COVER SHEET
P
R
E W
A
R
4
7
6
S.E.C. Registration Number
P
R
I
M
E
P
H
I
L
I
P
G
A
M
I
N
P
I
N
E
S
G
I
N
C
.
(Company's Full Name)
9
/
F
T
O
W
C
O
R.
R
E
U
R
H
E
F
I
N
O
P
A
C
I
F
6
7
8
4
A
Y
A
L
A
R E R R A
S
T
M A
Business Address: No. Street City/Town/Province
Atty. Malu Sia-Bernas
Contact Person
Day
C
A
V
E
K
A
T
I
811-0668/810-1814
Company/Telepone Number
S
Month
I
E
C
2
0
FORM TYPE
I
S
Month
Day
Secondary License Type, If Applicable
Dept. Requiring this Doc.
Amended Articles Number/Section
Total Amount of Borrowings
Total No. of Stockholders
Domestic
Foreign
---------------------------------------------------------------------------------------------------------------------------------------------------To be accomplished by SEC Personnel concerned
_________________________________
File Number
LCU
_________________________________
Document I.D.
STAMPS
Remarks - pls. use black ink for scanning purposes
Cashier
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 20-IS
Information Statement Pursuant to Section 20
of the Securities Regulation Code
1.
Check the appropriate box:
______
Preliminary Information Statement
_______
Definitive Information Statement
2.
Name of Registrant as specified in its charter - PRIME GAMING PHILIPPINES, INC.
3.
Province, country or other jurisdiction of incorporation or organization - Manila, Philippines
4.
SEC Identification Number – 476
5.
BIR Tax Identification Code - 001-289-374
6.
Address of principal office - 9/F Rufino Pacific Tower, 6784 Ayala Avenue corner
V.A. Rufino (formerly Herrera) Street, Makati City, Metro Manila 1229
7.
Registrant’s telephone number, including area code - (632) 811-0668
8.
Date, time and place of meeting of security holders The Annual Meeting of the Stockholders of Prime Gaming Philippines, Inc. (the Corporation)
shall be held on 10 October 2008, at 9:30 a.m. at the
Function Room of the Manila
Mandarin Oriental Hotel located at Makati Avenue corner Paseo de Roxas, Makati City.
9.
Approximate date on which the Information Statement is first to be sent or given to security
holders - 18 September 2008
10. In case of Proxy Solicitations:
Not applicable
Name of Person Filing the
Statement/Solicitor:_______________________________________________________
Address and Telephone No.: _______________________________________________
11. Securities registered pursuant to Code or Sections 4 and 8 of the RSA (Information on number
of shares and amount of debt is applicable only to corporate registrants):
Title of Each Class
Number of Shares of Common Stock Outstanding
or Amount of Debt Outstanding
COMMON
99,530,872
Amount of Debt Outstanding
(as of 30 April 2008)
P 162,301,239
-1–
12. Are any or all of registrant's securities listed on the Philippine Stock Exchange?
Yes _____ No _______
If yes, disclose the name of such Stock Exchange and the class of securities listed therein:
The shares are listed in the Philippine Stock Exchange and are classified either as common
or treasury shares.
GENERAL INFORMATION
Date, time and place of meeting of security holders
The Annual Meeting of the Stockholders of Prime Gaming Philippines, Inc. (the Corporation)
shall be held on 10 October 2008, at 9:30 a.m. at the Narra/Palm Function Room of the Manila
Mandarin Oriental Hotel located at the corner of Makati Avenue and Paseo de Roxas, Makati City.
The complete mailing address of the principal office of the registrant is 9/F Rufino Pacific
Tower, 6784 Ayala Avenue corner V. A. Rufino (formerly Herrera) Street, Makati City, Metro Manila.
The Information Statement will approximately be sent or given first to stockholders of record
on 18 September 2008 or fifteen (15) business days before the meeting date.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Dissenters' Right of Appraisal
Pursuant to Section 81 of the Corporation Code of the Philippines (the Corporation Code),
any stockholder of the Corporation shall have the right to dissent and demand payment of the fair
value of his shares in the following instances:
1.
2.
3.
In case any amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholders or class of shares, or of authorizing preferences
in any respect superior to those of outstanding shares of any class, or of extending or
shortening the term of corporate existence;
In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
substantially all of the corporate property and assets; and
In case of merger or consolidation.
The agenda for the Annual Meeting on 10 October 2008 does not include any of the
foregoing instances.
-2–
Interest of Certain Persons in or Opposition to Matters to be Acted Upon
No current director or officer of the Corporation, or nominee for election as directors of the
Corporation, or any associate thereof, has any substantial interest, direct or indirect, by security
holdings or otherwise, in any matter to be acted upon other than election to office.
No director has informed the Corporation in writing that he intends to oppose any action to
be taken by the registrant at the meeting.
CONTROL AND COMPENSATION INFORMATION
Voting Securities and Principal Holders Thereof
There are Ninety-Nine Million Five Hundred Thirty Thousand Eight Hundred Seventy-Two
(99,530,872) issued and outstanding common shares of stock of the Corporation entitled to vote at
the Annual Meeting, each of which is entitled to one (1) vote.
The cut-off date of presented information in this Statement is as of 25 August 2008.
The record date for closing the stock and transfer book of the Corporation in order to
determine the stockholders entitled to vote at the Annual Meeting is 15 September 2008.
For purposes of the election of directors, all stockholders of record are entitled to cumulative
voting rights as provided by the Corporation Code, and there are no conditions precedent to the
exercise thereof. Further, no discretionary authority to cumulate votes is being solicited. A
stockholder may vote such number of shares for as many persons as there are directors to be
elected or he may cumulate said shares and give one candidate as many votes as the number of
directors to be elected multiplied by the number of his shares, or he may distribute them on the
same principle among as many candidates as he shall see fit.
Security Ownership of Certain Record and Beneficial Owners
Holders
As of 25 August 2008, there are 137 stockholders of 99,530,872 common shares of stock of
PGPI. According to the Corporation’s Stock and Transfer Agent, Rizal Commercial Banking
Corporation (RCBC), out of the issued and outstanding capital, 39,906,844 shares or 40.094 % is
held by the PGPI. To date, its wholly owned subsidiary, PGMC, no longer owns any share of the
corporation.
According to the Corporation’s Stock and Transfer Agent, Rizal Commercial Banking
Corporation (RCBC), the top twenty (20) stockholders of PGPI, including their shares and their
percentage of total common shares outstanding held by each as of 25 August 2008 are as follows:
-3–
NAME
BERJAYA LOTTERY MANAGEMENT
PRIME GAMING PHILIPPINES, INC.
PCD NOMINEE CORP.
BERJAYA SPORTS TOTO (CAYMAN)
LIMITED
FERRYSTAR LIMITED
LIM MENG KWONG
BERJAYA LOTTERY MANAGEMENT
FAR EAST MOLASSES CORPORATION
CONCEPCION TEUS VDA.
CHIONG, DANIEL Y.
DOLORES TEUS DE M. VARA
STEINER, NORMA O.
CORPORACION FRANCISCANA
AWAD, A.
THE PHIL.-AMERICAN GEN.
PHIL. REMNANTS CO., INC.
ELIZALDE, FRANCISCO J.
ZERNICHOW, CHRISTIAN D.
ELIZALDE, JOAQUIN M.,
MA. DOLORES VARA DE
MA. TERESA VARA DE REY Y TEUS
NUMBER
OF SHARES HELD
PERCENTAGE OF
43,098,833
39,906,844
68,62,641
43.30197 %
40.09494%
6.894987%
5,436,107
4,060,193
35,626
26,131
19,436
8,125
7,820
6,900
3,754
3,674
3,356
2,830
2,802
2,585
2,177
2,110
1,854
1,854
5.46173%
4.07933%
0.035794%
0.026254%
0.019528%
0.008163%
0.007857%
0.006933%
0.003772%
0.003691%
0.003372%
0.002843%
0.002815%
0.002597%
0.002187%
0.00212%
0.001863%
0.001863%
TOTAL SHARES HELD
Treasury Shares
As of 30 April 2003, a total of 28,811,900 shares of stock of PGPI were held by PGMC
(21,919,900 shares) and by PGPI (6,892,000 shares). Subsequently, in 2004, 5,500,000 shares
were acquired by PGPI from the stock exchange at a cost of P110,735,953 or a total of 34,311,900
treasury shares as of April 30, 2006 amounting to P686,579,273.
On 11 July 2006, a total of 250,000 common shares were purchased by the Issuer in the
open market at P25.00 per share.
On 12 July 2006, a total of 510,000 common shares were purchased by the Issuer in the
open market at P25.00 per share.
On 11 December 2006, a total of 866,944 common shares were purchased by the Issuer in
the open market at P30.00 per share.
On 29 January 2007, the Issuer purchased 468,000 common shares of stocks recorded in
the name of Mr. Michalko in the open market at P30.00 per share.
-4–
On 25 April 2007, a total of 21,919,900 common shares recorded in the name of PGMC
were acquired by PGPI by means of an ordinary buyback from the open market at a total purchase
price of P493,197,750.00 using the corporation’s unrestricted retained earnings.
From 19 May 2008 to 2 June 2008, the Issuer purchased from the open market a total of
three million five hundred thousand (3,500,000) shares at Four Hundred Twenty Million Pesos
(Php420,000,000.00)
The records of RCBC Stock and Transfer Department, reflect that as of 30 June 2008, the
Issuer holds in its name a total of 39,906,844 treasury shares.
Dividends
On 28 October 2004 the company declared a P1.00 cash dividend to all stockholders on
record as of November 17, 2004 or a total of P87,138,872. Cash dividends, in this regard, totaled
P65,218,972 ,which is net of inter-company dividends amounting to P21,919,900 ,representing cash
dividends declared by Company on shares of stock held by PGMC.
On April 2007, PGMC declared dividends amounting to P400,000,000 payable to PGPI and
this was offset against PGPI’s advances to the Company.
On 20 November 2007, PGMC declared dividends amounting Five Hundred Thirty Million
Pesos (P530,000,000.00) to its stockholders of record as of 20 November 2007.
Recent Sales of Unregistered Securities
There are no sales of unregistered securities in the last four (4) fiscal years.
-5–
Security Ownership of Holders of more than 5%
Security ownership of holders of more than five percent (5%) of the Company’s securities as
of 25 August 2008 is as follows:
Name and Address
of Record Owner
Name of Beneficial
Owner / Relationship
with Record Owner
Citizenship
Number of
Shares
Held
Percentage
Held
Berjaya Lottery
Berjaya Lottery
Chinese
Management (H.K.) Ltd. Management (HK) Ltd.
Level 28, Three Pacific
(same as record owner)
Place, 1 Queen’s Road
* person entitled to vote
East, HongKong
is Messrs. Lim Meng Kwong,
Seow Swee Pin or Tan Eng
Hwa, in the said order of
preference.
43,098,833
43.30%
(common
shares)
Prime Gaming Phils Inc. Prime Gaming
Filipino
9th Floor Rufino Pacific
Phils Inc.
Tower 6784 Ayala corner (same as record
V.A. Rufino (Herrera) St. owner)
Makati City, M.M.
* person entitled
to vote is the President
of the Corporation,
Mr. Lim Meng Kwong
39,906,844
40.09%
(treasury
shares)
Berjaya Sports
Toto (Cayman) Limited
Close Borthers
(Cayman) Ltd, Harbour
Place, 4th Flr. 103
South Church St.,
George Town, Grand
Cayman, Cayman Islands
5,436,107
5.462%
(common
shares)
Berjaya Sports Toto Malaysian
Cayman) Limited
(same as record owner)
person entitled to vote is
Seow Swee Pin
There has been no change in the control of the Corporation since the beginning of its last
fiscal year. The value of the Corporation’s outstanding common listed shares increased as can be
derived from its posted prices at the Philippine Stock Exchange. The increase may be due to the
general or prevailing economic situation in the country.
-6–
Security Ownership of Management
Security ownership of the directors and officers of the Corporation as of 25 August 2008 are
as follows:
Title
of
Class
Name of
Beneficial Owner
Common
Common
Common
Common
Common
Common
Common
Common
Amount and Nature
of Beneficial
Ownership
Lim Meng Kwong
P
Seow Swee Pin
P
George T. Yang
P
Jimmy S. Soo
P
Alvin C. Go
P
Tan Eng Hwa
P
Jose A. Bernas
P
Marie Lourdes Bernas
120.00
120.00
120.00
120.00
120.00
120.00
120.00
00.00
Citizenship
Number of
Shares Percentage
Held
Held
Malaysian
Malaysian
Filipino
Filipino
Filipino
Malaysian
Filipino
Filipino
35,626
1
1
1
1
1
1
0
0.036%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
There are no voting trust holders of 5% or more of the Corporation’s securities. The figures
above are based on the current market price as of 25 August 2008.
There are no arrangements which may result in a change in control of the Corporation.
Directors and Executive Officers
The current directors and officers of the Corporation are listed below:
Directors / Officers
1. Lim Meng Kwong
2.
3.
4.
5.
6.
7.
8.
George T. Yang*
Seow Swee Pin
Jimmy S. Soo
Alvin C. Go*
Tan Eng Hwa
Jose A. Bernas
Marie Lourdes Bernas
Designation
Citizenship
Director / President
Chairman of the Board
Director
Director
Director
Director
Treasurer
Corporate Secretary
Asst Corp Secretary
Malaysian
Filipino
Malaysian
Filipino
Filipino
Malaysian
Filipino
Filipino
* As of 30 April 2008, Messrs. George T. Yang and Alvin C. Go were the independent
minority stockholders who are not employees nor officers of the Corporation, and whose
shareholdings are less than two percent (2%) of the Corporation’s equity pursuant to Section 38 of
the Securities Regulation Code.
Mr. George T. Yang is an independent stockholder of Philippine Gaming Management
Corporation. The former treasurer of the Corporation, Mr. Low Siaw Peng, nominated Mr. Yang as
independent director.
-7–
Mr. Jose A. Bernas, a stockholder and the Corporate Secretary nominated Mr. Alvin C. Go
as independent director during the Corporation’s Annual Stockholders’ Meeting on 18 October 2007.
Procedures of SRC Rule 38 have been followed in the nomination and qualification of
independent directors.
The term of a Director is for one (1) year and Directors are elected annually during the
annual stockholders meeting. This year’s nominees for election to the Board of Directors and
Corporate Secretary are the same Directors and Corporate Secretary currently holding office.
The nominees for election to the Board of Directors are as follows:
Name
Age
Positions/Offices/Directorships Held for the past five years
1.
Lim Meng Kwong
55
Director, Chairman of the Board and President
Prime Gaming Philippines, Inc.
Director and Chief Operating Officer
Philippine Gaming Management Corporation
Senior General Manager
Berjaya Group Bhd.
Member
Malaysian Institute Accountants
2.
George T. Yang
69
Director:
Prime Gaming Phils., Inc.
Chairman & President:
First Georgetown Ventures, Inc.
Fun Characters Inc.
Fun Characters International Pte. Ltd. (marketing
Licensee of Walt Disney Company for Asean
countries)
HAVI Foods Services (Philippines), Inc
Chairman of the Board:
Golden
Arches
Development
Corporation
(McDonald’s Philippines)
Ronald McDonald House Charities (Philippines)
Trojan Computer Forms, Inc.
Construction Strategies& Management Corporation
GEC Land Development Corporation
Vice Chairman:
Board Alliance Global Group Inc.
Megaworld Corporation
Director:
Empire East Land Holdings, Inc.
Philippine Gaming Management Corporation
Member of the Board of Governors:
The Tower Club
Consul ad honorem:
State of Eritrea
-8–
3. Seow Swee Pin
52
Director:
Prime Gaming Phils., Inc.
Director and Chairman of the Board:
Philippine Gaming Management Corporation
Executive Director:
Berjaya Sports Toto Malaysia Sdn Bhd (B-Toto)
Member:
Malaysian Assoc. of Certified Public Accountants
Malaysian Institute of Accountants
4. Jimmy S. Soo
50
Chairman:
Memworks, Inc.
Chairman and President:
Inova Holdings Corporation
Tasman Resources Corp.
Tortola Resources, Inc.
Trimante Holdings Phils., Inc.
Chairman/Director:
MUSIC Semiconductors Corporation
MUSIC Semiconductors Philippines, Inc.
Director:
First Abacus Financial Holdings Corp.
Salcedo Corporate Exchange, Inc.
Director and Corporate Secretary:
Abacus Capital & Investment Corp.
B.Grimm MBM Philippines, Inc.
Chancery Holdings Corporation
Feldeen Holdings Corporation
Metrojaya Realty Holdings & Development Corp.
Muirfield Holdings Corp.
St. Giles Hotel (Manila), Inc.
Tanimbar Holdings Corp.
Tribeca Holdings, Inc.
Vista Holdings Corporation
Van der Horst Technologies Phils., Inc.
Corporate Secretary:
Kanlaon Security Agency & Allied Services, Inc.
Limketkai Manufacturing Corporation
Limketkai Sons, Inc.
Beta Agricultural Products, Inc.
Paramount Life & General Holdings Corp.
Paramount Life & General Insurance Corp.
VDH Land, Inc.
Director/Corp. Sec./Treasurer:
Tagskie Corp.
Resident Agent:
IDP Education Pty Limited
Managing Partner:
Soo Gutierrez Leogardo & Lee Law Offices.
-9–
5. Alvin C. Go
47
Senior Vice President and Chief Legal Counsel,
Philippine National Bank (PNB) – 23 January 2004 to
present
Special Assistant to the President, Philippine National Bank
15 August 2003 to 22 January 2004
Senior Partner
Go and Castro Offices, March 1999 to 31 July 2003
Go Cojuangco Mendoza Ligon & Castro Law Offices
1 January 1994 to March 1999
State Prosecutor, Department of Justice 18 January 1990 to
31 January 1993
Prosecution Attorney, Department of Justice 5 October 1989
to 17 July 1990
Associate Attorney, Salonga Ordonez Yap Corpuz Padlan
and Associates Law Offices July 1985 to October
1989
6. Tan Eng Hwa
39
Treasurer:
Prime Gaming Phils., Inc.
Vice President for Operations and Treasurer:
Philippine Gaming Management Corporation
Director:
Philippine Gaming Management Corporation
Member:
Malaysian Institute of Accountants
7. Jose A. Bernas
48
Corporate Secretary:
Prime Gaming Phils., Inc.
Philippine Gaming Management Corporation
Swift Foods, Inc.
Dun and Bradstreet Philipines, Inc.
President:
Discovery Centre Condominium Corporation
Chairman:
Automation Specialists & Power Exponents Inc.
Director:
Micros-Fidelio Software Phils Inc.
Professor:
Ateneo de Manila University School of Law
La Salle –Far Eastern University Law School
Managing Partner:
Bernas Law Offices
8. Marie Lourdes Sia-Bernas
42
Assistant Corporate Secretary:
Prime Gaming Phils. Inc.
Philippine Gaming Management Corporation
FOSROC Phils, Inc.
Swift Foods, Inc.
Corporate Secretary and director:
Micros-Fidelio Software Phils, Inc.
Administrative Partner:
Bernas Law Offices
- 10 –
There are no family relationships between and among the directors and officers of the
Corporation, except for the Corporate Secretary and the Assistant Corporate Secretary who are
married to each other.
Meanwhile, the Issuer’s Director Mr. Jimmy S. Soo and PGMC Director and President, Mr.
Paulino S. Soo, are brothers.
There is no person who is not an executive officer who is expected by the Corporation to
make a significant contribution to the business. Neither is there an arrangement that may result in
the change in control of the Corporation.
Directors and Executive Officers as a Group
(1) Title of Class
common shares
(3) Amount and
Nature of Record/
Beneficial Ownership
(2) Name of Record/
Beneficial Owner
Directors and
Executive Officers
As a Group
Total :
7
--------------------------7
===============
(4) Percentage
Held
0.036 %
-----------------0.036 %
===========
Certain Relationships and Related Transactions
There has been no material transactions during the past two years, nor is any material
transaction presently proposed, to which any director, executive officer of the Corporation or security
holder of more than five percent (5%) of the Corporation’s voting securities, any relative or spouse of
any director or executive officer or owner of more than five percent (5%) of the Corporation’s voting
securities had or is to have direct or indirect material interest.
The Corporation does not have a parent company to which a percentage of its voting
securities is owned or controlled by a parent company.
No voting trusts or change in control arrangements are recorded in the books of the
Corporation.
Compensation of Directors and Executive Officers
The members of the Board of Directors of the Corporation are entitled to reasonable per
diem for actual attendance of any regular or special meeting of the Board of Directors. The directors
were paid a per diem of Fifty Thousand Pesos (P 50,000.00) each in fiscal year ended 30 April
2008.
There is no need to disclose a summary compensation table because the Issuer does not
have employees and does not pay out salaries. There are no standard agreements for the
compensation of directors and the top four executive officers as there are no salaries paid. The
officers are either directors who receive only their reasonable per diems issued to all directors or are
engaged by the corporation on a professional basis like the law firm of the corporate secretary and
assistant corporate secretary who are not employees of the Corporation.
- 11 –
There are no warrants or options on re-pricing or employment contracts or termination of
employment contracts entered into by the Corporation. , Neither is there a change in the control
arrangement between the Corporation and the executive officers.
Actions of the Board for approval are approved without delay. For the past years, the
matters which needed approval were the declaration of cash dividends to all stockholders of record
as of 9 November 2004 and April 2005, the amendment of corporate name to “Games and
Technologies Inc.” which was subsequently cancelled, and the reduction in par value from P10.00 to
P1.00, which were approved with dispatch by the Board.
There is no pending litigation in which the Corporation is involved either directly or indirectly
in the past five years. Neither has the corporation filed a petition for bankruptcy, been subject to any
order, judgment or decree or convicted by final judgment.
Material Pending Legal Proceedings
There is no material pending legal proceeding to which the Issuer is a party to up to the time
of the preparation of this report that undersigned is aware of.
THERE ARE NO MATERIAL PENDING LEGAL PROCEEDINGS TO WHICH
UNDERSIGNED ARE AWARE OF.
PGPI IS A PARTY THAT THE
While its wholly owned subsidiary is involved in a labor case and has filed a criminal case
against one of its employees, said subsidiary is not involved in litigation that will have a material
effect on its operations or its financial condition.
Independent Public Accountants
The election, approval or ratification of the registrant’s public accountant shall also be
discussed during the Annual Meeting. Punongbayan & Araullo, which is the principal accountant for
the fiscal year ending 30 April 2008, has been selected and shall be recommended to stockholders
for election, approval or ratification for the current year.
Representatives of Punongbayan & Araullo are expected to be present at the Annual
Meeting. They will have the opportunity to make a statement if they desire to do so and they are
expected to be available to respond to appropriate questions.
As a matter of procedure, Punongbayan & Araullo submits the corporation’s Audited
Financial Statements to the Audit Committee, which in turn submits the same Audited Financial
Statements to the Board of Directors for approval.
There are no changes in or disagreements with accountants on accounting and financial
disclosure.
The partner at Punongbayan & Araullo assigned to the Issuer is changed or rotated in
compliance with SRC Rule 68 (3) (b) (iv).
- 12 –
Compensation Plans
There are no compensation plans.
OTHER MATTERS
Except for the Chairman’s Report which will discuss the financial performance and overall
performance of the Corporation during the year ended 30 April 2008, no other report will be rendered
by any director, officer or committee. The Chairman’s Report is not subject to approval or
disapproval.
Except for the amendment of the Corporation’s Articles of Incorporation in order to reflect the
(i) retirement of the treasury shares which will have the effect of decreasing the outstanding number
of shares; (ii) the increase in capital stock by way of stock dividends, and the (iii) declaration of stock
dividends, no authorizations or issuances of securities otherwise than for exchange, or modification
or exchanges of securities, or mergers, consolidations, acquisitions and similar matters, or
acquisitions or dispositions of property, or restatement of accounts, or action with respect to reports,
or amendment of Charter, By- Laws or other documents, or other proposed actions, will be
discussed or submitted at the Annual Meeting.
New directors were elected and the external auditors were appointed during the Issuer’s
Annual Stockholders’ Meeting on 18 October 2007.
The following board actions will be discussed in this year’s Annual Meeting:
a.
The retirement of the Corporation’s treasury shares which will result in the decrease
in the Corporation’s issued and outstanding shares as approved in a meeting of the
Board on 27 June 2008;
In a special meeting of the Board held on 27 June 2008, the Board resolved
to retire its treasury shares amounting to thirty nine million nine hundred six thousand
eight hundred forty four (39,906,844).
The Issuer’s shares are currently broken down as follows:
Capital stock
Issued Shares
Outstanding Shares
Listed Shares
Treasury Shares
100,000,000
99,530,872
59,624,028
99,530,872
39,906,844
Upon the retirement of the treasury shares subject to stockholder approval on
10 October 2008 and approval by the Securities and Exchange Commission, the
issued and outstanding shares of the corporation will be fifty nine million six hundred
twenty four thousand and twenty eight (59,624,028) and the capital stock will be sixty
million ninety three thousand one hundred fifty six (60,093,156) common shares.
- 13 –
Prime Gaming Philippines, Inc.
9/F, Rufino Pacific Tower, 6784 Ayala Ave., cor. V.A. Rufino (Herrera) St.,
Makati City, Metro Manila
MANAGEMENT
REPORT
Dear Stockholders,
Business
Prime Gaming Philippines, Inc. (the Corporation) was incorporated on 31
October 1924 as Central Azucarera de Pilar mainly for the purpose of production of
sugar.
It subsequently changed its name to Prime Gaming Philippines, Inc. (PGPI) and
completed the acquisition of its subsidiary corporation, Philippine Gaming Management
Corporation (“PGMC”) in 1998.
Since the acquisition of PGMC in 1998, the Corporation has not made any more
acquisitions and has remained as an investment holding company. The Corporation has,
in October 2001 and October 2002, purchased 1,892,000 and 5,000,0000 of its own
shares from the stock market at a total cost of Php33,432,378 and Php100,786,342
respectively. An additional 5,500,000 of its own shares was purchased from the stock
market in December 2003 for Php110,877,353. In 2007 ,the Corporation bought back
24,014,844 shares of stock from the stock market for Php554.380,773. In 2008, the
Corporation bought back 3,500,000 of its own shares from the stock market for
P420,000,000. These purchases are presented as treasury shares. As of 30 June
2008, the records of the stock and transfer agent reflect that the Corporation has
39,906,844 treasury shares.
In August 2002, the Corporation acquired 1,562,500 shares of Roadhouse Grill,
Inc. (RHG), a foreign corporation, for Php26,012,000. The Corporation disposed of the
investment in June 2007.
The Corporation acquired a 35% interest (17,500 shares) in PMC Marketing
Corporation (PMC) on 22 July 2004 at a cost of Php2,187,500 and disposed of its
shareholdings in PMC in December 2006.
There is no change during the year in PGMC’s principal activity as a domestic
corporation involved principally in the business of leasing on-line lottery equipment and
providing software support. Revenue from the lease of on-line lottery equipment, and
maintenance and repair services are recognized based on certain percentage of gross
receipts from lottery ticket sales.
Page 1 of 10
Document3
The subsidiary has arms length’s business transactions with a related company,
International Lottery & Totalizator System, Inc. (ILTS), a US corporation.
The
transactions comprise the purchase of lottery terminals, and spare parts for the repair
and maintenance of the terminals and software support.
As of 30 April 2008, the Corporation does not have employees. Its subsidiary,
PGMC has one hundred (102) employees and does not anticipate a substantial increase
in the number of its employees within the ensuing twelve (12) months. The number of
employees in PGMC’s operations, security and administrative are sixty nine (69), ten
(10) and twenty three (23) respectively. There are no supplemental benefits or incentive
arrangements the subsidiary has or will have with its employees.
On 18 December 2006, the Philippine Lottery Employees’ Association-Workers’
Solidarity Network (“PLEA-WSN” or the “Union”) and PGMC entered into a Collective
Bargaining Agreement (CBA) whereby PGMC agreed to grant wage increases for the
first three (3) years of the CBA to all employees except those employees whose basic
salary after the implementation of wage increase exceeds the maximum salary for the
employee’s job level.
On 3 January 2007, the Board of Directors of Philippine Gaming Management
Corporation (PGMC) ratified the Collective Bargaining Agreement (CBA), executed by
and between PGMC and the Union on 18 December 2006.
Financial Statements
The Audited Financial Statements of the Corporation as of 30 April 2008 is
attached.
Disagreements with Accountants on Accounting and Financial Disclosures
There are no disagreements with the accountants on accounting and financial
disclosures.
Management’s Discussion and Analysis of Financial Conditions and Results of
Operations
The Corporation’s principal activity is investment holding. Since 1998, it owns
100% equity ownership of Philippine Gaming Management Corporation (PGMC) whose
principal activity is leasing on-line lottery equipment and providing software support.
Since the end of the last fiscal year ended 30 April 2008, the Corporation
continues to be an investment-holding company with underlying interests in its
subsidiary. There was no change in the operations of PGMC or the Corporation during
the year under review.
Page 2 of 10
Document3
The top five key performance indicators (KPIs) of the Corporation and its sole
subsidiary are: (1) to ensure the prompt collection of receivables from the customers ,
(2) review the annual budget to monitor and explain any material variances above 10%
in the overall operating results, (3) scrutinize and monitor all the controllable budgeted
expenses and analyze any material variances above 10%, (4) review all capital
expenditures in compliance with the approved budget, and (5) to manage the timely
placements of surplus funds to ensure the highest possible bank interest income in view
of the appropriate tolerable risks.
The Corporation uses the following computations in obtaining key indicators:
Key Performance Indicator
Formula
Current Ratio
Current Assets
Current Liabilities
Debt to Equity Ratio
Total Long Term Liabilities
Stockholders’ Equity
PPE Turnover
Net Revenues
Property, Plant & Equipment (Net)
Return on Average Equity
Net Income
Average Equity
Return on Average Assets
Net Income
Average Total Assets
At the Company level, the Corporation’s revenue increased to Php 548,456,641
in fiscal year 2008 from Php426,872,191 in fiscal year 2007. This is attributable to
dividend income from PGMC in fiscal year 2008.
The Corporation’s net income increased to Php523,452,458 in fiscal year 2008
from Php416,059,762 in fiscal year 2007. This is mainly due to dividend income from
PGMC in fiscal year 2008.
In fiscal year 2008, at the subsidiary level, the revenues of PGMC increased by
21.8%. This is due to the increase in percentage based on gross receipts from lottery
ticket sales.
At the Consolidated level, the Corporation has, for fiscal year 2008, recorded a
higher consolidated net income of Php447,932,458 representing an increase of 32.3%
over fiscal year 2007’s net income of Php338,564,932.
In fiscal year 2008, interest income increased to Php13,747,777 from
Php4,167,086 in 2007. This is due to deposit placed in banks.
Page 3 of 10
Document3
The higher operating expenses of Php607,203,781 in fiscal year 2008 from
Php506,777,495 in fiscal year 2007, resulted mainly from an increase in professional
fees, telecommunication, amortization, salary and wages, loss on sale of available-forsale financial assets, and other operating expenses .
Financial Position
On a consolidated base, Total Assets as of 30 April 2008
Php1,853,409,552 and Total Assets as of 30 April 2007 were Php1,391,519,518.
were
Current assets increased to Php961,522,991 in 2008 from Php450,481,781 in
2007 . This increase in fiscal year 2008 is primarily attributed to the increase in cash and
cash equivalents.
In fiscal year 2008, trade and other receivables increased to Php222,519,093
compared to Php197,221,195 in fiscal year 2007. The collections of income by the
subsidiary are still prompt.
Prepaid expenses and other current assets decreased to Php57,135,741 in fiscal
year 2008 mainly due to input value added taxes.
Goodwill remained at Php360,110,253 for fiscal year 2008 and 2007. This is
attributable to the Revised Philippines Financial Reporting Standards where, goodwill is
no longer amortized. Instead, Goodwill is tested for impairment annually or more
frequently if events or changes in circumstances indicate that it might already be
impaired.
Property and equipment decreased to Php518,998,444 from Php547,396,845,
due to depreciation of computer and lottery equipment and other fixed assets.
Meanwhile, other Assets decreased to Php1,306,455 from Php2,296,577 due to
reduction in rental deposits.
Total Consolidated Liabilities increased to Php162,301,239 in fiscal year 2008
from Php147,301,355 in fiscal year 2007. The higher income tax provision of
Php60,135,470 in fiscal year 2008 is due to the higher income tax payable by the
subsidiary arising from the subsidiary’s improved income before income tax.
Arising from the above, the current ratio of the Corporation increased to 6.46:1
from 3.30:1 in fiscal year 2007. The Corporation and its subsidiary are still in good
liquidity position. There is no long-term debt except for the provision of Php13,422,818
for retirement benefits as mandated under Republic Act 7641 (Retirement Law). Total
stockholders’ equity rose to Php1,691,108,313 from Php1,244,218,163 in fiscal year
2007. This is mainly due to an increase in retained earnings. The book value per share
increased to Php7.096 in fiscal year 2008 from Php3.929 in fiscal year 2007.
Page 4 of 10
Document3
Barring any unforeseen circumstances, the Corporation’s Board of Directors is
confident that the operating financial performances of the Corporation and its subsidiary
are expected to be satisfactory in the coming year.
i)
There is no known trend, event or uncertainty that has or is reasonably
likely to have an impact on the Corporation’ short term or long-term
liquidity.
ii)
The liquidity of the subsidiary would continue to be generated from the
collections of revenues from customers. There is no requirement for
external funding for liquidity.
iii)
There is no known trend, event or uncertainty that has or that is
reasonably expected to have a material impact on the net sales or
revenues or income from continuing operations.
iv)
There is no significant element of income or loss that would arise from the
Group’s continuing operations.
v)
There is no cause for any material change from period to period in one or
more of the line items of the Corporation’s financial statements.
vi)
There were no seasonal aspects that had a material impact effect on the
financial conditions or results of operations.
vii)
There is no event that will trigger direct or contingent financial obligation
that is material to the company, including any default or acceleration of an
obligation; and
viii)
There is no material off-balance sheet transactions, arrangements,
obligations (including contingent liabilities), and other relationships of the
company with unconsolidated entities or persons created during the
reporting period.
Page 5 of 10
Document3
Information on Independent Accountant
Audit and Audit-Related Fees
For professional services rendered on the audit of the financial statements of the
Corporation and its subsidiary, Punongbayan & Araullo was paid the amounts of
P110,000.00 for its audit on the corporation, and P300,000.00 for its audit on PGMC, the
wholly owned subsidiary of the corporation for the fiscal year ended 30 April 2008.
Punongbayan & Araullo prepared the corporation and its subsidiary’s financial
position, and the results of its operations and its cash flows for the years in accordance
with generally accepted accounting principles in the Philippines.
As part of the audit process, Punongbayan & Araullo made specific inquiries from
the management of the corporation and its subsidiary and requested management’s
written confirmation concerning representations contained in the financial statements
and the effectiveness of the internal control structure. The responses to the inquiries,
the written representations, and the results of their audit tests comprised the evidential
matter relied upon in forming an opinion on the financial statements.
The income tax return (ITR), other tax returns and the general form for financial
statements (GFFS) and the information contained therein were the responsibilities of the
corporation. Punongbayan & Araullo ascertained that the income and expenses agree
with the corporation’s and its subsidiary’s books of accounts.
Other Fees
For fiscal year ended 30 April 2008, the corporation paid Punongbayan & Araullo
P 110,000.00 while its subsidiary paid P 300,000.00. For fiscal year ended 30 April
2008, the corporation paid Punongbayan & Araullo P270,000.00 while its subsidiary paid
P100,000.00.
Out of pocket expenses which usually consist of meals and transportation
allowances during overtime works, traveling, mailing, costs of report reproduction,
machine reproduction, telephone and fax charges comprise “Other Fees”.
Discussion on Compliance with leading practice on Corporate Governance
The Corporation’s evaluation system is headed by its chief financial officer Mr.
Tan Eng Hwa assisted by the Assistant Corporate Secretary Ms. Marie Lourdes SiaBernas in determining the level of compliance of the Board of Directors with its Manual
of Corporate Governance.
There is no deviation from the corporation’s Manual of Corporate Governance.
Page 6 of 10
Document3
Directors and Executive Officers of the Registrant
Directors and Executive Officers – The Directors of the Corporation are elected
at the regular annual meeting of stockholders to serve for one (1) year until their
successors are elected and qualified. The Officers of the Corporation are elected by a
majority vote of the Board of Directors and are enumerated below, with a description of
their business experience over the past five years.
Directors / Officers
Designation
1. Lim Meng Kwong
2. George T. Yang
3. Seow Swee Pin
4. Jimmy S. Soo
Director / President
Malaysian
Chairman of the Board
Director
Filipino
Director
Malaysian
Director
Filipino
5. Alvin C. Go
Director
6. Tan Eng Hwa
Treasurer
7. Jose A. Bernas
Corporate Secretary
8. Marie Lourdes Bernas Asst Corp Secretary
Citizenship
Filipino
Malaysian
Filipino
Filipino
Term
16 January
2008 - Present
1996 – Present
1996 – Present
October 2007
– Present
October 2007
– Present
2005 – Present
1996 - Present
October 2001 –
Present
Lim Meng Kwong, 55, was appointed to the Board of the Corporation on 16
January 2008, as Chairman and President He is also the Director of Philippine Gaming
Management Corporation (PGMC) and Senior General Manager of Berjaya Group Bhd.
He is a member of the Malaysian Institute Accountants.
Seow Swee Pin, 52, was appointed by the Board of the Corporation on 12
November 1996 and has retained office since then. He was re-elected as director on 18
October 2007 and is also director and chairman of Philippine Gaming Management
Corporation. Besides being a Director of the Corporation, he is also Executive Director of
Sports Toto Malaysia Sdn Bhd. He is a member of the Malaysian Institute of Certified
Public Accountants and the Malaysian Institute of Accountants.
George T. Yang, 69, was appointed to the Board of the Corporation on 12
November 1996 and has retained office since then. He was re-elected director on 18
October 2007 and is also a Director of PGMC. He is the President and Chairman of the
Board of First Georgetown Ventures, Inc., Fun Characters Inc., Fun Characters
International Pte. Ltd. (marketing Licensee of Walt Disney Company for Asean
countries) and HAVI Foods Services (Philippines), Inc. He also serves as Chairman of
the Board of Golden Arches Development Corporation (McDonald’s Philippines), Ronald
McDonald House Charities (Philippines), Trojan Computer Forms, Inc., Construction
Strategies& Management Corporation and GEC Land Development Corporation. He is
Vice Chairman of the Board Alliance Global Group Inc., and Megaworld Corporation. He
is also a Member of the Board of Empire East Land Holdings Inc., a Member of the
Board of Governors of The Tower Club, Inc. and Consul ad honorem for the State of
Eritrea. Mr. Yang graduated Cum Laude from De La Salle College, Manila, with the
degree of Bachelor of Science in Business Administration and holds a Masters Degree
in Business Administration from the Wharton School, University of Pennsylvania, USA.
Page 7 of 10
Document3
Jimmy S. Soo, 50, was appointed to the Board of the Corporation on October,
2007 and has retained office since then. He is Chairman of the Board of Music
Semiconductors Corporation and a Director of First Abacus Financial Holdings
Corporation, both listed at the PSE. He is an Officer and/or Director and/or Corporate
Secretary of various companies. He is the Managing Partner of Soo Gutierrez Leogardo
& Lee Law Offices.
Alvin C. Go, 47, was appointed to the Board of the Corporation on October 2007
and has retained office since then. He is presently the First Senior Vice President and
Chief Legal Counsel, of the Philippine National Bank (PNB). He was Special Assistant to
the President, Philippine National Bank from 15 August 2003 to 22 January 2004. He
was a Senior Partner of Go and Castro Offices, March 1999 to 31 July 2003; Go
Cojuangco Mendoza Ligon & Castro Law Offices 1 January 1994 to March 1999. He
was a State Prosecutor, Department of Justice from 18 January 1990 to 31 January
1993; Prosecution Attorney, Department of Justice from 5 October 1989 to 17 July 1990.
Tan Eng Hwa, 39, was appointed by the Board as Treasurer of the Corporation
on 30 June 2005 and has retained office since then. He is a member of the Board and
the Vice-President for Operations and Treasurer of Philippine Gaming Management
Corporation (PGMC). He is a member of the Malaysian Institute of Accountants.
Jose A. Bernas, 48, was appointed Corporate Secretary on 28 March 1996, and
has been such officer since then. He was re-appointed as Corporate Secretary on 18
October 2007. He teaches Private International Law and Government Contracts at the
Ateneo de Manila University School of Law, and the La Salle –Far Eastern University
Law School. He is presently the Chairman of the Board of Automation Specialists and
Power Exponents, Inc.. He is the President of Discovery Centre Condominium
Corporation and a director of Micros Fidelio Software Phils. Inc. He is the Corporate
Secretary of FOSROC Phils. Inc., Dun and Bradstreet Philippines Inc. and Swift Foods,
Inc. He is the Managing Partner of the Bernas Law Offices.
Marie Lourdes Sia-Bernas, 42, was appointed Assistant Corporate Secretary on
25 October 2001 and has retained office since then. She is the Corporate Secretary of
Automation Specialists and Power Exponents, Inc., Micros-Fidelio Software Phils. Inc.
and the Assistant Corporate Secretary of Swift Foods, Inc., and FOSROC Phils. Inc.,
She is a partner at Bernas Law Offices.
Page 8 of 10
Document3
Market Price of and Dividends on the Company’s Shares of Stock
The shares of stock of PGPI are traded on the Philippine Stock Exchange (PSE).
The high and low sales prices for each quarter within the last two fiscal years are as
follows:
Date
High
Low
Close
16 Sept 2004
25 Nov. 2004
12 May 2005
14 July 2005
14 Dec 2005
16 Jan 2006
10 April 2006
7 July 2006
6 Oct 2006
29 Dec 2006
7 Feb 2007
28 Feb 2007
15 Mar 2007
18 Apr 2007
24 Apr 2007
30 Apr 2007
26 June 2007
19 Sept 2007
19 Nov 2007
19 Feb 2008
21 Feb 2008
19 May 2008
20 May 2008
21 May 2008
2 June 2008
P 44.00
P 44.00
P 44.00
P 44.00
P 44.00
P 34.00
P 44.00
P 35.00
P 40.00
P 50.00
P 40.00
P 40.00
P 50.00
P 35.00
P 31.00
P 50.00
P 110.00
P 130.00
P 95.00
P 110.00
P 120.00
P 125.00
P 120.00
P 120.00
P 120.00
P 44.00
P 44.00
P 44.00
P 28.00
P 44.00
P 34.00
P 44.00
P 35.00
P 40.00
P 40.00
P 30.00
P 40.00
P 50.00
P 35.00
P 22.00
P 49.50
P 100.00
P 130.00
P 79.00
P 110.00
P 114.00
P 120.00
P 120.00
P 120.00
P 120.00
P 44.00
P 44.00
P 44.00
P 44.00
P 44.00
P 34.00
P 44.00
P 35.00
P 40.00
P 50.00
P 40.00
P 40.00
P 50.00
P 35.00
P 22.50
P 50.00
P 110.00
P 130.00
P 95.00
P110.00
P120.00
P125.00
P120.00
P120.00
P120.00
The price as of the last trading date for this report is One Hundred Twenty Pesos
(P120.00) on 2 June 2008. The shares of PGPI were not traded in the months of July to
August 2008.
There are no restrictions or limitations on PGPI’s ability to pay dividends on
common equity. There are no such likely restrictions or limitations foreseen in the future.
Page 9 of 10
Document3
Upon the written request of any stockholder, the Company shall provide
without charge to the requesting stockholder, a copy of the Company’s annual
report on SEC Form 17-A.
ALL REQUESTS MUST BE ADDRESSED TO:
JOSE A. BERNAS
The Corporate Secretary
Prime Gaming Philippines, Inc.
c/o Bernas Law Offices
8/F Raha Sulayman Building
108 Benavidez Street, Legaspi Village, Makati City
Metro Manila
For and on behalf of the Board:
LIM MENG KWONG
Chairman
* signed Report will be appended to the Definitive Information Statement on
18 September 2008
Page 10 of 10
Document3