CONTENTS 2 Corporate Information 78 Consolidated Statement of Profit or Loss and Other Comprehensive Income 4 Corporate Profile 79 Consolidated Statement of Financial Position 7 Chairman’s Statement 81 Consolidated Statement of Changes in Equity 11 Management Discussion and Analysis 82 Consolidated Statement of Cash Flows 21 Directors and Senior Management 84 Notes to the Consolidated Financial Statements 28 Corporate Governance Report 154 Financial Summary 39 Environmental, Social and Governance Report 155 Particulars of Major Properties 49 Directors’ Report 156 Definitions 72 Independent Auditor’s Report CORPORATE INFORMATION PLACE OF INCORPORATION NOMINATION COMMITTEE Cayman Islands Madam Tam Wai Chu, Maria (Chairman) Mr Chow Kam Fai, David Mr Sheldon Trainor-DeGirolamo BOARD OF DIRECTORS Mr Fong Chung, Mark Mr Xie Min Executive Directors Mr Chow Kam Fai, David AUTHORISED REPRESENTATIVES (Co-chairman and chief executive officer) Madam Lam Fong Ngo (Vice chairman) Mr Sheldon Trainor-DeGirolamo Mr Sheldon Trainor-DeGirolamo Mr Tong Ka Wing, Carl Mr Chow Wan Hok, Donald Non-executive Directors COMPANY SECRETARY Mr Tong Ka Wing, Carl (Co-chairman) Mr Wong Man Cheung Ms Ho Chiulin, Laurinda Independent Non-executive Directors REGISTERED OFFICE Mr Fong Chung, Mark Conyers Trust Company (Cayman) Limited Mr Xie Min Cricket Square, Hutchins Drive Madam Tam Wai Chu, Maria P.O. Box 2681 Grand Cayman KY1-1111 AUDIT COMMITTEE Cayman Islands Mr Fong Chung, Mark (Chairman) Mr Tong Ka Wing, Carl HEADQUARTERS AND PRINCIPAL PLACE OF Ms Ho Chiulin, Laurinda BUSINESS IN MACAU Mr Xie Min Palace Building, Macau Fisherman’s Wharf Madam Tam Wai Chu, Maria Avenida da Amizade e Avenida da Dr. Sun Yat Sen, Macau REMUNERATION COMMITTEE Mr Xie Min (Chairman) PRINCIPAL PLACE OF BUSINESS IN Mr Chow Kam Fai, David HONG KONG Madam Lam Fong Ngo Shop 102, 1/F, Shun Tak Centre Mr Fong Chung, Mark 168—200 Connaught Road Central Madam Tam Wai Chu, Maria Hong Kong 2 Macau Legend Development Limited 2017 Annual Report CORPORATE INFORMATION (CONTINUED) CAYMAN ISLANDS PRINCIPAL SHARE LISTING INFORMATION REGISTRAR AND TRANSFER OFFICE Place of Listing Conyers Trust Company (Cayman) Limited Cricket Square, Hutchins Drive Main Board of The Stock Exchange of Hong Kong Limited P.O. Box 2681 Grand Cayman KY1-1111 STOCK CODE Cayman Islands 1680 HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE BOARD LOT Computershare Hong Kong Investor Services Limited 1,000 Shares Shops 1712—1716 17/F, Hopewell Centre 183 Queen’s Road East INVESTOR RELATIONS Wanchai Hong Kong Tel: (853) 2822 2211 Fax: (853) 2822 2266 Email: [email protected] HONG KONG LEGAL ADVISERS Michael Li & Co., Solicitors WEBSITE www.macaulegend.com INDEPENDENT AUDITOR Deloitte Touche Tohmatsu Certified Public Accountants PRINCIPAL BANKERS Industrial and Commercial Bank of China (Macau) Limited Banco Nacional Ultramarino, S.A. Luso International Banking Limited The Bank of East Asia, Limited — Macau Branch Wing Lung Bank, Limited — Macau Branch Bank of Communications Co., Ltd. — Hong Kong Branch Macau Legend Development Limited 2017 Annual Report 3 CORPORATE PROFILE The Company was incorporated under the laws of the Cayman Islands on 5 October 2006. The Company acts as an investment holding company. The Group is one of the leading owners of entertainment and casino gaming facilities in Macau. The Group currently has two major properties in Macau, 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 which follows the “Leisure, Tourism, Economic and Multi-Cultural Diversification” policy of the government of the Macau Special Administrative Region of the PRC. The Group’s businesses include (i) the provision of gaming services to SJM in three major casinos in its properties, namely Pharaoh’s Palace Casino in The Landmark Macau and Babylon Casino and the Legend Palace Casino in MFW under the Service Agreement; (ii) the operation of casino inside Savan Legend Resorts Hotel and Entertainment Complex in Lao PDR and (iii) the operation of hotels, entertainment and leisure facilities within its properties. On 13 May 2016, the Company entered into the project development agreement with the Government of the Lao PDR in respect of the acquisition of the Savan Legend at the consideration of US$42.0 million (equivalent to approximately HK$325.9 million). The project development agreement shall have an initial term of 50 years. The Group obtained the approval from the shareholders of the Company at an extraordinary general meeting of the Company held on 18 August 2016. On 1 September 2016, the Company has taken over the management and operation of Savan Legend. On 9 November 2017, the Group and the independent third parties (the “Buyers”) entered into the Disposal Agreement, pursuant to which the Group agreed to sell and the Buyers agreed to buy the entire issued share capital and all obligations, liabilities and debts owing by New Macau Landmark to Hong Hock, at a consideration of HK$4,600 million. The transaction is expected to be completed in early 2018 after the conditions precedent are fulfilled under the Disposal Agreement. 4 Macau Legend Development Limited 2017 Annual Report CHAIRMAN’S STATEMENT CHAIRMAN’S STATEMENT 2017 was a year with opportunities and challenges for Macau. The factors such as economic situation in China, the changing profile of the visitors in Macau and natural disaster have caused uncertainties in the gaming and non-gaming business in Macau. According to the figures announced by the Gaming Inspection and Coordination Bureau, Macau generated gross gaming revenue of approximately MOP265.7 billion in 2017, representing an approximately 19.1% increase when compared to corresponding period in last year. It is the first time in recent years to achieve positive growth in Macau. During the year 2017, as benefited by the increase of the visitors in Macau, as well as the continuous development in our Lao’s business, the Group’s business achieved a total reported revenue for the year of approximately HK$1,836.1 million, representing an increase of approximately 24.8% over that of 2016. Adjusted EBITDA for the year was approximately HK$278.2 million, representing an increase of approximately 29.0% when compared to corresponding period in last year. In the past year, the Group has been committed to consolidating and expanding its hotel business in Macau. On 27 February, 2017, the Group’s Legend Palace Hotel, the latest 5-star addition to the MFW Redevelopment with 223 rooms and suites, 6 new food and beverage outlets, and a casino, has officially commenced its operation. Legend Palace Hotel has achieved steady growth in performance since its operation. The Group is actively improving the ancillary facilities inside MFW and increasing the number of events to be held in MFW, in order to attract more well-known brands to march into MFW. These will definitely facilitate MFW to become the most diversified convention and exhibition center and leisure hub. Also, the Group is seeking to complete the disposal of Landmark Macau (the “Disposal”). The Group believes that the Disposal will enable the Group to focus on the operation and development of MFW, and will provide MFW Redevelopment with sufficient financial support. Macau Legend Development Limited 2017 Annual Report 7 CHAIRMAN’S STATEMENT (CONTINUED) On the other hand, in response to the China’s “One-Belt, One-Road” policy, the Group also actively developed the overseas projects in 2017. Our Saven Legend Resorts in Savannakhet Province in Laos has contributed satisfactory overseas returns to the Group. In addition, a number of overseas projects, including an integrated resort and casino in Cape Verde, are also on the right track. The Group will continue to look for overseas projects with good development and investment potential so as to cope with its vision to create new market for business development. We will continue to focus on Southeast Asian destinations where the “One-Belt, One Road” policy from China is supporting new investment in tourism and tourism related infrastructure and will also focus on Portuguese-speaking countries, like Cape Verde, to make good use of the Sino-Portuguese platform for our diversified overseas business. Lastly, we would like to join the Board in thanking all of the Group’s employees for their continued hard work and dedication in the past year. The Group is grateful for their tireless effort and commitment in the past year, and the Group is proud of the contribution each and every one of them has made. The Group would also like to express its appreciation to all of its business partners and shareholders for their support throughout the year. CHOW KAM FAI, DAVID TONG KA WING, CARL Co-chairman, Executive Director Co-chairman and Non-executive Director and Chief Executive Officer 27 March 2018 8 Macau Legend Development Limited 2017 Annual Report CLASSIC, ELEGANCE & LUXURY MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW OF RESULTS For the year ended 31 December 2017, the Group achieved a total reported revenue of approximately HK$1,836.1 million, representing an increase of approximately HK$364.6 million or approximately 24.8% over that of the year ended 31 December 2016 of approximately HK$1,471.5 million. Breakdown of the Group’s reported revenue for the years ended