1
EMPEROR ENTERTAINMENT HOTEL LIMITED

(Incorporated in Bermuda with limited liability)
(Stock Code : 296)
ANNOUNCEMENT OF INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2007
INTERIM RESULTS

The board of directors (the “Board” or “Directors”) of Emperor Entertainment Hotel Limited
(the “Company”) is pleased to announce the unaudited condensed consolidated results of the
Company and its subsidiaries (collectively referred to as the “Group”) for the six months
ended 30th September, 2007 (the “Period”) together with the comparative figures for the
corresponding period as set out below.
These condensed consolidated financial statements have not been audited nor reviewed by the
Company’s auditors, Deloitte Touche Tohmatsu, but have been reviewed by the audit committee
of the Company, which comprises the three Independent Non-executive Directors of the
Company.

2
CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30th September, 2007
Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
Notes HK$’000 HK$’000
Continuing operations
Revenue 2 653,422 532,106
Cost of sales (15,849) (21,406)
Direct operating expenses (96,564) (87,619)
Gross profit 541,009 423,081
Fair value change in investment properties – 123,130
Other income 11,916 10,505
Selling and marketing expenses (267,065) (278,454)
Administrative expenses (110,782) (73,300)
Finance costs (18,823) (20,962)
Profit before taxation 156,255 184,000
Taxation 5 (18,856) (17,702)
Profit for the period from continuing operations 3 137,399 166,298
Discontinued operation
(Loss) profit for the period from discontinued
operation 3&4 (6,507) 15,185
Profit for the period 3&6 130,892 181,483
Attributable to:
Equity holders of the Company 97,663 109,222
Minority interests 33,229 72,261
130,892 181,483

Earnings per share 7
From continuing and discontinued operations
– basic HK$0.10 HK$0.12
– diluted HK$0.10 HK$0.12
From continuing operations
– basic HK$0.11 HK$0.10
– diluted HK$0.11 HK$0.10

3
CONDENSED CONSOLIDATED BALANCE SHEET

As at 30th September, 2007
As at
30th September, 31st March,
2007 2007

(Unaudited) (Audited)
Notes HK$’000 HK$’000
Non-current assets
Investment properties 622,700 681,200
Property, plant and equipment 925,967 986,217
Prepaid lease payments 304,780 307,640
Property under development 510,578 485,671
Deposits made on acquisition of
property, plant and equipment 2,847 2,288
Goodwill 55,126 18,301
2,421,998 2,481,317

Current assets
Inventories, at cost 3,102 4,046
Trade and other receivables 8 629,416 494,647
Prepaid lease payments 7,619 7,619
Amounts due from related companies 1,593 968
Bank balances and cash 259,204 216,442
900,934 723,722

Current liabilities
Trade and other payables 9 437,502 404,776
Amounts due to related companies 5,894 103,906
Amounts due to minority shareholders
of a subsidiary 87,711 125,720
Dividend payable 82,684 –
Taxation payable 37,241 18,130
Secured bank borrowings
– amounts due within one year 38,869 39,845
689,901 692,377

Net current assets 211,033 31,345
Total assets less current liabilities 2,633,031 2,512,662

4
CONDENSED CONSOLIDATED BALANCE SHEET (Continued)
As at 30th September, 2007
As at
30th September, 31st March,
2007 2007

(Unaudited) (Audited)
HK$’000 HK$’000
Non-current liabilities
Amounts due to minority shareholders
of a subsidiary 298,949 328,492
Secured bank borrowings
– amounts due after one year 193,809 213,031
Deferred taxation 73,204 73,459
565,962 614,982

Net assets 2,067,069 1,897,680
Capital and reserves
Share capital 103 93
Reserves 1,650,168 1,459,130
Equity attributable to equity holders
of the Company 1,650,271 1,459,223
Minority interests 416,798 438,457
Total equity 2,067,069 1,897,680

5
Notes:
1. BASIS OF PREPARATION AND PRINCIPAL ACCOUNTING POLICIES

The unaudited condensed consolidated financial statements have been prepared in accordance
with the Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong
Kong Institute of Certified Public Accountants (“HKICPA”) and with the applicable disclosure
requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”).
The unaudited condensed consolidated financial statements have been prepared on the historical
costs basis, except for certain properties and financial instruments, which are measured at
revalued amounts or fair values as appropriate.
The accounting policies adopted for preparation of the unaudited condensed consolidated financial
statements are consistent with those followed in the preparation of the Group’s annual financial
statements for the year ended 31st March, 2007.
In the Period, the Group has applied, for the first time, a new standard, amendment and
interpretations (“new HKFRSs”) issued by the HKICPA, which are effective for the Group’s
financial year beginning 1st April, 2007.
The adoption of these new HKFRSs had no material effect on the results or financial position of
the Group for the current or prior accounting periods. Accordingly, no prior period adjustment
has been recognised.
The Group has not early applied the new standards or interpretations that have been issued but
are not yet effective. The Directors of the Company anticipate that the application of these
standards or interpretations will have no material impact on the results and the financial position
of the Group.
Certain comparative figures have been reclassified to conform with the Period’s presentation.

6
Notes: (Continued)
2. REVENUE

An analysis of the Group’s revenue, for both continuing and discontinued operations, is as
follows:
Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Continuing operations
Hotel and gaming operations
Service income from VIP rooms 360,355 288,110
Service income from mass market 110,469 94,340
Service income from slot machine hall 22,667 18,162
Hotel room rental income 39,090 34,733
Marketing and promotion income 52,001 42,825
Food and beverage sales 33,259 29,552
Rental income from investment properties 28,647 19,306
Others 6,934 5,078
653,422 532,106

Discontinued operation (Note 4)
Cruise and cruise-related operations
Rental income from gaming hall 15,092 60,000
Food and beverage sales 240 494
Room rental income 72 134
Others 892 555
16,296 61,183
669,718 593,289

7
Notes: (Continued)
3. SEGMENT INFORMATION

In accordance with the Group’s internal financial reporting, the Group has determined business
segments to be presented as the primary reporting format. An analysis of the Group’s business
segmental information is as follows:
Discontinued
Continuing operations operation
Hotel and Property Unallocated Cruise and
gaming sales and corporate cruise-related
operations development items Total operations Consolidated
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
For the six months ended
30th September, 2007
REVENUE 653,422 – – 653,422 16,296 669,718
RESULTS

Segment results 178,432 (2,094) (4,944) 171,394 (7,652) 163,742
Interest income 3,305 14 365 3,684 – 3,684
Finance costs (17,153) – (1,670) (18,823) – (18,823)
Profit (loss) before taxation 156,255 (7,652) 148,603
Taxation (18,856) – (18,856)
Gain on disposal of discontinued operation – 1,145 1,145
Profit (loss) for the period 137,399 (6,507) 130,892
Discontinued
Continuing operations operation
Hotel and Property Unallocated Cruise and
gaming sales and corporate cruise-related
operations development items Total operations Consolidated
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
For the six months ended
30th September, 2006
REVENUE 532,106 – – 532,106 61,183 593,289
RESULTS

Segment results 210,050 (1,828) (4,876) 203,346 15,185 218,531
Interest income 1,587 1 28 1,616 – 1,616
Finance costs (12,107) – (8,855) (20,962) – (20,962)
Profit before taxation 184,000 15,185 199,185
Taxation (17,702) – (17,702)
Profit for the period 166,298 15,185 181,483

8
Notes: (Continued)
4. DISPOSAL OF SUBSIDIARIES

Discontinuted operation
On 7th May, 2007, the Group entered into an agreement to dispose of Quick Treasure Investments
Limited and its subsidiaries (collectively referred to as the “Quick Treasure Group”) which
carried out the Group’s cruise and cruise-related operations to a third party. The disposal was
completed on 29th June, 2007, on which date control of the Quick Treasure Group was passed
to the third party and the Group discontinued its cruise and cruise-related operations.
The (loss) profit for the period from discontinued operation is analysed as follows:
Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
(Loss) profit of cruise and cruise-related operations (7,652) 15,185
Gain on disposal of cruise and cruise-related operations 1,145 –
(6,507) 15,185
The results of discontinued operation for the period up to the date of disposal and the prior
interim reporting period were as follows:
Period ended Six months ended
29th June, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Revenue 16,296 61,183
Cost of sales (1,304) (1,852)
Direct operating expenses (13,353) (26,925)
Selling and marketing expenses (1,467) (1,087)
Administrative expenses (7,824) (16,134)
(Loss) profit for the period (7,652) 15,185

9
Notes: (Continued)
4. DISPOSAL OF SUBSIDIARIES (Continued)
Discontinuted operation (Continued)
The net assets of the Quick Treasure Group as at the date of disposal and as at 31st March, 2007
were as follows:
As at
29th June, 31st March,
2007 2007

(Unaudited) (Audited)
HK$’000 HK$’000
Property, plant and equipment 127,788 129,405
Inventories 1,784 1,728
Trade and other receivables 1,213 1,890
Amount due from immediate holding company – 202
Amount due from a related company 3,645 966
Bank balances and cash 2,054 1,895
Trade and other payables (8,600) (7,440)
Amount due to immediate holding company (55,713) –
Amount due to ultimate holding company – (48,823)
Net assets 72,171 79,823
Assignment of intercompany indebtedness 55,713
Gain on disposal 1,145
Total consideration, satisfied by cash 129,029
Analysis of net inflow of cash and cash equivalents
in connection with the disposal:
Cash consideration 129,029
Bank balances and cash disposed of (2,054)
126,975

The discontinued operation spent approximately HK$6,816,000 (2006: generated HK$32,597,000)
in respect of the Group’s operating activities, paid approximately HK$117,000 (2006:
HK$626,000) in respect of investing activities and generated approximately HK$7,092,000 (2006:
paid HK$33,468,000) in respect of financing activities.

10
Notes: (Continued)
5. TAXATION

Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Continuing operations
The charge comprises:
Macau Complimentary Income Tax
– current period (19,111) (4,625)
– overprovision in prior year – 2,605
Deferred taxation 255 (15,682)
(18,856) (17,702)
The Macau Complimentary Income Tax is calculated progressively at a maximum of 12% of the
estimate assessable profits for both periods.
No provision for Hong Kong Profits Tax has been made as there were no estimated assessable
profits for both periods.
6. PROFIT FOR THE PERIOD

Six months ended 30th September,
2007 2006

Continuing Discontinued Continuing Discontinued
operations operation Total operations operation Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Profit for the period has been arrived
at after charging:
Allowance for bad and doubtful debts 16,847 – 16,847 1,900 – 1,900
Depreciation of property, plant and
equipment 33,133 1,724 34,857 33,229 3,247 36,476
Operating lease rental in respect of
rented premises 2,117 105 2,222 1,724 209 1,933
Release of prepaid lease payments 3,232 – 3,232 3,232 – 3,232
and after crediting:
Interest income from bank deposits 3,684 – 3,684 1,616 – 1,616

11
Notes: (Continued)
7. EARNINGS PER SHARE

From continuing and discontinued operations
The calculations of the basic and diluted earnings per share are based on the following data:
Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Earnings:
Earnings attributable to the equity holders of
the Company for the purpose of calculating
basic and diluted earnings per share 97,663 109,222
At as
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
Number of shares:
Weighted average number of shares for the purpose
of calculating basic earnings per share 952,246,126 928,771,980
Effect of dilutive potential shares – share options (Note) – –
Weighted average number of shares for the purpose
of calculating diluted earnings per share 952,246,126 928,771,980
Note: No effect of dilutive potential shares in respect of the share options is resulted as the
exercise price of the Company’s share options was higher than the average market
price of the shares during both periods.

12
Notes: (Continued)
7. EARNINGS PER SHARE (Continued)
From continuing operations
The calculations of the basic and diluted earnings per share from continuing operations are
based on the following data:
Six months ended
30th September, 30th September,
2007 2006

(Unaudited) (Unaudited)
HK$’000 HK$’000
Earnings:
Earnings attributable to the equity holders of
the Company 97,663 109,222
Less: (Loss) earnings for the period from
discontinued operation (6,507) 15,185
Earnings for the purposes of calculating basic and
diluted earnings per share from continuing operations 104,170 94,037
The denominators used are the same as those detailed above for both basic and diluted earnings
per share.
From discontinued operation
Basic and diluted loss per share for discontinued operation are HK$0.01 per share (2006:
earnings per share of HK$0.02) and HK$0.01 per share (2006: earnings per share of HK$0.02)
respectively, based on the loss for the period from the discontinued operation of approximately
HK$6,507,000 (2006: profit of HK$15,185,000). The denominators used are the same as those
detailed above for both basic and diluted earnings per share.

13
Notes: (Continued)
8. TRADE AND OTHER RECEIVABLES

The Group allows credit periods of up to 60 days to its trade customers. An aged analysis of the
Group’s trade receivables as at the balance sheet date is set out below:
As at
30th September, 31st March
2007 2007

(Unaudited) (Audited)
HK$’000 HK$’000
0 – 30 days 274,320 318,640
31 – 60 days 72,558 36,048
61 – 90 days 39,885 931
91 - 180 days 19,535 3,619
Over 180 days – 12
406,298 359,250

Chips on hand 176,553 108,292
Other receivables 46,565 27,105
629,416 494,647

Chips on hand represent chips issued by a gaming concessionaire in Macau.
The Directors of the Company consider that the carrying amount of trade and other receivables
approximates its fair value.
9. TRADE AND OTHER PAYABLES

An aged analysis of the Group’s trade payables as at the balance sheet date is set out below:
As at
30th September, 31st March
2007 2007

(Unaudited) (Audited)
HK$’000 HK$’000
0 – 30 days 50,181 59,762
31 – 60 days 2,774 1,172
61 – 90 days 1 178
91 – 180 days – 67
Over 180 days 80 –
53,036 61,179

Short-term advances 45,000 45,000
Construction payables 154,328 173,677
Other payables 185,138 124,920
437,502 404,776

Short-term advances are unsecured, interest-free and repayable on demand.
The Directors of the Company consider that the carrying amount of trade and other payables
approximates its fair value.

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INTERIM DIVIDEND

The Board of the Company declared the payment of an interim dividend of HK$0.04 (2006:
HK$0.04) per share (“Dividend”) for the Period, amounting to approximately HK$41.3 million
(2006: HK$37.2 million). The Dividend will be paid on 25th January, 2008 (Friday) to
shareholders whose names appear on Register of Members of the Company on 11th January,
2008 (Friday).
Closure of Register of Members
The Register of Members of the Company will be closed, for the purpose of determining
shareholders’ entitlement to the Dividend, from 10th January, 2008 (Thursday) to 11th January,
2008 (Friday) (both days inclusive), during which period no share transfer will be effected.
In order to qualify for the Dividend, all transfers accompanied by the relevant share certificates
must be lodged with the Company’s Share Registrar in Hong Kong, Tricor Secretaries Limited,
at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong for registration no
later than 4:00 p.m. on 9th January, 2008 (Wednesday).
MANAGEMENT DISCUSSION AND ANALYSIS

The Group principally engages in gaming operations and provision of entertainment and
hospitality services in Macau.
The Group’s flagship project, Grand Emperor Hotel in Macau, had been providing solid and
steady contributions following the commencement of its operations in January 2006. In August
2007, the Group increased its effective interest in the Grand Emperor Hotel and the two self-
managed VIP rooms in the hotel from 45% to 50% and from 90% to 100% respectively.
The construction of the Group’s property development project – a shopping arcade and service
apartment complex in Shanghai – is underway and is expected to be completed in 2009.
During the Period, the Group disposed of its cruise liner operation. Revenue from the Group’s
continuing operations, being mainly the hotel and gaming operations, soared 23% to
approximately HK$653.4 million during the Period, up from approximately HK$532.1 million
for the same period in 2006. Profit from the continuing operations on the other hand declined
17% to approximately HK$137.4 million as compared to HK$166.3 million for the
corresponding period in 2006, mainly due to the inclusion of a revaluation gain for the
Group’s hotel properties of approximately HK$123.1 million in 2006, without which and its
related deferred taxation of HK$14.7 million, the profit from the continuing operations would
be HK$57.9 million.
OPERATION REVIEW

The Group’s development project and various investments are discussed as follows:

15
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
OPERATION REVIEW (Continued)
Hotel and gaming operations
The Grand Emperor Hotel in Macau is the Group’s flagship project. The hotel commenced
business in January 2006 and has quickly established its brand-name in Macau, the world’s
largest gaming market.
The Grand Emperor Hotel is located at the heart of Macau’s city centre, a short distance from
the main ferry terminal and the casino landmark Hotel Lisboa. The Grand Emperor Hotel has
136,660 square feet of gaming space spreading over seven floors. It has a capacity of 348 slot
machine seats and approximately 90 gaming tables in gaming concourse and VIP rooms,
featuring mainly baccarat – the most popular game in Macau with the best odds among major
table games.
The luxuriously designed hotel also provides comprehensive entertainment and dining facilities
with a European-themed decor and 291 hotel rooms, appealing to the tastes and preferences of
its customers.
In August 2007, the Group successfully increased its effective interest in the Grand Emperor
Hotel from 45% to 50%, and in two self-managed VIP rooms in the Grand Emperor Hotel
from 90% to 100% through acquisition of additional interest of a subsidiary, details of which
are set out in the section headed “Acquisition of Additional Interest of a Subsidiary” below.
The restructuring streamlined the Group’s corporate investment structure, raising its investment
in the Grand Emperor Hotel and the Macau gaming market.
Gaming Revenue
The Group’s casino operations, run by licence holder Sociedade de Jogos de Macau, S.A., had
performed in line with management expectations amid intensifying competition. All segments
had recorded remarkable growth in revenue.
Gaming Concourse
The Group operated 52 tables in its gaming concourse, targeting for the mass market. They in
total contributed a gross win of approximately HK$276.2 million (2006: HK$235.9 million),
with an average win of approximately HK$29,000 (2006: HK$28,000) per table per day.
Revenue for the Period was approximately HK$110.5 million (2006: HK$94.3 million).
Slot Machines
During the Period, this sector recorded a gross win of approximately HK$56.7 million (2006:
HK$58.6 million). The slot machines returned an average win of approximately HK$900
(2006: HK$900) per seat per day. Revenue for the Period was approximately HK$22.7 million
(2006: HK$18.2 million).

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MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
OPERATION REVIEW (Continued)
Hotel and gaming operations (Continued)
Gaming Revenue (Continued)
Self-managed VIP rooms
The Group launched its second VIP room inside the hotel since May 2007 with four tables
providing baccarat games for high-rollers. The Group now self-manages two VIP rooms, with
ten tables in total, an area where the Group possesses substantial experience and expertise.
Supported by a decade-long operating experience in Macau, the VIP rooms maintained high
rolling of approximately HK$26.9 billion (2006: HK$28.9 billion). Win percentage (calculated
before discounts and commissions) was 3.3% (2006: 2.6%). Revenue was approximately
HK$412.3 million (2006: HK$330.9 million) and an average win per table per day was
approximately HK$527,000 (2006: HK$676,000).
Rental from leased-out VIP rooms
The Group received contributions from the leasing of six VIP rooms operated within the hotel.
Revenue was approximately HK$27.2 million (2006: HK$16.9 million) during the Period.
Non-gaming Revenue
The Grand Emperor Hotel recorded approximately HK$80.7 million (2006: HK$71.7 million)
in non-gaming revenue, which comprised mainly of contributions from hotel rooms, food and
beverage, as well as rental income from sauna, night club and retail space operations on the
ground floor of the hotel.
According to Macau Government Documentation and Information Centre, the number of hotel
rooms had increased 27% year-on-year to 15,719 as of 30th September, 2007. Hotel rooms in
Macau recorded an average occupancy rate of approximately 72%.
Amid growing competition and increase in room supply, the Group managed to attract and
retain hotel guests with its top-class attentive service and high-end entertainment and lodging
facilities. The 291 hotel rooms at the Grand Emperor Hotel returned an average daily rate of
approximately HK$770 (2006: HK$700) during the Period. Occupancy rate of the available
guestrooms was 85% (2006: 81%).
Room revenue totaled approximately HK$40.0 million (2006: HK$34.9 million). Revenue
from food and beverage was approximately HK$33.3 million (2006: HK$29.6 million). Rental
revenue from sauna, night club and retail space operations was approximately HK$7.4 million
(2006: HK$7.3 million).
Property sales and development
This segment recorded no revenue during the Period, as its property project in Shanghai
remained under development. The project recorded a loss of approximately HK$2.1 million
(2006: HK$1.8 million).

17
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
OPERATION REVIEW (Continued)
Property sales and development (Continued)
Located in Yu Yuan, Shanghai, the property will be developed into a shopping arcade and
hotel/service apartment complex on a 22,870 square-metre prime site. The main body of the
complex will be a multi-storey shopping arcade, and the entire project is expected to have a
floor area of more than 110,000 square metres.
The new Shanghai M10 subway route – to be launched in 2009 – will be adjacent to the
subject site and there will be entrances and exits connecting to and from the commercial
complex. The Group had completed the foundation and basement excavation work for the
development during the Period, while basement construction is in progress.
Cruise and cruise-related operations
Revenue from this segment came from the rental and operation of cruise-related activities of
Golden Princess, a 12,704-ton cruise liner which provides entertainment, gaming and
accommodation facilities of up to 570 guests.
From its cruise and cruise-related operations, the Group received revenue of approximately
HK$16.3 million (2006: HK$61.2 million) and recorded a loss of approximately HK$7.7
million (2006: profit of HK$15.2 million).
In June 2007, the Group discontinued its cruise and cruise-related operations after disposal of
subsidiaries, details of which are set out in the section headed “Disposal of Subsidiaries”
below. The management believed that the disposal would allow the Group to focus its resources
and efforts on the Macau hotel operation, a market with robust growth and potentials.
ACQUISITION OF ADDITIONAL INTEREST OF A SUBSIDIARY

On 12th June, 2007, Courage Wisdom Investments Limited, a wholly-owned subsidiary of the
Company, entered into a sale and purchase agreement with World Million Profits Limited
(“World Million”), a wholly-owned subsidiary of the substantial shareholder of the Company,
for acquisition of the remaining 10% interest in Nova Strategic Limited (“Nova Strategic”)
and its subsidiaries (collectively referred to as the “Nova Strategic Group”) and the entire
shareholder’s loan due from Nova Strategic to World Million (the “Acquisition”). The
Acquisition was completed on 20th August, 2007 and its aggregate consideration amounted to
approximately HK$171.7 million, out of which HK$170.8 million was satisfied by the allotment
and issue of 104,774,846 shares of the Company at an issue price of HK$1.63 per share and
the balance of HK$0.9 million was settled by way of cash payment. A goodwill of approximately
HK$36.8 million arose as a result of the Acquisition.
DISPOSAL OF SUBSIDIARIES

On 29th June, 2007, Lavergem Holdings Limited, a wholly-owned subsidiary of the Company,
disposed of the entire interest of the Quick Treasure Group and the entire shareholder’s loan
due to the Group by the Quick Treasure Group to a third party at a consideration of
approximately HK$129.0 million (the “Disposal”) and resulted in a gain of approximately
HK$1.1 million.

18
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
USE OF PROCEEDS

The net proceeds from the Disposal after expenses of HK$0.1 million amounting to
approximately HK$128.9 million had been fully utilised to expand the business of the Grand
Emperor Hotel which included the opening of the Group’s second self-managed VIP room in
May 2007.
CAPITAL STRUCTURE

In August 2007, the Company allotted and issued 104,774,846 shares of the Company at an
issue price of HK$1.63 per share for the Acquisition. As a result, the share capital and share
premium of the Company as at 30th September, 2007 were approximately HK$103,000 (as at
31st March, 2007: HK$93,000) and HK$170.8 million (as at 31st March, 2007: Nil) respectively.
LIQUIDITY AND FINANCIAL RESOURCES

During the Period, the Group mainly funded its operations and capital expenditure through its
internally generated cash flow from operations. As at 30th September, 2007, bank borrowings
which were denominated in Hong Kong dollars, secured, interest bearing and had fixed
repayment term amounted to approximately HK$232.7 million. Advances from related
companies totaling approximately HK$5.9 million were denominated in Hong Kong dollars,
unsecured and repayable on demand. Advances from the minority shareholders of approximately
HK$386.7 million were denominated in Hong Kong dollars, unsecured, interest-free and
repayable only when the subsidiaries have surplus fund.
The Group’s current assets and current liabilities as at the end of the Period were approximately
HK$900.9 million and HK$689.9 million respectively. The gearing ratio of the Group (expressed
as a percentage of total borrowings over total assets) decreased from 25% in the preceding
financial year to 19%, which was mainly due to repayment of bank borrowings and advances
from related companies and the minority shareholders during the Period.
Save as disclosed above and trade and other payables and accrued charges, the Group had no
other external borrowings. Bank balances and cash on hand of the Group as at 30th September,
2007 totaled approximately HK$259.2 million, which were mainly denominated in Hong
Kong dollars and Macau Pataca (“MOP”). With the borrowings and bank balances and cash on
hand denominated in Hong Kong dollars and Macau Pataca, the Group experienced no
significant exposure to foreign exchange rate fluctuation during the Period.
With its sufficient bank balances and cash on hand as well as its existing loan facility, the
Directors of the Company considered to have sufficient working capital for the operations and
the future development of the Group.
PLEDGE OF ASSETS

As at the end of the Period, certain assets with carrying values of approximately HK$1.5
billion were pledged to a bank as security for a banking facility granted to the Group.

19
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
COMMITMENTS AND CONTINGENCIES

The Group had capital commitments as at 30th September, 2007 was approximately HK$384.6
million, comprising HK$380.4 million for property development project in Shanghai and
HK$4.2 million for purchase of property, plant and equipment.
In October 2006, the Group commenced legal proceedings in the People’s Republic of China
(“PRC”) against the joint venture partner (“JV Partner”) in Shanghai, for termination of the
joint venture agreement (“JV Agreement”) in respect of the development of the Group’s
property in Shanghai (“Project”) as a result of the JV Partner’s failure to settle the outstanding
payment and construction costs in accordance with the terms of the JV Agreement. The Group
also claimed against the JV Partner for forfeiture of the JV Partner’s contribution to the
Project and further contribution by the JV Partner of outstanding payment and construction
costs totaling RMB83.6 million (equivalent to approximately HK$86.4 million). The JV Partner
contested the proceedings and counterclaimed against the Group for RMB100 million
(equivalent to approximately HK$103.3 million) as damages for breach of the JV Agreement.
The PRC lawyers representing the Group were of the view that the Group had prospects of
successful termination of the JV Agreement and defending against the counterclaim of the JV
Partner. Therefore, no provision was made by the Group.
In January 2007, the Group was sued jointly with its contractor for approximately for MOP
3.5 million (equivalent to approximately HK$3.4 million) for injuries suffered by a third party
in an accident happened in 2005 in the premises of the Grand Emperor Hotel when the hotel
was under renovation. The ultimate outcome of the case is not determinable at this stage. No
provision was made by the Group as the Group was of the view that the contractor and its
insurer should be responsible for paying any damages awarded to the plaintiff.
NUMBER AND REMUNERATION OF EMPLOYEES

As at 30th September, 2007, the Group’s number of employees was 981 as compared to 1,118
as at the end of the preceding financial year, mainly due to the disposal of cruise and cruise-
related operations in June 2007. Total staff costs including directors’ remuneration for the
Period were approximately HK$71.6 million (2006: HK$82.7 million). All employees are
under remuneration policy of fixed monthly salary with discretionary bonus.
To provide incentives or rewards to the staff, the Company adopted a share option scheme on
2nd September, 2002. During the Period, the Company did not grant any option under the
share option scheme and the outstanding share options as at the end of the Period was a total
of 10,000,000 share options granted to certain directors of the Company in previous years.
PROSPECTS

With the opening of the Grand Emperor Hotel in Macau in January 2006, the Group has
repositioned itself as a full-scale gaming conglomerate, enjoying significant contributions
from gaming and ancillary businesses.

20
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
PROSPECTS (Continued)
With the Group’s experience and well-received brand name – especially in the important
mainland China market – the Grand Emperor Hotel has managed to quickly establish a
significant presence in Macau. The hotel is well received by hotel guests as well as players in
its gaming areas. It continues to strengthen its position in the VIP gaming market in Macau.
The management expects the hotel to maintain an encouraging performance in an increasingly
competitive marketplace.
In relation to the Shanghai property development, the Group has appointed reputable
international consultants to handle leasing management and to revise the design of the shopping
arcade, with a view to improving pedestrian flow within the complex and thus maximising its
investment value.
The project, being located in an established tourist area of Shanghai, is expected to generate
stable rental revenue for the Group and enhance the Group’s balance sheet when it is transformed
into an investment property upon scheduled completion in 2009.
Looking ahead, the Group will closely monitor the performance of all its business segments to
maximise returns for its shareholders and investors. It will continue to look for expansion
possibilities with further utilisation of the Group’s execution strength and rich assets in the
entertainment industry.
CORPORATE GOVERNANCE

The Company had complied throughout the Period with the Code on Corporate Governance
Practice as set out in Appendix 14 of the Listing Rules, except that the non-executive Directors
of the Company were not appointed for specific terms, however, they are subject to retirement
and re-election at each annual general meeting in accordance with the Bye-laws of the Company.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES
During the Period, neither the Company nor any of its subsidiaries purchased, sold or redeemed
any of the Company’s listed securities.
By Order of the Board
Emperor Entertainment Hotel Limited
Luk Siu Man, Semon
Chairperson
Hong Kong, 18th December, 2007
As at the date hereof, the Board of the Company comprises 1. Chairperson: Ms. Luk Siu Man,
Semon, 2. Executive Directors: Mr. Wong Chi Fai, Ms. Fan Man Seung, Vanessa and Ms. Mok
Fung Lin, Ivy 3. Independent Non-executive Directors: Ms. Chan Sim Ling, Irene (Chairperson
of the audit committee), Ms. Chan Wiling, Yvonne and Ms. Wan Choi Ha.
for identification purposes only