Lai Sun Garment : CIRCULAR - SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 JULY 2015

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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 or other registered institutions 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 Garment (International) Limited, you should at once hand this circular with the accompanying form of election to the purchaser(s) or transferee(s) or to the bank, stockbroker 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.

Executive Directors: Registered office:

Dr. Lam Kin Ming (Chairman) 11th Floor

Dr. Lam Kin Ngok, Peter (Deputy Chairman) Lai Sun Commercial Centre

Mr. Chew Fook Aun (Deputy Chairman) 680 Cheung Sha Wan Road

Mr. Lam Hau Yin, Lester Kowloon

(also alternate to Madam U Po Chu) Hong Kong Mr. Lam Kin Hong, Matthew

Madam U Po Chu

Independent Non-executive Directors:

Mr. Chow Bing Chiu Mr. Lam Bing Kwan

Mr. Leung Shu Yin, William

To the Shareholders

Dear Sir or Madam,

30 December 2015

SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 JULY 2015

1. INTRODUCTION

   On 11 December 2015, the shareholders ("Shareholder(s)") of Lai Sun Garment (International) Limited ("Company") have upon the recommendation of the board of directors ("Board") of the Company approved at the annual general meeting of the Company the distribution of a final dividend of HK$0.011 per share in the share capital of the Company ("Share(s)") for the year ended 31 July 2015 ("Final Dividend") to the Shareholders whose names appear on the register of members of the Company ("Register of Members") at the close of business on Tuesday, 22 December 2015 ("Record Date").

   The Shareholders are provided with an option to receive the Final Dividend in form of new fully paid Shares ("Scrip Shares"), in lieu of cash ("Scrip Dividend Scheme"). The procedures which apply in relation to the Scrip Dividend Scheme and the action which should be taken by the Shareholders in relation thereto are set out hereunder for the Shareholders' attention. Please read carefully the instructions hereunder and the instructions on the form of election in relation to the Scrip Dividend Scheme for Final Dividend ("Election Form") enclosed with this circular.

   
   

   Whether or not it is to your advantage to elect to receive Scrip Shares in lieu of cash, in whole or in part, for the Final Dividend will depend on your own individual circumstances and the decision in this regard, and all effects resulting therefrom, will be your sole responsibility. If you are in doubt as to what to do, you should consult your professional advisers.

   
   

2. PARTICULARS OF THE SCRIP DIVIDEND SCHEME FOR FINAL DIVIDEND

   
   

   Under the Scrip Dividend Scheme, the Shareholders have the following choices in respect of the Final Dividend for the existing Shares registered in their names on the Record Date:

   
   

3. a cash dividend of HK$0.011 for each Share; or

   
   

4. an allotment of Scrip Shares (the number of which is determined by methods set out below); or

   
   

5. partly in cash and partly in form of Scrip Shares.

   
   

   The Scrip Shares will, on issue, rank pari passu in all other respects with the existing issued Shares save that they will not be eligible for the Final Dividend.

   
   

   For the purpose of calculating the number of Scrip Shares to be issued pursuant to the Scrip Dividend Scheme for Final Dividend, the market value of a Scrip Share has been fixed at HK$0.812, which is the average closing price of the Share ("Average Closing Price") as quoted on The Stock Exchange of Hong Kong Limited ("Stock Exchange") for the five consecutive trading days up to and including the Record Date.

   
   

   Accordingly, the number of the Scrip Shares which Shareholders will receive in respect of the Final Dividend for existing Shares registered in their names on the Record Date will be calculated as follows:

   
   

   Number of

   Scrip Share =

   Number of existing Shares HK$0.011

   held on the Record Date (Final Dividend per Share) for which election for xHK$0.812

   to be received Scrip Shares is made (Average Closing Price)

   The number of the Scrip Shares to be issued to each Shareholder will be rounded down to the nearest whole number. Fractional entitlements to the Scrip Shares will not be issued to the Shareholders and will be cancelled accordingly.

   
   

   Based on 1,891,763,427 Shares in issue as at the close of business on the Record Date, if all Shareholders choose to receive Scrip Shares in lieu of cash in respect of the Final Dividend, the Company will issue approximately 25,627,337 Scrip Shares, an increase of approximately 1.35% of the existing issued share capital of the Company.

6. BOOK CLOSURE PERIOD AND LAST DATE OF TRANSFER

   
   

   For the purpose of determining Shareholders who qualify for the Final Dividend, the Register of Members was closed on Monday, 21 December 2015 and Tuesday, 22 December 2015.

   
   

   The last date and time by which transfers were accepted for registration for participation in the Scrip Dividend Scheme for Final Dividend was Friday, 18 December 2015 at 4:30 p.m.

   
   

7. ADVANTAGES OF THE SCRIP DIVIDEND SCHEME

   
   

   The Scrip Dividend Scheme will give the Shareholders an opportunity to increase their investment in the Company at market value without incurring brokerage fees, stamp duty and related dealing costs. The Scrip Dividend Scheme will also benefit the Company to the extent that such cash which would otherwise have been paid to Shareholders who elect to receive the Scrip Shares, in whole or in part in lieu of a cash dividend, will be retained for use as working capital by the Company.

   
   

8. ELECTION FORM

   
   

   The Election Form is enclosed with this circular for use by the Shareholders should they wish to receive the Final Dividend wholly or partly in form of Scrip Shares in lieu of cash. The Election Form should be completed in accordance with the instructions printed thereon and returned to the Company's share registrar, Tricor Tengis Limited ("Registrar") at Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong, not later than 4:30 p.m. on Monday, 18 January 2016. Failure to complete and return the Election Form in accordance with the instructions printed thereon will result in the relevant qualifying Shareholder's Final Dividend being paid wholly in the form of cash. No acknowledgement of receipt of the Election Form will be issued. No elections in respect of the Final Dividend may be in any way withdrawn, revoked, superseded or altered after the relevant Election Forms are signed and returned to the Registrar.

   
   
9. To receive Final Dividend in form of cash only, you do not need to take any action.

   
   

10. To receive Final Dividend in form of Scrip Shares only, please SIGN, DATE and RETURN the Election Form to the Registrar.

    
    

11. To receive Final Dividend partly in cash and partly in form of Scrip Shares, please ENTER in Box C of the Election Form the number of Shares which you held on the Record Date for which you require the Final Dividend to be paid in form of Scrip Shares and then SIGN, DATE and RETURN the Election Form to the Registrar. For the avoidance of doubt, if you do not specify the number of Shares for which you wish to receive the Final Dividend in form of Scrip Shares or if your specified number is greater than your registered holding on the Record Date, then in either case you will be deemed to have elected to receive your Final Dividend in form of Scrip Shares only.
12. CONDITIONS OF THE SCRIP DIVIDEND SCHEME FOR FINAL DIVIDEND

    The Scrip Dividend Scheme for Final Dividend is conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Scrip Shares to be issued thereunder.

    In the event that the above condition of the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Scrip Shares to be issued is not satisfied, the Scrip Dividend Scheme for Final Dividend will not be effective and the Final Dividend will be paid wholly in cash.

13. EFFECT OF THE SCRIP DIVIDEND SCHEME FOR FINAL DIVIDEND

    Shareholders should note that the Scrip Shares to be issued under the Scrip Dividend Scheme for Final Dividend may give rise to disclosure requirements under the provision of Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). If Shareholders are in any doubt as to how these provisions may affect them as a result of the allotment of the Scrip Shares, they are recommended to seek their own professional advice.

14. SHAREHOLDERS RESIDING OUTSIDE HONG KONG

No person receiving a copy of this circular and/or an Election Form in any jurisdiction outside Hong Kong may treat the same as an offer to elect to receive Scrip Shares unless in the relevant jurisdiction such offer could lawfully be made to him/her/it without the Company being required to comply with any legal, governmental or regulatory procedures, restrictions or any other similar formalities. Shareholders residing in a jurisdiction where it would be illegal for the Company to make such an invitation will be deemed to have received this circular and/or the Election Form for information only.

At the Record Date, there were 14 Shareholders residing in 8 jurisdictions outside Hong Kong, namely Canada, Denmark, Ireland, Malaysia, New Zealand, Singapore, Taiwan and the United States of America who together held an aggregate of 64,193,158 Shares, representing approximately 3.39% of the entire issued share capital of the Company. The aggregate amount of the Final Dividend to which these Shareholders are entitled is approximately HK$706,125.

The Company has been advised by its legal advisers on the laws of Canada, Denmark, Ireland, New Zealand, Singapore and Taiwan. Having considered their advices, the Company is satisfied that either there is no legal restriction or there are exemptions available to the Company under the applicable legislation of these six jurisdictions or requirement of any relevant regulatory body or stock exchange in these six jurisdictions with respect to the offer of the Scrip Shares to the Shareholders with registered addresses in these six jurisdictions as at the Record Date.

The Company has also been advised by legal advisers in Malaysia and the United States of America that, without complying with local approval and/or registration requirements and/ or other formalities under the laws of these two jurisdictions, subject to the exception set out in the following paragraph, the Scrip Dividend Scheme may not be offered to Shareholders with registered addresses in these two jurisdictions, as at the Record Date ("Excluded Shareholders"). As it would not be cost-effective or expedient for the Company to comply with the approval and/or registration requirements and/or other formalities under the laws of these two jurisdictions, the Board has decided that, subject to the exception set out in the following paragraph, it would be expedient to exclude the Excluded Shareholders from the Scrip Dividend Scheme.