Business Overview

5. INFORMATION ON OUR GROUP 5. INFORMATION ON OUR GROUP
HISTORY AND BUSINESS Our Company was incorporated in Malaysia under the Act on 26 January 20I0 as a private limited company under the name of ManagePay Systems Sdn Bhd. Subsequently, on 31 March 2010, we converted our Company into a public limited company and assumed our present name. As at the LPD, our Company bas tbree (3) wholly-owned subsidiaries, MPSB, Sinatec and Whatdevice. We do not have any associated company. The structure of our Group is set out below:
PrincipalocnvUies:  Principal activities:  Principal activities:  (i)  Payment SeTllices  (i)  Payment Sen>ices  (t)  Business Process Outsourcing  (ii)  Terminal Sen>ices  {ii}  Loyalty Management SeTllices  (iiI)  Software. Security and ICT Senices {iii}  Software, Security and JeTSenices
Details onthesubsidiaries ofourGroup are setout in Section5.4 ofthisProspectus. The history of our Group begun with the incorporation ofMPSB. In June 2000, MPSB started as a technology solutions provider focusing on a variety of ICT and technology-related business activities such as Java software developmentJ e-business consultancy services, telecommunication equipment sales and smart card technologies for mobile operators. Subsequent to the incorporation of MPSB, Sinatec and Whatdevice were incorporated in August 2000. The incorporation of Sinatec was to offer business application in Microsoft platform with ERP and CRM as its primary focus, whilst, Whatdevice was incorporated to sell mobile phones on the internet. On 24 July 2002, Sina Consulting Sdn Bhd was incorporated to offer software development, programming, analysis and design mainly to cater for system integration and customisation work. These companies were incorporated as stand-alone entity. On 30 April 2001, MPSB was granted MSC Status to undertake variety of ICT and technology-related business activities which were primarily based on Java software development platform. 5. INFORMATION ON OUR GROUP (Cont’d) In 2002, MPSB collaborated with University Sains Malaysia (“USM”) to carry out R&D activities in portal system, e-commerce engine and payment gateway solutions. The R&D activities were conducted in Kompleks Eureka, USM Minden campus to work closely with the dean and professors of the School of Computer Science, USM. This collaboration has culminated into MPSB securing the MSC Grant Scheme awarded by MOSTI amounting to RM2.78 million. Subsequently, additional R&D centre was set up in Century Square, CybeIjaya utilising the abovementioned grants. Both the R&D centres in Kompleks Eureka and Century Square were relocated to our existing R&D facilities in NeoCyber in year 2007. On 21 August 2001, MPSB has acquired the entire equity interest of Sinatec for a .consideration of RM250,000. This acquisition was made to merge the software programmers of MPSB and Sinatec (collectively referred to as “MPSB Group”) as both the companies have similar capability albeit their technology platforms used to develop and provide solution are different. MPSB concentrates on Java platform whereas Sinatec uses the Microsoft platform for their product development respectively. In 2004, MPSB Group saw an opportunity to develop a recurring revenue income arising from the years of assisting Financial Institutions and large Merchants to integrate value-added systems such as prepaid top-up for mobile airtime into our EDCPOS Terminals. From these experiences, the MPSB Group and Whatdevice have developed competencies in the areas of message format and communication flow for the electronic payment transactions (“ISO 8583”) and standard for authenticating Credit and Debit Card payments (“EMV compliances”) respectively for both the EDCPOS Terminals and Host Application Servers solutions. MPSB Group and Whatdevice were invited by Financial Institutions to participate in tenders and quotations for their CreditJDebit EMV migration projects which required vendors with experience in IS08583, EMV Cards and EDCPOS Terminals. In this connection, the MPSB Group and Whatdevice were successfully secured three (3) major contracts which paved the way to build a business model that generates recurring revenue. The briefinformation ofthe three (3) contracts is set out below; Subsidiary Financial Institutions Name of project Status MPSB  EON Bank  • Letter of award dated 7 April  Ongoing. ‘  2004  and  the  subsequent  contract dated I May 2005 for  the  Cash  Advance  Automation System and NAC  for  the  entire  EON  Bank  branch network.  Southern Bank Berhad  • Contract  entered  into  on  I  Completed.•  (now known as CIMB Bonk  August 2004 for the in-source  Berhod)  EMV  Card  Personalisation  contract.  Whatdevice  EON Bank  • Letter of award dated 2 April  Ongoing. ”  2004  and  the  subsequent  contract dated I August 2006  for the  in-source EMV Card  Personalisation contract.
Noles: # This contract shall expire on 30 April 201 I unless renewed by mutual agreement.
• Southern Bank Berhad had on }2 October 2005 purchased the entire in-source set up together with all machinery and ancillary items/or a total consideration ofRMI.68 million prior to the expiry ofthe EMV Card Personalisation project. A This contract shall expire on 31 July 2011 unless renewed by mutual agreement. 5. INFORMATION ON OUR GROUP (Cont’d) Realising there are greater potential to develop recurring revenue in the provision of Managed Electronic Payment Solutions instead as a technology solution provider or system integrator, save for Sina Consulting Sdn Bhd which focuses on R&D development of advanced e-commerce portal system and SCICAD, Sinatee and Whatdevice were realigned to focus on electronic payment related activities whereas MPSB was installed to lead the Payment Services and Terminal Services businesses. To further unlock the potential, in July 2006, Sinatec was demerged from MPSB to focus on Loyalty Management Service whereas in April 2004, Whatdevice was repositioned to focus on the Business Process Outsourcing services. Subsequently, Sinatec was awarded MSC status in November 2006 and started the R&D activities at NeoCyber, Cyberjaya on I April 2010. On I July 2009, Sina Consulting Sdn Bhd which was owned by Chew Chee Seng (90%) and Chin Shea Swong (10%) was sold to Chin Yuin Long and Lee Boon Aun for a consideration ofRM3.64 million. The board of directors of Sina Consulting Sdn Bhd comprised Chew Chee Seng and Chin Shea Swong, together with the other Promoters decided to dispose Sina Consulting Sdn Bhd as an effective way to curb draining resources due to the inadequate revenue recorded by Sina Consulting Sdn Bhd for the past three (3) FYEs 2007 to 2009. The original cost of investment for SCICAD and advanced e-commerce portal system were RM2.90 million and RM2.30 million respectively. In December 2009, MPSB acquired SCICAD and advanced e-commerce portal system from Sina Consulting Sdn Bhd in lieu of payment of amount outstanding due from Sina Consulting Sdn Bhd together with the relevant upgrades of approximately RM3.64 million (based on the unaudited net book value of Sina Consulting Sdn Bhd) to expand our Payment Services to include trading exchanges to handle full transaction cycle from procurement to supply chain management to customer relationship management. The purchase was important to us arising from the high possibility of a nationwide SME online service delivery platform implementation by MDeC and after careful deliberation of the benefits, amongst others: (i) the scalability of SCICAD and advanced e-commerce system portal which is able to meet MDeC’s requirement ofa payment solution for trading exchange portal; and
(ii) the immediate availability and familiarity of the technology used in developing the SCICAD and advanced e-commerce system portal as opposed to developing from scratch which may take approximately six (6) to twelve (12) months or purchasing off-the-shelf product which may require further customisation.

We have, on 23 March 2010, received a Icller of intent from MDeC to implement and roll-out SME online service delivery platform utilising SCICAD and advanced e-commerce portal system. On 26 April 2010 we received a purchase order of approximately RMl.55 million to implemcnt and roll-out the first phase of the SME online service delivery platform which was subsequently confrrmed by the leller of award from MDeC dated 15 May 2010. On 30 December 2010, we have completed the SME online service delivery platform (which was renamed as Malaysia Digital Enterprise Exchange (MDEX» by recruiting more than 3,000 SMEs to participate in the said project. Further details and information relating to our subsidiaries and business overview are set out in Sections 5.4 and 6 of this Prospectus respectively. 5. INFORMATION ON OUR GROUP (Cont’d) 5.2 SHARE CAPITAL As at the LPD, our authorised share capital is RM25,OOO,000 comprising 250,000,000 Shares of which RM13,727,319 comprising 137,273,190 Shares have been issued and fully paid-up. Upon completion of our IPO, our enlarged issued and paid-up share capital will be approximately RMI 8,303,119 comprising 183,031,190 Shares. The movements in our issued and paid-up share capital since the date of our incorporation and immediately after the IPO are set out below: No. of Shares Par value Consideration! Cumulative issued and allotted Types of issue paid-up share capital RM RM 100 0.10 Subscribers’ shares 10 137,273,090 0.10 Issued pursuant to the Acquisitions 13,727,319 45,758.000 0.10 Issued pursuant to the Public Issue \8,303,119 Enlarged issued and paid-Up post IPQ i8,303,119
5.3 LISTING SCHEME In conjunction with and as an integral part of our Listing, we undertook a Listing Scheme which involves the following: 5.3.1 ACQUISITIONS Pursuant to the SSAs, the details ofthe Acquisitions are set out below: (i) Acquisition of MPSB Our Company entered into the SSA to acquire the entire equity interest in MPSB comprising 3,017,738 MPSB shares from the vendors of MPSB, namely Chew Chce Seng, Dato’ Theng Book, Chan Wah Kiang, Chin Shea Fong, Dato’ Yap Kuak Fong and Chee Sau Ying @ Chee Shiow Lian for a total purchase consideration of RMII,586,047 fully satisfied via the issuance of 115,860,470 ManagePay Shares at par, as follows: Equity interest in <:—MPSB —> <-Purchase consideration -> No. ManagePay Vendors No. shares % RM Shares allotted Chew Chee Seng 1,194,421 39.58 4,585,756.80 45,857,568 Dato’ Theng Book 482,838 16.00 1,853,766.30 18,537,663 Chan Wah Kiang 603,547 20.00 2,317,210.20 23,172,102 Chin Shea Fong 495,512 16.42 \,902,429.70 19,024,297 Dato’ Yap Kuak Fong 120,710 4.00 463,442.00 4,634,420 Chee Sau Ying @ Chee Shiow Lian 120,710 4.00 463,442.00 4,634,420 Total 3,017,738 100.00 11,586,047.00 115,860,470 The purchase consideration for the acquisition of MPSB was arrived at on a willing buyer willing seller basis after taking into account the audited NA of MPSB as at 31 December 2009.

 

5. INFORMATION ON OUR GROUP (Coot’d) (it) Acquisition of Sinatec Our Company entered into the SSA to acquire the entire equity interest in Sinatec comprising 1,013,475 Sinatec shares from the vendors of Sinatec, namely Chew Chee Seng, Dato’ Theng Book, Chan Wah Kiang, Chin Shea Fong, Dato’ Yap Kuak Fong and Chee Sau Ying @ Chee Shiow Lian for a total purchase consideration of RMI,209,783 fully satisfied via the issuance of 12,097,830 ManagePay Shares at par, as follows: Equity interests in <—Sinatec > <-Purchase consideration -> No. ManagePay Vendors No. shares % RM Shares ellotted Chew Chee Seng 401,133 39.58 478,831.80 4,788,318 Dato’ Theng Book 162,156 16.00 193,564.20 1,935,642 Chan Wah Kiang 202,695 20.00 241,957.30 2,419,573 Chin Shea Fong 166,413 16.42 198,646.90 1,986,469 Dato’ Yap Kuak Fong 40,539 4.00 48,391.40 483,914 Chee Sau Ying @ Chee Shiow Lian 40,539 4.00 48,391.40 483,914 Total 1,013,475 100.00 1,209,783.00 12,097,830 The purchase consideration for the acquisition of Sinatec was arrived at on a willing buyer willing seller basis after taking into account the audited NA of Sinatec as at 31 December 2009. (iii) Acquisition of Whatdevice Our Company entered into the SSA to acquire the entire equity interest in Wbatdevice comprising 968,786 Wbatdevice shares from the vendors ofWbatdevice, namely Chew Chee Seng, Dato’ Theng Book, Chan Wah Kiang, Chin Shea Fong, Dato’ Yap Kuak Fong and Chee Sau Ying @ Chee Shiow Lian for a total purchase consideration ofRM931,479 fully satisfied via the issuance of9,314,790 ManagePay Shares at par, as follows: Equity interests in <–Whatdevice –> <-Purchase consideration -> No. ManagePay Vendors No. shares % RM Shares allotted Chew Chee Seng 383,445 39.58 368,679.20 3,686,792 Dato’ Theng Book 155,006 16.00 149,035.50 1,490,355 Chan Wah Kiang 193,758 20.00 186,296.40 1,862,963 Chin Shea Fang 159,075 16.42 152,949.30 1,529,492 Dato’ Yap Kuak Fang 38,751 4.00 37,259.30 372,594 Chee Sau Ying @ Chec Shiow Lian 38,751 4.00 37,259.30 372,594 Total 968,786 100.00 931,479.00 9,314,790 The purchase consideration for the acquisition of Wbatdevice was arrived at on a willing-buyer willing-seller basis after taking into account the audited NA of Wbatdevice as at 31 December 2009. 5. INFORMATION ON OUR GROUP (Cont’d) The 137,273,090 Shares issued pursuant to the Acquisitions rank pari passu in all respects with all then existing Shares and carry all rights to receive in full all dividends and other distributions declared and paid subsequent to the allotment thereof. Upon completion of the Acquisitions, our issued and paid-up share capital has increased from RMIO comprising 100 Shares to RM 13,727,3 19 comprising 137,273,190 Shares. 5.3.2 Public Issue In conjunction with our Listing, we are undertaking a public issue of 45,758,000 Shares at the Issue Price comprising the following: (a) 32,946,000 Shares by way of private placement to identified investors.
(b) 3,660,000 Shares will be made available for application by our eligible employees under the Pink Form Allocations.
(c) 9,152,000 Shares will be made available for application by the Malaysian Public.

 

5.3.3 Listing and Quotation Upon completion of the IPO, we shall seek the permission of Bursa Securities for the listing of and quotation for our entire enlarged issued and paid up share capital comprising 183,031,190 Shares on the ACE Market ofBursa Securities. The rest ofthis page is intentionally left blank

5. INFORMATION ON OUR GROUP (Cont’d) 5.4 SUBSIDIARIES We are an investment holding company with three (3) subsidiaries as set out below:
Datel  Authorised  Issued and  Equity  place of  share  paid-up share  interest  Company  incorporation  capital  capital  %  Principal activity  Subsidiaries ofManagePay  MPSB  12 June  5,000,000  3,017,738  100  (i)  software  development  business,  (516641-W)  20001  marketing  of  computer  software  Malaysia  solution,  telecommunication  and  hardware  equipment,  providing  consultancy services in respeet of e­ commeree.  e-business  ereation,  management  of  web-site  and  providing maintenanee services; and  (ii) provision  of merchant  aequisition  services,  deploy  connectivity  infrastructure  and  terminal  equipment for  eleetronie  payment  between  Merchants  and  Financial  Institutions,  provide  EDCPOS  Terminals rentals to Merehants.
Sinatee 14 August 5,000,000 1,013,475 100 (i) provision of consultancy services in (523495-V) 20001 respect of e-commerce. c-business Malaysia creation, management of web~site, software development, marketing of computer software solution, telecommunication and hardware equipment and providing maintenance services; and (ii) provision of merchant acquisition services. deploy connectivity infrastrueture and tenninal equipment for electronic payment between Merchants and Financial Institutions, provide EDCPOS Tenninals rentals to Merehants, hosting of customer loyalty programme for third party. Whatdevice 15 August 5,000,000 968,786 100 Provision of information technology (523502-A) 20001 services and consultation and outsource Malaysia services, amongst others, the contracting of the card personalisation services. The rest ofthispageis intentionallyleftblank 5. INFORMATION ON OUR GROUP (Cont’d) 5.4.1 MPSB (a) History and business MPSB was incorporated in Malaysia under the Act on 12 June 2000 as a private limited company under its present name. The principal activities ofMPSB are: (i) software development business, marketing of computer software solution, telecommunication and hardware equipment, providing consultancy services in respect of e-commerce, e-business creation, management of web-site and providing maintenance services; and (il) provision of merchant acquisition services, deploy connectivity infrastructure and terminal equipment for electronic payment between Merchants and Financial Institutions, provide EDCPOS Terminals rentals to Merchants. MPSB commenced its business operations on 16 June 2000. (b) Share capital MPSB’s present authorised share capital is RM5,OOO,000 comprising 5,000,000 ordinary shares of RMI.OO each of which RM3,017,738 compnsmg 3,017,738 ordinary shares ofRMI.OO each have been issued and fully paid-up. The movements in issued and paid-up share capital of MPSB since incorporation are as follows: Date of allotment No. shares Par value Consideration! Cumulative issued allotted Type of issue and paidpup share capital RM RM 12 June 2000 2 1.00 Subscribers’ shares 2 21 August 2001 249,998 1.00 Otherwise than cash· 250,000 7 August 2002 750,000 1.00 Otherwise than cash· 1,000,000 30 December 2003 1,500,000 1.00 Otherwise than cash· 2,500,000 3 December 2009 517,738 1.00 Otherwise than cash· 3,017,738 Note: • Capitalising the amount owing to Chew Chee Seng. 5.4.2 Sinatee (a) History and business Sinatec was incorporated in Malaysia under the Act on 14 August 2000 as a private limited company under its present name. The principal activities of Sinatec are: (i) provision of consultancy services in respect of e-commerce, e-business creation, management of web-site, software development, marketing of computer software solution, telecommunication and hardware equipment and providing maintenance services; and (il) provision of merchant acquisition services, deploy connectivity infrastructure and terminal equipment for electronic payment between Merchants and Financiallnstitutions, provide EDCPOS Terminals rentals to Merchants, hosting of customer loyalty programme for third party. Sinatee commenced its business operations on \4 August 2000. 5. INFORMATION ON OUR GROUP (Cont’d) (b) Share capital Sinatec’s present authorised share capital is RM5,OOO,OOO comprising 5,000,000 ordinary shares of RMI.OO each of which RMI,013,475 comprising 1,013,475 ordinary shares of RM 1.00 each have been issued and fully paid-up. The movements in issued and paid-up share capital of Sinatec since its incorporation are as follows: Date of allotment No. Shares Par value Consideration! Cumulative issued allotted Type of issu e and paid-up share capital RM RM 14 August 2000 2 1.00 Subscribers’ shares 2.00 21 August 2001 249,998 1.00 Otherwise than cash· 250,000 3 December 2009 . 763,475 1.00 Otherwise than cash· 1,013,475 Note: • Capitalising the amount owing to Chew Chee Seng.
5.4.3 Whatdevice <a) History and business Whatdevice was incorporated in Malaysia under the Act on 15 August 2000 as a private limited company under the name of Erenong.Com Sdn. Bhd. and subsequently, on 23 November 2001, it changed its name to its present name. The principal activities of Whatdevice are the provision of information technology services and consultation and outsource services, amongst others, the contracting of the card personalisation services. Whatdevice commenced its business operations in July 2001. (h) Share capital Whatdevice’s present authorised share capital is RM5,OOO,OOO comprising 5,000,000 ordinary shares of RMI.OO each of which RM968,786 comprising 968,786 ordinary shares of RM 1.00 each have been issued and fully paid-up. The movements in issued and paid-up share capital of Whatdevice since its incorporation are as follows: Date of allotment No. shares Par value Consideration! Cumulative issued allotted Type of issue and paid-up share capital RM RM 15 August 2000 2 1.00 Subscribers’ shares 2.00 30 January 2004 99,998 1.00 Otherwise than cash· 100,000 27 April 2004 150,000 1.00 Cash 250,000 3 December 2009 718,786 1.00 Otherwise than cash· 968,786 Note: • Capitalising the amount owing to Chew Chee Seng.

5. INFORMATION ON OUR GROUP (Conl’d) Save as disclosed above: (i) there have been no changes in the issued and paid-up share capital ofour subsidiaries for the past three (3) years up to the LPD;
(ii) our subsidiaries do not have any subsidiaries or associated companies as at the LPD; and

(iii) our subsidiaries do not have any outstanding warrant, options, convertible securities or uncalled capital as at the LPD. The rest ofthis page is intentionally left blank
6. BUSINESS OVERVIEW
PRINCIPAL ACTIVITIES, PRODUCTS AND SERVICES (i) Our Group’s Managed Electronic Payment Solutions ecosystem
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Our business activities predominantly entail recruiting business enterprises to participate in the electronic payment network through Merchant Acquisition exercises. Through our products and services, we provide integrated electronic payment solutions that include installation of the necessary linkages in the form of hardware and software that will link the Merchants to the relevant Financial Institutions and Card Organisations. In addition to that we also offer Loyalty Management Services through our CLMS. Our products and services are further elaborated in Section 6.I(ii) below. To date, we have been appointed by EON Bank and MBB as Merchant Service Provider. We have also been accredited by MasterCard WorldWide and Visa International as Merchant Service Provider. (ii) Principal products and services
Merchant acquISItIon and connectIVIty infrastructure for electronic payment between Merchants and Financial Institutions. EDCPOS Terminal rentals range from RM50 to RM 150 where the rental charges differ among Merchants. Delivery of loyalty software application as a managed service to business owners. Provision of EMV Card Personalisation services. Software development and system integration services.
6. BUSINESS OVERVIEW (Cont’d) Our products and services comprises five (5) key components within two (2) main clusters, namely core and value added services.
Core services Ca) Payment Services; and (b) Terminal Services. Value-added services Ca) Loyalty Management Services;
(b) Business Process Outsourcing; and
(c) Software, Security and ICT Services.

(a) Payment Services Our Payment Services entail integrating the necessary linkages between the Merchants and the relevant Financial Institutions and Card Organisations. This includes providing the following: (i) front-end interface -rolling-out of the EDCPOS Terminals or non-terminals (internet or mobile) interface that captures data; and
(ii) network connectivity -building switching networks called NAC to transfer data to relevant Host Application Servers.

As we have the relevant expertise in Electronic Payment Solutions industry value chain, we are able to customise our products and services based on the respective customer’s needs. Through our products and services, our payment solutions ensure secure payment transactions across numerous channels. Irrespective of the platforms used, once the payment request is submitted, our solutions shall ensure that the purchase transactions are being processed. As the technology continues to evolve rapidly, we strive to keep abreast with new developments in the industry. Thus, allowing us to provide the latest technologies for the Payment Services to our customers.
Transaction process Typically, a Card-based transaction travels from the EDCPOS Terminals or other non­terminals interface through a series of integrated networks for authorisation against the Cardholder’s account. These integrated networks include that of the Acquiring Bank (and Issuing Bank if applicable) as well as the Card Organisations. The transaction data contains information derived from the Card (e.g. the account number), the EDCPOS Terminals and other non-terminals interface (e.g. the Merchant number), transaction details (e.g. the amount), together with other data which may be generated dynamically or added by intervening systems. The Issuing Bank’s Host Application Server will either approve or decline the transaction and generates a response message that is delivered back to the EDCPOS Terminal or other non-terminal interface in realtime. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) Figure 1: Transaction process for Payment Services . ~”, ~”-‘ NACCard•holder CoanttU the p.Jymen’ Acquiring ltm’lhuls (urd 0( BanI<
non-,,,” presence) to the HonAppilulion ServtTlopronss payme.nt

Note: The dashed lines indicate our Payment Services. (b) Terminal Services To customers who only require the hardware for payment solutions, we will provide EDCPOS Terminal installation and maintenance services. Our EDCPOS Terminals (front-end) interact with network programmes and softwares (at the back-end) in the electronic payment network structure. The EDCPOS Terminals read or acquire information from chip-based CreditlDebit/Charge Cards, which are verified against a Card issuing system. Our EDCPOS Terminals are deployed at cashier couoters in any Merchant stores and outlets throughout Malaysia. As value-added services, we also provide training sessions to our customers if we are requested to. Since all EDCPOS Terminals are simple and easy to use the time required for user training is minimised. We also offer 24-hour customer support services on a daily basis. The key features of EDCPOS Terminals are as below: Communication type:  (i)  dial-up  (ii)  leased line  (iii)  mobile wireless  (iv)  fixed wireless  Features:  (i)  Card reader: both magnetic stripe and smart Card (chip-based)  (ii)  small footprint; light weight  (iii)  high security, Payment Card Industry (PCI) PIN Entry Device  (PED) certified  (iv)  multi-lingual (selectable)  (v)  large paper roll  (vi)  multi-merchant identity
6. BUSINESS OVERVIEW (Cont’d) Installation process First, we receive a request for EDCPOS Terminal installation from the Financial Institutions. Next, our customer service team performs internal preparations and final quality checks on the EDCPOS Terminals. If satisfactory, the EDCPOS Terminals are installed at the Merchants’ outlet(s) and user acceptance test would be carried out together with on-site user training. Following which, we provide after sales maintenance and support serviees. The installation process for our Terminal Services is illustrated in the diagram below. Figure 2: Instanation process for our Terminal Services
(c) Loyalty Management Services Loyalty Programmes are designed to enhance brand loyalty among customers. By offering special rewards and perks, Loyalty Programmes encourage consumers to be ‘loyal’ to a particular brandlMerchant. Rewards may be based on the monetary value of purchases made or on the frequency of purchases. A good loyalty management program should be able to enhance the customers’ experience at Merchants’ outlets. Recognising the benefits of Loyalty Card systems to both consumers and Merchants, our Group has developed a loyalty management system called CLMS. CLMS is a system comprising a single loyalty Card issuer with multiple Merchants. Through our CLMS, Cardholders will be able to earn points and/or bonuses when they spend at selected Merchant outlets. From this, they will be able to redeem gifts and/or rewards at other participating Merchant outlets. In view of this, our CLMS is able to attract new Cardholders while retaining existing ones. Our CLMS also manages the following key functions: (i)  sales transactions and Cardholder data collected at the point of sale;  (Ii)  loyalty point enquiries;  (iii)  loyalty point accumulation and redemption; and  (iv)  loading and managing Cardholder details.

6. BUSINESS OVERVIEW (Cont’d) Transaction process The Loyalty Card-based transaction (includes the co-branded Credit Card-based Loyalty Cards and standalone Loyalty Cards) travels from EDCPOS Terminals or other non-terminals interface through a series of integrated networks for authorisation against the Cardholder’s accounl. These integrated networks include that of the Acquiring Bank (and Issuing Bank if applicable), Card Organisations and CLMS Host Application Server, which will communicate with one another. The transaction data contains information derived from the Cards (e.g. the account number), the EDCPOS Terminals and other non-terminals interface (e.g. the Merchant number), transaction details (e.g. the amount), together with other data which may be generated dynamically or added by intervening systems. The Issuing Bank’s Host Application Server and/or CLMS Host Application Server will either approve or decline the transaction and generates a response message that is delivered back to the EDCPOS Terminals and other non­terminals interface in realtime. When a loyalty Cardholder makes a purchase at participating Merchant outlets, points are earned which are then captured by the EDCPOS Terminals or other non-terminals interface. Once the transaction has been approved, the information is then relayed to the CLMS Host Application Server which will process and update the Cardholder’s earned points. Depending on CLMS customers’ requirement (e.g. MATTA), the points can be updated in realtime or at the end of business day. Our Group’s CLMS enables the loyalty Cardholder to redeem points earned either at participating Merchant outlet(s) or via online. The transaction process for our CLMS is illustrated in the diagram below. Figure 3: Transaction process for our Loyalty Management Services

 

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Ir~~~~N~A~C~~~_~-, • -, ‘”f”~'”‘~ i-_’ C’:!.;frholder processedInternet Terminals Mobile Connects the ‘—-‘–__—-.J1paym,£nl Acquiring Issuing Bank 11 Forstllnd-e.lone -lI«eptantc terminals (card Dr Bank ICard oftri!lnS3d:lon lind polnls nOlHafd preu~:nfel to the
Organisationcllrned Ho~ ApplitiJtlon2) forco-britl1ded -as per (1) 5eMreltOabove and payment prol:CU piJY’T’cnt .~pta;nce. I Merc:hantacquIsltlon Il ~ Notes: The transaction process within the straight lines indicates our standalone Loyalty Management Service, which only facilitate the processing ofpoints earned by Cardholders. , The transaction process within both the straight line and the dashed lines indicate our co-branded Loyalty Management Service. which includes processing of both payment transactions made by Cardholders and the points earned relating to that payment. 6. BUSINESS OVERVIEW (Cont’d) (d) Business Process Outsourcing Our Business Process Outsourcing services include personalisation of EMV Cards used as payment medium in the payment services industry. EMV Card personalisation is the process of: (i)  embossing Cardholders’ data onto the EMV Cards (physical personalisation); and/or  (ii)  programming Cardholders’ data into the smart chips of the EMV Cards (logical  personalisation).
The above processes transform a Card with complete artwork but without personal data (blank Card) into a personalised EMV Card. We offer Card personalisation to both EMV Cards and co-branded Credit Card-based Loyalty Cards. EMV Card Personalisation process The steps of transforming a blank Card into a ‘personalised card’ are as depicted in the diagram below. Figure 4: Process flow depicting the steps involved in card personalisalion Details to be encoded into the Cards are furnished by the Bank Host and I. -, . downloaded into th,ecaPLd~ fiJ”\: ‘.;..: Report Processlnc -~ o­m personalisation system 1• ~ , “, *:~ ,_ ..;~; .. “Perso~~lilecrCa~~~and ~,:’ ,” re~~::1~ito _r;I~I”. ‘-,’.. II

~~,~~woZ ~ II'”.RI,,”~l’ri(\:~F:\it!<;,,¥ ..r:¥l.”,:xi? , W#’\ Encoded inform.tion are encrypted / ,,”h ~~ into the Card and Cardholder’s _ ~Personalized Cards Blan~ I detailsare~~~t.~d~:,t;:~ar~ :::a~~ ,,,Ji pa:~d~~:io:~~red Upon receiving blank Cards and Cardholder applicants’ data from the Issuing Banks, we will commence the data processing Le. to download all the data into the system. For security reasons, the data is transferred in an encrypted format. Our system will convert the encrypted data into the personalisation machine format via the Personalisation Preparation Process System (P3 System). The Card personalisation machine then integrates and incorporates the data into the EMV Card. Personalisation and mailing reports are prepared at this stage and subsequently printed by the Card mailer programme during the final EMV Card mailing process. 6. BUSINESS OVERVIEW (Cont’d) Following the physical personalisation and logical personalisation, the blank Cards will be personalised into an EMV Card. After the blank Cards are personalised, reports are generated which comprise the following: (i) name of the EMV Card-holder;
(ii) EMV Card number;

(iii) expiry date of the EMV Card; (iv) address of the EMV Card-holder; and
(v) credit limit of the EMV Card-holder.

(collectively referred to as the “Information”) Thereafter, the EMV Cards will be placed onto a letter printed by the Card mailer programme (“Letter”). Subsequently, the Information together with the Letter will be verified by different employees of our Group to eliminate errors. In the provision of this service, we assist the Financial Institutions to comply with the processes and security tests as required by Visa International and MasterCard WorldWide in accordance with EMV standards. Our experience in assisting the Financial Institutions to comply with the international financial card issuance standards is a testament of our capability in terms of physical security standards and logical security requirements. As part of our Business Process Outsourcing services, we have assisted EON Bank to obtain the certifications as set out below. Certification Description MasterCard International Certified compliance to MasterCard Physical Security Global Vendor Certification Standards and MasterCard Logical Security Requirements Visa Payment Security Certified compliance to Visa International Security Services (VPSS) Inspection Validation Requirements and Logical Security Validation Certification Requirements Bankcard Personalisation Certified in accordance with Payment Multipurpose Card Center Certificate (pMPC) circuit card personalisation interface specification (MEPS) for A1M! e-Debit application The table below sets out the production capacity and output of our machines: Production  Manufacturer  output  capacity  Utilisation  Machines  (per annum)  (per annum)  rate  NBS Horizon  250,000  4,896,000 I  1,436,160 J  17.41%  Matica ZIO  250,000  3,672,000 2  1,077,120 ‘  23.21%
Notes: Based on manufacturer’s specification of 408,000 pieces ofpersonalised EMV Cards per month operating on the assumption of85% efficiency rale, 25 work days per month, 3 shifts per day and 8 hours per shift. Based on manufacturer’s specification of 306.000 pieces ofpersonalised EMV Cards per month operating on the assumption of85% efficiency rale. 25 work days per month, 3 shifts per day and 8 hours per shift. J Based on EON Bank’s permissible operating hours 0[8 hours per day, 800 Cards per hour. 22 work
days per month and operating on the assumption 0[85% efficiency rate. 4 Based on EON Bank’s permissible operating hours 0[8 hours per day, 600 Cards per hour, 22 work days per month and operating on the assumption 0[85% efficiency rate. 6. BUSINESS OVERVIEW (Conl’d) OUf NBS Horizon machine as disclosed above was purchased in 2004 to meet the estimated demand for the magnetic stripe Card migration to EMV compliant Cards as estimated by EON Bank. During the period between September 2004 and December 2004, our NBS Horizon machine produced 360,000 Cards at an utilisation rate of 37.5% based on two operaling shifts permitted by EON Bank. Inevitably. upon the completion of this Card migration exercise, the utilisation rate of the machine reduced to the current utilisation level as the utilisation requirement is subject to new applieations for Cards issued by EON Bank. Our Matica ZIO machine as disclosed above was purchased in 2007 to meet the SLA requirements as a back-up or fail safe machine as required by EON Bank. This machine is a mid-range production machine. Over the years, we have worked with the following international companies for our Business Process Outsourcing:  Giesecke & Dcvrienl GmbH  A company involves in banknote production and proccssing, smart  (Gcnn.ny)  card solutions for telecommunications and clcctronic paymcnt, and security documents and identification systcm~  Obenhur Card Sy:;tcms SA  A company involves in the field ofsecure technologies  (Spain)  Sagcm Orga Singapore Pte Ltd  A  company  offers  an  innovative  and  complex  combination  of  (Singapore)  memory and microprocessor-based small hardware, systcms and solutions for the !’iectors  cards,  software,  (Source: Companies’ \Vebsile~)
There is no formal collaboration entered into between our Group and these eompanies save for technical eollaboration required to offer Card personalisation serviees to our eustome~. Therefore. our Group is not highly dependent on them in our nature of business. In addition. we have also worked with Card personalisation companies like Matiea PLC and NBS Technologies Inc. to offer complete card personalisation systems to our customers. (e) Software, Security and ICT Services Over the years. there has been increasing utilisation of ICT amongst both large and small businesses aiming 10 enhance their performance levels. The application of ICT has also opened up avenues for business opportunities, as a result of new business-platforms and information-sharing and networking faeilities. Our Group offers leT services to assist business enterprises improve their operations by providing them an integrated payment solution. We provide independent consultation services, from the beginning of a project until its suceessful delivery, with the objective to help our customers identify areas where applying effieient and effective automated payment solutions.
6. BUSINESS OVERVIEW (Cont’d) Figure 5: General process now depicting our Software, Security and ICT services development methodology Project manager
Project team Drawup implementation
Failplan & Understand (4ween to2 yca~)User Requirement Specifications (URS) confirmed (4· 8 week.8)
We have a well-defmed and proven application development process, beginning from business requirements analysis to technology implementation and maintenance services. Upon receiving a purchase order from a customer, we form a project team with a designated project manager. The project manager sets a detailed project implementation plan, beginning with an analysis of our customer’s business needs and requirements (“User Requirement Specifications”). Before implementing the project, the User Requirement Specifications are confirmed with all relevant parties internally and externally; including our Chief Technology Officer and the customer’s technical team. Once confirmed, we commence the project i.e. project roll-out. Upon project completion, a User Acceptance Test (“UAT”) is carried out and once approved by the customer, a sign-off is obtained to indicate acceptance ofthe completed project. We provide end-user training for our customer in order to fully familiarise them with the design and features of the completed projects. Following this, we provide after sales maintenance and support services on a contractual basis to the customers. With our experience and expertise, we are able to provide comprehensive application support, code reviews, fault analysis, docwnentation maintenance and design upgrades. We have several arrangements with rCT solution providers such as Sage Software Sdn Bhd (Malaysia), Microsoft Corporation (United States) and Dinerware Inc. (United States) for our Software, Security and ICT Services. Such arrangements have enabled our Group to support our customers by providing them the best available solution options to implement the projects smoothly. Request for software, security and ICT services received project manager appointed and project team formed .. (1.2weeb) ~——-; User-TrainingAfter-sale I sessionsmaintenance and support services …… •••• (2.4 weeka) (Varfe. from contract ,..:.-=.-‘…..=—-, to contrlu:t) Customers provides sign-off

6. BUSINESS OVERVIEW (Cont’d) On 6 January 20I0, we have executed the following: (i) a teaming agreement with Sage Software Sdn Bhd to collaborate and implement an integrated retail point of sales solution for SMUSMEs retailers in Malaysia; and
(ii) a retail agreement with Sage Software Sdn Bhd to have the rights to sell certain of its software products.

On 18 March 20I0, Sinatec has entered into a Memorandum of Understanding with pas Partners (Asia Pacific) Ply Ltd in regards to the sale and distribution of: (i) Microsoft Dynamics Retail Management System which we have been duly certified by Microsoft; and
(ii) Dinerware pas Solution which we have been duly certified by Dinerware Inc.

The arrangements mentioned above provided our Group with added advantage to offer addition value-added solution to our existing Merchants and/or customers. As at the LPD, save for the business opportunities arising from these collaborations, there is no dependency with the aforementioned parties. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) (iii) Business model Our business model is depicted from the figure below.
Merchants _…………………. Acquisition .•••••••••••••••••
f’ _.-‘1~~’~;;’;9-M;~~9′;P~Y-‘­…. _.————,i .P..yment ServIces Incon’l@10 M:ln3qeP3Y : >One-offpaymem for : •Payment SeNiees · infrastruclure . )-One-offpayment tor i “. Annual maintenance fee infrastructure & [• T.nnrnal.servl.ce~ ~ )0 Sales cornffilS510n ; )0 Morn.hly rentals ; •Loy;dty M3n:lgement -‘~’;’;J ‘i§:Servlcn l )0 Recurring appUcation · hosting lee .MilniUJePiUJ··: :)-Software support fee I )0 Redemption fees .JiqIII………. ~. i .Softw:lre.Security3nd [ • Business Process -.. <“. .-… j leT Services Merch:lnt5. )­
~ Software development f OutsourcIng Acquisition: • & system Inlegration PersonaHsation fee
; >EMVCard ~
~ •Software, Security ..nd i leT Services · :> Software developmenl & 1, system integration service fees i. A •• , ••• ,., ••••• ,-.-._._._._._._._._.­r·’hi~·~~·;;·;~M·~~~~;p~~_·ml i Co-Branded Loy.dty ! ; M”‘ll3gement ServIces ~ )0 Recuning application : hosting fee ~ > Redemplion lees i.. __ ._. ._._._._._. ._._. ._._ t • s~’:’l_c~ !e.~ .•.•.•.•.•.•.• ,•. ~ ,——-,
.——–•••••••••• Agency • Incom_ to M;mi!g_e:lY : M3n:lgers
• ‘AgencyManagemenl

; Program joining fee .-. _._. _. –._._._._. _.~. ; Income 10 Agency M:lni!l.gersi • Sales commission ! • Profll. sharing on terminal : renlal. terminal installalion & l ; mainlenance support fee ~ ~ •• ,••• _._•• _.~._._ ._._._._._._._ •••••••• ,I As a Merchant Service Provider accredited by Card Organisations, namely Visa International and MasterCard WorldWide, our business model is to recruit Merchants by way of Merchant Acquisitions. The recruitment of Merchants is made possible with the External Sales Agent Merchant Recruitment agreement entered between MBB and MPSB and as well as the MArrA Co-branded Card -Management of Loyalty Programme agreement entered between EON Bank and Sinatec which allows our Group to: (i) source and recruit Merchants on behalf of MBB and EON Bank; and
(ii) install EDCPOS Terminals pursuant to the recruitment of the Merchants.

The Merchant Acquisition is done directly or through our Agency Managers that have presence nationwide. Through our host of products and services, we provide the Merchants with our Managed Electronic Payment Solutions that will link process payment transactions made by Cardholders with the Financial Institutions. In addition to that, we also provide value-added services to cater for the growing trend of customer loyalty programmes through collection of points. 6. BUSINESS OVERVIEW (Cont’d) Core revenue streams Our Group’s revenue is generated through various channels namely: Services rendered: (a) Payment Services
(i) recurring monthly software licensing fee; and
(ii) one-off payment for payment infrastructure and software.

 

(b) Terminal Services
(i) recurring monthly terminal rental;
(ii) recurring monthly terminal software support fee; and

(iii) one-off payment for sales commission and installation fee.
(c) Loyalty Management Services
(i) recurring monthly application hosting fee; and
(ii) redemption fees earned.

 

(d) fees from Business Process Outsourcing services.
(e) fees from Software, Security and ICT Services.

The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cant’ d) 6.2 PRINCIPAL MARKETS FOR PRODUCTS AND SERVICES The principal market for our products and services is in Malaysia and our Group services the following customers: (i) Financial Institutions (Ii) Merchants from various industries: • retail
• telecommunications

• healthcare • distributions
• travel and tourism

• food and beverages • public sectors With our distribution network, we have successfully rolled-out our products and services nationwide via both in-house sales team and Agency Managers. As at the LPD, our Group has seven (7) full-time in-house sales personnel and twenty-three (23) Agency Managers which contributed approximately 30% and 15% of the newly recruited Merchants respectively for the FPE 2010. The balance of approximately 55% of the newly recruited Merchants was referred by EON Bank and MBB. 6.3 LOCAnON OF OUR OPERAnONS Our head office is located at Wisma MPSB, Subang Jaya, Selangor Darnl Ehsan. Our R&D centre is located at Cyberjaya, SeIangor DarnI Ehsan. We have also placed our EMV Card Personalisation system at EON Bank’s card centre at Wisma EON Bank, Jalan Raja Laut, Kuala Lumpur. As at the LPD, through our Agency Manager Programme, there are twenty-three (23) Agency Managers located in Polau Pinang, Sungai Petani, Alar Setar, [poh, Petaling Jaya, Shah Alam, Melaka, Johor Bahru, Kota Bahru, Kuching and Kota Kinabalu. Further details regarding our Group’s premises are disclosed in Section 6.6 of this Prospectus. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.4 KEY ACHIEVEMENTS/ MILESTONES/ A WARDS Our key achievements/milestones/awards are as follows: Year  Key AchievementslMilestones/Awards  200 I  • MPSB was granted MSC Status by the Government of Malaysia through MOeC  • MPSB was appointed Nokia Corporate Solution distributor -this distributor agreement is non-exclusive and no longer valid. The last project we benefited from this distributorship arrangement was Ce1com Universal Service Provision (USP) project where we secured the supply, installation and maintenance of 3,000 pieces ofNokia N32 wireless cellular tenninal to East Malaysia  • Sinatec became a Microsoft Certified Partner
2002  MPSB was appointed Hypercom system integrator • -it is a non-exclusive value added reseller agreement to allow us to be the value added reseller in Malaysia  2003  MPSB was awarded MSC Grant Scheme by MOSTI  2004  MPSB was appointed as Sierra Wireless distributor -it is a non-exclusive value added reseller agreement. The appointment has increased our Group’s product portfolio, however, the Sierra Wireless modems were deemed expensive for retail market in Malaysia and thus our Group has not distributed these modems since 2006
2005 • MPSB was awarded by EON Bank to be the NAC system integrator for Cash Advance Automation System for the entire EON Bank branch network • Whatdevice was awarded in-source EMV Card Personalisation Services Agreement by EON Bank
• MPSB received award from MOeC to become the Anchor Project Provider of e­Business Flagship Application for non-ICT SMVSME companies -this project was awarded on non-exclusive basis and has indirectly recognised our Group’s e-commerce capability
• MPSB was awarded in-source EMV Card Personalisation contract by Southern Bank Berhad (now known as CIMB Bank Berhad)
• MPSB was awarded Master Rental Agreement by EON Bank to be the EDCPOS Tenninals supplier for EON Bank

2006 •. MPSB received award from MDeC to become the Anchor Project Provider of e-Business Flagship Application for non-ICT SMVSME companies -this project was awarded on non-exclusive basis and has indirectly recognised our Group’s in e-commerce capability • Sinatec was granted MSC status by the Government of Malaysia through MOeC 2007 • Sinatec was certified as the Microsoft ISV for ERP Business Applications supporting Windows XP, Vista and SQL Server • MPSB was awarded by MBB to be their External Sales Agent for Merchant Acquisition and supply of EDCPOS Tenninals 2008 • Sinatec was selected to participate in the MSC Malaysia OnelSV Progranune organised by MOeC and Microsoft (Malaysia) Sdn Bhd -the inclusion of our Group in this programme initiated by MOeC and Microsoft Malaysia has indirectly given recognition to our Group’s commitment in developing Microsoft certified business application. Sinatec ERP solution was certified by Microsoft as a business application to ‘run on’ SQL Server database platfonn and Windows operating system • Sinatec was appointed to manage and operate MATTA Co-Branded Card by EON Bank 6. BUSINESS OVERVIEW (Cont’d) Year  Key AchievementslMilestoneslAwards  2009  • MPSB launched its Agency Manager Programme and as at 31 December 2009, we  have appointed eleven (II) Agency Managers to establish our sales and services  centres  • Sinatec’s MAlTA Card loyalty management system was a finalist in the ‘Best of  Tourism and Hospitality Application’ category for the Asia Pacific ICT 2009  Award
2010 • MPSB received the letter of award from MDeC dated 15 May 2010 for the Online Service Delivery Platform project, referred to as Malaysia Digital Enterprise Exchange (MDEX) Note: • ManagePay was appointed as Hypercom system integra/or in 2002 /0 introduce the Hypercom 77 EDCPOS range of terminals logether with our product offering to telecommunication industry in Malaysia. In addition, the appointment by Hypercom has aI/awed us 10 utilise our in-house developed MPTUS software together with the EDCPOS Terminals to facilitate online acquisition of digital merchandise. payment transactions (credit, debit. etc.) andprinting 0/coupons and receipts. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.5 MATERIAL CAPITAL EXPENDITURES AND DIVESTITURES Save as disclosed below, there are no other material capital expenditures and divestitures (including interests in other corporations) made by us for the past three (3) FYEs 2007 to 2009 up to the LPD: FYE2007 FYE2008 FYE2009 I January 2010 up to the LPD RM’OOO RM’OOO RM’OOO RM’OOO Expenditures Purchase of plant and equipment 1,846 3,502 1 4,060 2 2,187 3 Purchase of properties Investment properties Total expenditures 1,846 3,502 4,060 2,187
Divestitures Disposal of leasehold land and building Disposal of plant and equipment 398 193 Disposal of investment Disposal of subsidiaries Total divestitures 398 Notes: During the FYE 2008, the Group purchased, amongst others, eLMS software amounting to RMI.25 million. On 28 December 2009, the Group purchased, amongst others, computer software amounting to RM3.64 mil/ion comprising RMl.02 mjl/ion ofSCICAD and RMI.62 million ojadvanced e-commerce portal system respectively. J The plant and equipments purchased during the FPE 2010 include. amongst others, EDCPOS Terminals, molor vehicle and computers and accessories. The above material capital expenditures were financed by term loans, hire purchase and internally generated funds. As at the LPD, we do not have any material capital expenditures and divestitures currently in progress, within or outside Malaysia. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.6 PROPERTY, LAND AND BUILDINGS As at the LPD, there are no property, land and buildings which are owned by our Group. As at the LPD, our Group rents the following properties which are material to our Group’s operations: Total  Description of  Approximate  occupied  building!  age of  Period of  Yearly rental  ares. (square  Location  Owner  Existing Usage  building·  tenancy  Tenants  (RM)  feet)  WismaMPSB  Chew  Three (3)  11 years  3 years  ManagePay  48,000′  4,600  Lot 113  Chee  storey shop  (26.1.2010  Jalan USJ21110  Seng  office!  to  47630  Head office  25.1.2013) I  SubangJaya Selangor  operations  3 years (1.1.2010  MPSB  24,000 ‘  2,300  to  31.12.2012)’  3 years  Sinatec  24,000 ‘  2,300  (1.1.201 0  to  31.12.2012) ,  3 years  Whatdevicc  24,000 ‘  2,300  (1.1.2010  to  31.12.2012) •  Lo19-1 NeD Cyber  Chin Shea  Two (2) storey office block!  2.5 years  3 years (1.1.2009  MPSB  28,800 ‘  1,755  Lingkaran Cyber  Swong  R&D centre  to  Point Barat  31.12.2011)’  63000 Cyberjaya  SeJangor Daml  Ehsan  Lot 11-1 NeD Cyber  NgKim Eng  Two (2) storey office block!  2.5 years  3 years (1.4.2008  Sinalec  28,800 ‘  1,755  Lingkaran Cyber  R&D centre  to  Point Baral  31.3.2011)’  63000 Cyberjaya  Selangor Dam!  Ehsan  Unit 2B  Selia  Four (4) storey  10 years  I year  Sinatec  23,562  357  Block 2330  Hamman  office block!  (1.4.2010  Century Square  SdnBhd  R&D centre  to  63000 Cyberjaya  31.3.2011) 7  Selangor Darnl  Ehsan  Notes:
• The age ofthe building was calculatedfrom the year which certificate offitness ofthe property was issued The aboverentalpropertiesform partofthe recurringrelated partytransactions as disclosed in Section JO. J.2 ofthis Prospectus. ManagePay has entered into a renewable tenancy with Chew Chee Sengfor a period ofthree (3) years commencing on 26 January 2010. ManagePay utilises all three (3) floors ofthe property and is sharing each ofthefloors with the subsidiaries ofManagePay. 6. BUSINESS OVERVIEW (Cont’d) MPSB has entered into a renewable tenancy with Chew Chee Sengfor a period ofthree (3) years commencing on J January 2010. MPSB utilises 011 three (3)floors ofthe property and;s sharing each ofthe floors with the other subsidiaries ofManagePay. Sinatec has entered into a renewable tenancy with Chew Chee Seng for a period of three (3) years commencing on J January 2010. Sinatec utilises all three (3) floors ofthe property and is sharing each ofthe floors with the other subsidiaries ofManagePay. 4 Whatdevice hasenteredintoarenewabletenancy withChewCheeSengforaperiod ofthree (3) years commencing on / January 2010. Who/device utilises all three (3) floors ofthe property and is sharing each ofthe floors with the other subsidiaries ofManagePay. 5 MPSB has entered into a renewable tenancy with Chin Shea Swong for a period of three (3) years commencing on 1 January 2009. MPSB utilises the first (1st) floor ofthe property. 6 Sinatec has entered into a renewable tenancy with Ng Kim Eng for a period ofthree (3) years commencing on 1January 2009. Sinatec utilises the first (l~) floor ofthe property. Sinatec has entered into a renewable tenancy with Setia Hantman Sdn Bhd commencing on 1 Apri/201O. Sinatec utilises the second (2″”) floor ofthe property. The above properties rented by our Group have been issued with the relevant certificate of fitness. As at the LPD, our Group is not in breach of any law, rules and building regulations in relation to the use ofthe property. The abovementioned properties rentcd by our Group are not subject to any regulatory requirement issues which may materially affect our Group’s operations and utilisation of assets. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.7 PLANT AND EQUIPMENT The nature of our business does not require any investment in factories, plants and/or machineries. As at 31 October 2010, our Group’s material plant and equipment for our business operations are set out below: El’peded  Plant  useful  and  life  Capacitiesl  Utilisation  equipment  Loeation  Owner  Description  (yean)  Units  rate (%)  EDCPOS  WismaMPSB  MPSBI  Devices for verifying,  7.5  7.289  62.72 ‘  Terminals  Loti 13  Sinatec  authenticating, capturing  Jalan USJ 21110  Cardholders’  47630 Subang Jays  information, capturing  amounts entered by the  cashiers and relaying  those information for  payment authorisation  SCICAD  WismaMPSB  MPSB  E-business portal comes  20  Computer  n.a  Lot 113  with internet payment  software  Jalan USJ 21/10  gateway, meta directory,  47630 Subang Jaya  search engine and  shopping cart  advanced  WismaMPSB  MPSB  Supply chain and demand  20  Computer  n.a.  e-commerce  Loll13  chain management  software  portal  Jalan USJ 2111 0  system for distribution!  system  47630 Subang Jaya  whole saler! retail  industry  CLMS  WismaMPSB  Sinatec  Points eollection,  20  Computer  n.a.  Lot 113  redemption, gift  software  Jalan USJ 21/10  catalogue and CRM  47630 Subang Jaya  NBS Horizon  EON Bank  Whatdevice  EMV Personalisation  15  17.41 1  Wisma EON Bank  machine complete with  288, Jalan Raja Laut  PersoMastcr and Ubiq P3  50250 Kuala Lumpur  software, key  management system and  card mailcr system  MaticaZlO  EON Bank  Whatdevice  EMV Personalisation  15  23.21 1  Wisma EON Bank  machine complete with  288, Jalan Raja Laut  Oberthur CPS P3  50250 Kuala Lumpur  software, key  management system and  card mailer system
Notes: n.a. Not applicable. I Based on Management’s representation. Refer to Section 6. J(d) ofthis Prospectus for detail computation. Save as disclosed above, none of our machineries and equipment are individually material to disclose separately. Our Board is of the opinion that our Group has sufficient capacity to meet the current demand. As for the anticipated demand, we have proposed to utilise RMl.071 million from the Public Issue proceeds for working capital purposes to ensure that our Group’s operations run smoothly. Net book value RM’OOO 3,148 1,852 1,485 938 795 247 6. BUSINESS OVERVIEW (Cont’d) 6.8 REGULATORY REQUIREMENT AND ENVIRONMENTAL ISSUE Save for the approvals/ licenses required for our Group’s operations as set out in Section 6.16 of this Prospectus, there are no other regulatory requirements which may affect our Group’s operations or utilisation of assets. As at the LPD, there are no environmental issues which may affect our Group’s operations or utilisation of assets. 6.9 MATERIAL PLANS TO CONSTRUCT, EXPAND OR IMPROVE FACILITIES Save as disclosed in Section 6.23 of this Prospectus in relation to future expansion plan of our office space to cater for training and development of our Agency Manager Programme, as at the LPD, our Group has no immediate plans to construct, expand or improve on existing facilities. 6.10 SEASONALITY We do not experience any material seasonality in our business which may affect the sales of our products and services, as our business operations are relatively stable throughout the year and we have been proactively widening our customer base nationwide. 6.11 COMPETITIVE STRENGTHS AND ADVANTAGES Our Group’s key competitive strengths and advantages are as follows; (i) Market reputation We have been in the Malaysian market for more than a decade. Over the years, we have evolved from a small software systems developer and provider, to become a provider of the Electronic Payment Solutions industry in Malaysia. In the Electronic Payment Solution industry, all vendors that provide solutions (either end-to-end or otherwise) in Electronic Payments are taken into consideration, we held approximately 4.5% of the Electronic Payment Solutions industry in Malaysia in 2009 while all other players combined accounted for the remaining 95.5%. Our products and services benefit any organisation that requires their payment systems to be managed. Such organisations include retail outlets, multinational corporations, Financial Institutions and government agencies. (il) End-to-end products and services As a Managed Electronic Payment Solutions provider, we possess the ability to offer the following solutions which would comprise the following: (i) rental ofEDCPOS Terminals;
(ii) Payment Services;

(iii) Loyalty Management Services; (iv) Business Process Outsourcing (i.e. EMV Cards Personalisation); and
(v) provision of Software, Security and ICT Services.

Ultimately, we have the ability to provide quality products and services from the front-end to the back-end ofthe Electronic Payment Solutions industry value chain. 6. BUSINESS OVERVIEW (Cont’d) (iii) Competitive cost structure Our products and services have the competitive cost structure as we use mostly internally developed products such as POSConnect, ISO Manager, SCICAD, advance e-commerce portal system, MPTUS, CLMS, card mailer program, Sinatee ERP, Sinatee CRM and Sinatee POS and as well as products from our partoers (such as the Microsoft Dynamics Retail Management System and Dinerware POS Solution) with minimum royalty fees imposed. As the developer of our in-house products, we are not subjected to any mark-up requirement to accommodate licensing fees charged by third party developer. As such, we have the flexibility to remain competitive in our cost structure. With regards to the exclusive marketing rights secured with alliances on a minimum licensing fees has provided us with sufficient profit margin as compared to similar solution offered by competitors. If required, we have the capability to customise the solutions using our in-house personnel to remain cost competitive. This augurs well with us as on 18 March 2010, we have executed a Memorandum of Understanding with POS Partoers (Asia Pacific) Pty Ltd to market Microsoft Dynamics Retail Management System and Dinerware POS Solution in Malaysia and Brunei. In addition, our own intellectual property developed as the result of our R&D activities where our Group is the sole beneficiary of the intellectual property would provide our Group with high margin and to be marketed without any restrictions. (iv) Technology know-how and ICT capabilities We have a team of capable ICT professionals in our Group that specialises in Software, Security and ICT services. Our skilled professionals are well trained and qualified in programming languages such as C/C++, .NET and Java on various platforms for both software development and maintenance activities. We have a well-defined and proven application development process, beginning from business requirements analysis to technology implementation and maintenance services. Our products and services facilitate payment processing for the purchase of goods and services offered by our customers in a secure environment. In addition to providing technological products, we adopt a pro-active and holistic approach and focus on delivering quantifiable results to our customers. Throughout the infrastructure design and application customisation process, we focus on our customers’ long tenn requirements for infrastructure, database) payment transaction requirements and networking facilities as well as identitY scalable solutions which can be implemented within the framework of our customers’ existing information technology environment. (v) Emphasis on quality assurance We believe that product quality is the key for our continued growth and success, and our track record of providing quality products and services have allowed us to build a strong reputation with our customers. We have implemented a stringent quality control program thai encompasses our entire operational process, from R&D, sales to after~sales service. Our Group’s quality assurance practices are designed to ensure that our business processes are in line with the stringent terms and conditions set by the Acquiring Bank, ISSUing Bank, Card Organisations and regulatory authorities. 6. BUSINESS OVERVIEW (Cont’d) (vi) Wide user base and established long-term relationships In the FPE 2010, we have approximately 4,572 EDCPOS Terminal units. We have been intentionally diversifying our user base, in order to establish long-term relationships with a larger group of users. Having a wide base of users allows us to leverage on their continued growth, whilst reducing the risk of our revenue being adversely affected should any ofour users discontinue or reduce their orders. We have enjoyed ongoing relationships with certain Financial Institutions and telecommunication customers since 2004 to meet the estimated demand for the magnetic stripe card migration to EMV compliant. These ongoing relationships have enabled us to develop a good understanding of our customers’ business requirements and expectations which serve as a strong foundation for the same over the long-term. (vii) Alliances with industry players In our endeavour to provide high-quality products and services to meet our clients’ diverse needs and requirements, we have over the years formed various alliances with some of the established companies in the field of EDCPOS Terminals, EMV Card Personalisation and ICT services. For example, we source our EDCPOS Terminals from Hypercom, while our alliances in the area of smart Cards would include companies such as Oberthur Card Systems SA and Sagem Orga Singapore Pte Ltd. We have also an ongoing working relationship with Matica P1c and NBS Technologies Inc. to offer complete EMV Card Personalisation services. (viii) Experienced management team with proven track record We are led by an experienced, dedicated and dynamic management team spearheaded by our Managing Director and Chief Executive Officer, Chew Chee Seng. He founded our Group in year 2000 and has over a decade of experience in the field ofICT and in the Electronic Payment Solutions industry. His experience, drive, passion and vision have been instrumental to our Group’s success. He is supported by an experienced and committed management team, capable in all critical areas of our business from R&D, sales and marketing to customer support services. We believe that the knowledge and experience of our management team will play a pivotal role in the continued growth and development of our Group in the Electronic Payment Solutions industry in Malaysia. 6.12 TYPES, SOURCES AND AVAILABILITY OF RAW MATERIALS/ INPUTS As the operations of our Group are mainly derived from services performed, there are no raw materials/inputs purchased by our Group. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.13 TECHNOLOGY USED We employ technologies that are essential in establishing safe connectivity environment between the Host Application Server and transaction points. We have a team of skilled ICT professionals in our Group that are well trained and qualified in programming languages such as C1C++, .NET (C#, VB.net, ASP.net) and Java (JSP, Java Servlet Engine, Java Foundation Classes, Java on various platforms). Our applications are developed on Apache Tomcat Servlet Engine, an open source software platform to implement Java Servlet and Java Server Pages technologies. For web applications we use Java Server Pages technology which provides a simplified, fast way to create dynamic web content. Java Server Pages technology also enables rapid development of web-based applications that are server and platform·independent. For Our database, we employ Microsoft SQL Server 2008 which is a relational model database server by Microsoft Corporation. The technologies we used products can be divided into two categories which are as follows: (i) technology for security and identification; and
(ii) technology that allow Host Application Server to communicate amongst themselves and the transaction points. .

Technology for security and identification For our Payment Services, in ensuring secure payment transactions from the Cardholders to the Host Application Server and back to the Merchants, we use EMV Cards. The Cards contain embedded microprocessors encoded with security credentials. These credentials are encrypted by encryption algorithms such as DES, Triple-DES and RSA. These security features prevent Card cloning and impervious to access by unauthorised parties, one of the common ways magnetic stripe Cards are compromised and used for fraudulent activity. Technology that allow EDCPOS Terminals and Host Application Servers to communicate with each other We employ the standard IS08583 as our language format which is a standardised communication language to be used in the financial systems. The IS08583 messages are encrypted with Triple-DES. It also dermes system-to-system messages for secure key exchanges, reconciliation of totals, and other administrative purposes. These applications are among the most commonly used by our Group. However, other proprietary and commercially available software tools and programs are also utilised when needed. In ensuring smooth communication channelling within the network, we had developed several in-house middleware technology solutions that connects the EDCPOS Terminals and non­terminals interface with the Host Application Server. In the event there are differences in the messaging formats, our middleware application solutions are able to decipher and translate the information transacted. Also, our middleware applications offer interoperability between different operating systems. Examples of our middleware applications are: (i) ISO Manager: An IS08583 Payment Gateway Solution which has pluggable components that integrate third party business applications with Financial Institutions’ banking applications; and
(ii) POS Connect: A payment solution that is integrated into a third party point of sales system.

6. BUSINESS OVERVIEW (Cant’d) 6.14 QUALITY CONTROL We believe that product quality is the key for continued growth and success, and our track record of providing quality products and services has allowed us to build strong reputation with our customers. Being a technology solutions provider, we will continue to place great emphasis on quality assurance and control. Our quality assurance team is headed by our Chief Technology Officer who is responsible for formulating and implementing our quality control policies. In addition to the internal quality control processes below to ensure quality products and services, our Group is also subjected to annual vulnerability scans and onsite review audits by the Financial Institutions’ internal auditors. Vulnerability scan is an audit process to test security weaknesses in a computer or network by using known security attacks or exploits in a controlled manner. Although the audits are scheduled annually, special audit exercises will also be conducted where there are material changes to the business process. The focus of the audit exercise is on our Payment Services, Terminal Services, Loyalty Management Services and Business Process Outsourcing. Our internal quality control policy is embedded in our standard operating methodology which includes the following: (i) Payment Services! Software, Security and ICT Services We have a structured project management process which is as depicted in the diagram below. For our Payment Services and Software, Security and lCT Services related deliverables, we will form a project team that will undertake the execution of the project in fulfilling customers’ orders. Our sales managers will submit all purchase orders received from customers to our Chief Technology Officer who will evaluate the requirements. He will then appoint a project manager to oversee the project team. From thereon, the project manager will be accountable in ensuring that the quality control processes are adhered to which include seeking key users’ agreements on the design and specificatioos, product testing, bug testing and quality checking. The assigned project managers shall be responsible in delivering high quality products and services. This is as depicted by the darkened boxes in the diagram below. As shown in the diagram, before the project team is able to proceed to the next stage of the process, customers/users will be consulted and their sign-offs will be procured. This is to ensure that both parties will have the same understanding on the deliverables and expectations are met. The responsibilities towards the products extend beyond final delivery as we also provide after~sales maintenance services. Our general process flowchart on project management of lCT related product and services deliverables is set out in the diagram below. The rest ofthis page is intentionally left blank ICompany No,: 887689-0 I 6. BUSINESS OVERVIEW (Cont’d)
7
Sales manager ObtaIn purchase orderfrom customer CustomerPo eTO Form a project team and appolntProject Manager
Project Manager 8ase on proposal, 10 planthe implementation phases, sChedule, & resources Project r..,lanagementPlan

System analyst Iden~fythe functions. feature,& processes required & design the solutrons Functional Spec (FS) ” i”if~-:)i~}~~ ProjedManager& core team Provide support & maintenanceto system/application ProJedManager& core team Deploy system I application at operational sites Production system
>~,,~. . Obtain URS’signoff from stakeholders Obtain UAT signoffrom business users  f  ‘UATsfgn,off .-documerit·  “‘.
ProjectManager  Conduct user training, plan for project rollout  RolloutpJan

Project Manager Assigntasksto developers 76 6. BUSINESS OVERVIEW (Cont’d) (ii) Terminal Services For Terminal Services, we have a well-defmed standard operating procedure for deployment of EDCPOS Terminals. We strive to ensure zero error in all terminal profile setups, provide timely delivery and meet customers’ expectations. In order to have all information documented, our employees are required to fill in installation forms and Flow Check Lists (“FCL”). This is to ensure that we systematically adhere to all relevant requirements and information on every process flow is properly documented. The diagram below sets out our EDCPOS Terminals installation standard operating procedure. The darkened hoxes in the diagram illustrate our quality control and assurance policies in ensuring that the EDCPOS Terminals are duly delivered as per customers’ installation requests. Our general process flowchart on Terminal Services deliverables is set out in the diagram below. The rest ojthis page is intentionally left blank ICompany No.: 887689-D I 6. BUSINESS OVERVIEW (Cont’d)
—0-. Yes ~ Packing of EDCPOS No Terminals for delivery and InstallatIonsDeployed?
InstallatIon Form .~”-!,~~~;.;;.!z?”~
<:ii’ ‘,c, ,,;,,;,'<;;””””)i’,””’,W'<i’.iI””~~ 78
6. BUSINESS OVERVIEW (Cont’d) (iii) Business Process Outsourcing Upon receiving orders from customers, we will request for a written report that will detail out the specifications and number of Cards required. Next, the Cards are sent to the vault controller where they are retrieved, and the Card type is verified and the Cards are counted. Each batch of personalised Cards are visually checked and inspected. The four items to be verified include: (a) all Cards and consumables are prepared accordingly to the details logged in the system;
(b) Cardissuer,Cardtypes,number ofCardspersonalised,andnumber ofCardsrejected;
(c) balance consumables; and
(d) blank Card balance in the vault inventory.

When the above items have been checked and satisfied, a quality control report is produced and entered into a quality control audit trail system for record purposes. After the printing process, the Cards are sent to a system operator, where quality checks take place. Rejected Cards are eliminated from the system and new Cards are personalised as replacements for the rejected Cards. Cards that pass the quality check will be passed on to the mailing process, where a packing team carries out a final check on the personalised Cards to assess the surface quality and Card details. The packing team will also check the numbers and Card type against the quality control report. 6.15 MODES OF MARKETING AND DISTRIBUTIONS We have adopted a structured sales and marketing strategy to reinforce our vision to be the trusted Managed Electronic Payment Solutions provider. The following sets out our marketing strategy approach: (i) Sales and distribution The main objective of our sales team is to source for new customers and strengthen our existing customer relationship. Our sales team comprises three (3) tearns mainly in-house sales tearn and Agency Managers whereas the outsourced teams are engaged on ad-hoc basis and as and when required depending on our Group’s installation requirements. (a) In-house sales team Our in-house sales team comprises corporate sales and direct sales team based at our head office. • Corporate sales The corporate sales team focuses on key clients i.e. large retail corporations. • Direct sales Direct sales tearn concentrates on door-to-door sales strategy and our target market is the small retailers. (b) Agency Managers We have developed a sales programme called Agency Managers Programme. Agency Managers are our agents who are responsible in carrying out marketing and distribution of our products and services throughout Malaysia. They are business owners who have subscribed to the Agency Managers Programme to market our products and services. Currently, our Agency Managers have presence in eleven (11) locations as set out in the map below. 6. BUSINESS OVERVIEW (Cont’d)
In order to ensure our distribution network is successful, each Agency Manager will undergo a formal training and development programme, before receiving certification by our Group. The areas of focus will include understanding of our Group’s products and services, knowledge of target markets, development of soft skills, and technical knowledge. This is to ensure that they are well-versed on all sales, support and technical areas. The salient terms of our Agency Manager Programme agreement are set out below: (i) the Agency Manager desires to make use of the name “MPSB” and to enjoy the commercial benefits of the merchandising system and operating services related thereto; (ii) the Agency Manager has the right to use MPSB’s procedures, methods and techniques in the operation of a “MPSB” sales agency office; (iii) the Agency Manager acknowledges that the name, “MPSB”, is a valid service and/or trademark owned by MPSB, and that only MPSB and its designated agents have the right to use sueh trademark; (Iv) in order to protect the reputation and goodwill associated with the mark, “MPSB”, and to maintain the uniform standards of operation there under, the Agency Manager shall conduct its “MPSB” sales agency in strict accordance with MPSB’s operating manual; (v) the Agency Manager agrees to dispense, sell, or offer for sale to the public, only such services as shall meet the reasonable specifications and standards from time to time designated in writing by MPSB;
(vi) the Agency Manager, or its designated manager, shall devote all the time, energy and effort reasonably required for the management and operation of the “MPSB”

business; (vii) the Agency Manger shall not, either directly or indirectly, for itself or on behalf of or in conjunction with any person, persons, partnership or corporation, own. maintain, engage in, participate or have any interest in the operation of other directly competing business; and 80 6. BUSINESS OVERVIEW (Cont’d) (viii) the Agency Manager covenants that during the term of the agency agreement, and for a period of two (2) years thereafter, regardless of the cause of termination, the Agency Manager shall not, amongst others; (a) divert, or attempt to divert, any business of, or any customer of, the “MPSB” business to any other competitive establishment, by direct or indirect inducement or otherwise; and (b) employ, seek to employ, any person employed by MPSB, or other person who is at the time operating or employed by or at any other “MPSB” business, or otherwise directly or indirectly induce such persons to leave their employment therewith. (c) Outsourced team Prior to deploying Agency Manager Programme to address regional sales and support service level to Merchants located nationwide, we engaged two (2) outsourced teams to install and support Merchants outside Klang Valley namely EIS Services (M) Sdn Bhd and Nera (Malaysia) Sdn Bhd. As at the LPD, our outsourced team has a total of nineteen (19) support sites nationwide. (ii) Sales and distribution strategy Our sales model of having in-house sales team, Agency Managers and outsourced team, enable us to have wide geographical presence. The in-house sales team and Agency Managers work closely with our customers to attain better understanding of their business requirements, which in turn serve as valuable feedback for us to make continuous improvements to our products and services whereas our outsourced team is deployed to install and support Merchants on an ad-hoc basis. Our in-house sales team and Agency Managers will visit our customers’ on a regular basis. They are responsible for our business development and are trained to provide technical support to our customers. Our sales and distribution strategy has enabled us to keep abreast of domestic and international market trends, as our sales and marketing teams are also tasked to monitor key market dynamics, including understanding and analysing our competitors’ products and services, and pricing strategies. This serves as market intelligence for our management and R&D team, as we strive to continuously develop new products and services to suit the localised markets. Through these three (3) teams, we have managed to efficiently and effectively carry out sales and distribution activity as we are able to maintain a reasonable cost structure while achieving high level of customer satisfaction through our marketing activities and reliable technical support. Ultimately, our in-house sales team and Agency Managers will enable us to achieve the following; (a) improve existing customer relationships resulting in an increased customer retention; (b) better understanding of our customers’ needs; and
(c) identify new market opportunities and potential customers.

6. BUSINESS OVERVIEW (Cont’d) (iii) Marketing Our Group has adopted a structured marketing strategy. The following sets out our markeling approach: (a) Product differentiation We view product differentialion as an importanl aspecl of our marketing strategy and we continuously strive to offer tailored products and services to meet our customers’ needs and requirements. In order to be different, we ensure an on-going commitmenl to provide high quality and reliable products and services. Our range of products and services are modular in nature and are easily modified and expanded 10 be packaged with other complementary products to provide a seamless payment transaclion. Another point of differentiation is our ability to support our diverse customer base. We serve both large corporations and SMIISMEs. Arising from these experiences and knowledge from servicing our diverse customer base, we are able to assemble our products and services to suit the environment of these customers. (b) Cnstomer retention strategy We have a customer relalionship strategy where our in-house sales team and Agency Managers will regularly conduct marketing activities such as products and services updates, technical presentations, free consultancy on design and software issues. We also provide maintenance and after-sales services to our customers as our on-going effort to relain our customers. In addition to that, our R&D staffs are also involved in resolving technical issues and providing technical input as part of our cuslomer retention strategy. (c) Branding strategy We strive to develop ‘ManagePay’ as the brand of our Group. As such, we have instilled in our employees and Agency Managers our commitment towards delivering high quality products and services. Pursuant to our lPO, we aim to communicate to the market and position ManagePay more aggressively in Malaysia by providing training materials, product samples, marketing materials, and advertisement and promotional activities which carries our brand name through/to our in-house sales team and Agency Managers. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) (d) Advertisement and promotional activities Our advertisement and promotional activities are as follows: • Above-the-line promotion Our promotional activities will be carried out through both printed and electronic media. Advertisement will be placed on banners and billboards at strategic locations. We will embark also on internet based marketing by sending out email broadcasts and place advertising banners on social networking websites, online news portals as well as our own websites such as: (i) http://www.mpsb.net; (ii) http://www.sinatec.com.my; (iii) http://www.whatdevice.com; (iv) http://www.eAsiaMall.com; (v) http://www.eAsia2u.com. (vi) http://www.mdex.my; (vii) http://www.buymalaysia.com; (viii) http://www.mpay.com.my; and (ix) http://www.mpay.my. In addition to that, we will also use the conventional mode ofusing leaflet hand-outs brochures and flyers. • Below-the-line promotion Apart from using media related strategy, we acknowledge that word of mouth strategy is equally important. We have embarked on the following below-the-line promotional strategy: (i) direct selling via our in-house sales tearn and Agency Managers;
(ii) participating in major industry exhibitions, tradeshows, pubIicily events and actively execute various public relations campaigns; and

(iii) collaborating with the industry and professional associations. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.16 ApPROVALS, MAJOR LICENCES AND PERMITS OBTAINED As at the LPD, save as disclosed below, there is no requirement for our Group to obtain special operating license from any specified legislative or regulatory bodies. The details ofapprovals and licences granted to or held by us are as follows:
Authorities  Main  Date of  Type of businessl  conditions  Status of  Company  issuance  Date of expiry  activity approved  imposed  compliance  Majlis  MPSB  19  31 December  Kedai  Perbandaran  January  2011  komputer/peralatan  Subang Jaya  2011  komputer  MDeC  MPSB  30 April  • Pioneer status  Certification of Pioneer  Note (i)  Complied.  2001  (100%  tax  Status for the following  Note (ii)  exemption for  qualifying activities:  up to 10 years  1. Software  services  ­ i.e.  30  April  design,  development  2011)  and  implementation  of B2B  e-commerce  products  and  services.  2. E-commerce  service  provider via ASP and  software rental model  -service provider of  B2B  marketplace,  B2B exchanges  and  portal.  3. R&D of advanced e­ commerce solutions ­ e.g.  electronic  payment modules via  EftPOS  (Point  of  Sales),  advertising,  loyalty programs and  e-couponing  into  POS terminals.  MDcC  Sinatec  7 November· Pioneer  status  Certification of Pioneer  Note (iii)  Complied.  2006  (IOO%  tax  Status for the following  Note (iv)  exemption  for  qualifying activities:  the  first  5  1. Research,  years)  development  and  commercialisation of  the  following  products:  (i)  Sinatee  ERP  express; and  (ii)  Sin.tee  ERP  enterprise.  2. Establish and operate  a  shared  services!  outsourcing centre to  undertake IT services  that  entails software  customisation  and  implementation,  application  hosting,  software support and  maintenance.
6. BUSINESS OVERVIEW (Cont’d) Nole (i): (a) Locate the MSC status company’s headquarters and principal place of business and/or the opera/ion0/theMSCqualifyingactivities to Cyberjaya by October200I;
(b) Ensure that at all times at least J5% a/the total number ofemployees (excluding support staff) ofthe MSC slalus company shall be “knowledge workers” (as defined by MDeC);

fe) Continuously comply with the MSC’s environmental guidelines as determined by MDeC from time to time; (d) Submit to MDeC a cOpY ofthe company’s annual report and audited statements in parallel with submission to the Registrar a/Companies; and
(e) Comply with 01/ such statutory. regulatory and/or Ucensing requirements as may be applicable.

Nole (ii): On 4 February 2010, our management has written to MDeC to notify the change ofthe equity structure arisingfrom our lPo. Nole (iii): (a) Locate the implementation and operation ofthe MSC qualifying activities in a designated zone in Cybetjaya with a minimum office space of 1,800 sq ft, within six (6) months from 7 November 2006. The MSC Malaysia status company shall obtain MDeC’s prior written approval in the event ofany changes in the location or address ofthe company;
(b) Ensure that at all times at least 15% ofthe total number ofemployees (excluding support stafj) oflhe MSC Malaysia slalus company shall be “knowledge workers” (as defined by MDeC);
(c) Ensure that any products produced pursuant to the MSC qualifying activities are original. and that no part or portion of such product is an infringement or violation of any intellectual property or any proprietary rights of any third party, or constitutes a misappropriation of know-how belonging to any thirdparty;
(d) Submit to MDeC a copy of the MSC Malaysia status company’s annual report and audited statements in parallel with submission to the Companies Commission ofMalaysia;
(e) Ensure that all information and/or documents furnished by the MSC Malaysia status company to MDeC or any other authority or agency do not contain any [alse, untrue or inaccurate statements or omit to state any facts. the omission ofwhich would make any statements made therein in the light ofthe circumstances under which they are made, misleading;
(j) Inform and obtain the prior approval of MDeC for any proposed change in the name of the MSC Malaysia status company;
(g) Inform MDeC ofany change in the equity structure or shareholding structure ofthe MSC Malaysia status company, or such other changes that may affect the direction or operation of the MSC Malaysia status company. MDeC must be informed ofany change before steps are taken to effect such change; and
(h) Comply with all such statutory. regulatory and/or licensing requirements as may be applicable. including but not limited to the Transfer Pricing Guidelines issued by the Inland Revenue Board ofMalaysia on 2 July 2003. and such other amendments as may be applicable from time to time.

Nole (iv): On 4 February 2010, our management has written to MDeC to notify the change ofthe equity structure arisingfrom our IPo. On 5 April 2010, Sinatec has received a letter from MDeC stating that they have submitted the relevant applications made by Sinatec to MITI for its determination of the effective date for the commencement of pioneer status. On 23 June 2010; Mrrl vide its letter on even date granted Sinatec the commencement of its effective date for its pioneer status shall be on 7 November 2006. 6. BUSINESS OVERVIEW (Cant’d) 6.17 BRAND NAMES, PATENTS, TRADEMARKS, LICENCES, TECHNICAL ASSISTANCE AGREEMENTS, FRANCHISES AND OTHER INTELLECTUAL PROPERTY RIGHTS Our products and services are marketed under various brand names. As at the LPD, we have submitted an application to register the following marks and/or device with the Intellectual Property Corporation of Malaysia: The lists of our trademarks and corresponding proprietary technology description, where applicable, are set out below: No. Trademarks Application Application Company Class Description date number 9 February 2010002402 ManagePay 9 Company logo .. 2010 MtIDilqePillj “~lt· Dolilwehllttil •••G.UI’tII 2. 9 February 2010002396 MPSB 9 PaymentFasConnf”d. 2010 middleware that integrates into third party’s point of sales system to expedite transaetion time and reduce errors at lower costs 9 February 2010002397 MPSB 9 Host-to-host 2010 IS08583 payment gateway solution for integrating non­bank Host Application Server with CreditlDebit Cards Host Application Servers used by Financial Institutions 9 February 2010002400 Sinatec 9 A loyalty 2010 management system to support cash back. discount, and point accumulation to maintain and enhance customer retention
5. 9 February 2010002398 MPSB 9 Business-to-business­2010 to-consumereAsia2u KEY TO GLOBAL SUCCESS (B2B2C) selling and buying platform 6. 9 February 2010002399 MPSB 9 Company logo ~,…~.20101BIf?r MPSB 7. …………… 9 February 2010002401 Sinatec 9 Company logo 2010Sinillec Making Wave in loyalty

 

6. BUSINESS OVERVIEW (Cont’d) Note: Class 9: Cards (Encoded-) magnetic, Computer operating programs recorded, Computer peripheral devices. Computer programmes [programs] recorded; Computer programs [downloadable software}, Computer software [recorded], Encoded cards magnetic, Encoders (magnetic-); Magnetic data media. Magnetic encoders. Readers [data processing equipment]; all included in Class 9. The aforesaid applications are still pending registration. Our Group has also registered the following domain names which we use in connection with our business: (i) http://www.mpsb.net;
(ii) http://www.sinatec.com.my;

(iii) http://www.whatdevice.com; (iv) http://www.eAsiaMall.com;
(v) http://www.eAsia2u.com;
(vi) http://www.mdex.my;

(vii) http://www.buymalaysia.com; (viii) http://www.mpay.com.my; and (ix) http://www.mpay.my. Save for the company logos of MPSB and Sinatec as disclosed above, there is no other trademarks used for our Group’s business with EON Bank. The trademarks for our products such as POSConnect, ISO Manager, CLMS and eAsia2u are used as marketing tool for identification, branding and product recognition purposes. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.18 DEPENDENCY ON PATENTS, INTELLECTUAL PROPERTY RIGHTS, LICENCES, INDUSTRIAL, COMMERCIAL OR FINANCIAL CONTRACTS (i) Dependency on patents and intellectual property rights
Save for the proprietary software and brand names owned by us, our Group is not dependent on any patents or intellectual property rights for our business operations.
(ii) Dependency on major licences

Save as disclosed in Section 6.16 of this Prospectus, our Group is not dependent on any other major licences, pennits and registrations for our business operations. (iii) Dependency on commercial and financial contracts Save as disclosed below, our Group is not dependent on any material contracts or agreements that are subsisting and which our Group is highly dependent on. All three (3) contracts entered into by our Group with EON Bank are non-exclusive in nature. Transacted Subsidiaries: parties: Nature contracts! Scope of work: MPSB EON Bank • Master Rental Agreement dated I April 2005 unless otherwise terminated by either party due to breaches or non-compliance with the agreement MPSB had agreed to rent to EON Bank terminals, computer hardware. software and other products as described in the letter of deployment of each rental agreement (“Equipment”), install the Equipment at the location more specifically specified in each of the rental agreement and to provide maintenance services in relation to the rented Equipment. Each leuer of deployment will fonn a separate rental agreement of the Equipment for the rental tenn commencing on the date of the acceptance certificate. Whatdevice EON Bank • EMV Card Personalisation Services Agreement dated 1 August 2009 and expiring on 31 July 2011 Whatdevice has the necessary expertise in various compliaIlt cards technology and card personalisation systems. Pursuant to the EMV Card Personalisation Services Agreement, Whatdevice had agreed to provide outsourced personalisation services to EON Bank namely the loading of a non-personalised EMV Smart Chip Credit Cards for MasterCard and Visa issuance with the cardholder’s data and details within the EMV parameters, prior to issuance of the personalised EMV Cards and also the card packaging services. Whatdevice shall also provide or procure the provision of all materials, equipment, facilities, software and expertise, personnel, supervision and other services and all other things required as necessary for the satisfactory perfonnance and completion of the services and issuance of the personalised EMV Cards. 6. BUSINESS OVERVIEW (Cont’d) Transacted Subsidiaries: parties: Nature contractsl Scope of work:
Sinatec EON Bank MPSB MBB MPSB Hypercom • MATTA Co·branded card -Management of Loyalty Programme Agreement dated 15 January 2008 unless otherwise terminated by either party due to breaches or non-compliance with the agreement EON Bank has appointed Sinatec to manage and operate the co-branded Card namely a Credit or prepaid Card which allows the Cardholders to earn loyalty points and to obtain discounts. rebates or other privileges offered by EON Bank, any Merchant affiliated to EON Bank and MAITA loyalty programme. • External Sales Agent Merchant Recruitment Agreement dated 7 August 2007 between Multimedia Prospect Sdn Bhd (“Agent”) and MBB • External Sales Agent Merchant Recruitment Agreement dated 15 September 2009 between Multimedia Prospect Sdn Bhd (“Agent”) and MBB expiring on 14 September 2011 MBB has appointed the Agent to source and recruit interested parties to participate in its Card acceptance program in accordance with the selection criteria determined by MBB whereby the Agent shall install the required EDCPOS Terminal(s) at the said parties’ outlets to enable payments by way of a charge. credit and/or debit Card. • Ice Value Added Reseller Agreement dated 14 August 2002 (UAgreement”) between Multimedia Prospect Sdn Bhd and Hypereom U.S.A., Inc. (“Hypereom”) for a term of one year from the date of Hypercom’s authorized signature in the Agreement.
• The Agreement shall be automatically renewed for successive one-year terms until either party gives the other a termination notice pursuant to the Agreement.

Hypereom has agreed to sell and MPSB has agreed to purchase the tenninaI products as indentified in the Agreement (“Prod nets”). Hypereom further grants to WSB a non-exclusive. non-transferable licence (a) to use and copy (only as necessary) specifications from which WSB may create softwarc interface drivers to interface Products with other products sold and/or supported by WSB such as enhanced product; and (b) to sublicense such Interface solely in object code fonnat. and only as incorporated in enhanced product, to end users. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.19 R&D R&D policy Our R&D policy is to improve overall innovation system performance. As a Managed Electronic Payment Solutions provider, it is our policy to keep abreast of the latest technologies in the market. We believe that R&D is a vital component. Since we fIrst commenced operations in year 2000, R&D has always been an integral part of our business. As payment trends continue to evolve and competition in the market intensifIes, there is a constant need for improvement and invention of advanced and innovative technologies to meet the market demand. R&D objectives Keeping abreast with the development of market dynamics and regulatory changes is imperative. We strive to further develop and enhance the features our products and services to meet the following R&D objectives to: (a) ensure secure payment transactions across the payment network;
(b) continuously upgrade, comply and be certifIed by the Card Organisations;
(c) increase customer satisfaction;
(d) build competitive advantage to distinguish us from our competitors; and
(e) sustain and grow our business.

Areas of R&D focus Our R&D spans a set of tasks including, design, specifIcation, code development, testing, and documentation and conceptualisation. Historically, we focused on software outsourcing projects primarily in the areas of development and customisation based on the specifIcations set by our customers. Since then, we have evolved from a software house to a build-operate­own business model where our R&D personnel are involved with in all stages of our R&D activities. Our R&D team is grouped into two (2) primary areas of focus: (i) Product development Our product development team focuses on front-end applications, middleware and back office applications. They concentrate on developing new products and improving existing products. Our applied research encompasses research on product design and prototyping of new products or systems, and eventually study on the initial conceptualisation. They are also required to understand and enumerate the relevant requirements, translate those specifications into instructions for the computer, testing to make sure the specifIcations and their translation are correct, and documenting and maintaining this “program” as the users request for modifIcations. The team needs to conduct continuous study to modify our products to accommodate different languages, different practices, and choice of hardware adopted by our array of customers. 6. BUSINESS OVERVIEW (Coot’d) Details of our product development or enhancements are set out below: Applieations Front End Application  Produets (i) Card mailer programme (ii) Sinatec pas  Timeframe for eompletion By 2″ quarter 2012 By 2″‘ quarter 2012  Middleware Application  (i) (ii)  POSConnect ISO Manager  By 2″‘ quarter 2012 By 2″‘ quarter 20 II  Back Office Application  (i) (ii) (iii) (iv) (v) (vi)  Advance e-commerce portal sysMPTUS CLMS Sinatec ERP Sinatec CRM SCICAD  tem By 2″‘ quarter 20 12 By 2″‘ quarter 2012 By 2″‘ quarter 2012 By 2″‘ quarter 20 12 By 2″” quarter 20 II By 2″‘ quarter 2012  Note:
Save for the development of Sinatec CRM as a new product, the other R&D activities are for the enhancement ofour existing products as menlioned in the table above. (ii) Teehnology development The technology development tearn concentrates on software engineering, system analysis, and software development. They explore and research new payment related ideas and technologies specifieally the interoperability between EMV Cards and EDCPOS Tenninals. They also need to research and study on possible conversion of existing systems and development to newly developed systems. R&D eapabilities As at the LPD, we have eleven (ll) qualified personnel in our R&D team. They have knowledge and expertise in ICT related subject matters. Apart from having personnel involved in R&D purposes, our sales and distribution team also playa role in R&D activities by way of gathering market intelligence from customers and the industry. Our R&D centre at Cyberjaya houses our R&D activities and our servers, personal computers and software development tools. R&D development strategies Our R&D development strategies are as follows: (a) increase R&D manpower and resources;
(b) collaborating and fanning strategic alliance with point-of-sales hardware vendors and software houses; and
(c) broadening products and services range.

6. BUSINESS OVERVIEW (Cont’d) R&D expenditures The table below sets out our R&D expenditures for the past three (3) FYEs 2007 to 2009 and FPE 2010, FYE2007·  FYE2008·  FYE 2009′  FPE 2010′  R&D expenditures  RM’OOO  RM’OOO  RM’OOO  RM’OOO  MPSB  340  292  Sinatec  487  360  Whatdevice  48  9  Group 875 661

Notes: • For the FYE 2007 and the FYE 2008. we have incurred mainly salary expenses ofapproximately RM833.000 and RM714,OOO respectively as our R&D activities which were recognised as operating expenses. The R&D activities during the FYEs 2007 to 2008 were mainly related to ERP, Micro Payment & Prepaid Top Up Solution (MPTUS) and eLMS. These R&D activities were expensed off during the FYEs 2007 to 2008 as they were ongoing R&D on continuous upgrades. maintenance and customisation ofexisting software. For the FYE 2009 and the FPE 2010, the expenses were mainly salary expenses which were capitalised as software R&D activities. These software R&D activities were related 10 agency management software system and card mailer system. Both Ihe card mailer system and partial of agency management software system will be commercialised in the[orthcoming FYE. FYE2007 FYE2008 FYE2009 FPE 2010 Revenue RM’OOO RM’OOO RM’OOO RM’OOO Group 6,074 6,771 7,843 6,610 FYE 2007 FYE2008 FYE 2009 FPE 2010R&D expenditures proportion to the total revenue of our Group RM’OOO RM’OOO RM’OOO RM’OOO Group 11.16% 10.00% R&D and technical team personnel As at the LPD, our Group’s key R&D personnel are as follows: Years of Key personnel Position held experience Ng Kian Seng Chief Technology Officer 10.5 Wong Siew Yee Project manager 8.5 Ho Chee Jiun Project manager 4.0 Low Cheah Pei Analyst programmer 4.5 Yeo Choon Ann Product development engineer 4.0 6.20 INTERRUPTIONS IN BUSINESS We have not experienced any interruption in business which had significant effects on our operations for the twelve (12) months preceding the LPD. 6. BUSINESS OVERVIEW (Cont’d) 6.21 MAJOR CUSTOMERS Save as disclosed below, our Group does not have any major customer (i.e. those individually contributing 10% or more of our Group’s revenue) for the past three (3) FYEs 2007 to 2009 and the FPE 2010: Year of < As a % of total revenue > Name of Country relation Services FYE2007 FYE2008 FYE2009 FPE2010 customer of origin -ship offered RM’OOO % RM’OOO % RM’OOO % RM’OOO % EON Malaysia 8 Terminal 2,236 36.81 2,849 42.08 4,308 54.72 3,321 50.24 Bank Services, Loyalty Management Serviees, Business Process Outsourcing Services and Payment Services Nova Malaysia 5 Software. 375 6.17 1.125 14.29 Newlook Security and Sdn Bhd’ leT Services Celcom Malaysia 9 Software. 639 10.52 1,073 15.85 117 1.48 (Malaysia) Security and Berhad leT Services E Combi Singapore 4 Software. 1,500 22.15 Pte Ltd # Security and leT Services MDeC Malaysia 10 Software, 172 2.83 0.01 2,177 32.93 Security and leT Services Notes: # The company;s related to our Group as Chin Shea Fang is the e.xecutive director and a shareholder. He is also our Promoter. • The company;s related 10 our Group as Data’ Theng Book. Chan Wah Kiang and Chin Shea Swong are the shareholders. They are also our Promoters. Save for our major customer, EON Bank, which has contributed approximately 36.81%, 42.08%, 54.72% and 50.24% of our total revenue for the FYE 2007, 2008, 2009 and FPE 2010 respectively, we are not dependent on other major customers. Please refer to Section 4.1.1 of this Prospectus for mitigating factors of the dependence on these major customers. Our Directors confIrmed that the above related party transactions were carried out at arm’s length basis on normal commercial terms which are not favourable to the related parties. For the relevant fInancial years under review, some of our revenues are derived from customers who are related to our Group as its directors and shareholders who are also part of the Promoters. Please also refer to Section 10 of this Prospectus for further details on related party transactions. 6. BUSINESS OVERVIEW (Cont’d) 6.22 MAJOR SUPPLIERS Save as disclosed below, our Group does not have any major suppliers (i.e. those individually contributing 10% or more of our Group’s purchases) for each of the past three (3) FYE 2007 to 2009 and the FPE 2010: Year of < As a % artotal purchases > Name of Country relation- FYE2007 FYE2008 FYE2009 FPE20tO supplier of origin ship Payments for RM’OOO % RM’OOO % RM’OOO % RM’OOO % Nera Malaysia 9 Purchase of 227 11.82 148 12.59 65 8.41 Infocom NAC
(M) Sdn Bhd
Hypercom Malaysia 9 Purchase of 357 18.59 212 18.03 351 45.41 6 2.48 EDCPOS Terminals, software and related network equipment Sierra Singapore 6 Broadband 394 20.52 to 0.85 6 0.78 6 2.48 Wireless data produets (Asia Pacific) Ltd
Creative Malaysia 6 Installation 9 0.47 630 53.57 Century services of Management Nokia Sdn Bhd Wireless
Cellular Terminal and Payphone System of Celcom USP project in East Malaysia Giesecke Singapore 5 Purchase of 382 19.90 and software Devrient upgrade Asia Pte
Ltd RX Malaysia 2 Installation 278 14.48 Telecomrnu· services of nicalian Nokia Sdn Bhd Wireless
Cellular Terminal and Payphone System of Celcom USP project in East Malaysia Nova Malaysia 5 Purchase of 151 19.53 Newlook EDCPOS
Sdn Bhd’ Terminals AEON Co. Malaysia 2 Purchase of 4 0.52 26 10.74 (M)Bhd vouchers 6. BUSINESS OVERVIEW (Conl’d) Note: • The company ;s related to our Group as Dato’ Theng BODie. Chan Wah Kiang and Chin Shea Swong are the shareholders. They are a/so our Promoters. Save for Hypercom, we are not dependent on other major suppliers as disclosed above. Please refer to Section 4.1.6 ofIbis Prospectus for mitigating factors ofthe dependence on this major supplier. Our Directors confirmed that the above related party transactions were carried out at arm’s length basis on normal commercial terms which are not favourable to the related parties. For the relevant financial years under review, some of our revenues are derived from customers who are related to our Group as its directors and shareholders who arc also part of Ibe Promoters. Please also refer to Section 10 of this Prospectus for further details on the related party transactions. The rest ofthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) 6.23 STRATEGIES, FUTURE PLANS AND PROSPECTS (i) Vision and mission statements (a) Our vision is to be the trusted provider of Managed Electronic Payment Solutions and its related systems and technologies that ensure the security and freedom of our corporate enterprises and its customers.
(b) Our mission is to revolutionalise the way business work and function by integrating new internet enabled technology and traditional business applications that will effectively eliminate the constraints of distance and

time. (ii) Future plans (a) Business expansion and increase in distribution network As part of our business expansion plan, we plan to expand our business and broaden our customer base. Currently, we have presence in eleven (II) locations by having sales and support centres at the major towns. We aim to increase this number and increase our presence nationwide by widening our sales and support network through our in-house sales team and Agency Managers in Malaysia. We shall continue to look for ways to enhance our Agency Manager Programme by increasing the number of our Agency Managers, as this will give us exclusive market coverage to offer our products and services. Moving forward, our Group intends to secure more Agency Managers for the distribution network. To achieve this, we will facilitate and provide each Agency Manager and our in­house sales team with, amongst others, the following: (i) understanding of our Group’s products and services, knowledge of target markets, development of soft skills and technical knowledge. This is to ensure that they are well-versed on all sales, support and technical areas. A certificate will be issued by our Group for the Agency Manager who has undergone this training;
(ii) purchasing approximately 4,000 units EDCPOS Terminals, 150 set of point­of-sales system and peripherals and 5 sets of computer hardware and software system required to set up Host Application Server for our Payment Services and Loyalty Management System utilising the !PO proceeds; and

(iii) expand our office space and/or to set-up branches at various locations within Malaysia to cater for our Agency Manager programme’s training and development and our sales and support network centre with the objective to provide tools and technical knowledge to our Agency Managers. The rest ojthis page is intentionally left blank 6. BUSINESS OVERVIEW (Cont’d) (b) New products and services Part of our Group’s strategy is to offer new products and services to which includes but not limited to the following: (i) integrate our EDCPOS Termiual solutions with point of sales software veudors. With such alliances or collaborations, we will be able to secure more leads and opportunities in the market. Our payment middleware (referred to as POSConnect) is able to facilitate easier end-of-month reporting, daily transaction reconciliation and reduce data re-entry by integrating the EDCPOS Terminals directly into the third party POS system such as the Microsoft Dynamics Retail Management System, Spartan POS System, Dinerware POS Solution and SAGE UBS POS Solution. Our POSConnect connects these third party POS systems via the EDCPOS Terminals to Financial Institutions; (il) we also intend to integrate our EDCPOS Terminals solutions with accounting and human resources management software vendors. This will widen our customer base by expanding our target market and clientele base; (iii) we aim to expand our business by securing additional in-source EMV Card Personalisation centres and Loyalty Management Services projects; (iv) we intend to launch our own co-branded Credit Card-based Loyalty Cards as this create brand awareness that will be linked to our brands;
(v) the implementation of the SMVSMEs online service delivery system for Malaysian SMI/SMEs to enable their business processes, such as quotations, purchase orders, invoices and payments, electronically. The MDEX project is anticipated to offer business exposure to our Group with various business communities via different channels such as SME CORP, SMI Association of Malaysia, Kuala Lumpur Malay Chamber of Commerce and KL Selangor Chinese Chamber of Commerce and Industry.

In summary, the MDEX project offers the opportunity to cross-sell our Group’s Payment Services and Terminal Services; and The rest oflhis page is inlenlionally left blank 6. BUSINESS OVERVIEW (Cont’d) (vi) we have secured contracts with the following customers for our Payment Services and Tenninal Services segments: Proj ect secured Description of project Easy Pha-max Provision of redemption of Easy Pha-max’s bonus Marketing Sdn Bhd points services Institut Kimia Membership and payment system Malaysia Broadway Access Internet protocol based EDCPOS Tenninal rollout SdnBhd in Megalong shopping complex, Sabah MRewards Provision of Loyalty Management Services International Sdn Bhd EON Bank • TM utility payment via standing instruction • Wave3 Reader rollout services
• RCG (Malaysia) Sdn Bhd EDCPOS Tenninal rollout for Acer dealers

MDeC SME Online Service Delivery Platfonn Dynasun Sdn Bhd EDCPOS Tenninal rollout for Johnny’s Restaurant outlets MBB • Aussino Malaysia Sdn Bhd EDCPOS Tenninal rollout • Cellini Design Center Sdn Bhd EDCPOS Tenninal rollout
• POSConnect solution for Kuala Lumpur International Airport’s express rail link

As at the LPD, the above projects have been completed. To achieve this goal, we intend to strengthen our R&D capabilities by expanding the R&D team and focusing on enhancing our existing products, application, and middleware to meet our customers’ requirement. We believe that keeping our products and services up-to-date is essential to increasing our market share and to compete with other players in the Electronic Payment Solutions industry. As such, we intend to continue developing our products and solutions on an on-going basis by adding new features such as security features and upgrading of requirements to comply with the evolving EMV standards set by Europay, MasterCard and Visa. (c) Promotion of our products and services As a service provider, we intend to market our products and solutions to Financial Institutions, large retail chain outlets and other sizeable business entities that uses our in-house products and the integrated point-of-sales system in collaboration with third party point-of-sales vendors in the short to mid-tenn. We intend to achieve this goal by conducting product awareness campaigns such as the provision of training materials, marketing materials, advertisement and promotional activities to target this group of potential customers. 6. BUSINESS OVERVIEW (Cont’d) (iii) Our prospects Our current main focus is in smart card technology based electronic payment products and solutions, which include our core services comprising Payment Services, Terminal Services, and value added services comprising Loyalty Management Services, Business Process Outsourcing and Software, Security and ICT Services. The bulk of shared resources that enable such solutions are the middleware and back-end services which consist of network nodes, encryption algorithms, software development as well as database management and switch routing capabilities. Our equipment and expertise to execute middleware and back­end services are versatile and can be easily adapted to accommodate solutions for mobile and internet payments. With growth anticipated for the Electronie Payment Solutions industry, in the smart card-based segment as well as internet and mobile payments, the prospeets for our Group are promising. The CAGR for the Electronic Payment Solutions industry in Malaysia is anticipated to be about 8.3% in the period 2010 to 2015, while the smart card personalisation market in Malaysia is expected to grow at a CAGR of 9.6% during the same period (Source: Independent Market Research Report compiled and prepared by Frost & Sullivan). Additionally, the value of internet banking and mobile banking in Malaysia registered CAGR of 32.6% and 42.9% in 2005 to 2009 respectively. The loyalty management market in Malaysia recorded growth rates of between 15.0% and 18.1% in 2005 to 2008. Although the growth rate ofthis market is lower at6.1% in 2009 as a result of reduced consumer spending due to the global financial crisis in 2008/09, the market is expected to return to normal growth rates as the economy of the nation improves in 2010 onwards (Source: Independent Market Research Report compiled and prepared by Frost & SuI/ivan). All of the above demonstrates that the market segments that our Group participates in are growth markets, with potential for further growth as both retailers and consumers continue to adopt electronic payment methods. Our Group is in a prime position, not just as an experienced player in the industry but also as an end-to-end solution provider, to leverage on its internal capabilities and external reach to capture the growing demand for electronic payment products and services. Premised on the growth anticipated, our Group is of the view that we will be able to grow our sales in the following manner: (i) Terminal Services: To work with other Financial Institutions as the Acquiring Banks, to increase our pool of Merchants and to expand and diversify our products and services to different industries. As at the LPD, we have EON Bank and MBB as our Acquiring Banks and we have submitted proposals to two (2) other Financial Institutions for our Terminal Services;
(ii) Payment Services: Our Group has collaborated with POS Partners (Asia Pacific) Pty Ltd to market and distribute the Microsoft Dynamics Retail Management System and Dinerware POS Solution in Malaysia and Brunei. In addition, our Group has secured a contract with MDeC to deploy SME Online Delivery Platform to facilitate SMIISMEs e-commerce, online ordering and payment transactions utilising our SCICAD and advanced e-commerce portal system; and

6. BUSINESS OVERVIEW (Cont’d) (iii) Loyalty Management Services: Our Group has for the past two and a half (2.5) years recruited and managed the MATIA cardholders on behalf of EON Bank and MATIA by providing points capturing and gift redemption services to MATIA cardholders. In addition, our Group has secured two (2) other loyalty projects for a duration of three (3) years each using our CLMS to maintain and enhance their customers retention. The rest ofthis page is intentionally left blank

 

 

 

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