Annual Report
For the year ended 27 March 2011 Contents
OUR BUSINESS
PayPoint is a leading international provider of convenient payments and value added 
services to major consumer service organisations in the utility, telecoms, media, 
financial services, transport, retail, gaming and public sectors. 
We handle over £10 billion from 590 million transactions annually for more than 6,000 
clients and merchants.  We deliver payments and services through a uniquely strong 
combination of local shops, internet and mobile distribution channels.
Retail networks
PayPoint operates branded retail networks in the UK, Ireland and Romania.  The 
network in the UK numbers 23,000 terminals in local shops (including Co-op, 
Spar, McColls, Costcutter, Sainsbury’s Local, One Stop, Londis and thousands of 
independents) in all parts of the UK.  Our terminals process energy meter prepayments, 
cash bill payments, mobile phone top-ups, transport tickets, BBC TV licences and a 
wide variety of other payment types for most leading utilities and many telecoms and 
consumer service companies. 
In Romania, the branded retail network numbers 6,000 terminals located in local 
shops across the country and is expanding.  Our terminals process cash bill payments 
for utilities and mobile phone top-ups.  In the Republic of Ireland, we have over 500 
terminals in shops and Credit Unions processing mobile top-ups and bill payments.
We also supply added value services to our retail agents to improve the yield from 
our network.  In the UK, we have a consumer parcel drop off and collection service 
using PayPoint’s retail network through Collect+, a joint venture with Yodel (formerly 
Home Delivery Network). This service is already available in 3,700 of our convenience 
retail agents. Clients include ASOS, Littlewoods, Woolworths, New Look, Very, Boden, 
Mobile Phone Xchange and Great Universal.  In addition, in the UK, we have over 
2,500 LINK branded ATMs, mainly in the same sites as our terminals. 
Internet payments
PayPoint.net is an internet payment service provider, linking into all major UK acquiring 
banks to deliver secure online credit and debit card payments for over 5,500 web 
merchants, including Stan James, 32Red, Sportingbet, PKR, Betsson, Moonpig, 
Moneysupermarket.com, Severn Trent Water, Ann Summers, Links of London, Funky 
Pigeon, Mr & Mrs Smith and British Gas Home Vend.  We offer a comprehensive set 
of products ranging from a transaction gateway through to a bureau service, in which 
we take the merchant credit risk and manage settlement for the merchants.  We offer 
real-time reporting for merchant transactions and Fraudguard, an advanced service to 
mitigate the risk of fraud for card not present transactions. 
Mobile payments
PayByPhone is a leading international provider of services to parking authorities 
allowing consumers to use their mobile phones to pay for their parking by credit or 
debit card.  It has contracts in the UK, Canada, USA and France.
PayPoint is widely recognised for its leadership in payment systems, smart technology 
and consumer service.  Our high quality services are backed by a 24/7 operations 
centre with dual site processing for business continuity. 
PayPoint sustains its competitive differentiation by aiming to meet clients’ payment 
needs, not just through a wide spectrum of payments, but also with products that 
span payment channels.  For example, PayCash enables cash payment for internet 
transactions at PayPoint retail agents and our new home vending solutions allow 
consumers to pay across the internet as well as through our retail network. 
Highlights
Page
Highlights 1
Chairman’s statement 2
Business review
Chief Executive’s review 3
Key performance indicators 6
Operating and financial review 7
Risks 12
Corporate social responsibility 14
Governance
Governance 17
Board of directors 19
Directors’ report 20
Remuneration committee report 22
Statement of directors’ 
responsibilities 
28
Independent auditor’s report to 
the members of PayPoint plc 
29
Financial statements
Consolidated income statement 30
Consolidated statement of 
comprehensive income
30
Consolidated balance sheet 31
Consolidated statement of 
changes in equity
32
Consolidated cash flow 
statement 
32
Company balance sheet 33
Company statement of changes 
in equity
34
Company cash flow statement 34
Notes to the financial statements 35
Annual general 
meeting
Notice of annual general meeting 49
Form of proxy 55
Officers & professional advisers Inside 
back 
cover PayPoint plc annual report 2011 1
•	 Record group transaction volume (590 million), with growth in all 
channels  
•	 UK retail services continued strong growth, net revenue up 25%  
•	 12 million Romanian bill payment transactions, up 118% 
•	 59 million internet transactions processed, up 34% 
•	 PayByPhone transaction volumes of 14 million 
•	 Collect+ transaction volumes increased to over 1 million, up over  
4 times on last year 
•	 Developed new virtual terminal which is currently being rolled out  
to selected multiple retailers’ till systems 
•	 Debt repaid and year end net cash was £26.5 million 
Year ended  
27 March
2011
Year ended
28 March
2010
Increase /
(decrease) %
Revenue £193.2m £196.6m (1.7)
Net revenue
1
£82.7m £77.4m 6.9
Gross margin 36.6% 32.3% 4.3ppts
Operating profit £36.1m £34.1m 5.8
Profit before tax £34.5m £32.6m 5.5
Diluted earnings  
per share 35.1p 32.7p 7.5
Dividend per share 23.4p 21.8p 7.3
1. Net revenue is revenue less the cost of mobile top-ups and SIM cards where PayPoint is principal and 
costs incurred by PayPoint which are recharged to clients and merchants. These costs include retail agent 
commission, merchant service charges levied by card scheme sponsors and costs for the provision of call 
centres for PayByPhone clients.
HIGHLIGHTS
Operating profit
29.2 33.7 34.1 36.1
2008 2009 2010 2011
Net revenue
1
Dividend per share
2008 2009 2010 2011
15.7 17.6 21.8 23.4
2008 2009 2010 2011
69.9 77.4 77.4 82.7 2 PayPoint plc annual report 2011
I am pleased to report the return to growth in earnings as a result of good 
performance by our UK retail network, excellent internet payment growth and 
substantial progress in our Romanian network and Collect+. We have increased 
resources and improved infrastructure at PayByPhone.  We have made strong progress 
in technology, completing the development and starting the roll out of our virtual 
terminal, developing a broadband communications solution for faster transactions 
and introduced new services for our terminal network, including cash out and money 
transfer.
In the UK retail network, retail services delivered healthy growth, although mobile  
top-ups continued to decline.  I am particularly delighted with the recent 
announcement that we have won the tender to provide the retail network for the 
Department for Work and Pensions’ replacement of giro cheques for benefit payments, 
the contract for which is under negotiation.  Currently, over 20 million giro cheques 
are issued annually to pay benefits.  We have already demonstrated that our retailers 
can make payments to consumers (in addition to our traditional strength in collecting 
money from them).  This will substantially increase the flow of money out, reducing 
banking charges to retailers and delivering more commission and footfall to them.
Internet net revenues have increased 20% and the business had notable success in 
winning gaming merchants, including Stan James, 32Red and Sportingbet.  We are 
continuing to win gaming business because of our robust and resilient platform, 
innovation, advanced fraud and risk management capabilities, and real-time enterprise 
level reporting.
We have continued to invest in our Romanian retail network by increasing our full 
service terminal estate by more than 1,100, whilst removing all the old mobile top-up 
only sites.  We accept bill payment for 27 clients and transaction volumes have more 
than doubled to over 12.1 million transactions.  Under a new contract with Western 
Union, we will roll out money transfer this year.
We have extended our parcels service through Collect+, our joint venture with Yodel, 
selectively across our UK retail network. Momentum is strong, with considerable 
interest among major internet retailers and internet marketplaces. We have over 3,700 
sites handling Collect+ parcels and 30 home shopping retailers live, including some of 
the most respected customer service leaders, including ASOS, New Look, Boden and 
Very. During the year, we handled over 1 million parcels.
In PayByPhone, we have increased the resources in sales, marketing and delivery more 
than we planned. We have upgraded the infrastructure to provide disaster recovery 
and introduced a new consumer friendly mobile web parking registration and payment 
system for the UK and North America. We will continue to invest to stay at the leading 
edge of this fast moving market.
The combination of sound, profitable growth in both the UK retail network and our 
internet business, substantive progress towards profitability in our Romanian retail 
network, gathering momentum in Collect+ and proper resourcing of PayByPhone, 
mark an important year in re-establishing the group for substantial growth. We are 
proposing a final dividend of 15.6 pence per share, making a total for the year of  
23.4 pence, an increase of 7.3%.
For the current financial year, trading is in line with the company’s expectations. Our 
established business streams (UK and Irish retail networks and internet payments) are 
strong, with further opportunities to enhance retail yield through the introduction 
of new technology and services. In addition, improvements in our service offering to 
online merchants will provide opportunities for growth. We will benefit from rolling 
out services in our developing business streams (Collect+, PayByPhone and Romanian 
retail network), growing our market share and improving profitability. Together, our 
businesses provide a solid foundation to deliver value for our shareholders.
David Newlands
26 May 2011
Collect+
Collect+ brings a different type of 
customer to our agents’ stores and 
pays generous commission to retailers. 
Increasingly being offered by mail order 
companies and online merchants as an 
option for both delivery and returning 
goods via a participating PayPoint retailer, 
Collect+ has been extended to enable 
consumers and small businesses to send 
parcels to each other at any address in 
the UK or to another PayPoint retailer 
nominated by the customer. Collect+ is a 
listed option on eBay.
“We have found Collect+ to be an 
excellent additional service to offer in 
store. Business is constant and brings 
new customers into the store from the 
local area and beyond.”
Adrian Boyd, Mace, Belfast
Cash Out
PayPoint has introduced a number 
of schemes that involve paying cash 
to consumers. Benefits to the retailer 
include customers spending the cash 
in store, healthy commission on every 
transaction and reduced banking 
charges. Examples of these schemes 
include dual fuel rebates from British 
Gas for 600,000 customers and free 
electricity credits for customers of E.ON. 
Mobile Phone Xchange, a leading mobile 
phone recycling company, has offered its 
customers the option of collecting cash 
for their old phones at any  
PayPoint retailer.
“Our stores have experienced high 
volumes of ‘cash out’ transactions, which 
has been of real benefit to our business. 
We are earning extra commission for a 
very time efficient, simple transaction. 
This type of transaction is also having the 
added benefit of customers either
spending their rebate in-store on bill 
payments or on other purchases. Win 
win for all concerned!”
Scott Partridge, News & Services
Manager, Rippleglen Ltd.
CHAIRMAN’S STATEMENT PayPoint plc annual report 2011 3
CHIEF EXECUTIVE’S REVIEW
PayPoint has had another good year, in which we have delivered profits in line with 
market expectations and our strategic plans.  Our UK retail network and internet 
payments have continued to be highly profitable and cash generative. Collect+, 
PayByPhone and our Romanian retail network, which are important to the creation of 
value, have all made good progress during the year. 
Our strategy:
Since the flotation of the original UK retail network business in 2004, PayPoint has 
evolved into a specialist payments company. Our strategy has four key elements: 
•	 Breadth of payments capability
The acceptance of a broad range of payments (cash, cards, e-money, etc.) through 
multiple channels (retail, internet and mobile phone)
•	 Strength in vertical markets
Targeting sectors with high volume, recurring consumer payments
•	 Value added content / services
Providing additional content or services to the payment channels and chosen  
vertical markets to create differentiation
•	 Geographic reach
Identifying regions with attractive payment dynamics to create value through 
exporting our know-how.
PayPoint has succeeded in delivering this broad payment hub capability to clients 
in a number of key vertical markets (energy/utilities, telecoms and media, financial, 
transport/parking, public sector/social housing, retail and gaming/leisure), with the 
ability to process payments across the consumer’s choice of payment and channel. 
The delivery of payments from consumers to our clients encompasses transaction 
authorisation, processing, clearing and settlement and interfacing to banks, card 
schemes/networks and other financial intermediaries. PayPoint also provides value 
added content and services within each channel, to differentiate the PayPoint 
proposition from those of its competitors. 
In our retail channels, differentiation is achieved through providing retailers with a 
broad range of retail services, including ATMs, parcels, SIM cards and international 
money transfer through Western Union
®
. 
In the internet channel, differentiation to merchants is driven through a widening base 
of card scheme sponsors and payment types, together with the quality of our fraud 
screening and reporting. 
Our mobile channel, delivered through PayByPhone, will similarly drive differentiation 
through its ability to leverage our cash retail payment capability and internet payment 
services, combined with improving the consumer experience with appropriate smart 
phone applications.
The extension of our geographic reach is progressing. 
Internet payments
PayPoint.net’s secure payment solutions 
are tailored to meet clients’ business 
requirements by seamlessly integrating 
with their in-house systems. Clients 
are able to incorporate PayPoint.net’s 
real-time reporting and reconciliation 
functionality into their existing 
technology, making their systems easier 
to manage while giving them a detailed 
view of their business performance. 
Fraudguard, our market leading 
e-commerce risk management platform, 
allows PayPoint.net’s clients to take a 
risk based approach to fraud, protecting 
their revenues.  PayPoint.net’s extensive 
customer portfolio, which includes 
leading names such as StanJames.com, 
Sportingbet and 32Red, firmly positions  
it as a leading PSP in the gaming and 
retail sectors.
“Brand reputation is a key factor for 
WHSmith, which is why we need a 
reliable payment solution. Not only 
has PayPoint.net’s payment platform 
delivered on its promise, we’ve been
highly impressed with their dedicated 
support and ongoing consultation.”
Mark Stephenson, Operations Manager, 
WHSmith
Western Union
Offering the Western Union
®
 Money 
Transfer
sm
 service through PayPoint 
gives retailers a unique advantage over 
other local stores by attracting more 
customers, generating additional footfall 
and increasing profits. By earning 
commission on both ‘send’ and ‘receive’ 
transactions, retailers are able to boost 
their earnings by up to £3,500 per 
annum.  Since the year end, PayPoint has 
introduced Western Union transactions to 
the PayPoint terminal, making it the only 
money transfer supplier able to provide 
the Western Union service in the UK with 
no additional investment in equipment by 
the retailer.
“Since starting Western Union
®
, I’ve
noticed new customers coming to my 
store every week. I am providing a very 
valuable service to the local community 
whilst boosting my monthly income.”
Mrs Tharmeshwaran, Proprietor,
Shop & Saver, London 4 PayPoint plc annual report 2011
CHIEF EXECUTIVE’S REVIEW continued
Growth and prospects:
Technology
We use technology to drive value through the introduction of new payment types and 
related services.  These, in turn, add new revenue opportunities to our proven recurring 
payment methods.
In our UK retail network, we are rolling out a new virtual terminal to multiple retailers 
- a software variant of our terminal which is integrated into the retailers’ till systems, in 
conjunction with a bespoke PayPoint plug-in reader to provide the full functionality of 
the physical terminal more efficiently and at lower cost. In store, this allows our service 
to be available at every check-out lane and eliminates the need for reconciliation with 
the main till system. As we free UK network terminals, we will deploy them in Romania.
An increasing number of our terminals are being connected through broadband 
connectivity rather than dial-up, dramatically improving the speed of online transactions.  
In Romania and the UK, a development to enable money transfer on our terminal will 
eliminate the expense and complication of a separate personal computer, significantly 
reducing the entry cost for retailers and expanding the eligibility criteria for the  
service. Development work for cash out services will make our retailer settlement 
systems more streamlined and allow the cash balances we generate through bill 
payment to be recycled back to consumers, saving retailers bank charges and 
increasing in-store spend.
In the internet channel, we are developing substantial improvements to our services 
to online merchants. These include new transaction optimisation, an advanced 
management and reporting solution, a PCI compliance offering and additional payment 
methods, which should provide significant competitive advantage.
PayByPhone is introducing a new, consumer friendly mobile web parking registration  
and payment system and has utilised one of the group’s data centres as a back-up for 
business continuity.
UK retail network
We are focussed on selling retail services to our retail networks.  Net revenues from 
these services have increased 25% in the year.  These services include parcels, ATMs, 
SIM cards, debit and credit card acceptance, receipt advertising and money transfer.  
Our retail network in the UK has provided energy clients with a service to rebate cash 
to consumers, which reverses the traditional flow of money in our retailers.  We are 
currently negotiating the contract following our success in winning the DWP’s tender 
for a service to replace giro cheque benefits which provides us with a scale opportunity 
to extend cash out.  
Romanian retail network
Increasing bill payment volumes have continued to provide growth in Romania and we 
will launch money transfer services this year.  In addition, we are adding new sites to 
cover more neighbourhoods and optimising existing sites to improve their profitability.  
This business should break even in the current year.
Internet
Alongside the introduction of new systems referred to above, we expect to sign up 
further new merchants and to benefit from the introduction of new card scheme 
sponsors, including HSBC International for 38 countries and BNP for France, driving 
growth in profits. These activities will increasingly position PayPoint.net as an 
international provider and will add profitable growth.
Virtual terminal
Our new virtual terminal is the result 
of significant investment to integrate 
PayPoint’s payment services into retailers’ 
own EPoS systems. It enables customers 
to pay their bills at all tills in a store 
while they pay for their shopping, rather 
than having to visit a dedicated counter. 
Transactions are entered in the normal 
way and the details shown on the till’s 
screen and the customer’s receipt. This 
reduces costs for both the retailer and  
us, enabling us to recycle terminals to 
other retailers.
“Transaction times are much quicker
with the new virtual terminal and our 
staff no longer need to spend time at 
the end of the day reconciling payments 
recorded and cash taken. This is a real 
service improvement.”
Paul Taylor, General Manager –
Marketing, Martin McColl
ATMs
PayPoint ATMs are ‘self-fill’, allowing 
retailers to fill the machines with cash 
taken at the PayPoint terminal, avoiding 
the need for a costly cash-in-transit 
operation. The retailer benefits as an in-
store ATM attracts more customers, who, 
having withdrawn cash from the ATM, 
generally spend more in the store.
The ATM also provides retailers with 
additional commission and saves them 
an average of £750 to £1,000 a year 
in bank charges, which they would 
otherwise have to pay to deposit cash 
into their bank. The PayPoint ATM  
estate grew from 2,367 to 2,538 during 
the year.
“I have definitely noticed that customers 
who get cash out spend more in my 
shop, which is great for my profits. I also 
earn valuable commission on the cash 
withdrawals and I saved over £1,000 in 
banking costs last year.”
Mr J Arshad, independent retailer,
Manchester PayPoint plc annual report 2011 5
PayByPhone
PayByPhone, one of the worldwide leaders in mobile phone parking, has the potential 
to replace traditional parking meters in many major cities around the world. We have 
added significant sales and development resources and we are currently tendering to 
several large parking authorities as well as a large number of smaller opportunities in 
the UK, France and North America. Sales lead times are extended in this market, but 
our momentum is encouraging.  We have spent more heavily than anticipated and a 
further loss will result in the current year.   We expect it to turn to profit in the year 
ending March 2013.
Collect+
Our parcels joint venture (50:50) with Yodel has progressed strongly, with substantial 
endorsement from the online retailing community and resulting growth in transaction 
volumes.   We expect them to grow further this year as we sign more home shopping 
clients for returns and deliveries.  A recently introduced consumer to consumer service 
is being extended to smaller packets and is expected to grow significantly this year, as 
we target online traders. This joint venture processes around two million transactions 
per annum (based on transaction volumes in March 2011) and is making good progress 
towards its breakeven volume of 6-8 million parcels, which we expect to reach in the 
year ending March 2013. 
Our plans for the current year:
We will continue to make further progress in the four elements of our strategy to 
increase shareholder value: more payment/channel options, specialism in vertical 
markets, value added services and geographic reach. We plan to make good progress 
in both the established and developing business streams, notably through continuing 
growth in retail services and internet payments, by turning the Romanian retail 
network profitable through an increase in bill payment market share, and by adding 
new customers in Collect+ and PayByPhone.
We are increasingly benefiting from the synergy between our various business streams, 
with more clients taking multi-channel services. We aim to push this dynamic more 
strongly over time, as newer business areas bed in and system platforms can be 
developed across the group. We are strengthening the management in our UK retail 
network to ensure senior management attention is directed proportionately to the 
developing business streams.
PayPoint is one of the best placed companies to make further gains in the fast moving 
payment industry and has a market leading position in retail services, on which we 
intend to build.
Dominic Taylor
26 May 2011
PayByPhone and cash parking
Following the acquisition of PayByPhone 
in March 2010, we have integrated the 
mobile phone capability of PayByPhone 
with our UK retail network to enable 
parking clients to offer their consumers 
a cash payment option. This will enable 
local authorities to reduce or even 
dispense with pay and display machines, 
with many economic benefits, while 
continuing to ensure that motorists who 
don’t pay by card have a convenient 
alternative.
“PayByPhone is a stress-free way to pay 
for parking - quick, secure and no more 
hunting for the right change.”
Councillor Bassam Mahfouz, London
Borough of Ealing
SIM cards
PayPoint has streamlined the traditional
distribution of SIM cards to retailers by
establishing direct relationships with 
all the major operators and MVNOs.  
PayPoint buys the SIM cards and agents 
order single and mixed value packs using 
their PayPoint terminal.  Agents receive 
commission for sales and activations.
“PayPoint’s SIM card commission rates 
are fantastic. Over the last 12 months, 
I’ve sold more than 3,600 SIM cards 
which have been activated and topped 
up, earning me thousands in commission.”
Mohammed Jahangir, Mirpur Food
Store, Birmingham
CHIEF EXECUTIVE’S REVIEW continued 6 PayPoint plc annual report 2011 6 PayPoint plc annual report 2011
KEY PERFORMANCE INDICATORS (KPIs)
In order to realise its strategic aims, PayPoint has identified areas of strategic focus and has put in place a number of KPIs to measure 
progress against them. Whilst these KPIs are helpful in measuring the group’s performance, they are not exhaustive and the group 
uses many other measures to monitor progress.
Measuring our performance
Strategic  focus KPI Description 2011 2010
Shareholder return Earnings per share 
(basic)
Profit after tax attributable to equity holders of the 
parent divided by the weighted average number of 
ordinary shares in issue during the year.
35.2p 32.9p
Dividends per share The aggregate of the final dividend proposed and 
interim dividend paid divided by the number of 
fully paid shares at the end of the year.
23.4p 21.8p
Economic profit Operating profit after tax and a charge for capital 
employed based upon the group’s cost of capital.
£17.4 million £18.5 million
Growth Retail networks 
transactions
Number of PayPoint transactions processed in the  
year on our terminals, ATMs and on our retailers’  
EPoS systems.
517 million 507 million
Internet transactions Number of transactions processed in the year by  
PayPoint.net.
59 million 44 million
PayByPhone Number of PayByPhone transactions processed in 
the year (2010: since acquisition).
14 million 1 million
Transaction value The value of transactions processed via our 
terminals, retailers’ EPoS systems, internet 
merchants, ATMs, PayByPhone and the sales value 
of other retail services.
£10.6 billion £9.7 billion
Net revenue Revenue less: commissions paid to retail agents; 
the cost of mobile top-ups and SIM cards where 
PayPoint is principal; card scheme sponsors‘ 
charges and call centre costs recharged to clients.
£83 million £77 million
Operating margin Operating profit including our share of joint 
venture losses as a percentage of net revenue.
42% 42%
Asset optimisation Return on capital 
employed
Total operating profit for the year divided by 
monthly average capital employed excluding cash.
53% 88%
People Labour turnover Number of permanent employees who left during 
the year divided by average total permanent 
employees.
UK and Ireland 25% 20%
Rest of the world 18% 49% PayPoint plc annual report 2011 7 PayPoint plc annual report 2011 7
OPERATING AND FINANCIAL REVIEW
The operating and financial review complies with the guidance 
set out in the Accountancy Standards Board’s Reporting 
Statement: Operating and Financial Review and is prepared 
solely to provide additional information to shareholders as 
a body to assess PayPoint’s strategies and their potential to 
succeed. It should not be relied upon for any other purpose. 
It contains forward looking statements that have been made 
by the directors in good faith, based on the information 
available at the time of approval of the annual report and such 
statements should be treated with caution due to the inherent 
uncertainties, including both economic and business risk factors, 
underlying any such forward looking information.
Our key performance indicators are shown on page 6.
PayPoint is a payment service provider for consumer and 
business payment transactions and, as such, has only one 
operating segment. However, reflection on various facets helps 
explanation of the execution of our strategy in developing 
the group and, accordingly, in addition to the analysis of the 
number and value of transactions, revenue and net revenue, we 
have shown an analysis which separates our developing business 
streams (bill payment and top-ups in Romania, Collect+ and 
PayByPhone), from our established business streams (the UK and 
Irish retail networks and internet channel).
In addition, we have analysed our results by channel as follows:
Retail networks:
Bill and general (pre-paid energy, bills and tickets)
Top-ups (mobile, pre-paid cards and phone cards)
Retail services (ATM, debit/credit, parcels, money transfer, SIMs 
and receipt advertising)
Internet (transactions between consumers and merchants, 
pre-authorisations and Fraudguard, where separately charged)
PayByPhone (parking and bicycle rental transactions)
Other for revenue and net revenue only (software development, 
configuration and customisation and settlement of claims)
Growth opportunities include retail services in the UK retail 
network; new merchants for internet payments; the expansion 
of the retail network and new retail services in Romania; 
new parking contracts and driving consumer adoption for 
PayByPhone; and building and developing Collect+.
OPERATING REVIEW
Transactions have increased to 590 million (2010: 552 million), 
up 4% in the established business streams and 155% in the 
developing business streams.
Transaction value increased to £10.6 billion (2010: £9.7 billion), 
up 8% in the established business streams and up 123% 
in the developing business streams, including the impact of 
PayByPhone for a whole year and the reduction in mobile top-
ups in Romania.
Revenue in developing business streams was up 7% as a result 
of a full year trading of PayByPhone, offset by a 19% decrease 
in mobile revenue in Romania. The established business 
streams’ revenue was down 2% as a result of the reduction 
in mobile top-ups and the change of card scheme sponsor, 
where merchant service charges are no longer included in 
revenue (2010: £2.5 million), as they are now charged direct to 
merchants. 
Net revenue in the developing business streams was up 119%, 
with strong growth in Romanian bill payment and Collect+ 
and as a consequence of the inclusion of PayByPhone. The 
established business streams’ net revenue was up 3%, held back 
by the decline in mobile volumes. 
Operating profit in the established business streams was £38.4 
million (2010: £36.2 million) and the operating loss, including 
our share of Collect+, in the developing business streams was 
£3.9 million (2010: £3.8 million), an increase of £0.1 million. 
The small increase in the loss in developing businesses is as a 
result of a better performance in Romania offsetting the impact 
of the inclusion of the PayByPhone business, which was loss 
making in the year, as expected.
Established 
business 
streams
1
Developing 
business 
streams
2
Total
Adjust
Collect+
3
As 
reported
Transactions
million
2011 559 31 590 - 590
2010 540 12 552 - 552
Transaction  
value
£million
2011 10,316 285 10,601 - 10,601
2010 9,560 128 9,688 - 9,688
Revenue
£000
2011 167,700 26,535 194,235 (1,002) 193,233
2010 171,933 24,875 196,808 (205) 196,603
Net 
revenue
4
£000
2011 76,811 6,539 83,350 (627) 82,723
2010 74,589 2,981 77,570 (164) 77,406
1. Established business streams include the UK and Irish retail networks and the internet payment channel.
2. Developing business streams includes Romania, PayByPhone and for Collect+, revenue and net revenue only.
3. Collect+ revenue and net revenue is included in developing business stream’s revenue and net revenue, but as Collect+ is reported in the Consolidated Income 
Statement on a profit before tax only basis, revenue and net revenue needs to be eliminated to reconcile to reported revenue and net revenue.
4. Net revenue is revenue less the cost of mobile top-ups and SIM cards where PayPoint is principal and costs incurred by PayPoint which are recharged to clients and 
merchants. These costs include retail agent commission, merchant service charges levied by card scheme sponsors and costs for the provision of call centres for 
PayByPhone clients. 8 PayPoint plc annual report 2011
OPERATING AND FINANCIAL REVIEW continued
Analysis of transactions
There has been growth in transaction volumes across most 
services, with the exception of mobile top-ups where, in all 
territories, there has been a decrease. Mobile operators are 
offering more value for the same or lower cost per top-up to 
consumers, resulting in fewer transactions and, in the UK in 
particular, mobile operators promote monthly contracts over 
prepay, thereby migrating prepaid consumers to contracts.
Year
ended 
27 March
2011
million
Year
ended 
28 March
2010
million
Increase/
(decrease)
%
Retail networks
  Bill and general 350,970 339,801 3.3
  Top-ups 117,670 128,887 (8.7)
  Retail services 48,425 38,901 24.5
Internet payments 58,544 43,536 34.5
PayByPhone 14,059 762 n/a
Total 589,668 551,887 6.8
Prepaid energy volumes (included in bill and general) in the UK 
have increased by 4% on last year. The cold weather before 
Christmas and increases in domestic energy tariffs have helped 
volumes in the second half of the year.
Bill payments in Romania have continued to grow as more 
terminal sites are rolled out and consumers become aware of 
the service. In the year, we have processed over 12 million bill 
payment transactions, an increase of 118% on the previous  
year and our run rate, based on transactions in March 2011, is 
16 million transactions per annum.
Mobile top-ups in UK, Ireland and Romania were down 10% 
overall, against a 11% decline this time last year. E-money 
volumes, which are included in top-ups, were up 21% to  
4 million.  
Retail service transaction volumes have increased across all 
products, ATMs, debit/credit, parcels, money transfer and SIMs. 
Debit/credit card transactions were up more than 30% on last 
year. We have sold almost 700,000 SIMs in the year (2010: 
300,000). Parcel volumes continue to grow and have increased 
over four times on last year to just over 1 million transactions.
Internet transactions of 59 million were up 34% on last year as 
we continued to add new merchants and existing merchants 
grew organically. New merchants in the last 12 months include 
Stan James, 32Red, Sportingbet, Funky Pigeon and Links of 
London. 
PayByPhone transactions are for a full year compared to 19 days 
last year.  Towards the end of the year, PayByPhone saw the 
number of tenders issued by councils and parking authorities 
increase as they looked for a more cost effective method for 
collecting parking charges. 
During the year, we produced 70 million receipts (2010: 10 
million) containing an advertising message. These are not 
counted as additional transactions.
Transaction value
There has been substantial growth in the value paid by 
consumers (transaction value), primarily in bill and general 
payments, internet payments and PayByPhone. 
 
Year
ended 
27 March
2011
£000
Year
ended 
28 March
2010
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 6,198,171 5,925,249 4.6
  Top-ups 1,114,809 1,166,507 (4.4)
  Retail services 394,727 377,271 4.6
Internet payments 2,838,147 2,216,319 28.1
PayByPhone 55,020 3,077 n/a
Total 10,600,874 9,688,423 9.4
Growth in bill and general transaction value reflected the 
increase in transactions and their average value. There continues 
to be strong growth in higher value transactions for local 
authority and housing authority payments and a small rise in the 
average value for energy prepayments.
The reduction in top-ups transaction value reflected the overall 
decline in the pre-pay mobile market. An increase in e-money 
transaction value off-set the overall reduction and average 
transaction values were up 5%.  
Retail services transaction value is relatively small as SIM 
sales have low value and debit/credit transactions (where the 
card scheme sponsors settle direct with our retailer), parcel 
transactions and terminal advertising have no associated 
transaction value.
Internet transaction value has increased by 28% but transactions 
have a lower average value of £48.47 (2010: £50.91). Part of 
the decline in average value was due to over 1 million energy 
pre-payment gas and electricity transactions, where consumers 
topped-up via the internet at home, at lower values. The signing 
of three large gaming merchants during the year also reduced 
the average transaction value as gaming tends to be at lower 
transaction value than other sectors.
PayByPhone value reflects a full year of the value of consumers’ 
parking transactions and bicycle rentals against a period of  
19 days from the acquisition of the business in the prior period. PayPoint plc annual report 2011 9
Revenue analysis
Year
ended 
27 March
2011
£000
Year
ended 
28 March
2010
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 57,889 58,564 (1.2)
  Top-ups 98,843 108,508 (8.9)
  Retail services 19,602 16,168 21.2
Internet payments 8,939 9,968 (10.3)
PayByPhone 4,501 283 n/a
Other 3,459 3,112 11.1
Total 193,233 196,603 (1.7)
Bill and general payments revenue was slightly lower than last 
year, as some clients elected to work on a more exclusive basis 
to secure lower commission rates for more volume. 
In Romania and Ireland, PayPoint acts as principal for mobile 
phone top-ups and, as a result, the sales value of the top-up 
is recorded as revenue, with the purchase cost of the top-up 
recorded in cost of sales. In the UK, PayPoint acts as an agent 
and only the commission income is recorded as revenue. The 
decline in mobile volumes, therefore, affects revenue arising in 
Romania and Ireland more than in the UK.
Retail services revenue increased strongly as a result of growth in 
the number of sites processing credit and debit transactions to 
5,948 at the year end (2010: 4,998); growth in revenues from 
parcels; a full year of SIM card sales; advertising on till receipts; 
and money transfer. 
Retail services also include ATMs, where revenue is derived 
from cash withdrawals, balance enquiries and rental income. 
Whilst ATM revenue has grown, the average revenue per ATM 
decreased as a consequence of lower cash withdrawal revenues 
on more recently installed ATMs and lower rental income, as 
five year term rental agreements expire and fully depreciated 
machines are rolled over on lower rentals.
Internet payment revenues were lower because merchant service 
charges, which were formerly included in revenue and cost of 
sales, were £nil in this channel this period (2010: £2.5 million), 
as a consequence of a change in card scheme sponsor. 
PayByPhone revenues of £4.5 million were for the full year 
compared to only 19 days last year and included costs that 
are recharged to clients for the provision of call centres and 
merchant service charges from card scheme sponsors.
Other revenue includes rechargeable software development 
work, configuration and customisation, early settlement and claims. 
Net revenue analysis
Net revenue is revenue less retail agent commission, merchant 
service charges levied by card scheme sponsors, costs of SIM 
card stock, recharges for the provision of call centres for 
PayByPhone clients and the purchase value of Romanian and 
Irish mobile top-ups for which we act as principal.
Net revenue is a measure which the directors believe assists with 
a better understanding of the underlying performance of the 
group and is shown in the table below.
Year
ended 
27 March
2011
£000
Year
ended 
28 March
2010
£000
Increase/
(decrease)
%
Retail networks
  Bill and general 33,806 33,586 0.6
  Top-ups 22,683 24,272 (6.5)
  Retail services 10,827 8,684 24.7
Internet payments 8,939 7,469 19.7
PayByPhone 3,009 283 n/a
Other 3,459 3,112 11.1
Total 82,723 77,406 6.9
Bill and general net revenue increased mainly as a result of the 
growth in Romanian bill payment net revenue, which was up 
94% on last year.
The decrease in top-ups net revenue was lower than the 
decrease in revenue as a result of the growth in e-money 
transactions, which have higher than average net revenue.
Retail services net revenue has a greater percentage increase 
than revenue as there is no commission payable on some 
services, including debit and credit card transactions.
Internet net revenue was up 20%, primarily as a result of 
the increase in transaction volumes and value and the better 
margins from our new card scheme sponsor. Net revenue is the 
same as revenue as a result of merchant service charges now 
being charged directly to our bureau merchants by the card 
scheme sponsor.
Collect+ 
During the year, we processed over 1 million transactions for 30 
clients (2010: 0.2 million transactions for 13 clients). Transaction 
volumes continue to grow and our annual run rate, based on 
March 2011, is now over 2 million transactions. In the year, we 
added a store to home delivery service, where customers can 
take a parcel to a Collect+ store and have it delivered to the 
recipient’s home address. More recently, we launched a packet 
delivery service for parcels less than 2kg in weight.
OPERATING AND FINANCIAL REVIEW continued 10 PayPoint plc annual report 2011
OPERATING AND FINANCIAL REVIEW continued
Network growth 
Terminal sites overall have increased by 7% to 29,508.
In the UK and Ireland, sites have increased by 870, an increase 
of 4%. During the second half of the year, we introduced 
our new EPoS integrated solution to multiple retailers, which 
combines a virtual terminal through software in the retailer’s till 
system with plug in reader to provide full functionality at lower 
costs. As well as enhancing our service to multiple retailers,  
this frees terminals for use in Romania.  We expect to roll this 
out further. 
In Romania, we installed over 1,100 net new full service 
terminals in the year and have removed all the remaining old 
mobile top-up only terminals.
In our internet channel, we added over 1,400 new merchants 
during the year but churn of low value merchants, in particular 
from the change of credit card scheme sponsor at the start of 
the year, led to a net reduction of 405 merchants. Since the half 
year, the merchant estate has grown by a net 201 merchants. 
Despite the decrease in merchant numbers, transaction volume, 
value and net revenue all increased.
We continued to add more Collect+ sites as transaction volumes 
increased and as retailers recognised the benefits of offering  
this service.
Analysis of sites
27 March
 2011
28 March
 2010
Increase/
(decrease) 
%
UK & Ireland terminal sites 23,513 22,643 3.8
Romania terminal sites 5,995 4,816 24.5
Total terminal sites 29,508 27,459 7.5
Internet merchants 5,213 5,618 (7.2)
Collect+ sites 3,668 3,418 7.3
FINANCIAL REVIEW
Income statement
Revenue for the year was 1.7% lower at £193 million (2010: 
£197 million). The reduction results largely from a decrease 
in mobile top-ups and from the impact of merchant service 
charges on card transactions being charged direct to merchants 
rather than through PayPoint.net. This revenue reduction is also 
reflected in cost of sales which, at £122 million (2010: £133 
million), was down 8.2%. Agents’ commission decreased to 
£71 million (2010: £73 million) due to fewer mobile top-up 
transactions, which pay a higher than average commission, and 
reductions in the amount paid for commission by the mobile 
operators. The cost of mobile top-ups in Ireland and Romania
1
 
has fallen to £39 million (2010: £44 million). 
Net revenue
2
 of £83 million (2010: £77 million) was up 6.9%.
1. In Ireland and Romania, PayPoint is principal in the sale of mobile top-ups and, accordingly, the face value of the top-up is included in sales and the corresponding 
costs in cost of sales.
2. Net revenue is revenue less the cost of mobile top-ups and SIM cards where PayPoint is principal and costs incurred by PayPoint which are recharged to clients and 
merchants. These costs include retail agent commission, merchant service charges levied by card scheme sponsors and costs for the provision of call centres for 
PayByPhone clients.
3. Operating margin is calculated as operating profit, including our share of Collect+ losses, as a percentage of net revenue.
Operating costs (administrative expenses) were 17.7% higher 
at £35 million (2010: £29 million) as a result of the inclusion 
of a whole year’s worth of trading of PayByPhone. Excluding 
PayByPhone, operating costs were up 5.4%. 
The increase in operating costs resulted in part from the one-off 
costs, including the legal costs, of successfully defending against 
Camelot’s bid to provide services in bill and general payments, 
mobile top-ups and debit/credit processing.
Operating margin
3
 was flat at 42% as a consequence of the 
increase in operating costs. 
Our share of the loss in developing Collect+ was £1.5 million as 
expected (2010: loss of £1.6 million).
Profit before tax was £34.5 million (2010: £32.6 million) an 
increase of 5.5%. The tax charge of £10.6 million (2010:  
£10.5 million) represents an effective rate of 30.8% (2010: 
32.2%). The tax charge was higher than the UK nominal rate of 
28% because of unrelieved losses in Romania and Canada and 
the write off of the deferred tax asset relating to tax relief for 
share based payments.
Balance sheet
The short-term borrowing of £6 million was repaid in full  
in March.  
Cash flow
Cash generated by operations was £42.2 million (2010: 
£38.7 million), reflecting strong conversion of profit to cash. 
Corporation tax of £11.0 million (2010: £13.7 million) was paid. 
Capital expenditure of £3.2 million (2010: £2.7 million) reflected 
spend on new terminals, ATMs and IT equipment. Net interest 
paid was £0.1 million (2010: £0.2 million receipt) as a result of 
the loan that was drawn down at the end of last year. 
Equity dividends paid were £15.0 million (2010: £12.9 million). 
During the year the company repaid the £6 million loan. 
Cash and cash equivalents were £26.5 million (including client 
cash of £6.1 million), up from £20.8 million (including client 
cash of £6.8 million but excluding the bank loan of £6 million).
Economic profit
PayPoint’s economic profit (operating profit less tax and capital 
charge) was £17.4 million (2010: £18.5 million), lower than last 
year because of the acquisition of PayByPhone, which is loss 
making as expected.
Dividend
We propose to pay a final dividend of 15.6p per share (2010: 
14.4p) on 22 July 2011 to shareholders on the register on  
24 June 2011, subject to the approval of the shareholders at 
the annual general meeting. An interim dividend of 7.8p (2010: 
7.4p) per share was paid on 21 December 2010, making a total 
dividend for the year of 23.4p (2010: 21.8p), up 7.3%, broadly 
in line with earnings. PayPoint plc annual report 2011 11
OPERATING AND FINANCIAL REVIEW continued
Liquidity and going concern
The group has cash of £26.5 million (including client cash of 
£6.1 million) and had, at the year end, an unsecured loan facility 
of £35 million, which was due to expire in August 2011. A new 
replacement £35 million, five year facility has been agreed with 
our bankers since the year end. Cash and borrowing capacity is 
adequate to meet the foreseeable needs of the group, taking 
account of any risks (page 12). The financial statements have 
therefore been prepared on a going concern basis.
Financing and treasury policy
The financing and treasury policy requires a prudent approach to 
the investment of surplus funds, external financing, settlement, 
foreign exchange risk and internal control structures. The  
policy prohibits the use of financial derivatives and sets limits  
for gearing.
Charitable donations
During the year, the group made charitable donations of 
£19,400 (2010: £15,000) to charities serving the communities 
in which the group operates. We encourage employees to raise 
funds for charity and the company matches funds raised by the 
employees, subject to certain limits.
During the year, we collected money for the Disasters 
Emergency Committee (DEC) for the Pakistan flood appeal and 
for the BBC’s Children in Need telethon.
Employees
Our success depends upon the continuing support and 
commitment of all our staff.  We would like to take 
this opportunity to thank PayPoint’s employees for their 
commitment, energy and enthusiasm in the delivery of  
these results.
Strategy, risks and corporate social responsibility
Details of the company’s strategy are included in the Chief 
Executive’s review on page 3. The company’s approach to 
corporate social responsibility and an analysis of risks facing  
the company is set out in separate statements on pages 12  
and 15 respectively.
Economic climate
The company’s bill and general payments sector, which accounts 
for 41% (2010: 43%) of our net revenue, has continued to 
be resilient, as consumers’ discretion in expenditure is limited 
for essential services and our service continues to be popular. 
Utility providers in the UK continue to install new prepay gas 
and electricity meters, which will have a beneficial impact on our 
transaction volumes. The internet payment market continues 
to grow substantially. There has been an adverse impact on 
our mobile top-ups as mobile operators continue to offer more 
airtime at lower cost in the UK and to promote prepay less than 
contract. PayByPhone is able to offer parking authorities a more 
cost effective collection system for parking compared to pay and 
display machines. This has led to an increase in the number  
of tenders being issued as parking authorities try to reduce  
their costs. 
PayPoint’s exposure to retail agent debt is limited as credit 
granted to retail agents is restricted by daily direct debiting for 
all UK and Irish transactions, other than EPoS mobile top-ups 
(which are collected weekly).  There is some concentration of 
risk in multiple retail agents.  Most of PayPoint’s clients in the 
UK, other than mobile operators, bear the cost of retail agent 
bad debt.  In PayPoint Romania, the risk of bad debt lies with 
the company.  In PayPoint.net, exposure is limited to receivables 
from merchants for fees, except in the case of bureau internet 
merchants, where PayPoint.net retains credit risk on merchant 
default for credit card charge backs, mitigated by cash  
retention. In PayByPhone, exposure is limited to receivables from 
parking authorities.
National Lottery Commission
On 2 March 2011, following a lengthy process, the National 
Lottery Commission refused consent for Camelot’s application 
to provide ancillary services, including bill payment and mobile 
top-ups, on competition law grounds. 
Outlook
For the current financial year, trading is in line with the 
company’s expectations. Our established business streams (UK 
and Irish retail network and internet payments) are strong, 
with further opportunities to enhance retail yield, through 
the introduction of new technology and services. In addition, 
improvements in our service offering to online merchants will 
provide opportunities for growth. We will benefit from rolling 
out services in our developing business streams (Collect+, 
PayByPhone and Romanian retail network), growing our market 
share and improving profitability. Together, our businesses 
provide a solid foundation to deliver value for our shareholders.
26 May 2011 12 PayPoint plc annual report 2011
RISKS
PayPoint’s business, financial condition or operations could be materially and adversely affected by the risks summarised below. 
Although management takes steps to mitigate risks where possible or where the cost of doing so is reasonable in relation to the 
probability and seriousness of the risk, it may not be possible to avoid the crystallisation of some or all of such risks. The group’s risk 
management policies and procedures are also discussed in the governance statement on page 18.
Risk area Potential impact Mitigation strategies
Loss or inappropriate usage of 
data
The group’s business requires the appropriate 
and secure use of consumer and other sensitive 
information. Mobile telephone and internet-based 
electronic commerce requires the secure transmission 
of confidential information over public networks, 
and several of our products are accessed through 
the internet. Security breaches in connection with 
maintaining data and the delivery of our products 
and services could harm our reputation, business and 
operating results.
The group has established rigorous information 
security policies, standards, procedures and 
recruitment and training schemes, which are 
embedded throughout its business operations. 
The group also screens new employees carefully. 
Continued investments are made in IT security 
infrastructure, including the significant use of data 
and communications encryption technology.
Dependence upon third parties 
to provide data and certain 
operational services
The group’s business model is dependent upon 
third parties to provide operational services, the 
loss of which could significantly impact the quality 
of our services. Similarly, if one of our outsource 
providers, including third parties with whom we have 
strategic relationships, were to experience financial 
or operational difficulties, their services to us would 
suffer or they may no longer be able to provide 
services to us at all, significantly impacting delivery of 
our products or services.
The group selects and negotiates agreements with 
strategic suppliers based on criteria such as  
delivery assurance and reliability.  Single points 
of failure are avoided, where practicable and 
economically feasible.
Exposure to legislation or 
regulatory reforms and risk of 
non-compliance
The group is largely unregulated by financial services 
regulators. The group’s agents which offer money 
transfer are licensed as Money Service Businesses by 
HMRC. Our internet and mobile phone distribution 
channels are subject to Payment Card Industry 
Data Security Standards regulated by the card 
schemes. Regulatory reform could increase the 
cost of the group’s operations or deny access to 
certain territories in the provision of certain services.  
Non-compliance with law, regulation, privacy 
or information security laws could have serious 
implications in cost and reputational damage to  
the group.
The group’s legal department works closely with 
senior management to adopt strategies to educate 
lawmakers, regulators, consumer and privacy 
advocates, and other stakeholders to support the 
public policy debate, where appropriate to ensure 
regulation does not have unintended consequences 
over the group’s services. The group has in place 
a business ethics policy which requires compliance 
with local legislation in all the territories in 
which the group operates.  A central compliance 
department co-ordinates all compliance monitoring 
and reporting. Managing and finance directors are 
required to sign annual compliance statements.
Interruptions in business 
processes or systems
The group’s ability to provide reliable services 
largely depends on the efficient and uninterrupted 
operation of our computer network systems, data 
and call centres, as well as maintaining sufficient 
staffing levels. System or network interruptions, 
or the unavailability of key staff or management 
resulting from a pandemic outbreak, could delay  
and disrupt our ability to develop, deliver or maintain 
our products and services, causing harm to our 
business and reputation and resulting in loss of 
customers or revenue.
Comprehensive business continuity plans and 
incident management programmes are maintained 
to minimise business and operational disruptions, 
including pandemic incidents. The group maintains 
full duplication of all information contained in 
databases and runs back-up data centres. Support 
arrangements have been established with third party 
vendors and there are strict standards, procedures 
and training schemes for business continuity. 
Dependence on recruitment 
and retention of highly skilled 
personnel
The ability of the group to meet the demands of the 
market and compete effectively is, to a large extent, 
dependent on the skills, experience and performance 
of its personnel. Demand is high for individuals with 
appropriate knowledge and experience in payments,  
IT and support services. The inability to attract, 
motivate or retain key talent could have a serious 
consequence on the group’s ability to service client 
commitments and grow our business. 
Effective recruitment programmes are ongoing across 
all business areas, as well as personal and career 
development initiatives. Executive management 
review talent potential regularly. Compensation 
and benefits programmes are competitive and also 
reviewed regularly. PayPoint plc annual report 2011 13
RISKS continued
Risk area Potential impact Mitigation strategies
Exposure to materially adverse 
litigation
The group contracts with a number of large service 
organisations for which it provides services essential 
to their customers.  Failure to perform in accordance 
with contractual terms could give rise to litigation.
The group seeks to limit exposure in its contracts.  
Mitigating actions are taken where contractual 
exposures are above the norm, including  
insurance coverage, where appropriate and 
economically sustainable.
Exposure to country and 
regional risk (political, financial,  
economic, social) in North 
America, United Kingdom, 
Romania, France and Ireland
The group’s geographic footprint subjects its 
businesses to economic, political and other risks 
associated with international sales and operations. 
A variety of factors, including changes in a specific 
country’s or region’s political, economic or regulatory 
requirements, as well as the potential for geopolitical 
turmoil, including terrorism and war, could result 
in loss of services, prevent our ability to respond to 
agreed service levels or fulfil other obligations. These 
risks are generally outside the control of the group.
The group’s portfolio is diversified by geography, by 
product, by sector and by client in order to protect 
itself against many of these fluctuations, especially 
those that are restricted to individual territories and 
market sectors, although the bulk of its operations 
and revenues are UK based.
Exposure to consolidation 
among clients and markets
Consolidation of retailers and clients could result 
in reductions in the group’s revenue and profits 
through price compression from combined service 
agreements or through a reduced number of clients.
No single client accounts for more than 9% of the 
group’s net revenue, and no single retailer accounts 
for more than 8% of the group’s net revenue, which 
reduces the probability of this potential risk having 
a significant impact on the group’s business. In 
addition, the group’s continued expansion should 
reduce the concentration further.
Acquisitions may not meet 
expectations
The group’s acquisitions, strategic alliances and joint 
ventures may result in financial outcomes that are 
different than expected.
The group assesses all acquisitions rigorously, using 
both in-house experts and professional advisers. 
In addition, the group conducts extensive post-
acquisition reviews to ensure, as far as possible, that 
performance remains consistent with the acquisition 
business plan.
Exposure to the unpredictability 
of financial markets (foreign 
exchange, interest rate and 
other financial risks)
As the group operates on an international basis, it is 
exposed to the risk of currency fluctuations and the 
unpredictability of financial markets in which  
it operates.
The group’s financial risk management focuses on 
the unpredictability of financial markets and seeks to 
minimise potentially adverse effects on the group’s 
financial performance.
Exposure to increasing 
competition
The group operates in a number of geographic, 
product and service markets that are highly 
competitive and subject to technological 
developments. Competitors may develop products 
and services that are superior to ours or that achieve 
greater market acceptance than our products and 
services, which could result in the loss of clients or 
reduction in revenue. 
The group is committed to continued research and 
investment in new data sources, people, technology 
and products to support its strategic plan.
Loss or infringement of 
intellectual property rights
The group’s success depends, in part, upon 
proprietary technology and related intellectual 
property rights. Some protection can be achieved 
but in many cases, little protection can be secured. 
Third parties may claim that the group is infringing 
their intellectual property rights or our intellectual 
property rights could be infringed by third parties. If 
we do not enforce the group’s intellectual property 
rights successfully, our competitive position may 
suffer, which could harm our operating results.
The group, where appropriate and feasible, relies 
upon a combination of patent, copyright,  
trademark and trade secret laws, as well as various 
contractual restrictions, to protect our proprietary 
technology and continues to monitor this situation. 
The group also vigorously defends all third party 
infringement claims.
Data centre security breaches The group is highly dependent on information 
technology networks and systems to process, 
transmit and store electronic information. Security 
breaches of our data centres could create system 
disruptions, shutdowns or unauthorised disclosure  
of confidential information.
The group’s data centres are protected against 
physical break-ins. The group has strict standards 
and procedures for security. 14 PayPoint plc annual report 2011
CORPORATE SOCIAL RESPONSIBILITY
PayPoint is committed to dealing fairly and with a high level of integrity with all its stakeholders, including clients, retailers, 
merchants, consumers, local communities and shareholders. We comply with statutory obligations in all areas and subject our 
practices to high levels of scrutiny through regular compliance audits. We publish results twice each year and provide two interim 
management statements, complying with reporting and disclosure obligations. The corporate social responsibility report sets out our 
approach and the way we measure our success in dealing with each group of stakeholders.
Clients and 
merchants
Retailers and 
consumers
Local communities Shareholders
Information 
on 
stakeholders
Over 6,000 clients and 
merchants in six countries.
Almost 35,000 retailers in 
three countries and 
provide a service to 
millions of consumers.
Where our employees 
live and work.
584 shareholders at  
27 March 2011.
Impact Provision of convenient 
services for consumer 
payments.
To provide a stable and 
reliable service and 
generate consumer 
footfall for retailers.
Financial support to 
local charities.
Maximise shareholder 
return.
Engagement Provision of a high 
standard of service to 
our clients and open 
communication. Client 
contracts contain service 
level agreements, which 
are set to a high standard. 
Specific performance 
is measured for key 
elements, including 
system availability and  
file delivery. 
We seek to provide 
an unparalleled 
service to our retailers  
and consumers.
Staff are encouraged to 
nominate local charities 
and fund raising events. 
PayPoint has adopted a 
charitable giving policy 
which supports the local 
communities in which its 
employees live and work 
by matching funds raised 
by employees, subject to 
certain limits.
PayPoint focuses 
on maximising 
economic value.
How we 
interact and 
support the 
stakeholders
Communication -  
major clients have 
regular review meetings 
with dedicated  
sector managers.
In the UK, terminal 
availability is over 99% 
and when a terminal 
needs to be replaced, it is 
achieved within four hours 
across the UK in 97% 
of cases. The breadth 
of products offered by 
PayPoint is greater than 
any other network. 
An annual retailer 
survey is carried out to 
understand how we can 
improve our service. We 
also invite retailers to 
attend an annual forum to 
discuss new products and 
obtain retailer feedback.
Major multiple retailers 
have regular review 
meetings with dedicated 
account managers.
During the year, PayPoint 
donated £19,400 to local 
and national charities, 
which was supplemented 
by employees who also 
donate to some of these 
charities through various 
schemes. 
We offer our network to 
collect for certain charities 
free of charge, including 
BBC Children in Need and 
the Disasters Emergency 
Committee (DEC).
Shareholders are 
invited to attend the 
annual general 
meeting and major 
shareholders are visited 
twice a year to discuss the 
group’s results. PayPoint plc annual report 2011 15
Environment 
PayPoint’s main impact on the environment stems from our use 
of resources to run offices in the UK, Ireland, Romania, Canada 
and France and our communications with our retailers. 
We measure our carbon footprint in accordance with Green 
House Gas (GHG) protocol. This allows us to monitor, by region, 
our carbon footprint and implement, where practical, targets to 
reduce our carbon footprint.
The two primary sources of PayPoint’s carbon emissions are 
business travel and energy consumption. We visit existing and 
prospective retailers in the UK, Ireland and Romania and we aim 
to reduce unnecessary travel. Routes are pre-planned to ensure 
efficiency where possible. Energy consumption arises from our 
offices in the UK, Romania and Canada. Last year, we installed 
additional energy efficient air conditioning units for our data 
centre in Welwyn, which is also our largest operations base and 
houses over 80% of our UK staff. 
We recycle wherever possible, including paper, cans, plastic 
cups, cardboard, toners and print cartridges. We also recycle 
computer equipment. This has resulted in an increase of recycled 
waste to 45% of all waste generated (2010: 42%).
CO
2
 Tonnes
Consumption
measure per 
employee
Year
ended 
27 March
2011
Year
ended 
28 March
2010
1
Year
ended 
27 March
2011
Year
ended 
28 March
2010
1
Business 
travel 965 1,432 6,097km 10,882km
Energy 
purchased 1,256 1,089 4,756kwh 5,490kwh
Water 
consumed 1 1 8.84m 8.92m
Waste 7 6
Total 2,229 2,528
Year
ended 
27 March
2011
Tonnes
Year
ended 
28 March
2010
1
Tonnes Change %
Waste
Landfill 15.4 13.0 18.5
Recycled 12.5 9.3              34.4
Total 27.9 22.3 25.1
% recycled 44.8% 41.7% 3.1 ppts
Employees
PayPoint employed, on average, 549 members of staff during 
the year. We operate an equal opportunities policy. PayPoint’s 
culture is one of openness, honesty and accountability and we 
recognise that all employees play a part in delivering the  
group’s performance.
PayPoint seeks to improve its employees’ working environment. 
Employees are invited to participate in two staff meetings a 
year where the directors present the performance of the group. 
At our head office, management presents twice a year on key 
points of topical interest and functional meetings take place 
throughout the year at our various offices.  In the UK, the Chief 
Executive invites staff twice a year to an informal forum where 
they are able to discuss topics of their choice. PayPoint believes 
that keeping its employees informed of new developments 
and products as well as the financial performance of the group 
motivates the employees and helps them understand the 
group’s progress towards its goals and objectives.
PayPoint’s employment policies are designed to attract, 
retain and motivate the best people. All staff are given two 
appraisals per annum, which cover performance management, 
employee development, training and succession planning where 
applicable. Training is undertaken locally and all employees are 
given equal opportunities to develop their experience and  
their careers.
Employees in the UK, Ireland and Romania are asked annually to 
complete an anonymous employee engagement survey which 
covers a wide range of subjects, including health and safety, 
work environment, training, reward and recognition and staff 
behaviour. 82% of employees completed the survey in the last 
year. This survey is used to agree with employees the actions 
necessary for improvement. 
PayPoint has the following policies in place:
equal opportunities - we treat job applicants, employees 
and temporary staff equally, regardless of their sex, sexual 
orientation, age, race, ethnic origin or disability. It is also the 
group’s policy to retain employees who may become disabled 
while in service and provide appropriate training as necessary;
whistle-blowing - we are committed to ensuring that 
malpractice is prevented and immediately dealt with, should it 
arise. We encourage employees to raise their concerns about 
any malpractice promptly and we have an established procedure 
for raising any such concerns;
health and safety - we recognise that effective health and 
safety management is fundamental to running a successful 
business. We are committed to operating high standards, 
designed to minimise the risk of injuries and ill health to 
employees, contractors, visitors and others who come into 
contact with the business, so far as is reasonably practicable;
disciplinary and grievance procedures - we provide a fair 
and consistent method of dealing with disciplinary problems 
and treat misconduct with appropriate action. We ensure that 
we treat any grievance an employee may have relating to their 
employment in a fair and reasonable manner;
CORPORATE SOCIAL RESPONSIBILITY continued
1. For the year ended 28 March 2010, the numbers exclude PayByPhone as it was 
only acquired 19 days before the end of the year. 16 PayPoint plc annual report 2011
bullying and harassment - we promote a working 
environment free of harassment and individuals who believe 
that they are being subjected to any form of harassment are 
encouraged to come forward to have the issue resolved; 
business ethics - we set out clear standards for ethical 
relationships and conduct to be maintained by employees and 
sub-contractors and conduct our business in accordance with 
the highest ethical standards. We do not offer or accept any 
bribes; and
training and development - all employees meet twice a 
year with their line manager to discuss performance and 
any development needs. Training is provided either in-house 
or externally. We also sponsor employees through further 
professional and technical qualifications. We promote internally, 
where appropriate.
PayPoint’s employees
UK Rest of the World
2
Year 
ended 
27 March 
2011
Year
 ended 
28 March 
2010
Year 
ended 
27 March 
2011
Year
 ended 
28 March 
2010
General
Average 
number of staff 
employed during 
the year 390 326 159 167
Average length 
of service 4 years 4 years 3 years 1 year
Average staff 
turnover during 
year 25% 20% 35% 49%
Sickness absence 
rate 1.6% 2.4% 1.0% 1.4%
% working part-
time 20% 15% 2% 2%
Women
1
Number 
of women 
employed 185 170 50 55
% of women 
employed 47% 44% 30% 33%
% of 
management 
grades 14% 8% 12% 5%
Ethnic 
minorities
1
% of all 
employees 18% 11% 9% 7%
% of 
management 
grades 3% 1% 2% 1%
Disabled 
employees
1
% of all 
employees 1% 2% 1% 0%
Age profile
1
 
employees      
under 25 36 52 20 18
employees           
25 to 29 81 68 35 47
employees           
30 to 49 209 206 96 87
employees           
50 and over 64 61 8 3
1. Numbers based on employees employed at the end of the relevant year.
2. Rest of the world includes Ireland, Romania, Canada and France.
CORPORATE SOCIAL RESPONSIBILITY continued The directors recognise the importance of sound corporate 
governance, whilst taking into account the size and nature 
of the company. The company has fully complied with the 
provisions set out in Section 1 of the Financial Reporting 
Council’s Combined Code on Corporate Governance (the 
Combined Code) for the year ended 27 March 2011, a  
copy of which can be found at 
www.frc.org.uk/corporate/combinedcode.cfm.
This statement describes how the principles of corporate 
governance in the Combined Code are applied by the company.
The board
The board comprises nine directors: David Newlands, the non-
executive Chairman, three executive directors, Dominic Taylor, 
George Earle and Tim Watkin-Rees, and five non-executive 
directors, Eric Anstee, David Morrison, Andrew Robb, Stephen 
Rowley and Nick Wiles. Roger Wood retired as a non-executive 
director of the company on 7 July 2010.
The board considers that David Newlands, Eric Anstee,  
Andrew Robb, Stephen Rowley and Nick Wiles are independent 
for the purposes of the Combined Code. Given the size of the 
company and its ownership structure, the board has  
concluded that the proportion of independent non-executive 
directors is appropriate.
All the non-executive directors bring considerable knowledge 
and experience to board deliberations. Non-executive directors 
do not participate in any of the company’s share schemes or 
bonus schemes and their service is non-pensionable. 
Biographical details of each of the current serving directors are 
set out on page 19 and include details of the Chairman’s other 
significant commitments. Procedures exist to allow the directors 
to seek independent professional advice in respect of their 
duties at the company’s expense where the circumstances are 
appropriate. All directors have access to the Company Secretary.
The terms and conditions of appointment of the non-executive 
directors and the executive directors’ service contracts are 
available for inspection at the company’s registered office 
during normal business hours and will be available at the annual 
general meeting.
The Chairman, David Newlands, chairs board meetings and 
regularly consults with the executive directors regarding ongoing 
business. His other significant commitments are disclosed 
in his biography on page 19.   The board considers that 
these commitments do not hinder his ability to discharge his 
responsibilities to the company and its subsidiaries (the  
group) effectively.
The directors believe it is essential for the company to be led 
and controlled by an effective board which monitors progress 
through monthly reports and management accounts. The board 
has a schedule of matters reserved for its approval. The most 
significant of these are the approval of:
•	 corporate strategy of the group and the annual operating 
and capital expenditure budgets;
•	 the appointment of the Chief Executive, other directors and 
the Company Secretary;
•	 major capital investments;
•	 annual and half yearly financial statements;
•	 interim management statements; and 
•	 acquisitions and disposals.
GOVERNANCE
The board met eight times during the year and all members 
were in attendance. Where a director is unable to attend, he 
provides input through discussion with the Chairman in advance 
of the meeting.
A formal performance evaluation of the board, its committees 
and individual directors took place during the year. The 
performance of individual executive directors is appraised 
annually by the Chief Executive, to whom they report. The 
performance of the Chairman is reviewed by the non-executive 
directors, led by Andrew Robb, Senior Independent Director, 
taking into account the views of the executive directors.
The performance review of the Chief Executive is conducted 
by the non-executive Chairman, taking into account the views 
of other directors. Non-executive directors’ performance is 
reviewed by the non-executive Chairman, taking into account 
the views of other directors.
The performance evaluation confirmed that the members of 
the board were satisfied with the board’s overall performance 
and there were no material changes recommended.  In addition 
to the evaluation of board members, the various committees 
carried out self-assessments to assess whether their terms 
of reference had been satisfactorily fulfilled and how their 
processes could be improved.
In light of recent changes in the corporate governance 
landscape and, in particular, the publication by the FRC of the 
UK Corporate Governance Code 2010, the board has taken the 
view that all directors should be subject to annual re-election 
by shareholders. Every member of the board will therefore 
offer himself for re-election at the 2011 AGM. The board’s 
recommendations in respect of the re-election of each director 
can be found in the notice of meeting on pages 49 to 53.
Committees of the board
The following formally constituted committees deal with specific 
aspects of the group’s affairs in accordance with the duties and 
responsibilities formally delegated to them by the board. The 
terms of reference for each of the committees are available on 
the company’s website at www.paypoint.com.
Audit committee
The audit committee comprises Eric Anstee, Andrew Robb, 
Stephen Rowley and Nick Wiles. The board considers Eric 
Anstee, who is Chairman of the audit committee, to have 
recent and relevant financial experience in accordance with the 
Combined Code. It met five times during the year. All members 
were in attendance with the exception of Eric Anstee, who was 
unable to attend one of the meetings. On that occasion, it was 
chaired by Andrew Robb. 
The audit committee is primarily responsible for monitoring that 
the financial performance of the group is properly measured 
and reported and appropriate financial control systems and 
procedures are in place. During the year, the committee: 
reviewed reports from the auditor relating to the group’s 
accounting and internal controls; advised the board on the 
appointment, performance, independence and objectivity of 
the auditor and the internal auditor; reviewed the effectiveness 
of the group’s systems of internal control, including fraud 
prevention; reviewed the appropriateness of the internal audit 
programme and the reports of the internal auditors. 
PayPoint plc annual report 2011 17 The committee considered the level of non-audit fees for 
services provided by the auditor in order to satisfy itself that the 
auditor’s independence is safeguarded. The group has a policy 
which prohibits the auditor providing certain services which 
might impair its independence. The policy also prescribes that 
any non-audit services to be performed by the auditor in any 
one year (excluding tax) are to be provisionally capped at an 
aggregate total equivalent to the level of the annual audit fee. 
Any proposal to use the auditor for non-audit services exceeding 
this will be subject to the prior approval of the audit committee. 
Details of the remuneration paid to the auditor for the statutory 
audit and non-audit services are set out in note 5. 
The audit committee regularly meets the external auditor 
without the executive directors being present and procedures 
are in place which allows access at any time of both external 
and internal auditor to the audit committee. The Chairman of 
the committee reports the outcome of each meeting to the 
board, which is provided with the minutes of all meetings.
Remuneration committee
The role, composition and activities of the remuneration 
committee and details of how the company applies the 
principles of the Combined Code in respect of directors’ 
remuneration are set out in the remuneration committee report 
on pages 22 to 27.
Nomination committee
The nomination committee comprises Eric Anstee, Andrew 
Robb, Stephen Rowley, David Morrison, Nick Wiles and David 
Newlands, who is its Chairman. It met twice during the year and 
all members were in attendance. 
The nomination committee is responsible for considering and 
making recommendations on the appointment of additional 
directors, the retirement of existing directors and for reviewing 
the size, structure and composition of the board and 
membership of board committees. 
Conflicts of interest
A register of conflicts is maintained and is reviewed at least 
annually to ensure all details are kept up to date. Authorisation 
is sought prior to the appointment of any new director or if any 
new conflicts arise.
Risk management and internal control 
The directors are responsible for establishing and maintaining 
the group’s system of internal control, and for regularly 
reviewing its effectiveness. Procedures have been designed 
to meet the particular needs of the group and its risks, 
safeguarding shareholders’ investments and the company’s 
assets. Such a system is designed to manage, rather than 
eliminate, the risk of failure to achieve business objectives and 
can only provide reasonable and not absolute assurance against 
material misstatement or loss. There is an ongoing process of 
identifying, evaluating and managing the significant risks faced 
by the group. 
All procedures necessary to comply with Internal Control: 
Guidance for directors on the Combined Code have been in 
place throughout the year under review and up to the date of 
GOVERNANCE continued
approval of the annual report and financial statements. The 
directors have conducted a formal review of the effectiveness 
of the group’s system of internal control during the year. No 
significant failings or weaknesses were identified during the 
review; however, had there been, the board confirms that 
necessary actions would have been taken to remedy them. 
The operational management of the group is delegated to 
senior managers who are appointed by the Chief Executive. The 
responsibilities of the senior management group include the 
regular review of the main business risks to the group.
The group has prepared a detailed risk register which includes 
analysis of all the main operational risks covering all parts of 
the group’s business activities including financial risks. The 
group evaluates and prioritises the identified key operational 
risks. In order to ensure that this process is managed effectively, 
members of the senior management group are asked to 
confirm in writing on each risk area that the potential threats in 
each area have been properly identified and recorded and the 
appropriate action taken. This process has been fully  
embedded into the operations of the business. The audit 
committee has received regular updates on the ongoing 
risk management, control systems and processes which are 
discussed at their meetings.
KPMG is the internal auditor and conducts a rigorous three year 
internal audit programme covering all the group’s key business 
areas. The audit committee approved the current programme 
in 2008 and each year the programme is reviewed to ensure 
that account is taken, where necessary, of any change. In 
addition, independent audits are conducted for assessment: 
of compliance with ISO/IEC 27001:2005 (information security 
management), which takes place twice annually; by LINK 
auditors, on an annual basis, which assesses control over LINK 
related ATM systems; by independent assessors for Payment 
Card Industry Data Security Standard compliance; and audits by 
our clients from time to time.
Shareholder relations
The directors consider that the annual report and accounts 
play an important role in providing shareholders with an 
evaluation of the company’s position and prospects. The board 
aims to achieve clear reporting of financial performance to all 
shareholders. The board acknowledges the importance of an 
open dialogue with its institutional shareholders and welcomes 
the interest of private investors.
We believe that, in addition to the annual report and the 
company’s website, the annual general meeting is an ideal 
forum at which to communicate with investors, and the board 
encourages their participation. The Senior Independent Director 
is available to address any unresolved shareholder concerns.
The company held briefings with institutional fund managers, 
analysts and other investors following the announcement of half 
yearly results and feedback from these has been reported to the 
board. Meetings have been held at other times during the year 
when appropriate.
18 PayPoint plc annual report 2011 BOARD OF DIRECTORS
David Newlands, non-executive Chairman (aged 64), 
appointed 4 August 1998
David has been Chairman of PayPoint since 1998. He was 
previously Finance Director of The General Electric Company, 
plc (GEC), non-executive Chairman of Britax International plc, 
deputy Chairman of The Standard Life Assurance Company 
plc, non-executive Chairman of Tomkins plc and is currently 
Chairman of Kesa Electricals plc, and a non-executive director of 
a number of other companies.
Dominic Taylor, Chief Executive (aged 52), appointed
4 August 1998
Dominic joined PayPoint in 1997 as Retail Director and was 
appointed to his current role in August 1998. He was a Royal 
Naval officer for 12 years, following which he completed an 
MBA at the Cranfield School of Management. In 1991, Dominic 
joined the Vodafone Group where he led a number of initiatives 
including the development of its SMS service and a bid for the 
National Lottery, before becoming Sales and Marketing Director 
for the indirect sales of mobile phones to retailers. In 1996, 
Dominic joined Granada plc as a director of Granada Technology 
Group and Managing Director of Granada Business Technology, 
supplying film and telecommunications products into the hotel 
and leisure sectors.
George Earle, ACA, Finance Director (aged 57), appointed 
20 September 2004
George joined PayPoint in September 2004 and is responsible 
for the financial affairs of the group. George qualified as a 
chartered accountant with Touche Ross & Co (now Deloitte LLP) 
in 1979, where he served in the corporate finance and audit 
groups, becoming a partner in 1984. In 1987, George moved 
to Saatchi & Saatchi plc, serving as Deputy Finance Director. 
George subsequently moved to GEC in 1989, where, until 2001, 
he fulfilled the role of Financial Services Director. George left 
Marconi (formerly GEC) in 2001 to work as Group Director, 
Chief Executive’s Office at Centrica plc, and in 2003 was 
appointed as Director of Financial Control.
Tim Watkin-Rees, Business Development Director (aged 
48), appointed 22 September 1998
Tim was the founder Sales and Marketing Director of PayPoint 
in 1996. Since 2000, he has been responsible for strategic 
business development. Prior to PayPoint, he was a specialist in 
retail banking and payment systems, starting with Lloyds Bank 
in 1984, then as a Senior Consultant with KPMG Management 
Consultants in 1988 and Head of Business Planning and Director 
of Consulting with Nexus (later Sligos and now Atos Origin) 
from 1989. He is an Associate of the Chartered Institute of 
Bankers.
David Morrison, non-executive director (aged 52), 
appointed 12 January 1999
David has been Chief Executive of Prospect Investment 
Management since 1999, when he started the company. He 
became a director of PayPoint in 1999 following an investment 
in the company by clients of Prospect. Prior to establishing 
Prospect, he had worked in the venture capital sector with 3i, 
Abingworth Management and Botts & Company. He is  
currently a non-executive director of Record plc and several 
private companies.
Andrew Robb, non-executive director (aged 68), 
appointed 18 August 2004
Andrew worked for P&O Steam Navigation Co. from 1971 to 
1989, initially as Financial Controller and, from 1983, as Group 
Finance Director. From 1989 to 2001 he was Group Finance 
Director of Pilkington plc and remained an Executive Director 
until 2003. Andrew is a Fellow of the Chartered Institute of Cost 
and Management Accountants and is currently a non-executive  
director and Chairman of the audit committee of Kesa Electricals  
plc and Laird plc. He is also a non-executive director of Tata Steel 
Limited, a company quoted in India.
Eric Anstee, non-executive director (aged 60), appointed 
16 September 2008
Eric Anstee is currently Chief Executive of City of London 
Group plc, a non-executive director of The Financial Reporting 
Council and Insight Asset Management. He is also a member 
of the Takeover Panel appeals board. His former non-executive 
appointments include: Chairman of Mansell plc, non-executive 
director of SSL International, Garland Appeal and Severn Trent, 
where he was Chairman of the treasury and audit committees. 
His former executive appointments include Chief Executive 
Officer of the Institute of Chartered Accountants in England and 
Wales, Chief Executive at Old Mutual Financial Services, Group 
Finance Director at Old Mutual plc and Finance Director of The 
Energy Group plc. 
 
Stephen Rowley, non-executive director (aged 52), 
appointed 16 September 2008
Stephen Rowley is currently Chief Executive of Torex and was 
formerly CEO of Anite plc, Senior Vice President and General 
Manager of PeopleSoft Europe and Senior Vice President 
Corporate Business Development for 3Com Corporation, where 
he also held a variety of other positions.
Nick Wiles, non-executive director (aged 49), appointed 
22 October 2009
Nick Wiles is currently Chairman of UK investment banking at 
Nomura. He has worked in banking for more than 20 years, 
with the majority of this time at Cazenove & Co, where he was 
a partner prior to incorporation. He is a non-executive director 
of Strutt & Parker.
PayPoint plc annual report 2011 19 DIRECTORS’ REPORT
The directors present their annual report on the affairs of 
the company and of the group, together with the financial 
statements and independent auditor’s report, for the year ended 
27 March 2011.
The Chairman’s statement, Chief Executive’s review, operating 
and financial review and corporate governance statement form 
part of this directors’ report.
Principal activity
The company is a holding company and its subsidiaries are 
engaged in providing clients with specialist consumer payment 
transaction processing and settlement. 
PayPoint processes transactions and collects payments on behalf 
of the UK and Ireland’s leading utility and customer service 
organisations, and there are 23,500 convenience retail outlets 
using PayPoint’s terminals. On average, 10 million consumer 
transactions are processed weekly by PayPoint. At a PayPoint 
outlet, consumers are provided with a one stop shop for making 
cash payments for the wide range of PayPoint’s clients. In 
addition, PayPoint provides other services to retail outlets.
PayPoint.net provides secure credit and debit card payments 
services for web merchants. 
PayPoint Romania provides electronic mobile top-ups and 
scratch cards and a bill payment service to consumers.
PayByPhone allows consumers to pay for their car parking by 
credit or debit card from their mobile phones.
Substantial shareholdings
On 26 May 2011, the company had been notified of the 
following disclosable interests in the voting rights of the 
company as required by provision 5.1.2 of the FSA Disclosure 
and Transparency Rules:
Name of holder 
No. of 
ordinary 
shares 
Percentage 
of issued 
capital 
Invesco Limited 19,787,305 29.20%
Troy Asset Management (UK) 8,109,008 11.97%
Lansdowne Partners Limited (UK) 6,244,603 9.22%
RIT Capital Partners plc 6,121,057 9.03%
Legal & General Investment 
Management Limited (UK) 4,156,653 6.13%
T. Rowe Price Associates Inc. (US) 2,500,000 3.69%
As at the date of this report, 67,799,752 ordinary shares of 1/3p 
each have been issued and fully paid up and are quoted on the 
London Stock Exchange. During the year ended 27 March 2011, 
41,500 ordinary shares were issued under the company’s share 
schemes. The rights and obligations attaching to the company’s 
ordinary shares, as well as the powers of the company’s directors 
are set out in the company’s articles of association, copies of 
which can be obtained from Companies House or by writing to 
the Company Secretary.
There were no restrictions on the voting rights attaching to the 
ordinary shares or on the transfer of securities in the company. 
No person holds securities in the company carrying special 
rights with regard to control of the company. The company is 
not aware of any agreements between holders of securities 
that may result in restrictions on the transfer of securities or on 
voting rights. Unless expressly specified to the contrary in the 
articles of association of the company, the company’s articles 
of association may be amended by a special resolution of the 
company’s shareholders.
At the annual general meeting on 7 July 2010, the directors 
were given authority to purchase 14.99% of its issued share 
capital, allot relevant securities up to an aggregate nominal 
amount of £75,287 and to disapply pre-emption rights in 
respect of allotments of relevant securities up to an aggregate 
nominal amount of £11,293. Resolutions to renew these 
authorities will be proposed at the 2011 annual general 
meeting, details of which are set out in the notice of meeting on 
pages 49 to 53.
The company’s authorised and issued share capital as at  
27 March 2011, together with details of purchases of own 
shares during the year, are set out in note 25.
Directors
The names of the directors at the date of this report and their 
biographical details are given on page 19 and their interests in 
the ordinary shares of the company are given on page 27. 
Results for the year
The consolidated income statement, balance sheet and cash 
flow statement for the year ended 27 March 2011 are set 
out on pages 30 to 32. The business review of the group for 
the year ended 27 March 2011, which complies with the 
Accounting Standards Board’s 2006 Statement on Operating 
and Financial Reviews, including an analysis of the group’s key 
performance indicators and financing and treasury policy, is set 
out on pages 7 to 11 and forms part of the directors’ report. 
An analysis of risk is set out on pages 12 to 13 and of risk 
management on page 18. The balance sheet and cash flow 
statement of the holding company for the year ended 27 March 
2011 are set out on pages 33 and 34. Since the year ended 27 
March 2011, there have been no material events likely to impact 
the future development of the company.
Qualifying third party indemnity provisions for 
the benefits of directors
Under sections 236 (1) (a) and (b) of the Companies Act 2006, 
companies are obliged to disclose any indemnities which are 
in force in favour of their directors. The current articles of 
association of the company contain an indemnity in favour 
of the directors of the company which indemnifies them in 
respect of certain liabilities and costs that they might incur 
in the execution of duties as directors. Copies of the articles 
of association can be obtained from Companies House or by 
writing to the Company Secretary and will be available at the 
venue of the annual general meeting from 15 minutes before 
the meeting until it ends.
20 PayPoint plc annual report 2011 Change of control
All of the company’s share schemes contain provisions relating 
to a change of control. Outstanding options and awards would 
normally vest and become exercisable on a change of control, 
subject to the satisfaction of any performance conditions at  
that time.
At the year end, the company had a revolving term credit facility 
for £35 million with a remaining term of less than one year. 
The terms of the facility allowed for termination on a change 
of control, subject to certain conditions. A new facility for 
£35 million with a term of five years has a similar provision for 
termination on change of control. There are no other significant 
contracts in place that would take effect, alter or terminate on 
the change of control of the company, including compensation 
for loss of office as a result of a takeover bid.
Suppliers’ payment policy
Terms of payment are agreed with individual suppliers prior 
to supply. The group aims to pay its creditors promptly, in 
accordance with terms agreed for payment, provided the 
supplier has provided the goods or services in accordance with 
the agreed terms and conditions. The group had 28 days’ 
purchases outstanding at 27 March 2011 (2010: 24 days), based 
on the average daily amount invoiced by suppliers during the year.
Charitable and political donations
The group made no political donations during the year (2010: 
£nil). Details of the charitable donations policy can be found 
within the operating and financial review on page 11.
Employee matters and environmental issues
Employee matters and environmental issues are discussed in the 
corporate social responsibility report on pages 14 to 16.
Future developments
Future developments are discussed in the operating and financial 
review on pages 7 to 11.
Dividends
The directors recommend the payment of a final dividend 
of 15.6p (2010: 14.4p) per ordinary share amounting to 
£10,576,000 (2010: £9,756,000) to be paid on 22 July 2011 to 
members on the register on 24 June 2011. An interim dividend 
was declared and paid during the year of 7.8p per share (2010: 
7.4p per share) amounting to £5,276,000 (2010: £5,008,000).
Related party transactions
Related party transactions that took place during the year can be 
found in note 29.
Going concern 
At the end of the year, the group had cash of £26 million and 
had an unsecured loan facility of £35 million, expiring in August 
2011. A new replacement £35 million, five year facility has 
been agreed with our bankers since the year end. Cash and 
borrowing capacity is adequate to meet the foreseeable needs 
of the group, taking into account any risks (see pages 12 to 13). 
The directors are satisfied that the group has adequate resources 
to continue in operational existence for the foreseeable future, a 
period of not less than 12 months from the date of this report. 
Therefore, the financial statements have been prepared on a 
going concern basis.
The group’s liquidity and the current economic climate are 
reviewed on page 11 of the operating and financial review and 
details of derivatives and other financial instruments are shown 
in note 28.
Independent auditor
Deloitte LLP has expressed its willingness to continue as the 
company’s auditor and a resolution for its re-appointment will 
be proposed at the forthcoming annual general meeting.
Directors’ report
Pages 2 to 21, inclusive, of this annual report comprise a report 
of the directors that has been drawn up and presented in 
accordance with English company law and the liabilities of the 
directors in connection with that report shall be subject to the 
limitations and restrictions provided by such law. In particular, 
directors would be liable to the company (but not to any third 
party) if the directors’ report contains errors as a result of 
recklessness or knowing misstatement or dishonest concealment 
of a material fact, but would not otherwise be liable.
Statement as to disclosure of information  
to auditor
Each of the persons who is a director at the date of approval of 
this report confirms that:
1. so far as the director is aware, there is no relevant audit 
information of which the company’s auditor is unaware; and 
2. the director has taken all the steps that he ought to have 
taken as a director in order to make himself aware of any 
relevant audit information and to establish that the company’s 
auditor is aware of that information.
This confirmation is given and should be interpreted in 
accordance with the provisions of S.418 of the Companies  
Act 2006.
Annual general meeting
The annual general meeting will be held at the offices of  
J.P . Morgan Cazenove, 20 Moorgate, London, EC2R 6DA, on  
15 July 2011. The notice of meeting and explanatory 
information on the resolutions to be passed at the annual 
general meeting can be found on pages 49 to 53 of the  
annual report. 
Approved by the board of directors and signed on behalf of  
the board.
Susan Court
Company Secretary
26 May 2011
DIRECTORS’ REPORT continued
PayPoint plc annual report 2011 21 REMUNERATION COMMITTEE REPORT
Introduction
This report has been prepared in accordance with Schedule 
8 to the Accounting Regulations under the Companies Act 
2006. The report also meets the relevant requirements of the 
Listing Rules of the Financial Services Authority and describes 
how the board has applied the principles relating to directors’ 
remuneration in the Combined Code. As required by the Act, 
a resolution to approve the report will be proposed at the 
annual general meeting of the company at which the financial 
statements will be proposed for approval.
The Act requires the auditor to report to the company’s 
members on certain parts of the directors’ remuneration report 
and to state, whether in their opinion, those parts of the report 
have been properly prepared in accordance with the Accounting 
Regulations. The report has, therefore, been divided into 
separate sections for audited and unaudited information.
Unaudited information
Remuneration committee
The remuneration committee is responsible for developing policy 
on remuneration for executive directors and senior management 
and for determining specific remuneration packages for 
each of the executive directors. The committee members are 
all independent directors. Andrew Robb is Chairman of the 
committee, with Eric Anstee, Stephen Rowley and Nick Wiles 
acting as committee members.
The remuneration committee received wholly independent 
advice on executive compensation and incentives from Kepler 
Associates during the year. No other services were provided 
to the company by Kepler Associates during the year. The 
remuneration committee is formally constituted with written 
terms of reference which set out the full remit of the committee. 
A copy of the terms of reference is available to shareholders 
by writing to the Company Secretary whose contact details are 
set out on the inside back cover. The terms of reference are 
also available on the company’s website at www.paypoint.com. 
The remuneration committee met twice during the year and 
all members were in attendance except Eric Anstee who was 
absent from one of the meetings. 
Remuneration policy overview
The remuneration committee has adopted a remuneration  
policy so that total levels of compensation encourage and 
reward high performance and attract and retain individuals of 
the right calibre to ensure the company meets its objectives.  
It is the opinion of the remuneration committee that 
shareholders’ interests are best served by focusing a greater 
proportion of total potential remuneration on performance-
related compensation.
Short and long-term incentives are structured so as to align 
directors’ interests with those of shareholders by rewarding 
them for enhancing shareholder value. It should be noted 
that the real value received by the executive directors under 
the share incentive arrangements will be dependent upon the 
degree to which the associated performance conditions have 
been satisfied at the end of the three year performance period 
and the share price of the company at this time. This ensures 
that substantial rewards are only received when value has been 
created in the business.
The company’s comparator group for the purposes of 
benchmarking comparative total shareholder return (TSR) 
performance under the PayPoint Long-Term Incentive Plan (the 
LTIP) for awards granted to the end of the year under review 
was based on the FTSE 250 constituents (excluding investment 
trusts) at the date of the awards. 
Basic salary 
The remuneration committee’s policy is to set base salaries at 
median level. Salaries are reviewed annually. When determining 
the salary of the executive directors, the remuneration 
committee takes into consideration the levels of base salary for 
similar positions with comparable status, responsibility and skills, 
in organisations of broadly similar size and complexity. These 
factors are considered in parallel with the following:
•	 the performance of the individual executive director;
•	 the individual executive director’s experience and 
responsibilities; and
•	 pay and conditions throughout the company.
Annual performance-related bonus
The annual bonus plan for the year ended 27 March 2011 
provided for a maximum cash bonus of 75% of salary. Executive 
directors were also eligible to participate in the PayPoint plc 
Deferred Share Bonus Plan (DSB). Under the DSB, bonus 
recipients are subject to a 25% compulsory and maximum 
further 25% voluntary deferral rather than the previous 50% 
voluntary deferral limit. The deferred bonus will be utilised for 
the acquisition of shares (Bonus Shares), with the opportunity 
of an additional award of shares (Matching Shares) of an 
equivalent value to the gross bonus deferred (i.e. up to 37.5% 
of salary), which equates to a maximum bonus potential of 
112.5% of salary. 
 
The company’s bonus plan for the year ended 27 March 2011 
was based on the achievement of an economic profit (operating 
profit after tax and a charge for capital employed based on the 
company’s cost of capital) target. Based upon the actual results 
for the year, 80.9% of the maximum bonus is payable. 
The remuneration committee believes that the use of economic 
profit as the measure of performance for the annual bonus plan 
will encourage a focus on both profit and capital efficiency, 
which are key to driving shareholder value and which are 
implicit in the calculation of economic profit. 
The remuneration committee reviews and agrees targets at 
the beginning of each financial year and may subsequently 
adjust those targets as appropriate for investments and start up 
costs that are approved after the targets have been set. Bonus 
payments are not pensionable.
22 PayPoint plc annual report 2011  The results are set out below:
70% 
payment
threshold
for 95% 
of plan 
delivery
£000
80%
payment 
threshold for 
plan delivery
£000
100% 
payment
threshold 
for 110% of 
plan delivery
£000
Actual 
results
£000
Economic 
profit 16,468 17,335 19,069 17,413
The review conducted during the year showed that the executive 
directors’ bonus opportunity was below the company’s stated 
median policy. Accordingly, the remuneration committee decided 
to increase the maximum cash bonus opportunity from 75% to 
100% of salary for the current financial year.
Deferred Share Bonus Plan (DSB)
The current DSB plan was adopted at the 2009 annual 
general meeting to replace the previous plan that expired 
in September 2009. Under the plan, the committee has the 
discretion to operate the annual bonus and deferred plan by 
applying a greater or lower overall limit, taking into account the 
appropriate level of total compensation of executives of  
the company. 
Executive directors and senior managers of the company are 
able to participate in the DSB. As planned and reported last year, 
the maximum individual limit under the DSB has been increased 
for the next financial year such that the maximum value of cash 
bonus, Bonus Shares and Matching Shares in any bonus year 
may now exceed 100% of a participant’s salary but remains 
within the remuneration committee’s 150% overall limit for 
participation from 2011 onwards.
The release of Matching Shares is subject to:
•	 minimum earnings per share growth of the company of  
RPI + 3% p.a. over a three year period; and
•	 the participant still being employed by the company at the 
end of the three year deferral period from the award date.
If a participant disposes of any of the Bonus Shares during 
the three year deferral period, a corresponding proportion of 
Matching Shares will be forfeited.
In addition to the 25% mandatory deferral, the executive 
directors may elect to defer up to a further 25% of their cash 
bonus received in respect of the year ending 27 March 2011. 
During the year, Bonus Shares were purchased and Matching 
Shares awarded under the DSB based on the value of bonus 
deferred. Details of the awards made under the DSB during the 
year are set out on page 26.
Long Term Incentive Plan (LTIP)
The current LTIP plan was adopted at the 2009 annual general 
meeting to replace the previous plan that expired in  
September 2009.  
Executive directors and senior executives are eligible to 
participate in the LTIP . Under the new rules, the maximum 
annual award that can be made to an individual is 150% of 
salary. In exceptional circumstances, this limit may be exceeded 
but grant levels will be subject to acceptable market practice 
and remain below a maximum approved by the remuneration 
committee. There is no present intention to exceed the stated 
maximum of 150% of salary. 
Eligible executives are awarded rights to a maximum number of 
shares at the beginning of a three year period, a proportion of 
which they will be entitled to acquire at the end of that period 
depending on the extent to which (if at all) the performance 
conditions set by the remuneration committee at the time of the 
allocation is made are satisfied.
During the year, Dominic Taylor received an LTIP award 
equivalent to 120% of salary and George Earle and Tim 
Watkin-Rees received LTIP awards equivalent to 100% of 
salary. Awards made in the period were granted as conditional 
awards of shares. During the year, the fourth tranche of the LTIP 
awards failed to meet the performance conditions resulting in 
a nil vesting. Details of the LTIP awards made to the executive 
directors during the year are set out on page 25.
The performance conditions for the awards made during the 
year under the LTIP are set out in the following table:
Total Shareholder Return (TSR)  
position against comparator group 
LTIP % of shares 
released 
Below median 0% 
Median 30%* 
Upper quartile 100%* 
*There is proportionate vesting between points.
In addition to the above comparative TSR performance of 
the company, the remuneration committee will, in any event, 
satisfy itself that the recorded TSR is a genuine reflection of the 
underlying financial performance of the company before the 
release of any share awards under the LTIP , in accordance with 
the ABI guidelines.
Comparative TSR was selected as the performance condition for 
LTIP awards by the remuneration committee, as it ensures that 
the executives have outperformed their peers in the comparator 
group over the measurement period in delivering shareholder 
value, before being entitled to receive any of their awards, 
irrespective of general market conditions.
Performance measurement
The remuneration committee determines whether the 
performance conditions for share awards are satisfied. Where 
the performance requirements are based on earnings per 
share, the remuneration committee will use the principles 
behind the audited figures disclosed in the company’s financial 
statements and may take advice from independent advisers as 
to whether any adjustments are required to ensure consistency 
in accordance with the terms of the performance conditions. 
Where used as a performance measure, TSR shall be calculated 
by the remuneration committee’s independent advisers. 
Performance conditions under the LTIP and DSB are not subject 
to re-testing.
REMUNERATION COMMITTEE REPORT continued
PayPoint plc annual report 2011 23 Total Shareholder Return (TSR)  
performance graph
REMUNERATION COMMITTEE REPORT continued
The graph shows the company’s performance, measured by TSR, 
compared with the company’s comparator group which applies 
with respect to the LTIP awards granted prior to 2009 and the 
new comparator group as detailed earlier in the report. 
Share Incentive Plan (SIP)
The SIP was approved by shareholders prior to admission and 
adopted by the company at admission.
The board’s objective is to give employees the opportunity to:
•	 invest part of their salary in company shares; and
•	 build up a shareholding in the company.
The company is currently offering eligible employees, including 
executive directors and senior executives, the opportunity to 
purchase £1,500 of shares a year out of pre-tax salary and 
provide additional matching shares on a one matching share 
for every share purchased basis. These matching shares will 
normally be released three years after they have been awarded 
provided that the associated shares purchased by the employee 
have been retained and provided the employee is still employed 
by a group company at the time.
Details of shares held in the SIP by executive directors are set out 
on page 26. 
Dilution
In accordance with the ABI guidelines, the company can issue 
a maximum of 10% of its issued share capital in a rolling ten 
year period to employees under all its share plans. The company 
can only use half of the maximum (5%) to satisfy awards under 
discretionary or executive plans.
Pension
The company pays the equivalent of 12% of the executive 
director’s basic salary for personal pension plans. 
Executive directors’ contracts
Details of the service contracts of the executive directors of the 
company are as follows:
Name Company notice period Contract date
D Taylor 12 months 13 September 2004
G Earle 12 months 30 September 2004
T Watkin-Rees 12 months 13 September 2004
There are no special provisions in service contracts relating 
to cessation of employment or change of control. The policy 
on termination is that the company does not make payments 
beyond its contractual obligations and executive directors will be 
expected to mitigate their loss.
In addition, the remuneration committee ensures that there are 
no unjustified payments for failure.
Non-executive directors 
The remuneration of the non-executive directors is determined 
by the board based upon recommendations from the Chairman 
and Chief Executive (or, in the case of the Chairman, based on 
recommendations from the Senior Independent Director and 
the Chief Executive) and is within the limits set by the articles 
of association. Non-executive directors do not participate in 
any bonus plan or share incentive programme operated by the 
company and are not entitled to pension contributions or other 
benefits provided by the company. The non-executive directors 
do not have service contracts. They are appointed under letters 
of appointment which are subject to a three year term. Details 
of the terms of appointment of the non-executive directors are 
set out in the table below:
Name Date of appointment Expiry date 
D Morrison 10 August 2004 10 August 2013 
D Newlands 10 August 2004 10 August 2013 
A Robb 10 August 2004 10 August 2013 
E Anstee 16 September 2008 10 August 2013
S Rowley 16 September 2008 10 August 2013
N Wiles 22 October 2009 10 October 2013
Under the company’s articles of association, all directors are 
required to submit themselves for re-election every three years. 
However, due to the change in the UK Corporate Governance 
Code 2010, which will require annual re-election of directors, 
the term of appointment for a non-executive director will now 
be on an annual basis.  
Compliance
The board has reviewed the group’s compliance with the 
Combined Code on remuneration related matters. It is the 
opinion of the board that the group had complied with all 
remuneration related aspects of the Combined Code during the 
period since admission.
FTSE 250 Ex Investment Trusts PayPoint plc
Comparator Group
Total shareholder return from March 2006
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11
24 PayPoint plc annual report 2011 Audited information 
Directors’ emoluments
 Salary
1
Bonus
Benefits in
kind
2
Total Pension
3
Total
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Executive 
D Taylor 392 392 228 161 7 8 627 561 46 46 673 607
G Earle 300 300 173 121 11 15 484 436 59 59 543 495
T Watkin-Rees 258 258 148 104 6 6 412 368 39 39 451 407
Non-executive 
D Newlands 120 120 - - - - 120 120 - - 120 120
A Robb 43 43 - - - - 43 43 - - 43 43
D Morrison 36 36 - - - - 36 36 - - 36 36
R Wood
4 
10 36 - - - - 10 36 - - 10 36
E Anstee 43 43 - - - - 43 43 - - 43 43
S Rowley 36 36 - - - - 36 36 - - 36 36
N Wiles
5
36 16 - - - - 36 16 - - 36 16
Total 1,284 1,280 549 386 24 29 1,857 1,695 144 144 2,001 1,839
REMUNERATION COMMITTEE REPORT continued
1. Awards under the LTIP will only vest if the company’s comparative TSR performance is equal to or greater than the median level of performance over the three year 
holding period, at which point 30% of awards will vest, with full vesting occurring for upper quartile performance (proportionate vesting between points).
2. Granted as a conditional award of shares.
3. Awards were granted at a price of £2.80 per share (the closing price on the preceding dealing day).
1. Salary is the total salary paid during the year and includes payment of a car allowance as part of the contract of employment. From 1 April 2011, executive directors’ 
base salaries were: 
D. Taylor £397,100, G Earle £300,570, T Watkin-Rees £275,000.
2. Benefits include: private medical cover, permanent health insurance and life assurance.
3. Defined contribution pension scheme, of which two current directors are members. The remuneration committee has agreed that G Earle’s pension contributions will 
be paid direct to him (grossed up for tax).
4. R Wood retired 7 July 2010.
5. N Wiles was appointed on 22 October 2009.
Long Term Incentive Plan
1
Number of 
shares at 
28 March 
2010
2
 
Number of
 shares 
awarded 
during 
the year
3
Number of 
shares
 lapsed 
during the 
year
Number of 
shares at 
27 March 
2011
Value of
 shares 
awarded Date of grant Date lapsed Release date
D Taylor 51,266 51,266 £324,000 11.06.07 11.06.10 
55,512 55,512 £336,958 04.06.08 04.06.11
86,445 86,445 £456,000 04.06.09 04.06.12
162,857 162,857 £455,999 28.05.10 28.05.13
G Earle 34,810 34,810 £220,000 11.06.07 11.06.10 
37,693 37,693 £228,797 04.06.08 04.06.11
54,526 54,526 £287,625 04.06.09 04.06.12
102,723 107,723 £287,624 28.05.10 28.05.13
T Watkin-Rees 29,066 29,066 £183,700 11.06.07 11.06.10 
31,474 31,474 £191,047 04.06.08 04.06.11
46,578 46,578 £245,700 04.06.09 04.06.12
87,750 87,750 £245,700 28.05.10 28.05.13
PayPoint plc annual report 2011 25 REMUNERATION COMMITTEE REPORT continued
1. The Bonus Shares were purchased and the Matching Shares awarded at a share price of £2.88.
2. Bonus Shares are purchased with the bonus deferred after the deduction of tax.
3. Matching Shares are awarded based on the value of the gross bonus deferred.
4. No Matching Shares will be released unless the company’s earnings per share growth is 3% p.a. in excess of the Retail Prices Index over the three year holding period.
1. Free Shares are ordinary shares of the company awarded conditionally on 24 September 2004 based on the share price on admission of £1.92. 
2. Dividend shares are ordinary shares of the company purchased with the value of dividends paid in respect of all other shares held in the plan.
3. Partnership Shares are ordinary shares of the company purchased on a monthly basis during the year (at prices from £2.66 to £4.07).
4. Matching Shares are ordinary shares of the company awarded conditionally on a monthly basis during the year (at prices from £2.66 to £4.07) in conjunction with two 
share purchases.
Deferred Share Bonus Plan
Number 
of Bonus 
Shares 
purchased 
at 
28 March 
2010
2
Number of 
Matching 
Shares 
awarded at
28 March
2010
3
Number 
of Bonus 
Shares 
purchased/ 
(released) 
during the 
year
Number of 
Matching 
Shares 
awarded/ 
(released) 
during the 
year
Number 
of Bonus 
Shares 
purchased 
at 
27 March 
2011
Number 
of 
Matching 
Shares 
awarded 
at 
27 March
2011
Value of 
Matching 
Shares 
awarded
Date of 
grant
Release 
date
4
D Taylor 5,600 9,491 (5,600) (9,491) - - £34,663 13.06.07 13.06.10
5,865 9,942 5,865 9,942 £61,626 04.06.08 04.06.11
9,241 15,663 9,241 15,663 £83,014 04.06.09 04.06.12
16,150
1
27,905
1
16,150 27,905 £80,272 01.06.10 01.06.13
20,706 35,096 10,550 18,414 31,256 53,510
G Earle 4,765 8,077 (4,765) (8,077) - - £29,494 13.06.07 13.06.10
4,779 8,101 4,779 8,101 £50,215 04.06.08 04.06.11
7,097 12,029 7,097 12,029 £63,754 04.06.09 04.06.12
12,224
1
21,122
1
12,224 21,122 £60,760 01.06.10 01.06.13
16,641 28,207 7,459 13,045 24,100 41,252
T Watkin-Rees 3,979 6,744 (3,979) (6,744) - - £24,629 13.06.07 13.06.10
3,990 6,764 3,990 6,764 £41,927 04.06.08 04.06.11
6,035 10,228 6,035 10,228 £54,208 04.06.09 04.06.12
10,442
1
18,043
1
10,442 18,043 £51,903 01.06.10 01.06.13
14,004 23,736 6,463 11,299 20,467 35,035
Share Incentive Plan
Number of 
Partnership 
Shares 
purchased 
at 28 March 
2010
Number of 
Matching 
Shares 
awarded at 
28 March 
2010
Number 
of Free 
Shares
1
 
awarded at  
28 March 
2010
Dividend 
Shares
2
 
acquired at 
28 March 
2010
Total 
shares at 
28 March 
2010
Number of 
Partnership 
Shares
3
 
purchased 
during the 
year
Matching 
Shares
4
 
awarded 
during the 
year
Dividend 
Shares 
acquired 
during the 
year
Dates of 
release of 
Matching 
and Free 
Dividend 
Shares
Total 
shares at 
27 March 
2011
D Taylor 1,789 1,789 1,562 539 5,679 470 470 391 15.04.10 – 
15.03.13
7,010
G Earle 1,813 1,813 – 313 3,939 469 469 278 15.04.10 – 
15.03.13
5,155
T Watkin-Rees 1,813 1,813 1,562 538 5,726 469 469 394 15.04.10 – 
15.03.13
7,058
26 PayPoint plc annual report 2011 REMUNERATION COMMITTEE REPORT continued
Directors’ shareholdings
The directors serving during the period who had interests in the shares of the company were as follows:
Ordinary shares of 
1/3p each 
27 March 
2011
Ordinary shares 
of 1/3p each 
28 March 
2010
E Anstee 1,700 1,700
G Earle 203,811 195,101
D Newlands
1
216,599 180,100
A Robb 20,000 15,000
S Rowley 9,056 -
D Taylor 1,653,203 1,638,113
T Watkin-Rees 722,753 715,480
R Wood
2
52,083
N Wiles 25,000 15,000
1. D Newlands holds a non-beneficial interest in a further 900,000 shares held in various trusts of which he is a trustee (2010: 900,000).
2. R Wood retired from the board on 7 July 2010.
Between the end of the year and 26 May 2011, D Taylor, G Earle and T Watkin-Rees each acquired 26 Partnership and Matching 
Shares.
The market price of the company’s shares on 27 March 2011 was £4.18 (28 March 2010: £3.60) per share and the low and high 
share prices during the year were £2.37 and £4.21 respectively.
This report covers the remuneration of all directors that served during the year.
This report has been approved by the remuneration committee.
Andrew Robb
Chairman, remuneration committee
26 May 2011
PayPoint plc annual report 2011 27 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the annual report 
and the financial statements in accordance with applicable law 
and regulations.
Company law requires the directors to prepare financial 
statements for each financial year.  Under that law, the directors 
are required to prepare the group financial statements in 
accordance with International Financial Reporting Standards 
(IFRS) as adopted by the European Union and Article 4 of the 
IAS Regulation and have also chosen to prepare the parent 
company financial statements under IFRS as adopted by the EU.  
Under company law, the directors must not approve the accounts 
unless they are satisfied that they give a true and fair view of the 
state of affairs of the company and of the profit or loss of the 
company for that period.  In preparing these financial statements, 
International Accounting Standard 1 requires that directors:
•	 properly select and apply accounting policies;
•	 present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information; 
•	 provide additional disclosures when compliance with the 
specific requirements in IFRS are insufficient to enable users 
to understand the impact of particular transactions, other 
events and conditions on the entity’s financial position and 
financial performance; and
•	 make an assessment of the company’s ability to continue as a 
going concern.
The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the company and enable them to 
ensure that the financial statements comply with the Companies 
Act 2006.  They are also responsible for safeguarding the assets 
of the company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
company’s website.  Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions.
Responsibility statement 
We confirm that to the best of our knowledge:
•	 the financial statements, prepared in accordance with 
IFRS, give a true and fair view of the assets, liabilities, 
financial position and profit or loss of the company and the 
undertakings included in the consolidation taken as a  
whole; and
•	 the management report, which is incorporated into the 
directors’ report, includes a fair review of the development 
and performance of the business and the position of the 
company and the undertakings included in the consolidation 
taken as a whole, together with a description of the principal 
risks and uncertainties that they face.
Dominic Taylor 
Chief Executive
26 May 2011 
28 PayPoint plc annual report 2011 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PAYPOINT PLC
We have audited the financial statements of PayPoint plc for the 
year ended 27 March 2011, which comprise the consolidated 
income statement, consolidated statement of comprehensive 
income, the consolidated and parent company balance sheets, 
the consolidated and parent company cash flow statements, 
the consolidated and parent company statements of changes 
in equity and the related notes 1 to 30. The financial reporting 
framework that has been applied in their preparation is 
applicable law and International Financial Reporting Standards 
(IFRS) as adopted by the European Union, as regards the parent 
company financial statements, as applied in accordance with the 
provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, 
in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose. 
To the fullest extent permitted by law, we do not accept or 
assume responsibility to anyone other than the company and 
the company’s members as a body, for our audit work, for this 
report, or for the opinions we have formed.
Respective responsibilities of directors  
and auditor
As explained more fully in the directors’ responsibilities 
statement, the directors are responsible for the preparation of 
the financial statements and for being satisfied that they give 
a true and fair view. Our responsibility is to audit and express 
an opinion on the financial statements in accordance with 
applicable law and International Standards on Auditing (UK 
and Ireland).  Those standards require us to comply with the 
Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement, whether caused by fraud or 
error. This includes an assessment of: whether the accounting 
policies are appropriate to the group’s and the parent 
company’s circumstances and have been consistently applied 
and adequately disclosed; the reasonableness of significant 
accounting estimates made by the directors; and the overall 
presentation of the financial statements. In addition, we read all 
the financial and non-financial information in the annual report 
to identify material inconsistencies with the audited financial 
statements.  If we become aware of any apparent material 
misstatements or inconsistencies we consider the implications 
for our report.
Opinion on financial statements
In our opinion:
•	 the financial statements give a true and fair view of the state 
of the group’s and of the parent company’s affairs as at 27 
March 2011 and of the group’s profit for the year  
then ended;
•	 the group financial statements have been properly prepared 
in accordance with IFRS as adopted by the European Union;
•	 the parent company financial statements have been 
properly prepared in accordance with IFRS as adopted by 
the European Union and as applied in accordance with the 
provisions of the Companies Act 2006; and
•	 the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006 and, as 
regards the group financial statements, Article 4 of the IAS 
Regulation.
Opinion on other matters prescribed by the 
Companies Act 2006
In our opinion:
•	 the part of the directors’ remuneration report to be 
audited has been properly prepared in accordance with the 
Companies Act 2006; and
•	 the information given in the directors’ report for the financial 
year for which the financial statements are prepared is 
consistent with the financial statements.
Matters on which we are required to report by 
exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you 
if, in our opinion:
•	 adequate accounting records have not been kept by the 
parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or
•	 the parent company financial statements and the part of 
the directors’ remuneration report to be audited are not in 
agreement with the accounting records and returns; or
•	 certain disclosures of directors’ remuneration specified by law 
are not made; or
•	 we have not received all the information and explanations we 
require for our audit.
Under the Listing Rules we are required to review:
•	 the directors’ statement contained within the directors’ 
reports in relation to going concern; 
•	 the part of the Corporate Governance Statement  
relating to the company’s compliance with the nine  
provisions of the June 2008 Combined Code specified for our 
review; and
•	 certain elements of the report to shareholders by the board 
on directors’ remuneration.
Edward Hanson (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, UK
26 May 2011
PayPoint plc annual report 2011 29 Note
Year 
ended
27 March 
2011 
£000
Year 
ended
28 March 
2010
£000
Continuing operations
Revenue 2 193,233 196,603
Cost of sales (122,567) (133,110)
Gross profit 70,666 63,493
Administrative expenses (34,614) (29,421)
Operating profit 5 36,052 34,072
Share of loss of joint venture 13 (1,541) (1,601)
Investment income 6 88 224
Finance costs 6 (143) (50)
Profit before tax 34,456 32,645
Tax 7 (10,614) (10,513)
Profit for the year 25 23,842 22,132
Attributable to:
Equity holders of the parent 23,883 22,132
Non-controlling interests 26 (41) -
23,842 22,132
Earnings per share
Basic 9 35.2p 32.9p
Diluted 9 35.1p 32.7p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
Note
Year 
ended
27 March 
2011 
£000
Year 
ended
28 March 
2010
£000
Exchange differences on translation of foreign operations 25 (72) 35
Net income recognised directly in equity (72) 35
Profit for the year 23,842 22,132
Total recognised income and expenses for the year 23,770 22,167
Attributable to:
Equity holders of the parent 23,811 22,167
Non-controlling interests (41) -
23,770 22,167
CONSOLIDATED INCOME STATEMENT
30 PayPoint plc annual report 2011 Note
27 March
2011
£000
28 March
2010
£000
Non-current assets 
Goodwill 10 57,133 56,872
Other intangible assets 11 1,329 1,400
Property, plant and equipment 12 14,520 14,767
Investment in joint venture 13 135 326
Deferred tax asset 14 1,116 1,167
Investments 15 435 405
74,668 74,937
Current assets 
Inventories 16 915 1,567
Trade and other receivables 17 17,103 23,482
Cash and cash equivalents 18 26,464 20,769
44,482 45,818
Total assets 119,150 120,755
Current liabilities 
Trade and other payables 19 32,996 37,926
Current tax liabilities 5,287 5,684
Short-term borrowings 20 - 6,000
Obligations under finance leases 32 22
38,315 49,632
Non-current liabilities 
Other liabilities 22 240 379
240 379
Total liabilities 38,555 50,011
Net assets 80,595 70,744
Equity 
Share capital 25 226 226
Investment in own shares 25 (216) (370)
Share premium 25 25 25
Share based payment reserve 25 3,005 2,684
Translation reserve 25 471 543
Retained earnings 25 77,125 67,636
Total equity attributable to equity holders of the parent company 80,636 70,744
Non-controlling interest 26 (41) -
Total equity 80,595 70,744
These financial statements were approved by the board of directors on 26 May 2011 and signed on behalf of the board of directors.
Dominic Taylor
Chief Executive 
26 May 2011
CONSOLIDATED BALANCE SHEET
PayPoint plc annual report 2011 31 Note
Year 
ended
27 March 
2011 
£000
Year 
ended
28 March 
2010
£000
Opening equity 70,744 60,967
Profit for the year 23,842 22,132
Dividends paid 8 (15,041) (12,856)
Movement in investment in own shares 25 154 556
Exchange differences on translation of foreign operations 25 (72) 35
Movement in share based payment reserve 25 321 195
Adjustment in share scheme vesting 25 647 (285)
Closing equity 80,595 70,744
CONSOLIDATED CASH FLOW STATEMENT
Note
Year 
ended
27 March
2011 
£000
Year 
ended
28 March
2010 
£000
Net cash flow from operating activities 30 31,137 24,986
Investing activities 
Investment income 70 224
Purchases of property, plant and equipment (3,160) (2,700)
Proceeds from disposal of property, plant and equipment 61 93
Acquisition of subsidiaries 24 - (28,942)
Investment 15 (30) (30)
Purchase of own shares - (490)
Loan to joint venture 13 (1,350) (1,750)
Net cash used in investing activities (4,409) (33,595)
Financing activities
Repayments of obligations under finance leases (22) (8)
Dividends paid 8 (15,041) (12,856)
(Repayment) / receipt of short-term borrowings 20 (6,000) 6,000
Net cash used in financing activities (21,063) (6,864)
Net increase / (decrease) in cash and cash equivalents 5,665 (15,473)
Cash and cash equivalents at beginning of year 20,769 36,345
Effect of foreign exchange rate changes 30 (103)
Cash and cash equivalents at end of year 26,464 20,769
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
32 PayPoint plc annual report 2011 Note
27 March
2011
£000
28 March
2010
£000
Non-current assets 
Investments 15 109,808 106,055
109,808 106,055
Current assets 
Trade and other receivables 17 511 71
Cash and cash equivalents 19 709
530 780
Total assets 110,338 106,835
Current liabilities 
Trade and other payables 19 54 1,246
Borrowings 20 - 6,000
Non-current liabilities 
Other liabilities 22 87,628 65,781
Total liabilities 87,682 73,027
Net assets 22,656 33,808
Equity 
Share capital 25 226 226
Share premium 25 25 25
Investment in own shares 25 (216) (370)
Share based payment reserve 25 3,005 2,684
Retained earnings 25 19,616 31,243
Total equity 22,656 33,808
These financial statements were approved by the board of directors on 26 May 2011 and signed on behalf of the board of directors.
Dominic Taylor
Chief Executive
26 May 2011
COMPANY BALANCE SHEET
PayPoint plc annual report 2011 33 COMPANY STATEMENT OF CHANGES IN EQUITY
Note
Year 
ended
27 March
2011 
£000
Year 
ended
28 March
2010 
£000
Opening equity 33,808 26,103
Profit for the year 267 (1,505)
Dividends paid 8 (15,041) (12,856)
Dividends received 2,500 21,600
Movement in investment in own shares 25 154 556
Movement in share based payment reserve 25 321 195
Adjustment in share scheme vesting 25 647 (285)
Closing equity 22,656 33,808
COMPANY CASH FLOW STATEMENT
Note
Year 
ended
27 March
2011 
£000
Year 
ended
28 March
2010 
£000
Net cash flow from operating activities 30 21,605 18,338
Investing activities 
Investment 15 (30) (30)
Loan to joint venture 13 (1,350) (1,750)
Investment in group companies 15 (2,373) (637)
Purchase of own shares - (490)
Acquisition of subsidiaries 24 - (29,538)
Net cash used in investing activities (3,753) (32,445)
Financing activities
Dividends received 2,500 21,600
Dividends paid 8 (15,041) (12,856)
(Repayment) / receipt of short-term borrowings (6,000) 6,000
Net cash (used in) / generated from financing activities (18,541) 14,744
Net (decrease) / increase in cash and cash equivalents (689) 637
Cash and cash equivalents at beginning of year 709 72
Cash and cash equivalents at end of year 20 709
34 PayPoint plc annual report 2011 1. Accounting policies
These financial statements have been prepared on an historical 
cost basis and on the basis of the policies set out below.
Basis of preparation
The financial statements have been prepared on a going concern 
basis and in accordance with International Financial Reporting 
Standards (IFRS) as adopted for use in the European Union and 
therefore comply with Article 4 of the EU IAS Regulation.
The directors are satisfied that the group has adequate resources 
to continue in operational existence for the foreseeable future, a 
period of not less than 12 months from the date of this report. 
The group’s liquidity review can be found in the operating and 
financial review on page 11. The group’s going concern position 
is further discussed in the directors’ report on page 21. 
At the date of authorisation of these financial statements, the 
following standards and interpretations which have not been 
applied in these financial statements were in issue but not 
yet effective:
IAS 12 (amended) Deferred Tax: Recovery of 
Underlying Assets
IFRS 1 (amended) Severe Hyperinflation and 
Removal of Fixed Dates for  
First-time Adopters
Limited Exemption from 
Comparative IFRS 7 Disclosures 
for First-time Adopters
IFRS 7 (amended) Disclosures – Transfers of 
Financial Assets
Improvements to IFRS 2010 Improvements to IFRS 2010
IFRS 9 Financial Instruments
IAS 24 Related party disclosure
The group does not consider that these standards and 
interpretations will have a material impact on the financial 
statements of the group when the respective standards or 
interpretations come into effect. 
The financial statements are presented in pounds sterling 
because it is the currency of the primary economic environment 
in which the group operates.
The principal accounting policies adopted are set out below.
Basis of consolidation
PayPoint plc (the company) acts as a holding company. The 
group accounts consolidate the accounts of the company and 
entities controlled by the company (its subsidiaries) drawn up 
to March each year. Control is achieved where the company 
has the power to govern the financial and operating policies 
of an entity in which it invests, so as to obtain benefits from 
its activities. The results of subsidiaries acquired or sold are 
consolidated for the periods from or to the date on which 
control passed. All intergroup transactions, balances, income 
and expenses are eliminated on consolidation except for  
joint ventures.
The acquisition of subsidiaries is accounted for using the 
purchase method. Investments are stated at cost less any 
required provision for impairment. The cost of the acquisition 
is measured at the aggregate of the fair values, at the date of 
exchange, of assets given, liabilities incurred or assumed, and 
equity instruments issued by the group in exchange for control 
of the acquiree. The acquired identifiable assets, liabilities and 
contingent liabilities that meet the conditions for recognition 
under IFRS 3 revised are recognised at their fair value at the 
acquisition date, except for non-current assets that are classified 
as held for resale in accordance with IFRS 5 Non-Current 
Assets Held for Sale and Discontinued Operations, which are 
recognised and measured at fair value less costs to sell.
Goodwill
Goodwill arising on consolidation represents the excess of the 
cost of acquisition over the group’s interest in the fair value of 
the identifiable assets and liabilities of a subsidiary, associate 
or jointly controlled entity at the date of acquisition. Goodwill 
is initially recognised as an asset at cost and is subsequently 
measured at cost less any accumulated impairment losses. 
For the purpose of impairment testing, goodwill is allocated to 
each of the group’s cash-generating units expected to benefit 
from the synergies of the combination. Cash-generating units 
to which goodwill has been allocated are tested for impairment 
annually, or more frequently when there is an indication that the 
unit may be impaired. If the recoverable amount of the cash-
generating unit is less than the carrying amount of the unit, the 
impairment loss is allocated first to reduce the carrying amount 
of any goodwill allocated to the unit and then to the other 
assets of the unit pro-rata on the basis of the carrying amount 
of each asset in the unit. Any impairment loss for goodwill is 
recognised immediately in profit or loss and is not reversed in a 
subsequent year.
Impairment of tangible and intangible assets 
other than goodwill
At each balance sheet date, the group reviews the carrying 
amounts of its tangible and intangible assets to determine 
whether there is any indication that those assets have suffered 
an impairment loss. If any such indication exists, the recoverable 
amount of the asset is estimated in order to determine the 
extent of the impairment loss (if any). Where the asset does not 
generate cash flows that are independent from other assets, the 
group estimates the recoverable amount of the cash-generating 
unit to which the asset belongs. An intangible asset with an 
indefinite useful life is tested for impairment annually and 
whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell 
and value in use. 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 for which 
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) 
is estimated to be less than its carrying amount, the carrying 
amount of the asset (or cash-generating unit) is reduced to its 
recoverable amount. An impairment loss is recognised as an 
expense immediately.
The reversal of any impairment loss is limited by the net book 
value to which the relevant asset would have been reduced, 
had no impairment occurred. A reversal of an impairment loss is 
recognised as income immediately.
NOTES TO THE FINANCIAL STATEMENTS
PayPoint plc annual report 2011 35 Revenue
Revenue is measured at the fair value of the consideration 
received or receivable and comprises the value of sales of 
services (excluding sales taxes) in the normal course of business.
Revenue and cost of sales are recorded according to the 
actual transactions that occur in a given period. In Ireland and 
Romania, PayPoint is principal in the supply chain for prepaid 
mobile top-ups. Accordingly, revenue includes the sale price of 
the mobile top-ups and the cost of sales includes the cost of the 
mobile top-ups to PayPoint.
Dividend income from investments is recognised when the 
shareholders’ rights to receive payment have been established.
Cost of sales
Cost of sales includes agents’ commission, the cost of mobile 
top-ups and SIM cards where PayPoint acts as principal in their 
purchase and sale, consumables, communications, maintenance, 
depreciation and field service costs and any external processing 
charges levied by credit card scheme sponsors. All other costs 
are allocated to administrative expenses.
Pension costs
The group makes payments to a number of defined contribution 
pension schemes. The amounts charged to the profit and loss 
account in respect of pension costs represent contributions 
payable in the year. Differences between contributions payable 
in the year and contributions actually paid are shown as either 
accruals or prepayments in the balance sheet.
Share-based payments
Equity-settled share-based payments are measured at fair value 
at the date of grant. 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 upon 
independent advice that the shares will eventually vest. Fair value 
is measured by use of either a Monte Carlo simulation or Black 
Scholes model depending upon the scheme. 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.
Interest income
Interest income is accrued on a time basis, by reference to 
the principal outstanding and at the effective interest rate 
applicable, which is the rate that exactly discounts estimated 
future cash receipts through the expected life of the financial 
asset to that asset’s net carrying amount. 
Taxation
The group operates in a number of different tax jurisdictions 
which leads to some complexity in tax matters. This requires a 
degree of estimation of liabilities and delays resolution of issues. 
The final resolution of tax issues may give rise to variances in 
profit and loss and cash. The group’s policy is to pay tax when 
due but to minimise tax payments where practically possible, 
without engaging in aggressive tax schemes.
The tax expense represents the sum of the tax currently payable 
and deferred tax. The tax currently payable is based on taxable 
profit for the year. Taxable profit differs from net profit as 
reported in the income statement because it excludes 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 balance  
sheet date. 
Deferred tax is provided in full on temporary differences 
between the tax bases of assets and liabilities and their carrying 
amounts in the consolidated financial statements. The provision 
is calculated using tax rates that have been substantively 
enacted by the balance sheet date. Deferred tax assets are 
recognised to the extent that it is probable that future taxable 
profit will be available against which the tax will be realised.
Deferred tax liabilities are recognised for taxable temporary 
differences arising on investments in subsidiaries and interests 
in joint ventures, except where the group is able to control the 
reversal of the temporary difference and it is probable that the 
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each 
balance sheet date and reduced to the extent that it is no longer 
probable that sufficient taxable profits will be available to allow 
all or part of the asset to be recovered. Deferred tax is charged 
or credited in the income statement, except when it relates to 
items charged or credited directly to equity, in which case the 
deferred tax is also dealt with in equity.
Foreign currency
Foreign currency transactions are translated into the functional 
currency using the exchange rates prevailing at the dates of 
the transaction. At each balance sheet date, monetary assets 
and liabilities that are denominated in foreign currencies are 
retranslated at the rates prevailing on the balance sheet date. 
Non-monetary assets and liabilities carried at fair value that 
are denominated in foreign currency are translated at the rates 
prevailing at the date when fair value was determined. Gains 
and losses arising on retranslation are included in net profit or 
loss for the year, except for exchange differences arising on non-
monetary assets and liabilities where the changes in fair value 
are recognised directly in equity.
On consolidation, the assets and liabilities of the group’s 
overseas operations are translated at exchange rates prevailing 
on the balance sheet date. Income and expense items are 
translated at the average exchange rates for the period unless 
exchange rates fluctuate significantly. Exchange differences 
arising, if any, are classified as equity and transferred to the 
group’s translation reserve. Such translation differences are 
recognised as income or as expenses in the year of disposal of 
the operation.
NOTES TO THE FINANCIAL STATEMENTS continued
36 PayPoint plc annual report 2011 Intangible assets
On acquisitions, the group has recognised contracts with 
merchants and technology, based on their estimated fair values 
as intangible assets.
Contracts with merchants are amortised on a straight line 
basis, generally between one and five years, and technology is 
amortised over its estimated useful economic life of ten years.
Software development expenditure
The group develops computer software for internal use. 
Software development expenditure on large projects is 
recognised as an intangible asset if it is probable that the asset 
will generate future economic benefits. The costs that are 
capitalised are the directly attributable costs necessary to create 
and prepare the asset for operations. Software development 
costs recognised as an intangible asset are amortised on a 
straight-line basis over its useful life. Other software costs are 
recognised in administrative expenses when incurred. 
Property, plant and equipment
Property, plant and equipment are stated at cost, net of 
depreciation less provision for impairment. Depreciation is 
provided at rates calculated to write off the cost, less estimated 
residual value, of each asset on a straight-line basis over its 
expected useful life. The estimated useful lives are as follows 
and are reviewed on an annual basis:
•	 freehold building – 50 years;
•	 leasehold improvements – over the life of the lease;
•	 terminals – 5 years;
•	 automatic teller machines – 4 years; and
•	 other classes of assets – 3 years.
The gain or loss arising on the disposal or retirement of an asset 
is determined as the difference between the sales proceeds and 
the carrying amount of the asset and is recognised as income.
Inventories
Inventories are valued at the lower of cost or net  
realisable value.
Joint ventures
A joint venture entity is an entity in which the group holds a 
long term interest and shares joint control over the strategic, 
financial and operating decisions with one or more other 
ventures under a contractual arrangement. The group’s share of 
net assets, post tax profit and loss and dividends are accounted 
for using the equity method of accounting.
Leases
Assets held under finance leases, which confer rights and 
obligations similar to those attached to owned assets, 
are capitalised as property, plant and equipment and are 
depreciated over the shorter of the lease terms and their 
useful lives. The capital elements of future lease obligations are 
recorded as liabilities, while the interest elements are charged 
to the profit and loss account over the period of the leases to 
produce a constant rate of charge on the remaining balance 
of liability. Rentals under operating leases are charged on a 
straight-line basis over the lease term, even if the payments 
are not made on such a basis. Benefits received and receivable 
as an incentive to sign an operating lease are similarly spread 
on a straight-line basis over the lease term, except where the 
period to the review date on which the rent is first expected 
to be adjusted to the prevailing market rate is shorter than the 
full lease term, in which case the shorter period is used. Rentals 
received for ATMs from retail agents under operating leases are 
credited to income on a straight-line basis over the lease term.
Bank and other loans
Bank and other loans are initially measured at fair value, net 
of any attributable transaction costs, if any, and are 
subsequently measured at amortised cost using the effective 
interest rate method.
Dividends
Final dividends on ordinary shares are recognised in equity in the 
year in which they are approved by the company’s shareholders. 
Interim dividends are recognised when declared.
Own shares
PayPoint purchases its own shares for the purpose of employee 
share based payment schemes. Such shares are deducted from 
equity and no profit or loss is recognised on the transactions.
Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash 
equivalents comprise cash at bank and in hand and short-term 
deposits maturing within three months and are subject to 
insignificant risk of changes in value.
Critical accounting judgements
The critical accounting judgements and key sources of 
estimation uncertainty in the business are the valuation of 
goodwill of £57.1 million at 27 March 2011 (2010: £56.9 
million) and other intangible assets of £1.3 million at 27 March 
2011 (2010: £1.4 million). Management reviews goodwill 
for any impairment on an annual basis (note 10). Intangible 
assets are amortised over their economic useful life (note 11). 
The accounting policies for goodwill and intangible assets are 
included above in this note 1.
NOTES TO THE FINANCIAL STATEMENTS continued
PayPoint plc annual report 2011 37 2. Segmental reporting, revenue, net revenue 
and cost of sales
(i) Segmental information
PayPoint is a service provider for consumer payment transactions 
(payments and receipts) through various distribution channels, 
involving the processing of high volume transactions, the 
management of retailers and clients, the settlement of funds 
(collection and transmission) and transmission of data in a 
secure environment, by the application of technology.
The application of technology is directed on a group basis by 
the group’s executive (comprising the Chief Executive Officer, 
Finance Director, Business Development Director and Chief 
Information Officer) to develop products across the business, 
prioritised on an economic value basis (generally by product), 
rather than on a subsidiary by subsidiary basis. As the business 
has high fixed operating costs, the company regards the analysis 
of net revenue as the most reliable indication of contribution on 
a product by product basis and net revenue analysis is shown in 
the operating and financial review. 
Whilst the group has a number of different products, these do 
not meet the definition of different segments under IFRS 8  
and, therefore, the group has only one reportable class of 
business, being a payment service provider for consumer 
payment transactions.
(ii) Revenue, net revenue and cost of sales
Revenue comprises the value of sales (excluding sales taxes) of 
services in the normal course of business. 
 
Revenue performance of the business is measured by net 
revenue, which is calculated as the total revenue from clients 
less commissions paid to retail agents, the cost of mobile top-
ups and SIM cards where PayPoint is principal and costs incurred 
by PayPoint which are recharged to clients and merchants. These 
costs include retail agent commission, merchant service charges 
levied by card scheme sponsors and costs for the provision of 
call centres for PayByPhone clients.
Net revenue
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Revenue – transaction processing 191,742 195,008
              – rental income from ATMs 1,491 1,595
193,233 196,603
less: 
Commission payable to retail agents (71,322) (73,178)
Cost of mobile top-ups and SIM 
cards as principal (37,696) (43,520)
Card scheme sponsors’ charges and 
call centre charges (1,492) (2,499)
Net revenue 82,723 77,406
Cost of sales
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Cost of sales 
Commission payable to retail agents 71,322 73,178
Cost of mobile top-ups and SIM 
cards as principal 37,696 43,520
Card scheme sponsors’ charges and 
call centre charges 1,492 2,499
Depreciation and amortisation 3,612 4,820
Other 8,445 9,093
Total cost of sales 122,567 133,110
Geographical information
Revenue 
UK 148,737 147,658
Ireland 22,475 24,476
Romania 21,036 24,386
North America 985 83
Total 193,233 196,603
Non-current assets
UK 71,850 73,290
Ireland - 14
Romania 2,329 1,422
North America 489 211
Total 74,668 74,937
3. Employee information
Group Company
2011 2010 2011 2010
Average number of 
persons employed 
Sales, distribution and 
marketing 180 176 - -
Operations and 
administration 369 317 6 7
549 493 6 7
Staff costs during 
the year (including 
directors) £000 £000 £000 £000
Wages and salaries 19,185 15,909 399 330
Social security costs 2,339 1,899 36 35
Pension costs  
(note 27) 674 639 - -
22,198 18,447 435 365
Directors’ emoluments, pension contributions and share options 
are disclosed in the remuneration committee report on pages 
22 to 27. Included within staff costs is a share based payment 
charge (note 25) of £1,088,000 (2010: £942,000).
NOTES TO THE FINANCIAL STATEMENTS continued
38 PayPoint plc annual report 2011 4. Profit of parent company
The company has taken advantage of the exemption under 
S.408 of the Companies Act 2006 and consequently the 
income statement of the parent company is not presented as 
part of these financial statements. The profit of the parent 
company for the financial year amounted to £267,000 (2010: 
loss £1,505,000).
5. Operating profit
        Group
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Operating profit is after charging/
(crediting): 
Inventory expensed – cost of mobile 
top-ups and SIM cards as principal 37,696 43,520
Depreciation on owned assets 3,295 4,286
Loss / (gain) on disposal of property, 
plant and equipment 115 (14)
Amortisation of intangible assets 317 534
Rentals under operating leases:
– other operating leases 270 270
– income from rental of ATMs (1,491) (1,595)
Auditor’s remuneration (note below) 292 196
Staff costs 22,198 18,447
2011
£000
2010
£000 
Auditor’s remuneration: 
Fees payable to the company’s 
auditor for the audit of the 
company’s annual accounts 10 10
Fees payable to the group’s auditor 
for the audit of the company’s 
subsidiaries 125 120
Total audit fees 135 130
Fees payable to the group’s auditor 
and its associates for other services to 
the group: 
Tax 130 40
Corporate finance services
1
 - 285
Other 27 26
Total non-audit fees 157 351
Total auditor’s remuneration 292 481
Fees payable to Deloitte LLP and its associates for non-audit 
services to the company are not required to be disclosed 
because the consolidated financial statements are required to 
disclose such fees on a consolidated basis. A description of 
the work of the audit committee is set out on pages 17 to 18 
and includes an explanation of how auditor independence is 
safeguarded where non-audit services are provided by the auditor.
1. Corporate finance services relate to acquisition costs which were capitalised as 
part of the cost of acquisition.
6. Investment income and finance costs 
Investment income comprises interest on current and  
deposit accounts.
Investment income
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Bank deposit interest 88 224
Finance costs
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Bank charges 55 45
Finance charges 88 5
143 50
NOTES TO THE FINANCIAL STATEMENTS continued
PayPoint plc annual report 2011 39 7. Tax
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Current tax
Charge for current year 10,869 10,178
Adjustment in respect of prior years (304) 394
Current tax charge 10,565 10,572
Deferred tax
Credit for current year (51) (110)
Adjustment in respect of prior years 100 51
Deferred tax charge / (credit) 49 (59)
Total income tax
Income tax charge 10,614 10,513
The income tax charge is based on 
the United Kingdom statutory rate of 
corporation tax for the year of 28% 
(2010: 28%)
The charge for the year can be 
reconciled to the profit before tax as 
set out in the consolidated income 
statement 
Profit before tax 34,456 32,645
Tax at the UK corporation tax rate of 
28% (2010: 28%) 9,648 9,141
Tax effects of:
Losses in countries where the tax rate 
is different to the UK 109 304
Disallowable expenses / (non-taxable 
income) 61 (6)
Utilisation of tax losses not previously 
recognised (85) -
Losses in companies where a 
deferred tax asset is not recognised 652 408
Adjustments in respect of prior years (204) 445
Deferred tax impact of share based 
payments 393 221
Revaluation of deferred tax asset 
from 28% to 27% 40 -
Actual amount of tax charge 10,614 10,513
 8. Dividends on equity shares
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Equity dividends on ordinary 
shares: 
Interim dividend paid of 7.8p per 
share (2010: 7.4p) 5,276 5,008
Proposed final dividend of 15.6p 
per share (2010: paid 14.4p per 
share) 10,576 9,756
Total dividends paid and 
recommended 23.4p per share 
(2010: 21.8p per share) 15,852 14,764
Amounts distributed to equity 
holders in the year: 
Final dividend for the prior year 9,765 7,848
Interim dividend for the current 
year 5,276 5,008
15,041 12,856
The proposed final dividend is subject to approval by 
shareholders at the annual general meeting and has not been 
included as a liability in these financial statements.
9. Earnings per share
Basic earnings per share
Basic and diluted earnings per share are calculated on the 
following profits and number of shares.
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Profit for basic and diluted 
earnings per share is the net profit 
attributable to equity holders of 
the parent 23,842 22,132
27 March 
2011
Number of 
shares
28 March
2010
Number of 
shares
Weighted average number of 
ordinary shares in issue (for basic 
earnings per share) 67,721,190 67,170,830
Potential dilutive ordinary 
shares: 
Long-term incentive plan - 427,415
Deferred share bonus 157,914 133,313
Diluted basis 67,879,104 67,731,558
NOTES TO THE FINANCIAL STATEMENTS continued
40 PayPoint plc annual report 2011 10. Goodwill
The group tests goodwill annually for impairment or more 
frequently if there are indications that goodwill might be 
impaired. The recoverable amounts of the cash generating 
units are determined from value in use calculations. The key 
assumptions for the value in use calculations are those regarding 
the discount rates, growth rates and expected changes to 
selling prices and direct costs during the period. Management 
estimates discount rates using pre-tax rates that reflect current 
market assessments of the time value of money and the risks 
specific to the cash generating units. The growth rates are based 
on industry growth forecasts. Changes in selling prices and 
direct costs are based on past experience and expectation of 
future changes in the market.
The group prepares cash flow forecasts derived from the most 
recent financial budgets approved by management for the next 
four years and extends cash flows to perpetuity. Terminal values 
are based on growth rates that do not exceed 3%. The post tax 
rate used to discount the forecast cash flows is based on the 
group’s estimated weighted average cost of capital of 8.5%, 
adjusted for country or business specific risk premiums of up to 
1.5%.  Equivalent pre-tax rates would be 12% for the UK and 
11% for Romania.
Total 
£000
Cost 
At 28 March 2010 56,872 
Adjustment (see note 24) 446
Exchange rate adjustment (185)
At 27 March 2011 57,133
Accumulated impairment losses 
At 28 March 2010 - 
Impairment losses for the year
At 27 March 2011 - 
Carrying amount 
At 27 March 2011 57,133
At 28 March 2010 56,872 
Total 
£000
Cost 
At 29 March 2009 27,628
Recognised on acquisition of subsidiary 29,168
Exchange rate adjustment 76
At 28 March 2010 56,872 
Accumulated impairment losses 
At 29 March 2009 - 
Impairment losses for the year 
At 28 March 2010 - 
Carrying amount
At 28 March 2010 56,872
At 29 March 2009 27,628 
Goodwill arising on acquisition:
27 March
2011
£000
28 March
2010
£000
PayPoint.net 18,207 18,207
PayPoint Romania 9,312 9,497
PayByPhone 29,614 29,168
Total 57,133 56,872
For PayPoint Romania, the difference between the recoverable 
amount and the carrying amount at year end was £6.2 million. 
Headroom would reduce to £nil if either the forecast average 
growth in net revenue for the next four years of 19.5% reduced 
to 16% per annum or if the discount rate applied to the 
forecast cash flows were to increase from 10% to 13.4%. 
Management does not consider that a reasonably possible 
change in one or more key assumptions during the next 
year could cause the recoverable amount of the other cash 
generating units to fall below their carrying amount.
11. Other intangible assets
Technology
£000
Contracts 
with 
merchants
£000
Total
£000 
Cost 
At 28 March 2010 1,800 2,052 3,852
Additions 218 - 218
Exchange rate 
adjustment - 28 28
At 27 March 2011 2,018 2,080 4,098
Amortisation 
At 28 March 2010 605 1,847 2,452
Charge for the year 180 137 317
At 27 March 2011 785 1,984 2,769
Carrying amount 
At 27 March 2011 1,233 96 1,329
At 28 March 2010 1,195 205 1,400
NOTES TO THE FINANCIAL STATEMENTS continued
PayPoint plc annual report 2011 41 11. Other intangible assets continued
Technology
£000
Contracts 
with 
merchants
£000
Total
£000  
Cost 
At 29 March 2009 1,800 2,091 3,891 
Exchange rate 
adjustment - (39) (39)
At 28 March 2010 1,800 2,052 3,852
Amortisation 
At 29 March 2009 425 1,493 1,918
Charge for the year 180 354 534
At 28 March 2010 605 1,847 2,452
Carrying amount
At 28 March 2010 1,195 205 1,400
At 29 March 2009 1,375 598 1,973
The amortisation period for technology costs incurred is  
10 years and amortisation of merchant contracts is between  
1.9 years and 4.6 years depending upon the merchant churn in 
the relevant acquired company.
12. Property, plant and equipment
Group
Terminals 
and 
ATMs 
£000 
Fixtures, 
fittings  
and 
equipment 
£000 
Land 
and 
buildings
£000
Total 
£000
Cost 
At 28 March 2010 32,206 5,895 6,412 44,513
Additions 2,581 682 - 3,263
Disposals (1,640) (479) - (2,119)
Exchange rate 
adjustment (76) (26) - (102)
At 27 March 2011 33,071 6,072 6,412 45,555
Accumulated depreciation 
At 28 March 2010 26,315 3,320 111 29,746
Charge for the year 2,988 219 88 3,295
Disposals (1,630) (312) - (1,942)
Exchange rate 
adjustment (41) (23) - (64)
At 27 March 2011 27,632 3,204 199 31,035
Net book value
At 27 March 2011 5,439 2,868 6,213 14,520
At 28 March 2010 5,891 2,575 6,301 14,767
The net book value of assets held under finance leases is £0.1 
million (2010: £0.1 million). The cost of ATMs rented out under 
operating leases is £6,531,000 (2010: £6,396,000) and the 
accumulated depreciation is £5,816,000 (2010: £5,320,000). 
At 27 March 2011, the group had entered into contractual 
commitments for the acquisition of terminals and ATMs 
amounting to £0.9 million (2010: £0.6 million).
Group
Terminals 
and 
ATMs 
£000 
Fixtures, 
fittings 
and 
equipment 
£000 
Land 
and 
buildings
£000
Total 
£000 
Cost 
At 29 March 2009 30,398 5,102 6,412 41,912
Acquisition of 
subsidiary  
(note 24) - 322 - 322
Additions 1,994 663 - 2,657
Disposals (202) (205) - (407)
Exchange rate 
adjustment 16 13 - 29
At 28 March 2010 32,206 5,895 6,412 44,513
Accumulated depreciation 
At 29 March 2009 23,110 2,619 22 25,751
Charge for the year 3,353 844 89 4,286
Disposals (153) (147) - (300)
Exchange rate 
adjustment 5 4 - 9
At 28 March 2010 26,315 3,320 111 29,746
Net book value
At 28 March 2010 5,891 2,575 6,301 14,767
At 29 March 2009 7,288 2,483 6,390 16,161
13. Investment in joint venture
On 5 February 2009, PayPoint agreed a 50:50 joint venture 
with Yodel (formerly Home Delivery Network). The joint venture 
company, Drop and Collect Limited, trades as Collect+. PayPoint 
subscribed to £500,000 of ordinary shares in the company. The 
joint venture company has the same accounting reference date 
as PayPoint plc.
PayPoint’s share of aggregated 
amounts relating to joint ventures
27 March 
2011
£000 
28 March
2010
£000
Total assets 644 545
Total liabilities (3,609) (1,969)
Share of net assets (2,965) (1,424)
Loan to joint venture (note 15) 3,100 1,750
Investment in joint venture 135 326
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Revenues 1,002 205
Loss for year (1,541) (1,601)
NOTES TO THE FINANCIAL STATEMENTS continued
42 PayPoint plc annual report 2011 14. Deferred tax asset
28 March
2010
£000
Credit / 
(charge) 
to income 
statement
£000
Debit to 
equity
£000
27 March
2011
£000
Tax 
depreciation 1,320 (16) - 1,304
Share based 
payments 239 (132) - 107
Tax losses - - - -
Intangibles (392) 99 - (293)
Short term 
temporary 
differences - (2) - (2)
Total 1,167 (51) - 1,116
29 March
2009
£000
Credit / 
(charge) 
to income 
statement
£000
Debit to 
equity
£000
28 March
2010
£000
Tax 
depreciation 1,137 183 - 1,320
Share based 
payments 421 (162) (20) 239
Tax losses 36 (36) - -
Intangibles (517) 125 - (392)
Short term 
temporary 
differences 51 (51) - -
Total 1,128 59 (20) 1,167
At the balance sheet date, a deferred tax asset of £1.1 million 
(2010: £1.2 million) is recognised on the basis that there will be 
sufficient future taxable profits against which the deferred tax 
asset can be recovered, based on management forecasts.
At the balance sheet date, the group has unused tax losses of 
£7.6 million (2010: £5.1 million) available for offset against 
future profits for which no deferred tax asset is recognised. 
Included in unrecognised tax losses are losses of £2.0 million 
which will expire in less than three years, £3.2 million that will 
expire within four to seven years. Other losses may be carried 
forward indefinitely.
No deferred tax liability has been recognised in respect 
of temporary differences associated with investments in 
subsidiaries because the group is in a position to control the 
timing of the reversal of the temporary differences and it is 
probable that such differences will not reverse in the foreseeable 
future. The aggregate amount of these differences is not 
material at the balance sheet date.
The government has announced a further reduction in the main 
rate of corporation tax from 28% to 26% effective from 1 April 
2011, which was substantially enacted after 27 March 2011. 
The government has also indicated that it intends to enact 
future reductions in the main tax rate of 1% each year down to 
23% by 1 April 2014.  The future 1% main tax rate reductions 
are expected to have a similar impact as for 2011; however, the 
actual impact will be dependent on the deferred tax position at 
that time.  
15. Investments
Subsidiary undertakings 
The company, a holding company, has investments (directly or 
indirectly) in the following subsidiary undertakings:
Subsidiary of the 
company 
Principal activity Country of 
registration
PayPoint 
Network Limited 
Management of an  
electronic payment service
England and 
Wales
PayPoint 
Collections 
Limited 
Provision of a payment 
collection service 
England and 
Wales
PayPoint Retail 
Solutions Limited 
Provision of retail services England and 
Wales
PayPoint Ireland 
Limited 
Holding company in Ireland Ireland
PayPoint 
Network Ireland 
Limited 
Management of an 
electronic payment service 
in Ireland
Ireland
PayPoint 
Collections 
Ireland Limited 
Payment collection service 
in Ireland 
Ireland
PayPoint Services 
Romania SRL 
Management of an 
electronic and payment 
collection service in 
Romania
Romania
Metacharge 
Limited 
Internet payment service 
provider 
England and 
Wales
PayPoint.net 
Limited
Internet payment service 
provider 
England and 
Wales
Counter Payment 
Managers 
Limited 
ESOP scheme Isle of Man
Verrus UK 
Limited
Provision of a payment by 
phone service
England and 
Wales
Verrus Mobile 
Technologies Inc.
Provision of a payment by 
phone service
Canada
PayPoint 
Technologies 
Canada Inc.
Holding company in 
Canada
Canada
Mobile Payment 
Services SAS
Provision of a payment by 
phone service
France
The company holds 100% of the issued share capital of the 
above companies except Mobile Payment Services SAS where it 
holds 75% of the issued ordinary share capital.
NOTES TO THE FINANCIAL STATEMENTS continued
PayPoint plc annual report 2011 43 15. Investments continued
Group Company
27 March 
2011
£000
28 March
2010
£000
27 March 
2011
£000
28 March
2010
£000
Investments 
carried at 
cost:
Investment in 
OB10 Limited 
(note 29) 435 405 435 405
Investments in 
subsidiaries and 
joint venture - - 109,373 105,650
435 405 109,808 106,055
During the year the company loaned Collect+ (note 13) £1.4 
million (2010: £1.8 million). The company also subscribed for 
additional share capital in PayPoint Romania for £1.7 million 
(2010: £0.6 million) and Verrus Technologies Inc. for £0.7 million.
16. Inventories
In Ireland and Romania, PayPoint trades as principal for the 
processing and sale of mobile phone top-ups. In addition, 
PayPoint Romania purchases and sells mobile scratch cards and 
SIM cards. In the UK, PayPoint purchases SIM cards. Stocks of 
e-vouchers, scratch cards and SIM cards are held at cost.
17. Trade and other receivables
Group Company
27 March 
2011
£000
28 March
2010
£000
27 March 
2011
£000
28 March
2010
£000
Trade 
receivables
1
14,572 21,009 - -
Allowance for 
doubtful debts
2
(1,850) (1,623) - -
12,722 19,386 - -
Other 
receivables 1,024 1,708 485 69
Prepayments 
and accrued 
income 3,357 2,388 26 2
17,103 23,482 511 71
Included in the group’s trade receivable balance are debtors 
with a carrying amount of £3,983,000 (2010: £4,099,000), 
which are past due at the reporting date, for which the group 
has not provided as there has not been a significant change in 
credit quality and the group believes that the amounts are still 
considered recoverable. The average age of these receivables is 
33 days (2010: 41 days) and of the total balance, £2,536,000 is 
past due by fewer than 30 days.
Movement in the allowance for doubtful debts:
Group Company
27 March 
2011
£000
28 March
2010
£000
27 March 
2011
£000
28 March
2010
£000
Balance at the 
beginning of 
the year 1,623 1,587 - -
Amounts 
recovered 
during the year (15) (218) - -
Amounts 
utilised in  
the year (109) (630) - -
Increase in 
allowance 351 884 - -
Balance at end 
of the year 1,850 1,623 - -
In determining the recoverability of the trade receivables, the 
group considers any change in the credit quality of the trade 
receivables from the date credit was initially granted up to the 
reporting date. The concentration of credit risk is limited due to 
the spread of the retail agent, merchant and client bases.
18. Cash and cash equivalents
Included within group cash and cash equivalents is £6,132,000 
(2010: £6,818,000) relating to monies collected on behalf of 
clients where the group has title to the funds (client cash). An 
equivalent balance is included within trade payables (note 19).
The group operates cash pooling amongst its various bank 
accounts in the UK and therefore individual accounts can be 
overdrawn without penalties being incurred so long as the 
overall position is in credit. At 27 March 2011, the group’s cash 
was £26,464,000 (2010: £20,769,000).
NOTES TO THE FINANCIAL STATEMENTS continued
1. The average credit period on the sale of goods is 31 days (2010: 27 days).
2. The group has provided fully for all receivables over 180 days.
44 PayPoint plc annual report 2011 19. Trade and other payables
Group Company
27 March 
2011
£000
28 March
2010
£000
27 March 
2011
£000
28 March
2010
£000
Amounts 
owed in 
respect of 
client cash
1
 6,132 6,818 - -
Other trade 
payables
2 
14,891 18,651 49 610
Trade payables 21,023 25,469 49 610
Other taxes 
and social 
security 2,916 2,219 - -
Other payables 1,405 402 - -
Accruals 7,110 9,505 5 636
Deferred 
income 542 331 - -
32,996 37,926 54 1,246
20. Short-term borrowings
Group Company
27 March 
2011
£000
28 March
2010
£000
27 March
 2011
£000
28 March
2010
£000
Bank loan - 6,000 - 6,000
During the year, the £6 million loan was repaid and the balance 
outstanding at the end of the year was £nil.
21. Operating lease receivables
27 March
 2011
£000
28 March
2010
£000
Amounts receivable under operating 
leases:
Within one year 1,142 1,399
Within two to five years 1,959 2,628
After five years - -
3,101 4,027
The group enters into operating leases with some of its agents 
for the supply of ATMs. The average term of each lease entered 
into is five years.
NOTES TO THE FINANCIAL STATEMENTS continued
1. Included within trade payables is £6,132,000 (2010: £6,818,000) relating 
to monies collected on behalf of clients where the group has title to the 
funds (client cash). An equivalent balance is included within cash and cash 
equivalents (note 18). 
2. The group aims to pay its creditors promptly, in accordance with terms agreed 
for payment. The group had 28 days purchases outstanding at 27 March 
2011 (2010: 24 days) based on the average daily amount invoiced by suppliers 
during the year.
22. Other non-current liabilities
Group Company
27 March
2011
£000
28 March
2010
£000
27 March
2011
£000
28 March
2010
£000
Deferred income 240 347 - -
Obligations 
under finance 
leases - 32 - -
Amounts 
owed to group 
companies - - 87,628 65,781
240 379 87,628 65,781
23. Financial commitments
Obligations under finance leases
27 March
 2011
£000
28 March
2010
£000
Minimum lease payments due: 
Within one year 32 22
Within two to five years - 32
32 54
Finance charges allocated to  
future periods 4 6
36 60
Operating lease commitments
27 March
2011
28 March
2010
Land and 
buildings 
£000
Other
£000 
Land and 
buildings 
£000 
Other 
£000 
Leases which 
expire: 
Within one year 669 - 550 3
Within two to 
five years 1,823 - 1,749 -
After five years - - - -
24. Acquisition of subsidiary
On 9 March 2010, the group acquired 100 per cent of the 
issued share capital of Verrus Mobile Technologies Inc. and 
Verrus UK Limited (together known as PayByPhone) for cash 
consideration of £29 million. In addition, there was potential for 
a further £4 million dependent on financial results until March 
2013, which has subsequently been waived by the beneficiaries. 
On acquisition of Verrus Mobile Technologies Inc. and Verrus UK 
Limited the group recognised £29.2 million of goodwill. During 
the year it became apparent that the group would be unlikely to 
receive £0.4 million from a debtor and its fair value was reduced 
and the goodwill increased accordingly. 
PayPoint plc annual report 2011 45 25. Equity
Share based payments equity settled share scheme
The group has a number of share schemes as defined in the 
remuneration committee report on pages 22 to 27. The vesting 
period for all awards is three years, and they are forfeited if the 
employee leaves the group before shares vest. All awards made 
are free shares.
Details of the share awards outstanding during the year are 
as follows:
Number
of shares
2011
Number
of shares
2010
Outstanding at the beginning of the 
year 773,435 627,751
Granted during the year – Long 
Term Incentive Plan (LTIP) 488,772 270,518
Granted during the year – Deferred 
Share Bonus (DSB) 82,787 50,969
Lapsed during the year (43,156) -
Released during the year (187,735) (175,803)
Outstanding at end of the year 1,114,103 773,435
Awards granted 
Number of 
shares Vesting date 
LTIP 16 May 2008 207,295 16 May 2011 
DSB 16 May 2008 45,837 16 May 2011 
LTIP 4 June 2009 270,518 4 June 2012
DSB 4 June 2009 50,969 4 June 2012
LTIP 28 May 2010 488,772 28 May 2013
DSB 1 June 2010 82,787 1 June 2013
The long term incentive plan tranche did not vest on 11 
June 2010 because the group did not meet the performance 
measure. Under IFRS 2, the fair value charges of £647,000 
relating to this tranche, which had been previously charged to 
the income statement, are reversed through equity. The 
deferred share bonus vested in June 2010 and accordingly the 
group used £154,000 of its investment in own shares to satisfy 
the award.
The inputs into the Black Scholes model for the DSB and 
Monte Carlo model for LTIP and DSB awards during the year are 
as follows:
2011 2010
LTIP DSB LTIP DSB
Weighted average  
share price 1.45 2.39 3.52 4.74
Expected volatility 48% 45%
Expected life 3 years 3 years 3 years 3 years
Risk free rate 1.53% 2.29%
Expected dividend yield 6.00% 6.00% 3.60% 3.60%
Other share based payment plans
The employee Share Incentive Plan is open to all employees of 
PayPoint Network, PayPoint Collections, PayPoint Retail Solutions 
and PayPoint.net and provides for a purchase price equal to the 
market price on the date of purchase. The shares are purchased 
each month (or employees can opt to purchase 12 months at the 
start of each year) and are placed in the employee share savings 
plan for a three to five year period.
Group Company
2011
£000
2010
£000
2011
£000 
2010
£000
Authorised share 
capital 
4,365,352,200 
ordinary shares of 
1/3p each (2010: 
4,365,352,200 
ordinary shares of 
1/3p each) 14,551 14,551 14,551 14,551
14,551 14,551 14,551 14,551
Called up, allotted 
and fully paid share 
capital
67,795,702 ordinary 
shares of 1/3p each 
(2010: 67,754,202 
ordinary shares of 
1/3p each) 226 226 226 226
226 226 226 226
Called up share 
capital
At start of year 226 226 226 226
At end of year 226 226 226 226
Investment in own 
shares
At start of year (370) (926) (370) (926)
Acquired in year - (490) - (490)
Used on share scheme 
vesting 154 1,046 154 1,046
At end of year (216) (370) (216) (370)
Share premium
At start of year 25 25 25 25
Arising on issue of 
shares - - - -
At end of year 25 25 25 25
Share based 
payment reserve
At start of year 2,684 2,489 2,684 2,489
Additions in year 1,088 942 1,088 942
Released in year (801) (761) (801) (761)
Current tax on awards - 34 - 34
Other adjustments 34 (20) 34 (20)
At end of year 3,005 2,684 3,005 2,684
Translation reserve
At start of year 543 508 - -
Movement during year (72) 35 - -
At end of year 471 543 - -
Retained earnings
At start of year 67,636 58,645 31,243 24,289
Profit/(loss) for year 23,842 22,132 267 (1,505)
Non-controlling 
interest loss for year 
included in above 
(note 26) 41 - - -
Dividends paid (15,041) (12,856) (15,041) (12,856)
Dividends received - - 2,500 21,600
Adjustment on share 
scheme vesting  647 (285) 647 (285)
At end of year 77,125 67,636 19,616 31,243
NOTES TO THE FINANCIAL STATEMENTS continued
46 PayPoint plc annual report 2011 26. Non-controlling interest
27 March
 2011
£000
28 March
2010
£000
At start of year - -
Share of loss for year 41 -
At end of year 41 -
27. Pension arrangements
The group administers a non-contributory defined contribution 
scheme for executive directors and employees. The amount 
charged in the consolidated income statement for the year for 
pension costs of the group under the scheme was £674,000   
(2010: £639,000). There is an accrual of £nil for pension 
contributions at the balance sheet date (2010: £nil).
28. Derivatives and other financial instruments
The group’s financial instruments comprise cash and various 
items such as trade receivables, trade payables, other payables, 
bank loans and accruals, which arise directly from the group’s 
operations. The group’s policy is not to undertake speculative 
trading in financial instruments.
The main risks arising from the group’s financial instruments 
are interest rate risk and liquidity risk. The directors review 
and agree policies for managing each of these risks which are 
summarised below. These policies have remained unchanged 
during the year. The group has not used derivative instruments 
to manage its foreign exchange exposure.
(a) Interest rate risk
The group had no interest bearing financial assets at 27 March 
2011 other than sterling, euro, Romanian lei, US dollars and 
Canadian dollars deposits of £26,464,000 (2010: £20,769,000). 
Of these deposits, £6,132,000 (2010: £6,818,000) relates to 
monies held on behalf of clients where PayPoint has title to the 
funds for periods of up to seven days.
All sterling funds earn interest at the prevailing rate. The funds 
are deposited on short-term deposits (normally weekly or 
monthly) or held in current accounts in cash. The group seeks to 
maximise interest receipts within these parameters.
Finance leases interest is charged on leases at fixed  
contractual rates. 
(b) Liquidity risk
The group’s policy throughout the year ended 27 March 2011 
regarding liquidity has been to maximise the return on funds 
placed on deposit whilst minimising the associated risk.
The group had no financial liabilities at 27 March 2011 other 
than short-term payables such as trade payables and accruals.
NOTES TO THE FINANCIAL STATEMENTS continued
(c) Foreign exchange risk
To date, the group has not engaged in an active programme of 
foreign exchange risk management. Given the size and nature 
of the group’s non-sterling denominated balances, the directors 
do not consider hedging necessary. 
The group’s currency exposures comprise those transactional 
exposures that give rise to the net currency gains and losses 
recognised in the income statement. Such exposures comprise 
the monetary assets and monetary liabilities of the group that 
are not denominated in the operating (or functional) currency of 
the operating unit involved. At 27 March 2011, these exposures 
were £6,000 (2010: £469,000).
(d) Borrowing facilities
At the year end, the group had a £35 million revolving loan 
facility with a remaining term of less than one year which has 
been replaced by a new five year revolving term credit facility for 
£35 million since the year end.
(e) Fair value of financial assets and liabilities
The directors consider there to be no material difference 
between the book value and the fair value of the group’s 
financial instruments at 27 March 2011.
(f) Market price risk
The group’s exposure to market price risk comprises interest 
rate exposure. Group funds are invested in money market cash 
deposits with the objective of maintaining a balance between 
accessibility of funds and competitive rates of return. In practice, 
this has meant that no deposits were made with a maturity 
greater than 30 days during the year.
(g) Capital risk management
The group’s objectives when managing capital are to 
safeguard the group’s ability to continue as a going concern in 
order to provide returns for shareholders and benefits for  
other stakeholders.
(h) Credit risk
The group’s financial assets are cash, trade and other receivables 
and investments. The group’s credit risk is primarily attributable 
to its trade receivables and off balance sheet agent debt to 
the extent that PayPoint bears the credit risk. Clients, agents 
and merchants are credit checked to mitigate credit risk and in 
all new client contracts we have the right of set-off of funds 
collected against monies due. The group’s maximum exposure, 
at 27 March 2011, was £40,718,000 (2010: £42,594,000).
(i) Financial instrument sensitivities
Financial instruments affected by market risk include deposits, 
trade receivables and trade payables. Any changes in market 
variables (exchange rates and interest rates) will have an 
immaterial effect on these instruments.
PayPoint plc annual report 2011 47 29. Related party transactions
Remuneration of the directors, who are the key management of 
the group, is disclosed in the audited part of the remuneration 
committee report on pages 22 to 27.
PayPoint has entered into a loan agreement with its 50:50 
joint venture Drop and Collect Limited (trading as Collect+) 
and during the year it has lent Drop and Collect Limited an 
additional £1.4 million, bringing the total loan to £3.1 million.
The terms of the loan are:
•	 Interest payable annually at a rate of 3 months LIBOR;
•	 Repayable upon termination of the joint venture or upon 
demand by the lender.
The company and its subsidiaries, in the ordinary course 
of business, enter into various sales, purchase and service 
transactions with joint ventures and others in which the group 
has a material interest. These transactions are under terms that 
are no less favourable than those arranged with third parties. 
These transactions are not considered to be significant.
PayPoint has a small investment in OB10, a company that 
specialises in electronic invoicing. During the year, PayPoint 
subscribed for a further £30,125 of shares under a rights issue, 
resulting in a shareholding at 27 March 2011 of 1.02%  
(28 March 2010: 1.04%).
In the view of the directors, the aggregate cost of £435,000 
represents the fair value of the investment in the shares.
David Newlands, Dominic Taylor, George Earle, Eric Anstee and 
Nick Wiles all hold shareholdings in OB10 as follows:
Directors’ shareholding in OB10 Year 
ended
27 March 
2011
Year 
ended
28 March 
2010
% %
David Newlands 2.87 4.73
Dominic Taylor 1.44 1.42
George Earle 0.40 0.42
Nick Wiles 1.02 1.04
Eric Anstee 0.08 0.08
NOTES TO THE FINANCIAL STATEMENTS continued
30. Notes to the cash flow statement
Group Company
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Year 
ended
27 March 
2011
£000
Year 
ended
28 March 
2010
£000
Profit / (loss) before tax 34,456 32,645 271 (486)
Adjustments for: 
Depreciation of 
property, plant and 
equipment 3,295 4,286 - -
Amortisation of 
intangible assets 317 534 - -
Share of losses in joint 
venture 1,541 1,601 - -
Net interest  
expense / (income) 55 (174) (789) -
Share based payment 
charge 1,088 942 1,088 942
Operating cash flows 
before movements in 
working capital 40,752 39,834 570 456
Decrease / (increase) in 
inventories 209 (373) - -
Decrease in receivables 6,337 2,385 436 986
(Decrease) / increase in 
payables
– client cash (686) (729) - -
– other payables (4,476) (2,386) 20,599 16,896
Cash generated by 
operations 42,136 38,731 21,605 18,338
Corporation tax paid (10,950) (13,702) - -
Interest and bank 
charges paid (49) (43) - -
Net cash from 
operating activities 31,137 24,986 21,605 18,338
48 PayPoint plc annual report 2011 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should 
seek your own advice from a stockbroker, bank manager, solicitor, tax adviser, accountant or other independent professional adviser. 
If you have recently sold or otherwise transferred all of your shares in PayPoint plc, please pass this document together with the 
accompanying documents to the purchaser or transferee, or to the person who arranged the sale or transfer, so they can pass these 
documents to the person who now holds the shares as soon as possible.
PayPoint plc
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 2011 annual general meeting of PayPoint plc will be held at the offices of J.P . Morgan Cazenove,  
20 Moorgate, London, EC2R 6DA, on Friday 15 July 2011 at 12 noon.  You will be asked to consider and pass the resolutions below.  
Resolutions 16 to 18 (inclusive) will be proposed as special resolutions.  All other resolutions will be proposed as ordinary resolutions.
ORDINARY BUSINESS
1.  To receive the financial statements and the reports of the directors and the auditor thereon for the year ended 27 March 2011. 
2.  To receive the directors’ remuneration report for the year ended 27 March 2011. 
3.  To declare a final dividend of 15.6p per ordinary share of the company. 
4.  To re-elect Mr Eric Anstee as a director. 
5. To re-elect Mr George Earle as a director. 
6.  To re-elect Mr David Morrison as a director. 
7. To re-elect Mr David Newlands as a director. 
8.  To re-elect Mr Andrew Robb as a director. 
9.  To re-elect Mr Stephen Rowley as a director. 
10.  To re-elect Mr Dominic Taylor as a director.  
11.  To re-elect Mr Tim Watkin-Rees as a director.  
12.  To re-elect Mr Nick Wiles as a director. 
13.  To re-appoint Deloitte LLP as auditor of the company.  
14. To authorise the directors to determine the auditor’s remuneration.  
SPECIAL BUSINESS 
15. That the directors are authorised in accordance with section 551 of the Companies Act 2006 (the Act) to exercise all the 
powers of the company to allot relevant securities (as defined in section 560 of the Act) up to an aggregate nominal amount of 
£75,286.64 provided that this authority shall expire on the conclusion of the annual general meeting of the company to be held 
in 2012 or, if earlier, on the date which is 15 months from the date of this resolution, save that the company shall be entitled to 
make offers or agreements before the expiry of such authority which would or might require relevant securities to be allotted 
after such expiry and the directors shall be entitled to allot relevant securities pursuant to any such offer or agreement as if this 
authority had not expired; and all unexercised authorities previously granted to the directors to allot relevant securities  
are revoked. 
16. That the directors are empowered in accordance with section 570 of the Act to allot equity securities (as defined in section 560 
of the Act) for cash (pursuant to the authority conferred by resolution 15 above) or by way of a sale of treasury shares as if 
section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to: 
PayPoint plc annual report 2011 49 (a)  the allotment of equity securities in connection with a rights issue, open offer or other offer of securities in favour of the 
holders of ordinary shares on the register of members at such record date(s) as the directors may determine where the 
equity securities respectively attributable to the interests of the ordinary shareholders are proportionate (as nearly as may be) 
to the respective numbers of ordinary shares held by them on any such record date(s), subject to such exclusions or other 
arrangements as the directors may deem necessary or expedient to deal with fractional entitlements or legal or practical 
problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock exchange or 
by virtue of shares being represented by depositary receipts or any other matter whatever; and
b)  the allotment (otherwise than pursuant to sub-paragraph (a) above) to any person or persons of equity securities up to an 
aggregate nominal amount of £11,293.00, and shall expire upon the expiry of the general authority conferred by resolution 
15 above, save that the company shall be entitled to make offers or agreements before the expiry of such power which 
would or might require equity securities to be allotted after such expiry and the directors shall be entitled to allot equity 
securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.
17.  That subject to, and in accordance with the company’s articles of association and pursuant to section 701 of the Act, the 
company is authorised to make market purchases (within the meaning of section 693 of the Act) of ordinary shares of the 
company provided that: 
(a)  the maximum number of ordinary shares to be acquired is 10,156,921;
(b)  the minimum price (exclusive of expenses) which may be paid for an ordinary share is the nominal value of such share;
(c)  the maximum price (exclusive of expenses) which may be paid for an ordinary share shall not be more than the higher of: 
(i)  105 per cent of the average of the middle market quotations for an ordinary share taken from and calculated by 
reference to the London Stock Exchange Daily Official List for the five business days immediately preceding the day on 
which the ordinary share is purchased; and 
(ii)  the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in 
the company on the trading venue where the purchase is carried out;
(d)  this authority shall expire on the conclusion of the annual general meeting of the company to be held in 2012 or, if earlier, 
on the date which is 15 months from the date of this resolution; and
(e)  the company may make any purchase of its ordinary shares pursuant to a contract concluded before this authority expires 
and which will or may be executed wholly or partly after the expiry of such authority. 
All shares purchased shall either: 
(i)  be cancelled immediately on completion of the purchase; or 
(ii) be held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act. 
18. That any general meeting of the company that is not an annual general meeting may be called on not less than 14 clear days’ 
notice. 
BY ORDER OF THE BOARD
Susan Court
Company Secretary
26 May 2011
Registered Office: 
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire
AL7 1EL 
50 PayPoint plc annual report 2011 NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING
1. A form of proxy is enclosed with this notice for use by shareholders. To be valid, a proxy must be received by the company’s 
registrars, Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than 48 hours before the time of the 
annual general meeting. Appointment of a proxy does not preclude a shareholder from attending the annual general meeting 
and voting in person. 
2. A member entitled to attend, speak and vote at the annual general meeting may appoint one or more proxies (who need not be 
a member of the company) to attend and, on a poll, to vote on his or her behalf. In order to be valid, an appointment of proxy 
must be returned by one of the following methods: 
•	 in hard copy form by post, by courier or by hand to the company’s registrars, Capita Registrars, PXS, 34 Beckenham Road, 
Beckenham, Kent BR3 4TU; or
•	 in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the 
procedures set out below, 
and in each case must be received by the company not less than 48 hours before the time of the meeting.
3.  Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy 
information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by whom he/she 
was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the annual general meeting.  
If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such 
agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. 
4.  The statement of the rights of shareholders to appoint a proxy in paragraphs one and two above does not apply to Nominated 
Persons.  The rights described in these paragraphs can only be exercised by shareholders of the company. 
5.  CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so 
for the annual general meeting and any adjournment thereof by using the procedures described in the CREST manual. CREST 
personal members or other CREST sponsored members, and those CREST members who have appointed a voting service 
provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action 
on their behalf. In order for a proxy appointment, or instruction, made by means of CREST to be valid, the appropriate CREST 
message (a CREST proxy instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (EUI) 
specifications and must contain the information required for such instructions, as described in the CREST manual. The message, 
regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously 
appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) by the latest 
time(s) for receipt of proxy appointments specified in the notice of annual general meeting. For this purpose, the time of receipt 
will be taken to be the time (as determined by the timestamp applied to the message by the CREST applications host) from 
which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. The company 
may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) of the Uncertificated Securities 
Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting service providers should note that 
EUI does not make available special procedure in CREST for any particular messages. Normal system timings and limitations 
will therefore apply in relation to the input of CREST proxy instructions. It is therefore the responsibility of the CREST member 
concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting 
service provider(s), to procure that his/her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to 
ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members 
and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST 
manual concerning practical limitations of the CREST system and timings. 
6. To be entitled to attend and vote at the annual general meeting or any adjournment thereof (and also for the purpose of 
calculating how many votes a person may cast), a person must have his/her name entered on the register of members of the 
company by 6 pm on 13 July 2011 (or 6 pm on the date being two days before any adjourned meeting). Changes to entries on 
the register of members after this time shall be disregarded in determining the rights of any person to attend or vote at  
the meeting. 
7.  Biographical details of the directors of the company are shown on page 19 of the 2011 annual report. 
8.  Each member attending the meeting has the right to ask questions relating to the business being dealt with at the meeting 
which, in accordance with section 319A of the Companies Act 2006 and subject to some exceptions, the company must cause 
to be answered.  However, no such answer need be given if:
(a) to do so would interfere unduly with the preparation for the meeting or involve the 
     disclosure of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; 
     or
(c) it is undesirable in the interests of the company or the good order of the meeting that the question be answered.
PayPoint plc annual report 2011 51 9.  Information relating to the meeting which the company is required by the Companies Act 2006 to publish on a website in 
advance of the meeting may be viewed at www.paypoint.com.  A member may not use any electronic address provided by the 
company in this document or with any proxy appointment form or in any website for communicating with the company for any 
purpose in relation to the meeting other than as expressly stated in it. 
10.  It is possible that, pursuant to members’ requests made in accordance with section 527 of the Companies Act 2006, the 
company will be required to publish on a website a statement in accordance with section 528 of that Act setting out any matter 
that the members concerned propose to raise at the meeting relating to the audit of the company’s latest audited accounts. 
The company cannot require the members concerned to pay its expenses in complying with those sections. The company must 
forward any such statement to its auditor by the time it makes the statement available on the website. The business which may 
be dealt with at the meeting includes any such statement. 
11.  The issued share capital of the company as at 26 May 2011 was 67,799,752 ordinary shares of 1/3 pence each. The company 
holds 37,480  shares for the purpose of employee share schemes; therefore, the total number of voting rights in the company 
on 26 May 2011 was 67,722,555. 
12.  The following documents are available for inspection at the registered office of the company during normal business hours on 
any weekday and will be available at the place of the annual general meeting from 15 minutes before the meeting until it ends: 
•	 the directors’ service agreements and letters of appointment; and
•	 copies of the current articles of association of the company.
Recommendation and voting intentions
With respect to resolutions 4 to 12 (inclusive), the board has considered the retiring directors’ performance and recommends 
that each director be proposed for re-election. This opinion is based on an assessment of each director’s relevant knowledge and 
experience and the conclusion that, in each case, their informed opinions are of significant value and contribute greatly to board 
discussions. The directors’ biographies can be found on page 19 of the 2011 annual report.  
The directors consider that all the resolutions to be put to the meeting are in the best interests of the company and its shareholders 
as a whole and most likely to promote the success of the company for the benefit of those shareholders. Those directors who are 
shareholders will be voting in favour of the resolutions and unanimously recommend that you do so as well. 
52 PayPoint plc annual report 2011 Explanatory notes to certain of the resolutions to be 
proposed at the annual general meeting
Resolution 15: Directors’ authority to allot shares
By virtue of section 551 of the Companies Act 2006 (the Act), the directors require the authority of shareholders of the company 
to allot shares or other relevant securities. The resolution numbered 15 authorises the directors to make allotments of up to an 
additional 25,585,993 ordinary shares (representing approximately one-third of the issued share capital of the company (excluding 
treasury shares) as at the date of this document). This amount is in line with ABI guidelines. If approved at the forthcoming annual 
general meeting, the authority will expire no later than 15 months from the date on which the resolution is passed or on the 
conclusion of the annual general meeting of the company to be held in 2012, whichever is the sooner. The directors have no present 
intention of exercising the authority proposed to be conferred pursuant to resolution 15. 
Resolution 16: Authority for disapplication of statutory pre-emption rights
By virtue of section 561 of the Act, any issue by the company of equity capital for cash made otherwise than to existing shareholders 
on a proportional basis requires the consent of shareholders of the company unless the company has obtained their authority under 
section 570 of the Act. The resolution numbered 16 is for that purpose. It authorises the directors to allot shares by way of rights 
issue or pursuant to an open offer or otherwise than strictly pro rata when the directors consider that it is expedient to do so and 
also allows them to issue for cash up to 3,387,899 ordinary shares (representing approximately five per cent) of the issued share 
capital of the company (excluding treasury shares) as at the date of this document other than on a pre-emptive basis. If approved at 
the forthcoming annual general meeting, the authority will expire no later than 15 months from the date on which the resolution is 
passed or on the conclusion of the annual general meeting of the company to be held in 2012, whichever is the sooner. 
Resolution 17: Authority to make market purchases of ordinary shares.
By virtue of section 701 of the Act, the company may make market purchases of its own ordinary shares if authorised to do so by 
shareholders. Under resolution 17, the directors seek to renew an annual authority to make market purchases of shares: each year 
the directors will seek to further renew this authority at the company’s annual general meeting. Any ordinary shares purchased under 
this authority would either be:  
(i) cancelled immediately on completion of the purchase and the number of ordinary shares in issue reduced accordingly; 
(ii) held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act; or 
(iii) transferred to an employee benefit trust for the satisfaction of awards under the company’s existing share schemes. 
The maximum number of ordinary shares which could be purchased pursuant to this authority is 10,156,921, being 14.99 per 
cent of the issued share capital of the company (excluding treasury shares) as at the date of this document. Any repurchase of 
ordinary shares carried out by the company would be at a maximum price per ordinary share of 105 per cent of the average middle 
market price of such a share for the five business days immediately preceding the date of the purchase, the price equal to the last 
independent trade or the highest current independent bid and at a minimum price equal to the nominal value. The authority to 
repurchase ordinary shares will, if approved by shareholders, only be exercised after careful consideration by the directors and if 
such exercise would result in an increase in earnings per share and be in the best interests of shareholders generally. If approved at 
the forthcoming annual general meeting, the authority will expire no later than 15 months from the date on which the resolution is 
passed, or on the conclusion of the annual general meeting of the company to be held in 2012, whichever is the sooner.
Resolution 18: Authority to allow any general meeting of the company that is not an annual general meeting to be called on not less 
than 14 clear days’ notice.
Further to the implementation of the shareholder rights regulations, the directors seek authority to hold general meetings, other 
than annual general meetings, on 14 rather than 21 days notice. If approved at the forthcoming annual general meeting, the 
authority will expire no later than 15 months from the date on which the resolution is passed, or on the conclusion of the annual 
general meeting of the company to be held in 2012, whichever is the sooner. 
PayPoint plc annual report 2011 53  FORM OF PROXY
PayPoint plc – annual general meeting
I/We,................................................................................................................................................................................................................................................ (NAME)
of.............................................................................................................................................................................................................................................. (ADDRESS)
hereby appoint the Chairman of the meeting OR the following person........................................................................................................................(NAME OF PROXY)
of.............................................................................................................................................................................................................................................. (ADDRESS)
As my/our proxy to exercise all or any of my/our rights to attend, speak and vote in respect of my/our voting entitlement of ……………………………….. shares on 
my/our behalf at the annual general meeting of the company to be held at 12 noon on 15 July 2011 at the offices of J.P.Morgan Cazenove, 20 Moorgate, London, 
EC2R 6DA and at any adjournment thereof. 
Please indicate by ticking the box opposite if this proxy appointment is one of multiple appointments being made*
* For the appointment of one or more proxy, please refer to explanatory note 2 (below)
Items 1 to 14 are items of ordinary business, items 15 to 18 are items of special business.
RESOLUTION
ORDINARY BUSINESS
FOR AGAINST WITHHELD
1 To receive the directors’ report and the financial statements for the year ended 27 March 2011, together with the  
auditor’s report.
2 To approve the remuneration committee report for the year ended 27 March 2011.
3 To declare a final dividend of 15.6p per ordinary share of the company.
4 To re-elect Mr Eric Anstee as a director of the company.
5 To re-elect Mr George Earle as a director of the company.
6 To re-elect Mr David Morrison as a director of the company.
7 To re-elect Mr David Newlands as a director of the company.
8 To re-elect Mr Andrew Robb as a director of the company.
9 To re-elect Mr Stephen Rowley as a director of the company.
10 To re-elect Mr Dominic Taylor as a director of the company.
11 To re-elect Mr Tim Watkin-Rees as a director of the company.
12 To re-appoint Mr Nick Wiles as a director of the company.
13 To re-appoint Deloitte LLP as auditor of the company.
14 To authorise the directors to determine the auditor’s remuneration
SPECIAL BUSINESS
15 ORDINARY RESOLUTION: To authorise the directors to allot shares persuant to Section 551 of the Companies Act 2006
16 SPECIAL RESOLUTION: To disapply statutory pre-emption rights pursuant to Section 570 of the Companies  
Act 2006.
17 SPECIAL RESOLUTION: To authorise the company to make market purchases of its ordinary shares up to 
14.99% of the issued share capital.
18 SPECIAL RESOLUTION: To allow any general meeting (other than an annual general meeting) to be called on 
14 days’ notice. 
To assist with arrangements, if you intend attending the meeting in person, please place an ‘X’ in the box opposite.
Signature       Date
In the case of a corporation, this proxy must be given under its common seal or signed on its behalf by an officer duly authorised, stating their capacity (e.g. director,  
company secretary).
Explanatory Notes 
1. Every holder has the right to appoint some other person(s) of their choice, who need not be a shareholder as his proxy to exercise all or any of his rights, to attend, speak and 
vote on their behalf at the meeting. If you wish to appoint a person other than the Chairman, please insert the name of your chosen proxy holder in the space provided (see 
below). If the proxy is being appointed in relation to less than your full voting entitlement, please enter in the space beneath the proxy holder’s name (see above) the number 
of shares in relation to which they are authorised to act as your proxy. If left blank, your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this 
proxy form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account).
2. To appoint more than one proxy, you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to 
act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being 
given. All forms must be signed and should be returned together in the same envelope.
3. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated to receive communication from 
the company in accordance with section 146 of the Companies Act 2006 (nominated persons). Nominated persons may have a right under an agreement with the registered 
shareholder who holds shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not have such a right, or 
do not wish to exercise it, they may have a right under such an agreement to give instructions to the person holding the shares as to the exercise of voting rights.
4. The Vote Withheld option above is provided to enable you to abstain on any particular resolution. However, it should be noted that a Vote Withheld is not a vote in law and will 
not be counted in the calculation of the proportion of the votes For and Against a resolution.
5. Entitlement to attend and vote at the meeting and the number of votes which may be cast thereat will be determined by reference to the Register of Members of the Company 
at 6pm on the day which is two days before the day of the meeting or adjourned meeting. Changes to entries on the Register of Members after that time shall be disregarded 
in determining the rights of any person to attend and vote at the meeting.
6. To appoint one or more proxies or to give an instruction to a proxy (whether previously appointed or otherwise) via the CREST system, CREST messages must be received by 
the issuer’s agent (ID number RA10) not later than 48 hours before the time appointed for holding the meeting. For this purpose, the time of receipt will be taken to be the time 
(as determined by the timestamp generated by the CREST system) from which the issuer’s agent is able to retrieve the message. The company may treat as invalid a proxy 
appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
7. The completion and return of this form will not preclude a member from attending the meeting and voting in person. If you attend the meeting in person, your proxy appointment 
will automatically be terminated. 
8. To be effective, all votes must be lodged not less than 48 hours before the time of the meeting at the office of the company’s registrars at: Capita Registrars, PXS, 34 Beckenham 
Road, Beckenham, Kent, BR3 4TU.
9. This form is issued only to the addressee(s) and is specific to the unique designated account printed hereon. This personalised form is not transferable between different (i) 
account holders; or (ii) uniquely designated accounts. The company and Capita Registrars accept no liability for any instruction that does not comply with these conditions. &
BUSINESS REPLY 
Licence No. RSBH-UXKS-LRBC
PXS
34 Beckenham Road
Beckenham
BR3 4TU
3rd FOLD and TUCK IN
2nd FOLD
1st FOLD Officers and 
professional advisers
Directors
E E Anstee*
G D Earle
D J Morrison*
D B Newlands (Chairman)*
A M Robb*
S P Rowley*
D C Taylor
T D Watkin-Rees
N Wiles*
* Non-executive directors
Company Secretary
S C Court 
Registered office
1 The Boulevard
Shire Park
Welwyn Garden City
Hertfordshire, AL7 1EL
United Kingdom 
Registered in England and Wales 
number 3581541
Independent auditor
Deloitte LLP
2 New Street Square
London, EC4A 3BZ
United Kingdom
Brokers
J. P . Morgan Cazenove
20 Moorgate 
London, EC2R 6DA
United Kingdom
Collins Stewart
88 Wood Street
London, EC2V 7QR
United Kingdom
Registrars
Capita Registrars
Northern House
Woodsome Park
Fennay Bridge
Huddersfield
West Yorkshire, HD8 0GA
United Kingdom
This annual report has been produced using ISO 14001 and FSC certified
environmental print technology, together with vegetable based inks.
Furthermore, we have worked in partnership with the Carbon Neutral Company
to carbon balance the entire production and distribution of this document. PayPoint plc  
1 The  Boulevard, Shire Park, Welwyn Garden City, Hertfordshire AL7 1EL United Kingdom
Telephone +44 (0)1707 600300  Fax +44 (0)1707 600333   www.paypoint.com