IRC Limited — Interim / Quarterly Report 2015

Apr 16, 2015

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Corporate Information

PLACE OF INCORPORATION Hong Kong

AUTHORISED REPRESENTATIVES

Chew Fook Aun Chow Kwok Wor

BOARD OF DIRECTORS

Executive Directors

Lam Kin Ngok, Peter (Chairman) Chew Fook Aun (Deputy Chairman) Lau Shu Yan, Julius (Chief Executive Officer) Lam Hau Yin, Lester

Non-executive Directors

Lam Kin Ming U Po Chu

Independent Non-executive Directors

Ip Shu Kwan, Stephen, GBS, JP Lam Bing Kwan Leung Shu Yin, William

AUDIT COMMITTEE

Leung Shu Yin, William (Chairman) Lam Bing Kwan Lam Kin Ming

REMUNERATION COMMITTEE

Leung Shu Yin, William (Chairman) Chew Fook Aun Lam Bing Kwan

SHARE REGISTRAR AND TRANSFER OFFICE

Tricor Tengis Limited Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong

INDEPENDENT AUDITORS

Ernst & Young Certified Public Accountants

PRINCIPAL BANKERS

The Bank of East Asia, Limited China Construction Bank Corporation Chong Hing Bank Limited DBS Bank Ltd. Hang Seng Bank Limited The Hongkong and Shanghai Banking Corporation Limited

SHARES INFORMATION Place of Listing

The Main Board of The Stock Exchange of Hong Kong Limited

Stock Code

488

COMPANY SECRETARY

Chow Kwok Wor

REGISTERED OFFICE / PRINCIPAL OFFICE

11th Floor Lai Sun Commercial Centre 680 Cheung Sha Wan Road Kowloon, Hong Kong

Tel: (852) 2741 0391 Fax: (852) 2785 2775

Board Lot 15,000 Shares

WEBSITE

www.laisun.com

INVESTOR RELATIONS

Tel: (852) 2853 6116 Fax: (852) 2853 6651 E-mail: ir@laisun.com

1

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

The board of directors (the “ Board ”) of Lai Sun Development Company Limited (the “ Company ”) is pleased to present the unaudited consolidated results of the Company and its subsidiaries (the “ Group ”) for the six months ended 31 January 2015 together with the comparative figures of the last corresponding period as follows:

Condensed Consolidated Income Statement

For the six months ended 31 January 2015

			Six months ended	Six months ended
			31 January
			2015	2014
			(Unaudited)	(Unaudited)
		Notes	HK$’000	HK$’000
	TURNOVER	3	777,643	1,224,654
	Cost of sales		(330,720)	(623,059)
	Gross profit		446,923	601,595
	Other revenue		30,703	37,818
	Selling and marketing expenses		(11,631)	(33,758)
	Administrative expenses		(177,007)	(153,749)
	Other operating expenses, net		(43,316)	(40,957)
	Employee share option benefits	11	(528)	—
	Fair value gains on investment properties		709,727	340,218
	Provision for tax indemnity	13(b)	—	(139,017)
	PROFIT FROM OPERATING ACTIVITIES	4	954,871	612,150
	Finance costs	5	(84,100)	(122,489)
	Share of profits and losses of associates		(9,571)	43,467
	Share of profits and losses of joint ventures		103,305	49,151
	Discount on acquisition of additional interest in an associate	6	—	99,382
	PROFIT BEFORE TAX		964,505	681,661
	Tax	7	(40,606)	(44,986)
	PROFIT FOR THE PERIOD		923,899	636,675
	Attributable to:
	Owners of the Company		908,382	622,028
	Non-controlling interests		15,517	14,647
			923,899	636,675
	EARNINGS PER SHARE ATTRIBUTABLE TO
	OWNERS OF THE COMPANY	8
	Basic		HK$0.045	HK$0.031
	Diluted		HK$0.045	HK$0.031

2 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Condensed Consolidated Statement of Comprehensive Income For the six months ended 31 January 2015

		Six months ended	Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	PROFIT FOR THE PERIOD	923,899	636,675
	OTHER COMPREHENSIVE (EXPENSE)/INCOME
	Other comprehensive (expense)/income to be reclassified to profit or loss
	in subsequent periods:
	Change in fair values of available-for-sale financial assets	(14,944)	4,150
	Exchange realignments	(58,614)	11,141
	Share of other comprehensive income of an associate	18,675	59,380
	OTHER COMPREHENSIVE (EXPENSE)/INCOME FOR THE PERIOD	(54,883)	74,671
	TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	869,016	711,346
	Attributable to:
	Owners of the Company	853,499	696,733
	Non-controlling interests	15,517	14,613
		869,016	711,346

3

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

As at 31 January 2015

Condensed Consolidated Statement of Financial Position

			31 January	31 July
			2015	2014
			(Unaudited)	(Audited)
		Notes	HK$’000	HK$’000
	NON-CURRENT ASSETS
	Property, plant and equipment	9	2,260,061	554,635
	Prepaid land lease payments		22,442	22,955
	Investment properties		14,552,340	12,669,295
	Properties under development for sale		611,696	109,158
	Interests in associates		3,840,146	3,841,870
	Interests in joint ventures		5,621,865	6,018,543
	Available-for-sale financial assets		1,225,441	1,232,466
	Pledged bank balances and time deposits		—	138,049
	Deposits paid and other receivables		83,517	727,468
	Total non-current assets		28,217,508	25,314,439
	CURRENT ASSETS
	Completed properties for sale		721,177	832,633
	Equity investments at fair value through profit or loss		5,220	2,159
	Inventories		9,366	8,106
	Debtors, deposits paid and other receivables	10(a)	140,855	134,032
	Pledged bank balances and time deposits		167,127	—
	Cash and cash equivalents		1,139,846	1,671,478
	Total current assets		2,183,591	2,648,408
	CURRENT LIABILITIES
	Creditors, deposits received and accruals	10(b)	309,794	299,723
	Tax payable		140,193	132,825
	Bank borrowings		1,285,594	416,808
	Total current liabilities		1,735,581	849,356
	NET CURRENT ASSETS		448,010	1,799,052
	TOTAL ASSETS LESS CURRENT LIABILITIES		28,665,518	27,113,491
	NON-CURRENT LIABILITIES
	Bank borrowings		3,037,841	2,274,414
	Guaranteed notes		2,701,248	2,698,122
	Deferred tax		114,988	111,620
	Provision for tax indemnity	13(b)	729,387	729,387
	Long term rental deposits received		68,292	71,087
	Deferred rental		4,375	4,366
	Total non-current liabilities		6,656,131	5,888,996
			22,009,387	21,224,495

4

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Condensed Consolidated Statement of Financial Position

(Continued)

As at 31 January 2015

		31 January	31 July
		2015	2014
		(Unaudited)	(Audited)
	Notes	HK$’000	HK$’000
	EQUITY
	Equity attributable to owners of the Company
	Issued capital	3,135,561	3,129,961
	Investment revaluation reserve	1,116,943	1,131,735
	Share option reserve	65,172	64,469
	Hedging reserve	(963)	(963)
	Capital reduction reserve	4,692	4,692
	General reserve	646,700	646,700
	Other reserve	249,622	256,582
	Statutory reserve	20,469	—
	Exchange fluctuation reserve	71,621	111,712
	Retained profits	16,267,474	15,379,503
	Proposed final dividend	—	50,157
		21,577,291	20,774,548
	Non-controlling interests	432,096	449,947
		22,009,387	21,224,495

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 5

Condensed Consolidated Statement of Changes in Equity For the six months ended 31 January 2015

	Attributable to owners of the Company Share Investment Share Capital Capital Exchange Proposed Non- Issued premium revaluation option Hedging redemption reduction General Other Statutory fluctuation Retained final controlling capital account reserve reserve reserve reserve reserve reserve reserve reserve reserve profits dividend Sub-total interests Total HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 31 July 2014 and 1 August 2014 (Audited) Profit for the period Other comprehensive (expense)/ income for the period: Change in fair values of available-for-sale financial assets Exchange realignments Share of other comprehensive income of an associate	3,129,961 — 1,131,735 64,469 (963) — 4,692 646,700 256,582 — 111,712 15,379,503 50,157 20,774,548 449,947 21,224,495 — — — — — — — — — — — 908,382 — 908,382 15,517 923,899 — — (14,944) — — — — — — — — — — (14,944) — (14,944) — — — — — — — — — — (58,614) — — (58,614) — (58,614) — — 152 — — — — — — — 18,523 — — 18,675 — 18,675
Total comprehensive (expense)/ income for the period — — (14,792) — — — — — — — (40,091) 908,382 — 853,499 15,517 869,016 Share of reserve movements of an associate — — — 175 — — — — (6,960) 20,469 — (20,411) — (6,727) — (6,727) Recognition of share-based payments — — — 528 — — — — — — — — — 528 — 528 Capital contribution from non-controlling shareholders of a subsidiary — — — — — — — — — — — — — — 8,100 8,100 Shares issued in lieu of cash dividend* 5,600 — — — — — — — — — — — — 5,600 — 5,600 Dividend paid to a non-controlling shareholder of a subsidiary — — — — — — — — — — — — — — (41,468) (41,468) Final 2014 dividend paid — — — — — — — — — — — — (50,157) (50,157) — (50,157)
At 31 January 2015 (Unaudited) 3,135,561 — 1,116,943 65,172 (963) — 4,692 646,700 249,622 20,469 71,621 16,267,474 — 21,577,291 432,096 22,009,387
At 31 July 2013 and 1 August 2013 (Audited) 200,629 7,429,332 1,116,135 64,622 (11,786) 1,200,000 — 646,700 142,076 — 96,941 8,243,123 — 19,127,772 402,179 19,529,951 Profit for the period — — — — — — — — — — — 622,028 — 622,028 14,647 636,675 Other comprehensive income/ (expenses) for the period: Change in fair values of available-for-sale financial assets — — 4,150 — — — — — — — — — — 4,150 — 4,150 Exchange realignments — — — — — — — — — — 11,175 — — 11,175 (34) 11,141 Share of other comprehensive income of an associate — — 2,306 — 13,129 — — — — — 43,945 — — 59,380 — 59,380
Total comprehensive income for the period — — 6,456 — 13,129 — — — — — 55,120 622,028 — 696,733 14,613 711,346 Share of reserve movements of an associate — — — — — — — — 118,679 — — 105 — 118,784 — 118,784 Capital contribution from non-controlling shareholders of subsidiaries — — — — — — — — — — — — — — 4,780 4,780
At 31 January 2014 (Unaudited) 200,629 7,429,332 1,122,591 64,622 1,343 1,200,000 — 646,700 260,755 — 152,061 8,865,256 — 19,943,289 421,572 20,364,861

On 9 December 2014, the Company’s shareholders approved at the annual general meeting a final dividend of HK$0.0025 per share per share payable in cash with a scrip dividend alternative (the “ Scrip Dividend Scheme ”) for the year ended 31 July 2014 (the “ 2014 Final Dividend* ”). During the period, 31,640,277 new shares were issued by the Company at a deemed price of HK$0.177 per share, credited as fully paid, to shareholders of the Company who had elected to receive scrip shares in lieu of cash under the Scrip Dividend Scheme to settle HK$5,600,000 of the 2014 Final Dividend. The remaining of the 2014 Final Dividend of HK$44,557,000 was satisfied by cash.

Further details of the Scrip Dividend Scheme are set out in the Company’s circular dated 30 December 2014.

6

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Condensed Consolidated Statement of Cash Flows For the six months ended 31 January 2015

		Six months ended	Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	NET CASH FLOWS FROM OPERATING ACTIVITIES	182,352	587,537
	CASH FLOWS FROM INVESTING ACTIVITIES
	Acquisition of investment properties via an acquisition of a subsidiary	—	(123,145)
	Purchases of items of property, plant and equipment	(1,518,346)	(41,940)
	Additions to investment properties	(1,358,553)	(711)
	Acquisition of additional interest in an associate	—	(29,336)
	Advances to associates	(2,665)	(12,942)
	Advances to joint ventures	(60,017)	(92,005)
	Repayment from a joint venture	550,000	—
	Dividend received from a joint venture	10,000	—
	Dividends received from unlisted available-for-sale financial assets	22,149	23,000
	Increase in pledged bank balances and time deposits	(29,078)	(36,986)
	Others	(1,190)	(13,910)
	NET CASH FLOWS USED IN INVESTING ACTIVITIES	(2,387,700)	(327,975)
	CASH FLOWS FROM FINANCING ACTIVITIES
	New bank borrowings raised	1,885,620	6,729
	Repayment of bank borrowings	(105,252)	(95,250)
	Bank financing charges	(28,051)	(2,479)
	Dividend paid	(44,557)	—
	Dividend paid to a non-controlling shareholder of a subsidiary	(41,468)	—
	Others	8,100	4,747
	NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES	1,674,392	(86,253)
	NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(530,956)	173,309
	Cash and cash equivalents at beginning of period	1,671,478	3,123,631
	Effect of foreign exchange rate changes, net	(676)	689
	CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,139,846	3,297,629
	ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS
	Cash and bank balances	601,793	1,528,351
	Time deposits	538,053	1,769,278
		1,139,846	3,297,629

7

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

Notes to Condensed Consolidated Interim Financial Statements 31 January 2015

1.

BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements of the Group for the six months ended 31 January 2015 have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with Hong Kong Accounting Standard (“ HKAS ”) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants.

The condensed consolidated interim financial statements have not been audited by the Company’s auditors but have been reviewed by the Company’s audit committee.

2. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies and basis of presentation used in the preparation of these interim financial statements are the same as those used in the Group’s audited consolidated financial statements for the year ended 31 July 2014.

The Group has adopted the new and revised Hong Kong Financial Reporting Standards (“ HKFRSs ”, which also include HKASs and Interpretations) which are applicable to the Group and are effective in the current period. The adoption of these new and revised HKFRSs has had no material impact on the reported results or financial position of the Group.

3. SEGMENT INFORMATION

During the year ended 31 July 2014, management changed its reporting segments to (i) property development and sales; (ii) property investment; (iii) hotel operation; (iv) restaurant operation; and (v) others as a result of growing importance of the restaurant operation segment to the operation of the Group. The corresponding information for the six months ended 31 January 2014 has been re-presented accordingly.

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

	Six months ended 31 January (Unaudited)
	Property Property development and sales investment Hotel operation Restaurant operation Others Eliminations 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Consolidated 2015 2014 HK$’000 HK$’000
Segment revenue: Sales to external customers Intersegment sales Other revenue	177,644 722,742 299,942 237,011 186,481 183,488 102,293 69,565 11,283 11,848 — — — — 6,128 7,577 180 — — — 11,434 14,267 (17,742) (21,844) 2,037 1,331 1,169 672 25 2 507 654 2,313 1,669 — —	777,643 1,224,654 — — 6,051 4,328
Total	179,681 724,073 307,239 245,260 186,686 183,490 102,800 70,219 25,030 27,784 (17,742) (21,844)	783,694 1,228,982
Segment results	53,290 259,779 240,113 185,782 35,838 41,665 2,245 (15,773) (5,562) 1,692 — —	325,924 473,145 2,427 10,253 22,225 23,237 709,727 340,218 (528) — (104,904) (95,686) — (139,017)
Interest income from bank deposits — unallocated Unallocated revenue Fair value gains on investment properties — — 709,727 340,218 — — — — — — — — Employee share option benefits — unallocated Unallocated expenses Provision for tax indemnity Proft from operating activities Finance costs Share of profits and losses of associates 445 15 — — — — (541) (1,859) — — — — Share of profits and losses of associates — unallocated Share of profits and losses of joint ventures (219) 6,106 103,524 43,045 — — — — — — — — Discount on acquisition of additional interest in an associate Profit before tax Tax Profit for the period
		954,871 612,150 (84,100) (122,489) (96) (1,844) (9,475) 45,311 103,305 49,151 — 99,382
		964,505 681,661 (40,606) (44,986)
		923,899 636,675

8

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

3. SEGMENT INFORMATION (CONTINUED)

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

Property Property development and sales investment Hotel operation Restaurant operation Others 31 January 31 July31 January 31 July31 January 31 July31 January 31 July31 January 31 July 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 (Unaudited) (Audited)(Unaudited) (Audited)(Unaudited) (Audited)(Unaudited) (Audited)(Unaudited) (Audited) HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Consolidated 31 January 31 July 2015 2014 (Unaudited) (Audited) HK$’000 HK$’000
Segment assets 1,571,181 1,495,84214,646,625 12,732,170 2,429,057 885,267 315,845 272,520 107,245 46,726 Interests in associates 6,232 7,199 — — — — 14,836 18,610 — — Interests in associates — unallocated Interests in joint ventures 933,848 1,494,050 4,688,017 4,524,493 — — — — — — Unallocated assets Total assets Segment liabilities 46,461 70,333 165,117 151,066 80,346 61,587 15,159 17,180 6,967 6,537 Bank borrowings Guaranteed notes Other unallocated liabilities Total liabilities	19,069,953 15,432,525 21,068 25,809 3,819,078 3,816,061 5,621,865 6,018,543 1,869,135 2,669,909
	30,401,099 27,962,847
	314,050 306,703 4,323,435 2,691,222 2,701,248 2,698,122 1,052,979 1,042,305
	8,391,712 6,738,352

4. PROFIT FROM OPERATING ACTIVITIES

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

		Six months ended	Six months ended
		31 January
		2015		2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	Depreciation#	24,061		15,592
	Amortisation of prepaid land lease payments*	513		514
	Fair value (gain)/loss on a listed equity investment at fair value through profit or loss*	(3,061)		1,222
	Interest income from bank deposits	(2,427)		(10,253)
	Other interest income	(1,997)		(212)
	Dividend income from listed equity investments at fair value through profit or loss	—		(25)
	Dividend income from unlisted available-for-sale financial assets	(22,149)		(23,000)

# Depreciation charge of approximately HK$22,107,000 (Six months ended 31 January 2014: HK$14,364,000) for property, plant and equipment is included in “other operating expenses, net” on the condensed consolidated income statement.

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

9

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

5. FINANCE COSTS

	FINANCE COSTS
		Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	Interest on bank borrowings wholly repayable within five years	38,547	34,711
	Interest on guaranteed notes wholly repayable within five years	79,412	79,552
	Bank financing charges	7,343	9,453
		125,302	123,716
	Less: Amount capitalised in a hotel development project (note 9)	(31,000)	—
	Amount capitalised inproperties under development for sale	(10,202)	(1,227)
		84,100	122,489

6. DISCOUNT ON ACQUISITION OF ADDITIONAL INTEREST IN AN ASSOCIATE

During the period from November 2013 to December 2013, the Group acquired 1.33% additional interest in eSun Holdings Limited (“ eSun ”) from the public shareholders at a cost of approximately HK$18,545,000 and the Group’s interest in eSun was increased from 39.93% to 41.26%. A discount on acquisition of approximately HK$99,382,000 arose from this acquisition.

7. TAX

Hong Kong profits tax has been provided at the rate of 16.5% (Six months ended 31 January 2014: 16.5%) on the estimated assessable profits arising in Hong Kong during the period.

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

		Six months ended	Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	Current tax
	Hong Kong	22,138	34,914
	Overseas	15,100	8,438
		37,238	43,352
	Deferred tax	3,368	1,634
	Tax charge for theperiod	40,606	44,986

10 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

8. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY

		Six months ended	Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	Earnings
	Earnings for the purpose of basic earnings per share	908,382	622,028
	Effect of dilutive potential ordinary shares arising from adjustment
	to the share of result of an associate based on dilution of its earnings per share	(47)	(163)
	Earnings for thepurpose of diluted earningsper share	908,335	621,865
		’000	’000
	Number of shares
	Weighted average number of ordinary shares for the purpose of basic
	earnings per share	20,063,065	20,062,893
	Effect of dilutive potential ordinaryshares arising from share options	84,783	98,999
	Weighted average number of ordinary shares for the purpose of diluted
	earningsper share	20,147,848	20,161,892

9. PROPERTY, PLANT AND EQUIPMENT

During the current period, increase in property, plant and equipment (net of depreciation and disposals) of approximately HK$1,705 million mainly includes additions to a hotel development project as disclosed in the Company’s circular dated 20 June 2014 amounting to HK$1,730 million.

10. DEBTORS, DEPOSITS PAID AND OTHER RECEIVABLES/CREDITORS, DEPOSITS RECEIVED AND ACCRUALS

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

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 11

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

10. DEBTORS, DEPOSITS PAID AND OTHER RECEIVABLES/CREDITORS, DEPOSITS RECEIVED AND ACCRUALS (CONTINUED)

• (a) (Continued)

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

	31 January	31 January	31 July
		2015	2014
	(Unaudited)		(Audited)
		HK$’000	HK$’000
	Trade debtors:
	Not yet due or less than 30 days past due	8,372	8,278
	31 — 60 days past due	3,424	1,397
	61 — 90 days past due	522	201
	Over 90 days past due	3,868	1,059
		16,186	10,935
	Other receivables	54,678	61,283
	Deposits paid and prepayments	69,991	61,814
		140,855	134,032

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

	31 January	31 January	31 July
		2015	2014
	(Unaudited)		(Audited)
		HK$’000	HK$’000
	Trade creditors:
	Not yet due or less than 30 days past due	12,004	8,967
	31 — 60 days past due	285	770
	61 — 90 days past due	19	199
	Over 90 days past due	67	174
		12,375	10,110
	Other payables and accruals	140,708	158,050
	Deposits received and other provisions	156,711	131,563
		309,794	299,723

12 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

11. SHARE OPTION SCHEME

The Company adopted a share option scheme on 22 December 2006 for the purpose of providing incentives to, rewarding, remunerating, compensating and/or providing benefits to the eligible participants.

The table below discloses movement of the Company’s share options held by the Group’s directors, employees and other eligible participants during the period:

		Number of
		share options
	Outstanding as at 1 August 2014	702,823,903
	Granted on 21 January2015	11,000,000
	Outstandingas at 31 January2015	713,823,903

The exercise price of the Company’s share options granted on 21 January 2015 was HK$0.174 per share. The closing price of the Company’s shares immediately before 21 January 2015, the date of grant, was HK$0.171 per share.

The fair value of the share options granted during the period was approximately HK$528,000 (Six months ended 31 January 2014: Nil) of which the Group recognised the entire amount as expense during the period.

The fair value of equity-settled share options granted during the period was estimated as at the date of grant using the Binomial Option Pricing Model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs to the model used:

Dividend yield (%)	1.3021
Expected volatility (%)	53.6130
Historical volatility (%)	53.6130
Risk-free interest rate (%)	1.4172
Expected life of options (years)	10
Closing share price (HK$ per share)	0.172

The expected life of the options is not necessarily indicative of the exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

12. CAPITAL COMMITMENTS

The Group had the following commitments not provided for in the condensed consolidated interim financial statements at the end of the reporting period:

		31 January	31 July
		2015	2014
		(Unaudited)	(Audited)
		HK$’000	HK$’000
	Contracted, but not provided for
	Purchase of property, plant and equipment	4,434	3,308
	Development and operation of a hotel project	89,870	1,560,502
	Addition of investment properties	10,786	11,950
		105,090	1,575,760
	Authorised, but not contracted for
	Development of a hotel project	2,398,687	2,427,632
		2,503,777	4,003,392

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 13

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

12. CAPITAL COMMITMENTS (CONTINUED)

In addition, the Group’s share of a joint venture’s own capital commitments, in respect of future development expenditure of its investment properties, is as follows:

		31 January	31 July
		2015	2014
		(Unaudited)	(Audited)
		HK$’000	HK$’000
	Contracted, but notprovided for	98,169	170,763

13.

CONTINGENT LIABILITIES

• (a) Contingent liabilities not provided for in the condensed consolidated financial statements at the end of the reporting period are as follows:

		31 January	31 July
		2015	2014
		(Unaudited)	(Audited)
		HK$’000	HK$’000
	Guarantees given to banks in connection with facilities
	granted to and utilised byajoint venture	653,500	—

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

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

After taking into account the Property Interests currently held by Lai Fung as at 31 January 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 (31 July 2014: HK$1,350,000,000).

After taking into account the plans and the status of the Property Interests held by Lai Fung as at 31 January 2015 and 31 July 2014 which are covered under the Lai Fung Tax Indemnity Deed and the prevailing tax rates and legislation governing PRC income tax and LAT, the Group recorded an aggregate provision for tax indemnity of approximately HK$729,387,000. During the six months ended 31 January 2014, the Group recognised an additional provision for tax indemnity of HK$139,017,000 in the condensed consolidated income statement.

14 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

14. RELATED PARTY TRANSACTIONS

In addition to the related party transactions and balances detailed elsewhere in the condensed consolidated interim financial statements, the Group entered into the following material transactions with related parties during the period:

(a) Transactions with related parties

			Six months ended	Six months ended
			31 January
			2015	2014
			(Unaudited)	(Unaudited)
			HK$’000	HK$’000
	Rental income and building management fee received
	from eSun and its subsidiaries (collectively the
	“eSun Group”), an associate	(Note)	5,757	4,744
	Sharing of corporate salaries on a cost basis allocated to:
	— LSG		3,634	1,603
	— the eSun Group		23,779	16,276
	Sharing of administrative expenses on a cost basis allocated	to:
	— LSG		1,447	1,211
	— the eSun Group		4,603	8,699
	Rental expenses and building management fees to
	an associate of LSG	(Note)	976	936
	Sharing of corporate salaries on a cost basis allocated from:
	— LSG		2,743	243
	— the eSun Group		2,359	2,001
	Sharing of administrative expenses on a cost basis
	allocated from:
	— LSG		12	17
	— the eSun Group		186	425
	Purchase ofproperties for sale from ajoint venture	(Note)	—	1,790

Note: These transactions were entered into based on terms stated in the respective agreements or contracts and were charged on bases mutually agreed by the respective parties.

(b) Compensation of key management personnel of the Group

		Six months ended	Six months ended
		31 January
		2015	2014
		(Unaudited)	(Unaudited)
		HK$’000	HK$’000
	Short term employee benefits	16,969	15,715
	Post-employment benefits	130	123
	Total compensationpaid to keymanagementpersonnel	17,099	15,838

15

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

15. FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

Financial instruments measured at amortised cost

Except for the guaranteed notes with fair value of approximately HK$2,751,160,000 (31 July 2014: HK$2,741,500,000), the directors consider the carrying amounts of all other financial assets and financial liabilities measured at amortised cost approximate to their fair values as at the end of the reporting period.

Financial instruments measured at fair value

As at 31 January 2015

		Level 1	Level 2	Level 3	Total
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
		HK$’000	HK$’000	HK$’000	HK$’000
	Available-for-sale financial assets, at fair value	—	99,776	1,112,413	1,212,189
	Equity investments at fair value through
	profit or loss	5,220	—	—	5,220
		5,220	99,776	1,112,413	1,217,409
	As at 31 July 2014
		Level 1	Level 2	Level 3	Total
		(Audited)	(Audited)	(Audited)	(Audited)
		HK$’000	HK$’000	HK$’000	HK$’000
	Available-for-sale financial assets, at fair value	—	103,434	1,115,780	1,219,214
	Equity investments at fair value through
	profit or loss	2,159	—	—	2,159
		2,159	103,434	1,115,780	1,221,373

The movements in fair value measurements in Level 3 during the period are as follows:

		(Unaudited)
		HK$’000
	Available-for-sale financial assets, at fair value
	At 1 August 2014	1,115,780
	Total losses recognised in other comprehensive income	(3,367)
	At 31 January2015	1,112,413

16

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Notes to Condensed Consolidated Interim Financial Statements (Continued)

31 January 2015

15. FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (CONTINUED)

Valuation techniques

Fair value measurement using significant unobservable inputs (Level 3)

Fair value of the equity interest in an investee company has been estimated using the fair value of investment properties held by an investee company, which is determined by the direct comparison and the income capitalisation methods detailed below.

The properties are valued by the direct comparison method on the assumption that each property can be sold in its existing state subject to existing tenancies or otherwise with the benefit of vacant possession and making references to comparable sales transactions as available in the relevant markets. Comparison is based on prices realised on actual transactions or asking prices of comparable properties. Comparable properties with similar sizes, characters and locations are analysed, and carefully weighed against all respective advantages and disadvantages of each property in order to arrive at a fair comparison of value.

The properties are also valued by the income capitalisation approach taking into account the rents passing of the properties and the reversionary potential of the tenancies, and reconciling the two approaches, if applicable.

Information about fair value measurement as at 31 January 2015 using significant unobservable inputs (Level 3)

Unobservable inputs		Relationship of unobservable inputs to fair value
Average monthly market rent per square foot	HK$107	The higher the market rent, the higher the fair value
Capitalisation rate	3%	The higher the capitalisation rate, the lower
		the fair value

16. COMPARATIVE FIGURES

Certain comparative amounts have been reclassified to conform with the current period’s presentation. In the opinion of the directors of the Company, this presentation would better reflect the financial performance of the Group.

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 17

Interim Ordinary Dividend

The Board of the Company has resolved not to declare the payment of an interim ordinary dividend for the financial year ending 31 July 2015. No interim ordinary dividend was declared in respect of the last corresponding period.

Management Discussion and Analysis

BUSINESS REVIEW AND OUTLOOK

The global economies remain on a delicate recovery path, despite continuous support from central banks around the world. Major economies such as the United States, the Euro Zone and Japan continue to struggle against a backdrop of geopolitical uncertainties around the world such as those in the Middle East and between Russia and Ukraine. As a global financial centre, Hong Kong’s economic performance is clearly not immune from the challenges faced by the major economies around the world.

The property sector in Hong Kong continues to perform steadily notwithstanding the challenging conditions. The retail market is supported by low unemployment with steady visitor arrivals and the office leasing market is gradually improving. The residential market continues to be slow generally since the introduction of control measures in late 2012 and early 2013 but new launches reported robust prices being achieved. The Hong Kong Government implemented a new round of policy measures since the period end to cool down price increases particularly for smaller units, all of which suggests that underlying demand remains strong. 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 despite the government’s emphasis and effort. Labour supply shortage in the construction industry is driving wage inflation and continues to pose a challenge on the cost management side.

The Group weathered the challenging conditions well. The rental portfolio of approximately 1.7 million square feet generated steady rental income at high occupancy rates. Rental income increased through tenant mix adjustments and rental reversion. With the sale of the residential units in Ocean One being completed and before the completion of the Tseung Kwan O project and the Ma Tau Kok project, sales revenue for the current and coming financial years will be driven by the sale of the 339 Tai Hang Road project.

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. Further to securing the Tseung Kwan O site, the Ma Tau Kok project in April 2014 and the Hong Kong Ocean Park Marriott Hotel (“ Ocean Hotel ”) in May 2014, the Group continued to participate in government tenders to grow the pipeline. The completion of the Observatory Road project in 2015 will add an attributable rental gross floor area (“ GFA ”) of approximately 82,600 square feet in the prime Tsim Sha Tsui area of Hong Kong when it is completed in the third quarter of 2015. Pre-leasing of this property is going well.

The acquisition of 107 and 100 Leadenhall Street in London bolstered our portfolio in the United Kingdom. Both properties are freehold commercial properties located in the heart of the city of London. These properties added 273,100 square feet to our rental portfolio and each generated historical gross yields net of management fees of between 5.5% to approximately 6.0% and is expected to generate good rental income as well as redevelopment potential to the Group in the long run. The renovation work for 36 Queen Street has been completed and is now leased and a meaningful contribution is expected in this financial year.

The change in board lot size from 1,000 shares to 15,000 shares announced by the Group on 21 January 2015 is effective from 9:00 a.m. on 11 February 2015. This change is in line with a request from shareholders at the Company’s last annual general meeting in December 2014.

The Group’s strong cash position of HK$1,307.0 million of cash on hand with a net debt to equity ratio of 26.5% as at 31 January 2015 provides the Group full confidence and the means to review opportunities more actively. The Group’s gearing excluding the London portfolio all of which have a positive carry net of financing costs is 18.6%. However, the Group will continue its prudent and flexible approach in growing the landbank and managing its financial position.

18 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

(Continued) Management Discussion and Analysis

OVERVIEW OF INTERIM RESULTS

For the six months ended 31 January 2015, the Group recorded turnover of HK$777.6 million (2014: HK$1,224.7 million) and a gross profit of HK$446.9 million (2014: HK$601.6 million), representing a decrease of approximately 36.5% and 25.7%, respectively over the same period last year. The decrease in turnover and gross profit was primarily due to fewer available stocks of properties for sale after the completion of the sale of the residential units of Ocean One during the period under review. Turnover from rental income, sales of properties, restaurants and hotel and other operations during the period was HK$299.9 million (2014: HK$237.0 million), HK$177.6 million (2014: HK$722.7 million), HK$102.3 million (2014: HK$69.6 million) and HK$197.8 million (2014: HK$195.4 million), respectively.

For the six months ended 31 January 2015, net profit attributable to owners of the Company was approximately HK$908.4 million (2014: HK$622.0 million), representing an increase of approximately 46.0% over the same period last year. The substantial increase is a mix of lower profit before revaluation of the Group’s investment properties and a substantial increase in revaluation of the Group’s investment properties during the period under review. Excluding the effect of property revaluations, net profit attributable to owners of the Company was approximately HK$92.8 million (2014: HK$178.5 million). Basic earnings per share including and excluding the effect of property revaluations was HK$0.045 (2014: HK$0.031) and HK$0.005 (2014: HK$0.009), respectively.

effect of property revaluations was HK$0.045 (2014: HK$0.031) and HK$0.005 (2014:	HK$0.009), respectively.	HK$0.009), respectively.
	Six months ended
	31 January
Profit attributable to owners of the Company (HK$ million)	2015	2014
Reported	908.4	622.0
Adjustments in respect of revaluation gains of investment properties held by
— the Company and subsidiaries	(709.7)	(340.2)
— associates and joint ventures	(105.9)	(103.3)
Net profit after tax excluding revaluation gains of investment properties	92.8	178.5

Equity attributable to owners of the Company as at 31 January 2015 amounted to HK$21,577.3 million, up from HK$20,774.5 million as at 31 July 2014. Net asset value per share attributable to owners of the Company increased by 3.8% to HK$1.074 per share as at 31 January 2015 from HK$1.035 per share as at 31 July 2014.

PROPERTY PORTFOLIO COMPOSITION

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

						Total
						(excluding	No. of
						car-parking	car-parking
						spaces &	spaces
Commercial/						ancillary	attributable to
	Retail	Office	Industrial	Residential	Hotel	facilities)	the Group
Completed Properties Held for Rental1	433	1,144	63	—	—	1,640	980
Completed Hotel Properties	—	—	—	—	98	98	—
Properties Under Development2	157	—	—	325	366	848	214
Completed Properties Held for Sale3	18	—	—	27	—	45	19
Total GFA of major properties of the Group	608	1,144	63	352	464	2,631	1,213

1. Completed and rental generating properties

2. All properties under construction

3. Completed properties held for sale

The above table does not include GFA of properties held by Lai Fung.

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 19

(Continued) Management Discussion and Analysis

PROPERTY INVESTMENT

Rental Income

During the period under review, the Group’s rental operations recorded a turnover of HK$299.9 million (2014: HK$237.0 million), representing a 26.5% increase over the same period last year. The increase is primarily due to contributions from newly acquired rental properties in London, as well as continued management of tenant mix and rental reversion at major investment properties during the period under review.

The Group wholly owns three major investment properties in Hong Kong, namely Cheung Sha Wan Plaza, Causeway Bay Plaza 2 and Lai Sun Commercial Centre.

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

	Six months ended 31 January	Six months ended 31 January		Period end
	2015	2014	%	occupancy
	HK$ million	HK$ million	Change	(%)
Hong Kong
Cheung Sha Wan Plaza
(including car-parking spaces)	146.2	134.6	8.6	98.5
Causeway Bay Plaza 2
(including car-parking spaces)	81.7	73.0	11.9	99.9
Lai Sun Commercial Centre
(including car-parking spaces)	27.7	24.1	14.9	97.2
Others	5.8	5.3	9.4	N/A
Subtotal:	261.4	237.0	10.3
London, United Kingdom
36 Queen Street	11.2	—	N/A	85.4
107-112 Leadenhall Street	24.1	N/A	N/A	100.0
100 Leadenhall Street	3.2	N/A	N/A	100.0
Subtotal:	38.5	—	N/A
Total:	299.9	237.0	26.5
Rental proceeds from joint venture project
Hong Kong
CCB Tower* (50% basis)	57.1	50.5	13.1	94.4

20 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

(Continued) Management Discussion and Analysis

PROPERTY INVESTMENT (CONTINUED)

Rental Income (Continued)

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

	Six months ended 31 January 2015	Six months ended 31 January 2015	Six months ended 31 January 2015	Six months ended 31 January 2015	Six months ended 31 January 2014	Six months ended 31 January 2014	Six months ended 31 January 2014
	Group			Attributable	Group		Attributable
	interest	Turnover		GFA	interest	Turnover	GFA
		(HK$ million)		(square feet)		(HK$ million)	(square feet)
Hong Kong
Cheung Sha Wan Plaza	100%				100%
Commercial			78.7	216,890		74.1	216,578
Office			58.7	472,224		52.7	472,969
Car-parking
spaces			8.8	N/A		7.8	N/A
			146.2	689,114		134.6	689,547
Causeway Bay Plaza 2	100%				100%
Commercial			53.0	111,172		47.2	111,172
Office			26.4	97,355		23.5	97,355
Car-parking
spaces			2.3	N/A		2.3	N/A
			81.7	208,527		73.0	208,527
Lai Sun Commercial Centre	100%				100%
Commercial			16.8	105,167		14.8	105,167
Office			3.7	83,370		3.0	83,370
Car-parking
spaces			7.2	N/A		6.3	N/A
			27.7	188,537		24.1	188,537
Others			5.8	62,606**		5.3	62,606**
Subtotal:			261.4	1,148,784**		237.0	1,149,217**
London, United Kingdom
36 Queen Street	100%				100%
Office			11.2	60,816		—	60,816
107-112 Leadenhall Street	100%				N/A
Office			24.1	146,606		N/A	N/A
100 Leadenhall Street	100%				N/A
Office			3.2	126,539		N/A	N/A
Subtotal:			38.5	333,961		—	60,816
Total:			299.9	1,482,745**		237.0	1,210,033**
Joint Venture Project
Hong Kong
CCB Tower* (50% basis)	50%				50%
Office			57.1	114,555		50.5	114,555

CCB Tower is a joint venture project with China Construction Bank Corporation (“ CCB* ”) in which each of the Group and CCB has an effective 50% interest. For the six months ended 31 January 2015, the rental proceeds recorded by the joint venture is HK$114.1 million.

** Excluding 10% interest in AIA Central

21

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

(Continued) Management Discussion and Analysis

PROPERTY INVESTMENT (CONTINUED)

Review of major investment properties

Hong Kong Properties

Cheung Sha Wan Plaza

The asset comprises of a 8-storey and a 7-storey office tower erected on top of a retail podium which was completed in 1989. It is located on top of the Lai Chi Kok MTR station with a total GFA of approximately 689,100 square feet (excluding car-parking spaces). The arcade is positioned to serve the local communities nearby with major banks and recognised restaurants chains as the key tenants.

Causeway Bay Plaza 2

The asset comprises of a 28-storey commercial/office building with car parking facilities at basement levels which was completed in 1992. It is located at the heart of Causeway Bay with a total GFA of approximately 208,500 square feet (excluding car-parking spaces). Key tenants include the HSBC’s branch and commercial offices and major restaurants.

Lai Sun Commercial Centre

The asset comprises a 13-storey commercial/carpark complex completed in 1987. It is located near the Lai Chi Kok MTR station with a total GFA of approximately 188,500 square feet (excluding car-parking spaces).

CCB Tower, 3 Connaught Road Central

The Group has a 50:50 interest with CCB in the joint redevelopment project of the former Ritz-Carlton Hotel in Central. This office tower is a landmark property in Central featuring underground access to the MTR station in Central. The property has a total GFA of approximately 229,000 square feet (excluding car-parking spaces). CCB Tower added approximately 115,000 square feet of attributable GFA to our portfolio. CCB Tower is now almost fully leased out with 15 floors of the office floors, 2 banking hall floors and certain area on ground floor and the first floor leased by CCB for its Hong Kong operations.

Overseas Properties

36 Queen Street, London EC4 1HJ, United Kingdom

In February 2011, the Group acquired an office building in the city in central London located at 36 Queen Street. Completed in 1986, it comprises approximately 60,800 square feet gross internal area of office accommodation extending over basement, ground and six upper floors. Comprehensive refurbishment and renovation work has been completed and the building is being leased out during the period.

107-112 Leadenhall Street, London EC3A 4AF, United Kingdom

In April 2014, the Group acquired a property located at the core of the insurance district in central London, surrounded by 30 St Mary Axe (commonly known as the Gherkin), Lloyd’s of London and Willis Building at 51 Lime Street. It is a freehold commercial property housing both retail and offices. The building comprises approximately 146,600 square feet gross internal area of office accommodation extending over basement, lower ground floor, ground floor, mezzanine floor and seven upper floors. The building is currently fully leased out.

100 Leadenhall Street, London EC3A 3BP, United Kingdom

Following the acquisition of 107-112 Leadenhall in April 2014, the Group announced the acquisition of 100 Leadenhall in November 2014 which was completed in January 2015. This property comprises a basement, a lower ground floor, ground floor and nine upper floors and provides approximately 126,500 square feet net internal area of offices and ancillary accommodation. The property is currently let to ACE Global Markets Limited for a term of 16 years expiring on 17 January 2018.

22 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

(Continued) Management Discussion and Analysis

PROPERTY DEVELOPMENT

For the six months ended 31 January 2015, recognised turnover from sales of properties was HK$177.6 million (2014: HK$722.7 million), representing a decrease of 75.4% over the same period last year. The significant decrease was due to the completion of the sale of residential units in Ocean One.

Review of major projects for sale

Ocean One, 6 Shung Shun Street, Yau Tong

The Group wholly owns this development project, namely “Ocean One” located at No. 6 Shung Shun Street, Yau Tong, Kowloon. This property is a residential-cum-commercial property with a total GFA of about 122,000 square feet (excluding car-parking spaces) or 124 residential units and 2 commercial units. The total development cost (including land cost and lease modification premium) is about HK$730 million. Pre-sales commenced in December 2012.

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

335-339 Tai Hang Road, Hong Kong

The Group wholly owns the site located at 335-339 Tai Hang Road, Hong Kong. The Group has developed the site into a luxury residential property with a total GFA of about 30,400 square feet (excluding car-parking spaces). The total development cost (including land cost and lease modification premium) is about HK$670 million.

The property is now open for sale. As at 31 January 2015, we have completed the sale of 1 residential unit with total sales proceeds of HK$96.4 million recognised during the period under review and the average selling price based on saleable area is approximately HK$40,000 per square foot as at 31 January 2015.

Review of major projects under development

2-12 Observatory Road

The Group completed the acquisition of a 50% interest in a project at Observatory Road, Kowloon with the buildings previously erected there known as Nos. 2-12, Observatory Road, Kowloon in November 2011. The joint venture partner is Henderson Land.

The site is to be redeveloped into a multi-storey commercial building with a total GFA of approximately 165,000 square feet (excluding car-parking spaces). The total development cost is estimated to be approximately HK$2.3 billion including land value of approximately HK$1.8 billion. The new building is expected to be completed in the third quarter of 2015.

Area 68A2, Tseung Kwan O

In November 2012, the Group successfully tendered for and secured a site located at Area 68A2, Tseung Kwan O, New Territories, through a 50% joint venture vehicle. The lot has an area of approximately 229,000 square feet with a permitted total GFA of approximately 573,000 square feet split into approximately 459,000 square feet for residential use and approximately 114,000 square feet for non-industrial use. The current intention is to develop the lot primarily into a residential project for sale, comprising residential towers as well as houses. Completion is expected to be in the fourth quarter of 2017.

Ocean Hotel project

The Group was named the most preferred proponent by Ocean Park for the Ocean Hotel project in October 2013 and was officially awarded the project in May 2014. The Ocean Hotel, to be operated by the Marriott group, will provide a total of 471 rooms and approximately 366,000 square feet of attributable rental space to the existing rental portfolio attributable to the Group of approximately 1.7 million square feet. The total development cost is estimated to be approximately HK$4.4 billion. Completion is expected to be in the fourth quarter of 2017.

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 23

(Continued) Management Discussion and Analysis

PROPERTY DEVELOPMENT (CONTINUED)

Review of major projects under development (Continued)

Ma Tau Kok project

Since securing the Tseung Kwan O site in November 2012, the Group participated in a number of government tenders. Other than the Ocean Hotel project, the Group was successful in April 2014 in its bid for the development right to the San Shan Road/Pau Chung Street project from the Urban Renewal Authority, Hong Kong in Ma Tau Kok, Kowloon, Hong Kong. The lot has an area of approximately 12,600 square feet with a permitted total GFA of approximately 113,400 square feet split into approximately 94,500 square feet for residential use and approximately 18,900 square feet for non-industrial use. The total development cost is estimated to be approximately HK$1.0 billion and the completion is expected to be in the first quarter of 2018.

RESTAURANT OPERATION

For the six months ended 31 January 2015, the restaurant operation contributed HK$102.3 million to the Group’s turnover (2014: HK$69.6 million), representing an increase of approximately 47.0% from the same period last year. The contribution from the restaurants segment was boosted by the new restaurants added, including CIAK-In The Kitchen and China Tang Hong Kong at Landmark in Central, Hong Kong which were opened in December 2013.

The restaurant operation includes the Group’s interests in 12 restaurants in Hong Kong and Mainland China, including the Michelin 3-star Italian restaurant 8[1/2] Otto e Mezzo BOMBANA Hong Kong, Michelin 2-star Japanese restaurant Wagyu Takumi, Michelin 1-star Italian restaurant CIAK-In The Kitchen at Landmark, Michelin 1-star Japanese restaurant Wagyu Kaiseki Den, 8[1/2] Otto e Mezzo BOMBANA Shanghai, Opera BOMBANA in Beijing, Gin Sai, Rozan, Kowloon Tang, Island Tang, Chiu Tang and China Tang Hong Kong at Landmark in Central, Hong Kong.

HOTEL OPERATION

Turnover from hotel operation was derived from the Group’s operation of the Caravelle Hotel in Ho Chi Minh City, Vietnam. For the six months ended 31 January 2015, the hotel operation contributed HK$186.5 million to the Group’s turnover (2014: HK$183.5 million).

Caravelle Hotel is a leading international 5-star hotel in the centre of the business, shopping and entertainment district in Vietnam. It is an elegant 24-storey tower with a mixture of French colonial and traditional Vietnamese style and has 335 superbly appointed rooms, suites, exclusive Signature Floors, Signature Lounge and a specially equipped room for the disabled. Total GFA attributable to the Group is approximately 98,400 square feet.

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

The hotel operation has extensive experience in providing consultancy and management services to hotels in Mainland China, Hong Kong and other Asian countries. The division’s key strategy going forward will continue to focus on providing management services, particularly to capture opportunities arising from the developments of Lai Fung in Shanghai, Guangzhou, Zhongshan and Hengqin. The hotel division will manage Lai Fung’s serviced apartments in Shanghai and Zhongshan under the “STARR” brand. STARR Resort Residence Zhongshan soft opened in August 2013 and comprises two 16-storey blocks with 90 fully furnished serviced apartment units located in the Palm Lifestyle complex in Zhongshan Western district at Cui Sha Road, opposite to the new Zhongshan traditional Chinese medical centre. STARR Hotel Shanghai soft opened in November 2013 and is a 17-storey hotel with 287 fully furnished and equipped hotel units with kitchenette located in the Mayflower Lifestyle complex right in the heart of the Zhabei inner ring road district, within walking distance to Lines 1, 3 and 4 of the Shanghai Metro Station with easy access to major motorways.

24 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

(Continued) Management Discussion and Analysis

INTERESTS IN ASSOCIATES (eSun)

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

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

The steady fundamental performance was offset by the incremental interest expense related to the guaranteed notes issued in June 2014 and other non-cash items in Lai Fung such as lower revaluation gains and fair value loss on the cross currency swap and led to a decrease in share of profit of HK$45.3 million to share of loss of HK$9.3 million.

INTERESTS IN JOINT VENTURES

During the period under review, contribution from joint ventures increased to HK$103.3 million (2014: HK$49.2 million), representing an increase of 110.0%. This is primarily due to stronger revaluation gain of the Observatory Road project.

LIQUIDITY AND FINANCIAL RESOURCES

As at 31 January 2015, cash and bank balances and undrawn facilities held by the Group amounted to HK$1,307.0 million and HK$1,606.4 million, respectively.

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

As at 31 January 2015, the Group had bank borrowings of approximately HK$4,323.4 million and guaranteed notes of approximately HK$2,701.2 million. The net debt to equity ratio expressed as a percentage of the total outstanding net debt (being the total outstanding bank borrowings and guaranteed notes less the pledged and unpledged bank balances and time deposits) to consolidated net assets attributable to owners of the Company was approximately 26.5%. The Group’s gearing excluding the London portfolio all of which had a positive carry net of financing costs was approximately 18.6%. As at 31 January 2015, the maturity profile of the bank borrowings of HK$4,323.4 million was spread over a period of less than 5 years with HK$1,285.6 million repayable within 1 year, HK$1,317.9 million repayable in the second year and HK$1,719.9 million repayable in the third to fifth years. All the Group’s borrowings carried interest on a floating rate basis except for the guaranteed notes issued in January 2013 which has a fixed rate of 5.7% per annum.

As at 31 January 2015, certain investment properties with carrying amounts of approximately HK$14,357.0 million, certain properties under development for sale of approximately HK$502.5 million and certain bank balances and time deposits with banks of approximately HK$167.1 million were pledged to banks to secure banking facilities granted to the Group. In addition, certain shares in subsidiaries held by the Group were also pledged to banks to secure loan facilities granted to the Group. Certain shares in joint ventures held by the Group were pledged to banks to secure loan facilities granted to joint ventures of the Group. Certain shares of an investee company held by the Group were pledged to a bank to secure a loan facility granted to this investee company. The Group’s secured bank borrowings were also secured by floating charges over certain assets held by the Group.

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 25

(Continued) Management Discussion and Analysis

LIQUIDITY AND FINANCIAL RESOURCES (CONTINUED)

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

CONTINGENT LIABILITIES

Details of contingent liabilities of the Group are set out in note 13 to the condensed consolidated interim financial statements.

26

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Particulars of Major Properties

COMPLETED PROPERTIES HELD FOR RENTAL

				Approximate Attributable Gross	Approximate Attributable Gross	Approximate Attributable Gross	Approximate Attributable Gross	Floor Area	(square feet)
									Total
									(excluding	No. of
									car-parking car-parking
									spaces &	spaces
		Group			Commercial/				ancillary attributable
Property Name	Location	Interest	Tenure			Retail	Office	Industrial	facilities) to	the Group
Hong Kong Properties
Cheung Sha Wan Plaza	833 Cheung Sha Wan Road,	100%	The property is held			216,890	472,224	—	689,114	355
	Cheung Sha Wan,		for a term expiring
	Kowloon, Hong Kong		on 30 June 2047
	(New Kowloon Inland Lot
	No. 5955)
Causeway Bay Plaza 2	463-483 Lockhart Road,	100%	The property is held			111,172	97,355	—	208,527	57
	Causeway Bay, Hong Kong		for a term of 99 years
	(Section J and		commencing on
	the Remaining Portions		15 April 1929 and
	of Sections D,E,G,H,K,L,M		renewable for
	and O, Subsection 4 of		a further term
	Section H and		of 99 years
	the Remaining Portion
	of Inland Lot No. 2833)
Lai Sun Commercial Centre	680 Cheung Sha Wan Road,	100%	The property is held			105,167	83,370	—	188,537	521
	Cheung Sha Wan,		for a term of which
	Kowloon, Hong Kong		expired on 27 June 1997
	(New Kowloon Inland Lot		and has been extended
	No. 5984)		upon expiry until
			30 June 2047
CCB Tower	3 Connaught Road Central,	50%	The property is held			—	114,555	—	114,555	19
	Hong Kong		for a term commencing
	(Inland Lot No. 8736)		from 28 June 1989 and
			expiring on 30 June 2047
Wyler Centre Phase II	20/F and 27/F and car-parking	100%	The property is held			—	—	51,236	51,236	3
	spaces nos. 17, 18 and 59		for a term of which expired
	on 2/F, 192-200 Tai Lin Pai Road,		on 27 June 1997 and
	Kwai Chung, New Territories,		has been extended
	Hong Kong		upon expiry until
			30 June 2047
AIA Central	1 Connaught Road Central,	10%	The property is held			—	42,896	—	42,896	6
	Hong Kong (Marine Lot		for a term of 999 years
	No. 275, Section A and		commencing from
	the Remaining Portion		9 September 1895
	of Marine Lot No. 278)		(for Marine Lot No. 275)
			and 999 years commencing
			from 12 October 1896
			(for Marine Lot no. 278)
Metropolitan Factory	Units A and B on 10/F and	100%	The property is held			—	—	11,370	11,370	4
and Warehouse Building	car-parking space nos. 1,2, 13		for a term of which
	and 14 on G/F,		expired on 27 June 1997
	30-32 Chai Wan Kok Street,		and has been extended
	Tsuen Wan, New Territories,		upon expiry until
	HongKong		30 June 2047
	**Subtotal of Hong Kong **		properties held for rental:			433,229	810,400	62,606	1,306,235	965

27

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

(Continued) Particulars of Major Properties

COMPLETED PROPERTIES HELD FOR RENTAL (CONTINUED)

Group Property Name Location Interest Tenure	Approximate Attributable Gross Floor Area (square feet) Total (excluding No. of car-parking car-parking spaces & spaces Commercial/ ancillary attributable Retail Office Industrial facilities) to the Group
Overseas Properties 107-112 Leadenhall Street 107-112 Leadenhall Street, 100% The property is held freehold — 146,606 — 146,606 — London_(Note 1) London EC3A 4AF, United Kingdom 100 Leadenhall Street 100 Leadenhall Street, 100% The property is held freehold — 126,539 — 126,539 15 London(Note 2) London EC3A 3BP, United Kingdom 36 Queen Street London 36 Queen Street, London 100% The property is held freehold — 60,816 — 60,816 — (Note 1)_ EC4 1HJ, United Kingdom
Subtotal of overseasproperties held for rental: — 333,961 — 333,961 15
Subtotal of completedproperties held for rental: 433,229 1,144,361 62,606 1,640,196 980

Note 1: Referring to gross internal area Note 2: Referring to net internal area

COMPLETED HOTEL PROPERTY

COMPLETED HOTEL PROPERTY	COMPLETED HOTEL PROPERTY
Approximate No. of Attributable car-parking Gross Floor Area spaces Group (square feet) attributable Hotel Name Location Interest Tenure Hotel to the Group
Caravelle Hotel 19-23 Lam Son Square, 26.01% The property is held District 1, under a land use Ho Chi Minh City, right due to expire Vietnam on 8 October 2040	98,376 —

28 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

(Continued) Particulars of Major Properties

PROPERTIES UNDER DEVELOPMENT

					Approximate Attributable Gross Floor Area	Approximate Attributable Gross Floor Area	Approximate Attributable Gross Floor Area	Approximate Attributable Gross Floor Area	Approximate Attributable Gross Floor Area
						(square	feet)
									Total
									(excluding	No. of
			Site Area						car-parking	car-parking
			(approximate	Expected					spaces &	spaces
		Group	square feet)	completion	Commercial/				ancillary	attributable
Location	Stage of construction	interest	(Note)	date	Retail	Hotel	Residential		facilities)	to the Group
2-12 Observatory Road,	Superstructure works	50%	13,765	Q3 2015	82,585	—		—	82,585	26
Tsim Sha Tsui,	in progress
Kowloon, Hong Kong
Area 68A2, Tseung Kwan O,	Foundation works	50%	229,338	Q4 2017	57,331	—	229,282		286,613	148
New Territories,	in progress
Hong Kong
The Hong Kong Ocean Park	Foundation works	100%	183,460	Q4 2017	—	366,000		—	366,000	16
Marriott Hotel at Ocean Park,	in progress
Hong Kong
San Shan Road/Pau Chung Street,	Foundation works	100%	12,599	Q1 2018	16,990	—		95,975	112,965	24
Ma Tau Kok, Kowloon,	in progress
Hong Kong
		Subtotal of properties under		development:	156,906	366,000	325,257		848,163	214

Note: On project basis

COMPLETED PROPERTIES HELD FOR SALE

Approximate Attributable Gross Floor Area (square feet)

				(square feet)
					Total
					(excluding	No. of
					car-parking	car-parking
					spaces &	spaces
		Group	Commercial/		ancillary	attributable
Property Name	Location	interest	Retail	Residential	facilities)	to the Group
Ocean One	6 Shung Shun Street, Yau Tong,	100%	17,749	—	17,749	7
	Kowloon, Hong Kong
339 Tai Hang Road	335-339 Tai Hang Road, Hong Kong	100%	—	27,400	27,400	12
	Subtotal of completedproperties held for sale:		17,749	27,400	45,149	19

29

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

Disclosure Pursuant to Paragraph 13.21 of Chapter 13 of the Listing Rules

On 26 October 2012, the Company entered into a facility agreement related to a term loan and revolving credit facility of up to HK$2,200 million to be made available to the Company, as borrower, for a period of up to three years commencing 26 October 2012.

In August 2014, the Group entered into another facility agreement related to a term loan facility of GBP48,480,000 to be made available to a wholly-owned subsidiary of the Company, as borrower, for a period of five years up to 6 August 2019.

Pursuant to the above agreements, the Company has undertaken to procure that Dr. Lam Kin Ngok, Peter and his family, will, at all times during the relevant facility periods, remain as the single largest shareholder of the Company (directly or indirectly) and will maintain control over the management of the Company.

At 31 January 2015, the outstanding loan balance of the above facilities amounted to approximately HK$1,521,494,000.

30

LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Disclosure Pursuant to Paragraph 13.22 of Chapter 13 of the Listing Rules

Financial assistance and guarantees to affiliated companies

As at 31 January 2015, the aggregate amount of financial assistance and guarantee given for facilities granted to affiliated companies has exceeded the assets ratio of 8% under the Listing Rules.

In compliance with paragraph 13.22 of Chapter 13 of the Listing Rules, the pro forma combined statement of financial position of the affiliated companies as at 31 January 2015 is disclosed as follows:

	HK$’000
Property, plant and equipment	2,877,661
Properties under development	1,119,067
Investment property under construction	5,638,361
Investment properties	16,321,286
Film rights	31,642
Film products	81,957
Music catalogs	14,325
Goodwill	137,859
Interests in associates	52,132
Interests in joint ventures	1,236,438
Available-for-sale investments	152,634
Deposits, prepayments and other receivables	789,449
Deferred tax assets	9,020
Deferred rental benefits	77,741
Pledged bank balances	383,620
Amounts due from shareholders	9,285
Net current assets	3,585,430
Total assets less current liabilities	32,517,907
NON-CURRENT LIABILITIES
Long term deposits received	(151,597)
Long term borrowings	(3,978,402)
Guaranteed notes, secured	(784,555)
Fixed rate senior notes	(2,247,948)
Derivative financial instruments	(137,883)
Deferred tax liabilities	(2,733,266)
Deferred income	(44,976)
Amounts due to shareholders	(4,760,659)
	(14,839,286)
	17,678,621
CAPITAL AND RESERVES
Issued capital	643,995
Share premium account	4,230,797
Contributed surplus	891,289
Investment revaluation reserve	14,918
Share option reserve	15,293
Hedging reserve	(2,225)
Exchange reserve	237,994
Statutory reserve	50,391
Other reserve	645,771
Accumulatedprofits	3,280,327
	10,008,550
Non-controllinginterests	7,670,071
	17,678,621

31

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED

Corporate Governance and Other Information

CORPORATE GOVERNANCE

The Company has complied with all the code provisions set out in the Corporate Governance Code (“ CG Code ”) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) throughout the six months ended 31 January 2015 save for the deviation from code provisions A.4.1, A.5.1 and E.1.2.

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

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

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

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

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

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

Board

The Board oversees the overall management of the Company’s business and affairs. The Board’s primary duty is to ensure the viability of the Company and to ascertain that it is managed in the best interests of its Shareholders as a whole while taking into account the interests of other stakeholders.

The Board has delegated the day-to-day management of the Company’s business to the management and the Executive Committee and focuses its attention on matters affecting the Company’s long-term objectives and plans for achieving these objectives, the overall business and commercial strategy of the Group as well as overall policies and guidelines.

The Board currently comprises nine members, of whom four are EDs, two are NEDs and three are INEDs. The current composition of the Board is characterised by diversity, whether considered in terms of gender, nationality, professional background and skills.

32 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

CORPORATE GOVERNANCE (CONTINUED)

Board (Continued)

The Board meets at least four times a year with meeting dates scheduled prior to the beginning of the year. Additional board meetings will be held when warranted. Directors also participate in the consideration and approval of matters of the Company by way of written resolutions circulated to Directors together with supporting explanatory materials as and when required.

All Directors have been provided, on a monthly basis, with the Group’s management information updates, giving a balanced and understandable assessment of the Group’s performance, position, recent developments and prospects in sufficient detail to keep them abreast of the Group’s affairs and facilitate them to discharge their duties under the relevant requirements of the Listing Rules.

Chairman and Chief Executive Officer

During the six months ended 31 January 2015 and up to the date of this Report, Dr. Lam Kin Ngok, Peter (an ED) was the Chairman of the Company and Mr. Lau Shu Yan, Julius (an ED) was the Chief Executive Officer. The segregation ensures a clear distinction between the Chairman’s responsibilities to manage the Board and the Chief Executive Officer’s responsibilities to manage the Company’s businesses. The division of responsibilities between the Chairman and the Chief Executive Officer is defined.

SECURITIES TRANSACTIONS BY DIRECTORS AND DESIGNATED

EMPLOYEES

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

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 33

Corporate Governance and Other Information (Continued)

DIRECTORS’ INTERESTS

The following Directors and the chief executive of the Company who held office on 31 January 2015 and their respective close associates (as defined in the Listing Rules) were interested or were deemed to be interested in the following interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong (“ SFO ”)) on that date (a) as required to be 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, if any, which they were taken or deemed to have under such provisions of the SFO); or (b) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO (“ Register of Directors and Chief Executive ”); or (c) as otherwise notified to the Company and the Stock Exchange pursuant to the Securities Code; or (d) as known by the Directors:

(1) The Company

Long positions in the ordinary shares of the Company (“Shares”) and the 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	14,307,745	Nil	10,425,699,353	20,062,893	10,460,069,991	52.05%
	owner/			(Note 1)	(Note 3)
	Owner of
	controlled
	corporations
Chew Fook Aun	Beneficial	Nil	Nil	Nil	200,628,932	200,628,932	1.00%
	owner				(Note 3)
Lau Shu Yan, Julius	Beneficial	8,783,333	Nil	Nil	100,314,466	109,097,799	0.543%
	owner				(Note 3)
Lam Hau Yin, Lester	Beneficial	Nil	Nil	Nil	200,628,932	200,628,932	1.00%
	owner				(Note 3)
U Po Chu_(Note 2)_	Beneficial	897,316	Nil	Nil	Nil	897,316	0.004%
	owner

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 42.63% in the issued share capital of LSG. LSG is approximately 12.72% owned by Dr. Lam Kin Ngok, Peter and is approximately 29.91% owned by Wisdoman Limited which is in turn 100% beneficially owned by Dr. Lam Kin Ngok, Peter.

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.

34 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

DIRECTORS’ INTERESTS (CONTINUED)

• (1) The Company (Continued)

Notes: (Continued)

• (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 0.98% 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. 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, particulars of which are set out below:

		Number of
		underlying
		Shares
		comprised
Registered Name	Date ofgrant	in the option	Optionperiod	Subscriptionprice
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

(2) 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
							% 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	237,464,979	Nil	562,590,430	1,876,211	801,931,620	42.63%
	owner/			(Note 1)	(Note 2)
	Owner of
	controlled
	corporations
Chew Fook Aun	Beneficial	Nil	Nil	Nil	18,762,111	18,762,111	1.00%
	owner				(Note 2)
Lam Hau Yin, Lester	Beneficial	60,623,968	Nil	Nil	18,762,111	79,386,079	4.22%
	owner				(Note 2)
Lam Kin Ming	Beneficial	5,008,263	Nil	Nil	Nil	5,008,263	0.27%
	owner
U Po Chu	Beneficial	4,127,625	Nil	Nil	Nil	4,127,625	0.22%
	owner

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 35

Corporate Governance and Other Information (Continued)

DIRECTORS’ INTERESTS (CONTINUED)

• (2) Associated Corporations (Continued)

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

Notes:

• (1) Dr. Lam Kin Ngok, Peter was deemed to be interested in 562,590,430 shares (representing approximately 29.91% 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. 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, 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 (“ Rights Issue ”)):

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

• (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	2,794,443	Nil	521,204,186	1,243,212	525,241,841	42.25%
	owner/			(Note 1)	(Note 2)
	Owner of
	controlled
	corporations
Chew Fook Aun	Beneficial	Nil	Nil	Nil	6,216,060	6,216,060	0.50%
	owner				(Note 2)
Lam Hau Yin, Lester	Beneficial	2,794,443	Nil	Nil	12,432,121	15,226,564	1.22%
	owner				(Note 2)

36 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

DIRECTORS’ INTERESTS (CONTINUED)

• (2) Associated Corporations (Continued)

• (ii) eSun Holdings Limited (“eSun”) — an associate of the Company (Continued)

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 42.63% and 52.05% in the issued share capital 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. A share option was granted to each of Dr. Lam Kin Ngok, Peter, Mr. Chew Fook Aun and Mr. Lam Hau Yin, Lester, particulars of which are set out below:

		Number of
		underlying
		shares
		comprised in
Registered Name	Date ofgrant	the option	Optionperiod	Subscriptionprice
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

(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
Name of		Personal	Family	Corporate	Other	Total	total issued
Director	Capacity	interests	interests	interests	interests	interests	shares
Lam Kin Ngok, Peter	Beneficial	Nil	Nil	8,274,270,422	16,095,912	8,290,366,334	51.40%
	Owner/			(Note 1)	(Note 2)
	Owner of
	controlled
	corporations
Chew Fook Aun	Beneficial	Nil	Nil	Nil	80,479,564	80,479,564	0.50%
	owner				(Note 2)
Lau Shu Yan, Julius	Beneficial	12,917,658	Nil	Nil	48,287,738	61,205,396	0.38%
	owner				(Note 2)
Lam Hau Yin, Lester	Beneficial	Nil	Nil	Nil	160,959,129	160,959,129	1.00%
	owner				(Note 2)

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 37

Corporate Governance and Other Information (Continued)

DIRECTORS’ INTERESTS (CONTINUED)

• (2) Associated Corporations (Continued)

• (iii) Lai Fung Holdings Limited (“Lai Fung”) — a subsidiary of eSun (Continued) 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 shareholding interests of approximately 42.25% in the issued share capital 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 in
Registered Name	Date ofgrant	the option	Optionperiod	Subscriptionprice
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

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

Long positions in the shares and underlying shares in MAGHL

				Total	Approximate
		Number of	Number of	number of issued	% of total
		ordinary	underlying	shares and	interests to
Name of Director	Capacity	shares held	shares held	underlying shares	total issued shares
Lam Kin Ngok, Peter	Owner of	842,675,225	79,596,050	922,271,275	68.83%
	controlled	(Note 1)	(Note 2)
	corporations

Notes:

• (1) As at 31 January 2015, these interests in MAGHL represented the shares beneficially owned by Perfect Sky Holdings Limited (“ Perfect Sky ”), a wholly-owned subsidiary of eSun, representing approximately 62.89% 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 12.72% owned by Dr. Lam Kin Ngok, Peter and approximately 29.91% owned by Wisdoman Limited which is turn 100% beneficially owned by Dr. Lam Kin Ngok, Peter, he was deemed to be interested in the said 842,675,225 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 79,596,050 underlying shares of MAGHL comprised in the convertible notes issued to Perfect Sky by MAGHL on 9 June 2012.

Save as disclosed above, as at 31 January 2015, none of the Directors and the chief executive of the Company and their respective close associates was interested or was deemed to be interested in the long and short positions in the shares, underlying shares and/or debentures of the Company or any of its associated corporations, which were required to be notified to the Company and the Stock Exchange, or recorded in the Register of Directors and Chief Executive as aforesaid, notified under the Securities Code or otherwise known by the Directors.

38 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS

As at 31 January 2015, so far as was known by or otherwise notified by any Director or the chief executive of the Company, the particulars of the corporations or individuals (one being a Director), who had 5% or more interests in the following long positions in the Shares and underlying Shares 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, or which were recorded in the register required to be kept under section 336 of the SFO (“ Register of Shareholders ”) or were entitled to exercise, or control the exercise of, 10% or more of the voting power at any general meeting of the Company (“ Voting Entitlements ”) (i.e. within the meaning of Substantial Shareholders of the Listing Rules) were as follows:

Long positions in the Shares and the underlying Shares of the Company

			Approximate%	Approximate%
		Nature of	Number of	of Shares
Name	Capacity	interests	Shares	in issue
Substantial
Shareholders
Lai Sun Garment	Beneficial owner	Corporate	10,425,699,353	51.88%
(International) Limited
(Note)
Lam Kin Ngok, Peter	Beneficial owner/	Personal and	10,460,069,991	52.05%
	Owner of	corporate
	controlled
	corporation

Note:

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 42.63% in the issued share capital of LSG. Dr. Lam Kin Ngok, Peter is an ED of LSG.

Save as disclosed above, the Directors are not aware of any other corporation or individual (other than a Director or the chief executive of the Company) who, as at 31 January 2015, had the Voting Entitlements or 5% or more interests or short positions in the Shares or underlying Shares of the Company recorded in the Register of Shareholders.

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 39

Corporate Governance and Other Information (Continued)

SHARE OPTION SCHEME

The Company adopted a share option scheme (“ Scheme ”) on 22 December 2006 and the Scheme became effective on 29 December 2006 (“ Commencement Date ”). The purpose of the Scheme is to provide incentives or rewards to any eligible employee and director of the Company or any of its subsidiaries, any agent or consultant of any member of the Group or any employee of the shareholder of any member of the Group or any holder of any securities issued by any member of the Group for their contribution or would be contribution to the Group and/or to enable the Group to recruit and retain high-calibre employees and attract human resources that are valuable to the Group. Unless otherwise altered or terminated, the Scheme will be valid and effective for a period of 10 years commencing on the Commencement Date.

During the six-month period ended 31 January 2015, there were 11,000,000 options granted to eligible employees. Apart from that, no options were granted, exercised, cancelled or lapsed in accordance with the terms of the Scheme. Particulars of the outstanding options at the beginning and at the end of the financial period are as follows:

Name and category of participant	Number of share options Exercisable Exercise price Outstanding at Outstanding at Date of grant Period of of share 01/08/2014 31/01/2015 of options the Options options HK$ per share
Directors Lam Kin Ngok, Peter Chew Fook Aun Lau Shu Yan, Julius Lam Hau Yin, Lester Other employees, in aggregate Other employees, in aggregate Other employees, in aggregate	20,062,893 20,062,893 18/01/2013 18/01/2013- 0.335 17/01/2023 200,628,932 200,628,932 05/06/2012 05/06/2012- 0.112 04/06/2022 100,314,466 100,314,466 18/01/2013 18/01/2013- 0.335 17/01/2023 200,628,932 200,628,932 18/01/2013 18/01/2013- 0.335 17/01/2023 177,188,680 177,188,680 18/01/2013 18/01/2013- 0.335 17/01/2023 4,000,000 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
Total:	702,823,903 713,823,903

40 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

Purchase, Sale or Redemption of Listed Securities

During the six months ended 31 January 2015, the Company did not redeem any of its Shares listed and traded on the Stock Exchange nor did the Company or any of its subsidiaries purchase or sell any of such Shares.

UPDATE OF DIRECTORS’ INFORMATION

Pursuant to Rule 13.51B(1) of the Listing Rules, changes in Directors’ and Chief Executive Officer’s information since the disclosure made in the Company’s annual report 2013-2014 are set out as follows:

• (1) The Group usually makes annual adjustment to basic salaries and pays discretionary bonuses in January. The basic salaries of Dr. Lam Kin Ngok, Peter, Mr. Chew Fook Aun and Mr. Lam Hau Yin, Lester were adjusted upward by 4.5% with effect from 1 January 2015.

		Salaries,
		allowances,	Pension
		and benefits	scheme	Total
	Fees	in kind	contributions	remuneration
	HK$’000	HK$’000	HK$’000	HK$’000
For the six months ended 31 January 2015
EDs:
Lam Kin Ngok, Peter_(Chairman)_	—	8,176	9	8,185
Chew Fook Aun_(Deputy Chairman)_	—	4,666	9	4,675
Lau Shu Yan, Julius_(Chief Executive Officer)_	—	2,577	103	2,680
Lam Hau Yin, Lester	—	925	9	934
	—	16,344	130	16,474
NEDs:
Lam Kin Ming	125	—	—	125
U Po Chu	125	—	—	125
	250	—	—	250
INEDs:
Ip Shu Kwan, Stephen	125	—	—	125
Lam Bing Kwan	125	—	—	125
Leung Shu Yin, William	125	—	—	125
	375	—	—	375
	625	16,344	130	17,099

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 41

Corporate Governance and Other Information (Continued)

UPDATE OF DIRECTORS’ INFORMATION (CONTINUED)

(1) (Continued)

		Salaries,
		allowances,	Pension
		and benefits	scheme	Total
	Fees	in kind	contributions	remuneration
	HK$’000	HK$’000	HK$’000	HK$’000
For the six months ended 31 January 2014
EDs:
Lam Kin Ngok, Peter_(Chairman)_	—	6,908	8	6,916
Chew Fook Aun_(Deputy Chairman)_	—	4,464	8	4,472
Lau Shu Yan, Julius_(Chief Executive Officer)_	—	2,481	99	2,580
Lam Hau Yin, Lester	—	1,237	8	1,245
	—	15,090	123	15,213
NEDs:
Lam Kin Ming	125	—	—	125
U Po Chu	125	—	—	125
	250	—	—	250
INEDs:
Ip Shu Kwan, Stephen	125	—	—	125
Lam Bing Kwan	125	—	—	125
Leung Shu Yin, William	125	—	—	125
	375	—	—	375
	625	15,090	123	15,838

• (2) Mr. Chew Fook Aun

• (a) ceased to be a member of the Corruption Prevention Advisory Committee of the Independent Commission Against Corruption (“ ICAC ”) on 1 January 2015;

• (b) ceased to be a member of the Standing Committee on Company Law Reform of the Companies Registry on 1 February 2015; and

• (c) was appointed a member of the Operations Review Committee of the ICAC with effect from 1 January 2015.

• (3) Mr. Lau Shu Yan, Julius

• (a) resigned as an ED of Lai Fung with effect from 17 January 2015; and

• (b) was appointed a consultant of Lai Fung with effect from 17 January 2015.

Lai Fung is listed on the Main Board of the Stock Exchange.

42 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015

Corporate Governance and Other Information (Continued)

EMPLOYEES AND REMUNERATION POLICIES

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

INVESTOR RELATIONS

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

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

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

Interim Report 2014-2015 • LAI SUN DEVELOPMENT COMPANY LIMITED 43

Corporate Governance and Other Information (Continued)

INVESTOR RELATIONS (CONTINUED)

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

Firm	Analyst	Publication Date
BNP	Patrick C WONG, Wee Liat LEE	3 October 2014
BNP	Patrick C WONG, Wee Liat LEE	16 October 2014
DBS	Allen CHAN, Jeff YAU	19 December 2014

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

REVIEW OF INTERIM REPORT

The audit committee of the Company (“ Audit Committee ”) currently comprises two INEDs, Mr. Leung Shu Yin, William and Mr. Lam Bing Kwan and a NED, Dr. Lam Kin Ming. The Audit Committee has reviewed the interim report (including the unaudited condensed consolidated financial statements) of the Company for the six months ended 31 January 2015.

By Order of the Board Lam Kin Ngok, Peter Chairman

Hong Kong, 25 March 2015

44 LAI SUN DEVELOPMENT COMPANY LIMITED • Interim Report 2014-2015