MoneySwitch Limited ABN 49 103 575 042
(Trading as Tyro Payments)
Annual report to shareholders
Year ended 30 June 2009
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
1
CONTENTS
Building a specialised banking institution (SCCI) for merchants
Tyro Health
Tyro Retail
Tyro Culture
Directors’ Report
Independent Auditor Declaration
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity
Notes to the Financial Statements for the year ended 30 June 2009
Note 1 – Statement of Accounting Policies
Note 2 – Revenue and Expenses
Note 3 – Income Tax
Note 4 – Cash and Cash Equivalents
Note 5 – Trade and Other Receivables
Note 6 – Prepayments
Note 7 – Held to Maturity Investments
Note 8 – Inventories
Note 9 – Available for Sale Investments
Note 10 – Property, Plant and Equipment
Note 11 – Share Based Payment Expense
Note 12 – Trade and Other Payables
Note 13 – Provisions
Note 14 – Contributed Equity and Reserves
Note 15 – Financial Risk Management Objectives, Policies and Procedures
Note 16 – Commitments and Contingencies
Note 17 – Subsequent Events
Note 18 – Segment Reporting
Note 19 – Auditor’s Remuneration
Note 20 – Related Party Disclosures
Directors’ Declaration
Independent Auditor Report
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MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
2
Building a specialised banking institution (SCCI) for merchants
MoneySwitch Limited trading as Tyro Payments (or “Tyro”) is a new Australian banking institution specialised in
facilitating the acceptance of electronic payments on behalf of merchants and recurrent billers. Tyro is the first new
entrant into the payment industry in over 10 years.
Tyro holds an authority under the Banking Act to carry on banking business as a Specialist Credit Card Institution
(SCCI) and operates under the supervision of the Australian Prudential Regulation Authority (APRA). Tyro does not
take money on deposit. Tyro is a Principal Member of Visa and MasterCard and a Tier One Member of the
Australian payment clearing streams BECS and CECS.
Tyro provides an in-house developed, end-to-end solution, authorising, clearing and settling electronic payments.
Tyro accepts Visa, MasterCard, American Express/JCB, Diners, PIN based EFTPOS as well as Medicare
Easyclaim, gift and loyalty card transactions. Under its banking authority, Tyro Payments is also able to provide
additional services of BPAY and direct debit services. The Tyro Payments solution is IP based and all transactions
are processed in real time.
As an acquirer only, Tyro does not take money on deposit and does not issue cards, thereby eliminating any
potential conflict of interest between serving cardholders and merchants.
At the end of June 2009, Tyro completed its second full fiscal year trading, since the commercial launch of its
EFTPOS facility on 28 April 2007.
Our vision and guiding principles
Our vision is to be the most efficient acquirer of electronic card transactions in Australia, providing innovative
service, functionality and value. Our directors, managers and employees strive to demonstrate honesty, integrity
and diligence, to act in accordance with the law and always to maintain a spirit of fairness, justice and equity at all
times.
Our governance
The Board of Directors, constituted in line with the requirements of APRA Prudential Standard 510: Governance,
sets policy and direction, supported by operational management. The Board also establishes advisory committees
to assist it in carrying out its functions, as well as providing it with expert advice on acquiring and other matters.
The primary role of the board is to provide effective governance over company affairs (including its strategic
direction, establishing goals for management and monitoring the achievement of those goals) to ensure the
interests of stakeholders are protected and the confidence of the merchant acquiring market is maintained, whilst
having regard for the interests of all stakeholders including customers, employees, suppliers and local communities.
The directors have set a standard of conduct at all levels that ensure compliance with the company code of
conduct, the Corporations Act 2001, the Australian Prudential Regulation Authority Prudential Standards, the EFT
Code of Conduct, National Privacy Principles 2001 and the Banking Act 1959.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
3
Tyro Health: medical practices and pharmacies
Tyro and Health Communication Network (HCN), the leading Australian provider of e-health and practice
automation solutions, have launched an integrated EFTPOS solution for general practices (PracSoft) in February
2008 and small specialist medical practices (BlueChip) in June 2008. A version for larger specialist practices
(BlueChip Terminal Services) was launched in late 2008. By end of June 2009, there were 658 Tyro merchant
facilities in medical practices.
Tyro launched an integrated EFTPOS solution for pharmacies with software provider POS Solutions and CDC
Systems. By June 2009, there were 55 pharmacies in production.
Medicare Easyclaim
Tyro implemented an integrated Easyclaim platform. Easyclaim is a real-time Medicare claiming and re-
imbursement service for patient-paid and bulk bill claims using an EFTPOS terminal and the EFTPOS network from
the medical practice immediately after the consultation has occurred.
HCN has integrated the Easyclaim platform into its PracSoft practice management system. The highly automated
end-to-end solution was launched in April 2009.
Tyro and HCN have developed a seamless process of electronic payment, claiming, reimbursement and
reconciliation. The claim and Medicare card data is automatically transferred from the practice management system
(PMS), where it resides, through the Tyro EFTPOS terminal to Medicare and from Medicare back to the PMS for
reconciliation.
This integrated approach is a requirement clearly stated by the industry. Compared with the stand-alone alternative
(currently being offered by three major banks) of 4 card swipes and up to 20+ keystrokes, the Tyro solution requires
2 card swipes and 2 keystrokes. Processing time is reduced to seconds.
Tyro has signed a five-year exclusive development and marketing contract with HCN (Health Communication
Network) to provide an integrated EFTPOS and Easyclaim solution to the primary health market. Upon commercial
launch of the HCN Easyclaim solution, the agreement allows Tyro to make its Easyclaim platform available to other
practice management software providers.
Medicare estimates that there are currently 7000 general practices and 8000 specialist practices with 85% having
an existing EFTPOS device. Easyclaim is available to those practices and parts of the ancillary health space.
Medicare pays Tyro, as an accredited Easyclaim provider, a fee of 23 cents (including GST) per claim.
26 May 2009, Medicare awarded a subsidy totaling $1,072,087 to be expended until 31 August 2009 as part of the
rollout of the Medicare integrated Easyclaim solution for PracSoft users. This subsidy was part of $6m available that
went to multiple industry participants as a way of encouraging the design, development and rollout of integrated
Easyclaim to the medical community.
The subsidy funded the development of an online application solution, terminal management improvements,
infrastructure upgrades as well as increased sales and Help Desk resources. Tyro offered free installation and free
training for the first 1,000 practices to speed up adoption of the new solution.
The Tyro rollout website (www.rollout.tyro.com) is an industry first, since it allows for totally paperless registration,
sign-up and application process including the EFTPOS application and the direct debit authority all with digital
signatures.
By end of June 2009, 450 practices had signed up for integrated Easyclaim, compared to an addressable market in
excess of 3,500 practices.
Further Growth Opportunities
The entire ancillary medical market could open up for integrated EFTPOS, Easyclaim and eClaiming with private
health insurance companies. The pre-requisite is for Tyro to gain access to a sufficient number of leading private
health funds in Australia, either through direct connections with each of them or through a gateway provider.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
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Tyro Retail
Tyro launched its first stand alone EFTPOS facility commercially on 28 April 2007. At the end of 2007, Tyro
launched an Internet EFTPOS integration platform for the software industry in general. The payment terminal
communicates with the POS through the payment switch over public broadband using TCP-IP over Ethernet or
WiFi. Vendors can choose web service, net or com as interface.
This new architecture supports thin client and ASP models, complies with new scheme rules regarding integrated
EFTPOS over IP and allows zero-configuration, remote diagnostics and downloads.
30 June 2008 Tyro Certified Software Vendors
HCN PracSoft and BlueChip
Retail Pro
SVI/QQQ Systems
Riva/Aloha
Intouch/Aloha
CDC Systems
POS Solutions
DeliverIT
Unilink Data/Booknet
30 June 2009 further Tyro Certified Software Vendors
Barcode Solutions
Imagatec iPOS
Microsoft Dynamics RMS
MYOB Retail Manager
OsiPOS
Syscap Retail Systems
Torex DRS-POS
Tower Software
Another two dozen software vendors are in the discussion, negotiation, and integration or certification process. In
the Tyro business model for integrated EFTPOS the software or POS provider is the sales channel. This is
achieved by revenue sharing with our business partners.
As well as medium and larger retail enterprises, Tyro is providing integrated EFTPOS to small retailers who do not
need a complex business process – the “mum and pop” single store businesses such as grocers, hairdressers and
cafes. By June 2009, there were 53 merchant facilities deployed with motor dealers and 908 with general retailers
and others.
Toyota Financial Services
A stand-alone Tyro EFTPOS facility has been deployed to the Toyota Finance affiliated dealer network. Toyota has
specified Tyro integrate EFTPOS for their new version of Revolution Dealer Management System. The second
version planned to be deployed in the new year is to include Tyro integrated EFTPOS.
Also with the support of a Toyota dealer, Pentana (Reynold & Reynolds) is evaluating the implementation of
integrated EFTPOS with their Dealer Management System.
An increasing penetration of the Toyota dealer network would provide a platform to facilitate ongoing product and
program development complemented by Tyro’s specialist capabilities. As a consequence of the Global Financial
Crisis having impacted particularly hard the motor car industry, all projects have been either cancelled or put on
hold for the time being.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
5
Gift and Loyalty
Through partnership with Opticard, Tyro offers merchants greater revenue build up and increased customer loyalty
through personalised gift card programs. This year Tyro successfully rolled out the gift card program to the Collins
Book Group.
Tyro Projects: special applications
With completion of the Medicare development project, engineering resources have become available during the
year for further custom tailored payment solutions. The projects benefited from the immediate availability of Tyro’s
efficient and low cost end-to-end acquiring infrastructure, Tyro’s capability of integrating payment processing into
existing software solutions quickly using web services and agile development and Tyro’s readiness to share
revenues with partners providing access to their customer franchise.
Pure Commerce - Dynamic Currency Conversion
On September 10, 2008 Tyro and payment solutions vendor Pure Commerce started developing jointly a Dynamic
Currency Conversion (DCC) application for Tyro EFTPOS terminals.
DCC allows foreign cardholders to pay merchants with their credit card in their home currency denomination. With
DCC, the sale amount is converted from Australian dollars to the customer’s home currency with the exchange rate
fixed at the time of the transaction. The currency conversion fee is split between the Tyro, Pure Commerce, and the
merchant.
Increased customer satisfaction is one of the major benefits of DCC as customers know exactly how much they are
paying and there are no surprises in their credit card statements.
Pure Commerce provides the currency management as well as manages the sales and marketing of the Tyro DCC
solution to the Australian tourism and hospitality industries. The solution was launched in December 2008.
The Nuance Group
The Nuance Group is Australia’s leading operator of duty free stores across all major airports. Starting in April 2009,
Tyro and Pure Commerce deployed an integrated IP EFTPOS solution with DCC capability. This implementation
has cut significantly the processing times and increased the stability and robustness of the integration. The online
reporting supports the financial back office working through reconciliation, enquiry, charge back and analysis tasks.
National Billing Group Pty Ltd
This Melbourne based cab, limousine and payment services operator has launched a Tyro mobile payment solution
for secure real-time fare payment processing, reducing fraud associated with manual processing.
Tyro and National Billing Group have deployed over 1,000 terminals among cab and limousine operators in
Melbourne, Sydney and Brisbane. Another 500 terminals are currently in deployment. Tyro continues a dialogue
with larger retailer groups with the idea of providing them with customised and comprehensive solutions reducing
their overall infrastructure costs, reducing their interchange and scheme fee expense and increasing their efficiency
with integration and automation of the various payment instruments and channels.
Begin, Learn, Challenge, Win
As Tyro builds its reputation around successfully delivered projects, it is increasingly also approached by larger
prospects who are traditionally reluctant to engage with early phase companies but have sophisticated
requirements that need innovative solutions beyond the technological and organisational capabilities of incumbent
competitors. That was certainly the experience when winning Coca Cola after competing with all the major banks.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
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Leveraging the Internet
Our architecture allows larger retail organizations to cut their infrastructure cost by reducing communication
expense through the use of the public internet and by eliminating an expensive software and hardware middleware
layer used by incumbents for aggregation and integration purposes. Tyro is the only EFTPOS provider with the
capability of secure integrated credit and debit card processing in a “thin client” (web-based) infrastructure. Tyro
removes constraints and enables businesses, no longer tied to legacy technology, to radically improve the efficiency
of their processes.
Product Expansion
As Tyro moves forward, it plans to benefit from expansion into higher value added segments of the payment market
and from geographic expansion. One direction of growth is the extension of Tyro’s innovative platform into the card-
not-present channels, accepting payment transactions from websites, call centres and IVR systems.
Tyro Culture
Environmental Sustainability
Climate change is not simply an environmental issue – it is a key business and social issue impacting us all.
By the very nature of its innovative internet-based technology, Tyro is working towards a sustainable future. With
paperless statements, online reporting and web-based documentation, Tyro subscribes to a predominantly
paperless organisation. With the development of integrated receipt Tyro has expanded our own environmental
awareness beyond corporate headquarters to a growing proportion of our customer base.
We have implemented a company-wide recycling program and continue to search for new and efficient ways to
minimise our footprint on the environment.
Supporting our Employees
Tyro’s 41 employees are critical to the continued success of the company. Tyro endeavours to recruit, retain and
suitably reward the best people in the industry. Tyro uses a comprehensive recruiting and performance
management system.
As Tyro continues to grow, learning and development programs will be created with direct support to employees
through external and internal training. All employees participate in the Tyro Employee Share Plan. Today 100% of
Tyro’s employees have equity options in the company.
Security
Tyro is the first financial institution in Australia to have become PCI DSS (Payment Card Industry Data Security
Standards) certified by Visa.
Our highly sophisticated fraud engine pro-actively monitors and manages transactions in real time with military
grade encryption between our EFTPOS terminals and our core systems. The company continues to review and
improve our security failability and scalability to meet the growing volume of transactions, technological
development and partner requirements.
With card schemes mounting pressure on acquiring banks and the merchant community, fraud prevention is an
increasingly important consideration. Tyro is in the final phase of certifying for EMV or chip card acceptance with
Visa and MasterCard. While the banks upgrade their terminal infrastructure to higher security standards, Tyro
terminals, being of European design where these security standards are already mandatory, are ready for the EMV
upgrade planned before the end of the calendar year 2009.
The new security standards increasingly shift the vulnerability to the retailer. Tyro is working with merchants to
gauge data fraud risk and take appropriate action to protect their business and customers.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
7
Directors Report
The Board of Directors of MoneySwitch Limited has pleasure in submitting its report for the financial year ended 30
June 2009. The names and details of the company’s directors in office during the financial year and until the date of
this report are as follows. All directors were in office for the entire year unless otherwise stated.
Names, qualifications, experience and special responsibilities:
Rob Ferguson (Chairman)
Non-executive Director since 14 November 2005
Rob began his career as a research analyst for a Sydney stockbroker. He joined Bankers Trust Australia in 1972
and became managing director in 1985. Through his ongoing delivery of higher investment performance, he and his
team built BT Funds Management into the leader in the retail mutual funds business. By mid 1990s, BT had $50
billion under management. Rob became chairman of BT Funds Management in 1999 until he resigned the position
in 2002. Rob is Chairman of the Remuneration Committee and a member of the Audit Committee and the Risk
Committee.
Directorships held during the past 3 years:
• Rob is Chairman of IMF (Australia) Ltd
• Non-executive Chairman of Primary Health Care Limited
• Deputy Chairman of GPT Management Holdings Limited
• Deputy Chair of the Sydney Institute
• Director of the Lowy Institute.
Other previous directorships of listed or unlisted companies held by Rob Ferguson:
• Director of Westfield Holdings Ltd (1994 – 2004)
• Chairman of Vodafone Australia (2000 – 2002)
• Chairman of Nextgen Limited (2000 – 2004)
• Director of Racing, NSW (2004 – 2009)
Brad Banducci
Non-executive Director since 14 December 2006
Brad spent 15 years working in Australia, USA and New Zealand for the Boston Consulting Group, a leading global
management consulting firm specialising in working with the global 2000 companies to grow and transform their
business. Brad spent the last 8 years as a global vice president and director. He was the leader of the Sydney
Office from 2001-2003 and head of its Asia-Pacific Corporate Strategy and Finance Practice from 2003-2005. Brad
was CFO of MoneySwitch from August 2005 until October 2006. He is now CEO of Cellarmasters Group. Brad is
Chairman of the Risk Committee and a member of the Audit and Remuneration Committees.
Directorships held during the past 3 years:
•
•
MoneySwitch Limited
Kennedy Corporation (t/a Cellarmasters Group)
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
8
Dr Thomas Girgensohn
Non-executive Director since 9 March 2006
Thomas brings to Tyro Payments extensive Australian and international experience in the consulting sector. He was
previously managing partner (Australia and NZ) of the Boston Consulting Group and was former chairman of
Netcomm Ltd and TDG Logistics. He has a PhD in Business Administration from the University of Munich, a
Masters of Business Administration from the University of Saarbrucken and a Bachelor of Economics from the
University of Bochum, all in Germany. Dr Girgensohn is a current Fellow of the Australian Institute of Company
Directors. Thomas is Chairman of the Audit Committee and a member of the Remuneration and Risk Committees.
Directorships held during the past 3 years:
• Australian Co-operative Foods Limited (ceased)
• Beviron Pty Limited (ceased)
• Compass Resources Ltd (ceased)
• MoneySwitch Limited
• Stemcor Australia Pty Ltd
Kerry Roxburgh
Non-executive Director since 18 April 2008
Kerry was one of the founders, CEO then Chairman of E*Trade Australia until ANZ Banking Group acquired the
business in 2007. Kerry spent 10 years as an Executive Director of the Hong Kong Bank of Australia Group
including 5 years as managing director of their corporate finance subsidiary. He is non-executive chairman of
Charter Hall Limited, of eircom Holdings Limited and of Tasman Cargo Airlines Pty Limited. He is a non-executive
director of Ramsay Health Care, The Medical Indemnity Protection Society Group, Law Cover Insurance Pty
Limited, Professional Insurance Australia Pty Limited and of a private investment company.
Directorships held during the past 3 years:
• Ramsay Health Care Limited
• Charter Hall Limited
• eircom Holdings Limited
• Everest Financial Group Limited (ceased May 2009)
• E*trade Australia Limited (ceased June 2007)
• Everest Capital Investment Management Limited (ceased December 2006)
• MoneySwitch Limited
• BTIG Australia Limited (ceased January 2009)
Jost Stollmann
Director and Chief Executive Officer since 5 April 2005
Jost founded and grew the German system and network integrator CompuNet Computer AG into a US$1B
company, sold it to GE Capital and led the integration and expansion of GE Capital IT Solutions across the
continent as president of Europe. As Federal Shadow Minister of Economy and Technology, he ran and managed
his own election campaign contributing significantly to the landslide victory of the first German government of
Chancellor Gerhard Schröder.
Jost has not held any other directorships during the past 3 years.
Paul Rickard
Paul Rickard was appointed as a new independent non-executive Director of MoneySwitch Limited on 28 August
2009.
Until July 2009, Paul was the Executive General Manager & Chief Information Officer, Payments & Business
Technology for the Premium Business Services organisation at the Commonwealth Bank of Australia. The board
believes that Paul brings a tremendous amount of commercial acumen and experience in the delivery of IT projects
and services.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
9
Justin Mitchell
Company Secretary since 12 April 2007
Justin is the Audit and Compliance Manager at Tyro Payments. Justin has thirteen years experience in the financial
services and banking industry, having spent five years with Westpac in operational and project roles and most
recently as Risk and Audit Manager with EDS. During this time Justin has established internal audit functions, risk
frameworks and internal compliance controls and has developed and delivered enterprise-wide risk training.
Justin has not held any directorships during the past 3 years.
Interests in the shares and options of the company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of Tyro Payments were:
Director
Rob Ferguson#
Brad Banducci
Thomas Girgensohn^
Jost Stollmann
Kerry Roxburgh*
Shares
Options
11,569,524
2,392,545
3,437,523
29,704,061
440,182
1,328,631
1,439,570
683,150
8,648,656
-
# Includes Ordinary Shares and options held by Torryburn Superannuation Fund being an associate of Rob Ferguson
^ Includes Ordinary Shares and options held by Dacroft Pty Ltd and The Thomas Girgensohn Family Trust being associates of
Thomas J Girgensohn
* Shares jointly held with Alex Roxburgh as trustees for the Kerry & Alex Roxburgh Superannuation Fund
DIVIDENDS
No dividends have been declared or paid since the date of incorporation.
CORPORATE INFORMATION
Corporate Structure
MoneySwitch Limited trading as Tyro Payments (“Tyro”) is an unlisted public company. It is incorporated and
domiciled in Australia. The registered office of Tyro is Level 2, 125 York Street, Sydney, New South Wales, 2000.
Nature of operations and principal activities
Tyro Payments principal activities are:
• Providing electronic transaction acquiring services to Australian businesses (merchants). This includes the
authorisation, clearing and settlement of credit card, pin based debit card, EFTPOS, Easyclaim and giftcard
transactions.
• Developing the transaction switching and payment software and infrastructure required to support the
provision of credit and debit acquiring services.
There have been no significant changes in the nature of those activities during the year.
Employees
The company employed 41 employees as at 30 June 2009 (compared to 33 employees at 30 June 2008).
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
10
OPERATING AND FINANCIAL REVIEW
Overview
Tyro Payments was founded on 3 February 2003 by Paul Wood, Peter Haig and Andrew Rothwell. Two founders
Peter Haig and Andrew Rothwell have maintained their active association with Tyro Payments. 11 November 2004
Jost Stollmann met the founders and became a major investor, director and CEO. 17 November 2005 Rob
Ferguson joined as non-executive Director. He was Appointed Chairman of the Board on 21 September 2006.
The company positions itself as a specialized banking institution focused on merchant acquiring acting as a
developer of its own acquiring technology, as a processor of its own transactions and as acquirer of record with its
own banking authority.
Credit and Debit Acquiring Services
Tyro Payments is a specialist financial institution focussed on providing credit and debit acquiring services.
As such, the Company has implemented the necessary frameworks, policies, procedures and systems to
comply with the stringent prudential and regulatory requirements to perform electronic transaction
processing, clearing and settlement activities within the Australian banking sector.
Software development
Tyro Payments’s focus is on using proven modern technology to provide extremely reliable, secure, low
cost and flexible acquiring services to merchants and value-added resellers. As such, Tyro Payments owns
its own switching and payment software and has continued to develop this for further competitive advantage
over the course of the year.
Performance Indicators
The Board and Management monitor Tyro Payments’s overall performance - from risk management and overall
business positioning through to the performance of the Company - against software engineering development
plans, business performance operating plans and financial budgets.
The Board, together with Management, has identified key milestones and deadlines that are used to monitor Tyro
Payments’s development. Directors receive reporting for review prior to each Board and Committee meeting.
Operating Results for the Year
The Company reported an operating loss after providing for income tax of $5,113,175 (2008: $5,854,710 loss). This
result was in line with expectations given that the Company is still an emerging operational business.
2009
2008
Revenues
Operating Loss
Revenues
Operating Loss
Tyro Payments
$ 6,282,651
$ 5,113,175
$1,510,476
$5,854,710
Investments for Future Performance
The Company is investing significant human resources to develop its switching and payments system architecture.
It has also invested in the purchase of computer servers and networking and security monitoring equipment to
ensure sufficient scalability and performance of the production IT infrastructure to meet the expected demand for
acquiring services.
In parallel, the Company has been building the non-engineering capability of the business to support the sales and
operations functions necessary to offer acquiring services.
Capital Structure
During the period, the Company issued 85,842,931 ordinary shares on 22 October 2008 raising $5,150,575.86 of
additional capital. The capital was raised to ensure that Tyro Payments was fully compliant with the prudential
capital requirements imposed on it by the Australian Prudential Regulation Authority (APRA) and to fund on-going
operations. As at 30 June 2009 the Company had accounts payable of $285,692
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
11
Cash from Operations
Tyro Payments continued to operate at a loss for the 2008/09 financial year, in line with the fact that the Company is
still an emerging operational business. The Company had interest income of $349,152 for the period.
Funding
The Company had cash in bank of $3,830,633 at the end of the period.
Under Tyro Payments’s banking authority as a Specialist Credit Card Institution (SCCI), the Company is required by
APRA to hold Tier 1 capital in the greater of the following two amounts:
(a) $5 million; or
(b) 20% of the value of the risk weighted on and off balance sheet credit exposures of the company (at the time
of calculation).
The total Tier 1 capital held by Tyro Payments as at 30 June 2009 was $7,783,138. The company has always held
sufficient capital to meet APRA’s Tier 1 capital requirements.
Risk Management
Tyro Payments is prudentially supervised by the Australian Prudential Regulation Authority (APRA) and is required
to comply with prudential standards and provide quarterly capital adequacy and liquidity reporting. The Company
has undertaken substantive improvements to the risk management frameworks, policies, procedures and systems
required to ensure on-going compliance with regulatory requirements and to satisfy both business needs and
external stakeholders of its acquiring business.
Statement of Compliance
This report is based on the guidelines in The Group of 100 Incorporated Publication Guide to the Review of
Operations and Financial Condition.
Liquidity
Although the Company has made operating losses in prior years, this is inline with expectations given that Tyro
Payments was in the start-up and development phase of its business. Tyro Payments has sufficient cash and any
additional cash requirements will need to be met by fundraising activities for the 2009/10 financial year to pay its
debts as and when they become due and payable. It is also able to manage and control its expenses.
For these reasons the directors believe the Company is a viable going concern as the next phase of the business
plan, which is one of an emerging operational business, approaches.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs.
Significant events after balance date
The company has a standby letter of credit (SBLC) to MasterCard for AUD 1,400,000 (USD 1,126,265) secured by
an ASIC registered charge. At the time of gaining its principal membership with MasterCard, MasterCard identified
the SBLC as a way of mitigating the settlement risk exposure of MoneySwitch Limited. The SBLC was a condition
for principal membership. MasterCard has since reviewed the SBLC and has informed the company on 12 August
2009 that due to increased transaction volumes, the current SBLC is requested to be increased by another USD
840,000.
Likely developments and expected results
The directors predict that in the 2009/10 financial year Tyro Payments will continue to grow the acquiring business
and continue to expand the functionality of electronic transaction acquiring services. After a second full year of
operations, the financial modelling and assumptions behind the business model have been validated.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
12
SHARE OPTIONS
Unissued shares
As at the date of this report, there were 39,629,896 un-issued ordinary shares under options. Option holders do not
have any right, by virtue of the option, to participate in any share issue of the company.
Shares issued as a result of the exercise of options
During the financial year, no options have been exercised. Since the end of the financial year, no further options
have been exercised.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During or since the financial year, the company has not in respect of any person who is, or has been, an officer or
auditor of the 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.
During or since the financial year, the company has paid premiums in relation to a contract insuring all the directors
and officers of Tyro Payments against legal costs incurred in defending proceedings for conduct involving:
(a) a wilful breach of duty; or
(b) a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of
the Corporations Act 2001.
DIRECTORS’ MEETINGS
The number of meetings of directors (including meetings of committees of directors) held during the year and the
number of meetings attended by each director is as follows:
Number of meetings held during the year
Director
Rob Ferguson
Brad Banducci
Thomas Girgensohn
Kerry Roxburgh
Jost Stollmann
Board
Meetings
Audit
Committee
Risk
Committee
Remuneration
Committee
10
10
7
9
8
10
3
3
3
3
3
3
6
6
5
5
5
6
1
1
1
1
1
1
Committee Membership
As at the date of this report, the Company had an Audit Committee, a Risk Committee and a Remuneration
Committee of the Board of Directors. Members acting on the Committees of the Board during the year were:
Audit Committee
Risk Committee
Remuneration Committee
T Girgensohn (Chairman)
R Ferguson
B Banducci
K Roxburgh
B Banducci (Chairman)
T Girgensohn
R Ferguson
K Roxburgh
R Ferguson (Chairman)
B Banducci
T Girgensohn
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
13
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
Revenue
Fees and commission income
Fees and commissions expense
Net fees and commissions Income
Terminal and accessories sale
Terminal and accessories COGS
Net Terminal and Accessories Sale Income
Medicare Subsidy
Interest Income
Other Income
Net gain on financial instruments
Total Operating income
Less : Expenses
Engineering expenses
Operations expenses
Sales and marketing expenses
Administrative expenses
Impairment of inventory
Bad debt and chargeback loss expense
Total operating expenses
Operating loss before tax expense
Income tax expense
Net loss for the year
Note
2009
$
2008
$
2
2
2
2
2
2
2
2
3
4,760,168
(3,162,177)
1,597,991
674,255
(595,877)
78,378
499,075
1,021,116
(814,361)
206,755
23,462
(17,268)
6,194
349,152
465,898
55,254
4,809
670
186,918
2,580,520
870,574
1,828,118
2,742,894
541,000
2,435,662
38,842
107,179
7,693,695
1,950,676
1,993,576
484,566
2,302,254
-
(5,787)
6,725,284
(5,113,175)
(5,854,710)
-
-
(5,113,175)
(5,854,710)
The above Income Statement should be read in conjunction with the accompanying notes.
15
BALANCE SHEET
AS AT 30 JUNE 2009
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Held-to-maturity investment
Inventories
Total Current Assets
Non-current Assets
Available-for-sale investment
Property, plant and equipment
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade payables and other liabilities
Provisions
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
Note
2009
$
2008
$
4
5
6
7
8
9
10
12
13
14
14
14
7,384,983
101,478
88,755
-
527,400
8,102,614
117,745
1,300,563
1,418,307
3,759,808
107,580
95,719
1,791,218
445,724
6,200,049
129,618
1,304,390
1,434,008
9,520,921
7,634,057
1,251,853
224,111
1,475,964
421,378
131,859
553,237
1,475,964
553,237
8,044,957
7,080,820
26,733,899
5,471,373
(24,160,315)
21,536,912
4,473,963
(18,930,055)
8,044,957
7,080,820
The above Balance Sheet should be read in conjunction with the accompanying notes.
16
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2009
STATEMENT OF CASH FLOWS
Cash flows from operating activities
Payments to suppliers and employees
Medicare Subsidy received
Interest and fee income received
Terminals & Accessories Sale
Net cash used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investments
Proceeds from maturity of treasury bonds
Payments for purchase of treasury bonds
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Note
2009
$
2008
$
(9,429,310)
(6,502,875)
1,072,087
5,092,261
674,255
-
1,524,955
4
(2,590,707)
(4,977,920)
(841,341)
115,437
-
1,791,218
-
1,065,314
(546,245)
-
98,680
1,806,048
(1,791,218)
(432,735)
5,150,567
3,256,251
Net cash flows from financing activities
5,150,567
3,256,251
Net increase/ (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
3,625,174
3,759,809
(2,154,405)
5,914,213
Cash and cash equivalents at end of year
4
7,384,983
3,759,808
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
17
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2009
Attributable to equity holders of MoneySwitch Limited
Contributed
Equity
Retained
Earnings
Reserves
Total
Note
$
$
$
$
At 1 July 2007
Loss for the year
Total income and expense for the year
Issue of share capital
Share-based payments
Available-for-sale reserve
Transfer to general reserve for
credit losses
18,280,661
(13,030,429)
3,374,791
8,625,023
-
-
(5,854,710)
(5,854,710)
3,256,251
-
-
-
-
(44,916)
-
-
-
1,006,502
47,754
44,916
(5,854,710)
(5,854,710)
3,256,251
1,006,502
47,754
-
At 30 June 2008
21,536,912
(18,930,055)
4,473,963
7,080,820
Loss for the year
Total income and expense for the year
Issue of share capital
Share-based payments
Available-for-sale reserve
Transfer to general reserve for
credit losses
-
-
5,196,987
-
-
-
(5,113,175)
(5,113,175)
-
-
-
(117,085)
-
-
-
892,198
(11,873)
117,085
(5,113,175)
(5,113,175)
5,196,987
892,198
(11,873)
0
At 30 June 2009
14
26,733,899
(24,160,315)
5,471,373
8,044,957
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
18
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES
The significant policies which have been adopted in the preparation of this financial report are set out below:
The financial report of MoneySwitch Limited (the Company) was authorised for issue in accordance with a resolution of the directors on
14 September 2009.
MoneySwitch Limited is an unlisted public company, incorporated and domiciled in Australia.
(a) Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the Corporations Act 2001 and
Australian Accounting Standards.
Unless otherwise indicated, all amounts are expressed in Australian Dollars ($).
The financial report has been prepared on the basis of historical cost and except for some assets, as disclosed in this report, have been
measured at fair values.
(b) Going concern
The Company is in its third year of operation and has made an operating loss of $5,113,175. It commenced operation in April 2007 with
the launch of stand-alone EFTPOS facilities to the general public and has been incurring losses since.
The Company has a history of raising sufficient capital to meet the Company's expenditure and prudential capital needs. MoneySwitch
Limited is able to control its expenses. Should current cash levels not be sufficient to meet the Company's prudential capital
requirements, the Company will seek to raise additional funding through capital raising in the 2009/2010 financial year internally from
existing shareholders and/or externally from additional strategic investors as and when required. The company is not reliant on debt
funding to manage liquidity. Liabilities recognised relate to trade payables from the course of ordinary operations and unearned income
from the Medicare subsidy. No other lending has been sought from financial or other entities.
It is for the for the above reasons that the directors consider the company is able to pay its debts as and when they fall due, and
therefore the entity is able to continue as a going concern.
(c) Statement of compliance
The financial report complies with Australian Accounting standards issued by the Australian Accounting Standards Board and complies
with International Financial Reporting Standards issued by the International Financial Reporting Standards Board.
New Australian Accounting Standards which have recently been issued or amended but are not yet effective have not been adopted for
the financial year ended 30 June 2009. At the date of this report, the directors have not assessed the impact of these new Australian
Accounting Standards.
(d) Significant accounting judgements, estimates and assumptions
In applying the Company's accounting policies management continually evaluates judgements, estimates and assumptions based on
experience and other factors, including expectations of future events that may have an impact on the Company. All judgements,
estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to
management. Actual results may differ from the judgements, estimates and assumptions. Significant judgements, estimates and
assumptions made by management in the preparation of these financial statements are outlined as follows:
Share-based payments transactions - The Company recognises the cost of equity-settled transactions with employees by reference to
the fair value of the equity instruments at the date on which they are granted. The fair value is determined using the Black-Scholes
model, with the assumptions detailed in Note 11.
19
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(d) Significant accounting judgements, estimates and assumptions (cont'd)
Classification of and valuation of investments - The Company classifies its investments in listed securities as 'available -for-sale'
investments and movements in fair values are recognised directly in equity. The fair value of listed shares has been determined by
reference to published price quotations in an active market.
Estimation of useful lives of assets - The estimation of the useful lives of assets has been based on historical experience. In addition,
the condition of the assets is assessed at least once per year and considered against their remaining useful lives. Adjustments to useful
lives are made when considered necessary. Depreciation charges are included in Note 10.
(e) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must also be met before revenue is recognised.
(i) Fees income
The Company derives fees income from the following sources:
- Merchant service fee income is generated from merchant customers for credit and debit card acquiring services. Fees are charged to
merchants depending on the type of transaction being performed based on a percentage of transaction value or on a fixed amount per
transaction. Fees related to the payment transactions are recognised at the time transactions are processed. Interchange fee is
recognised as an expense instead of netting-off against merchant service fee income in the income statement.
- Revenue from gift-card transaction fees generated from merchants is based on a fixed fee per transaction and is recognised when
transactions are processed.
(ii) Interest income
- Interest income is recognised in the income statement on an accruals basis, using the effective Interest method. This method
measures the amortised cost of a financial asset and allocates the interest income over the relevant period using the effective interest
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying
amount of the financial asset.
(iii) Service income
- Unearned income is recognised on the balance sheet upon receipt of payment for contractual agreements with customers. Revenue is
brought to account in the income statement over time on a percentage completion basis.
(iv) Government/Medicare grant
- Government and government body grant income (such as Medicare) is recognised on a systematic basis over the term of the grant in
the income statement. Amounts not yet taken to the income statement are held as "unearned income" in trade payables and other
liabilities at the present value of future income to be recognised.
(f) Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the
arrangement conveys a right to use the asset.
Leases in which the Company retains substantially all the risks and benefits of ownership of the leased asset are classified as operating
leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised
as an expense over the lease term on the same basis as lease rental income. Operating lease payments are recognised as an income
or expense in the income statement on a straight-line basis over the lease term.
Deferred Income is recognised as a liability on the balance sheet on inception of the lease. The deferred lease incentive is then
recognized in the income statement on a straight line basis over the term of the lease, through lease expense.
20
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(g) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and settlement account balances,
presented on a net basis.
Settlement account balances result from timing differences in the Company's settlement processes with the schemes and the
merchants. These timing differences are primarily due to the timing between the funds received from the card issuers and settlement
payments made to the merchants.
Settlement funds due from/due to other financial institutions are generally convertible into cash within two (2) business days. Merchant
payables are settled on the next business day following the transaction processing date.
For the purposes of the Cash Flow Statement, cash and cash equivalents are reported net of outstanding bank overdrafts.
(h) Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at amortised
cost using the effective interest method, less an allowance for any uncollectible amounts.
Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when
identified. An allowance for doubtful debts is raised when there is objective evidence that the Company will not be able to collect the
debt.
(i) Available-for-sale and held-to-maturity investments
Available-for-sale and held-to-maturity investments are initially recognised at fair value plus transaction costs that are directly attributable
to the acquisition of the investment. After initial recognition, investments which are classified as available-for-sale are measured at fair
value. Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold,
collected or otherwise disposed of or until the investment is determined to be impaired, at which time the cumulative gain or loss
previously reported in equity is transferred to the income statement.
Investments that are intended to be held-to-maturity, after initial recognition at fair value, are subsequently measured at amortised cost
less provision for impairment in value. Amortised cost is calculated by taking into account any discount or premium on acquisition, over
the period to maturity. For investments carried at amortised cost, gains and losses are recognised in the income statement when the
investments are amortised, derecognised or impaired.
The Company currently does not have any investments categorised as held-for-trading.
Purchases and sale of investments are recognised on settlement date - the date on which the Company receives or delivers the asset.
(j) Inventories
The costs of purchase of inventories comprise the purchase price, import duties and other taxes (other than those subsequently
recoverable by the entity from the taxing authorities), and transport, handling and other costs directly attributable to the acquisition of
finished goods, materials and services. Trade discounts, rebates and other similar items are deducted in determining the costs of
purchase. Inventories are subsequently held at the lower of cost and their recoverable amounts. Impairment is assessed on an annual
basis (refer to Note 1(n)). Inventories are derecognised upon transfer to property, plant and equipment when leased out to merchant or
rights to benefits are transferred to a third party.
21
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(k) Income Taxes
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the
taxation authority. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the
balance sheet date.
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to recognise the deferred
tax asset or liability. An exemption is made for temporary differences arising from the initial recognition of an asset or a liability. No
deferred tax asset or liability is recognised in relation to temporary differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or loss or taxable profit or loss.
Deferred tax assets relating to tax losses, unused tax credits and deductible temporary differences are not carried forward as an asset
unless it is probable that the future taxable amounts will be available to utilise those temporary differences, losses and tax credits.
(l) Other Taxes
Goods and Services Tax (GST)
Revenues, expenses, assets and liabilities are recognised net of the amount of GST except for the following:
- when the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in which case the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
- trade receivables and trade payables are stated with the amount of GST included.
The net amount of GST recoverable from or payable to the taxation authority is included as part of other receivables or other payables in
the balance sheet.
Cash flows used in or from operating activities are included in the Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from or payable to the taxation authority are classified as
part of the Company's operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST.
(m) Acquisition of assets
All assets acquired including property, 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 any incidental costs directly attributable to the acquisition.
Expenditure is only recognised as an asset only when it is probable that future economic benefits associated with the asset will flow to
the Company and the cost of the item can be measured reliably. All other expenditure is expensed as incurred.
22
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(n) Recoverable amount of inventory and property, plant and equipment
The carrying amounts of inventory and property, plant and equipment valued on the cost basis are reviewed to determine whether they
are in excess of their recoverable amounts at balance date. If the carrying amount of such an asset exceeds its recoverable amount, the
asset is written down to its recoverable amount.
The write-down is expensed in the reporting period in which it occurs.
Recoverable amount of an asset is the greater of its fair-value-less-costs-to-sell and its value-in-use. In assessing value-in-use, the
estimated future cash flows are discounted to their present values using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
Where a group of assets working together supports the generation of cash inflows, their recoverable amounts are determined as part of
the cash-generating unit to which the group of asset belongs, unless the value-in-use of this group of assets can be estimated to be
close to its fair value.
(o) Property, plant and equipment
(i) Cost and Valuation
Property, plant and equipment are measured at cost less accumulated depreciation and any impairment in value (Note 1 (n)). The
Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing parts when the cost is
incurred and the recognition criteria are met. When each major inspection is performed, its cost is recognised in the carrying amount of
the item of property, plant or equipment, as a replacement, provided that the recognition criteria are satisfied.
(ii) Depreciation
Depreciation is provided on a straight-line basis over the estimated useful life of each specific item of property, plant and equipment.
Estimated useful lives are as follows:
Plant and equipment:
- EFTPOS machines
- Furniture and office equipment
- Computer equipment
2009
2008
3 years
5 years
4 years
3 years
5 years
4 years
The assets' residual values, remaining useful lives and depreciation methods are reassessed and adjusted, if appropriate at each
balance sheet date.
(iii) Impairment
The impairment testing for property, plant and equipment is conducted in accordance with the Accounting Policy in Note 1(n).
(iv) Derecognition and disposal
An item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected to arise from
continued use of the asset. Gains and losses on disposals are calculated as the difference between the net disposal proceeds and the
asset's carrying amount and are included in the income statement in the year the asset is derecognised.
23
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(p) Research and development costs
Research costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised
only when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or
sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability
of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its
development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried
at cost less any accumulated amortisation and accumulated impairment losses.
Any expenditure so capitalised is amortised over the period of expected benefit from the related project.
(q) Trade and other payables
Liabilities for trade and other payables are carried at cost, which is the fair value of the consideration to be paid in the future for goods
and services received, whether or not billed to the Company.
(r) Provisions and contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can
be made of the amount of the obligation.
If the impact of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific
to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities are not recognised in the balance sheet, but are disclosed in the relevant notes to the financial statements. They
may arise from uncertainty as to the existence of a liability or represent an existing liability in respect of which settlement is not probable
or the amount cannot be reliably measured. Only when settlement becomes probable will a liability be recognised.
The Company is contingently liable for processed credit card sales transactions in the event of a dispute between the cardholder and a
merchant. If a dispute is resolved in the cardholder’s favour, the Company will credit or refund the amount to the cardholder and charge
back the transaction to the merchant. If the Company is unable to collect the amount from the merchant, the Company will bear the loss
for the amount credited or refunded to the cardholder.
Management evaluates the risk of such transactions and estimates its potential loss for chargebacks based primarily on historical
experience and other relevant factors. If there is objective evidence that a loss on merchant accounts has been incurred, a provision is
maintained for merchant losses necessary to absorb chargebacks and other losses for merchant transactions that have been previously
processed and on which revenues have been recorded.
(s) General reserve for charge backs
The Company provisions against credit risk by a general reserve for charge backs. The Company estimates the reserve by using loss
rates published by card providers applied against operational flows over a 120 days period. The general reserve for charge backs is then
allocated as a seperate reserve within equity.
The methodology and assumptions used for estimating chargeback provisions are reviewed regularly to reduce any possibilities that
uncollectible chargebacks may not have been specifically identified.
24
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(t) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These
benefits include wages and salaries, annual leaves and long service leaves.
Entitlements arising in respect of salaries and wages, annual leaves and other employee benefits that are expected be settled within one
year have been measured at their nominal amounts.
Entitlements that arise in respect of long service leave which are expected to be settled more than 12 months after the reporting date
have been measured at their present values of expected future payments.
No provision has been made for sick leaves as all sick leaves are non-vesting and the average sick leave to be taken in the future by all
employees at reporting date is estimated to be less than the annual entitlement for sick leaves.
Employee benefit expenses arising in respect of the following categories:
- wages and salaries, non-monetary benefits, annual leave, long service leave and other leave benefits; and
- other types or employee benefits
are recognised in the income statement on a net basis in their respective categories.
(u) Share-based payment transactions
Share-based compensation benefits are provided to employees (including Key Management Personnel) via the MoneySwitch Stock
Option Plans, whereby employees render services in exchange for rights over the Company's shares.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value is determined internally using the Black-Scholes Option Valuation Model.
The cost of equity-settled transactions is recognised, together with any corresponding increase in equity, over the period in which the
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which
the vesting period has expired and the number of awards that, in the opinion of the Directors of the Company, will ultimately vest. This
opinion is based on the best available information at the reporting date. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest. There were no modifications to the terms of the outstanding options
during the financial year. Details of the types of share-based payments and their respective terms and vesting conditions are disclosed in
Note 11.
25
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(v) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are accounted in
contributed equity as a deduction, net of tax, from the proceeds of issue.
(w) Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the spot rate of exchange ruling at the
balance sheet date.
Non-monetary assets and liabilities are translated at their historic rates of exchange at their respective transaction dates.
(x) Derecognition of assets and liabilities
Assets and liabilities are derecognised from the balance sheet upon sale, maturity or settlement. Gains and losses arising from the
derecognition of these assets and liabilities are accounted in the income statement.
(y) Prepayments
Prepayments are recognised for amounts paid whereby goods have not transferred ownership to the company or where services have
not yet been provided. Upon receipt of good or the service the corresponding asset is recognised in the balance sheet or the expense is
recognised in the income statement.
26
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
2. REVENUE AND EXPENSES
The Operating loss before tax expense has been arrived at after accounting for the following items:
Fees and commission income
Easyclaim income
DCC commission
Merchant service fee
Debit card interchange fee
Terminal rental income
Development fee
Other fee income
Fees and commission expense
Interchange fees
Switching and settlement fees
Gift card processing expenses
Scheme fees
Commissions expense
Other expenses
Interest income
Interest on cash and cash equivalents
Interest on held-to-maturity investment
Net gain on available-for-sale investments
Miscellaneous share income
Engineering expenses
Employee benefits expense
Recruitment
Training
Depreciation
Other expenses
Operations expenses
Communication and hosting
Employee benefits expense
Depreciation
Software and hardware maintenance
Other expenses
27
2009
$
2008
$
33,622
79,836
3,728,242
166,302
549,771
194,442
7,954
4,760,168
2,074,756
72,365
(424)
726,439
215,469
73,573
3,162,177
349,152
-
349,152
-
-
784,092
18,176
118,044
94,000
6,804
1,021,116
460,730
12,564
2,520
262,132
59,260
17,155
814,361
355,499
110,399
465,898
670
186,918
1,764,850
13,476
-
38,074
11,718
1,828,118
411,256
1,147,378
660,040
112,990
411,230
2,742,894
1,867,523
37,194
6,806
37,849
1,304
1,950,676
357,544
989,259
436,540
41,458
168,774
1,993,576
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
2. REVENUE AND EXPENSES (cont'd)
Sales and marketing expenses
Marketing and branding
Employee benefits expense
Other expenses
Administrative expenses
Employee benefits expense
Professional fees
Interconnect and membership
Legal
Telephone and internet
Depreciation
Travel
Office supplies
Insurance
Provision for employee leave (adjustment)/entitlement
Recruitment
Utilities
Occupancy expenses
Share based payments expense
Shares issued in lieu of service period
Miscellaneous share expense
Other expenses
Extracted from the above are the following:
Employee benefits expense
Wages, salaries and commissions
Termination Payment
Superannuation
Depreciation of non-current assets
Property, plant and equipment
2009
$
2008
$
8,932
500,880
31,187
541,000
508,558
277,729
107,621
93,989
52,520
33,624
31,426
79,148
17,884
92,253
33,235
11,842
110,177
892,198
79,677
-
13,781
2,435,662
3,405,673
29,063
297,021
3,731,757
36,571
411,986
36,009
484,566
448,392
196,967
99,628
72,188
47,743
42,557
39,287
37,793
24,041
(2,807)
16,983
11,132
215,365
1,013,245
-
6,375
33,365
2,302,254
3,196,380
-
296,180
3,492,561
731,738
516,946
28
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
3. INCOME TAX
Operating loss for the year
Prima facie income tax benefit on the operating loss for the year at 30% income tax rate
(2008:30%)
Benefit of tax losses not brought to account
Tax effect of temporary differences and current year tax losses not brought to account
This future income tax benefit will only be obtained if:
(a) future taxable income is derived of a nature and amount sufficient to enable the benefit to
be realised;
(b) the conditions for deductibility imposed by taxation legislation continue to be complied
with;
(c ) no changes in taxation legislation adversely affect the Company in realising the benefit.
Income tax expense/(benefit) attributable to operating loss
2009
$
2008
$
(5,113,175)
(1,533,953)
(5,854,710)
(1,756,413)
1,533,953
1,756,413
-
-
-
-
-
-
-
-
-
-
The estimated potential future income tax benefit at year end calculated at 30% in respect of
tax losses not brought to account
6,018,905
4,484,952
No deferred tax asset/liability on any of the Company's tax losses and/or temporary differences have been brought to account as the
probability of any future taxable profits arising to recoup these losses and/or the reversal of temporary differences are considered to be
remote at reporting date.
4. CASH AND CASH EQUIVALENTS
Call deposits
Exchange settlement balance
Due from other financial institutions
Due to other financial institutions
Due to merchants
Cash in hand
3,830,633
8,064,043
6,000,179
(7,404,142)
(3,106,231)
500
7,384,983
2,635,559
1,651,265
1,908,024
(895,728)
(1,539,812)
500
3,759,808
Call deposits earn interest at floating rates based on daily bank deposit rates. The Reserve Bank of Australia (RBA) pays interest on
balances held in exchange settlement accounts at a rate of 25 basis points below the cash rate. Refer to note 16 for details of cash and
cash equivalents pledged as security.
29
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
4. CASH AND CASH EQUIVALENTS (cont'd)
Reconciliation of operating loss after tax to net cash flows used in operations
Operating loss for the year
Adjustments for:
Depreciation of non-current assets
(Adjustment) / Provision for employee entitlements
Share-based payments and share issuance expense
Other non-cash income
Other non-cash expense
Changes in assets and liabilities
(Increase) / Decrease in trade and other receivables
Increase in prepayments
Increase in inventory
Increase in trade and other payables
2009
$
2008
$
(5,113,175)
(5,854,710)
731,738
92,253
971,875
-
-
6,781
(26,293)
(81,676)
827,788
516,946
(2,807)
1,013,245
(191,727)
7,249
(7,889)
(95,719)
(441,237)
78,729
Net cash used in operating activities
(2,590,707)
(4,977,920)
5. TRADE AND OTHER RECEIVABLES
Trade debtors
Interest receivable
GST recoverable
Other receivables
83,497
4,292
11,784
1,905
101,478
14,001
72,548
21,032
-
107,580
The Company's ageing of trade and other receivables is as follows:
Trade and other receivables before
Impairment / Write off
Carring Value 2009 (Total $101,478
Current
$
73,126
-
73,126
1-30 days*
$
31-60 days*
$
61-90 days*
$
>90 days*
$
12,596
-
12,596
-
-
-
11,919
-
11,919
26,425
(22,588)
3,837
2008 (Total $107,580)
95,756
398
426
-
11,000
* These balances are past due net of impairment at balance sheet date.
Movements in the general reserve for credit losses account are detailed in Note 14 and the Company's accounting policy is outlined in
Note 1(s).
30
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
6. PREPAYMENTS
Prepayments
Prepaid remuneration expense
7. HELD-TO-MATURITY INVESTMENTS
Treasury bonds
8. INVENTORIES
Terminals and accessories
EFTPOS paper rolls
Impairment of inventory
9. AVAILABLE-FOR-SALE INVESTMENTS
2009
$
2008
$
88,755
-
88,755
62,461
33,258
95,719
-
1,791,218
554,821
11,421
(38,842)
527,400
439,976
5,748
-
445,724
Investment in VISA shares
117,745
129,618
These investments were acquired following the demutualisation of VISA International, as a result of which listed VISA shares were
issued to members of the VISA network. All VISA shares were listed on the New York Stock Exchange (NYSE) on 26th March 2008 with
VISA’s certificate of incorporation providing for the mandatory buy back of up to 80% of the common stock allocated to VISA members
out of IPO proceeds as soon as possible after listing.
31
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
10. PROPERTY, PLANT AND EQUIPMENT
Reconciliation of net carrying amounts at the beginning and end of the year:
Year ended 30 June 2008
At 1 July 2007
net of accumulated depreciation
and impairment
Additions
Disposals/transfers
Depreciation charge for the year
At 30 June 2008
net of accumulated depreciation
and impairment
At 1 July 2007
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
At 30 June 2008
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
Eftpos
Machines
$
Furniture
and Office
Computer
Equipment
Equipment $
$
Total
$
380,601
387,865
90,574
14,296
688,579
259,421
-
1,159,754
661,582
-
(218,611)
(28,127)
(270,208)
(516,946)
549,855
76,743
677,792
1,304,390
479,788
(99,187)
380,601
867,653
(317,798)
549,855
146,912
(56,338)
90,574
121,186
(44,443)
76,743
1,014,463
(325,884)
688,579
1,273,884
(596,092)
677,792
1,641,163
(481,409)
1,159,754
2,262,724
(958,334)
1,304,390
Reconciliation of net carrying amounts at the beginning and end of the year:
Eftpos
Machines
$
Furniture
and Office
Equipment $
Computer
Equipment
$
Total
$
Year ended 30 June 2009
At 1 July 2008
net of accumulated depreciation
and impairment
Additions/transfers
Disposals/transfers
Depreciation charge for the year
At 30 June 2009
net of accumulated depreciation
and impairment
At 1 July 2008
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
At 30 June 2009
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
549,855
793,898
(112,894)
(405,107)
76,743
22,122
(537)
(28,018)
677,792
25,321
-
(298,613)
1,304,390
841,341
(113,430)
(731,738)
825,752
70,310
404,500
1,300,563
867,653
(317,798)
549,855
1,501,796
(676,044)
825,752
121,186
(44,443)
76,743
136,093
(65,783)
70,310
1,273,884
(596,092)
677,792
1,299,205
(894,705)
404,500
2,262,724
(958,334)
1,304,390
2,937,095
(1,636,532)
1,300,563
During the year, a customer in the taxi industry bought the 203 terminals they were renting for $171,535.
32
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
11.SHARE-BASED PAYMENTS
The Company will provide benefits to employees and directors from time to time including share-based payments as remuneration for
service.
(a) MoneySwitch Stock Option Plan
The MoneySwitch Stock Option Plan was established to grant options over ordinary shares in the Company to employees or directors of
the company or to external consultants who provide services to the Company. The rules of the MoneySwitch Stock Option Plan provides
that the Board has the authority, in its discretion, and subject to such terms and conditions as it deems appropriate, to grant options to
directors, employees and consultants of the Company.
Options granted pursuant to the MoneySwitch Stock Option Plan may be exercised, in whole or part, subject to vesting terms and
conditions as indicated below:
Type of Option
Linear vesting schedule
Vesting Terms and Conditions
Options granted will vest in proportion to the time that passes linearly during the vesting schedule,
subject to maintaining continuous status as an employee or consultant with the Company during the
vesting schedule.
Service vesting schedule
The options with service vesting schedule may be exercised as to a set number of shares per
agreed day of consulting service, as defined in the specific option grant.
Fully vested at time of grant
Options may be exercised as to all shares from the vesting commencement date.
Other relevant terms and conditions applicable to options granted under the MoneySwitch Stock Option Plan include:
- all stock options granted under those plans had an exercise price equal to the fair value of the underlying ordinary shares on the date of
the grant.
- the term of each option grant shall be 10 years from the date of grant or such shorter term as provided in the Stock Option Grant
agreement. However, in the case of options granted to Optionholders who, at the time the options is granted, owns ordinary shares
representing more than 10% of the voting power of all classes of ordinary shares of the Company, the term of the Option Grant shall be 5
years from the grant date or such shorter term as may be provided in the Stock Option Grant agreement.
- each option entitles the holder to one ordinary share.
- all awards granted under the MoneySwitch Stock Option Plan are equity-settled.
33
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
11.SHARE BASED PAYMENTS (cont'd)
(b) Fair value of options
The weighted average fair value of the share options granted during the financial year is 4 cents (2008: 28 cents).
The fair value of each option grant was estimated on the date of the grant using the Black-Scholes Option Valuation Model. The
following table lists the assumptions used in determining the fair value of the options granted in the years ended 30 June 2009 and 30
June 2008:
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
2009
0%
74%
5.25%
2008
0%
74%
6.20%
A zero dividend policy assumption is used for valuing all option grants. This is in line with the Company's capital management policy and
growth strategy.
Expected volatility used is the historical volatility of the peer group. The expected volatility reflects the assumption that the historical
volatility is indicative of future trends, which may not necessarily be the actual outcome.
The average expected life for 10 year options is assumed to be 5 to 8 years from the grant date. For all other options with a contractual
life of 5 years or less, the expected life is assumed to be the total contractual life (years) from grant date to expiry date.
There were no options exercised during the year ended 30 June 2009 (2008: $0).
The weighted average remaining contractual life for the share options outstanding as at 30 June 2009 was 5.53 years (2008: 4.66 years).
The following table summarises further details of the stock options outstanding at 30 June 2009:
Range of Exercise Prices
Contractual life
Vesting conditions
6 cents to 55 cents
6 cents to 45 cents
6 cents to 55 cents
6 cents to 55 cents
Total
10 years or less
5 years and 10 years
3, 5 and 10 years
10 years or less
5 year linear vesting
12 months service
12 months linear vesting
Fully vested at time of grant
No of
Outstanding
Options
10,227,572
5,112,560
4,505,162
15,190,227
35,035,521
34
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
11.SHARE BASED PAYMENTS (cont'd)
The following table illustrates the number and weighted average exercise prices (WAEP) in Cents and movements of share options
during the year:
2009
No
2009
WAEP (Cents)
2008
No
2008
WAEP (Cents)
Linear vesting schedule
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited/expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Fully vested at time of grant
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited/expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Service vesting schedule
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Forfeited/expired during the year
Outstanding at the end of the year
Exercisable at the end of the year
Total outstanding at the end of the year
Total exercisable at the end of the year
32
9
43
22
21
39
6
10
16
16
13
6
10
11
11
15,130,516
4,026,085
-
(4,423,867)
14,732,734
8,236,623
4,757,797
13,043,478
-
(2,611,048)
15,190,227
15,190,227
4,182,222
2,434,782
-
(1,504,444)
5,112,560
5,112,560
35,035,521
28,539,410
35
30
-
31
32
32
39
43
-
37
39
39
13
-
-
-
13
13
8,371,880
5,545,647
-
(2,357,311)
11,560,216
7,785,700
7,944,943
1,410,960
-
(2,777,778)
6,578,125
4,755,499
4,851,112
-
-
(668,889)
4,182,222
4,182,222
22,320,563
16,723,421
The expense recognised in the income statement in relation to share-based payments is disclosed in Note 2.
35
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
12. TRADE PAYABLES AND OTHER LIABILITIES
Accounts payable
Unearned income
Rent payable
Accruals
Other liabilities
13. PROVISIONS
Annual leave provision
Balance at the beginning of the year
Additional (adjustment) / provision recognised during the year
Balance at the end of the year
2009
$
2008
$
285,692
573,012
60,677
147,925
184,546
1,251,853
131,859
92,253
224,111
37,181
45,000
99,000
146,530
93,667
421,378
134,666
(2,807)
131,859
Current
224,111
131,859
No chargeback losses have been provided at reporting date.
No liability for long service leave existed at reporting date.
14. CONTRIBUTED EQUITY AND RESERVES
(i) Ordinary Shares
Issued and fully paid
- 3,540,688 Ordinary shares paid at 10 cents each
- 10,475,433 Ordinary shares paid at 15 cents each
- 32,387,503 (2006/07:21,666,667) Ordinary shares paid at 30 cents each
- 8,111,112 Ordinary shares paid at 45 cents each
- 11,282,322 Ordinary shares paid at 55 cents each
- 133,334 Ordinary shares paid at 30 cents each
- 86,616,446 Ordinary shares paid at 6 cents each
354,069
1,571,315
9,716,251
3,650,001
6,205,276
40,000
5,196,987
26,733,899
354,069
1,571,315
9,716,251
3,650,001
6,205,276
40,000
-
21,536,912
36
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
14. CONTRIBUTED EQUITY AND RESERVES (cont'd)
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends when declared and, in the event of winding up of the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on ordinary shares held. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Movement in ordinary shares on issue
At 1 July 2007
Shares issued during the year:
-16 Nov 2007 equity raising at 30c each
- 7 Jan 2008 equity raising at 30c each
- 18 Apr 2008 shares issued as remuneration for service at 30c each
At 1 July 2008
Shares issued during the year:
- 22 Oct 2008 shares issued as remuneration for service at 6c each
- 22 Oct 2008 equity raising at 6c each
- 19 Jun 2009 shares issued as remuneration for service at 6c each
At 30 June 2009
(ii) Share-based payments reserve
Balance at the beginning of the year
Share-based payments expensed during the year
- Share options issued during the year
Balance at the end of the year
No:
Shares
$
55,076,222
18,280,661
7,000,000
3,720,836
133,334
65,930,392
20,752,586
65,090,345
773,515
152,546,838
2,100,000
1,116,251
40,000
21,536,912
1,245,155
3,905,421
46,411
26,733,899
2009
$
2008
$
4,370,351
3,363,849
892,198
5,262,549
1,006,502
4,370,351
37
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
14. CONTRIBUTED EQUITY AND RESERVES (cont'd)
Nature and purpose of reserve
The share-based payments reserve is used to record the value of share-based payments / benefits provided to any directors, employees
and consultants as part of their remuneration or compensation.
Refer to Note 11 for further details of these plans.
(iii) General reserve for credit losses
Balance at the beginning of the year
Transfer from retained earnings
Balance at the end of the year
55,858
117,085
172,943
10,942
44,916
55,858
Nature and purpose of reserve
The general reserve for credit losses has been created to satisfy The Australian Prudential and Regulation Authority (APRA) prudential
standards for Authorised Deposit-Taking Institutions (ADI) to maintain a general reserve for credit losses. The Company applies an
internal methodology to estimate the credit risk of its merchant customers and the maximum expected losses based upon a number of
assumptions concerning the performance of merchants in relation to the Company's credit risk grading system.
(iv) Available-for-sale investment revaluation reserve
Balance at the beginning of the year
Total revaluations for the year
Balance at the end of the year
2009
$
2008
$
47,754
(11,873)
35,881
-
47,754
47,754
Total reserves at the end of the year
5,471,373
4,473,963
(v) Retained losses
Movements in retained losses were as follows:
Retained losses at the beginning of the financial year
Net loss attributable to shareholders of the Company
Transfer to general reserve for credit losses
Retained losses at the end of the financial year
(18,930,055)
(5,113,175)
(117,085)
(24,160,315)
(13,030,429)
(5,854,710)
(44,916)
(18,930,055)
38
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
15. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
The Company's principal financial instruments include cash and cash equivalents, trade and other receivables, held-to-maturity
investments, available-for-sale financial assets and trade and other payables.
(i) Risk management
The Board is responsible for approving and reviewing the risk management strategy and framework and all risk management policies.
The Board also ensures senior management has identified all risks and that those risks are managed and controlled appropriately.
Senior management is responsible for implementing the Board's approved risk management strategy and for developing policies,
controls, processes and procedures to identify and manage risks in all of the Company’s activities. The Board has installed a Board Risk
Committee to assist the Board in fulfilling its responsibilities in the managment of risk. The Risk Committee overseas matters relating to
managing credit, capital, liquidity, operational and other aspects of risk management.
(ii) Risk controls
Risk is controlled through a system that identifies key risks, establishes controls to manage those risks (with an emphasis on preventive
control rather than detective control), and maintains a regular review process to monitor the effectiveness of the controls. Business risks
are controlled within tolerance levels set by the Chief Executive Officer and approved by the Board. A set of control and compliance
principles provide prudent standards for risk management.
(iii) Internal audit
The Company has an effective internal audit program to ensure that at all times the risks to which the company are exposed to in the
normal course of its business are minimised. This program of internal control and audit is reviewed and approved on a regular basis by
the Audit Committee.
(iv) Credit risk
Credit risk represents the loss that would impact the Company if counterparties failed to perform as contracted. Credit risk arises from
trade receivables, cash and cash equivalent balances, exposures to merchants and held to maturity investments. The maximum
exposure to credit risk is partly represented by the carrying amounts of the financial assets at reporting date. The Company's credit risk
management principles define the framework and core values which govern its credit risk taking activities and reflect the priorities
established by the Board.
From these principles flow the development of the target market strategies, underwriting standards and credit procedures which define
the operating processes. Portfolio-level counterparty limits are established by the use of a credit risk grading system, which segments
the Company's client portfolio into performing and non-performing sales. Credit risk grades are monitored on a regular basis. The
operation of a credit risk grading system coupled with ongoing monitoring, reporting and review controls allows the Company to identify
changes in the credit quality at client and portfolio levels, and take necessary corrective actions in a timely manner.
In addition, the Company is subject to the risk of credit card chargebacks in the event of a merchant failure. The maximum period of
credit risk the Company is potentially liable for such chargebacks is estimated to be 120 days after the date of the transaction. The
Company prudently manages the credit risk associated with its merchant portfolio both at an individual and a portfolio level, by
monitoring the concentration of risk by industry and type of counterparty.
It is the Company's policy that all merchants are subject to credit verification procedures including an assessment of their independent
credit rating, financial position, past experience and industry reputation. Risk limits are set for each individual customer in accordance
with parameters set by the Board. These risk limits are regularly monitored. The Company has an existing portfolio of low-risk merchant
categories and therefore minimal exposure to credit risk in terms of liabilities.
39
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2008
15. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd)
As part of equity, a general provision reserve for credit losses is raised to cover losses due to uncollectible chargebacks that have not
been specifically identified. The reserve is calculated based on estimation of potential credit risk in the merchant portfolio based on the
concentration of merchant transactions by industry type and the merchant counterparty's credit risk grading as per the Company's credit
risk policy.
(iv) Credit risk (cont'd)
The Company does not hold any credit derivatives of collaterals to offset its credit exposure. The Company trades only with recognised,
creditworthy third parties and as such no collaterals are requested nor is it the Company's policy to securitise any of its financial assets.
Credit exposures are monitored on an ongoing basis with the result that the Company's exposure to bad debts is not significant at
reporting date.
30 June 2009
Standard & Poors Credit Rating*
AAA
AA
A+
AA-
BBB+
unrated
30 June 2008
Standard & Poors Credit Rating*
AAA
AA
AA-
unrated
*Long-term credit rating
Cash and balances
with financial
institutions
Due from other
financial
institutions
Trade receivables
Held-to-maturity
financial assets
8,064,043
3,830,633
74,703
5,187,479
518,235
219,817
101,478
Cash and balances
with financial
institutions
Due from other
financial
institutions
Trade receivables
Held-to-maturity
financial assets
1,651,265
1,185,936
1,449,623
1,908,024
107,580
1,791,218
(v) Operational risk
Operational risk is the exposure to inadequate or failed internal processes, people and systems or external events. Operational risk
includes legal and regulatory risk, the risk of legal or regulatory penalty, financial or reputation loss arising from a failure to satisfy the
regulatory standards that apply to an Specialist Credit Card Institution (SCCI).
(vi) Market risk
Market risk is the risk the fair value or future cashflows of a financial instrument will fluctuate because of changes in market prices or
conditions, and comprises of interest rate risk, foreign currency risk and other price risk. The Company does not engage in financial
market trading activities nor assume any foreign exchange, interest rate or other derivative positions and does not have a trading book.
The Company does not undertake any hedging around the values of its financial instruments as any risk of loss is considered
insignificant to the operations of the Company.
Any government securities, bank bills or other marketable instruments that the Company holds are for investment or liquidity purposes
and held in the normal course of business in line with investment and liquidity guidelines. Each component of market risk is detailed
below as follows:
(a) Interest rate risk
The Company's financial assets and liabilities are subject to interest rate risk as their fair values will fluctuate in accordance with
movements in the market interest rates. The Company has exposure to interest rate risk on its variable interest-bearing cash and cash
equivalent balances. Held-to-maturity investments in treasury bonds are at fixed interest rate rates and as such are not exposed to any
interest rate risk fluctuations. All other financial assets and financial liabilities at reporting date are non-interest bearing.
40
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
15. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd)
(v) Market risk (cont'd)
The following net exposure to interest rate risk is to be reported at balance sheet date:
Cash and cash equivalents
Sensitivity analysis:
2009
2008
7,384,482
3,759,307
An increase of 100 basis points in the general cash rate (assuming every other factors being constant) will reduce the Company's loss
after tax and increase equity by $51,691 (2008:$26,315). A decrease of 100 basis points in the general cash rate will have an equal and
opposite effect.
(b) Foreign Currency risk
The Company's settlement of fees with card schemes and the purchases of inventory from foreign suppliers are transacted in foreign
currencies and any balances at reporting date are translated at the exchange rate prevailing the balance sheet date. At reporting date
the Company has some US Dollar and Euro exposure
The following USD and EUR net exposure is to be reported at balance sheet date:
AUD
2009
AUD
2008
Available-for-sale investments-VISA shares
Trade Payables
USD
EUR
117,745
180,391
129,618
-
Sensitivity analysis:
An appreciation of 15% of the US Dollar and EUR compared to the Australian Dollar (assuming every other factors being constant) will
reduce the Company's loss after tax and increase equity by $7,970 (2008: $1,852). A depreciation of 15% of the US Dollar and EUR
compared to the Australian Dollar will increase the company's loss after tax and reduce equity by $4,695 (2008:$1,799).
(c ) Other Price Risk
The Company's investment in available-for-sale financial assets are valued by way of reference to an underlying listed equity on the New
York Stock Exchange (NYSE) and as such its fair value will fluctuate in direct proportion with the quoted market price indicated.
However, this investment is not linked to any NYSE Market Index and any form of Price risk as a result of movements caused by any
specific index is considered minimal. No sensitivity analysis has been performed.
(vi) Liquidity risk
Liquidity risk is the risk that the Company will have insufficient liquidity to meet its obligations as they fall due. This risk is managed by
liquidity forecasting and scenario analysis, maintaining adequate cash resources for future expenditure and other financial commitments.
The Company's liquidity risk management policy aims to ensure that enough high quality liquid assets are always available for the
Company's cash flow and liquidity requirements.
The company forcasts cashflow and liquidity needs on a monthly basis with detailed scenarios analysis for critical funding periods such
as Christmas. The company also has a capital plan in place which outlines triggers for required funding should liquidity be required.
At balance sheet date, the board of directors determined that there was sufficient cash resources available to meet its anticipated
expenditure and other financial liabilities.
The Company does not have any contractual financial liabilities at reporting date.
41
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
15. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd)
(vii) Fair values
At reporting date the carrying amounts of all financial assets and financial liabilities approximate their fair values.
(viii) Capital Management
The Company maintains an actively managed capital base to cover risks inherent in the business. The adequacy of the Company's
capital is monitored using, among other measures, the rules and ratios established by the Australian Prudential Regulatory Authority
(APRA). The Company has aligned its objectives and processes in respect of risk management around the Prudential Regulations
requirements.
The Company has an internal policy target ratio above the prudential limit requirement and includes elements for risk exposures such as
market, operations and credit risk.
During the past year, the Company had complied in full with all its externally imposed capital requirements. The Company will maintain
Tier 1 Capital in the greater of 20% of risk weighted assets or $5 million net assets (2008:$5 million). In all planning, the Company
maintains a minimum of 22% capital adequacy or $5.5 million net assets to ensure there is a sufficient buffer to levels required under the
Company’s Specialist Credit Card Institution (SCCI) licence.
Regulatory capital
Tier 1 capital
Tier 2 capital
Total capital
Risk weighted assets
Tier 1 capital ratio
Total capital ratio
Actual
2009
Required
2009
Actual
2008
Required
2008
7,783,138
57,006
7,840,144
8,800,104
88%
89%
5,000,000
6,910,088
5,000,000
-
-
-
6,910,088
4,159,789
166%
166%
Below defines what APRA considers as Capital :
Tier 1 Capital consists of ordinary shares, general reserves, retained earnings, non-cumulative irredeemable preference shares
(approved by the Board and APRA) and other APRA approved Tier 1 Capital instruments.
Upper Tier 2 Capital consists of general provision for Doubtful Debts and other APRA approved Upper Tier 2 Capital instruments. Lower
Tier 2 Capital (not to exceed 50% of net Tier 1 Capital) consists of APRA approved Term Subordinated Debt.
The Company does not have any lower Tier 2 Capital.
42
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
2009
$
2008
$
16. COMMITMENTS AND CONTINGENCIES
(a) Operating lease commitments - Company as lessee
Future minimum rentals payable under the non-cancellable operating leases as at 30 June 2009 are as follows:
- Within one year
297,000
- After one year but not more than five years
173,250
470,250
297,000
470,250
767,250
The operating lease commitments relates to the lease of the Company's registered office located at 125 York Street, Sydney NSW. It is
a non-cancellable lease with a term of 4 years ending 28 February 2011. The lease agreement provides the Company with a right of
renewal on expiry at which time all terms will be renegotiated. Lease payments are subject to discretionary annual increases of 4%.
(b) Contingent liabilities -secured
(I) Irrecoverable standby letters of credit in favour of:
- MasterCard International
- Visa International
(ii) Bank Guarantee in favour of:
- Dukeville Pty Ltd, the lessor of 125 York Street, Sydney
1,400,000
140,000
1,400,000
140,000
245,025
1,785,025
245,025
1,785,025
(c) Assets pledged as security
The carrying amount of assets used to collateralise the Company's exposure to contingent liabilities is
as follows:
- Held to maturity investments
-
1,791,218
The Company has provided irrevocable standby letters of credit of $1,540,00, secure through fixed charges over term deposits with the
Commonwealth Bank of Australia, to MasterCard International and Visa International. These are one-year arrangements that are subject
to automatic renewal on a yearly basis. MasterCard International and Visa International, at their discretion, may increase the required
amounts of the standby letters of credit upon written request to the Company. The required amounts of the standby letters of credit are
dependent on MasterCard International's and Visa International's view of their risk exposure to the Company.
A bank guarantee is held with the Commonwealth Bank of Australia in relation to the lease arrangement for the office premises. The
amount represents 9 months rent and is refundable on expiry of the lease agreement, subject to satisfactory vacation of the leased
premises.
43
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
17. SUBSEQUENT EVENTS
The company has a standby letter of credit (SBLC) to Mastercard for AUD1,400,000 secured by an ASIC registered charge. The SBLC
was a condition for principal membership. Mastercard has since reviewed this and has informed the company on the 12 August 2009
that due to increased transaction volumes, the current SBLC is no longer adequate and will be increased by another USD 840,000.
18. SEGMENT REPORTING
The Company operates in one geographical segment being Australia and within one business segment being the provision of credit and
debit card acquiring services to merchants.
19. AUDITOR'S REMUNERATION
Amounts received or due and receivable by Ernst & Young:
- an audit of the financial report of the Company
- other services in relation to the Company
20. RELATED PARTY DISCLOSURES
(a) Key Management Personnel
2009
$
2008
$
135,960
-
135,960
103,469
3,605
107,074
The total cash remuneration paid to the Directors and Executives of the Company amounted to $847,784 (2008: $787,953). Details of
compensation paid to key management personnel including all monetary and non-monetary components are shown in the various tables
in this note.
Details of Key Management Personnel
Appointed
Resigned
Directors
Robert Ferguson
Jost Stollmann
Thomas Girgensohn
Bradford L Banducci
Kerry Roxburgh
Executives
Peter J Haig
John Hallis
Garry Duursma
Justin Mitchell
Non-executive Chairman
Chief Executive Officer
Non-executive
Non-executive
Non-executive
Title
VP Engineering
VP Operations
VP Sales and Marketing
Company Secretary
14-Nov-05
05-Apr-05
09-Mar-07
14-Dec-06
18-Apr-08
3-Feb-03
14-Feb-06
1-Jan-07
19-Mar-07
31-May-09
44
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
20. RELATED PARTY DISCLOSURES (Cont'd)
Compensation of Key Management Personnel
Short-term Benefits
Post Employment benefits (superannuation)
Other long-term benefits
Termination Benefits
Share-based Payments
Total
2009
$
2008
$
644,122
174,599
-
29,063
613,056
652,545
135,408
-
-
647,922
1,460,840
1,435,876
30 June 2009
Directors
Jost Stollmann
Rob Ferguson
Thomas Girgensohn
Bradford L Banducci
Kerry Roxburgh
Executives
Peter J Haig
John Hallis
Garry Duursma
Justin Mitchell
30 June 2008
Directors
Jost Stollmann
William J. Bartlett
Rob Ferguson
Thomas Girgensohn
Bradford L Banducci
Kerry Roxburgh
Executives
Peter J Haig
John Hallis
Mark Wood
Garry Duursma
Justin Mitchell
Short-term
Termination
Post
Share-based
Benefits
Salary &
fees ($)
Benefits
($)
Employment
Super-
annuation ($)
Payments
Options
($)
Total
($)
28,823
-
-
-
78,779
199,654
217,777
119,089
-
-
-
-
-
29,063
-
-
2,594
-
-
-
97,557
17,969
45,760
10,718
226,882
40,334
20,167
33,612
-
151,856
50,418
50,418
39,369
258,299
40,334
20,167
33,612
-
328,192
297,104
313,955
169,176
644,122
29,063
174,599
613,056
1,460,840
Short-term
Benefits
Salary &
fees ($)
Termination
Benefits
($)
Post
Employment
Super-
annuation ($)
Share-based
Payments
Options
($)
Total
($)
2,736
-
-
-
-
77,301
21,725
2,700
21,804
9,142
231,850
24,198
48,397
24,198
24,198
40,000
151,078
38,724
21,268
19,362
24,649
264,990
24,198
48,397
24,198
24,198
40,000
259,259
301,834
57,659
255,767
135,375
135,408
647,922
1,435,875
30,404
-
-
-
-
30,880
241,385
33,691
214,601
101,584
652,545
-
-
-
-
-
-
-
-
-
-
-
45
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
20. RELATED PARTY DISCLOSURES (cont'd)
30 June 2009
Directors
Jost Stollmann
Robert Alexander Ferguson
Thomas Girgensohn (Dacroft Pty Ltd)
Bradford Leon Banducci
Kerry Roxburgh
Executives
Peter and Nola Haig
Garry John Duursma
John Hallis (Mackbron Pty Ltd)
Total
Outstanding
at start
of year
20,845,105
5,258,413
3,170,856
1,505,849
133,334
2,072,222
483,758
434,633
33,904,170
On exercise
Outstanding
Shares
Issued
of
during the
options
year
8,858,956
6,311,111
266,667
886,696
306,848
1,667,088
515,615
(181,819)
18,631,162
at end
of year
29,704,061
11,569,524
3,437,523
2,392,545
440,182
3,739,310
999,373
252,814
52,535,332
-
-
-
-
-
-
-
-
Shareholdings of Key Management Personnel and their Related Entities Transactions
30 June 2008
Directors
Jost Stollmann
William and Delwyn Bartlett
Robert Alexander Ferguson
Thomas Girgensohn (Dacroft Pty Ltd)
Bradford Leon Banducci
Kerry Roxburgh
Executives
Peter and Nola Haig
Garry John Duursma
John Hallis (Mackbron Pty Ltd)
Mark Wood
Stephen Mitchinson
Total
Outstanding
Shares
On exercise
Outstanding
at start
of year
Issued
during the
year
of
options
at end
of year
18,137,332
1,107,555
5,143,836
3,170,856
1,505,849
2,072,222
317,091
380,304
666,667
58,136
32,559,848
3,335,067
-
-
-
-
133,334
-
166,667
54,329
-
-
3,689,397
-
-
-
-
-
-
-
-
-
-
-
21,472,399
1,107,555
5,143,836
3,170,856
1,505,849
133,334
2,072,222
483,758
434,633
666,667
58,136
36,249,245
46
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
20. RELATED PARTY DISCLOSURES (cont'd)
Option Holdings of Key Management Personnel
Outstanding
Granted
at start
as
of period
Remuneration
30 June 2009
Linear/Service vesting schedule
1-Jul-08
Options
exercised/
expired
during the year
Outstanding
Exercisable
at end
of period
2009
at end
of period
2009
Directors
Jost Stollmann
Rob Ferguson
Thomas Girgensohn
Bradford L Banducci
Executives
Executives
Peter J Haig
John Hallis
Garry Duursma
Justin Mitchell
Fully vested at time of grant
Directors
Jost Stollmann
Bradford L Banducci
Executives
Peter J Haig
John Hallis
Garry Duursma
Justin Mitchell
Total
2,506,364
285,153
161,411
460,914
1,339,921
1,120,746
909,091
213,043
6,996,643
272,727
109,091
1,327,273
309,091
109,091
25,820
2,153,093
9,149,736
5,869,565
1,043,478
521,739
869,565
-
-
-
-
8,304,347
-
-
3,913,043
1,304,348
1,304,348
652,174
7,173,913
15,478,260
-
-
-
-
-
909,091
909,091
-
1,818,182
-
-
1,000,000
-
1,000,000
2,818,182
8,375,929
1,328,631
683,150
1,330,479
1,339,921
211,655
-
213,043
13,482,808
272,727
109,091
4,240,316
1,613,439
1,413,439
677,994
8,327,006
8,375,929
1,328,631
683,150
1,330,479
1,339,921
211,655
-
213,043
13,482,808
272,727
109,091
4,240,316
1,613,439
1,413,439
677,994
8,327,006
21,809,814
21,809,814
47
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
20. RELATED PARTY DISCLOSURES (cont'd)
Option Holdings of Key Management Personnel (cont'd)
Outstanding
Granted
at start
as
of period
Remuneration
30 June 2008
Linear/Service vesting schedule
1-Jul-07
Options
exercised
during the
year
Outstanding
Exercisable
at end
of period
30-Jun-08
at end
of period
30-Jun-08
-
52,174
-
-
-
660,000
-
-
-
712,174
-
2,777,778
-
-
727,273
727,273
-
4,232,324
4,944,498
2,506,364
2,506,364
482,477
285,153
161,411
460,914
1,339,921
211,655
-
213,043
5,447,895
272,727
109,091
1,327,273
184,910
1,218,182
1,018,182
25,820
4,130,365
9,578,260
482,477
285,153
161,411
460,914
1,220,250
211,655
-
47,802
5,328,224
272,727
109,091
1,327,273
184,910
309,091
109,091
25,820
2,312,183
7,640,407
Directors
Jost Stollmann
William J Bartlett
Rob Ferguson
Thomas Girgensohn
Bradford L Banducci
Executives
Executives
Peter J Haig
John Hallis
Garry Duursma
Justin Mitchell
Fully vested at time of grant
Directors
Jost Stollmann
Bradford L Banducci
Executives
Peter J Haig
Mark Wood
John Hallis
Garry Duursma
Justin Mitchell
Total
1,456,364
1,050,000
430,303
76,457
57,063
356,566
1,478,182
211,655
-
89,091
4,155,681
109,091
2,886,869
1,109,091
75,819
1,727,273
1,636,364
-
7,544,507
11,700,188
104,348
208,696
104,348
104,348
521,739
-
-
123,952
2,217,431
163,636
-
218,182
109,091
218,182
109,091
25,820
818,182
3,035,613
48
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
20. RELATED PARTY DISCLOSURES (cont'd)
Option Terms and Conditions
Stock option grants may be exercised, in whole or in part, subject to vesting terms and conditions
indicated below:
Type
Type of Option
Linear vesting schedule
Terms and Conditions
Vesting Terms and Conditions
Options granted will vest in proportion to the time that passes linearly during the vesting schedule,
subject to maintaining continuous status as an employee or consultant with the Company during the
vesting schedule.
Service vesting schedule
The options with service vesting schedule may be exercised as to a set number of shares per
agreed day of consulting service, as defined in the specific option grant.
Fully vested at time of grant
Options may be exercised as to all shares from the vesting commencement date.
(b) Transactions with related parties
The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year.
These transactions were on commercial terms & conditions.
Related Party
Health Communications Network
Commissions Paid
56,505
There are no other amounts receivable from or payable to related parties.
49
corporate information
directors
Rob Ferguson (Chairman)
Brad Banducci
Thomas Girgensohn
Kerry Roxburgh
Jost Stollmann
company secretary
Justin Mitchell
registered office
Level 2
125 York Street
Sydney NSW 2000
(02) 8907 1700
solicitors
Cowell Clarke
Level 5, 63 Pirie Street
Adelaide SA 5000
(08) 8228 1111
auditors
Ernst & Young
680 George Street
Sydney NSW 2000
(02) 9248 5555
internet address
www.tyro.com
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2009
53