Annual
Report
2023
Tyro Payments Limited ABN 49 103 575 042
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023APPENDIX 4E Appendix 4E
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Name of Entity
ABN
Reporting period
Previous period
Tyro Payments Limited
49 103 575 042
For the year ended 30 June 2023
For the year ended 30 June 2022
Results for Announcement to the Market
Statutory Results Summary
KEY INFORMATION
CHANGE FROM YEAR ENDED 30 JUNE
%
2023
$’000
2022
$’000
Transaction value1
24.6% to
42,601,263
from 34,197,453
Revenue from ordinary activities (normalised)2
33.6% to
435,802
from
326,143
Gross profit (normalised)3
30.1% to
193,205
from
148,503
EBITDA4
296.5% to
42,299
from
10,667
Profit/(Loss) before tax (normalised)5
Profit/(Loss) before tax (statutory)
Profit/(Loss) after tax (statutory) attributable to the
ordinary equity holders of Tyro Payments Limited
Large
Large
Large
to
to
to
4,478
from
(16,061)
2,461
from
(29,617)
6,013
from
(29,617)
Net tangible asset backing
30 JUNE 2023
30 JUNE 2022
$
$
Net tangible assets per share
$0.01
($0.03)
Net tangible assets are calculated by deducting both the Bendigo intangible assets of $88.5 million, right-
of-use assets of $26.3 million and deferred tax assets of $17.1 million from net assets, while including the
associated commission payable to Bendigo, lease payable and deferred tax liability in total liabilities.
ASX Listing Rules require the liabilities funding these assets to be deducted from Net Tangible Assets,
however, does not allow the recognition of these intangible assets, resulting in the 1 cent net tangible
asset per share in June 2023 and negative 3 cents per share in June 2022.
1.
2.
Transaction value is a non-IFRS financial measure and is unaudited. Transaction value represents the total value of merchant sales that are
processed through the Tyro payments platform and does not represent revenue in accordance with Australian Accounting Standards.
Statutory revenue is adjusted for the recognition of the me&u investment as a financial asset after Tyro’s ownership reduced in the period with
the impact of the initial recognition as a financial asset taken to profit or loss.
3. Normalised gross profit is adjusted for Bendigo support fees associated with transition of Bendigo merchants to the Tyro platform and the
4.
Bendigo gross profit share not deducted from statutory gross profit but deducted to calculate normalised gross profit.
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense,
share of losses from associates, the non-cash accounting impact of the Bendigo Alliance, expenses associated with the terminal connectivity
issue and other one-off costs.
5. Normalised net loss before tax excludes the non-cash accounting impact of the Bendigo Alliance, expenses associated with the terminal
connectivity issue and other one-off costs.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023APPENDIX 4E
Dividends
No dividends were declared or paid and are not proposed to be paid in respect of the year ended 30 June 2023.
Details of interests in associate entities
Changes in associate entities during the reporting period.
Axis IP Pty Ltd1
OWNERSHIP INTEREST AT
OWNERSHIP INTEREST AT
DATE ACQUIRED
30 JUNE 2023
30 JUNE 2022
%
11.0%
%
17.1%
2 December 2020
1.
In June 2022, the Group’s interest in Axis IP Pty Ltd (Paypa Plane) decreased to 17.1%, in December 2022 it further decreased to 11.9% and in February
2023 it decreased to 11.0% following equity raises by Paypa Plane that the Group did not participate in.
In October 2022, Tyro’s investment in meandu Australia Holdings Pty Ltd (me&u) reduced from 14.4% to 4.9%
after me&u conducted an additional equity raising round in which Tyro did not participate. In accordance
with AASB 9 Financial Instruments, Tyro’s investment in me&u is now being held as a financial asset. The
impact of the initial recognition as a financial asset is taken to the Statement of Comprehensive Income.
The subsequent changes in the fair value of the financial investment in me&u will be recognised in Other
Comprehensive Income.
Compliance Statement
For additional Appendix 4E disclosure requirements refer to the Financial Report contained in Tyro Payments
Limited’s 2023 Annual Report. This preliminary final report is based on, and should be read in conjunction
with, the attached Directors’ Report and audited Financial Report. The audit report is included in the 2023
Annual Report.
4
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023APPENDIX 4E SUMMARY OF REPORTING SUITE
20-YEAR HISTORY OF TYRO
KEY HIGHLIGHTS
CHAIR’S LETTER TO SHAREHOLDERS
CEO REPORT
OPERATING AND FINANCIAL REVIEW
Financial Performance
DIRECTORS’ REPORT
REMUNERATION REPORT
Letter from the Chair of the People Committee
Audited Remuneration Report
Auditor’s Independence Declaration
PROFILES
Board of Directors
Executive Leadership Team
5-YEAR TRACK RECORD
FINANCIAL REPORT
Directors’ Declaration
Independent audit report to the members of Tyro Payments Limited
OTHER INFORMATION
Shareholder Information
Corporate Directory
6
10
12
14
19
25
26
45
53
54
58
88
90
91
95
99
101
148
149
157
158
161
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CONTENTS Summary of
Reporting Suite
Acknowledgment of Country
Tyro Payments Limited acknowledges the Traditional Custodians of Country throughout Australia
and recognises their continuing connection to land, waters and communities. We pay our respect
to Aboriginal and Torres Strait Islander cultures, and to Elders past and present.
Reporting approach
We are pleased to present our 2023 annual reporting suite to our Shareholders and other
stakeholders, which has been prepared with reference to integrated reporting frameworks.
This reporting suite provides a consolidated review of our financial, economic, social and
environmental performance on matters material to our strategy and our ability to create and
sustain value into the future.
2023 annual reporting suite
Our 2023 Annual Report should be read in conjunction with the other reports that comprise our
2023 annual reporting suite. These are available at Tyro’s Investor Centre.
Sustainability Report
https://investors.tyro.com/investor-centre/?page=sustainability
Media Release
https://investors.tyro.com/investor-centre/?page=results-centre
Corporate Governance Statement
https://investors.tyro.com/investor-centre/?page=corporate-governance
Investor Presentation
https://investors.tyro.com/investor-centre/?page=results-centre
2023 Financial Report
The Financial Report and Notes set out on pages 101 to 147 are prepared in accordance with
the Corporations Act 2001, including complying with Australian Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements. The
remuneration disclosures set out in the Directors’ Report comply with Accounting Standard AASB
124 Related Party Disclosures and the Corporations Regulations 2001 and the financial statements
and notes also comply with International Financial Reporting Standards (IFRS) as disclosed in the
Financial Report.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Scope and boundaries
The contents of this report relate to Tyro Payments
Limited (Tyro or the Company) and its subsidiaries
(the Group) for the 2023 financial year. This report
covers the Group’s performance for the year ended
30 June 2023, compared to the prior year ended
30 June 2022 and the matters included address
material issues for the Group. The process Tyro
utilised in determining and applying materiality
is included in the Notes to the Financial Report.
References to H1 FY23, refer to the six months
ended 31 December 2022. References to H2 FY23,
refer to the six months ended 30 June 2023.
Some parts of this Annual Report include
information regarding Tyro’s strategy and include
forward looking statements about Tyro and the
environment in which it operates that involve risks
and uncertainties. Actual results and the timing
of certain events may differ materially from future
results expressed or implied by the forward-looking
statements contained in this report.
All amounts contained in this report are stated in
Australian dollars (AUD) except where indicated.
Non-IFRS measures such as Earnings before
Interest, Depreciation and Amortisation (EBITDA)
have been included in this report as Tyro believes
they provide useful information to stakeholders to
assist in understanding the Group’s performance.
Non-IFRS measures should not be viewed in
isolation or considered as substitutes for measures
reported in accordance with Australian Accounting
Standards and IFRS.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023SUMMARY OF REPORTING SUITE
8
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 “FY23 was the
opportune time to
evolve Tyro’s way
of doing business”
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023KEY HIGHLIGHTS 20-year
history of Tyro
# Merchants
at 30 June
$ Transaction Value
at 30 June
2006
# 0
$ $0
First transaction in
production made.
2009
# 1,431
$ $511m
First to launch integrated
Medicare Easyclaim
rebates on a terminal.
2011
# 4,520
$ $2.0b
Launched integrated
mobile terminal
payment solution.
2003
# 0
$ $0
Founded as
MoneySwitch with a
vision to be the most
efficient acquirer of
electronic payments in
Australia.
2005
# 0
$ $0
First technology company
to obtain an Australian
specialist credit card
institution licence.
2007
# 145
$ $6m
Launched an
internet-based or
‘cloud’ integrated
payments solution.
2010
# 2,991
$ $1.3b
Launched non-
stop ‘live-live
acquiring.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Tyro marked its 20th birthday in February 2023,
celebrating its fintech roots, technology vision for the
future, and over $175 billion in transactions processed
since being founded. For 20 years, Tyro has helped
thousands of Australian businesses grow and thrive
and as of today, we have over 68,500 merchants.
Founded in 2003 by entrepreneurs Paul Wood, Peter
Haig, and Andrew Rothwell, Tyro has a track record
of innovation, creating purpose-built solutions, and
being first to market – including the first technology
company to receive an Australian specialist credit
card institution licence in 2005.
On becoming a public company in 2019, Tyro had the
largest successful IPO by market capitalisation on
the ASX that year. Tyro has grown to 600 employees
across Australia, approximately half of whom are in
technology roles.
Tyro is Australia’s largest EFTPOS provider outside the
big four, offering streamlined business lending and
banking products and other value-adding business
products.
2016
# 15,565
$ $8.6b
Completed the
development of and
soft launched the Tyro
Business Loan, following
the launch of the Tyro
Bank Account in 2015.
2019
# 29,031
$ $17.5b
Rebrand reflecting
expansion beyond
payments into
complimentary value-
adding offerings.
2021
# 58,186
$ $25.5b
Partnered with
Australia’s fifth biggest
retail bank, Bendigo
Bank, to create a
long-term merchant
acquiring alliance.
2023
# 68,665
$ $42.6b
Launch of industry
leading payments
products including Tyro
Pro and Tyro BYO
Achieving positive free
cash flow and record
EBITDA of $42.3 million
2015
# 13,032
$ $6.8b
Became the first new
domestic banking
licensee in over a
decade and raised
$100m in equity.
2018
# 23,245
$ $13.4b
First Australian
bank to launch
least-cost routing
and an integrated
Alipay solution.
2020
# 32,176
$ $20.1b
Australia’s
largest listing
on ASX
by market
capitilisation.
2022
# 63,770
$ $34.2b
Launch of the Tyro Go
reader + Merchant Loan
Originations exceeding
$99 million for the first
time in the history of Tyro.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 202320-YEAR HISTORY OF TYRO Key Highlights
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Transaction Value
EBITDA
$42.6
B I L L I O N
25% Growth year-on-year
$42.3
M I L L I O N
297% Growth year-on-year
Gross Profit
$193.2
M I L L I O N
30% Growth year-on-year
Loan Originations
$149.7
M I L L I O N
51% Growth year-on-year
EBITDA
Margin
%
9
.
1
2
15 Points up
year-on-year
Free Cash Flow
$5.7 M I L L I O N
First ever year of positive free cash flow
since listing on the ASX
Statutory Net Profit after Tax
$6.0 M I L L I O N
$35.6 million improvement over FY22
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Launch of
Tyro Go
Launch of
Tyro Pro
Launch of
Tyro BYO
Digital
Onboarding
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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Merchant Numbers
68,665
14% Growth year-on-year in
Tyro Core merchant base
Record new Applications
Activated Bank Accounts
17,168
16% Growth year-on-year
28,004
6,134 in FY22
Transaction Value Churn
9.3%
Up 10 basis points
on FY22
Delivering Our Plan to
Merchants
• Enhanced Product Portfolio
• Pricing Optimisation
• Operating Efficiency
Our Team
Headcount
123
76
160
288
30 June 21
616
30 June 22
725
30 June 23
647
Product Development & Tech
Sales and Marketing
Customer Delivery
General and Admin
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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Chair’s
Letter to
Shareholders
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 r
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It is with great pleasure that I write to you as the new Chair of
Tyro. After close to four years as a Non-executive Director and
two years as Chair of the People Committee, it was an honour to
succeed David Thodey and be appointed as Chair in March this
year. In doing so I accepted the challenge of leading the Tyro
Board and entire Tyro team in our ambition towards becoming
the leading specialist payments solutions provider for Australian
businesses. Our goal is to assist our merchants to thrive by
being more effective and efficient in managing their digital
payments and commerce needs.
“FY23 was the opportune time to
evolve Tyro’s way of doing business”
A transformative year
Tyro celebrated its 20th anniversary in February 2023
celebrating our roots as one of Australia’s first true fintechs.
In these 20 years we have processed over $175 billion in
total transactions and currently help over 68,500 Australian
businesses grow through the provision of innovative payments
and cash management products and leading Australian based
customer service. In order to continue to grow and develop, as
we have in the past 20 years, we made a number of significant
changes in FY23. After our successful listing on the ASX in
December 2019, navigating through the challenges of Covid
and now dealing with the high interest rate environment that
all Australians face and the many implications that has on
merchants and in turn their customers, FY23 was the opportune
time to evolve Tyro’s way of doing business.
This started with the transformation of our management
team. In October 2022 we appointed Jon Davey as CEO. Jon
joined Tyro following our acquisition of Medipass Solutions in
May 2021 and he has refreshed our leadership team with the
recruitment of a new Chief Technology Officer, a new Chief
Product Officer, a new Chief Growth Officer, and a new leader of
our Health business. Jon has also brought a renewed energy and
determination to his role. He and the entire Tyro team have a
single-minded focus to deliver on our strategy of becoming the
leading specialist payments provider for Australian businesses.
15
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CHAIR’S LETTER TO SHAREHOLDERS
Soon after being appointed CEO, Jon and his
team focused on core foundational priorities that
needed to be put in place such as the delivery
of new innovative products, a new operating
model and cost base to drive efficiency while
further developing a culture of high performance.
Importantly, the team also worked on optimising
our pricing plans to more profitably compete in the
payments market.
The results achieved in FY23 speak for themselves.
Tyro generated record transaction value of $42.6
billion from over 68,500 merchants, record gross
profit of $193.2 million, record EBITDA of $42.3
million and a statutory net profit after tax of $6.0
million together with positive free cash flow of
$5.7 million. It is important to note that these
very strong results in FY23 were delivered during
a 10-month period of significant uncertainty
and disruption created by the interest from third
parties in a possible change of control transaction.
Notwithstanding this significant disruption, focused
execution of key foundational strategies and the
resulting product delivery by our team, enabled
us to deliver on our guidance which was upgraded
three times through the year.
Over the past year we have created a strong
foundation for future growth and profitability - we
have the right team, the right culture and most
importantly the passion to deliver on our future
strategy continuing with the innovation that has
been delivered over the past 20 years and with
a renewed focus on capital management and
profitability to deliver superior shareholder returns.
The Board and management team is excited
by our prospects and has been assessing our
strategic direction to ensure we remain relevant,
competitive and innovative in the increasingly
changing payments landscape we operate in.
Jon will elaborate in further detail in his report the
steps we are taking to better position Tyro for our
future success.
A renewed Board
Together with renewing our management team, our
Board which has been renewed over the last three
years, has the necessary depth of experience in
payments, technology, banking, risk management,
customer excellence, governance, M&A and
strategy to take a rejuvenated Tyro into its next
phase of growth.
I am pleased to lead our Board that is now one of
the most diverse of all ASX-listed companies with
67% female representation. Diversity in experience,
thought and gender genuinely helps deliver the
robust governance that has, and continues to,
serve us well.
Our path to a
sustainable future
2023 also saw Tyro make significant progress
towards minimising our environmental footprint
and building on our foundations for a sustainable
business model. This work will not only benefit
Tyro but also our community and merchants in the
years ahead.
A few of the key strides we made in the year were
to be accredited by Climate Active as being a Net
Zero organisation for the first time in Tyro’s history.
We have also invested in our sustainability program
to drive strategic projects that will assist our SME
merchants to become more sustainable through
education tools, data management tools and
partnerships as well as offering a service to their
customers to contribute directly to good causes
through their Tyro payments terminal. A further
key strategic initiative that we will be driving is to
offer dedicated payments services to charitable
organisations that assist them in their fundraising
activities through adopting payments in the
digital economy and being relieved of traditional
merchant fees enabling them to maximise their
for-purpose goals.
We are only at the start of this journey, and while
our initiatives will benefit our merchants and
the planet, our investments in our sustainability
initiatives are also designed to increase shareholder
return. More information about our sustainability
practices can be found in our 2023 Sustainability
Report on our investor website.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Conclusion
Ultimately Tyro’s success comes down to the innovative
and passionate people that work at Tyro and continue to
believe in the vision Tyro was started with over 20 years
ago. It is an honour to lead such an amazing team of
people and with the right building blocks in place, I look
forward to a productive and successful FY24 for all our
stakeholders, not-withstanding there are some obvious
uncertain economic headwinds which will affect us all.
On behalf of the Board, I would like to thank our
shareholders for their support in FY23, particularly
over the 10-month period in which we were involved
with the possible change of control transaction. Your
engagement and input over this past year has been
greatly appreciated and I thank you for your support.
Finally, I would also like to thank the whole Board for their
incredible support, skill and hard work, demonstrated with
unwavering commitment to serving our shareholders at
all times through what was an intense year.
I look forward to seeing everybody at our 2023 Annual
General Meeting to be held on 15 November 2023.
Yours sincerely,
Fiona Pak-Poy
CHAIR OF THE BOARD
29 August 2023
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CHAIR’S LETTER TO SHAREHOLDERS 18
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 CEO
Report
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CEO REPORT r
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It is a great pleasure to present our first full year results since my
appointment as CEO. Tyro is a great company, one of Australia’s first
fintechs. Our founders created the business because they believed
Australians deserved better payment acceptance solutions, and this
purpose remains core to who we are today. We are proud to have been
first to market with Point of Sale (POS) integrations, same day merchant
settlement, and the implementation of least cost routing (LCR). Over the
20 years since we were founded, Tyro has had a reputation for providing
customer centric SME solutions and these solutions continue to position
the business strongly. It was a thrill therefore to have been appointed CEO
last October.
More recently however, while our growth has outperformed the market,
we have been viewed as a traditional payment provider, more akin to
a big bank than a fast-moving fintech. The challenge put to me by the
Board is to regain our mantle as Australia’s leading payments innovator; a
challenge I have enthusiastically accepted.
I have loved my first 11 months as CEO; it has been action-packed and we
have made strong progress, laying the foundations for a new era at Tyro.
I started my role in the shadow of a possible change of control transaction
with our first non-binding offer received last September. Since then, we
engaged in due diligence with several parties over nearly 10 months.
It was a disruptive time for the business; however, we managed the
demands with a small team and focused the core team on key strategic
priorities and day to day management.
Our FY23 results highlights:
1. We are delivering against our plan.
We have made strong progress against our three key strategic
priorities, enhancing our product portfolio, pricing optimisation
and operating efficiency. New products and digital customer
experiences have been launched, pricing optimisation activities are
underway, and delivering margin improvements, and committed
cost reduction initiatives have been completed.
2. We are growing sustainably.
The implementation of our cost reduction program, together with
an ongoing focus on cost management, has improved efficiency
and resulted in a strong uplift in EBITDA margin. FY24 is expected to
see further improvements as we continue to focus on leaner, more
disciplined operations.
3. The core business is performing well.
The core Tyro business has performed well. Growth has been strong,
and we have seen increased diversification in the mix of industries
we support.
2020
FY23 results update
We are pleased with our financial results for the year.
We processed $42.6 billion in transaction value which
represents growth of 24.6% on the prior year, almost
matching our 5-year annual growth rate of 26.1%.
Our merchant base grew by 7.7%. Excluding Bendigo,
the core Tyro customer base grew by 14.3%, however
our Bendigo merchant base decreased by 9.9%
following completion of the transition of merchants
from the Bendigo platform.
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68,665
15,676
63,770
17,394
52,989
46,376
58,186
18,490
39,696
32,176
29,031
23,245
FY18
FY19
FY20
FY21
FY22
FY23
Tyro Merchants
Bendigo Alliance Merchants
We processed 17,168 new merchant applications
(Tyro core 15,466 and Bendigo Bank powered by
Tyro 1,702). Across our industry verticals, Tyro Health
generated 33% more applications than in the prior
year, Hospitality 3%, and Retail applications declined
slightly by 4%. The emerging Services vertical
generated 4,790 applications, 42% higher than FY22.
We earned normalised gross profit of $193.2 million
for the year; this was 30.1% higher than last year.
Our focus on cost reduction contributed to record
EBITDA of $42.3 million, up 296.5% on the prior year.
We also achieved $5.7 million of free cash flow; our
first positive result as a publicly listed company.
Chart 1: Summary of financial results
Transaction Value
25%
34%
Gross Profit
$193.2m
26%
$42.6b
15%
31%
$34.2b
$25.5b
$20.1b
$17.5b
$13.4b
$148.5m
$119.7m
$93.5m
$83.3m
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
EBITDA
$42.3m
Free Cash Flow (before banking balances)
$14.2m
$10.7m
($4.4m)
($8.6m)
$5.7m
($17.8m)
($36.2m)
($34.1m)
($44.1m)
FY19
FY20
FY21
FY22
FY23
FY19
FY20
FY21
FY22
FY23
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CEO REPORT
Strategic priorities
Our results were underpinned by the progress we
have made in enhancing our product portfolio,
pricing optimisation and through operating
efficiency.
Enhancing our product portfolio
As demand for acceptance of digital payments has
grown, merchant needs for cost effective, flexible
payment acceptance products have increased.
Our Tyro Go card reader and the Tyro BYO Tap to
Pay on iPhone solutions meet this need. The Tyro
Go card reader is a portable device that connects
via Bluetooth to a merchant’s smart phone. In the
10 months since launch we have seen existing
merchants use the solution as a queue buster and
as a way of accepting payments while on the move,
and we have seen take-up by new merchants in both
existing and new industry verticals as they look for
solutions that supplement a terminal or provide a
more flexible terminal alternative.
Tyro BYO for iOS was launched at the start of May
in partnership with Apple’s Australian launch of Tap
to Pay on iPhone. Tap to Pay on iPhone is a simple
and secure way for merchants to accept payments
using their iPhone. A first-to-market iOS payment
acceptance solution, Tyro BYO is quick to set up with
existing merchants simply needing to download the
Tyro BYO App and login to start accepting payments.
New merchants can go through digital onboarding
and be ready to accept payments in about 10
minutes. The move to hardware agnostic payment
solutions is a trend that we believe will continue and
our learnings will position us strongly.
We launched our Tyro Pro terminal in November
2022. The large-screen Android terminal is a new
generation device that provides opportunities to
develop software-based product features specific
to the verticals in which we operate, and the
merchants that use our solutions. These solutions
offer merchants the opportunity to engage with
their customers through new payment related
experiences at the point of sale.
Pricing optimisation
Having identified opportunities to improve margin
through smarter pricing and better merchant pricing
solutions, we have made good progress on several
initiatives.
The first relates to increasing the take-up of our
Least Cost Routing (LCR) solution, Tap & Save. We
started the year with 31% of merchants utilising LCR
functionality. This has increased to 54%. LCR routes
certain debit transactions through the cheapest
scheme rails ensuring that merchants and their
customers receive the benefit of lower transaction
costs. The routing of transactions through the
cheapest scheme rail can have margin benefits for
Tyro which has contributed to the strong gross profit
margin we have achieved in FY23.
We also launched our first No Cost EFTPOS pricing
product to complement our existing surcharging
solution. This product provides merchants with the
ability to recover the costs of their card acceptance
fees. They open opportunities for Tyro in new
segments of the market and provide an alternative
way of reducing merchant costs without reducing
payment acceptance fees.
Operating efficiency
Within my first week as CEO, we announced
implementation of a program to reduce our FY23
operating cost base by $7 million ($11 million
annualised saving from FY24); this included a 10%
reduction in total headcount. With a leaner, more
focused organisation, we have been able to prioritise
initiatives that will deliver measurable results while
delivering operating leverage and profitability.
In April, we introduced a new, simplified operating
model. This included a refreshed organisational
structure that provides greater clarity on
accountabilities and outcomes and is underpinned
by streamlined systems and processes. These
changes also saw my leadership team reduce from
13 to 7 executives and resulted in an expanded
remit for many of these executives. For example,
our Growth team (previously Customer team) now
includes marketing and digital functions. This
provides a single point of accountability for how
we take our products to market, how we service
our merchants, and how we support key partner
relationships.
“...the renewed focus on regaining our mantle
as Australia’s leading payments innovator
has energised the team for a new era.”
R
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Driving high performance
Our people are our greatest asset, and I am
fortunate to lead a team that is so motivated
to help Australian businesses succeed. I am
particularly proud of our unique culture where
our team members want to make a difference,
collaborate with, and learn from the best people,
and thrive in an environment that challenges the
status quo, embraces diversity and is free from
ego. We remain focused on retaining and attracting
top talent to ensure we’re positioned to realise our
ambitions. Over the past six months, we have made
several senior leadership changes including three
new appointments to our executive team.
Dominic White joined Tyro as Chief Product Officer
bringing more than 25 years of market leading
experience in designing, developing, and launching
payments products for domestic acquirers, global
payments services businesses, and payment
schemes in both Australia and Europe.
Deanne Bannatyne joined as Chief Growth Officer.
Dee brings 20 years payments experience in areas
as broad as risk and compliance, sales, servicing,
marketing and digital. Her experience includes
stints with global payments businesses, domestic
Australian banks, and with a global scale-up.
Finally, Adrian Perillo has been appointed as CEO
of our Health Business. Adrian joined Tyro as part of
our acquisition of Medipass in 2021. He has 20 years
experience in digital and health businesses across
a range of functions that include digital, marketing,
product, and business operations.
We will continue to invest in our people and their
career growth to drive a high-performance culture.
A new era
While we are pleased with the success achieved in
FY23, we recognise the challenges ahead.
The current interest rate environment poses a threat
to discretionary spend in our hospitality and retail
verticals. The competitive landscape is also rapidly
changing. Entry to the Australian market by global
acquirers and increased investment in payment
technology by domestic challengers and the big
four banks have given merchants more choice. New
payment acceptance forms such as account to
account (facilitated by the New Payments Platform)
provide further opportunities for acquirers to deliver
solutions that offer different payment experiences,
and different pricing points.
Despite the broader macro-economic headwinds,
I am confident of a strong future for Tyro. We know
that if we are to maintain our market leading growth
rates, there are important product, distribution,
and resourcing questions to answer. We are
currently updating our strategy and considering
key issues including the role of banking and how
we source products, the efficiency and utility of
our proprietary payments switch, go-to market
approach, and our relationship with partners
including our POS partners.
FY23 will be remembered as a challenging year for
our team as well as a transformative moment for
our company. While headcount reductions, changes
in the operating model and the uncertainty
presented by a potential acquisition presented
challenges for our team members, the renewed
focus on regaining our mantle as Australia’s leading
payments innovator has energised the team for a
new era.
We have also provided better clarity to you, our
shareholders, on the prospects for this business as
we continue to grow, improve operating leverage
and profitability, and generate shareholder wealth.
We will host our first investor strategy day in
October where we will present our updated strategy
and give you the opportunity to meet the team and
ask your questions. Further details will be provided
in September.
Finally, I would like to thank our fantastic merchants
and network of partners who inspire us daily. To
our committed team, thank you for embracing the
changes I have led and for your hard work to deliver
a record set of financial and operating results. I
would also like to thank the Board for their support.
I am really looking forward to a great FY24.
Yours sincerely,
Jon Davey
CHIEF EXECUTIVE OFFICER
29 August 2023
23
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023CEO REPORT 24
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Operating
and Financial
Review
25
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW l
i
a
c
n
a
n
F
i
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a
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o
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P
Overall financial highlights for the Group for FY23 include
25% increase in
transaction value to
$42.6
B I L L I O N
(FY22: $34.2 billion)
15 point increase in
EBITDA Margin to 22%
$42.3
M I L L I O N
(FY22: $10.7 million)
30% increase in
normalised gross profit to
51% increase in
loan originations to
$193.2
M I L L I O N
(FY22: $148.5 million)
$149.7
M I L L I O N
(FY22: $99.1 million)
14% growth in Tyro core
merchant numbers.
8% growth in total
merchant numbers to
68,665
(FY22: 63,770)
26
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Table 1: Summary of financial results
FY23
$’000
FY22
$’000
CHANGE
%
Transaction value
Payments revenue and income
Lending income
Other revenue and income1,5
Total revenue1,5
Payments direct expenses
Interest expenses on deposits
Total direct expenses
Gross profit2,5
Operating expenses:
42,601,263
34,197,453
419,215
318,847
24.6%
31.5%
70.3%
9,372
7,215
5,504
1,792
302.6%
435,802
326,143
(241,783)
(177,366)
(814)
(274)
(242,597)
(177,640)
193,205
148,503
33.6%
36.3%
197.1%
36.6%
30.1%
Employee benefits expense (excl. share-based payments)
(95,662)
(92,628)
3.3%
Contractor and consulting expenses
(12,168)
(13,826)
(12.0%)
Communications, hosting and licensing costs
Administrative expenses
Marketing expenses
Lending and non-lending losses
(16,902)
(14,461)
(8,202)
(3,511)
(14,321)
(10,414)
(5,532)
17.9%
39.0%
48.3%
(1,115)
214.9%
Total operating expenses
(150,906)
(137,836)
9.5%
EBITDA3,5
Share-based payments expense
Depreciation and amortisation
EBIT4,5
Amortisation of Bendigo intangible asset
Bendigo gross profit share
Bendigo transitional costs
Other one-off benefits/(costs)
Share of loss from associates
Statutory EBIT
Net interest expense
Statutory profit/(loss) before tax
Income tax benefit
Statutory profit/(loss) after tax
42,299
(11,165)
10,667
296.5%
(5,199)
114.8%
(25,172)
(20,505)
22.8%
5,962
(11,183)
8,139
(974)
4,360
(131)
6,173
(3,712)
2,461
3,552
6,013
(15,037)
(11,176)
8,490
Large
0.1%
(4.1%)
(4,669)
(79.1%)
(109)
Large
(3,558)
(96.3%)
(26,059)
(3,558)
(29,617)
-
(29,617)
Large
4.3%
Large
Large
Large
1
2
3
4
5
Normalised other revenue and income is adjusted for the fair value gain of $4.0 million on the recognition of me&u as a financial asset.
Normalised gross profit is adjusted for Bendigo support fees of $1.0 million associated with transition of Bendigo merchants to the Tyro platform, the Bendigo gross
profit share of $8.1 million not deducted from statutory gross profit but deducted to calculate normalised gross profit and a fair value gain on the recognition of
me&u as a financial asset.
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense, share of losses from
associates, change in accounting treatment of investments and one-off costs to implement the cost reduction program and any M&A related spend.
EBIT and normalised net profit before tax excludes the non-cash accounting impact of the Bendigo Alliance, expenses associated with the change in accounting
treatment of investments and one-off costs to implement the cost reduction program and any M&A related spend.
Refer to page 25 of the FY23 Investor Presentation for a reconciliation of statutory to normalised results.
27
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW Payments Business
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
payments
product
offering
Card-Present Payments
Card-Not-Present Payments
In-app Payments
Payments made at our merchants whereby consumers
present their card of choice to facilitate the payment for
goods and services purchased.
eCommerce, tele-health and mail-order and telephone-
order payments made to merchants by consumers where
a card is not presented for payment.
Payments made using apps whereby payment is
facilitated through the app using Tyro’s payments
infrastructure and not through traditional point-of-sale
terminals.
Financial analysis
Table 2: Payments business financial results
FY23
$’000
FY22
$’000
CHANGE
%
Transaction value
Payments revenue
42,601,263
34,197,453
419,215
318,847
Less: Interchange, scheme, integration and support fees
(234,618)
(171,190)
Payments gross profit (statutory)
Less: Bendigo gross profit share
Add: Bendigo support fees
184,597
147,657
(8,139)
(8,490)
974
2,314
(57.9%)
24.6%
31.5%
37.1%
25.0%
(4.1%)
Payments gross profit (normalised)
177,432
141,481
25.4%
Merchant Service Fee (MSF) as a % of transaction value
89.0bps
82.9bps
+6.1bps
Net Merchant Acquiring Fee as a % of transaction value
33.2bps
32.1bps
+1.1bps
Payments Gross Profit Margin as a % of transaction value
41.6bps
41.4bps
+0.2bps
28
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Performance review
Our record FY23 transaction value performance was
driven by our existing Tyro portfolio of merchants.
Excluding Bendigo, Tyro grew by 28.5% with strong
performance recorded in our Hospitality and Health
verticals. Including Bendigo, which grew at 2.7%
for the year, overall transaction value growth came
in at 24.6%. This matches our long term 5-year
CAGR growth of 26.1% showing that we continue to
outperform overall market growth and take market
share in our addressable market.
Our largest vertical by merchants and transaction
value, Hospitality, continued to perform strongly
in FY23. Hospitality grew transaction value by 37%
in the year to $18.3 billion (FY22: $13.4 billion) from
17,425 merchants. Merchant growth came in at 9%
with the largest driver of growth relating to higher
average basket sizes and number of transactions
generated at existing merchants. Average transaction
value generated from our Hospitality merchants
was $1.1 million in FY23 compared to $895,000 in
the prior year, an increase of 22%. A portion of this
growth was driven by inflationary growth, however
consumer discretionary spending remained robust
for most of the financial year.
Our Health vertical also recorded strong growth in
the year at 34% to $5.4 billion in transaction value
(FY22: $4.0 billion). Health is benefiting from the
combination of our Medipass and legacy Tyro Health
businesses which we rebranded and relaunched as
Tyro Health. This specialised business unit is driving
strong new merchant acquisition and eCommerce
take up. The combined Tyro Health business grew
its merchants to 16,165 at 30 June 2023, up 24%
from the 13,033 merchants at 30 June 2022. Even
more impressive is that the average transaction
value generated from health merchants increased
to $326,500 in FY23, up 26% from the $260,000
recorded in the prior year. This was driven by the
take up a greater range of eCommerce and claiming
products offered by the integrated Tyro Health
business. Tyro Health now represents 13% of Tyro’s
total transaction value contribution and 31% of our
total merchant base (excluding Bendigo).
Our Services and Other vertical is continuing to show
strong growth driven by our new terminal product
offering and improved go-to-market strategy.
Transaction value for this vertical came in at $3.2
billion, up 26% from the $2.5 billion generated in
FY22. Merchant growth came in at 21% with 8,525
merchants active at 30 June 2023 compared to 7,027
at 30 June 2022. Since the launch of Tyro Go and
Tyro BYO, we have signed on 2,961 new merchants
using these products only. Our Services and Other
vertical now represents 16% of Tyro’s total merchant
base (excluding Bendigo), up from 15% in the prior
year.
29
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW The one vertical that is experiencing moderating growth is our Retail vertical. This vertical is on the frontline
of the impact from rising interest rates and decreased consumer discretionary spending which has been
evident since October 2022. Transaction value lifted 14% to $10.3 billion on a stable merchant base of 10,874
merchants (FY22: 10,332) with growth largely driven by inflationary increases.
Chart 2: Merchant count and transaction value by vertical for FY23
t
n
a
h
c
r
e
M
t
n
u
o
C
n
o
i
t
c
a
s
n
a
r
T
l
e
u
a
V
31%
(16,165)
33%
(17,425)
20%
(10,874)
16%
(8,525)
14%
($5.4b)
49%
($18.3b)
28%
($10.3b)
9%
($3.2b)
Health
Hospitality
Retail
Other
The data only relates to Tyro merchants and excludes Bendigo merchants
The other area of our Payments Business that is
experiencing lower growth relates to our Bendigo
Bank Alliance. The Alliance generated transaction
value of $5.4 billion, up 2.7% from the $5.2 billion
generated in the prior year. As the mix of Bendigo
merchants is more weighted to retail, they are
experiencing similar macro-economic issues to the
Tyro Retail vertical. However merchant acquisition
is also an area of ongoing focus with the number
of active merchants in the Alliance decreasing 10%
to 15,676 merchants (FY22: 17,394). The decrease in
merchant numbers was driven by the transition of
merchants from the Bendigo platform taking longer
than expected. This has now been completed.
Merchant acquisition metrics are tracking strongly.
While retention rates deteriorated over the year, they
remain strong and the largest portion of churn was
from merchants going out of business (49%).
We generated 71,282 new leads in FY23. 48,316 leads
have come from our expanding partner channel with
22,966 coming from digital, above-the-line and other.
The key drivers of new leads have come from our
exclusive partnership with Telstra (which also includes
distribution arrangements with Australia Post), the
continued strong referrals from POS partners and the
introduction of Tyro BYO. The conversion from leads
to new merchant applications came in at 21% with
a record total of 17,168 new applications achieved in
FY23, up 16% from FY22.
Another positive indicator for our business is the
stability of our merchant retention metrics which
remain low when considering the segments we serve
and the macro-economic environment we currently
operate in. Transaction value churn remained
constant at 9.3% (FY22: 9.2%) and merchant number
churn increased to 11.7% (FY22: 10.5%) due to a cohort
of non-trading merchants being removed from active
status as previous Covid support offered by state
governments and the Federal Government ceased for
these merchants in FY23. As these merchants were
not generating transaction value, they had little to no
impact on our transaction value churn.
From a geographical standpoint, all states and
territories delivered growth for our Tyro core business
in FY23, achieving growth of between 19% to 35% per
state or territory. As can be seen from Chart 3 on the
next page, New South Wales delivered growth of 35%,
Victoria delivered growth of 31% and Queensland
delivered growth of 20%. For the first half of FY23, a
portion of the strong growth in New South Wales and
Victoria was attributed to extended Covid lockdowns
in these States in the prior year.
30
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Chart 3: Transaction value performance by State and Territory (Tyro core only)
Transaction value performance
New South Wales
Victoria
Queensland
Western Australia
South Australia
Tasmania
Australian Capital Territory
Northern Territory
FY23
FY22
$’million
$’million
GROWTH
PROPORTION OF
RATE
%
TOTAL TV
%
13,360
8,728
8,040
3,621
1,650
678
765
312
9,940
6,630
6,707
3,000
1,200
550
650
300
35%
31%
20%
19%
33%
16%
33%
21%
36%
23%
22%
10%
4%
2%
2%
1%
Off the back of the transaction value growth and merchant number growth, our Payments Business generated
a 25.4% lift in normalised gross profit to $177.4 million (FY22: $141.5 million).
We have generated an uplift in our net Merchant Service Fee (MSF) in the year. The MSF for the year increased
by 7.1 basis points and this was largely driven by an increase in the international card mix. As our Payments
business normalised closer towards pre-Covid levels, the international card mix more than doubled from
1.1% in FY22 to 2.6% in FY23. 4.6 basis points of the change was related to this mix change, either as passing
on the costs to cost plus merchants or price changes to recover costs, while 2.4 basis points was related to
margin driven price changes. The increase in MSF translated to a lift in our Merchant Acquiring Fee (MAF) and
payments gross profit margin. MAF increased to 34.0 basis points in the year, a 1.2 basis point increase over
FY23. Finally, our gross profit margin increased to 42.5 basis points in FY23, up 0.6 basis points over the prior
year.
Chart 4: Margin analysis (Tyro core only)
89.5
42.8
32.0
10 0.0
90.0
80 .0
70 .0
60.0
50.0
40 .0
30 .0
20 .0
10 .0
-
80 .7
43.8
34.7
82.5
41.9
32.8
89.6
42.5
34.0
FY20
FY21
FY22
FY23
MS F
Net MAF Margin
Pay ments Gros s P rofit Margin
31
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW
Key strategic growth initiatives
Pay and be Paid
Tyro
Commerce
Ecosystem
Manage
Cash flow
Run the
Business
As highlighted in the CEO report, we made significant
leaps in FY23 for our Payments business in delivering
a new product portfolio including Tyro Pro, Tyro Go
and Tyro BYO. We put in place the foundations for
an optimised operating model including delivering
our new digital customer onboarding and servicing
capabilities that have significantly improved our
speed of onboarding together with improving the
customer experience and driving cost efficiencies.
We have focused on the pricing optimisation of our
merchant portfolio which is starting to yield strong
results in lifting margins without impacting the churn
of our merchants and we have uplifted our team
through a new management team and appointing
experienced senior leaders to drive growth and
product delivery.
We will continue to invest in a merchant-led focus on
product innovation including improvements to our
eCommerce offering and building on the capabilities
and revenue model of our Tyro Connect offering.
In order for merchants to thrive in the digital
economy, a deepened payments offering across all
channels and an emphasis on customer experience
will see us deliver a unified commerce experience
to our merchants seamlessly integrating in-store
payments, online payments, payments data insights,
loyalty and cash management products.
32
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 33
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW Banking Business
We also provide value-adding banking services to support merchants with growing their businesses through
cash flow and treasury management.
Loans in the form of a
merchant cash advance
An unsecured merchant cash advance designed to
help merchants finance working capital and investment
needs.
Value-adding
banking
services
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 to our merchants.
Financial analysis
Table 3: Banking business financial results
Loan originations
Interest income on loans
Fair value (loss)/gain on loans
Banking revenue
Less: Interest on deposits
Banking gross profit
FY23
$’000
149,710
11,069
(1,697)
9,372
(814)
8,558
FY22
$’000
99,071
4,877
627
5,504
(274)
5,230
CHANGE
%
51.1%
127.0%
370.7%
70.3%
197.1%
63.6%
Banking gross profit margin (before lending losses) as a % of
lending balance
Net yield after lending losses
18.5%
12.2%
20.0%
1.5 points
17.6%
5.4 points
34
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Gross profit of $8.6 million was generated from our
Banking business, up 63.6% (FY22: $5.2 million)
reflecting the increased net interest margin
generated on our loan product, the increased interest
rates paid on deposit accounts and the loss on the
fair valuation of the loan book at 30 June 2023.
Key strategic growth initiatives
Despite this strong growth in FY23, just less than
10% of our merchants are actively using a Tyro
bank account and less than 3% of our merchants
took out a loan in the year. Our banking business
still only represents less than 5% of our total Group
gross profit. However, the momentum generated in
FY23 shows the potential of our banking products
to merchants. Cash management and treasury
solutions are an increasingly attractive opportunity
to merchants as a value-add service to traditional
payments products with many of our competitors
starting to offer these cash management products.
We firmly believe our lending solution and cash
management account to be the leading cash flow
management products in market and we will be more
focused in the years ahead on proactively marketing
these banking products to merchants.
Furthermore, as payments optionality increases
with the introduction of the new payments platform
(NPP), the ability of merchant acquirers to facilitate
payments through the NPP will need to become
a core product offering. With our current banking
assets, we are well placed to offer these services to
our merchants.
Performance review
Tyro’s merchant cash advance loan product
generated record new loan originations of $149.7
million in FY23, up 51.1% from $99.1 million in FY22.
Following enhancements made to the product
including an improved automated approval process
and expanding the loan product to the Tyro banking
web portal (previously limited to the App only), take
up of the product increased strongly in the year.
A total of 3,160 new loans were written in FY23, an
increase of 50.3% over the 2,103 loans written in
FY22. The average loan amount drawn down was
~$47,000, which was similar to the average loan draw
down in FY22.
The increase in originations has seen interest income
from the loan product increase 127.0% to $11.1 million.
Growth in Banking revenue is 19 points above the
growth in loan originations driven by the current
higher interest rate environment. We repriced our
loan product through the year in line with increased
interest rates resulting in an improved average
annualised interest rate of 24% generated (FY22:
20%). At 30 June 2023, loans of $50.5 million were
carried on the balance sheet compared to $39.5
million in the prior year.
Lending losses have again been well managed with
total lending losses of $2.9 million representing
1.9% of originations (FY22: 0.6% loss to originations).
The fair value loss of the loan book at 30 June 2023
amounted to $1.7 million, compared to a gain of $0.6
million in FY22. The reason for the switch from a
gain in FY22 to a loss in FY23 relates to our cautious
evaluation of the loan book in light of the current
economic environment.
A key component to funding our loan product relates
to our deposit products which has seen strong
growth in the year with the number of activated
accounts increasing 5-fold to over 28,000 activated
accounts. We activated the Tyro bank account for
all Tyro merchants in FY23 to enable merchants
to take advantage of the benefits of this fee free,
interest generating cash management product for
their businesses. We also started participating in the
Australian Money Markets term deposit platform in
FY23 to access a stable base of larger term deposits
as required to fund our loan book. A total of $92.7
million is held on deposit with Tyro (FY22: $83.3
million) with an average deposit balance of ~$15,400.
35
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW Group Profitability and Free Cash Flow
The Group generated record normalised EBITDA
of $42.3 million, up 296.5% from the $10.7 million
generated in the prior year. The significant increase
in EBITDA reflects a combination of the strong
growth in Payments normalised gross profit of
25.4%, Banking gross profit growth of 63.4% and an
increase of 303.1% in interest received from Tyro’s
investment and working capital balances while cost
growth was well controlled with an increase of only
9.5% in the year. In October 2022, we announced
a cost reduction program which has delivered $5
million in operating cost savings in FY23 and is on
track to deliver an annualised $11 million reduction
in our cost base in FY24 ahead. The $42.3 million
in EBITDA represents an EBITDA margin of 21.9%
clearly demonstrating the strong profitability
achieved in FY23.
The strong EBITDA result for FY23 translated to
the first ever generation of positive free cash flow
for Tyro in a financial year. Free cash flow of $5.7
million was generated for the year (FY22: negative
free cash flow of $34.1 million). This was achieved
after spending $2.9 million on change of control
discussions as well as $1.3 million in termination
costs incurred as part of the cost reduction program.
We also generated a statutory net profit after tax
for the first time since listing in 2019. Our statutory
net profit for the reporting period was $6.0 million
(FY22: loss of $29.6 million). Depreciation and
amortisation was up 14.8% at $36.4 million (FY22:
$31.7 million) reflecting amortisation of $11.2 million
on the accounting treatment of the Bendigo Bank
Alliance (FY22: $11.2 million). Excluding the Bendigo
amortisation charge, depreciation and amortisation
was up 22.8% reflecting new terminal purchases to
meet the growth in merchant numbers (including
terminals required for the Bendigo Bank Alliance).
FY23 statutory net profit benefited from the
release of a $3.7 million provision that was put in
place in FY21 relating to the terminal incident. With
the settlement of the class action relating to the
terminal incident achieved in FY23, we released
the remaining provision. We also benefited from
a fair value gain of $4.0 million that was realised
in FY23 relating to the change in recognition of
our investment in me&u from an investment in an
associate to an investment in a financial asset.
Finally, we incurred costs of $2.8 million relating to
advisor fees for work undertaken on the interest by
third parties in a change of control transaction.
On a normalised basis, excluding the impact of
one-off costs incurred, the benefit of the release of
the terminal incident provision and the fair valuation
of me&u, and the accounting treatment of Bendigo,
our net profit before tax was $4.5 million (FY22:
loss of $16.1 million). A tax benefit of $3.6 million
was recognised in FY23 relating to the recognition
of previously unrecognised carried forward losses
and timing differences as the business is now
profitable and generating positive free cash flow. At
30 June 2023 we have $38.6 million (tax affected) in
recognised and unrecognised tax losses, credits and
temporary differences available for probable future
use.
Table 4: Reconciliation of normalised net profit/(loss) before tax
Statutory net profit/(loss) before tax
Add back (before tax)
Recognition of me&u investment as a financial asset
Remediation provision release and insurance receivable
Bendigo integration costs
FY23
($’000)
2,461
(3,974)
(4,539)
974
FY22
($’000)
(29,617)
CHANGE
(%)
Large
-
Large
(300)
4,669
Bendigo Bank partner revenue share
(8,139)
(8,490)
Amortisation of Bendigo intangible asset
Interest cost on Bendigo Alliance
Costs incurred in relation to change of control discussions
Other one-off costs
Share of loss from associates
Normalised net profit/(loss) before tax
11,183
2,228
2,858
1,295
11,176
2,534
-
409
131
3,558
4,478
(16,061)
1,413.0%
(79.1%)
(4.1%)
0.1%
(12.1%)
Large
(56.2%)
(96.3%)
Large
36
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Capital Management
and Liquidity
The Group is also well capitalised with a total capital
ratio of 52%. The movement in the ratio from 34%
at 30 June 2022 reflects Tyro’s capital generation
within the year as well as the positive impact of
adopting the new Basel III capital requirements.
The total capital ratio remains well above APRA
Prudential Capital Requirements.
Tyro’s capital ratios throughout the year included an
appropriate buffer to ensure they remained above
APRA’s capital adequacy requirements and Board-
approved levels. Tyro continues to be a high-growth
business, and the current capital management
policy is to reinvest all cash flows, and any excess
capital generated, into the business to support
and maximise future growth and profitability.
Accordingly, Tyro does not expect to pay any
dividends to shareholders in the near term.
Financial Position
With cash and financial investments of $128.9
million (30 June 2022: $122.8 million) Tyro has
sufficient liquidity in place to continue to fund its
growth strategy. The movement of positive $6.1
million in cash and financial investments is reflective
of positive free cash flow of $5.7 million, an inflow of
$6.3 million relating primarily to timing differences
in net scheme receivables offset by a $6.2 million
outflow from banking cash flows.
At 30 June 2023, Tyro had total assets of $431.0
million (FY22: $410.1 million) of which 30% related
to cash and financial investments. 35% of our
total assets relate primarily to intangible assets
recognised for customer contracts on the Bendigo
Bank Alliance and the right of use asset recognised
on our office lease. 12% of total assets relates to
loans made to merchants with the remaining 23%
of total assets made up of property, plant and
equipment, deferred tax assets and merchant fees
due from our merchants.
Tyro had total liabilities of $253.4 million (FY22:
$250.5 million) of which 37% related to the merchant
bank account deposits, with the remainder relating
to commissions payable to Bendigo under the
alliance agreement, trade and other liabilities, lease
liabilities and provisions. The Group’s total assets
exceeded its total liabilities by $177.7 million (FY22:
$159.6 million).
Chart 5: Capital and liquidity ratios
143%
$220m
$165m
73%
$186m
$173m
$115m
$115m
$84m
45%
$78m
39%
$72m
34%
$76m
$170m
52%
$88m
H1 FY21
H2 FY21
H1 FY22
H2 FY22
H1 FY23
H2 FY23
Total Regulatory Capital
Total Risk Weighted Assets
Total Capital Ratio
37
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW Risk Management
The purpose of risk management is not to eliminate
risk from our business model but to ensure that we
maximise our opportunities by taking decisions that
meet our risk appetite and deliver long-term value for
our stakeholders.
Our Board oversees our risk management framework
through its Board Risk Committee and promotes
a culture of risk awareness in everything we do.
We operate in a complex and constantly changing
environment where risk is encountered and managed
as part of our day-to-day operations. We are
committed to ensuring that a consistent approach
to identifying, assessing, and managing risk is
established across the business and is embedded in
our processes and culture, in line with the standard
‘three lines of defence’ model.
Our approach includes:
•
implementing a systematic risk assessment and
escalation process;
• managing and reporting risks in line with
delegated risk acceptance and escalation
authorities and the Board’s approved risk appetite;
and
• embedding risk culture and awareness, with
regular team training and education.
Our Board oversees management’s compliance
with its policies and procedures and sets its
qualitative and quantitative risk appetite (in the
form of our Risk Appetite Statement) in pursuit of
its business objectives as defined by our strategy.
Our Risk Appetite Statement, together with our Risk
Management Framework, outlines an approach that
establishes how we define risk and how much we are
willing to take.
Having a risk management framework that is
appropriate to the size, mix and complexity of our
business and consistent with our strategic objectives
is a requirement of the Australian Prudential
Regulation Authority. All employees complete
mandatory training to make them aware of their
responsibilities and provide them with a mechanism
for identifying and reporting risk to their People
Leaders and XLT members.
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: Business managers are
responsible for the identification and management of
risk as part of their day-to-day responsibilities.
Second Line of Defence: The Risk team is
accountable for providing risk advice, oversight, and
challenge to the business. They maintain the Risk
Management Framework and report to the Board on
the risk appetite, risk profiles, frameworks, policies
and other risk management tools to guide the
business.
Third Line of Defence: Internal Audit is accountable
for independently assuring that the Risk Management
Framework is operating effectively, and our risk
management practices are appropriate in the context
of statutory and regulatory obligations.
38
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 KEY AREAS OF POTENTIAL RISK
MITIGATION STRATEGIES AND ACTIVITIES
Talent
Ability to attract, develop and retain
talent to deliver on strategy.
Attraction and retention strategies, including competitive monetary
and non-monetary benefits.
Performance management frameworks that ensure employees are
clear on expectations and accountabilities and demonstrate risk
behaviours that lead to appropriate outcomes.
Project delivery
Project governance structures and policies.
Ability to deliver new products and
innovations that meet customers’
needs.
Technology failure
Failure or disruption of our
technology platform, resulting
in disruption to merchants’
businesses, leading to customer
churn, loss of data, and/or
reputational damage.
Regulatory and compliance
Ability to manage regulatory and
compliance risk that may impact
Tyro’s products, reputation and/or
financial returns.
Capital management and access
The risk that our performance falls
short of expectations resulting
in negative shareholder/market
sentiment, increasing the cost of
capital and/or impacting access to
capital.
Cybersecurity
Security controls and processes
are insufficient, leading to a breach
and resulting in loss of system
functionality or data, business
disruption, customer churn and/or
reputational damage.
Prioritisation process to identify which are most important and urgent
and allocate resources accordingly.
Project managers in place to plan, execute and control delivery.
Regular monitoring and reporting to identify and mitigate issues that
arise.
Tyro relies on established technology partners who deploy high
availability services and tools.
Regular monitoring of platform and database performance.
Business continuity, disaster recovery, and crisis management plans in
place and tested regularly.
Dedicated Compliance team who monitor and provide input on any
emerging changes to legislation, regulations and/or industry codes,
and assess potential business impacts.
Compliance frameworks, policies and training are provided for all
employees, supported by internal and external audits.
Risk and controls self-assessment process used to identify, evaluate,
and manage compliance risks and develop associated controls.
Proactive and regular dialogue with regulators and industry bodies.
Defined capital risk indicators set in the Group Risk Appetite
Statement.
Capital ratio operating targets are regularly reviewed in the context
of the external economic and regulatory outlook with the objective of
maintaining balance sheet strength.
Security team provide oversight of critical cyber-control activities to
defend against the evolving threat environment.
Proactive tools and processes provide enhanced detection
and monitoring capabilities, secure configuration, vulnerability
management and strong authentication methods.
Increased supplier monitoring to understand and mitigate any
weaknesses in their cyber defence and resilience capabilities.
Security and awareness programs for all employees and annual
cybersecurity scenario exercise with the Executive team and Board.
Business Resilience
Ability to withstand and adapt
to disruptions that may impact
business operations, people, and/
or assets
Business Continuity and Technology Disaster Recovery plans and
testing in place for critical systems and processes.
Key supplier governance, selection and monitoring processes enable
us to identify and manage the risk of third-party disruptions.
Crisis management exercises with the Executive Leadership team and
Board.
39
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW KEY AREAS OF POTENTIAL RISK
MITIGATION STRATEGIES AND ACTIVITIES
Third Party
Failure to choose and manage third
party suppliers effectively, resulting
in loss of system functionality or
data, business disruption, customer
churn and/or reputational damage.
Commitment to obtaining goods and services in a transparent, ethical,
and competitive manner, consistent with our risk profile and policies.
Suppliers are assessed to identify and mitigate modern slavery risks
and issues.
Contract owners maintain in-life relationship management to ensure
compliance with contractual obligations, performance requirements,
business resilience and security assurance.
Credit and Fraud risk
Losses from failure of
counterparties to meet their
financial obligations to Tyro.
Market Risk
Losses from unexpected changes in
market rates and prices.
Liquidity Risk
Ability to meet financial obligations
as they fall due.
Pandemic
Ability to manage Tyro’s potential
financial, operational, and people
risks from events such as COVID-19.
Defined credit risk and fraud risk indicators set in the Group Risk
Appetite Statement.
Tyro’s credit risk management framework and policies outline the
core values which govern credit risk-taking activities and reflect the
priorities established by the Board.
Regular monitoring of credit quality, arrears, policy exceptions and
policy breaches.
Established provisions for credit impairment based on current
information and our expectations.
Defined market risk indicators set in the Group Risk Appetite
Statement.
Tyro’s market risk policy outlines how Tyro will manage market risks
particular to our business.
Tyro’s Asset and Liability Committee provides oversight and
management within the Board set risk appetite limits.
Defined liquidity risk indicators set in the Group Risk Appetite
Statement.
Tyro’s Liquidity Risk Framework and policies outline the necessary
component functions to carry out effective liquidity management from
identification through to a liquidity crisis management.
Forecasting of 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.
Regular oversight and monitoring of financial and operational impacts
by the Executive Leadership Team and Board.
Ongoing support of customers experiencing financial hardship.
Proven ability to work remotely.
Processes in place to ensure employees have a safe and effective
working environment.
Competition and disruption
New competitors or technologies
that impact Tyro’s ability to drive
customer growth and deliver on our
strategy .
Tyro’s strategy actively aims to address current and emerging
competition risk.
Processes in place for monitoring and responding to competitor and
market activity.
Development of strategic partnerships and acquisitions in companies
that drive new technology.
40
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 KEY AREAS OF POTENTIAL RISK
MITIGATION STRATEGIES AND ACTIVITIES
Environmental and social risks
Ability to recognise and address
environmental, social or corporate
governance (ESG) issues
Tyro’s approach to sustainability and climate change risk is managed
through our Sustainability Framework with priority targets set by the
Board.
Regular review and oversight of ESG initiatives and risks by our
Executive Leadership team.
Carbon Neutral emissions, diversity, and inclusion target commitments.
Concentration risk
Reliance on a limited number of
products, industry verticals and
geographical regions to drive
growth.
Focus on promoting value-adding services to existing customers:
merchant cash advance, transaction account, term deposit account
and Tyro Connect.
Growth of our Tyro Health business through the acquisition and
integration of Medipass and a simple, unified solution for payments
and claiming.
Expansion into new verticals with a fit for purpose mobile payment
terminal device.
Geopolitical
Geopolitical issues and tension
could threaten the Australian
economy and destabilise supply
chains, disrupting operations and
impact our business and growth
strategy.
The Board and the Executive Leadership Team monitors conditions
and maintains provisions and capital for a range of potential economic
scenarios.
Investment in expanding and updating our terminal offering to mitigate
potential hardware supply issues.
Monitoring and ensuring sufficient hardware stock levels to meet
customer demand.
Economic environment
Regular financial oversight and monitoring across markets.
Significantly weakened global
conditions could harm our business
and financial position.
Detailed financial analysis, scenario modelling and stress testing for a
range of economic scenarios.
Digital adoption
Acceleration of our digital strategy.
Investing in technology and digital platforms to help drive efficiency
and improve customer experience.
Researching the implications of machine learning and AI and investing
in our products and technology to leverage machine learning and AI to
enhance customer outcomes and improve Tyro’s operating efficiency.
Ability to respond to customers'
demand for simple and innovative
digital services and products.
Machine Learning and Artificial
Intelligence (AI)
Ability to manage risks and
opportunities from Artificial
Intelligence and Machine Learning
related products and features,
leading to reputational, regulatory
and/or financial impacts.
41
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW Sustainability
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 over 68,500 merchants across Australia, we are committed to 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.
We are working towards and intend to comply with the new ISSB Sustainability Reporting Standards – IFRS
S1 and S2 – in line with the phased implementation approach, as outlined by Australian Treasury.
Further details on climate change risk mitigation, progress against targets and our sustainability initiatives can
be found within our 2023 Sustainability Report. To view the 2023 Sustainability Report please refer to:
https://investors.tyro.com/investor-centre/?page=sustainability
42
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 43
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OPERATING AND FINANCIAL REVIEW 44
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Directors’
Report
45
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTORS’ REPORT t
r
o
p
e
R
’
s
r
o
t
c
e
r
i
D
The Directors present their report together with
the Financial Report of the consolidated entity
(referred to hereafter as the Group or Tyro)
consisting of Tyro Payments Limited and the
entities it controlled at the end of, or during, the
year ended 30 June 2023 (FY23).
46
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
1. 2023 Corporate 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 2023 Corporate
Governance Statement available at:
https://investors.tyro.com/investorcentre/?page=corporate-governance.
2. Pillar 3 information
The Group provides information required by APRA prudential standard APS 330 Public Disclosure in the Regulatory
Disclosures section at: https://investors.tyro.com/investor-centre/?page=regulatory-disclosure.
3. 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):
Fiona Pak-Poy
Chair & Non-executive Director
Independent
Appointed as Chair 1 March 2023
David Thodey AO
Chair & Non-executive Director
Independent
Resigned 1 March 2023
David Fite
Non-executive Director
Independent
Claire Hatton
Non-executive Director
Independent
Aliza Knox
Non-executive Director
Independent
Paul Rickard
Non-executive Director
Independent
Shefali Roy
Non-executive Director
Independent
Robbie Cooke
CEO & Managing Director
Executive
Resigned 3 October 2022
Details, including term of office, qualifications, experience and information on other directorships held by Directors,
can be found on pages 91 to 94 of the Annual Report.
4. Company Secretary
Jairan (Jay) Amigh 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.
47
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTORS’ REPORT 5. 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
DIRECTOR
MEETINGS
AUDIT
COMMITTEE
MEETINGS
RISK
COMMITTEE
MEETINGS
PEOPLE
COMMITTEE
MEETINGS
NOMINATIONS
COMMITTEE
MEETINGS
A
55
42
55
55
55
55
55
9
B
52
37
54
52
49
50
52
8
A
6
4
6
6
B
6
4
6
6
nm
nm
6
nm
nm
6
nm
nm
A
nm
nm
5
B
nm
nm
5
nm
nm
5
5
5
5
5
5
A
7
5
B
7
5
nm
nm
7
7
7
7
nm
nm
7
7
A
6
4
6
6
6
6
6
B
6
4
6
6
6
6
6
nm
nm
nm
nm
nm
nm
Fiona Pak-Poy
David Thodey
David Fite
Claire Hatton
Aliza Knox
Paul Rickard
Shefali Roy
Robbie Cooke1
Number of meetings during the year while the Director was a member of the Board or Committee.
A
B Number of meetings attended by the Director as a member during the year.
nm Not a member of the relevant Committee.
1 When he was in the role of CEO | Managing Director, Robbie Cooke was an Executive Director but was invited by the Board to attend the Risk Committee,
Audit Committee and People Committee meetings (or part thereof).
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, People Committee and Nominations Committee. The members of each Committee
are as follows:
AUDIT COMMITTEE
RISK COMMITTEE
PEOPLE COMMITTEE
NOMINATIONS COMMITTEE
Paul Rickard (Chair)
Paul Rickard (Chair)
Claire Hatton (Chair)
Fiona Pak-Poy (Chair)
David Fite
Claire Hatton
David Fite
Aliza Knox
Aliza Knox
David Fite
Fiona Pak-Poy
Claire Hatton
Fiona Pak-Poy
Shefali Roy
Shefali Roy
Aliza Knox
Paul Rickard
Shefali Roy
48
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 6. 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:
DIRECTOR1
Fiona Pak-Poy
David Fite
Claire Hatton
Aliza Knox
Paul Rickard
Shefali Roy
RELEVANT INTEREST IN
ORDINARY SHARES
OPTIONS OVER ORDINARY
SHARES
RIGHTS OVER ORDINARY
SHARES
183,278
16,629,481
14,583
-
2,173,463
-
83,000
158,144
-
-
179,726
-
-
-
-
-
-
-
1
Includes shares held by entities controlled by Directors
7. Operating and Financial Review
Refer to the CEO’s Report and Operating and Financial Review on pages 19 to 42 of the Annual Report, which forms
part of this Directors’ Report for details of Tyro’s principal activities, business strategies and financial performance
and position for the year ended 30 June 2023.
8. Material risks to business strategies and prospects for future
financial years
Refer to the CEO’s Report and Operating and Financial Review on pages 19 to 42 of the Annual Report, which forms
part of this Directors’ Report for details of Tyro’s material risk and strategies to mitigate risks for the year ended 30
June 2023
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 53 to 87 and in Note 13 of
the Financial Report.
11. 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.
49
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTORS’ REPORT For the year ended 30 June 2023, no amounts have been paid pursuant to indemnities (FY22: 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 wilful acts or omissions.
12. Proceedings on behalf of the Group
In relation to the terminal outage incident in January 2021, a class action proceeding was filed against Tyro in
October 2021 in the Federal Court of Australia on behalf of customers impacted by the terminal outage incident.
The class action was the subject of Tyro’s previous ASX announcement on 20 October 2021. The class action
alleged that Tyro engaged in misleading and deceptive conduct, contravened certain statutory guarantees and
breached certain contractual warranties. The claim sought compensation and damages from Tyro.
Following a Court ordered mediation, Tyro entered into a Settlement Deed relating to an in-principle settlement of
the class action which was approved by the Court. The class action proceedings were dismissed by the Court on 19
June 2023. Payment of the settlement amount did not involve any additional cost or expense to Tyro. In agreeing
to resolve the class action, Tyro made no admission as to liability.
13. 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.
The non-audit services paid to the auditors (Ernst & Young) was for equity plan advice amounting to $21,500.
Details of the audit and non-audit fees paid or payable for services provided by the auditors are detailed in Note
22 of the Financial Report.
50
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 14. 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 89 and forms part of the Directors’ Report for the financial year ended 30 June 2023.
15. 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.
16. Significant events after the end of the financial year
On 4 July 2023 Tyro Payments (Ben Alliance) Pty Ltd was lodged for deregistration. On 27 July 2023 Medipass
Solutions Pty Ltd legally changed its name to Tyro Health Pty Ltd.
On 7 August 2023, the appeals period for the orders dismissing the class action relating to the January 2021
terminal connectivity issue lapsed. On 21 August 2023, the settlement amount was paid by the Group’s insurer.
In the opinion of the Directors, other than the two matters noted above, there have been no matters or
circumstances which have arisen between 30 June 2023 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.
17. Remuneration Report
The Group’s Remuneration Report which forms part of the Directors’ Report can be found on page 53 to 87 of this
Annual Report.
______________________
Fiona Pak-Poy
CHAIR
Sydney
29 August 2023
______________________
Paul Rickard
NON-EXECUTIVE DIRECTOR
51
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTORS’ REPORT
52
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Remuneration
Report
53
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT e
e
t
t
i
m
m
o
C
e
h
t
m
o
r
f
r
e
t
t
e
L
l
e
p
o
e
P
e
h
t
f
o
r
i
a
h
C
“We are focused on simplifying the
remuneration framework and continuing
to drive a performance culture across
the organisation that aligns targets and
rewards with shareholder interests.”
54
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Dear Shareholders,
On behalf of the People Committee, I am pleased
to present Tyro’s Remuneration Report for the
financial year ended 30 June 2023. Our imperative
as a Board is balancing the delivery of returns
to investors with long term sustainable business
performance and the People Committee is focused
on the alignment of these priorities.
It was an honour to be elected as the Chair of
the Tyro People Committee in March of this year
following Fiona’s election to Chair of the Board. This
financial year was defined by two key themes. The
first theme was one of renewal; the renewal of our
management team, our Board and Tyro’s strategic
priorities that we believe will position Tyro well for
our next chapter of growth and profitability. The
second was the near 10-month period of engaging
with interested parties regarding a possible change
of control transaction.
As a People Committee, we were pleased with
how our Team remained focused during this time
to achieve record financial results for the year and
delivered new product innovations to our more
than 68,500 merchants who trust us with their
payments and banking needs.
Board and
Management Renewal
After three years as a listed company in which we
navigated the impacts of Covid and the upheaval in
the tech market, the Board and People Committee
saw an opportunity to renew the Tyro management
team to drive our next chapter of growth and
profitability. Following an extensive internal and
external search, we bolstered our management
team by appointing internal candidate Jon Davey
as CEO in October 2022. Jon joined Tyro following
our acquisition of Medipass Solutions in May 2021.
Jon renewed his leadership team with the
recruitment of a new Chief Product Officer, a
new Chief Growth Officer and a new leader of
the Health business, as well as implementing a
new operating model to better serve Tyro and our
merchants going forward. In a little over 10 months
as CEO, Jon has brought a renewed energy, focus,
and determination to Tyro. This has seen improved
accountability, productivity, and delivery with the
strong financial results a clear indication of the
impact he and his new leadership have had on the
business in a short period of time.
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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We also completed our renewal of the Board which
has taken place over the past three years. In 2021
we welcomed Aliza Knox as a non-executive director,
followed by myself and Shefali Roy in 2022. In
March 2023, Fiona Pak Poy replaced David Thodey
to become Tyro’s first female Chair, and one of the
few ASX300 Chairs of Asian descent. Finally, there
was my appointment to replace Fiona as Chair of
the People Committee in March 2023. Together,
our Board has the necessary depth of experience in
payments, technology, banking, risk management,
customer excellence, governance, and strategy,
including dealing with complex mergers and
acquisitions, to take a rejuvenated Tyro into its next
phase of growth.
Our Board is now one of the most diverse of all ASX-
listed companies with 67% female representation.
Diversity in experience, thought and gender
genuinely helps deliver the robust governance that
has, and continues to, serve us well.
Tyro FY23 Performance
Our remuneration framework aligns both the short-
term and long-term rewards of employees and the
Executive Leadership Team (XLT) with Tyro’s strategic
goals, financial performance and core values and
links variable pay outcomes to both Group and
individual performance.
With respect to the key component of our variable
remuneration that directly links to Tyro’s financial
performance, we delivered record transaction
value of $42.6 billion, showing impressive growth
of 25% from the $34.2 billion generated in FY22.
This transaction value was generated from our more
than 68,500 merchants with a total of 17,168 new
merchants joining Tyro in the past 12 months.
The record transaction value resulted in the
achievement of record normalised gross profit of
$193.2 million for the year. This is a growth of 30%
over the prior year which, together with our cost
reduction program implemented in October 2022,
resulted in record EBITDA of $42.3 million, a 297%
improvement over the $10.7 million generated in the
prior year with an EBITDA margin of 22%.
Furthermore, we generated positive free cash flow of
$5.7 million for the year resulting in the achievement
of all guidance targets communicated to investors at
the start of the year. These strong results achieved
in a softening operating environment are a clear
indication that Tyro is now on a path to delivering
improved shareholder value as the business
continues to scale.
FY23 Remuneration
Outcomes
With respect to the annual salary reviews conducted
in January 2023 and our stated strategy to provide
fixed annual remuneration (comprised of base salary
and superannuation) between the 50th and 75th
percentile (based on independent benchmark data),
with technology roles skewed to the higher end
of the range, we provided our team with an overall
average remuneration increase of 4.1% (excluding the
Executive Key Management Personnel (KMP) and
XLT). Executive KMP and XLT were provided with an
average increase of 6.7%, excluding our new CEO
who accepted a new employment contract with the
details provided in this Remuneration Report. Non-
executive Directors did not receive any increase in
remuneration this year.
Following the strong results achieved in FY23, the
overall FY23 short-term incentive (STI) outcome
came in at 113% (FY22: 46%) of target with a total STI
of $11.1 million to be paid to employees. Of this, $3.6
million will be paid in cash with the remaining $7.5
million to be issued as equity rights.
In FY23, the People Committee amended the
allocation of STI to the XLT to be more weighted
to the issue of equity rights compared to cash.
For FY23, 33.3% of the STI to XLT will be issued as
cash (75% previously), 33.3% of the STI to XLT will
be issued as short-term rights vesting equally over
12 months from grant, with the final 33.3% of the
STI granted as long-term rights vesting in a single
tranche 4 years after grant. This change was made to
better align variable XLT remuneration to longer term
shareholder wealth creation.
The FY23 long-term incentive (LTI) Plan was made
available to 66 employees made up of Executive
KMP, the XLT and key employees identified by
the CEO and the Board. Performance Rights were
granted in December 2022 to these employees
with vesting based on the achievement of a defined
range of statutory EBITDA growth and relative Total
Shareholder Return outcomes in FY25. This plan
is not due to be tested until FY25 and as such no
vesting has occurred. With respect to prior year LTI
plans, 75% vesting has taken place on the FY20
performance option plan and 149% vesting has taken
place on the FY21 LTI Performance Rights plan as the
performance hurdles for vesting were met based on
the FY23 results. No vesting took place on the FY19
Performance Option plan, and these Options will
lapse as no further testing is permitted by the plan
rules.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 “...this was a year where we made great
progress in renewing our management team
and operating model and working towards our
ambition of being Australia’s leading financial
services technology and innovation company.”
Looking Ahead
to FY24
With the renewal of our management team and
adoption of a new operating model in FY23, it is
an opportune time to reconsider our remuneration
framework for FY24 and ahead. We are focused
on simplifying the remuneration framework and
continuing to drive a performance culture across the
organisation that aligns targets and rewards with
shareholder interests.
We are also committed as a Board and People
Committee to continuously reviewing the
effectiveness of our Remuneration Framework and I
invite you to provide your feedback to either myself
or Fiona directly.
Finally, while there is more to be done as we focus
on our new chapter of growth and profitability,
this was a year where we made great progress in
renewing our management team and operating
model and working towards our ambition of
becoming the leading specialist payments solutions
provider for Australian businesses.
Thank you to the whole team for their considerable
commitment and contribution through this
challenging period.
Yours sincerely
_____________________
Claire Hatton
CHAIR - PEOPLE COMMITTEE
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This Report forms part of the Directors’ Report and
sets out the remuneration arrangements of the Group
for the year ended 30 June 2023 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 2001.
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
Group, directly or indirectly, including all Directors.
References in this report to Executives refers only to
those executives who are KMP, as outlined in section 1
below for FY23.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
REMUNERATION REPORT 2023
1 . Who is covered in this Report
2. Remuneration governance
3. Remuneration framework
4. Key remuneration components for Executive KMP
5. FY23 Executive KMP remuneration outcomes
6. Statutory Executive KMP Remuneration
7. Non-executive Director Remuneration
8. Summary of Options and Rights under issue
9.
Summary of Shares held by Non-executive Directors and Executive KMP
10. Other information
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75
78
79
81
87
87
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 1 . Who is covered in this Report
The Company’s KMP covered in this report are Tyro’s Non-executive Directors, Chief Executive Officer (CEO), Chief
Financial Officer (CFO) and Chief Risk Officer (CRO).
Details of KMP who are Non-executive Directors, including changes made during the reporting period, are provided
in the table below:
NON-EXECUTIVE DIRECTORS
TERM AS KMP
Fiona Pak-Poy1
Chair, Non-executive Director
David Fite
Non-executive Director
Claire Hatton
Non-executive Director
Aliza Knox
Paul Rickard
Shefali Roy
Non-executive Director
Non-executive Director
Non-executive Director
Full year
Full year
Full year
Full year
Full year
Full year
FORMER NON-EXECUTIVE DIRECTORS
David Thodey AO2
Chair, Non-executive Director
Partial year
Fiona Pak-Poy was appointed as Chair from 1 March 2023.
1.
2. David Thodey AO ceased as KMP from 1 March 2023 after resigning as Chair and Non-executive Director.
Details of KMP who are Executives, including changes made during the reporting period, are provided in the table
below:
EXECUTIVE KMP
Jonathan (Jon) Davey3
Chief Executive Officer
Praveenesh (Prav) Pala
Chief Financial Officer
Steven Chapman
Chief Risk Officer
TERM AS KMP
Partial year
Full year
Full year
FORMER EXECUTIVE KMP
Robert (Robbie) Cooke4
CEO | Managing Director
Partial year
3.
4.
Jon Davey Commenced as CEO from 3 October 2022.
Robbie Cooke ceased to be a KMP on 3 October 2022 and continued in a consulting capacity until 31 December 2022.
There have been no changes to KMP since the end of FY23 up to the date of signing the Directors’ Report.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 2. Remuneration governance
Tyro’s remuneration governance and framework is overseen by the People Committee (the Committee) as a formal
committee of the Board. The 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 Committee considers recommendations from the Management team in relation to all remuneration outcomes
for employees, including KMP and senior executives, ahead of recommending to the Board for approval.
These recommendations take into account shareholder feedback and advice from independent remuneration
consultants.
The principal responsibilities of the Committee are outlined in the People Committee Charter, available on the
corporate governance page of the Group’s website:
https://investors.tyro.com/investor-centre/?page=corporate-governance.
Under the Committee Charter, the majority of Committee members must be independent non-executive directors
and the Chair of the Committee must be an independent non-executive director. Currently, all members of the
Committee (including the Chair of the Committee) are independent non-executive directors.
Details of members of the Committee and their background are included in the Directors’ Report on pages 91 to
94.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 2.1 Use of remuneration advisors
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 FY23, EY and PWC were engaged to provide remuneration and equity plan advice during discussions with third
parties relating to a possible change of control transaction and were paid $25,000 for this work.
The Board is satisfied that no remuneration recommendations (as defined in the Corporations Act 2001) were
provided by external remuneration advisors during FY23.
2.2 Remuneration Report approval at 2022 Annual General Meeting (AGM)
The Company received a vote of 95% in favour of the adoption of the 2022 remuneration report at the 2022 AGM
(90% vote in favour for 2021 AGM).
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 3. Remuneration framework
3.1 Approach to remuneration
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 3.2 to 3.5 of this Report.
TYRO’S PURPOSE - POWERING THE FUTURE OF BUSINESS
Strategy
Grow merchant
share in existing
core verticals
Drive profitability
through pricing
optimisation
and operating
efficiency
Drive product
innovation
through new
payments
and banking
products
Cross-sell and
drive growth
in lending and
other value-
adding services
Tyro Connect
– data insights,
loyalty, ordering
and menu
integration
M&A and
other 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 and
linking variable pay outcomes to both Group and individual performance.
Attract, motivate and retain a
highly skilled team.
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.
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.
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.
Be transparent, easy to
understand.
Be transparent and easy to understand so that it’s clear how the Team’s
performance relates to their rewards and positive outcomes for external
stakeholders.
Promoting gender
pay equality.
We are committed to equal pay for equal work and have recently introduced
policies to review our gender pay equity on an annual basis.
Each year we also complete the Workplace Gender Equality Agency gender
equality program reporting. The findings from this annual report help us tailor our
approach to ensure we’re achieving pay parity.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT COMPONENT
ALIGNMENT TO PERFORMANCE
ALIGNMENT TO STRATEGY
Remuneration Overview
Fixed Annual Remuneration
(FAR)
Consisting of:
• Base salary
• Superannuation
Short-Term Incentive Plan
(STI)
At risk component set
as a percentage of FAR
granted in a mix of cash and
performance rights to all
employees
Long-Term Incentive Plan
(LTI)
At risk component set as
a percentage of FAR and
granted in the form of
performance rights annually
to participating executives
• Set at a market competitive level in
relation to the scope, complexity,
capabilities and individual
performance in the role.
• Targeted at the 50th to 75th percentile
of relevant external peer group.
• Provides recognition for day-to-day,
operational activities in the role.
Performance assessed against:
• Financial measures (target 40%).
• Customer metrics (target 40%).
•
Individual KPI achievement (target
20%).
• Set to attract, retain and engage the
best people to design and lead the
delivery of our strategy.
• Annual pay reviews occur in December
each year with remuneration changes
effective from 1 January.
• Linked to Tyro’s key strategic priorities.
• The 67% of the Executive KMP and
XLT award that is deferred into equity
supports Executives’ alignment with
shareholder interests, as well as
Executive retention.
• Performance assessed against
• Targeting profitability and shareholder
financial measures (target 100%).
• 50% of the LTI award is subject to the
satisfaction of an EBITDA hurdle with
the vesting percentage determined by
reference to Tyro’s statutory EBITDA
(before share-based payments) 3-year
CAGR.
• 50% of each Participant’s Total
LTI Entitlement will be subject
to satisfaction of a relative TSR
hurdle with the vesting percentage
determined by reference to Tyro’s
relative TSR ranking relative to the
Total Shareholder Return (rTSR) for the
S&P ASX All Technology Index (XTX
index).
wealth creation through EBITDA
growth and outperformance of TSR.
• The 3-year vesting period encourages
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 and
shareholders.
“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.”
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 3.2 Remuneration benchmarking and review
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 use 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 20 below (40 companies in total) that of Tyro at
the time of benchmarking (excluding REITs and secondary ASX listings).
The second comparator group, used to validate the primary market capitalisation peer group, is based on financial
services companies in the ASX300, and companies in the ASX300 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.
We have taken into account the fall in our market capitalisation as part of the benchmarking review we undertake
acknowledging that many of the companies against whom we benchmark have experienced similar falls in market
capitalisation.
3.3 Design of FY23 STI Plan
The FY23 STI plan is designed to reward for achievement of annual goals aligned with 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 Group (Team).
A number of changes were made to the FY23 STI design to better align the plan with the strategic objective of
driving profitability and accountability for the execution and delivery of the strategy. The key changes made are as
follows:
• The performance hurdle relating to the financial component of the STI plan was changed from a hurdle based
on gross profit growth in prior years to the achievement of normalised EBITDA (before share-based payments)
targets as set by the People Committee at the start of the FY23 financial year.
• A change was made relating to the overall weighting attached to the financial measure of the STI plan which
has been reduced from 50% to 40%.
• Furthermore, a change was made to the weighting of the individual key performance indicator (KPI) measure
increasing in weighting from 10% to 20% of the overall STI plan.
• Finally, a change was made to the split between equity and cash for the FY23 STI plan for Executive KMP and
XLT to adjust upwards the equity component of the award from 25% previously to 66.7% of the award to be paid
in equity as short-term and long-term rights. The remaining 33.3% is paid as cash. This change now aligns the
allocation of the STI between rights and cash to all employees of Tyro.
The number of employees who will participate in the STI for FY23 is 543 (FY22: 571).
In terms of the Executive KMP and XLT, the CEO has a target STI potential of 75% of FAR and a maximum
opportunity of 100% of FAR. Excluding the CEO, a target STI potential of between 35% to 50% of Executive KMP
fixed annual remuneration is available as an STI (between 50% to 75% at maximum). All other XLT (including team
members who were previously members of the XLT (previous XLT)) are allocated a potential target incentive
amount of between 15% and 55% of FAR.
The STI award for Executive KMP and the XLT is delivered 33.3% in cash and 66.7% in equity rights that vest as
follows:
• 50% of equity rights vest in equal tranches over a 12-month period from grant with no performance hurdle and
irrespective of continuous service. There is no holding lock post vesting.
• 50% of equity rights vest in a single tranche 4 years from grant with no performance hurdle but subject to
malus and clawback provisions and irrespective of continuous service.
For all other employees, the STI award is delivered 33.3% in cash and 66.7% in equity rights, vesting in equal
tranches over a 12-month period with no holding lock post vesting of each tranche and irrespective of continuous
service.
An analysis of how the FY23 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 on the next page.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 3.3.1 Financial Performance Targets for FY23 – 40% of target STI:
FINANCIAL
PERFORMANCE
MEASURES
Achievement
of FY23 target
EBITDA (before
share-based
payments)
WEIGHTING
AT TARGET
WEIGHTING
AT MAXIMUM TARGET
RATIONALE FOR METRIC
40%
84%
• Target - $26.9 million
• Key indicator of financial
EBITDA (before share-based
payments).
• No incentive pool is formed
for EBITDA below $16.0
million.
• Pool caps out at a maximum
for EBITDA of $37.0 million.
performance and profitability.
• Ensures continued focus on
growth and cost control.
• Balances growth in
transaction value with
generating new business at
profitable margins.
3.3.2 Customer Performance Targets for FY23 - 40% of target STI:
CUSTOMER
PERFORMANCE
MEASURES
Transaction
value churn
WEIGHTING
AT TARGET
WEIGHTING
AT MAXIMUM TARGET
RATIONALE FOR METRIC
5%
10%
Merchant
number churn
5%
10%
Customer
satisfaction
10%
15%
Customer
satisfaction
10%
15%
• Target - 8% churn.
• No incentive pool is formed
at transaction value churn of
11% or greater.
• Key indicator of merchant
retention focussing on
retention of large merchants.
• Aligns to all of our Group
• Pool caps out at transaction
values.
value churn of 5%.
• Target - 10% churn.
• No incentive pool is formed
at merchant number churn of
13% or greater.
• Key indicator of merchant
retention focussing on
retention of all merchants.
• Aligns to all of our Group
• Pool caps out at transaction
values.
value churn of 7%.
• Target - NPS of 40.
• No incentive pool is formed
for NPS of 34 or lower.
• Pool caps out at NPS of 46.
• Key indicator of merchant
satisfaction.
• Aligns to all of our Group
values.
• Target - 24% of merchants
signing on for two or more
Tyro products.
• Growth in value adding
products.
• Aligns to ‘Wow(ing) the
• No incentive pool is
Customers’ value.
formed for less than 15% of
merchants signing on for two
or more Tyro products.
• Pool caps out at 33% of
merchants signing on from
two or more Tyro products.
Merchant
applications
10%
16%
• Target - Average of 1,500
• Key indicator of winning new
business.
• Aligns to ‘Stay Hungry’ value.
new merchant applications
per month for FY23.
• No incentive pool is formed
for less than 1,300 average
new merchant applications
per month.
• Pool caps out at 1,900
average new merchant
applications per month.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 3.3.3
Individual Key Performance Indicators for FY23 - 20% of target STI:
Individual KPIs are set for team members at the start of each financial year. KPIs 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 assessed annually against a rating scale which informs the individual’s percentage allocation
against target. For FY23, the average achievement for all employees came out at 64% of target.
3.3.4 Use of discretion:
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 Board retains the full discretion in relation to revising STI targets where material changes have occurred
during the year. Furthermore, all equity granted in relation to STI awards are subject to malus provisions and
the Board has the discretion to adjust or lapse/forfeit an award.
3.3.5 Tyro’s FY23 performance and link to FY23 STI:
One of the key principles of Tyro’s remuneration framework is to align Executive KMP, XLT and employee
remuneration outcomes with financial and customer performance. This section provides a summary of Tyro’s
performance outcomes for FY23 and the link to remuneration.
Financial performance outcomes
FINANCIAL MEASURE
FY23
FY22
FY21
FY20
5-YEAR
CAGR
FY19
Transaction value
$42.6 billion
$34.2 billion
$25.5 billion
$20.1 billion
$17.5 billion
26.1%
Gross profit (normalised) $193.2 million $148.5 million
$119.7 million
$93.5 million
$83.3 million 23.4%
EBITDA (normalised1)
$42.3 million
$10.7 million
$14.2 million
($4.4 million)
($8.6 million)
N/M
EBITDA (statutory1)
$53.8 million
$14.4 million
($3.1 million)
($4.4 million)
($8.6 million)
N/M
Free cash flow2
$5.7 million
($34.1 million)
($44.1 million)
($36.2 million)
($17.8 million)
N/M
Share price
$1.14
$0.60
$3.68
$3.50
Not listed
1.
2.
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense, share of losses
from associates, and other significant one-off costs. Refer to the page 25 of the FY23 Investor Presentation for a reconciliation of normalised results to
statutory results.
Free cash flow is calculated before changes in banking funds and timing differences relating to net scheme receivables. It is calculated as EBITDA before
share-based payments adjusted for non-cash items in Tyro’s working capital movements, statutory adjustments (including rent payments) and capital
expenditure including internally generated intangibles. Terminal capital expenditure includes both new and replacement terminals.
Financial performance outcomes linked to FY23 STI - Financial component representing
40% of total STI:
The actual normalised EBITDA result for FY23 was the achievement of EBITDA of $42.3 million against a target of
$26.9 million resulting in the achievement of the maximum incentive pool for the financial component of the FY23
STI plan.
EBITDA (normalised)
42,299
26,900 EBITDA was driven by a 25% increase in transaction
FY23
ACTUAL
$’000
FY23
TARGET
$’000 COMMENTARY
value and a 30% increase in gross profit.
Expenses were well controlled with a 9% increase in
operating expenses for the year driving the EBITDA
margin to a record 22%.
STI financial component outcome
84%
40%
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT Customer performance outcomes
CUSTOMER MEASURE
Transaction value churn (%)
Merchant count churn (%)
Net Promoter Score (#)
Merchants accepting two or more Tyro products (#)
FY23
9.3%
11.7%
25
19%
FY22
9.2%
FY21
8.7%
10.5%
11.3%
34
14%
21
15%
FY20
8.0%
11.7%
43
-
FY19
9.3%
11.7%
37
-
Merchant applications (#)
17,168
14,777
11,813
10,547
10,218
Customer performance outcomes linked to FY23 STI - Customer component metrics representing 40% of total
STI:
Transaction value churn (%)
8.0%
9.3% Achieved at threshold range
FY23
TARGET
FY23
ACTUAL
ACHIEVEMENT
STI OUTCOME
% OF
TARGET
67%
% OF
MAX
33%
Merchant count churn (%)
10.0%
11.7% Achieved at threshold range
33%
17%
Net Promoter Score (#)
NPS of 40
NPS of 25 Achieved below threshold range
0%
0%
Merchants accepting two or
more Tyro products (%)
Merchant applications (#)
24%
19% Achieved at threshold range
64%
42%
Ave. of 1,500
per month
Ave. of 1,431
per month
Achieved at threshold range
64%
40%
CEO Key Performance Indicators
Under the FY23 STI Plan, Executive KMP and the XLT are required to individually achieve against a balanced
scorecard that comprises a mixture of financial and non-financial key performance indicators (KPIs). These KPIs
represent 20% of the total STI.
Assessment of Jon Davey’s individual KPIs for FY23 were determined by the People Committee at the
commencement of his duties as CEO, according to the following indicators:
KEY PERFORMANCE INDICATORS
WEIGHTING %
Financial Performance - Deliver financial performance including the cost reduction program.
Delivery and Execution - Delivery of critical foundational projects, a Tyro project delivery and
governance approach and a continuous innovation delivery process.
Organisation - Delivery of a new operating model:
• Create a high performing and highly engaged team
• Promote speed, accountability and innovation
• Drive focus on a culture aligned to Tyro values
Customer – Drive a customer focused organisation:
• Deliver new strategic plan
• Drive performance to plan
Jon Davey achieved 80% of his total target KPI for FY23.
35%
35%
15%
15%
68
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 3.3.6 The key terms of the Rights relating to the FY23 STI plan are set out below:
TERMS
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.
Vesting dates
For Executive KMP and the XLT:
• 50% of vesting takes place in equal tranches over a 12-month period (irrespective of
continuous service) after grant with no performance hurdle and no holding lock post
vesting.
• 50% of vesting takes place in a single tranche 4 years (irrespective of continuous
service) after grant with no performance hurdle and no holding lock post vesting.
For all other employees vesting takes place in equal tranches over a 12-month period
(irrespective of continuous service) after grant with no performance hurdle and no
holding lock post vesting.
Following satisfaction of the vesting condition on each vesting date, the relevant
number of Rights may be exercised at nil consideration.
Each 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.
Exercise
Rights
Holding lock period
None.
Clawback provisions
Rights may be clawed back prior to vesting where there has been a material
misrepresentation of the financial outcomes on which the payment had been assessed
and/or the participant’s actions have been found to be fraudulent, dishonest or
breached their duties or obligations to the Group (e.g. misconduct).
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.
69
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 3.4 Design of FY23 LTI Plan
The FY23 LTI is designed to reward participants for their contributions towards achieving the Group’s strategic
priorities orientated around delivering long term sustainable shareholder value creation. Following engagement
with stakeholders on the FY22 LTI Plan, the Board refined the FY23 LTI Plan by amending the financial performance
hurdles applicable to vesting for the plan. 50% of the plan award now vests based on the achievement of a
statutory EBITDA growth performance hurdle from FY23 to FY25 (inclusive) while a new performance hurdle
representing the remaining 50% of the plan award was added based on the achievement of a TSR ranking relative
to the XTX index at 30 June 2025. This change was made to better align our LTI Plan with shareholder wealth
creation in the medium to long term.
The FY23 LTI Plan is open to the CEO, the Executive KMP, XLT and other nominated employees of Tyro and has
been fulfilled via an issuance of performance rights. For FY23, there were 66 participants invited to participate in
the plan (FY22: 77 participants).
There were no changes to the design of the plan in FY23, however the performance measures in place were amended
from FY22 to focus on long-term shareholder wealth creation centred on an EBITDA profitability measure and a rTSR
measure rather than only focusing on EBITDA, gross profit and revenue measures as used in prior years as Tyro moves
to profitability and a focus on shareholder wealth creation.
3.4.1 Determination of the number of rights awarded under the LTI plan:
The number of performance rights to be issued to each participant was 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 announcement of Tyro’s FY22 full year result; and
• each participant’s prescribed LTI entitlement that falls within the participant’s Total Remuneration Opportunity
(TRO) as approved under the remuneration framework.
• For FY23, the target and maximum LTI opportunity, based on a percentage of the employee’s Fixed Annual
Remuneration (FAR) is:
o 100% at target and 200% at maximum for the CEO.
o Between 30% and 50% at target and at maximum for the Executive KMP.
o Between 15% to 40% at target and at maximum for the XLT (including previous members of the XLT).
o Between 7.5% to 20% at target and at maximum for any other nominated employees.
The number of Performance Rights that qualify for exercise will depend on satisfaction of the following
performance hurdles:
EBITDA hurdle (50% of the Award)
50% of a Participant’s total LTI entitlement will be subject to the satisfaction of an EBITDA hurdle with the vesting
percentage determined by reference to Tyro’s statutory EBITDA compound annual growth rate (before share-
based payments) for the period 1 July 2022 to 30 June 2025 as specified below:
i.
Applicable to the CEO
STATUTORY EBITDA (BEFORE SHARE-BASED
PAYMENTS) 3-YEAR CAGR TO FY25
STATUTORY EBITDA TO BE ACHIEVED IN FY25
PERCENTAGE OF AWARDS
VESTING
Below 20%
At 20%
<$24.8 million
$24.8 million
0%
50%
Above 20% and below 60%
Between $24.8 million to $58.9 million
Pro-rata (50% to 99%)
At 60% (at target)
$58.9 million
100%
Above 60% and below 100%
Between $58.9 million to $115.0 million
Pro-rata (100% to 199%)
At or above 100% (at maximum)
>$115.0 million
200%
70
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 ii.
Applicable to the XLT and other nominated employees
STATUTORY EBITDA (BEFORE SHARE-BASED
PAYMENTS) 3-YEAR CAGR TO FY25
STATUTORY EBITDA TO BE ACHIEVED IN FY25
PERCENTAGE OF AWARDS
VESTING
Below 20%
At 20%
<$24.8 million
$24.8 million
0%
50%
Above 20% and below 60%
Between $24.8 million to $58.9 million
Pro-rata (50% to 99%)
At or above 60% (at target and maximum)
$58.9 million
100%
Relative Total Shareholder Return (rTSR) (50% of the Award)
The remaining 50% of each Participant’s total LTI entitlement will be subject to satisfaction of a relative TSR hurdle
with the vesting percentage determined by reference to Tyro’s relative TSR ranking relative to the TSR for the XTX
index at 30 June 2025 as specified below:
i.
Applicable to the CEO
rTSR PERCENTILE RANKING
Below 50th Percentile
At 50th Percentile
PERCENTAGE OF AWARDS VESTING
0%
50%
Above 50th and below 75th Percentile
Pro-rata (50% to 99%)
Above 75th and below 85th Percentile (at target)
At or above 85th Percentile (at maximum)
100%
200%
ii
Applicable to the XLT and other nominated employees
rTSR PERCENTILE RANKING
Below 50th Percentile
At 50th Percentile
PERCENTAGE OF AWARDS VESTING
0%
50%
Above 50th and below 75th Percentile
Pro-rata (50% to 99%)
At or above 75th Percentile (at target and maximum)
100%
In addition to the performance hurdles, employees who participate in the FY23 LTI must remain employed by Tyro
at the vesting date in order for the Performance Rights to vest.
71
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 3.4.2
The key terms of the Performance Rights relating to the FY23 LTI plan are
set out below:
TERMS
DESCRIPTION
Administration
The plan is administered by the Board (or the Board’s delegate).
Eligibility
Eligible participants are Directors, Executive KMP, XLT as well as other nominated
employees of the Group.
Exercise price
Nil
Vesting dates
Subject to satisfying the Performance Hurdles, the Performance Rights vest in one
tranche 3 years following their grant (November 2025).
Vesting condition
The holder of the rights must be employed by Tyro on the date of vesting and the
number of Performance Rights that qualify for exercise will depend on satisfaction of
the performance hurdles set out above.
Exercise
Rights
Once a FY23 LTI Performance Right has vested and subject to the Plan Rules,
participants will be allocated with that number of fully paid Tyro Shares that corresponds
to the relevant ‘Vesting Percentage’ multiplied by the number of FY23 LTI Performance
Rights granted to participants (Vested Shares).
Each Performance Right granted entitles the holder to one share on exercise. Shares
resulting from an exercise of Performance Rights rank equally with other shares, and
shareholders are entitled to the same dividend and voting rights specified in our
constitution.
Holding lock period
Any Vested Shares issued to participants following the vesting of the FY23 Performance
Rights, will remain subject to a 12-month holding lock, commencing on the date that the
Vested Shares are issued.
During the Holding Lock Period, the Vested Shares cannot be transferred, sold,
encumbered or otherwise dealt with.
Clawback provisions
The Performance Rights to be subject to forfeiture prior to vesting and thereafter any
shares issued will be subject to claw back for up to a further 2-year period following
the expiry of the ‘holding lock (i.e. awards can be forfeited up to 6 years from the Grant
Date).
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.
72
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 4. Key remuneration components for Executive KMP
The charts below show the remuneration mix and Total Remuneration Opportunity (TRO) for Executive KMP at
target opportunity and at maximum opportunity for FY23, comprising FAR, STI and LTI.
CEO
CFO
CRO
t
e
g
r
a
T
m
u
m
i
x
a
M
36%
36%
25%
18%
28%
25%
50%
21%
61%
25%
23%
21%
50%
25%
33%
44%
26%
53%
FAR
STI
LTI
EXECUTIVE KMP
FAR
STI AT
TARGET
LTI AT
TARGET
TRO AT
TARGET
STI AT
MAXIMUM
LTI AT
MAXIMUM
FAR
TOTAL AT
MAXIMUM
Jon Davey
$750,000 $562,500 $750,000 $2,062,500 $750,000 $750,000 $1,500,000
$3,000,000
Prav Pala
$610,000 $305,000 $305,000 $1,220,000 $610,000 $457,500 $305,000
$1,372,500
Steve Chapman $390,000 $136,500
$117,000
$643,500 $390,000 $195,000 $156,000
$741,000
Variable remuneration (comprising STI and LTI at target and maximum amounts) accounts for the majority of
the total remuneration mix for the CEO. The actual remuneration mix will vary based on Tyro’s performance and
individual performance each year.
73
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 4.1
Executive KMP remuneration time horizon
Fixed Remuneration
STI – cash (33.3% of STI)
STI – short-term deferred
rights (33.3% of STI)
STI – long-term deferred
rights (33.3% of STI)
LTI – performance rights
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
Date granted
Vesting date
End of holding lock period
4.2 Changes to Executive KMP remuneration for FY23
Jon Davey was appointed as CEO on 3 October 2022 with a FAR of $750,000 being $240,000 lower than the
previous CEO. Prav Pala (CFO) did not receive an increase in FY23 following the increase received in FY22 and his
STI and LTI allocations as a proportion of FAR did not change. Steve Chapman (CRO) was granted a 2.6% increase
to his FAR for FY23 to $390,000 with no change to his STI and LTI allocations as a percentage of FAR.
Prav Pala was also granted a one-off retention incentive of 750,000 service rights in FY23. 33.3% of the service
rights vested on 9 March 2023, being 6 months from the grant date. A further 33.3% will vest on 9 March 2024,
being 18 months from the grant date with the final 33.3% vesting on 9 March 2025, being 30 months from the
grant date. The amortised cost of these service rights are included in the statutory remuneration for Prav Pala in
FY23.
4.3 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.
EXECUTIVE KMP
CONTRACT TERM
NOTICE PERIOD TERMINATION PAYMENT
Jon Davey
No fixed duration
6 months
Prav Pala
No fixed duration
9 months
Steve 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.
Jon Davey is subject to a post-employment restraint period of 12 months, Prav Pala is subject to a post-
employment restraint period of 9 months, and Steve Chapman is subject to a post-employment restraint period of
6 months subject to all usual legal requirements.
74
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 5. FY23 Executive KMP remuneration outcomes
FY23 STI outcomes
5.1
The following table provides the FY23 STI outcomes awarded to Executive KMP. Under the FY23 STI plan, 33.3% of
the award is made in non-restricted cash and 66.7% of the awarded STI is provided in equity in the form of short-
term and long-term Rights.
EXECUTIVE KMP
Jon Davey
Prav Pala
ACTUAL STI
AWARDED
$
DEFERRED – TO
BE ISSUED AS
EQUITY RIGHTS
$
CASH
$
STI AT
TARGET
$
660,646
220,215
440,431
562,500
358,217
119,406
238,811
305,000
STI ACHIEVED
AS A % OF
TARGET
STI ACHIEVED
AS A % OF
MAXIMUM
%
117.4%
117.4%
%
88.1%
78.3%
79.4%
Steve Chapman
154,857
51,619
103,238
136,500
113.4%
FY23 LTI outcomes
5.2
The following table provides the FY23 LTI outcomes awarded to Executive KMP. Under the FY23 LTI plan,
performance rights are granted in the year with vesting to take place 3 years from grant subject to performance
conditions being met.
NUMBER OF
PERFORMANCE
RIGHTS GRANTED
VALUE OF
PERFORMANCE
RIGHTS GRANTED
VALUE AT GRANT
DATE
EXECUTIVE KMP
Jon Davey
Prav Pala
1,282,051
$1,500,000
261,538
$306,000
Steve Chapman
99,145
$116,000
GRANT DATE
24 Dec 2022
24 Dec 2022
24 Dec 2022
AS A % OF TOTAL
REMUNERATION1
68.9%
17.5%
19.8%
$1.17
$1.17
$1.17
1
The value of the FY23 LTI performance rights granted as a percentage of total remuneration is based on total statutory remuneration as reported on page 78.
75
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT Legacy LTI Plan outcomes
5.3
Since the Group’s adoption of performance based long-term incentives in 2019, there have been five awards made
under the LTI Plan to Executive KMP and other nominated employees, with three awards tested. The table below
sets out the details of performance rights issued over the last five financial years and the outcome of testing of
those awards if testing dates have been reached.
DETAILS
FY19 AWARD
FY20 AWARD
FY21 AWARD
FY22 AWARD
Instrument
Options
Options
Exercise price
$1.50
$1.79
LTI AWARD
MEDIPASS AWARD
Rights
Nil
Rights
Nil
Rights
Nil
Grant date
1 May 2019
1 Oct 2019
1 Feb 2021
1 Jul 2021
1 Mar 2022
Test date
1 May 2023
1 Oct 2023
1 Sep 2023
30 Jun 2026
1 Sep 2024
Vesting date
Vesting hurdle(s)
1
2
3
4
1 Sep 2023
30 Jun 2026
1 Sep 2024
5
6
7
Test result
Performance
hurdles not met
Performance
hurdles met
Performance
hurdles met
Not due for
testing
Not due for
testing
1
2
3
4
5
6
7
FY19 LTI options vest in equal tranches of 25%, commencing on 1 May 2021 and ending on 1 May 2024..
Options granted in respect of FY19 must satisfy two performance hurdles to qualify for exercise:
• 25% compound gross revenue growth from 1 July 2018 to end of financial year of testing; and
• a positive Net Profit result (before tax and share-based expenses) for financial year of testing.
FY20 LTI options vest in equal tranches of 25%, commencing on 1 October 2021 and ending on 1 October 2024.
Options granted in respect of FY20 must satisfy two performance hurdles to qualify for exercise:
• 20% compound gross revenue growth from 1 July 2019 to end of financial year of testing; and
• a positive Net Profit result (before tax and share-based expenses) for financial year of testing.
The FY21 performance rights will vest subject to passing a ‘Gateway’ and then satisfying a prescribed ‘Performance Hurdle’ and will vest in one tranche after
3 years (on 1 September 2023). The ‘Gateway’ that must be passed prior to testing the performance hurdle is defined as Tyro reporting a positive EBITDA
(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).
The number of Medipass performance rights that will vest will be determined by reference to the EBITDA (as set out in Tyro’s audited financial statements)
for the combined Medipass and Tyro Health businesses in respect of the financial year ended 30 June 2026.
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).
5.3.1 Testing of FY19 performance options
Based on the fourth and final testing of the FY19 performance options, the compound gross revenue for the period
1 July 2018 to 30 June 2023 was 24.3% with a net profit before tax and share-based payments of $13.6 million
recorded.
Test 1:
Achieve Net profit before tax and share based
payments
Hurdle achieved
Test 2:
25% compound gross revenue growth
for each year of testing
Compound gross revenue growth (%)
Hurdle achieved
FY19
$’000
FY20
$’000
FY21
$’000
FY22
$’000
FY23
$’000
(16,475)
(27,161)
(20,433)
(24,418)
13,626
189,770
210,675
238,522
326,143
439,776
-
-
19.2%
17.2%
21.8%
24.3%
As the 25% compound gross revenue growth rate was not achieved, the option grant does not meet the
performance hurdles at the final testing date and as such will lapse.
7676
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
5.3.2 Testing of FY20 performance options
The FY20 performance options will be tested on 1 October 2023 relating to the first three of four tranches of
vesting for the option grant (75% of vesting opportunity). Although testing will only take place on 1 October 2023,
the results of the testing are known, and the indicative results provided in the table below.
Test 1:
Achieve Net profit before tax and share-based payments
(27,161)
(20,433)
(24,418)
13,626
FY20
$’000
FY21
$’000
FY22
$’000
FY23
$’000
Hurdle achieved
Test 2:
20% compound gross revenue growth for each year of testing
210,675
238,522
326,143
439,776
Compound gross revenue growth (%)
Hurdle achieved
-
-
12.1%
19.8%
23.4%
As both the net profit before tax and share-based payments hurdle and the compound gross revenue hurdles
have been met as at 30 June 2023, the first three tranches of the grant will vest on 1 October 2023. The final 25%
tranche of the option grant will be tested on 1 October 2024 and be based on FY24 results.
5.3.3 Testing of FY21 performance rights
The FY21 performance rights will vest on 1 September 2023 relating to the single vesting tranche for the grant.
Although vesting will only take place on 1 September 2023, the results of the testing are known. The results of
testing are provided in the table below.
Test 1 - Gateway:
Tyro reporting positive statutory EBITDA (before share-based payments) result for the
financial year immediately preceding the vesting date, namely FY23
Hurdle achieved
Test 2 – Gross profit CAGR growth performance hurdle:
Reference to Tyro’s compound gross profit growth rate during the vesting period:
• Less than 12.5% gross profit CAGR FY20 to FY23 – Nil vesting
• 12.5% gross profit CAGR FY20 to FY23 – 30% vesting
•
Above 12.5% to less than 20% gross profit CAGR FY20 to FY23
– Straight line vesting between 30% and 100%
• 20% gross profit CAGR FY20 to FY23 (target) – 100% vesting
•
Above 20% and capping at 30% gross profit CAGR FY20 to FY23
– Straight line vesting between 100% and 150%
Compound gross profit growth rate achieved for FY20 to FY23 (%)
Hurdle achieved
Vesting percentage achieved (%)
FY23
$’000
53,824
29.8%
149%
As both the EBITDA gateway and the compound gross profit performance hurdles will be met as at 30 June 2023,
the FY21 LTI performance right grant will vest at 149% of the rights granted. These rights will vest on 1 September
2023.
77
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT 6. Statutory Executive KMP Remuneration
The following table provides the statutory remuneration outcomes for Executive KMP for FY23 and FY22 and is
prepared in accordance with Australian Accounting Standards. The statutory remuneration outcomes disclosed
in this table differs from the Executive KMPs’ FY23 Total Remuneration Opportunity (TRO) and the elements of
the remuneration framework outlined in Section 4 of this Report. 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.
CASH
SALARY
$
SUPERAN-
NUATION
$
OTHER
$
CASH STI
AWARD
$
LONG
SERVICE
LEAVE
$
OPTIONS
$
RIGHTS4
$
TOTAL
$
PERFOR
MANCE
BASED
EQUITY
COMPONENT
%
543,531
18,969
61,0821
220,215
-
-
-
-
-
-
-
1,332,6115 2,176,408
61.2%
-
-
-
279,318
6,323 250,3869
-
(79,213)3
72,7943
529,608
970,954
23,568
43,8159
177,645
- (760,912)3
(172,588)3
282,482
FY23
FY22
586,432
25,292
573,932
23,568
Steve Chapman
119,406
15,552
(50,341)8
1,053,2056
1,749,546
123,183
55,450
5,422
132,677
914,232
362,354
25,292
360,000
23,568
51,619
52,718
-
-
(15,436)8
161,4727
585,301
25.0%
(1,420)
42,9795
477,845
8.7%
-
-
-
-
-
-
N/A
N/A
57.3%
15.1%
EXECU-
TIVE KMP
Jon Davey1
FY23
FY22
FY23
FY22
Prav Pala
Robbie Cooke2
FY23
FY22
Total
FY23
FY22
1,771,635
75,876
311,468
391,240
15,552 (144,990)
2,620,082 5,040,863
1,904,886
70,704
43,815
353,546
55,450
(756,910)
3,068
1,674,559
1
2
3
4
5
6
7
8
9
Jon Davey commenced as KMP effective 3 October 2022. Pro rata Fixed Remuneration figures provided from 3 October 2022 to 30 June 2023. The STI,
Options and Rights figures represent the full FY23 charges. Under the terms and conditions of Jon Davey’s employment agreement, Tyro will pay for travel
between Jon’s principal place of residency (Melbourne) and Tyro’s head office (Sydney) up to on amount of $75,000 per annum.
Robbie Cooke ceased as CEO and Managing Director effective 3 October 2022. Pro rata Fixed Remuneration figures provided from 1 July 2022 to 3 October
2022
Under the terms of the STI and LTI plan rules, any unvested share-based instruments of the CEO and Managing Director are deemed forfeited as a result of
resignation except for the FY22 STI that continues to vest post termination of employment.
Rights relate to the Remuneration Sacrifice Rights Plan, the LEPR Plan, the equity rights awarded in relation to the FY21, FY22 and FY23 STI Plan, retention
rights and equity rights awarded in relation to the FY21, FY22 and FY23 LTI Plan. These rights are classified as long term due to the terms of each respective
Plan.
Included in the FY23 cost of Rights awarded to Jon Davey, is an amount of $440,431 relating to the FY23 STI award and an amount of $892,180 relating to
the amortised accounting cost of his LTI awards, Medipass retention and performance awards and prior year STI awards.
Included in the FY23 cost of Rights awarded to Prav Pala, is an amount of $238,811 relating to the FY23 STI award and an amount of $814,394 relating to the
amortised accounting cost of his LTI awards, FY23 retention award and prior year STI awards.
Included in the FY23 cost of Rights awarded to Steve Chapman, is an amount of $103,238 relating to the FY23 STI award and an amount of $58,234 relating
to the amortised accounting cost of his LTI awards, FY23 retention award and prior year STI awards.
The negative accounting value of options for FY22 and FY23 relates to management’s judgement that the FY19 LTI Option Plan will not be capable of vesting.
As such, a proportion of the prior year share-based payments expense for these options have been reversed.
The other payments made to Robbie Cooke in FY23 relate to $222,760 in unused leave balance paid on termination of employment and $27,626 for the
payment of travel between Robbie’s principal place of residency (Brisbane) and Tyro’s head office (Sydney) up to on amount of $50,000 per annum. The
$43,815 relates to travel for FY22.
78
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 7. 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 Tyro is $140,000 (FY22:
$140,000) 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.
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 FY23 in accordance with Australian Accounting Standards.
Refer to page 48 of the Directors’ Report for a summary of the Board meetings and Committee meetings that
Non-executive Directors attended in FY23.
79
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT NON-EXECUTIVE
DIRECTOR
Fiona Pak-Poy2
FY23
FY22
David Thodey3
FY23
FY22
Hamish Corlett4
FY23
FY22
David Fite
FY23
FY22
Claire Hatton5
FY23
FY22
Aliza Knox
FY23
FY22
Paul Rickard
FY23
FY22
Shefali Roy5
FY23
FY22
Total
FY23
FY22
CASH FEES
$
SUPERANNUA-
TION
$
OPTIONS5
$
RIGHTS1
$
TOTAL
$
PERFORMANCE
BASED EQUITY
COMPONENT
%
5,428
8,911
97,608
200,644
159,998
168,909
2.7%
5.3%
88,333
9,275
-
154,000
231,000
-
-
140,000
140,000
146,667
68,889
140,000
161,273
-
-
-
-
-
14,700
14,000
15,400
6,889
14,700
16,127
(15,192)6
(5,368)6
-
-
-
-
138,808
225,632
-
(16,751)6
46,663
29,912
(8,857)6
(4,457)6
-
-
-
-
-
-
-
-
-
-
145,843
149,543
162,067
75,778
154,700
177,400
-
-
(13,244)6
198,900
185,656
90,000
9,000
(7,886)6
90,000
181,114
112,000
68,889
781,000
760,051
11,760
6,889
65,835
52,905
-
-
30,940
154,700
-
75,778
(31,865)
327,448
1,142,419
(25,551)
296,661
1,084,066
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
3
4
5
6
Included in rights for FY23 are the fees Non-executive Directors have salary sacrificed and issued as service rights.
Fiona Pak-Poy was appointed as Chair from 1 March 2023. Fees related to Chair of the Board were payable from 1 March 2023 to 30 June 2023.
David Thodey stepped down as Chair and from the Board on 1 March 2023. Details are provided for the period 1 July 2022 to 1 March 2023.
Hamish Corlett stepped down from the Board on 3 November 2021. Remuneration details are provided for the period 1 July 2021 to 3 November 2021.
Claire Hatton and Shefali Roy were appointed as Non-executive Directors on 5 January 2022. The FY22 data in the table above reflects the Non-executive
Director fees received from that date.
The negative accounting value of options for FY22 and FY23 relates to management’s judgement that the FY19 LTI Option Plan will not be capable of vesting.
As such, a proportion of the prior year share-based payments expense for these options have been reversed.
80
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 8. Summary of Options and Rights under issue
Rights
8.1
All unissued shares in Tyro held under STI service rights plans, LTI service rights plans, LTI performance rights plans,
the Liquidity Event Performance Rights plan and remuneration sacrifice rights plans at the date of this report are
shown in the table below:
GRANT DATE
18 Apr 2019
EXPIRY
DATE
EXERCISE
PRICE
%
VESTED
%
EXERCISED
NUMBER HELD
AS RIGHTS
n/a
n/a
100%
100%
AWARD TYPE
Remuneration sacrifice rights in
respect of FY18 Executive STI Plan
Remuneration sacrifice rights in
respect of FY19 Director Fees
Remuneration sacrifice rights in
respect of FY19 Executive STI Plan
Remuneration sacrifice rights in
respect of FY20 Director Fees
Remuneration sacrifice rights in
respect of FY21 Director Fees
Remuneration sacrifice rights in
respect of FY22 Director Fees
5 Sep 2018
n/a
n/a
100%
100%
16 Oct 2019
n/a
n/a
100%
100%
16 Oct 2019
n/a
n/a
85%
85%
27 Oct 2020
n/a
n/a
100%
100%
3 Nov 2021
n/a
n/a
100%
100%
Nil
Nil
Nil
Nil
Nil
Nil
Liquidity Event
Performance Rights
9 May to
6 Aug 2019
FY20 STI service rights
14 Dec 2020
FY21 LTI performance rights
5 Feb 2021
FY21 STI service rights
2 Sep 2021
FY22 LTI performance rights
1 Mar 2022
Medipass service rights
1 Jul 2021
Medipass performance rights
1 Jul 2021
FY22 LTI service rights
FY22 Retention rights
FY22 STI rights
1 Feb 2022
1 Jul 2022
24 Oct 2022
FY23 LTI performance rights
24 Dec 2022
FY23 Retention rights
12 Jul 2022 &
9 Sep 2022
1
1
2
1
2
1
2
1
1
1
2
1
n/a
100%
100%
800,000
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
85%
0%
27%
0%
0%
0%
25%
56%
65%
0%
26%
66%
0%
15%
0%
0%
0%
7%
25%
17%
0%
0%
102,251
264,047
481,359
576,554
1,008,597
1,008,597
1,660,137
391,220
1,754,286
3,771,014
955,480
1
2
Expiry will take place 10 years after the relevant vesting date.
FY21, FY22, FY23 and Medipass LTI performance rights expire immediately after vesting date should the performance hurdles not be met. Should the
performance hurdles be met on vesting date, then shares are issued to plan participants without the requirement to exercise.
81
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT Rights held by Non-executive Directors at 30 June 2023
All rights held by Non-executive Directors in the table below relate to restricted rights issued under the Director
Salary Sacrifice Rights Plan.
NON-EXECUTIVE
DIRECTOR
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION1
EXERCISED FORFEITED
Fiona Pak-Poy
FY23
76,858
-
(76,858)
FY22
-
76,858
-
David Thodey2
FY23
59,367
-
(59,367)
FY22
Hamish Corlett3 FY23
David Fite
FY22
FY23
FY22
Claire Hatton
FY23
Aliza Knox
FY22
FY23
FY22
-
-
-
59,367
-
47,647
-
-
-
35,620
-
(35,620)
-
-
-
-
-
35,620
-
-
-
-
-
-
-
-
-
-
(46,723)
-
-
-
Paul Rickard
FY23
46,723
Shefali Roy
FY22
FY23
FY22
-
-
-
46,723
-
-
BALANCE
AT END OF
YEAR
VESTED AND
EXERCISABLE UNVESTED
-
-
-
76,858
35,620
41,238
-
-
59,367
59,367
-
-
-
-
-
47,647
35,620
12,027
-
-
35,620
35,620
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
46,723
23,527
23,196
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
3.
Rights granted as compensation in FY22 relate to director fees sacrificed in FY22.
David Thodey stepped down as Chair and from the Board on 1 March 2023. Details are provided for the period 1 July 2022 to 1 March 2023.
Hamish Corlett stepped down from the Board on 3 November 2021. Details are provided for the period 1 July 2021 to 3 November 2021.
Rights held by Executive KMP at 30 June 2023
EXECUTIVE KMP
BALANCE
AT START OF
YEAR
GRANTED AS
COMPENSA-
TION1
Jon Davey
FY23
631,320
1,307,365
FY22
-
631,320
EXERCISED FORFEITED
-
-
-
-
BALANCE
AT END OF
YEAR
1,938,685
VESTED AND
EXERCISABLE UNVESTED
- 1,938,685
631,320
-
631,320
Robbie Cooke1
FY23
1,223,587
50,611
(62,975)
(360,612)
850,611
800,000
50,611
FY22
1,430,476
193,111
(400,000)
Prav Pala
FY23
144,478
1,046,633
-
FY22
244,456
90,459
(190,437)
Steve Chapman
FY23
48,485
114,164
(602)
FY22
19,469
32,942
(3,926)
-
-
-
-
-
1,223,587
857,728
365,859
1,191,111
252,159
938,952
144,478
162,047
48,485
-
-
-
144,478
162,047
48,485
1
Robbie Cooke ceased employment as CEO and Managing Director on 3 October 2022 and continued in a consulting capacity until 31 December 2022. All
remaining rights that were subject to a service condition were forfeited from that date.
82
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 8.2 Options
All 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
%
VESTED
%
EXERCISED
NUMBER HELD
AS RIGHTS
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
Between
17 Oct 2020 to
22 Jul 2024
$0.375 to
$1.76
94%
53%
4,968,054
Options exercisable at Nil
expiring between 30 December
2024 and 25 June 2025
31 Dec 2018 to
26 Jun 2019
Between
30 Dec 2024
and 25 Jun 2025
Nil
67%
54%
413,189
Options exercisable at Nil
expiring on 31 August 2025
1 Sep 2019
31 Aug 2025
Nil
44%
32%
404,762
Options exercisable at $1.50
expiring on 30 April 2026
1 May and
6 Aug 2019
30 Apr 2026
$1.50
0%
0%
1,468,599
Options exercisable at $1.79
expiring on 30 September 2026
1 Oct 2019
30 Sep 2026
$1.79
0%
0%
1,850,147
Options held by Non-executive Directors at 30 June 2023
GRANTED
AS COM-
PENSATION EXERCISED
FORFEITED
NON-EXECUTIVE
DIRECTOR
BALANCE
AT START OF
YEAR
Fiona Pak-Poy
FY23
83,000
FY22
83,000
David Thodey1
FY23
82,286
FY22
82,286
Hamish Corlett2 FY23
-
FY22
68,000
David Fite
FY23
158,144
FY22
158,144
Claire Hatton
FY23
Aliza Knox
FY22
FY23
FY22
-
-
-
-
Paul Rickard
FY23
201,231
Shefali Roy
FY22
229,400
FY23
FY22
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE
AT END OF
YEAR
VESTED AND
EXERCIS-
ABLE
83,000
83,000
-
-
UNVESTED
83,000
83,000
82,286
11,428
70,858
82,286
8,571
73,715
-
68,000
-
-
-
68,000
158,144
87,286
70,858
158,144
75,679
82,465
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(21,505)
179,726
78,568
101,158
(28,169)
-
-
-
-
-
201,231
91,378
109,853
-
-
-
-
-
-
1
2
David Thodey stepped down as Chair and from the Board on 1 March 2023. Details are provided for the period 1 July 2022 to 1 March 2023.
Hamish Corlett stepped down from the Board on 3 November 2021. Details are provided for the period 1 July 2021 to 3 November 2021.
83
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT Options held by Executive KMP
EXECUTIVE
KMP
Jon Davey
BALANCE
AT START OF
YEAR
FY23
FY22
-
-
Robbie Cooke1
FY23
5,504,530
FY22
5,504,530
Prav Pala
FY23
1,613,486
FY22
1,808,186
Steve Chapman FY23
342,334
FY22
342,334
GRANTED
AS COM-
PENSATION EXERCISED
FORFEITED
BALANCE
AT END OF
YEAR
VESTED AND
EXERCIS-
ABLE
UNVESTED
-
-
-
-
-
-
-
-
-
-
-
-
(304,761)
(5,199,769)
-
-
-
-
-
-
-
-
-
-
-
(194,700)
-
-
-
-
-
-
-
5,504,530
1,743,720
3,760,810
1,613,486
405,689
1,207,797
1,613,486
390,805
1,222,681
342,334
342,334
-
-
342,334
342,334
1
Robbie Cooke ceased employment as CEO and Managing Director on 3 October 2022 and continued in a consulting capacity until 31 December 2022. All
remaining rights that were subject to a service condition were forfeited from that date.
84
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 8.3 Equity grants to Executive KMP
This section sets out the required statutory disclosures of equity grants for Tyro’s Executive KMP.
NUMBER
OF
OPTIONS/
RIGHTS
GRANTED
VEST-
ING
DATE
EXERCISE
PRICE
VALUE OF
OPTIONS/
RIGHTS AT
GRANT DATE
VESTED
%
VESTED
(NUMBER)
VALUE OF
OPTIONS/
RIGHTS EXER-
CISED DURING
THE
REPORTING
PERIOD
FOR-
FEITED/
LAPSED
%
GRANT
DESCRIPTION
Jon Davey
GRANT
DATE
$419,047
80.0%
304,761
20.0%
$335,237
$1.79
$816,231
0.0%
Nil
100.0%
-
$209,077
100.0%
62,975
Nil
$227,970
Medipass Service
1 Jul 2021
297,619
Medipass Performance
1 Jul 2021
297,619
FY22 LTI Rights
1 Mar 2022
36,082
FY22 STI Rights
24 Oct 2022
25,314
FY23 LTI Rights
24 Dec 2022
1,282,051
Robbie Cooke
2018 Dec Linear Options
19 Dec 2018
1,818,180
FY19 LTI Options
1 May 2019
1,567,813
Liquidity Event Rights
26 Jun 2019
1,200,000
2019 Jun Annual Options
26 Jun 2019
380,952
FY20 LTI Options
1 Oct 2019
1,737,585
FY20 STI Rights
2 Sep 2020
62,975
FY21 LTI Rights
1 Feb 2021
167,501
FY21 STI Rights
2 Sep 2021
28,536
FY22 LTI Rights
1 Mar 2022
164,575
10
11
9
12
13
1
2
3
4
5
6
7
8
9
FY22 STI Rights
18 Oct 2022
50,611
12
Prav Pala
2014 Oct Linear Options
10 Oct 2014
211,268
2015 Oct Linear Options
6 Oct 2015
166,129
2016 Nov Linear Options
2 Nov 2016
141,403
2018 Feb Linear Options
1 Feb 2018
250,000
2018 Dec Annual Options 31 Dec 2018
71,428
FY19 LTI Options
1 May 2019
634,681
Liquidity Event Rights
9 May 2019
500,000
FY20 LTI Options
1 Oct 2019
558,830
FY20 STI Rights
2 Sep 2020
25,930
FY21 LTI Rights
1 Feb 2021
51,860
FY21 STI Rights
2 Sep 2021
FY22 LTI Rights
1 Mar 2022
15,072
75,387
Retention Rights
9 Sep 2022
750,000
FY22 STI Rights
24 Oct 2022
35,095
FY23 LTI Rights
24 Dec 2022
261,538
1
1
1
1
4
2
3
5
6
7
8
9
14
12
13
Nil
Nil
Nil
Nil
Nil
$1,119,047
0.0%
$1,119,047
0.0%
$61,339
0.0%
$38,098
0.0%
$1,903,846
0.0%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$1.76
$475,159
98.0%
1,727,271
100.0%
$1.50
$488,235
0.0%
Nil
100.0%
$1,320,000 100.0% 1,200,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$0.45
$0.60
$1.49
$1.76
$556,104
0.0%
Nil
100.0%
$108,437
0.0%
Nil
100.0%
$279,778
0.0%
Nil
100.0%
$76,170
0.0%
Nil
Nil
$31,211
100.0%
211,268
$26,479
100.0%
166,129
$39,580 100.0%
141,403
$59,492
100.0%
250,000
Nil
$74,999
80.0%
57,142
$1.50
$197,647
0.0%
Nil
Nil
$550,000 100.0%
500,000
$1.79
$262,510
0.0%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$86,088
100.0%
25,930
$163,359
0.0%
$57,274
0.0%
$128,158
0.0%
Nil
Nil
Nil
$1,031,250
33.3%
250,000
$52,818
0.0%
$388,384
0.0%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
85
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT NUMBER
OF
OPTIONS/
RIGHTS
GRANTED
VEST-
ING
DATE
EXERCISE
PRICE
VALUE OF
OPTIONS/
RIGHTS AT
GRANT DATE
VESTED
%
VESTED
(NUMBER)
VALUE OF
OPTIONS/
RIGHTS EXER-
CISED DURING
THE
REPORTING
PERIOD
FOR-
FEITED/
LAPSED
%
GRANT
DESCRIPTION
Steve Chapman
GRANT
DATE
FY19 LTI Options
1 May 2019
181,337
FY20 LTI Options
1 Oct 2019
160,997
FY20 STI Rights
2 Sep 2020
FY21 LTI Rights
1 Feb 2021
FY21 STI Rights
2 Sep 2021
7,246
14,941
3,285
FY22 LTI Rights
1 Mar 2022
29,657
FY22 STI Rights
24 Oct 2022
15,019
FY23 LTI Rights
24 Dec 2022
99,145
2
5
6
7
8
9
12
13
$1.50
$197,647
0.0%
$1.79
$262,510
0.0%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$24,057
100.0%
7,246
$47,064
0.0%
$12,483
0.0%
$50,417
0.0%
$22,604
0.0%
$147,230
0.0%
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
-
-
-
-
-
-
-
-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Options granted vest monthly in equal tranches over a period of 5 years and are not subject to any performance conditions.
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).
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.
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.
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).
Vesting occurs equally on a monthly basis over a 24-month period from the Initial Vesting Date.
Subject to passing the ‘Gateway’ and satisfying the Performance Hurdle, the Performance Rights vest in one tranche 3 years following the Effective Date.
Vesting takes place 4-years (irrespective of continuous service) after grant with no performance hurdle.
Subject to satisfying the Performance Hurdle, the Performance Rights vest in one tranche 3 years following the Effective Date.
Vesting takes place in a single tranche on 31 May 2026 subject to continued employment.
Vesting takes place in a single tranche following the release of Tyro’s annual financial statements in respect of the year ended 30 June 2026 and is subject to
the satisfaction of EBITDA performance hurdles for Tyro Health for the year ended 30 June 2026.
Vesting takes place 4-years (irrespective of continuous service) after grant with no performance hurdle.
Vesting takes place in a single tranche on 23 November 2025 and is subject to the satisfaction of a CAGR EBITDA performance hurdles for Tyro for the period
1 July 2023 to 30 June 2025 as well as a relative total shareholder return outcome in respect of the year ending 30 June 2025.
Vesting will occur in three equal tranches, as follows: one third on 9 March 2023, one third on 9 March 2024 and one third on 9 March 2025.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
9.
Summary of Shares held by Non-executive
Directors and Executive KMP
The number of ordinary shares held in Tyro at 30 June 2023 by each Non-executive Director and Executive KMP,
including their personally related parties, is set out below.
NON-EXECUTIVE
DIRECTOR
Fiona Pak-Poy
David Thodey1
Hamish Corlett2
David Fite
Claire Hatton
Aliza Knox
Paul Rickard
Shefali Roy
BALANCE AT
START OF YEAR
RECEIVED DURING THE
YEAR ON EXERCISE OF
OPTIONS/RIGHTS
OTHER CHANGES
DURING THE YEAR
BALANCE AT
END OF YEAR
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
106,420
106,420
1,056,996
990,996
-
1,203,921
16,593,861
18,593,861
-
-
-
-
2,126,740
2,098,571
-
-
76,858
-
59,367
-
-
-
35,620
-
-
-
-
-
46,723
28,169
-
-
-
-
-
66,000
-
-
-
183,278
106,420
1,116,363
1,056,996
-
1,203,921
16,629,481
(2,000,000)
16,593,861
14,583
14,583
-
-
-
-
-
-
-
-
-
-
2,173,463
2,126,740
-
-
1.
2.
David Thodey stepped down as Chair and from the Board on 28 February 2023. Details are provided for the period 1 July 2022 to 28 February 2023.
Hamish Corlett stepped down from the Board on 3 November 2021. Details are provided for the period 1 July 2021 to 3 November 2021.
EXECUTIVE KMP
Jon Davey
Robbie Cooke
Prav Pala
Steve Chapman
BALANCE AT
START OF YEAR
RECEIVED DURING THE
YEAR ON EXERCISE OF
OPTIONS/RIGHTS
OTHER CHANGES
DURING THE YEAR
BALANCE AT
END OF YEAR
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
-
-
1,028,501
491,936
653,626
664,882
16,832
8,678
-
-
367,736
400,000
-
-
-
-
136,565
-
347,922
(359,178)
602
2,114
6,536
6,040
-
-
1,396,237
1,028,501
653,626
653,626
23,970
16,832
10. Other information
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 this Remuneration Report.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT s
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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 2023, 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;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
c) no non-audit services provided that contravene 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
29 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023REMUNERATION REPORT
Profiles
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 f
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Career:
Fiona has over 30 years experience in a
variety of industries, for companies ranging
from start-ups 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. 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 start-ups.
Fiona is a mentor for the Minerva Network, an
organisation of leading Australian business
women who mentor elite female athletes
and Member of Chief Executive Women.
Qualifications:
Fiona holds an Honours degree in
Engineering from The University of Adelaide
and a Master of Business Administration
from Harvard Business School. Fiona is
a Fellow of The Australian Institute of
Company Directors.
FIONA PAK-POY
CHAIR OF THE BOARD
Independent non-executive Director
since September 2019 and Chair since 1
March 2023.
Other Tyro Responsibilities:
• Chair of the Nominations Committee.
• Member of the People Committee.
• Member of the Audit Committee.
Relevant other Directorships
held in the past three years:
• Non-executive Director of HMC
Capital Partners No 1 Pty Ltd, HMC
Capital Partners No 2 Pty Ltd, HMC
Capital Partners No 3 Pty Ltd, all
subsidiaries of Home Consortium
Limited (trading as HMC Capital, ASX:
HMC).
• Non-executive Director of Kain
Lawyers.
• Former non-executive Director and
Chair of the Audit and Risk Committee
of ASX listed Booktopia, Australia’s
largest online book seller.
• Former non-executive Director and
Chair of the People Committee of
ASX-listed iSentia Limited, a media
intelligence and data technology
company.
• Former Director of the Sydney School
of Entrepreneurship.
• Former non-executive Director of
Novotech Aus HoldCo, AsiaPacific’s
leading contract research organisation
(CRO) providing clinical research
solutions world-wide.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTOR PROFILES
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 LongTerm 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.
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..
DAVID FITE
NON-EXECUTIVE DIRECTOR
Independent non-executive Director
since July 2018.
Other Tyro Responsibilities:
• Member of the Audit Committee.
• Member of the Risk Committee.
• Member of the Nominations
Committee.
Relevant other Directorships
held in the past three years:
•
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
multichannel retailers.
Director of MYOB Group Co Pty Ltd,
a provider of accounting, tax and
business services.
•
•
CLAIRE HATTON
NON-EXECUTIVE DIRECTOR
Independent non-executive Director
since January 2022.
Chair of the People Committee.
Other Tyro Responsibilities:
•
• Member of the Audit Committee.
• Member of the Nominations
Committee.
Relevant other Directorships
held in the past three years:
• Non-executive Director of Lifestyle
Communities Ltd (ASX: LIC).
• Non-executive Director of Farleigh
•
•
Holdings Pty Ltd (formerly
Australian Pacific Travel Group).
Director and Co-founder of Full
Potential Labs Pty Ltd.
Former non-executive Director of
3P Learning Ltd (ASX: 3PL) (May
2014 to September 2021).
Career:
Claire has 23 years of experience working
in digital business and 28 years of senior
international business experience in travel and
technology industries across Australia, Asia, and
the U.K. Most recently, as an executive, Claire
spent seven years on the Google Australia and
New Zealand commercial leadership team before
transitioning into a portfolio career and non-
executive roles.
She is currently a non-executive Director of
Farleigh Holdings Pty Ltd (formerly Australian
Pacific Travel Group) and Lifestyle Communities
Ltd, a Director and Co-founder of Full Potential
Labs, and co-host of the innovation-focused
‘Don’t Stop Us Now’ podcast.
Qualifications:
Claire holds a Bachelor of Science Honours
degree specialising in Marketing from Cardiff
University and an MBA from IMD, Switzerland.
92
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 ALIZA KNOX
NON-EXECUTIVE DIRECTOR
Independent non-executive Director
since April 2021.
Other Tyro Responsibilities:
• Member of the People Committee.
• Member of the Risk Committee.
• Member of the Nominations
Committee.
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).
Career:
Aliza has more than four 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.
PAUL RICKARD
NON-EXECUTIVE DIRECTOR
Independent non-executive Director
since August 2009.
Other Tyro Responsibilities:
Chair of the Risk Committee.
•
Chair of the Audit Committee.
•
• Member of the Nominations
Committee.
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.
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 and to the Top 100 Women in
Tech in Singapore in 2021.
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.
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
co-founded 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.
Qualifications:
Paul holds a Bachelor of Science degree in
Mathematics and Computer Science from the
University of Sydney.
93
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023DIRECTOR PROFILES SHEFALI ROY
NON-EXECUTIVE DIRECTOR
Independent non-executive Director
since January 2022.
Other Tyro Responsibilities:
• Member of the Risk Committee.
• Member of the People Committee.
• Member of the Nominations
Committee.
Relevant other Directorships
held in the past three years:
•
Director, First Look Capital Advisers
LLP.
Director, First Look Capital Limited.
Former Director of the Maker
Foundation, originators of the DAI
stable coin (April 2020 to July 2021).
•
•
Career:
Shefali is a Founding Partner of First Look, a
London based venture fund investing in women
and diverse entrepreneurs building technology
in finance, health, work, and real estate. Until
September 2020, Shefali was the COO and CCO
at TrueLayer headquartered in the U.K.
Prior to that she held C-Suite/senior leadership
roles in operations, compliance and regulatory
affairs at Stripe, Apple, Christies and Goldman
Sachs. Shefali is an Associate Fellow at Said
Business School, Oxford University and lectures
on startups, organisational behaviour and
leadership, fintech and DeFi.
Qualifications:
Shefali holds an Associate Diploma of Law, a
BBus in Economics and Finance and an MA in
Communications from RMIT, an MSc in Economic
History from the London School of Economics,
and an Executive MBA from Said Business School,
Oxford University.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
JONATHAN DAVEY
GROUP CHIEF EXECUTIVE OFFICER
Jon joined Tyro in May 2021 in the role
of CEO - Medipass after Tyro acquired
Medipass and was appointed as
Group CEO on 3 October 2022. 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 over 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. He is a member
of the Technology and Innovation
Advisory Board for the Australian
Institute of Company Directors.
MONICA APPLEBY
CHIEF PEOPLE, CULTURE AND
COMMUNICATIONS OFFICER
Monica joined Tyro in 2020 as Head
of Corporate Communications
ahead of being appointed as Chief
People, Culture and Communications
Officer. Monica is passionate about
creating high performing teams
and developing a thriving culture of
engagement and growth that drives
business outcomes.
Monica has over 18 years experience
in strategic communications,
change management and business
transformation, specialising in
financial services and technology,
having previously held roles at
KMPG, Deloitte and Tabcorp. Monica
holds commerce, law and change
management qualifications.
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DEANNE BANNATYNE
CHIEF GROWTH OFFICER
STEVEN CHAPMAN
CHIEF RISK OFFICER
PAUL KEEN
CHIEF TECHNOLOGY OFFICER
Deanne (Dee) joined Tyro in April 2023
and has extensive experience as a
senior executive across the payments
financial services industry, including
Chief Customer Officer/MD A&NZ
for global digital gifting company
Prezzee, General Manager of Identity,
Payments and Financial Services
for Australia Post, and General
Manager of Payments for NAB.
Through these roles, Deanne brings
significant experience in leading sales,
marketing, customer service, product
management, operational and digital
teams.
With a relentless focus on the
customer and a bias to action,
Deanne has passion for leading and
inspiring high performing teams
to deliver transformational growth,
resulting in enhanced commercial and
customer outcomes.
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.
Paul joined Tyro in August 2022 in
the role of Chief Technology Officer.
Paul has over 20 years experience
in leading engineering teams in
large ASX-listed companies. Prior to
joining Tyro, Paul was Vice President
of Engineering for Nuix, leading
Nuix’s engineering teams and related
activities.
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 11 years ago with his family
and has since worked for Woolworths,
IAG and QBE.
Paul’s previous roles included Head of
Group Architecture and Engineering
at Qantas, Chief Technology Officer
at Airtasker and Chief Information
Officer at Dick Smith Electronics.
Prior to these experiences, Paul
was a General Manager in Salmat’s
Software Development team and a
General Manager of Technology and
Development at RedBalloon.
Paul holds a Master of Business
Administration from Macquarie
University (Macquarie Graduate
School of Business).
96
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 PRAV PALA
CHIEF FINANCIAL OFFICER
ADRIAN PERILLO
CEO TYRO HEALTH
DOMINIC WHITE
CHIEF PRODUCT 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.
Adrian joined Tyro in May 2021 as
part of the acquisition of Medipass,
and took over leadership of the Tyro
Health business in October 2022. He
has over 20 years experience leading
digital products and businesses, in
industries including financial services,
health and advertising.
After starting his career as a chartered
accountant and then consultant at
PricewaterhouseCoopers, Adrian
moved into leadership roles at Sensis,
Medibank and Telstra Health, before
joining Medipass in 2017 to build
what is now one of Australia’s leading
digital payments platforms for health
providers.
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Dominic has held a number of
senior roles in financial institutions
and fintechs over the last 30 years,
most recently with Visa in the UK
and Ireland, giving him a unique
view of innovations and trends in
the payments industry. During that
time, he played a key role in Visa’s
response to the COVID-19 pandemic,
in particular helping small businesses
innovate and keep trading through
those difficult times.
Prior to joining Visa in 2019, Dominic
held various senior roles in the
payments industry in the Asia-
Pacific region, including Pacific
Head of Ingenico Group, Asia-Pacific
Managing Director for Bambora,
and senior executive roles heading
up transaction banking products
including Merchant Acquiring and
other payments products for three of
Australia’s largest retail banks, ANZ,
NAB and Commonwealth Bank.
Dominic has consulted to and held
directorships of various organisations
in Asia-Pacific and Europe, developing
strategy for financial institutions and
retailers, as well as acquisition and
divestment options and optimisation
strategies for large and small
businesses. He holds a BSc, an MBA
and is a Graduate of the Australian
Institute of Company Directors.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 5-Year Track Record
FY19
$’000
FY20
$’000
FY21
$’000
FY22
$’000
FY23
$’000
Transaction value
17,496,322
20,131,045
25,453,507
34,197,353
42,601,263
Transaction value annual growth
31.0%
15.1%
26.4%
34.4%
24.6%
Total revenue (normalised)1
189,770
210,675
239,505
326,143
435,802
Total revenue annual growth
28.0%
11.0%
13.7%
36.2%
33.6%
Direct expenses
(106,510)
(117,200)
(119,771)
(177,640)
(242,597)
Gross profit (normalised)2
Gross profit annual growth
83,260
93,475
119,734
148,503
193,205
20.5%
12.3%
28.1%
24.0%
30.1%
Operating expenses (normalised)
(91,871)
(97,847)
(105,568)
(137,836)
(150,906)
EBITDA3
EBITDA Margin
(8,611)
(4,372)
N/M
N/M
Share-based payments expense
(3,788)
(10,896)
14,166
11.8%
(8,779)
10,667
42,299
7.2%
21.9%
(5,199)
(11,165)
Depreciation & Amortisation
(7,864)
(12,524)
(14,666)
(20,505)
(25,172)
EBIT (normalised)4
(20,263)
(27,792)
(9,279)
(15,037)
Net interest cost (normalised)
-
(535)
(517)
(1,024)
Profit/(loss) before tax (normalised)4
(20,263)
(28,327)
(9,796)
(16,061)
Adjustments to normalised earnings
Bendigo amortisation (net of gross profit share)
Bendigo net interest expense
Bendigo transitional expenses
Costs associated with the connectivity issue
M&A project costs
Other one-off (costs)/benefits
Share of loss from associates
-
-
-
-
-
-
-
-
-
-
-
-
(9,730)
-
-
-
-
(13,285)
(4,681)
(894)
(1,119)
(2,686)
(2,534)
(4,669)
300
-
(409)
(3,558)
Profit/(loss) before income tax (statutory)
(20,263)
(38,057)
(29,775)
(29,617)
Profit/(loss) after income tax (statutory)
(18,439)
(38,057)
(29,823)
(29,617)
5,962
(1,484)
4,478
(3,044)
(2,228)
(974)
4,539
(2,858)
2,679
(131)
2,461
6,013
Cash, cash equivalents and investments
68,758
188,324
172,780
122,768
128,932
Free cashflow (before banking)
(17,762)
(36,193)
(44,113)
(34,146)
5,700
1
2
3
4
Normalised other revenue and income is adjusted for the fair value gain of $4.0 million on the recognition of me&u as a financial asset.
Normalised gross profit is adjusted for Bendigo support fees of $1.0 million associated with transition of Bendigo merchants to the Tyro platform, the Bendigo gross profit share of $8.1
million not deducted from statutory gross profit but deducted to calculate normalised gross profit and a fair value gain on the recognition of me&u as a financial asset.
Tyro uses EBITDA as a non-IFRS measure of business performance, which excludes the non-cash impact of share-based payments expense, share of losses from associates, change in
accounting treatment of investments and one-off costs to implement the cost reduction program and any M&A related spend.
EBIT and normalised net profit before tax excludes the non-cash accounting impact of the Bendigo Alliance, expenses associated with the change in accounting treatment of
investments and one-off costs to implement the cost reduction program and any M&A related spend.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Financial
Report
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT FINANCIAL STATEMENTS
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
1. General information and statement of accounting policies
2. Revenue and expenses
3. Segment reporting
4.
Income tax
5. Cash and cash equivalents
6. Trade and other receivables
7.
Loans
8. Leases
9. Financial investments
10.
Investment in associates
11. Property, plant and equipment
12.
Intangible assets and goodwill
13. Share-based payments
14. Deposits
15. Trade payables and other liabilities
16. Current and non-current provisions
17. Contributed equity and reserves
18. Financial risk management objectives, policies and processes
19. Commitments and contingencies
20. List of subsidiaries
21. Earnings per share
22. Auditor’s remuneration
23. Related party disclosures
24. Parent entity disclosures
25. Contingent Liabilities
26. Matters subsequent to the end of the financial year
DIRECTORS’ DECLARATION
106
106
107
108
109
110
110
120
121
122
123
125
125
126
127
128
129
130
131
135
135
136
136
138
145
146
146
147
147
149
149
149
150
INDEPENDENT AUDIT REPORT TO THE MEMBERS OF TYRO PAYMENTS LIMITED 151
102
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
103
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT Financial Statements
Statement of Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2023
Fees and terminal rental income
Interest income
Fair value gain on financial assets
Sale of terminal accessories and other income
Total revenue
Interchange, integration and support fees
Terminal accessories
Interest expense on deposits
Total direct expenses
Gross profit
Employee benefits expense (excluding share-based expense)
Share-based payments expense
Communication, hosting and licencing costs
Administrative and other expenses
Contractor and consulting expenses
Marketing expenses
Depreciation and amortisation
Lending and non-lending gains/(losses)
Other interest expenses
Total operating expenses
Share of loss from associates
Profit/(loss) before tax expense
Income tax benefit
Profit/(loss) for the year
Other comprehensive income/(loss)
FVOCI reserve – revaluation gain/(loss), net of tax
Total comprehensive profit/(loss) for the year
NOTE
2
2
2
2
2
2
8, 11, 12
2
10
4
2023
$000
417,631
18,712
2,277
1,156
439,776
(232,376)
(2,245)
(811)
2022
$000
317,699
5,630
627
2,187
326,143
(169,824)
(1,366)
(274)
(235,432)
(171,464)
204,344
(96,957)
(11,165)
(16,902)
(16,060)
(13,427)
(8,202)
(36,355)
1,028
(3,712)
154,679
(92,628)
(5,199)
(14,321)
(12,978)
(13,726)
(5,532)
(31,681)
(1,115)
(3,558)
(201,752)
(180,738)
(131)
2,461
3,552
6,013
282
6,295
(3,558)
(29,617)
-
(29,617)
(1,008)
(30,625)
CENTS
CENTS
Earnings per share for profit/(loss) attributable to the Ordinary Equity Holders of Tyro Payments Limited
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
21
21
1.16
1.12
(5.74)
(5.74)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes.
104
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Statement of Financial Position
AS AT 30 JUNE 2023
Assets
Current assets
Cash and cash equivalents
Due from other financial institutions
Trade and other receivables
Loans
Prepayments
Financial investments
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 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
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
NOTE
2023
$000
2022
$000
5
6
7
9
7
9
10
11
8
12
4
14
15
8
16
15
8
16
17
17
17
42,603
15,779
25,360
43,765
6,238
15,452
2,027
36,885
14,698
22,704
34,262
3,643
10,474
388
151,224
123,054
6,761
59,072
1,811
42,785
26,344
126,502
16,538
279,813
431,037
92,704
43,031
4,394
6,762
5,242
62,221
1,942
41,452
31,158
132,033
12,986
287,034
410,088
83,273
37,425
1,897
10,532
146,891
133,127
75,396
29,167
1,899
106,462
253,353
177,684
279,422
59,320
(161,058)
177,684
83,553
32,096
1,712
117,361
250,488
159,600
278,798
47,085
(166,283)
159,600
The above Statement of Financial Position should be read in conjunction with the accompanying Notes.
105
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
Statement of Changes in Equity
For the year ended 30 June 2023
CON-
TRIBUTED
EQUITY
FVOCI RE-
SERVE
NOTE
SHARE-
BASED
PAYMENTS
RESERVE
GENERAL
RESERVE
FOR CREDIT
LOSSES
ACCU-
MULATED
LOSSES
$000
$000
$000
$000
$000
TOTAL
$000
At 1 July 2021
Loss for the year
Other comprehensive loss
Total comprehensive loss
Issue of share capital – from options and
rights exercised
Share-based payments
Transfer to general reserve for credit losses
Transfer from FVOCI reserve
274,436
-
-
-
4,362
-
-
-
108
-
(1,008)
(1,008)
-
-
-
211
38,361
2,358
(134,599)
180,664
-
-
-
-
5,199
-
-
-
-
-
-
-
(29,617)
(29,617)
-
(1,008)
(29,617)
(30,625)
-
-
4,362
5,199
-
-
1,856
(1,856)
-
(211)
At 30 June 2022
278,798
(689)
43,560
4,214
(166,283)
159,600
At 1 July 2022
Profit for the year
Other comprehensive income
Total comprehensive income
Issue of share capital – from options and
rights exercised
Share-based payments
Transfer to general reserve for credit losses
278,798
(689)
43,560
4,214
(166,283)
159,600
-
-
-
624
-
-
-
282
282
-
-
-
-
-
-
-
11,165
-
-
-
-
-
-
6,013
-
6,013
282
6,013
6,295
624
-
11,165
788
(788)
-
At 30 June 2023
17
279,422
(407)
54,725
5,002
(161,058)
177,684
The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes.
106
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities
Fees and terminal rental and other income received
Interchange, integration and support fees paid
Interest received
Interest paid
Payments to employees and contractors
Terminals purchased
Other operating expenses paid
Payments for terminal remediation
Movement in scheme and other receivables
Net cash flows from operating activities excluding loans and deposits
Movement in loans
Movement in deposits
NOTE
2023
$000
2022
$000
417,418
(238,251)
18,278
(1,411)
(104,882)
(19,627)
(49,816)
(248)
3,767
25,228
(15,599)
9,431
317,406
(175,919)
5,585
(581)
(99,067)
(13,966)
(35,716)
(5,041)
(1,722)
(9,021)
(24,090)
7,792
Net cash flows from operating activities
5
19,060
(25,319)
Cash flows from investing activities
Movement in term deposit investments
Purchases
Proceeds on maturity
Movement in financial investments
Purchases
Proceeds
Movement in equity investments
Purchases
Movement in property, plant and equipment (excluding terminals)
Purchases
Proceeds
Payments for recognised intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from exercise of share options and rights
Payments of the principal portion of leases
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
Cash and cash equivalents at end of year
5
The above Statement of Cash Flow should be read in conjunction with the accompanying Notes.
(1,000)
-
(7,800)
10,460
-
5,000
(33,072)
28,500
-
(501)
(534)
1,257
(13,858)
166
(14,543)
(10,497)
(12,160)
(24,262)
624
(1,173)
(549)
6,351
(633)
36,885
42,603
4,362
(2,788)
1,574
(48,007)
371
84,521
36,885
107
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
Notes to the financial statements
FOR THE YEAR ENDED 30 JUNE 2023
1. General information and statement of accounting policies
The financial report of the Group was authorised for issue in accordance with a resolution of the Directors on 29 August 2023.
The Group is a for-profit company 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.
The financial report includes the consolidated and standalone financial statements of Tyro Payments Limited and its controlled
entities (together referred to as the Group).
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 (AASB), 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,
financial investments which have been measured at fair value and investments in associates which have been accounted for
using the equity method.
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.
•
•
•
•
Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to AASB 112)
Classification of Liabilities as Current or Non-Current (Amendments to AASB 101)
Disclosure of Accounting Policies (Amendments to AASB 101 and AASB Practice Statement 2).
Definition of Accounting Estimates (Amendments to AASB 8).
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 unless otherwise
stated under the option available to the Group under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191. The Group is an entity in which the instrument applies.
(b) Going concern
The Directors consider the Group are able to pay their debts as and when they fall due, and therefore the Group are 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 13. The equity-settled instruments are expensed using a
linear or graded probability of vesting approach depending on the terms of the equity instruments.
Classification and valuation of investments - The Group classifies its investments in floating rate notes (FRNs) and equity
securities where it does not have significant influence or control as Financial Investments – at Fair Value through Other
Comprehensive Income (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 Note 18.
Investments in associates are accounted for using the equity method of accounting less impairment losses. See Note 1 (m) for
further details.
108
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 1. General information and statement of accounting policies (continued)
(c) Significant accounting judgements, estimates and assumptions (continued)
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 (SPPI)
test” under IFRS 9 “Financial Instruments” and is therefore measured at fair value through the Statements 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. Inputs into the valuation model are detailed in
Note 18.
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.
Impairment for intangibles - The Group determines whether goodwill is impaired at least on an annual basis. Other intangible
assets are reviewed at least annually to determine whether any indicators of impairment exist, and if necessary an impairment
analysis is performed. Impairment testing requires an estimation of the recoverable amount of the cash generating units
to which the goodwill and other intangible assets with indefinite useful lives are allocated. Refer to Note 12 (b) for the key
assumptions used.
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. 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.
Remediation provision - 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.
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:
•
•
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 Bank Alliance
The Alliance has been agreed for a ten year period starting in June 2021. 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 is payable
based on gross profit achieved. The trail commission payable was initially measured at fair value in accordance with AASB 13 Fair
Value Measurement when the customer relationship was obtained and is remeasured at amortised cost in accordance with AASB
9 Financial Instruments to reflect actual and revised estimates of future gross profit.
Key assumptions in respect of estimating the valuation of the trail commission payable included:
•
•
•
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.
109
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 1. General information and statement of accounting policies (continued)
(c) Significant accounting judgements, estimates and assumptions (continued)
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 are 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.
(d) Basis of consolidation
(i)
Business combinations
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 12(c)). 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 subsequent 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 2023 1. General information and statement of accounting policies (continued)
(e) Current and 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:
•
•
•
or
•
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;
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:
•
•
•
or
•
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;
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. Amounts due from other financial institutions includes
term deposits with maturities greater than three months from the date of acquisition and deposits pledged to counterparties as
collateral. Refer to Note 19 (b) for details of deposits pledged as collateral.
(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.
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 Statements
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 Statements of Comprehensive Income as interest income. 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 Statements of
Comprehensive Income. Subsequent recoveries are recognised against these write-offs.
111
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 1. General information and statement of accounting policies (continued)
(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 Statements of
Financial Position or the expense is recognised in the Statements 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 financial assets held at
amortised cost or debt instruments held at fair value through other comprehensive income 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 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. Financial assets at fair value through profit or
loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of
profit or loss.
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 2023 1. General information and statement of accounting policies (continued)
(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
2023
3 years
5 years
3-4 years
2022
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.
Impairment
(iii)
Management identifies 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, lease payments made at or before the commencement date less any lease incentives received and an
estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is
located or restoring the underlying asset to the condition required by the terms and conditions of the lease. 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 in-substance 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.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 1. General information and statement of accounting policies (continued)
(o) Leases (continued)
(ii) Lease liabilities (continued)
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.
(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.
(p)
Intangible assets and goodwill
(i)
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 Statements 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.
Acquired intangibles as part of the Medipass acquisition were valued using the replacement cost technique. This technique
estimated 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 Bank Alliance and Medipass acquisitions. 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 relationships
(iii) Goodwill
AMORTISATION METHOD
Straight line
Straight line
USEFUL LIFE
Finite (3 - 5 years)
Finite (7 - 10 years)
Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Group’s
interest in the net fair value of the identifiable assets and liabilities. Following initial recognition, goodwill is measured at cost
less any accumulated impairment losses. Goodwill is not amortised and is tested annually for impairment.
Goodwill is reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit
to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised.
(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 (Note 4(c)).
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which
significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
114
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 1. General information and statement of accounting policies (continued)
(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 Statements 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 when the customer relationship was obtained and remeasured in
subsequent periods at amortised cost in accordance with AASB 9 Financial Instruments to reflect actual and revised estimates
of future gross profit.
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 Statements 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.
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 Risk
Management.
The methodology and assumptions used for estimating the general reserve for credit losses required are reviewed regularly.
(w) Revenue recognition
Identify the contract with a customer;
Identify separate performance obligations in the contract;
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.
2.
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.
115
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 1. General information and statement of accounting policies (continued)
(w) Revenue recognition (continued)
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 Statements 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 Statements 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) 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.
(y) 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 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 or 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 13.
The Company also has share-based compensation benefits in the form of rights which are tied to performance conditions,
as well as restricted rights which relate to remuneration sacrifice rights. The policy treatment is consistent with that for share
options via the Employee Share Option Plan.
(z)
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.
116
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
1. General information and statement of accounting policies (continued)
(z)
Income taxes (continued)
Tax Consolidation
Tyro Payments Limited (the “Company”) and its wholly-owned Australian controlled subsidiaries (collectively, the “Group”)
entered into a tax consolidated group on 1 July 2021. The head entity, Tyro Payments Limited and the controlled entities in
the tax consolidated group continue to account for their own current and deferred tax amounts. The Group has applied the
separate taxpayer within group approach in determining the appropriate amount of current taxes and deferred taxes to allocate
to members of the tax consolidated group. In addition to its own current and deferred tax amounts, Tyro Payments Limited
also recognises the current tax liabilities (or assets) and the deferred tax assets assumed from controlled entities in the tax
consolidated group. Deferred tax assets relating to temporary differences, unused tax losses and unused tax credits are only
recognised to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred
tax asset can be utilised. At the balance date, no tax funding agreement has been entered into yet however the possibility of
default is remote.
(aa) Cloud Computing arrangements
Cloud computing arrangements are service contracts providing the Group with the right to access software as a service (SaaS)
over a contract period. Cost incurred to configure and customise application software in SaaS arrangements are recognised
as an expense in Statement of Other Comprehensive Income when the Group does not have the ability to control and restrict
access to the SaaS. A right to receive future access to the supplier’s software does not, at the contract commencement date,
give the Group the power to obtain the future economic benefits flowing from the software itself and to restrict others’ access
to those benefits.
The following outlines the accounting treatment of costs incurred in relation to SaaS arrangements:
ACCOUNTING TREATMENT
COST
Non-distinct costs: Recognised as an
operating expense over the term of the
service contract
Distinct costs: Recognised as an operating
expense as the service is received.
• Fee for use of application software (licence fee)
• Customisation costs
• Configuration costs
• Data conversion and migration costs
• Testing cost
• Training costs
Costs incurred for the development of software code that enhances or modifies, or creates additional capability to, existing
on-premise systems and meets the definition of and recognition criteria for an intangible asset are recognised as intangible
computer software assets.
(ab) Goods and Services Tax (GST)
Revenues, expenses, assets and liabilities are recognised net of the amount of GST except for the following:
• when the GST incurred on the purchase of goods and services is not recoverable from the taxation authority, in which case
the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
•
trade receivables and trade payables are stated with the amount of GST included.
The net amount of GST recoverable from or payable to the taxation authority is included as part of other receivables or other
payables in the Statements 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 Statements 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 Statements 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 2023FINANCIAL REPORT
2. Revenue and expenses
The profit/(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
Interest Income
Effective interest income
Other interest income on loans1
Fair value gain on financial assets
Fair value gain on equity investment
Fair value (loss)/gain on loans1
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 and other expenses
Terminal management and logistics
Professional services
Insurance
Impairment of right-of-use asset
Travel and entertainment
Other expenses
Lending and non-lending gains/(losses)
Lending losses1
Non-lending losses
Remediation provision release2
Insurance recoveries3
2023
$000
2022
$000
379,057
283,633
34,774
3,800
31,809
2,257
417,631
317,699
7,653
11,059
18,712
3,974
(1,697)
2,277
753
4,877
5,630
-
627
627
(209,399)
(22,977)
(155,252)
(14,572)
(232,376)
(169,824)
(82,826)
(7,700)
(6,431)
(79,431)
(7,180)
(6,017)
(96,957)
(92,628)
(4,417)
(2,668)
(1,829)
(1,184)
(828)
(5,134)
(4,065)
(1,381)
(1,697)
-
(1,009)
(4,826)
(16,060)
(12,978)
(2,880)
(631)
3,719
820
1,028
(600)
(515)
-
-
(1,115)
1
2
3
Fair value (loss)/gains on loans excludes other interest income on loans or lending losses. Other interest income on loans and lending losses have been disclosed as separate
items within the statement of comprehensive income.
Remediation provision release in FY23 of $3,719,000 is due to the provision is no longer being expected to be utilised following the approval of the settlement of the class
action by the Court (Note 16).
The positive insurance recovery of $820,000 relates to the terminal connectivity issue in January 2021 (Note 6).
118
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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. 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
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.
Banking
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
PAYMENTS1
$000
BANKING2
$000
CORPORATE
AND OTHER3
$000
2023
Revenue
Gross profit
2022
Revenue
Gross profit
419,215
184,597
318,847
147,657
9,372
8,558
5,504
5,230
Reconciliation of gross profit to profit/(loss) before tax:
Gross profit
Operating expenses (excl. depreciation and amortisation, share of loss from associates and
other interest expenses)
Depreciation and amortisation
Other interest expenses
Share of loss from associates
Profit/(loss) before tax
11,189
11,189
1,792
1,792
2023
$000
204,344
(161,685)
(36,355)
(3,712)
(131)
2,461
TOTAL
$000
439,776
204,344
326,143
154,679
2022
$000
154,679
(145,499)
(31,681)
(3,558)
(3,558)
(29,617)
1
2
3
Gross profit of the Payments segment is payments revenue and income less direct expenses.
Gross profit of the Banking segment is income from merchant lending adjusted for the fair value movement on loans and interest expense on merchant deposits.
Gross profit of Corporate and other includes income from investments and other revenue and income.
119
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
3. Segment reporting (continued)
(c) Assets and liabilities by segment
2023
Segment assets
Segment liabilities
2022
Segment assets
Segment liabilities
4.
Income tax
(a)
Income tax benefit:
PAYMENTS
$000
BANKING
$000
CORPORATE
AND OTHER
$000
234,534
90,392
216,972
97,714
75,824
93,569
71,556
83,273
120,679
69,392
121,560
69,501
Major components of income tax benefit for the period ended 30 June 2023 and 30 June 2022:
Current income tax
Current income tax benefit/(expense)
Deferred income tax
Relating to origination and reversal of temporary differences
Recognition of deferred tax on temporary differences
Recognition of previously unrecognised tax losses
Income tax benefit 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 period
Income tax benefit/(expense) reported in equity
(b) Reconciliation of income tax benefit and prima facie tax:
Operating profit/(loss) before tax
At the statutory income tax rate of 30%
Share-based payment expense
Share of loss from associates
Fair value gain on equity investments
Amortisation of intangible asset
Other non-deductible expenses
Recoupment of prior year losses not brought to account
Recognition of deferred tax on previously recognised tax losses
Recognition of deferred tax on temporary differences
Tax effect of current year losses for which no deferred tax asset is recognised
Total income tax benefit
2023
$000
-
3,487
(2,538)
2,603
3,552
-
-
2023
$000
2,461
(738)
(3,350)
(39)
1,192
-
(80)
6,502
2,603
(2,538)
-
3,552
TOTAL
$000
431,037
253,353
410,088
250,488
2022
$000
-
2,703
(2,703)
-
-
-
-
2022
$000
(29,617)
8,885
(1,560)
(1,067)
-
(596)
(83)
-
-
-
(5,579)
-
120
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
4.
Income tax (continued)
(c) Deferred income tax assets and liabilities
STATEMENT
OF FINANCIAL
POSITION
STATEMENT
OF COM-
PREHENSIVE
INCOME
$000
7,997
3,122
1,649
2,603
2,165
624
(1,622)
16,538
$000
2,739
(3,877)
1,131
2,603
1,314
529
(887)
3,552
2023
OTHER COM-
PREHENSIVE
INCOME AND
EQUITY
$000
-
-
-
-
-
-
-
-
STATEMENT
OF FINANCIAL
POSITION
2022
STATEMENT
OF COM-
PREHENSIVE
INCOME
$000
5,258
6,999
518
-
851
95
(735)
12,986
$000
423
1,519
(1,882)
-
504
(699)
135
-
OTHER COM-
PREHENSIVE
INCOME AND
EQUITY
$000
-
-
-
-
-
-
-
-
Net deferred tax assets
and liabilities
Fixed assets
Provisions and accruals
Other
Tax losses
Leases
Financial investments
Other Intangible Assets
Total
Net deferred tax assets relate to temporary differences up to $16,538,000 (tax effected) as at 30 June 2023 (2022:
$12,986,000). In addition, approximately $22,065,000 (tax effected) of unused tax losses, credits and temporary differences
have not been recognised as an asset at balance date.
5. Cash and cash equivalents
Deposits at call
2023
$000
42,603
42,603
2022
$000
36,885
36,885
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
5. Cash and cash equivalents (continued)
Reconciliation of profit/(loss) after tax to net cash flows used in operations
Profit/(loss) for the year
Adjustments for:
Depreciation and amortisation
Share-based payments expense
Fair value gain on me&u
Release of remediation provision
Lending losses
Lease interest expense
Fair value (gain)/loss on loans
Impairment of right-of-use asset
Obsolescence provision
Share of losses from associates
Impairment of intangible assets
Income tax benefit
Other
Changes in assets and liabilities:
Increase in loans1
Purchase of terminals
Increase in trade and other receivables and other assets
Increase in term deposits held as collateral
Increase in deposits
Increase in trade payables and other liabilities
(Decrease)/increase in provisions
Net cash flow/(used in) operating activities
1
Movement in loans balances excludes adjustments for write offs and fair value adjustments.
2023
$000
2022
$000
6,013
(29,617)
36,355
11,165
(3,974)
(3,719)
2,880
2,988
1,697
1,184
141
131
111
(3,552)
(130)
(15,599)
(16,031)
(2,658)
(7)
9,431
(7,485)
119
31,681
5,199
-
-
600
3,497
(627)
-
-
3,558
-
-
131
(24,090)
(14,779)
(5,531)
(507)
7,792
2,287
(4,913)
19,060
(25,319)
122
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
6. Trade and other receivables
Scheme and other receivables 1
Merchant acquiring fees
Insurance receivable2
Expected credit loss provision
Intercompany receivable
2023
$000
5,206
14,375
5,820
(41)
-
2022
$000
10,014
12,728
-
(38)
-
25,360
22,704
1
2
Scheme receivables are presented net of merchant payables in line with the Group’s accounting policy disclosed in Note 1.
Insurance receivable relates to the insurance recovery associated with the settlement of the class action (Note 15) and other insurance recoveries relating to the terminal
connectivity issue in January 2021 (Note 2).
The Group’s ageing of trade and other receivables are as follows:
Carrying value 2023
Carrying value 2022
7. Loans
Current
Loans (net of unearned fees)
Non-current
Loans (net of unearned fees)
TOTAL
$000
25,360
22,704
CURRENT
$000
1-30 DAYS
$000
31-60 DAYS
$000
61-90 DAYS
$000
>90 DAYS
$000
IMPAIRMENT
$000
25,290
22,724
111
18
-
-
-
-
-
-
(41)
(38)
2023
$000
2022
$000
43,765
34,262
6,761
50,526
5,242
39,504
Income from loans comprises interest income of $11,059,000 (2022: $4,877,000), fair value loss of $1,697,000 (2022: gain of
$627,000) and net lending loss of $2,880,000 (2022: net lending loss of $600,000).
123
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
8. Leases
(a) Group as lessee – property lease
The Group entered into an agreement for a lease at 55 Market Street to January 2031, with an option to renew for a further 5
years. As it is not reasonably certain that the option to renew will be exercised, the extension period has not been recognised.
The right-of-use asset for 55 Market Street was impaired during the year as the cost of an unoccupied level of the leased
office is not expected to be recovered through operations. An expense of $1,184,000 was recognised in the Statement of
Comprehensive Income. The Group had total cash outflow for leases of $1,897,000 in 2023 (FY22: $2,849,000). The Group also
has additional short term leases for offices in Bendigo and Melbourne and a warehouse in Sydney.
Set out below are the carrying amounts of the Group’s right-of-use assets and lease liabilities in the Statements of Financial
Position and the movements during the year:
RIGHT-OF-USE
ASSETS
$000
LEASE
LIABILITIES
$000
As at 1 July 2021
Additions
Depreciation expense
Interest expense
Payments
Derecognition of short-term leases
As at 30 June 2022
As at 1 July 2022
Additions
Depreciation expense
Impairment Expense
Interest expense
Payments
As at 30 June 2023
Lease liabilities
Current
Lease liability
Non-current
Lease liability
Total lease liabilities
Lease liabilities – Maturity analysis
Contractual undiscounted cash flows
Within one year
After one year but not more than five years
More than five years
Total undiscounted lease liabilities
1,654
33,578
(4,051)
-
-
(23)
31,158
31,158
-
(3,630)
(1,184)
-
-
26,344
2023
$000
4,394
29,167
33,561
2023
$000
4,394
20,126
15,227
39,747
2,812
33,041
-
1,013
(2,849)
(24)
33,993
33,993
-
-
-
1,465
(1,897)
33,561
2022
$000
1,897
32,096
33,993
2022
$000
1,897
19,076
20,671
41,644
124
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
8. Leases (continued)
(a) Group as lessee – property lease (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
Impairment on right of use asset
Rent expense on short term leases
Total amount recognised in the statement of comprehensive Income
9. Financial investments
Current
Floating rate notes (FRNs)
Convertible note in meandu Australia Holdings Pty Ltd (me&u)
Non-current
Floating rate notes (FRNs)
Equity investment - me&u
2023
$000
(3,630)
(1,465)
(1,184)
(114)
(6,393)
2023
$000
15,452
-
15,452
2023
$000
55,098
3,974
59,072
2022
$000
(4,051)
(1,013)
-
-
(5,064)
2022
$000
8,964
1,510
10,474
2022
$000
62,221
-
62,221
Floating rate notes have been classified between current and non-current based on maturity date. The FRNs are held as
available for sale instruments for liquidity purposes and qualify as eligible collateral for repurchase agreements with the Reserve
Bank of Australia.
meandu Australia holdings Pty Ltd (me&u) is a leading hospitality in-venue food ordering and payments app. The Group
invested in a convertible note in me&u in March 2022. The convertible note incurred 8% interest for 6 months and was
redeemed for cash on maturity date. In October 2022, Tyro’s equity investment in me&u has also reduced after me&u had
an additional equity raising round in which Tyro did not participate. In accordance with AASB 9 Financial Instruments, Tyro’s
investment in me&u is now being held as a financial asset. The impact of the initial recognition as a financial asset is taken to
the Statement of Comprehensive Income. The subsequent changes in the fair value of the financial investment in me&u will be
recognised in OCI.
125
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
10. Investment in associates
Investment in associates
Axis IP Pty Ltd (Paypa Plane)
me&u
2023
$000
1,811
-
1,811
2022
$000
1,482
460
1,942
Investment in associates are recognised at cost using the equity accounting method. The carrying amounts of the investment
in associates are increased or decreased by the Group’s share of Paypa Plane’s results after acquisition date.
Axis IP Pty Ltd (Paypa Plane) is a payments technology business transforming scheduled payments. Tyro’s ownership has
reduced from 17.1% to 11.0% in February 2023 after Paypa Plane had an additional equity raising round in which Tyro did not
participate.
The Group’s investment in me&u is now being held as a financial asset. Refer to Note 9 for details.
The following table summarises the financial information and results of me&u and Paypa Plane for the year ended 30 June 2023
and 30 June 2022.
INVESTMENT IN ME&U
INVESTMENT IN PAYPA PLANE
Percentage ownership interest
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net Assets (100%)
Group’s share of net assets
Carrying amount of interest in associate1
Revenue
Loss from continuing operations
Total comprehensive loss
Group's share of total comprehensive (loss)/income2
2023
$000
4.9%
15,467
5,113
(7,310)
(1,160)
12,110
598
-
1,242
(1,650)
(1,650)
(460)
2022
$000
14.4%
48,009
1,372
(58,474)
-
(9,093)
(1,313)
460
7,734
(20,163)
(20,163)
(2,872)
2023
$000
11.0%
7,995
4,506
(514)
(739)
11,248
1,236
1,811
718
(7,006)
(7,006)
329
2022
$000
17.1%
1,324
2,038
(497)
(25)
2,840
485
1,482
144
(6,535)
(6,535)
(686)
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. The investment in Paypa Plane was considered recoverable based on the value at the last equity raise completed in February 2023.
A total loss on investment of $131,000 (loss in FY22: $3,558,000) has been recognised in the Statement of Comprehensive Income in the year. The share of losses for me&u are
for the period in the year ended 30 June 2023 while the investment in me&u was held as an equity accounted investment.
126
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
11. Property, plant and equipment
Reconciliation of net carrying amounts at the beginning and end of the year for the Group is as below:
TERMINALS
$000
FURNITURE
AND OFFICE
EQUIPMENT
$000
COMPUTER
EQUIPMENT
$000
LEASEHOLD
IMPROVE-
MENTS
$000
Year ended 30 June 2023
At 30 June 2022 net of accumulated depreciation
Additions
Disposals
Depreciation for the year
At 30 June 2023 net of accumulated depreciation
At 30 June 2023
Cost
Accumulated depreciation
Net carrying amount
Year ended 30 June 2022
At 30 June 2021 net of accumulated depreciation
Additions
Disposals
Depreciation for the year
At 30 June 2022 net of accumulated depreciation
At 30 June 2022
Cost
Accumulated depreciation
Net carrying amount
27,909
16,031
(116)
(12,745)
31,079
89,585
(58,506)
31,079
23,000
14,779
(57)
(9,813)
27,909
74,033
(46,124)
27,909
339
3
(24)
(121)
197
2,708
(2,511)
197
545
2
(10)
(198)
339
2,756
(2,417)
339
3,198
563
(29)
(1,221)
2,511
12,142
(9,631)
2,511
1,942
2,505
(173)
(1,076)
3,198
11,873
(8,675)
3,198
TOTAL
$000
41,452
16,758
(169)
(15,256)
42,785
114,809
(72,024)
42,785
26,027
27,500
(240)
(11,835)
41,452
98,875
(57,423)
10,006
161
-
(1,169)
8,998
10,374
(1,376)
8,998
540
10,214
-
(748)
10,006
10,213
(207)
10,006
41,452
127
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
12. Intangible assets and goodwill
(a)
Intangible assets
Reconciliation of net carrying amounts at the beginning and end of the year for the Group is as below:
Year ended 30 June 2023
At 30 June 2022 net of accumulated amortisation and impairment
Additions
Impairment expense
Disposals
Amortisation for the year
At 30 June 2023 net of accumulated amortisation and impairment
At 30 June 2023
Cost
SOFTWARE
$000
CUSTOMER
RELATION-
SHIPS
$000
GOODWILL
$000
TOTAL
$000
16,149
12,073
(111)
(24)
(5,820)
22,267
102,197
13,687
132,033
-
-
-
(11,649)
90,548
-
-
-
-
12,073
(111)
(24)
(17,469)
13,687
126,502
Accumulated amortisation and impairment
(10,850)
(24,365)
-
33,117
114,913
13,687
161,717
(35,215)
Net carrying amount
Year ended 30 June 2022
22,267
90,548
13,687
126,502
At 30 June 2021 net of accumulated amortisation and impairment
13,304
113,876
13,687
140,867
Additions
Amortisation for the year
At 30 June 2022 net of accumulated amortisation and impairment
At 30 June 2022
Cost
Accumulated amortisation and impairment
Net carrying amount
6,961
(4,116)
16,149
21,574
(5,425)
16,149
-
(11,679)
102,197
114,912
(12,715)
-
-
6,961
(15,795)
13,687
132,033
13,687
-
150,173
(18,140)
102,197
13,687
132,033
128
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
12. Intangible assets and goodwill (continued)
(b) Goodwill
i)
Allocation of goodwill
The Group has allocated goodwill acquired through business combinations to the Tyro Health Cash Generating Unit (“CGU”). As
the only CGU with non-amortising intangible asset, the Group determined the Tyro Health CGU to be the only CGU subject to
an annual impairment test. The Group performed its annual impairment test in June 2023.
Goodwill
Total allocation of goodwill
TYRO HEALTH CGU
2023
$000
13,687
13,687
2022
$000
13,687
13,687
The recoverable amount of the CGU is determined based on “Value-In-Use” calculations using discounted cash flow projections
based on financial budgets and forecasts covering a five-year period with an estimated terminal growth rate. The cash flows are
discounted using a pre-tax discount rate reflecting an estimate of the weighted average cost of capital (WACC).
The Group determined that the carrying amount does not exceed the recoverable amount. No impairment of goodwill at 30
June 2023 has been recorded.
ii)
Key assumptions and sensitivity
The cash flow projections which are used in determining any impairment require management to make significant estimates
and judgements. Each of the assumptions is subject to significant judgement about future economic conditions and the
ongoing development of industries in which the CGUs operate. Forecasted cashflows are risk-adjusted allowing for estimated
changes in the business and the competitive trading environment.
Cash flow projections during the forecast period are based on forecast revenue growth arising from increasing total
transactions volumes for Tyro Health. Forecast increases in gross margin and operating costs have been included to support
the forecast growth in volumes. The pre-tax discount rate applied to the cash flow projections was 9.0% which reflects current
market assessment of the time value of money and the risks specific to the relevant segments in which the CGU operates.
Terminal growth rate is 3.25% consistent with industry forecasts specific to the CGU.
The Group has completed sensitivity analysis over the Tyro Health CGU. The recoverable amount of the Tyro Health CGU is in
excess of the carrying amounts in the respective CGUs. Any reasonable adverse change in key assumptions will not lead to an
impairment.
13. Share-based payments
The Group 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 and rights over ordinary shares in the Company to
employees or Directors who provide services to the Group.
Options and rights 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
Options and rights granted will vest in proportion to the time that passes linearly
during the vesting schedule, subject to the terms and conditions of each grant during
the vesting period. The options and rights generally vest in equal amounts each
month over the vesting period.
Annual linear vesting schedule
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 and rights vest in equal amounts annually over the vesting period and are also
subject to performance criteria.
Performance single vesting schedule Options and rights vest on a single vesting date and are subject to performance
criteria.
Certain option and right grants and any shares issued on the exercise of those options and rights may be subject to a trading
restriction for a minimum period based on the terms and conditions of each respective grant of options and rights.
129
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
13. Share based payments (continued)
(a) Employee Share Option Plan (continued)
Other relevant terms and conditions applicable to options and rights granted under the ESOP include:
•
•
•
•
the term of each option or right grants ranges between a period of 1 year to 7 years from the date of grant as provided in
the grant letter;
each option or right entitles the holder to one ordinary fully paid share;
all awards granted under the ESOP are equity-settled; and
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 and rights 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 1,762,101 options exercised during the year ended 30 June 2023 (2022: 4,310,080).
The weighted average remaining contractual life for share options outstanding as at 30 June 2023 was 2 years (2022: 4 years).
The following table summarises further details of the Company’s share options outstanding at 30 June 2023:
RANGE OF EXERCISE PRICES
CONTRACTUAL LIFE
VESTING CONDITIONS
NUMBER OF OUTSTANDING OPTIONS
179 cents
176 cents
7 years
4 year annual vesting, plus performance
criteria
JUN 2023
1,850,147
JUN 2022
5,584,832
6 years or less
5 year monthly linear vesting
2,530,145
5,214,675
162 cents to 176 cents
7 years or less
No vesting in first 6 months of 5 year
monthly linear vesting period
-
161,181
162 cents
150 cents
7 years or less
5 year monthly linear vesting
40,000
40,000
7 years
4 year annual vesting, plus performance
criteria
1,468,599
4,895,120
37.5 cents to 149 cents
7 years or less
5 year monthly linear vesting
2,397,909
3,948,918
0 cents
Total
6 years
5 year annual linear vesting
828,639
1,919,848
9,115,439
21,764,574
130
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
13. Share based payments (continued)
(b) Fair value of options under the ESOP (continued)
The following table illustrates the number and weighted average exercise prices (WAEP) in cents and movements of share
options during the year:
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
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
JUN 2023
NUMBER
11,284,622
-
(1,762,101)
(3,725,828)
5,796,693
5,374,024
JUNE 2023
WAEP
(CENTS)
126
-
35
149
140
150
JUNE 2022
NUMBER
16,945,628
-
(4,310,080)
(1,350,926)
11,284,622
9,332,889
10,479,952
165
12,409,865
-
-
(7,161,206)
3,318,746
-
9,115,439
5,374,024
-
-
165
166
-
-
-
(1,929,913)
10,479,952
-
21,764,574
9,332,889
JUN 2022
WAEP
(CENTS)
119
-
70
119
126
108
165
-
-
166
165
-
131
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 13. 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 7,310,724 (2022: 7,230,128) service and performance rights as part of the short
and long term incentive arrangements and nil (2022: 308,431) remuneration sacrifice rights as part of an equity incentive
arrangement. The following model inputs were used in the Black-Scholes valuation model to determine the fair value:
FY22 SERVICE RIGHTS (XLT)2
FY22 SERVICE RIGHTS2
FY23 LTI PERFORMANCE RIGHTS
Grant date:
Vesting period
Expiry date
Share price at grant date ($)1
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Grant date:
Vesting period
Oct-22
4 years
Oct-34
$1.51
0%
N/A
N/A
Oct-22
1 year with 12 equal
monthly tranches
Dec-22
3 years
Oct-34 Employment conditions apply
$1.51
0%
N/A
N/A
$1.49
0%
N/A
N/A
ONE-OFF GRANT - CTO
ONE-OFF GRANT - CFO
July-22
Sept-22
3 years with 3 equal annual tranches
30 months with 3 equal tranches vesting
6 month, 18 months and
30 months from grant date
Expiry date
Employment conditions apply
Employment conditions apply
Share price at grant date ($)1
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
$0.66
0%
N/A
N/A
1
2
The Company considers the listed share price near grant date, when determining fair value.
FY22 Service Rights (XLT) and FY22 Service Rights were granted during the year ended 30 June 2022 and were issued during the year ended 30 June 2023.
Opening
Granted
Exercised
Forfeited or expired
Closing
Exercisable at the end of the year
JUN 2023
NUMBER
9,535,747
7,310,724
(1,374,464)
(2,358,772)
13,113,235
2,783,331
JUN 2023
WAEP (CENTS)
-
-
-
-
-
-
JUN 2022
NUMBER
5,412,550
7,538,559
(1,571,915)
(1,843,447)
9,535,747
1,363,456
$1.38
0%
N/A
N/A
JUN 2022
WAEP (CENTS)
-
-
-
-
-
-
132
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 14. Deposits
Deposits
Term deposits
2023
$000
70,667
22,037
92,704
2022
$000
79,204
4,069
83,273
The deposits are at call, earn daily interest with rates that increase for every dollar held for longer than 30 days, 60 days and 90
days. Term deposits are held by merchants for a range of up to 365 days. Deposits and Term Deposits are guaranteed by the
Australian Government up to $250,000 per customer.
15. Trade payables and other liabilities
Current
Accounts payable
Scheme fees, commissions, incentives and other accruals
Commissions payable to Bendigo Bank
Clearing account and other liabilities
Class action settlement1
Non-current
Commissions payable to Bendigo Bank
2023
$000
2022
$000
3,475
16,986
9,653
7,917
5,000
43,031
75,396
75,396
6,370
15,701
9,228
6,126
-
37,425
83,553
83,553
1
The class action settlement is the amount payable by Tyro in accordance with the Court approved settlement of the class action relating to the terminal connectivity issue in
January 2021. The settlement is recoverable from the Group’s insurer (Note 6).
Commissions payable to Bendigo Bank
In October 2020, 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 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).
2023
$000
18,793
66,256
85,049
2022
$000
28,108
64,673
92,781
133
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT 16. Current and non-current provisions
Balance at 1 July 2022
Amounts provided/(utilised) or
(released) during the period
Balance at 30 June 2023
Current
Non-current
Balance at 30 June 2023
ANNUAL LEAVE
LONG SERVICE
LEAVE
MAKE GOOD
PROVISION
OTHER
PROVISIONS
$000
5,597
(225)
5,372
5,372
-
5,372
$000
1,866
484
2,350
1,016
1,334
2,350
$000
548
17
565
-
565
565
$000
4,233
(3,859)
374
374
-
374
TOTAL
$000
12,244
(3,583)
8,661
6,762
1,899
8,661
The make good provision is for the costs of restoring the office space at 55 Market Street to its original condition at the
conclusion of the lease.
In 2021, the Group raised a provision for remediation of the terminal connectivity issue that occurred in January 2021. Total
remediation payments during the year totaled $248,000 (30 June 2022: $5,041,000). Following the settlement of class action
which is recoverable from the Group’s insurer as noted in Note 6 and Note 15, Tyro has released the remaining remediation
provision of $3,719,000 that is not expected to be utilised due to the Court orders dismissing the class action proceedings.
17. Contributed equity and reserves
(i) Movement in ordinary shares on issue
At 1 July 2021
Share options and rights exercised
At 30 June 2022
At 1 July 2022
Share options and rights exercised
At 30 June 2023
Terms and conditions of contributed equity
NUMBER OF
SHARES
511,672,422
5,881,995
517,554,417
517,554,417
3,136,565
$000
274,436
4,362
278,798
278,798
624
520,690,982
279,422
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 paid up in full.
(ii) FVOCI reserve
Balance at the beginning of the year
Revaluation gain/(loss), net of tax
Transfer to accumulated losses
Balance at the end of the year
2023
$000
(689)
282
-
(407)
2022
$000
108
(1,008)
211
(689)
134
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
17 Contributed equity and reserves (continued)
(iii) Share-based payments reserve
Balance at the beginning of the year
Share-based payments transactions
Balance at the end of the year
2023
$000
43,560
11,165
54,725
2022
$000
38,361
5,199
43,560
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
contractual agreements.
(iv) 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
Total reserves at the end of the year
2023
$000
4,214
200
588
5,002
59,320
2022
$000
2,358
567
1,289
4,214
47,085
The general reserve for credit losses has been created to satisfy APRA’s prudential standards for authorised deposit-taking
institutions (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.
(v) Accumulated losses
Balance at the beginning of the year
Profit/(loss) attributable to shareholders of the Group
Transfer to general reserve for credit losses
Transfer from FVOCI reserve
Balance at the end of the year
2023
$000
2022
$000
(166,283)
(134,599)
6,013
(788)
-
(29,617)
(1,856)
(211)
(161,058)
(166,283)
135
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
18. 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, 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).
(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. 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 up to 540 days after the latter of the transaction date or expected delivery date. The Group
manages credit risk associated with its merchant portfolio both at an individual and a portfolio level.
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 internal methodology 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 are in place before a loan can be offered. A merchant must
satisfy the onboarding requirements to be eligible for a loan offer, as well as providing a personal guarantee. Tyro only offers
loans to merchants with a Tyro EFTPOS terminal.
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).
136
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 18. Financial risk management objectives, policies and processes (continued)
(iv) Credit risk (continued)
This table summarises the Group’s credit risk exposures as at reporting date:
30 JUNE 2023
STANDARD & POORS
CREDIT RATING1
CASH AND CASH
EQUIVALENTS
DUE FROM OTHER
FINANCIAL INSTITUTIONS
TRADE AND OTHER
RECEIVABLES
AAA
AA
AA-
A+
A
A-
BBB+
unrated
$000
35,675
-
6,928
-
-
-
-
-
$000
-
-
15,779
-
-
-
-
-
42,603
15,779
$000
265
-
9,694
883
-
-
509
14,009
25,360
30 JUNE 2022
STANDARD & POORS
CREDIT RATING1
CASH AND CASH
EQUIVALENTS
DUE FROM OTHER
FINANCIAL INSTITUTIONS
TRADE AND OTHER
RECEIVABLES
AAA
AA
AA-
A+
A
A-
BBB+
unrated
$000
28,615
-
8,241
-
-
-
-
29
$000
-
-
14,698
-
-
-
-
-
1
2
Long-term credit rating
Includes loans issued under the Government SME guarantee scheme of nil (2022: $38,643).
36,885
14,698
(v) Operational risk
$000
308
-
3,795
776
132
-
359
17,334
22,704
LOANS2
$000
-
-
-
-
-
-
-
50,526
50,526
LOANS2
$000
-
-
-
-
-
-
-
39,504
39,504
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.
137
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
18. Financial risk management objectives, policies and processes (continued)
(vi) Market risk
Market risk is the potential loss of value or potential reduction in expected earnings resulting from movements in interest rates,
foreign exchange rates, commodity prices and other prices. 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 risks 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 floating rate notes 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:
(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 100 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 $878,000 (2022: $790,000). A decrease of 100 basis points in the general cash rate
decrease the Group’s profit and decrease equity by $878,000 (2022: $790,000).
The following table shows the Group’s financial assets and liabilities on which the interest rate sensitivity analysis has been
performed.
30 JUNE 2023
Financial assets
Cash and cash equivalents
Due from other financial institutions
Loans
Floating rate notes
Financial liabilities
Deposits
30 JUNE 2022
VARIABLE
INTEREST RATE
< 3 MONTHS
FIXED
INTEREST RATE
3 TO 12 MONTHS
$000
$000
$000
42,603
-
-
70,550
-
13,818
26,075
-
-
1,961
17,690
-
(70,667)
(3,937)
(18,100)
VARIABLE
INTEREST RATE
< 3 MONTHS
FIXED
INTEREST RATE
3 TO 12 MONTHS
$000
$000
$000
Financial assets
Cash and cash equivalents
Due from other financial institutions
Loans
Floating rate notes
Convertible note in me&u
Financial liabilities
Deposits
36,885
-
-
71,185
-
-
14,678
21,530
-
1,510
(79,204)
(4,069)
-
20
12,732
5,242
-
-
-
-
-
-
> 1 YEAR
$000
-
-
6,761
-
-
> 1 YEAR
$000
-
-
TOTAL
$000
42,603
15,779
50,526
70,550
(92,704)
TOTAL
$000
36,885
14,698
39,504
71,185
1,510
(83,273)
138
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 18. Financial risk management objectives, policies and processes (continued)
(vi) Market risk (continued)
(ii) Foreign currency risk
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 and repairs from
foreign suppliers are transacted in foreign currencies at the exchange rate prevailing at the transaction date. At the reporting
date the Group has US Dollar, Euro and British Pound Sterling 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 both the Group’s profit and equity by $177,000 (2022: $246,000). A depreciation of 15% of the US dollar and Euro
compared to the Australian dollar will reduce both the Group’s profit and equity by $240,000 (2022: $182,000).
The following table shows the financial assets and liabilities on which the foreign currency sensitivity analysis has been
performed:
USD term deposit
Trade payables
Trade payables
Trade payables
(iii) Other price risk
USD
EUR
USD
GBP
AUD
2023
$000
1,961
-
(20)
-
AUD
2022
$000
1,887
(2,862)
(412)
(6)
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 foreign 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 losses 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 2023 financial year in the form of Tier 1 Capital which is the highest quality
component of capital.
139
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
18. Financial risk management objectives, policies and processes (continued)
(vii) Capital Management (continued)
Capital Adequacy
Tier 1 Capital
Common Equity Tier 1 Capital
Contributed capital
Accumulated losses & reserves
Regulatory adjustments to Common Equity Tier 1 Capital
Deferred tax assets in excess of deferred tax liabilities
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-based capital ratios
Common Equity Tier 1
Tier 1
Total Capital ratio
2023
$000
2022
$000
279,422
(107,293)
172,129
(17,149)
(20,686)
(42,242)
(5,784)
(85,861)
86,268
-
278,798
(124,672)
154,126
(13,721)
(12,974)
(55,361)
(2,542)
(84,598)
69,528
-
86,268
69,528
1,931
1,931
88,199
169,904
%
51
51
52
2,123
2,123
71,651
185,613
%
37
37
39
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.
The Group manages this risk by the Board approved liquidity framework. Responsibility for liquidity management is delegated
to the Chief Financial Officer (CFO) and Chief Executive Officer (CEO). The CFO manages liquidity on a daily basis and submits
regular reports to ALCO, and to the BRC at the seating of 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. The liquidity risk management
framework models the Group’s 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.
140
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
18. Financial risk management objectives, policies and processes (continued)
(viii) Liquidity risk (continued)
Maturity analysis
Amounts in the table below are based on the Group’s contractual undiscounted cash flows for the remaining contractual
maturities.
Financial liabilities
CONTRACTUAL CASH FLOWS
AS AT 30 JUNE 2023
< 3 MONTHS
3 TO 6
MONTHS
>6 TO 12
MONTHS >1 TO 5 YEARS
>5 YEARS
TOTAL
Variable rate deposits
Term deposits
Lease liabilities
Commissions payable to Bendigo Bank
Trade payables and other liabilities
$000
(70,667)
(4,087)
(1,069)
(2,440)
(33,378)
$000
-
(4,663)
(1,069)
(2,468)
-
$000
-
(13,138)
(2,256)
(5,004)
-
$000
-
(149)
(20,126)
(44,691)
-
$000
-
-
(15,227)
(39,915)
(70,667)
(22,037)
(39,747)
(94,518)
-
(33,378)
(111,641)
(8,200)
(20,398)
(64,966)
(55,142)
(260,347)
AS AT 30 JUNE 2022
Variable rate deposits
Term deposits
Lease liabilities
(79,204)
(4,069)
-
-
-
-
Commissions payable to Bendigo Bank
(2,273)
(2,360)
Trade payables and other liabilities
(28,009)
-
-
-
(1,897)
(4,783)
-
-
-
-
-
(79,204)
(4,069)
(19,076)
(20,671)
(41,644)
(42,598)
(51,920)
(103,934)
-
-
(28,009)
(113,555)
(2,360)
(6,680)
(61,674)
(72,591)
(256,860)
Amounts falling due after greater than 2 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
The fair value is calculated using quoted prices in active markets.
Level 2
The fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3
The fair value is estimated using inputs for the asset or liability that are not based on observable market data.
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 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, due to
their short-term maturity or repricing profile, the carrying amount is an approximation of fair value.
30 JUNE 2023 ($000)
30 JUNE 2022 ($000)
LEVEL 2
LEVEL 3
TOTAL
LEVEL 1
LEVEL 2
LEVEL 3
FINANCIAL ASSETS
Floating rate notes
Loans
Financial investment in me&u
Convertible note in me&u
LEVEL 1
70,550
-
-
-
70,550
-
-
-
-
-
-
70,550
71,185
50,526
50,526
3,974
3,974
-
-
-
-
-
54,500
125,050
71,185
-
-
-
-
-
TOTAL
71,185
-
39,504
39,504
-
1,510
-
1,510
41,014
112,199
141
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
18. Financial risk management objectives, policies and processes (continued)
(ix) Fair values (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 tradeable 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 is 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 30% and 36%;
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 Nil; and
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 $112,000 (June 22: $47,000) and positive $112,000 (June 22: $47,000) to profit and loss.
Equity investments
At the reporting date, the Group held unlisted equity instruments in Paypa Plane and 100% of the share capital of Medipass
which was acquired on 31 May 2021. Paypa Plane is valued using the equity accounting method as noted in Note 10.
Transfer between categories
There were no transfers between Level 1, Level 2 or Level 3 during the financial year.
142
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 19. 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.
(b) Contingent liabilities arising from commitments
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
(ii) Bank Guarantees in favour of:
Bendigo and Adelaide Bank Limited - Alliance Agreement
Guarantees in relation to office leases
National Australia Bank Limited to guarantee for Medipass Direct Debit Facility
2023
$000
3,361
524
3,885
6,000
4,893
1,000
11,893
2022
$000
3,287
524
3,811
6,000
4,887
-
10,887
The Group has provided irrevocable standby letters of credit of $3,885,000 (2022: $3,811,000) secured through fixed charges
over term deposits with the Commonwealth Bank of Australia and Westpac Banking Corporation, to Mastercard International
and Visa International. These are one-year arrangements that are subject to automatic renewal on a yearly basis. Mastercard
International and Visa International, at their discretion, may increase the required amounts of the standby letters of credit upon
written request to the Group. 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 Group.
A bank guarantee in favour of Bendigo and Adelaide Bank Limited is held with Westpac Banking Corporation to mitigate the
default risk created by Bendigo settling funds to Alliance merchants that hold a settlement account with Bendigo ahead of
funds receipt from Tyro.
The bank guarantee in relation to office leases is mainly held in relation to the lease arrangement for the 55 Market Street
office premises. The amount represents 6 months rent, outgoings and GST and is refundable on expiry of the lease agreement,
subject to satisfactory vacation of the leased premises.
A bank guarantee in favour of National Australia Bank to guarantee a direct debit facility for Medipass Solutions Pty Ltd.
143
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
20. List of subsidiaries
Parent entity
Tyro Payments Limited
Subsidiaries
Medipass Solutions Pty Ltd1
Medipass Solutions Limited2
Tyro Payments (Ben Alliance) Pty Ltd3
PRINCIPAL PLACE OF BUSINESS
OWNERSHIP INTEREST
2023
2022
Australia
Australia
United Kingdom
Australia
100%
100%
100%
100%
100%
100%
1 Medipass Solutions Pty Ltd has changed its name to Tyro Health Pty Ltd on 27 July 2023.
2
Medipass Solutions Ltd was lodged for strike off on 28 June 2023.
Tyro Payments (Ben Alliance) Pty Ltd was lodged for deregistration on 4 July 2023.
3
21. 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 profit/(loss) attributable to ordinary shareholders used to calculate basic and diluted
earnings per share
2023
$000
6,013
2023
NUMBER
2022
$000
(29,617)
2022
NUMBER
Weighted average number of ordinary shares used in calculating basic earnings per share
519,211,261
515,660,709
Weighted average number of potentially dilutive ordinary shares
535,823,484
542,333,850
Basic
Diluted
For the year ended 30 June 2022 Diluted EPS is consistent with basic EPS due to the Group currently generating negative earnings.
2023
CENTS
1.16
1.12
2022
CENTS
(5.74)
(5.74)
144
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
22. Auditor’s remuneration
Fees in respect of the role of the appointed auditor
Audit and review of the financial reports1
Fees for other non-assurance services
Tax compliance
Other assistance and services
2023
2022
440,000
415,000
-
21,500
17,000
-
461,500
432,000
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 integrity 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.
23. Related party disclosures
(a) Compensation of Key Management Personnel
The amounts disclosed in the table are the amounts recognised as an expense during the financial year related to the following
Key Management Personnel.
DIRECTORS
David Thodey1
Fiona Pak-Poy2
Robbie Cooke3
David Fite
Claire Hatton
Aliza Knox
Paul Rickard
Shefali Roy
EXECUTIVES
Robbie Cooke3
Jonathan Davey
Steve Chapman
TITLE
Chair and Non-executive Director
Chair and Non-executive Director
Chief Executive Officer and Managing Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
TITLE
Chief Executive Officer and Managing Director
Chief Executive Officer
Chief Risk Officer
Praveenesh Pala
Chief Financial Officer
1
2
3
Resigned as Chair and Non-executive Director on 1 March 2023
Elected as Chair on 1 March 2023
Resigned as Chief Executive Officer and Managing Director on 3 October 2022
APPOINTED
16 November 2018
4 September 2019
18 October 2019
3 July 2018
5 January 2022
21 April 2021
28 August 2009
5 January 2022
APPOINTED
23 March 2018
3 October 2022
11 June 2021
20 October 2014
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
23. Related party disclosures (continued)
(a) Compensation of Key Management Personnel (continued)
Compensation of Key Management Personnel
Short-term benefits
Post employment benefits
Termination Benefits
Long-term benefits (long service leave)
Share-based payments1
Total
2023
2022
3,032,583
3,062,298
141,711
222,760
15,552
123,609
-
55,450
2,770,675
(482,733)
6,183,281
2,758,624
1
The negative accounting value mainly relates to management’s judgement that the FY19 LTI Option Plan only has a certain percentage probability of vesting. As such, a
proportion of the prior year share-based payments expense for these options was reversed.
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 ($)
2023
NUMBER OUTSTANDING
2022
NUMBER OUTSTANDING
FY15/16
FY16/17
FY17/18
FY18/19
FY18/19
FY18/19
FY18/19
FY19/20
FY20/21
FY20/21
FY21/22
FY21/22
FY21/22
FY21/22
FY22/23
FY22/23
FY22/23
FY22/23
FY23/24
FY23/24
FY24/25
FY24/25
FY25/26
FY28/29
FY26/27
No expiry date
FY32/33
No expiry date
FY33/34
No expiry date
FY33/34
FY34/35
No expiry date
FY32/33
$0.600
$1.490
$1.760
$0.000
$1.760
$1.500
$0.000
$1.790
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
$0.000
-
159,401
375,000
57,144
-
982,318
-
802,827
66,801
2,159
141,126
18,357
297,619
297,619
75,428
1,642,734
750,000
21,505
159,401
375,000
480,953
1,818,180
2,618,131
800,000
2,540,412
234,302
76,192
535,833
46,893
-
-
-
-
-
During the year, 2,468,162 rights were granted to Key Management Personnel (2022: 582,726).
146
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
24. Parent entity disclosures
As at, and throughout the financial year ended 30 June 2023, the parent entity of the Group was Tyro Payments Limited.
Result of parent entity
Profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss) 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
2023
$000
6,650
282
6,932
148,641
283,791
432,432
146,096
106,462
252,558
179,874
279,422
59,320
2022
$000
(28,197)
(1,008)
(29,205)
122,152
288,846
410,998
132,484
117,361
249,845
161,153
278,798
47,085
(158,868)
(164,730)
179,874
161,153
25. Contingent Liabilities
In relation to the terminal connectivity issue in January 2021, a class action proceeding was filed against Tyro in October 2021 in
the Federal Court of Australia on behalf of impacted customers.
In February 2023, following a Court-ordered mediation, Tyro entered into a Settlement Deed relating to an in-principle
settlement of the class action proceeding. On 19 May 2023, the Federal Court of Australia approved the settlement of the class
action and on 19 June 2023, the court dismissed the proceedings (such dismissal being a bar of any future claim or proceeding
except for any merchants that opted out of the proceedings). As at 30 June 2023, Tyro recognised a class action settlement
payable of $5,000,000 (being the agreed settlement amount) (Note 15) which is to be paid by Tyro’s insurer (Note 6). As a result,
no contingent liability remains at 30 June 2023. Tyro is also expected to recover $820,000 in costs relating to the terminal
connectivity issue in January 2021 (Note 2).
On 7 August 2023, the appeals period for the orders dismissing the class action lapsed.
26. Matters subsequent to the end of the financial year
On 4 July 2023 Tyro Payments (Ben Alliance) Pty Ltd was lodged for deregistration. On 27 July 2023 Medipass Solutions Pty Ltd
legally changed its name to Tyro Health Pty Ltd.
On 7 August 2023, the appeals period for the orders dismissing the class action relating to the January 2021 terminal
connectivity issue lapsed. On 21 August 2023, the settlement amount was paid by the Group’s insurer.
In the opinion of the Directors, other than the two matters noted above, there have been no matters or circumstances which
have arisen between 30 June 2023 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.
147
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
Directors’
Declaration
In the opinion of the Directors:
(a) the Consolidated Financial Statements and Notes of the Group set out on pages 101 to 147:
(i) comply with the Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(ii) give a true and fair view of the Group’s financial position as at 30 June 2023 and its performance for
the financial year ended on that date.
(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 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.
Fiona Pak-Poy
Chair
Sydney, 29 August 2023
Paul Rickard
Non-executive Director
148
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
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 2023, 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 2023
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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Page 2
Valuation of contingent consideration
Why significant
How our audit addressed the key audit matter
As detailed in Note 1(c) of the financial report, the
Group has a long-term merchant acquiring alliance
with Bendigo and Adelaide Bank Limited. The
consideration under the alliance contract 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 contingent consideration
liability recorded and the judgement involved in
measuring the liability, this was considered to be a
key audit matter.
Our audit procedures included the following:
• Read relevant agreements to obtain an
understanding of the key terms.
• Evaluated, with the involvement of our
valuation experts, the methodology used by
the Group to determine the value of the
contingent consideration at reporting date,
the underlying assumptions and estimates
applied, and the mathematical accuracy of
the supporting calculations.
• We considered the consistency of
judgements and assumptions made with
respect to other accounting estimates and
models.
• Evaluated the financial performance of the
alliance against forecasts on which the
valuation of the contingent consideration is
based.
• Assessed the adequacy of the related
disclosures within the financial report
regarding the contingent consideration.
Recoverability of deferred tax assets
Why significant
How our audit addressed the key audit matter
The financial statements include $16.5 million of
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 and the ability of the Group to generate
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.
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Page 3
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 $379.1 million in revenue from
merchant service fees for the year ended 30 June
2023.
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:
• Understood the Group’s revenue accounting
and assessed whether the Group’s
accounting policies complied with the
requirements of Australian Accounting
Standards.
• Assessed the operating effectiveness of key
controls over the recognition and
measurement of revenue.
• 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.
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:
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.
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Page 4
• 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.
We also carried out specific tests, on a sample basis,
of system functionality that was key to our audit
approach in order to assess the accuracy of certain
system calculations, the generation of certain
reports and the operation of certain system enforced
access controls. Our IT specialists were involved in
performing these procedures.
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.
Carrying value of goodwill
Why significant
How our audit addressed the key audit matter
As detailed in Note 12, the Group recorded $13.7
million in goodwill as at 30 June 2023. Goodwill is
tested annually for impairment and requires the
Group to estimate the recoverable amount of the
relevant cash-generating unit (CGU) to be
determined. The key inputs and judgements
involved in the impairment assessment includes:
• Determination of CGUs;
• Discount rates, terminal growth rates and
revenue and expense assumptions used in
the discounted cashflow models; and
• Considering the sensitivity of the
impairment assessment to reasonable
possible changes in key assumptions.
Given the high degree of judgement and
complexity in assessing the carrying value of
goodwill, we considered this to be a key audit
matter.
Our audit procedures included the following:
• Assessed the Group’s determination of CGUs
used in the impairment model, based on our
understanding of the nature of the Group’s
business and the economic environment in
which it operates.
• Understood and evaluated the Group’s
process for performing goodwill impairment
assessments and the determination of any
asset impairment outcomes.
• We involved our valuation specialists to
assist in assessing the appropriateness of the
impairment models including key inputs into
the models such as the discount rates and
growth rates.
• We tested the mathematical accuracy of the
impairment models.
• We assessed whether cash flow forecasts
incorporated in the impairment assessment
were consistent with Board approved
forecasts.
• We assessed the Group’s sensitivity analysis
and evaluated whether any reasonably
foreseeable change in assumptions could
lead to an impairment.
• We assessed the adequacy of the disclosures
in Note 12 of the financial report.
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Page 5
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 2023 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
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.
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Page 6
► 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.
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 53 to 87 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Tyro Payments Limited for the year ended 30 June 2023,
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
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Page 7
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
29 August 2023
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023FINANCIAL REPORT
156
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 Other
Information
157
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OTHER INFORMATION l
r
e
d
o
h
e
r
a
h
S
n
o
i
t
a
m
r
o
f
n
I
The shareholder information set out below is based on the information recorded in the Tyro Payments
Limited share register as at 15 August 2023.
Ordinary Shares
Tyro has on issue 521,767,011 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
Regal Funds Management Pty Ltd and its
associates
DATE OF
INTEREST
NUMBER OF
ORDINARY SHARES1
% OF ISSUED
CAPITAL2
13 July 2023
38,444,222
7.38%
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
ORDINARY SHARES1
%
NO. OF HOLDERS
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
415,487,515
68,036,652
18,342,394
16,661,636
3,238,814
79.63
13.04
3.52
3.19
0.62
213
2,517
2,424
6,409
6,557
%
1.18
13.89
13.38
35.37
36.19
521,767,011
100.00
18,120
100.00
Unmarketable Parcels
0
0.00
0
0.00
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.
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023
Top 20 Largest Shareholders
The names of the 20 largest quoted equity security holders as they appear on the Tyro share register at 15 August
2023 are listed below:
NAME
NUMBER OF SHARES
% OF TOTAL SHARES
1
2
3
4
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
5 MS DANITA RAE LOWES
6
7
8
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
INVIA CUSTODIAN PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED
JASGO NOMINEES PTY LTD
10 HANS-JOSEF JOST STOLLMANN
11 UBS NOMINEES PTY LTD
12 WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
13 BNP PARIBAS NOMS PTY LTD
14
JH 7 PROPERTIES PTY LTD
15 SOPHIA-KONSTANTINA FIONA STOLLMANN
16 BNP PARIBAS NOMS(NZ) LTD
17 MR KENNETH JOSEPH HALL
18 EUCLID CAPITAL PARTNERS LLC
19 BNP PARIBAS NOMS PTY LTD
20 SANDINI PTY LTD
Total
84,820,610
72,469,700
71,542,666
19,519,806
19,028,582
17,908,875
11,475,000
5,101,218
5,060,726
4,659,442
4,526,822
4,500,000
4,089,669
3,272,728
3,261,237
2,651,424
2,500,000
2,425,000
2,279,202
2,022,702
16.3
13.9
13.7
3.7
3.6
3.4
2.2
1.0
1.0
0.9
0.9
0.9
0.8
0.6
0.6
0.5
0.5
0.5
0.4
0.4
343,115,409
65.8
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TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OTHER INFORMATION Domicile of Ordinary Shareholders1
DOMICILE
Australia
Australia Capital Territory
New South Wales
Northern Territory
Queensland
South Australia
Tasmania
Victoria
Western Australia
Overseas
Total
1
As at 31 July 2023.
NUMBER OF SHARES
% NUMBER OF HOLDERS
520,053,073
1,849,669
332,679,490
264,094
21,253,411
8,226,446
1,107,329
141,752,205
12,920,429
1,713,938
99.7
0.4
63.8
0.1
4.1
1.6
0.2
27.2
2.5
0.3
18,009
319
8,452
71
2,639
1,097
202
4,022
1,207
180
%
99.0
1.8
46.5
0.4
14.5
6.0
1.1
22.1
6.6
1.0
521,767,011
100.00
18,189
100.00
Unquoted Equity Securities
Performance rights in respect of ordinary shares issued under the Tyro STI and LTI Rights Plans,
the Tyro Remuneration Sacrifice Rights Plan and the Liquidity Event Performance Rights Plan
Options in respect of ordinary shares issued under the Tyro Options Plans
NUMBER ON
ISSUE
11,817,486
9,028,113
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.
160
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023 e
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Directors
Fiona Pak-Poy - Non-executive Director &
Chair of the Board
David Fite – Non-executive Director
Claire Hatton – Non-executive Director &
Chair of People Committee
Aliza Knox – Non-executive Director
Shefali Roy - Non-executive Director
Paul Rickard – Non-executive Director & Chair
of Audit Committee and Risk Committee
Registered and Principal
Administrative Office in
Australia
Tyro Payments Limited
18/55 Market Street
Sydney, NSW, 2000, Australia
Telephone: 1300 966 639
ABN: 49 103 575 042
Website Address
www.tyro.com
Special Counsel and Company
Secretary
Jairan Amigh
email: jamigh@tyro.com
Investor Relations
Giovanni Rizzo
email: grizzo@tyro.com
Media
Gemma Garkut
email: ggarkut@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
https://investors.tyro.com/investor-centre/
email: registrars@linkmarketservices.com.au
Australian Securities
Exchange (ASX) Listing
Tyro Payments Limited shares are listed on
the ASX under the code TYR.
Director Profiles
Refer to profiles on pages 91 to 94.
Executive Leadership Team
Refer to profiles on pages 95 to 97.
Telephone within Australia: 1300 554 474
Telephone outside Australia: +61 1300 554 474
Fax: +61 2 9287 0303
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/
161
TYRO PAYMENTS LIMITED - ANNUAL REPORT 2023OTHER INFORMATION
www.tyro.com