IMPORTANT INFORMATION
LP No: LEC/OSA/01/2014
This document is issued by Lottotech Ltd (“Lottotech” or the “Company”), a company incorporated as a
private company limited by shares in Mauritius on 8 April 2008 with file number 079313 and currently
regulated by the Companies Act 2001 and the Gambling Regulatory Authority Act 2007. The Company
was converted into a public company on 3 March 2014.
This document is issued in the context of the listing of Lottotech on the Official List of the Stock Exchange
of Mauritius Ltd (“SEM”) and for the purpose of providing information to potential investors and to the
public in general.
This document serves as a Prospectus in accordance with the Securities (Public Offers) Rules 2007 for the
Offer for Sale of up to 85,000,000 ordinary shares of no par value and as Listing Particulars. It includes
information given in compliance with Chapter 9 of the Listing Rules (the “Listing Rules”) of the SEM in
relation to the proposed listing of 340,000,000 ordinary shares of no par value of Lottotech by way of an
Offer for Sale at a price of MUR10 per ordinary share.
An application has been made to the SEM for the listing and permission to deal in the ordinary shares
of Lottotech. This document has been given conditional approval by the Listing Executive Committee
(“LEC”) of SEM in conformity with the Listing Rules on 10 April 2014. No other listing has been sought for
the ordinary shares of Lottotech.
A copy of this document, also deemed to be a Prospectus, has been filed with the Financial Services
Commission (“FSC”). This document has been prepared in accordance with the Securities Act 2005 and
the Securities (Public Offers) Rules 2007.
For a full appreciation of this document, it should be read in its entirety. If you have any doubt as to the
action you should take, please consult your banker, licensed investment dealer, legal advisor, accountant
or other professional advisor immediately.
This document is not to be redistributed, reproduced, or used, in whole or in part, for any other purpose.
Neither the LEC of the SEM, nor the SEM, nor the FSC assumes any responsibility for the contents of this
document. The LEC of the SEM and the FSC make no representation as to the accuracy or completeness
of any of the statements made or opinions expressed in this document and expressly disclaim any
liability whatsoever for any loss arising from or in reliance upon the whole or any part thereof.
Certain statements contained in this document constitute “forward-looking statements”. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors, which may cause
the actual results, performance or achievements of the Company to be materially different from any
expected future results, performance or achievements expressed or implied by such forward-looking
statements.
The forward-looking statements in this document are made based upon the Directors’ expectations
and beliefs concerning future events impacting the Company and therefore involve a number of
known and unknown risks and uncertainties. Such forward-looking statements are based on numerous
assumptions regarding the Company’s present and future business strategies and the environment in
which it will operate, which may prove to be inaccurate. The Company cautions that these forwardlooking statements are not guarantees and actual results could differ materially from those expressed or
implied in these forward-looking statements.
It is strongly recommended that prospective investors read the section titled“Risk Factors”set out in section
13 of this document for a more complete discussion of the factors that could affect the Company’s future
performance and the industry in which it operates. In light of these risks, uncertainties and assumptions,
the forward-looking events described in this document may not occur. The forward-looking statements
referred to above speak only as at the date of this document. Subject to any obligations under applicable
law, including the Listing Rules, the Company undertakes no obligation to release publicly any revisions
or updates to these forward-looking statements to reflect events, circumstances or unanticipated events
occurring after the date of this document. All subsequent written and oral forward-looking statements
attributable to the Company, Directors or senior management acting on behalf of the Company are
expressly qualified in their entirety by this paragraph.
1
TABLE OF CONTENTS
1. Declaration by Directors
3
2. Salient features of the Offer for Sale
4
3. About Lottotech
5
4. Overview of the business
6
5. Shareholding structure of Lottotech
9
6. Key strengths
10
7. Business strategy
13
8. Rationale for the proposed listing
14
9. Dividend policy
14
10. Summary of the issue
14
11. Independent valuation of Lottotech
16
12. Pro forma financial information
19
13. Risk factors
25
14. Summary of corporate information
28
15. Directors, senior management, corporate governance
and risk management
29
16. Reporting accountants’ report
35
17. Historical financial information
37
18. Summary of constitution
61
19. Other matters
63
20. Documents available for inspection
64
21. List of licensed investment dealers
65
22. Glossary of definitions and abbreviations
66
1. Declaration by Directors
These Listing Particulars include particulars given in compliance with the Stock Exchange of Mauritius Ltd Rules Governing the Official Listing
of Securities for the purpose of giving information with regard to the issuer. The Directors of Lottotech, whose names appear in Section 15.1,
collectively and individually accept full responsibility for the accuracy and completeness of the information contained in this document and
confirm, having made all reasonable enquiries that, to the best of their knowledge and belief, there are no facts, the omission of which would
make any statement herein misleading.
The Directors of Lottotech have, on 26 March 2014, approved the proposed listing, the salient features of which are provided in Section 2.
Furthermore, the Directors of Lottotech declare that, to the best of their knowledge and belief and after having made reasonable inquiries,
in relation to the period from 31 December 2013, the date to which the last audited financial statements of Lottotech have been prepared,
to the date of this document:
•
There has not been any material adverse change in the financial or trading position of Lottotech;
•
The business of Lottotech has been satisfactorily maintained;
•
There have been no circumstances adversely affecting the value of the assets of Lottotech;
•
The current assets of Lottotech appear in the books at values believed to be realisable in the ordinary course of business;
•
There have been no unusual factors affecting the reserves of Lottotech; and
•
T he working capital available to Lottotech is sufficient for at least twelve months from the date of the issue of this document and no
change in the nature of the business of Lottotech is contemplated.
If you are in any doubt about the content of this document, you should take independent professional advice in relation to the Listing Particulars.
Approved by the Board of Lottotech (the “Board”) on 26 March 2014 and signed on its behalf by:
Chian Tat Ah Teck
Paul Cyril How Kin Sang
Director Director
3
2. Salient features of the Offer for Sale
Issuer Lottotech Ltd
OfferOffer for Sale of up to 85,000,000 ordinary shares of no par value to the public at an offer price of MUR10 each,
fully payable on application, following which 340,000,000 ordinary shares of no par value will be listed on the
Official List of the Stock Exchange of Mauritius Ltd.
Price of offer MUR10 per ordinary share.
Application proceduresApplicants for the Offer for Sale should apply for the ordinary shares by filling in and signing the “Application
Form for the Offer for Sale”. The respective form must be returned with the payment of MUR10 per ordinary
share applied for to any licensed investment dealer not later than 4:00 pm on 16 May 2014. Acceptances are
irrevocable and may not be withdrawn.
AllotmentUp to 20% of the ordinary shares on offer will be reserved to be allocated to retailers of Lottotech, directors
and employees of the Gamma group of companies and The State Investment Corporation Ltd, with a discount
of 5% on the offer price.
The balance of the ordinary shares on offer will be allocated to the public.
For the reserved shares, the Board of Lottotech will define the allotment criteria and retains the right to
allocate the ordinary shares in such a manner as it deems appropriate. In the event of over-subscription of
the ordinary shares allocated to the public, the Board will define the allotment criteria and retains the right to
allocate the ordinary shares in such a manner as it deems appropriate.
The above allotments are subject to the approval of the relevant regulatory authorities.
First day of tradingOn the first day of trading, the existing shareholders of Lottotech prior to the Offer for Sale, will make available
up to 50,000 ordinary shares at an indicative price of MUR10 per ordinary share.
Timetable
Opening of Offer for Sale 5 May 2014
Closing of Offer for Sale
16 May 2014
Allotment of fully-paid ordinary shares to shareholders
9 June 2014
List
Commencement of trading of ordinary shares on the Official of the Stock Exchange of Mauritius Ltd
11 June 2014
Financial dataAll per ordinary share statistics have been computed on the basis of 340,000,000 ordinary shares of no par
value in issue. Refer to Section 19.11 for the share-split details.
Key performance
Units
2013
2012
2011
indicators
1
4
EBITDA – Pro forma basis
MURm
2101
153
140
EBITDA – Pro forma basis post Impact Analysis
MURm
255
n/a
n/a
EBITDA – Audited accounts basis
MURm
481
74
46
EPS – Pro forma basis
MUR
0.391
0.26
0.22
EPS – Pro forma basis post Impact Analysis
MUR
0.50
n/a
n/a
EPS – Audited accounts basis
MUR
0.67
0.06
(0.03)
P/E Multiple – Pro forma basis
Number
25.56
38.64
45.33
P/E Multiple – Pro forma basis post Impact Analysis
Number
19.88
n/a
n/a
P/E Multiple – Audited accounts basis
Number
14.85
175.47
n/a
Dividend per share – Actual
MUR
0.74
Nil
Nil
Dividend per share – Annualised
MUR
0.49
Nil
Nil
Dividend Yield – Actual
%
7.35
Nil
Nil
Dividend Yield – Annualised
%
4.90
Nil
Nil
Gearing ratio
%
Nil
Nil
Nil
Annualised figures.
1
1
1
3. ABOUT LOTTOTECH
Lottotech was incorporated on 8 April 2008 by Gamma-Civic Ltd
(“Gamma”) for the purpose of operating lotteries and generally to
do all related activities.
Following the Request for Proposal issued in March 2008 by The
State Investment Corporation Ltd (“SIC”), Lottotech submitted its
proposal and was selected in July 2008 as the preferred bidder for
the implementation and operation of the Mauritius National Lottery
(the “Operator”) on behalf of the Government of Mauritius. The
proposal by Lottotech included a structured game plan to launch
games in the initial years of the licence.
Under the Gambling Regulatory Authority Act 2007 (“GRA Act”), the
Operator means a company promoted by the SIC and licensed to
operate the Mauritius National Lottery and video lottery terminals.
The GRA Act stipulates that there shall, at no time, be more than one
operator holding a licence to operate the Mauritius National Lottery.
In August 2008, Lottotech entered into agreements with GTECH
as its exclusive technology partner for the implementation and
operation of the Mauritius National Lottery.
In April 2009, Gamma entered into a shareholders’ agreement
with the SIC for Lottotech to implement and operate the Mauritius
National Lottery and SIC became a shareholder of Lottotech. The
agreement stipulates that the parties shall cause Lottotech to obtain
the licence to operate the Mauritius National Lottery and they shall
not directly or indirectly compete with Lottotech.
In April 2009, the Gambling Regulatory Authority (“GRA”) issued
an exclusive licence to Lottotech to operate the Mauritius National
Lottery for a period of 10 years, renewable for further successive
periods not exceeding 5 years each.
In October 2009, Lottotech launched La Loterie Nationale in
Mauritius and Rodrigues with the sale of lottery games through an
initial network of 542 retailers, which has since been expanded to
895 retailers during the last quarter of 2013.
Lottotech is a member of the World Lottery Association (“WLA”), the
global authority on lottery business.
5
4. Overview of the business
4.1 Mission and vision
4.3 Distribution network
Lottotech’s mission is to operate La Loterie Nationale on behalf of
the Government of Mauritius in a caring and socially responsible
way through professional promotion and conduct of outstanding
gaming experience, whilst pursuing success through partnerships
with the community and through optimising sustainable
shareholder return.
The Company’s distribution network comprised of 542 retailers at
the time of launch. This has since been expanded to 895 retailers
during the last quarter of 2013. By the end of December 2014,
Lottotech is expected to increase this number to 1,000 retailers.
Lottotech’s distribution network covers the whole of Mauritius as
well as Rodrigues.
Lottotech’s vision is to be the trusted leading gaming brand for
“Good Causes” – a national brand that is fun, entertaining and
where corporate social responsibility is at the heart of its approach.
4.4 State of the art IT infrastructure
Lottotech promotes integrity, trustworthiness, customer care,
innovation and responsible gaming.
4.2 Lottery games
Lottotech currently offers two lottery games namely the weekly
Loto game and Quick Win games (also known as scratch cards).
Lottotech’s games portfolio includes a number of well-known
and highly recognisable products sold to date under key brands
including:
Through its exclusive technology partnership with GTECH, a leading
lottery operator and provider of technology solutions and systems
to regulated gaming markets worldwide, Lottotech has built an
extensive integrated state of the art IT infrastructure to support
its gaming operations including a nationwide network of retailer
terminals with appropriate back-up systems.
4.5 Management
Lottotech has an experienced senior management team with a
proven track record across the global and local gaming industry.
The experienced senior management team combines the skills in
product development, retail network development, marketing and
communications, technology and risk management.
The management of Lottotech is assisted by Gamma through A.S.
Burstein Management Ltd (“ASB”) in the operation of the Mauritius
National Lottery and in the strategy and business development of
the Company.
4.6 Responsible gaming
Lottotech has implemented a series of measures to build and
maintain its credibility as a responsible gaming company, including
a dedicated service for player protection that provides advice to
those dealing with gambling addiction. In addition, Lottotech has
implemented measures to prevent under-age play. Together with
the GRA, Lottotech will lead an initiative to promote responsible
gaming in Mauritius and Rodrigues in the future.
Lottotech’s most notable game is the Loto. There is no cap on the
amount of times that a Loto jackpot can roll over, creating the
potential for large jackpots, such as the Loto jackpot that reached
MUR77m in December 2013.
Lottotech has introduced a number of innovative Quick Win games
since its launch. The Company carries out regular market studies
and introduces new Quick Win games on a regular basis in line with
market preferences.
The combined player participation rate for Loto and Quick Win
games is about 75% of the adult population, with an almost equal
participation of men and women (source: Ipsos Reid, 2013). Unlike
gambling, games offered by the Company provide its customers
with a unique experience of “play small, win big”.
6
4. Overview of the business (contd.)
4.7 Good causes
4.8 Turnover
Lottotech contributes significantly to the Consolidated Fund of
the Government of Mauritius. As per the GRA Act, any money paid
into the Consolidated Fund is used to finance the implementation
of projects relating to community development, the promotion
of education, health, sports and culture and for reimbursement of
public debt of the Government of Mauritius.
With a turnover of MUR3.9bn for the 18 months ended 31 December
2013, Lottotech runs a substantial and profitable gaming operation,
despite it being a relatively young gaming company.
Since the launch of the Mauritius National Lottery to 31 December
2013, Lottotech has contributed around MUR2.5bn directly to the
Consolidated Fund. Lottotech also contributes to the National
Solidarity Fund by handing over unclaimed prizes. Over the same
period, the Company has contributed around MUR175m to this
fund, which is used to improve the lives of the most vulnerable
Mauritian citizens.
Projects which have been or will be financed by the Government
of Mauritius out of the proceeds of the Mauritius National Lottery
through the Consolidated Fund include the following:
• Promotion of education
- Multi-purpose halls and gymnasiums
- Playfields
- Improving school environment and facilities
- Extension of pre-primary education grants to 3 year olds
- Running expenses of 6 additional shelters for children
- School IT program (computing device for Form IV students)
- Crèche facilities for poor families
• Promotion of health
- Mediclinics
- Institute for Women’s Health
- Paediatric hospital
- Awareness campaign against non-communicable diseases
4.9 At a glance in numbers – from start of
operations to 31 December 2013
Gross ticket
Gross
sales
ticket
sales
Gross
ticket
sales
MUR11.52bn
Gross
ticket
sales
MUR
11.52bn
MUR
11.52bn
Gross ticket sales
Gross11.52bn
ticket
sales
MUR
MUR
Gross 11.52bn
ticket sales
MUR
11.52bn
Gross
ticket
sales
Gross to
ticket
sales
MUR
11.52bn
Prizes
winners
Prizes
to winners
MUR
11.52bn
Gross
ticket
sales
MUR
11.52bn
MUR
MUR
Prizes to6.06bn
winners
Prizes
to
winners
Prizes6.06bn
to winners
MUR6.06bn
MUR
11.52bn
6.06bn
MUR
Prizes6.06bn
to winners
Prizes to winners
MUR 6.06bn
Contributions
Contributions
to
to
Prizes
to winners
MUR
6.06bn
Prizes to winners
Consolidated
Consolidated
fund
fund
Contributions
to
Contributions
to
MUR
6.06bn
MUR
6.06bn
Prizes
to winners
MUR
2.5bn
MUR
2.5bn
Consolidated
fund
Consolidated
fund
Contributions
to
Contributions
to to
MUR
6.06bn
Contributions
MUR
2.5bn
Consolidated
fund
MUR
2.5bn
C
o
n
s
o
l i d a t e dfund
Consolidated
Contributions
to
Contributions
to
Retailers
Retailers
MUR 2.5bn
Fundfund
Consolidated
fund
MUR
2.5bn
Consolidated
Contributions
to
895
895
MUR2.5bn
Retailers
Retailers
MUR
2.5bn fund
MUR 2.5bn
Consolidated
895
Retailers 895
MUR
2.5bn
Retailers
895
Retailers
895
Retailers’
Retailers’
Retailers Retailers
895
Commissions
Commissions
895
895
Retailers’
Retailers
Retailers’
MUR
637m
MUR
Commissions
895 637m
Retailers’Commissions
Retailers’
MUR 637m
MUR
637m
Commissions
Commissions
Retailers’
Retailers’
MUR 637m
MUR 637m
Commissions
Commissions
Retailers’
Retailers’
MUR
637m
MUR 637m
Commissions
commissions
Loto jackpot
Loto
jackpot
Lotowinner
jackpot
winners
Loto
jackpot
108
millionaires
108winner
million
Loto
jackpot
108
millionaires
Loto
jackpot
winner
108
108 millionaires
Lotomillion
jackpot
108
millionaires
Loto
jackpot
Number
of
Number
Loto
of L
Loto jackpot
winner
108 million
draw
winners
draw
winner
Number
of L
Number
of of
Loto
108
million
Loto
jackpot
Number
Loto
108
millionaires
About
13.8m
About
13.8
draw
winner
draw
winners
draw
winners
Number of
Loto
108
million
Number
of L
About
13.8
About
About
13.8m
draw13.8m
winners
draw
winner
Contributions
Contributi
Number
Number
of Loto of L
About
13.8m
to
National
to
National
About
13.8
draw
winner
draw
winners
Contributi
Contributions
Number
of
Solidarity
fund
Solidarity
funL
About
13.8
to
National
About
13.8m
to
National
draw
winner
Contributions
Contributions
MUR
175m
MUR
Solidarity
fun
Contributi
Solidarity
fund 175m
toNational
National
About
13.8
to
to
National
MUR
175m
Contributi
MUR
175m
Contributions
Solidarity
fund Loto
Solidarity
Fund
Highest
Loto
Highest
Solidarity
fun
to National
to
National
MUR
175m
Contributi
Jackpot
Jackpot
MUR175m
MUR
175m
Solidarity
fun
Solidarity
fund
Highest
Loto
Highest Loto
to
National
MUR
77m
77m
MUR
175m
Jackpot
MUR
175m
Jackpot
Solidarity fun
Highest Loto
Highest
Loto
MUR
77m
Jackpot
MUR
77m
MUR
175m
Jackpot
Highest
Loto
Highest
Loto
Highest
Loto
MUR 77m
Jackpot
Jackpot
MUR
77m
jackpot
Highest Loto
MUR
77m
MUR77m
MUR 77m
Jackpot
MUR 77m
MUR
637m
MUR637m
• Promotion of sport, arts and culture
- Multi sports complex
- Construction of Galerie d’Art Nationale
- National History Museum
- Trianon indentured labourers barracks
- La Tour Koenig restoration works
- Scheme for concerts
- Schemes for performance arts groups
- Beekrumsing Ramlallah Interpretation Centre (Aapravasi Ghat)
- Covering ground and synthetic track (Anjalay Stadium)
• Community development
- Water grants scheme
- Extension of land drainage program
- Setting up of Syndic for maintenance of housing estates
7
4. Overview of the business (contd.)
4.10 Gaming and gambling market in Mauritius
The market in Mauritius for gaming and gambling is substantial. In 2013, Business Magazine estimated the total market to be worth MUR20bn
per annum.
Figure 1 – Gaming and gambling market composition
Market share of the Mauritius National Lottery
Source: Business Magazine, 2013
4.11 World gaming market
Figure 2 – The worldwide gaming market trends (USDbn)
Source: GBGC Analysis – Data net of prizes, data relating to 2012
and subsequent years are estimates.
Since 2007, the worldwide gaming market has registered a gradual increase in revenue. The role of interactive (i.e. internet-based) gaming is
expected to grow at a proportionally greater rate than other types of gaming. There are two primary reasons for the growth of this sector on
the global level and they are partially complementary. The areas in rapid expansion benefit from the growth of individual income and from
a market that is not overly developed, which presents good long-term development opportunities.
In 2012, interactive gaming, as a portion of the overall worldwide gaming market, represented a share of 8.9%, equivalent to a value of
USD38bn net in prizes.
8
5. Shareholding structure of Lottotech
The shareholders of Lottotech prior to the Offer for Sale are the
SIC with 25% shareholding and subsidiaries of Gamma with 75%
shareholding of the Company.
Gamma is an investment holding company and a leading building
materials, construction, property and lottery gaming group founded
in 1987 and ranks amongst the Top 20 companies in Mauritius.
Gamma has been listed on the Official List of the Stock Exchange of
Mauritius Ltd since November 1994 and has a market capitalisation
of MUR5.9bn as at 10 March 2014. Gamma is among the top 5 most
performing stocks on the SEM from date of introduction to end of
March 2014 (source: The Stock Exchange of Mauritius Ltd).
The SIC is the investment arm of the Government of Mauritius. The
SIC was founded in 1984 and its main objective is to provide funds
for the realisation of high growth entrepreneurial ventures and
to assist businesses to develop to industry leadership positions.
Over its 30 years of existence, the SIC has developed into a solid
conglomerate with a strong and well-diversified portfolio. The
SIC has a solid reputation and its endorsement of any project is
considered a strength and key contributor to success. Throughout
the years, the SIC has proven to be a valuable partner for local
and foreign entrepreneurs and institutions desirous of setting up
ventures in Mauritius, Rodrigues and the Indian Ocean region.
Up to 85,000,000 existing ordinary shares will be sold by the current
shareholders pursuant to this Offer for Sale. The shareholding
structures prior to the Offer for Sale and post-listing are set out
below:
Figure 3 – Shareholding structure of Lottotech prior to the Offer for Sale
The State Investment
Corporation Ltd
Gamma-Civic Ltd
100%
Gamma
Leisure Ltd
18.75%
100%
100%
Maurilot
Investments Ltd
18.75%
99%
Natlot
Investments Ltd
Glot Holdings
(Mauritius) Ltd
18.75%
25%
18.75%
LOTTOTECH LTD
Figure 4 – Shareholding structure post listing of Lottotech
The State Investment
Corporation Ltd
Gamma-Civic Ltd
100%
Gamma
Leisure Ltd
Minimum
14.0625%
100%
Maurilot
Investments Ltd
Minimum
14.0625%
100%
99%
Natlot
Investments Ltd
Minimum
14.0625%
General Public
Glot Holdings
(Mauritius) Ltd
Minimum
14.0625%
Minimum
18.75%
Maximum
25%
LOTTOTECH LTD
9
6. Key strengths
There are a number of key factors that give Lottotech a competitive
advantage. They include:
6.1 Exclusive lottery licence
Lottotech is the exclusive Operator of the Mauritius National Lottery
on behalf of the Government of Mauritius. Under the GRA Act, the
Operator means a company promoted by the SIC and licensed to
operate the Mauritius National Lottery and video lottery terminals.
The GRA Act stipulates that there shall, at no time, be more than
one operator holding a licence to operate the Mauritius National
Lottery.
In April 2009, Gamma entered into a shareholders’ agreement
with the SIC for Lottotech to implement and operate the Mauritius
National Lottery and SIC became a shareholder of Lottotech. The
agreement stipulates that the parties shall cause Lottotech to
obtain the licence to operate the Mauritius National Lottery and
they shall not directly or indirectly compete with Lottotech.
In April 2009, the GRA issued an exclusive licence to Lottotech
to operate the Mauritius National Lottery for a period of
10 years, renewable for further successive periods not exceeding
5 years each.
6.2 Gaming industry
The gaming and gambling market in Mauritius is substantial and
estimated to be worth MUR20bn per annum by Business Magazine.
Despite a downturn in the economy, Lottotech’s business has
proven to be resilient. Lottotech’s leading position in the gaming
market, its trusted brands and its experience in operating within the
Mauritian regulatory framework, have contributed positively to the
development of the Company.
Lottotech is in regular dialogue with the GRA to develop the
industry further. Lottotech has built a solid foundation upon which
to consolidate its market position in the gaming and gambling
industry through product innovation in a regulated environment as
opposed to gambling in the unregulated ‘grey’ market.
6.3 Strong brands
Although Lottotech is only in its fourth year of operations, it has
in Loto one of the most trusted and highly recognisable brands in
Mauritius and Rodrigues. According to a survey undertaken in 2013
by Ipsos Reid, a global market research company, Loto achieved a
100% score in both spontaneous brand awareness and aided brand
awareness surveys. The survey also showed that Loto enjoys a very
good reputation which gives it a competitive edge in the gaming and
gambling market where attracting and retaining customers is key to
the development of the business of the Company. Among its Quick
Win games, Lottotech has other highly recognisable brands such as
Millionaire, Diamants, Wingo and La Vie Douce.
Player participation rate for Loto and Quick Win games combined is
high and estimated to be around 75% of the adult population, with
an almost equal participation of men and women (source; Ipsos Reid,
2013). Unlike gambling, the games offered by the Company provide
its customers with a unique experience of “play small, win big”.
10
Lottotech continues to invest in marketing activities to build customer
awareness. Lottotech has geared its communication strategy towards
educating the public about how to play and what they are playing for
in a transparent manner, promoting responsible gaming, including
the prevention of under-age play.
Lottotech has built a strong brand heritage as a trusted provider of
safe and responsible gaming and achieved national recognition.
These have helped the Company to reach its current stage of
development.
6.4 Integral distribution network
The Company’s distribution network comprised of 542 retailers at
the time of launch. This has since been expanded to 895 retailers
during the last quarter of 2013. Lottotech’s distribution network
covers Mauritius and Rodrigues. By the end of December 2014,
Lottotech is expected to increase this number to 1,000 retailers. This
will represent a ratio of one terminal per 1,286 inhabitants, which
is in line with worldwide gaming industry best practice. Lottotech
carefully selects its retailers in order to optimise its presence and
the visibility of its products throughout Mauritius and Rodrigues.
The Company evaluates the retailer’s ability in managing the lottery
business before appointing the retailer. All retailers have to be
approved by the GRA. The Company continues to build a strong
retailer network through shops and dedicated kiosks in high traffic
areas such as shopping malls and an “in lane” presence at multi-lane
large supermarket outlets.
The retailers play a key role in the success of Lottotech, as they
are a strategic source of information for Lottotech. The Company
continuously reviews the performance of retailers and provides
training to them to ensure that the customer service delivered by
the retailers is of the required standard. In connection with this
review process, Lottotech seeks to reward top performing retailers
by presenting them with end of year awards and focuses on
opening new points of sale and closing points of sale with lower
revenue potential. The Company is proud to have long-standing
relationships with its retailers, and it seeks ways to reinforce these
relationships through on-going dialogue and training.
The size and breadth of its retailer network provide Lottotech
with a competitive edge in the gaming market in terms of brand
recognition, economies of scale and capturing market share from
the gambling sector, in particular the unregulated ‘grey’ market.
6.5 GTECH, the leader in gaming technology
worldwide
GTECH is the exclusive technology partner to Lottotech and is a
leading lottery operator and provider of technology solutions and
systems to regulated gaming markets worldwide.
GTECH is a company listed on the Milan Stock Exchange. GTECH
has customers in over 100 countries and is a technology provider
to well-known national lotteries including Camelot the UK National
Lottery, La Francaise des Jeux and Singapore Pools.
6. Key strengths (contd.)
6.5 GTECH, the leader in gaming technology
worldwide (Contd.)
In August 2008, Lottotech entered into agreements with GTECH as
Lottotech’s exclusive technology partner namely:
• A Lottery Equipment Supply Agreement for the supply of retailer
terminals, central system hardware and spare parts; and
• A Lottery Technology Supply and Support Agreement for the
development of software applications, granting of software
licences and the provision of on-going technical, marketing and
management support services.
6.6 State of the art IT infrastructure
Lottotech has invested significant resources to develop an extensive
integrated state of the art IT infrastructure to support its gaming
operations including a nationwide network of retailers. The IT
operations are conducted from the Company’s head office in Ebène
CyberCity, together with back-up systems in a remote location at
Beau Bassin. With a dual network mechanism operating both on
the Emtel and Orange communication systems, Lottotech ensures
seamless data transmission to ensure the proper functioning of its
systems at all times.
Lottotech has signed a technology supply and support agreement
with GTECH to provide lottery technology services to the Company.
GTECH has supplied, the Company, with proven technology
and certified equipment in support of Lottotech’s efficient and
highly-secured gaming operations.
Lottotech has also worked with IBM and Oracle to set up a seamless
state of the art technology infrastructure with the highest level of
data integrity in accordance with the GRA Act. The GRA has access
to all of the data which resides on the Company’s server.
Lottotech also secured the ISO 27001 certification in 2013, which
is currently the world’s highest standard for information security
management systems. Lottotech adopts internationally recognised
best practices to enhance the security of its services to its customers.
11
6. Key strengths (contd.)
6.7 Management with extensive global and local
gaming industry experience
The Board is responsible for steering, monitoring and overseeing
the business and activity of the Company in order to safeguard and
enhance its total value and returns. It is the decision making body
for all matters which are of significance to the Company as a whole
because of their strategic, financial and reputational implications
and/or consequences, whilst ensuring that management strikes
the right balance between delivering short and medium term
objectives, and promoting long-term growth.
To ensure that the Board fulfils its responsibilities effectively, in
2009 it appointed ASB, a management company providing services
to the lottery sector, to set up the appropriate management team
and assist it in the operation of the Mauritius National Lottery and
in the strategy and business development of the Company. ASB is a
subsidiary of Gamma.
Since its launch, Lottotech has assembled an experienced senior
management team with a proven track record across the global
and local gaming industry. The experienced senior management
team has combined skills in product development, retail network
development, marketing and communications, technology and risk
management.
Michelle Carinci, a Canadian national, was appointed in March
2012 as the Chief Executive Officer of the Company and has
proven leadership in operations and innovation both locally
and internationally, with over 35 years’ experience in the gaming
industry. Prior to joining Lottotech, Michelle held the position of
CEO at Atlantic Lottery Corporation. Prior to joining Atlantic Lottery
Corporation, she was President of Gamescape, a wholly-owned
subsidiary of GTECH and a Corporate Vice President in charge of
marketing and customer relations at GTECH. She has also been
recognised four times as one of the top 50 CEOs in Atlantic Canada
and is an inductee into the Lottery Hall of Fame class of 2006.
Lottotech also benefits from the industry knowledge and experience
of its technology partner, GTECH.
6.8 Management agreement
In November 2009, Gamma signed a management agreement with
Lottotech through ASB to provide management services to the
Company.
Gamma has been a promoter of Lottotech since inception and
assists and supervises management in the operation of the Mauritius
National Lottery and in the strategy and business development of
the Company.
The following services are also provided by Gamma to the Company
as per the management agreement:
• Marketing and sales and product development;
• Human resources and administrative support;
• Finance and procurement support;
• Management information systems and security; and
• Legal, accounting, information technology, secretarial and risk
management services.
12
6.9 Human capital and innovation
The Human Resources department of the Company focuses on
providing people solutions to the business through effective
strategic recruitment, retention of talented individuals, developing
essential skills of employees, sustaining engagement at work
and helping to improve performance on the job. Through a
well-established learning, training and development platform,
opportunities are created for Lottotech’s employees to develop new
skills and experiences, helping them to achieve their career goals
and ultimately creating value for the Company.
6.10 Integrity, transparency and responsible gaming
Given the high profile nature of Lottotech’s operations, values such
as integrity and concepts such as transparency, good governance
and social responsibility are fundamental in inspiring confidence
and credibility as a lottery operator. In that respect, Lottotech
has invested and implemented a series of measures to build and
maintain its credibility as a responsible gaming company, including
a dedicated service for player protection that provides advice to
those dealing with gambling addiction.
Lottotech works closely with authorities such as the GRA and La
Police des Jeux to ensure compliance with the laws and regulations
which govern the gaming industry. All games are approved by the
GRA prior to launch. GRA officials are present during the weekly Loto
draws as well as the Millionaire shows. In addition to responsible
gaming, Lottotech has set a clear vision for its Corporate Social
Responsibility initiatives. Together with the GRA, Lottotech will
lead an initiative to promote responsible gaming in Mauritius and
Rodrigues in the future.
6.11 Membership of the WLA
Lottotech is a member of the WLA, the global authority on
lottery businesses. As a member of the WLA, Lottotech’s duties
are not only to grow revenue and returns to good causes but
also to facilitate responsible play. With that in mind, the WLA has
adopted the Responsible Gaming Principles and a Responsible
Gaming Framework with the aim of protecting lottery customers
around the world. By adopting these principles, WLA members
have “committed their vigilance in making responsible gaming an
integral part of their daily operations.” This effort and commitment
will ensure that the public is protected and revenues for the public
good are sustained.
The reputation of Lottotech among consumers as a trusted provider
of safe and responsible gaming is integral to its success in the
Mauritian gaming market.
7. Business strategy
One of Lottotech’s main objectives is to deliver profitable and
sustainable growth. The Company’s strategy is set out below:
7.1 Opportunities in core activities
The proposal submitted by Lottotech to implement and operate
the Mauritius National Lottery included a structured game plan
to launch a number of games in the initial years of the licence in
Mauritius and Rodrigues. However, subsequently the GRA did not
approve all the games as proposed in the structured game plan. This
resulted in the Company instigating legal action in May 2012 against
the GRA and the Ministry of Finance and Economic Development.
The litigation was resolved before the Mediation Division of the
Supreme Court in October 2012, whereby Lottotech was awarded
a one-off compensation and a reduction in the contribution rate
to the Consolidated Fund for not being able to launch new games
in the initial years of the licence in accordance with the structured
game plan submitted at the time of its proposal.
It is the intention of Lottotech to re-discuss with the GRA the
appropriate timing for the launch of these new games and its
associated conditions in accordance with the structured game
plan as submitted by the Company in its proposal to the SIC, which
includes the following games:
7.2 Opportunities beyond core activities
Lottotech will explore opportunities beyond its current core
activities in Mauritius and Rodrigues, including the following:
• I nternational diversification – Due to its success in Mauritius and
Rodrigues, Lottotech is regularly approached by third parties
to manage, acquire or invest in existing or new lottery or sports
betting operations internationally. Such opportunities will be
evaluated by the Company in order to ensure that they make
strategic and financial sense. Should the Company proceed with
such opportunities, this will significantly grow the revenue of the
Company.
• S ervices – Lottotech has an advanced technology and IT
infrastructure that can be leveraged to provide transaction
processing of non-lottery commercial transactions. The Company’s
retailer terminals can be used, through software programming, to
process a wide range of cash payments (including utility bills and
certain taxes such as municipal and car registration fees) and to
buy top-up prepaid phone cards and financial services products.
The Directors believe that the ‘convenience payment services’
market is worth exploring as this will potentially make the lives of
Mauritian people easier.
• Second Loto weekly draw;
• 1-2-3 daily game;
• KENO;
• Video Lottery Terminals (“VLTs”); and
• Mobile wagering and interactive games.
These games are operated by well-known national lotteries
including the UK National Lottery and La Francaise des Jeux. Should
Lottotech proceed with the launch of any of these games, this will
significantly grow the revenue of the Company.
Following the examples of most regulated national lotteries
worldwide, Lottotech is in the process of developing its digital road
map in the area of online lottery and interactive gaming. With an
increasing number of Mauritians having access to the internet,
online lottery and interactive gaming will enable the Company to
capture market share from the unregulated ‘grey’ gambling sector
and to significantly grow the revenue of the Company, should
Lottotech proceed with these opportunities.
In the meantime, Lottotech intends to introduce enhancements
to its existing Loto game. These enhancements will add to the
consumer experience of “play small, win big”. The experience of our
senior management team indicates that these enhancements will
significantly grow the revenue of the Company, should Lottotech
proceed with these enhancements.
Lottotech will also explore opportunities in the future in
complementary activities such as sports games and betting.
Sports games and betting are operated by well-known national
lotteries including La Francaise des Jeux and Singapore Pools. These
games will significantly grow the revenue of the Company, should
Lottotech proceed with these opportunities.
13
8. Rationale for the proposed Listing
10. SUMMARY OF THE ISSUE
The Directors believe that the Company has now reached a stage
in its development where a listing on the Official List of the Stock
Exchange of Mauritius Ltd is appropriate. The reasons for listing the
Company are as follows:
10.1 Nature and amount of the issue
• A
listing will enhance the status of the Company and provide
greater flexibility for the planning and financing of the future
growth of the Company. The Company’s ability to enter
complementary gaming markets, both directly and by acquisition,
will increase. Although no specific acquisition proposals are
currently under consideration, the Company intends to expand
its operations when suitable opportunities occur;
The Offer for Sale to the public of up to 85,000,000 ordinary shares
of no par value at an issue price of MUR10 each, is fully payable
on application. Following the Offer for Sale, 340,000,000 ordinary
shares of no par value will be listed on the Official List of the Stock
Exchange of Mauritius Ltd.
Shareholders who successfully subscribe to the Offer for Sale
will have their ordinary shares credited to their CDS accounts on
10 June 2014 before trading commences on 11 June 2014.
10.2 Description of rights attached
• I t is the objective of the current shareholders of the Company to
democratise the shareholding of the Company through a listing
on the Official List of the Stock Exchange of Mauritius Ltd, to
further integrate the Company into the economic life of Mauritius
and Rodrigues to give an opportunity to Mauritian and foreign
nationals to participate in the success and profits of the Company;
The ordinary shares rank pari passu in all respects with each other,
including for voting purposes and in full for all dividends and
distributions on ordinary shares declared, made or paid after their
issue and for any distributions made on a winding up of the Company.
• T o fulfil the wish and objective of the current shareholders of the
Company – For a listing on the Official List of the Stock Exchange
of Mauritius Ltd, the Stock Exchange of Mauritius Ltd requires that
the current shareholders of the Company reduce their respective
shareholding from 100% to 75%;
Each ordinary share shall confer upon its holder the right to one vote
on a poll at a meeting of the Company on any resolution.
• T o enable the retailers of Lottotech and directors and employees
of the Gamma group of companies and SIC to become
shareholders of the Company – The listing will help the Company
to attract and retain high calibre staff and enhance management,
employee and retailer motivation; and
• T o enable the market value of the Company’s ordinary shares to
be readily ascertained.
9. Dividend policy
As per Lottotech’s constitution, the Company shall distribute a
minimum of 75% of its annual net profit after tax as dividend, except
as otherwise resolved by the shareholders by way of Ordinary
Resolution.
The Board has a target dividend policy whereby almost 100% of
net profit after tax is declared as dividends, subject to the Company
meeting the Solvency Test.
As a general rule, it is expected that the Company will declare an
interim dividend in or around August and a final dividend in or
around March following the year-end.
14
10.3 Voting
10.4 Dividends
Each ordinary share shall confer upon its holder the right to an equal
share in dividends authorised by the Board.
10.5 Distribution on the winding up of the Company
Each ordinary share shall confer upon its holder the right to an equal
share in the distribution of surplus assets of the Company.
10.6 Redemption
The ordinary shares on Offer for Sale are not redeemable.
However, the Company may purchase or contract to purchase
any of its ordinary shares, subject to the Listing Rules and the
Companies Act 2001.
10.7 Offer price
The offer price per ordinary share is MUR10. This represents a
discount of about 10% to the valuation as determined by the
independent valuers, KPMG.
10. SUMMARY OF THE ISSUE (contd.)
10.8 Timetable
Event
Date
Opening of Offer for Sale
5 May 2014
Closing of Offer for Sale
16 May 2014
Allotment of fully-paid ordinary shares to shareholders
9 June 2014
Dispatch of allotment letters to shareholders and refund of unsuccessful applications, if any
9 June 2014
CDS accounts credited
10 June 2014
Commencement of trading of ordinary shares on the Official List of the Stock Exchange of Mauritius Ltd
11 June 2014
10.9 Application procedures
Acceptance may only be made by filling in and signing the relevant
application forms attached to these Listing Particulars. Applicants
for the Offer for Sale should apply for the ordinary shares by filling
in and signing the “Application Form for the Offer for Sale”. The
respective form must be returned with the payment of MUR10 per
ordinary share applied for to any licensed investment dealer (see
Section 21) not later than 4:00 pm on 16 May 2014. Acceptances are
irrevocable and may not be withdrawn.
10.10 Method of payment
Crossed cheques drawn to the order of Lottotech Ltd for the total
consideration with the properly completed and signed appropriate
form(s) must reach the licensed investment dealers not later than
4:00 pm on 16 May 2014. Receipts will be issued thereon.
Should a cheque in payment of an application for ordinary shares
be dishonoured by the drawer’s bank, the application will be
considered as null / void and will not be considered. No cash
payments will be accepted.
No remittance should be sent by post except for non-residents,
both Mauritians and non-Mauritians, who should ensure that their
application form and full remittance reach the licensed investment
dealers, not later than 4:00 pm on 16 May 2014.
10.11 Completion of the share transfer form
Applicants for the Offer for Sale must complete the transferee
sections of the Share Transfer Form attached in this document in
order for their application to be valid.
Up to 20% of the ordinary shares on offer will be reserved to be
allocated to retailers of Lottotech, directors and employees of
Gamma group of companies and SIC, with a discount of 5% on the
offer price.
The balance of the ordinary shares on offer will be allocated to
the public.
For the reserved shares, the Board of Lottotech will define the
allotment criteria and retains the right to allocate the ordinary
shares in such a manner as it deems appropriate. In the event of
over-subscription of the ordinary shares allocated to the public,
the Board will define the allotment criteria and retains the right
to allocate the ordinary shares in such a manner as it deems
appropriate.
The above allotments are subject to the approval of the relevant
regulatory authorities.
Any confirmation of ownership and any monies returnable to the
applicant may be retained pending clearance of the applicant’s
remittance. Such monies will not bear interest for the applicant’s
account. Therefore all documents in connection with the Offer for
Sale and any returned monies will be sent to the applicant by bank
transfer.
10.13 Minimum offer
This Offer for Sale shall be withdrawn if the number of ordinary
shares applied for is below 34,000,000 ordinary shares. In the event
that this minimum offer is not met, Lottotech shall refund applicants
the full amount paid for the purchase of the ordinary shares.
Please note only the shaded sections should be completed by
the applicant. The remaining sections will be completed by the
Company Registrar.
10.12 Allotment of ordinary shares
The allotment of ordinary shares will be effected by the 9 June 2014.
Applicants for the Offer for Sale, who have been allotted ordinary
shares will have their CDS accounts credited by 10 June 2014. A
letter will be sent to confirm the number of ordinary shares credited.
15
11. Independent valuation of LOTTOTECH
KPMG Advisory Services Ltd
KPMG Centre
31 Cybercity
Ebène
Mauritius
The Directors
Lottotech Ltd
HSBC Centre
Cybercity
Ebène
Telephone
Telefax
Internet
BRN
+230 406 9999
+230 406 9988
www.kpmg.mu
C06010081
Our ref HBB/ral/11314
24 February 2014
Dear Sirs
Independent Valuation of Lottotech Ltd
KPMG Advisory Services Ltd (“KPMG”) was appointed by Lottotech Ltd to perform an independent valuation of
the shares of Lottotech Ltd.
Scope of work
Our scope and limitations are set out in our engagement letter to Lottotech Ltd. In arriving at our valuation
conclusion, we applied generally accepted valuation procedures based upon economic and market factors as
of the Valuation Date.
Key valuation considerations
In arriving at our valuation conclusion, we have undertaken the following procedures in the fair valuation of
the equity of Lottotech Ltd:
• considered the historical performance of Lottotech Ltd with reference to its audited financial statements
for the financial years ended 30 June 2010, 2011 and 2012, and representations made by management of
Lottotech Ltd (“Management”);
• considered Lottotech Ltd’s concession period and the risks associated with its renewal, game plan
variations, licencing and regulatory conditions, and the stage at which the business is in its lifecycle;
• considered the unaudited management accounts of Lottotech Ltd as at 31 December 2013;
• held discussions with the directors and management of Lottotech Ltd around its strategy and outlook, and
considered other matters as we consider necessary, including assessment of the prevailing economic,
legal and market conditions in the industry;
• evaluated the risks and expected returns associated with Lottotech Ltd;
•
reviewed Management’s forecast (the “Forecasts”) in respect of Lottotech Ltd and the basis of the
assumptions therein including the prospects of the business. The review included an assessment of the
historical performance as well as the reasonableness of the outlook assumed based on representations
made by Management;
• reviewed the reasonableness of material assumptions in the Forecasts relating to revenue growth.
Adjustments which we deemed to be appropriate were made to the Forecasts.
KPMG Advisory Services Ltd, a Mauritian limited liability company and
a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”),
a Swiss entity.
16
11. Independent valuation of LOTTOTECH (contd.)
Valuation
The discounted cash flow methodology was the primary valuation methodology employed in undertaking
this valuation. Lottotech Ltd is at an early stage in its life cycle, conducts its business on a cash basis and has a
future growth potential which can be captured by the discounted cash flow method.
Pursuant to our valuation exercise, we estimate the fair value of the equity of Lottotech Ltd, on a marketable
controlling basis, to be MUR3.8 billion as at 31 December 2013 (the “Valuation Date”).
The valuation analysis is based on prevailing conditions and KPMG’s view as at 24 February 2014. KPMG has
not undertaken to nor shall KPMG be under any obligation to update the report or revise the information
contained in its report for events or circumstances arising after the 24 February 2014 and the presentation
or any information contained in the presentation shall not amount to any form of guarantee that KPMG have
determined or predicted future events or circumstances.
Limitations
We have relied upon and assumed, without independent verification, the accuracy and completeness of any
information provided to, and/or gathered by KPMG whether from public sources or otherwise, and accordingly
we express no opinion or make any representation concerning the accuracy and completeness of any such
information contained in this report. We have reviewed the information and have sought explanations
for key trends and salient features identified by us. We have also satisfied ourselves, as far as possible, that
the information presented is consistent with other information obtained by us in the course of the work
undertaken to prepare this report.
This engagement has not been performed by us in the capacity as a Licenced Auditor and does not constitute
an audit or review, due diligence, or other assurance engagement or an agreedupon procedures engagement,
performed in accordance with International Standards on Auditing (ISAs), International Standards on Review
Engagements (ISREs), International Standards on Assurance Engagements (ISAEs) or International Standards
on Engagements to perform Agreed-upon Procedures regarding Financial Information.
Furthermore, prospective financial information used in the engagement will contain forwardlooking
statements with respect to the Lottotech Ltd’s business financial condition and results of operations. Such
information is subject to risks and uncertainties that could cause actual results to differ materially from
those forecasted since anticipated events frequently do not occur as expected, accordingly no assurance is
expressed regarding the achievability of the forecast.
The valuation is a function of the assumptions incorporated within the valuation methodology. In particular,
the valuation assumes that the historical performance as indicated by management is sustainable or, as a
minimum, understood by a potential investor who has a similar outlook of the projected level of cash flow.
Independence
We confirm that we have no direct or indirect material financial interest in Lottotech Ltd, nor have the right to
subscribe for or to nominate persons to subscribe for shares in Lottotech Ltd.
17
11. Independent valuation of LOTTOTECH (contd.)
Consent
We consent to the inclusion of this letter and the reference to our valuation in the listing particulars to be issued
by Lottotech Ltd in the form and context in which it appears and in any required regulatory announcement
or documentation.
Yours faithfully
Huns Biltoo
Partner
18
12. Pro Forma financial information
Pro forma financial information has been prepared for Lottotech to
illustrate the impact of significant events on the audited financial
information of the Company, as if these events had occurred or the
transactions had been undertaken at an earlier date than the one
in which they were registered in the audited financial statements.
The pro forma financial information disclosed in sections 12.1 to
12.2 reconcile with the entity’s actual financial position as at 31
December 2013. The adjustments brought to arrive at the pro forma
financial information are disclosed in section 12.3.
12.1 Pro forma income statements
represent 18 months of operations compared to 12 months for the
previous year’s audited accounts. To ensure easier comparability
of Lottotech’s performance in 2013, the unaudited results for the
12 months to 30 June 2013 have also been disclosed. The audited
financial statements for the years ended 30 June 2011 and 2012
and for the 18 months ended 31 December 2013 are set out in
section 17.
Please refer to section 12.3 for details on the adjustments to the
financial performance and the reconciliation of these adjustments
to the audited accounts.
In 2013, Lottotech changed its financial year end from June
to December. As such, the latest audited financial statements
Table 1 – Pro forma income statements for the years ended 30 June 2011, 2012, 2013 and 18 months to 31 December 2013
MURm
Notes
Gross ticket sales
1
Loto
Instant games
Prizes
Net proceeds
2
18 months to 31
December 2013
FY13
12 months to 30
June 2013
12 months to 30
June 2012
FY12
12 months to 30
June 2011
FY11
Adjusted
Audited
Adjusted
Unaudited
Adjusted
Audited
Adjusted
Audited
3,876
2,550
2,597
3,161
3,028
2,023
1,940
1,835
848
527
657
1,326
(1,998)
(1,313)
(1,338)
(1,704)
1,878
1,237
1,259
1,457
(867)
(571)
(608)
(704)
46.17%
46.16%
48.29%
48.32%
(476)
(313)
(324)
(397)
535
353
327
356
13.80%
13.84%
12.59%
11.26%
Adjusted administrative expenses
(305)
(198)
(224)
(266)
Adjusted operating profit/(loss)
230
155
103
90
Adjusted operating profit margin
5.93%
6.08%
3.97%
2.85%
11
10
5
(3)
Adjusted contribution to Consolidated Fund
1
Contribution to Consolidated Fund as a % of net proceeds
Cost of sales2
Adjusted gross profit
3
Gross profit margin
3
Finance income/(costs)
Adjusted profit before taxation (“PBT”)
241
165
108
87
6.22%
6.47%
4.16%
2.75%
Adjusted income tax expense4
(42)
(28)
(20)
(12)
Pro forma profit after taxation(“PAT”)
199
137
88
75
5.13%
5.37%
3.39%
2.37%
0.395
0.40
0.26
0.22
Adjusted PBT margin
Adjusted PAT margin
MUR
Pro forma EPS
ctual contributions to the Consolidated Fund have been retrospectively adjusted following the ruling of the Mediation Division of the Supreme Court in October 2012. Refer to
A
Section 12.3 for a full discussion of the adjustments made.
2
Stock provisions booked in the period to 31 December 2013, have been reallocated to prior periods on the basis of the launch date of the Quick Win games. Refer to Section 12.3
for a full discussion of the adjustments made.
3
A number of expenses were directly related to the contributions to the Consolidated Fund adjustment and have also been reallocated to prior accounting periods in line with the
revenue adjustment. Refer to Section 12.3 for a full discussion of the adjustments made.
4
The consequential impact of the adjustments to the above figures has resulted in the recomputation of income tax for each relevant accounting period. Refer to Section 12.3 for
a full discussion of the adjustments made.
5
Annualised figures.
1
19
12. Pro Forma financial information (contd.)
12.1 Pro forma income statements (Contd.)
In FY13, Lottotech has taken a number of initiatives in terms of cost cutting and operational optimisation which the Board believes will bear
fruit as from FY14. In order to provide a better picture of the potential of Lottotech, the Company carried out an impact analysis (the “Impact
Analysis”) to determine the annualised PAT for FY13 as if these measures have been fully implemented for a full year, as set out below.
Table 2 – Impact Analysis on annualised pro forma PAT
MURm
Notes
Annualised pro forma PAT
Annualised
FY13
133
Cost savings:
Salary of Directors
4
13
Re-organisation costs
5
16
Renegotiation of advertising agencies’ fees
6
9
Retailer expansion expenses
7
8
Impact of cost savings before tax
Effective tax rate
46
17%
Tax charge on cost savings at effective rate
(8)
Impact of cost savings after tax
38
Adjusted pro forma PAT post Impact Analysis
171
MUR
Adjusted pro forma EPS post Impact Analysis
0.50
Annualised pro forma PAT for FY13 works out at MUR133m. This represents a 51% increase in PAT over 2012, which can be mainly attributed
to cost cutting measures.
With the application of the cost cutting and operational optimisation measures, the annualised adjusted pro forma PAT works out to be
MUR171m for FY13.
Annualised pro forma EPS for FY13 amounts to MUR0.39 compared to MUR0.26 for FY12. When the cost optimisation plan is taken into
account, the annualised adjusted pro forma EPS works out at MUR0.50 for FY13.
20
12. Pro Forma financial information (contd.)
12.1 Pro forma income statements (Contd.)
The above pro forma income statements (Table 1) and the
Impact Analysis on the annualised pro forma PAT (Table 2) are
commented below:
Note 1.For the 12 months ended 30 June 2013, Loto and Quick
Win revenues decreased by 1.8% compared to the
preceding 12 months; this is attributable to a 19.8%
decline in revenue for Quick Win games while revenue for
the Loto game grew by 4.3%.
A new senior management team for the Company was
appointed in 2012/13. The Board established a “Quick
Win Turnaround Committee” to review the management
strategy to improve Quick Win games revenue, following
which a rejuvenation plan was implemented in the
second half of FY13. This has already yielded significant
improvements, with Quick Win revenue increasing by
32%.
Note 7.As part of the Company’s retail expansion to 895 retailers
at 31 December 2013 and up to 1,000 retailers at the end
of 2014, the Board approved additional non-recurring
operating expenses of MUR7.6m, all of which were
expensed in FY13.
12.2 Pro forma financial position
Set out below are the pro forma financial positions of Lottotech
as at 30 June 2011, 2012 and as at 31 December 2013. Refer to
Section 12.3 for details of the adjustments to the pro forma financial
position. No consolidated accounts have been prepared as Lottotech
was exempt from preparing consolidated financial statements
under International Financial Reporting Standards (“IFRS”) 10
paragraph 4. Furthermore, it disposed of its investment in its 100%
subsidiary, namely Gamlot Technologies Ltd at cost, i.e. MUR1,000
on 31 December 2013. Refer to Section 19.13 for further information.
Loto revenue increased slightly in the last 6 months
of FY13. Loto revenue is driven by jackpot sizes and as
jackpots roll over, revenue increases. In the 6 months to
31 December 2013, there were frequent jackpot winners
thereby reducing jackpot rollovers, even though the
highest ever Loto jackpot of MUR77m happened in that
semester.
Note 2.
Net proceeds moved in line with gross ticket sales
and prizes. Contributions to the Consolidated Fund
represented 46.16% of net proceeds in FY13.
Note 3.
Gross profit margins as adjusted, remained stable
throughout the period under review. Cost of sales
includes retailers’ and other commissions, gaming
systems and data communications costs.
Since inception, the Chairman and the Executive
Note 4.
Directors of Lottotech have been actively involved in the
implementation and operation of the Mauritius National
Lottery and in the strategy and business development
of the Company. In view of the listing of the Company,
the Chairman and the Executive Directors have decided
to waive their salaries and fees. As from 1 January 2014,
the Chairman, and the previous Executive Directors have
voluntarily declined their remuneration rights.
Note 5.In FY13, Lottotech proceeded with a major restructuring
of its activities including cost cutting and operational
optimisation measures. The Company has a new
organisation structure with reduced staff levels and
redefined job descriptions. This restructuring resulted in a
one-off ex-gratia payment of MUR2.4m. Additionally, this
exercise will result in annual costs savings of MUR13.4m.
Since January 2014, Lottotech has renegotiated the
Note 6.
contracts with its advertising agencies so that annual
retainer fees have been reduced. This will result in annual
cost savings of MUR8.9m.
21
12. Pro Forma financial information (contd.)
12.2 Pro forma financial position (Contd.)
Table 3 – Pro forma financial position
MURm
31 December 2013
Adjusted
Audited
30 June 2012
Adjusted
Audited
30 June 2011
Adjusted
Audited
230
252
286
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiary
-
-
-
Deferred income tax asset
-
-
7
230
252
293
14
31
36
Trade and other receivables
111
77
101
Cash and cash equivalent
200
254
141
325
362
278
Total assets
555
614
571
100
100
100
-
52
(35)
100
152
65
Borrowings
1
6
9
Gratuity obligations
4
2
1
Deferred income tax liabilities
10
13
-
15
21
10
2
3
114
Current assets
Inventories
Equity and liabilities
Capital and reserves
Stated capital
Accumulated profits/(losses)
Total equity
Non-current liabilities
Current liabilities
Borrowings
-
-
-
353
438
382
Dividend payable
40
-
-
Current tax liabilities
45
-
-
440
441
496
Total liabilities
455
462
506
Total equity and liabilities
555
614
571
Bank overdraft
Trade and other payables
During the period ended 31 December 2013, Lottotech declared a dividend for the first time since it commenced its operations. The Company
declared dividends of MUR250m in the 18 months ended 31 December 2013, of which MUR40m was payable as at 31 December 2013.
22
12. Pro Forma financial information (contd.)
12.3 Adjustments made in arriving at the pro forma
income statements and financial positions
financial statements of the Company at 30 June 2012 amounted to
MUR394m. As part of the ruling, MUR132m were agreed to be paid
by Lottotech to the Consolidated Fund for the periods prior to 30
June 2012. This resulted in a one-off compensation of MUR262m
in FY13 as disclosed in the Company’s audited and IFRS compliant
financial statements. The additional agreed contribution of
MUR132m for FY11 and FY12 explains the higher contribution rate
to the Consolidated Fund at 48.30% compared to 46.16% as from 1
July 2012. Under IFRS, the correction of an accounting estimate is
neither a fundamental error nor a change in an accounting policy
and was therefore fully recognised in the accounting period to 31
December 2013.
Lottotech is required to contribute a percentage of its net proceeds
to the Consolidated Fund. As per its proposal to the SIC, Lottotech
was to contribute 58.01% of its net proceeds to the Consolidated
Fund on the basis that it will launch new games in line with the
structured game plan as submitted in its proposal. However,
subsequently the GRA did not approve all the games as per the
structured game plan. This has resulted in the Company instigating
legal action in May 2012 against the GRA and the Ministry of Finance
and Economic Development.
The litigation was resolved before the Mediation Division of the
Supreme Court in October 2012, whereby Lottotech was awarded
a one-off compensation and a reduction in the contribution rate to
the Consolidated Fund to 46.16% as from 1 July 2012 for not being
able to launch new games in the initial years in accordance with the
structured game plan submitted at the time of its proposal.
To illustrate the impact of this significant event and to present the
financial information of Lottotech as if the event had occurred at the
earlier relevant dates and to ensure a more meaningful analysis of
the performance of Lottotech, the reversal of the above provision
has been adjusted so as to show the financial performance of FY11,
FY12 and FY13 had the Consolidated Fund contribution been as
agreed at mediation. Set out below is the reconciliation of IFRS
audited accounts to the pro forma financial statements as disclosed
in these Listing Particulars.
Until 30 June 2012, the date of the last audited financial statements
prior to the ruling, Lottotech had nevertheless continued to
provide, on a prudence basis, for contributions to the Consolidated
Fund at the rate of 58.01%. The total provision made in the
Table 4 – Reconciliation of the audited PAT to the pro forma PAT
MURm
Notes
Audited PAT
18 months to
31 December
2013
FY13
12 months to
30 June 2012
12 months to
30 June 2012
FY12
12 months to
30 June 2011
FY11
343
366
19
(9)
Adjustments1:
Consolidated Fund adjustments due to a reduction in rate of contribution
following judgment by the Mediation Division of the Supreme Court
1
(262)
(262)
121
141
Management fees adjustments due to a reduction in Consolidated
Fund rate of contribution
2
18
(13)
(8)
(10)
Reallocation of legal & professional fees in connection with settlement of
GRA litigation
3
21
21
(10)
(11)
Reallocation of consultancy fees in connection with settlement of GRA
litigation
3
18
18
(8)
(10)
Reallocation of staff bonus adjustments due to a reduction in
Consolidated Fund rate of contribution
4
17
11
(8)
(9)
Reallocation of stock write off in connection with Quick Win games
rejuvenation plans2
5
24
24
(9)
(6)
Tax expense adjustments due to above adjustments
6
20
(28)
(9)
(11)
199
137
88
75
Adjusted pro forma PAT
1
Some of the adjustments do not net off to zero when comparing 18m FY13 to FY12 and FY11 as balancing adjustments have been reallocated to the 6 month period 1 July 2013 to 31 December 2013.
2
MUR9m have been adjusted in FY10.
23
12. Pro Forma financial information (contd.)
12.3 Adjustments made in arriving at the pro forma
income statements and financial positions (Contd.)
Note 1.The FY13 adjustment of MUR262m has been reallocated to
FY11 and FY12 proportionally to net proceeds for each of
these years.
Note 5.
As part of the Quick Win rejuvenation plan, a total of
MUR30m of stock was written off in FY13. This stock dated
back to games which were launched during the period 2009
to 2012. As such, the amount written off was spread over the
period from FY10 to FY13 in relation to the date of launch of
the respective Quick Win games. This is in line with the stock
provisioning approach adopted by Lottotech in FY13.
Note 2.Management fees payable to ASB in FY13 (refer to section 19.8
for more details), have been adjusted to reflect the changes
in the metrics driving the fees had the contribution to the
Consolidated Fund been at the amount agreed at mediation.
Note 6.The above mentioned adjustments directly impacted the
profitability of the Company and the tax losses being carried
forward. The tax expenses have therefore been adjusted to
reflect these changes on the income statement.
Note 3.Lottotech incurred legal, professional and consultancy fees
in relation to the mediation case which was accounted for
in the FY13 audited financial statements. These have been
reallocated to FY11 and FY12 proportionately to net proceeds
for each corresponding year.
The impact of above adjustments on the Net Asset Value (“NAV”)
is shown below:
Note 4.
The reduction of MUR262m to the Consolidated Fund
contribution resulted in higher profits for FY13. This in turn
increased the profit related bonuses to employees. The
adjustment reflects what the bonuses would have been on
the adjusted profit of the Company.
Table 5 – Reconciliation of the audited NAV to the pro forma NAV
MURm
Audited NAV
31 December
2013
30 June
2012
30 June
2011
100
8
(12)
145
76
(9)
(262)
121
141
Management fees adjustments due to a reduction in Consolidated Fund rate of contribution
18
(8)
(10)
Reallocation of legal & professional fees in connection with settlement of GRA litigation
21
(10)
(11)
Reallocation of consultancy fees in connection with settlement of GRA litigation
18
(8)
(10)
Reallocation of staff bonus adjustments due to a reduction in Consolidated Fund rate of
contribution
17
(8)
(9)
Reallocation of stock write off in connection with Quick Win games rejuvenation plans
24
(9)
(6)
Tax expense adjustments due to above adjustments
19
(10)
(9)
100
152
65
Adjustments:
Change in opening NAV balance
Consolidated Fund adjustments due to a reduction in rate of contribution following judgment by
the Mediation Division of the Supreme Court
Adjusted NAV
24
13. Risk factors
Any investment in the Company is subject to a number of risks.
Accordingly, prospective investors should carefully consider the
risks and uncertainties associated with any investment in the
ordinary shares, the Company’s business and the industry in which
it operates together with all other information contained in this
document, prior to making an investment decision.
advantage of attractive market opportunities. The GRA may refuse
to approve new games or Loto enhancements.
The risks and uncertainties described below represent those the
Directors consider to be material as at the date of this document.
However, these risks and uncertainties are not the only ones facing
the Company. Additional risks and uncertainties not presently
known to the Directors, or that the Directors currently consider
to be immaterial, may individually or cumulatively also materially
and adversely affect the business, results of operations, financial
condition and/or prospects of the Company. If any or a combination
of these risks actually occurs, the business, results of operations,
financial condition and/or prospects of the Company could be
materially and adversely affected. In such cases, the market price of
the ordinary shares could be adversely impacted.
13.1.2Lottotech operates in a competitive gaming and gambling
environment and may face competition from the rest of the
gaming and gambling industry.
Investors should consider carefully whether an investment in the
ordinary shares is suitable for them in the light of the information
in this document and their personal circumstances. If in doubt,
investors should consult their banker, licensed investment dealer,
legal advisor, accountant or other professional advisor for any
investment advice.
There is a risk that this Offer for Sale shall be withdrawn if the
number of ordinary shares applied for by investors is below
34,000,000 ordinary shares. In the event that this minimum offer is
not met, Lottotech shall refund applicants the full amount paid for
the purchase of the ordinary shares. Such monies refunded will not
bear interest for the applicant’s account.
Lottotech’s risk factors can be categorised as follows:
• Strategic and regulatory;
• Technological;
• Reputational; and
• Financial
13.1 Strategic and regulatory
13.1.1The industry in which Lottotech operates is regulated and
changes to applicable laws and regulations, including
the introduction of more stringent laws and regulations,
could adversely affect its business, results of its operations,
financial condition and/or its prospects.
The laws and regulations for the Mauritius National Lottery are
currently defined in the GRA Act. Any change thereto, including
the introduction of more stringent laws and regulations, and
failure by the Company to comply with the applicable laws and
regulations may adversely affect its ability to operate the Mauritius
National Lottery in the future, including its ability to retain or renew
its licence.
This risk is mitigated by Lottotech holding regular discussions with
the GRA on regulatory matters and approval of new games and
Loto enhancements.
Lottotech faces competition from the rest of the gaming and
gambling industry such as other lotteries, horse racing and sports
betting shops and casinos. Competition may intensify, which
could put downward pressure on the revenue of the Company.
Gaming products are also susceptible to consumer trends and the
improvement and expansion of product offerings by competitors
may attract customers away from the products that Lottotech
offers and reduce the Company’s market share. In addition,
operators in the unregulated ‘grey’ market which are permitted
to act outside the GRA regulatory regime may be able to obtain a
competitive advantage against regulated operators like Lottotech.
Illegal gaming and gambling drain volumes of business away
from the regulated industry. The actions of gaming and gambling
competitors and detractors may have a material adverse effect on
Lottotech’s business, results of its operations, financial condition
and/or its prospects.
This risk is mitigated by Lottotech focusing on product innovation,
the GRA enforcing its regulations and the Company reinforcing its
reputation as a provider of safe and responsible gaming products.
13.2 Technological
13.2.1Lottotech relies heavily on its IT infrastructure to continue to
deliver an uninterrupted quality service to its consumers.
Lottotech’s operations depend to a large extent on the reliability,
performance and security of its information technology system,
software and network. Any major system failure including network,
software, internet or hardware failure, arising from damage
and interruption caused by human error, problems with the
telecommunications network, natural disasters, sabotage, hacker
intrusion, malicious viruses and other cybercrime attacks, which
causes interruption in the business or affect the integrity of the
Mauritius National Lottery, would have an adverse impact on the
business of Lottotech.
This risk is mitigated by Lottotech having devised control systems
within its IT infrastructure. The IT operations are conducted from
the Company’s head office in Ebène CyberCity, together with
back-up systems in a remote location at Beau Bassin. Additionally,
Lottotech’s network communications system functions on a dual
network mechanism operating on both the Emtel and Orange
communication systems. Should one network operator be down,
it will automatically shift to the other network provider to ensure
seamless data transmission to the data centres.
Lottotech could also from time to time experience significant delays
in the approval of new games and approval of Loto enhancements
by the GRA and such delays could prevent the Company from taking
25
13. Risk factors (contd.)
13.2 Technological (Contd.)
13.2.1Lottotech relies heavily on its IT infrastructure to continue
to deliver an uninterrupted quality service to its consumers.
(Contd.)
Lottotech has signed a technology supply and support agreement
with GTECH to provide lottery technology services to the Company.
GTECH has supplied the Company with proven technology and
certified equipment in support of Lottotech’s efficient and highlysecured gaming operations.
Lottotech is compliant with ISO 27001:2005 which is the highest
international standard with respect to information security
management systems.
On a regular basis, Lottotech commissions penetration testing
carried out by professional firms with the relevant expertise.
13.3 Reputational
13.3.1Lottotech relies on its retailer network as a distribution
channel for its lottery products and problems with the
retailers could adversely affect the business.
Lottotech relies on retailers to operate its distribution network.
The Company does not control these retailers and relies on them
to perform in accordance with the terms of their contracts. This
increases the Company’s vulnerability to problems with the service
they provide.
This risk is mitigated by a series of measures that Lottotech has
implemented. A rigorous control system has been put in place by
Lottotech to monitor its distribution network. Lottotech carefully
selects its retailers in order to optimise its presence and the visibility
of its products throughout Mauritius and Rodrigues. The Company
evaluates the retailer’s ability in managing the lottery business
before appointing the retailer. The Company continuously reviews
the performance of retailers and provides training to them to ensure
that the customer service delivered by the retailers is of the required
standard. In connection with this review process, Lottotech seeks
to reward top performing retailers by presenting them with end of
year awards and focuses on opening new points of sale and closing
underperforming points of sale. Training courses are held on a
regular basis to ensure that retailers are not deceitful towards both
Lottotech and its customers.
13.3.2
Negative perceptions and publicity surrounding the
gambling industry could adversely affect Lottotech’s
business.
Lottotech may be exposed to negative publicity related to gambling
behaviour, under-age play, risks related to online gambling and
money laundering. Such negative perceptions, even if not directly
connected to the Company and its products, could adversely impact
the business, results of its operations, financial condition and/or its
prospects. For example, if the perception develops that the GRA is
failing to address such concerns adequately, the gambling industry
26
can become subject to increased regulation. Such an increase in
regulation could adversely impact Lottotech’s business.
This is mitigated by the Company being actively involved in the
promotion of responsible gaming. In addition, Lottotech ensures
that the public understands the difference between gaming and
gambling. Lottotech maintains internal monitoring systems under
its compliance department to prevent any instance of bribery, fraud
or corruption.
13.3.3
Lottotech relies on the integrity of its employees and systems.
The real and perceived integrity and security of the Company’s
employees, executives and systems are critical to its ability to attract
customers and comply with applicable regulations. Lottotech has
set high standards of personal integrity for its employees and
system security for the games that it provides to its customers.
Accordingly, a finding of improper conduct on the Company’s part,
or on the part of one or more of its current or former employees
or another related party, or a system security defect or failure, or
an allegation of such conduct that impairs Lottotech’s reputation,
could result in civil or criminal liability. Any of the above factors
could have a material adverse effect upon the business, its results of
operations, its financial condition and/or its prospects.
Should any instance of improper conduct on the part of its
employees be found, Lottotech will take appropriate action
immediately to remedy the situation. In addition, Lottotech
invests a significant amount of resources to ensure the integrity of
its systems.
13. Risk factors (contd.)
13.4 Financial
Internal
Financial risks to Lottotech are both external and internal by nature
as explained below:
13.4.6
Management of contributions to the Consolidated Fund –
Remittance to the Consolidated Fund is a statutory
requirement of the GRA Act. A prescribed formula has
been devised and Lottotech ensures that its calculations
reconcile with those of the GRA to minimise the risk of
under/overpayment to the Consolidated Fund.
External
13.4.1
Natural disaster – This external risk factor has a direct
impact on business continuity and could have a
significant adverse effect on Lottotech’s revenues and
overall profitability.
13.4.2
Credit risk arising from non-payment by retailers – Retailers
collect the cash and transfer it over to Lottotech on a
weekly basis, net of their commissions. There is a risk
that retailers do not pay over the appropriate amount
to Lottotech. The Company has the ability to turn off
a retailer terminal centrally such that this risk can be
mitigated to one week’s worth of takings. In addition,
legal action will be taken by the Company to recover the
debt.
13.4.7
Unclaimed prize monies – A statutory requirement of the
GRA Act is the remittance of all unclaimed prize monies to
the National Solidarity Fund. For Loto, it is all unclaimed
prizes aged more than 6 months and for Quick Win games,
all prizes unclaimed greater than 3 months following the
closure of the applicable Quick Win games. Lottotech
continuously monitors the unclaimed prize balance such
that it can be remitted on time to the National Solidarity
Fund.
13.4.3
Reliance on certain key persons – Lottotech’s success
depends on certain key persons, in particular members of
its senior management team. A succession plan is in place
to mitigate the impact of losing these key persons. In
addition, training is provided on and off the job to ensure
that the appropriate expertise is developed and spread
across key persons.
13.4.4
Dependence on one bank to perform the sweep of cash from
retailers into Lottotech’s account – Lottotech depends on
one bank to effect the transfer of monies from retailers
into Lottotech’s bank account. The bank which Lottotech
has chosen is one of the largest banks in Mauritius and
to date it has provided an uninterrupted and effective
service.
13.4.5
Logistics – All of Lottotech’s Quick Win games are
imported from GTECH and shipped to Mauritius for
distribution. The possibility of shipment delays might
hamper inventory levels and revenue figures. This risk is
mitigated by careful planning such that Quick Win games
are ordered in advance and rolled out in accordance with
an agreed plan.
27
14. Summary of corporate information
Name of company
Lottotech Ltd
Business registration number
C08079313
Principal office
HSBC Centre
18 CyberCity
Ebène, Mauritius
Registered office
Royal Road, Chapman Hill
Beau Bassin, Mauritius
Key licence
Operator of the Mauritius National Lottery Licence
Trademarks
Loterie Nationale, Loto and Quick Win – These are the property of the Government of Mauritius.
They were created and are used for commercial purposes by Lottotech by virtue of its licence.
Company Secretary
Gamma Corporate Services Ltd
Royal Road, Chapman Hill
Beau Bassin, Mauritius
Registrars
Gamma Corporate Services Ltd
Royal Road, Chapman Hill
Beau Bassin, Mauritius
Principal Banker
State Bank of Mauritius Ltd
SBM Tower, 1 Queen Elizabeth II Avenue
Port Louis, Mauritius
Auditors/Reporting Accountants
PricewaterhouseCoopers Ltd
18 CyberCity
Ebène, Mauritius
Transaction advisors
PricewaterhouseCoopers Ltd
18 CyberCity
Ebène, Mauritius
Independent valuers
KPMG
KPMG Centre
31 CyberCity
Ebène, Mauritius
Legal advisors
Sir Hamid Moollan QC
6th Floor, PCL Building, Sir William Newton Street
Port Louis, Mauritius
28
15. Directors, senior management, corporate governance
and risk management
15.1 Biographies of existing Directors
Chian Yew Ah Teck (also called Carl Ah Teck)
Non-Executive Director and Chairman
Carl holds a first class degree in Civil Engineering from Lancaster
University and an MPhil. degree in Soil Mechanics from the
University of Cambridge. After university, he joined consulting firm
Sir Alexander Gibb and Partners in Mauritius. He is a registered
professional engineer. He has also attended several executive
management programs at NUS/Stanford University, London
Business School and INSEAD. After 5 years with Sir Alexander
Gibb and Partners, where he held various positions in both the
design office and on site for major projects, he founded Gamma
Construction Ltd in 1987 which was subsequently reorganised
and called Gamma-Civic Ltd. From 1987 to 2011, he was the Chief
Executive of the Gamma Group before becoming the Executive
Chairman of Gamma-Civic Ltd in February 2011. During this time,
Carl has also been a director and the Chairman of companies in the
Gamma Group.
Other directorships of listed companies – Gamma-Civic Ltd,
Morning Light Co. Ltd
Business address – Royal Road, Chapman Hill, Beau Bassin, Mauritius
Nationality – Mauritian
Date of appointment – 11 April 2008
Paul Cyril How Kin Sang
Non-Executive Director
Cyril studied accountancy at The University of West London and is
a member of the Institute of Chartered Accountants in England &
Wales. From 1985 to 1988, he trained and worked as a Chartered
Accountant in the UK with a number of accounting firms including
KPMG. He joined Gamma in 1989 and has occupied several posts
within the Group, including Group Finance Director, Supervisory
Executive Director of Lottotech and is involved in the business
development of the Group. He was appointed as the Managing
Director of Gamma in February 2011.
– Gamma-Civic Ltd,
Other directorships of listed companies – Gamma-Civic Ltd,
Morning Light Co. Ltd
Business address – Royal Road, Chapman Hill, Beau Bassin, Mauritius
Business address – Royal Road, Chapman Hill, Beau Bassin, Mauritius
Nationality – Mauritian
Nationality – Mauritian
Date of appointment – 8 April 2008
Date of appointment – 8 April 2008
Chian Luck Ah Teck (also called Patrice Ah Teck)
Non-Executive Director
Kune Foo Jean-Claude Lam Hung
Non-Executive Director
Patrice holds a BA (Hons) Accounting and Finance from South Bank
University. He worked as a Trainee Accountant with Nunn, Crick and
Bussell in the UK, and in 1993 he joined the Gamma Group as Sales
and Marketing Manager. He was appointed Sales and Marketing
Director in 2000 and since 2011 he has occupied the post of Deputy
Managing Director.
Other directorships of listed companies – Gamma-Civic Ltd,
Morning Light Co. Ltd
Jean-Claude is a Fellow of the Institute of Chartered Accountants
in England and Wales. He was awarded the Edward Billington
Scholarship to read BA (Hons) Business Studies at Liverpool John
Moores University. He graduated with a first class honours degree.
From 1998 to 2009, he trained and qualified as a Chartered
Accountant with Ernst & Young (London) before assuming senior
manager and director roles at Deloitte (London) and BDO (London)
respectively. In November 2009, he became a partner at Mazars LLP
(London) prior to joining Gamma as Group CFO in August 2012.
Business address – Royal Road, Chapman Hill, Beau Bassin, Mauritius
Other directorships of listed companies – Morning Light Co. Ltd
Nationality – Mauritian
Business address – Royal Road, Chapman Hill, Beau Bassin, Mauritius
Date of appointment – 11 April 2008
Nationality – Mauritian
Other directorships of listed companies
Morning Light Co. Ltd
Date of appointment – 8 October 2012
Chian Tat Ah Teck (also called Tommy Ah Teck)
Non-Executive Director
Tommy holds a BSc (Hons) Engineering from University of
Westminster and an MPhil in Mechanical Engineering from
Loughborough University of Technology. He worked as a Trainee
Accountant with Griffin & Partners, Chartered Accountants in
London, UK. He occupied the post of Managing Director of Gamma
from 1987 to January 2011. He was appointed as CEO of Gamma as
from February 2011.
29
15. Directors, senior management, corporate governance
and risk management (contd.)
15.1 Biographies of existing Directors (Contd.)
Muhammad Iqbal Mallam-Hasham
Non-Executive Director
Iqbal is a fellow of the Hubert H. Humphrey program and studied
International Economy at Boston University. He is a Fellow of the
Mauritius Institute of Directors. He holds a post-graduate degree
in Management and Business from “Institut d’Administration
des Enterprises”, Université de Strasbourg. At present, he is the
Managing Director of the State Investment Corporation Ltd. He has
wide ranging experience in the financial services sector and has
been a consultant in corporate management, financial services,
training and legal matters. He was the Associate Professor, teaching
graduate and postgraduate courses in Strategic Management and
Negotiation Techniques at the two Universities in Mauritius as
well as for ‘Université de Poitiers/MCCI’ Program. He has formerly
held important positions including Member of Parliament,
Member of Public Accounts Committee and Member of the Joint
ACP-EU Bureau.
Other directorships of listed companies – Caudan Development
Limited, Constance Hotels Services Ltd, Sun Resorts Limited
Business address – Level 15, Air Mauritius Centre, President John
Kennedy Street, Port Louis, Mauritius
Nationality – Mauritian
Date of appointment – 9 April 2009
Ishwurlal Golam
Non-Executive Director
Ishwurlal is a member of the Chartered Institute of Management
Accountants and was a Gold medallist of the London Chamber of
Commerce & Industry. He has served at the Ministry of Finance in
important positions before his appointment as Director, Concession
Projects Division. He has held the position of Group Administrator
and Finance Manager at SIC since June 2002.
Other directorships of listed companies – Morning Light Co. Ltd
Business address – Level 15, Air Mauritius Centre, President John
Kennedy Street, Port Louis, Mauritius
Nationality – Mauritian
Date of appointment – 9 April 2009
Alex S. Burstein
Non-Executive Director
Alex holds a BSc Electrical Engineering from Carnegie-Mellon
University in Pittsburgh, Pennsylvania. He worked at GTECH, a
leader worldwide in gaming technology including application
software, firmware, communications processing, and central
systems software, where he held top management posts. In 1998,
he left GTECH and started his own company whereby he acted as a
consultant and an advisor to a number of lottery companies around
the world.
Other directorship of listed companies – None
Business address – 13732 Le Havre Drive, Palm Beach Gardens, FL
33410, United States.
Nationality – American
Date of appointment – 18 May 2013
15.2 Biographies of Directors who have been
appointed effective 19 May 2014
Robert Chowvee Ip Min Wan
Independent Non-Executive Director
Robert is the Managing Director of Ip Min Wan Ltd and a Fellow of
the Institute of Chartered Accountants in England and Wales. He
holds a B.Com. (Hons) degree in Business Studies from the University
of Edinburgh. He was a senior manager in Deloitte in London where
he has accumulated more than 8 years of financial services audit
and assurance experience, prior to joining Ip Min Wan Ltd.
In June 2008, he joined the Boards of Mauritian Eagle Insurance
Company Ltd (“MEI”), a listed company, and Mauritian Eagle Leasing
Company Ltd (“MEL”) as an independent director. He chairs the Audit
and Risk Committees of MEI and MEL. He is also an independent
director of COVIFRA and Holiday Village Management Services Ltd.
Other directorships of listed companies – Mauritian Eagle Insurance
Company Ltd, COVIFRA
Business address – 31 Queen Street, Port Louis, Mauritius
Nationality – Mauritian
Anwar Moollan
Independent Non-Executive Director
Anwar pursued studies in law at Downing College, Cambridge
and the University of Paris, Panthéon – Sorbonne after studying
Mechanical Engineering in France. He was ranked first at the
Mauritian Bar Council examinations in 1995 and was awarded the
Sir Raymond Hein QC Award. He joined the Chambers of Sir Hamid
Moollan QC in 1995 and practises as a barrister. Anwar chairs the
Audit Committee of Harel Mallac & Co. Ltd and is a director on
Compagnie Immobilière Ltée.
Other directorships of listed companies – Harel Mallac & Co. Ltd,
Compagnie Immobilière Ltée
Business address – PCL Building, Sir Newton Street, Port Louis,
Mauritius
Nationality – Mauritian
30
15. Directors, senior management, corporate governance
and risk management (contd.)
15.2 Biographies of Directors who have been
appointed effective 19 May 2014 (Contd.)
Ian Shepherd
Independent Non-Executive Director
Ian is a graduate of the Royal Military Academy Sandhurst (UK)
and has a Master of Business Administration and a certificate in
coaching from Henley Business School. Ian is retired and sits on the
boards of several private media companies, incorporated in South
Africa, namely Striata.com, FleishmanHillard SA, Trialogue Pty Ltd,
The Performance Hub Pty Ltd and Community and Individual
Development Trust.
Ian has held a number of senior management roles namely Chairman
at Grey Advertising (South Africa), Chief Executive at Connectivity
and CIDA Learning, CIDA Investment Trust and Grey Advertising
(South Africa), Regional Director at Grey Africa Network, Managing
Director at Shepherd Advertising, BBDO (South Africa), BBDO
Research (South Africa) and Market Research Africa (Zimbabwe),
and Sales and Marketing Director at Schweppes Central Africa.
Other directorships of listed companies – None
Business address – Willowford Send, Woking, Surrey GU23 7AN, UK
Nationality – Zimbabwean
Moorghen Veeramootoo
Chief Operating Officer
Moorghen holds a BSc European Studies & Technology and a Master
degree in Marketing from Coventry University in the UK. He is also
a holder of a Diplome Universitaire en Technologie from the Institut
Universitaire de Technologie of Avignon in France. He has previously
occupied the post of Marketing and Sales Manager and Business
Unit Manager at Gamma from 2004 to 2009. He has also worked
as Marketing Manager at Happy World Foods Ltd (now Innodis Ltd)
from 1999 to 2004 and Cread & Co. Ltd in 1999. He joined Lottotech
in 2009 and has occupied the post of Deputy General Manager and
presently holds the post of Chief Operating Officer.
Jean Marc Landry
Chief Sales and Marketing Officer
Jean Marc, a Canadian national, has a Bachelor degree in Business
Administration (Finance) from the Université de Moncton, New
Brunswick. Prior to joining Lottotech, he worked at Atlantic Lottery
Corporation for 8 years where he most recently held the position
of Director of Marketing (Retail). At Atlantic Lottery Corporation, he
successfully led the implementation of the Quick Win rejuvenation
plan to address declining sales. This plan resulted in three
consecutive years of record sales, as well as all-time sales record for
the regional and national lottery games.
15.3 Biographies of senior management
Ansuya Seewooruthun
Financial Controller
Michelle J. Carinci
Chief Executive Officer
Ansuya has a Bachelor of Commerce in Accounting and Finance
from the University of Mauritius. She also completed the
ACCA qualification and is currently doing a Master in Business
Administration with the University of Bradford, UK. She has more
than 10 years of experience in accounting and finance in both local
and international organisations. She joined Lottotech in December
2010 and is presently the Financial Controller of Lottotech.
Michelle, a Canadian national, has proven leadership in operations
and innovation both locally and internationally, with over 35 years’
experience in the gaming industry. Prior to joining Lottotech,
Michelle held the position of CEO at Atlantic Lottery Corporation,
which under her leadership was recognised three times as one of
Canada’s Top 100 Employers. As President and CEO of the Atlantic
Lottery Corporation, she developed and implemented a corporate
social responsibility framework which strives to promote integrity,
transparency and responsibility. Prior to joining Atlantic Lottery
Corporation, she was President of Gamescape, a wholly-owned
subsidiary of GTECH and a Corporate Vice President in charge of
marketing and customer relations at GTECH.
She has also been recognised four times as one of the top 50 CEOs in
Atlantic Canada and is an inductee into the Lottery Hall of Fame class
of 2006. Michelle is also a strong promoter of responsible gaming
having been one of the founding members of the Responsibility
Program on behalf of the WLA. Michelle also aided in the creation of
responsible gambling principles and its associated frameworks and
standards which were unanimously approved by 140 organisations
worldwide.
Harikrishna Ramsamy
Chief Technology Officer
Harikrishna has a Master in Business Administration from Heriot
Watt University. He has over 20 years’ experience in the IT profession
and was appointed as Chief Technology Officer at Lottotech in 2011.
He is responsible for the planning and execution of IT initiatives that
support the Company’s objectives. He also oversees and ensures
the smooth and efficient running of the on-line lottery sales and
IT services.
31
15. Directors, senior management, corporate governance
and risk management (contd.)
15.3 Biographies of senior management (Contd.)
Jerry Lim How
Chief Procurement Officer
Jerry studied BSc Computer Science with Business Studies at
the University of Buckingham in the UK and has an MSc Business
Systems Analysis and Design from City University in London. He
worked as LPG Retail Supervisor and Planner from 1989 to 1997
and as Contracting and Procurement Manager from 1997 to 2002
at Shell Mauritius Ltd. He joined Gamma in 2002 and acted as
Group Procurement Manager from 2002 to 2011. He transferred to
Lottotech as Chief Procurement Officer in 2011.
15.4.1 Audit Committee
The Audit Committee assists the Board in relation to its reporting of
financial information, the appropriate application and amendment
of accounting policies, the identification and management of
risk, the implementation of internal control systems and internal
audit, statutory and regulatory compliance. The Audit Committee
provides a forum for effective communication between the Board
and the internal and external auditors, both of whom report to the
Audit Committee.
The Audit Committee is composed of the following Directors:
• Ishwurlal Golam, Chairman
• Muhammad Iqbal Mallam-Hasham
Richard Papie
Security Manager
• Tommy Ah Teck
Richard joined Lottotech in 2009 and has over 24 years of experience within
the security profession. He worked as a police officer for 7 years, and held the
position of security manager across a number of industries. Richard joined
Lottotechin2009andheoversees,investigatesandliaiseswiththerelevantlegal
and enforcement authorities to authenticate any winning tickets that may be
in dispute.
The Audit Committee holds quarterly meetings and its members
scrutinise and share their views on all financial reports, the audited
financial statements as well as reports from the internal and external
auditors. The internal audit function is outsourced to Ernst & Young.
Sivalingum Candassamy
Compliance and Risk Manager
Sivalingum holds an MSc in Computer Security and Forensics and a
Master in Business Administration from the University Technology of
Mauritius. He joined Lottotech in 2009 and is in charge of the risk and
compliance aspects of Lottotech’s operations. He assists management
in identifying key risks to the business and ensures that appropriate
controls are in place to mitigate these to an acceptable level.
15.4 Description of committees and respective
responsibilities
The Board has established three committees, namely the Audit
Committee, the Corporate Governance Committee and the Games
Committee (the “Board Committees”).
These Board Committees have been formed to efficiently manage
the responsibilities of the Board and to facilitate efficient decision
making of the Board. The Board Committees are a mechanism
to assist the Board and its Directors in discharging their duties
through comprehensive evaluation of specific issues, followed
by well-considered recommendations to the Board. However, the
Board remains ultimately accountable and responsible for the
performance and the affairs of the Company.
32
• Patrice Ah Teck
The composition of the Audit Committee will be reviewed upon
appointment of the Independent Non-Executive Directors.
15.4.2 Corporate Governance Committee
The Corporate Governance Committee makes recommendations
to the Board on all corporate governance matters relevant to the
Company to ensure that the Board remains effective and complies
with the Code of Corporate Governance and prevailing corporate
governance principles.
The Corporate Governance Committee is also responsible for
remuneration and nomination matters. The remuneration
philosophy is geared towards rewarding efforts and merits for
individual and joint contribution to the Company’s results, whilst
having also due regards to market conditions, the financial wellbeing of the Company and the interest of the shareholders.
The Corporate Governance Committee is composed of the following
Board participants:
• Muhammad Iqbal Mallam-Hasham, Chairman
• Tommy Ah Teck
• Patrice Ah Teck
• Paul Cyril How Kin Sang
The composition of the Corporate Governance Committee will be
reviewed upon appointment of the Independent Non-Executive
Directors.
15. Directors, senior management, corporate governance
and risk management (contd.)
15.4.3 Games Committee
15.5 Statement of interests
The Games Committee is composed of the following Board
participants:
15.5.1 Statement of interests of Directors
• Patrice Ah Teck, Chairman
The figures presented in the table below correspond to the holdings of
the Directors listed in this section before the Offer for Sale to the public.
• Paul Cyril How Kin Sang
Director • Jean-Claude Lam Hung
DirectIndirect
• Alex S. Burstein
Carl Ah Teck -
12.72%
• Muhammad Iqbal Mallam-Hasham
Tommy Ah Teck -
12.72%
The following management members are also asked to attend and
contribute to each of the Games Committee meetings:
Patrice Ah Teck -
12.72%
Paul Cyril How Kin Sang
-
13.56%
Jean-Claude Lam Hung -
0.009%
• Michelle Carinci
Shareholding
• Moorghen Veeramootoo
• Jean Marc Landry
• Ansuya Seewooruthun
The Games Committee was initially set up as the Quick Win
Turnaround Committee (“QWTC“) to review the management
strategy to improve Quick Win games revenue. After the
rejuvenation plan was presented and approved by the Board in July
2013 and achieved its first successes, the Board decided that the
QWTC be renamed the Games Committee to review and implement
future strategies for all of the games that Lottotech operates.
The Games Committee meets around 4 to 6 times a year and always
in advance of a Board in order to report on progress and any new
initiatives that are being proposed for the Board to approve.
15.4.4 Supervisory Committee
The Supervisory Committee is composed of the following Board
participants:
15.5.2Statement of interests of any person or Company,
other than the Director of the Company, who holds more
than 5% of the stated capital of the Company
The figures presented in the table below correspond to holdings
before the Offer for Sale to the public.
Name of shareholder Shareholding
DirectIndirect
The State Investment Corporation Ltd 25.00%
-
Gamma Leisure Ltd 18.75%
-
Maurilot Investments Ltd 18.75%
-
Natlot Investments Ltd 18.75%
-
Glot Holdings (Mauritius) Ltd 18.75%
-
Gamma-Civic Ltd
74.81%
• Paul Cyril How Kin Sang, Chairman
Consolidated Holdings Ltd -
• Patrice Ah Teck
Landcorp Ltd
-
8.39%
• Jean-Claude Lam Hung
JHD Holdings Ltd -
6.39%
The Supervisory Committee is a Board Committee set up to
specifically assist, monitor and supervise the CEO and management
of Lottotech in the day to day management and operations of the
Company, on behalf of the Board. It also monitors the performance
of the CEO and management of Lottotech, if necessary, and makes
necessary recommendation to the Board of Directors.
Bluesilver Ltd -
5.46%
11.60%
15.6 Directors’ service contracts
The Directors have no service contracts with the Company.
The Supervisory Committee members may interact on a daily basis
with the CEO and management of Lottotech and shall meet as often
as may be required and formally at least once every quarter.
33
15. Directors, senior management, corporate governance
and risk management (contd.)
15.7 Directors’ remuneration and benefits
The table below sets out the remuneration received by each Director for the
18 months ended 31 December 2013 and the year ended 30 June 2012.
Executive Directors
FY13
MUR
FY12
MUR
Carl Ah Teck – Chairman
4,075,107
3,255,460
Tommy Ah Teck 4,890,128
3,255,460
Patrice Ah Teck 4,890,128
3,255,460
Paul Cyril How Kin Sang 4,890,128
3,255,460
Jean Claude Lam Hung -
-
Non - Executive Directors
FY13
MUR
Carl Ah Teck – Chairman
815,021 -
Muhammad Iqbal Mallan-Hasham 300,000 255,000
Ishwurlal Golam 300,000
255,000
Alex S. Burstein -
-
Alex Fon Sing -
-
FY12
MUR
As from 1 January 2014 Tommy Ah Teck, Patrice Ah Teck and Paul Cyril
How Kin Sang have ceased to be Executive Directors of the Company.
With the proposed listing of the Company, the Chairman and
the previous Executive Directors have voluntarily declined their
remuneration rights as from 1 January 2014.
34
16. Reporting Accountants’ Report
17 March 2014
The Board of Directors
Lottotech Ltd
HSBC Centre
18, CyberCity
Ebène
Republic of Mauritius
Dear Sirs,
Accountants’ report
We report on the historical financial information set out on pages 37 to 60. This report has been prepared for inclusion in the Listing Particulars
of Lottotech Ltd (“Issuer”), in relation to the Offer for Sale of up to 85,000,000 ordinary shares of no par value and the listing of 340,000,000
ordinary shares of no par value of Lottotech Ltd on the Official List of the Stock Exchange of Mauritius Ltd (“SEM”) by way of an Offer for Sale.
Basis of preparation
The historical financial information is based on the audited financial statements of the Issuer for the years ended 30 June 2011 and 30 June
2012, and the 18 month period ended 31 December 2013.
Responsibilities of the directors for the historical financial information
The directors of the Issuer are responsible for the compilation, contents and preparation of the Listing Particulars. The directors are also
responsible for the fair presentation of the historical financial information as set out in the Listing Particulars in accordance with International
Financial Reporting Standards and accounting policies used in the Issuer’s audited financial statements for the years ended 30 June 2011 and
30 June 2012, and the 18 month period ended 31 December 2013 underlying the historical financial information.
Scope of audit for the years ended 30 June 2011 and 30 June 2012, and the 18 month period ended
31 December 2013
Our responsibility is to express an opinion on the historical financial information included in the Listing Particulars based on our audits
for each of the years ended 30 June 2011 and 30 June 2012 and the 18 month period ended 31 December 2013. We conducted our audits
in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and
perform the audits to obtain reasonable assurance about whether the Financial Statements are free from material misstatement. An audit
involves performing procedures to obtain audit evidence about the amounts and disclosures in the abovementioned Financial Statements.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Financial
Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our accountants report.
Statement of independence
During the years ended 30 June 2011 and 30 June 2012 and the 18 month period ended 31 December 2013, we have not been an associate,
as defined in the Listing Rules, of any directors or of any shareholders holding more that 5% of the issued share capital of the Issuer. Further,
we do not audit any holding or subsidiaries of issuer.
We have been the auditors of the Issuer for the years ended 30 June 2011 and 30 June 2012, and the 18 month period ended 31 December
2013.
35
16. Reporting Accountants’ Report (contd.)
Opinion on the historical financial information
In our opinion, the historical financial information gives, for the purpose of the Listing Particulars, a true and fair view of the financial position
of Lottotech Ltd and its financial performance and its cash flows for each of the years ended 30 June 2011 and 30 June 2012, and the 18
month period ended 31 December 2013, in accordance with International Financial Reporting Standards and accounting policies used in the
Issuer’s audited financial statements underlying the historical financial information.
Other matter
This report, including the opinion, has been prepared for and only for the directors and for no other purpose. We do not, in giving this
opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers
36
17.Historical financial information
Audited financial statements for the 18 month period ended 31 December 2013 and years ended 30 June 2012 and 2011.
Statements of profit or loss and other comprehensive income
Note
Period from
1 July 2012 to
31 December 2013
MUR
Year ended
30 June 2012
MUR
Year ended
30 June 2011
MUR
Gross ticket sales
4
3,876,363,745
2,596,359,420
3,161,490,780
Prizes
4
(1,997,587,441)
(1,338,170,002)
(1,703,562,933)
Consolidated Fund
5
(605,063,999)
(729,875,682)
(844,556,503)
1,273,712,305
528,313,736
613,371,344
Retailers' and other commissions
(214,178,333)
(144,209,322)
(174,085,367)
Gaming systems and data communication costs
(282,896,903)
(177,926,387)
(223,014,647)
Gross profit
776,637,069
206,178,027
216,271,330
-
3,962,629
-
(381,186,015)
(187,229,348)
(220,244,970)
Net income
Other income
Administrative expenses
Operating profit/(loss)
6
395,451,054
22,911,308
(3,973,640)
Finance income
7
11,978,335
7,014,683
9,953,276
Finance costs
7
(1,074,075)
(864,139)
(13,325,947)
Finance income/(costs) - Net
7
10,904,260
6,150,544
(3,372,671)
406,355,314
29,061,852
(7,346,311)
(62,895,249)
(9,684,945)
(1,284,012)
343,460,065
19,376,907
(8,630,323)
(965,000)
-
-
342,495,065
19,376,907
(8,630,323)
3,434.60
193.77
(86.30)
Profit/(loss) before taxation
Income tax expense
9
Profit/(loss) for the period/ year
Remeasurement of post-employment benefit obligations
21
Total comprehensive income/(loss) for the period/year
Earnings/(loss) per share
10
37
17.Historical financial information (contd.)
Statements of financial position
Note
31 December 2013
MUR
30 June 2012
MUR
30 June 2011
MUR
Assets
Non-current assets
Property, plant and equipment
11
229,760,861
252,061,225
286,185,695
Investment in subsidiary
12
-
1,000
1,000
Deferred income tax asset
20
-
6,547,264
16,232,209
229,760,861
258,609,489
302,418,904
Current assets
Inventories
13
14,342,748
30,805,909
36,199,287
Trade and other receivables
14
111,581,339
76,236,397
102,130,658
Cash and cash equivalents
15
199,507,103
253,586,520
140,980,935
325,431,190
360,628,826
279,310,880
555,192,051
619,238,315
581,729,784
Total assets
Equity and liabilities
Capital and reserves
Stated capital
16
Retained earnings /(accumulated losses)
Total equity
100,000,000
100,000,000
100,000,000
284,912
(92,210,153)
(111,587,060)
100,284,912
7,789,847
(11,587,060)
Non-current liabilities
Borrowings
17
882,315
6,355,167
9,061,098
Deferred income tax liabilities
20
4,677,159
-
-
Post-employment benefits
21
4,141,000
2,438,000
1,336,000
9,700,474
8,793,167
10,397,098
Current liabilities
Borrowings
17
1,746,805
2,703,494
113,881,159
Trade and other payables
18
389,872,589
599,951,807
469,038,587
Dividend payable
22
40,000,000
-
-
Current income tax liabilities
9
13,587,271
-
-
445,206,665
602,655,301
582,919,746
Total liabilities
454,907,139
611,448,468
593,316,844
Total equity and liabilities
555,192,051
619,238,315
581,729,784
38
17.Historical financial information (contd.)
Statements of cash flows
Note
Period from
1 July 2012 to
31 December 2013
MUR
Year ended
30 June 2012
MUR
Year ended
30 June 2011
MUR
406,355,314
29,061,852
(7,346,311)
85,589,152
50,324,556
50,196,648
2,315,034
-
-
-
550,000
1,000,000
Cash flow from operating activities
Profit/(loss) before taxation
Adjustments for:
Depreciation on property, plant and equipment
11
Loss on disposal of property, plant and equipment
Provision for impairment of receivables
14
Provision for post-employment benefits
21
1,098,000
1,102,000
1,686,000
Inventory write-down
13
30,000,000
8,471,428
-
Interest expense
7
1,074,075
864,139
13,325,947
Interest income
7
(11,978,335)
(7,014,683)
(9,953,276)
Operating profit before working capital changes
514,453,240
83,359,292
48,909,008
Increase in inventories
(13,536,839)
(3,078,050)
(7,478,536)
(Increase)/decrease in trade and other receivables
(35,343,942)
25,344,261
(61,560,122)
(Decrease)/increase in trade and other payables
(210,079,218)
130,913,220
189,696,424
Cash generated from operations
255,493,241
236,538,723
169,566,774
7
(1,074,075)
(864,139)
(13,325,947)
Interest received
7
11,978,335
7,014,683
1,337,607
Contributions to pension
21
(360,000)
-
(350,000)
(38,083,555)
-
-
227,953,946
242,689,267
157,228,434
(66,173,822)
(16,200,086)
(34,873,268)
570,000
-
-
-
-
(1,000)
(65,603,822)
(16,200,086)
(34,874,268)
Repayment of loan from related party
-
-
(174,594,991)
Receipts of loan proceeds from related party
-
-
154,528,000
Repayment of bank loan
-
(110,500,000)
(19,500,000)
(6,903,750)
(2,584,894)
(2,174,822)
Interest paid
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
11
Proceeds from sale of property, plant and equipment
Investment in subsidiary
Net cash used in investing activities
Cash flows from financing activities
Finance lease principal payments
Dividends paid
22
Net cash used in financing activities
(210,000,000)
-
-
(216,903,750)
(113,084,894)
(41,741,813)
Net (decrease)/increase in cash and cash equivalents
(54,553,626)
113,404,287
80,612,353
Cash and cash equivalents at beginning of period/year
253,586,520
140,182,233
59,569,880
199,032,894
253,586,520
140,182,233
Cash and cash equivalents at end of period/year
15
39
17.Historical financial information
Statements of changes in equity
Stated Capital
MUR
Retained Earnings
MUR
Total Equity
MUR
100,000,000
(102,956,737)
(2,956,737)
Loss for the year
-
(8,630,323)
(8,630,323)
Total comprehensive loss
-
(8,630,323)
(8,630,323)
100,000,000
(111,587,060)
(11,587,060)
Profit for the year
-
19,376,907
19,376,907
Total comprehensive profit
-
19,376,907
19,376,907
100,000,000
(92,210,153)
7,789,847
Profit for the period
-
343,460,065
343,460,065
Other comprehensive loss for the period
-
(965,000)
(965,000)
Total comprehensive income
-
342,495,065
342,495,065
-
(250,000,000)
(250,000,000)
100,000,000
284,912
100,284,912
Note
At 01 July 2010
Comprehensive loss
At 30 June 2011
Comprehensive profit
At 30 June 2012
Comprehensive income
Dividends
At 31 December 2013
40
22
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013
1. GENERAL INFORMATION
The Company is incorporated and domiciled in the Republic of
Mauritius as a private company with limited liability. Its registered
office is situated at Royal Road, Chapman Hill, Beau Bassin, Republic
of Mauritius.
The Company is the Operator of the Mauritius National Lottery.
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
The principal accounting policies adopted in the preparation of
these financial statements, which have been consistently applied to
all years presented, unless otherwise stated, are set out below:
2.1 Basis of preparation
The financial statements have been prepared in accordance
with and comply with International Financial Reporting
Standards (“IFRS”). The financial statements have been prepared
under the historical cost convention, and are presented in
Mauritian Rupees (‘MUR’).
The preparation of financial statements in accordance with IFRS
requires the use of certain critical accounting estimates. It also
requires the directors to exercise judgement in the process of
applying the Company’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial
statements are disclosed below.
Significant accounting judgements and estimates
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The Company makes estimates and assumptions
concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are addressed below.
Post-employment benefits
The present value of the pension obligations depends on a number
of factors that are determined on an actuarial basis using a number
of assumptions. The assumptions used in determining the net cost/
(income) for post-employment benefits include the discount rate.
Any changes in these assumptions will impact the carrying amount
of post-employment benefits.
The Actuary determines the appropriate discount rate at the end of
each year. This is the interest rate that should be used to determine
the present value of estimated future cash outflows expected to be
required to settle the post-employment benefits. In determining
the appropriate discount rate, the Actuary considers the interest
rates of government bonds that are denominated in the currency
in which the benefits will be paid, and that have terms to maturity
approximating the terms of the related post-employment benefits.
Other key assumptions for pension obligations are based in part on
current market conditions. Additional information is disclosed in
Note 21.
Changes in accounting policies and disclosures
(i) New and amended standards adopted by the
Company
The following standards and amendments have been adopted by
the Company for the first time and are mandatory for financial year
beginning on or after 1 January 2013:
StandardTitle
IAS 1
Presentation of financial statements
IAS 19
Employee benefits (revised)
IFRS 13
Fair Value Measurement
• T he amendment to IAS 1 ‘Presentation of financial statements’
regarding other comprehensive income. The main change
resulting from these amendments is a requirement for entities to
group items presented in ‘other comprehensive income’ (OCI) on
the basis of whether they are potentially reclassifiable to profit
or loss subsequently (reclassification adjustments). The resulting
impact is increased disclosure.
• IAS 19 ‘Employee benefits’ was revised in June 2011. The changes
on the Company’s accounting policies have been as follows:
to immediately recognise all past service costs; and to replace
interest cost and expected return on plan assets with a net
interest amount that is calculated by applying the discount rate
to the net defined benefit liability/(asset). The resulting impact is
increased disclosure.
• IFRS 13 ‘Fair value measurement’ aims to improve consistency and
reduce complexity by providing a precise definition of fair value
and a single source of fair value measurement and disclosure
requirements for use across IFRS. The requirements, which are
largely aligned between IFRS and US GAAP, do not extend the
use of fair value accounting but provide guidance on how it
should be applied where its use is already required or permitted
by other standards within IFRS. The resulting impact is increased
disclosure.
(ii) Standards, amendments and interpretations to
existing standards that are not yet effective and have
not been adopted by the Company
Numerous new standards, amendments and interpretations to
existing standards have been issued but that are not significant/
relevant to the Company.
2.2 Gross ticket sales
Revenue represents gross ticket sales, which comprises the fair value
of the consideration received or receivable for the sale of lottery
tickets and scratch cards in the ordinary course of the Company’s
activities. Revenue is shown net of value-added tax (VAT), returns,
rebates and discounts.
41
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Contd.)
2.2 Gross ticket sales (Contd.)
The Company recognises revenue when the amount of revenue
can be reliably measured, it is probable that future economic
benefits will flow to the Company and when specific criteria have
been met for each of the Company’s activities as described below.
The Company bases its estimates on historical results, taking into
consideration the type of game sold, the type of transaction and the
specifics of each arrangement.
Revenue arises across a portfolio of games that includes a drawbased game and scratch cards. For the draw-based game, income is
recognised on a draw-by-draw basis, at the point at which the draw
takes place.
2.6 Expenses
Expenses are accounted for on an accrual basis. All expenses are
charged to profit or loss.
2.7 Property, plant and equipment
Property, plant and equipment are stated at historical cost less
accumulated depreciation. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on the straight line method to allocate
their costs to their residual values over their estimated useful lives
as follows:
Leasehold improvements
3 - 10 years
Equipment
3 - 10 years
Revenue from scratch cards is recognised at the point of sale by
retailers.
Furniture and fittings
10 years
Motor vehicles
6 - 7 years
All revenue is derived from Mauritius and Rodrigues.
Depreciation is provided in full in the month of addition and in
respect of assets written off and disposed, up to the month of write
off and disposal. Gains and losses on disposals are determined by
comparing proceeds with carrying amount and are included in
profit or loss.
The presentation of net income is consistent with common practice
within the gaming industry.
2.3 Prizes
The draw-based game is operated under a prize pool mechanism
under which a predetermined percentage of the ticket sales is
allocated to prizes. To the extent that the actual prizes won on the
draw vary from the predetermined percentage, the relevant prize is
carried forward under a rollover to subsequent draws. The liability
for prizes is recognised at the time of the draw in line with the
predetermined percentage for that game.
The liability for scratch cards prizes is recognised as a percentage of
ticket sales in line with the theoretical prize payout for that game.
If prizes remain unclaimed for (i) 180 days from the date of the drawbased game and (ii) 90 days from the close of a scratch card game,
the unclaimed prizes are transferred from the prize liability account
to the National Solidarity Fund. Those payments are not charged to
profit or loss as they are already included in the prize liability.
2.4 Consolidated Fund
The Consolidated Fund is a fund managed by the Government of
Mauritius.
Amount charged to profit or loss represents a percentage arising
from gross ticket and scratch card sales net of prize monies paid.
2.5 Retailers’ and other commissions
The Company pays commissions to third party retailers who act as
agents on behalf of the Company under a standard commission
structure, fixed at a percentage of total sales. In addition, validation
commission is paid on prizes for the draw-based game. A similar
commission structure is applicable for the Field Sales and Technical
Representatives in Rodrigues.
42
Property, plant and equipment are reviewed for impairment
whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment
is recognised for the amount by which the carrying amount of
the asset exceeds its recoverable amount, which is the higher of
an asset’s net selling price and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest level from
which there are separately identifiable cash flows.
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to profit or loss
during the financial year in which they are incurred.
The asset’s residual values and useful lives are reviewed and
adjusted if necessary, at end of each reporting period.
Property, plant and equipment held under finance leases are
depreciated over their expected useful lives on the same basis as
owned assets.
Gains and losses on disposal are determined by comparing the
proceeds with the carrying amount and are recognised within ‘other
income’ in profit or loss.
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Contd.)
2.8 Inventories
Inventories are stated at lower of cost and net realisable value. Cost is
determined using the first-in, first-out (“FIFO”) method. The cost includes
cost of instant cards, ticket rolls, bet slips, insurance, freight, customs duty
and any other direct costs. Net realisable value is the estimated selling
price in the ordinary course of business, less applicable variable selling
expenses. If a Quick Win game does not perform to expectations, the
stock of cards is written off as and when deemed appropriate.
2.9 Trade receivables
Trade receivables are amounts due from customers for tickets sold
in the ordinary course of business. If collection is expected in one
year or less (or in the normal operating cycle of the business, if
longer), they are classified as current assets.
cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the statement of profit
or loss and other comprehensive income over the period of the
borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company
has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent that there is evidence that
it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a pre-payment for liquidity services and amortised
over the period of the facility to which it relates.
Bank overdrafts, bank loans and finance lease liabilities are included
in borrowings in the statement of financial position.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment of
trade receivables is established when there is objective evidence that
the Company will not be able to collect all amounts due according
to the original terms of receivables. Significant financial difficulties
of the retailer, probability that the retailer will enter into bankruptcy
or financial reorganisation, and default or delinquency in payments
are considered indicators that the trade receivable is impaired. The
amount of the provision is the difference between the asset’s carrying
amount and the present value of estimated future cash flows,
discounted at the effective interest rate.
2.14 Current and deferred income tax
2.10 Cash and cash equivalents
It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Cash and cash equivalents include cash in hand, deposits held at call
with banks, other short-term investments with original maturities
of three months or less and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities.
2.11 Stated capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
2.12 Trade payables
Trade payables are obligations to pay for goods or services that have
been acquired in the ordinary course of business from suppliers. Trade
payables are classified as current liabilities if payment is due within one
year or less (or in the normal operating cycle of the business if longer).
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
2.13 Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortised
The tax expense for the period comprises current and deferred
income tax and Corporate Social Responsibility (“CSR”) tax. Tax is
recognised in profit or loss, except to the extent that it relates to
items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the reporting date. The directors
periodically evaluate positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation.
Deferred income tax is provided in full, using the liability method, for
all temporary differences arising between the tax bases of assets and
liabilities and their carrying values for financial reporting purposes.
Currently enacted tax rates are used to determine deferred income tax.
The principal temporary differences arise from accelerated capital
allowances and provision for post-employment benefits, provision
for bad debts, unrealised exchange differences on revenue items
and accumulated tax losses.
Deferred income tax assets are recognised to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised. The directors apply judgment to
determine whether sufficient future taxable profit will be available after
considering, amongst others, factors such as cash flows and budgets.
Deferred income tax assets and liabilities are offset when the
deferred income tax assets and liabilities relate to the income taxes
levied by the same taxation authority on either the same taxable
entity or different entities where there is no intention to settle the
balances on a net basis.
43
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Contd.)
2.15 Provisions
Provisions are recognised when the Company has a present legal or
constructive obligation as a result of past events, it is probable that
an outflow of resources will be required to settle the obligation, and
a reliable estimate of the amount can be made. Provisions are not
recognised for future operating losses.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax rate
that reflects current market assessments of the time value of money
and the risks specific to the obligation. The increase in the provision
due to passage of time is recognised as interest expense.
2.16 Employee benefits
(a) Post-employment benefits
Employees are entitled to a gratuity payment on retirement under
the terms of the Employment Rights Act 2008.
The net present value of post-employment benefits payable
under the Employment Rights Act 2008 is calculated by a qualified
actuary and is provided for. The obligations arising from this item
is not funded.
Typically defined benefit plans define an amount of pension benefit
that an employee will receive on retirement, usually dependent on
one or more factors such as age, years of service and compensation.
The liability recognised in the statement of financial position in
respect of defined benefit pension plans is the present value of
the defined benefit obligation at the end of the reporting period
less the fair value of plan assets. The defined benefit obligation is
calculated annually by independent actuaries using the projected
unit credit method.
The present value of the defined benefit obligation is determined
by discounting the estimated future cash outflows using interest
rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms
to maturity approximating to the terms of the related pension
obligation. In countries where there is no deep market in such
bonds, the market rates on government bonds are used.
Actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are charged or credited to equity
in other comprehensive income in the period in which they arise.
Past-service costs are recognised immediately in profit or loss.
(b) Short-term employee benefits
Other employee benefits include wages, salaries, social security
contributions and travelling. These costs are charged to the
statement of profit or loss and other comprehensive income
when incurred.
44
Employee entitlement to annual leave and other benefits are
recognised when they accrue to the employees. Provisions
are made for the estimated liability for annual leave and other
benefits as a result of services rendered by employees up to the
reporting date.
(c) Defined contribution
The Company operates a defined contribution pension plan for
certain qualifying employees. The assets of the plan are held
separately from those of the Company in funds under the control of
an independent management committee. Where employees leave
the plan prior to full vesting of the contributions, the contributions
payable by the Company are reduced by the amount of forfeited
contributions. Any residual gratuities under the Employment
Rights Act 2008 for the qualifying employees after allowing for
permitted deductions in respect of the pension plan are included in
the post-employment benefits in respect of The Employment Rights
Act 2008.
(d) Termination benefits
Termination benefits are payable when employment is terminated
by the Company before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for
these benefits. The Company recognises termination benefits at
the earlier of the following dates: (a) when the Company can no
longer withdraw the offer of those benefits; and (b) when the entity
recognises costs for a restructuring that is within the scope of IAS 37
and involves the payment of termination benefits.
In the case of an offer made to encourage voluntary redundancy,
the termination benefits are measured based on the number of
employees expected to accept the offer. Benefits falling due more
than 12 months after the end of the reporting period are discounted
to their present value.
(e) Profit-sharing and bonus plans
The Company recognises a liability and an expense for bonuses
and profit-sharing, based on a formula that takes into consideration
the profit attributable to the Company’s shareholders after
certain adjustments. The Company recognises a provision where
contractually obliged or where there is a past practice that has
created a constructive obligation.
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Contd.)
2.17 Finance leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
statement of profit or loss and other comprehensive income on a
straight-line basis over the period of the lease.
The Company leases certain property, plant and equipment.
Leases of property, plant and equipment where the Company has
substantially all the risks and rewards of ownership are classified
as finance leases. Finance leases are capitalised at the lease’s
commencement at the lower of the fair value of the lease property
and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance
charges. The corresponding rental obligations, net of finance
charges, are included in non-current liabilities. The interest element
of the finance charge is charged to the statement of profit or loss and
other comprehensive income over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of the
liability for each period. Property, plant and equipment acquired
under finance leases are depreciated over the shorter of the assets
useful life and the lease term.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market.
They are included in current assets, except for maturities greater
than 12 months after the reporting date. These are classified as
non-current assets. The Company’s loans and receivables comprise
‘trade and other receivables’ and ‘cash and cash equivalents’ in the
statement of financial position.
(b) Recognition and measurement
Loans and receivables are carried at amortised cost using the
effective interest method.
(c) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount
reported in the statement of financial position when there is a
legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously.
2.20 Segment information
Segmental reporting is based on the internal reports regularly
reviewed by the chief operating decision maker in order to allocate
resources to the segment and to assess their performance. The
operating segment is the gaming segment.
2.18 Investment in subsidiary
Investments in subsidiaries are accounted for at cost less impairment.
Cost is adjusted to reflect changes in consideration arising from
contingent consideration amendments. Cost also includes direct
attributable costs of investment.
The Company has taken advantage of paragraph 4 of IFRS 10,
consolidated and separate financial statements which dispenses
it from the preparation of consolidated financial statements,
as it is a subsidiary of Gamma-Civic Ltd, which itself prepares
consolidated financial statements in accordance with IFRSs. The
consolidated financial statements of Gamma-Civic Ltd are available
for public use at its registered office at Royal Road, Chapman Hill,
Beau Bassin, Mauritius. The shareholders do not object to the
Company not presenting consolidated financial statements in these
circumstances.
2.19 Financial instruments Classification
The Company classifies its financial assets as ‘loans and receivables’.
The classification depends on the purpose for which the financial
assets were acquired. The directors determine the classification of
its financial assets at initial recognition.
45
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
3. FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks, including market risk (foreign exchange risk and interest rate risk), credit risk
and liquidity risk. A description of the significant risk factors is given below together with the risk management policies applicable.
The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Company’s performance.
Risk management is carried out by management under policies approved by the Board of Directors.
Financial instruments by category
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
Loans and receivables
Loans and receivables
Loans and receivables
Financial assets
Trade and other receivables
111,413,833
72,353,444
97,005,021
Cash and cash equivalents
199,507,103
253,586,520
140,980,935
310,920,936
325,939,964
237,985,956
Financial liabilities at
amortised cost
Financial liabilities at
amortised cost
Financial liabilities at
amortised cost
Financial liabilities
Borrowings
Trade and other payables
2,629,120
9,058,661
122,942,257
389,872,589
599,951,807
469,038,587
392,501,709
609,010,468
591,980,844
Market risk
(i) Currency risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not
the entity’s functional currency.
The Company carries its operations locally and therefore is not exposed to foreign exchange risk except for transactions with suppliers and
bank accounts denominated in foreign currency, which are mainly United States Dollars (“USD”). As such, the Company is exposed to the
exchange rate movement of the Mauritian Rupee against the United States Dollars.
The currency profile of the Company’s financial assets and liabilities which are denominated in foreign currency is summarised as follows:
31 December 2013
MUR
31 December 2013
MUR
30 June 2012
MUR
30 June 2012
MUR
Financial assets
Financial liabilities
Financial assets
Financial liabilities
305,011,113
389,327,430
313,837,629
601,367,922
United States Dollar
3,436,964
3,174,279
9,842,406
7,642,546
Euro
2,472,859
-
2,259,929
-
310,920,936
392,501,709
325,939,964
609,010,468
Mauritian Rupee
46
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
3. FINANCIAL RISK MANAGEMENT (Contd.)
(iii) Credit risk
Market risk (Contd.)
Credit risk is managed on Company-wide basis. Credit risk arises
from cash and cash equivalents as well as credit exposures to
customers, including outstanding receivables.
(i) Currency risk (Contd.)
Mauritian Rupee
United States Dollar
Euro
30 June 2011
MUR
30 June 2011
MUR
Financial assets
Financial liabilities
234,434,170
586,017,180
965,955
5,963,664
2,585,831
-
237,985,956
591,980,844
Prepayments amounting to MUR167,506 (2012 – MUR3,882,953,
2011 – MUR5,125,637) have not been included in the financial
assets and liabilities.
At 31 December 2013, if the Mauritian Rupee (“MUR”) had weakened/
strengthened by 5% against the United States Dollar (“USD”) with all
other variables held constant, pre-tax profit for the period would
have increased/decreased by MUR13,134 (2012 – MUR109,993,
2011 – MUR249,885), mainly as a result of currency differences on
translation of USD denominated trade payables and bank balances.
At 31 December 2013, if the Mauritian Rupee (“MUR”) had
weakened/strengthened by 5% against the EURO (“EUR”) with all
other variables held constant, pre-tax profit for the period would
have increased/decreased by MUR123,643 (2012 – MUR112,996,
2011 – MUR129,292), mainly as a result of currency differences on
translation of EUR denominated trade payables and bank balances.
For cash and cash equivalents, the Company manages its credit risk
by banking with reputable financial institutions. The directors assess
the credit quality of the customer, taking into account its financial
position, past experience and other factors. Individual risk limits are
set based on internal ratings in accordance with limits set by the
management. The utilisation of credit limits is regularly monitored.
The maximum exposure with respect to credit risk arise from default
of the counter party with a maximum exposure equal to the carrying
amount of the Company’s financial assets. Management is of view
that credit risk exposure is low at 31 December 2013.
The directors believe that the Company has no significant
concentration of credit risk and services are rendered to retailers
with an appropriate credit history.
The aged analysis of trade receivables is disclosed in Note 14.
(iv) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and the availability of funding through an adequate amount of
committed credit facilities and the ability to close our market positions.
The table below analyses the Company’s financial liabilities into
relevant maturing groupings based on the remaining period at the
reporting date to maturity date. The amounts disclosed in the table
are contractual undiscounted cash flows. The amounts disclosed in
the table are the contractual undiscounted cash flows.
The Company has not engaged in any hedging transactions to
mitigate its risks relating to exchange rate fluctuations.
The directors believe that a 5% shift in foreign exchange rate is an
appropriate basis for the sensitivity analysis.
(ii) Interest rate risk
The Company’s income and operating cash flows may be affected
by changes in market interest rates. The Company’s policy is to
maximise returns on interest-bearing assets.
The cash and cash equivalents, bank loans and overdraft balance
carry interest at variable rates and therefore expose the Company
to interest rate risk.
At 31 December 2013, if interest rate on cash and cash equivalents
bank loans and overdraft balance had been 50 basis points
higher/lower with all other variables held constant, the pre-tax
profit for the period would be MUR984,390 higher/lower (2012 –
MUR1,267,933, 2011 – MUR148,411 ) mainly as a result of higher/
lower interest income earned on bank balances.
47
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
3. FINANCIAL RISK MANAGEMENT (Contd.)
Market risk (Contd.)
(iv) Liquidity risk (Contd.)
At call
MUR
Less than
one year
MUR
Between 1 to
5 years
MUR
Total
MUR
As at 31 December 2013
Liabilities
Bank overdraft
Borrowings
Trade and other payables
474,209
-
-
474,209
-
1,397,730
908,299
2,306,029
-
389,872,589
-
389,872,589
474,209
391,270,319
908,299
392,652,827
-
3,389,117
6,900,986
10,290,103
As at 30 June 2012
Liabilities
Borrowings
Trade and other payables
-
599,951,807
-
599,951,807
-
603,340,924
6,900,986
610,241,910
As at 30 June 2011
Liabilities
Bank overdraft
Borrowings
Trade and other payables
798,702
-
-
798,702
-
113,082,457
10,389,459
123,471,916
-
469,038,587
-
469,038,587
798,702
582,121,044
10,389,459
593,309,205
(v) Fair value
The carrying amounts of trade and other receivables, cash in hand and at bank, borrowings and trade and other payables approximate
their fair values.
The fair values are within level 2 of the fair value hierarchy.
(vi) Capital risk management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going-concern in order to provide returns for
shareholders and benefits for other shareholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Company monitors capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowings (including current and non – current borrowings) less cash and cash equivalents. Total capital is calculated
as ‘equity’ as shown in the statement of financial position plus net debt.
48
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
3. FINANCIAL RISK MANAGEMENT (Contd.)
Market risk (Contd.)
(vi) Capital risk management (Contd.)
The gearing ratios at 31 December 2013, 30 June 2012 and 30 June 2011 were as follows:
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
2,629,120
9,058,661
122,942,257
(199,507,103)
(253,586,520)
(140,980,935)
Total borrowings (Note 17)
Less cash and cash equivalents (Note 15)
Net cash
(196,877,983)
(244,527,859)
(18,038,678)
Total equity
100,284,912
7,789,847
(11,587,060)
Total capital
(96,593,071)
(236,738,012)
(29,625,738)
Gearing ratio
0%
0%
0%
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
Gross ticket sales
3,876,363,745
2,596,359,420
3,161,490,780
Draw-based game
3,028,316,640
1,939,516,580
1,835,467,220
848,047,105
656,842,840
1,326,023,560
(1,997,587,441)
(1,338,170,002)
(1,703,562,933)
(605,063,999)
(729,875,682)
(844,556,503)
1,273,712,305
528,313,736
613,371,344
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
(867,243,140)
(729,875,682)
(844,556,503)
262,179,141
-
-
(605,063,999)
(729,875,682)
(844,556,503)
The Company is not geared at 31 December 2013, 30 June 2012 and 30 June 2011.
4. NET INCOME
Scratch cards
Prizes
Consolidated Fund (Note 5)
5. CONSOLIDATED FUND
Consolidated Fund charges for the period/year
Provision for Consolidated Fund charges written back
49
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
5. CONSOLIDATED FUND (Contd.)
On 30 October 2012, in the Supreme Court of Mauritius (Mediation Division), the following agreement was reached among Lottotech Ltd and
the Gambling Regulatory Authority and The Ministry of Finance and Economic Empowerment:
• L ottotech Ltd shall, with effect from 1st July 2012, pay 46.16% of the net proceeds from lottery games to the Consolidated Fund instead of the original
58.01% in accordance with the terms and conditions of the licence issued to it by the Gambling Regulatory Authority under section 59 of the Act.
• Lottotech Ltd shall pay into the Consolidated Fund the sum of MUR131,600,000 to make good its contribution for the period ended 30 June 2012.
MUR
Consolidated Fund provision as at 01 July 2012
482,351,390
Net movement in the Consolidated Fund provision in the period July 2012 to October 2012
(88,572,249)
Consolidated Fund payment as per the Supreme Court (Mediation Division)
(131,600,000)
Provision for Consolidated Fund charges written back
262,179,141
6. OPERATING PROFIT
The following items have been charged in arriving at the operating profit/(loss):
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
Staff costs (Note 8)
142,384,732
90,147,285
100,968,725
Management fee (Note 19 (i))
104,294,001
40,651,868
54,319,750
Marketing administrative expenses
24,426,657
12,260,786
18,181,757
Legal and professional fees
44,383,653
3,431,770
2,096,773
Rent and utilities
26,579,861
15,487,201
15,004,721
5,971,857
5,023,721
5,678,891
Audit services
620,000
550,000
550,000
Other services
105,000
35,000
115,000
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
(808,417)
(297,789)
(1,843,284)
Motor vehicle expenses
Fees payable to auditor for:
7. FINANCE INCOME/(COSTS) - NET
Interest expense on:
Bank overdraft
Bank loan
Leases
-
-
(10,414,800)
(265,658)
(566,350)
(1,067,863)
(1,074,075)
(864,139)
(13,325,947)
11,978,335
7,014,683
1,337,607
-
-
8,615,669
10,904,260
6,150,544
(3,372,671)
Interest income on:
Bank balances
Loan to related party
Net finance income/(costs)
50
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
8. STAFF COST
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
130,911,675
83,755,113
96,804,953
Staff welfare benefits
6,716,220
4,312,220
4,163,772
Defined contribution cost
3,658,837
977,952
-
Wages and salaries
Post-employment benefits
1,098,000
1,102,000
-
142,384,732
90,147,285
100,968,725
9. INCOME TAX EXPENSE
The Company is liable to income tax on its profits, as adjusted for income tax purposes, at the rate of 17% (2012 – 15%, 2011 – 15%). The 17%
tax rate consists of 15% corporate income tax and 2% Corporate Social Responsibility.
(a) Charge for the period/year
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
Based on profit for the period/year, as adjusted for tax purposes
51,670,826
-
-
(Under)/overprovision of deferred tax assets in previous year
(Note 20)
(5,356,112)
4,831,536
1,998,308
Deferred income tax charge/(credit) (Note 20)
17,453,504
4,853,409
(714,296)
(872,969)
-
-
62,895,249
9,684,945
1,284,012
Impact of change in tax rate
Income tax expense
(b) Current income tax liabilities
Income tax liabilities are MUR13,587,271 in 2013 (2012 – MURnil, 2011 – MURnil).
A reconciliation between the actual rate of income tax charge of MUR62,895,249 (2012 – MUR9,684,945, 2011 – MUR1,284,012) and the tax
calculated at the applicable income tax rate of 17% (2012 – 15%; 2011 – 15%) is as follows:
Profit/(loss) before taxation
Tax on the profit/(loss) for the period/year, as adjusted for tax purposes at 17%
(2012 –15%, 2011 – 15%)
Non-tax deductible expense
(Under)/overprovision of deferred tax assets in prior year(Note 20)
Change in tax rate (Note 20)
Effective income tax charge
Period from 1
July 2012 to 31
December 2013
MUR
Year ended 30 June
2012
MUR
Year ended 30 June
2011
MUR
406,355,314
29,061,852
(7,346,311)
69,080,403
4,359,278
(1,101,947)
43,927
494,131
387,651
(5,356,112)
4,831,536
1,998,308
(872,969)
-
-
62,895,249
9,684,945
1,284,012
At 31 December 2013, it had no accumulated tax losses (2012 – MUR109,994,442, 2011 – MUR227,726,928). The change in the tax rate is due
to the CSR paid being calculated on a chargeable income basis as from 1 January 2012 rather than book profit.
51
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
10. EARNINGS PER SHARE
Profit attributable to shareholders (MUR)
Period from 1
July 2012 to 31
December 2013
Year ended 30 June
2012
Year ended 30 June
2011
343,460,065
19,376,907
(8,630,323)
Number of shares entitled to dividends
100,000
100,000
100,000
Basic and diluted earnings per share (MUR)
3,434.60
193.77
(86.03)
There are no dilutive instruments.
11. PROPERTY, PLANT AND EQUIPMENT
Leasehold
improvement
MUR
Equipment
MUR
Furniture and
fittings
MUR
Motor vehicles
MUR
Work in
progress
MUR
Total
MUR
56,325,812
233,845,197
13,717,619
8,481,926
8,105,591
320,476,145
Additions
8,427,877
24,910,981
1,195,725
3,545,310
-
38,079,893
Transfer from work in progress
8,105,591
-
-
-
(8,105,591)
-
72,859,280
258,756,178
14,913,344
12,027,236
-
358,556,038
1,201,264
8,500,190
507,471
5,991,161
-
16,200,086
74,060,544
267,256,368
15,420,815
18,018,397
-
374,756,124
2,247,768
57,200,315
38,372
6,687,367
-
66,173,822
Cost:
At 01 July 2010
At 30 June 2011
Additions
At 30 June 2012
Additions
-
-
-
(8,145,000)
-
(8,145,000)
76,308,312
324,456,683
15,459,187
16,560,764
-
432,784,946
At 30 June 2010
2,838,787
17,073,392
1,388,869
872,647
-
22,173,695
Charge for the year
16,147,435
30,750,345
1,506,344
1,792,524
-
50,196,648
18,986,222
47,823,737
2,895,213
2,665,171
10,752,851
32,218,296
4,739,434
2,613,975
-
50,324,556
29,739,073
80,042,033
7,634,647
5,279,146
-
122,694,899
23,356,360
55,096,554
1,545,990
5,590,248
-
85,589,152
Disposals
At 31 December 2013
Accumulated depreciation:
At 30 June 2011
Charge for the year
At 30 June 2012
Charge for the period
72,370,343
-
-
-
(5,259,966)
-
(5,259,966)
53,095,433
135,138,587
9,180,637
5,609,428
-
203,024,085
At 31 December 2013
23,212,879
189,318,096
6,278,550
10,951,336
-
229,760,861
At 30 June 2012
44,321,471
187,214,335
7,786,168
12,739,251
-
252,061,225
At 30 June 2011
53,873,058
210,932,441
12,018,131
9,362,065
-
286,185,695
Disposals
At 31 December 2013
Net carrying amount:
Depreciation expense of MUR85,589,152 (2012 – MUR50,324,556, 2011 – MUR50,196,648) has been charged in gaming systems and data
telecommunication costs. Included in the net book value of property, plant and equipment are 5 motor vehicles (2012 – 17, 2011 – 17) held
under finance lease amounting to MUR3,152,372 (2012 – MUR5,604,106, 2011 – MUR6,751,935).
The Company leases various vehicles under non-cancellable finance lease agreements. The lease terms are between five and six years and
ownership of the assets lie with the Company.
52
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
12. INVESTMENT IN SUBSIDIARY
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
1,000
1,000
-
Additions
-
-
1,000
Disposal
()
-
-
-
1000
1000
Cost:
At 01 July
At 31 December/30 June
The Company disposed of its investment in its 100% subsidiary, namely Gamlot Technologies Ltd at cost on 31 December 2013. Details of the
Company’s direct interest in its subsidiary Company as at 30 June 2012, which is incorporated in Mauritius, is as follows:
Name of
Company
Country of
incorporation
Activities
Year of
incorporation
Description of
shares held
Effective
percentage holding
Gamlot
Technologies Ltd
Mauritius
Leasing of
equipment
2011
Ordinary shares
100%
13. INVENTORIES
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
40,894,962
30,944,979
30,760,115
3,447,786
8,332,358
5,439,172
Cost:
Instant cards
Ticket rolls, bet slips and others
Inventory write-down
(30,000,000)
(8,471,428)
-
14,342,748
30,805,909
36,199,287
Inventory consumed during the period amounted to MUR45,540,440 (2012 – MUR39,531,303, 2011 – MUR49,598,052). The inventory writedown arose as a result of a change in the estimate of usability of instant cards.
14. TRADE AND OTHER RECEIVABLES
Trade and other receivables
Provision for impairment of receivables
Prepayments and deposits
Receivables from related parties (Note 19(ii))
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
102,611,916
24,458,640
31,998,086
(3,162,474)
(3,162,474)
(2,612,474)
99,449,442
21,296,166
29,385,612
2,098,263
4,098,218
5,485,688
10,033,634
50,842,013
67,259,358
111,581,339
76,236,397
102,130,658
53
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
14. TRADE AND OTHER RECEIVABLES (Contd.)
The fair value of trade and other receivables approximates its carrying amounts as the effect of discounting is not significant. All trade and
other receivables are due within one year of the reporting date.
At 31 December 2013, trade receivables of MUR99,449,442 (2012 – MUR21,296,166, 2011 – MUR29,385,612) were considered as neither past
due nor impaired. These receivables relate to retailers who have a history of prompt settlement and who were still within the credit limit
allowed to them.
At 31 December 2013, trade receivables of MUR3,162,474 (2012 – MUR3,162,474, 2011 – MUR2,612,474) were impaired for. The ageing
analysis of these trade receivables is as follows:
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
Up to 5 days
-
-
629,451
Over 5 days
3,162,474
3,162,474
1,983,023
3,162,474
3,162,474
2,612,474
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
3,162,474
2,612,474
1,612,474
The movement in provision for impairment of trade and other receivables are as follows:
At 01 July
Increase in provision
At 31 December/30 June
-
550,000
1,000,000
3,162,474
3,162,474
2,612,474
The provision for impaired receivables has been included in the statement of profit or loss and other comprehensive income. Amounts
charged to the provision account are generally written off when there are no expectations of recovering additional cost.
All items within trade and other receivables are denominated in Mauritian Rupees and no collaterals are held against trade and other
receivables at the end of the reporting period.
15. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of the following for the purpose of statement of cash flows:
Cash at bank and in hand
Bank overdraft (Note 17)
54
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
199,507,103
253,586,520
140,980,935
(474,209)
-
(798,702)
199,032,894
253,586,520
140,182,233
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
16. STATED CAPITAL
31 December
2013
Number
31 December
2013
MUR
30 June
2012
Number
30 June
2012
MUR
30 June
2011
Number
30 June
2011
MUR
100,000
100,000,000
100,000
100,000,000
100,000
100,000,000
Issued and fully paid:
Ordinary shares of no par
value each
17. BORROWINGS
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
882,315
6,355,167
9,061,098
882,315
6,355,167
9,061,098
474,209
-
798,702
-
-
110,500,000
Non-current:
Finance leases
Current:
Bank overdraft (Note 15)
Bank loan
Finance leases
Total Borrowings
1,272,596
2,703,494
2,582,457
1,746,805
2,703,494
113,881,159
2,629,120
9,058,661
122,942,257
(a) Bank borrowings
The Company has a bank overdraft facility of MUR50,000,000. The bank overdraft is secured by a first rank floating charge on all assets of
the Company.
(b) Finance leases
The obligations under finance lease relate to motor vehicles with lease term between five and six years. The Company has the option to
purchase the leased assets for a nominal amount at the conclusion of the lease agreements.
The obligations under finance leases are effectively secured as the rights to the leased assets revert to the lessor in the event of default. The
rates of interest are of a fixed nature. The fair value of obligations under finance leases approximates their carrying amount.
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
1,397,730
3,389,117
3,507,418
908,299
6,900,986
10,389,459
2,306,029
10,290,103
13,896,877
(151,118)
(1,231,442)
(2,253,322)
2,154,911
9,058,661
11,643,555
Amount falling due:
Not later than 1 year
Later than 1 year but within 5 years
Future finance charges on finance leases
Present values of finance lease liabilities
55
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
18. TRADE AND OTHER PAYABLES
Trade payables and accruals
Amount due to related parties (Note 19(ii))
Prize liability and reserve fund
Unclaimed prize
Consolidated Fund
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
23,398,284
51,405,581
54,155,905
52,609,006
8,722,749
35,803,206
156,132,387
38,826,609
50,154,508
26,254,330
18,645,478
12,392,382
131,478,582
482,351,390
316,532,586
389,872,589
599,951,807
469,038,587
19. RELATED PARTY TRANSACTIONS
The directors consider Gamma-Civic Ltd, a company incorporated and domiciled in the Republic of Mauritius, as the parent and ultimate
controlling party.
(i) Transactions carried out with related parties:
Management fee charged by a fellow subsidiary of Gamma-Civic Ltd (Note 6)
Interest recharged on advances made to the ultimate parent
Period from
1 July 2012 to 31
December
2013
MUR
Year ended
30 June
2012
MUR
Year ended
30 June
2011
MUR
104,294,001
40,651,868
54,319,750
-
-
8,615,669
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
236,951
24,391,425
47,682,805
-
26,450,588
10,960,884
(ii) Period/year-end balances arising from transactions with related parties.
Amounts receivable from related parties (Note 14):
Fellow subsidiary
Immediate subsidiary
Ultimate parent
9,796,683
-
8,615,669
10,033,634
50,842,013
67,259,358
The amounts receivable from related parties are unsecured, interest free and repayable on demand.
The receivables from related parties pertain to amounts paid by the Company on behalf of the related parties for the purchase of lottery
equipment and software.
During the period ended 31 December 2013, the Company provided no advances (2012 – Nil, 2011 - MUR152,500,000 all of which was repaid
during the year ended 30 June 2012) to its ultimate parent. The advances carried interest charge at 6% per annum.
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
Amounts payable to related parties (Note 18):
Ultimate parent
Fellow subsidiaries
56
-
-
22,208,447
52,609,006
8,722,749
13,594,759
52,609,006
8,722,749
35,803,206
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
19. RELATED PARTY TRANSACTIONS (Contd.)
(iii) Key management compensation
Key management includes directors. The compensation paid or payable to key management personnel for employee services is
shown below:
Period from
1 July 2012 to 31
December
2013
MUR
Year ended
30 June
2012
MUR
Year ended
30 June
2011
MUR
54,415,327
42,162,407
55,563,406
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
At 01 July
-
8,615,669
2,028,000
Loans advanced during the period/year
-
-
152,500,000
Loan repayments received
-
(8,615,669)
(154,528,000)
Interest charged (Note 19 (i),(ii))
-
-
8,615,669
At 30 June
-
-
8,615,669
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
(6,547,264)
(16,232,209)
(17,516,221)
Charge to profit or loss (Note 9)
11,224,423
9,684,945
1,284,012
At 31 December/30 June
4,677,159
(6,547,264)
(16,232,209)
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
(872,969)
-
-
Salaries and other short-term employee benefits
(iv) Loans to related parties
20. DEFERRED INCOME TAX LIABILITIES/(ASSETS)
The gross movement on the deferred income tax account is as follows:
At 01 July
Movement in deferred tax:
Effect of change in tax rate
(Under)/overprovision of deferred tax assets in prior year
(5,356,112)
4,831,536
1,998,308
Deferred income tax charge/(credit)
17,453,504
4,853,409
(714,296)
11,224,423
9,684,945
1,284,012
57
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
20. DEFERRED INCOME TAX LIABILITIES/(ASSETS) (Contd.)
The movement in deferred income tax liabilities/(assets) is as follows:
31 December 2013
Accelerated
capital
allowances
MUR
Postemployment
benefits
MUR
Provision
for doubtful
debts
MUR
Accumulated
tax losses
MUR
Unrealised
gains/ losses
MUR
Total
MUR
At 01 July 2012
10,894,439
(365,700)
(474,371)
(16,499,167)
(102,465)
(6,547,264)
Effect of change in tax rate (Note 9)
1,452,592
(48,761)
(63,250)
(2,199,888)
(13,662)
(872,969)
Charge/(Credit) to income statement (Note 9)
(1,236,218)
(125,460)
-
18,699,055
116,127
17,453,504
Underprovision of deferred tax liabilities/(assets)
in prior year (Note 9)
(5,356,112)
-
-
-
-
(5,356,112)
At 31 December 2013
5,754,701
(539,921)
(537,621)
-
-
4,677,159
Accelerated
capital
allowances
MUR
Postemployment
benefits
MUR
Provision
for doubtful
debts
MUR
Accumulated
tax losses
MUR
Unrealised
gains/ losses
MUR
Total
MUR
18,443,122
(200,400)
(391,871)
(34,159,040)
75,980
(16,232,209)
(7,548,683)
(165,300)
(82,500)
12,828,337
(178,445)
4,853,409
30 June 2012
At 01 July 2011
Charge/(Credit) to income statement (Note 9)
Overprovision of deferred tax liabilities/(assets) in
prior year (Note 9)
At 30 June 2012
30 June 2011
At 01 July 2010
Charge/(Credit) to income statement (Note 9)
Overprovision of deferred tax liabilities/(assets) in
prior year (Note 9)
At 30 June 2011
58
-
-
-
4,831,536
-
4,831,536
10,894,439
(365,700)
(474,371)
(16,499,167)
(102,465)
(6,547,264)
Accelerated
capital
allowances
MUR
Postemployment
benefits
MUR
Provision
for doubtful
debts
MUR
Accumulated
tax losses
MUR
Unrealised
gains/ losses
MUR
Total
MUR
(3,326,054)
-
(241,871)
(13,948,296)
-
(17,516,221)
5,262,608
(200,400)
(150,000)
(5,702,484)
75,980
(714,296)
16,506,568
-
-
(14,508,260)
-
1,998,308
18,443,122
(200,400)
(391,871)
(34,159,040)
75,980
(16,232,209)
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
21. POST-EMPLOYMENT BENEFITS
The Company participates in a multi-employer defined contribution pension plan to which it contributes 6%, 8% or 10% of its eligible
employees’ salaries depending on age. These contributions amounted to MUR3,658,837 for the 18 months ended 31 December 2013 (year
ended 30 June 2012 – MUR977,952, year ended 30 June 2011 – MURnil).
In addition, the Company has recognised a net defined benefit liability of MUR4,141,000 in its Statement of Financial Position as at 31
December 2013 (30 June 2012 – MUR2,438,000, 30 June 2011 – MUR1,336,000) in respect of any additional retirement gratuities that are
expected to be paid out of the Company’s cashflow to its employees under the Employment Rights Act 2008.
The amount recognised in the statement of financial position is as follows:
Period from
1 July 2012 to 31
December 2013
MUR
Year ended
30 June
2012
MUR
Year ended
30 June
2011
MUR
Current service cost
775,000
968,000
913,000
Interest cost
323,000
134,000
55,000
-
-
718,000
1,098,000
1,102,000
1,686,000
(1,174,000)
-
-
Amounts recognised in profit or loss
Past service cost recognised
Amounts recognised in other comprehensive income
Liability experience gain
Liability loss due to change in financial assumptions
2,139,000
-
-
965,000
-
-
31 December
MUR
30 June
MUR
30 June
MUR
2,438,000
1,336,000
-
1,098,000
1,102,000
1,686,000
965,000
-
-
Movements in liability recognised in statement of financial position
At start of period/year
Amount recognised in profit or loss
Amounts recognised in other comprehensive income
(360,000)
-
(350,000)
4,141,000
2,438,000
1,336,000
Discount rate
7.50%
10.00%
10.00%
Future salary increases
6.50%
8.00%
8.00%
60
60
60
Contributions and direct benefits paid
At end of period/year
Principal actuarial assumptions at end of period/year
Average retirement age (ARA)
59
17.Historical financial information (contd.)
Notes to the financial statements - 31 December 2013 (Contd.)
21. POST-EMPLOYMENT BENEFITS (Contd.)
31 December
2013
MUR
30 June
2012
MUR
30 June
2011
MUR
Reconciliation of the present value of defined benefit obligation:
Present value of obligation at start of period/year
2,438,000
1,336,000
-
Current service cost
775,000
968,000
913,000
Interest cost
323,000
134,000
55,000
-
-
718,000
(360,000)
-
(350,000)
965,000
(164,000)
-
4,141,000
2,274,000
1,336,000
Past service cost
Benefits paid
Liability loss/(gain)
Present value of obligation at end of period/year
22. DIVIDENDS
The Company declared dividends of MUR250,000,000 in the 18 month period ended 31 December 2013 (2012 – MURnil) of which
MUR40,000,000 was payable as at 31 December 2013.
23. COMMITMENTS
The Company leases its offices under non-cancellable operating lease agreements. The lease terms are for 5 years.
The future aggregate minimum lease payments under the non-cancellable operating leases are as follows:
31 December
2013
MUR
Not later than one year
Later than 1 year and no later than 5 years
30 June
2012
MUR
30 June
2011
MUR
12,291,125
12,203,438
11,183,021
4,246,357
18,787,276
28,501,799
16,537,482
30,990,714
39,684,820
24. SEGMENT INFORMATION
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Company that are regularly
reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance.
The Company has only one reportable operating segment based on its business activities, which is the Gaming segment. As such, the required disclosures
for the years ended 30 June 2011 and 30 June 2012, and the 18 month period ended 31 December 2013 are already included in the financial statements.
The accounting policies of the operating segment are the same as those described in Note 2.20.
25. CHANGE IN ACCOUNTING YEAR END
The Company has changed its accounting year end from 30 June to 31 December and the accounts have been prepared for 18 month
period ended 31 December 2013 compared to 12 months for the year ended 30 June 2012.
26. SUBSEQUENT EVENTS
There were no significant subsequent events since the end of the period reported on.
60
18. Summary of constitution
Subject to the Companies Act 2001, any other enactment and
general law, the Company shall have full capacity to carry on or
undertake any business or activity, do any act or enter into any
transaction both within and outside Mauritius. The duration of the
Company is unlimited.
18.1 Existing ordinary shares
Subject to compliance with the provisions of the Companies
Act 2001, the Board may, in its absolute discretion and without
assigning any reason, decline:
• T o register the transfer of an ordinary share on which the Company
has a lien; and
• To recognise any instrument of transfer unless:
The stated capital of the Company as at 31 December 2013
amounted to MUR100,000,000 made up of 100,000 ordinary shares
of no par value.
- Deposit of transfer:
- The instrument of transfer is deposited at the office of the
Company accompanied by the certificate of the ordinary
shares to which it relates, and such other evidence as the Board
may reasonably require to show the right of the transferor to
make the transfer; and
- All instruments of transfer which are registered may be retained
by the Company.
At the date of listing, the stated capital of the Company will be
MUR100,000,000 made up of 340,000,000 ordinary shares of no par
value.
18.2 Rights of existing ordinary shares
Each ordinary share confers upon its holder the rights set out in
Section 46(2) of the Companies Act 2001 namely:
• T he right to one vote on a poll at a meeting of the Company on
any resolution;
• The right to an equal share in dividends authorised by the Board;
and
• The right to an equal share in the distribution of surplus assets of
the Company.
18.3 Issue of ordinary shares
The Board may issue further ordinary shares in the Company if
the issue has been approved by an ordinary resolution of the
shareholders.
18.4 Pre-emptive rights
New ordinary shares issued shall be offered to the holders of
ordinary shares already issued in a manner which would, if the
offer were accepted, maintain the relative voting and distribution
rights of those shareholders. Such an offer shall remain open for
acceptance by the holders of ordinary shares for a period of not less
than fourteen days.
New ordinary shares offered to shareholders and not accepted
within the prescribed time may be disposed of by the Board in such
manner as it thinks most beneficial to the Company.
18.5 Transfer of ordinary shares
There shall be no restrictions on the transfer of fully paid up ordinary
shares in the Company and transfers shall be registered with the
Company without payment of any fee.
- Central Depository System:
- It is required or authorised to do so under the provisions of
the Securities (Central Depository, Clearing and Settlement)
Act 1996.
- Partly paid ordinary shares:
- In the case of partly paid ordinary shares, any amount already
called thereon has been settled and the transfer document
contains an undertaking by the transferee to pay on due date
any amount payable in terms of the issue of the ordinary share
so transferred.
18.6 Dividend
The Company shall distribute a minimum of 75% of its annual
net profit after tax as dividends according to the Companies Act
2001, except as otherwise resolved by the shareholders by way of
ordinary resolution.
The Board may deduct from any dividend payable to any shareholder
any sums of money, if any, presently payable by such shareholder
to the Company on account of calls or otherwise in relation to the
ordinary shares on which such dividends are payable.
18.7 Unclaimed dividends
All dividends unclaimed for one year having been authorised may
be reinvested or otherwise made use of by the Board for the benefit
of the Company until claimed, and all dividends unclaimed for 5
years after having been declared may be forfeited by the Board for
the benefit of the Company.
Any ordinary share may be given in pledge in all civil and commercial
transactions in accordance with the Mauritius Civil Code. The
Company shall keep a register in which:
• T he transfer of ordinary shares given in pledge may be inscribed;
and
• It shall be stated that the pledgee holds the ordinary share not as
owner but in pledge of a debt.
61
18. Summary of CONSTITUTION (contd.)
18.8 Powers of the Board
The Board shall have all the powers necessary for managing and
for directing and supervising the management of the business and
affairs of the Company except to the extent that the constitution
expressly requires those powers to be exercised by the shareholders
or any other person.
The Board shall not permit the Company to enter into a major
transaction unless the transaction is:
• Approved by an ordinary resolution if the value of the transaction
is more, or is likely to be more than 33% but less than 67% of the
assets of the Company;
• Approved by a special resolution if the value of the transaction
is, or likely to be, 67% or more of the value of the assets of
the Company; or
• Made contingent on approval by ordinary or special resolution, as the case may be.
18.9 Number of Directors
The number of Directors shall not be less than 5 and no more than 12.
18.10 Appointment of Directors
The Directors shall be the persons appointed from time to time as
Directors by a notice in writing signed by the holders of the majority
of the ordinary shares and who have not resigned or been removed
or disqualified from office under this constitution.
A Director shall hold office until his resignation, disqualification,
until his term of office expires or removal in accordance with the
constitution. A member of the Board shall hold office until the expiry
of his term of office provided always that the term of office of the
said member of the Board shall not exceed three successive Annual
Meetings. At the conclusion of an Annual Meeting, a member of the
Board whose terms of office reaches expiry, may be eligible for reelection.
• Manage the affairs of the Board and chair discussions in such a
way that strategic and policy decisions are fully discussed,
debated and decided by the Board;
• Follow up matters assigned by the Board to any of its permanent
Board Committees (the Corporate Governance Committee and
the Audit Committee) and ad-hoc Committees, and
ensure that the matters considered by such Committees are on
the agenda of future Board meetings in order to inform the
Board and/ or to obtain its approval; and
• Ensure on behalf of the Board that sound Corporate Governance
practices permeate throughout the Company and that the
Corporate Governance Committee operates effectively. The
Chairman shall have a casting vote at meetings of the Board and
at General Meetings.
18.13 Remuneration of Directors
The shareholders, by ordinary resolution, shall approve:
• The payment of remuneration by the Company to all Directors,
including the Chairman; and
• The making of loans and the giving of guarantees by the
Company to any Director.
Any Director may act by himself, or his firm in a professional capacity
for the Company, and the Director or the Director’s firm will be
entitled to remuneration for professional services as if the Director
were not a Director. However, the constitution does not authorise a
Director or a Director’s firm to act as auditor for the Company.
A Director may hold any other office in the Company (other than
the office of auditor), for such period and on such terms (as to
remuneration and otherwise) as the Board shall determine.
Where any Director is interested in a transaction to which the
Company is party, the Director is required to disclose such interest.
18.14 Share qualification of Directors
18.11 Eligibility criteria for Directors
A Director shall not be required to hold ordinary shares.
A person will be disqualified from being a Director if he attains or
is over the age of 70 unless resolved otherwise by shareholders. A
person below the age of 18 is not eligible to be named as a Director
of the Company.
18.15 Management
18.12 Chairperson
18.16 Purchase of own shares
The Directors shall elect one of their number as Chairman of the
Board.
Conformably to the provisions of Section 69 of the Companies Act
2011, the Company is authorised to purchase or otherwise acquire
and hold ordinary shares issued by it and may own the acquired
ordinary shares conformably to Section 72 of the Companies Act
2001.
The Chairman of the Company shall chair the General Meeting,
whenever he is present. In his absence the Directors present shall
choose one of their numbers to act as Chairman of the General
Meeting.
In case of a casual vacancy in the office of Chairman of the Company,
the Board shall within 14 days of the casual vacancy occurring
appoint one of the Directors to serve as Chairman until the next
Annual Meeting.
The Chairman shall not be an Executive Director of the Company
and in addition to the provisions of the Companies Act 2001,
the Chairman shall hold the following specific responsibilities:
62
The business and affairs of the Company shall be managed by and
under the direction or supervision of a Board of Directors.
Where the Company holds its own ordinary shares, the Board, may
by resolution, resolve that the ordinary shares so held be transferred,
cancelled or re issued, and the Directors are authorised to do all acts
and things necessary to give effect to such transfers, cancellation
or issues, in such numbers and at such times as they deem fit in
conformity with law.
19. Other matters
19.1 Estimated costs of the admission of Lottotech
ordinary shares to the SEM
The aggregate costs of the listing or incidental to the listing to be
borne by the Company are estimated to be MUR8m (inclusive of
VAT), as follows:
Description
MUR (inclusive of VAT)
Consultancy fees
3,600,000
Listing fees
100,000
Marketing, printing and
distribution costs
Total
4,300,000
8,000,000
Other listing costs such as commissions to licensed investment
dealers shall be borne by the existing shareholders of the Company
prior to the Offer for Sale.
19.2 Offer for Sale to retailers of Lottotech, directors
and employees of Gamma group of companies and SIC
Up to 20% of the ordinary shares on offer will be reserved to be
allocated to retailers of Lottotech, directors and employees of
Gamma group of companies and SIC, with a discount of 5% on
the offer price. This offer is subject to a restriction that these said
retailers, directors and employees may not sell any of these ordinary
shares purchased through this scheme for a period of 365 days from
the listing date.
The Board will define the allotment criteria and retains the right
to allocate the ordinary shares in such a manner as it deems
appropriate. The allotment criteria are subject to the approval of the
relevant regulatory authorities.
19.3 Legal proceedings
As far as the Directors are aware, there are no current, pending or
threatened legal or arbitration proceedings against Lottotech,
which may have, or have had, in the past 12 months preceding the
date of these Listing Particulars, a material impact on Lottotech’s
financial position.
19.4 Contingent liabilities
Lottotech currently does not have any contingent liabilities as
reported in the Accountants’ Report.
19.5 Mortgages and charges
At 31 December 2013, the Company had a charge of MUR100m
registered against it by the State Bank of Mauritius (“SBM”). The
registered charge relates to the overdraft facility that SBM has
provided to Lottotech, the purpose of which is to provide a bridge
facility for the Company to pay prize winners. This overdraft facility
is only used occasionally as bridge finance.
This charge was reduced to MUR55m on 10 March 2014.
19.7 Number of employees
Department
2013
Executives
2012
9
8
Administration and Human Resources
10
10
Finance
11
11
Security
5
9
Public Relations
1
2
Internal Audit
1
2
Management Information System
6
7
Marketing
5
6
Warehouse
3
4
TV Production
10
10
Information Technology
25
27
Sales
9
6
Service Support
5
7
Field Sales Representative
Total
9
10
109
119
19.8 Material contracts
19.8.1 Shareholders’ agreement with SIC
Gamma has been a promoter of Lottotech since inception and
assists and supervises management in operation of the Mauritius
National Lottery and in the strategy and business development of
the Company.
In April 2009, Gamma entered into a shareholders’ agreement
with the SIC for Lottotech to implement and operate the Mauritius
National Lottery and SIC became a shareholder of Lottotech. The
agreement stipulates that the parties shall cause Lottotech to obtain
the licence to operate the Mauritius National Lottery and they shall
not directly or indirectly compete with Lottotech.
Under the GRA Act, the Operator means a company promoted by
the SIC and licensed to operate the Mauritius National Lottery and
video lottery terminals. The GRA Act stipulates that there shall, at no
time, be more than one operator holding a licence to operate the
Mauritius National Lottery.
19.8.2 Agreements with GTECH
In August 2008, Lottotech entered into agreements with GTECH as
Lottotech’s exclusive technology partner namely:
• A
Lottery Equipment Supply Agreement for the supply of retailer
terminals, central system hardware and spare parts; and
• A
Lottery Technology Supply and Support Agreement for the
development of software application, granting of software
licences and the provision of on-going technical, marketing and
management support services.
19.6 Borrowings
At 31 December 2013, the Company does not have any debt
securities nor have any borrowings.
63
19. Other matters (contd.)
19.8.3 Management services agreement with ASB
19.13 Gamlot Technologies Ltd
In November 2009, Lottotech entered into a management services
agreement with ASB, a subsidiary of Gamma, for the following
services:
On 31 December 2013, Lottotech disposed of its shareholding in
a company called Gamlot Technologies Ltd to its ultimate parent
company, Gamma. The principal business activity of Gamlot
Technologies Ltd is the provision of technological solutions to Reel
Mada SA. The Board has approved the disposal to Gamma to keep
these two lottery businesses separate.
• Assisting and supervising management in the running of the operations;
• Business development;
• Marketing and sales and product development;
• Human resources and administrative support;
• Finance and procurement;
• Management information systems and security; and
• L egal, accounting, information technology, secretarial and risk
management services.
In November 2009, ASB signed a management agreement with
Gamma for the same services.
19.8.4 Other
The Directors of Lottotech are not directly interested in any contracts
or arrangements subsisting at the date of this document in relation
to the business of Lottotech.
19.9 Research and development
Lottotech has engaged Ipsos Reid, a global market research
company with deep research experience in lottery worldwide, to
undertake regular market surveys. The first stage was to complete
a segmentation study which is now to be followed by the Ipsos
Optimizer and Optimix.
Ipsos Optimizer looks at finding the best solutions to yield the
highest sales from the different combinations of top prize, Quick
Win themes, play styles, number of players, etc. Ipsos Optimix will
assist the Company to better understand which proposed Quick
Win games are most appealing to players.
In addition, Lottotech conducts on-going focus group discussions
on its Quick Win games prior to development and launch.
19.10 Stated capital
The stated capital of Lottotech as at 31 December 2013 stands at
MUR100,000,000. No changes have occurred since then.
19.11 Share split
On 3 March 2014, the shareholders of Lottotech approved a share
split whereby each of the 100,000 ordinary shares in issue would be
divided into 3,400 ordinary shares. The stated capital of Lottotech
post share split is therefore 340,000,000 ordinary shares. The share
split was effective as from 14 March 2014.
19.12 Reel Mada SA
Reel Mada SA is the operator of the Madagascar National Lottery.
Gamma holds a 65% stake in Reel Mada SA and Lottotech is not
involved in Gamma’s investment in Madagascar.
64
20. Documents available for inspection
The following documents will be made available for inspection for
a minimum of 14 business days as from the date of these Listing
Particulars during the normal working hours at the principal office
of Lottotech:
• Listing Particulars of the Company;
• The constitution of the Company;
• The valuation report of the independent valuers;
• T he reporting accountants’ report for the years ended 30 June
2011, 2012 and 18 month period ended 31 December 2013; and
• L ottotech’s audited financial statements for the years ended 30
June 2011, 2012 and 18 month period ended 31 December 2013.
21. List of licensed investment dealers
Co-sponsoring licensed investment dealers:
Capital Market Brokers Ltd
MCB Stockbrokers Ltd
SBM Securities Ltd
Suite 1004, Ground Floor
9th Floor, MCB Centre
Level 6, State Bank Tower
Alexander House
Sir William Newton Street
1, Queen Elizabeth II Avenue
35, CyberCity, Ebène
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 467 9655
Tel: +230 202 5427
Tel: +230 202 1111
Anglo-Mauritius Stockbrokers Limited
Associated Brokers Ltd
AXYS Stockbroking Ltd
3rd Floor, Swan Group Centre
3rd Floor, Travel House
Bowen Square
10, Intendance Street
Sir William Newton Street
10, Dr. Ferrière Street
Port Louis
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 208 7010
Tel: +230 212 3038
Tel: +230 213 3475
Bramer Capital Brokers Ltd
Citygate Securities Ltd
IPRO Stockbroking Ltd
11th Floor, Bramer House
7A, 7th Floor, Ebène Mews
3rd Floor, Ebène Skies
66C2, CyberCity
57, CyberCity
Rue De L’Institut
Ebène
Ebène
Ebène
Mauritius
Mauritius
Mauritius
Tel: +230 403 4100
Tel: +230 467 0768
Tel: +230 403 6740
LCF Securities Ltd
Prime Securities Ltd
Ramet & Associés Ltée
Suite 108, 1st Floor, Moka Business Centre
Ground Floor, Unit 17, Air Mauritius Centre
1st Floor, St Louis House
Mont Ory Road
6, President John Kennedy Street
17, Mgr Gonin Street
Moka
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 406 9626
Tel: +230 212 3500
Tel: +230 212 3535
Other licensed investment dealers:
65
22. Glossary of definitions and abbreviations Terms
Definition
Terms
Definition
000's
Thousands
Issuer
Lottotech Ltd
%
Percentage
KPMG
Independent Valuers
ASB
A. S. Burstein Management Ltd
NAV
Net asset value
bn
Billion
LEC
Listing Executive Committee
Board
Members as defined in section
15.1 of the document
Lottotech
Lottotech Ltd
CDS
Central Depository System
LR
Listing Rules
Company
Lottotech Ltd
m
Million
CSR
Corporate Social Responsibility
MUR
Mauritian Rupees
Directors
Directors of Lottotech Ltd
Net proceeds
Gross ticket sales less prizes
Emtel
Mobile network operator
Operator
Mauritius National Lottery
EBITDA
Earnings before interest, tax,
depreciation and amortisation
Orange
Mobile network operator
P/E
Price-earnings ratio
EPS
Earnings per share
PAT
Profit after tax
FIFO
First in first out
PBT
Profit before tax
FRC
Financial Reporting Council
PwC
PricewaterhouseCoopers Ltd
FSC
Financial Services Commission
SBM
State Bank of Mauritius Ltd
FYXX
Financial year 20XX
SEM
The Stock Exchange of Mauritius Ltd
Gamma
Gamma-Civic Ltd
SIC
The State Investment Corporation Ltd
Gamma group of companies
Gamma-Civic Ltd, its subsidiaries,
associates and joint venture
UK
United Kingdom
USD
United States Dollars
GRA
Gambling Regulatory Authority
VAT
Value added tax
IAS
International Accounting
Standards
VLT
Video lottery terminal
WLA
World Lottery Association
IFRS
International Financial Reporting
Standards
ISO
International Organisation for
Standardisation
66
Lottotech Ltd (“Company”), a company incorporated as a public company limited by shares in Mauritius with file number 079313
and currently regulated by the Companies Act 2001 and the Gambling Regulatory Authority Act 2007.
Offer for Sale of up to 85,000,000 ordinary shares of no par value.
APPLICATION FORM FOR THE OFFER FOR SALE
Applications may only be made by persons over 18 years old. However, a parent or guardian of a minor may apply for the benefit of
the minor.
Allotment letters will be sent to the email address specified on the application form (or the mailing address if an email is not provided).
The aforesaid email and/or mailing address shall supersede all previous addresses provided to the Company in respect of the Offer
for Sale. All further notices required to be sent by the Company to shareholders shall be sent to the email address specified on the
application form or the mailing address assigned to your CDS account.
To meet the requirements of the Financial Intelligence and Anti-Money Laundering Act 2002, the following documents should be
attached with this application form.
Individual applicant/Joint applicant
For each applicant:
• A certified copy of a National Identity Card or of a valid passport or of a birth certificate (for minors);
• A certified copy of a recent (dated within the last six months) utility bill (CEB, CWA, Mauritius Telecom); and
• A
certified copy of a recent (dated within the last three months) bank statement showing the applicant’s name and bank account
number (without any transaction details).
Corporate applicant:
• Official documents certifying the legal existence of the applicant;
• Documents certifying the identity of at least two directors (same as for an individual applicant see above); and
resolution of the Board of Directors or managing body or any other official documents granting the relevant authority to
• A
the signatories.
Applicants may call personally at any licensed investment dealer with the stipulated original documents and their officers will certify
the copies accordingly.
Alternatively, the required documents can be certified as true copies by any one of the following persons: a notary, a lawyer, an
actuary or an accountant holding a recognised professional qualification, a serving high ranked police or customs officer, a member
of the judiciary, a civil servant, an employee of an embassy or consulate of the country of issue of documentary evidence of identity,
or a director of a regulated financial services business in Mauritius and in Rodrigues.
Your application may be rejected if relevant instructions are not complied with and if the documents mentioned above are not
submitted together with your application form in respect of the Offer for Sale.
Ordinary shares will be allotted on or around the allotment date, provided that settlement is received in full by the Company.
APPLICATION FORM FOR OFFER FOR SALE
Please use BLOCK LETTERS to complete this form
SECTION 1A – INVESTOR DETAILS (INDIVIDUAL)
PRIMARY INVESTOR
JOINT INVESTOR
Title:
______________________________________
______________________________________
Surname:
______________________________________
______________________________________
First name(s):
______________________________________
______________________________________
Marital status:
______________________________________
______________________________________
Maiden name:
______________________________________
______________________________________
Date of birth:
______________________________________
______________________________________
Nic/birth cert/passport:
______________________________________
______________________________________
Passport issuing country:
______________________________________
______________________________________
Passport expiry date:
______________________________________
______________________________________
Nationality:
______________________________________
______________________________________
Permanent address:
______________________________________
______________________________________
______________________________________
______________________________________
Mailing address (if different): ______________________________________
______________________________________
______________________________________
______________________________________
Telephone (home):
______________________________________
______________________________________
Telephone (mobile):
______________________________________
______________________________________
Telephone (office):
______________________________________
______________________________________
Occupation:
______________________________________
______________________________________
Email:
______________________________________
______________________________________
Employer’s name:
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
Employer’s address:
Source of funds:
SECTION 1B – INVESTOR DETAILS (CORPORATE)
______________________________________
______________________________________
Business registration number:______________________________________
______________________________________
Company number:
______________________________________
______________________________________
Registered office:
______________________________________
______________________________________
Mailing address (if different): ______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
Corporate name:
Email:
Lottotech Ltd
Principal office: HSBC Centre, 18 CyberCity, Ebène, Mauritius
Tel: +230 403 7117 Fax: +230 403 7171
BRN: C08079313
[email protected]
www.lottotech.mu
SECTION 2 – INVESTMENT DETAILS
No. of ordinary shares applied for:
Investment amount:
Payment mode: Crossed cheque payable to Lottotech Ltd
Cheque number:
Receipt number:
CDS account number:
SECTION 3 – APPLICANT ACCOUNT DETAILS
This section should be completed with the details of a Mauritian bank account by ALL applicants.
Bank:
Account holder:
Account number:
For dividend payments please select from one of the following options:
Electronic transfer to the above bank account number
Cheque
Note that this same account shall be credited for refund of monies in case of oversubscription or cancellation of the Offer for Sale.
Subject to section 6.7, this account shall be used for newly opened CDS accounts.
SECTION 4 – METHOD OF PAYMENT
Crossed cheques drawn to the order of Lottotech Ltd for the
total consideration with the properly completed and signed
appropriate form(s) must reach the licensed investment dealers
not later than 4:00 pm on 16 May 2014. Receipts will be issued
thereon.
Should a cheque in payment of an application for ordinary
shares be dishonoured by the drawer’s bank, the application will
be considered as null / void and will not be considered.
No cash payments will be accepted nor should be sent by post.
No remittance should be sent by post except for non-residents,
both Mauritians and non-Mauritians, who should ensure that
their application form and full remittance reach any licensed
investment dealer, not later than 4:00 pm on 16 May 2014.
SECTION 5 – COMPLETION OF THE SHARE
TRANSFER FORM
Applicants for the Offer for Sale must complete the transferee
sections of the SHARE TRANSFER FORM on the next page in
order for their application to be valid.
Please note only the shaded sections should be completed by
the applicant. The remaining sections will be completed by the
Company Registrar.
SECTION 6 – DECLARATIONS
6.1 - I/We the undersigned agree to purchase the above
mentioned ordinary share(s) and I/we agree to accept the same
or lesser number of ordinary shares that may be allocated to
me/us upon the terms and conditions of the Listing Particulars
and/or the Simplified Prospectus and in accordance with the
Instructions and Conditions.
6.2 - I/We hereby acknowledge that I/we have received, read
and understand the Listing Particulars and/or the Simplified
Prospectus and agree to be bound by the provisions contained
therein and by the provisions of the Financial Intelligence and
Anti-Money Laundering Act 2002, as may be amended from time
to time. I/We acknowledge that we have taken independent
professional advice in relation to this Listing Particulars and/or
the Simplified Prospectus.
6.3 - I/We represent and warrant that I/we have the necessary
authority and power to purchase and hold the ordinary shares
in accordance with this application form and have taken all
necessary corporate action if applicable to approve such
purchase and to authorise the person(s) signing this application
form to bind me/us in accordance with the terms hereof.
6.4 - In accordance with anti-money laundering requirements
I/we hereby consent to the Company and/or the licensed
investment dealer making reasonable enquiries for the purpose
of verifying the information disclosed herein and obtaining
information about me/us. I/We certify that the monies being
invested are not proceeds from illegal activities and that my/our
investment is not designed to conceal such proceeds so as to
avoid prosecution for an offence.
6.5 - I/We undertake to promptly notify the Company and the
licensed investment dealer of any change in the information
and/or details submitted in this application.
6.6 - I/We further understand and agree that dividend payments
of the ordinary shares shall be credited as per prevailing
instructions in section 3 of this application form.
6.7 - I/We understand that if a CDS account number is not
specified in section 2 above or if the corresponding CDS
Statement is not attached to this application, by signing this
application form, I/we am/are expressly authorising the licensed
investment dealer to open a CDS Account as per sections 1 and
3 above. I/we undertake to provide any other documentation as
may be requested by the licensed investment dealer.
6.8 - I/We declare that all statements and declarations made in
this application and any related documents submitted are true,
correct and complete.
6.9 - I/We acknowledge and agree that all notices to be sent by
the Company to shareholders will be sent to the email address
provided in section 1 above. The email and mailing address
provided herein shall supersede all previous addresses provided
by me/us in respect of any ordinary shares issued on or before
the date hereof.
6.10 – I/We authorise the Company Registrar to complete the
non-shaded sections of the SHARE TRANSFER FORM on my/our
behalf following the completion of the allotment process.
Signature:
Name:
Capacity:
Date:
List of licensed investment dealers
Co-sponsoring licensed investment dealers:
Capital Market Brokers Ltd
MCB Stockbrokers Ltd
SBM Securities Ltd
Suite 1004, Ground Floor
9th Floor, MCB Centre
Level 6, State Bank Tower
Alexander House
Sir William Newton Street
1, Queen Elizabeth II Avenue
35, CyberCity, Ebène
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 467 9655
Tel: +230 202 5427
Tel: +230 202 1111
Anglo-Mauritius Stockbrokers Limited
Associated Brokers Ltd
AXYS Stockbroking Ltd
3rd Floor, Swan Group Centre
3rd Floor, Travel House
Bowen Square
10, Intendance Street
Sir William Newton Street
10, Dr. Ferrière Street
Port Louis
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 208 7010
Tel: +230 212 3038
Tel: +230 213 3475
Bramer Capital Brokers Ltd
Citygate Securities Ltd
IPRO Stockbroking Ltd
11th Floor, Bramer House
7A, 7th Floor, Ebène Mews
3rd Floor, Ebène Skies
66C2, CyberCity
57, CyberCity
Rue De L’Institut
Ebène
Ebène
Ebène
Mauritius
Mauritius
Mauritius
Tel: +230 403 4100
Tel: +230 467 0768
Tel: +230 403 6740
LCF Securities Ltd
Prime Securities Ltd
Ramet & Associés Ltée
Suite 108, 1st Floor, Moka Business Centre
Ground Floor, Unit 17, Air Mauritius Centre
1st Floor, St Louis House
Mont Ory Road
6, President John Kennedy Street
17, Mgr Gonin Street
Moka
Port Louis
Port Louis
Mauritius
Mauritius
Mauritius
Tel: +230 406 9626
Tel: +230 212 3500
Tel: +230 212 3535
Other licensed investment dealers:
For office use only:
Number of allotted shares:
Lottotech Ltd
Principal office: HSBC Centre, 18 CyberCity, Ebène, Mauritius
Tel: +230 403 7117 Fax: +230 403 7171
BRN: C08079313
[email protected]
www.lottotech.mu
SHARE TRANSFER FORM
Name of transferor
Address of transferor
Name of transferee
Address of transferee
Name of company in which the shares are held
LOTTOTECH LTD
Registration No. of the company
079313
Number of shares transferred
Serial number of shares
Consideration
We declare that the company does not reckon among its assets –
(i) freehold or leasehold immovable property, or
(ii) shares in any partnership which reckons among its assets freehold or leasehold immovable property or shares that the
partnership holds in any other partnership, successive partnership, company or successive company which reckons
among its assets such property; or
(iii) shares in any company which reckons among its assets freehold or leasehold immovable property, or shares that the
company holds in any other company, successive company, in any partnership or successive partnership which
reckons among its assets such property.
As witness our hands, this ………………………….…………….. day of …………….…………….…………….……………...
TRANSFEROR
TRANSFEREE
I/We, the undersigned declare transferring to the transferee
the aforesaid share(s) to hold for himself, his executors,
administrators, successors and assigns subject to several
conditions on which I held the same at the time of the
execution of this transfer.
I/We, the undersigned, agree to take the said share
or shares subject to the same conditions.
________________________
Signature(s) of transferor(s)
__________________________
Signature(s) of transferee(s)
Lottotech Ltd
HSBC Centre, 18 CyberCity, Ebène, Mauritius
Tel: +230 403 7117 Fax: +230 403 7171
[email protected]
www.lottotech.mu