ORCODA LIMITED — Interim / Quarterly Report 2016

Jul 27, 2016

SmartTrans Holdings Limited ASX: SMA An Australian based Technology Solutions Company

Corporate Structure:

Shares on issue: 2215 M Unlisted Options: 166 M Market Cap: $AUD 75M 52 week high: 7.1 cents 52 week low: 2.2 cents

Directors:

Mr Mark Vaile AO Non-Executive Chairman

Mr Bryan Carr CEO & Managing Director

Quarterly Report for the period ended 30[th] June 2016

Mr Andrew Forsyth Non-Executive Director

Mr Yui (Ian) Tang Non-Executive Director

Mr Greg Simpson Non-Executive Director

Mr Ian Hawkins Executive Director

Melbourne Office: Level 1, 10 Queens Road Melbourne VIC 3004 Australia

Beijing Office: Room 101 Building 22 Courtyard 4 Gong Ti Bei Lu Chaoyang District Beijing 100027 PR China

Phone (Aus): +61 (03) 9866 7333

Phone (China): +86 (10) 6500 0910 Website: www.smarttransholdings.com.au Twitter: www.twitter.com/SmartTrans_SMA Youtube: https://youtu.be/-1t_yJe1DBA

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Highlights

• SmartTrans books revenue for quarter of $2.65 million – increase of 90% on previous corresponding period ($1.39 million)

• Full Year revenue of $11.38 million represents an increase of 165% on FY2015 ($4.29 million) and 420% increase on FY2014 ($2.19 million)

• $2.1 million cash at bank and net receivables of $1.7 million as at 30 June 2016

• Solid result once again delivered with selective and strategic marketing investment

• SmartPay platform continues to drive performance and revenue for Company

• Launch of e-commerce platform in China further enhances and diversifies revenue streams, leveraging SMA’s well established billing partnerships

• Company’s achievements recognised with two prestigious business awards by business communities and government in China and Australia

FINANCIAL PERFORMANCE FOR THE QUARTER ENDED 30 June 2016

ASX-listed smartphone payments provider and logistics software company SmartTrans Holdings Limited (ASX: SMA) is pleased to report revenue for the quarter ended 30 June 2016 of $2.65 million, representing an increase of 90% on previous corresponding period ($1.39 million), and bringing year to date revenue to $11.38 million, an increase of 165% on revenue for FY2015 ($4.29 million) and 420% on FY2014 ($2.19 million).

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SmartTrans Revenue
FY2014 - FY2016
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
FY2014 FY2015 FY2016
----- End of picture text -----

As at 30 June 2016 SmartTrans had $2.1 million cash at bank and net receivables of $1.7 million.

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ONLINE & MOBILE PAYMENTS PLATFORM AND SOFTWARE SOLUTIONS BUSINESS IN CHINA

SmartTrans commenced the quarter by securing a new third-party billing agreement with an online and offline lottery provider in China, providing the Company with exposure to what is a lucrative and fast growing sector. Lotteries and online betting was first launched in China in 1987 and has since grown to become the world’s largest lottery market by sales volume¹. In 2014, total lottery sales in China were RMB382 billion (~AUD$77 billion), an increase of 24% on the previous year¹.

The service has initially been launched in Hainan Province, which is widely regarded as a major hub for lotteries and associated businesses, and provides consumers with easy mobile access to lottery and associated products. The pilot project has been progressing well with good uptake experienced during the recent European Cup fixtures. In conjunction with its billing partner, SmartTrans will continue to strategically ramp up marketing for these products, while also assessing the possibility of rollouts into additional products.

This partnership represents a further solid endorsement of the Direct Carrier Billing service that SmartTrans provides via its proprietary SmartPay platform in China. It is also a reflection of the Company’s ongoing strategy to broaden revenue streams being delivered by SmartPay with a growing range of products, services, games, content and Apps now on offer to consumers.

A major milestone for SmartTrans during the quarter was the launch in May of its unique e-commerce platform, providing companies from outside China with the ability to sell directly to businesses and consumers there. This has been made possible by SmartTrans’ privileged cross-border transaction capabilities, along with its well established billing partnerships in China.

SmartTrans launched its e-commerce offering through a business-to-consumer (B2C) partnership with highly regarded Australian wine maker, Tim Adams Wines. The wine maker is seeking to leverage SmartTrans’ reach to consumers in China through its alliances with China Mobile and China Telecom to conduct SMS marketing campaigns, with the Company also providing support to create an online presence to further drive sales.

The Company soon after entered into its first business-to-business (B2B) partnership for the e-commerce offering through a landmark Master Merchant Agreement with BPS Technology (ASX: BPS). BPS Technology, best known for its Bartercard offering, has partnered with SmartTrans to enable its merchants to market and sell their products online in China via SmartTrans’ specialised product outlet and Alibaba’s website www.1688.com.

Under this Master Services Agreement, via SmartTrans, BPS is initially planning to deliver key suppliers access to four major market sectors: Health & Wellness, Travel & Tourism, Property, and Education, which are Australia’s largest export sectors to China after resources².

SmartTrans’ role is to promote products and attract consumers, receive payment from consumers and settle payments to merchants based outside China of up to US$50,000 per merchant per day. The Company earns revenue through service fees, commissions on products purchased and transaction fees for each transaction that it processes.

Post end of quarter, SmartTrans significantly enhanced its e-commerce offerings by securing an agreement to promote and sell Blooms Health Products range via SmartTrans’ online portals in China. SmartTrans is greatly encouraged by the success achieved by Blackmores and Swisse health products in

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China, and is seeking to emulate this by utilising SmartTrans’ mobile and online marketing and billing expertise to leverage the growing demand here for ‘clean and green’ Australian brands.

LOGISTICS SOFTWARE & SERVICE BUSINESS

SmartTrans’ Australian business division, which provides mobile and online software and services in the transport and logistics area, continues to perform in line with expectations servicing a diverse range of blue-chip customers spread across a range of industry sectors in this region.

The division continues to work closely with partner CEVA Australia (a subsidiary of the large global CEVA Logistics operation) assessing ways in which SmartTrans’ proprietary technology may be applied to enhance CEVA’s operations in terms of safety, efficiency and sustainability.

The China division of the Company’s logistics business, launched here in 2015 through an agreement executed with Yanfeng Automotive Trim Systems Co. Ltd (Yanfeng Visteon Automotive), continues to assess further potential opportunities in this market while also further progressing this project.

SmartTrans is exploring opportunities to expand its services in the provision of data products in China servicing the Internet of Things market by providing vehicles and other machines connectivity to the internet.

CORPORATE

In April 2016, SmartTrans announced the appointment of the Hon. Mark Vaile AO as the Company’s new Non-Executive Chairman, following the decision of Dr Geoff Raby to step down from this role in order to focus on the growing demands of his own business and other board positions.

Mr Vaile, former Deputy Prime Minister of Australia and former leader of the National Party, has a wealth of experience in the global commerce environment having held several key ministerial positions during his political career, including that of Trade Minister involved in negotiating the US-Australia Free Trade Agreement (FTA), the then proposed Australia-China FTA, along with similar agreements between Australia and its trading partners Singapore, Thailand and Malaysia.

SmartTrans is about to enter a new and exciting phase of development as it expands further into e- commerce billing solutions and looks to explore new markets in South East Asia. The Company is confident that Mr Vaile’s extensive experience in this arena combined with his exceptional ability as a leader is will greatly assist SmartTrans as it seeks to take its business to the next level.

SmartTrans was greatly honoured during the quarter to be recognised for its achievements with two prestigious awards, the first being the ‘ Business Excellence Award for Business Innovation ’ at the AustCham Westpac Australia-China Business Awards held in Shanghai in April 2016.

The Business Innovation Award recognises an Australian or Chinese company whose significant innovation has resulted in the successful development of opportunities in Greater China and is awarded based on growth achieved over the last three years, projected growth potential, success achieved in a market segment and innovation in the use of business models and partnerships³.

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The Company received a further accolade in May 2016 by winning the ‘ Outstanding Technology Award’ at the prestigious China International Fair for Trade in Services held in Beijing. The award from the Ministry of Commerce of the People’s Republic of China and the China World Trade Organisation was in recognition of the Company’s best-of-breed technology that underpins its proprietary SmartPay platform.

SmartTrans is extremely proud to have been honoured by the business communities of both Australia and China, and particularly by the government of the People’s Republic of China with these awards.

OUTLOOK

SmartTrans enters FY2017 with a strong revenue profile and a clearly defined strategy designed to further leverage its well entrenched position as a leading provider of mobile and online billing and payments services in China.

The Company’s new e-commerce offering, made possible by its privileged cross-border settlement capabilities, is a unique point of difference that SMA intends to leverage over the coming months. This platform provides a turn-key solution for any business outside of China wishing to market and sell directly to consumers or businesses in this country.

The Board and management of SmartTrans believe that the Company is well placed as it enters into an exciting new phase of growth and development.

1. Source: http://www.agtech.com/html/industry_lottery_overview_char.php

2. Source: http://dfat.gov.au/about-us/publications/trade-investment/australias-trade-in-goods-andservices/Pages/australias-trade-in-goods-andservices-2014-15.aspx

3. Source http://en.ciftis.org

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10

Name of entity

SmartTrans Holdings Limited

ABN 86 009 065 650	Quarter ended(“currentquarter”)
86 009 065 650	June 2016

Consolidated statement of cash flows

Cash flows related to operating activities 1.1 Receipts from customers (Receivables net of Payables due to the company $1.7m) 1.2 Payments for (a)staff costs (b)advertising and marketing (Including third party payments) (c)research and development (d)leased assets (e)other working capital 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) Net operating cash flows	Current quarter $A’000	Year to date (12 months)$A’000
	4,205 (417) (3,932) (489) 5	9,053 (1,458) (8,842) (2760) 51
	(628)	(3,956)

• See chapter 19 for defined terms.

Appendix 4C Page 1

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

	Current quarter $A’000	Year to date (12months)$A’000
1.8 Net operating cash flows (carried forward)
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows	(3)	(172) (77)
	(3)	(249)
	(631)	(4,205)
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other Costs include; All capital raising costs (Legal, Rights Issue Underwriting, ASX, ASIC & Share registry fees) and conversion of loans into equity Net financing cash flows	15	255
	15	255
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end ofquarter	(616) 2,724	(3,950) 6,058
	2,108	2,108

• See chapter 19 for defined terms.

Appendix 4C Page 2

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Payments to directors of the entity and associates of the directors

Payments to related entities of the entity and associates of the related entities

• 1.24 Aggregate amount of payments to the parties included in item 1.2

107

• 1.25 Aggregate amount of loans to the parties included in item 1.11

• 1.26 Explanation necessary for an understanding of the transactions

Executive Salaries

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

SmartTrans has no borrowings.

• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position.

Amount available Amount used $A’000 $A’000 3.1 Loan facilities - - 3.2 Credit standby arrangements n/a n/a

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
4.1 Cash on hand and at bank 4.2 Deposits at call 4.3 Bank overdraft 4.4 Other (provide details)	813	584
	1,295	2,140
	n/a	n/a
	n/a	n/a
Total: cash at end of quarter(item 1.23)	2,108	2,724

Acquisitions and disposals of business entities

5.1 Name of entity 5.2 Place of incorporation or registration 5.3 Consideration for acquisition or disposal 5.4 Total net assets 5.5 Nature of business	Acquisitions (Item 1.9(a))	Disposals (Item 1.10(a))

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.

• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: Date: ...26/07/16.............. Print name: Bryan Carr(Director)

• See chapter 19 for defined terms.

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Appendix 4C Quarterly report for entities admitted on the basis of commitments

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.

3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

• See chapter 19 for defined terms.

Appendix 4C Page 5

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