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Crypto Flow Technology Limited — Interim / Quarterly Report 2008
Nov 13, 2008
51323_rns_2008-11-13_a25f46c2-35c0-4b21-b80d-fbc9e34133ea.pdf
Interim / Quarterly Report
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Melco LottVentures Limited
(incorporated in the Cayman Islands with limited liability)
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A Hong Kong listed company with stock code : 8198
www.melcolottventures.com.hk
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CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “EXCHANGE”)
GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.
Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.
The principal means of information dissemination on GEM is publication on the Internet website operated by the Exchange. GEM-listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.
The Exchange takes no responsibility for the contents of this report, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report.
As at the date of this report, the Board consists of two executive Directors, namely, Mr. CHAN Sek Keung, Ringo and Mr. KO Chun Fung, Henry; and three independent non-executive Directors, namely, Mr. David TSOI, Mr. PANG Hing Chung, Alfred and Mr. SO Lie Mo, Raymond.
This report, for which the directors (the “Directors”) of Melco LottVentures Limited (the “Company”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (i) the information contained in this report is accurate and complete in all material respects and not misleading; (ii) there are no other matters the omission of which would make any statement in this report misleading; and (iii) all opinions expressed in this report have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.
Third Quarterly Report 2008
1
TO OUR SHAREHOLDERS
The board of directors (the “Board”) of Melco LottVentures Limited (the “Company”) hereby report the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for the three months and nine months ended 30 September 2008 (the “Review Period”) and the comparative unaudited figures for the correspondence period in 2007.
BUSINESS OVERVIEW AND REVIEW
For the Review Period, the Group was engaged in two main business streams, namely (i) network system integration (“SI Business”) and (ii) lottery business management services (“Lottery Management Business”), which the Group acquired in December 2007 after the completion of the very substantial acquisition (“VSA”) as detailed in the announcement of the Company dated 21 October 2007 (the “Announcement”) and the circular to shareholders of the Company dated 19 November 2007 (the “Circular”).
The VSA was approved by the shareholders at the extraordinary general meeting held on 5 December 2007 and was completed on 13 December 2007. And, as a result, certain comparative figures for the Lottery Management Business are not applicable in this third quarterly report.
Total turnover of the Group during the Review Period amounted to approximately HK$355.6 million (2007: HK$279.4 million). The 27% increase in turnover came mostly from the newly acquired Lottery Management Business.
Included in the overheads during the Review Period, there were other expenses totaling approximately HK$65.3 million (2007: HK$25.5 million) out of which HK$34.7 million (2007: HK$25.5 million) were from SI Business while HK$30.6 million (2007: Not applicable) were from the newly added Lottery Management Business.
Melco LottVentures Limited
2
Consolidated loss attributable to equity holders of the Company amounted to approximately HK$86.2 million for the Review Period (2007: profit HK$3.9 million), after charging the following recurrent and non-cash items resulting from the VSA for the Review Period:
-
(i) A deemed expense on convertible bonds amounting to HK$28.3 million;
-
(ii) An amortisation expense on intangible assets in fair value of HK$39.0 million.
Excluding (i) and (ii) above and other non-cash items, consolidated cash loss attributable to equity holders of the Company during the Review Period amounted to approximately HK$9.6 million, while there was total cash and cash equivalent on hand of approximately HK$97.4 million at the end of the Review Period.
Network System Integration Business
For the SI Business, total turnover during the Review Period amounted to approximately HK$298.1 million (2007: HK$279.4 million), representing a 6.7% increase over the same period in 2007.
Competition for the SI Business in China continued to be keen during the Review Period, and will continue to be so in the foreseeable future. The financial instability which the world is now facing will undoubtedly affect China, and will in turn affect the Group’s SI Business. The Group will, however, stay in constant alert and continue to standby ready with its professional technical expertise, strong customer base and supplier confidence to meet any challenges that may be forthcoming.
Lottery Business Management Services
For the Lottery Business Management Services, total turnover during the Review Period amounted to approximately HK$57.5 million (2007: Not applicable).
During the Review Period, management has reviewed and fine tuned its plans in the development of its sales network in China with the view of maximising sales and enlarging operational scale benefits.
The China market aside, the third quarter saw the successful completion in acquiring the entire issued share capital of KTeMS Co. Ltd. (“KTeMS”) in South Korea. KTeMS now holds 14% in Nanum Lotto Inc., which is a consortium of well respected local and international corporations awarded with the exclusively license right to operate off-line lottery in South Korea. The Group holds high hopes for the market in South Korea and is confident that the investments will bear lucrative returns.
Third Quarterly Report 2008
3
On 7 September 2008, the Company signed an assets transfer agreement with Intralot International Ltd., a wholly owned subsidiary of the Athens-listed Intralot S.A. The Intralot Group is the world’s second biggest supplier of integrated gaming and transaction processing systems. Details of the transaction have been published in the Company’s announcement made on 28 September 2008. By admitting such a strong partner, the Group’s position will be substantially strengthened by the additional world-class technical and commercial know-how in lottery business. Coupled with the Group’s strong marketing presence and expertise in China, the Group is optimistic in reaping good results when China opens up further its lottery industry. Arrangements are being made for the deal to be submitted to shareholders approval at an extraordinary general meeting to be held in December 2008.
At the same extraordinary general meeting, shareholders will also be asked to approve the change of the Company name to “MelcoLot Limited” while the Chinese name “新濠環彩有限公司” will remain unchanged. This move, while drawing closer the relationship between the Group and the Intralot group, it also reflects the Group’s confidence in the lottery market in China and the Asia-Pacific region and the long term promising prospects in partnering with a world renowned name in the lottery and gaming industry.
INTERIM DIVIDEND
The Board does not recommend the payment of an interim dividend for the Review Period. (2007: Nil).
CHAN Sek Keung, Ringo Chairman
Hong Kong, 11 November 2008
Melco LottVentures Limited
4
FINANCIAL INFORMATION
Unaudited Consolidated Financial Results
| Note Turnover 2 Cost of sales and services Gross profit Other income Employee expense Depreciation and amortisation Share of losses of jointly controlled entities Other expenses Write-off of fixed assets Finance costs 3 (Loss)/Profit before taxation 4 Taxation 5 (Loss)/Profit for the period (Loss)/Profit attributable to: Equity holders of the Company Minority interest (Loss)/Earnings per share – Basic (cents) 6 – Diluted (cents) 6 |
For the three months ended 30 September 2008 2007 HK$’000 HK$’000 120,353 84,263 (92,761) (65,917) 27,592 18,346 607 167 (14,895) (5,713) (14,718) (1,100) (619) – (20,721) (9,940) (424) – (11,737) (1,233) (34,915) 527 (300) (250) (35,215) 277 (30,611) 277 (4,604) – (35,215) 277 (6.95) 0.09 N/A 0.09 |
For the nine months ended 30 September |
For the nine months ended 30 September |
|---|---|---|---|
| 2008 HK$’000 120,353 (92,761) 27,592 607 (14,895) (14,718) (619) (20,721) (424) (11,737) (34,915) (300) (35,215) (30,611) (4,604) (35,215) (6.95) N/A |
2008 HK$’000 355,575 (265,652) 89,923 4,858 (47,879) (44,007) (1,771) (65,260) (424) (32,688) (97,248) (1,918) (99,166) (86,207) (12,959) (99,166) (19.74) N/A |
2007 HK$’000 279,430 (225,742) |
|
| 53,688 254 (17,114) (3,369) – (25,483) – (3,790) |
|||
| 4,186 (250) |
|||
| 3,936 | |||
| 3,936 – |
|||
| 3,936 | |||
| 1.35 | |||
| 1.34 |
Third Quarterly Report 2008
5
Notes to the Unaudited Consolidated Financial Results
(1) BASIS OF PRESENTATION
The unaudited consolidated financial results have been prepared in accordance with Hong Kong Accounting Standard issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) and the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited.
The accounting policies adopted in preparing the unaudited consolidated financial results were in consistent with those applied for the annual financial report for the year ended 31 December 2007.
The condensed consolidated financial statements are unaudited but have been reviewed by the audit committee of the Company (the “Audit Committee”).
(2) TURNOVER
An analysis of the Group’s turnover recognised for the three and nine months ended 30 September 2008 together with the comparative figures for the corresponding period in 2007 are as follows:
| Network system integration Lottery business management services |
(Unaudited) For the three months ended 30 September 2008 2007 HK$’000 HK$’000 104,075 84,263 16,278 – 120,353 84,263 |
(Unaudited) For the nine months ended 30 September |
(Unaudited) For the nine months ended 30 September |
|---|---|---|---|
| 2008 HK$’000 104,075 16,278 120,353 |
2008 HK$’000 298,107 57,468 355,575 |
2007 HK$’000 279,430 – |
|
| 279,430 |
Melco LottVentures Limited
6
(3) FINANCE COSTS
| Interest expenses on bank borrowings Interest expenses on other loans Interest expenses on shareholder loan Effective interest expenses on convertible bonds |
(Unaudited) For the three months ended 30 September 2008 2007 HK$’000 HK$’000 425 646 843 587 687 – 9,782 – 11,737 1,233 |
(Unaudited) For the three months ended 30 September 2008 2007 HK$’000 HK$’000 425 646 843 587 687 – 9,782 – 11,737 1,233 |
(Unaudited) For the nine months ended 30 September |
(Unaudited) For the nine months ended 30 September |
|---|---|---|---|---|
| 2008 HK$’000 425 843 687 9,782 11,737 |
2008 HK$’000 2,016 1,654 687 28,331 32,688 |
2007 HK$’000 2,055 1,735 – – |
||
| 3,790 | ||||
(4) (LOSS)/PROFIT BEFORE TAXATION
(Loss)/Profit before taxation has been arrived at after charging:
| Amortisation of intangible assets Depreciation of property, plant and equipment Staff costs (including directors’ remuneration) Salary and wages Share based payment and after crediting: Bank interest income Other interest income Other services income |
(Unaudited) For the three months ended 30 September 2008 2007 HK$’000 HK$’000 13,054 740 1,664 360 10,890 5,684 4,005 29 87 60 520 – – – |
(Unaudited) For the nine months ended 30 September |
|---|---|---|
| 2008 2007 HK$’000 HK$’000 38,964 2,130 5,043 1,239 33,154 16,996 14,725 118 672 147 1,491 – 2,695 – |
Third Quarterly Report 2008
7
(5) TAXATION
No provision for Hong Kong profits tax has been made as the Group had no assessable profit for the nine months ended 30 September 2008 and its corresponding period in 2007.
The charge represents PRC income tax calculated on the estimated assessable profit for the year at the rates applicable to respective PRC subsidiaries.
Certain subsidiaries of the Group operating in the PRC are eligible for certain tax holidays and concessions and were exempted from PRC income tax.
On 16 March 2007, the People’s Republic of China promulgated the Law of the People’s Republic of China on Enterprise Income Tax (the “New Law”) by Order No.63 of the President of the People’s Republic of China. On 6 December 2007, the State Council of the PRC issued Implementation Regulations of the New Law. The New Law and Implementation Regulations will change the tax rate from 33% to 25% for certain subsidiaries of the Group from 1 January 2008. The Group has unutilised tax losses available for offset against future profits; therefore, there is no impact on the deferred tax balance of the Group.
No deferred tax asset has been recognised in respect of the unutilised tax losses due to the unpredictability of future profit streams.
(6) (LOSS)/EARNINGS PER SHARE
The calculation of basic (loss)/profit per share for the three months and the nine months ended 30 September 2008 is based on the unaudited loss attributable to equity holders of the Company of approximately HK$30,611,000 (2007: profit HK$277,000) and approximately loss HK$86,207,000 (2007: profit HK$3,936,000) respectively and on the weighted average number of approximately 436,674,000 (2007: 293,248,000) shares in issue during the period.
Diluted loss per share has not been presented for the three months and nine months ended 30 September 2008 since the effect is anti-dilutive.
Melco LottVentures Limited
8
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Total HK$’000 65,213 118 1,932 1,433 3,936 72,632 620,770 14,725 764 7,132 27,846 (790) 22,364 (99,166) 527 594,172
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| Minority | interests | HK$’000 | – | – | – | – | – | – | 76,692 | – | – | 79 | – | – | – | (12,959) | 527 | 64,339 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Attributable | to equity | holders | of the | Company | HK$’000 | 65,213 | 118 | 1,932 | 1,433 | 3,936 | 72,632 | 544,078 | 14,725 | 764 | 7,053 | 27,846 | (790) | 22,364 | (86,207) | – | 529,833 | |||||||||||
| Retained | profits/ | (Accumulated | losses) |
HK$’000 |
2,643 |
– |
– |
– |
3,936 |
6,579 |
(412,805) |
– |
– |
– |
– |
– |
– |
(86,207) |
– |
(499,012) |
||||||||||||
| Exchange | reserve | HK$’000 | 1,196 | – | – | 1,433 | – | 2,629 | 4,483 | – | – | 7,053 | – | – | – | – | – | 11,536 | ||||||||||||||
| Convertible | bonds | equity | reserve | HK$’000 | – | – | – | – | – | – | 611,692 | – | – | – | – | – | – | – | – | 611,692 | ||||||||||||
| Enterprise | expansion | fund | HK$’000 | 502 | – | – | – | – | 502 | 502 | – | – | – | – | – | – | – | – | 502 | |||||||||||||
| Statutory | surplus | reserves | fund | HK$’000 | 1,505 | – | – | – | – | 1,505 | 1,505 | – | – | – | – | – | – | – | – | 1,505 | ||||||||||||
| Share-based | Share payments |
premium reserve |
HK$’000 HK$’000 |
55,824 643 |
– 118 |
2,210 (351) |
– – |
– – |
58,034 410 |
334,020 359 |
– 14,725 |
826 (95) |
– – |
27,489 – |
(790) – |
22,364 – |
– – |
– – |
383,909 14,989 |
|||||||||||||
| Share | capital | HK$’000 | 2,900 | – | 73 | – | – | 2,973 | 4,322 | – | 33 | – | 357 | – | – | – | – | 4,712 | ||||||||||||||
| As at 1 January 2007 | Recognition of equity settled | share-based payments | Exercise of share options, net of expenses | Exchange difference on translation of | foreign operations | Profit for the nine months | ended 30 September 2007 | As at 30 September 2007 | As at 1 January 2008 | Recognition of equity settled | share-based payments | Exercise of share options, net of expenses | Exchange difference on translation of | foreign operations | Issue of new shares | Transaction costs attributable | to issue of new shares | Discount on acquisition of assets | Loss for the nine months ended | 30 September 2008 | Minority interests arising from acquisition | of interests in subsidiaries | As at 30 September 2008 |
Third Quarterly Report 2008
9
(8) CHANGE IN SHARE CAPITAL
| Note Authorised – Ordinary shares of HK$0.01 each – At 1 January 2008 and 30 September 2008 Issued and fully paid – At 1 January 2008 – Shares issued on acquisition of subsidiary (a) – Exercise of share options – At 30 September 2008 |
Number of shares ’000 2,000,000 432,198 35,700 3,323 471,221 |
Nominal value HK$’000 20,000 |
|---|---|---|
| 4,322 357 33 |
||
| 4,712 | ||
Note:
- (a) On 17 September 2008, the Company issued and allotted 35,700,000 ordinary shares of the Company of HK$0.01 each at the issue price of HK$1.42 each as part of the consideration for the acquisition of the entire issued share capital of KTeMS Co., Ltd. These shares rank pari passu in all respects with other shares in issue.
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY
During the Review Period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company’s listed securities.
SHARE OPTION SCHEMES
The Company, at the general meeting held on 20 April 2002, adopted both a preIPO share option scheme (the “Pre-IPO Share Option Scheme”) and a post-IPO share option scheme (the “Post-IPO Share Option Scheme”).
No options granted pursuant to either the Pre-IPO Share Option Scheme or the Post-IPO Share Option Scheme were cancelled during the Review Period.
Melco LottVentures Limited
10
Details of the movements in the number of share options during the Review Period for both schemes are as follows:
(a) Pre-IPO Share Option Scheme
One single grant of 11,913,000 shares in aggregate was made to various participants on 30 April 2002 under this scheme. As at 30 September 2008, options comprising an aggregate of 3,000,000 shares were outstanding, as detailed below:
| Type of participants: Directors Advisor Employees |
Exercise price per share HK$ 0.55 0.55 0.55 |
Number of share options | Number of share options | Number of share options | |
|---|---|---|---|---|---|
| Outstanding as at 1.1.2008 3,000,000 750,000 187,000 3,937,000 |
Exercised during Review Period – 750,000 187,000 937,000 |
Lapsed during Outstanding Review as at Period 30.9.2008 – 3,000,000 – – – – – 3,000,000 |
|||
| 3,000,000 – – |
|||||
| 3,000,000 |
Pre-IPO share options are exercisable as to (i) a maximum of 25% of the total number of options granted between six months and twelve months after 17 May 2002 (the “Listing Date”); (ii) a maximum additional 6.25% of the total number of options granted after the expiry of each successive 3-months period, twelve months after the Listing Date; and (iii) the remaining options on or after the third anniversary of the Listing Date until the end of the option period or lapse of an option.
The above outstanding options may be exercised, in accordance with the terms of the Pre-IPO Share Option Scheme, before 30 April 2012.
(b) Post-IPO Share Option Scheme
There have been a total of 8 lots of Post-IPO share options granted. The lots were (1) 5,277,000 shares on 12 July 2002; (2) 7,859,000 shares on 20 February 2003; (3) 385,000 shares on 10 October 2003; (4) 2,844,000 shares on 23 February 2004; (5) 828,000 shares on 11 October 2004; (6) 6,980,000 shares on 12 January 2007; (7) 4,818,000 shares on 7 December 2007 and (8) 30,000,000 shares on 31 March 2008.
Third Quarterly Report 2008
11
A summary of the Post-IPO Share Option Scheme movements during the Review Period are as follows:
| Date of grant 12.7.2002 (Note 2) 20.2.2003 (Note 2) 10.10.2003 (Note 2) 23.2.2004 (Note 2) 11.10.2004 (Note 2) 12.1.2007 (Note 2) 7.12.2007 (Note 3) 31.3.2008 (Note 4) |
Type of Exercisable participants period Employees 12.7.2003 to 11.7.2012 Directors 20.2.2004 to 19.2.2013 Advisor 20.2.2004 to 19.2.2013 Employees 20.2.2004 to 19.2.2013 Employees 10.10.2004 to 9.10.2013 Employees 23.2.2005 to 22.2.2014 Employees 11.10.2005 to 10.10.2014 Directors 12.1.2008 to 11.1.2017 Employees 12.1.2008 to 11.1.2017 Directors 7.6.2008 to 6.12.2009 Employees 7.6.2008 to 6.12.2009 Directors 1.10.2008 to 31.3.2018 Advisors 1.10.2008 to 31.3.2018 Employees 1.10.2008 to 31.3.2018 |
Exercise price per share |
Number of share options | Number of share options | Number of share options | Number of share options | |
|---|---|---|---|---|---|---|---|
| Outstanding as at 1.1.2008 16,000 1,200,000 300,000 25,000 1,525,000 – 402,500 112,750 750,000 6,230,000 6,980,000 1,150,000 3,668,000 4,818,000 – – – – 13,854,250 |
Granted during Review Period – – – – – – – – – – – – – – 4,354,000 (Note 6) 17,906,000 7,740,000 30,000,000 30,000,000 |
Exercised during Review Period 16,000 – 300,000 25,000 325,000 – 321,000 29,500 187,500 (Note 5) 1,507,000 1,694,500 – – – – – – – 2,386,000 |
Lapsed during Outstanding Review as at Period 30.9.2008 (Note 1) – – – 1,200,000 – – – – – 1,200,000 – – – 81,500 1,250 82,000 – 562,500 462,500 4,260,500 462,500 4,823,000 – 1,150,000 188,000 3,480,000 188,000 4,630,000 – 4,354,000 – 17,906,000 – 7,740,000 – 30,000,000 651,750 40,816,500 |
||||
| HK$ 0.384 0.138 0.138 0.138 0.142 0.165 0.124 0.088 0.088 2.720 2.720 0.890 0.890 0.890 Total: |
– | ||||||
| 1,200,000 – – |
|||||||
| 1,200,000 | |||||||
| – | |||||||
| 81,500 | |||||||
| 82,000 | |||||||
| 562,500 4,260,500 |
|||||||
| 4,823,000 | |||||||
| 1,150,000 3,480,000 |
|||||||
| 4,630,000 | |||||||
| 4,354,000 17,906,000 7,740,000 |
|||||||
| 30,000,000 | |||||||
| 40,816,500 |
Melco LottVentures Limited
12
Notes:
-
(1) These options lapsed according to the rules of this scheme due to the employees having left the Group.
-
(2) These grants under the Post-IPO Share Option Scheme are exercisable starting from the first anniversary of the date of grant at stepped annual increment of 25% of the total options granted, for a period not later than 10 years from the date of grant.
-
(3) These grants under the Post-IPO Share Option Scheme are exercisable starting from six months of the date of grant at stepped six-months increment of 50% of the total options granted, for a period not later than 2 years from the date of grant.
-
(4) These grants under the Post-IPO Share Option Scheme are exercisable starting from six months of the date of grant at stepped six-months increment of 50% of the total options granted, for a period not later than 10 years from the date of grant.
-
(5) Mr. David Tsoi exercised 187,500 share options on 16 January 2008 out of the 750,000 options granted to him on 12 January 2007.
-
(6) These share options were granted to Mr. Henry Ko, executive director and chief executive officer of the Company.
The above outstanding options may be exercised within such exercise period in accordance with the terms of the Post-IPO Share Option Scheme.
Third Quarterly Report 2008
13
DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS OR SHORT POSITION IN SHARES AND UNDERLYING SHARES OF THE COMPANY
As at 30 September 2008, the interests and short positions of the Directors, the chief executive of the Company and their respective associates (as defined in the GEM Listing Rules) in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”)), as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO or as otherwise notified to the Company and the Exchange pursuant to the required standard of dealings by Directors as referred to in Rule 5.46 to 5.67 of the GEM Listing Rules, were as follows:
(a) Long positions in shares of the Company:
| Name of Director Mr. Chan Sek Keung, Ringo Mr. David Tsoi Mr. Pang Hing Chung, Alfred |
Nature of interests Personal Corporate (Note 2) Personal Personal |
Number of Shares interested 18,776,000 56,400,000 413,500 1,500,000 |
Approximate percentage of Shares interested |
|---|---|---|---|
| 3.98% 11.97% 0.09% 0.32% |
Notes :
-
(1) As at 30 September 2008, the total number of issued shares of the Company was 471,221,495.
-
(2) Mr. Chan Sek Keung, Ringo is deemed, by virtue of the SFO, to be interested in the 56,400,000 Shares held by Woodstock Management Limited, a company whollyowned by him.
Melco LottVentures Limited
14
- (b) Long positions in the underlying shares in the Company (Directors’ rights to acquire shares)
| Name of Director Mr. Chan Sek Keung, Ringo Mr. Ko Chun Fung, Henry Mr. David Tsoi Mr. Pang Hing Chung, Alfred Mr. So Lie Mo, Raymond |
Date of grant 30.4.2002 20.2.2003 31.3.2008 12.1.2007 7.12.2007 7.12.2007 7.12.2007 |
Number of unlisted pre-IPO share option outstanding as at 1.1.2008 3,000,000 – – – – – – |
Number of unlisted pre-IPO share option outstanding as at 30.9.2008 3,000,000 – – – – – – |
Number of unlisted post-IPO share option outstanding as at 1.1.2008 – 1,200,000 – 750,000 200,000 200,000 750,000 |
Number of unlisted post-IPO share option outstanding as at 30.9.2008 – 1,200,000 4,354,000 562,500 200,000 200,000 750,000 |
Approximate percentage of the Company’s Aggregate issued interests share capital 4,200,000 0.89% 4,354,000 0.92% 762,500 0.16% 200,000 0.04% 750,000 0.16% |
Approximate percentage of the Company’s Aggregate issued interests share capital 4,200,000 0.89% 4,354,000 0.92% 762,500 0.16% 200,000 0.04% 750,000 0.16% |
|---|---|---|---|---|---|---|---|
| 0.89% 0.92% 0.16% 0.04% 0.16% |
Notes:
-
(1) Each of the above Directors is the personal beneficial owner of the share options granted to him.
-
(2) Each of the Directors’ interests represent his respective long positions in the underlying shares in the Company by virtue of options granted to the Directors pursuant to the Pre-IPO Share Option Scheme and the Post-IPO Share Option Scheme both adopted by the Company on 20 April 2002 (further details are set out under the section headed “Share Option Schemes”).
-
(3) Options granted on 30 April 2002 were exercisable during the period from 17 November 2002 to 29 April 2012 at the exercise price of HK$0.55 per share.
-
(4) Options granted on 20 February 2003 were exercisable during the period from 20 February 2004 to 19 February 2013 at the exercise price of HK$0.138 per share.
-
(5) Options granted on 12 January 2007 were exercisable during the period from 12 January 2008 to 11 January 2017 at the exercise price of HK$0.088 per share.
-
(6) Options granted on 7 December 2007 were exercisable during the period from 7 June 2008 to 6 December 2009 at the exercise price of HK$2.72 per share.
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(7) Options granted on 31 March 2008 were exercisable during the period from 1 October 2008 to 31 March 2018 at the exercise price of HK$0.89 per share.
Other than as disclosed above, none of the Directors, the chief executive of the Company and their respective associates (as defined in the GEM Listing Rules), had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations as at 30 September 2008.
Third Quarterly Report 2008
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SUBSTANTIAL SHAREHOLDERS AND OTHER SHAREHOLDERS WHOSE INTERESTS ARE RECORDED UNDER SECTION 336 OF THE SFO
As at 30 September 2008, the following persons or corporations, in addition to the Directors, stated under the section headed “Directors’ and chief executive’s interests or short position in shares and underlying shares of the Company”, were interested in shares or underlying shares representing 5% or more in the issued share capital of the Company as recorded in the register of interests required to be kept by the Company pursuant to Section 336 of the SFO.
Long positions in shares of the Company (“Shares”)
| Name of shareholder Power Way Group Limited (“Power Way”) Melco LottVentures Holdings Limited Melco Leisure and Entertainment Group Limited (“Melco Leisure”) Melco International Development Limited (“Melco”) Mr. Ho, Lawrence Yau Lung (“Mr. Ho”) Intralot International Limited_(Note 8) Intralot S.A. Integrated Lottery Systems and Services (“Intralot S.A.”) (Note 8)_ |
Capacity Beneficial owner Beneficial owner Interest through a controlled corporation Interest through controlled corporations Interest through controlled corporations Interest through controlled corporations Beneficial owner Beneficial owner Interest through a controlled corporation |
Number of Shares interested 72,000,000 – 72,000,000 (Note 2) 72,000,000 (Note 3) 72,000,000 (Note 4) 72,000,000 (Note 5) – 28,208,938 (Note 8) 28,208,938 (Note 8) |
Number of underlying Shares interested – 419,059,095 (Note 6) – 419,059,095 (Note 3) 419,059,095 (Note 4) 419,059,095 (Note 5) 4,354,000 (Note 7) 349,401,622 (Note 8) 349,401,622 (Note 8) |
Approximate shareholding percentage |
|---|---|---|---|---|
| 15.28% 88.93% 15.28% 104.21% 104.21% 104.21% 0.92% 80.13% 80.13% |
Melco LottVentures Limited
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| Name of shareholder Global Crossing Holdings Ltd. (“Global Crossing”) (Note 9) Firich Enterprises Co., Ltd. (“Firich”) (Note 9) LottVision Limited Mr. Ng Lai Yick (Note 10) North 22 Nominees Limited_(Note 10)_ Enso Capital Management LLC Legg Mason, Inc. |
Capacity Beneficial owner Interest through a controlled corporation Beneficial owner Beneficial owner Interest through a controlled corporation Beneficial owner Interest through controlled corporations Interest through controlled corporations |
Number of Shares interested – – – 3,134,744 36,900,000 36,900,000 38,457,914 30,000,000 |
Number of underlying Shares interested 206,104,195 (Note 6) 206,104,195 (Note 6) 46,366,121 (Note 6) – – – – – |
Approximate shareholding percentage |
|---|---|---|---|---|
| 43.74% 43.74% 9.84% 0.67% 7.83% 7.83% 8.16% 6.37% |
Notes :
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(1) As at 30 September 2008, the total number of issued shares of the Company was 471,221,495.
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(2) Melco LottVentures Holdings Limited is deemed to be interested in the 72,000,000 Shares by virtue of its controlling interests in Power Way.
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(3) Melco Leisure is deemed to be interested in the 72,000,000 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (6) below by virtue of its controlling interests in its wholly-owned subsidiary, Melco LottVentures Holdings Limited.
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(4) Melco is deemed to be interested in the 72,000,000 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (6) below by virtue of its controlling interests in its wholly-owned subsidiary, Melco Leisure.
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(5) Mr. Ho is deemed to be interested in the 72,000,000 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (6) below by virtue of his controlling interests in Melco, which are held by his controlled corporations.
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(6) Convertible bonds in the principal amount of HK$606,800,000 carrying the rights to subscribe for Shares at an initial conversion price of HK$0.85 per share was issued by the Company to Power Way on 13 December 2007 to satisfy part of the consideration for the acquisition of the entire issued share capital of Precious Success Holdings Limited and 60% of the entire issued share capital of Oasis Rich International Limited. Under the agreement dated 8 October 2007 entered into among the Company, Rising Move International Limited (a wholly-owned subsidiary of the Company), Power Way, LottVision Limited, Melco International Development Limited and Firich Enterprises Co., Ltd. If Power Way exercises the conversion rights attaching to the said convertible bonds in full at the initial conversion price, a total of 713,882,352 Shares will be issued to Power Way. However, no conversion of the convertible bonds shall be made, if immediately upon such conversion, (1) Power Way and its parties acting in concert (as defined under the Takeovers Code) with it will be under an obligation to make a general offer under the Code; (2) each of (i) any of the existing Shareholders holding more than 20% or more of the voting rights of the Company as at the date of the Agreemen; and (ii) Power Way and its parties acting in concert (as defined under the Takeovers Code) will hold 20% or more of the voting rights of the Company respectively; or (3) the public float of the Shares falls below 25% (or any given percentage as required by the GEM Listing Rules) of the issued Shares.
These convertible bonds in the principal sum HK$606,800,000 had been, as at 30 September 2008, distributed to the shareholders of Power Way Group Limited as to Melco LottVentures Holdings Limited HK$356,200,231, Global Crossing Holdings Ltd. HK$175,188,566 and LottVision Limited HK$75,411,203. With LottVision Limited transferring HK$36,000,000 to three independent third parties. It held the balance of the convertible bonds in the principal amount of HK$39,411,203.
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(7) Mr. Ho is an advisor of the Company and the Group without receiving any compensation. He was granted the share options in recognition of his contributions in the past and for the future for the benefits of the Company and the Group.
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(8) Pursuant to an assets transfer agreement signed between the Company and Intralot International Limited on 7 September 2008, the Company has agreed to acquire the Assets at the Consideration of HK$305,130,367.558, as disclosed in the announcement of the Company on 28 September 2008. The Consideration will be satisfied by the Company by allotting and issuing 28,208,938 Shares and issuing the Convertible Bonds in the principal amount of HK$277,175,310 which is convertible into 279,692,542 new Shares at the Conversion Price I of HK$0.991 per Share. In addition, upon obtaining two agreements in connection with the China Sports Lottery Administration (“CSLA”) Projects and/or China Welfare Lottery (“CWL”) Projects in the PRC, the Company shall pay the Success Payment to the Intralot International Limited. The Success Payment will be satisfied by way of the Convertible Bonds II, which are convertible into 69,709,080 new Shares in the Company at the Conversion Price II of HK$1.0759. Intralot S.A. is therefore deemed interested in the Shares and underlining Shares held by the Intralot International Limited, a wholly owned subsidiary of Intralot S.A.
Melco LottVentures Limited
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(9) Firich is deemed to be interested in the underlying 206,104,195 Shares from convertible bonds in the Company as described in (6) above by virtue of its controlling interests in its wholly-owned subsidiary, Global Crossing.
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(10) Mr. Ng Lai Yick is deemed, by virtue of the SFO, to be interested in the 36,900,000 Shares held by North 22 Nominees Limited, a company wholly-owned by him, in addition to the 3,134,744 Shares held by him personally.
Save as disclosed above, the Company had not been notified of any other relevant interests or short positions in the shares or underlying shares in the Company as at 30 September 2008.
COMPETITION AND CONFLICT OF INTERESTS
Each of the Directors and the management shareholders of the Company and their respective associates (as defined in the GEM Listing Rules) has confirmed that none of them had any business or interest in companies that competed or might compete with the business of the Group or any other conflict of interests with the interests of the Group.
AUDIT COMMITTEE
The Company established the Audit Committee on 29 October 2001 with written terms of reference in compliance with Rules 5.28 to 5.29 of the GEM Listing Rules and with reference to the guidelines published by the Hong Kong Institute of Certified Public Accountants.
The present Audit Committee consists of three independent non-executive Directors, namely, Mr. David Tsoi, Chairman, Mr. Pang Hing Chung, Alfred and Mr. So Lie Mo, Raymond.
The Audit Committee has reviewed the draft of this report and has provided advice and comments thereon.
By order of the Board of Melco LottVentures Limited CHAN Sek Keung, Ringo Chairman
Hong Kong, 11 November 2008