Contents 2 Corporate Information 4 Financial Highlights Half Year Ended 30th June, 2009 Financial Results 5 Condensed Consolidated Statement of Compre

Stock Code 1212

Contents 2 Corporate Information 4 Financial Highlights Half Year Ended 30th June, 2009 Financial Results 5 Condensed Consolidated Statement of Comprehensive Income 6 Condensed Consolidated Statement of Financial Position 8 Condensed Consolidated Statement of Changes in Equity 9 Condensed Consolidated Statement of Cash Flows 10 Notes to the Condensed Consolidated Financial Statements 29 Independent Review Report 30 Interim Dividend 30 Closure of Register of Members 31 Financial Review 33 Review of Operations 37 Outlook and Plan 38 Interests of Directors and Chief Executives 41 Interests of Substantial Shareholders 43 Share Option Schemes 47 Details of Options Granted by the Company 50 Additional Information 52 Acknowledgement 01

Corporate Information BOARD OF DIRECTORS Executive Directors Mr. Lau Luen-hung, Thomas (Managing Director) Mr. Doo Wai-hoi, William Non-executive Directors Dató Dr. Cheng Yu-tung (Chairman) Dr. Cheng Kar-shun, Henry Mr. Lau Luen-hung, Joseph Ms. Lau Yuk-wai, Amy Independent Non-executive Directors Mr. Lam Siu-lun, Simon (ACA, FTIHK) Mr. Cheung Yuet-man, Raymond The Hon. Shek Lai-him, Abraham Mr. Hui Chiu-chung, Stephen (ACA, FTIHK) CHIEF FINANCIAL OFFICER Mr. Poon Fuk-chuen, Terry (CPA) (CPA) COMPANY SECRETARY Ms. Siu Po-sim, Katherine (ACS, ACIS) (ACS, ACIS) AUTHORISED REPRESENTATIVES Mr. Lau Luen-hung, Thomas Ms. Siu Po-sim, Katherine (ACS, ACIS) (ACS, ACIS) AUDIT COMMITTEE Mr. Lam Siu-lun, Simon (ACA, FTIHK) (Chairman of the Audit Committee) Mr. Cheung Yuet-man, Raymond The Hon. Shek Lai-him, Abraham Mr. Hui Chiu-chung, Stephen (ACA, FTIHK) REMUNERATION COMMITTEE Mr. Lau Luen-hung, Thomas (Chairman of the Remuneration Committee) Mr. Lam Siu-lun, Simon (ACA, FTIHK) The Hon. Shek Lai-him, Abraham Mr. Hui Chiu-chung, Stephen (ACA, FTIHK) REGISTERED OFFICE Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands 02 Lifestyle International Holdings Limited Interim Report 2009

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS 20th Floor, East Point Centre 555 Hennessy Road Causeway Bay Hong Kong 555 20 PRINCIPAL BANKER Bank of China (Hong Kong) Limited AUDITORS Deloitte Touche Tohmatsu SOLICITORS Richards Butler in association with Reed Smith LLP Sit, Fung, Kwong & Shum HONG KONG SHARE REGISTRAR AND TRANSFER OFFICE (BRANCH REGISTRAR) Computershare Hong Kong Investor Services Limited Rooms 1712-1716, 17th Floor, Hopewell Centre 183 Queen s Road East, Wanchai, Hong Kong 183 17 1712-1716 CAYMAN ISLANDS SHARE REGISTRAR AND TRANSFER OFFICE (REGISTRAR) Butterfield Fulcrum Group (Cayman) Limited Butterfield House 68 Fort Street, P.O. Box 609 Grand Cayman KY1-1107 Cayman Islands Butterfield Fulcrum Group (Cayman) Limited Butterfield House 68 Fort Street, P.O. Box 609 Grand Cayman KY1-1107 Cayman Islands SHARE INFORMATION Place of listing: Main Board of The Stock Exchange of Hong Kong Limited Stock code: 1212 Board lot: 500 shares Financial year end: 31st December Share price at 30th June, 2009: HK$10.76 Market capitalization at 30th June, 2009: HK$17,882 million 1212 500 10.76 178.82 WEBSITE ADDRESS www.lifestylehk.com.hk www.lifestylehk.com.hk 03

Financial Highlights Half Year Ended 30th June, 2009 Turnover amounted to HK$1,739.8 million, up 2.5% 1,739,800,0002.5% Profit for the period dropped 6.8% if the fair-value gain on investment properties after tax recorded last year was excluded 6.8% Profit for the period attributable to owners down 26.8% to HK$443.7 million 26.8% 443,700,000 Earnings per share decreased 25.1% to HK cents 26.6 25.1% 26.6 Interim dividend of HK cents 11.0 per share 11.0 04 Lifestyle International Holdings Limited Interim Report 2009

Financial Results The Board of Directors (the Board ) of Lifestyle International Holdings Limited (the Company ) is pleased to announce the unaudited consolidated results for the six months ended 30th June, 2009 of the Company and its subsidiaries (collectively, the Group ), together with comparative figures for the previous period, as follows: Condensed Consolidated Statement of Comprehensive Income For the six months ended 30th June, 2009 Six months ended 30th June, 2009 2008 NOTES HK$ 000 HK$ 000 (Unaudited) (Unaudited) Turnover 3 1,739,764 1,696,982 Cost of sales 4 (756,314) (744,751) Gross profit 983,450 952,231 Other operating income 71,576 33,446 Selling and distribution costs (386,756) (312,996) Administrative expenses (112,809) (111,339) Investment income 5 22,147 81,196 Fair value changes on investment properties 173,746 Share of profit of a jointly controlled entity 7,070 5,008 Share of profits of associates 18,026 133 Finance costs 6 (19,304) (44,780) Profit before taxation 7 583,400 776,645 Taxation 8 (114,430) (153,870) Profit for the period 468,970 622,775 Other comprehensive income Exchange difference arising on translation of foreign operation 33,945 42,278 Change in fair value for available-for-sale investments (12,675) Transfer to profit or loss on sale of available-for-sale investments 12,675 Transfer of properties to investment properties: surplus on revaluation 159,948 deferred tax relating to revaluation surplus (39,987) 153,906 42,278 Total comprehensive income for the period 622,876 665,053 Profit for the period attributable to: Owners of the Company 443,710 606,253 Minority interests 25,260 16,522 468,970 622,775 Total comprehensive income attributable to: Owners of the Company 599,231 641,547 Minority interests 23,645 23,506 622,876 665,053 Earnings per share 10 basic HK$0.266 HK$0.355 diluted HK$0.265 HK$0.353 05

FINANCIAL RESULTS Condensed Consolidated Statement of Financial Position At 30th June, 2009 30th June, 31st December, 2009 2008 NOTES HK$ 000 HK$ 000 (Unaudited) (Audited) Non-current assets Investment properties 11 812,373 363,940 Property, plant and equipment 12 3,703,357 3,890,636 Prepaid lease payments 1,414,365 1,306,558 Deposit paid for prepaid lease payments and acquisition of property, plant and equipment 3,038 12,496 Interests in associates 13 1,147,499 1,123,805 Interest in a jointly controlled entity 497,578 488,554 Deferred tax assets 398 1,855 Available-for-sale investments 14 15,500 28,175 Financial assets designated at fair value through profit or loss 15 342,412 Club debenture 1,350 1,350 7,595,458 7,559,781 Current assets Inventories 73,845 62,582 Prepaid lease payments 9,979 7,074 Trade and other receivables 17 177,517 142,027 Amount due from a jointly controlled entity 94,006 24,146 Held for trading investments 18 210,361 68,447 Loans receivable 16 238,718 258,718 Bank balances and cash 2,312,238 2,439,443 3,116,664 3,002,437 Current liabilities Trade and other payables 19 1,171,524 1,448,312 Tax payable 132,990 89,350 Bank borrowings due within one year 609,600 592,100 1,914,114 2,129,762 Net current assets 1,202,550 872,675 8,798,008 8,432,456 06 Lifestyle International Holdings Limited Interim Report 2009

Condensed Consolidated Statement of Financial Position (Continued) At 30th June, 2009 ( ) 30th June, 31st December, 2009 2008 NOTES HK$ 000 HK$ 000 (Unaudited) (Audited) Non-current liabilities Bank borrowings due after one year 2,394,600 2,426,000 Deferred tax liabilities 119,295 73,144 Other payable 60,000 60,000 Loan from minority interests 3,445 18,329 2,577,340 2,577,473 6,220,668 5,854,983 Capital and reserves Share capital 20 8,310 8,370 Reserves 5,511,442 5,169,342 Equity attributable to owners of the Company 5,519,752 5,177,712 Minority interests 700,916 677,271 6,220,668 5,854,983 07

FINANCIAL RESULTS Condensed Consolidated Statement of Changes in Equity For the six months ended 30th June, 2009 Attributable to owners of the Company Capital Asset Share-based Share Share redemption revaluation Exchange payment Investment Retained Minority capital premium reserve reserve reserve reserve reserve profits Total interests Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1st January, 2008 8,525 2,913,222 3,680 90,995 36,995 1,603,301 4,656,718 560,962 5,217,680 Exchange differences arising on translation of foreign operations 35,294 35,294 6,984 42,278 Profit for the period 606,253 606,253 16,522 622,775 Total comprehensive income for the period 35,294 606,253 641,547 23,506 665,053 Release upon disposal of a subsidiary (1,328) (1,328) (885) (2,213) Reduction on minority interests upon equity interest swap (9,274) (9,274) Recognition of equity-settled share-based payments 51,241 51,241 51,241 Exercise of share options 8 9,972 9,980 9,980 Dividend paid (230,370) (230,370) (230,370) At 30th June, 2008 8,533 2,692,824 3,680 124,961 88,236 2,209,554 5,127,788 574,309 5,702,097 Exchange differences arising on translation of foreign operations 87,654 87,654 7,882 95,536 Change in fair value for available-for-sale investments (3,538) (3,538) (3,538) Transfer to profit or loss on impairment of available-for-sale investments 3,538 3,538 3,538 Profit for the period 320,973 320,973 115,398 436,371 Total comprehensive income for the period 87,654 320,973 408,627 123,280 531,907 Recognition of equity-settled share-based payments 39,740 39,740 39,740 Share repurchase repurchase of shares (166) (166) (166) premium on repurchase of shares (196,270) (196,270) (196,270) transfer 166 (166) Exercise and lapse of share options 3 5,795 (4,528) 1,539 2,809 2,809 Dividend paid to minority interests (20,318) (20,318) Dividend paid (204,816) (204,816) (204,816) At 31st December, 2008 8,370 2,297,533 166 3,680 212,615 123,448 2,531,900 5,177,712 677,271 5,854,983 Exchange differences arising on translation of foreign operations 35,560 35,560 (1,615) 33,945 Transfer of properties to investment properties surplus on revaluation 159,948 159,948 159,948 deferred tax relating to revaluation surplus (39,987) (39,987) (39,987) Change in fair value for available-for-sale investments (12,675) (12,675) (12,675) Transfer to profit or loss on sale of available-for-sale investments 12,675 12,675 12,675 Profit for the period 443,710 443,710 25,260 468,970 Total comprehensive income for the period 119,961 35,560 443,710 599,231 23,645 622,876 Recognition of equity-settled share-based payments 31,305 31,305 31,305 Share repurchase repurchase of shares (62) (62) (62) premium on repurchase of shares (90,937) (90,937) (90,937) transfer 62 (62) Exercise and lapse of share options 2 3,065 (4,903) 4,337 2,501 2,501 Dividend paid (199,998) (199,998) (199,998) At 30th June, 2009 8,310 2,009,663 228 123,641 248,175 149,850 2,979,885 5,519,752 700,916 6,220,668 08 Lifestyle International Holdings Limited Interim Report 2009

Condensed Consolidated Statement of Cash Flows For the six months ended 30th June, 2009 Six months ended 30th June, 2009 2008 NOTE HK$ 000 HK$ 000 (Unaudited) (Unaudited) Net cash from operating activities 307,268 428,977 Net cash from (used in) investing activities Purchase of index-linked notes (195,000) Purchase of held for trading investments (260,284) (172,139) Purchase of property, plant and equipment (246,929) (233,921) Purchase of investment properties (1,418) (1,328) Deposit for prepaid lease payments and acquisition of property, plant and equipment (11,497) Proceeds from redemption of index-linked notes and equity-linked notes 339,616 38,997 Proceeds on disposal of held for trading investments 137,497 125,415 (Increase) decrease in amount due from a jointly controlled entity (69,647) 44,599 Interest received from index-linked notes and equity-linked notes 10,063 Interest received from held for trading investments 2,747 Dividend received from available-for-sale investments/held for trading investments 3,101 1,950 Interest received from derivative investment 3,067 Acquisition of assets (net of cash and cash equivalents acquired) 23 (689,861) Acquisition of a subsidiary (net of cash and cash equivalents acquired) in prior year (153,548) Increase in loan receivables (32,000) Other investing cash flows (714) (169) (96,031 ) (1,265,372 ) Net cash used in financing activities Proceeds from issue of shares 2,501 9,980 New bank borrowings raised 216,600 101,200 Repayments of bank borrowings (234,200) (251,200) (Repayment to) loan from a minority shareholder of a subsidiary (14,884) 18,329 Dividends paid (199,998) (230,370) Repurchase of shares (90,999) Other financing cash flows (22,146) (58,490) (343,126 ) (410,551 ) Net decrease in cash and cash equivalents (131,889) (1,246,946) Effect of foreign exchange rate difference 4,684 13,345 Cash and cash equivalents at beginning of the period 2,439,443 3,604,956 Cash and cash equivalents at end of the period, representing bank balances and cash 2,312,238 2,371,355 09

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements For the six months ended 30th June, 2009 1. Basis of preparation The condensed consolidated financial statements have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and with Hong Kong Accounting Standard 34 (HKAS 34) Interim Financial Reporting. 1. 16 34 2. Principal accounting policies The condensed consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments, which are measured at revalued amounts or fair values, as appropriate. 2. The accounting policies used in the condensed consolidated financial statements are consistent with those followed in the preparation of the Group s annual financial statements for the year ended 31st December, 2008. In the current interim period, the Group has applied, for the first time, a number of new and revised standards, amendments and interpretations ( new and revised HKFRSs ) issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ), which are effective for the Group s financial year beginning on 1st January, 2009. Presentation of financial statements HKAS 1 (Revised 2007) has introduced a number of terminology changes, including revised titles for the condensed consolidated financial statements, and has resulted in a number of changes in presentation and disclosure. HKFRS 8 is a disclosure Standard that requires the identification of operating segments to be performed on the same basis as financial information that is reported internally for the purpose of allocating resources between segments and assessing their performance. The predecessor Standard, HKAS 14 Segment Reporting, required the identification of two sets of segments (business and geographical) using a risks and returns approach. In the past, geographical segments by location of the Group s assets that is also the location of the Group s operations, are the basis on which the Group reports its primary segment information. The application of HKFRS 8 has not resulted in a redesignation of the Group s reportable segments as compared with the primary reportable segments determined in accordance with HKAS 14 (see note 3). The adoption of the new and revised HKFRSs has had no material effect on the reported results and financial position of the Group for the current or prior accounting periods. Accordingly, no prior period adjustment has been recognised. 1 8 14 14 3 8 10 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 2. Principal accounting policies (Continued) The Group has not early applied the following new or revised standards, amendments or interpretations that have been issued but are not yet effective: ( ) 2. ( ) HKFRSs (Amendments) Amendment to HKFRS 5 as part of improvements to HKFRSs issued in 2008 1 HKFRSs (Amendments) Improvements to HKFRSs issued in 2009 2 HKAS 27 (Revised in 2008) Consolidated and separate financial statements 1 HKAS 39 (Amendment) Eligible hedged items 1 HKFRS 2 (Amendment) Group cash-settled share based payments transactions 3 HKFRS 3 (Revised in 2008) Business combinations 1 HK(IFRIC) Int 17 Distributions of non-cash assets to owners 1 HK(IFRIC) Int 18 Transfers of assets from customers 4 5 1 27 1 39 1 2 1 3 1 17 18 1 Effective for annual periods beginning on or after 1st July, 2009. 2 Amendments that are effective for annual periods beginning on or after 1st July, 2009 or 1st January, 2010, as appropriate. 3 Effective for annual periods beginning on or after 1st January, 2010. 4 Effective for transfers on or after 1st July, 2009. 1 2 3 4 11

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 2. Principal accounting policies (Continued) The adoption of HKFRS 3 (Revised 2008) may affect the Group s accounting for business combinations for which the acquisition dates are on or after the beginning of the first annual reporting period beginning on or after 1st July, 2009. HKAS 27 (Revised 2008) will affect the accounting treatment for changes in the Group s ownership interest in a subsidiary that do not result in loss of control of the subsidiary. Changes in the Group s ownership interest that do not result in loss of control of the subsidiary will be accounted for as equity transactions. The directors of the Company anticipate that the application of other new and revised standards, amendments or interpretations will have no material impact on the results and the financial position of the Group. ( ) 2. ( ) 3 27 3. Turnover and segment information Turnover represents the amount received and receivable for goods sold by the Group to customers, net of discounts and sales related taxes, income from concessionaire sales, services income and rental income and is analysed as follows: 3. Six months ended 30th June, 2009 2008 HK$ 000 HK$ 000 Sales of goods direct sales 1,027,543 1,011,117 Income from concessionaire sales 643,198 607,373 Rental income 30,223 39,689 Services income 38,800 38,803 1,739,764 1,696,982 The Group has adopted HKFRS 8 Operating segments with effect from 1st January, 2009, resulted in changes as set out in note 2. HKFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Group s chief operating decision maker in order to allocate resources to the segment and to assess its performance. The chief operating decision maker of the Group has been identified as the Managing Director. 8 28 The Group has two operating segments geographically, Hong Kong and the People s Republic of China ( PRC ) which are managed separately. The Group determines its operating segments based on the internal reports reviewed by the Managing Director that are used to make strategic decisions. 12 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 3. Turnover and segment information (Continued) Segment results represent the profit for the period in each operating segment. This is the measure reported to the Group s Managing Director for the purpose of resource allocation and assessment of segment performance. ( ) 3. ( ) An analysis of the Group s turnover and results by operating segments is as follows: For the six months ended 30th June, 2009 Consolidated Hong Kong PRC total HK$ 000 HK$ 000 HK$ 000 Turnover External sales 1,409,639 330,125 1,739,764 Result Segment results and profit for the period 442,014 26,956 468,970 For the six months ended 30th June, 2008 Consolidated Hong Kong PRC total HK$ 000 HK$ 000 HK$ 000 Turnover External sales 1,422,758 274,224 1,696,982 Result Segment results and profit for the period 444,046 178,729 622,775 13

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 4. Cost of sales ( ) 4. Six months ended 30th June, 2009 2008 HK$ 000 HK$ 000 The cost of sales is analysed as follows: Cost of goods sold 730,027 719,699 Other cost of sales 26,287 25,052 756,314 744,751 5. Investment income 5. Six months ended 30th June, 2009 2008 HK$ 000 HK$ 000 Interest income on bank deposits 6,669 32,392 Interest income on loan receivables 5,917 16,794 Other interest income 57 571 Dividend income Available-for-sale investments 1,550 1,950 Held for trading investments 1,551 Impairment loss on available-for-sale investments (12,675) (1,853) Change in fair value of financial assets Financial assets designated at fair value through profit or loss (2,796) 8,525 Held for trading investments 21,874 28,834 Derivative instrument (6,017) 22,147 81,196 14 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 6. Finance costs ( ) 6. Six months ended 30th June, 2009 2008 HK$ 000 HK$ 000 Interest on bank borrowings wholly repayable within five years 21,490 57,838 Others 656 652 22,146 58,490 Less: Amount capitalised (2,842) (13,710) 19,304 44,780 7. Profit Before taxation 7. Six months ended 30th June, 2009 2008 HK$ 000 HK$ 000 Profit before taxation has been arrived at after charging: Depreciation 100,500 69,204 Equity-settled share-based payment expense 31,305 51,241 Loss on disposal of property, plant and equipment 65 and after crediting: Gain on disposal of property, plant and equipment 69 15

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 8. Taxation ( ) 8. Six months ended 30th June, HK$ 000 2009 2008 HK$ 000 The charge comprises: Hong Kong Profits Tax Current period 81,078 92,337 Underprovision in prior year 93 PRC Enterprise Income Tax 25,731 19,380 106,809 111,810 Deferred tax charge (credit) Current period 7,621 43,275 Attributable to change in tax rate (1,215) 114,430 153,870 Hong Kong Profits Tax is provided at 16.5% (six months ended 30th June, 2008: 16.5%) of the estimated assessable profit for the period. PRC Enterprise Income Tax is provided at 25% (six months ended 30th June, 2008: 25%) on the estimated assessable profit for the period. At 30th June, 2008, the Group had unrecognised deferred tax liability of approximately HK$5,946,000 in relation to withholding tax on undistributed earnings of approximately HK$59,457,000 arising during the period from 1st January, 2008 to 30th June, 2008 of the subsidiary in the PRC, which is held by a company incorporated in the British Virgin Islands. 9. Dividends During the period, a dividend of HK cents 12.0 (six months ended 30th June, 2008: HK cents 13.5) per share was paid to shareholders as the final dividend for the year ended 31st December, 2008 (six months ended 30th June, 2008: year ended 31st December, 2007). The Board have declared an interim dividend, for the six months ended 30th June, 2009, of HK cents 11.0 (2008: HK cents 12.0) in cash per share. The said interim dividend will be payable on or about 15th September, 2009 to shareholders whose names appear on the Register of Members of the Company on 11th September, 2009. 16.5% 16.5% 25% 25% 59,457,000 5,946,000 9. 12.0 13.5 11.0 12.0 16 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 10. Earnings per share The calculation of the basic and diluted earnings per share attributable to the owners of the Company for the six months ended 30th June, 2009 and 2008 is based on the following data: ( ) 10. 2009 2008 HK$ 000 HK$ 000 Earnings Profit for the period attributable to owners of the Company for the purpose of basic and diluted earnings per share 443,710 606,253 2009 2008 000 000 Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share 1,666,695 1,706,337 Effect of dilutive potential ordinary shares issuable under the Company s share option scheme 5,514 9,133 Weighted average number of ordinary shares for the purpose of diluted earnings per share 1,672,209 1,715,470 11. Investment properties 11. 30th June, 2009 HK$ 000 Fair value at 1st January 363,940 Additions 1,418 Investment properties recovered from loans receivable (note 16) 16 38,180 Transfer from property, plant and equipment and prepaid lease payments 405,953 Exchange adjustment 2,882 Fair value at 30th June 812,373 17

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 11. Investment properties (Continued) The carrying amount of investment properties shown above comprises: ( ) 11. ( ) 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Land in Hong Kong held under medium lease 39,598 Land in the PRC held under medium lease 772,775 363,940 812,373 363,940 At 30th June, 2009, the directors estimated the carrying amount of the investment properties did not differ significantly from that which would be determined using fair values at the date of condensed consolidated statement of financial position. Consequently, no fair value gain or loss has been recognised in the current period (six month ended 30th June, 2008: increase in fair value HK$169,630,000). During the period ended 30th June, 2008, an amount of HK$4,116,000 was recognised as fair value gain on investment properties relating to investment properties classified as assets held for sales. 169,630,000 4,116,000 12. Property, plant and equipment 12. Six months ended 30th June, 2009 HK$ 000 Carrying value at 1st January 3,890,636 Additions 259,229 Transfer to investment properties (167,282) Reclassified to prepaid lease payments (194,222) Disposals (66) Depreciation (100,500) Exchange adjustment 15,562 Carrying value at 30th June 3,703,357 13. Interests in associates 13. 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Cost of investment in associates, unlisted 1,120,173 1,119,600 Share of post-acquisition profits and reserves 27,326 4,205 1,147,499 1,123,805 18 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 13. Interests in associates (Continued) As at 30th June, 2009 and 31st December, 2008, the Group had interests in the following associates: ( ) 13. ( ) Proportion of Place/ nominal value Form of country of Principal of issued capital/ Proportion business incorporation/ place of registered capital of voting Name of entity structure registration operation held by the Group power held Principal activity 30th 31st 30th 31st June, December, June, December, 2009 2008 2009 2008 Incorporation PRC PRC 30% 30% 30% 30% Investment holding of a group of ( Beiren Group ) companies engaging in operation of department stores, supermarkets, (Note 1) electrical appliances malls and 1 property leasing Incorporation PRC PRC 48% 48% 48% 48% Retailing businesses (formerly known as ) ( Kaiyuan Square ) (Note 2) 2 Dragon Sign Limited Incorporation Hong Kong PRC 50% 50% Investment holding of a company engaged in operation of restaurants in the PRC Notes: 1. The Group holds equity interest of 30% in Beiren Group indirectly through a 60% owned subsidiary, (Hebei Xuyuan Trading Company Limited). 2. The Group holds equity interest of 48% in Kaiyuan Square indirectly through a 60% owned subsidiary, Wingold Limited. At 30th June, 2009 and 31st December, 2008, Kaiyuan Square was also owned as to 51% by the Beiren Group. 1. 60% 30% 2. 60% 48% 51% 19

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 14. Available-for-sale investments Available-for-sale investments comprise of an unlisted equity securities issued by a mutual fund company incorporated in Bermuda. The investment is denominated in United States Dollars ( USD ) and its fair value is based on price quoted by the counterparty financial institution. During the period, an impairment loss of HK$12,675,000 (six months ended 30th June, 2008: HK$1,853,000) has been recognised in condensed consolidated statement of comprehensive income. ( ) 14. 12,675,000 1,853,000 15. Financial assets designated at fair value through profit or loss Financial assets designated at fair value through profit or loss refer to the index-linked notes. 15. At 31st December, 2008, the index-linked notes are denominated in USD with principal amount of USD45,000,000. The obligations of interest accrual depends on the difference between the USD 10-Year Constant Maturity Swap ( CMS ) Rate and the USD 30-Year CMS Rate. The issuer has options to redeem the notes before maturity or at maturity, settled at the principal amount plus any accrued and unpaid interest. Accrued interests are paid at fixed intervals on a quarterly basis. The index-linked notes are designated as financial assets at fair value through profit or loss upon initial recognition as they contain one or more embedded derivatives. 45,000,000 During the period ended 30th June, 2009, the Group disposed all of the index-linked notes with a carrying value of HK$342,412,000 (period ended 30th June, 2008: nil) resulting in a loss of USD361,000 (equivalent to approximately HK$2,796,000) which had been recognised in the condensed consolidated statement of comprehensive income for the period. 342,412,000 361,000 2,796,000 16. Loans receivable Loans receivable comprises: 16. 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Current asset: Loan extended in relation to a project in Shenyang (note a) a 238,718 238,718 Loan to EganaGoldpfeil (Holdings) Limited ( Egana ) (note b) b 20,000 Total 238,718 258,718 20 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 16. Loans receivable (Continued) Notes: ( ) 16. ( ) (a) The loan represents the amount drawn down and remained outstanding as at 30th June, 2009 from the HK$250 million facility the Company granted to a third party group of companies ( Borrower Group ) who is in the process of taking over a retail property project in the PRC. The loan is secured by the shares in certain companies of the Borrower Group and guaranteed by a third party individual. The loan bears interest at the Hong Kong prime rate and is repayable after 18 months from the loan agreement date on 6th November, 2006. In connection with this loan facility, a fellow subsidiary of the Company was granted an option from this Borrower Group to acquire certain interests in the retail property project which the Borrower Group is contemplating. The repayment date of the loan was extended to 30th September, 2009 according to supplemental agreement entered into between the borrower and the Company on 17th July, 2009. As at 30th June, 2009, the fair value of the option is not material. (a) 250,000,000 18 (b) On 24th September, 2007, the Group granted a bridging loan of HK$300 million (the Bridging Loan ) to Egana (together with its subsidiaries the Egana Group ) in connection with the Group s participation in the financial restructuring of the Egana. The Bridging Loan bears interest at 2% above the Hong Kong prime rate offered by The Hong Kong and Shanghai Banking Corporation and is secured by a charge over all equity interests in a wholly-owned subsidiary of Egana that owns a brand, a charge over certain office premises of the Egana in Hong Kong and a charge over 434,345,736 shares of HK$1.00 each in the capital of Egana, representing approximately 29.67% of the issued share capital held by the major shareholder of Egana. (b) 300,000,000 2 434,345,736 1.00 29.67% On 26th September, 2008, the Bridging Loan became matured and no full repayment of the Bridging Loan was made by Egana. On 28th October, 2008, the Group filed a writ of summons to the High Court of the Hong Kong Special Administrative Region to demand Egana for repayment of the Bridging Loan. Egana subsequently made partial repayment of the principle amount in the sum of HK$3,385,000 to the Group and as a result the outstanding principle amount of the Bridging Loan was reduced to HK$296,615,000 (the Remaining Loan ). On 31st October 2008, the Group served a statutory demand on Egana to require repayment of the Remaining Loan plus interest within 21 days failing which the Group may proceed under the provisions of the Companies Ordinance to taking further legal actions against Egana. 3,385,000 296,615,000 21 At 31st December, 2008, the directors of the Company considered that the likelihood of full recovery of the Remaining Loan is remote and that a provision for impairment of the Remaining Loan is required in the consolidated financial statements for the year ended 31st December, 2008. At 31st December, 2008, the recoverable amount of the Remaining Loan is ascertained to be the fair value of the pledged office premises which was estimated to be HK$20,000,000. 20,000,000 During the period ended 30th June, 2009, the Group obtained the legal title of the pledged office premises from Egana. The pledged office premises had been assessed with the valuation of HK$38,180,000 at the relevant date. Accordingly, HK$18,180,000 of impairment loss on loan receivable was reversed and recognised as income in the condensed consolidated statement of comprehensive income. 38,180,000 18,180,000 21

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 17. Trade and other receivables ( ) 17. 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Trade receivables 41,068 53,985 Other receivables, deposits and prepayments 136,449 88,042 Total trade and other receivables 177,517 142,027 The Group s retail sales to customers are mainly on cash basis, either in cash, debit card or credit card payments. The Group does not have a defined fixed credit policy as its major trade receivables arise from credit card sales. An aged analysis of the Group s trade receivables at the end of the reporting period is as follows: 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 0 30 days 030 36,902 42,470 31 60 days 3160 1,920 10,559 61 90 days 6190 1,335 672 Over 90 days 90 911 284 41,068 53,985 18. Held for trading investments 18. 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Unlisted debt securities at fair value 210,361 68,447 22 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 19. Trade and other payables ( ) 19. 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Trade payables 151,281 217,871 Concessionaire sales payable 504,159 668,387 Other payables, deposits and accrued charges 516,084 562,054 Total trade and other payables 1,171,524 1,448,312 An aged analysis of the Group s trade payables at the end of reporting period is as follows: 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 0 30 days 0 30 112,854 187,866 31 60 days 31 60 35,395 26,992 61 90 days 61 90 274 527 Over 90 days 90 2,758 2,486 151,281 217,871 The average credit period of trade payables and concessionaire sales payable is within 45 days. The Group has financial risk management policies in place to ensure that all payables are settled within the credit term. 20. Share capital 45 20. Number of shares Amount HK$ 000 Ordinary shares of HK$0.005 each 0.005 Authorised: At 31st December, 2008 and 30th June, 2009 4,000,000,000 20,000 Issued and fully paid: At 1st January, 2009 1,673,965,500 8,370 Exercise of share options (note a) a 406,000 2 Share repurchased (note b) b (12,456,500) (62) At 30th June, 2009 1,661,915,000 8,310 23

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 20. Share capital (Continued) Notes: ( ) 20. ( ) (a) During the period, 406,000 shares of HK$0.005 each were issued at HK$6.16 per share upon exercise of the share option of the Company under the option type of 2005 by share option holders and all these shares rank pari passu with other ordinary shares of the Company in all respects. (a) 6.16406,000 0.005 (b) During the period, 12,456,500 shares of HK$0.005 each were repurchased at total consideration of HK$90,999,000. The price of repurchase was ranging from HK$6.02 to HK$9.02 for each share. (b) 12,456,5000.005 90,999,000 6.029.02 21. Share-based payment transactions The Company has share option schemes for eligible employees and director of the Company. Details of specific categories of options are as follows: 21. Option type Date of grant Vesting period Exercise period Exercise price HK$ 2005 7.10.2005 7.10.2005 7.10.2006 6.16 7.10.2008 26.3.2014 6.16 2006 16.3.2006 16.3.2006 16.3.2007 6.37 16.3.2009 26.3.2014 6.37 2007A 31.8.2007 31.8.2007 1.10.2009 18.50 1.10.2011 26.3.2014 18.50 2007B 31.8.2007 31.8.2007 1.10.2008 18.50 1.10.2010 26.3.2014 18.50 2007C 31.8.2007 31.8.2007 1.10.2008 18.50 1.10.2010 26.3.2014 (note 1) 18.50 1 2009 2.2.2009 2.2.2009 7.2.2010 6.40 7.2.2012 26.3.2014 (note 2) 6.40 2 Notes: 1. Option subject to approval by independent shareholders was proposed and granted by the Board of Directors on 31st August, 2007. The approval was subsequently obtained on 25th September, 2007 which is the date of grant as defined in accordance with HKFRS 2. 2. Option subject to approval of independent shareholders was proposed and granted by the Board of Directors on 2nd February, 2009. The approval was subsequently obtained on 3rd March, 2009 which is the date of grant as defined in accordance with HKFRS 2. 1. 2 2. 2 24 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 21. Share-based payment transactions (Continued) The following table discloses movements of the Company s share options held by certain employees and a director: ( ) 21. ( ) 2009 Outstanding at Outstanding at 31st December, 30th June, 2008 Granted Exercised Lapsed Cancelled 2009 during during during during period period period period Option type (note) (note) 2005 4,627,000 (406,000) (382,000) 3,839,000 2006 9,156,000 9,156,000 2007A 11,240,000 (170,000) (11,070,000) 2007B 10,280,000 (950,000) (9,330,000) 2007C 17,020,000 17,020,000 2009 20,400,000 (120,000) 20,280,000 Total 52,323,000 20,400,000 (406,000 ) (1,622,000 ) (20,400,000 ) 50,295,000 Exercisable at end of the period 19,803,000 HK$ HK$ HK$ HK$ HK$ HK$ Weighted average exercise price per share 15.29 6.40 6.16 14.70 18.50 10.47 The Group recognised an expense in the condensed consolidated statement of comprehensive income of approximately HK$31.3 million (six months ended 30th June, 2008: HK$51.2 million) for the period ended 30th June, 2009 in relation to the share options granted and cancelled by the Company. 31,300,000 51,200,000 Note: During the period ended 30th June, 2009, 20,400,000 share options were newly granted as replacement for the cancelled share options under option types of 2007A and 2007B and this is accounted for as a modification of the original share options. 20,400,000 25

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 22. Capital and other commitments ( ) 22. Capital expenditure in respect of the acquisition of property, plant and equipment 30th June, 31st December, 2009 2008 HK$ 000 HK$ 000 Authorised but not contracted for 2,944,300 2,978,900 Contracted for but not provided in the condensed consolidated financial statements 372,100 378,400 3,316,400 3,357,300 23. Acquisition of assets In 2008, the Group has acquired 100% interest in each of * ( Dalian Co ), * ( Qingdao Co ), ( Tianjin Co ), and * ( Haerbin Co ) (collectively referred to as Itokin Companies ) from Itokin Co., Ltd., an independent third party, for a consideration of HK$743,467,000. Major assets of the Itokin Companies are land and building situated in PRC and as such the acquisitions have been accounted for as acquisitions of assets rather than businesses. 23. Itokin Co., Ltd. * * * 743,467,000 *, and were subsequently renamed as, and respectively. * 26 Lifestyle International Holdings Limited Interim Report 2009

Notes to the Condensed Consolidated Financial Statements (Continued) 23. Acquisition of assets (Continued) The net assets of Itokin Companies acquired in these transactions are as follows: ( ) 23. ( ) Itokin Companies HK$ 000 Property, plant and equipment 438,137 Prepaid lease payments 150,435 Investment properties 182,103 Other receivables 2,006 Bank balances and cash 35,489 Trade and other payables (61,403) Short-term loan (3,300) 743,467 Satisfied by: Cash consideration 725,350 Other payable 18,117 743,467 Net cash outflow arising on acquisition: Cash consideration paid 725,350 Bank balances and cash acquired (35,489) 689,861 27

FINANCIAL RESULTS Notes to the Condensed Consolidated Financial Statements (Continued) 24. Related party balances and transactions During the period, the Group had entered into the following significant transactions with the following related parties: ( ) 24. Six months ended 30th June, Name of related party Nature of transaction 2009 2008 HK$ 000 HK$ 000 Chow Tai Fook Jewellery Co., Ltd. Income from concessionaire sales 5,130 5,816 ( CTF Jewellery ) (note 1) 1 () Income from concessionaire sales 1,419 1,682 () (note 1) 1 Hong Kong Island Development Rental, vetting fee, air-conditioning 22,557 21,049 Limited ( HK Island ) charges and management fee paid (note 1) 1 Pollution & Protection Services Cleaning service (note 1) 1,895 6,490 Limited ( PPS ) 1 Shanghai Joinbuy City Plaza Rental and management fee paid 89,020 85,262 Co., Ltd. ( Property JV ) (note 2) 2 Notes: 1. CTF Jewellery,, HK Island and PPS are companies in which Dató Dr. Cheng Yu-tung and Dr. Cheng Kar-shun, Henry, directors of the Company, have beneficial interests. 2. Property JV is a jointly controlled entity in which the Group has 50% interest. 3. At 30th June, 2009, concessionaire sales payable included amounts of approximately HK$4,199,000 and HK$4,239,000 (31st December, 2008: HK$19,087,000 and HK$3,434,000) aged within 30 days due to CTF Jewellery and respectively in which Dató Dr. Cheng Yu-tung and Dr. Cheng Kar-shun, Henry, directors of the Company, have beneficial interests. The amount was trading in nature and relate to payables arising from concessionaire sales. These trading balances are unsecured, non-interest bearing and repayable according to the terms of the concessionaire dealership agreement. 1. 2. 50% 3. 30 4,199,000 4,239,000 19,087,0003,434,000 28 Lifestyle International Holdings Limited Interim Report 2009

Independent Review Report TO THE BOARD OF DIRECTORS OF LIFESTYLE INTERNATIONAL HOLDINGS LIMITED (Incorporated in the Cayman Islands with limited liability) INTRODUCTION We have reviewed the interim financial information set out on pages 5 to 28, which comprises the condensed consolidated statement of financial position of Lifestyle International Holdings Limited as of 30th June, 2009 and the related condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six-month period then ended and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ). The directors are responsible for the preparation and presentation of this interim financial information in accordance with HKAS 34. Our responsibility is to express a conclusion on this interim financial information based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. 5 28 34 34 SCOPE OF REVIEW We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the HKICPA. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. 2410 CONCLUSION Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with HKAS 34. Deloitte Touche Tohmatsu Certified Public Accountants Hong Kong 10th August, 2009 34 29

Interim Dividend The Board have declared an interim dividend, for the six months ended 30th June, 2009, of HK cents 11.0 (2008: HK cents 12.0) in cash per share. The said interim dividend will be payable on or about Tuesday, 15th September, 2009 to shareholders whose names appear on the Register of Members of the Company at the close of business at 4:30 p.m. on Friday, 11th September, 2009. 11.0 12.0 Closure of Register of Members The Company s Register of Members will be closed from Wednesday, 9th September, 2009 to Friday, 11th September, 2009 (both dates inclusive), during the said period no transfer of shares will be registered. In order to qualify for the aforesaid interim dividend, all transfers of shares with relevant share certificates and transfer forms must be lodged with the Company s branch share registrar in Hong Kong (Computershare Hong Kong Investor Services Limited of Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong) for shares registration not later than 4:30 p.m. on Tuesday, 8th September, 2009. 18317 1712 1716 30 Lifestyle International Holdings Limited Interim Report 2009

Financial Review TURNOVER AND SALES PROCEEDS For the review period, the Group s turnover grew to HK$1,739.8 million, a 2.5% increase from HK$1,697 million recorded in the first half of 2008. The Group s net sales proceeds amounted to HK$3,836.4 million, a 4.7% increase from HK$3,664.7 million in the first half of 2008. The small growth in revenue for the Group during the period under review as a whole was the net result of the loss in revenue of the Hong Kong operations due to the difficult operating environment. But that was compensated by the sales growth of the Shanghai Jiuguang and additional sales revenues from the new Suzhou and Dalian Jiuguang stores. GROSS PROFIT AND GROSS MARGIN Gross profit margin as a percentage of net sales proceeds was 25.6% for the first half of 2009, compared with 26.0% for the same period in 2008. The slight drop was mainly a result of the lower margins from the two new stores. Gross profit rose to HK$983.5 million, up 3.3% from HK$952.2 million in 2008. Gross profit margin as a percentage of turnover was 56.5%, compared with 56.1% in 2008. Concessionaire commission rates remained stable at the stores and the average rate for the Group during the period was 22.51%, a slight 0.14 percentage point lower than same period last year. OPERATING PROFIT BEFORE TAXATION AND NET PROFIT During the period under review, the Group s operating profit before taxation, fair-value gain on investment properties and interest income/(expenses) and investment income amounted to HK$580.6 million, an increase of 2.5% from HK$566.5 million for the same period last year. The improvement demonstrated that the existing stores still enjoyed operating leverage and that cash depletion by two new stores opened earlier this year has not been significant. The Group s net profit attributable to owners for the period was HK$443.7 million, down 26.8% from HK$606.3 million recorded in the same period in 2008. The significant decrease in net profit was due mainly to the absence of a fair-value gain on investment properties which was recorded last year, the loss of interest/investment income as a result of the low interest environment and the first-time loss recorded for the two new stores during the review period. Net profit margin as a percentage of turnover dropped from 35.7% to 25.5% as a result. 1,739,800,000 1,697,000,000 2.5% 3,836,400,000 3,664,700,000 4.7% 25.6% 26.0% 983,500,000 952,200,000 3.3% 56.5% 56.1% 22.51% 0.14 580,600,000 566,500,000 2.5% 443,700,000 606,300,000 26.8% 35.7%25.5% FAIR VALUE CHANGES ON INVESTMENT PROPERTIES The amount last year represented the fair-value gain before tax arising from the Group s two retail properties in the PRC which were classified as investment properties following completion of the acquisition. During the period, the usage of the Group s Tianjin property was changed from property, plant and equipment to investment property and the surplus on revaluation before tax amounting to approximately HK$159.9 million has been included in the asset revaluation reserve and shown under other comprehensive income during the period. 159,900,000 31

FINANCIAL REVIEW FINANCE COSTS Finance costs of HK$19.3 million comprised mainly interest expenses for the Group s bank loans and other finance charges. The decrease in interest expense was mainly due to a lower interest rate environment comparing with the first half of 2008. During the period under review, a total of HK$2.8 million of interest charge has been capitalized as development costs in respect of the Shenyang project (2008: HK$13.7 million). The smaller amount of capitalized interest for this period was due to the Suzhou project ceasing to capitalize interest from the beginning of this year upon commencement of operation. 19,300,000 2,800,000 13,700,000 LIQUIDITY AND FINANCIAL RESOURCES The Group was at net debt position as at 30th June, 2009, with approximately HK$2,312.2 million of cash and bank balances, and approximately HK$3,004.2 million of bank loans. Gearing ratio (net debt as a percentage of owners equity) was 12.5% at 30th June, 2009 (31st December, 2008: 11.2%). The cash and bank balances, mostly in US dollar and Hong Kong dollar and accounting for approximately 71.7% of the Group s total cash and bank balances, were held mainly at banks in Hong Kong as short-term deposits for interest income. The remaining approximately 28.3% of the Group s cash and bank balances are denominated in RMB and deposited with banks in the PRC. The Group s bank loans included a Hong Kong dollar term loan of HK$2,400 million, repayable semi-annually, with the final repayment due in December 2011. This loan facility bears interest with reference to HIBOR. The remaining loan balance represents RMB working capital and project loans bearing interest calculated with reference to the PBOC lending rate. The Group has still a HK$1 billion committed un-drawn revolving loan facility available which will not expire until December 2011. 2,312,200,000 3,004,200,000 12.5% 11.2% 71.7% 28.3% 2,400,000,000 1,000,000,000 PLEDGE OF ASSETS As at 30th June, 2009, certain of the Group s land and buildings with book value of HK$1,752.9 million (31st December, 2008: HK$1,636 million), together with shares in certain subsidiaries of the Group, were pledged to a bank to secure a HK$4,000 million banking facilities granted to the Group of which HK$2,400 million was outstanding. 1,752,900,000 1,636,000,000 4,000,000,000 2,400,000,000 32 Lifestyle International Holdings Limited Interim Report 2009