IRC Limited — Proxy Solicitation & Information Statement 2014

May 23, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Lai Sun Development Company Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s), or to the licensed securities dealer, registered institution in securities, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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

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PROPOSED CAPITAL REDUCTION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice (“ Notice ”) of the extraordinary general meeting (“ EGM ”) of Lai Sun Development Company Limited to be held at Harbour View Room I, 3rd Floor, The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Wednesday, 18 June 2014 at 10:00 a.m. is set out on pages 8 to 10 of this circular.

Shareholders of the Company (“ Shareholders ”) are advised to read the Notice of the EGM and if you are not able to attend the EGM or its adjournment (as the case may be) in person but wish to exercise your right as a Shareholder, please complete, sign and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same with the Company’s share registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof (as the case may be) should you so wish.

26 May 2014

CONTENTS

		Page
Definitions.................................................................................................................................		1
Letter from the Board.............................................................................................................		3
1.	Introduction ...........................................................................................................	3
2.	Proposed Capital Reduction .................................................................................	3
3.	Effects of the Capital Reduction ..........................................................................	4
4.	Conditions of the Capital Reduction....................................................................	5
5.	Reasons for the Capital Reduction.......................................................................	6
6.	Extraordinary General Meeting............................................................................	6
7.	Closure of Register of Members ..........................................................................	7
8.	Recommendation...................................................................................................	7
9.	Responsibility Statement ......................................................................................	7
Notice of EGM..........................................................................................................................		8

This circular in both English and Chinese is available in printed form and published on the respective websites of the Company at “http://www.laisun.com” and Hong Kong Exchanges and Clearing Limited at “http://www.hkexnews.hk”. The English version will prevail in case of any inconsistency between the English and the Chinese versions of this circular.

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DEFINITIONS

In this circular, unless the context otherwise requires, the following words and expressions shall have the respective meanings set out opposite them:

• “Accumulated Losses”

• accumulated realised losses of the Company standing in the accounts of the Company;

• “Board” the board of Directors;

• “Capital Reduction”

• the proposed reduction of the credit standing to the share capital account of the Company by an amount of HK$5,700,000,000 as described in this circular;

• “Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) currently in force;

• “Company” Lai Sun Development Company Limited 麗新發展有限公司, a company incorporated in Hong Kong with limited liability, the Shares of which are listed and traded on the Main Board of the Stock Exchange (Stock Code: 488);

• “Court” the Court of First Instance of the High Court of Hong Kong;

• “Director(s)” the director(s) of the Company;

• “Effective Date” the date upon which the Capital Reduction becomes unconditional and effective;

• “EGM” the extraordinary general meeting of the Company to be convened and held at Harbour View Room I, 3rd Floor, The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Wednesday, 18 June 2014 at 10:00 a.m. or at any adjournment thereof, notice of which is set out on pages 8 to 10 of this circular, for the purpose of considering and, if thought fit, approving the Capital Reduction;

• “Group”

the Company and its subsidiaries;

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange (as amended, supplemented or otherwise modified from time to time);

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DEFINITIONS

“Share(s)” the share(s) in the issued share capital of the Company; “Share Option Scheme” the share option scheme adopted by the Company in the annual general meeting held on 22 December 2006 and becoming effective on 29 December 2006; “Shareholder(s)” holder(s) of the Share(s); and “Stock Exchange” The Stock Exchange of Hong Kong Limited.

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LETTER FROM THE BOARD

26 May 2014

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

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

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

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

To the Shareholders,

Dear Sir or Madam,

PROPOSED CAPITAL REDUCTION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

1. INTRODUCTION

On 20 May 2014, the Board announced that it intends to put forward a proposal for the Capital Reduction for approval by the Shareholders by way of a special resolution at the EGM. The purpose of this circular is to provide you with information relating to, among other things, details of the Capital Reduction and a notice of the EGM.

2. PROPOSED CAPITAL REDUCTION

The proposed Capital Reduction involves the reduction of the credit standing to the share capital account of the Company by an amount of HK$5,700,000,000. The credit arising from the Capital Reduction will be applied to a capital reduction reserve account of the Company and the Company will use such reserve to set off against the Company’s Accumulated Losses.

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LETTER FROM THE BOARD

3. EFFECTS OF THE CAPITAL REDUCTION

Based on the audited financial statements of the Company for the year ended 31 July 2013, as adjusted for unrealised gain on revaluation of investment properties, the Company had total Accumulated Losses of HK$5,580,200,000 as at 31 July 2013. According to the unaudited management accounts of the Company for the six months ended 31 January 2014, the Company had total Accumulated Losses of HK$5,695,308,000 as at 31 January 2014.

As at 31 January 2014, the share capital, the amount standing to the credit of the share premium account and the capital redemption reserve of the Company were HK$200,629,000, HK$7,429,332,000 and HK$1,200,000,000, respectively. With effect from 3 March 2014, any amount standing to the credit of the share premium account and the capital redemption reserve of the Company is deemed to be part of the share capital of the Company pursuant to Section 37(1) of Schedule 11 to the Companies Ordinance.

Save for the expenses incurred by the Company in relation to the Capital Reduction, the implementation of the Capital Reduction will not, in itself, alter the underlying assets, business operations, management of the Company or the proportionate interests or voting rights of the Shareholders of the Shares held by the Shareholders immediately prior to the Capital Reduction becoming effective. The Board considers that the Capital Reduction will not have any material adverse effect on the financial position of the Group.

Set out below, for illustrative purpose only, is a simplified statement showing the proposed movement of the equity of the Company before and after the Capital Reduction taking effect, based on the Company’s position as at 31 January 2014.

Share capital_(Note 2) Investment revaluation reserve (Note 3)_ Share option reserve General reserve Capital reduction reserve Accumulated Losses Unrealised gain on revaluation of investment properties Retained profits Total equity of the Company	Immediately before the Capital Reduction as at 31 January 2014 HK$’000 8,829,961 7,645 58,826 646,700 –	Immediately before the Capital Reduction as at 31 January 2014 HK$’000 8,829,961 7,645 58,826 646,700 –	Immediately after the Capital Reduction taking effect and the application of credit arising from the Capital Reduction to a capital reduction reserve account HK$’000 3,129,961 7,645 58,826 646,700 5,700,000	Immediately after the Capital Reduction taking effect and the application of credit arising from the Capital Reduction to a capital reduction reserve account HK$’000 3,129,961 7,645 58,826 646,700 5,700,000	Immediately after setting off against Accumulated Losses as at 31 January 2014 HK$’000 3,129,961 7,645 58,826 646,700 4,692
	(5,695,308) 6,359,734		(5,695,308) 6,359,734		– 6,359,734
	664,426 10,207,558		664,426 10,207,558		6,359,734 10,207,558

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LETTER FROM THE BOARD

Notes:

1. This table does not take into account expenses that will be incurred by the Company in relation to the Capital Reduction.

2. As at 31 January 2014, the share capital, the amount standing to the credit of the share premium account and the capital redemption reserve of the Company were HK$200,629,000, HK$7,429,332,000 and HK$1,200,000,000, respectively. With effect from 3 March 2014, any amount standing to the credit of the share premium account and the capital redemption reserve of the Company is deemed to be part of the share capital of the Company pursuant to Section 37(1) of Schedule 11 to the Companies Ordinance.

3. The investment revaluation reserve represents the unrealised gain on the revaluation of the Company’s investment.

Further, the Capital Reduction does not involve the diminution of any liability in respect of any unpaid capital of the Company nor does it involve the repayment to the Shareholders of any paid-up capital of the Company. Accordingly, Shares held by the Shareholders will not be affected.

Pursuant to the terms of the Share Option Scheme, the implementation of the Capital Reduction will not result in any adjustment to the (i) number of the Shares subject to an option under the Share Option Scheme; (ii) subscription price; or (iii) maximum number of Shares available for subscription in relation to the outstanding options granted under the Share Option Scheme.

4. CONDITIONS OF THE CAPITAL REDUCTION

The Capital Reduction is subject to the satisfaction of, among other things, the following conditions:

• (i) the passing by the Shareholders of a special resolution to approve the Capital Reduction and related matters at the EGM; and

• (ii) either (a) there being no application to the Court for cancellation of the special resolution by creditors or members of the Company within 5 weeks of the date of the special resolution to approve the Capital Reduction; or (b) if there is any such application, the Court making an order to confirm the special resolution.

Assuming that the above conditions are fulfilled, it is expected that the Capital Reduction will become effective immediately following the registration of the Return of Reduction of Share Capital required under the Companies Ordinance. A further announcement will be made informing the Shareholders of the Effective Date.

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LETTER FROM THE BOARD

5. REASONS FOR THE CAPITAL REDUCTION

The Company carried out a capital reduction exercise in 2006 and the credit which arose out of such capital reduction was applied to reduce some of the Company’s Accumulated Losses at that time and prepare for issuance of new shares. The Company had total Accumulated Losses of HK$5,695,308,000 as at 31 January 2014, and such Accumulated Losses were mainly attributable to its loss on the investment in Furama Hotel Enterprises Limited, the company that formerly owned the Furama Hotel, the Majestic Hotel and the Majestic Centre, each in Hong Kong and the Furama Resort Danang in Vietnam among other assets. The investment was made shortly before the Asian financial crisis in 1997 and the loss relating to it is essentially explainable by reference to the collapse in property values brought about by that crisis.

The Group is now profitable but the Company will remain unable to pay dividends or undertake any corporate exercise which requires the use of distributable reserves while such Accumulated Losses exist. Accordingly, the Board proposed the Capital Reduction with the resulting credit arising from such reduction to be applied to a capital reduction reserve account of the Company and such reserve to be used to set off against Accumulated Losses.

The proposal to set off Accumulated Losses with the reserve arising out of the Capital Reduction would put the Company in a position to legally pay dividends and/or undertake any corporate exercise which requires the use of distributable reserves. When the Capital Reduction becomes effective, the Company will have greater flexibility in undertaking corporate exercises and/or making decisions on its dividend policy, subject to the Company’s performance and when the Board considers that it is appropriate to do so in the future.

Based on the reasons and the effects of the Capital Reduction as set out above, the Board considers that the Capital Reduction is in the best interests of the Company and the Shareholders as a whole.

6. EXTRAORDINARY GENERAL MEETING

Pages 8 to 10 of this circular contain a notice convening the EGM which will be held at Harbour View Room I, 3rd Floor, The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Wednesday, 18 June 2014 at 10:00 a.m. at which a special resolution will be proposed to approve the Capital Reduction.

A form of proxy for use at the EGM is enclosed with this circular. If you are not able to attend the EGM or its adjournment (as the case may be) in person but wish to exercise your right as a Shareholder, please complete, sign and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same with the Company’s share registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible, but in any event not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish.

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LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Listing Rules, save for resolutions which relate purely to procedure or administrative matter to be voted by a show of hands, any vote of the Shareholders at a general meeting must be taken by poll. Accordingly, the resolution to be considered and, if thought fit, passed at the EGM will be voted by way of poll by Shareholders. Article 79 of the Articles of Association of the Company provides that on a poll, every Shareholder present in person or by proxy shall have one vote for every Share held by that Shareholder. An explanation of the procedures of conducting a poll is provided in the notes to the Notice of the EGM and details will be conveyed to the Shareholders at the EGM. As none of the Shareholders has any material interest in the Capital Reduction, none of the Shareholders is required to abstain from voting on the special resolution at the EGM.

The Company will publish an announcement on the poll results of the resolution on the respective websites of the Company at “http://www.laisun.com” and the Stock Exchange at “http://www.hkexnews.hk” promptly after the conclusion of the EGM.

7. CLOSURE OF REGISTER OF MEMBERS

In order to determine the identity of the members of the Company who are entitled to attend and vote at the EGM, the register of members of the Company will be closed from Monday, 16 June 2014 to Wednesday, 18 June 2014, both dates inclusive, during which period no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM, all relevant transfer documents accompanied by the relevant share certificates must be lodged at the office of the Company’s share registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong no later than 4:30 p.m. on Friday, 13 June 2014 for registration.

8. RECOMMENDATION

The Directors (including the independent non-executive Directors) believe that the Capital Reduction is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of the special resolution to be proposed at the EGM.

9. RESPONSIBILITY STATEMENT

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

Yours faithfully,

For and on behalf of the Board of

Lai Sun Development Company Limited Lam Kin Ngok, Peter Chairman

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NOTICE OF EGM

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NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (“ EGM ”) of the members (“ Members ”) of Lai Sun Development Company Limited (“ Company ”) will be held at Harbour View Room I, 3rd Floor, The Excelsior, Hong Kong, 281 Gloucester Road, Causeway Bay, Hong Kong on Wednesday, 18 June 2014 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as a special resolution of the Company:

SPECIAL RESOLUTION

“ THAT :

• (a) conditional only upon the satisfaction of either one of the conditions set out in paragraph (b) of this special resolution and subject to any conditions imposed in accordance with paragraph (c) of this special resolution, the reduction of the amount standing to the credit of the share capital account of the Company by a sum equal to HK$5,700,000,000 (“ Capital Reduction ”) be and is hereby approved and the directors of the Company (“ Directors ”) be and are hereby authorised to apply the credit arising from the Capital Reduction to a capital reduction reserve account of the Company and as the Directors think fit to use such reserve to set off against accumulated realised losses standing in the accounts of the Company;

• (b) the approval and authorisation set out in paragraph (a) of this special resolution shall be conditional upon either (i) there being no application (“ Application ”) to the Court of First Instance of the High Court of Hong Kong (“ Court ”) for cancellation of the approval of the Capital Reduction, set out in this special resolution, by creditors of the Company or Members within 5 weeks of the date of this special resolution; or (ii) if any such Application is made, the Court making an order to confirm this special resolution;

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NOTICE OF EGM

• (c) if such an Application is made and the Court makes an order to confirm this special resolution upon the Application, the approval and authorisation in paragraph (a) of this special resolution shall be subject to any conditions that may be imposed by the Court; and

• (d) the Company be and is hereby authorised generally to do all acts and things as may be necessary, desirable or expedient to implement or to give effect to the foregoing.”

By Order of the Board Lai Sun Development Company Limited Chow Kwok Wor Company Secretary

Hong Kong, 26 May 2014

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

Notes:

1. A Member entitled to attend and vote at the EGM convened by the above notice (“ Notice ”) (or its adjourned meeting) is entitled to appoint one (or if he/she/it holds two or more shares, more than one) proxy to attend and, on a poll, vote on his/her/its behalf in accordance with the Articles of Association of the Company. A proxy need not be a Member.

2. A form of proxy for use at the EGM is enclosed with this Notice and is also available at the respective websites of The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) and the Company.

3. To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be lodged with the Company’s share registrar, Tricor Tengis Limited (“ Registrar ”), at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or its adjourned meeting (as the case may be) and in default, the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude Members from attending in person and voting at the EGM or at its adjourned meeting should they so wish. In such case, the said form(s) of proxy shall be deemed to be revoked.

The contact phone number of the Registrar is (852) 2980 1333.

1. The register of members of the Company will be closed from Monday, 16 June 2014 to Wednesday, 18 June 2014, both dates inclusive, during which period no transfer of Shares will be effected. To ascertain the entitlements to attend and vote at the EGM, Members must lodge the relevant transfer document(s) and the relevant share certificate(s) at the office of the Registrar not later than 4:30 p.m. on Friday, 13 June 2014 for registration.

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NOTICE OF EGM

1. Where there are joint registered holders of any ordinary share (“ Share ”) of the Company, any one of such joint holders may attend and vote at the EGM or its adjourned meeting (as the case may be), either personally or by proxy, in respect of such Shares as if he/she/it were solely entitled thereto; but if more than one of such joint holders are present at the EGM or its adjourned meeting (as the case may be) personally or by proxy, that one of such holders so present whose name stands first in the Register of Members of the Company in respect of such Share shall alone be entitled to vote in respect thereof.

2. In compliance with Rule 13.39(4) of the Rules Governing the Listing of Securities on the Stock Exchange, voting on the resolution proposed in this Notice shall be decided by way of poll at the EGM.

3. If a tropical cyclone warning signal No. 8 or above is expected to be hoisted or a black rainstorm warning signal is expected to be in force at any time between 9:00 a.m. and 5:00 p.m. on the date of the EGM, the EGM will be postponed and the Members will be informed of the date, time and venue of the postponed EGM by a supplementary notice, posted on the respective websites of the Company and the Stock Exchange.

If a tropical cyclone warning signal No. 8 or above or a black rainstorm warning signal is lowered or cancelled at or before 9:00 a.m. on the date of the EGM and where conditions permit, the EGM will be held as scheduled.

The EGM will be held as scheduled when an amber or red rainstorm warning signal is in force.

Having considered their own situations, Members should decide on their own whether they would attend the EGM under any bad weather condition and if they do so, they are advised to exercise care and caution.

1. Members are advised to read the circular of the Company dated 26 May 2014 which contains information concerning the resolution to be proposed in the EGM.

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