Macau Legend Development Limited - Annual Report 2015

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Macau Legend Development Limited 澳門勵駿創建有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1680)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2014

RESULTS

The Board announces the audited consolidated annual results of the Group for the year ended 31 December 2014 as follows:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2014

Notes REVENUE 4 Cost of sales and services Other income, gains and losses 6 Marketing and promotional expenses Operating, administrative and other expenses Finance costs 7 PROFIT BEFORE TAXATION 8 Taxation credit 9 PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR, ATTRIBUTABLE TO OWNERS OF THE COMPANY Earnings per Share — Basic (HK cents) 11 — Diluted (HK cents) 11	2014 HK$’000 1,811,112 (881,828) 929,284 138,715 (89,511) (415,649) (88,877) 473,962 4,979 478,941 7.5 7.4	2013 HK$’000 1,763,754 (777,179) 986,575 62,695 (44,156) (439,593) (58,971) 506,550 3,329 509,879 8.9 8.8

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2014

Notes NON-CURRENT ASSETS Investment properties Property and equipment Prepaid lease payments Goodwill Other intangible assets Deposits paid 12 CURRENT ASSETS Inventories Prepaid lease payments Trade and other receivables 13 Amounts due from related companies Pledged bank deposits Bank balances and cash — Cash at banks and on hand 14 — Short-term bank deposits with original maturity over three months 14 CURRENT LIABILITIES Trade and other payables 15 Taxation Amounts due to a related company Bank and other borrowings — due within one year 16 NET CURRENT ASSETS	At 31 December 2014 HK$’000 248,906 3,653,802 1,770,626 681,986 302,211 705,317 7,362,848 54,423 52,648 497,483 2,339 20,581 4,047,398 500,200 5,175,072 665,326 1,650 — 448,601 1,115,577 4,059,495	At 31 December 2013 HK$’000 256,984 2,541,763 1,775,186 681,986 — —
		5,255,919
		40,994 51,290 605,057 518 20,581 1,006,527 832,520
		2,557,487
		619,264 1,650 25 355,802
		976,741
		1,580,746

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)

At 31 December 2014

Notes TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Bank borrowings — due after one year 16 Deferred tax liabilities NET ASSETS CAPITAL AND RESERVES Share capital 17 Reserves Equity attributable to owners of the Company	At 31 December 2014 HK$’000 11,422,343 3,777,815 184,836 3,962,651 7,459,692 644,926 6,814,766 7,459,692	At 31 December 2013 HK$’000 6,836,665
		1,048,723 191,465
		1,240,188
		5,596,477
		624,672 4,971,805
		5,596,477

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands on 5 October 2006 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands and its Shares are listed on the Main Board of the Stock Exchange. The address of the registered office of the Company is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and the principal place of business of the Company in Macau is 21/F, Macau Landmark Building, 555 Avenida da Amizade, Macau.

The Company is an investment holding company. The Group is one of the leading owners of entertainment and casino gaming facilities in Macau. The Group has two major properties, The Landmark Macau and MFW. The Landmark Macau is an award-winning integrated hotel, casino and luxury shopping complex, featuring a five-star hotel and Macau’s first themed casino. MFW is a waterfront integrated gaming, hotel, convention and entertainment complex located on the outer harbour of the Macau Peninsula.

2. BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with the HKFRSs issued by the HKICPA. In addition, the consolidated financial statements include applicable disclosures required by the Listing Rules and by the Hong Kong Companies Ordinance.

The consolidated financial statements have been prepared on the historical cost basis at the end of each reporting period.

The consolidated financial statements are presented in HK$, which is also the functional currency of the Company.

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied, for the first time, the following amendments to the HKFRSs and the Hong Kong Accounting Standards (‘‘HKASs’’) issued by the HKICPA that are mandatorily effective for the current year.

Amendments to HKFRS 10, HKFRS 12, Investments entities HKAS 27 Amendments to HKAS 32 Offsetting financial assets and financial liabilities Amendments to HKAS 36 Recoverable amount disclosures for non-financial assets Amendments to HKAS 39 Novation of derivatives and continuation of hedge accounting HK(IFRIC)-INT21 Levies

The application of the above amendments in the current year has had no material effect on the amounts reported in these consolidated financial statements and/or on the disclosures set out in these consolidated financial statements.

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The Group has not early applied the following new and revised HKFRSs that have been issued but are not yet effective:

HKFRS 9 Financial instruments[1] HKFRS 14 Regulatory deferral accounts[2] HKFRS 15 Revenue from contracts with customers[3] Amendments to HKFRS 11 Accounting for acquisitions of interests in joint operations[5] Amendments to HKAS 1 Disclosure initiative[5] Amendments to HKAS 16 and HKAS 38 Clarification of acceptable methods of depreciation and amortisation[5] Amendments to HKAS 16 and HKAS 41 Agriculture: Bearer plants[5] Amendments to HKAS 19 Defined benefit plans: Employee contributions[4] Amendments to HKAS 27 Equity method in separate financial statements[5] Amendments to HKFRS 10 and HKAS 28 Sale or contribution of assets between an investor and its associate or joint venture[5] Amendments to HKFRS 10, HKFRS 12 and Investment entities: Applying the consolidation exception[5] HKAS 28 Amendments to HKFRSs Annual improvements to HKFRSs 2010 – 2012 cycle[6] Amendments to HKFRSs Annual improvements to HKFRSs 2011 – 2013 cycle[4] Amendments to HKFRSs Annual improvements to HKFRSs 2012 – 2014 cycle[5]

1 Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.
2 Effective for first annual HKFRS financial statements beginning on or after 1 January 2016, with earlier application permitted.
3 Effective for annual periods beginning on or after 1 January 2017, with earlier application permitted.
4 Effective for annual periods beginning on or after 1 July 2014, with earlier application permitted.
5 Effective for annual periods beginning on or after 1 January 2016, with earlier application permitted.
6 Effective for annual periods beginning on or after 1 July 2014, with limited exceptions. Earlier application is permitted.

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4. REVENUE

Revenue mainly represents the amount received and receivable for goods sold and services rendered by the Group to outside customers, less discounts. An analysis of the Group’s revenue is as follows:

Revenue from provision of gaming related facilities and gaming related general management services under the Service Agreement in respect of: — Mass market tables — Outsourced VIP rooms — Indirect participation in the gaming promotion business through New Legend under the VIE Structure — Slot machines Revenue from non-gaming operations: Rental income from hotel rooms Licensing income from investment properties Income from building management services Food and beverage Sales of merchandise Others	2014 HK$’000 1,094,778 117,783 58,191 9,233 1,279,985 183,266 99,975 75,310 132,116 32,890 7,570 531,127 1,811,112	2013 HK$’000 1,140,459 127,386 — 10,815
		1,278,660
		143,588 72,299 62,963 158,870 40,150 7,224
		485,094
		1,763,754

5. SEGMENT INFORMATION

The executive Directors have been identified as the chief operating decision maker. The executive Directors review the Group’s internal reports in order to assess performance and allocate resources.

For provision of gaming related facilities and gaming related general management services and the indirect participation in the gaming promotion business, the executive Directors regularly analyse gaming related revenue in terms of service income from mass market tables, VIP rooms and slot machines. No operating result or discrete financial information is presented to the executive Directors in relation to the above analysis. The executive Directors review separately the entire revenues and operating results attributable to gaming related services and non-gaming operations. As such, the executive Directors have identified the operating and reportable segments under HKFRS 8 ‘‘Operating segments’’ as gaming and non-gaming operations.

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The segment information is consistent with the internal information that is regularly reviewed by the executive Directors for the purposes of resource allocation and assessment of performance. This is also the basis of organisation in the Group, whereby the management has chosen to organise the Group around differences in products and services. The principal activities of the operating and reportable segments are as follows:

Gaming — gaming related services for mass market tables, VIP rooms and slot machines under the Service Agreement, whereby the revenue is derived based on net gaming wins. Revenue from the indirect participation in the gaming promotion business represents the sharing of gross gaming revenue generated by gaming tables in VIP rooms operated by New Legend, whose financial results are consolidated into the Group upon implementation of the VIE Structure during the year ended 31 December 2014.

Non-gaming — operations at The Landmark Macau and MFW including hotel and other operations such as licensing income from the shops, provision of building management service, food and beverage and others.

Segment revenue and results:

The following is an analysis of the Group’s revenue and results by operating and reportable segments:

For the year ended 31 December 2014

External revenue Inter-segment revenue Segment revenue Segment profit Unallocated depreciation, release of prepaid lease payments and amortisation Unallocated corporate expenses Unallocated exchange loss, net Finance costs Profit before taxation	Gaming HK$’000 1,279,985 — 1,279,985 805,675	Non-gaming HK$’000 531,127 58,229 589,356 46,160	Segment total HK$’000 1,811,112 58,229 1,869,341 851,835	Elimination HK$’000 — (58,229) (58,229) —	Consolidated HK$’000 1,811,112 — 1,811,112 851,835 (82,789) (137,694) (68,513) (88,877) 473,962

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For the year ended 31 December 2013

External revenue Inter-segment revenue Segment revenue Segment profit Unallocated depreciation and release of prepaid lease payments Unallocated corporate expenses Listing expenses Finance costs Profit before taxation	Gaming HK$’000 1,278,660 — 1,278,660 865,865	Non-gaming HK$’000 485,094 52,540 537,634 20,792	Segment total HK$’000 1,763,754 52,540 1,816,294 886,657	Elimination HK$’000 — (52,540) (52,540) —	Consolidated HK$’000 1,763,754 — 1,763,754 886,657 (67,434) (148,989) (104,713) (58,971) 506,550

Inter-segment revenue is charged at amounts agreed by both parties.

The accounting policies of the operating segments are the same as the Group’s accounting policies. Segment profit represents the results of each segment without allocation of depreciation of investment properties and property and equipment, release of prepaid lease payments arising from the fair value adjustments on acquisition of MFW Group, and amortisation of other intangible assets, unallocated common area in MFW, corporate expenses, net exchange difference, finance costs and listing expenses. Corporate expenses include Directors’ remuneration paid or payable by the Company and certain administrative expenses for corporate use. This is the measure reported to the executive Directors for the purposes of resource allocation and performance assessment.

No analysis of the Group’s assets and liabilities by operating and reportable segments is disclosed as it is not regularly provided to the executive Directors for review.

Other segment information:

For the year ended 31 December 2014

Amounts included in the measure of segment profit: Depreciation of property and equipment Depreciation of investment properties Amortisation of other intangible assets Release of prepaid lease payments Allowance for inventories Allowance for bad and doubtful debts Pre-opening expenses Loss on disposal of property and equipment	Gaming HK$’000 35,087 — — — — — — 20,450	Non-gaming HK$’000 99,899 6,485 — 16,886 311 327 24,084 668	Unallocated HK$’000 30,644 1,593 15,356 35,196 — — — —	Consolidated HK$’000 165,630 8,078 15,356 52,082 311 327 24,084 21,118

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For the year ended 31 December 2013

Amounts included in the measure of segment profit: Depreciation of property and equipment Depreciation of investment properties Release of prepaid lease payments Reversal of allowance for inventories Reversal of allowance for bad and doubtful debts Loss on disposal of property and equipment	Gaming HK$’000 21,258 — — — — 4,718	Non-gaming HK$’000 66,546 6,485 15,543 (11,680) (1,844) 1,854	Unallocated HK$’000 30,645 1,593 35,196 — — —	Consolidated HK$’000 118,449 8,078 50,739 (11,680) (1,844) 6,572

6. OTHER INCOME, GAINS AND LOSSES

Bank interest income Income from New Legend (remark) Management fee income from directors Realised exchange gain, net Unrealised exchange (loss) gain, net Loss on disposal of property and equipment (Allowance) reversal of allowance for bad and doubtful debts Others	2014 HK$’000 109,272 81,699 — 5,818 (68,513) (21,118) (327) 31,884 138,715	2013 HK$’000 25,367 — 5,078 1,278 14,596 (6,572) 1,844 21,104 62,695

Remark: Pursuant to the transfer of profit and loan agreement, one of the VIE Agreements, New Legend agreed to, among others, transfer to Hong Hock, all profits accrued by New Legend from its commencement of business until the establishment of the VIE Structure for support of the day-to-day operation of New Legend. The VIE Structure was established on 3 July 2014. Accordingly, the amount of approximately HK$81,699,000 was recognised in profit or loss for the year ended 31 December 2014.

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7. FINANCE COSTS

Interest on bank borrowings which is wholly repayable within five years Amortisation of finance costs on bank borrowings Other finance costs Total borrowing costs Less: Capitalised borrowing costs in construction in progress (included in property and equipment)	2014 HK$’000 88,588 23,905 2,835 115,328 (26,451) 88,877	2013 HK$’000 54,773 4,198 —
		58,971 —
		58,971

Borrowing costs capitalised during the year arose from the general borrowing pool and are calculated by applying a capitalisation rate of approximately 3.7% (2013: nil) per annum to expenditure on qualifying assets.

8. PROFIT BEFORE TAXATION

Profit before taxation has been arrived at after charging (crediting): Auditor’s remuneration Listing expenses Staff costs Directors’ remuneration Other staff costs — salaries and other benefits — contributions to retirement benefits schemes Depreciation of investment properties Depreciation of property and equipment Amortisation of other intangible assets Release of prepaid lease payments Operating lease rentals in respect of leasehold land and buildings Allowance (reversal of allowance) for inventories Cost of inventories recognised as an expense (included in cost of sales and services) Pre-opening expenses Gross licensing income from investment properties Less: Direct operating expenses that generate licensing income Net licensing income	2014 HK$’000 2,480 — 72,969 341,590 485 415,044 8,078 165,630 15,356 52,082 9,517 311 63,878 24,084 (99,975) 8,078 (91,897)	2013 HK$’000 1,900 104,713
		94,125 278,620 588
		373,333 8,078 118,449 — 50,739 10,122 (11,680) 76,626 —
		(72,299) 8,078
		(64,221)

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9. TAXATION CREDIT

Current tax charge Deferred taxation credit Income tax credit	2014 HK$’000 (1,650) 6,629 4,979	2013 HK$’000 (3,300) 6,629 3,329

Macau Complementary Tax is calculated at the maximum progressive rate of 12% on the estimated assessable profit for the year. No provision for Macau Complementary Tax and Hong Kong Profits Tax has been made in the consolidated financial statements as either the relevant group entities incurred tax losses or the estimated assessable profits were fully absorbed by tax losses brought forward from prior years.

Pursuant to the Dispatch of the Macau Financial Services Bureau dated 17 November 2006 and a confirmation letter issued by the Macau Financial Services Bureau dated 14 January 2013, gaming related revenue generated from the Service Agreement is not subject to Macau Complementary Tax since it is derived from SJM gaming revenue, which gaming revenue is exempted pursuant to the terms of no. 2 of article 28 of the Law 16/2001 and the exemption granted by Dispatch no. 30/2004 of 23 February 2004 and further by Dispatch no. 378/2011 of 23 November 2011.

Pursuant to the Dispatch of the Macau Financial Services Bureau dated 28 June 2013, Hong Hock is allowed to pay an annual lump sum dividend withholding tax of MOP1,700,000 (equivalent to approximately HK$1,650,000) for each of the years ended 31 December 2012 through to 2016 as payment in lieu of Macau Complementary Tax otherwise due by the shareholders of Hong Hock on dividend distributions from gaming profits generated in relation to the operation of the casinos at The Landmark Macau and MFW. Such annual lump sum tax payments are required regardless of whether dividends were actually distributed or whether Hong Hock has distributable profits in the relevant years. During the year ended 31 December 2014, provision for taxation of HK$1,650,000 (2013: HK$3,300,000) has been made.

10. DIVIDENDS

Interim dividend

No dividend was paid, declared or proposed as an interim dividend in respect of the year ended 31 December 2014.

On 5 June 2013, the Company declared a dividend of total amount of HK$2,446,583,000 to its then shareholders (excluding those who have waived their rights and entitlements to any dividend declared by the Company prior to the Listing including Mr David Chow, Madam Lam, Mr Li Chi Keung, All Landmark, Grand Bright, Elite Success and The Legend Club Limited.

Pursuant to a deed of assignment and set-off (the ‘‘Deed of Assignment and Set-off’’) entered into among the Company and the above-mentioned shareholders who are entitled to the dividend declared by the Company on 5 June 2013, All Landmark, Grand Bright, Elite Success and The Legend Club Limited assigned HK$354,105,000, HK$154,549,000, HK$77,672,000 and HK$40,890,000 of their respective entitlements to the aforesaid dividends to Mr David Chow for nil consideration and each of Grand Bright and Elite Success assigned HK$459,882,000 and HK$333,328,000 of their respective entitlements to the aforesaid dividends to Madam Lam and Mr Li Chi Keung for nil consideration, respectively.

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The relevant shareholders applied their entitlement to the dividends including the entitlement assigned to them pursuant to the Deed of Assignment and Set-off (the ‘‘Adjusted Entitlement’’) to set off the amounts due to the Company by them in their capacity as shareholders and/or Directors (as applicable). Pursuant to the Deed of Assignment and Set-off, a total Adjusted Entitlement of HK$2,396,583,000 was applied by the relevant shareholders in aggregate to set off all the amounts due to the Company by them (including amounts due from Directors of HK$2,220,741,000 and amounts due from shareholders of HK$175,842,000) on 5 June 2013. The balance of dividend of HK$50,000,000 was settled in cash in July 2013.

Final dividend

The Directors do not recommend the payment of a final dividend in respect of the year ended 31 December 2014 (2013: nil).

11. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per Share attributable to owners of the Company is based on the following data:

Earnings

Profit for the year for the purpose of basic and diluted earnings per Share Number of Shares Weighted average number of ordinary shares for the purpose of basic earnings per Share Effect of dilutive potential ordinary shares — Share options — Directors’ reward shares Weighted average number of ordinary shares for the purpose of diluted earnings per Share 12. DEPOSITS PAID Deposits paid for acquisition of property and equipment Other deposit (remark)	2014 HK$’000 478,941 2014 ’000 6,422,913 15,132 29,044 6,467,089 2014 HK$’000 7,493 697,824 705,317	2013 HK$’000 509,879
		2013 ’000 5,732,471 9,251 25,099
		5,766,821
		2013 HK$’000 — —
		—

Remark: The other deposit as at 31 December 2014 represents a refundable deposit paid in respect of a potential long-term investment project.

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13. TRADE AND OTHER RECEIVABLES

Trade receivables Less: Allowance for doubtful debts Other receivables and deposits Prepayments Receivables from gaming operator received on behalf of gaming promoters Amount due from a gaming promoter Total trade and other receivables	2014 HK$’000 307,499 (14) 307,485 35,913 19,855 134,230 — 497,483	2013 HK$’000 131,083 (14) 131,069 27,304 9,181 401,775 35,728 605,057

The receivables from gaming operator and amount due from a gaming promoter are non-trading in nature, unsecured, non-interest bearing and repayable on demand.

The Group allows a credit period with an average of 30 days to the gaming operator relating to provision of gaming related services, an average of 30 days to certain hotel guests and an average of 15 days to its tenants. The following is an aged analysis of trade receivables net of allowance for bad and doubtful debts presented based on the invoice date at the end of the reporting period.

Within 3 months Over 3 months but within 6 months Over 6 months but within 1 year Over 1 year	2014 HK$’000 192,309 6,496 49,429 59,251 307,485	2013 HK$’000 120,334 802 1,452 8,481
		131,069

14. BANK BALANCES AND CASH

Cash at banks and on hand comprise cash held by the Group and short-term bank deposits at variable interest rates with an original maturity of three months or less and carry interest at market rate of 2.9% (2013: 2.9%) per annum. As at 31 December 2014, short-term bank deposits with maturity over three months carry average fixed interest at 3.6% (2013: 3.6%) per annum.

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15. TRADE AND OTHER PAYABLES

Trade and other payables principally comprise amounts outstanding for ongoing costs and construction work. The average credit period granted by the Group’s creditors is one month to three months.

Trade payables Deposits received from tenants Accrued staff costs Other accruals Other payables Amounts due to gaming promoters Total trade and other payables	2014 HK$’000 59,554 56,641 117,568 39,184 280,818 111,561 665,326	2013 HK$’000 74,973 41,636 87,887 23,010 45,667 346,091
		619,264

The amounts due to gaming promoters are non-trading in nature, unsecured, non-interest bearing and repayable on demand.

The following is an aged analysis of trade payables presented based on the invoice date at the end of the reporting period:

Within 3 months Over 3 months but within 6 months Over 6 months but within 1 year Over 1 year BANK AND OTHER BORROWINGS Bank borrowings, secured (remark i) Other borrowings (remark ii) Analysed for reporting purposes as: Current liabilities Non-current liabilities	2014 HK$’000 57,686 1,570 264 34 59,554 2014 HK$’000 3,955,416 271,000 4,226,416 448,601 3,777,815 4,226,416	2013 HK$’000 38,620 49 138 36,166
		74,973
		2013 HK$’000 1,404,525 —
		1,404,525
		355,802 1,048,723
		1,404,525

16. BANK AND OTHER BORROWINGS

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Remarks:

(i) Bank borrowings, secured Secured bank borrowings due — within one year — more than one year, but not exceeding two years — more than two years, but not more than five years Less: Amount due within one year shown under current liabilities Amount due after one year The bank borrowings are denominated in HK$.	2014 HK$’000 177,601 579,846 3,197,969 3,955,416 (177,601) 3,777,815	2013 HK$’000 355,802 365,802 682,921 1,404,525 (355,802) 1,048,723

(ii) Other borrowings represent the amount due to a gaming operator which is denominated in HK$ and is noninterest bearing, unsecured and repayable within one year.

17. SHARE CAPITAL

Ordinary shares of HK$0.10 each Authorised: At 1 January 2013 Increase on 5 June 2013 (remark i) At 31 December 2013 and 31 December 2014 Issued and fully paid: At 1 January 2013 Issue of Shares (remark ii) Issue of Shares in connection with the Listing (remark iii) Issue of Shares as a part of Directors’ reward shares (remark v) At 31 December 2013 Placement of Shares (remark iv) Issue of Shares as a part of Directors’ reward shares (remark v) At 31 December 2014	Number of Shares 7,164,299,563 2,835,700,437 10,000,000,000 5,226,719,531 70,631,345 934,827,000 14,541,747 6,246,719,623 188,000,000 14,541,747 6,449,261,370	Share capital HK$’000 716,430 283,570
		1,000,000
		522,672 7,063 93,483 1,454
		624,672 18,800 1,454
		644,926

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Remarks:

(i) On 5 June 2013, the shareholders of the Company passed the resolution that the authorised ordinary share capital be increased from HK$716,430,000, divided into 7,164,299,563 Shares, to HK$1,000,000,000, divided into 10,000,000,000 Shares, by the creation of an additional 2,835,700,437 Shares.
(ii) On 15 May 2013, the Company issued 70,631,345 Shares to PacBridge Capital Partners (HK) Limited. The Shares issued formed part of the advisory fees payable by the Company to PacBridge Capital Partners (HK) Limited in respect of the provision of corporate finance advisory services in connection with the Listing.
(iii) On 5 July 2013, the Company issued 934,827,000 Shares at HK$2.35 per Share for cash through an initial public offering by way of Hong Kong public offer and international placing and the Shares were listed on the Main Board of the Stock Exchange with effect from 5 July 2013.
(iv) On 16 January 2014, All Landmark, a controlling shareholder of the Company, entered into a placing agreement for the placement of up to 188,000,000 Shares of the Company (the ‘‘Placing Shares’’) to certain independent professional, institutional and other investors (the ‘‘Placees’’) at HK$7.25 per Share. On the same date, All Landmark also entered into a conditional subscription agreement with the Company for the subscription of 188,000,000 Shares (the ‘‘Subscription Shares’’) at HK$7.25 per Share.

The placement of the Placing Shares by All Landmark to the Placees was completed on 21 January 2014 and the Subscription Shares were issued to All Landmark on 24 January 2014. The net proceeds received by the Company from this top-up placement amounted to HK$1,350,750,000.

(v) On each of 31 December 2013 and 31 December 2014, the Company issued 14,541,747 Shares pursuant to the service contracts or letter of appointment dated 5 June 2013 entered into between the Company and each of Mr David Chow, Mr Sheldon Trainor-DeGirolamo and Mr Tong Ka Wing, Carl.

18. OPERATING LEASE COMMITMENTS

The Group as lessee

At the end of the reporting period, the Group had commitments for future minimum lease payments in respect of land, office properties, warehouse and staff quarters rented under non-cancellable operating leases which fall due as follows:

Within one year In the second to fifth year inclusive	2014 HK$’000 62,420 15,542 77,962	2013 HK$’000 53,804 48,826
		102,630

Operating lease payments represent rentals payable by the Group for certain of its leasehold land, office properties, warehouse and staff quarters. Lease term of leasehold land in Macau is negotiated for a term of 25 years at a fixed rental and is subject for renewal in accordance with applicable laws and regulations. Leases for office properties, warehouse and staff quarters are negotiated for an average term of two years and rentals are fixed for an average term of two years.

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The Group as lessor

At the end of the reporting period, the Group had contracted with tenants for the following future minimum lease payments:

Within one year In the second to fifth year inclusive Over five years	2014 HK$’000 133,081 308,492 200,772 642,345	2013 HK$’000 99,641 265,993 97,903
		463,537

Operating lease income represents licensing income receivable by the Group from certain of its rented premises. Licensing arrangements are negotiated for an average term of five years and licensing fees are fixed for an average term of two years. In addition to the fixed licensing income which are disclosed above, pursuant to the terms of certain licensing arrangements, the Group has licensing income based on certain percentage of gross sales of relevant shop. The contingent licensing income contributed an insignificant amount of licensing income earned by the Group during both years presented.

19. CAPITAL COMMITMENTS

At the end of the reporting period, the Group had capital commitments in respect of the acquisition of property and equipment and construction in progress which are contracted for but not provided of HK$773,871,000 (2013: HK$292,259,000).

At the end of the reporting period, the Group had capital commitments which are authorised but not contracted for in respect of (i) renovation work of The Landmark Macau of HK$36,621,000 (2013: HK$231,189,000); and (ii) the MFW Redevelopment of HK$6,877,337,000 (2013: HK$7,609,863,000).

20. CONTINGENT LIABILITIES

The Group had the following contingent liabilities at the end of the reporting period:

(i) Pursuant to the amendment in the Service Agreement on 16 December 2011, in the event of any non-payment by the gaming promoters or any failure to fulfill their obligations related to gaming promotion agreements as entered with SJM and gaming promoters, the Group undertakes to reimburse SJM for any loss caused by such misconduct of the gaming promoters as well as any possible legal costs associated with litigation. There are no such claims from SJM during the years ended 31 December 2014 and 2013.
(ii) Prior to the acquisition by the Group, MFW Investment initiated repossession proceedings against a former tenant at MFW with rental arrears in dispute of MOP89,008,000 (equivalent to approximately HK$86,416,000) in 2009. The former tenant initiated a counterclaim from MFW Investment an amount of MOP90,728,000 (equivalent to approximately HK$88,085,000) in 2009 for alleging breach of undertakings pursuant to a memorandum of understanding on 19 October 2006 and an escrow undertaking letter on 5 September 2008, as well as seeking compensation for amounts spent on improvements to the premises. During the year ended 31 December 2013, the Macau Court of First Instance dismissed the counterclaim from the former tenant and the former tenant was condemned to pay MFW Investment the amount of MOP67,151,000 (equivalent to approximately HK$65,195,000) as principal and the respective interests to be computed. The former tenant appeals against such decision and the case will be sent to the Macau Court of Second Instance. The Directors

– 17 –

believe the aforementioned case would not result in any material adverse effects on the financial position of the Group as at 31 December 2014. Accordingly, no provision has been made in the consolidated financial statements.

(iii) Prior to the acquisition by the Group, MFW Investment received a claim for outstanding payments on construction works at MFW from a contractor in 2008. The contractor claimed from MFW Investment an amount of MOP23,709,000 (equivalent to approximately HK$23,018,000) and MFW Investment counterclaimed an amount of MOP14,451,000 (equivalent to approximately HK$14,030,000) for defective construction work carried out by the contractor. In April 2010, the Macau Court of First Instance dismissed all claims from the contractor and awarded MOP462,000 (equivalent to approximately HK$449,000) to MFW Investment. The contractor did not agree the court’s judgement and appealed to the Macau Court of Second Instance. The Macau Court of Second Instance dismissed the appeal from the contractor in June 2014 and agreed to award MFW the amount of damages. The Directors believe the aforementioned case would not result in any material adverse effects on the financial position of the Group as at 31 December 2014. Accordingly, no provision has been made in the consolidated financial statements.
(iv) Pursuant to a revolving credit facility agreement and a supplementary agreement dated 1 July 2013 and 22 October 2013, respectively, a gaming promoter, New Legend, a company incorporated in Macau by Mr Frederick Yip, who is a senior management of the Company, has been offered for total facility amount of HK$320 million from SJM to purchase rolling chips to be used in the VIP room(s) at the Pharaoh’s Palace Casino as well as Babylon Casino, where applicable. The revolving credit facility agreement is valid for one year from 3 July 2013 and all borrowed amounts should be repaid by 2 July 2014. The Group has provided a guarantee to SJM under the revolving credit facility agreement. If New Legend defaults on any payments or breaches any of its obligations under the agreement, the Group is liable to SJM and SJM is entitled to withhold monthly service income or deduct outstanding amounts from the monthly service income payable to the Group under the Service Agreement. As at 31 December 2014, an amount of HK$271 million (2013: HK$300 million) under the facility was utilised by New Legend and remained outstanding. The revolving credit facility was renewed on 14 July 2014 and is valid for one year from 3 July 2014 and all borrowed amounts should be repaid by 2 July 2015.

New Legend has been consolidated into the Group upon the approval from independent shareholders of the Company on 3 July 2014 and the Group has recognised the liability of HK$271 million. Details of the arrangement with New Legend are set out in the circular dated 9 June 2014 issued by the Company.

Save and except for the matters specified above, the Group does not have any litigations or claims of material importance and, so far as the Directors are aware, no litigation or claims of material importance are pending or threatened by or against any companies of the Group.

21. CONSOLIDATION OF NEW LEGEND

Further to the disclosures in the Prospectus and the Company’s announcement dated 31 December 2013, the Company was planning to diversify its business and indirectly participate in the gaming promotion business through New Legend under the VIE Structure. The Group obtained all required approvals from regulatory authorities and independent shareholders of the Company during the year ended 31 December 2014 and had control over the gaming promotion business of New Legend and rights to consolidate the financial results of New Legend since 3 July 2014 as if it was the Group’s wholly-owned subsidiary, which allows the economic benefit of New Legend’s business to flow to the Group.

Mr Frederick Yip, the sole shareholder of New Legend, did not and will not receive any consideration in relation to the entering of the VIE Structure with the Company.

– 18 –

The assets and liabilities of New Legend on 3 July 2014 recognised by the Group:

Trade and other receivables Intangible assets Bank balances and cash Trade and other payables Other borrowings	Fair value HK$’000 216,979 317,567 52,794 (287,340) (300,000) —

Included in revenue and profit for the year are HK$58,191,000 and a loss of HK$19,164,000 contributed by New Legend since 3 July 2014 through the VIE Structure, respectively.

Inflow of cash and cash equivalents in respect of the consolidation of New Legend: Bank balances and cash acquired	Fair value HK$’000 52,794

In the opinion of the Directors, the fair values of the receivables acquired (which principally comprised trade and other receivables) approximate to the gross contractual amounts based on the estimation of the contractual cash flows of the receivables which are expected to be collected on the date of the consolidation.

22. SUBSEQUENT EVENTS

The Group has the following events after the end of the reporting period:

(i) Harbourview Hotel, the first new hotel under the MFW Redevelopment, commenced soft opening on 2 February 2015 and had its grand opening on 11 February 2015. Further details of opening of the hotel are set out in the Company’s announcement dated 2 February 2015.
(ii) The Company entered into a non-binding memorandum of understanding (the ‘‘MOU’’) with DYNAM JAPAN HOLDINGS Co., Ltd. (‘‘Dynam’’) on 23 August 2013 in respect of opportunities for business cooperation between the two groups. The terms of the MOU have been extended and further extended with an expiry date of 23 February 2015. The Company and Dynam have not concluded or entered into any definitive agreement before the expiry of the MOU, and the MOU expired on 23 February 2015. Further details of the expiry of the MOU are set out in the Company’s announcement dated 24 February 2015.

– 19 –

MANAGEMENT DISCUSSION AND ANALYSIS

Overview of Results

For the year ended 31 December 2014, the Group achieved total revenue of approximately HK$1,811.1 million, representing an increase of approximately HK$47.4 million, or approximately 2.7% over that of the year ended 31 December 2013 of approximately HK$1,763.8 million. Breakdowns of the Group’s reported revenue for the years ended 31 December 2014 and 2013 are as follows:

Gaming services: — Pharaoh’s Palace Casino — Mass market tables — VIP tables — Self-run (New Legend) — Outsourced — Slot machines — Babylon Casino — Mass market tables — VIP tables — Self-run (New Legend) — Slot machines Sub-total for gaming services Non-gaming operations: — The Landmark Macau — Macau Fisherman’s Wharf Sub-total for non-gaming operations Total reported revenue	For the year ended 31 December 2014 2013 HK$’000 HK$’000 961,313 995,469 53,076 — 117,783 127,386 8,538 8,964 1,140,710 1,131,819 133,465 144,990 5,115 — 695 1,851 139,275 146,841 1,279,985 1,278,660 325,345 277,910 205,782 207,184 531,127 485,094 1,811,112 1,763,754	For the year ended 31 December 2014 2013 HK$’000 HK$’000 961,313 995,469 53,076 — 117,783 127,386 8,538 8,964 1,140,710 1,131,819 133,465 144,990 5,115 — 695 1,851 139,275 146,841 1,279,985 1,278,660 325,345 277,910 205,782 207,184 531,127 485,094 1,811,112 1,763,754
		1,131,819 144,990 — 1,851
		146,841 1,278,660
		277,910 207,184
		485,094
		1,763,754

– 20 –

For the year ended 31 December 2014, gaming revenue and non-gaming revenue of the Group increased by approximately 0.1% to approximately HK$1,280.0 million and by approximately 9.5% to approximately HK$531.1 million respectively when compared to the year ended 31 December 2013. During the year ended 31 December 2014, New Legend contributed gaming revenue of approximately HK$58.2 million to the Group through the VIE Structure, which was offset by the decrease in revenue from mass market tables of approximately HK$45.7 million and revenue from outsourced VIP tables of approximately HK$9.6 million. The increase in non-gaming revenue was primarily attributable to the increase in the income from hotel rooms at The Landmark Macau upon completion of renovation of the hotel and increase in licensing and building management income at The Landmark Macau as well as Rocks Hotel.

Adjusted EBITDA for the year ended 31 December 2014 was approximately HK$842.0 million, representing a decrease of approximately HK$38.7 million or approximately 4.4% over that of the year ended 31 December 2013 of approximately HK$880.6 million. The following table reconciles the Adjusted EBITDA to the profit attributable to owners of the Company.

Profit (loss) attributable to owners of the Company Adjustments for: Finance costs Depreciation of investment properties Depreciation of property and equipment Release of prepaid lease payments Amortisation of other intangible assets Loss on disposal of property and equipment Share-based payments One-off costs incurred associated with the Listing Unrealised exchange loss (gain) Pre-opening expenses (remark) Interest income Tax charge (credit) Adjusted EBITDA		For the year ended 31 December	For the year ended 31 December	For the year ended 31 December	For the year ended 31 December	Consolidated HK$’000 509,879 58,971 8,078 118,449 50,739 — 6,572 51,915 104,713 — — (25,367) (3,329) 880,620
		2014	Consolidated HK$’000 478,941 88,877 8,078 165,630 52,082 15,356 21,118 33,524 — 68,513 24,084 (109,272) (4,979) 841,952		2013
	The Group excluding MFW Group HK$’000 634,406 16,653 3,841 97,910 11,733 15,356 1,184 33,524 — 76,851 — (55,198) 1,650 837,910	MFW Group HK$’000 (155,465) 72,224 4,237 67,720 40,349 — 19,934 — — (8,338) 24,084 (54,074) (6,629) 4,042		The Group excluding MFW Group HK$’000 603,723 58,946 3,841 41,183 11,734 — 5,435 51,915 97,953 — — (25,128) 3,300 852,902	MFW Group HK$’000 (93,844) 25 4,237 77,266 39,005 — 1,137 — 6,760 — — (239) (6,629) 27,718

Remark: Pre-opening expenses represent staff related costs, marketing and other administrative expenses incurred prior to the opening of Harbourview Hotel for the year ended 31 December 2014.

– 21 –

An analysis of Adjusted EBITDA by segments (after elimination of inter-segment results) is as follows:

For the year ended 31 December

Gaming services Non-gaming operations Sub-total Unallocated corporate expenses Adjusted EBITDA		2014	Consolidated HK$’000 862,240 36,362 898,602 (56,650) 841,952		2013	Consolidated HK$’000 922,869 7,948 930,817 (50,197) 880,620
	The Group excluding MFW Group HK$’000 848,077 46,483 894,560 (56,650) 837,910	MFW Group HK$’000 14,163 (10,121) 4,042 — 4,042		The Group excluding MFW Group HK$’000 888,739 14,360 903,099 (50,197) 852,902	MFW Group HK$’000 34,130 (6,412) 27,718 — 27,718

Adjusted EBITDA from the Group excluding the MFW Group and unallocated corporate expenses, mainly arising from the operations at The Landmark Macau, for the year ended 31 December 2014 decreased by approximately 0.9% to approximately HK$894.6 million when compared to the year ended 31 December 2013. The decrease was mainly due to the decrease of Adjusted EBITDA of gaming services by approximately 4.6% which was offset by the increase in non-gaming operations by approximately 223.7%. Adjusted EBITDA from the MFW Group for the year ended 31 December 2014 decreased by approximately 85.4% to approximately HK$4.0 million when compared to the year ended 31 December 2013. The decrease was primarily due to the increase in staff and related costs generally when compared to the year ended 31 December 2013.

Pursuant to the transfer of profit and loan agreement, one of the VIE Agreements, New Legend agreed to, among others, transfer to Hong Hock all profits accrued by New Legend from its commencement of business until the establishment of the VIE Structure. The VIE Structure was established on 3 July 2014. Accordingly, the amount of approximately HK$81.7 million was recognised as profit (included in Adjusted EBITDA) of the gaming services of the Group in the year ended 31 December 2014.

The Group’s profit for the year ended 31 December 2014 was approximately HK$478.9 million, representing a decrease of approximately HK$30.9 million or approximately 6.1% when compared to that of the year ended 31 December 2013 of approximately HK$509.9 million. The decrease was mainly due to the recognition of pre-opening expenses of Habourview Hotel of approximately HK$24.1 million and the current year’s net unrealised exchange loss on bank fixed deposits denominated in RMB of approximately HK$68.5 million given the decline in exchange rate of RMB against HK$ which were offset by the bank interest income on deposits (mainly denominated in RMB and HK$) of approximately HK$109.3 million and profits of approximately HK$81.7 million contributed by New Legend through the VIE Structure as mentioned above.

– 22 –

Financial and Operational Reviews

A. Gaming Services

The Group’s revenue from gaming services consisted of service income received from SJM for services and facilities provided relating to mass market tables, VIP tables and slot machines.

As at 31 December 2014 and 2013, the Group had the following number of gaming tables and slot machines in its two casinos:

		As at 31 December	As at 31 December
	2014	Total 81 69 150 281		2013
Pharaoh’s Palace Casino 60 63 123 161	Babylon Casino 21 6 27 120		Pharaoh’s Palace Casino 60 67 127 205	Babylon Casino 23 — 23 120	Total 83 67
					150 325

Included in the number as at 31 December 2014 was a total of 8 gaming tables (31 December 2013: nil) which were temporarily not in operation.
^ The number of gaming tables as at 31 December 2014 shown above does not include the 35 additional gaming tables granted by the DICJ to the Company on 28 October 2014.
The slot machines at Babylon Casino as at 31 December 2014 were temporarily not in operation.

– 23 –

For the year ended 31 December 2014, the Group recorded approximately HK$1,280.0 million revenue from gaming services, representing an increase of approximately HK$1.3 million or approximately 0.1% over that of the year ended 31 December 2013 of approximately HK$1,278.7 million. Breakdowns of the Group’s revenue from gaming services for the years ended 31 December 2014 and 2013 are as follows:

Mass market tables: — Pharaoh’s Palace Casino — Babylon Casino Self-run VIP tables: — Pharaoh’s Palace Casino — Babylon Casino Outsourced VIP tables: — Pharaoh’s Palace Casino Slot machines: — Pharaoh’s Palace Casino — Babylon Casino Total revenue from gaming services	For the year ended 31 December 2014 2013 HK$’000 HK$’000 961,313 995,469 133,465 144,990 1,094,778 1,140,459 53,076 — 5,115 — 58,191 — 117,783 127,386 175,974 127,386 8,538 8,964 695 1,851 9,233 10,815 1,279,985 1,278,660	For the year ended 31 December 2014 2013 HK$’000 HK$’000 961,313 995,469 133,465 144,990 1,094,778 1,140,459 53,076 — 5,115 — 58,191 — 117,783 127,386 175,974 127,386 8,538 8,964 695 1,851 9,233 10,815 1,279,985 1,278,660
		1,140,459
		— —
		— 127,386
		127,386
		8,964 1,851
		10,815
		1,278,660

– 24 –

The following tables set out certain key operational data of mass market tables, VIP tables and slot machines for the years ended 31 December 2014 and 2013:

Mass Market Tables

Games drop Net win Hold rate Average number of tables Net win per table per day	Pharaoh’s Palace Casino For the year ended 31 December 2014 2013 Change HK$’000 HK$’000 % 5,880,731 8,654,636 (32.1) 1,747,842 1,809,944 (3.4) 29.72% 20.91% 8.81 60 60 — 80 83 (3.6)	Babylon Casino For the year ended 31 December 2014 2013 Change HK$’000 HK$’000 % 1,326,206 1,301,569 1.9 242,664 263,619 (7.9) 18.30% 20.25% (1.95) 22 23 (4.3) 30 31 (3.2)

During the year ended 31 December 2014, in order to minimise the risk of the Group’s exposure to the increasing number of counterfeit bank notes in the market, the Group took a temporary measure for the mass market gaming tables that gaming patrons were requested to exchange HK$ one thousand bank notes for chips at the Group’s cashiers instead of on the gaming tables. Since the exchange of bank notes for chips at the Group’s cashiers did not count towards games drop by definition, the temporary measure resulted in lower games drop during the year ended 31 December 2014, which resulted in the figures of games drop and related hold rates not being comparable to those of the last corresponding period.

The Group’s revenue from mass market tables for year ended 31 December 2014 was approximately HK$1,094.8 million, representing a decrease of approximately HK$45.7 million or approximately 4.0% over that of the year ended 31 December 2013 of approximately HK$1,140.5 million. Revenue from mass market tables at Pharaoh’s Palace Casino decreased by approximately 3.4% to approximately HK$961.3 million while revenue at Babylon Casino decreased by approximately 7.9% to approximately HK$133.5 million. For the year ended 31 December 2014, net win per table per day of mass market tables at Pharaoh’s Palace Casino and Babylon Casino decreased by approximately 3.6% to approximately HK$80,000 and approximately 3.2% to approximately HK$30,000 over that of the year ended 31 December 2013 of approximately HK$83,000 and HK$31,000, respectively.

– 25 –

VIP Tables

Games turnover Net win Win percentage Average number of tables Net win per table per day	Pharaoh’s Palace Casino For the year ended 31 December	Babylon Casino For the year ended 31 December

The Group’s revenue from VIP tables for the year ended 31 December 2014 was approximately HK$176.0 million, representing an increase of approximately HK$48.6 million or approximately 38.1% over that of the year ended 31 December 2013 of approximately HK$127.4 million. During the year ended 31 December 2014, approximately HK$58.2 million contributed from New Legend since 3 July 2014 through the VIE Structure. Revenue from outsourced VIP tables decreased by approximately HK$9.6 million or approximately 7.5%. For the year ended 31 December 2014, net win per table per day of VIP tables at Pharaoh’s Palace Casino increased by approximately 0.4% to approximately HK$269,000 over that of the year ended 31 December 2013 of approximately HK$268,000. Net win per table per day of VIP tables at Babylon Casino which commenced operation since November 2014 was approximately HK$34,000.

On 3 July 2014, the Group obtained the approval from independent shareholders of the Company at an extraordinary general meeting of the Company for the establishment of the VIE Structure. The VIE Structure allows the Group to indirectly participate in the gaming promotion business and have a greater control over the management and marketing of the VIP rooms operated by New Legend in the casinos located in its properties, as well as enhance its market footprint and receive a higher percentage of gross gaming revenue generated by the gaming tables in these VIP rooms. During the year ended 31 December 2014, New Legend contributed approximately HK$58.2 million of gaming revenue through the VIE Structure. Upon implementation of the VIE Structure, financial results of New Legend have been consolidated into the consolidated financial statements of the Group. Further details of the VIE Structure are set out in the Company’s circular dated 9 June 2014.

– 26 –

Slot Machines

Slot handle Net win Hold rate Average number of slot machines Net win per slot machine per day	Pharaoh’s Palace Casino For the year ended 31 December 2014 2013 Change HK$’000 HK$’000 % 758,957 627,599 20.9 33,891 30,388 11.5 4.47% 4.84% (0.37) 183 209 (12.4) 0.5 0.4 25.0	Babylon Casino For the year ended 31 December 2014 2013 Change HK$’000 HK$’000 % 39,939 106,035 (62.3) 1,671 5,282 (68.4) 4.18% 4.98% (0.80) 120 99 21.2 0.1 0.1 —

The Group’s revenue from slot machines at Pharaoh’s Palace Casino and Babylon Casino for the year ended 31 December 2014 decreased by approximately 4.8% to approximately HK$8.5 million and by approximately 62.5% to approximately HK$0.7 million respectively when compared to the year ended 31 December 2013. This decrease was mainly due to the decrease in hold rate and the temporarily suspended slot operation at Babylon Casino.

Investment in Casino Management System

In July 2014, the Group entered into a purchase and licence agreement with Bally Technologies, Inc. (‘‘Bally Technologies’’, whose shares are listed on the New York Stock Exchange), a global leading supplier of innovative games, table game products, systems, mobile, and iGaming solutions for gaming industry, to provide the Group with the latest casino management system for improving player connectivity, patron loyalty and yield management. These tools will be important components of the Group’s strategy to expand its mass gaming business. The casino management system licensed by Bally Technologies is the technology solution of choice for most of the large multi-casino operators in the Asia-Pacific Region. The first phase of the casino management system has been installed and put into operation at Babylon Casino since February 2015. Implementation will be in phases to correspond to the expected expansion of gaming capacities of the Group.

Grant of Additional Gaming Tables

On 28 October 2014, the Group was advised by the DICJ that 35 additional gaming tables were granted to the Company. The additional gaming tables will increase the gaming capacity of the Group and support the current MFW Redevelopment.

– 27 –

B. Non-gaming Operations

For the year ended 31 December 2014, the Group recorded a total non-gaming revenue of approximately HK$531.1 million, representing an increase of approximately HK$46.0 million or approximately 9.5% over that of the year ended 31 December 2013 of approximately HK$485.1 million. Out of the total non-gaming revenue, revenue from The Landmark Macau accounted for approximately HK$325.3 million or approximately 61.3% of the total non-gaming revenue (year ended 31 December 2013: approximately HK$277.9 million or approximately 57.3%); and MFW accounted for approximately HK$205.8 million or approximately 38.7% of the total non-gaming revenue (year ended 31 December 2013: approximately HK$207.2 million or approximately 42.7%).

The following table provides details on the composition of the Group’s non-gaming revenue:

	For the year ended 31 December	For the year ended 31 December	For the year ended 31 December	For the year ended 31 December
	2014	Consolidated HK$’000 183,266 99,975 75,310 132,116 32,890 7,570 531,127		2013
The Group excluding MFW Group HK$’000 156,573 51,821 53,831 57,845 — 5,275 325,345	MFW Group HK$’000 26,693 48,154 21,479 74,271 32,890 2,295 205,782		The Group excluding MFW Group HK$’000 119,449 37,788 45,518 70,275 — 4,880 277,910	MFW Group HK$’000 24,139 34,511 17,445 88,595 40,150 2,344 207,184	Consolidated HK$’000 143,588 72,299 62,963 158,870 40,150 7,224
					485,094

The increase in non-gaming revenue was primarily attributable to the increase in the rental income from hotel rooms at The Landmark Macau upon completion of renovation of the hotel and increase in licensing and building management income at The Landmark Macau as well as Rocks Hotel.

– 28 –

The following table sets out certain key operational data on hotel operations of the Group for the years ended 31 December 2014 and 2013:

	For the year	ended
	31 December
	2014	2013
The Landmark Macau
Occupancy rate (%)	84.6	94.2
ADR (HK$)	1,544.2	1,191.6
REVPAR (HK$)	1,306.4	1,122.6
Rocks Hotel
Occupancy rate (%)	85.3	84.3
ADR (HK$)	1,457.0	1,361.2
REVPAR (HK$)	1,242.8	1,147.5

The Landmark Macau

The occupancy rate of The Landmark Macau for the year ended 31 December 2014 was approximately 84.6%, an approximately 9.6% decrease over that of the year ended 31 December 2013 of approximately 94.2%. For the year ended 31 December 2014, ADR and REVPAR of The Landmark Macau increased by approximately 29.6% and approximately 16.4% respectively when compared to those of the year ended 31 December 2013. Up to January 2014, all hotel rooms at The Landmark Macau had been refurbished and put into operation. During the year ended 31 December 2014, room rates of the newly renovated hotel were marked up which gave rise to the increase in ADR but affected the occupancy rate. Overall, REVPAR increased as the rental income from hotel rooms increased.

Macau Fisherman’s Wharf

For year ended 31 December 2014, MFW attracted a total of approximately 4,305,000 visitors, representing an increase of approximately 4.9% when compared to that of the year ended 31 December 2013 of approximately 4,105,000 visitors.

The occupancy rate of Rocks Hotel for the year ended 31 December 2014 was approximately 85.3%, an approximately 1.0% increase over that of the year ended 31 December 2013 of approximately 84.3%. For the year ended 31 December 2014, ADR and REVPAR of Rocks Hotel increased by approximately 7.0% and approximately 8.3% respectively when compared to those of the year ended 31 December 2013. The improved performance of Rocks Hotel was largely the result of successful marketing amid increased competition in the Macau hospitality industry.

– 29 –

C. Corporate and Business Updates

(a) Renovation of The Landmark Macau

The Landmark Macau underwent a significant makeover in 2013 to enhance the revenue generating potential of the property and ensure a consistent luxury experience for the guests. By January 2014, all guest rooms had been refurbished.

In addition to the above, the renovation plans also include expanding the lobby, adding retail space, redesigning and installing exterior lighting and promotional signage with lighting elements installation commencing in the first half of 2015.

(b) MFW Redevelopment

Opening of Harbourview Hotel

Harbourview Hotel, the first new hotel under the MFW Redevelopment, commenced soft opening on 2 February 2015 and had its grand opening on 11 February 2015. With design based on the 18th century Prague architectural style, Harbourview Hotel contributes an additional 389 rooms and 55 suites to the tourism market of Macau Peninsula. The hotel is connected via footbridges to the adjacent Babylon Casino. With the opening of Harbourview Hotel, the Company will enhance gaming facilities at MFW by allocating 35 additional gaming tables which were granted by the DICJ in October 2014 at Babylon Casino.

Other Redevelopment

In additional to the opening of Harbourview Hotel, the Group also made progress on other projects of the MFW Redevelopment. The table below provides further details on the status of ongoing construction projects as part of the MFW Redevelopment.

			Target
Buildings/Facilities	Brief Description	Progress	Completion Date
Legend Palace Hotel	A five-star deluxe-	Foundation work has	2Q 2016
	themed hotel in the	been substantively
	style of Central/	completed. Licence for
	Northern Asian	construction of the
	medieval architecture	superstructure of hotel
	with 229 opulent guest	has been applied and
	rooms including suites	construction of hotel is
		expected to commence
		in 2Q 2015

– 30 –

			Target
Buildings/Facilities	Brief Description	Progress	Completion Date
Legendale Hotel	A flagship five-star	Revised design concepts	4Q 2017
	deluxe rating hotel	have been developed
	modelled after the Neo-	and are under review for
	Renaissance style of	reduction of
	architecture from the	construction costs and
	mid-17th century	improvement on the
	Central European period	planning and
	with a planned 500	operational efficiencies
	guest rooms including
	suites	Application for increase
		of the height of the
		hotel has been
		submitted to Macau
		government for approval
General entertainment	The dinosaur journey is	The facility is being	2Q 2017
and cultural facility	an entertainment	designed to include
	experience bringing the	fossil exhibits as well as
	world of dinosaurs to	the addition of
	the visitors	intellectual, entertaining
		and interactive elements
		to provide an exciting
		visitor experience
	A newly developed	The design stage is	2Q 2017
	multi-propose	significantly developed
	entertainment and
	performance theatre
	holding more than 1,000
	seats with capability
Yacht club and public	Further development of	Phase 1 — completed in
pier for harbour cruises	the marina to increase	November 2014
	the size of its mooring
	area and inclusion of a	Phase 2 — further	2Q 2016
	yacht club with	pontoons and wave
	immigration facilities	attenuator wall in
		design stage

– 31 –

			Target
Buildings/Facilities	Brief Description	Progress	Completion Date
Canopied open-air	Development of fixed	Design for the canopy	3Q 2015
shopping, dining and	canopy structures on	on Jackson Square has
entertainment colonnade	main boulevard and	been completed and
	Jackson Square	submitted to Macau
	providing all-weathered	government for
	protection with	approval. Currently
	integrated lighting	awaiting construction
	entertainment shows	licence
		For the canopy on main	1Q 2016
		boulevard, design has
		been completed and
		submitted to Macau
		government for
		approval. Currently
		awaiting construction
		licence
Redevelopment of	Refurbishment and	Approval of Miami	Phased
existing facilities	addition of facilities to	Building at MFW as	completions
	certain buildings	part of Babylon	4Q 2014 to 4Q
	including Babylon	Casino’s extension has	2015
	Casino and Rocks	been obtained from
	Hotel, construction of	DICJ
	new parking facilities
	for shuttle buses and
	coaches, addition of fine
	dining and family style
	restaurants and building
	of a canopy

For the year ended 31 December 2014, all work within the MFW Redevelopment has progressed significantly. Following the Group’s efforts of close monitoring and supervision of the project, it is indicated the development of Harbourview Hotel would be completed with significant savings to the established budget forecasts.

During the year ended 31 December 2014, many of the above projects which have been progressing through the design and government approval submission stages have been redesigned and/or modified to reduce construction costs and improve operational efficiencies.

– 32 –

These procedures have resulted in adjustments of some target completion dates. The Group believes that these design adjustments and modifications will enhance the end product in terms of quality and functionality of the completed developments.

In January 2014, the Company completed a top-up placement of 188,000,000 new Shares, representing approximately 2.92% of the then enlarged issued share capital of the Company upon completion of the top-up placement, to certain independent professional, institutional and other investors at HK$7.25 per Share and raised net proceeds of approximately HK$1,350.8 million. Further details of the top-up placement are set out in the Company’s announcement dated 16 January 2014.

(d) Cooperation with Dynam

The Company entered into the MOU with Dynam, a company incorporated in Japan and whose shares are listed on the Main Board of the Stock Exchange (stock code: 6889), on 23 August 2013 in respect of opportunities for business cooperation between the two groups. The terms of the MOU have been extended and further extended with an expiry date of 23 February 2015. The Company and Dynam have not concluded or entered into any definitive agreement before the expiry of the MOU, and the MOU expired on 23 February 2015. Further details of the expiry of the MOU are set out in the Company’s announcement dated 24 February 2015.

(e) Execution of the Facility Agreement for a new five-year transferable term loan facility

On 8 April 2014, MFW Investment, as borrower, together with the Corporate Guarantors, entered into the Facility Agreement with ICBC Macau and the other Lenders relating to the Facility to be made available to MFW Investment. Further details of the Facility are set out in the Company’s announcement dated 8 April 2014.

As at 31 December 2014, MFW Investment had drawn down a total principal amount of HK$4,024.0 million under the Facility.

Outlook

Macau continues to be a popular tourist destination with a record number of over 31.5 million visitors travelling to Macau in 2014, representing an increase of 7.5% compared to that of 2013. Visitors from the PRC, South Korea and Japan rose year on year. The Group believes that there will be continuous demand for quality hotel accommodation and peripheral leisure tourism services, in particular in the Macau Peninsula.

– 33 –

It is against this backdrop that the Group opened its first new hotel at MFW, Harbourview Hotel, in February 2015, with an additional supply of 389 rooms and 55 suites to help ease off some pressure on the capacity of Macau tourism as a whole, and further balance the number of hotel rooms between the Macau Peninsula and Cotai.

The opening of Harbourview Hotel adds non-gaming elements to further enrich the existing leisure facilities at MFW. The expanding hotel portfolio will increase revenue contributions and economies of scale benefits to the Group.

The second and third new hotel projects at MFW are also progressing and the further addition of over 700 rooms will alleviate the scarcity of quality hotel accommodation in the Macau Peninsula.

The first phase of the Marina, completed in November 2014, has 18 berths and can accommodate large yachts up to 40 metres. Together with the potential implementation of the ‘‘Guangdong Macau individual visit scheme for yachts’’, the Marina puts MFW at a strategic position to support Macau in building a world class tourism and leisure centre, and to promote the privileged and unique waterfront locale of MFW. Plans are in place to expand the facility into a modern marina with comprehensive ancillary functions.

The Group will actively upgrade its facilities and services to encourage visitations from the PRC, South Korea, Japan, and selected South East Asian countries. Understanding the culture nuances of the customers will be a high priority of the management, as it is only with such dedication that the growing portfolio of offerings at MFW may excel.

As for gaming, the Group will continue to focus on premium mass and mass market segments, both of which have proven to provide strong results in the past. At the same time, the Group will remain vigilant to take advantage of its special niche through the VIE Structure, to capitalise growth in the VIP segment when such visitations become more prevalent in future.

Overall, upcoming infrastructure completions and favourable government policies towards entertainment, leisure, as well as MICE (meetings, incentives, conventions and exhibitions) facilities will firmly put Macau as a major tourist hub in Asia. The Group is confident that it is strategically positioned to positively benefit from these developments.

The Group remains committed to the successful completion of the MFW Redevelopment, and will actively seek opportunities for business expansion so as to maximise value for its shareholders, partners and customers.

Liquidity and Capital Resources

The Group’s liquidity needs primarily comprise working capital, capital expenditure, and servicing borrowings of the Group. The Group has generally funded its operations and development projects from internal resources, debt and/or equity financing.

– 34 –

As at 31 December 2014, the consolidated net assets attributable to owners of the Company amounted to approximately HK$7,459.7 million, representing an increase of approximately HK$1,863.2 million from approximately HK$5,596.5 million as at 31 December 2013. The increase in consolidated net assets during the year ended 31 December 2014 was mainly due to the proceeds received from the topup placement of 188,000,000 new Shares of approximately HK$1,350.8 million and the Group’s profit for the year of approximately HK$478.9 million.

Bank Balances and Cash

As at 31 December 2014, bank balances and cash held by the Group amounted to approximately HK$4,568.2 million (including pledged bank deposits of approximately HK$20.6 million), of which approximately 77.5% was denominated in RMB and the remaining approximately 22.5% was denominated mainly in HK$ and MOP. Given MOP are pegged to HK$, the Group considers the exposure to exchange rate risk is nominal for its bank balances and cash denominated in MOP. The Group’s bank deposits denominated in RMB are subject to exchange rate risk as the exchange rate of RMB to HK$ may fluctuate significantly.

The Company completed a global offering with its Shares listed on the Stock Exchange with effect from 5 July 2013 on which the Company raised net proceeds of approximately HK$2.1 billion. In addition, the Company completed a top-up placement of 188,000,000 new Shares and raised net proceeds of approximately HK$1,350.8 million in January 2014. In order to enhance better yield for the portion of the proceeds raised from the Listing and top-up placement which are not expected to be utilised in the near term, the Group has placed these funds at banks in Hong Kong and Macau as HK$ or RMB fixed deposits with maturities ranging from 1 to 12 months. As at 31 December 2014, a total of approximately HK$3,829.5 million had been placed as fixed deposits at banks in Hong Kong and Macau, including approximately HK$3,520.1 million in RMB and approximately HK$309.3 million mainly in HK$, at an average annualised interest rate of approximately 2.5%.

Exchange rate of RMB against HK$ fluctuated during the year. For accounting purposes, the RMB fixed deposits held by the Group were retranslated into HK$ at the exchange rate as at 31 December 2014 which resulted in a net unrealised exchange loss of approximately HK$68.5 million being recognised in the Group’s annual results.

Borrowings

As at 31 December 2014, the Group had outstanding secured and unguaranteed bank borrowings of approximately HK$3,955.4 million and an unsecured, interest-free and unguaranteed other borrowings of approximately HK$271.0 million.

In respect of the bank borrowings of approximately HK$3,955.4 million, the maturity profile was spread over a period of less than 5 years with approximately HK$177.6 million repayable within one year, approximately HK$579.8 million repayable in the second year and approximately HK$3,198.0 million repayable in the third to fifth years. The other borrowings of approximately HK$271.0 million are repayable within one year.

– 35 –

The Group’s bank borrowings carried interest at prevailing market rates and on floating rate basis. In addition, the bank borrowings and the other borrowings as at 31 December 2014 were denominated in HK$ (the Group’s functional currency) and hence the Group does not expect any significant foreign currency exposure in respect of its bank borrowings and other borrowings as at 31 December 2014.

Use of Proceeds from the Global Offering

Trading of the Shares on the Stock Exchange commenced on 5 July 2013, and the Group raised net proceeds of approximately HK$2.1 billion from the global offering. The Group intends to apply such proceeds in a manner consistent with the intended use of proceeds as disclosed in the Supplemental Prospectus and the announcement made by the Company on 4 July 2013 (the ‘‘Announcement’’). Details of the intended use of proceeds are set out in the Supplemental Prospectus and the Announcement. Up to 31 December 2014, the Group had applied approximately HK$1,257.4 million, approximately HK$199.7 million and approximately HK$97.5 million of the net proceeds for the MFW Redevelopment, renovation of The Landmark Macau and settlement of an amount in respect of purchase of an aircraft, respectively, which are in compliance with the intended use of proceeds as set out in the Supplemental Prospectus and the Announcement.

Charge on the Group’s Assets

As at 31 December 2014, certain assets of the Group were pledged to secure credit facilities and use of electricity granted to the Group, including investment properties with a total carrying amount of approximately HK$248.9 million, buildings with a total carrying amount of approximately HK$1,639.7 million, prepaid lease payments with a total carrying amount of approximately HK$1,823.3 million, trade receivables of approximately HK$108.5 million and bank deposits of approximately HK$20.6 million.

Gearing

The Group’s gearing ratio (expressed as a percentage of total borrowings over total equity as at the end of the reporting period) was approximately 56.7% as at 31 December 2014 (31 December 2013: approximately 25.1%). The increase in gearing ratio of the Group for the year ended 31 December 2014 was mainly due to the inception of new bank loan and the consolidation of a revolving credit facility of New Legend by the Group during the year ended 31 December 2014.

Hedging, Acquisitions and Disposals and Significant Investments

During the year ended 31 December 2014, the Group did not (i) employ any financial instruments for hedging purposes; (ii) undertake any material acquisitions or disposals of assets, business or subsidiaries; or (iii) make any significant investments.

Contingent Liabilities

Details of contingent liabilities of the Group as at 31 December 2014 are set out in note 20 to the consolidated financial statements of the Group for the year ended 31 December 2014.

– 36 –

Capital Commitments

As at 31 December 2014, the Group had capital commitments which are authorised but not contracted for in respect of the renovation work of The Landmark Macau and the MFW Redevelopment of approximately HK$36.6 million and approximately HK$6,877.3 million respectively. In addition, as at 31 December 2014, the Group had capital commitments in respect of acquisition of property and equipment and construction in progress which are contracted but not provided for of approximately HK$773.9 million.

Employees and Remuneration Policies

As at 31 December 2014, the Group had a total of approximately 3,400 employees, including approximately 1,420 gaming operation employees who are employed and paid by SJM but over whom the Group exercised oversight in accordance with the Service Agreement. The Group reimbursed SJM in full for the salaries and other benefits of these gaming operation employees.

The Group recognises the importance of maintaining a stable staff force for its continued success. Staff remuneration is determined by reference to personal qualifications, work performance, industry experience, responsibilities and relevant market trends. Discretionary bonuses are granted to employees based on merit and in accordance with industry practice. Other benefits including share options, reward shares, retirement benefits, subsidised medical care and sponsorship for external education and training programmes are offered to eligible employees.

PURCHASE, SALE OR REDEMPTION OF LISTED SHARES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of its listed securities during the year ended 31 December 2014.

CORPORATE GOVERNANCE

Compliance with Corporate Governance Code

The Company believes that good corporate governance practices are very important for maintaining and promoting investor confidence and for the sustainable growth of the Group. The Board sets appropriate policies and implements corporate governance practices appropriate to the conduct and growth of the Group’s business. The Board is committed to strengthening the Group’s corporate governance practices and ensuring transparency and accountability of the Company’s operations. During the year ended 31 December 2014, the Company has complied with the CG Code except for code provision A.2.1.

Code provision A.2.1

Code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual. Currently, Mr David Chow and Mr Tong Ka Wing, Carl are co-chairmen of the Board and responsible for the management of the Board and ensuring that all major and appropriate issues are discussed by the Board in a timely

– 37 –

and constructive manner. In addition, Mr David Chow is the chief executive officer of the Company, taking care of the day-to-day management of the Group’s business and implementing the Group’s policies, strategic plans and business goals formulated by the Board. Although Mr David Chow is both a co-chairman and the chief executive officer of the Company, the powers and authorities of the co-chairman have not been concentrated as the responsibilities have been shared between the cochairmen. The Board believes that the balance of power and authority for the present arrangement will not be impaired and is adequately ensured by the current Board which comprises experienced and high calibre individuals with sufficient number of Directors being non-executive Directors.

REVIEW OF ANNUAL RESULTS

The Group’s consolidated financial statements for the year ended 31 December 2014 have been reviewed by the Audit Committee of the Company, which currently comprises three independent nonexecutive Directors, namely Mr Fong Chung, Mark, Mr Xie Min and Madam Tam Wai Chu, Maria, and the non-executive Director, Mr Tong Ka Wing, Carl.

SCOPE OF WORK OF MESSRS DELOITTE TOUCHE TOHMATSU

The figures in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income and the related notes thereto for the year ended 31 December 2014 as set out in this preliminary announcement have been agreed by the Company’s auditor, Messrs Deloitte Touche Tohmatsu, to the amounts set out in the Group’s audited consolidated financial statements for the year. The work performed by Messrs Deloitte Touche Tohmatsu in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA and consequently no assurance has been expressed by Messrs Deloitte Touche Tohmatsu on the preliminary announcement.

DEFINITIONS

In this announcement, the following expressions have the following meanings unless the context otherwise requires:

‘‘Adjusted EBITDA’’ the Group’s earnings before interest income, finance costs, income taxes, depreciation, release of prepaid lease payments, amortisation, loss on disposal of property and equipment, unrealised exchange gain/ loss, share-based payments, pre-opening expenses and one-off costs incurred or associated with corporate exercises including the Listing/ placement of the Shares

‘‘ADR’’ average daily room rate

‘‘All Landmark’’ All Landmark Properties Limited, a controlled corporation of Mr David Chow

– 38 –

‘‘Board’’	the board of Directors
‘‘CG Code’’	the Corporate Governance Code contained in Appendix	14 to	the
	Listing Rules
‘‘Company’’	Macau Legend Development Limited, a company incorporated in		the
	Cayman Islands with limited liability, the issued Shares of which		are
	listed on the Main Board of the Stock Exchange
‘‘Corporate Guarantors’’	the Company and the Material Subsidiaries
‘‘DICJ’’	Direcção de Inspecção e Coordenação de Jogos, the Gaming Inspection
	and Coordination Bureau in Macau
‘‘Directors’’	the directors of the Company
‘‘Elite Success’’	Elite Success International Limited, a company in which each of Mr		Li
	Chi Keung and Ms Wong Hoi Ping, the spouse of Mr Li	Chi Keung,
	held 44.5% of the total issued capital
‘‘Facility’’	a five-year transferable term loan facility in the	amount	of
	HK$4,221,000,000 provided by the Lenders to MFW Investment
‘‘Facility Agreement’’	the facility agreement dated 8 April 2014 and entered	into among
	MFW Investment, the Corporate Guarantors, ICBC Macau and		the
	other Lenders relating to the Facility
‘‘Grand Bright’’	Grand Bright Holdings Limited, a controlled corporation	of Madam
	Lam
‘‘Group’’	the Company and its subsidiaries
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘HKFRSs’’	Hong Kong Financial Reporting Standards
‘‘HKICPA’’	Hong Kong Institute of Certified Public Accountants
‘‘Hong Hock’’	Hong Hock Development Company Limited, a company incorporated
	in Macau and a subsidiary of the Company
‘‘ICBC Macau’’	Industrial and Commercial Bank of China (Macau) Limited
‘‘Lenders’’	the lenders of the Facility which are banks and financial institutions

– 39 –

‘‘Listing’’ the listing of the Shares on the Main Board of the Stock Exchange with effect from 5 July 2013
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘Madam Lam’’ Madam Lam Fong Ngo, the vice chairman, an executive Director and a controlling shareholder (as defined in the Listing Rules) of the Company
‘‘Material Subsidiaries’’ New Macau Landmark and Hong Hock ‘‘MFW’’ Macau Fisherman’s Wharf operated by MFW Investment ‘‘MFW Group’’ MFW Investment and its subsidiaries ‘‘MFW Investment’’ Macau Fisherman’s Wharf International Investment Limited, a company incorporated in Macau and a subsidiary of the Company
‘‘MFW Redevelopment’’ the redevelopment of MFW ‘‘MOP’’ Macau Pataca, the lawful currency of Macau ‘‘Mr David Chow’’ Mr Chow Kam Fai, David, a co-chairman, an executive Director and the chief executive officer of the Company and a controlling shareholder (as defined in the Listing Rules) of the Company
‘‘Mr Frederick Yip’’ Mr Yip Wing Fat, Frederick, the sole shareholder and sole director of New Legend and the executive vice president, head of casino operations of the Company
‘‘New Legend’’ New Legend VIP Club Limited, a company incorporated in Macau by Mr Frederick Yip
‘‘New Macau Landmark’’ New Macau Landmark Management Limited, a company incorporated in Macau and a subsidiary of the Company
‘‘PRC’’ the People’s Republic of China ‘‘Prospectus’’ the prospectus of the Company dated 17 June 2013 ‘‘REVPAR’’ revenue per available room ‘‘RMB’’ Renminbi, the lawful currency of the PRC

– 40 –

‘‘Service Agreement’’ the service agreement dated 25 September 2006 and its related amendments entered into between Hong Hock and SJM, under which the Group provides gaming services to SJM in the Group’s two major casinos, namely Pharaoh’s Palace Casino in The Landmark Macau and Babylon Casino in MFW

‘‘Share(s)’’ ordinary share(s) of HK$0.1 each in the share capital of the Company ‘‘SJM’’ Sociedade de Jogos de Macau, S.A.
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Supplemental Prospectus’’ the supplemental prospectus of the Company dated 26 June 2013
‘‘VIE Agreements’’ the exclusive management and consultancy services agreement, the exclusive undertaking to sell agreement, the transfer of profit and loan agreement, the share and equity pledge agreement and the power of attorney entered into among Hong Hock, New Legend and Mr Frederick Yip, where appropriate, further details of which are set out in the Company’s circular dated 9 June 2014
‘‘VIE Structure’’ the structure established through the entering into of the VIE Agreements, which enables the Group to indirectly participate in the gaming promotion business operations in Macau through New Legend
‘‘%’’ per cent

By Order of the Board Macau Legend Development Limited Chow Kam Fai, David Co-chairman, executive Director and chief executive officer

Hong Kong, 26 March 2015

As at the date of this announcement, the executive Directors are Chow Kam Fai, David, Lam Fong Ngo and Sheldon Trainor-DeGirolamo; the non-executive Director is Tong Ka Wing, Carl; and the independent non-executive Directors are Fong Chung, Mark, Xie Min and Tam Wai Chu, Maria.

For identification purposes only

– 41 –

AI assistant

Macau Legend Development Limited — Annual Report 2015

50086_rns_2015-03-26_a511c07d-378a-4bb0-a83b-6d106e74f0c8.pdf

Macau Legend Development Limited 澳 門 勵 駿 創 建 有 限 公 司[*]

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2014

RESULTS

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

2. BASIS OF PREPARATION

3. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS

4. REVENUE

5. SEGMENT INFORMATION

Segment revenue and results:

For the year ended 31 December 2014

For the year ended 31 December 2013

Other segment information:

For the year ended 31 December 2014

For the year ended 31 December 2013

6. OTHER INCOME, GAINS AND LOSSES

7. FINANCE COSTS

8. PROFIT BEFORE TAXATION

9. TAXATION CREDIT

10. DIVIDENDS

Interim dividend

Final dividend

11. EARNINGS PER SHARE

Earnings

13. TRADE AND OTHER RECEIVABLES

14. BANK BALANCES AND CASH

15. TRADE AND OTHER PAYABLES

16. BANK AND OTHER BORROWINGS

17. SHARE CAPITAL

Remarks:

18. OPERATING LEASE COMMITMENTS

The Group as lessee

The Group as lessor

19. CAPITAL COMMITMENTS

20. CONTINGENT LIABILITIES

21. CONSOLIDATION OF NEW LEGEND

22. SUBSEQUENT EVENTS

MANAGEMENT DISCUSSION AND ANALYSIS

Overview of Results

Financial and Operational Reviews

A. Gaming Services

The slot machines at Babylon Casino as at 31 December 2014 were temporarily not in operation.

Mass Market Tables

VIP Tables

Slot Machines

Investment in Casino Management System

Grant of Additional Gaming Tables

B. Non-gaming Operations

The Landmark Macau

Macau Fisherman’s Wharf

C. Corporate and Business Updates

(b) MFW Redevelopment

Opening of Harbourview Hotel

Other Redevelopment

(d) Cooperation with Dynam

Outlook

Liquidity and Capital Resources

Bank Balances and Cash

Borrowings

Use of Proceeds from the Global Offering

Charge on the Group’s Assets

Gearing

Hedging, Acquisitions and Disposals and Significant Investments

Contingent Liabilities

Capital Commitments

Employees and Remuneration Policies

PURCHASE, SALE OR REDEMPTION OF LISTED SHARES

CORPORATE GOVERNANCE

Compliance with Corporate Governance Code

Code provision A.2.1

REVIEW OF ANNUAL RESULTS

SCOPE OF WORK OF MESSRS DELOITTE TOUCHE TOHMATSU

DEFINITIONS

Hong Kong, 26 March 2015

Macau Legend Development Limited Annual Report 2015

Macau Legend Development Limited 澳門勵駿創建有限公司[*]