IRC Limited - Capital/Financing Update 2016

THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this Prospectus or as to the action to be taken, you should consult your licensed securities dealer, other licensed corporation, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Lai Sun Development Company Limited, you should at once hand this Prospectus, together with the enclosed PAL and EAF, to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

A copy of each of the Prospectus Documents, having attached thereto the documents specified in the paragraph headed “Documents delivered to the Registrar of Companies” in Appendix III to this Prospectus, have been registered by the Registrar of Companies in Hong Kong as required by Section 38D of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong). The Registrar of Companies in Hong Kong and the SFC take no responsibility for the contents of any of the Prospectus Documents or any other documents referred to above.

Hong Kong Exchanges and Clearing Limited, the Stock Exchange and HKSCC take no responsibility for the contents of the Prospectus Documents, make no representation as to their 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 the Prospectus Documents.

Neither the Prospectus Documents nor any copy thereof may be released into or distributed directly or indirectly in the United States or any other jurisdiction where such release or distribution might be unlawful, except for certain limited exceptions as specifically described herein.

Distribution of the Prospectus Documents into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession the Prospectus Documents come (including, without limitation, agents, custodians, nominees and trustees) should inform themselves of and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction, for which the Company will not accept any liability. In particular, subject to certain exceptions as determined by the Company, this Prospectus, the PAL or the EAF should not be distributed, forwarded to or transmitted in, into or from the Specified Territory.

The securities described in this Prospectus have not been and will not be registered under the US Securities Act of 1933, as amended (the “ US Securities Act ”), or the laws of any state in the United States and may not be offered or sold within the United States, except in certain transactions exempt from registration under the US Securities Act and applicable state laws. There is no intention to register any portion of the Rights Shares or any securities described in this Prospectus in the United States or to conduct a public offering of the securities in the United States.

Shareholders and Beneficial Owners are referred to the important information set out in the sections headed “Qualifying Shareholders”, “Distribution of this Prospectus and the other Prospectus Documents”, “Non-Qualifying Shareholders”, “Non-Qualifying Beneficial Owners” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue” in this Prospectus. Shareholders and Beneficial Owners in the US are specifically referred to the sections of this Prospectus headed “Non-Qualifying Shareholders”, “Non-Qualifying Beneficial Owners” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”. Except as otherwise set out herein the Rights Issue described in this Prospectus is not being made to Shareholders, Beneficial Owners or investors in the Specified Territory.

Shareholders, Beneficial Owners and any other persons having possession of this Prospectus and/or any of the other Prospectus Documents are advised to inform themselves of and to observe any legal requirements applicable thereto. No person in the Specified Territory receiving this Prospectus and/or any of the other Prospectus Documents may treat the same as an offer, invitation or solicitation to subscribe for any Rights Shares unless such offer, invitation or solicitation could lawfully be made without compliance with any registration or regulatory or legal requirements in such territory, except as may be agreed to by the Company in its absolute discretion.

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RIGHTS ISSUE OF LAI SUN DEVELOPMENT COMPANY LIMITED OF 10,047,266,781 RIGHTS SHARES AT THE SUBSCRIPTION PRICE OF HK$0.092 EACH ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY TWO EXISTING SHARES HELD ON THE RECORD DATE

Underwriter of the Rights Issue

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The Rights Issue will proceed on a fully underwritten basis. It should be noted that the Underwriter may, upon giving notice in writing to the Company, terminate the Underwriting Agreement with immediate effect at any time prior to 4:00 p.m. on the Settlement Date, upon occurrence of certain events including force majeure events. These events are set out in the section headed “Termination of the Underwriting Agreement” on pages 9 to 10 of this Prospectus.

The latest time for acceptance of and payment for the Rights Shares is 4:00 p.m. on Monday, 1 February 2016. The procedures for acceptance and payment for the Rights Shares are set out in the section of this Prospectus headed “Procedures for Acceptance or Transfer” on pages 24 to 31 of this Prospectus.

18 January 2016

THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Dealings in the existing Shares and the Rights Shares in their nil-paid and fully-paid forms may be settled through CCASS established and operated by HKSCC. You should consult your licensed securities dealer, other licensed corporation, bank manager, solicitor, professional accountant or other professional adviser for details of the settlement arrangements and how such arrangements may affect your rights and interests.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in their nil-paid and fully-paid forms on the Stock Exchange, as well as compliance with the stock admission requirements of HKSCC, the Rights Shares in their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in their nil-paid and fully-paid forms on the Stock Exchange or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the “General Rules of CCASS” and the “CCASS Operational Procedures” in effect from time to time.

The Rights Issue is conditional upon the fulfilment of the conditions as set out in the section of this Prospectus headed “Conditions to the Rights Issue and the Underwriting Agreement” on pages 37 to 38 of this Prospectus.

The Rights Issue is conditional upon the Underwriting Agreement becoming unconditional and not being terminated. If the Underwriting Agreement does not become unconditional or is terminated by the Underwriter at any time prior to 4:00 p.m. on the Settlement Date, the Rights Issue will not proceed, in which case a further announcement will be made by the Company at the relevant time. Upon the giving of notice of termination, all the obligations of the Underwriter and the Company under the Underwriting Agreement shall cease and no party shall have any claim against any other for costs, damages, compensation or otherwise (save for any antecedent breaches thereof). The Shares have been dealt with on an ex-rights basis from Tuesday, 12 January 2016 and the Rights Shares are expected to be dealt with in their nil-paid form from Wednesday, 20 January 2016 to Wednesday, 27 January 2016 (both days inclusive). Such dealings will take place when the conditions of the Rights Issue remain unfulfilled. Any person dealing in the securities of the Company up to the date on which such conditions are fulfilled or waived and any person dealing in the nil-paid Rights Shares from Wednesday, 20 January 2016 to Wednesday, 27 January 2016 (being the first and last day of dealings in the nil-paid Rights Shares respectively) will accordingly bear the risk that the Rights Issue may not become unconditional and may not proceed. Any person dealing or contemplating any dealing in the securities of the Company and/or the Rights Shares in their nil-paid form during this period who is in any doubt about his or her position is recommended to consult his or her own professional adviser.

EXCEPT AS OTHERWISE SET OUT HEREIN, THE RIGHTS ISSUE DESCRIBED IN THIS PROSPECTUS IS NOT BEING MADE TO SHAREHOLDERS, BENEFICIAL OWNERS OR INVESTORS IN THE US (THE SPECIFIED TERRITORY). This Prospectus does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, nil-paid Rights Shares or fully-paid Rights Shares or to take up any entitlements to nil-paid Rights Shares or fully-paid Rights Shares in any jurisdiction in which such an offer or solicitation is unlawful. None of the nil-paid Rights Shares, the fully-paid Rights Shares, this Prospectus, the PAL or the EAF will be registered under the securities laws of any jurisdiction outside Hong Kong and none of the nil-paid Rights Shares, the fully-paid Rights Shares, this Prospectus, the PAL or the EAF will qualify for distribution under any of the relevant securities laws of any jurisdiction outside Hong Kong (other than pursuant to any applicable exceptions as agreed by the Company). Accordingly, the nil-paid Rights Shares and the fully-paid Rights Shares may not be offered, sold, pledged, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, into or within any jurisdiction outside Hong Kong (other than pursuant to any applicable exceptions as agreed by the Company).

Shareholders with registered addresses in any jurisdiction outside Hong Kong and Beneficial Owners who are residents of any jurisdiction outside Hong Kong are referred to the sections of this Prospectus headed “Non-Qualifying Shareholders” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”.

Each person acquiring the nil-paid Rights Shares and/or Rights Shares under the Rights Issue will be required to confirm, or be deemed by his acquisition of the nil-paid Rights Shares and/or Rights Shares to confirm, that he is aware of the restrictions on offers and sales of the nil-paid Rights Shares and/or Rights Shares described in this Prospectus.

Notice relating to investors in Canada

With respect to Canada, Rights Shares are only being offered and may only be purchased by existing shareholders of the Company that complete and return the “CanadianResident Investor Representation Letter” (the Form of which is included at Appendix V) to the Company by the deadline set out therein. The representations therein included that the purchaser is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions , and, if required, that the purchaser has also delivered to the Company an executed “Risk Acknowledgement Form” in the form set out in the Canadian-Resident Investor Representation Letter.

Notice relating to investors in Japan

This Prospectus does not constitute an offer of, or the solicitation of an offer to buy or subscribe for, Shares or the nil-paid Rights Shares in any jurisdiction in which such offer or solicitation is unlawful. Each of the Shares and the nil-paid Rights Shares has not been and will not be registered or subject to any filing requirements under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended) (the “FIEA”) and may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of a resident in Japan, except in each case pursuant to an exemption from the registration, filing or any other requirements under the FIEA and otherwise in compliance with all applicable laws, rules, regulations and governmental guidelines of Japan. Notice relating to investors in the Netherlands

No offer of the Rights Issue is made to the public in the Netherlands.

Notice relating to investors in the US

This Prospectus may not be circulated, distributed, forwarded, delivered or redistributed, electronically or otherwise, to persons within the US, and may not be relied upon as a basis for any investment decision or for any other purpose by any person within the US, save as provided below.

These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the US. The Rights Shares in their nil-paid and fully-paid forms have not been and will not be registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the US and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the US except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the US. The Rights Shares in both nil-paid and fully-paid forms, the Prospectus, the PAL and the EAF have not been approved or disapproved by the US Securities and Exchange Commission, any state’s securities commission in the US or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Rights Shares in both nil-paid and fully-paid forms, the PAL and the EAF or the accuracy or adequacy of this Prospectus. There will be no public offer of these securities in the US. The Rights Shares in both nil-paid and fully-paid forms (1) are being offered and sold in offshore transactions in reliance on Regulation S under the US Securities Act, and (2) may be offered and sold in the US to persons whom the Company reasonably believes to be QIBs and who have provided to the Company a signed investor representation letter in the form set out in Appendix IV to this Prospectus, in reliance on the exemption from the registration requirements of the US Securities Act under Section 4(a)(2) thereof or otherwise pursuant to transactions exempted from such registration requirements.

The Rights Shares offered outside the US are being offered in reliance on Regulation S under the US Securities Act. Each purchaser or subscriber of Rights Shares being offered and sold the Rights Shares outside the US will be deemed to have represented and agreed, among other things, that the purchaser or subscriber is acquiring the Rights Shares in an offshore transaction meeting the requirements of Regulation S under the US Securities Act.

In addition, until 40 days after the posting date of the Prospectus Documents, any offer, sale or transfer of the Rights Shares within the US by a broker/dealer (whether or not participating in the Rights Issue) may violate the registration requirements of the US Securities Act.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA 421-B”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

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THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Enforceability of Judgments

The Company is a public company incorporated under the laws of Hong Kong. Most of the members of the Board and most of the Company’s employees are citizens or residents of countries other than the US. A substantial portion of the assets of such persons and all or substantially all the Company’s assets are located outside the US. As a result, it may not be possible for investors to effect service of process within the US upon such persons or upon the Company, or to enforce judgments obtained in US courts, including judgments predicated upon civil liabilities under the securities laws of the US or any state or territory within the US. In addition, there may be substantial doubt as to the enforceability, in Hong Kong, of original actions or actions for enforcement based on the federal securities laws of the US or judgments of US courts, including judgments predicated upon the civil liability provisions of the securities laws of the US.

Forward-Looking Statements

All statements in this Prospectus other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements may be identified by the use of words such as “might”, “may”, “could”, “would”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “seek”, “continue”, “illustration”, “projection” or similar expressions and the negative thereof. Forward-looking statements in this Prospectus include, without limitation, statements in respect of the Group’s business strategies, product offerings, market position, competition, financial prospects, performance, liquidity and capital resources, as well as statements regarding trends in the relevant industries and markets in which the Group operates, technological advances, financial and economic developments, legal and regulatory changes and their interpretation and enforcement.

The forward-looking statements in this Prospectus are based on management’s present expectations about future events. Management’s present expectations reflect numerous assumptions regarding the Group’s strategy, operations, industry, developments in the credit and other financial markets and trading environment. By their nature, they are subject to known and unknown risks and uncertainties, which could cause actual results and future events to differ materially from those implied or expressed by forwardlooking statements. Should one or more of these risks or uncertainties materialise, or should any assumptions underlying forward-looking statements prove to be incorrect, the Group’s actual results could differ materially from those expressed or implied by forward-looking statements. Additional risks not known to the Group or that the Group does not currently consider material could also cause the events and trends discussed in this Prospectus not to occur, and the estimates, illustrations and projections of financial performance not to be realised.

Prospective investors are cautioned that forward-looking statements speak only as at the date of publication of the Prospectus. Except as required by applicable law, the Group does not undertake, and expressly disclaims, any duty to revise any forward-looking statement in this Prospectus, be it as a result of new information, future events or otherwise.

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			PAGE
DEFINITIONS...........................................................................................................			1
SUMMARY OF THE		RIGHTS ISSUE.....................................................................	7
TERMINATION OF THE UNDERWRITING AGREEMENT...............................			9
EXPECTED TIMETABLE........................................................................................			11
LETTER FROM THE BOARD.................................................................................			13
APPENDIX I	–	FINANCIAL INFORMATION OF THE GROUP...............	44
APPENDIX II	–	UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE GROUP..................................	49
APPENDIX III	–	GENERAL INFORMATION................................................	54
APPENDIX IV	–	FORM OF LETTER OF REPRESENTATIONS
		FOR US PERSONS............................................................	74
APPENDIX V	–	FORM OF CANADIAN – RESIDENT
		INVESTOR REPRESENTATION LETTER....................	82

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DEFINITIONS

In this Prospectus, unless the context otherwise specifies, the following expressions shall have the following meanings:

“Application Forms” collectively, the PAL(s) and the EAF(s);
“associate(s)” has the meaning ascribed to it under the Listing Rules;
“Beneficial Owner” any beneficial owner of Shares whose Shares are registered in the name of a Registered Owner;
“Board” the board of Directors;
“Business Day” any weekday (other than a public holiday or a day on which a tropical cyclone warning signal No. 8 or above or a black rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 4:00 p.m.) on which banks generally are open for business in Hong Kong;
“CCASS” the Central Clearing and Settlement System established and operated by HKSCC;
“CCASS Participant” a person admitted by HKSCC as a participant of CCASS;
“Committed Shares” the 5,212,849,676 Rights Shares to be provisionally allotted to the Undertaking Shareholders;
“Companies Ordinance” the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Chapter 32 of the Laws of Hong Kong), as amended or supplemented from time to time;
“Company” or “LSD” Lai Sun Development Company Limited (麗新發展有限公司), a company incorporated in Hong Kong with limited liability, the issued Shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 488);
“connected person(s)” has the same meaning ascribed thereto in the Rule 1.01 of the Listing Rules;
“controlling shareholder” has the same meaning ascribed thereto in the Rule 1.01 of the Listing Rules;
“Directors”

the directors of the Company;

“Dr. Lam”
Dr. Lam Kin Ngok, Peter, the chairman of the Company and the deputy chairman of LSG;

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DEFINITIONS

“EAF(s)” the excess application form(s) to be issued to the Qualifying Shareholders in respect of applications for excess Rights Shares;
“eSun” eSun Holdings Limited (豐德麗控股有限公司), an exempted company incorporated in Bermuda with limited liability, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 571);
“Group” the Company and its subsidiaries;
“HK$” Hong Kong dollar(s), the lawful currency of Hong Kong; “HKSCC” Hong Kong Securities Clearing Company Limited;
“Hong Kong” the Hong Kong Special Administrative Region of the PRC;
“Intermediary” in relation to a Beneficial Owner whose Shares are deposited in CCASS and registered in the name of HKSCC Nominees Limited, means the Beneficial Owner’s broker, custodian, nominee or other relevant person who is a CCASS Participant or who has deposited the Beneficial Owner’s Shares with a CCASS Participant;
“Investor Participant” a person admitted to participate in CCASS as an “Investor Participant” as defined in the General Rules of CCASS and the CCASS Operational Procedures;
“Joint Announcement” the joint announcement issued by the Company and LSG dated 17 November 2015;
“Lai Fung” Lai Fung Holdings Limited ( 麗豐控股有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed and traded on the Main Board of Stock Exchange (Stock Code: 1125);
“Last Trading Day” Tuesday, 17 November 2015, being the last trading day of the Shares on the Stock Exchange immediately prior to the publication of the Joint Announcement;
“Latest Acceptance Date” Monday, 1 February 2016, being the last day for acceptance and payment of the Rights Shares, or such other date as the Company and the Underwriter may agree in writing;

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DEFINITIONS

“Latest Practicable Date”
Wednesday, 13 January 2016, being the latest practicable date prior to the printing of this Prospectus for the purposes of ascertaining certain information contained in this Prospectus;
“latest time for acceptance”
4:00 p.m. on the Latest Acceptance Date;
“Latest Time for Termination”
4:00 p.m. on the fourth Business Day after the latest time for acceptance or such later date as the Company and the Underwriter may agree in writing;
“Listing Committee”
has the same meaning ascribed thereto in Rule 1.01 of the Listing Rules;
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;
“LSG” or “Underwriter”
Lai Sun Garment (International) Limited (麗新製衣國際有限公司), a company incorporated in Hong Kong with limited liability, also the controlling shareholder of the Company, the issued shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 191), and is the ultimate holding company of the Company;
“LSG GM”
the general meeting of LSG held on 8 January 2016 whereby the shareholders of LSG approved the Proposed Subscription and matters incidental thereto;
“LSG Subsidiaries”
Joy Mind Limited, a company incorporated in Hong Kong with limited liability, and Zimba International Limited, a company incorporated in the British Virgin Islands with limited liability, both being wholly-owned subsidiaries of LSG and holding 1,027,854,093 and 7,366,666,666 Shares (respectively) as at the Latest Practicable Date;
“Non-Qualifying Shareholders”
the Overseas Shareholders to whom the Directors, after making relevant enquiries, consider it necessary or expedient not to offer the Rights Shares on account of either the legal restrictions under the laws of the relevant jurisdiction or the requirements of the relevant regulatory body or stock exchange in that jurisdiction;
“Overseas Shareholder(s)”
the Shareholder(s) whose name(s) appear(s) on the register of members of the Company as at 5:00 p.m. on the Record Date and whose address(es) as shown on such register is/are outside Hong Kong;

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DEFINITIONS

“PAL(s)” the provisional allotment letter(s) to be issued to the Qualifying Shareholders in respect of their assured entitlements under the Rights Issue;
“Percentage Ratio(s)” the percentage ratio(s) as set out in Rule 14.07 of the Listing Rules to be applied for determining the classification of a transaction;
“Posting Date” Monday, 18 January 2016 or such other date as the Underwriter may agree in writing with the Company for the despatch of the Prospectus Documents;
“PRC” the People’s Republic of China which, for the purpose of this Prospectus, excludes Hong Kong, the Macau Special Administrative Region and Taiwan;
“Proposed Subscription” the proposed subscription(s) by LSG and the LSG Subsidiaries in respect of (i) the Committed Shares pursuant to the Undertaking; (ii) further Rights Shares by way of EAFs; and/or (iii) the Untaken Shares;
“Prospectus” this prospectus;
“Prospectus Documents” the Prospectus, PAL(s) and EAF(s);
“QIB(s)” “qualified institutional buyers” within the meaning of Rule 144A of the US Securities Act;
“Qualifying Shareholders” the Shareholders whose names appear on the register of members of the Company as at 5:00 p.m. on the Record Date, other than the Non-Qualifying Shareholders;
“Record Date” Friday, 15 January 2016, being the record date to determine entitlements to the Rights Issue (or such other date as the Underwriter may agree in writing with the Company);
“Registered Owner” in respect of a Beneficial Owner, means a nominee, trustee, depository or any other authorised custodian or third party which is the registered holder in the register of members of the Company of the Shares in respect of which the Beneficial Owner is beneficially interested;
“Registrar” Tricor Tengis Limited, the share registrar of the Company at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong;

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DEFINITIONS

“Regulation S”	Regulation S under the US Securities Act;
“Rights Issue”	the issue of 10,047,266,781 Rights Shares at the Subscription
	Price on the basis of 1 Rights Share for every 2 existing Shares
	held on the Record Date payable in full on acceptance;
“Rights Share(s)”	the new Share(s) to be allotted and issued pursuant to the
	Rights Issue;
“Settlement Date”	Friday, 5 February 2016, being the fourth Business Day
	following the Latest Acceptance Date (or such other date as
	the Company and the Underwriter may agree in writing);
“SFC”	the Securities and Futures Commission of Hong Kong;
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong), as amended or supplemented from
	time to time;
“Share(s)”	ordinary share(s) in the share capital of the Company;
“Share Option Scheme”	the share option scheme of the Company adopted on
	22 December 2006 and became effective on 29 December
	2006;
“Share Option(s)”	share option(s) granted under the Share Option Scheme;
“Shareholder(s)”	the holder(s) of the Share(s);
“Specified Territory”	means the US;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Subscription Price”	the subscription price of HK$0.092 per Rights Share;
“subsidiary”	has the same meaning ascribed thereto in Rule 1.01 of the
	Listing Rules;
“Undertaking”	the irrevocable undertaking on the part of LSG to subscribe
	or procure the subscription of the Committed Shares, as
	contained in the Underwriting Agreement;
“Undertaking Shareholders”	LSG and the LSG Subsidiaries;

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DEFINITIONS

“Underwriting Agreement”
the underwriting agreement dated 17 November 2015 and entered into between the Company and LSG in relation to the Rights Issue;
“Underwritten Shares” the 4,834,417,105 Rights Shares (other than the Committed Shares) underwritten by the Underwriter pursuant to the terms of the Underwriting Agreement;
“United States” or “US”
the United States of America (including its territories and dependencies, any state in the US and the District of Columbia);
“Untaken Shares” all those Underwritten Shares for which duly completed Application Forms (accompanied by cheques or banker’s cashier orders for the full amount payable on the applications which are honoured on first presentation) have not been lodged for acceptance by the Qualifying Shareholders, or received, as the case may be, on or before the latest time for acceptance;
“US Person(s)”
any person(s) or entity(ies) deemed to be a US Person for the purposes of Regulation S under the US Securities Act of 1933, as amended;
“US Securities Act” US Securities Act of 1933, as amended;
“2015 Final Dividend”
the Directors have recommended the payment of a final dividend of HK0.25 cent per Share, amounting to HK$50,236,334 for the Company’s financial year ended 31 July 2015, to Shareholders whose names appear on the register of members of the Company on 22 December 2015. The proposed dividend includes a scrip alternative, meaning that those on the register as at that record date can elect to receive some or all of the dividend in the form of new Shares; and
“%” per cent or percentage.

In this Prospectus, unless the context otherwise requires, any reference to the singular includes the plural and vice versa and any reference to a gender includes a reference to the other gender and the neuter.

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SUMMARY OF THE RIGHTS ISSUE

The following information is derived from, and should be read in conjunction with and subject to, the full text of this Prospectus:

What is the Rights Issue?

: A means for the Company to raise additional capital by offering to the Company’s existing Shareholders who are Qualifying Shareholders the right to subscribe for further Shares in proportion to their existing shareholdings.

Basis of the Rights Issue

: Qualifying Shareholders are being offered the opportunity to subscribe for one (1) Rights Share for every two (2) existing Shares held at 5:00 p.m. on the Record Date. For more information in relation to Qualifying Shareholders, see the sections of this Prospectus headed “Qualifying Shareholders”, “Distribution of this Prospectus and the other Prospectus Documents”, “Non-Qualifying Shareholders” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”, in the “Letter from the Board”.

Subscription Price : HK$0.092 per Rights Share payable in full on acceptance. Number of Shares in issue : 20,094,533,563 Shares as at the Latest Practicable Date. Number of Rights Shares : 10,047,266,781 Rights Shares. to be issued Latest Acceptance Date : Expected to be Monday, 1 February 2016. Amount to be raised : Approximately HK$924.3 million before expenses. by the Rights Issue Enlarged issued share capital : 30,141,800,344 Shares (assuming no new Shares upon completion of the (other than the Rights Shares) are allotted and issued Rights Issue on or before completion of the Rights Issue).

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SUMMARY OF THE RIGHTS ISSUE

Excess applications

: Qualifying Shareholders may apply for Rights Shares in excess of their provisional allotment (see the section headed “Application for Excess Rights Shares” in the “Letter from the Board”). Any Rights Shares available for excess application would be (a) any unsold Rights Shares which would have been allotted to Non-Qualifying Shareholders had they been Qualifying Shareholders (see the section in the “Letter from the Board” below headed “NonQualifying Shareholders”), (b) any Rights Shares provisionally allotted but not validly accepted by the Qualifying Shareholders or otherwise subscribed for by renouncees or transferees of nil-paid Rights Shares, and (c) any unsold Rights Shares created by aggregating fractions of the Rights Shares (see the section headed “Fractional Entitlements” in the “Letter from the Board”).

Status : The Rights Shares, when allotted, issued and fully paid, will rank pari passu in all respects with the Shares then in issue. After the Rights Shares have been issued and fully paid, holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which may be declared, made or paid after the date of allotment and issue of the Rights Shares in their fully-paid form (for the avoidance of doubt, excluding the 2015 Final Dividend).

Underwriter : LSG.

Assuming no new Shares (other than the Rights Shares) are allotted and issued on or before the completion of the Rights Issue, the aggregate number of Rights Shares in nil-paid form proposed to be provisionally allotted represent approximately 50% of the issued share capital of the Company as at the Latest Practicable Date and approximately 33.33% of the issued share capital of the Company as enlarged by the allotment and issue of the Rights Shares.

As at the Latest Practicable Date, the Company has 20,094,533,563 Shares in issue and 713,823,903 Share Options outstanding which entitle the holders thereof to subscribe for 713,823,903 Shares, all of which have been validly vested.

Save for the Share Options as mentioned above, as at the Latest Practicable Date, the Company has no other outstanding convertible securities or options in issue or other similar rights which confer any right to subscribe for, convert or exchange into Shares.

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TERMINATION OF THE UNDERWRITING AGREEMENT

The Underwriter reserves the right (but shall not be obliged to do so) to rescind or terminate the arrangements set out in the Underwriting Agreement by notice in writing given by it to the Company at any time prior to 4:00 p.m. on the Settlement Date, if in the sole and absolute opinion of the Underwriter acting in good faith:

(a) the success of the Rights Issue would be materially and adversely affected by:
(i) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may materially adversely affect the business or the financial or trading position or prospects of the Group as a whole; or
(ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof) of a political, military, financial, economic, currency or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which materially adversely affects the business or the financial or trading position or prospects of the Group as a whole or materially adversely prejudices the success of the Rights Issue or otherwise makes it inexpedient or inadvisable for the Company or the Underwriter to proceed with the Rights Issue; or
(iii) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out which would, in the absolute opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or
(b) any material adverse change in market conditions or combination of circumstances in Hong Kong or elsewhere (including without limitation suspension or material restriction or trading in securities) occurs which may adversely and materially affect the success of the Rights Issue.

Upon the giving of notice by the Underwriter to rescind or terminate the Underwriting Agreement, all obligations of the Underwriter shall cease and determine and neither the Company nor the Underwriter shall have any claim against the other in respect of any matter or thing arising out of or in connection with the Underwriting Agreement (save for any antecedent breaches thereof). If the Underwriter exercises such right, the Rights Issue will not proceed.

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TERMINATION OF THE UNDERWRITING AGREEMENT

WARNING OF THE RISKS OF DEALING IN NIL-PAID RIGHTS SHARES

The Rights Shares are expected to be dealt with in their nil-paid form from Wednesday, 20 January 2016 to Wednesday, 27 January 2016 (both dates inclusive).

The Rights Issue is conditional upon the Underwriting Agreement becoming unconditional and not being terminated in accordance with its terms. If the conditions of the Rights Issue are not fulfilled, the Rights Issue will not proceed. Any persons dealing in Shares or Rights Shares in their nil-paid form, or in any other securities of the Company, up to the date on which all the conditions to which the Rights Issue is subject have been fulfilled and the Underwriter’s right to terminate the Underwriting Agreement has ceased, will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholders or other persons contemplating any dealings in the Shares or Rights Shares in their nil-paid form, or in any other securities of the Company, are advised to exercise caution and to consult their professional advisers.

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EXPECTED TIMETABLE

The expected timetable for the Rights Issue is set out below:

Last day for dealings in the Shares on a cum-rights basis.................................... 11 January 2016 Commencement of dealings in the Shares on an ex-rights basis ....................................................................................... 12 January 2016 Latest time for lodging transfer documents of the Shares in order to be qualified for the Rights Issue ................................4:30 p.m. on 13 January 2016 Closure of the register of members for determining entitlements under the Rights Issue ........................................................... 14-15 January 2016 Record Date for determining entitlements under the Rights Issue .............................................................................................. 15 January 2016 Registration of the Prospectus ............................................................................ 18 January 2016 Despatch of the Prospectus Documents .............................................................. 18 January 2016 Re-opening of the register of members ............................................................... 18 January 2016 First day for dealings in nil-paid Rights Shares .................................................. 20 January 2016 Latest time for receipt by the Company of letters of representation, in the form attached hereto as Appendix IV, from US persons who are QIBs ............................1:00 p.m. on 22 January 2016 Latest time for receipt by the Company of representation letters, in the form attached hereto as Appendix V, from Canadian residents who are an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions ...............................................................1:00 p.m. on 22 January 2016 Latest time for splitting of nil-paid Rights Shares ...........................4:30 p.m. on 22 January 2016 Last day for dealings in nil-paid Rights Shares ................................................... 27 January 2016 Latest time for acceptance of, and payment for, the Rights Shares and application and payment for excess Rights Shares .............................................................4:00 p.m. on 1 February 2016 Rights Issue to become unconditional ............................................4:00 p.m. on 5 February 2016

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EXPECTED TIMETABLE

Announcement of results of the Rights Issue

to be published on the respective websites of

the Stock Exchange and the Company .......................................on or before 16 February 2016

Certificates for the Rights Shares expected

to be despatched ........................................................................on or before 17 February 2016

Refund cheques in respect of wholly or partially

unsuccessful applications for excess

Rights Shares expected to be posted ..........................................on or before 17 February 2016

Commencement of dealings in

fully-paid Rights Shares ........................................................... 9:00 a.m. on 18 February 2016

Notes:

(i) All references to times and dates in the Expected Timetable are references to Hong Kong time and Hong Kong dates, respectively.
(ii) Dates or deadlines specified in this Prospectus are indicative only and may be extended or varied by agreement between the Company and the Underwriter. In the event that any special circumstances arise, the Board may extend, or make adjustment to, the timetable if it considers appropriate. Any changes to the timetable will be published or notified to the Shareholders and the Stock Exchange as appropriate.

Effect of bad weather on the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares

The latest time for acceptance of and payment for Rights Shares and for application and payment for excess Rights Shares will not take place at 4:00 p.m. on Monday, 1 February 2016 if there is a tropical cyclone warning signal no. 8 or above, or a black rainstorm warning, if such circumstance is:

i. in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on Monday, 1 February 2016. Instead the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be extended to 5:00 p.m. on the same Business Day; or
ii. in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on Monday, 1 February 2016. Instead the latest time of acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m.

If the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares does not take place on Monday, 1 February 2016, the dates mentioned in the “Expected Timetable” section may be affected. The Company will notify the Shareholders by way of announcement(s) of any change to the expected timetable as soon as practicable.

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LETTER FROM THE BOARD

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Executive Directors: Registered Office: Dr. Lam Kin Ngok, Peter (Chairman) 11th Floor Mr. Chew Fook Aun (Deputy Chairman) Lai Sun Commercial Centre Mr. Lau Shu Yan, Julius (Chief Executive Officer) 680 Cheung Sha Wan Road Mr. Lam Hau Yin, Lester Kowloon Hong Kong

Non-Executive Directors: Dr. Lam Kin Ming Madam U Po Chu

Independent Non-executive Directors: Mr. Ip Shu Kwan, Stephen Mr. Lam Bing Kwan Mr. Leung Shu Yin, William

18 January 2016

To the Qualifying Shareholders and, for information purposes only, the Non-Qualifying Shareholders

Dear Sir or Madam,

RIGHTS ISSUE OF LAI SUN DEVELOPMENT COMPANY LIMITED OF 10,047,266,781 RIGHTS SHARES AT THE SUBSCRIPTION PRICE OF HK$0.092 EACH ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY TWO EXISTING SHARES HELD ON THE RECORD DATE

INTRODUCTION

The Company announced on Tuesday, 17 November 2015 that it proposes to raise approximately HK$924.3 million before expenses by way of the Rights Issue, on the basis of one (1) Rights Share for every two (2) existing Shares held at 5:00 p.m. on the Record Date. Qualifying Shareholders are entitled to apply for additional Rights Shares in excess of their respective entitlements under the Rights Issue through excess applications. The Rights Issue will involve the issue of 10,047,266,781 Rights Shares at a subscription price of HK$0.092 per Rights Share payable in full on application.

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LETTER FROM THE BOARD

The Underwritten Rights Shares are fully underwritten on the terms and subject to the conditions set out in the Underwriting Agreement and the Rights Issue would, on completion, raise for the Company approximately HK$924.3 million before expenses.

RIGHTS ISSUE OVERVIEW

What is the Rights Issue? : A means for the Company to raise additional capital by offering to the Company’s existing Shareholders who are Qualifying Shareholders the right to subscribe for further Shares in proportion to their existing shareholdings. Basis of the Rights Issue : Qualifying Shareholders are being offered the opportunity to subscribe for one (1) Rights Share for every two (2) existing Shares held at 5:00 p.m. on the Record Date. For more information in relation to Qualifying Shareholders, see the sections of this Prospectus headed “Qualifying Shareholders”, “Distribution of this Prospectus and the other Prospectus Documents”, “Non-Qualifying Shareholders” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”, in the “Letter from the Board”.

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LETTER FROM THE BOARD

Excess applications

: Qualifying Shareholders may apply for Rights Shares in excess of their provisional allotment (see the section headed “Application for Excess Rights Shares” in the “Letter from the Board”). Any Rights Shares available for excess application would be (a) any unsold Rights Shares which would have been allotted to Non-Qualifying Shareholders had they been Qualifying Shareholders (see the section in the “Letter from the Board” below headed “NonQualifying Shareholders”), (b) any Rights Shares provisionally allotted but not validly accepted by the Qualifying Shareholders or otherwise subscribed for by renouncees or transferees of nil-paid Rights Shares, and (c) any unsold Rights Shares created by aggregating fractions of the Rights Shares (see the section headed “Fractional Entitlements” in the “Letter from the Board”).
Status : The Rights Shares, when allotted, issued and fully paid, will rank pari passu in all respects with the Shares then in issue. After the Rights Shares have been issued and fully paid, holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which may be declared, made or paid after the date of allotment and issue of the Rights Shares in their fully-paid form (for the avoidance of doubt, excluding the 2015 Final Dividend).

Underwriter : LSG.

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LETTER FROM THE BOARD

As the election form relating to the 2015 Final Dividend for use by Shareholders that wish to receive the dividend wholly or partly in the form of new Shares (i.e. the scrip alternative) needs to be returned to the Company’s share registrar on 18 January 2016, which is a date after the Record Date and the Latest Practicable Date, the scrip alternative will not have an impact on the number of Rights Shares and/or the issued share capital of the Company as at the Latest Practicable Date.

THE SUBSCRIPTION PRICE

The Subscription Price of HK$0.092 per Rights Share is payable in full by a Qualifying Shareholder upon acceptance of the provisional allotment of the Rights Shares under the Rights Issue or, where applicable, application for excess Rights Shares or when a renouncee of any provisional allotment of the Rights Shares or a transferee of nil-paid Rights Shares applies for the Rights Shares. The Subscription Price represents:

(a) a discount of approximately 33.33% to the closing price of HK$0.138 per Share as quoted on the Stock Exchange on the Last Trading Day;
(b) a discount of approximately 33.33% to the average of the closing prices per Share as quoted on the Stock Exchange for the five previous consecutive trading days up to and including the Last Trading Day of approximately HK$0.138;
(c) a discount of approximately 33.81% to the average of the closing prices per Share as quoted on the Stock Exchange for the ten previous consecutive trading days up to and including the Last Trading Day of approximately HK$0.139;
(d) a discount of approximately 25.20% to the theoretical ex-rights price of approximately HK$0.123 per Share based on the closing price of HK$0.138 per Share as quoted on the Stock Exchange on the Last Trading Day;
(e) a discount of approximately 91.84% to the audited consolidated net asset value attributable to the Shareholders as at 31 July 2015 of approximately HK$1.128 per Share; and
(f) a discount of approximately 7.07% to the closing price of HK$0.099 per Share (on exrights basis) on the Latest Practicable Date.

The Rights Shares have no par value as the Company is a company incorporated in Hong Kong and, as such, the concept of par value no longer exists in respect of its shares.

The Subscription Price was arrived at after arm’s length negotiation between the Company and the Underwriter with reference to, among others, the targeted fund raising amount, the prevailing market price and trading liquidity of the Shares. The Directors consider that the discount to the prevailing market price would encourage the Shareholders to participate in the Rights Issue to maintain their shareholdings in the Company. In view of the prevailing market conditions of the capital market in Hong Kong and the benefits of the Rights Issue, the Directors consider the terms of the Rights Issue, including the Subscription Price (and the discounts to the relative value as indicated above) to be fair and reasonable and to be in the interests of the Company and the Shareholders as a whole. Each Qualifying Shareholder will be entitled to subscribe for the Rights Shares at the same Subscription Price in proportion to his/her/its shareholding held at 5:00 p.m. on the Record Date.

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LETTER FROM THE BOARD

QUALIFYING SHAREHOLDERS

To qualify for the Rights Issue, the Shareholder must (a) be registered as a member of the Company as at 5:00 p.m. on the Record Date; and (b) not be a Non-Qualifying Shareholder (see the section below headed “Non-Qualifying Shareholders”). In order to be registered as members of the Company at 5:00 p.m. on the Record Date, all transfer documents of the Shares must be lodged (together with the relevant share certificate(s)) with the Registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by 4:30 p.m. (Hong Kong time) on Wednesday, 13 January 2016.

The Company has sent the Prospectus Documents to the Qualifying Shareholders and this Prospectus to the Non-Qualifying Shareholders in Japan and Canada for information only.

Qualifying Shareholders who take up their pro-rata entitlements in full will not suffer any dilution to their interests in the Company under the Rights Issue. If a Qualifying Shareholder does not take up his/her/its entitlement under the Rights Issue in full, his/her/its proportionate shareholding in the Company will be diluted.

BASIS OF PROVISIONAL ALLOTMENT OF RIGHTS SHARES

Each Qualifying Shareholder will receive a PAL in respect of the Rights Issue. The Rights Shares will be provisionally allotted on the basis of one (1) Rights Share, in nil-paid form, for every two (2) existing Shares held by a Qualifying Shareholder at 5:00 p.m. on the Record Date. Any holdings (or balance of holdings) of less than two (2) existing Shares will not entitle their holders to be provisionally allotted a Rights Share. The board lot of the Rights Shares in nil-paid form will be 15,000 Shares.

Application for all or any part of a Qualifying Shareholder’s provisional allotment of Rights Shares should be made by completing the PAL, and lodging the same with a remittance for the Rights Shares being applied for, which shall be for an equal or lesser number of the Rights Shares provisionally allotted to such Qualifying Shareholder. See further the section headed “Procedures for Acceptance or Transfer” below.

DISTRIBUTION OF THIS PROSPECTUS AND THE OTHER PROSPECTUS DOCUMENTS

The Company will only send this Prospectus accompanied by the other Prospectus Documents to the Qualifying Shareholders. However, the Company will, to the extent practicable, send this Prospectus (without the PAL or the EAF) to Non-Qualifying Shareholders in Japan and Canada for information purposes only. This Prospectus will not be sent to any Shareholders or Beneficial Owners in the US, except to those Shareholders or Beneficial Owners whom the Company believes reasonably are QIBs and in respect of whom the provisions applicable to QIBs under the heading “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue” have been complied with.

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LETTER FROM THE BOARD

Distribution of this Prospectus and the other Prospectus Documents into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession the Prospectus Documents come (including, without limitation, agents, custodians, nominees and trustees) should inform themselves of and observe any such restrictions. Any failure to comply with those restrictions may constitute a violation of the securities laws of any such jurisdiction. Any Shareholder or Beneficial Owner who is in any doubt as to his/her/its position should consult an appropriate professional adviser without delay. In particular, subject to certain exceptions as determined by the Company, this Prospectus should not be distributed, forwarded to or transmitted in, into or from the Specified Territory together with the PAL or the EAF.

The Prospectus Documents will not be registered under the applicable securities legislation of any jurisdiction other than Hong Kong.

NON-QUALIFYING SHAREHOLDERS

Non-Qualifying Shareholders are those Shareholders with registered addresses in, and Shareholders and Beneficial Owners who are otherwise known by the Company to be resident in, places outside Hong Kong in respect of whom the Directors, based on enquiries made by the Directors, consider it necessary or expedient not to offer the Rights Issue on account either of the legal restrictions under the laws of the relevant place in which the Shareholder or Beneficial Owner is located or the requirements of the relevant regulatory body or stock exchange in that place.

As at the Record Date, according to the register of members of the Company, the Overseas Shareholders have registered addresses in nine jurisdictions, namely, Canada, Japan, Macau, Malaysia, the Netherlands, Singapore, Switzerland, United Kingdom and the US. Pursuant to Rule 13.36(2)(a) of the Listing Rules, the Board has made enquiries regarding the legal restrictions under the applicable securities legislation of the relevant jurisdictions and the requirements of the relevant regulatory body or stock exchange with respect to the offer of the Rights Shares to such Overseas Shareholders.

The Company has obtained advice from legal advisers in Macau, Malaysia, the Netherlands, Singapore, Switzerland and United Kingdom, and has been advised that under the applicable legislations of these jurisdictions, either (i) there is no regulatory restriction or requirement of any regulatory body or stock exchange with respect to extending the Rights Issue to the Overseas Shareholders in the relevant jurisdiction; or (ii) the Rights Issue meets the relevant exemption requirements under the relevant jurisdictions so that it would be exempt from obtaining approval or recognition from and/or registration of the Prospectus Documents with the relevant regulatory authorities under the applicable laws and regulations of the relevant jurisdictions. Accordingly, the Rights Issue will be extended to the Overseas Shareholders having registered addresses in Macau, Malaysia, the Netherlands, Singapore, Switzerland and United Kingdom and such Overseas Shareholders are Qualifying Shareholders.

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LETTER FROM THE BOARD

The Company has also obtained advice from its Japanese legal adviser. Having considered the circumstances, the Directors have formed the view that it is necessary or expedient not to offer Rights Shares to Shareholders in Japan due to the time and costs involved in the registration of the Prospectus and/or compliance with the relevant local legal or regulatory requirements in Japan.

The Company has also obtained advice from its Canadian legal adviser. Having considered the circumstances, the Directors have formed the view that, other than certain limited exceptions as described below, it is necessary or expedient to restrict the ability of Shareholders in Canada to take up their rights under the Rights Issue due to the time and costs involved in the registration of the Prospectus and/or compliance with the relevant local legal or regulatory requirements in Canada.

The Company has also obtained advice from its US legal adviser. Having considered the circumstances, the Directors have formed the view that, other than certain limited exceptions as described below, it is necessary or expedient to restrict the ability of Shareholders in the Specified Territory to take up their rights under the Rights Issue due to the time and costs involved in the registration of the Prospectus and/or compliance with the relevant local legal or regulatory requirements in the Specified Territory.

Accordingly, for the purposes of the Rights Issue, the Non-Qualifying Shareholders are:

(a) Shareholders whose name(s) appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose address(es) as shown in such register is/are in Japan;
(b) Shareholders whose name(s) appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose address(es) as shown in such register is/are in Canada, except for those Shareholders with addresses in Canada who fulfil, to the satisfaction of the Company, the relevant requirements of an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions , and complete and return the “Canadian-Resident Investor Representation Letter” (the Form of which is included at Appendix V of this Prospectus) to the Company by the deadline set out therein. The representations therein include that the purchaser is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions , and, if required, that the purchaser has also delivered to the Company an executed “Risk Acknowledgement Form” in the form set out in the “Canadian-Resident Investor Representation Letter”;
(c) Shareholders whose name(s) appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose address(es) as shown in such register is/are in the US (the Specified Territory), except for those Shareholders with addresses in the US who fulfil, to the satisfaction of the Company, the relevant requirements specified in the section headed “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue” below; and

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LETTER FROM THE BOARD

(d) any Shareholders or Beneficial Owners at that time who are otherwise known by the Company to be resident in the Specified Territory, except for those Shareholders or Beneficial Owners resident in the US who fulfil, to the satisfaction of the Company, the relevant requirements specified in the section headed “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue” below.

As at the Record Date, according to the register of members of the Company, there are at least 19 Overseas Shareholders, out of which there are 9 Non-Qualifying Shareholders whose addresses as shown in such register are in Japan or Canada or the US holding 649,416 Shares (assuming no such Shareholders fulfil, to the satisfaction of the Company, the relevant requirements of an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or the relevant requirements specified in the section headed “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”), representing approximately 0.003% of the issued share capital of the Company.

No PAL or EAF has been sent to any of the Non-Qualifying Shareholders. Where permitted by the laws of the relevant jurisdictions, the Company will send this Prospectus to the NonQualifying Shareholders in Japan and Canada for their information only.

Notwithstanding any other provision in this Prospectus or the PAL or the EAF, the Company reserves the right to permit any Shareholder or Beneficial Owner to take up his/her/its rights if the Company, in its absolute discretion, is satisfied that the transaction in question is exempt from or not subject to the legislation or regulations giving rise to the restrictions in question. If the Company is so satisfied, the Company will, if requested, arrange for the relevant Shareholder or Beneficial Owner to be sent a PAL and an EAF.

Rights Shares have been provisionally allotted to all Shareholders whom the Company considers to be Qualifying Shareholders. In respect of those Shareholders whose name(s) appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose address(es) as shown in such register is/are in Japan or Canada or the US (the Specified Territory), the Rights Shares which would otherwise have been provisionally allotted to them have instead been provisionally allotted to the Underwriter or a nominee and will be sold in the market in their nil-paid form in accordance with the procedures described in the section headed “Arrangements for Rights Shares which would otherwise have been available to NonQualifying Shareholders” below; unless, in respect of Shareholders whose addresses are in Canada, the relevant Shareholder fulfils, to the satisfaction of the Company, the relevant requirements of an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions , and complete and return the “Canadian-Resident Investor Representation Letter” (the Form of which is included at Appendix V of this Prospectus) to the Company by the deadline set out therein. The representations therein included that the purchaser is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions , and, if required, that the purchaser has also delivered to the Company an executed “Risk Acknowledgement Form” in the form set out in the “Canadian-Resident Investor Representation Letter”; or in respect of Shareholders whose addresses are in the US, the relevant Shareholder complies, by no later than 1:00 p.m., on Friday, 22 January 2016 with the applicable requirements of the section below headed “Limited category of persons

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LETTER FROM THE BOARD

in the Specified Territory who may be able to take up their rights under the Rights Issue” (the “ Relevant Requirements ”). PALs and EAFs have not been, and will not be, sent to Shareholders with address(es) in, or to Shareholders or Beneficial Owners who are otherwise known to the Company to be resident in Japan or Canada or the Specified Territory except where the Company is satisfied that such action would not result in a contravention of any registration or other legal requirement in such jurisdiction.

Receipt of this Prospectus and/or a PAL and/or an EAF or the crediting of nil-paid Rights Shares to a stock account in CCASS does not and will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus and/or a PAL and/or an EAF must be treated as sent for information purposes only and should not be copied or redistributed. Persons (including, without limitation, agents, custodians, nominees and trustees) who receive a copy of this Prospectus and/or a PAL and/or an EAF or whose stock account in CCASS is credited with nil-paid Rights Shares should not, in connection with the Rights Issue, distribute or send the same in, into or from, or transfer nil-paid Rights Shares to any person in, into or from, Japan or Canada or the Specified Territory. If a PAL or an EAF or a credit of nil-paid Rights Shares in CCASS is received by any person in any such territory, or by his/her/its agent or nominee, he/she/it should not seek to take up the rights referred to in the PAL or transfer the PAL (or apply for any excess Rights Shares under the EAF) or transfer the nil-paid Rights Shares in CCASS unless the Company determines that such actions would not violate applicable legal or regulatory requirements. Any person (including, without limitation, agents, custodians, nominees and trustees) who does forward this Prospectus or a PAL or an EAF in, into or from Japan or Canada or the Specified Territory (whether under a contractual or legal obligation or otherwise) should draw the recipient’s attention to the contents of this section.

ARRANGEMENTS FOR RIGHTS SHARES WHICH WOULD OTHERWISE HAVE BEEN AVAILABLE TO NON-QUALIFYING SHAREHOLDERS

Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to Non-Qualifying Shareholders to be sold in the market in their nilpaid form as soon as practicable after dealings in the Rights Shares in their nil-paid form commence and before dealings in the Rights Shares in their nil-paid form end, if a premium (net of expenses) can be obtained. The proceeds of such sale, less expenses and stamp duty, of more than HK$100 will be paid by the Company pro rata to the Non-Qualifying Shareholders. The Company will retain individual amounts (or the equivalent) of HK$100 or less for its own benefit. Any unsold entitlements of those Non-Qualifying Shareholders to the Rights Shares, together with any Rights Shares provisionally allotted but not accepted by Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares and any unsold fractions of the Rights Shares (see the section headed “Fractional Entitlements” below), will be made available for excess applications on EAFs by Qualifying Shareholders.

These arrangements will apply in respect of those Shareholders whose names appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose addresses as shown in the register of members of the Company at that time were in Japan or Canada or the Specified Territory (i.e. in the US), unless the relevant Shareholder fulfils the Relevant

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LETTER FROM THE BOARD

Requirements to the satisfaction of the Company. These arrangements will also apply in respect of a Beneficial Owner, wherever located, who holds a beneficial interest in Shares which are registered in the name of a Registered Owner where the address of the Registered Owner shown in the register of members of the Company at 5:00 p.m. on the Record Date was in Japan or Canada or the Specified Territory, unless the Registered Owner fulfils the Relevant Requirements to the satisfaction of the Company.

NON-QUALIFYING BENEFICIAL OWNERS

However, the arrangements under the section above headed “Arrangements for Rights Shares which would otherwise have been available to Non-Qualifying Shareholders” will not apply to a Beneficial Owner who is resident in the Specified Territory who does not fulfil the Relevant Requirements to the satisfaction of the Company, and who holds his/her/its interest in Shares through a Registered Owner having an address shown in the register of members of the Company at 5:00 p.m. on the Record Date which is not in the Specified Territory. Such Beneficial Owners are referred to herein as “ Non-Qualifying Beneficial Owners ” and may include such Beneficial Owners holding interests in Shares through CCASS (which Shares are registered in the register of members of the Company in the name of HKSCC Nominees Limited, a company incorporated in Hong Kong). The Company is unable to extend those arrangements to such Non-Qualifying Beneficial Owners because the Company does not have the necessary information in relation to such Non-Qualifying Beneficial Owners to make a unilateral determination as to whether those Beneficial Owners are Qualifying Shareholders or Non-Qualifying Shareholders for the purposes of the Rights Issue.

Accordingly, the nil-paid Rights Shares which would otherwise have been available to be taken up by those Non-Qualifying Beneficial Owners will not be sold in the market and the relevant Non-Qualifying Beneficial Owners will not receive the proceeds of any such sale. All NonQualifying Beneficial Owners are advised to seek their own legal advice as to whether or not they may be permitted, having regard to their own particular circumstances (including the laws and regulations of the relevant jurisdiction in which they are resident), to sell their nil-paid Rights Shares in the market. Any such nil-paid Rights Shares which are not sold in the market by Non-Qualifying Beneficial Owners will be made available for excess applications on EAFs by Qualifying Shareholders.

LIMITED CATEGORY OF PERSONS IN THE SPECIFIED TERRITORY WHO MAY BE ABLE TO TAKE UP THEIR RIGHTS UNDER THE RIGHTS ISSUE

Notwithstanding what is said in the section headed “Non-Qualifying Shareholders” above, the category of persons in the Specified Territory which may be able to take up their rights under the Rights Issue are Shareholders or Beneficial Owners in the US whom the Company reasonably believes are QIBs may be able to purchase Rights Shares being offered in the Rights Issue (pursuant to the exercise of rights granted under the Rights Issue) by way of a private placement pursuant to an applicable exemption from registration under the US Securities Act, provided that they provide a signed investor representation letter in the form set out in Appendix IV of this Prospectus, which will also contain restrictions and procedures regarding the transfer of Rights Shares.

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LETTER FROM THE BOARD

Duly completed and signed investor representation letters should be sent to the Company by fax or email at the contact details for the Company specified below in this section, by no later than 1:00 p.m., on Friday, 22 January 2016 (Hong Kong time) ; failing which the nil-paid Rights Shares which would otherwise have been provisionally allotted to such Shareholders or in respect of such Beneficial Owners may be sold in the market in their nil-paid form pursuant to the arrangements applicable to the Rights Shares which would otherwise have been available to be taken up by the Non-Qualifying Shareholders, as described in the section above headed “Arrangements for Rights Shares which would otherwise have been available to Non-Qualifying Shareholders”.

The Company reserves the absolute discretion in determining whether to allow such participation as well as the identity of any person(s) who may be allowed to do so.

Shareholders or Beneficial Owners located in the US who are QIBs should return their duly completed and signed investor representation letters to the Company by fax or email, to be received by the Company by no later than 1:00 p.m., on Friday, 22 January 2016 (Hong Kong time) , following receipt of which the Company will provide the relevant Shareholder with a PAL and an EAF, or permit such Beneficial Owners to participate in the Rights Issue and receive Rights Shares (for those Beneficial Owners holding interests in Shares through CCASS). The Company’s contact details for these purposes as follows:

Telephone from within Hong Kong: (852) 2741 0391 Fax from within Hong Kong: (852) 2785 2775 Email: [email protected] For the attention of: Company Secretary

If Shareholders or Beneficial Owners in the US do not return duly completed and signed investor representation letters by 1:00 p.m., on Friday, 22 January 2016:

(i) in the case of a Shareholder whose name appeared in the register of members of the Company at 5:00 p.m. on the Record Date and whose address as shown in the register of members of the Company at that time was in the US, the nil-paid Rights Shares provisionally allotted to such Shareholder may be sold in the market in their nil-paid form pursuant to the arrangements in the section headed “Arrangements for Rights Shares which would otherwise have been available to Non-Qualifying Shareholders” above; and
(ii) in the case of such Beneficial Owners, the Rights Shares provisionally allotted in respect of their interests in Shares will be dealt with as described in the section headed “NonQualifying Beneficial Owners” above.

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LETTER FROM THE BOARD

PROCEDURES FOR ACCEPTANCE OR TRANSFER

General

Any person (including, without limitation, agents, nominees and trustees) wishing to take up his/ her/its rights under the Rights Issue must satisfy himself/herself/itself as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories. The attention of Shareholders with registered addresses in Japan or Canada or the Specified Territory or holding Shares on behalf of persons with such addresses is drawn to the sections above headed “Non-Qualifying Shareholders” and “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”.

Each subscriber of Rights Shares being offered and sold outside the US will be deemed (by accepting delivery of this Prospectus) to have given each of the following representations and warranties to the Company and the Underwriter and to any person acting on their behalf, unless in their sole discretion the Company and the Underwriter waive such requirement:

he/she/it was a Shareholder as at the Record Date, or he/she/it lawfully acquired or may lawfully acquire rights, directly or indirectly, from such a person;
he/she/it may lawfully be offered, take up, exercise, obtain, subscribe for and receive the nil-paid Rights Shares and/or the fully-paid Rights Shares in the jurisdiction in which he/ she/it resides or is currently located;
subject to certain exceptions, he/she/it is not resident or located in the US;
subject to certain exceptions, he/she/it is not accepting an offer to acquire, take up or exercise nil-paid Rights Shares or fully-paid Rights Shares on a non-discretionary basis for a person who is resident or located in the US or otherwise a “US person” (as defined in Regulation S under the US Securities Act), at the time the instruction to accept was given;
he/she/it is acquiring the nil-paid Rights Shares and/or the fully-paid Rights Shares in an “offshore transaction” as defined in Regulation S under the US Securities Act;
he/she/it has not been offered the Rights Shares by means of any “directed selling efforts” as defined in Regulation S under the US Securities Act;
he/she/it is not acquiring nil-paid Rights Shares or the fully-paid Rights Shares with a view to the offer, sale, transfer, delivery or distribution, directly or indirectly, of such nilpaid Rights Shares or the fully-paid Rights Shares into the US; and

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LETTER FROM THE BOARD

he/she/it understands that neither the nil-paid Rights Shares nor the fully-paid Rights Shares have been or will be registered under the US Securities Act or with any securities regulatory authority of any state, territory, or possession of the US and the nil-paid Rights Shares or the fully-paid Rights Shares are being distributed and offered outside the US in reliance on Regulation S under the US Securities Act. Consequently he/she/it understands the nil-paid Rights Shares or the fully-paid Rights Shares may not be offered, sold, pledged or otherwise transferred in or into the US, except in reliance on an exemption from, or in transactions not subject to, the registration requirements of the US Securities Act.

For the avoidance of doubt, neither HKSCC nor HKSCC Nominees Limited will give, or be subject to, any of the above representations or warranties.

Action to be taken by Shareholders

Subscription for all Rights Shares provisionally allotted

For each Qualifying Shareholder, a PAL is enclosed with this Prospectus which entitles the Qualifying Shareholder(s) to whom it is addressed to subscribe for the number of Rights Shares shown thereon. If the Qualifying Shareholder(s) wish(es) to exercise his/her/its right to subscribe for all the Rights Shares provisionally allotted to him/her/it as specified in the PAL, he/she/it must lodge the PAL in accordance with the instructions printed thereon, together with a remittance for the full amount payable on acceptance, with the Registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by no later than 4:00 p.m. on the Latest Acceptance Date. All remittances must be made in Hong Kong dollars and must be made either by cheques drawn on or cashier’s orders issued by a bank account in Hong Kong and made payable to “ Lai Sun Development Company Limited – Rights Issue Account ” and crossed “ Account Payee Only ”.

It should be noted that unless the PAL, together with the appropriate remittance, has been lodged with the Registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by 4:00 p.m. on the Latest Acceptance Date, whether by the original allottee or any person in whose favour the rights have been validly transferred, that provisional allotment and all rights thereunder will be deemed to have been declined and will be cancelled. The Company may, at its sole discretion, treat a PAL as valid and binding on the person(s) by whom or on whose behalf it is lodged even if not completed in accordance with the relevant instructions.

The PAL contains further information regarding the procedure to be followed for acceptance of the whole or part of their provisional allotments of Rights Shares by Qualifying Shareholders.

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LETTER FROM THE BOARD

All cheques and cashier’s orders will be presented for payment following receipt and all interest earned on such monies will be retained for the benefit of the Company. Completion and lodgment of a PAL together with a cheque or cashier’s order in payment for the Rights Shares applied for will constitute a warranty by the applicant that the cheque or cashier’s order will be honoured on first presentation. Without prejudice to its other rights in respect thereof, the Company reserves the right to reject any PAL in respect of which the cheque or cashier’s order is dishonoured on first presentation, and in that event the provisional allotment and all rights and entitlements thereunder will be deemed to have been declined and will be cancelled.

If the conditions of the Rights Issue (as set out in the section below headed “Conditions of the Rights Issue and the Underwriting Agreement”) are not fulfilled or if the Underwriter exercises its right to terminate the Underwriting Agreement, the monies received in respect of acceptances of the Rights Shares will be refunded to the Qualifying Shareholders (or such other persons to whom the nil-paid Rights Shares have been validly transferred) without interest, by means of cheques to be despatched by ordinary mail to their registered addresses, and in the case of joint applicants to the registered address of the first-mentioned person who appears on the register of members or the transfer form, at their own risk on or around Wednesday, 17 February 2016.

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Transfers and “splitting” of nil-paid Rights Shares

The nil-paid Rights Shares can be traded on the Stock Exchange. A Qualifying Shareholder can accept all of his/her/its provisional allotment of Rights Shares, or sell all of his/her/its provisional allotment on the Stock Exchange or accept only part of his/her/its provisional allotment and sell the remaining part on the Stock Exchange.

If a Qualifying Shareholder wishes to accept only part of his/her/its provisional allotment or transfer a part of his/her/its rights to subscribe for the Rights Shares provisionally allotted to him/her/it under the PAL or to transfer his/her/its rights to more than one person, the entire PAL must be surrendered and lodged for cancellation together with a covering letter stating clearly the number of split PALs required and the number of nil-paid Rights Shares to be comprised in each split PAL (which, in aggregate, should be equal to the number of Rights Shares provisionally allotted to such holder as stated in Box B of the original PAL), by no later than 4:30 p.m. on Friday, 22 January 2016 to the Registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, who will cancel the original PAL and issue new PALs in the denominations required which will be available for collection at the Registrar after 9:00 a.m. on the Second Business Day after the surrender the original PAL. This process is commonly known as “splitting” the nil-paid Rights Shares.

Having “split” the nil-paid Rights Shares, a Qualifying Shareholder who wishes to accept the provisional allotment of Rights Shares represented by a new PAL should do so in accordance with the instructions given above in relation to the subscription for all the Rights Shares provisionally allotted.

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LETTER FROM THE BOARD

If a Qualifying Shareholder wishes to transfer all of his/her/its nil-paid Rights Shares under a PAL (or a split PAL, as the case may be) to another person he/she/it should complete and sign Form B in the PAL and hand the PAL to the person to or through whom he/she/it is transferring his/her/its nil-paid Rights Shares. The transferee must then complete and sign Form C in the PAL and lodge the PAL intact together with a remittance for the full amount payable on acceptance with the Registrar, Tricor Tengis Limited, at the address given above, to effect the transfer by no later than 4:00 p.m. on Monday, 1 February 2016.

The PAL contains further information regarding the procedures to be followed for transfer of the whole or part of the provisional allotment of the Rights Shares by the Qualifying Shareholders.

The Company reserves the right to refuse to register any transfer in favour of any person in respect of which the Company believes such transfer may violate applicable legal or regulatory requirements.

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Important notice and representations and warranties relating to Shareholders in the Specified Territory

As described above, Shareholders (or any transferees of nil-paid Rights Shares) with registered addresses in the Specified Territory are only permitted to take up their rights under the Rights Issue if they fulfil, to the satisfaction of the Company, the requirements specified in the section above headed “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”.

Any Shareholder (or any transferees of nil-paid Rights Shares) accepting and/or transferring a PAL or requesting registration of the Rights Shares comprised therein represents and warrants to the Company that, except where proof has been provided to the satisfaction of the Company that such person’s use of the PAL will not result in the contravention of any applicable legal requirement in any jurisdiction: (i) such person is not in the Specified Territory or in any territory in which it is otherwise unlawful to make or accept an offer to acquire the nil-paid Rights Shares and/or the fully-paid Rights Shares or to use the PAL in any manner in which such person has used or will use it; (ii) such person is not accepting and/or transferring the PAL, or requesting registration of the relevant nil-paid Rights Shares or the fully-paid Rights Shares from within the Specified Territory; (iii) such person is not acting on a non-discretionary basis for a person resident in the Specified Territory at the time the instruction to accept or transfer was given; and (iv) such person is not acquiring the nil-paid Rights Shares and/or the fully-paid Rights Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any of the Rights Shares into the Specified Territory.

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LETTER FROM THE BOARD

For the avoidance of doubt, neither HKSCC nor HKSCC Nominees Limited will give, or be subject to, any of the above representations or warranties.

The Company may treat as invalid any acceptance or purported acceptance of the allotment of Rights Shares comprised in, or transfer or purported transfer of, a PAL if it: (a) appears to the Company to have been executed in, or despatched from the Specified Territory and the acceptance may involve a breach of the laws of the Specified Territory or the acceptance is otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it or its agents believe the same may violate any applicable legal or regulatory requirement; (b) provides an address in the Specified Territory for delivery of definitive share certificates for Rights Shares and such delivery would be unlawful or provides an address for delivery of definitive share certificates in any other jurisdiction outside Hong Kong in which it would be unlawful to deliver such certificates; or (c) purports to exclude the representation and/or warranty required by the paragraph immediately above.

Action to be taken by Beneficial Owners whose Shares are held by a Registered Owner (other than Shares deposited in CCASS)

Subscription for Rights Shares provisionally allotted and transfers and “splitting” of nil-paid Rights Shares

If you are a Beneficial Owner whose Shares are registered in the name of a Registered Owner and you wish to subscribe for the Rights Shares provisionally allotted to you, or sell your nilpaid Rights Shares or “split” your nil-paid Rights Shares and accept part of your provisional allotment and sell the remaining part, you should contact the Registered Owner and provide the Registered Owner with instructions or make arrangements with the Registered Owner in relation to the acceptance, transfer and/or “splitting” of the rights to subscribe for Rights Shares which have been provisionally allotted in respect of the Shares in which you are beneficially interested.

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory whose Shares are held by a Registered Owner (other than CCASS)

As described above, Beneficial Owners resident in the Specified Territory are only permitted to take up their rights under the Rights Issue if they fulfil, to the satisfaction of the Company, the requirements specified in the section above headed “Limited category of persons in the Specified Territory who may be able to take up their rights under the Rights Issue”.

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LETTER FROM THE BOARD

Any Beneficial Owner accepting and/or transferring a PAL or requesting registration of the Rights Shares comprised therein represents and warrants to the Company that, except where proof has been provided to the satisfaction of the Company that such person’s use of the PAL will not result in the contravention of any applicable legal requirement in any jurisdiction: (i) such person is not accepting and/ or transferring the PAL, or requesting registration of the relevant nil-paid Rights Shares or the fully-paid Rights Shares from within the Specified Territory; (ii) such person is not in the Specified Territory or in any territory in which it is otherwise unlawful to make or accept an offer to acquire the nil-paid Rights Shares and/or the fully-paid Rights Shares or to use the PAL in any manner in which such person has used or will use it; (iii) such person is not acting on a non-discretionary basis for a person resident in the Specified Territory at the time the instruction to accept or transfer was given; and (iv) such person is not acquiring the nil-paid Rights Shares and/or the fully-paid Rights Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any of the Rights Shares into the Specified Territory.

The Company may treat as invalid any acceptance or purported acceptance of the allotment of Rights Shares comprised in, or transfer or purported transfer of, a PAL if it: (a) appears to the Company to have been executed in, or despatched from, the Specified Territory and the acceptance may involve a breach of the laws of the Specified Territory or the acceptance is otherwise in a manner which may involve a breach of the laws of any jurisdiction or if it or its agents believe the same may violate any applicable legal or regulatory requirement; (b) provides an address in the Specified Territory for delivery of definitive share certificates for Rights Shares and such delivery would be unlawful or provides an address for delivery of definitive share certificates in any other jurisdiction outside Hong Kong in which it would be unlawful to deliver such certificates; or (c) purports to exclude the representation and/or warranty required by the paragraph immediately above.

Action to be taken by Beneficial Owners holding interests in Shares through CCASS

Subscription for Rights Shares provisionally allotted and transfers and “splitting” of nil-paid Rights Shares

If you are a Beneficial Owner whose Shares are deposited in CCASS and registered in the name of HKSCC Nominees Limited, and you wish to subscribe for the Rights Shares provisionally allotted to you, or sell your nil-paid Rights Shares or “split” your nil-paid Rights Shares and accept part of your provisional allotment and sell the remaining part, you should (unless you are a person admitted to participate in CCASS as an Investor Participant) contact your Intermediary and provide your Intermediary with instructions or make arrangements with your Intermediary in relation to the acceptance, transfer and/ or “splitting” of the rights to subscribe for Rights Shares which have been provisionally allotted in respect of the Shares in which you are beneficially interested.

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LETTER FROM THE BOARD

Such instructions and/or arrangements should be given or made in advance of the relevant dates stated in the section headed “Expected Timetable” and otherwise in accordance with the requirements of your Intermediary in order to allow your Intermediary sufficient time to ensure that your instructions are given effect. The procedure for acceptance, transfer and/or “splitting” by CCASS Participants of the Rights Shares provisionally allotted to CCASS stock accounts in respect of the Shares registered in the name of HKSCC Nominees Limited shall be in accordance with the “General Rules of CCASS”, the “CCASS Operational Procedures” and any other requirements of CCASS.

The procedures for acceptance, transfer and/or “splitting” of Rights Shares provisionally allotted to Beneficial Owners who have been admitted to participate in CCASS as Investor Participants shall be in accordance with the CCASS “Operating Guide for Investor Participants” and any other requirements of CCASS. Beneficial Owners who have been admitted to participate in CCASS as Investor Participants should contact CCASS and provide CCASS with instructions or make arrangements with CCASS in relation to the manner in which such Beneficial Owners’ interests in Rights Shares should be dealt with.

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory holding interests in Shares through CCASS

Any Beneficial Owner holding interests in Shares through CCASS who makes a valid acceptance and/or transfer in accordance with the procedures set out above represents and warrants to the Company that, except where proof has been provided to the satisfaction of the Company that such person’s acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction: (i) such person is not in the Specified Territory or in any territory in which it is otherwise unlawful to make or accept an offer to acquire nil-paid Rights Shares and/or the fully-paid Rights Shares; (ii) such person is not accepting or requesting registration of the relevant nil-paid Rights Shares and/or the fully-paid Rights Shares from within the Specified Territory; (iii) such person is not acting on a non-discretionary basis for a person located within the Specified Territory at the time the instruction to accept was given; and (iv) such person is not acquiring nil-paid Rights Shares and/ or the fully-paid Rights Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Rights Shares into the Specified Territory. For the avoidance of doubt, HKSCC Nominees Limited, who will subscribe for the Rights Shares on behalf of CCASS Participants, will not give or be subject to the above representations and warranties.

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LETTER FROM THE BOARD

The Company may treat as invalid any instruction which appears to the Company to have been despatched from the Specified Territory and which may involve a breach of the laws of the Specified Territory or any instruction which otherwise appears to the Company may involve a breach of the laws of any jurisdiction; or if the Company or its agents believes the same may violate any applicable legal or regulatory requirement; or which purports to exclude the representation and/or warranty required by the paragraph immediately above.

SHARE CERTIFICATES AND REFUND CHEQUES FOR THE RIGHTS ISSUE

Subject to the fulfilment of the conditions of the Rights Issue and the Underwriting Agreement as set out in the section below headed “Conditions of the Rights Issue and the Underwriting Agreement”, share certificates for all fully-paid Rights Shares are expected to be sent by ordinary post to those entitled thereto at their own risk on or around Wednesday, 17 February 2016.

Refund cheques in respect of wholly or partially unsuccessful applications for excess Rights Shares (if any) are expected to be sent by ordinary post on or around Wednesday, 17 February 2016 to the applicants at their own risk.

STATUS OF THE RIGHTS SHARES

The Rights Shares (when allotted, issued and fully paid) will rank pari passu in all respects with the existing Shares in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which may be declared, made or paid after the date of allotment and issue of the Rights Shares in their fully-paid form (for the avoidance of doubt, excluding the 2015 Final Dividend).

FRACTIONAL ENTITLEMENTS

The Company will not provisionally allot and will not accept application for fractions of Rights Shares in their nil-paid or fully-paid forms. No odd lot matching services will be provided. All fractions of the Rights Shares will be aggregated (rounded down to the nearest whole number). All nil-paid Rights Shares arising from such aggregation will be provisionally allotted (in nilpaid form) to the Underwriter or its nominee, and will be sold in the market and the proceeds will be retained by the Company for its own benefit, if a premium (net of expenses) can be obtained. Any unsold Rights Shares arising from such aggregation will be made available for excess application by the Qualifying Shareholders.

APPLICATION FOR EXCESS RIGHTS SHARES

The Qualifying Shareholders shall be entitled to apply for (a) any unsold Rights Shares which would have been allotted to the Non-Qualifying Shareholders had they been the Qualifying Shareholders, (b) any Rights Shares provisionally allotted but not validly accepted by the Qualifying Shareholders or otherwise subscribed for by renouncees or transferees of nil-paid Rights Shares, and (c) any unsold Rights Shares created by aggregating fractions of the Rights Shares.

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LETTER FROM THE BOARD

Action to be taken by Shareholders who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

Applications for excess Rights Shares should be made only by the Qualifying Shareholders and only by completing an EAF and lodging the same with a separate remittance for the excess Rights Shares being applied for with the Registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by no later than 4:00 p.m. on Monday, 1 February 2016 or such later time as may be agreed between the Company and the Underwriter. All remittances must be made in Hong Kong dollars and must be made either by cheques drawn on or cashier’s orders issued by a bank account in Hong Kong and made payable to “ Lai Sun Development Company Limited – Excess Application Account ” and crossed “ Account Payee Only ”.

The Board will, upon consultation with the Underwriter, allocate the excess Rights Shares being applied for at its discretion and on a fair and equitable basis and on the following principles:

no preference will be given to applications for topping-up odd-lot holdings to whole-lot holdings as the giving of such preference may potentially be abused by certain investors by splitting their nil-paid Rights Shares and thereby receiving more Rights Shares than they would receive if such preference is not given, which is an unintended and undesirable result;
subject to the availability of excess Rights Shares, the excess Rights Shares will be allocated to the Qualifying Shareholders who have applied for excess application on a pro rata basis based on the excess Rights Shares applied for by them; and
provided always that, in any event, LSG and/or the LSG Subsidiaries’ EAFs will be scaled back to ensure that out of all Shares available for subscription by EAFs, LSG and the LSG Subsidiaries will receive no more than the percentage thereof as equates to their percentage interest in the Company on the Record Date.

If no excess Rights Shares are allotted to a Qualifying Shareholder, the amount tendered on application is expected to be returned to that Qualifying Shareholder in full by cheque(s) sent by ordinary post and at his/her/its own risk on or around Wednesday, 17 February 2016. If the number of excess Rights Shares allotted to a Qualifying Shareholder is less than that applied for, the surplus application monies are also expected to be returned to him by cheque(s) sent by ordinary post and at his/her/its own risk on or around Wednesday, 17 February 2016.

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LETTER FROM THE BOARD

If the Underwriter exercises its right to terminate the Underwriting Agreement before 4:00 p.m. on the Settlement Date, the monies received in respect of relevant applications for excess Rights Shares will be returned to the relevant persons without interest, by means of cheques sent by ordinary post at the risk of such persons on or around Wednesday, 17 February 2016.

All cheques or cashier’s orders will be presented for payment following receipt and all interest earned on such monies will be retained for the benefit of the Company. Completion and lodgment of an EAF together with a cheque or cashier’s order in payment for the Rights Shares applied for will constitute a warranty by the applicant that the cheque or cashier’s order will be honoured on first presentation. Without prejudice to its other rights in respect thereof, the Company reserves the right to reject any EAF in respect of which the cheque or cashier’s order is dishonoured on first presentation. The EAF is for use only by the person(s) to whom it is addressed and is not transferable. All documents, including cheques or cashier’s orders for amounts due, will be sent by ordinary mail at the risk of the persons entitled thereto to their registered addresses by the Registrar. The Company may, at its discretion, treat an EAF as valid and binding on the person(s) by whom or on whose behalf it is lodged even if not completed in accordance with the relevant instructions.

Important notice and representations and warranties relating to Shareholders in the Specified Territory

What is set out under the heading “Important notice and representations and warranties relating to Shareholders in the Specified Territory” on page 27 above in the section dealing with “Procedures for Acceptance or Transfer” of the nil-paid Rights Shares and fully-paid Rights Shares also applies to applications for excess Rights Shares, with appropriate changes to reflect that the context is an application for excess Rights Shares.

Action to be taken by Beneficial Owners whose Shares are held by a Registered Owner (other than Shares deposited in CCASS) who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

If you are a Beneficial Owner whose Shares are registered in the name of a Registered Owner and you wish to apply for excess Rights Shares, you should contact the Registered Owner and provide the Registered Owner with instructions or make arrangements with the Registered Owner in relation to such application. Such instructions and/or arrangements should be given or made in advance of the latest time for application and payment for excess Rights Shares stated in the section headed “Expected Timetable” and otherwise in accordance with the requirements of the Registered Owner, in order to allow the Registered Owner sufficient time to ensure that your instructions are given effect.

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LETTER FROM THE BOARD

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory whose Shares are held by a Registered Owner (other than CCASS)

What is set out under the heading “Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory whose Shares are held by a Registered Owner (other than CCASS)” on page 28 above in the section dealing with “Procedures for Acceptance or Transfer” of the nil-paid Rights Shares and fully-paid Rights Shares also applies to applications for excess Rights Shares, with appropriate changes to reflect that the context is an application for excess Rights Shares.

Action to be taken by Beneficial Owners holding interest in Shares through CCASS who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

If you are a Beneficial Owner whose Shares are deposited in CCASS and registered in the name of HKSCC Nominees Limited, and you wish to apply for excess Rights Shares, you should (unless you are a person admitted to participate in CCASS as an Investor Participant) contact your Intermediary and provide your Intermediary with instructions or make arrangements with your Intermediary in relation to the application for excess Rights Shares. Such instructions and/ or arrangements should be given or made in advance of the date stated in the section headed “Expected Timetable” as the latest time for application and payment for excess Rights Shares and otherwise in accordance with the requirements of your Intermediary, in order to allow your Intermediary sufficient time to ensure that your instructions are given effect. The procedure for application for excess Rights Shares shall be in accordance with the “General Rules of CCASS”, the “CCASS Operational Procedures” and any other requirements of CCASS.

The procedures for application for excess Rights Shares by Beneficial Owners who have been admitted to participate in CCASS as Investor Participants shall be in accordance with the CCASS “Operating Guide for Investor Participants” and any other requirements of CCASS. Beneficial Owners who have been admitted to participate in CCASS as Investor Participants should contact CCASS to provide CCASS with instructions or make arrangements with CCASS in relation to any applications for excess Rights Shares.

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory holding interests in Shares through CCASS

What is set out under the heading “Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory holding interests in Shares through CCASS” on page 30 above in the section dealing with “Procedures for Acceptance or Transfer” of the nil-paid Rights Shares and the fully-paid Rights Shares also applies to applications for excess Rights Shares, with appropriate changes to reflect that the context is an application for excess Rights Shares.

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LETTER FROM THE BOARD

Important notice for Investors

Investors whose Shares are held by a nominee company (or which are held in CCASS) should note that the Board will regard the nominee company (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, investors whose Shares are registered in the name of a nominee (or which are held in CCASS) should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to them individually. Beneficial owners with their Shares held by a nominee company (or which are held in CCASS) are advised to consider whether they would like to arrange for the relevant Shares to be registered in their own names prior to the Record Date.

Investors whose Shares are held by nominee(s) (or which are held in CCASS) and who would like to have their name registered on the register of members of the Company must lodge all necessary documents with the Registrar for completion of the relevant registration by 4:30 p.m. on Wednesday, 13 January 2016.

APPLICATION FOR LISTING AND DEALING ARRANGEMENTS

The Company has applied to the Listing Committee of the Stock Exchange for the listing of and permission to deal in the Rights Shares, in both their nil-paid and fully-paid forms. It is expected that dealings in the Rights Shares in their nil-paid form will take place from Wednesday, 20 January 2016 to Wednesday, 27 January 2016 (both days inclusive) and that dealings in the Rights Shares in their fully-paid form will commence on Thursday, 18 February 2016. No part of the Shares in issue or for which listing or permission to deal is being sought are listed or dealt in on any other stock exchange.

Dealings in the Rights Shares (in both nil-paid and fully-paid forms) will be subject to the payment of stamp duty, Stock Exchange trading fee, SFC transaction levy, if any, and other applicable fees and charges in Hong Kong.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms, on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement dates of dealings in the Rights Shares on the Stock Exchange in both their nil-paid and fully-paid forms, or such other dates as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter.

All activities under CCASS are subject to the “General Rules of CCASS” and “CCASS Operational Procedures” in effect from time to time. Shareholders and investors should seek advice from a licensed securities dealer or other professional adviser for details of those settlement arrangements and how such arrangements will affect their rights and interests.

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LETTER FROM THE BOARD

Dealings in the Rights Shares in both their nil-paid and fully-paid forms, both in board lots of 15,000 (as the Shares are currently traded on the Stock Exchange in board lots of 15,000), will be subject to the payment of stamp duty (see below under the section headed “Hong Kong Taxation”) and other applicable fees in Hong Kong. Shareholders and Beneficial Owners should seek advice from their stockbroker or other professional adviser for details of those settlement arrangements and how such arrangements will affect their rights and interests.

HONG KONG TAXATION

Shareholders are advised to consult their professional advisers if they are in any doubt as to the taxation implications of the receipt, purchase, holding, exercising, disposing of or dealing in, the nil-paid Rights Shares or the Rights Shares and, regarding Non-Qualifying Shareholders, their receipt of the net proceeds, if any, from sales of the nil-paid Rights Shares on their behalf.

UNDERWRITING ARRANGEMENT FOR THE RIGHTS ISSUE

Underwriting Agreement

Terms of the Underwriting Agreement

Date: 17 November 2015 Underwriter: LSG, whose ordinary and usual course of business does not include the underwriting of securities Number of Rights Shares: 10,047,266,781 (assuming no change in the Company’s issued share capital prior to the Record Date) Number of Underwritten Shares: 4,834,417,105 Underwritten Shares (assuming no change in the Company’s issued share capital prior to the Record Date), which figure excludes the 5,212,849,676 Committed Shares to be provisionally allotted to the Undertaking Shareholders Commission: 2% of the aggregate Subscription Price of the total Underwritten Shares, which amounts to approximately HK$8.9 million (assuming no change in the Company’s issued share capital prior to the Record Date)

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LETTER FROM THE BOARD

LSG (together with the LSG Subsidiaries) holds Shares representing approximately 51.88% of the Company’s issued share capital as at the Latest Practicable Date. This makes LSG the controlling shareholder of the Company and a connected person of the Company for the purposes of the Listing Rules. The Underwriting Agreement therefore represents a connected transaction for the Company. In turn, the Proposed Subscription, representing LSG’s aggregate commitments under the Underwriting Agreement, would amount to a major transaction for LSG.

The impact of the Rights Issue, for the purposes of the Listing Rules, so far as both the Company and LSG are concerned, is set out further below under the heading “Listing Rules implications”.

Subject to the fulfilment of the conditions (or any waiver, as the case may be, by the Underwriter) contained in the Underwriting Agreement and provided that the Underwriting Agreement is not terminated prior to the Latest Time for Termination in accordance with the terms thereof, the Underwriter has agreed to subscribe or procure the subscription for all Underwritten Shares that are not taken up by the Qualifying Shareholders.

The Board considers that the Underwriting Agreement is on normal commercial terms and is fair and reasonable so far as the Company and the Shareholders are concerned.

Save for the Undertaking, as at the date of the Latest Practicable Date, the Board has not received any information from any other Shareholders of their intention to take up their assured entitlements under the Rights Issue.

CONDITIONS TO THE RIGHTS ISSUE AND THE UNDERWRITING AGREEMENT

The Rights Issue is conditional upon (i) LSG obtaining the approval of its shareholders in general meeting necessary to enable LSG and the LSG Subsidiaries to implement the Proposed Subscription in full, and in full compliance with the Listing Rules, which approval was obtained at the LSG GM; (ii) the Underwriting Agreement becoming unconditional and not being terminated; and (iii) permission to deal in and listing of all the Rights Shares (in their nil-paid and fully-paid forms) being granted by the Stock Exchange and not being withdrawn or revoked prior to the Latest Time for Termination.

The obligations of the Underwriter to subscribe and underwrite Right Shares under the Underwriting Agreement are conditional on the fulfilment or waiver (as described below) of the following conditions:

(a) LSG having obtained approval of its shareholders in general meeting necessary to enable LSG and the LSG Subsidiaries to implement the Proposed Subscription in full, and in full compliance with the Listing Rules, which approval was obtained at the LSG GM;
(b) the registration by and filing with the Registrar of Companies in Hong Kong of the Prospectus Documents;
(c) the posting of copies of the Prospectus Documents to Qualifying Shareholders on or before the Posting Date;

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LETTER FROM THE BOARD

(d) the Listing Committee of the Stock Exchange granting listing of, and permission to deal in, the Rights Shares in their nil-paid form and fully-paid form and such listing and permission to deal not being withdrawn or revoked by no later than the first day of their dealings;
(e) the Shares remaining listed on the Stock Exchange at all times prior to the Latest Time for Termination and the listing of the Shares not having been withdrawn or the trading for the Shares not having been suspended for a consecutive period of more than 5 trading days; and
(f) no material breach of the warranties specified in the Underwriting Agreement having been committed by the Company as of the Latest Time for Termination.

The Underwriter shall use its reasonable endeavours to procure the fulfilment of condition (a) above; and the Company shall use its reasonable endeavours to procure the fulfilment of conditions (b) to (f), inclusive, above. The Underwriter shall have the right to waive either or both of conditions (e) and (f) above, but otherwise none of the conditions may be waived by either party.

In the event that the conditions mentioned above have not been fulfilled or (as applicable) waived on or before the respective dates aforesaid or such later date or dates as may be agreed between the Company and the Underwriter, in any event on or before 31 March 2016 or such later date as may be agreed between the Company and the Underwriter, or if the Underwriting Agreement shall be rescinded or terminated, all obligations and liabilities of the parties pursuant to the Underwriting Agreement will forthwith cease and determine and neither party will have any claim against the other (save in respect of any antecedent breaches thereof).

If the Underwriting Agreement does not become unconditional or is rescinded or terminated in accordance with its terms, the Rights Issue will not proceed.

TERMINATION OF THE UNDERWRITING AGREEMENT

The Underwriter reserves the right (but shall not be obliged to do so) to rescind or terminate the arrangements set out in the Underwriting Agreement by notice in writing given by it to the Company at any time prior to 4:00 p.m. on the fourth Business Day following the Latest Acceptance Date, if in the sole and absolute opinion of the Underwriter acting in good faith:

(a) the success of the Rights Issue would be materially and adversely affected by:
(i) the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may materially adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

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LETTER FROM THE BOARD

(ii) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic, currency or other nature (whether or not sui generis with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities market or the occurrence of any combination of circumstances which materially adversely affects the business or the financial or trading position or prospects of the Group as a whole or materially adversely prejudices the success of the Rights Issue or otherwise makes it inexpedient or inadvisable for the Company or the Underwriter to proceed with the Rights Issue; or
(iii) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out which would, in the absolute opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or
(b) any material adverse change in market conditions or combination of circumstances in Hong Kong or elsewhere (including without limitation suspension or material restriction or trading in securities) occurs which may adversely and materially affect the success of the Rights Issue.

Upon the giving of notice by the Underwriter to rescind or terminate the Underwriting Agreement, all obligations of the Underwriter shall cease and determine and neither party shall have any claim against the other in respect of any matter or thing arising out of or in connection with the Underwriting Agreement (save for any antecedent breaches thereof). If the Underwriter exercises such right, the Rights Issue will not proceed.

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

The Shares have been dealt with on an ex-rights basis since Tuesday, 12 January 2016. The Rights Shares are expected to be dealt with in their nil-paid form from Wednesday, 20 January 2016 to Wednesday, 27 January 2016 (both dates inclusive).

The Rights Issue is conditional upon the Underwriting Agreement becoming unconditional and not being rescinded or terminated in accordance with its terms. If the conditions of the Rights Issue are not fulfilled, the Rights Issue will not proceed. Any persons dealing in Shares or Rights Shares in their nil-paid form, or in any other securities of the Company, up to the date on which all the conditions to which the Rights Issue is subject have been fulfilled and the Underwriter’s right to terminate the Underwriting Agreement has ceased, will accordingly bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholders or other persons contemplating any dealings in the Shares or Rights Shares in their nil-paid form, or in any other securities of the Company, are advised to exercise caution and to consult their professional advisers.

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LETTER FROM THE BOARD

EFFECT OF THE RIGHTS ISSUE ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The changes in the shareholding structure of the Company arising from the Rights Issue (assuming there is no change in the shareholding structure of the Company from the Latest Practicable Date to completion of the Rights Issue and that there are no Non-Qualifying Shareholders) are as follows:

Name of the Shareholder Dr. Lam_(Note 1) LSG(Note 1) The Directors(Note 2)_ Public Shareholders Total	As at the Latest Practicable Date Approximate % of the total No. of Shares issued Shares 14,307,745 0.07 10,425,699,353 51.88 9,680,649 0.05 9,644,845,816 48.00 20,094,533,563 100.00	Shareholdings immediately after completion of the Rights Issue Assuming 0% taken up by the Qualifying Shareholders (other than the Assuming 100% taken up by Undertaking Shareholders) all Qualifying Shareholders Approximate Approximate % of the total % of the total No. of Shares issued Shares No. of Shares issued Shares 14,307,745 0.05 21,461,617 0.07 20,472,966,134 67.92 15,638,549,029 51.88 9,680,649 0.03 14,520,974 0.05 9,644,845,816 32.00 14,467,268,724 48.00 30,141,800,344 100.00 30,141,800,344 100.00	Shareholdings immediately after completion of the Rights Issue Assuming 0% taken up by the Qualifying Shareholders (other than the Assuming 100% taken up by Undertaking Shareholders) all Qualifying Shareholders Approximate Approximate % of the total % of the total No. of Shares issued Shares No. of Shares issued Shares 14,307,745 0.05 21,461,617 0.07 20,472,966,134 67.92 15,638,549,029 51.88 9,680,649 0.03 14,520,974 0.05 9,644,845,816 32.00 14,467,268,724 48.00 30,141,800,344 100.00 30,141,800,344 100.00
			100.00

Notes:

(1) LSG is approximately 12.55% directly beneficially owned by Dr. Lam and is approximately 29.74% owned by Wisdoman Limited which is in turn 100% owned by Dr. Lam. In addition, LSG, by itself and through the LSG Subsidiaries, namely Joy Mind Limited and Zimba International Limited, hold an aggregate of 10,425,699,353 Shares, representing approximately 51.88% of the issued share capital of LSD.
(2) This represents the aggregate shareholding of the Directors other than Dr. Lam.

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

Reasons for the Rights Issue

The Company has been expanding investments in its portfolio of businesses successfully and generated robust financial results. The Directors believe that it is in the best interest of the Company and the Shareholders as a whole to enlarge the capital base of the Company through the Rights Issue in order to support the continuing development of the Group’s existing business activities and to replenish the Company’s cash reserves, as well as improving the Company’s financial position. The Rights Issue enables the Company to carry out a fund raising exercise while the Qualifying Shareholders are given the opportunity to maintain their respective pro rata shareholding interests in the Company by participating in the Rights Issue. However, those Qualifying Shareholders who do not take up the Rights Shares to which they are entitled and Non-Qualifying Shareholders should note that their shareholdings in the Company will be diluted.

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LETTER FROM THE BOARD

Use of Proceeds

The estimated net proceeds of the Rights Issue will be approximately HK$912.1 million. The Company intends to apply the net proceeds of the Rights Issue for general working capital purposes.

The expenses of the Rights Issue (including the underwriting commission, printing, registration, translation, legal, accounting and documentation charges) are estimated to be approximately HK$12.2 million and will be payable by the Company. The net subscription price per Rights Share upon full acceptance of the relevant provisional allotment of Rights Shares is expected to be approximately HK$0.091 per Rights Share.

EQUITY FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not engaged in or initiated any equity fund raising exercises or any rights issue exercise during the past 12 months immediately before the Latest Practicable Date.

ADJUSTMENT TO SHARE OPTIONS

The Rights Issue may lead to adjustment(s) to the number of Shares subject to the Share Options and the relevant option exercise price following completion of the Rights Issue. The Company will ascertain the required adjustment(s), if any, and inform the holders of the Share Options of the required adjustment(s) as soon as practicable. Any such adjustment(s) to the option exercise price will comply with the supplemental guidance issued by the Stock Exchange on 5 September 2005 and will be reviewed by an independent financial adviser or the Company’s auditor. A further announcement will be made in relation to any adjustment(s) to the Share Options and the date they are expected to take effect once determined by the Company.

LISTING RULES IMPLICATIONS

No shareholders’ approval

There is no requirement under the Listing Rules for the Rights Issue to be approved by the Shareholders in general meeting.

This is because the Rights Issue does not increase the number of issued shares or the market capitalisation of the Company by more than 50% (on its own or when aggregated with any other rights issues or open offers announced or completed within the past 12 months) and because, notwithstanding the Rights Issue being underwritten by a connected person of the Company, the Company has made arrangements of the type described in Rule 7.21(1) of the Listing Rules for the disposal of Rights Shares not subscribed by allottees under PALs or their renouncees. These arrangements include making available to all Qualifying Shareholders the ability to subscribe Rights Shares not subscribed by allottees under PALs or their renouncees, to be allocated on a fair basis as described above under the heading “Application for excess Rights Shares”.

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LETTER FROM THE BOARD

Under this fair basis, LSG or the LSG Subsidiaries’ ability to subscribe unwanted Rights Shares by way of EAFs will be treated in the same manner as all other Qualifying Shareholders who submit EAFs, save that, in any event, applications by LSG and the LSG Subsidiaries, will be scaled back to ensure that LSG and the LSG Subsidiaries entitlement to such unwanted Rights Shares is capped at the same percentage interest which LSG and the LSG Subsidiaries collectively hold in the Shares on the Record Date.

Furthermore, on the basis that the Rights Shares are being offered to Shareholders pro rata to their existing shareholdings (apart from fractional entitlements to Rights Shares and the exclusion of Non-Qualifying Shareholders on the basis described above), in accordance with Rule 13.36(2)(a) of the Listing Rules, there is no requirement for the Rights Issue to be approved by Shareholders in general meeting, nor for the Directors to issue the Rights Shares pursuant to the current general mandate granted to the Directors at the 2015 annual general meeting of the Company.

Connected Transaction

The Underwriting Agreement constitutes a connected transaction for the Company under the Listing Rules. This is because LSG, as underwriter, is the controlling shareholder of the Company and is therefore a connected person of the Company. Subscription by LSG and the LSG Subsidiaries of the Committed Shares, representing their pro-rata entitlement to Rights Shares, is, so far as the Company is concerned, fully exempt from shareholders’ approval, annual review and all disclosure requirements under Rule 14A.92(1) of the Listing Rules. Subscription by LSG and the LSG Subsidiaries for the Underwritten Shares through EAFs and/or on the basis of subscribing all Untaken Shares is, so far as the Company is concerned, fully exempt from shareholders’ approval, annual review and all disclosure requirements under Rule 14A.92(2) of the Listing Rules, on the basis that a fair arrangement to dispose of unwanted Rights Shares of the type described in Rule 7.21(1) of the Listing Rules will be implemented, as described above.

Pursuant to the Underwriting Agreement, the Company will pay an underwriting commission at the rate of 2% to LSG in respect of all of the Underwritten Shares. As the relevant Percentage Ratios regarding the amount of the underwriting commission payable by the Company are less than 5%, the underwriting commission constitutes, so far as the Company is concerned, a connected transaction exempt from the circular (including independent financial advice) and shareholders’ approval requirements of the Listing Rules by virtue of Rule 14A.76(2) of the Listing Rules. The Directors (including for these purposes the independent non-executive Directors) are satisfied that the terms of the underwriting commission, and the Underwriting Agreement generally, are fair and reasonable and represents normal commercial terms or better so far as the Company is concerned, and are in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

GENERAL

The principal business activities of the Company and its subsidiaries are property development for sale, property investment, investment in and operation of hotels, investment in and operation of restaurants and investment holding. The Company, through one of its subsidiaries, owns an approximate 41.92% shareholding interest in eSun, which is an investment holding company and the principal business activities of the subsidiaries of eSun include the development, operation of and investment in media and entertainment, music production and distribution, the investment in and production and distribution of television programmes, film and video format products, cinema operation, the sale of cosmetic products as well as property development for sale and property investment for rental purposes. eSun also owns a 51.30% shareholding interest in Lai Fung which is an investment holding company and the principal business activities of the subsidiaries of Lai Fung are property investment and development in the PRC.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this Prospectus.

Yours faithfully, For and on behalf of the Board of Lai Sun Development Company Limited Chew Fook Aun Executive Director and Deputy Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SUMMARY OF FINANCIAL RESULTS AND CONDITIONS OF THE GROUP

Financial information of the Group for each of the three years ended 31 July 2013, 2014 and 2015 are disclosed in the following documents which have been published on the websites of the Stock Exchange at “http://www.hkexnews.hk” and the Company at “http://www.laisun.com”:

annual report of the Company for the year ended 31 July 2013 published on 23 October 2013 (pages 57 to 147);
annual report of the Company for the year ended 31 July 2014 published on 7 November 2014 (pages 58 to 152); and
annual report of the Company for the year ended 31 July 2015 published on 11 November 2015 (pages 65 to 152).

2. INDEBTEDNESS AND BORROWINGS

As at 30 November 2015, the Group had bank borrowings of approximately HK$5,204.7 million and guaranteed notes of approximately HK$2,704.0 million.

As at 30 November 2015, certain investment properties with carrying amounts of approximately HK$15,026.0 million (being their carrying amounts as at 31 July 2015 as disclosed in the annual report of the Company for the year ended 31 July 2015), certain property, plant and equipment with carrying amounts of HK$1,983.2 million, certain properties under development for sale of approximately HK$571.9 million, and certain bank balances and time deposits with banks of approximately HK$153.6 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 banking facilities granted to the Group. Certain shares in joint ventures held by the Group were pledged to banks to secure banking 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.

As at 30 November 2015, the Group had the following material contingent liabilities:

(a) Guarantees given to banks in connection with facilities granted to and utilised by a joint venture HK$754,000,000

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Pursuant to an indemnity deed (the “ Lai Fung Tax Indemnity Deed ”) dated 12 November 1997 entered into between LSD and Lai Fung, the Company has undertaken to indemnify Lai Fung in respect of certain potential PRC income tax and land appreciation tax (“ LAT ”) 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 (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 held by Lai Fung as at 30 November 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 approximately HK$1,350,000,000.

After taking into account the plans and the status of the Property Interests held by Lai Fung as at 30 November 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 Group recorded an aggregate provision for tax indemnity of approximately HK$729,387,000.

Save as disclosed above and apart from any intra-group liabilities and normal trade payables in the ordinary course of business, as at 30 November 2015, the Group did not have any debt securities authorised or created but unissued, issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, finance leases, hire purchase commitments, guarantees or other material contingent liabilities.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

There is no material change in the Group’s outstanding indebtedness and contingent liabilities from 30 November 2015 to the Latest Practicable Date.

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the estimated net proceeds from the proposed Rights Issue, the internal resources and the presently available banking facilities of the Group and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements for at least twelve months from the date of the Prospectus.

4. GENERAL BUSINESS TRENDS AND FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is engaged in property investment, property development, investment in and operation of hotels and restaurants and investment holding.

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 People’s Republic of China (“ 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Property Investment

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. For the year ended 31 July 2015, 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. 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 Latest Practicable Date, approximately 61% of the floor area of the building has been leased. The Hong Kong Ocean Park Marriott Hotel (“ Ocean Hotel ”), to be operated by the Marriott group, will provide a total of 471 rooms and approximately 366,000 square feet of attributable rental space to the existing rental portfolio attributable to the Group of approximately 1.8 million square feet.

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. 3 out of 9 units of the 339 Tai Hang Road luxury residential property were sold during the year ended 31 July 2015 with another 2 units sold post year end.

Further to securing the Tseung Kwan O site in November 2012, the Group continued to participate in government tenders to grow the pipeline. In April 2014, the Group successfully secured the Urban Renewal Authority project in Ma Tau Kok, Kowloon, Hong Kong which will be developed into middle class residential units for sale with total GFA of approximately 111,444 square feet. In September 2015, the Group was successful in its bid for the development rights to the Sai Wan Ho Street project from the Urban Renewal Authority in Shau Kei Wan, Hong Kong. Upon completion, it is planned to provide about 140 residential units with a total GFA of approximately 64,303 square feet.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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:

				Expected
				Completion
Date	Secured Projects	Total GFA	Use	Date
		(square feet)
Hong Kong	Development Properties
November 2012	Tseung Kwan O Project	572,852	Commercial/Residential	Q4 2017
April 2014	Ma Tau Kok Project	111,444	Commercial/Residential	Q1 2018
May 2014	Ocean Hotel Project	366,000	Hotel	Q4 2017
September 2015	Sai Wan Ho Street Project	64,303	Commercial/Residential	2020
London,	Investment Properties
United Kingdom
April 2014	107-112 Leadenhall Street	146,600	Office	N/A
November 2014	100 Leadenhall Street	177,700	Office	N/A
December 2015	106 Leadenhall Street	12,700	Office	N/A

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.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

Introduction

The unaudited pro forma statement of adjusted consolidated net tangible assets (the “ Unaudited Pro Forma Financial Information ”) of the Group has been prepared by the Directors in accordance with Paragraph 4.29 of the Listing Rules to illustrate the effect of the Rights Issue on the consolidated net tangible assets of the Group as if the Rights Issue had taken place on 31 July 2015.

The Unaudited Pro Forma Financial Information of the Group is prepared based on the audited consolidated net assets of the Group as at 31 July 2015, as extracted from the published annual report of the Group for the year ended 31 July 2015, after incorporating the unaudited pro forma adjustments described in the accompanying notes.

The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the consolidated net tangible assets of the Group following the Rights Issue as at the date to which it is made up or at any future date.

Consolidated net tangible assets Audited consolidated net tangible assets per Share attributable to owners of the Company, prior to the completion of the Rights Issue (Note 3) Unaudited pro forma adjusted consolidated net tangible assets per Share attributable to owners of the Company, after the completion of the Rights Issue_(Note 4)_	Audited consolidated net tangible assets of the Group attributable to owners of the Company as at 31 July 2015 HK$’000 (Note 1) 22,662,543 HK$1.128	Unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company after Estimated net completion of the proceeds from Rights Issue as the Rights Issue at 31 July 2015 HK$’000 HK$’000 (Note 2) 912,121 23,574,664 HK$0.782	Unaudited pro forma adjusted consolidated net tangible assets of the Group attributable to owners of the Company after Estimated net completion of the proceeds from Rights Issue as the Rights Issue at 31 July 2015 HK$’000 HK$’000 (Note 2) 912,121 23,574,664 HK$0.782

			HK$0.782

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Notes:

(1) The audited consolidated net tangible assets of the Group attributable to the owners of the Company as at 31 July 2015 is extracted from the published annual report of the Group for the year ended 31 July 2015.
(2) The estimated net proceeds from the Rights Issue of approximately HK$912,121,000 are based on 10,047,266,781 Rights Shares to be issued (in the proportion of 1 Rights Share for every 2 existing Shares held on the Record Date which is 20,094,533,563 Shares at the subscription price of HK$0.092 per Rights Share) and after the deduction of estimated related expenses of approximately HK$12,228,000.
(3) The calculation of audited consolidated net tangible assets per Share attributable to owners of the Company prior to the completion of the Rights Issue is based on 20,094,533,563 Shares in issue as at 31 July 2015.
(4) The calculation of unaudited pro forma adjusted consolidated net tangible assets per Share attributable to owners of the Company after the completion of the Rights Issue is based on 30,141,800,344 Shares which comprise of 20,094,533,563 Shares in issue as at 31 July 2015 and 10,047,266,781 Rights Shares to be issued.
(5) No adjustment has been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 July 2015.

– 50 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE UNAUDITED PRO FORMA ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

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To the Directors of Lai Sun Development Company Limited

We have completed our assurance engagement to report on the compilation of pro forma financial information of Lai Sun Development Company Limited (the “ Company ”) and its subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purposes only. The pro forma financial information (the “ Pro Forma Financial Information ”) consists of the pro forma consolidated net tangible assets as at 31 July 2015 and related notes as set out in Appendix II of the prospectus dated 18 January 2016 issued by the Company (the “ Prospectus ”). The applicable criteria on the basis of which the Directors have compiled the Pro Forma Financial Information are described in Appendix II of the Prospectus.

The Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of proposed rights issue of the Company (the “ Proposed Rights Issue ”) on the Group’s financial position as at 31 July 2015. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s financial statements for the year ended 31 July 2015, on which an annual report has been published.

Directors’ responsibility for the Pro Forma Financial Information

The Directors are responsible for compiling the Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline (“ AG ”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”).

Our independence and quality control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

– 51 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Our firm applies Hong Kong Standard on Quality Control 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements , and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting accountants’ responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Pro Forma Financial Information.

The purpose of the Pro Forma Financial Information included in the Prospectus is solely to illustrate the impact of Proposed Rights Issue of the Company on unadjusted financial information of the Group as if the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the transaction would have been as presented.

A reasonable assurance engagement to report on whether the Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the transaction, and to obtain sufficient appropriate evidence about whether:

the related pro forma adjustments give appropriate effect to those criteria; and
the Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

– 52 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

The procedures selected depend on the reporting accountants’ judgment, having regard to the reporting accountants’ understanding of the nature of the Group, the transaction in respect of which the Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,

Ernst & Young

Certified Public Accountants

22/F CITIC TOWER

1 Tim Mei Avenue Central, Hong Kong

18 January 2016

– 53 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This Prospectus, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this Prospectus is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this Prospectus misleading.

2. PARTICULARS OF DIRECTORS AND SENIOR MANAGEMENT

(a) Business address

The business address of all the Directors is the same as the address of the Company’s registered office at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong.

(b) Brief biographical details

Executive Directors

Each of the current executive directors of the Company (“ Executive Directors ”) named below holds directorships in a number or certain of the subsidiaries of the Company and all of them hold directorships in all or certain of the Company’s listed affiliates, namely Lai Sun Garment (International) Limited (“ LSG ”), eSun Holdings Limited (“ eSun ”), Lai Fung Holdings Limited (“ Lai Fung ”) and Media Asia Group Holdings Limited (“ MAGH ”). The issued shares of LSG, eSun and Lai Fung are listed and traded on the Stock Exchange and MAGH’s issued shares are listed and traded on the Growth Enterprise Market of the Stock Exchange. LSG is the ultimate holding company of the Company which in turn is the controlling shareholder of eSun, while eSun is the ultimate holding company of Lai Fung and MAGH.

Dr. Lam Kin Ngok, Peter , Chairman, aged 58, has been an Executive Director since June 1977 and is presently a member of the Executive Committee of the Company. He is also the deputy chairman and executive director of LSG and an executive director of Crocodile Garments Limited (“ CGL ”), a company listed on the Main Board of the Stock Exchange as well as the chairman and an executive director of MAGH. Dr. Lam was an executive director of eSun from 15 October 1996 to 14 February 2014. Dr. Lam was the chairman and an executive director of Lai Fung from 25 November 1993 to 31 October 2012. Dr. Lam has extensive experience in the property development and investment business, hospitality and media and entertainment business. He was conferred an Honorary Doctorate by The Hong Kong Academy for Performing Arts in June 2011. Dr. Lam received the Gold Bauhinia Star award from the Government of the HKSAR on 1 July 2015.

– 54 –

GENERAL INFORMATION

APPENDIX III

Currently, Dr. Lam is the chairman of the Hong Kong Tourism Board and an ex officio member of the Hong Kong Trade Development Council. He is also a member of the 12th National Committee of the Chinese People’s Political Consultative Conference and the vice chairman of the Committee for Liaison with Hong Kong, Macau, Taiwan and Overseas Chinese. In addition, Dr. Lam is chairman of Hong Kong Chamber of Films Limited, honorary chairman of Hong Kong Motion Picture Industry Association Limited, a director of The Real Estate Developers Association of Hong Kong, a trustee of The Better Hong Kong Foundation, a member of Friends of Hong Kong Association Limited, a director of Hong Kong-Vietnam Chamber of Commerce Limited, a non-official member of the Consultative Committee on Economic and Trade Co-operation between Hong Kong and the Mainland and a non-official member of the Lantau Development Advisory Committee. On 24 July 2015, Dr. Lam was appointed a member of Aviation Development and Threerunway System Advisory Committee for a term of two years from 1 August 2015 to 31 July 2017. Dr. Lam was appointed an honorary chairman of Federation of HK Jiangsu Community Organisations on 20 May 2015 and the chairman of Hong Kong Cultural Development Research Institute Limited on May 2015.

Dr. Lam is the son of Madam U Po Chu (a Non-executive Director of the Company), the younger brother of Dr. Lam Kin Ming (another Non-executive Director of the Company) and the father of Mr. Lam Hau Yin, Lester (an Executive Director of the Company).

Mr. Chew Fook Aun , aged 53, was appointed the Deputy Chairman and an Executive Director on 5 June 2012 and is presently a member of the Executive Committee and Remuneration Committee. He was also appointed a deputy chairman and an executive director of LSG, an executive director of eSun and the chairman and an executive director of Lai Fung.

Mr. Chew has over 30 years of experience in accounting, auditing and finance in the United Kingdom (“ UK ”) and Hong Kong. He graduated from the London School of Economics and Political Science of the University of London in the UK with a Bachelor of Science (Economics) Degree. Mr. Chew is a fellow member of both the Hong Kong Institute of Certified Public Accountants (“ HKICPA ”) and The Institute of Chartered Accountants in England and Wales. He was also a council member of the HKICPA and its vice president in 2010. Mr. Chew is currently a member of the Operations Review Committee of the Independent Commission Against Corruption (“ ICAC ”) and a council member of the Financial Reporting Council, all being organisations established in Hong Kong. He also served as a member of the advisory committee of the Securities and Futures Commission from June 2007 to May 2013, a member of the Corruption Prevention Advisory Committee of the ICAC from January 2009 to December 2014 and a member of the Standing Committee on Company Law Reform of the Companies Registry from February 2011 to January 2015. Mr. Chew was appointed a member of the Barristers Disciplinary Tribunal Panel for a five-year term with effect from 1 September 2015.

– 55 –

GENERAL INFORMATION

APPENDIX III

Prior to joining the Lai Sun Group, Mr. Chew was an executive director and the group chief financial officer of Esprit Holdings Limited (“ Esprit ”) from 1 February 2009 to 1 May 2012, an executive director and the chief financial officer of The Link Management Limited acting as manager of The Link Real Estate Investment Trust (“ Link REIT ”) from February 2007 to January 2009. He was also the chief financial officer of Kerry Properties Limited (“ Kerry Properties ”) from 1996 to 2004, a director of corporate finance for Kerry Holdings Limited from 1998 to 2004 and an executive director of Kyard Limited in charge of the property portfolio of a private family office from 2004 to 2007. The issued shares of Esprit and Kerry Properties and the issued units of the Link REIT are listed and traded on the Stock Exchange.

Mr. Lau Shu Yan, Julius , Chief Executive Officer, aged 59, joined the Company as an Executive Director in July 1991 and is a member of the Executive Committee of the Company. Mr. Lau was an executive director of Lai Fung from 22 April 2005 to 16 January 2015. Prior to joining the Lai Sun Group, he was a director of Jones Lang Wootton Limited and subsequently Jardine Fleming Broking Limited. Mr. Lau is a director and a member of the Executive Committee of The Real Estate Developers Association of Hong Kong. He was appointed a consultant of Lai Fung with effect from 17 January 2015. Mr. Lau was graduated with an honour degree of Bachelor of Social Science from the University of Hong Kong in 1980.

Mr. Lam Hau Yin, Lester , aged 34, was appointed an Executive Director and a member of the Executive Committee of the Company with effect from 1 November 2012. He is also an executive director of LSG and eSun as well as an executive director and the chief executive officer of Lai Fung. Further, Mr. Lam is an alternate director to Madam U Po Chu in her capacity as an executive director of LSG.

Mr. Lam holds a Bachelor of Science in Business Administration degree from Northeastern University, Boston, the United States of America. He joined the Company as a vice president in January 2004 and has acquired working experience since 1999 in various companies engaged in securities investment, hotel operations, environmental products, entertainment and property development and investment.

Mr. Lam is a son of Dr. Lam Kin Ngok, Peter (Chairman and an Executive Director of the Company), a nephew of Dr. Lam Kin Ming (a Non-executive Director of the Company) and a grandson of Madam U Po Chu (another Non-executive Director of the Company).

– 56 –

GENERAL INFORMATION

APPENDIX III

Non-executive Directors

Dr. Lam Kin Ming , aged 78, has been a Director of the Company since June 1959 and presently a member of the Audit Committee. He is also the chairman and an executive director of LSG, the deputy chairman and an executive director of Lai Fung and the chairman, the chief executive officer and an executive director of CGL. The issued shares of LSG, Lai Fung and CGL are listed and traded on the Main Board of the Stock Exchange. LSG is the ultimate holding company of the Company. Dr. Lam has been involved in the management of garment business since 1958. He received an honorary doctorate degree from the International American University in the United States of America in 2009 and was admitted as Honorary Doctorate of Management of the Lincoln University in the United States of America in February 2014.

He is the elder brother of Dr. Lam Kin Ngok, Peter (Chairman and an Executive Director of the Company) and an uncle of Mr. Lam Hau Yin, Lester (an Executive Director of the Company).

Madam U Po Chu , aged 91, has been a Director of the Company since December 1993. She is also a non-executive director of eSun and an executive director of Lai Fung. Further, Madam U has been re-designated as an executive director of LSG with effect from 27 November 2012. The issued shares of LSG, eSun and Lai Fung are listed and traded on the Main Board of the Stock Exchange. LSG is the ultimate holding company of the Company while the Company is the controlling shareholder of eSun which in turn is the ultimate holding company of Lai Fung.

Madam U has over 55 years’ experience in the garment manufacturing business and had been involved in the printing business since the mid-1960’s. She started to expand the business to fabric bleaching and dyeing in the early 1970’s and became involved in property development and investment in the late 1980’s.

She is the mother of Dr. Lam Kin Ngok, Peter (Chairman and Executive Director of the Company) and the grandmother of Mr. Lam Hau Yin, Lester (an Executive Director of the Company).

– 57 –

GENERAL INFORMATION

APPENDIX III

Independent non-executive Directors

Mr. Lam Bing Kwan , aged 66, was appointed an Independent Non-Executive Director in July 2002 and is a member of both the Audit Committee and the Remuneration Committee of the Company. Mr. Lam graduated from the University of Oregon in the United States of America with a Bachelor of Business Administration degree in 1974. He has substantial experience in the property development and investment in China, having been actively involved in this industry since the mid-1980’s. Mr. Lam has served on the boards of directors of a number of listed companies in Hong Kong for over 10 years and is currently a nonexecutive director of Sino-i Technology Limited and Nan Hai Corporation Limited and an independent non-executive director of LSG, Lai Fung and eForce Holdings Limited. The issued shares of all the aforesaid companies are listed and traded on the Main Board of the Stock Exchange. LSG is the ultimate holding company of the Company.

Mr. Leung Shu Yin, William , aged 66, was appointed an Independent NonExecutive Director in September 2004 and is the chairman of both the Remuneration Committee and the Audit Committee of the Company. Mr. Leung is a certified public accountant, a member of the Hong Kong Securities and Investment Institute and a fellow of both the Association of Chartered Certified Accountants in the United Kingdom and the Hong Kong Institute of Certified Public Accountants. He is a practising director of two certified public accountants’ firms in Hong Kong and is also an independent non-executive director of LSG, CGL and Mainland Headwear Holdings Limited. The issued shares of all the aforesaid companies are listed and traded on the Main Board of the Stock Exchange. LSG is the ultimate holding company of the Company.

Mr. Ip Shu Kwan, Stephen , aged 64, was appointed an Independent Non-Executive Director of the Company in December 2009. Mr. Ip graduated from the University of Hong Kong with a Bachelor degree in Social Sciences in 1973. He joined the Hong Kong Government in November 1973 and was promoted to the rank of Director of Bureau in April 1997. He worked in the Government of the Hong Kong Special Administrative Region (“ HKSAR ”) as a Principal Official from July 1997 to June 2007. Senior positions held by Mr. Ip in the past included Commissioner of Insurance, Commissioner for Labour, Secretary for Economic Services and Secretary for Financial Services. Mr. Ip took up the position of Secretary for Economic Development and Labour on 1 July 2002. His portfolio in respect of economic development covered air and sea transport, logistics development, tourism, energy, postal services, meteorological services, competition and consumer protection. He was also responsible for labour policies including matters relating to employment services, labour relations and employees’ rights. Mr. Ip retired from the Government of the HKSAR in July 2007. Mr. Ip received the Gold Bauhinia Star award from the Government of the HKSAR in 2001 and is an unofficial Justice of the Peace.

– 58 –

GENERAL INFORMATION

APPENDIX III

Mr. Ip is currently an independent non-executive director of four other publiclylisted companies, namely Synergis Holdings Limited, China Resources Cement Holdings Limited, Kingboard Laminates Holdings Limited and Luk Fook Holdings (International) Limited. The issued shares of all the aforesaid companies are listed and traded on the Main Board of the Stock Exchange. He was formerly an independent non-executive director of Goldpoly New Energy Holdings Limited (now known as United Photovoltaics Group Limited), Milan Station Holdings Limited, PICC Property and Casualty Company Limited, Viva China Holdings Limited and Yangtze China Investment Limited.

3. SHARE CAPITAL

The Rights Shares have no par value as the Company is a company incorporated in Hong Kong and, as such, the concept of par value no longer exists in respect of its shares.

The issued share capital of the Company as at the Latest Practicable Date were, and following completion of the Rights Issue, are expected to be as follows:

Issued and fully paid or credited as fully paid:

20,094,533,563 Shares as at the Latest Practicable Date

Rights Shares to be issued:

10,047,266,781 Shares

Issued share capital upon completion of the Rights Issue:

30,141,800,344 Shares

After the Rights Shares have been fully paid, all of the Shares in issue then and to be issued will rank pari passu in all respects with each other, including, in particular, as to dividends, voting rights and return of capital (for the avoidance of doubt, excluding the 2015 Final Dividend). The Shares in issue and the Rights Shares to be issued are or will (as the case may be) be listed on the Stock Exchange.

– 59 –

GENERAL INFORMATION

APPENDIX III

4. DISCLOSURE OF INTERESTS

Directors’ interests and short positions in the Shares, underlying Shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares of the Company, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) as recorded in the register maintained by the Company pursuant to Section 352 of the SFO or otherwise notified to the Company and the Stock Exchange pursuant to the provisions of Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which any such Director was taken or deemed to have under such provisions of the SFO) or pursuant to the Code of Practice for Securities Transactions by Directors and Designated Employees adopted by the Company (“ Securities Code ”) were disclosed as follows:

(a) The Company

Long positions in the Shares and underlying Shares

							Approximate
							% of total
							interests to
		Personal	Family	Corporate	Other	Total	total issued
Name of Director	Capacity	interests	interests	interests	interests	interests	shares
Lam Kin Ngok, Peter	Beneficial owner/	14,307,745	Nil	10,425,699,353	20,062,893	10,460,069,991	52.05%
	Owner of controlled			(Note 1)	(Note 3)
	corporations
Chew Fook Aun	Beneficial owner	Nil	Nil	Nil	200,628,932	200,628,932	1.00%
					(Note 3)
Lau Shu Yan, Julius	Beneficial owner	8,783,333	Nil	Nil	100,314,466	109,097,799	0.543%
					(Note 3)
Lam Hau Yin, Lester	Beneficial owner	Nil	Nil	Nil	200,628,932	200,628,932	1.00%
					(Note 3)
U Po Chu_(Note 2)_	Beneficial owner	897,316	Nil	Nil	Nil	897,316	0.004%

– 60 –

GENERAL INFORMATION

APPENDIX III

Notes:

(1) Lai Sun Garment (International) Limited (“ LSG ”) and two of its wholly-owned subsidiaries, namely Zimba International Limited (“ Zimba International ”) and Joy Mind Limited (“ Joy Mind ”), beneficially owned 10,425,699,353 Shares, representing approximately 51.88% of the issued share capital of the Company. Dr. Lam Kin Ngok, Peter was deemed to be interested in the same 10,425,699,353 Shares by virtue of, in aggregate, his personal and deemed interests of approximately 42.39% in the issued shares and underlying shares of LSG. LSG is approximately 12.65% owned by Dr. Lam Kin Ngok, Peter and is approximately 29.74% owned by Wisdoman Limited which is in turn 100% beneficially owned by Dr. Lam Kin Ngok, Peter. Dr. Lam Kin Ngok, Peter has also notified his deemed interest in the Committed Shares and Underwritten Shares, arising from his interest in LSG.

The 10,425,699,353 shares (51.88%) held by LSG, Zimba International and Joy Mind, respectively were pledged as security by LSG pursuant to its 7.70% secured guaranteed notes due 2018 under a Share Charge dated 24 July 2014.

(2) Madam U Po Chu is the widow of the late Mr. Lim Por Yen whose estate includes an interest of 197,859,550 Shares, representing approximately 0.99% of the issued share capital of the Company.
(3) A share option scheme was adopted by the Company on 22 December 2006 and commenced with effect from 29 December 2006 (“ Old Scheme ”). A share option was granted to each of Dr. Lam Kin Ngok, Peter, Mr. Chew Fook Aun, Mr. Lau Shu Yan, Julius and Mr. Lam Hau Yin, Lester under the Old Scheme and remained exercisable though the Old Scheme was terminated on 23 December 2015 when a new share option scheme became effective after adoption by the shareholders of the Company at the annual general meeting held on 11 December 2015, particulars of which are set out below:

		Number of
		underlying
		Shares
		comprised
Registered Name	Date of grant	in the option	Option period	Subscription price
Lam Kin Ngok, Peter	18/01/2013	20,062,893	18/01/2013-17/01/2023	HK$0.335 per Share
Chew Fook Aun	05/06/2012	200,628,932	05/06/2012-04/06/2022	HK$0.112 per Share
Lau Shu Yan, Julius	18/01/2013	100,314,466	18/01/2013-17/01/2023	HK$0.335 per Share
Lam Hau Yin, Lester	18/01/2013	200,628,932	18/01/2013-17/01/2023	HK$0.335 per Share

– 61 –

GENERAL INFORMATION

APPENDIX III

(b) Associated Corporations

(i) Lai Sun Garment (International) Limited (“ LSG ”) – the ultimate holding company of the Company

Long positions in the ordinary shares and the underlying shares in LSG

							Approximate	Approximate
							% of total
							interests to
		Personal	Family	Corporate	Other	Total	total issued
Name of Director	Capacity	interests	interests	interests	interests	interests		shares
Lam Kin Ngok, Peter	Beneficial owner/	237,464,979	Nil	562,590,430	1,876,211	801,931,620	42.39%
	Owner of controlled			(Note 1)	(Note 2)
	corporations
Chew Fook Aun	Beneficial owner	7,292,000	Nil	Nil	8,012,111	15,304,111		0.81%
					(Note 2)
Lam Hau Yin, Lester	Beneficial owner	60,623,968	Nil	Nil	18,762,111	79,386,079		4.20%
					(Note 2)
Lam Kin Ming	Beneficial owner	5,008,263	Nil	Nil	Nil	5,008,263		0.26%
U Po Chu	Beneficial owner	4,127,625	Nil	Nil	Nil	4,127,625		0.22%

– 62 –

GENERAL INFORMATION

APPENDIX III

Notes:

(1) Dr. Lam Kin Ngok, Peter was deemed to be interested in 562,590,430 shares (representing approximately 29.74% of LSG’s issued share capital) by virtue of his 100% interests in the issued share capital of Wisdoman Limited.
(2) A share option scheme was adopted by LSG on 22 December 2006 and commenced with effect from 29 December 2006 (“ Old Scheme ”). A share option was granted by LSG to each of Dr. Lam Kin Ngok, Peter, Mr. Chew Fook Aun and Mr. Lam Hau Yin, Lester under the Old Scheme and remained exercisable though the Old Scheme was terminated on 23 December 2015 when a new share option scheme became effective after adoption by the LSG shareholders at its annual general meeting held on 11 December 2015, particulars of which are set out below (on 7 February 2014, the subscription price and the number of underlying shares comprised in the option have been adjusted following the completion of rights issue of LSG (“ LSG Rights Issue ”)):

		Number of	Number of
		underlying	underlying
		shares	shares
		comprised	comprised
		in the	in the
		option	option		Subscription
		before	after		price before	Subscription
Registered	Date of	the LSG	the LSG	Option	the LSG	price after the
Name	grant	Rights Issue	Rights Issue	period	Rights Issue	LSG Rights Issue
Lam Kin Ngok,	18/01/2013	1,617,423	1,876,211	18/01/2013-	HK$1.41	HK$1.21
Peter				17/01/2023	per share	per share
Chew Fook Aun	05/06/2012	16,174,234	18,762,111*	05/06/2012-	HK$0.582	HK$0.501
				04/06/2022	per share	per share
Lam Hau Yin,	18/01/2013	16,174,234	18,762,111	18/01/2013-	HK$1.41	HK$1.21
Lester				17/01/2023	per share	per share

Out of these option, 10,750,000 options were exercised during the Year.

– 63 –

GENERAL INFORMATION

APPENDIX III

(ii) eSun Holdings Limited (“ eSun ”) – an associate of the Company

Long positions in the ordinary shares and the underlying shares in eSun

							Approximate
							% of total
							interests to
		Personal	Family	Corporate	Other	Total	total issued
Name of Director	Capacity	interests	interests	interests	interests	interests	shares
Lam Kin Ngok, Peter	Beneficial owner/	2,794,443	Nil	521,204,186	1,243,212	525,241,841	42.25%
	Owner of controlled			(Note 1)	(Note 2)
	corporations
Chew Fook Aun	Beneficial owner	Nil	Nil	Nil	6,216,060	6,216,060	0.50%
					(Note 2)
Lam Hau Yin, Lester	Beneficial owner	2,794,443	Nil	Nil	12,432,121	15,226,564	1.22%
					(Note 2)

Notes:

(1) LSG was interested in 10,425,699,353 Shares in the Company, representing approximately 51.88% of the issued share capital of the Company. Transtrend Holdings Limited, a wholly-owned subsidiary of the Company, was interested in 521,204,186 shares in eSun, representing approximately 41.92% of the issued share capital of eSun. As such, Dr. Lam Kin Ngok, Peter was deemed to be interested in the same 521,204,186 shares in eSun (representing approximately 41.92% of eSun’s issued share capital) by virtue of, in aggregate, his personal and deemed interests of approximately 42.39% and 52.05% in the issued shares and underlying shares of LSG and the Company, respectively.
(2) A share option scheme was adopted by eSun on 23 December 2005 and commenced with effect from 5 January 2006 (“ Old Scheme ”). A share option was granted to each of Dr. Lam Kin Ngok, Peter, Mr. Chew Fook Aun and Mr. Lam Hau Yin, Lester under the Old Scheme and remained exercisable though the Old Scheme was terminated on 23 December 2015 when a new share option scheme became effective after adoption by the eSun shareholders at its annual general meeting held on 11 December 2015, particulars of which are set out below:

		Number of
		underlying
		shares
		comprised
Registered Name	Date of grant	in the option	Option period	Subscription price
Lam Kin Ngok, Peter	18/01/2013	1,243,212	18/01/2013-17/01/2023	HK$1.612 per share
Chew Fook Aun	05/06/2012	6,216,060	05/06/2012-04/06/2022	HK$0.92 per share
Lam Hau Yin, Lester	18/01/2013	12,432,121	18/01/2013-17/01/2023	HK$1.612 per share

– 64 –

GENERAL INFORMATION

APPENDIX III

(iii) Lai Fung Holdings Limited (“ Lai Fung ”) – a subsidiary of eSun

Long positions in the ordinary shares and the underlying shares in Lai Fung

							Approximate
							% of total
							interests to
		Personal	Family	Corporate	Other	Total	total issued
Name of Director	Capacity	interests	interests	interests	interests	interests	shares
Lam Kin Ngok, Peter	Beneficial owner/	Nil	Nil	8,274,270,422	16,095,912	8,290,366,334	51.40%
	Owner of controlled			(Note 1)	(Note 2)
	corporations
Chew Fook Aun	Beneficial owner	Nil	Nil	Nil	80,479,564	80,479,564	0.50%
					(Note 2)
Lau Shu Yan, Julius	Beneficial owner	417,658	Nil	Nil	48,287,738	48,705,396	0.30%
					(Note 2)
Lam Hau Yin, Lester	Beneficial owner	Nil	Nil	Nil	160,959,129	160,959,129	1.00%
					(Note 2)

Notes:

(1) eSun was interested in 8,274,270,422 shares in Lai Fung, representing approximately 51.30% of the issued share capital of Lai Fung. As such, Dr. Lam Kin Ngok, Peter was deemed to be interested in the same 8,274,270,422 issued shares in Lai Fung by virtue of, in aggregate, his personal and deemed interests of approximately 42.25% in the issued shares and underlying shares of eSun.
(2) A share option scheme was adopted by Lai Fung on 21 August 2003 and commenced with effect from 28 August 2003 (“ Old Scheme ”). A new share option scheme was adopted by Lai Fung on 18 December 2012 and commenced with effect from 20 December 2012 (“ New Scheme ”). A share option was granted to Mr. Chew Fook Aun under the Old Scheme and remains exercisable though the Old Scheme was terminated on 20 December 2012 when the New Scheme became effective. A share option was also granted to each of Dr. Lam Kin Ngok, Peter, Mr. Lau Shu Yan, Julius and Mr. Lam Hau Yin, Lester under the New Scheme, particulars of the share options granted in the above schemes are set out below:

		Number of
		underlying
		shares
		comprised
Registered Name	Date of grant	in the option	Option period	Subscription price
Lam Kin Ngok, Peter	18/01/2013	16,095,912	18/01/2013-17/01/2023	HK$0.228 per share
Chew Fook Aun	12/06/2012	80,479,564	12/06/2012-11/06/2020	HK$0.133 per share
Lau Shu Yan, Julius	18/01/2013	48,287,738	18/01/2013-17/01/2023	HK$0.228 per share
Lam Hau Yin, Lester	18/01/2013	160,959,129	18/01/2013-17/01/2023	HK$0.228 per share

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GENERAL INFORMATION

APPENDIX III

(iv) Media Asia Group Holdings Limited (“ MAGHL ”) – a subsidiary of eSun

Long positions in the ordinary shares and the underlying shares in MAGHL

				Total number	Approximate
				of issued	% of total
		Number of	Number of	shares and	interests to
		ordinary	underlying	underlying	total issued
Name of Director	Capacity	shares held	shares held	shares	shares
Lam Kin Ngok, Peter	Owner of controlled	1,264,012,837	218,340,611	1,482,353,448	69.40%
	corporations	(Note 1)	(Note 2)

Notes:

(1) These interests in MAGHL represented the shares beneficially owned by Perfect Sky Holdings Limited (“ Perfect Sky ”), a wholly-owned subsidiary of eSun, representing approximately 59.18% of the issued share capital of MAGHL. eSun is owned as to approximately 41.92% by the Company which in turn is owned as to approximately 51.88% by LSG. As LSG is approximately 12.65% owned by Dr. Lam Kin Ngok, Peter and approximately 29.74% owned by Wisdoman Limited which is in turn 100% beneficially owned by Dr. Lam Kin Ngok, Peter, he was deemed to be interested in the said 1,264,012,837 shares in MAGHL.
(2) By virtue of Dr. Lam Kin Ngok, Peter’s interests through the controlled corporations described in Note (1) above, he was also deemed to be interested in the 218,340,611 underlying shares of MAGHL comprised in the convertible notes issued to Perfect Sky by MAGHL pursuant to a subscription agreement dated 17 April 2015.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company had any interests or short positions in any Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register maintained by the Company pursuant to Section 352 of the SFO or otherwise notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or pursuant to the Securities Code.

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GENERAL INFORMATION

APPENDIX III

Substantial Shareholders’ interests and short positions in the Shares and underlying Shares

So far as was known to or otherwise notified to the Directors and chief executive of the Company, as at the Latest Practicable Date, the following corporations or persons (other than a Director or chief executive of the Company) had 5% or more interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company 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:

Long positions in the Shares and the underlying Shares

		Nature of	Number of	Approximate %
Name	Capacity	interests	Shares	of Shares in issue
Lai Sun Garment	Beneficial owner	Corporate	10,425,699,353	51.88%
(International)			(Note 2)
Limited_(Note 1)_

Notes:

(1) LSG and two of its wholly-owned subsidiaries, namely Zimba International Limited and Joy Mind Limited, beneficially owned 10,425,699,353 Shares, representing approximately 51.88% of the issued share capital of the Company. Dr. Lam Kin Ngok, Peter was deemed to be interested in the same 10,425,699,353 Shares by virtue of, in aggregate, his personal and deemed interests of approximately 42.39% in the issued shares and underlying shares of LSG. Dr. Lam Kin Ngok, Peter is an executive director of LSG.
(2) LSG has also notified its interest in the Committed Shares and Underwritten Shares.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company was aware of any other person who had an interest or short position in the Shares, underlying Shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or, who was, directly or indirectly, interested in ten per cent, or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

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GENERAL INFORMATION

APPENDIX III

Interests in Share Options

As at the Latest Practicable Date, the Company had 713,823,903 Share Options outstanding under the Share Option Scheme.

The following table discloses details of the Share Options held by certain directors and employees of the Group as at the Latest Practicable Date:

Number of underlying Shares comprised in Share Options

Name and Outstanding category of as at participant 01/08/2014 Director Lam Kin Ngok, 20,062,893 Peter Chew Fook Aun 200,628,932 Lau Shu Yan, 100,314,466 Julius Lam Hau Yin, 200,628,932 Lester Other employees, 177,188,680 in aggregate Other employees, 4,000,000 in aggregate Other employees, – in aggregate Total: 702,823,903	Granted during year – – – – – – 11,000,000 11,000,000	Exercised during year – – – – – – – –	Exercisable Exercise Outstanding Date of period of price of Lapsed as at grant Share Share during year 31/07/2015 of options Options Options HK$ per Share – 20,062,893 18/01/2013 18/01/2013- 0.335 17/01/2023 – 200,628,932 05/06/2012 05/06/2012- 0.112 04/06/2022 – 100,314,466 18/01/2013 18/01/2013- 0.335 17/01/2023 – 200,628,932 18/01/2013 18/01/2013- 0.335 17/01/2023 – 177,188,680 18/01/2013 18/01/2013- 0.335 17/01/2023 – 4,000,000 26/07/2013 26/07/2013- 0.235 25/07/2023 – 11,000,000 21/01/2015 21/01/2015- 0.174 20/01/2025 – 713,823,903

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GENERAL INFORMATION

APPENDIX III

5. DIRECTORS’ INTERESTS

(a) Service Contracts

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (excluding any contract expiring or determinable by the employer within one year without payment of compensation, other than statutory compensation).

(b) Assets of the Group

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have, since 31 July 2015 (being the date to which the latest published audited consolidated financial statements of the Company were made up), been acquired or disposed of by, or leased to, the Company or any member of the Group, or were proposed to be acquired or disposed of by, or leased to, the Company or any member of the Group.

(c) Contracts of the Group

As at the Latest Practicable Date, none of the Directors were materially interested in any contract or arrangement entered into by any member of the Group subsisting at such date and which is significant in relation to the business of the Group.

6. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

7. MATERIAL CONTRACTS

The following contracts have been entered into by the Group (not being contracts entered into in the ordinary course of business) within the two years immediately preceding the date of this Prospectus and are or may be material:

(a) the Underwriting Agreement.

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GENERAL INFORMATION

APPENDIX III

8. MISCELLANEOUS

(a) The Company Secretary of the Company is Mr. Chow Kwok Wor. He is a fellow member of The Institute of Chartered Secretaries and Administrators, The Hong Kong Institute of Chartered Secretaries and The Hong Kong Institute of Certified Public Accountants.
(b) The registered office of the Company is at 11th Floor, Lai Sun Commercial Centre, 680 Cheung Sha Wan Road, Kowloon, Hong Kong.
(c) The share registrar and transfer office is Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(d) The Company’s auditors are Ernst & Young, Certified Public Accountants, of 22/F CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.
(e) The Company’s legal advisers in relation to the Rights Issue are (i) as to Hong Kong law, Reed Smith Richards Butler, 20th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong; (ii) as to Canadian law, Stikeman Elliott (Sydney) LLP, Level 12, Suite 1, 50 Margaret Street, Sydney, N.S.W. 2000, Australia; (iii) as to Japanese law, Nagashima Ohno & Tsunematsu of JP Tower, 2-7-2 Marunouchi, Chiyodaku, Tokyo 100-7036, Japan; (iv) as to Macau law, Manuela António – Lawyers and Notaries of Alameda Dr. Carlos D’Assumpção, nos. 411-417, Dynasty Plaza, 15th floor D-H, Macau; (v) as to Malaysian law, Skrine of Unit 50-8-1, 8th Floor, Wisma UOA Damansara, 50 Jalan Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia; (vi) as to Netherlands law, Loyens & Loeff of 26 Throgmorton Street, London, EC2N 2AN, United Kingdom; (vii) as to Singaporean law, Rajah & Tann Singapore LLP of 9 Battery Road #25-01, Straits Trading Building, Singapore 049910; (viii) as to Switzerland law, Naegeli & Partners Attorneys at Law Ltd of Klausstrasse 33, CH-8008 Zurich, Switzerland; (ix) as to UK law, Reed Smith LLP of Broadgate Tower, 20 Primrose Street, London, EC2A 2RS, United Kingdom; and (x) as to US law, Reed Smith Richards Butler, 20th Floor, Alexandra House, 18 Chater Road, Central, Hong Kong.
(f) The Company’s principal bankers are:

The Bank of East Asia, Limited 10 Des Voeux Road Central, Hong Kong

China Construction Bank (Asia) Corporation Limited 28th Floor, CCB Tower, 3 Connaught Road Central, Hong Kong

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GENERAL INFORMATION

APPENDIX III

DBS Bank Ltd. 18/F, The Center, 99 Queen’s Road Central, Central, Hong Kong Hang Seng Bank Limited 83 Des Voeux Road Central, Hong Kong The Hongkong and Shanghai Banking Corporation Limited 1 Queen’s Road Central, Hong Kong

Shanghai Pudong Development Bank Co., Ltd., Hong Kong Branch 15/F., Bank of America Tower, 12 Harcourt Road, Central, Hong Kong

United Overseas Bank Limited 23rd Floor, 3 Garden Road, Central, Hong Kong

(g) The Company’s authorised representatives (as defined in the Listing Rules) are Mr. Chew Fook Aun and Mr. Chow Kwok Wor.

9. QUALIFICATIONS OF EXPERT

The following are the qualifications of the expert who has given an opinion or advice which is contained in this Prospectus (“ Expert ”):

Name Qualification Ernst & Young Certified Public Accountants

10. EXPERT’S INTERESTS IN ASSETS

The Expert has confirmed that as at the Latest Practicable Date it does not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

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GENERAL INFORMATION

APPENDIX III

The Expert has further confirmed that as at the Latest Practicable Date it does not have any direct or indirect interests in any assets or any securities of the Company or any member of the Group which have since 31 July 2015 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by, or leased to, the Company or any member of the Group, or which are proposed to be acquired or disposed of by, or leased to, the Company or any member of the Group.

11. CONSENT OF EXPERT

The Expert has given and has not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of its letter and/or references to its name in the form and context in which it appears.

12. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Company since 31 July 2015, being the date of the latest published audited financial statements of the Company.

13. EXPENSES

The estimated expenses of the Rights Issue (including the underwriting commission, printing, registration, translation, legal, accounting and documentation charges) are estimated to be approximately HK$12.2 million and will be borne by the Company.

14. GENERAL

In case of discrepancy or differences in interpretation, the English text of this Prospectus prevails over the Chinese text.

15. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the registered office of the Company, on any weekday, except public holidays, for 14 days from the date of this Prospectus:

(a) this Prospectus;
(b) the Articles of Association of the Company;
(c) the annual reports of the Company for the two years ended 31 July 2014 and 31 July 2015;

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GENERAL INFORMATION

APPENDIX III

(d) the Independent Reporting Accountants’ Assurance Report from Ernst & Young on the unaudited pro forma financial information of the Group dated 18 January 2016, the text of which is set out in Appendix II to this Prospectus;
(e) the written consent from the Expert referred to in the section headed “Consent of Expert” in this Appendix III;
(f) the material contracts referred to in the section headed “Material Contracts” in this Appendix III; and
(g) a copy of each circular issued pursuant to the requirements set out in Chapters 14 and/or 14A which has been issued since the date of the latest published audited accounts.

16. DOCUMENTS DELIVERED TO THE REGISTRAR OF COMPANIES

A copy of each of the Prospectus Documents and the written consent referred to in the paragraph headed “Consent of Expert” in this Appendix III have been delivered to the Registrar of Companies in Hong Kong for registration as required by Section 38D of the Companies Ordinance.

– 73 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

Important Note to QIBs:

Please return a duly signed investor representation letter to Lai Sun Development Company Limited (the “ Company ”), by fax (facsimile: (852) 2785 2775) or email (email: ir@laisun. com) so as to reach the Company on or before 1:00 p.m., on Friday, 22 January 2016. If you are a Beneficial Owner, please also forward a copy of the signed investor representation letter to your Intermediary or Registered Owner (which references, for the avoidance of doubt, exclude and are not intended to refer to HKSCC Nominees Limited). You should note that if you do not return a duly signed investor representation letter in a timely manner, you may not be eligible to participate in the Rights Issue and will not be allowed to receive the Prospectus Documents, including the PAL and the EAF.

Dated

Lai Sun Development Company Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon Hong Kong Fax: (852) 2785 2775 Email: [email protected] Attention: Company Secretary

– 74 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

Dear Sirs:

This letter is delivered in connection with our exercise of subscription rights to subscribe for shares (the “ Shares ”) by way of a private placement in the capital of the Company in connection with the rights issue (the “ Rights Issue ”) of 10,047,266,781 rights shares (“ Rights Shares ”), including the rights in nil-paid form to subscribe for Rights Shares (“ Nil-Paid Rights ” and, together with the Rights Shares, the “ Securities ”) on the basis of 1 Rights Share for every 2 existing Shares held (or held by us through CCASS), as at 5:00 p.m. on the Record Date for the Rights Issue, being 15 January 2016. We hereby represent, warrant and agree that at all times before the settlement of the Rights Issue:

We are a “qualified institutional buyer” (“ QIB ”) (as defined in Rule 144A under the US Securities Act of 1933, as amended (the “ Securities Act ”)) with the full power and authority to make the acknowledgements, representations and agreements contained herein, and, if we are acquiring the Securities as a fiduciary or agent for one or more investor accounts, each owner of such account is a QIB, we have investment discretion with respect to each such account, and we have the full power and authority to make the acknowledgements, representations and agreements contained herein on behalf of each owner of such account and, in such event, the references to us in such acknowledgements, representations and agreements contained herein shall be read to include each owner of such account.
We are an existing legal and/or beneficial owner of Shares of the Company and are acquiring the Securities (or beneficial interest therein) for our own account, or for the account of one or more QIB(s) as to which we have full investment discretion, in each case for investment purposes, and not with a view to any resale, distribution or other disposition (within the meaning of the US securities laws) of the Securities.
We understand (and each account for which we are acting has been advised and understands) that no action has been or will be taken to permit an offering of the Securities in any jurisdiction (other than the registration of the Prospectus with the Registrar of Companies of Hong Kong); and we will not offer, resell, pledge or otherwise transfer any of the Securities which we may acquire, or any beneficial interests therein, in any jurisdiction or in any circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws and/or regulations.

Without limiting the generality of the foregoing, we understand (and each account for which we are acting has been advised and understands) that the Securities have not been and will not be registered under the US Securities Act, and are being offered and sold to us (or such beneficial owner) in a transaction not involving a public offering, or in reliance on an exemption from the registration requirements of the US Securities Act, which may include Rule 144A.

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FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

We understand and agree (and each account for which we are acting has been advised and understands) that the Securities are “restricted securities” within the meaning of Rule 144(a)(3) under the US Securities Act and may not be deposited into any unrestricted depositary receipt facility in respect of the Company’s Shares, unless at the time of deposit such Securities are no longer “restricted securities” within the meaning of Rule 144(a)(3) of the US Securities Act.
We acknowledge that the Shares are listed on The Stock Exchange of Hong Kong Limited (the “ HKSE ”) and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the HKSE (the “ Exchange Information ”) and that we are able to obtain or access such information without undue difficulty. We understand that the Exchange Information has been prepared in accordance with the HKSE format, style and content, which differs from US format, style and content. We understand that the financial statements incorporated by reference in the Prospectus (as defined below) were not prepared in connection with an offering registered with the US Securities and Exchange Commission (the “ SEC ”) under the US Securities Act. Furthermore, we understand that the work has not been carried out in accordance with auditing standards generally accepted in the United States of America and accordingly should not be relied upon as if it has been carried out in accordance with those standards. None of the Company, the underwriter who may be associated with the Rights Issue (the “ Underwriter ”) nor any of their respective affiliates has made any recommendation, promise, representation or warranty to us, express or implied, with respect to the Company, the Rights Issue or the Securities or the accuracy, completeness or adequacy of the Exchange Information.
We are not acquiring or subscribing for the Securities as a result of any general solicitation or general advertising, including advertisements, articles, notices, or other communications published in any newspaper, magazine or similar media or broadcast over radio or television; or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

– 76 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

Provided that we have returned and duly signed this investor representation letter in a timely manner, we understand that we will receive a copy of the prospectus dated 18 January 2016 relating to the Securities (the “ Prospectus ”), and will have access to the financial and other information regarding the Company and the Securities as we will have requested in connection with our investment decision to subscribe for and purchase the Securities. We agree that we will hold the Prospectus in confidence, it being understood that the Prospectus will be received by us solely for our use and that we will not duplicate, distribute, forward, transfer or otherwise transmit the Prospectus, any provisional allotment letter or excess application form relating to the Rights Issue, or any other materials concerning the Rights Issue (including electronic copies thereof) to any persons within the US, and agree that such materials shall not be duplicated, distributed, forwarded, transferred or otherwise transmitted by us. We have not relied on financial or other information supplied to us by any person other than information contained in the Prospectus or information provided by the Company. We have made our own assessment concerning the relevant tax, legal and other economic considerations relevant to our investment in the Securities including whether the Company and any of its direct or indirect subsidiaries is a “passive foreign investment company” (a “ PFIC ”) within the meaning of section 1297 of the US Internal Revenue Code of 1986, as amended, and the consequences of the acquisition, ownership and disposition of a direct or indirect interest in a PFIC. We understand that if the Company were determined to be a PFIC, there would be adverse tax consequences for a US holder of the Securities.
We acknowledge that (a) any information that we have received or will receive relating to the Rights Issue and the Securities, including the Prospectus and the Exchange Information (collectively, the “ Information ”), has been prepared solely by the Company and (b) that none of the Underwriter, or its affiliates, has verified or will verify such information, and no recommendation, promise, representation or warranty (express or implied) is or has been made or given by the Underwriter or its affiliates as to the accuracy, completeness or sufficiency of the Information, and nothing contained in the Information is, or shall be relied upon as, a promise, representation or warranty by them or their affiliates. Neither the Underwriter nor any of its affiliates are under any obligation to provide us with any amendment, update or replacement information with respect to the Information.

– 77 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

We understand that, to the extent the Rights Shares are delivered in certificated form, the certificate delivered in respect of the Rights Shares will bear a legend substantially to the following effect for so long as the Rights Shares are “restricted securities” within the meaning of Rule 144(a)(3) under the US Securities Act:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933 (THE “US SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE US, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE US SECURITIES ACT (“RULE 144A”) OR ANOTHER EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE US. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE US SECURITIES ACT FOR RESALES OF THESE SHARES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THESE SHARES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY’S SHARES, ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK FOR SO LONG AS THESE SHARES REMAIN “RESTRICTED SECURITIES” WITHIN THE MEANING OF RULE 144A(a)(3).”

We further agree that if the Rights Shares are delivered in non-certificated form (including, without limitation, by crediting of stock accounts held in CCASS) that such interests in Shares will be subject to the restrictions on transfer set forth above, and regardless of the form in which such Rights Shares are delivered, we represent, warrant and agree to comply with such restrictions on transfer of such Rights Shares.

– 78 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

Prior to deciding to subscribe for the Securities, we (a) will have consulted with our own legal, regulatory, tax, business, investment, financial and accounting advisers in each jurisdiction in connection herewith to the extent we have deemed necessary, (b) will have possessed all information relating to the Company and the Securities which we believe is necessary for the purpose of making our investment decision, (c) will have had a reasonable opportunity to ask questions of and receive answers from officers and representatives of the Company concerning the respective financial condition and results of operations of the Company and the subscription for the Securities, and any such questions will have been answered to our satisfaction, (d) will have reviewed all information that we believe is necessary or appropriate in connection with a subscription for the Securities and (e) will have conducted our own due diligence on the Company and the Rights Issue, and will have made our own investment decisions based upon our own judgment, due diligence and advice from such advisers as we have deemed necessary and will not have relied upon any recommendation, promise, representation or warranty of or view expressed by or on behalf of the Underwriter or its affiliates (including any research reports).
We will not hold the Underwriter or any of its affiliates responsible for any misstatements in or omissions in the Information or in any other written or oral information provided by the Company to us. We acknowledge that no written or oral information relating to the Rights Issue and the Securities has been or will be provided by the Underwriter or its affiliates to us.
We understand and agree that we may not rely, and we have not relied, on any investigation that the Underwriter or its affiliates or any person acting on its behalf has conducted with respect to the Rights Issue or the Securities, and neither of them nor any affiliate thereof, nor any of their respective affiliates, employees, officers, directors or representatives has made any recommendation, promise, representation or warranty to them, express or implied, with respect to the Company, the Rights Issue or the Securities.
We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, and we have the financial ability to bear the economic risk of investment in the Securities and to sustain a complete loss in connection therewith. We will not look to the Company or the Underwriter for all or part of any such loss or losses we may suffer. We have no reason to anticipate any change in our circumstances, financial or otherwise, which may cause or require any sale or distribution by us of all or any part of any Securities we may decide to invest in.

– 79 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

We agree that in the event that at some future time we wish to reoffer, resell, pledge or otherwise transfer any of the Securities, we will not do so except in accordance with any applicable US federal law and securities laws of any state of the US and we certify that either:
(a) we will transfer the Securities in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the US Securities Act, which includes for the avoidance of doubt a bona fide sale on the HKSE that has not been prearranged with any counterparty thereto;
(b) we will transfer the Securities in a transaction exempt from the registration requirements of the US Securities Act and, if requested by the Company, provide an opinion of counsel reasonably satisfactory to the Company which states that the transfer is exempt from the registration requirements of the US Securities Act; or
(c) we will transfer the Securities pursuant to an effective registration statement under the US Securities Act. We understand that the Company has no intent, and is not required, to file any registration statement in respect of the Rights Shares.

We understand and acknowledge that the Underwriter is assisting the Company in respect of the Rights Issue and that the Underwriter is acting solely for the Company and no one else in connection with the Rights Issue and, in particular, is not providing any service to us, making any recommendations to us, advising us regarding the suitability of any transactions we may enter into to subscribe or purchase any Securities or providing advice to us in relation to the Company, the Rights Issue or the Securities. Further, to the extent permitted by law, we waive any and all claims, actions, liabilities, damages or demands we may have against the Underwriter arising from its engagement with the Company.

We have full power and authority to execute and deliver this letter, which constitutes our valid and legally binding obligation and is enforceable against us in accordance with its terms.

We acknowledge that the Company, the Underwriter and its affiliates, and others will rely upon the truth and accuracy of the foregoing acknowledgements, representations, warranties and agreements and agree that the foregoing acknowledgements, representations, warranties and agreements will be valid as if repeated at all times up to the settlement of the Rights Issue.

– 80 –

FORM OF LETTER OF REPRESENTATIONS FOR US PERSONS

APPENDIX IV

We understand that the Company, the Underwriter and its affiliates are relying on this letter in order to comply with US and other securities laws. We irrevocably authorise any depository, which includes any nominee, custodian or other financial intermediary through which we hold Shares, to provide the Company and the Underwriter with a copy of this letter and such information regarding our identity and holding of Shares (including pertinent account information and details of our identity and contact information) as is necessary or appropriate to facilitate our acquisition or exercise of Nil-Paid Rights or purchase of Rights Shares. We also irrevocably authorise the Company, the Underwriter and its affiliates to produce this letter or a copy hereof to any interested party in any administrative, arbitration or legal proceeding or official inquiry with respect to the matters set forth herein.

Very truly yours,

By Institution:

Signature

Name:

Title:

Institutions’ Address:

Daytime Telephone Number:

If signing on behalf of another person,

please indicate the capacity in which signed:

Name, address and contact details of

the financial intermediary or nominee in Hong Kong through which The Shares are held:

– 81 –

FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

Important Note to Canadian-residents:

Please return a duly signed Canadian-Resident Investor Representation Letter to Lai Sun Development Company Limited (the “ Company ”), by fax (facsimile: (852) 2785 2775) or email (email: [email protected]) so as to reach the Company on or before 1:00 p.m., on 22 January 2016. You should note that if you do not return a duly signed Canadian-Resident Investor Representation Letter in a timely manner, you may not be eligible to participate in the Rights Issue and will not be allowed to receive the PAL and the EAF.

Dated

Lai Sun Development Company Limited 11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon Hong Kong Fax: (852) 2785 2775 Email: [email protected] Attention: Company Secretary

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

Dear Sirs:

This Canadian-Resident Investor Representation Letter is delivered in connection with our exercise of subscription rights to subscribe for shares (the “ Shares ”) by way of a private placement in the capital of the Company in connection with the rights issue (the “ Rights Issue ”) of 10,047,266,781 rights shares (“ Rights Shares ”), including the rights in nil-paid form to subscribe for Rights Shares (“ Nil-Paid Rights ” and, together with the Rights Shares, the “ Securities ”) on the basis of 1 Rights Share for every 2 existing Shares held (or held by us through CCASS), as at 5:00 p.m. on the Record Date for the Rights Issue, being 15 January 2016.

I. REPRESENTATIONS, WARRANTIES, CERTIFICATIONS AND ACKNOWLEDGEMENTS

In connection with the foregoing, the undersigned represents, warrants, certifies or acknowledges (as applicable) as follows:

represents, warrants and certifies that the undersigned:
(a) is an existing legal or beneficial shareholder of the Company and, where required by law, is purchasing the Rights Shares (or interest therein) as principal for its own account, and not as agent, and for investment purposes only and not with a view to resale or distribution;
(b) is resident in or is subject to the laws of a province of Canada;
(c) is, or any ultimate purchaser for which the undersigned is acting as agent is, entitled under the securities laws of the applicable province of Canada to purchase such shares without the benefit of a prospectus qualified under such securities laws, and without limiting the generality of the foregoing, such purchaser is an “accredited investor” as defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions (“ NI 45-106 ”) by virtue of satisfying the indicated criterion on Schedule “A” to this Canadian-Resident Investor Representation Letter;
(d) in the event the undersigned is an “accredited investor” by virtue of satisfying the indicated criterion of paragraph (j), (k) or (l) on Schedule “A” to this Canadian Representation Letter, the undersigned has also delivered to the Company an executed “Risk Acknowledgement Form” in the form set out at Schedule “B” to this Canadian-Resident Investor Representation Letter;
acknowledges that the offer and sale of the Rights Shares were not made through an advertisement of the Rights Shares in any printed media of general or regular paid circulation or through any radio, television or telecommunication broadcast, including electronic display, or any other form of advertising in Canada;

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

acknowledges that the distribution of the Rights Shares in Canada is being made on a private placement basis only and is exempt from the requirement that the Company prepare and file a prospectus with the local provincial securities regulator and, as a result: (i) the undersigned may not receive information that would otherwise be required under Canadian securities legislation, (ii) the undersigned is restricted from using most of the protections, rights and remedies available under Canadian securities legislation, and (iii) the Company is relieved from certain obligations that would otherwise apply under Canadian securities legislation;
acknowledges that no prospectus has been filed with any Canadian securities regulatory authority in connection with the Rights Shares and no such regulator has made any finding or determination as to the merit for investment in, or made any recommendation or endorsement with respect to, the Rights Shares;
represents, warrants and certifies that the undersigned, or any ultimate purchaser for which the undersigned is acting as agent, is entitled under the applicable Canadian securities laws of to participate in the offering without the benefit of a prospectus qualified under such securities laws;
acknowledges that any Rights Shares purchased are restricted securities in Canada and any resale of such shares must be made in accordance with applicable Canadian securities laws which may require such resale to be made in accordance with exemptions from registration and prospectus requirements;
represents, warrants and certifies that the undersigned was not created, formed or established solely to acquire securities, or to permit the purchase of securities, without a prospectus in reliance on an exemption from the prospectus requirements under applicable provincial securities legislation;
represents, warrants, and certifies that none of the funds being used to purchase the Rights Shares are, to the best of the undersigned’s knowledge, proceeds obtained or derived, directly or indirectly, as a result of illegal activities, and:
(a) the funds being used to purchase the shares and advanced by or on behalf of the undersigned do not represent proceeds of crime for the purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “ PCMLTFA ”);

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

(b) the undersigned is not a person or entity identified on a list established under section 83.05 of the Criminal Code (Canada) or in the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism (the “ RIUNRST ”), the United Nations Al-Qaida and Taliban Regulations (the “ UNAQTR ”), the United Nations Cȏte d’Ivoire Regulations (the “ Cȏte d’Ivoire Regulations ”), the Regulations Implementing the United Nations Resolution on the Democratic People’s Republic of Korea (the “ UNRDPRK ”), the United Nations Democratic Republic of the Congo Regulations (the “ Congo Regulations ”), the Regulations Implementing the United Nations Resolution on Eritrea (the “ RIUNRE ”), the Regulations Implementing the United Nations Resolution on Iran (the “ RIUNRI ”), the United Nations Liberia Regulations (the “ Liberia Regulations ”), the Regulations Implementing the United Nations Resolutions on Somalia (the “ RIUNRS ”), the United Nations Sudan Regulations (the “ Sudan Regulations ”), the Regulations Implementing the United Nations Resolutions on Libya (the “ Libya Regulations ”), the Special Economic Measures (Burma) Regulations (the “ Burma Regulations ”), the Special Economic Measures (Iran) Regulations (the “ Iran Regulations ”), the Special Economic Measures (Zimbabwe) Regulations (the “ Zimbabwe Regulations ”), the Freezing Assets of Corrupt Foreign Officials (Tunisia and Egypt) Regulations (the “ FACPA Tunisia and Egypt Regulations ”), the Special Economic Measures (Syria) Regulations (the “ Syria Regulations ”), the Special Economic Measures (DPRK) Regulations (the “ DPRK Regulations ”), the Special Economic Measures (Ukraine) Regulations and the Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations (collectively, the “ Ukraine Regulations ”), the Special Economic Measures (Russia) Regulations (the “ Russia Regulations ”), the Regulations Implementing the United Nations Resolutions on the Central African Republic (the “ CAR Regulations ”), the Regulations Implementing the United Nations Resolution on Yemen (the “ Yemen Regulations ”), the Special Economic Measures Act (South Sudan) Regulations (the “ South Sudan Regulations ”) or other similar applicable laws, regulations or rules (the “ Similar Laws ”) and the investor is not a person or entity that on May 22, 2003 was a member of the Government of Iraq and is not a person or entity that has been identified by the Committee of the Security Council further to the United Nations Iraq Regulations (the “ Iraq Regulations ”);

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

(c) the Company may in the future be required by law to disclose the undersigned’s name and other information relating to the undersigned, on a confidential basis, pursuant to the PCMLTFA, the Criminal Code (Canada), RIUNRST, UNAQTR, the Cȏte d’Ivoire Regulations, UNRDPRK, the Congo Regulations, RIUNRE, RIUNRI, the Liberia Regulations, RIUNRS, the Sudan Regulations, the Libya Regulations, the Burma Regulations, the Iran Regulations, the Zimbabwe Regulations, the FACPA Tunisia and Egypt Regulations, the Syria Regulations, the DPRK Regulations, the Ukraine Regulations, the Russia Regulations, the CAR Regulations, the Yemen Regulations, the South Sudan Regulations, the Iraq Regulations or as otherwise may be required by Similar Laws, and the undersigned is deemed to have agreed to the foregoing;
(d) to the best of the undersigned’s knowledge, none of the funds to be provided by or on behalf of the undersigned are being tendered on behalf of a person or entity who has not been identified to the undersigned; and
(e) the undersigned shall promptly notify the Company if the undersigned discovers that any such representations cease to be true, and shall provide the Company with appropriate information in connection therewith; and
acknowledges that the undersigned, or any ultimate purchaser for which the undersigned is acting as agent, should consult its own legal and tax advisers with respect to the tax consequences of an investment in the Rights Shares in its particular circumstances and with respect to the eligibility of the shares for investment by the undersigned under relevant Canadian legislation and regulations, and that the undersigned has not relied on the Company or any of the Company’s advisers or service providers for any legal, tax or financial advice.

II. IMPORTANT INFORMATION REGARDING THE COLLECTION OF PERSONAL INFORMATION

The Company is required to file a report of trade with all applicable securities regulatory authorities containing personal information about the undersigned purchaser and, if applicable, any disclosed beneficial purchaser of securities of the Company. The undersigned acknowledges that it has been notified by the Company:

of the requirement to deliver to the applicable Canadian securities regulatory authorities a report of trade containing the full name, residential address and telephone number of each purchaser or disclosed beneficial purchaser, the type of shares purchased, the total purchase price paid for such shares, the date of the purchase and the prospectus and registration exemption relied upon under applicable securities laws to complete such purchase;

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APPENDIX V FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

that in Ontario, this information is collected indirectly by the Ontario Securities Commission under the authority granted to it under, and for the purposes of the administration and enforcement of, the securities legislation in Ontario; and
that the purchaser may contact the Administrative Assistant to the Director of Corporate Finance at Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario, M5H 3S8 or by telephone at (416) 593-8086 for more information regarding the indirect collection of such information by the Ontario Securities Commission.

By completing this Canadian-Resident Investor Representation Letter, the undersigned authorizes the indirect collection of this information by each applicable securities regulatory authority or regulator and acknowledges that such information may become available to the public under applicable securities legislation.

III. SUPPLEMENTARY ACKNOWLEDGEMENTS

The undersigned confirms its express wish that this document and all documents and agreements directly or indirectly relating thereto be drawn up in the English language only. La partie aux présentes reconnaissent qu’elle a expressément convenu que les presents documents ainsi que tout autre document s’y rapportant directement ou indirectement seront rédigés en langue anglaise seulement.

DATED at this day of , 201 .

By:

Name and Title:

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

SCHEDULE “A” – ACCREDITED INVESTOR

(All underlined words have the meanings set forth at the end of this Schedule “ A ”.)

The purchaser hereby represents, warrants, covenants and certifies that the purchaser is: [Please check the appropriate box]

(a) a Canadian financial institution, or a Schedule III bank,
(b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada),
(c) a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary,
(d) a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer,
(e) an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d),
(e.1) an individual formerly registered under the securities legislation of a jurisdiction of Canada, other than an individual formerly registered solely as a representative of a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador),
(f) the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada,
(g) a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec,
(h) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government,
(i) a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada,
(j) an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, f_________inancial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds C$1,000,000,

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

(j.1) an individual who beneficially owns fvalue that, before taxes, but net of any r____inancial assets having an aggregate realizable _________elated liabilities, exceeds C$5,000,000,
(k) an individual whose net income before taxes exceeded C$200,000 in each of the two (2) most recent calendar years or whose net income before taxes combined with that of a spouse exceeded C$300,000 in each of the two (2) most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year,
(l) an individual who, either alone or with a spouse, has net assets of at least C$5,000,000,
(m) a person, other than an individual or investment fund, that has net assets of at least C$5,000,000 as shown on its most recently prepared financial statements and that has not been created or used solely to purchase or hold securities as an a___ccredited i_____nvestor as defined in this paragraph (m),
(n) an investment fund that distributes or has distributed its securities only to:
(i) a person that is or was an a_________ccredited investor at the time of the distribution,
(ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 minimum amount investment exemption of NI 45-106, or 2.19 additional investment in investment funds exemption of NI 45-106, or
(iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 investment fund reinvestment exemption of NI 45-106,
(o) an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Quebec, the securities regulatory authority, has issued a receipt,
(p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be,
(q) a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction,
(r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded,

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

(s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function,
(t) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are a__________ccredited investors,
(u) an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser,
(v) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Quebec, the regulator as an a________ccredited investor, or
(w) a trust established by an ai___nvestor’s family members of which a majority of the trustees are a_____ccredited investor for the benefit of the a_____ccredited ccredited i____nvestors and all of the beneficiaries are the a______ccredited investor’s spouse, a former spouse of the a______ccredited investor or a parent, grandparent, brother, sister, child or grandchild of that a____ccredited investor, of that a_________ccredited investor’s spouse or of that accredited investor’s former spouse.

For the purpose of paragraphs (n) and (t) above , “ accredited investor ” means any person or entity referred to in paragraphs (a) through (v) above.

Definitions:

“ Canadian financial institution ” means

(a) an association governed by the Cooperative Credit Associations Act (Canada) or a central cooperative credit society for which an order has been made under section 473(1) of that Act, or
(b) a bank, loan corporation, trust company, trust corporation, insurance company, treasury branch, credit union, caisse populaire, financial services cooperative, or league that, in each case, is authorized by an enactment of Canada or a jurisdiction of Canada to carry on business in Canada or a jurisdiction of Canada.

“ control person ” means any person that holds or is one of a combination of persons that holds:

(a) a sufficient number of any of the securities of an issuer so as to affect materially the c______ontrol of the issuer, or
(b) more than 20% of the outstanding voting securities of an issuer except where there is evidence showing that the holding of those securities does not affect materially the c______ontrol of the issuer.

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

“ eligibility adviser ” means a person that is registered as an investment dealer or in an equivalent category of registration under the securities legislation of the jurisdiction of a purchaser and authorized to give advice with respect to the type of security being distributed.

“ executive officer ” means, for an issuer, an individual who is

(a) a chair, vice-chair or president,
(b) a vice-president in charge of a principal business unit, division or function including sales, finance or production, or
(c) performing a policy-making function in respect of the issuer.

“ financial assets ” means

(a) cash,
(b) securities, or
(c) a contract of insurance, a deposit or an evidence of a deposit that is not a security for the purposes of securities legislation.

“ founder ” means, in respect of an issuer, a person who,

(a) acting alone, in conjunction, or in concert with one or more persons, directly or indirectly, takes the initiative in founding, organizing or substantially reorganizing the business of the issuer, and
(b) at the time of the distribution or trade is actively involved in the business of the issuer.

“ fully managed account ” means an account of a client for which a person makes the investment decisions if that person has full discretion to trade in securities for the account without requiring the client’s express consent to a transaction.

“ investment fund ” has the same meaning as in National Instrument 81-106 Investment Fund Continuous Disclosure .

“ offering memorandum ” means a document, together with any amendments to that document, purporting to describe the business and affairs of an issuer that has been prepared primarily for delivery to and review by a prospective purchaser so as to assist the prospective purchaser to make an investment decision in respect of securities being sold in a distribution to which section 53 of the Securities Act (Ontario) would apply but for the availability of one or more exemptions contained in Ontario securities laws, but does not include a document setting out current information about an issuer for the benefit of a prospective purchaser familiar with the issuer through prior investment or business contacts.

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

“ person ” includes

(a) an individual,
(b) a corporation,
(c) a partnership, trust, fund and an association, syndicate, organization or other organized group of persons, whether incorporated or not, and
(d) an individual or other person in that person’s capacity as a trustee, executor, administrator or personal or other legal representative.

“ related liabilities ” means

(a) liabilities incurred or assumed for the purpose of financing the acquisition or ownership of financial assets, or
(b) liabilities that are secured by financial assets.

“ Schedule III bank ” means an authorized foreign bank named in Schedule III of the Bank Act (Canada).

“ spouse ” means, an individual who,

(a) is married to another individual and is not living separate and apart within the meaning of the Divorce Act (Canada), from the other individual,
(b) is living with another individual in a marriage-like relationship, including a marriage-like relationship between individuals of the same gender, or
(c) in Alberta, is an individual referred to in paragraph (a) or (b), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships Act (Alberta).

“ subsidiary ” means an issuer that is controlled directly or indirectly by another issuer and includes a subsidiary of that subsidiary.

Affiliated Entities, Control and Subsidiaries

A person or company is deemed to be an affiliate of another person or company if one is a subsidiary of the other, or if both are subsidiaries of the same person or company, or if each of them is controlled by the same person or company.
A person or company is deemed to be controlled by another person or company, or by two or more persons or companies, if

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FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

APPENDIX V

(a) the first person or company, directly or indirectly, beneficially owns or exercises control or direction over securities of the second person or company carrying votes which, if exercised, would entitle the first person or company to elect a majority of the directors of the second person or company, unless that first person or company holds the voting securities only to secure an obligation,
(b) the second person or company is a partnership, other than a limited partnership, and the first person or company holds more than 50% of the interests of the partnership, or
(c) the second person or company is a limited partnership and the general partner of the limited partnership is the first person or company.
A person or company is considered to be a subsidiary entity of another person or company if
(a) it is controlled by,
- (i) that other, or
- (ii) that other and one or more persons or companies each of which is controlled by that other, or
- (iii) two or more persons or companies, each of which is controlled by that other; or
(b) it is a subsidiary entity of a person or company that is the other’s subsidiary entity.

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APPENDIX V

FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

SCHEDULE “B” – RISK ACKNOWLEDGEMENT FORM

WARNING! This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment

SECTION 1 TO BE COMPLETED BY THE ISSUER

1. About your investment Type of securities: Rights Shares Issuer: Lai Sun Development Company Limited Purchased from: Lai Sun Development Company Limited

SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER

2. Risk acknowledgement

WARNING! This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment	WARNING! This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment	WARNING! This investment is risky. Don’t invest unless you can afford to lose all the money you pay for this investment
SECTION 1 TO BE COMPLETED BY THE ISSUER
1. About your investment
Type of securities: Rights Shares	Issuer: Lai Sun Development Company Limited
Purchased from: Lai Sun Development Company Limited
SECTIONS 2 TO 4 TO BE COMPLETED BY THE PURCHASER
2. Risk acknowledgement
This investment is risky. Initial that you understand that:		Your initials
Risk of loss– You could lose your entire investment of:*[insert]*$
Liquidity risk– You may not be able to sell your investment quickly – or at all.
Lack of information– You may receive little or no information about your investment.
Lack of advice– You will not receive advice from the salesperson about whether this investment is suitable for you unless the salesperson is registered. The salesperson is the person who meets with, or provides information to you about making this investment. To check whether the salesperson is registered, go to www.aretheyregistered.ca.
3. Accredited investor status
You must meet at leastoneof the following criteria to be able to make this investment. Initial the statement that applies to you. (You may initial more than one statement). The person identified in section 6 is responsible for ensuring that you meet the definition of accredited investor. That person, or the salesperson identified in section 5, can help you if you have questions about whether you meet these criteria.		Your initials
• Your net income before taxes was more than C$200,000 in each of the 2 most recent calendar years, and you expect it to be more than C$200,000 in the current calendar year. (You can find your net income before taxes on your personal income tax return.)
• Your net income before taxes combined with your spouse’s was more than C$300,000 in each of the 2 most recent calendar years, and you expect your combined net income before taxes to be more than C$300,000 in the current calendar year.
• Either alone or with your spouse, you own more than C$1 million in cash and securities, after subtracting any debt related to the cash and securities.
• Either alone or with your spouse, you have net assets worth more than C$5 million. (Your net assets areyour total assets(includingreal estate)minusyour total debt.)

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APPENDIX V

FORM OF CANADIAN-RESIDENT INVESTOR REPRESENTATION LETTER

4. Your name and your signature

By signing this form, you confirm that you have read this form and you understand the risks of making this investment as identified in this form.

First and last name (please print):

Signature:

Date:

SECTION 5 TO BE COMPLETED BY THE SALESPERSON

5. Salesperson information

Instruction: the salesperson is the person who meets with, or provides information to, the purchaser with respect to making this investment. That could include a representative of the issuer or selling security holder, a registrant or a person who is exempt from the registration requirement.

First and last name of salesperson (please print):

Telephone: Email:

Name of firm (if registered):

SECTION 6 TO BE COMPLETED BY THE ISSUER OR SELLING SECURITY HOLDER

6. For more information about this investment, contact:

The authorized representative or agent of Lai Sun Development Company Limited that delivered you this document.

For more information about prospectus exemptions, contact your local securities regulator. You can find contact information at www.securities-administrators.ca.

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AI assistant

IRC Limited — Capital/Financing Update 2016

49636_rns_2016-01-18_d3dcd289-181f-4602-98b2-fefc6b56d547.pdf

Notice relating to investors in Canada

Notice relating to investors in Japan

Notice relating to investors in the US

NOTICE TO NEW HAMPSHIRE RESIDENTS

Enforceability of Judgments

Forward-Looking Statements

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

SUMMARY OF THE RIGHTS ISSUE

WARNING OF THE RISKS OF DEALING IN NIL-PAID RIGHTS SHARES

Announcement of results of the Rights Issue

Certificates for the Rights Shares expected

Commencement of dealings in

Effect of bad weather on the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares

RIGHTS ISSUE OF LAI SUN DEVELOPMENT COMPANY LIMITED OF 10,047,266,781 RIGHTS SHARES AT THE SUBSCRIPTION PRICE OF HK$0.092 EACH ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY TWO EXISTING SHARES HELD ON THE RECORD DATE

INTRODUCTION

RIGHTS ISSUE OVERVIEW

LETTER FROM THE BOARD

THE SUBSCRIPTION PRICE

QUALIFYING SHAREHOLDERS

BASIS OF PROVISIONAL ALLOTMENT OF RIGHTS SHARES

DISTRIBUTION OF THIS PROSPECTUS AND THE OTHER PROSPECTUS DOCUMENTS

LETTER FROM THE BOARD

NON-QUALIFYING SHAREHOLDERS

LETTER FROM THE BOARD

ARRANGEMENTS FOR RIGHTS SHARES WHICH WOULD OTHERWISE HAVE BEEN AVAILABLE TO NON-QUALIFYING SHAREHOLDERS

NON-QUALIFYING BENEFICIAL OWNERS

LIMITED CATEGORY OF PERSONS IN THE SPECIFIED TERRITORY WHO MAY BE ABLE TO TAKE UP THEIR RIGHTS UNDER THE RIGHTS ISSUE

PROCEDURES FOR ACCEPTANCE OR TRANSFER

General

Action to be taken by Shareholders

Subscription for all Rights Shares provisionally allotted

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Transfers and “splitting” of nil-paid Rights Shares

Important notice and representations and warranties relating to Shareholders in the Specified Territory

Action to be taken by Beneficial Owners whose Shares are held by a Registered Owner (other than Shares deposited in CCASS)

Subscription for Rights Shares provisionally allotted and transfers and “splitting” of nil-paid Rights Shares

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory whose Shares are held by a Registered Owner (other than CCASS)

LETTER FROM THE BOARD

Action to be taken by Beneficial Owners holding interests in Shares through CCASS

Subscription for Rights Shares provisionally allotted and transfers and “splitting” of nil-paid Rights Shares

Shareholders may contact the Registrar at (852) 2980 1333 for details in respect of the above procedures.

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory holding interests in Shares through CCASS

SHARE CERTIFICATES AND REFUND CHEQUES FOR THE RIGHTS ISSUE

STATUS OF THE RIGHTS SHARES

FRACTIONAL ENTITLEMENTS

APPLICATION FOR EXCESS RIGHTS SHARES

Action to be taken by Shareholders who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

Important notice and representations and warranties relating to Shareholders in the Specified Territory

Action to be taken by Beneficial Owners whose Shares are held by a Registered Owner (other than Shares deposited in CCASS) who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory whose Shares are held by a Registered Owner (other than CCASS)

Action to be taken by Beneficial Owners holding interest in Shares through CCASS who wish to apply for excess Rights Shares

Excess Rights Shares application procedures

Important notice and representations and warranties relating to Beneficial Owners in the Specified Territory holding interests in Shares through CCASS

Important notice for Investors

APPLICATION FOR LISTING AND DEALING ARRANGEMENTS

HONG KONG TAXATION

UNDERWRITING ARRANGEMENT FOR THE RIGHTS ISSUE

Underwriting Agreement

Terms of the Underwriting Agreement

LETTER FROM THE BOARD

CONDITIONS TO THE RIGHTS ISSUE AND THE UNDERWRITING AGREEMENT

LETTER FROM THE BOARD

TERMINATION OF THE UNDERWRITING AGREEMENT

LETTER FROM THE BOARD

WARNING OF THE RISKS OF DEALING IN SHARES AND NIL-PAID RIGHTS SHARES

EFFECT OF THE RIGHTS ISSUE ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

Reasons for the Rights Issue

Use of Proceeds

IRC Limited Capital/Financing Update 2016