Annual
Report
2021
TYRO PAYMENTS LIMITED - ABN 49 103 575 042
CONTENTS
Highlights
Chair's Letter
CEO | Managing Director’s Report
Operating & Financial Review
Profiles
Board of Directors
Executive Leadership Team
5 Year Track Record
Directors' Report
Directors' Report
Audited Remuneration Report
Auditor's Independence Declaration
Financial Report
Additional Information
Shareholder Information
Corporate Directory
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 3
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 21
Technology and product innovation
is at the core of our value proposition
to merchants, and we are continually
looking for ways to enhance merchants’
ability to conduct commerce.
4
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 5
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 HIGHLIGHTS
INNOVATION - EXECUTING
AGAINST OUR STRATEGY
Bendigo Bank Alliance
Completed on 1 June 2021
with all Bendigo merchants
moving over to Tyro (18,490
merchants at 30 June 2021)
Tyro Connect -
an integration +
insights platform
connecting apps to
POS/PMS systems
enhancing value
proposition to
merchants
Acquisition of
Medipass -
HEALTH FINTECH INNOVATING
IN CARDLESS DIGITAL
HEALTHCARE CLAIMING +
PAYMENTS
Investment in Paypa
Plane - recurring
payments platform will
add industry leading
features to our banking
platform
LAUNCH OF
OPEN
BANKING
& IMPLEMENTATION OF
MAMBU’S CLOUD-NATIVE
BANKING PLATFORM
N O W
O N L I N E
EXCLUSIVE
PAYMENT
PROVIDER TO
me&u
WILL BECOME
TYRO'S LARGEST
ECOMMERCE
MERCHANT
6
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021HIGHLIGHTS $25.5B
RECORD TRANSACTIONS
PROCESSED BY TYRO
MERCHANTS
26%
(FY20: $20.1B)
DELIVERING
STRONG FY21
RESULTS
58,186
MERCHANTS
CHOOSING TYRO AS
THEIR PAYMENTS
SOLUTION
PROVIDER
81%
(FY20: 32,176)
$119.4 M
GROSS PROFIT
TRANSACTION & MERCHANT
GROWTH DRIVING RECORD
GROSS PROFIT OF $119.4
MILLION
28%
(FY20: $93.5M)
RECORD
EBITDA $14.2 M
- UP 424.0%
FROM A EBITDA LOSS OF
$4.4 MILLION IN FY20
HIGHLIGHTING THE
OPERATING LEVERAGE OF
THE BUSINESS
AUSTRALIA’S
5TH LARGEST
MERCHANT
ACQUIRING BANK
BY TERMINAL
COUNT - 104,827
67%
(FY20: 62,722)
RECORD BRAND RECOGNITION IN
THE YEAR
Prompted 20%
(FY20: 14%)
Unprompted 19%
(FY20: 9%)
Strong Balance Sheet $172.8 million in cash and
financial investments available for future growth
(FY20: $188.3 million)
7
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021HIGHLIGHTS CHAIR'S
LETTER
Dear Shareholder,
The industry changes that have transpired over
FY21 will forever change the payments landscape
in Australia. Firstly, the structural shift we are
seeing in the way people pay both here in
Australia and internationally will continue. Cash,
as a means of payment, will continue to decrease
with customers preferring contact free payments,
eCommerce payments and QR code-based
payments. Secondly, the advent of Open Banking
which gives customers the ability to share their
banking data with accredited third parties and
will allow customers to get better-suited banking
products and switch products or banks more
easily, will provide opportunities to accredited
participants that were not previously available.
Tyro is perfectly placed to support our merchants
in response to these industry changes with our
industry leading product offerings and our future
strategic priorities.
Although these industry changes have and will
continue to be a positive catalyst for growth at
Tyro, FY21 has also presented us with some of the
biggest challenges in our history.
COVID-19 continues to remain a significant
challenge to our community and businesses.
While the roll-out of vaccines in Australia and
globally is starting to offer hope that business
can return to normal, many of our merchants are
still impacted by COVID-19. There are limitations
placed on international travel, numerous state-
based lockdowns, and limitations on the number
of customers allowed in a venue at any time. As
we did in FY20 and continued to do in FY21, we
remain committed to doing all that we possibly
can to support our merchants and our teams
during this challenging period by offering our
range of financial and wellbeing support packages
to merchants. We are also ensuring we continue to
provide critical payments and banking services to
our 58,186 merchants.
The second major event that has challenged
Tyro in FY21 was the terminal connectivity issue
experienced by our merchants in January 2021.
The use of any technology comes with risk and it
is our role to make sure that risk is minimised for
our merchants. To this end we are committed to
implementing an ‘industry first’ failover solution
that will be rolled-out over FY22 to specifically
address these types of connectivity issues. We
will be the first merchant acquirer in Australia to
offer merchants a complete failover solution for
payments going forward. Robbie will provide a
more detailed analysis of this issue together with
the specific steps we are taking in remediating
our merchants as well as the industry leading
products we are introducing to provide merchants
with the best payments and business banking
solutions available in Australia.
"The industry changes that have
transpired over FY21 will forever
change the payments landscape in
Australia."
8
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CHAIR'S LETTER As a Board, we were very encouraged by the way
the team at Tyro dealt with the adversity of the
continued impact of COVID-19 on our merchants
as well as dealing with the terminal connectivity
issue. We remain confident that Tyro, as a
company, with the strong team in place together
with managing through the challenges of FY21 - is
well placed to continue to grow and achieve the
ambitious goals and strategies we have put in
place.
STRONG FY21 FINANCIAL
PERFORMANCE
Against this backdrop with the structural changes
in the payments industry in Australia as well as
the challenges of COVID-19 and the terminal
connectivity issue, I am happy to report that Tyro
performed strongly in FY21.
Our transaction value increased an impressive 26%
to $25.5 billion (FY20: $20.1 billion) from the 58,186
merchants that trust Tyro with their payments.
This translated to a gross profit of $119.4 million, up
28%. Tyro also delivered a positive EBITDA of $14.2
million (before significant costs associated with the
terminal connectivity issue and our M&A activity
for the year).
The delivery of this positive EBITDA provides
shareholders with confidence that Tyro is on a path
to profitability as we continue to grow.
FINANCIAL POSITION
Given the strong set of results for FY21, the Group
has maintained a strong balance sheet throughout
the year. The Board regularly reviews Tyro’s capital
structure in uncertain times like these. Tyro is debt
free and as at 30 June 2021, we had $172.8 million
in cash available to support future growth.
with a total capital ratio of 73% (FY20: $166 million
with a capital ratio of 162%). Tyro currently holds
sufficient capital to meet its internal targets above
APRA’s prudential capital requirements.
DELIVERING ON OUR
STRATEGIC PRIORITIES
FY21 saw Tyro deliver on three key strategic
initiatives that will strongly position us for
increasing our pace of growth into FY22 and
beyond.
The first key project that we delivered was the
completion of the Bendigo Bank merchant alliance
on 1 June 2021. This project was delivered on time
and met all the requirements from Bendigo for a
successful switchover of the Bendigo merchants
to Tyro’s payments platform. The alliance is
progressing well with 253 Bendigo merchants now
completely serviced by Tyro with the remaining
Bendigo merchants to come across to Tyro over
the next few months.
This Alliance, the first of its type in Australia, is a
significant moment in Tyro’s history and will add an
annualised ~$5 billion in transaction value to Tyro
going forward.
The second strategic initiative that we delivered
on was our focus on our Healthcare offering. In
May we acquired Medipass. The acquisition
of Medipass adds an innovative cardless digital
healthcare claiming and payment platform to Tyro,
that seamlessly links practitioners, funders, and
patients. This, in combination with Tyro’s terminal-
based offering creates a simple and unified health
payments solution for our health business.
Medipass’ team of 20 expert people have also
joined Tyro and will lead our new health business
unit to drive our growth targets for the health
vertical going forward.
Total capital held at 30 June 2021 was $84 million
Thirdly, we continue to focus on our eCommerce
9
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CHAIR'S LETTER solution with me&u now starting to process
their transactions through Tyro. This clearly
demonstrates the ability of our eCommerce
solution, and we will continue the roll-out of this
product to our merchants to assist them with their
own growth ambitions.
These were the three major initiatives we
implemented in 2021. However, there were
many other strategic priorities that the team
also delivered in FY21 such as our new Open
Banking platform, our new streamlined process for
improving customer call wait and response times
and our ability to roll-out terminals to merchants
significantly faster than we previously were able
to do.
SUSTAINABILITY
The COVID-19 pandemic has clearly demonstrated
how deeply interconnected our world has become
and how social and environmental issues impact all
of our lives and communities.
Working with 58,186 merchants across Australia, it
is important that we fulfil our mission of simplifying
payments and banking for our customers. We
are focused on delivering solutions that create
a sustainable future for all our stakeholders.
This includes our shareholders, our people, our
merchants, the broader community in which
we operate, our suppliers and business partners
and regulatory bodies. A sustainable future also
includes our environmental footprint, our impact on
the planet and the strategies we have in place to
minimise this impact.
FY21 saw the team at Tyro embark on the journey
to commit to Tyro being a carbon neutral business
through a program of reducing our current
emissions per employee as well as offsetting
our calculated carbon emissions through carbon
certified offset programs that will start in FY22.
Although this is only the start of our journey,
we recognise the fundamental importance of
environmental sustainability to our business and
we are committed to reducing our impact on the
climate.
Our first standalone Sustainability Report for FY21
can be found on our Investor Centre at https://
investors.tyro.com.
PEOPLE, CULTURE AND
DIVERSITY
The long term success of Tyro is built on the skills,
dedication, and culture of our team. In FY21, more
so than any other year, the strength of our people
was abundantly displayed.
We have a strong emphasis on recruiting and
retaining top talent that enhances our strong
values-driven culture. The accumulation of our
collective experience, shared values, and individual
skills has allowed Tyro to deliver industry-leading
products and solutions.
We also embrace diversity and inclusiveness and
create a sense of belonging because we know this
is what makes us better as a team, as a company
and as members of the wider community. This year
we have set numerical targets for representation
of women at Tyro across our leadership teams
and across the broader team targeting a 40:40:20
approach with at least 40% women, 40% men,
with the remaining 20% unspecified to allow for
flexibility and to recognise that gender is non-
binary.
As at 30 June 2021, 33% of our executive
leadership team and 37% of all our employees were
women. We have two female Directors and five
male Directors. More information on diversity can
be found in our Corporate Governance Statement
and in our Sustainability Report at https://investors.
tyro.com.
10
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CHAIR'S LETTER to a more normal trading environment. Our focus
will be to continue to deliver innovative payments
and banking products for our merchants and
Robbie will be providing details of our key areas of
strategic focus for FY22.
THANKS TO OUR TEAM
We could not have achieved our FY21 results
without our amazing group of people. We are
fortunate to have a highly engaged, driven, and
passionate team that consistently delivers on the
expectations set for them. On behalf of the Board
and all shareholders I would like to acknowledge
the commitment and dedication of the entire Tyro
team and their efforts towards delivering another
successful year for Tyro.
Finally, I would like to thank all our merchants,
partners and investors for their support and
engagement over the past twelve-months and we
look forward to working with you all in FY22.
I also look forward to seeing you all at our Annual
General Meeting on 3 November 2021.
Sincerely,
David Thodey
Chair
26 August 2021
CHANGES TO THE BOARD
At the end of the year Cathy Harris decided to
step down from the Board. I would like to again
thank Cathy for her significant contribution to our
Company over the last five and a half years. We
have been fortunate to have the benefit of Cathy’s
strong customer focus and fearless counsel on
the Board. We will miss Cathy’s contribution to
the Board. Cathy’s position as Chair of the People
Committee has been taken on by Fiona Pak-Poy.
On 21 April 2021 we were pleased to welcome Aliza
Knox to the Board. Aliza’s experience in scaling
banking and financial services businesses and
particularly in the digital sector makes her a great
addition to Tyro’s Board.
Board succession planning remains a key area of
focus for the Board, and we continually evaluate
the skills and competencies required for effective
board governance. As part of this focus, we will be
looking to add an additional director to the Board
in FY22.
As Chair of the Board, I would like to thank all
Board members for their contribution over
this challenging year. Their dedication, expert
guidance, and counsel to both me and the Tyro
leadership team over the past 12-months is much
appreciated.
LOOKING FORWARD TO A
SUCCESSFUL FY22
Although FY21 proved to be another year of
challenges for Tyro, it presented new opportunities
for the way in which we conduct business and the
products we offer to our merchants.
We are looking forward to supporting our
merchants as the nation emerges from COVID-19
- though it is difficult to predict when we will return
11
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CHAIR'S LETTER 12
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 CEO | MANAGING
DIRECTOR’S
REPORT
13
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 Operating &
Financial Review
A very pleasing performance in the year with
strong increases in transaction value, revenue,
gross profit and EBITDA. The results delivered
are all the more impressive when assessed
against the backdrop of rolling Covid lockdowns,
the terminal connectivity event in January
and the distraction that inevitably comes with
undertaking a major transformative project such
as the Bendigo Bank Alliance. The resilience of
our business has definitely shone through again
this year. So it is with much appreciation that I
thank the entire team at Tyro for all the effort
invested to make the performance you see in
this report possible.
"...it is with much
appreciation that I thank the
entire team at Tyro for all the
effort invested to make the
performance you see in this
report possible".
I am particularly pleased with how
we recovered from January’s terminal
connectivity issue which was a whole of
organisation effort with an absolute focus on
doing the right thing by affected merchants.
This approach instrumental in retaining
stable merchant churn metrics and seeing
our new merchant application numbers
return to record setting highs. This event did
not sit comfortably with me nor my team,
and notwithstanding 18 years of operation
with no similar issue, we are building a
‘failover’ solution that will see us provide
all our merchants with a dongle solution in
combination with their standard terminals
as an extra level of redundancy – an industry
first move.
We are executing against our strategy of
‘build’, ‘buy’, ‘invest’ and/or ‘partner’ as
outlined in our 2019 prospectus prior to
listing on the ASX. The business outcomes
delivered in FY21 under this plan provide
us with a unique opportunity to accelerate
our growth. Our combination with Medipass
is a significant step in building out our
core health vertical and is consistent with
our strategy to build our offering through
acquisition. Our alliance with Bendigo Bank
is an exciting combination of Australia’s fifth
biggest retail bank with the fifth largest
merchant acquiring bank. Partnering with
Bendigo Bank sees Tyro’s leading proprietary
payments platform made available to
Bendigo Bank’s current and future business
customers.
Before delving into our financial performance
and position, I thought it useful to provide a
‘snapshot’ review of the 2021 financial year,
including highlighting some of the more
significant actions undertaken by the team
over the course of the year. This is followed
by a more in-depth review of our payments
and banking businesses.
14
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT FY21 Snapshot
RESULTS
At a high level, we delivered an all-time high in
transaction value of $25.5 billion with more than 58,186
merchants trusting Tyro with their payments needs.
We lifted revenue 13% to a new record $238.5 million
and even more impressively we lifted gross profit 28%
to a new high of $119.4. Statutory net loss after tax
was $29.8 million after accounting for $13.2 million
in costs associated with connectivity issue and $5.0
million in costs associated with the IPO, the Bendigo
transaction and the Medipass transaction. Excluding
the impact of these one-off costs, net profit before tax
on a normalised basis was a loss of $10.9 million, a $15.0
million improvement on the normalised net loss before
tax generated in FY20.
Our Banking business returned to strong growth in the
later part of FY21 as we switched back to an automated
merchant cash advance loan approval process following
a period of manual loan approvals to mitigate risks
inherent due to Covid volatility. We booked $25.8 million
in loan originations for FY21 of which close to $20 million
was booked in the final three months of FY21, including
a record origination month in May 2021 of $8.1 million.
Although loan originations was down 57% from the
record $60.1 million booked in FY20, the results over the
last three months of FY21 demonstrate the potential this
product has.
Our fee-free, interest-paying bank account and term
deposit account now have over 4,650 active accounts
representing an increase of 26% over last year with $75.5
million held in deposits at 30 June 2021.
Transaction
Value
Merchant
Numbers
Gross
Profit
$25.5 B
up 26%
$20.1 B
32,176
$93.5 M
58,186
up 81%
$119.4M
up 28%
EBITDA
($4.4 M)
$14.2 M
up 424%
FY20
FY21
15
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT IMPACT OF COVID-19 ON RESULTS
COVID continued to impact our results through FY21 with State and Territory governments mandating social
distancing and lockdown policies whenever outbreaks of the virus occurred together with the continued lockdown of
our international borders. This forced many of our merchants in all our verticals to either partially or completely close
their operations for the period of the lockdown. Although many of our merchants found innovative ways to adapt to
the trading restrictions, our payments business still experienced declines in transaction value whenever a lockdown
occurred. The impact of these lockdowns can be seen in Chart 1.
CHART 1 – MONTHLY TRANSACTION VALUE GROWTH RATES
79%
4
147%
Jun
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
Aug
Jul
1
(18%)
(38%)
2
(4%)
5-year CAGR - 24%
55%
7%
3%
10%
11%
13%
10%
5%
11%
40%
30%
3
19%
27%
27%
29%
32%
31%
31%
30%
(60%)
(30%)
0
30%
60%
90%
120%
150%
1 - First national lockdown March 2020 to June 2020
2 - Second major lockdown in Victoria - July 2020 to October 2020
3 - Various States go into snap lockdowns - January 2021 to February 2021
4 - All States open and no lockdowns - March 2021 to June 2021
FY21
FY20
As can be seen in Chart 2 our FY21 transaction value growth of 26% has outpaced our five-term CAGR of 24% and we
remain confident that we can continue to achieve these long term growth rates in a normal operating environment.
CHART 2 – ANNUAL TRANSACTION VALUE
26.3%
26.0%
23.5%
31.0%
$16b
$14b
$12b
$10b
$8b
$6b
$4b
$2b
$0b
26.4%
15.1%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
FY16
FY17
FY18
FY19
FY20
FY21
H1
H2
Annual Growth
5-year CAGR
16
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
17
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT ENHANCING OUTCOMES FOR OUR MERCHANTS IN FY21
Some examples of actions the team took in the year
to enhance outcomes for merchants in Australia are
showcased below:
Technology and product innovation is at the core of
our value proposition to our merchants, and we are
always looking for ways to enhance and simplify
their ability to conduct commerce, whether that be
through solutions built by our team in-house, sourced
from industry-leading third parties or obtained via
acquisition. Simply put our products and services
are focused on addressing merchant payments pain
points and we strive to make payments between
merchants and their customers as fast, simple and
seamless as possible. This is true to our purpose of
setting businesses free to get on with business by
simplifying payments and banking.
18
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT BENDIGO BANK MERCHANT
ACQUIRING ALLIANCE
LAUNCH OF TYRO GO – MOBILE
PAYMENTS DONGLE
We completed our merchant acquiring alliance with
Bendigo Bank on 1 June 2021 and on that date the full
economic benefit of Bendigo Bank’s existing merchant
service contracts moved to Tyro.
In June 2021, we launched the pilot of our new Tyro Go
mobile payments dongle. Tyro Go will connect wirelessly
to the merchant’s smart phone or tablet. Tyro Go will
complement our current terminal offering by:
•
•
•
•
providing a ‘failover’ to all merchants should their
existing terminals not function for any reason;
facilitating our entry into the trades verticals with a
fit for purpose mobile payment terminal device;
providing a ‘queue buster’ for high volume retail and
hospitality merchants who require a terminal for
floor staff; and
providing a more appropriate solution for micro-
merchants.
Our alliance with Bendigo Bank is an exciting
combination of Australia’s fifth biggest retail bank with
us as the fifth largest (by terminal count) merchant
acquiring bank in the country. Partnering with Bendigo
Bank sees our leading proprietary payments platform
made available to Bendigo Bank’s current and future
business customers – giving them access to more
features, more payment options and seamless
integrations to more than 320 point of sale systems.
Under our long-term, collaborative, and strategic alliance,
Bendigo Bank continues to provide all other banking
services to these customers. This is a great example of
two customer focused Australian organisations coming
together to provide better solutions for Australian
businesses through a partnering of capability and
expertise.
As at 30 June 2021, 18,490 Bendigo Bank merchants had
moved across to Tyro generating annualised transaction
value of ~$5.0 billion.
"Our Tyro Go
terminal will accept
‘tap & save’ cards,
chip-based cards,
and many of the
current digital
wallets"
19
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT MEDIPASS PAYMENTS SOLUTIONS
Multi-Sided Digital Approval + Payments Platform
PAYMENT
CLAIM
QUOTE
Current Integration
Future Integration
We acquired Medipass on 31 May 2021 and welcomed
their 20-person strong team to Tyro. Over the past
three years the Medipass team has built a multi-
sided platform linking healthcare funders, healthcare
providers and patients to streamline claims approval
and payment acceptance. Medipass is a digital health
payment platform enabling healthcare providers to
accept healthcare payments without the need for a
terminal. The rise of telehealth consultations, coupled
with the increase in eCommerce and cashless
payments more generally, means offering cardless
digital payment options to patients is a commercial
necessity for healthcare practitioners.
Our combination with Medipass is a significant
step in building out Tyro’s core health vertical and
is consistent with our strategy to build our offering
through acquisition where there is a distinct
opportunity to gain scale and to enhance our
position. By combining Medipass’ platform with our
existing card-present payment health offering, we
can provide a simple, unified solution to healthcare
practitioners for payments and claiming, as well as
increasing the health providers working with us.
Medipass integrates with 18 cloud-based practice
management and booking systems and has
approximately 1,700 active healthcare merchants
working with it. This complements, with limited
overlap, the over 9,500 merchants in Tyro’s health
vertical and the 52 practice management systems
integrated with Tyro. The acquisition will provide
Tyro’s health merchants greater claiming and
payment capabilities extending beyond Tyro’s private
health insurer and Medicare Easyclaim options
to include a range of State and Federal based
compensatory funders. These options will continue to
expand as Medipass completes further integrations.
HEALTHCARE
PROVIDERS
HEALTHCARE
PATIENTS
Other
Compensatory
Funders
Eclipse
20
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
TYRO CONNECT
Launched in the year Tyro Connect is going from strength
to strength. In today’s competitive and tech-enabled
environment, merchants can find themselves having to
juggle many different apps in order to meet customer
expectations and manage day-to-day tasks. Tyro
Connect enables hospitality businesses to easily integrate
and more effectively use the apps they need to thrive.
It is a ‘plug and play’ platform software solution that
addresses merchant pain points around ‘counter clutter’
and avoiding the need to re-enter items into their point
of sale system. It provides merchants with a platform
to promote data driven insights from their customers
activities.
As at 30 June 2021, there were 124 active merchants using
Tyro Connect with 12 class leading hospitality apps signed
up and 695,000 transactions processed over the platform
(FY20: Nil).
Tyro Connect is piloting a new partnership with Hubster which will enable us to make leading ordering apps including
UberEats, Menulog, Easi, DoorDash, Deliveroo (and more) available to our merchants and point of sale system
partners. Tyro Connect is also piloting our new menu management builder which allows our merchants to build and
manage their menus with Tyro and then publish them to all of their delivery partners, which saves our merchants from
having to update their menu in all the different systems.
platform, along with the opportunity to market our
eCommerce capabilities to those of our SME merchants
who have an online sales presence, highlights the
potential of our eCommerce payments platform and
the growth opportunity it offers over coming years. This
remains a significant area of focus for the team.
ECOMMERCE + ME&U
In December 2019, we made a ~16% equity investment
in me&u for $3.5 million, providing Tyro the right to be
exclusive in-app payment provider to me&u. me&u is a
leading Australian ‘tap, order and pay’ in-venue solution
for the hospitality industry. It was established by the
founder of Dimmi, Stevan Premutico, and enables
customers to view menus, order and pay for meals via
their mobile phone.
This innovative solution, made even more critical since
the Covid-19 pandemic commenced making contactless
payments increase in importance, improves customer
experience, frees up wait staff, increases order value/
frequency and is a foundation app on the Tyro Connect
platform. In June 2021 me&u commenced migrating their
in-app payments to Tyro’s eCommerce platform and this
will continue progressively through the first half of FY22.
The addition of me&u, and other key merchant accounts
such as the Cheesecake Shop to our eCommerce
21
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT OPEN BANKING
Tyro was one of the first non-major banks to become
an active data holder under the Consumer Data Right
or Open Banking in June 2021. Open Banking seeks to
provide a safe and secure way for customers to share
their data between accredited organisations to enable:
•
•
•
easier comparison of financial products and
providers;
a single view of accounts across banks; and
streamlined application processes.
For Tyro, the first phase of Open Banking data sharing
will be available to merchants who opt-in and are sole
traders in relation to their Tyro bank account and/or
Tyro term deposit account and includes things like
transaction details and account balances and details.
The next phase will commence for merchants who are
sole traders in relation to their Tyro merchant loan by 1
February 2022.
IMPROVED MERCHANT ONBOARDING
PROCESS
We enabled digital applications and automated
onboarding for merchants who are registered as trusts
and partnerships in the year. This will significantly reduce
our onboarding times for these merchants and gets
Tyro a step closer to fully automated onboarding for all
merchants.
PAYPA PLANE
In December 2020 we made a 20% equity investment
in Paypa Plane for $1.9 million. The intent of this
investment being to expand the payments solutions we
offer merchants by integrating Paypa Plane’s innovative
recurring payments functionality into Tyro’s bank
accounts. This functionality being of particular relevance
to merchants operating businesses such as childcare
centres, gyms, and subscription based services.
22
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT DENTAL REBATE ESTIMATE FEATURE
We introduced a new rebate estimator feature in the year for
dental practitioners in our health vertical. Practitioners were
asking for this functionality and it will significantly improve the
ability for customers of dental practitioners to estimate the
cost and rebate from private health funds for dental elective
procedures. The addition of this new feature demonstrates our
ability to develop solutions for merchants in our core verticals
that can help them grow their businesses.
TELEHEALTH
Our telehealth payments solution responds to the requirement
to keep health practitioners and patients in touch for
consultations outside of the typical physical visit. Tyro
introduced a payment and rebating solution to facilitate
telehealth by processing both Medicare Benefits Schedule bulk-
billed telehealth claims through the Tyro terminal and gap fee
payments through either their Tyro terminal or our eCommerce
solution.
The success of telehealth in Australia will see it continue to be
offered by health practitioners even after the risk of Covid has
abated.
BRAND AWARENESS
We have made significant inroads in lifting our brand awareness
as a payments provider in Australia in the year as shown in
Chart 3. Our brand development and marketing activities
together with our reputation for industry leading products
and features yielded strong results and saw our prompted
brand awareness increase to 20% (FY20: 14%) and, even more
impressively, our unprompted brand awareness increase to 19%
(FY20: 9%).
CHART 3 – FY21 BRAND AWARENESS
25%
20%
15%
10%
5%
0%
FY19
FY20
FY21
Unprompted
Prompted
23
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT TERMINAL CONNECTIVITY ISSUE
On 5 January 2021, we experienced a connectivity issue
with respect to some of our terminals. In accordance
with our Business Continuity Management Policy and
Business Continuity Plan, we immediately initiated a
Major Incident Management Response upon the incident
being identified to manage the incident and our recovery
activities.
This event did not sit comfortably with us as a team,
and notwithstanding 18 years of operation with no
similar issue, we are establishing a ‘failover’ solution to
mitigate the risk of any repeat incidents of this nature
again. This solution will comprise a ‘dongle’ supplied in
combination with our standard terminals as an extra level
of redundancy - this is an industry first move.
The root cause of the incident was established with
the assistance of our terminal supplier. Specifically, an
issue existed in some versions of the terminal platform
software installed on the impacted terminals. This issue
caused those impacted terminals to lose connectivity
with our network meaning they could neither transact
nor be updated remotely.
To resolve the situation we collected, repaired, and
returned the impacted terminals to merchants as rapidly
as was possible and at the peak of the connectivity
issue, 19% of our merchants were fully impacted by
the incident, and a further 11% of our merchants were
impacted on a limited basis as they had multiple
terminals with at least one functioning unit allowing
them to continue to process payments. The majority of
our merchants (70%) were unaffected by the incident.
We have also implemented a remediation program
for financially affected merchants and we are pleased
to report strong progress in the resolution of make
good claims has been made. All financially impacted
merchants were invited to register with Tyro to enable
remediation claims to be assessed. As at 23 August
2021 we have settled claims with approximately 85% of
those merchants who have sought remediation via this
process.
The remediation process remains available for claims
of financially impacted merchants - providing a fast
and straightforward assessment aimed at resolution
without the cost, delays and uncertainty inherent in legal
proceedings.
24
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT Financial Performance
GROUP HIGHLIGHTS:
REVENUE
Overall financial highlights for the Group in
the 2021 financial year include:
•
•
•
•
26% increase in transaction value to a
record $25.5 billion (FY20: $20.1 billion).
28% increase in gross profit to a record
$119.4 million (FY20: $93.5 million).
424% increase in EBITDA1 to a record
$14.2 million (FY20: loss of $4.4 million).
58% improvement in normalised net
loss before tax $10.9 million (FY20: loss
of $25.9 million).
• $18.3 million before tax in one-off
significant costs (FY20: Nil) relating to
the connectivity issue, M&A costs, and
IPO costs.
•
22% improvement in statutory net loss
after tax of $29.8 million (FY20: loss of
$38.1 million).
• Well positioned balance sheet with
$83.7 million in total capital and a
capital ratio of 73% (FY20: $165.8 million
and 162%).
Total revenue was up 13.2% at $238.5 million (FY20:
$210.7 million). The key factors driving this revenue uplift
at a segmental level are described below:
PAYMENTS BUSINESS
Our Payments business generated a 13.0% lift in revenue
to $229.2 million (FY20: $202.8 million). The key factors
impacting this performance were the:
•
•
•
•
26.4% increase in transaction value;
23.4% increase in the number of merchants
excluding the new Bendigo merchants who only
contributed for one month;
8.8 basis point reduction in merchant service fees
(FY21: 0.8075% vs FY20: 0.8953%) reflecting the
shift to debit cards which generate lower merchant
service fees and a significant reduction in the
use of international cards (with the retractions
on international travellers) which generate higher
merchant service fees; and
20.7% lift in terminal rental revenue to $21.3 million
(FY20: $17.7 million) from the 16.6% increase in
terminal numbers (excluding Bendigo terminals) and
lower Covid terminal rental fee relief in the year as
Covid impacts reduced.
BANKING BUSINESS
Our Banking business lifted its revenue 77.2% to $3.2
million (FY20: $1.8 million). This performance benefited
from a $1.3 million write-back of the previous year’s $2.4
million fair value adjustment recognised on our business
loans under accounting standards being management’s
best estimate at the time of the potential Covid impact
on loan repayments. Excluding the fair value adjustment
to provide a better look through of our Banking
operation’s performance, interest income on our business
loans decreased 53.3% to $2.0 million (FY20: $4.2
million) reflecting our actions to restrict lending activity
in the first 9-months of FY21. In FY21, loan originations
decreased 57.0% with $25.8 million of loans written
compared to $60.1 million in FY20.
1
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense,
share of loss from associates, expenses associated with the terminal connectivity issue and the IPO and other significant one-off costs.
25
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
OTHER REVENUE
Other revenue remained stable at $6.1 million (FY20: $6.0
million). The main contribution to other revenue came
from JobKeeper at $4.5 million (FY20: $3.9 million) and
interest income of $1.0 million (FY20: $1.8 million).
GROSS PROFIT1
Gross profit was up 27.8% at $119.4 million (FY20: $93.5
million) with:
•
our payments operation contribution lifting to $110.5
million (FY20; $86.1 million). This reflected lower
interchange and scheme fee costs at a portfolio
level due to the increase in the card mix of debit
cards (which have lower costs) and the reduction
in the card mix of international cards (which have
higher costs). The margin between the merchant
CHART 4 – OPERATING LEVERAGE CHART – FY21
1.0000%
0.9500%
0.9292%
0.9531%
0.9403%
service fee we charge merchants and the costs we
pay to the card schemes and card issuers, namely
our merchant acquiring fee margin was 0.3437% of
transaction value vs 0.3205% in FY20. Interchange,
integration, and support fees for our payments
business were up only 1.4%, significantly lower
than the 13.0% increase in payments revenue due
to the lower direct costs incurred on debit cards
and the significant reduction in higher direct cost
international cards;
•
our banking business contribution lifting to $2.6
million (FY20: $1.3 million). The gross profit margin
was 88.2% (FY20: 71.6%). The uplift in gross profit
and the margin improvement benefited significantly
from the $1.3 million write-back of the prior year
provision for fair value adjustment to loans.
0.9269%
0.8953%
0.9000%
0.8500%
0.8000%
0.7500%
0.7000%
0.6500%
0.6000%
0.5500%
0.5000%
0.4500%
0.4000%
0.6151%
0.5436%
0.5283%
0.5905%
0.5379%
0.5170%
0.5377%
0.5170%
0.5065%
0.5559%
0.5251%
0.4759%
0.5365%
0.4861%
0.4643%
0.8075%
0.4704%
0.4244%
0.4147%
FY16
FY17
FY18
FY19
FY20
FY21
MSF as a % of Transaction Value
Operating expenses as a % of Transaction Value
Interchange + Scheme Fees as a % of Transaction Value
Gross Profit as a % of Transaction Value
EBITDA2
We recorded a record positive EBITDA2 of $14.2 million (FY20: EBITDA loss of $4.4 million). This represents a 424.0%
improvement on the prior year. The record EBITDA result was driven by the 27.8% increase in gross profit against a
7.6% increase in operating costs (excluding the costs associated with the terminal connectivity issue and M&A project
costs).
Our EBITDA result implies an EBITDA margin of 12% demonstrating operating leverage from scale in the year.
1
2
Gross profit of $119.4 million includes the JobKeeper benefit of $4.5 million received from 1 July 2020 to 30 September 2020 and $1.0
million in terminal rental relief provided as a result of the terminal connectivity issue less $0.7 million in commissions amortised under the
Bendigo Bank Alliance. Excluding JobKeeper in both FY21 and FY20, gross profit increased 23.0%.
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense,
share of loss from associates, expenses associated with the terminal connectivity issue and the IPO and other significant one-off costs.
26
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT EARNINGS BEFORE INTEREST
AND TAX (EBIT)
Our statutory EBIT loss for the reporting period was
$29.3 million, an improvement on the prior year (FY20:
loss of $37.5 million). Depreciation and amortisation
were up 22.7% at $15.4 million (FY20: $12.5 million)
reflecting new terminal purchases to meet the growth in
merchant numbers (including terminals required for the
Bendigo Bank Alliance).
Further increasing the EBIT loss was the terminal
connectivity issue costs amounting to $13.3 million
(FY20: Nil), M&A project costs of $4.7 million (FY20: Nil),
IPO costs of $0.3 million (FY20: $9.7 million) and share-
based payment expenses of $9.3 million (FY20: $10.9
million).
On a normalised basis, excluding the impact of the
terminal connectivity costs, the M&A project costs and
the IPO costs, our EBIT loss was $10.4 million (FY20:
$25.9 million).
NET LOSS AFTER TAX
Net loss after tax on a statutory basis improved 21.7% at
$29.8 million (FY20: $38.1 million). On a normalised basis,
net loss before tax was $10.9 million, an improvement
of 57.9% (FY20: $25.9 million). No tax benefit was
recognised in FY21 or FY20. At 30 June 2021 we have
$40.5 million in recognised and unrecognised tax losses
available for probable future use.
FINANCIAL POSITION
We continue to maintain a balance sheet that positions
us well for our growth ambitions. Cash, cash equivalents
and financial investments available at 30 June 2021
totalled $172.8 million (FY20: $188.3 million).
At year end we held $15.4 million in merchant loans as
assets, against merchant deposits of $75.5 million (FY20:
$50.5 million) as current liabilities on the balance sheet.
Our net asset position decreased to $180.6 million at
30 June 2021 (FY20: $189.7). Total assets were $396.1
million, up $132.3 million from the FY20 position largely
reflecting an intangible asset of $110.7 million for
the Bendigo Bank Alliance merchant contracts. Total
liabilities at 30 June 2021 were $215.5 million, up $141.3
million from the FY20 position primarily relating to
future commission payments of $102.3 million under the
Bendigo Bank Alliance and an increase of $25.0 million in
merchant deposits.
Total regulatory capital at 30 June 2021 was $83.7 million
with a total capital ratio of 73% (FY20: $165.8 million with
a capital ratio of 162%). Tyro has always held sufficient
capital to meet its internal targets which are above
APRA’s prudential capital requirements.
Total capital expenditure for FY21 was $23.1 million (FY20:
$11.9 million) in the main comprising terminal purchases
and investment in software, including capitalised internal
development costs of $3.7 million (FY20: $2.8 million).
27
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT Employee benefits expense (excl. share-based payments)
(76,174)
(67,662) p
12.6%
TABLE 2 – SUMMARY FINANCIAL PERFORMANCE
Transaction value
Payments revenue and income
Lending and investment income
Other revenue and income
Total revenue
Payments direct expenses
Interest expenses on deposits
Total direct expenses
Gross profit
Operating expenses:
Administrative expenses
Contractor and consulting expenses
Marketing expenses
Lending and non-lending losses
Significant one-off costs associated with connectivity issue and M&A
Total operating expenses
EBITDA1
Share based payments expense
IPO expenses
Share of loss from associates
Costs associated with terminal connectivity issue
M&A project costs
Bendigo partner revenue share
Depreciation and amortisation
EBIT
Net interest expense
Loss before tax
Income tax exepnse
Loss after tax
Reconciliation to normalised net loss before tax
Net loss before tax (statutory)
Add back (before tax):
IPO expenses
Share based payments expense relating to IPO
Costs associated with terminal connectivity issue
M&A project costs
3,222
6,078
238,522
(118,694)
(379)
(119,073)
119,449
(7,192)
(5,419)
(10,863)
17,268
FY21
($’000)
FY20
($’000)
CHANGE
%
25,453,507
20,131,045 p
26.4%
229,222
202,826 p
1,818 p
6,031 p
210,675 p
(116,684) p
13.0%
77.2%
0.8%
13.2%
1.7%
(516) q
26.6%
(117,200) p
93,475 p
1.6%
27.8%
(22,903)
(16,598) p
38.0%
(5,913) p
(5,716) q
21.6%
5.2%
(1,958) p 454.8%
- p
-
7.6%
(105,283)
(97,847) p
14,166
(9,342)
(331)
(1,119)
(13,285)
(4,681)
698
(4,372) p 424.0%
(10,896) q
14.3%
(9,730) q
96.6%
- p
- p
- p
- p
-
-
-
-
(15,364)
(12,524) p
22.7%
(29,258)
(37,522) p
(517)
(535) q
(29,775)
(38,057) p
(48)
-
22.0%
3.4%
21.8%
-
(29,823)
(38,057) p
21.6%
FY21
($’000)
FY20
($’000)
CHANGE
%
(29,775)
(38,057) p
21.8%
331
563
13,285
4,681
9,730 q
2,411 q
96.6%
76.6%
- p
- p
-
-
Net loss before tax (normalised)
(10,915)
(25,916) p
57.9%
1
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense,
share of loss from associates, expenses associated with the terminal connectivity issue and the IPO and other significant one-off costs.
28
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
29
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT Segment Financial
Performance
PAYMENTS BUSINESS REVIEW
FY21 HIGHLIGHTS
Our Payment team had a very successful year
with FY21 highlights including:
• A record $25.5 billion (FY20: $20.1 billion) in
transactions processed by Tyro merchants
– an impressive 26.4% uplift in what was a
challenging year.
• A 81% spike in merchants choosing Tyro
as their payments solution with a record
58,186 merchants in our ecosystem –
39,696 excluding Bendigo (FY20: 32,176).
• An all-time high achieved in payments
gross profit at $110.5 million (FY20: $86.1
million) – up 28.3%.
•
Transformative Bendigo Bank Alliance
completed on schedule on 1 June 2021
adding close to 19,000 new merchants and
annualised transaction value of ~$5 billion.
• Maintained our position as Australia’s
5th largest merchant acquiring bank by
terminal count – 104,827 terminals up 67.1%
(FY20: 62,722).
• Healthy retention metrics maintained with
our merchant churn rate at 11.3% (FY20:
11.7%) and transaction churn rate of 8.7%
(FY20: 8.0%).
•
eCommerce transaction value at $70.3
million (FY20: $10.6 million) with the
opportunity now to grow more significantly
with in-app payment capability switching
on for me&u a leading ‘tap, order and pay’
solution for hospitality venues.
• Pilot of ‘Tyro Go’ our mobile dongle
launched – this new terminal type to power
our entry into the trades vertical as well as
providing a failover solution for merchants.
• Health fintech Medipass acquired in May
2021 – adding innovative card-less digital
healthcare claiming and payments to Tyro’s
core health vertical.
•
‘Tyro Connect’ performing strongly after it
was launched in late FY20 - 124 merchants
now using Tyro Connect in their business
with 695,000 transactions processed via
the platform (FY20: Nil)
•
322 point of sale system integrations – up
from 308 in FY20.
30
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT PAYMENTS BUSINESS FINANCIAL PERFORMANCE
Transaction value
Payments revenue and income
Payments direct expenses
Payments gross profit
Gross profit margin
FY21
($’000)
FY20
($’000)
25,453,507
20,131,045
229,222
(118,694)
110,528
48.2%
202,826
(116,684)
86,142
42.5%
MAF margin to transaction value
0.3437%
0.3205%
CHANGE
%
26.4%
13.0%
1.7%
28.3%
5.7 pts
2.3 bps
p
p
p
p
p
p
PERFORMANCE REVIEW
FY21 was another record year for our Payments business despite the challenges presented by Covid and from the
terminal connectivity issue experienced in January 2021. Our performance perhaps best evidenced by the all-time
high $25.1 billion in transactions processed (up 24.3% on FY20’s $20.1 billion) on behalf of the 39,696 merchants
(up 23% on FY20’s 32,176) who selected Tyro as their payments’ provider. Our new merchant acquiring alliance with
Bendigo Bank which commenced on 1 June 2021, delivered $0.44 billion of the year’s transaction value for the month
of June from 18,490 merchants.
Transaction value ($’ billion)
Merchants (Number)
TYRO PAYMENTS
BUSINESS
BENDIGO BANK
MERCHANT ALLIANCE
$25.1 billion
$0.4 billion
COMBINED
$25.5 billion
39,696
18,490
58,186
New merchant acquisition started the year strongly after being impacted by Covid in the last quarter of FY20. This
momentum was disrupted in January and February 2021 as we completely focused our efforts on resolving the
connectivity issue and the impact it had on some of our merchants. Pleasingly we returned to strong growth in the
last quarter of FY21 to finish the year with 39,696 merchants (excluding the new Bendigo Bank merchants) – up 23.4%
on FY20. We averaged just under 1,000 new merchant applications per month for FY21, up 13% on FY20. Of note we
achieved all-time record levels of new merchant applications in June with sign-ups reaching 1,482. Another positive
indicator for our business is the stability of our merchant retention metrics which remain at comparative lows when
considering for the segments we serve, with transaction value churn remaining stable at 8.7% (FY20: 8.0%) and
merchant number churn decreasing 40 basis points to 11.3% (FY20: 11.7%).
CHART 5 - NEW MERCHANT APPLICATIONS
1,600
1,400
1,200
1,000
800
600
400
200
0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb Mar
Apr May
Jun
FY20
FY21
31
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
Our hospitality vertical delivered exceptionally strong
transaction value growth lifting 34.0% in FY21 as
states came out of lockdown and consumers spent
domestically given the international border lockdown.
Our retail vertical delivered a solid 18.3% growth while
our health vertical achieved 12.7% in transaction value
growth, still impacted to a certain extent by lower
elective procedures.
From a geographical standpoint, all states and territories
outside of New South Wales and Victoria delivered
standout growth for FY21, averaging growth of ~40%
per state or territory. As can be seen from Chart 6, New
South Wales delivered growth of 20%, while Victoria
which was the state most impacted by lockdowns in
FY21 delivered growth of only 9%.
CHART 6 - TRANSACTION VALUE GROWTH BY STATE/TERRITORY
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
NSW
VIC
QLD
WA
SA
TAS
ACT
NT
In terms of total transaction value contribution by geography, Chart 7 shows the contribution by each state and
territory in FY21 and provides a comparative with FY20.
CHART 7 - TRANSACTION VALUE CONTRIBUTION BY STATE
7%
4%
10%
22%
37%
FY21
FY20
20%
32
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
The growth in our transaction value and merchant
numbers saw us deliver record revenue from our
Payments operation of $229.2 million, up 13.0% on the
$202.8 million achieved in FY20. This translated into
record gross profit lifting 28.3% to $110.5 million (FY20:
$86.1 million). Our Merchant Acquiring Fee (MAF) margin
of 0.3437% to transaction value was up 2.3 basis points
from the 0.3205% achieved in FY20, reflecting a card mix
shift with:
• more transactions via debit cards which attract a
lower merchant service fee but carry lower scheme
and interchange costs; and
•
fewer transactions via international credit cards due
to travel restrictions, which have higher merchant
service fees but also carry higher scheme and
interchange costs.
On 1 June 2021, we completed the Bendigo Bank
merchant acquiring Alliance we announced on 16
October 2020 on schedule. Under the Alliance Tyro
exclusively provides merchant acquiring services to
Bendigo Bank’s existing merchant acquiring customers
and Bendigo Bank will exclusively refer new merchant
opportunities from its business customer base to Tyro,
all under a co-brand. This transformative Alliance is
expected to add an additional ~$5.0 billion in transaction
value and to be EBITDA positive in FY22.
We acquired Medipass on 31 May 2021. Medipass’
functionality, insurer integrations and simplicity are its
key differentiators. It integrates with 18 cloud-based
practice management and booking systems and has
approximately 1,700 active healthcare merchants
working with it. This complements, with limited overlap,
the over 9,500 merchants in Tyro’s health vertical and
the 52 practice management systems integrated with
Tyro. The acquisition will provide Tyro’s health merchants
greater claiming and payment capabilities extending
beyond Tyro’s private health insurer and Medicare
Easyclaim options to include a range of State and
Federal based compensatory funders.
33
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT BANKING BUSINESS REVIEW
FY21 HIGHLIGHTS
Our Banking team navigated the challenges
of Covid and achieved a number of key
accomplishments in FY21 including:
• Supporting our Covid-19 impacted
• Delivering record monthly loan
originations of ~$8million in May 2021
with strong origination uptake ($21.6
million) in the last four months of FY21.
merchants by providing loan repayment
relief, this is a continuing initiative.
•
Loan originations of $25.8 million
generated in FY21, down 57% as a result
of our deliberate actions to address Covid
uncertainty (FY20: $60.1 million).
• Write-back of $1.3 million prior year fair
value adjustments to loan balances
due to the risk of bad debts decreasing
through FY21.
• Strong uptake of the Tyro bank account
and term-deposit account with deposit
balances of $75.5 million (FY20: $50.5
million).
• During the first half of the year pivoting
to a fully manual approval process for
our merchant cash advance loans, to
enable the volatile impacts of Covid-19
lockdowns on merchant transactions to
be understood and assessed on a case-
by-case basis. In addition introducing the
ability to offer the Federal Government’s
loan guarantee scheme.
•
In the second half of the year re-instating
our automated approval process for our
merchant cash advance loans and re-
engaging our marketing efforts, delivering
a rapid lift in originations.
BANKING BUSINESS FINANCIAL PERFORMANCE
Loan originations
Interest income on loans
Fair value adjustment on loan balance
Interest expense on deposits
Banking gross profit
Gross profit margin
FY21
($’000)
25,843
1,952
1,270
(379)
2,843
88.2%
FY20
($’000)
60,107
4,179
(2,361)
(516)
1,302
71.6%
q
q
p
q
p
p
CHANGE
%
57.0%
53.3%
153.8%
26.6%
118.4%
16.6 points
PERFORMANCE REVIEW
Loan originations in the year of $25.8 million were
down 57.0% (FY20 of $60.1 million). This lower level
of originations reflecting our deliberate actions to
address Covid uncertainty and saw revenue from our
merchant loans decline 52.4% to $2.0 million (FY20:
$4.2 million). With the onset of Covid in March 2020,
we limited access to our merchant cash advance loans
(from April 2020 to February 2021) by pivoting from a
fully automated loan approval process to a ‘desk top’
assessment to enable the volatile impacts of Covid-19
lockdowns on merchant transactions to be understood
and assessed on a case-by-case basis.
In March 2021 we moved back to automated approvals
and recommenced promoting the product to our
merchant base. This resulted in a record last quarter for
FY21 with close to $20 million in loans originated, with
May 2021 setting an all-time record month of $8.1 million
in originations.
To further enhance the availability of our merchant
cash advance to more merchants seeking assistance
in managing their cashflows, the product can now be
accessed without the prerequisite of holding a Tyro bank
account.
34
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
CHART 8 - LOAN ORIGINATIONS FOR FY21
9,000,000
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
FY21
FY20
Our risk-based management of the loan product during Covid
together with many merchants businesses rebounding following
the initial lockdowns, saw our loss rates remain well within our
risk appetite. Loan losses as a percentage of originations at 30
June 2021 amounted to 2.8% ($0.7 million) compared to 1.8% ($1.1
million) in FY20.
We ended the year with more than 4,600 active Tyro bank
accounts (FY20: 4,379) with merchants attracted to the fee free
and interest bearing features of this account. This product held
$72.5 million in deposits at 30 June 2021 (FY20: $49.7 million). Our
term-deposit account that was launched in July 2021 to all eligible
merchants after a pilot phase in FY20 and ended the year with
total balances of $3.0 million.
Our Banking business delivered gross profit of $2.8 million (FY20:
$1.3 million) representing a gross profit margin of 88.2% (FY20:
71.6%). The gross profit benefited from the write-back of the
prior year fair value adjustment on loan balances of $1.3 million.
Excluding the impact of the accounting fair value adjustments
for FY21 and FY20, normalised gross profit was down 57.1% to
$1.6 million (FY20: $3.7 million) due to the 57.0% decrease in loan
originations.
Although our banking operation still only represents a small part
of the overall Tyro business, it presents an alternative to the major
banks and has strong prospects for continued growth.
35
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
CONTINUED ASSISTANCE
PROVIDED TO MERCHANTS AND
OUR TEAM
With the continued uncertainty posed by Covid, we
continue to do all that we can to assist and support our
merchants and our team.
For our merchants we continue to offering financial
assistance for those in hardship and this includes
providing terminal rental relief, loan repayment holidays
and waiving notice periods / break fee for drawing on
term-deposit accounts. Our Australian based customer
support team is available 24/7 for our merchants wishing
to discuss their particular circumstances. We also
have put together information and inspiration to help
merchants survive and thrive, including:
•
•
providing educational blogs on how other business
have responded / adapted and how Tyro products
such as eCommerce and Tyro Connect can assist;
sharing links to Government sites to assist
merchants locate official information – in particular
assistance that is available for small businesses as
new economic stimulus packages are announced.
To protect the safety of our team we have moved swiftly
whenever a lockdown was mandated to make the
necessary arrangements for our team to work remotely.
Even though the vast majority of our team worked from
home during lockdowns, we continued to service all our
merchants to our usual high standard. We also recognise
that for life in Australia to return to ‘normal’ can only
happen once a majority of Australians are vaccinated. To
play our part in this national drive, all our team members
who choose to get vaccinated will receive half a day
of additional paid leave for each of their two COVID-19
vaccinations.
"...all our team
members who choose
to get vaccinated
will receive half a day
of additional paid
leave for each of
their two COVID-19
vaccinations."
36
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT LOOKING AHEAD TO FY22
It is an exhilarating time to be a Tyro, we have achieved a
lot in the last year, but it is the opportunity in front of us
that for me remains large and exciting.
We have a mix of features and products in train that will
continue to build out our payments centric ecosystem.
Products such as the Tyro Go terminal which will open up
new verticals (trades and micro merchants for example)
and provide a ‘queue busting’ solution for larger retailers.
We are assessing our next generation terminal which
presents some exciting opportunities including a mPOS
capability. We are looking to extend our merchant cash
advance product to make it available to a wider cohort
of Tyro merchants with larger advances available. With
the digital claiming capabilities including State and
Federal compensatory funders available via Medipass,
we have an opportunity in combination with our existing
health solutions, to create the leading unified claiming
and payments platform for Australian healthcare
practitioners.
We have created IP (both technical and commercial)
in creating our payments alliance model for Bendigo
Bank, which has potential applicability to other market
opportunities – this is an area we remain keenly
interested in exploring. We continue to have appetite
for ‘bolt on’ acquisitions, whether large or small, which
present an avenue to gain scale, leverage our platform or
capabilities, enhance our market position or supplement
our ecosystem.
In closing I would like to thank my brilliant team at Tyro
and formally welcome the Medipass team to the family
– without your commitment to the cause, sheer hard
work and desire to make payments and banking better
for Australian businesses particularly, the backbone of
Australian business, SMEs. I would also like to thank Tyro
Board both past and present for the support over the last
3½ years.
I look forward to providing you with more information on
our trading performance for the beginning of FY22 at our
Annual General Meeting on 3 November 2021.
Robbie Cooke
CEO | Managing Director
"...created IP (both
technical and
commercial) in creating
our payments alliance
model for Bendigo Bank,
which has potential
applicability to other
market opportunities –
this is an area we remain
keenly interested in
exploring..."
"...appetite for ‘bolt on’
acquisitions, whether
large or small, which
present an avenue to
gain scale, leverage our
platform or capabilities,
enhance our market
position or supplement our
ecosystem..."
"...I would like to thank
my brilliant team at Tyro
and formally welcome
the Medipass team to the
family ..."
37
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CEO AND MANAGING DIRECTOR'S REPORT
38
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 PROFILES
39
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 Board of
Directors
DAVID THODEY AO
CHAIR OF THE BOARD
Independent non-executive Director since November 2018 and
Chairman since 15 October 2019.
Other Tyro Responsibilities:
• Member of the People Committee.
Career:
David is a business leader focused on innovation, technology
and telecommunications, with more than 30 years’ of experience
in the technology and telecommunications industries. He has
a track record of creating brand and shareholder value, and has
been successfully involved in innovation across a wide range
of sectors. David had a successful executive career as CEO of
Telstra, Australia’s leading telecommunications and information
services company from 2009 to 2015. He began his career at
IBM, where he spent more than 22 years and held several Asia
Pacific senior executive positions including Chief Executive
Officer of IBM Australia and New Zealand. In 2017, David was
made an Officer (AO) in the General Division of the Order of
Australia for his service to business and the promotion of ethical
leadership and workplace diversity.
Relevant other Directorships held in the past three
years:
• Chair of Xero Limited, a leading New Zealand based cloud-
based accounting software platform for small and medium-
sized businesses.
• Chair of the Commonwealth Scientific and Industrial Research
Organisation (CSIRO).
• Non-executive director of Ramsay Health Care, a global
hospital group.
• Former Non-executive director of Vodaphone plc, a global
telecommunications company (1 September 2019 to 28 July
2020).
Qualifications:
David holds a Bachelor of Arts in Anthropology and English from
Victoria University, Wellington, New Zealand, attended the Kellogg
School of Management postgraduate General Management
Program at Northwestern University in Chicago, USA, and was
awarded an Honorary Doctorate in Science and Technology from
Deakin University in 2016 and an Honorary Doctorate of Business
from University of Technology Sydney in 2018.
40
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021BOARD OF DIRECTORS ROBBIE COOKE
CEO | MANAGING DIRECTOR
HAMISH CORLETT
NON-EXECUTIVE DIRECTOR
CEO since 31 March 2018 and Managing Director since
18 October 2019.
Independent non-executive Director since April 2019.
Career:
Robbie has led as CEO | Managing Director three ASX
listed companies in a business career spanning more
than 30 years. He has traversed scale-ups, listings
and significant M&A actions in technology enabled
businesses delivering significant shareholder value.
This included 7 years running Australia's leading online
travel company Wotif.com, taking the business through
scale-up from start-up mode, achieving a circa five
fold increase in profits and a successful IPO in 2006.
He operated the lotteries, race wagering and sports
betting conglomerate Tatts Group for 5 years until its
merger with Tabcorp in March 2018.
Qualifications:
Robbie holds a Bachelor of Laws (Honours) from the
University of Queensland Law School, a Bachelor of
Commerce from the University of Queensland and a
Graduate Diploma in Company Secretarial Practice
from the Governance Institute of Australia. Robbie
is a member of the Australian Institute of Company
Directors, an associate of the Governance Institute
of Australia and a solicitor of the Supreme Court of
Queensland.
Other Tyro Responsibilities:
• Member of the Audit Committee.
• Member of the People Committee.
Career:
Hamish is a founder and partner of TDM Growth
Partners, a private investment firm specialising in high
growth companies globally. Hamish has over 20 years’
experience in investing and investment banking. Prior
to TDM, Hamish worked as an Investment Manager at
Caledonia Investments, a global fund manager, and an
Analyst at Caliburn Partnership (now Greenhill).
Relevant other Directorships held in the past
three years:
• Non-executive director of SomnoMed Limited, a
medical company providing treatment solutions for
sleep-related breathing disorders.
• Non-executive director of QBiotics Group Limited, an
Australian life sciences company
Qualifications:
Hamish holds a Bachelor of Commerce with Honours
Class 1 (Accounting and Finance) from the University of
Sydney and a Graduate Diploma of Counselling from the
Australian College of Applied Psychologists.
41
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021BOARD OF DIRECTORS DAVID FITE
NON-EXECUTIVE DIRECTOR
ALIZA KNOX
NON-EXECUTIVE DIRECTOR
Independent non-executive Director since July 2018.
Independent non-executive Director since April 2021.
Other Tyro Responsibilities:
• Member of the Risk Committee.
Career:
David has over 30 years’ experience in the financial
services industry. David has held various roles at
Westpac Banking Corporation, including Treasurer,
Assistant Chief Financial Officer and the Group
Executive responsible for all retail and business banking
products in Australia. David has also worked at Japan’s
Shinsei Bank (formerly known as The Long-Term Credit
Bank of Japan) as Senior Corporate Executive Officer,
Chief Financial Officer and a member of its Board. David
is also an active investor in various credit, financial
services and technology businesses.
Relevant other Directorships held in the past
three years:
• Director of Judo Capital Holdings Ltd and Judo Bank
Pty Ltd, a SME challenger bank.
• Director of Evari Technologies Pty Ltd and Evari
Services Pty Ltd, entities which own or help develop
software for the insurance industry.
• Director of Marsello Ltd, a company that makes
intelligent marketing accessible and easy for multi-
channel retailers.
• Director of MYOB Group Co Pty Ltd, a provider of
accounting, tax and business services.
Qualifications:
David holds a Bachelor of Arts in Government (Magna
Cum Laude) from Harvard College, and a Master of
Business Administration and Masters in Economics from
Stanford University.
Other Tyro Responsibilities:
• Member of the People Committee.
• Member of the Risk Committee.
Career:
Aliza has more than three decades of broad international
marketing and management experience in the financial
services and technology sectors having held senior
executive roles internationally at Boston Consulting Group,
Charles Schwab, Visa International, Twitter and Google.
Her previous roles include Head of APAC for Cloudflare,
Chief Operating Officer at Unlockd, Vice President, Asia
Pacific at Twitter, Managing Director of Commerce and
Online Sales & Operations for Asia Pacific at Google
Asia Pacific,Senior Vice President, Commercial Solutions
and Global Product Platforms at Visa International, and
Senior Vice President, International Wireless and Global
Expansion Asian Focus at Charles Schwab Corporation.
Aliza was also named IT Woman of the Year (Asia) in 2020.
Relevant other Directorships held in the past
three years:
• Non-executive Director of Healthway Medical Group
Limited in Singapore
• Former Non-executive Director of Scentre Group
Limited (May 2015 to April 2020)
• Former Non-executive Director of Singapore Post
Limited (August 2013 to July 2018)
Qualifications:
Aliza holds an MBA in Marketing (Honors) from New York
University-Leonard N. Stern, School of Business, and a B.A.,
Applied Mathematics and Economics (Magna Cum Laude)
from Brown University.
42
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021BOARD OF DIRECTORS FIONA PAK-POY
NON-EXECUTIVE DIRECTOR
PAUL RICKARD
NON-EXECUTIVE DIRECTOR
Independent non-executive Director since September
2019.
Independent non-executive Director since August 2009.
Other Tyro Responsibilities:
• Chair of the People Committee.
• Member of the Audit Committee.
Career:
Fiona has over 25 years’ experience in a variety of
industries, for companies ranging from startups to large
public companies and not-for-profits. Fiona has served
on various boards, including MYOB, StatePlus, and the
commercialisation office of The University of Adelaide,
Adelaide Research and Innovation. She was a strategy
consultant for the Boston Consulting Group in the US
and Australia, and was also a partner in an Australian
venture capital fund focused on technology startups.
Relevant other Directorships held in the past
three years:
• Non-executive Director of ASX-listed iSentia Limited,
a media intelligence and data technology company.
• Non-executive Director of ASX-listed Booktopia,
Australia’s largest online book seller.
• Director of the Sydney School of Entrepreneurship.
• Former Non-executive Director of Novotech Aus
HoldCo, Asia-Pacific's leading contract research
organisation (CRO) providing clinical research
solutions world-wide.
• Former Non-executive Director of MYOB Group
Limited prior to their buyout by KKR in April 2019
(January 2017 to April 2019).
Qualifications:
Fiona holds an Honours degree in Engineering from
The University of Adelaide and a Master of Business
Administration from the Harvard Business School.
Fiona is a Fellow of The Australian Institute of Company
Directors.
Other Tyro Responsibilities:
• Chair of the Risk Committee.
• Chair of the Audit Committee.
Career:
Paul was the founding Managing Director of CommSec,
which he led from 1994 to 2002, and was Chairman
until 2009. After a 20 year career with Commonwealth
Bank finishing in the role of Executive General Manager
Payments & Business Technology, Paul left in 2009
to team up with Peter Switzer and found the Switzer
Super Report, a subscription based newsletter for
the trustees of self-managed super funds. An expert
in investment and superannuation, Paul is a regular
commentator on TV, radio and online and also oversees
editorial development at Switzer Financial Group Pty
Ltd. In 2005, Paul was named ‘Stockbroker of the
Year’ and admitted to the Industry Hall of Fame of the
Australian Stockbrokers Foundation.
Relevant other Directorships held in the past
three years:
• Non-executive Director of PEXA Group Ltd (ASX: PXA).
• Non-executive Director of WCM Global Growth Ltd
(ASX: WQG).
• Non-executive Director of Russh Media Pty Ltd.
• Director of Switzer Financial Group Pty Ltd.
• Non-executive Director of Titan Platform Pty Ltd.
Qualifications:
Paul holds Bachelor of Science degrees in Mathematics
and Computer Science from the University of Sydney.
43
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021BOARD OF DIRECTORS Executive
Leadership
Team
ROBBIE COOKE
CEO | MANAGING DIRECTOR
PRAV PALA
CHIEF FINANCIAL OFFICER
Praveenesh (Prav) joined Tyro in 2014 in
the role of Chief Financial Officer. Prav
has over 20 years’ experience gained in
professional consulting, property funds
management, financial services and
the payments industry. Since starting
his career at PricewaterhouseCoopers,
Prav has held several senior positions at
QBE Insurance Group, Westfield Group,
Domaine Mirvac Funds Management and
ING Direct Australia, and has managed
large integration and strategic finance
related projects.
Prav holds a Bachelor of Commerce
(Merit) from the University of New South
Wales. He is a qualified CPA and member
of the CFA Institute.
Robbie joined Tyro on 31 March 2018 as
Chief Executive Officer and was appointed
as Managing Director on 18 October 2019.
Robbie has led as CEO | Managing
Director three ASX listed companies in
a business career spanning more than
30 years. He has traversed scale-ups,
listings and significant M&A actions
in technology enabled businesses
delivering significant shareholder value.
This included 7 years running Australia's
leading online travel company Wotif.
com, taking the business through scale-
up from start-up mode, achieving a
circa five fold increase in profits and a
successful IPO in 2006. He operated
the lotteries, race wagering and sports
betting conglomerate Tatts Group for
5 years until its merger with Tabcorp in
March 2018.
Robbie holds a Bachelor of Laws (Honours)
from the University of Queensland Law
School, a Bachelor of Commerce from
the University of Queensland and a
Graduate Diploma in Company Secretarial
Practice from the Governance Institute
of Australia. Robbie is a member of the
Australian Institute of Company Directors,
an associate of the Governance Institute
of Australia and a solicitor of the Supreme
Court of Queensland.
44
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021EXECUTIVE LEADERSHIP TEAM STEVEN CHAPMAN
CHIEF RISK OFFICER AND HEAD OF INTERNAL
AUDIT
Steve is a Chartered Global Management
Accountant (CGMA) and Certified
Information Systems Auditor (CISA).
He joined Tyro in March 2019 and was
appointed as Chief Risk Officer on 10 June
2021 leading the Tyro Risk and Compliance
function. Prior to this role, Steve led the
Internal Audit function, providing the Board
and Management with an independent
view on whether Tyro has an appropriate
risk and control environment.
After graduating from the University of
Glasgow, Steve began his career in project
management for a large UK utility firm
before moving into audit and risk roles.
Steve moved to Australia ten years ago
with his family and has since worked for
Woolworths, IAG and QBE.
DAVE COOMBES
CHIEF TECHNOLOGY OFFICER
JONATHAN DAVEY
CEO - MEDIPASS
Dave joined us in 2017 in the role of Chief
Technology Officer. Dave has over 20
years’ experience building and leading
teams that develop and operate large-
scale mission-critical systems for high
profile organisations across a range of
industries including financial services,
wagering, retail and telecommunications.
Prior to Tyro, Dave held senior technology
roles at BT Financial Group, Tabcorp
and Insurance Australia Group. Dave
also worked as a principal consultant at
ThoughtWorks while they were pioneering
the use of agile development methods for
software delivery.
Dave holds a PhD in Theoretical Physics
from the University of Sheffield, UK
and a first class honours degree in
Theoretical Physics from the University of
Birmingham, UK.
Jon joined Tyro in May 2021 in the role
of CEO - Medipass after Tyro acquired
Medipass.
Jon's expertise is in leading businesses
through the changes necessary to
succeed in a digital world. Prior to joining
Medipass, Jon was accountable for Digital,
Innovation and Customer Experience at
National Australia Bank. He is the founder
of National Australia Bank’s Innovation and
Corporate Venture Capital teams.
Jon has 25 years' experience in Corporate,
Consulting and Start-up businesses. He
has worked with leading Australian and
International companies and is the co-
founder of a technology start-up. Jon is
also on the Advisory Board of Finspo, a
Fintech focused on the digital origination
of mortgages and on the Technology
and Innovation Advisory Board for the
Australian Institute of Company Directors.
JAIRAN AMIGH
COMPANY SECRETARY AND SPECIAL COUNSEL
Jay was appointed as Company
Secretary on 20 February 2020. Jay
holds Bachelors of Law (Honours) and
Commerce from the University of
Queensland and has over 30 years in legal
practice focusing on financial services
and corporate governance.
45
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021EXECUTIVE LEADERSHIP TEAM YVETTE MANDANAS
CHIEF PEOPLE OFFICER
JAMES REVELL
CHIEF STRATEGY OFFICER
BRONWYN YAM
CHIEF PRODUCT OFFICER
Yvette joined us in 2016 to establish
the HR function in the role of Chief
People Officer. Yvette has over 17 years’
experience in HR in fast growth technology
organisations. Yvette specialises in the
design and delivery of HR operational,
talent acquisition, leadership development
and culture development initiatives to
drive business strategy. Yvette has held
HR leadership roles during her time at
Avanade, the Microsoft technology
consulting arm of Accenture, and at
Nearmap, an ASX-listed market leader in
geospatial map technology.
James joined us in 2017 to establish the
corporate strategy function, and was
appointed to the leadership team as
Chief Strategy Officer a year later. James
specialises in analysing and driving the
delivery of strategic growth opportunities
in consideration of structural trends and a
deep understanding of the current market.
Prior to Tyro, James previously held roles at
Monitor Deloitte and Telstra Digital.
James holds a first class Honours degree
from the University of Cambridge and a
Master of Commerce from the University
of Sydney Business School.
Yvette holds a Graduate Diploma in
Human Resource Management from
the University of Technology Sydney,
has completed an Executive Program in
People, Performance and Culture from
Stanford University, and is a professional
member of the Australian Human
Resources Institute (CAHRI).
LISA VITARIS
CHIEF MARKETING OFFICER
Lisa joined us in 2017 to drive both
brand and acquisition, and in 2018 was
appointed as Chief Marketing Officer.
Lisa has over 17 years’ experience in
marketing, specialising in financial
services. She has extensive experience in
branding and high growth acquisition, and
has held roles both client side at Aussie
Home Loans and CMC Markets, as well
as at advertising agencies working across
Citibank, Bankwest, CommSec and IMB.
Lisa holds a Master of Business in
International Marketing and is currently
completing her Master of Business
Administration at the University of
Technology, Sydney.
Bronwyn joined us in 2017 and is our
Chief Product Officer. Bronwyn has over
25 years’ experience in financial services
and consulting. She has extensive
experience in challenging the status quo
and delivering on innovative processes
and solutions. Bronwyn has a passion
for driving transformational change in
organisations and teams leveraging on
technology and disruptive thinking to
deliver desired customer outcomes. Prior
to joining Tyro, Bronwyn held several
senior roles in strategy, lending and
payments within Commonwealth Bank of
Australia since 2005. Bronwyn also had
a consulting career with Arthur Andersen
Business Consulting in the US and
across Asia, working with clients from
multiple industries from manufacturing
to financial services.
Bronwyn holds a Bachelors of Arts,
Business Economics from the University
of California, Los Angeles (UCLA) and a
Masters of Business Administration from
the Hong Kong University of Science and
Technology (HKUST).
46
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021EXECUTIVE LEADERSHIP TEAM SAMI WILSON
GENERAL COUNSEL
Sami is our General Counsel and joined
us in 2018 to establish the in-house legal
function. Sami has over 10 years’ legal
experience in a diverse range of areas,
including advising ASX-listed entities
on corporate law and M&A and working
on private equity, venture capital and
banking and finance transactions. Before
he joined us, Sami was a Senior Associate
at Herbert Smith Freehills.
Sami holds a Bachelor of Laws (Honours)
from the University of Melbourne and
a Bachelor of Commerce from The
University of Adelaide. Sami is admitted
as a solicitor of the Supreme Courts of
New South Wales and South Australia.
GIOVANNI RIZZO
CHIEF OF INVESTOR RELATIONS
JOSH WALTHER
CHIEF CUSTOMER OFFICER
Giovanni joined Tyro in late 2020 where
he established the Investor Relations
function. Giovanni is a qualified Chartered
Accountant and a member of Chartered
Accountants Australia and New Zealand
with over 20 years’ professional
experience working in South Africa,
Canada, and Australia.
Prior to joining Tyro, Giovanni worked at
PricewaterhouseCoopers before moving
into Investor Relations in 2013 as Head of
Investor Relations at Tatts Group Limited.
Giovanni is also a Non-executive Director
and Chair of the Audit Committee of ASX
listed Jumbo Interactive Limited.
Giovanni holds a Bachelor of Commerce
(Honours) and a Higher Diploma in the
Theory of Accounting from the University
of Johannesburg.
Josh joined Tyro in 2017 in the role
of Director of Sales, becoming Chief
Customer Officer in 2018. Josh has more
than 20 years’ experience in financial
services and management consulting with
ING Direct, Aussie Home Loans, KPMG
Consulting and Arthur Andersen Business
Consulting. He has extensive experience
delivering sales growth and customer
experiences for financial services
businesses across multiple distribution
formats including direct, digital and
partnerships. In his eight years at ING
Direct, Josh’s leadership in growing and
developing consumer sales and service
channels culminated in him being awarded
Australian Customer Experience Executive
of the Year and his team awarded Best
Contact Centre in Australia.
Josh holds a Bachelor of Business
(Honours – First Class) from the University
of Technology, Sydney and completed the
Stanford University Executive Program for
Growing Companies in 2019.
47
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021EXECUTIVE LEADERSHIP TEAM 48
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 5 YEAR
TRACK
RECORD
30 JUNE 2017
$’000
30 JUNE 2018
$’000
30 JUNE 2019
$’000
30 JUNE 2020
$’000
30 JUNE 2021
$’000
Transaction value
10,607,068
13,359,608
17,496,322
20,131,045
25,453,507
Transaction value annual growth
23.5%
26.0%
31.0%
15.1%
26.4%
Total revenue
120,575
148,231
189,770
210,675
238,522
Total revenue annual growth
25.9%
22.9%
28.0%
11.0%
13.2%
Direct expenses
Gross profit
(64,538)
(79,163)
(106,510)
(117,200)
(119,073)
56,037
69,068
83,260
93,475
119,449
Gross profit annual growth
21.3%
23.3%
20.5%
12.3%
27.8%
Operating expenses
EBITDA 1
(65,245)
(78,890)
(91,871)
(97,847)
(105,283)
(9,208)
(9,822)
(8,611)
(4,372)
Share-based payments expense
(1,841)
(1,411)
(3,788)
(10,896)
IPO expenses
Share of loss from associates
Costs associated with the connectivity issue
Bendigo Bank Alliance partner share
Mergers and acquisition costs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9,730)
-
-
-
-
14,166
(9,342)
(331)
(1,119)
(13,285)
698
(4,681)
Depreciation & Amortisation
(5,984)
(7,064)
(7,864)
(12,524)
(15,364)
Net interest cost
Loss before income tax
Loss after income tax
-
-
-
(535)
(517)
(17,033)
(18,297)
(20,263)
(38,057)
(29,775)
(14,820)
(17,146)
(18,439)
(38,057)
(29,823)
Cash, cash equivalents and investments
96,755
84,251
68,758
188,324
172,780
Cash flows from operating activities
(15,571)
(12,799)
(13,931)
8,194
11,043
1 Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact
of share-based payments expense, loss on equity investments, expenses associated with the terminal
connectivity issue and the IPO and other significant one-off costs.
49
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 50
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 DIRECTORS'
REPORT
51
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 Directors'
Report
FOR THE YEAR ENDED 30 JUNE 2021
The Directors present their report together with the Financial Report of the Group consisting of Tyro Payments
Limited (Company or Tyro) and its subsidiaries (Group) for the financial year ended 30 June 2021 and the
Independent Auditor’s Report thereon.
On 31 May 2021, the Company acquired a 100% ownership interest in Medipass Solutions Pty Ltd and accordingly
has prepared consolidated financial statements as at 30 June 2021. Refer Note 21 for details.
1. DIRECTORS
The following persons held office as Directors of the Company during the financial year and up to the date of this
Report (unless otherwise stated):
David Thodey AO
Chair & Non-executive Director
Independent
Robbie Cooke
Hamish Corlett1
David Fite
CEO | Managing Director
Executive
Non-executive Director
Independent
Non-executive Director
Independent
Catherine Harris AO, PSM2
Non-executive Director
Independent
Retired on 30 June 2021
Aliza Knox3
Non-executive Director
Independent
Appointed on 21 April 2021
Fiona Pak-Poy4
Non-executive Director
Independent
Paul Rickard
Non-executive Director
Independent
1 The last Board assessment of independence concluded that Hamish Corlett is an Independent Director.
2 Catherine Harris AO, PSM retired as Chair of the People Committee on 21 June 2021 and as Non-executive Director
effective 30 June 2021.
3 Aliza Knox was appointed to the Tyro Board as a Non-executive Director on 21 April 2021.
4 Fiona Pak-Poy was appointed as Chair of the People Committee on 21 June 2021
Details, including term of office, qualifications, experience and information on other directorships held by Directors,
can be found on pages 40 to 43 of the Annual Report.
2. COMPANY SECRETARY
Jairan Amigh
Jay was appointed as Company Secretary on 20 February 2020. Jay holds Bachelors of Law and Commerce and has
over 30 years in legal practice focusing on financial services and corporate governance.
52
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT 3. MEETINGS OF DIRECTORS
The number of meetings of the Company’s Directors (including meetings of Committees of Directors) and the number
of meetings attended by each Director during the financial year were:
BOARD OF
DIRECTORS MEETINGS
AUDIT COMMITTEE
RISK COMMITTEE
PEOPLE COMMITTEE
A
24
24
24
24
24
3
24
24
B
24
24
24
24
23
3
24
24
A
nm
nm
6
nm
nm
nm
6
6
B
nm
nm
6
nm
nm
nm
6
6
A
nm
nm
nm
8
nm
1
7
8
B
nm
nm
nm
8
nm
1
7
8
A
7
nm
7
nm
7
2
1
B
7
nm
7
nm
7
2
1
nm
nm
David Thodey
Robbie Cooke1
Hamish Corlett
David Fite
Catherine Harris2
Aliza Knox3
Fiona Pak-Poy4
Paul Rickard
A Number of meetings during the year while the Director was a member of the Board or Committee.
B Number of meetings attended by the Director as a member during the year.
nm Not a member of the relevant Committee.
1
The CEO | Managing Director is not a Non-executive Director. Robbie was invited by the Board to attend the Risk Committee, Audit
Committee and People Committee meetings (or part thereof).
2 Catherine Harris retired as Chair of the People Committee on 21 June 2021 and as Non-executive Director effective 30 June 2021.
3 Aliza Knox was appointed to the Board as a Non-executive Director on 21 April 2021 and attended meetings from that date.
4 Fiona Pak-Poy retired from the Risk Committee and joined the People Committee as Chair on 21 June 2021.
In addition to the Board and Committee meeting attendances noted above, a number of Directors participated in
other Committees established for special purposes.
At the date of this report, the Company has an Audit Committee, Risk Committee and People Committee. The
members of each Committee are as follows:
AUDIT COMMITTEE
RISK COMMITTEE
PEOPLE COMMITTEE
Paul Rickard (Chair)
Paul Rickard (Chair)
Fiona Pak-Poy (Chair)
Hamish Corlett
Fiona Pak-Poy
David Fite
Aliza Knox
Hamish Corlett
Aliza Knox
David Thodey
53
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT 4. DIRECTORS INTEREST IN SECURITIES
The relevant interest of each Director in securities of the Company at the date of this Directors’ Report is as follows:
DIRECTOR
David Thodey
Robbie Cooke
Hamish Corlett1
David Fite2
Catherine Harris
Aliza Knox
Fiona Pak-Poy
Paul Rickard
RELEVANT INTEREST IN
ORDINARY SHARES
OPTIONS OVER
ORDINARY SHARES
RIGHTS OVER
ORDINARY SHARES
990,996
891,936
25,057,776
18,593,861
791,096
-
106,420
2,098,571
82,286
5,504,530
68,000
158,144
-
-
83,000
229,400
-
1,030,476
-
-
-
-
-
-
1 Hamish Corlett’s holding reflects shares held beneficially through associated entities and directly held shares.
2 Includes shares held by Euclid Capital Partners LLC, an entity controlled by David Fite.
5. 2021 CORPORATE
6. PILLAR 3 INFORMATION
GOVERNANCE STATEMENT
The Group’s governance arrangements and practices
as compared to the ASX Corporate Governance
Council’s Corporate Governance Principles and
Recommendations (4th Edition) are set out in our
Corporate Governance Statement. The Group must
also comply with its constitution, the Corporations Act
2001 (Cth), the ASX Listing Rules, the Banking Act 1959
(Cth), including the Banking Executive Accountability
Regime (contained in Part IIAA of the Banking Act 1959)
amongst other laws, and, as an Authorised Deposit-
taking Institution, with governance requirements
prescribed by the Australian Prudential Regulation
Authority (APRA) under Prudential Standard CPS 510
Governance and other applicable published APRA
Prudential Standards.
Information about the Group’s corporate
governance policies and practices can be found
in the 2021 Corporate Governance Statement
available at: https://investors.tyro.com/investor-
centre/?page=corporate-governance.
The Group provides information required by APRA
prudential standard APS 330 Public Disclosure in the
Regulatory Disclosures section at: www.tyro.com/
about-tyro/investors.
7. PRINCIPAL ACTIVITIES
The Group is a technology-focused and values-
driven company providing Australian businesses with
payment solutions and complementary business
banking products.
As an Australian bank, the Group operates under the
supervision of APRA. The Group provides credit, debit
and EFTPOS card acquiring, Medicare and private
health fund claiming and rebating services to Australian
businesses. The Group takes money on deposit and
offers unsecured cash-flow based lending to Australian
EFTPOS merchants. The Group has implemented
appropriate systems and controls to comply with the
stringent prudential and regulatory requirements within
the Australian banking system.
54
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT Our Mission
We eliminate friction with
payments + banking solutions, that:
Our Vision
To be Australia’s:
Businesses
trust
Partners
advocate
Employees are
proud of
Our community
backs
fastest
growing
most loved
+ trusted
sustainable
payments + business
banking partner
8. OPERATING AND FINANCIAL REVIEW
•
a card is not presented for payment.
In-app payments: Payments made using apps such
as me&u whereby payment is facilitated through
the app using Tyro’s payments infrastructure and
not through traditional point-of-sale terminals.
Value-adding Services:
•
•
•
•
Loans in the form of a merchant cash advance: An
unsecured merchant cash advance loan designed
to help merchants finance working capital and
investment needs.
Tyro fee-free transaction account: A fee-free,
interest-bearing transaction account available to
our merchants.
Tyro term-deposit account: A competitive interest-
bearing fixed term deposit account available for our
merchants.
Tyro Connect: Tyro Connect is an integration hub
for apps and POS systems – a ‘plug and play’
platform software solution designed to address
merchant pain points around ‘counter clutter’ and
manual processes. It also aims to make it easier
for POS system partners and app providers to
meet customer needs. Tyro Connect processed
695,000 transactions through the platform in FY21
generating $26.3 million in transaction value with
124 merchants on platform and 12 apps already
signed-up.
DEVELOPING AND
EXECUTING AGAINST OUR
STRATEGY
Payments are at our core, using our proprietary
technology platform to enable credit and debit card
acquiring. We enhance our acquiring offering with
features purpose-designed for those merchants that
choose to partner with us, including our point-of-sale
system integrations, least-cost routing (Tap & Save)
and alternative payment types such as integrated
Alipay and Zip Pay QR based payments and tele-health
payments. Traditionally, we have been focused on
in-store payments, but have recently expanded into
eCommerce.
As part of our offering, we also provide value-adding
solutions, such as our loans in the form of merchant cash
advances and our fee-free, interest-bearing merchant
transaction accounts and term-deposit accounts.
Our Products and Services
We provide integrated payment solutions and value-
adding services to support merchants with growing
their businesses and providing their customers with a
seamless payment experience.
Core Products:
•
•
Card-Present Payments: Payments made at our
merchants whereby consumers present their card
of choice to facilitate the payment for goods and
services purchased.
Card-Not-Present Payments: eCommerce,
tele-health and mail-order and telephone-order
payments made to merchants by consumers where
55
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT BUSINESS STRATEGIES AND FUTURE PROSPECTS
We have a clear strategy which underpins our growth ambitions. This includes a number of key initiatives as set out below:
Grow
1
Expand
3
Connect
5
2
Add
N O W
O N L I N E
2.
4
Value-add
1.
Grow merchant share in existing core
verticals: we drive continued market
segment growth through a variety
of approaches including: increased
marketing to drive brand awareness;
more point-of-sale system integrations;
additional payments methods; and the
development of more industry-specific
solutions.
Add new core verticals: we intend
to add new core verticals, such as
Services and Accommodation to our
portfolio. We believe merchants in these
verticals will benefit from a merchant
acquirer with the technical capability to
produce specialised solutions and the
preparedness to build domain expertise.
4.
Cross-sell and drive expansion in
lending and other value-adding
services: we will continue to promote
our value-adding offerings to existing
merchants (including our loans in the
form of merchant cash advances, Tyro
fee-free transaction account, Tyro term-
deposit account and Tyro Connect) to
enhance our unit economics through
greater share of merchant wallet and
retention.
6.
6
M&A
3.
Drive our expansion into eCommerce
and other payment types: there is a
significant opportunity to drive growth in
eCommerce within our current merchant
base through our unified payments
solution. Additionally, we intend to
continue to innovate and provide
multiple new and emerging payment
types as we have with new payment
methods like Alipay, Zip Pay and tele-
health.
5.
Tyro Connect: our ‘plug and play’
platform software solution is designed
to be an integration hub for apps and
point-of-sale systems, seeking to
address merchant pain points around
‘counter clutter’ and manual processes.
This platform seeks to reinforce our value
proposition to merchants and embed us
more deeply into the evolving commerce
ecosystem.
Strategic investments and M&A: we have made strategic investments in me&u and Paypa Plane. me&u is a leading Australian
mobile order and pay in venue solution for the hospitality industry which seeks to improve restaurant-goers’ experience, free up
wait staff for higher value tasks and increase order value and frequency. As part of our investment, we have the right to provide
the in-app payment solution for me&u, and me&u is one of the foundation apps on the Tyro Connect platform. Paypa Plane
is the evolution of recurring payments in Australia. Paypa Plane offers an innovative platform to deliver a recurring payment
solution to consumers.
The alliance we formed with Bendigo Bank to provide our payments expertise to Bendigo's business customers, with Bendigo
Bank continuing to provide all other banking services to these customers under a long term, collaborative, and strategic alliance
is another example of our approach to growth.
Our acquisition of Medipass, a Melbourne based health fintech was pursued to provide an immediate uplift in cardless digital
health claiming and payments capabilities.
Our appetite to continue to accelerate growth and development through acquisitions and/or strategic partnerships remains a
core strategy for us so long as such opportunities align from a valuation, strategy and culture perspective.
56
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT Refer to the CEO | Managing Director’s Report on pages 13 to 37 of the Annual Report, which forms part of this
Directors’ Report for further information on how Tyro is delivering on our strategy.
Tyro’s key priorities and strategies for FY22 are also discussed in the CEO | Managing Director’s Report. In the
Directors’ opinion, any further disclosure of information on Tyro’s business strategies and future prospects would be
likely to result in unreasonable prejudice to the Group.
REVIEW OF OPERATIONS AND FINANCIAL POSITION
Refer to the CEO | Managing Director’s Report on pages 13 to 37 of the Annual Report, which forms part of this
Directors’ Report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors, there were no significant changes in the state of affairs of the Group during the
financial period, except as otherwise noted in this Report.
SIGNIFICANT EVENTS AFTER THE END OF THE FINANCIAL YEAR
Refer to Note 26 of the Financial Report, which forms part of this Directors’ Report.
MATERIAL RISKS TO BUSINESS STRATEGIES AND PROSPECTS FOR FUTURE
FINANCIAL YEARS
The potential material business risks that could adversely affect the Group’s achievement of its business strategies
and financial prospects in future years are described below. This section does not purport to list every risk that may
be associated with the Group’s business now or in the future. There is no guarantee or assurance that the importance
of these risks will not change, or other risks emerge. While the Group aims to manage risks in order to avoid adverse
impacts on its financial and reputational standing, some risks are outside the control of the Group.
The management and oversight of risk is ultimately overseen by our Board and Risk Committee. We have an
integrated Risk Management Framework in place to identify, assess, manage and report risks on a consistent basis.
This framework has been developed to accord with the tolerance levels set out in our Risk Appetite Statement.
57
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT GROUP’S RISK MANAGEMENT FRAMEWORK
OUR
PURPOSE
HOW MUCH
RISK WE
TAKE
HOW WE
DEFINE
RISK
WHAT RISK
WE TAKE
Our Strategy
Risk Appetite Statement
Risk Management Strategy
1. Strategic Risk Management
FINANCIAL RISK MANAGEMENT
NON-FINANCIAL RISK MANAGEMENT
2. Credit Risk
Framework
3. Liquidity Risk
Management
Framework
4. Market and
Investment Risk
Management
Framework
5. Operational
Risk
Management
Framework
6. Compliance
Risk
Management
Framework
7. Customer and
Conduct Risk
Management
I
R
S
K
C
U
L
T
U
R
E
HOW WE
ASSURE
OURSELVES
Clear business procedures aligned to policies, risk and compliance self-assessment, control assurance program,
staff training, testing adherence to policy, analysing incidents, reporting, risks/issues/breach identification and
management, credit decisioning, hindsight review, profiling, stress testing, audits
HOW WE
GOVERN
RISK
BOARD, BOARD RISK COMMITTEE, BOARD AUDIT COMMITTEE
EXECUTIVE RISK COMMITTEE
BUSINESS UNIT RISK MANAGEMENT
To help ensure we operate within the defined risk appetite set by the Board, our approach to managing our risk is
underpinned by a ‘three lines’ of defence model:
• First Line of Defence: risk owners – business managers have primary responsibility for the identification and
management of risk in the performance of their day-to-day responsibilities;
• Second Line of Defence: risk appetite, oversight and insight – dedicated risk management and compliance
functions are accountable for risk oversight, insight and support, including the development and regular review of
the Risk Management Framework and appetite, advising the business on risk management tools and strategies,
and monitoring and reporting on the risk profile; and
• Third Line of Defence: independent assurance – internal audit is accountable for independently assuring that the
Risk Management Framework is operating effectively. External audit provides assurance that risk management is
appropriate in the context of their statutory and regulatory obligations.
This structured approach to risk management is key to the development of our effective risk culture.
58
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT
MATERIAL RISKS
Deterioration in macroeconomic conditions
The Australian payments and business banking industries
in which we operate depend heavily upon the overall level
of consumer and business spending in Australia. A decline
in general economic conditions or changes in certain
macroeconomic factors (including rising unemployment,
lack of income growth, reduced consumer confidence,
inflation, volatility in local or global financial markets,
economic tensions, health pandemics and government
intervention, including with respect to changes in interest
rates) may adversely affect our financial performance by
reducing transaction volumes and the average purchase
amount of transactions that our merchants process.
Two of our existing core verticals (Hospitality and Retail)
are particularly exposed to discretionary spending in
Australia. In addition, our growth plans into new verticals
(Accommodation and Services) have been impacted
by adverse changes in consumer confidence and
spending due to Covid-19. Accordingly, any reduction in
discretionary spending in these verticals could result in a
decrease of our revenue and profitability.
A sustained weakening of the Australian economy could
affect the financial performance of our merchants,
cause a reduction in transaction volumes, and in some
instances, lead to some merchants closing their business.
This could materially affect demand for our products
and services through reduced merchant numbers,
declines in transaction volumes and reduced earnings
on transactions. Further, higher interest rates or inflation,
or deterioration in Australian economic conditions,
may increase the likelihood that merchants and their
cardholders have insufficient income to pay their debts,
and could lead to increased lending losses in our banking
business or an increased level of chargebacks and
non-lending losses. Additionally, credit card issuers may
reduce credit limits and become more selective in their
card issuance practices, which could further constrain
our merchants’ transaction volumes and values. Any of
these developments could have an adverse impact on our
business, financial performance and operations.
We operate primarily in the payments and business
banking industries in Australia, which are highly
competitive and subject to significant change driven
by factors including advancements in technology,
changing consumer behaviours, new products and
services, evolving industry standards, regulation, and the
changing needs of our merchants. Some of our existing
and potential competitors possess significant market
share and resources and could increase their competitive
position through increased marketing activity, product
innovation, or price discounting.
Furthermore, large international competitors and/or global
technology leaders, could enter the Australian payments
and business banking industries or expand their existing
presence. These competitors may have greater financial
resources to apply to: R&D; sales and marketing; or
access to a large existing Australian merchant base, which
may enable them to expand or enter into the payments
and business banking industries. In addition, new or
existing competitors that are not subject to Australian
banking regulations (e.g. non-bank lenders) may be able
to develop and operate business models with lower
compliance costs.
Compliance risk
Compliance risk entails the risk of a failure to act in
accordance with laws, regulations, industry standards and
codes, internal policies and procedures and principles of
good governance as applicable to the Group’s business.
This risk includes overseeing the establishment and
maintenance of risk-based controls to mitigate the
risks associated with money laundering and terrorism
financing.
We have a dedicated compliance team who operate
within set compliance policies and supporting
documentation which are subject to regular review to
ensure they remain current. We have a compliance
monitoring program in place to monitor adherence to
policies. Our risk and controls self-assessment process is
also used to identify, evaluate and manage compliance
risks and for developing associated controls.
Regulatory risk
We are subject to a range of laws and regulations
across our business and operate in an industry and
alongside competitors that have been subject to
increasing regulatory oversight and reform in recent
years. Operating in an evolving regulatory environment
means that regulatory developments may occur in the
future that impact our business or the products that we
currently offer, or may require us to make changes to
products, processes or systems that have an adverse
impact on our business or financial performance.
Merchant business performance may be affected by
factors beyond general economic conditions, including
changes to laws and regulations in the industries in which
they operate (for example, laws relating to permitted
trading hours). If such risks eventuate, they may
adversely impact our business, financial performance
and operations.
We manage regulatory risk through monitoring changes
to legislation, regulations and/or industry codes,
understanding and assessing the potential impacts to
our products, services, and operations and developing
strategies that support the implementation of any
necessary changes for our business and our merchants.
59
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT Credit risk
We face lending credit risk in granting unsecured loans in
the form of merchant cash advances to our merchants. If
our merchants do not repay the principal and fees owing
under their loan contract, we may experience a decrease
in revenue, increase in expenses (including an increase in
impairment expenses and an increase in funding costs),
and/or decrease in operating cash flows received. As
our loan book grows over time, this may have a material
adverse impact on our business, financial condition and
operating and financial performance.
Liability Committee oversees management of this risk
within the Board set risk appetite limits.
Operational risk
Operational risk relates to the risk of loss resulting
from inadequate or failed internal processes, people
and systems, or from external events which affect our
business. Our business is exposed to operational risks
such as external and internal fraud, processing errors,
system or hardware failure and failure of information
security systems.
We are also exposed to credit risk from our merchant
acquiring activities such as being liable for chargebacks,
which may lead to losses. If schemes fail to honour the
settlement funds for acquired transactions, we may be
unable to honour our merchants’ settlement positions.
This may lead to merchant dissatisfaction, loss of
merchants, reputational damage, and adverse impacts
on our business, financial performance and operations.
Loss from operational risk events could divert investment
from new products into remediation of existing systems
and processes, damage merchant relations or our
reputation, adversely affect our financial results or
position, as well as divert staff away from their core roles
to remediation activity. In addition, losses could include
legal or remediation costs and loss of property and/or
information.
We manage credit risk through our Risk team and credit
risk policies within the limits set by the Board and
Risk Committee. We also obtain guarantees from the
directors or principals of merchants.
Liquidity, funding and capital adequacy risk
Liquidity and funding risk and capital adequacy risk is
the risk of loss arising from the Group failing to maintain
the level of capital required by prudential regulators
and other key stakeholders such as shareholders and
merchants to support Tyro’s operations, future strategies
and risk appetite.
As a licensed Authorised Deposit-taking Institution,
APRA requires us to hold a certain level of equity.
Our business is currently loss-making and there is no
certainty our organic capital generation will meet the
future requirements of our business. We may not be able
raise additional capital when required or at cost effective
rates or on competitive terms. An inability to raise debt or
equity in the future may impact our ability to operate or
grow our business. This may result in regulatory scrutiny
from APRA or adverse impacts on our business position,
financial performance and results of operations.
We forecast future capital requirements and available
capital resources to manage the business to our required
levels of regulatory capital, target adequacy levels and
internal capital triggers, over a forecast period. This is an
annual exercise with the executive leadership team and
the Board, performed in conjunction with the business
planning and budgeting process.
We have a dedicated Operational Risk team who
provide oversight over the operational Risk Management
Framework which includes the following sub-categories:
internal fraud, external fraud, employment practices and
workplace safety, customers, products and business
practice, damage to physical assets, business disruption
and systems failures, and execution, delivery and
process management.
Reputation risk
The risk of loss that directly or indirectly impacts our
earnings, liquidity and capital adequacy, that is caused
by adverse perceptions of the Group held by any of our
merchants, the community, shareholders, investors, or
regulators. There is also a risk to our reputation through
the conduct of our employees or contractors (or both) or
the social and/or environmental impacts of our business
practices. Our brand reputation and awareness are
critical to maintaining and growing our merchant base
and Point of Sale system partner network.
We manage reputation risk by maintaining a values-
driven culture that ensures we act with integrity and
enables us to build trusted relationships with merchants
and wider community.
Strategic risk
Strategic risk is the risk that Tyro’s business strategy and
strategic objectives may lead to an increase in other
key risks such as credit risk, capital adequacy risk or
operational risk.
Market and investment risk
Technology risk
Market and investment risk is the risk of loss arising from
adverse changes in interest rates, foreign exchange
rates, equity prices, commodity prices and other relevant
parameters, such as market volatility. Tyro’s Asset and
Technology risk concerns our ability to deliver fast and
easy payments solutions and access to finance for our
merchants (and to successfully assess credit risk) and
depends on the efficient and uninterrupted operation of
60
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT our technology platform, technology used by others and the internet generally. There is a risk that these technologies
and systems may experience downtime or interruption from a range of issues such as system failures, service
outages or cyber-attacks which could cause significant damage to our reputation (particularly if the failure relates
to our platform), our ability to facilitate payments transactions, our ability to make informed credit decisions and
assess the credit performance of our loan book, our ability to service merchants in a timely manner, and our ability to
retain existing merchants and generate new merchants, any of which could have an adverse impact on our business,
financial performance and operations.
Sustainability and climate change risk
Environmental, Social and Governance (ESG) risks are becoming increasingly relevant to all businesses in Australia.
The ongoing effects of climate change risks may impact the long term prosperity of Australia’s economy, environment
and society, which may lead to adverse impacts upon our business.
Tyro acknowledges the importance of considering the impact of ESG factors on the sustainability of our businesses.
We further acknowledge that there is a requirement by institutional shareholders and investors to report on our
sustainability framework, initiatives and performance.
Although our operations are not subject to any particular and significant environmental regulation under any law of
the Commonwealth of Australia or any of its states or territories, we still acknowledge that it is important that by
fulfilling our mission to set businesses free to get on with business by simplifying payments and banking, we do so in
such a manner by which we create a sustainable future for all our stakeholders.
We manage sustainability and climate change risk through our Sustainability Framework. Refer to our Sustainability
Report at https://investors.tyro.com/investor-centre/
9. DIVIDENDS
No dividends were paid to shareholders or otherwise recommended or declared for payment during the year.
10. SHARE-BASED PAYMENTS
Details of share-based payments are disclosed in our Remuneration Report on pages 64 to 97 and in Note
14 of the Financial Report.
61
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT 11. SUSTAINABILITY
The Group acknowledges the importance of considering
the impact of environmental, social and governance
factors on the sustainability of our businesses. We
further acknowledge that there is a requirement by
institutional shareholders and investors to report on our
sustainability framework, initiatives and performance.
Although our operations are not subject to any particular
and significant environmental regulation under any law
of the Commonwealth of Australia or any of its states
or territories, we still acknowledge that by working with
58,186 merchants across Australia, we are driven by our
mission to set businesses free to get on with business
by simplifying their payments and banking. We do this
by delivering our solutions in a manner that aims to
create a sustainable future for all our stakeholders. This
includes our shareholders, our people, our merchants,
the community in which we operate, our suppliers and
business partners and regulatory bodies.
Sustainability is not only about our relationship with our
merchants - it is also about our responsibility to the
environment, social issues, equity, engagement with the
community, good governance and ethical standards.
During FY21, Tyro has undertaken a detailed assessment
of our material sustainability risks and the impact of
these risks on our business in the short to mid-term.
This assessment included quantifying our current
carbon footprint and setting a goal of achieving ‘Net-
Zero’ carbon emissions in the next 5 years, re-affirming
our diversity and inclusion targets and extending our
commitment to the communities where we work.
For FY21, we have also enhanced our sustainability
reporting disclosures by reporting with reference to
internationally recognised sustainability standards and
have provided our first standalone sustainability report.
This report outlines our objectives across a range of
measures and includes details on a number of initiatives
underway across the business.
Tyro has always been committed to a sustainable
business model and our 2021 sustainability report
provides an update on our progress. We still have much
to do, however we are committed to creating value and
building a sustainable future for our merchants, team
members, shareholders, and the broader community in
which we operate.
Tyro's standalone sustainability report can be found at
https://investors.tyro.com/investor-centre/
12. ADDITIONAL INFORMATION
INDEMNITIES AND INSURANCE
Clause 54 of the Company’s Constitution provides that
every person who is or has been a Director or Secretary
of the Group must be indemnified by the Company, to
the extent permitted by law, against:
•
•
liabilities incurred by the person as an officer of the
Company or a subsidiary; and
for legal costs incurred by the person in defending
any proceedings which relate to a liability incurred by
that person as an officer of the Company.
The Company has executed Deeds of Indemnity,
Insurance and Access, consistent with this Clause, in
favour of all current Directors of the Company, the
Company Secretary who is named in this Directors’
Report and the Company’s current Chief Financial
Officer. The Company has also entered into equivalent
Deeds of Indemnity with former Directors and
Secretaries of the Company, in accordance with
the Company’s previous Constitution. Each Deed
indemnifies those persons for the full amount of all such
liabilities including costs and expenses, subject to their
terms.
For the year ended 30 June 2021, no amounts have been
paid pursuant to indemnities (2020: Nil). The Company’s
Constitution also allows the Company to pay insurance
premiums for contracts insuring the current and former
Directors and Secretaries of the Company in relation to
any such liabilities and legal costs.
During or since the end of the financial year, the
Company has paid the premium in respect of contracts
insuring each of the Directors and the Secretary
named in this Directors’ Report, the former Directors,
and the officers of the Company as permitted by the
Corporations Act 2001. The class of officers insured
by the policy includes all officers of the Company.
The terms of the contracts of insurance prohibit the
disclosure of the nature of the liabilities insured against
and the amount of the premium. As at the date of this
report, no amounts have been claimed or paid in respect
of these insurance contracts other than the premium
referred to above.
To the extent permitted by law, the Company has agreed
to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against
claims by third parties and resulting liabilities, losses,
damages, costs and expenses arising from the audit (for
an unspecified amount). This indemnity does not extend
to matters finally determined to have arisen from Ernst &
Young’s negligent, wrongful or willful acts or omissions.
62
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT The non-audit services paid to the auditors (Ernst &
Young) was for services relating to the Tyro Bendigo
Alliance amounting to $38,000, tax compliance
services amounting to $14,000 and other tax matters
amounting to $7,000. Details of the audit and non-
audit fees paid or payable for services provided by the
auditors are detailed in Note 24 of the Financial Report.
15. AUDITOR’S INDEPENDENCE
A copy of the auditor’s independence declaration
as required under Section 307C of the Corporations
Act 2001 is set out on page 98 and forms part of
the Directors’ Report for the financial year ended
30 June 2021.
16. ROUNDING OF AMOUNTS
The Group is of a kind referred to in Legislative
Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to the ‘rounding
off’ of amounts in the Directors’ Report. Amounts in the
Directors’ Report have been rounded off in accordance
with that Legislative Instrument to the nearest thousand
dollars, or in certain cases, to the nearest dollar.
This Directors’ Report is made in accordance with a
resolution of the Directors.
17. REMUNERATION REPORT
The Group's Remuneration Report which forms part of
the Directors' Report can be found on page 64 to 97 of
this Annual Report.
13. PROCEEDINGS ON BEHALF
OF THE GROUP
No person has applied to the Court under Section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene in
any proceedings to which the Group is a party, for the
purpose of taking responsibility on behalf of the Group
for all or part of those proceedings.
No proceedings have been brought or intervened in on
behalf of the Group with leave of the Court under Section
237 of the Corporations Act 2001.
14. NON-AUDIT SERVICES
The Group may decide to employ its auditor on
assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the
Group is important.
The Board has considered the position and, in
accordance with the advice received from the Audit
Committee, is satisfied that the provision of the
non-audit services is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are satisfied that the provision of non-
audit services by the auditor, as set out below, did not
compromise the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the
Audit Committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
• none of the services undermine the general
principles relating to auditor independence as set
out in APES 110 Code of Ethics for Professional
Accountants, including reviewing or auditing the
auditor’s own work, acting in a management or a
decision making capacity for the Group, acting as
advocate for the Group or jointly sharing economic
risk and rewards.
_____________________________
David Thodey AO
Chair
Sydney
26 August 2021
_____________________________
Robbie Cooke
CEO | Managing Director
63
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021DIRECTORS' REPORT
Audited
Remuneration
Report
LETTER FROM CHAIR OF THE PEOPLE COMMITTEE
Dear Shareholder,
On behalf of the Board, I am pleased to present the Remuneration Report for the year ended 30 June 2021
(FY21).
As for most companies around the world, and
as David and Robbie indicated earlier, FY21 was
a challenging year for Tyro with the continued
impacts of COVID-19 on our business, our
merchants and our team. In addition the significant
terminal connectivity incident that occurred in
January this year impacted us all. Although these
events had a significant impact on the business,
what we as a Board and People Committee were
really proud of was the way our team dealt with the
events in the most challenging of circumstances.
We have exited the year stronger organisationally
having successfully navigated the challenges that
came our way. Tyro prides itself on having a strong
sense of values, culture and passion including
‘Wowing the Customer’, ‘Being Good’, ‘Staying
Hungry’ and ‘Committing to Greatness’. All of us at
Tyro have worked hard to demonstrate that we live
by these values through the challenges of FY21 and
have always placed our merchants first.
I am pleased to have accepted the position of
Chair of the People Committee from 21 June 2021
after Cathy Harris decided to step down from
the Board after five and a half years of service.
I would like to take this opportunity to thank
Cathy for the phenomenal work she has done to
put in place a best of breed People Committee
and Remuneration structure that positions
Tyro and our team well for the future growth.
During this COVID-19 impacted economic and
social environment, the People Committee has
undertaken an extensive review and deliberation
of executive remuneration with the aim to strike a
fair and reasonable balance between recognition
and reward for management, appropriate levels
to attract new employees and ultimately for the
delivery of performance for shareholders.
The other area of extensive review and deliberation
for the People Committee in FY21 was the hyper
competitive talent environment which most
companies in Australia now face, particularly
in the technology fields. As you will see in this
Remuneration Report, we have taken active steps
to retain our talented team as well as making Tyro
an employer of choice to attract new talent.
COVID-19
Many of our merchants continue to be challenged
by the devastating impacts of the COVID-19
pandemic and the associated on-again off-again
lock-downs. When faced with such a challenging
business environment, it is encouraging to see that
so many of our merchants have reinvented their
way of operating to remain trading and we have
proactively worked with our merchants, both large
and small, to assist in this process. We have also
continued to provide assistance as needed in the
form of loan repayment deferrals, terminal rental
relief or such other assistance as may be needed
from time to time.
"We have exited the year
stronger organisationally having
successfully navigated the
challenges that came our way"
64
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT We received $4.5 million in JobKeeper payments
for the period 1 July 2020 to 30 September 2020
after which we ceased receiving any contribution
from this Federal Government assistance scheme.
The JobKeeper assistance payments received in
the first quarter of FY21 were important in such
uncertain times, enabling Tyro to retain our full
complement of employees on board throughout
FY21 and enabling us to assist our merchants
through the challenges they faced.
We are proud of the immense efforts of our team
over the period of the incident to get merchants
back online as rapidly as possible and we have
been working tirelessly since then to do the right
thing by the merchants that were affected with
our ongoing remediation efforts. On behalf of the
People Committee I would like to thank each and
every Tyro for your immense contribution during
this period.
TERMINAL CONNECTIVITY ISSUE
FINANCIAL PERFORMANCE
In January 2021, Tyro experienced a significant
terminal connectivity issue that impacted some of
our merchants to varying degrees. In Tyro’s 18-year
history, an event of this nature has never occurred.
As Robbie mentioned, although the incident arose
from circumstances outside our control, the event
did not sit well with his team nor with the Board. It
was a moment when the strength, resilience and
expertise of our team came to the fore.
For shareholders, the performance of Tyro in FY21
has been a standout despite the operational
environment. The Company delivered transaction
value growth of 26%, gross profit growth of 28%
and achieved a record EBITDA of $14.2 million. This
performance saw Tyro’s share price at 30 June
2021 close at $3.68, representing shareholder value
growth of 5.1% from a year ago and 33.8% growth
since our listing on the ASX on 6 December 2019.
TYRO’S SHARE PRICE PERFORMANCE COMPARED TO THE S&P/ASX300
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
-40.0%
-60.0%
-80.0%
6/12/2019
6/01/20 20
6/0 2/20 20
6/0 3/20 20
6/0 4/20 20
6/0 5/20 20
6/0 6/20 20
6/07/20 20
6/0 8/20 20
6/0 9/20 20
6/10/20 20
6/11/20 20
6/12/20 20
6/01/20 21
6/0 2/20 21
6/0 3/20 21
6/0 4/20 21
6/0 5/20 21
6/0 6/20 21
TYR
ASX300
65
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT CHANGES TO REMUNERATION AT
TYRO
We recognise that an effective remuneration
framework is essential to attracting and retaining top
talent and the success of our business. In FY21, the
Board continued to consider how to strike the right
balance in our remuneration framework so as to:
engage and fairly reward employees for their
contribution to the business’ long term success;
retain the great team we have in place at Tyro;
FY21 Short Term Incentive Plan
This new plan was introduced in FY20 and amended
in FY21 to better align the strategy of Tyro to
performance both for financial measures and
customer performance measures. The plan was
also extended to a greater portion of the Tyro team
to assist in retaining key talent and attracting new
talent to the team.
The overall FY21 STI outcome came in at 89% of
target with the outcomes of each component of the
FY21 STI Plan as follows:
attract world-class talent to join our team; while
• Financial (60% of the plan) – The target set
•
•
•
•
ensuring optimal outcomes for shareholders.
To achieve these objectives, we have put in place
the following measures in FY21 to complement our
existing remuneration framework:
•
•
•
•
above inflation remuneration increases to meet
current hyper competitive market expectations
for certain skills sets.
an updated long term incentive plan better
aligned to the long term needs of Tyro.
an updated short term incentive plan together
with amending the make-up of the STI target
components to better reflect the strategic
direction of Tyro.
improved employee benefits such as primary
and secondary parental leave benefits.
We will continue to monitor the remuneration
framework to ensure we maintain the strong link
between performance and reward and to drive the
long term business outcomes as well as listening and
acknowledging the feedback from stakeholders.
FY21 REMUNERATION OUTCOMES
The Board has carefully considered and balanced
the FY21 Executive Key Management Personnel
(KMP) remuneration and executive leadership
team (XLT) outcomes, reflecting on the impact of
COVID-19 on our results, the impact of the terminal
connectivity issue and the need to fairly reward
both the Executive KMP and the broader team for
the dedication they have shown in ensuring Tyro
delivered a strong set of financial results in such a
challenging year.
Below is a summary of the STI and LTI outcomes for
the Executive KMP.
by the Board for achievement of the financial
component of the STI in FY21 was gross profit
growth of 23%. In determining the gross profit
growth the Board excluded the JobKeeper
benefits received by Tyro in FY21 but retained
the JobKeeper benefits received in FY20 as part
of the calculation. Based on this calculation Tyro
achieved gross profit growth of 23% resulting in
Executive KMP achieving this incentive on target.
• Customer Metrics (30% of the plan) –
For the customer satisfaction metric (10%),
the Board set a target score for Tyro to
achieve a Net Promoter Score (NPS) of
43. Due to the impact of the terminal
connectivity issue, we achieved a NPS
score of 21 resulting in this part of the STI
component not being achieved.
For the merchant number churn metric
(5%), Tyro achieved merchant churn of 11.3%
against a target of 10%. This resulted in Tyro
achieving 75% of target.
For the transaction value churn metric (5%),
Tyro achieved transaction value churn of 8.7%
against a target of 8.0%. This resulted in Tyro
achieving 75% of target.
Finally, for the merchant applications metric
(10%), Tyro achieved an average of 1,116
applications per month for the period March
2021 to June 2021 against a target of 1,000
applications resulting in 122% achievement
against target.
•
Individual Key Performance Indicators (10% of the
plan) - The Executive KMP achieved between 90%
to 95% of their individual key performance targets
for FY21.
66
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT FY21 Long Term Incentive Plan
The FY21 LTI Plan was made available to 43
employees made up of Executive KMP, the XLT
and key employees identified by the CEO and the
Board.
Performance Rights were granted in February
2021 to these employees with vesting based
on the achievement of EBITDA and gross profit
performance hurdles – This plan is not due to
be tested until FY23 and as such no vesting has
occurred.
FY19 and FY20 Legacy Long Term
Incentive Plan
The legacy FY19 and FY20 Performance Option
Plans continue into FY21. These plans are tested
for vesting on an annual basis. The results of
testing in FY21 are as follows:
• Financial (100% of the plan) – The performance
hurdle of achieving a positive net profit before
tax and share based payments was not achieved
at the first testing date and as such no vesting
has taken place. This award will be re-tested in
FY22.
Long Term Retention Plan
As mentioned earlier, we find ourselves in a hyper
competitive talent environment in Australia,
particularly in the technology fields. To address
this situation, we have implemented a number of
retention strategies as described in this Report,
including remuneration increases, an improved
STI Plan, and other improved employee benefits.
However, to reinforce our retention initiatives (below
Executive KMP and XLT level), a new one-off FY22
LTI retention plan has been put in place utilising
long term equity grants in the form of service rights
with vesting taking place in three annual tranches
commencing in FY23. It is anticipated that these
retention service rights will be granted to 53 Team
members at a cost of approximately $3.4 million
over the full term of the plan.
RESULTS OF ENGAGEMENT AND
LOOKING AHEAD
We are committed as a Board to continuously
reviewing the effectiveness of our remuneration
framework and always welcome your feedback
on our Remuneration Report. Following on from
the engagement we had with stakeholders in
FY21, changes were made to our Remuneration
Report and our remuneration framework to
address the feedback we received. These
changes included:
•
• disclosing how we link Tyro’s performance
to remuneration (refer to section 4 of this
Report);
improving the transparency around disclosing
STI awards specifically in circumstances
when the actual award exceeds the target
award (refer to section 3.3 and section 5.2 of
this Report); and
reviewing the performance hurdles used for
our long term incentive plan (refer to section
3.10 of this Report).
•
I look forward to presenting our Remuneration
Report to you at the Tyro Annual General
Meeting to be held on 3 November 2021.
Yours sincerely,
_____________________________
Fiona Pak-Poy
Chair - People Committee
67
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 1. INTRODUCTION
This Report forms part of the Directors’ Report and sets out the remuneration arrangements of the Company for the
year ended 30 June 2021 and is prepared in accordance with Section 300A of the Corporations Act. The information
has been audited as required by Section 308(3C) of the Corporations Act.
The report details the remuneration arrangements for Tyro’s Key Management Personnel (KMP). KMP are those
persons having authority and responsibility for planning, directing and controlling the activities of the Company,
directly or indirectly, including all Directors. References in this report to Executives refers only to those executives who
are KMP, as outlined in section 2 below for FY21.
2. WHO IS COVERED IN THIS REPORT
The Company’s KMP covered in this report are Tyro’s Non-executive Directors, Chief Executive Officer | Managing
Director (CEO), Chief Financial Officer (CFO) and Chief Risk Officer (CRO).
Details of KMP, including changes made during the reporting period are provided in the table below:
NON-EXECUTIVE DIRECTORS
David Thodey AO
Hamish Corlett
David Fite
Aliza Knox
Fiona Pak-Poy
Paul Rickard
Chair, Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director (commenced as KMP from 21 April 2021)
Non-executive Director
Non-executive Director
FORMER NON-EXECUTIVE DIRECTORS
Catherine Harris AO, PSM
Non-executive Director (ceased as KMP from 30 June 2021)
EXECUTIVE KMP
Robbie Cooke
CEO | Managing Director
Praveenesh (Prav) Pala
Chief Financial Officer
Steven Chapman
Chief Risk Officer (commenced as KMP from 11 June 2021)
FORMER EXECUTIVE KMP
Angela Green
Chief Risk Officer (ceased as KMP from 10 June 2021)
There have been no changes in KMP since the end of the reporting period.
3. APPROACH TO REMUNERATION
Tyro’s remuneration strategy is aligned with the Company’s purpose of setting businesses free to get on with business
by simplifying payments and banking. The achievement of our strategy is supported by our remuneration framework
and all remuneration decisions are guided by the execution of that business strategy.
Our approach to remuneration is summarised in the following table with a detailed analysis of each component of
Tyro’s Remuneration Framework provided in Sections 3.1 to 3.12.
68
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT TYRO’S PURPOSE - SETTING BUSINESSES FREE TO GET ON WITH BUSINESS BY SIMPLIFYING PAYMENTS AND BANKING
STRATEGIC PRIORITIES
N O W
O N L I N E
Grow merchant
share in existing
core verticals
Enter new
core verticals
Drive expansion into
eCommerce + other
payment types
Cross-sell and drive
growth in lending
and other value-
adding services
Tyro
Connect
M&A and
strategic
partnerships
REMUNERATION PRINCIPLES
Align reward with strategic
objectives.
Our remuneration framework aligns both the short term and long term rewards of
employees and Executives with Tyro’s strategic goals and core values.
Attract, motivate and retain a
highly skilled team.
Our most important competitive advantage is our people and our values driven
approach to ‘wowing’ the customer. To attract and retain our talented team,
we target remuneration at levels that ensure we can access the limited and
competitive talent pool to drive our business forward.
Our approach to remuneration also motivates team members to drive overall
customer satisfaction and perform well in all market conditions and economic
cycles.
Incentivise and reward high
performance that delivers
sustainable long term value
creation and reflects the interests
of our shareholders as the owners
of our business.
We aim to generate strong alignment between our team and Executive’s reward
and shareholder outcomes through the structure of our short term incentive plan
and long term incentive plan.
It is critical that our team and Executives have an ownership mindset that
enhances Tyro’s long term value, rather than focusing on short term gains.
Be transparent, easy to
understand.
Be transparent, easy to understand and deliver remuneration outcomes that meet
team member and external stakeholder expectations.
REMUNERATION FRAMEWORK
COMPONENT
ALIGNMENT TO PERFORMANCE
ALIGNMENT TO STRATEGY
Fixed Annual
Remuneration (base +
superannuation) (FAR)
• Set at a market competitive level in
relation to the scope, complexity,
capabilities and individual performance in
the role
• Provides recognition for day-to-day,
operational activities in the role.
• Set to attract, retain and engage the best
people to design and lead the delivery of
our strategy.
Short Term Incentive
Plan (STI)
• Performance assessed against:
• Linked to Tyro’s key strategic priorities.
• Financial measures (target 60%).
• Customer metrics (target 30%).
• Individual KPI achievement (target 10%).
• The 25% of the award that is deferred into
equity supports Executives’ alignment
with shareholder interests, as well as
Executive retention.
Long Term Incentive
Plan (LTI)
• Performance assessed against financial
measures (target 100%)
• EBITDA positive hurdle as the first
• Targeting sustained growth in gross profit
and shareholder wealth creation through a
pathway to profitability.
gateway to vesting.
• The three-year vesting period encourages
• Achievement of a 20% compound gross
profit growth rate (target) over the period
of the award.
consideration of long term decision
making and value creation, as well as
operating as a retention tool.
• With a significant portion of potential
remuneration based on equity, the Board
provides alignment between the interests
of Executives with shareholders.
69
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.1 BENCHMARKING ANALYSIS
In order to meet our commitment of ensuring remuneration is market-competitive together with attracting world-
class talent, we adopt a benchmarking approach to setting remuneration levels for our Non-executive Directors,
Executive KMP and executive leadership team.
As a technology company with a banking licence we do not have any direct ASX-listed peers of a similar size. As
such, we used two comparator groups. The first comparator group is based on the market capitalisation of ASX listed
companies with ASX rankings within a range of 20 above and below (40 companies in total) of a median of $1.5 billion
(excluding REITs and secondary ASX listings).
MARKET CAPITALISATION PEER GROUP
20 COMPANIES BELOW TYRO
Tyro
Payments
Limited
20 COMPANIES ABOVE TYRO
$1.19 billion – $1.47 billion
$1.51 billion – $1.92 billion
The second comparator group, used to validate the primary market capitalisation peer group, was based on financial
services companies in the ASX300, and companies in the ASX 300 Diversified Financials index, excluding those that
are above a market capitalisation of $5.0 billion and below that of $0.5 billion (excluding REITs, insurance companies,
income trusts and secondary ASX listings). This group consists of 31 companies against which our remuneration is
benchmarked.
FINANCIAL SERVICES PEER GROUP
20 COMPANIES BELOW TYRO
Tyro
Payments
Limited
11 COMPANIES ABOVE TYRO
$500 million – $1.291 billion
$1.507 billion – $4,187 billion
3.2 SETTING TARGET REMUNERATION
Our policy is to target a total remuneration opportunity for our Executive KMP and executive leadership team (XLT)
between the 50th and 75th percentiles of both comparator groups acknowledging that certain roles require specialist
banking and payment skills and as such may need to be adjusted to recognise these unique skills.
An individual KMPs and XLTs remuneration is determined by the Board after considering:
•
•
•
the benchmarking data provided by our independent remuneration advisors for each Executive KMP and XLTs role
compared to both the market capitalisation comparator group and financial services comparator group;
individual performance, Banking Executive Accountability Regime (BEAR) accountabilities, role complexity, and
regulatory requirements specific to the role; and
industry experience and the availability of comparable talent in the domestic market.
70
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.3 TOTAL REMUNERATION OPPORTUNITY FOR EXECUTIVE KMP
The charts below show the remuneration mix and total remuneration opportunity (TRO) for Executive KMP at target
opportunity for FY21 and at maximum opportunity for FY21, comprising FAR, STI cash, STI deferred and LTI granted.
t
e
g
r
a
T
m
u
m
i
x
a
M
CEO | Managing Director
CFO
CRO
30%
23%
47%
25%
25%
19%
50%
19%
63%
25%
20%
16%
39%
41%
30%
53%
37%
39%
Fixed Annual Remuneration
STI
LTI
EXECUTIVE
KMP
FAR
STI -
TARGET
LTI -
TARGET
TOTAL
FAR
STI -
MAXIMUM
LTI -
MAXIMUM
AT TARGET
TOTAL
AT MAXIMUM
Robbie Cooke
$990,000 $495,000 $638,500 $2,123,500 $990,000 $940,500 $638,500 $2,569,000
Prav Pala
$520,000 $260,000 $260,000 $1,040,000 $520,000 $494,000 $260,000 $1,274,000
Steven Chapman1 $360,000 $108,000 $108,000
$576,000 $360,000 $205,200 $108,000
$673,200
The actual remuneration mix will vary based on Tyro’s performance and individual performance each year.
1
Steven Chapman was appointed as Chief Risk Officer on 11 June 2021. The FAR and incentive targets listed above represent his TRO from 11
June 2021. The actual remuneration and incentive opportunity for Steven for FY21 will differ to the above TRO due a different TRO being in
place while Steven was Head of Internal Audit.
71
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.4 TIMELINE FOR PAYMENT OF REMUNERATION
The chart below shows the timeline of when the total maximum FY21 remuneration opportunity is payable to
Executive KMP.
75% of STI
payable in cash
100% Vesting
– resultant
shares subject
to 24 month
holding lock
25% of STI
payable in
equity vests in
full 4 years after
grant
Long Term
Incentive (LTI)
– Subject to
Performance
Conditions
Short Term
Incentive (STI) -
25% payable as
deferred equity
and 75% payable
as cash
100%
80%
60%
40%
Fixed
Remuneration
(including super)
20%
16% - 25% of TRO
in a LTI payable
as an equity
instrument
30% - 39%
of TRO in a STI of
25% payable in
equity and 75%
payable in cash
39% - 53% of TRO
in Fixed Annual
Remuneration
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
3.5 SHORT TERM INCENTIVE PLAN APPLICABLE TO FY21
The STI Plan for FY21 is designed to reward for the achievement of annual goals set in line with the Tyro’s strategy and
reflecting key growth drivers to deliver returns for shareholders. The Plan provides the STI framework for the CEO,
Executive KMP and XLT members and employees of the Company. The CEO has a target STI potential of 50% of
FAR. Excluding the CEO, a target STI potential of between 30% to 50% of Executive KMP fixed annual remuneration is
available as an STI. All other XLT and other qualifying employees are allocated a potential target incentive amount of
between 7.5% and 55% of FAR.
Grant of an STI is at the discretion of the Board and is assessed following the conclusion of the relevant financial year.
Whether an STI is granted will depend on satisfaction of various criteria, including individual performance against key
performance indicators, customer performance outcomes and financial performance outcomes, as determined by
the Board.
The STI award for Executive KMP and the XLT is delivered 75% in cash and 25% in equity (Service Rights) that vest in
4-years with no performance hurdle but subject to clawback provisions and irrespective of continuous service. For all
other employees the STI award is delivered 25% cash and 75% in equity (Service Rights) vesting in equal tranches over
a 3-year period with a 24-month holding lock post vesting of each tranche irrespective of continuous service.
An analysis of how the FY21 STI is calculated, specifically how the financial incentive pool is created and the measures
and weighting applied to financial performance outcomes and customer performance outcomes is set out below.
72
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Financial performance targets for FY21 - 60% of target STI
FINANCIAL PERFOR-
MANCE MEASURES
WEIGHTING AT
TARGET
WEIGHTING AT
MAXIMUM
TARGET
RATIONALE FOR METRIC
Gross profit
growth
60%
120%
23% growth
from FY20 gross
profit (excluding
JobKeeper
contribution
received in FY21)
• Key indicator of financial performance
• Ensures continued focus on growth
• Balances growth in transaction value
with generating new business at
profitable margins
CALCULATION OF FINANCIAL INCENTIVE POOL
Gross Profit
Measure
x
Cost Control
Measure
=
Financial
Performance Pool
N
O
I
L
L
I
M
5
.
3
9
$
0
2
Y
F
T
S
N
I
A
G
A
H
T
W
O
R
G
T
I
F
O
R
P
S
S
O
R
G
Gross profit more than $129.03 million
• Pool formed of 9.1%
of FY21 gross profit capped
Gross profit of between $115.94 million to
$128.10 million
• Pool formed of between 4.8% to 8.8% of
FY21 gross profit
On Target gross profit - $115.01 million
• Pool formed of 4.5%
of FY21 gross profit
Gross profit of between $101.92 million to
$114.07 million
• Pool formed of between 0.3% to 4.2%
of FY21 gross profit
Gross profit less than $100.98 million
• No financial incentive pool formed
Margin
Adjustment Factor
(either upwards or
downwards) - Operating
Expense control
Financial
Performance
Incentive Pool
created
Customer Performance Targets for FY21 - 40% of target STI
CUSTOMER
PERFORMANCE
MEASURES
Transaction
value churn
Merchant
number churn
Customer
satisfaction
Merchant
applications
WEIGHTING AT
TARGET
WEIGHTING AT
MAXIMUM
TARGET
RATIONALE FOR METRIC
5%
10%
8% or less churn
• Key indicator of merchant retention
focussing on retention of large
merchants
• Aligns to ‘Wowing the Customer’ value
5%
10%
10% or less churn
• Key indicator of merchant retention
focussing on retention of all merchants
• Aligns to ‘Wowing the Customer’ value
10%
20%
NPS of 47 or greater
• Key indicator of merchant satisfaction
10%
20%
Average of 1,000 new
merchant applications
per month for the period
1 March 2021 to 30 June
2021
• Aligns to ‘Wowing the Customer’ value
• Key indicator of winning new business
• Aligns to ‘Stay Hungry’ value
The actual awards based on the mix of the STI components can be above target up to the maximum indicated. Refer
to Section 5.2 of this report for an analysis of the FY21 STI outcomes against the above targets.
73
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT
Individual Key Performance Indicators for FY21 - 10% of target STI
Individual KPIs are set at the start of each financial year for each team member and focus on providing a measure of
individual performance together with placing emphasis on the achievement of individual goals, the development of
team members skills and expertise and challenging team members to achieve at their highest level.
These KPIs are reviewed annually and form the basis of the evaluation of an individuals achievement against the 10%
target. For FY21, the average achievement for all employees came out at 76%.
The key terms of the Service Rights relating to the FY21 STI are set out below.
TERM
DESCRIPTION
Administration
The plan is administered by the Board (or the Board’s delegate).
Eligibility
Full-time and part-time employees of the Company are eligible to receive awards under
the STI Plan. The Board will select eligible employees to whom awards are to be granted
from time to time.
Grant date
The date specified as the grant date in each participant’s offer document.
Expiry
Vesting dates
Service rights issued under the plan will lapse 10 years after the date on which the
relevant right vests.
For Executive KMP and XLT, vesting takes place 4-years (irrespective of continuous
service) after grant with no performance hurdle.
For all other employees vesting takes place in equal tranches over a 3-year period
(irrespective of continuous service) with a 24-month holding lock post vesting of each
tranche.
Vesting condition
The holder of the rights must be employed by us or provide services to us as a contractor
or consultant on the date of vesting.
Exercise
Rights
Following satisfaction of the vesting condition on each vesting date, the relevant number
of Service Rights may be exercised at nil consideration
Each service right granted entitles the holder to one share on exercise. Shares resulting
from an exercise of service rights rank equally with other shares, and shareholders are
entitled to the same dividend and voting rights specified in our constitution.
Holding lock period
For all other employees excluding Executive KMP and XLT a 24-month holding lock post
vesting of each tranche.
Clawback provisions
Service rights are subject to a claw back in the vesting period with no holding lock post
vesting.
Amendments
Other terms
The Board may amend the terms of the plan without consent of the participants if the
amendment does not reduce the rights of the participants.
The rules of the plan include other terms relating to the administration, transfer,
termination and variation of the plan.
74
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.6 LONG TERM PERFORMANCE INCENTIVE PLAN APPLICABLE TO FY21
The FY21 LTI Plan is open to the CEO, the Executive KMP, executive leadership team (XLT) and other nominated
employees of Tyro and has been fulfilled via an issuance of performance rights.
The number of performance rights to be issued for each participant will be determined by reference to:
•
•
the volume weighted average price (VWAP) of Tyro shares traded in the 10 trading days commencing on the day
following the day nominated by the Board; and
each participant’s prescribed LTI entitlement that falls within the participant’s Total Remuneration Opportunity
(TRO) as approved under the remuneration framework. For FY21, the maximum LTI potential is 64.5% of the CEOs
Fixed Annual Remuneration (FAR), between 30% and 50% for the Executive KMP and a maximum LTI potential of
between 15% to 40% for the XLT. Any other nominated employees have been allocated a maximum LTI potential
of between 7.5% to 20% of their FAR in FY21.
The FY21 performance rights will vest subject to passing a ‘Gateway’ and then satisfying a prescribed ‘Performance
Hurdle’, and will vest in one tranche 3 years following the effective date of the plan.
The ‘Gateway’ that must be passed prior to testing the performance hurdle is defined as Tyro reporting a positive
EBITDA1 (before share-based payments) result for the financial year immediately preceding the vesting date, namely
FY23. If the ‘Gateway’ is passed, the number of performance rights that qualify for exercise will depend on the
vesting percentage determined by reference Tyro’s compound gross profit growth rate during the vesting period
(Performance Hurdle).
Compound gross profit growth rate applicable to FY21 LTI plan - Performance Hurdle
GROSS PROFIT CAGR
(1 SEP 2020 – 31 AUG 2023
(FY20 TO FY23)
Less than 12.5%
12.5%
VESTING PERCENTAGE
(OF GRANTED PERFORMANCE RIGHTS)
Nil
30%
Above 12.5% to less than 20%
Straight line vesting between 30% and 100%
20% (‘target’)
100%
Above 20% and capping at 30%
Straight line vesting between 100% and 150%
1
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments
expense, expenses associated with the IPO and any one-off exceptional items.
Performance rights will be subject to forfeiture prior to vesting (malus) and any shares issued after the vesting date
will be subject to forfeiture for a 2 year period following expiry of the holding lock sufficient to satisfy BEAR clawback
requirements (clawback).
...the average KPI
achievement for all
employees came
out at 76% for FY21
75
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT The remaining key terms of the LTI Plan are set out in the table below.
TERM
DESCRIPTION
Administration
The plan is administered by the Board.
Eligibility
Conditions
Eligible participants are Directors, Executive KMP, XLT as well as other nominated
employees of the Company.
Performance rights granted in respect of the FY21 LTI Plan must satisfy passing
a ‘Gateway’ and then the Performance Hurdle to qualify for exercise. Refer to the
explanation of the Gateway and Performance Hurdle provided above.
Effective date
1 February 2021.
Grant date
1 February 2021.
Exercise price
Nil
Vesting
Forfeiture
Rights
Subject to passing the ‘Gateway’ and satisfying the Performance Hurdle, the
Performance Rights vest in one tranche 3 years following the Effective Date.
The FY21 LTI performance rights are subject to forfeiture prior to vesting and thereafter
any shares issued will be subject to clawback for up to a further 2 year period following
the expiry of the ‘Holding Lock’ (ie. awards can be forfeited up to 6 years from the grant
date.
Each FY21 LTI performance right entitles the rights holder to one share. Shares issued on
exercise of FY21 LTI performance rights rank equally with other shares, and shareholders
are entitled to the same dividend and voting rights specified in Tyro’s constitution.
Minimum holding period
and holding lock
Shares issued on exercise are subject to a holding lock for 12 months post the actual
exercise date.
3.7 LEGACY LONG TERM INCENTIVE PLANS IN OPERATION IN FY21
Historically, share-based compensation benefits have been granted under the employee share option plan, adopted
by the Company in October 2016. The employee share option plan was established to grant options over Shares to
Directors and all eligible employees of the Company.
The performance-based LTI Plans for FY19 and FY20 are designed to reward for the achievement of long term targets
that generate strong alignment between Executives and shareholders, and encourage decision making for long
term shareholder wealth creation. These legacy LTI plans were provided to the CEO, Executive KMP and executive
leadership team (XLT) and nominated employees of the Company.
Following listing on the ASX on 6 December 2019, no further options will be granted under this employee share option
plan with the grant of options in FY20 being the last grant under this plan.
Qualifying criteria for FY20 and FY19 LTI plan
COMPONENT
DESCRIPTION
Financial
performance
100% of the
LTI incentive is
allocated to financial
performance.
Market value options granted annually to reward Executives for the achievement of long term
strategic objectives that contribute to shareholder wealth creation, and encourages long
term decision making.
The options are subject to performance hurdles. To qualify for exercise both of the following
hurdles must be satisfied:
• A 20% compound Gross Revenue growth rate per annum (FY19 plan: 25% per annum).
• A positive net profit result (before tax and share-based expenses).
If a tranche does not satisfy both performance hurdles on the relevant testing date, the
tranche will be retested at the next testing date (if any).
If the performance hurdle(s) are not satisfied at the testing date for the fourth tranche, any
unvested options are forfeited on the expiry date or earlier cessation date of the employee,
under the plan rules.
76
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Outcome of testing for achievement of vesting
Both the FY19 and FY20 options were tested on 23 July 2021 and did not meet the performance hurdles set for
vesting based on both the Net Profit hurdle and the Gross Revenue Hurdle. These options will be retested in FY22.
The key terms of the FY20 and FY19 LTI employee share option plan are set out in the table below.
TERM
DESCRIPTION
Administration
The plan is administered by the Board.
Eligibility
Conditions
Eligible participants are Directors, Executives, XLT as well as other nominated employees of
the Company.
Options granted in respect of FY20 must satisfy two performance hurdles to qualify for
exercise:
• 20% compound Gross Revenue growth per annum (FY19 plan – 25%); and
• a positive Net Profit result (before tax and share-based expenses).
If a tranche does not satisfy both performance criteria on the relevant testing date, the
tranche will be retested at the next testing date (if any).
Effective date of
the Employee Share
Option Plan Rules
14 October 2016
Grant date
1 October 2019
Exercise price
$1.79 per option (FY19 plan - $1.50)
Vesting
Expiry
Forfeiture
Rights
FY20 options vest in equal tranches of 25%, commencing 24 months after the grant date.
30 September 2026.
FY20 options are subject to forfeiture prior to vesting and thereafter – any shares issued
will be subject to forfeiture for a nominated period sufficient to satisfy the BEAR deferral
requirements.
Each FY20 option entitles the option holder to one share. Shares issued on exercise of FY20
options rank equally with other shares, and shareholders are entitled to the same dividend
and voting rights specified in Tyro’s constitution.
Minimum holding
period and
holding lock
FY20 options must be held for a minimum period of three years from the date of the grant
or until the holder ceases employment with us in accordance with the rules of the employee
share option plan.
Shares issued on exercise are additionally subject to a holding lock for 24 months from the
date the FY20 option is exercised.
77
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.8 LIQUIDITY EVENT PERFORMANCE RIGHTS
A limited number of Executive KMP and executive leadership team (XLT) of Tyro were granted performance rights
under the Liquidity Event Performance Rights (LEPR) Plan between FY19 and FY20. A liquidity event was triggered
under the Plan with the IPO that took place on 6 December 2019. The first tranche of the Liquidity Event Performance
Rights vested and became exercisable on 6 December 2019. 4,100,000 LEPRs were allocated under the Plan of which
2,733,336 have vested and 1,633,334 have been exercised at the date of this report.
Key terms of the LEPR plan are set out in the table below.
TERM
DESCRIPTION
Administration
The plan is administered by the Board.
Eligibility
Board determined.
Effective date of
LEPR Plan Rules
9 May 2019 to 6 August 2019 (LEPR Plan Rules attached to individual grant letters)
Grant date
9 May 2019 to 6 August 2019
Price
Liquidity Event Performance Rights granted under the plan are issued for nil consideration.
Vesting dates
Vesting will occur in three equal tranches, as follows:
• one third on the date of the liquidity event;
• one third on the date that is 12 months after the Initial Vesting Date; and
• one third on the date that is 24 months after the Initial Vesting Date.
The Board may resolve that any unvested Liquidity Event Performance Rights cease to vest
for the duration of any unpaid leave of absence.
A liquidity event includes the IPO that took place on 6 December 2019. The first tranche of
the Liquidity Event Performance Rights vested and became exercisable on 6 December
2019.
Vesting condition
The holder of the rights must be employed by Tyro or provide services to Tyro as a contractor
or consultant on the date of vesting.
Expiry
Exercise
Liquidity Event Performance Rights issued under the plan will lapse 10 years after the date
on which the relevant Liquidity Event Performance Right vests.
Following satisfaction of the vesting condition on each vesting date, the relevant number of
Liquidity Event Performance Rights may be exercised at nil consideration.
Rights
Each Liquidity Event Performance Right granted entitles the holder to one share on exercise.
Shares resulting from an exercise of Liquidity Event Performance Rights rank equally with
other shares, and shareholders are entitled to the same dividend and voting rights specified
in Tyro’s constitution.
Minimum holding
period and holding
lock
A holder must not dispose of any share issued, allotted or transferred on exercise of a
Liquidity Event Performance Right from the date that is 12 months from the date of issue,
allotment or transfer.
78
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.9 REMUNERATION SACRIFICE RIGHTS PLAN
Employees and Directors may also participate in the Remuneration Sacrifice Rights Plan, following invitation by the
Board. Historically only Directors, Executive KMP and members of the executive leadership team (XLT) have been
invited to participate in the Remuneration Sacrifice Rights Plan. Under the plan, the Board invites participants to
apply for Remuneration Sacrifice Rights by sacrificing a percentage of their pre-tax short term incentive (or pre-tax
fees in the case of Directors) in exchange for rights that automatically convert into shares. The participation in the
Remuneration Sacrifice Rights Plan does not change the Total Remuneration Opportunity (TRO) of any individual
employee.
No payment is required to be made on conversion of these rights and issued rights are not subject to performance or
employment related hurdles or conditions. The shares issued on conversion of the Remuneration Sacrifice Rights will
be restricted for a period following the date of the grant of the rights.
Shares resulting from conversion of Remuneration Sacrifice Rights may be subject to trading restrictions (as
nominated by the relevant Director or employee) but otherwise rank equally with other shares, and Shareholders are
entitled to the same dividend and voting rights as ordinary shares, as specified in Tyro’s constitution.
An invitation to participate in the Remuneration Sacrifice Rights Plan may specify a trading restriction, which is a
period during which the shares issued on conversion of Remuneration Sacrifice Rights cannot be transferred, sold,
encumbered or otherwise dealt with. The minimum trading restriction period is one year from the date of grant of
the rights, with a maximum trading restriction period being 15 years for the date of the grant of the rights. Subject
to these minimum and maximum trading restrictions, the trading restriction applicable to individual Remuneration
Sacrifice Rights is nominated by the relevant Director or employee. The trading restriction period will be lifted on the
earlier of the date in the invitation letter, or the date the participant ceases to be an employee, or the Director ceases
to hold that role.
3.10 FY22 LTI PERFORMANCE PLAN
In relation to the FY22 LTI Performance Plan, It is proposed that this be fulfilled via an issuance of performance rights
(as was the case in FY21) on terms similar to the FY21 plan as set out in Section 3.6 of this Report.
The only change being proposed to the plan for FY22 is to amend the Performance Hurdle applicable to this issuance
from those applicable to the FY21 plan.
Performance hurdle applicable to FY22 LTI plan
In FY22, the number of performance rights that will qualify for exercise will depend on the vesting percentage
determined by reference to Tyro’s FY24 statutory EBITDA (which excludes share based payment expenses) as
specified below.
STATUTORY
EBITDA OUTCOME
VESTING
PERCENTAGE
COMPOUNDED ANNUAL
GROWTH FROM FY21
EBITDA
$49.0 million
$54.5 million
$59.9 million
$65.4 million
70%
80%
90%
100%
81.7%
94.6%
107.3%
120.2%
79
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 3.11 FY22 LTI RETENTION PLAN
In light of the current significant hyper-competitive employment market, Tyro has implemented a number of retention
strategies as described in this Report, including remuneration increases, an improved STI Plan, and other improved
employee benefits. However, to reinforce Tyro’s retention initiatives (below Executive KMP and XLT level), a new FY22
LTI retention plan has been put in place utilising long term equity grants in the form of service rights.
The key terms of the LTI Retention Plan are set out in the table below.
TERM
DESCRIPTION
Administration
The plan is administered by the Board.
Eligibility
Conditions
Effective date
Grant date
Exercise price
Vesting
Forfeiture
Rights
Full-time and part-time employees of the Company are eligible to receive awards
under this plan. The Board will select eligible employees to whom awards are to be
granted from time to time (excluding Executive KMP and XLT).
The holder of the rights must be employed by Tyro or provide services to Tyro as a
contractor or consultant on the date of vesting.
The date specified as the effective date in each participant’s offer document.
The date of the instrument of grant.
Nil
To vest in three annual tranches commencing on the anniversary of grant date.
Once vested there are no conditions which must be satisfied before the service
rights can be exercised.
If an employee ceases employment for any reason, any unvested service rights
lapse and any vested service right may be exercised up until the date that is 30
days after the date of cessation of employment.
Each FY22 LTI retention right entitles the rights holder to one share. Shares
issued on exercise of FY22 LTI retention rights rank equally with other shares, and
shareholders are entitled to the same dividend and voting rights specified in Tyro’s
constitution.
Minimum holding period and
holding lock
No holding lock applies following exercise of the relevant service right.
3.12 FY22 MEDIPASS LTI PLAN
Following the acquisition of Medipass on 31 May 2021, certain Medipass team members received a grant of a
combination of service rights and performance rights in FY22. These service rights and performance rights are being
issued to Medipass employees to align their interests and achieve retention outcomes to create long term shareholder
value and drive growth of the overall Tyro business.
The details of these service rights and performance rights are summarised below.
Key terms of the Medipass service rights plan:
Number of service rights
granted to Medipass employees
1,058,194
Value of service rights granted
$4.0 million
Grant date
Price
Vesting date
The date of the instrument of grant.
Service rights granted under the plan are issued for nil consideration.
31 May 2026
80
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Vesting condition
The holder of the rights must be employed by us or provide services to us as a
contractor or consultant on the date of vesting.
Expiry
Exercise
Rights
The date specified as the expiry date in each participant’s offer document.
Following satisfaction of the vesting condition on the vesting date, the relevant
number of service rights may be exercised at nil consideration.
Each service right granted entitles the holder to one share on exercise.
Shares resulting from the exercise of service rights rank equally with other shares,
and shareholders are entitled to the same dividend and voting rights specified in
Tyro’s constitution.
Minimum holding period and
holding lock
It is a requirement that a participant in the plan remains employed by Tyro at the
vesting date.
Key terms of the Medipass performance rights plan:
Number of performance rights
granted to Medipass employees
1,058,194
Value of performance rights
granted
$4.0 million
Grant date
Price
Vesting date
Vesting condition
Expiry
Exercise
Rights
The date of the instrument of grant.
Performance rights granted under the plan are issued for nil consideration.
30 June 2026
100% vesting on accomplishment of the 5-year forecast EBITDA for the combined
Medipass and Tyro Health Business Unit phased per the table detailed below.
The date specified as the expiry date in each participant’s offer document.
Following satisfaction of the vesting condition on the vesting date, the relevant
number of performance rights may be exercised at nil consideration.
Each performance right granted entitles the holder to one Share on exercise.
Shares resulting from the exercise of performance rights rank equally with other
shares, and shareholders are entitled to the same dividend and voting rights
specified in Tyro’s constitution.
Minimum holding period and
holding lock
It is a requirement that a participant in the plan remains employed by Tyro at the
vesting date.
Vesting performance hurdle for Medipass performance rights plan
Below is the phased vesting on the accomplishment of the 5-year forecast EBITDA for the combined Medipass and
Tyro Health Business Unit.
PERFORMANCE TO EBITDA TARGET
PERCENTAGE OF RIGHTS TO VEST
$38.4 and above (100%)
$34.6 million to $38.3 million
$30.7 million to $34.5 million
$29.6 million to $30.6 million
Below $29.6 million
100%
75%
50%
25%
0%
81
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 4. TYRO PERFORMANCE AND REMUNERATION OUTCOMES
One of the key principles of Tyro’s remuneration framework is to align Executive KMP, executive leadership team (XLT)
and employee remuneration outcomes with financial and customer performance. This section provides a summary of
Tyro’s performance outcomes for FY21 and the link to remuneration.
4.1 FINANCIAL PERFORMANCE OUTCOMES
Transaction value up
26% to $25.5 billion
FY16 - FY21 CAGR +24%
• Transaction value growth of 26% for
$25.5b
FY21 exceeds long term CAGR of 24%.
$20.1b
$17.5b
• Bendigo Bank alliance contributed
$439.9 million to transaction value from
1 June 2021.
Gross profit up 28% to
$119.4 million
$13.4b
$10.6b
$8.6b
FY16
FY17
FY18
FY19
FY20
FY21
FY16 - FY21 CAGR +21%
$119.4m
$93.5m
$83.3m
$69.1m
$56.0m
$46.2m
FY16
FY17
FY18
FY19
FY20
FY21
Positive EBITDA of
$14.2 million up 424%
from a loss of $4.4
million in FY20
FY16 - FY21 CAGR +51%
$14.2m
$1.7m
($4.4m)
($8.6m)
($9.2m)
($9.8m)
FY16
FY17
FY18
FY19
FY20
FY21
• Our Payments business lifted gross
profit by 29% to $110.5 million (FY20:
$86.1 million). The increase in gross profit
reflects the 26% increase in transaction
value and improvement in margins due
to a change in card mix.
• Our Banking business gross profit
increased 118% to $2.8 million (FY20:
$1.3 million). The increase was driven
by a reversal of fair value adjustments
recognised in the prior year.
• Gross profit includes $6.1 million
primarily made up of JobKeeper receipts
and interest income.
•
Tyro generated a positive EBITDA result
of $14.2 million before share based
payments, IPO costs, costs associated
with the terminal connectivity issue,
and Medipass and Bendigo transaction
costs.
82
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT
4.2 CUSTOMER PERFORMANCE OUTCOMES
Transaction value
churn of 8.7% - up
from 8.0% in FY20
9.3%
8.7%
8.0%
•
Transaction value churn represents
the value of transactions lost from
merchants that have not transacted in a
12-month period.
Merchant number
churn of 11.3% - down
from 11.7% in FY20
FY19
FY20
FY21
13.0%
12.3%
11.2%
11.7%
11.7%
11.3%
FY16
FY17
FY18
FY19
FY20
FY21
Churn by merchant numbers
• Merchant churn represents the number
of merchants that have not transacted
in a 12-month period.
Customer satisfaction
- Net Promoter Score
(NPS) of 21 achieved in
FY21 - down from 43
in FY20
43
37
21
FY19
FY20
FY21
Net Promoter Score (NPS)
•
•
NPS was impacted by the terminal
connectivity issue in January 2021 and
declined from an all-time high of 43.9
to negative 24.7 immediately after the
incident.
NPS has now rebounded to 21.0 at the
date of this report.
Merchant applications
- Average of 1,116
applications per
month for the period 1
March 2021 to 30 June
2021 (average of 772 in
FY20)
1,600
1,400
1,200
1,000
800
600
400
200
0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
FY21
FY20
• We averaged 1,116 new merchant
applications per month for the period 1
March 2021 to 30 June 2021, up 44.6% on
the same period in FY20 with transaction
value churn remaining stable at 8.7% and
merchant number churn decreasing 40
basis points to 11.3%.
83
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 4.3 SUMMARY REMUNERATION OUTCOMES
REMUNERATION AREA
SUMMARY ANALYSIS
Group
remuneration
After no fixed annual remuneration increases were provided to employees for the previous
18-months prior to January 2021 due to the impact of COVID-19, an average increase of 4.4%
across the Company was implemented with effect from January 2021.
CEO
STI
LTI
Certain employees in areas of high skill demand received above average increases to ensure
that Tyro remains competitive to the market for these skills.
Our objective with fixed remuneration is to maintain a market-related remuneration position in
our benchmark group and maintaining remuneration in the range of the 50th to 75th percentile
of our peer benchmark groups.
Total statutory remuneration for the CEO was $2,172,215 (FY20: $2,211,997). Included
in statutory remuneration are the following elements of the CEOs Total Remuneration
Opportunity (TRO) together with the accounting cost of long term benefits and share-based
payments:
• Fixed annual remuneration of $927,985 (FY20: $865,026).
• An annual travel allowance to a maximum of $50,000 - FY21 claim was $34,693 (FY20:
$14,032).
• A short term incentive (STI) of $442,881 of which 25% is payable as service rights and 75%
as cash (FY20: $209,077 of which 100% was issued as service rights).
• A long term incentive (LTI) of $556,104 issued as performance rights under the FY21 LTI
plan.
Refer to Section 5.2 and 5.3 of this report for further details.
All team members participated in Tyro’s STI plan. Excluding the CEO, the Board allocated
$284,907 to Executive KMP as a STI of which 25% is payable as service rights and 75% as cash
(FY20: $153,994 of which 100% was issued as service rights).
The total STI allocated across the Company to all team members in the form of a combination
of cash and service rights (excluding the CEO and Executive KMP) was $5.77 million (FY20:
$2.38 million).
Refer to Section 5.2 of this report for further details.
43 team members participated in Tyro’s FY21 LTI plan. Excluding the CEO, the Board allocated
$361,794 in performance rights under the plan to Executive KMP.
The total LTI allocated across the Company (excluding the CEO and Executive KMP) was
$1,852,032 (FY20: $2,819,693).
Refer to Section 3.6 of this report for further details.
Liquidity Event
Performance Rights
(LEPR)
A limited number of Executive KMP and XLT of Tyro were granted performance rights under
the LEPR plan between FY19 and FY20. A liquidity event was triggered under the plan with the
IPO that took place on 6 December 2019. The first tranche of the Liquidity Event Performance
Rights vested and became exercisable on 6 December 2019 with the second tranche vesting
and becoming exercisable on 6 December 2020. 4,100,000 LEPRs were allocated under the
plan of which 2,733,334 have vested and 1,633,334 have been exercised.
Refer to Section 3.8 of this report for further details.
Non-executive
Director fees
Non-executive Directors received $877,449 in fees of which $770,150 will be salary sacrificed
to rights under the remuneration sacrifice rights plan. Base Director fees were set at $108,000
(FY20: $108,000). The Chairman received $180,000 (FY20: $180,000) in fees while fees for
Committee Chairs were $20,000 per Committee (FY20: $20,000).
Non-executive Director fees were benchmarked to our peer group during the year and
adjusted with the Non-executive Directors resolving to only take up the increase from 1 July
2021.
Refer to Section 6 of this report for further details.
84
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 5. EXECUTIVE REMUNERATION FOR FY21
5.1 CONTRACTS OF EMPLOYMENT
The employment conditions of the KMP (excluding Non-executive Directors) are provided in the table below. All KMP
are employed under contracts of no fixed duration.
NAME
CONTRACT TERM
NOTICE PERIOD
TERMINATION PAYMENT
Robbie Cooke
No fixed duration
6 months
Prav Pala
No fixed duration
9 months
Steven Chapman
No fixed duration
6 months
Combination of notice and payment in lieu,
totalling no less than 6 months
Combination of notice and payment in lieu,
totalling no less than 9 months
Combination of notice and payment in lieu,
totalling no less than 6 months
In the event of serious misconduct, Tyro may terminate employment at any time without notice or a termination
payment being made. Any options or rights not vested before the date of termination will lapse.
Robbie Cooke is subject to a post-employment restraint period of 12 months, and Prav Pala is subject to a post-
employment restraint period of 9 months, and Steven Chapman s subject to a post-employment restraint period of 6
months subject to all usual legal requirements.
5.2 STI OUTCOMES
The outcome of the FY21 financial, customer and individual performance targets and the Executive KMPs scorecard
are summarised below.
Financial component - 60% of total STI
The actual result for FY21 was achievement of 23% gross profit growth from FY20 (excluding JobKeeper benefits
received in FY21) and a margin improvement adjustment factor of 1.18 resulting in 117% of the target being achieved.
The margin adjustment factor relates to the improved expense margin of 88% achieved in FY21 compared to 104% in
FY20.
Gross profit
119,449
93,475
27.8% Gross profit growth was driven by
FY21
FY20
GROWTH
COMMENTARY
Less: JobKeeper benefit
(4,484)
-
a 26% increase in transaction value
and an improvement in the merchant
acquiring fee due to a shift in card mix
- The JobKeeper benefits for FY21 have
been excluded from gross profit for
FY21 however are retained for the
comparison period of FY20
Adjusted gross profit for STI
calculation
114,965
93,475
23.0%
Target of 23% growth achieved
resulting in 100% of financial STI
component becoming available
Operating expenses
105,283
97,847
7.6% Before share based payments
Margin improvement
adjustment factor
STI financial component
outcome
1.18
117%
-
-
- Improved expense margin of 88%
achieved in FY21 compared to 104% in
FY20.
-
100% of the financial STI component x
margin adjustment factor of 1.18
85
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Customer Metrics - 30% of total STI
TARGET
ACHIEVEMENT
STI OUTCOME
Customer satisfaction
Merchant number churn
Transaction value churn
NPS of 46
NPS of 21
10.0%
8.0%
11.3%
8.7%
Merchant applications (March to June 2021)
Ave. 1,000 per month
Ave. 1,116 per month
0%
75%
75%
122%
Executive KMP scorecard for FY21
Robbie Cooke - CEO
MEASURE
TARGET
WEIGHTING
(AT TARGET)
FY21 OUTCOME
WEIGHTED
OUTCOME
THRESHOLD TARGET
MAXIMUM
Financial
23% gross profit growth
Transaction value churn
Less than 8% churn
Merchant number churn
Less than 10% churn
Merchant satisfaction
NPS of 47 or greater
Merchant applications
Average of 1,000 or greater
applications per month
(March to June 2021)
60%
5%
5%
10%
10%
Individual KPIs
Achievement of KPIs
10%
117%
75%
75%
0%
78%
90%
Assessment of Robbie’s individual KPIs for FY21 are were determined by the People Committee according to the
following table:
KPIS
Recovery from COVID-19 – Tyro + its merchants
•
•
•
Protect the business
Appropriately assist Tyro’s merchants
Bring the business back to growth
Future Growth Opportunities
Executive Team Depth:
• Review capabilities
• Build team strengths
Strategy:
• Deliver new strategic plan
• Drive performance to plan
Continue focus on operationalising risk framework and driving risk culture
Scalability / Automation / Innovation
• High performing team
Living the Tyro Values:
• WOW the Customer
• Be GOOD
• Commit to GREATNESS
• Stay HUNGRY
WEIGHTING %
25.0%
25.0%
8.0%
8.0%
8.0%
8.0%
8.0%
10.0%
86
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Prav Pala - CFO
MEASURE
TARGET
WEIGHTING
(AT TARGET)
FY21 OUTCOME
WEIGHTED
OUTCOME
THRESHOLD TARGET
MAXIMUM
Financial
23% gross profit growth
Transaction value churn
Less than 8% churn
Merchant number churn
Less than 10% churn
Merchant satisfaction
NPS of 47 or greater
Merchant applications
Average of 1,000 or greater
applications per month
(March to June 2021)
60%
5%
5%
10%
10%
Individual KPIs
Achievement of KPIs
10%
117%
75%
75%
0%
78%
95%
Steven Chapman - CRO
MEASURE
TARGET
WEIGHTING
(AT TARGET)
FY21 OUTCOME
WEIGHTED
OUTCOME
THRESHOLD TARGET
MAXIMUM
Financial
23% gross profit growth
Transaction value churn
Less than 8% churn
Merchant number churn
Less than 10% churn
Merchant satisfaction
NPS of 47 or greater
Merchant applications
Average of 1,000 or greater
applications per month
(March to June 2021)
60%
5%
5%
10%
10%
Individual KPIs
Achievement of KPIs
10%
117%
75%
75%
0%
78%
95%
Overall STI financial outcomes
The following table provides the FY21 STI outcomes awarded to Executive KMP. Under the FY21 STI plan 25% of the
awarded STI is provided in equity in the form of Service Rights, with vesting occurring 4-years from grant and subject
to service conditions.
ACTUAL STI
AWARDED
$
CASH
$
DEFERRED
$
SERVICE
RIGHTS
ISSUED
STI MAXIMUM
$
STI ACTUAL AS A %
OF STI MAXIMUM
%
Robbie Cooke
442,881
331,161
110,720
Prav Pala
233,924
175,443
58,481
Steven Chapman
50,983
38,237
12,746
To be issued
in FY22
To be issued
in FY22
To be issued
in FY22
940,500
47.1%
494,000
47.4%
107,667
47.4%
Total
727,788
544,841
181,947
1,542,167
47.2%
87
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 5.3 EXECUTIVE KMP REMUNERATION TABLE
The following table provides the statutory remuneration outcomes for Executive KMP for FY21 and FY20 and is
prepared in accordance with Australian Accounting Standards. The statutory remuneration outcomes disclosed in
this table differs from the Executive KMPs’ FY21 Total Remuneration Opportunity (TRO) and the elements of the
remuneration framework outlined in Section 3. Differences arise mainly due to the accounting treatment of long term
benefits (which include annual leave and long service leave) and share-based payments (performance rights, LEPRs,
remuneration sacrifice rights and option plans). Disclosures include an accounting value for current year rights and all
unvested option plan awards.
The Accounting Standards require remuneration in the form of equity awards to be expensed (and therefore included
as remuneration) over the performance period of the option plan even though an Executive KMP may not realise any
benefit from that award.
Statutory Executive KMP remuneration table
EXEC-
UTIVE
KMP
CASH SAL-
ARY
SUPER-
ANNUA-
TION
NON-
MONETARY
BENEFITS
CASH STI
INCENTIVE
OTHER/
IPO
BONUS
LONG-
SERVICE
LEAVE
OPTIONS
RIGHTS2
TOTAL
PERFOR-
MANCE
BASED EQUITY
COMPONENT
SHORT TERM
LONG TERM
$
$
$
%
$
$
$
$
Robbie Cooke
FY21
FY20
906,290
21,694
34,6931
332,161
844,023
21,003
14,0321
-
Prav Pala
FY21
FY20
453,525
21,694
409,436
24,132
Steven Chapman6
FY21
FY20
28,615
1,808
-
-
Angela Green7
367,386
21,694
379,413
21,003
FY21
FY20
Total
-
-
-
-
-
-
$
-
-
$
-
-
-
497,512 379,8653
2,172,215
641,056
691,883
2,211,997
175,443
39,916
146,738 246,9834
1,084,299
-
102,000
24,384
186,071
383,896
1,129,919
38,237
-
-
-
-
-
22,0387
10,000
-
-
-
-
35,971
38,9355
143,566
-
-
-
2,768
76,184
490,070
55,295
266,509
732,220
55.7%
60.3%
52.5%
50.4%
n/a
-
16.1%
43.9%
FY21
1,755,816
66,890
34,693
545,841
22,038
39,916 682,989
741,967 3,890,151
FY20 1,632,872
66,138
14,032
-
112,000
24,384 882,422 1,342,288 4,074,136
1 Non-monetary benefits for Robbie Cooke relate to an allowance claimable to a maximum of $50,000 annually for reimbursement of
personal travel expenses.
2 Rights relate to the Remuneration Sacrifice Rights Plan, the LEPR Plan and the Service Rights awarded in FY20 under the STI Plan. These
rights are classified as long term due to the terms of each respective Plan.
3
4
5
Included in the FY21 cost of Rights awarded to Robbie Cooke, is an amount of $110,720 relating to the FY21 STI incentive and an amount of
$113,985 relating to the amortised accounting cost of the FY20 STI incentive.
Included in the FY21 accounting cost of Rights awarded to Prav Pala, is an amount of $58,481 relating to the FY21 STI incentive and an
amount of $46,933 relating to the the amortised accounting cost of the FY20 STI incentive.
Included in the FY21 accounting cost of Rights awarded to Steve Chapman, is an amount of $12,746 relating to the FY21 STI incentive and an
amount of $13,115 relating to the the amortised accounting cost of the FY20 STI incentive.
6 Steven Chapman commenced as KMP effective 11 June 2021. Pro rata Fixed Remuneration figures provided from 1 June 2021 to 30 June
2021. The STI, Options and Rights figures represent the full FY21 charges.
7 Angela Green ceased employment with the Company effective 10 June 2021. The amount of $22,038 relates to 1 months notice payment
received. This amount is included as ‘Other/IPO Bonus’ remuneration.
88
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 6. NON-EXECUTIVE DIRECTOR REMUNERATION
Non-executive Directors receive a base fee, and where applicable, an additional fee in recognition of the higher
workload and extra responsibilities resulting from Board Committee participation. Fees are based on peer market
benchmarks and reviewed annually.
Non-executive Directors do not receive incentive payments, and following Tyro’s listing on the ASX on 6 December
2019, they are no longer entitled to participate in any Tyro employee or Executive equity plans other than the
remuneration sacrifice rights plan. They receive no non-monetary benefits and do not participate in any retirement
benefit scheme, other than statutory superannuation contributions.
Under the ASX Listing Rules, the total amount or value of remuneration paid to Non-executive Directors in any year
may not exceed the amount approved by shareholders at the Company’s general meeting. This amount has been
fixed at $1,400,000 per annum, as approved by shareholders at Tyro’s 2019 annual general meeting.
As at the date of this report, the Non-executive Director base fee agreed to be paid by us is $140,000 effective from
1 July 2021 (FY20: $108,000) per annum before superannuation contributions. Non-executive Directors are also paid
additional base fees for the following roles:
• Chair of the Board: $70,000 per annum (for total remuneration of $210,000 per annum); and
• Chair of a Board Committee: $20,000 per Committee Chair (for total remuneration of $160,000 per annum), not
payable if the Committee Chair is also the Board Chair.
Other than the Chair of a Board Committee, Non-executive Directors are not paid an additional fee for being a
member of a Board Committee. In addition to the remuneration above, the Company will contribute statutory
superannuation to a complying superannuation fund.
Remuneration is reviewed annually and any increase to it will be at the discretion of the Board but will not exceed the
aggregate amount approved by Shareholders. The table below outlines the statutory remuneration paid to Non-
executive Directors in FY21 in accordance with Australian Accounting Standards.
NON-EXECUTIVE
DIRECTOR
FINANCIAL
YEAR
CASH FEES
SUPER-
ANNUATION
David Thodey
Hamish Corlett
David Fite
Catherine Harris2
Aliza Knox3
Fiona Pak-Poy
Paul Rickard
Kerry Roxburgh4
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
$
-
-
-
-
-
-
-
-
23,349
-
-
-
76,667
71,333
-
-
Total
FY21
100,016
FY20
71,333
$
-
-
-
-
-
-
-
-
-
-
-
-
7,283
6,777
-
-
7,283
6,777
OPTIONS
RIGHTS1
$
$
TOTAL
$
7,691
197,100
204,791
14,272
197,525
211,797
4,752
9,048
9,829
118,260
134,261
123,012
143,309
118,260
128,089
18,414
134,261
152,675
10,179
18,977
-
-
-
140,160
150,339
159,125
-
-
178,102
23,349
-
118,260
118,260
9,137
110,352
119,489
11,234
21,065
-
78,110
91,993
-
173,294
191,168
-
PERFORMANCE
BASED EQUITY
COMPONENT
%
3.8%
6.7%
3.9%
6.3%
7.7%
12.1%
6.8%
10.7%
-
-
-
7.6%
6.5%
11.0%
-
27,067
65,611
92,678
29.2%
43,685
770,150
921,134
117,980
893,128
1,089,218
1.
Included in rights for FY21 are the fees Non-executive Directors have salary sacrificed to be issued as service rights in FY22.
2. Catherine Harris stepped down from the Board on 30 June 2021. Remuneration details are provided for the full year.
3. Aliza Knox was appointed to the Board on 21 April 2021. The table above reflects the Non-executive Director fees received from that date.
4. Kerry Roxburgh stepped down from the Board on 15 October 2019.
89
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 7. SUMMARY OF OPTIONS AND RIGHTS UNDER ISSUE
7.1 RIGHTS
Unissued ordinary shares in Tyro held under service rights plans, the FY21 LTI performance rights plan, the Liquidity
Event Performance Rights plan and remuneration sacrifice rights plans at the date of this report are shown in the
table below:
AWARD TYPE
GRANT DATE EXPIRY DATE
Remuneration sacrifice rights in
respect of FY18 Executive STI
Remuneration sacrifice rights in
respect of FY19 Director Fees
Remuneration sacrifice rights in
respect of FY19 Executive STI
Remuneration sacrifice rights in
respect of FY20 Director Fees
Liquidity Event Performance
Rights
FY20 STI service rights
FY21 LTI performance rights
1
10 years after relevant vesting date
18 Apr 2019
5 Sep 2018
16 Oct 2019
16 Oct 2019
9 May to
6 Aug 2019
14 Dec 2020
5 Feb 2021
n/a
n/a
n/a
n/a
1
1
2
EXERCISE
PRICE
% VESTED
% EXER-
CISED
n/a
100.0%
100.0%
n/a
100.0%
100.0%
n/a
100.0%
100.0%
n/a
100.0%
85.0%
NUMBER
HELD AS
RIGHTS
Nil
Nil
Nil
Nil
n/a
66.7%
39.8% 1,966,666
n/a
n/a
40.1%
11.9%
570,651
0%
0%
750,233
2 FY21 LTI performance rights expire immediatly after vesting date should the performance hurldes not be met. Should the performance
hurldes be met on vesting date, then shares are issued to plan participants without the requirement to exercise.
Rights held by Executive and Non-executive KMP
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION
EXERCISED
FORFEITED
BALANCE AT
END OF YEAR
VESTED AND
EXERCIS-
ABLE
UNVESTED
NAME
NON-EXECUTIVE KMP:
David Thodey
FY21
FY20
131,905
-
(131,905)
-
131,905
-
Hamish Corlett
FY21
89,658
-
(89,658)
David Fite
FY20
FY21
FY20
-
89,658
-
89,658
-
(89,658)
-
89,658
-
Catherine Harris1
FY21
106,262
-
(106,262)
Aliza Knox
Fiona Pak-Poy
Paul Rickard
FY20
FY21
FY20
FY21
FY20
FY21
FY20
93,735
106,262
(93,735)
-
-
73,692
-
-
-
-
-
(73,692)
-
73,692
-
61,432
-
(61,432)
138,472
61,432
(138,472)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
131,905
131,905
-
-
89,658
89,658
-
-
89,658
89,658
-
-
106,262
106,262
-
-
-
-
-
-
73,692
73,692
-
-
61,432
61,432
-
-
-
-
-
-
-
-
-
-
-
-
-
-
90
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT NAME
EXECUTIVE KMP:
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION
EXERCISED
FORFEITED
BALANCE AT
END OF YEAR
VESTED AND
EXERCIS-
ABLE
UNVESTED
Robbie Cooke
FY21
1,200,000
230,476
-
FY20
1,306,604
270,583
(377,187)
Prav Pala
FY21
333,333
77,790
(166,667)
FY20
500,000
85,792
(252,459)
Steven Chapman2
FY21
FY20
-
-
22,187
(2,718)
7,951
(7,951)
-
-
-
-
-
-
Angela Green3
FY21
200,000
62,626
(107,671)
(154,955)
1,430,476
826,240
604,236
1,200,000
400,000
800,000
244,456
10,805
233,652
333,333
-
333,333
19,469
302
19,167
-
-
-
-
-
-
-
200,000
FY20
300,000
7,553
(107,553)
-
200,000
1 Catherine Harris stepped down from the Board on 30 June 2021. Details are provided for the full year.
2 Steven Chapman commenced as KMP effective 11 June 2021. Details of his rights prior to the commencement as KMP are included in this
table.
3 Angela Green ceased employment with the Company effective 10 June 2021. All remaining rights were forfeited from that date.
Details of rights vested, exercised and forfeited in the year are included in the table below.
AWARD TYPE
GRANT DATE
VESTING DATE
VESTED %
EXERCISED
(NUMBER)
FORFEITED
(NUMBER)
Remuneration sacrifice rights in
respect of FY18 Executive STI
Remuneration sacrifice rights in
respect of FY19 Director fees
Remuneration sacrifice rights in
respect of FY19 Executive STI
Remuneration sacrifice rights in
respect of FY20 Director fees
18 Apr 2019
1 Jul 2019
100.0%
106,604
5 Sep 2018
1 Jul 2019
100.0%
391,983
16 Oct 2019
7 Apr 2020
100.0%
773,579
Nil
Nil
Nil
16 Oct 2019
1 Jul 2020
100.0%
596,421
105,617
Liquidity Event Performance
Rights
9 May to
6 Aug 2019
Refer to Note 1
66.7%
1,633,334
100,000
FY20 STI service rights
14 Dec 2020
Refer to Note 2
FY21 LTI performance rights
5 Feb 2021
Refer to Note 3
40.1%
0%
87,073
Nil
73,824
84,083
1 Vesting occurs in three equal tranches, as follows: one third on the date of the liquidity event (Initial Vesting Date); one third on the date
that is 12 months after the initial vesting date; and one third on the date that is 24 months after the Initial vesting date.
2 Vesting occurs equally on a monthly basis over a 24-month period from the Initial Vesting Date.
3 Subject to passing the ‘Gateway’ and satisfying the performance hurdle, the performance rights vest in one tranche 3 years following the
effective date.
91
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 7.2 OPTIONS
Unissued ordinary shares in Tyro held under option plans at the date of this report are shown in the table below:
AWARD TYPE
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
NUMBER HELD AS
OPTIONS
Options exercisable between
$0.375 to $1.76 expiring between
17 October 2020 and 22 July 2024
Options exercisable at Nil expiring
between 30 December 2024 and
25 June 2025
Options exercisable at Nil expiring
on 31 August 2025
Between
18 Oct 2013
to 19 Dec 2018
31 Dec 2018
to 26 Jun 2019
Between
17 Oct 2020
to 22 Jul 2024
Between
30 Dec 2024
and 25 Jun 2025
1 Sep 2019
31 Aug 2025
$0.375 to $1.76
14,241,742
Nil
Nil
1,670,812
1,033,074
Options exercisable at $1.50
expiring on 30 April 2026
1 May and 6 Aug
2019
30 Apr 2026
$1.50
5,762,443
Options exercisable at $1.79
expiring on 30 September 2026
Options exercisable at $0.08
expiring on 17 December 2020
1 Oct 2019
30 Sep 2026
$1.79
6,647,422
17 Dec 2010
17 Dec 2020
$0.08
-
Options held by Executive and Non-executive KMP
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION
EXERCISED
FORFEITED
BALANCE AT
END OF YEAR
VESTED AND
EXERCISABLE
UNVESTED
NAME
NON-EXECUTIVE KMP:
David Thodey
FY21
FY20
82,286
82,286
Hamish Corlett
FY21
68,000
FY20
68,000
David Fite
FY21
2,919,318
FY20
2,919,318
Catherine Harris1
FY21
164,626
Aliza Knox
FY20
164,626
FY21
FY20
-
-
Fiona Pak-Poy
FY21
83,000
FY20
-
83,000
Paul Rickard
FY21
253,940
FY20
253,940
-
-
(24,540)
-
-
-
-
-
(2,761,174)
-
-
-
-
-
-
-
82,286
82,286
68,000
68,000
5,714
2,857
-
-
76,572
79,429
68,000
68,000
158,144
57,822
99,464
2,919,318
2,795,991
123,327
(55,888)
(107,618)
1,120
1,120
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
164,626
40,722
123,904
-
-
83,000
83,000
-
-
-
-
-
-
83,000
83,000
229,400
106,682
122,718
253,940
114,936
139,004
92
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT NAME
EXECUTIVE KMP:
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION
EXERCISED
FORFEITED
BALANCE AT
END OF YEAR
VESTED AND
EXERCISABLE
UNVESTED
Robbie Cooke
FY21
5,504,530
-
FY20
3,766,945
1,737,585
-
-
Prav Pala
FY21
2,033,739
-
(225,553)
FY20
1,474,909
558,830
Steven Chapman2
FY21
342,334
-
FY20
181,337
160,997
Angela Green3
FY21
494,044
-
FY20
-
454,437
-
-
-
-
-
-
-
-
-
-
-
5,504,530
1,303,894
4,200,636
5,504,530
864,068
4,640,462
1,808,186
492,644
1,315,542
2,033,739
625,624
1,408,115
342,334
342,334
(494,044)
-
-
494,044
-
-
-
-
342,334
342,334
-
494,044
1 Catherine Harris stepped down from the Board on 30 June 2021. Details are provided for the full year.
2 Steven Chapman commenced as KMP effective 11 June 2021. Details of his options prior to the commencement as KMP are included in this
table.
3 Angela Green ceased employment with the Company effective 10 June 2021. All remaining options were forfeited from that date.
Details of all current options vested, exercised and forfeited are included in the table below.
AWARD TYPE
GRANT DATE
VESTING DATE
VESTED % EXERCISED FORFEITED
Options exercisable between
$0.375 to $1.76 expiring between
17 October 2020 and 22 July 2024
Between
18 Oct 2013
to 19 Dec 2018
Monthly linear
85%
32%
6%
Options exercisable at Nil expiring
between 30 December 2024 and
25 June 2025
Options exercisable at Nil expiring
on 31 August 2025
31 Dec 2018
to 1 Apr 2019
Annual linear
38%
17%
11%
1 Sep 2019
Annual linear
18%
10%
22%
Options exercisable at $1.50
expiring on 30 April 2026
1 May 2019
Options exercisable at $1.79
expiring on 30 September 2026
1 Oct 2019
Annually over 4 tranches
based on performance
conditions
Annually over 4 tranches
based on performance
conditions
0%
0%
6%
0%
0%
15%
Options exercisable at $0.08
expiring on 17 December 2020
17 Dec 2010
Fully vested on grant
100%
100%
0%
93
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 7.3 EQUITY GRANTS TO EXECUTIVE KMP
This section sets out the required statutory disclosures of equity grants for Tyro’s Executive KMP.
EXEC-
UTIVE
KMP
GRANT DATE
Robbie Cooke
NUMBER OF
OPTIONS/
RIGHTS
GRANTED
VESTING
DATE
EXERCISE
PRICE
VALUE OF
OPTIONS/
RIGHTS AT
GRANT DATE
VESTED %
VESTED
(NUMBER)
FORFEIT-
ED/
LAPSED %
VALUE OF
OPTIONS/
RIGHTS
EXERCISED
DURING THE
REPORTING
PERIOD
-
-
-
-
-
-
-
$31,211
-
-
-
$15,000
-
$183,333
-
-
-
-
-
$9,024
-
$1.76
$475,159
63.3%
1,151,514
$1.50
$488,235
-
-
Nil
Nil
$1,320,000
66.7%
800,000
$419,047
40.0%
152,380
$1.79
$816,231
-
-
Nil
Nil
$0.45
$0.60
$1.49
$1.76
$209,077
41.7%
26,240
$556,104
-
-
$31,211
100.0%
211,268
$26,479
100.0%
166,129
$39,580
100.0%
141,403
$59,492
68.3%
170,827
Nil
$74,999
40.0%
28,570
$1.50
$197,647
-
-
Nil
$550,000
66.7%
333,334
$1.79
$262,510
-
-
$86,088
41.7%
10,805
Nil
Nil
$163,359
-
-
-
-
-
-
$1.50
$197,647
$1.79
$262,510
Nil
Nil
$24,057
41.7%
3,020
$47,064
-
-
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$330,000
66.7%
200,000
33.3% $110,000
$1.50
$1.79
Nil
Nil
$12,334
$213,472
-
-
-
-
100.0%
100.0%
-
-
$67,906
41.7%
7,671
62.5%
$25,468
$132,845
-
-
100.0%
-
19 Dec 2018
1,818,180
1 May 2019
1,567,813
26 Jun 2019
1,200,000
26 Jun 2019
380,952
1 Oct 2019
1,737,585
2 Sep 2020
62,975
1 Feb 2021
167,501
Prav Pala
10 Oct 2014
211,268
6 Oct 2015
166,129
2 Nov 2016
141,403
1 Feb 2018
250,000
31 Dec 2018
71,428
1 May 2019
634,681
9 May 2019
500,000
1 Oct 2019
558,830
2 Sep 2020
25,930
1 Feb 2021
51,860
Steven Chapman8
1 May 2019
181,337
1 Oct 2019
160,997
2 Sep 2020
1 Feb 2021
7,246
14,941
Angela Green9
6 Aug 2019
300,000
6 Aug 2019
39,607
1 Oct 2019
454,437
2 Sep 2020
20,453
1 Feb 2021
42,173
1
2
3
4
5
6
7
1
1
1
1
4
2
3
5
6
7
2
5
6
7
3
2
5
6
7
1 Options granted vest monthly in equal tranches over a period of 5 years and are not subject to any performance conditions.
2 Options granted vest annually in equal 25% tranches over a period of four years, commencing 24 months after the grant date and subject to
the following performance conditions: (i) 25% compound gross revenue growth per annum; and (ii) a positive net profit result (before tax and
share-based expenses). If a tranche does not satisfy both performance criteria on the relevant testing date, the tranche will be retested at
the next testing date (if any).
3 Vesting will occur in three equal tranches, as follows: one third on the date of the liquidity event (Initial Vesting Date); one third on the date
that is 12 months after the Initial Vesting Date; and one third on the date that is 24 months after the Initial Vesting Date.
4 Options granted vest annually in equal 20% tranches over a period of five years, commencing 12 months after the grant date and are not
subject to any performance conditions.
94
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 5 Options granted vest annually in equal 25% tranches over a period of four years, commencing 24 months after the grant date and subject to
the following performance conditions: (i) 20% compound gross revenue growth per annum; and (ii) a positive net profit result (before tax and
share-based expenses). If a tranche does not satisfy both performance criteria on the relevant testing date, the tranche will be retested at
the next testing date (if any).
6 Vesting occurs equally on a monthly basis over a 24-month period from the Initial Vesting Date.
7 Subject to passing the ‘Gateway’ and satisfying the Performance Hurdle, the Performance Rights vest in one tranche 3 years following the
Effective Date.
8 Steven Chapman commenced as KMP effective 11 June 2021. Details of his options prior to the commencement as KMP are included in this
table.
9 Angela Green ceased employment with the Company effective 10 June 2021. All remaining options were forfeited from that date.
8. SUMMARY OF SHARES HELD BY EXECUTIVE AND NON-
EXECUTIVE KMP
The number of ordinary shares held in Tyro at 30 June 2021 by each KMP, including their personally related parties, is
set out below.
NAME
NON-EXECUTIVE KMP:
David Thodey
FY21
FY20
Hamish Corlett1
FY21
David Fite
FY20
FY21
FY20
Catherine Harris2
FY21
Aliza Knox
Fiona Pak-Poy
Paul Rickard
EXECUTIVE KMP:
Robbie Cooke
Prav Pala
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Steven Chapman
FY21
FY20
BALANCE AT START OF
YEAR
RECEIVED DURING THE
YEAR ON EXERCISE OF
OPTIONS/RIGHTS
OTHER CHANGES
DURING THE YEAR
BALANCE AT END OF
YEAR
859,091
750,000
1,114,263
932,444
18,547,995
20,547,995
627,826
425,000
-
-
32,728
-
2,319,660
2,144,824
491,936
-
272,662
-
5,658
-
131,905
-
89,658
-
-
109,091
-
181,819
2,850,832
(2,804,966)
-
(2,000,000)
162,150
93,735
-
-
73,692
-
85,972
138,472
-
377,187
392,220
252,459
3,020
-
-
109,091
-
-
-
32,728
(307,061)
36,364
-
114,749
-
20,203
-
5,658
990,996
859,091
1,203,921
1,114,263
18,593,861
18,547,995
789,976
627,826
-
-
106,420
32,728
2,098,571
2,319,660
491,936
491,936
664,882
272,662
8,678
5,658
1 Shares indicated in the table are beneficially held by Hamish Corlett. Hamish Corlett also has a relevant interest in TDM Growth Partners Pty
Ltd and other associated entities who have a total interest in Tyro of 23,853,855 ordinary shares.
2 Catherine Harris stepped down from the Board on 30 June 2021. Details are provided for the full year.
95
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT 9. REMUNERATION AND BOARD GOVERNANCE
The People Committee consists of four Non-executive Directors, with one performing the role of Chair. This
Committee provides Tyro with a robust governance framework to ensure remuneration policies, practices and
outcomes are reasonable and consistent with shareholder expectations. The diagram below provides an overview of
this framework.
TYRO REMUNERATION GOVERNANCE FRAMEWORK
Board - Chaired by David Thodey
REVIEW AND APPROVE TYRO’S REMUNERATION POLICIES AND FRAMEWORK TO ENSURE
THAT THEY ARE ALIGNED WITH TYRO’S PURPOSE, VALUES, STRATEGIC OBJECTIVES AND RISK
APPETITE. REVIEW AND APPROVE REMUNERATION OUTCOMES FOR SENIOR EXECUTIVES,
OTHERS AS REQUIRED BY THE LAW AND NON-EXECUTIVE DIRECTORS.
Board People Committee – Chaired by Fiona Pak-Poy (from 21 June 2021)
The Committee assists the Board with remuneration matters by providing objective oversight and making
recommendations to the Board in relation to:
•
•
Tyro’s remuneration policy and frameworks;
the remuneration of the CEO | Managing Director, other senior executives and others as required by
the law; and
the process for allocating any pool of Directors fees approved by shareholders.
•
Composition
The people Committee is independent of management. Accordingly, the Committee consists entirely of
Non-executive Directors, the majority of whom are independent. Where appropriate, the CEO | Managing
Director and Chief People Officer attend Committee meetings. However, they do not participate in formal
decision-making or in discussions relating to their own remuneration.
DELEGATED BOARD COMMITTEE
CEO | Managing Director
Present proposals on remuneration,
implementing remuneration polices and other
matters within the authority of the Committee
Remuneration Consultants
External and independent remuneration advice
and information to assist the Committee in
decision making
For further details regarding the People Committee Charter, refer to our Investor Relations website at:
www.tyro.com/about-tyro/investors/
The People Committee is responsible for advising the Board on:
• annual allocation of the pool of fees approved by shareholders for Directors;
• annual remuneration of the CEO | Managing Director, the CEO | Managing Director’s direct reports and any other
persons under the Banking Executive Accountability Regime (BEAR), amongst others;
the monitoring of culture, including risk culture;
the BEAR requirements around remuneration of accountable persons;
• performance review of the CEO, executive leadership team and other BEAR accountable persons;
• employee equity plans;
•
•
• executive recruitment, termination policies and succession planning;
•
• performance and development of Directors including ongoing skills assessment, professional development and
recruitment, reappointment and removal of Directors;
annual evaluation of the performance of the Board; and
• strategic people initiatives, including diversity and related disclosures, including sustainability reporting.
Remuneration is set by the Board with the advice of People Committee and is reviewed on an annual basis. During this
process, consideration is given to the overall performance of Tyro, as well as prevailing market conditions.
96
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT
9.1 BOARD GOVERNANCE
Information relating to corporate governance is covered in
detail in the Investor section of our website and economic
sustainability is covered in more detail in the Directors’ Report
on pages 52 to 63.
Our Corporate Governance Statement describes in full our
approach to corporate governance and our compliance with the
Recommendations of the ASX Corporate Governance Council.
Tyro complies with the fourth edition of the ASX Corporate
Governance Principles and Recommendations, which have
formed the basis of Tyro’s decision making and accountability
since listing on the ASX. The Corporate Governance Statement
in respect of FY21 has been lodged with the ASX and is available
from our website at: https://investors.tyro.com/investor-
centre/?page=corporate-governance.
This Corporate Governance Statement has been approved by
the Board and is current as at 26 August 2021.
9.2 REMUNERATION CONSULTANTS
The People Committee engages independent remuneration
advisors on an as-needs basis to provide information regarding
market dynamics, trends and regulatory developments,
specifically those impacting financial services companies. The
People Committee and the Board consider this information
along with other market insights to determine what would
be the most appropriate recommendations to make for Tyro
regarding remuneration.
In FY21, KPMG was engaged to provide benchmarking data
for Non-executive Directors, Executive KMP and the executive
leadership team (XLT) for the purposes of informing the People
Committee of the current market positioning of KMP and XLT
against Tyro’s benchmarking peers. KPMG was paid $22,000
for the benchmarking review and the review of the existing
remuneration framework’s compliance with BEAR. Godfrey
Remuneration Group was also engaged in FY21 relating to
services for providing remuneration data for Executives. Godfrey
Remuneration Group was paid $16,000 for these services.
The Board is satisfied that no remuneration recommendations
(as defined in the Corporations Act 2001) were provided by
KPMG, Godfrey Remuneration Group or any other external
remuneration advisors during FY21.
9.3 LOANS AND OTHER TRANSACTIONS
No loans have been granted to any KMP. There were no
transactions during the reporting period involving an equity
instrument to KMP or related parties, other than those disclosed
in the Remuneration Report.
97
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITED REMUNERATION REPORT Auditor's
Independence
Declaration
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of Tyro Payments
Limited
As lead auditor for the audit of the financial report of Tyro Payments Limited for the financial year
ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Tyro Payments Limited and the entities it controlled during the
financial year.
Ernst & Young
Michael Byrne
Partner
26 August 2021
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
98
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021AUDITOR'S INDEPENDENCE DECLARATION
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021
99
100
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 FINANCIAL
REPORT
101
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 FY21
102
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 Financial Statements
Statement of Comprehensive Income
Statement of Financial Position
Statement of Cash Flows
Statement of Changes in Equity
Notes to the financial statements
1. General Information and Statement of Accounting Policies
2.
3.
4.
Revenue and Expenses
Segment Reporting
Income Tax
5. Cash and Cash Equivalents
6. Due from Other Financial Institutions
7.
8.
9.
Trade and Other Receivables
Loans
Leases
10. Financial Investments
11.
Investment in Associates
12. Property, Plant and Equipment
13.
Intangible Assets and Goodwill
14. Share Based Payments
15. Deposits
16. Trade Payables and Other Liabilities
17. Current and Non-Current Provisions
18. Contributed Equity and Reserves
19. Financial Risk Management Objectives, Policies and Processes
20. Commitments and Contingencies
21. Acquisition of Subsidiary
22. List of Subsidiaries
23. Earnings Per Share
24. Auditor’s Remuneration
25. Related Party Disclosures
26. Matters Subsequent to the End of the Financial Year
27. Parent Entity Disclosures
28. Contingent Liabilities
Directors’ Declaration
Independent Audit Report to the Members of Tyro Payments Limited
104
104
105
106
107
108
108
118
119
120
121
122
123
123
123
125
125
126
127
128
130
131
131
132
133
141
142
143
144
144
145
146
147
147
148
149
103
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
Fees and terminal rental income
Interest income on loans
Fair value gain/(loss) on loans
Interest income on cash and deposits
Interest income on assets at FVOCI
Sale of terminal accessories
Other revenue and income
Total revenue
Interchange, integration and support fees
Interest expense on deposits
Terminal accessories
Total direct expenses
Gross profit
Employee benefits expense (excluding share-based expense)
Share-based payments expense
Administrative expenses
Contractor and consulting expenses
Marketing expenses
Depreciation and amortisation
Lending and non-lending losses
Net interest expense
Total operating expenses
Share of loss from associates
Initial Public Offering (IPO) expenses
Loss before tax expense
Income tax expense
Loss for the year
Other comprehensive income/(loss)
FVOCI reserve – revaluation gain/(loss), net of tax
Total comprehensive loss for the year
Earnings per share for loss attributable to the Ordinary Equity Holders of Tyro
Payments Limited
Basic loss per share
Diluted loss per share
NOTE
2021
$000
GROUP
2020
$000
2
228,069
201,770
1,952
1,270
394
557
1,152
5,128
4,179
(2,361)
991
791
1,056
4,249
238,522
210,675
(117,371)
(115,722)
(379)
(1,323)
(516)
(962)
(119,073)
(117,200)
119,449
93,475
(76,174)
(67,662)
(9,342)
(10,896)
(22,903)
(16,598)
(7,192)
(5,419)
(5,913)
(5,716)
2
2
2
2
9, 12, 13
(15,364)
(12,524)
2
(10,863)
(1,958)
11
(517)
(535)
(147,774)
(121,802)
(1,119)
(331)
-
(9,730)
(29,775)
(38,057)
4
(48)
-
(29,823)
(38,057)
105
(96)
(29,718)
(38,153)
Cents
Cents
23
23
(5.90)
(5.90)
(7.99)
(7.99)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
104
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
NOTE
2021
$000
Assets
Current assets
Cash and cash equivalents
Due from other financial institutions
Trade and other receivables
Loans
Prepayments
Net investment in sublease
Inventories
Total current assets
Non-current assets
Loans
Financial investments
Investment in associates
Property, plant and equipment
Right of use assets
Intangible assets and goodwill
Net investment in sublease
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Deposits
Trade payables and other liabilities
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Other liabilities
Lease liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
5
6
7
8
9
8
10
11
12
9
13
9
4
15
16
9
17
16
9
17
4
18
18
18
GROUP
2020
$000
103,761
18,429
15,172
9,840
2,223
823
60
84,521
19,191
17,095
13,408
3,337
-
128
137,680
150,308
1,979
69,068
4,998
26,027
1,654
140,867
-
2,081
69,761
-
17,266
4,528
5,367
544
13,856
13,984
258,449
113,531
396,129
263,839
75,481
29,215
2,812
15,382
50,542
10,332
4,672
4,347
122,890
69,893
90,478
-
1,227
870
92,575
215,465
-
2,811
1,416
-
4,227
74,120
180,664
189,719
274,436
265,763
40,827
28,477
(134,599)
(104,521)
180,664
189,719
The above Statement of Financial Position should be read in conjunction with the accompanying Notes.
105
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Fees and terminal rental income received
Interchange, integration and support fees paid
Interest received
Interest paid
JobKeeper and other income received
Payments to employees, suppliers and IPO costs:
Personnel expenses paid
Terminals purchased
Other operating expenses and IPO costs
Movement in net scheme and other receivables
Movement in customer loans
Movement in deposits
Net cash flows from operating activities
Cash flows from investing activities
Movement in term deposit investments
Purchases
Proceeds on maturity
Movement in financial investments
Purchases
Proceeds
Movement in equity investments
Investments is associates
Purchase of property, plant and equipment (excluding terminals)
Payments for recognised intangible assets
Payments received from sublease
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares (net of transaction costs)
Proceeds from exercise of share options
Payments for lease liabilities
Net cash flows from financing activities
Net movement in cash and cash equivalents
Effect of foreign exchange rates on cash and cash equivalents
Cash and cash equivalents at beginning of year
NOTE
2021
$000
GROUP
2020
$000
227,920
202,499
(117,800)
(115,986)
3,018
(415)
6,069
6,035
(487)
4,264
(75,125)
(70,263)
(16,360)
(7,176)
(30,635)
(43,477)
(7,650)
(2,918)
8,867
294
24,939
23,624
11,043
8,194
-
(10,033)
5,028
-
(11,883)
(42,211)
8,951
12,967
(2,491)
(1,205)
(28,076)
376
(3,498)
(1,663)
(3,082)
405
(29,300)
(47,115)
-
119,994
4,059
(5,069)
3,913
(4,815)
(1,010)
119,092
(19,267)
27
80,171
(310)
103,761
23,900
Cash and cash equivalents at end of year
5
84,521
103,761
The above Statement of Cash Flows should be read in conjunction with the accompanying Notes.
106
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
GROUP
At 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of share capital – from IPO1
Issue of share capital – from options and rights exercised
Share-based payments
Transfer to general reserve for credit losses
At 30 June 2020
At 1 July 2020
Loss for the year
Other comprehensive income
Deferred tax on equity movements
Total comprehensive income
Issue of ordinary shares
Share-based payments
Transfer to general reserve for credit losses
CON-
TRIBUTED
EQUITY
FVOCI
RESERVE
SHARE-
BASED
PAYMENTS
RESERVE
GENERAL
RESERVE
FOR CREDIT
LOSSES
ACCU-
MULATED
LOSSES
$000
$000
$000
$000
$000
TOTAL
$000
141,856
-
-
-
119,994
3,913
-
-
265,763
265,763
-
-
-
-
8,673
-
-
99
-
(96)
(96)
-
-
-
-
3
3
-
185
(80)
105
-
-
-
15,475
1,918
(66,279)
93,069
-
-
-
-
-
10,896
-
-
-
-
-
-
(38,057)
(38,057)
-
(96)
(38,057)
(38,153)
-
-
-
119,994
3,913
10,896
-
185
(185)
-
26,371
2,103
(104,521)
189,719
26,371
2,103
(104,521)
189,719
-
-
-
-
-
11,990
-
-
-
-
-
-
(29,823)
(29,823)
-
-
185
(80)
(29,823)
(29,718)
-
-
8,673
11,990
-
255
(255)
-
At 30 June 2021
18
274,436
108
38,361
2,358
(134,599)
180,664
1 Net of related capital raising after-tax costs of $5,006,000.
The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
107
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
1. GENERAL INFORMATION AND STATEMENT OF ACCOUNTING POLICIES
General Information
The financial report of the Group was authorised for issue in accordance with a resolution of the Directors on 26 August 2021.
The Group is listed on the Australian Securities Exchange (ASX), registered and domiciled in Australia. The nature of the operations
and principal activities of the Group are described in the Directors’ Report.
On 13 April 2021, Tyro Payments (Ben Alliance) Pty Ltd was incorporated as a wholly owned subsidiary of Tyro Payments Limited, to
serve as the employing entity for staff moving from Bendigo and Adelaide Bank Ltd as part of the alliance.
On 31 May 2021, the Company acquired a 100% ownership interest in Medipass Solutions Pty Ltd and its controlled entities
(Medipass).
As a result of the transactions noted above, the financial report is now prepared on a consolidated basis. The financial report includes
the consolidated financial statements of Tyro Payments Limited and its controlled entities (together referred to as the Group). In the
comparative period there was no consolidated group and therefore Group balances represent the Company on a stand-alone basis.
The significant policies which have been adopted in the preparation of this financial report are set out below.
(a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards
Board and International Financial Reporting Standards (IFRS) and Interpretations as issued by the International Accounting Standards
Board (IASB). The financial report has also been prepared on a historical cost basis, except for loans and financial investments which
have been measured at fair value.
A number of new accounting standards and amendments have been issued but are not yet effective, none of which have been early
adopted by the Group in this financial report. These new standards and amendments, when applied in future periods, are not expected
to have a material impact on the financial position or performance of the Group.
Similar categories of income and expenses have been grouped together. Prior year comparative information for these amounts, where
necessary, has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures.
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars, under the option
available to the Group under ASIC Corporations Instrument 2016/191, unless otherwise stated.
(b) Going concern
The Group had net current assets of $14.8 million as at 30 June 2021 (2020: $80.4 million). The Directors consider the Group is able to
pay its debts as and when they fall due, and therefore the Group is able to continue as a going concern.
(c) Significant accounting judgements, estimates and assumptions
In applying the Group'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 Group. 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 Group recognises the cost of equity-settled transactions with employees (including Key
Management Personnel) and other stakeholders by reference to the fair value of the equity instruments at the date on which they are
granted. The valuation assumptions are detailed in Note 14. The equity-settled instruments are expensed using a linear probability of
vesting approach.
Classification and valuation of investments - The Group classifies its investments in floating rate notes and equity securities where it
does not exercise significant influence or control as Financial Investments – at FVOCI, with movements in fair value recognised directly
in equity. The fair value of listed shares has been determined by reference to published price quotations in an active market. Where
no active market exists for a particular asset, the Group uses a valuation technique to arrive at the fair value. The Group prioritises the
use of observable market inputs in the valuation of Level 3 fair valued investments and considers all reasonable sources of alternative
information when incorporating unobservable inputs. Further details are as disclosed in the footnotes.
The equity investment in Medipass is deemed to be a business combination and is accounted for using the acquisition method of
accounting. See Note 1(d) paragraph (i) and Note 21 for further details.
Investments in associated companies are accounted for using the equity method of accounting less impairment losses. See Note 1(m)
and Note 11 for further details.
108
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT Valuation of loans – The Group’s lending product differs from a conventional lending asset that accrues interest over time. Under
the Group’s current terms, a merchant borrows a loan amount plus an upfront fee. The total loan plus fee amount does not change
regardless of early or late repayment. As such, the product fails the “solely payments of principal and interest test” under IFRS 9
“Financial Instruments”, and is therefore measured at fair value through the Statement of Comprehensive Income.
The fair value of loans has been estimated using a valuation technique that converts forecasted cash flows to a present value amount
(discounted cash flow method). The forecasted cash flows are actuarially determined using predictive models based partly on evidenced
historical performance and expected repayment profiles including an adjustment for loans to customers impacted by COVID-19. Inputs
into the valuation model are detailed in the footnotes.
Capitalisation of internally generated software - An intangible asset arising from development expenditure on an internal project is
recognised by the Group only when the following can be demonstrated:
•
•
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
its intention to complete and its ability to use or sell the asset;
how the asset will generate probable future economic benefits;
availability of resources to complete the development; and
the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The Group commences amortising internally generated software projects from the point the asset is ready for use.
Estimation of useful lives of assets - The estimation of the useful lives of assets has been primarily 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 for property, plant and equipment are included in the
footnotes for amortisation of intangible assets with finite useful lives. In assessing whether the useful life of an intangible asset is finite or
indefinite, Management use judgement in determining the period over which expected future benefits will be generated, also factoring
in the market that the Group operates in and the longer term strategy for the Group. An impairment assessment is conducted and
reviewed by Management at least annually as to whether indicators of impairment such as technical obsolescence exist.
Provisions - Determining the amount of provisioning required in respect of customer-related refunds requires the exercise of
significant judgement. This includes forming a view on a number of different estimates, including number of impacted customers,
average compensation per customer and the associated costs required to complete the remediation activities. The appropriateness
of underlying assumptions is reviewed on a regular basis against actual experience and other available evidence, and adjustments are
made to the provision where required.
Long service leave - Entitlements that arise in respect of non-current long service leave have been measured at their present values of
expected future payments. Long service leave is calculated based on assumptions and estimates of when employees will take leave and
the prevailing wage rates at the time the leave will be taken. Long service leave also requires a prediction of the number of employees
that will achieve entitlement to long service leave.
Initial Public Offering (IPO) costs - During the year ended 30 June 2020, the Company undertook an IPO to list on the ASX. Costs
incurred that are directly attributable and incremental to the issuance of new equity (net of tax) have been recognised in equity as an
offset to the value of capital raised. The Company exercised judgement in determining an allocation methodology (between equity and
expense) for costs which relate to both the issuance of new equity and other activities. The Company’s methodology was determined
with reference to the number of new shares issued in raising capital, and the nature and purpose of services rendered in incurring costs.
All other costs were taken directly to the Statement of Comprehensive Income during the year ended 30 June 2020.
Taxation - Provisions for taxation require significant judgement with respect to outcomes that are uncertain. Deferred tax assets are
recognised for deductible temporary differences and carried forward tax losses after consideration of:
•
•
•
implications of COVID-19 on current year results and future forecasts;
likelihood of availability of future profits, including stress testing of forecasts, for utilisation of deferred tax assets; and
outcome of Continuity of Ownership Testing (and where applicable, the Similar Business Test) to support the recognition of any
carried forward tax losses.
Management does not recognise deferred tax assets where utilisation is not considered probable.
Tyro-Bendigo Alliance
During the year ended 30 June 2021, the Group announced an alliance with Bendigo and Adelaide Bank Limited (Bendigo Bank) for
merchant acquiring services (Alliance). As part of the Alliance, Bendigo Bank agreed to transfer existing, and refer potential, customers to
the Group for the provision of a co-branded merchant acquiring service and receive upfront consideration and commission from existing
and newly referred Bendigo Bank business customers who use the Group's merchant acquiring services. The Group does not view
the Alliance as meeting the definition of a business under AASB 3 Business Combinations, and accordingly has applied the following
accounting policies.
The Alliance has been agreed for a ten year period. The trail commission payable on the existing customer network and future rollouts
includes a guaranteed component for the first four years. An additional variable amount will be payable based on revenue achieved.
The trail commission payable is initially measured at fair value in accordance with AASB 13 Fair Value Measurement and remeasured in
subsequent periods to reflect actual and revised estimates of future revenue.
Key assumptions in respect of estimating the valuation of the trail commission payable include:
109
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT •
•
•
discount rates derived from similar observed rates for comparable assets that are traded in the market;
the merchant churn rate; and
probability weighted forecasts considering a high, mid and low forecast estimate prepared by Management and approved by the
Board.
The associated intangible assets were recognised in accordance with AASB 138 Intangible Assets. They are carried at cost less any
accumulated amortisation and any accumulated impairment losses and will then be reviewed annually for any indicator of impairments
in accordance with AASB 136 Impairment of Assets. The useful life of the acquired intangible assets is judgmental and reviewed annually
by Management with adjustments made where deemed necessary.
Intangible assets
Customer contracts and relationships
Commission and other payables
Financial liability at amortised cost
Contingent consideration
Upfront consideration paid (exclusive of GST)
(d) Basis of consolidation
(i) Business combinations
AT TRANSACTION DATE
$000
111,762
39,800
62,962
9,000
The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets
the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a
business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process
and whether the acquired set has the ability to produce outputs.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities
and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or group of similar identifiable assets.
The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any
goodwill that arises is tested annually for impairment (see Note 1(p)). Any gain on a bargain purchase is recognised in profit or loss
immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition and subsequently changes in the fair value of the
contingent consideration are recognised in profit or loss.
If share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree’s employees
(acquiree’s awards), then all or a portion of the amount of the acquirer’s replacement awards is included in measuring the consideration
transferred in the business combination. This determination is based on the market-based measure of the replacement awards
compared with the market-based measure of the acquiree’s awards and the extent to which the replacement awards relate to pre-
combination services.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Company. The Company ‘controls’ an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the
date on which control ceases.
(iii) Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses)
arising from intra-Group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way
as unrealised gains, but only to the extent that there is no evidence of impairment.
110
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (e) Current versus non-current classification
The Group presents assets and liabilities in the Statement of Financial Position based on current and non-current classification. An asset
is current when it is:
• expected to be realised or intended to be sold or consumed in the normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the reporting period;
or:
• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
it is expected to be settled in the normal operating cycle;
it is held primarily for the purpose of trading;
it is due to be settled within twelve months after the reporting period;
•
•
•
or:
• there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not
affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and term deposits with an original maturity of three months or less
from the date of acquisition.
(g) Due from other financial institutions
Includes term deposits with maturities greater than three months from the date of acquisition, and term deposits pledged to
counterparties as collateral. These are initially measured at fair value and subsequently measured at amortised cost less allowance for
expected credit losses, using the effective interest method.
(h) Trade and other receivables
Trade receivables, which generally have 30-day terms, are recognised initially at fair value, and subsequently measured at amortised
cost using the effective interest method, less an allowance for expected credit losses (ECL). Collectability of trade receivables is
reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified.
AASB 9’s impairment requirements are based on the ECL model. This replaces the “incurred loss” approach under AASB 139. The Group
has applied the simplified approach to calculate ECL for trade receivables where a loss allowance is based on lifetime ECL at each
reporting date. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses.
The provision rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e. by customer
type). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information
that is available at the reporting date about past events, current conditions and forecasts of future economic conditions.
(i) Loans
Loans to merchants are classified and measured at fair value with changes in the fair value being recognised in the Statement of
Comprehensive Income. The loans are unsecured with an upfront (“unearned”) fee charged to the merchant. As the merchant receives
daily settlements, a percentage is taken towards loan repayments. The loan repayment includes a portion which recognises the
unearned fee in the Statement of Comprehensive Income as interest income and is disclosed together with the fair value movement
on loans. When the loan is uncollectible, it is written-off. Such write-offs of loans occur after all the necessary assessments for write-off
procedures have been completed and the amount of the loss has been determined. Loan write-offs are disclosed as lending losses in
the Statement of Comprehensive Income. Subsequent recoveries are recognised against these write-offs.
Over the reporting period, specific requests for the loans to be put on a “repayment holiday” due to hardship were assessed on a case-
by-case basis. Where appropriate, these loans may have qualified for, and were provided, a repayment holiday for an initial period of up
to three months. Further extension requests are assessed on a case-by-case basis. The agreed revised repayment schedule of these
loans is reflected in the fair value calculation.
111
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (j) Prepayments
Prepayments are recognised for amounts paid whereby goods have not transferred ownership to the Group or where services have not
yet been provided. Upon receipt of goods or the service the corresponding asset is recognised in the Statement of Financial Position or
the expense is recognised in the Statement of Comprehensive Income.
(k)
Inventories
(i) Cost and valuation
The costs of purchasing inventories comprise the purchase price, import duties and other taxes (other than those subsequently
recoverable by the Group 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 net realisable value. Impairment is assessed at least on an
annual basis. Inventories are derecognised when the rights to benefits are transferred to a third party.
(ii)
Impairment
Management makes assessments of the net realisable value of inventory at least on an annual basis. The cost of inventory may not be
recoverable where the inventory is damaged, wholly or partially obsolete, or if selling prices have declined. In accordance with AASB 102
Inventories, where the cost of inventory exceeds the net realisable value, inventory is written down to their net realisable value.
Net realisable value is an estimate, based on the most reliable evidence at the time, of the amount the inventories are expected to
realise.
(l) Financial investments
Recognition and initial measurement
The classification of financial investments at initial recognition depends on the financial asset’s contractual cash flow characteristics and
the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus transaction costs.
In order for a debt investment to be classified and measured at amortised cost or fair value through Other Comprehensive Income (OCI),
it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows.
The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Financial investments classified and measured at fair value through OCI are held within a business model with the objective of both
holding to collect contractual cash flows and selling.
Subsequent measurement
For debt investments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are
recognised in the Statement of Comprehensive Income. The remaining fair value changes are recognised in OCI. Upon derecognition,
the cumulative fair value change recognised in OCI is recycled to profit or loss.
For equity investments at fair value through OCI, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI at initial recognition. Gains and losses on these financial assets are never recycled to profit or
loss. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to classify
irrevocably its non-listed equity investments under this category.
Purchase and sale of investments are recognised on trade date - the date on which the Group becomes party to the contractual
provisions of the investment.
(m) Investment in associates
Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a
shareholding giving rise to significant but not controlling voting rights. Investments in associated companies are accounted for in the
consolidated financial statements using the equity method of accounting less impairment losses, if any. Investments in associated
companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments
issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on
associated companies represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the
identifiable net assets of the associate and is included in the carrying amount of the investments.
112
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (n) Property, plant and equipment
(i) Cost
Property, plant and equipment are measured at cost less accumulated depreciation and any impairment in value. The Group 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:
Terminals
Furniture and office equipment
Computer equipment
Leasehold improvements
2021
3 years
5 years
4 years
2020
3 years
5 years
4 years
Remaining term of lease
Remaining term of lease
The assets’ residual values, remaining useful lives and depreciation methods are reassessed and adjusted, if appropriate at each
reporting date.
(iii) Impairment
Management identify applicable impairment indicators in accordance with AASB 136 Impairment of Assets. The carrying values of plant
and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their
recoverable amount. The recoverable amount of plant and equipment is the greater of fair value less costs of disposal and its value in use.
(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 Statement of Comprehensive Income in the year the asset is derecognised.
(o) Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration.
(i) Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the
underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for
use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-
measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
(ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group
and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable
lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset.
113
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (iii)
Short term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e. those leases that have a lease
term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value
assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases
and leases of low value assets are recognised as an expense on a straight-line basis over the lease term.
(iv) Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted for on a straight-line basis over the lease term and is included in revenue in the
Statement of Comprehensive Income due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period in which they are earned.
(p)
Intangible assets and goodwill
(i)
Internally generated software
The Group continues to make significant investments in various projects to develop new products and enhance existing products’
capabilities. For certain projects, it is more probable that future economic benefits from the assets arising from the projects will flow to
the Group and their expenditure can be measured reliably with enhancements in the Group’s data governance, system and reporting.
Therefore, software development costs for those projects are recognised as intangible assets in the Statement of Financial Position in
accordance with AASB 138 Intangible Assets.
Following initial recognition of the development expenditure as an asset, the intangible asset is carried at its cost less any accumulated
amortisation and any accumulated impairment losses. Each development project will then be reviewed annually for any indicator of
impairments in accordance with AASB 136 Impairment of Assets.
Internally generated software acquired as part of the Medipass acquisition is valued using the replacement cost technique. This
technique estimates the fair value as all costs necessary to construct a similar asset of equivalent utility at prices applicable at the time
of reconstruction.
(ii) Customer contracts and relationships
The customer contracts were acquired as part of the Tyro-Bendigo Alliance (see Note 1(c) for details) and Medipass acquisition (see Note
21). They are recognised at their fair value at the date of acquisition and are subsequently amortised on a straight-line based on the
timing of projected cash flows of the contracts over their estimated useful lives.
The useful life of finite intangible assets is judgmental and reviewed annually by Management with adjustments made where deemed
necessary. The following method is used in the calculation of amortisation:
INTANGIBLE ASSET
Internally generated software
Customer contracts and relationships
AMORTISATION METHOD
Straight line
Straight line
USEFUL LIFE
Finite (3 - 5 years)
Finite (7 - 10 years)
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. Goodwill is not amortised
and is tested annually for impairment. Tyro completed the acquisition of Medipass on 31 May 2021. AASB 3 makes provision for a
measurement period of 12 months to finalise the valuation of assets acquired in a business combination. Due to the proximity of the
completion of the deal to 30 June 2021, Tyro is continuing to gather information that is relevant to the valuation of the assets, specifically
with respect to the appropriate recognition of revenue on custom software development carried out for customers and the associated
deferred revenue balances. The amounts included in Tyro’s financial statements as at 30 June 2021 in respect of net assets acquired and
goodwill represent Tyro’s provisional valuation of those assets.
In future periods, goodwill will be subject to annual impairment testing using appropriate assumptions to be determined by
management.
(q) Deferred tax asset
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date (see Note 4).
114
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (r) Deposits from customers
Deposits from customers are initially recognised at fair value. Subsequent to initial recognition, these liabilities are measured at
amortised cost. Interest expense on deposits is recognised in the Statement of Comprehensive Income using the effective interest
method.
(s) Trade and other payables
Merchant payables arise when the Group has received monies from the relevant schemes and financial institutions that have not yet
been settled with the merchant.
Payables to merchants are only recognised to the extent that a liability arises. This liability arises when the proceeds have been paid by
the schemes and financial institutions and received by the Group.
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 Group.
Commissions payable to Bendigo Bank
The trail commission payable on the existing customer network and future rollouts includes an amount guaranteed by the Group and
an additional variable amount based on revenue achieved. The trail commission payable is initially measured at fair value in accordance
with AASB 13 Fair Value Measurement and remeasured in subsequent periods to reflect actual and revised estimates of future revenue.
The key assumptions used in estimating the valuation of the trail commission payable can be found in Note 1(c).
(t) Provisions and contingencies
Provisions are recognised when the Group 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 may 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 Statement of Financial Position 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 Group 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 Group will credit or refund the amount to the cardholder and charge
back the transaction to the merchant. If the Group is unable to collect the amount from the merchant, the Group 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 from chargebacks based primarily on historical
experience and other relevant factors. A provision is recognised in the general reserve for credit losses 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.
(u) 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.
(v) General reserve for credit losses
The Group appropriates for estimated future credit losses from chargebacks, with a general reserve for credit losses. The Group
estimates the reserve by using a multiple of historical losses over a rolling 120 day period of transaction values. The general reserve for
credit losses is then allocated as a separate reserve within equity.
The Group also appropriates for estimated future credit losses from loans to ensure the Group has sufficient capital to cover credit
losses estimated to arise over the full life of the loans as required by APRA Prudential Standard APS 220 Credit Quality.
The methodology and assumptions used for estimating the general reserve for credit losses required are reviewed regularly.
115
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (w) Revenue recognition
Revenue from contracts with customers is recognised in accordance with AASB 15 which introduced a single, principle-based five step
recognition and measurement model. The five steps are:
1. identify the contract with a customer;
2. identify separate performance obligations in the contract;
3. determine the transaction price;
4. allocate the transaction price to each performance obligations identified in Step 2; and
5. recognise revenue when a performance obligation is satisfied.
The Group’s fee income from contracts with customers is derived primarily from the following sources:
• merchant service fee income is generated from merchant customers for credit, debit and charge 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 payment transactions are recognised at the time transactions are processed. Related
interchange fees, which are collected from merchants and paid to credit institutions are recognised as an expense instead of
netting-off against merchant service fee income in the Statement of Comprehensive Income; and
•
revenue from Dynamic Currency Conversion transactions generated from merchants is calculated based on the individual value of
the transactions and is recognised once the transaction has been processed.
Terminal rental income generated from operating leases with merchants is recognised progressively based on a fixed monthly rental on
terminals. There is no minimum rental period for merchants.
Interest income is recognised in the Statement of Comprehensive Income in accordance with AASB 9 using the effective interest
method. The effective interest 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.
(x) JobKeeper
The Federal Government announced a temporary wage subsidy program of $1,500 per fortnight before tax per eligible employee in
March 2020 to support businesses affected by COVID-19. This subsidy was initially offered over a six month period from 30 March 2020
until 27 September 2020. This scheme was subsequently extended to 28 March 2021. The employer entity was eligible for the subsidy
over the period if its Goods and Services Tax (GST) turnover for a test period of at least one month fell short of the entity’s GST turnover
for the corresponding period in 2019, in line with thresholds specified by the Federal Government. The Company was an eligible recipient
of JobKeeper under the initial scheme during the reporting period.
This is recognised as “Other revenue and income” in the Statement of Comprehensive Income in accordance with AASB 120 Accounting
for Government Grants and Disclosure of Government Assistance.
(y) 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 leave and other employee benefits that are expected to be settled within
one year have been measured at their nominal amounts. Employees are entitled to 20 days annual leave each year.
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. Long service leave is calculated based on assumptions and
estimates of when employees will take leave and the prevailing wage rates at the time the leave will be taken. Long service leave liability
also requires a prediction of the number of employees that will achieve entitlement to long service leave. Expected future payments are
discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currencies that match
as closely as possible to the estimated future cash outflows.
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 the reporting date is estimated to be less than the annual entitlement for sick leave.
116
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT (z) Share-based payment transactions
Share-based compensation benefits are provided to employees (including Key Management Personnel) via the Employee share
option plans, short term incentive plans and long term incentive plans, whereby employees render services in exchange for rights
over the Company’s shares, as well as other stakeholders under contractual arrangements. The cost of these equity-settled options or
transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of
any options issuance is determined 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/stakeholders 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 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. Details of the types of share-based payments and their respective
terms and vesting conditions are disclosed in Note 14.
The Company also has share-based compensation benefits in the form of rights which are tied to performance conditions, as well as
remuneration sacrifice rights. The policy treatment is consistent with that for share options via the Employee Share Option Plan.
(aa) 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
reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Comprehensive
Income. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
(ab) Goods and Services Tax
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 Statement of Financial Position. Commitments and contingencies are disclosed net of the amount of GST. Cash flows are disclosed
net of the amount of GST (unless stated otherwise) in the Statement of Cash Flows and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash
flows.
(ac) 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 reporting date.
Non-monetary assets and liabilities are translated at their historic rates of exchange at their respective transaction dates.
(ad) De-recognition of assets and liabilities
Assets and liabilities are de-recognised from the Statement of Financial Position upon sale, maturity or settlement. The Group de-
recognises scheme receivables against associated merchant payables as the risks and rewards are passed through in line with
contractual obligations.
117
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 2. REVENUE AND EXPENSES
The loss before tax expense has been arrived at after accounting for the following items:
Fees and terminal rental income
Merchant service fee
Terminal rental income
Other fee income
Other revenue and income
JobKeeper receipts
Other income
Interchange, integration and support fees
Interchange and scheme fees
Integration, support and other fees
Employee benefits expense (excluding share-based payments)
Wages, salaries and incentives
Superannuation
Other employee benefits expense
Administrative expenses
Communications, hosting and licencing costs
Terminal management and logistics
Professional services
Insurance
Travel and entertainment
Training and conferences
Other administrative expenses
Lending and non-lending losses
Lending losses
Non-lending losses
Impairment of intangible assets
Terminal incident1
1 For further information on the terminal incident see Note 1(c) and Note 17.
2021
$000
GROUP
2020
$000
205,542
180,236
21,320
1,207
17,660
3,874
228,069
201,770
4,484
644
5,128
3,867
382
4,249
(108,014)
(108,005)
(9,357)
(7,717)
(117,371)
(115,722)
(64,914)
(57,667)
(5,636)
(5,624)
(5,236)
(4,759)
(76,174)
(67,662)
(9,896)
(3,981)
(2,593)
(1,597)
(423)
(139)
(4,274)
(7,694)
(2,371)
(1,433)
(1,088)
(1,208)
(644)
(2,160)
(22,903)
(16,598)
(722)
(516)
(277)
(9,348)
(1,088)
(870)
-
-
(10,863)
(1,958)
118
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 3. SEGMENT REPORTING
(a) Description of segments and principal activities
For management purposes, the Group is organised into two operating segments, comprising Payments and Banking. Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, which is the
CEO | Managing Director. The Group operates in one geographical segment being Australia.
The corporate and other segment, which is not considered an operating segment of the Group, is used to reconcile the total segment
results back to the consolidated results. It consists of other income and costs that fall outside the day-to-day operations of the Group.
These include the Group's Head Office, all employee benefits expenses and other operating expenses, all of which are recorded below
Gross Profit.
The Group’s reportable segments under AASB 8 Operating Segments are as follows:
REPORTABLE SEGMENT
PRINCIPAL ACTIVITIES
Payments
Banking
Acquires electronic payment transactions from merchants. Revenue is primarily earned from fees charged for
processing acquired transactions. Revenue is also earned from other fee income, terminal rental income and
sales of terminal accessories. Direct expenses include scheme and interchange fees, integration, support and
other fees and cost of terminal accessories sold.
Complementary banking services to merchants. Revenue is earned from fees charged on loans to merchants.
Interest expense is incurred on merchant deposits.
(b) Revenue and gross profit by segment
2021
Revenue
Gross profit
2020
Revenue
Gross profit
PAYMENTS1
$000
BANKING2
$000
CORPORATE
AND OTHER3
$000
229,222
110,528
202,826
86,142
3,222
2,843
1,818
1,302
6,078
6,078
6,031
6,031
2021
$000
GROUP
TOTAL
$000
238,522
119,449
210,675
93,475
2020
$000
Reconciliation of gross profit to loss before tax:
Gross profit
Operating expenses (excl. depreciation and amortisation, loss on equity investments and
net interest expense)
Depreciation and amortisation
Share of loss on investment in associates
Net interest expense
IPO expenses
Loss before tax
119,449
93,475
(131,893)
(108,743)
(15,364)
(12,524)
(1,119)
(517)
(331)
-
(535)
(9,730)
(29,775)
(38,057)
1 Gross profit of the payments segment is payments revenue and income less direct expenses.
2 Gross profit of the banking segment is income from merchant lending adjusted for fair value movement on loans and interest expense on merchant deposits.
3 Gross profit of corporate and other includes income from investments and other revenue and income.
119
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 3. SEGMENT REPORTING (continued)
(c) Assets and liabilities by segment
2021
Segment assets
Segment liabilities
2020
Segment assets
Segment liabilities
4.
INCOME TAX
(a) Income tax expense:
PAYMENTS
$000
BANKING
$000
CORPORATE
AND OTHER
$000
234,848
35,955
125,326
104,525
75,481
35,459
GROUP
TOTAL
$000
396,129
215,465
48,759
37,790
177,290
263,839
2,441
50,543
21,136
74,120
Major components of income tax expense for the period ended 30 June 2021:
Current income tax
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Derecognition of DTA on temporary difference
Derecognition of previously recognised R&D tax credits & tax losses
Income tax expense in the Statement of Comprehensive Income
Amount reported directly in other comprehensive income and equity
Deferred tax related to items recognised in equity during the year
Deferred tax on capital raising costs
Deferred tax on unrealised gain on financial investment – FVOCI
Income tax (expense)/benefit reported in equity
(b) Reconciliation of income tax expense and prima facie tax:
Operating loss before tax
At the statutory income tax rate of 30%
Research and development incentive
Share-based payment remuneration
Entertainment expenses
Investment loss
Adjustment in respect to previous year
Tax effect of current year losses for which no deferred tax asset is recognised
Total income tax expense
2021
$000
-
1,883
(518)
(1,413)
(48)
-
-
(80)
(80)
GROUP
2020
$000
-
-
-
-
-
-
927
29
956
2021
$000
GROUP
2020
$000
(29,775)
(38,057)
8,932
-
11,417
70
(2,803)
(3,269)
(36)
(336)
-
(5,805)
(48)
(149)
-
(332)
(7,737)
-
120
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 4.
INCOME TAX (continued)
(c) Deferred income tax assets and liabilities
GROUP
2021
2020
STATEMENT
OF FINANCIAL
POSITION
$000
STATEMENT OF
COMPREHEN-
SIVE INCOME
$000
OTHER COMPRE-
HENSIVE INCOME
AND EQUITY
$000
ACQUIRED
IN BUSINESS
COMBINATIONS
$000
STATEMENT
OF FINANCIAL
POSITION
$000
STATEMENT OF
COMPREHEN-
SIVE INCOME
$000
OTHER COMPRE-
HENSIVE INCOME
AND EQUITY
$000
Deferred tax assets (DTA)
Fixed assets
Provisions & accruals
Other
R&D credits
Tax losses
Right-of-use assets
Prepayments
Financial investments
Total
Deferred tax liabilities (DTL)
Other Intangible Assets
Total
4,835
5,480
2,400
-
-
12,715
347
-
794
1,141
13,856
(870)
(870)
(723)
3,387
(1,448)
(274)
(1,910)
(968)
631
104
185
920
(48)
-
-
-
-
-
-
-
-
(80)
(80)
(80)
-
-
-
-
-
-
-
-
-
-
-
5,558
2,093
3,848
274
1,910
13,683
(284)
(104)
689
301
13,984
4,850
(1,974)
2,888
(6,126)
-
(362)
(284)
(99)
745
362
-
-
-
-
-
(870)
(870)
-
-
-
-
-
-
927
-
-
927
-
-
29
29
956
-
-
Deferred tax assets and liabilities relate to temporary differences, unused tax losses and credits. In addition, approximately $27,550,000
of deductible temporary differences, unused tax losses and credits have not been recognised as assets at 30 June 2021.
5. CASH AND CASH EQUIVALENTS
Deposits at call
Short term deposits
2021
$000
69,521
15,000
GROUP
2020
$000
88,761
15,000
84,521
103,761
121
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 5. CASH AND CASH EQUIVALENTS (continued)
Reconciliation of loss after tax to net cash flows used in operations
Loss for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangible assets
Share-based payments expense
Fair value (gain)/loss
Share of loss from associates
Impairment of investment in sublease
Loans written off
Net interest expense
Foreign currency (gain)/loss
Gain on disposal of property plant and equipment
Deferred tax expense
Other
Changes in assets and liabilities:
(Increase)/decrease in customer loans1
(Increase)/decrease in interest and other receivables
Increase in terminals
Increase in prepayments
Increase in term deposits held as collateral
Increase in retail deposits
Increase/(decrease) in interest and other payables
Increase/(decrease) in deferred tax balances
Increase in provisions
Net cash flow from operating activities
1 Movement in customer loan balances excludes adjustments for write offs and fair value adjustments.
6. DUE FROM OTHER FINANCIAL INSTITUTIONS
Term deposits
Deposits pledged as collateral
2021
$000
GROUP
2020
$000
(29,823)
(38,057)
15,364
12,524
277
9,342
(1,270)
1,119
842
722
517
(27)
(107)
48
104
(2,918)
(2,103)
(16,360)
(1,113)
(5,762)
24,938
5,409
998
10,846
11,043
2021
$000
5,000
14,191
19,191
-
10,896
2,342
-
-
1,088
535
310
(190)
-
65
294
8,463
(7,176)
(400)
-
23,624
(7,678)
-
1,554
8,194
GROUP
2020
$000
10,000
8,429
18,429
Includes term deposits with maturities greater than three months from the date of acquisition and deposits pledged to
counterparties as collateral. Refer to Note 20 for details of deposits pledged as collateral.
122
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 7. TRADE AND OTHER RECEIVABLES
Scheme and other receivables
Merchant acquiring fees
Interest receivable
Expected credit loss provision
2021
$000
10,108
7,033
13
(59)
GROUP
2020
$000
10,625
4,532
53
(38)
17,095
15,172
Scheme receivables are presented net of merchant payables in line with the Group's accounting policy disclosed in Note 1.
The Group’s ageing of trade and other receivables are as follows:
Group
Carrying value 2021
Carrying value 2020
8. LOANS
Current
Loans (net of unearned fees)
Non-current
Loans (net of unearned fees)
TOTAL
$000
CURRENT
$000
1-30 DAYS
$000
31-60 DAYS
$000
61-90 DAYS
$000
>90 DAYS
$000
IMPAIRMENT
$000
17,095
15,172
16,935
15,004
11
100
-
-
52
90
156
16
(59)
(38)
2021
$000
GROUP
2020
$000
13,408
9,840
1,979
15,387
2,081
11,921
Income from loans comprises interest income of $1,952,190 (2020: $4,178,986), fair value gain of $1,269,623 (2020: loss of
$2,361,098) and lending loss of $721,673 (2020: loss of $1,088,105).
9. LEASES
(a) Company as lessor – sublease arrangement
The arrangement relates to the sublease of Level 5 of the Company's registered office. It is a non-cancellable lease with a
term of up to 2 years, 6 months and 20 days ending 20 January 2022, aligned to the Company’s head-lease. The sublease
agreement does not provide the lessee with the option to extend the lease. Lease payments are subject to annual increases of
4%.
Lease income recognised in the Statement of Comprehensive Income are as follows:
(Loss)/gain on investment in sublease
Income from net investment in sublease
Total amount recognised in profit and loss
2021
$000
(842)
57
(785)
GROUP
2020
$000
147
113
260
Set out below is a maturity analysis of lease receivables, showing undiscounted lease payments to be received after the
reporting date.
123
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 9. LEASES (continued)
Within one year
After one year but not more than five years
Total undiscounted lease payments receivable
Unearned interest income
Net investment in sublease
2021
$000
-
-
-
-
-
GROUP
2020
$000
892
556
1,448
(81)
1,367
The lessee has been adversely impacted by COVID-19 during the year and has been unable to pay rent as and when it falls due.
Accordingly, Management has taken the decision to write off this amount in full during the year.
(b) Company as lessee – property lease
The property lease predominantly relates to the lease of the Company's registered office located at 155 Clarence Street,
Sydney NSW. It is a non-cancellable lease with a term of up to 7 years ending 21 January 2022.
Set out below, are the carrying amounts of the Group’s right-of-use assets and lease liabilities in the Statement of Financial
Position and the movements during the period:
As at 30 June 2019
Transition adjustments
As at 1 July 2019
De-recognition due to sublease
Additions
Depreciation expense
Interest expense
Payments
As at 30 June 2020
As at 1 July 2020
Additions
Depreciation expense
Interest expense
Payments
As at 30 June 2021
Lease liabilities – Maturity analysis
Contractual undiscounted cash flows
Within one year
After one year but not more than five years
Total undiscounted lease liabilities
RIGHT-OF-USE
ASSETS
$000
GROUP
LEASE
LIABILITIES
$000
-
9,091
9,091
(1,827)
116
(2,852)
-
-
4,528
4,528
33
(2,907)
-
-
-
11,534
11,534
-
116
-
648
(4,815)
7,483
7,483
33
-
365
(5,069)
1,654
2,812
2021
$000
2,872
-
2,872
GROUP
2020
$000
5,035
2,872
7,907
124
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 9. LEASES (continued)
The amounts recognised in the Statements of Comprehensive Income are as follows:
Depreciation expense of right-of-use assets
Interest expense on lease liabilities
Income from sub-leasing right-of-use assets
Total amount recognised in Statement of Comprehensive Income
10. FINANCIAL INVESTMENTS
Floating rate notes
Equity investment – meandu Australia Holdings Pty Ltd
Equity investments – YBF Holdings Pty Ltd and Teamsquare Pty Ltd
2021
$000
GROUP
2020
$000
(2,907)
(2,852)
(365)
57
(648)
113
(3,215)
(3,387)
2021
$000
69,068
-
-
GROUP
2020
$000
66,134
3,499
128
69,068
69,761
YBF Holdings Pty Ltd and Teamsquare Pty Ltd (YBF) is a Melbourne-based tech and innovation co-working hub that took
operational control and ownership of the Tyro Fintech Hub (co-working space) in Sydney. As part of this arrangement Tyro took
an equity stake in YBF.
The Group elected to measure the equity investments in YBF at FVOCI, resulting in no recycling of fair value changes to the
Statement of Comprehensive Income upon a de-recognition event.
During the financial year, the Group vested the right to appoint a member to the board of meandu Australia Holdings Pty Ltd
(me&u), implying significant influence. Accordingly, this investment is now accounted for as an Investment in Associate using
the equity method.
11.
INVESTMENT IN ASSOCIATES
Axis IP Pty Ltd
meandu Australia Holdings Pty Ltd
Closing balance
2021
$000
1,666
3,332
4,998
GROUP
2020
$000
-
-
-
Axis IP Pty Ltd (Paypa Plane) is a payments technology business transforming scheduled payments, in which Tyro took a 20%
shareholding in December 2020. The investment is recognised at cost using the equity method. The carrying amount of the
investment is increased or decreased by the Company’s share of Axis IP Pty Ltd’s net assets after acquisition date.
me&u is a leading hospitality in-venue food ordering and payments app in which Tyro made a 16% equity investment, providing
Tyro with the right to be the exclusive in-app payment provider.
The carrying value of the investment is increased or decreased by the Company’s share of me&u’s net assets after the date at
which this accounting approach was adopted.
The following table summarises the financial information and results of me&u and Paypa Plane. The information includes the
results of me&u since the equity accounting method was adopted and of Paypa Plane since Tyro’s investment in December
2020.
125
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 11. INVESTMENT IN ASSOCIATES (continued)
Percentage ownership interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets (100%)
Group share of net assets
Carrying amount of interest in associate1
Revenue
Profit from continuing operations
Total comprehensive income
Group's share of total comprehensive
income
Share of loss on investment recognised in year2
INVESTMENT IN MEANDU AUSTRALIA
HOLDINGS PTY LTD
INVESTMENT IN AXIS IP PTY LTD
2021
$000
16.04%
76
5,743
(48)
(2,489)
3,282
526
3,332
3,206
(5,580)
(5,580)
(895)
(895)
2020
$000
-
-
-
-
-
-
-
-
-
-
-
-
-
2021
$000
20.0%
690
637
(283)
-
1,044
209
1,666
269
(1,120)
(1,120)
(224)
(224)
2020
$000
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
The difference between the carrying value of investments and the Group's share of net assets relates to intangible assets
and goodwill not recognised on the balance sheet of me&u and Paypa Plane.
A total loss on investment of $1,119,000 has been recognised in the Statement of Comprehensive Income in the year.
12. PROPERTY, PLANT AND EQUIPMENT
Reconciliation of net carrying amounts at the beginning and end of the year for the Group is as below:
Year ended 30 June 2021
At 30 June 2020 net of accumulated
depreciation and impairment
Additions
Acquisitions through business combination
Disposals
Depreciation for the year
At 30 June 2021 net of accumulated deprecia-
tion and impairment
At 30 June 2020
Cost
TERMINALS
$000
FURNITURE
AND OFFICE
EQUIPMENT
$000
COMPUTER
EQUIPMENT
$000
LEASEHOLD
IMPROVEMENTS
$000
TOTAL
$000
12,863
799
2,060
1,544
17,266
18,266
-
(67)
24
29
-
1,122
9
-
-
-
-
19,412
38
(67)
(8,062)
(307)
(1,249)
(1,004)
(10,622)
23,000
545
1,942
540
26,027
42,543
2,708
8,758
4,817
58,826
Accumulated depreciation and impairment
(29,680)
(1,909)
(6,698)
(3,273)
(41,560)
12,863
799
2,060
1,544
17,266
Net carrying amount
At 30 June 2021
Cost
Accumulated depreciation and impairment
(36,610)
(2,226)
59,610
2,771
9,955
(8,013)
4,817
77,153
(4,277)
(51,126)
Net carrying amount
23,000
545
1,942
540
26,027
126
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 12. PROPERTY, PLANT AND EQUIPMENT (continued)
TERMINALS
$000
FURNITURE
AND OFFICE
EQUIPMENT
$000
COMPUTER
EQUIPMENT
$000
LEASEHOLD
IMPROVEMENTS
$000
TOTAL
$000
Year ended 30 June 2020
At 30 June 2019 net of accumulated depreciation and
impairment
Additions
Disposals
13,258
649
2,756
2,071
18,734
6,488
(35)
506
-
640
-
387
-
8,021
(35)
Depreciation for the year
(6,848)
(356)
(1,336)
(914)
(9,454)
At 30 June 2020 net of accumulated depreciation and
impairment
12,863
799
2,060
1,544
17,266
At 30 June 2019
Cost
36,668
2,202
8,152
4,430
51,452
Accumulated depreciation and impairment
(23,410)
(1,553)
(5,396)
(2,359)
(32,718)
Net carrying amount
At 30 June 2020
Cost
13,258
649
2,756
2,071
18,734
42,543
2,708
8,758
4,817
58,826
Accumulated depreciation and impairment
(29,680)
(1,909)
(6,698)
(3,273)
(41,560)
Net carrying amount
12,863
799
2,060
1,544
17,266
13. INTANGIBLE ASSETS AND GOODWILL
Reconciliation of net carrying amounts at the beginning and end of the year for the Group is as below:
Year ended 30 June 2021
At 30 June 2020 net of accumulated amortisation and
impairment
Additions
Acquisitions through business combinations
Impairment expense
Amortisation for the year
INTERNALLY
GENERATED
SOFTWARE
$000
CUSTOMER
CONTRACTS AND
RELATIONSHIPS
$000
GOODWILL
$000
5,170
197
3,762
5,500
(277)
(851)
111,763
2,900
-
(984)
-
-
13,687
-
-
TOTAL
$000
5,367
115,525
22,087
(277)
(1,835)
At 30 June 2021 net of accumulated amortisation and impair-
ment
13,304
113,876
13,687
140,867
At 30 June 2020
Cost
Accumulated amortisation and impairment
Net carrying amount
At 30 June 2021
Cost
Accumulated amortisation and impairment
5,350
(180)
5,170
14,613
(1,309)
250
(53)
197
-
-
-
5,600
(233)
5,367
114,912
(1,036)
13,687
-
143,212
(2,345)
Net carrying amount
13,304
113,876
13,687
140,867
127
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 13. INTANGIBLE ASSETS AND GOODWILL (continued)
Year ended 30 June 2020
At 30 June 2019 net of accumulated amortisation and impairment
Additions
Amortisation for the year
At 30 June 2020 net of accumulated amortisation and impairment
At 30 June 2019
Cost
Accumulated amortisation and impairment
Net carrying amount
At 30 June 2020
Cost
Accumulated amortisation and impairment
Net carrying amount
Impairment testing for CGUs containing goodwill
INTERNALLY
GENERATED
SOFTWARE
$000
CUSTOMER
CONTRACTS AND
RELATIONSHIPS
$000
2,503
2,832
(165)
5,170
2,518
(15)
2,503
5,350
(180)
5,170
-
250
(53)
197
-
-
-
250
(53)
197
TOTAL
$000
2,503
3,082
(218)
5,367
2,518
(15)
2,503
5,600
(233)
5,367
Tyro has used a provisional valuation of the intangible assets acquired from Medipass and has therefore not tested for
impairment for the initial reporting period. See Note 1(p) for further information.
14. SHARE BASED PAYMENTS
The Company provides benefits to employees (including Key Management Personnel (KMP) from time to time including share-
based payments as remuneration for service. Additionally, the Company provides share-based payments to other stakeholders
as part of contractual agreements.
(a) Employee Share Option Plan
The Employee Share Option Plan (ESOP) was established to grant options over ordinary shares in the Company to employees
or Directors who provide services to the Company.
Options granted pursuant to the ESOP may be exercised, in whole or part, subject to vesting terms and conditions as indicated
below:
TYPE OF OPTION
VESTING TERMS AND CONDITIONS
Monthly linear vesting schedule
Annual linear vesting schedule
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
Director with the Company during the vesting period. The options generally vest in
equal amounts each month over the vesting period.
Options vest similarly to the monthly linear vesting schedule; except they vest in
equal amounts annually over the vesting period.
Performance linear vesting schedule
Options vest in equal amounts annually over the vesting period and are also
subject to performance criteria.
All option grants and any shares issued on the exercise of those options must be held for a minimum period commencing on
the date on which the options are granted and continuing until the earlier of:
•
•
the date which is 3 years after the date on which options are granted; or
the date on which the participant ceases employment with the Company.
Other relevant terms and conditions applicable to options granted under the ESOP include:
•
the term of each option grant ranges primarily between 6 – 7 years from the date of grant or such shorter term as provided
in the ESOP or grant letter;
• each option entitles the holder to one ordinary fully paid share;
• all awards granted under the ESOP are equity-settled;
• a 2-year holding lock applies to those options with annual linear or performance linear vesting schedules. For annual linear
options, the lock period applies following the relevant vesting date, and for performance linear options the lock period
applies from exercise date. During this period the shares issued cannot be transferred, sold, encumbered or otherwise dealt
with; and
128
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 14. SHARE BASED PAYMENTS (continued)
• under the ESOP rules and subject to any requirements under law or the ASX listing rules, the Board, at its discretion, may
determine that options held by an employee or Director do not lapse on cessation of employment or Directorship and that
the relevant holder of options has additional time to exercise their options.
(b) Fair value of options under the ESOP
The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model.
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 Company’s estimated 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.
There were 5,166,415 options exercised during the period ended 30 June 2021 (2020: 6,623,341).
The weighted average remaining contractual life for share options outstanding as at 30 June 2021 was 4 years (2020: 5 years).
RANGE OF EXERCISE
PRICES
179 cents
176 cents
CONTRACTUAL LIFE VESTING CONDITIONS
NUMBER OF OUTSTANDING OPTIONS
7 years
4 year annual vesting, plus performance criteria
6,647,422
7,740,124
JUN 2021
JUN 2020
6 years or less
5 year monthly linear vesting
162 cents to 176 cents 7 years or less
No vesting in first 6 months of 5 year monthly linear
vesting period
6,830,283
7,589,967
591,495
750,000
162 cents
150 cents
37.5 cents to 149
cents
0 cents
Total
7 years or less
5 year monthly linear vesting
70,678
90,000
7 years
4 year annual vesting, plus performance criteria
5,762,443
6,154,423
7 years or less
5 year monthly linear vesting
6,749,286
11,081,212
6 years
5 year annual linear vesting
2,703,886
3,570,372
29,355,493
36,976,098
The following table illustrates the number and weighted average exercise prices (WAEP) in cents and movements of share
options during the year:
JUN 2021
NUMBER
JUN 2021 WAEP
(CENTS)
JUN 2020
NUMBER
JUN 2020 WAEP
(CENTS)
Monthly linear and annual linear vesting
Opening
Granted
Exercised
Forfeited or expired
Closing
Of which: Exercisable at the end of the year
Performance based vesting
Opening
Granted
Exercised
Forfeited or expired
Closing
23,081,551
107
30,615,768
-
(5,166,415)
(969,508)
16,945,628
12,689,820
-
74
73
119
110
1,554,294
(6,623,341)
(2,465,170)
23,081,551
14,664,292
13,894,547
166
6,154,423
-
-
-
-
7,822,597
-
(1,484,682)
171
(82,473)
12,409,865
165
13,894,547
Of which: Exercisable at the end of the year
-
-
-
Total outstanding at the end of the year
Total exercisable at the end of the year
29,355,493
12,689,820
36,976,098
14,664,292
Refer to Note 25 for outstanding share options at the end of the period that are not part of ESOP.
102
-
59
109
107
108
150
179
-
179
166
-
129
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 14. SHARE BASED PAYMENTS (continued)
(c) Performance rights, service rights, remuneration sacrifice rights and rights to shares under other
contractual arrangements
During the period, the Company granted 731,548 performance rights as part of the short term incentive (STI) arrangement and
834,316 performance rights as part of the long term incentive (LTI) plan. The following model inputs were used in the Black-
Scholes valuation model to determine the fair values:
Grant date:
Vesting period
Expiry date
Share price at grant date ($)1
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
STI RIGHTS
Jul-20
2 years
10 years following the vesting of the
rights (or 30 days following cessation of
employment, if earlier)
$3.50
0%
N/A
N/A
1
The Company considers the listed share price near grant date, when determining fair value.
LTI RIGHTS
Sep-20
3 years
Sep-23
$3.60
0%
N/A
N/A
Group
Opening
Granted
Exercised
Forfeited or expired
Closing
Exercisable at the end of the year
15. DEPOSITS
Deposits1
Term deposits
JUN 2021
NUMBER
JUN 2021 WAEP
(CENTS)
JUN 2020
NUMBER
JUN 2020 WAEP
(CENTS)
6,485,940
1,565,864
(2,031,510)
(607,744)
5,412,550
1,356,092
-
-
-
-
-
-
6,998,587
1,475,617
(1,882,647)
(105,617)
6,485,940
1,652,608
-
-
-
-
-
-
2021
$000
72,470
3,011
GROUP
2020
$000
49,691
851
75,481
50,542
1
The deposits are at call, earn a daily interest with rates that increase for every dollar held for longer than 30 days, 60 days and 90 days, and are
guaranteed by the Australian Government up to $250,000 per customer.
130
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 16. TRADE PAYABLES AND OTHER LIABILITIES
Current
Accounts payable
Accruals – scheme fees, commissions, bonuses and others
Payroll liabilities
Commissions payable to Bendigo Bank
Other liabilities – clearing suspense and other payables
Non-current
Commissions payable to Bendigo Bank
17. CURRENT AND NON-CURRENT PROVISIONS
Current
Annual leave provision
Long service leave provision
Total leave provisions
Other provisions
Balance at the beginning of the year
Provision during the year
Provision released during the year
Balance at the end of the year
Make good provision
Balance at the beginning of the year
Transfer from non-current provisions
Provision during the year
Balance at the end of the year
Total current provisions
Non-current
Long service leave provision
Make good provision
Balance at the beginning of the year
Transfer to current provisions
Provision during the year
Balance at the end of the year
Total non-current provisions
2021
$000
3,993
11,101
33
11,795
2,293
GROUP
2020
$000
665
5,576
826
-
3,265
29,215
10,332
90,478
90,478
2021
$000
4,916
376
5,292
285
9,008
(56)
9,237
-
704
149
853
-
-
-
GROUP
2020
$000
3,721
341
4,062
951
285
(951)
285
-
-
-
-
15,382
4,347
1,227
712
704
(704)
-
-
556
-
148
704
1,227
1,416
131
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT
17. CURRENT AND NON-CURRENT PROVISIONS (continued)
$9,008,000 of other provisions is a provision for remediation of the terminal outage incident in January 2021. Settlement
offers have been made to impacted customers. Compensation payments are either in discussion or being made to those
customers where they have registered. Tyro continues to encourage customers to register or contact Tyro where they may
have been impacted by the January incident.
The Make Good provision is for the costs of restoring the office space at 155 Clarence Street to its original condition at the
conclusion of the lease.
18. CONTRIBUTED EQUITY AND RESERVES
(i) Movement in ordinary shares on issue
At 1 July 2019
Shares issued as part of IPO
Share options and rights exercised
Capital raising costs (net of tax)
At 30 June 2020
At 1 July 2020
Share options and rights exercised
Shares issued in consideration for acquisition of Medipass
Equity instruments issued in consideration for acquisition of Medipass1
At 30 June 2021
NUMBER OF
SHARES
443,871,751
45,493,432
10,130,988
-
GROUP
$000
141,856
125,000
3,913
(5,006)
499,496,171
265,763
499,496,171
265,763
9,822,925
1,220,694
1,132,632
4,059
4,614
-
511,672,422
274,436
1 1,132,632 of the shares issued to Medipass shareholders have been accounted for as options and recognised through the share-based payments reserve. See
Note 21 for further details
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. All
issued share capital is full paid up.
(ii) Share-based payments reserve
Balance at the beginning of the year
Share-based payments transactions
Equity instruments issued in consideration for acquisition of Medipass
2021
$000
26,371
9,342
2,648
GROUP
2020
$000
15,475
10,896
-
Balance at the end of the year
38,361
26,371
The share-based payments reserve is used to record the value of share-based payments or benefits provided to any Directors,
employees as part of their remuneration or compensation, and share-based payments provided to other stakeholders as part of
132
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT
contractual agreements.
18. CONTRIBUTED EQUITY AND RESERVES (continued)
(iii) General reserve for credit losses
Balance at the beginning of the year
Transfer from accumulated losses:
Appropriation for chargeback losses
Appropriation for lending losses
Balance at the end of the year
2021
$000
2,103
(12)
267
GROUP
2020
$000
1,918
253
(68)
2,358
2,103
The general reserve for credit losses has been created to satisfy APRA’s prudential standards for ADIs as described in Note
1(v). The Group applies an internal methodology to estimate the credit risk of its merchant customers and the maximum losses
based upon a number of assumptions concerning the performance of merchants in relation to the Group’s credit risk grading
system and actual experience.
(iv) FVOCI reserve
Balance at the beginning of the year
Deferred tax on equity movements
Revaluations gain/(loss)
Balance at the end of the year
2021
$000
3
(80)
185
108
GROUP
2020
$000
99
-
(96)
3
Total reserves at the end of the year
40,827
28,477
(v) Accumulated losses
Balance at the beginning of the year
Loss attributable to shareholders
Transfer to general reserve for credit losses
Balance at the end of the year
2021
$000
GROUP
2020
$000
(104,521)
(66,279)
(29,823)
(38,057)
(255)
(185)
(134,599)
(104,521)
19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
The Group’s principal financial instruments include cash and cash equivalents, deposits due from other financial institutions,
trade and other receivables, loans, net investment in sublease, financial investments, deposits, lease liabilities, trade payables
and other liabilities.
(i) Risk management
The Board has responsibility for setting the Group’s strategy and the Risk Management Framework (RMF). The RMF includes the
Risk Management Strategy (RMS), the Risk Appetite Statement (RAS) and the Internal Capital Adequacy Assessment Process
(ICAAP). The RMS supports the Group in achieving its strategic priorities by clearly articulating the approach to managing
risks aligned with the material risk types that are consistent with the RAS. The CEO and Management team are responsible for
implementing the RMS, and for developing policies, controls, processes and procedures for identifying and managing risk.
Various management committees, including the Executive Risk Committee (ERC), the Pricing Committee (PriceCo) and the
Asset and Liability Management Committee (ALCO), ensure appropriate execution of the RMS is applied to the day-to-day
operations and regularly report to the Board Risk Committee (BRC).
133
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
(ii) Risk controls
Risks are identified, managed and controlled through the Risk and Control Self-Assessment (RCSA) process. The RCSA is an
assessment of key risks and controls which enable the business to understand its operational risk environment and facilitate
decision-making, prioritisation, allocation of resources and effective governance. Business risks are controlled within tolerance
levels approved by the Board through the RAS.
(iii) Internal audit
The Group has an independent and adequately resourced Internal Audit function. The Internal Audit function provides
independent assurance to the Board on the adequacy and effectiveness of the control environment and risk framework.
(iv) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables) and from its
lending and investing activities, including deposits with banks and financial institutions, foreign exchange transactions and
financial investments in floating rate notes.
The maximum exposure to credit risk is represented by the carrying amounts of the financial assets at the reporting date. The
Group’s credit risk management framework outlines the core values which govern its credit risk-taking activities and reflect the
priorities established by the Board.
The framework is used to develop 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 allows the Group to identify
changes in credit quality at the client and portfolio levels and to take corrective actions in a timely manner.
Credit losses from chargebacks
In addition, the Group is subject to the risk of credit card losses via chargebacks. The maximum period the Group is potentially
liable for such chargebacks is 120 days after the date of the transaction. The Group manages 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 Group’s policy that all merchants are subject to credit verification procedures including an assessment of their
independent credit rating, past behaviour and an overview of trading history.
As part of equity, a General Reserve for Credit Losses (GRCL) is maintained to cover losses due to uncollectible chargebacks
that have not been specifically identified. The reserve is calculated based on estimated future credit losses as described in
Note 1(v). The Group does not hold any credit derivatives or collateral to offset its credit exposure. The Group’s exposure to bad
debts from chargebacks is not significant at the reporting date.
Credit losses from loans
The Group is also subject to the risk of credit losses from its unsecured loan product and loan product operating under the
Government SME guarantee scheme. The Group manages this risk in accordance with the Board approved Lending Credit Risk
Policy. Responsibility for monitoring and management of this risk is delegated to the Chief Risk Officer (CRO). The CRO is also
responsible for ensuring the Lending Credit Risk Policy is reviewed regularly and submitted to the BRC for endorsement and
approval by the Board.
To manage the risk of credit losses, various underwriting criteria is in place before a loan can be offered. A merchant must
also have a minimum acquiring transaction history to be eligible for a loan offer, as well as providing a personal guarantee.
Loans issued under the Government SME guarantee scheme are guaranteed up to 50% of the loan balance by the Australian
Government.
The Group maintains a GRCL to also cover credit losses estimated but not certain to arise over the full life of the loans as
described in Note 1(v).
134
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
This table summarises the Group’s credit risk exposures as at reporting date:
30 JUNE 2021
STANDARD & POORS CREDIT RATING1
CASH AND CASH
EQUIVALENTS
DUE FROM OTHER
FINANCIAL
INSTITUTIONS
TRADE AND OTHER
RECEIVABLES
($000)
AAA
AA
A+
A
A-
BBB+
unrated
30 JUNE 2020
($000)
39,857
44,664
-
-
-
-
-
($000)
-
19,191
-
-
-
-
-
($000)
379
9,852
5,815
92
-
234
723
84,521
19,191
17,095
STANDARD & POORS CREDIT RATING1
CASH AND CASH
EQUIVALENTS
DUE FROM OTHER
FINANCIAL
INSTITUTIONS
TRADE AND
OTHER
RECEIVABLES
($000)
AAA
AA
A+
A
A-
BBB+
unrated
($000)
31,218
72,543
-
-
-
-
-
($000)
-
18,356
73
-
-
-
-
($000)
1,638
8,249
4,415
-
-
168
702
LOANS2
($000)
NET INVESTMENT
IN SUBLEASE
($000)
-
-
-
-
-
-
15,387
15,387
-
-
-
-
-
-
-
-
LOANS2
($000)
NET INVESTMENT
IN SUBLEASE
($000)
-
-
-
-
-
-
11,921
-
-
-
-
-
-
1,367
1,367
103,761
18,429
15,172
11,921
1
2
Long term credit rating
Includes loans issued under the Government SME guarantee scheme of $251,000.
(v) Operational risk
Operational risk is the risk that arises from inadequate or failed internal processes and systems, human error or misconduct, or
from external events. It includes, amongst other things, fraud, technology risk, model risk and outsourcing risk.
The BRC is responsible for monitoring the operational risk profile, the performance of operational risk controls, and the
development and ongoing review of operational risk policies.
(vi) Market risk
Market risk is the potential loss of value or potential reduction in expected earnings resulting from movements in interest rates
and currency exchanges rates. The Group’s balance sheet activities expose the profit and loss to earnings volatility. Ultimately,
the aim of managing market risks is to stabilise earnings. Market prices comprise four types of risk: interest rate risk, foreign
currency risk, commodity price risk and other price risk, such as equity price risk. The Group 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 Group 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 Group at this stage.
Any government securities, bank bills or other marketable instruments that the Group 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:
135
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
(i)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates. The Group has exposure to interest rate risk primarily on its variable interest-bearing cash and cash
equivalent balances, term deposits, floating rate notes, loans and variable deposits (bank accounts for businesses).
Interest rate sensitivity analysis
The following demonstrates the sensitivity to a reasonably possible change in interest rates. With all other variables held
constant, the profit is affected as follows:
An increase of 50 basis points for 12 months in the general cash rate (assuming other factors remain constant) will increase
the Group’s profit and increase equity by $563,431 (2020: $748,512). A decrease of 50 basis points in the general cash rate
will have an equal and opposite effect.
The following table shows the financial assets and liabilities on which the interest rate sensitivity analysis has been
performed.
30 JUNE 2021
Financial assets
VARIABLE INTER-
EST RATE
($'000)
< 3 MONTHS
($'000)
FIXED INTEREST
RATE 3 TO 12
MONTHS
($'000)
> 1 YEAR
($'000)
TOTAL
($'000)
Cash and cash equivalents
69,521
15,000
Other term deposits
USD term deposit
Loans
Floating rate notes
Financial liabilities
Deposits
30 JUNE 2020
Financial assets
Cash and cash equivalents
Other term deposits
USD term deposit
Loans
Floating rate notes
Financial liabilities
Deposits
(ii) Foreign currency risk
-
-
-
69,068
8,471
1,729
2,866
-
-
2,991
-
10,543
-
(72,470)
(2,961)
(50)
-
6,000
-
1,978
-
-
84,521
17,462
1,729
15,387
69,068
(75,481)
VARIABLE INTER-
EST RATE
($'000)
< 3 MONTHS
($'000)
FIXED INTEREST
RATE 3 TO 12
MONTHS
($'000)
> 1 YEAR
($'000)
TOTAL
($'000)
88,761
1,924
73
-
66,134
15,000
1,547
-
3,182
-
(49,691)
(851)
-
12,991
1,894
6,658
-
-
-
-
-
2,081
-
-
103,761
16,462
1,967
11,921
66,134
(50,542)
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The Group is not exposed to foreign currency risk in the settlement of merchant transactions as all monies received and
paid are in Australian dollars. The Group’s settlement of fees with card schemes and the purchases of terminals from
foreign suppliers are transacted in foreign currencies at the exchange rate prevailing at the transaction date. At the
reporting date the Group has some US dollar and Euro exposures.
Foreign currency sensitivity analysis
The following demonstrates the sensitivity to a reasonably possible change in the US dollar and Euro exchange rates, with
all other variables held constant.
An appreciation of 15% of the US dollar and Euro compared to the Australian dollar (assuming other factors remain
constant), will increase the Group’s profit and increase equity by $67,527 (2020: $311,776). A depreciation of 15% of the
US dollar and Euro compared to the Australian dollar will reduce the Group’s profit and reduce equity by $49,911 (2020:
$230,443).
136
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
The following table shows the financial assets and liabilities on which the foreign currency sensitivity analysis has been
performed.
USD term deposit
UnionPay deposit
Trade payables
Trade payables
(iii) Other price risk
AUD
2021
$000
1,729
-
2,106
6
USD
USD
EUR
USD
GROUP
AUD
2020
$000
1,894
73
200
-
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market conditions (other than those arising from interest rate risk or currency risk), for example from changes in equity
prices and commodity prices.
(vii)
Capital Management
The Group’s capital management objectives are to:
• maintain a sufficient level of capital above the regulatory minimum to provide a buffer against loss arising from
unanticipated events, and allow the Group to continue as a going concern; and
• ensure that capital management is closely aligned with the Group’s business and strategic objectives.
The Group manages capital adequacy according to the framework set out by the APRA Prudential Standards.
APRA determines minimum prudential capital ratios that must be held by all ADIs. Accordingly, the Group is required to
maintain a minimum prudential capital ratio on a Level 1 basis as determined by APRA.
The Board considers the Group’s strategy, financial performance objectives, and other factors relating to the efficient
management of capital in setting target ratios of capital above the regulatory required levels. These processes are formalised
within the Group’s ICAAP. The Group operates under the specific capital requirements set by APRA. The Group has satisfied
its minimum capital requirements throughout the 2021 financial year in the form of Tier 1 Capital which is the highest quality
component of capital.
137
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
Capital Adequacy
Tier 1 Capital
Common Equity Tier 1 Capital
Contributed capital
Accumulated losses & reserves
Regulatory adjustments to Common Equity Tier 1 Capital
Net deferred tax assets
Capitalised expenses
Goodwill and other intangible assets
Other adjustments
Common Equity Tier 1 Capital
Additional Tier 1 Capital
Total Tier 1 Capital
Tier 2 Capital
General reserve for credit losses1
Total Tier 2 Capital
Total Capital
Total risk weighted assets
Risk weighted capital ratios
Common Equity Tier 1
Tier 1
Total Capital ratio
2021
$000
GROUP
2020
$000
274,435
265,763
(96,127)
(78,147)
178,308
187,616
(13,856)
(13,984)
(7,800)
(5,169)
(69,234)
-
(4,999)
(3,825)
(95,889)
(22,978)
82,419
164,638
-
-
82,419
164,638
1,273
1,273
1,147
1,147
83,692
165,785
115,357
102,200
%
71
71
73
%
161
161
162
1 Standardised approach (to a maximum of 1.25% of total credit risk weighted assets).
(viii) Liquidity risk
The Group’s liquidity risk is the risk that the Group will have insufficient liquidity to meet its obligations as they fall due. This
could potentially arise as a result of mismatched cash flows.
The Group manages this risk by the Board approved liquidity framework. Responsibility for liquidity management is delegated
to the CFO and CEO. The CFO manages liquidity on a daily basis and submits regular reports to the ALCO and to the BRC. The
CFO is also responsible for monitoring and managing capital planning. The capital plan outlines triggers for additional funding
should liquidity be required. The CRO provides oversight of the business’ adherence with the liquidity risk framework and
reports to the BRC. Liquidity risk management framework models the ability to fund under both normal conditions and periods
of stress. The capital plan and liquidity management are reviewed at least annually. At the reporting date, the Board of Directors
determined that there was sufficient cash available to meet its financial liabilities and anticipated expenditure.
Maturity analysis
Amounts in the table below are based on contractual undiscounted cash flows for the remaining contractual maturities.
138
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
Financial liabilities
As at 30 June 2021
Variable rate deposits
Term deposits
Lease liabilities
< 3 MONTHS
3 TO 6
MONTHS
>6 TO 12
MONTHS
>1 TO 5 YEARS
>5 YEARS
TOTAL
CONTRACTUAL CASH FLOWS (AMOUNTS IN $’000S)
(72,470)
(3,011)
-
-
-
-
(1,286)
(1,286)
(300)
-
-
-
-
-
-
(72,470)
(3,011)
(2,872)
Commissions payable to Bendigo Bank
(2,043)
(2,058)
(7,899)
(42,350)
(63,343)
(117,693)
Trade payables and other liabilities
(27,172)
-
-
-
-
(27,172)
(105,982)
(3,344)
(8,199)
(42,350)
(63,343)
(223,218)
As at 30 June 2020
Variable rate deposits
Term deposits
Lease liabilities
(49,691)
(851)
-
-
-
-
-
-
(1,237)
(1,237)
(2,561)
(2,872)
Trade payables and other liabilities
(10,332)
-
-
-
(62,111)
(1,237)
(2,561)
(2,872)
-
-
-
-
-
(49,691)
(851)
(7,907)
(10,332)
(68,781)
Amounts falling due after greater than 5 years include variable component of commissions payable to Bendigo and Adelaide Bank under the Tyro-Bendigo
Alliance.
(ix) Fair values
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1
Level 2
The fair value is calculated using quoted prices in active markets.
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.
Quoted market price represents the fair value determined based on quoted prices in active markets as at the reporting date
without any deduction for transaction costs.
The table below shows the Group’s financial assets and financial liabilities that are measured at fair value, or where not
measured at fair value, their fair value equivalent. Management has assessed that for other financial assets and liabilities not
disclosed in the table below, that due to their short term maturity or repricing profile, the carrying amount is an approximation
of fair value.
30 JUNE 2021 ($000)
30 JUNE 2020 ($000)
FINANCIAL ASSETS
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
Floating rate notes
69,068
Loans
Equity investment
Net investment in sublease
-
-
-
69,068
-
-
-
-
-
-
69,068
66,134
15,387
15,387
-
-
-
-
-
-
-
15,387
84,455
66,134
-
-
-
-
-
-
66,134
11,921
3,627
1,367
11,921
3,627
1,367
16,915
83,049
139
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 19. FINANCIAL RISK MANAGEMENT OBJECTIVES, POLICIES AND PROCESSES
(continued)
Floating rate notes
The floating rate notes invested in by the Group have a short term repricing profile and are of high credit quality. The fair value
of these floating rate notes is obtained from an independent third-party pricing service that uses tradable prices and quotes
from active markets.
Loans
Loans are included in Level 3 due to one or more of the significant inputs used in determining the fair value being based on
unobservable inputs. To determine the fair value, an income valuation approach is used. This technique converts forecasted
cash flows to a present value amount (also known as a discounted cash flow method). Forecast cash flows are actuarially
determined using predictive models based partly on evidenced historical performance and expected repayment profiles.
The fair value model will be periodically reviewed, tested and refined as needed.
The fair value of loans requires estimation of:
•
•
the expected future cash flows;
the expected timing of receipt of those cash flows; and
• discount rates derived from similar observed rates for comparable assets that are traded in the market.
The main inputs used in measuring the fair value of loans are as follows:
loan balance - accepted principal and fee, outstanding principal and fee, and date of acceptance;
•
• annual settlement amount - forecasted total annual settlements for loan customers;
• current repayment percentage - percentage of daily settlements through the loan customers’ terminals that go towards loan
repayments;
• historical default and recovery information; and
• discount rates - market benchmarked discount rate which allows for a market level of default risk.
The unobservable pricing inputs which determine fair value are based on:
the pricing of loans including adjustments for credit risk, with the risk adjustments ranging between 35% and 37%;
•
• historical data with respect to behavioural repayment patterns – generally ranging between 3 to 12 months;
• default experience for loans deemed uncollectable and which are valued at $0; and
• an estimate for the deterioration in credit risk of merchants as a result of COVID-19.
These inputs directly affect the fair value of the loans. A sensitivity of a change of 10% in the value ascribed to credit risk
for loans to merchants that are either not trading completely, or are on repayment holidays, will have an impact of between
negative $26,738 and positive $26,738 to profit and loss.
Equity investments
At the reporting date, the Group held unlisted equity instruments in me&u, YBF and Paypa Plane and 100% of the share capital
of Medipass which was acquired on 31 May 2021. Further detail can be found of the Medipass acquistion in Note 21. The
valuations of YBF is a level 3 financial instruments with several unobservable inputs. me&u and Paypa Plane are valued using the
equity accounting method as noted in Note 11.
Net investment in sublease
The arrangement relates to the sublease of Level 5 of the Company’s registered office. It is a non-cancellable lease with a term
of up to 2 years, 6 months and 20 days ending 21 January 2022, aligned to the Company’s head-lease. The sublease agreement
does not provide the lessee with the option to extend the lease. The lessee has been adversely impacted by COVID-19 during
the year and has been unable to pay rent as and when it falls due. Accordingly, the Company has taken the decision to impair
the investment in full during the year.
Transfer between categories
There were no transfers between Level 1, Level 2 or Level 3 during the financial year.
140
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 20. COMMITMENTS AND CONTINGENCIES
(a) Commitments relating to BECS
The Group pays merchants through the Bulk Electronic Clearing System (BECS). As a result of BECS intra-day settlements
which went live in November 2013, all merchant settlements committed are processed on the same day.
Contingent liabilities arising from commitments are secured by way of standby letters of credit or bank guarantees as follows.
Contingent liabilities - secured
(i) Irrevocable standby letters of credit in favour of:
Mastercard International
Visa International
UnionPay International
(ii) Bank Guarantee in favour of:
UIR Australia (lessor of 155 Clarence Street, Sydney)
Premium Custody Services (lessor of 1.15/14-16 Lexington Drive, Bella Vista)
Bendigo and Adelaide Bank Limited – Alliance Agreement
2021
$000
GROUP
2020
$000
3,129
3,294
524
-
524
73
4,525
4,525
13
6,000
13
-
14,191
8,429
The Group has provided irrevocable standby letters of credit of $3,653,183 (2020: $3,891,000) secured through fixed charges
over term deposits with the Commonwealth Bank of Australia and Westpac Banking Corporation, to Mastercard International,
Visa International and Union Pay 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 in favour of UIR Australia is held with Westpac Banking Corporation in relation to the lease arrangement for
the office premises. The amount represents up to 9 month’s rent and includes all annual increases of 4% since 2016 until lease
maturity and is refundable on expiry of the lease agreement, subject to satisfactory vacation of the leased premises.
(b) Commitments relating to Tyro – Bendigo Bank Alliance
During the year ended 30 June 2021, the Group announced an alliance with Bendigo and Adelaide Bank Limited (Bendigo Bank)
for merchant acquiring services (Alliance). As part of the Alliance, Bendigo Bank agreed to transfer existing and refer potential
customers to the Group for the provision of a co-branded merchant acquiring service and receive upfront consideration and
commission from existing and newly referred Bendigo Bank business customers who use the Group's merchant acquiring
services.
The present value of commitments arising from the commission payable on existing customer network and future rollouts
includes an amount guaranteed by the Group and an additional variable amount based on revenue achieved as follows:
Guaranteed amount
Variable amount
Key assumptions in respect of estimating the variable amount can be found in Note 1(c).
2021
$000
39,183
63,090
102,273
GROUP
2020
$000
-
-
-
141
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 20. COMMITMENTS AND CONTINGENCIES (continued)
(c) Commitments relating to lease at 55 Market Street
On 23 June 2021, the Company entered into an agreement for a lease at 55 Market Street terminating in January 2031, with an
option to renew for a further 5 years. The annual rental charge is $7,208,085 in the first year with annual reviews of 3.25% in year
2 and 3, and of 3.5% in years 4 to 8.
On 2 July 2021 Tyro obtained a Bank Guarantee from Westpac Banking Corporation for $4,867,529 which has been provided to
the lessor.
21. ACQUISITION OF SUBSIDIARY
On 31 May 2021, the Company acquired a 100% ownership interest in Medipass, a Melbourne-based digital health payments
business.
Included in the identifiable assets and liabilities acquired at the date of acquisition of Medipass are inputs (a software platform,
customer contracts, customer relationships), production processes and an organised workforce. The Company has determined
that together the acquired inputs and processes significantly contribute to the ability to create revenue. The Company has
concluded that the acquired asset is a business.
Acquisition of Medipass adds an innovative cardless digital healthcare claiming and payment platform, that seamlessly links
practitioners, funders and patients. Medipass’ digital health payments platform will be integrated with the Company’s card-
present health solution to provide a unified health payment offering that delivers both card-present and card-not-present
transactions. The acquisition will provide the Company’s health merchants greater claiming and payment capabilities extending
beyond the Company’s private health insurer and Medicare Easyclaim options to include a range of State and Federal based
compensatory funders.
For the one-month trading in 2021, Medipass contributed reported revenue of $222,278 and a loss of $131,162 to the Group's
results.
The following summarises the major classes of consideration transferred, the recognised amounts of assets acquired, and
liabilities assumed, and the goodwill recognised as a result of the acquisitions at the acquisition date:
(a) Consideration transferred
Cash
Share capital issued (1,220,694 ordinary shares)
Equity instruments (1,132,632 ordinary shares)
Total consideration transferred
2021
$000
13,541
4,614
2,648
20,803
As part of the transaction, a limited recourse loan totalling $1,675,138 was made to Medipass option holders to allow them to
exercise their options prior to the completion of the transaction. The Tyro shares that were issued in exchange for the shares
issued on the exercise of these options are being held in escrow with a holding lock period of 1-3 years. Tyro will only have
recourse in respect of the loan to the proceeds arising from disposal of the shares.
These shares have been treated as share options in Tyro’s equity reserves. They have been valued using the Black-Sholes
method and recognised in the Share Based Payment Reserve. For further detail on how Tyro values its share options, see Note
1(c) and Note 14.
(i) Equity instruments issued
The fair value of ordinary shares issued was based on the 20 day volume weighted average share sale price of the Company at
31 May 2021 of $3.78 per share.
(b) Acquisition costs
The Company incurred acquisition-related costs of $1,136,364 on legal fees and due diligence costs. These costs have been
included in ‘administrative expenses’.
142
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 21. ACQUISITION OF SUBSIDIARY (continued)
(c)
Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired, and liabilities assumed at the date of acquisition.
Cash and cash equivalents
Trade receivables
Prepayments and other debtors
Software - Medipass platform
Customer relationships
Property, plant and equipment
Loans and borrowings
Deferred tax liabilities
Trade and other payables
Total identifiable net assets acquired
2021
$000
171
126
242
5,500
2,900
38
(113)
(870)
(878)
7,116
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
ASSETS ACQUIRED
VALUATION TECHNIQUE
DESCRIPTION
Software
Replacement cost
Estimates the Fair Value as all costs necessary to construct a
similar asset of equivalent utility at prices applicable at the time
of reconstruction.
Customer relationships Multi-excess earnings method Estimates Fair Value based on the present value of the cash flows
derived from the intangible asset adjusted for charges relating to
the supporting assets used to derive that income. This return on
assets is deducted as a contributory asset (CAC) in the DCF.
(d) Goodwill
Goodwill arising from the acquisition has been recognised as follows.
Consideration transferred
Fair value of identifiable assets
Goodwill
None of the goodwill recognised is expected to be deductible for tax purposes.
22. LIST OF SUBSIDIARIES
2021
$000
20,803
(7,116)
13,687
PRINCIPAL PLACE OF BUSINESS
OWNERSHIP INTEREST
2021
2020
Parent entity
Tyro Payments Limited
Subsidiaries
Medipass Solutions Pty Ltd
Medipass Solutions Limited
Australia
Australia
United Kingdom
Tyro Payments (Ben Alliance) Pty Ltd
Australia
100%
100%
100%
-
-
-
143
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 23. EARNINGS PER SHARE
Basic loss per share shows the loss attributable to each ordinary share. It is calculated as the net loss attributable to ordinary
shareholders divided by the weighted average number of ordinary shares in each year.
Diluted loss per share shows the loss attributable to each ordinary share if all the dilutive potential ordinary shares had been
ordinary shares. There are no discontinued operations of the Group.
Earnings
Net loss attributable to ordinary shareholders used to calculate basic and diluted earnings per
share
JUNE 2021
$000
JUNE 2020
$000
(29,823)
(38,057)
JUNE 2021
NUMBER
JUNE 2020
NUMBER
Weighted average number of ordinary shares used in calculating basic earnings per share
505,773,888 476,033,272
Weighted average number of potentially dilutive ordinary shares
Basic loss per share
Diluted loss per share
Diluted EPS is consistent with basic EPS due to the Group currently generating negative earnings.
24. AUDITOR’S REMUNERATION
Fees in respect of the role of the appointed auditor
Audit and review of the financial reports1
Fees for assurance services required by legislation to be performed by the auditor
Discretionary fees for other assurance related services
IPO related services
Other assurance and agreed-upon-procedures services
Fees for other non-assurance services
Tax compliance
Other assistance and services
531,633,132 504,695,120
JUNE 2021
CENTS
JUNE 2020
CENTS
(5.90)
(5.90)
(7.99)
(7.99)
GROUP
2020
$000
2021
$000
425
388
-
-
-
38
14
7
484
-
-
223
17
55
29
712
1
This includes fees in the capacity as the appointed auditor under APRA’s APS 310 Audit and Audit Related Matters.
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm
on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001.
The Directors are of the opinion that the services disclosed above do not compromise the external auditor’s independence for
the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the impartiality and objectivity of
the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board, including reviewing or
auditing the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an advocate
for the Group or jointly sharing economic risks and rewards.
144
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 25. RELATED PARTY DISCLOSURES
(a) Compensation of Key Management Personnel
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to the
following Key Management Personnel.
DIRECTORS
David Thodey
Robbie Cooke
Hamish Corlett
David Fite
Catherine Harris1
Aliza Knox
Fiona Pak-Poy
Paul Rickard
EXECUTIVES
Robbie Cooke
Steven Chapman
Angela Green2
Praveenesh Pala
TITLE
Non-executive Director, Chair
CEO | Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
TITLE
CEO | Managing Director
Chief Risk Officer
Chief Risk Officer
Chief Financial Officer
1 Retired as Non-executive Director on 30 June 2021.
2 Employment ceased on 10 June 2021.
Compensation of Key Management Personnel
Short term benefits
Long term benefits (long service leave)
Post-employment benefits (superannuation)
Share-based payments
Total
APPOINTED
16 November 2018
18 October 2019
18 April 2019
3 July 2018
17 December 2015
21 April 2021
4 September 2019
28 August 2009
APPOINTED
23 March 2018
11 June 2021
3 June 2019
20 October 2014
2021
$000
GROUP
2020
$000
2,458
1,708
40
74
2,355
4,927
24
73
3,781
5,586
145
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 25. RELATED PARTY DISCLOSURES (continued)
Interests held by Key Management Personnel
Share options and rights held by Key Management Personnel to purchase ordinary shares have the following expiry dates and
exercise prices.
ISSUE YEAR
EXPIRY YEAR
EXERCISE PRICE ($)
NUMBER
OUTSTANDING
NUMBER
OUTSTANDING
2021
GROUP
2020
FY13/14
FY14/15
FY15/16
FY16/17
FY17/18
FY18/19
FY18/19
FY18/19
FY18/19
FY18/19
FY19/20
FY19/20
FY20/21
FY20/21
FY20/21
FY21/22
FY22/23
FY23/24
FY23/24
FY24/25
FY24/25
FY25/26
FY28/29
FY29/30
FY26/27
No expiry date
No expiry date
FY32/33
$0.375
$0.450
$0.600
$1.490
$1.760
$0.000
$1.760
$1.500
$0.000
$0.000
$1.790
$0.000
$0.000
$0.000
-
28,169
187,634
159,401
375,000
480,953
1,818,180
2,686,131
966,666
-
61,350
281,691
221,506
207,828
500,000
526,668
1,818,180
2,741,001
1,533,333
200,000
2,540,412
2,833,852
-
552,607
234,302
93,433
-
-
During the year, 393,079 rights were granted to Key Management Personnel.
(b) Transactions with related parties – Tyro SaleCo Limited (SaleCo)
Tyro SaleCo Limited (SaleCo) was registered on 5 November 2019, for the purpose of facilitating the initial public offering (IPO)
and ASX listing of the Company. Robbie Cooke CEO | Managing Director of the Company holds 100% of the shares in SaleCo.
In total, SaleCo held 58,962,897 shares at a value of $162,147,967, representing 11.9% of the shares on issue as at completion of
the IPO. As at 30 June 2021, SaleCo no longer held any shares in the Company.
As SaleCo has now served its sole function of facilitating the sale of shares in the Company by existing shareholders into the
IPO, SaleCo was deregistered during the current financial year.
(c) Share options with related parties (not under ESOP)
In December 2010, the Company granted 7.5 million share options to related parties for providing a (now expired) loan facility to
the Company for liquidity purposes, which was drawn down and subsequently repaid. These options were not issued under the
ESOP.
As at 30 June 2021, there were no options outstanding.
Euclid Capital Partners LLC, related party of David Fite
Total
2021
NUMBER
-
-
GROUP
2020
NUMBER
2,625,000
2,625,000
26. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
In the opinion of the Directors, there have been no matters or circumstances which have arisen between 30 June 2021 and the
date of this report that have significantly affected or may significantly affect the operations of the Group, the result of those
operations or the state of affairs of the Group in subsequent financial years.
146
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT 27. PARENT ENTITY DISCLOSURES
As at, and throughout the financial year ended 30 June 2021 the parent entity of the Group was Tyro Payments Limited.
Result of parent entity
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Total equity of parent entity comprising of:
Contributed equity
Reserves
Accumulated losses
Total equity
28. CONTINGENT LIABILITIES
2021
$000
2020
$000
(29,690)
(38,057)
105
(96)
(29,585)
(38,153)
137,401
257,131
150,308
113,531
394,532
263,839
122,098
69,893
91,637
213,735
4,227
74,120
180,797
189,719
274,436
265,763
40,827
28,477
(134,466)
(104,521)
180,797
189,719
In relation to the January 2021 terminal incident and as previously noted in Tyro’s ASX Announcement on 19 January 2021, during
the reporting period, Tyro has received correspondence from a law firm advising that it is investigating a potential class action
against the Company with respect to the terminal incident. As at the reporting date and to the date of signing, no proceedings
have been served on the Company in relation to the incident.
147
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT DIRECTORS’ DECLARATION
In the Directors’ opinion:
a. the financial statements and notes set out on pages 101 to 147 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the financial year
ended on that date; and
b. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable;
c. the remuneration disclosures set out in the Directors’ Report comply with Accounting Standard AASB 124 Related Party
Disclosures and the Corporations Regulations 2001; and
d. the financial statements and notes also comply with International Financial Reporting Standards as disclosed in the financial
statements.
The Directors have been given the declarations by the CEO | Managing Director and Chief Financial Officer required by Section
295A of the Corporations Act 2001.
The declaration is made in accordance with a resolution of the Directors.
_____________________________
David Thodey AO
Chair
Sydney 26 August 2021
_____________________________
Robbie Cooke
CEO | Managing Director
148
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor’s report to the members of Tyro Payments Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Tyro Payments Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2021, the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, notes to the
financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
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Valuation of contingent consideration
Why significant
How our audit addressed the key audit matter
As detailed in Note 1(c) of the financial report,
during the financial year the Group entered into a
long-term merchant acquiring alliance with
Bendigo and Adelaide Bank Limited. The
consideration included a contingent component
based on future revenue that is recorded as a
liability. The contingent consideration is required
to be re-measured at each reporting date to
reflect the Group’s estimate of the amount of
further consideration it expects to pay.
Given the value of the liability and the judgement
involved in measuring the financial liability, this
was considered to be a key audit matter.
Our audit procedures included the following:
• Read the purchase agreements to obtain an
understanding of the key terms.
• Evaluated, with the involvement of our
valuation experts, the methodologies used by
Management and the external valuation
expert to determine the value of the
contingent consideration at reporting date,
the underlying assumptions and estimates
applied, and the mathematical accuracy of
the calculations made.
• We considered the consistency of
judgements and assumptions made with
respect to other accounting estimates and
models.
• Evaluated the qualifications, competence and
objectivity of the experts used by the Group
to value the contingent consideration and the
scope of their work.
• Assessed the adequacy of the related
disclosures within the financial report
regarding the contingent consideration.
Remediation provisions
Why significant
How our audit addressed the key audit matter
As detailed in Note 17, during the financial year,
the Group has recorded and made disclosures in
relation to matters requiring merchant
remediation in connection with a terminal outage
incident that affected some of the Group’s EFTPOS
terminal fleet held by merchants.
This was a key audit matter due to the significant
judgment required to determine a reliable estimate
of the provision.
Key areas of judgment included:
Our audit procedures included the following:
• We developed an understanding of the
Group’s processes for identifying potential
merchant-related remediation obligations.
• We held discussions with management,
reviewed Board of Directors and Board
committee minutes, reviewed
correspondence with merchants and
attended Board Audit Committee and Board
Risk Committee meetings.
• We discussed ongoing and potential legal
matters with management, including General
Counsel, and obtained external legal
confirmations.
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Page 3
Why significant
How our audit addressed the key audit matter
• The decision as to whether to recognise a
provision and/or disclose a contingent
liability, including whether sufficient
information existed to allow a provision to
be reliably measured; and
• Assumptions used to estimate the
merchant related remediation payments,
including how many merchants will claim
compensation and average compensation
amounts.
• We assessed key assumptions used to
estimate the merchant-related remediation
amounts, including a consideration of
compensation experience to date.
• Tested the mathematical accuracy of the
provision calculations made.
• For those matters where the Group
determined that a sufficiently reliable
estimate of the amount of the obligation
could be made and for which no provisions
have been recognised, we assessed the
appropriateness of this conclusion and any
related contingent liability disclosure.
• We considered the existence of any economic
benefits that would require disclosure as
contingent assets.
• We considered the adequacy of the
disclosures within the financial report related
to the provision
Recoverability of deferred tax assets
Why significant
How our audit addressed the key audit matter
The financial statements include $13.9 million in
deferred tax assets. The assessment of their
recoverability was subject to significant
judgements made by the Group in forecasting
future taxable profits and determining the
availability and expected timing of utilising the
deferred tax assets against future taxable income
in accordance with tax legislation.
The judgements involve expected business growth
which is dependent upon market and economic
conditions. They include judgements concerning
COVID-19 and the impact the pandemic may have
on the Group’s ability to earn sufficient future
taxable profits.
Accordingly, this was considered to be a key audit
matter.
Our audit procedures included the following:
• Assessed the mathematical accuracy of the
Group’s deferred tax asset utilisation model.
• Agreed the amount of unused tax benefits
carried forward as deferred tax assets to
prior period lodged income tax returns.
• Evaluated the Group’s assumptions and
estimates in relation to the likelihood of
generating sufficient future taxable income
based on most recent Board approved
forecasts, prepared by the Group, principally
by performing sensitivity analyses and
evaluating and testing the key assumptions
used to determine the amounts recognised.
• Evaluated the Group’s consideration of the
impact of COVID-19 in the forecasted cash
flows.
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Why significant
How our audit addressed the key audit matter
Disclosures relating to deferred tax assets are set
out in in Notes 1(c) and 4.
• Considered the consistency of judgements
and assumptions made with respect to other
accounting estimates and models.
• Assessed the historical accuracy of the
Group’s previous future taxable profit
forecasts by comparing to actual outcomes.
•
Involved our taxation specialists in reviewing
the Group’s assessment of their ability to
utilise carry forward tax losses in accordance
with income tax legislation.
Revenue recognition – merchant service fees
Why significant
How our audit addressed the key audit matter
As detailed in Note 2 of the financial report, the
Group generated $205.5 million in revenue from
merchant service fees for the year ended 30 June
2021.
Given the importance of revenue to the users of
the financial report, specifically as a key
performance indicator for the Group and a key
metric for senior management of the Group, this
was considered to be a key audit matter.
Our audit procedures included the following:
• Evaluated the Group’s revenue accounting
and assessed whether the Group’s
accounting policies comply with the
requirements of Australian Accounting
Standards.
• Assessed the operating effectiveness of key
controls over revenue recognition.
• For a sample of merchant service fee
revenue transactions, we obtained
supporting evidence such as customer
contracts and transaction records to support
the timing and value of revenue recognised.
• Analysed accounting entries impacting
revenue that did not arise from the system-
generated reporting of underlying
transactions.
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Page 5
IT systems and controls over financial reporting
Why significant
How our audit addressed the key audit matter
The Group’s operations and financial reporting
systems are heavily dependent on IT systems,
including automated accounting procedures and IT
dependent manual controls. The Group’s controls
over IT systems include:
• The framework of governance over IT
systems;
• Controls over program development and
changes;
• Controls over access to programs, data
and IT operations; and
• Governance over generic and privileged
user accounts.
Given the reliance on the IT systems in the
financial reporting process, we considered this to
be a key audit matter.
Our procedures included evaluating and testing the
design and operating effectiveness of certain
controls over the continued integrity of the IT
systems that are relevant to financial reporting.
We also carried out direct tests, on a sample basis, of
system functionality that was key to our audit testing
in order to assess the accuracy of certain system
calculations, the generation of certain reports and
the operation of certain system enforced access
controls.
Where we noted design or operating effectiveness
matters relating to IT system controls relevant to our
audit, we performed alternative audit procedures.
We also considered mitigating controls in order to
respond to the impact on our overall audit approach.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Group’s 2021 annual report, but does not include the financial report and
our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
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Page 6
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
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Page 7
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 64 to 97 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Tyro Payments Limited for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Michael Byrne
Partner
Sydney
26 August 2021
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021FINANCIAL REPORT TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021
157
158
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 ADDITIONAL
INFORMATION
159
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 Shareholder
Information
The shareholder information set out below is based on the information recorded in the Tyro Payments Limited share
register as at 15 August 2021.
ORDINARY SHARES
Tyro has on issue 512,821,941 fully paid ordinary shares.
VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
a. Ordinary shares – On a show of hands every member present at a meeting in person or by proxy shall have one vote
and upon a poll each share shall have one vote.
b. Options and rights – No voting rights.
SUBSTANTIAL SHAREHOLDERS
The following is a summary of the current substantial shareholders pursuant to notices lodged with the ASX in accordance
with section 671B of the Corporations Act:
NAME
Gockco Pty Ltd
DATE OF INTEREST
NUMBER OF ORDINARY SHARES1
% OF ISSUED CAPITAL2
6 Dec 2019
69,119,528
13.72%
1.
2.
As disclosed in the last notice lodged with the ASX by the substantial shareholder.
The percentage set out in the notice lodged with the ASX is based on the total issued share capital of Tyro at the date of interest.
ON MARKET BUY-BACK
There is no current on-market buy-back in respect of Tyro’s ordinary shares.
DISTRIBUTION OF SECURITIES HELD
Analysis of number of ordinary shareholders by size of holding:
RANGE
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
ORDINARY SHARES1
NUMBER OF HOLDERS
NUMBER OF SECURITIES
158
1,502
2,044
5,564
5,860
15,128
442,212,954
38,034,767
15,228,894
14,424,776
2,920,550
512,821,941
1.
Ordinary shares include shares offered to employees under the Company’s incentive arrangements.
There were no holders of less than a marketable parcel of ordinary shares.
160
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021SHAREHOLDER INFORMATION TOP 20 LARGEST SHAREHOLDERS
The names of the 20 largest quoted equity security holders as they appear on the Tyro share register are listed below:
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CBC CO PTY LIMITED
NATIONAL NOMINEES LIMITED
MS DANITA RAE LOWES
INVIA CUSTODIAN PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
CITICORP NOMINEES PTY LIMITED
HANS-JOSEF JOST STOLLMANN
BNP PARIBAS NOMINEES PTY LTD
PACIFIC CUSTODIANS PTY LIMITED TYR EMP SUB REGISTER
JASGO NOMINEES PTY LTD
JH 7 PROPERTIES PTY LTD
SOPHIA-KONSTANTINA FIONA STOLLMANN
DROP KNEE INVESTMENTS PTY LTD
SINALUNGA PTY LTD
EUCLID CAPITAL PARTNERS LLC
18 MR KERRY CHISHOLM DART ROXBURGH
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20
AUSTRALIAN DIRECT INVESTMENTS PTY LIMITED
TOTAL
ORDINARY SHARES
NUMBER OF
SHARES
% OF TOTAL OF
SHARES
84,135,471
79,381,160
66,396,843
23,353,919
19,528,582
18,500,000
17,587,191
14,307,986
13,811,154
10,354,552
5,428,736
5,060,726
3,272,728
3,261,237
2,868,174
2,482,978
2,425,000
2,120,540
2,053,596
2,027,055
378,357,628
16.41
15.48
12.95
4.55
3.81
3.61
3.43
2.79
2.69
2.02
1.06
0.99
0.64
0.64
0.56
0.48
0.47
0.41
0.4
0.4
73.79
DOMICILE OF ORDINARY SHAREHOLDERS1
DOMICILE
NUMBER OF HOLDERS
% HOLDERS
NUMBER OF SHARES
% OF SHARES
Australian Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia
Overseas
Total
1
As at 31 July 2021
216
7,433
54
2,044
921
147
3,448
856
114
15,233
1.40
48.80
0.35
13.42
6.05
0.97
22.64
5.62
0.75
667,656
406,645,510
164,289
12,100,920
6,628,169
501,997
78,012,707
6,705,587
1,089,381
0.13
79.34
0.03
2.36
1.29
0.10
15.22
1.31
0.22
100.00
512,516,216
100.00
161
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021SHAREHOLDER INFORMATION I
N
O
T
A
M
R
O
F
N
I
R
E
D
L
O
H
E
R
A
H
S
UNQUOTED EQUITY SECURITIES
Performance rights in respect of ordinary shares issued under the Tyro STI Rights Plan, the Tyro
Remuneration Sacrifice Rights Plan and the Liquidity Event Performance Rights Plan
NUMBER ON ISSUE
3,157,067
Options in respect of ordinary shares issued under the Tyro Options Plans
28,479,769
GO ONLINE TO MANAGE YOUR SHAREHOLDING
Online share registry facility
Tyro offers shareholders the use of an online share registry facility through www.linkmarketservices.com.au or https://
investorcentre.linkmarketservices.com.au/ to conduct standard shareholding enquiries and transactions, including:
lodge or update banking details;
• update registered address;
•
• notify Tax File Number / Australian Business Number;
• check current and previous shareholding balances; and
• appoint a proxy to vote at the Annual General Meeting.
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021
162
162
Corporate
Directory
DIRECTORS
David Thodey AO - Chair of the Board
Robbie Cooke – CEO | Managing Director
Hamish Corlett – Non-executive Director
David Fite – Non-executive Director
Aliza Knox – Non-executive Director
Fiona Pak-Poy – Non-executive Director & Chair of People
Committee
Paul Rickard – Non-executive Director & Chair of Audit
Committee and Risk Committee
REGISTERED AND PRINCIPAL
ADMINISTRATIVE OFFICE IN
AUSTRALIA
Tyro Payments Limited
1/155 Clarence Street, Sydney, NSW, 2000, Australia
Telephone: 1300 966 639
ABN: 49 103 575 042
WEBSITE ADDRESS
www.tyro.com
https://investors.tyro.com/investor-centre/
SPECIAL COUNSEL AND COMPANY
SECRETARY
Jairan Amigh
email: jamigh@tyro.com
INVESTOR RELATIONS
Giovanni Rizzo
email: grizzo@tyro.com
MEDIA
Monica Appleby
email: mappleby@tyro.com
AUDITOR
E&Y Australia
200 George Street
Sydney, NSW, 2000, Australia
SHARE REGISTRY
Link Market Services Pty Limited
Level 12, 680 George Street
Sydney, NSW, 2000, Australia
AUSTRALIAN SECURITIES
EXCHANGE (ASX) LISTING
Tyro Payments Limited shares are listed on the ASX under
the code TYR.
email: registrars@linkmarketservices.com.au
Telephone within Australia 1300 554 474
Telephone outside Australia +61 1300 554 474
Fax +61 2 9287 0303
DIRECTOR PROFILES
Refer to profiles on pages 40 to 43.
EXECUTIVE LEADERSHIP TEAM
Refer to profiles on pages 44 to 47.
To maintain or update your details online and enjoy full
access to all your holdings and other valuable information,
simply visit https://investorcentre.linkmarketservices.
com.au.
TYRO ASX ANNOUNCEMENTS
Details of all announcements released by Tyro Payments
Limited can be found on our Investors page at https://
investors.tyro.com/investor-centre/
163
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021CORPORATE DIRECTORY 164
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 165
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2021 www.tyro.com