Here is my view & synopsis of why I believe TSN is so...

Here is my view & synopsis of why I believe TSN is so undervalued at present. But first, why the company believes India is the ideal market for TSI India's business model.

India:

* India - One of the worlds largest growth economies. (1)

* India Demographics - Population of over 1.2 billion people with 70% under the age of 30 years with an emerging middle class that has a strong demand for ATM Banking services. (2)

* Equity Markets - Foreign investment increased substantially in India over the past year before easing off around May 2015. Overseas investors upped their holdings in both government and corporate notes by $25.6 billion over the last 12 months. Overseas investors upped their holdings in the Indian equity markets by $15.3 billion over the last 12 months, although May 2015 poised to be the first month to see outflows. (3)

* According to UN report, India's economy is projected to grow this year and next year and set to overtake China. (3)

* Inflation in India significantly lower than previous years. Currently around approximately 5.17%. Positive for TSI India. (3)

* Senior economist highlighted... 'However, investors will have to be patient'. (3)

* Company expects to see continued strong economic growth in India over the coming years. (3)

* Government Initiatives - Financial Inclusion' & 'Make In India' initiatives being high priorities for the Indian Government. This new Indian Government is very focused on their goal of bringing in 700 million people into the banking system in India. One year since the launch of PMJDY and 175 million bank accounts have now been opened since August 2014 last year with $220 million dollars deposited into these new bank accounts. With the new Government initiatives underway, should see new bank accounts numbers continue to rise and active bank accounts improve. (4) & (6)

* Debit card growth on the rise. As of the end of May 2015 the grand total of Debit Cards were: 570,813,794. That's a jump of 26% over last year. (3) Page 8 of TSN's announcement dated 25/03/13 highlighted that as of FY12 there were 281 million debit cards in India. (5) Three years later and that figure has more than doubled!

* Page 8 of the announcement dated 25/03/13 highlighted that cash continues to account for 90% of retail payments (2011). * Consumption spending steadily rising. * Consumer spending in India FY 2015 $1.355 Billion. (5)

* ATM expansion on the rise in India. (7)

* Bank branches on the rise in India. (7)

* Indian Rupee - 1 Indian Rupee today equals 0.021 Australian Dollar. (8)

Now for TSI India:

* TSI India - The company has already established strong sound relationships with major Indian banks, Utility Co's and Financial Institutions - 10 clients in total with over 230 million plus customers on their databases collectively. (9)

* CX Partners own 75% of TSI India. (9)

* TSN now has a 25% equity interest in TSI India's business.(9)

* CX Partners are funding the entire ATM/Bill Payment business as a result of the approximate 75%/25% deal. (9)

* TSI India had achieved gross recurring revenues of A$4M for the quarter (as of 15/05/15). Should we see those numbers x four quarters = AUD$16M per year in gross recurring revenues. (9)

* TSI India has aligned its strategy with the Reserve Bank of India of 'banking to the masses' i.e., to bring in another 700 million people into the banking system. (10)

* TSI India ATM Business - Business growing and looking to expand opportunities. As per announcement dated 31/07/15 the company highlighted that TSI India had 1825 installed & operating ATMs in India with 475 ATMs to still come online to equal 2300 ATMs in total. ATM deployment grew by 36% during the year. (3) As per announcement dated 15/05/15 TSI India highlighted that they're rapidly approaching 100 million transactions per year. (9) Prior to the 21/05/2013 Shareholder Presentation, TSI had a little over 1000 ATMs on the market. The Shareholder Presentation highlighted that of the Indian outsourcing companies TSI had ~9% of the market. (11) It is probably close to 10-12% now (cheers Snakeeyes!).

* TSI India Bill Payment Business - TSI India now have 400 Bill Payment machines in India (with new 200 E-Kiosk contract recently awarded in July 2015) (9). The Bill Payments Business currently makes up approximately 10% of TSI's business, good scope and potential for strong margins with strong opportunities for expansion, which includes the field of mobile payments. (12)

* TSI India's objective is for a trade sale. Possible exit date for a trade sale is less than 12 months away. (13)

* If TSI India don't achieve a trade sale in that time window then an IPO is on the agenda. (13)

* As per 2014 Annual Report, TSI India recently achieved cash flow positive level of sales from business operations. (14)

* TSI India is starting to win larger ATM contracts. Existing bank client relationships are solid. Many contracts have been renewed with existing bank clients. I've previously highlighted that on page 4 of the Independent Investment Research Report, the research team highlighted that according to TSN, banks are no longer looking to award contracts for less than 100 ATMs. That figure has now been bumped up to blocks of 500 plus, with an execution period of 6-12 months. (15)

* Transaction fees approximately AUD $0.20c based on numbers taken from Operations Update dated 13/04/15. (16)

* AUD $18.5 million facility in place. The AUD $18.5 million facility was based on AUD $1 = 54 INR at the time. (17) The company was able to secure this line of credit with only 815 ATMs (refer to 2012 Annual Report). They had 100% ownership at the time but that ATM figure is now getting close to 2300 ATMs but at 25% ownership.

* TSI India have measures in place to improve margins. As highlighted in the Operations Update dated 20/03/14, "TSI India believe cost reduction initiatives will assist in addressing margins as the business and ATM market expands". (15)

* Share price today sits at $0.008c.

* We have a market cap today of approx $14.24M.

From the recent Corporate Presentation dated 15/05/15 (9)

* Banking Opportunities: Opportunity to offer 100 plus banks their new leading technology. ATM networks, systems, payment services, card issuance, card management and card products and mobile payments. That's a total of 7 opportunities that the company has yet to tap into!

* Payments Opportunities: Corporate payments, m-commerce, easy electronic solutions, banking and payment services. The stand out for me under this heading was that Corporates are seeking rapid deployment of new products and services to capture these markets immediately. In other words it's a HIGH PRIORITY focus for them!

* TSN - reviewing numerous business opportunities to leverage the strong relationships they have formed over the years with clients and Indian market.

* TSN has no debt. (9)

* And as of the 30/07/15 TSN had cash of A$2.012M. (18)

Trip back to 2010:

Refer to 2010 Annual Report. (19)

* In 2010 TSN owned 100% of the ATM/Bill Payment business.

* TSN had achieved gross revenues of A$1.8M for Q210.

* 9 million plus transactions were going through the business per quarter = $36m transactions per year.

* They had about 370 installed ATMs in India.

* Share price at the time was approximately $0.038c.

* They had a market cap back then of approx $45M.

* Transaction fees was approximately AUD $0.15c.

* The company had no debt.

* And as of the 30/09/10 they had cash of A$4.5m.

So that's my view & synopsis of why I believe TSN should easily be valued at 8-10 cents today based on current business alone and why my attention remains on the company's bigger picture.

References:

(1) https://en.wikipedia.org/wiki/Economy_of_India

(2) http://www.asx.com.au/asxpdf/20101026/pdf/31td9lkd036jxp.pdf

(3) http://www.asx.com.au/asxpdf/20150731/pdf/4306zrxry6xmb1.pdf

(4) http://www.asx.com.au/asxpdf/20150413/pdf/42xvd5j3tdtg39.pdf

(5) http://www.asx.com.au/asxpdf/20130325/pdf/42dvspw11v74dm.pdf

(6) http://www.financialexpress.com/art...ri-jan-dhan-yojana-narendra-modi-govt/127075/

(7) https://rbi.org.in/scripts/ATMView.aspx?atmid=51#

(8) https://www.google.com.au/search?q=....904192j0j4&sourceid=chrome&es_sm=93&ie=UTF-8

(9) http://www.asx.com.au/asxpdf/20150515/pdf/42yl8x4cqbsnp7.pdf

(10) http://www.asx.com.au/asxpdf/20141126/pdf/42v19837zvngrm.pdf

(11) http://www.asx.com.au/asxpdf/20130521/pdf/42g0djsf3szvh1.pdf

(12) http://www.asx.com.au/asxpdf/20130828/pdf/42hzjsgqqjthtx.pdf

(13) http://www.asx.com.au/asxpdf/20130416/pdf/42f91sg4tfk77y.pdf

(14) http://www.asx.com.au/asxpdf/20140729/pdf/42r3364rknjtw8.pdf

(15) http://www.asx.com.au/asxpdf/20140320/pdf/42nj2t3g3vlly8.pdf

(16) http://www.asx.com.au/asxpdf/20150413/pdf/42xvd5j3tdtg39.pdf

(17) http://www.asx.com.au/asxpdf/20120814/pdf/4280hjbxzsctgt.pdf

(18) http://www.asx.com.au/asxpdf/20150730/pdf/4304pqyrn3bspb.pdf

(19) http://www.asx.com.au/asxpdf/20101026/pdf/31td9lkd036jxp.pdf

Tony