EML PAYMENTS LIMITED — AGM Information 2011

Nov 17, 2011

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S O L U T I O N S

Annual General Meeting 18 November 2011 Bob Browning - CEO

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A D E P T S O L U T I O N S

Presentation Agenda:

• Growth Strategy Update - Financial Update

• Organisational Activities

• Rationalisation of Mining Tenements

• Key Areas of Focus for Balance of Fiscal Year

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A D E P T S O L U T I O N S

Growth Strategy Update:

A Solid Foundation of Product Support

• Robust systems and processes are fundamental to the successful delivery of our product.

• Scalable back-office systems, capable of supporting 100 times more transactions per second than currently being delivered with little additional capital investment.

• Successfully migrating existing data centre from legacy site to new, state of the art centre in Brisbane.

Robust Operations

• Opened secondary data centre in Melbourne to to run in parallel with Brisbane centre.

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A D E P T S O L U T I O N S

Growth Strategy Update:

A Solid Foundation of Product Support

• Consistent regulatory compliance is key to the continued growth of EML.

• Work plan developed to support application for an ADI.

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Regulatory Robust
Compliance Operations
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• Majority of current stored value is not covered by regulatory requirements. Therefore, no urgency to submit ADI application.

• Completed on-site audit by current ADI provider.

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A D E P T S O L U T I O N S

Growth Strategy Update:

A Solid Foundation of Product Support

• As a financial services company dealing with our clients’ money in the form of stored value, proper and consistent risk management practices are of primary importance.

• We have established a risk register and developed plans and are taking actions to mitigate the critical risks.

• Management provides updates to our Board on how our risk management activities are progressing and whether we’ve experienced any breaches.

Regulatory Robust Risk Compliance Operations Management

• Successfully achieved annual re-certification of PCI DSS.

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A D E P T S O L U T I O N S

Growth Strategy Update:

Growing the size of “the pie”

• Our systems offer flexibility and capability beyond that of any of our competitors.

• • Management has elected to focus our early sales efforts in the following areas:

• Employee Generated Expenses

• o Gift cards

• Third party gift cards

• Not-for-profit pre-paid cards

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Accelerate
core
product
sales
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• Government disbursements

• To-date, we are experiencing very strong growth rates in all Key Performance Indicators, over prior corresponding period:

Regulatory Robust Risk Compliance Operations Management

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A D E P T S O L U T I O N S

Growth Strategy Update:

• 41 new clients are having cards processed by Emerchants since

• the beginning of this fiscal year, including:

• Monadelphus Group Ltd

• City Finance

• Gooodstart Childcard Ltd

• Universal Store

• Cardno Pty Ltd

• Westinghouse

• City Finance Pty Ltd

• Honda

• Telechoice

• Wrigleys

• Star City

• Best Restaurants

• Year of the Farmer

• Simply Energy

• Over 447,000 new cards have been issued this fiscal year

• Emerchants surpassed the milestone of 3,000,000 cards issued

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A D E P T S O L U T I O N S

Financial Update:

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$10.3 $2.0
$.95
$.71
$6.3
$M
One-off costs
Cash following Transaction Infrastructure Net Operating Cash as at
capital raising costs investment Costs 31 Oct 2011
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• The Company maintains a strong balance sheet since the capital raising was completed in July 2011.

• The Company continues to manage its cash position prudently, to provide ample time for Revenue to drive positive cash flow.

• Additional sources of cash are potentially available from further rationalisation of remaining mining assets and R&D tax concessions.

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A D E P T S O L U T I O N S

Financial Update – Key Performance Indicators:

• Emerchants’ fiscal year-to-date revenue is 86% greater than the prior corresponding period

• Revenue generating transactions are nearly 103% greater, fiscal year-to-date, than the prior corresponding period

• Stored value is up 99% over prior year

• The number of active cards on issue is up 132% (294,690) over prior year

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A D E P T S O L U T I O N S

Financial Update – Card type examples of typical revenue streams:

	Gift Card Example (100,000 active cards)	POS Rebate Example (300,000 cards issued/ 30,000 active cards)	Expense Management Example (2,000 cards)
Description:	• Promotional gift cards for	• POS promotional loyalty	• Pre-paid, reloadable
	retailers and consumer	cards for retailers and	general purpose cards
	goods companies	consumer goods companies	for employees
Set-up Fee:	• $3,000	• $40,000	• $3,000
Maintenance
Fee/reporting:	• $1,800	• $1,800	• $0
Card Maintenance
Fee:	• N/A	• $180,000	• $60,000
Card Cost (net):	• $45,000	• $105,000	• $12,000
Load fee:	• $50,000	• $0	• $0
Transaction fee (net:)	• $24,000	• $144,200	• $57,600
Breakage:	• $98,000	• $15,000	• $0
Total*:	• $221,800	• $485,800	• $132,600

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A D E P T S O L U T I O N S

Growth Strategy Update:

Growing the size of “the pie”

• Development has been completed on the following new products: o POS Rebate

• Virtual MasterCard

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Product
line
expansion
Accelerate
core
product
sales
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• The key is to balance the expansion of our product line with our sales force’s ability to manage the portfolio.

• R&D will remain an important part of our ability to stay ahead of the competition, given the continued growth in internet and mobile banking and the team is making significant progress on new product development in these areas

Regulatory Robust Risk Compliance Operations Management

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A D E P T S O L U T I O N S

Growth Strategy Update:

Growing the size of “the pie”

• Contracting directly with clients is one way to grow organically.

• Another way to grow in large leaps is to

• form partnerships with firms that already have a relationship with large numbers of end-use customers.

• A number of exploratory meetings have been held with industry participants in banking, real estate, insurance, digital media, internet and transport.

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Accelerate
core
product
sales
Regulatory Robust Risk
Compliance Operations Management
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• Another opportunity is to develop an offering for social networking sites

• A initial example of this would be Best Restaurants, launched ~1 month ago.

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A D E P T
S O L U T I O N S
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Growth Strategy Update:

Growing the size of “the pie”

• The Adept Solutions management team continues to investigate possible

• acquisitions that represent logical bolt-ons to Emerchants.

• Market conditions have made acquisitions more difficult.

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Accelerate
core
product
sales
Regulatory Robust Risk
Compliance Operations Management
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• Nevertheless, should the right opportunity present itself, management would seek to pursue a capital raising and/or issue additional equity to support the transaction.

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A D E P T S O L U T I O N S

Growth Strategy Update:

Growing the size of “the pie”

• Ultimately, our intent is to seek opportunities to expand internationally.

• Relationships we build through strategic alliances or acquisitions have the potential to assist us in expanding internationally.

• Management’s first priority is to grow domestic sales as rapidly as possible as well as make sure the underlying processes and systems form a solid foundation upon which to manage our expansion into:

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Accelerate
core
product
sales
Regulatory Robust Risk
Compliance Operations Management
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• New product lines

• Strategic alliances

• International markets

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A D E P T S O L U T I O N S

Organisational Activities:

• Management continues to strengthen the team with the addition of the following personnel:

• Financial controller

• Marketing manager

• Sales Representatives.

• Several projects have been completed designed to improve the sales and fulfillment process as well as project prioritisation.

• Brisbane staff have successfully shifted to our new facility.

• Data centre migration is nearly complete in Brisbane.

• The secondary data centre is functional in Melbourne.

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A D E P T S O L U T I O N S

Rationalisation of Mining Tenements:

• In keeping with Adept’s stated strategy following our change of business filing with ASX, the Company has successfully sold the Northern Territory tenements for $1,000,000 plus a 1% royalty.

• The purchaser was an Australian subsidiary of Crocodile Gold Corp, a Canadian company listed on the Toronto and Frankfurt stock exchanges.

• This sale will provide multiple injections of cash into the business over the next several months.

• The Company will continue to seek opportunities to rationalise the remaining mining tenements.

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A D E P T S O L U T I O N S

Key Areas of Focus for Balance of Fiscal Year:

• Continue to pace hiring of additional Sales personnel with growth in Revenue.

• Close key, large contract opportunities currently in the pipeline.

• Continue to pursue rationalisation of remaining mining assets.

• Tight cost management.

• Constant focus on talent refinement at staff, management and Board levels.

• Pursue large strategic alliances to maximise card distribution and system utilisation.

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