CONTENTS 02 Corporate Information 03 Operational Highlights 04 Condensed Consolidated Statement of Profit or Loss 05 Other Comprehensive Income 06 Condensed Consolidated Statement of Financial Position 08 Condensed Consolidated Statement of Changes in Equity 09 Condensed Consolidated Statement of Cash Flows 10 Notes to the Condensed Consolidated Financial Statements 42 Independent Review Report 44 Management Discussion and Analysis 53 Disclosure of Interests 56 Disclosure under Rules 13.20 and 13.22 of the Listing Rules 57 Purchase, Sale or Redemption of the Company’s Listed Securities 57 Corporate Governance 57 Codes for Securities Transactions by Directors 58 Information in Respect of Directors 58 Audit Committee 58 Review of Interim Results CORPORATE INFORMATION Directors Executive Directors Mr. Yeung Hoi Sing, Sonny (Chairman) Dr. Ma Ho Man, Hoffman (Deputy Chairman) Non-executive Director Mr. Choi Kin Pui, Russelle Independent Non-executive Directors Mr. Luk Ka Yee, Patrick Ms. Yeung Mo Sheung, Ann Mr. Chin Wing Lok, Ambrose Company Secretary Ms. Chiu Nam Ying, Agnes Financial Controller Mr. Wong Chi Keung, Alvin Authorised Representatives Dr. Ma Ho Man, Hoffman Ms. Chiu Nam Ying, Agnes Audit Committee Mr. Chin Wing Lok, Ambrose (Chairman) Mr. Choi Kin Pui, Russelle Mr. Luk Ka Yee, Patrick Ms. Yeung Mo Sheung, Ann Remuneration Committee Mr. Luk Ka Yee, Patrick (Chairman) Mr. Yeung Hoi Sing, Sonny Mr. Choi Kin Pui, Russelle Ms. Yeung Mo Sheung, Ann Mr. Chin Wing Lok, Ambrose Nomination Committee Mr. Yeung Hoi Sing, Sonny (Chairman) Mr. Choi Kin Pui, Russelle Mr. Luk Ka Yee, Patrick Ms. Yeung Mo Sheung, Ann Mr. Chin Wing Lok, Ambrose Executive Committee Mr. Yeung Hoi Sing, Sonny (Chairman) Dr. Ma Ho Man, Hoffman Auditors HLB Hodgson Impey Cheng Limited Certified Public Accountants Legal Advisers on Hong Kong Laws Iu, Lai & Li Legal Advisers on Bermuda Laws Conyers Dill & Pearman Principal Bankers Chong Hing Bank Limited Fubon Bank (Hong Kong) Limited Royal Bank of Canada The Bank of East Asia, Limited The Hongkong and Shanghai Banking Corporation Limited Principal Share Registrar and Transfer Agent in Bermuda MUFG Fund Services (Bermuda) Limited The Belvedere Building 69 Pitts Bay Road Pembroke HM08 Bermuda Branch Share Registrar and Transfer Office in Hong Kong Tricor Tengis Limited Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong Registered Office Clarendon House 2 Church Street Hamilton HM 11 Bermuda Head Office and Principal Place of Business Suite 1601-2 & 8-10, 16/F. Great Eagle Centre 23 Harbour Road Wanchai Hong Kong Share Listing The Stock Exchange of Hong Kong Limited Stock Code: 00487 Website www.successug.com SUCCESS UNIVERSE GROUP LIMITED OPERATIONAL HIGHLIGHTS ‧ Turnover achieved approximately HK$730.6 million for the first half of 2014 ‧ Gross profit increased by approximately 60% to approximately HK$62.5 million ‧ Profit attributable to owners of the Company realised approximately HK$47.7 million ‧ Earnings per share was 0.97 HK cents ‧ Driven by the FIFA World Cup 2014, lottery business grew by approximately 190% to approximately HK$67.6 million; expanded into the telephone agency sales services of welfare lottery in Shanghai and Tianjin ‧ Adjusted EBITDA* of Ponte 16 increased by approximately 51% to approximately HK$260.0 million; attributable to the steady growth in the number of visitors to Macau as well as the increase in gaming revenue from the mass market * Adjusted EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation (and excluded interest income from the pledged bank deposit) (Loss)/profit from operations 59,883 Finance costs 6(a) (6,429) Share of results of joint ventures 173 Share of results of associates 12,088 Profit before taxation 6 65,715 Taxation 7 2,363 Profit for the period 68,078 Attributable to: Owners of the Company 70,896 Non-controlling interests (2,818) Profit for the period 68,078 Earnings per share – Basic 9 1.69 HK cents – Diluted 9 1.69 HK cents The accompanying notes form an integral part of these condensed consolidated financial statements. SUCCESS UNIVERSE GROUP LIMITED 04 Total other comprehensive loss for the period, net of tax (366) (2,295) Total comprehensive income for the period 47,654 65,783 Attributable to: Owners of the Company 47,582 68,811 Non-controlling interests 72 (3,028) Total comprehensive income for the period 47,654 65,783 The accompanying notes form an integral part of these condensed consolidated financial statements. 05 SUCCESS UNIVERSE GROUP LIMITED 06 129,683 Net assets 1,009,549 Capital and reserves Share capital 23 49,265 Reserves 935,459 Total equity attributable to owners of the Company 984,724 Non-controlling interests 24,825 Total equity 1,009,549 The accompanying notes form an integral part of these condensed consolidated financial statements. INTERIM REPORT 2014 07 Total comprehensive income/(loss) The accompanying notes form an integral part of these condensed consolidated financial statements. SUCCESS UNIVERSE GROUP LIMITED 08 Cash and cash equivalents at the end of the period 16 148,526 The accompanying notes form an integral part of these condensed consolidated financial statements. 09 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 30 June 2014 1. Organisation and Principal Activity The Company was incorporated as an exempted company with limited liability in Bermuda on 27 May 2004 under the Companies Act 1981 of Bermuda and its issued shares are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The principal activity of the Company is investment holding. 2. Basis of Preparation The condensed consolidated financial statements for the six months ended 30 June 2014 have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange and with Hong Kong Accounting Standard (“HKAS”) 34, “Interim Financial Reporting” (“HKAS 34”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The condensed consolidated financial statements do not include all the information and disclosures required for annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2013 as contained in the Company’s Annual Report 2013 (the “Annual Report 2013”). The preparation of the condensed consolidated financial statements in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates. In preparing these condensed consolidated financial statements, the significant judgements, estimates and assumptions made by management were the same as those that applied to the consolidated financial statements for the year ended 31 December 2013. The condensed consolidated financial statements are denominated in Hong Kong dollar (“HK$”). Unless otherwise specifically stated, all amounts are presented in thousand. 3. Summary of Significant Accounting Policies The accounting policies used in the preparation of the condensed consolidated financial statements are consistent with those used in the Annual Report 2013, except for the impact of the adoption of the new and revised HKASs, Hong Kong Financial Reporting Standards (“HKFRSs”), amendments and interpretations described below. In the current interim period, the Group has applied, for the first time, a number of new and revised standards, amendments and interpretations (“New HKFRSs”) issued by the HKICPA, which are effective for the Group’s accounting period beginning on 1 January 2014. The New HKFRSs adopted by the Group in the condensed consolidated financial statements are set out as follows: HKFRS 10, HKFRS 12 and Investment Entities HKAS 27 (Amendments) HKAS 32 (Amendments) Offsetting Financial Assets and Financial Liabilities HKAS 36 (Amendments) Recoverable Amount Disclosures for Non-Financial Assets HKAS 39 (Amendments) Novation of Derivatives and Continuation of Hedge Accounting HK (IFRIC) – Int 21 Levies The application of the above New HKFRSs had no material effect on the results and financial positions of the Group for the current or prior accounting periods which have been prepared and presented. Accordingly, no prior period adjustment has been required. 3. Summary of Significant Accounting Policies (Continued) The Group has not early applied the following New HKFRSs that have been issued but are not yet effective: Amendments to HKFRSs Annual Improvement to HKFRSs 2010-2012 Cycle2 Amendments to HKFRSs Annual Improvement to HKFRSs 2011-2013 Cycle1 HKFRS 9 and HKFRS 7 Mandatory Effective Date of HKFRS 9 and (Amendments) Transition Disclosures5 HKFRS 9 Financial Instruments5 HKFRS 11 (Amendments) Accounting for Acquisitions of Interests in Joint Operations3 HKFRS 14 Regulatory Deferral Accounts3 HKFRS 15 Revenue from Contracts with Customer4 HKAS 16 and HKAS 38 Clarification of Acceptable Methods of (Amendments) Depreciation and Amortisation3 HKAS 16 and HKAS 41 Agriculture: Bearer Plants3 (Amendments) HKAS 19 (Amendments) Defined Benefits Plans: Employee Contribution1 1 Effective for annual periods beginning on or after 1 July 2014 2 Effective for annual periods beginning on or after 1 July 2014, with limited exceptions 3 Effective for annual periods beginning on or after 1 January 2016 4 Effective for annual periods beginning on or after 1 January 2017 5 No mandatory effective date yet determined but is available for adoption HKFRS 9 “Financial Instruments” HKFRS 9 issued in 2009 introduced new requirements for the classification and measurement of financial assets. HKFRS 9 was amended in 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition. 3. Summary of Significant Accounting Policies (Continued) HKFRS 9 “Financial Instruments” (Continued) Key requirements of HKFRS 9 are described below: ‧ All recognised financial assets that are within the scope of HKAS 39 “Financial Instruments: Recognition and Measurement” to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent reporting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. In addition, under HKFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss. ‧ With regard to the measurement of financial liabilities designated as at fair value through profit or loss, HKFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value of financial liabilities attributable to changes in the financial liabilities’ credit risk are not subsequently reclassified to profit or loss. Under HKAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss was presented in profit or loss. The date when entities would be required to apply HKFRS 9 was previously stated at 1 January 2015. This mandatory effective date has been removed to provide sufficient time for preparers of financial statements to make the transition to the new requirements, which will now become effective from a later date yet to be announced. 3. Summary of Significant Accounting Policies (Continued) The Group is in the process of assessing the potential impact of the above New HKFRSs upon initial application but is not yet in a position to state whether the above New HKFRSs will have a significant impact on the Group’s results of operations and financial position. 4. Segment Information Operating segments are identified on the basis of internal reports which provide information about components of the Group. This information are reported to and reviewed by the chief operating decision maker (the “CODM”) for the purposes of resource allocation and performance assessment. The CODM consider the business from both geographic and service perspective. The Group has presented the following three reportable segments: – Cruise ship leasing and management business: the leasing of cruise ship and the provision of cruise ship management services. – Travel business: sales of air tickets and provision of travel-related services. – Lottery business: provision of sports lottery sales agency services to the sports lottery market in the People’s Republic of China (“PRC”). (a) Segment results and assets In accordance with HKFRS 8, segment information disclosed in these condensed consolidated financial statements has been prepared in a manner consistent with the information used by the Group’s CODM for the purposes of assessing segment performance and allocating resources among segments. In this regard, the Group’s CODM monitors the results and assets attributable to each reportable segment on the following bases: 4. Segment Information (Continued) (a) Segment results and assets (Continued) Segment profit represents the profit from each segment without allocation of corporate administrative costs such as directors’ salaries, share of results of associates and joint ventures, investment income and corporate finance costs. To arrive at reportable segment profit, the management additionally provide segment information concerning interest income, finance costs and major non-cash items such as depreciation, amortisation and impairment losses derived from reportable segments. Unallocated corporate income mainly comprises amortisation on financial guarantee contract, management fee income from an associate and other sundry income. This is the measure reported to the CODM for the purposes of resource allocation and performance assessment. Taxation is not allocated to reportable segments. Revenue and expenses are allocated to the reportable segments with reference to sales generated by those segments and the expenses incurred by those segments. The revenue from external parties reported to the CODM is measured in a manner consistent with that in the condensed consolidated statement of profit or loss. All assets are allocated to reportable segments other than current and deferred tax assets, tax recoverable, interest in associates and joint ventures. Unallocated corporate assets mainly included part of the property, plant and equipment, cash and cash equivalents of the central administration companies. joint ventures 173 Share of results of associates 56,284 12,088 Unallocated corporate income 12,200 94,297 Unallocated corporate expenses (16,611) (18,609) Finance costs (1,393) (6,064) Consolidated profit before taxation 48,020 65,715 Taxation – 2,363 Consolidated profit for the period 48,020 68,078 SUCCESS UNIVERSE GROUP LIMITED 16 (b) Other segment information Cruise ship leasing Other corporate and management Travel Lottery entities Total Unaudited Unaudited Unaudited Unaudited Unaudited For the six months ended For the six months ended For the six months ended For the six months ended For the six months ended 30/6/2013 30/6/2013 30/6/2013 30/6/2013 30/6/2013 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Interest income 20 3 15 326 364 Amortisation of intangible assets – (180) – – (180) Depreciation (3,018) (540) (1,021) (136) (4,715) Reversal of impairment loss recognised on other receivables 2,836 – – – 2,836 Impairment loss recognised on: – goodwill – (1,905) – – (1,905) – intangible assets – – – – – Finance costs – (365) – (6,064) (6,429) Additions to non-current assets* 18 234 149 91 492 * Additions to non-current assets only include the additions to property, plant and equipment during the period. INTERIM REPORT 2014 17 Other Gains: Amortisation of financial guarantee contract 9,997 Gain on derecognition of a long-term payable 83,429 Net exchange gain – Reversal of impairment loss recognised on other receivables 2,836 96,262 101,727 SUCCESS UNIVERSE GROUP LIMITED 18 * This amount is included in “other operating expenses” on the face of the condensed consolidated statement of profit or loss. 19 8. Dividends The directors of the Company (“Directors”) do not recommend the payment of an interim dividend for the six months ended 30 June 2014 (for the six months ended 30 June 2013: nil). No dividend payable to owners of the Company attributable to the previous financial year was approved and paid during the period. 9. Earnings Per Share (a) Basic earnings per share The calculation of basic earnings per share is based on the profit for the period attributable to owners of the Company of approximately HK$47,724,000 (for the six months ended 30 June 2013: profit of approximately HK$70,896,000) and on the weighted average number of approximately 4,926,491,000 ordinary shares (for the six months ended 30 June 2013: approximately 4,189,650,000 ordinary shares) in issue during the period. SUCCESS UNIVERSE GROUP LIMITED 20 9. Earnings Per Share (Continued) (b) Diluted earnings per share Diluted earnings per share equals to the basic earnings per share as there were no potential dilutive ordinary shares outstanding for the period presented. 10. Property, Plant and Equipment HK$’000 Carrying amount as at 1 January 2013 (Audited) 83,544 Additions 492 Depreciation (4,715) Exchange alignment (1,156) Carrying amount as at 30 June 2013 (Unaudited) 78,165 Carrying amount as at 1 January 2014 (Audited) 74,885 Additions 3,545 Depreciation (4,333) Exchange alignment (42) Carrying amount as at 30 June 2014 (Unaudited) 74,055 11. Goodwill HK$’000 Cost At 1 January 2013, 31 December 2013, 1 January 2014 and 30 June 2014 8,332 Accumulated impairment losses At 1 January 2013 (4,470) Impairment loss for the year (2,549) At 31 December 2013, 1 January 2014 and 30 June 2014 (7,019) Carrying amount At 30 June 2014 (Unaudited) 1,313 At 31 December 2013 (Audited) 1,313 rates stated below. The growth rate does not exceed the long-term average growth rate for the business in which the CGU operates. Key assumptions used for value in use calculations: Cruise ship management CGU At 31/12/2013 % % – Growth rate Zero Zero – Pre-tax discount rate 5 The pre-tax discount rates reflect specific risks relating to the relevant segment. Based on the impairment tests performed, the recoverable amount of the cruise ship management CGU are higher than its carrying amount based on value in use calculations. Therefore, no impairment on cruise ship management CGU is required (for six months ended 30 June 2013: nil). SUCCESS UNIVERSE GROUP LIMITED 22 11. Goodwill (Continued) The travel CGU had been fully impaired in the year ended 31 December 2013 as its recoverable amount was lower than its carrying amount based on value in use calculation. Growth rate of 2% and pre-tax discount rate of 14.17% were used in the value in use calculation of travel CGU as at 31 December 2013. 12. Intangible Assets Trademark Client list Total HK$’000 HK$’000 HK$’000 Cost At 1 January 2013 33,814 9,452 43,266 Exchange alignment (2,480) (694) (3,174) At 31 December 2013 and 1 January 2014 31,334 8,758 40,092 Exchange alignment 237 68 305 At 30 June 2014 31,571 8,826 40,397 Accumulated amortisation and impairment losses At 1 January 2013 – (5,391) (5,391) Charge for the year – (356) (356) Impairment loss (190) (23) (213) Exchange alignment – 395 395 At 31 December 2013 and 1 January 2014 (190) (5,375) (5,565) Charge for the period – (178) (178) Impairment loss (3,548) (386) (3,934) Exchange alignment (2) (40) (42) At 30 June 2014 (3,740) (5,979) (9,719) Carrying amount At 30 June 2014 (Unaudited) 27,831 2,847 30,678 At 31 December 2013 (Audited) 31,144 3,383 34,527 12. Intangible Assets (Continued) Trademark In accordance with HKAS 36 “Impairment of Assets” (“HKAS 36”), the Group completed its interim impairment test for the trademark by comparing its recoverable amount to its carrying amount as at 30 June 2014. The Group has conducted a valuation of the trademark based on the value in use calculations. With reference to the valuations carried out by Roma Appraisals Limited (“Roma”), an independent professional valuer, who has among the staff, fellow members of the Hong Kong Institute of Surveyors, the recoverable amount of the trademark was reduced to an amount equivalent to approximately HK$27,831,000 (31 December 2013: approximately HK$31,144,000). Therefore, an impairment loss equivalent to approximately HK$3,548,000 was recognised for the period ended 30 June 2014 (for the six months ended 30 June 2013: nil). The recognition of impairment loss is mainly contributed by the decrease in revenue as previously expected due to a more competitive environment of the travel industry. Any adverse change in the assumptions used in the calculation of the recoverable amount would result in further impairment loss. The valuation of the trademark is based on the relief-from-royalty method and uses cash flow projections based on financial estimates covering a five-year period, the expected sales deriving from the trademark in the travel CGU and a pre-tax discount of 17.45% (31 December 2013: 18.01%). The cash flows beyond the five-year period are extrapolated using a steady growth rate of 1.6% (31 December 2013: 2%). This growth rate does not exceed the long-term average growth rate for travel markets in which the Group operates. Management has considered the above assumptions and valuation and also taken into account the business plan going forward. Client list The Directors assessed that the client list having 15 years of useful lives from the date of acquisition. The Group has completed its interim impairment test for the client list by comparing the recoverable amount of the client list to its carrying amount as at 30 June 2014. The Group has conducted a valuation of the client list based on the value in use calculations. With reference to the valuations carried out by Roma, the recoverable amount of the client list was reduced to an amount equivalent to approximately HK$2,847,000 (31 December 2013: approximately HK$3,383,000). Therefore, an impairment loss equivalent to approximately HK$386,000 was recognised for the period ended 30 June 2014 (for six months ended 30 June 2013: nil). The recognition of impairment loss is mainly contributed by the increase in contributory charge of fixed assets. Any adverse change in the assumptions used in the calculation of the recoverable amount would result in further impairment loss. Deemed capital contribution (b) 99,978 Goodwill (c) 19,409 19,409 Share of results of associates (d) 28,252 – 147,639 119,387 Amounts due from associates (note 25(b)) (d) 856,419 828,387 Amount shown under non-current assets 1,004,058 947,774 25 13. Interest in Associates (Continued) (a) The following list contains only the particulars of associates, all of which are unlisted corporate entities, which principally affected the results or assets of the Group: Proportion of ownership interest Name of associate Place of incorporation/ operations Particulars of issued and paid up share capital Group’s effective interest % Held by the Company % Held by a subsidiary % Principal activity Pier 16 – Entertainment Macau 2 shares of 49 – 49 Provision of Group Corporation MOP24,000 and management services Limited MOP1,000 for casino operations respectively Pier 16 – Gaming Macau 1 share of 49 – 49 Provision of gaming Promotion, Limited MOP50,000 promotion services Pier 16 – Management Macau/ 2 shares of 49 – 49 Hotel management Limited Hong Kong MOP24,000 and and Macau MOP1,000 respectively Pier 16 – Property Macau 100,000 shares of 49 – 49 Property holding Development Limited MOP100 each (“Pier 16 – Property Development”) (b) The deemed capital contribution is referred to the financial guarantee contract (note 21) granted by the Group to the associates. (c) Goodwill Because goodwill is included in the carrying amount of the interest in associates and is not separately recognised, it is not tested for impairment separately by applying the requirements for impairment testing in HKAS 36. Instead, the entire carrying amount of the interest in associates is tested for impairment as set out in note 13(e) below. 13. Interest in Associates (Continued) (d) The amounts due from associates are unsecured, interest-free and have no fixed terms of repayment. Their carrying amounts are not materially different from their fair value. For the year ended 31 December 2013, the amount is represented by amounts due from associates of approximately HK$856,419,000 after set-off with the share of accumulated losses of associates of approximately HK$28,032,000. The share of results of associates was approximately HK$56,284,000 for the period ended 30 June 2014 and the amount was recognised after set-off with the share of accumulated losses of associates of approximately HK$28,032,000 which was set-off in the amounts due from associates in the prior year. (e) Impairment test for interest in associates The Group completed its interim impairment test for interest in associates by comparing the recoverable amount of interest in associates to its carrying amount as at 30 June 2014. The Group has engaged Roma to carry out a valuation of the interest in associates as at 30 June 2014 based on the value in use calculations. This valuation uses cash flow projections based on financial estimates covering a five-year period, and a pre-tax discount rate of 16.10% (31 December 2013: 17.00%). The cash flows beyond the five-year period are extrapolated using a steady growth rate of 4.28% (31 December 2013: 4.28%) for the casino and hotel industries in which are operated by associates. Management has considered the above assumptions and valuation and also taken into account the business plan going forward. Name of joint venture structure incorporation share capital interest activity % Surplus Win Enterprises Incorporated British Virgin Islands 2 shares of 50 Investment Limited US$1 each holding Double Diamond Incorporated British Virgin Islands 100 shares of 40 Operation of International Limited US$1 each pier (b) The amount due from a joint venture is unsecured, interest-free and has no fixed terms of repayment. (c) The Group has advanced HK$12 million to the joint venture to finance the acquisition of certain assets. The advance was unsecured and interest-free. In the opinion of the Directors, the Group will not demand for repayment within twelve months from 30 June 2014 and is therefore classified as non-current assets. As at 30 June 2014, the accumulated impairment loss of interest in joint ventures was approximately HK$10.7 million (31 December 2013: approximately HK$10.7 million) and is considered to be adequate as there are no indication for further impairment. The recoverable amount of this advance is determined based on the net cash flows from operations estimated by management for the coming five years. SUCCESS UNIVERSE GROUP LIMITED 28 All of the trade and other receivables are expected to be recovered within one year. The Group normally allows an average credit period of 30 to 60 days to customers of cruise ship leasing and management as well as lottery businesses (31 December 2013: 30 to 60 days) and 30 days to customers of travel business (31 December 2013: 30 days). 29 (equivalent to approximately HK$11.5 million) (31 December 2013: approximately RMB1.9 million, equivalent to approximately HK$2.4 million). Remittance of RMB out of PRC is subject to exchange restrictions imposed by the PRC government. 17. Trade and Other Payables Included in trade and other payables, the aging analysis for trade payables is as follows: Unaudited Audited At At 30/6/2014 31/12/2013 HK$’000 HK$’000 Current 18,005 8,796 31 to 60 days 1,224 911 61 to 90 days 499 361 Over 90 days 257 192 Trade payables 19,985 10,260 Accrued charges and other payables 117,785 23,005 Financial liabilities measured at amortised cost 137,770 33,265 SUCCESS UNIVERSE GROUP LIMITED 30 The profit guarantee liabilities are carried at amortised cost. 19. Bank Loans Unaudited Audited At At 30/6/2014 31/12/2013 HK$’000 Bank loans, secured 11,756 31 20. Loans Payables Audited At Note 31/12/2013 HK$’000 HK$’000 Loans from non-controlling shareholders: – Mrs. Yung Yuen Ping Kwok (i) 2,538 – SABC Holdings Ltd. (ii) 7,922 – Up Fly Limited (“Up Fly”) (iii) 7,306 Amounts shown under non-current liabilities 17,766 SUCCESS UNIVERSE GROUP LIMITED 32 20. Loans Payables (Continued) Notes: (i) Mrs. Yung Yuen Ping Kwok is a non-controlling shareholder of an indirect non-wholly owned subsidiary of the Company, namely 665127 British Columbia Ltd. (“665127 BC Ltd.”). The loan was unsecured, interest-free and has been settled during the period. The details please refer to note 24 to the condensed consolidated financial statements. (ii) SABC Holdings Ltd. is a non-controlling shareholder of an indirect non-wholly owned subsidiary of the Company, namely 665127 BC Ltd.. The loan is unsecured, interest-free and not expected to be settled within one year. (iii) Up Fly is a non-controlling shareholder of an indirect non-wholly owned subsidiary of the Company, namely Honour Rich China Development Limited. The loan is unsecured, interest-free and not expected to be settled within one year. The carrying amounts of the loans payables are approximately to their fair value. 21. Financial Guarantee Contract HK$’000 Carrying amount At 1 January 2013 (Audited) 89,980 Amortisation for the year (19,995) At 31 December 2013 and 1 January 2014 (Audited) 69,985 Amortisation for the period (9,997) At 30 June 2014 (Unaudited) 59,988 was approximately HK$923.9 million (31 December 2013: approximately HK$1,048.8 million). The contingent liabilities were disclosed in note 27. Based on the valuation performed by Roma, the Directors considered that the fair value of the financial guarantee contract was approximately HK$100.0 million at the date of issuance of financial guarantee contract with a corresponding increase in its interest in associates as deemed capital contribution. The carrying amount of the financial guarantee contract recognised in the Group’s condensed consolidated statements of financial position was in accordance with HKAS 39 “Financial Instruments: Recognition and Measurement” and is carried at amortised cost. No provision for financial guarantee contracts have been made at 30 June 2014 as the default risk is low (31 December 2013: nil). SUCCESS UNIVERSE GROUP LIMITED 34 23. Share Capital Number Nominal of shares value Notes ’000 HK$’000 Authorised: Ordinary shares of HK$0.01 each At 1 January 2013, 31 December 2013, 1 January 2014 and 30 June 2014 (unaudited) 160,000,000 1,600,000 Issued and fully paid: Ordinary shares of HK$0.01 each At 1 January 2013 4,064,940 40,649 Allotment and issue of consideration shares (a, b) 861,551 8,616 At 31 December 2013, 1 January 2014 and 30 June 2014 (unaudited) 4,926,491 49,265 35 23. Share Capital (Continued) Notes: (a) The Company issued consideration shares of 550,546,025 new ordinary shares in relation to the World Fortune Acquisition (as defined in note 39(a) to the Annual Report 2013) in May 2013. (b) The Company issued consideration shares of 311,004,784 new ordinary shares in relation to the Golden Sun Acquisition (as defined in note 39(b) to the Annual Report 2013) in October 2013. 24. Acquisition of the Interest in a Subsidiary In March 2014, 665127 BC Ltd. entered into a share repurchase agreement with one of its non-controlling shareholders to repurchase her entire equity interest in 665127 BC Ltd., namely 600 common shares without par value, at a cash consideration of CAD6 (equivalent to approximately HK$42) from that non-controlling shareholder (the “Share Repurchase”). The Group recognised a decrease in the equity attributable to the owners of the Company of approximately CAD62,000 (equivalent to approximately HK$440,000) and a corresponding increase in non-controlling interests of approximately CAD62,000 (equivalent to approximately HK$440,000). Besides, the said non-controlling shareholder assigned to 1338 Successful Venture Ltd., an indirect wholly-owned subsidiary of the Company and the immediate holding company of 665127 BC Ltd., an approximately 85.1% interest in all of her right, title and interest in and to a debt of CAD300,000 (equivalent to approximately HK$2.2 million) owed by a wholly-owned subsidiary of 665127 BC Ltd. as of the date of the Share Repurchase at a consideration of CAD1 (equivalent to approximately HK$7). The Group recognised a gain on settlement of loans payables of approximately CAD255,000 (equivalent to approximately HK$1.8 million) (note 5). Immediately after the Share Repurchase, the Company increased its effective beneficial interest in 665127 BC Ltd. from 80% to approximately 85.1%. December 2013 are as follows: Other receivable from a related party (ii) 5,867 Other payable to a director of a subsidiary of the Company (iii) 1,459 Loan from a director and controlling shareholder (iv) 50,000 37 25. Related Party Transactions (Continued) (b) (Continued) Notes: (i) The management fee was charged on actual cost incurred by the Group for provision of management and technical services. (ii) The amount of receivable is from the ultimate beneficial owner of Up Fly (the “JV Partner”) for his on-lending to a joint venture company of which the Company and the JV Partner indirectly held 80% and 20% interests respectively (the “JV Company”). The amount is secured by 20% equity interest of the JV Company, interest-free and has no fixed repayment terms. (iii) A short-term loan agreement was entered into between a director of a subsidiary of the Company (“Director of the Subsidiary”) and a subsidiary of the Company. The Director of the Subsidiary provided a short-term loan to one of subsidiary of the Company for its general working capital. The loan was unsecured, interest-free and has been repaid in January 2014. (iv) The loan is unsecured and charged with interest at the prime rate quoted for Hong Kong dollars loans by The Hongkong and Shanghai Banking Corporation Limited. The final repayment date of the loan and all other sums owing to Mr. Yeung Hoi Sing, Sonny, being a director and a controlling shareholder of the Company, was further extended to 31 October 2016 by a letter agreement dated 21 March 2014. 26. Commitments (a) There is no capital commitments outstanding at 30 June 2014 not provide for in the condensed consolidated financial statements (31 December 2013: nil). (b) At 30 June 2014, the total future minimum lease payments under non-cancellable operating leases for the Group are payable as follows: Audited At 31/12/2013 HK$’000 HK$’000 Within one year 4,435 6,144 In the second to fifth years, inclusive 903 7,047 The Group lease certain office premises and equipment under operating leases. The leases typically run for period ranging from two to five years. None of leases includes contingent rentals. 39 27. Contingent Liabilities In 2012, the Company gave a Guarantee to a bank in respect of the Syndicated Loan Facilities. The maximum guarantee amount borne by the Company under the Guarantee was HK$1,176 million. The outstanding loan under the Syndicated Loan Facilities as at 30 June 2014 was approximately HK$923.9 million (31 December 2013: approximately HK$1,048.8 million). 28. Pledge of Assets As at 30 June 2014, the Group had secured the following assets: (a) The Group pledged the time deposits of equivalent to approximately HK$10.3 million (31 December 2013: equivalent to approximately HK$9.7 million) to certain banks for the issuance of several bank guarantees, a standby letter of credit and overdraft facility of equivalent to approximately HK$11.7 million (31 December 2013: equivalent to approximately HK$11.6 million) for the operations of the Group; (b) World Fortune Limited, an indirect wholly-owned subsidiary of the Company, pledged all (31 December 2013: all) of its shares in Pier 16 – Property Development to a bank, for and on behalf of the syndicate of lenders, in respect of the Syndicated Loan Facilities; (c) The Group’s self-occupied properties with a carrying amount of equivalent to approximately HK$17.4 million (31 December 2013: equivalent to approximately HK$17.4 million) together with a time deposit equivalent to approximately HK$1.1 million (31 December 2013: equivalent to approximately HK$1.1 million) were pledged to a bank to secure bank loans to Jade Travel Ltd., an indirect non-wholly owned subsidiary of the Company which was incorporated in Canada (“Jade Travel, Canada”); and (d) The Group’s certain assets with a carrying amount of equivalent to approximately HK$0.1 million (31 December 2013: equivalent to approximately HK$0.1 million) was pledged to secure a finance lease to Jade Travel, Canada. 29. Seasonality The turnover of the Group’s travel business is subject to seasonal fluctuations, with peak demand during the holiday season whereas the Group’s cruise ship leasing and management business is subject to relatively lower degree of seasonal volatility. 30. Event After the Reporting Period On 2 July 2014, Capture Success Limited, an indirect non-wholly owned subsidiary of the Company, entered into an agreement with an independent third party to dispose of its cruise ship at a consideration of HK$93.0 million. The disposal was completed on 20 August 2014. 31. Comparatives Certain comparative amounts have been reclassified to conform with the current period’s presentation. INDEPENDENT REVIEW REPORT 31/F, Gloucester Tower The Landmark 國衛會計師事務所有限公司 11 Pedder Street Hodgson.Impey.Cheng.LimitedCentral Hong Kong TO THE BOARD OF DIRECTORS OF SUCCESS UNIVERSE GROUP LIMITED (Incorporated in Bermuda with limited liability) Introduction We have reviewed the interim financial information set out on pages 4 to 41, which comprise the condensed consolidated statement of financial position of Success Universe Group Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as of 30 June 2014 and the related condensed consolidated statement of profit or loss, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants. The directors of the Company are responsible for the preparation and presentation of this interim financial information in accordance with HKAS 34. Our responsibility is to express a conclusion on this interim financial information based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Scope of Review We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not prepared, in all material respects, in accordance with HKAS 34. HLB Hodgson Impey Cheng Limited Certified Public Accountants Shek Lui Practicing Certificate Number: P05895 Hong Kong, 28 August 2014 MANAGEMENT DISCUSSION AND ANALYSIS In the first half of 2014, the economy of China continued to grow steadily, and that drove the rapid development in gaming, entertainment and tourism industries in Greater China. The dual growth drivers of the Group, namely the lottery business in China and the flagship investment project Ponte 16 in Macau, were able to capture the opportunities and achieve improved performance on the back of such stable economic development. Stimulated by the global event FIFA World Cup 2014, the Group’s lottery business in China recorded a substantial growth. On the other hand, the gaming and tourist-related industries of Macau stayed buoyant, which led to encouraging results in Ponte 16. Results For the six months ended 30 June 2014, the Group recorded a turnover of approximately HK$730.6 million, representing approximately 12% decrease from approximately HK$834.7 million for the same period of 2013. Gross profit increased by approximately 60% to approximately HK$62.5 million (2013: approximately HK$38.9 million). Shared profit of the associates relating to Ponte 16 for the first half of 2014 was approximately HK$56.3 million, approximately 366% increase compared with approximately HK$12.1 million for the last corresponding period. Notwithstanding the increase in the Group’s gross profit and the shared profit of the associates relating to Ponte 16, the results of the Group was affected by the non-recurrence of the gain from derecognition of a long-term payable pursuant to the exercise of option by Maruhan Corporation of approximately HK$83.4 million recorded in the first half of 2013. Profit attributable to owners of the Company of approximately HK$47.7 million was recorded, representing a decrease of approximately 33% (2013: approximately HK$70.9 million). Earnings per share for the reporting period was 0.97 HK cents (2013: 1.69 HK cents). Interim Dividend The directors of the Company (“Director(s)”) do not recommend the payment of an interim dividend for the six months ended 30 June 2014 (2013: nil). Review of Operations Travel Business The Group runs one of the largest travel agencies in North America with a focus on high-end MICE (Meeting, Incentive, Convention and Exhibition) and FIT (Free Independent Traveller) segments. During the reporting period, the North American market experienced slow recovery. The sluggish sentiment resulted in financial difficulties of a number of travel agencies in the market. Amidst such environment, turnover of the segment recorded approximately HK$618.5 million (2013: approximately HK$769.4 million). Loss in this segment posted approximately HK$11.9 million (2013: approximately HK$9.8 million) including an impairment loss on intangible assets of approximately HK$3.9 million and bad debts written off of approximately HK$2.2 million (2013: impairment loss on goodwill of approximately HK$1.9 million) which were recognised for the reporting period. Cruise Ship Business The cruise ship, M.V. Macau Success, (in which the Group had a 55% interest as at 30 June 2014) operates from Hong Kong to international waters on a daily basis. For the six months ended 30 June 2014, turnover of the cruise ship business was approximately HK$44.5 million, representing an increase of approximately 6% (2013: approximately HK$42.0 million). The business recorded a profit of approximately HK$0.9 million for the reporting period as compared with approximately HK$2.1 million for the last corresponding period. On 2 July 2014, the Company announced the disposal of the cruise ship at a consideration of HK$93.0 million. Lottery Business The Group has successfully tapped into welfare lottery business during the reporting period, whilst offering sports lottery sales agency services in Jiangxi, Qinghai and Heilongjiang provinces. Review of Operations (Continued) Lottery Business (Continued) The robust growth momentum of lottery industry in China sustained into 2014. For the first half of 2014, lottery sales in China surged by approximately 19.2% year-on-year to approximately RMB178.4 billion. Amongst which, sports lottery sales grew by approximately 24.1% to approximately RMB79.9 billion; this strong sales growth was partly attributable to the FIFA World Cup that started in June 2014. Welfare lottery sales increased by approximately 15.5% to approximately RMB98.5 billion. With a focus to seize the growth momentum in the market during the reporting period, the lottery business of the Group achieved encouraging results. For the six months ended 30 June 2014, turnover of the lottery business amounted to approximately HK$67.6 million, representing an increase of approximately 190% (2013: approximately HK$23.3 million); segment profit of approximately HK$7.8 million was recorded (2013: loss of approximately HK$9.1 million). To ride on the global fever for the FIFA World Cup 2014, the Group launched a broadcasting channel to provide football commentary on its specialised online portal 128cai.com as part of the marketing programmes of the Group during the reporting period. A series of football-related promotional campaigns were also organised via WeChat, a popular social media. The Group’s endeavour was well-received by lottery players and successfully attracted strong sales in its sports lottery segment for the FIFA World Cup games. In addition to the existing sports lottery sales agency services, the Group expanded into the telephone agency sales services of welfare lottery in Shanghai and Tianjin in the first half of 2014. The testing of the technology service platform for the welfare lottery is expected to be completed in the second half of 2014. The venture into welfare lottery market has opened up new revenue streams for the Group and strengthened its competitiveness in the lottery market in China. Review of Operations (Continued) Lottery Business (Continued) The Group entered into a cooperation agreement with北京中投視訊文化傳媒有限公司 (Beijing Zhongtoushixun Culture Media Co., Ltd) (“CNLive”) and北京天潤瑞怡文化發展有限公司 (Beijing Rejoy Culture Development Co., Ltd) (“Rejoy Culture”) to promote the lottery agency sales of the Group in early 2014. This collaboration has strengthened the distribution capability of the Group by leveraging on the enormous customer base and the technology expertise of CNLive and Rejoy Culture in the mobile internet industry. Investment Project – Ponte 16 Ponte 16, the flagship investment project of the Group, is a world-class integrated casino-entertainment resort situated in the World Heritage Site of Macau. During the reporting period, positioning Ponte 16 as a leisure and entertainment destination for tourists and families continued to be the vision of the Group. Market conditions remained favourable in the first half of 2014. During the reporting period, total number of visitors from China to Macau increased by approximately 14.7% year-on-year to 10.2 million; Macau gross gaming revenue grew by approximately 12.6% year-on-year to approximately MOP193.1 billion, mainly fuelled by the strong momentum of the mass segment, where Ponte 16 focused its resources on in the midterm. Adjusted EBITDA* of Ponte 16 increased by approximately 51% to approximately HK$260.0 million for the six months ended 30 June 2014 (2013: approximately HK$172.5 million). This was mainly attributable to the steady growth in the number of visitors to Macau as well as the increase in gaming revenue from the mass market. As at 30 June 2014, the casino of Ponte 16 had 109 gaming tables, 84 of which were mass gaming tables, 9 were high-limit tables and 16 were VIP tables. Average occupancy rate of Sofitel Macau At Ponte 16 stayed at over 90% in the first half of 2014. * Adjusted EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation (and excluded interest income from the pledged bank deposit) Review of Operations (Continued) Investment Project – Ponte 16 (Continued) Thanks to the support from tourists all over the world, Sofitel Macau At Ponte 16 earned a number of reputable industry awards as of 30 June 2014, which included “China Hotel Award 2014” by China LifeStyle magazine, “2014 Certificate of Excellence” by “Daodao.com” (the official Chinese website of TripAdvisor), “Best Business Hotel 2013” by National Geographic Traveler, “Rakuten Travel Award 2013 – Entertainment Award” by Rakuten Travel (the largest online travel site in Japan), “Outstanding Hotel Partner Award 2013” and “Best Guest Review 2013” by Booking.com, “Macau Energy Saving Contest 2013 – Excellence Award of Hotel” by Companhia de Electricidade de Macau (CEM) and “2013 Macau Green Hotel Bronze Award” by Macao Environmental Protection Bureau (DSPA). The fine dining restaurant, Prive was awarded “100 Top Tables 2014” by South China Morning Post. These awards not only certified the positioning of Ponte 16 as a five-star resort, but also demonstrated its efforts on developing a greener society. As part of the ongoing efforts of Ponte 16 in strengthening its position as an integrated cultural, leisure and entertainment destination, a series of marketing events were introduced in the reporting period. A new Cantonese restaurant, Le Chinois, was opened in January 2014 with an aim to enhance the culinary experience of guests. Ponte 16 also launched an online travel magazine “Macau Hot Spot P16” in April 2014, guiding travellers to discover the inner beauty of Macau. The magazine has been broadcasted through various popular channels such as Facebook, Youtube, Weibo, Tudou and Tencent. Financial Review Liquidity, Financial Resources and Gearing As at 30 June 2014, the Group had net current assets of approximately HK$99.1 million (31 December 2013: approximately HK$79.0 million) and net assets of approximately HK$1,052.7 million (31 December 2013: approximately HK$1,009.6 million). Financial Review (Continued) Liquidity, Financial Resources and Gearing (Continued) On 1 December 2008, Mr. Yeung Hoi Sing, Sonny (“Mr. Yeung”, being a Director and a controlling shareholder of the Company) provided a HK$200 million term loan facility to the Company which is unsecured and charged with interest at the prime rate quoted for Hong Kong dollars loans by The Hongkong and Shanghai Banking Corporation Limited. The principal amount of the loan facility was increased up to HK$290 million on 14 April 2009 and the final repayment date of the loan and all other sums owing to Mr. Yeung under the revised loan facility was further extended from 31 October 2014 to 31 October 2016 by a letter agreement dated 21 March 2014. As at 30 June 2014, the Company had owed to Mr. Yeung in the amount of approximately HK$90.0 million (31 December 2013: approximately HK$50.0 million). Jade Travel Ltd. (“Jade Travel, Canada”, being an indirect non-wholly owned subsidiary of the Company which was incorporated in Canada) was granted secured bank loans which carry fixed interest rates and the loans shall be repayable by consecutive monthly instalments. The proceeds of the loans were to finance the acquisition of the properties of Jade Travel, Canada and their renovation costs. In addition, Jade Travel, Canada purchased a certain asset under a finance lease which shall be repayable by consecutive monthly instalments. As at 30 June 2014, the outstanding bank loans and finance lease liabilities were approximately CAD1.6 million and CAD16,000 (equivalent to approximately HK$11.5 million and HK$0.1 million) respectively (31 December 2013: approximately CAD1.6 million and CAD18,000 (equivalent to approximately HK$11.8 million and HK$0.1 million) respectively). Besides, as at 30 June 2014, the outstanding secured bank overdraft which carries floating interest rates for Jade Travel, Canada was approximately CAD262,000 (equivalent to approximately HK$1.9 million) (31 December 2013: nil). Apart from the aforesaid loans and overdraft, as at 30 June 2014, there were loans from non-controlling shareholders of approximately CAD1.3 million and HK$7.3 million, totally equivalent to approximately HK$16.8 million (31 December 2013: approximately CAD1.4 million and HK$7.3 million, totally equivalent to approximately HK$17.8 million). The loans were interest-free and unsecured. As at 30 June 2014, total equity attributable to owners of the Company was approximately HK$1,031.9 million (31 December 2013: approximately HK$984.7 million). The gearing ratio, which was measured on the basis of the interest-bearing borrowings of the Group over total equity attributable to owners of the Company, was approximately 10% as at 30 June 2014 (31 December 2013: approximately 6%). Financial Review (Continued) Pledge of Assets As at 30 June 2014, the Group had secured the following assets: (a) the Group pledged the time deposits of approximately CAD1.3 million and HK$0.7 million, totally equivalent to approximately HK$10.3 million (31 December 2013: approximately CAD1.2 million and HK$0.7 million, totally equivalent to approximately HK$9.7 million) to certain banks for the issuance of a standby letter of credit and overdraft facility of approximately CAD1.5 million and several bank guarantees of approximately HK$0.2 million and MOP0.5 million, totally equivalent to approximately HK$11.7 million (31 December 2013: approximately CAD1.5 million, HK$0.2 million and MOP0.5 million respectively, totally equivalent to approximately HK$11.6 million) for the operations of the Group; (b) World Fortune Limited, an indirect wholly-owned subsidiary of the Company, pledged all (31 December 2013: all) of its shares in Pier 16 – Property Development Limited (“Pier 16 – Property Development”, an associate of the Group) to a bank, for and on behalf of the syndicate of lenders, in respect of the syndicated loan facilities of HK$1,900 million and RMB400 million granted to Pier 16 – Property Development (the “Syndicated Loan Facilities”); (c) the Group’s self-occupied properties with carrying amount of approximately CAD2.4 million (equivalent to approximately HK$17.4 million) (31 December 2013: approximately CAD2.4 million (equivalent to approximately HK$17.4 million)), together with a time deposit of approximately CAD0.2 million (equivalent to approximately HK$1.1 million) (31 December 2013: approximately CAD0.2 million (equivalent to approximately HK$1.1 million)) were pledged to a bank to secure bank loans to Jade Travel, Canada; and (d) the Group’s certain asset with a carrying amount of approximately CAD14,000 (equivalent to approximately HK$0.1 million) (31 December 2013: approximately CAD18,000 (equivalent to approximately HK$0.1 million)) was pledged to secure a finance lease to Jade Travel, Canada. Financial Review (Continued) Contingent Liabilities The Company gave a corporate guarantee (the “Guarantee”) to a bank in respect of the Syndicated Loan Facilities in 2012. The maximum guarantee amount borne by the Company under the Guarantee was HK$1,176 million. The outstanding loan under the Syndicated Loan Facilities as at 30 June 2014 was approximately HK$923.9 million (31 December 2013: approximately HK$1,048.8 million). Human Resources As at 30 June 2014, the Group had a total of 476 employees. Remuneration is determined on the basis of qualifications, experience, responsibilities and performance. In addition to the basic remuneration, staff benefits include medical insurance and retirement benefits. Share options may also be granted to eligible employees of the Group as a long-term incentive. Prospects While the economy of China is expected to grow steadily in the second half of 2014, the travellers from China with increasing spending power will continue to fuel the gaming, entertainment and tourist-related industries in Greater China. The Group will keep up its efforts in expanding its lottery sales agency services network in China. Through the FIFA World Cup 2014 event, the lottery sales agency services of the Group have been proven reliable and capable of generating strong sales. The Group will relentlessly advance its services to lottery players to retain loyal customers and acquire new players. The new technology service platform for welfare lottery is currently under test run, and the Group is aiming to have it completed in the second half of 2014. Coupled with the new establishment in the welfare lottery sector, the Group is confident in capturing upcoming opportunities in the lottery market in China. The Group will also enrich its specialised online lottery platform 128cai.com by introducing live programmes in the near future to provide interactive services to customers. Prospects (Continued) Ponte 16, being the only integrated casino-entertainment resort in the Inner Harbour of Macau, will constantly add new elements to enrich guest experience in the resort. The previous efforts in organising various marketing and cultural events are shown to be rewarding in reinforcing the loyalty of existing customers and attracting new ones as well as building a stronger brand of Ponte 16. As part of the marketing strategies for the second half of 2014, Ponte 16 will feature another master chef from France to offer exquisite world-class cuisine at the French restaurant, Prive. The construction plan of phase 3 of the Ponte 16 development project (the “Project”) is currently under reviewing process by the Macau Government. Occupying a gross floor area of approximately 40,000 square meters, the Project will soon become another preferred travel and leisure destination in Macau, which will consist of a shopping arcade, an entertainment and recreation complex, dining destinations as well as gaming zones. Capture Success Limited, being a 55% indirectly owned subsidiary of the Company, entered into an agreement to dispose of its cruise ship M.V. Macau Success (the “Disposal”) at a consideration of HK$93.0 million in July 2014. The Disposal, completed in August 2014, enabled the Group to realise its investment in the cruise ship with a gain and to enhance its working capital. The unaudited pre-tax gain, before expenses and non-controlling interests, from the Disposal is expected to be approximately HK$44.2 million as calculated by reference to the consideration of HK$93.0 million and the carrying value of the cruise ship as at 31 December 2013 of approximately HK$48.8 million, and will be recognised in the second half of 2014. While volatility in the economy of North America is expected to prevail, the Group will rigorously assess the market environment and consolidate the travel business to maintain its competitiveness. The Group will seek sustainable growth opportunities in the travel business by capturing every cross selling opportunity with Ponte 16 and its extensive clientele in China and Macau. Looking ahead, the Group is well-prepared to materialise the goal of becoming a leading player in the gaming, entertainment and tourist-related industries. With confidence in the long-term outlook of the above industries, the Group is committed to creating value for its shareholders and customers. DISCLOSURE OF INTERESTS Directors’ and Chief Executive’s Interests in Securities As at 30 June 2014, the Directors or chief executive of the Company and/or any of their respective associates had the following interests and short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the “SFO”)) as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise, notified to the Company and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) contained in the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”): Interest in the shares of the Company (“Share(s)”) Approximate Long position/ Number of percentage of Name of Director Short position Nature of interest Shares held shareholding % Mr. Yeung Hoi Sing, Long position Corporate interest 2,466,557,462 50.07 Sonny (Note) Note: Mr. Yeung Hoi Sing, Sonny, an executive Director and the Chairman of the Company, was deemed to have corporate interest in 2,466,557,462 Shares by virtue of the interest of the Shares held by Silver Rich Macau Development Limited, which is wholly-owned by a discretionary trust, the beneficiaries of which are family members of Mr. Yeung Hoi Sing, Sonny. Save as disclosed above, as at 30 June 2014, none of the Directors or chief executive of the Company, or their respective associates, had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or as otherwise, notified to the Company and the Stock Exchange pursuant to the Model Code. Share Option Scheme and Directors’ Rights to Acquire Shares or Debentures At the annual general meeting of the Company held on 5 June 2014, the shareholders of the Company approved the termination of the share option scheme which was adopted by the Company on 20 August 2004 (the “2004 Share Option Scheme”) and the adoption of a new share option scheme (the “2014 Share Option Scheme”). The 2014 Share Option Scheme became effective on 10 June 2014 and the 2004 Share Option Scheme was terminated with effect from the same date. No options had been granted under the 2004 Share Option Scheme since its adoption and up to the date of its termination. Pursuant to the 2014 Share Option Scheme, the Board may at a consideration of HK$1 offer to grant options to selected eligible persons to subscribe for Shares as incentives or rewards for their contribution to the Group or any entity in which any member of the Group holds any equity interest and any subsidiary of such entity. The exercise price of any option will be determined by the Board in its absolute discretion, but in any event shall not be less than the highest of (i) the closing price of the Shares as stated in the daily quotation sheets of the Stock Exchange on the date on which the relevant option is offered; (ii) the average closing price of the Shares as stated in the daily quotation sheets of the Stock Exchange for the five business days immediately preceding the date on which the relevant option is offered; and (iii) the nominal value of a Share. The maximum number of Shares available for issue under options which may be granted under the 2014 Share Option Scheme and any other share option scheme(s) of the Company is 492,649,119 Shares, being not more than 10% of the total number of Shares in issue as at the date of adoption of the 2014 Share Option Scheme. The 2014 Share Option Scheme shall be valid and effective for 10 years from the date of adoption of the Share Option Scheme, i.e. 5 June 2014, subject to early termination by the Company in general meeting or by the Board. No options had been granted under the 2014 Share Option Scheme since its adoption and up to 30 June 2014. At no time during the period was the Company or any of its subsidiaries a party to any arrangements to enable the Directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Substantial Shareholders’ Interests in Securities As at 30 June 2014, the following persons (other than a Director or chief executive of the Company) had, or were deemed or taken to have, interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO: Interest in the Shares Approximate Name of substantial Long position/ Number of percentage of shareholder Short position Capacity Shares held shareholding % Silver Rich Macau Long position Beneficial owner 2,466,557,462 50.07 Development Limited Fiducia Suisse SA Long position Trustee 2,466,557,462 50.07 (Note 1) Mr. David Henry Long position Interest of 2,466,557,462 50.07 Christopher Hill controlled (Note 1) corporation Mrs. Rebecca Ann Hill Long position Interest of spouse 2,466,557,462 50.07 (Note 2) Ms. Liu Siu Lam, Marian Long position Interest of spouse 2,466,557,462 50.07 (Note 3) Maruhan Corporation Long position Beneficial owner 956,633,525 19.42 Notes: 1. The entire issued share capital of Silver Rich Macau Development Limited is held by Fiducia Suisse SA, which is a trustee of a discretionary trust, the beneficiaries of which are family members of Mr. Yeung Hoi Sing, Sonny. Fiducia Suisse SA is wholly-owned by Mr. David Henry Christopher Hill. Accordingly, each of Fiducia Suisse SA and Mr. David Henry Christopher Hill was deemed to be interested in 2,466,557,462 Shares held by Silver Rich Macau Development Limited. 2. Mrs. Rebecca Ann Hill, being the spouse of Mr. David Henry Christopher Hill, was deemed to be interested in 2,466,557,462 Shares in which Mr. David Henry Christopher Hill had a deemed interest. 3. Ms. Liu Siu Lam, Marian, being the spouse of Mr. Yeung Hoi Sing, Sonny, was deemed to be interested in 2,466,557,462 Shares in which Mr. Yeung Hoi Sing, Sonny had a deemed interest. Substantial Shareholders’ Interests in Securities (Continued) Interest in the Shares (Continued) Save as disclosed above, as at 30 June 2014, no other person (other than a Director or chief executive of the Company) had, or was deemed or taken to have, an interest or short position in the Shares and underlying Shares which were recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO. DISCLOSURE UNDER RULES 13.20 AND 13.22 OF THE LISTING RULES Based on the disclosure obligations under Rules 13.20 and 13.22 of the Listing Rules, the financial assistance, which was made by the Group by way of the shareholder’s loans provided by World Fortune Limited (“World Fortune”), an indirect wholly-owned subsidiary of the Company, and a corporate guarantee given by the Company in respect of the payment obligation of Pier 16 – Property Development Limited (“Pier 16 – Property Development”, a 49% owned associate of World Fortune) under syndicated loan facilities granted to Pier 16 – Property Development (the “Financial Assistance”), continued to exist as at 30 June 2014. Pier 16 – Property Development is principally engaged in the investment, development and, through its subsidiaries, operating Ponte 16, a world-class integrated casino-entertainment resort located in Macau. The Financial Assistance is mainly used for the development and operations of Ponte 16. The amounts of the Financial Assistance as at 30 June 2014 were set out below: Aggregate Shareholder’s Corporate Financial Name of associate loans guarantee Assistance HK$million HK$million HK$million Pier 16 – Property Development 856 1,176 2,032 The shareholder’s loans provided by World Fortune are unsecured, interest-free and have no fixed terms of repayment. Further details are set out in notes 13 and 27 to the condensed consolidated financial statements. Set out below is a consolidated balance sheet of Pier 16 – Property Development and the Group’s attributable interests in this associate according to its management account for the period ended 30 June 2014: Consolidated Group’s balance attributable sheet interests HK$’000 HK$’000 Non-current assets 2,028,892 994,157 Current assets 861,662 422,214 Current liabilities (536,220) (262,748) Non-current liabilities (2,787,876) (1,366,059) PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES During the six months ended 30 June 2014, there was no purchase, sale or redemption by the Company, or any of its subsidiaries, of the listed securities of the Company. CORPORATE GOVERNANCE In the opinion of the Directors, the Company has complied with all the code provisions as set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules during the six months ended 30 June 2014. CODES FOR SECURITIES TRANSACTIONS BY DIRECTORS The Company has adopted a code of conduct regarding securities transactions by Directors (the “Code of Conduct”) on terms no less exacting than the required standard of the Model Code as set out in Appendix 10 of the Listing Rules. Having made specific enquiry of all Directors, each of whom has confirmed his/ her compliance with the required standard set out in the Code of Conduct and the Model Code throughout the six months ended 30 June 2014. INFORMATION IN RESPECT OF DIRECTORS Ms. Yeung Mo Sheung, Ann, an independent non-executive Director, resigned as an independent non-executive director of Hao Wen Holdings Limited, a company whose issued shares are listed on the Growth Enterprise Market of the Stock Exchange, with effect from 1 July 2014. Save as disclosed above, there was no change in the information of the Directors required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules subsequent to the date of the Annual Report 2013 of the Company and up to the date of this report. AUDIT COMMITTEE The audit committee of the Board (the “Audit Committee”) comprises the non-executive Director, Mr. Choi Kin Pui, Russelle, and the three independent non-executive Directors, Mr. Luk Ka Yee, Patrick, Ms. Yeung Mo Sheung, Ann and Mr. Chin Wing Lok, Ambrose, with terms of reference prepared in accordance with the requirements of the Listing Rules. The Audit Committee is chaired by Mr. Chin Wing Lok, Ambrose who possesses appropriate professional accounting qualification as required under the Listing Rules. The primary duties of the Audit Committee include, inter alia, monitoring integrity of the financial statements of the Company and ensuring objectivity and credibility of financial reporting, reviewing effectiveness of the internal control system of the Group, overseeing the relationship with the external auditors of the Company as well as ensuring maintenance of good corporate governance standard and procedures by the Company. REVIEW OF INTERIM RESULTS The unaudited interim results for the six months ended 30 June 2014 have been reviewed by the Audit Committee and HLB Hodgson Impey Cheng Limited, the auditors of the Company, which were of the opinion that the preparation of such results complied with the applicable accounting standards and requirements and that adequate disclosures have been made. On behalf of the Board Yeung Hoi Sing, Sonny Chairman Hong Kong, 28 August 2014 SUCCESS UNIVERSE GROUP LIMITED