FINDI LIMITED - Annual Report 2012

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ABN 98 057 335 672

2012

ANNUAL FINANCIAL REPORT

Corporate Directory ................................................................................................................................. 3
Letter to Shareholders ............................................................................................................................. 4
Review of Operations .............................................................................................................................. 5
Directors’ Report..................................................................................................................................... 7
Remuneration Report (Audited) ............................................................................................................ 11
Directors’ Declaration............................................................................................................................ 20
Consolidated Statement of Comprehensive Income ............................................................................ 21
Consolidated Statement of Financial Position ...................................................................................... 22
Consolidated Statement of Cash Flows ................................................................................................ 23
Consolidated Statement of Changes in Equity ..................................................................................... 24
Notes to Accounts ................................................................................................................................. 25
1. General Information .................................................................................................................. 25
2. Significant Accounting Policies ................................................................................................ 27
3. Profit and Loss Items ................................................................................................................ 33
4. Income Tax ............................................................................................................................... 33
5. Loss per Share ......................................................................................................................... 34
6. Cash and Cash Equivalent ....................................................................................................... 35
7. Trade and Other Receivables .................................................................................................. 35
8. Loans and Receivables ............................................................................................................ 35
9. Property, Plant and Equipment ................................................................................................ 36
10. Trade and Other Payables ....................................................................................................... 36
11. Provisions ................................................................................................................................. 36
12. Contributed Equity .................................................................................................................... 37
13. Reserves .................................................................................................................................. 38
14. Operating Segments ................................................................................................................ 38
15. Share Based Payments............................................................................................................ 41
16. Reverse Acquisition .................................................................................................................. 42
17. Financial Instruments ............................................................................................................... 43
18. Key Management Personnel Disclosure .................................................................................. 46
19. Commitments ........................................................................................................................... 49
20. Contingent Assets and Liabilities ............................................................................................. 49
21. Events after Balance Sheet Date ............................................................................................. 49
22. Parent Entity Information .......................................................................................................... 50
Auditors’ Independence Declaration..................................................................................................... 51
Independent Auditors’ Report............................................................................................................... 52

Transaction Solutions International Limited ANNUAL REPORT 2012 2

Corporate Directory

Directors

Chairman

Paul Boyatzis Chairman Gary Foster Managing Director Yew Seng Kwa Executive Director Simon Cato Non-Executive Director James Carroll Non-Executive Director

Contact Details

Telephone: (61 8) 6500 0225 Facsimile: (61 8) 9226 2235

Bankers

Company Secretary

Australia and New Zealand Banking Group Limited

Phillip MacLeod

Registered and Principal Office

24 Colin Street West Perth, WA 6005

Stock Exchange Listing

ASX Limited Home Exchange: Perth, Western Australia Code: TSN

Solicitors

Hardy Bowen, Lawyers 28 Ord Street West Perth, WA 6005

Auditors

Deloitte Touche Tohmatsu Woodside Plaza 240 St Georges Terrace Perth WA 6000

Share Registry

Computershare Investor Services Pty Ltd Level 2, Reserve Bank Building 45 St Georges Terrace Perth, WA 6000 Telephone: 1300 557 010 Facsimile: (61 8) 9323 2033

Transaction Solutions International Limited ANNUAL REPORT 2012 3

Letter to Shareholders

Dear Shareholder,

During the last financial year Transaction Solutions International (“TSI”) continued to successfully build its core business in India. Established in 2006, TSI’s business model is based on the provision and management of financial hardware and systems to major Indian banks and utility companies. TSI receives a revenue stream from these banks and utilities for each transaction, based on a recurring revenue model.

The company’s core business focuses on the supply and service of bank branded automatic teller machines (“ATMs”) to major banking institutions in the rapidly expanding market of India. In the last 12 months, TSI has been able to grow its bank branded ATM installation base from 485 to 815, an increase of 68% in the year to 31 March 2012.

In relation to the broader Indian economy, whilst the overall economy continued to grow at a rate of approximately 6%, the Indian government’s policy execution to control areas such as inflation has been slower than expected and has impacted some areas of business during the last year. This has caused intermittent dips within the economy, but certainly not to the extent of other some other developed markets.

Optimism remains about the future of India as an investment destination. Factors such as rural India’s potential growth rate, which currently has a per capita GDP that is lower than the average for India, is expected to increase.

The Board views India as an ideal market for the TSI business model due to its favourable population and demographic statistics, along with the fact that India still has the lowest penetration of ATMs per capita head globally.

The Directors would like to thank all staff and contractors for their contribution to the continuing development of the Company.

I recommend reading this report to gain further understanding of the Company’s strategy and operations, and I thank you for your support.

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Paul Boyatzis Chairman

25 June 2012, Perth

Transaction Solutions International Limited ANNUAL REPORT 2012 4

Review of Operations

The Company’s principal activity during the year was to continue its business of building recurring revenue through the deployment of ATMs on behalf of major banks in India. In addition the Group has contracts to service the financial payments sector through automation of bill payment processes in a market that is migrating from paper based to electronic transactions.

OPERATING RESULTS

The Group recorded an after tax loss for the year of $1,418,842 (period 1 July 2010 to 31 March 2011: $902,719). TSI India, the operating division within the Group, recorded positive earnings before depreciation charges of $1,030,362 (2011: period 1 July 2010 to 31 March 2011 $942,177). The Group loss was incurred after a charge of $221,087 (2011: $126,623) for options issued to two directors and two employees to acquire shares in the Company during the current and prior years and depreciation and amortisation charges of $1,344,865 for the year (2011: $829,918) as the Group continued to invest in the expansion of its ATM network. The balance of the loss is attributable to costs associated with business development activities and other costs associated with the operation of a publicly listed company in Australia.

At the end of the year the overseas assets of the Group are converted to Australian dollars at the prevailing rates of exchange. For accounting purposes a debit adjustment to the foreign currency translation reserve of $2,113,242 (2011: debit $1,972,489) was recognised against those assets as a result of movement in those exchange rates during the year.

The Group is an independent owner and operator of Bank ATM’s in India, having established an enviable working relationship and reputation with its clients who are predominantly major top tier banks.

The Group’s continued growth and success to date is in part due to its provision of end to end solutions to major banks and corporates in India. The Group owns, manages and operates its financial hardware and systems in return for a fee per transaction. It is the opinion of the Directors that this recurring revenue model assists the Group in producing a business model that is highly scalable.

The Group has agreements with a large number of national companies including major banks, utilities and corporates. It is these corporations (not consumers) who form the Group’s customer base, and from whom the Group receives its revenues.

During the last 12 months the number of ATMs within the network increased by 68% from 485 at the start of the year to 815 by 31 March 2012. Approximately 20% of the ATMs deployed in the year were deployed in the final quarter of the financial year. Due to newly installed ATMs generating lower transaction volumes than mature machines we expect a continued increase in transaction and revenue volumes from recently deployed ATMs in the next financial year.

Due to commitments and signed agreements in the pipeline the Group will continue to expand its ATM network into the next financial year.

Transaction Solutions International Limited ANNUAL REPORT 2012 5

Transaction volumes and revenues continued to increase as is demonstrated in the following charts:

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Chart 1: TSI India Gross revenues by quarter in Indian Rupee (INR)

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Chart 2: TSI India Number of transactions by quarter

CORPORATE AND FINANCIAL POSITION

At 31 March 2012, the Group had cash and bank balances of $6,383,560 and net assets of $18,845,954.

BUSINESS STRATEGIES AND PROSPECTS

The Company currently has the following business strategies and prospects over the medium term:

Continuing to develop its ATM and bill payment solutions business in India

Transaction Solutions International Limited ANNUAL REPORT 2012 6

Directors’ Report

Your directors of Transaction Solutions International Limited (“ TSI Limited ”) submit herein the annual financial report of the company for the financial year ended 31 March 2012. In order to comply with the provisions of the Corporations Act 2001, the Directors’ Report is as follows.

DIRECTORS

The names of the Company’s directors and secretary in office during the year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mr Paul Boyatzis – Non Executive Chairman

Mr Boyatzis has over 25 years’ experience in the investment and equity markets, particularly with emerging growth companies within the Mining and Industrial sectors.

Mr Boyatzis is a member of the Australian Institute of Company Directors and the Securities and Derivatives Industry Association. He has served as Chairman and Director of a number of public and private companies globally.

Mr Boyatzis is a current member of the Securities and Derivatives Industry Association and a current member of the Certified Practicing Accountants of Australia.

During the three year period to the end of the financial year Mr Boyatzis has held a directorship in – Hemisphere Resources Limited (October 2006 present), Ventnor Resources Limited (September 2010 – present) and Aruma Resources Limited (January 2010 – present).

Mr Gary Foster – Managing Director

Mr Gary Foster was instrumental in building one of the largest independent electronic transaction companies in Australia. Mr Foster oversees all subsidiaries of the Group and its business units. These include companies in the United Kingdom, Australia and India.

Mr Foster has been in executive leadership and management roles for three financial and e- transaction payment companies and is co-founder of the Group business.

Mr Foster is a current member of the Australian Institute of Company Directors.

During the three year period to the end of the financial year Mr Foster has not held a directorship in any other public listed companies.

Mr Yew Seng Kwa – Executive Director

Mr Yew Seng Kwa has acted as the senior finance executive for public listed companies in Australia and Hong Kong. Mr Yew Seng Kwa has extensive experience of all aspects in financial management, strategic planning, project development and transaction based business operations of multi-national companies.

Mr Yew Seng Kwa has a Bachelor of Commerce and a Master of Administration degree. He is a member of the Institute of Chartered Accountants in Australia and the Australian Institute of Company Directors.

Mr Yew Seng Kwa has not held any other directorships of publicly listed companies in the last three years.

Transaction Solutions International Limited ANNUAL REPORT 2012 7

Mr Simon Cato – Non Executive Director

Mr Cato has had over 25 years of capital markets experience in broking, regulatory roles and as a director of listed companies. Initially, he was employed by the ASX in Sydney and in Perth. Over the last 20 years he has been an executive director and/or responsible executive of three stockbroking firms and in those roles he has been involved in many aspects of broking including management issues such as credit control and reporting to regulatory bodies in the securities industry. As a broker he has also been involved in the underwriting of a number of IPO listings in the dual role of broker and director.

Mr Cato holds a BA (USYD).

During the three year period to the end of the financial year Mr Cato has held directorships in the following public companies:

Advanced Share Registry Services Limited (since 22 August 2007), Greenland Minerals and Energy Limited (since 21 February 2006), Queste Communications Limited (since 6 February 2008), Bentley Capital Limited (from 5 February 2004 to 29 April 2010) and Convergent Minerals Limited (from 25 July 2006 to 19 December 2011).

Mr James Carroll – Non-Executive Director (appointed 1 June 2012)

James Carroll has more than 20 years senior commercial experience, including more than 10 years involved in the electronic payments and technology industry. He has held the positions of Chief Financial Officer and joint Chief Executive Officer of publicly listed companies working in international markets and has been responsible for business investment and planning for a number of organisations.

Mr Carroll is a member of the Institute of Chartered Accountants in Australia and also a Fellow of the Financial Services Institute of Australasia. He holds a B.Bus and Graduate Diploma (Applied Finance and Investment).

In the last three years he has not held any other directorships of publicly listed companies in Australia.

Mr Phillip MacLeod – Company Secretary

Mr MacLeod has over 20 years commercial experience and has held the position of company secretary with listed public companies since 1995. Mr MacLeod has provided corporate, management and accounting advice to a number of public and private companies involved in the resource, technology, property and healthcare industries.

Mr MacLeod is a current member of the Chartered Secretaries Institute.

DIRECTORS’ INTEREST

As at the date of this report, the Directors interest in the securities of Transaction Solutions International Limited are as follows:

Director	Director's Interest	Director's Interest
	Shares	Options
Paul Boyatzis	122,482,581	-
Gary Foster	175,658,478	-
Yew Seng Kwa	3,500,000	15,087,500
Simon Cato	1,750,000	2,000,000
James Carroll	-	-

Transaction Solutions International Limited ANNUAL REPORT 2012 8

CORPORATE STRUCTURE

TSI Limited is a Company limited by shares that is incorporated and domiciled in Australia. TSI Limited has prepared a consolidated report incorporating an entity that was acquired under a reverse takeover, Transaction Solutions International Limited (an UK registered company), Transaction Solutions International (India) Pvt Ltd (an Indian registered company) and Transaction Solutions International Pty Ltd (an Australian registered company) (together the “Group”).

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities of the Group during the year were to develop and grow the business of operating bank automated teller machines and bill payment systems in India.

RESULTS OF OPERATIONS

The operating loss after income tax of the Group for the year was $1,418,842 (period ended 31 March 2011: loss of $902,719).

The basic and diluted loss per share for the Group for the year was 0.08 cents (2011 loss 0.07 cents)

No dividend has been paid during the year, or is recommended for the year ended 31 March 2012.

FINANCIAL POSITION

The net assets of the Group have increased by $3,257,382 since 31 March 2011 to $18,845,954. This is largely the result of shares issues during the year.

The Group’s working capital, being current assets less current liabilities, was $7,727,317 at 31 March 2012 (2011: $6,495,618).

CHANGE IN YEAR END REPORTING DATE

In the prior period the Company elected to change the financial reporting date from 30 June to 31 March. Therefore the reporting period for the current year is 1 April 2011 to 31 March 2012. The prior year reporting period is for the period 1 July 2010 to 31 March 2011.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the financial year not otherwise dealt with in this report.

SIGNIFICANT EVENTS AFTER BALANCE DATE

Subsequent to the balance date the Company appointed James Carroll as a Non-Executive Director.

Other than the above no matters or circumstances have arisen since the end of the year which have significantly affected or may significantly affect the operations or the state of affairs of the consolidated entity in the future financial years.

LIKELY DEVELOPMENTS

The Group will focus on the business strategies and prospects outlined in the Review of Operations section of this report. All of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved. If any or all of these activities are successfully completed, The Group's financial prospects may materially change. Therefore the Board is unable to provide any further comment on likely developments or expected results.

Transaction Solutions International Limited ANNUAL REPORT 2012 9

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation.

SHARE OPTIONS

The Company issued 10,000,000 options over unissued ordinary shares to Mr Yew Seng Kwa, a director of the Company. The options are exercisable at 2.10 cents per option with an expiry date of 14 August 2014.

The Company also issued 2,000,000 options to Simon Cato, a director of the Company. The options are exercisable at 2.10 cents per option with an expiry date of 14 August 2014.

The Company issued 10,000,000 options over unissued shares to Mr Mohnish Kumar, the CEO of TSI India. The options are exercisable at 2 cents per option with an expiry date of 31 January 2015.

No options were exercised during the year. 5,087,500 options expired during the year.

The following unissued shares or interest under options existed at the date of this report:

Class of instrument	Number	Expiry date	Exercise price(cents)
Director options	5,087,500	30/11/2012	4.50
Director options	12,000,000	14/08/2014	2.10
Employee options	20,000,000	31/10/2014	4.00
Employee options	6,000,000	23/02/2015	4.00
Employee options	10,000,000	31/01/2015	2.00

INDEMNIFICATION OF AUDITORS AND DIRECTORS

Under the Constitution the Company is obliged, to the extent permitted by law, to indemnify an officer (including Directors) of the Company against liabilities incurred by the officer in that capacity, against costs and expenses incurred by the officer in successfully defending civil or criminal proceedings, and against any liability which arises out of conduct not involving a lack of good faith.

No indemnity was implemented in respect of auditors.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the court under legislation such as section 237 of the Corporations Act of Australia for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Group entity with leave of the court under such legislation.

NON-AUDIT SERVICES

The auditors’ of the Group have been engaged to provide certain taxation related services during the year. The details of their remuneration have been presented in note 3 to the financial statements.

The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001.

AUDITOR’S INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the period ended 31 March 2012 has been received and is noted in page 51.

Transaction Solutions International Limited ANNUAL REPORT 2012 10

DIRECTORS MEETINGS

The number of meetings attended by each Director of the Company during the year was:

Director	Number of meetings	Number of meetings
	Held	Attended
Paul Boyatzis		4	4
Gary Foster		4	4
Yew Seng Kwa		4	4
Simon Cato		4	4
James Carroll		-	-

Remuneration Report (Audited)

This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration of Key Management Personnel (“KMP”) of the Group.

Key Management Personnel

The KMP of the Group during the current year and the prior financial period were:

Name	Role
Mr. Paul Boyatzis	Non-Executive Chairman
Mr. GaryFoster	Managing Director
Mr. Yew SengKwa	Executive Director
Mr. Simon Cato	Non-Executive Director
Mr James Carroll	Non-Executive Director(appointed 1 June 2012)
Mr PhillipMacLeod	Company Secretary

Senior managers

The senior managers of the Group during the current year and the prior financial period were:

Name		Role
Mr. Mohnish Kumar	CEO,TSI India
Mr. Hemant Sood	COO, TSI India

Except as noted the named persons held their current position for the whole of the financial year and since the end of the financial year.

Remuneration policy

The Group’s remuneration policy for its KMP has been developed by the Board taking into account the size of the business, the size of the management team, the nature and stage of development of the Group’s current operations, and market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in determining the remuneration policy for KMP:

the Group is currently focused on business development and contract implementation activities;
risks associated with companies at this stage of development; and
the Group has only recently achieved cashflow positive levels of sales from business operations

Transaction Solutions International Limited ANNUAL REPORT 2012 11

Executive Remuneration

The Group’s remuneration policy for executives is to provide a fixed remuneration component and a performance based component (short term incentive and long term incentive). The Board believes that this remuneration policy is appropriate given the considerations discussed in the section above and is appropriate in aligning executives’ objectives with shareholder and business objectives.

Fixed Remuneration

Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-cash benefits.

Fixed remuneration is reviewed annually by the Board. The process consists of a review of company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.

Performance Based Remuneration – Short Term Incentive

Executives may be entitled to an annual cash bonus upon achieving various key performance indicators (“KPI’s”), as set by the Board. The Board has now focused its efforts on developing and growing the Group’s business. The Board considers that the prospects of the Company and resulting impact on shareholder wealth are primarily linked to the performance of this business.

Accordingly, the Board may pay a bonus to executive KMP’s based on the performance of the Group business. No bonus was paid during the current financial year.

Performance Based Remuneration – Long Term Incentive

The Board has a policy of granting incentive options to executives with exercise prices at and/or above market share price (at the time of agreement). As such, incentive options granted to executives will generally only be of benefit if the executives perform to the level whereby the value of the Group increases sufficiently to warrant exercising the incentive options granted.

Other than service-based vesting conditions, there are no additional performance criteria on the incentive options granted to executives, as given the speculative nature of the Group’s activities and the small management team responsible for its running, it is considered the performance of the executives and the performance and value of the Group are closely related.

Non-Executive Director Remuneration

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required.

Director’s fees paid to Non-Executive Directors accrue on a daily basis. Fees for Non-Executive Directors are not linked to the performance of the Company. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Group and NonExecutive Directors may in limited circumstances receive incentive options in order to secure their services.

Impact of Shareholder Wealth on Key Management Personnel Remuneration

The Board does not directly base remuneration levels on the Company’s share price or movement in the share price over the financial year. As a result of the Group’s development activities, the Board anticipates that it will retain future earnings (if any) and other cash resources for the operation and development of its business. Accordingly the Group does not currently have a policy with respect to the payment of dividends, and as a result the remuneration policy does not take into account the level of dividends or other distributions to shareholders (e.g. return of capital).

Impact of Earnings on Key Management Personnel Remuneration

The Board has focused the Group's efforts on finding and completing new business opportunities. The Board considers that the prospects of the Group and resulting impact on shareholder wealth are largely linked to the success of this approach, rather than by referring to current or prior year earnings. Accordingly, the Board may pay a bonus to directors or executives based on the success in generating suitable new business opportunities. A further bonus may also be paid upon the successful completion of a new business acquisition.

Transaction Solutions International Limited ANNUAL REPORT 2012 12

Remuneration of KMPs and senior managers

Details of the nature and amount of each element of the emoluments of each Director and senior manager of the Group are as follows:

	Short
	term
	benefits	Post-	Equity			Compensation
Year ended 31	Salary &	employment	Compensation			based on
March 2012	fees	Benefits	Benefits*		Total	performance
	$	$	$		$	%
Paul M Boyatzis	180,000	-		-	180,000	-
Gary P Foster	275,229	24,771		-	300,000	-
Yew Seng Kwa	183,486	16,514		59,292	259,292	22.87
Simon K Cato	30,000	2,700		11,858	44,558	26.61
Phillip J MacLeod	36,000	-		-	36,000	-
Mohnish Kumar	200,900	-	120,537		321,437	37.50
Hemant Sood	131,946	-		29,400	161,346	18.22
Total	1,037,561	43,985	221,087		1,302,633	16.97

Equity compensation benefits of $110,240 relate to options granted and vested in 2012. The balance of $110,847 is for options granted in 2011 and vesting over a period of 18 months and 36 months from grant date.

	Short
	term
	benefit	Post-	Equity			Compensation
Period ended	Salary	employment	Compensation			based on
31 March 2011	& fees	Benefits	Benefits		Total	performance
	$	$	$		$	%
Paul M Boyatzis	132,842	-		-	132,842	-
Gary P Foster	165,351	11,761		-	177,112	-
Simon K Cato	19,883	1,575		-	21,458	-
Yew Seng Kwa	132,034	17,966		-	150,000	-
Phillip J MacLeod	22,500	-		-	22,500	-
Mohnish Kumar	170,441*	-		94,730	265,171	35.72
Hemant Sood	95,541	-		31,893	127,434	25.03
Total	738,592	31,302	126,623		896,517	14.14

includes bonus of $22,500

Transaction Solutions International Limited ANNUAL REPORT 2012 13

Options: Granted and vested during the current year to KMPs and senior managers

Year ended 31	Opening	Granted as		Closing
March 2012	Balance	remuneration	Expired	Balance
	Nos.	Nos.	Nos.	Nos.
Paul M Boyatzis	-	-	-	-
Gary P Foster	-	-	-	-
Simon K Cato	-	2,000,000	-	2,000,000
Yew Seng Kwa	10,175,000	10,000,000	(5,087,500)	15,087,500
Phillip J MacLeod	-		-	-
Mohnish Kumar	20,000,000	10,000,000	-	30,000,000
Hemant Sood	6,000,000	-	-	6,000,000
Total	36,175,000	22,000,000	(5,087,500)	53,087,500

Period ended 31	Opening	Granted as	Other	Closing
March 2011	Balance	remuneration	changes	Balance
	Nos.	Nos.	Nos.	Nos.
Paul M Boyatzis	-	-	-	-
Gary P Foster	-	-	-	-
Simon K Cato	-	-	-	-
Yew Seng Kwa (1)	-	-	10,175,000	10,175,000
Phillip J MacLeod	-	-	-	-
Mohnish Kumar	-	20,000,000	-	20,000,000
Hemant Sood	-	6,000,000	-	6,000,000
Total	-	26,000,000	10,175,000	36,175,000

(1) Options issued to Yew Seng Kwa were issued as replacement for options previously issued by TSI (UK) Limited and subsequently cancelled as part of the merger transaction completed on 26 August 2010.

Transaction Solutions International Limited ANNUAL REPORT 2012 14

Share-based compensation arrangement to KMPs and senior managers

During the year the following share-based compensation were granted to the following KMPs and senior manager of the Group:

Name	Granted	Exercise	Expiry date	Vesting
	Nos.	price		(from grant date)
Yew Seng Kwa	10,000,000	2.10 cents	14 Aug 2014	Immediate
Granted 15 September
2011
Simon Cato	2,000,000	2.10 cents	14 Aug 2014	Immediate
Granted 15 September
2011
Mohnish Kumar	10,000,000	2.00 cents	31 Jan 2015	Immediate
Granted 1 February 2012

The following share based compensation were granted to the KMP’s in the prior period and continued to exist during the 2012 financial year:

Name		Granted	Exercise	Expiry date	Vesting
		Nos.	price		(from grant date)
Mohnish	Kumar	20,000,000	4.00 cents	31 Oct 2014	5,000,000 Immediate
Granted	01 Nov 2010				5,000,000 in 18 months
					10,000,000 in 36 months
Hemant	Sood	6,000,000	4.00 cents	23 Feb 2015	2,000,000 Immediate
Granted	23 Feb 2011				2,000,000 in 18 months
					2,000,000 in 36 months

The options have been granted to the KMP and senior manager at the discretion of the Board in recognition of their past services and as an incentive for the future growth of the Group. The Board does not prescribe policies in relation to employee’s management of the risk arising from these options.

An expense of $221,087 (2011: $126,623) has been recognised in relation to these share based payments. Of this expense $110,240 relates to options granted and vested in 2012. The balance of $110,847 is for options granted in 2011 and vesting 18 months and 36 months from grant date.

The following inputs have been used in computation of the fair value at each grant dates:

	Employee	Employee	Employee	Employee
	Options	Options	Options	Options
	expiring	expiring	expiring	expiring
	14/08/14	31/01/15	31/10/14	23/02/15
Grant date share price	1.50 cents	0.90 cents	3.50 cents	3.80 cents
Expected volatility	71%	94%	42%	43%
Time to maturity	2.92 years	3.00 years	4.00 years	4.00 years
Dividend yield	0%	0%	0%	0%
Risk-free interest rate	3.79%	3.14%	4.99%	5.30%

Transaction Solutions International Limited ANNUAL REPORT 2012 15

Shareholding of KMPs and senior managers

	Balance at 1 April 2011 At appointment date At resignation date Purchases in the market Balance at 31 March 2012
Year ended 31 March 2012
	Nos. Nos. Nos. Nos. Nos.
Paul M Boyatzis	122,482,581 - - - 122,482,581
Gary P Foster	175,490,145 - - 168,333 175,658,478
Simon K Cato	1,250,000 - - 500,000 1,750,000
Yew Seng Kwa	3,500,000 - - - 3,500,000
Phillip J MacLeod	250,000 - - - 250,000
Mohnish Kumar	5,570,000 - - - 5,570,000
Hemant Sood	2,035,000 - - - 2,035,000
Total	310,577,726 - - 668,333 311,246,059

	Balance at	At	Issued for	Purchases	Balance at
Period ended 31	1 July	appointment	shares in	in the	31 March
March 2011	2010	date	TSI Limited	market	2011
	Nos.	Nos.	Nos.	Nos.	Nos.
Paul M Boyatzis	17,680,000	-	104,802,581	-	122,482,581
Gary P Foster	9,288,215	-	166,101,930	100,000	175,490,145
Simon K Cato	950,000	-	-	300,000	1,250,000
Yew Seng Kwa	-	3,500,000	-	-	3,500,000
Phillip J MacLeod	-	-	-	250,000	250,000
Mohnish Kumar	-	-	4,070,000	1,500,000	5,570,000
Hemant Sood	-	-	2,035,000	-	2,035,000
Total	27,918,215	3,500,000	277,009,511	2,150,000	310,577,726

Service agreements

The details of the service agreements between the Group and the KMP and senior managers are as follows:

Paul Boyatzis

Term of agreement –fixed term expiring 31 March 2014
Fixed compensation – total remuneration $180,000 per annum
Fringe benefits – not applicable
Termination period notice – 3 months by either party
Termination benefits – compensation payable for the balance of the term of the engagement
Effect of takeovers – no provision

Transaction Solutions International Limited ANNUAL REPORT 2012

Gary Foster

Term of agreement – fixed term expiring 31 March 2014
Fixed compensation – total remuneration $300,000 per annum ($240,000 during the financial period ended 31 March 2011)
Fringe benefits – not applicable
Termination period notice – 3 months by either party
Termination benefits – compensation payable for the balance of the term of the engagement
Effect of takeovers – no provision

Yew Seng Kwa

Term of agreement – fixed term expiring 16 November 2013
Fixed compensation – total remuneration $200,000 per annum
Fringe benefits – not applicable
Termination period notice – 3 months by either party
Termination benefits – compensation payable for the balance of the term of the engagement
Effect of takeovers – no provision

Simon K Cato

Mr Cato is engaged as a non-executive director on an annual remuneration of $30,000 plus statutory superannuation;
No fixed term for the engagement.

James Carroll

Mr Carroll is engaged as a non-executive director on an annual remuneration of $30,000 plus statutory superannuation;
No fixed term for the engagement.

Phillip J MacLeod

Mr MacLeod provides company secretarial services on a fixed retainer fee of $3,000 per month;
No other benefits payable for the services;

Transaction Solutions International Limited ANNUAL REPORT 2012 17

Mohnish Kumar

Term of agreement – Continuous employment
Fixed compensation – total remuneration $200,900 per annum
Fringe benefits – not applicable
Termination notice period – 3 months by employee, none by employer
Termination benefits – not applicable
Effect of takeovers – no provision

Hemant Sood

Term of agreement – Continuous employment
Fixed compensation – total remuneration $131,946 per annum
Fringe benefits – not applicable
Termination notice period – 3 months by employee, none by employer
Termination benefits – not applicable
Effect of takeovers – no provision

Performance of the Company for the last five years

The performance of the Company and the impact on shareholder wealth are noted below:

	31-Mar-12	31-Mar-11**	30-Jun-10*	30-Jun-09*	30-Jun-08*
	$	$	$	$	$
Revenue	8,614,758	5,340,811	29,186	49,228	127,168
Net profit / (loss) before tax	(1,418,842)	(902,719)	(375,040)	(266,271)	(377,544)
Net profit / (loss) after tax	(1,418,842)	(902,719)	(986,157)	(186,390)	153,692
	Cents	Cents	Cents	Cents	Cents
Share price at beginning	3.30	2.00	1.10	2.50	2.70
Share price at the end	0.70	3.30	2.00	1.10	2.50
Dividends paid	-	-	-	-	-
Basic earnings per share	(0.08)	(0.07)	(0.40)	(0.08)	0.07
Diluted earnings per share	(0.08)	(0.07)	(0.40)	(0.08)	0.06

Relates to legal parent only.

**Relates to a 9 month financial period

Transaction Solutions International Limited ANNUAL REPORT 2012 18

The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

==> picture [109 x 56] intentionally omitted <==

Paul Boyatzis Perth, 25 June 2012

Transaction Solutions International Limited ANNUAL REPORT 2012

Directors’ Declaration

In accordance with a resolution of the directors of Transaction Solutions International Limited, I state that:

In the opinion of the directors:

(a) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable;
(b) the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the financial statements;
(c) the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity;

The Directors have been given the declarations required by section 295A of the Corporations Act 2001

Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001.

On behalf of the Directors

==> picture [109 x 56] intentionally omitted <==

Paul Boyatzis

Perth, 25 June 2012

Transaction Solutions International Limited ANNUAL REPORT 2012 20

Consolidated Statement of Comprehensive Income For the Year Ended 31 March 2012

Notes	1 April 2011 to 31 March 2012 $ 1 July 2010 to 31 March 2011 $
Revenue Revenue from services Finance income Other income	8,015,616 5,109,790 507,693 197,371 91,449 33,650
3 Site operating costs Employee benefits expense Other expenses	8,614,758 5,340,811 (6,208,489) (3,378,013) (1,421,638) (1,052,303) (837,521) (676,568)
Depreciation and amortisation expenses 9 Restructuring expenses Share based payments to employees 15	147,110 233,927 (1,344,865) (829,918) - (180,105) (221,087) (126,623)
Loss before tax 3 Income tax expense 4	(1,418,842) (902,719) - -
Loss for the period	(1,418,842) (902,719)
Other comprehensive income/(expense) (net of tax) Foreign currency movement in translation of foreign operations 13 Gain on acquisition of the legal parent recognised in merger reserve	(2,113,242) (1,972,489) - 24,828
Total comprehensive loss for the period	(3,532,084) (2,850,380)
Loss per share 5	Cents Cents
Basic loss per share Diluted loss per share	(0.08) (0.07) (0.08) (0.07)

This statement should be read in conjunction with accompanying notes to the accounts

Transaction Solutions International Limited ANNUAL REPORT 2012 21

Consolidated Statement of Financial Position As at 31 March 2012

Notes	31 March 2012 $ 31 March 2011 $
ASSETS CURRENT ASSETS Cash and cash equivalent 6 Trade and other receivables 7 Current tax assets Prepayments	6,383,560 5,022,022 2,006,641 1,417,039 921,317 1,050,357 55,474 44,271
TOTAL CURRENT ASSETS	9,366,992 7,533,689
NON-CURRENT ASSETS Loans and receivables 8 Property, plant & equipment 9	1,416,415 1,430,510 9,702,222 7,662,445
TOTAL NON-CURRENT ASSETS	11,118,637 9,092,955
TOTAL ASSETS	20,485,629 16,626,644
LIABILITIES CURRENT LIABILITIES Trade and other payables 10 Provisions 11	1,538,553 959,497 101,122 78,575
TOTAL CURRENT LIABILITIES	1,639,675 1,038,072
TOTAL LIABILITIES	1,639,675 1,038,072
NET ASSETS	18,845,954 15,588,572
EQUITY Contributed equity 12 Reserves 13 Accumulated losses	32,185,790 25,617,411 (5,383,233) (3,491,078) (7,956,603) (6,537,761)
TOTAL EQUITY	18,845,954 15,588,572

This statement should be read in conjunction with accompanying notes to the accounts

Transaction Solutions International Limited ANNUAL REPORT 2012 22

Consolidated Statement of Cash Flows For the Year Ended 31 March 2012

		1 April 2011 to	1 July 2010 to
		31 March 2012	31 March 2011
	Notes	$	$
Cash flows from operating activities
Receipts from customers		8,083,152	5,177,325
Payments to suppliers and employees		(8,432,311)	(5,216,476)
Interest received		507,693	197,371
Income tax received/(paid)		129,040	(336,238)
Net cash provided by/(used in) operating
activities	6	287,574	(178,018)
Cash flows from investing activities
Acquisition of property, plant and equipment		(4,666,688)	(2,045,088)
Proceeds from sale of non-current assets		210	11,462
Placement of fixed deposits		(146,081)	(164,343)
Cash acquired in merger transaction	16	-	1,049,096
Net cash used in investing activities		(4,812,559)	(1,148,873)
Cash flows from financing activities
Proceeds from the issue of shares		7,000,000	3,132,000
Payment for share issue costs		(431,621)	(164,208)
Net cash provided by financing activities		6,568,379	2,967,792
Net increase/(decrease) in cash held		2,043,394	1,640,901
Cash at the beginning of the period		5,022,022	4,083,836
Effect of exchange rates on cash balances		(681,856)	(702,715)
Cash at the end of the financial period	6	6,383,560	5,022,022

This statement should be read in conjunction with accompanying notes to the accounts

Transaction Solutions International Limited ANNUAL REPORT 2012 23

Consolidated Statement of Changes in Equity For the Year Ended 31 March 2012

	Contributed	Share	Foreign	Merger	Accumulated	Total
	equity	based	currency	reserve	losses	equity
		payment	translation
		reserve	reserve
	$	$	$	$	$	$
Balance at 1 July 2010	21,777,336	-	(1,670,040)	-	(5,635,042)	14,472,254
Net loss for the period	-	-	-		(902,719)	(902,719)
Other comprehensive loss for the
period	-	-	(1,972,489)	24,828	-	(1,947,661)
Total comprehensive loss for the
period	-	-	(1,972,489)	24,828	(902,719)	(2,850,380)
Equity consideration paid on
acquisition of legal parent	872,283	-	-	-	-	872,283
Issue of equity shares	3,132,000	-	-	-	-	3,132,000
Cost of raising equity	(164,208)	-	-	-	-	(164,208)
Share based payments	-	126,623	-	-	-	126,623
Total transaction with equity
holders	3,840,075	126,623	-	-	-	3,966,698
Balance at 31 March 2011	25,617,411	126,623	(3,642,529)	24,828	(6,537,761)	15,588,572
Net loss for the year	-	-	-	-	(1,418,842)	(1,418,842)
Other comprehensive loss for the
year	-	-	(2,113,242)	-	-	(2,113,242)
Total comprehensive loss for the
year	-	-	(2,113,242)	-	(1,418,842)	(3,532,084)
Issue of equity shares	7,000,000	-	-	-	-	7,000,000
Cost of raising equity	(431,621)	-	-	-	-	(431,621)
Share based payments	-	221,087	-	-	-	221,087
Total transactions with equity
holders	6,568,379	221,087	-	-	-	6,789,466
Balance at 31 March 2012	32,185,790	347,710	(5,755,771)	24,828	(7,956,603)	18,845,954

This statement should be read in conjunction with accompanying notes to the accounts

Transaction Solutions International Limited ANNUAL REPORT 2012 24

Notes to Accounts For the Year Ended 31 March 2012

1. General Information

(a) Corporate information

Transaction Solutions International Limited (the “Company”) is a company domiciled in Australia. This financial report of the Group comprising Transaction Solutions International (UK) Limited, a company incorporated in the United Kingdom and its subsidiaries including the Company is as at and for the year ended 31 March 2012.

The Group’s principal activity during the year was to continue its business of building recurring revenue through the deployment of ATMs on behalf of major banks in India. In addition the Group has contracts to service the financial payments sector through automation of bill payment processes in a market that is migrating from paper based to electronic transactions.

This financial report was authorised for issue by the Directors on the date of the Directors’ declaration.

(b) Change in financial year and comparatives

In the prior period the Company elected to change the reporting date for the financial report of the Group from 30 June to 31 March in line with the financial year of its main operating business in India.

Consequently, the comparatives in the statement of comprehensive income, statement of cash flows and the statement of changes in equity are for a nine months period ending 31 March 2011; and the current year figures are for the year ending 31 March 2012.

(c) Components of the Group

The Group financial statements represent the financial position of Transaction Solutions International Limited, and the entities it controlled at 31 March 2012 and their financial performance, cash flows and changes in equity for the year ended on that date.

The Group comprises of the following entities:

he Group comprises of the following entities:
		Extent	of control
	Incorporation	31-Mar-12	31-Mar-11
Accounting parent
Transaction Solutions International Limited
(“TSI(UK) Ltd")	United Kingdom	-	-
Controlled entities
Transaction Solutions International Limited
("TSI Limited")	Australia	100%	100%
Transaction Solutions International Pvt Ltd
("TSI India")	India	100%	100%
Transaction Solutions International Pty Ltd	Australia	100%	100%

Transaction Solutions International Limited ANNUAL REPORT 2012 25

(d) Basis of preparation

The financial statements have been prepared on the basis of historical costs, unless specifically stated otherwise in the notes. Historical costs are based on the fair value of the consideration given or received at the time of the transaction.

The financial statements have been presented in Australian dollars.

(e) Statement of compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law. The financial statements comprise the consolidated financial statements of the Group.

Accounting Standards include Australian equivalents to International Financial Reporting Standards - (‘A IFRS’). Compliance with A-IFRS ensures that the financial statements and notes of the company comply with International Financial Reporting Standards (‘IFRS’).

(f) Critical accounting judgements and key sources of estimation and uncertainty

In the application of Australian Accounting Standards, management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Recovery of trade receivables

The future recoverability of these financial assets is primarily dependent upon the counter parties ability and willingness to settle the accounts on a timely basis. The management’s assessment of the recoverability is based on various factors such as the recent payment patterns, assessment of the publicly available information and existing relationships. To the extent that these financial assets are determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

Recoverable amount of plant and equipment

The future recoverability of the carrying amount of plant and equipment are primarily dependent upon the level of business generated by each of the payment terminal machines. The management’s estimate of this is based on the historic transaction levels, forecasts made by the banks, and management’s own internal assessment. To the extent that plant and equipment is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

Benefit from carried forward tax losses

The future recoverability of the carried forward tax losses are dependent upon Group’s ability to generate taxable profits in the future in the same tax jurisdiction in which the losses arise. This is also subject to determinations and assessments made by the taxation authorities. The recognition of a deferred tax asset on carried forward tax losses (in excess of taxable temporary differences) is dependent on management’s assessment of these two factors. The ultimate recoupment and the benefit of these tax losses could differ materially from management’s assessment.

Transaction Solutions International Limited ANNUAL REPORT 2012 26

(g) New or revised accounting standards or interpretation

Amendments have been made to certain accounting standards and interpretations and new standards and interpretations have been issued during the financial year.

The following mandatory changes to the standards / interpretations have been adopted during the current financial year:

AASB 124(2009)	RelatedPartyDisclosures
AASB 2010-3	2010Annual Improvements
AASB 2009-14	Prepayments ofaMinimum FundingRequirements (INT 14)
AASB 2010-4	2010Annual Improvements
AASB 2010-5	Amendments to Australian AccountingStandards

The following new or revised accounting standards and interpretations have been issued during the financial year and could have potential effect on the financial statements when they are adopted by the group:

AASB 1054	Australian Additional Disclosures andRelatedAmendments
AASB9	Financial Instruments – Classification&Measurement^
AASB 10	ConsolidatedFinancialStatements
AASB 11	JointArrangements
AASB 12	Disclosure of InterestsinOther Entities
AASB 13	Fair ValueMeasurements
AASB 119 (2011)	EmployeeBenefits
AASB 127 (2011)	SeparateFinancialStatements
AASB 128 (2011)	Investmentsin Associates and Joint Ventures
AASB 2010-6	Disclosures on Transferof Financial Assets (AASB 7)
AASB 2011-7	Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards
AASB 2011-9	Presentationof Items ofOCI(AASB 101)

The management is in the process of measuring the impact of these new / revised standards and interpretation on the financial report.

2. Significant Accounting Policies

(a) Basis of consolidation

The consolidated financial statements comprise the financial statements of Transaction Solutions International Limited and its controlled entities at each date of the statement of financial position; and during the financial year ending at each reporting date. Control is achieved where the Group has the power to govern the financial and operating policies of an entity so as to derive benefits from those activities.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intra-group balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the Group.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the accounting parent has control.

Transaction Solutions International Limited ANNUAL REPORT 2012 27

(b) Translation of foreign operations

The financial statements have been presented in Australian Dollars. The functional currencies of the each individual component of the Group are their respective economic currencies.

As at the reporting date the assets and liabilities of foreign operations are translated into the presentation currency at the rate of exchange ruling at the reporting date and the statement of comprehensive income, statement cash flows and statement of changes in equity are translated at the weighted average exchange rates for the year.

The exchange differences arising on the retranslation are recognised in other comprehensive income and accumulated balances are carried forward as a separate component of equity.

On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the income statement.

(c) Transactions in foreign currencies

In preparing the financial statements of each individual group entity, transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date, and gain or loss in exchange rate movements are recognised in profit or loss.

(d) Business combinations

Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination shall be measured at fair value, which shall be calculated as the sum of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners of the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other pertinent conditions as at the acquisition date. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured.

(e) Revenue

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

The Group’s revenue is generated by providing ATM and bill payment solutions on behalf of the banks and certain large corporations in India. The Group is entitled to a service charge for each transaction processed through the payment terminals operated. Revenue arising from these operations is recognised upon completion of transaction processing at each terminal.

Interest

Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

(f) Employee benefits

Employee benefits such as salary and wages are measured at the rate at which the Group expects to settle the liability; and recognised during the period over which the employee services are being rendered.

Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-

Transaction Solutions International Limited ANNUAL REPORT 2012 28

costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(g) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses over the period of the lease on a straight line basis.

Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(h) Income tax

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement.

(i) Other taxes

Revenues, expenses and assets are recognised net of the amount of indirect taxes except:

where the taxes incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case those taxes are recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of taxes included.

The net amount of taxes recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the Statement of Cash Flows on a gross basis and the indirect tax component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Transaction Solutions International Limited ANNUAL REPORT 2012 29

Commitments and contingencies are disclosed net of the amount of indirect taxes recoverable from, or payable to, the taxation authority.

(j) Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

The weighted average number of shares outstanding during the reporting period represents the equity structure of the legal parent, i.e. Transaction Solutions International Limited (“TSI Limited”).

The weighted average number of ordinary shares outstanding for the financial period ended 31

March 2011 has been calculated by applying the following:

the number of ordinary shares outstanding from 1 July 2010 to 25 August 2010 is computed on the basis of the weighted average number of ordinary shares of TSI (UK) Limited (accounting acquirer) outstanding during the period multiplied by the exchange ratio of 20.35 established in the merger agreement; and
the number of ordinary shares outstanding from 26 August 2010 to 31 March 2011 is computed on the basis of the actual number of ordinary shares of TSI Limited (the accounting acquiree) outstanding during that period.

(k) Financial instruments

Financial instruments are recognised when the Group becomes party to the contractual provisions of the instrument. The de-recognition of a financial instrument takes place when the Group no longer controls the contractual rights that comprise the financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party.

The financial instruments of the group comprise of (i) cash and cash equivalents; (ii) trade and other receivables; (ii) loans and receivable; and (iv) trade and other payables.

(l) Cash and cash equivalent

Cash comprises cash at bank and in hand and short term deposits with an original maturity of three months or less.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(m) Trade and other receivables

Receivables are recognised and carried at original costs less an allowance for any uncollectible amounts.

An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

Transaction Solutions International Limited ANNUAL REPORT 2012 30

(n) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. The assets are depreciated over the following period:

	Life
ATM machines and terminals	10 to 13 years
Computer related equipment	2 to 3 years
Office equipment	5 to 7 years
Motor vehicles	4 years

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.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the Statement of Comprehensive Income in the period the item is derecognised.

(o) Recoverable amount of assets

At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or group of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

(p) Trade and other payables

Liabilities are recognised for amounts to be paid in the future for goods and services received. Liabilities expected to be settled within the normal trading cycle are carried at cost, and those expected to be settled beyond 12 months are measured at amortised cost.

(q) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, 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.

Transaction Solutions International Limited ANNUAL REPORT 2012 31

(r) Share based payments

Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of valuation techniques. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s estimate of shares that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity settled employee benefits reserve.

(s) Issued capital

Issued and paid up capital are recognised at the consideration received by the Group.

Expenses (including the tax effect) incurred directly in relation to the issue of the equity instruments are deducted from equity.

(t) Investment in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, investments in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of that investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in profit or loss.

When the Group transacts with an associate, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

When equity accounting is applied to investments previously accounted for as available for sale, the fair value of the original investment at the date of re-categorisation is the deemed cost of the investment in the associate. Previous revaluation gains or losses recognised in other comprehensive income are not reclassified to profit or loss.

Transaction Solutions International Limited ANNUAL REPORT 2012 32

3. Profit and Loss Items

	1 Apr 2011 to 1 July 2010 to
	31 Mar 12 31 Mar 11

	$ $
Loss for theperiod includes: ATM income and billpayment charges Profit on disposal ofplant and equipment Operatinglease expenses Auditors' remuneration Paid/payable to parent entity auditor, Deloitte Touche Tohmatsu, Australia For audit and review of financial statements For taxation services Paid/payable to auditors of subsidiaryentities For audit and review of financial statements* For taxation services	8,015,616 5,109,790 - 3,416 2,140,743 1,579,150 40,684 29,135 31,963 7,078
	72,647 36,213
	32,475 5,647 25,603 19,087
	58,078 24,734

2012 expense includes 2011 audit fee of $12,830 for TSI (UK) Limited not previously provided for.

4. Income Tax

Reconciliation of tax benefits to statutory tax:

	1 Apr 2011 to 1 July 2010 to
	31 Mar 12 31 Mar 11
	$ $
Loss for theyear Tax benefit at effective tax rate Adjustment for: Share basedpayments Deferred tax on carried forward losses Tax benefit recognised in Statement of Comprehensive Income Effective corporate tax rate in India is 30.9% and 30% in Australia and the UK.	(1,418,842) (902,719)
	(428,448) (278,940) 66,326 41,588 362,122 237,352
	- -

Transaction Solutions International Limited ANNUAL REPORT 2012 33

Components of deferred tax:

	31 Mar 2012 31 Mar 2011

	$ $
Deferred tax liability Property, plant and equipment Deferred tax asset Allowance for doubtful debts Employee benefits provision Carried forward tax losses Net deferred taxes	117,615 125,848
	117,615 125,848
	13,595 9,269 31,247 24,280 72,773 92,300
	117,615 125,848
	- -

Unrecognised deferred taxes:

	31 Mar 2012 31 Mar 2011

	$ $
Carried forward tax losses	3,517,784 3,590,558

The tax benefits of the above Deferred Tax Assets will only be obtained if:

(a) the group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised;

(b) the group continues to comply with the conditions for deductibility imposed by law; and

5. Loss per Share

	1 Apr 2011 to 1 July 2010 to
	31 Mar 12 31 Mar 11

	$ $
Net loss attributable to equity holders from continuingoperations Net loss attributable to equityholders Weighted average number of shares for basic and dilutedloss pershare Loss per share (cents per share)	(1,418,842) (902,719) (1,418,842) (902,719) *No.* *No.* 1,707,247,679 1,297,175,519 (0.08) (0.07)

Transaction Solutions International Limited ANNUAL REPORT 2012 34

6. Cash and Cash Equivalent

	31 Mar 2012	31 Mar 2011
	$	$
Cash and cash equivalent consists of: Cash in hand and demand deposits Reconciliation of net loss to operating cash flows: Net loss for theperiod Adjustments for: Gain/(loss)on sale of non-current assets Depreciation and amortisation expense Share basedpayments Movement in working capital items: (Increase) / decrease in trade and other receivables (Increase)/ decrease in current tax assets (Increase)/ decrease inprepayments Increase /(decrease)in trade and otherpayables Increase /(decrease)inprovisions	6,383,560	5,022,022
	6,383,560	5,022,022
	(1,418,842) 10,626 1,344,865 221,087 (589,602) 129,040 (11,203) 579,056 22,547	(902,719) (3,416) 829,918 126,623

		109,255
		(336,238)
		27,573
		(60,475)
		31,461
	287,574	(178,018)

7. Trade and Other Receivables

	31 Mar 2012 31 Mar 2011

	$ $
Trade receivable Allowance for doubtful debts Net trade receivable Securitydeposits Other receivables Ageing of trade receivables Due upto six months Due beyond six months	1,230,148 901,295 (43,997) (29,996)
	1,186,151 871,299 432,326 369,141 388,164 176,599
	2,006,641 1,417,039
	1,151,557 855,198 78,591 46,096
	1,230,148 901,295

8. Loans and Receivables

	31 Mar 2012 31 Mar 2011

	$ $
Term deposits with financial institutions	1,416,415 1,430,510
	1,416,415 1,430,510

These term deposits are secured for the performance guarantees issued in relation to the ATM and bill payment machines installed by the Group.

Transaction Solutions International Limited ANNUAL REPORT 2012 35

9. Property, Plant and Equipment

	31 Mar 2012	31 Mar 2011

	$	$
Plant and equipment At cost Accumulated depreciation Movement inplant and equipment Balance at the beginningof theperiod Additions duringtheperiod Disposals Depreciation for theperiod Effect of exchange rate movements Balance at the end of theperiod	13,063,383 (3,361,161)	10,085,039 (2,422,594)
	9,702,222	7,662,445
	7,662,445 4,666,688 (10,836) (1,344,865) (1,271,210)	7,509,101
		2,045,088
		(8,046)
		(829,918) (1,053,781)
	9,702,222	7,662,445

10. Trade and Other Payables

	31 Mar 2012 31 Mar 2011

	$ $
Tradepayables and accruals Otherpayables	1,495,160 925,619 43,393 33,877
	1,538,553 959,497

The trading terms with the creditors generally provide for 30 days credit

11. Provisions

	31 Mar 2012 31 Mar 2011

	$ $
Employee benefits	101,122 78,575
	101,122 78,575

Transaction Solutions International Limited ANNUAL REPORT 2012 36

12. Contributed Equity

	31 Mar 2012 31 Mar 2011
	$ $
Issued andpaid up capital 1,780,063,679 (2011: 1,372,534,344) ordinary shares	32,185,790 25,617,411 32,185,790 25,617,411
	Nos. $
Movement in ordinary shares Equivalent shares in TSI Limited 01 Jul 2010 Notional consideration for acquisition of TSI Limited 26 Aug 2010 Issue of shares at 4 cents per share 10 Sep 2010 Equityraisingcosts - Balance at 31 March 2011 Openingbalance Issue of shares at 3 centsper share 24 May 2011 Issue of shares on conversion of converting notes 15 Aug 2011 Equityraisingcosts - Balance at 31 March 2012	268,048,537 21,777,336 1,026,185,807 872,283 78,300,000 3,132,000 - (164,208)
	1,372,534,344 25,617,411
	1,372,534,344 25,617,411 233,333,335 7,000,000 174,196,000 - - (431,621)
	1,780,063,679 32,185,790

Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.


		Nos.
Movement in converting notes Issue of converting notes in TSI Limited on account ofacquisitionof TSI(UK)Limited. 26 Aug 2010 Balance at 31 March 2011 Conversion of converting notes in TSI Limited to equityshares 15 Aug 2011 Balance at 31 March 2012		162,800,000
		162,800,000
		(162,800,000)
		-

			Exercise price
	Nos.	Expiry date	(cents)
Options outstanding at 31 March 2012
Director options	5,087,500	30/11/2012	4.50
Director options	12,000,000	14/08/2014	2.10
Employee options	20,000,000	31/10/2014	4.00
Employee options	6,000,000	23/02/2015	4.00
Employee options	10,000,000	31/01/2015	2.00

Transaction Solutions International Limited ANNUAL REPORT 2012 37

13. Reserves

	31 Mar 12 31 Mar 11

	$ $
Share basedpayment reserve Merger reserve Foreign currencytranslation reserve	347,710 126,623 24,828 24,828 (5,755,771) (3,642,529)
	(5,383,233) (3,491,078)

Share based payment reserve

The share-based payment reserve relates to share options granted by the Company to its employees. Further information about share-based payments to employees is set out in Note 15.

Merger reserve

The merger reserve is used to record the accounting gain arising from the reverse acquisition of TSI (UK) Limited made by TSI Limited during the prior period.

Foreign currency translation reserve

Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation currency (ie. Australian dollars) are recognised directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences previously accumulated in the foreign currency translation reserve (in respect of translating the net assets of foreign operations) are reclassified to profit or loss on the disposal of the foreign operation.

14. Operating Segments

Information reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment performance focuses on the business in India. The Group’s reportable segment under AASB 8 are as follows:

TSI India – Installation and management of ATMs and bill payment machines for banks and utility companies in India; and
Other segment comprising of TSI Limited, TSI (UK) Limited and TSI (Australia) Pty Ltd to manage the corporate affairs of the group.

The segments have applied the same accounting policies as applied to the Group and disclosed in the notes 1 and 2 to these financial statements.

Transaction Solutions International Limited ANNUAL REPORT 2012 38

Segment revenue and segment results:

The financial performance of the operating segments were as follows:

	TSI India Other Total
Year ended 31 March 2012	$ $ $
	8,015,616 - 8,015,616 183,368 324,325 507,693 91,449 - 91,449
Revenue from services
Finance income
Other income
Total	8,290,433 324,325 8,614,758
	(6,208,489) - (6,208,489) (1,340,926) (3,939) (1,344,865) (1,051,582) (1,207,577) (2,259,159)
Site operating expenses
Depreciation and amortisation
Other expenses
Total	(8,600,997) (1,211,516) (9,812,513)
	(310,564) (887,191) (1,197,755) - (221,087) (221,087)
Segment results
Share based payments
Profit / (Loss) before tax from continuing operations	(310,564) (1,108,278) (1,418,842)

	TSI India Other Total
	$ $ $
Period ended 31 March 2011
	5,109,790 - 5,109,790 76,705 120,666 197,371 16,254 17,396 33,650
Revenue from services
Finance income
Other income
Total	5,202,749 138,062 5,340,811
	(3,378,013) - (3,378,013) (822,052) (7,866) (829,918) (882,558) (846,313) (1,728,871)
Site operating expenses
Depreciation and amortisation
Other expenses
Total	(5,082,624) (854,178) (5,936,802)
	120,125 (716,116) (595,991) - (180,105) (180,105) - (126,623) (126,623)
Segment results
Restructuring expenses
Share based payments
Profit / (Loss) before tax from continuing operations	120,125 (1,022,844) (902,719)

There were no inter-segment transactions affecting the segment revenue or the results.

Segment assets and liabilities:

Transaction Solutions International Limited ANNUAL REPORT 2012

	TSI India Other	Total
31 March 2012	$ $	$
	9,698,683 3,539 2,056,091 4,327,469 3,442,426 36,104	9,702,222 6,383,560 3,478,530
Property, plant and equipment
Cash and cash equivalent
Other assets
Total segment assets	15,197,200 4,367,112 921,317 -	19,564,312 921,317
Current tax asset
Total assets	16,118,517 4,367,112	20,485,629
	1,467,753 171,922	1,639,675
Segment liabilities
Total liabilities	1,467,753 171,922	1,639,675

	TSI India Other	Total
31 March 2011	$ $	$
	7,655,142 7,303 1,370,692 3,651,330 2,866,108 25,712	7,662,445 5,022,022 2,891,820
Property, plant and equipment
Cash and cash equivalent
Other assets
Total segment assets	11,891,943 3,684,344 1,050,357 -	15,576,287 1,050,357
Current tax asset
Total assets	12,942,300 3,684,344	16,626,644
	806,517 231,555	1,038,072
Segment liabilities
Total liabilities	806,517 231,555	1,038,072

� Other assets of TSI India include $1,416,415 (2011: $1,430,510) of term deposits placed with financial institutions that are secured against performance guarantees issued to the customers.

Reliance on major customers:

The revenue from services is primarily generated through provision of ATM services to three banks in India. The extent of revenue generated from these banks is noted below:

	31 Mar 12	31 Mar 2011
	$ %	$ %
	6,359,905 79.34 1,655,711 20.66 8,015,616	4,400,168 86.10 709,622 13.90 5,109,790
Three bank customers
Other
Total revenue from services

Other segment information:

Transaction Solutions International Limited ANNUAL REPORT 2012 40

Additions of $4,666,688 (2011:$2,045,088) were made to the property, plant and equipment of TSI India.
There was no goodwill allocated to any of the segments
There were no impairment losses recognised during 2012 and 2011.

15. Share Based Payments

During the year ended 31 March 2012, the Company has granted the following options to 2 directors and one employee to acquire ordinary shares in the Company:

Name	Granted	Expiry	Exercise	Grant	Vesting (from	Fair value
	Nos.	date	price	date	grant date)	per option
			(cents)			(cents)
Mr. Y S Kwa (Director)	10,000,000	14/08/2014	2.10	15/09/2011	15/09/2011	0.59
Mr. S Cato (Director)	2,000,000	14/08/2014	2.10	15/09/2011	15/09/2011	0.59
Mr. M Kumar (CEO–	10,000,000	31/01/2015	2.00	01/02/2012	01/02/2012	0.39
TSI India)

The following share based compensation were granted to the KMPs in the prior period and continued to exist during the 2012 financial year:

Name	Granted	Expiry	Exercise	Grant	Vesting (from	Fair value
	Nos.	date	price	date	grant date)	per option
			(cents)			(cents)
Mr M Kumar	20,000,000	31/10/2014	4.00	01/11/2010	5,000,000	1.22
CEO–TSI India					Immediate
					5,000,000 in 18
					months
					10,000,000 in 36
					months
Mr H Sood	6,000,000	23/02/2015	4.00	23/02/2011	2,000,000	1.47
COO–TSI India					Immediate
					2,000,000 in 18
					months
					2,000,000 in 36
					months

An expense of $221,087 (2011: $126,623) has been recognised in relation to these share based payments. Of this expense $110,240 relates to options granted and vested during 2012. The balance of $110,847 is for options granted in 2011 and vesting over a period of 18 months and 36 months.

The fair values of the options have been valued applying the Black-Scholes valuation model.

Transaction Solutions International Limited ANNUAL REPORT 2012 41

The following inputs have been used in computation of the fair value at each grant dates:

	Employee	Employee	Employee	Employee
	Options	Options	Options	Options
	expiring	expiring	expiring	expiring
	14/08/14	31/01/15	31/10/14	23/02/15
Grant date share price	1.50 cents	0.90 cents	3.50 cents	3.80 cents
Expected volatility	71%	94%	42%	43%
Time to maturity	2.92 years	3.00 years	4.00 years	4.00 years
Dividend yield	0%	0%	0%	0%
Risk-free interest rate	3.79%	3.14%	4.99%	5.30%

16. Reverse Acquisition

On 26 August 2010 the merger between Transaction Solutions International Limited, UK (“TSI (UK) Limited”) and Transaction Solutions International Limited, Australia (“TSI Limited”) was completed. The remaining 82.40% of capital of TSI (UK) Limited which TSI Limited did not already own was acquired through the issue of 1,026,185,807 shares at a deemed value of 2.25 cents per share.

This transaction has been accounted applying the reverse acquisition accounting principle noted in AASB 3: Business Combinations. Accordingly, TSI (UK) Limited has been considered as the acquirer and TSI Limited has been considered as the acquiree. Accordingly, the consolidated financial statements represent the continuing operations of TSI (UK) Limited (including the comparatives); and the effect of the TSI Limited’s operations from 26 August 2010 to 31 March 2012.

This reverse acquisition had the following impact on the financial reporting of the Group:

TSI (UK) Limited is being considered as the accounting parent, though it is legally a subsidiary of TSI Limited;
TSI Limited is being considered as an accounting subsidiary and consolidated to the Group with effect from 26 August 2010; and
The consolidated financial statements is prepared as continuation of TSI (UK) Limited for the current and comparative financial period

TSI Limited’s net assets at 26 August 2010 included the following (excluding its interest in TSI (UK) Limited):

	Carrying amount Fair value

	$ $
ASSETS	1,049,096 1,049,096 16,357 16,357 11,127 11,127
Current Assets
Cash and cash equivalent
Trade and other receivables
Other assets
Total Current Assets	1,076,580 1,076,580
TOTAL ASSETS	1,076,580 1,076,580
	179,469 179,469
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities	179,469 179,469
TOTAL LIABILITIES	179,469 179,469
NET ASSETS	897,111 897,111

Transaction Solutions International Limited ANNUAL REPORT 2012 42

The effect of the transaction on the Consolidated Statement of Financial Position was as follows:

	$
Fair value of net assets acquired		897,111
Notional cost of consideration for acquiring the assets		872,283
Gain (recognised in equity)		24,828

The notional cost of consideration for acquiring the assets was calculated as being the amount received by TSI (UK) Ltd shareholders in TSI Ltd shares in exchange for the number of shares that TSI (UK) Ltd would have had to issue to TSI Ltd shareholders for the same equity interest that results from the reverse acquisition.

Net cash flow arising from acquisition:

	$
Consideration paid in cash	-
Cash and cash equivalent acquired	1,049,096

17. Financial Instruments

Board policy on financial instruments

The financial instruments of the group comprise of (i) cash and cash equivalents; (ii) trade and other receivables; (iii) loans and receivables; and (Iv) trade and other payables.

The Group’s financial instruments arise directly from its operations and through the fund raising activities. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken.

The financial instruments expose the group to certain risks. The nature and extent of such risks, and the management's risk management strategy are noted below.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Given the nature and size of the business, no formal risk management committees have been established, however responsibility for control and risk management is delegated to the appropriate level of management with the chief executive officer and chief financial officer (or their equivalent) having ultimate responsibility to the Board for the risk management and control framework.

Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of the operations and financial position of the Group. The Board also reviews risks that relate to operations and financial instruments as required, but at least every six months.

Given the uncertainty as to the timing and amount of cash inflows and outflows, the Group has not implemented any additional strategies to mitigate the financial risks and no hedging has been put in place. As the Group's operations change, the Directors will review this policy periodically going forward.

The Group's policy is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains.

Transaction Solutions International Limited ANNUAL REPORT 2012 43

Capital Management Policy

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Given the stage of development of the Group, the Board's objective is to minimise debt and to raise funds as required through the issue of new shares. The Group is currently examining new business opportunities where acquisition/working capital requirements of a new project may involve additional funding in some format (which may include debt, where appropriate).

Fair value of financial instruments

	31 Mar 12 31 Mar 11
	$ $
Cash and cash equivalent Trade and other receivables [Note 1] Loans and receivable [Note 2] Total Trade and otherpayables [Note 1]	6,383,560 5,022,022 2,006,641 1,417,039 1,416,415 1,430,510
	9,806,616 7,869,571
	(1,538,553) (959,497)
	8,268,063 6,910,074

(1) The fair values closely approximate their carrying amount on account of the short maturity cycle.

(2) The fair value closely approximates their carrying amount as these are interest bearing instruments.

Credit risk

The Group's credit risks arise from potential default of trade and other receivables. The maximum credit exposure is limited to the carrying amount of trade and other receivables of $2,006,641 (2011: $1,417,039) at reporting dates.

	31 Mar 12 31 Mar 11
	$ $
Ageing analysis of trade and other receivables:	1,957,587 1,077,894 93,051 369,141 (43,997) (29,996)
Recoverable within 3 months
Recoverable after 3 months
Bad and doubtful debts
Total	2,006,641 1,417,039

Trade receivables are primarily receivables from banks and utility companies in India. The Board monitors the recoverability through an aged receivable schedules and inputs from the management team.

There are no significant concentrations of credit risks.

The Group is also exposed to credit risks arising from potential default of the financial institutions to honour the demand deposits and term deposits per the banking contract. However, the Board does not monitor this risk as the Group banks with highly reputable and regulated institutions.

The term deposits held as security against performance guarantees are restricted and are expected to be realised only after termination of the service agreements (including renewals of the contracts).

Transaction Solutions International Limited ANNUAL REPORT 2012 44

Liquidity risk

The Group's liquidity risks arise from potential inability of the group to meet its financial obligations as and when they fall due, generally due to shortage of cleared funds. The Group is exposed to liquidity risk on account of trade and other payables. The Group manages its liquidity risk through continuously monitoring the cleared funds position; and by utilising short term cash budgets

The contractual maturity analysis of the Group's financial liabilities is as follows:

	< 3 months > 3 months Total
	$ $ $
31 March 2012	1,517,050 21,503 1,538,553
Trade and otherpayables
	1,517,050 21,503 1,538,553
31 March 2011	959,497 - 959,497
Trade and otherpayables
	959,497 - 959,497

Interest rate risk

Interest rate risk is the risk that fair values and cash flows of the Group’s financial instruments will be affected by changes in the market interest rates.

The Group’s cash and cash equivalents and loans and receivables are impacted by interest rate risks. Other receivables and payables have short maturities and are non-interest bearing. Management believes that the risk of interest rate movement would not have a material impact of the Group’s operations.

Management periodically reviews the interest rates offered on cash and cash equivalents. The Group’s primary objective is on developing the core business rather than earning interest income. The cash balances are invested at the prevailing short term market interest rates with credit worthy financial institutions.

The sensitivity of the interest bearing financial instruments to a 1% change in market interest rate is:

	31 Mar 12 31 Mar 11
	$ $
	6,383,560 5,022,022 1,416,415 1,430,510
Cash and cash equivalents
Loans and receivable
	7,799,975 6,452,532 78,000 64,525 (78,000) (64,525)

Impact onprofit and equity- +1% movement
Impact onprofit and equity- -1% movement

Foreign currency risk

The Group has exposure to GBP and Indian Rupees on account of the geographical location of the operations and the accounting parent entity's domicile.

	31 Mar 12 31 Mar 11

	$ $
Indian Rupee denominated financial instruments	2,056,091 1,370,695 1,977,018 1,394,671 1,416,415 1,430,510 (1,467,753) (727,943)
Cash and cash equivalents
Trade and other receivable
Loans and receivable
Trade and other payables
	3,981,771 3,467,933
GBP denominated financial instruments	29,694 15,256 (49,786) (59,626)
Cash and cash equivalents
Trade and other payables
	(20,092) (44,370)

Transaction Solutions International Limited ANNUAL REPORT 2012 45

The Board does not currently engage in hedging these foreign currency risks, as the exposures arise from operations in India. The net cash generated from business activities in India are being retained in India to fund further expansion capital requirements.

The sensitivity of the foreign currency denominated financial instruments to a 10% change in market exchange rate are:

	31 Mar 12 31 Mar 11
	$ $
Appreciation of A$ by 10%	(398,177) (346,793) (2,009) (4,034)
Indian Rupees
British Pounds
	(400,186) (350,827)
Depreciation of A$ by 10%	398,177 346,793 2,009 4,034
Indian Rupees
British Pounds
	400,186 350,827

18. Key Management Personnel Disclosure

Key Management Personnel

The KMP of the Group during the current year and prior financial period were:

Name	Role
Mr. Paul Boyatzis	Non-executive Chairman
Mr. GaryFoster	Managing Director
Mr. Yew SengKwa	Executive Director
Mr. Simon Cato	Non-executive Director
Mr PhillipMacLeod	CompanySecretary
Mr. Mohnish Kumar	CEO, TSI India
Mr. Hemant Sood	COO, TSI India

All KMP of the Group were in office for the entire period unless stated otherwise.

Details of the nature and amount of each element of the emoluments of each KMP are as follows:

	Short term benefits Salary and fees Post- employment Benefits Equity Compens ation Benefits Total Compensation based on performance*
Year ended 31 March 2012
	$ $ $ $ %
Paul M Boyatzis	180,000 - - 180,000 -
Gary P Foster	275,229 24,771 - 300,000 -
Yew Seng Kwa	183,486 16,514 59,292 259,292 22.87
Simon K Cato	30,000 2,700 11,858 44,558 26.61
Phillip J MacLeod	36,000 - - 36,000 -
Mohnish Kumar	200,900 - 120,537 321,437 37.50
Hemant Sood	131,946 - 29,400 161,346 18.22
Total	1,037,561 43,985 221,087 1,302,633 16.97

Transaction Solutions International Limited ANNUAL REPORT 2012 46

	Short term	Post-	Equity	Total	Compensation	Compensation
	benefits	employment	Compensa		based	on
Period ended	Salary and	Benefits	tion		performance
31 March 2011	fees		Benefits
	$	$	$	$	%
Paul M Boyatzis	132,842	-	-	132,842		-
Gary P Foster	165,351	11,761	-	177,112		-
Yew Seng Kwa	132,034	17,966	-	150,000		-
Simon K Cato	19,883	1,575	-	21,458		-
Phillip J MacLeod	22,500	-	-	22,500		-
Mohnish Kumar**	170,441	-	94,730	265,171		35.72
Hemant Sood	95,541	-	31,893	127,434		25.03
Total	738,592	31,302	126,623	896,517		14.14

In the year ended 31 March 2012 equity compensation benefits of $110,240 relate to options granted and vested in 2012. The balance of $110,847 is for options granted in 2011 and vesting over a period of 18 months and 36 months from grant date.

** In the period ended 31 March 2011 s hort term benefits paid to Mohnish Kumar include a bonus of $22,500

Shares based compensation arrangement to Key Management Personnel

Yew Seng Kwa was granted 10,000,000 options during the year. The options, which vest immediately, have an exercise price of 2.10 cents and expire 14 August 2014.

Simon Cato was granted 2,000,000 options on the same terms and conditions.

Mohnish Kumar was granted 10,000,000 options during the year. The options which vest immediately have an exercise price of 2.10 cents and expire 31 January 2015.

No options were exercised during the year. 5,087,500 options expired during the year.

Options holding of Key Management Personnel

Year ended 31 March 2012	Opening Balance	Granted as remuneration	Net other change	Closing Balance
	Nos.	Nos.	Nos.	Nos.
Paul M Boyatzis	-	-	-	-
Gary P Foster	-	-	-	-
Simon K Cato	-	2,000,000	-	2,000,000
Yew Seng Kwa	10,175,000	10,000,000	(5,087,500)	15,087,500
Phillip J MacLeod	-	-	-	-
Mohnish Kumar	20,000,000	10,000,000	-	30,000,000
Hemant Sood	6,000,000	-	-	6,000,000
Total	36,175,000	22,000,000	(5,087,500)	53,087,500

Transaction Solutions International Limited ANNUAL REPORT 2012 47

Period ended 31 March 2011	Opening Balance	Granted as remuneration	Net other change	Closing Balance
	Nos.	Nos.	Nos.	Nos.
Paul M Boyatzis	-	-	-	-
Gary P Foster	-	-	-	-
Simon K Cato	-	-	-	-
Yew Seng Kwa (1)	-	-	10,175,000	10,175,000
Phillip J MacLeod	-	-	-	-
Mohnish Kumar	-	20,000,000	-	20,000,000
Hemant Sood	-	6,000,000	-	6,000,000
Total	-	26,000,000	10,175,000	36,175,000

(2) Options issued to Yew Seng Kwa were issued as replacement for options previously issued by TSI (UK) Limited and subsequently cancelled as part of the merger transaction completed on 26 August 2010.

Shareholding of Key Management Personnel

	Balance at 1 April 2011 At appointment date At resignation date Purchases in the market Balance at 31 March 2012
Period ended 31 March 2012
	Nos. Nos. Nos. Nos. Nos.
Paul M Boyatzis	122,482,581 - - - 122,482,581
Gary P Foster	175,490,145 - - 168,333 175,658,478
Simon K Cato	1,250,000 - - 500,000 1,750,000
Yew Seng Kwa	3,500,000 - - - 3,500,000
Phillip J MacLeod	250,000 - - - 250,000
Mohnish Kumar	5,570,000 - - - 5,570,000
Hemant Sood	2,035,000 - - - 2,035,000
Total	310,577,726 - - 668,333 311,246,059

	Balance at 1 July 2010 At appointment date Issued for shares in TSI Limited Purchases in the market Balance at 31 March 2011
Period ended 31 March 2011
	Nos. Nos. Nos. Nos. Nos.
Paul M Boyatzis	17,680,000 - 104,802,581 - 122,482,581
Gary P Foster	9,288,215 - 166,101,930 100,000 175,490,145
Simon K Cato	950,000 - - 300,000 1,250,000
Yew Seng Kwa	- 3,500,000 - - 3,500,000
Phillip J MacLeod	- - - 250,000 250,000
Mohnish Kumar	- - 4,070,000 1,500,000 5,570,000
Hemant Sood	- - 2,035,000 - 2,035,000
Total	27,918,215 3,500,000 277,009,511 2,150,000 310,577,726

Transaction Solutions International Limited ANNUAL REPORT 2012 48

Loans to Key Management Personnel

There were no loans made to KMPs during the year (2011: nil)

Other balances and transactions with Key Management Personnel

The Group did not engage in any other transactions with the KMPs, other than in their capacity as shareholders of the Group.

19. Commitments

Capital commitments:

At 31 March 2012, the Group had commitments to install 110 ATMs and other capital equipment. These commitments are expected result in capital expenditure of approximately $1,800,360 within the next 12 months.

Operating lease commitments:

The Group has certain operating lease commitments in relation to the ATM sites and also the office premises. The existing commitments in relation to non-cancellable operating leases at reporting dates were:

	31 Mar 2012	31 Mar 2011
	$	$
Payable within 1 year	2,194,575	1,810,859
Between 1 and 5 years	9,613,916	8,236,309
Beyond 5 years	5,184,160	9,450,175
Total	16,992,651	19,497,343

20. Contingent Assets and Liabilities

At 31 March 2012 a contingent liability of $23,465 exists within TSI India, on account of a demand of $6,901 for VAT and a penalty of $16,564 being imposed by the office of the Assistant Excise And Taxation Commissioner Mehmadpur, (Shambu), Distt Patiala, Punjab, by treating the consignment of ATMs sent to Punjab as a sale (arrangement of lease and transaction fee as lease money) through an order dated 7[th] January 2008. TSI has gone in appeal before the Deputy Excise and Taxation Commissioner, Punjab and the case is still pending.

21. Events after Balance Sheet Date

Subsequent to the balance date the Company has appointed James Carroll as a Non-Executive Director.

Transaction Solutions International Limited ANNUAL REPORT 2012 49

22. Parent Entity Information

The following details information related to the parent entity, TSI Limited at 31 March 2012. The information presented here has been prepared using consistent accounting policies as presented in Note 2

	31 Mar 12 31 Mar 11
	$ $
Financial Position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Contributed equity Reserves Accumulated losses Total equity Financial Performance Loss for theperiod Other comprehensive income Total comprehensive income for theperiod	5,625,052 3,553,339 13,504,496 13,617,171
	19,129,548 17,170,510
	283,594 247,289 - -
	283,594 247,289
	18,845,954 16,923,221
	40,305,065 33,736,686 2,220,007 1,998,920 (23,679,118) (18,812,384)
	18,845,954 16,923,221
	(4,866,734) (755,070) - -
	(4,866,734) (755,070)

No guarantees have been entered into by TSI Limited in relation to the debts of its subsidiaries.

TSI Limited had no commitments to purchase property, plant and equipment or contingent liabilities at year end.

Transaction Solutions International Limited ANNUAL REPORT 2012 50

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

DX 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

The Board of Directors Transaction Solutions International Limited 24 Colin Street West Perth, WA 6005

25 June 2012

Dear Board Members

Transaction Solutions International Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Transaction Solutions International Limited

As lead audit partner for the audit of the financial statements of Transaction Solutions International Limited for the financial year ended 31 March 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit ; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

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DELOITTE TOUCHE TOHMATSU

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Mark Gover Partner

Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Deloitte Touche Tohmatsu ABN 74 490 121 060

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Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Independent Auditor’s Report to the members of Transaction Solutions International Limited

Tel: +61 8 9365 7000 Fax: +61 (0) 9365 7007 www.deloitte.com.au

Report on the Financial Report

We have audited the accompanying financial report of Transaction Solutions International Limited, which comprises the statement of financial position as at 31 March 2012, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising Transaction Solutions International Limited and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 20 to 50.

Directors’ Responsibility for the Financial Report

The directors of Transaction Solutions International Limited 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 is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Transaction Solutions International Limited would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion:

(a) the financial report of Transaction Solutions International Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 March 2012 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial statements also comply with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in page 11 to 18 of the directors’ report for the year ended 31 March 2012. The directors of Transaction Solutions International Limited are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion the Remuneration Report of Transaction Solutions International Limited for the year ended 31 March 2012, complies with section 300A of the Corporations Act 2001 .

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DELOITTE TOUCHE TOHMATSU

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Mark Gover Partner Chartered Accountants Perth, 25 June 2012

AI assistant

FINDI LIMITED — Annual Report 2012

64934_rns_2012-06-25_c4cddf0d-8a2b-48c6-aba2-153a2c877a36.pdf

ABN 98 057 335 672

ANNUAL FINANCIAL REPORT

Table of Contents

Corporate Directory

Directors

Contact Details

Bankers

Company Secretary

Registered and Principal Office

Stock Exchange Listing

Solicitors

Auditors

Share Registry

Letter to Shareholders

Review of Operations

OPERATING RESULTS

CORPORATE AND FINANCIAL POSITION

BUSINESS STRATEGIES AND PROSPECTS

Directors’ Report

DIRECTORS

Mr Paul Boyatzis – Non Executive Chairman

Mr Gary Foster – Managing Director

Mr Yew Seng Kwa – Executive Director

Mr Simon Cato – Non Executive Director

Mr Phillip MacLeod – Company Secretary

DIRECTORS’ INTEREST

CORPORATE STRUCTURE

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

RESULTS OF OPERATIONS

FINANCIAL POSITION

CHANGE IN YEAR END REPORTING DATE

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

SIGNIFICANT EVENTS AFTER BALANCE DATE

LIKELY DEVELOPMENTS

ENVIRONMENTAL REGULATION AND PERFORMANCE

SHARE OPTIONS

INDEMNIFICATION OF AUDITORS AND DIRECTORS

PROCEEDINGS ON BEHALF OF THE COMPANY

NON-AUDIT SERVICES

AUDITOR’S INDEPENDENCE DECLARATION

DIRECTORS MEETINGS

Remuneration Report (Audited)

Key Management Personnel

Senior managers

Remuneration policy

Executive Remuneration

Fixed Remuneration

Performance Based Remuneration – Short Term Incentive

Performance Based Remuneration – Long Term Incentive

Non-Executive Director Remuneration

Impact of Shareholder Wealth on Key Management Personnel Remuneration

Impact of Earnings on Key Management Personnel Remuneration

Remuneration of KMPs and senior managers

Share-based compensation arrangement to KMPs and senior managers

Shareholding of KMPs and senior managers

Service agreements

Paul Boyatzis

Gary Foster

Yew Seng Kwa

Simon K Cato

James Carroll

Phillip J MacLeod

Mohnish Kumar

Hemant Sood

Performance of the Company for the last five years

Directors’ Declaration

Consolidated Statement of Comprehensive Income For the Year Ended 31 March 2012

Consolidated Statement of Financial Position As at 31 March 2012

Consolidated Statement of Cash Flows For the Year Ended 31 March 2012

Consolidated Statement of Changes in Equity For the Year Ended 31 March 2012

Notes to Accounts For the Year Ended 31 March 2012

1. General Information

(a) Corporate information

(b) Change in financial year and comparatives

(c) Components of the Group

(d) Basis of preparation

(e) Statement of compliance

FINDI LIMITED Annual Report 2012