MONEYSWITCH LIMITED
ABN 49 103 57s 042
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2OO4
MONEYSWITCH LIMITED
ABN 49 los 575 042
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2OO4
CONTENTS
Directors' Report
Auditors'Report
Directors' Declaration
Gonsol idated State ment of Fi na ncia I performa nce
Gonsolidated Statement of Financial Position
Notes to & Forming Part of the Financial Statements
Accounta nt's Gompilation Report
Revenue Statement
MONEYSWTCH LIMITED
A B N 4 9 1 0 3 5 7 5 A 4 2
DIRECTORS' REPORT
The directors presenttheir reportforthe year ended 30 June, 2004 and the auditor's reportthereon.
DIRECTORS
The names of directors at any time during or since the end of the year are:
Name
Richard Freemantle
Paul Wood
Peter Haig
William Bartlett
Denis Calvert
Andrew Rothwell
Appointed
20t06t2003
3t02t2003
3t02t2003
14t04t2004
14t04t2004
3t02n003
Resigned
't4to4tno4
Richard Freemantle - Non-Executive Chairman
Richard has been involved in establishing and growing data communications companies for more than
twenty years. Starting in the early 1980s he created Network Solutions, which grew under his leadership
to become Australia's largest and most successful network integration company.
ln 1990 Richard established the first international subsidiary for Cisco Systems in Austalia. As this grew
into one of Cisco's key intemational markets, he was promoted to establish Cisco's operations in Europe
and then promoted to Senior Vice President and member of Cisco's senior management team. He returned
to Australia to establish the Cisco Asia Pacific headquarters, growing the business to more than 4000 staff
and $U53 Billion in revenue.
Since retiring from Cisco, Richard has been involved in Board positions on a number of technology start up
companies including ( as Chairman) the successful public float of Eserv Global in 20Q2.
Paul Wood - Chlef Executive Officer
Paul has been in the network technology business throughout his career, most recently at Cisco Systems
in a business development role. He was the co-founder and Chief Executive Officer of Metaplex, a United
States networking software business that was sold to Cisco Systems in 1996. Metaplex developed products
that allowed IBM networking systems to use Internet protocols. lt was a key contributor to Data Link
Switch (DLSw) that is in service in most banks worldwide today.
Earlier, Paul was the founder and Chief Executive Officer of Netlink, a United States and Australian venture
capital based data communications company that developed products in the mainframe networking
area. Neflink was sold to Cabletron Systems, a United States public company. Paul's initial experience was
in networking technical and product management roles at lBM.
Peter Halg - Dlrector and Mce Presldent, Engineering
Most recenfly Peter was the Chief lnformation Officer at the University Co-op Bookshop, a chain of 40
retail bookshops specialising in the education book market. Prior to the Co-op he consulted to Worldschool,
an internet start-up specialising in online education. Peter's roles at Worldschool included Development
Manager for outsourced applications development, before moving to the marketing department as a
Marketing Analyst. He was a development manager at Cisco Systems responsible for the Australian
development organisation as well as for project teams in the United States. He was co-founder of
Metaplex Australia in the United States and Managing Director of Metaplex Australia, and Director of
Engineering at Netlink in the United States and Austalia. His earliest roles were in lT applications and
systems in the real estate, airlines, building and insurance industries.
V\filliam Bartlet - Non-Executlve Director
Bill has banking, financial and risk management skills, having been the partner at Emst & Young responsible
for audit of banking and insurance businesses. He has been signing partner on a number of Australian
insurance companies, as well as Chairman of the firm's worldwide insurance practice. Bill has been a
member of the Life Insurance Actuarial Standards Board under the aegis of The Australian Prudential
Regulatory Authority ( APRA) since 1994. He is currently a director of Suncorp Metway, Reinsurance Group
of America, and of the St James Ethics Centre.
Denls Calvert - Non- Executive Director
Denis has EFTPOS and acquiring skills, having been Executive Vice President for Global Sales and
Marketing of Verifone Inc, a major United States EFTPOS supplier. He was Division Head of Retail and
Merchant Services for Citibank NA, responsible for the integration of all global merchant services operations.
He was Chief Executive Office of Tasq Technology Inc. which provides outsourced EFTPOS technology
and logistical support to more than 1.4 million retail merchants in the United States. Denis is cunently an
advisor to several EFTPOS manufacturers and payment processors.
PRINCIPAL ACTIVITIES
MoneySwitch is entering tle market for the provision of credit and debit card services to merchants. As
such, the company is developing the necessary policies, procedures, systems, relationships and
approvals for financial transaction processing, clearing and setflement.
REVIEWAND RESULTS OF OPERATIONS
The loss of the company after providing for income tax amounted to $270,672 ($2003 loss of g66,124).
This was in line with expectations given that the company is in the development stage of its lifecycle.
DIVIDENDS
No dividends have been declared or paid since the date of incorporation.
STATE OF AFFAIRS
Two additional directors have joined the board during the year, bringing with them experience and
knowledge to diversify the variety of backgrounds comprising the Board. The company has a strong
Board for entering the credit and debit card acquiring market. During the year the company raised additional
capital to allow it to continue toward market entry. MoneySwitch has lodged an application with the Australian
Prudential Regulation Authority ( APRA) to become authorized as a Specialist Credit Card lnstitution (SCCI)
in the area of credit card acquiring. The company is working with Msa and Mastercard towards
becoming members of those credit card associations.
ENV]RONMENTAL
The company operations are not subject to any environmental regulations.
ISSUES
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
There has not arisen in tle interval between end of financial year and the date of this report any item , transaction
or event of a material or unusual nature, which in the opinion of the directors of the Company, will affect
signiftcantly the operation of the company, the results of these operations or the state of affairs of the company,
in future financial years.
LIKELY DEVELOPMENTS
MoneySwitch will continue activities to enter tre market for credit and debit card acquiring merchant
services.
MONEYSWTCH LIMITED
ABN 49 103575042
DTRECTORS' RE PORT (cont.d)
MEETINGS OF DIRECTORS
The number of directors' meetings and number of meetings attended by each of the directors of the Company
during the financial year are:
Richard Freemantle
Paul Wood
Peter Haig
William BarUett
Denis Calvert
Andrew Rothwell
Number
held*
4
4
4
1
1
Number
attended*
4
4
a
1
,|
* Number of meetings held during the time the director held office during the year
INDEMNIFICATION AND INSURANCE OF OFFICERS
The company has not, during or since the financial year, in respect of any person who is or has been an
officer or auditor ofthe company or of a related body corporate:
- indemnified or made any relevant agreement for indemnifying against a liability, including costs and
expenses in successfully defending legal proceedings with the exception of the general indemnity provisions
contained in the Company's Constitution; or
- paid or agreed to pay a premium in respect of a contact insuring against a liability for the costs or
expenses to defend legal proceedings.
& gt
2oo4 onbeharf of the Board
sisned in sydney on the
lftLo"y * 4
1
fn hJ*,,J
Director
tndependent Audit Report
to the Members
]llil,j"],sJiil;r",
Mitchell & Partners
Scope
The financiol report ond directors' responsibility
The financial report comprises the statement of financial position, statement of financial performance, statement of cash
flows, accompanying notes to the financial statements, and the directors'declaration of MoneySwitch Limited
for the year ended 30 June 2004.
The directors of the Company are responsible for the preparation and true and fair presentation of the financial report in
accrrdance with the Corporations Act 2001. This included responsibility
for the maintenance of adequate accounting
records and internal controls that are designed to prevent and detect fraud and eror, and for the accounting policies
and accounting estimates inherent in the financial report.
Audif opprooch
We conducted an independent audit in order to express an opinion to the members of the Company. Our audit was conducted
in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report
is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement,
selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence.
Therefore, an audit cannot guarantee that all material misstatements have been detected.
We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance
with the Corporations Act 2001, Australian Accounting Standards and other mandatory financial reporiing requirements
in Australia, a view which is consistent with our understanding of the Company's financial position, and oi its performance
as represented by the results of its operations and cash flows.
we formed our audit opinion on the basis of these procedures, which included:
' examining, on a test basis, information
to provide evidence supporting the amounts and disclosures
in the financial
report, and
- assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant
accounting estimates made by the directors.
While we considered the effectiveness of management's
and extent of our procedures, our audit was not designed to provide assurance on internal controls.
internal controls over financial reporting when determining the nature
Independence
ln conducting our audit, we followed applicable independence
pronouncements and the Corporations Act 2001.
requirements of Australian professional ethical
Audit Opinion
In our opinion, the financial report of Moneyswitch Limited is in accordance with:
(a)
the Corporations Act 2001, including:
_
i) giving a true and fair view of the Company's financial position as at 30 June 2004 and of its
performance for the year ended 30 June 2004; and
ii) complying with Accounting Stiandards
in Australia and the Corporations Regulations 2001; and
b) other mandatory professional reporting requirements in Australia.
MITCHELL & PARTNERS
Chartered Accountants
Merchant - Partner
SignedatSydneyon l'+ A-grsf
2OO4
,
surr r Level z
r York Street Sydney
r{sw 2ooo Australia
TELEPHoilE: oz 9z5t 3838
FACSfMTf-E: 02 9257 )OO8
r e c e p t i o n @ m i t c h e [ [ p a r t n e r s . c o m . a u
an"r,"red Accountants
@
b e y o n d a c c o u n t i n g
Liabiliff is limited by the
Accountants Scheme, apDroved
under the Professional StandarOs act
1994 NSW)
MONEYSWTCH LIMITED
ABN 49 103 575 042
DIRECTORS' DECLARATION
In the opinion of the directors of MoneySwitch Limited ("the Company"):
(a) the financial statements and notes set out on pages 8 to 21 are in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the financial position of the Company as at 30 June 2004 and
of the performance, as represented by the results of the operations and the cash flows,
forthe year ended on that date, and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
Signed in accordance with a resolution of the Board of Directors.
Datedat 9,1clra.1ni'
l7^ o^r", fiut*shooq
/euqp4
Director
MONEYSWTCH LIMITED
ABN'49 103 575 042
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE YEAR ENDED 30 JUNE 2OO4
NOTE
Revenue
Write-downlprovision
in non-current assets
Other expenses from ordinary activities
ProfiU(loss) from ordinary activities before related
income tax expense
Income tax expense relating to ordinary activities
30Jun{4
$
30Jun-03
$
109,545
3,054
109,545
3,054
-10,888
-3,755
-369,329
-65,423
-270,672
-66,124
0
0
Net profiU (loss) atFibutable to members of parent entity
12
-270,672
-66,124
The above Statement of Financial Performance should be read in conjunction with the accompanying notes.
MONEYSWTCH LIMITED
ABN 49 103 575 042
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2OO4
NOTE
CURRENTASSETS
Cash assets
Receivables
TOTAL CURRENTASSETS
NON.CURRENT ASSETS
Property
Other financial assets
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Payables
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Non interesting bearing liabilities
TOTAL NON-CURRENT LIABI LITIES
TOTAL LIABILITIES
NETASSETS
M E M B E R S ' E O U I T Y
lssued Capital
Retained profits
TOTAL SHAREHOLDERS' EQUIW
30Jun-04
$
30Jun-03
$
434,289
109,342
201,437
12,811
543,631
214.248
26,392
0
2,441
16,374
0
3,254
28,833
1 9 , 6 2 8
572,465
233,876
0
9,260
9,260
0
0
9,260
563,204
_:33,879-
900,000
-336,796
563,204
300,000
-66,124
233,876
7
8
9
1 0
't1
1 0
1 3
12
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
MONEYSWTCH LIMITED
ABN 49 103575042
STATEMENT OF CASH FLOWS AS AT 30 JUNE 2OO3
STATEMENT OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts in the course of operations
Cash payments in the course of operations
lnterest received
30Jun-04
$
30Jun-03
$
3,388
-359,256
9,626
0
-77,422
3,054
Net cash consumed by operating activities
19(b)
-346,242
-74,368
CASH FLOWS FROM INVESTING ACTIVTTTES
Other assets acquisition
Acquisition of fixed assets
Net cash consumed by investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayments of borrowings
Proceeds from issue of shares
Net cash provided by financing activities
Net increase/(decrease)
Cash atthe beginning of the year
in cash held
Cash at the end of the year
-20,906
-4,067
-20,128
-20,906
-24,195
600,000
10,000
-10,000
300,000
0
600,000
300,000
232,852
201.437
201,437
0
19
_!U289_
____A1,437_
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
1 0
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
1. STATEMENT OF ACCOUNTING POLICIES
The significant policies which have been adopted in the preparation of tris financial report are:
(a) Basis of preparation
The financial report is a general purpose report which has been prepared in accordance with Accounting
Standards, Urgent lssues Group Consensus Views, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
The financial report covers the economic entity of MoneySwitch Limited. MoneySwitch Limited is an unlisted
public company, incorporated and domiciled in Australia.
The financial report has been prepared on the basis of historical cost and, except where stated, does not take into
account changing money values or fair values of non-current assets.
These accounting policies have been consistentty applied by each entity in the consolidated entity and, except
where there is a change in accounting policy, are consistent with those of the prior year.
(b) Income Tax
The company adopts the liability method of tax-effect accounting whereby the income tax expense is
calculated on the operating profit, adjusted for permanent differences. Timing differences which arise
due to the different accounting periods in which items of revenue and expense are included in the
determination of operating profit and taxable income, are brought to account as either provision for
defened income tax or as an asset described as fufure income tax benefit at the rate of income tax
applicable to the period in which the benefit will be received or the liability will become payable. Future
income tax benefits are not brought to account unless realisation of the asset is assured beyond any
reasonable doubt. Future income tax benefits in relation to tax losses are not broughtto account unless
realisation of the asset is assured beyond any reasonable doubt. The amount of benefits brought to
account or which may be realised in the future is based on the assumption that no adverse change will
occur in income taxation legislation, and the anticipation that the company will derive sufficient future
assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
(c) Revenue recognltion
Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax
(GST) payable to the taxation authority. Exchanges of goods and services of the same nature and value without
any cash consideration are not recognised as revenues
lnterest Revenue
Interest revenue is recognised as it is received.
(d) Goods & Services Tax (GST)
Revenues, expenses and assets are recognised net ofthe amount of GST, except where the amount of GST
incuned is not recoverable from the taxation authority. In these circumstances the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense. Receivables and payables are shown inclusive
of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as a current asset or
liability in the statements of financial position.
Cash flows are included in the statements of cash flows on a gross basis. The GST components of cash flows
arising from investing and financing activates which are recoverable from, or payable to, the taxation authority are
classified as operating cash flows.
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
STATEMENT OF ACCOUNTING POLICIES (cont'd)
(e) Revisions of accounting estimates
Revisions to accounting estimates are recognised prospectively in current and future years only.
(f) Acquisition of assets
All assets acquired including propefi, plant and equipment are initially recorded at their cost of acquisition at the
date of acquisition, being the fair value of the consideration provided plus incidental costs directy attributable to
the acquisition.
Expendifure is only recognised as an asset when the entity controls fufure economic benefits as a result of the
cost incuned, it is probably that those future economics benefits will eventuate, and the costs can be measured
reliability. Costs atfibutable to feasibility and alternative approach assessments are expensed as incurred.
(g) Recoverable amount of non+urrent assets valued on cost basis
The carrying amount off nonrcunent assets valued on the cost basis are reviewed to determine whether they are
in excess of their recoverable amount at balance date. lf the carrying amount of a non-current asset exceeds the
recoverable amount, the asset is written down to the lower amount. The write-down is expensed in the reporting
period in which it occurs.
\Mtere a group of assets working together supports he generation of cash inflows, recoverable amount is a
assessed in relation to that group of assets.
In assessing recoverable amounts of non-current assets the relevant cash flows have not been discounted to
their present value, except where specifically stated.
Cost versus fair value
Except where specifically stated, non-current assets are recorded at the lower of cost and recoverable amount.
(h) Receivables
Receivables are recognised at cost and where some or all of the amount is not recoverable, a provision is made
against the amount not likely to be recovered.
(i) Payables
Amounts are included in the financial statements as monies received or the value of the benefit provided.
fi) Property
Propertv. plant and equioment
Property, plant and equipment is recognised at the lower of cost or recoverable amount.
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
2.REVENUE FROM ORDINARY ACTIVITIES
lnterest
Other parties
Sundry
Research & Development Rebate
3. PROFIT FROM ORDINARY ACTIVITIES BEFORE INCOME TAX
(a) Individuallv sionificant expenses included in profit
from ordinarv activities before income tax exoense
Wite4own/provision in non-cunent assets
L e g a f F e e s
Provision for employee benefits
Contractors
4. AUDITOR'S REM UNEMTION
Audit Services:
Auditors of the company - Mitchell & Parhers
Audit of the financial reports
Other Services:
Auditors of the company - Mitchell & Partners
Other assurance services
5 . I N C O M E T A X
Operating profit forthe year
Prima facie income tax expense on
profit ftom ordinary activities (300/o)
Income tax losses carried forward
Income tax expense
30Jun-04
30Jun{3
$
$
9,626
0
9 9 , 9 1 9
3,054
0
_1_9e,545_ _______19!1
10,ggg
5 2 , 1 8 0
9,260
49,1 55
g]5S
5 , 4 4 5
O
30,932
___125483_ ____40p32_
3,500
0
3,500
0
0
0
-270,672
-66,124
a1,202
8'(cid:0)t,202
-19,837
19,837
0
0
1 3
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
6. RECEIVABLES
Current
Sundry Debtors - Research & Development Tax Concession
Sundry debtors
GST refund due
30-fun-04
30Jun{3
$
$
9 9 , 9 1 9
8 , 6 1 3
8 1 0
109,U2
9,466
3 , 3 4 5
1 2 , 8 1 1
The company has applied through Auslndustry for a Research and Development tax concession. A registation
number has been granted and the Application will be lodged with the Australian Taxation Ofiice.
Noncunent
Amounts owing by related parties:
Controlled entities
Related entities
T.PROPERTY
Property. plant & eouipment
Plant & equipment - at cost
Accumulated Depreciation
Fumiture & equipment - at cost
Accumulated Depreciation
Low Value Pool - at cost
Accumulated Depreciation
Reconciliations
Reconciliations of the carrying amount for each class
of property are set out below:
Propertv. olant & equipment
Carrying amount at beginning of year
Additions
Write-down in other assets
Carrying amount at end of year
8. OTHER FINANCIAL ASSETS
Non-current
g.OTHERASSETS
Non-current
Formation costs
Accu mu lated amortisation
1 4
0
0
0
0
8 , 6 6 1
1 , 6 0 2
2,105
421
1,684
9,363
1 , 7 3 2
7,631
0
20,129
-3,755
16,374
29,396
8,853
20,543
2,105
842
1,263
9,535
4,948
4,587
26,392
16,374
20,906
- 1 0 , 8 8 8
___26392
n
U
3,254
8 1 3
2,441
:
4,067
8 1 3
3,254
MONEYSWITCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
10. PAYABLES
Current Liabllities
Trade creditors
Accruals
Non Current Llabilities
There were no Non Current Liabilities at year end.
11. PROVTSTONS
Provision for Employee Benefits
12. RETAINED PROFITS
Retained profits at the beginning of the financial year
Net Profit attributable to the members of the parent entity
Retained profits at the end of the financial year (refer note)
13. CONTRIBUTED EQUITY
3,000,000 Ordinary shares paid at 10c each
4,000,000 Ordinary shares paid at 15c each
Shares issued durino the vear:
29 April, 2004 - 333,334 Ordinary shares at 15c each
29 April, 2004 -1,333,333 Ordinary shares at 15c each
29 April, 2004 - 666,666 Ordinary shares at 15c each
30 April, 2004 - 666,667 Ordinary shares at 15c each
29 April, 2004 - 1,000,000 Ordinary shares at 15c each
Shares issued durino the 2003 vear:
3 February, 2003 - 1 ,000,000 Ordinary shares at 10c each
1 8 February, 2003 - 500,000 Ordinary shares at 10c each
21 February,2003 - 400,000 Ordinary shares at 10c each
8 April, 2003 - 1,000,000 Ordinary shares at 10c each
19 May, 2003 - 100,000 Ordinary shares at 10c each
I4. CONTROLLED ENTITIES
Particulars in relation to controlled entities
30Jun-04
30Jun-03
$
$
0
0
:
0
0
n
U
9,260
-66,124
-270,672
-336,796
0
-66,124
$6,124
300,000
600,000
300,000
0
900.000
300.000
50,000
200,000
100,000
100,000
150,000
____600,!!9_
100,000
50,000
40,000
100,000
1 0 , 0 0 0
300,000
There are no controlled entities as at 30 June, 2004 nor were any acquired or sold during the period.
1 5
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
1 5. CONTINGENT LIABILITIES
There are no known contingent liabilities as at the date of this report.
I6. STOCK OPTION GRANTS
During the year the company issued the following share options.-
8,236,410 Options at 10c each
Stock option orants issued throuoh the vear at Face value
2 Apfl,2004 - 3,151,410 Vested Options at 10c each
2 April, 20A4 - 2,525,000 Linear Options at 10c each
2 April, 2004 - 2,160,000 Service Options at 10c each
'14 April, 2004 - 400,000 Service Options at 10c each
Value of Stock Options at end of veal
120,000 Options 2 year exercise period
216,410 Options 3 year exercise period
4,975,000 Options 5 year exercise period
2,925,00A Options 10 year exercise period
823.641
315,141
252,500
216,000
40,000
Face Value
1 0 c
1 2 , 0 0 0
21,641
497,500
292.500
_823flt
__qr3,6!_
Value
o/o
lssued Value
6
7
1 2
1 8
684
1 , 5 3 7
5 7 , 7 1 0
53,820
_____-113,751_
Value is based on calculation percentages as issued by the Australian Taxation Office
There were no stock options granted during the 2003 year.
Stock Option Rules
Staff:
Options covering 50% of Salary, vesting linearly over 5 years
Directo rs/Con sultants:
Number of options granted based on anticipated service to end of calendar year
Grant specifies options per day of service
Actual days performed (and options vested) are decided by board, and recorded every 3 months
Exercise Period:
Normally ten years from date of grant, subject to reduction on ceasing service or employment
lf shares are not publicly traded, exercise period is 3 years after ceasing service
lf shares are publicly traded, exercise period is 90 days
17. FINANCIAL REPORTING BY SEGMENTS
The company operates in the financial services industry in Australia.
MoneySwitch is entering the market for the provision of credit and debit card services to merchants. As
such, the company is developing the necessary policies, procedures, systems, relationships and
approvals for financial transaction processing, clearing and seftlement.
1 6
MONEYSWITCH LIMITED
ABN 49 103575042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
18. SUBSEQUENT EVENTS
There has not arisen in the interval between end of financial year and the date of this report any item , transaction
or event of a material or unusual nature, in the opinion of the directors of the Company, to affect significantly the
operation of the company, the results of these operations or the state of affairs of the company, in future
financial years.
30-Jun-04
30Jun43
$
$
19. NOTES TO THE STATEMENT OF CASH FLO\ IS
(a) Reconciliation of Cash
Cash at the end of the financial year as shown in the statement of cash flows
is reconciled to the related items in the statement of financial position as follows:
Cash
434,289
434,289
201,437
201,437
(b) Reconciliation of operatino orofit from ordinarv activities after income tax
to net cash orovided bv operatino activities
Losses from ordinary activities after Income tax
-270,672
$6,124
Non Gash items included ln operating loss:
Expenses paid by related entity
Depreciation
Amortisation
Provision for employee benefits
Net Gash consumed by operating activifies before
change in assets and liability
Change in assets and liabilities
Decrease/(lncrease)
Decrease/(lncrease)
Increase/(Decrease)
Net cash consumed by operatlng acflvities
in receivables
in other assets
in payables
1 0 , 8 8 8
8 1 3
9,260
3 , 7 5 5
8 1 3
- 2 4 9 , 7 1 1
- 6 1 , 5 5 6
-96,531
0
0
-346,242
- 1 2 , 8 1 2
-74,368
MONEYSWTCH LIMITED
ABN 49 103575012
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
20. ADDITIONAL FINANCIAL INSTRUMENTS DISCLOSURES
Credit Risk
Credit Risk represents the loss that would be recognised if counterparties failed to perform as contracted.
Recoonised fi nancial instru ments
The credit risk on financial assets, excluding investments, of the consolidated entity which have been recognised
on the statements of financial position, is the carrying amount, net of any provision for doubtful debts.
Interest rate risk
The consolidated entity's financial assets and liabilities are subject to interest rate risk. These will fluctuate in
accordance with movements in the market interest rates. The consolidated entity's exposure to interest rate risk
and t|e effective average interest rate from classes of financial assets and financial liabilities is set out below:
2004
Financial assets
Cash assets
Receivables
Other assets
Financial assets
Payables
Other Liabilities
2003 Year
Financial assets
Cash assets
Receivables
Other assets
Financial assets
Payables
Other Liabilities
Weighted
Note average
interest
rate
Floating
rate
Nonlnterest
bearing
$
Total
4.30o/o
434,289
434,289
0
109,342
2.441
111.783
434,289
109,342
2,441
_____546,w2
0
0
0
0
Weighted
Note average
lnterest
rate
Floating
rate
Non'interest
bearing
$
Total
4.30o/o
201,437
201
0
1 2 , 8 1 1
3.254
1 6 , 0 6 5
201,437
12,811
3,254
_____ 211,s02
0
0
0
n
v
o
1 9(a)
A
I
1 0
1 0
1 9(a)
o
9
1 0
1 0
Pre Establishment
There were no consolidated entity financial assets or liabilities prior to the formation of the company on 3
February,2003.
1 8
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
Net fair values of financial assets and liabilities
For all financial assets and liabilities the fair net value approximates their carrying value. No financial assets and
financial liabilities are readily traded on organised markets.
The aggregate net fair values and carrying amounts of financial assets and financial liabiliiles are disclosed in
the statements of financial position and in the notes to the financial statements.
21. CAPITAL COMMITMENTS
The company does not have any capital commitments as at the date of this report.
22. DIRECTORS REMUNERATION
No remuneration is paid to the Directors of the Company although Andrew Rothwell a former Director
received salary and superannuation contributions amounting to $65,945 during the year.
23. RELATED PARTY TRANSACTIONS
Directors
The names of each person holding the position of director of MoneySwitch Limited during the financial period
are P wood, P Haig, A Rothwell (resigned 1414104) R Freemantle, D calvert, w Barflett.
D Calvert and W Bartlett were appointed during the year.
Transactions
The company has not entered into any transactions with the current directors during the period except for the
issuing of shares and stock options to the directors or their associated parties. The shares capital has been
issued solely to the Directors or their associated entities.
A salary of $60,000 has been paid to Mr Andrew Rothwell during the year. The company has also
paid superannuation contributions in respect of Mr Rothwell amounting to $5,445 during the year.
Shares Held by Directors and Related Parties
Paul Wood
Pamela Wood
Peter and Nola Haig
Tomoda Pty Ltd
William and Delwyn Bartlett
Qazalla Developments Pty Ltd
Andrew Rothwell
lssued at
1 5 c
1 0 c
500,000 666,666
500,000 666,667
500.000
1,000,000
333,334
1,000,000 1,333,333
500,000
3.000.o0Ldooo^000
Value
150,000
150,000
50,000
150,000
50,000
300,000
50,000
900.000
1 9
MONEYSWTCH LIMITED
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
Stock Options Granted to Directors during 2004 Year
10c Type
Face Value
Paul Wood
02 April 2004
Q2 Aprll2004
Peter Haig
02 April2004
02 April 2004
02 4pfl2004
Richard Freemantle
02 April2004
02 Apnl2004
Andrew Rothwell - former Director
02 April?0o4
02 Apil20o4
Denis Calvert
14 Apnl2004
William Bartlett
14 4pil2004
750,000 Vested
1,200,000 Service
1,000,000 Vested
600,000 Linear
660,000 Service
240,000 Vested
300,000 Service
825,000 Vested
600,000 Linear
200,000 Service
200,000 Service
6,575,000
75,000
120,000
100,000
60,000
66,000
24,000
30,000
82,500
60,000
20,000
20,000
657,500
2A
MONEYSWITCH LIMITED
ABN 49 10357sO42
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE, 2OO4
Non-director related parties
Current and former Staff and contractors have been issued stock option grants during year ended 30 June 2004
Stock Options Granted to current and former staff and contractors during the 2OO4year
10c
Type
FaceValue
Russell Scrimshaw
O2 Apnl2004
Nitin Patel
02 April2004
MarkWood
O2 April2004
02 April2004
Sophie Katsibouba
02 April2004
A l a n M o
A2 Apil2A04
Matthew Millis
02 April 2004
Arun Chalise
02 April2004
Need Data Pty Ltd
02 Apnl2004
50,000 Vested
20,000 Vested
20,000 Vested
250,000 Linear
30,000 Vested
275,000 Linear
450,000 Linear
350,000 Linear
216,410 Vested
5.000
2,000
2,000
25,000
3,000
27,500
45,000
35,000
21,641
1 S 6 1 / 1 0
:
1 6 6 . 1 4 1
2'l
Mitchell & Partners
MONEYSWITCH LIMITED
ABN 49 103 575 042
COMPILATION REPORT
to the members of MONEYSWITCH LIM|TED
on the basis of information provided by the directors of Moneyswitch Limited
we have compiled, in accordance with APS 9 "statement
the general purpose financial report for the year ended 30 June 2004
on Compilation of Financial Reports",
The directors are responsible for the information contained in the special purpose financial report and
have determined that the accounting policies are consistent with the financial reporting requirements of
MoneySwitch Limited and are appropriate to meet the needs of the members.
Our procedures have been limited to the classification and summarisation of information to compile this
special purpose financial report from the information provided to us by the directors and does not include
verification or validation procedures. No audit or review has been performed and accordingly no
assurance is expressed.
Neither the firm nor any member or employee of the firm undertakes any responsibility or accepts liability
in any way whatsoever to any person (other than the directors of MoneySwitch Limited) in respect of
the special purpose financial report including any enors or omissions report however caused in the
special purpose financial.
MITCHELL & PARTNERS
Chartered Accountants
/ ) t#* n"*/"*,1
Gt.;;n;;;;irP;;;;;
Signed at Sydney this jltth
day of A-q
\)
-s$
2004
surr r Levet z
1 York Street Sydney
irsw 2ooo Australia
TELEPHoNE: oz 9z5t 3838
FACSTM|LE: 02 9251 3OO8
arwl: reception@mitchellpartners.com.au
Cft"rr"red Accountants
b e y o n d a c c o u n t i n g
@
Liability is limited by the
Accountants Scheme, approved
under the hofessional Standards Act
1994 (NSW)
MONEYSWITCH LIMITED
ABN 49 t03 575 042
INCOME AND EXPENDITURE STATEMENT FOR THE YEAR ENDED 30 JUNE ,2004
I N C O M E
Other Income - R & D Rebate
Interest lncome - AMP
TOTAL INCOME
OVERHEAD EXPENDITURE
Engineering
Salaries
Rent
Office Supplies
Internet
Telephone
Insurance
Books & Subscriptions
Contractor fees
Depreciation
Training
Total Engineering
General & Administration
Accountancy fees
Amortisation of Formation expenses
Auditors Remuneration
Books & Subscriptions
Consulting
Depreciation
Entertainment
Insurance
lnterest
I nternet
Provision for employee benefits
Legal fees
Office supplies
Rent
Salaries
Telephone
Travelling
Utilities
Total General & Adminlstrafion
TOTAL EXPENSES
NET PROF|n(LOSS)
Company
Company
30Jun-04
30Jun-03
9 9 , 9 1 9
9,626
___10e,s45_
0
3,054
3,054
152,518
3 0 , 8 1 3
9 , 1 6 4
2,261
2,405
1 , 2 7 7
1 , 6 6 3
4 8 , 1 5 5
7,824
10,371
266,451
478
8 1 3
3 , 5 0 0
4,209
3 , 8 0 0
3,064
488
1 1 5
0
204
9,260
5 7 , 1 8 0
826
2,779
1 3 , 7 5 6
2 1 7
13,077
0
113,767
380,218
-270,672
n
v
0
0
0
0
0
1,762
30,832
1 , 7 3 2
2,358
36,684
1 , 5 4 0
8 1 3
282
0
2,023
0
1 , 1 9 8
1 6 3
1 , 5 7 6
0
5,445
4 , 5 6 9
11,562
0
2 , 0 9 9
5 1 6
708
29,859
66,543
{3,489
NET Operating Loss for the year
-270,672
63,489
This Income & Expenditure Account does not form part of the audited accounts.
z 5