the pledged and unpledged bank balances and time deposits) to consolidated net assets attributable to owners of the Company was approximately 25.3%. The Group’s gearing excluding the London portfolio all of which had a positive carry net of financing costs was approximately 17.9%. As at 31 July 2015, the maturity profile of the bank borrowings of HK$4,283.2 million was spread over a period of less than 5 years with HK$1,012.6 million repayable within 1 year, HK$1,331.3 million repayable in the second year and HK$1,939.3 million repayable in the third to fifth years. All the Group’s borrowings carried interest on a floating rate basis except for the guaranteed notes issued in January 2013 which has a fixed rate of 5.7% per annum.

As at 31 July 2015, certain investment properties with carrying amounts of approximately HK$15,026.0 million, certain properties under development for sale of approximately HK$545.2 million and certain bank balances and time deposits with banks of approximately HK$185.5 million were pledged to banks to secure banking facilities granted to the Group. In addition, certain shares in subsidiaries held by the Group were also pledged to banks to secure loan facilities granted to the Group. Certain shares in joint ventures held by the Group were pledged to banks to secure loan facilities granted to joint ventures of the Group. The Group’s secured bank borrowings were also secured by floating charges over certain assets held by the Group.

The Group’s major assets and liabilities and transactions were denominated in Hong Kong dollars and United States dollars. Considering that Hong Kong dollars are pegged against United States dollars, the Group believes that the corresponding exposure to exchange rate risk arising from United States dollars is nominal. In addition, the Group has investments in United Kingdom with the assets and liabilities denominated in Pounds Sterling. Majority of the investments were partly financed by bank borrowings denominated in Pounds Sterling in order to minimise the net foreign exchange exposure. Other than the abovementioned, the remaining monetary assets and liabilities of the Group were denominated in Renminbi and Vietnamese Dong which were also insignificant as compared with the Group’s total assets and liabilities. No hedging instruments were employed to hedge for the foreign exchange exposure. The Group manages its foreign currency risk by closely reviewing the movement of the foreign currency rate and considers hedging significant foreign currency exposure should the need arise.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

During the year ended 31 July 2015, the Company did not redeem any of its shares listed and traded on the Stock Exchange nor did the Company or any of its subsidiaries purchase or sell any of such shares.

PROPOSED ADOPTION OF NEW SHARE OPTION SCHEME

The Company adopted a share option scheme (“ Existing Scheme ”) on 22 December 2006 and the Existing Scheme became effective on 29 December 2006 (“ Commencement Date ”). The Existing Scheme will be valid and effective for a period of 10 years commencing on the Commencement Date and will be due to expire in December 2016.

• 23 -

In order to give the Company greater flexibility to grant options at all relevant times, the Board has resolved to propose that the Existing Scheme be terminated and in place thereof, a new share option scheme (“ New Scheme ”) be adopted at the forthcoming AGM.

A circular relating to the New Scheme will be despatched to Shareholders for information together with the Annual Report in early November 2015.

CORPORATE GOVERNANCE

The Company is committed to achieving and maintaining high standards of corporate governance and has established policies and procedures for compliance with the principles and code provisions set out from time to time in the Corporate Governance Code (“ CG Code ”) contained in Appendix 14 to the Rules Governing the Listing of Securities (“ Listing Rules ”) on the Stock Exchange.

The Company has complied with all the code provisions set out in the CG Code throughout the year ended 31 July 2015 save for the deviations from code provisions A.4.1, A.5.1 and E.1.2.

Under code provision A.4.1, non-executive directors should be appointed for a specific term and subject to re-election.

None of the existing non-executive directors (“ NEDs ”, including the independent non-executive directors (“ INEDs ”)) of the Company is appointed for a specific term. However, all directors of the Company (“ Directors ”) are subject to the retirement provisions of the Articles of Association of the Company (“ Articles of Association ”), which require that the Directors for the time being shall retire from office by rotation once every three years since their last election by Shareholder and the retiring Directors are eligible for re-election. In addition, any person appointed by the board of Directors (“ Board ”) as an additional Director (including a NED) will hold office only until the next AGM and will then be eligible for re-election. Further, in line with the relevant code provision of the CG Code, each of the Directors appointed to fill a casual vacancy would/will be subject to election by the Shareholders at the first general meeting after his/her appointment. In view of these, the Board considers that such requirements are sufficient to meet the underlying objective of the said code provision A.4.1 and, therefore, does not intend to take any remedial steps in this regard.

Under code provision A.5.1, a nomination committee comprising a majority of the independent non-executive directors should be established and chaired by the chairman of the board or an independent non-executive director.

The Company has not established a nomination committee whose functions are assumed by the full Board. Potential new Directors will be recruited based on their knowledge, skills, experience and expertise and the requirements of the Company at the relevant time and candidates for the INEDs must meet the independence criterion. The process of identifying and selecting appropriate candidates for consideration and approval by the Board has been, and will continue to be, carried out by the executive Directors (“ EDs ”). As the above selection and nomination policies and procedures have already been in place and the other duties of the nomination committee as set out in the CG Code have long been performed by the full Board effectively, the Board does not consider it necessary to establish a nomination committee at the current stage.

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Under code provision E.1.2, the chairman of the board should attend the annual general meeting.

Due to other pre-arranged business commitments which must be attended to by him, Dr. Lam Kin Ngok, Peter, the Chairman, was not present at the AGM held on 9 December 2014. However, Mr. Chew Fook Aun, the Deputy Chairman and an ED present at that AGM took the chair of that AGM pursuant to Article 71 of the Articles of Association to ensure an effective communication with the Shareholders thereat.

SECURITIES TRANSACTIONS BY DIRECTORS AND DESIGNATED EMPLOYEES

The Company has adopted a Code of Practice for Securities Transactions by Directors and Designated Employees (“ Securities Code ”) on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix 10 to the Listing Rules. The Company has made specific enquiry of all Directors and they have confirmed in writing their compliance with the required standard set out in the Securities Code throughout the year ended 31 July 2015.

EMPLOYEES AND REMUNERATION POLICIES

As at 31 July 2015, the Group employed a total of approximately 1,300 employees. The Group recognises the importance of maintaining a stable staff force in its continued success. Under the Group’s existing policies, employee pay rates are maintained at competitive levels whilst promotion and salary increments are assessed on a performance-related basis. Discretionary bonuses are granted to employees based on their merit and in accordance with industry practice. Other benefits including share option scheme, mandatory provident fund scheme, free hospitalisation insurance plan, subsidised medical care and sponsorship for external education and training programmes are offered to eligible employees.

INVESTOR RELATIONS

To ensure our investors have a better understanding of the Company, our management engages in a pro-active investor relations programme. Our EDs and Investor Relations Department communicate with research analysts and institutional investors on an on-going basis and meet with research analysts and the press after our results announcements, attend major investors’ conferences and participate in international non-deal roadshows to communicate the Company’s financial performance and global business strategy.

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During the year ended 31 July 2015, the Company has met with a number of research analysts and investors, attended conferences as well as non-deal roadshows as follows:

Month Event	Organiser Location
August 2014 Investors luncheon	RHB-OSK Securities Hong Kong
October 2014 Post full year results non-deal roadshow	BNP Hong Kong
October 2014 Post full year results non-deal roadshow	DBS New York/Boston/ Washington DC/Denver/ Los Angeles/San Francisco
October 2014 Post full year results non-deal roadshow	Daiwa Paris/Zurich/London
November 2014 Post full year results non-deal roadshow	BNP Singapore
November 2014 Post full year results non-deal roadshow	DBS Sydney
December 2014 Post full year results non-deal roadshow	BNP Shanghai
December 2014 Great China Emerging Market Trends Forum 2015 (2015 年大中華暨新興產業趨勢論壇)	SinoPac Securities Taipei
January 2015 BNP Paribas Asia Pacific Property & Financial Conference	BNP Hong Kong
January 2015 The Fifth Daiwa Hong Kong Corporate Summit	Daiwa Hong Kong
March 2015 Post results non-deal roadshow	DBS Kuala Lumpur
March 2015 Post results non-deal roadshow	Daiwa Hong Kong
March 2015 Post results non-deal roadshow	DBS Singapore
April 2015 Post results non-deal roadshow	DBS New York/Toronto/ Los Angeles/San Francisco
April 2015 Post results non-deal roadshow	BNP Amsterdam/Paris/London
May 2015 Barclays Select Series: Asia Financial and Property Conference	Barclays Hong Kong
June 2015 Post results non-deal roadshow	BNP Sydney

During the year under review, the Company also had research reports published as follows:

Firm	Analyst	Publication Date
BNP	Patrick WONG, Wee Liat LEE	3 October 2014
BNP	Patrick WONG, Wee Liat LEE	16 October 2014
DBS	Allen CHAN, Jeff YAU	19 December 2014
BNP	Patrick WONG, Wee Liat LEE	26 March 2015
Daiwa	Jonas KAN	25 May 2015

The Company is keen on promoting investor relations and enhancing communication with the Shareholders and potential investors. It welcomes suggestions from investors, stakeholders and the public who may contact the Investor Relations Department by phone on (852) 2853 6116 during normal business hours, by fax at (852) 2853 6651 or by e-mail at ir@laisun.com.

REVIEW OF ANNUAL RESULTS

The audit committee of the Company (“ Audit Committee ”) currently comprises two INEDs, namely Mr. Leung Shu Yin, William (Chairman of the Audit Committee) and Mr. Lam Bing Kwan, and a NED, Dr. Lam Kin Ming. The Audit Committee has reviewed the annual results (including the audited consolidated financial statements) of the Company for the year ended 31 July 2015.

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REVIEW OF PRELIMINARY ANNOUNCEMENT OF RESULTS BY INDEPENDENT AUDITORS

The figures in respect of the Group’s results for the year ended 31 July 2015 as set out in this preliminary announcement have been agreed by the Group’s independent auditors, Ernst & Young, Certified Public Accountants (“ Ernst & Young ”) to the amounts set out in the Company’s audited consolidated financial statements for the year. The work performed by Ernst & Young in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA and consequently, no assurance has been expressed by Ernst & Young on this preliminary results announcement.

OTHER INFORMATION

The Annual Report of the Company for the year ended 31 July 2015 containing all the information required by the Listing Rules will be published on the websites of the Stock Exchange at www.hkex.com.hk and the Company at www.laisun.com and despatched to shareholders in early November 2015.

On behalf of the Board Lam Kin Ngok, Peter Chairman

Hong Kong, 15 October 2015

As at the date of this announcement, the Board comprises the following members:

Executive Directors: Dr. Lam Kin Ngok, Peter (Chairman) and Messrs. Chew Fook Aun (Deputy Chairman), Lau Shu Yan, Julius (Chief Executive Officer) and Lam Hau Yin, Lester; Non-Executive Directors: Dr. Lam Kin Ming and Madam U Po Chu; and Independent Non-Executive Messrs. Lam Bing Kwan, Leung Shu Yin, William and Ip Shu Kwan, Stephen. Directors:

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