GHL System Berhad Annual Report 2017

ANNUAL REPORT 2017 11 FINANCIAL AND OPERATIONAL HIGHLIGHTS GHL saw Group revenues grew to RM253.7 million for the year ended 31 December 2017 from RM245.9 million a year ago (+3.2% yoy). Pretax profits grew by 2.4% yoy also to RM25.4 million from RM24.8 million in 2016. Pretax margins were stable at 10.0% with a slight decrease from 10.1% in 2016. 2017 also saw strong growth for Philippines and Thailand driven by the TPA business. In Malaysia, business has been static but the transaction volume has increased by 50% yoy and e-pay’s merchant footprint has also grown by 14.7% from 2016. SIGNIFICANT EVENTS Partnering with Alipay in Malaysia GHL Malaysia started offering Alipay payment acceptance services to Malaysian in-store merchants as well as online merchants. The roll out started with physical merchants before the end of May 2017 and was extended to e-commerce merchants. We currently have acquired and enabled over 5,000 outlets to accept payments through Alipay. Malaysia marks the second ASEAN country, where GHL has tied-up with Alipay to offer an alternative payment option to merchants. GHL started merchant acquiring for Alipay in Thailand for physical stores in Q2 2016. Acquiring license agreement with Mastercard In April 2017, GHL’s wholly owned subsidiary, GHL Cardpay Sdn Bhd signed an acquiring license agreement with Mastercard that will help GHL to offer electronic payment services and enhance card acceptance infrastructure for Mastercard products and solutions. This will benefit many small scale Malaysian merchants and sole proprietors that represent a rapidly-growing but underserved segment. Proposed acquisition of MPOS Global Limited On 7 November 2017, GHL entered into agreements for the proposed acquisition of up to 31.16% equity interest in MPOS Global Limited (“MPOS”) with an effective equity interest of 29.8% in Vietnam MPOS Technology Joint Stock Company. GHL Philippines partners with AF Payments Inc. GHL Systems Philippines, Inc (“GHL Philippines”) commenced offering beep™ payment acceptance services to Philippines in-stores merchants in May 2017. beep™ is a stored value e-payment service which allows consumers to make payments using a contactless smartcard or any other form factor containing the beep™ Application (the “beep™ card”) at Transport Establishments and other accredited retailers, merchants, and establishments where the beep™ card is accepted as means of payment for goods and services. beep™ is owned by AF Payments Inc, the company that was awarded the contract to develop an automatic fare collection/ticketing systems by the Department of Transportation and Communications of Philippines. CHAIRMAN’S STATEMENT CONT’D 2017 marks several key milestone for the Group, one of which was the acquisition by Actis of a 44.4% stake in GHL making them the single largest shareholder of GHL. I would like to welcome Mr Hossameldin Abdelhamid Mohamed Aboumoussa and Mr Ali Zaynalabidin Haeri Mazanderani as newly appointed Non-Independent Non-Executive Directors, representing our new shareholder Actis. I would also like to take this opportunity to thank Mr Brahmal Vasudevan who has resigned from your Board as a Non- Independent Non-Executive Director on 24 May 2017. Mr Brahmal has served in various capacities within the GHL group. I would also like to thank Mr Kanagaraj Lorenz who has retired from the Board on 26 May 2017 as Executive Director. Mr Kanagaraj was first appointed as Group Chief Executive Office in 2011 and was re-designated as Executive Director on 30 November 2016. 2017 has been a tough year as banks were consolidating their terminal base following the Pin & Pay initiative in 2016. Despite tough conditions the group continued to grow positively in 2017. I would like to congratulate the board, management and staff for their hard work and commitment to the success of the business.