Business Overview

4. INFORMATION ON OUR GROUP 4. INFORMATION ON OUR GROUP 4.1 GROUP STRUCTURE xoxII
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The summary details of our subsidiary companies are as follows:­Issued and Corporation  Date/Place of Incorporation  Effective Equity Interest (%)  Paid-up Share Capital iRM)  Principal Activities  XOXCom  16.09.2005/ Malaysia  100.0  24,879,998  Provider of mobile telecommunicatproducts and services  ions  XOX Mobile  10.04.2008 / Malaysia  100.0  SO,OOO  Agent for the marl<eting, promotion, support services and managing distribution channels of mtelecommunications products services  the obile and  XOX Media  21.02.2007/ Malaysia  100.0  100,000  Dormant  XOX Management Services  13.03.2009/ Malaysia  100.0  40.000  Provision of management services
As at LPD, we do not have any other subsidiary or associated companies. Please refer to Section 4.6 of this Prospectus for further details of our Group’s subsidiary companies. 4. INFORMATION ON OUR GROUP (Cant’d) 4.2 OUR HISTORY AND BUSINESS XOX Group is a new and upcoming mobile telecommunications service provider in Malaysia. We believe that the key factors which distinguish us from our competitors are our innovative services plans and competitive rates, such as our Group’s convergence subscription plan and Short Call feature, which offer our subscribers outstanding value. Our Group’s history can be traced back to the incorporation of XOX Com in 2005. In 2007, we obtained the NSP-I license from the Ministry of Energy, Green Technology and Water (formerly known as Ministry of Energy, Water and Communications Malaysia). The NSP-I licence allows our Group to operate a mobile telecommunications service business in Malaysia. In 2008, we had entered into an agreement with Celcom, allowing our Group to utilise Cetcom’s Digital Network. Our Group obtained the ASP licence from MCMC in the same year which allows our Group to provide contents/services such as festival greetings SMS to our Group’s SUbscribers and the sale of recharge vouchers. Our Group was also awarded 1.5 million service numbers with a prefix “010-3000000 to 010·3499999”, “010-8300000 to 010­8799999” and also “011·13000000 to 011-13499999″ by MCMC. As an MVNO, we do not own or operate a physical network, which frees us from investing in related heavy capital expend~ures to build and maintain network infrastructures. This allows us to focus our resources on acquiring and servicing our subscribers and compete effectively against the existing incumbent network operators in the industry. We commenced operations in 2009 and have since introduced innovative service plans and features such as XinXun, Short Call, XOX-RT Super 88 and Hybrid to improve our competitiveness in the market. Please refer to Section 4.8.2(i) for further details on these service plans and features. XOX was incorporated in Malaysia under the Act as a public company on 10 May 2010 as the listing vehicle for XOX Group. As at LPD, our Group has a subscriber base of approximately 395,000 subscribers.
4.3 LOCATION OF BUSINESS Principal Place of Business Our Group’s head office is located at 31-3, Block C, Jaya One, 72A, Jalan Universiti, 46200 Petaling Jaya, Selangor. Details of the other locations of business where our Group operates from are set out below:­No.  Existing Use  Owned / Rented  Built up area (sq feet)  Address  1.  Head Office  Rented  3,795  31-3, Block C, Jaya One, 72A, Jalan Universiti, 46200 Petaling Jaya, Selangor Darul Ehsan  2.  Operations and Support Office  Rented  2,021 2,021  23-5, Block B, Jaya One, 72A, Jalan Universiti, 46200 Petaling Jaya, Selangor Darul Ehsan 25-5, Block B, Jaya One, 72A, Jalan Universiti, 46200 Pelaling Jaya, Selangor Darul Ehsan
Please refer to Section 8.1 for more information on the above properties. 4. INFORMATION ON OUR GROUP (Cont’d) 4.4 KEY ACHIEVEMENTS AND MILESTONES The table below sets out our Group’s key development and achievement milestones over the years:­Year  Milestones  2005  XOX Com was incorporated on 16 September 2005.  2007  XOX Com obtained the NSP-I licence on 19 November 2007 from the Ministry of Ener9Y, Green Technology and Water (formerly known as Ministry of Energy, Water and Communications Malaysia).  2008  MCMC awarded service number wi1h prefix from 010-3000000 to 010-3499999 to XOX Com on 21 April 2008. XOX Media had been approved as a MSC Status Company on 9 July 2008. XOX Com signed MVNO services a9reement with Celcom on 15 September 2008. XOX Com obtained approval from Bank Ne9ara Malaysia to operate ‘electronic wallet service’ on 26 September 2008.  2009  XOX Com launched the ‘HopOn SUbscription Plan’ on 16 January 2009. XOX Com launched the ‘010 Prepaid SUbscription Plan’ on 13 March 2009. XOX Com successfully implemented the Convergence Char9ing System platfonn on 6 November 2009. XOX Com launched the XinXun SUbscription plan and the Short Call feature on 24 November 2009.  2010  MCMC awarded service number with prefix from 010-8300000 to 010-8799999 to XOX Com on 15 January 2010. MCMC awarded service number with prefix from 011-13000000 to 011-13499999 to XOX Com on 20 April 2010. XOX Com launched XOX-RT Super 88 convergence plan in 11 June 2010. XOX Com launched Hybrid convergence plan in 28 October 2010.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cont’d) 4.5 SHARE CAPITAL AND CHANGES IN SHARE CAPITAL As at the date of incorporation, the authorised share capital of our Company was RM100,000 comprising 100,000 ordinary shares of RM1,00 each, On 4 April 2011 the authorised share capital of our Company was increased to RM100,000,000, comprising 100,000,000 ordinary shares of RM1,00 each, On 4 April 2011 pursuant to the Share Split, our Company’s authorised share capital of RM100,000,000 comprising 1,000,000,000 ordinary shares of RMO,10 each, As at LPD, the existing issued and paid-up share capital of our Company is RM25,520,000 comprising 255,200,000 ordinary shares of RM1,00 each, The changes in the issued and paid-up share capital of our Company for the last three (3) years are as follows:­Date of Allotmantl Subdivision  Number of Shares Allolled  Par Value IRMl  Consideration  Cumulative Issued and Paid-up Share CaDital iRMl  10,05,2010 04,04,2011 04,04,2011 04,04.2011  2 25,019,998 -5,000,000  1,00 1,00 0,10 0,10  Cash(l) Acquismon Share split Special Issue  2 25,020,000 25,020,000 25,520,000
Note:­(1) There were no discounts, special terms Dr instalment payment terms provided in relation to this transaction. 4.6 SUBSIDIARY COMPANIES 4.6,1 XOX Com (a) Background and History
XOX Com was incorporated under the Act on 16 September 2005 in Malaysia as a private limited company under its present name, XOX Com commenced business operations in 2009,
(b) Principal Activities and Products! Services
XOX Com is principally engaged as a provider of mobile telecommunications products and services for our Group,
(c) Substantial Shareholders XOX Com is a wholly owned subsidiary of our Company,
(d) Share Capital

The present authorised share capital is RM25,000,000 comprising 25,000,000 ordinary shares of RM1,00 each, while the issued and paid-up share capital is RM24,879,998 comprising 24,879,998 ordinary shares of RM1,00 each, The changes in the issued and paid·up share capital of XOX Com for the last three (3) years are as follows:­

4. INFORMATION ON OUR GROUP (Cont’d) Date of Allotment 10.09.2007 07.12.2007 15.05.2008 09.06.2008 26.06.2008 13.08.2008 29.10.2008 03.11.2008 21.11.2008 10.12.2008 13.02.2009 27.02.2009 18.11.2009 16.12.2009 10.06.2010 04.04.2011 04.04.2011 Note:­No. of shares alloned 12,000 20,000 120,000 168,000 5,600 674,400 19,000 8,700 1,472,300 60,000 312,000 8,628,000 2,000,000 1,000,000 940,000 940,000 7,999,998 Par Value (RMl 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Cumulative issued and paid-up share Consideration caDital (RMl Cash”) 512,000 Cash(‘) 532,000 Cash(1 l 652,000 Cash\l) 820,000 Cash(lj 825,600 Bonus issue 1,500,000 Cash(” 1,519,000 Cash\l) 1,527,700 Bonus issue 3,000,000 Cash(l) 3,060,000 Cash(‘) 3,372,000 Bonus issue 12,000,000 cash(l) 14,000,000 Cash{lj 15,000,000 Cash(‘) 15,940,000 Cash(‘) 16,880,000 Bonus issue 24,879,998 (1) There were no discounts, special terms or instalment payment terms provided in relation to this transaction. As at LPD, XOX Com does not have any outstandin9 warrants, options, convertible securities or uncalled capital. (e) Subsidiary or Associated Company As at LPD, the subsidiary of XOX Com is XOX Mobile. 4.6,2 XOX Mobile (a) Background and History XOX Mobile was incorporated under the Act on 10 April 2008 in Malaysia as a private limited company under its present name. XOX Mobile commenced business operations in 2009. (b) Principal Activities and Products! Services XOX Mobile is principally acting as an agent for the marketing, promotion, support services and managing the distribution channels of mobile telecommunications products and services. (c) Substantial Shareholders XOX Mobile is a wholly owned SUbsidiary of XOX Com, which in turn is a wholly owned subsidiary of our Company. (d) Share Capital The present authorised share capital is RM100,000 compns(ng 100,000 ordinary shares of RM1.00 each, while it’s issued and paid-Up share capital is RM50,000 comprising 50,000 ordinary shares of RM1.00 each. The changes in the issued and paid-up share capital of XOX Mobile for the last three (3) years are as follows:­40 4. INFORMATION ON OUR GROUP (Cont’d) Cumulative issued  Date of  No. of shares  Par Value  and paid-up share  Allotment  alloued  (RMI  Consideration  caDital IRM\  10.04.2008  2  1.00  Cash”)  2  27.05.2008  1,998  1.00  Cash(1)  2,000  16.03.2010  48,000  1.00  Cash”)  50,000
Note:­(1) There were no discounts, special terms or instalment payment terms provided in relation to these transactions. As at LPD, XOX Mobile does not have any outstanding warrants, options, convertible securities or uncalled capital. (e) Subsidiary or Associated Company As at LPD, XOX Mobile does not have any subsidiary or associated companies. 4.6.3 XOX Media (a) Background and History XOX Media was incorporated under the Act on 21 February 2007 in Malaysia as a private limited company under its present name. (b) Principal Activities and Products! Services XOX Media is currently dormant.

(c) Substantial Shareholders XOX Media is a wholly owned subsidiary of our Company.

(d) Share Capital

The present authorised share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, while it’s issued and paid-up share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each. The changes in the issued and paid-up share capital of XOX Media for the last three (3) years are as follows:­Cumulative issued Date of No. of sharea Par Value and paid-up share Allotment allotted (RM\ Consideration capital (RMI 21.02.2007 2 1.00 Cash”) 10.07.2007 1,998 1.00 Cash(1 ) 2,000 13.08.2008 18,000 1.00 Cash(1J 20,000 14.10.2009 15,500 1.00 Cash”) 35,500 18.05.2010 9,500 1.00 Cash”) 45,000 08.06.2010 40,000 1.00 Cash”) 85,000 06.07.2010 15,000 1.00 Cash(1 ) 100,000 Note:­(1) There were no discounts, special terms or instalment payment terms provided in relation to these transactions. 41 4. INFORMATION ON OUR GROUP (Cont’d) As at LPD, XOX Media does not have any outstanding warrants, options, convertible securities or uncalled capital. (e) Subsidiary or Associated Company As at LPD, XOX Media does not have any subsidiary or associated companies.
4.6.4 XOX Management Services (a) Background and History
XOX Management Services was incorporated under the Act on 13 March 2009 in Malaysia as a private limited company under its present name. XOX Management Services commenced business operations in 2009.
(b) Principal Activities and Products! Services
XOX Management Services is principally engaged in the provision of management services. Currently it manages the human resource func1ion for our Group which includes recruitment, preparation of payroll and assignment of employees to the various functions within our Group.
(c) Substantial Shareholders
XOX Management Services is a wholly owned subsidiary of our Company.
(d) Share CapitaI

The present authorised share capital is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, while the issued and paid-up share capital is RM40,000 comprising 40,000 ordinary shares of RM1.00 each. The changes in the issued and paid-Up share capital of XOX Management Services for the last three (3) years are as follows:­Cumulative issued  Date of Allotment  No. of shares allotted  Par Value . (RMI  Consideration  and paid-Up share caDital IRMI  13.03.2009  2  1.00  Cash”)  2  27.05.2010 06.07.2010  14,998 25,000  1.00 1.00  Cash”) Cash!’)  15,000 40,000
Note:­(1) Th9fS were no discounts, special terms or instalment paymsnt tsrms provided in relation to this transaction. As at LPD, XOX Management Services does not have any outstanding warrants, options, convertible securities or uncalled capital. (e) Subsidiary or Associated Company As at LPD, XOX Management Services does not have any subsidiary or associated companies. 4. INFORMATION ON OUR GROUP (Cont’d) 4.7 LISTING SCHEME In conjunction with, and as an integral part of our listing and quotation for our entire issued and paid-up share capital on the ACE Market of Bursa Securities, the listing scheme is set out as follows:­(i) Bonus Issue in XOX Com
(ii) Acquisitions;

(iii) Share split; (iv) Special Issue;
(v) IPO; and
(vi) Listing of XOX Shares.

The above are inter-conditional and are viewed as one exercise undertaken to facilitate the Listing of our Company. 4.7.1 Bonus Issue in XOX Com As part of the Listing Scheme, XOX Com undertook a bonus issue of 7,999,998 new ordinary shares of RM1.00 each in XOX Com to all existing XOX Com shareholders on the basis of approximately one (1) new ordinary share of RM1.00 each for every two (2) existing ordinary shares of RM1.00 each held, to be credited as fully paid-up ordinary shares to the entitled shareholders. The Bonus Issue in XOX Com resulted in an increase in XOX Com’s issued and paid up share capital from RM16,880,OOO comprising 16,880,000 ordinary shares of RM1.00 each to RM24,879,998 comprising 24,879,998 ordinary shares of RM1.00 each. The Bonus Issue in XOX Com was completed on 4 April 2011. 4.7.2 Acquisitions XOX entered into the following conditional SPA for shares with following vendors for the following acquisitions:­Companies  Vendors  %  No. of  Purchase  No. of  acquired  shares at  consideration  XOX shares at  RM1.00 each  (RM)  RM1.00 each issued  as consideration
XOXCom XOX Management Services XOX Media Total Note (I) Ng Kok Heng and Wong Yip Kee
Dato’ Seri Abdul Azim Bin Mohd Zabidi, Ng Kok Heng and Won9 Yip Kee
100.0 24,879,998 24,879,998 24,879,998 100.0 40,000 40,000 40,000 100.0 100,000 100,000 100,000 25,0199,998 25,0199,998 4. INFORMATION ON OUR GROUP (Cont’d) Notes:­(i) The vendors for XOX Com am Dalo’ seri Abdul kim Bin Mood Zabidi, DaNn Seri Raihanah Begum Binli Abdul Rahman, Ng Kok Heng, Wong Yip Kee, Mara Incorporaled Sdn BM, Peh Poh Choo, 81m Chin Yee, $00 Pow Yoke, Cheong Wai Loong, Chang Slew Yee. Wong Sau Lan, Gan Chin Sam, Chia Min Huan, Chay Yoke Tuck, Kwan Low Ang, 181 Degree Holding Sdn Bhd, Chan Chee Hong, Chung Shan Kwang, RosH Bin Yaakub, Rosdin Bin Hanafiah, KhaJek Bin Awang, Yahaya Bin Bujang, Darus Aman Bin Awang Deris, Wong see Khieng, Mohd MJilyuddin Bin Yahya, safri Bin Che Kub, Lawrence Yeo (JlUa Poll, Mrakusukma. Sandari Sinti Ahmad. Cindy Lau May Ih, Faidzan Bin Hassan and Peh Poh Chye . The SPA for XOX Com was entered into on 15 July 2010 and it was subsequently substituted with a restated SPA on 4 April 20 11. The respective purchase considerations for the above transactions were arrived at on a willing-buyer willing-seller basis after taking into consideration the issued and paid­up share capital of the respective companies. The above Acquis~ions were completed on 4 April 2011 which resulted in XOX Com, XOX Media and XOX Management Services becoming wholly owned subsidiaries of XOX, Upon completion of the Acquisitions, our issued and paid up share capital increased from two (2) ordinary shares of RM1,OO each to 25,020,000 ordinary shares of RM1,OO each. 4,7.3 Share Split On 4 April 2011, we undertook a share split involving the subdivision of everyone (1) existing ordinary share of RM1,OO each in XOX into ten (10) Shares. Upon completion of the Share Split, our issued and paid up share capital changed from RM25,020,ooO comprising 25,020,000 ordinary shares of RM1.oo each to RM25,020,000 comprising 250,200,000 Shares. 4.7.4 Special Issue Upon completion of the Share Split, we undertook a special issue of 5,000,000 new Shares to Eligible Persons at an issue price of RMO.36 per Share, to reward them for their contributions towards the success of XOX as well as allowing them to directly participate in our Group’s future growth. The proceeds from the Special Issue will be used for working capital purposes. The Special Issue will create a sense of ownership in XOX amongst these Eligible Persons, whose services are vital to the operations and continued growth of XOX Group. These Eligible Persons are not eligible for the Pink Form Share Allocation as disclosed in Section 2.3(ii) of this Prospectus. The Special Issue will be allocated to the Eligible Persons based on, amongst others:­(i) Staff loyalty and integrity;
(ii) Job position; and

(iii) Contribution I work performances. 4. INFORMATION ON OUR GROUP (Cont’d) The Eligible Persons entrtled to the Special Issue are set out below:­Name  Name  Name  Azlinda Binli Mohamad  Loh YetSem  Tee Wei Chung  Azrtl Bin Aliuddin  Loo May Kuan  TengWei Min  Chew Kah Eng  Low Chung Ming  Wang Khong Nie  Chua Kah Seng  Scott Mackenzie  Wong Chew Yeh  Eng Kheng Yap  Sharosmi Bin Sumirin  Zairulyani Binti Abu Zarim  Leon Chew Tuck Wai  Sim Chin Yee  Liew Chun Kiat  Tan Tai Liang  Lina Chena  Tan Jav Onn
Upon completion of the Special Issue on 4 April 2011, our issued and paid up share capital increased from RM25,020,000 comprising 250,200,000 Shares to RM25,520,000 comprising 255,200,000 Shares.  4.7.5  IPO  Our Company is undertaking an IPO and details of the Public Issue are as set out in Section 2.3 of this Prospectus.  4.7.6  Listing of and Quotation for our Shares  Upon completion of the abovementioned IPO, our Company will seek the listing of and quotation for our entire enlarged issued and paid up share capital of 302,000,000 Shares on the ACE Market of Bursa Securities.
THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cont’d) 4.8 BUSINESS OVERVIEW OF OUR GROUP 4.8.1 Principal Business Activities
Mobile Services Data Services Internet Services* • Prepaid Plans • SMSand MMS Social Network Portal
• Convergence of subscription • Video calling plans*

Note:­This are part of XOX’s future plans. Please refer to Section 4.23 of this Prospectus for further details of our Group’s future plans. XOX operates its mobile telecommunications services using the MVNO business model. Our Group has been awarded service numbers with the prefix “010-3000000 to 010-3499999”, “010-8300000 to 010-8799999” and also “011-13000000 to 011­13499999” for our Group’s mobile SUbscription plans from the MCMC. As at LPD, approximately 368,000 service numbers representing approximately 24.5% of the total 1.5 million service numbers awarded to our Group has been registered. These service numbers will be recycled and made available for new registration should a subscriber ceases to be an XOX subscriber. Our Group will apply to MCMC for additional service numbers as and when required. An MVNO business model is a model allowed by the MCMC where the MVNO does not need to have its own licensed frequency allocation of radio spectrum, nor does it necessarily have to build the radio network infrastructures required to provide mobile telephone services. A company that does have frequency allocation(s) and the required radio network infrastructures to run an independent mobile network is known simply as an MNO. The MCMC defines an MVNO into four (4) prevalent business models for the MVNO industry and the characteristics of each are as follows:­(a) Full MVNO, one that owns or provides network facilities and network services such as towers, mobile switching centres, HLR and cellular mobile services. A key feature that distinguishes a full MVNO from other MVNO business models is its ability to operate independently of the MNO. Full MVNOs are able to secure their own numbering ranges, offer its own 81M card and have full flexibility on the design of the services and tariff structures; The main difference between a full MVNO and a MNO is that the former cannot sign international roaming agreements with the other MNOs in the overseas countries, as they are not recognised as a proper telecommunications company. 46 4. INFORMATION ON OUR GROUP (Cont’d) (b) Enhanced Service Providers, are those who do not own or provide network facilities but have the ability to secure its own numbering range, operate its own HLR and offer its own SIM cards with its own mobile network code. They are dependent on MNOs for network facilities, as well as access to radio network. These service providers are still able to maintain some form of independence from MNOs as they are able to differentiate their products;
(c) Enhanced Reseller, are primarily distributors who resell services provided by MNOs. As with Enhanced Service Providers, Enhanced Resellers rely on MNOs for access to the radio network and network facilities, The key feature that distinguishes Enhanced Resellers from Enhanced Service Providers is that Enhanced Resellers do not have their own SIM cards, While they may still be able to offer their own branded packages, they will not be able to distinguish their services from their MNOs, Enhanced resellers are likely to carry out customer care and billing in house; and
(d) Resellers, merely resell SUbscription to end users, In most cases, Resellers are completely dependent on MNOs for every aspect of service provision, billing and customer care, However, end users will not be able to make a distinction between resellers, other forms of MVNOs and MNOs.

(Source: Independent Market Research Report of The Mobile Virtual Network Operator Industry In Malaysia prepared by Dun & Bradstreet (O&B) Malaysia Sdn Bhd) XOX Group operates as an Enhanced Service Provider, where we control all aspects of our subscriber relationships, including brand name, pricing, content, advertising and marketing, customer care and information technology platform. We also distribute our own SIM cards and have our own billing system, SMS Centre and network elements. Since we do not own nor operate our own physical network, we have substantially lower capital expenditures compared to mobile telecommunications operators with their own networks. This allows our Group to dedicate our resources to acquiring and servicing subscribers rather than acquiring radio spectrum licences or building and maintaining capital intensive radio network infrastructures. As a result, since the commencement of our operations in 2009, we have managed to secure a subscriber base of approximately 395,000 subscribers as at LPD. Using our Group’s Convergence Charging System in the Malaysian telecommunications industry, we are able to merge separated subscription plans of both prepaid and postpaid into one (1) single account, which is known as a convergence subscription. The concept of a convergence subscription is based on the premise of merging mUltiple accounts into one single subscription. Therefore, a convergence mobile subscription can have both prepaid and postpaid capabilities and also offers a technological platform for the introduction of innovative products such as mobile wallet account, SMS account and loyalty account. A convergence subscription can potentially offer an unlimited type and number of accounts with individual charging capabilities which offers the following benefits:­(i) Single billing for all subscriptions The convergence subscription plan generates a single billing for the subscribers which may include other friends and/or family member’s service numbers. (ii) Cross utilisation of services A subscriber can access multiple accounts and cross utilise the available credits in prepaid, postpaid, loyalty and mobile wallet accounts. 4. INFORMATION ON OUR GROUP (Cont’d) (iii) Single loyalty programme All loyalty points earned from all other accounts, such as postpaid mobile account and prepaid mobile account, which are accumulated through various activities will be aggregated into a single loyalty programme, allowing our Group’s subscribers to maximise their total loyalty points earned. (iv) Single contact point for all sUbscription matters. A single convergence sUbscription plan owner for multiple service numbers and/or subscribers. For example, a parent can be the contact point for all his/her children’s mobile number. Our target market is mainly the prepaid market with a niche in the ethnic Chinese popUlation in Malaysia. Nevertheless, we believe that the appeal of our products and services extends beyond our target market. 4.8.2 Products and Services The core products and services offered by mobile telecommunications operators are relatively homogeneous, consisting mainly of voice services, SMS and data services. (i) Mobile Services There are currently two (2) main types of mobile subscription plans which are being offered by the local mobile telecommunications services providers, i.e. prepaid plans and postpaid plans. Subscribers of both prepaid and postpaid plans would need to purchase and activate a SIM card from any mobile operator to be able to enjoy voice and data services. The key difference between plans offered to postpaid subscribers and prepaid subscribers is that postpaid plans allow usage on “account” with subscribers paying monthly bills in arrears, while prepaid plans requires subscribers to pay in advance into their account (“top-up”) to allow usage. Usually, subscribers of postpaid plans subscribe to a fixed monthly commitment plan, whilst prepaid SUbscribers top-up their credit balance through the purchase of recharge vouchers as and when required. We seek to differentiate ourselves from the traditional categorisation by providing an evolutionary service in merging both prepaid and postpaid plans into one (1) single convergent plan. Such a plan would be straightforward and offer a good value proposition and services that are easy to understand, evaluate, buy and use. As at LPD, we have implemented our convergence subscription plan under the brand name of “XOX-RT Super 88” and “Hybrid”. Potential subscribers of our Group’s prefix “010” number will need to purchase a starter pack from any of our authorised dealers. The starter pack consists of a SIM card with an initial credit amount that the subscribers can use for calling, SMS and/or data transmission upon activation of their SIM card. Any subsequent top-up of the credit balance will be through the purchase of recharge vouchers from our Group. For FYE2010, our Group’s revenue was entirely derived from the sales of starter packs and recharge vouchers. 48 4. INFORMATION ON OUR GROUP (Cont’d) Since the commencement of our business in 2009 up to the LPD, our Group has implemented the following services:­(a) Prepaid mobile In 2009 we have implemented our prepaid subscription plan under the brand name of XinXun. There are currently three (3) different tiers within our Group’s prepaid plan services and the respective voice call rates are as follows:­Tier clan  Classic*  Silver*  Gold”  Accumulated monthly recharge amount  < RM30  RM30 SX < RM50  ~RM50  Voice calls  Call Duration  sen  sen  sen  All Networks  First 15 seconds S 30 seconds S 1 minute  8 16 32  8 11 22  8 8 15
Note:· Rates are corrsct as at LPD. All reload amounts made by the subscribers will be accumulated and once a certain prescribed accumulated amount has been reached, the subscribers will be re-categorised from one tier to another tier within the same month. This will allow the subscribers to enjoy lower call rates. These rates will also be carried forward to the following month. Upon reloading, the subscribers validity period will also be accumulated i.e. the new validity period will only take effect when the validity period expires. The validity period can be accumulated up to 368 days. The current industry practice is to recompute the validity period from the reload date to the expiry of the validity period. Please refer to the diagram below:­E.g. R’U ='”alid fOI” 1 da:’.. Da~·l Da)-‘ 20 Da.y 30 Day 50 Da~· 60 ~I=====I~====I~~—-“”:”;1 —;[==”::ali::’d::”’::”.::p<=n::·c:,=d=,’=JO=d=C::~’5==1 XinXun ‘”aUdit)” pt”rlod ; 30 da:n. Iother T~lc05
_….:..=~:.:::.:r,.:..:……:…:..:.._-, ,, accumulated from the pre~·ious ~..alidity pt.’riod (30 da)”g + 30 days) XinXun VBlidit~, period from last reload (30 dars) other Telcol> ,, Reload Reload RMJO RM..JO
When a subscriber has utilised all of his prepaid balances and fails to make any recharge amount, XOX will suspend his ability to make outgoing calls and SMS except for calling emergency numbers and the XOX’s customer care services. In the event the SUbscriber still has not made any recharge amount after 60 days of the expiry period, the SUbscriber’s account will be terminated. Our Group’s prepaid plan also has a feature known as Short Call which allows subscribers of XOX to enjoy a low rate of RMO.08 for the first 15 seconds of a call to any other mobile network, irrespective of the reload amount. 49 4. INFORMATION ON OUR GROUP (Cont’d) (b) Subscribers of our Group’s prepaid plan are also able to enjoy automatic roaming services in other countries, utilising the foreign telecommunications provider’s infrastructure, under the arrangements of our host network provider. The roaming service is subject to subscribers having a minimum amount of available credit balance in their accounts. Convergence subscription plans XOX’s convergence subscription plan will be the main product of our Group. Since our Group’s convergence subscription plan does not segregate prepaid and postpaid, we will introduce other convergence sUbscription plans from time to time. A convergence subscription plan will allow any subscribers to be offered a postpaid account with prepaid flexibility and convenience. Our Group is currently implementing our new convergence subscription plan by gradually converting our current prepaid subscribers to the convergence subscription plan. Once the convergence product and services are in place, a typical convergence account will consist 01:­(a) Postpaid Mobile Account. This account records all mobile usages of the subscriber that has chosen to charge their usage into the Postpaid Mobile Account.
(b) Prepaid Mobile Account. This account records all mobile usages to be charged into the Prepaid Mobile Account. Subscribers need to ensure that this account has sufficient funds for mobile usages.
(c) Mobile Wallet Account. Once implemented, this account will be utilised for various purposes such as paying for mobile usages and services, purchase of XOX’s products and services from our Group’s merchants andlor content providers andlor transfer of funds to another subscriber’s account{s}. Please refer to Section 4.23 for further information on our Mobile Wallet.
(d) Loyaltv Account. The loyalty account is used to accumulate XOX loya~y points eamed by XOX subscribers through various activities. These loyalty points can be used to redeem free air time, free SMS, free Short Calls, product vouchers from participating business partners and co­branding business partners, and can transferred within family members on the “Family and Friends” package and “Closed User Group· package.
(e) SMS Account. This account is use to store SMS purchased andlor awarded free to the subscriber.
(f) Minutes Account. This account is used to store mobile minutes purchased and/or awarded free to the subscriber.

The values stored in these accounts are inter-transferable using our Group’s Convergence Charging System. Apart from the above accounts, a convergence mobile SUbscription may have many other accounts that may be created from time to time. 50 4. INFORMATION ON OUR GROUP (Cont’d) In 2010 we have implemented our convergence subscription plan under the brand name of “XOX-RT Super 88” and “Hybrid”. Our Group launched its first convergence subscription plan, Le. XOX­RT Super 88, on 11 June 2010. This plan is tied up with a local weekly newspaper. For further details please refer to Section 4.16.2(viii) of this Prospectus. The XOX-RT Super 88 plan starts with a zero credit limit. Subcribers need to pay a commitment fee of RM20 on a monthly basis for a period of 12-months and will enjoy the three (3) different tiers of our Group’s XinXun call rates depending on their monthly top-up. Subscribers of XOX-RT Super 88 also enjoy our Group’s innovative Short Call service feature as well as the flexibility in making payment through the internet and/or recharge vouchers Our Group launched our second convergence SUbscription plan, i.e. “Hybrid”, on 28 October 2010. Under this subscription plan, a credit limit will be set. The subscriber will be charged at a postpaid tariff and will also be subjected to a minimum usage commitment fee per month. The respective voice call rates are as follows:­Call rates’  Minimum monthly usage commitment fee  RM1S  RM30  RM50  Voice calls  Call Duration  sen  sen  sen  First 15 seconds  8  8  8  All Networks  More than seconds  15 and  25  20  15  subsequent minutes  Monthlv Credit Limit iRMl  36  60  100
Note:· Rates are correct as at LPD. In the event the subscriber is unable to fully utilise the minimum usage commitment for any particular month, the subscriber will still need to pay in full the minimum usage commitment fee. However, the subscriber can transfer the unused minimum usage commitment into his prepaid account. This balance could be utilised by the subscriber to make voice calls, SMS or other data services at prepaid tariff rates. In the event that the subscriber for any reason fails to pay his postpaid bill on the respective due dates, he will not be able to make outgoing calls, Le. the subscriber’s line will be barred. The subscriber can at any point in time, prior to the termination of his account, purchase recharge vouchers of any value from our authorised dealers, e-Pay terminals, 7-Eleven convenience stores, “MOL poinf’ service providers, internet banking or ATM to top-up his prepaid account and/or utilise the recharge vouchers to pay for the postpaid account. 4. INFORMATION ON OUR GROUP (Cont’d) (ii) Data Services Since the commencement of our business, our Group’s subscribers are also able to enjoy the following features:­(a) SMS capabimy;
(b) MMS capability; and
(c) Video calling.

We expect such services to appeal to our target market, which are usually early adopters of new technologies and whose use of mobile data services is higher than those of the average mobile subscriber. SMS. SMS is a mechanism for the delivery 01 short messages, which can comprise both alpha and numerical characters, over mobile networks. It is a store and forward way of transmitting messages to and from mobile devices. The message from the sending mobile is stored in a central short message service centre which then forwards it to the destinated mobile devices. MMS. MMS is similar to the traditional SMS except it can also convey messages in the form of pictures, videos and/or sounds within a certain size limit. Video calling. Video calling is similar to the traditional voice calls, but allows the caller and receiver to view each other via a camera. This function allows video conferencing whereby the attendees do not need to be physically present in a specific location for the conference to take place. During the commencement of our Group’s operation in 2009, our Group introduced the HopOn SUbscription Plan, which allows potential subscribers to switch from their existing mobile operators to XOX’s services while maintaining the subscriber’s current mobile number. As at LPD, our Group has introduced our data services to our subscribers for connectivity to the internet. This will provide our Group’s subscribers ease of obtaining information from the internet at “any time, anywhere” within the network coverage area. We are currently still in the progress of introducing various new products and services to our subscribers for our data plan. Please refer to Section 4.23.2 of this Prospectus for further information on our Group’s planned future product offerings. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cont’d) 4.8.3 Business Process Flow (a) Starter Packs Host network provider IPurchase of 81M Cards Send for packaging Packaging and Printing  and printing  XOX
Delivery of packed
starter packs lsa,eofstarter peoks Area Sales Distributors
lsa,e of starter paoks Dealers 1
Sale of starter pa Subscribers Diagram 1: Starter pack process flow Our Group purchases our SIM cards from our host network provider before sending the SIM cards for packaging and printing. The printed and packed SIM cards (“Starter Packs”) will then be sent back to our Group. Our Group would then sell the Starter Packs to our Group’s various distribution channels such as our Group’s traditional trade channels and XOX service centres. Potential subscribers would be able to purchase our Starter Packs from the aforementioned dealers and/or service centres. Please refer to Section 4.16.2(i) and Section 4.16.2(ii) of this Prospectus for further details on our Group’s traditional trade channels and XOX service centres respectively. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cant’d) (b) Recharge vouchers
reelit rd. Diagram 2: Recharge vouchers process flow for traditional trade channels and resellsrs Our Group’s Convergence Charging System will generate a unique set of numbers for each recharge voucher (“PIN”) and is able to also generate usage credits. Our Group’s subscribers can top-up their accounts through a printed recharge voucher slip. To do so, our Group’s subscribers will need to purchase a recharge voucher slip through our Group’s reseller, such as e­Pay (M) Sdn Bhd. The reseller will request for a recharge voucher PIN using the resellers respective designated terminal and the PIN will then be forwarded to the respective designated terminal. Top-up instructions will be printed on the printed recharge voucher slip. Our Group’s subscribers will subsequently need to follow the instructions written on the printed recharge voucher slip and top-up their account accordingly. The PIN generated (excluding those sent to the reseller designated terminal) will also be sent to our Group’s printers for printing on a physical card. A layer of security film will be embossed over the PIN during the printing process. The completed recharge voucher cards are then delivered to our Group to be sold to our Group’s appointed area sales distributors for sale to their respective dealers. These dealers subsequently sell these recharge voucher cards to our Group’s subscribers who will use it to top-up their accounts. 4. INFORMATION ON OUR GROUP (Cant’d) Our Group’s subscribers can also top-up their accounts by requesting a transfer of credit from our Group’s. The dealers would request for a credit transfer from the respective area sales distributors, which in turn would have to purchase these credits from our Group. The credits generated by our Group’s Convergence Charging System will be forwarded to an authorised employee within our Group who would then forward the credits to the area sales distributors upon receiving payment from these area sales distributors and approval from our Group’s Executive Directors. The area sales distributor will then sell the electronic recharge vouchers to our Group’s dealer which in turn will sell it to our Group’s subscribers. 4.9 PRINCIPAL MARKETS FOR PRODUCTS AND SERVICES Malaysia is our principal market. For FYE 2010, the Federal Territory of Kuala Lumpur and the State of Selangor is our principal local market. Our target market is mainly the prepaid market with a niche in the ethnic Chinese popUlation in Malaysia. As such our Group’s products and services also include certain features which attracts the ethnic Chinese population such as providing SMS alerts and messages in Mandarin and English, having call centre agents who can converse in Mandarin and other Chinese dialects such as Cantonese and programming the default interactive voice response, i.e. customer care hotline voice recording, to be in Mandarin. In the fourth quarter of 2010, the prepaid market accounted for approximately 79.8% of the total mobile phone subscribers in Malaysia (Source: Independent Market Research Report of The Mobile Virtual Network Operator Industry In Malaysia prepared by Dun & Bradstreet (O&B) Malaysia Sdn Bhd). Nevertheless we believe that the appeal of our products and services will extend beyond our target market. 4.10 SEASONALITY Our Group does not experience significant fluctuations in its business due to seasonal factors, although usage tends to increase during major festive holiday periods such as New Year, Chinese New Year and Christmas celebrations. THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cont’d) 4.11 COMPETITIVE ADVANTAGES We have a number of competitive advantages and key strengths that provide us with a strong platform to compete against other business operators and also to facilitate business sustenance and growth. (a) Innovative products and services One of our Group’s key strengths is our Group’s innovative products and services such as convergence of both prepaid and postpaid mobile plans into one (1) single sUbscription. An attractive altemative to the traditional prepaid and postpaid plans, the convergence plan allows subscribers the flexibility of a prepaid plan, with attractive rates of a postpaid plan. We believe our subscribers will be able to appreciate our simple value proposition and service that is easy to understand, evaluate, buy and use. Further details of our convergence subscription plan are outlined in Section 4.8.2(i)(b) of the Prospectus. (b) Up to date telecommunications system Being a new entrant in the mobile telecommunications industry, we are not technologically restricted by legacy systems and are currently utilising various new telecommunications systems, such as our Convergence Charging System and SOA system. In addition, being a relatively smaller entity and utilising our abovementioned systems, we are able to respond quickly and tailor our products and services to market demand and trends, in particular to the prepaid market, which is our target market. For example, an XOX prepaid subscriber who wishes to change to a postpaid plan would just need to call XOX’s service centre and the change can be completed in minutes without the need to change a new SIM card. This will enable us to tailor our products and services to appeal to our target subscribers. (c) Support from host network provider We have entered into an MVNO services agreement with Celcom in 2008 which allows our Group to leverage on Celcom’s strengths as an established mobile telecommunications service provider. Riding on Celcom’s Digital Network (inclUding 3G services) and extensive international roaming coverage, we are able to reach a large number of subscribers with our products and services. Celcom, being our host network provider, has been providing us with the necessary information, technical and business knowledge, thus enabling us to accelerate our growth and allowing us to better position our Group in the mobile telecommunications industry. (d) Efficient business model As an MVNO, we have substantially lower capital expenditures compared to mobile telecommunications operators with their own networks. We pay our host network provider for the usage of “call” minutes, SMS and other services at a price that is based on the prevailing market retail price point over a three (3) month period less an agreed discount. The above pricing arrangement allows our Group to react to any major shift in pricing policy in the industry. For example, if the market rates for call minutes were to drop, the Group will be able to respond accordingly and yet retain the same percentage of discount from Celcom. This allows our Group to have more flexibility in the pricing of our Group’s products. As a result, we have a highly variable cost structure, which allows us the flexibility to offer very competitive rates to our subscribers. Our low capital expenditure, variable cost structure and flexibility in pricing allow us to compete effectively against larger incumbents in the mobile telecommunications industry, thereby reaching profitability faster than if we were to maintain our own network. 4. INFORMATION ON OUR GROUP (Cant’d) 4.12 TYPES, SOURCES AND AVAILABILITY OF RESOURCES
Our Group outsources the production of our recharge vouchers, starter packs as well as product packaging. These are sourced locally and are common items in the mobile telecommunications industry in Malaysia. Our Group sources our 81M cards directly from our Group’s host network provider. We also outsource the warehousing of our inventory and logistics support to our suppliers and business partners. To date, we have not faced any shortages in the availability of inventory and materials. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
4. INFORMATION ON OUR GROUP (Cont’d) 4.13 TECHNOLOGY USED ITO BE USED We have made sUbstantial investments in telecommunications systems and infrastructure to ensure that our Group is competitive. Please refer to Section 9.4.8(h) of this Prospectus for further details on the amount invested in our Group’s telecommunications systems and infrastructure, Our Group’s main telecommunications systems are as follows:­Convergence Charging System. This system allows us to implement our convergence subscription plans. The concept of a convergence sUbscription is based on the premise of merging multiple accounts into a single subscription. Therefore, a convergence mobile subscription can have both prepaid and postpaid capabilities. This also offers a technological platform for the introduction of our Group’s products and services, As at LPD, the Convergence Charging System is still being developed, however it has the capabilities of allowing our Group to use certain sectionslfunctions of the system, which enable us to introduce our products and services in stages, pending the full development of the Convergence Charging System. SOA System. The SOA System is an approach of managing and integrating multiple systems using multiple protocol and standards. We are currently developing our SOA System to be able to integrate more systems which will enable our Group to further innovate our Group’s product and services, The details of this system are as illustrated below:­XOX’s System Host network provider’S system 8ack end svs emFront end sYStem XOX Social Network Convergence Charging Portal’ f-System Electronic Payment Gateway ~
eStore& ePayment SOASystem
HLRPlatform’ ~~ Sales and Distribution Management System ~
I EricssonSubscriber Care and MultiRelationship Management f-ActivationISystem I I Provisioning Gateway I-Nore:­As at LPO, the Social Network Portal and eStore & ePayment Platform are being developed. Please refer to Section 8.4 of this Prospectus for further details. Users of XOX’s Social Network Portal will be able to change their sUbscriptions parameters, activate andlor deactivate value added services as well as view or make bill payments through the portal. As at LPD, the Social Network Portal is currently being developed. Please refer to Section 8.4 of this Prospectus for the estimated total capital expenditure required for this development. The Electronic Payment Gateway is a system which will enable our Group’s subscribers to make transactions through their banking facility such as payment for bills and recharge vouchers. As at LPD, the deveiopment of the Electronic Payment Gateway has not commenced. 4. INFORMATION ON OUR GROUP (Cont’d) The Social Network Portal and Electronic Payment Gateway are supported by our eStore & ePayment Platform. The eStore & ePayment Platform will allow our subscribers to make purchases via the internet and pay for the products and/or services concurrently. Please refer to Section 8.4 of this Prospectus for the estimated total capital expenditure required for this development. Sales and Distribution Management Services is a system used by XOX dealers to register new subscribers and manage their own dealership accounts, inventory (i.e. starter packs and recharge vouchers) and dealer incentives. With the integration through the SOA System, all SUbscriptions can be managed and handled end-to-end (Sales and Distribution Management Services to Convergence Charging System and the host network provider’s middleware i.e. Ericsson Multi Activation) seamlessly without the need of human intervention. The host network provider’s middleware is a bridge of communications from multiple systems to the HLR. Subscriber Care and Relationship Management System is a system used by XOX’s support personnel (XOX Call Center) to provide subscriber support. The system is integrated to the Convergence Charging System to enable full handling of subscribers’ profiles and accounts such as profile updating, checking of airtime and bill amount and addition or deletion of value added services to the SUbscriber’s respective convergence subscription plans. Provisioning Gateway provides a bridge between XOX services and our host network provider’s middleware system, known as Ericsson Multi Activation, via the SOA System. Provisioning Gateway is a front end system which was developed as it functions to provide a Graphical User Interface based system for XOX personnel to conduct provisioning related functions such as batch purging of terminated subscriber profiles. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON OUR GROUP (Cont’d) 4.14 APPROVALS, MAJOR LICENSES AND PERMITS OBTAINED Details of the approvals obtained by our Company for the Listing from the MITI, SC and Bursa Securities together with the conditions imposed by these authorities and status of compliance are set out in Section 6.1 of this Prospectus. Other approvals, major licenses and permits obtained by our Group as at LPD are set out in the table below:­Company  Authority  Date of Issusnce  Date of Expiry  Description  Major Equity Conditions Imposed  Status of Compliance (MetINot MeV Will Be Met)  XOXCom  Ministry of  I 19 Nov 2007  18 Nov 2017  I Communications  and  Requirement and shareholding:­ Met  Energy, Green  Multimedia  Act  1998  Technology and  Communications  and  i)  The  licensee  shall  notify  Water (formerly  Multimedia  (Licensing)  the  Minister,  in writing,  of  known as  Regulations  2000  Individual  any  restructuring  or  Ministry of  Licence  rationalisation  of  the  Energy, Water  Licence No.: NSP/1/2000f77  licensee’s  corporate  and  structure,  Communications  Malaysia)  ii)  The  licensee shall  ensure  that the Bumiputera equity  in the licensee is not less  than 30% for so long as the  licensee remains a private  company  or  public  company as defined under  the  Companies  Act  1965  and is not listed on  Bu rsa  Malaysia,  The  licensee  shall have 1 year from the  date  of  this  licence  to  ensure  compliance  with  this condition.  XOXCom  MCMC  14 Sep 201 0 I 13 Sep 2011  I ASP(C) Applications Service I Nil  Provider Class Licence  ref  no:  SKMM(S)07­ LD/ll0/8/3f76911/ad
60 4. INFORMATION ON OUR GROUP (Cont’d) Company  Authority  Date of Issuance  Date of Expiry  Description  Major Equity Conditions Imposed  Status of Compliance (MetlNot Metl Will Be Met)  XOXCom  Bank Negara Malaysia  26 Sep 2008  Nil  Approval for Issuing Designated Payment Instrument  Nil  – ref no:  JDSP/POU4200/S0/ZR/NO  XOXCom  MCMC  21 Apr 2008  Nil  Approval for number “Mobile Cellular for MVNO Services”  Nil  – ref no: SKMM(T)06­NPD/100.052/Jld. 01 (004)  XOXCom  Royal Malaysia Customs  27 Mar 2009  Nil  Telecommunication Services Operator ref no: W10-CP- Nil  – 09000294/2009  XOX Media  Multimedia Development Corporation Sdn Bhd  09 Jul2008  Nil  Multimedia Super Corridor Status ref no: CS/3/5246(11 b)  To Infonn Multimedia Development Corporation Sdn Bhd any change in the equity structure or shareholding structure of the Company or changes that may affect the director or operation of the Company.  Met  XOX Media  Bank Negara Malaysia  21 Jul2008  Nil  General Permission under the Exchange Control Act 1953  Nil  – ref no: KL.EC.150/6  XOXCom  MCMC  15 Jan 2010  Nil  Cellular Number Approval  Nil  – ref no: SKMM(T)06­ NPD/100.052/Jld.01 (16)
61
4. INFORMATION ON OUR GROUP (Cant’d) Company  Authority  Date of Issuance  Date of Expiry  Description  Major Equity Conditions Imposed  Status of Compliance (MetINot MeV Wi II Be Met)  XOXCom  MCMC  20 April 2010  Nil  Cellular Number Approval ref no: SKMM(T)06­NPD/100.011/Jld.02(35)  Nil  – XOXMedia  MCMC  7 Jul2010  Nii  ASP(C) License Applications Service Provider Class Licensee ref no: SKMM(S)07­LD/110/6/3176951/fmm  Nil  – XOXMobile  Royal Malaysia Customs  16 Jan 2011  Nil  Telecommunication Services Operator license no: W10-CP­11000081/2011  Nil  –
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4. INFORMATION ON OUR GROUP (Cont’d) 4.15 BRAND NAMES, REGISTRATIONS, PATENTS, TRADE MARKS, LICENSES, TECHNICAL ASSISTANCE AGREEMENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS Save for the MVNO services agreement which was entered into with Celcom dated 15 September 2008 and as disclosed in Section 4.18(c), our Group does not have any other licenses, techmcal assistance agreements and other Intellectual property rights Our Directors have confirmed that the XOX Group IS not trading under any trademarks, other than the trademarks as disclosed below. We have applied for the following trademarks to be registered In Malaysia, the details of which are as follows:­
Description of trademark No. Trademark Applicant Application number I Place of application 1. Telecommunications, bearing the XOXCom 08000900 Malaysia respective trade name, included under Class 38 of the Nice Classification ~5;;,;;1rTfU 2. Telecommunications, bearing the XOXCom 08016726 Malaysia respective trade name, included under Class 38 of the Nice Classification 3.
Telecommunications, bearing the XOXCom 07024022 Malaysia respective trade name, included under Class 38 of the Nice Classification
63
4. INFORMATION ON OUR GROUP (Cont’d) No. 4.  Trademark  Applicant
XOXCam  5.   XOXCam
Application number I Place of application 07024023 Malaysia 07024024 Malaysia Description of trademark Telecommunications, bearing the respective trade name, included under Class 38 of the Nice ClassIfication Telecommunications, bearing the respective trade name, included under Class 38 of the Nice Classification
6. I I III Telecommunications, bearing the XOXCam I 07024025 I Malaysia respective trade name, included under Class 38 of the Nice Classification 7. J, Jh ~ —­
Telecommunications, bearing the XOXCam I 07024026 I Malaysia respective trade name, included under Class 38 of the Nice Class.icatian 8.
Telecommunications, bearing the XOXCam 07024027 Malaysia respective trade name, included under Class 38 of the Nice Classification 64
4. INFORMATION ON OUR GROUP (Cont’d) No.  Trademark  Applicant  Application number I Place of application  Description of trademark  XOXCom  2010000240  Malaysia  Telecommunications, bearing the respective trade name, included under Class 38 of the Nice Classification  XOXCom  2010000241  Malaysia  Telecommunications, bearing the respective trade name, included under Class 38 of the Nice Classification

Note:­Under Section 5 of the Trade Marks Regulations 1997, telecommunication services are classified as Class 38 as prescribed in the Third Schedule of the Regulation. The Nice Classification is based on the Nice Agreement, which was concluded in 1957, concerning the international classification of goods and services for the purposes of the registration of marks. It comprises class headings, which describes the nature of goods and services in each of the fhirty four (34) classes of goods and eleven (11) classes of services. 65
4. INFORMATION ON OUR GROUP (Cont’d) 4.16 STRATEGIES AND MODES OF MARKETING 4.16.1 Business Strategy (i) Focus on our target market As a new and upcoming mobile telecommunications service provider, our business focus is centred on the existing prepaid market. Prepaid subscribers pay in advance to their account to allow usage and have lower financial risk compared to postpaid subscribers who pay in arrears. Prepaid subscribers accounted for approximately 79.8% of the total mobile phone subscribers in Malaysia in the fourth quarter of 2010 (Source: Independent Market Research Report of The Mobile Virtual Network Operator Industry In Malaysia prepared by Dun & Bradstreet (O&B) Malaysia Sdn Bhd). This represents a significant portion of the total mobile phone subscriber market which our Group can potentially market our products and services to. In addition, the mobile penetration rate for Malaysia in the fourth quarter of 2010 stands at 116.6%. The mobile penetration rate in Malaysia is not yet viewed as saturated, as Singapore and Hong Kong Special Administrative Region have achieved mobile penetration rates of 143.6% in December 2010, and 180.1% in May 2010, respectively (Source: Independent Market Research Report of The Mobile Virtual Network Operator Industry In Malaysia prepared by Dun & Bradstreet (O&B) Malaysia Sdn Bhd). Moving forward, we plan to continue to penetrate the prepaid market and also grow our market share by continuing to tailor our products and services to our target subscribers’ requirements via our innovative mobile solutions and also by leveraging on our host network provider’s strengths. (ii) Product and service innovation Since commencing business in 2009, we have constantly strived to innovate and adapt to our subscribers’ needs. For example, we introduced the Short Call feature, which allows our subscribers to enjoy a rate of RMO.08 for the first 15 seconds of a call to all mobile networks, irrespective of the reload amount. We also launched our XOX-RT Super 88 plan on 11 June 2010 and Hybrid plan on 28 October 2010, which is a fully convergent SUbscription plan combining the flexibility of a prepaid plan with the benefits of a postpaid plan. Moving forward, we plan to introduce a suite of new products and services which are designed to be attractive to our target market. We will launch our Mobile Wallet payment system in late 2011, which can, among other things, be used to facilitate retail transactions at participating outlets. Please refer to Section 4.23.1 of this Prospectus for further details on our Group’s Mobile Wallet. As part of our continuous products and services innovation, we intend to continue our efforts to address the evolving needs of our subscribers and offer innovative and popular products and services ahead of our competitors. 4. INFORMATION ON OUR GROUP (Cant’d) (iii) Leverage on scale and infrastructure to drive profitable growth As an MVNO, our business model is highly scalable. This allows us the ability to expand without being restricted by bottlenecks in terms of infrastructure and other capital commitments. Since the commencement of our business in 2009, we have managed to acquire a subscriber base of approximately 395,000 subscribers. By leveraging on the advantages of our predominantly variable cost structure, and also the strengths of our host network provider, we expect our growing subscriber base to translate into improved cost economies without the need for substantial capital investment. (iv) Brand awareness As a new player in the mobile telecommunications services industry, we do not yet have a strong and recognisable brand image. As such, as part of our business strategy, our Group aims to create and maintain a strong brand image which distinguishes us from the incumbent mobile network providers and other MVNOs currently in the market. Our goal is to attract and retain subscribers through our innovative products and services offerings which are flexible, easy to understand and of good value. Through aggressive advertising and also marketing efforts such as sponsorship of events and effective subscriber retention programmes, our Group aims to enhance and strengthen XOX’s brand image and increase its brand awareness. 4.16.2 Modes of Marketing We employ the following marketing initiatives to cultivate awareness of XOX’s products and services, securing new subscribers as well as retaining XOX’s subscribers:­(i) Traditional trade channels We distribute our products and services through our appointed area sales distributors throughout Malaysia, who will then distribute it to their respective dealers. These area sales distributors oversee an average of approximately 400 dealers in their respective areas, with a combined total of approximately 7,000 dealers throughout Malaysia. Products sold to the distributors/dealers are not returnable except for defective SIM cards and recharge vouchers. As at LPD, our Group had entered into separate agreements with all of our 17 area sales distributors, which specify, amongst others, purchasing and payment terms and the areas in which the area sales distributors can operate in. These area sales distributors can only distribute XOX products. Our Group had also entered into agreements directly with its dealers which specify, amongst others, dealers’ incentives such as travel incentives trips, to encourage the dealers in achieving higher sales. The agreement would also specify, amongst others dealers’ commission and payment terms which XOX would need to fulfill towards the respective dealer. However, our Group does not have direct dealings with the dealers except for the payment and computation of the dealers’ incentives. 4. INFORMATION ON OUR GROUP (Cant’d) We are not highly dependent on the abovementioned appointed area sales distributors as these distributors are easily replaceable with any of the 400 other dealers in the respective area. Our Group intends to continue to expand our distribution network of retail partners in line with our business growth. To manage the relationship with the traditional trade channels, we have a dedicated sales team, comprising of five (5) persons, to service these area sales distributors, We provide our Group’s sales representatives with in-depth product and sales training to allow them to explain our products and services in a simple and clear manner to the area sales distributors and dealers, (ii) XOX service centres We have established our own service centres operated by xax as well as built exclusive partnerships with selected area sales distributors and key dealers to operate exclusive service centres that sell our mobile products and services. These service centres are operated independently by the area sales distributors or key dealers and there are no formalised arrangements between xax and these service centres, As at LPD there are eight (8) such service centres throughout Malaysia as follows:­No.  Siale  Address  1,  Kuala Lumpur  No.33, Jalan Melro Perdana Timur 1 Taman Usahawan Kepong 52100 Kepong, Kuala Lumpur  2,  Kuala Lumpur  21, Lorong Thambi 2 Off Jalan Changkal Thambi Dollah Pudu, 55100 Kuala Lumpur  3.  Selangor  No,54-G, Jalan Puteri 1/4 Bandar Puteri 47100 Puchong, Selangor  4,  Kedah  Lot 1-11, Sentosa Plaza Jalan Pulra 05100 Alor Setar, Kedah  5,  Terengganu  77-A Ground Floor Jalan Tok Lam 201 00 Kuala Terengganu, Terengganu  6.  Perak  No AG-4 Great World Cenlre 197 & 199,Jalan Kampar 30250 Ipoh, Perak  7.  Kuala Lumpur  95-1, Jalan Mega Mendung, Old Klang Road, 58200, Kuala Lumpur  8.  Penang  112, Jalan Terengganu 10460, Georgetown Penang
These service centres have the capability to, amongst others, replace lost 81M cards, handle and process billing and payment transactions, change of subscription plans, change of subscription ownership and entertain enquiries. 68 4. INFORMATION ON OUR GROUP (Cont’d) (iii) e-Pay terminals Apart from the traditional trade channels, we have also appointed e-Pay to distribute and sell our recharge vouchers at all e-Pay’s terminals within Malaysia. This allows our subscnbers the convenience to purchase recharge vouchers throughout Malaysia as e-Pay is widely available at:· (i) Major petrol stations;
(ii) Pharmacy chains;

(iii) Convenient stores; and (iv) Other major retail outlets, such as Chinese medical halls, electrical, camera, sundry, optical and watch shops. (iii) 7 -Eleven convenience stores Our Group has also appointed 7-Eleven Malaysia Sdn Bhd to distribute and sell our recharge vouchers in more than 1,100 7-Eleven convenience stores in Malaysia. (iv) MOL
Our Group has also appointed MOL AccessPortal Berhad which provides “MOL points” services at more than 1,300 outlets within Malaysia such as cyber cafes, “Popular Bookstore” outlet and “Singer” outlets to distribute and sell our recharge vouchers.
(v) Internet banking and ATM
As at LPD, we have also entered into contractual arrangements with three (3) major banks in Malaysia to offer our mobile subscribers the convenience in the purchase of recharge vouchers and payment of bill statements through Internet banking and their respective ATMs.
(vi) Direct sales teams

We have a dedicated direct sales team to target the business market segment. This team consists of selected sales staff of selected key dealers of our Group and are trained by our Group to promote our products and services. These teams actively identify and promote XOX’s products and services directly to potential subscribers. This differs from the traditional trade dealers, where subscribers will walk in to bUy XOX products. (vii) Outsourced acquisition team We have also engaged third parties who specialise in acquisition and registration of subscribers. These outsourced teams will employ promoters and road runners throughout Malaysia and send them to designated high traffic places to attract, promote and sell XOX mobile products and services to the pUblic. Subscribers may purchase XOX starter packs, top-up their existing lines and/or airtime directly from the out-sourced promoterslroad runners. 4. INFORMATION ON OUR GROUP (Cont’d) (viii) Sponsorship As part of our marketing initiatives, we have conducted sponsorships for events to enhance our brand awareness throughout Malaysia, Such sponsorships could be in the form of print media or the setting up of a booth in the event area, Some of the major events which XOX had sponsored include:­Events I ProQrammes ONE Chap Goh Mei Festival Ai FM Ai Xin Sponsorship 2011 988 KYAN 988 K6 Gang Launch Ultimate Power Group Nian A Cup of Love television S8 ries Celebrity Channei SpotHte Teen Idol Contest  Tvne of Event Event in conjunction with Chap Goh Mei, Chinese New Year celebration Performance event in conjunction with Chinese New Year celebration Evening Drivetime segment on a local radio station trom 5p,m, to 8p,m, Evening Drivetime segment on a local radio station from 5p,m, to 8p,m, Live reality talent show Mandarin television drama series Live outdoors Chinese entertainment concept SpotHte magazine’s event -the Mr & Mrs Campus  Period On 17.02.2011 On 09,01,2011 From 07,11,2010 to 06,09,2011 From 07,11,2009 to 06,11,2010 From 13,11,2008 to 06,06,2009 From 05.07,2009 to 18,10,2009 From 17,04,2009 to 10,05,2009 From 01,06,2009 to 15,08,2009
(ix) Strategic partnership Our Group has entered into strategic partnerships with our Group’s co­branding business partners to promote the XOX brand name, As a means of leveraging on the strength of each business partner, XOX will offer its starter packs and/or recharge vouchers in conjunction with specific promotional packages of each respective business partner. As at LPD, XOX Group has only one (1) strategic partnership, which is with “Red Tomato Economics and Lifestyle Weekly”, There are currently no on­going negotiations for any new strategic partnerships, For example, under the partnership with a local weekly lifestyle newspaper, subscribers of XOX-RT Super BB plan would receive a one (1) year free membership and subscription to the local weekly lifestyle newspaper, Subscribers would also receive attractive cash, travel and discount vouchers from various lifestyle vendors, Such strategic partnerships are designed to increase our appeal to the specific target markets of each business partner, and are expected to increase consumer awareness and sales of our products and services, 70 4. INFORMATION ON OUR GROUP (Cont’d) (x) Customer Churn and Retention Program Customer chum can be either voluntary or involuntary due to non-payment and/or prolonged expired period which resulted in a termination of accounts. Voluntary customer churn could be due to a range of factors which includes dissatisfactory network services, lower tariff rates by other mobile operators and products and/or services offered that are not in line with their respective needs. These factors provide our Group with an opportunity to acquire these subscribers. We actively use subscriber lifecycle management initiatives to improve customer retention. Within 30 days of activation, we will monitor the subscriber’s recharge behavior and introduce loyalty rewards, surprise rewards and bonus programmes as well as good customer service to ensure subscribers remain active. The loyalty rewards, surprise rewards and bonus programmes aim to reward XOX’s subscribers for their loyalty and continuing support, enticing subscribers to increase usage and attracting subscribers to stay with XOX as well as subscriber acquisitions. Loyalty, surprise rewards and bonus programmes vary in terms of mechanism, rewards and durations. Loyalty points are earned every time subscribers make a recharge. The accumulated loyalty points can used to redeem free air time, free SMS, free Short Calls, product vouchers from participating business partners and co­branding business partners, and is transferable within family members on the “Family and Friends” package and “Closed User Group” package i.e. supplementary lines. 4.17 QUALITY CONTROL PROCEDURES OR QUALITY MANAGEMENT PROGRAMMES Quality customer service is of paramount importance in the mobile telecommunications industry. To ensure an outstanding customer service experience, we have outsourced our call centre service to a professional call centre (“Call Centre”) which has the experience and capability in handling our subscribers’ enquiries. The Call Centre employs professional call agents who not only have a thorough understanding of our Group’s products and services but also able to articulate well in the preferred language of the subscriber. This level of customer services is known as First Level Service Support. In emphasising our Group’s commitment to our subscribers, we also provide our own internal personnel to support the Call Centre with regards to any technical issues encountered by the subscriber such as fraud cases, non-functionality of SIM cards, network inaccessibility and registration and activation problems. This level of customer service is known as Second Level Service Support. In the event that we are still not able to fully resolve any technical and unusual problems, we will forward such incidences to our vendor partners and/or our host network provider for technical assistance. This is known as Third Level Service Support. We seek to ensure a user-friendly and effective customer service experience through the abovementioned multi-level customer service support programme, which we believe will enable us to retain our subscribers and reduce churn rates. 4. INFORMATION ON OUR GROUP (Cont’d) 4.18 DEPENDENCY ON ANY CONTRACT, ARRANGEMENT, DOCUMENT OR OTHER MATTER (a) Dependency on Registration, Patents and Intellectual Rights Save for the registration, patents and intellectual rights disclosed in Section 4.15 of this Prospectus, our Group is not dependent on any other registration, patents and intellectual rights. (b) Dependency on Major Licenses
Save for the major licenses disclosed in Section 4.14 of this Prospectus, our Group is not dependent on any other major licenses.
(c) Dependency on Industrial, Commercial and Financial Contracts

We are highly dependent on the contract entered into with Celcom dated 15 September 2008 in which Celcom agreed to supply or procure the supply of the network services to XOX Com, a proposed wholly owned subsidiary of our Group. XOX Com shall use the aforementioned network services to provide prepaid and postpaid mobile voice and data services (“MVNO Services”) to MVNO Subscribers in Malaysia. The salient terms of the agreement are as below. The terms used in this section shall have the respective meanings as ascribed thereto in the MVNO services agreement:­This Agreement shall be for a period of five (5) years, with an automatic extension of five (5) years and another automatic further extension of another five (5) years. Covenants of XOX Com XOX Com shall not make reference to Celcom’s intellectual property rights (“IPR”), including Celcom’s registered and unregistered trade marks, logos, indicia, get-up, trade name, business name, domain name, or any reproductions or representations thereof within the Celcom Group (where ”the Celcom Group” means Celcom and its related corporations by virtue of Section 6 of the Companies Act, 19651 (“the Celcom Trade Marks”), when marketing the MVNO Services to MVNO Customers (where “Customers” refer to subscribers including companies), and that the advertising and marketing material used to promote the MVNO Services must be entirely in Chinese and English languages. XOX Com must not represent that it is Celcom or within the Celcom Group or misrepresent the manner in which or the extent to which it uses the Celcom Digital Network, or that it is authorised to act on behalf of Celcom or any entity within the Celcom Group. The Parties further agree that XOX Com must only provide the MVNO Services to end-users and not to other Licensed Operators (where “Licensed Operators” refer to other mobile telecommunication operators licensed and approved by MCMC), and that XOX Com has the sole responsibility for customer service, billing and resolution of billing disputes. XOX Com shall also bear the entire credit risk of the MVNO Customer Database. The Parties also agree that the MVNO Services must be provided only to MVNO Customers in Malaysia, apart from roaming services mutually agreed by the Parties, and that XOX Com must not solicit Customers for the MVNO Services outside Malaysia. 4. INFORMATION ON OUR GROUP (Cont’d) XOX Com must not advertise, market, promote or otherwise make known to the MVNO Customers any services provided by Celcom but expressly excluded from this Agreement (“Excluded Services”), whereby in the event any MVNO Customer uses the Excluded Services in any manner whatsoever, MVNO shall pay Celcom an agreed amount for such usage. XOX Com must not, whether by itself or any third party, oller for sale, sell, resell or conduct wholesale activities, i.e. selling of airtime, of the Celcom Services or the network owned or operated by any entity within the Celcom Group for the carriage of communications (“the Celcom Digital Network”) (or any part of it) to any person in any form or manner whatsoever, and to rebrand the MVNO Services. Minimum Commitment Level XOX Com shall adhere to the minimum commitment levels as agreed by the Parties as per Schedule 4 of this Agreement which are as follows:­Year /from Commencement Date’)  Minimum Commitment for the year  1  RM17.3 million  2  RM61.5 million  3  RM109 million  4  RM155 million  5  RM199 million
Note:­# The Commencement Date for the minimum commitment level is 1 JanuBtY 2010 which is the date of the Commercial Launch (where “Commercial Launch” means the date agreed between XOX Com and Celcom when MVNO first provides, or offers to provide, prepaid mobile voice and data services or any part of those services to MVNO customers, other than to a controlled group of persons tor test or trial purposes). Minimum Commitment refers to the total wholesale Charges (“Charges” mean the charges and amounts payable by XOX Com to Celcom pursuant to or under this Agreement and includes without limitation the charges and amounts payable pursuant to or in accordance with Clause 9 (Charges & Revenue Share) and Schedule 2 (Charges & Revenue Share) paid by XOX Com to Celcom for the Celcom Services (excluding taxes, if applicable). XOX Com’s achievement of the Minimum Commitment will be computed on a quarterly basis, based on a simple average of the Annual Commitment for the relevant year divided over 4 quarters (“Quarterly Minimum Commitment”). In the first quarter in a year, (a) if XOX Com has exceeded the Quarterly Minimum Commitment, the surplus can be credited to the next quarter’s pertormance; and
(b) if XOX Com has failed to achieve the Quarterly Minimum Commitment, it shall pay Celcom in cash a sum equal to the shortfall within 30 days.

In the second, third and fourth quarters in a year, the above provisions shall be repeated except that the figures shall be on a cumulative basis for the relevant year and any surplus at the end of that year cannot be credited to the next year’s pertormance. For the first only, XOX Com’s pertormance will be computed in aggregate for that whole year at the end of the fourth (4th) quarter of that year, and no on a quarterly basis. 4. INFORMATION ON OUR GROUP (Cont’d) Notwithstanding the above, if XOX Com has failed to achieve 3 consecutive Quarterly Minimum Commitment, such failure shall be deemed as an operational Breach and Celcom shall be entitled to exercised its right under Clause 7 (Rectification Plan for Operational Breaches), Clause 7 (Rectification Plan for Operational Breaches) 7,1 Discretionary If Celcom believes the MVNO has breached its obligations and such breach is capable of being remedied in Celcom’s reasonable opinion without jeopardizing Celcom’s compliance with Laws and its Licences (“MVNO Breach”), then Celcom may, but shall not be obliged to, afford MVNO with an opportunity to rectify the MVNO Breach without prejudice to any other rights and remedies which may be available to Celcom at law and equity, This Clause 7 (Rectification Plan) is without prejUdice to Celcom’s other rights and remedies including the rights under Clause 21 (Termination) and any rights to seek injunctive or interim relief in respect of the MVNO Breach, a) Celcom must give written notice to MVNO of the alleged MVNO Breach (“Breach Notice”) which must make specific reference to this Clause 7 (Rectification Pian) on the procedure for rectification and shall include: i) the details of the breach according to the best of Celcom’s knowledge; and i1) the steps which Celcom considers should be taken by MVNO to make good the breach, to the extent reasonable given Celcom’s knowledge of the breach, b) The Parties will meet within 2 calendar days, or such other penod as may be mutually agreed by the Parties but no later than 7 calendar days, of MVNO receiving a Breach Notice from Celcom, c) At the meeting referred to in Clause 7.1 (b), MVNO must either: i) demonstrate to Celcom’s satisfaction that the alleged MVNO Breach (or any part of it) has not occurred; or ii) propose a plan of action, taking into account any steps proposed by Celcom pursuant to Clause 7.1 (a) above, to be undertaken by MVNO (including as to timing) to correct the alleged MVNO Breach (or any part of it) and to prevent similar breaches in the future (“MVNO Rectification Plan”), By close of business on the day of the meeting or within such time as may be agreed mutually by the Parties from time to time, MVNO will serve on Celcom, in accordance with Clause 27,9 (Notices), a written copy of the MVNO Rectification Plan. d) If Celcom is not satisfied with the MVNO Rectification Plan (or any part of it) Celcom either: I) reject the MVNO Rectification Plan (or any part thereof) within 7 calendar days of receiving it and elect to exercise its rights under any part of this Agreement allowing the exercise of rights in light of an MVNO breach (or any part thereof) including clause 21 (Termination) and 26 (Resolution of Dispute) 4. INFORMATION ON OUR GROUP (Cont’d) ii) propose amendments within 7 calendar days of receiving it, in which case, MVNO shall give the consideration to any amendments proposed by Celcom under this clause 7.1 (d)(ii) and resubmit a revised MVNO Rectification Plan for Celcom’s review within 7 calendars days of receiving Celcom’s proposed amendments, and if the revised MVNO Rectification Plan is not satisfactory to Celcom, Celcom may reject it and exercise it’s rights described in clause 7.1 (d)(i). Obligations of XOX Com XOX Com shall also be responsible to obtain all necessary licences for the provision of the MVNO Services in Malaysia and the relevant blocks of Service Numbers for the MVNO Services (“Service Numbers” means any telephone, data or other service number which is capable of being used as an individual network address on a mobile digital network) from the Malaysian Communications and Multimedia Commission (“MCMC”). Celcom’s Right to Sub-contract Without prejudice to XOX Com’s rights against Celcom, Celcom may perfonn any of its obligations under this Agreement by arranging for them to be performed by any third party, including a related corporation of Celcom. Refusal to Provide Services or Suspension of Services Celcom may refuse to provide Celcom Services, or require XOX Com to refuse to provide or suspend provision of MVNO Services, to any specified Service Number or group of Service Numbers, by giving prior notice to MVNO of such refusal or suspension, in the events of suspected fraud or illegal use, the performance of maintenance by Celcom, or the reduction or prevention of interference within the Celcom Digital Network or the operation or quality of Celcom Services, the Celcom Digital Network or any network whether located within or outside Malaysia that is owned, controlled or operated by a third party who is not a party to this Agreement (”Third Party Network”), any outage in the Celcom Digital Network or any failure in Celcom Service where Celcom has withdrawn access to such similar services by Celcom’s customers; or to comply with, or avoid non-compliance with, any relevant laws relating to Service Numbers. Assignment Neither party may assign or attempt to assign any right or obligation under this Agreement without the written consent of the other party, which must not be unreasonably withheld. XOX Com must not assign, novate nor transfer any of its rights or obligations under all terms and conditions for the MVNO Services (“MVNO T&Cs”) to any person without the prior written consent of Celcom, except to the extent expressly provided in favour of an operator in replacement of XOX Com (“Replacement Operator”), whereby in the event the ownership in the MVNO Customer Details are assigned to Celcom pursuant to termination for cause by Celcom, Celcom may appoint a Replacement Operator of its own choice or may elect to undertake the role of the Replacement Operator itself. 4. INFORMATION ON OUR GROUP (Cont’d) Limits on Quantum of XOX Com’s Liability MVNO’s aggregate liability (other than a liability to pay the Charges) shall in no event exceed in the aggregate RM20,OOO,OOO in any year; or RM20,OOO,OOO after expiry or termination of this Agreement, save and except for breach or non-compliance of confidentiality of Confidential Information (hereinafter defined), and in the event Celcom or XOX Com is the sUbject of legal action, where the Celcom Group acquires, for itself or its designee, all information about MVNO Customers collected after the date of this Agreement in the course of the provision of or subscription for the MVNO Services (“the MVNO Customer Details”) pursuant to termination by Celcom of this Agreement. For the purpose of this Agreement “Confidential Information” shall mean any information and data, whether in printed or electronic format, including but not limited to any kind of business, commercial or technical information and data obtained from either party in connection with the Agreement which is marked “Confidential” and/or “proprietary” or which, in accordance with a reasonable man’s judgment, is confidential, due to its nature or the circumstances under which it is disclosed and the disclosure of which could adversely affect the other party’s business irrespective of the medium in which such information or data is embedded and including any copies or abstracts made thereof as well as modules, samples, prototypes or parts thereof. Termination for Cause by Celcom In addition to any other right of termination provided under this Agreement, Celcom may terminate this Agreement with immediate effect by giving written notice to XOX Com if:­(a) any competitor of Celcom (“Celcom Competitor”) acquires a Material Stake (hereinafter defined) in XOX Com and Board Control (hereinafter defined); or
(b) any person (including a Celcom Competitor) acquires a Material Stake in XOX Com and Board Control, either:­
(i) without Celcom being notified of such acquisition, or
(ii) where Celcom has been notified of such acquisition and Celcom views such acquisition as unacceptable to Celcom in its absolute discretion; or

 

(c) XOX Com has breached the provisions in relation to Celcom Trade Marks and IPR; or
(d) XOX Com ceases to be engaged or involved in the provision of part or all of the MVNO Services; or
(e) XOX Com fails to pay any outstanding charges, amount(s) or invoice(s) due and owing by XOX Com to Celcom for a period of 14 calendar days following the date by or on which such amounts should have been paid; or
(f) Celcom or XOX Com is the subject of legal action, including injunctive relief being awarded against Celcom or XOX Com (as the case may be), that may materially impact the ability of Celcom and/or XOX Com to continue fulfilling its obligations under this Agreement. In addition to the consequences of termination set forth under this Agreement XOX Com shall not be entitled to receive any compensation in respect of the termination of this Agreement pursuant to this sub-clause (f).

76 4. INFORMATION ON OUR GROUP (Cont’d) For the purpose of the sub-clauses (a) and (b) above, “Material Stake” means an actual or beneficial interest alter the date of this Agreement, whether directly or indirectly, in share or other instruments allowing the holder of the said shares or instrument to exercise 5% of more of the voting rights of shareholders or members of XOX Com and “Board Control” means the right or ability to control the composition of a majority 01 the board of directors of the XOX Com or a right or ability to control a majority of board 01 directors of XOX Com. Termination for Cause by either Party In addition to any other right of termination provided under this Agreement, either party may terminate this Agreement immediately by giving notice in writing to the other party, being a party in default pursuant to one or more of the sub-clauses in this clause, if:­(a) the party in default has committed a breach of this Agreement which is not fully remedied by the party in default within 30 calendar days of written notice by the other party specifying the breach and requiring its remedy or within the period specified in the proposed plan of action by Celcom in the event of any breach by XOX Com to be undertaken by XOX Com (including as to timing) to correct the alleged breach (or any part of it) and to prevent similar breaches in the future (“Rectification Plan”) agreed.
(b) anyone or more of the following occurs (“Termination Events”):­
(i) any distress or execution is levied on the party in default’s property; or
(ii) the party in default becomes insolvent or unable to pay its debts; or
(ii) a receiver and/or manager (court appointed or otherwise), administrator, administrative receiver and/or manager is appointed over the whole or any material part of the party in default’s assets or undertakings; or

(iii) a liquidator (provisional or permanent) is appointed in the party in default; or (iv) the party in default enters into or makes any composition, reconstruction, restructuring, compromise and/or any other arrangement for the benefit 01 its creditors and/or members; or
(v) any petition or resolution for the Winding up of the party in default is presented or passed; or

(vii) the party in default shall suffer any proceedings analogous to those described in this sub-clause (b) and such events have a material adverse effect on the party in default’s ability to perform its obligations in accordance with this Agreement;
(c) an event due to any reason outside that party’s reasonable control (“Force Majeure Event”) continues for 60 calendar days or more; or
(d) any licenses, approvals or assignments required by the party in default to fulfil its Obligations under this Agreement are revoked, lost or suspended for a period of time that may materially impact the ability of a party to continue fulfilling its obligations under this Agreement.

4. INFORMATION ON OUR GROUP (Cont’d) Each event of tennination provided under this clause or elsewhere under this Agreement shall be construed as independent of one another and a party may rely on anyone or more of the events of tennination provided under this clause or elsewhere under this Agreement. Acquisition of Intellectual Property Rights Celcom may acquire all IPR, other rights, title and interest in the database residing on Celcom infrastructure and containing MVNO Customer Details for all MVNO Customers (“MVNO Customer Database”) from XOX Com with effect from expiry of this Agreement, date of termination of this Agreement (”Termination Date”) or the first day of the extended period during which this Agreement is to continue from the Tennination Date (“Transitional Period”), whichever is earlier (”Take-Over”), where such acquisition may be at no cost to Celcom it:­(i) Celcom tenninates this Agreement pursuant to tennination for cause by Celcom, or where MVNO is the party in default and default is not fully remedied, or in the event of any Termination Events, or in the event any licenses, approvals or assignments required by the party in defau~ to fuJlil its obligations under this Agreement are revoked, lost or suspended for a period of time that may materially impact the ability of a party to continue fulfilling its obligations under this Agreement (“Material Breach”); or
(ii) MVNO elects not to renew this Agreement for the extension period of 5 years from the expiry of the initial term of this Agreement (“Extension Period”); or

(iii) pursuant to directions from MCMC, MVNO may not continue to be a party to this Agreement or MVNO must cease to provide the MVNO Services. However, such acquisition shall be for a fee agreed between the Parties if:­(i) Celcom elects not to renew this Agreement for the Extension Period despite MVNO’s desire to renew; or
(ii) MVNO tenninates this Agreement where Celcom is the party in defau~ and default is not fully remedied, or in the event of any events for termination of this Agreement, or in the event any licenses, approvals or assignments reqUired by the party in defaun to fUlfil its obligations under this Agreement are revoked, lost or suspended for a period of time that may materially impact the ability of a party to continue fuJliliing its obligations under this Agreement; or

(iii) this Agreement tenninates pursuant to Force Majeure; or (iv) this Agreement tenninates pursuant to Regulatory Events (hereinafter defined) and Legislative Events (hereinafter defined) which will have a material impact on the subject matter of this Agreement or on the inability of one or both of the parties’ ability to perfonn their obligations under this Agreement; or
(v) this Agreement tenninates for any reason other than those provided in this provision in relation to Take-Over.

For purposes of this Agreement, “Regulatory Event” occurring in relation to a party means either or both of the following:­(a) the declaration, addition, variation or removal of a condition applying to any one or more of that party’s licences or approvals, authorisations or 4. INFORMATION ON OUR GROUP (Cont’d) assignments under any relevant laws required to fulfil its obligations under this Agreement; (b) the giving of a direction to that party by the minister or MCMC or any other regulatory or governmental body; and “Legislative Event” means:­(a) the enactment, amendment. replacement or repeal of the Communications and Multimedia Act or laws related to communications and multimedia; or
(b) the making of a direction, notice, or determination by MCMC that all or any part of this Agreement contravenes any provision of any laws; or
(c) the issue, registration, making, promulgation, amendment or replacement of any laws by MCMC or a court of law.

4.19 RESEARCH AND DEVELOPMENT XOX does not currently have a dedicated research and development team. However XOX collaborates with its key telecommunications system vendors to continuously assess the suitability of XOX’s products and services in meeting subscribers’ demands as well as identifying areas to improve our Group’s systems which will enable our Group to develop innovative mobile service products and services for the Malaysian market. 4.20 INTERRUPTIONS IN BUSINESS IN THE PAST TWELVE (12) MONTHS There have been no interruptions to the business of our Group that significantly impaired our Group’s business performance during the past twelve (12) months. 4.21 MAJOR CUSTOMERS The table below lists our Group’s customers that represented 10% or more of the total Group revenue for FYE2009 and FYE2010. There were no customers which contributed 10% or more of the total Group revenue for FYE2007 and FYE2008 as our Group only commenced business operations in 2009:­No.  Name of customer  Contribution to total Group revenue (0/01  Length of ralationship  Products provided  1. 2.  Chat Mobile (M) Sdn Bhd FYE2009 FYE2010 Sonicline Mobile Sdn Bhd FYE2009 FYE2010  47.2 0.5 35.0 4.8  2 years 2 years  Starter packs and recharge vouchers Starter packs and recharge vouchers
4. INFORMATION ON OUR GROUP (Cont’d) No.  Name of customer  Contribution to  Length of  Products provided  total Group  relationship  revenue (%\  3.  Trillion Communications Sdn Bhd  2 years  Starter packs and recharge vouchers  FYE2009 FYE2010  10.1 1.4  4.  E-Dymiu!” Network Sdn Bhd  1 year  Starter packs and recharge vouchers  FYE2009 FYE2010  -28.8  5.  Shao Lin Marketing Enterprise  1 year  Starter packs and recharge vouchers  FYE2009 FYE2010  -12.8
Note: E-Dymium Network Sdn Bhd is our direct sales team starling from January 2010. For the FYE2009, our Group had only appointed three (3) area sales distributors. However, the number of area sales distributors has subsequently increased to a total of 17 distributors as at LPD. Our Group is not dependent on any of the abovementioned area sales distributors as the appointment of area sales distributors are the sole prerogative of XOX. E-Dymium Sdn Bhd is a direct sales company and sells XOX’s products (i.e. starter packs and recharge vouchers) to its own members only. XOX is not dependent on E-Dymium Sdn Bhd as the members of E-Dymium Sdn Bhd, who may also be a XOX subscriber, can still purchase recharge vouchers from the traditional trade channel. 4.22 MAJOR SUPPLIERS The table below lists our Group’s suppliers that represented 10% or more of the total Group purchases for FYE2009 and FYE2010. There were no suppliers which contributed 10% or more of the total Group revenue for FYE2007 and FYE2008 as our Group only commenced business operations in 2009:­FYE2009 No.  Name of supplier  Contribution to 10lal Group purchases70/0\  Lenglh of relationship  Services rendered  1. 2.  Celcom FYE2009 FYE2010 Percetakaan Tenaga Sdn Bhd FYE2009 FYE2010  86.6 91.2 13.4 1.9  2 years 2 years  SIM Cards and provision of Celcom’s Digital Network Printing of starter packs and recharge vouchers
4. INFORMATION ON OUR GROUP (Cont’d) For FYE 2009 and FYE201 0, we purchased our Group’s SIM cards from Celcom. To a certain extent, our Group is dependent on Celcom for the supply of SIM cards as these SIM cards need to be programmed to receive our Group’s “010” mobile line signal. The purchase from Celcom does not include any profit element to Celcom and this allows our Group to operate with a lower cost base. Our Group is dependent on Celcom for the provision of Celcom’s Digital Network for its network coverage as well as network accessibility by our Group’s subscribers to access our products and services. Please refer to Section 4.8.2 for further details on our Group’s product and services. Although our Group’s purchases from Percetakaan Tenaga Sdn Bhd account for approximately 13.4% of our Group’s total purchases in FYE2009, our Group is not dependent on the abovementioned printers for the printing of our Group’s starter packs as well as recharge vouchers, as we generate our own recharge PIN and the printing can be done by other local printers. In FYE 2010, our Group’s purchases from Percetakaan Tenaga Sdn Bhd account for only 1.9% of our Group’s total purchases in FYE 2010. 4.23 FUTURE PLANS, STRATEGIES AND PROSPECTS OF OUR GROUP Our Group’s future plans, strategies and prospects are as follows:­

Social Network Portal
4.23.1 Mobile Wallet The advancement of technology has allowed mobile operators like XOX the means to provide consumers with a secure yet convenient mode of payment. We target to introduce our mobile wallet account in late 2011, by leveraging on our Group’s Convergence Charging System. Our Group has on 26 September 200B, obtained approval from Bank Negara Malaysia to operate an ‘electronic wallet service’. This approval allows our Group’s subscribers to transact! transfer an amount of up to RM200 (“Upper Limit”) at any point in time. The Upper Limit can be increased upon request and obtaining approval from Bank Negara Malaysia. XOX’s mobile wallet will be an account within the XOX convergence subscription and will be available when an XOX convergence subscription is created. However, unlike other accounts that are used for XOX’s services, XOX’s Mobile Wallet is designed to be used as a payment instrument for both XOX and non-XOX products and services. XOX’s Mobile Wallet contains value in RM and is a micro payment system that operates like a debit card. Mobile wallet aims to provide the subscribers with an affordable and convenient way to manage their money and make payment through the mobile phone to any third party with a mobile wallet account, including friends, merchants and also to make online purchases in the internet. Mobile wallet users are not required to undergo credit checks or possess a pre­existing bank account. In addition, subscribers can top-up their mobile wallet either using cash or the purchase of recharge vouchers. This makes it an alternative to other payment systems currently available. 81 4. INFORMATION ON OUR GROUP (Cant’d) As at LPD, we do not have any participating merchants for our mobile wallet. Its use will be initially limited as a payment instrument for XOX’s products and services such as the payment of postpaid bills, top-up of prepaid accounts, payment for mobile content and transfer of airtime credit to family and friends whom are subscribers of XOX. The value in the XOX Mobile Wallet can be increased via top-up to the mobile wallet account using various top-up options make available to XOX’s subscribers, including:­(i) Mobile transfer -Transfer of funds from one Mobile Wallet account to another Mobile Wallet account at a minimal cost.
(ii) XOX website -SUbscribers can also log onto XOX’s website and top-up their own and/or friends’ Mobile Wallet.

(iii) Recharge vouchers -Subscribers can purchase recharge vouchers at any XOX authorised dealers and e-Pay outlets and use it to top-up the Mobile Wallet. (iv) XOX Customer care consultant -Subscribers may also contact XOX’s customer care consultant and request for a top-up to be made. Such method would require the subscribers to provide certain payment information such as credit card number to facilitate the top-up. Some of the proposed uses for XOX’s Mobile Wallet are as follows:­• Payment of subscribers’ postpaid mobile account for mobile usages incurred. Upon receiving the monthly statement or when the mobile usages limit has been reached, subscribers’ can pay for the outstanding amount using their Mobile Wallet account;
• Top-up of prepaid mobile account where subscribers can transfer funds from their Mobile Wallet account to be utilised for mobile usages;
• Purchases of mobile products and services such as SMS and mobile contents offered by XOX and other merchants, where subscribers may use their Mobile Wallet account to perform such purchases;
• Purchases of non-mobile products and services where participating merchants will accept purchases by transfer of funds from XOX subscribers’ Mobile Wallet account to the participating merchants’ Mobile Wallet account; and
• Fund transfers to another subscriber’s Mobile Wallet account. Subscribers may transfer funds from their Mobile Wallet account to top-up another subscriber’s prepaid mobile account or any other account(s) allowed by XOX.

4.23.2 Social Network Portal Internet-mobile convergence enables mobile services to be accessible via Internet and vice versa. In line with this convergence, XOX will be launching the first phase of our Group’s Social Network Portal in 2011, which is accessible via any mobile device, computer, laptop or device with Internet connectivity. As at LPD, our Group has incurred approximately RM1.4 million in developing our Group’s Social Network Portal. Please refer to Section 9.4.8(h) for further details of the development cost incurred. 4. INFORMATION ON OUR GROUP (Cont’d) Our Social Network Portal will have all the functionalities and features of a typical social network portal such as online photo album, blogs and forums. However, XOX’s Social Network Portal would also incorporate mobile services capabilities such as sending SMS via the internet (‘WebSMS”) and Voice over Internet Protocol (“VoIP”), Which will be SUbjected to a charge rate. As at LPD, our Group has not determined the charge rate and/or when such charge rate will be implemented. WebSMS service enables XOX subscribers to send and receive SMS via the internet. Similar to the inbox and outbox of an email application, XOX subscribers will have both InSMS and OutSMS in their WebSMS applications. Subscribers will also be able to install the WebSMS Microsoft Outlook client application whereby they will be able to access WebSMS from the Microsoft Outlook application and to access the Microsoft Outlook Address Book to send SMS. Such services have been previously offered by many mobile services providers, but the receiver of such SMS will not know the sender as the senders’ mobile numbers have been masked. The uniqueness of our service is that in sending SMS via the XOX WebSMS, the recipient of XOX WebSMS will know the sender as the mobile number of the subscriber is presented to the recipient. The WebSMS is also stored on the Social Network Portal allowing subscribers to retrieve the messages like an electronic mail account. XOX’s Social Network Portal would also allow subscribers to include their friends and family contacts from other social websites. As such XOX could also penetrate the internet customer segment and increase the number of our Group’s subscribers. Other convergence services by XOX such as online albums, photos and videos captured by mobile devices can be automatically uploaded to the XOX Social Network Portal, to be shared with subscribers’ online community, while a copy of the photos and videos is stored in the subscriber mobile device. The uploading is done in the background without interrupting the subscriber’s mobile device usages. 4.23.3 Convergence Value Added Services With the availability of Convergence Charging System, XOX can begin offering XOX valued added services. The valued added services offered will be for both mobile and Internet users and will consist, amongst others, of the following:­(i) The principal subscriber can define the credit limit for each supplementary line:
(ii) The principal subscriber can nominate all voice and SMS usage from the supplementary subscriber to be charged to the principal subscriber’s account;

(iii) Corporate principal subscribers can impose conditions to have all calls made during office hours to its customers by its employees to be charged to the corporate SUbscription while all calls and/or usage made after office hours will be charged to the employees’ respective accounts: and (iv) Corporate principal subscribers can also purchase bulk call minutes, SMS and data volume to be shared by its employees. Our Group is also constantly seeking ways to converge different products and services with our convergence SUbscription plans to be offered to our Group’s subscribers. 4. INFORMATION ON OUR GROUP (Cont’d) The following table indicates the timing of implementation of our future plans:­Business Activitv  202011  302011  402011  Mobile wallet  – – ,  Social Network Portal  ,  – – Converaence Value Added Services  ,  – ,
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