2.4.0.8061300 - Disclosure - Related Party Transactionstruefalsefalse1falsefalsefalsec20130501to20130731http://www.sec.gov/CIK0000354813duration2013-05-01T00:00:002013-07-31T00:00:001true1us-gaap_RelatedPartyTransactionsAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_RelatedPartyTransactionsDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; font-weight: bold; margin-right: 0pt;">Related Party Transactions</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During the three months ended July 31, 2013 and 2012, revenues from all related party transactions for the sales of products and services totaled approximately $163,000 (2% of total revenue) and $2.2 million (66% of total revenue), respectively. Included in accounts receivable on July 31, 2013 was approximately $38,000 from these customers. Descriptions of the transactions with the Company’s related parties in the three months ended July 31, 2013 and 2012 are presented below. </div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Berjaya Lottery Management (H.K.) Ltd.</div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In 1996, the Company entered into an agreement to purchase specific inventory on behalf of Berjaya Lottery Management (H.K.) Ltd. (“BLM”), the owner of 71.3% of ILTS’s outstanding voting stock as of July 31, 2013.  </div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Over time, the Company has sold or used portions of the BLM inventory in unrelated third party transactions. The sale or use of the inventory resulted in a liability to BLM for the cost of the items utilized.</div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The financial activities and balances related to BLM were as follows:</div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: symbol, serif; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;">·</div></td><td align="left" colspan="2" valign="top" style="width: 76%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were no related party sales to BLM in the three months ended July 31, 2013 and 2012;</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: symbol, serif; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;">·</div></td><td align="left" colspan="2" valign="top" style="width: 76%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were no accounts receivable balances from BLM as of July 31, 2013 and April 30, 2013;</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" valign="top" style="width: 66%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Liabilities to BLM arising from the sale or use of the BLM inventory, recorded as “Payable to Parent,” were $202,000 as of both July 31, 2013 and April 30, 2013; and</div></td><td align="left" colspan="2" valign="top" style="width: 11%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">  </div></td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" valign="top" style="width: 66%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were no inventory balances held for BLM as of July 31, 2013 and April 30, 2013.</div></td><td colspan="2" valign="top" style="width: 11%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr></table></div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Sports Toto Malaysia Sdn. Bhd.</div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The Company provides lottery products, software development and software support services to Sports Toto Malaysia (“STM”), an affiliate of BLM and a related party.  </div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In January 2013, the Company received from STM, an order valued at approximately $11 million for lottery products. Shipments of these products are to be completed in fiscal 2014.</div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The financial activities and balances related to transactions with STM were as follows:</div><div style="text-indent: 0pt; display: block;"><br /></div><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Revenue recognized on the sale of support services during the three months ended July 31, 2013 was approximately $122,000. For the three months ended July 31, 2012, revenues recognized on the performance of contract deliverables and sale of support services totaled approximately $1.1 million;</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Cost of deferred revenues in connection with the lottery product order received in January 2013 mentioned above totaled $188,000 as of July 31, 2013 and $104,000 as of April 30, 2013;</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: symbol, serif; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;">·</div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were deferred revenue balances of approximately $3.3 million on lottery products and software support services as of July 31, 2013 and April 30, 2013; and</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" valign="top" style="width: 66%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Accounts receivable totaled $27,000 as of July 31, 2013, compared to $410,000 as of April 30, 2013.</div></td><td align="left" colspan="2" valign="top" style="width: 17%;"><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">  </div></td></tr></table></div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Philippine Gaming Management Corporation</div><div style="text-indent: 0pt; display: block; font-family: Times New Roman; font-size: 10pt;"> </div><div style="text-indent: 0pt; display: block; font-family: Times New Roman; font-size: 10pt;">The Company provides lottery products and software development to Philippine Gaming Management Corporation (“PGMC”), a related party and a subsidiary of BLM.</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">In addition, the Company provides PGMC with terminal spare parts on an ongoing basis and support services on an as-needed basis.</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The financial activities and balances related to transactions with PGMC were as follows:</div><div style="text-indent: 0pt; display: block;"><br /></div><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Revenues recognized on the sale of lottery products during the three months ended July 31, 2013 and 2012 totaled approximately $5,000 and $1.1 million, respectively; </div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were no deferred revenue balances as of July 31, 2013 and April 30, 2013; and</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: symbol, serif; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;">·</div></td><td align="left" valign="top" style="width: 66%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There were no accounts receivable balances as of July 31, 2013 and April 30, 2013.</div></td><td align="left" colspan="2" valign="top" style="width: 17%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">  </div></td></tr></table></div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; font-size: 10pt;"> </div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; font-size: 10pt;">Natural Avenue Sdn. Bhd.</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The Company provides Natural Avenue Sdn. Bhd. (“Natural Avenue”), an affiliate of BLM and a related party, with lottery products and support services.  </div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The financial activities and balances related to transactions with Natural Avenue were as follows:</div><div style="text-indent: 0pt; display: block;"><br /></div><div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: times new roman; font-size: 10pt;"><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Revenues recognized on the sale of support services and licensing during the three months ended July 31, 2013 and 2012 totaled approximately $36,000 and $35,000, respectively;</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" colspan="2" valign="top" style="width: 83%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">There was no deferred revenue balance as of July 31, 2013. Deferred revenue balance on lottery product licensing totaled $4,000 as of April 30, 2013; and</div></td><td align="left" valign="top" style="width: 1%; display: inline; font-family: times new roman; font-size: 10pt;">  </td></tr><tr><td align="left" valign="top" style="padding-left: 0pt; width: 6%; margin-left: 446pt;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 45pt; font-size: 10pt; margin-right: 0pt;"><font style="display: inline; font-family: symbol, serif;">·</font>  </div></td><td align="left" valign="top" style="width: 66%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Accounts receivable was $11,000 as of July 31, 2013, compared to $1,000 as of April 30, 2013.</div></td><td align="left" colspan="2" valign="top" style="width: 17%;"><div style="text-align: left; text-indent: 0pt; display: block; font-family: times new roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">  </div></td></tr></table></div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;"> </div><div style="text-align: left; font-style: italic; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">Sports Toto Computers Sdn. Bhd.</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">The Company engages Sports Toto Computers Sdn. Bhd. (“STC”), a related party, to provide consulting, programming and other related services to the Company.</div><div style="text-indent: 0pt; display: block;"><br /></div><div style="text-align: left; text-indent: 0pt; display: block; font-family: Times New Roman; margin-left: 0pt; font-size: 10pt; margin-right: 0pt;">During the three months ended July 31, 2013 and 2012, the Company incurred service expenses of approximately $51,000 and $40,000, respectively, which are shown as part of cost of sales.</div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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