ProtoPROTO CORPORATION


News ReleaseNews Release

July 27, 2011
Notice of the Acquisition of the Stock (Company Acquisition) of MTM Multimedia Sdn Bhd

 We hereby notify you that PROTO, at the meeting of directors held on July 27, 2011, resolved to acquire the stock of MTM Multimedia Sdn Bhd (hereinafter referred to as MTM) which operates Malaysia's number one used car related information business, and make it a subsidiary.
1.Reason for Acquisition of Stock
 PROTO is working to strengthen its integrated management support services for maintenance, sheet metal, and paint shops as well as used car dealerships in Japan while also offering various information services that seek to provide merits to consumers based around the automobile portal site "Goo-net," which boasts the largest number of registered used cars in Japan. Additionally in its core product "Goo," PROTO is building a system that covers the entire country of Japan by expanding into Niigata, Shikoku, and Okinawa areas which were not covered until the first half of this fiscal year.
 Given this overwhelming market share in the Japanese market, PROTO set an objective of global business expansion and considered advancing into the expanding ASEAN market in order to foster additional growth in its principle business area, automobile-related information. Among the ASEAN countries, Malaysia, the Kingdom of Thailand, and the Republic of Indonesia show yearly growth in car ownership numbers and are expected to continue to see market expansion.
 In addition to publishing the used car information magazines "Motor Trader" and "Biker Trader" as well as operating a related web site in Malaysia, MTM publishes the new car information magazine "Autocar" in Malaysia and the Republic of Singapore. MTM holds the number one position in used car related information media in Malaysia.
 PROTO will acquire 100% of the stock of MTM and, by making it a fully-owned subsidiary, create a business base in the ASEAN market. It also plans to further expand the scope of its operations by utilizing the IT business know-how it has cultivated with the automobile portal site "Goo-net."
2.Transfer Method
 The acquisition will be conducted by PROTO purchasing MTM stock from its existing shareholders.
3.Overview of Acquired Subsidiary (MTM)
(1)Business Name MTM Multimedia Sdn Bhd
(2)Head Office Location Suite 12.02 Level 12, Centrepoint South, The Boulevard, Mid Valley City, Langkaran Syed Putra, 59200 Kuala Lumpur, Malaysia
(3) Name and Title of
Representative
Chairman: Sir Robert John Madejski
(4)Business Areas Publication of used car information magazines "Motor Trader" and "Biker Trader"
Operation of used car information web site
(5)Amount of Capital RM 500,000
(6)Date of Establishment June 26, 1997
(7) Major shareholders and shareholding ratio
Sir Robert John Madejski 81.0%
Ng Kee Aun 19.0%
(8) Relationship between MTM and listed companies
Capital Ties Not applicable
Personal Relationships Not applicable
Trade Relationships Not applicable
Relevance to concerned parties Not applicable
(9)Business performance and financial situation of MTM over the last three years
  Year ended December
31, 2008
(thousands RM)
Year ended December
31, 2009
(thousands RM)
Year ended December
31, 2010
(thousands RM)
Net Assets 2,963 3,461 3,421
Total Assets 6,042 10,982 8,911
Net Assets per Share (RM) 9.88 9.89 9.78
Revenue
(equivalent to sales)
21,178 20,444 22,071
EBIT
(equivalent to operating income)
2,838 685 126
Net Profit
(equivalent to net income)
2,197 489 (27)
Net Income per Share (RM) 7.33 1.40 (0.08)
Dividends per Share (RM)
Note:   1 RM = About \26.9
Note:   Change in Number of Shares Issued: Year ended December 2008 (300,000 shares), year ended December 2009 (350,000 shares), year ended December 2010 (350,000 shares)
Note:   MTM did not provide dividends to its existing shareholders (directors), instead it posted an equivalent amount as director bonuses. In particular, the main reason EBIT and net profit fell in the years ended December 2009 and 2010 was an increase in director bonuses.
4.Overview of Stock Acquisition Partner
Name Location Relationship between these individuals and listed companies
Sir Robert John Madejski Madejski Stadium Junction 11, M4, Reading, Berkshire RG2 OFL United Kingdom Not applicable
Ng Kee Aun 9 Lorong Mengkudu Pertama, Dijalan Ampang, 55000 Kuala Lumpur, Malaysia Not applicable
5.Number of shares acquired, value of acquisition, and status of stock ownership before and after acquisition
(1)Number of Shares Held Before Transfer 0 shares
(Number of Voting Rights: 0)
(Ownership Percentage: 0%)
(2)Number of shares acquired 500,000 shares
(Number of Voting Rights: 500,000)
(Acquisition Value: 109.67 million RM) * About \2,950 million
(3)Number of Shares Held After Transfer 500,000 shares
(Number of Voting Rights: 500,000)
(Ownership Percentage: 100.0%)
(4)Basis for Calculating Acquisition Value
The above acquisition value was calculated taking into consideration business synergy with the PROTO Group
based on a appraised value calculated by an independent third party in order to ensure fairness and validity.
6.Schedule
Corporate Resolution July 27, 2011
Transfer Date September, 2011 (scheduled)
7.Forecasts
 The influence of this transaction on the consolidated business results for the fiscal year ending March 2012 is expected to be insignificant, but in the event a matter occurs that should be disclosed based on careful examination in response to future progress, it will be announced promptly.


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