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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 20-F



ANNUAL REPORT PURSUANT TO

SECTION 13
OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED JANUARY 31, 2004



Commission File Number: 0-30320



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TRINTECH GROUP PLC

(Exact name of Registrant as specified in its charter)



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Not Applicable

(Translation of Registrants Name into English)



Republic of Ireland

(Jurisdiction of Incorporation or Organization)



Trintech Group PLC

Trintech Building

South County Business Park

Leopardstown

Dublin 18, Ireland

011-353-1-207-4000

(Address and telephone number of principal executive offices)



---



Securities registered or to be registered pursuant to Section 12(b) of the Act:



None



Securities registered or to be registered pursuant to Section 12(g) of the Act:



|                     |  |                                                                                  
|-------------------- |  | ---------------------------------------------------------------------------------
|Title of Each 3Class |  | Name of Each Exchange on Which Registered                                        
|Ordinary Shares *    |  | Nasdaq National Market Frankfurt Stock Exchange Prime Standard (Regulated Market)



* Ordinary shares are
not traded in the United States or in Ireland, rather they are deposited with the Bank of New York, as Depositary. Each American Depositary Share represents two (2) Ordinary Shares.



Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:



None



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The number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period ended January 31, 2004 was 30,596,775 ordinary shares, US$0.0027 par value, represented by 15,298,388 equivalent
American Depositary Shares.



Indicate by check mark whether the
registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.



Yes  x    No ̈



Indicate by check mark which financial statement item the registrant elected
to follow.



Item 17 ̈Item  18     x



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TABLE OF CONTENTS





|         |  |                                                                              |  |   
|-------- |  | ---------------------------------------------------------------------------- |  | --
|         | 
|PART I   |  |                                                                             
|         |  |                                                                             
|Item 1.  |  | Identity of Directors, Senior Management and Advisers                        |  | 3 
|Item 2.  |  | Offer Statistics and Expected Timetable                                      |  | 3 
|Item 3.  |  | Key Information                                                              |  | 4 
|Item 4.  |  | Information on the Company                                                   |  | 17
|Item 5.  |  | Operating and Financial Review and Prospects                                 |  | 33
|Item 6.  |  | Directors, Senior Management and Employees                                   |  | 53
|Item 7.  |  | Major Shareholders and Related Party Transactions                            |  | 62
|Item 8.  |  | Financial Information                                                        |  | 64
|Item 9.  |  | The Offer and Listing                                                        |  | 66
|Item 10. |  | Additional Information                                                       |  | 69
|Item 11. |  | Quantitative and Qualitative Discussion About Market Risk                    |  | 78
|Item 12. |  | Description of Securities other than Equity Securities                       |  | 79
|         | 
|PART II  |  |                                                                             
|         |  |                                                                             
|Item 13. |  | Defaults, Dividends, Arrearages and Delinquencies                            |  | 80
|Item 14. |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 80
|Item 15. |  | Controls and Procedures                                                      |  | 80
|Item 16A |  | Audit Committee Financial Expert                                             |  | 80
|Item 16B |  | Code of Ethics                                                               |  | 80
|Item 16C |  | Principal Accountant Fees and Services                                       |  | 81
|         | 
|PART III |  |                                                                             
|         |  |                                                                             
|Item 17. |  | Financial Statements                                                         |  | 82
|Item 18. |  | Financial Statements                                                         |  | 82
|Item 19. |  | Exhibits                                                                     |  | 84



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In this document, unless otherwise indicated, references to the Company, Trintech or we
are to Trintech Group PLC, its consolidated subsidiaries and predecessor entities. In addition, references to ADSs are to the American Depositary Shares of Trintech Group PLC, each representing two ordinary shares. Unless otherwise
specified, all references to equivalent ADSs assumes the conversion of two of the Companys ordinary shares outstanding into one ADS based on the number of the Companys ordinary shares outstanding as of the date indicated.



Unless otherwise specified, all reference to U.S. dollars,
dollars or $ are to United States dollars, the legal currency of the United States of America. All references to euro or  are to the euro, the legal currency of the Republic of Ireland and the Federal Republic of Germany. All references to
IR£ are to Irish pounds, and all references to the Deutsche mark or the DM are to the Deutsche mark. All references to sterling or U.K. pound sterling are to the pound sterling, the legal currency of the United Kingdom.



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Trademarks© 2004, all rights reserved. Trintech®, Trintech and T logo, Trintech The Secure Way to Pay and T logo, S/PAY, PayWare®, PayWare Everywhere, PayWare Partner, PayWare Powered,
PayWare Issuer, PayWare ezCard, PayWare Merchant, PayWare Stores, PayWare Resolve, PayWare ERP, PayWare Call Centers, PayWare eVia 2000, PayWare POS,
PayWare EMS, PayWare CMS, PayWare ReconNET, PayWare Guardian, PayWare Compact 9000I, PayWare Compact 9400I, PayWare 950pp, PayWare PINPad, PayWare OpenPOS, PayWare PrePay, PayWare Acquirer, PayWare ePS, PayWare mAccess, IPS, PayWare
SmartPIN, PayWare OpenPay, PayWare Smart and PayWare Fusion are trademarks of the Trintech Group. Trintech reserves the right to alter product
specifications without notice. This Form 20-F also includes product names and other trade names and trademarks of other organizations.



For purposes of this Form 20-F, all references to fiscal 2000 shall refer to the fiscal year ended January 31, 2000, all references to
fiscal 2001 shall refer to the fiscal year ended January 31, 2001, all references to fiscal 2002 shall refer to the fiscal year ended January 31, 2002, all references to fiscal 2003 shall refer to the fiscal year
ended January 31, 2003, all references to fiscal 2004 shall refer to the fiscal year ended January 31, 2004 and all references to fiscal 2005 shall refer to the fiscal year ending January 31, 2005.



Forward-Looking Information



This Annual Report on Form 20-F contains forward-looking statements based on
the beliefs of the Companys management. We have based these forward-looking statements on the Companys expectations and projections about future events as of the date of this Form 20-F, including:



| |  | general economic and business conditions;
| | - | -----------------------------------------



| |  | attracting and retaining personnel;
| | - | -----------------------------------



| |  | competition in the software and payment industry;
| | - | -------------------------------------------------



| |  | implementing the Companys business strategy;
| | - | ---------------------------------------------



| |  | developing and introducing new services and products;
| | - | -----------------------------------------------------



| |  | obtaining and expanding market acceptance of the Companys services and products; and
| | - | -------------------------------------------------------------------------------------



| |  | meeting the Companys requirements with customers.
| | - | --------------------------------------------------



The words anticipate, believe, estimate, expect, forecast, intend,
may, plan, project, predict, should and will and similar expressions as they relate to us are intended to identify such forward-looking statements. Such statements reflect the
Companys views and assumptions and all forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the Companys future
financial results are discussed more fully under Item 3.D Key InformationRisk Factors, as well as elsewhere in this Annual Report on Form 20-F and in the Companys other filings with the U.S. Securities and Exchange
Commission, or SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 20-F. We undertake no obligation to publicly update or revise any forward-looking statements.



2



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##### Table of Contents

PART I



Item 1.Identity of Directors, Senior Management and Advisers



Not required.



Item 2.Offer Statistics and Expected Timetable



Not required.



3



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Item 3.Key Information



A. Selected Financial Data



The following
selected consolidated statement of operations data for the years ended January 31, 2002, 2003 and 2004 and the consolidated balance sheet data at January 31, 2003 and 2004 are derived from the Companys consolidated financial statements, which
have been audited by Ernst & Young and are included in this Form 20-F. The selected consolidated statement of operations data for the years ended January 31, 2000 and January 31, 2001 and the consolidated balance sheet data at January 31,
2000, January 31, 2001, and January 31, 2002 are derived from the Companys audited consolidated financial statements which are not included in this Form 20-F. This table is a summary and should be read in conjunction with Item 5
Operating and Financial Review and Prospects and the Companys consolidated financial statements included elsewhere in this Form 20-F.



|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|-------------------------------------------------------------------------- |  | --------------------------------------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | - |  | ---- | ---------- | - |  | - | ---------- | -
|                                                                           |  | Year Ended January 31,                                          |           
|                                                                           |  | 2000                                                            |            |   | 2001 |   |            | 2002 |  |   | 2003       |   |  | 2004 |           
|                                                                           |  | (in thousands of U.S. dollars, except share and per share data) |           
|Consolidated Statement of Operations Data:                                 |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Revenue:                                                                   |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Product                                                                    |  | $                                                               | 18,457     |   |      | $ | 22,288     |      |  | $ | 26,104     |   |  | $    | 9,165      |   |  | $ | 10,318     |  
|License                                                                    |  |                                                                 | 9,158      |   |      |   | 20,612     |      |  |   | 30,240     |   |  |      | 22,418     |   |  |   | 22,867     |  
|Service                                                                    |  |                                                                 | 2,629      |   |      |   | 6,140      |      |  |   | 11,997     |   |  |      | 11,273     |   |  |   | 9,886      |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total revenue                                                              |  |                                                                 | 30,244     |   |      |   | 49,040     |      |  |   | 68,341     |   |  |      | 42,856     |   |  |   | 43,071     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Cost of revenue:                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Product                                                                    |  |                                                                 | 12,034     |   |      |   | 15,110     |      |  |   | 19,476     |   |  |      | 11,148     |   |  |   | 7,586      |  
|License                                                                    |  |                                                                 | 2,981      |   |      |   | 6,718      |      |  |   | 10,448     |   |  |      | 9,248      |   |  |   | 5,313      |  
|Service                                                                    |  |                                                                 | 2,242      |   |      |   | 4,787      |      |  |   | 8,681      |   |  |      | 8,456      |   |  |   | 6,020      |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total cost of revenue                                                      |  |                                                                 | 17,257     |   |      |   | 26,615     |      |  |   | 38,605     |   |  |      | 28,852     |   |  |   | 18,919     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Gross margin                                                               |  |                                                                 | 12,987     |   |      |   | 22,425     |      |  |   | 29,736     |   |  |      | 14,004     |   |  |   | 24,152     |  
|Operating expenses:                                                        |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Research and development                                                   |  |                                                                 | 8,892      |   |      |   | 19,601     |      |  |   | 20,597     |   |  |      | 10,349     |   |  |   | 8,280      |  
|Sales and marketing                                                        |  |                                                                 | 8,849      |   |      |   | 16,955     |      |  |   | 18,719     |   |  |      | 10,297     |   |  |   | 8,689      |  
|General and administrative                                                 |  |                                                                 | 7,336      |   |      |   | 12,485     |      |  |   | 17,891     |   |  |      | 15,354     |   |  |   | 10,587     |  
|Restructuring charge                                                       |  |                                                                 |           |   |      |   |           |      |  |   | 5,320      |   |  |      | 4,270      |   |  |   | 745        |  
|Amortization of goodwill and intangible assets                             |  |                                                                 |           |   |      |   | 7,001      |      |  |   | 31,705     |   |  |      | 2,573      |   |  |   | 507        |  
|Impairment of goodwill and intangible assets                               |  |                                                                 |           |   |      |   |           |      |  |   | 38,102     |   |  |      | 16,535     |   |  |   |           |  
|Adjustment of acquisition liabilities                                      |  |                                                                 |           |   |      |   |           |      |  |   |           |   |  |      | 804        |   |  |   |           |  
|Adjustment of acquisition deferred consideration                           |  |                                                                 |           |   |      |   |           |      |  |   |           |   |  |      |           |   |  |   | (1,149     | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Stock compensation                                                         |  |                                                                 | 2,068      |   |      |   | 5,279      |      |  |   | 840        |   |  |      | 20         |   |  |   |           |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total operating expenses                                                   |  |                                                                 | 27,145     |   |      |   | 61,321     |      |  |   | 133,174    |   |  |      | 60,202     |   |  |   | 27,659     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Income (loss) from operations                                              |  |                                                                 | (14,158    | ) |      |   | (38,896    | )    |  |   | (103,438   | ) |  |      | (46,198    | ) |  |   | (3,507     | )
|Interest income (expense), net                                             |  |                                                                 | 1,208      |   |      |   | 6,855      |      |  |   | 2,961      |   |  |      | 716        |   |  |   | 268        |  
|Exchange (loss) gain, net                                                  |  |                                                                 | 842        |   |      |   | (149       | )    |  |   | 523        |   |  |      | 771        |   |  |   | 79         |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Income (loss) before provision for income taxes                            |  |                                                                 | (12,108    | ) |      |   | (32,190    | )    |  |   | (99,954    | ) |  |      | (44,711    | ) |  |   | (3,160     | )
|Provision for income tax                                                   |  |                                                                 | (3         | ) |      |   | (382       | )    |  |   | (85        | ) |  |      | (108       | ) |  |   |           |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Net income (loss)                                                          |  | $                                                               | (12,111    | ) |      | $ | (32,572    | )    |  | $ | (100,039   | ) |  | $    | (44,819    | ) |  | $ | (3,160     | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Basic net income (loss) per Ordinary Share                                 |  | $                                                               | (0.63      | ) |      | $ | (1.18      | )    |  | $ | (3.30      | ) |  | $    | (1.47      | ) |  | $ | (0.10      | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Shares used in computation of basic net income (loss) per Ordinary Share   |  |                                                                 | 19,309,964 |   |      |   | 27,704,705 |      |  |   | 30,341,559 |   |  |      | 30,559,410 |   |  |   | 30,314,419 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Diluted net income (loss) per Ordinary Share                               |  | $                                                               | (0.63      | ) |      | $ | (1.18      | )    |  | $ | (3.30      | ) |  | $    | (1.47      | ) |  | $ | (0.10      | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Shares used in computation of diluted net income (loss) per Ordinary Share |  |                                                                 | 19,309,964 |   |      |   | 27,704,705 |      |  |   | 30,341,559 |   |  |      | 30,559,410 |   |  |   | 30,314,419 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Basic net income (loss) per equivalent ADS                                 |  | $                                                               | (1.25      | ) |      | $ | (2.35      | )    |  | $ | (6.59      | ) |  | $    | (2.93      | ) |  | $ | (0.21      | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|ADSs used in computation of basic net income (loss) per equivalent ADS     |  |                                                                 | 9,654,982  |   |      |   | 13,852,353 |      |  |   | 15,170,780 |   |  |      | 15,279,705 |   |  |   | 15,157,210 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Diluted net income (loss) per equivalent ADS                               |  | $                                                               | (1.25      | ) |      | $ | (2.35      | )    |  | $ | (6.59      | ) |  | $    | (2.93      | ) |  | $ | (0.21      | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|ADSs used in computation of diluted net income (loss) per equivalent ADS   |  |                                                                 | 9,654,982  |   |      |   | 13,852,353 |      |  |   | 15,170,780 |   |  |      | 15,279,705 |   |  |   | 15,157,210 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  





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|                                 |  |                                |        |      |   |         |  |      |         |      |   |        |  |   |       
|-------------------------------- |  | ------------------------------ | ------ | ---- | - | ------- |  | ---- | ------- | ---- | - | ------ |  | - | ------
|                                 |  | January 31,                   
|                                 |  | 2000                           |        | 2001 |   | 2002    |  | 2003 |         | 2004
|                                 |  | (in thousands of U.S. dollars)
|Consolidated Balance Sheet Data: |  |                                |        |      |   |         |  |      |         |      |   |        |  |   |       
|Cash and cash equivalents        |  | $                              | 10,862 |      | $ | 14,038  |  | $    | 6,750   |      | $ | 42,559 |  | $ | 36,864
|Restricted cash                  |  |                                |       |      |   | 3,622   |  |      | 5,369   |      |   | 3,132  |  |   | 1,211 
|Marketable securities            |  |                                | 48,830 |      |   | 87,388  |  |      | 47,976  |      |   |       |  |   |      
|Working capital                  |  |                                | 57,803 |      |   | 85,783  |  |      | 54,586  |      |   | 35,580 |  |   | 29,595
|Total assets                     |  |                                | 74,295 |      |   | 236,464 |  |      | 123,258 |      |   | 73,513 |  |   | 64,317
|Non-current liabilities          |  |                                | 1,127  |      |   | 3,437   |  |      | 4,082   |      |   | 1,875  |  |   | 682   
|Total shareholders equity       |  |                                | 61,116 |      |   | 187,360 |  |      | 90,431  |      |   | 45,083 |  |   | 41,354



See note 12 of the
Notes to Consolidated Financial Statements for an explanation of the method used to calculate basic and diluted net income (loss) per equivalent ADS. Basic and diluted net income (loss) per equivalent ADS have been calculated after giving effect to
a two-for-one ADS split effected on March 21, 2000 and a one-for-four reverse split on May 24, 2002 of the issued and outstanding ADSs, so that now two ordinary shares are equivalent to one ADS. Basic and diluted net (loss) per equivalent ADS is
therefore calculated using 50% of the weighted average number of ordinary shares outstanding during the period. All amounts shown per equivalent ADS have been retroactively adjusted to give effect to the reverse split.



Exchange Rates



A significant portion of the Companys revenues and expenses is denominated in currencies other than U.S. dollars. We
do not currently anticipate paying any dividends to shareholders. However, any dividends declared by us would be in the currency determined by the Companys directors at the time they are declared, and exchange rate fluctuations would affect
the U.S. dollar equivalent of any cash dividend received by holders of ADSs that is paid in a currency other than U.S. dollars.



Prices quoted for the ADSs on the Frankfurt Stock Exchange Prime Standard (Regulated Market) are quoted in euro. Prices quoted for the ADSs on the Nasdaq
National Market are quoted in U.S. dollars.



Euro



The table below presents, for the period indicated,
information concerning the noon buying rates for the euro expressed in U.S. dollars per 1.00. The information below the caption Period Average represents the average of the noon buying rates on the last business day of each full
calendar month during the relevant period. No representation is made that the euro or U.S. dollar amounts referred to below could be or could have been converted into U.S. dollars or euro, at any particular rate or at all.



|                              |  |      |        |     |   |                |  |            |        |  |   |       
|----------------------------- |  | ---- | ------ | --- | - | -------------- |  | ---------- | ------ |  | - | ------
|Fiscal Year Ended January 31, |  | High |        | Low |   | Period Average |  | Period End
|2000 (from January 1, 2000)   |  | $    | 1.1303 |     | $ | 0.9757         |  | $          | 1.0453 |  | $ | 0.9757
|2001                          |  |      | 1.0060 |     |   | 0.8270         |  |            | 0.9170 |  |   | 0.9308
|2002                          |  |      | 0.9395 |     |   | 0.8370         |  |            | 0.8854 |  |   | 0.8594
|2003                          |  |      | 1.0861 |     |   | 0.8613         |  |            | 0.9674 |  |   | 1.0739
|2004                          |  |      | 1.2853 |     |   | 1.0545         |  |            | 1.1485 |  |   | 1.2452



|         |  |        |  |       
|-------- |  | ------ |  | ------
|Month    |  | High   |  | Low   
|2003     |  |        |  |       
|November |  | 1.1995 |  | 1.1417
|December |  | 1.2597 |  | 1.1956
|2004     |  |        |  |       
|January  |  | 1.2853 |  | 1.2389
|February |  | 1.2848 |  | 1.2426
|March    |  | 1.2431 |  | 1.2092
|April    |  | 1.2358 |  | 1.1802



5



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##### Table of Contents

On April 30, 2004, the noon buying rate for the euro expressed in U.S. dollar per 1.00 was
US$1.1975.



B. Capitalization



Not required.



C. Reasons for the Offer and Use of Proceeds



Not required.



D. Risk Factors



In addition to the other factors identified in this Report on Form 20-F, the following risk factors could materially and adversely affect the
Companys future operating results, and could cause actual events to differ materially from those predicted in the Companys forward looking statements relating to its business.



The slowdown in the US and European economies has affected the market for information technology solutions, including the
Companys products and services, and the Companys future financial results will depend, in part, upon whether this slowdown continues.



As a result of unfavorable economic conditions and reduced capital spending by the Companys customers and potential customers, demand for the
Companys products and services has been adversely affected.



In the year ended January 31, 2003, the Companys customers experienced weaker than expected demand from the German retail sector as a result of a weakening German economy and a fall off in demand post euro implementation.
Consequently, the Companys PoS product revenue was significantly lower for the year ended January 31, 2003 than for the year ended January 31, 2002. The German economic slowdown continued through fiscal 2004 and we expect that it will continue
through at least July 31, 2004. Consequently, we do not expect significant growth in the Companys PoS product revenue in the current fiscal year.



Some companies may not view the Companys products and services as critical to the success of their businesses. If these companies experience
disappointing operating results, whether as a result of adverse economic conditions, competitive issues or other factors, they may decrease or forego software or electronic payment product expenditures before limiting their other expenditures or
they may be unable to fulfill existing commitments to us.



In
addition, the general condition of the economy, and by extension the Companys business, can be affected by social, political and military conditions. For example, due to the war in Iraq, services revenues were materially adversely impacted in
the three months ended January 31, 2003.



The factors outlined
here have resulted in decreased revenues in fiscal 2003 and fiscal 2004, compared to fiscal 2002. The Companys future results could be materially and adversely affected if this slowdown continues and the Companys revenues continue to be
adversely impacted. In light of the current economic environment we may continue to incur losses for the foreseeable future. If current economic conditions persist, we may have to implement further cost reduction initiatives that could adversely
impact the Companys ability to sustain growth if economic conditions improve at some time in the future.



We depend on sales of the Companys electronic point-of-sale systems for payment card transactions to customers located in Europe for a
significant portion of the Companys total annual revenues.



A significant portion of the Companys total revenue historically has been derived from the sale of the Companys electronic payment card point-of-sale system products. We have historically marketed the



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Companys electronic PoS system products solely in Europe, and particularly in Germany. For fiscal 2004, the Companys customers in Germany
accounted for over 50% of the Companys electronic PoS system product revenues. We intend to continue to focus substantially all of the Companys marketing efforts for the Companys electronic PoS system products in Europe. As a
result, the Companys future results of operations will depend on continued market demand for, and acceptance of, these products in Europe in general. In the fiscal year ended January 31, 2003 the Companys electronic PoS system product
revenues decreased significantly compared with the prior fiscal year. The decrease was mainly attributable to the Companys customers experiencing weaker than expected demand from the German retail sector as a result of a weakening German
economy and a fall off in demand post euro implementation. The German economic slowdown continued through fiscal 2004 and we expect that it will continue through at least July 31, 2004. Consequently, we do not expect significant growth in the
Companys PoS product revenue in the current fiscal year. Continued reduction in demand for the Companys electronic PoS system products would continue to materially adversely affect the Companys business, financial condition and
results of operations.



The Companys business is
subject to currency fluctuations that can adversely affect the Companys operating results.



Due to the Companys multinational operations, the Companys business is subject to fluctuations based upon changes in the exchange rates
between the currencies in which we collect revenues or pay expenses and the euro. In particular, the value of the U.S. dollar to the euro impacts the Companys operating results. The Companys expenses are not necessarily incurred in the
currency in which revenue is generated, and, as a result, we are required from time to time to convert currencies to meet the Companys obligations. These currency conversions are subject to exchange rate fluctuations, and changes to the value
of the euro relative to other currencies could adversely affect the Companys business and results of operations. For example, as sales of the Companys electronic PoS systems in Germany are denominated in euro, the decrease in value of
these sales has meant that the Companys euro costs were greater than the Companys euro revenue in fiscal 2004. As a result, the increase in value of the euro relative to other currencies has had a negative impact on the Companys
margins. With the on-going strength of the euro against the U.S dollar, the Companys margins could be negatively impacted through at least the end of fiscal 2005.



In addition, the Companys consolidated financial statements are prepared in euro and translated to U.S. dollars for
reporting purposes. As a result, even when foreign currency expenses substantially offset revenues in the same currency, the Companys net income may be diminished, or the Companys net loss increased, when reported in U.S. dollars in the
Companys financial statements.



Average selling prices
for electronic PoS system products may continue to decline, adversely affecting the Companys results of operations, particularly the Companys revenue and operating and net income.



The market for electronic PoS system products is characterized by increasing
price competition, which historically has caused the average selling prices of the Companys electronic PoS systems to decrease over the life of each product. To offset declines in the average selling prices of the Companys electronic PoS
system products, we will need to continue to reduce the cost of these products by implementing cost reduction design changes, obtaining cost reductions as and if volumes increase and successfully managing manufacturing and subcontracting
relationships. We do not operate our own manufacturing facilities, and, as a result, we may not be able to reduce the Companys costs as rapidly as companies that operate their own manufacturing facilities. If we do not design and introduce
lower cost versions of the Companys electronic PoS system products in a timely manner or successfully manage our manufacturing relationships, margins on the Companys electronic PoS system products will decrease. A decrease in margins or
an accelerated decrease in average selling prices could have a material adverse effect on the Companys business, financial condition and results of operations.



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We may fail to adequately integrate acquired products, technologies or businesses.



Over the past several years, we evaluated opportunities to acquire
additional product offerings, complementary technologies and businesses and made six such acquisitions. The acquisitions we have made have resulted in amortization of acquired intangible assets and impairment of goodwill and diversion of the
Companys managements attention. As a result of these acquisitions, the Companys operating expenses have increased and may increase further in the current fiscal year as a result of restructuring costs incurred to consolidate and
rationalise the acquired businesses cost bases and geographic locations. Further, due to the economic slowdown the revenues from the acquired businesses may not be sufficient to support the costs associated with those businesses without
adversely affecting the Companys operating margins.



We
intend to continue to evaluate opportunities to acquire additional product offerings, complementary technologies and businesses. For example, on November 1, 2003, we acquired DataFlow Services for a total consideration of approximately US$3.9
million subject to final adjustment relating to performance related contingent consideration. We may be unable to locate further attractive opportunities or acquire any that we locate on attractive terms. Future acquisitions could result in
potentially dilutive issuances of equity securities, the expenditure of a significant portion of the Companys available cash, the incurrence of debt and contingent liabilities, which could materially adversely affect the Companys results
of operations. Product and technology acquisitions entail numerous risks, including difficulties in the assimilation of acquired operations, technologies and products, diversion of managements attention from other business concerns, risks of
entering markets in which we have no or limited prior experience and the potential loss of key employees of acquired businesses. Further, the revenues from the acquired businesses may not be sufficient to support the costs associated with those
businesses, without adversely affecting the Companys operating margins in the future. We may be unable to integrate successfully any operations, personnel or products that have been acquired or that might be acquired in the future and the
Companys failure to do so could have a material adverse effect on the Companys results of operations.



The Companys quarterly and annual operating results are difficult to predict because they can fluctuate significantly. This limits your ability
to evaluate the Companys historical financial results and increases the likelihood that the Companys results will fall below market analysts expectations, which could cause the price of the Companys ADSs to drop rapidly and
severely.



We have experienced significant quarterly and
annual fluctuations in operating results and cash flows and we expect that these fluctuations will continue and could intensify in future periods.



Quarterly and annual fluctuations have been, and may in the future be, caused by factors which include:



| |  | the size and timing of orders
| | - | -----------------------------



| |  | currency fluctuations
| | - | ---------------------



| |  | product mix
| | - | -----------



| |  | the rate of acceptance of new products, product enhancements and technologies
| | - | -----------------------------------------------------------------------------



| |  | purchasing and payment patterns of the Companys customers
| | - | ----------------------------------------------------------



| |  | the Companys pricing policies and those of the Companys competitors
| | - | ---------------------------------------------------------------------



| |  | ability to control costs
| | - | ------------------------



| |  | deferral of customer orders
| | - | ---------------------------



| |  | customer buying cycles and changes in these buying cycles
| | - | ---------------------------------------------------------



| |  | general condition of market or markets served by the Companys customers
| | - | ------------------------------------------------------------------------



| |  | general economic factors, including economic slowdown or recession
| | - | ------------------------------------------------------------------



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| |  | product or service quality problems
| | - | -----------------------------------



| |  | impact of declines in net revenue in a particular quarter as compared to relatively fixed nature of the Companys expenses in the short term
| | - | --------------------------------------------------------------------------------------------------------------------------------------------



| |  | impairment charges arising from recent acquisitions or future acquisitions
| | - | --------------------------------------------------------------------------



| |  | economic conditions which may affect the Companys customers and potential customers budgets for IT expenditure
| | - | ----------------------------------------------------------------------------------------------------------------



| |  | timing of product implementations, which are highly dependent on customers resources and discretion
| | - | ----------------------------------------------------------------------------------------------------



| |  | timing and market acceptance of new products or product enhancements by either us or the Companys competitors
| | - | --------------------------------------------------------------------------------------------------------------



In addition, the Companys revenue is difficult to predict for several
reasons. These reasons include:



| |  | we have generally recognized a substantial portion of the Companys revenue in the last month of each quarter
| | - | -------------------------------------------------------------------------------------------------------------



| |  | the market for the Companys software products is rapidly changing and competitive
| | - | ----------------------------------------------------------------------------------



| |  | the sales cycle for the Companys products is typically 6 to 12 months and varies substantially from customer to customer
| | - | -------------------------------------------------------------------------------------------------------------------------



As a result of the factors listed above, among others, we believe that the
Companys quarterly revenue, expenses and operating results are likely to vary significantly in the future. As a result, if revenue in any quarter falls below expectations, expenditure levels could be disproportionately high as a percentage of
revenue, and the Companys business and operating results for that quarter could be materially adversely affected. In addition, it is likely that in some future quarters the Companys results of operations will be below the expectations of
public market analysts and investors, which could have a severe adverse effect on the trading price of the Companys ADSs.



We also believe that period-to-period comparisons of the Companys quarterly operating results are not necessarily meaningful and that, as a result,
these comparisons should not be relied upon as indications of the Companys future performance.



To be successful, we will need to effectively respond to future changes in the rapidly developing markets in which we sell the Companys software
products.



The markets for the Companys electronic
payment software and funds and transaction management software are rapidly evolving and changing. The market is influenced by rapidly changing technologies, evolving industry standards, changes in customer requirements and preferences and frequent
introductions of new products and services embodying new technologies. The Companys ability to enhance existing products and to design, develop, introduce and support new software products on a cost effective and timely basis that meet
changing market needs and respond to technological developments is critical to the Companys future success. In addition, these products will need to support industry standards and interoperate with a variety of third parties products,
including those of the Companys competitors. We may be unable to develop interoperable products, and widespread adoption of a proprietary or closed electronic payment standard could preclude us from effectively doing so. Also, the number of
businesses and cardholders engaged in electronic commerce may not grow or could decrease, reducing the potential market for the Companys electronic commerce products.



We are, from time to time, subject to legal proceedings and adverse determinations in these proceedings could harm the
Companys business.



We are, from time to time,
involved in lawsuits and legal proceedings, which arise in the ordinary course of business. An adverse resolution of these matters could significantly negatively impact the Companys financial position and results of operations.



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Cost-reduction efforts may adversely impact the Companys productivity and service levels and our
ability to develop new products and respond to market changes.



During fiscal year 2002, we instituted various cost-control measures affecting various aspects of the Companys business operations. We had a reduction in the Companys workforce of approximately 18% in fiscal 2002, approximately
30% in fiscal 2003 and a further reduction of approximately 17% in fiscal 2004, excluding the acquisition of DataFlow Services, which increased headcount by approximately 11%. As a result of involuntary employee terminations, employee morale and
productivity has been negatively impacted. If we are not successful in increasing our revenues, we may in the future be required to take additional cost-saving actions to reduce the Companys losses and to conserve cash. The failure to achieve
such future cost savings could have a material adverse effect on the Companys financial condition. The actions taken to date, or that may be taken in the future, may have a similar or greater adverse impact on the Companys
employees morale and productivity. We could experience voluntary termination by key technical and sales employees and, as a result, the future competitiveness of the Companys products and business, and the future results of the
Companys operations may be materially negatively impacted and we may be unable to react to market changes in a timely fashion.



The Companys stock has experienced and may continue to undergo extreme market price and volume fluctuations.



Stock markets in general, and the Nasdaq Stock Market in particular, have
experienced extreme price and volume fluctuations, especially in recent years. Broad market fluctuations of this type may adversely affect the market price of the Companys ADSs. The stock prices for many companies in the technology sector have
experienced wide fluctuations that often have been unrelated to their operating performance. The market price of the Companys stock has experienced, and may continue to undergo, extreme fluctuations due to a variety of factors, including, but
not limited to:



| |  | general and industry-specific business, economic and market conditions
| | - | ----------------------------------------------------------------------



| |  | actual or anticipated fluctuations in operating results, including as a result of any impairment of goodwill related to the Companys past acquisitions
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | changes in or the Companys failure to meet analysts or investors estimates or expectations
| | - | ---------------------------------------------------------------------------------------------



| |  | public announcements concerning us, including announcements of litigation
| | - | -------------------------------------------------------------------------



| |  | introductions of new products or services, technological innovations or announcements of significant contracts by us or the Companys competitors
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  | acquisitions, strategic partnerships, joint ventures, or capital commitments by us or the Companys competitors
| | - | ---------------------------------------------------------------------------------------------------------------



| |  | adverse developments in patent or other proprietary rights
| | - | ----------------------------------------------------------



We historically derived a significant amount of the Companys revenues from a limited number of customers.



A significant percentage of the Companys revenue historically has been
derived from a limited number of the Companys customers, primarily customers for the Companys point-of-sale products. Approximately 29% of the Companys total revenue for the three months ended January 31, 2004, was attributable to
the Companys three largest customers in the quarter. In fiscal 2004, 14% of the Companys fiscal year total revenue was attributable to the Companys three largest customers. Historically German customers for the Companys
point-of-sale products were primarily the Companys largest customers. As a result of the German economic slowdown, the Companys product revenue in fiscal 2003 and fiscal 2004 was materially adversely impacted by a reduction in sales to
the Companys three largest customers, all of whom were German and who, in the fiscal year ended January 31, 2002 accounted for 26% of total revenue. The future loss of any major customer, or any reduction or delay in orders by any major
customer, could have a similar material adverse effect on the Companys business, financial condition and results of operations.



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The Companys success depends on the Companys ability to manage and expand the
Companys software direct sales force.



We have sold
the Companys software products almost exclusively through the Companys direct sales force. The Companys future revenue growth will depend in large part on the Companys ability to recruit, train and manage additional software
sales personnel worldwide and generate increased sales productivity from the Companys existing sales force. We have experienced and continue to experience difficulty in recruiting qualified software sales personnel with relevant experience,
particularly in the United States, and the market for these personnel is highly competitive. We may not be able to successfully expand the Companys software direct sales force, any expansion of the sales force may not result in increased
revenue and we may fail to increase productivity from the Companys existing sales force. The Companys business and results of operations will be materially adversely affected if we fail to successfully expand the Companys software
direct sales force or if we fail to increase productivity from the Companys existing software sales force.



We have incurred losses during the Companys operating history. These losses may continue for the foreseeable future, and we may not achieve or
maintain profitability.



We incurred net losses of US$3.2
million in fiscal year 2004, US$44.8 million in fiscal year 2003, US$100.0 million in fiscal year 2002 and US$32.6 million in fiscal year 2001. We may continue to incur losses on both a quarterly and annual basis. Moreover, we expect to continue to
incur significant costs of services and substantial operating expenses. Therefore, we will need to significantly increase the Companys revenues to achieve and maintain profitability and a positive cash flow. We may not be able to generate
sufficient revenues to achieve profitability.



The
Companys declining cash balance and low stock price may affect the Companys potential and current customers and partners perception of the Companys viability, which in turn could affect the Companys ability to
close sales and partnership transactions. Notwithstanding the fact that we have a substantial cash balance, concerns about the Companys perceived financial viability were a factor in multiple potential and actual customer transactions and
partner relationships during fiscal 2003 and fiscal 2004. We attribute these concerns primarily to the following: we are not yet profitable and thus must use the Companys cash balance (offset by revenues) to fund the Companys operations;
the Companys stock price experienced a dramatic decline from 2000 to 2002; the Companys stock price has been, and continues to be, extremely volatile; and some of the Companys competitors are better funded, more established, or
significantly larger than we are.



We will continue to use the
Companys cash balance (offset by revenues) to fund the Companys operations until we achieve profitability (which may not occur); thus, the Companys cash balance declined during fiscal 2004 and may continue to decline during fiscal
2005. Therefore, we expect these concerns about the Companys perceived viability to continue throughout at least fiscal 2005.



Some may claim that we infringe their intellectual property rights, which could result in costly litigation or require us to reengineer or cease sales
of the Companys products.



We believe that the
Companys products do not infringe upon the intellectual property rights of others and that we have all rights necessary to use the intellectual property employed in the Companys business. However, we have not performed patent searches
for all of the technologies encompassed in the Companys products. Third parties may in the future claim that the Companys current or future products infringe their proprietary rights. Any infringement claim, with or without merit, could
result in costly litigation or require us to pay damages, reengineer or cease sales of the Companys products, delay product installments or develop non-infringing intellectual property, any of which could have a material adverse effect on the
Companys business, financial condition, results of operations and prospects. Infringement claims could also require us to enter into royalty or licensing agreements. Licensing agreements, if required, may not be available on terms acceptable
to us or at all.



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New versions and releases of the Companys products may contain errors or defects.



The Companys software products and PoS devices are
complex and, accordingly, may contain undetected errors or failures when first introduced or as new versions are released. This may result in the loss of, or delay in, market acceptance of the Companys products. We have in the past discovered
software errors in the Companys new releases and new products after their introduction. We have experienced delays in release, lost revenues and customer frustration during the period required to correct these errors. We may in the future
discover errors and additional scalability limitations in new releases or new products after the commencement of commercial shipments or be required to compensate customers for such limitations or errors, as a result of which the Companys
business, cash flow, financial condition and results of operations could be materially adversely affected.



The Companys reliance on a sole third party to manufacture the Companys electronic PoS system products involves risks, including, in
particular, reduced control over the manufacturing process and product quality.



The Companys electronic PoS system products are currently manufactured by Plexus Corp. (UK) Limited. Plexus Corp. (UK) Limited purchases many of its products and components from one or a limited number of
suppliers. The Companys reliance on a single outsourced manufacturer involves significant risks, including:



| |  | Reduced control over delivery schedules, quality assurance and cost
| | - | -------------------------------------------------------------------



| |  | The potential lack of adequate manufacturing capacity
| | - | -----------------------------------------------------



| |  | The potential misappropriation of the Companys intellectual property
| | - | ---------------------------------------------------------------------



We must make binding forecasts as much as three months in advance of expected delivery dates. If product sales do not meet these forecasts, the
Companys cashflow would be adversely impacted, and the risk that the Companys inventory could become obsolete would increase. If Plexus Corp. (UK) Limited ceases manufacturing the Companys electronic PoS system products or
increases its prices, we may not be able to rapidly obtain alternative capacity at a comparable price. Any delay in delivery of products to the Companys customers or any increase in manufacturing costs could have a material adverse effect on
the Companys business and results of operations.



We have
in the past received products that contained defects from the Companys manufacturers. Because we warrant the quality of the Companys electronic PoS system products to the Companys customers, we have been required to repair or
replace defective products at the Companys own expense. This expense has in the past exceeded, and may in the future exceed, the amounts reimbursed to us by the manufacturers.



Any repetition of these or similar problems could have a material adverse effect on the Companys reputation, business
and results of operations.



Increased competition may result
in decreased demand for the Companys products and services, which may result in reduced revenues and gross margins and loss of market share.



The market for electronic payment software and electronic PoS systems is intensely competitive and we expect competition to continue to increase. The
Companys competitors include VeriFone, Ingenico, Hypercom and Thales/Krone for the Companys electronic PoS system products, and Transaction System Architects, Checkfree and Pega Systems for the Companys software products. Some
competitors in the Companys market have longer operating histories, significantly greater financial, technical, marketing and other resources, greater brand recognition and a larger installed customer base than we do. In addition, the
companies with whom we have strategic relationships could develop products or services, which compete with the Companys products or services. Further, several of the customers who currently use the Companys products or the public
companies with whom we have entered into strategic relationships to use and market the Companys products may develop competing products. Growing competition may result in reduced revenues and gross margins and loss of market



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share, any one of which could have a material adverse effect on the Companys business, financial condition and results of operations. In addition,
current and potential competitors may make strategic acquisitions or establish cooperative relationships to expand their product offerings and to offer more comprehensive solutions. We also expect to face additional competition as other established
and emerging companies enter the market for electronic payment or funds management solutions.



We face risks associated with the Companys international operations that could harm the Companys financial condition and results of operations.



Historically, a significant percentage of the Companys revenues has
been generated by the Companys international operations, and the Companys future growth rates and success are in part dependent on continued growth and success in international markets. We expect this trend to continue.



As is the case with most international operations, the success and
profitability of the Companys international operations are subject to numerous risks and uncertainties that include, in addition to the risks the Companys business as a whole faces, the following:



| |  | difficulties in travel due to war or health warnings, such as SARS, preventing free movement of our employees to existing and potential customer sites
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | differing regulatory and industry standards and certification requirements
| | - | --------------------------------------------------------------------------



| |  | the complexities of foreign tax jurisdictions
| | - | ---------------------------------------------



| |  | reduced protection for intellectual property rights in some countries
| | - | ---------------------------------------------------------------------



| |  | currency exchange rate fluctuations
| | - | -----------------------------------



| |  | import or export licensing requirements
| | - | ---------------------------------------



For example, in the three month period ended January 31, 2003, our revenue was adversely impacted by the war on Iraq as we were unable to fulfill a customer contract in
the Middle East.



We depend on a few key personnel to manage
and operate us.



The Companys success is largely
dependent on the personal efforts and abilities of the Companys senior management. Following headcount reductions in fiscal 2003 and fiscal 2004, the Company has reduced the number of executives and is more dependent for its future success on
the remaining executives. The loss of certain members of the Companys senior management, including the Companys chief executive officer and chief financial officer, could have a material adverse effect on the Companys business and
prospects.



Following headcount reductions in fiscal 2002,
fiscal 2003 and fiscal 2004, the Companys success is also dependent on some remaining key employees who are skilled in e-commerce, payment, funds management, payment reconciliation, exception and risk management, Internet and other
technologies. The loss of these key individuals could have a material adverse effect on the Companys business.



If we are unable to retain and attract highly skilled personnel with experience in the electronic payment and banking industries, we may be unable to
grow the Companys business.



We are dependent upon
the ability to attract and hire when necessary as well as train and retain those highly skilled technical, sales and marketing, software engineers, support personnel and other highly skilled personnel with knowledge in e-commerce, payment, funds
management, payment reconciliation, exception and risk management, Internet and other technologies we currently employ. Competition for experienced qualified personnel is intense. As a result we may experience increased compensation costs that may
not be offset through either improved productivity or higher sales prices. There can be no assurances that we will be successful in



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retaining existing personnel or in attracting and recruiting experienced qualified personnel. Based on the Companys experience, it takes an average of
nine months for a salesperson to become fully productive. We may not be successful in increasing the productivity of the Companys sales personnel, and the failure to do so could have a material adverse effect on the Companys business,
operating results and financial condition.



The standards
for electronic commerce payment transactions that we support may not achieve broad market acceptance or market acceptance may be slower than anticipated.



An important aspect of the Companys business strategy is to continue to develop software products that support approved security standards for
payment card transactions over the Internet. In the period from 1996 to 2000, Trintech invested significantly in providing support for the SET standard in its products, but this standard has not gained critical mass for adoption. Trintech continues
to support the SSL standard that is commonly in use in the payments industry.



The emergence of the new 3-D Secure protocol is an important new development, which is approved by VISA in its Verified by Visa initiative and by MasterCard in its SecureCode initiative. Trintech is providing support
for the 3-D Secure protocol in its financial transaction processor acquiring products, and may do so in other products where market opportunities are identified. However, the rate of adoption of the 3-D Secure standardand its optional
extensions for chip, mobile commerce and voice messagingis unknown. Future sales of the Companys e-payment products may be adversely affected if these standards do not achieve board market acceptance.



In addition, the Companys electronic PoS system products support the
DES, Triple DES and RSA Security public key security algorithms to meet the security standards required by the Companys customers. If the Companys customers security standard requirements were to change unexpectedly this could
adversely affect the Companys prospects and results of operations.



Some of the Companys software products are relatively new to market and in the early stages of adoption, continued adoption of the Companys products is not assured.



Some of the Companys software solutions are still in early stages of
adoption, and any unanticipated performance problems or bugs that we have not been able to detect could result in additional development costs, diversion of technical and other resources from the Companys other development efforts, negative
publicity regarding us and the Companys products, harm to the Companys customer relationships and exposure to potential liability claims. In addition, if our products do not enjoy wide commercial success and product acceptance and
adoption is sluggish the Companys long-term business strategy will be adversely affected.



The Companys growth may be limited if we fail to build an indirect sales channel.



Indirect sales channels accounted for approximately 4% of the Companys
total revenue in fiscal 2003 and 5% of the Companys total revenue in fiscal 2004. We have established relationships with a limited number of resellers and systems integrators and consultants. Some of these are new, early-stage relationships
and, as such, are generally untested and many historical relationships have been unsuccessful due to the economic downturn, particularly those channels focussed on the market for electronic payments for internet payment transactions. The
Companys existing indirect channels will have to generate significant revenue moving forward, and we will need to establish additional indirect channels to be successful.



We may be unable to protect the Companys proprietary rights. Unauthorized use of the Companys technology may
result in development of products which compete with the Companys products.



The Companys success depends in part on the Companys ability to protect the Companys rights in the Companys electronic payment and PoS system technology. We rely upon a combination of patents,
contractual



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rights, trade secrets, copyright laws and trademarks to establish and protect these rights. We also seek to avoid disclosure of the Companys trade
secrets through a number of other means, including entering into confidentiality agreements with the Companys employees, consultants and third parties to seek to limit and protect the distribution of the Companys proprietary information
regarding this technology. However, we cannot assure you that any of the Companys proprietary rights with respect to the Companys products will be effective, particularly products acquired through acquisition. Unauthorized parties may
copy aspects of the Companys products and obtain and use information that we regard as proprietary. Other parties may breach confidentiality agreements and other protective contracts we have executed. We may not become aware of, or have
adequate remedies in the event of, a breach.



The
Companys industry and the Companys customers industry are subject to government regulations that could limit the Companys ability to market the Companys products.



The Companys current and prospective customers include non-U.S. and
state and federally chartered banks and savings and loan associations. These customers, as well as customers in other industries that we plan to target in the future, operate in markets that are subject to extensive and complex regulation. While we
are not directly subject to this regulation, the Companys products and services must be designed to work within the extensive and evolving regulatory constraints under which the Companys customers operate. If the Companys products
fail to comply with regulations applicable to the Companys customers, or if we cannot timely and cost-effectively respond to changes in the regulatory environments of each of the Companys customers, the Companys product sales could
be materially adversely affected, which could have a material adverse effect on the Companys business, prospects and results of operations.



Exports of software products utilizing encryption technology are generally restricted by the U.S., Irish, German and various other foreign governments.
The Companys inability to obtain and maintain required approvals under these regulations could adversely affect the Companys ability to sell the Companys products. Also, U.S., Irish, German or other foreign legislation or
regulations may further limit levels of encryption or authentication technology that may be sold or exported. Any export restrictions of this sort, new legislation or regulations, or increased costs of compliance could have a material adverse effect
on the Companys business, results of operations and prospects.



The Companys electronic PoS system products must comply with standards established by telecommunications authorities in various countries, as well as with recommendations of quasi-regulatory authorities and standards-setting
committees. Failure to comply with these standards and recommendations could limit the Companys ability to sell these products.



We rely on strategic relationships that may not continue in the future.



We have developed strategic relationships with larger, public companies. Historically, we have relied in part on these
relationships to co-market the Companys products and generate leads for the Companys direct sales force, particularly in the market for electronic payment solutions for Internet payment transactions. However, these relationships are not
exclusive, and the third party generally is not obligated to market the Companys products or provide leads. We will need to establish additional strategic relationships to be successful.



The rights of shareholders in Irish corporations may be more limited than
the rights of shareholders in United States and German corporations.



The rights of holders of ordinary shares and, therefore, some of the rights of ADS holders, are governed by Irish law and the laws of the European Union. As a result, the rights of the Companys shareholders
differ from, and may be more limited than, the rights of shareholders in typical United States or German corporations. In particular, Irish law significantly limits the circumstances under which shareholders of Irish corporations may bring
derivative actions.



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The Companys three largest shareholders have the ability to significantly influence or control
corporate actions, which limits the ability of the holders of the Companys ADSs to influence or control corporate actions. This concentration of ownership also can reduce the market price of the Companys ADSs.



The Companys three largest shareholders have the ability to
significantly influence the election of directors and the outcome of all corporate actions requiring shareholder approval. This concentration of ownership also may have the effect of delaying or preventing a change in control of us, which in turn
could reduce the market price of the Companys ADSs.



The Companys corporate tax rate may increase, which could adversely impact the Companys cash flow, financial condition and results of operations.



We currently have operations in the Republic of Ireland and may generate a significant portion of the Companys future
taxable income there. Currently, some of the Companys Irish subsidiaries are taxed at rates substantially lower than U.S. or German tax rates. If the Companys Irish subsidiaries were no longer to qualify for these lower tax rates or if
the applicable tax laws were rescinded or changed, the Companys operating results could be materially adversely affected. In addition, if German, U.S. or other foreign tax authorities were to change applicable tax laws or successfully
challenge the manner in which the Companys subsidiaries profits are currently recognized, or if the Companys ability to offset historical losses against future profits, if they occur, was reduced, the Companys taxes could
increase, and the Companys business, cash flow, financial condition and results of operations could be materially adversely affected.



The German takeover code, the Companys articles of association and Irish law may make an acquisition of us more difficult, which could affect the
trading price of the Companys ADSs.



As required by
the Neuer Markt, and later by the Frankfurt Stock Exchange Prime Standard (Regulated Market), we have adopted the takeover code recommended by the Stock Exchange Expert Commission at the German Federal Ministry of Finance. Although this takeover
code does not have the force of law, it is generally required by the Frankfurt Stock Exchange that companies listed on the Frankfurt Stock Exchange acknowledge these takeover provisions. The applicability of the takeover code, as well as provisions
of the Companys articles of association and Irish law, could delay, defer or prevent a change of control of us, which in turn could reduce the market price of the Companys ADSs. In addition, the rights of the Companys shareholders
under the takeover code could differ from the rights of shareholders under the United States federal and state laws governing tender offers and takeovers.



We could be subject to potential product liability claims and third party liability claims related to products and services.



The Companys electronic payment software products are used for the
processing of payment card transactions. Any errors, defects or other performance problems could result in financial or other damages to the Companys customers. A product liability claim brought against us, even if not successful, would likely
be time consuming and costly and could seriously harm the Companys business. Although the Companys customer license agreements typically contain provisions designed to limit the Companys exposure to product liability claims,
existing or future laws or unfavorable judicial decisions could negate these limitation of liability provisions. The law relating to the liability of providers of listings of products and services sold over the Internet for errors, defects or other
performance problems with respect to those products and services is currently unsettled. Any claims or litigation could still require expenditures in terms of management time and other resources to defend ourselves. Liability of this sort could
require us to implement measures to reduce the Companys exposure to this liability, which may require us, among other things, to expend substantial resources or to discontinue certain product or service offerings.



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In the future we may need to raise additional capital in order to remain competitive in the market for
electronic payment solutions and funds management software. This capital may not be available on acceptable terms, if at all.



We believe that the Companys existing cash and cash equivalents and the Companys anticipated cash flow from operations will be sufficient to
meet the Companys working capital and operating resource expenditure requirements for at least the next year. After that, we may need to raise additional funds and we cannot be certain that we will be able to obtain additional financing on
favorable terms, if at all. If we cannot raise funds on acceptable terms, if and when needed, we may not be able to develop or enhance the Companys products and services, take advantage of future opportunities, grow the Companys business
or respond to competitive pressures or unanticipated requirements, which could seriously harm the Companys business.



We depend on increasing use of the Internet and on the growth of electronic business. If the use of the Internet and electronic business do not grow as
anticipated, the Companys business may be materially adversely impacted.



The Companys business in part depends on the increased acceptance and use of the Internet and wireless networks as a medium of commerce and communication. Rapid growth in the use of the Internet and wireless
networks is a recent phenomenon.



As a result, acceptance and
use may not continue to develop at historical rates and a sufficiently broad base of business customers may not adopt or continue to use the Internet and wireless networks as a business medium. Demand for some of the Companys products, such as
PayWare Resolve may be materially impacted if a sufficiently broad base of business customers does not continue to use the internet and wireless networks as a business medium.



Item 4.Information on the Company



A. History and Development of the Company



We
were incorporated as a limited liability company under the laws of the Republic of Ireland in 1987. On August 23, 1999, the Companys shareholders resolved by special resolution to re-register us as a public limited company. The Companys
registered office and principal place of business is Trintech Building, South County Business Park, Leopardstown, Dublin 18, Ireland. The Companys telephone number at that address is +353 1 2074000.



During fiscal 2002, 2003 and 2004 we invested US$2,849,000, US$283,000 and
US$605,000 respectively, for the purchase of furniture, fixtures and equipment, and for further investment in our management information systems.



B. Business Overview



We are a leading provider of secure payment infrastructure and transaction management solutions globally. We develop, market and sell a comprehensive
suite of software and electronic PoS systems that enable electronic payments in multiple channels from traditional to internet channels. We also develop, market and sell a comprehensive suite of transaction management software products and services
which allow our customers to perform account reconciliation and risk management functions for their receipts and payments transactions.



We offer vendor-neutral, open software solutions that provide highly secure solutions for the Companys customers. The Companys customers
include banks, card associations, financial transaction processors and merchants in major markets including the United States, the United Kingdom, Europe and South America. Through the Companys portfolio of feature-rich software products and
electronic PoS systems, we offer solutions for use by banks, financial transaction processors, merchants and businesses. The Companys comprehensive suite of software and electronic PoS system products enable secure end-to-end payment solutions
to automate the entire payment transaction management process.



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The Payment Industry



The payment industry has rapidly grown throughout the world since the 1970s when banks and merchants first began to
encourage widespread use of credit cards and other forms of cashless payment by consumers. Use of these cards has increased significantly: first at the countertop in a merchants store, and later through mail order, telephone order and via the
Internet. In addition, the introduction of payment card alternatives, such as chip-based smart cards, prepay and debit cards has further fueled both the use of payment cards and the overall growth of the payment industry.



Due to the increasing use of the Internet for a broad range of
business-to-business and business-to-consumer activities, electronic retailers (e-tailers) began to compete with real-world retailers for their customers and real world merchants have expanded their delivery channels to embrace the Internet. The
global acceptance of payment cards and the convenience they provide facilitate business-to-consumer and business-to-business commerce in the physical world and over the Internet. With the emergence of e-payment, financial institutions, merchants and
consumers have recognized the need for secure software solutions to mitigate fraud, manage disputed transactions, reconcile accounts and improve the overall efficiency of payment card transaction processing. Additionally, the increased globalization
of e-commerce presents payment challenges, such as translation adjustments for multi-currency transactions and the ability to bill cardholders in the currency of their choice.



To mitigate the risk of fraud, demand is growing for chip-based card payment systems as an alternative to traditional
magnetic swipe cards. The introduction of chip cards is expected, by the payment industry, to significantly reduce the risk of counterfeiting. This coincides with the introduction of personal identification number (PIN) rather than signature for
card holder validations. The major card schemes including VISA and MasterCard have introduced mandates to drive chip and PIN migration. Chip and PIN migration is leading to upgrading of retail payment systems as well as creating demand for
unattended payment systems, primarily in Europe. In the EU region, this mandate will become effective in January 2005.



The growth of pre-paid accounts has led to the introduction of consumer products such as stored value payment cards, pre-paid gift cards, and mobile
pre-payment. Indeed the growth of this market has coincided with the growth and relative maturity of the mobile phone market. Originally, mobile pre-payment (or top-up) was necessary to allow mobile carriers to capture customers who did not have
good credit standing. However, as the market developed, customers began signing up for this service as a means of controlling their spending and for freedom from commitment to a post-pay service. The emergence of electronic gift card solutions has
allowed retailers to significantly reduce their cost of paper handling for traditional gift card products, and to reduce fraud. Electronic gift card products can also increase sales and allow retailer to integrate refund and loyalty functions onto
one platform together with gift cards.



The growth of payment
card transactions and the evolution in the channels of electronic payment, in conjunction with increased risk of payment card fraud, has driven the need for more comprehensive, secure and effective hardware and software payment products that can
cost-effectively process and manage these transactions.



The Need for Reconciliation



Merchants
accept payments in all forms of currency and tender types, including debit and credit cards, cash and checks, gift certificates and many new forms of payments such as gift cards. Regardless of the payment method, the merchant needs to ensure the
information recorded at the store, point-of-sale, matches up with the deposits that are made at the bank. For companies with multiple depositing locations or high volumes of card transactions, this manual process becomes quite labor intensive. This
results in high costs to the organization, not only in terms of people, but the manual effort is prone to error, and provides no real corporate controls. It also leads to unexplained shortages that are difficult to track, increased idle balances
that are not brought forward for use by the business, and higher fees paid for inefficient bank account structures.



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There is significant cost involved in manual deposit reconciliation:



| |  | It can result in high rates of fraud, larceny and error at the store level (and consequently, unnecessary write-offs)
| | - | ---------------------------------------------------------------------------------------------------------------------



| |  | There is low productivity due to the manual nature of the process
| | - | -----------------------------------------------------------------



| |  | It is typically unable to quickly identify and resolve credit card/cash deposit discrepancies
| | - | ---------------------------------------------------------------------------------------------



| |  | Fraud prevention is a slow process
| | - | ----------------------------------



| |  | Risk management/management control: it provides no real historical data or trend analysis
| | - | -----------------------------------------------------------------------------------------



| |  | It results in high bank fees as manual reconciliation does not easily identify opportunities for bank consolidation
| | - | -------------------------------------------------------------------------------------------------------------------



| |  | The sheer number of possible matches in an account with 80-100 stores prevents timely reconciliation
| | - | ----------------------------------------------------------------------------------------------------



| |  | Single store accounts mean high bank fees compared to consolidated accounts as the company can get volume discounts
| | - | -------------------------------------------------------------------------------------------------------------------



| |  | Manual reconciliation can make it very difficult/costly for a company to scale its operations: if they want to add sites, they need to account for extra staff for this process
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition to deposit verification many
merchants also have other reconciliation needs that are less critical to their top line revenue but need to be performed to ensure financial control and reduce operational risk. These types of reconciliation include: disbursed checks versus
presented checks and invoices to payments.



The Need for
Security and Authentication



Losses incurred as a
result of payment card fraud can hit the bottom-line profitability of banks through administrative costs and charge-offs. For physical world PoS transactions, the use of chip and PIN are being mandated by the card associations within individual
regions to combat counterfeit cards. We believe that the higher incidence of fraud and repudiation in Internet transactions is primarily caused by inadequate consumer authentication and identity verification measures, inadequate merchant
authentication and verification measures, and lack of security shielding and encryption within databases which contain sensitive consumer or payment data.



The Need for Dispute Management



Disputes arise when a cardholder does not accept some item on his statement for any reason. A dispute becomes a chargeback when the card issuer initiates
a dispute procedure through its card scheme, having determined that a transaction may be invalid for any of a number of reasons. There are three main types of payment disputes that may give rise to a chargeback(i) the cardholder does not
recognize the transaction, (ii) the cardholder asserts that they did not carry out the transaction, and (iii) the cardholder has a problem with a transaction that they did carry out. All three may require different actions to be carried out by the
issuing bank.



The traffic between the issuer and the financial
transaction processor (acquirer) during the chargeback dispute process is in the form of electronic transactions which, just like normal transactions, are transmitted through the relevant payment system network. In some cases, either party may also
need to send specified items of documentation in addition to these electronic transactions. There are typically low levels of automation in dispute management and the cost of processing chargebacks can be significant. Also, banks may be faced with
writing off the value of a dispute if it has not been processed correctly or within the time period specified by the card scheme. Particularly for high volume issuers and acquirers, the use of systems that provide automation, decision support,
compliance with card scheme regulations, and document management is critical to reduce and control processing costs and maintain quality customer service levels.



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The Need for Electronic Gift Cards



Since 1997, sales of gift cards in the U.S. have grown 15 percent to 35
percent annually, with 2003 sales estimated at US$45 billion, according to a Bain & Company study. As demand for gift cards continue to grow, many retailers, especially in Europe, are now evaluating the operational costs of their current paper
based systems and are seeking cost efficiency by migrating to electronic gift card processing. In addition, retailers with existing out-sourced electronic gift card solutions are also evaluating their per transaction based fee structures and the
alternative cost benefits of migrating to in-house gift card programs with additional customer benefits.



The Trintech Solution



We are a leading provider of secure payment infrastructure and transaction management solutions globally. The following characteristics of the
Companys solutions enable us to deliver key competitive advantages to the Companys customers:



Comprehensive Functionality. The Companys payment and transaction management solutions have been designed for scalability and operate in
multi-currency, multi-taxation, multi-payment protocol and complex communication environments. We are one of the few vendors to offer integrated secure e-payment solutions that allow customers to process transactions in the physical world and over
the Internet as well as secure transaction management solutions to manage all types of receipts and payments.



Flexible Range of Solutions.The Companys suite of products provides flexible payment and transaction management solutions for banks,
financial transaction processors, merchants and businesses. The Companys products are designed to be modular, permitting them to interoperate with payment products and enterprise software solutions of other vendors. Alternatively, by offering
the Companys products as an integrated end-to-end payment solution, we also provide a complete cost-effective solution for the Companys customers.



Secure Technology. The Companys products have been developed using innovative, robust, cryptographic technologies. Our various products
incorporate security algorithms including DES, Triple DES and RSA private/public key and other advanced proprietary algorithms. Where appropriate, the Companys e-commerce products support the SET, SSL and the 3-D Secure standards. As well as
supporting card scheme standards, we have also developed solutions to add further security beyond the levels mandated by the card schemes for payment transactions.



Open Systems Architecture. The Companys open architecture design supports a wide variety of operating systems,
databases and enterprise software applications. The Companys software solutions for banks, financial transaction processors and merchants have been developed for Windows, Linux and UNIX operating systems and Oracle and Microsoft databases. The
Companys technology approach facilitates integration with existing hardware and software systems. In addition, the Companys software products are vendor neutral and are designed to interface with e-payment hardware and software products
of third-party vendors, including IBM, Oracle, Microsoft and SAP.



Expertise in the Secure Payment and Transaction Management Industries. We believe the Companys 17 plus years of experience in both the payments and transaction management industries has enabled us to develop sophisticated
solutions for enabling secure payment transactions in the physical world and over the Internet as well as sophisticated solutions for the management of payment transactions, including card based payments, checks and cash based payments. We also
believe that this industry focus has enabled us to develop strong and close relationships our customers, banks and other service providers in the industry.



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Trintechs Growth Strategy



The Companys mission is to be a leading worldwide provider of secure
payment infrastructure and transaction management solutions. The key components of the Companys strategy are:



Leverage Multi-Channel Payment Expertise. We will continue to invest and build on the Companys 17 plus years of experience in developing
innovative, secure payment and transaction management solutions for markets where we believe we can leverage our existing product set. The major focus of our development efforts are in enhancing the functionality and use of our existing products
set. In fiscal 2004 we also released a number of new products, including the launch of our statement delivery service. To expand our market share for statement delivery services, we acquired DataFlow Services in November 2003.



Maintain the Companys Focus on Customer Service.We have a large
existing customer base and we work hard to ensure that they are satisfied with the solution they have licensed and the service we provide. We leverage the Companys existing customer base by introducing them to additional Trintech products
across a range of payment channels. We are working to grow the Companys customer base worldwide and plan to maximize the potential of this customer base by pursuing a cross-selling and up-selling strategy.



Extend Early Lead in Secure E-Payment and Transaction Management
Software. We were one of the first software companies to adopt both the SET, SSL and EMV standards for e-payment. We intend to continue to extend the Companys range of security products and support new e-payment standards and Internet
technologies, including Verified by Visa, SecureCode and wireless access technologies, as commercial opportunities for new standards emerge.



Continue to Build Strategic Relationships and Expand Channels of Distribution Globally.We have strategic relationships and distribution agreements
with a number of companies including eFunds International, Sterling Commerce, FiservFreedom and International Turnkey Systems. These relationships have provided a number of competitive advantages, including access to product development plans,
joint marketing opportunities and referral lead-generation for the Companys direct sales force as well as sales made directly by the Companys partners. We intend to continue to enter into development, marketing and distribution alliances
to produce, promote and distribute the Companys solutions for specific market segments.



Build Strong Brand Recognition. We are a leading brand name, with Trintech PayWare , in the payment and transaction management industry and believe that we are benefiting from the Companys early industry presence. The
Companys strategy is to promote and strengthen the Companys brand equity and visibility through excellent service and a variety of marketing and promotional campaigns. We plan to continue to invest in the Companys on-line marketing
programs, such as PinPad.co.uk and epaynews.com, an award-winning site for information and trends related to the payments industry.



Trintech Products



The Companys products are designed to provide flexible, vendor neutral, secure payment and transaction management solutions for banks, financial
transaction processors, merchants and businesses. The Companys products can be deployed on a stand-alone basis, combined with each other to provide an end-to-end secure solution, or integrated with third party products. In addition, the
Companys products support a broad range of communication protocols and security standards. The Companys products also support multiple currencies, languages and payment protocols. In connection with the license of the Companys
products, we provide a range of support services to the Companys customers including preventative maintenance, compliance, upgrades, site inspections and 24-hour telephone and on-line support.



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##### Table of Contents

All of the Companys products are sold under the PayWare brand. Within the PayWare suite of
products, the following table summarizes the Companys significant product lines and the associated target customer base.



|                                                                                                                                             |  |                                                                                                                                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Product Line                                                                                                                                 |  | Target Customer Base                                                                                                                                                                                                                                
|                                                                                                                                             | 
|PayWare Resolve PayWare CMS Issuer PayWare CMS Acquirer PayWare Acquirer PayWare GiftCard                                                    |  | Any business that processes and services payment card based transactions or issues on-line payment cards including banks, financial institutions, payment service providers, Internet or commerce
service providers and telecommunication companies.
|                                                                                                                                             | 
|PayWare Merchant PayWare ReconNET PayWare PrePay PayWare SmartPIN Compact PoS Systems and PinPads Smart 5000 OpenPay 3000 Series PayWare EMS |  | Any business selling goods or services that accepts payment cards including merchants, payment service providers, Internet or commerce service providers, telecommunication companies and online
purchasers.                                        
|                                                                                                                                             | 
|PayWare TNS (Transaction Network Services)                                                                                                   |  | Any business seeking to automate the retrieval of transaction data in normally delivered in bank statements.                                                                                                                                        



Financial
Institution and Payment Service Provider Focussed Products



PayWare Resolve, PayWare CMS, PayWare Acquirer and PayWare Issuer are primarily used by banks and financial transaction processors. This product suite supports the payment transaction processing needs of both the merchants bank and
the cardholders bank. It uses scalable and interoperable payment architecture for Windows and UNIX platforms and supports modular payment components for specific financial instruments and operating environments. This product suite provides
financial institutions with the ability to issue on-line payment cards, capture and process card-based e-payment transactions and manage and resolve disputed payment card transactions in both the physical world and over the Internet. The principal
products sold by us to banks and financial transaction processors are:



| |  | PayWare Resolve is a family of products that help automate payment dispute resolution. The products combine a powerful decision-support engine using card association
Operating Regulations for chargeback processing with built-in workflow technology. The PayWare Resolve Suite provides the following functionality:
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | built-in knowledge of national and international chargeback regulations
| | - | -----------------------------------------------------------------------



| |  | workflow management and financial control
| | - | -----------------------------------------



| |  | automated chargeback documentation
| | - | ----------------------------------



| |  | management control/risk management
| | - | ----------------------------------



| |  | PayWare CMS Issuerprovides card issuers with an integrated card management system with back office processing and supports multiple payment instruments. PayWare CMS
Issuer provides the following functionality:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | management of physical card issuance programs
| | - | ---------------------------------------------



| |  | accounting for and management of cardholder transactions
| | - | --------------------------------------------------------



| |  | management tools allowing card issuers to manage the risk profile of their portfolio
| | - | ------------------------------------------------------------------------------------



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| |  | PayWare CMS Acquirerprovides merchant acquirers/processors with a back office merchant accounting, settlement and management system and supports multiple payment
instruments. PayWare CMS Acquirer provides the following functionality:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | flexible, customized management of merchant accounts
| | - | ----------------------------------------------------



| |  | accounting for and management of merchant transactions
| | - | ------------------------------------------------------



| |  | PayWare Acquirer is a secure integrated payment gateway and a hosted merchant PoS payment engine. It provides financial institutions and payment service providers with
the functionality required to authorize, capture, route, settle and bill payment card transactions in both the physical and virtual world. PayWare Acquirer supports multiple payment instruments and the latest card association authentication
protocols. The products core capabilities include:
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | transaction authorization functionality using a choice of protocols
| | - | -------------------------------------------------------------------



| |  | data capture functionality using a choice of protocols
| | - | ------------------------------------------------------



| |  | value added services such as multi-currency acquiring services, storefront integration and browser based transaction management tool
| | - | ------------------------------------------------------------------------------------------------------------------------------------



| |  | remote deployment, update and configuration of merchant applications
| | - | --------------------------------------------------------------------



| |  | support and implementation of key security protocols
| | - | ----------------------------------------------------



| |  | PayWare GiftCard is an electronic gift card solution that enables retailers and specialist gift card providers to take control of their gift card program. The
products core capabilities include:
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | PayWare GiftCard is a comprehensive gift card management system designed to enable retailers and specialist gift card providers to design, launch and operate an end-to-end
electronic gift card program in-house.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | A variety of innovative products can be designed including gift cards, corporate incentive cards, wedding list cards and employee bonus cards. With a broad range of configurable
parameters and an easy to use interface, PayWare GiftCard helps retailers to design unique gift card products both quickly and easily.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | As an in-house electronic gift card solution, PayWare GiftCard gives retailers more control over their customer information, greater flexibility over the variety of programs they
can offer and a return on investment superior to either paper-based gift certificates or outsourced electronic gift cards.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Merchant Focussed Solutions



The Companys solutions for the merchant market are designed to meet requirements for accepting payments and processing transactions in a variety of
merchant environments including retail, call centers, mail order and on the Internet as well as provide transaction management solutions for all types of payment transactions, including card-based, check and cash payments.



The Companys PayWare suite of products for the merchant market
includes:



| |  | PayWare Merchantis a comprehensive card payment server solution that allows merchants to accept card payments through electronic-point-of-sale systems, call centers
and the Internet. It contains the following functionality:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | rapid online authorization and automatic settlement
| | - | ---------------------------------------------------



| |  | EMV chip and PIN processing
| | - | ---------------------------



| |  | secure monitoring and reporting
| | - | -------------------------------



| |  | scalable, resilient and fault tolerant
| | - | --------------------------------------



| |  | supports multicurrency including dynamic currency conversion (DCC)
| | - | ------------------------------------------------------------------



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| |  | PayWare ReconNET provides a comprehensive transaction management, account reconciliation and risk management solution for merchants, banks and financial service
providers. Merchants accept payments in all forms of currency and tender types, including debit and credit cards, cash and checks, gift certificates and many new forms of payments such as gift cards. Regardless of the payment method, the merchant
needs to ensure the information recorded at the store, point-of-sale, matches up with the deposits that are made at the bank. This system streamlines the identification, workflow management and resolution of financial transaction exceptions. This
includes the reconciliation and exception management of disbursements, suspense accounts, lock box, etc. It also allows customers to audit and manage their bank fee expense through our Bank Fee Analysis module.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | PayWare TNS ( Transaction Network Service) automates the retrieval, processing, aggregation and delivery of all transaction data in daily bank statements. This enables
merchants to securely access validated critical financial transaction data from over 1,000 US banks. This product was acquired as part of the acquisition of DataFlow Services in November 2003. Trintech migrated its pre-existing customers for
Statement Delivery Services to the acquired product.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | PayWare PrePay enables electronic pre-pay or top-up for a subscriber account and can be used for cellular pre-pay, long distance calling cards, pre-paid payment cards,
utility and housing payments and gift/online stored value cards. This product is designed to allow merchants and telecommunications operators to reduce their costs of distributing top-up vouchers and allow for the management of customer accounts
electronically. It provides the following functionality:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | fully configurable to support a range of top-up transaction types (On-line / Off-line PIN)
| | - | ------------------------------------------------------------------------------------------



| |  | comprehensive transaction analysis and reporting
| | - | ------------------------------------------------



| |  | credit checking/ merchant balance handling
| | - | ------------------------------------------



| |  | handles multiple network operators
| | - | ----------------------------------



| |  | PayWare SmartPIN is a comprehensive solution that enables retailers to accept EMV Chip and PIN cards at point-of-sale. This comprehensive solution comprises a number
of components including PoS hardware, integration tools, estate management systems (EMS) and payment authorization software. Key features of this solution are:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | certified by EMV, VISA PED and ZKA
| | - | ----------------------------------



| |  | caters for point-of-sale, unattended and wireless environments
| | - | --------------------------------------------------------------



| |  | easy integration with retailer PoS systems
| | - | ------------------------------------------



PoS Terminals and PIN Pads



The Companys range of PoS terminals and PIN Pads enable retailers to accept payments at point-of-sale. Trintech PoS terminals capture magnetic swipe
and chip-based card payments as well as prepay and gift card transactions. PIN Pads allows cardholders to validate themselves by entering a personal identification number (PIN) rather than by signature. Trintech also provides a range of terminal
application software, software development kits (SDK) and an estate management system (EMS) for remote and centralized support of deployed devices. This product line has historically been the foundation of the Companys sales and long-term
relationships with banks, transaction processors and merchants in Germany.



| |  | Compact 9000 range of PoS terminals provides a versatile and secure point-of-sale platform for card payments, prepay and gift cards across a range of retail sectors
either in stand-alone or networked installations. It has a high speed thermal printer and uses a new modular software architecture which facilitates the future deployment of new payment applications. Key features include:
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | large, easy-to-read back-lit graphic display
| | - | --------------------------------------------



| |  | easy-to-use and reliable magnetic swipe card reader
| | - | ---------------------------------------------------



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| |  | smart card reader compliant with international EMV standards
| | - | ------------------------------------------------------------



| |  | high speed processor
| | - | --------------------



| |  | modular software architecture with an easy-load printer
| | - | -------------------------------------------------------



| |  | Compact 9400i GPRSis a recent and significant variant of the Compact 9000 range which uses the GPRS mobile phone network to connect to authorization and payment
hosts. GPRS is fast, reliable and also more cost-effective compared with traditional dial-up communications. This product has also enabled retailers to deploy terminals in locations that have no land line communications such as newsagent stands,
kiosks, snack bars and exhibition stands.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Compact 950-PP is a highly secure PIN Pad with integral chip card reader. It allows retailers to accept chip cards, including international EMV payment cards, and
allows the cardholder validate themselves by entering a PIN number securely. This product supports industry public key encryption standards including DES, Triple DES and RSA. The current model has the following features:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | certified to accept international EMV chip cards
| | - | ------------------------------------------------



| |  | certified to accept a range of national debit and electronic purse schemes
| | - | --------------------------------------------------------------------------



| |  | tamper proof and tamper evidence features to detect manipulation
| | - | ----------------------------------------------------------------



| |  | online and offline PIN verification
| | - | -----------------------------------



| |  | Smart 5000 is a high performance PINPad designed to meet the requirements of chip card acceptance and secure PIN entry and point-of-sale. This device has a card reader
that reads both chip cards and magnetic swipe cards and is designed to meet the needs of retailers who want to handle both traditional magswipe cards and new chip payment cards in the same manner:
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | combined chip and magnetic stripe card reader
| | - | ---------------------------------------------



| |  | certified to accept international EMV chip cards
| | - | ------------------------------------------------



| |  | fast transaction speeds
| | - | -----------------------



| |  | non-proprietary open Linux platform
| | - | -----------------------------------



| |  | approved by VISA and ZKA as being tamper proof
| | - | ----------------------------------------------



| |  | OpenPay 3000 is a range of unattended payment terminals designed to enable payments in a range of unattended environments including: pay-at-pump system, vending
machines, kiosks, parking machines and self-scanning checkouts in retail. At the heart of the OpenPay range is a secure payment module that can be supplied to OEM customers to payment enable a wide range of devices. Key features of OpenPay include:
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | easy integration into new and existing equipment
| | - | ------------------------------------------------



| |  | vandal resistant and weather-proof keyboard
| | - | -------------------------------------------



| |  | flexible and powerful LINUX platform
| | - | ------------------------------------



| |  | certified to accept EMV card payments
| | - | -------------------------------------



| |  | PayWare EMS is a new and comprehensive management system that enables easy remote management of a distributed estate of devices and terminals. It ensures that entire
estates of deployed devices and terminals can be centrally managed and control both the software and configuration on individual devices. PayWare EMS caters for a variety of terminal applications including payment, e-topup, EMV and PIN.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Services



To complement and support the Companys product offerings, we provide the Companys customers with the following
services:



| |  | Consulting services. The Companys consulting team provides comprehensive project management, using sophisticated methodologies and tools to identify customers
business objectives and requirements for e-payment solutions. We implement these solutions with the Companys customers according to mutually agreed plans and milestones. We also provide in-house product consultation, and provide technical
services to design or enhance the Companys customers existing information technology infrastructure.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Educational and training services. We offer educational and training programs targeted specifically at users and administrators of the Companys customers
information technology systems. These programs are tailored to provide customers with the technical knowledge to operate the Companys e-payment solutions. Additionally, seminars and other educational initiatives are available on an ongoing
basis to assist the Companys customers in staying current with advances in the e-payment industry.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Customization and implementation services. We provide customization services to customize or configure the Companys solutions to meet the Companys customers
particular needs and to integrate the Companys products into their other processing, accounting and communications systems. The Companys experienced professional services engineers also perform on-site implementation services to manage,
in conjunction with the Companys customers information technology resources, the implementation of their new systems through the testing and acceptance phases of the overall implementation plan.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Technology



The Companys software solutions incorporate advanced technologies to
address user requirements in todays highly distributed networking environments. The Companys products support high volumes of transactions in a secure, scalable cross-platform environment, combining proven, reliable proprietary payment
technologies with current Internet, operating system and database development tools.



The Companys software is developed using Java, C, C++, COBOL, Power Builder and web programming languages and standards, and incorporates the following features:



| |  | System Architecture. The Companys products are modular in design and flexible in implementation, so that they can be rapidly adapted to address specific customer
requirements. We employ an object oriented systems architecture, allowing us to add and re-use functionality across existing and new products, lowering the Companys product development costs. The Companys modular design can improve the
Companys time to market for new products.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Security and encryption. Due to the sensitive nature of the data handled by the Companys products, we have developed significant expertise in encryption technology.
This infrastructure incorporates advanced security algorithms including DES, Triple DES and RSA private/public key and other advanced proprietary algorithms.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Protocols and infrastructure. It is critical that the Companys products be interoperable with a wide range of payment networks and customer information technology
systems. The Companys products therefore feature advanced application programming interfaces, or APIs, to facilitate interoperability with payment systems and applications. The Companys products also support a variety of communications
protocols, including Internet and telecommunications protocols such as X.25, ISDN and ATM, as well as specific bank authorization and settlement protocols.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Support of widely accepted technologies. The Companys products are configured to run on operating systems and to support databases widely adopted by
the e-payment and transaction management
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | industry. This includes the Linux, Windows and UNIX operating systems and Oracle and Microsoft databases. They are also designed to integrate easily with
enterprise resource planning software systems, such as the SAP R/3 system.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Customers



We
have a customer base of over 1,265 banks, financial transaction processors, card associations, card companies, payment service providers, merchants and technology companies. From inception through January 31, 2004, we had shipped over 230,000
electronic PoS systems and over 8,000 licenses of secure payment and transaction management software. Our top revenue generating customers in fiscal 2004, by customer segment, are as follows:



|                                 |  |                                
|-------------------------------- |  | -------------------------------
|Financial Transaction Processors |  | Merchants                      
|Bank of America                  |  | Next plc                       
|Bankart                          |  | Wilkinsons                     
|Tatra                            |  | Makro SSW Ltd                  
|Citibank                         |  | Whitbread Group plc            
|Halifax Bank of Scotland         |  | The Vanguard Group             
|Woolwich Plc                     |  | Cingular Wireless              
|Telekurs Card Solutions          |  | 7-Eleven                       
|                                 |  | Micros Fidelio                 
|                                 | 
|PrePay Processors                |  | Point-of-sale Processors       
|EVS GmbH                         |  | ADT Secured Payments           
|Pre Solutions                    |  | Fiducia Cash                   
|Post TS (eCommercell)            |  | Deutsche Verkehrs Bank Zentrale
|Pay Center BV                    |  | Symbol Technologies            



Sales and
Marketing



The Companys sales and marketing
efforts are targeted at three principal regions:



| |  | Europe, Middle East and Africa,
| | - | -------------------------------



| |  | North and South America, and
| | - | ----------------------------



| |  | the Asia-Pacific region
| | - | -----------------------



The Companys principal market is the USA, which represented 44% of the Companys total revenue in fiscal 2004. Historically, the Companys
principal market was Germany, which accounted for 39% of the Companys total revenue in fiscal 2002. Revenue in Germany declined in fiscal 2003 due to the Companys customers experiencing weaker than expected demand from the German retail
sector for PoS solutions as a result of a weakening German economy and a fall off in demand post euro implementation.



The Companys sales strategy for all product lines is to use the Companys direct sales force in conjunction with indirect distribution
channels, such as regional distributors and sector-specific leaders.



Direct Sales Channel



We have direct
sales offices in Dublin, Ireland; Frankfurt, Germany; London, England and Dallas, Texas. These offices coordinate direct sales and manage indirect sales channels in the various regions. Due to the technical nature of the Companys products,
members of the direct sales force are often supported by pre-sales technical support staff who are key to closing sales contracts and winning customer confidence.



The Companys direct sales accounted for approximately 95% of the Companys total revenues in fiscal 2004. At
January 31, 2004, we employed 45 direct sales people who primarily target card associations, banks, financial transaction processors, telecommunications operators and large merchants.



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Indirect Sales Channel Strategy



To further facilitate worldwide market penetration and complement the
Companys direct sales efforts, we have and plan to expand indirect sales channels relationships. These relationships primarily act as referrals for the Companys direct sales force.



We currently have active distribution relationships with eFunds
International, Sterling Commerce, Fiserv- Freedom and Paymentech that we believe offer us a number of competitive advantages. The following describes the Companys current indirect sales channel relationships and the advantages of each:



eFunds International. The Companys current
distribution partnership with eFunds International gives them the non-exclusive right to distribute the Companys PayWare Resolve product in Australia, New Zealand and India. This allows us to indirectly target potential customers in these
countries, where we do not currently have a direct sales presence.



International Turnkey Systems (ITS). The Companys non exclusive reseller agreement with ITS gives them the non-exclusive right to distribute the Companys PayWare Acquirer product in the Middle East. This allows us
to indirectly target customers in the region to support our direct sales effort.



SBCSterling Commerce. The Companys current distribution partnership with SBC gives them the non-exclusive right to distribute PayWare ReconNET (under the rebranded name Vector 
ReconNET) to banks within North America, and allows us to sell to the Sterling Commerce customer base.



FiservFreedom. The Companys current distribution partnership gives Trintech the non-exclusive right to distribute the TRACKER
unclaimed property system within North America. The agreement also includes a sales lead referral arrangement with Fiserv for ReconNET within North America.



Research and Development



We believe that the Companys future success will depend in large part on the Companys ability to enhance and expand the Companys
technologies. We intend to continue to develop innovative payment and transaction management solutions to respond to the needs of the Companys customers in this rapidly changing industry, particularly where we believe we can leverage our
existing product set. We intend to offer products that interoperate with a variety of new and emerging acceptance channels and communication and security protocols. We have developed the Companys products both independently, through the
Companys research and development team, through funded development projects and acquisition. From time to time, we have acquired or licensed technology from third parties.



Each of the Companys development centers has been chosen for its combination of access to global markets, local
product knowledge and the availability of skilled personnel. We have now concentrated research and development in the following centers:



| |  | Dublin, Ireland:electronic PoS systems and payment software including encryption and authentication
| | - | ---------------------------------------------------------------------------------------------------



| |  | Dallas, Texas:transaction management products and services
| | - | ----------------------------------------------------------



| |  | Montevideo, Uruguay: card issuance and card management solutions
| | - | ----------------------------------------------------------------



| |  | London, United Kingdom: mobile phone prepay products and merchant payment software
| | - | ----------------------------------------------------------------------------------



For the year ended January 31, 2004, and January 31, 2003 approximately 19% and 24% of the Companys revenues were
dedicated to research and development expenses respectively. The reduction in research and development expenditure from fiscal 2003 to fiscal 2004 was primarily due to involuntary staff reductions of personnel formerly focussed on developing our
electronic commerce products that had reached technological



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maturity and a reduced investment in products where the market opportunity had not yet developed or the market has not yet expanded due to economic
conditions.



Manufacturing



We outsource the fabrication, testing and packaging of the Companys
electronic PoS system products to Plexus Corp. (UK) Limited, enabling us to concentrate the Companys resources on product design and software development. We believe this eliminates the high cost of owning and operating a manufacturing
facility. The manufacturing facilities for Plexus Corp. (UK) Limited are located in the United Kingdom.



We maintain a manufacturing management team that oversees the manufacture of the products by Plexus Corp. (UK) Limited to ensure that the Companys
specifications are met. These employees have extensive knowledge of the Companys products and expertise in software quality assurance techniques. Members of the team conduct on-site inspections of the manufacturing facilities of the
Companys subcontractor as well as periodic assessments of products shipped by the Companys subcontractor to us. We also participate on beta release teams and provide initial training materials for customer support and service.



Raw Materials



Our third party manufacturer purchases many sophisticated components and
products from one or a limited number of qualified suppliers. Our products utilize industry-standard and semi-custom components and subsystems. While such components are generally available, we have experienced delivery delays from time to time
because of high industry demand or the inability of some vendors to consistently meet our quality or delivery requirements.



Seasonality



Although we do not consider our business to be highly seasonal, we generally experience the greatest demand for our products and services in the last
quarter of the year and also in the last month of each quarter.



Competition



The payment and
transaction management industries are highly competitive, and we expect competition to increase as other companies introduce electronic PoS system products and payment and transaction management software. The delivery of EMV solutions has also led
to some partnering with traditional competitors as retailers choose solution components from multiple competitive vendors.



In the electronic PoS systems market, we principally compete with Dione, VeriFone, Ingenico, Hypercom and Thales/Krone. Indirectly, we also compete with
local firms that offer country-specific alternatives. In addition, several of the Companys electronic PoS system products compete with software solutions designed by the Companys customers in-house engineering departments and
others. Competition has in the past caused us to reduce the average selling prices of the Companys electronic PoS systems, and we expect this trend to continue.



In secure e-payment and transaction management software markets, the competitive landscape varies by product line. There is
no competitor that we compete with across all product lines. However, we do compete with Transaction System Architects (TSAI) in a number of different areas. We also compete with Checkfree, Pegasystems, ValueLink, Card Tech Limited and Chesapeake
Systems Solutions for individual products. Additionally, we experience significant competition from existing and potential customers that develop, implement and maintain their own proprietary payment solutions relating to the Companys payment
software solutions for both the physical world and the Internet.



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We compete primarily on the basis of the following:



| |  | product capabilities and technical features
| | - | -------------------------------------------



| |  | product performance and effectiveness
| | - | -------------------------------------



| |  | price
| | - | -----



| |  | support of industry standards
| | - | -----------------------------



| |  | ease of use
| | - | -----------



| |  | customer technical support and service
| | - | --------------------------------------



We believe that we compete favorably in each of these markets based on these factors. However, in particular cases, the Companys competitors may
offer electronic PoS system products or payment software with functionality that is sought by the Companys prospective customers and which differs from that offered by us. Several of the Companys competitors have also in the past
distributed, and may in the future distribute, products in pilot programs at low-cost or below-market prices.



Several of the Companys competitors have significantly greater financial, technical and marketing resources and larger installed customer bases than
us. Also, a number of the Companys competitors have been acquired by, or formed strategic alliances with, industry leaders with significant resources. We may not be able to compete successfully against current and future competitors. In
addition, the Companys current and future competitors may develop products comparable or superior to those developed by us or adapt more quickly than us to new technologies, evolving industry standards or customer requirements. Increased
competition could result in price reductions, reduced margins and loss of market share, any or all of which could have a material adverse effect on the Companys business, financial condition, results of operations and prospects.



Intellectual Property and Proprietary Rights



The Companys success is dependent on the Companys proprietary
software technology. The Company relies on a combination of patents, contractual rights, trade secrets, copyright law, non-disclosure agreements and trademarks to establish and protect the Companys proprietary rights in the Companys
products and technologies. The Companys patents include the following:



|                                                                                      |  |                         |  |                                 
|------------------------------------------------------------------------------------- |  | ----------------------- |  | --------------------------------
|Field of Application                                                                  |  | Regions Issued          |  | Regions Pending                 
|Electronic field of point-of-sale security system incorporated in Compact             |  | Ireland, U.S. and Japan |  | European Union                  
|                                                                                      |  |                        
|Secure merchant transaction software incorporated in PayWare merchant product range   |  | Ireland                 |  | European Union                  
|                                                                                      |  |                        
|Secure bank/financial transaction processor software incorporated in PayWare Acquirer |  | Ireland                 |  | European Union and U.S.         
|                                                                                      |  |                        
|Secure card issuing software incorporated in PayWare Issuer                           |  |                        |  | European Union                  
|                                                                                      |  |                        
|High security anti-tamper technology incorporated in Pin Pad                          |  |                        |  | European Union and U.S.         
|                                                                                      |  |                        
|A hand-held point-of-sale terminal                                                    |  |                        |  | Ireland                         
|                                                                                      |  |                        
|Secure dispute resolution technology incorporated in PayWare Resolve                  |  | Ireland                 |  | European Union and U.S.         
|                                                                                      |  |                        
|Secure Pay technology to be incorporated in Smart 5000                                |  |                        |  | Ireland, European Union and U.S.



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These issued patents and the pending patent applications cover key areas of the Companys e-payment
software for payment card transactions in the physical world and over the Internet, as well as the Companys electronic PoS system products.



The Companys registered trademarks include the following:



|                               |  |                                        |  |                              
|------------------------------ |  | -------------------------------------- |  | -----------------------------
|Trademark                      |  | Regions Issued                         |  | Regions Pending              
|Trintech                       |  | United States                          |  | Ireland                      
|                               |  |                                       
|TrintechThe Secure Way to Pay |  | European Union, United States          |  | Ireland                      
|                               |  |                                       
|PayWare                        |  | European Union, United States          |  |                             
|                               |  |                                       
|PayWare Resolve                |  | European Union                         |  | United States                
|                               |  |                                       
|ReconNET                       |  |                                       |  | United States                
|                               |  |                                       
|PayWare Guardian               |  |                                       |  | European Union, United States
|                               |  |                                       
|Compact 9000                   |  | European Union                         |  |                             
|                               |  |                                       
|PayWare Acquirer               |  | European Union                         |  |                             
|                               |  |                                       
|Making Payments Pay            |  |                                       |  | European Union               
|                               |  |                                       
|WINEFT                         |  | United Kingdom                         |  |                             
|                               |  |                                       
|PayGate                        |  | European Union, United States          |  | Ireland                      
|                               |  |                                       
|Pay Purse                      |  | European Union, Ireland, United States |  |                             
|                               |  |                                       
|S/PAY                          |  |                                       |  | United States                
|                               |  |                                       
|Exceptis Technologies          |  |                                       |  | European Union               



In addition to the
Companys patents, trademarks and technology licenses, we have developed a significant portfolio of copyrights, know-how and trade secrets during the Companys 17 years of experience developing solutions for the payment industry.



Except for the intellectual property described above, we are
not currently dependent on any intellectual property that is of material importance to the Companys business or profitability.



Principal Markets



For a description of the product markets in which we compete, including a breakdown of total revenues by category of activity and geographic market for
each of the last three financial years, see Item 5 Operating and Financial Review and Prospects.



C. Organizational Structure



The following is a list and brief description of the Companys significant subsidiaries:



Trintech Technologies Limited, a wholly-owned subsidiary, is a limited liability company having a share capital incorporated under the laws of the
Republic of Ireland. All of the outstanding capital stock of Trintech Technologies Limited is owned by the Company. The principal activity of Trintech Technologies Limited is the sale of electronic PoS system products and payment software.



Trintech Limited, is a limited liability company having a
share capital incorporated under the laws of the Republic of Ireland. All of the voting securities of Trintech Limited are owned by the Company. The principal activity of Trintech Limited is research and development and the licensing of patents.



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Actipay Limited, is a limited liability company having a share capital incorporated under the laws of the
Republic of Ireland. All of the voting securities of Actipay Limited are owned by the Company. The principal activity of Actipay Limited is research and development and the licensing of patents.



Trintech GmbH, a wholly-owned subsidiary, is a limited liability company
incorporated in the Federal Republic of Germany. All of the outstanding capital stock of Trintech GmbH is owned by the Company. The principal activity of Trintech GmbH is the sale of electronic PoS system products and payment software.



Trintech Inc., a wholly-owned subsidiary, is a California corporation. All
of the outstanding capital stock of Trintech Inc. is owned by the Company. The principal activity of Trintech Inc. is the sale of payment software.



Trintech Group Finance Limited, a wholly-owned subsidiary, is a limited liability company having a share capial incorporated under the laws of the Cayman
Islands. All of the outstanding capital stock of Trintech Group Finance Limited is owned by the Company. The principal activity of Trintech Group Finance Limited is the management of the Companys surplus cash and the Companys investments
in marketable securities.



Trintech S.A., a wholly-owned
subsidiary, is a Uruguay corporation. All of the outstanding capital stock of Trintech S.A. is owned by Trintech Group Finance Limited. The principal activity of Trintech S.A. is the development of e-payment software.



Trintech Limited (formerly Checkline plc), a wholly-owned subsidiary, is
incorporated in the United Kingdom. All of the outstanding capital stock of Trintech Limited is owned by the Company. The principal activity of Trintech Limited is the sale of electronic PoS system products and payment software.



Exceptis Technologies Limited, a wholly-owned subsidiary, is a limited
liability company having a share capital incorporated under the laws of the Republic of Ireland. All of the outstanding capital stock of Exceptis is owned by the Company. Exceptis Technologies Limited is a provider of Internet enabled payment
infrastructure solutions for fraud prevention, automated payment card dispute resolution and risk management for card issuers, financial transaction processors and acquirers



J Driscoll & Associates Inc., a wholly-owned subsidiary, is a Texas corporation. All of the outstanding capital stock of
J Driscoll & Associates Inc. is owned by the Company. The principal activity of J Driscoll & Associates Inc. is the development and sale of transaction management software.



CW & Associates, Inc, doing business as DataFlow Services, is a wholly-owned subsidiary and is a Texas corporation. All
of the outstanding capital stock of CW & Associates, Inc. is owned by the Company. CW & Associates, Inc. is the provider of a data delivery service supporting customers bank reconciliation processes by aggregating bank account
statement data and delivering it to customers daily in electronic form.



D.
Description of Property



The Companys principal
development center and the Companys principal European executive and administrative offices are located in Dublin, Ireland. The Companys principal trading offices for North and South America are located in Dallas, Texas. We also have
offices for development, sales and marketing personnel in Frankfurt, Germany; Dallas, Texas; London, England; and Montevideo, Uruguay. The facilities in San Mateo, California and Miami, Florida are subleased to third parties.



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As at January 31, 2004 we leased the facilities described below:



|                  |  |               |  |                     |  |            |  |                         |  |                                
|----------------- |  | ------------- |  | ------------------- |  | ---------- |  | ----------------------- |  | -------------------------------
|Description       |  | SquareFootage |  | Used by The Company |  | Sub-leased |  | Available For sub-lease |  | Earliest lease termination date
|Ireland           |  |               |  |                     |  |            |  |                         |  |                                
|DublinFacility 1 |  | 22,500        |  | 22,500              |  |            |  |                         |  | 2006                           
|DublinFacility 2 |  | 29,400        |  | 9,067               |  | 20,333     |  |                         |  | 2009                           
|DublinFacility 3 |  | 8,500         |  |                     |  |            |  | 8,500                   |  | 2014                           
|                  |  |               |  |                     | 
|USA               |  |               |  |                     |  |            |  |                         |  |                                
|Dallas Facility 1 |  | 22,000        |  | 22,000              |  |            |  |                         |  | 2006                           
|Dallas Facility 2 |  | 5,019         |  | 5,019               |  |            |  |                         |  | 2005                           
|                  |  |               |  |                     | 
|San Mateo         |  | 7,250         |  |                     |  |            |  | 7,250                   |  | 2004                           
|                  |  |               |  |                     | 
|Miami             |  | 1,210         |  |                     |  |            |  | 1,210                   |  | 2005                           
|                  |  |               |  |                     | 
|United Kingdom    |  | 9,935         |  | 9,935               |  |            |  |                         |  | 2005                           
|                  |  |               |  |                     | 
|Germany           |  | 6,237         |  | 6,237               |  |            |  |                         |  | 2004                           
|                  |  |               |  |                     | 
|Uruguay           |  | 2,800         |  | 2,800               |  |            |  |                         |  | 2008                           



Item 5.Operating and Financial Review and Prospects



The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Companys consolidated financial statements for the periods specified including the
notes thereto included elsewhere in this Form 20-F as well as Item 3.A Key InformationSelected Consolidated Financial Data. The following discussion and analysis of financial condition, changes in financial condition and results of
operations contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements about customer demand, plans and
objectives of management and market growth and opportunity. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, variations of such words
and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve risks and uncertainties that are difficult to predict. Actual results could differ materially from those indicated by such
forward looking statements as a result of risks set forth in the following discussion and those set forth in Item 3.D Key InformationRisk Factors. We undertake no obligation to update publicly any forward-looking statements in this
Form 20-F report.



From the Companys organization through
1995, we developed and marketed electronic PoS systems and e-payment software for payment card transactions in the physical world. In early fiscal 1997, we launched the Companys first products for Internet e-payment transactions. Following
early success in the Internet e-payment industry, the Company completed an Initial Public Offering in September 1999. During 2000, the Company made four acquisitions to build market presence and add complementary product functionality.



Beginning in late fiscal 2001, the payments industry experienced a broad
economic downturn. This initially impacted the Companys software and services segment, particularly Internet payment solutions. The impact of this slowdown in growth for Internet payment solutions was partially offset by continued growth in
the PoS business segment in Europe as a result of continued investment in payment solutions in advance of the introduction of the euro. However, once the euro was launched, the general economic slowdown did impact the Companys European
business, particularly the Companys German customers, starting in early fiscal 2003. Revenue from customers located in Germany reduced from US$26.7 million in fiscal 2002 to US$8.2 million in fiscal 2003. As a result, the Companys total
revenues reduced by 37% from fiscal 2002 to fiscal 2003.



In
response to this downturn, managements strategy was to focus development and sales efforts on products with the greatest earnings potential and position the Company for growth when economic conditions improved.



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Investment was reduced in products where the opportunity had not yet developed or the market had not yet expanded due to the economic downturn. As a result,
the Company commenced a restructuring program in fiscal 2002. Restructuring costs of approximately US$5.3 million in fiscal 2002, US$4.3 million in fiscal 2003 and US$745,000 in fiscal 2004 were incurred in respect of involuntary staff terminations
and abandoned lease payments.



The growth in eCommerce had lead
to a significant increase in the volume of disputed credit card transactions for Internet purchases. The Company experienced growth for its PayWare Resolve product and continued to invest in this product during the downturn. Also, the Company
continued to grow demand for and invest in its transaction management product, PayWare ReconNET. Revenue growth for these products partially mitigated the revenue decrease for the Internet payment products in fiscal 2002 and the PoS systems products
in fiscal 2003. During fiscal 2004, the Company successfully stabilized its revenue base and ended the year with revenues of $43.1 million, a slight increase over fiscal 2003 revenues of $42.9 million.



Building on the success of PayWare ReconNET in North America, the Company
continued to develop new products and services during fiscal 2004 to service customer demand for transaction management solutions in Europe. The Company continued to invest in PayWare Resolve and started an investment program to develop new PoS
payment products and licensed intellectual property to third parties in response to demand being generated for retail point of sale solutions by the introduction of the EMV standard, particularly in Europe.



To further its transaction management products, the Company announced the
release of ReconNET 6.5, in March 2003, with new features like Advanced ACH and the web-enabled Remote Researcher. Additionally, Trintech launched its web-enabled ReconNET Bank Fee Analysis 6.6 system. To expand the Companys product offering
in the transaction management business, Trintech announced the availability of its new Statement Delivery service for business access to commercial bank account data. Following on from this announcement, Trintech expanded its position in the market
by acquiring CW & Associates, Inc, doing business as DataFlow Services, a private company, for a total consideration of approximately US$3.9 million, subject to final adjustment relating to performance related deferred contingent consideration,
effective November 1, 2003. DataFlow, based in Dallas, provides a data delivery service supporting customers bank reconciliation processes by aggregating bank account statement data and delivering it to customers daily in electronic form.
DataFlow employed 39 staff at the time of acquisition and serviced approximately 90 customers, of which 60 are also Trintech FMS customers. Trintech recognizes revenue generated from the acquired DataFlow products as services revenue.



In tandem with the growth in transaction management solutions, the planned
introduction of the EMV standard in 2005 started to generate early demand for new PoS solutions. In response to this emerging growth opportunity, the Company has recently focussed its development efforts on designing PoS systems that satisfy the EMV
standard. In April 2003 the Company released its first new PoS system to meet the EMV standard.



In November 2003, Trintech announced that it had achieved German ZKA (Zentraler Kreditausschuss) approval for its OpenPay Architecture for use in the
Smart 5000 PIN Pad terminal and its new range of OEM payment security technology products. This was the first approval of its kind for a PIN Pad device using a LINUX open standard operating system. In December 2003, a new range of secure payment
solutions, OpenPay 3000, for outdoor and unattended payment environments was introduced, addressing the requirements of pay-at-pump for petroleum companies, product and ticket vending machines, parking and prepaid mobile recharge
applications.



Today, the Companys revenue is primarily
derived from three sources:



Product Revenue. Product
revenue, which represented 24% of the Companys total revenue in fiscal 2004, is derived from sales of the Companys electronic PoS system products, primarily the Compact 9000 family of PoS devices and the Compact 950-PP pin pad.



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License Revenue. Software license revenue, which represented 53% of total revenue in fiscal 2004,
is derived from license fees from the Companys e-payment software products for payment card transactions and from the Companys transaction management software, and the provision of related support and maintenance services to customers.



We also license the Companys software on a recurring
rental basis. Customer support and maintenance fees are established as a percentage of the software license price, typically 18% per year, and are generally paid quarterly.



Service Revenue. We derive service revenue, which represented 23% of total revenue in fiscal 2004, from consulting
services, educational and training services and customization and implementation services. We also recognize revenue generated from the acquired DataFlow products as services revenue.



Total revenue from customers in the United States was US$18.9 million in fiscal 2004, US$17.5 million in fiscal 2003 and
US$21.4 million in fiscal 2002. This represented approximately 44% of total revenue in fiscal 2004, 41% of total revenue in fiscal 2003 and 31% of total revenue in fiscal 2002. Total revenue from customers located in Germany was US$6.9 million in
fiscal 2004, US$8.2 million in fiscal 2003 and US$26.7 million in fiscal 2002. This represented approximately 16% of total revenue in fiscal 2004, 19% of total revenue in fiscal 2003 and 39% of total revenue in fiscal 2002. Total revenue from
customers located in Europe, excluding Germany, was US$15.5 million in fiscal 2004, US$14.4 million in fiscal 2003, and US$15.2 million in fiscal 2002. This represented approximately 36% of total revenue in fiscal 2004, 34% of total revenue in
fiscal 2003 and 22% of total revenue in fiscal 2002.



Cost of
product revenue includes outsourced manufacturing costs, and packaging, documentation, labor and other costs associated with packaging and shipping the Companys electronic PoS system products. Cost of license revenue includes shipping,
software documentation, labor, third-party license fees and other costs associated with the delivery of software products from which license revenue is derived and the cost of providing after-sale support and maintenance services to customers and
the costs of amortized purchased technology. Cost of service revenue includes labor, travel and other non-recoverable costs associated with the delivery of services to customers and the cost of labor and related banking and communication costs
associated with the retrieval of customer data in connection with the Companys transaction services product.



Research and development expenses consist primarily of labor and associated costs connected with the development of the Companys software products
and electronic PoS system products. Sales and marketing expenses consist of labor costs, including commissions, travel and other costs associated with sales activity, and advertising, trade show participation, public relations and other marketing
costs. General and administrative expenses consist primarily of labor and recruitment costs, facilities costs, telephone and other office costs and depreciation.



We operate as a holding company with operating subsidiaries in Ireland, Germany, the United Kingdom, Uruguay, the United
States and a financing subsidiary in the Cayman Islands. Each subsidiary is taxed based on the laws of the jurisdiction in which it is incorporated. Because taxes are incurred at the subsidiary level, and one subsidiarys tax losses cannot be
used to offset the taxable income of subsidiaries in other tax jurisdictions, the Companys consolidated effective tax rate may increase to the extent that we report tax losses in some subsidiaries and taxable income in others. In addition, the
Companys tax rate may also be affected by costs that are not deductible for tax purposes, such as amortization of purchased intangibles and stock compensation.



We have significant operations and we generate a significant portion of the Companys taxable income in the United
Kingdom, the United States, Germany and the Republic of Ireland. Some of the Companys Irish operating subsidiaries are taxed at rates substantially lower than U.S. tax rates. One Irish subsidiary currently qualifies for a 10% tax rate which,
under current legislation, will remain in force until December 31, 2010, and another Irish subsidiary qualifies for an exemption from income tax as the Companys revenue source is license fees from qualifying patents within the meaning of
Section 234 of the Irish Taxes Consolidation Act, 1997.



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We currently anticipate that we will continue to benefit from this tax treatment, although the extent of
the benefit could vary from period to period, and the Companys tax situation may change. In addition, if these subsidiaries were no longer to qualify for these tax rates or if the tax laws were rescinded or changed, the Companys
operating results could be materially adversely affected.



A
significant portion of the Companys revenue, costs, assets and liabilities are denominated in currencies other than the U.S. dollar, and all of our subsidiaries, other than our U.S. and Cayman Islands subsidiaries, have functional currencies
other than the U.S. dollar. These currencies fluctuate significantly against the U.S. dollar. As a result of the currency fluctuations resulting primarily from fluctuations in the U.S. dollar and the euro and the conversion to U.S. dollars for
financial reporting purposes, we experience fluctuations in the Companys operating results on an annual and, in particular, on a quarterly basis. As a result of such currency fluctuations, we recognized exchange gains of US$79,000, US$771,000
and US$523,000 in fiscal 2004, 2003 and 2002, respectively. From time to time we have in the past and may in the future hedge against the fluctuations in exchange rates. Future hedging transactions may not successfully mitigate losses caused by
currency fluctuations. We expect to continue to experience exchange rate fluctuations on an annual and quarterly basis, and currency fluctuations could have a material adverse impact on the Companys results of operations.



Acquisition History



On August 25, 2000, the Company acquired the outstanding shares of Checkline plc, a privately held company in the United
Kingdom, for total consideration of approximately US$39.3 million subject to final adjustment relating to performance related deferred consideration. The consideration as at January 31, 2004, totaled US$41.1 million. A further US$1.25 million may
become payable to the former stockholders of Checkline plc if agreement on certain performance criteria being met is reached. This payment would result in an increase in the purchase price of the acquired business, and a corresponding increase to
the goodwill recorded. Checkline was a transaction processing and electronic card payment company.



On November 15, 2000, the Company acquired substantially all the assets of Sursoft, a privately held company in Latin America, for total consideration of
approximately US$11.0 million subject to final adjustment relating to performance related deferred consideration, which was finalized in March 2003. Under the terms of the finalized agreement, the Company paid approximately US$451,000 to Sursoft
shareholders in April 2003. In addition, the Company will be required to pay an additional final amount of either US$150,000 contingent on the achievement of agreed performance criteria or US$100,000 during the year ending January 31, 2005. The
final agreement reduced the total estimated consideration of US$11.4 million at January 31, 2003, to approximately US$10.3 million, a reduction in deferred consideration of approximately US$1,149,000. Sursoft specialized in payment card and merchant
management software for credit, debit or smart cards.



On
November 20, 2000, the Company acquired Exceptis Technologies Limited, a privately held company in Ireland, for total consideration of approximately US$16.5 million subject to final adjustment relating to performance related deferred consideration
and total amount of liabilities assumed. The final consideration totaled US$18.1 million. During January 2003, in connection with the acquisition of Exceptis Technologies Limited, the Company recognized a charge in its Consolidated Statement of
Operations in relation to an adjustment of acquisition liabilities, primarily relating to lease abandonment costs, of approximately US$427,000. Exceptis Technologies was a leading provider of business to business and business to customer Internet
enabled payment infrastructure solutions for fraud prevention, automated payment card dispute resolution and risk management for card issuers, financial transaction processors and acquirers.



On December 29, 2000, the Company acquired the primary assets of Globeset
Inc., a privately held company in the U.S., for total consideration of approximately US$33.9 million subject to final adjustment based on the total amount of liabilities assumed. In January 2003, the total consideration was reduced by approximately
US$1.0 million due to the adjustment of an assumed liability in connection with the acquisition of Globeset. The final consideration totaled US$35.6 million. Globeset was a supplier of secure payment infrastructure services and products for buyers,
sellers and financial-service providers.



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On November 13, 2001, the Company acquired VeriFones secure payment infrastructure and Internet
payment ePS product line, for total consideration of US$3.4 million. VeriFones ePS product line is a complete e-commerce payment management solution aimed at large retailers, financial institutions, network operators and other multiple service
providers.



The Company recognized goodwill impairments of
US$36,540,000 and US$12,849,000 for the years ended January 31, 2002 and 2003, respectively, in connection with these acquisitions, more fully described below in Results of Operations on page 40 and in Note 20 of the Financial Statements.



On November 1, 2003, the Company acquired the outstanding
shares of CW & Associates, Inc, doing business as DataFlow Services, a privately held company in the U.S., for a total consideration of approximately US$3.9 million subject to final adjustment relating to performance related contingent
consideration. In addition, the Company will be required to pay additional performance related contingent consideration equal to fifty percent of profits, as defined in the purchase agreement, earned by the acquired business for each of the
financial years ending January 31, 2005 and January 31, 2006. The additional contingent consideration is subject to certain top-up provisions from profits for the year ending January 31, 2007 if the aggregate payments under the provisions for fiscal
2005 and fiscal 2006 are less than US$2.5 million. These payments, will result in an increase in the purchase price of the acquired business, and a corresponding increase to the goodwill recorded. Separately, the vendor of CW & Associates, Inc,
purchased 150,000 ADSs for a total cash consideration of US$570,000. CW & Associates, Inc., based in Dallas, Texas, provides a data delivery service supporting customers bank reconciliation processes by aggregating bank account statement
data and delivering it to customers daily in electronic form. This acquisition will allow the Company to further develop its products and services offering in the transaction management industry.



Critical Accounting Policies and Estimates



The preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and the accompanying footnotes. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical
accounting policies affect the more significant judgments and estimates used in the preparation of the Companys financial statements.



Revenue recognition. The Companys revenue is derived from product sales, license fees and charges for services.



For product sales and software license agreements that do not require
significant modification or customization of the software, we recognize revenue when the following conditions have been met:



| |  | persuasive evidence of an arrangement exists;
| | - | ---------------------------------------------



| |  | delivery has occurred;
| | - | ----------------------



| |  | our fee is fixed or determinable; and
| | - | -------------------------------------



| |  | collectibility is probable.
| | - | ---------------------------



If the Company provides services that are considered essential to the functionality of the software products, both the license revenue and the service
revenue are recognized based on the total license and service fees under the agreement and the percentage of completion achieved. The percentage of completion is measured by monitoring progress using records of actual time incurred to date in the
project compared to the total estimated project requirements, which corresponds to the costs related to earned revenues. Estimates of total project requirements are based on prior experience of customization of similar software and delivery of
similar services and are reviewed and updated regularly by management. The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent with the application of the percentage-of-completion method of
accounting affect the amounts of revenue and related expenses reported in our consolidated financial statements. A number of internal and external factors can affect our estimates, including labor rates, utilization and efficiency variances and
specification and testing requirement changes.



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One of the critical judgments we make is the assessment that collectibility is probable. Our
recognition of revenue is based on our assessment of the probability of collecting the related accounts receivable balance on a customer-by-customer basis considering past payment history and credit history. The timing or amount of revenue
recognition may have been different if different assessments of the probability of collection had been made at the time the transactions were recorded in revenue. In cases where collectibility is not deemed probable, revenue is recognized at the
time collection becomes probable, which is generally upon receipt of cash.



Many of our licence agreements contain multiple elements. When the Company enters into multiple element arrangements, we allocate revenue to each of the elements based on its respective vendor specific objective
evidence of fair value. Each license arrangement requires careful analysis to ensure that all of the individual elements in the license transaction have been identified, along with the fair value of each element. The vendor specific objective
evidence of fair value for an element is based on the price charged for the element when it is sold separately. If we cannot objectively determine the fair value of any undelivered element included in the multiple element arrangement, we defer
revenue until all elements are delivered, services have been performed, or until fair value can be objectively determined. When the fair value of an element cannot be established, we use the residual method to record license revenue, provided the
fair value of all undelivered elements is determinable. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as
revenue.



Revenue for services is recognized as the services
are performed where those services are provided on a time and materials basis. Revenue for the Companys transaction services product is recognized as the services are delivered to customers. Fair value of services is based upon separate sales
of these services. The determination as to whether services involve significant production, modification or customization of the underlying software code is a matter of judgment and can materially impact the timing of revenue recognition. Where
services are being provided on a fixed price contract, the revenue is accounted for in conformity with the percentage-of-completion contract accounting method, using reasonable estimates as to the project work completed as described above.



Revenue from maintenance and support agreements are recognized
on a straight-line basis over the period to which it relates, which is typically one year. First-year maintenance typically is sold with the related software license and renewed on an annual basis thereafter. For such arrangements with multiple
obligations, we allocate revenue to each component of the arrangement based on the fair value of the undelivered elements. Fair values of ongoing maintenance and support obligations are based on separate sales of renewals to other customers or upon
renewal rates quoted in the contracts when the quoted renewal rates are deemed to be substantive.



Significant management judgments and estimates must be made in connection with determination of the revenue to be recognized in any accounting period. If
we made different judgments or utilized different estimates for any period, material differences in the amount and timing of revenue recognized could result.



Allowance for doubtful accounts. The allowance for doubtful accounts receivable is based on the Companys assessment of the collectibility of
specific customer accounts and the aging of accounts receivable. We maintain an allowance for doubtful accounts at an amount we estimate to be sufficient to provide for actual losses resulting from collecting less than full payment on our
receivables. A considerable amount of judgment is required when we assess the realizability of receivables, including assessing the probability of collection and the current credit-worthiness of each customer. If the financial condition of our
customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional provision for doubtful accounts might be required. In cases where we are aware of circumstances that may impair a specific customers
ability to meet its financial obligations, we record a specific allowance against amounts due, and thereby reduce the net recognized receivable to the amount we reasonably believe will be collected. For the remaining customers, we recognize
allowances for doubtful accounts based on the length of time the aggregate receivables are outstanding, the current business environment and historical experience. Alternatively, if the financial condition of our customers were to improve such that
their ability to make payments was no longer considered impaired, we would reduce related estimated reserves with a credit to the provision for doubtful accounts.



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Inventory reserves. Inventory purchases and commitments are based upon future demand forecasts.
The valuation of inventory requires us to estimate obsolete or excess inventory as well as inventory that is not of saleable quality. If there is a significant decrease in demand for the Companys products or there is a higher risk of inventory
obsolescence because of rapidly changing technology and customer requirements, we may be required to increase the Companys inventory allowances and the Companys gross margin could be adversely affected.



Long-lived assets. In assessing the recoverability of our goodwill and
other intangibles, the Company must make assumptions regarding estimated future cash flows, the discount rate and other factors to determine the fair value of the respective assets. If these estimates or their related assumptions change in the
future, the Company may be required to record impairment charges against these assets in the reporting period in which the impairment is determined.



The Company periodically assesses the impairment of long-lived assets, including identifiable intangibles and related goodwill, in accordance with the
provisions of SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 142 superseded SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of and the accounting and
reporting provisions of Accounting Principles Board Opinion No. 17, (APB 17), Intangible Assets. An impairment review is performed on an annual basis or whenever events or changes indicate that the carrying value may not be recoverable.
Factors the Company considers important which could trigger an impairment review include, but are not limited to, significant under performance relative to historical or expected operating results, significant changes in the manner of use of the
acquired assets or the strategy for the Companys overall business, significant negative industry or economic trends, a significant decline in the Companys stock price for a sustained period, and the Companys market capitalization
relative to net book value. When the Company determines that the carrying value of goodwill may not be recoverable, the Company measures any impairment using a projected discounted cash flow model with a discount rate commensurate with the risk
inherent in the Companys current business model.



Warranty reserves. We accrue warranty liabilities at the time of sale for the estimated costs that may be incurred to provide warranty services. Factors that affect the Companys warranty liability include the number of
installed units currently under warranty, historical and anticipated rates of warranty claims on those units, and cost per claim to satisfy the Companys warranty obligation. The anticipated rate of warranty claims is the primary factor
impacting the Companys estimated warranty obligation. Other factors include repair parts and labor rates. Repair parts are generally already in stock or available at pre-determined prices, and labor rates are generally arranged at
pre-established amounts with service providers. Warranty claims are relatively predictable based on historical experience of failure rates. Each quarter, the Company reevaluates its estimates to assess the adequacy of its recorded warranty
liabilities and adjusts the amounts as necessary. If we were to experience an increase in warranty claims compared with the Companys historical experience, or costs of servicing warranty claims were greater than the expectations on which the
accrual had been based, the Companys margins could be adversely affected.



Legal contingencies. We are occasionally involved in various claims and legal proceedings. Periodically, we review the status of each significant matter and assess the Companys potential financial
exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be estimated, we accrue a liability for the estimated loss. Because of uncertainties related to these matters, accruals are based only on
the best information available at the time. As additional information becomes available, we reassess the potential liability related to the Companys pending claims and litigation and may revise the Companys estimates. Such revisions in
the estimates of the potential liabilities could have a material impact on the Companys results of operations and financial position.



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Results of Operations



The following table presents the Companys results of operations expressed as a percentage of total revenue, after giving effect to rounding, for the
periods indicated:



|                                                       |  |                        |    |  |      |    |  |      |   
|------------------------------------------------------ |  | ---------------------- | -- |  | ---- | -- |  | ---- | --
|                                                       |  | Year Ended January 31, |   
|                                                       |  | 2002                   |    |  | 2003 |    |  | 2004 |   
|Revenue:                                               |  |                        |    |  |      |    |  |      |   
|Product                                                |  | 38                     | %  |  | 22   | %  |  | 24   | % 
|License                                                |  | 44                     |    |  | 52   |    |  | 53   |   
|Service                                                |  | 18                     |    |  | 26   |    |  | 23   |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Total revenue                                          |  | 100                    |    |  | 100  |    |  | 100  |   
|Cost of revenue:                                       |  |                        |    |  |      |    |  |      |   
|Product                                                |  | 28                     |    |  | 26   |    |  | 18   |   
|License                                                |  | 15                     |    |  | 21   |    |  | 12   |   
|Service                                                |  | 13                     |    |  | 20   |    |  | 14   |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Total cost of revenue                                  |  | 56                     |    |  | 67   |    |  | 44   |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Gross margin                                           |  | 44                     |    |  | 33   |    |  | 56   |   
|Operating expenses:                                    |  |                        |    |  |      |    |  |      |   
|Research and development                               |  | 30                     |    |  | 24   |    |  | 19   |   
|Sales and marketing                                    |  | 27                     |    |  | 24   |    |  | 20   |   
|General and administrative                             |  | 26                     |    |  | 36   |    |  | 25   |   
|Restructuring charge                                   |  | 8                      |    |  | 10   |    |  | 2    |   
|Amortization of purchased intangible assets            |  | 6                      |    |  | 6    |    |  | 1    |   
|Amortization of goodwill                               |  | 41                     |    |  |     |    |  |     |   
|Impairment of goodwill and purchased intangible assets |  | 56                     |    |  | 39   |    |  |     |   
|Adjustment of acquisition liabilities                  |  |                       |    |  | 2    |    |  |     |   
|Adjustment of acquisition deferred consideration       |  |                       |    |  |     |    |  | (3   | ) 
|Stock compensation                                     |  | 1                      |    |  |     |    |  |     |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Total operating expenses                               |  | 195                    |    |  | 141  |    |  | 64   |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Income (loss) from operations                          |  | (151                   | )  |  | (108 | )  |  | (8   | ) 
|Other expenses:                                        |  |                        |    |  |      |    |  |      |   
|Interest (income) expense, net                         |  | 4                      |    |  | 2    |    |  | 1    |   
|Exchange gain, net                                     |  | 1                      |    |  | 2    |    |  | 0    |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Income (loss) before provision for income taxes        |  | (146                   | )  |  | (104 | )  |  | (7   | ) 
|Provision for income taxes                             |  |                       |    |  |     |    |  |     |   
|                                                       |  |                        |    |  |      |    |  |      |   
|Net income (loss)                                      |  | (146                   | )% |  | (104 | )% |  | (7   | )%
|                                                       |  |                        |    |  |      |    |  |      |   



Fiscal Year Ended January 31, 2004
Compared To Fiscal Year Ended January 31, 2003



|                |  |                             |  |                            |  |                                     |   |  |                                   |   
|--------------- |  | --------------------------- |  | -------------------------- |  | ----------------------------------- | - |  | --------------------------------- | --
|Revenue         |  | Year EndedJanuary 31, 2004  |  | Year EndedJanuary 31, 2003 |  | Increase/(Decrease) from prior year |   |  | Percentage change from prior year |   
|                |  | (U.S. dollars in thousands) |  |                            |  |                                    
|                |  |                             |  |                            |  |                                     |   |  |                                   |   
|Product Revenue |  | 10,318                      |  | 9,165                      |  | 1,153                               |   |  | 13                                | % 
|License Revenue |  | 22,867                      |  | 22,418                     |  | 449                                 |   |  | 2                                 | % 
|Service Revenue |  | 9,886                       |  | 11,273                     |  | (1,387                              | ) |  | (12                               | )%
|                |  |                             |  |                            |  |                                     |   |  |                                   |   
|Total Revenue   |  | 43,071                      |  | 42,856                     |  | 215                                 |   |  | 1                                 | % 
|                |  |                             |  |                            |  |                                     |   |  |                                   |   



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Revenue



Total Revenue. Although we have historically derived a significant portion of the Companys total revenue from a
small number of customers, in the year ended January 31, 2004 and in the year ended January 31, 2003, there was no customer which accounted for greater than 10% of the Companys total revenue.



Product. The increase was attributable to an increase in revenue from
the cellular pre-pay sector and due to demand in the U.K. market for product to enable processing of credit card payment under the new EMV(Europay-Mastercard-Visa) standard (a standard for chip card acceptance). Demand from the German EFT market
remained weak during fiscal 2004. We believe there will continue to be weakness in demand from the German retail sector during the first half of fiscal 2005. However, growth of EMV may be positively impacted if the U.K. market adopts the EMV
standard during fiscal 2005.



License. The Company
maintained its revenue from e-payment and transaction management software products, including post sales support during fiscal 2004 compared to fiscal 2003. The increase in software license revenue was primarily due to the licensing of intellectual
property included in our PoS product to a new US customer in the three months ended April 30, 2003. This represented a new revenue source for the Company, as it seeks to maximize the return on investment in building the intellectual property in its
product set. We believe that software license revenues will increase in fiscal 2005 if the UK market adopts the EMV standard during fiscal 2005 and we continue to be successful in developing the market for our transaction management solutions.



Service. The decrease was due primarily to the
cancellation, by mutual consent, of previously deferred contracted services projects by customers in the Middle East as a result of war in the region. Additionally, we have seen a continuation of a trend, which started in the first quarter of fiscal
2004, of lower services follow-on bookings as customers seek to achieve the full benefits of an installation before making new investments. We have been managing this through a reduction in services headcount, which has allowed us to preserve
service margins. The decrease was also due to a reduction in sales of software licenses during the latter half of fiscal 2003, which resulted in reduced demand for consulting services. The decrease was partially offset by the inclusion of revenue
generated by CW & Associates, Inc., doing business as DataFlow Services, from November 1, 2003, the date of acquisition. We believe that services revenue will grow in fiscal 2005 as we obtain the benefits of the integration of DataFlow Services.



Cost of Revenue



|                |  |                             |  |                            |  |                         |   |  |                                   |   
|--------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- | - |  | --------------------------------- | --
|Cost of Revenue |  | Year Ended January 31,2004  |  | Year Ended January 31,2003 |  | Decrease from prioryear |   |  | Percentage change from prior year |   
|                |  | (U.S. dollars in thousands) |  |                            |  |                        
|Product         |  | 7,586                       |  | 11,148                     |  | (3,562)                 |   |  | (32)%                             |   
|License         |  | 5,313                       |  | 9,248                      |  | (3,935)                 |   |  | (43)%                             |   
|Service         |  | 6,020                       |  | 8,456                      |  | (2,436                  | ) |  | (29                               | )%
|                |  |                             |  |                            |  |                         |   |  |                                   |   
|Total           |  | 18,919                      |  | 28,852                     |  | (9,933                  | ) |  | (34                               | )%
|                |  |                             |  |                            |  |                         |   |  |                                   |   



Total Cost of
Revenue. The increase in total gross margin resulted from a reduction in expenditures in both labor costs and infrastructure as a result of the implementation of restructuring plans in fiscal 2003 and fiscal 2004, a reduction in amortization of
acquired technology due to a write down in purchased technology assets following an impairment review during the fourth quarter of fiscal 2003 and due to the non-recurrence of exceptional provisions for loss in net realizable value for excess
inventory recorded in the year ended January 31, 2003.



Product. The decrease in absolute dollars and as a percentage of product revenue, resulted from the non-recurrence of exceptional provisions for loss in net realizable value for excess inventory of US$3.0 million



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recorded in the year ended January 31, 2003 and due to a change in the product sales mix. Greater volume sales of higher margin product were sold in fiscal
2004 compared to fiscal 2003. In addition the decrease in absolute dollars was partially offset by the impact of the declining value of the dollar as against the euro and sterling, during fiscal 2004. For example, the cost of manufacturing the
Companys electronic PoS systems are denominated in euro and sterling. The decrease in value of the USD relative to these currencies has had a negative impact on the Companys cost of product revenues during fiscal 2004.



License. The decrease in absolute dollars and as a percentage of
license revenue resulted from a reduction in expenditures in both labor costs and infrastructure as a result of the implementation of restructuring plans and consolidation of our support and maintenance facilities during fiscal 2003 and to a lesser
extent fiscal 2004, and due to a reduction in amortization of acquired technology. The reduction in amortization of acquired technology charge of US$3.6 million was due to a write down in purchased technology assets of approximately US$3.0 million
following an impairment review during the fourth quarter of fiscal 2003.



Service. The decrease in absolute dollars and in percentage resulted primarily from involuntary staff terminations during the year. The decrease was partially offset by the inclusion of costs incurred by the
inclusion of CW & Associates, Inc., doing business as DataFlow Services, from November 1, 2003, the date of acquisition.



Operating Expenses



|                           |  |                             |  |                            |  |                         |  |                                  
|-------------------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- |  | ---------------------------------
|                           |  | Year Ended January 31,2004  |  | Year Ended January 31,2003 |  | Decrease from prioryear |  | Percentage change from prior year
|                           |  | (U.S. dollars in thousands) |  |                           
|                           |  |                             |  |                           
|Research and Development   |  | 8,280                       |  | 10,349                     |  | (2,069)                 |  | (20)%                            
|Sales and Marketing        |  | 8,689                       |  | 10,297                     |  | (1,608)                 |  | (16)%                            
|General and Administrative |  | 10,587                      |  | 15,354                     |  | (4,767)                 |  | (31)%                            



Research and
Development. The decrease in research and development expenses in the year ended January 31, 2004 was primarily due to a reduction in the number of research and development employees from 160 at January 31, 2003 to 136 at January 31, 2004. These
staff reductions were primarily due to involuntary staff terminations during the year as a result of the technological maturing of the Companys electronic commerce products and a reduced investment in products where the market opportunity had
not yet developed or the market has not yet expanded due to economic conditions. Accordingly, we expect that research and development expenses will continue to decrease in absolute dollar terms and as a percentage of revenue during fiscal 2005.



Sales and Marketing. The decrease in sales and
marketing expenses in the year ended January 31, 2004 was primarily due to a reduction in the number of sales and marketing employees from 63 at January 31, 2003 to 54 at January 31, 2004 and a reduction in commissions and travel costs. These staff
reductions were primarily due to involuntary staff terminations during the year as a result of cost containment efforts initiated to align cost structures with the business. The decrease was also a result of a reduction in direct marketing
activities.



General and Administrative. The decrease
was as a result of reductions related to the closing of excess facilities in connection with cost containment efforts initiated to align cost structures with the business and a reduction in provisions for loss in net realizable value for accounts
receivable.



Restructuring charge. The Company recorded
restructuring charges of US$745,000 and US$4.3 million for the years ended January 31, 2004 and 2003, respectively.In fiscal year ended January 2003, restructuring charges related to costs associated with staff terminations and the closure
of excess facilities as the Company concentrated on products with the highest earning potential. The company reduced its workforce by



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approximately 125 employees including the agreed resignation of John McGuire, the Companys President, who resigned effective September 16, 2002, and
closed facilities in Princeton, New Jersey; Philadelphia, Pennsylvania; and San Mateo, California. The restructuring charge in fiscal year ended January 31, 2004 primarily related to staff terminations in connection with our research and development
facilities in Uruguay and Ireland, as the Company reduced investment in products where the market opportunity has not yet developed, or the market has not expanded, due to economic conditions. In connection with these activities the Company reduced
its workforce by 19 people in the second quarter, 11 people in the third quarter and 5 people in the fourth quarter of fiscal 2004. As of January 31, 2004, accrued restructuring charges related to future lease commitments of US$285,000, which will
be paid through fiscal 2006 and staff terminations of US$128,000 which were paid during February and March 2004. During the fourth quarter, the Company secured a new tenant for a suite in the San Mateo office enabling us to terminate our lease with
the landlord. The Company continues to search for sub tenants for its remaining excess facilities, but given the short duration of the remaining lease terms and the current market for commercial real estate, is unlikely to find subtenants at
reasonable rates.



Amortization of purchased intangible
assets. Amortization of purchased intangible assets consists primarily of the amortization of an acquired customer base, recorded in connection with the acquisitions in fiscal 2001. Amortization of purchased intangible assets was US$507,000 in
the fiscal year ended January 31, 2004 compared to US$2.6 million in the fiscal year ended January 31, 2003, a decrease of 80%. The decrease was due to an increase in the estimated useful economic life of an acquired customer base and the subsequent
reduction in amortization and a write down of purchased intangible assets of US$660,000, following an impairment review during the fourth quarter of fiscal 2003.



Impairment of goodwill and purchased intangible assets.During the fourth quarter of fiscal 2003, the Company
completed its annual impairment test and assessments of the carrying value of identifiable intangible assets and goodwill as required by SFAS 142. The assessment was performed primarily due to the further significant decline in the Companys
stock price, the net book value of assets significantly exceeding the Companys market capitalization and the overall decline in industry growth rates which indicated that this trend might continue for an indefinite period. As a result, the
Company recorded a US$16.5 million impairment charge in the quarter ended January 31, 2003 to reduce other intangible assets and goodwill to their estimated fair values. The goodwill impairment test compared the carrying amount of the Licenses and
Services Reporting Segment, to which the goodwill related, to the estimated fair value of the Reporting Segment. The Company determined the estimated fair value of the Licenses and Services Reporting Segment based upon an independent appraisal,
which applied the income approach valuation method, using the discounted estimated cash flows from Licenses and Services Reporting Segment. The assumptions supporting the estimated cash flows, including the discount rate, reflect managements
best estimates. As a result, the Company recorded a US$12.8 million impairment charge in the quarter ended January 31, 2003 to reduce goodwill to its estimated fair value which reduced the carrying amount of goodwill to US$6.6 million. Other
non-current assets were tested for impairment, by comparing the carrying amount of the intangible assets to their estimated fair value. The Company determined the estimated fair value of the assets based upon an independent appraisal, which applied
the income approach valuation method, using the discounted estimated cash flows from the assets. The assumptions supporting the estimated cash flows, including the discount rate, reflected managements best estimates. As a result, the Company
recorded a US$3.7 million impairment charge in the quarter ended January 31, 2003 to reduce other non-current intangible assets to their estimated fair value.



During the fourth quarter of fiscal 2004, the Company completed its annual impairment test and assessments of the carrying value of identifiable
intangible assets and goodwill as required by SFAS 142 and determined its recorded goodwill and other non-current assets intangible assets were not impaired as of January 31, 2004.



Adjustment of acquisition deferred consideration.Adjustment of acquisition deferred consideration was US$1,149,000
for the year ended January 31, 2004. Goodwill in connection with the Companys acquisitions was written down to its estimated fair value following an impairment review during the fourth quarter of fiscal 2003. The adjustment was in connection
with the acquisition of Sursoft. On November 15, 2000, the Company acquired



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substantially all the assets of Sursoft, a privately held company in Latin America, for total consideration of approximately US$11.0 million subject to final
adjustment relating to performance related deferred consideration, which was finalized in March 2003. Under the terms of the amended agreement, the Company paid approximately US$451,000 to the Sursoft shareholders in April 2003. In addition, during
the year ending January 31, 2005, the Company will be required to pay an additional final amount of either US$150,000 contingent on the achievement of agreed performance criteria or US$100,000. The amended agreement reduced the consideration from
US$11.4 million to approximately US$10.3 million, a reduction in deferred consideration of US$1,149,000.



Stock Compensation. In the fiscal year ended January 31, 2004, there was no stock compensation charge recorded. In the fiscal year ended January
31, 2003, we recorded stock compensation of US$20,000 in connection with the exchange of unvested employee options on the acquisition of Exceptis Technologies Limited.



Interest Income (Expense), Net. Interest income (expense), net consists of interest income and interest expense.
Interest income, net decreased US$448,000 to US$268,000 of interest income, net in the fiscal year ended January 31, 2004 compared to US$716,000 of interest income, net in the fiscal year ended January 31, 2003. The decrease was due to lower cash
balances and lower interest rates.



Provision for Income
Taxes. There was no provision for income taxes in the fiscal year ended January 31, 2004. In the fiscal year ended January 31, 2003 the provision for income taxes was US$108,000. The decrease was primarily due to a decrease in withholding taxes
related to customer payments from Asia and South America.



Fiscal Year Ended
January 31, 2003 Compared To Fiscal Year Ended January 31, 2002



|                |  |                             |  |                            |  |                                    |  |                                  
|--------------- |  | --------------------------- |  | -------------------------- |  | ---------------------------------- |  | ---------------------------------
|Revenue         |  | Year Ended January 31,2003  |  | Year Ended January 31,2002 |  | Increase/(Decrease)from prior year |  | Percentage change from prior year
|                |  | (U.S. dollars in thousands) |  |                           
|                |  |                             |  |                           
|Product Revenue |  | 9,165                       |  | 26,104                     |  | (16,939)                           |  | (65)%                            
|License Revenue |  | 22,418                      |  | 30,240                     |  | (7,822)                            |  | (26)%                            
|Service Revenue |  | 11,273                      |  | 11,997                     |  | (724)                              |  | (6)%                             
|                |  |                             |  |                            |  |                                    |  |                                  
|Total Revenue   |  | 42,856                      |  | 68,341                     |  | (25,485)                           |  | (37)%                            
|                |  |                             |  |                            |  |                                    |  |                                  



Revenue



Total Revenue. The decrease was primarily
attributable to the Companys product customers experiencing weaker than expected demand from the German retail sector as a result of a weakening German economy and a fall off in demand post euro implementation. In addition, the decrease was
due to continued softness in the global IT market.



Although we have historically derived a significant portion of the Companys total revenue from a small number of customers, in the year ended January 31, 2003 there was no customer which accounted for greater than 10% of the
Companys total revenue. In the fiscal year ended January 31, 2002, Deutsche Verkehrs Bank Zentrale accounted for 12% of the Companys total revenue and Fiducia accounted for 10% of the Companys total revenue. The fall off in orders
from these two customers is directly attributable to the weakness in the German retail sector.



Product. The decrease was attributable to the Companys product customers experiencing weaker than expected demand from the German retail
sector as a result of a weakening German economy and a fall off in demand post euro implementation.



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License. The decrease in software license revenue was due primarily to the ongoing fragile state
of the global economy which resulted in slower payment infrastructure investment decisions and longer sales cycles.



Service. The decrease in service revenue in the fiscal year ended January 31, 2003 primarily resulted from a reduction in sales of software
licenses, which resulted in reduced demand for consulting services and due to the war in Iraq which adversely impacted services revenues in the three months ended January 31, 2003.



Cost of Revenue



|                |  |                             |  |                            |  |                                    |  |                                  
|--------------- |  | --------------------------- |  | -------------------------- |  | ---------------------------------- |  | ---------------------------------
|Cost of Revenue |  | Year Ended January 31,2003  |  | Year Ended January 31,2002 |  | Increase/(Decrease)from prior year |  | Percentage change from prior year
|                |  | (U.S. dollars in thousands) |  |                           
|                |  |                             |  |                           
|Product         |  | 11,148                      |  | 19,476                     |  | (8,328)                            |  | (43)%                            
|License         |  | 9,248                       |  | 10,448                     |  | (1,200)                            |  | (11)%                            
|Service         |  | 8,456                       |  | 8,681                      |  | (225)                              |  | (3)%                             
|                |  |                             |  |                            |  |                                    |  |                                  
|Total           |  | 28,852                      |  | 38,605                     |  | (9,753)                            |  | (25)%                            
|                |  |                             |  |                            |  |                                    |  |                                  



Total Cost of
Revenue. The decrease in total gross margin was primarily as a result of the adverse impact of lower total revenues which impacted the margin due to the fixed nature of a significant portion of the Companys cost of revenues and due to
exceptional provisions for loss in net realizable value for excess inventory.



Product. The decrease in absolute dollars resulted from a reduction in the volume of shipments. The percentage increase was primarily due to exceptional provisions for loss in net realizable value for excess
inventory of US$3.0 million, a consequence of the weaker than expected demand from the German retail sector and the fixed nature of a significant portion of the Companys cost of product revenues. In addition, the percentage increase was due to
the impact of the declining value of the dollar as against the euro in the three month period ended January 31, 2003. For example, as sales of the Companys electronic PoS systems in Germany are denominated in euro, the decrease in value of
these sales has meant that the Companys euro costs were greater than the Companys euro revenue in the three months ended January 31, 2003. As a result, the increase in value of the euro relative to other currencies has had a negative
impact on the Companys cost of product revenues in the three month period ended January 31, 2003.



License. The decrease in absolute dollars resulted primarily from involuntary staff terminations during the year. The percentage increase was
primarily due to the adverse impact of lower license revenues which impacted the margin due to the fixed nature of a significant portion of the Companys cost of license revenues.



Service. The decrease in absolute dollars resulted primarily from involuntary staff terminations during the year. The
percentage increase was primarily due to the adverse impact of lower service revenues which resulted in reduced labor utilization as compared to fiscal 2002.



Operating Expenses



|                           |  |                             |  |                            |  |                                    |  |                                  
|-------------------------- |  | --------------------------- |  | -------------------------- |  | ---------------------------------- |  | ---------------------------------
|                           |  | Year Ended January 31,2003  |  | Year EndedJanuary 31, 2002 |  | Increase/(Decrease)from prior year |  | Percentage change from prior
year
|                           |  | (U.S. dollars in thousands) |  |                           
|                           |  |                             |  |                           
|Research and Development   |  | 10,349                      |  | 20,597                     |  | (10,248)                           |  | (50)%                            
|Sales and Marketing        |  | 10,297                      |  | 18,719                     |  | (8,422)                            |  | (45)%                            
|General and Administrative |  | 15,354                      |  | 17,891                     |  | (2,537)                            |  | (14)%                            



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Research and Development. The decrease in research and development expenses in the year ended
January 31, 2003 was primarily due to a reduction in the number of research and development employees from 250 at January 31, 2002 to 160 at January 31, 2003. These staff reductions were primarily due to involuntary staff terminations during the
year as a result of the technological maturing of the Companys electronic commerce products and a reduced investment in products where the market opportunity has not yet developed due to economic conditions.



Sales and Marketing. The decrease in sales and marketing expenses in
the year ended January 31, 2003 was primarily due to a reduction in the number of sales and marketing employees from 77 at January 31, 2002 to 63 at January 31, 2003 and a reduction in commissions and travel costs. These staff reductions were
primarily due to involuntary staff terminations during the year as a result of cost containment efforts initiated to align cost structures with the business. The decrease was also a result of a reduction in direct marketing activities, commission
payments and travel costs.



General and Administrative.
The decrease was as a result of reductions related to the closing of excess facilities and the reduction in the number of general and administrative personnel from 70 at January 31, 2002 to 46 at January 31, 2003 due to involuntary staff
terminations during the year. The reductions resulted from cost containment efforts initiated to align cost structures with the business.



Restructuring charge. The Company recorded restructuring charges of US$4.3 million and US$5.3 million for the years ended January 31, 2003 and
2002, respectively.The restructuring charge in fiscal year ended January 31, 2002 was due primarily to the overlap of positions and facilities as a result of Trintechs acquisitions in fiscal 2001. In connection with these activities,
we reduced the Companys workforce by approximately 115 employees and closed facilities in Austin, Texas and Miami, Florida. In fiscal year ended January 2003, we recorded restructuring charges of US$4.3 million in relation to costs associated
with staff terminations and the closure of excess facilities as the Company concentrated on products with the highest earning potential. The Company reduced its workforce by approximately 125 employees including the agreed resignation of John
McGuire, the Companys President, who resigned effective September 16, 2002, and closed facilities in Princeton, New Jersey; Philadelphia, Pennsylvania; and San Mateo, California. As of January 31, 2003, accrued restructuring charges related
primarily to future lease commitments of US$1.3 million, which we expect to be paid through fiscal 2006.



Amortization of goodwill.On February 1, 2002, the Company adopted SFAS No. 142 and reclassified non-current assets relating to assembled workforce
of US$1.5 million to goodwill and ceased to amortize US$20.5 million of goodwill. As a result of the change in accounting policy, there was no charge for amortization of goodwill in the year ended January 31, 2003. The charge in the year ended
January 31, 2002 of US$27.8 million was a result of the amortization of goodwill recorded in connection with the acquisitions in fiscal 2001.



Amortization of purchased intangible assets. Amortization of purchased intangible assets consists primarily of the amortization of purchased
technology and acquired customer base, recorded in connection with the acquisitions in fiscal 2001. Amortization of purchased intangible assets was US$2.6 million in the fiscal year ended January 31, 2003 compared to US$3.9 million in the fiscal
year ended January 31, 2002, a decrease of 34%. The decrease was due to a write down of purchased intangible assets of US$1.2 million following an impairment review during the fourth quarter of fiscal 2002 and due to the reclassification of
non-current assets of US$1.5 million to goodwill on February 1, 2002, upon adoption of SFAS No. 142.



Impairment of goodwill and purchased intangible assets.During the fourth quarter of fiscal 2002, the Company performed an impairment assessment of
identifiable intangible assets (included in non-current assets), principally purchased technology and acquired customer base, and goodwill recorded in connection with its various acquisitions. The assessment was performed primarily due to the
significant decline in the Companys stock price, the net book value of assets significantly exceeding the Companys market capitalization, the significant under performance of the acquisitions relative to projections and the overall
decline in industry



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growth rates which indicated that this trend might continue for an indefinite period. As a result, the Company recorded a US$38.1 million impairment charge
in the quarter ended January 31, 2002 to reduce other intangible assets and goodwill associated with the acquisitions to their estimated fair value. The estimate of fair value was based upon the discounted estimated cash flows from the sale of the
products acquired for the succeeding three years. The assumptions supporting the estimated cash flows, including the discount rate, reflected managements best estimates. Of the total write down, US$1.6 million was applied to reduce non-current
assets (a non-compete covenant, purchased technology and assembled workforce) to US$15.5 million and US$36.5 million applied to reduce goodwill.



During the fourth quarter of fiscal 2003, the Company completed its annual impairment test and assessments of the carrying value of identifiable
intangible assets and goodwill as required by SFAS 142. The assessment was performed primarily due to the further significant decline in the Companys stock price, the net book value of assets significantly exceeding the Companys market
capitalization and the overall decline in industry growth rates which indicated that this trend might continue for an indefinite period. As a result, the Company recorded a US$16.5 million impairment charge in the quarter ended January 31, 2003 to
reduce other intangible assets and goodwill to their estimated fair values. The goodwill impairment test compared the carrying amount of the Licenses and Services Reporting Segment, to which the goodwill related, to the estimated fair value of the
Reporting Segment. The Company determined the estimated fair value of the Licenses and Services Reporting Segment based upon an independent appraisal, which applied the income approach valuation method, using the discounted estimated cash flows from
Licenses and Services Reporting Segment. The assumptions supporting the estimated cash flows, including the discount rate, reflect managements best estimates. As a result, the Company recorded a US$12.8 million impairment charge in the quarter
ended January 31, 2003 to reduce goodwill to its estimated fair value which reduced the carrying amount of goodwill to US$6.6 million. Other non-current assets were tested for impairment, by comparing the carrying amount of the intangible assets to
their estimated fair value. The Company determined the estimated fair value of the assets based upon an independent appraisal, which applied the income approach valuation method, using the discounted estimated cash flows from the assets. The
assumptions supporting the estimated cash flows, including the discount rate, reflected managements best estimates. As a result, the Company recorded a US$3.7 million impairment charge in the quarter ended January 31, 2003 to reduce other
non-current intangible assets to their estimated fair value.



Stock Compensation. In the fiscal years ended January 31, 2002 and 2003, we recorded stock compensation of US$75,000 and US$20,000, respectively, in connection with the exchange of unvested employee options on the acquisition of
Exceptis Technologies Limited. In addition, in the year ended January 31, 2002 we recorded US$765,000 of stock compensation expense in association with options granted to members of the Companys advisory board, MasterCard and the
Companys Chief Strategy Officer. The stock compensation relating to the Companys advisory board and MasterCard were associated with options to acquire an aggregate of 230,000 ordinary shares (115,000 equivalent ADSs) granted at fair
market value on the date of grant. The options were treated as variable options for accounting purposes under Financial Accounting Standard 123 and Emerging Issues Task Force abstract 96-18 (Accounting for Equity Instruments that are Issued to
Other Than Employees for Acquiring, or in Conjunction with Selling, Goods and Services (EITF 96-18)). As a result, non-cash stock compensation for each period was measured as the fair market value of the option, determined using the
Black-Scholes method on the period end date multiplied by the number of options time-apportioned over their respective vesting periods, less the aggregate amount of stock compensation charges previously recorded for these option grants. In May 2000,
we revised these option grants and vested them immediately, resulting in a measurement date so that in future periods the non-cash compensation charge would be fixed on a quarterly basis.



Interest Income (Expense), Net. Interest income (expense), net consists of interest income and interest expense.
Interest income, net decreased US$2.2 million to US$716,000 of interest income, net in the fiscal year ended January 31, 2003 compared to US$3 million of interest income, net in the fiscal year ended January 31, 2002. The decrease was due to lower
cash balances and lower interest rates.



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Provision for Income Taxes. Provision for income taxes was US$108,000 in the fiscal year ended

January 31, 2003 compared to US$85,000 in provision for income taxes in the fiscal year ended January 31, 2002.



B. Liquidity and Capital Resources



On May 4, 2000, we completed a secondary public offering and received net
proceeds of US$93.5 million from the sale of 2,225,000 ordinary shares. On September 24, 1999, we completed the Companys initial public offering and received net proceeds of approximately US$59.5 million from the sale of 5,887,598 ordinary
shares. In fiscal 1999, we raised an aggregate of US$20.0 million in private placements of 482,765 ordinary shares and 3,000,000 redeemable convertible preference shares. Prior to fiscal 1999, we had satisfied the Companys cash requirements
principally through cash generated by operations, proceeds from the sale of ordinary shares to a single outside investor and borrowings under the Companys bank credit facilities.



The Company has an unsecured overdraft facility of 2.5 million (approximately US$3.1 million) from Bank of Ireland.
Advances under this facility bear interest at the Banks prime overdraft rate, 2.65% as at January 31, 2004. As of January 31, 2004 there was US$0 outstanding under the facility. The facility does not have a stated expiration date, but all
amounts drawn thereunder are repayable on demand. As of January 31, 2004, we had working capital of US$29.6 million, including cash and cash equivalents totaling US$36.9 million.



|                                                    |  |                             |   |  |        |   |  |         |  
|--------------------------------------------------- |  | --------------------------- | - |  | ------ | - |  | ------- | -
|                                                    |  | 2004                        |   |  | 2003   |   |  | 2002    |  
|                                                    |  | (U.S. dollars in thousands) |  
|Net cash provided by operating activities           |  | 1,551                       |   |  | 38,331 |   |  | 12,486  |  
|Net cash used in investing activities               |  | (7,460                      | ) |  | (2,553 | ) |  | (21,486 | )
|Net cash (used in) provided by financing activities |  | (197                        | ) |  | (479   | ) |  | 1,854   |  
|Cash and cash equivalents at the end of period      |  | 36,864                      |   |  | 42,559 |   |  | 6,750   |  



| |  | Net cash provided by operating activities
| | - | -----------------------------------------



Net cash provided by operating activities was US$12.5 million, US$38.3 million and US$1.6 million for the years ended January 31, 2002, 2003 and 2004,
respectively. Net cash provided by operating activities in the year ended January 31, 2002 resulted primarily from net sales of marketable securities of US$39.4 million, partially offset by a loss on operations, excluding the amortization of
goodwill and intangible assets, and stock compensation, of US$21.5 million, and a decrease in the level of current liabilities of US$5.1 million. Net cash provided by operating activities in the year ended January 31, 2003 resulted primarily from
net sales of marketable securities of US$48 million due to the transfer of marketable securities into cash and cash equivalents, partially offset by a loss on operations, excluding the amortization and impairment of goodwill and intangible assets,
and stock compensation, of US$13.5 million, and a decrease in working capital of US$3.8 million. Net cash provided by operating activities in the year ended January 31, 2004 resulted primarily from a reduction in restricted cash deposits of US$1.9
million, a decrease in working capital of approximately US$2.5 million, partially offset by restructuring payments of US$1.6 million and a loss on operations, excluding depreciation, the amortization of intangible assets and the adjustment of
acquisition deferred consideration of US$1.2 million.



| |  | Net cash used in investing activities
| | - | -------------------------------------



Net cash used in investing activities was approximately US$21.5 million, US$2.6 million and US$7.5 million for the years ended January 31, 2002, 2003 and
2004, respectively. Net cash used in fiscal 2002 was primarily related to payments made for the acquisition of the VeriFone ePS product line of US$3.3 million, payments relating to Globeset liabilities of US$9.5 million, payments relating to
Checkline liabilities of US$365,000 and deferred consideration for the Companys fiscal 2001 acquisitions for Sursoft of US$4.2 million and Exceptis Technologies Limited of US$1.3 million and the purchase of property and equipment of US$2.8
million. Net cash used in fiscal 2003 was primarily related to payments relating to Globeset liabilities of US$1.1 million and deferred consideration for the Companys fiscal 2001 acquisitions for Sursoft of US$400,000 and



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Exceptis Technologies Limited of US$763,000 and the purchase of property and equipment of US$283,000. Net cash used in fiscal 2004 was primarily related to
payments relating to the acquisition of DataFlow Services of US$3.2 million and payments relating to Globeset and Exceptis Technologies Ltd. liabilities of US$2.4 million and US$149,000, respectively, and deferred consideration for the
Companys fiscal 2001 acquisitions for Sursoft of US$451,000 and the purchase of property and equipment of US$605,000.



| |  | Net cash (used in) provided by financing activities
| | - | ---------------------------------------------------



Net cash provided by financing activities was approximately US$1.9 million for the year ended January 31, 2002. Net cash used in financing activities was
US$479,000 and US$197,000 for the years ended January 31, 2003 and 2004. Net cash provided by financing activities in fiscal 2002 related to the net proceeds of the sale of shares in connection with the Companys employee benefit plans,
partially offset by principal payments on capital leases. Net cash used by financing activities in the year ended January 31, 2003 primarily related to principal payments on capital leases and the purchase of Trintech ordinary shares. Net cash used
by financing activities in the year ended January 31, 2004 primarily related to the purchase of Trintech ordinary shares and principal payments on capital leases, partially offset by the net proceeds of the sale of shares in connection with the
acquisition of CW & Associates, Inc., doing business as DataFlow Services, and the sale of shares in connection with employee benefit plans. In July 2001, 2002 and 2003, the Companys shareholders approved an agreement which gave the Board
the authority to engage in the repurchase of the Companys outstanding Ordinary Shares. Under the program, up to US$5.0 million of Trintechs Ordinary Shares could be acquired on the open market, or in negotiated or block trades. As of
January 31, 2004, the Company had repurchased 617,956 shares at a cost of approximately US$652,000. As of January 31, 2004 approximately US$4.35 million remained available for future repurchases under this program.



As of January 31, 2004, contractual obligations relating to the
Companys facilities lease commitments totaled US$14.8 million, payable through fiscal 2015, including future minimum payments for abandoned properties, which have been provided for of US$981,000. The Company has estimated it will incur US$11.8
million in net payments over the remaining period of the leases of which US$2.6 million will be paid out in fiscal 2005 and US$9.2 million thereafter.



We have no material commitments for capital expenditures or strategic investments. Under the terms of the Companys acquisition agreement to acquire
Checkline plc, we will be required to pay up to US$1.25 million to the former stockholders of Checkline plc if agreement on certain performance criteria being met is reached.



Under the terms of the Companys acquisition agreement with Sursoft, amended in March 2003, the Company paid
approximately US$451,000 to Sursoft shareholders in April 2003. In addition, the Company will be required to pay an additional final amount of either US$150,000 contingent on the achievement of agreed performance criteria or US$100,000 during fiscal
2005.



Under the terms of the Companys acquisition
agreement to acquire CW & Associates, Inc., the Company will be required to pay additional performance related contingent consideration equal to fifty percent of profits, as defined in the purchase agreement, earned by the acquired business for
each of the financial years ending January 31, 2005 and 2006. The additional contingent consideration is subject to certain top-up provisions from profits for the year ending January 31, 2007, if the aggregate payments under this provision for
fiscal 2005 and fiscal 2006 are below US$2.5 million.



The
Companys future liquidity and capital requirements will depend upon numerous factors including the cost and timing of expansion of product development efforts and the success of these development efforts, the cost and timing of expansion of
sales and marketing activities, the extent to which the Companys existing and new products gain market acceptance, market developments, the level and timing of license and product revenues and available borrowings under line of credit
arrangements.



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We believe that funds available under the Companys credit facility and cash and cash equivalents on
hand will be sufficient to meet the Companys projected working capital requirements for at least the next 12 months. However, the underlying assumed levels of revenues and expenses may prove to be inaccurate. We may be required to finance any
additional requirements within the next twelve months or beyond through additional equity, debt financings or credit facilities.We may not be able to obtain additional financings or credit facilities, or if these funds are available, they
may not be available on satisfactory terms. If funding is insufficient at any time in the future, we may be unable to develop or enhance the Companys products or services, take advantage of business opportunities or respond to competitive
pressures. If we raise additional funds by issuing equity securities, dilution to existing shareholders will result.



C. Research and Development



For a discussion of the Companys research and development activities, patents and licenses, please see Item 4.B Information on the
CompanyBusiness Overview.



D. Trend Information



For a discussion of significant recent trends in the Companys
financial condition and results of operations, please see Item 5.A Operating and Financial Review and ProspectusOperating Results and 5.B Operating and Financial Review and ProspectsLiquidity and Capital
Resources.



E. Off-Balance Sheet Arrangements



The Company has no material off-balance sheet arrangements as defined in
Item 303(a)(4)(ii) of Regulation S-K.



F. Tabular Disclosure of Contractual
Obligations



The table below presents the principal
categories of our contractual obligations as of January 31, 2004:



|                                   |  |                             |  |                  |  |           |  |           |  |                  
|---------------------------------- |  | --------------------------- |  | ---------------- |  | --------- |  | --------- |  | -----------------
|Contractual obligations            |  |                            
|                                   |  | Payments due by period     
|                                   |  | Total                       |  | Less than 1 year |  | 1-3 years |  | 3-5 years |  | More than 5 years
|                                   |  | (U.S. dollars in thousands)
|Capital Lease Obligations          |  | 462                         |  | 378              |  | 84        |  |          |  |                 
|Operating Lease Obligations        |  | 14,812                      |  | 3,277            |  | 5,264     |  | 2,965     |  | 3,306            
|Acquisition Deferred Consideration |  | 2,650                       |  | 150              |  | 1,250     |  | 1,250     |  |                 
|Other Long-Term Liabilities        |  | 157                         |  |                 |  | 157       |  |          |  |                 
|                                   |  |                             |  |                  |  |           |  |           |  |                  
|Total                              |  | 18,081                      |  | 3,805            |  | 6,755     |  | 4,215     |  | 3,306            
|                                   |  |                             |  |                  |  |           |  |           |  |                  



G. Recent Accounting Pronouncements



In June 2002, the FASB issued SFAS No. 146,
Accounting for Exit or Disposal Activities. This statement addresses the recognition, measurement and reporting of costs associated with exit and disposal activities. SFAS No. 146 is applicable to restructuring activities and costs
related to terminating a contract that is not a capital lease and to one time benefit arrangements received by employees who are involuntarily terminated. SFAS No. 146 supercedes EITF Issue No. 94-3, Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). Under SFAS No. 146 the cost associated with an exit or disposal activity is recognized in the periods in which it is incurred
rather than at the date the Company committed to the exit plan. This statement is effective for exit or disposal activities



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initiated after December 31, 2002, with earlier adoption encouraged. Previously issued financial statements will not be restated. The provisions of EITF
Issue No. 94-3 will continue to apply for exit plans initiated prior to the adoption of SFAS No. 146. The timing of recognition of costs of restructuring plans initiated and implemented by the Company in fiscal 2004 has been in accordance with SFAS
146.



In November 2002, the Financial Accounting Standards
Board issued Interpretation No. 45 Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, (FIN 45). FIN 45 requires a guarantor to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation undertaken by it in issuing the guarantee. It also expands the disclosure requirements in the financial statements of the guarantor with respect to its obligations under
certain guarantees that it has issued. The Company is required to adopt the initial recognition and initial measurement accounting provisions of this interpretation on a prospective basis to guarantees issued or modified after December 31, 2002. The
Company does not anticipate that the adoption will have a material effect on the Companys financial position, results of operations or cash flows. Application of FIN 45 had no material impact on the consolidated financial statements of the
Company as it had no guarantees in fiscal 2004 or fiscal 2003.



In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure (SFAS 148). This statement amends SFAS Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure
requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and of the effect of the method used on reported results. The provisions of
SFAS 148 are effective in fiscal years ending after December 15, 2002 and interim periods beginning after December 15, 2002. As of January 31, 2004, the Company has elected not to change to the fair value based method of accounting for stock-based
employee compensation.



In January 2003, the FASB released FASB
Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. FIN 46 requires that all primary beneficiaries of variable interest entities consolidate that entity. FIN 46 is effective immediately for variable
interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest
entities in which an enterprise holds a variable interest it acquired before February 1, 2003. In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to clarify some of the provisions of the interpretation and to defer the
effective date of implementation for certain entities. Under the guidance of FIN 46R, entities that do not have interests in structures that are commonly referred to as special purpose entities are required to apply the provisions of the
interpretation in financial statements for periods ending after March 14, 2004. The Company did not create a variable interest entity after January 31, 2003 and did not have a variable interest entity as of January 31, 2004. The adoption of this
Statement did not have a material effect on the Companys consolidated financial statements for the year ended January 31, 2004.



The Financial Accounting Standards Board issued Statement No. 149,  Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, (SFAS 149) in April 2003. SFAS 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement requires contracts with comparable characteristics be accounted for similarly. In
particular, this Statement (a) clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative as discussed in SFAS No. 133, (b) clarifies when a derivative contains a financing component and (c)
amends the definition of an underlying to conform it to language used in FASB Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others. This Statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships



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designated after June 30, 2003. Application of the new rules is not expected to have any material impact on the consolidated financial statements of the
Company.



The Financial Accounting Standards Board issued SFAS
No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, (SFAS 150) in May 2003. SFAS 150 establishes standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously
classified as equity. Statement 150 is effective for financial instruments entered into or modified after May 31, 2003. Application of SFAS 150 had no material impact on the consolidated financial statements of the Company as it had no financial
instruments in fiscal 2004.



In May 2003, the consensus on EITF
Issue No. 01-08, Determining Whether an Arrangement Contains a Lease, was issued. The guidance in the consensus applies to the purchase or sale of goods and services under various types of contracts, including outsourcing arrangements.
Based on the criteria in the consensus, both parties to an arrangement are required to determine whether the arrangement includes a lease within the scope of SFAS No. 13, Accounting for Leases. The new requirement applies prospectively
to new or modified arrangements for reporting periods beginning after May 28, 2003. The Company did not enter into or modify any arrangements covered by EITF 01-08 during fiscal year 2004 and, as such, the adoption of EITF No. 01-08 did not have an
effect on the Companys consolidated financial statements.



In August 2003, the Emerging Issues Task Force reached consensus on EITF Issue No. 03-5 (EITF 03-5), Applicability of AICPA Statement of Position 97-2, Software Revenue Recognition , to Non-Software
Deliverables in an Arrangement Containing More-than-Incidental Software. EITF 03-5, which became effective for the Company on October 1, 2003, provides guidance on determining whether non-software deliverables are included within the scope of
SOP 97-2 and, accordingly, whether multiple element arrangements are to be accounted for in accordance with EITF Issue No. 00-21 or SOP 97-2. The provisions of EITF 03-5 did not have an effect on the Companys consolidated financial statements.



In December 2003, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 104, Revenue Recognition, which amends SAB 101, Revenue Recognition in Financial Statements. SAB 104s primary purpose is to rescind accounting guidance contained in SAB 101 related
to multiple-element revenue arrangements, superseded as a result of the issuance of EITF 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. Additionally SAB 104 rescinds the SECs Revenue Recognition in Financial
Statements Frequently Asked Questions and Answers, or FAQ, issued with SAB 101 that had been codified in SEC Topic 13, Revenue Recognition. Selected portions of the FAQ have been incorporated into SAB 104. While the wording of SAB 104
has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104. Adoption of this standard had no material impact on the Companys financial statements.



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Item 6.Directors, Senior Management and Employees



A. Directors and Senior Management



The following table presents information regarding the Companys directors and executive officers as of April 30, 2004:



|                         |  |     |  |                                                  
|------------------------ |  | --- |  | -------------------------------------------------
|Name                     |  | Age |  | Position                                         
|Executive Directors      |  |     |  |                                                  
|Cyril P. McGuire         |  | 44  |  | Chairman, Chief Executive Officer and Director(1)
|R. Paul Byrne            |  | 39  |  | Chief Financial Officer and Director             
|Non-executive Directors  |  |     |  |                                                  
|Kevin C. Shea            |  | 53  |  | Director (1)(2)                                  
|Robert M. Wadsworth      |  | 43  |  | Director(1)(2)                                   
|Trevor D. Sullivan       |  | 67  |  | Director(2)                                      
|Other Executive Officers |  |     |  |                                                  
|John M. Harte            |  | 59  |  | Executive Vice President                         

---

|(1) | Member of the Compensation Committee
|--- | ------------------------------------

|(2) | Member of the Audit Committee
|--- | -----------------------------



Cyril P. McGuire, one of the Companys co-founders, has served as a director since 1987, as Chairman of the Board since August 1999 and as the
Companys Chief Executive Officer since February 2002. From 1991 to August 1999, Mr. McGuire served as the Companys president, and from 1987 to 1991, Mr. McGuire served as the Companys managing director. Before co-founding Trintech,
Mr. McGuire worked with the Industrial Credit Corporation plc, a leading Irish commercial bank, from 1982 to 1987, where his responsibilities included the appraisal of electronic industry investment projects. Mr. McGuire received a bachelor of
commerce and master of business studies from University College Dublin. Mr. McGuire is a member of the Board of the Michael Smurfit Graduate School of Business and a member of the Marketing Institute of Ireland. Mr. McGuire currently resides in
Dublin, Ireland.



R. Paul Byrne has been the
Companys chief financial officer since January 1996. Since February 1997,

Mr. Byrne has also served as a director and secretary. Before joining us,
Mr. Byrne was group financial controller and publisher at Lafferty Publications Limited, a publishing company located in Dublin, from September 1989 to December 1995. From 1985 through 1989, Mr. Byrne was an accountant with Price Waterhouse, a large
accounting firm. Mr. Byrne received a bachelor of commerce and a diploma in professional accounting from University College Dublin and is a fellow of the Institute of Chartered Accountants in Ireland. Mr. Byrne currently resides in Dublin, Ireland.



Kevin C. Sheahas served as a director since January
2000 and from October 2001 to May 2002. Mr. Shea served as chief strategy officer. From January 2000 to October 2001, Mr. Shea served as Chief Operating Officer. Prior to joining us, Mr. Shea was chief financial officer of National Data Corporation
from May 1998 to December 1999. Mr. Shea was executive vice president of corporate strategy and business development from June 1996 until May 1998 and was general manager of the Integrated Payment Systems division of National Data Corporation from
1992 to 1996. Prior to joining National Data Corporation, he held senior executive positions at Citicorp and First Interstate Bank Corporation. Mr. Shea received a bachelors of social science from the State University of New York. Mr. Shea currently
resides in the United States.



Trevor D. Sullivan has
served as a director since 1991. From 1991 to August 1999, Mr. Sullivan was the chairman of the Companys board of directors. From 1987 to 1990, Mr. Sullivan was managing director of Memorex Ireland, a computer products company, and, from 1985
until 1987, Mr. Sullivan was vice president, customer operations of Memorex International, a computer products company. From 1981 until 1985, Mr. Sullivan held other senior management positions at Memorex International, a computer products
company. Before 1981, Mr. Sullivan held several senior management positions at IBM, a computer company. Mr. Sullivan currently resides in Dublin, Ireland.



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Robert M. Wadsworth has served as a director since September 1998. Since 1986, Mr. Wadsworth has
been a general partner of HarbourVest Partners LLC, a private investment company. Mr. Wadsworth has served as the Managing Director of HarbourVest Partners LLC since 1997. Before 1986, Mr. Wadsworth worked for Booz, Allen & Hamilton, an
international consulting company, specializing in the areas of operations strategy and manufacturing productivity. Mr. Wadsworth currently serves on the advisory boards of several US venture firms and on the board of directors of ePresense, Inc., a
web design and development company, Switchboard, Inc., an Internet-based local merchant networking company, Concord Communications, Inc., an Internet infrastructure company, and Network Engines, Inc., a network infrastructure company. Mr. Wadsworth
received his bachelor of science degree, magna cum laude, in systems engineering and computer science from the University of Virginia, and his master in business administration, with distinction, from Harvard Business School. Mr. Wadsworth currently
resides in the United States.



John M. Harte joined us
in August 1999 as the Companys executive vice president. From 1993 to 1999, Mr. Harte served as president and chief executive officer of NeoVista Software Inc., a provider of data mining services and a developer of solutions for knowledge
discovery in databases. Mr. Harte has sat on the board of directors of NeoVista Software Inc. since 1996. From 1987 to 1992, Mr. Harte held senior management positions in Alliant Computer Systems Inc., a manufacturer of standards based parallel
supercomputers. From 1989 to 1992, Mr. Harte served as vice president, worldwide sales, marketing and services, and from 1987 to 1989 he served as president European operations. Between 1987 and 1988, Mr. Harte held various sales and marketing
positions in Floating Point Systems Inc., a systems integration and software supplier. Mr. Harte holds a bachelor of science in physics degree from Exeter University, United Kingdom. Mr. Harte currently resides in the United States.



The Companys Advisory Board



In March 1999, we established an advisory board consisting of members from
the banking, smart card and Internet industries. The role of the advisory board is to provide insight and consultation on industry developments and trends that affect us. The members of the advisory board also provide us with a valuable
international profile and contacts in the payment industry. The advisory board has no corporate authority under the Companys memorandum or articles of association. The members of the advisory board are as follows:



|                 |  |     |  |            
|---------------- |  | --- |  | -----------
|Name             |  | Age |  | Position   
|Edmund Jensen    |  | 66  |  | Chairperson
|Magdalena Yesil  |  | 45  |  | Member     
|Robert Schneider |  | 55  |  | Member     
|Patrick Byrne    |  | 60  |  | Member     
|Denis Goggin     |  | 59  |  | Member     
|David Leech      |  | 54  |  | Member     



Edmund Jensen,
a former director of the Company, has served as the chairman of the Companys advisory board since May 1999. From 1994 until 1999, he was the president and chief executive officer of VISA International, a card association. From 1974
until 1994, he held various positions at US Bancorp. Mr. Jensen served as vice president of corporate planning and development of US Bancorp from 1974 until 1991, as chief operating officer from 1991 until 1993 and as vice-chairman from 1993 until
1994.



Robert Schneider has served as a member of the
Companys advisory board since June 1999. Mr. Schneider founded SCM Microsystems, Inc., a provider of smart-card products and technologies, as its president, chief executive officer, general manager and chairman of the board in 1990. Mr.
Schneider currently serves as chairman of the board and managing director of SCM Microsystems GmbH, a German subsidiary of SCM Microsystems, Inc. Mr. Schneider holds a degree in engineering from HTBL Salzburg and a B.A. degree from Akademie for
business administration in Uberlingen.



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Magdalena Yesil has served as a member of the Companys advisory board since June 1999. Since
1998, Ms. Yesil has been a general partner in U.S. Ventures, a venture capital firm. From August 1996 until April 1997, Ms. Yesil was the chief executive officer of MarketPay, an e-commerce software company, and from 1994 until August 1996, Ms.
Yesil was a co-founder and vice-president of marketing and technology of CyberCash, a software company. Ms. Yesil has received a B.A. in engineering from Stanford University.



Patrick Byrne joined the Companys Advisory Board in April 2001. He was formerly Head of Payments, Credit Card,
Electronic Business and Information Systems of Bank of Ireland for more than twenty years. He has also served as Chairman of the Irish Payment Services Organization and Irish Banks Nominee on the European Payment Strategy Group. He also served on
the Visa Advisory Board and the Europay Regional Board for a number of years.



Denis Goggin joined the Companys Advisory Board in April 2001. He previously served as President and CEO of Visa International/Asia Pacific Region, and has nearly three decades of successful international
banking assignments with Chase Manhattan.



David Leech
joined the Companys Advisory Board in October 2002. Mr. Leech is currently Managing Director of Optomise Limited, a Consulting Company. For 12 years to October 2002, he served as Managing Director and CEO of Kindle Banking Systems, part of the
Misys Group plc. Prior to that, he worked for over 15 years with IBM in Ireland, USA and Belgium.



We currently do not provide cash compensation to persons for their services as members of the Companys advisory board. However, each advisory board
member is granted an option to acquire up to 60,000 ordinary shares (30,000 equivalent ADSs) under the Companys directors and consultants share option scheme in return for service which he/she provides as a member of the advisory board.



We do not have any currently outstanding loans to any members
of the Companys advisory board. In addition, we do not have any currently outstanding guarantees for the benefit of any members of the Companys advisory board.



Limitations on Liability and Indemnification Matters



In general, Section 200 of the Irish Companies Act, 1963 prohibits us from
exempting any of the Companys officers or auditors from, or indemnifying any of them against, any liability arising from any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to us. Section 200 does,
however, provide that we may indemnify any of the Companys officers or auditors against any liability incurred by him in defending proceedings, whether civil or criminal, if judgment is given in his favor or the officer or auditor is
acquitted. Additionally, upon the Companys election, we can provide an indemnity under Section 200 where an officer or auditor is granted relief by a court under either Section 391 of the Irish Companies Act of 1963 or Section 42 of the Irish
Companies (Amendment) Act, 1983. The Companys articles of association contain a provision for this indemnity.



The Companys subsidiary, Trintech, Inc., has agreed to indemnify each of its directors and officers and each of the officers and directors serving
at the request of Trintech, Inc. as the Companys directors and officers against liabilities and expenses incurred by them in connection with claims made by reason of their being a director or officer.



We have obtained directors and officers insurance for some of the
Companys directors, officers, affiliates, partners or employees for liabilities relating to the performance of their duties.



At present, there is no pending material litigation or proceeding involving any of the Companys officers or directors where indemnification will be
required or permitted. We are not aware of any threatened material litigation or proceeding which may result in a claim for indemnification of an officer or director.



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B. Compensation



The aggregate compensation paid by the Company and its subsidiaries to the Companys directors and executive officers, including former directors and
executive officers, in the year ended January 31, 2004 totaled US$1,429,765. All of the US$1,429,765 was paid by the Companys subsidiaries. Amounts paid include salary and pension, severance, retirement and other similar benefits.



The following table sets forth information concerning the options granted
to the Companys directors and executive officers as of January 31, 2004:



|                 |  |                                        |  |                    |             |                 |          
|---------------- |  | -------------------------------------- |  | ------------------ | ----------- | --------------- | ---------
|Name             |  | Number of Options (in Equivalent ADSs) |  | Exercise Price ADS |             | Expiration Date
|R. Paul Byrne    |  | 459,266                                |  | $                  | 2.22$54.00 |                 | 20042010
|John Harte       |  | 287,500                                |  |                    | 1.0722.72  |                 | 20062010
|Cyril P. McGuire |  | 227,500                                |  |                    | 2.227.28   |                 | 20042010
|Kevin C. Shea    |  | 136,250                                |  |                    | 2.057.28   |                 | 20062010
|Trevor Sullivan  |  | 55,000                                 |  |                    | 2.2230.00  |                 | 20062010
|Robert Wadsworth |  | 55,000                                 |  |                    | 2.2230.00  |                 | 20062010



We have entered into
indefinite term employment agreements with each of Cyril McGuire, R. Paul Byrne and John Harte under which each receives an annual base salary, an annual bonus and all standard benefits accorded to the Companys other executives. In addition,
each of these executives will be entitled to participate in and receive options from the Companys employee share option schemes.



We do not have any currently outstanding loans to any of the Companys executive officers or directors. In addition, we do not currently have any
outstanding guarantees for the benefit of any of the Companys executive officers or directors.



C. Board Practices



The
Companys memorandum and articles of association authorize no fewer than three or more than fifteen directors. The Companys shareholders may, from time to time, increase or reduce the number of directors by ordinary resolution. We
presently have five directors.



Generally, directors are
elected by the Companys shareholders at an annual general meeting by ordinary resolution, a resolution adopted by a majority of the votes cast on the resolution by the Companys shareholders entitled to vote on the matter. The
Companys shareholders may also, by ordinary resolution, appoint persons at extraordinary meetings to fill vacancies created by retirement or by the increasing of the size of the board. The Companys shareholders may also determine the
retirement rotation for any additional directors. Additionally, the Companys shareholders may by ordinary resolution at any shareholders meeting remove any director and appoint another person in his place, subject to compliance with the
relevant statutory and notice provisions and to the rights of the removed director to compensation or damages arising from the removal.



The Companys directors may also, at any time and from time to time, appoint any person to the board to fill a vacancy or as an additional director.
Any director so appointed will serve until the next annual general meeting of the shareholders and will be subject to re-election by the shareholders at that meeting.



The Companys directors are subject to retirement by rotation. At each annual meeting of the shareholders, one third of
the directors, rounded down to the next whole number if it is a fractional number, are required to retire from office. The retiring directors are those who have been in office for the longest period of time. Retirement for persons who became
directors or were reappointed on the same day is determined by lot, unless otherwise agreed. Any director who retires at an annual meeting may be immediately reappointed by the shareholders.



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Under the Companys current board composition, at least two of the Companys directors are required to retire at each annual general meeting of the
shareholders. The following table sets forth certain information concerning the Companys Board of Directors:



|                    |  |                       |  |                          |  |                                            
|------------------- |  | --------------------- |  | ------------------------ |  | -------------------------------------------
|Name                |  | Position              |  | Date Board Service Began |  | Termination /Renewal Date of Current Office
|Robert M. Wadsworth |  | Director              |  | 1998                     |  | Annual General Meeting 2005                
|Kevin C. Shea       |  | Director              |  | 2000                     |  | Annual General Meeting 2006                
|Cyril P. McGuire    |  | Director/Chairman/CEO |  | 1987                     |  | Annual General Meeting 2004                
|Trevor D. Sullivan  |  | Director              |  | 1991                     |  | Annual General Meeting 2004                
|R. Paul Byrne       |  | Director/CFO          |  | 1997                     |  | Annual General Meeting 2005                



There are no
agreements providing for the payment of any consideration to any non-executive Board member upon the termination of his services to the Company.



Board Committees



The Companys board of directors may delegate aspects of its responsibilities to committees of the board. The Companys board of directors has
established an audit committee and a compensation committee. Each committee has a written charter approved by the Board.



Audit Committee



The responsibilities of the Audit Committee include reviewing the Companys annual and quarterly financial statements and taking steps to ensure that
an independent accounting firm reviews the Companys financial statements prior to the Company filing them with the Securities and Exchange Commission or other regulatory bodies. The members of the Audit Committee are Kevin Shea, Robert
Wadsworth and Trevor Sullivan (Chairman). The Board of Directors has determined that Kevin Shea and Robert Wadsworth are Audit Committee Financial Experts as defined by the applicable rules and regulations of the Securities and Exchange Commission.
The Audit Committee recommends to the Companys board of directors the selection of an independent accounting firm and approves the fees and other compensation to be paid to the Companys accounting firm. The Audit Committee shall also:



| |  | review the performance of the Companys independent accounting firm; and
| | - | ------------------------------------------------------------------------



| |  | review the adequacy of the internal financial and accountancy controls.
| | - | -----------------------------------------------------------------------



The activities and responsibilities above constitute a general description of the terms of reference of the Audit Committee, which are not limited to
solely those outlined above.



Compensation Committee



The Compensation Committee establishes and reviews
overall policy and structure with respect to compensation matters, including the determination of compensation arrangements for the Companys directors, executive officers and key employees. The Compensation Committee is also responsible for
the administration and award of options to purchase shares pursuant to the Companys option schemes. The members of the Compensation Committee are Cyril McGuire, Kevin Shea and Robert Wadsworth (Chairman).



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D. Employees



We employed the following numbers of employees as of January 31, 2002, 2003 and 2004:



|                                  |  |                   |  |      |  |     
|--------------------------------- |  | ----------------- |  | ---- |  | ----
|                                  |  | As of January 31,
|Category                          |  | 2002              |  | 2003 |  | 2004
|Research and development          |  | 250               |  | 160  |  | 136 
|Professional and support services |  | 114               |  | 91   |  | 104 
|Sales and marketing               |  | 77                |  | 63   |  | 54  
|Administration                    |  | 70                |  | 46   |  | 42  
|                                  |  |                   |  |      |  |     
|Total                             |  | 511               |  | 360  |  | 336 
|                                  |  |                   |  |      |  |     



Of the Companys
total number of employees, as of January 31, 2004, 114 are located in Ireland, 62 are located in Europe outside Ireland, 122 are located in North America and 38 are located in South America. The decrease in employee headcount in fiscal year 2003 and
fiscal year 2004 was primarily as a result of involuntary staff terminations as a result of restructuring plans.



None of the Companys employees are represented under collective bargaining agreements.



E. Share Ownership



For information concerning the beneficial ownership of the Companys ADSs by the Companys officers and directors, see Item 7 Major
Shareholders and Related Party Transactions.



Option Schemes



We currently maintain
option schemes for the benefit of employees. These schemes were created for the benefit of employees, directors and consultants of companies in the Trintech Group and for the purpose of attracting and retaining the best available personnel to
promote the success of the Companys business. The aggregate number of shares which may be issued pursuant to the Companys employee benefit plans is 6,200,000 ordinary shares (3,100,000 equivalent ADSs) to be allocated among the plans by
the board of directors. The 6,200,000 ordinary share limit will be reduced by the number of shares authorized for issuance in accordance with the options granted or rights acquired under the other plans. The aggregate share limit of 6,200,000
ordinary shares can only be altered by an ordinary resolution approved by shareholders representing a majority of the Companys ADSs then outstanding.



Trintech Group plc share option 1997 scheme



We established the share option 1997 scheme on May 28, 1997. The 1997 scheme was approved by the Companys shareholders on November 21, 1997. The
purpose of the 1997 scheme is to attract and retain the best available personnel to promote the success of the Companys business. We are required to keep available sufficient authorized but unissued shares to satisfy the Companys
obligations under the plan. The 1997 scheme will terminate on May 27, 2007, unless previously terminated by the board of directors.



Under the 1997 scheme, all of the Companys key employees and executive directors as well as those of the Companys subsidiaries are eligible to
receive grants of nonstatutory options. In addition, US resident employees and executive directors are eligible to receive grants of incentive stock options intended to qualify under Section 422 of the U.S. Internal Revenue Code of 1986.



The 1997 scheme is administered by a compensation committee, which selects
the persons to whom options will be granted, determines the number of shares to be made subject to each grant and prescribes other terms and



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conditions, including the type and amount of consideration to be paid upon exercise and the vesting schedules in connection with each grant and makes all
other decisions relating to the operation of the scheme. The board of directors may amend or modify the 1997 scheme at any time.



As of January 31, 2004, 1,026,236 ordinary shares (513,118 equivalent ADSs) have been issued upon the exercise of share options granted under the 1997
scheme and 4,218,742 ordinary shares (2,109,371 equivalent ADSs) are subject to outstanding options. The weighted exercise price for all outstanding options to purchase equivalent ADSs under the 1997 scheme is US$8.89, or approximately 7.18
per equivalent ADS.



Trintech Group PLC directors and
consultants share option scheme



On April 22, 1998, we
established the directors and consultants share option scheme. The purpose of the scheme is to attract and retain the best available directors and consultants and to promote the success of the Companys business. The directors and consultants
scheme will terminate on April 21, 2008, unless previously terminated by the board of directors.



Under the directors and consultants scheme, all of the Companys directors and consultants as well as those of the Companys subsidiaries are
eligible to receive grants of nonstatutory options. In addition, US resident directors and consultants are eligible to receive a grant of incentive stock options intended to qualify under Section 422 of the U.S. Internal Revenue Code of 1986. The
directors and consultants scheme is administered by a compensation committee, which selects the persons to whom options will be granted, determines the number of shares to be made subject to each grant and prescribes other terms and conditions,
including the type and amount of consideration to be paid upon exercise and the vesting schedules in connection with each grant and makes all other decisions relating to the operation of the scheme. The board of directors may amend or modify the
directors and consultants scheme at any time.



As of January
31, 2004, 20,708 ordinary shares (10,354 equivalent ADSs) have been issued upon the exercise of share options granted under the directors and consultants scheme, and 282,500 ordinary shares (141,250 equivalent ADSs) are subject to outstanding
options. The weighted exercise price for all outstanding options to purchase equivalent ADSs under the directors and consultants scheme is US$4.75, or approximately 3.84 per equivalent ADS.



Exceptis Technologies Limited share option scheme



On November 20, 2000, we assumed certain outstanding options under the
Exceptis Technologies Limited share option scheme pursuant to the Companys acquisition of Exceptis Technologies Limited.



Under the Exceptis Technologies Limited share option scheme, all of Exceptis Technologies Limiteds executives and employees employed on a permanent
basis as well as those of its subsidiaries were eligible to receive grants of share options in Exceptis Technologies Limited. The Exceptis Technologies Limited share option scheme is administered by the compensation committee, which selects the
persons to whom options will be granted, determines the number of shares to be made subject to each grant and prescribes other terms and conditions, including the type and amount of consideration to be paid upon exercise and the vesting schedules in
connection with each grant. The board of directors may amend, modify, or terminate the Exceptis Technologies Limited share option scheme at any time.



In connection with the assumption of the plan, we assumed options granted under the Exceptis Technologies Limited share option scheme in exchange for
options over 43,326 of the Companys ordinary shares (21,663 equivalent ADSs). The board of directors has decided not to issue any additional options under the Exceptis Technologies Limited share option scheme. As of January 31, 2004, 13,998
ordinary shares (6,999 equivalent ADS) are subject to outstanding options. The weighted exercise price for all outstanding options to purchase equivalent ADSs under the Exceptis Technologies Limited share option scheme is US$10.13, or approximately
8.18 per equivalent ADS.



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Trintech savings related share option scheme 1999



On August 23, 1999, we obtained shareholder approval for the establishment
of the Trintech employee savings related share option scheme 1999 for the Companys Irish employees.



The savings related share option scheme applies to all the Companys qualifying Irish employees and executive directors and is an approved scheme
under Schedule 12A of the Taxes Consolidation Act 1997 of the Republic of Ireland.



All employees and executive directors who are tax resident in Ireland are eligible to participate in the savings related share option scheme.



Under the savings related share option scheme, participants must enter into a savings contract with a Revenue certified
savings carrier to save between 12 and 317 a month for a period of three, five or seven years to fund option exercise. Participants are granted an option on the basis of the amount that the Participant has agreed to save. Options may be
granted at a discount of up to 15% of the market value (by reference to Nasdaq dealing prices) of the ordinary shares underlying the options.



Grants of options under the savings related share option scheme may vary as between participants according to level of remuneration, length of service or
other factors relating to their position.



Options granted
under the savings related share option scheme are not transferable. Options may only be exercised by the participant or, in the event of his death, his personal representative. The savings related share option scheme will terminate ten years after
its adoption by the board of directors unless otherwise terminated before that date by the board of directors. The board of directors has power to amend the savings related share option scheme subject to the consent of the Irish Revenue
Commissioners. As of January 31, 2004 no shares had been issued under this scheme.



1999 employee share purchase plan



On August 23, 1999, we obtained shareholder approval for the establishment of the Trintech 1999 employee share purchase plan for the Companys U.S. employees. The 1999 share purchase plan is intended to qualify
under Section 423 of the Code and contains consecutive, overlapping, twenty-four month offering periods. Each offering period includes four six-month purchase periods. The offering periods generally start on the first trading day on or after March 1
and September 1 of each year.



The Companys U.S.
employees are eligible to participate if they are customarily employed by us or any participating subsidiary for at least 20 hours per week and more than five months in any calendar year. However, any employee who immediately after grant owns stock
with 5% or more of the total combined voting power or value of all classes of the Companys capital shares, or holds rights to purchase shares under the Companys employee share purchase plans that accrue at an annual rate exceeding
US$25,000 worth of shares for each calendar quarter may not be granted an option to purchase shares under the 1999 share purchase plan. The 1999 share purchase plan permits participants to purchase common stock through payroll deductions of up to
15% of the participants compensation. Compensation is defined as the participants base straight time gross earnings, bonuses and commissions but is exclusive of payments for overtime, shift premium payments, incentive compensation,
incentive payments and other compensation.



The total amounts
deducted and accumulated from the participants pay are used to purchase ordinary shares at the end of each purchase period. The price of ordinary shares purchased under the 1999 share purchase plan is generally 85% of the lower of the fair
market value of the ordinary shares at the beginning of the offering period or at the end of the purchase period. If the fair market value at the end of a purchase period is less than the fair market value at the beginning of the offering period,
the participants will be withdrawn from the current offering



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period following exercise and automatically enrolled in a new offering period. The new offering period will use the lower fair market value as of the first
date of the new offering period to determine the purchase price for future purchase periods. Participants may end their participation at any time during an offering period, and they will be paid their payroll deductions to date. Participation ends
automatically upon termination of employment with us. Rights granted under the 1999 share purchase plan are not transferable by a participant other than by will, the laws of descent and distribution, or as otherwise provided under the 1999 share
purchase plan. The 1999 share purchase plan provides that, in the event of a merger with or into another corporation or a sale of substantially all of the Companys assets, each outstanding option may be assumed or substituted for by the
successor corporation. If the successor corporation refuses to assume or substitute for the outstanding options, the offering period then in progress will be shortened and a new exercise date will be set. The 1999 share purchase plan will terminate
in 2009. The board of directors has the authority to amend or terminate the 1999 share purchase plan, except that no board action may adversely affect any outstanding rights to purchase shares under the 1999 share purchase plan. As of January 31,
2004, 211,696 Ordinary Shares (105,848 equivalent ADSs) had been issued under this plan.



Trintech share option exchange program 2001



In November 2001, Trintechs Board of Directors approved a Voluntary Stock Option Exchange Program, in which eligible employees had the opportunity to exchange unexercised options granted under the 1997 Trintech
Group PLC Share Option Scheme, for the promise to grant new options in the future. Participation by each option holder was voluntary. Eligible employees were given the opportunity to tender Old Options between November 13, 2001 and December 12,
2001. On December 12, 2001, the offer to tender old Options expired, and surrendered options were cancelled two days after the expiration. Under the terms of the offer, the Company accepted for cancellation options to purchase 658,862 Ordinary
Shares (329,431 equivalent ADS). Subject to the terms and conditions of the offer, the Company granted new options to subscribe to or purchase an aggregate of 599,586 Ordinary Shares (299,793 equivalent ADS) on June 17, 2002 at an exercise price of
US$0.74 per share (US$1.47 per equivalent ADS), which was equal to the fair market value on that date. Each replacement option vested and was exercisable substantially to the same degree as the original option.



All employees of Trintech or one of the Companys subsidiaries who: (i)
were employees on November 13, 2001 and the date on which the tendered options were cancelled; (ii) were residents of or employed in Ireland, the United Kingdom, the United States or Germany; and (iii) were subject solely to the tax laws of such
countries were eligible employees. All members of the Companys Board of Directors, all members of the Companys Advisory Board and all of the Companys executive officers, however, were not eligible employees
and could not participate in the offer. If an employee elected to cancel one or more Old Options, all options granted since June 13, 2001 (i.e. within the six-month period prior to the expected cancellation date) were also cancelled.



As of April 30, 2004, there were outstanding options to purchase an aggregate
of 3,947,844 ordinary shares (1,973,922 equivalent ADSs) at exercise prices ranging from US$0.50 to US$49.50 per ordinary share and expiration dates ranging from May 2004 to July 2010 under the Companys employee benefit plans. As of
April 30, 2004, the Companys directors and executive officers held net options to purchase an aggregate of 1,386,722 ordinary shares (693,361) equivalent ADSs) at exercise prices ranging from US$0.54 to US$15.00 per ordinary share and
expiration dates ranging from May 2004 to July 2010.



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Item 7.Major Shareholders and Related Party Transactions



A.  Major Shareholders



The following table sets forth certain information known to us with respect to beneficial ownership of the Companys ADSs as of April 30, 2004 by (i) each shareholder known to us to be the beneficial owner of more than five percent of
any class of the Companys registered voting securities and (ii) all of the Companys executive officers and directors as a group and each individually. To the Companys knowledge, we are not directly or indirectly controlled by any
corporation, foreign government or any other natural or legal person.



|                                                   |  |                                                             |  |         |  
|-------------------------------------------------- |  | ----------------------------------------------------------- |  | ------- | -
|                                                   |  | Equivalent American Depositary Shares Beneficially Owned(1) | 
|Beneficial Owner                                   |  | Number                                                      |  | Percent |  
|Cyril P. McGuire (2)(3)                            |  | 2,899,693                                                   |  | 18.7    | %
|John F. McGuire (2)(4)                             |  | 2,366,254                                                   |  | 15.2    |  
|Instove Limited (5)                                |  | 1,602,804                                                   |  | 10.4    |  
|R. Paul Byrne (7)                                  |  | 117,930                                                     |  | *       |  
|John Harte (8)                                     |  | 47,625                                                      |  | *       |  
|Kevin C. Shea (6)                                  |  | 85,636                                                      |  | *       |  
|Trevor Sullivan (9)                                |  | 19,460                                                      |  | *       |  
|Robert Wadsworth (10)                              |  | 18,750                                                      |  | *       |  
|Officers and directors as a group (6 persons) (11) |  | 3,189,094                                                   |  | 20.2    |  

---

|* | Represents less than 1% of the equivalent ADSs outstanding.
|- | -----------------------------------------------------------

|(1) | The information in this table is based on the Companys records, information provided to us by the Companys directors and executive officers, and a review of the
Companys Schedules 13D and 13G filed in year 2002, 2003 and 2004 with the Securities and Exchange Commission. The percentage ownership of each director, executive officer, and shareholder is based on 15,813,451 equivalent ADSs outstanding at
April 30, 2003. Beneficial ownership is determined in accordance with rules of the Securities and Exchange Commission that deem shares to be beneficially owned by any person who has or shares voting or investment power with respect to such shares.
Unless otherwise indicated below, we believe that the persons named in the table have sole voting and sole investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. Securities
subject to options or warrants that are currently exercisable or exercisable within 60 days after April 30, 2004 are deemed to be issued and to be beneficially owned by the person holding such options or warrants for the purpose of computing the
percentage ownership of such person but are not treated as issued for the purpose of computing the percentage ownership of any other person.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Jayness Limited and Vanspur Limited, which are owned by two Jersey discretionary trusts, Jayness Trust and Vanspur Trust, have the option to acquire up to 722,688 equivalent ADSs
owned by John McGuire, representing approximately 4.6% of the equivalent ADSs outstanding, and have the option to acquire up to 722,688 equivalent ADSs owned by Cyril McGuire, representing approximately 4.6% of the equivalent ADSs outstanding.
Neither John McGuire, Cyril McGuire nor any of their family members are trustees or beneficiaries of these trusts and John and Cyril McGuire disclaim any beneficial interest in the securities held by Jayness Limited, Vanspur Limited or the trusts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes 2,855,318 equivalent ADSs held of record and 44,375 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes 2,315,004 equivalent ADSs held of record and 51,250 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Equivalent ADSs are held by Instove Limited, which in turn is owned by two Jersey discretionary trusts, Hacke Trust and Belte Trust. Neither John McGuire nor Cyril
McGuire nor any of their family members are trustees or beneficiaries of these trusts, but the trustees may, in their sole discretion, select any beneficiaries. John McGuire and Cyril McGuire have both disclaimed any beneficial interest in the
equivalent ADSs held by Instove Limited or the trusts.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(6) | Includes 5,000 equivalent ADSs held of record and 80,636 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Represents 32,153 equivalent ADSs held of record and 85,777 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Represents 750 equivalent ADSs held of record and 46,875 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(9) | Includes 1,960 equivalent ADSs held of record and 17,500 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Represents 18,750 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|---- | ------------------------------------------------------------------------------------------------------------------------

|(11) | Includes 345,163 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 30, 2004.
|---- | -----------------------------------------------------------------------------------------------------------------------



The Companys major shareholders do not have different voting rights.



Changes in Ownership



The following information is based entirely on the Companys review of
Schedules 13D and 13G and Form 6-Ks previously filed with the Securities and Exchange Commission.



John McGuire was the beneficial owner of 2,319,171 and 2,366,254 and 2,366,254 equivalent ADSs as of January 31, 2002, January 31, 2003 and January 31,
2004 respectively. The change in beneficial ownership was due to an increase in the number of options exercised or vested over the periods. Additionally, the percentage of equivalent ADSs held by John McGuire changed over the periods due to the
Companys issuance of ADSs in relation to acquisitions more fully described in this Form 20-F, as well as through the exercise of outstanding options and warrants.



Cyril McGuire was the beneficial owner of 2,356,671, 2,879,485 and 2,899,693 equivalent ADSs as of January 31, 2002, January
31, 2003 and January 31, 2004 respectively. The change in beneficial ownership was due to an increase in the number of vested options over the periods. Cyril McGuire also purchased 502,814 ADSs during fiscal 2003. Additionally, the percentage of
equivalent ADSs held by Cyril McGuire changed over the periods due to the Companys issuance of ADSs in relation to acquisitions more fully described in this Form 20-F, as well as through the exercise of outstanding options and warrants.



As of April 30, 2004, the number of holders of record of the
Companys ordinary shares was 92 and the number of holders of record of the Companys ADSs was approximately 111. Of the total number of record holders of ordinary shares, there are 9 U.S. record holders. Of the total number of record
holders of ADSs, there are approximately 20 U.S. record holders. U.S. record holders hold approximately 31% of the total number of outstanding equivalent ADSs.



B. Related Party Transactions



Effective September 1, 1998, we entered into a lease agreement with John and Cyril McGuire under which we currently lease approximately 22,500 square feet
of space in a building located in Dublin, Ireland which is owned by John and Cyril McGuire. The term of the lease is for a period of 25 years. The Companys rent under the lease is 509,818, or US$631,359 per year, which was determined by
a fair assessment of the local rental market by an independent appraisal firm. The rent is to be reviewed by an independent appraiser every five years and may be increased based on the independent appraisers assessment of the current rental
market using rental rates for similar properties in comparable locations. This lease agreement may be amended from time to time by agreement among us and John and Cyril McGuire. We have the right to terminate the lease on September 1, 2006.



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We have entered into a second lease agreement with John and Cyril McGuire under which we lease
approximately 29,400 square feet of space in a building located adjacent to the building currently under lease from John and Cyril McGuire. We agreed to a lease term of 25 years, effective as of March 1, 2001, with rent under the lease of
855,930 or US$1,059,984 per year, which was determined by a fair assessment of the local rental market by an independent appraisal firm. The rent is to be reviewed by an independent appraiser every five years and may be increased based on the
independent appraisers assessment of the current rental market using rental rates for similar properties in comparable locations. The lease agreement may be amended from time to time by agreement among us and John and Cyril McGuire. We will
have the right to terminate the lease on February 1, 2009.



Trintech Limited, one of the Companys Irish subsidiaries, has issued shares of special non-voting class to Huttoft Company, an unlimited company. Huttoft Company is partly-owned by Cyril McGuire and R. Paul Byrne, two of the
Companys executive officers, but is otherwise unrelated to us. We own all of the voting securities of Trintech Limited. The shares held by Huttoft Company do not entitle it to any share of the assets of Trintech Limited in the event of a
winding-up. We and Huttoft Company own all of the outstanding securities of Trintech Limited. Trintech Limited has in the past and may in the future declare and pay dividends to Huttoft Company, and Huttoft Company may pay dividends to its
shareholders out of these amounts. The amount of any dividends paid to Huttoft Company will be determined by the board of directors of Trintech Limited, subject to Irish law, in its discretion. We treat any dividends paid by Trintech Limited to
Huttoft Company as compensation expense for accounting purposes. Any dividends which are declared and paid by Trintech Limited to Huttoft Company would result in a reduction in profits available to us.



From time to time since December 1996, Enterprise Ireland has provided us
with grants in support of some of the Companys projects for the purpose of increasing employment and research and development in Ireland. These grants have totaled an aggregate of 1,196,500 (approximately US$1,482,000). These grants must
be repaid if we fail to maintain the projected employment for a period of five years from the date of receipt of the grant or if we dispose of intellectual property arising from the grant aided research and development.



In July 2001, 2002 and 2003, the Company received shareholder approval to
enter into a Trintech share buy back agreement with Deutsche Bank AG who would purchase Trintech ordinary shares on the Companys behalf. Under the agreement we are entitled, at any time from July 18, 2003 up until the date which is 18 months
after that date, to purchase not more than 2,500,000 ADSs representing 5,000,000 ordinary shares of US$0.0027 each in the Companys capital from Deutsche Bank AG for a total consideration including premium of not more than US$100.00 per ADS.
Any such purchases of ADSs may only be made by us out of the Companys distributable profits or by a subsidiary Company and its distributable profits, or alternatively, out of a fresh issue of the Companys shares made specifically for the
purpose of financing any such purchase. As of January 31, 2004, the Company had repurchased 617,956 shares at a cost of approximately US$652,000. As of January 31, 2004 approximately US$4.35 million remained available for future repurchases under
this program.



We believe that the terms of all transactions
with related parties are comparable to those that would be attainable by us in the ordinary course of business from unaffiliated third parties under similar circumstances.



C. Interests of Experts and Counsel



Not required.



Item 8.Financial Information



A. Consolidated Financial Statements and other Financial Information



Please see Item 18 Financial Statements and pages F-1 through F-37 for the Companys Consolidated Financial Statements. In addition, for more information regarding the percentages and amounts of the
Companys revenues from customers located in the United States and outside the United States, please see Item 5 Operating and Financial Review and Prospects and the Notes to the Consolidated Financial Statements.



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Legal Proceedings



From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary
course of business. For example, in September 2003, a former employee filed a complaint against us alleging wrongful termination and breach of contract. While we believe this claim is without merit, we cannot predict the outcome of this dispute.
Neither we nor any of our consolidated subsidiaries are a party to any litigation or arbitration proceedings which could have, or during the last two fiscal years has had, a material adverse effect on our business, financial condition and results of
operations.



We are involved from time to time in disputes with
respect to the Companys intellectual property rights and the intellectual property rights of others. Pending and future litigation involving the Companys business, whether as plaintiff or defendant, regardless of the outcome, may result
in substantial costs and expenses to the Companys business and significant diversion of effort by the Companys technical and management personnel. In addition, litigation, either instituted by or against the Companys business, may
be necessary to resolve issues that may arise from time to time in the future.



Furthermore, the Companys efforts to protect the Companys intellectual property through litigation may be unable to prevent duplication of the Companys technology or products. Any such litigation
could have a material adverse effect upon the Companys business, financial condition or results of operations.



There has been substantial litigation in the technology industry regarding rights to intellectual property, and the Companys business is subject to
the risk of claims against it for alleged infringement of the intellectual property rights of others. In addition, the existence of any such claim by a third party may not become known to us until well after we have committed significant resources
to the development of a potentially infringing product. From time to time, we have received claims that we have infringed third parties intellectual property rights, and there is no assurance that third parties will not claim infringement by
us in the future. Any such claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays, or require us to enter into royalty or licensing agreements, any of which could have a material adverse
effect on the Companys business, financial condition and results of operations. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us, or at all.



Dividends



Shareholders are entitled to receive dividends as may be recommended by the
board of directors and approved by the Companys shareholders or any interim dividends the board of directors may decide to pay. No dividends have been paid on the ordinary shares in any of the five fiscal years immediately preceding the date
of this Form 20-F. We currently intend to retain future earnings, if any, to fund the development and growth of the Companys business.



Under Irish law, we may only pay dividends out of profits legally available for that purpose. Available profits are defined as the Companys
accumulated realized profits, to the extent not previously distributed or capitalized, less the Companys accumulated realized losses, to the extent not previously written off in a reduction or reorganization of capital. In addition, we may
make a distribution only if and to the extent that, at the time of the distribution, the amount of the Companys net assets is not less than the aggregate of the Companys paid up share capital and undistributable reserves.



If in the future dividends are, subject to Irish law, approved by the
Companys board or by the Companys shareholders, the dividends will be paid to the persons who hold the Companys securities on the date determined by the Companys board. However, under the Companys articles of
association, the Companys directors may resolve that we will not be required to pay dividends to a shareholder who has not claimed these dividends within twelve years of their declaration if resolved by the board of directors. Unclaimed
dividends will be used by us as decided by the Companys board of directors.





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B. Significant Changes



None.



Item 9.The Offer and Listing



A. Offer and Listing



On September 24, 1999 we
consummated a public offering in the U.S. and the Federal Republic of Germany of 5,800,000 ordinary shares. On October 26, 1999, we sold an additional 87,598 ordinary shares, pursuant to an option granted to the underwriters in the offering to cover
over-allotments.



On March 21, 2000 the Company effected a
two-for-one ADS split. Following the split, each ordinary share equaled two equivalent ADSs.



On May 4, 2000 we consummated a follow-on public offering in the U.S. and the Federal Republic of Germany of 2,000,000 ordinary shares. On May 11, 2000 we sold an additional 225,000 ordinary shares, pursuant to an
option grant to the underwriters in the offering to cover over-allotments.



On May 24, 2002 the Company effected a one-for-four reverse split of its issued and outstanding ADSs, so that now two ordinary shares are equivalent to one ADS. Basic and diluted net (loss) per equivalent ADS is
therefore calculated using 50% of the weighted average number of ordinary shares outstanding during the period. All amounts shown per equivalent ADS have been retroactively adjusted to give effect to the reverse split.



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Market Price Information



The tables below present for the ADSs traded on the Nasdaq National Market and the Frankfurt Stock Exchange Prime Standard
(Regulated Market) (FSE), or where appropriate, the Neuer Markt Frankfurt Stock Exchange, the market segment of the Frankfurt Stock Exchange on which we were listed prior to January 1, 2003, respectively (i) for the five most recent full
financial years the annual high and low market prices, (ii) for the two most recent full financial years and any subsequent period the high and low market prices for each full financial quarter, (iii) for the most recent six months the high and low
market prices for each month. Prices per ADS on Frankfurt Stock Exchange Prime Standard (Regulated Market) are quoted from the composite of Neuer Markt Frankfurt and Neuer Markt Xetra. The table below sets forth, for the periods indicated, the high
and low closing prices for our companys American Depositary Shares on the Frankfurt Stock Exchange, as reported by the Frankfurt Stock Exchanges XETRA trading system. Conversion of euros into dollars has been made at the daily conversion
rate for each day during the respective period. This conversion is provided solely for your convenience.



|                                       |  |                                       |  |                                |  |        |  |      
|-------------------------------------- |  | ------------------------------------- |  | ------------------------------ |  | ------ |  | -----
|                                       |  | Price per ADSon NasdaqNational Market |  | Price per ADSon NeuerMarkt/FSE
|                                       |  | High $                                |  | Low $                          |  | High  |  | Low 
|Annual Highs and Lows                  |  |                                       |  |                                |  |        |  |      
|1999 (commencing September 24)         |  | 34.00                                 |  | 6.00                           |  | 32.58  |  | 5.75 
|2000                                   |  | 75.44                                 |  | 6.38                           |  | 77.00  |  | 8.06 
|2001                                   |  | 9.00                                  |  | 1.11                           |  | 9.45   |  | 1.30 
|2002                                   |  | 2.81                                  |  | 0.42                           |  | 2.60   |  | 0.49 
|2003                                   |  | 5.87                                  |  | 1.56                           |  | 4.25   |  | 1.36 
|2004 (through April 30, 2004)          |  | 5.74                                  |  | 3.85                           |  | 4.48   |  | 3.16 
|                                       |  |                                       |  |                               
|Quarterly Highs and Lows               |  |                                       |  |                                |  |        |  |      
|2002                                   |  |                                       |  |                                |  |        |  |      
|First Quarter                          |  | 1.62                                  |  | .70                            |  | 1.78   |  | 0.88 
|Second Quarter                         |  | 2.81                                  |  | .42                            |  | 2.30   |  | 0.49 
|Third Quarter                          |  | 1.43                                  |  | .83                            |  | 1.38   |  | 0.80 
|Fourth Quarter                         |  | 2.55                                  |  | 1.17                           |  | 2.60   |  | 1.08 
|2003                                   |  |                                       |  |                                |  |        |  |      
|First Quarter                          |  | 2.20                                  |  | 1.56                           |  | 2.00   |  | 1.36 
|Second Quarter                         |  | 5.87                                  |  | 1.95                           |  | 2.86   |  | 1.60 
|Third Quarter                          |  | 3.80                                  |  | 2.35                           |  | 3.31   |  | 2.16 
|Fourth Quarter                         |  | 5.05                                  |  | 3.50                           |  | 4.25   |  | 3.09 
|2004                                   |  |                                       |  |                                |  |        |  |      
|First Quarter (through April 30, 2004) |  | 5.74                                  |  | 3.85                           |  | 4.48   |  | 3.16 
|                                       |  |                                       |  |                               
|Monthly Highs and Lows (2003 and 2004) |  |                                       |  |                                |  |        |  |      
|November                               |  | 4.15                                  |  | 3.50                           |  | 3.45   |  | 3.14 
|December                               |  | 5.05                                  |  | 4.02                           |  | 4.25   |  | 3.14 
|January                                |  | 4.95                                  |  | 4.26                           |  | 4.19   |  | 3.34 
|February                               |  | 5.34                                  |  | 3.85                           |  | 4.24   |  | 3.16 
|March                                  |  | 5.74                                  |  | 4.37                           |  | 4.44   |  | 3.55 
|April                                  |  | 5.45                                  |  | 4.56                           |  | 4.48   |  | 3.94 



B. Plan of Distribution



Not required.



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C. Markets on which the Companys Shares Trade



The Companys ADSs are listed and principally traded on the Nasdaq National Market under the symbol TTPA, where the
prices are expressed in U.S. dollars, and on the subsection of the Regulated Market segment with additional obligations arising from admission (Prime Standard) of the Frankfurt Stock Exchange in Germany under the symbol TTP, where the prices are
expressed in Euro. The ADSs are represented by American Depositary Receipts, or ADRs, which are issued by the Bank of New York, the Depositary.



The Frankfurt Stock Exchange and the Regulated Market (Prime Standard)



The Frankfurt Stock Exchange is the most significant of the seven German stock exchanges and accounted for the vast majority
of the turnover in traded shares in Germany in 2003. The aggregate annual turnover of the Frankfurt Stock Exchange in 2003 of approximately 2.8 trillion for both equity and debt instruments, made it one of the largest stock exchanges in the
world behind the New York Stock Exchange, London and Tokyo in terms of turnover. The calculation of the aggregate annual turnover of the Frankfurt Stock Exchange is based on the Frankfurt Stock Exchanges practice of separately recording the
sale and purchase components involved in any trade. As of December 31, 2003, the equity securities of 5,730 corporations, including 4,901 foreign corporations, were traded on the Frankfurt Stock Exchange.



The Companys ADSs had been traded on the Neuer Markt segment of the
Frankfurt Stock Exchange since commencement of the Companys listing on the Frankfurt Stock Exchange. The Frankfurt Stock Exchange has reorganized its equity market effective January 1, 2003 and decided to discontinue the Neuer Markt after a
transition period. As core element of the reorganization, the Frankfurt Stock Exchange divided the equity market into two listing segments with different transparency standards. The General Standard provides for legal minimum
transparency requirements whereas the Prime Standard provides for high transparency with investor relations standards in line with the Neuer Markt requirements. The Prime Standard requiresin addition to the requirements of the
General Standardthe adoption of international accounting standards (International Financial Reporting Standards (IFRS)) in accordance with the current standards of the International Accounting Standards Board (IASB) or U.S. Generally Accepted
Accounting Principles (US-GAAP), the publication of quarterly reports, the publication of a corporate action timetable, the holding of at least one analyst meeting per year as well as the publication and the notification of facts with potentially
material influence on the market price, also in the English language.



In December 2002, we decided to terminate the admission to the Neuer Markt and applied for the listing of the Companys ADSs to the subsection of the Regulated Market with additional obligation arising from admission (Prime Standard).
The admission was granted in January 2003.



Trading on
the Regulated Market



Securities listed on the
Regulated Market are traded on an electronic trading system called Xetra and on the floor. Trading in Xetra takes place on every business day between 9:00 a.m. and 5:30 p.m., Frankfurt time. Trading within the Xetra system is done by banks and
brokers who have been admitted to trading on at least one of Germanys stock exchanges. Xetra is integrated into the Frankfurt Stock Exchange and is subject to its rules and regulations. Floor trading takes place between 9.00 a.m. and 8.00 p.m.
In floor trading lead brokers (Skontroführer) quote price estimates for the shares.



Xetra permits continuous trading and auctions. Prices of securities traded on the Regulated Market are displayed continuously during trading hours. At the
half-way point of each trading day, a single standard quotation is determined for certain securities.



Transactions on the Frankfurt Stock Exchange, including transactions within the Xetra system, are settled on the second business day following trading.
Transactions off the Frankfurt Stock Exchange for large volumes or if



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one of the parties is foreign are generally also settled on the second business day following trading, unless the parties have agreed upon a different date.
Trading can be suspended by the Frankfurt Stock Exchange if orderly stock exchange trading is temporarily endangered or if a suspension is in the public interest.



Trading on German stock exchanges is monitored by regulatory agencies including the Federal Supervisory Office for
Securities Trading.



D. Selling Shareholders



Not required.



E. Dilution



Not required.



Item 10.Additional Information



A. Share Capital



Not required.



B. Memorandum and Articles of Association



The Companys Memorandum of Association and Articles of Association, as
amended, are filed as Exhibit 1.1 to this Report. Each ADR represents ownership interests in, or the right to receive, two ordinary shares, which have been deposited with Allied Irish Bank, as the custodian, in Ireland. A summary of the other rights
of the ordinary shares and ADSs are described in our registration statement on Form F-1/A (File No.333-32762). The Transfer Agent and Registrar for the Companys Ordinary Shares is Capita IRG Registrars, Dublin, Ireland. The Transfer Agent and
Registrar for the Companys ADSs is The Bank of New York.



C. Material
Contracts



We have not entered into any material contracts
other than in the ordinary course of business and other than those disclosed in Item 4 Information on the Company or elsewhere within this Form 20-F.



D. Exchange Controls



Republic of Ireland.Irish exchange control regulations ceased to apply from and after December 31, 1992. Except as indicated below, there are no
restrictions on non-residents of the Republic of Ireland dealing in domestic securities which includes shares or depositary receipts of Irish companies such as us and dividends and redemption proceeds are freely transferable to non-resident holders
of the securities.



The Financial Transfers Act, 1992 of
Ireland was enacted in December 1992. This act gives power to the Minister for Finance of Ireland to make provision for the restriction of financial transfers between the Republic of Ireland and other countries. Financial transfers are broadly
defined and include all transfers which would be movements of capital or payments within the meaning of the treaties governing the European Communities. The acquisition or disposal of ADSs issued by an Irish incorporated company and associated
payments may fall within this definition. In addition, dividends or payments on redemption or purchase of shares and payments on a liquidation of an Irish incorporated company would fall within this definition. Currently, orders under this act
prohibit any financial transfer to or by the order of or on behalf of residents of each of the Federal Republic of Yugoslavia, the Republic of Serbia, and Iraq, and certain financial transfers of funds in respect of certain bodies and persons
relating to the Taliban of Afghanistan, Osama bin Laden and Al Qaeda, financial transfers to senior



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members of the Zimbabwean government, financial transfers to any persons, groups or entities listed in EU Council Decision 2002/400/EC of 17th June 2002 and
certain financial transactions to or by the order of or on behalf of residents of Angola unless permission for the transfer has been given by the Central Bank of Ireland.



We do not anticipate that Irish exchange controls or orders under the Financial Transfers Act, 1992 will have a material
effect on the Companys business.



For the purposes of the
orders relating to Iraq and the Federal Republic of Yugoslavia, reconstituted in 1991 as Serbia and Montenegro, a resident of those countries is a person living in these countries, a body corporate or entity operating in these countries and any
person acting on behalf of any one of these persons.



Any
transfer of, or payment for, an ordinary share or ADS involving the government of any country which is currently the subject of United Nation sanctions, any person or body controlled by any government or country under United Nations sanctions, or
any person acting on behalf of these governments or countries, may be subject to restrictions required under these sanctions as implemented into Irish law. Angola and Iraq are currently the subject of United Nation sanctions.



Federal Republic of Germany. At present, the Federal Republic of
Germany does not restrict the export or import of capital, except for certain investments in countries as required by resolutions adopted by the United Nations and the European Union. However, for statistical purposes only, every individual or
corporation residing in Germany, a resident, must report to the German Federal Central Bank, subject only to several immaterial exceptions, any payment received from or made to an individual or a corporation resident outside Germany, or a
non-resident, if a payment exceeds 12,500 or the equivalent in another currency. In addition, residents must report any claims against or any liabilities payable to non-residents if these claims or liabilities, in the aggregate, exceed
5.0 million or the equivalent in a foreign currency at the end of any one month.



Furthermore, residents must periodically report certain assets in a non-resident enterprise if at least 10% of the share capital or of the voting rights of the non-resident enterprise is attributable to the resident
or any of its non-resident affiliates.



However, this reporting
requirement does not apply if the total balance sheet or the total business assets of the non-resident enterprise do not exceed 3,000,000. A non-resident affiliate is a non-resident entity of which more than 50% of the share capital or voting
rights are attributable to a resident.



Moreover, enterprises
resident in Germany must periodically report certain items of assets if at least 10% of the share capital or of the voting rights of the resident enterprise are attributable to one or more non-residents or any of their resident affiliates. However,
this reporting requirement does not apply if the total balance sheet or the total business assets of the resident enterprise do not exceed 3,000,000. A resident affiliate is a resident entity of which more than 50% of the share capital or
voting rights are attributable to a non-resident.



Irish
Competition Legislation and Other Anti-Takeover Provisions



Irish Mergers and Competition Legislation. Irish law requires prospective purchasers of the Companys voting securities to provide advance notice of an acquisition of the Companys shares to the Irish Competition Authority
if, after an acquisition, that person would directly or indirectly control the Company, and specific financial thresholds are exceeded. Control would be acquired if, by reason of securities, contracts or other means, decisive influence were capable
of being exercised with regard to the Companys activities. Under Irish law, the acquisition will be void unless either clearance for an acquisition is obtained from the Irish Competition Authority or the prescribed statutory period following
notification of the acquisition has elapsed without the Irish Competition Authority having made a determination.



In addition, under Irish competition legislation, proposed mergers and acquisition which might be anti-competitive in nature may be voluntarily notified
to and approved by the Irish Competition Authority. Further,



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third parties may file a complaint with the Irish Competition Authority or institute court proceedings seeking relief, including injunctions, damages, and
exemplary damages, for a merger or acquisition which would be prohibited under the relevant legislation.



For purposes of the Irish competition legislation described above, the acquisition of ADSs would generally be treated in the same manner as an acquisition
of ordinary shares.



Provisions of the Companys
Memorandum and Articles of Association Concerning Control.Several provisions of the Companys memorandum and articles of association may have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a
shareholder might consider in its best interests, including those attempts that might result in a premium over the market price for the ADSs.



Enforcement of Civil Liabilities under United States Federal Securities Laws



We are a public limited company incorporated under the laws of the Republic of Ireland. Several of the Companys
directors, officers and experts named in this Form 20-F are non-residents of the United States, and these persons and a significant portion of the Companys assets are located outside the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon these persons or to enforce against them in U.S. courts judgments predicated upon the civil liability provisions of the laws of the United States, including the federal securities
laws. We have been advised by A&L Goodbody, Solicitors, the Companys Irish corporate counsel, that there is doubt regarding the enforceability against these persons in the Republic of Ireland, whether in original actions or in actions for
the enforcement of judgments in U.S. courts, of civil liabilities predicated solely upon the laws of the United States, including the federal securities laws.



E. Taxation



The following is a general summary of important tax considerations derived from the laws of the Republic of Ireland, Germany and the federal law of the
United States relating to the purchase, ownership and disposition of ADSs or ordinary shares by U.S. holders, German holders and Irish holders. For the purposes of this discussion, a U.S. holder means an individual citizen or resident of the United
States for U.S. federal income tax purposes, a corporation or partnership created or organized under the laws of the United States, or any of the states comprising the United States, an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or a trust, the administration of which is subject to the primary supervision of a court within the United States and regarding which one or more U.S. persons have the authority to control all substantial decisions
of the trust. For purposes of this discussion, a German holder means an individual with his residence or usual place of stay in Germany as well as a corporation with its registered seat or management in Germany, or permanent establishment in
Germany, which is maintained by a shareholder not subject to unlimited tax liability or is usually at the shareholders disposal, and an Irish holder means any person who is a resident or is ordinarily resident in Ireland or who is carrying on
a trade in Ireland through a branch or agency.



This summary is
of a general nature only and does not discuss all aspects of Irish, German and U.S. taxation that may be relevant to a particular investor. In particular, the following summary does not address the tax treatment of U.S. holders or Irish holders who
own, actually or constructively, 10% or more of the Companys outstanding voting stock. Nor does this summary address certain classes of U.S. holders or Irish holders, such as broker-dealers, insurance companies, tax-exempt organizations,
financial institutions, persons subject to the alternative minimum tax and persons who do not hold ADSs or ordinary shares as capital assets. These particular investors, who are not addressed in this summary, may be subject to special rules.



The statements of Irish, German and U.S. tax laws described
below are based on the laws in force and as interpreted by the relevant taxation authorities as of April 30, 2004 and are subject to any changes in Irish, German or U.S. law, or in the interpretation of these laws by the relevant taxation
authorities, or in the double taxation conventions among any two of the Republic of Ireland, Germany and the United States occurring after



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that date. The discussion regarding Irish taxation matters is based on the various Irish Taxes Acts, Finance Acts and other relevant legislation, judicial
decisions, statements of practice and revenue practices in force at this time, all of which are subject to change, possibly with retrospective effect.



Taxation of Dividends



Republic of Ireland Taxation. We currently intend to retain future earnings, if any, to fund the development and growth of the Companys
business. Should we begin paying dividends, unless exempted, all dividends paid by us will be subject to Irish withholding tax at the standard rate of income tax in force at the time the dividend is paid (currently 20%). Exemption from withholding
tax applies in respect of dividends paid to certain categories of holders of ordinary shares, including:-



| |  | Irish resident companies;
| | - | -------------------------



| |  | Companies which are resident in an EU member state or country with which Ireland has a double tax treaty (a tax treaty country), which includes the United States, and
not under the control of persons resident in Ireland;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Non-Irish resident companies controlled by residents of EU member states or tax treaty countries;
| | - | -------------------------------------------------------------------------------------------------



| |  | Non-Irish resident companies, the principal class of shares of which, or a 75% parent of which, or where the company is wholly owned by two or more companies, of each of those
companies, are substantially and regularly traded on a recognized stock exchange in an EU member state or a tax treaty country or on such other stock exchange as approved by the Irish Minister of Finance;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Individual residents of EU member states or tax treaty countries, including individuals who are residents of the U.S. or Germany.
| | - | ---------------------------------------------------------------------------------------------------------------------------------



In each case in respect of an exemption from withholding, the holder claiming
the exemption will have to file with us the requisite declarations and certifications to substantiate the entitlement. If dividends are paid through an intermediary the intermediary will have to fulfill certain requirements to enable us to pay
dividends gross to the exempt holders listed above through the intermediary. The exempt holders will have to provide the intermediary with the appropriate declarations and certificates.



A holder of ADSs will be exempt from withholding tax if it is beneficially entitled to the dividend and if its address on
the register of ADSs maintained by the depositary is in the United States. Additionally, the depositary must be authorized by the Irish Revenue Commissioners as a qualifying intermediary for this exemption to apply.



Where exemption from withholding tax is available, there should be no further
liability to Irish income tax/corporation tax on those dividends for the recipient.



An Irish holder who receives dividends or other distributions net of withholding will be able to credit the withholding against his eventual liability to Irish taxation on those dividends, and if appropriate, to
obtain a refund.



A holder in any of the above exempt
categories who suffers withholding tax will be able to make a reclaim subsequently from the Irish Revenue Commissioners.



A holder resident in a treaty country and who is not within any of the above exempt categories may be able to make a reclaim subsequently from the Irish
Revenue Commissioners of all or part of the tax withheld, pursuant to the terms of the applicable tax treaty.



A charge to Irish social security taxes and other levies can arise for individuals. An individual who is neither resident nor ordinarily resident in
Ireland can only incur this liability if that individual also carries on a trade or



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profession in Ireland. However, under the social welfare agreement between Ireland and the United States, an individual who is liable for U.S. social
security contributions can normally claim an exemption from these taxes and levies.



United States Taxation. For U.S. federal income tax purposes, the gross amount of any dividend paid, to the extent of the Companys current or accumulated earnings and profits as determined based on U.S.
tax principles, will be included in a U.S. holders gross income and treated as foreign source dividend income. These dividends will not be eligible for the dividends received deduction allowed to U.S. corporations. The amount of any
distribution that exceeds earnings and profits will be treated first as a nontaxable return of capital, reducing the U.S. holders basis in its shares, and then as capital gain. The amount includable in income will be the U.S. dollar value of
the payment based on the exchange rate on the date of payment regardless of whether the payment is in fact converted into U.S. dollars. Generally, gain or loss, if any, resulting from currency fluctuations during the period from the date any
dividend is paid to the date the payment is converted into U.S. dollars generally will be treated as ordinary income or loss.



Under recently enacted tax legislation, for taxable years that begin after December 31,2002, and on or before December 31, 2008, dividends paid by the
company will be taxable to a non-corporate U.S. holder at the reduced rate normally applicable to capital gains, provided the company qualifies for the benefits of the income tax treaty between the U.S. and Ireland. A U.S. holder will be eligible
for this reduced rate only if it has held the shares for more than 60 days during the 120 day period beginning 60 days before the ex-dividend date.



U.S. holders who are able, under Irish domestic tax legislation, to claim a refund or exemption of Irish tax withheld should not expect to obtain a credit
against U.S. federal income tax liability for that withheld tax whether or not such claim is made. For more information, please see Republic of Ireland Taxation.



U.S. holders should consult with, and rely solely upon, their personal tax advisors, as the rules governing the availability
or use of foreign tax credits are complex.



German
Taxation. If the ordinary shares or ADSs are held by a German individual as business assets the dividends received are subject to trade tax. However, if a holder of ordinary shares or ADSs holds 10% or more of the ordinary shares or ADS and
further prerequisites are met a tax exemption will apply.



Individuals subject to unlimited tax liability (i.e. individuals with their residence or usual place of stay in Germany) or limited tax liability (including individuals conducting business in Germany via a permanent establishment or a
permanent representative to the extent ordinary shares or ADSs are attributable to such permanent establishment or permanent representative) are taxed on 50% of the gross dividends (before deduction of withholding tax) at the progressive income tax
rate plus a solidarity surcharge of 5.5% thereon. Where applicable, the trade tax is credited against the income tax of the shareholder in whole or in part.



Additionally, for private individual shareholders or ADS holders church tax might apply in which case the full dividend amount would be included in the
church tax base.



Private individual shareholders or ADS
holders may claim a tax allowance for investment income of 1,370 p.a. In the case of married couples filing a joint income tax return, the tax allowance amounts to 2,740 p.a. They may also deduct from their dividend income 50% of the
costs related to their shareholding, in particular the fees for custody and refinancing. Without evidence, an amount of 51 p.a. and in the case of married couples filing a joint income tax return an amount of 102 p.a. may be deducted.



If withholding tax is levied in Ireland on dividend
distributions paid by us, Irish withholding tax in an amount of 18% can be credited against that portion of the German income or corporation tax attributable to the dividend payment. It is, however, unclear regarding whether ADSs holders may avail
themselves of this tax credit because only the legal shareholder typically has the right to take a credit for foreign withholding tax. If the



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withholding tax amount actually withheld exceeds the German income tax attributable to the dividend payment, the tax credit is restricted to the latter
amount. Instead of the tax credit, the withholding actually withheld may be deducted from taxable income.



Dividends to shareholders or ADS holders subject to German corporation tax are almost tax exempt. However, a portion of 5% of the dividend is treated as a
non-deductible business expense and will be subjected to corporation tax at a rate of 25% (plus a 5.5% solidarity surcharge thereon). The dividends are also subject to trade tax, if the corporation holds less than 10% of the ordinary shares or ADSs.
If the corporation holds more than 10% of the ordinary shares or ADSs and further prerequisites are met, only 5% of the dividends are subject to trade tax.



The tax treatment of ADSs includes some unresolved questions, since ADSs are comparatively new instruments in Germany. Therefore no court decisions or
letters of the fiscal authorities exist in Germany dealing with special questions of ADSs.



For purposes of German law, ownership of the ADSs is not considered legal ownership of the underlying ordinary shares. However, the economic and other rights associated with owning ADSs are similar to those associated
with owning the underlying ordinary shares directly. Therefore, there are no tax benefits associated with, and in principle no differences regarding, the German tax treatment of dividends or capital gains resulting from holding ADSs instead of
ordinary shares.



Taxation of Capital Gains



Republic of Ireland Taxation. A person who is
not an Irish holder will not be subject to Irish capital gains tax on the disposal of ordinary shares or ADSs provided that the ordinary shares or ADSs are quoted on a recognized stock exchange. Nasdaq and the Frankfurt Stock Exchange are recognized
stock exchanges. Irish holders will be liable to Irish tax on capital gains arising on the disposal of the ordinary shares or ADSs. The capital gain will generally be calculated by reference to the difference between the purchase price and the sale
price of the ordinary shares or ADSs. Indexation of the base cost of the Ordinary Shares or ADSs will only be available up to December 31, 2002 and only in respect of Ordinary Shares or ADSs held for more than twelve months prior to their disposal.
An annual exemption allows individuals to realize chargeable gains of up to 1,270 in each tax year without giving rise to CGT. This exemption is specific to the individual and cannot be transferred between spouses. Irish holders that realize a
loss on the disposition of Ordinary Shares or ADSs will generally be entitled to offset such allowable losses against capital gains realized from other sources in determining their CGT liability in any year. Allowable losses which remain unrelieved
in a year may generally be carried forward indefinitely for CGT purposes and applied against capital gains in future years. Transfers between spouses will not give rise to any chargeable gain or loss for CGT purposes with the acquiring spouse
acquiring the same pro rate base cost and acquisition date as that of the transferring spouse.



United States Taxation. Subject to the discussion of passive foreign investment companies, or PFICs, below, a U.S. holders sale or exchange of ADSs generally will result in the recognition of capital gain
or loss by the U.S. holder in an amount equal to the difference between the amount realized and the U.S. holders tax basis in the ADSs sold. Gain or loss realized on the sale of ADSs by non-corporate U.S. holders will be subject to a maximum
rate of U.S. federal income tax of 15%, provided the ADSs were held for more than 12 months as capital assets. In general, any capital gain or loss recognized by a U.S. holder upon the sale or exchange of ADSs will be treated as U.S. source income
or loss for U.S. foreign tax credit purposes. The deductibility of capital losses is subject to limitations. A U.S. holders tax basis in its ADSs will generally be the purchase price paid for its ADSs by the U.S. holder. A U.S. holder that is
liable for both Irish and U.S. tax on gain on the disposal of the ordinary shares will generally be entitled, subject to limitations and under the 1997 Convention, to credit the amount of Irish tax paid for the gain on the sale against the U.S.
holders U.S. federal income tax liability for this gain.



German Taxation. If the shares or ADSs are held by a German individual as business assets 50% of the capital gain is subject to trade tax.



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Additionally, capital gains from the sale of shares or ADSs held by a German individual as business
assets are subject to income tax plus solidarity surcharge thereon.



Capital gains from the sale of shares or ADSs held as private assets by individuals are only subject to taxation, if (i) the sale takes place within one year from the purchase orafter this period has lapsedif (ii) the
shareholder or ADS holder (or the predecessor in the case of a transfer of shares or ADSs without consideration), at any time during the five years preceding the sale, directly or indirectly held or holds a participation of 1% or more. However, for
private individuals a capital gain deriving from a disposal of the shares or ADS is tax exempt if the total gains from private disposal transactions in the respective calendar year amount to less than 512 p.a. and per person.



To the extent, capital gains are subject to income tax, 50% of such capital
gains are subject to the progressive income tax rate plus a solidarity surcharge of 5.5% thereon. Expenses related to capital gains are half deductible. Additionally, for private individual shareholders or ADS holders church tax might apply in which
case the full capital gain would be included in the church tax base.



Losses incurred by an individual from a disposal of shares or ADSs might not be deductible in whole or in part.



Capital gains realised by shareholders or ADS holders subject to corporation tax are generally exempt from corporation tax and trade tax. However, 5% of
capital gains are treated as a non-deductible business expense and will be subject to corporation tax at a rate of 25% (plus a 5.5% solidarity surcharge thereon) and to trade tax.



The conversion of ADSs into ordinary shares should not be a taxable event for German tax purposes. The conversion should
qualify as a replacement of the sole economic ownership against the legal and economic ownership. There are no German tax court decisions addressing the exchange or conversion of foreign depositary receipts into foreign shares.



Passive Foreign Investment Company Considerations



The Company believes that it is currently not a Passive Foreign
Investment Company, or PFIC, although it may have been one in prior years. An actual determination of PFIC status is inherently factual in nature and cannot be made until the close of each applicable tax year. Accordingly, no assurance can be given
that we will not become a PFIC at some point in the future.



The Companys treatment as a PFIC could result in a reduction in the after-tax return to U.S. Holders of ADSs and may cause a reduction in the value of such shares. For U.S. federal income tax purposes, we will be classified as a PFIC
for any taxable year in which either (i) 75% or more of the Companys gross income is passive income, or (ii) at least 50% of the average value of all of the Companys assets for the taxable year produce or are held for the production of
passive income. For this purpose, cash is considered to be an asset which produces passive income. Passive income also includes dividends, interest, royalties, rents, annuities and the excess of gains over losses from the disposition of assets,
which produce passive income. As a result of the Companys substantial cash position and the decline in the value of the Companys stock, we are a PFIC under the asset test if the Companys market capitalization is used to determine
the aggregate fair market value of the Companys assets. The legislative history of the PFIC rules indicates that market capitalization is generally to be used for purposes of the asset test. If we are a PFIC for U.S. federal income tax
purposes, U.S. Holders of the Companys ADSs would be required, in certain circumstances, to pay an interest charge together with tax calculated at maximum rates on certain excess distributions, including any gain on the sale of
ADSs.



The consequences described above can be mitigated if the
U.S. Holder makes a timely election to treat us as a qualified electing fund, or QEF. A shareholder making the QEF election is required for each taxable year to include in income a pro rata share of the net capital gain of the QEF which would be
taxable, as long-term capital



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gain, subject to a separate election to defer payment of undistributed earnings of the QEF and taxes, which deferral is subject to an interest charge. We
would have to furnish certain information on an annual basis to U.S. Holders who have made a QEF election. The Company does not intend to furnish such information. The QEF election is made on a shareholder-by-shareholder basis and can be revoked
only with the consent of the Internal Revenue Service, or IRS.



As an alternative to making the QEF election, a U.S. Holder of PFIC stock which is publicly traded could mitigate the consequences of the PFIC rules by electing to mark the stock to market annually, recognizing as ordinary income or loss
each year an amount equal to the difference as of the close of the taxable year between the fair market value of the PFIC stock and the U.S. Holders adjusted tax basis in the PFIC stock. Losses would be allowed only to the extent of net
mark-to market gain previously included by the U.S. Holder under the election for prior taxable years.



All U.S. Holders are advised to consult their own tax advisers about the PFIC rules generally and about the advisability, procedures and timing of their
making any of the available tax elections, including the QEF or mark-to-market elections.



U.S. Information Reporting and Backup Withholding



Any dividends paid, or proceeds on a sale of, ADSs to or by U.S. holders may be subject to U.S. information reporting, and the 28% U.S. backup withholding
tax may apply unless the holder (1) is an exempt recipient, or (2) provides a U.S. taxpayer identification number, certifies that no loss of exemption from backup withholding has occurred and otherwise complies with any applicable backup withholding
requirements. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or credit against the U.S. holders U.S. federal income tax, provided the required information is furnished to the U.S. IRS.



Irish Capital Acquisition Tax



A gift or inheritance comprising ordinary shares or ADSs will be within the
charge to capital acquisitions tax, regardless of where the disponer or the donee/successor in relation to the gift/inheritance is domiciled, resident or ordinarily resident. Capital acquisitions tax is charged at a rate of 20% on the taxable value
of the gift or inheritance above a tax-free group threshold. This tax-free group threshold is determined by the aggregate of the current benefit and the value of all other benefits taken since 5 December 1991 which are within the same group. The
group threshold is determined by the relationship between the disponer and the donee/successor. Gifts and inheritances taken by one spouse of a marriage from the other spouse of that marriage are not subject to capital acquisitions tax.



The Estate Tax Convention between Ireland and the United States generally
provides that Irish capital acquisitions tax paid on inheritances in Ireland may be credited, in whole or in part, against tax payable in the United States, in the case where an inheritance of ordinary shares or ADSs is subject to both Irish capital
acquisitions tax and US federal estate tax. The Estate Tax Convention does not provide relief for Irish capital acquisitions tax paid on gifts.



Irish Stamp Duty



A transfer of ordinary shares, including transfers effected through CREST, wherever executed and whether on sale, in contemplation of a sale or by way of
a gift, will attract stamp duty at the rate of 1% of the consideration given or, in the case of a gift or where the purchase price is inadequate or unascertainable, on the market value of the ordinary shares. Transfers of ordinary shares which are
not liable to duty at the rate of 1%, such as transfers under which there is no change in beneficial ownership, are not subject to any duty if they contain the appropriate certificate and in the absence of such certificate, attract a fixed duty of
12.50.



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It is assumed for the purpose of this paragraph that ADSs are dealt in on a stock exchange in the United
States recognized by the Irish taxing authorities. Under current Irish law, no stamp duty will be payable on the acquisition of ADSs by persons purchasing ADSs or on any subsequent transfer of an ADS. The Irish Revenue Commissioners are prepared to
exempt from Irish stamp duty the transfer of ADSs dealt in on the Frankfurt Stock Exchange (Prime Standard) as long as the ADSs are also dealt in on the Nasdaq National Market.



The transfer by a holder to the depositary or custodian of ordinary shares for deposit in return for ADSs and a transfer of
ordinary shares from the depositary or custodian in return for the surrender of ADSs will be stampable at the rate of 1% if the transfer of the ordinary shares relates to a sale or contemplated sale or any other change in the beneficial ownership of
the ordinary shares. If, however, the transfer of the ordinary shares is a transfer under which there is no change in the beneficial ownership of the ordinary shares being transferred, the transfer is not subject to any duty if it contains the
appropriate certificate and in the absence of such certificate, the transfer attracts a fixed duty of 12.50.



The person accountable for payment of stamp duty is the transferee or, in the case of a transfer by way of a gift or for a consideration less than the
market value, all parties to the transfer. Stamp duty is normally payable within 30 days after the date of execution of the transfer. Late or inadequate payment of stamp duty will result in a liability to interest, penalties and fines.



Special Rules for Credit Institutions, Financial Services
Institutions, Life and Health Insurance Companies and Financial Enterprises.



If credit institutions and financial services institutions hold or dispose of shares or ADSs held in the trading book in accordance with the German Banking Act, the tax reduction or exemption does not apply to
dividends and capital gains. The same holds true for shares and ADSs held by financial enterprises in terms of the German Banking Act the objective of which is to generate short-term capital gains. Furthermore, this also applies to credit
institutions, financial services institutions and financial enterprises domiciled in another European Union member state or in another state which is part of the European Economic Area.



If the shareholder is a life or health insurance company and if the shares are accounted for as capital investments, the
dividends and capital gains received are in general fully taxable and tax exemptions do not apply.



Other Taxes in Germany



Wealth Tax.At present, for assessment periods as of January 1, 1997, there is no wealth tax levied in Germany.



Inheritance and Gift Tax. Generally the transfer of ordinary shares or
ADSs to another person as a gift or due to death is only subject to German inheritance and gift tax if:



(a) the former holder, or the new holder has, at the time of the passing of the assets, his residence or usual place of stay in Germany or
before this time has been a German citizen not living abroad for more than five years, without having a residence in Germany, or



(b) the ordinary shares or ADSs were part of the former holders business assets, for which a permanent establishment was maintained
in Germany or a permanent representative was commissioned.



Other Taxes. If a purchase, sale or other alienation of ordinary shares or ADSs is executed, no German capital transfer, tax, sales tax, stamp duty or similar tax will be incurred. Under certain preconditions it is possible that an
entrepreneur opts to a taxable treatment of a usually exempt performance in the terms of VAT Act.



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Real estate transfer tax may be incurred if 95% of the ordinary shares or ADSs are transferred to one
shareholder or if there is a unification of 95% of the ordinary shares or ADSs at the level of a shareholder, provided we or one of the Companys direct or indirect subsidiaries hold German real estate.



F. Dividends and Paying Agents



Not required.



G. Statements by Experts



Not required.



H. Documents on Display



The documents concerning Trintech referred to in this document and required to be made available to the public are available at the Companys registered offices at Trintech Building, South County Business Park, Leopardstown, Dublin 18,
Ireland.



I. Subsidiary Information



Not required.



Item 11.Quantitative and Qualitative Disclosure About Market Risk



The Companys investment policy requires us to invest funds in excess of current operating requirements in marketable securities such as commercial
paper, corporate bonds and U.S. government agency fixed income securities. As stated in the Companys investment policy, we are averse to principal loss and seek to ensure the safety and preservation of invested funds by limiting default and
market risks. We mitigate default risk by investing in only investment-grade securities.



At the year ended January 31, 2004, the Companys cash and cash equivalents consisted primarily of highly liquid investments with maturity of three months or less. We have concluded that this does not result in
any material market risk exposure.



We are exposed to market
risk as the Companys interest income and expense are sensitive to changes in the general level of Irish and U.S. interest rates, particularly since the Companys investments are in short-term instruments and the Companys available
line of credit requires interest payments at variable rates.



Due to the Companys multinational operations, the Companys business is subject to fluctuations based upon changes in the exchange rates between the currencies in which we collect revenues or pay expenses and the euro. In
particular, the value of the U.S. dollar to the euro impacts the Companys operating results.



Foreign exchange risk management



Our operations are exposed to foreign exchange risk arising from cash flows and financial instruments that are denominated in currencies other than our reporting currency or the respective subsidiary conducting the business. The purpose of
our foreign currency management is to manage the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows and on foreign currency denominated assets and liabilities.



The terms of currency instruments used for hedging purposes are consistent
with the timing of the transactions being hedged. We do not use derivative financial instruments for trading or speculative purposes. We use derivative financial instruments, such as forward exchange contracts, to hedge certain forecasted foreign
currency denominated transactions expected to occur within the next 12 months. As a policy we only hedge anticipated foreign currency sales and purchase transactions for which we have a firm commitment to a customer or supplier. At January 31, 2002,
2003 and 2004 the Company had no Foreign Exchange contracts.



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Furthermore, the Company manages the currency exposure of certain receivables and payables using
derivative instruments, such as currency options. The gains or losses on these instruments provide an offset to the gains or losses recorded on the foreign currency receivables and payables. The derivative instruments are recorded at fair value and
changes in fair value are recorded in earnings under exchange (loss) gain on the Statement of Operations.



As of January 31, 2004 the Company had four currency options maturing in February 2004, March 2004, May 2004 and June 2004, each option to sell US$500,000
and receive Euro. The currency options combine the buying of four vanilla options with the selling of four reverse knock-in options. If the EUR to USD spot exchange rate is trading between 1.2565 and 1.29 on the expiry date of each individual
option, the option will be executed at the existing spot exchange rate. If the EUR to USD spot exchange rate is trading either below 1.2565 or equal to or above 1.29, the option will be executed at an EUR to USD exchange rate of 1.29. The fair value
of the options as of January 31, 2004 was US$80,000 negative.



Based on the nature and current levels of the Companys investments and debt, we have concluded that there is no material market risk exposure.



For further discussion of the Companys market risk, please see Item 5.A Operating ResultsExposure to Currency Fluctuations.



Item 12.Description of Securities Other Than Equity Securities



Not required.



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PART II



Item 13.Defaults, Dividend, Arrearages and Delinquencies



None.



Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds



A.On March 21, 2000, a two-for-one ADS split became effective resulting in one additional ADS being issued to ADS holders for each ADS held by ADS holders of
record. As a result of the stock split, each of the Companys ordinary shares was represented by two ADSs. On May 24, 2002 the Company effected a one-for-four reverse split of its issued and outstanding ADSs, so that now two ordinary shares are
equivalent to one ADS. Basic and diluted net (loss) per equivalent ADS is therefore calculated using 50% of the weighted average number of ordinary shares outstanding during the period.



B.Not required.



C.Not required.



D.Not required.



E.Not required.



Item 15.Controls and Procedures



The Companys Chief Executive Officer, Cyril P. McGuire, and the Companys Chief Financial Officer, R. Paul Byrne, (the Companys principal executive officer and principal financial officer, respectively) have concluded,
based on their evaluation as of the end of the period covered by this report, that the Companys disclosure controls and procedures (as defined in U.S. Exchange Act Rules 13a-15(e) or 15d-15(e)) are effective, as of the end of the period
covered by this report, to provide reasonable assurance that information required to be disclosed by us in the reports filed, or submitted by us, under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commissions rules and forms. During the period covered by this report, there has been no change in the Companys internal controls over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



Item 16A.Audit Committee Financial Expert



The Board of Directors has affirmatively determined that we have two audit committee financial experts serving on our audit committee, Mr. Kevin C. Shea
and Mr. Robert M. Wadsworth.



Item 16B.Code of Ethics



We adopted a code of ethics that applies to all our employees, including our Chief Executive Officer, our Chief Financial Officer and our Controller. A copy of our code of ethics is available free of charge upon request by writing to us,
attention of our Chief Financial Officer, at the address on the front cover of this Form 20-F.



Any amendment to or waivers of the code of ethics for members of our Board of Directors and our executive officers will be disclosed on our web-site at www.trintech.com within five business days following the
amendment or waiver, and we may also disclose such amendment or waiver on a Form 6-K or Form 20-F. During fiscal 2004, no amendments to our waivers from the code of ethics were made or given for any of our executive officers.



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Item 16C.Principal Accountant Fees and Services



Fees Billed for Services Rendered by Principal Auditors



Ernst & Young, our independent auditors, billed us the fees set forth below for services rendered during the fiscal years January 31, 2004 and January
31, 2003. The audit committee of the board of directors has considered whether the non-audit services provided by Ernst & Young are compatible with maintaining its independence.



An analysis of Principal Accountant Fees and Services, for the last two fiscal years, is included below:



|                       |  |                                |         |                                |   |        
|---------------------- |  | ------------------------------ | ------- | ------------------------------ | - | -------
|                       |  | For year endedJanuary 31, 2004 |         | For year endedJanuary 31, 2003
|                       |  | US$                            |         | US$                           
|Audit fees (1)         |  | $                              | 242,703 |                                | $ | 250,982
|Audit related fees (2) |  |                                | 2,147   |                                |   | 13,112 
|Tax fees (3)           |  |                                | 98,995  |                                |   | 28,183 
|All other fees (4)     |  |                                | 5,788   |                                |   |       
|                       |  |                                |         |                                |   |        
|Total fees             |  | $                              | 349,633 |                                | $ | 292,277
|                       |  |                                |         |                                |   |        

---

|(1) | Audit fees consist of services that would normally be provided in connection with statutory and regulatory filings or engagements, including services that generally only the
independent accountant can reasonably provide.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees relate primarily to the audit of grant claims.
|--- | -----------------------------------------------------------------

|(3) | Tax fees relate to tax compliance, planning, and advice.
|--- | --------------------------------------------------------

|(4) | Other fees include services related to forensic and security advisory services.
|--- | -------------------------------------------------------------------------------



Policies and Procedures



Our Audit Committee has adopted a policy and procedures for the approval of audit and non-audit services rendered by our independent auditors, Ernst &
Young. The policy generally requires the Audit Committees approval of the scope of the engagement of our independent auditor on an individual basis. The policy prohibits retention of the independent auditors to perform the prohibited non-audit
functions defined in Section 201 of the Sarbanes-Oxley Act of 2002 or the rules of the SEC, and also considers whether proposed services are compatible with the independence of the public auditors. Our Audit Committee approved 1% of the
audit-related fees, tax fees and all other fees listed in the table above.



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PART III



Item 17.Financial Statements



Not Applicable. Please see Item 18. Financial Statements.



Item 18.Financial Statements



Financial documents filed as part of this Form 20-F.



(1) Financial Statements. The following Trintech Group PLC Consolidated Financial Statements prepared in accordance with U.S. GAAP and
attached hereto on pages F-1 to F-37 are herein incorporated by reference.



| |  |                                                           
| |  | ----------------------------------------------------------
| |  | Report of Independent Auditors                            
| |  | Consolidated Balance Sheets                               
| |  | Consolidated Statement of Operations                      
| |  | Consolidated Statements of Changes in Shareholders Equity
| |  | Consolidated Statements of Cash Flows                     
| |  | Notes to the Consolidated Financial Statements            



(2)
Financial Statement Schedule. The following financial statement schedule of Trintech Group PLC for the fiscal years ended January 31, 2004, 2003 and 2002 is filed as part of this Form 20-F and should be read in conjunction with the Companys
Consolidated Financial Statements incorporated by reference in Item 18 of this Form 20-F.



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SCHEDULE II



TRINTECH GROUP PLC



VALUATION AND QUALIFYING ACCOUNTS



|                                      |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                          |  | 
|------------------------------------- |  | ------------------------------ |  | --------------------------------------- | --- |  | ----------------------------------- | --- |  | -------------------- | - |  | ---------- |  | ------------------------ |  | 
|Description                           |  | Balance at beginning Of period |  | Additions charged to costs and expenses |     |  | Additions charged to other accounts |     |  | Exchange differences |   |  | Deductions |  | Balance at end of period
|                                      |  | (U.S. dollars in thousands)   
|Year ended January 31, 2004           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Deducted from asset account:          |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Provisions for bad and doubtful debts |  | 1,884                          |  | 700                                     |     |  |                                    |     |  | 202                  |   |  | (1,191)    |  | 1,595                   
|Year ended January 31, 2003           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Deducted from asset account:          |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Provisions for bad and doubtful debts |  | 1,036                          |  | 2,668                                   |     |  |                                    |     |  | 222                  |   |  | (2,042)    |  | 1,884                   
|Year ended January 31, 2002           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Deducted from asset account:          |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Provisions for bad and doubtful debts |  | 1,327                          |  | 2,079                                   |     |  |                                    |     |  | (73                  | ) |  | (2,297)    |  | 1,036                   
|Year ended January 31, 2004           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Warranty Reserve                      |  | 625                            |  | 185                                     |     |  |                                    |     |  | 62                   |   |  | (516)      |  | 356                     
|Year ended January 31, 2003           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Warranty Reserve                      |  | 397                            |  | 565                                     |     |  |                                    |     |  | 60                   |   |  | (397)      |  | 625                     
|Year ended January 31, 2002           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Warranty Reserve                      |  | 521                            |  | 40                                      |     |  |                                    |     |  | (34                  | ) |  | (130)      |  | 397                     
|Year ended January 31, 2004           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Inventory Provision                   |  | 3,910                          |  | 409                                     |     |  |                                    |     |  | 369                  |   |  | (2,048)    |  | 2,640                   
|Year ended January 31, 2003           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Inventory Provision                   |  | 540                            |  | 3,257                                   |     |  |                                    |     |  | 201                  |   |  | (88)       |  | 3,910                   
|Year ended January 31, 2002           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Inventory Provision                   |  | 200                            |  | 813                                     |     |  |                                    |     |  | 12                   |   |  | (485)      |  | 540                     
|Year ended January 31, 2004           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Tax Valuation Allowance               |  | 15,863                         |  | 3,006                                   | (1) |  | 58                                  | (2) |  | 1,731                |   |  | (1,518)    |  | 19,140                  
|Year ended January 31, 2003           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Tax Valuation Allowance               |  | 8,243                          |  | 3,243                                   | (1) |  | 2,919                               | (2) |  | 1,458                |   |  |           |  | 15,863                  
|Year ended January 31, 2002           |  |                                |  |                                         |     |  |                                     |     |  |                      |   |  |            |  |                         
|Tax Valuation Allowance               |  | 4,475                          |  | 4,068                                   | (1) |  |                                    |     |  | (300                 | ) |  |           |  | 8,243                   

---

|(1) | In relation to additions charged to cost and expenses, the change in valuation allowance is principally due to the change in deferred tax assets.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In relation to additions charged to other accounts, the adjustment is due to the cumulative movement in the tax value of disqualifying dispositions.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------



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Schedules not listed above have been omitted because the information required to be described in the
schedules is not applicable or is shown in the financial statements.



Item 19.Exhibits



|               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|Exhibit Number |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                       
|1.1            |  | Memorandum and Articles of Association of Trintech Group PLC, as amended, dated July 12, 2002                                                                                                                                                                                                                                                                                                                                                 
|               | 
|2.1            |  | Specimen of Ordinary Share Certificate (filed as Exhibit 4.1 to Trintechs Registration Statement on Form F-1 (File No. 333-1078) and incorporated herein by
reference)                                                                                                                                                                                                                                                                       
|               | 
|2.2            |  | Form of Depositary Agreement among Trintech Group Limited, The Bank of New York, as Depositary, and holders from time to time of American Depositary Shares issued thereunder
(including as an exhibit the form of American Depositary Receipt) dated as of September 27, 1999, as amended on March 16, 2000 (filed as Exhibit 4.2 to Trintechs Registration Statement on Form F-1 (File No. 333-32762) and incorporated herein
by reference)
|               | 
|4.1            |  | 1990 Trintech Group Limited Share Option Scheme (filed as Exhibit 10.1 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by
reference)                                                                                                                                                                                                                                                            
|               | 
|4.2            |  | 1997 Trintech Group Limited Share Option Scheme, as amended, dated as of July 18, 2003                                                                                                                                                                                                                                                                                                                                                        
|               | 
|4.3            |  | 1998 Trintech Group Limited Directors and Consultants Share Option Scheme, as amended, dated as of July 12, 2002 (filed as Exhibit 4.3 to Trintechs Annual Report on Form
20-F (File No. 0-30320) for the year ended January 31, 2003 and incorporated by reference).                                                                                                                                                                        
|               | 
|4.4            |  | 1999 Employee Share Purchase Plan (filed as Exhibit 10.4 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by
reference)                                                                                                                                                                                                                                                                          
|               | 
|4.5            |  | [Reserved]                                                                                                                                                                                                                                                                                                                                                                                                                                    
|               | 
|4.6            |  | [Reserved]                                                                                                                                                                                                                                                                                                                                                                                                                                    
|               | 
|4.7            |  | [Reserved]                                                                                                                                                                                                                                                                                                                                                                                                                                    
|               | 
|4.8            |  | Credit Agreement between Trintech Group of Companies and The Bank of Ireland dated November 12, 1997 (filed as Exhibit 10.14 to Trintechs Registration Statement on Form
F-1 (File No. 333-10738) and incorporated herein by reference)                                                                                                                                                                                                      
|               | 
|4.9            |  | 1999 U.S. Share Purchase Plan (filed as Exhibit 10.10 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by
reference)                                                                                                                                                                                                                                                                             
|               | 
|4.10           |  | Debenture between Trintech Group Limited and The Bank of Ireland dated April 23, 1998 (filed as Exhibit 10.15 to Trintechs Registration Statement on Form F-1 (File No.
333-10738) and incorporated herein by reference)                                                                                                                                                                                                                     
|               | 
|4.11           |  | Lease Agreement between John McGuire, Cyril McGuire and Trintech Group Limited dated August 10, 2001 (filed as Exhibit 4.11 to Trintechs Annual Report on Form 20-F
(File No. 0-30320) for the year ended January 31, 2002 and incorporated herein by reference).                                                                                                                                                                            
|               | 
|4.12           |  | Lease Agreement between 5 Independence Associates Limited Partnership and Trintech, Inc. dated April 30, 1998 (filed as Exhibit 10.22 to Trintechs Registration Statement on
Form F-1 (File No. 333-10738) and incorporated herein by reference)                                                                                                                                                                                             
|               | 
|4.13           |  | Amendment No. 1 to Lease Agreement between 5 Independence Associates Limited Partnership and Trintech, Inc. dated August 4, 1998 (filed as Exhibit 10.23 to Trintechs
Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by reference)                                                                                                                                                                          



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|               |  |                                                                                                                                                                                                                                                                                                        
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Document                                                                                                                                                                                                                                                                                
|               | 
|4.14           |  | Guaranty Agreement between 5 Independence Associates Limited Partnership and Trintech Holdings Limited dated April 1998 (filed as Exhibit 10.24 to Trintechs Registration Statement on
Form F-1 (File No. 333-10738) and incorporated herein by reference)                                            
|               | 
|4.15           |  | Office Lease Agreement between Sherlon Investments Corp. and Trintech, Inc. dated December 12, 1997 (filed as Exhibit 10.25 to Trintechs Registration Statement on Form F-1 (File No.
333-10738) and incorporated herein by reference)                                                                
|               | 
|4.16           |  | Lease Agreement between Service Life & Casualty Ins. Co. and Trintech, Inc. dated January 5, 1999 (filed as Exhibit 10.27 to Trintechs Registration Statement on Form F-1 (File No.
333-10738) and incorporated herein by reference)                                                                  
|               | 
|4.17           |  | Lease Agreement between Lincoln Bascom Office Center and Trintech, Inc. dated March 19, 1996 (filed as Exhibit 10.28 to Trintechs Registration Statement on Form F-1 (File No. 333-10738)
and incorporated herein by reference)                                                                       
|               | 
|4.18           |  | First Amendment to Office Building Lease between Lincoln Bascom Office Center and Trintech, Inc. dated April 1, 1997 (filed as Exhibit 10.29 to Trintechs Registration Statement on Form
F-1 (File No. 333-10738) and incorporated herein by reference)                                               
|               | 
|4.19           |  | First Amendment to Office Lease Agreement between Sherlon Investments Corp and Trintech, Inc. dated February 10, 1999 (filed as Exhibit 10.30 to Trintechs Registration Statement on Form
F-1 (File No. 333-10738) and incorporated herein by reference)                                              
|               | 
|4.20           |  | Second Amendment to Office Building Lease between Lincoln Bascom Office Center and Trintech, Inc. dated May 4, 1998 (filed as Exhibit 10.31 to Trintechs Registration Statement on Form
F-1 (File No. 333-10738) and incorporated herein by reference)                                                
|               | 
|4.21           |  | Third Amendment to Office Building Lease between Lincoln Bascom Office Center and Trintech, Inc. dated May 21, 1998 (filed as Exhibit 10.32 to Trintechs Registration Statement on Form
F-1 (File No. 333-10738) and incorporated herein by reference)                                                
|               | 
|4.22           |  | Lease Agreement between Trintech, Inc. and Peninsula Office Park Associates, L.P. dated May 28, 1999 (filed as Exhibit 4.22 to Trintechs Annual Report on Form 20-F (File No.
0-30320) and incorporated herein by reference)                                                                          
|               | 
|4.23           |  | First Amendment to the Lease between Trintech, Inc. and Peninsula Office Park Associates, L.P. dated November 1, 1999 (filed as Exhibit 4.23 to Trintechs Annual Report on Form 20-F
(File No. 0-30320) and incorporated herein by reference)                                                         
|               | 
|4.24           |  | Asset Purchase Agreement by and among Trintech Technologies Limited, Maria Sanchez and Eduardo Spangenberg, dated as of September 12, 2000 (filed as Exhibit 4.24 to Trintechs Annual
Report on Form 20-F (File No. 0-30320) for the year ended January 31, 2001 and incorporated herein by reference)
|               | 
|4.25           |  | Form of Indemnification Agreement between Trintech, Inc. and its directors and officers dated September 1999 (filed as Exhibit 10.5 to Trintechs Registration Statement on Form F-1 (File
No. 333-10738) and incorporated herein by reference)                                                        
|               | 
|4.26           |  | Supply Agreement between Keltek Electronics Limited and Trintech Group Limited dated August 17, 1998 (filed as Exhibit 10.20 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by reference)                                                               
|               | 
|4.27           |  | Grant to Trintech Manufacturing Limited from Enterprise Ireland dated December 3, 1996 (filed as Exhibit 10.33 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                                             



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|               |  |                                                                                                                                                                                                                                                                                  
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Document                                                                                                                                                                                                                                                          
|               | 
|4.28           |  | Grant to Trintech Manufacturing Limited from Enterprise Ireland dated December 3, 1996 (filed as Exhibit 10.34 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                       
|               | 
|4.29           |  | Grant to Trintech Manufacturing Limited from Enterprise Ireland dated October 13, 1997 (filed as Exhibit 10.35 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                       
|               | 
|4.30           |  | Grant to Trintech Manufacturing Limited from Enterprise Ireland dated October 13, 1997 (filed as Exhibit 10.36 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                       
|               | 
|4.31           |  | Software Source Code License Agreement between RSA Data Security, Inc. and Trintech Manufacturing Ltd. Dated March 31, 1998 (filed as Exhibit 10.16 to Trintechs Registration Statement
on Form F-1 (File No. 333-10738) and incorporated herein by reference)                  
|               | 
|4.32          |  | Marketing Agreement between RSA Data Security, Inc. and Trintech Manufacturing Ltd. Dated March 31, 1998 (filed as Exhibit 10.17 to Trintechs Registration Statement on Form F-1 (File
No. 333-32762) and incorporated herein by reference)                                     
|               | 
|4.33          |  | Agreement between Visa International and Trintech Group Limited dated August 27, 1998 (filed as Exhibit 10.18 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                        
|               | 
|4.34           |  | Marketing Agreement between SAP Aktiengesellschaft and Trintech Group Limited dated November 19, 1998 (filed as Exhibit 10.5 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and incorporated herein by reference)                                         
|               | 
|4.35          |  | Development and Marketing Agreement between Trintech Group and Visa International Service Association dated March 26, 1999 (filed as Exhibit 10.37 to Trintechs Registration Statement on
Form F-1 (File No. 333-10738) and incorporated herein by reference)                   
|               | 
|4.36          |  | License Agreement between Trintech, Inc. and Visa U.S.A., Inc. dated May 12, 1999 (filed as Exhibit 10.38 to Trintechs Registration Statement on Form F-1 (File No. 333-10738) and
incorporated herein by reference)                                                            
|               | 
|4.37           |  | Master Joint Marketing Agreement between Trintech, Inc. and Compaq Computer Corporation dated March 17, 1999 (filed as Exhibit 10.39 to Trintechs Registration Statement on Form F-1
(File No. 333-10738) and incorporated herein by reference)                                 
|               | 
|4.38           |  | Exceptis Technologies Limited Share Option Scheme, adopted on July 14, 2000 (filed as Exhibit 4.38 to Trintechs Annual Report on Form 20-F (File No. 0-30320) for the year ended January
31, 2001 and incorporated herein by reference)                                         
|               | 
|4.39           |  | Sale and Purchase Agreement by and between Trintech Group PLC and Exceptis Technologies Limited, dated November 2000 (filed as Exhibit 4.39 to Trintechs Annual Report on Form 20-F (File
No. 0-30320) for the year ended January 31, 2001 and incorporated herein by reference)
|               | 
|4.40           |  | Asset Purchase Agreement by and among Trintech Group PLC, Trintech Technologies Limited, and Globeset, Inc. (filed as Exhibit 4.40 to Trintechs Annual Report on Form 20-F (File No.
0-30320) for the year ended January 31, 2001 and incorporated herein by reference)         
|               | 
|4.41           |  | Sale and Purchase Agreement by and between Suresh Mirpuri and Trintech Group PLC, dated August 24, 2000 (filed as Exhibit 4.41 to Trintechs Annual Report on Form 20-F (File No. 0-30320)
for the year ended January 31, 2001 and incorporated herein by reference)             



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|               |  |                                                                                                                                                                                                                                                              
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Document                                                                                                                                                                                                                                      
|               | 
|4.42           |  | Line of Credit Agreement between Trintech Group PLC and The Bank of Ireland dated April 05, 2002 (filed as Exhibit 4.42 to Trintechs Annual Report on Form 20-F (File No. 0-30320) for
the year ended January 31, 2002 and incorporated herein by reference)
|               | 
|4.43           |  | Stock Purchase Agreement dated November 1, 2003 between Trintech Group PLC, Trintech, Inc., CW & Associates, doing business as DataFlow Services and Jeffrey Wiggins.                                                                                        
|               | 
|4.44           |  | Share Subscription Agreement dated November 1, 2003 between Trintech Group PLC, Trintech, Inc. and Jeffrey Wiggins.                                                                                                                                          
|               | 
|4.45           |  | Grant to Trintech Technologies Limited from Enterprise Ireland dated April 26, 2004.                                                                                                                                                                         
|               | 
|8.1            |  | Subsidiaries of Trintech Group PLC (See pages 31 and 32 of this Form 20-F)                                                                                                                                                                                   
|               | 
|10.1           |  | Consent of Ernst & Young                                                                                                                                                                                                                                     
|               | 
|12.1           |  | Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.                                                                                                                                                   
|               | 
|12.2           |  | Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.                                                                                                                                                   
|               | 
|13.1           |  | Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code.                                                                                                        

---

| | Documents for which confidential treatment has been previously granted.
|- | -----------------------------------------------------------------------



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##### Table of Contents

SIGNATURES



Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.



TRINTECH GROUP PLC (Registrant)By:

/s/    RICHARD PAUL BYRNER. Paul Byrne Chief Financial Officer




Date: May 12, 2004



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INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

OF TRINTECH GROUP PLC



|                                                           |  |     
|---------------------------------------------------------- |  | ----
|                                                           |  | Page
|Report of Independent Auditors                             |  | F-2 
|Consolidated Balance Sheets                                |  | F-3 
|Consolidated Statements of Operations                      |  | F-4 
|Consolidated Statements of Changes in Shareholders Equity |  | F-5 
|Consolidated Statements of Cash Flows                      |  | F-6 
|Notes to the Consolidated Financial Statements             |  | F-7 



F-1



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##### Table of Contents

REPORT OF INDEPENDENT AUDITORS



The Board of Directors and Shareholders of

Trintech Group PLC



We have audited the accompanying consolidated balance sheets of Trintech
Group PLC and subsidiaries as of January 31, 2003 and 2004, and the related consolidated statements of operations, changes in shareholders equity, and cash flows for each of the three years in the period ended January 31, 2004. Our audits also
included the financial statement schedules listed at Item 18. These consolidated financial statements and financial statement schedules are the responsibility of the Companys management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.



We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Trintech Group PLC and its subsidiaries at January 31, 2003 and 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 2004, in
conformity with accounting principles generally accepted in the United States. Also in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.



As
discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for amortization of goodwill and other identifiable intangible assets.



ERNST & YOUNG

Dublin, Ireland



February 24, 2004



F-2



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##### Table of Contents

TRINTECH GROUP PLC



CONSOLIDATED BALANCE SHEETS

(U.S dollars in thousands, except share and per share data)



|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | -------- | -
|                                                                                                                                                                     |  | Year ended January 31, |         
|                                                                                                                                                                     |  | 2003                   |          |   | 2004 |  
|ASSETS                                                                                                                                                               |  |                        |          |   |      |   |          |  
|Current assets                                                                                                                                                       |  |                        |          |   |      |   |          |  
|Cash and cash equivalents                                                                                                                                            |  | $                      | 42,559   |   |      | $ | 36,864   |  
|Restricted cash (notes 6 and 19)                                                                                                                                     |  |                        | 3,132    |   |      |   | 1,211    |  
|Accounts receivable, net of allowance for doubtful accounts of $1,884 and $1,595                                                                                     |  |                        | 10,085   |   |      |   | 9,800    |  
|Inventories (note 4)                                                                                                                                                 |  |                        | 3,077    |   |      |   | 824      |  
|Value added taxes                                                                                                                                                    |  |                        | 617      |   |      |   | 471      |  
|Prepaid expenses and other assets                                                                                                                                    |  |                        | 2,665    |   |      |   | 2,706    |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total current assets                                                                                                                                                 |  |                        | 62,135   |   |      |   | 51,876   |  
|Property and equipment, net (notes 7 and 8)                                                                                                                          |  |                        | 1,674    |   |      |   | 988      |  
|Other non-current assets, net (note 9)                                                                                                                               |  |                        | 3,095    |   |      |   | 3,994    |  
|Goodwill, net (note 20)                                                                                                                                              |  |                        | 6,609    |   |      |   | 7,459    |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total assets                                                                                                                                                         |  | $                      | 73,513   |   |      | $ | 64,317   |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|                                                                                                                                                                     |  |                       
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                 |  |                        |          |   |      |   |          |  
|Current liabilities                                                                                                                                                  |  |                        |          |   |      |   |          |  
|Accounts payable                                                                                                                                                     |  | $                      | 4,130    |   |      | $ | 4,804    |  
|Accrued payroll and related expenses                                                                                                                                 |  |                        | 2,439    |   |      |   | 1,864    |  
|Other accrued liabilities (notes 6 and 10)                                                                                                                           |  |                        | 10,602   |   |      |   | 5,699    |  
|Value added taxes                                                                                                                                                    |  |                        | 365      |   |      |   | 819      |  
|Warranty reserve                                                                                                                                                     |  |                        | 625      |   |      |   | 356      |  
|Deferred revenue                                                                                                                                                     |  |                        | 8,394    |   |      |   | 8,739    |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total current liabilities                                                                                                                                            |  |                        | 26,555   |   |      |   | 22,281   |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Non-current liabilities                                                                                                                                              |  |                        |          |   |      |   |          |  
|Capital lease due after more than one year (note 7)                                                                                                                  |  |                        | 343      |   |      |   | 84       |  
|Government grants repayable and related loans (note 16)                                                                                                              |  |                        | 137      |   |      |   | 157      |  
|Deferred consideration                                                                                                                                               |  |                        | 475      |   |      |   |         |  
|Provision for lease abandonment (note 6)                                                                                                                             |  |                        | 920      |   |      |   | 441      |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total non-current liabilities                                                                                                                                        |  |                        | 1,875    |   |      |   | 682      |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Series B preference shares, $0.0027 par value:                                                                                                                       |  |                        |          |   |      |   |          |  
|10,000,000 authorized at January 31, 2003 and 2004 respectively                                                                                                      |  |                        |          |   |      |   |          |  
|None issued and outstanding                                                                                                                                          |  |                        |         |   |      |   |         |  
|Shareholders equity:                                                                                                                                                |  |                        |          |   |      |   |          |  
|Ordinary Shares, $0.0027 par value: 100,000,000 shares authorized; 30,523,413 and 30,596,775 shares issued and outstanding at January 31, 2003
and 2004 respectively |  |                        | 83       |   |      |   | 83       |  
|Additional paid-in capital                                                                                                                                           |  |                        | 245,622  |   |      |   | 245,965  |  
|Treasury shares (254,508 shares)                                                                                                                                     |  |                        | (140     | ) |      |   | (268     | )
|Accumulated deficit                                                                                                                                                  |  |                        | (199,015 | ) |      |   | (202,175 | )
|Deferred stock compensation                                                                                                                                          |  |                        | (34      | ) |      |   |         |  
|Accumulated other comprehensive loss                                                                                                                                 |  |                        | (1,433   | ) |      |   | (2,251   | )
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total shareholders equity                                                                                                                                           |  |                        | 45,083   |   |      |   | 41,354   |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  
|Total liabilities and shareholders equity                                                                                                                           |  | $                      | 73,513   |   |      | $ | 64,317   |  
|                                                                                                                                                                     |  |                        |          |   |      |   |          |  



See accompanying
notes



F-3



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##### Table of Contents

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per share data)



|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|--------------------------------------------------------------------- |  | ---------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                      |  | Year ended January 31, |           
|                                                                      |  | 2002                   |            |   | 2003 |   |            | 2004 | 
|Revenue:                                                              |  |                        |            |   |      |   |            |      |  |   |            |  
|Product                                                               |  | $                      | 26,104     |   |      | $ | 9,165      |      |  | $ | 10,318     |  
|License                                                               |  |                        | 30,240     |   |      |   | 22,418     |      |  |   | 22,867     |  
|Service                                                               |  |                        | 11,997     |   |      |   | 11,273     |      |  |   | 9,886      |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total revenue                                                         |  |                        | 68,341     |   |      |   | 42,856     |      |  |   | 43,071     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Cost of revenue:                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Product                                                               |  |                        | 19,476     |   |      |   | 11,148     |      |  |   | 7,586      |  
|License                                                               |  |                        | 10,448     |   |      |   | 9,248      |      |  |   | 5,313      |  
|Service                                                               |  |                        | 8,681      |   |      |   | 8,456      |      |  |   | 6,020      |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total cost of revenue                                                 |  |                        | 38,605     |   |      |   | 28,852     |      |  |   | 18,919     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Gross margin                                                          |  |                        | 29,736     |   |      |   | 14,004     |      |  |   | 24,152     |  
|Operating expenses:                                                   |  |                        |            |   |      |   |            |      |  |   |            |  
|Research and development                                              |  |                        | 20,597     |   |      |   | 10,349     |      |  |   | 8,280      |  
|Sales and marketing                                                   |  |                        | 18,719     |   |      |   | 10,297     |      |  |   | 8,689      |  
|General and administrative                                            |  |                        | 17,891     |   |      |   | 15,354     |      |  |   | 10,587     |  
|Restructuring charge (note 21)                                        |  |                        | 5,320      |   |      |   | 4,270      |      |  |   | 745        |  
|Amortization of goodwill                                              |  |                        | 27,806     |   |      |   |           |      |  |   |           |  
|Amortization of purchased intangible assets                           |  |                        | 3,899      |   |      |   | 2,573      |      |  |   | 507        |  
|Impairment of goodwill (note 20)                                      |  |                        | 36,540     |   |      |   | 12,849     |      |  |   |           |  
|Impairment of purchased intangible assets (note 9)                    |  |                        | 1,562      |   |      |   | 3,686      |      |  |   |           |  
|Adjustment of acquisition liabilities (note 19)                       |  |                        |           |   |      |   | 804        |      |  |   |           |  
|Adjustment of acquisition deferred consideration (note 19)            |  |                        |           |   |      |   |           |      |  |   | (1,149     | )
|Stock compensation                                                    |  |                        | 840        |   |      |   | 20         |      |  |   |           |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total operating expenses                                              |  |                        | 133,174    |   |      |   | 60,202     |      |  |   | 27,659     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Income (loss) from operations                                         |  |                        | (103,438   | ) |      |   | (46,198    | )    |  |   | (3,507     | )
|Interest income, net                                                  |  |                        | 2,961      |   |      |   | 716        |      |  |   | 268        |  
|Exchange gain, net                                                    |  |                        | 523        |   |      |   | 771        |      |  |   | 79         |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Income (loss) before provision for income taxes                       |  |                        | (99,954    | ) |      |   | (44,711    | )    |  |   | (3,160     | )
|Provision for income taxes (note 14)                                  |  |                        | (85        | ) |      |   | (108       | )    |  |   |           |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|                                                                      |  |                        |           
|Net Income (loss)                                                     |  | $                      | (100,039   | ) |      | $ | (44,819    | )    |  | $ | (3,160     | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per Ordinary Share                            |  | $                      | (3.30      | ) |      | $ | (1.47      | )    |  | $ | (0.10      | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Shares used in computing basic net income (loss) per Ordinary Share   |  |                        | 30,341,559 |   |      |   | 30,559,410 |      |  |   | 30,314,419 |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per Ordinary Share                          |  | $                      | (3.30      | ) |      | $ | (1.47      | )    |  | $ | (0.10      | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Shares used in computing diluted net income (loss) per Ordinary Share |  |                        | 30,341,559 |   |      |   | 30,559,410 |      |  |   | 30,314,419 |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per equivalent ADS                            |  | $                      | (6.59      | ) |      | $ | (2.93      | )    |  | $ | (0.21      | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per equivalent ADS                          |  | $                      | (6.59      | ) |      | $ | (2.93      | )    |  | $ | (0.21      | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  



See accompanying
notes



F-4



---

##### Table of Contents

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(U.S. dollars in
thousands, except share data)



|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|----------------------------------------------------------------------------------- |  | ------------------------- | - |  | --------------- | -- | -------------------------- | - | ------- | --------------- |  | - | ------------------- | - |  | --------------------------- | -------- | - | ------------------------------------ | - | ---- | -------------------------- |  | - | ------ | - |  | - | -------- | -
|                                                                                    |  | Number of Ordinary Shares |   |  | Ordinary Shares |    | Additional Paid-in Capital |   |         | Treasury Shares |  |   | Accumulated Deficit |   |  | Deferred Stock Compensation |          |   | Accumulated Other Comprehensive Loss |   |      | Total Shareholders Equity | 
|Balance at January 31, 2001                                                         |  | 30,030,725                |   |  | $               | 81 |                            | $ | 242,474 |                 |  | $ |                    |   |  | $                           | (54,157  | ) |                                      | $ | (246 | )                          |  | $ | (792   | ) |  | $ | 187,360  |  
|Issuance of Ordinary Shares on exercise of options (a)                              |  | 362,199                   |   |  |                 | 1  |                            |   | 819     |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 820      |  
|Issuance of Ordinary Shares for cash                                                |  | 128,836                   |   |  |                 | 0  |                            |   | 1,681   |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 1,681    |  
|Expenses of share issues                                                            |  |                          |   |  |                 |   |                            |   | (105    | )               |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (105     | )
|Reversal of deferred compensation related to the expiry of unvested options assumed |  |                          |   |  |                 |   |                            |   | (39     | )               |  |   |                    |   |  |                             |         |   |                                      |   | 39   |                            |  |   |       |   |  |   |         |  
|Amortization of deferred compensation                                               |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   | 75   |                            |  |   |       |   |  |   | 75       |  
|Stock compensation                                                                  |  |                          |   |  |                 |   |                            |   | 765     |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 765      |  
|Net loss                                                                            |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             | (100,039 | ) |                                      |   |     |                            |  |   |       |   |  |   | (100,039 | )
|Currency translation adjustment                                                     |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   | (126   | ) |  |   | (126     | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Comprehensive loss                                                                  |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (100,165 | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Balance at January 31, 2002                                                         |  | 30,521,760                |   |  |                 | 82 |                            |   | 245,595 |                 |  |   |                    |   |  |                             | (154,196 | ) |                                      |   | (132 | )                          |  |   | (918   | ) |  |   | 90,431   |  
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Issuance of Ordinary Shares on exercise of options (a)                              |  | 27,378                    |   |  |                 | 0  |                            |   | 20      |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 20       |  
|Issuance of Ordinary Shares for cash                                                |  | 89,569                    |   |  |                 | 1  |                            |   | 104     |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 105      |  
|Expenses of share issues                                                            |  |                          |   |  |                 |   |                            |   | (19     | )               |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (19      | )
|Purchase of treasury shares                                                         |  | (115,294                  | ) |  |                 |   |                            |   |        |                 |  |   | (140                | ) |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (140     | )
|Reversal of deferred compensation related to the expiry of unvested options assumed |  |                          |   |  |                 |   |                            |   | (78     | )               |  |   |                    |   |  |                             |         |   |                                      |   | 78   |                            |  |   |       |   |  |   |         |  
|Amortization of deferred compensation                                               |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   | 20   |                            |  |   |       |   |  |   | 20       |  
|Net loss                                                                            |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             | (44,819  | ) |                                      |   |     |                            |  |   |       |   |  |   | (44,819  | )
|Currency translation adjustment                                                     |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   | (515   | ) |  |   | (515     | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Comprehensive loss                                                                  |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (45,334  | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Balance at January 31, 2003                                                         |  | 30,523,413                |   |  |                 | 83 |                            |   | 245,622 |                 |  |   | (140                | ) |  |                             | (199,015 | ) |                                      |   | (34  | )                          |  |   | (1,433 | ) |  |   | 45,083   |  
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Issuance of Ordinary Shares on exercise of options (a)                              |  | 212,576                   |   |  |                 | 0  |                            |   | 155     |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 155      |  
|Purchase of treasury shares                                                         |  | (502,662                  | ) |  |                 |   |                            |   |        |                 |  |   | (512                | ) |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (512     | )
|Reissue of treasury shares                                                          |  | 463,448                   |   |  |                 |   |                            |   | 222     |                 |  |   | 384                 |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | 606      |  
|Reversal of deferred compensation related to the expiry of unvested options assumed |  |                          |   |  |                 |   |                            |   | (34     | )               |  |   |                    |   |  |                             |         |   |                                      |   | 34   |                            |  |   |       |   |  |   |         |  
|Net loss                                                                            |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             | (3,160   | ) |                                      |   |     |                            |  |   |       |   |  |   | (3,160   | )
|Currency translation adjustment                                                     |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   | (818   | ) |  |   | (818     | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Comprehensive loss                                                                  |  |                          |   |  |                 |   |                            |   |        |                 |  |   |                    |   |  |                             |         |   |                                      |   |     |                            |  |   |       |   |  |   | (3,978   | )
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  
|Balance at January 31, 2004                                                         |  | 30,596,775                |   |  | $               | 83 |                            | $ | 245,965 |                 |  | $ | (268                | ) |  | $                           | (202,175 | ) |                                      | $ |     |                            |  | $ | (2,251 | ) |  | $ | 41,354   |  
|                                                                                    |  |                           |   |  |                 |    |                            |   |         |                 |  |   |                     |   |  |                             |          |   |                                      |   |      |                            |  |   |        |   |  |   |          |  

---

|(a) | See note 13 to these statements
|--- | -------------------------------



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##### Table of Contents

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)



|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|---------------------------------------------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | -------- | ---- |  | - | ------ | -
|                                                                                         |  | Year ended January 31, |         
|                                                                                         |  | 2002                   |          |   | 2003 |   |          | 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |                        |          |   |      |   |          |      |  |   |        |  
|Net Income (loss)                                                                        |  | $                      | (100,039 | ) |      | $ | (44,819  | )    |  | $ | (3,160 | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                        |          |   |      |   |          |      |  |   |        |  
|Depreciation, amortization and impairment                                                |  |                        | 77,650   |   |      |   | 29,461   |      |  |   | 3,061  |  
|Stock compensation                                                                       |  |                        | 840      |   |      |   | 22       |      |  |   |       |  
|(Profit) on marketable securities                                                        |  |                        | (2,309   | ) |      |   | (569     | )    |  |   |       |  
|Purchase of marketable securities                                                        |  |                        | (417,972 | ) |      |   | (206,867 | )    |  |   |       |  
|Sale of marketable securities                                                            |  |                        | 459,693  |   |      |   | 255,412  |      |  |   |       |  
|Effect of changes in foreign currency exchange rates                                     |  |                        | (362     | ) |      |   | (1,779   | )    |  |   | 673    |  
|Changes in operating assets and liabilities:                                             |  |                        |          |   |      |   |          |      |  |   |        |  
|(Additions to) reductions from restricted cash deposits                                  |  |                        | (1,747   | ) |      |   | 2,237    |      |  |   | 1,921  |  
|Inventories                                                                              |  |                        | (2,015   | ) |      |   | 1,528    |      |  |   | 2,378  |  
|Accounts receivable                                                                      |  |                        | 2,401    |   |      |   | 7,240    |      |  |   | 1,635  |  
|Prepaid expenses and other assets                                                        |  |                        | 1,754    |   |      |   | 1,211    |      |  |   | 12     |  
|Value added tax receivable                                                               |  |                        | (277     | ) |      |   | (10      | )    |  |   | 223    |  
|Accounts payable                                                                         |  |                        | (1,344   | ) |      |   | (2,836   | )    |  |   | 301    |  
|Accrued payroll and related expenses                                                     |  |                        | 1,135    |   |      |   | (1,193   | )    |  |   | (685   | )
|Deferred revenues                                                                        |  |                        | (3,233   | ) |      |   | (229     | )    |  |   | (73    | )
|Value added tax payable                                                                  |  |                        | (689     | ) |      |   | (67      | )    |  |   | 411    |  
|Warranty reserve                                                                         |  |                        | (89      | ) |      |   | 136      |      |  |   | (344   | )
|Government grants repayable and related loans                                            |  |                        | (450     | ) |      |   |         |      |  |   | (399   | )
|Other accrued liabilities                                                                |  |                        | (461     | ) |      |   | (547     | )    |  |   | (4,403 | )
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Net cash provided by operating activities                                                |  |                        | 12,486   |   |      |   | 38,331   |      |  |   | 1,551  |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |  |                        |          |   |      |   |          |      |  |   |        |  
|Purchase of property and equipment                                                       |  |                        | (2,849   | ) |      |   | (283     | )    |  |   | (605   | )
|Payments relating to acquisitions                                                        |  |                        | (18,637  | ) |      |   | (2,270   | )    |  |   | (6,855 | )
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Net cash used in investing activities                                                    |  |                        | (21,486  | ) |      |   | (2,553   | )    |  |   | (7,460 | )
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |                        |          |   |      |   |          |      |  |   |        |  
|Principal payments on capital leases                                                     |  |                        | (542     | ) |      |   | (443     | )    |  |   | (446   | )
|Issuance of ordinary shares                                                              |  |                        | 2,501    |   |      |   | 123      |      |  |   | 761    |  
|Purchase of treasury shares                                                              |  |                        |         |   |      |   | (140     | )    |  |   | (512   | )
|Expenses of share issue                                                                  |  |                        | (105     | ) |      |   | (19      | )    |  |   |       |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Net cash provided by (used in) financing activities                                      |  |                        | 1,854    |   |      |   | (479     | )    |  |   | (197   | )
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Net (decrease) increase in cash and cash equivalents                                     |  |                        | (7,146   | ) |      |   | 35,299   |      |  |   | (6,106 | )
|Effect of exchange rate changes on cash and cash equivalents                             |  |                        | (142     | ) |      |   | 510      |      |  |   | 411    |  
|Cash and cash equivalents at beginning of period                                         |  |                        | 14,038   |   |      |   | 6,750    |      |  |   | 42,559 |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Cash and cash equivalents at end of period                                               |  | $                      | 6,750    |   |      | $ | 42,559   |      |  | $ | 36,864 |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Supplemental disclosure of cash flow information:                                        |  |                        |          |   |      |   |          |      |  |   |        |  
|Interest paid                                                                            |  | $                      | 72       |   |      | $ | 53       |      |  | $ | 85     |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Taxes paid                                                                               |  | $                      | 102      |   |      | $ | 339      |      |  | $ | 110    |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  
|Supplemental disclosure of non-cash flow information:                                    |  |                        |          |   |      |   |          |      |  |   |        |  
|Acquisition of property and equipment under capital leases                               |  | $                      |         |   |      | $ | 331      |      |  | $ | 87     |  
|                                                                                         |  |                        |          |   |      |   |          |      |  |   |        |  



See accompanying
notes



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



1. Organization and Summary of Significant Accounting Policies



Organization



Trintech Group PLC is organized as a public limited company under the laws of Ireland. Trintech Group PLC and its wholly-owned subsidiaries (collectively, the Company) operate in two market segments: electronic PoS systems that
securely process card-payment transactions in a physical point-of-sale (PoS) environment and e-payment software products that enable the secure processing, accounting and reconciliation and settlement of on-line card-payment transactions
over private and public networks, including the Internet. The Company also provides related development and professional services, including project management, implementation and training services. The Companys major customers, based on
revenues earned, are banks and other financial transaction processors in the USA, Germany and other European countries.



On May 24, 2002 the Company effected a one-for-four reverse split of its issued and outstanding ADSs, so that now two ordinary shares are equivalent to
one ADS. Basic and diluted net (loss) per equivalent ADS is therefore calculated using 50% of the weighted average number of ordinary shares outstanding during the period. All amounts shown per equivalent ADS have been retroactively adjusted to give
effect to the reverse split.



Basis of Presentation and
Principles of Consolidation



The accompanying
consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States and include the Company and its wholly-owned subsidiaries in Ireland, the United Kingdom, the Cayman Islands, Germany,
Uruguay and the United States after eliminating all material inter-company accounts and transactions. The consolidated financial statements include the results of acquired companies or businesses for the post-acquisition period.



Use of Estimates



The preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and the accompanying footnotes. Actual results could differ from those estimates.



Vulnerabilities due to Certain Concentrations



A small number of customers have historically accounted for a significant portion of the Companys revenues. The loss
of any of the Companys major customers or delays in orders by any such customers could have a material adverse effect on the Companys business and results of operations.



The Company uses one manufacturer for its PoS system products. While the Company has alternative manufacturing sources, if
the manufacturer increased cost or ceased manufacturing the Company may not be able to rapidly obtain alternative capacity at a comparable price. Failure to obtain an adequate supply of products on a timely basis would delay product delivery to
customers, which may have a material adverse effect on the Companys business and results of operations.



Companies Acts, 1963 to 2003



The financial information relating to the Company and its subsidiaries included in this document does not comprise full group accounts as referred to in
Regulation 40 of the European Communities (Companies: Group Accounts) Regulations 1992, copies of which are required by that Act to be annexed to a Companys annual return. The auditors have made reports without qualification under Section 193
of the Companies Act, 1990 in respect of the group financial statements for the years ended January 31, 2003 and 2002. Copies of full group accounts for each of the years ended January 31, 2003 and 2002 have been so annexed to the relevant annual
returns, and a copy of the full group accounts for the year ended January 31, 2004 together with the report of the auditors thereon will in due course be annexed to the relevant annual return, which will be filed after the annual general meeting of
the Company in 2004.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Translation of Financial Statements of Foreign Entities



The Euro () is the functional currency of the Companys
subsidiaries in Ireland and Germany. The US dollar (US$) is the functional currency of the parent company, Trintech Group PLC and the Companys subsidiaries in the United States, Uruguay and the Cayman Islands. The United Kingdom pound sterling
(Stg£) is the functional currency of the Companys UK subsidiaries. Transaction gains or losses arising on changes in the exchange rates between functional currencies and foreign currencies are included in net income (loss) for the
period. During the current year, the Company determined that the functional currency of the parent company was more appropriately the US$ rather than the Euro as had been used historically. The use of the Euro rather than the US$ was not material to
the previously reported results of operations or financial position.



The Companys assets and liabilities are translated to U.S. dollars, the reporting currency, at the exchange rate at the balance sheet date. Revenues, costs and expenses are translated to U.S. dollars at average rates of exchange
prevailing during the periods. Translation adjustments arising are reported as a component of shareholders equity. On June 30, 2002 after a transition period of six months, the Irish pound and the Deutsche mark ceased to be legal currencies of
Ireland and Germany and were replaced by the Euro. From that date the functional currencies of the Companys Irish subsidiaries and German subsidiary ceased to be the Irish pound and Deutsche mark respectively and became the Euro. The financial
statements of all of the entities affected for all periods presented by the Euro have been retranslated to Euro before translation to the U.S. Dollar, the reporting currency, using the fixed exchange rates between the Irish pound or Deutsche mark
and the Euro and depict the same trends as would have been presented if the entities concerned had continued to present financial statements in the currencies that were previously used.



Revenue Recognition



The Companys revenue is derived from product sales, license fees and charges for services.



Revenue is recognized on product sales when persuasive evidence of an
arrangement exists, delivery has occurred, the related fee is fixed or determinable and collectibility is reasonably assured.



The Company recognizes license revenue in accordance with the Securities and Exchange Commissions Staff Accounting Bulletins (SAB) No. 101, Revenue
Recognition in Financial Statements, as amended by SAB No. 104 Revenue Recognition, issued by the staff of the SEC in December 2003, the American Institute of Certified Public Accountants Statement of Position
(SOP) 97-2, Software Revenue Recognition, as amended by SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions. For license arrangements that do not require
significant modification or customization of the software, the Company recognize license revenue when: (1) persuasive evidence of an arrangement with a customer exists; (2) delivery to the customer has occurred; (3) the fee to be paid by the
customer is fixed or determinable; and (4) collection is probable. In addition, if the Company provides services that are considered essential to the functionality of the software products, both the license revenue and the service revenue are
recognized in accordance with the provisions of the American Institute of Certified Public Accountants Statement of Position (SOP) 81-1, Accounting for Performance of Construction-Type and Certain Production-Type
Contracts in accordance with the Input Method. The amount of revenue recognized is based on the total license and service fees under the agreement and the percentage of completion achieved.



If the license fee due from the customer is not fixed or determinable,
revenue is recognized as payment becomes due, assuming all other revenue recognition criteria have been met. The company considers arrangements with payment terms extending beyond one year not to be fixed or determinable and revenue is recognized as
payments become due from the customer. If collection of the fees from the customer is not



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



considered probable, revenue is recognized when the fee is collected. Revenue arrangements with resellers are recognized, net of fees, when persuasive
evidence is received that the reseller has sold the products to an end user customer and all other revenue recognition criteria are met.



SOP 97-2, as amended, generally requires revenue earned on software arrangements involving multiple elements to be allocated to each element based on the
relative fair values of the elements. Revenue recognized from multiple-element arrangements is allocated to various elements of the arrangement based on the relative fair values of the elements specific to the Company. The Companys
determination of fair value of each element in multi-element arrangements is based on vendor-specific objective evidence (VSOE). The Company limits its assessment of VSOE for each element to either the price charged when the same element is sold
separately or the price established by management, having the relevant authority to do so, for an element not yet sold separately.



If evidence of fair value of all undelivered elements exists but evidence does not exist for one or more delivered elements, then revenue is recognized
using the residual method. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is recognized as revenue. Revenue allocated to maintenance and support is recognized
ratably over the maintenance term, typically one year. Revenue allocated to implementation, training and other service elements is recognized as the services are performed.



Service revenue is derived mainly from customization, implementation and training services. Services are provided primarily
on a time and materials basis for which revenue is recognized in the period that the services are provided. Where contracts for services extend over a number of accounting periods and are not being provided on a time and materials basis, the revenue
is accounted for in conformity with the percentage-of-completion contract accounting method. Percentage-of-completion is measured using either output measures, primarily arrangement milestones where such milestones indicate progress to completion,
or input measures using the allocation of time spent to date as a proportion of total time allocated to the contract.



Arrangements that include services are evaluated to determine whether those services are essential to the functionality of other elements of the
arrangement. When services are not considered essential, the revenue allocable to the software services is recognized as the services are performed. If the Company provides services that are considered essential to the functionality of the software
products the amount of revenue recognized is based on the total license and service fees under the agreement and the percentage of completion achieved. The percentage of completion is measured by monitoring progress using records of actual time
incurred to date in the project compared to the total estimated project requirements, which corresponds to the costs related to earned revenues. Estimates of total project requirements are based on prior experience of customization of similar
software and delivery of similar services and are reviewed and updated regularly by management. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are first determined, in the amount of the estimated
loss on the entire contract. No such estimated losses were identified in any of the periods presented.



The Companys customers include a supplier from whom the Company has purchased goods and services for the Companys operations at or about the
same time the Company has licensed its software to that organization (a concurrent transaction). Concurrent transactions are separately negotiated and recorded at terms the Company considers to be arms-length. During the year ended
January 31, 2002, the Company recognized US$900,000 of software license revenues from concurrent transactions.



Cost of Revenue



Cost of product revenue includes outsourced manufacturing costs, and packaging, documentation, labor and other costs associated with packaging and
shipping electronic PoS system products. Cost of license revenue



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



includes shipping, software documentation, labor, third-party license fees and other costs associated with the delivery of software products from which
license revenue is derived and the cost of providing after-sale support and maintenance services to customers and amortization of purchased acquired technology costs. Cost of service revenue includes labor, travel and other non-recoverable costs
associated with the delivery of services to customers.



Cash and Cash Equivalents



The Company
considers all highly liquid investments with insignificant interest rate risk and purchased with a maturity of three months or less to be cash equivalents.



Marketable Securities



Marketable securities consist of commercial paper, corporate bonds and U.S. government agency fixed income securities. Marketable securities are stated at
market value, and by policy, the Company invests in high grade marketable securities. All marketable securities are defined as trading securities under the provisions of Statement of Financial Accounting Standards No. 115, Accounting for
Certain Investments in Debt and Equity Securities (SFAS 115), and unrealized holding gains and losses are reflected in earnings.



Derivative Financial Instruments



The Company uses derivative instruments to manage certain exposures to foreign currency risks. The Companys objectives for holding derivatives are
to minimize these risks using the most effective methods to eliminate or reduce the impact of such exposure.



The Company follows SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137, SFAS No. 138 and
SFAS No. 149. SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities, and requires that all derivatives, including foreign currency exchange contracts, be recognized on the balance sheet at fair
value. Changes in the fair value of derivatives that do not qualify for hedge treatment, as well as the ineffective portion of any hedges, are recognized in earnings. All of the Companys derivative financial instruments are recorded at their
fair value in other accrued liabilities.



Research and
Development



Research and development expenditures are
generally charged to operations as incurred. Statement of Financial Accounting Standards Number 86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed, requires capitalization of certain software
development costs subsequent to the establishment of technological feasibility.



Based on the Companys product development process, technological feasibility is established upon completion of a working model. Development costs incurred by the Company between completion of the working model
and the point at which the product is ready for general release have been insignificant. Through January 31, 2004, all research and development costs have been expensed.



Other Non-current Assets



On November 13, 2001, the Company acquired VeriFones secure payment infrastructure and Internet payment ePS product
line, for total consideration of US$3.4 million. The technology comprised a complete



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



e-commerce payment management solution aimed at large retailers, financial institutions, network operators and other multiple service providers. The
acquisition was accounted for under the purchase method of accounting. The total purchase costs of US$3.4 million, comprising the net cash paid and related transaction costs, was allocated, based on their respective fair values, to non-current
assets, purchased technology of US$2.0 million and acquired customer base of US$1.0 million, and goodwill of US$459,000. During January 2003, the Company recognized other non-current asset impairments of US$1.7 million in relation to the ePS
product, equivalent to the carrying value of the assets, which reduced the carrying value of the assets to nil.



Other non-current assets represent costs of technology acquired which have reached technological feasibility, the fair value at date of acquisition of an
assembled workforce (subsequently reclassified to goodwill), an acquired customer base, trade names and non-compete covenants related to the Companys acquisitions as described in Note 19. The costs of technology have been capitalized and will
be written off over their useful economic lives in accordance with SFAS 86. The remaining cost associated with the non-current assets will be written off over six years. Amortization expense for the years ended January 31, 2002, 2003 and 2004, was
US$8,361,000, US$7,292,000 and US$1,641,000 respectively.



Goodwill



Goodwill represents the excess
of the purchase price over the fair value of the net assets acquired in various business acquisitions as described in Note 19. Amortization expense was US$27,806,000 for the year ended January 31, 2002. Beginning February 1, 2002, in accordance with
the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, the Company no longer amortizes goodwill but tests it at least annually for impairment. On adoption, the Company
reclassified the net carrying amount of assembled workforce of US$1.5 million from other non-current assets to goodwill. There was no impairment of goodwill upon adoption of SFAS No. 142.



Impairment of Non-current Assets and Goodwill



The Company periodically assesses the impairment of long-lived assets, including identifiable intangibles and related
goodwill, in accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 142 superseded SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of and the accounting and reporting provisions of Accounting Principles Board Opinion No. 17, (APB 17), Intangible Assets. An impairment review is performed on an annual basis or whenever events or changes in circumstances indicate
that the carrying value may not be recoverable.



Factors the
Company considers important which could trigger an impairment review include, but are not limited to, significant under performance relative to historical or expected operating results, significant changes in the manner of use of the acquired assets
or the strategy for the Companys overall business, significant negative industry or economic trends, a significant decline in the Companys stock price for a sustained period, and the Companys market capitalization relative to net
book value. When the Company determines that the carrying value of goodwill may not be recoverable, the Company measures any impairment using a projected discounted cash flow model with a discount rate commensurate with the risk inherent in the
Companys current business model.



The Company recognized
other non-current asset impairments, principally a non compete covenant and purchased technology, of US$1,562,000 and US$3,686,000 and goodwill impairments of US$36,540,000 and US$12,849,000 for the years ended January 31, 2002 and 2003
respectively.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Property and Equipment



Property and equipment is stated at cost. Depreciation and amortization are computed using the straight-line method over
estimated useful lives of the assets as follows:



|                                                                     |  |        
|-------------------------------------------------------------------- |  | -------
|Motor vehicles, computer and office equipment, fixtures and fittings |  | 3 years



During January 2003,
the Company recorded a charge in connection with the write down of fixed assets of approximately US$1.4 million relating to fixed assets no longer in use.



Net Income (Loss) per Ordinary Share



Basic loss per share is calculated using net loss divided by the weighted average number of ordinary shares outstanding for the period. Diluted loss per
share is calculated using net loss divided by the weighted average number of ordinary shares outstanding for the period, plus dilutive potential ordinary shares outstanding during the period. Potential ordinary shares have been excluded from the
calculations of the diluted net loss per share for fiscal 2002, 2003 and 2004, because all such shares were anti-dilutive.



Basic and diluted loss per share is calculated in accordance with statement of Financial Accounting Standards No. 128 Earnings per Share
(SFAS 128).



Concentration of Credit Risk



The Company sells its products primarily to banks and
financial transaction processors throughout the world. While a small number of customers have historically accounted for a significant portion of the Companys revenue, management believes that these customers are credit worthy and,
accordingly, minimal credit risk exists with respect to these customers. The Company performs ongoing credit evaluations on its customers and maintains reserves for potential credit losses. Generally such losses have been within managements
expectations. In the third quarter of fiscal 2002, the Company recorded a US$1.25 million restructuring charge related to the restructuring of the UK business. The charge was primarily a write down of receivables. The Company had an allowance for
doubtful accounts of approximately US$1,884,000 and US$1,595,000 at January 31, 2003 and 2004 respectively. The Company generally requires no collateral from its customers.



The Company invests its excess cash in low-risk, short-term deposit accounts with high credit-quality banks in the United
States, Germany and Ireland. At January 31, 2004, US$38,075,000 was invested in cash and cash equivalent accounts. The Company performs periodic evaluations of the relative credit standing of all of the financial institutions dealt with by the
Company, and considers the credit risk to be minimal.



Employment Grants



Employment grants
are credited to the income statement when earned and offset against the related payroll expense in two equal installments, the first on the creation of the job, and the second six months following the creation of the job.



Marketing Grants and related loans



Marketing grants and related loans received are accounted for in accordance
with the terms of the agreement for the specific grant/loan. This is either as a 50% offset against the relevant expenditure on developing an overseas market and a 50% loan to be repaid at rates linked to future revenues earned in the related
markets, or as



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



a 100% loan to be repaid at rates linked to future revenues earned in the related markets. All loan amounts are credited to a balance sheet liability account
as the Company believes they will have to be repaid in the future. The Company repaid approximately US$399,000 in relation to these loans in the year ended January 31, 2004.



Accounting for Income Taxes



The Company uses the liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities
are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws which will be in effect when the differences are expected to reverse.



Stock Compensation



The Company has elected to follow Accounting Principles Board Opinion No. 25
Accounting for Stock Issued to Employees (APB 25) and related interpretations in accounting for its employee stock options. Accordingly, compensation cost for stock options is measured as the excess, if any, of the fair market value of
the Companys shares at the date of the grant over the amount an employee must pay to acquire the shares. This cost is deferred and charged to expense ratably over the vesting period (generally four years).



Where shares are issued at less than fair market value, the excess of the
fair market value over the amount the employee must pay to acquire the shares is charged to expense as stock compensation and credited to additional paid-in capital.



In September 1999, in connection with the appointment of the Chief Operating Officer, the Company issued 20,000 options at
less than the fair market value at the date of grant. The options vested equally in January 2001 and January 2002. For the year ended January 31, 2002, the Company recognized compensation expense of US$100,000.



The Company has followed the provisions of FASB Statement Number 123,
Accounting for Stock-Based Compensation (SFAS 123) and EITF 96-18 Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, in
accounting for warrants and options issued to non-employees. The Company has adopted the fair value method as prescribed by SFAS 123 in determining the fair value of the warrants and options issued and the resultant compensation expense. The Company
has recognized compensation expense of US$665,000 during the year ended January 31, 2002, in respect of options issued to non-employees. In May 2000, the Company revised these option grants to be immediately exercisable so that in future periods the
non-cash compensation charge was fixed on a quarterly basis.



In November 2000, in connection with the acquisition of Exceptis, the Company exchanged unvested options in that entity for Trintech options. The Company recorded US$75,000 and US$20,000 in stock compensation related to these options in the
years ended January 31, 2002 and 2003 respectively.



In
December 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 148, Accounting for Stock-Based CompensationTransition and Disclosure (SFAS 148). This statement amends SFAS Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure
requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



and of the effect of the method used on reported results. The provisions of SFAS 148 are effective for fiscal years ending after December 15, 2002 and
interim periods beginning after December 15, 2002. As of January 31, 2004, the Company has elected not to change to the fair value based method of accounting for stock-based employee compensation.



Pro forma information regarding net income is required by FASB Statement
Number 123, Accounting for Stock-Based Compensation, (SFAS 123), and has been determined as if the Company had accounted for its stock options under the fair value method of SFAS 123. The fair value for these options was
estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for fiscal 2002, 2003 and 2004: risk free interest rate of 4%, 3% and 2% respectively; dividend yields of 0%; volatility
factors of the expected market price of the Companys ordinary shares of 1.0 in fiscal 2002, 1.1 for fiscal 2003 and fiscal 2004, and a weighted-average expected life of the options of four years.



For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options vesting period. The Companys pro forma information is as follows:



|                                                                                                |  |                             |          |   |      |   |         |      |  |   |        |  
|----------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                                                                |  | Year ended January 31,      |         
|                                                                                                |  | 2002                        |          |   | 2003 |   |         | 2004 | 
|                                                                                                |  | (U.S. dollars in thousands) |         
|Net income (loss), as reported                                                                  |  | $                           | (100,039 | ) |      | $ | (44,819 | )    |  | $ | (3,160 | )
|                                                                                                |  |                            
|Add: Stock-based employee compensation                                                          |  |                             |          |   |      |   |         |      | 
|expense included in reported net income (loss), net of related tax effects                      |  |                             | 175      |   |      |   | 20      |      |  |   |       |  
|                                                                                                |  |                            
|Deduct: Total stock-based employee compensation                                                 |  |                             |          |   |      |   |         |      | 
|expense determined under fair value based method for all awards, net of related tax effects (1) |  |                             | (5,390   | ) |      |   | (5,171  | )    |  |   | (3,797 | )
|                                                                                                |  |                             |          |   |      |   |         |      |  |   |        |  
|Pro forma net income (loss)                                                                     |  | $                           | (105,254 | ) |      | $ | (49,970 | )    |  | $ | (6,957 | )
|                                                                                                |  |                             |          |   |      |   |         |      |  |   |        |  
|Earnings (loss) per share:                                                                      |  |                             |          |   |      |   |         |      | 
|Basicas reported                                                                               |  | $                           | (3.30    | ) |      | $ | (1.47   | )    |  | $ | (0.10  | )
|Basicpro forma                                                                                 |  | $                           | (3.47    | ) |      | $ | (1.64   | )    |  | $ | (0.23  | )
|Dilutedas reported                                                                             |  | $                           | (3.30    | ) |      | $ | (1.47   | )    |  | $ | (0.10  | )
|Dilutedpro forma                                                                               |  | $                           | (3.47    | ) |      | $ | (1.64   | )    |  | $ | (0.23  | )

---

|(1) | The Company previously reported pro forma net loss of US$(104,777,000) and US$(49,665,000) and pro forma net loss per ordinary share of US$(3.45) and US$(1.63) for the fiscal years
ended January 31, 2002 and 2003, respectively. Due to an error in the internal system that computes the FAS 123 financial impact of the Companys stock option plans the Companys FAS 123 pro forma footnote disclosure had erroneously
omitted the pro forma expense related to certain options granted. To correct this error, the Company is amending its financial statements for the fiscal years January 31, 2002 and 2003 in order to reflect an adjustment to the FAS 123 pro forma
footnote disclosure. This resulted in an increase in the pro forma stock-based compensation expense from that previously reported. As the Company has previously elected to account for its stock-based compensation expense under APB 25, this
adjustment does not have any effect on the Companys Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Advertising and Promotion Expense



All costs associated with advertising are expensed as incurred. Advertising and promotion expense was US$1,539,000, US$625,000 and US$481,000 for the
years ended January 31, 2002, 2003 and 2004, respectively.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Inventories



Inventories are stated at the lower of cost or market value. During the year ended January 31, 2003, the Company recorded
exceptional provisions for the loss in net realizable value for excess inventory of US$3.0 million, a consequence of the weaker than expected demand from the German retail sector.



Warranty Reserves



The Company maintains reserves for future warranty claims arising from past sales of product. The Company makes provision for such costs when revenue is
recorded from product sales. Each quarter the Company reevaluates its estimates to assess the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. The following table summarizes the Companys warranty activity for
the years ended January 31, 2002, 2003 and 2004.



|                                                |  |                             |      |   |      |   |      |      |  |   |      |  
|----------------------------------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                |  | Year ended January 31       |     
|                                                |  | 2002                        |      |   | 2003 |   |      | 2004 | 
|                                                |  | (U.S. dollars in thousands) |     
|Opening reserve balance                         |  | $                           | 521  |   |      | $ | 397  |      |  | $ | 625  |  
|Deductions                                      |  |                             | (130 | ) |      |   | (397 | )    |  |   | (516 | )
|Provision for new product warranties issued     |  |                             | 83   |   |      |   | 102  |      |  |   | 155  |  
|Adjustment of pre-existing warranties provision |  |                             | (43  | ) |      |   | 463  |      |  |   | 30   |  
|Exchange differences                            |  |                             | (34  | ) |      |   | 60   |      |  |   | 62   |  
|                                                |  |                             |      |   |      |   |      |      |  |   |      |  
|Closing reserve balance                         |  | $                           | 397  |   |      | $ | 625  |      |  | $ | 356  |  
|                                                |  |                             |      |   |      |   |      |      |  |   |      |  



Recent
Accounting Pronouncements



In June 2002, the FASB
issued SFAS No. 146, Accounting for Exit or Disposal Activities. This statement addresses the recognition, measurement and reporting of costs associated with exit and disposal activities. SFAS No. 146 is applicable to restructuring
activities and costs related to terminating a contract that is not a capital lease and to one time benefit arrangements received by employees who are involuntarily terminated. SFAS No. 146 supercedes EITF Issue No. 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). Under SFAS No. 146 the cost associated with an exit or disposal activity is recognized in the periods in
which it is incurred rather than at the date the Company committed to the exit plan. This statement is effective for exit or disposal activities initiated after December 31, 2002, with earlier adoption encouraged. Previously issued financial
statements will not be restated. The provisions of EITF Issue No. 94-3 will continue to apply for exit plans initiated prior to the adoption of SFAS No. 146. The timing of recognition of costs of restructuring plans initiated and implemented by the
Company in fiscal 2004 has been in accordance with SFAS 146.



In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, (FIN
45). FIN 45 requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken by it in issuing the guarantee. It also expands the disclosure requirements in the financial statements
of the guarantor with respect to its obligations under certain guarantees that it has issued. The Company is required to adopt the initial recognition and initial measurement accounting provisions of this interpretation on a prospective basis to
guarantees issued or modified after December 31, 2002. The Company does not anticipate that the adoption will have a material effect on the Companys financial position, results of operations or cash flows. Application of FIN 45 had no material
impact on the consolidated financial statements of the Company as it had no guarantees in fiscal 2004 or fiscal 2003.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



In December 2002, the Financial Accounting Standards Board (FASB) issued SFAS No. 148,
Accounting for Stock-Based CompensationTransition and Disclosure (SFAS 148). This statement amends SFAS Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS 148 amends the disclosure requirements of FAS 123 to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and of the effect of the method used on reported results. The provisions of SFAS 148 are effective in fiscal years ending after December 15, 2002 and interim periods beginning
after December 15, 2002. As of January 31, 2004, the Company has elected not to change to the fair value based method of accounting for stock-based employee compensation.



In January 2003, the FASB released FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest
Entities. FIN 46 requires that all primary beneficiaries of variable interest entities consolidate that entity. FIN 46 is effective immediately for variable interest entities created after January 31, 2003 and to variable interest entities in
which an enterprise obtains an interest after that date. It applies in the first fiscal year or interim period beginning after June 15, 2003 to variable interest entities in which an enterprise holds a variable interest it acquired before February
1, 2003. In December 2003, the FASB published a revision to FIN 46 (FIN 46R) to clarify some of the provisions of the interpretation and to defer the effective date of implementation for certain entities. Under the guidance of FIN
46R, entities that do not have interests in structures that are commonly referred to as special purpose entities are required to apply the provisions of the interpretation in financial statements for periods ending after March 14, 2004. The Company
did not create a variable interest entity after January 31, 2003 and did not have a variable interest entity as of January 31, 2004. The adoption of this Statement did not have a material effect on the Companys consolidated financial
statements for the year ended January 31, 2004.



The Financial
Accounting Standards Board issued Statement No. 149,  Amendment of Statement 133 on Derivative Instruments and Hedging Activities, (SFAS 149) in April 2003. SFAS 149 amends and clarifies financial accounting and reporting for
derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities. This statement requires contracts with comparable characteristics be accounted for similarly. In particular, this Statement (a) clarifies under what circumstances a contract with an initial net investment meets the characteristic
of a derivative as discussed in SFAS No. 133, (b) clarifies when a derivative contains a financing component and (c) amends the definition of an underlying to conform it to language used in FASB Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This Statement is effective for contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. Application of the new rules is not expected to have any material impact on the consolidated financial statements of the Company.



The Financial Accounting Standards Board issued SFAS No. 150, Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity, (SFAS 150) in May 2003. SFAS 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Statement 150 is effective for financial instruments
entered into or modified after May 31, 2003. Application of SFAS 150 had no material impact on the consolidated financial statements of the Company as it had no financial instruments in fiscal 2004.



In May 2003, the consensus on EITF Issue No. 01-08, Determining Whether
an Arrangement Contains a Lease, was issued. The guidance in the consensus applies to the purchase or sale of goods and services under



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



various types of contracts, including outsourcing arrangements. Based on the criteria in the consensus, both parties to an arrangement are required to
determine whether the arrangement includes a lease within the scope of SFAS No. 13, Accounting for Leases. The new requirement applies prospectively to new or modified arrangements for reporting periods beginning after May 28, 2003. The
Company did not enter into or modify any arrangements covered by EITF 01-08 during fiscal year 2004 and, as such, the adoption of EITF No. 01-08 did not have an effect on the Companys consolidated financial statements.



In August 2003, the Emerging Issues Task Force reached consensus on EITF
Issue No. 03-5 (EITF 03-5), Applicability of AICPA Statement of Position 97-2, Software Revenue Recognition , to Non-Software Deliverables in an Arrangement Containing More-than-Incidental Software. EITF 03-5,
which became effective for the Company on October 1, 2003, provides guidance on determining whether non-software deliverables are included within the scope of SOP 97-2 and, accordingly, whether multiple element arrangements are to be accounted for
in accordance with EITF Issue No. 00-21 or SOP 97-2. The provisions of EITF 03-5 did not have an effect on the Companys consolidated financial statements.



In December 2003, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 104, Revenue Recognition, which amends SAB
101, Revenue Recognition in Financial Statements. SAB 104s primary purpose is to rescind accounting guidance contained in SAB 101 related to multiple-element revenue arrangements, superseded as a result of the issuance of EITF
00-21, Accounting for Revenue Arrangements with Multiple Deliverables. Additionally SAB 104 rescinds the SECs Revenue Recognition in Financial Statements Frequently Asked Questions and Answers, or FAQ, issued with SAB 101 that had
been codified in SEC Topic 13, Revenue Recognition. Selected portions of the FAQ have been incorporated into SAB 104. While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of
SAB 101 remain largely unchanged by the issuance of SAB 104. Adoption of this standard had no material impact on the Companys financial statements.



2. Marketable Securities



Marketable securities are considered to be trading securities per SFAS 115 and are carried on the balance sheet at their market value. The change in
unrealized gains (losses) included in net income (loss) is as follows:



|                                       |  |                             |      |   |      |   |     |      |  |   |  
|-------------------------------------- |  | --------------------------- | ---- | - | ---- | - | --- | ---- |  | - | -
|                                       |  | Year ended January 31,     
|                                       |  | 2002                        |      |   | 2003 |   |     | 2004
|                                       |  | (U.S. dollars in thousands)
|Unrealized gain at beginning of year   |  | $                           | 265  |   |      | $ | 61  |      |  | $ | 
|Included in income (loss) for the year |  |                             | (204 | ) |      |   | (61 | )    |  |   | 
|                                       |  |                             |      |   |      |   |     |      |  |   |  
|Unrealized gain at end of year         |  | $                           | 61   |   |      | $ |    |      |  | $ | 
|                                       |  |                             |      |   |      |   |     |      |  |   |  



3. Revolving Credit Facility: Bank
Overdraft Facility and Overdrafts



The Company has an
unsecured overdraft facility of 2.5 million (approximately US$3.1 million) from Bank of Ireland. Advances under this facility bear interest at the Banks prime overdraft rate, 2.65% as at January 31, 2004. As of January 31, 2004
there was US$0 outstanding under the facility. The facility does not have a stated expiration date, but all amounts drawn thereunder are repayable on demand.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



4. Inventories



|               |  |                             |       |      |   |    
|-------------- |  | --------------------------- | ----- | ---- | - | ---
|               |  | Year ended January 31,     
|               |  | 2003                        |       | 2004
|               |  | (U.S. dollars in thousands)
|Raw materials  |  | $                           | 172   |      | $ | 95 
|Finished goods |  |                             | 2,905 |      |   | 729
|               |  |                             |       |      |   |    
|Total          |  | $                           | 3,077 |      | $ | 824
|               |  |                             |       |      |   |    



During the year ended
January 31, 2003, the Company recorded exceptional provisions for loss in net realizable value for excess inventory of US$3.0 million, a consequence of the weaker than expected demand from the German retail sector.



5. Foreign Exchange Contracts and Fair Value of Financial Instruments



The Company uses forward exchange contracts to hedge certain operational
cash flow exposures resulting from changes in foreign currency exchange rates to occur within the next twelve months. The Company enters into these foreign exchange contracts to hedge anticipated sales or purchase transactions in the normal course
of business for which we have a firm commitment from a customer or to a supplier. The terms of these contracts are consistent with the timing of the transactions being hedged. The Company does not use such instruments for trading or speculative
purposes. At January 31, 2002, 2003 and 2004 the Company had no Foreign Exchange contracts.



Furthermore, the Company manages the currency exposure of certain receivables and payables using derivative instruments, such as currency options. The gains or losses on these instruments provide an offset to the
gains or losses recorded on the foreign currency receivables and payables. The derivative instruments are recorded at fair value and changes in fair value are recorded in earnings under exchange (loss) gain on the Statement of Operations.



As of January 31, 2004 the Company had four currency options
maturing in February 2004, March 2004, May 2004 and June 2004, each option to sell US$500,000 and receive Euro. The currency options combine the buying of four vanilla options with the selling of four reverse knock-in options. If the EUR to USD spot
exchange rate is trading between 1.2565 and 1.29 on the expiry date of each individual option, the option will be executed at the existing spot exchange rate. If the EUR to USD spot exchange rate is trading either below 1.2565 or equal to or above
1.29, the option will be executed at an EUR to USD exchange rate of 1.29. The fair value of the options as of January 31, 2004 was US$80,000 negative.



|                          |  |                             |        |            |   |                 |  |   |            |   |  |   |        |  
|------------------------- |  | --------------------------- | ------ | ---------- | - | --------------- |  | - | ---------- | - |  | - | ------ | -
|                          |  | Year ended January 31,      |       
|                          |  | 2003                        |        | 2004       |  
|                          |  | Carrying Amount             |        | Fair Value |   | Carrying Amount |  |   | Fair Value |  
|                          |  | (U.S. dollars in thousands) |       
|Non Derivatives           |  |                             |        |            |   |                 |  |   |            |   |  |   |        |  
|Cash and cash equivalents |  | $                           | 42,559 |            | $ | 42,559          |  | $ | 36,864     |   |  | $ | 36,864 |  
|Restricted cash           |  | $                           | 3,132  |            | $ | 3,132           |  | $ | 1,211      |   |  | $ | 1,211  |  
|                          |  |                             |        |           
|Derivatives               |  |                             |        |            |   |                 |  |   |            |   |  |   |        |  
|Foreign currency options. |  | $                           |       |            | $ |                |  | $ | (80        | ) |  | $ | (80    | )



The carrying amounts
in the table are included in the statements of financial position under the indicated captions.



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



6. Operating Lease Commitments



The Companys significant operating leases are for the premises in Dublin, Ireland; Frankfurt, Germany; San Mateo,
California; Dallas, Texas; and London, United Kingdom. In Dublin, the Company leases its corporate headquarters from Cyril McGuire, an officer and director of the Company, and John McGuire, a significant shareholder. These facilities are held under
two leases expiring in 2023 and 2025, with rent reviews every five years and options to exit in fiscal 2007 and fiscal 2009, respectively. The rent paid by the company was determined after completion of a survey of the rental market, and the terms
of the lease are no less favorable than those that could be obtained in arms-length transactions. The Frankfurt facility lease expires in 2004. The San Mateo facility is under a 5 year lease which expires in 2004. The Dallas facilities are held
under two leases expiring in 2005 and 2006. The London facility is under a five year lease which expires in 2005. Rent expense, which does not include the expense for facilities that the Company does not occupy, was approximately US$2,796,000,
US$2,206,000 and US$2,069,000 for the years ended January 31, 2002, 2003, and 2004, respectively. For the year ended January 31, 2004, lease abandonment costs totaled US$795,000.



In December 2002, the Company agreed a lease termination settlement of approximately US$2.1 million relating to the
Companys Austin facility, which was under a ten year lease due to expire in 2010. Deferred lease termination payments of US$1.5 million, relating to this termination were included in Other Accrued Liabilities as of January 31, 2003 and were
paid during fiscal 2004. As a result of the termination, the Company reduced Other Accrued Liabilities and the total consideration relating to the Companys Globeset acquisition, by approximately US$1.0 million. Prior to the termination, future
minimum lease payments relating to the Companys Austin facility, net of sublease income, totaled approximately US$8.6 million. Under the terms of the lease agreement, the Company was required to provide security deposits in the form of a
letter of credit of approximately US$2.5 million. In connection with the letter of credit, US$2.5 million and US$600,000 are classified as restricted cash on the Consolidated Balance Sheets as of January 31, 2003 and 2004, respectively. The letter
of credit was terminated during March 2004.



Under the terms of
the lease agreement for the San Mateo premises, the Company is required to provide a security deposit in the form of a letter of credit for US$161,000, through the term of the respective leases. The amount of the letters of credit issued is
guaranteed with certificates of deposit, maintained with the issuing bank as security, and is classified as restricted cash on the Consolidated Balance Sheets.



Operating lease payments in the table below represent future minimum payments for all properties currently leased by the Company, including abandoned
properties. Future minimum payments for abandoned properties total US$4.3 million at January 31, 2004. The Company has provisions for abandonments of approximately US$982,000 in relation to these leases. The estimated costs of abandoning these
leased facilities, including estimated costs to sublease, were based on market information trend analyses.



|                                         |  |                            |        |                      |   |      
|---------------------------------------- |  | -------------------------- | ------ | -------------------- | - | -----
|                                         |  | FutureMinimumLeasePayments |        | FutureSubleaseIncome
|                                         |  | (U.S. dollars inthousands)
|Year ending January 31,                  |  |                            |        |                      |   |      
|2005                                     |  | $                          | 3,277  |                      | $ | 676  
|2006                                     |  |                            | 2,829  |                      |   | 564  
|2007                                     |  |                            | 2,435  |                      |   | 553  
|2008                                     |  |                            | 1,524  |                      |   | 553  
|2009                                     |  |                            | 1,441  |                      |   | 967  
|Thereafter                               |  |                            | 3,306  |                      |   | 69   
|                                         |  |                            |        |                      |   |      
|Total minimum lease payments outstanding |  | $                          | 14,812 |                      | $ | 3,382
|                                         |  |                            |        |                      |   |      



F-19



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Provisions for abandonments relating to future minimum lease payments of US$541,000 are included in
other accrued liabilities at January 31, 2004. Provisions for abandonments relating to future minimum lease payments of US$369,000 and US$72,000 are included in provision for lease abandonments for the years ending January 31, 2005 and 2006
respectively.



7. Capital Leases



The following is an analysis of the property acquired under capital leases,
and included in property and equipment, by major classes:



|                               |  |                               |        |   |      |   |        |  
|------------------------------ |  | ----------------------------- | ------ | - | ---- | - | ------ | -
|                               |  | Asset balances at January 31, |       
|                               |  | 2003                          |        |   | 2004 |  
|                               |  | (U.S. dollars in thousands)   |       
|Computers and office equipment |  | $                             | 1,862  |   |      | $ | 2,170  |  
|Motor vehicles                 |  |                               | 149    |   |      |   | 70     |  
|                               |  |                               |        |   |      |   |        |  
|Total cost                     |  |                               | 2,011  |   |      |   | 2,240  |  
|Accumulated depreciation       |  |                               | (1,399 | ) |      |   | (2,027 | )
|                               |  |                               |        |   |      |   |        |  
|Total, net                     |  | $                             | 612    |   |      | $ | 213    |  
|                               |  |                               |        |   |      |   |        |  



The following is a
schedule by year of future minimum lease payments under capital leases, together with the present value of the net minimum lease payments as of January 31, 2004 (US dollars in thousands):



|                                            |  |   |     |  
|------------------------------------------- |  | - | --- | -
|Year ending January 31,                     |  |   |     |  
|2005                                        |  | $ | 395 |  
|2006                                        |  |   | 85  |  
|                                            |  |   |     |  
|Total minimum lease payments                |  |   | 480 |  
|Less: Amount representing interest          |  |   | (18 | )
|                                            |  |   |     |  
|Present value of net minimum lease payments |  | $ | 462 |  
|                                            |  |   |     |  



The current portion
and non-current portion of present value of net minimum lease payments as of January 31, 2004 was US$378,000 and US$84,000, respectively.



8. Property and Equipment



Property and equipment consist of the following:



|                               |  |                             |        |   |      |   |         |  
|------------------------------ |  | --------------------------- | ------ | - | ---- | - | ------- | -
|                               |  | Year ended January 31,      |       
|                               |  | 2003                        |        |   | 2004 |  
|                               |  | (U.S. dollars in thousands) |       
|Computers and office equipment |  | $                           | 7,308  |   |      | $ | 8,351   |  
|Motor vehicles                 |  |                             | 194    |   |      |   | 70      |  
|Fixtures and fittings          |  |                             | 2,839  |   |      |   | 2,855   |  
|                               |  |                             |        |   |      |   |         |  
|Total cost                     |  |                             | 10,341 |   |      |   | 11,276  |  
|Accumulated depreciation       |  |                             | (8,667 | ) |      |   | (10,288 | )
|                               |  |                             |        |   |      |   |         |  
|Property and equipment, net    |  | $                           | 1,674  |   |      | $ | 988     |  
|                               |  |                             |        |   |      |   |         |  



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



During January 2003, the company recorded a charge in connection with the write down of fixed assets
of approximately US$1.4 million relating to fixed assets no longer in use.



9. Other Non-Current Assets



Other non-current
asset amortization for the years ended January 31, 2002, 2003 and 2004 was US$8,361,000, US$7,292,000 and US$1,641,000 respectively. Other noncurrent asset amortization is estimated to be approximately US$847,000 in the years ending January
31, 2005 and 2006, US$831,000 in the year ending January 31, 2007, US$784,000 in the year ending January 31, 2008, US$392,000 in the year ending January 31, 2009 and US$293,000 in the year ending January 31, 2010.



|                              |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|----------------------------- |  | --------------------------- | ------ | --------------------------- | - | ----------------------- |  | --- | ------ | ------------------- | - | -------------- |  | ----------------------- | ------ | --- | - | ----- |  | - | ------ |  | - | -----
|                              |  | As of January 31, 2003      |        |                             |   | As of January 31, 2004  |  |    
|                              |  | GrossCarryingAmount         |        | ImpairmentLoss              |   | AccumulatedAmortization |  | Net |        | GrossCarryingAmount |   | ImpairmentLoss |  | AccumulatedAmortization |        | Net
|                              |  | (U.S. dollars in thousands) |        | (U.S. dollars in thousands) |   |                        
|Other non-current             |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|Assets-amortizable:           |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|Purchased technology          |  | $                           | 14,856 |                             | $ | 3,392                   |  | $   | 10,328 |                     | $ | 1,136          |  | $                       | 14,926 |     | $ | 3,392 |  | $ | 11,470 |  | $ | 64   
|Trade names                   |  |                             |       |                             |   |                        |  |     |       |                     |   |               |  |                         | 120    |     |   |      |  |   | 10     |  |   | 110  
|Customer base                 |  |                             | 7,385  |                             |   | 567                     |  |     | 4,859  |                     |   | 1,959          |  |                         | 9,735  |     |   | 567   |  |   | 5,348  |  |   | 3,820
|Covenants                     |  |                             | 2,492  |                             |   | 1,232                   |  |     | 1,260  |                     |   |               |  |                         | 2,492  |     |   | 1,232 |  |   | 1,260  |  |   |     
|Total identifiable Intangible |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|                              |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|Assets                        |  | $                           | 24,733 |                             | $ | 5,191                   |  | $   | 16,447 |                     | $ | 3,095          |  | $                       | 27,273 |     | $ | 5,191 |  | $ | 18,088 |  | $ | 3,994
|                              |  |                             |        |                             |   |                         |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      



During the fourth
quarter of fiscal 2002, the Company performed an impairment assessment of identifiable intangible assets (included in non-current assets), principally a non compete covenant and purchased technology, and goodwill recorded in connection with its
various acquisitions. The assessment was performed primarily due to the significant decline in the Companys stock price, the net book value of assets significantly exceeding the Companys market capitalization, the significant under
performance of the acquisitions relative to projections and the overall decline in industry growth rates which indicated that this trend might continue for an indefinite period. As a result, the Company recorded a US$1.6 million impairment charge in
the quarter ended January 31, 2002 to reduce other intangible assets associated with the acquisitions to their estimated fair value. The estimate of fair value was based upon the discounted estimated cash flows from the sale of the products acquired
for the succeeding three years. The assumptions supporting the estimated cash flows, including the discount rate, reflected managements best estimates. Of the total write down, US$1.6 million was applied to reduce non-current assets (a
non-compete covenant, purchased technology and assembled workforce) to US$15.5 million.



During the fourth quarter of fiscal 2003, the Company completed its annual impairment test and assessments of the carrying value of identifiable intangible assets and goodwill as required by SFAS 142. The assessment
was performed primarily due to the further significant decline in the Companys stock price, the net book value of assets significantly exceeding the Companys market capitalization and the overall decline in industry growth rates which
indicated that this trend might continue for an indefinite period.



Other non-current assets were tested for impairment, by comparing the carrying amount of the intangible assets to their estimated fair value. The Company determined the estimated fair value of the assets based upon an independent appraisal,
which applied the income approach valuation method, using the discounted estimated cash flows from the assets. The assumptions supporting the estimated cash flows, including the discount rate, reflect managements best estimates. As a result,
the Company recorded a US$3.7 million impairment charge in the



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



quarter ended January 31, 2003 to reduce other non-current intangible assets to their estimated fair value. Other remaining intangible assets (purchased
technology and acquired customer base), which the Company concluded were not impaired, were valued at US$3.1 million at January 31, 2003. The remaining identifiable intangible assets will be amortized using the straight-line method over their
remaining estimated useful economic lives.



During the year
ended January 31, 2004, the Company allocated approximately US$2.5 million of purchase price to other non-current assets (acquired customer base of US$2,350,000, purchased technology of US$70,000 and trade names of US$120,000) in connection with the
acquisition of CW & Associates, Inc.



During the fourth
quarter of fiscal 2004, the Company completed its annual impairment test and assessments of the carrying value of identifiable intangible assets and goodwill as required by SFAS 142 and determined its recorded non-current assets were not impaired as
of January 31, 2004.



10. Other Accrued Liabilities



Other accrued liabilities consist of the following:



|                                    |  |                             |        |      |   |      
|----------------------------------- |  | --------------------------- | ------ | ---- | - | -----
|                                    |  | Year ended January 31,     
|                                    |  | 2003                        |        | 2004
|                                    |  | (U.S. dollars in thousands)
|Provision for lease abandonment     |  | $                           | 777    |      | $ | 541  
|Deferred lease termination payments |  |                             | 1,500  |      |   |     
|Deferred consideration              |  |                             | 2,569  |      |   | 1,400
|Other                               |  |                             | 5,756  |      |   | 3,758
|                                    |  |                             |        |      |   |      
|Total                               |  | $                           | 10,602 |      | $ | 5,699
|                                    |  |                             |        |      |   |      



11. Shareholders Equity



The Companys authorized share capital comprises
100,000,000 Ordinary Shares of US$0.0027 par value per share and 10,000,000 Series B Preference Shares of US$0.0027 par value per share, which may be issued with such special, qualified, preferred, deferred or other rights or privileges or
conditions as to capital, dividends, rights of voting or other matters as the Directors may decide.



In July 2001, 2002 and 2003, the Companys shareholders approved an agreement which gave the Board the authority to engage in the repurchase of the
Companys outstanding Ordinary Shares. Under the program, up to US$5.0 million of the Companys Ordinary Shares could be acquired on the open market, or in negotiated or block trades. As of January 31, 2004, the Company had repurchased
617,956 shares at a cost of approximately US$652,000. As of January 31, 2004 approximately US$4.35 million remained available for future repurchases under this program.



Dividends may only be declared and paid out of profits available for distribution determined in accordance with accounting
principles generally accepted in Ireland and applicable Irish company law. There were no dividends declared or payable by the Company in any of the years presented. At January 31, 2002, 2003 and 2004 the Company did not have any profits available
for distribution.



During 1999, in connection with a strategic
alliance with MasterCard, the Company issued options to purchase 50,000 shares of the Companys Ordinary Shares at prices ranging from US$11.55 to US$12.50. The



F-22



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



options originally vested eighteen months from the date of grant and expire two years from the date of issuance. In May 2000, the Company revised these
option grants to be immediately exercisable so that in future periods the non-cash compensation charge was fixed on a quarterly basis. The options expired unexercised during the year ended January 31, 2002. The Company recorded US$242,000 in stock
compensation related to these options in the year ended January 31, 2002.



Also in 1999, in connection with the formation of the Companys Advisory Board, the Company issued options to purchase 60,000 shares of the Companys Ordinary Shares at an exercise price of US$11.36 to each
of the three Advisory Board Members. The options originally vested ratably over four years and were originally due to expire after seven years from the date of grant. In May 2000, the Company revised these option grants to be immediately exercisable
so that in future periods the non-cash compensation charge was fixed on a quarterly basis. The options were canceled unexercised during the year ended January 31, 2004. The Company recorded US$423,000 in stock compensation related to these options
in the year ended January 31, 2002.



On March 21, 2000, the
Company effected a two-for-one ADS split. Following the split, each ordinary share equaled two equivalent ADSs.



In November 2000, in connection with the acquisition of Exceptis, the Company exchanged unvested options in that entity for Trintech options, the Company
recorded US$75,000, US$20,000 and US$nil in stock compensation related to these options in the years ended January 31, 2002, 2003 and 2004, respectively.



On May 24, 2002 the Company effected a one-for-four reverse split of its issued and outstanding ADSs, so that now two ordinary shares are equivalent to
one ADS. Basic and diluted net (loss) per equivalent ADS is therefore calculated using 50% of the weighted average number of ordinary shares outstanding during the period. All amounts shown per equivalent ADS have been retroactively adjusted to give
effect to the reverse split.



12. Net Income (Loss) Per Ordinary Share



|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|---------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                                                                       |  | Year ended January 31,                             |           
|                                                                                                                       |  | 2002                                               |            |   | 2003 |   |            | 2004 | 
|                                                                                                                       |  | (U.S. dollars in thousands, except per share data) |           
|Numerator:                                                                                                             |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Numerator for basic and diluted net Income (loss) per ordinary share Income (loss) available to ordinary shareholders |  | $                                                  | (100,039   | ) |      | $ | (44,819    | )    |  | $ | (3,160     | )
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Denominator:                                                                                                           |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Denominator for basic earnings per Shareweighted average Ordinary Shares                                              |  |                                                    | 30,341,559 |   |      |   | 30,559,410 |      |  |   | 30,314,419 |  
|Effect of employee stock options                                                                                       |  |                                                    |           |   |      |   |           |      |  |   |           |  
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Denominator for diluted net income (loss) per Ordinary Share                                                           |  |                                                    | 30,341,559 |   |      |   | 30,559,410 |      |  |   | 30,314,419 |  
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per Ordinary Share                                                                             |  | $                                                  | (3.30      | ) |      | $ | (1.47      | )    |  | $ | (0.10      | )
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per Ordinary Share                                                                           |  | $                                                  | (3.30      | ) |      | $ | (1.47      | )    |  | $ | (0.10      | )
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|ADS used in computing basic net income (loss) per equivalent ADS                                                       |  |                                                    | 15,170,780 |   |      |   | 15,279,705 |      |  |   | 15,157,210 |  
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|ADS used in computing diluted net income (loss) per equivalent ADS                                                     |  |                                                    | 15,170,780 |   |      |   | 15,279,705 |      |  |   | 15,157,210 |  
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per ADS                                                                                        |  | $                                                  | (6.59      | ) |      | $ | (2.93      | )    |  | $ | (0.21      | )
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per ADS                                                                                      |  | $                                                  | (6.59      | ) |      | $ | (2.93      | )    |  | $ | (0.21      | )
|                                                                                                                       |  |                                                    |            |   |      |   |            |      |  |   |            |  



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



13. Employee Benefit Plans



The Company has elected to follow Accounting Principles Board Opinion Number 25, Accounting for Stock Issued to
Employees, (APB 25) and related interpretations in accounting for its stock options. Under APB 25, in September 1999, in connection with the appointment of the Chief Operating Officer, the Company issued 20,000 options at less than
the fair market value at the date of grant. The options vested equally in January 2001 and January 2002. For the year ended January 31, 2002 the Company recognized compensation expense of US$100,000.



The Company has the following active stock option and purchase plans: the
Trintech Group PLC 1997 Share Option Scheme, the Trintech Group PLC Directors and Consultants Share Option Scheme, the 1999 Employee Savings Related Share Option Scheme and the 1999 Employee Share Purchase Plan (the Stock Plans). There are 6,200,000
Ordinary Shares (3,100,000 equivalent ADSs) available to be issued collectively under the Stock Plans. If an option expires or is cancelled for any reason without having been fully exercised or vested, the unvested or cancelled options will continue
to be available for future grant under the Stock Plans.



The
Trintech Group PLC 1997 Share Option Scheme (the 1997 Plan), which provides for the grant of options to purchase Ordinary Shares of the Company, was approved by the Companys Board of Directors and was subsequently amended. Under
the 1997 Plan, non-temporary employees and executive directors holding salaried employment or office with the Company or any subsidiary companies are eligible to participate in the 1997 Plan. All options granted have a seven-year term and generally
commence vesting at a rate of one twelfth of the total per quarter for each of the quarters in the three years commencing on the anniversary date of the grant. The exercise price of each share option is the fair market value of the share on the date
of grant.



During 1998, the Companys Board of Directors
and shareholders approved the Directors and Consultants Share Option Scheme which provides for the grant of options to purchase Ordinary Shares of the Company to non-employee directors and consultants of the Company. All options granted have a
seven-year term and are generally exercisable at date of the grant. The exercise price of each share option is the fair market value of the share on the date of grant.



In August 1999, the Company obtained shareholder approval for the establishment of the Trintech 1999 Employee Savings
Related Share Option Scheme for the Companys Irish employees. The 1999 savings related scheme applies to all of the Companys qualifying Irish employees and is intended to be an approved scheme under Schedule 12A to the Taxes
Consolidation Act 1997 of the Republic of Ireland. The eligible employees may apply for an option to purchase Ordinary Shares of the Company at a discount of 15% to the market value of Ordinary Shares on the last day on which the Ordinary Shares
were traded before grant. Participants must enter into approved savings arrangements the purpose of which is to fund the cost of the exercise of the option. As of January 31, 2004 no shares had been issued under this scheme.



Also in August 1999, the Company obtained shareholder approval for the
establishment of the Trintech 1999 Employee Share Purchase Plan for Trintechs U.S. employees. The 1999 share purchase plan is intended to qualify under Section 423 of the Code and contains consecutive, overlapping, twenty-four month offering
periods. Each offering period includes four six-month purchase periods. The offering periods generally start on the first trading day on or after March 1 and September 1 of each year.



The 1999 Share Purchase Plan permits participants to purchase Ordinary Shares of the Company at 85% of the lower of the fair
market value on the first day of the applicable offering period or on the last day of the six-month purchase period, through payroll deductions of up to 15% of the participants compensation. As of January 31, 2004, 211,696 Ordinary Shares
(105,848 equivalent ADSs) had been issued under this plan, of which 63,448 Ordinary Shares (31,724 equivalent ADSs) were issued for a total consideration of approximately US$36,000 during the year ended January 31, 2004.



F-24



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



In November 2001, the Board of Directors of the Company approved an offer to exchange all outstanding
unexercised options held by eligible employees granted under the Trintech Group PLC 1997 Share Option Scheme for new options to be granted under the 1997 Trintech Group PLC Share Option Scheme. Under the offer, employees were given the opportunity,
if they chose, to cancel outstanding stock options previously granted to them in exchange for an equal number of replacement options to be granted at a future date, at least six months and a day from the cancellation date, which was December 14,
2001. No members of the Board of Directors or officers of the Company were eligible to participate in the offer. Under the terms of the offer, the Company accepted for cancellation options to purchase 658,862 Ordinary Shares (329,431 equivalent
ADSs). Subject to the terms and conditions of the offer, the Company granted new options to subscribe to, or purchase an aggregate of 599,586 Ordinary Shares (299,793 equivalent ADSs) on June 17, 2002. Each replacement option vested and was
exercisable substantially to the same degree as the original option.



A summary of the Companys stock option activity and related information for the years ended January 31, 2002, 2003 and 2004 is as follows:



|                                 |  |                  |   |                  |                                  |                  |         |            |   |                                  |   |         |  |           |                                 |  |   |      
|-------------------------------- |  | ---------------- | - | ---------------- | -------------------------------- | ---------------- | ------- | ---------- | - | -------------------------------- | - | ------- |  | --------- | ------------------------------- |  | - | -----
|                                 |  | January 31, 2002 |   | January 31, 2003 |                                  | January 31, 2004
|                                 |  | Options          |   |                  | Weighted- average exercise price |                  | Options |            |   | Weighted- average exercise price |   | Options |  |           | Weighted-average exercise price
|Outstanding at beginning of year |  | 4,233,919        |   |                  | $                                | 19.16            |         | 4,153,708  |   |                                  | $ | 10.54   |  | 4,438,432 |                                 |  | $ | 6.67 
|Granted                          |  | 1,912,960        |   |                  |                                  | 3.86             |         | 1,826,078  |   |                                  |   | 0.90    |  | 1,710,500 |                                 |  |   | 1.28 
|Cancelled                        |  | (679,464         | ) |                  |                                  | 28.10            |         | (400,000   | ) |                                  |   | 11.56   |  | (950,116  | )                               |  |   | 7.37 
|                                 |  |                  |   |                  |                                  |                 
|Forfeited                        |  | (951,508         | ) |                  |                                  | 25.40            |         | (1,113,976 | ) |                                  |   | 10.01   |  | (471,000  | )                               |  |   | 10.92
|Exercised                        |  | (362,199         | ) |                  |                                  | 2.64             |         | (27,378    | ) |                                  |   | 0.73    |  | (212,576  | )                               |  |   | 0.73 
|                                 |  |                  |   |                  |                                  |                  |         |            |   |                                  |   |         |  |           |                                 |  |   |      
|Outstanding at end of year       |  | 4,153,708        |   |                  | $                                | 10.54            |         | 4,438,432  |   |                                  | $ | 6.67    |  | 4,515,240 |                                 |  | $ | 4.32 
|                                 |  |                  |   |                  |                                  |                  |         |            |   |                                  |   |         |  |           |                                 |  |   |      
|Exercisable at end of year.      |  | 1,388,442        |   |                  | $                                | 11.96            |         | 1,941,874  |   |                                  | $ | 10.71   |  | 2,235,096 |                                 |  | $ | 6.89 
|                                 |  |                  |   |                  |                                  |                  |         |            |   |                                  |   |         |  |           |                                 |  |   |      



|                                                                                                                                                                    |  |                  |      |                                  |   |                  |  |                                  |      |            |   |                                  |  |   |      |  |   |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---- | -------------------------------- | - | ---------------- |  | -------------------------------- | ---- | ---------- | - | -------------------------------- |  | - | ---- |  | - | ----
|                                                                                                                                                                    |  | January 31, 2002 |      | January 31, 2003                 |   | January 31, 2004
|                                                                                                                                                                    |  | Fair value       |      | Weighted- average exercise price |   | Fair value       |  | Weighted- average exercise price |      | Fair value |   | Weighted- average exercise price
|Weighted-average fair value of options granted during the year for options whose exercise price equals the market price of the Ordinary Shares
on the date of grant |  | $                | 2.72 |                                  | $ | 3.86             |  | $                                | 0.58 |            | $ | 0.90                             |  | $ | 0.92 |  | $ | 1.28



Exercise prices for
options outstanding as of January 31, 2004 ranged from US$0.50 to US$49.50 per share. The breakdown of outstanding options at January 31, 2004 by price range is as follows:



|             |  |                                         |  |                     |  |                    
|------------ |  | --------------------------------------- |  | ------------------- |  | -------------------
|Price range  |  | Weighted average Remaining life (years) |  | Options outstanding |  | Options exercisable
|$ 0.500.88  |  | 5.62                                    |  | 921,698             |  | 560,680            
|$ 0.891.11  |  | 5.91                                    |  | 454,150             |  | 92,250             
|$ 1.121.25  |  | 6.46                                    |  | 1,065,000           |  | 252,500            
|$ 1.263.40  |  | 5.13                                    |  | 1,080,310           |  | 454,586            
|$ 3.4149.50 |  | 3.32                                    |  | 994,082             |  | 875,080            
|             |  |                                         |  |                     |  |                    
|             |  |                                         |  | 4,515,240           |  | 2,235,096          
|             |  |                                         |  |                     |  |                    



F-25



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Options have been granted in U.S. dollars since September 1999, previously options were granted in
Irish pounds. The U.S. dollar equivalents for disclosure above have been determined using the U.S. dollar rate at the date of each grant.



14. Income Taxes



Income (loss) before provision for income taxes consists of the following:



|        |  |                             |         |   |      |   |         |      |  |   |        |  
|------- |  | --------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|        |  | Year ended January 31,      |        
|        |  | 2002                        |         |   | 2003 |   |         | 2004 | 
|        |  | (U.S. dollars in thousands) |        
|Ireland |  | $                           | (95,525 | ) |      | $ | (40,348 | )    |  | $ | (9,549 | )
|Foreign |  |                             | (4,429  | ) |      |   | (4,363  | )    |  |   | 6,389  |  
|        |  |                             |         |   |      |   |         |      |  |   |        |  
|Total   |  | $                           | (99,954 | ) |      | $ | (44,711 | )    |  | $ | (3,160 | )
|        |  |                             |         |   |      |   |         |      |  |   |        |  



The provision for
income taxes consists of the following:



|                                 |  |                             |    |      |   |      |  |   |  
|-------------------------------- |  | --------------------------- | -- | ---- | - | ---- |  | - | -
|                                 |  | Year ended January 31,     
|                                 |  | 2002                        |    | 2003 |   | 2004
|                                 |  | (U.S. dollars in thousands)
|Current:                         |  |                             |    |      |   |      |  |   |  
|Ireland                          |  | $                           | 42 |      | $ | 59   |  | $ | 
|Foreign                          |  |                             | 43 |      |   | 49   |  |   | 
|                                 |  |                             |    |      |   |      |  |   |  
|Total current                    |  | $                           | 85 |      | $ | 108  |  | $ | 
|                                 |  |                             |    |      |   |      |  |   |  
|Deferred:                        |  |                             |    |      |   |      |  |   |  
|Ireland                          |  | $                           |   |      | $ |     |  | $ | 
|Foreign                          |  | $                           |   |      | $ |     |  | $ | 
|                                 |  |                             |    |      |   |      |  |   |  
|Total deferred                   |  |                             |   |      | $ |     |  |   | 
|                                 |  |                             |    |      |   |      |  |   |  
|Total provision for income taxes |  | $                           | 85 |      | $ | 108  |  | $ | 
|                                 |  |                             |    |      |   |      |  |   |  



The provision for
income taxes differs from the amount computed by applying the statutory income tax rate to income before taxes. The sources and tax effects of the differences are as follows:



|                                                                                                                     |  |                             |         |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                                                     |  | Year ended January 31,      |        
|                                                                                                                     |  | 2002                        |         |   | 2003 |   |        | 2004 | 
|                                                                                                                     |  | (U.S. dollars in thousands) |        
|Income taxes computed at the Irish statutory income tax rate of 19.66% for 2002, 15.71% for 2003 and 12.50% for 2004 |  | $                           | (19,651 | ) |      | $ | (7,019 | )    |  | $ | (395   | )
|Income (losses) from Irish manufacturing operations relieved at lower rates                                          |  |                             | 2,104   |   |      |   | 1,755  |      |  |   | 320    |  
|Income (losses) subject to higher rates of tax                                                                       |  |                             | 53      |   |      |   | 21     |      |  |   | 1,160  |  
|Operating losses utilized                                                                                            |  |                             |        |   |      |   |       |      |  |   | (1,881 | )
|Operating losses not utilized                                                                                        |  |                             | 4,068   |   |      |   | 3,243  |      |  |   | 1,309  |  
|Income not subject to tax                                                                                            |  |                             | (506    | ) |      |   | (93    | )    |  |   | (42    | )
|State and local tax                                                                                                  |  |                             |        |   |      |   |       |      |  |   | 169    |  
|Withholding tax                                                                                                      |  |                             |        |   |      |   | 108    |      |  |   |       |  
|Non-deductible expenses                                                                                              |  |                             | 14,263  |   |      |   | 2,405  |      |  |   |       |  
|Capital allowances in excess of depreciation                                                                         |  |                             | (394    | ) |      |   | (315   | )    |  |   | (640   | )
|Non-deductible stock compensation                                                                                    |  |                             | 148     |   |      |   | 3      |      |  |   |       |  
|                                                                                                                     |  |                             |         |   |      |   |        |      |  |   |        |  
|Total provision for income taxes.                                                                                    |  | $                           | 85      |   |      | $ | 108    |      |  | $ |       |  
|                                                                                                                     |  |                             |         |   |      |   |        |      |  |   |        |  



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                 |  |                             |        |   |      |   |         |      |  |   |         |  
|-------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                 |  | Year ended January 31,      |       
|                                 |  | 2002                        |        |   | 2003 |   |         | 2004 | 
|                                 |  | (U.S. dollars in thousands) |       
|Deferred tax assets              |  |                             |        |   |      |   |         |      |  |   |         |  
|Net operating loss carryforwards |  | $                           | 8,243  |   |      | $ | 15,863  |      |  | $ | 19,140  |  
|                                 |  |                             |        |   |      |   |         |      |  |   |         |  
|Total deferred tax assets        |  |                             | 8,243  |   |      |   | 15,863  |      |  |   | 19,140  |  
|Valuation allowance              |  |                             | (8,243 | ) |      |   | (15,863 | )    |  |   | (19,140 | )
|                                 |  |                             |        |   |      |   |         |      |  |   |         |  
|Net deferred tax assets          |  | $                           |       |   |      | $ |        |      |  | $ |        |  
|                                 |  |                             |        |   |      |   |         |      |  |   |         |  



At January 31, 2004,
the Company had Irish manufacturing, U.S., U.K. and German net operating loss carryforwards of approximately US$134,944,000, US$14,072,000 (including US$8,507,000 from disqualifying dispositions), US$2,276,000 and US$75,000, respectively. The
utilization of these net operating loss carryforwards is limited to the future profitable operations of the Company in the related tax jurisdictions in which such carryforwards arose. The Irish and U.K. losses carry forward indefinitely. The U.S.
loss carryforwards will expire between 2014 and 2023 if not previously utilized. 100% valuation allowances have been provided against the net operating loss carryforwards because of the history of operating losses in the related tax jurisdictions.



15. Segment Information



Operating segments are identified as components of an enterprise about which
separate discrete financial information is available that is evaluated by the chief operating decision maker or decision making group to make decisions about how to allocate resources and assess performance. The Companys chief operating
decision maker is the Chief Executive Officer. To date, the Company has viewed its operations as principally two segments:



|                                    |  |                             |        |   |                     |   |        |                |  |   |           |   |  |                    |         |   |  |   |          |  
|----------------------------------- |  | --------------------------- | ------ | - | ------------------- | - | ------ | -------------- |  | - | --------- | - |  | ------------------ | ------- | - |  | - | -------- | -
|                                    |  | Year ended January 31, 2002 |       
|                                    |  | (U.S. dollars in thousands) |       
|                                    |  | Product                     |        |   | Licenses & Services |   |        | Segments Total |  |   | All Other |   |  | Consolidated Total |        
|Revenue                             |  | $                           | 26,104 |   |                     | $ | 42,237 |                |  | $ | 68,341    |   |  | $                  |        |   |  | $ | 68,341   |  
|Cost of Sale                        |  |                             | 19,476 |   |                     |   | 9,208  |                |  |   | 28,684    |   |  |                    | 9,921   |   |  |   | 38,605   |  
|Gross Profit                        |  |                             | 6,628  |   |                     |   | 33,029 |                |  |   | 39,657    |   |  |                    | (9,921  | ) |  |   | 29,736   |  
|Operating Expenses                  |  |                             | 7,529  |   |                     |   | 36,512 |                |  |   | 44,041    |   |  |                    | 89,133  |   |  |   | 133,174  |  
|Operating Profit (Loss)             |  |                             | (901   | ) |                     |   | (3,483 | )              |  |   | (4,384    | ) |  |                    | (99,054 | ) |  |   | (103,438 | )
|Non-operating Income (expense), net |  |                             |       |   |                     |   |       |                |  |   |          |   |  |                    | 3,399   |   |  |   | 3,399    |  
|                                    |  |                             |        |   |                     |   |        |                |  |   |           |   |  |                    |         |   |  |   |          |  
|Net Income (Loss)                   |  | $                           | (901   | ) |                     | $ | (3,483 | )              |  | $ | (4,384    | ) |  | $                  | (95,655 | ) |  | $ | (100,039 | )
|                                    |  |                             |        |   |                     |   |        |                |  |   |           |   |  |                    |         |   |  |   |          |  
|Segment Assets                      |  | $                           | 11,336 |   |                     | $ | 7,844  |                |  | $ | 19,180    |   |  | $                  | 104,078 |   |  | $ | 123,258  |  
|                                    |  |                             |        |   |                     |   |        |                |  |   |           |   |  |                    |         |   |  |   |          |  



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##### Table of Contents

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                    |  |                             |        |   |                     |   |                |  |   |           |   |  |                    |         |   |  |   |         |  
|----------------------------------- |  | --------------------------- | ------ | - | ------------------- | - | -------------- |  | - | --------- | - |  | ------------------ | ------- | - |  | - | ------- | -
|                                    |  | Year ended January 31, 2003 |       
|                                    |  | (U.S. dollars in thousands) |       
|                                    |  | Product                     |        |   | Licenses & Services |   | Segments Total |  |   | All Other |   |  | Consolidated Total |        
|Revenue                             |  | $                           | 9,165  |   |                     | $ | 33,691         |  | $ | 42,856    |   |  | $                  |        |   |  | $ | 42,856  |  
|Cost of Sale                        |  |                             | 11,148 |   |                     |   | 12,984         |  |   | 24,132    |   |  |                    | 4,720   |   |  |   | 28,852  |  
|Gross (Loss) Profit                 |  |                             | (1,983 | ) |                     |   | 20,707         |  |   | 18,724    |   |  |                    | (4,720  | ) |  |   | 14,004  |  
|Operating Expenses                  |  |                             | 6,690  |   |                     |   | 17,118         |  |   | 23,808    |   |  |                    | 36,394  |   |  |   | 60,202  |  
|Operating Profit (Loss)             |  |                             | (8,673 | ) |                     |   | 3,589          |  |   | (5,084    | ) |  |                    | (41,114 | ) |  |   | (46,198 | )
|Non-operating Income (expense), net |  |                             |       |   |                     |   |               |  |   |          |   |  |                    | 1,379   |   |  |   | 1,379   |  
|                                    |  |                             |        |   |                     |   |                |  |   |           |   |  |                    |         |   |  |   |         |  
|Net Income (Loss)                   |  | $                           | (8,673 | ) |                     | $ | 3,589          |  | $ | (5,084    | ) |  | $                  | (39,735 | ) |  | $ | (44,819 | )
|                                    |  |                             |        |   |                     |   |                |  |   |           |   |  |                    |         |   |  |   |         |  
|Segment Assets                      |  | $                           | 7,380  |   |                     | $ | 5,782          |  | $ | 13,162    |   |  | $                  | 60,351  |   |  | $ | 73,513  |  
|                                    |  |                             |        |   |                     |   |                |  |   |           |   |  |                    |         |   |  |   |         |  



|                                    |  |                             |        |   |                     |   |                |  |           |        |  |                    |        |   |  |   |        |  
|----------------------------------- |  | --------------------------- | ------ | - | ------------------- | - | -------------- |  | --------- | ------ |  | ------------------ | ------ | - |  | - | ------ | -
|                                    |  | Year ended January 31, 2004 |       
|                                    |  | (U.S. dollars in thousands) |       
|                                    |  | Product                     |        |   | Licenses & Services |   | Segments Total |  | All Other |        |  | Consolidated Total |       
|Revenue                             |  | $                           | 10,318 |   |                     | $ | 32,753         |  | $         | 43,071 |  | $                  |       |   |  | $ | 43,071 |  
|Cost of Sale                        |  |                             | 7,586  |   |                     |   | 10,198         |  |           | 17,784 |  |                    | 1,135  |   |  |   | 18,919 |  
|Gross Profit                        |  |                             | 2,732  |   |                     |   | 22,555         |  |           | 25,287 |  |                    | (1,135 | ) |  |   | 24,152 |  
|Operating Expenses                  |  |                             | 5,523  |   |                     |   | 16,217         |  |           | 21,740 |  |                    | 5,919  |   |  |   | 27,659 |  
|Operating Profit (Loss)             |  |                             | (2,791 | ) |                     |   | 6,338          |  |           | 3,547  |  |                    | (7,054 | ) |  |   | (3,507 | )
|Non-operating Income (expense), net |  |                             |       |   |                     |   |               |  |           |       |  |                    | 347    |   |  |   | 347    |  
|                                    |  |                             |        |   |                     |   |                |  |           |        |  |                    |        |   |  |   |        |  
|Net Income (Loss)                   |  | $                           | (2,791 | ) |                     | $ | 6,338          |  | $         | 3,547  |  | $                  | (6,707 | ) |  | $ | (3,160 | )
|                                    |  |                             |        |   |                     |   |                |  |           |        |  |                    |        |   |  |   |        |  
|Segment Assets                      |  | $                           | 3,988  |   |                     | $ | 6,636          |  | $         | 10,624 |  | $                  | 53,693 |   |  | $ | 64,317 |  
|                                    |  |                             |        |   |                     |   |                |  |           |        |  |                    |        |   |  |   |        |  



The Company only
reports direct operating expenses under the control of the Chief Operating Decision Maker in the Segmental Information disclosed. The Company does not report indirect operating expenses, depreciation and amortization, impairment, interest income
(expense), income taxes, capital expenditures, or identifiable assets by industry segment, other than inventories and accounts receivable, to the Chief Executive Officer.



F-28



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following tables reconcile segment income (loss) before income taxes to consolidated income
(loss) before income taxes and segment assets to consolidated total assets.



|                                                         |  |                             |         |   |      |   |         |      |  |   |        |  
|-------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                         |  | Year ended January 31,      |        
|                                                         |  | 2002                        |         |   | 2003 |   |         | 2004 | 
|                                                         |  | (U.S. dollars in thousands) |        
|Total income (loss) before taxes for reportable segments |  | $                           | (4,384  | ) |      | $ | (5,084  | )    |  | $ | 3,547  |  
|Unallocated amounts:                                     |  |                             |         |   |      |   |         |      |  |   |        |  
|Central overheads                                        |  |                             | (15,244 | ) |      |   | (8,777  | )    |  |   | (3,248 | )
|Depreciation                                             |  |                             | (3,381  | ) |      |   | (4,218  | )    |  |   | (1,420 | )
|Amortization                                             |  |                             | (36,167 | ) |      |   | (7,292  | )    |  |   | (1,641 | )
|Impairment of goodwill                                   |  |                             | (36,540 | ) |      |   | (12,849 | )    |  |   |       |  
|Impairment of purchased intangible assets                |  |                             | (1,562  | ) |      |   | (3,686  | )    |  |   |       |  
|Stock compensation                                       |  |                             | (840    | ) |      |   | (22     | )    |  |   |       |  
|Restructuring charge                                     |  |                             | (5,320  | ) |      |   | (4,270  | )    |  |   | (745   | )
|Interest income (expense), net                           |  |                             | 2,961   |   |      |   | 716     |      |  |   | 268    |  
|Exchange gain, net                                       |  |                             | 523     |   |      |   | 771     |      |  |   | 79     |  
|                                                         |  |                             |         |   |      |   |         |      |  |   |        |  
|Income (loss) before income taxes                        |  | $                           | (99,954 | ) |      | $ | (44,711 | )    |  | $ | (3,160 | )
|                                                         |  |                             |         |   |      |   |         |      |  |   |        |  
|Total assets for reportable segments                     |  | $                           | 19,180  |   |      | $ | 13,162  |      |  | $ | 10,624 |  
|Unallocated amounts:                                     |  |                             |         |   |      |   |         |      |  |   |        |  
|Cash and cash equivalents                                |  |                             | 6,750   |   |      |   | 42,559  |      |  |   | 36,864 |  
|Restricted cash                                          |  |                             | 5,369   |   |      |   | 3,132   |      |  |   | 1,211  |  
|Marketable securities                                    |  |                             | 47,976  |   |      |   |        |      |  |   |       |  
|Value added taxes                                        |  |                             | 533     |   |      |   | 617     |      |  |   | 471    |  
|Prepaid expenses and other current assets                |  |                             | 3,523   |   |      |   | 2,665   |      |  |   | 2,706  |  
|Property and equipment, net                              |  |                             | 5,386   |   |      |   | 1,674   |      |  |   | 988    |  
|Other non-current assets                                 |  |                             | 15,540  |   |      |   | 3,095   |      |  |   | 3,994  |  
|Goodwill                                                 |  |                             | 19,001  |   |      |   | 6,609   |      |  |   | 7,459  |  
|                                                         |  |                             |         |   |      |   |         |      |  |   |        |  
|Total Assets                                             |  | $                           | 123,258 |   |      | $ | 73,513  |      |  | $ | 64,317 |  
|                                                         |  |                             |         |   |      |   |         |      |  |   |        |  



The distribution of
net revenue by geographical area was as follows:



|                                                   |  |                             |        |      |   |        |  |   |       
|-------------------------------------------------- |  | --------------------------- | ------ | ---- | - | ------ |  | - | ------
|                                                   |  | Year ended January 31,     
|                                                   |  | 2002                        |        | 2003 |   | 2004  
|                                                   |  | (U.S. dollars in thousands)
|Germany and Ireland                                |  | $                           | 29,095 |      | $ | 9,364  |  | $ | 7,201 
|United States of America                           |  |                             | 21,371 |      |   | 17,513 |  |   | 18,918
|Europe (excluding Germany and Ireland)             |  |                             | 12,788 |      |   | 13,320 |  |   | 15,144
|Rest of World (excluding United States of America) |  |                             | 5,087  |      |   | 2,659  |  |   | 1,808 
|                                                   |  |                             |        |      |   |        |  |   |       
|Total                                              |  | $                           | 68,341 |      | $ | 42,856 |  | $ | 43,071
|                                                   |  |                             |        |      |   |        |  |   |       



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                     |  |                             |        |      |   |        |  |   |       
|-------------------- |  | --------------------------- | ------ | ---- | - | ------ |  | - | ------
|                     |  | January 31,                
|                     |  | 2002                        |        | 2003 |   | 2004  
|                     |  | (U.S. dollars in thousands)
|Long Lived Assets:   |  |                             |        |      |   |        |  |   |       
|Country of Domicile: |  |                             |        |      |   |        |  |   |       
|Ireland              |  | $                           | 38,053 |      | $ | 10,800 |  | $ | 8,822 
|Foreign Countries:   |  |                             |        |      |   |        |  |   |       
|United States        |  |                             | 1,047  |      |   | 67     |  |   | 3,356 
|Other                |  |                             | 827    |      |   | 511    |  |   | 263   
|                     |  |                             |        |      |   |        |  |   |       
|Total                |  | $                           | 39,927 |      | $ | 11,378 |  | $ | 12,441
|                     |  |                             |        |      |   |        |  |   |       



16. Government Grants Repayable and
Related Loans



The Company has received non-interest
bearing loans which are repayable at rates linked to future revenues earned in the related markets. The loans are repayable at a rate of 1.4% of total export sales in the period January 1999 to December 2001. Repayments commenced in January 2000.
The Company has credited all such loan amounts to the balance sheet liability account Government Grants repayable and related loans as the Company believes such loans will be repaid in full. The Company repaid approximately US$399,000 in
relation to these loans during the year ended January 31, 2004.



Under a research and development agreement between the Company and Enterprise Ireland the Company has offset US$280,000 against related research and development expenditure for the year ended January 31, 2004 and US$nil for the years ended
January 31, 2002 and 2003. Under the terms of the agreement between the Company and Enterprise Ireland, this grant may be repaid to Enterprise Ireland in certain circumstances; principally the disposal by the Company of intellectual property arising
from the grant aided research and development. The Company has not disposed of any such intellectual property through January 31, 2004.



17. Selected Statement of Operating Data



The following customers accounted for more than 10% of revenue in any one of the years ended January 31, 2002, 2003 and 2004, respectively.



|                                |  |                        |   |  |      |   |  |      |  
|------------------------------- |  | ---------------------- | - |  | ---- | - |  | ---- | -
|                                |  | Year Ended January 31, |  
|                                |  | 2002                   |   |  | 2003 |   |  | 2004 |  
|Deutsche Verkehrs Bank Zentrale |  | 12                     | % |  | 1    | % |  | 1    | %
|                                |  |                        |   |  |      |   |  |      |  
|Fiducia                         |  | 10                     | % |  | 0    | % |  | 3    | %
|                                |  |                        |   |  |      |   |  |      |  



The customers
identified in the above table all relate to the product segment described in note 15.



18. Related Party Transactions



Huttoft
Company, an unlimited company which is wholly-owned by certain directors of the Company owns a special non-voting class of shares in Trintech Limited, one of the Companys Irish subsidiaries. All of the voting shares in the subsidiary are owned
by the Company. The shares do not entitle the holders thereof to receive any share of the assets of the Company on a winding up. Trintech Limited may, from time to time, declare dividends to Huttoft Company and Huttoft Company may declare dividends
to its shareholders out of these amounts. Any such dividends paid by Trintech Limited are treated as compensation expense by the



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Company in its financial statements prepared in accordance with generally accepted accounting principles in the United States notwithstanding their legal
form of dividends to minority interests in order to correctly reflect the substance of the transactions. There were no dividend payments due to Huttoft Company as of January 31, 2003 or 2004. The amount of dividends included in compensation expense
are as follows:



| |  |                             |  |      |  |     
| |  | --------------------------- |  | ---- |  | ----
| |  | Year ended January 31,     
| |  | 2002                        |  | 2003 |  | 2004
| |  | (U.S. dollars in thousands)
| |  | 154                         |  | 315  |  | 582 
| |  |                             |  |      |  |     



As described in Note
6, the Company leases its corporate headquarters in Dublin, Ireland from Cyril McGuire, an officer and director of the Company and John McGuire, a significant shareholder of the Company. The rent paid by the Company was determined after completion
of a survey of the rental market, and the terms of the leases are no less favorable than those that could be obtained in arms-length transactions. There were no rent payments due to Cyril McGuire and John McGuire in relation to these leases as of
January 31, 2003 or 2004. The amounts paid by the Company in relation to these leases included in rent expense are as follows:



| |  |                             |  |       |  |      
| |  | --------------------------- |  | ----- |  | -----
| |  | Year ended January 31,     
| |  | 2002                        |  | 2003  |  | 2004 
| |  | (U.S. dollars in thousands)
| |  | 1,308                       |  | 1,400 |  | 1,647
| |  |                             |  |       |  |      



19. Acquisitions



On August 25, 2000, the Company acquired the outstanding shares of Checkline
plc, a privately held company in the United Kingdom, for total consideration of approximately US$39.3 million subject to final adjustment relating to performance related deferred consideration. The consideration as at January 31, 2004, totaled
US$41.1 million. The total consideration comprised the issuance of 300,518 ADSs with a value of US$29 million at the time of the agreement, US$11.8 million in cash, and related costs. A further US$1.25 million may become payable to the former
stockholders of Checkline plc if agreement on certain performance criteria being met is reached. This payment would result in an increase in the purchase price of the acquired business, and a corresponding increase to the goodwill recorded.



The total purchase costs as at January 31, 2004, totaling
US$41.1 million, comprising the fair value of the shares issued, the cash paid and related transaction costs, have been allocated, based on their respective fair values, to non-current assets (purchased technology, assembled workforce, acquired
customer base and a non-compete covenant) of US$9 million, goodwill of US$31.6 million and net assets acquired of US$0.5 million. The Company adopted SFAS No. 142 on February 1, 2002, and reclassified non-current assets relating to assembled
workforce of US$343,000 to goodwill and ceased to amortize US$343,000 of goodwill. Non-current assets were amortized on a straight-line basis over their estimated useful economic lives of three years. During the years ended January 31, 2002, and
2003, the company recognized other non-current asset impairments, principally a non-compete covenant and purchased technology, of US$1.6 million and US$1.0 million, respectively.



During January 2003, in connection with the acquisition of Checkline plc, the Company recognized a charge in its
Consolidated Statement of Operations in relation to an adjustment of acquisition liabilities, primarily legal costs, of approximately US$377,000.



On November 15, 2000, the Company acquired substantially all the assets of Sursoft, a privately held company in Latin America, for total consideration of
approximately US$11.0 million subject to final adjustment



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



relating to performance related deferred consideration, which was finalized in March 2003, as outlined below. The consideration as at January 31, 2003
totaled US$11.4 million. The total purchase costs comprise US$8.9 million payable in cash over five years, deferred consideration of US$2.2 million payable in cash, and transaction costs of US$0.3 million. Separately, the vendors of the Sursoft
assets purchased 87,064 ADSs for a total cash consideration of US$3.5 million. The acquisition agreement with Sursoft shareholders was amended in March 2003. Under the terms of the amended agreement, the Company paid approximately US$451,000 to
Sursoft shareholders in April 2003. In addition, the Company will be required to pay an additional final amount of either US$150,000 contingent on the achievement of agreed performance criteria or US$100,000 during the year ending January 31, 2005.
The amended agreement reduced the total estimated consideration of US$11.4 million at January 31, 2003, to approximately US$10.3 million, a reduction in deferred consideration of approximately US$1,149,000. In connection with the amended agreement
the Company had a restricted cash balance of approximately US$450,000 as of January 31, 2004, in relation to potential employee restructuring costs associated with its research and development facility in Uruguay.



The acquisition was accounted for under the purchase method of accounting,
and accordingly, the assets, liabilities, and operating results have been included in the accompanying financial statements from the date of acquisition. The total purchase costs of US$10.3 million, comprising the fair value of the shares issued,
the cash paid, the deferred consideration and related transaction costs, has been allocated, based on their respective fair values, to non-current assets (purchased technology and assembled workforce) of US$3.1 million and goodwill of US$7.2
million. The Company adopted SFAS No. 142 on February 1, 2002, and reclassified non-current assets relating to assembled workforce of US$118,000 to goodwill, and ceased to amortize US$4.3 million of goodwill. Non-current assets were amortized on a
straight-line basis over their estimated useful economic lives of three years. During January 2003, the Company recognized other non-current asset impairments, principally purchased technology of US$590,000.



On November 20, 2000, the Company acquired Exceptis Technologies Limited, a
privately held company in Ireland, for total consideration of approximately US$16.5 million subject to final adjustment relating to performance related deferred consideration and total amount of liabilities assumed. The final consideration totaled
US$18.1 million. The total purchase costs comprise the issuance of 433,388 ADSs with a value of US$15.6 million at the time of the agreement, 43,326 replacement options over the Companys Ordinary Shares with a fair value of US$433,000,
liabilities assumed of US$2.1 million, cash of US$1.2 million and related acquisition costs of US$0.9 million. Total unearned compensation cost for outstanding unvested options held by Exceptis employees and exchanged for unvested options granted by
the Company has been calculated as the portion of the intrinsic value at the consummation date that the future vesting period bears to the total vesting period. The amount of unearned compensation cost, US$281,000, has been deducted from the fair
value of the total purchase price. The acquisition was accounted for under the purchase method of accounting, and accordingly, the assets, liabilities, and operating results have been included in the accompanying financial statements from the date
of acquisition.



The total purchase costs of US$18.1 million,
comprising the fair value of the shares and replacement options issued, the net liabilities assumed and related transaction costs less the amount allocated to unearned compensation costs, has been allocated, based on their respective fair values, to
non-current assets (purchased technology, assembled workforce and non-compete covenants) of US$2 million and goodwill of US$17.9 million and net liabilities assumed of US$2.1 million. The Company adopted SFAS No. 142 on February 1, 2002, and
reclassified non-current assets relating to assembled workforce of US$316,000 to goodwill, and ceased to amortize US$4.8 million of goodwill. Non-current assets were amortized on a straight-line basis over their estimated useful economic lives of
three years. During January 2003, the company recognized other non-current asset impairments, principally a non compete covenant, of US$109,000.



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



During January 2003, in connection with the acquisition of Exceptis Technologies Limited, the Company
recognized a charge in its Consolidated Statement of Operations in relation to an adjustment of acquisition liabilities, primarily relating to lease abandonment costs, of approximately US$427,000.



On December 29, 2000, the Company acquired the primary assets of Globeset
Inc., a privately held company in the U.S., for total consideration of approximately US$33.9 million subject to final adjustment based on the total amount of liabilities assumed. In January 2003, the total consideration was reduced by approximately
US$1.0 million due to the adjustment of an assumed liability in connection with the acquisition of Globeset. The final consideration totaled US$35.6 million. The consideration comprises US$15.6 million in cash, net of cash acquired, the assumption
of liabilities of US$19.0 million and related acquisition costs of US$1.0 million. Separately, the vendors of the Globeset assets purchased 225,733 ADSs for a total cash consideration of US$10.0 million. The acquisition was accounted for under the
purchase method of accounting, and accordingly, the assets, liabilities, and operating results have been included in the accompanying financial statements from the date of acquisition.



The total purchase costs of US$35.6 million, comprising the net cash paid, net liabilities assumed and related transaction
costs, has been allocated, based on their respective fair values, to non-current assets (purchased technology, assembled workforce and acquired customer base) of US$10.3 million and goodwill of US$30.3 million less deferred income of US$5.0 million.
The Company adopted SFAS No. 142 on February 1, 2002, and reclassified non-current assets relating to assembled workforce of US$0.7 million to goodwill, and ceased to amortize US$9.5 million of goodwill. Non-current assets are being amortized on a
straight-line basis over their estimated useful economic lives of seven years. During January 2003, the Company recognized other non-current asset impairments, principally purchased technology of US$270,000.



On November 13, 2001, the Company acquired VeriFones secure payment
infrastructure and Internet payment ePS product line, for total consideration of US$3.4 million. The consideration comprises US$3.3 million in cash and related acquisition costs of US$100,000. The acquisition was accounted for under the purchase
method of accounting.



The total purchase costs of US$3.4
million, comprising the net cash paid and related transaction costs, has been allocated, based on their respective fair values, to non-current assets (purchased technology and acquired customer base) of US$2.9 million and goodwill of US$459,000. The
acquisition was accounted for in accordance with SFAS No. 141. Accordingly, goodwill was not amortized. Non-current assets were initially amortized on a straight-line basis over their estimated useful economic lives of three years. During January
2003, the Company recognized other non-current asset impairments, principally purchased technology of US$1.7 million equivalent to the carrying value of the assets, which reduced the carrying value of the assets to nil.



The Company recognized goodwill impairments of US$36,540,000 and
US$12,849,000 for the years ended January 31, 2002 and 2003, respectively, in connection with these acquisitions as fully described in Note 20.



On November 1, 2003, the Company acquired the outstanding shares of CW & Associates, Inc, doing business as DataFlow Services, a privately held
company in the U.S., for a total consideration of approximately US$3.9 million subject to final adjustment relating to performance related contingent consideration. The total purchase costs comprise approximately US$3.8 million in cash and
transaction costs of US$130,000. In addition, the Company will be required to pay additional performance related contingent consideration equal to fifty percent of profits, as defined in the purchase agreement, earned by the acquired business for
each of the financial years ending January 31, 2005 and 2006. The additional contingent consideration is subject to certain top-up provisions from profits for the year ending January 31, 2007 if the aggregate payments under the provisions for



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



fiscal 2005 and fiscal 2006 are less than US$2.5 million. These payments, will result in an increase in the purchase price of the acquired business, and a
corresponding increase to the goodwill recorded. Separately, the vendor of CW & Associates, Inc, purchased 150,000 ADSs for a total cash consideration of US$570,000.



CW & Associates, Inc, doing business as DataFlow Services, based in Dallas, Texas, provides a data delivery service
supporting customers bank reconciliation processes by aggregating bank account statement data and delivering it to customers daily in electronic form. This acquisition will allow the Company to accelerate the growth of its recently launched
statement delivery service.



The total purchase costs of US$3.9
million, comprising the cash paid and related transaction costs, has been allocated, based on their respective fair values, to non-current assets (purchased technology, acquired customer base and trade names) of US$2.5 million, goodwill of
US$850,000 and net assets acquired of US$521,000. The acquisition was accounted for in accordance with SFAS No. 141. Accordingly, goodwill was not amortized. Non-current assets are being amortized on a straight-line basis over their estimated useful
economic lives of six years. The assets, liabilities, and operating results of the acquired business have been included in the accompanying financial statements from the date of acquisition.



In connection with the acquisition the Company added approximately US$588,000
to Accounts Receivable and US$67,000 to Other Accrued Liabilities, respectively, in its Consolidated Balance Sheet as of the date of acquisition.



The following table represents unaudited consolidated pro forma financial information as if the Company had acquired CW & Associates, Inc. as of
February 1, 2002. The unaudited consolidated pro forma data is presented for illustrative purposes only and is not necessarily indicative of the combined financial position or results of operations of future periods. The results include nonrecurring
bonus payments of US$0.6 million and US$1.4 million for the years ended January 31, 2003 and 2004, respectively, and the effects of the amortization of acquired intangible assets and adjustments to the income tax provision to reflect the taxable
income earned in the U.SA.



|                                                                        |  |                                        |            |   |      |   |            |  
|----------------------------------------------------------------------- |  | -------------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                        |  | Year ended January 31,                 |           
|                                                                        |  | 2003                                   |            |   | 2004 |  
|                                                                        |  | (U.S. dollars in thousands)(Unaudited) |           
|Revenue                                                                 |  | $                                      | 45,862     |   |      | $ | 46,944     |  
|Net Income (loss)                                                       |  |                                        | (45,131    | ) |      |   | (3,617     | )
|Basic net income (loss) per Ordinary Share                              |  |                                        | (1.48      | ) |      |   | (0.12      | )
|Shares used in calculating basic net Income (loss) per Ordinary Share   |  |                                        | 30,559,410 |   |      |   | 30,314,419 |  
|Diluted net income (loss) per Ordinary Share                            |  |                                        | (1.48      | ) |      |   | (0.12      | )
|Shares used in calculating diluted net Income (loss) per Ordinary Share |  |                                        | 30,559,410 |   |      |   | 30,314,419 |  
|Basic net income (loss) per equivalent ADS                              |  |                                        | (2.95      | ) |      |   | (0.24      | )
|ADS used in calculating diluted net Income (loss) per Equivalent ADS    |  |                                        | 15,279,705 |   |      |   | 15,157,210 |  
|Basic net income (loss) per equivalent ADS                              |  |                                        | (2.95      | ) |      |   | (0.24      | )
|ADS used in calculating diluted net Income (loss) per Equivalent ADS    |  |                                        | 15,279,705 |   |      |   | 15,157,210 |  



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



20. Goodwill



Net loss and net loss per share for the years ended January 31, 2002, 2003 and 2004, adjusted to exclude amortization expense of goodwill, is as follows:



|                                                       |  |                             |          |   |      |   |         |      |  |   |        |  
|------------------------------------------------------ |  | --------------------------- | -------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                       |  | Years ended January 31,     |         
|                                                       |  | 2002                        |          |   | 2003 |   |         | 2004 | 
|                                                       |  | (U.S. dollars in thousands) |         
|Reported net loss                                      |  | $                           | (100,039 | ) |      | $ | (44,819 | )    |  | $ | (3,160 | )
|SFAS No. 142 effectGoodwill                           |  |                             | 27,806   |   |      |   |        |      |  |   |       |  
|                                                       |  |                             |          |   |      |   |         |      |  |   |        |  
|Adjusted net loss                                      |  | $                           | (72,233  | ) |      | $ | (44,819 | )    |  | $ | (3,160 | )
|                                                       |  |                             |          |   |      |   |         |      |  |   |        |  
|Reported basic and diluted net loss per ordinary share |  | $                           | (3.30    | ) |      | $ | (1.47   | )    |  | $ | (0.10  | )
|SFAS No. 142 effectGoodwill                           |  |                             | 0.92     | ) |      |   |        |      |  |   |       |  
|                                                       |  |                             |          |   |      |   |         |      |  |   |        |  
|Adjusted basic and diluted net loss per ordinary share |  | $                           | (2.38    | ) |      | $ | (1.47   | )    |  | $ | (0.10  | )
|                                                       |  |                             |          |   |      |   |         |      |  |   |        |  



Goodwill is analyzed
as follows:



|          |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |        |  |   |        |  |   |      
|--------- |  | --------------------------- | ------ | -------------- | - | --------------------------- |  | --- | ------ | ------------------- | - | -------------- |  | ----------------------- | ------ | --- | - | ------ |  | - | ------ |  | - | -----
|          |  | As of January 31, 2003      |        |                |   | As of January 31, 2004      |  |    
|          |  | GrossCarryingAmount         |        | ImpairmentLoss |   | AccumulatedAmortization     |  | Net |        | GrossCarryingAmount |   | ImpairmentLoss |  | AccumulatedAmortization |        | Net
|          |  | (U.S. dollars in thousands) |        |                |   | (U.S. dollars in thousands) |  |    
|          |  |                             |        |                |   |                             |  |    
|          |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |        |  |   |        |  |   |      
|Goodwill: |  | $                           | 92,229 |                | $ | 50,457                      |  | $   | 35,163 |                     | $ | 6,609          |  | $                       | 91,930 |     | $ | 49,308 |  | $ | 35,163 |  | $ | 7,459
|          |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |        |  |   |        |  |   |      



Upon the adoption of
SFAS 142 on February 1, 2002, the Company reclassified the net carrying amount of assembled workforce of US$1.5 million from other non-current assets to goodwill.



In January 2003, the Company recognized an adjustment of an assumed liability of US$1,011,000 in connection with the
acquisition of Globeset, as described in note 6. The adjustment reduced the impairment of goodwill charge for the year ended January 31, 2003 from US$13,860,000 to US$12,849,000.



During the fourth quarter of fiscal 2002, the Company performed an impairment assessment of identifiable intangible assets
(included in non-current assets), principally purchased technology and acquired customer base, and goodwill recorded in connection with its various acquisitions. The assessment was performed primarily due to the significant decline in the
Companys stock price, the net book value of assets significantly exceeding the Companys market capitalization, the significant under performance of the acquisitions relative to projections and the overall decline in industry growth rates
which indicated that this trend might continue for an indefinite period. As a result, the Company recorded a US$36.5 million impairment charge in the quarter ended January 31, 2002 to reduce goodwill associated with the acquisitions to its estimated
fair value. The estimate of fair value was based upon the discounted estimated cash flows from the sale of the products acquired for the succeeding three years. The assumptions supporting the estimated cash flows, including the discount rate,
reflected managements best estimates.



During the fourth
quarter of fiscal 2003, the Company completed its annual impairment test and assessments of the carrying value of identifiable intangible assets and goodwill as required by SFAS 142. The assessment was performed primarily due to the further
significant decline in the Companys stock price, the net book value of assets significantly exceeding the Companys market capitalization and the overall decline in industry growth rates which indicated that this trend might continue for
an indefinite period.



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The goodwill impairment test compared the carrying amount of the Licenses and Services Reporting
Segment, to which the goodwill related, to the estimated fair value of the Reporting Segment. The Company determined the estimated fair value of the Licenses and Services Reporting Segment based upon an independent appraisal, which applied the
income approach valuation method, using the discounted estimated cash flows from Licenses and Services Reporting Segment. The assumptions supporting the estimated cash flows, including the discount rate, reflect managements best estimates. As
a result, the Company recorded a US$12.8 million impairment charge in the quarter ended January 31, 2003 to reduce goodwill to its estimated fair value which reduced the carrying amount of goodwill to US$6.6 million.



During March 2003 in connection with the amendment of the Sursoft acquisition
agreement, the Company recorded an adjustment which reduced acquisition deferred consideration by US$1,149,000. Following an impairment review during the fourth quarter of fiscal 2003 the goodwill, in connection with the Companys acquisitions,
was written down to its estimated fair value and consequently the reduction in acquisition deferred consideration is recognized in the consolidated statement of operations in fiscal 2004.



During the year ended January 31, 2004, the Company allocated approximately US$850,000 of purchase price to goodwill in
connection with the acquisition of CW & Associates, Inc.



During the fourth quarter of fiscal 2004, the Company completed its annual impairment test and assessments of the carrying value of identifiable intangible assets and goodwill as required by SFAS 142 and determined its recorded goodwill was
not impaired as of January 31, 2004.



21. Restructuring Charges



In the first and fourth quarters of fiscal 2002, the
Company implemented restructuring plans primarily aimed at reducing employee headcount and consolidating facilities and assets. The Company recorded restructuring charges of US$2.5 million in the first quarter and US$1.6 million in the fourth
quarter, respectively in relation to these restructurings. The costs associated with the restructuring plan consist of US$3.0 million for employee terminations and US$1.1 million to consolidate facilities and operations. The restructuring plan to
reduce excess employee headcount and close excess facilities was due primarily to the overlap of positions and facilities as a result of Trintechs acquisitions in fiscal 2001. In connection with these activities, the Company reduced its
workforce by approximately 115 employees and closed facilities in San Mateo, California; Austin, Texas; and Miami, Florida.



In the third quarter of fiscal 2002, the Company recorded a US$1.25 million restructuring charge related to the restructuring of the UK business. The
charge is primarily a write down of receivables.



In the first
and third quarters of fiscal 2003, the Company recorded restructuring charges of US$3.5 million and US$0.7 million, respectively, primarily due to reducing employee headcount and the closing of excess facilities as the Company concentrated on
products with the highest earnings potential. The costs associated with the restructuring plans consist of US$2.3 million for reducing employee headcount and US$1.9 million to consolidate facilities and operations. The Company reduced its workforce
by approximately 125 employees including the agreed resignation of John McGuire, the Companys President, who resigned effective September 16, 2002 and closed facilities in Princeton, Philadelphia and San Mateo, California. The employee
terminations reduced research and development headcount by 87, general and administrative headcount by 24 and sales and marketing headcount by 14, respectively.



In the second, third and fourth quarters of fiscal 2004, the Company recorded restructuring charges of US$434,000, US$273,000 and US$38,000,
respectively, primarily related to staff terminations in connection



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TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



with our research and development facilities in Uruguay and Ireland, as the Company reduced investment in products where the market opportunity has not yet
developed, or the market has not expanded, due to economic conditions. In connection with these activities the Company reduced its workforce by 19 people in the second quarter, 11 people in the third quarter and 5 people in the fourth quarter of
fiscal 2004.



As of January 31, 2004, accrued restructuring
charges related to future lease commitments of US$285,000, which will be paid through fiscal 2006 and staff terminations of US$128,000 which were paid during February and March 2004. During the fourth quarter the Company secured a new tenant for a
suite in the San Mateo office enabling the Company to terminate its lease with the landlord. The Company continues to search for sub tenants for its remaining excess facilities, but given the short duration of the remaining lease terms and the
current market for commercial real estate, is unlikely to find subtenants at reasonable rates.



The following table summarizes the Companys restructuring activity for the years ended January 31, 2003 and 2004:



|                                            |  |                                |        |   |                                          |   |       |                     |  |   |       |   |  |   |        |  
|------------------------------------------- |  | ------------------------------ | ------ | - | ---------------------------------------- | - | ----- | ------------------- |  | - | ----- | - |  | - | ------ | -
|                                            |  | Year ended January 31,         |       
|                                            |  | (U.S. dollars in thousands)    |       
|                                            |  |                                |        |  
|                                            |  | Employee Severance andBenefits |        |   | Consolidation ofFacilities andOperations |   |       | Write-off of Assets |  |   | Total |  
|Reserve balance February 1, 2002            |  | $                              | 441    |   |                                          | $ | 521   |                     |  | $ |      |   |  | $ | 962    |  
|Restructuring provision during fiscal 2003  |  |                                | 2,328  |   |                                          |   | 1889  |                     |  |   | 53    |   |  |   | 4,270  |  
|Reclassification of restructuring provision |  |                                | 419    |   |                                          |   | (419  | )                   |  |   |      |   |  |   |       |  
|Amounts paid or written-off                 |  |                                | (3,143 | ) |                                          |   | (760  | )                   |  |   | (53   | ) |  |   | (3,956 | )
|                                            |  |                                |        |   |                                          |   |       |                     |  |   |       |   |  |   |        |  
|Reserve balance January 31, 2003            |  | $                              | 45     |   |                                          | $ | 1,231 |                     |  | $ |      |   |  | $ | 1,276  |  
|Restructuring provision during fiscal 2004  |  |                                | 745    |   |                                          |   |      |                     |  |   |      |   |  |   | 745    |  
|Reclassification of restructuring provision |  |                                | 289    |   |                                          |   | (289  | )                   |  |   |      |   |  |   |       |  
|Amounts paid or written-off                 |  |                                | (951   | ) |                                          |   | (657  | )                   |  |   |      |   |  |   | (1,608 | )
|                                            |  |                                |        |   |                                          |   |       |                     |  |   |       |   |  |   |        |  
|Reserve balance January 31, 2004            |  | $                              | 128    |   |                                          | $ | 285   |                     |  | $ |      |   |  | $ | 413    |  
|                                            |  |                                |        |   |                                          |   |       |                     |  |   |       |   |  |   |        |  



The Company expects to
record an additional restructuring charge as described in the subsequent events footnote.



22. Subsequent Events (Unaudited)



The Company expects to record a restructuring charge of approximately US$250,000 in the quarter ending April 30, 2004. The restructuring charge will primarily relate to involuntary staff terminations.



F-37