UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Or

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-36637

MOL GLOBAL, INC.

(Exact name of Registrant as specified in its charter)

N/A

(translation of Registrant’s name into English)

Cayman Islands

(Jurisdiction of incorporation or organization)

Lot 07-03 & 08-03 Level 7 & 8 Berjaya Times Square

No. 1, Jalan Imbi 55100 Kuala Lumpur, Malaysia

(Address of principal executive offices)

Ramesh Pathmanathan

+603 2082 1251

rameshp@mol.com

Lot 07-03 & 08-03 Level 7 & 8 Berjaya Times Square

No. 1, Jalan Imbi 55100 Kuala Lumpur, Malaysia

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
American depositary shares, each representing one ordinary share	The NASDAQ Global Market
Ordinary shares, par value $1.00 per share*	The NASDAQ Global Market

* Not for trading, but only in connection with the listing on the NASDAQ Global Market of American depositary shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report. 67,504,435 ordinary shares, par value USD 1.00 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨                 Accelerated filer  ¨                Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board  x Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:    Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ¨    No  ¨

TABLE OF CONTENTS

PART I
ITEM 1.	Identity of Directors, Senior Management and Advisers		4
ITEM 2.	Offer Statistics and Expected Timetable		4
ITEM 3.	Key Information		4
	A.	Selected financial data	4
	B.	Capitalization and Indebtedness	9
	C.	Reasons for the Offer and Use of Proceeds	9
	D.	Risk Factors	9
ITEM 4.	Information on the Company		41
	A.	History and Development of the Company	41
	B.	Business Overview	43
	C.	Organizational Structure	73
	D.	Property, Plants and Equipment	74
ITEM 4A.	Unresolved Staff Comments		75
ITEM 5.	Operating and Financial Review and Prospects		75
	A.	Operating Results	75
	B.	Liquidity and capital resources	98
	C.	Research and development, patents and licenses, etc.	101
	D.	Trend information	101
	E.	Critical Accounting Policies and Significant Estimates	101
	F.	Tabular disclosure of contractual obligations	113
	G.	Safe harbor	114
ITEM 6.	Directors, Senior Management and Employees		114
	A.	Directors and Senior Management	114
	B.	Compensation	116
	C.	Board Practices	116
	D.	Employees	119
	E.	Share Ownership	119
ITEM 7.	Major Shareholders and Related Party Transactions		119
	A.	Major Shareholders	119
	B.	Related Party Transactions	121
	C.	Interests of Experts and Counsel	123
ITEM 8.	Financial Information		123
	A.	Consolidated Financial Statements and Other Financial Information	123
	B.	Significant Changes	124
ITEM 9.	The Offer and Listing		124
	A.	Offer and Listing Details	124
	B.	Plan of Distribution	125
	C.	Markets	125
	D.	Selling Shareholders	125
	E.	Dilution	125
	F.	Expenses of the Issue	125
ITEM 10.	Additional Information		125
	A.	Share Capital	125
	B.	Memorandum and Articles of Association	125
	C.	Material Contracts	125
	D.	Exchange Controls	126
	E.	Taxation	126
	F.	Dividends and Paying Agents	129
	G.	Statements by Experts	129
	H.	Documents on Display	129
	I.	Subsidiary Information	129

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ITEM 11.	Quantitative and Qualitative Disclosures About Market Risk		130
ITEM 12.	Description of Securities Other Than Equity Securities		131
	A.	Debt Securities	131
	B.	Warrants and Rights	131
	C.	Other Securities	131
	D.	American Depositary Shares	132
PART II
ITEM 13.	Defaults, Dividend Arrearages and Delinquencies		133
ITEM 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		133
ITEM 15.	Controls and Procedures		133
ITEM 16A.	Audit Committee Financial Expert		136
ITEM 16B.	Code of Ethics		136
ITEM 16C.	Principal Accountant Fees and Services		136
ITEM 16D.	Exemptions from the Listing Standards for Audit Committees		137
ITEM 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		137
ITEM 16F.	Change in Registrant’s Certifying Accountant		138
ITEM 16G.	Corporate Governance		138
ITEM 16H.	Mine Safety Disclosure		139
PART III
ITEM 17.	Financial Statements		140
ITEM 18.	Financial Statements		140
ITEM 19.	Exhibits		140

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CONVENTIONS THAT APPLY TO THIS ANNUAL REPORT

Unless otherwise indicated or the context otherwise requires, references in this annual report to:

• “7-Eleven Malaysia” are to 7-Eleven Malaysia Sdn. Bhd., which owns and operates or franchises to other operators all 7-Eleven convenience stores in Malaysia, a wholly-owned subsidiary of 7-Eleven Malaysia Holdings Berhad;

• “ADSs” are to American depositary shares, each of which represents one ordinary share;

• “BNM” are to Bank Negara Malaysia, the central bank of Malaysia;

• “Game Sultan” are to our wholly-owned subsidiary, Sihirli Kule Bilgi Sistemleri Ltd., which operates the micropayment system Game Sultan, a product that is substantially similar to MOLPoints and is included in references to “MOLPoints” throughout this annual report;

• “MDV” are to Malaysia Debt Ventures Berhad;

• “MMOG.asia” are to our online games portal, which is operated by MyCNX Holdings (M) Sdn Bhd;

• “MOL,” “we,” “us,” “our company” and “our” are to MOL Global, Inc. and its subsidiaries;

• “MOL AccessPortal are to MOL AccessPortal Sdn. Bhd. (incorporated in Malaysia);

• “MOL Ventures” are to MOL Ventures Pte. Ltd. (previously known as MOL Global Pte. Ltd.);

• “MOLPay” are to our payments solution for online merchants, which is operated in Malaysia and Indonesia by our 51%-owned subsidiary, MOLPay Sdn. Bhd., and our Nganluong payments solution for online merchants in Vietnam, which is operated by our 50%-owned subsidiary Nganluong Joint Stock Company; and

• “MOLPoints” are to our MOLPoints micropayments system, our Game Sultan micropayments system for the Turkish market and our EasyTOPUP micropayments system for the Thai market, and the payments credits issued through each of our micropayment systems;

Certain of our subsidiaries are referred to in this annual report using the conventions set forth in the table under Item 4.C. “Information on the Company – Organizational Structure – Corporate Structure”.

All references in this annual report to

• “Malaysian Ringgit” or “MYR” are to Ringgit Malaysia, the lawful currency of Malaysia;

• “Rp.” are to Indonesian Rupiah, the lawful currency of Indonesia

• “S$” are to Singapore dollars, the lawful currency of Singapore;

• “THB” are to Thai Bhat, the lawful currency of Thailand; and

• “U.S. dollar” or “$” or “US$” are to United States dollars, the lawful currency of the United States;

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that reflect our current expectations and views of future events. The forward-looking statements are contained principally in Item 3.D. “Key Information - Risk Factors” Item 4. “Information on the Company”, and Item 5. “Operating and Financial Review and Prospects”. Known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.

In some cases, you can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

• our anticipated growth strategies;

• our future business development, results of operations and financial conditions;

• expected changes in our revenues and certain cost or expense items;

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• our ability to attract customers and further enhance our brand recognition; and

• trends and competition in the industries in which we operate; and general economic and business conditions in the regions where we provide our solutions and services.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different from our expectations. Important risks and factors that could cause our actual results to be materially different from our expectations are generally set forth in Item 3.D. “Key Information—Risk Factors” Item 4. “Information on the Company”, and Item 5. “Operating and Financial Review and Prospects” and other sections in this annual report. You should thoroughly read this annual report and the documents that we refer to with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.

PART I

ITEM 1. Identity of Directors, Senior Management and Advisers.

Not applicable.

ITEM 2. Offer Statistics and Expected Timetable.

Not applicable.

ITEM 3. Key Information.

A. Selected financial data.

The following table presents the selected consolidated financial information of our company. Our summary consolidated statements of profit or loss data for the years ended December 31, 2013, 2014 and 2015, summary consolidated statements of financial position data as of December 31, 2013, 2014 and 2015 and summary consolidated statements of cash flow data presented below for the years ended December 31, 2013, 2014 and 2015 have been derived from our audited consolidated financial statements included elsewhere in this annual report. Our summary consolidated statements of profit or loss data for the year ended December 31, 2011 and 2012, summary consolidated statements of financial position data as of December 31, 2011 and 2012 and summary consolidated statements of cash flow data presented below for the year ended December 31, 2011 and 2012 have been derived from our audited consolidated financial statements not included in this annual report. Our consolidated financial statements are prepared and presented in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. Our selected consolidated financial data also includes adjusted EBITDA, which is a non-IFRS measure that is not required by, or presented in accordance with, IFRS, but is included because we believe it is indicative of our operating performance and used by investors and analysts to evaluate companies in our industry. Our historical results are not necessarily indicative of results expected for future periods.

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You should read the summary consolidated financial information in conjunction with our consolidated financial statements and related notes and Item 5. “Operating and Financial Review and Prospects” included elsewhere in this annual report. Our historical results are not necessarily indicative of our results expected for future periods.

	For the year ended December 31,
	2011			2012			2013			2014			2015
										(Restated) (5)
	(MYR in millions, except per share data)
Summary Consolidated Statements of Profit or Loss Data
Revenue		63.2			95.6			171.5	(1)		202.7			248.5
Direct cost and other ancillary expenses		(32.0	)		(48.2	)		(70.0	)(1)		(94.4	)		(141.0	)
Employee expenses		(10.2	)		(16.5	)		(31.0	)		(52.2	)(3)		(135.1	) (3)
Depreciation and amortization expenses		(3.6	)		(6.9	)		(20.6	)		(24.4	)		(28.0	)
Marketing, advertising and promotion expenses		(1.2	)		(1.8	)		(8.3	)		(6.1	)		(8.0	)
Communication and travelling expenses		(2.4	)		(3.0	)		(5.7	)		(7.9	)		(8.4	)
Office related expenses		(1.9	)		(2.4	)		(3.9	)		(4.3	)		(5.7	)
Other operating expenses		(2.8	)		(3.8	)		(6.7	)		(32.2	)		(66.5	)(4)
Other operating income		—			—			—			—			6.9
Profit/(Loss) from operations		9.1			12.9			25.4			(18.8	)		(137.3	)
Other income		3.0			0.9			2.5			7.6			12.0
Non-operating expenses		—			(1.6	)		(3.0	)		—			—
Finance costs		(2.7	)		(2.9	)		(5.1	)		(9.2	)		(11.1	)
Share of results of associates		1.0			(0.0	)		(0.0	)		(0.1	)		(0.0	)
Profit/(Loss) before tax		10.4			9.4			19.8			(20.5	)		(136.4	)
Income tax expense		(2.2	)		(3.4	)		(1.2	)		(0.6	)		(2.5	)
Profit/(Loss) for the year		8.2			6.0			18.7			(21.1	)		(138.9	)
Profit/(Loss) for the year attributable to owners of the company		8.2			4.7			12.0			(24.8	)		(140.5	)
Profit/(Loss) for the year attributable to non-controlling interests		(0.1	)		1.3			6.7			3.7			1.6
Earnings/(Loss) per share
Basic (sen)(2)		13.97			8.01			20.39			(40.44	)		(214.58	)
Diluted (sen)(2)		13.97			8.01			20.39			(40.44	)		(214.58	)

Note:

(1) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, as a result of certain accounting errors in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013, our revenue and direct cost and other ancillary expenses for 2013 are each overstated by MYR4.3 million, with no other line items being affected. However, we have determined not to restate our financial statements for 2013 because the adjustments are not material to our consolidated financial statements as a whole. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013”.

(2) Sen is a unit of Malaysian currency. One hundred sen equal one Malaysian Ringgit.

(3) Included in employee expenses for the year ended December 31, 2014 and 2015 is the non-cash expenses of share based compensation awards. In June 2015, the board of directors resolved to cancel the share based compensation awards and to terminate all outstanding employee share options. The vesting and termination expenses of the share based compensation recognized in profit and loss amounted to MYR15.7 million in 2014 and MYR85.8 million in 2015.

(4) Included in other operating expenses is the non-cash charges of the impairment loss on goodwill and intangible assets of MYR38.4 million for the year ended December 31, 2015.

(5) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on May 2, 2016, to correct our accounting for certain transaction entered into in connection with our acquisition of PayByMe in respect to Derivatives Granted to Holders of the Non-controlling Interest of PayByMe.

5

	As of December 31,
	2011		2012		2013		2014		2015
							(Restated)
	(MYR in millions)
Summary Consolidated Statements of Financial Position Data
Cash and cash equivalents		5.4		32.1		49.7		150.6		94.1
Total current assets		60.3		97.4		127.0		293.2		340.6
Intangible assets		21.1		62.4		138.9		164.4		114.2
Total assets		92.1		174.3		282.9		481.4		477.8
Total current liabilities		70.8		124.5		204.7		177.7		252.1
Total liabilities		71.1		134.5		217.9		228.4		287.9

	For the year ended December 31,
	2011			2012			2013			2014			2015
	(MYR in millions)
Summary Consolidated Statements of Cash Flows Data
Net cash from/(used in) operating activities		(3.3	)		23.9			54.0			20.8			4.6
Net cash used in investing activities		(12.5	)		(3.3	)		(60.6	)		(59.5	)		(19.0	)
Net cash from/(used in) financing activities		18.0			6.3			27.3			133.4			(51.5	)
Net increase/(decrease) in cash and cash equivalents		2.1			27.0			20.7			94.7			(65.9	)
Cash and cash equivalents at beginning of year		3.2			5.4			32.1			49.7			150.6
Effect on exchange rate changes		0.1			(0.3	)		(3.0	)		6.1			9.4
Cash and cash equivalents at end of year		5.4			32.1			49.7			150.6			94.1

	For the year ended December 31,
	2011		2012		2013		2014		2015
Summary Operating Data
Volume (MYR in millions)
MOLPoints(1)		175.3		371.8		589.3		715.6		792.2
MOLReloads(2)		923.6		1,063.5		1,214.0		1,368.6		1,614.8
MOLPay(3)		18.0		68.1		144.3		354.5		651.6
MMOG.asia(4)(5)		29.1		27.4		32.2		21.8		14.9
MOLPoints active registered paying users(6) (number)		312,596		383,766		1,007,344		1,035,233		920,998
MOLPoints transactions (number)		6,198,339		10,905,409		20,843,529		28,097,949		42,120,771
MOLReloads active retailers(7) (number)		40,076		32,239		37,204		38,795		36,719
MOLPay online merchants (number)		916		1,205		3,455		3,805		4,508
MMOG.asia active paying users(4)(8) (number)		116,120		107,264		110,826		56,865		43,279
MMOG.asia AVPPU(4)(9) (MYR)		250.5		255.0		290.9		383.6		344.2

Notes:

(1) MOLPoints volume is the total retail value of content purchased through redemption of vouchers for games and other digital content provided by content providers using MOLPoints during the period. Volume comprises (i) volume from registered consumer members, which is the total volume of content purchased through redemptions of MOLPoints in registered MOLPoints accounts during a period; (ii) consumer direct purchase volume, which is the total volume of content purchased by end-users through redemptions of MOLPoints directly from content providers during a period without creating a registered MOLPoints account; and (iii) direct channel volume, which is the total volume of content purchased through redemptions of MOLPoints during a period by cybercafés and distributors that redeem MOLPoints for digital content that the cybercafés and distributors sell to end-users. MOLPoints volume tends to be significantly greater than MOLPoints revenue, which excludes amounts that we pay to digital content providers pursuant to our revenue sharing arrangements.

(2) MOLReloads volume is the total retail value of pre-paid mobile airtime distributed by MOLReloads during a period. MOLReloads volume tends to be significantly greater than MOLReloads revenue, which excludes amounts that we pay to mobile airtime providers pursuant to our revenue sharing arrangements.

(3) MOLPay volume is the total value of payments processed by MOLPay during a period. MOLPay volume tends to be significantly greater than MOLPay revenue, which excludes amounts paid to financial institutions.

(4) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014. The information presented for MMOG.asia as of and for the years ended December 31, 2011 and 2012 includes the period prior to the acquisition. The actual volume for MMOG.asia for the period after the acquisition in 2012 was MYR3.0 million.

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(5) MMOG.asia volume is the total retail value of content sold by MMOG.asia during the preceding twelve months.

(6) MOLPoints active registered paying users is the number of unique MOLPoints accounts that have been used to purchase or redeem MOLPoints during the preceding twelve-month period.

(7) MOLReloads active retailers is the total of number of MOLReloads terminals in Malaysia and Thailand as of the end of the period, in each case which have sold at least one MOLReloads e-voucher during the preceding twelve months, and the number of individual distributors in the Philippines as of the end of the period, who have sold at least one MOLReloads e-voucher during the preceding month.

(8) MMOG.asia active paying users is the number of unique MMOG.asia accounts that have been used to purchase game points on MMOG.asia during the preceding twelve-month period.

(9) MMOG.asia average volume per paying user, or AVPPU, is equal to total volume for a preceding twelve month period divided by the number of active paying users as of the end of the period.

Adjusted EBITDA

We present adjusted EBITDA, which is a non-IFRS financial measure. You should not consider adjusted EBITDA as a substitute for or superior to net profit prepared in accordance with IFRS. Furthermore, because adjusted EBITDA is not determined in accordance with IFRS, it is susceptible to varying calculations and may not be comparable to other similarly titled measures presented by other companies. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

We present adjusted EBITDA as a supplemental performance measure because we believe that it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by the non-cash write-down resulting from our acquisition of subsidiaries and intangible assets (affecting relative impairment of goodwill and intangible assets), age and book depreciation of fixed and intangible assets (affecting relative depreciation and amortization expenses), changes in foreign exchange rates that impact financial assets and liabilities denominated in currencies other than our functional currency (affecting unrealized gain/(loss) on foreign exchange and realized gain/(loss) on foreign exchange), variations in capital structures (affecting interest income and interest expenses), share of results of associates, loss on disposal and write-down of property, plant and equipment, acquisition related costs, and tax positions (affecting income tax expenses) (such as the impact on periods or companies of changes in effective tax rates), IPO expenses and class action legal fees which are non-recurring. In addition, adjusted EBITDA excludes reversal for impairment on inventories and trade receivables, inventory and intangible assets written off and the non-cash impact employee share based compensation, changes in the fair value of derivative and changes in the measurement of the gross obligation due to the unwinding of the discount and change in the estimates, that, in each case, we do not believe reflect the underlying performance of our business. Some limitations of adjusted EBITDA are that: (i) adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us; (ii) adjusted EBITDA does not include other income, other expense and foreign exchange gains and losses; and (iii) adjusted EBITDA excludes depreciation and amortization and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future.

Some limitations of adjusted EBITDA are that:

• adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us; and

• adjusted EBITDA does not include other income, other expense and foreign exchange gains and losses.

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The following table reconciles adjusted EBITDA to profit/(loss) for the year.

	For the year ended December 31,
	2011			2012			2013			2014			2015
										(Restated)
	(MYR in millions)
Profit/(Loss) for the year		8.2			6.0			18.7			(21.1	)		(138.9	)
Plus:
Total depreciation and amortization		3.6			6.9			20.6			24.4			28.0
Impairment loss on goodwill		—			—			—			—			36.9
Impairment loss on intangible assets		—			—			—			—			1.5
Reversal for impairment on trade receivables		—			—			—			(0.1	)		—
Reversal for impairment on inventories		—			—			—			(0.0	)		—
Share of results of associates		(1.0	)		0.0			0.0			0.1			0.0
Unrealized (gain)/loss on foreign exchange		—			—			(0.4	)		3.4			(12.1	)
Realized (gain)/loss on foreign exchange		(0.8	)		(0.7	)		0.2			0.6			(1.2	)
Derivative fair value adjustment		—			—			3.0			(3.7	)		—
Gain on disposal of property, plant and equipment		—			—			—			—			(0.0	)
Gain on disposal of investment property		—			—			—			—			(0.1	)
Interest income		(0.0	)		(0.4	)		(0.8	)		(1.5	)		(2.2	)
Interest expense		2.7			2.9			5.1			6.0			2.2
Income tax expense		2.2			3.4			1.2			0.6			2.4
Intangible assets written off		—			—			0.1			0.1			0.8
Development expenditure written off		—			—			—			0.2			—
Property, plant and equipment written off		—			—			—			0.0			0.2
Effect of remeasurement of equity interest in associates		—			1.6			—			—			—
Share based compensation expenses		—			—			—			15.7			85.8
Acquisition related costs		—			—			—			1.1			—
IPO expenses		—			—			—			13.6			—
Class action legal fees		—			—			—			—			2.5
Unwinding of discount and change in estimates of gross obligations		—			—			—			3.2			9.0
Adjusted EBITDA		14.9			19.7			47.7			42.6			14.8

EXCHANGE RATE INFORMATION

A substantial portion of our operations are conducted in Malaysia, a significant amount of our revenues are denominated in MYR and our consolidated financial statements are presented in MYR. This annual report contains translations of MYR amounts into U.S. dollars at specific rates solely for the convenience of the reader. Unless otherwise noted, all translations from MYR to U.S. dollars and from U.S. dollars to MYR in this annual report were made at a rate of MYR4.2900 to $1.00, the noon buying rate in The City of New York for cable transfers of MYR as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2015. We make no representation that any MYR or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or MYR, as the case may be, at any particular rate, at the rates stated below, or at all. The Malaysian government imposes control over its foreign currency reserves in part through direct regulation of the conversion of MYR into foreign exchange and through restrictions on foreign trade. On April 22, 2016, the noon buying rate was MYR3.8960 to $1.00.

8

The following table sets forth, for the periods indicated, information concerning exchange rates between the Malaysian Ringgit and the U.S. dollar based on the noon buying rate in New York City as certified for customs purposes by the Federal Reserve Bank of New York. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this annual report or will use in the preparation of our periodic reports or any other information to be provided to you.

	Noon Buying Rate
Period	Period End		Average(1)		Low		High
	(MYR per U.S. Dollar)
2011		3.1690		3.0558		2.9370		3.2090
2012		3.0570		3.0751		2.9940		3.1980
2013		3.2770		3.1686		2.9620		3.3330
2014		3.4950		3.2800		3.1465		3.4970
2015		4.2900		3.9041		3.5150		4.4560
October		4.2920		4.2557		4.1200		4.4100
November		4.2420		4.3131		4.2120		4.3981
December		4.2900		4.2791		4.2120		4.3240
2016
January		4.1500		4.3388		4.1500		4.4090
February		4.2000		4.1780		4.1180		4.2190
March		3.9000		4.0644		3.9000		4.1650
April (through April 22, 2016)		3.8960		3.9025		3.8620		3.9250

Source: Federal Reserve Bank of New York

(1) Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

D. Risk Factors

Risks Related to Our Business

We face significant competition in the markets in which we operate, and we may fail to successfully compete against current or future competitors.

We face competition from other payments system operators as well as banks, telecommunications operators and other companies in each of our product lines and in each of the countries in which we operate. MOLPoints competes primarily with game operators, online retailers of digital content, global micropayment providers and aggregators, and local micropayment providers on the basis of its ability to attract and retain online game players and other consumers, which in turn depends on MOLPoints’ ability to attract content providers and distribution channels. More recently in 2015, we have observed a trend of game publishers or merchants working directly with telecom companies to distribute digital goods such as in-game content. Additionally, our revenue take rates and profit margin continue to be under pressure from major game publishers and merchants. MOLReloads competes primarily with online and offline sellers of mobile airtime and operators of payment terminal networks on the basis of transaction processing speed, convenience, coverage, network size, accessibility, availability, reliability, price and after-sales service. MOLPay competes primarily with retail banks, non-traditional payment services providers (such as retailers), electronic payment system operators as well as other companies that provide various forms of payment services, primarily on the basis of transaction processing speed, convenience, network size, accessibility, reliability and price. MOLWallet is expected to compete with online and mobile payment service providers and other e-wallet providers, primarily on the basis of transaction processing speed, convenience, network size, accessibility, reliability and price. Certain of the financial institutions we use for clearing and settlement services are also our competitors and provide payment processing services to online merchants. In addition, in recent years, many of our competitors have substantially expanded their online payment services capabilities.

9

MMOG.asia, our online games portal, competes with game operators and other providers of leisure activities, primarily on the basis of the quality and features of its online games, its operational infrastructure and expertise, the strength of its product management approach, and the services offered to enhance game players’ experience.

The increasing shift from PC games to mobile games driven by the rapid growth of smartphones have created a new layer of competition. This has had an impact on our MMOG.asia and MOLPoints segments, especially in 2015. Moreover, the competition for the mobile games content space is more intensed relative to PC games content as mobile games content typically has a shorter life span than PC games content. Therefore, most mobile games content providers offer lower revenue take rate.

There are limited barriers to entry for new companies wishing to enter our industries. In addition, many of our competitors are larger than us and may have greater financial, management or operating resources than us, or have more experience in the geographic markets in which we compete with them. If we are unable to compete effectively in each of our product and geographic markets, our business, financial condition and results of operations will be adversely affected.

We depend on certain of our distribution partners.

We depend on our relationships with certain physical distribution partners, each of which has distributed our products that accounted for a substantial proportion of our revenues in recent years. If we are unable to secure long—term relationship with any of our distribution partner, our performance will be adversely affected. For 2013, 2014 and 2015, we derived 23.8%, 22.8% and 19.1%, respectively, of our revenue from the distribution of products at 7-Eleven Malaysia’s convenience stores, which represented 51.4%, 52.5% and 57.0% respectively, of our revenue for Malaysia. For 2013, 2014 and 2015, we derived 78.3%, 69.5% and 53.9% respectively, of our revenue in Thailand from sales through Advance Mpay Co. Ltd., or Advance MPay. The decrease in percentage of our revenue attributable to 7-Eleven Malaysia and Advance MPay is due to our more diverse distribution partnerships.

We have a long term contract with 7-Eleven Malaysia for the placement of MOLReloads terminals, which expires in 2024. Pursuant to this contract, we are 7-Eleven Malaysia’s exclusive provider of mobile airtime and online game credits. We and 7-Eleven Malaysia are currently ultimately controlled by our major shareholder. We also have a payment service agreement with Advance MPay, pursuant to which Advance MPay distributes MOLPoints and MOLReloads in Thailand in exchange for a volume-based service fee. The agreement expires in December 2015, subject to an automatic one-year extension if not terminated earlier. Either party may terminate the agreement at any time upon 30 days’ written notice.

There can be no assurance that our relationship with 7-Eleven Malaysia would not be adversely affected if our major shareholder was to cease to control us or 7-Eleven Malaysia or if our major shareholder was to cause us not to pursue our full rights under our agreement with 7-Eleven Malaysia. In addition, to the extent the customer base of 7-Eleven Malaysia or Advance MPay and its distribution channels decreases, or if the number of distribution channels in desirable locations in Malaysia or Thailand is reduced, customer traffic could be adversely affected, and our sales volume could suffer. Furthermore, our business could suffer if the business strategy of 7-Eleven Malaysia, Advance MPay or any other distribution partner is modified, particularly if such modification reduces its emphasis on point-of-sale activated cards, bill payment services or any other product or service that relates to our business.

While we believe that we have generally enjoyed good commercial relations with 7-Eleven Malaysia, Advance MPay and other important distribution partners, there can be no assurance that such companies will continue to observe the terms of existing agreements, or enter into or renew their contracts with us on terms as favorable as current terms. If we are unable to maintain our relationships with any of our key distribution partners, including 7-Eleven Malaysia and Advance MPay, or if any of the respective businesses of our distribution partners changes or suffers, our business, financial condition and results of operations may be materially and adversely affected.

10

We are dependent on global and regional digital content providers and telecommunications service providers.

As of December 31, 2015, MOLPoints can be used to purchase game credits and other digital content, including thousands of online games, provided by more than 800 content providers. We have relationships with global game operators such as Wargaming, global games platforms such as Facebook, regional platform operators such as Garena in Southeast Asia and Taiwan, and regional content providers such as Asiasoft, and we continually seek to enter into new relationships to broaden our content offering. We are dependent on the adoption of MOLPoints by new content providers, in particular major social media and gaming platforms, in order to grow our business and attract new customers. If we are unable to continue to add popular content providers to our platform whether due to delays in the deployment of global and regional content or otherwise, or if our existing relationships with content providers deteriorate, the attractiveness of MOLPoints to consumers may suffer. In addition to third party content, games operated by MMOG.asia, our games portal, also accepts MOLPoints. For 2013, 2014 and 2015, we derived 2.8%, 1.4% and 0.7% respectively, of our revenue from Boomz (DDT), a game that is operated by MMOG.asia, and there can be no assurance that the success of Boomz (DDT) will continue, or that our other games will be commercially successful. Furthermore, a substantial portion of the content for which MOLPoints are accepted is hosted on third party gaming platforms. There can be no assurance that such content will not be removed from such platforms for any reason, including due to actions by content providers and merchants which are not within our control. Any of the foregoing could have an adverse effect on our business, financial condition and results of operations. In addition, we are dependent on, and our results of operations may be significantly affected by, our relationships with digital content providers with respect to our MOLPoints business and telecommunications service providers with respect to our MOLReloads business. Furthermore, we enter into purchase or fulfillment arrangements based on the preferences or requirements of our counterparties, which affects our margins, capital outlay and inventory risk. If the telecommunications service providers or digital content providers with which we do business change the terms of their arrangements with us in a manner adverse to us, our business, financial condition and results of operations could be adversely effected. See Item 3.D. “Key Information – Risk Factors – Our mobile carrier billing business exposes us to certain risks.”

We receive certain support from our major shareholder and companies controlled by our major shareholder and our major shareholder and our founder and former Director and Executive Chairman have investments in businesses that may compete with our operations or otherwise result in conflicts of interest.

We have received in the past and expect to continue to receive support from our major shareholder and companies controlled by our major shareholder. For example, our major shareholder has granted advances to us on an interest-free basis, in connection with certain of our acquisitions. These amounts are repayable on demand. Our major shareholder and related parties have also provided guarantees for certain bank loans and other arrangements that we have entered into. Furthermore, an entity controlled by our major shareholder provides corporate secretarial services to us free of charge. Our principal executive offices in Kuala Lumpur are rented at prevailing market rates from an entity controlled by our major shareholder. See “Related Party Transactions” for descriptions of certain of these arrangements. The loss of support from our major shareholder or the companies controlled by our major shareholder could have an adverse impact on our business. For example, our major shareholder and related parties may no longer provide us with interest free loans or guarantees for financing, which could increase our costs and make it more difficult for us to obtain financing in the future. We may also need to replace such financing and guarantees provided by our major shareholder and related parties, which may not be available or may be on less favorable terms. Our major shareholder, Tan Sri Dato’ Seri Vincent Tan, and entities owned by our major shareholder, and our founder and former Director and Executive Chairman, Ganesh Kumar Bangah, have investments in businesses that operate in a wide variety of industries, some of which may compete with our operations or otherwise result in conflicts of interest. For example, Cyberventures Sdn. Bhd., or Cyberventures, which is owned 80% by our major shareholder and 20% by our founder and former Director and Executive Chairman, owns 51% of Sea Gamer Mall Sdn. Bhd., or Sea Gamer. Sea Gamer sells online game credits and secondary market items for online games, and we have a reseller arrangement with, and provide collection services for, Sea Gamer. See Item 7.B. “Major Shareholders and Related Party Transactions –Related Party Transactions”. There can be no assurance that our major shareholder, and entities owned by him and our founder and former Director and Executive Chairman, will not act, or cause us or other entities controlled by him to take action, in a manner that adversely impacts your interests as a holder of ADSs. The foregoing could have an adverse effect on our business, financial condition and results of operations.

11

Material breaches in security of our information technology systems may subject us to liability.

The uninterrupted and secure operation of our information technology systems, the safekeeping of confidential customer and consumer information that is stored on such systems and the secure handling of consumer information that is processed on such systems are critical to the successful operations of our business. We collect and maintain databases of sensitive information about online merchants and consumers, including names, email addresses, credit card numbers and bank account numbers. We have observed a global increase in information technology security threats and more sophisticated and targeted computer crime, which pose a risk to the security of systems and networks and the confidentiality, availability and integrity of our data. Our visibility in the online payments industry may attract hackers to carry out attacks on our systems that could compromise the security of our data. The encryption software and the other technologies we use to provide security for storage, processing and transmission of confidential customer and other information may not be effective to protect against data security breaches by third parties. We have not experienced any material information technology security breaches in the past. An information breach in our systems and loss of confidential information such as credit card numbers stored on third-party servers with respect to MOLPay or other information could have a longer and more significant impact on our business operations than a hardware failure. The loss of confidential information could result in our online merchants and their customers or our users losing confidence in us and thus the loss of their business. The loss of confidential information could also subject us to liability as well as the imposition of fines and damages by credit card merchant acquirers or government bodies or, in cases of material breach, the prohibition from provision of processing transactions for card networks. In addition, any data security breach of our or our content providers’ or third-party processors’ systems could lead to fraudulent activity involving our products and services, reputational damage, private claims or regulatory actions against us and increased compliance costs. Any of the above events could have an adverse impact on our business, financial condition, results of operations and growth prospects.

We may experience breakdowns in our information technology systems or software defects, computer viruses and development delays that could damage customer relations and expose us to liability.

We depend heavily on the stable operation of our information technology systems including software, processing systems, data centers and telecommunications networks, as well as systems provided by third parties. In addition, our business depends on the performance and reliability of our servers and MOLReloads terminals. A system outage or data loss could have a material adverse effect on our business, financial condition and results of operations. Not only would we suffer damage to our reputation and potential loss of business in the event of a system outage or data loss, but we may also be liable to third parties. Defects in our software systems and errors or delays in our processing of electronic transactions could result in one or more of the following:

• additional development costs;

• diversion of technical and other resources from our other development efforts;

• loss of credibility with current or potential customers;

• harm to our reputation and brands;

• exposure to liability claims; and

• regulatory action or investigation.

In addition, we rely on technologies supplied to us by third parties that may also contain undetected errors, viruses or defects. To successfully operate our business, we must be able to protect our systems and software from disruption, including from events that may be beyond our control. Events that could cause disruptions include, but are not limited to, upgrading of our information technology systems, installation difficulties or delays, fire, natural disaster, unauthorized entry, power loss, telecommunications failure, software defects, computer viruses, terrorist acts and war. We perform the vast majority of disaster recovery operations ourselves, though we utilize select third parties for some aspects of recovery, particularly internationally. To the extent we outsource our disaster recovery, we are at risk of the relevant service provider’s unresponsiveness or failure to respond appropriately in the event of breakdowns in our systems. Furthermore, we may not have insurance policies, or our insurance policies may not be adequate, to compensate us for all losses or failures that may occur.

12

The growth of our business is largely dependent on our distribution network.

Our ability to successfully grow our business internationally will depend to a significant extent on us successfully developing and maintaining relationships with local distribution partners in the countries in which we operate. Our ability to enter into relationships with global game operators such as Wargaming, and global games platforms such as Facebook, is largely dependent on our ability to provide a distribution network in markets where such content providers have a more limited presence. At the same time, our ability to enter into relationships with regional platform operators, such as Garena, and regional content providers, such as Asiasoft, is largely dependent on the regional and local penetration of our distribution network. If we are unable to maintain and increase the penetration of our distribution network in existing markets, and develop distribution networks in new markets, our products and services may become less attractive to consumers and in turn, to both global and local content providers. We have in the past expanded our distribution network partly through acquisitions and partnerships in new markets. There can be no assurance that we will succeed in expanding our distribution network to new markets, nor that our earnings in such markets will offset the cost of acquisition. In cases where our strategy involves organically growing into a new market by establishing a presence in the market and signing up distribution partners directly, there can be no assurance that we will succeed in expanding our distribution network rapidly or at all. Any of the foregoing could adversely impact our business, financial condition and results of operations.

Our growth prospects, especially with respect to MMOG.asia, will suffer if we are unable to continue to grow our business for mobile platforms.

As a result of the increasing use of smartphones, increased adoption of MOLPoints by mobile content providers, including mobile game operators, and MMOG.asia’s operation of mobile games are important component of our strategy. We cannot guarantee that we will be able to establish successful relationships with mobile content providers, that MOLPoints will appeal to mobile users or that MMOG.asia’s mobile games will be launched successfully and will appeal to mobile users. The uncertainties we face include but are not limited to:

• we have relatively limited experience working with certain mobile game operators and other mobile content providers whose cooperation we may need in order to be successful;

• mobile games operators may not succeed in introducing chargeable features that are sufficiently attractive to players to use MOLPoints to pay for such features;

• competition for use of payment methods on mobile platforms is intense and we may not be able to compete effectively.

MMOG.asia’s business has suffered as a result of the rapid and substantial migration of games players from online games to mobile games. MMOG.asia’s active paying users for 2015 were almost 24% lower compared with 2014 and MMOG.asia’s active paying users for 2014 were almost 50% lower compared with 2013 While MMOG.asia plans to launch new mobile games there can be no assurance that these games will be launched in the near future or at all or that they will be successful.

If we are unable to successfully grow the use of MOLPoints in connection with mobile content, or if MMOG.asia’s mobile games are not successful, our growth prospects will be materially and adversely affected.

If customer confidence in our businesses or our brands deteriorates, our business, financial condition and results of operations could be adversely affected.

Our customers include our user community, in addition to content providers with respect to MOLPoints, telecommunications service providers with respect to MOLReloads and online merchants with respect to MOLPay. Our business is built on customers’ confidence in our business or brands, as well as our ability to provide fast, reliable payment services. The strength of our brands and reputation are of paramount importance to our business. A number of factors could adversely affect customer confidence in our brands, many of which are beyond our control, and could have an adverse impact on us. These factors include but are not limited to:

• any significant interruption to our systems and operations;

• any regulatory action or investigation against us;

• measures taken to combat risks of fraud and breaches of privacy and security, such as freezing consumer funds;

• customer complaints about our customer service and our ability to handle customer complaints effectively;

• our ability to manage and train our customer service representatives properly;

• any breach of our security system or any compromises of consumer data; and

• any regulatory action or investigation against us.

13

Furthermore, negative publicity surrounding any assertion that we or any associated merchants are implicated in fraudulent transactions, irrespective of the accuracy of such publicity or its connection with our current operations or business, could harm our reputation. Any event that damages our brands and reputation among consumers as a reliable payment services provider could have a material adverse effect on our business, financial condition and results of operations.

An increase in the use of credit cards, debit cards or bank transfers and a decline in the use of cash, or an increase in the use of digital currencies, as a means of payment in the markets in which we operate, may result in lower growth or a decline in the use of our services.

MOLPoints, MOLReloads, and MOLPay connect our user community with content providers, telecommunications service providers and online merchants, respectively, primarily in emerging markets. Many of our users do not readily have access to credit card, debit card or bank transfer services, or may be unwilling to use credit cards for electronic transactions over the internet, and require alternative methods for payment for online products and services. Our physical distribution network, which includes convenience stores, cybercafés, bookstores and other retail stores, provide access to e-commerce for such users by facilitating cash payments. In 2015, cash payments accounted for 69.5% of transactions conducted by our user community on our platform. While we currently accept credit cards and online banking as a means of payment by consumers, we do not accept, and we do not presently have plans to accept, any unregulated digital currency as a means of payment. At this time when digital currencies remain unregulated and at an early stage of adoption, we consider digital currencies to be neither a form of competition nor an area for operational growth or diversity. If digital currencies were to become more widely adopted and regulated we may experience competition from platforms and business that conduct business using such currencies. Further to this, we may consider entering into arrangements with a digital currency operator if the digital currency was regulated, in which case it is possible that we could enter into arrangements for MOLPoints to be used as a funding mechanism for a regulated digital currency, or to accept a regulated digital currency as a means of payment for MOLPoints. While such arrangements could potentially make our broad content offering and extensive distribution network available to a regulated digital currency, we would consider such arrangements only if the currency was regulated and only after evaluating the associated risks, such as the risk of abuse of MOLPoints and any reputational concerns. A significant increase in the availability, acceptance and use of credit card, debit card, bank transfer services or digital currencies for online payments by consumers in the markets in which we operate could adversely affect the growth of our business, our financial condition and results of operations.

Material weaknesses and significant deficiencies in our internal control over financial reporting have been identified, and we have yet to assess the effectiveness of our internal control over financial reporting.

Our internal controls relating to financial reporting have not kept pace with the expansion of our business. Our financial reporting function and system of internal controls are less developed in certain aspects than those of similar companies that operate in fewer or more developed markets and may not provide our management with as much or as accurate or timely information. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as “a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.” A significant deficiency is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2015, one material weakness was identified in our internal control over financial reporting, which relates to the company’s lack of technical financial reporting expertise to appropriately report complex transactions under IFRS and which resulted in restatements in our consolidated financial results for various periods to correct our accounting for certain transactions, as disclosed in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business - Certain errors were identified in our consolidated statements of financial position and our consolidated statements of profit or loss and other comprehensive income as of and for the three month periods ended December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2015 and the year ended December 31, 2014” and “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

14

Firstly, with respect to PayByMe, we have restated our consolidated financial results for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month periods ended September 30, 2014 and 2015 and the year ended December 31, 2014 to correct our accounting for certain transactions entered into in connection with our acquisition of PayByMe. In particular, the restatements relate to put options granted to the holder of the non-controlling interest of PayByMe and our accounting for foreign currency gains/(losses) attributable to non-operating transactions in connection with a bank guarantee that we secured for the benefit of the holders of the non-controlling interest of PayByMe. A review of the application of IFRS to the put option (the “Put Options”) granted by MOL AccessPortal, in connection with the acquisition by MOL AccessPortal of a 51% equity interest in PayByMe resulted in a restatement of previous accounting. In September 2014, we acquired a 51% equity interest in PayByMe and in connection with the acquisition, MOL AccessPortal granted the Put Options to the holders of the non-controlling interest of PayByMe, pursuant to which the holders of the non-controlling interest have the contractual right to require MOL AccessPortal to subscribe for shares representing the remaining 49% equity interest in PayBeMe that MOL AccessPortal does not already own (the “Option Shares”) in tranches during specified periods. These options are disclosed in note 17(b)(i) (Acquisition of Klon Ödeme ve Iletisim Teknolojileri Anonim Şirketi ("PayByMe")) and 36(ii) (Derivative Financial Liabilities) to our consolidated financial statements as of and for the year ended December 31, 2014. Upon reviewing the application of IFRS, we noted that we are required to recognize a gross obligation for the present value of the redemption amount of the Put Options because the holders of the non-controlling interest have the right to require MOL AccessPortal to pay cash or another financial asset in exchange for the Option Shares. The gross obligation must be recognized at an amount equal to the present value of the estimated amounts that could be required to be paid to the holders of the non-controlling interest in accordance with the shareholders agreement between MOL AccessPortal and the holders of the non-controlling interest and are subject to re-measurement at the end of each reporting period. Changes in the measurement of the gross obligation due to the unwinding of the discount or changes in the estimated amounts that the acquirer could be required to pay are recognized in profit or loss at the end of each reporting period. As a result, we restated our put option written on non-controlling interest on our consolidated statements of financial position as of September 30, 2014 and 2015, December 31, 2014 and 2015, March 31, 2015, and June 30, 2015. In addition, the gross obligation on in-substance forward recognized in connection with these options gives rise to a loss on re-measurement of gross obligation to be reported as “finance costs” on our consolidated statements of profit or loss and other comprehensive income for the three and nine month periods ended September 30, 2014 and 2015, the three month periods ended December 31, 2014 and 2015, the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the year ended December 31, 2014. None of the fair value adjustments and corresponding re-measurements have any impact on our operating cash flows during the relevant periods. The gain/(loss) on re-measurement of gross obligation that should be recognized in our consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 was MYR0.4 million, MYR (4.2) million, MYR (2.9) million and MYR (2.3) million respectively. For the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, the loss on re-measurement of gross obligation was MYR(3.7) million and MYR(6.7) million, repsectively. For the three month period and year ended December 31, 2014, the loss on re-measurement of gross obligation was MYR (3.2) million. Accordingly, a restatement has been made to the consolidated financial statements as of and for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2014 and 2015 and the year ended December 31, 2014.

Secondly, as required under the terms of our acquisition of PayByMe, we secured a bank guarantee for the benefit of the holders of the non-controlling interest of PayByMe in December 2014. These funds were originally treated as working capital. However, having reviewed the nature of the transactions in connection with the bank guarantee, we have determined that these transactions are non-operating in nature. Accordingly, all foreign exchange gains or losses should be recognized as either “other income” if they relate to foreign currency exchange gains and “non-operating expenses” if they relate to foreign currency exchange losses. As a result of the above and in an effort to better reflect the nature of the foreign currency transactions during the year, we determined to restate our foreign exchange transactions according to the nature of the transactions in particular whether or not they are deemed attributable to operations. Foreign exchange gain/(loss) attributable to non-operating transactions of MYR1.7 million, MYR(0.2) million and MYR6.0 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively, and MYR1.6 million and MYR7.6 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, respectively. In our restated condensed interim consolidated statements of profit or loss for the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the three and nine month periods ended September 30, 2015, these amounts are reclassified as “other income” to the extent that they relate to foreign exchange currency gains and “non-operating expenses” to the extent that they relate to foreign currency exchange losses, in each case reported below the line of “loss from operations”.

15

In addition, the Company has identified significant deficiencies in its internal control over financial reporting as of December 31, 2015. These significant deficiencies are identified at the individual reporting entities as compared to an overall assessment for the Company due to the specific nature of the business segment that these entities operate in. These control deficiencies are isolated at the respective entities but are not common control deficiencies shared by other entities of the company. Significant deficiencies were identified in our internal control over financial reporting at PayByMe, Nganluong and Easy2Pay.

PayByMe is part of the MOLPoints business segment. In 2014, material weaknesses were identified in PayByMe in respect of lack of documentation and review of journal entries and weaknesses in the reconciliation and confirmation process, which in 2015 have been reassessed as a significant deficiency, due to the implementation of certain compensating controls during 2015. In connection with lack of review of journal entries, we intend to further strengthen our review process to ensure that the journals being prepared are properly verified and approved before being included in the financial statements of PayByMe. In connection with the reconciliation of collection and confirmation process, during 2016 we implemented various processes to ensure that reconciliation is done for collection on a timely basis. We are also reviewing the need to carry out more regular confirmation and plan to implement corrective measures to strengthen the internal control procedures.

With respect to Nganluong, which is part of the MOLPay business segment, significant deficiencies were identified relating to the lack of internal controls over reconciliation namely, revenue recognized on transaction fees and the corresponding other payable account that were unutilized or undrawn from user e-wallet balance, the timeliness of the reconciliation of other payable account of unutilized or undrawn user e-wallet credit as per the general ledger against the e-wallet balances generated from Nganluong’s operating system and for intercompany balances. In addition, there were no confirmations or statement of accounts sent to Nganluong’s e-wallet users, subsidiary ledger was not maintained to record the detail movement of transactions by each user and incomplete documentation retained for control procedures. In terms of General Information Technology Control, there was absence of key program change controls or password setting to Nganluong’s system, no proper documentation on the program changes and lack of segregation of duties between personnel performing development work and personnel implementing changes to the production environment and weaknesses in audit logging and review practices for the Nganluong databases.

With respect to Easy2Pay, which is part of the MOLPoints business segment, significant deficiencies were identified in relation to the weaknesses surrounding Easy2Pay’s General Information Technology Control such as the absence of formalized policies and procedures for the data center and network operations, access security, program change and system software acquisition, development and maintenance. It was also noted that there were absence of documentation in IT helpdesk incident management, no periodic testing for ongoing readability of the backup data stored on a replication server, absence of document approvals for user ID administration activities, absence of periodic access rights review and user ID housekeeping, absence of proper documentation for system software and program change management, multiple IT staff performing the role of system administrator and system developer, audit logs were not enabled for the Customer Management System (CMS) application and operating system hosting the CMS application and audit logs enabled for CMS database were not periodically reviewed for exceptions.

The Company intends to strengthen its reporting team by increasing the staff resource and hiring finance staff from established accounting firms to strengthen internal controls over financial reporting. In addition, the Internal Audit function has also been strengthened to provide additional supervisory and assurance on financial reporting. The company is also reviewing the feasibility of engaging an independent accounting practice to provide consultancy guidance on such complex transactions.

We can give no assurance that our planned remediation will be properly implemented or will be sufficient to eliminate such material weaknesses and significant deficiencies or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information.

Our Chief Executive Officer and Group Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2015 was not effective as a result of the material weaknesses and significant deficiencies in our internal control over financial reporting.

The audits of our independent registered public accounting firm included consideration of internal control over financial reporting, and the identified material weaknesses and significant deficiencies, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting.

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We are not required to, and our independent registered public accounting firm did not, undertake an audit of the effectiveness of our internal controls over financial reporting, whether of the type set forth in Section 404 of the Sarbanes-Oxley Act of 2002 or otherwise. Our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until our annual report on Form 20-F following the date on which we cease to qualify as an “emerging growth company,” which may be up to five full fiscal years following the date of our initial public offering. If in subsequent years we are unable to assert that our internal control over financial reporting is effective, or if our auditors express an opinion that our internal control over financial reporting is not effective, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

Certain errors were identified in our consolidated statements of financial position and our consolidated statements of profit or loss and other comprehensive income as of and for the three month periods ended December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2015 and the year ended December 31, 2014.

As disclosed in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016, we have restated our consolidated financial results for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month periods ended September 30, 2014 and 2015 and the years ended December 31, 2014 to correct our accounting for certain transactions entered into in connection with our acquisition of PayByMe. In particular, the restatements related to the put option granted to the holder of the non-controlling interest of PayByMe and our accounting for foreign currency gains/(losses) attributable to non-operating transactions in connection with a bank guarantee that we secured for the benefit of the holders of the non-controlling interest of PayByMe.

A review of the application of IFRS to put options granted by MOL AccessPortal (the “Put Options”), in connection with the acquisition by MOL AccessPortal of a 51% equity interest in PayByMe resulted in a restatement of previously issued financial statements for the year ended December 31, 2014. In September 2014, we acquired a 51% equity interest in PayByMe and in connection with the acquisition, MOL AccessPortal granted the Put Option to the holders of the non-controlling interest of PayByMe, pursuant to which the holders of the non-controlling interest have the contractual right to require MOL AccessPortal to subscribe for shares representing the remaining 49% equity interest in PayByMe that MOL AccessPortal does not already own (the “Option Shares”) in tranches during specified periods. These options are disclosed in note 17(b)(i) (Acquisition of Klon Ödeme ve Iletisim Teknolojileri Anonim Şirketi (“PayByMe”)) and 36(ii) (Derivative Financial Liabilities) to our consolidated financial statements. Upon reviewing the application of IFRS, we noted that we are required to recognize a gross obligation for the present value of the redemption amount of the Put Option because the holders of the non-controlling interest have the right to require MOL AccessPortal to pay cash or another financial asset in exchange for the Option Shares. The gross obligation must be recognized at an amount equal to the present value of the estimated amounts that could be required to be paid to the holders of the non-controlling interest in accordance with the shareholders agreement between MOL AccessPortal and the holders of the non-controlling interest and are subject to re-measurement at the end of each reporting period. Changes in the measurement of the gross obligation due to the unwinding of the discount or changes in the estimated amounts that the acquirer could be required to pay are recognized in profit or loss at the end of each reporting period. As a result, we restated our put option written on non-controlling interest on our consolidated statements of financial position as of September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, and December 31, 2015. In addition, the gross obligation on in-substance forward recognized in connection with these options gives rise to a loss on re-measurement of gross obligation to be reported as “finance costs”, on our consolidated statements of profit or loss and other comprehensive income for the three and nine month periods ended September 30, 2014 and 2015, the three month periods ended December 31, 2014 and 2015, the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the year ended December 31, 2014. None of the fair value adjustments and corresponding re-measurements have any impact on our operating cash flows during the relevant periods. The gain/(loss) on re-measurement of gross obligation that should be recognized in our consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 was MYR0.4 million, MYR (4.2) million, MYR (2.9) million and MYR (2.3) million respectively. For the six months ended June 30, 2015 and the nine months ended September 30, 2015 the loss on re-measurement of gross obligation was MYR (3.7) million and MYR (6.7) million respectively. For the three month period and year ended December 31, 2014, the loss on re-measurement of gross obligation was MYR(3.2) million. Accordingly, a restatement has been made to the consolidated financial statements as of and for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2014 and 2015 and the year ended December 31, 2014.

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Furthermore, as required under the terms of our acquisition of PayByMe, we secured a bank guarantee for the benefit of the holders of the non-controlling interest of PayByMe in December 2014. These funds were originally treated as working capital. However, having reviewed the nature of the transactions in connection with the bank guarantee, we have determined that these transactions are non-operating in nature. Accordingly, all foreign exchange gains or losses should be recognized as either “other income” if they relate to foreign currency exchange gains and “non-operating expenses” if they relate to foreign currency exchange losses. As a result of the above and in an effort to better reflect the nature of the foreign currency transactions during the year, we determined to restate our foreign exchange transactions according to the nature of the transactions in particular whether or not they are deemed attributable to operations. Foreign exchange gain/(loss) attributable to non-operating transactions of MYR1.7 million, MYR(0.2) million and MYR6.0 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively, and MYR1.6 million and MYR7.6 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, respectively. In our restated condensed interim consolidated statements of profit or loss for the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the three and nine month periods ended September 30, 2015, these amounts are reclassified as “other income” to the extent that they relate to foreign exchange currency gains and “non-operating expenses” to the extent that they relate to foreign currency exchange losses, in each case reported below the line of “loss from operations”.

The effects of the restatement are disclosed in greater detail in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016.

These prior errors are related to ineffective internal control over financial reporting, which may prevent us from preparing our financial statements in compliance with IFRS without material errors in the future.

See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business - Certain errors were identified in our consolidated statements of financial position and our consolidated statements of profit or loss and other comprehensive income as of and for the three month periods ended December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2015 and the year ended December 31, 2014” and “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.

As disclosed in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, during the course of our review of our financial results for the third quarter of 2014, and our review of our financial results for the fourth quarter of 2014, certain accounting errors were identified at our Vietnam subsidiary, Nganluong, which we acquired in March 2013. These errors have the effect of overstating our revenue and direct cost and other ancillary expenses for certain periods by equal amounts and do not affect any other line item in our consolidated statements of profit or loss and other comprehensive income for such periods.

As disclosed in our interim report on Form 6-K (File No. 001-36637), furnished to the SEC on December 2, 2014, during the course of our review of our financial results for the third quarter of 2014, it was discovered that Nganluong reported revenue from its payment business on a gross basis, and accounted for the corresponding fees payable to merchants in direct cost and other ancillary expenses. However, our accounting policy is to account for such transactions on a net basis because we act as an agent with respect to these revenue arrangements, such that the corresponding fees payable to merchants should have been netted out of revenue and not included in direct cost and other ancillary expenses. The effect of these errors was to overstate MOLPay’s segment revenue and MOLPay’s segment direct cost and other ancillary expenses by equal amounts. As a result of these errors, the revenue line item and direct cost and other ancillary expenses line item in our consolidated statements of profit or loss and other comprehensive income for the three month periods ended June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013 included in our registration statement on Form F-1, as amended (File Number: 333-197401) in relation to our initial public offering were overstated by equal amounts. Our financial results for the three months ended September 30, 2014 disclosed in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014, and our financial results for the three months and year ended December 31, 2014 disclosed in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on March 31, 2015, correctly reported revenue and direct cost and other ancillary expenses on a net basis.

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The effects of accounting for payments on a gross basis rather than a net basis on our consolidated statements of profit or loss and other comprehensive income (with percentages against corrected amounts) are that:

(i) revenue was overstated by MYR0.3 million (0.8%), MYR1.0 million (2.4%), MYR0.9 million (2.0%), MYR1.6 million (3.4%), MYR2.1 million (4.5%), MYR7.2 million (14.7%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014, respectively; by MYR1.3 million (1.7%) and MYR9.3 million (9.7%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR3.7 million (2.2%) for the year ended December 31, 2013; and

(ii) direct cost and other ancillary expenses was overstated by MYR0.3 million (2.1%), MYR1.0 million (5.5%), MYR0.9 million (5.5%), MYR1.6 million (8.8%), MYR2.1 million (10.2%) and MYR7.2 million (32.2%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014, respectively; by MYR1.3 million (4.0%) and MYR9.3 million (21.7%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR3.7 million (5.7%) for the year ended December 31, 2013.

In addition, during the course of our review of our financial results for the fourth quarter of 2014, it was discovered that Nganluong incorrectly included VAT in revenue and direct cost and other ancillary expenses. However, our accounting policy is to exclude VAT from revenue and direct cost and other ancillary expenses. The effect of these errors was to overstate MOLPay’s segment revenue and MOLPay’s segment direct cost and other ancillary expenses by equal amounts. As a result, the revenue line item and direct cost and other ancillary expenses line item are overstated by equal amounts in our consolidated statements of profit or loss and other comprehensive income for the three month periods ended June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013 (each of which is included in our registration statement on Form F-1, as amended (File Number: 333-197401) in relation to our initial public offering), and the three months ended September 30, 2014 (which is included in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014). Our financial results for the three months and year ended December 31, 2014 disclosed in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on March 31, 2015 correctly reported revenue and direct cost and other ancillary expenses excluding VAT.

The effects of including VAT in revenue and direct cost and other ancillary expenses on our consolidated statements of profit or loss and other comprehensive income (with percentages against corrected amounts) are that:

(i) revenue was overstated by MYR43,000 (0.1%), MYR0.2 million (0.5%), MYR0.1 million (0.3%), MYR0.2 million (0.4%), MYR0.2 million (0.4%), MYR1.0 million (2.0%) and MYR0.5 million (1.1%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, respectively; by MYR0.2 million (0.3%) and MYR1.2 million (1.2%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR0.6 million (0.3%) for the year ended December 31, 2013; and

(ii) direct cost and other ancillary expenses was overstated by MYR43,000 (0.3%), MYR0.2 million (1.0%), MYR0.1 million (0.7%), MYR0.2 million (1.2%), MYR0.2 million (1.0%), MYR1.0 million (4.6%) and MYR0.5 million (2.5%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, respectively; by MYR0.2 million (0.7%) and MYR1.2 million (2.8%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR0.6 million (0.8%) for the year ended December 31, 2013.

The aggregate effects of the foregoing errors on our consolidated statements of profit or loss and other comprehensive income (with percentages against corrected amounts) are that:

(i) revenue was overstated by MYR0.3 million (0.9%), MYR1.2 million (2.9%), MYR1.0 million (2.3%), MYR1.8 million (3.9%), MYR2.3 million (4.9%), MYR8.2 million (17.0%) and MYR0.5 million (1.1%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, respectively; by MYR1.5 million (2.0%) and MYR10.5 million (11.1%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR4.3 million (2.6%) for the year ended December 31, 2013; and

(ii) direct cost and other ancillary expenses was overstated by MYR0.3 million (2.4%), MYR1.2 million (6.6%), MYR1.0 million (6.3%), MYR1.8 million (10.0%), MYR2.3 million (11.2%), MYR8.2 million (38.2%) and MYR0.5 million (2.5%) for the three months ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, respectively; by MYR1.5 million (4.8%) and MYR10.5 million (25.2%) for the six months ended June 30, 2013 and 2014, respectively; and by MYR4.3 million (6.6%) for the year ended December 31, 2013.

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We determined not to restate our financial statements for the full year or any interim period in 2013, as we concluded that the adjustments are not material to our consolidated financial statements as a whole for any period in 2013. In particular, we considered the quantitative effect of the errors on our revenue and direct cost and other ancillary expenses for 2013, the quantitative materiality of our MOLPay segment for 2013, and a variety of qualitative criteria including those set forth in SEC Staff Accounting Bulletin No. 99: Materiality. In relation to the relevant financial periods of 2014, we restated our financial statements for the three month periods ended March 31, 2014, June 30, 2014 and September 30, 2014 and the six months period ended June 30, 2014 to account for these errors.

These prior errors are related to ineffective internal control over financial reporting, which may prevent us from preparing our financial statements in compliance with IFRS without material errors in the future.

Class action litigation may expose us to significant liabilities, result in negative publicity and have a material adverse effect on our reputation, business, financial condition, results of operations and prices of our ADSs.

Between November 24, 2014 and December 2, 2014, three putative class actions were commenced against, among others, MOL Global, Inc. (“MOL”) and certain of its officers and directors, in the United States District Court for the Southern District of New York captioned Freedman v. MOL Global, Inc., et al., 14 CV 9357 (WHP), Grodko v. MOL Global, Inc., et al., 14 CV 9397 (WHP) and Jewell v. MOL Global, Inc., et al., 14 CV 9493 (WHP). Each asserts claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of investors who acquired MOL American Depository Shares (“ADSs”) between October 9, 2014 and November 20, 2014, and/or who acquired ADSs pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with MOL’s October 9, 2014 initial public offering. The Freedman and Grodko actions also assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

On December 22, 2014, plaintiffs voluntary dismissed the Grodko action. Motions for lead plaintiff were due on or about January 23, 2015.

On May 8, 2015, the Court consolidated the actions and appointed Lead Plaintiff and Lead Counsel. A consolidated complaint was filed on July 7, 2015 and a second consolidated amended complaint was filed on October 7, 2015. MOL’s motion to dismiss the second consolidated amended complaint was fully briefed as of December 21, 2015.

The parties entered into a stipulation and settlement agreement dated April 11, 2016 to dismiss all claims with prejudice. The settlement is subject to court approval. A motion for preliminary approval of the settlement agreement was filed with the Court on April 12, 2016.

Our consolidated financial statements are prepared and presented in accordance with IFRS, while the financial statements of our subsidiaries are prepared and presented in accordance with local generally accepted accounting principles, or GAAP.

Because the financial statements of certain of our subsidiaries are not prepared and presented in accordance with IFRS certain adjustments are required in the consolidation process. If such adjustments are not properly implemented there could be errors in our consolidated financial statements. For example, the local reporting in certain countries in which we operate such as Turkey is under local GAAP which may not be consistent with IFRS. As such, we depend on local accounting staff in each of the foreign reporting entities that do not report according to IFRS to provide a reconciliation to IFRS and as such, in the process of consolidation, errors may exist due to the inability of the foreign accounting staff to provide IFRS compliant financial statements. The Company continues to implement training and development initiatives to increase the IFRS skills of local accounting staff and also, has been strengthening the group reporting function to provide supervision over IFRS reporting by foreign subsidiaries. See “Risk Factors – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.” However, there is still a risk that the existing controls being implemented at headquarters to prevent and detect errors in financial reporting from these foreign countries may fail to prevent errors in financial reporting of these foreign countries in the future.

There is no assurance that we will be able to maintain the pace of recent growth in our business and develop, or sustain, profitable operations in new markets.

A significant proportion of our recent growth has been derived from our expansion to new markets, especially through acquisitions, as a critical element of our business strategy depends on our ability to profitably develop and grow our operations in several countries outside Malaysia, including Thailand, Turkey, Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan and Vietnam, among others.

20

Our successive acquisitions and rapid expansion make comparisons with historical data difficult, as these acquisitions have contributed significantly to our revenue growth and expansion of our operations. For example, we acquired 51% of PayByMe in 2014. Our revenue from Turkey for 2015 was MYR70.6 million, or 28.4% of our total revenue for 2015. If we reduce the pace of our acquisitions, our future revenue growth and expansion may be affected.

Furthermore, because we engage in a significant number of relatively small acquisitions, it is not always cost-effective to conduct due diligence as thoroughly as we would in connection with more material acquisitions. For example, where we acquire companies with substantial inventory, it is possible that a significant portion of the inventory is obsolete, in which case the acquired company may not be as valuable as expected. We may not discover this until after we have agreed the price, or consummated, the acquisition, in which case we may be required to write down the value of the acquired company.

Our growth strategy entails, among others, developing platform interfaces in local languages adapted for local practices and tastes, recruiting and retaining local management personnel, introducing product offerings that are localized and customized for users in those markets, complying with new and changing regulatory environments, developing and maintaining a substantial network of physical payment locations and contracting local merchants to offer our services to their customers. We have a limited operating history in most countries outside Malaysia where we operate and, in certain of these countries, we are not yet profitable. Furthermore, as we enter new markets in the future, we generally expect to operate at a loss for a period while we seek to develop our brands and relationships in that market. There is no assurance that we will be able to develop profitable operations in all the countries in which we are currently operating or which we may enter in the future. Our inability to develop profitable operations in such markets would have an adverse effect on our business, financial condition and results of operations.

If we fail to effectively manage our growth, our business and results of operations could be materially and adversely affected.

We have experienced rapid growth in recent years in the scope of our operations, which will continue to place significant demands on our management and our operational, financial and technological infrastructure. As we continue to grow, we must expand significant resources to identify, hire, integrate, develop and motivate a large number of qualified employees. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our growth prospects could be adversely affected.

To effectively manage the growth of our business and operations, we will need to continue spending significant resources to improve our technology infrastructure, our operational, financial and management controls, and our reporting systems and procedures by, among other things:

• setting up a network operations center to monitor and update our technology infrastructure to maintain high performance, enhance system availability and minimize down time;

• implementing third party solutions to enhance information and communication systems with a view to ensuring that our employees and offices around the world are well-coordinated and can effectively communicate with each other;

• enhancing our internal controls to ensure timely and accurate reporting of all of our operations by implementing the SAP Business One accounting system regionally;

• documenting our information technology systems and our business processes, for example by adopting a product requirements definition, functional requirements definition, technical design definition, merchant integration guide and payment integration guide, among other policy documents;

• implementing a business continuity plan and a disaster recovery plan for our servers outside Malaysia similar to that which we implemented for our main servers in Kuala Lumpur in 2013; and

• expanding our information technology infrastructure into a third party cloud platform.

These enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these enhancements and improvements effectively, our ability to manage our expected growth and comply with the rules and regulations that are applicable to public reporting companies will be impaired. In addition, if our operating costs are higher than we expect or if we do not maintain adequate control of our costs and expenses, results of operations will be materially and adversely affected.

21

The growing complexity of our business may result in the segmental reporting of our results of operations to become less meaningful and we may make changes to our business segments and the manner in which we allocate revenue among our business segments.

For management purposes, our business is organized into five segments, namely MOLPoints, MOLReloads, MOLPay, MMOG.asia, and Others. Due to the growing complexity of our business, and because we seek to leverage the revenue generating capabilities of each business segment, there is a degree of overlap among these segments. As a result, our management exercises discretion in determining the segment to which a portion of our revenue is allocated. For example, sales of game credits are generally allocated to our MOLPoints segment. However, for transactions where a consumer uses MOLPay as a payment gateway to purchase game credits, the resulting revenue is allocated to our MOLPay segment. Such transactions accounted for revenue of, MYR4.5 million, MYR4.2 million and MYR12.8 million, or 2.6%, 2.1% and 5.1% of our total revenue, for 2013, 2014 and 2015, respectively. As the significance of such transactions grows, our segmental reporting of results of operations may become less meaningful and we may make changes to our business segments and the manner in which we allocate revenue among those segments. Any of the foregoing could cause our results of operations for future periods not to be comparable to our results of operations for prior periods and may require retrospective adjustment to prior periods.

Our mobile carrier billing business exposes us to certain risks.

We expanded our mobile carrier billing business with MOL Thailand’s acquisition of 60% of Easy2Pay in May 2014 and our acquisition of 51% of PayByMe in September 2014. This business, which enables consumers to use their mobile phone accounts to pay for online purchases, exposes us to certain risks. For example, telecommunications service operators may set policies, or become subject to regulations, that limit customers’ usage, which would effectively limit the potential size of our mobile carrier billing business. Similarly, regulations could be enacted that effectively control and standardize the digital payments industry or prevent subscribers from being charged for third party transactions on the mobile phone statement. There is also a risk that goods purchased through mobile carrier billing may not ultimately be paid for, for example if goods are purchased using a stolen phone, if a consumer uses false personal data to sign up for mobile account or if a consumer simply neglects to pay their mobile phone bill. If a mobile subscriber refuses to pay their mobile phone bill, this would result in bad debt and would typically be subject to the telecommunications service provider’s collection policies. As with other technologies, there is a risk that our, or a telecommunications service provider’s, platform, or a consumer’s mobile phone, could be hacked or infected with malware resulting in potential unauthorized transactions. Furthermore, our mobile carrier billing business requires working capital to the extent we are required to pay online merchants before we receive revenue from the telecommunications service provider. We are presently negotiating to acquire the next tranche, 20% of Easy2Pay which is expected to be concluded during the year 2016. In addition, there is a trend that game developers, publishers and telecom providers may decide to work directly with each other. For instance, in Malaysia some game developers, publishers and telecom companies are already working directly with each other. This trend can adversely affect our ability to grow the carrier billing business. Any of the foregoing could have an adverse effect on our business, financial condition and results of operations.

Our payment system might be used for fraudulent, illegal or improper purposes such as money laundering, which could expose us to additional liability and harm our business.

Despite measures we have taken and continue to take, our payment system remains susceptible to potentially illegal or improper uses. These may include the use of our payment services in connection with fraudulent sales of goods or services, software and other intellectual property piracy, money laundering, bank fraud and prohibited sales of restricted products. Criminals are using increasingly sophisticated methods to engage in illegal activities such as counterfeiting and fraud. It is possible that incidents of fraud could increase in the future. We could be subject to fraud claims if confidential information obtained from customers is used for unauthorized purchases with misappropriated bank card information or impersonation. In addition, we are subject to the risk of claims related to counterfeit MOLPoints or fraud committed by merchants where customers use MOLPoints, either of which could cause consumers and merchants to lose confidence in our products, damage our reputation and subject us to liability claims. We are also subject to the risk that users could use our system to engage in illegal or improper activities, which could damage our reputation.

Our risk management policies and procedures may not be fully effective to identify, monitor and manage these risks. We are not able to monitor in each case the sources for our counterparties’ funds or the ways in which they use them. Increases in chargebacks or other liability could have a material adverse effect on our business, financial condition and results of operations. Furthermore, an increase in fraudulent transactions or publicity regarding chargeback disputes could harm our reputation and reduce consumer confidence in our services.

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As we expand our business internationally, we will face additional business, political, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder such growth.

We expect to continue to devote significant resources to international expansion through acquisitions and organic growth, including the establishment of additional offices. Expanding our business internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal and regulatory systems, alternative dispute systems and commercial infrastructures. For example, we may become subject to risks that we have not faced before or increase the risks that we currently face, including risks associated with:

• recruiting and retaining talented and capable management and employees in various countries;

• challenges caused by distance, language and cultural differences;

• contracting with content providers for games and other digital content that appeal to the tastes and preferences of users in international markets;

• competition from local competitors with significant market share in those markets and with a better understanding of consumer preferences;

• protecting and enforcing our intellectual property rights;

• negotiating agreements that are sufficiently economically beneficial to us and protective of our rights;

• the inability to extend proprietary rights in our brand, content or technology into new jurisdictions;

• implementing our payment methods for virtual and other goods in a manner that complies with local laws and practices and protects us from fraud;

• complying with applicable foreign laws and regulations, including privacy laws, consumer protection laws, anti-money laundering laws, and laws and regulations relating to content, currencies and payment systems;

• currency exchange rate fluctuations;

• protectionist laws and business practices that favor local businesses in some countries;

• foreign tax consequences;

• foreign exchange controls or tax restrictions that might restrict or prevent us from repatriating income earned in foreign countries;

• political, economic and social instability; and

• higher costs associated with doing business internationally.

Entering new international markets or expanding our operations in existing international markets will involve substantial cost and our ability to successfully gain market acceptance in any particular market is uncertain. There can be no assurance that we will be able to successfully grow our business internationally.

Our expansion into new jurisdictions could involve challenges for us associated with the social, regulatory, political or economic environments in those jurisdictions, particularly where those jurisdictions have economies that are generally considered to be developing. For example, we plan to expand into a number of countries that are widely considered to have developing economies, such as countries in the Middle East, North Africa, Eastern Europe and in Latin America and will face additional risks associated with our expansion into these regions. In recent years there has been considerable political instability in the Middle East and North Africa, extending to Turkey. Such political instability could negatively affect operations within these countries or expansion plans into other countries in the territory. Any of the forgoing could have an adverse impact on our business, financial condition and results of operations.

Our subsidiaries in Thailand are subject to restrictions on foreign ownership of their shares under Thai law.

Pursuant to the Thai Foreign Business Act B.E. 2542 (1999), or FBA, a “foreign entity” (as defined in the FBA) cannot conduct business in certain sectors in Thailand, including the industry that our subsidiaries in Thailand operate in, unless an appropriate license is obtained. As our subsidiaries in Thailand do not hold such license, they are subject to restrictions on foreign ownership of their shares in order to ensure that none of them are “foreign entities” under the FBA.

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Under the FBA, it is also unlawful for a Thai national or entity to hold shares in a Thai company as a nominee for or on behalf of a foreigner in order to circumvent the foreign ownership restrictions. While there are no clear official guidelines or criteria stipulated under the FBA or by the Ministry of Commerce of Thailand in determining whether a Thai national or entity is holding shares in a Thai company as a nominee for or on behalf of a foreigner, certain factors are generally considered, including: (i) the intention of the parties, (ii) the source of funds used for the investment by the Thai shareholder, (iii) the direct voting rights of the Thai and foreign shareholders in the Thai company and (iv) the distribution of dividends by the Thai company to the Thai and foreign shareholders.

Based on the advice of counsel, we believe that the ownership structure of our Thai subsidiaries is in compliance with applicable Thai law based on, among others, the fact that a majority of the share capital of our Thai subsidiaries is held by Thai nationals or entities for their own benefit. We therefore, believe that our subsidiaries in Thailand are not “foreign entities” under the FBA, and that the share ownership structure of our subsidiaries in Thailand do not violate the legal prohibitions against nominee arrangements. However, there is a risk that the Ministry of Commerce of Thailand may reach a different conclusion, which could lead to an action being brought in the Thai court. If the court determines that a nominee arrangement exists with respect to any of our subsidiaries in Thailand, the court may order sanctions, which may include criminal sanctions, against us and the Thai shareholders of such subsidiary in Thailand, and such subsidiary may be ordered to cease operations in Thailand, which would have a material adverse effect on our business, financial condition and results of operations.

We may encounter problems relating to the businesses that we operate with minority shareholders.

We operate a number of our businesses through subsidiaries that are not wholly owned by us. Among others, we own, directly or indirectly, 86.73% of MOL Thailand; 50% of Nganluong, which conducts our operations in Vietnam; 54.2% of Rixty, which conducts our operations in the United States and Brazil; 65% of MOL Australia, which conducts our operations in Australia; 93.50% of MOL Taiwan, which conducts our operations in Taiwan; 51% of MOLPay Sdn. Bhd., which operates our e-commerce payments service; an effective 52% interest in Easy2Pay, a mobile carrier billing platform that operates in Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Singapore and 51% of PayByMe, a mobile carrier billing platform that currently operates in Turkey, Saudi Arabia, UAE, Kuwait, Qatar, Oman, Jordan, Lebanon, Iraq, Bahrain, Egypt and Azerbajian. To the extent there are disagreements between us and the other holders of equity interests in our subsidiaries regarding the business and operations of these companies, we cannot assure you that we will be able to resolve them in a manner that will be in our best interests. In addition, our partners in our subsidiaries may be unable or unwilling to fulfill their obligations, whether of a financial nature or otherwise; have economic or business interests or goals that are inconsistent with ours; take actions contrary to our instructions or requests, or contrary to our policies and objectives; take actions that are not acceptable to regulatory authorities; or experience financial difficulties. Any of the foregoing could have a material adverse effect on our business, prospects, financial condition and results of operations.

We may be subject to additional tax liabilities, which could materially and adversely affect our business, financial condition and results of operations.

The application, interpretation and enforcement of sales and use tax, VAT, goods and services tax (GST), business tax, gross receipt tax, and other taxes and related regulations applicable to e-commerce businesses and consumers are complex and evolving. Primarily because many of the laws and regulations relating to taxation were established prior to the widespread adoption of the internet and e-commerce, it is not always clear how these laws apply to businesses such as ours. In addition, as governments seek to increase tax revenue, certain jurisdictions in which we operate have considered tax reform, including proposals to increase taxes on e-commerce businesses and consumers. Furthermore, companies in the payment processing industry, including us, may become subject to taxation in various tax jurisdictions, some of which may not have adopted uniform positions on this topic. Any change to tax regulations relating to our business or our customers, and any change to the application, interpretation or enforcement of such regulations, could adversely impact our revenues or the cost of our products to our customers. For example, as a result of the implementation of GST in Malaysia, commencing from April 1, 2015 we will be required to collect GST in connection with sales of our products in Malaysia. Any failure to comply with our obligations in this respect could result in penalties. In addition PayByMe has collected VAT that we believe we will not be required to remit to the local tax authorities because the VAT was collected from foreign merchants who are not registered in Turkey. This VAT is recognized by PayByMe as revenue and this revenue recognition would have to be reversed if the local tax authorities claim that this VAT is payable to them. In 2015, Turkey’s PaytoGo business in Turkey was subjected to a tax enquiry on unaccounted invoices and minor petty cash transactions that were not in compliance with local tax laws between 2009 to 2012, relating to periods prior to our acquisition. We have been able to negotiate with the sellers to vary the terms of the US$4 million escrow agreement which was signed as part of the terms of the acquisition. Based on the original terms of the escrow, we would have been required to pay US$4 million by January 31, 2016. However, we successfully negotiated with the Sellers to permit the withholding of US$0.5 million of the amount in escrow against any potential tax penalty notice. We expect the tax authority to make a penalty order for PaytoGo against the non-compliance of the tax law. As of to-date, we have received a tax penalty letter dated January 8, 2016 for TR36720. On December 24, 2015, we received another letter from the tax authorities advising that they have opened a tax enquiry in respect of financial year 2013, a period deemed to be after the acquisition. In March 2016, we were informed by the Turkey tax authority of a conciliation meeting planned in April 2016 to discuss possible non-compliance with tax regulations by our business in Turkey. As the meeting is still in its preliminary stage, we are not able to assess the main taxation issues and the likely impact on the business.

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Our competitive position may be adversely impacted if our business or customers are taxed differently from our competitors, whether due to the jurisdictions in which we or our competitors are organized, located or operating, or for any other reason. It is also possible that we could be found liable to pay taxes with respect to previous tax periods during which we are found to have been liable to collect and pay taxes and failed to do so. Furthermore, any requirement for us to calculate, collect or pay taxes that are levied on our business or our customers, and any resulting communication, review, audit or inspection, could consume financial resources and divert management attention from our core operations. In addition, certain policies that we develop and apply to our operations, including but not limited to transfer pricing policies, can impact our tax position and there can be no assurance that such policies and our application of such policies will not be challenged by the regulators. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We benefit from certain tax exemptions that will expire.

Several of our Malaysian subsidiaries have been granted Multimedia Super Corridor Malaysia, or MSC Malaysia, status by the Minister of Finance of Malaysia and the Minister of International Trade and Industry of Malaysia, and enjoy certain incentives, including “pioneer status,” which entitles a company to a five-year exemption from Malaysian income tax on income derived from MSC Malaysia-related activities, which is renewable for a second five-year term provided certain conditions are met. There can be no assurance that we will continue to benefit from these incentives or that these incentives will not be revoked or modified in any way in the future. While several of our Malaysian subsidiaries have only recently been granted this exemption, MyCNX’s second five-year exemption will expire in 2017, and MyCNX will thereafter be subject to Malaysian income tax.

Failure to continue to develop and expand our product and service offerings and their features, and to develop or incorporate the technologies that support them, could jeopardize our competitive position.

We participate in an industry characterized by rapidly changing technology and new products and services. For example, in recent years there has been an increasing emphasis on the delivery of games, music and other content on mobile devices, in addition to e-wallets and similar mobile electronic payment products and services. To remain competitive, we must continue to develop and expand our product and service offerings. We must also continue to enhance and improve the user interface, functionality and features of our websites. These efforts may require us to develop internally, or to license, increasingly complex technologies. In addition, our competitors may introduce new internet-related products, services and technologies, which will require us to update or modify our own technology to keep pace. Purchasing preferences for mobile airtime may change, which could reduce the demand for the airtime sold through our MOLReloads distribution network. In addition, a shift to post-paid mobile services in our key markets may negatively impact our MOLReloads business. Developing and integrating new products, services and technologies into our existing businesses could be expensive and time-consuming. Furthermore, we may not be able to license technology we require on commercially acceptable terms or at all. We may not succeed in incorporating new internet or mobile technologies or obtaining approvals for the use of our products on mobile operating systems, or, in order to do so, we may incur substantial expenses. If we fail to develop and introduce or acquire new content, features, services or technologies effectively and on a timely basis, we may cease to attract new consumers and merchants and may be unable to retain our existing consumers and merchants, any of which could adversely affect our business, financial condition and results of operations.

In addition, MMOG.asia expects to launch 14 new online games in 2016 including 12 mobile games. If these new games or our entrance into new markets and mobile games are delayed or fail to gain market acceptance, our growth prospects could be materially and adversely affected.

We are subject to extensive government regulation, including regulations with respect to electronic payment services and data privacy, among others.

Our business is impacted by laws and regulations that affect our industry, and their scope has increased significantly in recent years. We are subject to a variety of regulations aimed at preventing money laundering and financing criminal activity and terrorism, financial services regulations, electronic payment services regulations, consumer protection laws, currency control regulations, and privacy and data protection laws. Money laundering and the financing of terrorism are prohibited in Malaysia, which also has regulations requiring certain entities to report certain activities to BNM. MOL AccessPortal (as an issuer of e-money) and MOLPay Sdn. Bhd. (as a payment systems operator) are considered “reporting institutions” and are under an obligation to monitor and report suspicious transactions to BNM. They are also required to implement various measures such as know your customer procedures and ongoing customer due diligence to facilitate the prevention of money laundering and terrorism financing offences. In Malaysia, we are also subject to consumer protection laws which imply certain statutory guarantees as to the quality of services provided and prohibit misleading and deceptive trade practices and the imposition of unfair contract terms. In 2015, PayByMe Turkey was required to apply to the Banking Regulations Supervisory Agency for an e-money license. Similarly, in 2016, MOLThailand was also required to apply for an e-money license to operate the payment business with the banking authorities in Thailand. Both these licenses also imposed a capital requirement under the relevant banking regulation.

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Furthermore, these laws and regulations vary significantly from country to country and are often evolving, unclear or inconsistent with other applicable laws. For example, in Malaysia we are subject to the Malaysian Financial Services Act of 2013 as a non-bank e-money issuer and provider of merchant acquiring services, which in turn makes us subject to a number of other regulations. In particular, MOL AccessPortal’s business as an e-money issuer is dependent on it maintaining its approval from BNM (which BNM has the right to reassess at any time).

MOL AccessPortal distributes MOLPoints in several markets outside of Malaysia. We obtain licenses in jurisdictions where we believe they are required based on the nature of our business activity and the legal and regulatory requirements in such jurisdictions. It is possible, however, that the authorities in certain jurisdictions may take the position that we are required to obtain licenses or otherwise comply with laws and regulations which we believe are not required or applicable. As a result, we may be required to change the manner or business activity that we conduct in such markets, obtain licenses or otherwise comply with regulations. We may also be subject to penalties and sanctions for previously operating without a license. See “Regulation.”

In certain jurisdictions, governments have not yet issued relevant regulations or implementation guidelines to relevant regulations, but are expected to issue new regulations or implementation guidelines in the near future. The implementation of new regulations or guidelines could require us to change the way we conduct our business, incur new expenses or retain legal counsel or additional staff to ensure compliance with such regulations. Any of the foregoing could have a material and adverse effect on our results of operations and growth prospects. As we further expand internationally, the geographical scope and complexity of the regulation frameworks to which we are subject will increase.

In addition, we receive, store and process personal information and other data. The regulatory framework for privacy issues worldwide is currently in a state of flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission and security of personal information by companies operating over the internet and mobile platforms have recently come under increased public scrutiny. Various government and consumer agencies have called for new regulation and changes in industry practices. It is possible that obligations imposed under applicable laws may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to our users or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of information or other data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our users to lose trust in us, which could have an adverse effect on our business. Furthermore, if third parties with whom we work, such as individual users, distribution partners, content providers and online merchants, violate applicable laws or our policies, such violations may put information at risk and could have an adverse effect on our reputation and business.

We will need to obtain government approvals to implement our growth strategy.

Implementing our growth strategy may require approvals from governmental entities in Malaysia and other jurisdictions where we have operations. For example, as a result of regulatory restrictions in Malaysia relating to online payments, we are required to limit the balance of MOLPoints in a registered account to MYR500. In April 2015, we received conditional approval from BNM to increase this limit to MYR1,500 from MYR500 subject to fulfilling certain BNM requirements. For accounts based in a country where we accept local currency other than Malaysia, the balance is not permitted to exceed the local currency equivalent of MYR500, which will increase to MYR1,500 upon our fulfillment of the specified BNM requirements. For accounts based in all other countries, transactions are denominated in U.S. dollars and the balance is not permitted to exceed the U.S. dollar equivalent of MYR500, which will increase to MYR1,500 upon our fulfillment of the specified BNM requirements. For all accounts based outside Malaysia, we adjust the balance limit whenever the exchange rate between the applicable currency and Malaysian Ringgit fluctuates by at least 5% since the most recent adjustment.

Failure to attract and retain qualified personnel could jeopardize our competitive position.

Our business functions at the intersection of rapidly changing technological, social, economic and regulatory developments that require a wide ranging set of expertise and intellectual capital. In order for us to compete and grow successfully, we must attract, recruit, retain and develop the necessary personnel who can provide the needed expertise across the entire spectrum of our intellectual capital needs. This is particularly true with respect to qualified and experienced software engineers and IT staff, who are highly sought after and are not in sufficient supply in Malaysia and in most other markets in which we operate. The market for such personnel is highly competitive, and we may not succeed in recruiting additional personnel or may fail to replace current personnel who depart with qualified or effective successors. It may also be difficult for us to obtain necessary qualified personnel with local experience to support our international growth, which may jeopardize our ongoing and planned expansion. For this reason, we are reliant on certain managers who have joined us through our acquisitions, including but not limited to certain managers of MyCNX, in addition to our CEO, Preecha Praipattarakul, who joined us through our acquisition of MOL Thailand. Our efforts to retain and develop personnel may result in significant additional expenses, which could adversely affect our profitability. Failure to retain or attract key personnel could have a material adverse effect on our business, financial condition and results of operations.

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Our success depends upon our senior management and key managerial personnel and our ability to retain them and attract new key personnel when necessary.

We place substantial reliance on the industry experience and knowledge of our senior management team as well as the senior management teams at our subsidiaries in our key operating countries and their relationships with other industry participants. Finding suitable replacements for our current senior management could be difficult as competition for such talent is intense. For example, our CEO, Preecha Praipattarakul and MOLAP’s Chief Executive Officer, Wilson Soon Poh Beng, are each particularly important to our future success. In addition, historically, once we acquire a new subsidiary, we tend to retain the key personnel at such subsidiary, including, in a number of cases, the founder, and these personnel are especially important for our businesses in the relevant countries. Furthermore, our CEO, Preecha Praipattarakul and Wilson Soon Poh Beng, assumed these roles in January 2016 and October 2015 respectively. Preecha Praipattarakul had previously served as the Chief Executive Officer of our subsidiary, MOL Thailand. Wilson Soon Poh Beng had previously served as MOLAP’s Chief Operating Officer. During 2015, our founder and former Director and Executive Chairman, Ganesh Kumar Bangah, our former Co-Chief Executive Officer, Charles Chee Chau Ng, and our former Independent Director, Noah Doyle, each resigned from their positions with the Company. There can be no assurance we will not experience further departures of management or directors, nor that our business will not be adversely affected by these or any other departures. We do not carry key person insurance on any member of our senior management team. The loss of one or more members of our senior management team could hinder our ability to effectively manage our business, adversely affect our international operations and harm our ability to implement our growth strategies.

Potential acquisitions may disrupt our ability to manage our business effectively, including our ability to successfully integrate acquired businesses into our existing operations.

We have in the past and expect to continue to engage in acquisitions and other inorganic growth opportunities, especially as we expand into new markets. Acquisitions and the subsequent integration of new companies or businesses require significant attention from our management, in particular to ensure that the acquisition does not disrupt any existing collaborations, or affect our users’, distribution channels’ and merchants’ opinions and perceptions of our services and customer support. As part of our strategy of expansion, we have in the past, and may, from time to time, acquire businesses or interests in businesses, including non-controlling interests, form joint ventures or create strategic alliances. For example, in 2013 we acquired 70% of each of Game Sultan, which operates a micropayment system for the Turkish market, and PaytoGo, which operates a payment service provider for the Turkish market, and AyoPay, an Indonesian payment service provider that specializes in online distribution of game credits. We acquired the remaining 30% equity interest in each of Game Sultan and PaytoGo in 2014. We also acquired 50% of Nganluong, which now serves as our primary distribution network in Vietnam. In May 2014, our subsidiary, MOL Thailand acquired 60% of Easy2Pay, a mobile carrier billing platform that currently operates in Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Singapore. In September 2014, we acquired 51% of PayByMe, a mobile carrier billing platform that currently operates in Turkey, Saudi Arabia, UAE, Kuwait, Qatar, Oman, Jordan, Lebanon, Iraq, Bahrain, Egypt and Azerbajian. We expect to continue to evaluate potential strategic acquisitions of businesses or products with the intention to expand our user and revenue base, widen our geographic coverage and increase our product range. Whether we realize the anticipated benefits from these transactions depends, to a significant extent, on the integration of the target businesses into our group, the performance and development of the underlying services or technologies, our correct assessment of assumed liabilities and the management of the relevant operations. We may not be able to successfully integrate any newly acquired businesses or products and the integration may divert our management’s focus from our core business and result in disruption to our normal business operations. We may spend time and resources on such acquisitions that do not ultimately increase our profitability or that cause loss of, or harm to, relationships with employees, customers and users as a result of the integration of new businesses. The diversion of our management’s attention and any difficulties encountered in integration could have a material adverse effect on our ability to manage our business.

We may require additional capital to meet our financial obligations and support business growth, including through acquisitions, and this capital might not be available on acceptable terms or at all.

We intend to continue to make significant investments, including potential acquisitions, to support our business growth and may require additional funds to respond to business challenges, including the need to develop new products or services, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or securities convertible into, or exchangeable for, equity securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares and ADSs. Any debt financing that we secure in the future could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital (including by restricting the ability of our company, or our subsidiaries, to distribute dividends to our shareholders and our company, respectively) and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be materially and adversely affected.

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We had negative working capital positions in the past and may be unable to generate sufficient revenue from operations to pay our operating expenses or execute our business plans.

We had a negative working capital position as at each of December 31, 2012 and 2013. Working capital is defined as current assets minus current liabilities. Our working capital ratio, which is defined as current assets divided by current liabilities, as at December 31, 2012 and 2013 was 78.2% and 62.0%, respectively. Borrowings under our credit facility from MDV are required by applicable accounting guidance to be classified as current liabilities because the facility is a revolving facility. Amounts due to other related parties are classified as current liabilities as of the relevant balance sheet dates because there are no stated repayment terms.

We believe that we have adequate working capital for our present requirements and that our net cash generated from operating activities, together with cash and cash equivalents and funds from financing sources, will provide sufficient funds to satisfy our working capital requirements for the next 12 months. However, if our future cash from operating activities is lower than expected or we fail to obtain additional financing in the future, this would impede our ability to make continued investments, which could adversely affect our results of operations and financial condition.

Our business depends on the volume of MOLPoints used to purchase digital content, primarily game credits, which in turn is dependent on the popularity of the underlying games.

MOLPoints can be used to purchase digital content, including game credits for online games such as those licensed and operated by our games portal, MMOG.asia. For a game to remain popular, game operators must constantly enhance, expand or upgrade the games with new features that players find attractive. Game operators, including MMOG.asia, may not be able to successfully enhance, expand or upgrade current games. Any decrease in the popularity of MMOG.asia’s licensed games and any other games that accept MOLPoints, any breach of game-related security or prolonged server interruption, or any other adverse developments relating to such games, could materially and adversely affect our sales volume and results of operations. For example, MMOG.asia’s business has suffered as a result of the rapid and substantial migration of games players from online games to mobile games. In addition, paying players purchase virtual goods in games because of the perceived value of these goods, which is dependent on the relative ease of securing equivalent goods via non-paid means within the game. The perceived value of these virtual goods can be impacted by an increase in the availability of free or discounted game credits or by various actions that content providers take in the games including offering discounts for virtual goods, giving away virtual goods in promotions or providing easier non-paid means to secure these goods. Our content providers’ management or mismanagement of virtual economies could affect players’ interest in virtual goods and the demand for MOLPoints. Any of the foregoing could adversely affect our business, financial condition and results of operations.

As a result of our rapid growth, we need to implement enhanced compliance processes, procedures and controls with respect to the rules and regulations that apply to our business.

Our business has grown rapidly in recent years and we need to realign our compliance function with the size of our business. In light of the fact that we are a regulated business that processes large volumes of payments and information, we need to implement enhanced processes, procedures and controls in order to provide reasonable assurance that we are operating in compliance with applicable regulatory requirements. In particular, applicable anti-money laundering laws and laws and regulations aimed at preventing terrorist financing contain numerous requirements with respect to the identification of clients, and documentation and reporting of transactions subject to mandatory control and other suspicious transactions to the relevant authorities.

While our administrative systems have developed rapidly, during our earlier history, our practices relating to intellectual property, data privacy and security, and legal compliance may not have been as robust as they are now, and there may be unasserted claims arising from this period that we are not able to anticipate. In addition, our business, including our ability to operate and expand internationally, could be adversely affected if laws or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, features or our privacy policy. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly use the data that our users share with us. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry practices regarding the use or disclosure of data our users choose to share with us, or regarding the manner in which the express or implied consent of users for such use and disclosure is obtained. Such changes may require us to modify our services and features, possibly in a material manner, which could have an adverse effect on our business and results of operations. In the area of information security and data protection, many jurisdictions have passed laws requiring notification to players when there is a security breach for personal data, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us to significant liabilities.

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We are subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, which prohibits U.S. companies and their intermediaries from bribing foreign officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment, and other laws concerning our international operations. Similar legislation in other jurisdictions contains similar prohibitions, although varying in both scope and jurisdiction. We do not have a fully developed FCPA compliance program and will need to implement such a program, including measures that require our merchants to comply with the FCPA.

We have neither an established operating history nor proven management experience in establishing and maintaining, over the long term, the required compliance processes, procedures and controls. Our business involves handling large and growing payment volumes and consumer funds, and our success is dependent on public confidence in our ability to do so as well as our compliance with applicable regulatory requirements. Any failure to manage consumer funds or to comply with applicable regulatory requirements could result in the imposition of fines, harm our reputation and significantly diminish use of our products.

Our business is exposed to counterparty and credit risks.

Under the terms of our service contracts with merchants, we are deemed to have received funds for the purposes of triggering our contractual obligation to transfer funds to a merchant at the time a consumer pays for its purchase using MOLPoints. Where a consumer has paid for the transaction using MOLPoints, even if we have not received any funds from the relevant sale of MOLPoints from the relevant distribution channel, we will be under a contractual obligation to transfer money to the merchant. Furthermore, when an online merchant uses MOLPay to process payment, MOLPay Sdn. Bhd. is technically the “acquirer” for regulatory purposes, which may subject us to liability.

In addition, we are subject to the credit risk of merchants being unable to satisfy obligations for which we also may be liable. For example, we may be liable for transactions that are disputed by customers and charged back to the merchant. If we have already paid the merchant but are unable to collect this charged back amount from the merchant, due to the merchant’s insolvency, bankruptcy or other reasons, we may bear the loss for the amount of the refund paid to the consumer. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Our agreements with third parties may be legally unenforceable if they are found to infringe applicable competition laws.

Our agreements with third parties, or certain provisions of such agreements, may be found to be unenforceable if they are found to infringe the competition laws of jurisdictions in which we operate. For example, we have entered into agreements in Malaysia and Turkey with third parties, including distribution partners, content providers and telecommunications service providers that, among other things, include or may in the future include provisions that grant exclusivity privileges to, impose territorial restrictions on, and/or involve resale price maintenance by, one or more parties.

Under the Malaysian Competition Act of 2010, or the MCA, such provisions may be considered to be anti-competitive if they are found to significantly prevent, restrict or distort competition in any market for goods or services. For purposes of the MCA, an anti-competitive agreement will not be deemed significant if (i) the parties to the agreement are competitors and their combined market share is less than 20% of the relevant market; or (ii) the parties to the agreement are not competitors and their individual market share in any relevant market is not more than 25%. The MCA also prohibits enterprises from engaging in any conduct which amounts to an abuse of a dominant position in any market for goods or services. Generally, for purposes of the MCA, market share above 60% would be indicative (but not conclusive evidence) that an enterprise is dominant. If we are seen to be in a dominant position in the market, the provisions on exclusivity, territorial restrictions and/or resale price maintenance could potentially be seen to be an abuse of such dominant position. Some of our businesses may be regulated by the Malaysian Communications and Multimedia Act of 1998, or the CMA, in which case the competition-related provisions under the CMA (instead of the MCA) will apply to such businesses. The CMA prohibits a licensee from engaging in any conduct which has the purpose of substantially lessening competition in a communications market, or entering into any understanding, agreement or arrangement which provides for (i) rate fixing; (ii) market sharing (iii) boycotting of a supplier of apparatus; or (iv) boycotting of another competitor. Under Turkish competition rules, where there is an agreement involving an exclusive supply obligation, if the market shares of the parties to the agreement are below 40% in their own market of activity, then a safe harbor, or block exemption, is available, but otherwise a facts and circumstances analysis must be undertaken in order to determine whether an exemption must be sought from the Turkish Competition Board, or TCB. The TCB is the only decision making authority that can grant such exemptions. Similar rules apply for agreements involving territorial restrictions and non-compete obligations. Violation of such Turkish competition rules can result in fines of up to 10% of annual gross revenues.

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However, because limited guidance, decisions and guidelines are available with respect to determination of the relevant market or the market shares for the industries in which we operate, it is unclear whether our agreements with third parties will be found to infringe applicable competition laws. If any such agreement is found to infringe such laws, the authorities may (i) require that the infringement be ceased immediately; (ii) specify steps which are required to be taken by the infringing enterprise(s) to bring the infringement to an end; (iii) impose financial penalties which could, for example, be 10% of the worldwide turnover of the relevant enterprise over the period during which an infringement occurred; or (iv) take any number of other actions, including imposing sanctions and penalties, as they deem appropriate.

There can be no assurance that our agreements will not be found to be unenforceable or to infringe relevant laws and regulations. Any such finding may have a material adverse effect on our business, prospects, financial condition and results of operations.

Our business is highly dependent on relationships with telecommunications service providers and banks and we derive a portion of our revenue from aggregators and intermediaries.

Our top five telecommunications service providers account for a significant amount of MOLReloads’ revenue. If our relationship with any of these telecommunications service providers was impaired, or if our revenue sharing arrangements were to become less favorable to us, our business would be adversely impacted. For example, in response to increased volume in 2012, telecommunications service providers in Malaysia imposed reduced discounts and commissions on our MOLReloads business. There can be no assurance that our revenue sharing arrangements will not be revised in manner that is unfavorable to us in Malaysia or any other market where we operate. In addition, in Malaysia, Alliance Bank Malaysia Berhad, or Alliance Bank, processes nearly all credit card payments that are made through MOLPay. If our relationship with Alliance Bank was impaired, or if our fee arrangements with Alliance Bank were to become less favorable to us, our business would be adversely impacted. Furthermore, we work with aggregators and intermediaries to enter into mobile carrier billing arrangements and online banking relationships, and to acquire mobile airtime for distribution through MOLReloads. In such cases, we do not have a direct relationship with the mobile carrier or the bank. Similarly, in terms of MOLPoint’s carrier billing businesses of Easy2Pay in Thailand and PayByMe in Turkey, we are dependent on established telecom companies that represent a significant share of our revenues to work with us in order to enable us to monitise the mobile channel. If any of these aggregators or intermediaries was to choose not to work with us, or if our revenue sharing arrangements with them were to become less favorable to us, our business would be adversely impacted. Any of the foregoing would have an adverse effect on our financial condition and results of operations

We may use open-source software in a manner that could be harmful to our business.

We use open-source software in connection with our technology and services. The original developers of the open-source code provide no warranties on such code. Moreover, some open-source software licenses require users like us who distribute open-source software as part of their software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open-source code on terms unfavorable to us or at no cost. The use of such open-source code may ultimately require us to replace certain code used in our products, pay a royalty to use some open-source code or discontinue certain products. Any of the above requirements could be harmful to our business, financial condition and results of operations.

We may not be able to successfully protect our intellectual property and may be subject to infringement claims.

We rely on a combination of contractual rights, copyright, trademark and trade secret laws to establish and protect our proprietary technology. We also maintain patents for certain of our technologies. We customarily require our employees and independent contractors to execute confidentiality agreements or otherwise to agree to keep our proprietary information confidential when their relationship with us begins. Typically, our employment contracts also include clauses requiring our employees to assign to us all of the inventions and intellectual property rights they develop in the course of their employment and to agree not to disclose our confidential information. Nevertheless, others, including our competitors, may independently develop similar technology, duplicate our services or design around our intellectual property. Furthermore, contractual arrangements may not prevent unauthorized disclosure of our confidential information or ensure an adequate remedy in the event of any unauthorized disclosure of our confidential information. Because of the limited protection and enforcement of intellectual property rights in certain jurisdictions in which we operate, as well as in certain jurisdictions in which we have started expanding our operations, our intellectual property rights may not be as protected as they may be in more developed markets such as the United States. We may have to litigate to enforce or determine the scope or enforceability of our intellectual property rights (including trade secrets and know-how), which could be expensive, could cause a diversion of resources and may not prove successful. The loss of intellectual property protection could harm our business and ability to compete and could result in costly redesign efforts, discontinuance of certain service offerings or other competitive harm.

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We may also be subject to costly litigation in the event our services or technology are claimed to infringe, misappropriate or otherwise violate a third party’s intellectual property or proprietary rights. Such claims could include patent infringement, copyright infringement, trademark infringement, trade secret misappropriation or breach of licenses. In addition, while we seek to obtain copyright registration certificates for the critical software we develop, our rights to software obtained as works for hire might be potentially challenged by the employees and former employees or developers of such software. We may not be able to successfully defend against such claims, which may result in a limitation on our ability to use the intellectual property subject to these claims and also might require us to redesign affected services, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our services. In such circumstances, if we cannot or do not license the infringed technology on reasonable terms or substitute similar technology from another source, our revenue and earnings could be adversely impacted. Additionally, in recent years, non-practicing entities have been acquiring patents, making claims of patent infringement and attempting to extract settlements from companies in our industry. Even if we believe that such claims are without merit and successfully defend these claims, defending against such claims is time-consuming and expensive and could result in the diversion of the time and attention of our management and employees.

We do not have, and may be unable to obtain, sufficient insurance to insure against certain business risks.

The insurance industry in certain jurisdictions where we operate is not yet fully developed, and many forms of insurance protection common in more developed countries are not yet fully available or are not available on comparable or commercially acceptable terms. We do not currently maintain insurance coverage for business interruption or loss of key management personnel as we have been unable to obtain these on commercially acceptable terms. We do not hold insurance policies to cover for any losses resulting from counterparty and credit risks and fraudulent transactions, nor for losses from cyber-attacks, software failures and data loss. Other than user funds which are required under law to be held in a separate trust account, we also do not generally maintain separate funds or otherwise set aside reserves for most types of business-related risks. Accordingly, our lack of insurance coverage or reserves with respect to business-related risks may expose us to substantial losses, which could materially adversely affect our business, financial condition and results of operations.

The successful operation of our business depends upon the performance and reliability of the internet infrastructure and telecommunications networks in the countries where we operate.

Our business depends on the performance and reliability of the internet infrastructure in the countries where we operate. We may not have access to alternative networks in the event of disruptions or failures of, or other problems with, the relevant internet infrastructure. In addition, the internet infrastructure, especially in the emerging markets where we operate, may not support the demands associated with continued growth in internet usage.

We also rely on major telecommunication operators in the countries where we operate to provide us with data communications capacity primarily through local telecommunications lines and internet data centers to host our servers. We may not have access to alternative services in the event of disruptions or failures of, or other problems with, the fixed telecommunications networks of these telecommunications operators, or if such operators otherwise fail to provide such services. Any unscheduled service interruption could disrupt our operations, damage our reputation and result in a decrease in our revenues. For example, in Vietnam in December 2013, piping used by our internet service provider experienced an outage and as a result our business in Vietnam was adversely affected for a two-week period. Furthermore, we have no control over the costs of the services provided by the telecommunications operators we use. If the prices that we pay for telecommunications and internet services rise significantly, our gross margins could be significantly reduced. In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may cause our revenues to decline.

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Fluctuations in foreign currency exchange rates will affect our financial results, which we report in Malaysian Ringgit.

As we have continued to expand our international operations, we have become more exposed to the effects of fluctuations in currency exchange rates. In addition to our operations in Malaysia from which we earn revenue denominated in Malaysian Ringgit, we also earn revenue denominated in Baht, Turkish Lira, Philippine Pesos and U.S. dollars, among other currencies. In 2015, 66.5% of our revenue was earned in currencies other than Malaysian Ringgit. We incur expenses for employee compensation and other operating expenses in the local currencies in the markets in which we operate. Fluctuations in the exchange rates between the Malaysian Ringgit and those other currencies could result in the Malaysian Ringgit equivalent of such expenses being higher and/or the Malaysian Ringgit equivalent of such foreign currency-denominated revenue being lower than would be the case if exchange rates were stable. There can be no assurance that movements in foreign currency exchange rates will not have a material adverse effect on our results of operations in future periods. We do not generally enter into hedging contracts to limit our exposure to fluctuations in the value of the Malaysian Ringgit, or any other currency. Furthermore, the substantial majority of our revenue is denominated in emerging markets currencies, including Malaysian Ringgit. In recent months, foreign currency exchange rates for emerging markets currencies have experienced substantial volatility. For example, in 2015 the exchange rate of U.S. dollars and Malaysian Ringgit varied from a high of 4.4560 to a low of 3.5150. Because fluctuations in the value of Malaysian Ringgit and other emerging markets currencies are not necessarily correlated, there can be no assurance that our results of operations will not be adversely affected by such volatility.

Our major shareholder will have the ability to significantly influence the outcome of shareholder actions in our company.

Our major shareholder and his family members directly and indirectly hold 53.1% of our ordinary shares and voting power. Our major shareholder has advised us that he does not anticipate further disposing of his voting control in us in the near future. Our major shareholder’s voting power gives him the ability to significantly influence actions that require shareholder approval under Cayman Islands law, our memorandum and articles of association and NASDAQ requirements, including the election and removal of a majority of our board of directors, significant mergers and acquisitions and other business combinations, changes to our memorandum and articles of association, the number of shares available for issuance under share incentive plans, and the issuance of significant amounts of our ordinary shares in private placements.

Our major shareholder’s voting control may cause transactions to occur that might not be beneficial to you as a holder of ADSs, and may prevent transactions that would be beneficial to you. For example, our major shareholder’s voting control may prevent a transaction involving a change of control of us, including transactions in which you as a holder of the ADSs might otherwise receive a premium for your securities over the then-current market price. In addition, our major shareholder is not prohibited from selling a controlling interest in us to a third party and may do so without your approval and without providing for a purchase of your ADSs.

We are subject to economic risk and business cycles of our merchants and the overall level of consumer spending.

Our business depends heavily on the overall level of consumer spending, particularly in our primary markets in Southeast Asia and other emerging markets. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. A reduction in the amount of consumer spending could result in a decrease in our revenue and profits. If our merchants make fewer sales of their products and services using our services or consumers spend less money per transaction, we will have fewer transactions to process at lower amounts, resulting in lower revenue. A weakening in the economies in which we operate could have a negative impact on our merchants, as well as consumers who purchase products and services using our payment processing systems, which could, in turn, negatively impact our business, financial condition and results of operations. In addition, a weakening in such economies could force some of our merchants to close or go bankrupt or insolvent, or could cause our merchants to reduce the number of their locations or hours of operation, resulting in future transaction declines. We also have a certain amount of fixed costs, including salaries and rent, which could limit our ability to adjust costs and respond quickly to changes in our business and the economies in which we operate. Changes in economic conditions could adversely impact our future revenues and profits and cause a material adverse effect on our business, financial condition and results of operations.

Our results of operations may fluctuate or otherwise be materially and adversely affected due to seasonal variations.

Our sales have historically been higher during festive periods, as our business tends to benefit from consumers’ increased leisure time. Such periods include Chinese New Year, which generally occurs in January or February, Ramadan, which occurred in the third quarter in each of 2013 and 2014 and the second and third quarters in 2015, and the December holiday season.

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We rely on various financial institutions to provide clearing and settlement services in connection with our online payment services.

We rely on various financial institutions to provide clearing and settlement services in connection with our online payment services. If such financial institutions stop providing clearing and settlement services or start imposing excessive processing fees, we would need to find other financial institutions to provide these services. In addition, some of these financial institutions have divisions that provide payment options to consumers that could compete with our services. If we are unable to find a replacement financial institution to provide clearing and settlement services on commercially reasonable terms or at all, we may no longer be able to provide our online payment services to certain customers, which could negatively impact our business, financial condition and results of operations. For example, in Malaysia, Alliance Bank processes nearly all credit card payments that are made through MOLPay. If our relationship with Alliance Bank was impaired, or if our fee arrangements with Alliance Bank were to become less favorable to us, our business would be adversely impacted.

From time to time, credit card merchant acquirers and banks increase the organization and processing fees (known as interchange fees or debit network fees) that they charge. We may not be able to pass on all of the increases in interchange fees or debit network fees along to our online merchants, if at all. It is possible that competitive pressures may result in our absorbing a portion of such increases in the future, which would increase our operating costs and reduce our profit margin. Furthermore, we rely on Visa and MasterCard to process most of our credit card transactions and we may be subject to penalties if we do not comply with their rules and procedures, or applicable laws and regulations. Any of the foregoing could adversely affect our reputation, business, financial condition and results of operations.

If we cannot pass increases from payment networks including interchange, assessment, transaction and other fees, and distribution costs, along to online merchants, our operating margins will be reduced.

We pay interchange and other fees set by payment networks to card-issuing financial institutions and payment networks for each transaction we process. From time to time, payment networks increase such fees. At their sole discretion, our financial institution sponsors have the right to pass any increases in interchange and other fees on to us and they have consistently done so in the past. We are generally permitted under the contracts into which we enter, and in the past we have been able to, pass these fee increases along to our online merchants through corresponding increases in our processing fees. However, if we are unable to pass on these and other fees, and distribution costs, in the future, it could have a material adverse effect on our business, financial condition and results of operations.

Any natural or other disasters, including outbreaks of health epidemics, and other extraordinary events could severely disrupt our business operations.

Our operations are vulnerable to interruption and damage from natural and other types of disasters, including earthquakes, fire, floods, environmental accidents, power loss, communication failures and similar events. If any natural disaster or other extraordinary events were to occur in the area where we operate, our ability to operate our business could be seriously impaired. Our business could be materially and adversely affected by any outbreak of H7N9 bird flu, H1N1 swine influenza, avian influenza, severe acute respiratory syndrome, or SARS, or another epidemic. Any prolonged occurrence of swine influenza, avian influenza, SARS or other adverse public health developments in Southeast Asia could severely disrupt our business operations and adversely affect our results of operations.

Risks Related to Doing Business in Malaysia and Other Countries Where We Operate

Developments in the social, political, regulatory and economic environment in Malaysia may have a material adverse impact on us.

Our business, prospects, financial condition and results of operations may be adversely affected by social, political, regulatory and economic developments in Malaysia. Such political and economic uncertainties include, but are not limited to, the risks of war, terrorism, nationalism, nullification of contract, changes in interest rates, imposition of capital controls and methods of taxation. Furthermore, our business is substantially affected by regulation. For example, it is possible that regulations governing telecommunications service providers may limit customers’ usage, which would effectively limit the potential size of our mobile carrier billing business. Similarly, regulations could be enacted that effectively control and standardize the digital payments industry or prevent subscribers from being charged for third party transactions on their mobile phone statement.

Negative developments in Malaysia’s socio-political environment may adversely affect our business, financial condition, results of operations and prospects. The Malaysian economy registered growth of 5.0% in 2015 (6.0% in 2014), according to the Department of Statistics Malaysia. Although the overall Malaysian economic environment (in which we predominantly operate) appears to be positive, there can be no assurance that this will continue to prevail in the future.

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Economic, market and political developments in the countries where we operate could have a material and adverse effect on our business.

The economic, market and political conditions in other countries, particularly emerging market conditions in Southeast Asia, Turkey and Brazil, could have an influence on our business. Any widespread global financial instability or a significant loss of investor confidence in emerging market economies may materially and adversely affect our business, financial condition, results of operations, prospects or reputation.

Examples of such external factors or conditions that are outside our control include, but are not limited to the following:

• general economic, political and social conditions in Southeast Asian countries and other key foreign markets;

• consumer spending patterns in our key markets;

• currency and interest rate fluctuations;

• international events and circumstances such as wars, terrorist attacks, natural disasters and political instability; and

• changes in legal regimes and governmental regulations, such as licensing and approvals, taxation, duties and tariffs, in key markets and abroad.

The global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and the global economy has continued to face new challenges. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies that have been adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States. For example, in 2013, the Federal Reserve Bank in the United States announced the tapering of its bond-buying program which led to a high degree of volatility in equity markets and substantial devaluations in the currencies of many emerging economies, including markets where we operate. There have also been concerns over unrest in the Middle East and Africa and over the possibility of international hostilities over Ukraine, which have resulted in volatility in oil prices and other markets. Recently there have been concerns over instability in Thailand due to significant anti-government protests which have been ongoing since 2013 and have resulted in the imposition of martial law and a change in government. There have also been a number of major anti-government protests in Turkey in late 2013, 2014 and 2015. Terrorism has become more prominent in Turkey, Thailand and Indonesia in 2015 with potential threats of terrorism in other regional markets. Economic conditions in the countries where we operate are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in emerging markets.

The Malaysian Ringgit is subject to exchange rate fluctuations.

BNM has, in the past, intervened in the foreign exchange market to stabilize the Malaysian Ringgit, and instituted a fixed exchange rate of MYR3.80 to $1.00 on September 2, 1998. Subsequently, on July 21, 2005, BNM adopted a managed float system which benchmarked the Malaysian Ringgit to a currency basket to ensure that the Malaysian Ringgit remains close to its fair value. As of December 31, 2015, the closing exchange rate was MYR4.2900 to $1.00 and as of April 22, 2016, the closing exchange rate was MYR3.8960 to $1.00. However, there can be no assurance that BNM will, or would be able to, intervene in the foreign exchange market in the future or that any such intervention or fixed exchange rate would be effective in achieving BNM’s objectives. Fluctuations in the Malaysian Ringgit’s value against other currencies will create foreign currency translation gains or losses and may have an adverse effect on our business, financial condition and results of operations.

We are subject to communication and multimedia regulations.

Our business depends on the performance and availability of our online platforms and services which are governed in Malaysia by various multimedia and communication regulations, guidelines, ministerial directions and other standards arising from the CMA, and the Malaysian Communications and Multimedia Commission. MOL AccessPortal has registered for, and obtained, an applications service provider, or ASP, class license to provide messaging services. The ASP class license requires annual renewal and the application is currently an administrative one but there can be no assurance that this will remain the case. We cannot guarantee that other services provided by MOL AccessPortal, or our other Malaysian companies, that are currently exempt from licensing requirements or which do not currently require licensing may require licensing in the future. The implementation of new regulations or guidelines could require us to change the way we conduct our online business or the licenses that we require, incur new expenses or retain legal counsel or additional staff to ensure compliance with such regulations. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

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We are subject to foreign exchange control policies in Malaysia and other countries where we operate.

The ability of our subsidiaries to pay dividends or make other payments to us may be restricted by the foreign exchange control policies in the countries where we operate.

For example, there are foreign exchange policies in Malaysia which support the monitoring of capital flows into and out of the country in order to preserve its financial and economic stability. The foreign exchange policies are administered by the Foreign Exchange Administration, an arm of BNM. The foreign exchange policies monitor and regulate both residents and non-residents. Under the current Foreign Exchange Administration rules issued by BNM, non-residents are free to repatriate any amount of funds from Malaysia in foreign currency other than the currency of Israel at any time (subject to limited exceptions), including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment in Malaysia, subject to any withholding tax. In the event BNM or any other country where we operate introduces any restrictions in the future, we may be affected in our ability to repatriate dividends or other payments from our subsidiaries in Malaysia or in such other countries. Since we are a holding company and rely principally on dividends and other payments from our subsidiaries for our cash requirements, any restrictions on such dividends or other payments could materially and adversely affect our liquidity, financial condition and results of operations.

The exchange control law in Thailand provides that the outward remittance from Thailand of dividends or the proceeds of sale (including capital gain) from the transfer of shares after payment of the applicable Thai taxes, if any, may be made without the requirement to file a specified form to the relevant financial institution if the amount is less than $50,000 or the equivalent amount in relevant currency per remittance, provided that required documents and evidence of the particular transaction have been duly submitted to the relevant financial institution. Because the Bank of Thailand has a policy to not allow any person to bring Baht out of Thailand, with certain exemptions, dividends paid to a non-resident must be converted into foreign currency prior to the outward remittance from Thailand. If the amount is at least $50,000 or its equivalent in the relevant currency, a specified form must be submitted to the relevant financial institution together with required documents or evidence of the particular transaction.

Turkey does not have foreign exchange control restrictions. Pursuant to Decree N.32 on Protection of Turkish Currency, importation of foreign currency to Turkey is free and residents in Turkey are allowed to accept payment in foreign currency from non-residents for the transactions that they conduct in Turkey in favor of such non-residents. Residents in Turkey and non-residents may freely transfer foreign currency abroad provided that they use banks as intermediaries and relevant reporting requirements are complied with. The Turkish Ministry of Finance is authorized to determine other establishments that are allowed to transfer foreign currency abroad. Our presence in Northern Cyprus, which is not an internationally recognized state, may place us at a disadvantage in transferring funds out of the country and where Turkey is used as intermediary, additional taxes may be levied.

Furthermore, dividends from certain subsidiaries, including our subsidiaries in Thailand, Turkey and the Philippines, may be subject to local withholding tax.

Risks Related to the ADSs

The trading prices of the ADSs have been and are likely to continue to be volatile, which could result in substantial losses to investors.

The trading prices of the ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance or deteriorating financial results of other similarly situated companies that have listed their securities in the United States in recent years. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of these companies’ securities after their offerings, including companies in the internet, online payment and online and mobile gaming industries, may affect the attitudes of investors toward such companies listed in the United States, which consequently may impact the trading performance of the ADSs, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting or other practices at other Malaysian or Southeast Asian companies may also negatively affect the attitudes of investors towards Malaysian or Southeast Asian companies in general, including us, regardless of whether we have engaged in such practices. In addition, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, such as the large decline in share prices in the United States and other jurisdictions in late 2008, early 2009, the third quarter of 2011 and the second quarter of 2012, which may have a material adverse effect on the market price of the ADSs.

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In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following:

• variations in our revenue, earnings and cash flow;

• announcements of new investments, acquisitions, strategic partnerships, or joint ventures;

• announcements of new services and expansions by us or our competitors;

• changes in financial estimates by securities analysts;

• changes in the number of our users;

• fluctuations in our operating metrics;

• failure on our part to realize monetization opportunities as expected;

• additions or departures of key personnel;

• release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

• detrimental negative publicity about us, our competitors or our industry;

• regulatory developments affecting us or our industry; and

• potential litigation or regulatory investigations.

Any of these factors may result in large and sudden changes in the volume and price at which the ADSs will trade.

In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company’s securities. We are involved in class action suits, which could divert a significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. See “Risk Factors – Class action litigation may expose us to significant liabilities, result in negative publicity and have a material adverse effect on our reputation, business, financial condition, results of operations and prices of our ADSs.” Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

We are an emerging growth company within the meaning of the Securities Act and have taken, and expect to continue to take, advantage of certain reduced reporting requirements.

We are an “emerging growth company,” as defined in the JOBS Act, and we take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 for so long as we are an emerging growth company. We will remain an emerging growth company until the earliest of (a) the last day of our fiscal year during which we have total annual gross revenues of at least $1.0 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of our initial public offering; (c) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.

Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

• the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

• the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

• the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

• the selective disclosure rules by issuers of material non-public information under Regulation FD.

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We are currently required to file an annual report on Form 20-F within four months of the end of each fiscal year. However, on April 13, 2016 we announced our intention to allow the ADSs to be delisted from the NASDAQ and to voluntarily effect deregistration, and suspend our reporting obligations, under the Exchange Act. Following such deregistration we would no longer be required to file an annual report on Form 20-F.

The ADSs are expected to be delisted from NASDAQ and we plan to voluntarily effect deregistration under the Exchange Act.

On October 5, 2015, we received a non-compliance letter from NASDAQ notifying the Company that it no longer met the minimum bid price of $1.00 per ADS required for continued listing on NASDAQ. We were initially granted the opportunity to submit a plan to cure the deficiency and regain compliance by April 4, 2016 (the “first compliance period”). Subsequent to the first compliance period, we received another letter from NASDAQ dated April 7, 2016 giving us additional time to consider making an application before April 14, 2016 to apply for a second compliance period to regain compliance. However, we, having considered all available options, and suspend our reporting obligations, decided that it would not submit such a plan and would instead allow the ADSs to be delisted from NASDAQ and seek to deregister our ADSs under the Exchange Act. Trading of the ADSs on NASDAQ has been suspended since April 18, 2016. NASDAQ is expected to file a Form 25, Notification of Removal from Listing and/or Registration under Section 12(b) of the Exchange Act with the SEC in connection with the official delisting of the ADSs and the official delisting of the ADSs will become effective approximately 10 days thereafter.

At least ten days after the effective date of the delisting, we expect to be eligible to file Form 15 with the SEC to deregister under Section 12(g) of the Exchange Act and suspend our reporting obligations pursuant to Section 15(d) of the Exchange Act, provided we have fewer than 300 holders of record (as such term is used in the Exchange Act) at the time of such filing. Based on information provided by the ADS depositary and our corporate records, as of April 13, 2016 we had fewer than 300 holders of record. To the extent we continue to have fewer than 300 holders of record on a date that is at least ten days after the effective date of the delisting, we intend to file Form 15 with the SEC. Upon the filing of Form 15 our reporting obligations under the Exchange Act will be suspended with immediate effect and we do not intend to submit annual reports on Form 20-F, nor interim reports on Form 6-K, to the SEC thereafter. Ninety days after the filing of Form 15 we will no longer be subject to the requirements of the Exchange Act so long as we continue to have fewer than 300 holders of record.

On April 22, 2016, we announced that the ADSs are quoted under the ticker “MOLGY” on the OTC Pink marketplace. While we are considering having the ADSs quoted on a higher tier marketplace, such as the OTCQX or OTCQB, subject to approval from the relevant authorities, there can be no assurance that the ADSs will in fact be quoted on such a marketplace.

Following our deregistration, the scope of public information regarding our business, financial condition and results of operations may be significantly reduced and you may not have the benefit of the corporate governance and other requirements with which are currently required to comply under the Exchange Act.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.

The trading market for the ADSs will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade the ADSs, the market price for the ADSs would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the ADSs to decline.

The sale or availability for sale, or perceived sale or availability for sale, of substantial amounts of the ADSs could adversely affect their market price.

Sales of substantial amounts of the ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of the ADSs and could materially impair our ability to raise capital through equity offerings in the future. There were 13,500,000 ADSs (equivalent to 13,500,000 ordinary shares) outstanding as of December 31, 2015, including 2,637,789 ADSs that we repurchased in December 2015 and are held in treasury. The ADSs are freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, and shares held by our existing shareholders may also be sold in the public market subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lock-up agreements. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs.

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You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are registered under Cayman Islands law.

We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Law (2013 Revision) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our existing articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands differ significantly from requirements for companies incorporated in other jurisdictions such as the United States. Currently, we do not plan to rely on home country practice with respect to any corporate governance matter. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or major shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Law of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see “Description of Share Capital—Differences in Corporate Law.”

Judgments obtained against us by our shareholders may not be enforceable in our home jurisdiction.

We are a Cayman Islands company and a substantial majority of our assets are located outside of the United States. A significant percentage of our current operations are conducted in Malaysia and other Southeast Asian countries. In addition, a significant majority of our current directors and officers are nationals and residents of countries other than the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the United States federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Malaysia and other jurisdictions where we operate may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

There are uncertainties as to whether Cayman Islands courts would:

• recognize or enforce against us, judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws; and

• impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. For more information regarding the relevant laws of the Cayman Islands and Malaysia, see “Enforceability of Civil Liabilities.”

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The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to vote your ordinary shares.

As a holder of ADSs, you will only be able to exercise the voting rights with respect to the underlying ordinary shares in accordance with the provisions of the deposit agreement. Under the deposit agreement, you must vote by giving voting instructions to the depositary. Upon receipt of your voting instructions, the depositary will endeavor to vote the underlying ordinary shares in accordance with these instructions. You will not be able to directly exercise your right to vote with respect to the underlying shares unless you withdraw the shares. Under our amended and restated memorandum and articles of association which is currently in effect, the minimum notice period required for convening a general meeting is 7 days. When a general meeting is convened, you may not receive sufficient advance notice to withdraw the shares underlying your ADSs to allow you to vote with respect to any specific matter. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary and its merchants are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to vote and you may have no legal remedy if the shares underlying your ADSs are not voted as you requested.

The depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs if you do not give voting instructions, except in limited circumstances, which could adversely affect your interests.

Under the deposit agreement for the ADSs, if we timely ask for voting instructions but the depositary does not receive your instructions by the date it sets, the depositary will give us a discretionary proxy to vote our ordinary shares underlying your ADSs at shareholders’ meetings unless:

• we have failed to timely provide the depositary with notice of meeting and related voting materials;

• we have instructed the depositary that we do not wish a discretionary proxy to be given;

• we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; or

• a matter to be voted on at the meeting would have a material adverse impact on shareholders.

The effect of this discretionary proxy is that if you do not give voting instructions, you cannot prevent our ordinary shares underlying your ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.

Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment.

We do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs.

You may not receive dividends or other distributions on our ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.

To the extent that we decide to pay a dividend or make other distributions in the future, the depositary has agreed to pay to you such cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act but that are not properly registered or distributed under an applicable exemption from registration. The depositary may also determine that it is not feasible to distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of the ADSs.

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You may not be able to participate in rights offerings and may experience dilution of your holdings.

We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

You may be subject to limitations on transfer of your ADSs.

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays in the United States. The depositary may refuse to deliver, transfer or register the transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary think that it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement. As a result, you may be unable to transfer your ADSs when you wish to.

We incur various costs as a result of being a public company and these costs will increase after we cease to qualify as an emerging growth company.

We have recently become a public company and expect to continue to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the Securities and Exchange Commission, or the SEC, and NASDAQ, impose various requirements on the corporate governance practices of public companies. As a company with less than $1.0 billion in revenues for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting.

We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming a public company, we were required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. Also, as a result of operating as a public company it is generally more difficult and more expensive for us to obtain director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers in the future. We cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

We may be a passive foreign investment company for United States federal income tax purposes, which could result in adverse United States federal income tax consequences to United States investors in the ADSs or ordinary shares.

Our status as a passive foreign investment company, or PFIC, for any taxable year will depend on the composition of our income and assets and upon the value of our assets, which may be determined based, in part, on the market price of the ADSs and the nature of our assets and income over time. Based on our current and expected income and asset composition and projections as to the value of our assets, which are based on the market price of our ADSs, we do not expect to be a PFIC for the current taxable year or in the foreseeable future. While we do not anticipate becoming a PFIC, fluctuations in the market price of the ADSs (which may be volatile) may cause us to become a PFIC for the current or subsequent taxable years. Because of the uncertainties in the application of the relevant rules and because PFIC status is a factual determination made annually after the close of each taxable year on the basis of the composition of our income and the value of our active versus passive assets for that year, there can be no assurance that we will not be a PFIC for the current or any future taxable year. The overall level of our passive assets will be affected by how, and how quickly, we spend our liquid assets. Under circumstances where gross income from activities that produce passive income significantly increase relative to our gross income from activities that produce non-passive income or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially increase.

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If we were to be or become a PFIC, a U.S. Holder (as defined in “Taxation—United States Federal Income Tax Considerations—General”) may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the ADSs or ordinary shares and on the receipt of distributions on the ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess distribution” under the United States federal income tax rules. Further, if we are a PFIC for any year during which a U.S. Holder holds the ADSs or ordinary shares, we generally will continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which such U.S. Holder holds the ADSs or our ordinary shares. You are urged to consult your tax advisor concerning the United States federal income tax considerations relating to holding and disposing of ADSs or ordinary shares if we are or become a PFIC. For more information see Item 10.3. “Additional Information – Taxation.”

ITEM 4. Information on the Company

A. History and Development of the Company

MOL Global, Inc. was incorporated in the Cayman Islands on February 20, 2014 by our shareholder, MOL Ventures Pte. Ltd. (previously known as MOL Global Pte. Ltd.), or MOL Ventures, a company incorporated under the laws of Singapore, which is controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan, who is our major shareholder. All of our operations are conducted through MOL AccessPortal Sdn. Bhd., or MOL AccessPortal, a company incorporated under the laws of Malaysia.

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law 2012 (as amended) of the Cayman Islands, referred to as the Companies Law below. Our principal executive offices are located at Lots 07-03 & 08-03, Levels 7 & 8, Berjaya Times Square, No. 1, Jalan Imbi, 55100 Kuala Lumpur, Malaysia. Our telephone number at this address is +(603) 2082-1251. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Law Debenture Corporate Services Inc.

Significant milestones in our development include the following:

2000

• MOL AccessPortal was incorporated in Malaysia under the name of Superior World Sdn. Bhd.

• Entities controlled by Tan Sri Dato’ Seri Vincent Tan invested in MOL AccessPortal acquiring a 60% interest.

2001

• MOLPoints was launched in Malaysia.

2002

• We obtained approval from BNM to operate our MOLPoints micropayments system.

• MOL AccessPortal was converted into a public company, and adopted the name MOL AccessPortal Bhd.

2003

• MOL AccessPortal was listed on the MESDAQ Market of the Malaysian Stock Exchange.

2008

• MOL AccessPortal Bhd. was privatized and delisted from the MESDAQ Market of the Malaysian Stock Exchange.

• We established MOL AccessPortal Pte. Ltd. and launched MOLPoints in Singapore.

• We rolled out MOLReloads at 7-Eleven convenience stores in Malaysia.

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2009

• We established MOL AccessPortal Co., Ltd., or MOL Thailand, which acquired Funloader, an online gaming distribution platform in Thailand, in exchange for a 45.45% interest in MOL Thailand being issued to Pactolus Co. Ltd. and we launched MOLPoints in Thailand.

2010

• We formed a partnership with Facebook, pursuant to which Facebook began to accept MOLPoints as payment for Facebook credits.

• We launched MOLReloads in Thailand.

2011

• We acquired 100% of Uniwiz Trade Sales, Inc., or Uniwiz, which operates LoadCentral, a pre-paid payment platform in the Philippines, and launched MOLPoints in the Philippines.

• We launched MOLPoints in Indonesia.

• We subscribed for additional shares of MOL Thailand to increase our equity interest to 49% and MOL Thailand applied the proceeds to acquire 100% of Zest Interactive Co. Ltd., or Zest, a distributor of online games and games accessories.

• We established MOLPay Sdn. Bhd., which acquired NBePay, an e-commerce payment service, from Netbuilder (M) Sdn. Bhd. in exchange for a 49% interest in MOLPay Sdn. Bhd.

2012

• Malaysian Electronic Clearing Corporation Sdn. Bhd., or MyClear appointed MOLPay Sdn. Bhd. as a third party (non-bank) acquirer for MyClear’s FPX and direct debit services.

• We acquired 65% of Ocash Pty Ltd, a payment service provider specialized in online game credits in Australia and New Zealand, which we renamed MOL AccessPortal Pty Ltd. and launched MOLPoints in Australia and New Zealand.

• We acquired 54.2% of Rixty, Inc., or Rixty, an online payment solution provider based in the United States that has a presence in Brazil, and launched MOLPoints in the United States and Brazil.

• We acquired approximately 80% of MyCNX Holdings (M) Sdn. Bhd., which operates MMOG.asia, our online games portal which, at the time of the acquisition, operated localized games portals for Malaysia and Thailand.

2013

• We acquired 70% of MOL Turkey Bilgi Sistemleri Yayincilik Gida ve Tekstil Sanayi Ticaret Anonim Sirketi, or PaytoGo, a mobile payment service provider, and 70% of Sihirli Kule Bilgi Sistemleri Ltd., or Game Sultan, a micropayment system, each of which serves the Turkish markets.

• We acquired AyoPay, an Indonesian payment service provider that specializes in online distribution of game credits.

• We acquired 50% of Nganluong Joint Stock Company, or Nganluong, which provides online payment services and launched MOLPoints in Vietnam.

• We launched our localized portal for MMOG.asia in Indonesia.

2014

• His Royal Highness Sultan Ibrahim of the State of Johor acquired a 15% interest in MOL AccessPortal from MOL Ventures for $120 million (MYR385.1 million).

• We signed an agreement with InComm APAC Pte. Ltd., or InComm, to roll out point-of-sale-activated, or POS-activated, cards in Malaysia.

• We acquired a 51% equity interest in the Turkish company that operates PayByMe, a mobile carrier billing platform that currently operates in Turkey, Saudi Arabia, UAE, Kuwait, Qatar, Oman, Jordan, Lebanon, Iraq, Bahrain, Egypt and Azerbajian.

• MOL Thailand acquired 60% of Easy2Pay a mobile carrier billing platform that operates in Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Singapore.

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• We acquired an indirect 37.73% interest in MOL Thailand, increasing our equity interest to an effective 86.73%.

• We acquired the remaining 30% of each of Game Sultan and PaytoGo, and 20% of MyCNX, increasing our equity interest in each of these companies to 100%.

• We completed our initial public offering and listing of ADSs on the NASDAQ Global Market.

• We launched MOLPay in Indonesia.

2015

• MOL Thailand entered into a partnership with DTAC, a leading telecom provider in Thailand to enable Happy Cash Card, a mobile prepaid card.

• Expanded carrier billing business in Malaysia, Indonesia, Singapore and the Philippines by offering our Easy2Pay payment services.

• MOLReloads successfully rolled out bill payment services for the largest water utility company and the largest Pay TV Service provider in Malaysia.

• Regulatory approvals from the Central Bank of Malaysia for our merchant acquiring services to be launched in 2016

• MOL Thailand entered into a partnership agreement with 7-Eleven Thailand to distribute MOLPoints in over 8,000 7-Eleven stores across the country.

• MOLPay entered into a definitive cooperation agreement with one of China’s largest handset manufacturer in Malaysia.

Capital Expenditures

For a description of our capital expenditures, please refer to Item 5.B. “Operating and Financial Review and Prospects – Liquidity and Capital Resources – Capital Expenditures”.

B. Business Overview

We operate a payments platform that facilitates online and mobile commerce for consumers in emerging and other markets by providing a vast network of payment channels that accept payment using cash and online methods. Our physical distribution network comprises more than 970,000 physical locations in 11 countries across four continents where we maintain a local presence as of December 31, 2015 and physical locations in other countries where we have relationships with aggregators that distribute our products through channels with which they have relationships. We also have mobile and electronic distribution channels that accept major credit cards and online banking from more than 100 banks globally as of December 31, 2015. Our primary product is our MOLPoints micropayment system, which sells payment credits that can be used by consumers to purchase online game credits and other digital content, including Facebook Game Cards. We also operate MOLReloads, a distribution network that distributes prepaid mobile airtime and digital content; MOLPay, a payments solution for online merchants; and MMOG.asia, an online games portal. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. .Our products provide various opportunities to acquire and retain customers and their payment credentials, which present cross-selling opportunities for our existing and future solutions. Our user base consists of both registered and unregistered users.

MOLPoints can be used to purchase credits that can be used in thousands of online games and other digital content, from over 800 content providers as of December 31, 2015. We operate in markets that are largely cash-based and offer consumers the opportunity to purchase MOLPoints in cash through our physical distribution network, which comprises chain operators such as 7-Eleven, individual retailers such as cybercafés, and aggregators such as e-pay. Our physical distribution network for MOLPoints includes our MOLReloads distribution network in Malaysia, the Philippines and Thailand. In addition, MOLPoints are available for purchase using credit cards, through online banking and at electronic kiosks in retail locations. We currently operate local websites for MOLPoints, or equivalent products for local markets, in 11 countries, namely Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan and Vietnam.

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MOLReloads distributes electronic vouchers, or e-vouchers, for pre-paid mobile airtime and digital content including MOLPoints. Consumers can purchase prepaid mobile airtime for most major mobile service providers in Malaysia, the Philippines and Thailand through our MOLReloads distribution network, which comprises chain operators, including more than 1,900 7-Eleven convenience stores as of December 31, 2015, cybercafés and bookstores, and in the Philippines, individual distributors who distribute e-vouchers through mobile phones and personal computers in cybercafés. In 2015, MOLReloads successfully rolled out bill payment services for the largest water utility company in Malaysia.

MOLPay is an integrated payments solution for online merchants, which offers cash, online banking and credit card payment processing options for their consumers. MOLPay is operated in Malaysia and Indonesia by our 51%-owned subsidiary, MOLPay Sdn. Bhd., and in Vietnam by our 50%-owned subsidiary, Nganluong. MOLPay has an agreement with MyClear to serve as a third party (non-bank) acquirer for MyClear’s FPX and direct debt services in Malaysia. In addition to online banking and credit card payment, MOLPay has agreements with various distribution partners for collecting payments at more than 23,000 additional physical cash payment points in Malaysia, Singapore and Indonesia, including at 7-Eleven and other convenience stores, cybercafés and petrol stations, which are in the process of being activated. As of December 31, 2015, consumers could use MOLPay to make purchases from 4,508 online merchants.

MOLWallet is our planned account-based online and mobile payment processing and money transfer system that is designed to effectively replace a physical wallet using a mobile phone. Account holders will be able to pay for digital and physical retail goods and services, pay third party bills, reload pre-paid accounts for mobile airtime and other mobile applications as well as perform peer-to-peer money transfers through a convenient, secure and intuitive online or mobile interface with multiple payment methods. MOLWallet uses technology that was developed by Nganluong Joint Stock Company, or Nganluong, an online payments solutions provider based in Vietnam that we acquired in 2013. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. MMOG.asia is an online games portal that operates licensed games in Southeast Asia, including through localized portals operated in local languages for Malaysia, Thailand and Indonesia. MMOG.asia accepts MOLPoints to purchase game credits for games that it operates. We initially acquired approximately 80% of MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

Our Platform

Our platform connects consumers in emerging markets and other markets with digital content providers, telecommunications service providers and online merchants by providing a vast network of distribution channels that accept cash and online payment methods. Our business is based on three pillars: (i) our distribution network; (ii) the digital content offered by our content providers partners; and (iii) our user community. As of December 31, 2015, we offer our users online game credits and other digital content from more than 800 content providers through MOLPoints; prepaid mobile airtime from most major service providers in Malaysia, Thailand and the Philippines through MOLReloads; and access to e-commerce from over 4,508 online merchants through MOLPay. Our distribution network comprises physical locations that accept cash among other forms of payment, in addition to our mobile and electronic distribution channels, which accept credit cards and online banking. Our platform enables us to broaden our offerings to our users with relative ease. Our user community comprised 7,725,581 MOLPoints registered members as of December 31, 2015, in addition to non-registered users who purchase our products directly.

Our Products

Our primary product is our MOLPoints micropayment system, which sells payment credits that can be used to purchase online game credits and other digital content. We also operate MOLReloads, a distribution network for pre-paid mobile airtime and digital content, including MOLPoints; MOLPay, a payments solution which enables online merchants to collect payment from e-commerce buyers; and MMOG.asia, which operates licensed games. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. We believe our products are highly synergistic and help to accelerate growth across our entire business.

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In recent years, we have evolved our product offering in response to consumers’ increasing use of mobile devices for online activities. We have a mobile website for MOLPoints, which facilitates access to our website for consumers using mobile devices. We have increasingly partnered with merchants to collect payments for mobile content through MOLPoints. We have mobile carrier billing partnerships with more than 24 telecommunications service providers in eight countries, which offer further exposure to mobile consumers who can pay for MOLPoints through the deduction of pre-paid mobile airtime or, with respect to post-paid users, on their monthly statement. For MOLPay, we have a mobile-enabled application program interface, or API, which facilitates payment for m-commerce transactions. MOLWallet, which we plan to launch in Malaysia by the second quarter of 2016, will be our first product that is targeted primarily to mobile consumers, and MMOG.asia plans to launch 12 mobile games in 2016. Our revenue from mobile games has historically not been material.

MOLPoints

Our MOLPoints micropayment system serves as a bridge connecting consumers with content providers, which enables consumers to purchase digital content, including online game credits. Rather than purchasing game credits for use only with a single game or game operator, consumers can purchase and store MOLPoints for use with thousands of games operated by more than 800 content providers as of December 31, 2015. MOLPoints can also be used to purchase other digital content such as Facebook Game Cards, digital music including Spotify, and virus protection software. We are continually adding content providers and digital content to our platform.

The following table sets forth certain data with respect to MOLPoints as of the specified dates and for the specified periods.

	As of and for the year ended December 31,
	2013		2014		2015
Registered Members(1)		4,443,886		6,278,309		7,725,581
Active registered paying users(2)		1,007,344		1,035,233		920,998
Volume(3) (MYR in millions)
Volume from registered consumer members(4)		262.8		286.9		244.4
Consumer direct purchase volume(5)		154.0		260.5		399.3
Direct channel volume(6)		172.5		168.1		148.5
Total volume		589.3		715.6		792.2
Malaysia		214.5		181.3		185.0
Southeast Asia (other than Malaysia)		265.4		360.9		336.8
Turkey(7)		86.6		119.0		198.2
Rest of the world		22.8		54.4		72.2
Total volume		589.3		715.6		792.2
Transactions(8)
Transactions by registered members		11,061,262		10,209,603		7,919,880
Transactions through direct purchase(9)		9,782,267		17,888,346		34,200,891
Total transactions		20,843,529		28,097,949		42,120,771

Notes:

(1) Registered members refers to the number of MOLPoints accounts that have been registered as of the end of a period.

(2) MOLPoints active registered paying users is the number of unique MOLPoints accounts that have been used to purchase or redeem MOLPoints during the preceding twelve month period.

(3) MOLPoints volume is the total retail value of content purchased through redemption of vouchers for games and other digital content provided by content providers using MOLPoints during the period. MOLPoints volume tends to be significantly greater than MOLPoints revenue, which excludes amounts that we pay to digital content providers pursuant to our revenue sharing arrangements.

(4) Volume from registered consumer members refer to the total volume of content purchased through redemptions of MOLPoints in registered MOLPoints accounts during a period.

(5) Direct purchase volume refers to the total volume of content purchased by end-users through redemptions of MOLPoints during a period without creating a registered MOLPoints account.

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(6) Direct channel volume refers to the total volume of content purchased through redemptions of MOLPoints during a period by cybercafés and distributors that redeem MOLPoints for digital content that the cybercafés and distributors sell to end-users.

(7) Prior to our acquisitions of 70% of each of Game Sultan and PaytoGo in 2013, we did not have operations in Turkey.

(8) Transactions refers to the number of unique purchases of MOLPoints, in any volume, during a period.

(9) Transactions through direct purchase includes all transactions that relate to either consumer direct purchase volume or direct channel volume.

Because we operate in markets that are still largely cash-based, we distinguish ourselves by offering consumers a network of more than 970,000 physical distribution locations, most of which accept cash payment for MOLPoints, including chain operators such as 7-Eleven convenience stores, individual retailers such as cybercafés, and aggregators such as e-pay. With relatively low penetration rates of credit cards and online banking in most markets where we operate, physical distribution partners are important means of distribution of MOLPoints. Our physical distribution partners also offer a convenient and accepted payment method for consumers who may be reluctant to use their credit cards online due to security concerns. MOLPoints are also available for purchase using credit cards, through online banking and at electronic kiosks. While the majority of MOLPoints have historically been distributed through physical channels, we expect increasing contribution from electronic and mobile distribution channels as our target markets mature.

MOLPoints was initially launched in Malaysia in 2001 and has grown substantially, particularly through our ongoing relationship with 7-Eleven Malaysia, which is ultimately controlled by our major shareholder. As of December 31, 2015, MOLPoints could be purchased through our MOLReloads distribution network at more than 1,900 7-Eleven convenience stores across Malaysia. We have expanded through acquisition and organic growth. We currently operate localized MOLPoints websites, and mobile websites, for Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan, Vietnam and New Zealand. In countries where we do not operate a local website, MOLPoints can be purchased from our global website at www.mol.com/global. Certain content, such as game credits for localized online games, is available for purchase using only MOLPoints issued in the country or countries where such content is offered. Other content, such as Facebook Game Cards, can be purchased using MOLPoints issued in any country where we operate, or through our global website.

How MOLPoints Works

When a consumer purchases MOLPoints through any of our distribution channels, the consumer can choose to have the MOLPoints credited directly to a registered MOLPoints account or a MOLPoints voucher can be issued to the consumer. A MOLPoints voucher can be credited to a registered MOLPoints account or redeemed for content directly at a content provider’s website. While the substantial majority of MOLPoints vouchers are distributed as e-vouchers through our electronic platform, certain of our physical distribution partners in Malaysia and Singapore distribute MOLPoints vouchers in the form of physical cards.

• Registered Consumer Accounts. A consumer becomes our registered member by creating a registered MOLPoints account for free and quickly on our website using a valid email address. MOLPoints can be credited to a registered MOLPoints account either by entering the relevant account details at the point of purchase or by entering a MOLPoints voucher into the MOLPoints account on our website. All MOLPoints associated with a given MOLPoints voucher must be credited to a single account. Consumers can pay with MOLPoints from their account when purchasing game credits or other content on our website. For example, if a consumer purchases online game credits using MOLPoints on our website, we either issue a game voucher that consumer can redeem for game credits at the game’s website or if the merchant is integrated with our website, the MOLPoints can be deducted from the user’s MOLPoints account and credited automatically at the relevant game site. As of December 31, 2015, we had 7,725,581 registered members, of which 1,795,669 were consumers in Malaysia.

• Consumer Direct Purchase. We also offer consumers a direct purchase feature that is available for approximately half of the games for which game credits are available for purchase using MOLPoints. Direct purchase enables consumers to redeem a MOLPoints voucher for content directly from a content provider at its website. For example, a consumer may purchase online game credits using a MOLPoints voucher at the game’s website, with no need to first redeem a MOLPoints voucher to purchase a game voucher at our website. Our integrated application programming interface, or API, enables the content provider to verify the authenticity of the MOLPoints voucher during the purchase process.

• Direct Channel Volume. Cybercafés and distributors may purchase MOLPoints vouchers from us through direct purchase. The cybercafé or distributor then redeems the MOLPoints voucher for digital content directly from a content provider’s website and sells the digital content to consumers. In such cases our customer is the cybercafé or distributor and we do not have a relationship with the consumer.

The permitted use and distribution format of MOLPoints may differ from one country to another, depending on the regulatory restrictions that may apply to the local operations. Similarly, the contractual arrangements between us and content providers may differ from one country to another.

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MOLPoints are unique to each country where we accept local currency, namely Malaysia, Thailand, the Philippines, Singapore, Indonesia, India, the United States, Australia, Brazil, Taiwan, Vietnam and New Zealand. Similarly, Game Sultan, accepts Turkish Lira for G-Cash, a product that is substantially similar to MOLPoints and is included in references to “MOLPoints” throughout this annual report. MOLPoints are fungible with MOLPoints issued in the same country but are not fungible with MOLPoints issued in other countries. MOLPoints purchased through www.mol.com/global are not fungible with any other MOLPoints from any country where we maintain a local presence. Certain content that can be purchased with MOLPoints, such as music streaming and Facebook Game Cards, is available to consumers in multiple countries. Because consumers in different countries may pay for such content using MOLPoints that are not fungible, we use foreign currency exchange rates to determine the cost of such content in MOLPoints issued in each country where we maintain a local presence and in MOLPoints issued by us. Such foreign currency exchange rates are adjusted on a weekly basis.

As a result of regulatory restrictions in Malaysia relating to online payments, we are required to limit the balance of MOLPoints in a registered account to MYR500. In March 2016, we received approval from BNM to increase this limit to MYR1,500 from MYR500 subject to fulfilling certain BNM requirements. For accounts based in a country where we accept local currency other than Malaysia, the balance is not permitted to exceed the local currency equivalent of MYR500, which will increase to MYR1,500 upon our fulfillment of the specified BNM requirements. For accounts based in all other countries, transactions are denominated in U.S. dollars and the balance is not permitted to exceed the U.S. dollar equivalent of MYR500, which will increase to MYR1,500 upon our fulfillment of the specified BNM requirements. For all accounts based outside Malaysia, we adjust the balance limit whenever the exchange rate between the applicable currency and Malaysian Ringgit fluctuates by at least 5% since the most recent adjustment.

The volume of MOLPoints sold has increased substantially in recent years to MYR792.2 million in 2015, from MYR715.6 million in 2014 and MYR589.3 million in 2013, representing a compound annual growth rate of 15.9%.

Content Providers

MOLPoints can be used to purchase digital content, including thousands of online games, from over 800 content providers as of December 31, 2015. Our content providers primarily comprise global game operators such as Wargaming, global games platforms such as Facebook, regional platform operators such as Garena in Southeast Asia and Taiwan and regional content providers, such as Asiasoft in Southeast Asia. We also offer MOLPoints for Facebook, an application that enables users to perform MOLPoints transactions, such as topping-up their Facebook balance and game credits, without logging off from Facebook. In addition, MOLPoints can be used to purchase game credits for all games operated on our games portal, MMOG.asia, and other digital content such as music streaming and virus protection software.

We continually seek to add new digital content and content providers to MOLPoints, with an increasing emphasis on mobile content including mobile games and music. Prior to 2006, our content providers were primarily local online game operators in Malaysia and Singapore. In 2007, operators of massive multi-player online role-playing games, or MMORPGs, based in China, Taiwan and Korea began to access Southeast Asian markets, primarily in Singapore and Malaysia, where players tend to be comfortable playing games in English and Simplified Chinese. Beginning in 2008, the number of players based in Southeast Asia playing online games published in the United States increased substantially, prompting game operators in the United States to work with us to monetize this gaming activity. In 2010, driven by the increasing popularity of online games and social games, and the desire to increase revenue from players without access to credit cards, Facebook began to accept MOLPoints as payment for game credits. More recently, well-known global game and platform operators, including Wargaming, have adopted MOLPoints for players in Southeast Asia, Australia, New Zealand, Taiwan, Japan, the United States, Turkey and Brazil.

MOLPoints are utilized primarily by consumers to purchase online game credits, which generally operate under the “free-to-play” model. Under the free-to-play model, game operators allow players to play a game for free but players are required to use game credits in order to purchase in-game virtual items and virtual currency. Historically, game operators had self-published games for local distribution and would generally sell game credits directly to players. In recent years however, games have increasingly been distributed on a much broader, regional or global scale, often through distribution platforms such as Facebook, smartphone application stores, and mobile application stores. By offering consumers the ability to purchase game credits for multiple games in multiple markets, MOLPoints are well-suited to games that are platform-based and distributed regionally or globally.

We believe game operators benefit from adopting MOLPoints because MOLPoints allow game operators to reach active and paying game players who make in-game purchases regularly. This is particularly important with respect to mobile game operators, which can suffer from a lack of visibility in app stores. We also work with online game developers to market their games through our distribution network, including by posting game posters at local cybercafés and other retail stores, organizing game tournaments and running joint promotions with our distribution partners. We have supported marketing and promotional campaigns, both online and offline, for our global partners, including Facebook and Wargaming, among others. We manage GST/VAT and local regulations on behalf of merchants, and we offer real time sales support to our merchants through our MOL Merchant Administration Portal, which allows merchants access to reports that show individual sales transaction records, including the order identification number, the date, time, status and currency of each transaction. Merchants are able to select reports based on a specified range of dates with the ability to sort reports.

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Our agreements with content providers are either on a purchase basis, which means that we purchase digital content at a discount for resale, or a fulfillment basis, which means that we sell digital content on behalf of the content provider in exchange for a commission or service fee based on the value of content purchased by consumers using MOLPoints, among other factors. In each case, discounts and commissions from content providers are typically 20% of volume but can vary depending on local market practice, the content provider, and the content. In markets where we have grown through acquisition our revenue share for particular content may be as low as 10% or as high as 35% due to legacy agreements entered into with content providers prior to the acquisition. In the years ended December 31, 2013, 2014 and 2015, approximately 75.0%, 68.7% and 58.8% of the content purchased by consumers using MOLPoints was distributed pursuant to purchase agreements, with the remainder on a fulfillment basis. Our agreements with content providers are typically for a term of one year with automatic renewal and may be terminated by either party on 30 days’ written notice. In markets where we have grown through acquisition our agreements with content providers may be for a term longer than one year due to legacy agreements entered into with content providers prior to the acquisition or due to our efforts to secure the relationship with a content provider that is particularly significant to the acquired company.

We and our content providers generally invoice each other monthly and require payment within 15 days following the date of the invoice. MMOG.asia accounted for 4.6%, 2.2% and 1.1% of total fees earned from MOLPoints in 2013, 2014 and 2015, respectively In 2015, Garena accounted for 2.7% of the total fees earned from MOLPoints, which was more than any other content provider.

Distribution Network

MOLPoints payment credits are sold at more than 970,000 physical locations in 11 countries across four continents where we maintain a local presence and physical locations in other countries where we have relationships with aggregators who distribute our products through channels with which they have direct relationships. MOLPoints payment credits are also available for purchase electronically over the internet, through mobile devices and at electronic kiosks, using credit cards or online banking.

• Physical. We operate in markets where many consumers primarily use cash for their online purchases, often because they lack access to credit cards and online banking. In order to meet this demand, we offer MOLPoints for sale through our vast network of chain operators such as 7-Eleven convenience stores, individual retailers such as cybercafés, aggregators such as e-pay and consumer-operated kiosks. MOLPoints is the only micropayment system for online game credits that is offered by 7-Eleven Malaysia, which is the largest convenience store chain in Malaysia based on number of stores operated in Malaysia as of March 2014. 7-Eleven Malaysia is ultimately controlled by our major shareholder. In 2013, 2014 and 2015, respectively, 17.4%, 13.2% and 11.6% of total MOLPoints volume was distributed by 7-Eleven Malaysia convenience stores and no other physical distribution partner or chain of physical distribution partners accounted for the distribution of more than 5% of the total MOLPoints volume distributed in any of these years. We also earn revenue from sales of MOLPoints at 7-Eleven convenience stores in Singapore and Thailand. In Singapore we have distribution agreements with 7-Eleven convenience stores, while in Thailand we have a distribution agreement with Advance MPay, a mobile service provider that distributes MOLPoints through 7-Eleven convenience stores. Typically, our agreements with physical distribution partners are for a term of one year and may be terminated by either party upon 30 days’ prior written notice. We pay a commission to the physical distribution partners based on the value of MOLPoints sold. Typically, we invoice physical distribution partners weekly and are paid within 14 days following the date of the invoice. In 2013, 2014 and 2015, respectively, 64.4%, 69.5% and 64.6% of the total MOLPoints volume distributed was distributed by our physical distribution partners.

In Malaysia, the Philippines and Thailand, our physical distribution network for MOLPoints also includes our proprietary MOLReloads distribution network, which serves to reduce our costs in connection with such distribution. For a discussion of distribution of digital content, including MOLPoints, through our MOLReloads distribution network, see “—MOLReloads—MOLReloads Distribution Network.”

• Electronic. Consumers can purchase MOLPoints electronically using credit cards or online banking from more than 100 banks. We operate local websites for each of Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan, Vietnam and New Zealand. To purchase MOLPoints through online banking, a consumer logs on to our website and selects the bank to be used for payment and the payment is deducted from the user’s bank account. The bank then credits the amount of the payment, net of a commission that is retained by the bank, to our bank account. To purchase MOLPoints using a credit card, a consumer logs on to our website and selects a payment channel, such as MOLPay, Paypal or Skrill, among others. The payment channel processes the payment and credits the amount of the payment net of the payment processor’s commission, to our bank account. For purchases of MOLPoints through a registered account, the consumer’s new balance of MOLPoints is reflected immediately upon payment. In 2013, 2014 and 2015, respectively, 35.6%, 30.5% and 18.3% of the total value of MOLPoints distributed was distributed through electronic distribution channels.

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• Mobile. We also have mobile carrier billing arrangements with SingTel in Singapore and Turkcell, Avea and Vodafone in Turkey whereby telecommunications service providers sell MOLPoints to consumers who are billed on their monthly mobile phone statement. In Singapore, SingTel GXCredits allows SingTel pre-paid and post-paid mobile users to purchase MOLPoints by short-message-services, or SMS, and pay for their MOLPoints through the deduction of pre-paid credit or on their monthly statement. These telecommunications service providers collect payment on our behalf. We have additional mobile carrier billing arrangements through our acquisitions of Easy2Pay and PayByMe in May 2014 and September 2014, respectively. Easy2Pay operates a mobile carrier billing platform in Southeast Asia, including Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Singapore. PayByMe operates a mobile carrier billing platform in Turkey, Saudi Arabia, UAE, Kuwait, Qatar, Oman, Jordan, Lebanon, Iraq, Bahrain, Egypt and Azerbajian. The proportion of MOLPoints distributed through our mobile distribution channels has grown steadily 17.1% of the total MOLPoints volume distributed was distributed by our mobile distribution partners.

Outside of the 11 countries where we operate local websites, MOLPoints are primarily sold through aggregators, which are distributors that use a variety of third party distribution channels and charge us a commission for their distribution. Such sales accounted for less than 1% of our total sales of MOLPoints in 2015.

In several countries where we have acquired distribution platforms, MOLPoints are distributed through the existing platform that we have acquired. These include LoadCentral in the Philippines, Ayopay in Indonesia, Game Sultan in Turkey, Nganluong in Vietnam and Rixty in the United States and Brazil.

MOLReloads

MOLReloads distributes electronic vouchers, or e-vouchers, for pre-paid mobile airtime and digital content including MOLPoints. Consumers can purchase pre-paid mobile airtime for most major mobile service providers in Malaysia, the Philippines and Thailand through our MOLReloads distribution network, which comprises chain operators, including more than 1,900 7-Eleven convenience stores as of December 31, 2015, cybercafés and bookstores, and, in the Philippines, individual distributors who distribute e-vouchers through their mobile phones. In February 2014, we entered into an agreement with InComm, a provider of pre-paid products, services and transaction technologies, for the distribution of point-of-sale activated, or POS-activated, pre-paid gift cards through our MOLReloads distribution network. While the agreement covers territories of Malaysia, Singapore, Indonesia, the Philippines, Thailand and Vietnam, we initially plan to sell POS-activated pre-paid gift cards in Malaysia, Thailand and Singapore, which will represent MOLReloads’ entry into the Singapore market. Sales of digital content, including MOLPoints, through our MOLReloads distribution network are accounted for under MOLPoints.

The following table sets forth certain data with respect to MOLReloads as of the specified dates and for the specified periods.

	As of and for the year ended December 31,
	2013		2014		2015
Active retailers(1)
Malaysia		1,930		2,127		2,569
Philippines		35,151		36,354		33,855
Thailand		123		314		295
Total active retailers		37,204		38,795		36,719
Volume(2) (MYR in millions)
Malaysia		1,123.5		1,269.4		1,492.8
Philippines		88.3		93.1		100.1
Thailand		2.2		6.1		21.9
Total volume		1,214.0		1,368.6		1,614.8

Notes:

(1) Active retailers refers to the total of number of MOLReloads terminals in Malaysia and Thailand as of the end of the period, in each case which have sold at least one MOLReloads e-voucher during the preceding twelve months, and the number of individual distributors in the Philippines as of the end of the period, which have sold at least one MOLReloads e-voucher during the preceding month.

(2) Volume refers to the total retail value of pre-paid mobile airtime distributed by MOLReloads during a period. MOLReloads volume tends to be significantly greater than MOLReloads revenue, which excludes amounts that we pay to mobile airtime providers pursuant to our revenue sharing arrangements.

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How MOLReloads Works

MOLReloads distributes e-vouchers through a distribution network comprising terminals located in retail stores operated by chain operators such as 7-Eleven, and at cybercafés and bookstores, and in the Philippines, individual distributors’ smartphones. E-vouchers issued by our MOLReloads terminals and web-based interface are printed on paper, while e-vouchers purchased from individual distributors using smartphones are in the form of an SMS sent by the distributor to the consumer. For mobile airtime e-vouchers, the consumer tops up their mobile airtime by inputting the mobile airtime e-voucher into their mobile phone upon which mobile airtime data and usage are uploaded to the mobile prepaid service operator’s system. For digital content e-vouchers, the consumer enters the digital content e-voucher directly at the merchant’s website to purchase content. MOLReloads maintains sales information and data for reconciliation and invoicing purposes and is supported by a web-based management tool that provides real-time sales analysis. We earn revenue by either purchasing e-vouchers at a discount for resale through our MOLReloads distribution network or charging a commission for e-vouchers sold through our MOLReloads distribution network, depending on our agreement with the applicable telecommunications service provider or content provider. Generally, for e-vouchers that we purchase for resale, we invoice the distributor weekly, and for e-vouchers that we sell on behalf of telecommunications service providers, we invoice the distributor monthly.

Telecommunications Service Providers

The substantial majority of the e-vouchers that we sell through our MOLReloads distribution network are issued by telecommunications service providers. We sell prepaid mobile airtime for 26 telecommunications service providers as of December 31, 2015 either directly or indirectly through resellers. These telecommunications service providers include, among others, all major mobile prepaid service providers in Malaysia, including Digi, Maxis, U Mobile, and Celcom; the Philippines, including Globe, Sun Cellular and Smart; and Thailand, including Advance MPay, DTAC and TRUE. Our agreements with telecommunications service providers are either on a purchase basis, which means that we purchase airtime upfront for resale, or a fulfillment basis, which means that we sell airtime on behalf of the telecommunications service provider. Under purchase agreements, we purchase mobile airtime directly or indirectly from telecommunications service providers at a discount for resale through our MOLReloads distribution network. Under fulfillment agreements, we charge a commission based on the value of airtime sold through our MOLReloads distribution network. Our agreements with mobile prepaid service providers are typically for a term of one year and may be terminated by either party on 30 days’ written notice. In 2013, 2014 and 2015, respectively, approximately 62.5%, 65.5% and 66.3% of MOLReloads’ volume was distributed pursuant to fulfillment agreements, with the remainder on a purchase basis. Our top five mobile carriers account for nearly all of MOLReloads’ revenue.

MOLReloads Distribution Network

Our MOLReloads distribution network includes more than 1,700 terminals located in retail stores operated by chain operators in Malaysia and Thailand and mobile distribution by more than 96,000 individual distributors in the Philippines, including 33,855 active retailers as of December 31, 2015. We believe MOLReloads can attract end users to our distributors and offer our distributors the opportunity to enhance their revenue by selling our products with minimal investment and without maintaining physical inventory. Pre-paid mobile airtime distributed by 7-Eleven Malaysia accounted 72.5%, 74.6% and 72.7% of MOLReloads’ segment revenue in the years ended December 31, 2013, 2014 and 2015, respectively. No other distributor or chain of distributors accounted for more than 9% of MOLReloads’ segment revenue in any of 2013, 2014 and 2015. For the years ended December 31, 2013, 2014 and 2015, MOLReloads’ direct costs and other ancillary expenses, which primarily comprise fees paid to distribution partners, were MYR16.3 million, MYR19.2 million and MYR22.2 million, respectively, which is equal to 1.3%, 1.4% and 1.4%, respectively, of MOLReloads volume in the respective periods.

• Retail Store Terminals. MOLReloads e-vouchers are distributed through terminals located in more than 2,500 retail stores in Malaysia and 295 retail stores in Thailand as of December 31, 2015. MOLReloads terminals are owned by us and pre-installed with our own proprietary software. We enter into agreements with retail stores, pursuant to which we locate MOLReloads terminals at the retail store, which operates the terminal, and we pay a commission to the retail store based on the value of MOLReloads sales by retail stores. Sales at 7-Eleven Malaysia accounted for the majority of the total value of mobile airtime sold through our MOLReloads distribution network in each of the years ended December 31, 2013, 2014 and 2015. In November 2009, we entered into an exclusive agreement with 7-Eleven Malaysia for MOLReloads, which expires in 2024, pursuant to which we invoice 7-Eleven Malaysia weekly and we are entitled to payment within seven days of the date of the invoice. We introduced bill payment services at 7-Eleven Malaysia in the third quarter of 2014. Our agreements with other retail stores for MOLReloads are typically for a one year term subject to termination upon 30 days’ written notice. Pursuant to these agreements, we typically invoice the retail store monthly and we are typically paid within 15 days of the date of the invoice. In 2013, 2014 and 2015, we derived 72.5%, 74.6% and 72.7% of MOLReloads’ segment revenue from distribution through retail store terminals, all of which was distributed by 7-Eleven Malaysia.

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• Mobile distribution. MOLReloads e-vouchers are distributed through mobile phones operated by more than 96,000 individual distributors in the Philippines as of December 31, 2015, many of which distribute MOLReloads e-vouchers through their own networks of sub-resellers. These distributors distribute e-vouchers by SMS using proprietary software that we developed for feature phones and smartphones and we pay a commission to the distributor. Pursuant to our agreements with these individual distributors, the distributor is required to make specified minimum purchases of mobile airtime, which we sell to the distributor at a discount for distribution to consumers. Our agreements with individual distributors are typically for a one year term subject to termination upon 30 days’ written notice. In 2013, 2014 and 2015, we derived 27.1%, 24.7% and 22.9% of MOLReloads’ segment revenue from mobile distribution.

MOLPay

MOLPay is an integrated payments solution for online merchants, which offers cash, online banking and credit card payment processing options for their consumers. MOLPay has been offered in Malaysia since 2011, Vietnam since 2013 and Indonesia since 2014. We own 51% of MOLPay Sdn. Bhd., which operates MOLPay in Malaysia and 50% of Nganluong, which operates MOLPay in Vietnam. MOLPay Sdn. Bhd. has an agreement with MyClear to serve as a third party (non-bank) acquirer for MyClear’s FPX, and direct debit services in Malaysia.

The following table sets forth certain data with respect to MOLPay as of the specified dates and for the specified periods, excluding MOLPay’s operations in Indonesia, which were launched in 2014 and are not yet material.

	As of and for the year ended December 31,
	2013		2014		2015
Online merchants(1)
Malaysia		1,109		1,389		1,806
Vietnam		2,346		2,416		2,702
Total merchants		3,455		3,805		4,508
Volume(2) (MYR in millions)
Malaysia		65.0		87.3		197.5
Vietnam		79.2		267.2		454.1
Total volume		144.3		354.5		651.6

Notes:

(1) Online merchants refers to the number of online merchants in Malaysia and Vietnam that accepted MOLPay as a payment option as of the end of the period.

(2) Volume refers to the total value of payments processed by MOLPay during a period. MOLPay volume tends to be significantly greater than MOLPay revenue, which excludes amounts paid to financial institutions.

How MOLPay Works

When making a purchase on an online merchant website that uses MOLPay, consumers can select MOLPay as the mode of payment. Upon selecting MOLPay, a consumer may select any one of a number of online and physical modes of payment.

• Electronic Payment. Credit card payments currently comprise the majority of payments through MOLPay. MOLPay also provides for payments by online banking and was connected to the online banking platforms of more than 100 banks as of December 31, 2015. Electronic payment can be made online through HTML using computers and mobile devices. When a consumer chooses to pay electronically, online or using a mobile device, MOLPay authenticates the transaction with the relevant financial institution, which reverts to MOLPay in real time with the payment result. MOLPay informs the e-commerce merchant of the result, and the financial institution settles payment to MOLPay. MOLPay then remits the purchase price, net of MOLPay’s commission, to the merchant. We are also in the process of becoming a third party acquirer for processing credit card transactions by becoming a direct member of major card payment networks. We expect that this would enable us to improve merchant approval times and processing as well as have more competitive rates for credit card processing.

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• Physical Payment. MOLPay has agreements with various distribution partners, including 7-Eleven and other convenience stores, cybercafés and bookstores, for more than 23,000 additional physical payment points in Malaysia, Singapore and Indonesia, which are in the process of being activated. MOLPay’s physical payment network is intended to make e-commerce available to consumers without access to a credit card or online banking. When a consumer chooses to pay at a physical payment point, the online merchant initiates a payment request to MOLPay, which generates a MOLPay Transaction Identification Number. The consumer brings the MOLPay Transaction Identification Number to any of MOLPay’s physical payment points for cash payment. Upon payment, the physical payment point notifies MOLPay that the MOLPay Transaction Identification Number has been paid and MOLPay notifies the online merchant. MOLPay settles payments in batches with physical payment points. MOLPay then remits the purchase price, net of MOLPay’s commission, to the online merchant.

Online Merchants

As of December 31, 2015, MOLPay was accepted by 1,806 online merchants in Malaysia and 2,702 online merchants in Vietnam. MOLPay enables consumers to pay online merchants quickly and easily without sharing sensitive financial information with the online merchant. MOLPay enters into agreements with online merchants which are typically for a one year term and may be terminated by either party upon 30 days’ written notice. We earn revenue by charging a commission based on the purchase price, which is deducted from the amount that we remit to the online merchant. MOLPay’s commission tends to represent a relatively higher percentage of the purchase price for small and medium sized merchants compared with larger merchants, such that MOLPay’s segment gross profit margin may be adversely impacted to the extent MOLPay derives a greater proportion of its volume from larger merchants in future periods. We settle payment with online merchants on a weekly basis in batches that includes payments from all applicable payment channels. Commissions earned from payments processed for MOLPoints accounted for 6.5%, 7.2% and 4.0% of MOLPay’s revenue from Malaysia in 2013, 2014 and 2015, respectively. Garena Vietnam accounted for 33.6% of MOLPay’s segment revenue in 2015.

MOLWallet

MOLWallet is an account-based online and mobile payment processing and money transfer system that is intended to replace a physical wallet and represents our first product that is primarily targeted at mobile consumers. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. MOLWallet accountholders can pay for digital and physical retail goods and services, pay third party bills and reload pre-paid accounts for mobile airtime and other products and perform peer-to-peer money transfers through a convenient, secure and intuitive online or mobile interface with multiple payment methods. Deposits into an accountholder’s MOLWallet can be made from cash, bank accounts, credit and debit cards and money transfers through the existing technology and distribution networks of MOLReloads and MOLPay. An MOLWallet account holder can withdraw their MOL Wallet balance to their nominated bank account, and/or at major ATMs on “cardless withdrawal” platform. Payments for goods and services using MOLWallet can be initiated from a MOLWallet interface, whereby a consumer selects a merchant from our platform for payment, or a merchant interface, whereby a consumer selects MOLWallet as the mode of payment for a purchase. We plan to earn revenue by charging a commission for purchases, peer-to-peer transfers and cash withdrawals made using MOLWallet.

We plan to offer downloadable MOLWallet applications for the most popular mobile and digital platforms and devices powered by Android and iOS operating systems. These efforts are a vital part of our overall marketing strategy to foster adoption of MOLWallet among consumers and merchants.

MMOG.asia

MMOG.asia is an online games portal that we have operated since 2012 when we acquired our initial equity interest of approximately 80% in MyCNX which operates MMOG.asia. MMOG.asia operates across Southeast Asia in five languages and offers localized platforms for the Malaysian, Thai and Indonesian markets. While each of MMOG.asia’s games is free to play, MMOG.asia sells in-game items and virtual goods to game players and each of MMOG.asia’s games accepts MMOG.asia’s online currency, MCoins, to purchase game credits. MCoins can be purchased using MOLPoints or cash. Our operation of MOLPoints provides knowledge of the online gaming market that we apply in selecting games to operate on MMOG.asia. MMOG.asia also benefits from our MOLPoints platform to expand its business. In 2013, 2014 and 2015, MMOG.asia’s segment revenue was MYR23.7 million, MYR21.7 million and MYR11.7 million, respectively, representing 13.8%, 10.7% and 4.7%, respectively, of our total revenue. In May 2014 we acquired the remaining equity interest in MyCNX that we did not already own.

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The following table sets forth certain information with respect to MMOG.asia as of the dates specified and for the periods specified.

	As of and for the year ended December 31,
	2013		2014		2015
Active paying users(1)		110,826		56,865		43,279
AVPPU(2) (MYR)		290.9		383.6		344.2
Volume (MYR in millions)(3)		32.2		21.8		14.9

Notes:

(1) Active paying users refers to the number of unique users who have purchased game points on MMOG.asia during the preceding 12 months.

(2) AVPPU refers to average volume per paying user, which is equal to total volume for a preceding twelve month period divided by the number of active paying users as of the end of the period.

(3) MMOG.asia volume is the total retail value of content sold by MMOG.asia during the preceding twelve months.

MMOG.asia Games

As of December 31, 2015, MMOG.asia operated 32 massive multi-player online games, or MMOGs including 4 mobile games. These include Boomz (DDT), which was launched in 2009 and DivoSaga (Wartune), which was launched in 2011. MMOG.asia continually identifies new games for distribution on its portal. We seek to launch 15 to 20 new games every year. MMOG.asia expects to launch 14 new games in 2016, including 12 mobile games.

MMOG.asia’s licensed games are offered free-to-play and generate revenue from the sale of in-game virtual goods to game players. Virtual goods include avatars, weapons, equipment and other items used to enhance players’ status in a game. Virtual goods are packaged or bundled along with virtual currency on a promotional basis with a view to stimulating spending by players.

We license online games from game developers, which deliver the game titles for publication on the MMOG.asia portal. Most games published by MMOG.asia are localized for one or more of the Malaysian, Indonesian and Thai markets, for example through translation to local languages and adaptation of game elements to local cultures, while certain other games are targeted to a single market. MMOG.asia offers games in languages including Chinese, English, Bahasa Indonesia, Bahasa Malaysia and Thai. To identify games for investment, we rely on our industry experience to evaluate the market potential of targeted products based on market demand, the level of support that game developers are willing to commit, and the reputation of the game developer. One of MMOG.asia’s most successful products has been Boomz (DDT), which accounted for 49.1%, 38.9% and 30.9% of MMOG.asia’s segment revenue in 2013, 2014 and 2015, respectively.

The cost of licensing games from game developers generally consists of an upfront licensing fee and royalties between 30% to 40% of our revenues from operating the games. Under the license agreements, we have the exclusive right to operate the games in specified markets. Generally, the license agreements have a term of two to five years. Licensors typically license updates and expansion patches to us, for which we may be required to pay depending on the terms of the license agreement. Our license agreements typically require the licensor to provide us with a pre-specified level of technical support, and any additional technical support required by us may be subject to payment.

MMOG.asia Player Base

As of December 31, 2015, MMOG.asia operated 32 games, including multiple games in multiple languages in the same series, and had more than 43,000 active paying users as of December 31, 2015, which is almost 24% lower compared with 2014 primarily due to the substantial migration of games players to mobile platforms. See “Risk Factors – Our growth prospects will suffer if we are unable to continue to grow our business for mobile platforms.”

We seek to strengthen our game players’ loyalty by, among other things, closely monitoring players’ feedback, preferences and demands, introducing new game updates, providing a high level of customer service in a timely manner and also rewarding players through reward campaigns and events which run periodically.

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Geographic Presence

Following our initial launch in Malaysia in 2000, we have expanded into new markets both organically and through more than ten acquisitions in seven different countries since 2009. Our products are available globally and we currently maintain a local presence in each of Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan, Vietnam and New Zealand. For each country where we maintain a local presence, we have a local office (other than New Zealand) and a website with localized content including game credits for localized games, and we accept local currency and have arrangements with local banks for online payments. We also maintain individual country pages on Facebook for Malaysia, Indonesia, the Philippines, Singapore, Thailand, Vietnam and Australia to promote sales of localized products in each of those markets. By utilizing localized platforms, we allow users to transact in local currency and are able to provide related information in local language in order to provide a better customer experience. We typically establish a local presence when we believe we have started to gain significant traction among local users.

We operate MOLPoints locally in Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan and Vietnam; remotely in India and New Zealand; and globally through our global website, www.mol.com/global. We classify our markets as primary and secondary. Primary markets are markets with low credit card penetration and limited access to banking services. Our primary markets include Malaysia, Thailand, Indonesia, Philippines, Vietnam, Turkey and Brazil. These markets offer a substantial opportunity for us to become the dominant e-payment platform for all online services across these markets. Our secondary markets are developed markets that include the USA, Australia, New Zealand, Taiwan and Singapore. These secondary markets already have high credit card penetration, and most of these markets have dominant e-payment players for online services. However, we still see a substantial opportunity for us to become a leading alternative e-payment enabler for certain categories of online services, in particular for online gaming services, and we intend to grow opportunistically in these markets.

MOLReloads is offered in Malaysia, the Philippines and Thailand. MOLPay is offered in Malaysia, Vietnam and Indonesia. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. We operate local platforms in local languages for MMOG.asia in Malaysia, Thailand and Indonesia.

Please refer to Item 5.A. “Operating and Financial Review and Prospects – Selected Statements of Operations Items – Revenue” for a breakdown of total revenues by category of activity and geographic market for 2013, 2014 and 2015.

Malaysia

Malaysia is our primary market and all of our products are offered there. We have operated MOLPoints and MOLReloads in Malaysia since 2001; MOLPay since our acquisition of NBePay, an e-commerce payments service provider that we relaunched as MOLPay, in 2011; and our localized platform for MMOG.asia since our acquisition of MyCNX in 2012. We have been approved by BNM to operate our MOLPoints micropayments system since 2002.

Thailand

We have operated MOLPoints in Thailand since our acquisition of Funloader in 2009, MOLReloads since 2010 and our localized platform for MMOG.asia since our acquisition of MyCNX in 2012. In Thailand, we also operate EasyTOPUP, a product that is similar to MOLPoints and treated as part of MOLPoints for purposes of this annual report. In addition, MOL Thailand acquired 60% of Easy2Pay, a mobile payment service, in 2014. We are currently in negotiation to acquire the second tranche, 20% of Easy2Pay which is expected to be concluded during 2016.

Turkey

We have operated MOLPoints for the Turkish market, which is branded as Game Sultan, since our acquisition of a 70%-interest in Game Sultanin 2013. In 2014, we acquired 51% of PayByMe, a mobile carrier billing platform that currently operates in Turkey, Saudi Arabia, UAE, Kuwait, Qatar, Oman, Jordan, Lebanon, Iraq, Bahrain, Egypt and Azerbajian. In April 2015, we restructured the mobile payment business of PaytoGo into PayByMe. Under the restructuring arrangement, PaytoGo will no longer operate a mobile payment business in Turkey. Both companies agreed to cooperate and share the revenue of the previous PaytoGo mobile payment business.

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Philippines

We have operated MOLPoints and MOLReloads in the Philippines since 2010. In 2011, we acquired 100% of Uniwiz, which operates LoadCentral, a network of individual distributors who distribute e-vouchers through smartphones, which serves as our primary distribution network for MOLReloads and MOLPoints in the Philippines.

Vietnam

We have operated MOLPay in Vietnam since 2013, when we acquired 50% of Nganluong, which serves as our primary distribution channel for ecommerce transactions in Vietnam.

Indonesia

We have operated MOLPoints in Indonesia since 2012, our localized MMOG.asia platform since 2013 and MOLPay since 2014. In 2013 we acquired 100% of Ayopay, a payment service provider that specialized in online game credits in Indonesia and now serves as our primary distribution channel for MOLPoints in Indonesia.

Brazil and the United States

We have operated MOLPoints in the United States and Brazil since 2013. We acquired 54.2% of Rixty in 2012 and Rixty now serves as our primary distribution network for MOLPoints in the United States and Brazil. While we have access to shared office space on an as-needed basis in Brazil, our Brazil operations are conducted from our office in the United States.

Australia and New Zealand

We have operated MOLPoints in Australia and New Zealand since 2012, when we acquired 65% of Ocash Pty Ltd., which serves as our primary distribution network in these markets. Our operations in New Zealand are conducted from our office in Australia, and we do not have a local subsidiary or office in New Zealand.

Singapore

We have operated MOLPoints in Singapore since 2008.

Taiwan

We have operated MOLPoints in Taiwan since 2013.

Seasonality

Our sales have historically been higher during festive periods, as our business tends to benefit from consumers’ increased leisure time. Such periods include Chinese New Year, which generally occurs in January or February, Ramadan, which occurred in the third quarter in each of 2013, 2014 and the second and third quarters in 2015, and the December holiday season.

Sales and Marketing

We have a dedicated team of sales and marketing personnel who seeks to expand our network of game operators, online merchants and distribution channels, attract and retain consumers and promote our products. Depending on our sales and marketing strategy for each country in which we operate, we use advertising in the online and print media, various websites that we operate, our user database that we contact through mass e-mails, chat applications, and cybercafé advertising platforms. We also actively engage in promotional campaigns together with our merchants, such as gaming competitions and other events and promotions, which we believe have proven to be effective.

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Brand Awareness

We believe the MOL brand is well-known within the gaming industry in Malaysia and Thailand, while Game Sultan and PayByMe are well-known brands in the gaming industry in Turkey. Similarly, Load Central has a strong brand name in Philippines. We seek to develop consumer awareness of our MOL brand throughout the world. We believe that maintaining a social media presence is important to sustaining brand awareness in our industry. We had over 1.2 million Facebook fans as of December 31, 2015. We also maintain individual country pages on Facebook for Malaysia, Indonesia, the Philippines, Singapore, Thailand, Vietnam and Australia, to engage our users with local content. We consider social media to be a key avenue for customer service and feedback. We use social media to share and update new products, games, content and services with our customers, in addition to obtaining important feedback from our customer base that may reduce the time required to discover and address any problems with our products and services. We have a dedicated social media manager who oversees our social activities on Facebook.

Consumer Loyalty and Support

Our MOLPoints micropayment system offers the MOLPoints Rewards Program to foster consumer loyalty and build our customer database. For every purchase of MOLPoints, consumers are credited with rewards points. Consumers may log in to their registered MOL account at our portal to select from a variety of products and services for redemption, including various denominations of MOLPoints, depending on their balance of rewards points. Similarly, MOLPay offers the BCard loyalty program, through which consumer can accumulate rewards points for redemption. In addition, we operate an in-house consumer call center that can be accessed by phone or internet 24 hours per day, 7 days per week. Our call center primarily assists consumers seeking to purchase MOLPoints.

Our Technology Platform

We strive to continually improve our technology to enhance customer experience and to increase efficiency, scalability and security. A substantial portion of our development efforts are focused on creating specialized software that enhances our internet-based customer functionality and have developed intuitive user interfaces, customer tools and transaction processing, database and network applications that help enable our users to reliably and securely complete transactions on our sites.

With a view to managing our incremental technology costs, payment processing services provided by each of MOLPoints and MOLReloads rely on the same technological infrastructure, which is scalable and customizable. Our payment processing platform consists of a database, a processing system and interfaces for consumers, MOLPoints content providers and MOLReloads telecommunications service providers and distribution partners. The interfaces are connected to the processing system through secure protocols, namely secure sockets layer (SSL), and transmission control protocol / internet protocol (TCP/IP). In order to reduce the risk of a virus spreading through our entire network, our terminals are not connected to each other. Our MOLReloads terminals are manufactured by Ingenico and Castles Technology using a unique compact design that is designed to reduce technical complexity and potential operating defects. Our MOLReloads terminals are built with up-to-date Payment Card Industry Point-of-Sale PIN Transaction Security Standard (PCI PTS) security with a view to assuring reliable and secure operation. The software used in our terminal server is a proprietary application that we developed in-house. We update the software on our MOLReloads terminals remotely approximately semi-annually. MOLPoints and MOLReloads have adopted Microsoft’s approved best practices for the continuing development of the relevant backend transaction systems.

Our integrated application programming interface (API), enables the content providers, telecommunications service providers and online merchants, respectively, to verify the authenticity of e-vouchers issued by MOLPoints, MOLReloads and MOLPay. MOLPay uses a platform for global credit card payment processing, domestic alternate payment processing, in-house fraud management and consolidating settlement data processing, which, in each case, is compliant with the Payment Card Industry Data Security Standard, or PCI DSS, a widely accepted security standard set by the PCI Security Standard Council, a body formed in 2006 by five major credit card issuers. MOLWallet, which we plan to launch in Malaysia inthe second quarter of 2016, was jointly developed by MOLPay’s technical team and Nganluong’s e-wallet team.

Our MMOG.asia portal and game servers rely heavily on VMWare Virtualization Technology and all game servers are installed as virtual servers in ESX Hosts provided by VMWare. VMWare’s cloud computing virtualization operating system, vSphere, provides full redundancy features and optimized CPU, memory and storage resources for our game servers. Firewalls are installed to provide security to the network and prevent hacking and network attacks from the internet. MMOG.asia integrates wallet systems and direct purchase as a payment method in the MMOG.asia portal and in its games, whereby players are able to top-up to the wallet or even purchase game credits directly using MOLPoints or Mcoins, which is a virtual currency used in MMOG.asia’s games and game portal.

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Fraud Prevention

MOLPoints has developed a multi-faceted fraud prevention process. Transactions are subject to limits on the total amount and frequency of transactions by a user, which limits are set by our finance team on a country-by-country basis. We also operate a non-intrusive online fraud detection solution, which relies on geolocation and proxy detection to assess whether an internet protocol address may be suspicious, in addition to a mutual collaboration network that disseminates information about fraudulent computer and accounts to protect businesses from online fraud and abuse.

MOLPay’s online payments channels incorporate an in-house fraud management system pursuant to which more than 30 payment parameters are analyzed and distilled into a score for each transaction. Online merchants have the ability to configure the parameters to suit their risk acceptance level. MOLPay requires merchants to comply with its website security compliance checklist with a view to preventing the connection with MOLPay from being compromised. Transactions require 3-D authentication, which requires the consumer to authenticate the transaction, usually by entering a confirmation code sent by SMS to the consumer’s mobile phone in connection with each transaction. MOLPay also conducts post-authorization reviews in collaboration with merchants with a view to identifying and addressing suspicious transactions. With MOLPay’s Secure 1-Click Payment feature, credit card details are tokenized and stored during the consumer’s first transaction. Consumers’ credentials are stored in a secure vault that is compliant with the widely-accepted PCI DSS.

MOLWallet, which we plan to launch in Malaysia inthe second quarter of 2016, will have a fraud control filter system that is designed to detect suspicious transactions and block associated accounts. Similar to major payment networks, MOLWallet employs a 3-D secure system, which adds a further layer of security to online payments by requiring the consumer to perform an additional authentication step, usually by entering a confirmation code sent by SMS to the consumer’s mobile phone in connection with each transaction. In addition, MOLWallet users are required to enter a unique six digit passcode to initiate transactions.

Servers

The major components of our servers are located in Kuala Lumpur with redundant connections to the internet, as well as fault-tolerant power and fire suppression systems. We also maintain servers in Turkey, Thailand, Indonesia and the Philippines. Because of the financial nature of the MOLPoints product, our products are built on an infrastructure that offers high availability running on clusters of commodity servers. We also maintain a disaster recovery site for our Kuala Lumpur servers in Cyberjaya, Malaysia. Various components of our system are logically and physically segmented on our networks. Components of the system communicate with each other through secure sockets layer, or SSL, an industry standard communications security protocol. Finally, because we maintain certain customer data on our servers, we store all sensitive data only in encrypted form in our database in compliance with applicable privacy and data protection regulations.

Intellectual Property

Our intellectual property rights are important to our business. We rely primarily on a combination of intellectual property laws, contract provisions, copyrights, trademarks, patents and trade secrets to protect our proprietary technology and other intellectual property. Our in-house know-how is an important element of our intellectual property. Almost all of our key software has been developed in-house by our employees. Accordingly, we seek to enter into confidentiality and copyright assignment agreements with our employees and confidentiality agreements with other third parties, and we rigorously control access to our proprietary technology. Despite these measures, we cannot assure you that we will be able to prevent unauthorized use of our intellectual property, which would adversely affect our business.

Trademarks

In order to protect our trademarks in Malaysia, we have secured registration in respect of “MOL,” “MOL Money Online,” “MOLPoints,” “MOLPay,” “MOL.com,” “www.gameshive.com,” “MMOG.asia,” “MCoins,” “MyCNX Holdings” and “MOL Cybercafés.” We have filed an application for registration of our “MOL-eCenters” trademark in Malaysia. We have also registered our “MOL Money Online” trademarks in Singapore, Indonesia, USA, India, Thailand, Taiwan and the Philippines and filed applications to register our “MOLPoints” and “MOL” trademarks in Singapore, Indonesia, USA, Thailand, Philippines, Taiwan, Vietnam, Turkey, Brazil and India.

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Patents

Our patent for “VALUE EXCHANGE SYSTEM FOR USE WITHIN AN INTERNET-BASED SOCIAL NETWORK”, which is a method of enabling a value exchange system between users of a social networking service by means of registration and assignment of accounts, has been approved in the United States pursuant to the international Patent Cooperation Treaty, or PCT. Our PCT application with respect to this patent is at the examination stage in Singapore, Thailand, Indonesia, India and the Philippines.

Competition

We face competition from other companies in each of our lines of business in each country where we operate. Some of our competitors, particularly those based outside Southeast Asia, may have greater access to capital markets, more financial and other resources and a longer operating history than us.

MOLPoints competes primarily with game operators who sell game credits themselves, online aggregators of digital content such as Offgamers, global micropayment providers and aggregators such as Cherry Credits, which is a subsidiary of Shanda Games International, and local micropayment providers such as Indomog in Indonesia and TrueMoney in Thailand. MOLPoints competes primarily on the basis of its ability to attract and retain online game players and other consumers, which in turn depends on MOLPoints’ ability to attract content providers and distribution channels. We believe MOLPoints benefits from a strong brand owing to its long history and large community of consumers, content providers and distribution channels. We believe the broad range of content offered by MOLPoints’ content providers serve as a competitive advantage over game operators, which generally do not offer third party games, and local micropayment providers, which lack regional and global content coverage. We believe MOLPoints benefits from its strong local distribution network when competing with global micropayment providers and aggregators, where MOLPoints’ ability to accept cash payment serves as a competitive advantage over online retailers of game credits and other digital content. In some cases, MOLPoints is able to partner with potential competitors, such as MyCard and Cherry Credits, which in each case uses MOLPoints as their distribution channel in Southeast Asia, in order to benefit from our established distribution infrastructure.

MOLReloads competes primarily with online and offline sellers of mobile airtime and operators of payment terminal networks. MOLReloads competes primarily on the basis of transaction processing speed, convenience, coverage, network size, accessibility, availability, reliability, price and after-sales service. MOLReloads’ most direct competitor in Malaysia is e-pay, which also operates a terminal-based distribution network. While e-pay’s network comprises significantly more terminals in Malaysia than MOLReloads’ network, MOLReloads benefits from its relationship with 7-Eleven, which we believe results in substantially higher sales per terminal as compared with e-pay.

MOLPay competes primarily with retail banks, non-traditional payment services providers (such as retailers), electronic payment system operators as well as other companies that provide various forms of payment services. MOLPay competes with these companies primarily on the basis of transaction processing speed, convenience, network size, accessibility, reliability and price. We believe MOLPay’s roll out of cash payment points, which is ongoing, may be a source of competitive advantage.

MOLWallet is expected to compete primarily with online and mobile payment service providers and other e-wallet providers, on the basis of transaction processing speed, convenience, network size, accessibility, reliability and price.

MMOG.asia’s competitors include game operators, such as Asiasoft, CIB and Garena among others, and other providers of leisure activities. MMOG.asia competes with these companies primarily on the basis of the quality and features of its online games, its operational infrastructure and expertise, the strength of its product management approach, and the services offered to enhance game players’ experience.

Insurance

We maintain insurance to cover potential damage to our property and computer hardware accessories, office equipment, furniture and fittings as well as insurance for employees. These include all risk insurance (covering theft, fire, burglary, accidental damage) for our property, computer hardware and accessories, office equipment, furniture and fittings; public liability insurance; staff personal accident insurance; staff medical hospitalization insurance; group business travel insurance. We also maintain director and key officers’ liability insurance. We do not maintain business interruption insurance, insurance that covers external data media (cost of re-keying in data) or insurance that covers software, cyber-attacks or data loss. We do not carry key person insurance on any member of our management team.

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Legal Proceedings

Between November 24, 2014 and December 2, 2014, three putative class actions were commenced against, among others, MOL Global, Inc. (“MOL”) and certain of its officers and directors, in the United States District Court for the Southern District of New York captioned Freedman v. MOL Global, Inc., et al., 14 CV 9357 (WHP), Grodko v. MOL Global, Inc., et al., 14 CV 9397 (WHP) and Jewell v. MOL Global, Inc., et al., 14 CV 9493 (WHP). Each asserts claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of investors who acquired MOL American Depository Shares (“ADSs”) between October 9, 2014 and November 20, 2014, and/or who acquired ADSs pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with MOL’s October 9, 2014 initial public offering. The Freedman and Grodko actions also assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

On December 22, 2014, plaintiffs voluntary dismissed the Grodko action. Motions for lead plaintiff were due on or about January 23, 2015.

On May 8, 2015, the Court consolidated the actions and appointed Lead Plaintiff and Lead Counsel. A consolidated complaint was filed on July 7, 2015 and a second consolidated amended complaint was filed on October 7, 2015. MOL’s motion to dismiss the second consolidated amended complaint was fully briefed as of December 21, 2015.

The parties entered into a stipulation and settlement agreement dated April 11, 2016 to dismiss all claims with prejudice. The settlement is subject to court approval. A motion for preliminary approval of the settlement agreement was filed with the Court on April 12, 2016.

From time to time, we may be subject to claims and legal actions arising in the ordinary course of business, such as intellectual property infringement claims and employment disputes. Such claims or legal actions, even if without merit, could result in the expenditure of significant financial and management resources and potential result in civil liability for damages. From time to time, we may be subject to claims and legal actions arising in the ordinary course of business, such as intellectual property infringement claims and employment disputes. Such claims or legal actions, even if without merit, could result in the expenditure of significant financial and management resources and potential result in civil liability for damages.

Regulation

We are subject to laws and regulations in the jurisdictions where we conduct our business. The primary laws and regulations to which we are subject relate to payment systems, anti-money laundering and anti-terrorism financing, exchange control, consumer protection, electronic commerce and personal data protection.

Malaysia

Payment Systems

The payment systems industry in Malaysia is regulated by BNM, which is charged with overseeing the safety, reliability and efficiency of the payment systems infrastructure and safeguarding the public’s interest. As an overseer, BNM formulates the regulatory framework governing payment systems and oversees both large value and retail payment systems.

Previously, the Payment Systems Act of 2003 set out the primary regulatory and supervisory framework for payment systems in Malaysia. With the passage of the Financial Services Act of 2013, or the FSA, and the Islamic Financial Services Act of 2013, or the IFSA, on June 30, 2013, the Payment Systems Act of 2003 (along with the Banking and Financial Institutions Act of 1989, Insurance Act of 1996 and Exchange Control Act of 1953) were repealed and consolidated into the FSA and IFSA. The FSA now regulates the operation of payment systems and the issuance of designated payment instruments and the IFSA regulates the operation of Islamic payment systems and the issuance of Islamic designated payment instruments. The FSA and IFSA have extraterritorial effect to the extent that an operator of a payment system accepts payment instructions or settlement instructions from participants in Malaysia. The regulatory approach relating to payment systems remains largely unchanged under the new law. The IFSA does not apply to our business as we issue a conventional payment instrument and operate a conventional payment system.

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Issuance of e-money

Our MOLPoints micropayment system issues MOLPoints, a form of e-money which is regulated as a designated payment instrument under the FSA. MOL AccessPortal received approval from BNM to operate the MOLPoints system (formerly known as the MOLePoints system) in December 2002, and continues to be recognized by BNM as an approved issuer of a designated payment instrument under the FSA. The approval is subject to the following conditions:

• MOL AccessPortal must obtain the prior approval of BNM before introducing any additional services in connection with the MOLPoints system;

• MOL AccessPortal must comply with all regulations and guidelines issued by BNM from time to time in connection with the MOLPoints system or offering of e-money. These include:

• active management of the system;

• limiting the maximum value that can be stored by a user in a single MOLPoints account to MYR1,500, which was increased from MYR500 pursuant to the conditional approval of BNM granted to us in April 2015;

• prohibiting credit facilities from being granted to any users of the system;

• prohibiting transfers between accounts;

• presenting BNM with an annual audited report by an approved auditor with respect to the effectiveness of the risk management and internal controls and implementation of and conformity to policies, procedures and standards;

• preparing clear and concise terms and conditions in connection with the system for all existing and potential users;

• MOL AccessPortal must make available statistics and other information in connection with the operation of the system in the form required by BNM; and

• BNM reserves the right to reassess the approval at any time and check the premises, equipment, machines, books or other documents, statement of accounts or transactions in connection with the system.

There are two types of e-money schemes in Malaysia, namely small and large e-money schemes. Large e-money schemes are schemes with a wallet limit exceeding MYR200 or where the average outstanding e-money liabilities for six consecutive months amounts to MYR1 million or more. Small e-money schemes are schemes with a wallet limit not exceeding MYR200 and where the outstanding e-money liabilities are less than MYR1 million. The MOLPoints system is operated as a large e-money scheme with an approved wallet limit of MYR500. Large e-money schemes are subject to more stringent regulation in the form of higher capital requirements (see “—Capital Requirements”), the need to establish a trust account in which user funds are to be deposited (see “—Trust Account Requirements”) and the obligation to submit independent audit reports in respect of the scheme as and when required by BNM.

MOL AccessPortal is subject to the requirements of the FSA and corresponding regulations, guidelines, directions and standards that may be imposed by BNM from time to time. In particular, it is required to comply with the principles and minimum standards contained in the Guidelines on Electronic Money, or the E-Money Guidelines, which are discussed below under “—Governance Requirements.”

In response to a supervisory visit by BNM in 2013, MOL AccessPortal engaged an independent third party to assess its compliance with the E-Money Guidelines in the last quarter of 2013. Based on the ongoing implementation of new processes and safeguards, the assessment concluded that MOL AccessPortal is in compliance with the E-Money Guidelines.

Capital Requirements

MOL AccessPortal is required to maintain, at all times, minimum shareholders’ funds unimpaired by losses of MYR5 million or 8% of its monthly average outstanding e-money liabilities in the preceding six months, whichever is higher.

Trust Account Requirements

Under the FSA, an e-money issuer is required to keep funds collected from users in exchange for the e-money issued in an account of a licensed bank separate from its own account. Such funds are to be held in trust by the issuer for the benefit of its users. However, issuers of large e-money schemes are subject to more stringent requirements and are required to deposit user funds collected in a trust account established in accordance with the Trustee Act of 1949. In satisfaction of this requirement, MOL AccessPortal maintains an account with Maybank Trustee Berhad, and the account maintains the cash equivalent of 1.2 times the unutilized MOLPoints at the end of every month. These funds can only be used to refund users and pay merchants at the user’s request.

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Unclaimed Monies Requirements

If a registered MOLPoints account remains dormant for not less than seven years, MOL AccessPortal is required to keep a record of any unclaimed monies under the account and submit such record together with the unclaimed monies to the Registrar of Unclaimed Moneys in accordance with the Unclaimed Moneys Act of 1965.

Governance Requirements

The FSA provides that BNM may specify standards for, among other things:

• promoting the safety, integrity, efficiency or reliability of payment systems and designated payment instruments (including standards to facilitate interoperability, technical specifications and security standards);

• protecting the interest of current or prospective users and participants of payment systems;

• prudential matters including capital adequacy, liquidity, corporate governance, risk management, related party transactions, maintenance of reserve funds, and safeguards to prevent an institution from being used for criminal activities; and

• business conduct to ensure that the issuer/operator is fair, responsible and professional when dealing with users, including standards relating to the provision of information to users that is accurate, clear, timely and not misleading, the fairness of contractual terms and complaints and dispute resolution mechanisms.

An issuer/operator and its directors and officers are required to comply with these standards at all times and, where appropriate, ensure that its internal policies and procedures are consistent with such standards.

Under the FSA, issuers of a designated payment instrument (including e-money issuers) are required to establish:

• rules, procedures and requirements setting out the rights and liabilities and any other obligations of the issuer and users (including the risks that the users may incur);

• measures to ensure the safety, security and operational reliability of the designated payment instrument (including contingency arrangements); and

• measures to ensure the prudent management of funds collected from users (including measures to ensure that such funds are always available for repayment to users).

The E-Money Guidelines further elaborate on the standards to be complied with specifically in the context of the issuance of e-money. These include the need to:

• establish adequate governance and operational arrangements which are effective and transparent, to ensure the continued integrity of its e-money scheme;

• ensure proper risk management is in place by establishing appropriate risk management infrastructure and processes (for example, ensuring that adequate security and internal controls are implemented to minimize fraud and operational disruptions);

• ensure that the risks of using e-money, and the rights and responsibilities of all users and merchants are clearly defined and disclosed, and that a system to address user complaints or questions is implemented;

• ensure prudent management of user funds, including ensuring that such funds are deposited and managed separately from the issuer’s working capital funds;

• ensure timely refunds of any e-money balances to users (for example, if users wish to close their accounts); and

• implement adequate measures to prevent the use of e-money for money laundering, and ensure compliance with other statutory requirements.

Unless BNM approves otherwise, the Chief Executive Officer of an e-money issuer shall have his principal or only place of residence within Malaysia and shall devote the whole of his professional time to the service of the issuer. MOL AccessPortal currently satisfies this requirement. It is a new requirement under the FSA that the prior written approval of BNM be sought before an e-money issuer can establish or acquire a subsidiary in or outside Malaysia or acquire or hold any material interest in any corporation.

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Reporting Requirements

MOL AccessPortal is required to provide BNM certain reports in accordance with periodic reporting requirements. This includes the submission of annual audited financial statements no later than three months after its financial year end, and a monthly statistical report on the operation of its e-money scheme no later than the 15th day of the following month. Under the FSA, it is also required to make public its financial statements from time to time subject to any standards that may be specified by BNM.

BNM also has broad powers to request any document or information required for the purposes of exercising its powers or the performance of its functions under the FSA or any other law; examine, without any prior notice, the business and affairs of an e-money issuer; and if it thinks appropriate, issue written directions to an e-money issuer to require it to cease or refrain from committing an act or to do an act which is required to, among others, safeguard the safety, efficiency and reliability of the relevant payment instrument.

Where BNM is of the view that an e-money issuer has breached the FSA, has failed to comply with BNM’s directions, has insufficient assets or capital to give adequate protection to its users, or is likely to become insolvent, it may apply for a court order to appoint a receiver manager to manage the whole or part of the issuer’s business.

Provision of Merchant Acquiring Services

MOLPay is operated by MOLPay Sdn. Bhd. MOLPay Sdn. Bhd. was acknowledged by BNM as an operator of a payment system that provides merchant acquiring services in January 2012 and continues to be recognized by BNM as a registered merchant acquirer under the FSA. The MOLCube mobile payment system is intended to be operated by MOLCube Sdn. Bhd. MOLCube Sdn. Bhd. was acknowledged by BNM as an operator of a payment system that provides merchant acquiring services in May 2013 and will continue to be recognized by BNM as a registered merchant acquirer under the FSA once it has notified BNM in writing of the commencement date of its business. MOLPay Sdn. Bhd. is (and MOLCube Sdn. Bhd., once it commences business will be) subject to the requirements of the FSA and corresponding regulations, guidelines and standards that may be imposed by BNM from time to time.

Governance Requirements

The standards that may be imposed by BNM under the FSA to e-money issuers generally apply equally to MOLPay Sdn. Bhd. and MOLCube Sdn. Bhd. (once it commences business) as merchant acquirers.

Reporting Requirements

BNM has broad powers to request any document or information required for the purposes of exercising its powers or the performance of its functions under the FSA or any other law. BNM’s broad supervisory powers also empower it to, without any prior notice, examine the business and affairs of merchant acquirers.

Anti-Money Laundering and Anti-Terrorism Financing

The Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act of 2001, or AMLATFA, prohibits money laundering and terrorism financing activities. Under the AMLATFA, “reporting institutions” have additional responsibilities to monitor, report and prevent such activities. Reporting institutions cover a broad scope of companies which include issuers of designated payment instruments and payment system operators.

MOL AccessPortal (as an issuer of e-money) and MOLPay Sdn. Bhd. (as a merchant acquirer) and MOLCube Sdn. Bhd. (as a merchant acquirer once it commences business) are considered “reporting institutions.” As reporting institutions, our obligations include, among others, record-keeping, reporting suspicious transactions to BNM, identification of account holders when conducting business transactions (“customer due diligence”) and establishing compliance programs with the aim to guard against any offense under the AMLATFA.

These obligations are further elaborated on in the Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT)—Electronic Money and Non-Bank Affiliated Charge and Credit Card (Sector 4) Guidelines, or the Guidelines, and circulars issued by BNM from time to time. The Guidelines adopt a comprehensive risk-based approach in managing money laundering and terrorism financing risks and apply equally to reporting institutions and their branches and subsidiaries. One of the main focuses of the Guidelines is “customer due diligence” which needs to be conducted when establishing business relations; a customer’s wallet size is equivalent to MYR5,000 and above; a customer conducts any reload, usage or withdrawal transaction amounting to MYR3,000 and above; providing wire transfer services; the reporting institution has any suspicion of money laundering and terrorism financing, regardless of the amount; or the reporting institution has any doubt about the veracity or adequacy of previously obtained information.

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Under the Guidelines, the level and frequency of due diligence required should be commensurate with the level of money laundering and terrorism financing risk posed by the customer based on the risk profiles and nature of the transactions. AMLATFA provides for substantial monetary and imprisonment penalties for the failure to comply with the preventive measures laid down in AMLATFA. Similarly, failure to comply with the Guidelines may be an offense.

Reporting institutions must closely monitor their foreign branches and subsidiaries which operate outside of Malaysia in jurisdictions with inadequate anti-money laundering and anti-terrorism financing regimes. Reporting institutions must ensure that these foreign branches and subsidiaries apply measures consistent with the AMLATFA and the Guidelines to the extent permitted in the host jurisdiction, even where the host jurisdiction’s anti-money laundering and counter financing terrorism requirements are less stringent. If this is not permitted, the reporting institution is required to apply appropriate additional measures to manage the money laundering and terrorism financing risks and report the gaps and additional measures implemented to manage the risks identified from these gaps to the Malaysian parent company.

In February 2014, the Financial Action Task Force released a statement identifying jurisdictions having “strategic deficiencies” in their anti-money laundering and anti-terrorism financing regimes and which have not made sufficient progress in addressing these deficiencies. Turkey and Indonesia have been identified by the Financial Action Task Force as jurisdictions having strategic deficiencies.

In response to a statement issued by the Financial Action Task Force, BNM issued a circular advising that reporting institutions are required to conduct enhanced customer due diligence for business relationships and transactions with any person from countries identified by the Financial Action Task Force as having strategic deficiencies where money laundering and terrorism financing risks are assessed as higher risk. This would include obtaining additional information on the customer over and above the standard customer due diligence information, inquiring about the customer’s source of wealth or source of funds, obtaining the approval of senior management (if appropriate) before establishing the business relationship and submitting to BNM annually a report with a summary of exposure to customers from such countries.

Foreign Exchange Control

The exchange control regime in Malaysia is regulated by the FSA and the Foreign Exchange Administration rules, or the FEA, issued by BNM. The FSA, together with the FEA, support the monitoring of capital flows into and out of the country to preserve its financial and economic stability and are administered by the FEA Department of BNM. The FSA and FEA provide for monitoring and regulating both residents and non-residents.

Under the current FEA, all payments made between our Malaysian subsidiaries and Malaysian residents (such as users, merchants, or distributors) must be paid in Malaysian Ringgit subject to limited exceptions. Payments made between our Malaysian subsidiaries and non-Malaysian residents may be made in either Malaysian Ringgit if for prescribed purposes such as the settlement of trade in goods or services or foreign currency, except for the currency of Israel, subject to limited exceptions.

Non-residents are free to repatriate any amount of funds from Malaysia in foreign currency at any time, including capital, divestment proceeds, profits, dividends, rent, fees, and interest arising from any investment in Malaysia, subject to any withholding tax. Unless otherwise restricted by contractual undertakings, and subject to applicable laws, our Malaysian subsidiaries are at liberty to distribute dividends to us in foreign currency without having to seek prior approval from BNM.

As a non-bank e-money issuer, MOL AccessPortal is required to obtain written approval from BNM to carry on cross border transactions. BNM has granted us a general approval to carry on all activities requiring BNM’s permission under the FSA for as long as we are accorded MSC Malaysia status, subject to certain conditions.

Consumer Protection and Electronic Commerce

The principal consumer protection law in Malaysia is the Consumer Protection Act of 1999, or the CPA, which generally applies to all goods and services offered to consumers in trade for personal, domestic or household purposes, including trade transactions conducted through electronic means. It is not possible to contract out of the minimum standards contained in the CPA.

In relation to the provision of services, the CPA implies warranties as to reasonable care and skill, fitness for a particular purpose, reasonable time of completion and reasonable price. The CPA also prohibits misleading and deceptive conduct, the making of false or misleading representations and the imposition of unfair contract terms. Similarly, the Trade Descriptions Act of 2011 prohibits false and misleading statements as to services. We are required to abide by these standards as part of our business.

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Failure to comply with applicable consumer protection laws could expose us to civil or criminal liabilities. Our directors and officers may also be held liable in the event of such non-compliance. Where users have a right of redress against us, we may be required to remedy the non-compliance or compensate the user for losses or damages suffered by the user as a result of such non-compliance. Users may also lodge a complaint with the Tribunal for Consumer Claims, which has the jurisdiction to hear consumer claims where the total amount of the claim does not exceed MYR25,000.

Apart from the CPA, the FSA also provides for consumer protection. As entities regulated under the FSA, MOL AccessPortal, MOLPay Sdn. Bhd. and MOLCube Sdn. Bhd. (once it commences business) are subject to these requirements and are prohibited from, among others, engaging in misleading or deceptive conduct; exerting undue pressure, influence or coercion in the provision of e-money or payment systems services; demanding payments from users for unsolicited services or products; and colluding with any other person to fix or control the features or terms of e-money or payment system services to the detriment of the users, save where such terms that have been approved by BNM.

As our business is predominantly based online, we are also subject to laws governing electronic contracts, which are recognized and enforceable under Malaysian law, subject to the parties having satisfied the requisite elements of a contract. To ensure clear and unequivocal acceptance of our online contracts, we use click-to-accept contracts.

Privacy and Data Protection

As entities regulated under the FSA, MOL AccessPortal, MOLPay Sdn. Bhd. and MOLCube Sdn. Bhd. (once it commences business) are required to keep all documents or information relating to the affairs or account of any user confidential, subject to limited exceptions such as disclosures made to BNM and other regulatory authorities and disclosures required in connection with legal proceedings, including bankruptcy or winding-up.

We are subject to laws and regulations regarding data privacy and the protection of data pursuant to the Personal Data Protection Act of 2010, or the PDPA, which came into force in November 2013. The PDPA requires that an individual must consent to the processing and disclosure of his/her personal data. The term “processing” is widely defined to include the act of collecting, recording, holding, or storing personal data including the organization, adaptation, alteration, retrieval, consultation, utilization, disclosure, alignment, combination, correction, erasure, or destruction thereof. The Personal Data Protection Regulations of 2013 provide that consent may be obtained in any form that can be recorded and maintained properly by the user of the personal data, which would include electronic consent acceptances. The processing of “sensitive” personal data, which has been defined by the PDPA to mean any personal data consisting of information as to the physical or mental health or condition of an individual, his/her political opinions, his/her religious beliefs or other beliefs of a similar nature, or the commission or alleged commission by him/her of any offense requires the explicit consent of the individual. We do not process sensitive personal data as part of our business.

Data users are required to provide written notice of the personal data being processed, and such notice shall include, among others, a description of the personal data being processed, the purpose for which the personal data is being processed, the source of the personal data, the class of persons to whom the personal data will be disclosed to, whether it is obligatory or voluntary for the individual to supply the personal data and the individual’s rights to request access to, correct or limit the processing of the personal data. The notice must be provided in both English and the national language of Bahasa Malaysia and the individual shall be provided with a clear and readily accessible means to exercise his choice, where necessary, in the English and national languages.

In processing personal data, we are also required to take steps and implement measures to protect the personal data from loss, misuse and modification and maintain the integrity of the personal data processed. The personal data processed should not be kept longer than is necessary for the fulfillment of the purpose for which it was collected and generally cannot be transferred offshore without the consent of the individual to whom it relates. We do not transfer personal data offshore. Failure to comply with the obligations under the PDPA may lead to civil or criminal liabilities. Directors and officers of the data user may also be held liable in the event of such non-compliance.

Dividend Distribution

The principal legislation governing the distribution of dividends of a Malaysian company is the Companies Act 1965, or the CA. Under the CA, a Malaysian company is only permitted to pay dividends out of:

• profits, if any, determined in accordance with Malaysian accounting standards and regulations; or

• the share premium account, if any, if such dividends are satisfied by the issue of shares to members of the company.

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Thailand

Foreign Business Act

In Thailand, foreign individuals and foreign legal entities conducting business must comply with the Foreign Business Act B.E. 2542 (A.D. 1999), or the FBA, which has been in force since March 3, 2000. The purpose of the FBA is to prohibit or restrict foreigners from engaging in certain businesses in Thailand, including the e-money service and game publishing businesses that we operate in Thailand, and, to this end, foreigners are required to obtain a Foreign Business License in accordance with the FBA before conducting restricted businesses. Foreigners operating a restricted business without the necessary permission may be subject to imprisonment, a fine or both, in addition to the cessation or dissolution of the business or the foreigner’s shareholding or partnership in the business. Furthermore, it is illegal for a Thai national or legal entity to hold shares as a nominee for or on behalf of a foreigner in order to assist or enable the foreigner to conduct businesses which are prohibited or restricted under the FBA. In such cases, both the Thai national and the foreigner may be subject to imprisonment not exceeding three years, a fine of THB100,000-1,000,000, or both, and the court will order cessation of the assistance, shareholding or partnership of the Thai national, as applicable. Failure to comply with the court’s order may result in a fine of THB10,000-50,000 per day throughout the period of violation.

Regulation on Electronic Payment Service Businesses

Thai law regulates certain electronic payment service businesses. The primary relevant laws and regulations include, for example, the Electronic Transactions Act B.E. 2544 (2001); the Royal Decree Regulating Electronic Payment Service Businesses B.E. 2551 (2008) and the Notification of the Ministry of Finance: Business that Requires a Permit According to Section 5 of the Notification of the Revolution Council No. 58 (Business of Electronic Money Card). Regulated electronic payment service businesses include, for example, the provision of e-money (through either closed-loop, semi-closed loop, or open-loop systems), clearing services, balance settlement services and electronic payment services via any equipment or network. Business operators of regulated electronic payment service businesses are required to notify or register with the Bank of Thailand, or the BOT, or obtain a license from the Electronic Transactions Commission of Thailand, or the ETC, or the Ministry of Finance, or the MOF. Business operators of regulated electronic payment service businesses also need to comply with the requirements on business conduct imposed by the relevant regulators. Business operators who provide services that are not considered regulated electronic payment service businesses are not required to notify or register with the BOT or obtain a license from the ETC or the MOF and do not need to comply with the requirements on business conduct imposed by these regulators. We operate MOLPoints as a closed-loop e-money service in Thailand, which in general requires notification to the BOT and compliance with relevant regulations. However, as confirmed in a letter from the BOT, our closed-loop e-money service is exempted from these requirements because it is provided to the customers for the convenience of the customers only without seeking profits, and the e-money is used for payment of specific goods or services of the e-money service provider’s own business.

As an e-money distributor, we purchase e-money from other companies for sale to customers via our website and other distribution channels. Distribution of e-money itself is not a regulated electronic payment service business under the electronic payment laws and regulations and, therefore, we are not required to notify, register or obtain a license from the e-payment business regulators and comply with the corresponding regulations governing e-payment business regulators.

Information Technology/Communication

Distribution of game recordings (e.g. game CDs) is required to obtain a license issued under the Motion Picture and Video Act B.E. 2551. These game recordings must also comply with specific label requirements under the Consumer Protection Act B.E.2522. If the game recordings or other relevant products are to be sold and offered for sales through a website, an operator of the website must be registered as a direct marketing operator pursuant to the Direct Sales and Direct Marketing Act B.E. 2545 and seek for a Commercial Registration as an e-commerce operator under the Commercial Registration Act B.E. 2499 prior to commencing operations and comply with all other requirements under these statutes.

For the provision of a computer network for its own employees or acting as a service provider for online games or e-commerce for its customers, the provider is required to keep computer traffic data for not less than ninety (90) days from the day the mentioned traffic data enter into its system under the Act governing Commission of Offences Relating to Computer B.E. 2550.

Board of Investment, or BOI, Thailand

Under Investment Promotion Act B.E. 2520, or IPA, an investor may apply for investment incentives such as tax benefits under the IPA. One of our subsidiaries in Thailand, MOL Solutions Co. Ltd., has been granted various privileges from BOI, such as the right to employ foreign experts and certain tax exemptions. Such incentives are granted to us by way of a BOI certificate which contains conditions which must be complied with to maintain the grant. The failure to do so will result in the revocation, in total or in part, of the BOI certificate and certain penalties related to such revocation, such as it shall be treated as if the investor had never been granted an exemption or reduction of taxes and duties and shall be required to pay taxes and duties computed on the basis of the condition and price of the items and the rate of taxes and duties thereof, as existed on the date of the relevant import or export. As for the reduction of the granted taxes and duties, the outstanding balance of the full amount of taxes and duties as computed above shall be paid.

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Turkey

Payment and Settlement Infrastructure in Turkey

In June 2013, the Central Bank of the Republic of Turkey, or the Central Bank, issued new legislation relating to the Payment Services and Electronic Money Institutions Law, or the Payment System Law, and committed to issue certain “secondary” regulations within one year. In line with the relevant commitment, the Central Bank has recently issued the By-Law Regarding Activities of Payment and Securities Systems, or the By-Law, effective as of June 28, 2014. Within one year from the effective date of the By-Law, each system operator, payment institution and electronic money institution must obtain permission from the Banking Regulation and Supervision Agency, or the BRSA. Certain of our activities in Turkey fall under the scope of the relevant “payment service provider” definition. Accordingly, we will be required to apply for such permission in line with the By-Law and if we fail to do so we will not be authorized to operate any electronic payment services.

The licensing and supervision of payment institutions and electronic money institutions is carried out by the BRSA. The Central Bank’s permission shall be sought to act as a system operator. Although the institution applying to act as a system operator fulfills all the required conditions and documents, the Central Bank is entitled to withhold permission to establish a new system if it finds out that a new system may have negative implications for financial stability. The Central Bank shall have the authority to oversee such systems, and system operators may be required to submit records, information and documents, including confidential material, to the Central Bank in accordance with the principles and procedures to be set by the Central Bank operators.

If breaches in system operation are detected by the Central Bank, the Central Bank shall have the authority to (i) give the system operator a reasonable time period to eliminate the cause of breach; (ii) require the system operator to apply measures such as collateral pools and guarantee mechanisms to ensure settlement; (iii) require certain participants to be banned from the system; (iv) temporarily suspend an operation license until the problem is resolved; (v) revoke an operation licenses; and (vi) temporarily take over the management of the system operator to ensure smooth and uninterrupted execution of transactions in the system.

Governance of Mobile Payment Services

As mobile payment transactions are utilized in cooperation with global systems for mobile communications, or GSM, GSM operators are bound by a strict legal regime. In this respect, GSM operators can only execute mobile payment service agreements with companies that are qualified to be integrated in the mobile payment service of the relevant GSM operator in accordance with the applicable legal and technical standards. We have executed mobile payment service agreements with three GSM operators in Turkey, including Turkcell and Avea and are in compliance with the relevant standards.

Protection of Personal Data

There is no specific law governing personal data privacy in Turkey, though other legislation deals with the protection of personal data. Although there is a draft Law Concerning Protection of Personal Data, or the Draft Law, that contemplates the establishment of a Personal Data Protection Authority, neither the Draft Law nor the Personal Data Protection Authority has been enacted.

The Turkish Civil Code sets forth a number of provisions to protect the privacy of personal information. Pursuant to Article 24 of the code, an individual whose personal rights are unjustly violated may bring a civil action to prevent such violation and/or seek compensation for damages arising from such violation. A consumer’s consent is required to process their personal information.

The Turkish Criminal Code, or Criminal Code, also sets forth a number of provisions specifically dealing with the protection of personal data. The Criminal Code states that the unlawful storage of personal data is subject to a penalty of imprisonment from six months to three years. In the event of unlawful transmission or reception of personal data, the penalty is increased to imprisonment from one year to four years. Furthermore, those who do not delete or destroy personal data in spite of the expiration of the stipulated time period in the relevant laws for the maintenance of such data shall be punished by imprisonment from six months to one year.

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Anti-Money Laundering Regulations

The Prevention of Laundering Proceeds of Crime Law was enacted in 2006. The law sets out a “customer identification” obligation for “obliged parties,” which include our subsidiaries in Turkey. Obliged parties must identify the persons carrying out transactions and the persons on behalf or account of whom the transactions are conducted within or through obliged parties before the transactions are conducted. The Ministry of Finance has the authority to determine the required documents for customer identification. The types of transactions necessitating customer identification, monetary limits on such transactions and other related principles and procedures shall be determined by regulation. In the event there is any information, suspicion or reasonable grounds to suspect that the asset which is the subject of the transactions carried out or attempted to be carried out within or through the obliged parties was acquired through illegal ways or used for illegal purposes, the obliged parties shall report these transactions to the Presidency of the Financial Crimes Investigation Board.

Anti-Terrorism Financing Regulations

The Law on the Prevention of the Financing of Terrorism was enacted in 2013. According to Article 3 of the law, it is forbidden to provide or collect funds for the perpetration of any act that is intended to cause death or serious bodily injury for the purpose of intimidating or suppressing a population or compelling a government or an international organization to do or to abstain from doing any act, in addition to certain acts that are specified in various other pieces of legislation and conventions.

Exchange Regulations

Decree No. 32 on the Protection of the Value of Turkish Currency is the main legal document that regulates capital flows in domestic and foreign currencies, conditions on using foreign exchange and foreign currency-indexed credits. The decree entered into force in 1989 and has considerably liberalized capital movements in line with the general policy of financial liberalization at the time.

Residents in Turkey are allowed to accept payment in foreign currency from non-residents for the transactions that they conduct in Turkey in favor of such non-residents. Non-residents are allowed to purchase foreign exchange from banks, authorized establishments, precious metals brokerage institutions and intermediary institutions.

Residents and non-residents in Turkey may freely transfer foreign exchange abroad through banks. The Ministry of Finance is authorized to determine other establishments that are allowed to transfer foreign exchange abroad. Banks must report foreign exchange transfers abroad (including transfers made from foreign exchange deposit accounts), excluding payments for exports, imports and invisible transactions that are above $50,000, or its equivalent in another foreign currency within a thirty-day period starting from the date of transfer.

Philippines

Consumer Protection Laws

Our operating subsidiary in the Philippines, Uniwiz Trade Sales, Inc., or Uniwiz, distributes e-vouchers for pre-paid mobile airtime and digital content including MOLPoints through the MOLReloads platform. The e-vouchers (which are referred to as “e-pins” and “e-loads” by Uniwiz in its operations) are distributed by Uniwiz through dealers and retailers. The e-vouchers, being consumer goods, are covered by consumer protection laws in the Philippines, primarily the Consumer Act of the Philippines.

Data Privacy

Under the Data Privacy Act of 2012, or DPA, personal information refers to any information, whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual.

Generally, personal information may only be processed upon consent by the relevant party. Processing refers to any operation, or any set of operations performed, in respect of the personal information including, but not limited to, the collection, recording, organization, storage, updating or modification, retrieval, consultation, use, consolidation, blocking, erasure or destruction of the personal information data.

Those who control personal information are also mandated to implement measures for the protection of personal information. Uniwiz obtains personal information of its dealers, retailers and customers in the course of its dealings in the Philippines and as such is subject to the DPA.

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Singapore

A MOLPoints registered account is a stored value facility, or SVF, pursuant to the Payment Systems (Oversight) Act (Cap. 222A of the Republic of Singapore), or PSOA. The PSOA is administered by the Monetary Authority of Singapore, or MAS. An “SVF” is defined in the PSOA as: (i) a facility (other than cash), whether in physical or electronic form, which is purchased or otherwise acquired by a user to be used as a means of making payment for goods or services up to the amount of the stored value that is available for use under the terms and conditions applying to the facility, and payment for the goods or services is made by the holder of the stored value in respect of the facility (rather than by the user); or (ii) all the facilities referred to in paragraph (i) provided under the same terms and conditions, while the “holder” of an SVF is defined as the person who holds the stored value and makes payment for goods or services referred to in the foregoing definition of SVF. Under the PSOA we may not directly or indirectly, alone or together with any person over whom we have control or influence, hold stored value in stored value facilities in excess of S$30 million, unless we are an approved holder of a widely accepted SVF and an approved bank has undertaken to be fully liable for the stored value under such SVF. As a holder of an SVF, we are strongly encouraged to adopt and implement the standards set out in the Stored Value Facility Guidelines issued by the MAS, taking into consideration the nature, size and complexity of our SVF. We are required to make certain disclosures to our users in Singapore, and we are subject to certain restrictions on advertising.

The PSOA provides for the oversight of payment systems (being a funds transfer system or other system that facilitates the circulation of money, and includes any instruments and procedures that relate to the system), and matters connected therewith. Under the PSOA, the MAS has broad powers to require the parties involved to provide to the MAS all such information relating to the payment system as may be required by the MAS.

Vietnam

Law on Information Technology

The Vietnamese Law on Information Technology, or the IT Law, provides for the rights and obligations of agencies, organizations and individuals which are engaged in information technology application and development activities. This law applies to Vietnamese and foreign organizations and individuals engaged in information technology application and development activities in Vietnam, including our company. Specifically, we are licensed to conduct the following business activities under the IT Law: produce software, provide software services (excluding distribution and supply of software products), provide consulting services on quality management of computers or computer systems, provide consulting, designing and developing services regarding software solutions (excluding construction design service), design websites, provide management and consulting services (excluding legal, financial, accounting, auditing, tax and securities consulting services) and provide data exploitation and data processing services in the field of information technology.

Cashless Payment

We currently provide intermediary payment services in Vietnam which are regulated pursuant to Vietnamese Decree No. 101. According to Decree No. 101, providers of intermediary payment services are obliged to report and supply information to competent state authorities, including the State Bank of Vietnam, or the SBV, in accordance with accounting, statistics and financial regulations. Furthermore, they must immediately report to the SBV upon the occurrence of certain events during the course of operation. Providers of intermediary payment services are also obliged to supply information about transactions and balances in payment accounts to account holders in accordance with agreements between the service provider and account holders.

Law on Anti-Money Laundering

The applicable anti-money laundering regulations in Vietnam are the Law on Anti-Money Laundering and Decree No. 116. We are treated as a financial entity for purposes of these regulations and are required to undertake certain reporting to the SBV. Our anti-money laundering obligations include conducting know-your-client checks, updating client identification information, and reporting high value transactions, suspicious transactions, and transactions that are suspected to relate to terrorism financing based on guidance provided by Decree No. 116. We are also required to inform the SBV and relevant Vietnamese financial institutions if any user is on a list of organizations and individuals involved in terrorism and terrorist financing, which is issued by the Ministry of Public Security, or warning list of organizations and individuals with high risk of money laundering, which is issued by the SBV.

Foreign Exchange Control Regulations

Vietnamese law prohibits all transactions, payment, price listing, advertisement, valuation, agreements and any other similar activities (including conversion or adjustment of price or contractual value) which take place in Vietnam among residents and non-residents from being conducted in foreign currency.

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Law on Protection of Consumers’ Rights

Our users in Vietnam are protected by Vietnamese regulations on consumer rights. We are prohibited from conducting certain activities which may negatively affect user’s rights and benefits. General terms and conditions of services that we apply to our users may be declared invalid in certain circumstances. Under Vietnamese law we are not permitted to revise these terms and conditions without users’ consent.

Regulations on Protection of Personal Data

In general, the data protection regulations in Vietnam restrict the transfer of personal data held by a transferor to another person. The Vietnamese Civil Code provides that prior consent of the subject of the data must be obtained in order to collect and publish private data and information. The Vietnamese Law on Information Technology provides that prior consent of the subject of the data must be obtained before personal information may be collected, processed and/or used in the network environment. The Vietnamese Law on E-Transactions provides that prior consent must be obtained before any person may use, provide or disclose any private information or any information concerning another person that was provided during the course of an electronic transaction. Information obtained in the course of banking and financial operations is prohibited from being disclosed to any third party except in certain circumstances with the approval of the Prime Minister, the Minister of Public Security or the Governor of the SBV.

Decree on Electronic Commerce

We are required to promulgate and publicly post the operational policies of our e-commerce marketplace for Vietnam and actively participate in the resolution of any disputes involving the use of our e-commerce marketplace.

Indonesia

E-money requirements

In April 2009, Bank Indonesia, the central bank of the Republic of Indonesia, issued Regulation No.11/12/PBI/2009 regarding electronic money and Circular Letter No.11/11/DASP concerning non-bank Electronic Money Issuer, or the E-money Regulations. MOLPoints sold in Indonesia are categorized as e-money for purposes of the E-money Regulations, which define e-money as a payment device which meets the following criteria: (i) it is issued on the basis of value previously remitted by the holder to the issuer; (ii) the value of money is kept electronically in media such as a server or chip; (iii) it functions as a payment instrument to the merchant, who is not the issuer of the e-money; and (iv) it is not categorized as a deposit under the banking law.

Relevant (Licensed) Actors in e-money transactions in Indonesia

Other than banks, each of the following persons involved in e-money transactions must be Indonesian limited liability companies licensed by Bank Indonesia.

• Principal, which is a person that manages the system and/or the network between its members, including issuers and acquirers, in e-money transactions where the relationship is based on a written agreement.

• Issuer, which is a person that issues e-money services/products.

• Acquirer, which is a person who cooperates with merchants and processes e-money data issued by other parties.

• Clearing Administrator, which is a person who calculates financial rights and liabilities of each issuer and/or acquirer in relation to e-money transactions.

• Final Settlement Administrator, which is a person responsible for and performs the final settlement of financial rights and liabilities of each Issuer and/or Acquirer in relation to e-money transactions based on the calculations of a clearing administrator.

Because MOL AccessPortal issues MOLPoints on its website and electronic vouchers in the form of PIN codes (which can be used to reload MOLPoints) for purchase by customers in Indonesia and manages the system and/or network for the MOLPoints issued in Indonesia, MOL AccessPortal may be viewed as a principal or issuer of e-money products.

Exemption for E-money Issuer License

Not all non-bank institutions are required to obtain e-money licenses for issuing e-money products. The requirement for a non-bank institution to be licensed by Bank Indonesia is triggered if the non-bank institution manages or is planning to manage floating funds of Rp.1,000,000,000 or more. The floating fund itself is defined as the entire value of e-money which is received by the issuer for the purpose of issuance and/or reloading of the e-money, which still needs to be paid by the issuer to the relevant holder and merchant.

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E-money Licensing Requirement for MOL Indonesia

The E-money Regulations do not specifically require marketers of empty e-money vouchers to obtain a specific e-money license from Bank Indonesia. Thus, we believe that PT MOL AccessPortal is not required to obtain an e-money license from Bank Indonesia to the extent it merely markets empty e-money vouchers to be loaded by MOLPoints which are issued by MOL AccessPortal.

Sanctions

Bank Indonesia could impose administrative sanctions for non-compliance with the E-money Regulations, ranging from warning letters, business suspension to license revocation.

Other Relevant Regulations in Indonesia

Data Centre/Disaster Recovery Centre

Under Government Regulation No. 82 of 2012 on the Implementation of Electronic Systems and Transactions, or GR 82, an operator of electronic systems for public service must have a data centre and disaster recovery centre in Indonesia for law enforcement purposes and protection of Indonesian citizens. While it is not clear whether private parties offer public services, the Ministry of Communications and Informatics is of the view that anything to do with Indonesian citizens is a public service and is proposing to issue a regulation to confirm this position. This regulation is likely to be issued and, as an electronic systems operator, we would be subject to regulations when they come into force.

Data Privacy/Protection

Under GR 82, personal data is defined as data of individuals in which the truthfulness and the secrecy of the data is kept, maintained and protected. The definition is very general and may be interpreted broadly.

For protection of data privacy, electronic systems operators are required to maintain the secrecy, integrity and availability of personal data that is being managed; ensure that the collection and use of personal data is done with the personal data owner’s consent, unless otherwise provided by laws and regulations; and ensure that the use or disclosure of data is done with the personal data owner’s consent, and in accordance with the purpose conveyed to the personal data owner for the data collection.

Anti-Money Laundering

Law No. 8 of 2010 on Prevention and Eradication of Money Laundering Crimes, or the Anti-Money Laundering Law stipulates that financial services providers (such as banks, securities companies, custodians and e-money operators) are obliged to provide certain reports to the Center for Reporting and Analysis of Financial Transactions, or PPATK. Under the Anti-Money Laundering Law, financial services providers must report to PPATK any suspicious financial transaction; any cash transaction of Rp.500 million or more or other currency with equal value, either in one transaction or several transactions within one working day; and any financial transaction involving transfer of funds from and to foreign countries. Further, Presidential Decree No. 82 of 2003 on the Procedures for the Implementation of Authority of the PPATK provides that PPATK may requires financial services providers to provide documents, data, information owned and or controlled by the financial services provider.

Know Your Customer or KYC Principle

Under the Anti-Money Laundering Law, financial services companies, including e-money operators, are required to implement a “KYC” principle whenever they conduct business with customers; there is a financial transaction (whether in Rupiah or foreign currency) which amounts to at least Rp.100,000,000; there is a suspicious financial transaction which may involve money laundering and terrorism financing crimes; or the reporting party (financial services companies) doubts the information reported by its customers. In order to implement these KYC principles, service providers must at least: (i) identify their customers; (ii) verify the data of customers; and (iii) monitor the transactions of customers.

Anti-Terrorism

Anti-Terrorism is regulated under Government Regulation in Lieu of Law No. 1/2002 and the Anti-Terrorism Law. Under the Anti-Terrorism Law there are no reporting requirements for financial institutions. However, a bank or other financial institution may report to the police department any suspicion that a transaction or account is being used to support terrorism. As an issuer of e-money, we would be considered a financial institution that must report such suspicious transactions.

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IDR Transfer Prohibition

Under Bank Indonesia Regulation 7/14/PBI/2005, as amended by Bank Indonesia Regulation No. 14/10/PBI/2012 on Limitations of IDR Transactions and Provision of Credit in Foreign Currencies by Banks, Indonesian banks, including branches of offshore banks in Indonesia, are prohibited from performing certain IDR transactions with non-resident individuals and entities. These prohibited activities include, among others, (i) transfers to the IDR account of such non Indonesian residents in onshore banks, for transactions not related to economic activities in Indonesia; (ii) transfers to the IDR account of such non-Indonesian residents in offshore banks, whether or not for transactions related to economic activities in Indonesia; and (iii) transfers for settlement of the purchase of foreign currencies against IDR at offshore banks and or booked at IDR accounts at offshore banks. However, the transfer of foreign currency to an account of a non-Indonesian resident in offshore banks is not a prohibited activity and there are no restrictions on the repatriation of foreign currency in such circumstances.

United States

Various laws and regulations in the United States, including the Bank Secrecy Act, the Dodd-Frank Act, the USA Patriot Act, and the Credit Card Act, impose certain procedural and reporting requirements on companies that are financial institutions or that provide financial products and services. Under these laws and regulations, financial institutions are broadly defined to include money services businesses such as money transmitters, check cashers, and sellers or issuers of stored value. Requirements imposed on financial institutions under these laws include customer identification and verification programs, record retention policies and transaction reporting.

Money services regulations

The Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, requires the registration of certain money services businesses with the Treasury Department and reporting and record keeping of various transactions. Registered money services businesses must report suspicious transactions involving a payment or series of related payments of $2,000 or more and obtain and keep more detailed records on the senders and recipients in transfers of $3,000 or more. We believe we are not subject to these regulations because, as a provider of a closed-loop system with a transaction limit of less than $1,000, we are exempt from registration with FinCEN as a “provider of pre-paid access.”

Anti-money laundering, anti-terrorism and sanctioned countries

The U.S. Patriot Act requires financial institutions to verify the identity of any person seeking to open an account to the extent reasonable and practicable, maintain records of the information used to verify a person’s identity, including name, address and other identifying information, and consult lists of known or suspected terrorists or terrorist organizations provided by United States government agencies to determine whether a person seeking to open an account appears on any such list. In general, the U.S. Patriot Act requires financial institutions to make certain efforts to prevent the use of their payment processing systems to facilitate money laundering and the financing of terrorist activities, including, for example, the designation of a compliance officer, training of employees, adoption of internal policies and procedures to mitigate money laundering risks, and periodic audits.

As a pre-paid virtual currency system for online game players and entertainment users, we do not believe that we are a financial institution subject to the anti-money laundering laws and regulations. However, it is possible that our closed-loop gift card and virtual currency system could be considered a financial product and that we could be deemed a financial institution subject to applicable United States federal or state regulation under certain interpretations of laws governing businesses such as money transmitters, check cashers, and sellers or issuers of stored value. Although we do not believe we are subject to anti-money laundering regulations, we have implemented internal policies and procedures to mitigate money laundering risks.

Our United States operations are subject to increasingly expanding legal and regulatory requirements intended to help detect and prevent terrorist financing, fraud and other illicit activity. We are required to comply with regulations imposed by the United States Department of the Treasury Office of Foreign Assets Control, or OFAC, which prohibit or restrict financial and other transactions with specified countries, their governments and designated individuals and entities, such as terrorists and narcotics traffickers. As a closed-loop gift card and virtual currency system, our primary responsibilities in this area relate to the vetting and monitoring of merchants in our direct merchant portfolio. We have developed and implemented policies and procedures that are designed to comply with OFAC requirements and comparable sanctions programs.

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Data protection and information security

Various federal and states laws and regulations in the United States address matters related to data protection, information security, breach notification, marketing and other activities related to the processing, storage, and use of data, among other things. In the United States, one key source of regulation regarding data privacy for financial institutions is Title V of the Gramm-Leach-Bliley Act, or GLBA, which regulates such institutions’ handling of nonpublic personal data about consumers, and generally requires a financial institution to provide customers and/or consumers in certain circumstances with a privacy notice with specified content, to provide choices regarding certain sharing of nonpublic personal data with unaffiliated third parties, and to maintain appropriate security controls for the protection of nonpublic personal data. Beyond the GLBA, financial institutions must also address other privacy laws and regulations in the United States. For example, the Fair Credit Reporting Act governs the use and disclosure of information in consumer reports provided by consumer reporting agencies and the Federal Trade Commission. In addition, there are a number of laws that may impact marketing activities, including the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud Abuse Prevention Act, the CAN-SPAM Act and the California Financial Information Privacy Act. There may also be content requirements for notices to customers and/or consumers under certain state laws, including those in California. Furthermore, virtually all states have established affirmative obligations to protect the security of financial information and/or duties to notify in certain incidents related to unauthorized access or acquisition of personal data and certain states may have requirements for disclosures related to certain website activities. In addition, the United States Federal Trade Commission and other federal and state regulators have regulatory powers related to data protection, information security and consumer protection.

As a prepaid virtual currency system for online game players and entertainment users, we may be, or may become, subject to such laws. We post our Terms of Service and Privacy Policy on our website where we set forth our practices concerning the use, transmission and disclosure of user data.

Taiwan

Because MOLPoints in Taiwan are offered to redeem the points issued by third party online game providers, there is a risk that the MOLPoints business model may be considered to be operating as an “open-loop” system from the relevant authority’s perspective, in which case a license is required pursuant to the applicable law. However, subject to the competent authority’s interpretation, various factors including the cooperation methods between us and the contracting online game providers may be used to advance a position that the MOLPoints business in Taiwan operates as a “closed-loop” system.

Under a “closed-loop” model, no license is required. However, we are required to comply with the Mandatory Provisions to be included in and Prohibitory Provisions of Standard Form Contract for Online Game Points (Cards), or the Provisions. According to the Provisions, the game point cards and the purchase webpage must include: (i) certain information regarding the issuer and the game points card; (ii) a guarantee of the issuer’s performance; and (iii) the telephone number, website address, and email address for consumer complaints. Moreover, the game point cards and the purchase webpage cannot include provisions that provide: (i) a deadline of use or registration; (ii) that the unused point balance cannot be consumed; (iii) a waiver of the obligations to provide the merchandise or service or charging extra fees; (iv) unreasonable restrictions on use such as restricted locations or restricted scope; (v) that the issuer can unilaterally terminate or rescind the contract; (vi) a waiver of the issuer’s intentional or negligent liabilities; (vii) contents violating an imperative or prohibitive provision of law, or obviously unfair or deceptive; or (viii) that the advertisements are for reference only.

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C. Organizational Structure

Corporate Structure

The following diagram illustrates our corporate structure, including our beneficial interests in our principal operating subsidiaries:

Note:

(1) For each of our subsidiaries incorporated in Thailand, our beneficial ownership exceeds our direct voting interest, as our beneficial ownership in such subsidiaries is held in part through our holdings in other entities that hold direct and indirect interests in such subsidiaries. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business —Our subsidiaries in Thailand are subject to restrictions on foreign ownership of their shares under Thai law.”

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D. Property, Plants and Equipment.

Our principal executive offices comprise approximately 2,322 square meters of office space located at Berjaya Times Square in Kuala Lumpur, which we have leased from an entity controlled by our major shareholder through 2017. Our headquarters has been at this location since 2008. We also own or lease various properties for our local offices in Thailand, Turkey, the Philippines, Singapore, Vietnam, Indonesia and Australia. Our leased properties mainly consist of office premises, a portion of which are leased from related parties.

We believe our existing premises are adequate for our current business operations and that additional office space can be obtained on commercially reasonable terms to meet our future requirements.

The following table sets forth certain information with respect to our owned and leased properties as of December 31, 2015.

Location	Size (sq. m.)	Use	Owner or Tenant
Berjaya Times Square, No. 1, Jalan Imbi, 55100 Kuala Lumpur, Malaysia
Parcel No. 09-64, 63, 62, & 97 (Postal address 09-77, 78, 79 & 100), Nineth Floor; Parcel no. 07-01A, 07-1, 08-01A, 08-01 and 08-02 Seventh and Eighth Floor; and Lot No. 08-64 (Postal address 08-55), Lot No. 08-77A-2 (Postal address 08-77A-2), Eighth Floor.	2,322.49	Office, storage	Leased by MOL AccessPortal
Level 5, Wisma N2N, Tower 2, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, Malaysia	358.79	Office	Leased by MyCNX
Unit B-2-2, Northpoint Office Suites, Mid Valley City, No. 1, Medan Syed Putra Utara, 59200 Kuala Lumpur, Malaysia	130.99	Office	Leased by our subsidiary, MOL Managed Services Sdn Bhd
2 Fl, 950/135 Royal River Place, Soi Rama3, 38 Rama 3 Rd Bangphongphang, Yannawa Bangkok 10120, Thailand	108.82	Office (Thailand headquarters of MOL Thailand)	Owned by Zest
Royal River Place, Soi Rama3, 38 Rama 3 Rd Bangphongphang, Yannawa Bangkok 10120, Thailand
2 Fl, 950/136;	356.71	Office and car park
2 Fl, 950/137;	(and		Owned by Zest
2 Fl, 950/138;	nine
1 Fl, 950/141;	parking
1 Fl, 950/142; and	spaces)
Car Park Building.
3 Fl, 3A14, Fortune Tower, Huaykwang, Bangkok, Thailand	86	Zest’s Showroom	Leased by Zest
3 Fl, Room 315, 292, Digital Gateway, Pathumwan, Bangkok, Thailand	31	Zest’s Showroom	Leased by Zest
3 Fl, Room XY146, Central Rama 2, Rama 2 Rd., Bangkok, Thailand	12.37	Zest’s Showroom	Leased by Zest
Ord. Prof. Dr. Fahrettin Kerim Gökay cad. No: 31 EURO İş Merkezi A Blok Altunizade, Üsküdar/İSTANBUL	1,000	Office	Leased by PaytoGo
Mehmet Akif Cad. Plümer Apt. No:62 D:9 Lefkoşe, Turkish Republic of Northern Cyprus	85	Office	Leased by Game Sultan
3/F, CWI Corporate Center 1050 Quezon Avenue, Quezon City, Philippines	429.29	Office	Leased by Uniwiz
12A Floor, VRC Online Building, No.18, Tam Trinh Street, Hai Ba Trung District, Hanoi Vietnam	110	Office	Leased by Nganluong
3rd Floor, VTC Online, No 132 Cong Hoa, Ward 4, Tan Binh Dst, HoChiMinh, Vietnam	91.2	Office	Leased by Nganluong
Grand ITC Permata Hijau, Blok Emerald No. 8, Jalan Letjen Soepeno, Kebayoran lama, Jakarta Selatan, 12210 Indonesia	300	Office	Leased by MOL Indonesia
133 Kearny St. STE 202, San Francisco, CA 94108	127	Office	Leased by Rixty
A05, 6F, No. 83, Sec. 1, Chonqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan	12.56	Office	Leased by MOL Taiwan

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ITEM 4A. Unresolved Staff Comments

None

ITEM 5. Operating and Financial Review and Prospects

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Item 3.D. “Key Information—Risk Factors” or in other parts of this annual report on Form 20-F.

A. Operating Results

Overview

We operate a payments platform that facilitates online and mobile commerce for consumers in emerging and other markets by providing a vast network of payment channels that accept payment using cash and online methods. Our physical distribution network comprises more than 970,000 physical locations in 11 countries across four continents where we maintain a local presence as of December 31, 2015 and physical locations in other countries where we have relationships with aggregators that distribute our products through channels with which they have relationships. We also have mobile and electronic distribution channels that accept major credit cards and online banking from more than 100 banks globally as of December 31, 2015. Our primary product is MOLPoints micropayment system, which sells payment credits that can be used by consumers to purchase online game credits and other digital content, including Facebook Game Cards. We also operate MOLReloads, a distribution network that distributes prepaid mobile airtime and digital content; MOLPay, a payments solution for online merchants; and MMOG.asia, an online games portal. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016. Our products provide various opportunities to acquire and retain customers and their payment credentials, which present cross-selling opportunities for our existing and future solutions. Our user base consists of both registered and unregistered users.

MOLPoints can be used to purchase credits that can be used in thousands of online games and other digital content, from over 800 content providers as of December 31, 2015. We operate in markets that are largely cash-based and offer consumers the opportunity to purchase MOLPoints in cash through our physical distribution network, which comprises chain operators such as 7-Eleven, individual retailers such as cybercafés, and aggregators such as e-pay. Our physical distribution network for MOLPoints includes our MOLReloads distribution network in Malaysia, the Philippines and Thailand. In addition, MOLPoints are available for purchase using credit cards, through online banking and at electronic kiosks in retail locations. We currently operate local websites for MOLPoints, or equivalent products for local markets, in 11 countries, namely Malaysia, Thailand, Turkey, the Philippines, Singapore, Indonesia, the United States, Australia, Brazil, Taiwan and Vietnam.

MOLReloads distributes electronic vouchers, or e-vouchers, for pre-paid mobile airtime and digital content including MOLPoints. Consumers can purchase prepaid mobile airtime for most major mobile service providers in Malaysia, the Philippines and Thailand through our MOLReloads distribution network, which comprises chain operators, including more than 1,900 7-Eleven convenience stores as of December 31, 2015, cybercafés and bookstores, and in the Philippines, individual distributors who distribute e-vouchers through mobile phones and personal computers in cybercafés. In January 2014, we entered into an agreement with InComm, a provider of pre-paid products, services and transaction technologies, pursuant to which we plan to distribute point-of-sale activated, or POS-activated, pre-paid gift cards through our MOLReloads distribution network.

MOLPay is an integrated payments solution for online merchants, which offers cash, online banking and credit card payment processing options for their consumers. MOLPay is operated in Malaysia and Indonesia by our 51%-owned subsidiary, MOLPay Sdn. Bhd., and in Vietnam by our 50%-owned subsidiary, Nganluong. MOLPay has an agreement with MyClear to serve as a third party (non-bank) acquirer for MyClear’s FPX and direct debit services in Malaysia. In addition to online banking and credit card payment, MOLPay has agreements with various distribution partners for collecting payments at more than 23,000 additional physical cash payment points in Malaysia, Singapore and Indonesia, including at 7-Eleven and other convenience stores, cybercafés and petrol stations, which are in the process of being activated. As of December 31, 2015, consumers could use MOLPay to make purchases from 4,508 online merchants.

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MOLWallet is our planned account-based online and mobile payment processing and money transfer system that is designed to effectively replace a physical wallet using a mobile phone. Account holders will be able to pay for digital and physical retail goods and services, pay third party bills, reload pre-paid accounts for mobile airtime and other mobile applications as well as perform peer-to-peer money transfers through a convenient, secure and intuitive online or mobile interface with multiple payment methods. MOLWallet uses technology that was originally developed by Nganluong Joint Stock Company, or Nganluong, an online payments solutions provider based in Vietnam that we acquired in 2013. In March 2016, BNM approved our MOLWallet license application. We plan to launch MOLWallet in Malaysia during the second quarter of 2016.

MMOG.asia is an online games portal that operates licensed games in Southeast Asia, including through localized portals operated in local languages for Malaysia, Thailand and Indonesia. MMOG.asia accepts MOLPoints to purchase game credits for games that it operates. We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

Segments

For management purposes, our business is organized into five segments, as follows:

• MOLPoints, which includes revenue derived from the sale of online MOLPoints vouchers;

• MOLReloads, which includes revenue derived from the electronic distribution of pre-paid airtime and PINs through our MOLReloads distribution network;

• MOLPay, which includes revenue derived from the provision of an online payment solution that online merchants use to collect payments from consumers;

• MMOG.asia, which includes revenue derived from the sale of game credits to consumers who play games on MMOG.asia; and

• Others, which primarily includes income derived from the sale of internet media products, including promotional services that we provide to games publishers and the sale of electronic related services, including the provision of technology outsourcing services to BLoyalty Sdn. Bhd., a company that is indirectly controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan.

Key Measures of Operating Performance

Our management monitors the financial and operating performance of MOLPoints, MOLReloads, MOLPay and MMOG.asia on the basis of the measures described below.

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MOLPoints

The following table sets forth our key operating measures for MOLPoints as of the specified dates and for the specified periods.

	As of and for the year ended December 31,
	2013		2014		2015
Registered Members(1)		4,443,886		6,278,309		7,725,581
Active registered paying users(2)		1,007,344		1,035,233		920,998
Volume(3) (MYR in millions)
Volume from registered consumer members(4)		262.8		286.9		244.4
Consumer direct purchase volume(5)		154.0		260.5		399.3
Direct channel volume(6)		172.5		168.1		148.5
Total volume		589.3		715.6		792.2
Malaysia		214.5		181.3		185.0
Southeast Asia (other than Malaysia)		265.4		360.9		336.8
Turkey(7)		86.6		119.0		198.2
Rest of the world		22.8		54.4		72.2
Total volume		589.3		715.6		792.2
Transactions(8)
Transactions by registered members		11,061,262		10,209,603		7,919,880
Transactions through direct purchase(9)		9,782,267		17,888,346		34,200,891
Total transactions		20,843,529		28,097,949		42,120,771

Notes:

(1) Registered members refers to the number of MOLPoints accounts that have been registered as of the end of a period.

(2) MOLPoints active registered paying users is the number of unique MOLPoints accounts that have been used to purchase or redeem MOLPoints during the preceding twelve month period.

(3) MOLPoints volume is the total retail value of content purchased through redemption of vouchers for games and other digital content provided by content providers using MOLPoints during the period. MOLPoints volume tends to be significantly greater than MOLPoints revenue, which excludes amounts that we pay to digital content providers pursuant to our revenue sharing arrangements.

(4) Volume from registered consumer members refer to the total volume of content purchased through redemptions of MOLPoints in registered MOLPoints accounts during a period.

(5) Direct purchase volume refers to the total volume of content purchased by end-users through redemptions of MOLPoints during a period without creating a registered MOLPoints account.

(6) Direct channel volume refers to the total volume of content purchased through redemptions of MOLPoints during a period by cybercafés and distributors that redeem MOLPoints for digital content that the cybercafés and distributors sell to end-users.

(7) Prior to our acquisitions of 70% of each of Game Sultan and PaytoGo in 2013, we did not have operations in Turkey.

(8) Transactions refers to the number of unique purchases of MOLPoints, in any volume, during a period.

(9) Transactions through direct purchase includes all transactions that relate to either consumer direct purchase volume or direct channel volume.

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MOLReloads

The following table sets forth our key operating measures for MOLReloads as of the specified dates and for the specified periods.

	As of and for the year ended December 31,
	2013		2014		2015
Active retailers(1)
Malaysia		1,930		2,127		2,569
Philippines		35,151		36,354		33,855
Thailand		123		314		295
Total active retailers		37,204		38,795		36,719
Volume(2) (MYR in millions)
Malaysia		1,123.5		1,269.4		1,492.8
Philippines		88.3		93.1		100.1
Thailand		2.2		6.1		21.9
Total volume		1,214.0		1,368.6		1,614.8

Notes:

(1) Active retailers refers to the total of number of MOLReloads terminals in Malaysia and Thailand as of the end of the period, in each case which have sold at least one MOLReloads e-voucher during the preceding twelve months, and the number of individual distributors in the Philippines as of the end of the period, which have sold at least one MOLReloads e-voucher during the preceding month.

(2) Volume refers to the total retail value of pre-paid mobile airtime distributed by MOLReloads during a period. MOLReloads volume tends to be significantly greater than MOLReloads revenue, which excludes amounts that we pay to mobile airtime providers pursuant to our revenue sharing arrangements.

MOLPay

The following table sets forth our key operating measures for MOLPay as of the specified dates and for the specified periods, excluding MOLPay’s operations in Indonesia, which were launched in 2014 and are not yet material.

	As of and for the year ended December 31,
	2013		2014		2015
Online merchants(1)
Malaysia		1,109		1,389		1,806
Vietnam		2,346		2,416		2,702
Total merchants		3,455		3,805		4,508
Volume(2) (MYR in millions)
Malaysia		65.0		87.3		197.5
Vietnam		79.2		267.2		454.1
Total volume		144.3		354.5		651.6

Notes:

(1) Online merchants refers to the number of online merchants in Malaysia and Vietnam that accepted MOLPay as a payment option as of the end of the period.

(2) Volume refers to the total value of payments processed by MOLPay during a period. MOLPay volume tends to be significantly greater than MOLPay revenue, which excludes amounts paid to financial institutions.

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MMOG.asia

The following table sets forth our key operating measures for MMOG.asia as of the specified dates and for the specified periods.

	As of and for the year ended December 31,
	2013		2014		2015
Active paying users(1)		110,826		56,865		43,279
AVPPU(2) (MYR)		290.9		383.6		344.2
Volume (MYR in millions)(3)		32.2		21.8		14.9

Notes:

(1) Active paying users refers to the number of unique users who have purchased game points on MMOG.asia during the preceding 12 months.

(2) AVPPU refers to average volume per paying user, which is equal to total volume for a preceding twelve month period divided by the number of active paying users as of the end of the period.

(3) MMOG.asia volume is the total retail value of content sold by MMOG.asia during the preceding twelve months.

Factors Affecting our Results of Operations

The significant factors that affect our results of operations include the following:

Developments within the online and mobile digital content industry

Our segment revenue from each of MOLPoints and MMOG.asia is affected by the overall demand for game credits in the markets in which we operate, which is in turn affected by developments within the online and mobile gaming industry. The following are certain key factors which affect the online and mobile gaming industry:

• Launch of new games and release of enhancements. As of December 31, 2015, MOLPoints can be used to purchase game credits and other digital content, including thousands of online games, provided by more than 800 content providers, and MMOG.asia operates 32 licensed online games. The volume of MOLPoints that we sell is significantly affected by the number of new games launched by content providers, the popularity of new and existing games and our ability to develop and maintain relationships with content providers. Similarly, MMOG.asia’s success is significantly affected by the number of games launched on MMOG.asia and their popularity.

• Game monetization. The vast majority of MOLPoints are redeemed by consumers to purchase virtual goods within online games, while MMOG.asia earns revenue from the sale of in-game items and virtual goods to game players. In addition, most of MMOG.asia’s games accept MOLPoints to purchase game credits. The extent to which players choose to pay for virtual goods in games is driven by the ability of our content provider partners, including MMOG.asia, to create content and virtual goods that enhance the game-play experience.

• Marketing expenditure. Although we acquire most of our users through unpaid channels and through our game merchants websites, we also utilize advertising and user acquisition and retention programs, such as promotions and gaming contests, to grow and retain our user base. The amount, cost and effectiveness of such activities are factors that affect our operating results.

• The adoption of mobile games. In recent years there has been an increasing shift to mobile gaming whereby users play online games using mobile devices. Our results of operations will be significantly affected by the extent to which mobile game players purchase online game credits and our ability to adapt to the mobile gaming environment. In particular, the relative success of mobile games launched by our content provider partners, including MMOG.asia, and our ability to monetize mobile games and their users, including through mobile carrier billing arrangements, will significantly affect our results of operations.

• Global games and global games platforms. In recent years, global games have accounted for an increasing share of the online games market, largely due to the availability of increased internet bandwidth and global games platforms. Our revenue sharing arrangements for global games that are not operated on global platforms tend to be more favorable than those of our MOLPoints business as a whole, while our revenue sharing arrangements for games that are operated on global platforms tend to be less favorable than those of our MOLPoints business as a whole. The increasing adoption of global games and global games platforms may significantly affect our results of operations.

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• New forms of digital content. Digital content other than games is expected to account for an increasing share of the overall market for digital content. In particular, the rise of mobile chat applications has led to an increase in the use of emoticons. For example, LINE uses our payment services on a non-exclusive basis to monetize its chat services in Thailand. LINE is an application for instant messaging on smartphones and personal computers, which allows users to exchange text messages, graphics, video and audio media, make free VoIP calls and hold free audio and video conferences. The adoption of these and other similar forms of digital content, and the adoption of our payment services in connection with the marketing of such digital content may significantly affect our result of operations.

Developments in the payments industry

Our segment revenue from each of MOLPoints, MOLReloads and MOLPay is affected by developments in the payments industry. The factors below are certain key factors which affect the payments industry:

• The relative use of cash and electronic payment systems in the markets in which we operate. Changes in the number of transactions using cash as a means of payment is an important variable affecting our revenues. Many of our users do not readily have access to credit card, debit card or bank transfer services, and require alternative methods for payment for online products and services. Our physical distribution network, which includes convenience stores, cybercafés, bookstores and other retail stores, provide access to e-commerce for such users by facilitating cash payments. In 2015, cash payments accounted for 69.2%, of transactions conducted by our user community on our platform. If the use of cash as a means of payment declines in our key markets, we would be exposed to greater competition from competitors that primarily provide electronic payment solutions and our profit margin would be adversely affected by the fees we are required to pay to financial institutions in connection with electronic payments, each of which would adversely affect our results of operations.

• Adoption of alternative payment structures. The volume of online transactions has grown considerably and continues to grow, while limited credit card penetration in emerging markets has resulted in the proliferation of alternative methods of payment. We believe that growth in online transactions and alternative payment methods will be an important driver to increase the number of potential content providers and merchants for which we can offer payment services and the potential number of users of MOLPoints, MOLPay and MOLWallet, the latter of which we plan to launch in Malaysia in the second quarter of 2016. We expect payment volumes from online transactions and alternative payment methods to increase significantly in the coming years.

• The fees we pay to financial institutions in connection with our payment processing operations. We rely on banks or other payment processors to process transactions, and we pay fees for this service. From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction using one of their cards. We may not be able to pass on all of the increases in interchange fees or debit network fees along to our online merchants, if at all. The extent to which we are able to pass any increases in fees on to customers could impact our profit margins.

Our distribution network and merchant network and arrangements with content providers and mobile airtime providers

Our results of operations are affected by our ability to continue to build out our distribution and merchant networks and our arrangements with digital content providers and telecommunications service providers. Our physical distribution network includes more than 970,000 physical locations in 11 countries where we maintain a local presence, and other locations in countries where we do not maintain a local presence but have indirect relationships with physical distribution locations. As of December 31, 2015, we provided payment services for customers of more than 800 content providers through MOLPoints, 26 telecommunications service providers through MOLReloads, and 4,508 online merchants through MOLPay. We have expanded into various other countries by acquiring an existing distribution network rather than developing one organically. Our distribution network is a key factor that affects our ability to reach consumers and attract content providers, telecommunications service providers and online merchants to our platform.

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Our agreements with digital content providers and telecommunications service providers are either on a purchase basis, which means that we purchase digital content and mobile airtime at a discount for resale, or a fulfillment basis, which means that we sell digital content or mobile airtime on behalf of the digital content or telecommunications service provider in exchange for a commission or service fee based on the value of digital content or mobile airtime purchased by consumers using MOLPoints, among other factors. MOLPoints’ revenue sharing arrangements with content providers typically provide for MOLPoints’ share to be 20% of volume, but this share can vary depending on local market practice, the content provider, and the content. MOLReloads’ discounts and commissions from telecommunications service providers are typically between 3% and 10% of volume for purchase agreements and less than 1% of volume for fulfillment agreements. Our telecommunications service providers may from time to time change our revenue sharing arrangements for MOLReloads. In general, following periods of increased volume, telecommunications service providers have greater bargaining power in the contractual negotiations to reduce our share of the revenue sharing arrangement. For example, in 2015 certain telecommunications service providers in Malaysia reduced our revenue share following a period of increased volume, which had the effect of reducing our revenues even though volume had increased. Our distribution network and distribution costs are significant factors affecting our results of operations.

Expansion into new markets and ability to increase product penetration in existing markets

Since we commenced operations in Malaysia in 2000, we have successfully entered and grown in seven new countries through acquisitions. As part of our strategy of expansion, we have in the past, and may, from time to time, acquire businesses or interests in businesses, including non-controlling interests, form joint ventures or create strategic alliances. For example, since 2009 we have expanded into Thailand, Australia, New Zealand, the United States, Brazil, Turkey and Vietnam through acquisitions. We also launched MOLPay through an acquisition and we acquired MMOG.asia. Through our acquisition of 51% of PayByMe in 2014, we also have presence in several markets in the Middle East market. We expect to continue to evaluate potential strategic acquisitions of businesses or products with the potential of expanding our user and revenue base, widening our geographic coverage and increasing our product range. We have grown organically in other markets by establishing a local subsidiary in such market to develop relationships with local distribution channels. In addition, our ability to leverage our existing distribution network to expand our product offering across our current markets and replicate our success in Malaysia across other countries where we operate will affect our growth and results of operations. We expect that our growth prospects will continue to be significantly affected by our ability to expand our business in new and existing markets.

Consumer spending patterns and seasonality

Our business depends heavily on the overall level of consumer spending, particularly in our primary markets in Southeast Asia and other emerging markets. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. During periods of economic growth, overall consumer spending tends to increase along with rises in wealth, and during economic downturns, consumer spending tends to correspondingly decline. Furthermore, our sales have historically been higher during festive periods, as our business tends to benefit from consumers’ increased leisure time. Such periods include Chinese New Year, which generally occurs in January or February, Ramadan, which occurred in the third quarter in each of 2013, 2014 and 2015, and the December holiday season.

Restatement of Financial Results (full year 2014 and interim periods in 2014 and 2015) to Correct Accounting for Transactions Relating to PayByMe

As disclosed in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016, we have restated our consolidated financial results for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month periods ended September 30, 2014 and 2015 and the years ended December 31, 2014 to correct our accounting for certain transactions entered into in connection with our acquisition of PayByMe. In particular, the restatements related to the to put option granted to the holder of the non-controlling interest of PayByMe and our accounting for foreign currency gains/(losses) attributable to non-operating transactions in connection with a bank guarantee that we secured for the benefit of the holders of the non-controlling interest of PayByMe.

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A review of the application of IFRS to put option granted by MOL AccessPortal (the “Put Options”), in connection with the acquisition by MOL AccessPortal of a 51% equity interest in PayByMe resulted in a restatement of the previously issued financial statements for the year December 31, 2014. In September 2014, we acquired a 51% equity interest in PayByMe and in connection with the acquisition, MOL AccessPortal granted the Put Option to the holders of the non-controlling interest of PayByMe, pursuant to which the holders of the non-controlling interest have the contractual right to require MOL AccessPortal to subscribe for shares representing the remaining 49% equity interest in PayByMe that MOL AccessPortal does not already own (the “Option Shares”) in tranches during specified periods. These options are disclosed in note 17(b)(i) (the Acquisition of Klon Ödeme ve Iletisim Teknolojileri Anonim Şirketi (“PayByMe”)) and 36(ii) (Derivative Financial Liabilities) to our consolidated financial statements. Upon reviewing the application of IFRS, we noted that we are required to recognize a gross obligation for the present value of the redemption amount of the Put Option because the holders of the non-controlling interest have the right to require MOL AccessPortal to pay cash or another financial asset in exchange for the Option Shares. The gross obligation must be recognized at an amount equal to the present value of the estimated amounts that could be required to be paid to the holders of the non-controlling interest in accordance with the shareholders agreement between MOL AccessPortal and the holders of the non-controlling interest and are subject to re-measurement at the end of each reporting period. Changes in the measurement of the gross obligation due to the unwinding of the discount or changes in the estimated amounts that the acquirer could be required to pay are recognized in profit or loss at the end of each reporting period. As a result, we restated our put option written on non-controlling interest on our consolidated statements of financial position as of September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, and December 31, 2015. In addition, the gross obligation on in-substance forward recognized in connection with these options gives rise to a loss on re-measurement of gross obligation to be reported as “finance costs”, on our consolidated statements of profit or loss and other comprehensive income for the three and nine month periods ended September 30, 2014 and 2015, the three month periods ended December 31, 2014 and 2015, the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the year ended December 31, 2014. None of the fair value adjustments and corresponding re-measurements have any impact on our operating cash flows during the relevant periods. The gain/(loss) on re-measurement of gross obligation that should be recognized in our consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 was MYR0.4 million, MYR (4.2) million, MYR (2.9) million and MYR (2.3) million respectively. For the six months ended June 30, 2015 and the nine months ended September 30, 2015, the loss on re-measurement of gross obligation was MYR (3.7) million and MYR (6.7) million, respectively. For the three month period and year ended December 31, 2014, the loss on re-measurement of gross obligation was MYR (3.2) million. Accordingly, a restatement has been made to the consolidated financial statements as of and for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2014 and 2015 and the year ended December 31, 2014.

Furthermore, as required under the terms of our acquisition of PayByMe, we secured a bank guarantee for the benefit of the holders of the non-controlling interest of PayByMe in December 2014. These funds were originally treated as working capital. However, having reviewed the nature of the transactions in connection with the bank guarantee, we have determined that these transactions are non-operating in nature. Accordingly, all foreign exchange gains or losses should be recognized as either “other income” if they relate to foreign currency exchange gains and “non-operating expenses” if they relate to foreign currency exchange losses. As a result of the above and in an effort to better reflect the nature of the foreign currency transactions during the year, we determined to restate our foreign exchange transactions according to the nature of the transactions in particular whether or not they are deemed attributable to operations. Foreign exchange gain/(loss) attributable to non-operating transactions of MYR1.7 million, MYR(0.2) million and MYR6.0 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively, and MYR1.6 million and MYR7.6 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, respectively. In our restated condensed interim consolidated statements of profit or loss for the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the three and nine month periods ended September 30, 2015, these amounts are reclassified as “other income” to the extent that they relate to foreign exchange currency gains and “non-operating expenses” to the extent that they relate to foreign currency exchange losses, in each case reported below the line of “loss from operations”,

All financial information explained above as of and for the year ended December 31, 2014 and included in this annual report on Form 20-F is restated financial information.

See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business - Certain errors were identified in our consolidated statements of financial position and our consolidated statements of profit or loss and other comprehensive income as of and for the three month periods ended December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2015 and the year ended December 31, 2014” and “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

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Overstatement of Revenue and Direct Cost and Other Ancillary Expenses for 2013 and Restatement of Financial Results for Interim Periods in 2014

As disclosed in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, certain accounting errors have been identified in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013.

• As disclosed in our interim report on Form 6-K (File No. 001-36637), furnished to the SEC on December 2, 2014, during the course of our review of our financial results for the third quarter of 2014, it was discovered that our Vietnamese subsidiary, Nganluong, which we acquired in March 2013, reported revenue from its payment business on a gross basis, and accounted for the corresponding fees payable to merchants in direct cost and other ancillary expenses. However, our accounting policy is to account for such transactions on a net basis because we act as an agent with respect to these revenue arrangements, such that the corresponding fees payable to merchants should have been netted out of revenue and not included in direct cost and other ancillary expenses.

• In addition, during the course of our review of our financial results for the fourth quarter of 2014, it was discovered that Nganluong incorrectly included VAT in revenue and direct cost and other ancillary expenses. However, our accounting policy is to exclude value added tax, or VAT, from revenue and direct cost and other ancillary expenses. The effect of the foregoing errors was to overstate MOLPay’s segment revenue and MOLPay’s segment direct cost and other ancillary expenses by equal amounts.

As a result of these errors the revenue line item and direct cost and other ancillary expenses line item are overstated by equal amounts in our consolidated statements of profit or loss and other comprehensive income for the three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013 included in our registration statement on Form F-1, as amended (File Number: 333-197401) in relation to our initial public offering, and the three month period ended September 30, 2014 included in our interim report on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014.

We determined not to restate our financial statements for the full year or any interim period in 2013, as we concluded that the adjustments are not material to our consolidated financial statements as a whole for any period in 2013. In particular, we considered the quantitative materiality of our MOLPay segment for 2013, and a variety of qualitative criteria including those set forth in SEC Staff Accounting Bulletin No. 99: Materiality. In relation to the relevant financial periods of 2014, we restated our financial statements for the three month periods ended March 31, 2014, June 30, 2014 and September 30, 2014, and the six months period ended June 30, 2014, to account for these errors.

Because we have not restated our financial results for any period in 2013, our revenue and direct cost and other ancillary expenses, and MOLPay’s segment revenue and MOLPay’s segment direct cost and other ancillary expenses set forth in this annual report, including in the discussion of our operating results set forth in this Item 5.A., are each overstated by MYR4.3 million.

See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

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Selected Statements of Operations Items

Revenue

We earn revenue from sales of goods in each of our segments. The following table sets forth our revenue derived from each segment for the specified periods.

	For the year ended December 31,
	2013			2014			2015
	(MYR in millions)
Segment revenue
MOLPoints		102.5			130.0			170.3
MOLReloads		34.5			36.2			41.1
MOLPay		9.4	(1)		11.0			23.6
MMOG.asia(2)		23.7			21.7			11.7
Others		1.3			3.8	(3)		1.8
Total revenue		171.5	(1)		202.7			248.5

Note:

(1) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, as a result of certain accounting errors in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013, our revenue and direct cost and other ancillary expenses for 2013 are each overstated by MYR4.3 million, with no other line items being affected. However, we have determined not to restate our financial statements for 2013 because the adjustments are not material to our consolidated financial statements as a whole. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

(2) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

(3) Includes MYR2.0 million of advertising and marketing revenue attributable to MMOG.asia for the year ended December 31, 2014.

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MOLPoints earns revenue from sales of MOLPoints vouchers, and vouchers provided by content providers, through our physical, electronic and mobile distribution channels. The amount that we recognize as revenue depends on our revenue sharing arrangements with digital content providers, which is typically 22% of volume but can vary depending on local market practice, the content provider and the content. For example, based on local market practice, we have relatively favorable revenue sharing arrangements in Turkey and relatively less favorable revenue sharing arrangements in the Philippines and Indonesia. Purchased MOLPoints can be deposited in a registered MOLPoints account or redeemed directly for digital content from a content provider. Vouchers provided by content providers can be redeemed directly for digital content from the relevant content provider. In each case, we recognize revenue from the sale of MOLPoints vouchers at the time the MOLPoints vouchers are redeemed for digital content. In cases where our customer is the end-user, which comprises all MOLPoints volume other than direct channel volume, there is typically a lag between the time the customer purchases MOLPoints and the time the MOLPoints are redeemed for content by the end-user, at which point revenue is recognized. However, in cases of direct channel volume, where our customer is a cybercafé or distributor that redeems MOLPoints for digital content that the cybercafé or distributor will sell to end-users, we recognize revenue immediately when the cybercafé redeems MOLPoints purchased from us. Revenue from MOLPoints vouchers that have been sold but not yet redeemed for digital content is deferred.

MOLReloads earns revenue from sales of e-vouchers for pre-paid mobile airtime through our MOLReloads distribution network, which comprises retail store terminals in Malaysia and Thailand and individual distributors in the Philippines. Revenue from the sale of mobile airtime is recognized at the time of sale to the end-user. The amount that we recognize as revenue depends on our revenue sharing arrangements with mobile airtime providers, which are either on a purchase basis, which means that we purchase airtime upfront for resale, or a fulfillment basis, which means that we sell airtime on behalf of the telecommunications service provider. Under purchase agreements, we purchase mobile airtime at a discount to the price at which we distribute the airtime through our MOLReloads distribution network, which discount is typically between 3% and 10%. Under fulfillment agreements, we charge a commission, which is typically less than 1% of the value of airtime sold through our MOLReloads distribution network. In 2013, 2014 and 2015, approximately 62.5%, 65.5% and 66.3% respectively, of MOLReloads’ volume was distributed pursuant to fulfillment agreements, with the remainder on a purchase basis. We enter into purchase or fulfillment arrangements based on the preferences or requirements of our counterparties. In general, fulfillment arrangements have a lower margin but do not require a capital outlay or result in inventory risks to us.

MOLPay earns revenue from merchant fees, which are fees charged to online merchants upon their registration for MOLPay, and commissions for payments processed by MOLPay. Commissions are recognized at the time of sale. Merchant fees are recognized at the time we enter into agreements with merchants.

MMOG.asia earns revenue from sales of virtual goods to players on our online games portal and, commencing from the first quarter of 2014, the sale of advertising on our online games portal. Revenue from the sale of virtual goods is recognized over the estimated consumption period of in-game virtual goods, which is typically within a short period of time after the purchase of the in-game credits.

Other fees, which primarily include revenue derived from the sale of internet media products, including promotional services that we provide to games publishers mainly through MOL Singapore, and the sale of electronic related services, including the provision of technology outsourcing services to BLoyalty Sdn. Bhd., a company that is controlled by our major shareholder, are recognized on an accrual basis.

We own an effective 86.73% interest in MOL Thailand, 50% of Nganluong, 54.2% of Rixty, 65% of MOL Australia, 93.5% of MOL Taiwan, 51% of MOLPay Sdn. Bhd. 51% of PayByMe, 60% of Sept 3 Corporation Sdn. Bhd and 50.9% of PayByMe FZ-LLC and we fully consolidate the financial statements of each of those companies with ours.

The following table sets our revenue derived from our principal markets for each of the specified periods.

	For the year ended December 31,
	2013			2014			2015
	(MYR in millions)
Geographic breakdown of revenue
Malaysia		79.5			88.1			83.3
Thailand		34.7			42.4			48.3
Philippines		19.9			15.1			13.4
Turkey		23.1			35.3			70.6
Others(1)		14.3	(2)		21.7			32.9
Total revenue		171.5	(2)		202.7	(2)		248.5

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Note:

(1) Includes the United States, Brazil, Singapore, Indonesia, Australia, Vietnam and Taiwan.

(2) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, as a result of certain accounting errors in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013, our revenue and direct cost and other ancillary expenses for 2013 are each overstated by MYR4.3 million, with no other line items being affected. However, we have determined not to restate our financial statements for 2013 because the adjustments are not material to our consolidated financial statements as a whole. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business - Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

Direct Costs and Other Ancillary Expenses

Direct costs primarily comprise distribution costs that we pay to our distribution partners in connection with MOLPoints’ distribution of digital content and MOLReloads’ distribution of mobile airtime. For the years ended December 31, 2013, 2014 and 2015, MOLPoints’ direct costs and other ancillary expenses, which primarily comprise fees paid to distribution partners, were equal to 7.9%, 9.6%, and 12.8%, respectively, of MOLPoints volume, and MOLReloads’ direct costs and other ancillary expenses, which primarily comprise fees paid to distribution partners, were equal to 1.3%, 1.4% and 1.4%, respectively, of MOLReloads volume. Direct costs for MOLPay primarily include amounts paid to banks related to payment processing. Ancillary expenses primarily include information technology infrastructure and consulting costs relating to MMOG.asia.

The following table sets forth our direct costs and other ancillary expenses for our MOLPoints, MOLReloads, MOLPay, MMOG.asia and Others segments for the specified periods.

	For the year ended December 31,
	2013			2014		2015
	(MYR in millions)
Segment direct cost and other ancillary expenses
MOLPoints		46.6			68.5		101.6
MOLReloads		16.3			19.2		22.2
MOLPay		5.7	(1)		5.7		15.5
MMOG.asia(2)		1.2			0.7		1.2
Others		0.2			0.3		0.5
Total direct costs and other ancillary expenses		70.0	(1)		94.4		141.0

Note:

(1) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, as a result of certain accounting errors in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013, our revenue and direct cost and other ancillary expenses for 2013 are each overstated by MYR4.3 million, with no other line items being affected. However, we have determined not to restate our financial statements for 2013 because the adjustments are not material to our consolidated financial statements as a whole. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

(2) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

Segment gross profit

Segment gross profit represents segment revenue minus direct costs and other ancillary expenses. We monitor the operating results of our business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment gross profit is one of the key measures we use to assess the performance of our operating segments.

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The following table sets forth our gross profit derived from each segment for the specified periods.

	For the year ended December 31,
	2013		2014		2015
	(MYR in millions)
Segment gross profit
MOLPoints		55.9		61.5		68.7
MOLReloads		18.2		17.0		18.9
MOLPay		3.7		5.3		8.1
MMOG.asia(1)		22.5		21.0		10.5
Others		1.1		3.5		1.3
Total gross profit		101.5		108.3		107.5

Note:

(1) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

Employee expenses

Employee expenses primarily comprise wages, bonuses and salaries and other personnel-related expenses, which includes statutory retirement contribution schemes, social security payments, and staff welfare such as medical benefits among others, to the extent such costs are not capitalized as development expenditures.

The following table sets forth our employee expenses with respect to each segment for the specified periods.

	For the year ended December 31,
	2013		2014			2015
	(MYR in millions)
Segment employee expenses
MOLPoints		19.9		22.5			29.6
MOLReloads		4.5		5.5			7.6
MOLPay		2.3		3.9			5.5
MMOG.asia(1)		2.9		3.2			3.2
Others		0.3		0.3			0.3
Unallocated		1.0		16.8	(2)		88.9	(2)
Total employee expenses		31.0		52.2			135.1

Note:

(1) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

(2) Included in employee expenses for the year ended December 31, 2014 and 2015 is the non-cash expenses of share based compensation awards. In June 2015, the board of directors resolved to cancel the share based compensation awards and to terminate all outstanding employee share options. The vesting and termination expenses of the share based compensation recognized in profit and loss amounted to MYR15.7 million in 2014 and MYR85.8 million in 2015.

Depreciation and amortization

Property, plant and equipment are depreciated on a straight line basis at an annual rate between 5% and 33%, depending on the nature of the asset. Goodwill related to the domain name MOL.com and goodwill on consolidation of acquired subsidiaries are tested annually for impairment. Other intangible assets, including our software and copyrights, electronic payment system, exclusive license and distribution rights, other intellectual property and trademark, are amortized on a straight line basis at an annual rate between 20% and 33% depending on the nature of the asset. Development expenditure for web applications, software products and programs, which primarily comprises employee benefits expenses for information technology personnel and creative personnel, is amortized on a straight line basis over the shorter of five years and the period of the expected benefit

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The following table sets forth our depreciation and amortization expenses with respect to each segment for the specified periods.

	For the year ended December 31,
	2013		2014		2015
	(MYR in millions)
Segment depreciation and amortization expenses
MOLPoints		9.8		12.6		15.7
MOLReloads		1.1		1.3		1.6
MOLPay		0.7		0.5		0.3
MMOG.asia(1)		8.9		9.7		10.1
Others		0.0		0.3		0.3
Total depreciation and amortization expenses		20.6		24.4		28.0

Note:

(1) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

Operating Expenses

Operating expenses primarily comprise communication and travelling expenses, marketing, advertising and promotion expenses, office related expenses and other operating expenses.

Marketing, advertising and promotion expenses

Marketing, advertising and promotion expenses primarily comprise expenses incurred to promote digital content that is available for purchase using MOLPoints and online games operated by MMOG.asia.

Communication and travelling expenses

Travel and communication expenses comprise expenses incurred by us in connection with corporate travel and communication.

Office related expenses

Office related expenses primarily comprise printing and stationery expenses, office rental expenses and utilities

Other operating expenses

Other operating expenses primarily comprise contract and other professional costs, bank charges and other miscellaneous costs.

The following table sets forth our segment operating expenses with respect to each segment for the specified periods.

	For the year ended December 31,
	2013		2014			2015
	(MYR in millions)
Segment operating expenses
MOLPoints		15.5		19.6			57.7	(4)
MOLReloads		3.0		3.8			6.7	(4)
MOLPay		1.2		1.6			2.9
MMOG.asia(1)		4.1		4.6			9.4
Others		0.7		4.9			9.4	(3)
Unallocated		—		16.0	(2)		2.5
Total operating expenses		24.5		50.5			88.6

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Note:

(1) We acquired our initial equity interest of approximately 80% in MyCNX, which operates MMOG.asia, in November 2012 and increased our interest in MyCNX to 100% in May 2014.

(2) Includes MYR16.0 million of initial public offering expenses and professional fees.

(3) Increase is mainly due to higher compliance fees as a listed company on NASDAQ.

(4) Included in other operating expenses of MOLPoints and MOLReloads is the non-cash charges of the impairment loss on goodwill and intangible assets of MYR35.2 million and MYR3.2 million respectively for the year ended December 31, 2015.

Other operating income

Other operating income of MYR6.9 million for the year ended December 31, 2015 relates to foreign exchange gains attributable to operating transactions. Prior to the year ended December 31, 2015 foreign exchange gains attributable to operating transactions were insignificant.

Other income

Other income comprises interest in connection with bank deposits, disposal of investment property, and other miscellaneous items including advertising fees in connection with MMOG.asia, gain on disposal of associate and product listing fees from publishers and foreign exchange gains not attributable to operations.

As disclosed in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016, we have restated our consolidated financial results to reflect a refund to the depositary of the ADSs. In April 2016, we announced our intention to allow the ADSs to be delisted from NASDAQ. Under the terms of business of our depositary agreement with the Bank of New York Mellon, the depositary of the ADSs, upon delisting of our ADS, it is estimated that we will be required to refund MYR2.5 million to the depositary. The depositary has previously paid us annual issuance revenue payments of approximately MYR 3.1 million in the first quarter of 2015, all of which has been recognized as “other income” in the consolidated statements of profit or loss for the three month period ended March 30, 2015. Following our delisting announcement in April 2016, we have included the estimated amount payable to the depositary by recognizing this refund as a reversal from the aforesaid “other income” in the consolidated statements of profit or loss for the year ended December 31, 2015.

Finance costs

Finance costs comprise interest on revolving credit, term loans and hire-purchase and finance lease facilities including the loss on remeasurement of the gross obligation due to the unwinding of the discount of MYR9.0 million for the present value of the redemption amount of the Put Options granted by MOL AccessPortal to the minority shareholders of PayByMe.

Income tax expense

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and when we intend to settle its current tax assets and liabilities on a net basis.

Certain of our subsidiaries have been granted Multimedia Super Corridor Malaysia, or MSC Malaysia, status by the Minister of Finance Malaysia and the Minister of International Trade and Industry Malaysia, and enjoy certain incentives, including “pioneer status,” which entitles a company to a five-year exemption from Malaysian income tax on income derived from MSC Malaysia-related activities, which is renewable for a second five-year term provided certain conditions are met. The second five-year exemption granted to MyCNX will expire on July 10, 2017, and MyCNX will thereafter be subject to Malaysian income tax. MOLPay Sdn. Bhd. and MOL ManagedServices Sdn. Bhd. have also received approvals for this status, which will expire on December 30, 2018, and July 31, 2018 respectively, and are renewable for a second five-year term provided certain conditions are met. The status granted to MOL Social Payments Sdn. Bhd. has expired on January 30, 2016 and is pending approval for the second five-year term and will thereafter be subject to Malaysian income tax.

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Other comprehensive income

Other comprehensive income primarily comprises foreign exchange gains and losses arising from the translation of the financial statements of foreign operations for which the functional currency is not the Malaysian Ringgit, in addition to the net fair value gain on available-for-sale financial assets. For 2013, other comprehensive income also includes a re-measurement gain on pension liability of MYR0.1 million.

Results of Operations

The following table sets forth our consolidated statements of profit or loss for the specified periods. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

	For the year ended December 31,
	2013			2014			2015
				(Restated) (5)
	(MYR in millions, except per share data)
Revenue		171.5	(1)		202.7			248.5
Direct cost and other ancillary expenses		(70.0	)(1)		(94.4	)		(141.0	)
Employee expenses		(31.0	)		(52.2	)(3)		(135.1	)(3)
Depreciation and amortization expenses		(20.6	)		(24.4	)		(28.0	)
Marketing, advertising and promotion expenses		(8.3	)		(6.1	)		(8.0	)
Communication and travelling expenses		(5.7	)		(7.9	)		(8.4	)
Office related expenses		(3.9	)		(4.3	)		(5.7	)
Other operating expenses		(6.7	)		(32.2	)		(66.5	)(4)
Other operating income		—			—			6.9
Profit/(Loss) from operations		25.4			(18.8	)		(137.3	)
Other income		2.5			7.6			12.0
Non-operating expenses		(3.0	)		—			—
Finance costs		(5.1	)		(9.2	)		(11.1	)
Share of results of associates		(0.0	)		(0.1	)		(0.0	)
Profit/(Loss) before tax		19.8			(20.5	)		(136.4	)
Income tax expense		(1.2	)		(0.6	)		(2.5	)
Profit/(Loss) for the year		18.7			(21.1	)		(138.9	)
Profit/(Loss) for the year attributable to owners of the company		12.0			(24.8	)		(140.5	)
Profit/(Loss) for the year attributable to non-controlling interests		6.7			3.7			1.6
Earnings/(Loss) per share
Basic (sen)(2)		20.39			(40.44	)		(214.58	)
Diluted (sen)(2)		20.39			(40.44	)		(214.58	)

Notes

(1) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on December 2, 2014 and April 30, 2015, as a result of certain accounting errors in connection with the financial results of Nganluong, our subsidiary in Vietnam which we acquired in March 2013, our revenue and direct cost and other ancillary expenses for 2013 are each overstated by MYR4.3 million, with no other line items being affected. However, we have determined not to restate our financial statements for 2013 because the adjustments are not material to our consolidated financial statements as a whole. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

(2) Sen is a unit of the Malaysian currency. One hundred sen equal one Malaysian Ringgit.

(3) Included in employee expenses for the year ended December 31, 2014 and 2015 is the non-cash expenses of share based compensation awards. In June 2015, the board of directors resolved to cancel the share based compensation awards and to terminate all outstanding employee share options. The vesting and termination expenses of the share based compensation recognized in profit and loss amounted to MYR15.7 million in 2014 and MYR85.8 million in 2015.

(4) Included in other operating expenses is the non-cash expenses of impairment loss on goodwill and intangible assets of MYR38.4 million for the year ended December 31, 2015.

(5) As disclosed in our interim reports on Form 6-K (File No. 001-36637) furnished to the SEC on May 2, 2016, to correct our accounting for certain transaction entered into in connection with our acquisition of PayByMe in respect to Derivatives Granted to Holders of the Non-controlling Interest of PayByMe.

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Year ended December 31, 2015 compared to year ended December 31, 2014

Revenue. Revenue increased by 22.6% to MYR248.5 million (US$57.9 million) for 2015 from MYR202.7 million for 2014. Consolidated revenue increased primarily due to the growth of segment revenue from each of MOLPoints, MOLReloads and MOLPay, partially offset by a reduction in MMOG.asia segment revenue.

• MOLPoints segment revenue increased by 31.0% to MYR170.3 million (US$39.7 million) for 2015 from MYR130.0 million for 2014 due to an improved revenue take rate and rapid revenue growth in the mobile carrier billing business. Volume increased 10.7% to MYR792.2 million for 2015 from MYR715.6 million for 2014. This was mainly driven by growth in our carrier billing businesses in Turkey and the Middle East, and organic growth in Thailand, Philippines, Brazil and the United States. Our carrier billing businesses contributed 19.4% of MOLPoints volume for 2015 compared to 6.6% for 2014. Approximately 80.4% of MOLPoints total volume for 2015 was derived from the combination of Turkey and the Middle East (25.0%), Thailand (30.4%) and Malaysia (25.0%). Revenue and volume from Turkey and Middle East increased by 87.9% and 66.7%, respectively compared to the prior year primarily due to the full year of revenue contribution from PayByMe, our carrier billing business in Turkey and the Middle East which we acquired in September 2014, and Easy2Pay, our carrier billing business in Thailand which we acquired in May 2014. Revenue from Malaysia decreased by 3.4% but volume remain stable as compared to the prior year as we continue to increase our mobile and PC games content, expand our carrier billing business and distribution network. In Thailand, revenue and volume increased by 15.4% and 0.4%, respectively compared to the prior year due to organic growth including growth in Easy2Pay Thailand. The rate of growth in MOLPoints segment revenue was substantially higher than the rate of growth in MOLPoints volume because our MOLPoints revenue take rate improved for 2015, primarily due to improvements in Thailand and Brazil and the United States, notwithstanding a slight decline in our take rates in Turkey and the Middle East and Malaysia.

• MOLReloads segment revenue increased by 13.5% to MYR41.1 million (US$9.6 million) for 2015 from MYR36.2 million for 2014 due to an increase in volume of 18.0% to MYR1,614.8 million from MYR1,368.6 million. Volume from Malaysia and the Philippines increased 17.6% and 7.5%, respectively, representing 92.4% and 6.2%, respectively of total MOLReloads volume. In Malaysia, volume growth has been primarily driven by bill payment services, which represented 9.4% of Malaysia’s MOLReloads volume in 2015. In addition, MOLReloads in Thailand expanded more than three-fold, although it still represented only 1.4% of total MOLReloads volumes for 2015. The rate of growth in MOLReloads segment revenue was lower than the rate of growth in MOLReloads volume because our MOLReloads revenue take rate for 2015 declined marginally compared to the prior year especially due to the lower revenue take rate from the bill payment services component of MOLReloads compared with the other components of our MOLReloads business.

• MOLPay segment revenue increased by 115.3% to MYR23.6 million (US$5.5 million) for 2015 from MYR11.0 million for 2014 due to increases in volume and revenue take rate. Volume increased 83.8% to MYR651.6 million from MYR354.5 million. MOLPay’s volumes in Vietnam and Malaysia grew by 69.9% and 126.2%, respectively, and represented 69.7% and 30.3%, respectively, of total MOLPay volume. The rate of growth in MOLPay segment revenue was higher than the rate of growth in MOLPay volume because our MOLPay revenue take rate for 2015 was higher compared with the prior year due to a favourable revenue mix, as an increased proportion of our volume was derived from, smaller merchants, from which we generally have higher revenue take rates than we do from larger merchants.

• MMOG.asia segment revenue decreased by 46.1% to MYR11.7 million (US$2.7 million) for 2015 from MYR21.7 million for 2014. Out of the 46.1% decline, 16.1% was due to the inclusion, in 2014 of the one-off proceeds of our sale of licensing rights for the game, Stallion Race, in the Middle East and Brazil markets and the remainder primarily due to the continued decline in the popularity of our legacy online PC games portfolio. Although mobile revenue as a proportion of overall MMOG.asia segment revenue increased as compared with 2014, we continued to experience some softness in our mobile revenue contribution towards the end of the year 2015. MMOG.asia’s overall PC and mobile volume decreased by 31.7% to MYR14.9 million for 2015 from MYR21.8 million for 2014. We are continuing to focus on enhancing MMOG.asia’s mobile content library to cope with the rapid shift in industry trends from PC to mobile games. MMOG.asia’s segment revenue declined at a higher rate than MMOG.asia’s volume because our overall MMOG.asia revenue take rate for 2015 was lower compared to the prior year, as revenue take rates from mobile games content are generally lower compared with those of PC games content.

Direct costs and other ancillary expenses. Direct cost and other ancillary expenses increased by 49.3% to MYR141.0 million (US$32.9 million) from MYR94.4 million in the prior year.

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• MOLPoints segment direct cost and other ancillary expenses increased by 48.4% to MYR101.6 million (US$23.7 million) for 2015 from MYR68.5 million for 2014 primarily due to significant volume growth in our mobile carrier businesses in Turkey and the Middle East, organic volume growth in Brazil and the United States. MOLPoints segment direct cost and other ancillary expenses increased at a higher rate than MOLPoints segment volume primarily due to growth in the carrier billing businesses, which generally incur higher costs than the other components of our MOLPoints segment. Due to relatively higher channel costs, our carrier billing business accounted for 47.2% of MOLPoints segment direct cost and other ancillary expenses for 2015 but only 19.4% of volume.

• MOLReloads segment direct cost and other ancillary expenses increased by 15.6% to MYR22.2 million (US$5.2 million) from MYR19.2 million in the prior year due to an increase in MOLReloads volume in each of Malaysia, the Philippines and Thailand.

• MOLPay segment direct cost and other ancillary expenses increased by 173.9% to MYR15.5 million (US$3.6 million) from MYR5.7 million in the prior year primarily due to increases in MOLPay volume in Vietnam and Malaysia of 69.9% and 126.2%, respectively. In addition, MOLPay segment direct cost and ancillary expenses also grew at a higher rate than MOLPay segment revenue and volume mainly due to a greater proportion of volume coming from larger and more established distribution partners, which charge higher channel costs than smaller distributors.

MMOG.asia segment direct cost and other ancillary expenses increased by 64.2% to MYR1.2 million (US$0.3 million) from MYR0.7 million in the prior year due to the expansion of mobile games content, which generally incur higher channel costs as compared with PC games content.

Gross profit. Gross profit decreased by 0.7% to MYR107.5 million (US$25.0 million) for 2015 from MYR108.3 million for 2014 primarily due to a 49.8% decrease in MMOG.asia’s gross profit. All other segments other than MMOG.asia registered a healthy gross profit growth with an 11.7% increase in MOLPoints segment gross profit, an 11.1% increase in MOLReloads segment gross profit and a 52.3% increase in MOLPay segment gross profit. Excluding MMOG.asia, the gross profit of the company increased by MYR9.7 million or 11.1% compared with the prior year. Our overall gross profit margin was 43.3% for 2015, compared to 53.4% in the prior year.

The decline in gross profit margin was primarily due to a shift in the business segment mix in which lower margin businesses, including the carrier billing component of MOLPoints, bill payment services component of MOLReloads and MOLPay as a whole, contributed more to the overall revenues than other businesses. In addition, we experienced higher channel costs for MOLPay in Vietnam. Furthermore, gross profit margin for MMOG.asia, which tends to be our highest gross profit margin segment, declined to 90.0% from 96.7% in the prior year primarily due to our focus on mobile games content, which offers a lower revenue take rate as compared with PC games content.

• MOLPoints segment gross profit increased by 11.7% to MYR68.7 million (US$16.0 million) for 2015 from MYR61.5 million for 2014 due to improved revenue take rates in Malaysia. Segment gross profit margin decreased to 40.3% for 2015 from 47.3% for 2014 due to a relatively lower gross profit margin from our carrier billing business compared to MOLPoints as a whole. The gross profit margin of our carrier billing businesses was 21.8% for 2015, while the gross profit margin of the other components of MOLPoints was 46.5%.

• MOLReloads segment gross profit increased by 11.1% to MYR18.9 million (US$4.4 million) for 2015 from MYR17.0 million for 2014 due to increased volume. Segment gross profit margin decreased to 46.0% for 2015 from 47.0% in the prior year, primarily due to the increase in revenue derived from bill payment services in Malaysia, which have a relatively lower revenue take rate compared with other components of MOLReloads.

• MOLPay segment gross profit increased by 52.3% to MYR8.1 million (US$1.9 million) for 2015 from MYR5.3 million for 2014 due to increased volume. Segment gross profit margin decreased to 34.1% in 2015 from 48.2% in the prior year, primarily due to a greater proportion of volume distributed by larger and more established distribution partners, which charge higher channel costs than smaller distributors. However, the revenue take rate improved as the merchant mix from our diverse merchant base was more favorable compared with 2014, as a greater proportion of revenue was derived from smaller merchants, which offer higher revenue take rates relative to larger merchants.

• MMOG.asia segment gross profit decreased by 49.8% to MYR10.5 million (US$2.4 million) for 2015 from MYR21.0 million for 2014, when revenue included proceeds of MYR5.0 million from our sale of licensing rights of the game, Stallion Race, in the Middle East and Brazil markets. In addition, compared with year 2014, we experienced decreased revenue from PC games and a higher proportion of segment revenue was derived from mobile games, which offer a lower take rate than PC games. The lower revenue take rate from mobile games content resulted in a lower gross profit margin of 90.0% for 2015 from 96.7% in the prior year.

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Employee expenses. Employee expenses increased 158.6% to MYR135.1 million for 2015 from MYR52.2 million for 2014 primarily due to a paper loss arising from share based compensation expenses of MYR85.8 million primarily as a result of our offer to terminate all outstanding call option agreements with option holders in June 2015, increased headcount and due to our full period operations from our acquisitions of Easy2Pay and PayByMe in 2015.

• MOLPoints’ segment employee expenses increased 31.8% to MYR29.6 million for 2015 from MYR22.5 million for 2014 primarily due to increased headcount and a full period of operations from our acquisitions of Easy2Pay and PayByMe, in May 2014 and September 2014, respectively.

• MOLReloads’ segment employee expenses increased 37.9% to MYR7.6 million for 2015 from MYR5.5 million for 2014 primarily due to increased headcount.

• MOLPay’s segment employee expenses increased 39.8% to MYR5.5 million for 2015 from MYR3.9 million for 2014 primarily due to increased headcount and increased volume.

• MMOG.asia’s segment employee expenses increased 1.8% to MYR3.2 million for 2015 from MYR3.2 million in 2014 due to prudent cost management.

Depreciation and amortization expenses. Depreciation and amortization expenses increased 15.1% to MYR28.0 million for 2015 from MYR24.4 million for 2014 primarily resulting from increased depreciation for MMOG.asia due to acquisitions of new games; and a full period of depreciation and amortization for our acquisitions of Easy2Pay and PayByMe, which resulted in increased in intangible assets, which are amortized over three to seven years.

Marketing, advertising and promotion expenses. Marketing, advertising and promotion expenses increased 31.2% to MYR8.0 million for 2015 from MYR6.1 million for 2014 due to increased marketing campaigns, especially in connection in MMOG.asia’s mobile launches and MOLThailand.

Communication and travelling expenses. Communication and travelling expenses increased 6.1% to MYR8.4 million for 2015 from MYR7.9 million for 2014.

Office-related expenses. Office-related expenses increased 33.2% to MYR5.7 million for 2015 compared with MYR4.3 million for 2014 due to expansion of our business resulting in increased office space.

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Other operating expenses. Other operating expenses increased 106.7% to MYR66.5 million for 2015 from MYR32.2 million for 2014 primarily due to the non-cash accounting adjustment of the impairment charge on goodwill and intangible asset of MYR38.4 million. This impairment charge arise when goodwill is considered impaired when its carrying amount exceeds its implied fair value. As a result of its annual impairment test, it was determined that a write down of MOLTurkey, Games Sultan and MyCNX Sdn. Bhd. goodwill was required, with the bulk of the impairment attributable to a sustained decline in sales.

Other operating income. Other operating income of MYR6.9 million for the year ended December 31, 2015 relates to foreign exchange gains attributable to operating transactions. Prior to the year ended December 31, 2015 foreign exchange gains attributable to operating transactions were insignificant.

Loss from operations. As a result of the foregoing, we incurred a loss from operations of MYR137.3 million for 2015 from MYR18.8 million for 2014.

• MOLPoints’ segment (loss)/profit from operations decreased 563.6% to loss from operation of MYR31.4 million for 2015 compared with a profit from operations of MYR6.8 million for 2014.

• MOLReloads’ segment profit from operations decreased 31.6% to MYR4.4 million for 2015 from MYR6.4 million for 2014.

• MOLPay’s segment loss from operations decreased 1.7% to MYR0.7 million for 2015 from MYR0.7 million for 2014.

• MMOG.asia’s segment (loss)/profit from operations decreased 437.3% to loss from operations of MYR12.0 million for 2015 compared with a profit from operations of MYR3.5 million for 2014.

• Total employee share options vested during the year and cancellation of the share based compensation amounted to MYR85.8 million.

• The non-cash charges of impairment loss on goodwill and intangible assets of MYR38.4 million.

Other income. Other income increased 58.2% to MYR12.0 million for 2015 from MYR7.6 million for 2014. Other income includes non-operating income for each period that primarily relates to foreign exchange gains not attributable to operations.

Finance costs. Finance costs increased 22.1% to MYR11.1 million for 2015 from MYR9.2 million for 2014 primarily due to unwinding of discount and change in estimates of gross obligations of MYR9.0 million for the present value of the redemption amount of the Put Options granted by MOL AccessPortal to the minority shareholders of PayByMe offsetted by the lower interest expense in 2015 due to the repayment of the MDV loan during the year.

Loss before tax. As a result of the foregoing, we incurred a loss before tax of MYR136.4 million for 2015 from MYR20.5 million for 2014.

• MOLPoints’ segment (loss)/profit before tax decreased 447.1% to a loss of MYR25.2 million for 2015 compared with a profit before tax of MYR7.3 million for 2014.

• MOLReloads’ segment profit before tax increased 91.0% to MYR6.1 million for 2015 from MYR3.2 million for 2014.

• MOLPay’s segment loss before tax increased 80.4% to MYR0.4 million for 2015 from MYR0.2 million for 2014.

• MMOG.asia’s segment (loss)/profit before tax decreased 412.4% to a loss of MYR11.1 million for 2015 compared with a profit before tax of MYR3.5 million for 2014.

• Total employee share options vested during the year and cancellation of the share based compensation amounted to MYR85.8 million.

• The non-cash charges of impairment loss on goodwill and intangible assets of MYR38.4 million.

Income tax expense. Income tax expense increased 282.3% to MYR2.5 million for 2015 from MYR0.6 million for 2014 primarily because we incurred higher taxable profits for 2015.

Loss for the year. As a result of the foregoing, we incurred a loss for the year of MYR138.9 million for 2015 from MYR21.1 million for 2014 mainly due to higher operating expenses incurred in connection with our share based compensation expenses, in addition to increased headcount and lower gross profit contribution from MMOG.asia.

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Other comprehensive income for the year, net of tax. Other comprehensive income for the year, net of tax decreased 54.4% to MYR4.9 million for 2015 from MYR10.7 million for 2014. This was primarily due to a foreign currency translation gain resulting from a weakening of the Malaysian Ringgit particularly against the U.S. Dollar in 2015 as compared to 2014. However, the quantum of the decrease in Malaysian Ringgit is not as significant as in 2014, resulting to a lower foreign currency translation gain in 2015.

Total comprehensive loss for the year. As a result of the foregoing, we incurred a total comprehensive loss of MYR134.0 million for 2015 from MYR10.4 million for 2014.

Year ended December 31, 2014 compared to year ended December 31, 2013

Revenue. Revenue increased 18.2% to MYR202.7 million for 2014 from MYR171.5 million for 2013 primarily due to increased revenue from all segments except MMOG.asia.

• MOLPoints’ segment revenue increased 26.8% to MYR130.0 million for 2014 from MYR102.5 million for 2013 primarily due to increased volume. MOLPoints’ volume increased 21.4% to MYR715.6 million in 2014 from MYR589.3 million in 2013, primarily due to a 52.1% increase in volume in Thailand to MYR240.2 million for 2014 from MYR158.0 million for 2013 primarily resulting from growth of LINE, a mobile chat service which accepts MOLPoints as payment for its digital content; a 20.0% increase in volume in Indonesia to MYR40.2 million for 2014 from MYR33.5 million for 2013 primarily resulting from our focus on expanding distribution in Indonesia and a full year of revenue contribution from Ayopay, which we acquired in March 2013; a 260.3% increase in volume in Brazil to MYR27.0 million for 2014 from MYR7.5 million for 2013 primarily due to the increased popularity of games in the Brazilian market for which MOLPoints are accepted; and our acquisitions of Easy2Pay and PayByMe in May 2014 and September 2014, respectively. MOLPoints’ active registered paying users increased by 2.8% to 1,035,233 as of December 31, 2014 from 1,007,344 as of December 31, 2013.

• MOLReloads’ segment revenue increased 4.8% to MYR36.2 million for 2014 from MYR34.5 million for 2013 mainly due to increased volume. MOLReloads’ volume increased 12.7% to MYR1,368.6 million for 2014 from MYR1,214.0 million for 2013. This was primarily due to a 13.0% increase in volume in Malaysia to MYR1,269.4 million in 2014 from MYR1,123.5 million in 2013. MOLReloads’ active retailers increased 4.3% to 38,795 as of December 31, 2014 from 37,204 as of December 31, 2013.

• MOLPay’s segment revenue increased 16.4% to MYR11.0 million for 2014 from MYR9.4 million for 2013 primarily due to increased volume. MOLPay’s volume increased 145.7% to MYR354.5 million for 2014 from MYR144.3 million for 2013 primarily due to a full period of MOLPay’s operations in Vietnam following our acquisition of Nganluong in March 2013, in addition to organic growth in Vietnam. MOLPay’s volume in Vietnam increased 237.2% to MYR267.2 million for 2014 from MYR79.2 million for 2013 primarily due to significant volume contributed by one of our largest online merchants which sells digital content. MOLPay’s base of online merchants in Vietnam increased to 2,416 as of December 31, 2014 from 2,346 as of December 31, 2013. In addition, we have begun to use an aggregator to work with smaller merchants in Vietnam. Although we count the aggregator as a single merchant based on our direct relationship with the aggregator, the aggregator is responsible for MOLPay’s indirect relationships with a large number of smaller merchants. MOLPay’s volume in Malaysia increased 34.3% to MYR87.3 million for 2014 from MYR65.0 million for 2013. MOLPay’s base of online merchants in Malaysia increased to 1,389 as of December 31, 2014 from 1,109 as of December 31, 2013. The percentage increase in MOLPay’s segment revenue was less than the percentage increase in MOLPay’s volume as a result of the overstatement of MOLPay’s segment revenue for 2013 by MYR4.3 million. MOLPay’s segment revenue derived from our subsidiary in Vietnam was reported on a net basis for 2014 such that fees payable to merchants were netted out of revenue and not included in direct cost and other ancillary expenses. Such segment revenues were reported on a gross basis for 2013, such that fees payable to merchants were not netted out of revenues but were included in direct cost and other ancillary expenses. MOLPay’s segment net revenue for future periods will be reported on a net basis. On a net basis, MOLPay’s segment revenue increased 114.6% compared to 2013 primarily due to increase in volume.

• MMOG.asia’s segment revenue decreased 8.4% to MYR21.7 million in 2014 from MYR23.7 million in 2013 primarily due to the declining popularity of certain older games being less than fully offset by newly launched games. The decline in MMOG.asia’s segment revenue was partially offset by the sale of licensing rights to a game, Stallion Race, for markets in the Middle East and Brazil in the fourth quarter of 2014. MMOG.asia’s segment revenue decreased in 2014 was also affected by delays in launching new mobile games according to schedule due to certain technical issues, including delays in the localization process by game developers and delays in obtaining approval for one game from the iOS platform. MMOG.asia’s active paying users decreased 48.7% to 56,865 as of December 31, 2014 from 110,826 as of December 31, 2013 primarily due to the replacement of older games with newer games that are still developing traction in the market.

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Direct costs and other ancillary expenses. Direct costs and other ancillary expenses increased 34.9% to MYR94.4 million for 2014 from MYR70.0 million for 2013 due to increased direct costs and other ancillary expenses in our MOLPoints and MOLReloads segments.

• MOLPoints’ segment direct costs and other ancillary expenses increased 47.0% to MYR68.5 million for 2014 from MYR46.6 million for 2013 primarily due to increased volume, including as a result of our acquisitions of Easy2Pay and PayByMe in May 2014 and September 2014, respectively, and changes in the mix of digital content sold reflecting an increase in the proportion of content for which our revenue sharing arrangements are relatively less favorable.

• MOLReloads’ segment direct costs and other ancillary expenses increased 17.7% to MYR19.2 million for 2014 from MYR16.3 million for 2013 primarily due to increased volume and unfavorable changes to our revenue sharing arrangements with certain telecommunications service providers.

• MOLPay’s segment direct cost and other ancillary expenses was stable at MYR5.7 million for 2014 and 2013, as a result of the overstatement of MOLPay’s segment direct cost and ancillary expenses for 2013 by MYR4.3 million. MOLPay’s segment direct costs and other ancillary expenses derived from Nganluong, our subsidiary in Vietnam, was reported on a net basis for 2014 such that fees payable to merchants were netted out of revenue and not included in direct cost and other ancillary expenses. Such segment direct costs and other ancillary expenses were reported on a gross basis for 2013, such that fees payable to merchants were not netted out of revenues but were included in direct cost and other ancillary expenses. MOLPay’s segment direct costs and other ancillary expenses for future periods will be reported on a net basis. On a net basis, MOLPay’s segment direct costs and other ancillary expenses increased 302.8% compared to 2013 primarily due to increased volume.

• MMOG.asia’s segment direct costs and other ancillary expenses decreased 40.7% to MYR0.7 million for 2014 from MYR1.2 million for 2013 primarily due decreased volume.

Segment gross profit. As a result of the foregoing, aggregate gross profit for our segments increased 6.7% to MYR108.3 million for 2014 from MYR101.5 million for 2013, primarily due to increased segment gross profit in MOLPoints, MOLPay and Others. Our gross profit margin across all segments decreased to 53.4% for 2014 from 59.2% for 2013 primarily due to reduced gross profit margin in our MOLPoints and MOLReloads segments.

• MOLPoints’ segment gross profit increased 10.0% to MYR61.5 million for 2014 from MYR55.9 million for 2013 due to increased volume. Segment gross profit margin decreased to 47.3% for 2014 from 54.5% for 2013. The decline in MOLPoints’ segment gross profit margin is primarily attributable to reduced profitability in Thailand and Turkey resulting from unfavorable revenue sharing arrangements, in addition to our acquisition of PayByMe in September 2014. As a provider of mobile carrier billing services, PayByMe is a less profitable component as compared to the other components of MOLPoints’ business.

• MOLReloads’ segment gross profit decreased 6.8% to MYR17.0 million for 2014 from MYR18.2 million for 2013 due to unfavorable changes to our revenue sharing arrangements with certain telecommunications service providers. Segment gross profit margin decreased to 47.0% for 2014 compared with 52.8% for 2013 primarily due to higher channel costs.

• MOLPay’s segment gross profit increased 42.9% to MYR5.3 million for 2014 from MYR3.7 million for 2013 due to increased volume. Segment gross profit margin increased to 48.2% for 2014 compared with 39.3% for 2013 primarily due to reduced channel costs at Nganluong.

• MMOG.asia’s segment gross profit decreased 6.7% to MYR21.0 million for 2014 from MYR22.5 million for 2013 due to decreased revenue. Segment gross profit margin increased to 96.7% for 2014 from 94.9% for 2013.

Employee expenses. Employee expenses increased 68.7% to MYR52.2 million for 2014 from MYR31.0 million for 2013 primarily due to share based compensation expenses of MYR15.7 million, in addition to a full period of operations in Vietnam and Turkey, a full period of operations of Ayopay in Indonesia, increased headcount including due to our acquisitions of Easy2Pay and PayByMe and increased employee expenses per employee.

• MOLPoints’ segment employee expenses increased 13.0% to MYR22.5 million for 2014 from MYR19.9 million for 2013 primarily due to a full period of operations in Turkey and our acquisitions of Easy2Pay and PayByMe, in May 2014 and September 2014, respectively.

• MOLReloads’ segment employee expenses increased 23.0% to MYR5.5 million for 2014 from MYR4.5 million for 2013 primarily due to annual increases in employee expenses per employee.

• MOLPay’s segment employee expenses increased 69.3% to MYR3.9 million for 2014 from MYR2.3 million for 2013 primarily due to a full period of operations in Vietnam.

• MMOG.asia’s segment employee expenses increased 7.6% to MYR3.1 million for 2014 from MYR2.9 million in 2013, primarily due to increased headcount, including in connection with hiring a team to operate mobile games, which was not commercially launched and did not generated revenue in 2014.

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Depreciation and amortization expenses. Depreciation and amortization expenses increased 18.5% to MYR24.4 million for 2014 from MYR20.6 million for 2013 primarily resulting from increased depreciation for MMOG.asia due to acquisitions of new games; a full period of depreciation and amortization for our operations in Turkey, which includes substantial property, plant and equipment and intangible assets, including exclusive licenses and distribution rights for online games; and our acquisitions of Easy2Pay and PayByMe, which resulted in increased in intangible assets, which are amortized over three to seven years.

Marketing, advertising and promotion expenses. Marketing, advertising and promotion expenses decreased 26.8% to MYR6.1 million for 2014 from MYR8.3 million for 2013 due to reduced marketing campaigns.

Communication and travelling expenses. Communication and travelling expenses increased 38.4% to MYR7.9 million for 2014 from MYR5.7 million for 2013 primarily due to expansion to new countries including Turkey and Vietnam.

Office-related expenses. Office-related expenses increased 11.1% to MYR4.3 million for 2014 compared with MYR3.9 million for 2013 due to expansion of our business resulting in increased office space.

Other operating expenses. Other operating expenses increased 382.5% to MYR32.2 million for 2014 from MYR6.7 million for 2013 primarily due to expenses incurred in connection with our initial public offering, certain non-recurring costs in connection with the review of our interim results for the third quarter of 2014 and a full period of operations in Turkey and Vietnam, in addition to expenses incurred to engage a consultant to advise on purchase price allocation in connection with the audit of our financial statements, advisory fees paid for legal and due diligence relating to potential new business in Thailand, and expenses incurred by Rixty to engage an engineering software consultant.

Profit/(loss) from operations. As a result of the foregoing, we incurred a loss from operations of MYR18.8 million for 2014 compared with a profit from operations of MYR25.4 million for 2013.

• MOLPoints’ segment profit from operations decreased 36.7% to MYR6.8 million for 2014 from MYR10.7 million for 2013 primarily due to increased employee costs, additional depreciation and acquisition related cost expensed.

• MOLReloads’ segment profit from operations decreased 33.1% to MYR6.4 million for 2014 from MYR9.6 million for 2013 primarily due to increased employee costs.

• MOLPay’s segment loss from operations increased 37.8% to MYR0.7 million for 2014 from MYR0.5 million for 2013 primarily due to increased volume, partially offset by increased employee costs.

• MMOG.asia’s segment profit from operations decreased 45.8% to MYR3.5 million for 2014 from MYR6.5 million for 2013 primarily due to increased depreciation and amortization expenses and increased marketing, advertising and promotion expenses.

Other income. Other income increased 199.6% to MYR7.6 million for 2014 from MYR2.5 million for 2013. Other income includes non-operating income for each period that primarily relates to a derivative fair value adjustment due to the revaluation of put options that we have granted with respect to the 30% minority interests in each of Game Sultan and PaytoGo. Pursuant to the terms of our agreements with the minority shareholders of Game Sultan and PaytoGo, the amount that we would be required to pay upon the exercise of these put options decreased as a result of the unfavorable performance of Game Sultan and PaytoGo since we granted the put options in February 2013. These put options are no longer outstanding following our acquisition of the remaining 30% interest in each of Game Sultan and PaytoGo.

Finance costs. Finance costs increased 79.7% to MYR9.2 million for 2014 from MYR5.1 million for 2013 mainly arising from recognition of unwinding of discount and change in estimates of gross obligations in relation to Put Options granted by MOL AccessPortal, in connection with the acquisition by MOL AccessPortal of a 51% equity interest in PayByMe.

Profit/(loss) before tax. As a result of the foregoing, we incurred a loss before tax of MYR20.5 million for 2014 compared with a profit of MYR19.8 million for 2013.

• MOLPoints’ segment profit before tax decreased 40.3% to MYR7.3 million for 2014 from MYR12.2 million for 2013.

• MOLReloads’ segment profit before tax decreased 35.5% to MYR3.2 million for 2014 from MYR4.9 million for 2013.

• MOLPay’s segment loss before tax decreased 58.4% to MYR0.2 million for 2014 from MYR0.5 million for 2013.

• MMOG.asia’s segment profit before tax decreased 46.6% to MYR3.5 million for 2014 from MYR6.6 million for 2013.

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Income tax expense. Income tax expense decreased 44.9% to MYR0.6 million for 2014 from MYR1.2 million for 2013 primarily because we incurred a loss before tax for 2014. The effective tax rate is higher than the statutory tax rate of 25% in Malaysia mainly due to losses incurred by us and our subsidiaries which were not set off against taxable profits made by other subsidiaries. In addition to the recognition of a deferred tax asset on the timing difference attributable to accelerated capital allowance and for the carryforward of unused tax losses.

Profit/(loss) for the year. As a result of the foregoing, we incurred a loss for the year of MYR21.1 million for 2014 compared with a profit for the year of MYR18.7 million for 2013 mainly due to expenses incurred in connection with our initial public offering and share based compensation expenses, in addition to increased overall employee costs.

Other comprehensive income/(loss) for the year, net of tax. Other comprehensive income for the year, net of tax was MYR10.7 million for 2014 as compared to other comprehensive loss for the year, net of tax of MYR3.8 million for 2013. This was primarily due to a foreign currency translation gain resulting from a weakening of the Malaysian Ringgit against the U.S. dollar in 2014, whereas our comprehensive loss in 2013 primarily resulted from foreign currency translation losses as a result of a strengthening of the Malaysian Ringgit, particularly against the Turkish Lira and Vietnamese Dong.

Total comprehensive income/(loss) for the year. As a result of the foregoing, we incurred a total comprehensive loss of MYR10.4 million for 2014 compared to total comprehensive income of MYR14.9 million for 2013.

B. Liquidity and capital resources

Our principal sources of liquidity have been cash generated from shareholders’ equity and borrowings, including interest-free advances from related parties. Our cash and cash equivalents consist of cash on hand and deposits placed with banks, a portion of which are restricted trust deposits that we are required to maintain in order to remain in compliance with Guidelines on Electronic Money issued by BNM. In addition, as required under the terms of our acquisition of PayByMe, we secured a bank guarantee for the benefit of the holders of the non-controlling interest of PayByMe by pledging an amount of MYR34.3 million.

Working Capital

As of December 31, 2013, our current liabilities exceeded our current assets by MYR77.7 million, and as of December 31, 2014 and 2015, our current assets exceeded our current liabilities by MYR115.5 million and MYR88.5 million, respectively. We had a negative working capital position as of December 31, 2013 primarily because borrowings under our credit facility from MDV are required by applicable accounting guidance to be classified as current liabilities because the facility is a revolving facility. In addition, amounts due to other related parties are classified as current liabilities as of the relevant balance sheet dates because there are no stated repayment terms. Our negative working capital position as of December 31, 2013 does not relate to timing issues relating to when we receive and disburse cash. As of December 31, 2013, 2014 and 2015, current borrowings comprised MYR69.6 million, MYR52.7 million and MYR15.9 million, respectively, and amounts due to other related parties comprised MYR30.7 million, MYR0.6 million and MYR1.2 million, respectively.

We believe that we have adequate working capital for our present requirements and that our net cash generated from operating activities, together with cash and cash equivalents and funds from currently available financing sources, will provide sufficient funds to satisfy our working capital requirements for the next 12 months.

The ability of our subsidiaries to pay dividends or make other payments to us may be restricted by the foreign exchange control policies in the countries in which we operate. For example, there are foreign exchange policies in Malaysia which support the monitoring of capital flows into and out of the country in order to preserve its financial and economic stability. Under the current Foreign Exchange Administration rules issued by BNM, non-residents such as the Issuer, are free to repatriate any amount of funds from Malaysia in foreign currency other than the currency of Israel at any time (subject to limited exceptions), including capital, divestment proceeds, profits, dividends, rental, fees and interest arising from investment in Malaysia, subject to any withholding tax. Furthermore, dividends from certain subsidiaries, including our subsidiaries in Thailand, Turkey and the Philippines, may be subject to local withholding tax. See “Risk Factors—Risks Related to Doing Business in Malaysia and Other Countries Where We Operate—We are subject to foreign exchange control policies in Malaysia and other countries where we operate.

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Capital Expenditures

Our capital expenditures primarily relate to the acquisition of computer equipment and software for our platform, and the acquisition and development of web applications, software products and programs. Our capital expenditures for the years ended December 31, 2013, 2014 and 2015 were MYR16.5 million, MYR11.6 million and MYR17.8 million, respectively.

Cash Flow

The following table sets forth our cash flows for the specified years.

	For the year ended December 31,
	2013			2014			2015
	(MYR in millions)
Summary Consolidated Statements of Cash Flows Data
Net cash from operating activities		54.0			20.8			4.6
Net cash used in investing activities		(60.6	)		(59.5	)		(19.0	)
Net cash from/(used in) financing activities		27.3			133.4			(51.5	)
Net increase/(decrease) in cash and cash equivalents		20.7			94.7			(65.9	)
Cash and cash equivalents at beginning of year		32.1			49.7			150.6
Effect on exchange rate changes		(3.0	)		6.1			9.4
Cash and cash equivalents at end of year		49.7			150.6			94.1

Cash flows from operating activities

Our operating activities primarily comprise our sales of MOLPoints payment credits, MOLReloads e-vouchers for mobile airtime and MOLPay payment processing services and our operation of our games portal, MMOG.asia and certain non-core business operations.

Net cash provided by operating activities for 2015 was MYR4.6 million primarily comprising loss before tax of MYR136.4 million adjusted for non-cash transactions, including depreciation and amortization of MYR28.0 million, impairment loss on goodwill and intangible assets of MYR38.4 million, unwinding of discount and changes in estimates of gross obligations of MYR9.0 million, share based compensation of MYR85.8 million; unrealized gain on foreign exchange of MYR12.1 million; interest expense of MYR1.4 million primarily relating to our loan from MDV to finance our working capital requirements in connection with the growth of our MOLReloads and MOLPoints businesses in Malaysia; interest income of MYR2.2 million; an increase of MYR75.9 million in trade payables, other payables and accrued expenses and an increase in deferred revenue of MYR4.6 million resulting from the growth of our business in Thailand, Vietnam and PayByMe, respectively, partially offset by an increase of MYR77.0 million in trade receivables, other receivables, deposits and prepaid expenses and a MYR8.3 million increase in inventories in line with the increase in sales volume; partially offset by interest paid of MYR2.2 million and income tax paid of MYR5.3 million.

Net cash provided by operating activities for 2014 was MYR20.8 million primarily comprising loss before tax of MYR20.5 million adjusted for non-cash transactions, including depreciation and amortization of MYR24.4 million partly in connection with the subsidiaries which we acquired in 2013 and 2014 and which have substantial property, plant and equipment and intangible assets; a derivative fair value adjustment of MYR3.7 million relating to the revaluation as of December 31, 2014 of put options that we granted with respect to the 30% minority interests in Game Sultan and PaytoGo; recognition of unwinding of discount and changes in estimates of gross obligations of MYR3.2 million relating to the changes in the measurement of the gross obligation arising from the put options that our wholly-owned subsidiary MOL AccessPortal granted with resepct to the 49% minority interest in PayByMe; share based compensation of MYR15.7 million; unrealized loss on foreign exchange of MYR3.4 million; interest expense of MYR6.0 million primarily relating to our loan from MDV to finance our working capital requirements in connection with the growth of our MOLReloads and MOLPoints businesses in Malaysia; an increase of MYR26.5 million in trade payables, other payables and accrued expenses resulting from the growth of our business in Thailand and Vietnam and our acquisitions of EasytoPay and PayByMe in May 2014 and September 2014, respectively, partially offset by an increase of MYR22.9 million in trade receivables, other receivables, deposits and prepaid expenses primarily resulting from a MYR2.0 million increase in deposits to the sinking fund for our revolving credit facility with MDV, MYR16.0 million of trade receivables from 7-Eleven, which had in prior years settled its trade receivables before they came due and in 2014 settled its trade receivables when they became due; MYR2.2 million of trade receivables from MOL Thailand due to increased volume; and a MYR1.0 million increase in inventories in line with the increase in sales volume; partially offset by interest paid of MYR6.0 million and income tax paid of MYR6.7 million.

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Net cash provided by operating activities for 2013 was MYR54.0 million primarily comprising profit before tax of MYR19.8 million adjusted for non-cash transactions including depreciation and amortization expenses of MYR20.6 million including amortization of exclusive licenses and distribution rights for online games including in connection with Game Sultan and PaytoGo (which we acquired in 2013) and MMOG.asia (which we acquired in 2012) a derivative fair value adjustment of MYR3.0 million relating to the revaluation as of December 31, 2013 of put options that we granted with respect to the 30% minority interests in each of Game Sultan and PaytoGo; and an increase of MYR11.6 million in trade payables, other payables and accrued expenses resulting from the growth of our MOLPoints business in Malaysia and Thailand; partially offset by an increase of MYR1.7 million in trade receivables, other receivables, deposits and pre-paid expenses primarily due to the expansion of our business resulting from our acquisition of each of Game Sultan, PaytoGo and Nganluong, interest paid of MYR5.1 million primarily in connection with our borrowings under our revolving credit facility with MDV to finance our working capital requirements in connection with the growth of our MOLReloads and MOLPoints businesses in Malaysia and income tax paid of MYR4.5 million.

Cash flows used in investing activities

Our investing activities primarily relate to purchases and disposals of property, plant and equipment comprising buildings, computer equipment and software, furniture, fittings and office equipment, renovation and motor vehicles; purchases and disposals of intangible assets comprising goodwill, which includes the domain name of MOL.com and goodwill on consolidation of acquired subsidiaries; and other intangible assets, which consist of our electronic payment system, our exclusive license and distribution rights of online games and reloads, and intellectual property, including computer software that is not an integral part of the related hardware; and development expenditure incurred for web applications, software products and programs.

Net cash used in investing activities for 2015 was MYR19.0 million primarily comprising cash outflows of MYR3.5 million for purchases of property, plant and equipment; MYR7.4 million for purchases of intangible assets comprising rights to online game purchases by MyCNX and MOL AccessPortal; and MYR4.5 million for development expenditure in connection with the enhancement of our localized web portals for MOLPoints in Malaysia, Indonesia, Australia, Taiwan, Vietnam and New Zealand markets, in addition to development of our MOL mobile website and MOLReloads’ integration services and proceeds received from the disposal of investment property by MyCNX of MYR2.5 million. Furthermore, restricted cash flows increased as mainly due to our deposit of MYR9.2 million from MOL AccessPortal which represents an amount under escrow which is required in compliance with Bank Negara Malaysia.

Net cash used in investing activities for 2014 was MYR59.5 million primarily comprising cash outflows of MYR20.9 million in connection with our acquisitions of Easy2Pay and PayByMe in May 2014 and September 2014, respectively. In addition we incurred cash outflows of MYR5.6 million for purchases of property, plant and equipment in connection with our migration to SAP in Malaysia, Turkey, Thailand and Vietnam; MYR1.1 million for purchases of intangible assets comprising rights to online game purchases by MyCNX; MYR0.8 million for purchase of available for sale financial assets; and MYR3.4 million for development expenditure in connection with the enhancement of our localized web portals for MOLPoints in Malaysia, Indonesia, Australia, Taiwan, Vietnam and New Zealand markets, in addition to development of our MOL mobile website and MOLReloads’ integration of Touch ‘n Go and bill payment services. Furthermore, restricted cash flows increased as a mainly due to our deposit of MYR29.6 million to secure bank guarantees for the benefit of minority shareholders of PayByMe in December 2014, as required under the terms of our acquisition of PayByMe.

Net cash used in investing activities for 2013 was MYR60.6 million primarily comprising a MYR2.3 million increase in restricted fixed deposits, including in connection with our acquisition of Nganluong for which we maintain specified amounts on deposit in Vietnam and investments in restricted fixed deposits for unutilized MOLPoints in accordance with the investment restrictions under the Guidelines on Electronic Money issued by BNM, MYR3.3 million for purchases of property, plant and equipment in connection with computer equipment and software primarily for MyCNX and MOL Thailand, MYR9.1 million for purchases of intangible assets comprising rights to online games purchased by MyCNX and Ayopay, MYR2.5 million for development expenditure in connection with the feature-enhancement and expansion of our network of localized web portals for MOLPoints, in addition to the development of our mobile website and feature-enhancement with respect to our MOLReloads terminal network, and MYR44.4 million for acquisition of subsidiaries relating to our acquisitions of Game Sultan, PaytoGo and Nganluong.

Cash Flows from Financing Activities

Our financing activities primarily consist of borrowings share repurchases and dividends paid.

Net cash used in financing activities for 2015 was MYR51.5 million primarily comprising of MYR10.4 million cash outflows to repurchase shares; MYR77.0 million net cash outflows to repay our revolving credit facility from MDV; dividends of MYR3.7 million paid to the minority shareholders of MyCNX and MOL Thailand and Nganluong and net cash inflows of proceeds from borrowings from MDV.

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Net cash from financing activities for 2014 was MYR133.4 million primarily comprising of MYR282.0 million net proceeds from issuance of new shares upon our initial public offering and MYR0.9 million capital contribution from minority shareholders, partially offset by MYR11.6 million cash outflows to repurchase shares, MYR81.9 million in connection with our increased beneficial ownership interests in our subsidiaries, MOL Thailand, Game Sultan, PaytoGo and MyCNX; MYR30.0 million and MYR17.2 million net cash outflows to settle outstanding amounts due to related parties, partially repay our revolving credit facility from MDV and dividends of MYR7.4 million paid to the minority shareholders of MyCNX and MOL Thailand and Nganluong.

Net cash from financing activities for 2013 was MYR27.3 million primarily comprising MYR17.3 million of proceeds from borrowings under our revolving credit facility from MDV to finance our working capital requirements in connection with the growth of our MOLReloads and MOLPoints businesses in Malaysia and MYR15.3 million of amounts due to other related parties, which primarily represents the net amount received from MOL Ventures to fund our acquisition of Game Sultan, PaytoGo and Nganluong, partially offset by dividends of MYR4.1 million paid to the minority shareholders of MyCNX and MOL Thailand.

Borrowings

As of December 31, 2015, our total borrowings, including current borrowing and non-current borrowings, were MYR17.8 million.

In December 2015, we have renewed the revolving credit facility from MDV and revised the principal amount of the facility from MYR68 million to MYR 20 million. This facility bears interest at 7.25% per annum. The facility is secured by, among other things, a charge over our all present and future assets and undertakings. This loan is subject to covenants which place certain restrictions on our activities, including the payment of dividends and encumbrance of assets. Under the terms of this facility we are required to maintain a sinking fund to be funded by contributions of MYR0.3 million per quarter during the first year of the facility and MYR0.5 million per quarter for the remaining term of the facility. As of December 31, 2015, MYR14 million was outstanding under this facility. As of February 26, 2016, MYR20 million was outstanding under this facility. This loan is guaranteed by our major shareholder, Tan Sri Dato’ Seri Vincent Tan, as well as entities under his control.

C. Research and development, patents and licenses, etc.

In 2013, 2014 and 2015, we spent MYR2.7 million, MYR3.7 million and MYR4.7 million, respectively on company-sponsored research and development activities.

See Item 4.B, “Business Overview — Intellectual Property.”

D. Trend information

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2015 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E. Critical Accounting Policies and Significant Estimates

A critical accounting policy is defined as one that is both material to the presentation of the Company’s consolidated financial statements and that requires us to make difficult, subjective or complex judgments that could have a material effect on the Company’s financial condition or results of operations. Specifically, these policies have the following attributes: (1) We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and (2) different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on the Company’s financial condition or results of operations.

In the application of our accounting policies, we are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions about future events and their effects cannot be determined with certainty. We bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the Consolidated financial statements as soon as they became known. In addition, we periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties include those discussed in Risk Factors. For more information, see Item 3.D. Key Information – Risk factors.

Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believes that the Company’s consolidated financial statements are fairly stated in accordance with IFRS, and provide a meaningful presentation of the Company’s financial condition and results of operations.

A discussion of these critical accounting policies and estimates is provided below and should be read in conjunction with the disclosure of our significant IFRS accounting policies. For more information, see Item 3.0 Consolidated Notes to the Financial Statement.

We has discussed its critical accounting estimates and associated disclosures with the Company’s Audit and Risk Committee.

Business Combinations

Acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by us in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred.

Where a business combination is achieved in stages, our previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date we attains control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (revised) are recognized at their fair value at the acquisition date, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;

• liabilities or equity instruments related to the replacement by us of an acquiree’s share-based payment awards are measured in accordance with IFRS 2 Share-based Payment; and

• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

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If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, we report provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

The measurement period is the period from the date of acquisition to the date we obtain information about facts and circumstances that existed as of the acquisition date—and is subject to a maximum of one year.

When we acquire an interest in an entity which upon acquisition will be a non-wholly owned subsidiary, and as part of the acquisition, also enters into an in-substance forward with a written put option with the seller that permits the seller to put their remaining interest in the acquired entity to us, and a written call option with the seller that permits us to call the seller to sell their remaining interest in the acquired entity to us, at a specific price, a gross obligations is recognized at an amount equal to the present value of the amount that could be required to be paid to the counterparty. Changes in the measurement of the gross obligations due to the unwinding of the discount and change in estimates of gross obligations that we could be required to pay are recognized in profit or loss. We will reclassify the liability to equity if the put option expires unexercised.

Merger Accounting for Business Combinations Involving Entities Under Common Control

The consolidated financial statements incorporate the financial statements items of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the common control of the controlling party.

The assets and liabilities of the combining entities or businesses are consolidated using the existing book values. No amount is recognized in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling party’s interest.

The consolidated statements of profit or loss and other comprehensive income include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under the common control, where this is a shorter period, regardless of the date of the common control combination.

The comparative amounts in the consolidated financial statements are presented as if the entities or businesses had been combined at the end of the previous reporting period or when they first came under common control, whichever is shorter.

Goodwill and Intangible Assets with Indefinite Useful Lives

Goodwill arising in a business combination is recognized as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, our interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Impairment of Goodwill

Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of our cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.

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Impairment of Non-financial Assets Excluding Goodwill

At the end of each reporting period, we review the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, we estimate the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Goodwill and Intangible Assets with Indefinite Useful Lives

We assesses whether there are any indicators of impairment of goodwill and intangible assets with indefinite useful lives at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. When value in use calculations are undertaken, management estimates the expected future cash flows from the asset or cash generating unit (“CGU”) and chooses a suitable discount rate in order to calculate the present value of those cash flows.

We prepares cash flow forecasts for the next five years which is approved by management. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs and other ancillary expenses during the period. We estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the subsidiaries. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

While we believes that the assumptions are appropriate and reasonable, significant changes in the assumptions may materially affect the assessment or recoverable amounts and may lead to future impairment charges. The carrying amount of our goodwill as at the reporting date is MYR70,276,161 (2014: MYR105,773,870; 2013: MYR 79,723,699). The carrying amount of intangible assets with indefinite useful lives as at the reporting date is MYR12,034,650 (2014: MYR12,034,650; 2013: MYR12,034,650).

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We have adopted a uniform method for assessing goodwill for impairment and any other intangible asset indicated as being possibly impaired. Generally, for intangible assets we use cash flow projections for the whole useful life of these assets, and for goodwill, we utilize cash flow projections for a five-year period based on management forecasts, with a terminal value based on sales projections usually in line with or lower than inflation rates for later periods. Discount rates used are based on our weighted average cost of capital as an approximation of the weighted average cost of capital of a comparable market participant, which are adjusted for specific country and currency risks associated with cash flow projections. Due to the above factors, actual cash flows and values could vary significantly from forecasted future cash flows and related values derived using discounting techniques.

Factors that could result in shortened useful lives or impairments include:

• Lower-than-expected revenue or take rate from game contents due the stage of maturity of existing game contents and competition from existing and established players

• Lower-than-anticipated future sales resulting from (i) the rate of successful launches of new games and (ii) shift in the market from PC games to mobile games affecting consumer buying habits

• Lower-than-expected revenue and take rate inherent with mobile games, shorter useful lives and the higher associated marketing costs relative to PC games

• Higher-than-expected direct costs of our distribution partnerships due to competition from other players, new and established resulting in higher channel costs

In 2015, impairment charges of MYR36.9 million were recorded. This is relating to various impairment charges of MYR 33.3 million from our GameSultan and PaytoGo business which experienced a higher impairment due to the change in market dynamics of the games-pins business and the decline in popularity in our higher margin Joygame content together with the unexpected loss of exclusivity of certain global content. In addition, GameSultan also experienced adverse impact effects from the PC to mobile games which has affected its revenue and gross margin. In addition, MyCNX experienced a MYR 3.2 million impairment charge, mainly due to the rapid shift from PC to mobile games, the delays in launching new mobile games and the inherent competitive environment within the mobile games component leading to lower take rate and shorter life span relative to PC games while MOL AccessPortal Pty Ltd was impaired by MYR 0.4 million due to slower growth rate in 2015 than originally expected due to the maturity of the market.

In terms of intangible assets, we also impairment of exclusive license and distribution rights of online games and reloads (Ayopay) due to the shift in the competitive environment, with more competitors in the market space, adding to both margins contraction and lower profitability. In addition, Ayopay face higher cost of doing business in Indonesia due to the fragmented market environment.

Although no significant additional impairments are currently anticipated, impairment testing could lead to material impairment charges in the future. For more information, see ‘‘Item 18. Financial Statements—note 21.

For Ngan Luong, we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 13% to 38% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 1.2%, on gross sales which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 26.43%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR10.4million as of December 31, 2015. The estimated fair value of the reporting unit exceeded its carrying value by 4% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

For RixtyInc. (USA), we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 20% to 31% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 12% on gross sales, which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 22.93%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR9.7million as of December 31, 2015. The estimated fair value of the reporting unit exceeded its carrying value by 27% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

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For MOL AccessPortal, Inc.(MOL Philippines), we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 10% to 28% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 4% to 5% on gross sales, which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 23.08%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR6.9million as of December 31, 2015. The estimated fair value of the CGU exceeded its carrying value by 49% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

For MOL AccessPortal Co. Ltd.(MOL Thailand), we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 2% to 5% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 2% on gross sales, which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 19.47%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR1.9million as of December 31, 2015. The estimated fair value of the CGU exceeded its carrying value by 27% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

For Easy2Pay, we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 8% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 12% on gross sales, which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 19.72%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR2.4 million as of December 31, 2015. The estimated fair value of the CGU exceeded its carrying value by 217% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

For PayByMe, we projected a five-year discounted cash flow. Basic assumptions in the cash flow projection included, among others, an estimated annual growth of between 18% to 40% in gross revenues in the coming 5 years with reference to the stabilizing growth rate in 2015, a terminal revenue growth rate of 2%, and gross profit margin of 9% on gross sales, which is similar to the level in 2015. Any projection beyond 5 years by us cannot be estimated with reasonable accuracy, since the business environment is rapidly changing. The discount rate was set at 29.69%, based on the CGU’s weighted average cost of capital and adjusted to reflect our and business-specific risks. We had goodwill of MYR25.0 million as of December 31, 2015. The estimated fair value of the CGU exceeded its carrying value by 16% at December 31, 2015. Consequently, no goodwill impairment has been recognized in 2015.

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Revenue Recognition

Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to us and the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable.

(i) MOLPoints

We earn revenue through sale of MOLPoints. Revenue from MOLPoints is recognized upon the end-user’s redemption of the MOLPoints for the online purchase of goods. We do not refund redeemed MOLPoints as a matter of policy or practice. MOLPoints that have been sold but not yet redeemed at the reporting date are recognized as deferred revenue. MOLPoints that have been sold out but not deposited to a MOLPoints account and remain unredeemed for 5 years following the date of sale will expire and are then recognized as revenue in the year of expiration and are not refundable to end-users. MOLPoints purchased by end-users and deposited in MOLPoints accounts are refundable (i) when an end-users terminates a MOLPoints account; or (ii) in accordance with the Malaysian Unclaimed Moneys Act 1965 pursuant to which the balance in a MOLPoints account that has been dormant for a consecutive period of 7 years is transferred to the Malaysian Registrar of Unclaimed Moneys, in which case the end-user may request a refund from the Registrar of Unclaimed Moneys.

(ii) MOLReloads

We earn revenue from sale of prepaid mobile airtime which is recognized upon transfer of the significant risks and rewards of ownership of goods to the end users which occurs upon the sale of a mobile airline voucher to an end-user. Sold mobile airtime vouchers are not refundable as a matter of policy or practice.

(iii) MOLPay

Revenue is based on commission and merchant fees. Commission fees are recognized when merchants’ transaction is completed. Merchant fees are recognized when a contract had been signed for the registration of a merchant in the payment system and the fee set forth in the contract becomes payable.

(iv) MMOG Asia

We provides web game services through its gaming portal MMOG Asia and generates revenue from selling virtual goods online, which are used by end users within online games. Game players are given access to MMOG.asia’s online games free of charge but are charged for digital goods sold during game play. The fees paid by us to game developers comprise (i) an upfront fee, which is payable upon entering into a license agreement with a game developer, recorded as intangible assets in the financial statements and amortized over the term of the exclusive license, which is typically between three and five years; and (ii) a continuous revenue share (or royalty), which is equal to a percentage of the total game point utilization and payable throughout the term of the license. The fees that we retain under the license are based on the amount of consideration generated from sales of in-game virtual goods above the royalty fee to which game developers are entitled.

MMOG.asia players purchase game points in exchange for MCoins. MCoins is a virtual currency operated by MMOG.asia to facilitate purchases of virtual goods in games operated on MMOG.asia’s platform. While MMOG.asia does not accept any currency other than MCoins in exchange for game points, MCoins can be purchased using MOLPoints or cash. MCoins are not refundable as a matter of policy or practice except in accordance with the Malaysian Unclaimed Moneys Act 1965 pursuant to which the balance in an MMOG.asia account that has been dormant for a consecutive period of seven years is transferred to the Malaysian Registrar of Unclaimed Moneys, in which case the end-user may request a refund from the Registrar of Unclaimed Moneys.

The revenue from the sale of virtual goods is deferred over the estimated consumption period of in-game virtual goods, which is typically within a short period of time after purchase of in-game credits. Sold virtual goods are not refundable after they have been consumed as a matter of policy or practice. For games which have not attained popularity and are discontinued, advance notice is given to players one month before discontinuation and top-up of game points related to the games is disallowed before discontinuation. To date, we have never been required to pay cash refunds to game players or game developers as a result of the discontinuation of a game, or for any other reason.

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We recognize non-refundable upfront fee upon the performance of obligation to provide technical support during game installation and establishment of the server to host the game in connection with the sale of game distribution right. Subsequent to the completion of such services, we are not obliged to provide any technical support, and customer does not have any right of recourse in the event that developer fails to fulfill its obligations.

We determine whether it is acting as a principal or an agent by considering who is the primary obligor of its arrangements and on whether it has discretion in setting prices to its customers. We concluded that it is acting as an agent in all its revenue arrangements.

(v) Other income is recognized on the following basis:

• Marketing fee is recognized at the time advertisements have been displayed in our online game portal or related services e.g., distribution of free game credits to gamers have been performed.

• Interest income is recognized on an accrual basis by reference to the principal outstanding and at the effective interest rate applicable.

• Rental income is recognized on a straight-line basis over the term of the lease.

• Transaction fees received or receivable from the depository bank are recognized on an accrual basis in accordance with the substance of the relevant agreement provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

Income Taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

(i) Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the consolidated statements of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. Our liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

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Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associate, except where we are able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which we expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets are recognized for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the unused tax losses and unabsorbed capital allowances can be utilized. Significant judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and we intend to settle its current tax assets and liabilities on a net basis.

(iii) Current and Deferred Tax for the Period

Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. We recognize liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Development Expenditure

Development expenditure relates to costs incurred for the development of web applications, software products and programmes, which primarily comprises employee expenses for information technology personnel and creative personnel. These costs are capitalized as development assets to the extent that such expenditure meet the following criteria:

(i) the product or process is clearly defined and costs are separately identified and measured reliably;

(ii) the technical feasibility of the product is demonstrated so that it will be available for use or sale;

(iii) the product or process will be sold or used in-house;

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(iv) the assets will generate future economic benefits (e.g. a potential market exists for the product or its usefulness in case of internal use is demonstrated); and

(v) adequate technical, financial and other resources required for completion of the project are available.

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Amortization is provided upon commencement of the commercial use of the web application and software products to which they relate to on a straight-line basis over the period of their expected benefits, but not exceeding 5 years.

Other Intangible Assets

Intangible assets, including computer software that are not an integral part of the related hardware, are stated at cost less accumulated amortization and impairment losses. Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to such assets will flow to us and the costs of such assets can be measured reliably.

Amortization is provided for on a straight-line basis to write off the cost of intangible assets with a finite useful life to their residual value over the period of their expected benefits, at the following annual rates:

Software and copyright	33	%
Electronic payment system	33	%
Exclusive license and distribution rights of online games and reloads	20% - 33	%
Intellectual property	14% - 20	%
Trademark	33	%

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.    

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

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Estimated Useful Lives of Intangible Assets with Finite Useful Lives

We review the estimated useful lives of its intangible assets with finite useful lives at the end of reporting period. During the current financial year, the management is of the opinion that there is no requirement to revise the estimated useful lives of these assets. Intangible assets with finite useful lives are amortized over their useful economic lives. The amount of estimated useful lives is a matter of judgement based on our experience, taking into account factors such as technological progress, changes in market demand and expected usage. Useful lives are reviewed for continued appropriateness at the end of each reporting period.

Financial Instruments

Financial instruments are recognized in the consolidated statements of financial position when, and only when, the we become a party to the contractual provisions of the financial instruments.

Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, such financial assets are recognized and derecognized on trade date.

Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

(i) Financial Assets

Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” (FVTPL), “held-to-maturity” investment, “available-for-sale” (AFS) financial assets and “trade and other receivables”. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognized on an effective interest basis for debt instruments.

Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade and other receivables are measured at amortized cost using the effective interest method, less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

AFS Financial Assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFS assets are measured at fair value at the end of the reporting period. Fair value is determined in the manner described in Note 45. Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognized in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.

Dividends on AFS equity instruments are recognized in profit or loss when our right to receive the dividends is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognized in profit or loss are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income.

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Impairment of Financial Assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organization.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include our past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account.

Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period. With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

In respect of AFS equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income.

Derecognition of Financial Assets

We derecognize a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If we neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, we recognize its retained interest in the asset and an associated liability for amounts it may have to pay. If we retain substantially all the risks and rewards of ownership of a transferred financial asset, we continue to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

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Financial Liabilities and Equity Instruments

Debt and equity instruments are classified as financial liabilities or as equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and equity instruments.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by us are recognized at the proceeds received, net of direct issue costs.

Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”.

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of Financial Liabilities

We derecognize financial liabilities when, and only when, our obligations are discharged, cancelled or they expired.

Derivative Financial Instruments

Derivatives are initially recognized at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

Fair value measurements and valuation processes

Some of our assets and liabilities are measured at fair value for financial reporting purposes. We determine the appropriateness of valuation techniques used and inputs for fair value measurements. In estimating the fair value of an asset or liability, we use market-observable data to the extent that it is available. Where such data is not available, we engage third party qualified valuers to perform the valuation. Our management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model used for fair value measurements. Our management reports to our board of directors, at least on a quarterly basis, the cause of fluctuations in the fair value of the assets and liabilities impacting the financial statements.

For further details of significant accounting policies and accounting estimates made, please refer to our audited consolidated financial statements included in F pages in this report.

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F. Tabular disclosure of contractual obligations

The following table sets forth our contractual obligations as of December 31, 2015. The following table does not reflect certain capital commitments, which were entered into subsequent to December 31, 2015 and are described under Item 5.B. “Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital Expenditures.”

	Due as of December 31,
	Total		2016		From 2017 to 2019		From 2020 to 2021		After 2021
	(MYR in millions)
Put options granted to the holders of the non-controlling interest of PayByMe		46.3		19.9		26.4		—		—
Borrowings		15.0		15.0		—		—		—
Future minimum lease payments for leased properties		5.7		3.5		2.2		—		—
Hire-purchase and finance lease payables		3.8		1.9		1.9		—		—
Total		70.8		40.3		30.5		—		—

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Put options granted to the holder of the non-controlling interest of PayByMe relates to the financial liability with respect to the put options that we had granted to the minority shareholders of our 49%-owned subsidiary, PayByMe, when we acquired our 51% interests in September 2014. Borrowings include our current and non-current borrowings from third parties. Borrowings include principal and interest. Our operating lease obligations primarily relate to properties that we rent for office space. Hire-purchase and finance lease payables primarily relate to computer equipment and vehicle hire-purchase.

A deposit of MYR29.6 million was pledged with a bank to secure bank guarantees for the benefit of the non controlling interest of PayByMe in December 2014, as required under the terms of our acquisition of PayByMe. This bank guarantee represents a financial pledge against the Put options granted to the holder of the non-controlling interest of PayByMe. See Item 5.B “Liquidity and capital resources”

G. Safe harbor

See “Special Note Regarding Forward Looking Statements” on page 3 of this annual report.

ITEM 6. Directors, Senior Management and Employees

A. Directors and Senior Management.

Directors and Executive Officers

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

Directors and Executive Officers	Age		Position/Title
Craig White		54	President
Preecha Praipattarakul		42	Chief Executive Officer
Ramesh Pathmanathan		46	Group Chief Financial Officer
Pan Yong Tee		43	Chief Technology Officer
Jonathan Yoon Soon Chong		40	Chief Financial Officer, MOL AccessPortal
Wilson Soon Poh Beng		37	Chief Executive Officer, MOL AccessPortal
William Cheong Fatt Chan		54	Chief Executive Officer, MyCNX
Sheng Guan Eng		41	Chief Executive Officer, MOLPay Sdn. Bhd.
Nguyen Hoa Binh		35	Chief Executive Officer, Nganluong
Ali Salci		42	Country Manager, PaytoGo
Eugene Seow Guan Kiat		39	Country Manager, MOL Singapore
Zoey Kong Sook Lai		42	Country Manager, Malaysia
Yit Fei Chang		43	Director
Tek Kuang Cheah		69	Independent Director
Mun Kee Chang		51	Independent Director
Eric He		56	Independent Director

Craig White, joined MOL Ventures as President of Global Operations in 2011 and has served as our President since January 2014. Prior to joining us, Mr. White served at Naspers/MIH as the CEO of Internet: South and Southeast Asia and Naspers/MIH Southeast Asia’s Chief Executive Officer of the Southeast Asian region. Mr. White also served as President of M-Web Thailand/Sanook Online and Managing Director of Thailand’s KSC Commercial. Mr. White’s accolades include being included in the Top 50 business people in Thailand 2000 (Business Com Magazine), Top 300 Foreigners in Thailand 2006 (Thailand Tatler), and South Africa Who’s Who 2006. Mr. White holds a Master of Business Administration, a Post Graduate Diploma in Mechanical Engineering and a Bachelor of Science in Electrical and Electronic Engineering from the University of Cape Town in South Africa.

Preecha Praipattarakul has served as our Chief Executive Officer since March 2015. Mr. Praipattarakul served as the Chief Executive Officer of MOL Thailand from the time he joined us in September 2009 through March 2015. Prior to joining us, Mr. Praipattarakul was the founder and former CTO of POPidols Co., Ltd and dFusion Co., Ltd, as well as the leader of Digital Content Management Solutions and Interactive Marketing Consulting firms in Thailand. Mr. Praipattarakul previously served as a Board Member of ICT Subcommittee, a standing committee of the Senate of the Kingdom of Thailand. Mr. Praipattarakul holds a Bachelor of Business Administration in Accounting from Assumption University in Thailand.

Ramesh Pathmanathan has served as our Group Chief Financial Officer since March 2015. Prior to joining MOL, Mr. Ramesh Pathmanathan served as the General Manager of Investments in Berjaya Assets Berhad. Earlier to that, Mr. Pathmanathan worked in the United Kingdom for 7 years, serving as a Board member and Finance Director of an established medical devices company. Mr. Pathmanathan has extensive senior management experience, especially as it relates to management consulting, finance, and operations. Mr. Pathmanathan graduated from the Chartered Institute of Management Accountants (CIMA) in the UK in 1993 and is a Fellow member of the Institute. Mr. Pathmanathan also graduated from the University of Hull in the United Kingdom with a Masters in Business Administration (MBA).

Pan Yong Tee joined us in 2002 as a Technical Manager and has served as our Chief Technology Officer since January 2013. Prior to joining us, Mr. Tee worked at MTDC Technology Media Sdn Bhd, as an Assistant Manager (Technical) and a Programmer. Mr. Tee holds an Associate Diploma in Information Technology (Software Development) from Northern Territory University in Malaysia and is a Microsoft Certified Solutions Developer (MCSD) and Microsoft Certified Database Administrator (MCDBA).

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Jonathan Yoon Soon Chong joined us in 2012 and has served as our Chief Financial Officer since April 2014. Prior to joining us, Mr. Chong was a Senior Finance Manager at Ten Café Geosynthethics Asia Sdn Bhd from June 2006 through February 2012 and has 11 years of experience in the manufacturing and commercial industry. Mr. Chong is a member of the Association of Chartered Certified Accountants (ACCA).

Wilson Poh Beng Soon joined us in August 2015 as the Chief Operating Officer, and has served as our Chief Executive Officer of MOL AccessPortal since November 2015. Prior to joining MOL, Mr. Soon was the Finance Director of Laureate Education Inc. responsible for financial planning and analysis. Mr. Soon held the position of Chief Financial Officer in Stonehouse Construction Pte Ltd Group, Vancouver Canada, headed the finance function of mining operations globally from 2011 to 2012. Mr. Soon is a finance professional with more than a decade of “Big 4” audit and commercial chief financial officer experience across various industries. Previously Mr. Soon was the Finance Director in Masan Resources Group, largest enterprise in Ho Chi Minh stock exchange. Mr. Wilson holds a Bachelor of Science Degree in Accounting and Finance and a member of the Association of Chartered Certified Accountants (ACCA).

Dato’ William Cheong Fatt Chan co-founded MyCNX in 2005, became Managing Director of MyCNX in December 2008 and was redesignated as Chief Executive Officer of MyCNX in January 2013. Prior to joining us, Dato’ Chan founded Zactam, a color printing service company.

Sheng Guan Eng has served as the Chief Executive Officer of MOLPay Sdn. Bhd. since joining us in August 2011. Mr. Eng co-founded MOLPay Sdn. Bhd. and was previously the co-founder and Chief Executive Officer of NetBuilder (M) Sdn. Bhd. and NB Travel Sdn. Bhd. Mr. Eng has more than 15 years of experience in the information communication technology payment and travel industries. Mr. Eng holds a Bachelor of Science in Computer Science from the University of Southern Queensland in Australia.

Nguyen Hoa Binh founded PeaceSoft-group (principal company of Nganluong) in 2001. Mr. Binh has 15 years experience in the Vietnam Internet industry. Mr. Binh holds a bachelor degree in Information Technology from Vietnam National University and a masters degree of ICT management from Osaka City University, with a variety of academic and business awards and achievements. In March 2013, PeaceSoft-group’s online payment arm Nganluong.vn received strategic investment from MOL AccessPortal. Mr. Binh currently serves as the Chairman of Nganluong.

Mr. Ali Salci joined PaytoGo in August 2015 and serves as our Country Manager for Turkey. Prior to joining us, Mr. Ali served as the EVP of Global Business Development in Cardtek Group, Istanbul, Turkey, from September 2014 to July 2015. Mr. Ali had also served as the Director, Head of Mobile Financial Services with Turkcell from November 2009 to April 2014. Mr. Ali has a total of 15 years of experience in product, marketing and business development roles. Mr. Ali holds a Bachelor of Science Degree in Statistics from Middle East Technical University Ankara.

Mr. Eugene Seow has served as our Country Manager of Singapore since October 2010 and Australia since January 2016. Mr. Seow was instrumental in the successful launch of MOL in Singapore when Mr. Seow joined the company as a Senior Manager of Business Development in July 2008. In his current tenure, Mr. Seow manages the business operations and relationships with local distribution partners and content providers. Mr. Seow has over 10 years of related experience in operational management, business development, product, sales and marketing. Prior to joining MOL, Mr. Seow held a project manager role in a media and events company focusing on game related content where he conceptualised and executed online and offline campaigns for corporate and retail partners. Mr. Seow also holds a Bachelors of Arts Degree in Mass Communications from Simon Fraser University in Vancouver, Canada.

Ms. Zoey Kong joined us in 2002 and has served as the Country Manager of Malaysia since January 2013. Ms. Kong started as our E-Sales Executive and was promoted to Sales Manager on July 1, 2006. Subsequently Ms. Kong was promoted to Vice President of Sales in March 2008 and to Senior Vice President of Sales in January 2012. Ms. Kong has over 13 years of experience in MOL mainly overseeing MOL sales, mobile content for MOLPoints and MOLStore and coordinating all sales and marketing activities within the regional branches specifically in China, Taiwan, Hong Kong and Malaysia. Previously, Ms. Kong served as an Accounts Supervisor and holds a London Chamber of Commerce and Industry for Accounting.

Yit Fei Chang is a director of the Issuer and initially joined us in 1999. Prior to joining us, Mr. Chang worked at Diversified from October 1995 through October 1999 and Berjaya Land Berhad from November 1999 through May 1999. Currently, he also serves as an Executive Director of MOL.com Berhad , and a Director in Qinetics Solutions Berhad and certain of our affiliated companies, including Bonus Browser Sdn. Bhd, Friendster Sdn. Bhd, MOL ManagedServices Sdn. Bhd., and MOL Online Sdn. Bhd. Mr. Chang graduated with a Bachelor of Science in Electronics Engineering from the University of Southampton in the United Kingdom and he also holds a Business and Technology Education Council National Diploma in Electronic and Computer Engineering from the Peoples College, Nottingham, in the United Kingdom.

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Tek Kuang Cheah serves as our independent director. He currently serves as an Independent Non-Executive Chairman of the Board of Berjaya Sports Toto Bhd., for which he serves as the Chairman of the Audit Committee, Remuneration Committee, Risk Management Committee and Nomination Committee. He has a Bachelor of Economics (Honours) from the University of Malaya and is a Fellow member of the Institute of Bankers Malaysia. Mr. Cheah joined the AmBank group in 1978, and he retired as the Group Managing Director in 2012. Mr. Cheah still serves as a Non-Executive Director of AmBank (M) Berhad, AmInvestment Bank Berhad and AmIslamic Bank Berhad. Prior to joining the AmBank Group, Mr. Cheah was employed by the Malaysian Industrial Development Authority. Mr. Cheah is presently a member of the board of two other publicly listed companies, namely IOI Corporation Berhad and UMW Oil & Gas Corporation Berhad. Mr. Cheah also serves as a director of Cagamas Holdings Bhd and Danjamin Nasional Berhad.

Mun Kee Chang has served as our Independent Director since October 2014. Mr. Chang obtained his Bachelor of Science in Mechanical Engineering from the University of Texas, Austin and a Master of Science in Mechanical Engineering from the Massachusetts Institute of Technology. Mr. Chang is an Executive Director of Jobstreet Corporation Berhad, or Jobstreet, and founder of the Jobstreet group. Mr. Chang has also been JobStreet’s Chief Executive Officer since its inception and a Director of JobStreet since its incorporation. Prior to founding MOL Online Sdn Bhd in 1995 and subsequently Jobstreet.com Sdn Bhd in 1997, Mr. Chang was with Kendall International, a US healthcare company, for 5 years, starting as a process engineer in 1990 before being promoted to manufacturing manager in 1992 and director of sales and marketing for Malaysia in 1994. Mr. Chang currently sits on the Boards of Innity Corporation Berhad, Vitrox Corporation Berhad and 104 Corporation, Taiwan.

Eric He has served as our independent director since October 2014. He currently serves as the Chief Financial Officer of YY Inc., a NASDAQ-listed company, an independent director of Yangxun Computer Technology (Shanghai) Co. Ltd. and Acorn International, Inc., a NASDAQ-listed company. Mr. He previously served as the Chief Financial Officer of Giant Interactive Group, Inc., from March 2007 to August 2011. Mr. He served as the Chief Strategy Officer of Ninetowns Internet Technology Group from 2004 to 2007. From 2002 to 2004, Mr. He served as a private equity investment director for AIG Global Investment Corp (Asia) Ltd. Mr. He received a Bachelor’s Degree in Accounting from National Taipei University and an MBA degree from the Wharton School of Business at the University of Pennsylvania. Mr. He is a Certified Public Accountant and Chartered Financial Analyst in the United States.

B. Compensation.

Compensation of Directors and Executive Officers

For the year ended December 31, 2015, we paid an aggregate of approximately MYR7.9 million in cash relating to remuneration of our executive officers and paid MYR8.9million to our directors. Our Malaysian subsidiaries are required by law to effect monthly deductions and/or contributions at the prevailing minimum statutory rate for the Malaysian Employees Provident Fund, or the EPF, social security and income tax. For the year ended December 31, 2015, we contributed an aggregate of MYR0.7 million to the EPF for the accounts of our directors and executive officers.

C. Board Practices.

Board of Directors

Our board of directors consists of seven directors. A director is not required to hold any ordinary shares in our company by way of qualification. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided (i) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice and (ii) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee. The directors may exercise all the powers of the company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the company or of any third party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of service.

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We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We will adopt a charter for each of the three committees. Each committee’s members and functions are described below.

Audit Committee. Our audit committee consists of Eric He, Tek Kuang Cheah and Mun Kee Chang. Eric He is the chairman of our audit committee. We have determined that Eric He, Tek Kuang Cheah and Mun Kee Chang satisfy the “independence” requirements of Rule 5605 of the NASDAQ Corporate Governance Requirements and Rule 10A-3 under the Securities Exchange Act of 1934. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

• appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

• reviewing with the independent auditors any audit problems or difficulties and management’s response;

• discussing the annual audited financial statements with management and the independent auditors;

• reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

• reviewing all proposed related party transactions;

• meeting separately and periodically with management and the independent auditors; and

• monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

Compensation Committee. Our compensation committee consists of Mun Kee Chang, Tek Kuang Cheah and Eric He. Mun Kee Chang is the chairman of our compensation committee. We have determined that Mun Kee Chang, Tek Kuang Cheah and Eric He satisfy the “independence” requirements of Rule 5605 of the NASDAQ Corporate Governance Requirements and Rule 10A-3 under the Securities Exchange Act of 1934. The compensation committee assists the board of directors in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our Chief Executive Officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee will be responsible for, among other things:

• reviewing and approving, or recommending to the board for its approval, the compensation for our Chief Executive Officer and other executive officers;

• reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors;

• reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and

• selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.

Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Tek Kuang Cheah, Eric He and Mun Kee Chang. Tek Kuang Cheah is the chairperson of our nominating and corporate governance committee. We have determined that Tek Kuang Cheah, Eric He and Mun Kee Chang satisfy the “independence” requirements of Rule 5605 of the NASDAQ Corporate Governance Requirements and Rule 10A-3 under the Securities Exchange Act of 1934. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

• selecting and recommending to the board nominees for election by the shareholders or appointment by the board;

• reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;

• making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and

• advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.

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Directors’ Duties

Under Cayman Islands law, our directors have fiduciary duties to our company, including duties to act honestly, in good faith and with a view to further our best interests. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association and the class rights vested thereunder in the holders of the shares. Our company has the right to seek damages if a duty owed by our directors is breached. A shareholder may, in certain limited exceptional circumstances, have the right to seek damages in our name if a duty owed by the directors is breached.

Our board of directors has all powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:

• convening shareholders’ annual and extraordinary meetings;

• declaring dividends and distributions;

• appointing officers and determining the term of office of the officers;

• exercising the borrowing powers of our company and mortgaging the property of our company; and

• approving the transfer of shares in our company, including the registration of such shares in our share register.

Terms of Directors and Officers

Our officers are elected by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of the shareholders or by the board. We do not have a mandatory retirement age for directors. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; or (ii) is found by our company to be or becomes of unsound mind.

Employment Agreements and Indemnification Agreements

We have entered into employment agreements with each of our executive officers, which provide that we may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, such as misdemeanor, misconduct, negligence and breach of the employment agreement, and that we or the executive officer may terminate an executive officer’s employment without cause upon advance written notice of three months. The right of termination of an employee is subject to applicable local laws. In such case of termination by us, we will provide severance payments to the executive officer as expressly required by applicable law.

Pursuant to employments agreements that we have entered into with our executive officers, each executive officer is expected to agree not to discuss confidential information and other confidential business of our company or customer business or data with unauthorized personnel and/or unauthorized sources outside and inside our company, in public places or with former employees of our company, and to help ensure that all document or materials created by such executive officer in the course of performance of such executive officer’s duties with our company shall be the sole property of our company.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we have agreed to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

Limitation on Liability and Indemnification of Directors and Officers

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide that our directors and officers shall be indemnified against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such director or officer, other than by reason of such person’s own dishonesty, willful default or fraud, in or about the conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, we intend to enter into indemnification agreements with our directors and senior executive officers that will provide such persons with additional indemnification beyond that provided in our memorandum and articles of association.

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

D. Employees.

As of December 31, 2013, 2014, 2015 we had 416, 524 and 507 employees, respectively. The majority of our employees are based in Malaysia. We pay our sales staff a combination of salaries and commissions and pay salaries to all other employees. We consider our relations with our employees to be good.

The following tables set forth certain information with respect to our employees as of the dates specified.

Country	As of December 31,
Country	2013		2014		2015
Malaysia		130		164		178
Thailand		53		78		66
Turkey		37		55		58
Philippines		71		76		73
Others		125		151		132
Total		416		524		507
Country	As of December 31,
Function	2013		2014		2015
Sales, marketing, business development, public relations and operations		132		183		200
Technology and support		156		190		158
Finance		48		66		77
Human resources and administration		45		47		45
Senior management		20		28		17
Creative		15		10		10
Total		416		524		507

E. Share Ownership.

See Item 7.A “Major Shareholders and Related Party Transactions – Major Shareholders” for information on the shareholdings of our directors and executive officers.

See Item 6.B “Compensation—Employee Stock Option Plan” for a description of our employee stock option plan and information on options granted to our executive officers.

ITEM 7. Major Shareholders and Related Party Transactions

A. Major Shareholders.

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the date of this annual report by:

• each of our directors and executive officers; and

• each person known to us to own beneficially more than 5% of our ordinary shares. The calculations in the table below assume that there are 67,504,435 ordinary shares outstanding as of the date of this annual report.

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	Shares Beneficially Owned(1)
	Number(1)			%(2)†
Directors and Executive Officers:
Craig White		—			—
Ramesh Pathmanathan		—			—
Pan Yong Tee		—			—
Jonathan Yoon Soon Chong		—			—
Preecha Praipattarakul			*			*
William Cheong Fatt Chan			*			*
Sheng Guan Eng		—			—
Yit Fei Chang		—			—
Tek Kuang Cheah		—			—
Mun Kee Chang		—			—
Eric He		—			—
All Directors and Executive Officers as a Group		—			—
Principal Shareholders:
Tan Sri Dato’ Seri Vincent Tan and his entities and affiliates(5)		35,858,871			53.1	%
MOL.com Sdn. Bhd.(5)		12,464,788			18.5	%
Hotel Resort Enterprise Sdn. Bhd.(5)(8)		11,386,721			16.9	%
His Royal Highness Sultan Ibrahim of the State of Johor		8,834,598			13.1	%
MOL Ventures(5)(5)		6,962,340			10.3	%
Ganesh Kumar Bangah(3)		6,859,192			10.2	%
Rayvin Tan Yeong Sheik(5)(6)		5,035,675			7.5	%
MOL Investments Pte. Ltd.(5)(7)		2,867,517			4.3	%

* Beneficially owns less than 1% of our ordinary shares.

† For each person and group included in this column, percentage ownership is calculated by dividing the number of shares held by such person or group by the sum of the total number of shares outstanding, which is 67,504,435 as of the date of this annual report and does not take into account any awards under our 2014 Share Incentive Plan or options granted by MOL Investments Pte. Ltd. as no such awards have vested.

(1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities.

(2) For each person and group included in this table, percentage of beneficial ownership is calculated by dividing the number of ordinary shares beneficially owned by such person or group by the number of ordinary shares outstanding. The total number of ordinary shares outstanding as of the date of this annual report is 67,504,435.

(3) Our founder and former Director and Executive Chairman, Ganesh Kumar Bangah’s equity interest in the Issuer is held through his direct ownership of 5,916,182 of our ordinary shares, his beneficial ownership of an 11.63% interest in MOL Ventures, which directly owns 6,962,340 of our ordinary shares, and his beneficial ownership of 133,636 ordinary shares as a result of his repurchase of 133,636 ADSs. See Item 16E. “Purchases of Equity Securities by the Issuer and Affiliated Purchasers”.

(4) MOL Ventures is owned 88.37% by our major shareholder Tan Sri Dato’ Seri Vincent Tan and his affiliates (including Rayvin Tan, Yeong Sheik, who owns a 10.0% interest in MOL Ventures) and 11.63% by our founder and former Director and Executive Chairman, Ganesh Kumar Bangah.

(5) Our major shareholder, Tan Sri Dato’ Seri Vincent Tan, together with his entities and affiliates, beneficially owns a 53.1% interest in the Issuer through his direct ownership of 110,764 of our ordinary shares; a 89.9% effective equity interest in MOL.com Sdn. Bhd., which owns 12,464,788 of our ordinary shares; a 60.0% equity interest, and an additional 40.0% equity interest held by his son, Dato’ Sri Robin Tan Yeong Ching, in Hotel Resort Enterprise Sdn. Bhd., which owns 11,386,721 of our ordinary shares; a 75.5% effective equity interest, and an additional 10.0% equity interest held by his son, Rayvin Tan Yeong Sheik, in MOL Ventures, which owns 6,962,340 of our ordinary shares; a 100% equity interest in MOL Investments Pte. Ltd., which owns 2,867,517 of our ordinary shares; and 4,339,441 of our ordinary shares held directly by Rayvin Tan Yeong Sheik.

(6) Rayvin Tan Yeong Sheik’s equity interest in the Issuer is held through his direct ownership of 4,339,441 ordinary shares and his beneficial ownership of a 10.0% interest in MOL Ventures, which directly owns 6,962,340 of our ordinary shares.

(7) MOL Investments Pte. Ltd.’s beneficial ownership of our ordinary shares includes an option representing an aggregate of 1,766,920 ordinary shares, representing a 2.9% interest in our company, that was granted to certain employees, officers and/or directors of our company, and certain employees, officers and/or directors of our shareholders, subsidiaries and/or affiliates, which entitle these individuals to purchase ordinary shares of our company from MOL Investments Pte. Ltd. at a fixed price subject to vesting and certain conditions, following the completion of our initial public offering. These options will vest between six and 36 months following completion of our initial public offering.

(8) Hotel Resort Enterprise Sdn. Bhd. is owned by our major shareholder, Tan Sri, Dato’ Seri Vincent Tan, who has a 60.0% equity interest in Hotel Resort Enterprise Sdn. Bhd., and Dato’ Sri Robin Tan Yeong Ching, who has a 40.0% equity interest in Hotel Resort Enterprise Sdn. Bhd.

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To our knowledge, as of April 3, 2015, 13,565,349 of our ordinary shares are held by two record holders in the United States, including the depositary of our ADS program. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

None of our existing shareholders has different voting rights from other shareholders. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

B. Related Party Transactions.

Guarantees

Our related parties from time to time provide guarantees for our benefit. Our shareholder MOL Ventures provided guarantees for our obligations under our agreement to acquire PaytoGo and Game Sultan in 2013. Our major shareholder Tan Sri Dato’ Seri Vincent Tan, and certain entities under his control provided guarantees in 2015 relating to our revolving credit facility from MDV. Cyberventures Sdn. Bhd., or Cyberventures, which is owned 80% by our major shareholder, Tan Sri Dato’ Seri Vincent Tan, and 20% by our founder and former Director and Executive Chairman, Ganesh Kumar Bangah provided guarantees in 2012 relating to our loan from OCBC Bank (Malaysia) Berhad. Our founder and former Director and Executive Chairman, Ganesh Kumar Bangah also provided guarantees in 2012 in relation to equipment lease agreements entered into by MOL AccessPortal. Some of our directors and shareholders in MOL Thailand also provided guarantees in relation to the loans obtained by Zest from United Overseas Bank (Thai) Public Company Limited in Thailand.

Tenancy Agreements

MOL AccessPortal occupies space at Berjaya Times Square, Kuala Lumpur, Malaysia, under tenancy agreements with Berjaya Times Square Sdn. Bhd., which is controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan. The aggregate fixed amount of rent payable under the tenancy agreements are approximately MYR52,739 per month with one agreement providing for a variable component for calculating the rent payable. The agreement which has expired in September 2014 was not renewed. The remaining three agreements will expire in February, June and November 2017, respectively. During February 2015, MOL AccessPortal signed a new tenancy agreement which will expire in February 2018. For these tenancies, the amount of payments we made to Berjaya Times Square Sdn. Bhd. were MYR0.7 million, MYR0.9 million and MYR1.3 million for the years ended December 31, 2013, 2014 and 2015, respectively. Rent is payable under these agreements at prevailing market rates.

Distribution Agreements

7-Eleven Malaysia. In November 2009, MOL AccessPortal entered into a distribution agreement with 7-Eleven Malaysia for the distribution by 7-Eleven Malaysia of vouchers for MOLPoints and pre-paid mobile airtime. Pursuant to the agreement, we are 7-Eleven Malaysia’s exclusive provider of online game reloads and pre-paid mobile airtime. 7-Eleven Malaysia is controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan. Under the agreement, MOL AccessPortal paid 7-Eleven Malaysia a one-time fee of MYR2.5 million and pays a volume-based commission. The agreement is for an initial term of five years subject to automatic renewal for a further term of five years. In September 2013, MOL AccessPortal entered into an addendum to the distribution agreement with 7-Eleven Malaysia under which, among others, the term of the distribution agreement will be renewed for a further 10 years upon the expiry of the initial term and MOL AccessPortal agreed to pay 7-Eleven Malaysia an additional fee of MYR5.0 million, in five annual equal installments commencing on June 1, 2014. In May 2014, MOL AccessPortal and 7-Eleven Malaysia agreed that 7-Eleven Malaysia would distribute prepaid point-of-sale-activated gift cards on behalf of MOL AccessPortal and that MOL AccessPortal and InComm would provide the technology and services to 7-Eleven stores for the reselling of point-of-sale-activated gift cards utilizing MOL AccessPortal’s current infrastructure in 7-Eleven stores in Malaysia. Payments by MOL AccessPortal to 7-Eleven Malaysia under the distribution agreement were MYR20.1 million, MYR20.1 and MYR22.4 million for the years ended December 31, 2013, 2014 and 2015, respectively.

Sea Gamer. We have a reseller arrangement with, and also provide collection services for, Sea Gamer Mall Sdn. Bhd., or Sea Gamer, which sells online game credits and secondary market items for online games. Sea Gamer is owned 51% by Cyberventures. Under the arrangement, which commenced in 2012, users are able to purchase MOLPoints vouchers and online game vouchers through Sea Gamer’s website. Pursuant to the arrangement, Sea Gamer receives a commission for products sold, and we receive a fee for collection services. The arrangement can be discontinued by either party at any time. Revenue earned in connection with the arrangement was MYR4.5 million, MYR1.4 million and MYR2.9 million for the years ended December 31, 2013, 2014 and 2015, respectively.

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U Mobile. In September 2008, MOL AccessPortal entered into a distribution agreement with U Mobile Sdn. Bhd., or U Mobile, for the distribution by us of e-pins for U Mobile pre-paid mobile airtime. U Mobile is beneficially owned 44.67% by our major shareholder, Tan Sri Dato’ Seri Vincent Tan. Under the agreement, we earn an agreed upon margin for the products sold. The agreement was for a term of 12 months and has not been renewed by the parties, although the relationship has continued on terms substantially similar to those of the agreement. In addition, in May 2011 we entered into a term sheet for collaboration with U Mobile, under which we provide U Mobile with, among others, Facebook credits for U Mobile customers and Facebook advertising, in consideration for U Mobile providing payment to us in the form of U Mobile pre-paid mobile airtime worth MYR720,000. Revenue earned from sales of U Mobile products was MYR2.6 million, MYR3.3 million and MYR3.1 million for the years ended December 31, 2013, 2014 and 2015, respectively. We also subscribe for prepaid and postpaid mobile phone services for usage by our employees from U Mobile.

Services Agreements

In April 2013, MyCNX entered into a term sheet with Friendster ICafe for the provision of services by Friendster ICafe, which include information technology consulting services. The agreement was initially for a term of one year from May 1, 2013 and was extended for another one year term from May 1, 2014. Under this arrangement, the fees payable to Friendster ICafe are a percentage of MyCNX’s sales revenue after deducting content provider royalty costs as set forth in the term sheet. Payments made to Friendster ICafe were MYR0.5 million for the year ended December 31, 2013 and MYR0.3 million for the year ended December 31, 2014. In the first quarter of 2015, the agreement was not renewed and the payments made to Friendster ICafe were RM0.05million for the year ended December 31, 2015.

Other

Kakao. In April 2014, MyCNX entered into a mobile games agreement with Kakao Malaysia Sdn. Bhd., or Kakao, a subsidiary of Friendster, pursuant to which Kakao agreed to integrate MyCNX’s mobile games into Kakao’s online game channeling platform and to promote and market MyCNX’s mobile games in exchange for a channeling fee equal to 20% of the revenue collected by MyCNX from any application store or payment gateway. The agreement is for an initial term of two years subject to automatic annual renewal unless terminate by either party.

In January 2014, MyCNX entered into an exclusive agreement with Kakao pursuant to which MyCNX agreed to advertise Kakao’s mobile photo-sharing social network services and mobile instant messaging system and to promote the Kakao platform as MyCNX’s exclusive mobile messaging partner. Under the agreement, Kakao paid an upfront fee of MYR0.6 million and committed to an advertisement budget of MYR1.4 million for 24 months following January 2014. In August 2014, the parties entered into an addendum to the agreement which grants Kakao exclusivity for certain game content in exchange for additional distribution fees of MYR2.0 million to be paid to MyCNX. The agreement continues to be in effect indefinitely unless terminated by the parties.

Ini3. In November 2012, MOL AccessPortal Co. Ltd., or MOL Thailand, entered into an agreement with Ini3 Digital Co. Ltd., or Ini3, for the distribution by MOL Thailand of cash cards and e-pins supplied by Ini3. Under the agreement, MOL Thailand earns an agreed upon margin for the products sold. Ini3 is controlled by the family of the wife of Preecha Praipattarakul, our Chief Executive Officer. The agreement continues to be in effect indefinitely unless terminated by the parties. Revenue derived from the sale of Ini3 products was MYR4.4 million, MYR2.1 million and MYR2.0 million for the years ended December 31, 2013and 2014 and 2015, respectively.

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Berjaya Group Companies. We also purchase products and services from Berjaya Corporation group of companies controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan, including hotels, cars, share registration services, food and beverage and courier services, from time to time in the ordinary course of our business. Our expenditures for such products and services were approximately MYR0.2 million, MYR0.2 million and MYR0.3 million for the years ended December 31, 2013, 2014 and 2015 respectively.

Insurance contracts. We have taken out a number of insurance policies with Berjaya Sompo Insurance Berhad, which is owned 30% by entities controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan, in respect of, among other things, hospital and surgical insurance, personal accident insurance and all risk insurance covering computer systems, hardware and servers and office equipment and furniture, among others.

Cyberventures . Pursuant to a settlement of debt agreement dated November 8, 2012 between MOL AccessPortal and Cyberventures, MOL AccessPortal acquired its shares in MyCNX through the transfer of 1,599,900 shares of par value MYR1 each in MyCNX (consisting of 79.995% of the total issued and paid-up capital of MyCNX) as full settlement of a debt amounting to MYR27.8 million owed by Cyberventures to MOL AccessPortal.

BLoyalty. We provide technology outsourcing services to BLoyalty Sdn. Bhd, a company that is wholly owned by an entity controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan. Revenue from these services was MYR0.7 million, MYR1.1 million and MYR1.6 million for the years ended December 31, 2013, 2014 and 2015, respectively.

Peacesoft. Nganluong, an online payments solutions provider based in Vietnam in which we acquired a 50% interest in 2013, provides payment services to websites and e-commerce portals owned by Peacesoft, the remaining 50% shareholder of Nganluong. Nganluong is also running a pilot cash on delivery project with Peacesoft and eBay Vietnam, which is owned by PeaceTech, a subsidiary of Peacesoft.

Employment Agreements and Indemnification Agreements

See “Item 6.B. Directors, Senior Management and Employees—Directors and Senior Management—Employment Agreements and Indemnification Agreements.”

Stock Incentive Plans

See “Item 6.B. Directors, Senior Management and Employees—Compensation—Employee Stock Option Plan.”

C. Interests of Experts and Counsel.

Not applicable.

ITEM 8. Financial Information

A. Consolidated Financial Statements and Other Financial Information

See Item 18 “Financial Statements.”

Dividend Policy

Our board of directors has complete discretion on whether to distribute dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

We do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future.

We are an exempted company incorporated in the Cayman Islands with limited liability. We are a holding company and all of our operations are conducted through MOL AccessPortal, a company incorporated under the laws of Malaysia. We rely principally on dividends from our subsidiaries in Malaysia and other countries for our cash requirements, including any payment of dividends to our shareholders. Local regulations and contractual restrictions may restrict the ability of our subsidiaries to pay dividends to us.

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The principal legislation governing the distribution of dividends of a Malaysian company is the Malaysian Companies Act 1965, or the CA. Under the CA, a Malaysian company is only permitted to pay dividends out of:

• profits, if any, determined in accordance with Malaysian accounting standards and regulations; or

• the share premium account, if any, if such dividends are satisfied by the issue of shares to members of the company.

If we pay any dividends, ADS holders will receive payment to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

B. Significant Changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9. The Offer and Listing

A. Offer and Listing Details.

Our ADSs, each representing one ordinary share, have been listed for trading under the symbol “MOLG” on the Nasdaq Global Market since October 9, 2014. However, trading in our ADSs on the Nasdaq Global Market has been suspended since April 18, 2016. The ADSs have been quoted under the ticker “MOLGY” on the OTC Pink marketplace since April 22, 2016. The following table provides the high and low trading prices for our ADSs on the Nasdaq Global Market (through April 15, 2016) and the OTC Pink Marketplace (since April 22, 2016) since the date of our initial public offering.

The last reported trading price for our ADSs on the OTC Pink Marketplace on April 28, 2016 was $0.22 per ADS.

	Trading Price ($)
	High		Low
October 2014 (October 9, 2014 through October 31, 2014)		8.70		7.31
November 2014		8.86		4.09
December 2014		3.90		1.69
January 2015		3.05		1.885
February 2015		2.60		1.88
March 2015		2.72		2.06
April 2015		2.50		2.10
May 2015		2.26		1.82
June 2015		1.91		1.52
July 2015		1.55		1.25
August 2015		1.22		0.80
September 2015		0.97		0.79
October 2015		0.83		0.58
November 2015		0.83		0.45
December 2015		1.15		0.69
January 2016		0.72		0.63
February 2016		0.76		0.66
March 2016		0.80		0.68
April 2016 (through April 28, 2016)		0.75		0.20

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B. Plan of Distribution.

Not applicable.

B. Markets.

Our ADSs, each representing one of our ordinary shares, have been listed on the Nasdaq Global Market since October 9, 2014 under the symbol “MOLG.” However, trading in our ADSs on the Nasdaq Global Market has been suspended since April 18, 2016. The ADSs have been quoted under the ticker “MOLGY” on the OTC Pink marketplace since April 22, 2016.

The last reported trading price for our ADSs on the OTC Pink Marketplace on April 28, 2016 was $0.22 per ADS.

D. Selling Shareholders.

Not applicable.

E. Dilution.

Not applicable.

F. Expenses of the Issue.

Not applicable.

ITEM 10. Additional Information

A. Share Capital.

Not applicable.

B. Memorandum and Articles of Association.

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law 2012 (as amended) of the Cayman Islands, referred to as the Companies Law below. For summaries of certain provisions of our memorandum and articles of association insofar as they relate to the material terms of our common shares, please refer to our registration statement on Form F-1 (Registration No. 333-197401), as amended, under the heading “Description of Share Capital”.

Registered Office and Objects

Our registered office in the Cayman Islands is situated at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. The Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Law or any other law of the Cayman Islands.

C. Material Contracts

In November 2009, MOL AccessPortal entered into a distribution agreement with 7-Eleven Malaysia for the distribution by 7-Eleven Malaysia of vouchers for MOLPoints and pre-paid mobile airtime. Pursuant to the agreement, we are 7-Eleven Malaysia’s exclusive provider of online game reloads and pre-paid mobile airtime. 7-Eleven Malaysia is controlled by our major shareholder, Tan Sri Dato’ Seri Vincent Tan. Under the agreement, MOL AccessPortal paid 7-Eleven Malaysia a one-time fee of MYR2.5 million and pays a volume-based commission. The agreement is for an initial term of five years subject to automatic renewal for a further term of five years. In September 2013, MOL AccessPortal entered into an addendum to the distribution agreement with 7-Eleven Malaysia under which, among others, the term of the distribution agreement will be renewed for a further 10 years upon the expiry of the initial term and MOL AccessPortal agreed to pay 7-Eleven Malaysia an additional fee of MYR5.0 million, in five annual equal installments commencing on June 1, 2014. In May 2014, MOL AccessPortal and 7-Eleven Malaysia agreed that 7-Eleven Malaysia would distribute prepaid point-of-sale-activated gift cards on behalf of MOL AccessPortal and that MOL AccessPortal and InComm would provide the technology and services to 7-Eleven stores for the reselling of point-of-sale-activated gift cards utilizing MOL AccessPortal’s current infrastructure in 7-Eleven stores in Malaysia. Payments by MOL AccessPortal to 7-Eleven Malaysia under the distribution agreement were MYR20.1 million, MYR20.1 million and MYR22.4 million for the years ended December 31, 2013, 2014 and 2015, respectively.

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D. Exchange Controls.

The Cayman Islands currently has no exchange control restrictions. See also Item 4.B. “Information on the Company—Business Overview—Regulation” for summaries exchange control regulations in certain other jurisdictions.

E. Taxation.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or our shareholders or ADS holders levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

United States Federal Income Tax Considerations

The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition of the ADSs or ordinary shares by a U.S. Holder (as defined below) that holds the ADSs or ordinary shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended, or the Code. This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the “IRS”) with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not discuss all aspects of United States federal income taxation that may be important to particular holders in light of their individual circumstances, including holders subject to special tax rules (including for example, banks or other financial institutions, insurance companies, regulated investment companies, real estate investment trusts, cooperatives, pension plans, partnerships and their partners, broker-dealers, traders in securities that elect mark-to-market treatment, tax-exempt organizations (including private foundations), holders who are not U.S. Holders, holders who own (directly, indirectly or constructively) 10% or more of our voting stock, holders who acquired their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation, holders that hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for United States federal income tax purposes, or holders that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those discussed below). This discussion, moreover, does not address any state, local, non-income tax (such as the U.S. federal estate and gift tax), non-U.S. tax, alternative minimum tax, or Medicare tax considerations. Each U.S. Holder is urged to consult its tax advisor regarding the United States federal, state, local and non-United States income and other tax considerations relating to the ownership and disposition of the ADSs or ordinary shares.

General

For purposes of this discussion, a “U.S. Holder” is a beneficial owner of the ADSs or ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a United States person under the Code.

If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of the ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding the ADSs or ordinary shares and their partners are urged to consult their tax advisors regarding an investment in the ADSs or ordinary shares.

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It is generally expected that a U.S. Holder of ADSs should be treated as the beneficial owner, for United States federal income tax purposes, of the underlying shares represented by the ADSs. The remainder of this discussion assumes that a holder of ADSs will be treated in this manner. Accordingly, deposits or withdrawals of ordinary shares for ADSs will not be subject to United States federal income tax.

Passive Foreign Investment Company Considerations

A non-United States corporation, such as our company, will be a “passive foreign investment company,” or PFIC, for United States federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the company’s goodwill and other unbooked intangibles are taken into account. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, more than 25% (by value) of the stock.

Based upon the current and projected income and asset composition and projections as to the value of our assets which are based in part on the market price of the ADSs, we do not expect to be a PFIC for the current taxable year or in the foreseeable future. While we do not anticipate being a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of the ADSs, fluctuations in the market price of the ADSs (which may be volatile) may cause us to become a PFIC for the current or subsequent taxable years. In addition, the composition of our income and our assets will be affected by how, and how quickly, we spend our liquid assets.

Furthermore, because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification of certain income or assets as non-passive, or our valuation of our goodwill and other unbooked intangibles, each of which may result in our company becoming classified as a PFIC for the current or subsequent taxable years. Because determination of PFIC status is a fact-intensive inquiry made on an annual basis and will depend upon the composition of our assets and income, and the continued existence of our goodwill at that time, no assurance can be given that we are not or will not become a PFIC. If we are a PFIC for any year during which a U.S. Holder holds the ADSs or ordinary shares, we generally will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years during which such U.S. Holder holds the ADSs or ordinary shares.

The discussion below under “Dividends” and “Sale or Other Disposition of ADSs or Ordinary Shares” is written on the basis that we will not be a PFIC for United States federal income tax purposes. The United States federal income tax rules that apply if we are a PFIC are generally discussed below under “Passive Foreign Investment Company Rules.”

Dividends

Subject to the discussion below under “Passive Foreign Investment Company Rules,” any cash distributions paid on the ADSs or ordinary shares out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of ordinary shares, or by the depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution we pay will generally be treated as a “dividend” for United States federal income tax purposes. A non-corporate U.S. Holder will generally be subject to tax on dividend income from a “qualified foreign corporation” at a lower applicable capital gains rate rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met. Dividends received on the ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to corporations.

A non-United States corporation (other than a corporation that is a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) will generally be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (ii) with respect to any dividend it pays on stock (or ADSs in respect of such stock) which is readily tradable on an established securities market in the United States. Our ADSs are listed on the NASDAQ Global Market, which is an established securities market in the United States, and the ADSs are expected to be considered readily tradable for so long as they continue to be listed on the NASDAQ Global Market. Thus, we believe that dividends we pay on the ADSs will be treated as paid by a qualified foreign corporation. Since we do not expect that our ordinary shares will be listed on an established securities market, it is unclear whether dividends that we pay on our ordinary shares that are not represented by ADSs will meet the conditions required for the reduced tax rate. There can be no assurance that the ADSs will continue to be considered readily tradable on an established securities market in later years.

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Dividends will generally be treated as income from foreign sources for United States foreign tax credit purposes and will generally constitute passive category income. Depending on the U.S. Holder’s individual facts and circumstances, a U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit not in excess of any applicable treaty rate in respect of any foreign withholding taxes imposed on dividends received on the ADSs or ordinary shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholding, but only for a year in which such holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and their outcome depends in large part on the U.S. Holder’s individual facts and circumstances. Accordingly, U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale or Other Disposition of ADSs or Ordinary Shares

Subject to the discussion below under “Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder’s adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term if the ADSs or ordinary shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. Long-term capital gains of non-corporate taxpayers are currently eligible for reduced rates of taxation. The deductibility of a capital loss may be subject to limitations. U.S. Holders are urged to consult their tax advisors regarding the tax consequences if a foreign tax is imposed on a disposition of the ADSs or ordinary shares.

Passive Foreign Investment Company Rules

If we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition, including a pledge, of ADSs or ordinary shares. Under the PFIC rules:

• the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;

• the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;

• the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and

• the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year.

If we are a PFIC for any taxable year during which a U.S. Holder holds the ADSs or ordinary shares and any of our subsidiaries is also a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to any of our subsidiaries.

As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to such stock, provided that such stock is regularly traded on a qualified exchange or other market within the meaning of the applicable Treasury regulations. The ADSs (but not our ordinary shares) are listed on the NASDAQ Global Market, which is a qualified exchange for these purposes. We anticipate that the ADSs will be considered regularly traded for so long as they continue to be listed, but no assurances can be given in this regard. If a U.S. Holder makes this election, the holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year, but such deduction will only be allowed to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of a corporation that is a PFIC and such corporation ceases to be a PFIC, the holder will not be required to take into account the gain or loss described in this paragraph during any period that such corporation is not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of the ADSs in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market election.

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Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes.

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described above.

If a U.S. Holder owns the ADSs or ordinary shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621. Each U.S. Holder is urged to consult its tax advisor concerning the United States federal income tax consequences of holding and disposing ADSs or ordinary shares if we are or become a PFIC, including the possibility of making a mark-to-market election, the “deemed sale” and “deemed dividend” elections.

Information Reporting

Certain U.S. Holders are required to report information to the IRS relating to an interest in “specified foreign financial assets,” including shares issued by a non-United States corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a United States financial institution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to timely do so.

In addition, U.S. Holders may be subject to possible information reporting to the IRS with respect to dividends on and proceeds from the sale or other disposition of the ADSs or ordinary shares. Each U.S. Holder is advised to consult with its tax advisor regarding the application of the United States information reporting rules to their particular circumstances.

F. Dividends and Paying Agents.

Not applicable.

G. Statements by Experts.

Not applicable.

H. Documents on Display.

We previously filed with the SEC our registration statement on Form F-1 (Registration No. 333-197401), as amended, including the prospectus contained therein, to register our ordinary shares in relation to our initial public offering. We have also filed with the SEC a related registration statement on F-6 (Registration No. 333-198897) to register the ADSs.

We are subject to the periodic reporting and other informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under the Exchange Act, we are required to file reports and other information with the SEC, including filing annually a Form 20-F within four months after the end of each fiscal year, which is December 31. Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will furnish The Bank of New York Mellon, the depositary of our ADSs, with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our written request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us.

I. Subsidiary Information.

Not applicable.

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ITEM 11. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to changes in interest rates relates primarily to our deposits with banks and interest-bearing debt obligations. We do not use derivative financial instruments to hedge our risk but regularly review our debt portfolio to enable us to source low interest funding. Our deposits are placed at fixed rates and management seeks to obtain the best rate available in the market.

Sensitivity analysis for interest rate risk

As of December 31, 2013, 2014 and 2015, respectively, if interest rates had been 50 basis points lower, with all other variables held constant, our post-tax profit for the financial year would have been MYR0.1 million, MYR0.1 million and MYR Nil higher, and if interest rates had been 50 basis points higher, with all other variables held constant, our post-tax profit for the financial year would have been MYR0.1 million, MYR0.1 million and MYR Nil lower. This is primarily due to the resulting effect on our finance costs for floating rate borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on a prudent estimate of the current market environment.

Foreign Exchange Risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. As we have continued to expand our international operations, we have become more exposed to the effects of fluctuations in currency exchange rates. In addition to our operations in Malaysia from which we earn revenue denominated in Malaysian Ringgit, we also earn revenue denominated in Thai Baht, Turkish Lira, Philippine Pesos and U.S. dollars, among other currencies. In 2015, 66.5% of our revenue was earned in currencies other than Malaysian Ringgit. We incur expenses for employee salaries and other operating expenses in the local currencies in the jurisdictions in which we operate, with the largest portion being incurred in Malaysia as our head office is based there. Fluctuations in the exchange rates between the Malaysian Ringgit and those other currencies could result in the Malaysian Ringgit equivalent of such expenses being higher and/or the Malaysian Ringgit equivalent of such foreign currency-denominated revenue being lower than would be the case if exchange rates were stable. We do not generally enter into hedging contracts to limit our exposure to fluctuations in the value of the Malaysian Ringgit, or any other currency. Furthermore, the substantial majority of our revenue is denominated in emerging markets currencies, including the Malaysian Ringgit. Our foreign currency translation reserve, which represents foreign exchange gains and losses arising from the translation of the financial statements of foreign operations for which the functional currency is not the Malaysian Ringgit, was a deficit of MYR2.5 million, MYR8.2 million and MYR11.4 million as of December 31, 2013, 2014 and 2015, respectively. In recent months, foreign currency exchange rates for emerging markets currencies have experienced substantial volatility. For example, in 2015 the exchange rates between U.S. dollars and Malaysian Ringgit varied from a high of 4.4560 Malaysian Ringgit per U.S. dollar to a low of 3.5150 Malaysian Ringgit per U.S. dollar. Although fluctuations in the value of the Malaysian Ringgit and other emerging markets currencies are not necessarily correlated, there can be no assurance that our results of operations will not be adversely affected by such volatility. Our historical results of operations have not been materially affected by movements in foreign currency exchange rates. See “Risk Factors—Fluctuations in foreign currency exchange rates will affect our financial results, which we report in Malaysian Ringgit.”

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulty in meeting financial obligations due to shortage of funds. Our exposure to liquidity risk arises from mismatches of the maturities of financial assets and liabilities. Our objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and hire-purchase agreements. Our holding of cash and short-term deposits, together with committed funding facilities and net cash flow from operations, are expected to be sufficient to cover our cash flow needs. As of December 31, 2013, our current liabilities exceeded our current assets, however as of December 31, 2014 and 2015, our current assets exceed our current liabilities. See “—Liquidity and Capital Resources.”

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Maturity profile of financial liabilities

The table below summarizes the maturity profile of our financial liabilities as at the reporting date. The table was prepared based on the undiscounted cash flows on financial liabilities on the basis of the earliest date at which we can be required to pay. The table includes both interest and principal cash flows.

	Weighted average effective     interest rate	On demand or within 1 year		Within 2 to 5 years		After 5 years		Total		Carrying amount
		(MYR in millions, except percentages)
2015
Non-interest bearing	—		205.5		26.4		—		231.9		231.9
Fixed interest rate instruments	2.6%-10.0%		17.2		2.4		—		19.6		17.8
			222.7		28.8		—		251.5		249.7
2014 (Restated)
Non-interest bearing	—		102.4		37.3		—		139.7		189.7
Variable interest rate instruments	7.4%-7.9%		0.2		0.8		1.8		2.8		2.0
Fixed interest rate instruments	2.6%-7.3%		56.5		1.2		—		57.7		53.8
			159.1		39.3		1.8		200.2		195.5
2013
Non-interest bearing	—		124.8		—		—		124.8		124.8
Variable interest rate instruments	7.6%-7.9%		0.2		0.6		1.4		2.2		2.2
Fixed interest rate instruments	2.6%-7.3%		74.4		1.5		—		75.9		70.8
			199.4		2.1		1.4		202.9		197.8

ITEM 12. Description of Securities Other Than Equity Securities

A. Debt Securities.

Not applicable.

B. Warrants and Rights.

Not applicable.

C. Other Securities.

Not applicable.

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D. American Depositary Shares.

Fees and Charges our ADS Holders May Have to Pay

Persons depositing or withdrawing ordinary shares or ADS holders must pay:	For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	Issuance of ADSs, including issuances resulting from a distribution of ordinary shares or rights or other property Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
$.05 (or less) per ADS	Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if securities distributed to you had been ordinary shares and the ordinary shares had been deposited for issuance of ADSs	Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders
$.05 (or less) per ADSs per calendar year	Depositary services
Registration or transfer fees	Transfer and registration of ordinary shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw ordinary shares
Expenses of the depositary	Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian has to pay on any ADSs or ordinary shares underlying ADSs, such as stock transfer taxes, stamp duty or withholding taxes	As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	As necessary

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing ordinary shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may collect any of its fees by deduction from any cash distribution payable to ADS holders that are obligated to pay those fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Fees and Other Payments Made by the Depositary to Us

From time to time, the depositary may make payments to us to reimburse and / or share revenue from the fees collected from ADS holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment and maintenance of the ADS program. In performing its duties under the deposit agreement, the depositary may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

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PART II

ITEM 13. Defaults, Dividend Arrearages and Delinquencies

None.

ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

Material Modifications to the Rights of Security Holders

See Item 10.B.—“Additional Information—Memorandum and Articles of Association” and our registration statement on Form F-1 (Registration No. 333-197401), as amended, under the heading “Description of Share Capital” for a description of the rights of securities holders, which remain unchanged.

Use of Proceeds

The following “Use of Proceeds” information relates to the registration statement on Form F-1, as amended (File Number: 333-197401) in relation to our initial public offering of 13,500,000 ADSs representing 13,500,000 of our ordinary shares at an initial offering price of $12.50 per ADS. Citigroup Global Markets Inc., Deutsche Bank Securities LLC, UBS Secretaries LLC and CIMB Securities (Singapore) Pte. Ltd. were the representatives of the underwriters for our initial public offering.

We received net proceeds of approximately $87.9 million from our initial public offering. For the period from October 8, 2014, the date that the F-1 Registration Statement was declared effective by the SEC, to December 31, 2015, the net proceeds received from our initial public offering were mainly used to increase our beneficial ownership in our subsidiaries and to repurchase ADSs. See Item 16E. “Purchases of Equity Securities by the Issuer and Affiliated Purchasers”. We intend to use the remainder of the proceeds from our initial public offering, as disclosed in our registration statement on Form F-1, to repay indebtedness , to increase our beneficial ownership in our subsidiaries and for general corporate purposes.

ITEM 15. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Group Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, which is defined in Rules 13a-15(e) of the Exchange Act, as of December 31, 2015. Based on that evaluation, our Chief Executive Officer and Group Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2015 were not effective as a result of the material weaknesses and significant deficiencies in internal control over financial reporting as described below and in Item 3.D “Key Information—Risk Factors— If we fail to maintain an effective system of internal control over financial reporting, we may lose investor confidence in the reliability of our financial statements.”

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our chief executive officer and chief financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements for external reporting purposes in accordance with IFRS.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. In making this assessment, management used the framework set forth in the report Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication and (v) monitoring.

Based on that evaluation, management concluded that these controls were not effective at December 31, 2015 as a result of the material weakness and significant deficiencies in our internal control over financial reporting described below. We believe that we are taking the steps necessary for remediation as described below, and we will continue to monitor the effectiveness of these steps and to make any changes that our management deems appropriate.”

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Changes in Internal Controls Over Financial Reporting

In connection with the audit of our consolidated financial statements for the year ended December 31, 2015, one material weakness in regards to our accounting of complex transactions was identified in our internal control over financial reporting, which relates to how the company’s lack of technical financial reporting expertise to appropriately report complex transactions under IFRS and which resulted in restatement in our consolidated financial results for various periods to correct our accounting for certain transactions, as disclosed in our interim report on Form 6-K (File No. 36637) furnished to the SEC on May 2, 2016. See Item 3.D. “Key Information – Risk Factors – Risks Relating to Our Business - Certain errors were identified in our consolidated statements of financial position and our consolidated statements of profit or loss and other comprehensive income as of and for the three month periods ended December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2015 and the year ended December 31, 2014” and “Key Information – Risk Factors – Risks Relating to Our Business – Certain errors were identified in our consolidated statements of profit or loss and other comprehensive income for three month periods ended March 31, 2013, June 30, 2013, September 30, 2013, December 31, 2013, March 31, 2014, June 30, 2014 and September 30, 2014, the six month periods ended June 30, 2013 and 2014, and the year ended December 31, 2013.”

Firstly, with respect to PayByMe, we have restated our consolidated financial results for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month periods ended September 30, 2014 and 2015 and the year ended December 31, 2014 to correct our accounting for certain transactions entered into in connection with our acquisition of PayByMe. In particular, the restatements relate to put options granted to the holder of the non-controlling interest of PayByMe and our accounting for foreign currency gains/(losses) attributable to non-operating transactions in connection with a bank guarantee that we secured for the benefit of the holders of the non-controlling interest of PayByMe. A review of the application of IFRS to options (the “Put Options”) granted by MOL AccessPortal, in connection with the acquisition by MOL AccessPortal of a 51% equity interest in PayByMe resulted in a restatement of previous accounting. In September 2014, we acquired a 51% equity interest in PayByMe and in connection with the acquisition, MOL AccessPortal granted the Put Options to the holders of the non-controlling interest of PayByMe, pursuant to which the holders of the non-controlling interest have the contractual right to require MOL AccessPortal to subscribe for shares representing the remaining 49% equity interest in PayByMe that MOL AccessPortal does not already own (the “Option Shares”) in tranches during specified periods. These options are disclosed in note 17(b)(i) (Acquisition of Klon Ödeme ve Iletisim Teknolojileri Anonim Şirketi ("PayByMe")) and 36(ii) (Derivative Financial Liabilities) to our consolidated financial statements as of and for the year ended December 31, 2014. Upon reviewing the application of IFRS, we noted that we are required to recognize a gross obligation for the present value of the redemption amount of the Put Options because the holders of the non-controlling interest have the right to require MOL AccessPortal to pay cash or another financial asset in exchange for the Option Shares. The gross obligation must be recognized at an amount equal to the present value of the estimated amounts that could be required to be paid to the holders of the non-controlling interest in accordance with the shareholders agreement between MOL AccessPortal and the holders of the non-controlling interest and are subject to re-measurement at the end of each reporting period. Changes in the measurement of the gross obligation due to the unwinding of the discount or changes in the estimated amounts that the acquirer could be required to pay are recognized in profit or loss at the end of each reporting period. As a result, we restated our put option written on non-controlling interest on our consolidated statements of financial position as of September 30, 2014 and 2015, December 31, 2014 and 2015, March 31, 2015, and June 30, 2015. In addition, the gross obligation on in-substance forward recognized in connection with these options gives rise to a loss on re-measurement of gross obligation to be reported as “finance costs”, on our consolidated statements of profit or loss and other comprehensive income for the three and nine month periods ended September 30, 2014 and 2015, the three month periods ended December 31, 2014 and 2015, the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the year ended December 31, 2014 . None of the fair value adjustments and corresponding re-measurements have any impact on our operating cash flows during the relevant periods. The gain/(loss) on re-measurement of gross obligation that should be recognized in our consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015 was MYR0.4 million, MYR (4.2) million, MYR (2.9) million and MYR (2.3) million respectively. For the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, the loss on re-measurement of gross obligation was MYR(3.7) million and MYR(6.7) million, repsectively. For the three month period and year ended December 31, 2014, the loss on re-measurement of gross obligation was MYR(3.2) million. Accordingly, a restatement has been made to the consolidated financial statements as of and for the three month periods ended September 30, 2014, December 31, 2014, March 31, 2015, June 30, 2015, September 30, 2015, December 31, 2015, the six month period ended June 30, 2015, the nine month period ended September 30, 2014 and 2015 and the year ended December 31, 2014.

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Secondly, as required under the terms of our acquisition of PayByMe, we secured a bank guarantee for the benefit of the holders of the non-controlling interest of PayByMe in December 2014. These funds were originally treated as working capital. However, having reviewed the nature of the transactions in connection with the bank guarantee, we have determined that these transactions are non-operating in nature. Accordingly, all foreign exchange gains or losses should be recognized as either “other income” if they relate to foreign currency exchange gains and “non-operating expenses” if they relate to foreign currency exchange losses. As a result of the above and in an effort to better reflect the nature of the foreign currency transactions during the year, we determined to restate our foreign exchange transactions according to the nature of the transactions in particular whether or not they are deemed attributable to operations. Foreign exchange gain/(loss) attributable to non-operating transactions of MYR1.7 million, MYR(0.2) million and MYR6.0 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the three month periods ended March 31, 2015, June 30, 2015 and September 30, 2015, respectively, and MYR1.6 million and MYR7.6 million was included in “other operating expenses” in our condensed interim consolidated statements of profit or loss for the six month period ended June 30, 2015 and the nine month period ended September 30, 2015, respectively. In our restated condensed interim consolidated statements of profit or loss for the three month period ended March 31, 2015, the three and six month periods ended June 30, 2015 and the three and nine month periods ended September 30, 2015, these amounts are reclassified as “other income” to the extent that they relate to foreign exchange currency gains and “non-operating expenses” to the extent that they relate to foreign currency exchange losses, in each case reported below the line of “loss from operations”.

The Company intends to strengthen their reporting function to include competent finance staff by recruiting capable accounting staff from established accounting firms to strengthen the internal control over financial reporting. The company is also reviewing the feasibility of engaging an independent accounting practice to provide consultancy guidance on such complex transaction.

In addition, the Company has identified significant deficiencies in its internal control over financial reporting. We have taken the approach of identifying the significant deficiencies by the individual reporting entities as compared to an overall assessment for the Company due to the specific nature of the business segment that these entities operate in. Significant deficiencies were identified in our internal control over financial reporting at PayByMe, Nganluong and Easy2Pay.

PayByMe is part of the MOLPoints business segment. In 2014, material weaknesses were identified in PayByMe in respect to lack of documentation and review of journal entries and weaknesses in the reconciliation and confirmation process, which in 2015 have been classified as significant deficiencies. In connection with lack of review of journal entries, we intend to further strengthen ourreview process to ensure that the journals being prepared are properly verified and approved before being included in the financial statements of PayByMe. In connection with the reconciliation of collection and confirmation process, during 2016 we implemented various processes to ensure that reconciliation is done for collection on a timely basis. We are also reviewing the need to carry out more regular confirmation and plan to implement corrective measures to strengthen the internal control procedures.

With respect to Nganluong, which is part of the MOLPay business segment, significant deficiencies were identified relating to the lack of internal controls over reconciliation namely, revenue recognized on transaction fees and the corresponding other payable account that were unutilized or undrawn from user e-wallet balance, the timeliness of the reconciliation of other payable account of unutilized or undrawn user e-wallet credit as per the general ledger against the e-wallet balances generated from Nganluong’s operating system and for intercompany balances. In addition, there were no confirmations or statement of accounts sent to Nganluong’s e-wallet users, subsidiary ledger was not maintained to record the detail movement of transactions by each user and incomplete documentation retained for control procedures. In terms of General Information Technology Control, there was absence of key program change controls or password setting to Nganluong’s system, no proper documentation on the program changes and lack of segregation of duties between personnel performing development work and personnel implementing changes to the production environment and weaknesses in audit logging and review practices for the Nganluong databases.

With respect to Easy2Pay, which is part of MOLPoints business segment, significant deficiencies were identified in relation to the weaknesses surrounding Easy2Pay’s General Information Technology Control such as the absence of formalized policies and procedures for the data center and network operations, access security, program change and system software acquisition, development and maintenance. It was also noted that there were absence of documentation in IT helpdesk incident management, no periodic testing for ongoing readability of the backup data stored on a replication server, absence of document approvals for user ID administration activities, absence of periodic access rights review and user ID housekeeping, absence of proper documentation for system software and program change management, multiple IT staff performing the role of system administrator and system developer, audit logs were not enabled for the Customer Management System (CMS) application and operating system hosting the CMS application and audit logs enabled for CMS database were not periodically reviewed for exceptions.

The Company has been strengthening its reporting team by increasing the staff resource at both head office and country finance function. In addition, the Internal Audit function has also been strengthened to provide additional supervisory and assurance on financial reporting. The company is also reviewing the feasibility of engaging an independent accounting practice to provide consultancy guidance on such complex transaction

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We can give no assurance that our planned remediation will be properly implemented or will be sufficient to eliminate such material weaknesses and significant deficiencies or that additional material weaknesses or significant deficiencies in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal controls over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements, cause us to fail to meet our reporting obligations and cause investors to lose confidence in our reported financial information.

Our Chief Executive Officer and Group Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2015 was not effective as a result of the material weaknesses and significant deficiencies in our internal control over financial reporting.

The audits of our independent registered public accounting firm included consideration of internal control over financial reporting, and the identified material weaknesses and significant deficiencies, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting.

We are not required to, and our independent registered public accounting firm did not, undertake an audit of the effectiveness of our internal controls over financial reporting, whether of the type set forth in Section 404 of the Sarbanes-Oxley Act of 2002 or otherwise. Our independent registered public accounting firm will not be required to report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until our annual report on Form 20-F following the date on which we cease to qualify as an “emerging growth company,” which may be up to five full fiscal years following the date of our initial public offering. If in subsequent years we are unable to assert that our internal control over financial reporting is effective, or if our auditors express an opinion that our internal control over financial reporting is not effective, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

ITEM 16A. Audit Committee Financial Expert

Our board of directors has determined that Mr. Eric He is an “audit committee financial expert” as defined in Item 16A of Form 20-F under the Exchange Act. Our board of directors has also determined that Mr. Eric He satisfies the “independence” requirements set forth in Rule 10A-3 under the Exchange Act.

ITEM 16B. Code of Ethics

Our board of directors adopted a code of business conduct and ethics that applies to our directors, officers, employees and advisors, which became effective in July 14, 2014. We have posted a copy of our code of business conduct and ethics on our website at http://ir.mol.com.

ITEM 16C. Principal Accountant Fees and Services

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by Deloitte, our principal external auditors, for the periods indicated.

	For the year ended December 31,
	2014		2015
	(MYR in millions)
Audit Fees		2.5		3.1
Audit Related Fees		7.6		—
Tax fees		0.3		0.1
All Other Fees		0.0		—
Total		10.4		3.2

136

Audit Fees

Audit fees in 2014 and 2015 were related to the audit of our consolidated financial statements and other audit or interim review services provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees

Audit-related fees in 2014 and 2015 were related to professional services rendered in connection with our initial public offering and secondary public offering.

Tax Fees

Tax fees in 2014 and 2015 were related to tax compliance and tax planning services.

All Other Fees

All other fees in 2014 and 2015 relate to services in connection with corporate compliance matters.

Pre-Approval Policies and Procedures

All audit and non-audit services provided by our independent auditors must be pre-approved by our audit committee. None of the audit fees, tax fees and other fees (other than audit fees) described above relate to services that required the approval of, or were approved by, our audit committee.

ITEM 16D. Exemptions from the Listing Standards for Audit Committees

None.

ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On December 1, 2014, we announced that our board of directors had approved a share repurchase program, authorizing us to repurchase at any time during the subsequent 12 months an aggregate of up to $15 million of ADSs, from time to time, subject to customary blackout periods, including periodic blackout periods pending the release of our financial results. Purchases by us under the share repurchase program may be made from time to time at prevailing market prices in open market purchases, privately negotiated transactions, block purchases or otherwise, as determined by our management. The purchases are funded from our cash balances. The timing, frequency and amount of repurchase activity depend on a variety of factors such as levels of cash generation from operations, cash requirements for investment in our business, current stock price, market conditions and other factors. The share repurchase program may be suspended, modified or discontinued at any time and has no set expiration date.

The following table sets forth certain details with respect to repurchases of ADSs by us pursuant to our publicly announced share repurchase program.

	(a) Total Number of ADSs(1) Purchased		(b) Average Price Paid per ADS(2)(3)				(c) Total Number of ADSs Purchased as part of Publicly Announced Plans or Programs		(d) Approximate Value of ADSs that May Yet be Purchased Under the Program(2)
			($)		(MYR)				($ in millions)		(MYR in millions)
December 2014 (December 11, 2014 through December 31, 2014)		1,137,789		2.93		10.23		1, 137,789		11.7		40.8
June 2, 2015		1,500,000		1.82		7.81		1, 500,000		8.9		38.181

137

Note:

(1) Each ADS represents one ordinary share, par value $1.00 per share.

(2) The translations of U.S. dollar amounts into MYR amounts have been made at the rate of MYR3.4950 to $1.00 and MYR4.2900 to $1.00, the noon buying rate in The City of New York for cable transfers of MYR as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2014 and on December 31, 2015 respectively. See Item 3.A. “Key Information — Selected Financial Data — Exchange Rate Information.”

(3) Includes transaction costs.

On December 1, 2014, we announced that Mr. Ganesh Kumar Bangah, our founder and former Director and Executive Chairman, had informed our Board of Directors that he plans to purchase at any time during the subsequent 12 months an aggregate of up to $0.5 million of ADSs, from time to time, subject to customary blackout periods, including periodic blackout periods pending the release of our financial results.

The following table sets forth certain details with respect to repurchases of ADSs by our founder and former Director and Executive Chairman, Ganesh Kumar Bangah pursuant to his publicly announced share repurchase plan. Ganesh Kumar Bangah has not repurchased any ADSs during 2015.

	(a) Total Number of ADSs(1) Purchased		(b) Average Price Paid per ADS(2)(3)				(c) Total Number of ADSs Purchased as part of Publicly Announced Plans or Programs		(d) Approximate Value of ADSs that May Yet be Purchased Under the Program(2)
			($)		(MYR)		($ in millions)		(MYR in millions)
December 2014 (December 17, 2014 through December 18, 2014)		133,636		2.71		9.46		133,636		0.14	0.5

Note:

(1) Each ADS represents one ordinary share, par value $1.00 per share.

(2) The translations of U.S. dollar amounts into MYR amounts have been made at the rate of MYR3.495 to $1.00, the noon buying rate in The City of New York for cable transfers of MYR as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2014. See Item 3.A. “Key Information — Selected Financial Data — Exchange Rate Information.”

(3) Includes transaction costs.

Pursuant to these plans, we and our founder and former Director and Executive Chairman, Ganesh Kumar Bangah purchased an aggregate of 1,271,425 of ADSs and may yet purchase a further aggregate $12.1 million (MYR42.1 million) of ADSs.

ITEM 16F. Change in Registrant’s Certifying Accountant

Not applicable.

ITEM 16G. Corporate Governance

As a Cayman Islands company listed on the Nasdaq Global Market, we are subject to the Nasdaq Global Market corporate governance listing standards. However, Nasdaq Global Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Global Market corporate governance listing standards. Currently, we do not plan to rely on home country exemption for corporate governance matters. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would under the Nasdaq Global Market corporate governance listing standards applicable to U.S. domestic issuers. See Item 3.D. “Key Information – Risk Factors – Risks Related to Our ADSs – We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.”

138

ITEM 16H. Mine Safety Disclosure

Not applicable.

139

PART III

ITEM 17. Financial Statements

We have responded to Item 18 in lieu of responding to this item.

ITEM 18. Financial Statements

Please refer to the financial statements beginning on page F-1.

ITEM 19. Exhibits

Exhibit Number	Description of Document
1.1*	Amended and Restated Memorandum and Articles of Association
2.1	Specimen American Depositary Receipt (included in Exhibit 2.3)
2.2	Specimen Certificate for Ordinary Shares (incorporated by reference to Exhibit 4.2 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on September 23, 2014)
2.3	Deposit Agreement, among the Registrant, the depositary and holders of the American Depositary Receipts (incorporated by reference to Exhibit 2.3 from our annual report on Form 20-F (File No. 001-36637), filed with the Commission on April 30, 2014)
4.1	Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated by reference to Exhibit 10.2 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014).
4.2	Form of Employment Agreement between the Registrant and its executive officers (incorporated by reference to Exhibit 10.3 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014).
4.3	Form of Director Agreement between the Registrant and its directors (incorporated by reference to Exhibit 10.4 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014).
4.4	Distribution Agreement between 7-Eleven Malaysia Sdn Bhd dated November 2, 2009 (incorporated by reference to Exhibit 10.5 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014).
4.5	Addendum dated September 3, 2013 to the Distribution Agreement between 7-Eleven Malaysia Sdn Bhd dated November 2, 2009 (incorporated by reference to Exhibit 10.6 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014).
8.1*	Subsidiaries of the Registrant
11.1	Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 from our F-1 registration statement (File No. 333-197401), as amended, initially filed with the Commission on July 14, 2014)
12.1*	CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*	CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1**	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith

** Furnished herewith

140

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

MOL GLOBAL, INC.
By:	/s/ Preecha Praipattarakul
Name:	Preecha Praipattarakul
Title:	Chief Executive Officer

Date: May 2, 2016

141

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

AND ITS SUBSIDIARY COMPANIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND

DECEMBER 31, 2014

(In Malaysian Ringgit)

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

FINANCIAL STATEMENTS

CONTENTS	PAGE(S)
Report of Independent Registered Public Accounting Firm		F-2
Consolidated statements of profit or loss and other comprehensive income		F-4 - F-6
Consolidated statements of financial position		F-7 - F-8
Consolidated statements of changes in equity		F-9 - F-18
Consolidated statements of cash flows		F-19 - F-23
Notes to the financial statements		F-24 - F-175

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Shareholders and the Board of Directors of MOL Global, Inc.:

We have audited the accompanying consolidated statements of financial position of MOL Global, Inc. (the “Company”) and subsidiaries (collectively referred as the “Group”) as of December 31, 2014 and 2015, and the related consolidated statements of profit or loss and other comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2015. These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provides a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the MOL Global, Inc. and subsidiaries as of December 31, 2014 and 2015 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

As discussed in Note 48 to the consolidated financial statements, the 2014 financial statements have been restated to correct a misstatement.

F-2

Our audits also comprehended the translation of Malaysian Ringgit amounts into United States dollar (“USD”) amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note 3.27 of the financial statements. Such United States dollar amounts are presented solely for the convenience of readers in the United States of America.

DELOITTE

AF 0080

Chartered Accountants

KUALA LUMPUR, MALAYSIA

April 27, 2016

F-3

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2015

	Note	2013			2014			2015			2015
		MYR			MYR			MYR			USD
					(Restated, see Note 48)
Revenue	5		171,518,303			202,713,170			248,479,461			57,920,620
Direct cost and other ancillary expenses			(70,018,771	)		(94,443,136	)		(140,981,115	)		(32,862,731	)
Employee expenses	7		(30,977,954	)		(52,248,488	)		(135,136,178	)		(31,500,275	)
Depreciation and amortization expenses	9		(20,555,751	)		(24,363,145	)		(28,033,750	)		(6,534,674	)
Marketing, advertising and promotion expenses			(8,314,856	)		(6,085,264	)		(7,985,820	)		(1,861,497	)
Communication and travelling expenses			(5,681,390	)		(7,864,449	)		(8,347,540	)		(1,945,813	)
Office related expenses			(3,863,869	)		(4,291,292	)		(5,715,244	)		(1,332,225	)
Contract and professional expenses			(2,610,993	)		(20,111,233	)		(16,021,242	)		(3,734,555	)
Other operating expenses			(4,055,736	)		(12,058,933	)		(50,468,397	)(1)		(11,764,195	)
Other operating income	10		—			—			6,954,830	(2)		1,621,172
Profit/(Loss) from operations			25,438,983			(18,752,770	)		(137,254,995	)		(31,994,173	)
Other income	10		2,528,467			7,575,489			11,985,542	(3)		2,793,832
Non-operating expenses			(3,039,980	)		—			—			—
Finance costs	11		(5,086,045	)		(9,141,521	)		(11,161,957	)(4)		(2,601,855	)
Share of results of associates	18		(13,259	)		(104,489	)		(15,323	)		(3,572	)
Profit/(Loss) before tax	12		19,828,166			(20,423,291	)		(136,446,733	)		(31,805,768	)
Income tax expense	13		(1,155,641	)		(636,923	)		(2,435,039	)		(567,608	)
Profit/(Loss) for the year			18,672,525			(21,060,214	)		(138,881,772	)		(32,373,376	)

⁽¹⁾ Included in other operating expenses is impairment of goodwill and intangible assets of MYR38,418,274 (2014: MYRNil; 2013: MYRNil) as disclosed in Note 21.

⁽²⁾ Included in other operating income is unrealized gain on foreign exchange related to operating activities of MYR5,701,723 (2014: MYRNil; 2013: MYRNil) as disclosed in Note 10.

⁽³⁾ Included in other income is unrealized gain on foreign exchange related to non-operating activities of MYR6,412,170 (2014: MYRNil; 2013: MYRNil) as disclosed in Note 10.

⁽⁴⁾ Included in finance costs is unwinding of discount and change in estimates of gross obligations of MYR8,960,571 (2014: MYR3,154,269; 2013: MYRNil) as disclosed in Note 11.

F-4

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Note	2013			2014			2015			2015
		MYR			MYR			MYR			USD
					(Restated, see Note 48)
Other comprehensive (loss)/income, net of tax
Items that will not be reclassified subsequently to profit or loss:
Re-measurement gain on pension liabilities, net of tax of MYR45,654 (2014: MYR829)			111,444			1,935			136,055			31,714
Items that are or may be reclassified subsequently to profit or loss:
Available-for-sales financial assets
- Fair value gain			—			15,258			—			—
- Reclassification to profit or loss			—			—			(15,258	)		(3,557	)
Exchange differences on translating foreign operations, net of tax of MYRNil			(3,913,878	)		10,697,486			4,766,246			1,111,013
Other comprehensive (loss)/income for the year, net of tax			(3,802,434	)		10,714,679			4,887,043			1,139,170
Total comprehensive income/(loss) for the year			14,870,091			(10,345,535	)		(133,994,729	)		(31,234,206	)

F-5

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Note	2013		2014			2015			2015
		MYR		MYR			MYR			USD
				(Restated, see Note 48)
Profit/(Loss) for the year attributable to:
Owners of the Company			12,006,984		(24,754,482	)		(140,529,144	)		(32,757,379	)
Non-controlling interests			6,665,541		3,694,268			1,647,372			384,003
			18,672,525		(21,060,214	)		(138,881,772	)		(32,373,376	)
Total comprehensive income/(loss) for the year attributable to:
Owners of the Company			9,495,453		(14,055,504	)		(137,221,381	)		(31,986,339	)
Non-controlling interests			5,374,638		3,709,969			3,226,652			752,133
			14,870,091		(10,345,535	)		(133,994,729	)		(31,234,206	)
Earnings/(Loss) per share
Basic/Diluted (sen)	14		20.39		(40.44	)		(214.58	)		(50.01	)

The accompanying notes form an integral part of the financial statements.

F-6

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2015

	Note	2013		2014		2015		2015
		MYR		MYR		MYR		USD
				(Restated, see Note 48)
ASSETS
Non-current assets
Property, plant and equipment	15		8,653,391		11,175,815		11,725,474		2,733,211
Investment property	16		2,393,789		2,367,484		—		—
Investment in associates	18		78,100		88,793		73,470		17,126
Other investment	19		1		1		1		—
Development expenditure	20		5,186,445		6,558,836		8,650,377		2,016,405
Intangible assets	21		138,889,238		164,407,675		114,231,863		26,627,475
Finance lease receivables	22		506,871		459,428		314,193		73,238
Deferred tax assets	23		203,300		1,293,913		1,119,083		260,859
Available-for-sale financial assets	24		—		806,627		—		—
Other receivables, deposits and prepaid expenses	27		—		1,081,930		1,066,330		248,562
Total non-current assets			155,911,135		188,240,502		137,180,791		31,976,876
Current assets
Inventories	25		23,692,531		23,842,415		29,783,693		6,942,586
Trade receivables	26		33,820,107		58,300,667		104,105,339		24,266,979
Other receivables, deposits and prepaid expenses	27		14,009,186		25,021,155		63,362,110		14,769,722
Amount due from associates	28		216,848		—		—		—
Amount due from other related parties	28		584,951		959,623		3,843,339		895,883
Finance lease receivables	22		65,506		99,240		145,234		33,854
Cash and bank balances	29		49,729,488		150,570,805		94,062,434		21,925,975
Restricted cash	29		4,832,435		34,392,659		43,560,522		10,153,968
Tax recoverable			56,175		—		1,714,572		399,667
Total current assets			127,007,227		293,186,564		340,577,243		79,388,634
Total assets			282,918,362		481,427,066		477,758,034		111,365,510

F-7

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2015 (CONTINUED)

	Note	2013		2014			2015			2015
		MYR		MYR			MYR			USD
				(Restated, see Note 48)
EQUITY AND LIABILITIES
Capital and reserves
Share capital	30		9,816,220		38,059,243			38,059,243			8,871,618
Treasury shares	30		—		(11,638,425	)		(22,056,637	)		(5,141,407	)
Reserves	31		24,624,647		244,129,715			192,651,582			44,907,127
Equity attributable to owners of the Company			34,440,867		270,550,533			208,654,188			48,637,338
Put option written on non-controlling interest	37		—		(32,944,082	)		(32,944,082	)		(7,679,273	)
Non-controlling interests			30,620,230		15,391,044			14,194,694			3,308,787
Total equity			65,061,097		252,997,495			189,904,800			44,266,852
Non-current liabilities
Borrowings	32		3,383,872		3,025,934			1,865,728			434,902
Financial liability on in-substance forward	37		—		37,300,351			26,402,457			6,154,419
Pension liabilities	38		94,636		602,920			1,480,869			345,191
Deferred tax liabilities	23		9,658,469		9,752,755			5,958,947			1,389,032
Total non-current liabilities			13,136,977		50,681,960			35,708,001			8,323,544
Current liabilities
Trade payables	34		48,009,555		82,342,742			124,576,775			29,038,877
Other payables and accrued expenses	35		22,291,606		30,311,041			72,724,621			16,952,126
Financial liability on in-substance forward	37		—		—			19,858,465			4,629,013
Derivative financial liability	36		26,164,107		—			—			—
Amount due to other related parties	28		30,747,913		602,486			1,175,153			273,928
Borrowings	32		69,630,994		52,708,110			15,923,778			3,711,836
Deferred revenue	40		6,296,993		11,122,133			15,710,692			3,662,166
Tax liabilities			1,579,120		661,099			2,175,749			507,168
Total current liabilities			204,720,288		177,747,611			252,145,233			58,775,114
Total liabilities			217,857,265		228,429,571			287,853,234			67,098,658
Total equity and liabilities			282,918,362		481,427,066			477,758,034			111,365,510

The accompanying notes form an integral part of the financial statements.

F-8

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015

	Non-distributable															Distributable
	Issued capital		Share premium		Treasury shares		Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve			Retained earnings		Equity attributable to owners of the Company			Non-controlling interests			Total equity
	MYR		MYR		MYR		MYR		MYR		MYR		MYR			MYR		MYR			MYR			MYR
As of January 1, 2013		9,816,220		2,954,189		—		—		—		—		148,395			12,026,610		24,945,414			14,815,486			39,760,900
Profit for the year		—		—		—		—		—		—		—			12,006,984		12,006,984			6,665,541			18,672,525
Other comprehensive (loss)/income for the year, net of tax		—		—		—		—		—		—		(2,622,975	)		111,444		(2,511,531	)		(1,290,903	)		(3,802,434	)
Total comprehensive (loss)/income for the year		—		—		—		—		—		—		(2,622,975	)		12,118,428		9,495,453			5,374,638			14,870,091
Incorporation of new subsidiaries		—		—		—		—		—		—		—			—		—			779,795			779,795

F-9

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable															Distributable
	Issued capital		Share premium		Treasury shares		Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve			Retained earnings		Equity attributable to owners of the Company		Non-controlling interests			Total equity
	MYR		MYR		MYR		MYR		MYR		MYR		MYR			MYR		MYR		MYR			MYR
Additional non-controlling interests arising on acquisition of subsidiaries (Note 43)		—		—		—		—		—		—		—			—		—		13,753,653			13,753,653
Dividends paid to non-controlling interests		—		—		—		—		—		—		—			—		—		(4,103,342	)		(4,103,342	)
As of December 31, 2013		9,816,220		2,954,189		—		—		—		—		(2,474,580	)		24,145,038		34,440,867		30,620,230			65,061,097

F-10

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																		Distributable
	Issued capital		Share premium		Treasury shares		Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve			Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company			Put option written on non- controlling interest		Non-controlling interests		Total equity
	MYR		MYR		MYR		MYR		MYR		MYR		MYR			MYR			MYR			MYR		MYR		MYR
As of January 1, 2014		9,816,220		2,954,189		—		—		—		—		(2,474,580	)		24,145,038			34,440,867			—		30,620,230		65,061,097
Loss for the year		—		—		—		—		—		—		—			(21,600,213	)		(21,600,213	)		—		3,694,268		(17,905,545	)
Other comprehensive income for the year, net of tax		—		—		—		—		—		15,258		10,681,785			1,935			10,698,978			—		15,701		10,714,679
Total comprehensive income/(loss) for the year		—		—		—		—		—		15,258		10,681,785			(21,598,278	)		(10,901,235	)		—		3,709,969		(7,191,266	)
Additional non-controlling interests arising on the acquisition of subsidiaries (Note 43)		—		—		—		—		—		—		—			—			—			—		8,781,543		8,781,543

F-11

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																Distributable
	Issued capital		Share premium			Treasury shares			Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company			Put option written on non- controlling interest		Non-controlling interests			Total equity
	MYR		MYR			MYR			MYR		MYR		MYR		MYR		MYR			MYR			MYR		MYR			MYR
Issuance of new shares through Initial Public Offering (Note 30)		24,573,354		282,593,564			—			—		—		—		—		—			307,166,918			—		—			307,166,918
Buy-back of shares		—		—			(11,638,425	)		—		—		—		—		—			(11,638,425	)		—		—			(11,638,425	)
Initial Public Offering related expenses		—		(25,170,755	)		—			—		—		—		—		—			(25,170,755	)		—		—			(25,170,755	)
Issuance of shares for the acquisition of non-controlling interests (Note 30)		3,463,513		42,705,293			—			—		—		—		—		(85,209,079	)		(39,040,273	)		—		(20,445,677	)		(59,485,950	)

F-12

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																Distributable
	Issued capital		Share premium		Treasury shares		Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)		Equity attributable to owners of the Company		Put option written on non- controlling interest		Non-controlling interests			Total equity
	MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR			MYR
Issuance of shares on redemption of promissory notes (Note 30)		206,156		2,541,959		—		—		—		—		—		—		2,748,115		—		—			2,748,115
Capital contribution recognized for share-based compensation payments		—		—		—		7,602,686		—		—		—		—		7,602,686		—		—			7,602,686
Recognition of share-based payments		—		—		—		—		8,131,420		—		—		—		8,131,420		—		—			8,131,420
Effect of restructuring of non-controlling shareholders		—		—		—		—		—		—		—		365,484		365,484		—		(365,484	)		—

F-13

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																		Distributable
	Issued capital		Share premium		Treasury shares			Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company			Put option written on non- controlling interest			Non- controlling interests			Total equity
	MYR		MYR		MYR			MYR		MYR		MYR		MYR		MYR			MYR			MYR			MYR			MYR
Disposal of a subsidiary (Note 44)		—		—		—			—		—		—		—		—			—			—			(440,802	)		(440,802	)
Capital contribution from non-controlling interests		—		—		—			—		—		—		—		—			—			—			914,308			914,308
Dividends paid to non-controlling interests		—		—		—			—		—		—		—		—			—			—			(7,383,043	)		(7,383,043	)
As of December 31, 2014 (as previously reported)		38,059,243		305,624,250		(11,638,425	)		7,602,686		8,131,420		15,258		8,207,205		(82,296,835	)		273,704,802			—			15,391,044			289,095,846
Prior year adjustments (Note 48)		—		—		—			—		—		—		—		(3,154,269	)		(3,154,269	)		(32,944,082	)		—			(36,098,351	)
As of December 31, 2014 (as restated)		38,059,243		305,624,250		(11,638,425	)		7,602,686		8,131,420		15,258		8,207,205		(85,451,104	)		270,550,533			(32,944,082	)		15,391,044			252,997,495

F-14

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																			Distributable
	Issued capital		Share premium		Treasury shares			Capital contribution reserve		Share options reserve		Investment revaluation reserve			Foreign currency translation reserve		Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company			Put option written on non- controlling interest			Non- controlling interests		Total equity
	MYR		MYR		MYR			MYR		MYR		MYR			MYR		MYR			MYR			MYR			MYR		MYR
As of January 1, 2015		38,059,243		305,624,250		(11,638,425	)		7,602,686		8,131,420		15,258			8,207,205		(85,451,104	)		270,550,533			(32,944,082	)		15,391,044		252,977,495
Loss for the year		—		—		—			—		—		—			—		(140,529,144	)		(140,529,144	)		—			1,647,372		(138,881,772	)
Other comprehensive (loss)/income for the year, net of tax		—		—		—			—		—		(15,258	)		3,186,965		136,055			3,307,762			—			1,579,281		4,887,043
Total comprehensive (loss)/income for the year		—		—		—			—		—		(15,258	)		3,186,965		(140,393,089	)		(137,221,382	)		—			3,226,653		(133,994,729	)
Non-controlling interests arising on group reorganization		—		—		—			—		—		—			—		—			—			—			3,376		3,376

F-15

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																		Distributable
	Issued capital		Share premium		Treasury shares			Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company			Put option written on non- controlling interest		Non- controlling interests			Total equity
	MYR		MYR		MYR			MYR		MYR		MYR		MYR		MYR			MYR			MYR		MYR			MYR
Effect of purchase price allocation (Note 43)		—		—		—			—		—		—		—		—			—			—		(115,289	)		(115,289	)
Change in ownership interest in subsidiaries that do not result in a loss of control		—		—		—			—		—		—		—		(75,181	)		(75,181	)		—		(659,819	)		(735,000	)
Buy-back of shares		—		—		(10,418,212	)		—		—		—		—		—			(10,418,212	)		—		—			(10,418,212	)

F-16

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																Distributable
	Issued capital		Share premium		Treasury shares		Capital contribution reserve		Share options reserve		Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)		Equity attributable to owners of the Company		Put option written on non- controlling interest		Non- controlling interests			Total equity
	MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR			MYR
Capital contribution recognized for share-based compensation payments		—		—		—		33,870,745		—		—		—		—		33,870,745		—		—			33,870,745
Recognition of share-based payments		—		—		—		—		51,947,685		—		—		—		51,947,685		—		—			51,947,685
Incorporation of a new subsidiary		—		—		—		—		—		—		—		—		—		—		48,384			48,384
Dividends paid to non-controlling interests		—		—		—		—		—		—		—		—		—		—		(3,699,655	)		(3,699,655	)

F-17

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Non-distributable																			Distributable
	Issued capital		Share premium		Treasury shares			Capital contribution reserve		Share options reserve			Investment revaluation reserve		Foreign currency translation reserve		Retained earnings/ (Accumulated losses)			Equity attributable to owners of the Company		Put option written on non- controlling interest			Non- controlling interests		Total equity
	MYR		MYR		MYR			MYR		MYR			MYR		MYR		MYR			MYR		MYR			MYR		MYR
Transfer to accumulated losses on cancellation of share options (Note 31)		—		—		—			—		(60,079,105	)		—		—		60,079,105			—		—			—		—
As of December 31, 2015		38,059,243		305,624,250		(22,056,637	)		41,473,431		—			—		11,394,170		(165,840,269	)		208,654,188		(32,944,082	)		14,194,694		189,904,800
	USD		USD		USD			USD		USD			USD		USD		USD			USD		USD			USD		USD
As of December 31, 2015		8,871,618		71,241,084		(5,141,407	)		9,667,466		—			—		2,655,983		(38,657,406	)		48,637,338		(7,679,273	)		3,308,787		44,266,852

The accompanying notes form an integral part of the financial statements.

F-18

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015

	Note	2013		2014			2015			2015
		MYR		MYR			MYR			USD
				(Restated, see Note 48)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before tax			19,828,166		(20,423,291	)		(136,446,733	)		(31,805,768	)
Adjustments for:
Share-based compensation expense			—		15,670,289			85,818,430			20,004,296
Impairment loss on:
Goodwill			—		—			36,856,928			8,591,359
Intangible assets			—		—			1,561,346			363,950
Trade and other receivables			553,327		1,263,062			1,336,773			311,602
Inventories			—		468,200			1,065,610			248,394
Depreciation and amortization expenses	9		20,555,751		24,363,145			28,033,750			6,534,674
Interest expense			5,086,045		5,987,252			2,201,386			513,144
Inventories written off			709,515		5,017			1,300,209			303,079
Intangible assets written off			70,520		58,077			747,623			174,271
Property, plant and equipment written off			77,419		7,951			247,585			57,712
Bad debts written off			13,671		196,424			61,694			14,381
Share of results of associates			13,259		104,489			15,323			3,572
Development expenditure written off			—		176,231			—			—
Bargain purchase gain			—		(17,964	)		—			—
Impairment loss no longer required:
Inventories			—		(41,945	)		—			—
Trade receivables			—		(93,110	)		—			—
Gain on disposal of a subsidiary			—		(87,437	)		—			—
Gain on disposal of an associate			—		(140,433	)		—			—
Gain on disposal of financial asset at fair value through profit or loss			—		—			(1,276	)		(297	)
(Forward)

F-19

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	2013			2014			2015			2015
	MYR			MYR			MYR			USD
				(Restated, see Note 48)
Net fair value gain on financial assets at fair value through profit or loss		—			—			(7,079	)		(1,650	)
Gain on disposal of available-for-sale financial assets		—			—			(18,812	)		(4,385	)
Loss/(Gain) on disposal of property, plant and equipment		697			(1,380	)		(23,253	)		(5,420	)
Gain on disposal of investment property		—			—			(139,092	)		(32,422	)
Waiver of other payables		—			—			(220,156	)		(51,318	)
Derivative fair value adjustment		3,039,980			(3,736,076	)		—			—
Unwinding of discount and change in estimates of gross obligations		—			3,154,269			8,960,571			2,088,711
Interest income		(800,794	)		(1,462,334	)		(2,164,444	)		(504,533	)
Unrealized (gain)/loss on foreign exchange		(390,959	)		3,405,931			(12,113,893	)		(2,823,751	)
		48,756,597			28,856,367			17,072,490			3,979,601
Movement in working capital:
(Increase)/Decrease in:
Finance lease receivables		(294,035	)		13,709			99,240			23,133
Inventories		1,254,881			(974,181	)		(8,307,097	)		(1,936,386	)
Trade receivables, other receivables, deposits and prepaid expenses		1,739,493			(22,852,324	)		(76,982,122	)		(17,944,551	)
Increase/(Decrease) in:
Trade payables, other payables and accrued expenses		11,580,413			26,509,875			75,851,766			17,681,065
Amount due to other related parties		27,584			263,520			(469,861	)		(109,525	)
Deferred revenue		512,983			1,708,562			4,588,559			1,069,594
Cash Generated From Operations		63,577,916			33,525,528			11,852,975			2,762,931

F-20

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

	Note	2013			2014			2015			2015
		MYR			MYR			MYR			USD
					(Restated, see Note 48)
Interest paid			(5,086,045	)		(5,987,252	)		(2,201,386	)		(513,144	)
Income tax refunded			—			—			183,928			42,874
Income tax paid			(4,520,901	)		(6,691,626	)		(5,304,318	)		(1,236,438	)
Net Cash From Operating Activities			53,970,970			20,846,650			4,531,199			1,056,223
CASH FLOWS USED IN INVESTING ACTIVITIES
Increase in restricted fixed deposits			(2,280,046	)		(29,560,224	)		(9,167,863	)		(2,137,031	)
Interest received			800,794			1,462,334			2,164,444			504,533
Purchase of property, plant and equipment			(3,260,636	)		(5,625,486	)		(3,535,509	)		(824,128	)
Proceeds from disposal of property, plant and equipment			88,787			4,236			56,736			13,225
Proceeds from disposal of intangible assets			74,496			—			—			—
Purchase of intangible assets			(9,075,227	)		(1,070,605	)		(7,374,043	)		(1,718,891	)
Development expenditure incurred			(2,511,331	)		(3,427,458	)		(4,498,919	)		(1,048,699	)
Proceeds from disposal of a subsidiary, net of cash disposed	44		—			346,229			—			—
Proceeds from disposal of investment property			—			—			2,500,000			582,751
Proceeds from disposal of available-for-sale financial assets			—			—			847,188			197,480
Proceeds from disposal of financial assets at fair value through profit or loss			—			—			1,653,635			385,463
Proceeds from sales of associate			—			285,539			—			—
Purchase of available-for-sale financial assets			—			(791,369	)		—			—

F-21

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

		2013			2014			2015			2015
	Note	MYR			MYR			MYR			USD
					(Restated, see Note 48)
Purchase of financial asset at fair value through profit or loss			—			—			(1,621,635	)		(378,004	)
Subscription of new shares in associate			—			(219,000	)		—			—
Acquisition of subsidiaries	43		(44,403,871	)		(20,943,750	)		—			—
Net Cash Used In Investing Activities			(60,567,034	)		(59,539,554	)		(18,975,966	)		(4,423,301	)
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
Proceeds from issuance of new shares			—			281,996,163			—			—
Payments for the acquisition of non-controlling interests			—			(81,914,053	)		—			—
Payments for treasury shares			—			(11,638,425	)		(10,418,212	)		(2,428,488	)
Repayments of finance lease payables			(1,211,750	)		(1,357,871	)		(1,158,862	)		(270,131	)
Proceeds from borrowings			17,313,195			34,000,000			38,000,000			8,857,809
Repayment of borrowings			—			(51,176,083	)		(76,969,102	)		(17,941,516	)
Increase/(decrease) of amount due to other related parties			15,280,823			(30,016,578	)		2,706,317			630,843
Dividends paid to non- controlling interests			(4,103,342	)		(7,413,043	)		(3,699,655	)		(862,390	)
Capital contribution from non-controlling interests			—			914,308			48,384			11,278
Net Cash From/(Used In) Financing Activities			27,278,926			133,394,418			(51,491,130	)		(12,002,595	)

F-22

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2015 (CONTINUED)

		2013			2014		2015			2015
		MYR			MYR		MYR			USD
					(Restated, see Note 48)
NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE YEAR			20,682,862			94,701,514		(65,935,897	)		(15,369,673	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR			32,086,291			49,729,488		150,570,805			43,081,775
EFFECT ON EXCHANGE RATE CHANGES			(3,039,665	)		6,139,803		9,427,526			(5,786,127	)
CASH AND CASH EQUIVALENTS AT END OF YEAR	39		49,729,488			150,570,805		94,062,434			21,925,975

Note: Purchase of property, plant and equipment is financed through:

	2013		2014		2015		2015
	MYR		MYR		MYR		USD
Cash		3,260,636		5,625,486		3,535,509		824,128
Finance lease		1,470,800		1,253,132		2,183,427		508,957
		4,731,436		6,878,618		5,718,936		1,333,085

Note: Acquisition of non-controlling interests is financed through:

	2013		2014		2015		2015
	MYR		MYR		MYR		USD
Cash		—		81,914,053		—		—
Issuance of shares (Note 30)		—		3,463,513		—		—
		—		85,377,566		—		—

The accompanying notes form an integral part of the financial statements.

F-23

MOL GLOBAL, INC.

(Incorporated in the Cayman Islands)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

MOL Global, Inc. (the “Company”) is an exempted company incorporated in the Cayman Islands with limited liability on February 20, 2014 for the purpose of holding interest in various affiliated companies including pre-existing entities under common control.

The principal activities of the Group and its subsidiaries are in the area of internet media, e-commerce utilizing internet-connected physical outlets as e-distribution and e-payment centres and the provision of e-Solution services.

There have been no significant changes in the nature of the principal activities of its subsidiaries during the year other than the incorporation of new subsidiaries and deregistration of a subsidiary as disclosed in Note 17.

The registered office of the Company is located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. In addition, the Company has local offices in Malaysia, Thailand, Northern Cyprus, Turkey, United Arab Emirates, the Philippines, Singapore, Vietnam, Indonesia, the United States, Australia, Taiwan and Brazil.

The principal place of business of the Company is located at Lot 7.03 & 8.03, Level 7&8, Berjaya Times Square, No.1 Jalan Imbi, 55100 Kuala Lumpur.

Reorganization

The Company is the parent of MOL AccessPortal Sdn. Bhd. (“MOLAP”) following the completion of the acquisition by the Company of 83,437,870 ordinary shares of Malaysian Ringgit Sen Ten each (MYR0.10) in MOLAP from MOL Ventures Pte. Ltd. (previously known as MOL Global Pte. Ltd.), representing eighty five per cent (85%) of the issued and paid-up capital of MOLAP on April 16, 2014. The consideration was satisfied by the Company by way of the allotment and issuance of 50,062,722 new ordinary shares of 1 United States Dollar (USD1) each in the Company to MOL Ventures Pte. Ltd.. The remaining 14,724,330 shares representing 15% equity interest of MOLAP were sold by MOL Ventures Pte. Ltd. to Sultan Ibrahim of the State of Johor (“Sultan Ibrahim”) in February 2014 and, accordingly, on May 8, 2014, Sultan Ibrahim’s 15% equity interest of MOLAP was swapped into 15% equity interest of the Company equivalent to a total of 8,834,598 new ordinary shares of 1 United States Dollar (USD1) each.

MOLAP is a holding company of various MOL subsidiaries worldwide (see Note 17). MOLAP and MOL Global, Inc. are under common control before and after the reorganization, therefore merger accounting was applied. Accordingly, the consolidated financial statements are presented as if the group structure under the reorganization has been in existence since the beginning of the periods presented.

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Initial Public Offering

On October 9, 2014, the Company has successfully launched its initial public offering of 13,500,000 American Depositary Shares (ADSs), and began trading on the NASDAQ Global Market. The ADSs, consisting of 7,485,030 ADSs, was offered by the Company and 6,014,970 ADSs was offered by certain selling shareholders to the public at USD12.50 (MYR40.6) per ADS. Each ADSs represented one ordinary share of the Company under the symbol “MOLG.”

2. Application of new and revised International Financial Reporting Standards (IFRSs)

New and revised IFRSs affecting amounts reported and/or disclosures in the financial statements

In the current year, the Group has applied a number of new and revised IFRSs and Amendments issued by the International Accounting Standards Board (“IASB”) that are mandatorily effective for an accounting period that begins on or after January 1, 2015 as follows:

Amendments to IAS 19	Employee Benefits - Defined Benefits Plans: Employee Contributions
Amendments to IFRSs	Annual Improvements 2010 - 2012 Cycle
Amendments to IFRSs	Annual Improvements 2011 - 2013 Cycle

The adoption of these new and revised IFRSs have not affected the amounts reported in the consolidated financial statements of the Group for the current year and prior period.

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Standards and Amendments in issue but not yet effective

At the date of authorisation for issue of these consolidated financial statements, the new and revised Standards and Amendments relevant to the Group which were in issue but not yet effective and not early adopted by the Group are as listed below:

IFRS 14	Regulatory Deferral Accounts 1
Amendments to IFRS 10 and IAS 28	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 5
Amendments to IFRS 10, IFRS 12 and IAS 28	Investing Entities: Applying the Consolidation Exception 1
Amendments to IFRS 11	Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations 1
Amendments to IAS 1	Disclosure Initiative 1
Amendments to IAS 16 and IAS 38	Property, Plant and Equipment and Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortization 1
Amendments to IAS 16 and IAS 41	Property, Plant and Equipment and Agriculture - Agriculture: Bearer Plants 1
Amendments to IFRSs	Annual improvements 2012 - 2014 Cycle 1
Amendments to IAS 7	Disclosure Initiative 2
Amendments to IAS 12	Recognition of Deferred Tax Assets for Unrealized Losses 2
IFRS 9	Financial Instruments (issued in 2014) 3
IFRS 15	Revenue from Contracts with Customers 3
IFRS 16	Leases 4
Amendments to IFRS 15	Clarifications to IFRS 15 3
Amendments to IFRSs	Annual Improvements 2012 - 2014 Cycle 1

¹  Effective for annual periods beginning on or after January 1, 2016

²  Effective for annual periods beginning on or after January 1, 2017

³  Effective for annual periods beginning on or after January 1, 2018

⁴  Effective for annual periods beginning on or after January 1, 2019

⁵  The effective date are to be determined

The Directors anticipate that the abovementioned Standards and Amendments will be adopted in the financial statements of the Group when they become effective and that the adoption of these Standards and Amendments will have no material impact on the financial statements of the Group except for the application of IFRS 9, 15 and 16 which may have impact on the consolidated financial statements as described below.

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IFRS 9 Financial Instruments

IFRS 9 issued in November 2009 introduced new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include a) impairment requirements for financial assets and b) limited amendments to the classification and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of IFRS 9:

• all recognized financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortized cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are generally measured at FVTOCI. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading) in other comprehensive income, with only dividend income generally recognized in profit or loss.

• with regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss.

• in relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognized.

• the new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.

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The Directors of the Group anticipate that the application of IFRS 9 in the future may have a material impact on amounts reported in respect of the Group’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 9 until the Group undertakes a detailed review.

IFRS 15 Revenue from Contracts with Customers

In May 2014, IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Subsequently, amendments to IFRS 15 was issued in April 2016 which provide clarifications on certain requirements of IFRS 15 and provide additional transitional relief upon implementing IFRS 15. IFRS 15 and the related amendments will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when it becomes effective. The core principle of IFRS 15 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

• Step 1: Identify the contract(s) with a customer.

• Step 2: Identify the performance obligations in the contract.

• Step 3: Determine the transaction price.

• Step 4: Allocate the transaction price to the performance obligations in the contract.

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligations.

Under IFRS 15, an entity recognizes revenue when (or as) a performance obligations is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligations is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.

The Directors of the Group anticipate that the application of IFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the Group’s consolidated financial statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 15 until the Group performs a detailed review.

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IFRS 16 Leases

IFRS 16 specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS17.

At lease commencement, a lessee will recognize a right-of-use asset and a lease liability. The right-of-use asset is treated similarly to other non-financial assets and depreciated accordingly and the liability accrues interest. The lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be readily determined, the lessees shall use their incremental borrowing rate.

The Directors of the Group anticipate that the application of IFRS 16 in the future may have a material impact on the amounts reported and disclosures made in the Group’s consolidated financial statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 16 until the Group performs a detailed review.

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3 SIGNIFICANT ACCOUNTING POLICIES

3.1 Statement of Compliance

The consolidated financial statements have been prepared in accordance with IFRS issued by the IASB.

3.2 Basis of Preparation

The consolidated financial statements of the Group have been prepared under the historical cost convention unless otherwise indicated in this summary of accounting policies. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transaction that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value-in-use in IAS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described in Note 45.

The principal accounting policies are set out below.

3.3 Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Group and entities controlled by the Group (its subsidiaries). Control is achieved when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

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When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.

The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

• potential voting rights held by the Company, other vote holders or other parties;

• rights arising from other contractual arrangements; and

• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. The interests of non-controlling shareholders that are present ownership interests and entitle their holders to a proportionate share of the Group’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets.

The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

F-31

Changes in the Group’s ownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interest in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognized in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39, when applicable, the cost on initial recognition of an investment in an associate.

3.4 Business Combinations

Acquisition of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognized in profit or loss as incurred.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (revised) are recognized at their fair value at the acquisition date, except that:

• deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits respectively;

• liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with IFRS 2 Share-based Payment; and

• assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

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If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains information about facts and circumstances that existed as of the acquisition date - and is subject to a maximum of one year.

When the Group acquires an interest in an entity which upon acquisition will be a non-wholly owned subsidiary, and as part of the acquisition, also enters into an in-substance forward with a written put option with the seller that permits the seller to put their remaining interest in the acquired entity to the Group, and a written call option with the seller that permits the Group to call the seller to sell their remaining interest in the acquired entity to the Group, at a specific price, a gross obligations is recognized at an amount equal to the present value of the amount that could be required to be paid to the counterparty. Changes in the measurement of the gross obligations due to the unwinding of the discount and change in estimates of gross obligations that the Group could be required to pay are recognized in profit or loss. The Group will reclassify the liability to equity if the put option expires unexercised.

3.4.1 Merger Accounting for Business Combinations Involving Entities Under Common Control

The consolidated financial statements incorporate the financial statements items of the combining entities or businesses in which the common control combination occurs as if they had been combined from the date when the combining entities or businesses first came under the common control of the controlling party.

The assets and liabilities of the combining entities or businesses are consolidated using the existing book values. No amount is recognized in respect of goodwill or excess of acquirer’s interest in the net fair value of acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of common control combination, to the extent of the continuation of the controlling party’s interest.

The consolidated statements of profit or loss and other comprehensive income include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under the common control, where this is a shorter period, regardless of the date of the common control combination.

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The comparative amounts in the consolidated financial statements are presented as if the entities or businesses had been combined at the end of the previous reporting period or when they first came under common control, whichever is shorter.

3.5 Goodwill

Goodwill arising in a business combination is recognized as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

3.6 Impairment of Goodwill

Goodwill is not amortized but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.

3.7 Investment in Associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

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The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

On acquisition of an investment in associate, any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss in the period in which the investment is acquired.

The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group’s investment in associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate, or when the investment is classified as held for sale. When the Group retains an interest in the former associate and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with IAS 39. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, the Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

F-35

When the Group reduces its ownership interest in an associate but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

3.8 Revenue Recognition

Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the Group and the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable.

(i) MOLPoints

The Group earns revenue through sale of MOLPoints. Revenue from MOLPoints is recognized upon the end-user’s redemption of the MOLPoints for the online purchase of goods. The Group does not refund redeemed MOLPoints as a matter of policy or practice. MOLPoints that have been sold but not yet redeemed at the reporting date are recognized as deferred revenue. MOLPoints that have been sold out but not deposited to a MOLPoints account and remain unredeemed for 5 years following the date of sale will expire and are then recognized as revenue in the year of expiration and are not refundable to end-users. MOLPoints purchased by end-users and deposited in MOLPoints accounts are refundable (i) when an end-users terminates a MOLPoints account; or (ii) in accordance with the Malaysian Unclaimed Moneys Act 1965 pursuant to which the balance in a MOLPoints account that has been dormant for a consecutive period of 7 years is transferred to the Malaysian Registrar of Unclaimed Moneys, in which case the end-user may request a refund from the Registrar of Unclaimed Moneys.

(ii) MOLReloads

The Group earns revenue from sale of prepaid mobile airtime which is recognized upon transfer of the significant risks and rewards of ownership of goods to the end users which occurs upon the sale of a mobile airline voucher to an end-user. Sold mobile airtime vouchers are not refundable as a matter of policy or practice.

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(iii) MOLPay

Revenue is based on commission and merchant fees. Commission fees are recognized when merchants’ transaction is completed. Merchant fees are recognized when a contract had been signed for the registration of a merchant in the payment system and the fee set forth in the contract becomes payable.

(iv) MMOG Asia

The Group provides web game services through its gaming portal MMOG Asia and generates revenue from selling virtual goods online, which are used by end users within online games. Game players are given access to MMOG.asia’s online games free of charge but are charged for digital goods sold during game play. The fees paid by the Group to game developers comprise (i) an upfront fee, which is payable upon entering into a license agreement with a game developer, recorded as intangible assets in the financial statements and amortized over the term of the exclusive license, which is typically between three and five years; and (ii) a continuous revenue share (or royalty), which is equal to a percentage of the total game point utilization and payable throughout the term of the license. The fees that the Group retain under the license are based on the amount of consideration generated from sales of in-game virtual goods above the royalty fee to which game developers are entitled.

MMOG.asia players purchase game points in exchange for MCoins. MCoins is a virtual currency operated by MMOG.asia to facilitate purchases of virtual goods in games operated on MMOG.asia’s platform. While MMOG.asia does not accept any currency other than MCoins in exchange for game points, MCoins can be purchased using MOLPoints or cash. MCoins are not refundable as a matter of policy or practice except in accordance with the Malaysian Unclaimed Moneys Act 1965 pursuant to which the balance in an MMOG.asia account that has been dormant for a consecutive period of seven years is transferred to the Malaysian Registrar of Unclaimed Moneys, in which case the end-user may request a refund from the Registrar of Unclaimed Moneys.

The revenue from the sale of virtual goods is deferred over the estimated consumption period of in-game virtual goods, which is typically within a short period of time after purchase of in-game credits. Sold virtual goods are not refundable after they have been consumed as a matter of policy or practice. For games which have not attained popularity and are discontinued, advance notice is given to players one month before discontinuation and top-up of game points related to the games is disallowed before discontinuation. To date, the Group has never been required to pay cash refunds to game players or game developers as a result of the discontinuation of a game, or for any other reason.

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The Group recognizes non-refundable upfront fee upon the performance of obligation to provide technical support during game installation and establishment of the server to host the game in connection with the sale of game distribution right. Subsequent to the completion of such services, the Group is not obliged to provide any technical support, and customer does not have any right of recourse in the event that developer fails to fulfill its obligations.

The Group determines whether it is acting as a principal or an agent by considering who is the primary obligor of its arrangements and on whether it has discretion in setting prices to its customers. The Group concluded that it is acting as an agent in all its revenue arrangements.

(v) Other income is recognized on the following basis:

• Marketing fee is recognized at the time advertisements have been displayed in the Group’s online game portal or related services e.g., distribution of free game credits to gamers have been performed.

• Interest income is recognized on an accrual basis by reference to the principal outstanding and at the effective interest rate applicable.

• Rental income is recognized on a straight-line basis over the term of the lease.

• Transaction fees received or receivable from the depository bank are recognized on an accrual basis in accordance with the substance of the relevant agreement provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

3.9 Leases

(i) Classification

A lease is recognized as a finance lease when it transfers substantially to the Group all the risks and rewards of ownership. All other leases are classified as operating leases.

(ii) Finance Leases - The Group as Lessee

Assets acquired by way of finance leases are stated at amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception date of the leases. The corresponding liability is included in the consolidated statements of financial position as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used.

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Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognized as an expense in profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

(iii) Finance Leases - The Group as Lessor

Leases in which substantially all of the risks and rewards of ownership are transferred to the lessee are classified as finance leases. Assets held pursuant to a finance lease are presented in the consolidated statements of financial position as receivable at an amount equal to the net investment in the lease. The recognition of finance income on the receivable is based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment in the finance lease.

The Group leases MOLReloads terminals with its pre-installed proprietary software to certain retail outlets for the distribution of prepaid airtime and electronic pins.

(iv) Operating Leases

Operating lease payments are recognized as an expense in profit or loss on a straight-line basis over the term of the relevant lease.

3.10 Foreign Currencies

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Malaysian Ringgit (“MYR”), which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

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Exchange differences are recognized in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are expressed in MYR using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. Any exchange differences on disposal of a subsidiary that includes a foreign operation that have previously been attributed to non-controlling interests are derecognized, but they are not reclassified to profit or loss.

In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognized in profit or loss. For all other partial disposals (i.e. of associates not involving a change of accounting basis), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate at the end of each reporting period. Exchange differences are recognized in other comprehensive income.

3.11 Employee Benefits

(i) Short-Term Employee Benefits

Wages, salaries, paid annual leave, bonuses and social contributions are recognized in the year in which the associated services are rendered by employees of the Group. Short-term accumulating compensated absences such as paid annual leave are recognized when services rendered by the employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognized when the absences occur.

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(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group pay fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognized as an expense in profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

Group’s foreign subsidiaries also make contributions to its country’s statutory pension schemes.

(iii) Defined Benefit Plans

Defined benefit plans are post-employment benefit plans other than defined contribution plans. It defines the benefits that the employee will receive at the time of retirement in which the Group makes contribution to meet the costs of benefits defined in the plan.

Payments to defined benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding interest), is reflected immediately in the consolidated statements of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements).

• Net interest expense or income.

• Remeasurement.

The Group presents the first two components of defined benefit costs in profit or loss in the line item employee expense. Curtailment gains and losses are accounted for as past service costs.

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The pension liability recognized in the consolidated statements of financial position represents the actual deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

(iv) Employee Share Options Scheme (“ESOS”)

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share based transactions are set out in Note 42.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share options reserve.

Management’s estimates of the fair value of share-based compensation awards involve highly complex and subjective estimates of the fair value of ordinary shares.

Cancellation of share-based compensation is accounted for as an acceleration of the vesting period and therefore any amount unrecognized would be recognized immediately in the profit or loss. Upon cancellation of the share-based compensation, the entire share options reserve would be transferred to retained earnings.

3.12 Income Taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

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(i) Current Tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the consolidated statements of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associate, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(iii) Current and Deferred Tax for the Period

Current and deferred tax are recognized as an expense or income in profit or loss, except when they relate to items that are recognized outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognized outside profit or loss. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

3.13 Property, Plant and Equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Repair and maintenance costs are recognized in profit or loss as incurred.

Freehold land is not depreciated. Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings	5%
Computer equipment and software	33%
Furniture, fittings and office equipment	10% - 20%
Renovation	20%
Motor vehicles	20%

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The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss.

Computer software for a computer-controlled machine tool that cannot operate without specific software (i.e. integral part of the related hardware) is classified as property, plant and equipment. When the software is not an integral part of the related hardware, such computer software is classified as intangible assets.

Capital work-in-progress is stated at cost. Cost comprises the direct expenditure incurred on the construction and commissioning of the capital assets. Capital work-in-progress is not depreciated until its completion and availability for commercial use.

3.14 Borrowing Costs

Borrowing costs are recognized in profit or loss in the period in which they are incurred.

3.15 Investment Property

Investment property, which is property held to earn rentals and/or for capital appreciation, is stated at cost less accumulated depreciation and provision for any impairment loss. The investment property is depreciated on a straight line basis to write off the cost over its estimated remaining useful life of 40 years.

Investment property is derecognized when either it has been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of investment property (calculated as the difference between the net disposal proceeds and the net carrying amount of the asset) are recognized in the profit or loss in the year in which they arise.

3.16 Development Expenditure

Development expenditure relates to costs incurred for the development of web applications, software products and programmes, which primarily comprises employee expenses for information technology personnel and creative personnel. These costs are capitalized as development assets to the extent that such expenditure meet the following criteria:

(i) the product or process is clearly defined and costs are separately identified and measured reliably;

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(ii) the technical feasibility of the product is demonstrated so that it will be available for use or sale;

(iii) the product or process will be sold or used in-house;

(iv) the assets will generate future economic benefits (e.g. a potential market exists for the product or its usefulness in case of internal use is demonstrated); and

(v) adequate technical, financial and other resources required for completion of the project are available.

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Amortization is provided upon commencement of the commercial use of the web application and software products to which they relate to on a straight-line basis over the period of their expected benefits, but not exceeding 5 years. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18.

3.17 Other Intangible Assets

Intangible assets, including computer software that are not an integral part of the related hardware, are stated at cost less accumulated amortization and impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 3.18. Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to such assets will flow to the Group and the costs of such assets can be measured reliably.

Amortization is provided for on a straight-line basis to write off the cost of intangible assets with a finite useful life to their residual value over the period of their expected benefits, at the following annual rates:

Software and copyright	33%
Electronic payment system	33%
Exclusive license and distribution rights of online games and reloads	20% - 33%
Intellectual property	14% - 20%
Trademark	33%

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Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

3.18 Impairment of Non-financial Assets Excluding Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

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Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

3.19 Inventories

Inventories comprise airtime prepaid electronic pins and online game pins acquired for resale and are stated at lower of cost and net realizable value. Cost is determined using the weighted average basis comprising direct costs of purchase. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

3.20 Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, when it is probable that the Group will be required to settle the obligation, and a reliable estimate of the amount can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.21 Treasury shares

Acquisition of treasury shares is recorded at cost and is shown as a deduction in the “Treasury shares” account under equity section of the statement of financial position. Upon reissuance of the treasury shares, the “Cost of treasury shares held” account is credited for the cost. The excess of proceeds from reissuance over the treasury stock cost is credited to treasury shares account. The excess of cost of treasury stock over the proceeds from reissuance is debited to treasury shares account but only to the extent of previously set-up treasury shares account for the same class of stock. Otherwise, this is debited to retained earnings.

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3.22 Financial Instruments

Financial instruments are recognized in the consolidated statements of financial position when, and only when, the Group becomes a party to the contractual provisions of the financial instruments.

Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, such financial assets are recognized and derecognized on trade date.

Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

(i) Financial Assets

Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” (FVTPL), “held-to-maturity” investment, “available-for-sale” (AFS) financial assets and “trade and other receivables”. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective interest method

The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognized on an effective interest basis for debt instruments.

Trade and other receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade and other receivables are measured at amortized cost using the effective interest method, less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

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AFS Financial Assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL. All AFS assets are measured at fair value at the end of the reporting period. Fair value is determined in the manner described in Note 45. Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognized in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.

Dividends on AFS equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognized in profit or loss are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income.

Impairment of Financial Assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organization.

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For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account.

Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

In respect of AFS equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income.

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Derecognition of Financial Assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

Financial Liabilities and Equity Instruments

Debt and equity instruments are classified as financial liabilities or as equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and equity instruments.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”.

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of Financial Liabilities

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expired.

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Derivative Financial Instruments

Derivatives are initially recognized at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

3.23 Statements of Cash Flows

The Group adopts the indirect method in the preparation of the statements of cash flows.

Cash and cash equivalents comprise cash and bank balances and other short-term, highly liquid investments that are readily convertible to cash with insignificant risk of changes in value, if any, are deducted.

3.24 Earnings/(Loss) Per Share

Basic earnings/(loss) per share is computed by dividing profit or loss attributable to owners of the Company by the weighted average number/number of ordinary shares outstanding during the year excluding treasury shares. Diluted earnings/(loss) per share is computed by dividing profit or loss attributable to owners of the Company by the weighted average number/number of ordinary shares and potential ordinary shares outstanding during the period for share options excluding treasury shares. Potential ordinary shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded.

3.25 Contingent Assets

A contingent asset is being disclosed when an inflow of economic benefit of an asset is probable where it arises from past events and where existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. When the inflow of economic benefit is virtually certain, the related asset is recognized.

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3.26 Contingent Liabilities

A contingent liability is a possible obligation that arises from past events where existence will be confirmed by the occurrence or non-occurrence of one of more uncertain future events beyond the control of the Group or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the extremely rare circumstance where there is a liability that cannot be recognized because it cannot be measured reliably.

3.27 Translation into United States dollars

The consolidated financial statements of the Group are stated in MYR. The translation of MYR amounts as of and for the year ended December 31, 2015 into USD is included solely for the convenience of readers and was made at the rate of MYR4.2900 to USD1.00, the noon buying rate in The City of New York for cable transfers of MYR as certified for customs purposes by the Federal Reserve Bank of New York on December 31, 2015. Such translations should not be construed as representation that MYR amounts could be converted, realized or settled into USD at the rate stated above or at any other rate.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in Note 3, the management are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

4.1 Critical Judgements in Applying the Group’s Accounting Policies

In the process of applying the Group’s accounting policies, the information about the critical judgements that have the most significant effect on the amounts recognized in the consolidated financial statements is discussed below. Further details of the nature of these judgements, estimates, and assumptions may be found in the relevant notes to the consolidated financial statements.

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Revenue recognition

In Note 3.8 to the financial statements, the Group recognizes non-refundable upfront fee upon the performance of obligation to provide technical support during game installation and establishment of the server to host the game in connection with the sale of game distribution right. Subsequent to the completion of such services, the Group is not obliged to provide any technical support, and customer does not have any right of recourse in the event that developer fails to fulfill its obligations.

In making their judgement, the management considered the detailed criteria for the recognition of revenue from the upfront fees set out in IAS 18 and, in particular, whether the Group had transferred to the customer the significant risks and rewards. Following the performance of obligation to provide the technical support, the management is satisfied that the significant risks and rewards have been transferred. There is no any subsequent obligation for a continuous support and customer does not have any right of recourse and hence, the recognition of the upfront fee in the current year is appropriate.

Purchase Price Allocation

As disclosed in Note 43, the Company completed the purchase price allocation exercise to determine the fair values assigned to the subsidiary’s identifiable assets and liabilities acquired in prior financial year pursuant to the requirement of IFRS 3: Business Combinations. Significant management judgement was involved in determining the fair value of these identifiable assets and liabilities based on acceptable valuation procedures and practices that rely on the use of numerous reasonable assumptions.

Control over MOL Holdings (Thailand) Co. Ltd. and MMOG Asia (Thailand) Co. Ltd.

As disclosed in Note 17, as of December 31, 2014 and 2015, MOL Holdings (Thailand) Co. Ltd. and MMOG Asia (Thailand) Co. Ltd. are the subsidiaries of the Group even though the Group has only 49% ownership interest and 49% voting rights of these entities.

The management of the Group assessed whether or not the Group has control over these entities based on whether the Group has the practical ability to direct the relevant activities of these entities unilaterally. In making their judgement, the management assessed that the Group has sufficient dominant voting interest to direct the relevant activities, and therefore the Group has control over MOL Holdings (Thailand) Co. Ltd. and MMOG Asia (Thailand) Co. Ltd.

4.2 Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities of the Group within the next financial year are discussed below.

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Impairment of Non-Financial Assets

Goodwill and Intangible Assets with Indefinite Useful Lives

The Group assesses whether there are any indicators of impairment of goodwill and intangible assets with indefinite useful lives at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist. When value in use calculations are undertaken, management estimates the expected future cash flows from the asset or cash generating unit (“CGU”) and chooses a suitable discount rate in order to calculate the present value of those cash flows.

The Group prepares cash flow forecasts for the next five years which is approved by management. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs and other ancillary expenses during the period. Management estimate discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the subsidiaries. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

While the Group believes that the assumptions are appropriate and reasonable, significant changes in the assumptions may materially affect the assessment or recoverable amounts and may lead to future impairment charges. The carrying amount of goodwill of the Group as at the reporting date is MYR70,276,161 (2014: MYR105,773,870; 2013: MYR 79,723,699). The carrying amount of intangible assets with indefinite useful lives as at the reporting date is MYR12,034,650 (2014: MYR12,034,650; 2013: MYR12,034,650). Further details are disclosed in Note 21.

Development Expenditure

Included in development expenditure are amounts capitalized for projects yet to be launched of MYR4,709,738 by the Group (2014: MYR3,659,272; 2013: MYR2,709,620) as disclosed in Note 20. In assessing indicators for impairment, the management has considered the cash-generating ability of the related projects, likelihood of commercial launch and the risk of technology obsolescence. When value in use calculations are undertaken, management must estimate the expected future cash flows from the project or cash generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. The preparation of the future cash flows involves significant judgement and estimations. While the Group believes that the assumptions used are appropriate and reasonable, significant changes in the assumptions may materially affect the assessment of recoverable amounts and may lead to future impairment charges.

Impairment of Intangible Assets with Finite Useful Lives

The Group regularly reviews whether there are any indications of impairment and will recognize an impairment loss if the carrying amount of an asset is lower than the recoverable amount which is the greater of its net selling price or its value in use. In determining the value in use, the Group assesses the present value of the estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Estimates and judgements are applied in determining the future cash flows and the discount rate.

F-56

Estimated Useful Lives of Intangible Assets with Finite Useful Lives

The Group reviews the estimated useful lives of its intangible assets with finite useful lives at the end of reporting period. During the current financial year, the management is of the opinion that there is no requirement to revise the estimated useful lives of these assets. Intangible assets with finite useful lives are amortized over their useful economic lives. The amount of estimated useful lives is a matter of judgement based on the experience of the Group, taking into account factors such as technological progress, changes in market demand and expected usage. Useful lives are reviewed for continued appropriateness at the end of each reporting period.

Income Tax

Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Deferred Tax Assets

Deferred tax assets are recognized for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the unused tax losses and unabsorbed capital allowances can be utilized. Significant judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

Fair Value Measurements and Valuation Processes

Some of the Group’s assets and liabilities are measured at fair value for financial reporting purposes. The Board of Directors, with input from management, determines the appropriateness of valuation techniques used and inputs for fair value measurements.

In estimating the fair value of an asset or liability, the Group uses market-observable data to the extent that it is available. Where such data is not available, the Group engages third party qualified valuers to perform the valuation. Management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs to the model used for fair value measurements. Management reports to the Board of Directors, at least on a quarterly basis, the cause of fluctuations in the fair value of the assets and liabilities impacting the financial statements.

F-57

5. REVENUE

	2013		2014		2015
	MYR		MYR		MYR
MOLPoints		102,533,871		129,998,638		170,333,239
MOLReloads		34,519,939		36,171,430		41,052,406
MOLPay		9,411,637		10,951,443		23,579,107
MMOG Asia		23,719,741		21,722,204		11,713,692
Others		1,333,115		3,869,455		1,801,017
		171,518,303		202,713,170		248,479,461

6. SEGMENT INFORMATION

The Group is organized into businesses based on its products and services. Information reported to the Chief Operating Decision Maker (CODM), who is the Group’s chief executive officer focuses on the following reportable segments:

a. MOLPoints, which includes revenue derived from sale of online currency called MOLPoints developed and operated by the Group which can be used to redeem products via online portal and the sale of equivalent game credits. Major products which can be redeemed through MOLPoints are game pins and airtime products electronic pins.

b. MOLReloads, which includes revenue derived from use of application that facilitates electronic distribution of prepaid airtime and PINs through a terminal-based infrastructure and external prepaid service providers.

c. MOLPay, which includes revenue derived from provision of an online payment solution that enables e-commerce merchants to collect payments from online buyers securely through physical and online payment channels.

d. MMOG Asia, which includes revenue derived from sale of virtual goods to customers who through game points can have access to play games in the gaming portal “MMOG Asia.com” and recognizes non-refundable upfront fee upon the performance of obligation to provide technical support during game installation and establishment of the server to host the game in connection with the sale of game distribution right. Subsequent to the completion of such services, the Group is not obliged to provide any technical support, and customer does not have any right of recourse in the event that developer fails to fulfil its obligations.

e. Others include revenue derived from sale of internet media products and other electronic related services.

F-58

The CODM monitors the operating results of the business units separately for the purpose of making decisions about resources allocation and performance assessment. The Group measures consistently the performance of its operating segments by monitoring: segment revenue, segment gross profit, segment profit from operations and segment profit.

Segment revenue by products reported above represents revenue generated from external customers.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 3.

For the purposes of monitoring segment performance and allocating resources between segments:

• Segment profit/(loss) from operations is allocated to reportable segments other than executive director’s remuneration, share-based compensation expense and legal fee incurred for consolidated class action lawsuit.

• Segment profit/(loss) represents profit/(loss) before tax.

• All assets are allocated to reportable segments other than amount due from associates and other related parties. Assets used jointly by reportable segments are allocated on the basis of the revenues earned by individual reportable segments.

• All liabilities are allocated to reportable segments other than amount due to other related parties.

• Capital expenditures consist of additions to property, plant and equipment, intangible assets and development expenditure.

F-59

The following is an analysis of the Group’s revenue and results by reportable segments:

December 31, 2013
	MOLPoints			MOLReloads			MOLPay			MMOG Asia			Others			Unallocated			Total
	MYR			MYR			MYR			MYR			MYR			MYR			MYR
Segment revenue		102,533,871			34,519,939			9,411,637			23,719,741			1,333,115			—			171,518,303
Direct cost and other ancillary expenses		(46,606,433	)		(16,304,084	)		(5,716,003	)		(1,204,625	)		(187,626	)		—			(70,018,771	)
Segment gross profit		55,927,438			18,215,855			3,695,634			22,515,116			1,145,489			—			101,499,532
Employee expenses		(19,905,919	)		(4,489,717	)		(2,321,333	)		(2,923,698	)		(293,438	)		(1,043,849	)(2)		(30,977,954	)
Depreciation and amortization expenses		(9,832,427	)		(1,133,752	)		(650,988	)		(8,910,815	)		(27,769	)		—			(20,555,751	)
Segment operating expenses		(15,474,303	)		(2,999,183	)		(1,222,441	)		(4,137,233	)		(693,684	)		—			(24,526,844	)
Segment profit/(loss) from operations		10,714,789			9,593,203			(499,128	)		6,543,370			130,598			(1,043,849	)		25,438,983
Other income		1,541,060			229,978			26,696			204,305			526,428			—			2,528,467
Non-operating expenses		—			—			—			—			—			(3,039,980	)		(3,039,980	)
Finance costs		(75,994	)		(4,883,308	)		—			(126,743	)		—			—			(5,086,045	)
Share of results of associates		(18,135	)		—			—			4,876			—			—			(13,259	)
Segment profit/(loss) (1)		12,161,720			4,939,873			(472,432	)		6,625,808			657,026			(4,083,829	)		19,828,166

⁽¹⁾  Segment profit/(loss) represents profit/(loss) before tax

⁽²⁾  Relates to directors’ remuneration

F-60

December 31, 2013
	MOLPoints		MOLReloads		MOLPay		MMOG Asia		Others		Unallocated		Total
	MYR		MYR		MYR		MYR		MYR		MYR		MYR
Segment assets		192,585,873		28,774,451		27,079,714		31,831,581		1,844,944		801,799		282,918,362
Segment liabilities		85,110,834		86,001,247		6,791,920		8,070,746		1,134,605		30,747,913		217,857,265
Other segment information
Capital expenditures		8,991,303		914,293		34,327		6,206,316		370,044		—		16,516,283

F-61

December 31, 2014
	MOLPoints			MOLReloads			MOLPay			MMOG Asia			Others			Unallocated			Total
	MYR			MYR			MYR			MYR			MYR			MYR			MYR
																(Restated, see Note 48)			(Restated, see Note 48)
Segment revenue		129,998,638			36,171,430			10,951,443			21,722,204	(2)		3,869,455			—			202,713,170
Direct cost and other ancillary expenses		(68,493,777	)		(19,187,872	)		(5,673,685	)		(714,080	)		(373,722	)		—			(94,443,136	)
Segment gross profit		61,504,861			16,983,558			5,277,758			21,008,124			3,495,733			—			108,270,034
Employee expenses		(22,501,205	)		(5,522,580	)		(3,928,995	)		(3,145,505	)		(315,842	)		(16,834,361	)(3)		(52,248,488	)
Depreciation and amortization expenses		(12,628,858	)		(1,279,079	)		(476,157	)		(9,737,273	)		(241,778	)		—			(24,363,145	)
Segment operating expenses		(19,591,118	)		(3,763,118	)		(1,560,424	)		(4,580,492	)		(4,863,346	)		(16,052,673	)(4)		(50,411,171	)
Segment profit/(loss) from operations		6,783,680			6,418,781			(687,818	)		3,544,854			(1,925,233	)		(32,887,034	)		(18,752,770	)
Other income		2,861,784			204,695			491,344			141,056			101			3,876,509	(5)		7,575,489
Finance costs		(2,390,752	)		(3,435,325	)		—			(144,537	)		(16,638	)		(3,154,269	)(6)		(9,141,521	)
Share of results of associates		8,577			—			—			—			—			(113,066	)		(104,489	)
Segment profit/(loss) (1)		7,263,289			3,188,151			(196,474	)		3,541,373			(1,941,770	)		(32,277,860	)		(20,423,291	)

F-62

⁽¹⁾  Segment profit/(loss) represents profit/(loss) before tax

⁽²⁾  Includes upfront fee of MYR5,000,000 recognized

⁽³⁾  Relates to share-based compensation expenses and directors’ remuneration

⁽⁴⁾  Relates to Initial Public Offering expenses

⁽⁵⁾  Relates to gain on disposal of associates and derivative fair value adjustment

⁽⁶⁾  Relates to unwinding of discount and change in estimates of gross obligations

December 31, 2014
	MOLPoints		MOLReloads		MOLPay		MMOG Asia		Others		Unallocated		Total
	MYR		MYR		MYR		MYR		MYR		MYR		MYR
											(Restated, see Note 48)		(Restated, see Note 48)
Segment assets		296,927,038		40,759,538		32,523,151		28,467,088		81,790,628		959,623		481,427,066
Segment liabilities (restated)		145,503,551		57,986,088		11,901,846		7,533,107		4,902,493		602,486		228,429,571
Other segment information
Capital expenditures		6,830,639		2,132,044		493,614		1,638,501		513,697		—		11,608,495

F-63

December 31, 2015
	MOLPoints			MOLReloads			MOLPay			MMOG Asia			Others			Unallocated			Total
	MYR			MYR			MYR			MYR			MYR			MYR			MYR
Segment revenue		170,333,239			41,052,406			23,579,107			11,713,692			1,801,017			—			248,479,461
Direct cost and other ancillary expenses		(101,624,246	)		(22,178,585	)		(15,541,600	)		(1,172,830	)		(463,854	)		—			(140,981,115	)
Segment gross profit		68,708,993			18,873,821			8,037,507			10,540,862			1,337,163			—			107,498,346
Employee expenses		(29,665,946	)		(7,617,314	)		(5,491,778	)		(3,201,630	)		(279,732	)		(88,879,778	)(2)		(135,136,178	)
Depreciation and amortization expenses		(15,759,701	)		(1,561,670	)		(289,856	)		(10,066,638	)		(355,885	)		—			(28,033,750	)
Segment operating expenses		(22,454,450	)		(6,691,774	)		(2,891,967	)		(6,186,401	)		(9,352,457	)		(2,542,920	)(3)		(50,119,969	)
Impairment of goodwill and intangible assets		(35,263,274	)		—			—			(3,155,000	)		—			—			(38,418,274	)
Other operating income		2,986,763			1,385,922			(39,995	)		110,412			2,511,728			—			6,954,830
Segment profit/(loss) from operations		(31,447,615	)		4,388,985			(676,089	)		(11,958,395	)		(6,139,183	)		(91,422,698	)		(137,254,995	)
Other income		6,891,074			3,177,975			345,690			939,672			631,131			—			11,985,542
Finance costs		(640,463	)		(1,478,224	)		(24,018	)		(46,190	)		(12,491	)		(8,960,571	)(4)		(11,161,957	)
Share of results of associates		(15,323	)		—			—			—			—			—			(15,323	)
Segment profit/(loss) (1)		(25,212,327	)		6,088,736			(354,417	)		(11,064,913	)		(5,520,543	)		(100,383,269	)		(136,446,733	)

F-64

⁽¹⁾  Segment profit/(loss) represents profit/(loss) before tax

⁽²⁾  Relates to cancellation of employee share options scheme and directors’ remuneration

⁽³⁾  Relates to legal fee incurred for consolidated class action lawsuit

⁽⁴⁾  Relates to unwinding of discount and change in estimates of gross obligations

December 31, 2015
	MOLPoints		MOLReloads		MOLPay		MMOG Asia		Others		Unallocated		Total
	MYR		MYR		MYR		MYR		MYR		MYR		MYR
Segment assets		332,713,181		46,899,116		40,586,253		9,067,671		44,648,474		3,843,339		477,758,034
Segment liabilities		193,754,512		28,943,660		17,325,336		3,035,347		43,619,226		1,175,153		287,853,234
Other segment information
Capital expenditures		12,708,741		2,434,734		486,989		1,800,546		371,708		—		17,802,718

F-65

Geographical Information

The Group operates in four principal geographical areas.

The following table sets out information about the geographical location of revenue from external customers and information about geographical location of its non-current assets, excluding investment in associates, other investment, finance lease receivables, deferred tax assets, and non-current receivables. The geographical location of customers is based on the location to which the goods are delivered and services are rendered by the Group.

	Revenue						Segment Non-Current Assets
	2013		2014		2015		2013		2014		2015
	MYR		MYR		MYR		MYR		MYR		MYR
Malaysia		79,458,289		88,137,675		83,328,385		50,454,794		44,345,100		37,119,009
Thailand		34,715,256		42,351,731		48,269,528		4,707,924		11,262,019		10,060,360
Philippines		19,858,990		15,127,528		13,382,641		7,330,706		7,981,126		7,119,255
Turkey		23,174,325		35,349,924		70,622,375		67,645,574		97,403,419		58,342,590
Others		14,311,443		21,746,312		32,876,532		24,983,865		24,324,773		21,966,500
		171,518,303		202,713,170		248,479,461		155,122,863		185,316,437		134,607,714

Information about major customers

Included in revenues arising from sales of airtime prepaid products (MOLReloads) and MOLPoints are revenues of approximately MYR47,528,576 (2014: MYR46,270,584; 2013: MYR40,878,319) which arose from sales to the Group’s largest customer/ distributor, 7-Eleven Malaysia Sdn. Bhd. which is a related party. No other single customers contributed 10% or more to the Group’s revenue for 2013, 2014 and 2015.

F-66

7. EMPLOYEE EXPENSES

	2013		2014		2015
	MYR		MYR		MYR
Wages, bonus and salaries		24,637,618		29,368,775		40,135,491
Social security costs		901,783		1,073,338		1,226,399
Defined contribution plans		1,875,411		2,044,420		3,072,541
Defined benefit plans (Note 38)		116,417		529,002		1,094,087
Share-based compensation expense (Note 42)		—		15,670,289		85,818,430
Other personnel related expenses		3,446,725		3,562,664		3,789,230
		30,977,954		52,248,488		135,136,178

Included in employee expenses of the Group are key management personnel remuneration amounting to MYR70,888,602 (2014: MYR21,459,030; 2013: MYR9,651,780) as further disclosed in Note 8.

8. KEY MANAGEMENT PERSONNEL REMUNERATION

The members of key management personnel of the Group comprise Directors and other key management personnel of the Group.

	2013		2014		2015
	MYR		MYR		MYR
Executive Directors:
Short-term benefits
Salaries and other emoluments		4,139,197		3,952,203		6,574,668
Fees		159,256		535,101		—
Estimated monetary value of benefits-in-kind		8,206		9,032		34,030
Post-employment benefits
Defined contribution plans		311,013		258,894		353,988
Share-based payments
Share-based compensation expense		—		5,455,626		31,963,621
		4,617,672		10,210,856		38,926,307
Non-executive Directors:
Short-term benefits
Salaries and other emoluments		—		—		167,161
Fees		25,673		140,033		1,765,784
Total Directors’ remuneration		4,643,345		10,350,889		40,859,252

F-67

8.1 Compensation of Key Management Personnel

	2013		2014		2015
	MYR		MYR		MYR
Other key management personnel:
Short-term benefits
Salaries and other emoluments		4,680,852		5,705,411		7,426,166
Estimated monetary value of benefits-in-kind		58,625		14,426		114,264
Post-employment benefits
Defined contribution plans		268,958		319,640		384,478
Share-based payments
Share-based compensation expense		—		5,068,664		22,104,442
Total other key management personnel remuneration		5,008,435		11,108,141		30,029,350
Total		9,651,780		21,459,030		70,888,602

Total Directors’ remuneration capitalized as development expenditure amounts to MYR167,531 (2014: MYR417,426; 2013: MYR28,050) as further disclosed in Note 20.

9. DEPRECIATION AND AMORTIZATION EXPENSES

	2013		2014		2015
	MYR		MYR		MYR
Depreciation of property, plant and equipment		3,155,623		4,443,328		5,071,804
Depreciation of investment property		26,306		26,305		6,576
Amortization of intangible assets		15,362,949		17,782,862		20,337,173
Amortization of development expenditure		2,010,873		2,110,650		2,618,197
		20,555,751		24,363,145		28,033,750

F-68

10. OTHER OPERATING INCOME AND OTHER INCOME

	2013		2014		2015
	MYR		MYR		MYR
Other operating income:
Gain on foreign exchange:
Unrealized		—		—		5,701,723
Realized		—		—		1,253,107
		—		—		6,954,830
Other income:
Unrealized gain on foreign exchange		—		—		6,412,170
Transaction fees received from depository		—		—		628,190
Interest income (Note 12)		800,794		1,462,334		2,164,444
Waiver of other payables		—		—		955,156
Sponsorship for event		—		—		305,688
Product listing fees from publishers		115,332		211,866		300,000
Gain on disposal of investment property		—		—		139,092
Rental income (Note 12)		135,600		169,270		79,216
Advertising income		27,018		855,547		31,576
Gain on disposal of property, plant and equipment		—		—		25,462
Gain on disposal of available-for sale financial assets		—		—		18,812
Net fair value gain on financial assets at fair value through profit or loss		—		—		7,079
Domain name		151,243		19,109		2,389
Gain on disposal of financial assets at fair value through profit or loss		—		—		1,276
Derivative fair value adjustment (Note 36)		—		3,736,076		—
Impairment loss no longer required on:
Inventories (Note 25)		—		41,945		—
Trade receivables (Note 26)		—		93,110		—
Gain on disposal of an associate		—		140,433		—

F-69

	2013		2014		2015
	MYR		MYR		MYR
Excess travelling expenses received from other related parties (Note 28.4)		264,611		—		—
Income from late penalty		289,966		—		—
Handling fees from affiliate (Note 28.4)		223,096		32,260		—
Handling fees from channels		64,519		123,524		—
Others		456,288		690,015		914,992
		2,528,467		7,575,489		11,985,542
		2,528,467		7,575,489		18,940,372

11. FINANCE COSTS

	2013		2014		2015
	MYR		MYR		MYR
			(Restated, see Note 48)
Interest on:
Revolving credit		4,742,304		4,740,904		1,388,425
Term loans		153,124		149,501		81,950
Finance lease facilities		190,617		161,097		163,419
Interest charged on advances from affiliate (Note 28.4)		—		907,738		52,795
Interest charged on trade payables		—		—		178,342
Unwinding of discount and change in estimates of gross obligations (Note 37)		—		3,154,269		8,960,571
Bank guarantee		—		28,012		336,455
		5,086,045		9,141,521		11,161,957

F-70

12. PROFIT/(LOSS) BEFORE TAX

Profit/(Loss) before tax has been arrived at after charging/(crediting):

	2013		2014			2015
	MYR		MYR			MYR
			(Restated, see Note 48)
Impairment loss on:
Goodwill (Note 21)		—		—			36,856,928
Intangible assets (Note 21)		—		—			1,561,346
Trade receivables (Note 26)		545,747		1,246,054			1,322,604
Inventories (Note 25)		—		468,200			1,065,610
Other receivables (Note 27)		7,580		17,008			14,169
Rental expenses		2,872,997		3,090,949			4,098,712
Auditors’ remuneration		765,560		8,316,315			3,248,302
Transaction fees received from depository		—		—			(628,190	)
Inventories written off		709,515		5,017			1,300,209
Intangible assets written off (Note 21)		70,520		58,077			747,623
Property, plant and equipment written off		77,419		7,951			247,585
Bad debts directly written off on trade and other receivables		13,671		196,424			61,694
Development expenditure written off		—		176,231			—
Bargain purchase gain (Note 43)		—		(17,964	)		—
Impairment loss no longer required:
Trade receivables (Note 26)		—		(93,110	)		—
Inventories (Note 25)		—		(41,945	)		—
Gain on disposal of a subsidiary (Note 44)		—		(87,437	)		—
Gain on disposal of an associate		—		(140,433	)		—
Gain on disposal of financial assets at fair value through profit or loss		—		—			(1,276	)
Net fair value gain on financial assets at fair value through profit or loss		—		—			(7,079	)
Gain on disposal of available-for-sales financial assets		—		—			(18,812	)

F-71

	2013			2014			2015
	MYR			MYR			MYR
				(Restated, see Note 48)
Loss/(Gain) on disposal of property, plant and equipment		697			(1,380	)		(23,253	)
Rental income		(135,600	)		(169,270	)		(79,216	)
Gain on disposal of investment property		—			—			(139,092	)
Realized loss/(gain) on foreign exchange		241,241			603,198			(1,253,106	)
Derivative fair value adjustment (Note 36)		3,039,980			(3,736,076	)		—
Unwinding of discount and change in estimates of gross obligations (Note 37)		—			3,154,269			8,960,571
Interest income		(800,794	)		(1,462,334	)		(2,164,444	)
Unrealised (gain)/loss on foreign exchange		(390,959	)		3,405,931			(12,113,893	)

13. INCOME TAX EXPENSE

	2013			2014			2015
	MYR			MYR			MYR
Estimated current tax payable:
Malaysia income tax:
Current year		1,403,126			541,040			119,648
(Over)/Underprovision in prior years		(541,686	)		98,014			(11,320	)
Foreign income tax:
Current year		3,269,285			4,759,995			5,335,718
Underprovision in prior years		—			—			20,333
		4,130,725			5,399,049			5,464,379
Deferred tax (Note 23):
Current year		(2,975,084	)		(4,762,126	)		(2,934,541	)
Overprovision in prior years		—			—			(94,799	)
		(2,975,084	)		(4,762,126	)		(3,029,340	)
Total tax expense		1,155,641			636,923			2,435,039

F-72

Income tax is calculated at the Malaysian statutory tax rate of 25% (2014: 25%; 2013: 25%) of the estimated taxable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

A reconciliation of income tax expense applicable to profit/(loss) before tax at the applicable statutory income tax rate to income tax expense at the effective income tax rate of the Group is as follows:

	2013			2014			2015
	MYR			MYR			MYR
				(Restated, see Note 48)
Profit/(Loss) before tax		19,828,166			(20,423,291	)		(136,446,733	)
Tax expense/(credit) at Malaysian statutory tax rate of 25% (2014 and 2013: 25%)		4,957,042			(5,105,823	)		(34,111,683	)
Tax effects of:
Expenses not deductible for tax purposes (1)		3,506,954			6,604,964			35,314,830
Income not subject to tax(2)		(5,439,339	)		(6,149,568	)		(9,493,869	)
Different tax rates in other jurisdictions		(2,207,867	)		4,609,596			9,259,072
Deferred tax assets not recognized		802,272			579,740			1,658,978
Deferred tax assets recognized		78,265			—			—
Utilization of deferred tax assets not previously recognized		—			—			(106,503	)
(Over)/Underprovision of tax payable in prior years		(541,686	)		98,014			9,013
Overprovision of deferred tax in prior years		—			—			(94,799	)
		1,155,641			636,923			2,435,039

⁽¹⁾  Included in expenses not deductible for tax payment mainly comprise amortization charges, impairment of goodwill and intangible assets and unwinding of discount and change in estimates of gross obligations that are not allowable for tax deduction.

⁽²⁾  Income not subject to tax is mainly derived from the non-trade unrealized foreign exchange gain and tax incentive granted as disclosed below.

F-73

As at December 31, 2015, the Group has tax-exempt profits available for distribution of approximately MYR57,529,540 (2014: MYR42,286,994; 2013: MYR15,881,490), subject to the agreement of the Inland Revenue Board of Malaysia.

Four of the subsidiaries have been granted the Multimedia Super Corridor Malaysia (“MSC Malaysia”) status by the Minister of Finance Malaysia and the Minister of International Trade and Industry Malaysia, and enjoy certain incentives, including “Pioneer Status”, which entitles the company to a five-year exemption from Malaysian income tax on income derived from MSC Malaysia-related activities, which is renewable for a second five-year term provided certain conditions are met. The subsidiaries will thereafter be subject to Malaysian income tax subsequent to the expiration of exemption period grant.

Additional income taxes that would have been payable without the tax exemption amounted to approximately MYR2,344,913 (2014: MYR4,108,446; 2013: MYR1,118,413). Without such exemption, the Group’s basic and diluted net profit per share would have been decreased by 4.0 sen (2014: 7.0 sen; 2013: 8.0 sen)

Under the laws of the respective jurisdictions, Thailand, Turkey and the Philippines, withholding tax of 10%, 15% and 30%, respectively, are imposed on dividends declared in respect of profits earned by the subsidiaries in these jurisdictions. Deferred taxation has not been provided for in the consolidated financial statements in respect of temporary differences attributable to accumulated profits of these subsidiaries amounting to MYR19,924,287 (2014: MYR31,838,439; 2013: MYR28,823,951) as the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future.

The Finance (No.2) Act 2014 gazetted on December 30, 2014 enacts the reduction of corporate income tax rate from 25% to 24% in Malaysia with effect from year of assessment 2016. Accordingly, the applicable tax rates to be used for the measurement of any applicable deferred tax will be the expected rates.

F-74

14. EARNINGS/(LOSS) PER SHARE

The earnings/(loss) and weighted average number of ordinary shares used in the calculation of basic and diluted earnings/(loss) per share are as follows:

	2013		2014			2015
	MYR		MYR			MYR
			(Restated, see Note 48)
Profit/(Loss) for the year attributable to owners of the Company		12,006,894		(24,754,482	)		(140,529,144	)
Weighted average number/number of ordinary shares - basic		58,897,320		61,220,379			65,491,303
Dilutive effect for share options*		—		947,796			—
Weighted average number/number of ordinary shares - diluted		58,897,320		62,168,175			65,491,303
Earnings/(Loss) per share, basic/diluted (sen)		20.39		(40.44	)		(214.58	)

For the purpose of calculating earnings per share, the 58,897,320 ordinary shares of the Company issued for the reorganisation (see Note 1), which is accounted for using merger accounting, are included in the calculation of the weighted average number of ordinary shares as if they are outstanding from the beginning of the period presented.

* The potential dilutive securities that were not included in the calculation of dilutive net earnings/(loss) per share in those periods where their inclusion would be anti-dilutive include share options of nil, 3,326,399 and nil, respectively, for the years ended December 31, 2013, 2014 and 2015, respectively.

F-75

15. PROPERTY, PLANT AND EQUIPMENT

2013	Freehold land MYR		Buildings MYR		Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Total MYR
Cost
As of January 1, 2013		117,293		1,405,954		12,883,922			2,896,529			1,075,637			1,029,569			19,408,904
Additions		—		—		3,553,524			483,942			303,583			390,387			4,731,436
Acquisition of subsidiaries (Note 43)		—		—		302,106			170,675			182,094			—			654,875
Disposals		—		—		(2,678	)		—			—			(99,427	)		(102,105	)
Write-offs		—		—		(2,722,424	)		(129,200	)		(60,240	)		—			(2,911,864	)
Effect of foreign currency translation		1,181		15,361		10,204			(24,515	)		(17,179	)		536			(14,412	)
As of December 31, 2013		118,474		1,421,315		14,024,654			3,397,431			1,483,895			1,321,065			21,766,834
Accumulated depreciation
As of January 1, 2013		—		244,086		8,987,635			1,963,931			723,509			573,516			12,492,677
Acquisition of subsidiaries (Note 43)		—		—		73,895			37,468			32,056			—			143,419
Charge for the year:
Recognized in profit or loss		—		65,790		2,235,240			378,792			264,847			210,954			3,155,623
Capitalized in development expenditure (Note 20)		—		—		198,289			—			—			—			198,289
		—		65,790		2,433,529			378,792			264,847			210,954			3,353,912

F-76

2013	Freehold land MYR		Buildings MYR		Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Total MYR
Disposals		—		—		(2,678	)		—			—			(9,943	)		(12,621	)
Write-off		—		—		(2,714,709	)		(81,584	)		(38,152	)		—			(2,834,445	)
Effect of foreign currency translation		—		852		(11,819	)		(6,791	)		(12,106	)		365			(29,499	)
As of December 31, 2013		—		310,728		8,765,853			2,291,816			970,154			774,892			13,113,443
Net carrying amount
As of December 31, 2013		118,474		1,110,587		5,258,801			1,105,615			513,741			546,173			8,653,391

F-77

2014	Freehold land MYR			Buildings MYR		Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Total MYR
Cost
As of January 1, 2014		118,474			1,421,315		14,024,654			3,397,431			1,483,895			1,321,065			21,766,834
Additions		—			537,442		5,127,210			328,615			542,312			343,039			6,878,618
Acquisition of subsidiaries (Note 43)		—			—		147,797			261,787			—			103,834			513,418
Disposals		—			—		(5,620	)		(1,500	)		—			—			(7,120	)
Disposal of a subsidiary		—			—		(42,291	)		(68,755	)		(29,041	)		(18,000	)		(158,087	)
Write-offs		—			—		(15,365	)		(635	)		—			(3,900	)		(19,900	)
Reclassifications		(124,322	)		226,329		328,114			(212,382	)		135,692			(23,731	)		329,700
Effect of foreign currency translation		5,848			70,154		37,329			73,022			3,773			22,595			212,721
As of December 31, 2014		—			2,255,240		19,601,828			3,777,583			2,136,631			1,744,902			29,516,184

F-78

2014	Freehold land MYR		Buildings MYR		Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Total MYR
Accumulated depreciation
As of January 1, 2014		—		310,728		8,765,853			2,291,816			970,154			774,892			13,113,443
Acquisition of subsidiaries (Note 43)		—		—		27,497			169,662			—			50,182			247,341
Charge for the year:
Recognized in profit or loss		—		90,375		3,532,428			341,813			241,317			237,395			4,443,328
Capitalized in development expenditure (Note 20)		—		—		231,814			—			—			—			231,814
		—		90,375		3,764,242			341,813			241,317			237,395			4,675,142
Disposals		—		—		(3,089	)		(1,175	)		—			—			(4,264	)
Disposal of a subsidiary		—		—		(21,688	)		(28,507	)		(11,584	)		(6,300	)		(68,079	)
Write-off		—		—		(7,740	)		(635	)		—			(3,900	)		(12,275	)
Reclassifications		—		74,302		299,188			(83,202	)		2,586			(24,512	)		268,362
Effect of foreign currency translation		—		16,639		28,784			55,696			(526	)		20,106			120,699
As of December 31, 2014		—		492,044		12,853,047			2,745,468			1,201,947			1,047,863			18,340,369
Net carrying amount
As of December 31, 2014		—		1,763,196		6,748,781			1,032,115			934,684			697,039			11,175,815

F-79

2015	Buildings MYR			Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Capital work- in- progress MYR		Total MYR
Cost
As of January 1, 2015		2,255,240			19,601,828			3,777,583			2,136,631			1,744,902			—		29,516,184
Additions		119,870			3,913,007			660,908			792,067			—			233,084		5,718,936
Disposals		—			(36,448	)		(26,602	)		(104,679	)		(160,153	)		—		(327,882	)
Write-offs		—			(1,784,582	)		(27,361	)		(431,344	)		—			—		(2,243,287	)
Transfer to intangible assets (Note 21)		—			(24,356	)		—			—			—			—		(24,356	)
Reclassifications		(271,309	)		271,309			37,548			(37,548	)		—			—		—
Effect of foreign currency translation		274,745			280,634			204,793			102,646			120,521			—		983,339
As of December 31, 2015		2,378,546			22,221,392			4,626,869			2,457,773			1,705,270			233,084		33,622,934

F-80

2015	Buildings MYR			Computer equipment and software MYR			Furniture, fittings and office equipment MYR			Renovation MYR			Motor vehicles MYR			Capital work- in- progress MYR		Total MYR
Accumulated depreciation
As of January 1, 2015		492,044			12,853,047			2,745,468			1,201,947			1,047,863			—		18,340,369
Charge for the year:
Recognized in profit or loss		110,553			3,988,372			434,253			287,609			251,017			—		5,071,804
Capitalized in development expenditure (Note 20)		—			210,819			—			—			—			—		210,819
		110,553			4,199,191			434,253			287,609			251,017			—		5,282,623
Disposals		—			(8,386	)		(25,543	)		(100,317	)		(160,153	)		—		(294,399	)
Transfer to intangible assets (Note 21)		—			(12,228	)		—			—			—			—		(12,228	)
Write-offs		—			(1,782,808	)		(20,653	)		(192,241	)		—			—		(1,995,702	)
Reclassifications		(103,092	)		94,956			8,136			—			—			—		—
Effect of foreign currency translation		64,628			210,491			150,240			91,109			60,329			—		576,797
As of December 31, 2015		564,133			15,554,263			3,291,901			1,288,107			1,199,056			—		21,897,460
Net carrying amount
As of December 31, 2015		1,814,413			6,667,129			1,334,968			1,169,666			506,214			233,084		11,725,474

F-81

During the year, the Group acquired property, plant and equipment with an aggregate cost of MYR2,183,427 (2014: MYR1,253,132; 2013: MYR1,470,800) by means of finance lease.

Included in property, plant and equipment of the Group are computer equipment and software with net carrying amount of MYR2,419,399 (2014: MYR1,989,514; 2013: MYR1,681,038) and motor vehicles with a net carrying amount of MYR172,453 (2014: MYR333,203; 2013: MYR494,955) held under finance lease arrangements.

As at December 31, 2015, buildings of the Group with net carrying amount of MYRNil (2014: MYR1,763,196; 2013: MYR1,299,061) have been charged as security for the term loan as disclosed in Note 32.

16. INVESTMENT PROPERTY

	2013 MYR			2014 MYR			2015 MYR
Cost
As of January 1		2,452,799			2,452,799			2,452,799
Disposal		—			—			(2,452,799	)
As of December 31		2,452,799			2,452,799			—
Accumulated depreciation
As of January 1		(32,704	)		(59,010	)		(85,315	)
Charge for the year		(26,306	)		(26,305	)		(6,576	)
Disposal		—			—			91,891
As of December 31		(59,010	)		(85,315	)		—
Net carrying amount		2,393,789			2,367,484			—
	2013 MYR			2014 MYR			2015 MYR
Investment property, at fair value		2,500,000			2,500,000			—

Investment property comprised a 4-storey terrace shop house situated in Bandar Sri Permaisuri, Kuala Lumpur for the purpose of rental income and capital appreciation.

The fair value was determined based on the market comparable approach that reflects recent transaction prices for similar properties. In estimating the fair value of the properties, the highest and best use of the properties was their current use. The fair value was categorized as Level 3 of the fair value hierarchy with no transfer between Levels 1 and 2 during the year.

F-82

The property rental income earned by the Group from its investment property, which was leased out under operating leases, amounted to MYR33,400 (2014: MYR124,500; 2013: MYR135,600). Direct operating expenses arising on the investment property amounted to MYR4,484 (2014: MYR6,750; 2013: MYR5,400).

On January 8, 2015, the investment property has been sold for a total sales consideration of MYR2,500,000. On February 27, 2015, a portion of the proceeds for the sales was used to settle the remaining unpaid principal, accrued interest and prepayment charges of the term loan obtained from a local commercial bank in Malaysia amounting to MYR1,696,325.

17. INVESTMENT IN SUBSIDIARIES

2015

(a) Increase of equity interest in existing subsidiaries

During the current financial year, the Group increased the equity interest of its subsidiaries as follows:

(i) On March 11, 2015, MyCNX Holdings (M) Sdn. Bhd. (“MyCNX”), a company which is 100.00% owned by the Group, acquired the remaining 49.00% equity interest in Taiko Galaxy Sdn. Bhd. of 735,000 share capital for a nil consideration.

(ii) On October 14, 2015, MOL Payment Co. Ltd., a company which is 99.996% owned by MOL AccessPortal Co. Ltd. (“MOL Thailand”) increased its paid-up capital to THB2,000,000 divided into 2,000,000 shares of THB100. MOL Thailand had further acquired 1,950,000 shares with par value of THB100 for a total consideration of THB195,000,000 (MYR23,263,500), out of which THB48,750,000 (MYR5,815,875) has been paid and the remaining of the THB146,250,000 (MYR17,447,625) has subsequently been paid after year end, which is February 5, 2016. The direct equity interest increased to 99.999%.

(b) Additional investment in existing subsidiaries

(i) On January 19, 2015, Nganluong Joint Stock Company (“Nganluong”), a subsidiary of MOL AccessPortal Sdn. Bhd. (“MOLAP”) increased its paid-up capital to VND52,737,500,000 divided into 5,273,750 shares of VND10,000. MOLAP acquired further 2,596,875 shares with par value of VND10,000 for a total of VND25,968,750,000 (MYR4,934,063). The effective equity interest remain unchanged at 50.00%.

F-83

(ii) On May 25, 2015, Klon Odeme ve lletisim Teknolojileri Anonim Şirketi (“PaybyMe”), a subsidiary of MOLAP increased its paid-up capital to TRY2,000,000 divided into 20,000 shares of TRY100. MOLAP has invested 9,945 shares with par value of TRY100 for a total amount of TRY994,500 (MYR1,462,711). The effective equity interest remain unchanged at 51.00%.

(iii) On June 16, 2015, Rixty Brasil Intermediação e Agenciamento de Negócios Ltda, a wholly owned subsidiary of Rixty, Inc increased its paid-up capital to BRL229,907 divided into 229,907 shares of BRL1.00. Rixty, Inc acquired further 228,907 shares with par value of BRL1.00 for a total amount of BRL228,907 (MYR248,327). The effective equity interest remain unchanged at 100.00%.

(c) Establishment of New Subsidiaries

The newly established subsidiaries are as follows:

(i) Incorporation of MOL Paying Co. Ltd. (“MOL Paying”)

On February 20, 2015, MOL Thailand, a company which is 86.73% owned by the Group, incorporated a 59.98% owned subsidiary in Thailand under the name of MOL Paying with an issued and paid-up ordinary share capital of THB1,000,000 (MYR119,300) comprising 10,000 shares of THB100 each.

(ii) Incorporation of PaybyMe FZ-LLC

On October 13, 2015, PaybyMe, a company which is 51.00% owned by the Group, incorporated a 90.00% owned subsidiary in United Arab Emirates under the name of PaybyMe FZ-LLC. MOLAP also directly owns 5.00% equity interest of the company. PaybyMe FZ-LLC is incorporated with an issued and paid-up ordinary share capital of AED60,000 (MYR70,173) comprising 60 shares of AED1,000 each.

(d) Reorganization

(i) Reorganization of Sept 3 Technology Sdn. Bhd.

On August 31, 2015, MOL Thailand entered into a Share Sales Agreement with MOLAP to sell the shares of Sept 3 Technology Sdn. Bhd. to MOLAP for a total consideration of MYR1.00.

(e) Deregistration of a subsidiary

(i) Deregistration of MOL AccessPortal Pvt. Ltd.

On August 17, 2015, MOL AccessPortal Pvt. Ltd (“MOL India”), a company which is 100.00% owned by the Group, has been deregistered pursuant to sub section (5) of section 560 of the Companies Act, 1956.

F-84

2014

(a) Increase of equity interest in existing subsidiaries

(i) On May 6, 2014, the Group entered into a Share Sale and Purchase agreement with non-controlling shareholders to acquire the remaining equity interest of 30.00% in each of MOL Turkey Bilgi Sistemleri Yayıncılık Gıda ve Tekstil San. Tic. A.Ş. (“MOL Turkey”) and Sihirli Kule Bilgi Sistemleri Ltd. (“GameSultan”) for a total purchase consideration of USD14,750,000 (equivalent to MYR48,188,250).

(ii) On May 30, 2014, the Group entered into a Share Purchase Agreement with non-controlling shareholders to acquire the remaining equity interest of 20.005% in MyCNX Holdings (M) Sdn. Bhd. (“MyCNX”) in exchange for 513,468 ordinary shares (USD13.33 per share) of the Company and cash consideration of MYR9,970,756. The Group also further acquired additional indirect equity interest in its subsidiaries of MyCNX through the acquisition in MyCNX.

(iii) The Group previously owned 49.00% equity interest of MOL AccessPortal Co. Ltd. (“MOL Thailand”) directly. On June 5, 2014, the Group further entered into a Share Purchase Agreement with non-controlling shareholders to acquire an indirect 37.73% equity interest in MOL Thailand through the acquisition of a 49.00% equity interest in each of MOL Group (Thailand) Co. Ltd. (“MOL Group”) and MOL Holdings (Thailand) Co. Ltd. (“MOL Holdings”) in exchange for a total of 543,268 ordinary shares (USD13.33 per share) of the Company and cash consideration of MYR23,755,047 (THB240,435,698).

(iv) The Group previously owned 75.01% equity interest of MOL AccessPortal Co Ltd (“MOL Taiwan”), which is incorporated in Taiwan. As mentioned in (iii), the Group further acquired an indirect 18.49% equity interest in MOL Taiwan through the acquisition of a 49.00% equity interest in each of MOL Group and MOL Holdings.

(b) Acquisition of subsidiaries

The following subsidiaries were acquired in 2014:

(i) Acquisition of Klon Odeme ve lletisim Teknolojileri Anonim Şirketi (“PaybyMe”)

On July 15, 2014, the Group entered into a Share Sale and Purchase Agreement with certain individuals to acquire 255 shares of Turkish Lira (TL) 100 each, representing 51.00% equity interest in PaybyMe for a total purchase consideration of TL19,684,800 (equivalent to MYR29,080,121). The acquisition was completed on September 15, 2014.

F-85

In accordance with the Shareholders Agreement, the Group shall be entitled to, but shall not be obligated to, exercise a right (“call option right”) to acquire the remaining 49% equity interest in PaybyMe, and the non-controlling shareholders of PaybyMe shall be entitled to, but shall not be obligated to, exercise a right (“put option right”) to require the Company to purchase the remaining 49% equity interest in PaybyMe. The call and put option is exercisable in two periods, first exercise period is during the period from April 1, 2016 to April 30, 2016 and second exercise period is during the period from April 1, 2017 to April 30, 2017, each of which is to acquire the 24.5% equity interest in PaybyMe. The option price for the first exercise period shall equal to the amount of 24.5% of shares to be acquired by the Group subject to the option right at earnings multiple of PaybyMe for the financial year ended December 31, 2015 plus Mandatory Capital Loan plus Deferred Conditional Purchase Price and the exercise price for the second exercise period shall equal to the amount of 24.5% of shares to be acquired by the Group subject to the option right at earnings multiple of PaybyMe for the financial year ending December 31, 2016 plus Mandatory Capital Loan.

(ii) Acquisition of e-Innovations Systems & Networks Thai Company Limited, 3Sept Corporations Co. Ltd. and Sept 3 Technology Sdn. Bhd. (“collectively referred to herein as Easy2Pay”)

On April 4, 2014, MOL AccessPortal Co. Ltd. (“MOL Thailand”), a company which is 86.73% owned by the Group, entered into a Share Purchase Agreement to acquire 60.00% equity interest in Easy2Pay for a total purchase consideration of THB61,082,560 (equivalent to MYR6,046,178). The acquisition was completed on May 6, 2014.

Pursuant to the same agreement, which is subject to customary closing conditions, the Group agreed to purchase a further 20.00% in November 2015 and the remaining 20.00% in May 2017. The purchase consideration for each remaining tranche is based on the financial performance of the companies during a specified period prior to the relevant closing.

(iii) Acquisition of MOL Wallet Sdn. Bhd. (“MOL Wallet”)

On March 28, 2014, MOLPay Sdn. Bhd., a company which is 51.00% owned by the Group, acquired 100.00% equity interest in MOL Wallet for a total purchase consideration of MYR2. The acquisition was completed on April 28, 2014.

F-86

(iv) Acquisition of Pintura Odeme ve lletisim Teknolojileri Anonim Şirketi (“Pintura”)

On September 14, 2014, MOL Turkey, a company which is wholly-owned by the Group, entered into Share Sale and Purchase Agreement with certain individuals to acquire 255 shares of Turkish Lira (TL) 100 each, representing 51.00% equity interest in Pintura for a total purchase consideration of TL25,500 (equivalent to MYR36,637). The acquisition was completed on September 15, 2014.

(c) Establishment of New Subsidiaries

The newly established subsidiary is as follows:

(i) Incorporation of MOL Payment Co. Ltd. (“MOL Payment”)

On October 6, 2014, MOL AccessPortal Co. Ltd., a company which is 86.73% owned by the Group, incorporated a 99.99% owned subsidiary in Thailand under the name of MOL Payment with an issued and paid-up ordinary share capital of THB 5,000,000, comprising 50,000 shares of THB100 each. The subsidiary is dormant as of December 31, 2014.

2013

(i) Acquisition of MOL Turkey Bilgi Sistemleri Yayıncılık Gıda ve Tekstil San. Tic. A.Ş. (formerly known as Sihirli Kule Bilgi Sistemleri Yayıncılık Gıda ve Tekstil San. Tic. A.Ş.) (“MOL Turkey”) and Sihirli Kule Bilgi Sistemleri Ltd. (“GameSultan”)

On December 4, 2012, MOLAP, a wholly owned subsidiary of the Company, entered into a Share Sale and Purchase Agreement with certain individuals to acquire 3,502 shares of Turkish Lira (TL) 10 each, representing 70.00% equity interest in MOL Turkey and 1,680 shares of Euro Dollar (Euro) 10 each, representing 70.00% in GameSultan, for a total cash purchase consideration of USD13.5 million (equivalent to MYR41,894,437).

The registration of MOLAP ownership of 3,502 shares of TL10 each and 1,680 shares of Euro10 each, representing 70.00% equity interest in MOL Turkey and 70.00% equity interest in GameSultan, respectively, was completed with the Companies House and Official Registry on February 7, 2013.

The acquisition of 70.00% equity interest in both companies was completed on February 19, 2013.

F-87

Call options and put options were granted to both MOLAP and the individual shareholders, respectively, for MOLAP to subscribe up to 30.00% of the equity of both MOL Turkey and GameSultan. 15.00% of the options shall be exercised at any time during the period commencing from April 1, 2014 and ending June 30, 2014 and the remaining 15.00% of the options shall be exercised during the period commencing November 1, 2015 and ending on January 31, 2016. At the date of acquisition, the put options were valued to be MYR23,124,127. Subsequently, fair value of the put options as of December 31, 2013 increased to MYR26,164,107 with a loss recognized in profit or loss amounting to MYR3,039,980. The fair value of the call options was estimated to negligible.

(ii) Acquisition of Nganluong Joint Stock Company (“Nganluong”)

On December 21, 2012, MOLAP entered into a Share Purchase and Subscription Agreement to invest a total of 50.00% equity interest in Nganluong Joint Stock Company (“Nganluong”) for a total purchase consideration of Vietnamese Dong (VND) 104,275,000,000 (equivalent to MYR15,641,250) by way of:

1. acquisition of 20,000 existing ordinary shares of VND10,000 each in Nganluong from the existing shareholder, PeaceSoft Solutions Joint Stock Company, for a cash consideration of VND52,137,500,000 (equivalent to MYR7,820,625); and

2. subscription of 20,000 new ordinary shares of VND10,000 each in Nganluong for a cash consideration of VND52,137,500,000 (equivalent to MYR7,820,625).

The acquisition was completed on March 1, 2013. With effect from the date of acquisition, MOLAP consolidates its investment in Nganluong upon having the control of the subsidiary in which MOLAP is able to govern the financial and operating policies of Nganluong.

F-88

(iii) Acquisition of MOLCube Sdn. Bhd. (“MOLC”)

On March 20, 2013, MOLAP entered into a Share Purchase and Subscription Agreement to invest in 70,000 shares RM1 each, which represents 70.00% equity interest in MOLC for a total purchase consideration of MYR70,000.

On the same date, MOLPay Sdn. Bhd., a company which is 51.00% owned by MOLAP, purchased 30,000 shares RM1 each, which represents 30.00% equity interest in MOLCube Sdn. Bhd. for a total purchase consideration of MYR30,000.

The acquisition was completed on April 1, 2013. MOLAP total effective interest in MOLC amounted to 85.30%.

The Group aspires to be Asia’s leading e-payment provider and is continually looking for opportunities to expand its distribution and commerce network. The said acquisitions were in line with the Group’s business expansion plan and were undertaken with the objective to enable the Group to expand its distribution and commerce network in Asia.

F-89

Details of the Group’s subsidiaries as at the end of the reporting period are as follows:

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
MOL AccessPortal Sdn. Bhd.	Internet media, e-commerce utilizing internet-connected physical outlets as e-distribution and e-payment centers and provision of e-Solution services	Malaysia		100	%		100	%		100	%
MOL SocialPayments Sdn. Bhd.	Social network payment aggregator	Malaysia		100	%		100	%		100	%
MOL Online Sdn. Bhd.	Internet related services	Malaysia		100	%		100	%		100	%
GamesHive Sdn. Bhd.	Dormant	Malaysia		100	%		100	%		100	%
MOL ManagedServices Sdn. Bhd.	Providing services related to electronic payment and collection	Malaysia		100	%		100	%		100	%
MOLPay Sdn. Bhd.	Establish, maintain and operate a payment, clearing and settlement system and other computer related activities	Malaysia		51	%		51	%		51	%

F-90

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
MOL Loyalty Sdn. Bhd.	Information technology, electronic payments, online business services, electronic retail, electronic commerce online distribution, and other computer related activities	Malaysia		75	%		75	%		75	%
MyCNX Holdings (M) Sdn. Bhd.	Supply of computer games, software and hardware related to information technology	Malaysia		79.995	%		100	%		100	%
Game Box (M) Sdn. Bhd.	Wholesale and distribution of computer softwares and computer games	Malaysia		51.20	%		—			—
MOLCube Sdn. Bhd.	Providing mobile payment platform that enables small and medium-sized business to accept credit and debit cards payments using mobile devices	Malaysia		85.30	%		85.30	%		85.30	%
MOL AccessPortal Pte. Ltd.	Internet access providers (including ISPS) and web search portals	Singapore		100	%		100	%		100	%
MOL AccessPortal Pvt. Ltd.	Facilitate the offering of online payment services	India		100	%		100	%		—

F-91

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
PT MOL AccessPortal	Distribution of electronic games vouchers	Indonesia		100	%		100	%		100	%
MOL AccessPortal Pty Ltd	Internet media, e-commerce utilizing internet connected physical outlet as e-distribution and e-payment centers and the provision or e-solution services	Australia		65	%		65	%		65	%
MOL AccessPortal Inc	Operating e-payment systems, provide information technology services, e-solution services, online transaction processing, and other computer related activities	Philippines		100	%		100	%		100	%
MOL Holdings (Thailand) Co. Ltd.	Investing in other businesses, both local and overseas entities	Thailand		—			49	%(3)		49	%(3)
MOL Group (Thailand) Co. Ltd.	Investing in other businesses, both local and overseas entities	Thailand		—			73.99	%		73.99	%
MOL AccessPortal Co Ltd	Sales of electronic pins for online games and other related products	Thailand		49	%(1)		86.73	%		86.73	%

F-92

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
Rixty, Inc	Providing alternative payment system to domestic and international users to spend cash and coins for online games, virtual goods and digital content	United States		54.20	%		54.20	%		54.20	%
MOL Turkey Bilgi Sistemleri Yayıncılık Gıda ve Tekstil San. Tic. A.Ş.	Providing e-payment systems and providing information technology services	Republic of Turkey		70	%		100	%		100	%
Sihirli Kule Bilgi Sistemleri Ltd.	Providing mobile payment services	Turkish Republic of Northern Cyprus		70	%		100	%		100	%
Klon Odeme ve Iletisim Teknolojileri Annim Sirketi.	Providing mobile payment services, m-payments solutions, online gaming and social networks	Republic of Turkey		—			51	%		51	%
Nganluong Joint Stock Company	Operating online payment and escrow platform providers for domestic and cross-border e-commerce	Vietnam		50	%		50	%		50	%

F-93

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
MOL AccessPortal Co Ltd	Provision of electronic voucher distribution in Taiwan and acting as an importer, exporter, distributor, trader and dealer internet games and online services	Taiwan		75.01	%		93.50	%		93.50	%
Sept 3 Technology Sdn. Bhd.	Developers and agents of interactive applications and software	Malaysia		—			52%	(2)		60%	(2)
Subsidiary of MOL Turkey Bilgi Sistemleri Yayıncılık Gıda ve Tekstil San. Tic. A.Ş.
Pintura Odeme ve lletisim Teknolojileri Anonim Şirketi	Dormant	Republic of Turkey		—			51	%		51	%

F-94

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
Subsidiaries of MyCNX Holdings (M) Sdn. Bhd.
MMOG Asia Sdn. Bhd.	Supply computer games, software and hardware related to information technology	Malaysia		79.995	%		100	%		100	%
MMOG Asia (Thailand) Co. Ltd.	Providing services for games online via internet	Thailand		39.20%	(3)		49%	(3)		49%	(3)
Taiko Galaxy Sdn. Bhd.	Acts as importer, exporter, distributor, trader of and dealer in internet games, computer software packages, computer peripherals, mobile games and all computer related products that would be related to information technology	Malaysia		40.80%	(1)		51	%		100	%
Subsidiary of Klon Odeme ve Iletisim Teknolojileri Annim Sirketi. (“PaybyMe”)
PaybyMe FZ-LLC	Providing payment solutions to web merchants	United Arab Emirates		—			—			50.90	%

F-95

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
Subsidiary of MOL AccessPortal Inc.
Uniwiz Trade Sales, Inc	Distribution solution provider for prepaid services in the Philippines	Philippines		100	%		100	%		100	%
Subsidiaries of MOLPay Sdn. Bhd.
MOLPay Limited, Hong Kong	Establish, maintain and operate a payment, clearing and settlement system and other computer related activities	Hong Kong		51	%		51	%		51	%
MOLPay Pte Ltd	Establish, maintain and operate a payment, clearing and settlement system and other computer related activities	Singapore		51	%		51	%		51	%
MOL Wallet Sdn. Bhd.	Establish, maintain and operate a payment, clearing and settlement system and other computer related activities	Malaysia		—			51	%		51	%

F-96

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
Subsidiaries of MOL AccessPortal Co. Ltd.
Zest Interactive Co Ltd	Sales and distribution of game software, electronic game pin and CDs	Thailand		49%	(1)		86.73	%		86.73	%
MOL Solutions Co Ltd	Enterprise software design and development	Thailand		49%	(1)		86.73	%		86.73	%
e-Innovations Systems & Networks Thai Co. Ltd.	Engaged in the game download services	Thailand		—			52	%		52	%
3Sept Corporations Co. Ltd.	Business of consulting and give advice on computer hardware and software	Thailand		—			52	%		52	%
MOL Payment Co. Ltd.	Payment channel online	Thailand		—			86.73	%		86.73	%
MOL Paying Co. Ltd.	Processing data and financial transactions payment	Thailand		—			—			52	%

F-97

		Country of	Proportion of ownership interest and voting power held
Name of subsidiary	Principal activities	incorporation	2013			2014			2015
Subsidiary of Rixty, Inc.
Rixty Brasil Intermediação e Agenciamento de Negócios Ltda	Providing alternative payment system to domestic and international users to spend cash and coins for online games, virtual goods and digital content	Brazil		54.20	%		54.20	%		54.20	%

⁽¹⁾  Based on the contractual arrangements between the Group and other investors, the Group has the power to direct the relevant activities of these entities unilaterally, and hence the Group has control over these entities.

⁽²⁾  Restructured during the financial year.

⁽³⁾  The entities have been classified as subsidiaries as the Group has dominant voting interest to direct relevant activities of the entities.

F-98

Composition of the Group

Information about the composition of the Group at the end of the reporting period is as follows:

Principal activities	Place of incorporation and operation	Number of wholly-owned subsidiaries
		2013		2014		2015
Distribution of electronic games voucher and prepaid pins	Indonesia Philippines		1 1		1 1		1 1
Social network payment	Malaysia		1		1		1
Operating e-payment systems, provide information technology services, e-solution services, and internet related services	Philippines India Malaysia Singapore Turkey		1 1 1 1 —		1 1 3 1 2		1 —   3 1 2
Supply of computer games, software and hardware related to information technology	Malaysia		—		2		3
Dormant	Malaysia		2		1		1
			9		14		14

F-99

Principal activities	Place of incorporation and operation	Number of non-wholly-owned subsidiaries
		2013		2014		2015
Supply of computer games, software and hardware related to information technology	Malaysia Thailand		4 2		1 1		—   1
Providing mobile payment platform	Malaysia		1		1		1
Information technology, electronic payments, online business services, electronic retail, electronic commerce online distribution, and other computer related activities	Malaysia Australia Hong Kong Singapore USA Brazil Turkey Vietnam Thailand		2 1 1 1 1 1 2 1 —		3 1 1 1 1 1 1 1 1		3 1 1 1 1 1 1 1 1
Investing in other businesses, both local and overseas entities	Thailand		—		2		2
Sales of electronic pins for online games and other related products	Thailand Taiwan		1 1		2 1		2 1
Engaged in the game download services	Thailand		—		1		1
Business of consulting and give advice on computer hardware and software	Thailand		—		1		1
Developers and agents of interactive applications and software	Malaysia		—		1		1
Enterprise software design and development	Thailand		1		1		1
Processing data and financial transaction payment	Thailand		—		—		1
Dormant	Turkey		—		1		1
Providing payment solutions to web merchants	United Arab Emirates		—		—		1
			20		24		25

F-100

Details of non-wholly owned subsidiaries of the Group that have material non-controlling interests:

				Proportion of ownership interest and voting power held by non- controlling interests				Profit allocated to non-controlling interests							Accumulated non-controlling interests
Name of subsidiaries	Country of incorporation	2013		2014		2015		2013		2014		2015			2013		2014		2015
		%		%		%		MYR		MYR		MYR			MYR		MYR		MYR
MyCNX	Malaysia		20.005		—		—		2,615,782		1,176,787		—			5,714,039		—		—
MOL Thailand	Thailand		51		13.27		13.27		4,504,237		2,142,429		(213,687	)		10,081,682		3,002,499		2,669,534
GameSultan	Turkish Republic of Northern Cyprus		30		—		—		1,753,601		—		—			3,558,102		—		—
Nganluong	Vietnam		50		50		50		329,192		316,060		(198,303	)		4,479,159		4,592,017		5,321,453
PaybyMe	Republic of Turkey		—		49		49		—		386,822		2,313,414			—		6,814,695		7,992,525
Individually immaterial subsidiaries with non-controlling interests																6,787,248		981,833		(1,788,818	)
																30,620,230		15,391,044		14,194,694

F-101

Summarized financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests is set out below. The summarized financial information below represents amounts before intragroup eliminations.

	MyCNX						GameSultan						MOL Thailand
	2013		2014		2015		2013		2014		2015		2013		2014		2015
	MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR		MYR
Statements of financial position as of December 31
Current assets		10,141,782		15,201,695		15,299,508		15,347,529		22,749,315		22,067,836		29,976,327		37,059,748		53,827,992
Non-current assets		9,491,339		8,446,860		4,350,666		14,925		12,770		19,976		5,129,221		12,018,205		11,086,142
Current liabilities		2,167,222		3,923,522		3,114,039		3,502,084		8,099,451		3,479,789		18,571,131		31,928,224		48,820,514
Non-current liabilities		2,271,925		1,825,878		—		30		—		—		292,982		956,841		1,169,842
Equity attributable to owners of the Company		15,193,974		17,899,155		16,536,135		11,860,340		14,662,634		18,608,023		16,241,435		16,192,888		14,923,778

F-102

	MyCNX									GameSultan								MOL Thailand
	2013			2014			2015			2013			2014		2015			2013			2014			2015
	MYR			MYR			MYR			MYR			MYR		MYR			MYR			MYR			MYR
Statements of profit or loss and other comprehensive income for the year ended December 31
Revenue		23,821,267			23,640,134			11,767,383			11,951,096			13,690,543		16,009,919			29,375,019			39,109,408			46,781,413
Total comprehensive income/(loss)		13,834,043			11,669,470			(6,198,496	)		6,535,137			5,187,983		4,131,150			8,831,837			6,517,798			(774,942	)
Statements of cash flows for the year ended December 31
Net cash inflow/(outflow) from operating activities		15,873,343			15,879,704			(3,011,511	)		5,390,726			1,023,353		769,426			6,953,152			9,285,748			9,361,672
Net cash (outflow)/inflow from investing activities		(4,512,358	)		(1,621,805	)		731,532			(18,342	)		39,077		364,350			(3,414,567	)		(8,615,921	)		(950,057	)
Net cash (outflow)/inflow from financing activities		(11,236,342	)		(9,379,919	)		(2,769,735	)		(2,464,224	)		—		(175,783	)		(346,479	)		151,004			(8,541,798	)

F-103

	Nganluong										PaybyMe
	2013			2014		2015			2013		2014		2015
	MYR			MYR		MYR			MYR		MYR		MYR
Statements of financial position as of December 31
Current assets		13,238,398			17,424,596		24,158,773			—		20,915,360		46,781,781
Non-current assets		115,309			450,590		530,898			—		1,159,821		2,164,905
Current liabilities		4,395,389			8,399,272		11,779,349			—		16,640,880		37,805,545
Non-current liabilities		—			—		—			—		498,503		630,308
Equity attributable to owners of the Company		8,958,318			9,475,914		12,910,322			—		4,935,798		10,510,833
Statements of profit or loss and other comprehensive income for the year ended December 31
Revenue		7,062,561			8,152,591		18,107,518			—		13,195,081		53,559,422
Total comprehensive (loss)/income		(1,491,458	)		675,716		(396,606	)		—		960,231		4,721,252

F-104

	Nganluong											PaybyMe
	2013			2014			2015			2013		2014			2015
	MYR			MYR			MYR			MYR		MYR			MYR
Statements of cash flows for the year ended December 31
Net cash inflow/(outflow) from operating activities		836,081			1,703,547			(3,189,032	)		—		6,890,741			16,389,726
Net cash outflow from investing activities		(3,690,014	)		(376,667	)		(93,294	)		—		(32,727	)		(230,315	)
Net cash inflow/(outflow) from financing activities		8,438,000			(158,120	)		—			—		37,567			(235,737	)

F-105

18. INVESTMENT IN ASSOCIATES

	2013			2014			2015
	MYR			MYR			MYR
At cost
Unquoted shares in Malaysia		30,000			—			—
Unquoted shares outside Malaysia		96,235			100,984			100,984
		126,235			100,984			100,984
Share of post acquisition reserves		(48,135	)		(12,191	)		(27,514	)
		78,100			88,793			73,470

The summarized financial information of equity method investees is illustrated as below:

	2013			2014			2015
	MYR			MYR			MYR
Statements of financial position
Current assets		1,094,573			1,385			174,361
Non-current assets		954,609			334,280			150,656
Current liabilities		4,768,160			142,667			168,127
Results
Revenue		97,534			157,890			33,461
Loss from operations		(1,557,239	)		(343,471	)		(70,679	)
Loss for the year		(1,486,129	)		(343,471	)		(70,679	)
Share of results of associates		(13,259	)		(104,489	)		(15,323	)

F-106

Details of the associates are as below:

		Financial	Country of	Effective equity interest
Name of associate	Principal activities	year end	incorporation	2013			2014			2015
eAuto Sdn. Bhd.	Provide internet motor based vehicle classified services, transfer of vehicle ownership and motor related internet services activities	December 31	Malaysia		30	%		—			—
Associate of MOL AccessPortal Co. Ltd.
Loyalty In Motion Co. Ltd.	Business consultant	December 31	Thailand		12.25	%		21.68	%(1)		21.68	%

⁽¹⁾  As mentioned in Note 17, the Group further acquired an indirect 9.43% equity interest in Loyalty in Motion Co. Ltd through the acquisition of a 49% equity interest in each of MOL Group and MOL Holdings.

F-107

19. OTHER INVESTMENT

	2013			2014			2015
	MYR			MYR			MYR
Unquoted shares		1,235,000			1,235,000			1,235,000
Less: Accumulated impairment loss		(1,234,999	)		(1,234,999	)		(1,234,999	)
		1			1			1

Other investment relates to 180 common shares in EBI Communications, Inc (“EBI”), a company incorporated in Canada, which was impaired due to the continuing losses incurred in previous years.

20. DEVELOPMENT EXPENDITURE

	2013		2014			2015
	MYR		MYR			MYR
Cost
As of January 1		11,225,803		13,935,423			17,292,584
Capitalized during the year		2,709,620		3,659,272			4,709,738
Written off		—		(302,111	)		—
As of December 31		13,935,423		17,292,584			22,002,322
Accumulated amortization
As of January 1		6,738,105		8,748,978			10,733,748
Amortization for the year		2,010,873		2,110,650			2,618,197
Written off		—		(125,880	)		—
As of December 31		8,748,978		10,733,748			13,351,945
Net carrying amount
As of December 31		5,186,445		6,558,836			8,650,377

Included in costs capitalized were the following:

	2013		2014		2015
	MYR		MYR		MYR
Depreciation of computer equipment and software (Note 15)		198,289		231,814		210,819
Salaries paid to directors (Note 8)		28,050		417,426		167,531
Rental of development centre		49,598		62,308		65,470

F-108

21. INTANGIBLE ASSETS

2013	Goodwill		Software and copyright			Electronic payment system		Exclusive licence and distribution rights of online games and reloads			Intellectual property			Trademark		Total
	MYR		MYR			MYR		MYR			MYR			MYR		MYR
Cost
As of January 1, 2013		23,949,626		131,818			1,750,000		30,477,768			12,079,528			22,022		68,410,762
Additions		—		—			—		4,296,422			4,778,805			—		9,075,227
Acquisition of subsidiaries (Note 43)		55,774,073		—			—		27,081,406			—			—		82,855,479
Disposals		—		—			—		(170,256	)		—			—		(170,256	)
Write-off		—		(72,365	)		—		—			—			—		(72,365	)
Foreign exchange difference		—		1,327			—		46,489			(3,698	)		1,688		45,806
As of December 31, 2013		79,723,699		60,780			1,750,000		61,731,829			16,854,635			23,710		160,144,653

F-109

2013	Goodwill		Software and copyright			Electronic payment system		Exclusive licence and distribution rights of online games and reloads			Intellectual property			Trademark		Total
	MYR		MYR			MYR		MYR			MYR			MYR		MYR
Accumulated amortization
As of January 1, 2013		—		39,872			826,351		5,118,477			—			5,648		5,990,348
Disposals		—		—			—		(95,760	)		—			—		(95,760	)
Write-off		—		(1,845	)		—		—			—			—		(1,845	)
Amortization for the year		—		6,230			583,275		14,723,974			42,129			7,341		15,362,949
Foreign exchange difference		—		(26,006	)		—		26,248			(950	)		431		(277	)
As of December 31, 2013		—		18,251			1,409,626		19,772,939			41,179			13,420		21,255,415
Net carrying amount
As of December 31, 2013		79,723,699		42,529			340,374		41,958,890			16,813,456			10,290		138,889,238

F-110

2014	Goodwill			Software and copyright		Electronic payment system			Exclusive licence and distribution rights of online games and reloads			Intellectual property			Trademark		Total
	MYR			MYR		MYR			MYR			MYR			MYR		MYR
Cost
As of January 1, 2014		79,723,699			60,780		1,750,000			61,731,829			16,854,635			23,710		160,144,653
Additions		—			—		—			1,069,338			1,267			—		1,070,605
Acquisition of subsidiaries (Note 43)		26,100,254			—		12,162,734			—			3,697,437			—		41,960,425
Disposals		(50,083	)		—		—			—			—			—		(50,083	)
Write-off		—			—		—			(58,077	)		—			—		(58,077	)
Reclassifications		—			40,488		—			215,218			(93,607	)		—		162,099
Foreign exchange difference		—			3,000		36,340			2,295			412,828			1,425		455,888
As of December 31, 2014		105,773,870			104,268		13,949,074			62,960,603			20,872,560			25,135		203,685,510
Accumulated amortization
As of January 1, 2014		—			18,251		1,409,626			19,772,939			41,179			13,420		21,255,415
Amortization for the year		—			10,279		1,136,897			14,000,545			2,626,110			9,031		17,782,862
Reclassifications		—			5,138		(45	)		215,268			3,076			—		223,437
Foreign exchange difference		—			1,048		1,666			1,312			11,345			750		16,121
As of December 31, 2014		—			34,716		2,548,144			33,990,064			2,681,710			23,201		39,277,835
Net carrying amount
As of December 31, 2014		105,773,870			69,552		11,400,930			28,970,539			18,190,850			1,934		164,407,675

F-111

2015	Goodwill		Software and copyright			Electronic payment system			Exclusive licence and distribution rights of online games and reloads			Intellectual property		Trademark		Total
	MYR		MYR			MYR			MYR			MYR		MYR		MYR
Cost
As of January 1, 2015		105,773,870		104,268			13,949,074			62,960,603			20,872,560		25,135		203,685,510
Additions		—		948,500			—			6,422,046			3,498		—		7,374,044
Effect of purchase price allocation (Note 43)		1,359,219		—			(294,103	)		—			—		—		1,065,116
Write-off		—		(78	)		—			(944,865	)		—		—		(944,943	)
Transfer from property, plant and equipment (Note 15)		—		24,356			—			—			—		—		24,356
Foreign exchange difference		—		12,702			64,325			3,403			999,036		5,761		1,085,227
As of December 31, 2015		107,133,089		1,089,748			13,719,296			68,441,187			21,875,094		30,896		212,289,310
Accumulated amortization
As of January 1, 2015		—		34,716			2,548,144			33,990,064			2,681,710		23,201		39,277,835
Amortization for the year		—		144,117			2,447,652			16,314,254			1,429,027		2,123		20,337,173
Write-off		—		(78	)		—			(197,242	)		—		—		(197,320	)
Transfer from property, plant and equipment (Note 15)		—		12,228			—			—			—		—		12,228
Foreign exchange difference		—		6,360			22,320			3,401			171,604		5,572		209,257
As of December 31, 2015		—		197,343			5,018,116			50,110,477			4,282,341		30,896		59,639,173

F-112

2015	Goodwill		Software and copyright		Electronic payment system		Exclusive licence and distribution rights of online games and reloads		Intellectual property		Trademark		Total
	MYR		MYR		MYR		MYR		MYR		MYR		MYR
Accumulated impairment loss
As of January 1, 2015		—		—		—		—		—		—		—
Impairment loss for the year		36,856,928		—		—		1,561,346		—		—		38,418,274
As of December 31, 2015		36,856,928		—		—		1,561,346		—		—		38,418,274
Net carrying amount
As of December 31, 2015		70,276,161		892,405		8,701,180		16,769,364		17,592,753		—		114,231,863

F-113

Included in the intellectual property is the domain name of MOL.com used by the Group through internet media.

Goodwill on consolidation

	2013		2014			2015
	MYR		MYR			MYR
At beginning of year		23,949,626		79,723,699			105,773,870
Acquisition of subsidiaries (Note 43)		55,774,073		26,100,254			—
Effect of purchase price allocation (Note 43)		—		—			1,359,219
Impairment loss for the year		—		—			(36,856,928	)
Disposal		—		(50,083	)		—
At end of year		79,723,699		105,773,870			70,276,161

Details of goodwill impairment for the year ended December 31, 2015 are as follows:

	Carrying value before impairment		Impairment loss			Carrying value after impairment
	MYR		MYR			MYR
2015
GameSultan and PaytoGo(1)		45,183,982		(33,293,000	)		11,890,982
MOL AccessPortal Pty. Ltd. (2) (Australia)		408,928		(408,928	)		—
MyCNX Holdings (M) Sdn. Bhd. (3) (MyCNX)		4,893,192		(3,155,000	)		1,738,192
		50,486,102		(36,856,928	)		13,629,174

⁽¹⁾ GameSultan and PaytoGo’s significant impairment arise due to the shift in the market dynamics of games-pin business and decline in the popularity of Joygame together with loss of exclusivity of certain global contents. In addition, GameSultan has also been adversely affected by the shift from PC games to mobile games impacting its revenue and gross margin.

⁽²⁾ MOL AccessPortal Pty. Ltd. (Australia) has been impaired as the business in Australia and New Zealand is growing at a slower rate in 2015 due to the maturity of the markets.

⁽³⁾ Impairment of MyCNX Holdings (M) Sdn. Bhd. is due to the rapid shift from PC to mobile games, delays in launching new mobile games, and the inherent competitive environment within the mobile games component leading to lower take rates and shorter life span relative to PC games.

F-114

	Carrying Amount of Goodwill and other Intangible Assets						Pre-Tax Discount Rate									Terminal Growth Rate
	2013		2014		2015		2013			2014			2015			2013			2014			2015
	MYR		MYR		MYR
Goodwill
GameSultan and PaytoGo (1)		45,183,982		45,183,982		11,890,982		17.39	%		20.80	%		23.15	%		3.80	%		3.00	%		2.00	%
Nganluong (1)		10,416,362		10,416,362		10,416,362		20.57	%		28.20	%		26.43	%		5.60	%		5.00	%		2.00	%
Rixty Inc. (USA) (1)		9,733,193		9,733,193		9,733,193		9.62	%		25.10	%		22.93	%		2.40	%		2.00	%		2.00	%
MOL AccessPortal, Inc. (MOL Philippines) (1)		6,986,508		6,986,508		6,986,508		13.92	%		26.10	%		23.08	%		5.40	%		3.00	%		2.00	%
MyCNX Holdings (M) Sdn. Bhd. (MyCNX) (1)		4,893,192		4,893,192		1,738,192		11.86	%		22.70	%		19.09	%		4.70	%		—			2.00	%
MOL AccessPortal Co. Ltd. (MOL Thailand) (1)		1,877,725		1,877,725		1,877,725		13.19	%		23.30	%		19.47	%		4.40	%		3.00	%		2.00	%
Easy2Pay (1)		—		2,421,261		2,421,261		—			21.30	%		19.72	%		—			—			2.00	%
PaybyMe (1)		—		23,678,993		25,038,212		—			27.50	%		29.69	%		—			—			2.00	%
Others (2)		632,737		582,654		173,726
		79,723,699		105,773,870		70,276,161
Other intangible assets with indefinite useful lives
Intellectual property
MOL Online(1)		12,034,650		12,034,650		12,034,650		19.00	%		19.00	%		19.00	%		—			—			—

F-115

Impairment of exclusive license and distribution rights of online games and reloads (Ayopay) is due to the shift in the competitive environment, with more competitors in the market space, adding to both margins contraction and lower profitability. In addition, Ayopay face higher cost of doing business in Indonesia due to the fragmented market environment.

⁽¹⁾  The recoverable amount of these CGUs is determined based on a value-in-use approach which uses cash flow projections based on financial budgets approved by the directors of the Company covering a five-year period. Cash flows beyond that five-year period have been extrapolated using steady growth rates (see rates shown in table) per annum rate which is the projected long-term average growth rate for each of the CGUs, which is consistent with the industry growth rate. Cash flow projections during the budget period are based on past performance of each of the CGUs and their expectations of market development such as consumer spending, changes on the Information Technology (“IT”) industry and impact to cost of IT staff, and the demand existing in the gaming or entertainment and telecommunication industries. The pre-tax discount rates (see rates shown in table) were applied and are based on weighted average cost of capital adjusted for the difference in currency and specific risks associated with the businesses of such CGUs. With regard to the assessment of value-in-use and fair value less costs to sell, the directors believe that no reasonably possible change in any of the above key assumptions would cause the recoverable amounts of the units to be materially below their carrying amounts.

⁽²⁾  Others represent goodwill allocated to MOL AccessPortal Pty Ltd (Australia) and MOLCube Sdn. Bhd. which is not individually or in aggregate significant in comparison with the Group’s total carrying amount of goodwill.

F-116

22. FINANCE LEASE RECEIVABLES

	2013		2014		2015
	MYR		MYR		MYR
Current finance lease receivables		65,506		99,240		145,234
Non-current finance lease receivables		506,871		459,428		314,193
		572,377		558,668		459,427

The Group leases MOLReloads terminals with its pre-installed proprietary software to certain retail outlets for the distribution of prepaid airtime and electronic pins. All leases are denominated in Malaysian Ringgit. The average term of the leases is 6 years.

	2013			2014			2015
	MYR			MYR			MYR
Minimum lease receivables
Not later than 1 year		284,760			309,960			309,960
Later than 1 year and not later than 2 years		284,760			309,960			214,514
Later than 2 years and not later than 5 years		643,475			506,415			294,000
Later than 5 years		72,130			2,100			—
		1,285,125			1,128,435			818,474
Less: Future finance income		(712,748	)		(569,767	)		(359,047	)
Present value of finance lease assets		572,377			558,668			459,427

	2013		2014		2015
	MYR		MYR		MYR
Present value of finance lease assets:
Not later than 1 year		65,506		99,240		145,234
Later than 1 year and not later than 2 years		95,636		144,938		101,442
Later than 2 years and not later than 5 years		347,958		312,462		212,751
Later than 5 years		63,277		2,028		—
		572,377		558,668		459,427

F-117

23. DEFERRED TAX ASSETS/(LIABILITIES)

The components and movements of deferred tax assets/(liabilities) during the financial year are as follows:

	2013			2014			2015
	MYR			MYR			MYR
As of January 1		(5,645,740	)		(9,455,169	)		(8,458,842	)
Acquisition of subsidiaries (Note 43)		(6,770,352	)		(3,792,860	)		—
Effect of purchase price allocation (Note 43)		—			—			58,820
Recognized in profit or loss (Note 13)		2,975,084			4,762,126			3,029,340
Charged to other comprehensive income		—			—			(46,945	)
Effect of foreign currency translation		(14,161	)		27,061			577,763
As of December 31		(9,455,169	)		(8,458,842	)		(4,839,864	)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The net deferred tax assets and liabilities shown on the consolidated statements of financial position after appropriate offsetting are as follows:

	2013			2014			2015
	MYR			MYR			MYR
Deferred tax assets		203,300			1,293,913			1,119,083
Deferred tax liabilities		(9,658,469	)		(9,752,755	)		(5,958,947	)
Net		(9,455,169	)		(8,458,842	)		(4,839,864	)

F-118

24. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	2013		2014		2015
	MYR		MYR		MYR
At fair value:
As of January 1		—		—		806,627
Additions		—		791,369		—
Disposal		—		—		(828,377	)
Net fair value gain		—		15,258		—
Transfer to profit or loss on disposal		—		—		(15,258	)
Effect of foreign currency translation		—		—		37,008
As of December 31		—		806,627		—

The available-for-sale financial assets represented investment in quoted trust fund managed by a local commercial bank that was not held for trading. The available-for-sale financial assets were recognized initially and subsequently at fair value. The calculation of the fair value of the available-for-sale financial asset is explained in Note 45.

Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis

The following summarises the methods used in determining the fair value of available-for-sale financial asset reflected in the above tables.

	2013		2014		2015
	MYR		MYR		MYR
Financial Assets:
Fair value:
Available-for-sale financial asset		—		806,627		—
Fair value hierarchy		Level 1
Valuation technique and key input		Quoted bid prices in an active market.

F-119

25. INVENTORIES

	2013		2014			2015
	MYR		MYR			MYR
Airtime prepaid electronic pins		11,005,931		14,150,394			16,316,776
Online game pins		12,631,640		10,126,364			14,266,490
Others		54,960		—			584,623
		23,692,531		24,276,758			31,167,889
Allowance for impairment loss		—		(434,343	)		(1,384,196	)
		23,692,531		23,842,415			29,783,693

Movement in allowance for impairment loss

	2013		2014			2015
	MYR		MYR			MYR
As of January 1		—		—			434,343
Impairment loss (Note 12)		—		468,200			1,065,610
Impairment loss no longer required (Notes 10 and 12)		—		(41,945	)		—
Written off		—		—			(135,961	)
Foreign exchange difference		—		8,088			20,204
As of December 31		—		434,343			1,384,196

The Group has written off inventories amounting to MYR1,300,209 (2014: MYR5,017; 2013: MYR709,515) in respect of obsolete inventories and write-downs of inventory to its net realizable value.

F-120

26. TRADE RECEIVABLES

	2013			2014			2015
	MYR			MYR			MYR
Trade receivables		31,558,106			40,966,833			60,736,475
Amount due from affiliates (Note 28.2)		3,015,095			14,030,525			23,830,401
Accrued revenue		—			5,126,905			22,433,815
Less: Allowance for doubtful debts		(753,094	)		(1,823,596	)		(2,895,352	)
		33,820,107			58,300,667			104,105,339

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortized cost.

During the financial year, trade receivables of the Group amounting to MYR56,187 (2014: MYR52,667; 2013: MYR80,000) were written off against the allowance for doubtful debts.

Affiliate companies are companies related to a shareholder of the Company (Note 28).

Trade receivables of the Group comprise amounts receivable from sales of MOLPoints, airtime prepaid electronic pins and online game pins. The Group’s normal trade credit term is 30 to 60 days (2014: 30 to 60 days; 2013: 30 to 60 days), other credit terms are assessed and approved on a case-to-case basis.

The Group’s historical experience in collection of trade receivables falls within the recorded credit period and management believes that no additional credit risk beyond amount provided for collection losses is inherent in the Group’s trade receivables. The Group does not hold any collateral over these balances.

Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting period but against which the Group has not recognized an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable.

Included in the accrued revenue of the Group is mainly pertaining to the sales of games pins to the distribution channels and services provided to telco-operators that has yet to be billed as at financial year end.

F-121

Ageing of trade receivables

	2013			2014			2015
	MYR			MYR			MYR
Neither past due nor impaired		26,611,867			43,868,028			82,895,306
Past due but not impaired:
1 to 30 days		3,109,808			4,894,137			11,092,125
31 to 60 days		1,514,754			2,663,298			4,050,403
61 to 90 days		801,656			1,257,178			2,023,247
More than 90 days		2,535,116			7,441,622			6,939,610
		7,961,334			16,256,235			24,105,385
		34,573,201			60,124,263			107,000,691
Impaired		(753,094	)		(1,823,596	)		(2,895,352	)
		33,820,107			58,300,667			104,105,339

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group.

Receivables that are past due but not impaired

Trade receivables that are past due but not impaired are mainly customers who have never defaulted on payments but are slow paymasters hence, are periodically monitored.

Receivables that are impaired

Trade receivables that were impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

	2013			2014			2015
	MYR			MYR			MYR
As of January 1		287,347			753,094			1,823,596
Impairment loss (Note 12)		545,747			1,246,054			1,322,604
Written off		(80,000	)		(52,667	)		(56,187	)
Impairment loss no longer required (Note 12)		—			(93,110	)		—
Reclassification		—			—			(166,124	)
Foreign exchange difference		—			(29,775	)		(28,537	)
As of December 31		753,094			1,823,596			2,895,352

F-122

During the year, the Group has directly written off trade receivables of MYR61,694 (2014: MYR196,424; 2013: MYR13,671)(Note 12) which were assessed as no longer collectible.

In determining the recoverability of the trade receivable, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

The Group has recognized an allowance for doubtful debts of 100% against all receivables over 1 year because historical experience has been that receivables that are past due beyond 1 year are not recoverable. Allowances for doubtful debts are recognized against trade receivables between 60 days and 360 days based on estimated irrecoverable amounts determined by reference to past default experience of the counterparty and an analysis of the counterparty’s current financial position.

27. OTHER RECEIVABLES, DEPOSITS AND PREPAID EXPENSES

	2013		2014		2015
	MYR		MYR		MYR
Current portion		14,009,186		25,021,155		63,362,110
Non-current portion		—		1,081,930		1,066,330
		14,009,186		26,103,085		64,428,440

	2013			2014			2015
Current portion	MYR			MYR			MYR
Other receivables		5,445,640			5,690,778			49,227,223
Less: Allowance for doubtful debts		(7,580	)		(24,588	)		(44,502	)
		5,438,060			5,666,190			49,182,721
Prepaid expenses		5,222,381			13,551,631			6,434,497
Other deposits		3,149,861			5,589,822			7,161,949
Advances for online games		198,884			213,512			582,943
		14,009,186			25,021,155			63,362,110
Non-current portion
Other receivables		—			1,081,930			1,066,330
		14,009,186			26,103,085			64,428,440

Other receivables, deposits and prepaid expenses in 2015 includes the settlement amount receivable from the insurers of USD8,500,000 (MYR36,511,750) relating to the consolidated class action lawsuit as disclosed in Note 46.

F-123

28. RELATED PARTY TRANSACTIONS

In addition to the related party information disclosed elsewhere in the consolidated financial statements, the details of related parties and their relationship with the Company and its subsidiaries are as follows:

Name of related parties	Relationship
Auto Tulin Sdn. Bhd.	Affiliate of the Company
Berjaya Auto Philippines Inc	Affiliate of the Company
Berjaya Channel Sdn. Bhd.	Affiliate of the Company
Berjaya Hospitality Services Sdn. Bhd.	Affiliate of the Company
Berjaya Roasters (M) Sdn. Bhd.	Affiliate of the Company
Berjaya Papa John’s Pizza Sdn. Bhd.	Affiliate of the Company
Berjaya Starbucks Coffee Company Sdn. Bhd.	Affiliate of the Company
Berjaya Sompo Insurance Berhad	Affiliate of the Company
Berjaya Times Square Sdn. Bhd.	Affiliate of the Company
Berjaya Corporation Berhad	Affiliate of the Company
Berjaya Eden Park London Hotel	Affiliate of the Company
Berjaya Langkawi Beach Resort Sdn. Bhd.	Affiliate of the Company
Berjaya Higher Education Sdn. Bhd.	Affiliate of the Company
Berjaya Pizza (Philippines) Inc	Affiliate of the Company
Berjaya Waterfront Sdn. Bhd.	Affiliate of the Company
Bermaz Motor Trading Sdn. Bhd.	Affiliate of the Company
BLoyalty Sdn. Bhd.	Affiliate of the Company
BTS Car Park Sdn. Bhd.	Affiliate of the Company
Cyberventures Sdn. Bhd.	Affiliate of the Company
Cyberport Holdings Sdn. Bhd.	Affiliate of the Company
Convenience Shopping (Sabah) Sdn. Bhd.	Affiliate of the Company
Cosway (M) Sdn. Bhd.	Affiliate of the Company
eAuto Sdn. Bhd.	Affiliate of the Company
7-Eleven Malaysia Sdn. Bhd.	Affiliate of the Company
GameMaker Co., Ltd	Affiliate of the Company
Juniasia Cyberport Sdn. Bhd.	Affiliate of the Company
MSC Cyberport Sdn. Bhd.	Affiliate of the Company
MOL Ventures Pte Ltd	Affiliate of the Company
Pactolus Co., Ltd.	Affiliate of the Company
Pattarapreecha Co., Ltd	Affiliate of the Company
Perdana Hotel Philippines Inc	Affiliate of the Company
Prime Credit Leasing Sdn. Bhd.	Affiliate of the Company
Popidols Co., Ltd	Affiliate of the Company
Qinetics Solutions Berhad	Affiliate of the Company
Securexpress Services Sdn. Bhd.	Affiliate of the Company
Singer (Malaysia) Sdn. Bhd.	Affiliate of the Company
Sports Toto Fitness Sdn. Bhd.	Affiliate of the Company
Sea Gamer Mall Sdn. Bhd.	Affiliate of the Company
Sweet River International Limited	Affiliate of the Company
TConnect Cyberport Sdn. Bhd.	Affiliate of the Company
U Mobile Sdn. Bhd.	Affiliate of the Company
CheapCard Pty Ltd	Other related parties

F-124

Name of related parties	Relationship
Friendster (S.E.Asia) Pte Ltd	Other related parties
Friendster iCafe Sdn. Bhd.	Other related parties
Friendster Sdn. Bhd.	Other related parties
Friendster Philippines, Inc	Other related parties
Ini3 Digital Co. Ltd	Other related parties
Kakao Malaysia Sdn. Bhd.	Other related parties
MOL Properties Sdn. Bhd.	Other related parties
NB Travel Sdn. Bhd.	Other related parties
Netbuilder (M) Sdn. Bhd.	Other related parties
Weshop Malaysia Sdn. Bhd.	Other related parties

Amount due from associates, which arose mainly from trade transactions and expenses paid by the associates on behalf of the Company, is unsecured, interest-free and repayable on demand.

Amount due from affiliates, which arose mainly from trade transactions, is unsecured, interest-free and repayable on demand.

Amount due from/(to) other related parties, which arose mainly from advances, trade transactions and expenses paid on behalf, is unsecured, interest-free and repayable on demand.

28.1 Amount due from associates

	2013		2014		2015
	MYR		MYR		MYR
Current:
Trade amount due from associates		216,848		—		—

28.2 Amount due from affiliates

	2013		2014		2015
	MYR		MYR		MYR
Current:
Trade amount due from affiliates (Note 26)		3,015,095		14,030,525		23,830,401

F-125

28.3 Amount due from/(to) other related parties

	2013		2014		2015
	MYR		MYR		MYR
Current:
Trade amount due from other related parties		85,515		354,968		1,294,958
Outstanding balances receivable for operating transactions		499,436		604,655		2,548,381
		584,951		959,623		3,843,339

	2013			2014			2015
	MYR			MYR			MYR
Trade amount due to other related parties		(1,234,971	)		(564,527	)		(1,034,656	)
Outstanding balances payable for operating and financing transactions		(29,512,942	)		(37,959	)		(140,497	)
		(30,747,913	)		(602,486	)		(1,175,153	)

F-126

28.4 Significant Related Party Transactions

	2013			2014			2015
	MYR			MYR			MYR
Associates
Maintenance support charges to associate		216,848			—			—
Affiliates
Commission paid to affiliates		(20,053,895	)		(20,080,595	)		(22,435,128	)
Commission received from affiliates		—			—			109,329
Purchase from affiliates		(440,390	)		(545,200	)		(588,480	)
Rental expense paid to affiliates		(709,834	)		(874,604	)		(1,420,517	)
Contact centre services charge paid to affiliates		(360,000	)		(453,250	)		(446,375	)
Purchase of products and services from affiliates		(200,000	)		(202,664	)		(2,017,010	)
Handling fees paid to affiliates		(71,464	)		(170,492	)		(164,998	)
Programmer fees paid to affiliate		—			(113,917	)		(35,000	)
Interest expense paid to affiliates		(134,283	)		(84,147	)		(52,776	)
Data entry fees paid to affiliate		—			(60,000	)		(170,111	)
Purchase of plant and equipment from affiliate		—			(48,000	)		—
Advertisement fees paid to affiliates		(28,000	)		(28,330	)		(33,720	)
Interest charged on advances from affiliate		—			(907,738	)		(52,795	)
Transactions fees received from affiliates		2,551,925			3,267,687			3,111,049
Service fees received from affiliates		435,285			750,969			1,063,741
Equipment rental income received from affiliate		288,323			302,544			290,867
Interest income received from affiliate		172,802			240,151			210,719
Maintenance support charges to affiliate		—			233,030			—
Sales of property, plant and equipment to affiliates		—			—			29,850
System and management service fees paid to affiliates		—			—			(68,000	)
Payment channel services provided to affiliates		—			—			18,000

F-127

	2013			2014			2015
	MYR			MYR			MYR
Advertisement income received from affiliates		—			155,000			—
Handling fees received from affiliate		223,096			32,260			—
Other related parties
Purchase of goods from related parties		(9,323,130	)		(7,535,202	)		(3,126,245	)
Commission paid to related parties		(4,630,009	)		(1,449,836	)		(3,127,242	)
IT consultancy fees paid to other related parties		(504,804	)		(349,915	)		(46,212	)
Marketing fees received from related parties		—			2,416,667			1,000,000
Payment channel services charge to other related parties		24,147			101,781			216,350
Advertisement charges paid to related parties		—			(119,211	)		—
Rental expenses paid to other related parties		(107,439	)		(96,282	)		(32,689	)
Sales from services provided to other related parties		(80,000	)		(81,290	)		(10,424	)
Sales of goods to other related parties		5,025,319			5,413,086			3,512,981
Revenue sharing from related parties		—			301,849			2,041,603
Maintenance support charge to related parties		44,420			130,885			72,025
Commission receive from related parties		—			—			394,685
Service fees paid to related parties		—			—			(33,412	)
Excess travelling expenses received from other related parties		264,611			—			—
Disposal of investment property to a director of MyCNX Holdings (M) Sdn. Bhd.		—			—			2,500,000

F-128

29. CASH AND BANK BALANCES

	2013		2014		2015
	MYR		MYR		MYR
Cash at banks and on hand		38,133,264		131,932,596		86,719,855
Deposits and placement with a licensed banks		11,596,224		18,638,209		7,342,579
		49,729,488		150,570,805		94,062,434
Restricted cash		4,832,435		34,392,659		43,560,522

Cash at bank earns interest at floating rates based on daily bank deposit rates. The deposits and placements with licensed banks are made for varying periods of between one day and 3 months, depending on the immediate cash requirements of the Group, and earn interest ranging from 0.15% - 3.15% (2014: 2.80% - 3.15%; 2013: 2.80%) per annum.

Restricted cash at bank represents an amount under escrow which is required to be at minimum of 1.0 time of value or ratio of 1:1 of unutilized MOLPoints in compliance with the Guideline on Electronic Money issued by Bank Negara Malaysia to be deposited and managed separately from the Group’s working capital funds at the end of each month. However, the Group maintains the escrow amount at 1.2 times of value or ratio of 1:1.2 of unutilized MOLPoints as of December 31, 2015.

Restricted cash at bank also includes the Group’s deposit of MYR34,418,449 (2014: MYR27,957,864; 2013: MYRNil) to secure bank guarantees in relation to the call and put option (Note 37) granted in 2014, in accordance with the terms of acquisition of PaybyMe in 2014 as disclosed in Note 17.

30. SHARE CAPITAL

	2013		2014		2015
	MYR		MYR		MYR
Authorized:
1,000,000,000 ordinary shares of USD1 par value		3,296,500,000		3,296,500,000		3,296,500,000

F-129

	Ordinary shares
	2013				2014				2015
	Number of shares		MYR		Number of shares		MYR		Number of shares		MYR
Issued, fully paid and outstanding:
Shares of USD1 par value as of January 1		58,897,320		9,816,220		58,897,320		9,816,220		67,504,435		38,059,243
Issuance of new shares of USD1 par value through Initial Public Offering		—		—		7,485,030		24,573,354		—		—
Issuance of shares for the acquisition of non-controlling interests (Note 17)		—		—		1,056,736		3,463,513		—		—
Issuance of shares on redemption of promissory notes (Note 35)		—		—		65,349		206,156		—		—
Issued and outstanding as of December 31		58,897,320		9,816,220		67,504,435		38,059,243		67,504,435		38,059,243

The 58,897,320 ordinary shares issued, fully paid and outstanding as of December 31, 2013 and as of January 1, 2014 are presented as a result of the reorganization (See Note 1) of the Company, which was accounted for using merger accounting.

F-130

Treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares.

On November 24, 2014, the Company’s Board of Directors approved a share repurchase program, authorizing the Company to repurchase at any time during the next twelve months an aggregate of up to US$15 million of ADSs, from time to time, subject to customary blackout periods, including periodic blackout periods pending the release of its financial results. Purchases by the Company under the share repurchase program could be made from time to time at prevailing market prices in open market purchases, privately negotiated transactions, block purchases or otherwise, as determined by the Company’s management. The Share purchases would be funded from the Company’s cash balances.

The timing, frequency and amount of repurchase activity would depend on a variety of factors such as levels of cash generation from operations, cash requirements for investment in the Company’s business, current stock price, market conditions and other factors. The share repurchase program could be suspended, modified or discontinued at any time and has no set expiration date.

As of December 31, 2015, the Company has repurchased 2,637,789 shares of its ADS, for an aggregate gross value of USD6,082,998 (equivalent to MYR22,056,637) and are held in treasury.

31. RESERVES

	2013			2014			2015
	MYR			MYR			MYR
				(Restated, see Note 48)
Non-distributable:
Share premium [Note (a)]		2,954,189			305,624,250			305,624,250
Capital contribution reserve [Note (b)]		—			7,602,686			41,473,431
Share options reserve [Note (c)]		—			8,131,420			—
Investment revaluation reserve [Note (d)]		—			15,258			—
Foreign currency translation reserve [Note (e)]		(2,474,580	)		8,207,205			11,394,170
Distributable:
Retained earnings/(accumulated losses)		24,145,038			(85,451,104	)		(165,840,269	)
		24,624,647			244,129,715			192,651,582

F-131

(a) Share premium

Share premium arose from the premium on the issuance of new ordinary shares, netted off with the underwriting commission and IPO expenses.

(b) Capital contribution reserve

The capital contribution reserve represents capital contribution from the Company’s shareholder, MOL Investments Pte Ltd for recognition of share-based compensation expense for the Employee Share Options Scheme granted on June 19, 2014.

(c) Share options reserve

The share options reserve relates to share options granted by the Company to its employees under its employee share option plan. Further information about the share-based payments to employees is set out in Note 42. In 2015, due to the cancellation of the Employee Share Options Scheme as disclosed in Note 42, the entire share options reserve has been transferred to accumulated losses.

(d) Investment revaluation reserve

The investment revaluation reserve represents the cumulative gains and losses arising on the revaluation of available-for-sale financial assets that have been recognized in other comprehensive income, net of amounts reclassified to profit or loss when those assets have been disposed of or are determined to be impaired.

(e) Foreign currency translation reserve

Foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

F-132

32. BORROWINGS

	2013		2014		2015
	MYR		MYR		MYR
Non-current - at amortized cost:
Secured
Term loans (i)		1,938,845		1,844,185		—
Finance lease payables (Note 33)		1,445,027		1,181,749		1,865,728
		3,383,872		3,025,934		1,865,728

	2013		2014		2015
	MYR		MYR		MYR
Current - at amortized cost:
Secured
Term loans (i)		206,340		124,917		—
Revolving credit (ii)		68,000,000		51,000,000		14,000,000
Finance lease payables (Note 33)		1,424,654		1,583,193		1,923,778
		69,630,994		52,708,110		15,923,778

(i) Term loans

The term loans are repayable by instalments of varying amounts over the following periods:

	2013		2014		2015
	MYR		MYR		MYR
Current
Not later than 1 year		206,340		124,917		—
Non-current
Later than 1 year and not later than 2 years		135,768		120,398		—
Later than 2 years and not later than 5 years		425,507		407,056		—
Later than 5 years		1,377,570		1,316,731		—
		1,938,845		1,844,185		—

F-133

In 2012, Zest Interactive Co. Ltd., a subsidiary of MOL AccessPortal Co. Ltd. obtained a term loan from a local commercial bank in Thailand for the purchase of land and building. The term loan bore interest at Nil (2014: 7.40%; 2013: 7.63%) per annum and was secured by mortgage of the land and building of which net carrying amount is MYRNil (2014: MYR1,763,196, 2013: MYR1,299,061) as disclosed in Note 15. The term loan has been fully repaid in 2015.

Also in 2012, MyCNX Holdings (M) Sdn. Bhd. entered into a loan agreement with a local commercial bank in Malaysia to obtain financing for the purchase of a commercial building. As at December 31, 2015, the investment property with net carrying amount of MYRNil (2014: MYR2,367,484; 2013: MYR2,393,789) was partially financed by this term loan amounting to MYR1,800,000 with interest rate of Base Lending Rate (“BLR”) plus 2.10% per annum. The term loan has been fully settled during the financial year ended 2015.

On January 8, 2015, the investment property has been sold for a total sales consideration of MYR2,500,000. On February 27, 2015, a portion of the proceeds for the sales was used to settle the remaining unpaid principal, accrued interest and prepayment charges of the term loan obtained from a local commercial bank in Malaysia amounting to MYR1,696,325.

(ii) Revolving credit

Revolving credit facility of the Group with Malaysia Debt Ventures Berhad bears interest at 7.25% (2014: 7.25%; 2013: 7.25%) per annum and has an expiry date on December 31, 2017.

The revolving credit is secured by way of personal guarantee of two shareholders of the Company, corporate guarantee from a related party, a fixed and floating charge over all present and future assets and undertakings of the Group.

F-134

33. FINANCE LEASE PAYABLES

	2013			2014			2015
	MYR			MYR			MYR
Future minimum lease payments:
Not later than 1 year		1,588,872			1,725,672			2,216,259
Later than 1 year and not later than 2 years		1,109,592			975,570			2,006,164
Later than 2 years and not later than 5 years		411,172			261,789			361,529
Total future minimum lease payments		3,109,636			2,963,031			4,583,952
Less: Future finance charges		(239,955	)		(198,089	)		(794,446	)
Present value of finance lease payables		2,869,681			2,764,942			3,789,506

	2013			2014			2015
	MYR			MYR			MYR
Present value of finance lease payables:
Not later than 1 year		1,424,654			1,583,193			1,923,778
Later than 1 year and not later than 2 years		1,046,826			926,791			1,516,841
Later than 2 years and not later than 5 years		398,201			254,958			348,887
Present value of finance lease payables		2,869,681			2,764,942			3,789,506
Less: Amount due within 12 months		(1,424,654	)		(1,583,193	)		(1,923,778	)
Amount due after 12 months		1,445,027			1,181,749			1,865,728

The finance lease payables of the Group bear interest at rates ranging from 2.59% to 10.00% (2014: 2.59% to 5.00%; 2013: 2.59% to 5.00%) per annum at the end of the reporting period.

34. TRADE PAYABLES

The normal trade credit terms granted to the Group by trade creditors range from 30 to 60 days (2014: 30 to 60 days; 2013: 30 to 60 days).

Included in trade payables of the Group are amounts of MYR38,972,747 (2014: MYR8,347,987; 2013: MYR6,637,159) being accrued purchases.

F-135

35. OTHER PAYABLES AND ACCRUED EXPENSES

	2013		2014		2015
	MYR		MYR		MYR
Other payables		8,940,320		5,783,496		46,882,410
Accrued expenses		2,379,557		10,812,689		12,834,872
Promissory notes		2,748,115		—		—
Deposit received		4,513,074		8,628,657		8,691,935
Customer’s account balances		3,710,540		5,086,199		4,315,404
		22,291,606		30,311,041		72,724,621

Included in other payables in 2015 is the settlement liability of the consolidated class action lawsuit of USD8,500,000 (MYR36,511,750) which is covered by insurers as mentioned in Note 27.

The promissory notes were issued in October 2012, and were automatically convertible upon (a) a firm commitment of an underwritten offering of the Company’s ordinary shares or (b) completion of an equity financing of at least USD1,000,000.

On May 30, 2014, the Group issued 65,349 ordinary shares to Javelin Venture Partners, non-controlling shareholder of Rixty Inc., in consideration of the cancellation of the convertible promissory notes amounting to MYR2,748,115. The estimated fair value of the equity shares issued approximates the principal amount of the promissory notes on the transaction day, hence there was no impact to the statement of profit or loss and other comprehensive income.

36. DERIVATIVE FINANCIAL LIABILITY

	2013		2014		2015
	MYR		MYR		MYR
			(Restated, see Note 48)
Financial liability at fair value through profit or loss		26,164,107		—		—

F-136

As mentioned in Note 17, on May 6, 2014, the Group entered into a Share Sale and Purchase agreement with non-controlling shareholders to acquire the remaining equity interest of 30% in each of MOL Turkey and GameSultan for a total purchase consideration of USD14,750,000 (equivalent to MYR48,188,250).

At the date of acquisition, the fair value of the put option amounting to MYR22,428,031 has been adjusted against the total purchase consideration, with the corresponding entry being accounted for as derivative financial liability.

At the reporting date, a fair value gain amounting to MYR3,736,076 (Note 10) from the remeasurement of put option has been recognized in the statements of profit or loss and other comprehensive income for the year ended December 31, 2014.

37. PUT OPTION WRITTEN ON NON-CONTROLLING INTEREST

As described in Note 17, in connection with the acquisition by MOL AccessPortal Sdn. Bhd. (‘MOLAP’), a subsidiary of the Company, of 51% equity interest in PaybyMe, MOLAP entered into a Shareholders Agreement dated September 15, 2014 with the non-controlling shareholders of PaybyMe (“Sellers”) for the acquisition of the 49% non-controlling equity interest in PaybyMe by way of an in-substance forward, comprising a Call Option (the “Call Option”) and a Put Option (the “Put Option”). Both the Call Option and Put Option shall be exercisable at any time during the First Exercise Period (from April 1, 2016 to April 30, 2016) and the Second Exercise Period (from April 1, 2017 to April 30, 2017) for half of the remaining shares held by the Sellers for each periods (“Option Shares”). In the case of the Put Option, the Sellers shall be entitled to, but not obligated, to exercise the right to require MOLAP to purchase the Option Shares.

In accordance with IAS 32, MOLAP is required to recognize a gross obligations for the present value of the redemption amount of the Put Option because the Sellers have the right to require MOLAP to pay the counterparty cash or another financial asset in exchange for the Option Shares. The gross obligations is recognized at an amount equal to the present value of the estimated amounts that could be required to be paid to the Sellers in accordance with the shareholders agreement. Changes in the measurement of the gross obligations due to the unwinding of the discount and change in the estimated amounts that the acquirer could be required to pay are recognized in profit or loss.

The directors estimate that any reasonably possible increase/(decrease) of 1% of the discount rate would result in a (decrease)/increase in the value of the gross obligations of in-substance forward as of December 31, 2015 by approximately (MYR318,896) or MYR324,676, (2014: (MYR536,226) or MYR549,342) respectively. The directors believe that any reasonably possible change in the other key assumptions would not result in significant impact to the fair value of the in-substance forward.

F-137

MOLAP’s gross obligations as at the end of the reporting period with respect to this put option has been recognized as a financial liability at the fair value in these financial statements. The fair value is determined by applying a pre-tax weighted average cost of capital discount rate of 18% (2014: 19%) per annum together with the following assumptions:

• In the first exercise period, the Option Price shall equal to the amount which equals to the 24.5% of shares to be acquired by MOLAP subject to the option right at earnings multiple of PaybyMe for the financial year ended December 31, 2015 plus Mandatory Capital Loan plus Deferred Conditional Purchase Price; and

• In the second exercise period, the Option Price shall equal to the amount which equals to the 24.5% of shares to be acquired by MOLAP subject to the option right at earnings multiple of PaybyMe for the financial year ending December 31, 2016 plus Mandatory Capital Loan.

The movements of the financial liability on put option during the year are as follows:

	2013		2014		2015
	MYR		MYR		MYR
			(Restated, see Note 48)
At beginning of year		—		—		37,300,351
At date of acquisition		—		1,202,000		—
Put option written on non-controlling interest (Note 48)		—		32,944,082		—
Unwinding of discount and change in estimates of gross obligations (Note 11)		—		3,154,269		8,960,571
At end of year		—		37,300,351		46,260,922

38. PENSION LIABILITIES

The Group has a funded, non-contributory defined benefit and actuarially computed pension plan, covering substantially all permanent employees of five of its subsidiaries. The defined benefit plans are administered by an Investment Manager and/or Trustee bank.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at December 31, 2015. The present value of the defined benefit obligation, and the related current year service cost and past service cost, were measured using the Projected Unit Credit method.

F-138

The principal assumptions used for the purposes of the actuarial valuations were as follows:

	Valuation at December 31
	2013			2014	2015
Discount rate		4.5	%	3.3%-8.5%	3.4%-9.3%
Expected rate of salary increase		4.0	%	2.0%-10.0%	3.0%-10.0%

Amounts recognized in profit or loss and other comprehensive income in respect of this defined benefit plan are as follows:

	2013		2014			2015
	MYR		MYR			MYR
Current service cost		90,400		416,113			973,935
Net interest cost on defined benefit obligation		26,017		115,483			120,152
Amortization of actuarial gain		—		(2,594	)		—
Component of defined benefit costs recognized in profit or loss		116,417		529,002			1,094,087

	2013			2014			2015
	MYR			MYR			MYR
Remeasurement on the net defined benefit liability:
Actuarial gain/(loss) due to:
Change in financial assumptions		82,050			26,041			29,748
Experience adjustments		66,260			(22,648	)		(4,539	)
Changes in demographic assumptions		13,565			—			164,410
Remeasurement loss on plan assets		(2,670	)		(629	)		(7,910	)
Components of defined benefit cost recognized in other comprehensive income		159,205			2,764			181,709

F-139

The amount included in the consolidated statements of financial position arising from the Group’s obligation in respect of its defined benefit plans is as follows:

	2013			2014			2015
	MYR			MYR			MYR
Present value of defined benefit obligation		(374,116	)		(909,295	)		(1,850,020	)
Fair value of plan assets		279,480			306,375			369,151
Pension liability		(94,636	)		(602,920	)		(1,480,869	)

Movements in the present value of the defined benefit obligation in the current year are as follows:

	2013			2014			2015
	MYR			MYR			MYR
Present value of defined benefit obligation:
At beginning of year		(423,135	)		(374,116	)		(909,295	)
Current service cost		(90,400	)		(416,113	)		(973,935	)
Interest cost		(26,017	)		(115,483	)		(120,152	)
Actuarial loss/(gain) due to:
Changes in financial assumptions		82,050			26,041			29,748
Experience adjustments		66,260			(22,648	)		(4,539	)
Effect of foreign currency translation		3,561			(32,686	)		(123,156	)
Changes in demographic assumptions		13,565			—			164,410
Amortization of actuarial gain		—			2,594			—
Benefits paid		—			23,116			86,899
At end of year		(374,116	)		(909,295	)		(1,850,020	)
Fair value of plan assets:
At beginning of year		—			279,480			306,375
Contributions made		282,150			—			—
Interest income		—			13,220			17,694
Actuarial loss on plan assets		(2,670	)		(629	)		(7,910	)
Effect of foreign currency translation		—			14,304			52,992
At end of year		279,480			306,375			369,151

F-140

The distribution of plan assets as of December 31, is as follows:

	2013			2014			2015
	MYR			MYR			MYR
Cash and cash equivalents		3.30	%		30.14	%		15.40	%
Investments in government securities		95.93	%		68.12	%		82.76	%
Accrued interest receivable		0.78	%		0.66	%		0.66	%
Expected earnings for the fourth quarter		—			1.09	%		1.19	%
Trust fee payables		(0.01	%)		(0.01	%)		(0.01	%)
At end of year		100.00	%		100.00	%		100.00	%

The carrying amounts disclosed above reasonably approximate fair values at each financial year-end.

Sensitivity analysis has been determined based on reasonably possible changes of each significant assumption on the retirement benefit obligation as of the end of reporting period, assuming all other assumptions were held constant.

			Defined benefit obligation
			MYR
Discount rate	-1.00	%		1,293,928
Salary rate	+1.00	%		1,476,106

39. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the statements of cash flows comprise the following amounts in the statements of financial position:

	2013		2014		2015
	MYR		MYR		MYR
Cash and bank balances		38,133,264		131,932,596		86,719,855
Deposits and placement with licensed financial institutions		11,596,224		18,638,209		7,342,579
Total		49,729,488		150,570,805		94,062,434

F-141

40. DEFERRED REVENUE

	2013		2014		2015
	MYR		MYR		MYR
MOLPoints		6,296,993		9,292,940		14,529,687
MOLPay		—		—		21,506
MMOG Asia		—		1,829,193		1,139,160
Others		—		—		20,339
		6,296,993		11,122,133		15,710,692

41. OPERATING LEASE COMMITMENT

The Group has entered into non-cancellable operating lease agreements for the use of office buildings.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for as of the reporting date but not recognized as liabilities are as follows:

	2013		2014		2015
	MYR		MYR		MYR
Future minimum lease payments:
Not later than 1 year		2,549,304		2,961,341		3,445,985
Later than 1 year and not later than 5 years		2,349,850		3,027,505		2,232,775
		4,899,154		5,988,846		5,678,760

42. EMPLOYEE SHARE OPTIONS SCHEME (“ESOS”)

In June 2015, the Directors resolved to cancel the share-based compensation awards. The decision was culminated by the unfavourable movement of the trading prices of the American Depositary Shares (“ADS”) and general market conditions. During the year ended December 31, 2015, the Company has recognized the entire unrecognized share-based compensation charge as an expense to profit or loss amounting to MYR85,818,430.

F-142

Prior to the cancellation, the option fair values and vesting period at inception of the share-based compensation awards were as follows:

Ordinary share options	Senior Executives Share Option Plan				General Employees Share Option Plan
Vesting Period	Number of Options		Grant Date Fair Values in USD		Number of Options		Grant Date Fair Values in USD
6 Months from Effective Date		392,649		6.37		305,943		6.11
12 Months from Effective Date		196,325		6.42		305,943		6.11
18 Months from Effective Date		—		—		305,943		6.13
24 Months from Effective Date		588,973		6.51		305,943		6.18
30 Months from Effective Date		—		—		305,943		6.22
36 Months from Effective Date		588,973		6.59		305,942		6.29
42 Months from Effective Date		—		—		305,942		6.39
48 Months from Effective Date		—		—		305,942		6.48
54 Months from Effective Date		—		—		305,942		6.56
60 Months from Effective Date		—		—		305,942		6.64
		1,766,920				3,059,425

Each employee share option converts into one ordinary share of MOL Global, Inc. when exercised. No amounts were paid or payable by the recipient on receipt of the option. The options carried neither rights to dividends nor voting rights. The option was exercisable exercised at any time after vesting to the date of their expiry.

The Group measured the fair value of goods or services received as consideration for the share option granted indirectly, by reference to the fair value of the share options granted.

In addition to the above vesting conditions, the employees also agreed not to offer, pledge, sell, contract to sell, sell any portion or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of any option shares within the shares options agreement and continuing to and including the date that was 180 days after the Initial Public Offering.

F-143

Fair value of the share options

The weighted average fair values of the share options granted were as follows:

	2013		2014		2015
	USD		USD		USD
Senior Executives Share Option Plan		—		6.50		—
General Employees Share Option Plan		—		6.31		—

The options were valued using the Monte Carlo Simulation pricing model.

Inputs to the model

	Senior Executives Share Option Plan 6,12,24 and 36 months from effective date, June 19, 2014			General Employees Share Option Plan 6,12,18,24,30,36,42,48,54 and 60 months from effective date, September 18, 2014
Grant date
Grant date ordinary share price (USD)		13.33			13.50
Exercise price (USD)		8.30			12.15
Expected life (years)		5			5
Expected volatility:
Annual equivalent		35	%		40	%
Risk-free interest rate:
Annual equivalent		1.68	%		2.61	%

The grant date ordinary share price represents the fully dilutive per share and was determined with reference to the latest transaction of the Company’s ordinary share. In February 2014, MOL Ventures Pte. Ltd. (formerly known as MOL Global Pte. Ltd.) sold 15% equity interest in the Company to Sultan Ibrahim, and on May 8, 2014, Sultan Ibrahim’s 15% equity interest in the Company was swapped into 15% interest of the Company. On May 30, 2014, the Company agreed to extinguish the aggregate outstanding principal amount and unpaid accrued interest on the Promissory Note with Javelin Venture Partners in consideration for the Company’s issuance of 65,349 shares. The grant date share price was determined on the above mentioned precedent transactions as both transactions are entered into with knowledgeable, and non-related parties, on a willing buyer and willing seller basis and such transactions were completed in a timeframe which is in close proximity with the measurement date.

F-144

The expected life used in the model was adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the profitability of meeting market conditions attached to the option), and behavioural considerations. The expected volatility was estimated based on the historical daily share price volatility of comparable companies over a historical period commensurated with the locked-up period of the option shares. Risk free rate used was based on the yield on a United States Treasury Bond as of the grant date with the tenor matching the contractual term of the share options. To allow for the effects of early exercise, it was assumed that the employees would exercise the options after vesting date when the share price is 2.8x multiplied with the exercise price. Historically, the Company have declared dividends, hence the expected dividend yield is zero.

The share-based compensation expense for employee services received recognized in the statements of profit or loss and other comprehensive income is as follows:

	2013		2014		2015
	MYR		MYR		MYR
Senior Executives Share Option Plan		—		7,602,994		33,870,745
General Employees Share Option Plan		—		8,067,295		51,947,685
Recognized in the statements of profit or loss and other comprehensive income		—		15,670,289		85,818,430
Foreign exchange difference		—		63,817		—
Recognized in statements of changes in equity		—		15,734,106		85,818,430

The total amount of unrecognized share-based compensation expense related to the grants is as follows:

	2013		2014		2015
	MYR		MYR		MYR
Senior Executives Share Option Plan		—		32,474,135		—
General Employees Share Option Plan		—		53,186,070		—
		—		85,660,205		—

F-145

The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movement of ordinary share options during the year:

	2014			2015			2014
	Number			Number			WAEP
							MYR
Outstanding at January 1		—			1,766,920			—
Senior Executives Share Option Plan		1,766,920			—			29.00
Senior Executives Share Option Plan (forfeited)		—			(58,897	)
Cancellation of plan		—			(1,708,023	)
Outstanding at December 31		1,766,920			—
Outstanding at January 1		—			2,780,630
General Employees Share Option Plan		3,059,425			—			39.31
Reversed due to resignation		—			(112,374	)
General Employees Share Option Plan (forfeited)		(278,795	)		(129,499	)		39.31
Cancellation of plan		—			(2,538,757	)
Outstanding at December 31		2,780,630			—
Total		4,547,550			—			56.40

The weighted average remaining contractual life for the ordinary share options outstanding as of December 31, 2014 was 7.94 years.

F-146

43. BUSINESS COMBINATIONS

43.1 Acquisitions of subsidiaries

As disclosed in Note 17, the subsidiaries acquired by the Group during the financial year ended December 31, 2013 and 2014 were as follows:

Name of Subsidiaries	Date of Acquisition	Proportion of ownership interest and voting power held			Purchase Consideration
					MYR
2013
MOL Turkey and GameSultan	19.02.2013		70.00	%		65,018,564
Nganluong	01.03.2013		50.00	%		15,641,250
MOLCube	01.04.2013		85.30	%		100,000
MMOG Thai	01.01.2013		49.00	%		49,000
						80,808,814
2014
Easy2Pay	06.05.2014		60.00	%		6,046,178
PaybyMe	15.09.2014		51.00	%		30,282,121
MOL Wallet	28.04.2014		100.00	%		2
						36,328,301

F-147

43.2 Considerations transferred and goodwill arising on acquisitions

	MOL Turkey and GameSultan			Nganluong			MOLCube			MMOG Thai			Total
	MYR			MYR			MYR			MYR			MYR
2013
Cash paid		41,894,437			15,641,250			100,000			—			57,635,687
Non-cash considerations		23,124,127			—			—			49,000			23,173,127
Total purchase considerations		65,018,564			15,641,250			100,000			49,000			80,808,814
Non-controlling interests		8,500,537			5,224,888			(12,706	)		40,934			13,753,653
Fair value of identifiable net (assets)/ liabilities acquired (Note 43.3)		(28,335,119	)		(10,449,776	)		86,435			(89,934	)		(38,788,394	)
Goodwill arising on acquisitions (Note 21)		45,183,982			10,416,362			173,729			—			55,774,073

F-148

	Easy2Pay			PaybyMe			MOL Wallet		Total
	MYR			MYR			MYR		MYR
2014
Cash paid		6,046,178			29,080,121			2		35,126,301
Non-cash considerations		—			1,202,000			—		1,202,000
Total purchase considerations		6,046,178			30,282,121			2		36,328,301
Non-controlling interests		2,437,361			6,344,182			—		8,781,543
Fair value of identifiable net (assets)/liabilities acquired (Note 43.3)		(6,062,278	)		(12,947,310	)		17,962		(18,991,626	)
		2,421,261			23,678,993			17,964		26,118,218
Goodwill arising on acquisitions (Note 21)		2,421,261			23,678,993			—		26,100,254
Bargain purchase gain arising on acquisition (Note 12)		—			—			17,964		17,964
		2,421,261			23,678,993			17,964		26,118,218

F-149

The interest of non-controlling shareholders recognized at the acquisition date was measured at the non-controlling interests’ proportionate share of the fair value of the acquirees’ identifiable net assets.

Goodwill arose in the acquisitions of these subsidiaries because the cost of combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce of these subsidiaries. These benefits were not separately recognized from goodwill because they did not meet the recognition criteria for identifiable intangible assets.

The initial accounting for the above business combinations was incomplete at the end of the reporting period and subject to the finalization by management. Those provisional amounts were adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognized as of that date.

The measurement period was the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date and was subject to a maximum of one year.

F-150

43.3 Fair value of assets acquired and liabilities assumed at the date of acquisitions

	MOL Turkey and GameSultan MYR			Nganluong MYR			MOLCube MYR			MMOG Thai MYR			Total MYR
2013
Non-current assets
Property, plant and equipment		255,991			160,404			34,028			61,033			511,456
Intangible assets		27,081,406			—			—			—			27,081,406
Current assets
Inventories		2,327,726			—			—			—			2,327,726
Trade receivables		10,588,378			796,238			—			—			11,384,616
Other receivables, deposits and prepaid expenses		373,678			1,727,032			19,999			168,216			2,288,925
Cash and bank balances		2,278,259			10,925,089			25,932			2,536			13,231,816
Non-current liabilities
Deferred tax liabilities		(6,770,352	)		—			—			—			(6,770,352	)
Current liabilities
Trade payables		(5,795,240	)		(132	)		—			—			(5,795,372	)
Other payables and accrued expenses		(1,635,916	)		(3,158,855	)		(166,394	)		(141,851	)		(5,103,016	)
Tax liabilities		(368,811	)		—			—			—			(368,811	)
Net identifiable assets/(liabilities)		28,335,119			10,449,776			(86,435	)		89,934			38,788,394

F-151

	Easy2Pay MYR			PaybyMe MYR			MOL Wallet MYR			Total MYR
2014
Non-current assets
Property, plant and equipment		104,358			86,069			75,650			266,077
Intangible assets		4,189,089			11,671,082			—			15,860,171
Deferred tax assets		—			11,562			—			11,562
Current assets
Inventories		—			100,965			—			100,965
Trade receivables		5,316,801			6,980,139			—			12,296,940
Other receivables, deposits and prepaid expenses		1,096,099			2,150,568			—			3,246,667
Cash and bank balances		7,418,421			6,764,130			—			14,182,551
Non-current liabilities
Deferred tax liabilities		(837,818	)		(2,966,604	)		—			(3,804,422	)
Current liabilities
Trade payables		(7,661,363	)		(8,248,031	)		—			(15,909,394	)
Other payables and accrued expenses		(3,331,542	)		(100,783	)		—			(3,432,325	)
Amount due to other related parties		—			—			(93,612	)		(93,612	)
Deferred revenue		—			(3,116,578	)		—			(3,116,578	)
Tax liabilities		(231,767	)		(385,209	)		—			(616,976	)
Net identifiable assets/(liabilities)		6,062,278			12,947,310			(17,962	)		18,991,626

F-152

43.4 Net cash outflow on acquisitions of subsidiaries

	MOL Turkey and GameSultan MYR			Nganluong MYR			MOLCube MYR			MMOG Thai MYR		Total MYR
2013
Considerations paid in cash		(41,894,437	)		(15,641,250	)		(100,000	)		—		(57,635,687	)
Cash and cash equivalents acquired		2,278,259			10,925,089			25,932			2,536		13,231,816
Net cash inflow/(outflow) on acquisitions		(39,616,178	)		(4,716,161	)		(74,068	)		2,536		(44,403,871	)

	Easy2Pay MYR			PaybyMe MYR			MOL Wallet MYR			Total MYR
2014
Considerations paid in cash		(6,046,178	)		(29,080,121	)		(2	)		(35,126,301	)
Cash and cash equivalents acquired		7,418,421			6,764,130			—			14,182,551
Net cash inflow/(outflow) on acquisitions		1,372,243			(22,315,991	)		(2	)		(20,943,750	)

F-153

43.5 Impact of acquisitions on the results of the Group

The acquired subsidiaries have contributed the following results to the Group during the financial year:

2013

	MOL Turkey MYR		GameSultan MYR		Nganluong MYR		MOLCube MYR			MMOG Thai MYR
Revenue		13,021,563		10,154,095		7,062,561		—			261,603
Profit/(Loss) for the year		1,218,615		5,845,338		658,384		(425,363	)		(239,731	)

2014

	Easy2Pay MYR		PaybyMe MYR		MOL Wallet MYR
Revenue		7,219,764		12,589,741		—
Profit/(Loss) for the year		1,369,662		537,614		(135,427	)

F-154

If the acquisitions had occurred on January 1, 2013, the Group’s results for the current financial year would have been as follows:

	MOL Turkey MYR		GameSultan MYR		Nganluong MYR		MOLCube MYR		MMOG Thai MYR
Revenue		173,754,280		173,315,304		172,559,653		171,518,303		171,518,303
Profit for the year		18,076,870		19,295,456		18,640,597		18,557,526		18,672,525

If the acquisition has occurred on January 1, 2014, the Group’s results for the current financial year would have been as follows:

	Easy2Pay MYR			PaybyMe MYR			MOL Wallet MYR
Revenue		204,312,016			233,088,663			202,713,170
Loss for the year		(17,756,216	)		(13,781,525	)		(17,921,007	)

F-155

As of December 31, 2014, the Group was undergoing an exercise to determine the fair values to be assigned to identifiable assets, liabilities and contingent liabilities (if any) pursuant to the requirements on IFRS 3 Business Combinations.

During the financial year, the Group completed the purchase price allocation exercise to determine the fair values assigned to PaybyMe’s identifiable assets and liabilities acquired in the previous financial year pursuant to the requirements of IFRS 3 Business Combinations. Upon finalisation of this exercise, the resulting goodwill on consolidation was adjusted accordingly as follows:

	Fair value MYR			Provisional fair value MYR			Fair value adjustments MYR
Cash considerations paid		29,080,121			29,080,121			—
Non-cash consideration		1,202,000			1,202,000			—
Non-controlling interests		6,228,893			6,344,182			(115,289	)
		36,511,014			36,626,303			(115,289	)
Property, plant and equipment		86,069			86,069			—
Intangible assets		11,376,979			11,671,082			(294,103	)
Deferred tax assets		11,562			11,562			—
Inventories		100,965			100,965			—
Trade receivables		14,711,005			6,980,139			7,730,866
Other receivables, deposits and prepaid expenses		2,150,568			2,150,568			—
Cash and bank balances		6,764,130			6,764,130			—
Deferred tax liabilities		(2,907,784	)		(2,966,604	)		58,820
Trade payables		(17,218,122	)		(8,248,031	)		(8,970,091	)
Other payables and accrued expenses		(100,783	)		(100,783	)		—
Deferred revenue		(3,116,578	)		(3,116,578	)		—
Tax liabilities		(385,209	)		(385,209	)		—
Net assets		11,472,802			12,947,310			(1,474,508	)
Goodwill/Provisional goodwill arising from acquisition (Note 21)		25,038,212			23,678,993			1,359,219

Significant management judgement was involved in determining the fair value of these identifiable assets and liabilities based on acceptable valuation procedures and practices that rely on the use of numerous reasonable assumptions.

F-156

44. DISPOSAL OF A SUBSIDIARY

On March 11, 2014, the Group disposed of Gamebox Sdn. Bhd. which carried out the wholesale and distribution of computer software & computer games.

44.1 Consideration received

	2014 MYR
Consideration received in cash and cash equivalents		600,000

44.2 Analysis of assets and liabilities over which control was lost

	2014 MYR
Non-current asset
Property, plant and equipment		90,008
Current assets
Inventories		502,078
Trade receivables		376,437
Other receivables, deposits and prepaid expenses		81,631
Amount due by holding company		22,291
Amount due by other related parties		2,000
Cash and bank balances		253,771
Current liabilities
Trade payables		(104,500	)
Other payables and accrued expenses		(68,072	)
Amount due to holding company		(203,161	)
Amount due to other related parties		(49,201	)
Net assets disposed of		903,282

F-157

44.3 Gain on disposal of a subsidiary

	2014 MYR
Consideration received in cash and cash equivalents		600,000
Net assets disposed of		(903,282	)
Total		(303,282	)
Goodwill on consolidation (Note 21)		(50,083	)
Non-controlling interests disposed of		440,802
Gain on disposal of a subsidiary (Note 12)		87,437

44.4 Net cash inflows on disposal of a subsidiary

	2014 MYR
Consideration received in cash and cash equivalents		600,000
Less: Cash and cash equivalents disposed of		(253,771	)
Net cash inflow on disposal		346,229

45. FINANCIAL INSTRUMENTS

45.1 Capital Risk Management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders.

The Group monitors and reviews its capital structure based on their business and operating requirements.

There were no changes in the Group’s approach to capital management during the years presented.

45.2 Significant Accounting Policies

Details of the significant accounting policies and methods adopted for each class of financial assets, financial liabilities and equity instruments are disclosed in Note 3.

F-158

45.3 Categories of Financial Instruments

	2013 MYR		2014 MYR		2015 MYR
			(Restated, see Note 48)
Financial Assets
Available-for-sale financial assets (Note 24)		—		806,627		—
Loans and receivables:
Trade receivables (Note 26)		33,820,107		58,300,667		104,105,339
Other receivables and deposits (Note 27)		8,786,805		12,551,454		57,993,943
Finance lease receivables (Note 22)		572,377		558,668		459,427
Amount due from associates (Note 28)		216,848		—		—
Amount due from other related parties (Note 28)		584,951		959,623		3,843,339
Cash and bank balances and restricted cash (Note 29)		54,561,923		184,963,464		137,622,956
Total loans and receivables		98,543,011		258,140,503		304,025,004
Financial Liabilities
Financial liabilities at FVTPL:
Derivative financial liabilities (Note 36)		26,164,107		—		—
Other financial liabilities:
Trade payables (Note 34)		48,009,555		82,342,742		124,576,775
Other payables (Note 35)		19,912,049		19,498,352		59,889,749
Financial liability on in-substance forward (Note 37)		—		37,300,351		46,260,922
Amount due to other related parties (Note 28)		30,747,913		602,486		1,175,153
Borrowings (Note 32)		73,014,866		55,734,044		17,789,506
Total financial liabilities		197,848,490		195,477,975		249,692,105

F-159

45.4 Financial Risk Management Objectives and Policies

The Group’s financial risk management policies seek to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest rate, foreign exchange, liquidity and credit risks.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Group’s exposure to changes in interest rates relates primarily to the Group’s deposits with banks and interest bearing debt obligations. The Group does not use derivative financial instruments to hedge its risk but regularly reviews its debt portfolio to enable it to source low interest funding. The Group’s deposits are placed at fixed rates and management endeavours to obtain the best rate available in the market.

Sensitivity analysis for interest rate risk

At December 31, 2015, if interest rates had been 50 basis points lower/higher, with all other variables held constant, the Group’s post-tax loss for the financial year would have been MYRNil (2014: MYR98,455; 2013: MYR107,259) higher/lower, arising mainly as a result of lower/higher finance costs on floating rate borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on a prudent estimate of the current market environment.

(ii) Foreign exchange risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Exchange rate exposures are managed within the approved policy parameters.

The Group undertakes certain transactions denominated in foreign currencies where the amounts outstanding are exposed to foreign currency risk. The Group monitors its foreign exchange exposure on an ongoing basis and is managed within approved policy parameters.

F-160

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities that are not in respective subsidiaries’ functional currency at the end of the reporting period are as follows:

Assets The Group		Trade and other receivables, deposits, excluding prepaid expenses MYR			Cash and bank balances MYR			Total exposure MYR
2013
Functional currency	Foreign currency
RM	SGD		95,750			2,858			98,608
RM	USD		562,965			79,450			642,415
RM	VND		—			1,460			1,460
RM	EUR		16,831			92,298			109,129
RM	HKD		—			1,525			1,525
Liabilities The Group		Trade and other payables, excluding accrued expenses MYR			Derivative financial liability MYR			Total exposure MYR
2013
Functional currency	Foreign currency
RM	INR		(8,352	)		—			(8,352	)
RM	PHP		(400	)		—			(400	)
RM	SGD		21,731			—			21,731
RM	TRY		—			(26,164,107	)		(26,164,107	)
RM	USD		(7,672,899	)		—			(7,672,899	)
RM	GBP		(3,225	)		—			(3,225	)
THB	RM		9,758,568			—			9,758,568

F-161

Assets The Group 2014		Trade and other receivables, deposits, excluding prepaid expenses MYR		Cash and bank balances MYR		Amount due from other related parties MYR		Total exposure MYR
Functional currency	Foreign currency
RM	PHP		9,341		—		—		9,341
RM	SGD		154,780		154,684		73,953		383,417
RM	THB		73,953		74,886		15,217		164,056
RM	USD		1,472,096		1,583,373		—		3,055,469
RM	VND		—		545		—		545
RM	EUR		68,082		130,565		—		198,647
RM	HKD		—		2,602		—		2,602
IDR	USD		—		3,255		—		3,255
THB	RM		608,814		1,188,115		—		1,796,929
THB	USD		—		—		144,072		144,072
PHP	USD		—		35,443		—		35,443
AUD	NZD		31,075		—		—		31,075
VND	USD		—		4,316		—		4,316
TRY	USD		85,390		1,017		—		86,407
TRY	EUR		21,787		34		—		21,821

F-162

Liabilities The Group 2014		Trade and other payables, excluding accrued expenses MYR			Amount due to other related parties MYR			Financial liability on in- substance forward MYR			Total exposure MYR
Functional currency	Foreign currency
RM	AUD		(13,373	)		—			—			(13,373	)
RM	IDR		(178,077	)		—			—			(178,077	)
RM	INR		(7,376	)		—			—			(7,376	)
RM	PHP		(63,047	)		—			—			(63,047	)
RM	SGD		(49,238	)		(37,959	)		—			(87,197	)
RM	THB		(178,217	)		—			—			(178,217	)
RM	TRY		(1,797	)		—			(37,300,351	)		(37,302,148	)
RM	USD		(5,742,738	)		—			—			(5,742,738	)
RM	VND		(2,933	)		—			—			(2,933	)
RM	HKD		(2,692	)		—			—			(2,692	)
RM	NZD		(43	)		—			—			(43	)
THB	RM		(1,848,715	)		—			—			(1,848,715	)
THB	USD		(21,455	)		—			—			(21,455	)
TRY	USD		(610,312	)		—			—			(610,312	)
TRY	EUR		(512,313	)		—			—			(512,313	)

F-163

Assets The Group 2015		Trade and other receivables, deposits, excluding prepaid expenses MYR		Cash and bank balances MYR		Amount due from other related parties MYR		Total exposure MYR
Functional currency	Foreign currency
RM	PHP		7,365		493,351		—		500,716
RM	SGD		82,052		49,607		1,890,457		2,022,116
RM	THB		85,719		647,880		13,138		746,737
RM	USD		1,148,700		36,149,823		—		37,298,523
RM	EUR		63,565		146,562		—		210,127
RM	HKD		4,023		1,665		—		5,688
IDR	USD		2		34,965		—		34,967
THB	RM		—		812		—		812
THB	USD		682,798		—		111,140		793,938
PHP	USD		—		99,656		—		99,656
USD	BLR		829,603		1,316,112		—		2,145,715
AUD	USD		14,982		—		—		14,982
AUD	NZD		—		78,178		—		78,178
VND	USD		—		338		—		338
SGD	USD		—		65,540		—		65,540
TRY	USD		193,748		705,588		—		899,336
TRY	EUR		117,171		173,167		—		290,338
TRY	AED		1,149,573		—		—		1,149,573
TRY	BHD		147,008		—		—		147,008
TRY	EGP		3,589,046		—		—		3,589,046
TRY	IQD		392,341		—		—		392,341
TRY	JOD		480		—		—		480
TRY	KWD		572,819		156,405		—		729,224
TRY	OMR		344,135		—		—		344,135
TRY	QAR		477,505		—		—		477,505
TRY	SAR		5,866,149		—		—		5,866,149
TRY	TND		8,477		—		—		8,477

F-164

Liabilities The Group 2015		Trade and other payables, excluding accrued expenses MYR			Amount due to other related parties MYR			Financial liability on in- substance forward MYR			Total exposure MYR
Functional currency	Foreign currency
RM	AUD		(77,214	)		—			—			(77,214	)
RM	IDR		(151,003	)		—			—			(151,003	)
RM	INR		(8,665	)		—			—			(8,665	)
RM	PHP		(313,246	)		—			—			(313,246	)
RM	SGD		(456,191	)		(4,760	)		—			(460,951	)
RM	THB		(61,112	)		—			—			(61,112	)
RM	TRY		3,846,859			—			(46,260,922	)		(42,414,063	)
RM	USD		(3,641,661	)		—			—			(3,641,661	)
RM	VND		(207,364	)		—			—			(207,364	)
RM	NTD		(111,865	)		—			—			(111,865	)
RM	BRL		(22,772	)		—			—			(22,772	)
RM	EUR		(47,022	)		—			—			(47,022	)
RM	HKD		(5,605	)		—			—			(5,605	)
RM	NZD		(17,352	)		—			—			(17,352	)
THB	PHP		(24,492	)		—			—			(24,492	)
THB	EUR		(1,870	)		—			—			(1,870	)
THB	USD		(571,022	)		—			—			(571,022	)
PHP	USD		(742,216	)		—			—			(742,216	)
USD	BLR		(28,536	)		—			—			(28,536	)
USD	SGD		—			(65,457	)		—			(65,457	)
TRY	USD		(710,408	)		—			—			(710,408	)
TRY	EUR		(588,465	)		—			—			(588,465	)
TRY	AED		(885,505	)		—			—			(885,505	)
TRY	BHD		(64,687	)		—			—			(64,687	)
TRY	EGP		(2,253,050	)		—			—			(2,253,050	)
TRY	IQD		(269,057	)		—			—			(269,057	)
TRY	JOD		(11,534	)		—			—			(11,534	)
TRY	KWD		(273,183	)		—			—			(273,183	)
TRY	OMR		(206,580	)		—			—			(206,580	)
TRY	QAR		(165,621	)		—			—			(165,621	)
TRY	SAR		(4,192,761	)		—			—			(4,192,761	)
TRY	TND		(7,181	)		—			—			(7,181	)

F-165

Group’s foreign currency sensitivity

5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates.

If the MYR strengthened/weakened by 5% against the foreign currencies with all other variables held constant, the Group’s post-tax profit for the financial year would have been MYR34,494 (2014: MYR2,031,662; 2013: MYR1,160,777) lower/higher.

The above sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the year-end exposure does not reflect the exposure during the year.

(iii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s exposure to liquidity risk arises from mismatches of the maturities of financial assets and liabilities. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans and finance lease agreements.

The Group’s holding of cash and short-term deposits, together with committed funding facilities and net cash flow from operations, are expected to be sufficient to cover its cash flow needs.

The Group financed its operations by shareholders’ equity, bank borrowings, amounts due to related parties and internal financial resources. As of December 31, 2015, the Group has net current assets of MYR88,432,010 and net current assets of MYR115,438,953 as of December 31, 2014 and net current liabilities of MYR77,713,061 as of December 31, 2013. The Group has implemented a number of measures to mitigate the liquidity risk. Taking into account further advances from the related parties or shareholders as well as the estimated future cash inflows from the Group’s operations. The Directors are of the view that the Group will have sufficient positive cash flows to support the Group to operate on a going concern basis for at least the next twelve months from the end of the reporting period. Accordingly, the Directors believe that the Group has the ability to continue with its current line of business and meet its other financial obligations. Hence, the consolidated financial statements have been prepared on a going concern basis.

F-166

The table below summarizes the maturity profile of the Group’s financial liabilities as at the reporting date. The table was prepared based on the undiscounted cash flows on financial liabilities on the basis of the earliest date at which the Group can be required to pay. The table includes both interest and principal cash flows.

	Weighted average effective interest rate %	On demand or within 1 year MYR		Within 2 to 5 years MYR		After 5 years MYR		Total MYR		Carrying amount MYR
2013
Non-interest bearing	—		124,833,624		—		—		124,833,624		124,833,624
Variable interest rate instruments	7.63% - 7.88%		220,167		595,512		1,439,752		2,255,431		2,145,185
Fixed interest rate instruments	2.59% - 7.25%		74,394,544		1,485,488		—		75,880,032		70,869,681
			199,448,335		2,081,000		1,439,752		202,969,087		197,848,490
2014
Non-interest bearing	—		102,443,580		37,300,351		—		139,743,931		139,743,931
Variable interest rate instruments	7.40% - 7.88%		206,097		822,685		1,752,670		2,781,452		1,969,102
Fixed interest rate instruments	2.59% - 7.25%		56,423,172		1,237,359		—		57,660,531		53,764,942
			159,072,849		39,360,395		1,752,670		200,185,914		195,477,975
2015
Non-interest bearing	—		205,500,142		26,402,457		—		231,902,599		231,902,599
Fixed interest rate instruments	2.59% - 10.00%		17,231,259		2,367,693		—		19,598,952		17,789,506
			222,731,401		28,770,150		—		251,501,551		249,692,105

F-167

(iv) Credit risk

Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Group. Credit risk with respect to trade and other receivables is managed through the application of credit approvals, credit limits and monitoring procedures. Credit is extended to the customers based upon careful evaluation of the customers’ financial condition and credit history. Surplus funds are placed with licensed financial institutions to minimize the risk that the counterparties will fail in performing their obligation.

The Group has significant concentration of credit risk from its affiliate amounting to MYR23,830,401 (2014: MYR14,030,525; 2013: MYR3,015,095).

The maximum credit exposure of the Group, without taking into account the fair value of any collateral, is represented by its carrying amounts of financial assets.

(v) Other price risk

The Group is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

Equity price sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 5% higher/lower:

• Profit for the year ended December 31, 2015 would have been unaffected as the equity investments are classified as available-for-sale; and

• Other comprehensive income for the year ended December 31, 2015 would increase/decrease by MYRNil (2014: MYR40,331; 2013: MYRNil) as a result of the changes in fair value of available-for-sale financial assets.

F-168

(vi) Fair Values

The fair values of financial instruments refer to the amounts at which the instruments could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction. Fair values have been arrived at based on prices quoted in an active, liquid market or estimated using certain valuation techniques such as discounted future cash flows based upon certain assumptions. Amounts derived from such methods and valuation techniques are inherently subjective and therefore do not necessarily reflect the amounts that would be received or paid in the event of immediate settlement of the instruments concerned.

On the basis of the amounts estimated from the methods and techniques as mentioned in the preceding paragraph, the carrying amount of the various financial assets and financial liabilities reflected on the statements of financial position approximate their fair values.

The methodologies used in arriving at the fair values of the principal financial assets and financial liabilities of the Group are as follows:

• Cash and cash equivalents, trade and other receivables, amount due from associates, amount due from related parties, trade and other payables and short-term borrowings: The carrying amounts are considered to approximate the fair values as they are either within the normal credit terms or they have short-term maturity period.

• Non-current finance receivables: The fair value represents a present value of discounted estimated future cash flows with the use of market rates effective at the end of reporting period.

• Available-for-sale financial assets: Marketable securities quoted in an active market are carried at market value.

• Derivative instruments: The fair values of the derivative financial liabilities were estimated using Monte Carlo or Trinomial Option Pricing Simulation method.

• Long-term borrowings: The fair values of long-term borrowings are determined by estimating future cash flows on a borrowing-by-borrowing basis, and discounting these future cash flows using an interest rate which takes into consideration the Group’s incremental borrowing rate at year end for similar types of debt arrangements.

F-169

As of December 31, 2013, 2014 and 2015, the fair value of financial assets and financial liabilities were not significantly different from their carrying value.

Fair value measurements recognized in the statements of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

2013	Level 1		Level 2		Level 3		Total
	MYR		MYR		MYR		MYR
Financial liabilities at FVTPL
Derivative financial liability		—		—		26,164,107		26,164,107

2014	Level 1		Level 2		Level 3		Total
	MYR		MYR		MYR		MYR
					(As restated, See Note 48)
Financial assets at FVTPL
Available-for-sale financial assets		806,627		—		—		806,627
Financial liabilities at FVTPL
Derivative financial liability		—		—		—		—

F-170

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy:

	2013		2014			2015
	MYR		MYR			MYR
			(As restated, See Note 48)
As of January 1		—		26,164,107			—
Acquisition of subsidiaries (Note 43)		23,124,127		—			—
Exercise of put options (Note 36)		—		(22,428,031	)		—
Derivative fair value adjustment (Note 12)		3,039,980		(3,736,076	)		—
As of December 31		26,164,107		—			—

F-171

Fair value of the Group’s financial instruments that are measured at fair value on a recurring basis

The Group’s derivative is measured at fair value at the end of each reporting period. The following table gives information about how the fair value of the financial liability is determined (in particular, the valuation technique and inputs used).

Financial instruments	Fair value						Fair value	Valuation technique and key	Significant unobservable	Relationship of unobservable inputs
	2013		2014		2015		hierarchy	inputs	inputs	to fair value
	MYR		MYR		MYR
MOL Turkey and GameSultan - Put option (Note 36)		26,164,107		—		—	Level 3	Monte Carlo Simulation method	Share price, correlation in share price, revenue multiple and gross profit multiple	Higher positive correlation between revenue multiple, gross profit multiple and share price, lower the value of option

If the above unobservable inputs to the valuation model of put option were 5% higher/lower, the carrying amount of the put option would increase/decrease by approximately MYRNil (2014: MYRNil; 2013: MYR1,247,000).

F-172

46. CONTINGENCIES

Between November 24, 2014 and December 2, 2014, three putative class actions were commenced against, among others, MOL Global, Inc. (‘MOL’) and certain of its officers and directors, in the United States District Court for the Southern District of New York captioned Freedman v. MOL Global, Inc., et al., 14 CV 9357 (WHP), Grodko v. MOL Global, Inc., et al., 14 CV 9397 (WHP) and Jewell v. MOL Global, Inc., et al., 14 CV 9493 (WHP). Each asserts claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of investors who acquired MOL American Depository Shares (‘ADSs’) between October 9, 2014 and November 20, 2014, and/or who acquired ADSs pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with MOL’s October 9, 2014 initial public offering. The Freedman and Grodko actions also assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

On December 22, 2014, plaintiffs voluntary dismissed the Grodko action. Motions for lead plaintiff were due on or about January 23, 2015.

On May 8, 2015, the Court consolidated the actions and appointed Lead Plaintiff and Lead Counsel. A consolidated complaint was filed on July 7, 2015 and a second consolidated amended complaint was filed on October 7, 2015. The Company’s motion to dismiss the second consolidated amended complaint was fully briefed as of December 21, 2015.

The parties entered into a stipulation and settlement agreement dated April 11, 2016 to dismiss all claims with prejudice. The settlement is subject to court approval. A motion for preliminary approval of the settlement agreement was filed with the Court on April 12, 2016.

F-173

47. SIGNIFICANT EVENT SUBSEQUENT TO THE END OF THE REPORTING PERIOD

As a result of continuous trading price below USD1, on April 13, 2016, the Company announced its intention to allow its American Depositary Shares (“ADSs”) to be delisted from the NASDAQ Global Select Market (“NASDAQ”) and voluntarily effect deregistration under the Securities Exchange Act of 1934, as amended.

Following delisting, the Company’s ADSs may be quoted on the Over-The-Counter (‘OTC’) Market Group’s OTC Pink marketplace, an electronic quotation service for over-the-counter securities.

Upon deregistration, the Company will no longer be subject to the requirements of the Exchange Act so long as the Company continues to have fewer than 300 holders of record.

F-174

48. PRIOR YEAR ADJUSTMENTS

As disclosed in Note 37, MOLAP is required to recognize a gross obligations for the present value of the redemption amount of the Put Option because the Sellers have the right to require MOLAP to pay the counterparty cash or another financial asset in exchange for the Option Shares.

The total gross obligations and unwinding of discount and change in estimates of gross obligations that should be recognized in the consolidated financial statements of the Group as of and for the year ended December 31, 2014 was MYR37,300,351 and MYR3,154,269 respectively. Accordingly, a restatement has been made to the financial statements for the year ended December 31, 2014 and the following accounts have been restated:

	As previously reported			Prior year adjustment			As restated
	MYR			MYR			MYR
The Group
As of December 31, 2014
Statement of financial position:
Put option written on non-controlling interest		—			(32,944,082	)		(32,944,082	)
Accumulated losses		(82,296,835	)		(3,154,269	)		(85,451,104	)
Derivative financial liability		1,202,000			(1,202,000	)		—
Financial liability on in-substance forward		—			(37,300,351	)		(37,300,351	)
For the year ended December 31, 2014
Statement of profit or loss and other comprehensive income:
Finance costs		(5,987,252	)		(3,154,269	)		(9,141,521	)
Loss for the year		(17,905,945	)		(3,154,269	)		(21,060,214	)
Total comprehensive loss for the year		(7,191,266	)		(3,154,269	)		(10,345,535	)
Loss per share – basic/diluted (sen)		(35.28	)		(5.16	)		(40.44	)

49. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Board of Directors and authorized for issue on April 27, 2016.

F-175