Hi Jaluma,I attended this morning, there seemed to be about 10...

Hi Jaluma,

I attended this morning, there seemed to be about 10 shareholders present. The meeting was over reasonably quickly, it included the CEO presentation followed by a few questions from shareholders.

As a long term holder I am happier with the operational performance in the last 12 months, although I can't see the market rerating the shares until the issues surrounding the licence are resolved. To me it looks unlikely that Smart Pass will be sold but that's just a guess, I figure that if it were to occur it would have been done by now.

I've transcribed the notes I took from the meeting below, I hope it's all accurate.

- Oncard sold Bill to Bill to Alipay, Oncard claim they now have a close relationship with Alipay that could be very beneficial going forward.

- $18 million cash on hand at 30 June, of that amount $16 million is in Australian bank accounts, mostly in rolling 3 month term deposits. A little bit (from memory $700k) is at call.

- Hoping to achieve 2013 EBIT better than 2012.


SMART PASS:

- Abotomey is confident that the licence will eventually be issued for Smart Pass but the timing of that announcement remains uncertain.

- It is expected that the licence will require approx $25 -$30 million which is approx 10% of the $250 million float. Tentative discussions indicate that the licence will be valid for 5 years. Oncard will only need to fund its 50% share but the aim is to get to $25 million cash on hand in case the other 50% JV partner does not fund their share........the question was asked is there an indication that the JV partner would not fund their share, Abotomey advised he was not expecting that to occur but wanted to have funds available in case the JV partner is, for some unforeseable reason, unable to fund his share.

- I got the feeling that Abotomey had seen drafts of the governments regulations / licence requirements but that's just pure speculation on my part.

- Following the announcement that banks are unable to issue prepaid cards it's likely that the 10% of the market that they had will flow back to existing players, mostly Oncard.

- Smart Pass will have more cards on issue at 30/06/13 than at 30/06/12. Oncard believe they are the only prepaid card provider in China that will be in that position.

- Touch cards may be implemented if a licence is issued but not before. The cost of implementing the touch cards is not worth the risks of not receiving a licence.

- Smart Pass is adding 30/40 merchants per month.

BUFFETT CLUB:

- Buffett Club is now in 34 cities in China, the original aim for the year was 30 so they've exceeded that target. Further expansion into other cities is unlikely, they will now focus on consolidating current operations. As you will see from the map most of the wealth in China is along the eastern seaboard, hence the location of those offices.

- At present they can't track the usage of the buffett club cards, they are implementing a system which will provide Oncard advice on who is using the card, how often and where. The new system should be up and running by February 2013.

- Call centres are offering the buffett club card to existing CITIC credit card customers, recent hit rates have been 20% which is very encouraging.

Hope the above helps.