MoneySwitch Limited ABN 49 103 575 042
(Trading as Tyro Payments)
Annual report to shareholders
Year ended 30 June 2010
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
1
CONTENTS
PAGE
Building a specialised banking institution (SCCI) for merchants
Tyro Health
Tyro Retail
Tyro Culture
Directors’ Report
Independent Auditor Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flow
Statement of Changes in Equity
Notes to the Financial Statements for the year ended 30 June 2010
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 – Inventories
Note 8 – Available for Sale Investments
Note 9 – Property, Plant and Equipment
Note 10 – Share Based Payment Expense
Note 11 – Trade Payables and Other Liabilities
Note 12 – Provisions
Note 13 – Contributed Equity and Reserves
Note 14 – Financial Risk Management Objectives, Policies and Processes
Note 15 – Commitments and Contingencies
Note 16 – Leases
Note 17 – Segment Reporting
Note 18 – Auditor’s Remuneration
Note 19 – Related Party Disclosures
Directors’ Declaration
Independent Auditor Report
3
4
5
7
8
14
15
16
17
18
19
26
28
28
29
29
29
29
30
31
32
32
32
34
37
37
37
37
38
42
43
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
2
Building a specialised banking institution (SCCI) for merchants
MoneySwitch Limited trading as Tyro Payments (or “Tyro”) is an Australian banking institution specialised in
facilitating the acceptance of electronic payments on behalf of merchants and recurrent billers.
Tyro holds an authority under the Banking Act to carry on a 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 is also able to provide additional
services of BPAY and direct debit services. The Tyro solution is IP based and all transactions are processed in real
time.
As an acquirer only, Tyro does not issue cards, thereby eliminating any potential conflict of interest between serving
cardholders and merchants. At the end of June 2010, Tyro completed its third full fiscal year trading, since the
commercial launch of its EFTPOS facility on 26 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
Whilst Senior management has responsibility for Tyro’s day-to-day management, in line with legal requirements, the
Board of Directors (the board) has ultimate responsibility for Tyro’s sound and prudent management.
In line with best practice and in particular the requirements of APRA Prudential Standard 510: Governance, the
board establishes corporate policy and direction, supported by operational management. The board also
establishes advisory committees in respect of key aspects of the business which assist it in carrying out its
functions, as well as providing it with expert advice on key issues. 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 that 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 and suppliers.
The board currently consists of six directors, with a majority of four directors and the Chairman meeting APRA’s
independence requirements. These requirements are largely consistent with that of the Corporations Act. The
directors of the board have set standards of policy and conduct applicable at all levels of Tyro to ensure stringent
compliance with the Tyro Code of Conduct, the Corporations Act 2001, the National Privacy Principles 2001 and the
Banking Act 1959 and all other applicable regulation. In particular, the board is cognisant of its lifecycle and
requirements and the need to maintain access to independent expertise. Consequently it has established a policy of
board renewal that ensures it has the necessary expertise and general reinvigoration while also maintaining
ongoing understanding of Tyro’s business.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
3
Building the merchant portfolio
Tyro has grown his merchant portfolio in the health and general retailing space.
June 2009
June 2010
Growth
No of merchants or merchant outlets (MID)
1,431
2,991
No of credit and debit card transactions
929,124
1,696,299
No of Medicare Easyclaim transactions
96,000
590,000
Value of credit and debit card transactions
$78.8 million
$127.3 million
109%
83%
515%
62%
Tyro Health: Medical Practices and Pharmacies
Since launching, Tyro has focused on opportunities within primary care and related health markets. Specifically
Tyro has targeted the installed base of Health Communication Network (HCN). HCN is the leading Australian
provider of e-health and practice automation solutions and addresses both the General Practitioner and Specialist
Practitioner market place.
By end of June 2010, there were over 1000 medical practices using a Tyro facility. Tyro has also integrated with
several pharmacy-focused point of sale solutions. By June 2010, there were 61 pharmacies in production.
As at end of June 2010, 45% of Tyro’s revenue has come from this line of business.
Medicare Easyclaim
Tyro has deployed Australia’s first integrated Easyclaim platform. Easyclaim is a real-time Medicare claiming and
reimbursement 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 first 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.
Medicare statistics show that in June 2010 there were 8.4 million claims for GP Professional Attendances. During
the same month, Tyro processed 596,000 Easyclaim transactions.
By end of June 2010, 856 HCN practices used integrated Easyclaim. Tyro estimates that this is 32% of the current
HCN installed base.
Further Growth Opportunities
There are attractive growth opportunities in the corporate medical market place. These opportunities rely heavily on
the active participation of the target corporate customers to bring the revenue opportunities to fruition. Tyro will
pursue these opportunities in the next financial year.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
4
Tyro Retail
Tyro is continuing to develop its EFTPOS platform in line with its overall strategy of accessing merchants via Point
of Sale (POS) vendors. The introduction of the Tyro Terminal Adaptor (TTA) has meant that POS vendors no longer
have to implement the integration protocol directly; rather they communicate with the TTA, which is co-located on
the POS. This change has meant that integration with Tyro no longer requires weeks of effort but merely days and
integrations are far more robust.
The TTA is a high quality and easy to use application which has been very well received by the POS vendor
community as a whole. Tyro has a steady flow of POS vendors completing the integration process with Tyro and the
ease of use of the TTA has facilitated this trend.
As at 30 June 2009, Tyro had completed seventeen certified POS integrations. During the year Tyro completed
integration and certification with a further eight POS vendors. In the Tyro business model for integrated EFTPOS,
the POS vendor is the sales channel. This is achieved by revenue sharing with our business partners. One of the
key integrations delivered during the year is MYOB Retail Manager.
Recently Tyro has implemented a Product Management team. The objective of the team is a combination of
developing a road map for future development and providing business analyst support for current development.
Tyro Special Projects
During the reporting year, Tyro delivered an online tenant rental solution for Westfield Limited. The solution enables
Westfield tenants to pay rent or ad hoc charges via an online portal using a credit card.
Leveraging the Internet
Tyro architecture allows larger retail organizations to cut their infrastructure cost by reducing communication
expense through the use of their corporate network and/or 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
To date, the TTA only suits a generic retail environment (purchases and refunds). Tyro has recognised that if it is to
achieve greater success with this strategy, then it needs to become closer aligned to the workflow of POS systems.
Tyro has identified the hospitality sector as an attractive market segment.
There are several POS vendors in the hospitality sector with whom Tyro has integrated with or recently begun an
integration project. Tyro is working closely with the leading players in this sector to develop its differentiated
hospitality product. The solution is planned to be released in stages over the next financial year.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
5
Tyro Culture
Environmental Sustainability
Climate change is not simply an environmental issue, it’s a key business and social issue which impacts us all.
By the very nature of its innovative internet-based technology, Tyro is contributing to a more sustainable future with
paperless statements, integrated receipt, online reporting and web based documentation. With the development of
integrated receipt Tyro continues to further expand its environmental awareness beyond corporate headquarters to
a growing proportion of its customer base. Tyro has implemented a company wide recycling program and continues
to search for new and efficient ways to minimise its environmental footprint.
Supporting Employees
Tyro’s 51 employees are critical to its continued success. By utilising comprehensive recruitment and pre-screening
practices for all employees, along with at least annual performance management reviews, Tyro endeavours to
recruit, retain and suitably reward the best people in the industry. All employees are offered to participate in the
Employee Share Option Plan.
Security is top of mind in the financial industry
Over the last year Tyro has rolled out EMV (chip card) for Visa and MasterCard to over 91.1% of its terminals. A
measure of success in the application is the rate of fallback transactions, where the operator has been unsuccessful
in processing with the chip and instead falls back to using the magnetic strip. The industry average for Australia is
around 3%, while tyro is now down to 1.37%.
At one point in time Tyro had PCI DSS certification, but it has lapsed. The emphasis going forward is to regain PCI
compliance certification. There are 3 facets to PCI compliance:
• PCI PA which covers the payment application as used by merchants and includes the function on the
terminal and any integrated systems.
• PCI DSS which covers our internal operational procedures to ensure the security of cardholder data.
• Merchant PCI DSS, which has been placed by Visa and MC at the door of the acquirer.
Tyro is working with compliance assessors in order to address the first 2 points above, while building a strategy for
dealing with the third issue. A recent addition to Tyro’s product range is an "Electronic Imprint" capability, which is a
foundation technology for reducing the PCI DSS compliance issue for merchants in the card not present (non
eCommerce) environments.
Tyro has continued to have negligible fraud and its chargeback ratio is low by industry standards.
Availability
Tyro is committed to a highly available service. For example, if required, Tyro can switch to a redundant system via
an automated and transparent process, without the need of human intervention.
Tyro maintains two data centres (DC) at different locations, referred to as South and North. The North DC has been
configured and tested as a dedicated disaster recovery site and Tyro started processing transactions there in
November 2006. Historically the North DC has been used in ‘component failure’ scenarios. Testing highlighted the
various time to recover requirements across the total infrastructure. Tyro set out to move towards a live-live
infrastructure that takes all of the various availability requirements into account
Tyro has addressed single points of failure with its live-live initiative. Tyro’s live-live initiative has been successfully
implemented and tested. Tyro now has 4 financial transaction switches (SW) available and two additional integration
servers (INT) on standby.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
6
Directors Report
The Board of Directors of MoneySwitch Limited has pleasure in submitting its report for the financial year ended 30
June 2010. 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:
Kerry Roxburgh (Chairman)
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
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 and of a private investment company. Kerry is
a member of the Audit Committee, Remuneration Committee and Risk Committee.
Directorships held during the past 3 years:
• BTIG Australia Limited (ceased January 2009)
• Charter Hall Limited
• eircom Holdings Limited (ceased January 2010)
• E*trade Australia Limited (ceased June 2007)
• Everest Financial Group Limited (ceased May 2009)
• MoneySwitch Limited
• Professional Insurance Australia Pty Ltd (ceased June 2010)
• Ramsay Health Care Limited
Brad Banducci
Non-executive Director 14 December 2006 to 21 September 2009
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 help 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 Limited from August 2005 until October 2006. He is now CEO of Cellarmasters Group.
Directorships held during the past 3 years:
• Kennedy Corporation (t/a Cellarmasters Group) and subsidiary entities
• MoneySwitch Limited
Michael Cannon-Brookes
Non-executive Director since 10 December 2009
Michael is Co-Founder, CEO and director of Atlassian, an innovative, award-winning enterprise software company
based in Australia and established in 2002. Michael was named Australian IT Professional of the Year in 2004,
awarded 'Australian Entrepreneur of the Year' by Ernst & Young in 2006 and honoured by the World Economic Forum
in 2009 as a Young Global Leader. Michael is an active investor and advisor to technology-focused ventures. Michael
is Chairman of the Remuneration Committee.
Directorships held during the past 3 years:
• Atlassian Corporation Pty Limited & Subsidiaries
• MoneySwitch Limited
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
7
Rob Ferguson
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 a member of the Audit Committee, Remuneration Committee and the Risk Committee.
Directorships held during the past 3 years:
• Chairman of GPT Management Holdings Limited
• Deputy Chair of the Sydney Institute
• Director of the Lowy Institute.
• MoneySwitch Limited
• Non-executive Chairman of IMF (Australia) Ltd
• Non-executive Chairman of Primary Health Care Limited
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)
Dr Thomas Girgensohn
Non-executive Director since 9 March 2006
Thomas brings extensive Australian and international experience in the consulting sector to MoneySwitch Limited.
Previously managing partner (Australia and NZ) of the Boston Consulting Group and 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. Thomas is a current Fellow of the Australian Institute of Company Directors, 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)
• Make-A-Wish Australia
• MoneySwitch Limited
• Stemcor Australia Pty Ltd
Paul Rickard
Non-executive Director since 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. Paul is Chairman of the Risk Committee.
Directorships held during the past 3 years:
• MoneySwitch Limited
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
8
Jost Stollmann
Director and CEO 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.
Directorships held during the past 3 years:
• MoneySwitch Limited
Justin Mitchell
Company Secretary since 12 April 2007
Justin is Company Secretary and Audit and Compliance Manager at MoneySwitch Limited. Justin has over fourteen
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. His wide risk, compliance and audit
experience includes the design and set up of internal audit functions, design and implementation of risk frameworks
and internal compliance plans and controls. Justin has also developed and delivered enterprise-wide risk and
compliance 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 MoneySwitch Limited were:
Director
Kerry Roxburgh*
Brad Banducci%
Michael Cannon-Brookes
Rob Ferguson#
Thomas Girgensohn^
Paul Rickard
Jost Stollmann
Shares
Options
690,182
5,289,262
0
22,072,348
8,533,052
124,102
916,667
3,775,427
444,443
10,609,233
4,330,689
790,769
41,585,685
22,524,986
* Includes Ordinary Shares and options jointly held with Alex Roxburgh as trustees for the Kerry & Alex Roxburgh
Superannuation Fund being associates of Kerry Roxburgh.
% Includes Ordinary Shares and options held by Guy Leon Banducci and Lisa Marie Banducci being associates of Brad
Banducci.
# Includes Ordinary Shares and options held by Torryburn Superannuation Fund and Ordinary Shares and options jointly held
by Simon Peter Price and Rachel Emma Ferguson being associates of Rob Ferguson
^ Includes Ordinary Shares and options held by Dacroft Pty Ltd and The Girgensohn Family Trust being associates of Thomas
Girgensohn
DIVIDENDS
No dividends have been declared or paid since the date of incorporation.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
9
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’s 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 gift card
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
Tyro employed 51 employees as at 30 June 2010 (compared to 41 employees at 30 June 2009).
OPERATING AND FINANCIAL REVIEW
Overview
Tyro 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. In November 2004 Jost Stollmann became
a major investor, Director and CEO. Kerry Roxburgh joined as non-executive Director on 18 April 2008. He was
appointed Chairman of the Board on 19 February 2010.
Tyro positions itself as a specialised 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 is a specialist financial institution focused on providing credit and debit acquiring services. As such, it
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’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 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
Reviewing and approving all Tyro business strategies and significant policies, the board ensures that it is satisfied
that all aspects of management and operations conform to its strategy, direction and policies. Additionally, the board
monitors management practice and ensures that senior management adhere to set KPI’s in all spheres of the
business. It practices a rigorous program of board meetings, board committee meetings and the stringent review of
a range of regular management reports encompassing all aspects of the business, including finance, operations,
sales and strategy.
In particular, the board ensures that an effective system of risk management and internal control is established and
maintained, and that senior management proactively monitors the effectiveness of the risk management framework.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
10
Operating Results for the Year
Tyro reported an operating loss after providing for income tax of $1,823,959 (2009: $5,113,175 loss). This fell short
of the initial forecast result but remained in line with expectations given that the company decided to increase
capacity and resourcing in the third quarter of the period.
2010
2009
Revenues
Operating Loss
Revenues
Operating Loss
$14,298,130
$1,823,959
$6,282,651
$5,113,175
One of Tyro’s business partners agreed with Tyro to forego commission payments for the period from 1 January
2009 to 30 June 2010 in return for a heightened commission payment for the period from 1 July 2010 to 31
December 2011. The impact of this agreement decreased losses for fiscal year 2009 by $0.1 million and for fiscal
year 2010 by $0.9 million.
From July 2010, Tyro will pay a heightened commission which will increase commission expense for the following
eighteen months.
Investments for Future Performance
Tyro has invested significantly in human resources to develop its availability and speed of the 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 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, Tyro issued 61,018,733 ordinary shares on 11 December 2009 raising $3,661,123.98 of
additional capital. The capital was raised to ensure Tyro was fully compliant with prudential capital requirements
imposed by APRA and to fund on-going operations. As at 30 June 2010 Tyro had accounts payable of $267,688.
Cash from Operations
Tyro continued to operate at a loss for the 2009/10 financial year, in line with the fact that it is still an emerging
operational business. Tyro had interest income of $343,306, for the period.
Funding
Tyro had cash in bank of $4,428,938 at the end of the period.
Under its banking authority as a SCCI, Tyro is subject to a Prudential Capital Ratio (PCR) set by APRA. The
regulatory minima is set in three ways, by a PCR, minimum Tier 1 Ratio and a minimum Net Tier 1 Capital
requirement. The PCR is confidential and cannot be disclosed. APRA requires Tyro to always maintain a prudent
buffer above the regulatory minima. Internal limits are always above the capital minima and these internal limits
currently are:
Level 1
PCR
22%
Tier 1 Ratio
Net Tier 1 Capital
22%
$5.5 million
Total Tier 1 capital held as at 30 June 2010 was $10.5M. Tyro has always held sufficient capital to meet APRA’s
prudential capital requirements.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
11
Risk Management
Tyro is prudentially supervised by APRA and is required to comply with prudential standards and provide quarterly
capital adequacy and liquidity reporting. Tyro has undertaken improvements to its 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 Tyro has made operating losses in prior years, this is in line with expectations given that Tyro remains in
the start-up and development phase of its business. Tyro has significantly reduced its operating loss for the year
ended 30 June 2010 and holds sufficient cash 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 Tyro is a viable going concern as the next phase of the business plan
approaches; one of an emerging operational business.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs.
Significant events after balance date
There are no significant events after balance date.
Likely developments and expected results
The directors predict that in the 2010/11 financial year Tyro will continue to grow the acquiring business and
continue to expand the functionality of electronic transaction acquiring services.
SHARE OPTIONS
Unissued shares
As at the date of this report, there were 39,359,508 un-issued ordinary shares under options under the Employee
Share Option Plan.
There are a further 61,018,733 un-issued ordinary shares under options attached to the 11 December 2009 capital-
raising, these options expire on 11 December 2011.
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 one employee exercised 103,261 options. Since the end of the financial year, no further
options have been exercised.
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
12
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During or since the financial year, Tyro 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, Tyro has paid premiums in relation to a contract insuring all of its directors and
officers against legal costs incurred in defending proceedings for conduct involving:
(a) a willful 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
Kerry Roxburgh
Brad Banducci^
Michael Cannon-Brookes*
Rob Ferguson
Thomas Girgensohn
Paul Rickard
Jost Stollmann
Board
Meetings
Audit
Committee
Risk
Committee
Remuneration
Committee
7
6
3
4
6
6
7
7
3
2
2
2
2
3
3
3
5
4
2
3
4
3
5
5
2
2
1
1
2
1
2
2
^Brad Banducci resigned as director on 21 September 2009. Brad attended all meetings prior to his resignation during the year.
*Michael Cannon-Brookes was appointed on 10 December 2009. Michael has attended all meetings since his appointment
during the year.
Committee Membership
As at the date of this report, Tyro 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
K Roxburgh
P. Rickard (Chairman)
R Ferguson
T Girgensohn
K Roxburgh
M. Cannon-Brookes (Chairman)
K. Roxburgh
T. Girgensohn
R. Ferguson
MoneySwitch Limited ABN 49 103 575 042
Annual Report 2010
13
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
Note
2010
$
2009
$
2
2
2
2
2
2
2
2
3
12,648,612
(7,134,777)
5,513,835
733,200
(586,998)
146,202
4,760,168
(3,162,177)
1,597,991
674,255
(595,877)
78,378
573,012
499,075
343,306
349,152
109,354
55,254
2,584
670
6,688,294
2,580,520
2,074,291
3,033,126
841,269
2,527,378
22,543
13,644
8,512,251
1,828,118
2,742,894
541,000
2,435,662
38,842
107,179
7,693,695
(1,823,958)
(5,113,175)
-
-
(1,823,958)
(5,113,175)
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010
Continuing Operations
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
Other Comprehensive Income
Net fair value gain/(loss) on available for sale financial instrument
9,635
(11,873)
Total comprehensive income for the period
(1,814,323)
(5,125,048)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
15
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
Note
2010
$
2009
$
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2010
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
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
The above Balance Sheet should be read in conjunction with the accompanying notes.
9,564,904
457,601
111,447
280,882
10,414,834
127,380
1,340,348
1,467,728
7,384,983
101,478
88,755
527,400
8,102,614
117,745
1,300,563
1,418,307
11,882,562
9,520,921
940,747
262,438
1,203,185
1,251,853
224,111
1,475,964
1,203,185
1,475,964
10,679,377
8,044,957
30,401,219
6,184,977
(25,906,819)
26,733,899
5,471,373
(24,160,315)
10,679,376
8,044,957
4
5
6
7
8
9
11
12
13
13
13
16
STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 30 JUNE 2010
STATEMENT OF CASH FLOWS
Cash flows from operating activities
Payments to suppliers and employees
Medicare Subsidy received
Interest and fee income received
Dividend 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 maturity of treasury bonds
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Net cash flows from financing activities
Net increase/ (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
Note
2010
$
2009
$
(14,087,458)
-
12,765,973
2,584
733,200
(585,701)
(9,429,310)
1,072,087
5,091,591
670
674,255
(2,590,707)
4
(911,781)
10,083
-
(901,698)
(841,341)
115,437
1,791,218
1,065,314
3,667,320
5,150,567
3,667,320
5,150,567
2,179,921
7,384,983
3,625,174
3,759,809
Cash and cash equivalents at end of year
4
9,564,904
7,384,983
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 2010
Attributable to equity holders of MoneySwitch Limited
Contributed
Equity
Asset
revaluation
reserve
Employee
equity benefits
reserve
Retained
Earnings
Other
reserves
Total
Note
$
$
$
$
At 1 July 2008
21,536,912
47,754
4,370,351
(18,930,055)
55,858
7,080,820
Loss for the year
Other Comprehensive income
Total comprehensive income
Issue of share capital
Share-based payments
Available-for-sale reserve
Transfer to general reserve for credit losses
-
-
-
5,196,987
-
-
(11,873)
(11,873)
-
-
-
-
-
(5,113,175)
-
(5,113,175)
892,198
-
-
-
-
-
(5,113,175)
(11,873)
-
(5,125,048)
5,196,987
892,198
-
-
-
(117,085)
117,085
-
At 30 June 2009
26,733,899
35,881
5,262,549
(24,160,315)
172,943
8,044,957
Loss for the year
Other Comprehensive income
Total comprehensive income
Issue of share capital
Share-based payments
Available-for-sale reserve
Transfer to general reserve for credit losses
-
-
-
3,667,320
-
-
-
9,635
9,635
-
-
-
-
-
(1,823,958)
-
-
-
781,423
(1,823,958)
-
-
-
-
-
-
-
-
77,454
(77,454)
At 30 June 2010
13
30,401,219
45,516
6,043,972
(25,906,819)
95,489
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
(1,823,958)
9,635
-
(1,814,323)
3,667,320
781,423
-
-
-
10,679,377
18
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
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 16. September 2010.
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, has been measured at fair values.
(b) Going concern
The Company is in its fourth year of operation and has made an operating loss of $ 1,823,959. 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 internally
from existing shareholders and/or externally from additional strategic investors as and when required. 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
2010. At the date of this report, the directors have not assessed the impact of these new Australian Accounting Standards.
(d) New Accounting standards and Interpretations
(i) Changes in accounting policy and disclosure
The accounting policies adopted are consistent except as follows:
The company has adopted the new and amended Australian Accounting Standards and AASB interpretations as of 1 July 2009.
AASB 101 (Revised), AASB 2007-8 and AASB 2007-10 Presentation of Financial Statements and consequential amendments to other Australian Accounting Standards
AASB 2008-1 Amendments to Australian Accounting Standard – Share-based Payments: Vesting Conditions and Cancellations
AASB 2009-7 Amendments to Australian Accounting Standard – AASB 7
19
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(ii) Accounting standards and interpretations issued but not effective
Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been effective and have not been
adopted by the company for the annual reporting period ending 30 June 2010 outlined in the table below:
Application date
of standard
1-Jan-10
Impact on
Company
financial
report
Application
date for
Company
1-Jul-10
1-Jan-13
1-Jul-13
1-Jan-13
1-Jul-13
AASB 2009-5
AASB 9
AASB 2009-11
Reference
Title
Summary
Further
Amendments
to Australian
Accounting
Standards
arising from
the Annual
Improvements
Project
[AASB 5, 8,
101, 107, 117,
118, 136 &
139]
Financial
Instruments
Amendments
to Australian
Accounting
Standards
arising from
AASB 9
[AASB 1, 3, 4,
5, 7, 101,
102, 108, 112,
118, 121, 127,
128, 131, 132,
136, 139,
1023 & 1038
and
Interpretations
10 & 12]
The amendments to some Standards result in
accounting changes for presentation, recognition or
measurement purposes, while some amendments that
relate to terminology and editorial changes are
expected to have no or minimal effect on accounting
except for
The amendment to AASB 107 explicitly states that only
expenditure that results in a recognised asset can be
classified as a cash flow from investing activities.
AASB 9 includes requirements for the classification and
measurement of financial assets resulting from the first
part of Phase 1 of the IASB’s project to replace IAS 39
Financial Instruments: Recognition and Measurement
(AASB 139 Financial Instruments: Re
These requirements improve and simplify the approach
for classification and measurement of financial assets
compared with the requirements of AASB 139. The
main changes from AASB 139 are described below.
(a) Financial assets are classified based on (1)
the objective of the entity’s business model for
managing the financial assets; (2) the characteristics of
the contractual cash flows. This replaces the numerous
categories of financial assets in A
(b) AASB 9 allows an irrevocable election on
initial recognition to present gains and losses on
investments in equity instruments that are not held for
trading in other comprehensive income. Dividends in
respect of these investments that are a r
(c) Financial assets can be designated and
measured at fair value through profit or loss at initial
recognition if doing so eliminates or significantly
reduces a measurement or recognition inconsistency
that would arise from measuring assets or l
The revised Standard introduces a number of changes
to the accounting for financial assets, the most
significant of which includes:
► two categories for financial assets being amortised
cost or fair value
► strict requirements to determine which financial
assets can be classified as amortised cost or fair value,
Financial assets can only be classified as amortised
cost if (a) the contractual cash flows from the
instrument represent principal and interest
► an option for investments in equity instruments
which are not held for trading to recognise fair value
changes through other comprehensive income with no
impairment testing and no recycling through profit or
loss on derecognition
► reclassifications between amortised cost and fair
value no longer permitted unless the entity’s business
model for holding the asset changes
► changes to the accounting and additional
disclosures for equity instruments classified as fair
value through other comprehensive income
20
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(ii) Accounting standards and interpretations issued but not effective (cont'd)
Reference
Title
Summary
AASB 124 (Revised)
Related Party
Disclosures
(December
2009)
The revised AASB 124 simplifies the definition of a
related party, clarifying its intended meaning and
eliminating inconsistencies from the definition,
including:
Application date
of standard
1-Jan-11
Impact on
Company
financial
report
Application
date for
Company
1-Jul-11
(a) the definition now identifies a subsidiary and
an associate with the same investor as related parties
of each other;
(b) entities significantly influenced by one person
and entities significantly influenced by a close member
of the family of that person are no longer related parties
of each other; and
(c) the definition now identifies that, whenever a
person or entity has both joint control over a second
entity and joint control or significant influence over a
third party, the second and third entities are related to
each other.
A partial exemption is also provided from the disclosure
requirements for government-related entities. Entities
that are related by virtue of being controlled by the
same government can provide reduced related party
disclosures.
AASB 1053
Application of
Tiers of
Australian
Accounting
Standards
This Standard establishes a differential financial
reporting framework consisting of two Tiers of reporting
requirements for preparing general purpose financial
statements:
(a) Tier 1: Australian Accounting Standards; and
1-Jan-13
1-Jul-13
AASB 2010-2
AASB 2010-4
1-Jan-13
1-Jul-13
1-Jan-13
1-Jul-13
(b) Tier 2: Australian Accounting Standards –
Reduced Disclosure Requirements.
Tier 2 comprises the recognition, measurement and
presentation requirements of Tier 1 and substantially
reduced disclosures corresponding to those
requirements.
The following entities apply Tier 1 requirements in
preparing general purpose financial statements:
(a) for-profit entities in the private sector that have
public accountability (as defined in this Standard); and
(b) the Australian Government and State, Territory
and Local Governments.
This Standard gives effect to Australian Accounting
Standards – Reduced Disclosure Requirements. AASB
1053 provides further information regarding the
differential reporting framework and the two tiers of
reporting requirements for preparing general purpose
Amendments
to Australian
Accounting
Standards
arising from
reduced
disclosure
requirements
Further
Amendments
to Australian
Accounting
Standards
arising from
the Annual
Improvements
Project [AASB
1, AASB 7,
AASB 101,
AASB 134
and
Interpretation
13]
Emphasises the interaction between quantitative and
qualitative AASB 7 disclosures and the nature and
extent of risks associated with financial instruments.
Clarifies that an entity will present an analysis of other
comprehensive income for each component of equity,
either in the statement of changes in equity or in the
notes to the financial statements.
Provides guidance to illustrate how to apply disclosure
principles in AASB 134 for significant events and
transactions
Clarify that when the fair value of award credits is
measured based on the value of the awards for which
they could be redeemed, the amount of discounts or
incentives otherwise granted to customers not
participating in the award credit scheme, is to be at
21
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(e) 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 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.
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.
(f) 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.
- Revenue from processing Medicare Easyclaim 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.
(g) 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 recognised in the income statement on a
straight line basis over the term of the lease, through lease expense.
(h) 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 generally 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.
22
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(i) 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.
(j) Available-for-sale Investments
Available-for-sale investments are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition of the investment. After initial
recognition these investments 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.
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.
(k) 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 merchants or rights to
benefits are transferred to a third party.
(l) 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.
(m) 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.
(n) 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.
(o) 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.
23
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(o) Recoverable amount of inventory and property, plant and equipment (cont'd)
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.
(p) 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 terminals
- Furniture and office equipment
- Computer equipment
2010
2009
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.
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.
24
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
1. STATEMENT OF ACCOUNTING POLICIES (cont'd)
(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 a multiple of historical losses over a
rolling 120 day period of transaction values. The general reserve for charge backs is then allocated as a separate 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.
(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 leave and long service leave.
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 leave as all sick leave is 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 Employee Share Option Plan, 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.
(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 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.
25
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
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 expense
Interest income
Interest on cash and cash equivalents
Other Income
Gain or Loss on disposal of PPE
Foreign Currency Gain/Loss
Net gain on available-for-sale investments
Miscellaneous share income
Engineering expenses
Employee benefits expense
Recruitment
Depreciation
Other expenses
Operations expenses
Communication and hosting
Employee benefits expense
Depreciation
Software and hardware maintenance
Other expenses
2010
$
2009
$
1,091,024
245,482
9,455,544
531,204
1,155,055
125,999
44,304
12,648,612
4,865,541
270,641
7,541
1,647,771
241,347
101,936
7,134,777
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
343,306
343,306
349,152
349,152
(2,615)
111,969
109,354
55,254
-
55,254
2,584
670
1,962,536
57,995
32,910
20,850
2,074,291
331,065
1,259,919
785,284
201,380
455,478
3,033,126
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
26
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
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
Actual Chargeback (gains)/losses
Insurance
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
2010
$
2009
$
23,680
773,083
44,506
841,269
8,932
500,880
31,187
541,000
687,762
335,777
128,559
116,873
53,360
41,103
22,641
48,703
-
40,872
1,873
19,043
119,678
781,423
-
-
91,386
2,527,378
508,558
277,729
107,621
93,989
52,520
33,624
31,426
79,148
-
17,884
33,235
11,842
110,177
892,198
79,677
-
13,781
2,435,662
4,075,773
15,990
362,873
4,454,636
3,405,673
29,063
297,021
3,731,758
859,297
516,946
27
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
3. INCOME TAX
(a) Income tax expense
The major components of income tax expenses are
Income statement
Current income tax
Current income tax charge
Derecognition of deferred tax asset from tax losses*
Deferred income tax
Deferred income tax relating to origination and reversal of temporary differences
Derecognition of deferred income tax from temporary differences*
Income tax expense reported in the statement of comprehensive income
(b) Amount charged or credited directly to equity
Deferred tax on unrealised gain/(loss) on available-for-sale investment
Derecognition of deferred income tax*
Income tax expense reported in equity
(c) Reconciliation between tax expense recognised in statement of
comprehensive income and tax expense calculated per the statutory income tax
rate
Accounting profit before income tax
At the statutory income tax rate of 30%
Non taxable income
Non deductible expenditure
Other
Derecognition of deferred income tax*
Total
(d) Recognised deferred tax assets and liabilities
(i) Deferred tax assets
Property plant and equipment
Provisions and accruals
Available-for-sale investments
Unearned Income
Other
(ii) Deferred tax liabilities
Property plant and equipment
Prepayments
Available-for-sale investments
Net deferred tax asset/(liability) prior to derecognition
Derecognition of deferred income tax from temporary differences*
Net deferred tax asset recognised in the statement of financial position
2010
$
2009
$
(305,870)
305,870
(1,112,318)
1,112,318
(136,145)
136,145
-
(270,004)
270,004
-
2,891
(2,891)
-
(3,562)
3,562
-
(1,823,958)
(547,187)
-
238,404
(133,231)
442,014
-
(5,113,175)
(1,533,953)
-
293,315
(141,683)
1,382,321
-
125,432
10,487
-
-
1,288
137,207
-
1,062
2,891
3,953
131,332
(131,332)
-
36,131
41,372
3,562
171,905
21,764
274,734
-
1,168
-
1,168
273,566
(273,566)
-
* The company has not recognised any deferred tax on the basis that it does not meet the requirements under AASB 112 "Income Taxes"
4. CASH AND CASH EQUIVALENTS
Term Deposit
Call deposits
Exchange settlement balance
Due from other financial institutions
Due to other financial institutions
Due to merchants
Cash in hand
1,525,285
2,903,653
7,606,070
6,625,445
(4,916,722)
(4,179,327)
500
9,564,904
-
3,830,633
8,064,043
6,000,179
(7,404,142)
(3,106,231)
500
7,384,983
28
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
4. CASH AND CASH EQUIVALENTS (cont'd)
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 15 for details of cash and cash equivalents pledged as security.
Term deposits earn interest based on an agreed rate and term.
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
Share-based payments and share issuance expense
Gain / Loss on disposal of property plant and equipment
Changes in assets and liabilities
(Increase) / Decrease in trade and other receivables
(Increase) / Decrease in prepayments
(Increase) / Decrease in inventory
Increase /(Decrease) in trade and other payables
2010
$
2009
$
(1,823,959)
(5,113,175)
859,297
781,423
2,615
(353,094)
(22,692)
246,518
(275,809)
731,738
971,875
-
6,781
(26,293)
(81,676)
920,041
Net cash used in operating activities
(585,701)
(2,590,707)
5. TRADE AND OTHER RECEIVABLES
Trade debtors
Interest receivable
GST recoverable
Other receivables
437,973
17,852
-
1,776
457,601
83,497
4,292
11,784
1,905
101,478
The Company's ageing of trade and other receivables is as follows:
Trade and other receivables before impairment
Carrying Value 2010 (Total $457,601)
Current
$
191,541
1-30 days*
$
144,183
31-60 days*
$
119,654
61-90 days*
$
>90 days*
$
880
1,344
2009 (Total $101,478)
73,126
12,596
-
11,919
3,837
* 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).
6. PREPAYMENTS
Prepayments
7. INVENTORIES
Terminals and accessories
EFTPOS paper rolls
Impairment of inventory
8. AVAILABLE-FOR-SALE INVESTMENTS
2010
$
2009
$
111,447
111,447
88,755
88,755
295,142
8,285
(22,544)
280,882
554,821
11,421
(38,842)
527,400
Investment in VISA shares
127,380
117,745
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.
29
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
9. PROPERTY, PLANT AND EQUIPMENT
Reconciliation of net carrying amounts at the beginning and end of the year:
Year ended 30 June 2009
At 1 July 2008
net of accumulated depreciation
and impairment
Additions
Disposals/transfers
Depreciation 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
Eftpos
Terminals
$
Furniture
and Office
Equipment $
Computer
Equipment
$
Total
$
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
Reconciliation of net carrying amounts at the beginning and end of the year:
Eftpos
Terminals
$
Furniture
and Office
Equipment $
Computer
Equipment
$
Total
$
Year ended 30 June 2010
At 1 July 2009
net of accumulated depreciation
and impairment
Additions/transfers
Disposals/transfers
Depreciation for the year
At 30 June 2010
net of accumulated depreciation
and impairment
At 1 July 2009
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
At 30 June 2010
Cost or fair value
Accumulated depreciation and impairment
Net carrying amount
825,752
780,131
(12,223)
(584,161)
70,310
27,200
-
(28,217)
404,500
103,974
-
(246,919)
1,300,563
911,305
(12,223)
(859,297)
1,009,498
69,294
261,556
1,340,348
1,501,796
(676,044)
825,752
2,254,817
(1,245,319)
1,009,498
136,093
(65,783)
70,310
159,121
(89,827)
69,294
1,299,205
(894,705)
404,500
1,403,179
(1,141,624)
261,556
2,937,095
(1,636,532)
1,300,563
3,817,118
(2,476,770)
1,340,348
Fully depreciated assets as at 30th June 2010 $108,713 (2009 : $104,417)
30
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
10.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) Employee Share Option Plan
The Employee Share 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.
Options granted pursuant to the Employee Share Option Plan may be exercised, in whole or part, subject to vesting terms and conditions as indicated below:
Type of Option
Linear vesting schedule
Service 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.
The options vest according to a period of service may be exercised as to a set number of shares per agreed day of
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 Employee Share Option Plan include:
- 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.
- Each option entitles the holder to one ordinary share.
- All awards granted under the Employee Share Option Plan are equity-settled.
(b) Fair value of options
The weighted average fair value of the share options granted during the financial year is 6 cents (2009: 4 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 2010 and 30 June 2009:
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
2010
0%
74%
5.79%
2009
0%
74%
5.25%
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 7 year options is assumed to be 5 years from the grant date. The expected life for 10 year option is assumed to be 5 - 8 years. For all other
options with a contractual life of 1 - 5 years or less, the expected life is assumed to be the total contractual life (years) from grant date to expiry date.
There were 103,261 options exercised during the year ended 30 June 2010 (2009: 0).
The weighted average remaining contractual life for the share options outstanding as at 30 June 2010 was 5.27 years (2009: 5.53 years).
The following table summarises further details of the stock options outstanding at 30 June 2010:
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
18,870,321
2,634,782
10,891,826
21,782,169
54,179,098
31
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
10.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:
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
2010
No
2010
WAEP (Cents)
2009
No
2009
WAEP (Cents)
22
8
6
34
15
16
16
6
55
10
10
11
16
6
6
14,732,734
17,065,770
(103,261)
(1,933,096)
29,762,147
14,942,557
15,190,227
6,847,827
-
(255,885)
21,782,169
21,782,169
5,112,560
-
-
(2,477,778)
2,634,782
2,634,782
54,179,098
39,359,508
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
The expense recognised in the income statement in relation to share-based payments is disclosed in Note 2.
11. TRADE PAYABLES AND OTHER LIABILITIES
Accounts payable
Unearned income
Rent payable
Accruals
Other liabilities
12. PROVISIONS
Annual leave provision
Balance at the beginning of the year
Provision during the year
Leave taken during the year
Balance at the end of the year
Current
No chargeback losses have been provided at reporting date.
No liability for long service leave existed at reporting date.
13. CONTRIBUTED EQUITY AND RESERVES
(i) Ordinary Shares
Issued and fully paid
Ordinary shares paid at 6 cents each
Ordinary shares paid at 10 cents each
Ordinary shares paid at 15 cents each
Ordinary shares paid at 30 cents each
Ordinary shares paid at 45 cents each
Ordinary shares paid at 55 cents each
147,738,440
3,540,688
10,475,433
32,520,837
8,111,112
11,282,322
2010
$
267,688
-
22,355
297,866
352,838
940,747
2009
$
285,692
573,012
60,677
147,925
184,546
1,251,853
224,111
74,572
(36,245)
262,438
131,859
122,504
(30,251)
224,111
262,438
224,111
8,864,306
354,069
1,571,315
9,756,251
3,650,001
6,205,277
30,401,219
5,196,987
354,069
1,571,315
9,756,251
3,650,001
6,205,276
26,733,899
32
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
13. 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 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 1 July 2009
Shares issued during the year:
- 11 Dec 2009 equity raising at 6c each
- 7 May 2010 shares exercised at 6c each
At 30 June 2010
(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
$
65,930,392
21,536,912
20,752,586
65,090,345
773,515
152,546,838
61,018,733
103,261
213,668,832
1,245,155
3,905,421
46,411
26,733,899
3,661,124
6,196
30,401,219
2010
$
2009
$
5,262,549
4,370,351
781,423
6,043,972
892,198
5,262,549
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 10 for further details of these plans.
(iii) General reserve for credit losses
Balance at the beginning of the year
Transfer (to) / from retained earnings
Balance at the end of the year
172,943
(77,454)
95,489
55,858
117,085
172,943
The general reserve for credit losses has been created to satisfy 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 and actual experience.
(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
Total reserves at the end of the year
(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
2010
$
2009
$
35,881
9,635
45,516
47,754
(11,873)
35,881
6,184,977
5,471,373
(24,160,315)
(1,823,958)
77,454
(25,906,819)
(18,930,055)
(5,113,175)
(117,085)
(24,160,315)
33
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
14. 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 management of risk. The Risk Committee overseas matters relating to
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), and maintains a regular
review process to monitor the effectiveness of 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 internal audit program designed to evaluate the adequacy and effeteness of the financial and risk framework. Internal Audit also reviews the policies
processes and control put in place by management to ensure compliance with APRA's prudential requirements. 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 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 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. 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 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. The Company has an existing portfolio of low-risk merchant categories and therefore minimal exposure to credit risk in terms of
liabilities.
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 a multiple of historical loss experience. '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 2010
Standard & Poors Credit Rating*
AAA
AA
A+
AA-
BBB+
unrated
30 June 2009
Standard & Poors Credit Rating*
AAA
AA
A+
AA-
BBB+
unrated
*Long-term credit rating
Cash and
balances with
financial
institutions
Due from other
financial
institutions
Trade
receivables
7,606,070
4,384,793
44,145
332,014
5,644,783
314,709
Cash and
balances with
financial
institutions
8,064,043
3,830,633
333,939
457,601
Due from other
financial
institutions
Trade
receivables
74,703
5,187,479
518,235
219,817
101,478
34
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd)
(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 loss arising from a failure to satisfy the regulatory standards that apply to a 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 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.
The following net exposure to interest rate risk is to be reported at balance sheet date:
Cash and cash equivalents
2010
2009
9,564,403
7,384,482
Sensitivity analysis:
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
$120,350 (2009:$51,691). 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:
Available-for-sale investments-VISA shares
Trade Payables
USD Term Deposit
Sensitivity analysis:
AUD
2010
127,380
115,689
1,525,285
AUD
2009
117,745
180,391
-
USD
EUR
USD
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 $248,752 (2009: $7,970). 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 $432,612 (2009:$4,695).
(c ) Other Price Risk
The Company's investment in available-for-sale financial assets is 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 forecasts 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 a 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.
35
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont'd)
(vii) Fair values
The Company uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.
Quoted
market
price
(Level 1)
Year ended 30 June 2010
Valuation
technique -
market
observable
inputs
(Level 2)
Valuation
technique -
non market
observable
inputs
(Level 3)
Total
-
127,380
-
127,380
Quoted
market
price
(Level 1)
Year ended 30 June 2009
Valuation
Valuation
technique -
technique -
non market
market
observable
observable
inputs
inputs
(Level 3)
(Level 2)
Total
117,745
-
117,745
Financial Asset
Available for sale
Financial Asset
Available for sale
Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without any deduction for transaction costs.
For financial instruments not quoted in active markets, the Company uses valuation techniques such as present value techniques, comparison to similar instruments for
which market observable prices exist and other relevant models used by market participants. These valuation techniques use both observable and unobservable market
inputs.
Transfer between categories
There were no transfers between Level 1 and Level 2 during the year.
(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 APRA. The Company has aligned its objectives and processes in respect of risk management around the prudential
standards.
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 complied in full with APRA's capital minima. In all planning, the Company maintains a minimum of 22% capital adequacy to ensure
there is a sufficient buffer to the regulatory minima.
Regulatory capital
Tier 1 capital
Tier 2 capital
Total capital
Actual
2010
10,482,586
23,591
10,506,177
Actual
2009
7,783,138
57,006
7,840,144
Risk weighted assets
6,350,133
8,800,104
Tier 1 capital ratio
Total capital ratio
165%
165%
88%
89%
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.
36
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
15. COMMITMENTS AND CONTINGENCIES
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
2010
$
2009
$
2,925,285
140,000
1,400,000
140,000
245,025
3,310,310
245,025
1,785,025
The Company has provided an irrevocable standby letter of credit of $3,065,285, secure through fixed charges over term deposits with the Commonwealth Bank of
Australia and Westpac Banking Corporation, 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.
16. LEASES
(a) Operating lease commitments - Company as lessor
Prior to April 2010, Tyro operated a "rent to own" model whereby ownership of the terminal would transfer to the merchant once they had made 36 consecutive rental
payments. However Tyro bears the risk of repairing or replacing the terminal over the 3 year period. The merchant would then continue to pay a service and maintenance
fee after this period. There is no minimum rental period for merchants and they are able to terminate with Tyro at any time with no penalty or buy out fees.
From April 2010, the company has moved to a perpetual rental model whereby there will be no transfer of ownership of the asset and the merchant will pay rental for the
duration that they are with Tyro.
Type of Terminals
Xenta
Xentissimo
Cost
1,625,276
629,541
2,254,817
Depreciation
Expense
Net Carrying
Value
716,324
528,995
1,245,319
908,952
100,546
1,009,498
(b) Operating lease commitments - Company as lessee
Future minimum rentals payable under the non-cancellable operating leases as at 30 June 2010 are as follows:
- Within one year
- After one year but not more than five years
173,250
-
173,250
297,000
173,250
470,250
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%.
17. 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.
18. 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
2010
$
2009
$
209,500
8,500
218,000
135,960
-
135,960
37
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
19. RELATED PARTY DISCLOSURES
(a) Key Management Personnel
The total cash remuneration paid to the Directors and Executives of the Company amounted to $816,375 (2009: $847,784). 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
Kerry Roxburgh
Brad Banducci
Michael Cannon-Brookes
Rob Ferguson
Thomas Girgensohn
Paul Rickard
Jost Stollmann
Executives
Garry Duursma
Peter Haig
Justin Mitchell
Non-executive Chairman
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
Chief Executive Officer
Title
VP Sales and Marketing
VP Engineering
Company Secretary
Compensation of Key Management Personnel
Short-term Benefits
Post Employment benefits (superannuation)
Other long-term benefits
Termination Benefits
Share-based Payments
Total
21-Sep-09
18-Apr-08
14-Dec-06
10-Dec-09
14-Nov-05
09-Mar-07
28-Aug-09
05-Apr-05
1-Jan-07
3-Feb-03
19-Mar-07
2010
$
2009
$
683,073
133,302
-
-
565,324
644,122
174,599
-
29,063
613,056
1,381,699
1,460,840
30 June 2010
Directors
Kerry Roxburgh
Brad Banducci
Michael Cannon-Brookes
Rob Ferguson
Thomas Girgensohn
Paul Rickard
Jost Stollmann
Executives
Garry Duursma
Peter Haig
Justin Mitchell
30 June 2009
Directors
Kerry Roxburgh
Brad Banducci
William Bartlett
Rob Ferguson
Thomas Girgensohn
Jost Stollmann
Executives
Garry Duursma
Peter J Haig
John Hallis
Justin Mitchell
Short-term
Benefits
Salary &
fees ($)
Termination
Benefits
($)
Post
Employment
Super-
annuation ($)
Share-based
Payments
Options
($)
-
-
-
-
-
-
104,347
242,429
199,831
136,466
683,073
Short-term
Benefits
Salary &
fees ($)
Termination
Benefits
($)
-
-
-
-
-
28,823
217,777
78,779
199,654
119,089
673,185
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,676
29,891
45,453
12,282
133,302
23,677
11,838
15,785
35,515
23,677
23,677
176,304
79,840
126,266
48,745
565,324
Post
Employment
Super-
annuation ($)
Share-based
Payments
Options
($)
-
33,612
24,198
40,334
20,167
226,882
50,418
151,856
50,418
39,369
637,254
-
-
-
-
-
2,594
45,760
97,557
17,969
10,718
174,599
38
-
-
29,063
-
29,063
Total
($)
23,677
11,838
15,785
35,515
23,677
23,677
326,327
352,160
371,550
197,493
1,381,699
Total
($)
-
33,612
24,198
40,334
20,167
258,299
313,955
328,192
297,104
169,176
1,485,038
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
19. RELATED PARTY DISCLOSURES (cont'd)
Shareholdings of Key Management Personnel and their Related Entities Transactions
30 June 2010
Directors
Kerry Roxburgh
Brad Banducci
Michael Cannon-Brookes
Rob Ferguson
Thomas Girgensohn
Paul Rickard
Jost Stollmann
Executives
Garry Duursma
Peter Haig
Justin Mitchell
Total
30 June 2009
Directors
Kerry Roxburgh
Brad Banducci
Rob Ferguson
Thomas Girgensohn
Jost Stollmann
Executives
Garry Duursma
Peter Haig
John Hallis
Justin Mitchell
Total
Outstanding
at start
of year
440,182
2,392,545
-
11,569,524
3,437,523
-
29,704,061
Shares
Issued
during the
year
250,000
2,392,545
-
8,280,602
2,980,872
124,102
11,881,624
1,197,433
3,739,310
-
52,480,578
957,946
1,666,667
-
28,534,358
Outstanding
at start
of year
133,334
1,505,849
5,258,413
3,170,856
20,845,105
681,818
2,072,222
434,633
-
34,102,230
Shares
Issued
during the
year
306,848
886,696
6,311,111
266,667
8,858,956
515,615
1,667,088
(181,819)
-
18,631,162
On exercise
of
options
Outstanding
at end
of year
-
-
-
-
-
-
-
-
-
-
-
690,182
4,785,090
-
19,850,126
6,418,395
124,102
41,585,685
2,155,379
5,405,977
-
81,014,936
On exercise
of
options
Outstanding
at end
of year
-
-
-
-
-
-
-
-
-
-
440,182
2,392,545
11,569,524
3,437,523
29,704,061
1,197,433
3,739,310
252,814
-
52,733,392
39
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
19. RELATED PARTY DISCLOSURES (cont'd)
Option Holdings of Key Management Personnel
30 June 2010
Linear/Service vesting schedule
Directors
Kerry Roxburgh
Brad Banducci
Michael Cannon-Brookes
Rob Ferguson
Thomas Girgensohn
Paul Rickard
Jost Stollmann
Executives
Executives
Garry Duursma
Peter Haig
Justin Mitchell
Fully vested at time of grant
Directors
Brad Banducci
Jost Stollmann
Executives
Garry Duursma
Peter Haig
Justin Mitchell
Total
30 June 2009
Linear/Service vesting schedule
Directors
Brad Banducci
Rob Ferguson
Thomas Girgensohn
Jost Stollmann
Executives
Executives
Garry Duursma
Peter Haig
John Hallis
Justin Mitchell
Fully vested at time of grant
Directors
Brad Banducci
Jost Stollmann
Executives
Garry Duursma
Peter Haig
John Hallis
Justin Mitchell
Total
Outstanding
at start
of period
1-Jul-09
Granted
as
Remuneration
Options
exercised/
expired
during the year
Outstanding
at end
of period
2010
Exercisable
at end
of period
2010
-
1,197,146
-
1,328,631
683,150
-
2,506,364
-
1,339,921
213,043
7,268,255
109,091
6,142,292
1,413,439
4,240,316
677,994
12,583,132
19,851,387
666,667
333,333
444,443
1,000,000
666,667
666,667
3,154,100
545,046
1,472,323
382,884
9,332,130
-
223,233
-
-
-
-
886,667
666,667
1,307,246
444,443
2,328,631
1,349,817
666,667
4,773,797
666,667
1,307,246
444,443
2,328,631
1,349,817
666,667
4,773,797
-
-
-
1,109,900
545,046
2,812,244
595,927
15,490,485
545,046
2,812,244
595,927
15,490,485
-
1,956,522
109,091
-
-
8,098,814
-
8,098,814
1,956,522
1,956,522
978,261
6,847,827
16,179,957
-
-
-
109,091
1,218,991
3,369,961
6,196,838
1,656,255
19,321,868
34,812,353
3,369,961
6,196,838
1,656,255
19,321,868
34,812,353
Outstanding
at start
of period
1-Jul-08
Granted
as
Remuneration
Options
exercised
during the
year
Outstanding
at end
of period
30-Jun-09
Exercisable
at end
of period
30-Jun-09
327,581
285,153
161,411
1,456,364
909,091
1,339,921
1,120,746
213,043
5,813,310
109,091
272,727
109,091
1,327,273
309,091
25,820
2,153,093
7,966,403
869,565
1,043,478
521,739
1,050,000
-
-
-
-
3,484,782
-
5,869,565
1,304,348
3,913,043
1,304,348
652,174
13,043,478
16,528,260
-
-
-
-
909,091
-
909,091
-
1,818,182
1,197,146
1,328,631
683,150
2,506,364
-
1,339,921
211,655
213,043
7,479,910
1,197,146
1,328,631
683,150
2,506,364
-
1,339,921
211,655
213,043
7,479,910
-
-
109,091
6,142,292
109,091
6,142,292
-
1,000,000
-
-
1,000,000
2,818,182
1,413,439
4,240,316
1,613,439
677,994
14,196,571
21,676,481
1,413,439
4,240,316
1,613,439
677,994
14,196,571
21,676,481
40
MONEYSWITCH LIMITED
(TRADING AS TYRO PAYMENTS)
ABN 49 103 575 042
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010
19. 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
Service 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.
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
There is no other amount receivable from or payable to related parties.
2010
$
-
2009
$
56,505
41
corporate information
directors
kerry roxburgh (Chairman)
michael cannon-brookes
rob ferguson
thomas girgensohn
paul rickard
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 2010