Extracted from Annual Report 2007

Dear Shareholders:

On behalf of the Board of Directors of GHL Systems Berhad (“GHL Systems”), I am pleased to present to you the 2007 Annual Report and the audited accounts of the Group and Company for the financial year ended 31 December 2007 (“FY2007”).

Business Environment

Thee year under review was one of global economic uncertainties, brought about by rising prices of commodities and the fear of a possible recession in the USA, the world's largest and most influential economy. On the back of this unfavourable business sentiment worldwide, the global market in effect saw the contraction of liquidity, compounded by the worsening credit crunch faced by major financial institutions. Accordingly, consumers and businesses in the countries where the Group has presence in took on a more cautious outlook on spending towards the later part of the year. In the domestic scene, the fears of inflation gripped the sentiment of the local consumers. Nevertheless, the economy remained largely robust, with the country's Gross Domestic Product registering a commendable growth rate of 6.0%. The payment solutions industry saw the entry of numerous local players who engaged in competitive pricing to gain market penetration. However, the industry still saw an increase in terminalisation, with more merchants beginning to offer cashless mode of payment.

Financial Performance

Operating under such challenging environment, theSTATUS OF UTILIZATION OF PROCEEDS FROM TWO-Group managed to sustain its top line, with groupCALL RIGHTS ISSUErevenues rising 7.2% to RM51.34 million in FY2007,The Group's Two-Call Rights Issue exercise which wascompared with RM47.91 million previously. The growthcompleted in October 2005 raised RM16.34 million inis commendable given the stiff competition in theproceeds. As at 31 March 2007, the proceeds had beenlocal market and volatile geographical developmentfully utilized, with RM15.79 million for working capitalin the region. It is noteworthy that despite the weakerand RM0.55 million for listing expenses.regional market sentiment, the Group's overseasrevenues rose significantly, contributing 38.3% of theCORPORATE DEVELOPMENTSGroup's revenue in the year under review from 13.9%in the preceding year. Indeed, this creditable initialOn 9 October 2007, the Group acquired a 48% stakeperformance in our overseas operations justifies thein Card Pay Sdn Bhd ("Card Pay") for consideration ofGroup's move to venture into the region.

In spite of the sustained revenue, the Group turnedCard Pay enables e-Debit transactions as part of thein net profit of RM0.85 million, compared to RM9.07Group's comprehensive payment services. The Groupmillion recorded in the previous year. In addition tobelieves that this segment holds much potential forthe higher operating expenses, the Group's bottomgrowth given the initiatives to attract its usage in theline was impacted by the continued investments in ourcountry.regional operations, in line with building the Group'sfuture income streams.

Shareholders' equity stood at RM91.93 million as at 31shares in associated company ­ MobilityOne Limited,December 2007, compared with RM90.60 million inwhich saw GHL Systems gaining RM2.26 million fromthe previous financial year. Share capital increased tothe sale.RM69.43 million from RM62.48 million, as a result ofthe 1-for-10 Bonus Issue undertaken in June last yearThe year under review also saw the Group continuingand the exercise of options under the Employees' Shareits sizable investments into its regional offices inOptions Scheme.

For the year under review, while total borrowingsopportunities in these countries. Going forward, theincreased to RM9.98 million from RM4.98 millionGroup looks to establish itself as a leading integratedpreviously, the Group's cash balances stood at a healthypayment solutions provider in Asia Pacific.level of RM25.49 million as at end-2007. Accordingly,the Group has sufficient working capital to undertakeour growth strategies.

At the forthcoming Annual General Meeting, a finalshare dividend on the basis of one new ordinary sharefor every one hundred existing ordinary shares held asat 31 March 2008 in respect of the financial year ended31 December 2007 by way of utilisation of the retainedprofits will be proposed for shareholders' approval.The financial statements for the current financial yeardo not reflect this proposed dividend which will beaccrued as a liability in the financial year ending 31December 2008 when approved by shareholders.

Status Of Utilization Of Proceeds From Two Call Rights Issue

The Group's Two-Call Rights Issue exercise which was completed in October 2005 raised RM16.34 million in proceeds. As at 31 March 2007, the proceeds had been fully utilized, with RM15.79 million for working capital and RM0.55 million for listing expenses.

Corporate Developments

On 9 October 2007, the Group acquired a 48% stake in Card Pay Sdn Bhd ("Card Pay") for consideration of RM80,000, making it a wholly-owned subsidiary of GHL Systems. As a third party acquirer for MEPS e-Debit, Card Pay enables e-Debit transactions as part of the Group's comprehensive payment services. The Group believes that this segment holds much potential for growth given the initiatives to attract its usage in the country.

In a move to focus on our core business, the Group during the year divested the interest of 3.2 million shares in associated company MobilityOne Limited, which saw GHL Systems gaining RM2.26 million from the sales.

The year under review also saw the Group continuing its sizable investments into its regional offices in Thailand, Philippines, and China. The Board believes that these investments are necessary to tap into the vast opportunities in these countries. Going forward, the Group looks to establish itself as a leading integrated payment solutions provider in Asia Pacific.

Strategies

Moving forward, we will steer our growth with thefollowing three strategies.

To begin with, the Group will undertake furtherinvestments in the overseas markets with a view toThe Board is committed to incorporating good corporatecreate future income streams, having witnessed thegovernance practices into the overall business directioninitial success of the investments thus far. The Boardand management of the Company and its subsidiaries,has decided to continue with this market developmentin compliance with the Best Practices of the Malaysianstrategy to ensure long-term sustainability of the Group.Code of Corporate Governance. Such measures areAnd in due time, the Group aspires for foreign revenuedetailed in the Corporate Governance Statement in thisto be equal with that of the local contributions.

Meanwhile, the Group will intensify marketing effortsand campaigns by continuing to participate in globalACKNOWLEDGEMENTexhibitions and trade activities, to further cement itsreputation as a global player. Furthermore, the GroupOn behalf of the Board of Directors, I would like towill devote efforts on broadening our customer baseacknowledge the management team and all ourthrough the extension of our distribution channels, andemployees at GHL Systems for their dedication toestablishment of mutually-beneficial partnerships withdriving the Group forward.other related businesses such as telecommunicationsplayers.

Lastly, the Group is committed to Research &Mr. Angus Eugenio Campos, who was appointed asDevelopment ("R&D") activities to develop and enhanceIndependent Non-Executive Director on 17 March 2008.the range of payment solutions, as well as sustain ourWe believe that he is adequately proficient to contributepipeline of new and award-winning innovations. We areto the Group's business growth in the future.cognizant that this emphasis on R&D is the key factorin ensuring continual and fundamental growth of theI would also like to record my appreciation to TunkuGroup, as well as creating the competitive edge to faceDato' Abdul Malek bin Tunku Kassim, who resigned fromthe increasing competition.

Corporate Social Responsibility ("CSR")

Mindful of the need to be a corporately responsibleorganization, the Group undertook various steps toOur thanks also go to Datuk Tajuddin bin Atan ­ Non-play its part in contributing to the welfare of the societyIndependent Non-Executive Director, and his Alternatevia monetary donations to charitable organizations.Director En. Mohd Ariffin bin Marzuki, who resigned onThe Group endeavours to broaden its scope of CSR1 December 2007, as well as En. Che Sab bin Ahmadinitiatives over time.

Corporate Governance

The Board is committed to incorporating good corporate governance practices into the overall business direction and management of the Company and its subsidiaries, in compliance with the Best Practices of the Malaysian Code of Corporate Governance. Such measures are detailed in the Corporate Governance Statement in the Annual Report.

Acknowledgement

On behalf of the Board of Directors, I would like to acknowledge the management team and all our employees at GHL Systems for their dedication to driving the Group forward.

I would like to take this opportunity to welcome Mr. Angus Eugenio Campos, who was appointed as Independent Non-Executive Director on 17 March 2008. We believe that he is adequately proficient to contribute to the Group's business growth in the future.

I would also like to record my appreciation to Tunku Dato' Abdul Malek bin Tunku Kassim, who resigned from his position as Independent Non-Executive Chairman on 20 September 2007, for his years of leadership on the Board. Meanwhile, I am stepping into the capacity of Interim Chairman while the Board continues to search for a suitable candidate for the position.

Our thanks also go to Datuk Tajuddin bin Atan - Non-Independent Non-Executive Director, and his Alternate Director En. Mohd Ariffin bin Marzuki, who resigned on 1 December 2007, as well as En. Che Sab bin Ahmad - Independent and Non-Executive Director, who resigned on 7 January 2008, for their past contributions to the Board.

Finally,I would also like to thank our valued shareholders,clients, business associates, and merchants for their continued support rendered to the Group. We look forward to further collaborations in weathering future challenges in the years ahead.

Tay Beng Lock,
Interim Chairman and Group Managing Director
8 April 2007