Crypto Flow Technology Limited — Interim / Quarterly Report 2009

May 14, 2009

MelcoLot Limited

(incorporated in the Cayman Islands with limited liability)

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First Quarterly Report

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A Hong Kong listed company with stock code : 8198 www.melcolot.com

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. 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 Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report.

As at the date of this report, the Board consists of three executive Directors, namely, Mr. CHAN Sek Keung, Ringo, Mr. KO Chun Fung, Henry and Mr. Christos MOUMOURIS; 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 of MelcoLot Limited collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange (the “GEM Listing Rules”) for the purpose of giving information with regard to MelcoLot Limited. The directors of MelcoLot Limited, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this report is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this report misleading; and (3) 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.

1

TO OUR SHAREHOLDERS

The board of directors (the “Board”) of MelcoLot Limited (the “Company”) hereby report the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for the three months ended 31 March 2009 (the “Review Period”) together with the comparative unaudited figures for the correspondence period in 2008.

BUSINESS OVERVIEW AND REVIEW

During the Review Period, the Group continued to be engaged in two main streams of businesses, the network system integration (the “SI Business”) and the lottery business (the “Lottery Business”) which include venue management, scratch card distribution, and lottery terminal equipment manufacturing and distribution.

Total revenue of the Group during the Review Period amounted to approximately HK$96.3 million (2008: HK$82.3 million) out of which HK$79.4 million (2008: HK$67.7 million) were from SI Business while HK$16.9 million (2008: HK$14.6 million) were from Lottery Business.

Consolidated loss attributable to equity holders of the Company amounted to approximately HK$33.0 million for the Review Period (2008: HK$28.7 million), after charging the following recurrent and non-cash items resulting from the two very substantial acquisitions the Group made, as detailed in the circular to shareholders of the Company dated 19 November 2007 and 11 November 2008:–

• (i) A deemed expense on convertible bonds amounting to HK$16.6 million (2008: HK$9.7 million);

• (ii) An amortisation expense on intangible assets in fair value of HK$5.1 million (2008: HK$13.0 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$9.5 million (2008: HK$6.7 million), while there was total cash and cash equivalent on hand of approximately HK$153.6 million at the end of the Review Period (2008: HK$105.8 million).

MelcoLot Limited • First Quarterly Report 2009

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Network System Integration Business

In spite of the traditionally slow season of the year, SI Business for the Group performed reasonable well during the Review Period. Total revenue during the Review Period amounted to approximately HK$79.4 million (2008: HK$67.7 million), representing a 17.3% increase over the same period in 2008.

Competition in the market place has been keen for the SI Business of the Group during the Review Period as in the past years. However, the good reputation of professional excellence has won the Group strong customer trust and loyalty. Multi-national corporations, large local enterprises and all four major telecommunications service providers have remained, by far, the largest buyers of the Group’s network systems and related professional services. With the launch of 3G services by the telecommunications industry in China and going deeper onto users level, it is reasonable to expect satisfactory performance for the remaining part of the year.

Lottery Business Management Services

For the Lottery Business total revenue during the Review Period amounted to approximately HK$16.9 million (2008: HK$14.6 million), representing a 15.8% increase over the same period in 2008.

The Review Period has been one for the further strengthening of the Group’s operations in the Lottery Business. The joining hands with the Intralot Group in December last year had opened up the access to both the world class lottery expertise and technology for the group’s Lottery Business. Through this alliance, the Group is fully equipped moving up to capitalise on the expected strong growth in the lottery business in China and the Asian Region.

With the completion of the “Lucky Pool” retail chain up-grading, the Group now not only manages the flagship shops in strategic locations in major cities, it also captures the lucrative lottery business through the management of lottery shops covering one-third of the provinces in China, thus achieving a wider coverage and into different levels of the lottery business.

INTERIM DIVIDEND

The Board does not recommend the payment of an interim dividend for the Review Period (2008: Nil).

CHAN Sek Keung, Ringo Chairman

Hong Kong, 12 May 2009

MelcoLot Limited • First Quarterly Report 2009

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FINANCIAL INFORMATION

Unaudited Consolidated Financial Results

Note Revenue 2 Changes inventories of finished goods and work-in-progress Purchases of inventories and raw materials consumed Other income and gains Employee benefits costs Depreciation and amortisation Share of (losses) /profits of jointly controlled entities Other expenses Finance costs 3 Loss before taxation 4 Taxation 5 Loss for the period Attributable to: Equity holders of the Company Minority interests Loss per share – Basic (cents) 6

For the three months ended 31 March 2009 2008 HK$’000 HK$’000 96,306 82,329 (53,681) 7,590 (21,581) (67,967) 1,948 607 (13,075) (11,813) (7,008) (14,637) (352) 372 (18,982) (20,151) (18,569) (11,076) (34,994) (34,746) (550) – (35,544) (34,746) (33,021) (28,722) (2,523) (6,024) (35,544) (34,746) (6.61) (6.62)

2009 HK$’000 96,306 (53,681) (21,581) 1,948 (13,075) (7,008) (352) (18,982) (18,569) (34,994) (550) (35,544) (33,021) (2,523) (35,544) (6.61)

MelcoLot Limited • First Quarterly Report 2009

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NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL RESULTS

(1) BASIS OF PRESENTATION

The unaudited consolidated financial results have been prepared in accordance with Hong Kong Financial Reporting Standards 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 report were in consistent with those applied for the annual financial report for the year ended 31 December 2008.

The unaudited consolidated results have been reviewed by the audit committee of the Company (the “Audit Committee”).

(2) REVENUE

An analysis of the Group’s revenue recognised for the three months ended 31 March 2009 together with the comparative figures for the corresponding period in 2008 are as follows:

Network system integration Lottery business Total	(Unaudited) For the three months ended 31 March	(Unaudited) For the three months ended 31 March
	2009 HK$’000 79,418 16,888 96,306	2008 HK$’000 67,731 14,598
		82,329

(3) FINANCE COSTS

Interest expenses on bank borrowings Interest expenses on other loans Effective interest expenses on convertible bonds	(Unaudited) For the three months ended 31 March	(Unaudited) For the three months ended 31 March
	2009 HK$’000 188 1,816 16,565 18,569	2008 HK$’000 941 451 9,684
		11,076

MelcoLot Limited • First Quarterly Report 2009

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(4) LOSS BEFORE TAXATION

Loss before taxation has been arrived at after charging:

Amortisation of intangible assets Depreciation of property, plant and equipment Employee benefit expenses (including Directors’ remuneration) Salary and wages Share based payment and after crediting: Bank interest income Other service income Net foreign exchange gain	(Unaudited) For the three months ended 31 March
	2009 2008 HK$’000 HK$’000 5,137 13,019 1,871 1,618 10,971 10,627 2,104 1,186 53 607 1,397 – 498 –

(5) TAXATION

No provision for Hong Kong profits tax has been made as the Group had no assessable profit for the three months ended 31 March 2009 arising in Hong Kong (2008: Nil).

PRC Enterprise Income Tax is calculated at the applicable rates to the PRC subsidiaries. Certain subsidiaries of the Company operating in the PRC are eligible for certain tax holidays and concessions and were exempted from PRC income taxes for the years of 2008 and 2007 (“Tax Holidays”). The maximum Tax Holidays period is 5 years from the first taxable profit year.

(6) LOSS PER SHARE

The calculation of basic loss per share for the three months ended 31 March 2009 is based on the unaudited loss attributable to equity holders of the Company of approximately HK$33,021,000 (2008: HK$28,722,000) and on the weighted average number of 499,936,587 ordinary shares (2008: 433,968,745) in issue during the period.

Diluted loss per share has not been presented since assuming the conversion and exercise of the Company’s outstanding convertible bonds and share options would result in a decrease in loss per share.

MelcoLot Limited • First Quarterly Report 2009

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Total HK$’000 540,267 1,186 761 1,972 (34,746) 527 509,967 189,739 2,104 88 (2,015) (35,544) 154,372
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		Total	HK$’000	540,267		1,186			761			1,972		(34,746			527	509,967			189,739		2,104		88			(2,015		(35,544	154,372
	Minority	interests	HK$’000	56,189		–			–			–		(6,024)			527	50,692			30,224		–		–			–		(2,523)	27,701
		Sub-total	HK$’000	484,078		1,186			761			1,972		(28,722)			–	459,275			159,515		2,104		88			(2,015)		(33,021)	126,671
Share-based Statutory Convertible	Share Share payments surplus bonds equity Exchange Accumulated	capital premium reserve reserves fund reserve reserve losses	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	As at 1 January 2008 (restated) 4,322 334,020 359 2,007 611,692 4,483 (472,805)	Recognition of equity settled	share-based payments – – 1,186 – – – –		Exercise of share options,	net of expenses 33 820 (92) – – – –	Exchange difference on	translation of foreign	operations – – – – – 1,972 –	Loss for the three months	ended 31 March 2008 – – – – – – (28,722)	Minority interests arising	from acquisition of interests	in subsidiaries – – – – – – –	As at 31 March 2008 4,355 334,840 1,453 2,007 611,692 6,455 (501,527)			As at 1 January 2009 4,994 368,540 16,244 5,589 645,492 37,184 (918,528)	Recognition of equity settled	share-based payments – – 2,104 – – – –	Exercise of share options,	net of expenses 11 121 (44) – – – –	Exchange difference on	translation of foreign	operations – – – – – (2,015) –	Loss for the three months	ended 31 March 2009 – – – – – – (33,021)	As at 31 March 2009 5,005 368,661 18,304 5,589 645,492 35,169 (951,549)

MelcoLot Limited • First Quarterly Report 2009

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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.

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 31 March 2009, options comprising an aggregate of 3,000,000 shares were outstanding, as detailed below:

Type of participant: Director	Exercise price per share HK$ 0.55		Number of share options	Number of share options	Number of share options
		Outstanding as at 1.1.2009 3,000,000 3,000,000	Exercised during Review Period – –	Lapsed during Outstanding Review as at Period 31.3.2009 – 3,000,000 – 3,000,000
					3,000,000
					3,000,000

MelcoLot Limited • First Quarterly Report 2009

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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 9 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; (8) 30,000,000 shares on 31 March 2008 and (9) 13,000,000 shares on 16 February 2009.

MelcoLot Limited • First Quarterly Report 2009

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A summary of the Post-IPO Share Option Scheme movements during the Review Period are as follows:

Date of grant 20.2.2003 (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) 16.2.2009 (Note 5)	Type of participants Director Employees Employees Director Employees Directors Employees Director Advisors Employees Director Advisors Employees	Exercisable period 20.2.2004 to 19.2.2013 23.2.2005 to 22.2.2014 11.10.2005 to 10.10.2014 12.1.2008 to 11.1.2017 12.1.2008 to 11.1.2017 7.6.2008 to 6.12.2009 7.6.2008 to 6.12.2009 1.10.2008 to 31.3.2018 1.10.2008 to 31.3.2018 1.10.2008 to 31.3.2018 16.2.2010 to 15.2.2019 16.2.2010 to 15.2.2019 16.2.2010 to 15.2.2019	Exercise price per share		Number of share options	Number of share options	Number of share options	Number of share options
				Outstanding as at 1.1.2009 1,200,000 81,500 82,000 562,500 4,110,500 4,673,000 1,150,000 3,360,000 4,510,000 4,354,000 17,906,000 7,740,000 30,000,000 – – – – 40,546,500	Granted during Review Period – – – – – – – – – – – – – 2,120,000 (Note 6) 4,180,000 6,700,000 13,000,000 13,000,000	Exercised during Review Period – – (10,000) – (1,075,000) (1,075,000) – – – – – – – – – – – (1,085,000)	Lapsed during Outstanding Review as at Period 31.3.2009 (Note 1) – 1,200,000 (5,000) 76,500 (7,500) 64,500 – 562,500 – 3,035,500 – 3,598,000 – 1,150,000 (204,000) 3,156,000 (204,000) 4,306,000 – 4,354,000 (700,000) 17,206,000 (1,302,000) 6,438,000 (2,002,000) 27,998,000 – 2,120,000 – 4,180,000 – 6,700,000 – 13,000,000 (2,218,500) 50,243,000
			HK$ 0.138 0.165 0.124 0.088 0.088 2.720 2.720 0.890 0.890 0.890 0.300 0.300 0.300 Total:					1,200,000
								76,500
								64,500
								562,500 3,035,500
								3,598,000
								1,150,000 3,156,000
								4,306,000
								4,354,000 17,206,000 6,438,000
								27,998,000
								2,120,000 4,180,000 6,700,000
								13,000,000
								50,243,000

MelcoLot Limited • First Quarterly Report 2009

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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) 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 33% of the total options granted, for a period not later than 10 years from the date of grant.

• (6) These share options were granted to Mr. Christos Moumouris, executive Director 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.

MelcoLot Limited • First Quarterly Report 2009

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DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS OR SHORT POSITIONS IN SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 31 March 2009, 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 Stock 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 18,876,000 56,400,000 413,500 1,500,000	Approximate percentage of Shares interested
			(Note 1) 3.77% 11.27% 0.08% 0.30%

Notes:

• (1) As at 31 March 2009, the total number of issued shares of the Company was 500,515,433.

• (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 wholly-owned by him.

MelcoLot Limited • First Quarterly Report 2009

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• (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. Christos Moumouris 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 16.2.2009 12.1.2007 7.12.2007 7.12.2007 7.12.2007	Number of unlisted pre-IPO share option outstanding as at 1.1.2009 3,000,000 – – – – – – –	Number of unlisted pre-IPO share option outstanding as at 31.3.2009 3,000,000 – – – – – – –	Number of unlisted post-IPO share option outstanding as at 1.1.2009 – 1,200,000 4,354,000 – 562,500 200,000 200,000 750,000	Number of unlisted post-IPO share option outstanding as at 31.3.2009 – 1,200,000 4,354,000 2,120,000 562,500 200,000 200,000 750,000	Approximate percentage of the Company’s Aggregate issued interests share capital 4,200,000 0.84% 4,354,000 0.87% 2,120,000 0.42% 762,500 0.15% 200,000 0.04% 750,000 0.15%	Approximate percentage of the Company’s Aggregate issued interests share capital 4,200,000 0.84% 4,354,000 0.87% 2,120,000 0.42% 762,500 0.15% 200,000 0.04% 750,000 0.15%
							0.84% 0.87% 0.42% 0.15% 0.04% 0.15%

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.

MelcoLot Limited • First Quarterly Report 2009

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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.

• (8) Options granted on 16 February 2009 were exercisable during the period from 16 February 2010 to 15 February 2019 at the exercise price of HK$0.30 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 31 March 2009.

SUBSTANTIAL SHAREHOLDERS AND OTHER SHAREHOLDERS WHOSE INTERESTS ARE RECORDED UNDER SECTION 336 OF THE SFO

As at 31 March 2009, 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 Melco LottVentures Holdings Limited (“Melco LV”) Melco Leisure and Entertainment Group Limited (“Melco Leisure”) Melco International Development Limited (“Melco International”) Mr. Ho, Lawrence Yau Lung (“Mr. Ho”)	Capacity Beneficial owner Interest through a controlled corporation Interest through controlled corporations Interest through controlled corporations Beneficial owner	Number of Shares interested 51,977,024 51,977,024 (Note 2) 51,977,024 (Note 3) 51,977,024 (Note 4) –	Number of underlying Shares interested 419,059,095 (Note 5) 419,059,095 (Note 2) 419,059,095 (Note 3) 419,059,095 (Note 4) 4,354,000 (Note 6)	Approximate shareholding percentage
				(Note 1) 94.11% 94.11% 94.11% 94.11% 0.87%

MelcoLot Limited • First Quarterly Report 2009

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Name of shareholder Intralot International Limited (Note 7) Intralot S.A. Integrated Lottery Systems and Services (“Intralot”)(Note 7) Global Crossing Holdings Limited (“Global Crossing”) (Note 8) Toprich Company Limited (“Toprich”)(Note 8) Firich Enterprises Co., Ltd. (Note 8) LottVision Investments Holdings Limited (“LottVision Investments”) (Note 9) LottVision Limited_(Note 9) Mr. Ng Lai Yick(Note 10) North 22 Nominees Limited (Note 10)_ Legg Mason, Inc.	Capacity Beneficial owner Interest through a controlled corporation Beneficial owner Beneficial owner Interest through controlled corporations Beneficial owner Interest through a controlled corporation Beneficial owner Interest through a controlled corporation Beneficial owner Interest through controlled corporations	Number of Shares interested 47,632,938 (Note 7) 47,632,938 (Note 7) 20,787,042 9,712,000 30,499,042 8,947,934 8,947,934 3,134,744 36,900,000 36,900,000 27,304,000	Number of underlying Shares interested 349,401,622 (Note 7) 349,401,622 (Note 7) 206,104,195 (Note 5) – 206,104,195 (Note 5) 46,366,121 46,366,121 – – – –	Approximate shareholding percentage
				(Note 1) 79.33% 79.33% 45.33% 1.94% 47.27% 11.05% 11.05% 0.63% 7.37% 7.37% 5.46%

MelcoLot Limited • First Quarterly Report 2009

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Notes:

• (1) As at 31 March 2009, the total number of issued shares of the Company was 500,515,433.

• (2) Melco Leisure is deemed to be interested in the 51,977,024 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (5) below by virtue of its controlling interests in its wholly-owned subsidiary, Melco LV.

• (3) Melco International is deemed to be interested in the 51,977,024 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (5) below by virtue of its controlling interests in its wholly-owned subsidiary, Melco Leisure.

• (4) Mr. Ho is deemed to be interested in the 51,977,024 Shares and the underlying 419,059,095 Shares from convertible bonds in the Company as described in (5) below by virtue of his controlling interests in Melco International together with Melco LV, which are held by his controlled corporations.

• (5) 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 Group Limited (“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, (“Oasis Rich”). 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 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 Agreement; 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 31 December 2008, distributed to the shareholders of Power Way as to Melco LV HK$356,200,231, Global Crossing 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.

MelcoLot Limited • First Quarterly Report 2009

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• (6) 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.

• (7) Pursuant to an agreement dated 7 September 2008 (as amended by a supplemental agreement dated 26 September 2008) and entered into between the Company and Intralot International Limited (the “Assets Transfer Agreement”), the Company has agreed to acquire the Assets (as defined in the Assets Transfer Agreement) 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 CSLA Projects and/or CWL Projects in the PRC, the Company shall pay the success payment to 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 is therefore deemed interested in the Shares and underlining Shares held by Intralot International Limited, a wholly owned subsidiary of Intralot.

• (8) Firich Enterprises Co., Ltd. is deemed to be interested in the 30,499,042 Shares and the underlying 206,104,195 Shares from convertible bonds in the Company as described in (5) above by virtue of its controlling interests in its wholly-owned subsidiaries, Global Crossing and Toprich.

• (9) LottVision Limited is deemed to be interested in the 8,947,934 Shares and the underlying 46,366,121 Shares from convertible bonds in the Company as described in (5) above by virtue of its controlling interests in its wholly-owned subsidiary, LottVision Investments.

• (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 31 March 2009.

DIRECTOR’S SERVICE CONTRACT AND REMUNERATION CHANGES

Mr. Ko Chun Fung, Henry was appointed an executive director on 7 January 2008, and to the position of Chief Executive Officer on 1 May 2008, at an annual remuneration of HK$1,680,000. Mr. Ko could also be awarded an annual discretionary bonus by the remuneration committee of the Board after having considered Mr. Ko’s performance and that of the Group in the previous year. No definite term has been specified in the service contract and both the Company and Mr. Ko could terminate the service contract by giving six months’ notice.

MelcoLot Limited • First Quarterly Report 2009

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Considering the changes brought about by the completion of the Asset Transfer Agreement dated 7 September 2008 (as amended by a supplemental agreement dated 26 September 2008), as detailed in the circular dated 11 November 2008 to Shareholders, corresponding changes were deemed necessary.

Having regard to desired management stability, organisation changes to cope with the Group’s development direction, additional responsibilities and current business environment, a new service contract was entered into on 14 April 2009 between the Company and Mr. Ko for three years starting from 1 April 2009. In the new service contract, Mr. Ko will be paid an additional living allowance of HK$30,000 per month in addition to his entitlements under the old service contract.

The changes on the term of the service contract and payment of monthly living allowance above were approved by the Remuneration Committee of the Board.

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

MelcoLot Limited CHAN Sek Keung, Ringo Chairman

Hong Kong, 12 May 2009

MelcoLot Limited • First Quarterly Report 2009