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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, 2005



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)



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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 Class |  | 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, Germany 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, 2005 was
30,908,635 ordinary shares, US$0.0027 par value, represented by 15,454,318 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



|          |  |                                                                              |  |     
|--------- |  | ---------------------------------------------------------------------------- |  | ----
|          |  |                                                                              |  | Page
|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                                                   |  | 18  
|Item 5.   |  | Operating and Financial Review and Prospects                                 |  | 34  
|Item 6.   |  | Directors, Senior Management and Employees                                   |  | 55  
|Item 7.   |  | Major Shareholders and Related Party Transactions                            |  | 65  
|Item 8.   |  | Financial Information                                                        |  | 67  
|Item 9.   |  | The Offer and Listing                                                        |  | 69  
|Item 10.  |  | Additional Information                                                       |  | 72  
|Item 11.  |  | Quantitative and Qualitative Discussion About Market Risk                    |  | 81  
|Item 12.  |  | Description of Securities other than Equity Securities                       |  | 82  
|          | 
|PART II   |  |                                                                             
|          |  |                                                                             
|Item 13.  |  | Defaults, Dividends, Arrearages and Delinquencies                            |  | 83  
|Item 14.  |  | Material Modifications to the Rights of Security Holders and Use of Proceeds |  | 83  
|Item 15.  |  | Controls and Procedures                                                      |  | 83  
|Item 16A. |  | Audit Committee Financial Expert                                             |  | 83  
|Item 16B. |  | Code of Ethics                                                               |  | 83  
|Item 16C. |  | Principal Accountant Fees and Services                                       |  | 84  
|Item 16D. |  | Exemptions from the Listing Standards for Audit Committees                   |  | 84  
|Item 16E. |  | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       |  | 85  
|          | 
|PART III  |  |                                                                             
|          |  |                                                                             
|Item 17.  |  | Financial Statements                                                         |  | 87  
|Item 18.  |  | Financial Statements                                                         |  | 87  
|Item 19.  |  | Exhibits                                                                     |  | 89  



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.



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 Compact SDK, PayWare 950pp, PayWare PINPad, PayWare OpenPOS, PayWare PrePay, PayWare



1



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Acquirer, PayWare ePS, PayWare mAccess,
IPS, PayWare SmartPIN, PayWare SmartPIN Link, PayWare OpenPay, PayWare Smart , PayWare Fusion PayWare GiftCard, Tracker, Bank Fee Analysis and DataFlow Services 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 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, all references to fiscal 2005 shall refer to the fiscal
year ended January 31, 2005 and all references to fiscal 2006 shall refer to the fiscal year ended January 31, 2006.



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;
| | - |  | -----------------------------------------------------



| |  |  | demand for Chip and Pin electronic point-of-sale systems;
| | - |  | ---------------------------------------------------------



| |  |  | average selling prices for the Companys products;
| | - |  | --------------------------------------------------



| |  |  | the likelihood that the Company becomes involved in litigation;
| | - |  | ---------------------------------------------------------------



| |  |  | maintaining the Companys profitability;
| | - |  | ----------------------------------------



| |  |  | 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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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, 2003, 2004 and 2005 and the consolidated balance sheet
data at January 31, 2004 and 2005 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, 2001 and January 31, 2002 and the consolidated balance sheet data at January 31, 2001, January 31, 2002, and January 31, 2003 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,                                          |           
|                                                                           |  | 2001                                                            |            |   | 2002 |   |            | 2003 |  |   | 2004       |   |  | 2005 |           
|                                                                           |  | (in thousands of U.S. dollars, except share and per share data) |           
|Consolidated Statement of Operations Data:                                 |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Revenue:                                                                   |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Product                                                                    |  | $                                                               | 22,288     |   |      | $ | 26,104     |      |  | $ | 9,165      |   |  | $    | 10,318     |   |  | $ | 18,848     |  
|License                                                                    |  |                                                                 | 20,612     |   |      |   | 30,240     |      |  |   | 22,418     |   |  |      | 22,867     |   |  |   | 23,567     |  
|Service                                                                    |  |                                                                 | 6,140      |   |      |   | 11,997     |      |  |   | 11,273     |   |  |      | 9,886      |   |  |   | 13,380     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total revenue                                                              |  |                                                                 | 49,040     |   |      |   | 68,341     |      |  |   | 42,856     |   |  |      | 43,071     |   |  |   | 55,795     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Cost of revenue:                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Product                                                                    |  |                                                                 | 15,110     |   |      |   | 19,476     |      |  |   | 11,148     |   |  |      | 7,586      |   |  |   | 13,088     |  
|License                                                                    |  |                                                                 | 6,718      |   |      |   | 10,448     |      |  |   | 9,248      |   |  |      | 5,313      |   |  |   | 3,725      |  
|Service                                                                    |  |                                                                 | 4,787      |   |      |   | 8,681      |      |  |   | 8,456      |   |  |      | 6,020      |   |  |   | 5,812      |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total cost of revenue                                                      |  |                                                                 | 26,615     |   |      |   | 38,605     |      |  |   | 28,852     |   |  |      | 18,919     |   |  |   | 22,625     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Gross margin                                                               |  |                                                                 | 22,425     |   |      |   | 29,736     |      |  |   | 14,004     |   |  |      | 24,152     |   |  |   | 33,170     |  
|Operating expenses:                                                        |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Research and development                                                   |  |                                                                 | 19,601     |   |      |   | 20,597     |      |  |   | 10,349     |   |  |      | 8,280      |   |  |   | 9,169      |  
|Sales and marketing                                                        |  |                                                                 | 16,955     |   |      |   | 18,719     |      |  |   | 10,297     |   |  |      | 8,689      |   |  |   | 9,473      |  
|General and administrative                                                 |  |                                                                 | 12,485     |   |      |   | 17,891     |      |  |   | 15,354     |   |  |      | 10,587     |   |  |   | 12,007     |  
|Restructuring charge                                                       |  |                                                                 |           |   |      |   | 5,320      |      |  |   | 4,270      |   |  |      | 745        |   |  |   | 288        |  
|Amortization of goodwill and intangible assets                             |  |                                                                 | 7,001      |   |      |   | 31,705     |      |  |   | 2,573      |   |  |      | 507        |   |  |   | 847        |  
|Impairment of goodwill and intangible assets                               |  |                                                                 |           |   |      |   | 38,102     |      |  |   | 16,535     |   |  |      |           |   |  |   |           |  
|Adjustment of acquisition liabilities                                      |  |                                                                 |           |   |      |   |           |      |  |   | 804        |   |  |      |           |   |  |   | (249       | )
|Adjustment of acquisition deferred consideration                           |  |                                                                 |           |   |      |   |           |      |  |   |           |   |  |      | (1,149     | ) |  |   |           |  
|Stock-based compensation                                                   |  |                                                                 | 5,279      |   |      |   | 840        |      |  |   | 20         |   |  |      |           |   |  |   | 116        |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Total operating expenses                                                   |  |                                                                 | 61,321     |   |      |   | 133,174    |      |  |   | 60,202     |   |  |      | 27,659     |   |  |   | 31,651     |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Income (loss) from operations                                              |  |                                                                 | (38,896    | ) |      |   | (103,438   | )    |  |   | (46,198    | ) |  |      | (3,507     | ) |  |   | 1,519      |  
|Interest income net                                                        |  |                                                                 | 6,855      |   |      |   | 2,961      |      |  |   | 716        |   |  |      | 268        |   |  |   | 428        |  
|Exchange gain (loss), net                                                  |  |                                                                 | (149       | ) |      |   | 523        |      |  |   | 771        |   |  |      | 79         |   |  |   | 197        |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Income (loss) before provision for income taxes                            |  |                                                                 | (32,190    | ) |      |   | (99,954    | )    |  |   | (44,711    | ) |  |      | (3,160     | ) |  |   | 2,144      |  
|Provision for income tax                                                   |  |                                                                 | (382       | ) |      |   | (85        | )    |  |   | (108       | ) |  |      |           |   |  |   | (123       | )
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Net income (loss)                                                          |  | $                                                               | (32,572    | ) |      | $ | (100,039   | )    |  | $ | (44,819    | ) |  | $    | (3,160     | ) |  | $ | 2,021      |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Basic net income (loss) per Ordinary Share                                 |  | $                                                               | (1.18      | ) |      | $ | (3.30      | )    |  | $ | (1.47      | ) |  | $    | (0.10      | ) |  | $ | 0.07       |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Shares used in computation of basic net income (loss) per Ordinary Share   |  |                                                                 | 27,704,705 |   |      |   | 30,341,559 |      |  |   | 30,559,410 |   |  |      | 30,314,419 |   |  |   | 30,786,268 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Diluted net income (loss) per Ordinary Share                               |  | $                                                               | (1.18      | ) |      | $ | (3.30      | )    |  | $ | (1.47      | ) |  | $    | (0.10      | ) |  | $ | 0.06       |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Shares used in computation of diluted net income (loss) per Ordinary Share |  |                                                                 | 27,704,705 |   |      |   | 30,341,559 |      |  |   | 30,559,410 |   |  |      | 30,314,419 |   |  |   | 32,361,102 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Basic net income (loss) per equivalent ADS                                 |  | $                                                               | (2.35      | ) |      | $ | (6.59      | )    |  | $ | (2.93      | ) |  | $    | (0.21      | ) |  | $ | 0.13       |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|ADSs used in computation of basic net income (loss) per equivalent ADS     |  |                                                                 | 13,852,353 |   |      |   | 15,170,780 |      |  |   | 15,279,705 |   |  |      | 15,157,210 |   |  |   | 15,393,134 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|Diluted net income (loss) per equivalent ADS                               |  | $                                                               | (2.35      | ) |      | $ | (6.59      | )    |  | $ | (2.93      | ) |  | $    | (0.21      | ) |  | $ | 0.12       |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  
|ADSs used in computation of diluted net income (loss) per equivalent ADS   |  |                                                                 | 13,852,353 |   |      |   | 15,170,780 |      |  |   | 15,279,705 |   |  |      | 15,157,210 |   |  |   | 16,180,551 |  
|                                                                           |  |                                                                 |            |   |      |   |            |      |  |   |            |   |  |      |            |   |  |   |            |  



4



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|                                 |  |                                |         |      |   |         |  |      |        |      |   |        |  |   |       
|-------------------------------- |  | ------------------------------ | ------- | ---- | - | ------- |  | ---- | ------ | ---- | - | ------ |  | - | ------
|                                 |  | January 31,                   
|                                 |  | 2001                           |         | 2002 |   | 2003    |  | 2004 |        | 2005
|                                 |  | (in thousands of U.S. dollars)
|Consolidated Balance Sheet Data: |  |                                |         |      |   |         |  |      |        |      |   |        |  |   |       
|Cash and cash equivalents        |  | $                              | 14,038  |      | $ | 6,750   |  | $    | 42,559 |      | $ | 36,864 |  | $ | 39,180
|Marketable securities            |  |                                | 87,388  |      |   | 47,976  |  |      |       |      |   |       |  |   |      
|Working capital                  |  |                                | 82,161  |      |   | 49,217  |  |      | 32,448 |      |   | 28,384 |  |   | 29,890
|Total assets                     |  |                                | 236,464 |      |   | 123,258 |  |      | 73,513 |      |   | 64,317 |  |   | 66,186
|Non-current liabilities          |  |                                | 3,437   |      |   | 4,082   |  |      | 1,875  |      |   | 682    |  |   |      
|Total shareholders equity       |  |                                | 187,360 |      |   | 90,431  |  |      | 45,083 |      |   | 41,354 |  |   | 43,146



See note 13 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 income (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
|2001 (from January 1, 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
|2005                          |  |      | 1.3625 |     |   | 1.1801         |  |            | 1.2476 |  |   | 1.3049



5



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|                               |  |        |  |       
|------------------------------ |  | ------ |  | ------
|Month                          |  | High   |  | Low   
|2004                           |  |        |  |       
|October                        |  | 1.2783 |  | 1.2271
|November                       |  | 1.3288 |  | 1.2703
|December                       |  | 1.3625 |  | 1.3224
|2005                           |  |        |  |       
|January                        |  | 1.3476 |  | 1.2954
|February                       |  | 1.3274 |  | 1.2773
|March                          |  | 1.3465 |  | 1.2877
|April (through April 29, 2005) |  | 1.3093 |  | 1.2819



On April 29, 2005, the
noon buying rate for the euro expressed in U.S. dollar per 1.00 was US$1.2919.



|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 demand for Chip and Pin electronic point-of-sale systems is expected to decline in fiscal 2006 after the implementation date for the
EMV standard of January 1, 2005.



Our product revenue
growth during fiscal 2005, particularly for our Smart 5000 Chip and Pin device, was primarily driven by an increase in demand for Chip and Pin solutions in the UK. This demand resulted from the introduction of the new EMV standard which mandated
that from January 1, 2005 there is a liability shift for fraudulent card based transactions to retailers who have not adopted an EMV compliant point-of-sale system such as Trintechs Smart 5000.



It is generally accepted that a substantial number of retailers have not
migrated to EMV compliant point-of-sale systems and there can be no assurance that such retailers will migrate as they may decide that the investment outweighs any savings they may make.



There can be no assurance that retailers will continue to migrate to Chip and Pin solutions and that a market for Chip and
Pin solutions will develop outside the UK. A slowdown in the migration of retailers to Chip and Pin compliant solutions or the failure of markets outside the UK to develop will have a material impact on the Companys revenues, gross margins and
operating results.



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). Plexus purchases many of its products and components from one or a limited number of suppliers. The Companys reliance on a single outsourced manufacturer, which in turn is reliant on a limited number of component
suppliers, involves significant risks, including:



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



6



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| |  |  | 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 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.



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.



Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and
increases our costs of compliance.



We are committed to
maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard have resulted in, and are likely to continue to result in, increased general and
administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. In addition, the new laws, regulations and standards regarding corporate governance may make it more difficult for
us to obtain director and officer liability insurance. Further, our board members, chief executive officer, and chief financial officer could face an increased risk of personal liability in connection with their performance of duties. As a result,
we may face difficulties attracting and retaining qualified board members and executive officers, which could harm our business.



If we fail to comply with new or changed laws or regulations and standards differ, our business and reputation may be harmed. Changing laws, regulations
and standards relating to accounting, corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and Nasdaq National Market rules are creating uncertainty for companies like ours. These new or changed
laws, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing
uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards.



In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 and the related regulations regarding our required assessment of
our internal controls over financial reporting and our external auditors audit of that assessment requires the commitment of significant financial and managerial resources. We



7



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have formed an internal control steering committee, engaged outside consultants and adopted a detailed project work plan to assess the adequacy of our
internal controls over financial reporting, remediate any control deficiencies that may be identified, and validate through testing that our controls are functioning as documented. Nonetheless, our independent auditors may be unable to issue
unqualified attestation reports on managements assessment on the operating effectiveness of our internal controls over financial reporting.



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 dollar. In particular, the value of the U.S. dollar to the euro and the pound 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 and the pound relative to other currencies could adversely affect the Companys business and results of operations. 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 and pound against the U.S dollar, the Companys margins could be negatively impacted
through at least the end of July 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 profit decreased, when reported in U.S. dollars in the Companys financial statements.



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



Some of the Companys products, particularly in the unattended payment market, are still in early stages of commercialization. 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.



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 Companys electronic PoS system products solely in Europe, and particularly in Germany. For fiscal 2005, the Companys customers in the UK and Germany accounted for over 90%
of the Companys electronic PoS system product revenues. We intend to continue to focus some 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. Any material reduction in demand for the Companys electronic PoS system products would adversely affect the Companys
business, financial condition and results of operations.



8



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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.



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. Furthermore, an economic slowdown may impact the revenues from the acquired businesses and 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. Furthermore, 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
| | - |  | ---------------------



9



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| |  |  | 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
| | - |  | ------------------------------------------------------------------



| |  |  | 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 the Company 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
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | service contracts in our transaction reconciliation business can be cancelled with 30 days notice
| | - |  | -------------------------------------------------------------------------------------------------



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 and services.



The markets for the Companys electronic payment software and transaction reconciliation software and services 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,



10



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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. In addition, if the Company fails to effectively respond to future changes in the rapidly developing markets in which it
operates, or if customers choose not to use our product, then the Companys business, cash flow, financial condition and results of operations could be materially adversely affected.



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. 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. An adverse resolution of these matters could materially adversely impact the Companys financial position and results of operations.



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, approximately
17% in fiscal 2004 and approximately 5% in fiscal 2005 excluding the acquisition of DataFlow Services. The headcount decreased by 7% and 6% in fiscal 2004 and fiscal 2005 respectively, including DataFlow Services. 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 terminations 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
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



11



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



| |  |  | public announcements concerning us, including announcements of litigation, loss of major customers, reduction or delay in orders by major customers or errors or defects in the
Companys products
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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 15% of the Companys total revenue for the three months ended January 31, 2005, was attributable to
the Companys three largest customers in the quarter. In fiscal 2005, 12% of total revenue was attributable to the Companys three largest customers in fiscal 2005. UK customers accounted for approximately 50% of the Companys top ten
customers largely due to the Chip and Pin migration in fiscal 2005. 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.



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. While we have been profitable for fiscal 2005, we may not be able to 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, in the future, 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 increase the Companys revenues to maintain quarterly profitability and a positive cash flow. We may not be able to generate sufficient revenues to sustain
profitability.



The Companys historical 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



12



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cash balance and our cash balance has increased in fiscal 2005, concerns about the Companys perceived financial viability were a factor in multiple
potential and actual customer transactions and partner relationships during fiscal 2003, fiscal 2004 and fiscal 2005. We attribute these concerns primarily to the following: we are not yet consistently profitable on a full fiscal year basis and thus
must use the Companys cash balance (offset by revenues) to fund the Companys operations and acquisition related cash requirements; the Companys stock price experienced a dramatic decline from 2000 to 2002; the Companys stock
price has been, and continues to be, 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
sustain profitability on a full fiscal year basis (which may not occur). We expect these concerns about the Companys ability to generate sufficient revenues to sustain profitability to continue throughout at least the end of fiscal 2006.



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.



Third parties have in the past, and may in the future claim that the Companys current or future products infringe their proprietary rights. For
example, in August 2004 a complaint was filed by Verve in the Northern District of California alleging that we, along with six other parties, had breached Verves intellectual property rights in relation to point of sale products. Verve sought
unspecified damages. Whilst this claim was dismissed, there can be no assurance that other parties will not make claims in the future. 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. Royalty or licensing agreements, if required, may not be available on terms acceptable to us or at all.



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, electronic PoS systems and transaction reconciliation solutions, is intensely competitive and we expect
competition to continue to increase. The Companys competitors include Dione, VeriFone, Ingenico, Hypercom and Thales/Krone for the Companys electronic PoS system products, and Transaction System Architects, Checkfree Valuelink, CardTech
Limited, Accurate Software and Chesapeake System Solutions for the Companys software products. Some competitors in the Companys market have longer operating histories, significantly greater financial, technical, sales, 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. Furthermore, 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 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 transaction reconciliation 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.



13



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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, terrorism 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
| | - |  | ---------------------------------------



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, fiscal 2004 and fiscal 2005, 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 2003, fiscal 2004 and fiscal 2005, the Companys success is also dependent on
some remaining key employees who are skilled in payment, funds management, transaction 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, banking and retail 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 payment, transaction reconciliation, payment reconciliation, exception and risk management, Internet and other technologies we currently employ. Competition
for experienced and 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 retaining existing personnel or in attracting and recruiting experienced and 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



14



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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 payment products may be adversely affected if
these standards do not achieve broad 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.



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, 5% of the
Companys total revenue in fiscal 2004 and 3% of the Companys total revenue in fiscal 2005. 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 focused 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 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 a breach. However, should a breach occur, we may not have adequate remedies to protect the
Companys rights in the Companys electronic payment and PoS system technology.



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.



15



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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.



The
Companys two 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 two 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. and U.K. 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.



16



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The Irish takeover rules, 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.



The provisions of the Irish takeover rules, 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 rules or Irish law 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.



In the future we may need to raise additional capital in order to remain competitive in the market for electronic payment solutions and transaction reconciliation 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.



17



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Our earnings will be adversely affected once we change our accounting policies with respect to the expensing of stock
options.



The Company does not currently deduct the
expense of employee stock option grants from the Companys income based on the fair value method. In December 2004, the Financial Accounting Standards Board issued FASB Statement No. 123 (revised 2004), Share-Based Payment requiring companies
to change their accounting policies to record as an expense the fair value of stock options issued to employees. We are required to adopt SFAS 123(R) beginning on February 1, 2006. The change in our accounting policy with respect to the treatment of
employee stock option grants will materially adversely affect our earnings.



|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. The Companys agent for service of process in the United States is CT Corporation System whose address is 350 North Saint Paul Street, Suite 2900, Dallas, Texas 75201.



During fiscal 2003, 2004 and 2005 we invested US$283,000, US$605,000 and
US$528,000, 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 reconciliation 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 reconciliation 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 retailers, financial institutions, payment processors and network operators globally. Through the Companys portfolio of feature-rich software products and electronic PoS systems, we offer solutions for use by retailers, financial
institutions, payment processors and network operators. 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 reconciliation
process.



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, 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 growth in cashless payments, financial institutions,



18



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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 card payments 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 for self service payment at locations such as petrol pumps, kiosks and vending machines, primarily in Europe. In the European Union
and Asia Pacific region, this mandate became effective in January 2005.



The advent of chip cards authenticated using a PIN increases opportunities for merchants to conduct transactions securely without an attendant being present. Industry segments who are early adopters of unattended payment technologies
include the fuel and kiosk/vending market segments.



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 system matches up with the deposits that are made at the bank and coordinated with general
ledger activity or related applications throughout the organization. For companies with multiple depositing locations or high volumes of card transactions, this manual process becomes quite labor intensive. This manual process results in high costs
to the organization in terms of people, errors, lengthy cycle times, and fails to provide adequate 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.



There is significant cost involved in manual deposit reconciliation:



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



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



| |  |  | Lengthy cycle times cause unnecessary delays in financial reporting
| | - |  | -------------------------------------------------------------------



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



19



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| |  |  | 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 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 is being mandated by the card associations within individual regions to combat
counterfeit cards. The widespread implementation of Chip and Pin is likely to lead to fraud migration to cardholder-not-present (CNP) environments such as call centres, mail order and the Internet. We believe that the higher incidence of fraud and
repudiation in CNP 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 an 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.



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 2004 sales estimated at US$55 billion, according to the Tower Group . 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.



20



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The Trintech Solution



We are a leading provider of transaction reconciliation and payment infrastructure 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 reconciliation 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 payment solutions that allow customers to process transactions in the physical world and over the
Internet as well as secure transaction reconciliation solutions to manage all types of receipts and payments.



Flexible Range of Solutions.The Companys suite of products provides flexible payment and transaction reconciliation solutions to retailers,
financial institutions, payment processors, healthcare providers and network operators globally. 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 Transaction Reconciliation and Payment Infrastructure Industries. We believe the Companys 18 years of experience in both the
payments and transaction reconciliation 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 with our customers, banks and other service providers in the
industry.



Trintechs Growth Strategy



The Companys mission is to be a leading worldwide provider of
secure payment infrastructure and transaction reconciliation 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 18 years of experience in developing
innovative, secure payment and transaction reconciliation solutions for markets where we believe we can leverage our existing and new product set. A major focus of our development efforts are in enhancing the functionality and use of our existing
products set to meet market needs, including migration to Chip and Pin. In fiscal 2005 we also released a number of new products, including the launch of an electronic giftcard solution for Retailers, a Secure Wireless Solution which enabled Chip
and Pin for the Restaurant and Hospitality Sector and OpenPay 2000, a GPRS-enabled prepay top-up solution for vending environments.



21



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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 Reconciliation Software. We were one of the first software
companies to adopt both the SET, SSL and EMV standards for 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 Paymentech, Sterling
Commerce, FiservFreedom, Technolab, Spectrum, Retail Business Solutions, Wincor Nixdorf, Torex Retail, 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 maintain a leading brand name, with Trintech PayWare , in the payment and transaction reconciliation 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, openpaynews.com, 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 reconciliation 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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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                                                                                      |  | 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 PayWare GiftCard Compact PoS Systems and PinPads Smart 5000 PayWare OpenPay UPT 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 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 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
| | - |  | ------------------------------------------------------------------------------------



23



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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 reconciliation tool
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



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



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



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 reconciliation 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)
| | - |  | ------------------------------------------------------------------



| |  |  | supports CNP fraud prevention initiatives for payer authentication
| | - |  | ------------------------------------------------------------------



| |  |  | PayWare ReconNET provides a comprehensive transaction management, account reconciliation and risk management solution for merchants, banks, utilities,
telecommunications 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



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| |  |  | 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 and unattended 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
| | - |  | ------------------------------------------



| |  |  | 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:
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | allows retailers and specialist gift card providers to cost effectively design, launch and operate an end-to-end electronic gift card program in-house
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provides a broad range of configurable parameters and an easy to use interface
| | - |  | ------------------------------------------------------------------------------



| |  |  | helps retailers to design unique gift card products both quickly and easily
| | - |  | ---------------------------------------------------------------------------



| |  |  | 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
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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
allow 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
| | - |  | --------------------------------------------



25



---

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



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



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



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



| |  |  | Compact 9400i GPRSis a 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 magnetic swipe 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 UPT is a range of unattended payment terminals designed to enable payments in a range of unattended environments including: pay-at-pump systems, ticketing,
vending machines, kiosks, parking machines and self-scanning checkouts in the retail industry. At the heart of the OpenPay UPT range is a secure payment module that can be supplied to Original Equipment Manufacturer (OEM) customers to payment enable
a wide range of devices. Key features of the OpenPay UPT range 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 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, top-up, EMV and PIN.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



26



---

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 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. The Company offers 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 solutions.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Configuration and implementation services. The Company provides services to configure and customize the Companys solutions to meet the customers particular needs
and to integrate the Companys products into customers 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++, C#, COBOL, Smalltalk, Power Builder.net 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.
Where appropriately deployed this functionality 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 payment and
transaction reconciliation 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.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



---

Customers



We have a customer base of over 1,100 banks, financial transaction processors, card associations, card companies, payment
service providers, merchants and technology companies. From inception through January 31, 2005, we had shipped over 288,000 electronic PoS systems and over 8,227 licenses of secure payment and transaction reconciliation software. Our top revenue
generating customers in fiscal 2005, by customer segment, are as follows:



|                                 |  |                                   
|-------------------------------- |  | ----------------------------------
|Financial Transaction Processors |  | Merchants                         
|Bankart                          |  | Aldi Stores Ltd                   
|Bank of America                  |  | Alphameric Retail Limited         
|Barclaycard                      |  | Argos Limited                     
|Citibank                         |  | Debenhams Retail Plc              
|Halifax Bank of Scotland         |  | Matalan Retail Ltd                
|Takinfo KFT                      |  | Next plc                          
|Tatra                            |  | Phones4U Ltd                      
|Telekurs Card Solutions          |  | Regis                             
|Woolwich Plc                     |  | The Vanguard Group                
|                                 |  | TradePro Operations Ltd           
|                                 |  | Whitbread Group plc               
|                                 | 
|PrePay Processors                |  | Point-of-sale Processors          
|Deutsche Telekom AG T-Com        |  | CardTech Card and POS Service GmbH
|EVS GmbH                         |  | CCV-Allcash GmbH                  
|                                 |  | Deutsche Verkehrs Bank Zentrale   
|                                 |  | Dresser Wayne Europe GmbH         
|                                 |  | Fiducia Cash                      



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 UK, which represented 36% (2004:24%) of the Companys total revenue in fiscal 2005. This was due to an
increase in demand for Chip and Pin solutions. The UK replaced the USA as the Companys principal market in fiscal 2005. The USA represented 35% (2004:44%) of the Companys total revenue in fiscal 2005.



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 97% of the Companys total revenues in fiscal 2005. At January 31, 2005, we employed 33 direct sales people who primarily target card associations, banks, financial transaction processors, telecommunications operators, large
merchants and network operators.



28



---

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 Sterling Commerce, Fiserv- Freedom, Paymentech and Technolab that we believe offer us a number of
competitive advantages. The following describes the Companys current indirect sales channel relationships:



SBCSterling Commerce. The Companys current distribution partnership with SBC gives SBC 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.



Technolab. The Companys current distribution partnership with Technolab gives Technolab the non-exclusive right to market, implement
and support ReconNET in Mexico and Puerto Rico.



Spectrum. The Companys current distribution partnership with Spectrum gives Spectrum the non-exclusive right to market, implement and support ReconNET in Australia and New Zealand.



Retail Business Solutions. The Companys current
distribution partnership with Retail Business Solutions gives Retail Business Solutions the non-exclusive right to distribute Trintechs Payment Solutions, including Chip and Pin PoS Products, PayWare EMS and PayWare Merchant to retailers
within the U.K. The companies have also entered into a referral agreement for Trintechs PayWare GiftCard Product.



Wincor Nixdorf. The Companys current agreement with Wincor Nixdorf gives Wincor Nixdorf the non-exclusive right to distribute
Trintechs Payment Solutions including Chip and Pin PoS Products, PayWare (EMS) and PayWare Merchant to retailers and banks within the U.K.



Torex Retail. The Companys current distribution partnership with Torex Retail gives Torex Retail the non-exclusive right to distribute
Trintechs complete portfolio of Chip and Pin Solutions including the Smart 5000 terminal and PayWare EMS within the U.K.



Research and Development



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 reconciliation products and services
| | - |  | ---------------------------------------------------------------



29



---

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



| |  |  | London, United Kingdom: electronic PoS systems, stored value products and merchant payment software
| | - |  | ---------------------------------------------------------------------------------------------------



For the fiscal years 2005 and 2004 approximately 16% and 19% of the
Companys revenues respectively, were dedicated to research and development expenses. Research and development expenses for fiscal 2005 and fiscal 2004 totaled US$10.3 million and US$8.3 million, respectively. The increase in research and
development expenses in fiscal 2005 was primarily due to additional investment in new and existing products and due to the impact of the declining value of the dollar as against the euro and the pound, which was partially offset by a reduction in
the number of research and development employees from 136 at January 31, 2004 to 114 at January 31, 2005. For example, as a significant portion of the Companys research and development costs are denominated in euro and pounds, the
increase in value of the euro and pound relative to the dollar has had the impact of increasing research and development expenditure in dollar terms.



Manufacturing



We outsource the fabrication, testing and packaging of the Companys electronic PoS system products to Plexus, 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 are located in the United Kingdom.



We maintain a manufacturing management team that oversees the manufacture of
the products by Plexus 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
reconciliation industries are highly competitive, and we expect competition to increase as other companies introduce electronic PoS system products and payment and transaction reconciliation software and services. 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.



30



---

In secure payment and transaction reconciliation software markets, the competitive landscape varies by
product line. There is no competitor that we compete with across all product lines. We compete with Transaction System Architects (TSAI), Checkfree, Pegasystems, ValueLink, Card Tech Limited, Accurate Software 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.



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. In particular cases, however, 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 lower cost than us.



Several of the Companys competitors have significantly greater financial, technical, sales 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         
|                                                                                      |  |                        
|High security anti-tamper technology incorporated in pin pad                          |  | Ireland                 |  | 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.



31



---

These issued patents and the pending patent applications cover key areas of the Companys 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 18 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.



32



---

Actipay Limited, 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 Actipay Limited is 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 and transaction reconciliation software.



Trintech Group Finance Limited, a wholly-owned subsidiary, is a
limited liability company having a share capital 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 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 and transaction reconciliation 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., formally a wholly-owned subsidiary, was dissolved on August 31, 2004. All of
the outstanding capital stock of J Driscoll & Associates Inc. was owned by the Company. The principal activity of J Driscoll & Associates Inc. was the development and sale of transaction reconciliation 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 European development center and the Companys principal 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. The Company also has offices for development, sales and marketing personnel in Frankfurt, Germany; Dallas, Texas; London, England; and
Montevideo, Uruguay. The facility in Miami, Florida is subleased to third parties.



33



---

As at January 31, 2005 we leased the facilities described below:



|                                   |  |               |  |                    |  |            |  |                        |  |                               
|---------------------------------- |  | ------------- |  | ------------------ |  | ---------- |  | ---------------------- |  | ------------------------------
|Description                        |  | SquareFootage |  | Used byThe Company |  | Sub-leased |  | AvailableFor sub-lease |  | Earliest leasetermination date
|Ireland                            |  |               |  |                    |  |            |  |                        |  |                               
|DublinFacility 1                  |  | 22,565        |  | 22,565             |  |            |  |                        |  | 2006                          
|DublinFacility 2                  |  | 29,400        |  | 9,067              |  | 20,333     |  |                        |  | 2009                          
|DublinFacility 3 (Montague Court) |  | 8,500         |  |                    |  |            |  | 8,500                  |  | 2014                          
|                                   |  |               |  |                    | 
|USA                                |  |               |  |                    |  |            |  |                        |  |                               
|Dallas Facility 1                  |  | 22,000        |  | 22,000             |  |            |  |                        |  | 2006                          
|Dallas Facility 2                  |  | 5,019         |  | 5,019              |  |            |  |                        |  | 2005                          
|Miami                              |  | 1,210         |  |                    |  | 1,210      |  |                        |  | 2005                          
|                                   |  |               |  |                    | 
|United Kingdom Facility 1          |  | 9,935         |  | 9,935              |  |            |  |                        |  | 2005                          
|United Kingdom Facility 2          |  | 1,600         |  |                    |  | 1,600      |  |                        |  | 2009                          
|                                   |  |               |  |                    | 
|Germany                            |  | 4,014         |  | 4,014              |  |            |  |                        |  | 2007                          
|                                   |  |               |  |                    | 
|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. The Company
undertakes no obligation to update publicly any forward-looking statements in this Form 20-F.



From the Companys organization through 1995, the Company developed and marketed electronic PoS systems and payment software for payment card transactions in the physical world. In early fiscal 1997, the Company
launched the Companys first products for Internet payment transactions. Following early success in the Internet 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. 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



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2002. Restructuring costs of approximately US$5.3 million in fiscal 2002, US$4.3 million in fiscal 2003, US$745,000 in fiscal 2004 and US$288,000 in fiscal
2005 were incurred in respect of involuntary staff terminations and abandoned lease payments.



The growth in eCommerce had led 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 reconciliation 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 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 reconciliation 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 expand the Companys product offering in the transaction
reconciliation 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 Services, 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. As of
January 31, 2005, DataFlow Services employed 30 staff and serviced approximately 130 customers. Trintech recognizes revenue generated from the acquired DataFlow Services products as services revenue. The transaction reconciliation business is
expected to grow both domestically and internationally in fiscal year 2006.



To expand the functionality of its transaction reconciliation products, the Company announced the release of ReconNET 7.0 in September 2004, the latest version of its leading industry-standard reconciliation and
account balancing system. The release added new features that extended its existing financial controls and reporting capabilities to facilitate audits and increase customers compliance with regulatory requirements such as the Sarbanes-Oxley
Act of 2002. ReconNET 7.0 also included a number of enhancements that further increased the systems ease of use for daily reconciliation, research and period-end reporting.



In tandem with the growth in transaction reconciliation solutions, the planned introduction of the EMV standard in January
2005 started to generate early demand for new PoS solutions. In response to this emerging growth opportunity, the Company has focussed a significant proportion of its development efforts on designing PoS systems that satisfy the EMV standard. The
strong UK market for Chip and Pin solutions in fiscal 2005 is expected to decline in fiscal 2006 as migration to meet the EMV January 1, 2005 deadline passes. We expect this decline in demand for the EMV solutions to be partially offset by expanding
continental European demand and growth in the Unattended Payment market.



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. In February 2004, Trintech announced the launch of
SmartPIN LINK, a technology which, among other things, enables a wireless Chip and Pin solution for restaurants and the hospitality sector.



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The growth in card-based transactions has led to growth in the market for electronic GiftCard Solutions.
In February 2004, the Company announced the launch of its PayWare Giftcard Solution, which allows merchants to set-up and run their own Gift Card Programs in-house.



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



Product Revenue. Product revenue, which represented 34% of the
Companys total revenue in fiscal 2005, is derived from sales of the Companys electronic PoS system products, primarily the Compact 9000 family of PoS devices, the Compact 950-PP Pin Pad and the Smart 5000 Pin Pad.



License Revenue. Software license revenue, which represented 42% of
total revenue in fiscal 2005, is derived from license fees from the Companys payment software products for payment card transactions and from the Companys transaction reconciliation software, and the provision of related support and
maintenance services to customers. Customer support and maintenance fees are established as a percentage of the software license price, typically ranging from 18% to 24% per year, and are generally paid quarterly. The Company also licenses the
Companys software on a recurring rental basis.



Service Revenue. The Company derives service revenue, which represented 24% of total revenue in fiscal 2005, from consulting services, educational and training services and customization and implementation services. The Company also
recognizes revenue generated from the acquired DataFlow products as services revenue.



Total revenue from customers in the United Kingdom was US$20.0 million in fiscal 2005, US$10.5 million in fiscal 2004 and US$6.4 million in fiscal 2003. This represented approximately 36% of total revenue in fiscal
2005, 24% of total revenue in fiscal 2004 and 15% of total revenue in fiscal 2003. Total revenue from customers in the United States was US$19.7 million in fiscal 2005, US$18.9 million in fiscal 2004 and US$17.5 million in fiscal 2003. This
represented approximately 35% of total revenue in fiscal 2005, 44% of total revenue in fiscal 2004 and 41% of total revenue in fiscal 2003. Total revenue from customers located in Germany was US$10.6 million in fiscal 2005, US$6.9 million in fiscal
2004 and US$8.2 million in fiscal 2003. This represented approximately 19% of total revenue in fiscal 2005, 16% of total revenue in fiscal 2004 and 19% of total revenue in fiscal 2003.



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.



The Company operates 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 the
Company reports 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-based compensation.



36



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The Company has significant operations and generates 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.



The Company currently anticipates that it 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, primarily the U.S. dollar with the euro and the pound, 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, the Company recognized exchange gains of US$197,000, US$79,000 and US$771,000 in fiscal 2005, 2004 and 2003 respectively. From time to time the Company has 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. The Company expects 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.



We are required to adopt Statement of Financial Accounting Standards No. 123(R) Accounting for Stock-Based Compensation, no later than our
fiscal year beginning on February 1, 2006. We anticipate that upon adoption, the stock-based compensation expense appearing on the Companys consolidated statement of operations will significantly increase and will have a material adverse
impact on the Companys operating results.



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,
2005, 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 paid an additional final amount of US$125,000 on the achievement of agreed performance criteria during fiscal 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$1.1 million. 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



37



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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.



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 an 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$12.8 million for the year ended January 31, 2003, in connection with these acquisitions, more fully described below in Results of Operations on page 43 and in Note 21
of the Notes to the Consolidated 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 is required to pay additional performance related contingent consideration equal to 50% of profits, as defined in the purchase agreement, earned by
the acquired business for fiscal 2005 and fiscal 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 and will have no effect on our statement of operations.
The fiscal 2005 performance related consideration of US$1.2 million was paid in the quarter ended April 30, 2005. Separately, in November 2003, the former shareholder 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.



During fiscal 2005 in connection
with a lease termination settlement relating to the Companys Austin facility, the Company recorded an adjustment, which reduced acquisition liabilities by US$249,000. 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 adjustment of acquisition liabilities was recognized in the consolidated statement of operations in the three months
ended April 30, 2004.



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. The Company believes
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.



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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 Commissions 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 production, modification or customization of the software, the
Company recognizes 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 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. The Company obtains VSOE for maintenance from substantive renewal rates based on consistent percentages of the license fee.



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



39



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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.



Significant management judgments and estimates must be made in connection with determination of the revenue to be recognized in any accounting period. If
the Company 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. The Company maintains an allowance for doubtful accounts at an amount the Company estimates 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 the Company assesses 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, the Company records a specific allowance against amounts due, and thereby reduces the net recognized receivable to the amount we reasonably believe
will be collected. For the remaining customers, the Company recognizes 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, the Company would reduce related estimated reserves with a credit to the provision for doubtful accounts.



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.



Accounting for Income Taxes.Deferred income taxes are recognized based on temporary timing differences between the financial statement and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected
to apply to taxable income in the years in which temporary differences are expected to reverse. Valuation allowances are provided against the net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependant upon the generation of future taxable income and the timing of the temporary differences becoming deductible. Management considers, among
other available information, scheduled reversals of deferred tax liabilities, projected future taxable income and other matters in making this assessment.



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.



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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. 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, (1) significant under performance relative to historical or expected operating results, (2) significant changes in the manner of use of the acquired assets or the
strategy for the Companys overall business, (3) significant negative industry or economic trends, (4) a significant decline in the Companys stock price for a sustained period, and (5) 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 tests for 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
goodwill impairments of US$36,540,000 and US$12,849,000 for fiscal 2002 and 2003, respectively. No impairments were recognized for fiscal 2004 and 2005.



The Company also assesses the impairment of long-lived assets, in accordance with SFAS No. 144, Accounting for the Impairment of Disposal of
Long-Lived Assets on a periodic basis. SFAS 144 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. For the purpose of SFAS No. 144, impairment is the condition that exists when the carrying value of a long-lived asset exceeds its fair value. An impairment loss shall be
recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.



Factors the Company considers important which could trigger an impairment review include, but are not limited to, (1) increased customer competition, (2)
significant changes in the manner of use of the acquired assets or the strategy for the Companys overall business and (3) significant negative industry or economic trends. When the Company determines that an impairment review of other
long-lived intangible assets is required, the Company tests for impairment using a projected undiscounted cash flow model.



The Company recognized other non-current asset impairments, principally a non-compete covenant and purchased technology, of US$3.7 million for fiscal
2003. No further impairments were recognized were recognized for fiscal 2004 and 2005.



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 units currently under warranty, historical and anticipated rates of warranty claims on those units, and estimated 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



41



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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.



Recent Accounting Pronouncements



In July 2004, the FASB ratified EITF consensus on Issue No. 02-14,
Whether an Investor Should Apply the Equity Method of Accounting to Investments Other Than Common Stock, which provides guidance regarding application of the equity method of accounting to investments other than common stock. EITF Issue
No. 02-14 will be effective beginning with our second quarter of fiscal 2006. We do not believe the adoption of EITF Issue No. 02-14 will have a material impact on the Companys consolidated financial statements.



In December, 2004, the FASB issued SFAS No. 123 (revised 2004),
Share-Based Payment (SFAS 123(R)), which is a revision of SFAS 123. SFAS 123(R) supersedes APB No. 25, and amends SFAS 95, Statement of Cash Flows. Generally the approach in SFAS 123(R) is similar to the approach
described in SFAS 123. SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Pro forma disclosure, is no longer an
alternative upon adoption of SFAS 123(R).



For Trintech, SFAS
123(R) must be adopted no later than the fiscal year beginning on February 1, 2006. Early adoption is permitted in periods in which financial statements have not yet been issued. SFAS 123(R) allows companies to adopt its requirements using one of
two methods:



| |  |  | A modified prospective method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based
payments granted after the effective date and (b) based on the requirements of SFAS 123(R) for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A Prospective method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts
previously recognized under SFAS 123(R) for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company has not yet decided on which method it will adopt. Pro Forma disclosure currently required under SFAS 123 is
included in Note 1 Stock-Based Compensation. The Company expects that the adoption of SFAS 123(R) will have a materially adverse affect on operations.



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|A. | 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, |   
|                                                       |  | 2003                   |    |  | 2004 |    |  | 2005 |  
|Revenue:                                               |  |                        |    |  |      |    |  |      |  
|Product                                                |  | 22                     | %  |  | 24   | %  |  | 34   | %
|License                                                |  | 52                     |    |  | 53   |    |  | 42   |  
|Service                                                |  | 26                     |    |  | 23   |    |  | 24   |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Total revenue                                          |  | 100                    |    |  | 100  |    |  | 100  |  
|Cost of revenue:                                       |  |                        |    |  |      |    |  |      |  
|Product                                                |  | 26                     |    |  | 18   |    |  | 24   |  
|License                                                |  | 21                     |    |  | 12   |    |  | 7    |  
|Service                                                |  | 20                     |    |  | 14   |    |  | 10   |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Total cost of revenue                                  |  | 67                     |    |  | 44   |    |  | 41   |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Gross margin                                           |  | 33                     |    |  | 56   |    |  | 59   |  
|Operating expenses:                                    |  |                        |    |  |      |    |  |      |  
|Research and development                               |  | 24                     |    |  | 19   |    |  | 16   |  
|Sales and marketing                                    |  | 24                     |    |  | 20   |    |  | 17   |  
|General and administrative                             |  | 36                     |    |  | 25   |    |  | 21   |  
|Restructuring charge                                   |  | 10                     |    |  | 2    |    |  | 1    |  
|Amortization of purchased intangible assets            |  | 6                      |    |  | 1    |    |  | 2    |  
|Impairment of goodwill and purchased intangible assets |  | 39                     |    |  |     |    |  |     |  
|Adjustment of acquisition liabilities                  |  | 2                      |    |  |     |    |  | (1   | )
|Adjustment of acquisition deferred consideration       |  |                       |    |  | (3   | )  |  |     |  
|Stock-based compensation                               |  | 0                      |    |  |     |    |  | 0    |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Total operating expenses                               |  | 141                    |    |  | 64   |    |  | 56   |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Income (loss) from operations                          |  | (108                   | )  |  | (8   | )  |  | 3    |  
|Other expenses:                                        |  |                        |    |  |      |    |  |      |  
|Interest income, net                                   |  | 2                      |    |  | 1    |    |  | 1    |  
|Exchange gain, net                                     |  | 2                      |    |  | 0    |    |  | 0    |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Income (loss) before provision for income taxes        |  | (104                   | )  |  | (7   | )  |  | 4    |  
|Provision for income taxes                             |  |                       |    |  |     |    |  | 0    |  
|                                                       |  |                        |    |  |      |    |  |      |  
|Net income (loss)                                      |  | (104                   | )% |  | (7   | )% |  | 4    | %
|                                                       |  |                        |    |  |      |    |  |      |  



Fiscal Year Ended January 31, 2005
Compared To Fiscal Year Ended January 31, 2004



|                |  |                             |  |                            |  |                         |  |                                   |  
|--------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- |  | --------------------------------- | -
|Revenue         |  | Year ended January 31,2005  |  | Year ended January 31,2004 |  | Increase fromprior year |  | Percentage change from prior year |  
|                |  | (U.S. dollars in thousands) |  |                            | 
|Product Revenue |  | 18,848                      |  | 10,318                     |  | 8,530                   |  | 83                                | %
|License Revenue |  | 23,567                      |  | 22,867                     |  | 700                     |  | 3                                 | %
|Service Revenue |  | 13,380                      |  | 9,886                      |  | 3,494                   |  | 35                                | %
|                |  |                             |  |                            |  |                         |  |                                   |  
|Total Revenue   |  | 55,795                      |  | 43,071                     |  | 12,724                  |  | 30                                | %
|                |  |                             |  |                            |  |                         |  |                                   |  



43



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Revenue



Total Revenue. There was no customer which accounted for greater than 10% of the Companys total revenue in
fiscal 2005 and 2004.



Product. The increase was
attributable to strong 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), which is expected to decline in fiscal 2006 after
the implementation date for the EMV standard on January 1, 2005. Demand from the German EFT market also recovered during fiscal 2005.



License. The increase in revenue was primarily due to the inclusion of revenue from Symbol Technologies, Inc. (Symbol). During the three months
ended October 31, 2004, due to a change in strategy by Symbol, the Company renegotiated an agreement with Symbol under which Trintech agreed to terminate Symbols future obligations to exclusively use the Companys payment technology in
return for a payment of US$2 million, to be paid equally over the five quarters ending October 31, 2005. The first payment was received in October 2004. Based on the terms of the agreement, the Company will recognize the revenue as license revenue
as each payment becomes due.



Other license revenues showed no
change on the prior year. This was due to a reduction in revenue from products no longer actively sold by us, being offset by revenue derived from products where the company believes there are profitable growth opportunities, principally in the Chip
and Pin and transaction reconciliation markets. Whilst the slower investment decisions and longer sales cycles are still being experienced in some markets, we believe that the underlying strength in the retail market is providing a catalyst for IT
spending and investment.



Service. The increase in
revenue was primarily due to the inclusion of post acquisition revenues generated by DataFlow Services, from November 1, 2003, the date of acquisition.



Cost of Revenue



|                |  |                             |  |                            |  |                                    |   |  |                                   |   
|--------------- |  | --------------------------- |  | -------------------------- |  | ---------------------------------- | - |  | --------------------------------- | --
|Cost of revenue |  | Year ended January 31,2005  |  | Year ended January 31,2004 |  | Increase/(decrease)from prior year |   |  | Percentage change from prior year |   
|                |  | (U.S. dollars in thousands) |  |                            |  |                                   
|Product         |  | 13,088                      |  | 7,586                      |  | 5,502                              |   |  | 73                                | % 
|License         |  | 3,725                       |  | 5,313                      |  | (1,588                             | ) |  | (30                               | %)
|Service         |  | 5,812                       |  | 6,020                      |  | (208                               | ) |  | (3                                | %)
|                |  |                             |  |                            |  |                                    |   |  |                                   |   
|Total           |  | 22,625                      |  | 18,919                     |  | 3,706                              |   |  | 20                                | % 
|                |  |                             |  |                            |  |                                    |   |  |                                   |   



Total Cost of
Revenue. The increase in absolute dollars and the decrease as a percentage of total revenue resulted from an increase in product volume sales and a change in the product mix, the inclusion of revenue from Symbol, a reduction in both labor costs
and infrastructure as a result of the continued consolidation of our support and maintenance facilities, a reduction in amortization of acquired technology, the inclusion of post acquisition revenue and costs generated by DataFlow Services, and the
declining value of the dollar against the euro and the pound.



Product. The increase in absolute dollars and the decrease as a percentage of product revenue, resulted from the higher volume sales and a change in the product mix in fiscal 2005. Greater volume sales of higher margin product were
sold in fiscal 2005 compared to fiscal 2004. In addition, the declining value of the dollar against the euro and the pound also contributed to the increase in absolute dollars during fiscal 2005. For example, the cost of manufacturing the
Companys electronic PoS systems are denominated in euro and the pound. The decrease in value of the U.S. dollar relative to these currencies has had a negative impact on the Companys cost of product revenues during fiscal 2005.



44



---

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 consolidation of our support and maintenance facilities during fiscal 2003 and to a lesser extent fiscal 2004 and fiscal 2005, and due to a reduction in amortization
of acquired technology. The reduction in amortization of acquired technology of US$1.1 million was due to no fiscal 2005 impairment charge being required as the acquired technology asset was fully written down in fiscal 2004.



Service. The decrease in absolute dollars and as a percentage of
service revenue resulted primarily from involuntary staff terminations during fiscal 2005. The decrease was partially offset by the inclusion of costs incurred by the inclusion of DataFlow Services, from November 1, 2003, the date of
acquisition.



Operating Expenses



|                           |  |                             |  |                            |  |                         |  |                                   |  
|-------------------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- |  | --------------------------------- | -
|                           |  | Year ended January 31,2005  |  | Year ended January 31,2004 |  | Increase fromprior year |  | Percentage change from prior year |  
|                           |  | (U.S. dollars in thousands) |  |                            | 
|Research and Development   |  | 9,169                       |  | 8,280                      |  | 889                     |  | 11                                | %
|Sales and Marketing        |  | 9,473                       |  | 8,689                      |  | 784                     |  | 9                                 | %
|General and Administrative |  | 12,007                      |  | 10,587                     |  | 1,420                   |  | 13                                | %



Research and
Development. The increase in research and development expenses in fiscal 2005 was primarily due to additional investment in new and existing products and due to the impact of the declining value of the U.S. dollar as against the euro and the
pound, which was partially offset by a reduction in the number of research and development employees from 136 at January 31, 2004 to 114 at January 31, 2005. For example, as a significant portion of the Companys research and development costs
are denominated in euro and pounds, the increase in value of the euro and pound relative to the U.S. dollar has had the impact of increasing research and development expenditure in dollar terms.



Sales and Marketing. The increase in sales and marketing expenses in
fiscal 2005 was primarily due to an increase in commission caused by the increase in revenue, an increase in marketing expenditure due to additional investment in new and existing products and markets, the inclusion of costs incurred by DataFlow
Services, from November 1, 2003, the date of acquisition and due to the impact of the declining value of the U.S. dollar as against the euro and the pound. For example, as a significant portion of the Companys sales and marketing costs are
denominated in euro and pounds, the increase in value of the euro and pound relative to the U.S. dollar has had the impact of increasing sales and marketing expenditure in dollar terms.



General and Administrative. The increase in general and administrative expenses for fiscal 2005 was due to higher
legal costs and the inclusion of costs incurred by DataFlow Services, from November 1, 2003, the date of acquisition. In addition, the increase was impacted by the declining value of the U.S. dollar as against the euro and the pound. For example, as
a significant portion of the Companys general and administrative costs are denominated in euro and pounds, the increase in value of the euro and pound relative to the U.S. dollar has had the impact of increasing general and administrative
expenditure in dollar terms.



Restructuring charge. The
Company recorded restructuring charges of US$288,000 and US$745,000 in fiscal 2005 and 2004, respectively.In fiscal 2004, restructuring charges related to costs associated with staff terminations in connection with the research and
development facilities in Uruguay and Ireland, as the Company reduced investment in products where the market opportunity had not yet developed, or the market had not expanded, due to economic conditions. In connection with these activities the
Company reduced its workforce by 35 people. The restructuring charge in fiscal 2005 primarily related to staff terminations in connection with a research and development facility in Uruguay and excess sales and marketing employees in Ireland and the
U.S. In connection with these activities the Company reduced its workforce by 18 employees. As of January 31, 2005, accrued restructuring charges related to future lease commitments of US$32,000 and staff terminations of US$36,000, which will be
paid through fiscal 2006.



45



---

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 and fiscal 2004. Amortization of purchased intangible assets was US$847,000 in fiscal 2005 compared to US$507,000 in fiscal 2004,
an increase of 67%. The increase was due to the inclusion of amortization in connection with the acquisition of DataFlow Services, from November 1, 2003, the date of acquisition.



Amortization of acquisition liabilities.During fiscal 2005 in connection with a lease termination settlement
relating to the Companys Austin facility, the Company recorded an adjustment, which reduced acquisition liabilities by US$249,000. 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 adjustment of acquisition liabilities is recognized in the consolidated statement of operations in the three months ended April 2004.



Impairment of goodwill and purchased intangible assets.During the
fourth quarters of fiscal 2004 and fiscal 2005, 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 intangible assets were not impaired as of January 31, 2004 and January 31, 2005.



Adjustment of acquisition deferred consideration. There was no adjustment of acquisition deferred consideration in fiscal 2005. Adjustment of
acquisition deferred consideration was US$1.1 million in fiscal 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 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 fiscal 2005, the Company paid an additional final amount of US$125,000 which was contingent on the achievement of agreed performance criteria. The amended agreement reduced the consideration from US$11.4 million to approximately
US$10.3 million, a reduction in deferred consideration of US$1.1 million.



Stock-based Compensation. In fiscal year 2005, we recorded stock-based compensation expense of US$116,000 primarily related to the Companys Advisory Board. The Company issued options to purchase 88,000 of
the Companys Ordinary Shares (44,000 equivalent ADSs) at an exercise price of US$2.63 (US$5.25 per equivalent ADS) granted at fair market value on the date of grant. The options were treated as non-employee stock-based compensation under
Statement of Financial Accounting Standards No. 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-based compensation for the period was measured as the fair market value of the option, determined using the Black-Scholes method on the grant date multiplied by the number of options. The
option grants vested immediately, resulting in the full stock-based compensation expense relating to these options being recognized in the three months ended April 30, 2004.



Interest Income, Net. Interest income, net consists of interest income and interest expense. Interest income, net
increased by US$160,000 to US$428,000 in fiscal 2005 compared to US$268,000 of interest income, net in fiscal 2004. The increase was due to higher cash balances on hand and increased U.S. interest rates being available on deposit balances in fiscal
2005.



Provision for Income Taxes. Provision for Income
Taxes was US$123,000 in fiscal 2005. There was no provision for Income Taxes in fiscal 2004. The expense relates primarily to taxes payable in the US, UK and German tax jurisdictions.



46



---

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



|                |  |                             |  |                            |  |                                    |   |  |                                   |   
|--------------- |  | --------------------------- |  | -------------------------- |  | ---------------------------------- | - |  | --------------------------------- | --
|Revenue         |  | Year ended January 31,2004  |  | Year ended January 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                                 | % 
|                |  |                             |  |                            |  |                                    |   |  |                                   |   



Revenue



Total Revenue. In fiscal years 2004 and 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.



License. The Company maintained its revenue from payment and
transaction reconciliation 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 sought to maximize the return on investment in building the intellectual property in its product set.



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 saw 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 DataFlow Services,
from November 1, 2003, the date of acquisition.



Cost of
Revenue



|                |  |                             |  |                            |  |                         |   |  |                                   |   
|--------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- | - |  | --------------------------------- | --
|Cost of revenue |  | Year ended January 31,2004  |  | Year ended January 31,2003 |  | Decrease fromprior year |   |  | 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 fiscal year 2003.



47



---

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 recorded in fiscal 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 U.S. dollar as against the euro and the pound, during fiscal 2004. For example, the cost of
manufacturing the Companys electronic PoS systems are denominated in euro and pound. The decrease in value of the U.S. dollar 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 as a percentage of service revenue resulted primarily from involuntary staff terminations during the year. The decrease was partially offset by the inclusion of
costs incurred by the inclusion of DataFlow Services, from November 1, 2003, the date of acquisition.



Operating Expenses



|                           |  |                             |  |                            |  |                         |   |  |                                   |   
|-------------------------- |  | --------------------------- |  | -------------------------- |  | ----------------------- | - |  | --------------------------------- | --
|                           |  | Year ended January 31,2004  |  | Year ended January 31,2003 |  | Decrease fromprior year |   |  | 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 fiscal 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 had not yet expanded due to economic conditions.



Sales and Marketing. The decrease in sales and marketing expenses in fiscal 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. 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 due to a reduction in commissions, travel costs and
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 in fiscal 2004 and 2003, respectively.In fiscal 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 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 2004 primarily related to staff terminations in connection with our research and
development facilities in Uruguay



48



---

and Ireland, as the Company reduced investment in products where the market opportunity had not yet developed, or the market had 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 of fiscal 2004, the
Company secured a new tenant for a suite in the San Mateo office enabling us to terminate our lease with the landlord.



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 fiscal 2004 compared to US$2.6 million in fiscal 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$1.1 million for fiscal 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 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 fiscal 2005, the Company paid an additional final amount of US$125,000 which was contingent on the achievement of agreed performance criteria. The amended agreement reduced the consideration from
US$11.4 million to approximately US$10.3 million, a reduction in deferred consideration of US$1.1 million.



49



---

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



Interest Income, Net. Interest income, net consists of interest income and interest expense. Interest income, net
decreased by US$448,000 to US$268,000 in fiscal 2004 compared to US$716,000 in fiscal 2003. The decrease was due to lower cash balances and lower interest rates being available on deposit balances in fiscal 2004.



Provision for Income Taxes. There was no provision for income taxes in
fiscal 2004. In fiscal 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.



Segment Information



As discussed in Note 16 of Item 18. Financial Statements, the Company split its operations between Product and
Licenses & Services prior to fiscal 2005. The Company now views its operations as split between two segments: Payments and Funds Management Systems (FMS) Groups.



Segment net income consists of total segment revenue offset only by expenses directly attributable to that segment.
Depreciation and amortization of long-lived assets are allocated based on general cost allocations. Expenses such as general and administrative costs, research and development activities, stock-based compensation, acquisition related charges and
other corporate costs, all of which are included in determining our consolidated operating income, are not allocated to the operating segments and therefore are not included in segment net income.



Payments.The Payments Group (Payments) is primarily
engaged in marketing and selling the Companys electronic PoS system products, primarily the Compact 9000 family of PoS devices, the Compact 950-PP Pin Pad, the Smart 5000 Pin Pad and the OpenPay Unattended Payment Technology (UPT)
range of products; marketing and selling licenses for the Companys payment software products for payment card transaction software; and performing related maintenance, development and installation services.



|                   |  |                             |   |  |                            |   |  |                         |  |                                  |  
|------------------ |  | --------------------------- | - |  | -------------------------- | - |  | ----------------------- |  | -------------------------------- | -
|Payments           |  | Year ended January 31,2005  |   |  | Year ended January 31,2004 |   |  | Increase fromprior year |  | Percentage changefrom prior year |  
|                   |  | (U.S. dollars in thousands) |   |  |                           
|Revenue            |  | 36,687                      |   |  | 29,047                     |   |  | 7,640                   |  | 26                               | %
|Cost of Sales      |  | 18,570                      |   |  | 14,687                     |   |  | 3,883                   |  | 26                               | %
|Gross Profit       |  | 18,117                      |   |  | 14,360                     |   |  | 3,757                   |  | 26                               | %
|Gross Profit %     |  | 49                          | % |  | 49                         | % |  |                        |  |                                 |  
|Operating Expenses |  | 15,156                      |   |  | 13,943                     |   |  | 1,213                   |  | 9                                | %
|Net Income         |  | 2,961                       |   |  | 417                        |   |  | 2,544                   |  | 610                              | %



Payments revenue
increased 26% from US$29.0 million in fiscal 2004 to US$36.7 million in fiscal 2005. The increase was attributable to strong 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), which is expected to decline in fiscal 2006 after the implementation date for the EMV standard on January 1, 2005. Approximately 51% of revenues within Payments are derived
from product sales. The remaining revenue is primarily from license and service sales, including license revenue from the Symbol agreement. During the three months ended October 31, 2004, due to a change in strategy by Symbol, the Company
renegotiated an agreement with Symbol under which Trintech agreed to terminate Symbols future obligations to exclusively use the Companys payment technology in return for a payment of US$2 million, to be paid equally over the five
quarters ending October 31, 2005. The first payment was received in October 2004. Based on the terms of the agreement, the Company will recognize the revenue as license revenue as each payment becomes due. Payments revenue accounted for 66% of
the Companys consolidated revenue in fiscal 2005.



50



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Payments cost of sales increased 26% from US$14.7 million in fiscal 2004 to US$18.6 million in
fiscal 2005. Product cost of sales increased by US$5.5 million due to higher volume sales and a change in the product mix in fiscal 2005. Greater volume sales of higher margin product were sold in fiscal 2005 compared to fiscal 2004. In addition,
the declining value of the U.S. dollar against the euro and the pound also contributed to the increase in absolute dollars during fiscal 2005. Approximately 60% of cost of sales within Payments is derived from product sales. The remaining cost of
sales is primarily from license and service sales. Payments cost of sales accounted for 82% of the Companys consolidated cost of sales in fiscal 2005.



Payments operating expenses increased 9% from US$13.9 million in fiscal 2004 to US$15.2 million in fiscal 2005. The
declining value of the U.S. dollar against the euro and the pound contributed to the increase in absolute dollars during fiscal 2005. Payments operating expenses accounted for 48% of the Companys consolidated operating expenses in fiscal
2005.



Payments net income increased 610% from US$417,000
in fiscal 2004 to US$3 million in fiscal 2005. Payments net income accounted for 147% of the Companys consolidated net income in fiscal 2005.



FMS Group.FMS is primarily engaged in marketing and selling licenses for the Companys transaction reconciliation software and related
maintenance, development and installation services. FMS includes the business of DataFlow Services, which is engaged in the retrieval, processing, aggregation and delivery of all transaction data in daily bank statements.



|                   |  |                             |   |  |                            |   |  |                         |   |  |                                  |  
|------------------ |  | --------------------------- | - |  | -------------------------- | - |  | ----------------------- | - |  | -------------------------------- | -
|FMS                |  | Year ended January 31,2005  |   |  | Year ended January 31,2004 |   |  | Increase fromprior year |   |  | Percentage changefrom prior year |  
|                   |  | (U.S. dollars in thousands) |   |  |                            |  
|Revenue            |  | 19,108                      |   |  | 14,024                     |   |  | 5,084                   |   |  | 36                               | %
|Cost of Sales      |  | 4,055                       |   |  | 3,097                      |   |  | 958                     |   |  | 31                               | %
|Gross Profit       |  | 15,053                      |   |  | 10,927                     |   |  | 4,126                   |   |  | 38                               | %
|Gross Profit %     |  | 79                          | % |  | 78                         | % |  | 1                       | % |  |                                 |  
|Operating Expenses |  | 9,041                       |   |  | 7,798                      |   |  | 1,243                   |   |  | 16                               | %
|Net Income         |  | 6,012                       |   |  | 3,129                      |   |  | 2,883                   |   |  | 92                               | %



FMS revenue increased
36% from US$14.0 million in fiscal 2004 to US$19.1 million in fiscal 2005. The increase was primarily due to the inclusion of post acquisition service revenues generated by DataFlow Services from November 1, 2003, the date of acquisition, and
increased license revenue derived from the FMS core product, ReconNET. FMS revenue accounted for 34% of the Companys consolidated revenue in fiscal 2005.



FMS cost of sales increased 31% from US$3.1 million in fiscal 2004 to US$ 4.1 million in fiscal 2005. The increase was primarily due to the inclusion
of costs incurred by the inclusion of costs related to DataFlow Services from November 1, 2003, the date of acquisition. FMS cost of sales accounted for 18% of the Companys consolidated cost of sales in fiscal 2005.



FMS operating expenses increased 16% from US$7.8 million in fiscal 2004 to
US$9.0 million in fiscal 2005. The increase was primarily due to the inclusion of costs incurred by the inclusion of costs related to DataFlow Services from November 1, 2003, the date of acquisition. FMS operating expenses accounted for 29% of the
Companys consolidated operating expenses in fiscal 2005.



FMS net income increased 92% from US$3.1 million in fiscal 2004 to US$6.0 million in fiscal 2005. FMS net income accounted for 297% of the Companys consolidated net income in fiscal 2005.



51



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|B. | Liquidity and Capital Resources
|-- | -------------------------------



On May 4, 2000, the Company 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, the Company 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, the Company 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$3.2 million) from Bank of Ireland. Advances under this facility
bear interest at the Banks prime overdraft rate, 2.65% as at January 31, 2005. The bank overdraft amount of US$568,000 at January 31, 2005 represented outstanding cheques as at this date. The facility does not have a stated expiration
date, but all amounts drawn thereunder are repayable on demand. As of January 31, 2005, we had working capital of US$30.6 million, including cash and cash equivalents totaling US$39.2 million.



|                                                    |  |                             |   |  |        |   |  |        |  
|--------------------------------------------------- |  | --------------------------- | - |  | ------ | - |  | ------ | -
|                                                    |  | 2005                        |   |  | 2004   |   |  | 2003   |  
|                                                    |  | (U.S. dollars in thousands) |  
|Net cash provided by operating activities           |  | 2,705                       |   |  | (370   | ) |  | 36,094 |  
|Net cash used in investing activities               |  | (1,299                      | ) |  | (7,460 | ) |  | (2,553 | )
|Net cash provided by (used in) financing activities |  | 782                         |   |  | 1,724  |   |  | 1,758  |  
|Cash and cash equivalents at the end of period      |  | 39,180                      |   |  | 36,864 |   |  | 42,559 |  



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



Net cash provided by operating activities was US$2.7 million and US$36 million in fiscal 2005 and 2003 respectively. Net cash used in operating activities
was US$370,000 in 2004. Net cash provided by operating activities in fiscal 2005 resulted primarily from a profit on operations, excluding depreciation, the amortization of intangible assets and the adjustment of acquisition deferred consideration
of US$3.5 million, partially offset by restructuring payments of US$566,000 and an increase in working capital of approximately US$184,000. Net cash provided by operating activities in fiscal 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-based
compensation, of US$13.5 million, and a decrease in working capital of US$3.8 million. Net cash used in operating activities in fiscal 2004 resulted primarily from restructuring payments of US$1.5 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, partially offset by a decrease in working capital of approximately US$2.4 million.



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



Net cash used in investing activities was approximately US$1.3 million, US$7.5 million and US$2.6 million for fiscal 2005, 2004 and 2003, respectively.
Net cash used in fiscal 2005 was primarily related to acquisition payments, including payments in relation to Trintech Limited (formerly known as Checkline) of US$149,000, Exceptis Technologies Limited. of US$491,000,deferred consideration for the
Companys fiscal 2001 acquisitions for Sursoft of US$125,000 and the purchase of property and equipment of US$528,000. 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 Limited. liabilities of US$2.4 million and US$149,000, respectively, 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 fiscal 2003 was



52



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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 Exceptis Technologies Limited of US$763,000 and the purchase of property and equipment of US$283,000.



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



Net cash provided by financing activities was US$782,000, US$1.7 million and US$1.8 million for fiscal 2005, 2004 and 2003, respectively. Net cash
provided by financing activities in fiscal 2005 primarily related to the proceeds of the sale of shares in connection with the acquisition of DataFlow Services, a reduction in restricted cash deposits of US$539,000 and the sale of shares in
connection with employee benefit plans, partially offset by the purchase of Trintech ordinary shares and principal payments on capital leases. Net cash provided by financing activities in fiscal 2004 primarily related to a reduction in restricted
cash deposits, the net proceeds of the sale of shares in connection with the acquisition of DataFlow Services and the sale of shares in connection with employee benefit plans, partially offset by the purchase of Trintech ordinary shares and
principal payments on capital leases. Net provided by financing activities in fiscal 2003 primarily related to a reduction in restricted cash deposits, partially offset by principal payments on capital leases and the purchase of Trintech ordinary
shares. In July 2001, 2002, 2003 and 2004, 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, 2005, the Company had repurchased 753,396 ordinary shares at a cost of approximately US$990,000. As of January 31,
2005 approximately US$4.0 million remained available for future repurchases under this program.



As of January 31, 2005, contractual obligations relating to the Companys facilities lease commitments totaled US$12.5 million, payable through
fiscal 2015, including future minimum payments for abandoned properties, which have been provided for of US$424,000. The Company has estimated it will incur US$8.8 million in net payments over the remaining period of the leases of which US$2.2
million will be paid out in fiscal 2006 and US$6.6 million thereafter.



The Company has no material commitments for capital expenditures or strategic investments. Under the terms of the Companys acquisition agreement to acquire Trintech Limited (formerly known as 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 paid an additional final amount of US$125,000 during fiscal 2005.



Under the terms of the Companys acquisition agreement to acquire DataFlow Services, the Company will be required to pay additional performance
related contingent consideration equal to 50% of profits, as defined in the purchase agreement, earned by the acquired business for fiscal 2005 and 2006. The additional contingent consideration is subject to certain top-up provisions from profits
for fiscal 2007, if the aggregate payments under this provision for fiscal 2005 and fiscal 2006 are below US$2.5 million. The fiscal 2005 additional performance related consideration of US$1.2 million was paid in the quarter ended April 30, 2005.



The Companys 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.



53



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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. As of January 31, 2005, the Company had five forward exchange
contracts maturing in 2005 to sell US$2.25 million and receive euro in return. The derivative instruments are recorded at fair value and changes in fair value are recorded in earnings under exchange gain, net on the statement of operations. The
aggregate fair value of the contracts as of January 31, 2005 was negative US$39,000.



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 gain, net on the statement of operations. At January
31, 2005, the Company had no currency options.



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.



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 12 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 ProspectsOperating Results and 5.B Operating and Financial Review and ProspectsLiquidity and Capital Resources.



|E. | Off-Balance Sheet Arrangements
|-- | ------------------------------



The Company has no off-balance sheet arrangements as at January 31, 2005, as defined in Item 303(a)(4)(ii) of Regulation S-K.



54



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|F. | Tabular Disclosure of Contractual Obligations
|-- | ---------------------------------------------



The table below presents the principal categories of our contractual obligations as of January 31, 2005:



Contractual obligations



|                                   |  |                             |  |                 |  |          |  |          |  |                 
|---------------------------------- |  | --------------------------- |  | --------------- |  | -------- |  | -------- |  | ----------------
|                                   |  | Payments due by period     
|                                   |  | Total                       |  | Less than1 year |  | 1-3years |  | 3-5years |  | More than5 years
|                                   |  | (U.S. dollars in thousands)
|Capital Lease Obligations          |  | 83                          |  | 83              |  |         |  |         |  |                
|Operating Lease Obligations        |  | 12,499                      |  | 3,011           |  | 4,275    |  | 3,238    |  | 1,975           
|Acquisition Deferred Consideration |  | 3,957                       |  | 2,398           |  | 1,559    |  |         |  |                
|                                   |  |                             |  |                 |  |          |  |          |  |                 
|Total                              |  | 16,539                      |  | 5,492           |  | 5,834    |  | 3,238    |  | 1,975           
|                                   |  |                             |  |                 |  |          |  |          |  |                 



|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 29, 2005:



|                         |  |     |  |                                                
|------------------------ |  | --- |  | -----------------------------------------------
|Name                     |  | Age |  | Position                                       
|Executive Directors      |  |     |  |                                                
|Cyril P. McGuire         |  | 45  |  | Chairman, Chief Executive Officer and Director 
|R. Paul Byrne            |  | 40  |  | Chief Financial Officer, President and Director
|                         |  |    
|Non-executive Directors  |  |     |  |                                                
|Kevin C. Shea            |  | 54  |  | Director (1)(2)                                
|Robert M. Wadsworth      |  | 44  |  | Director (1)(2)                                
|Trevor D. Sullivan       |  | 68  |  | Director (2)                                   
|Dr Jim Mountjoy          |  | 59  |  | Director (1)                                   
|                         |  |    
|Other Executive Officers |  |     |  |                                                
|John M. Harte            |  | 60  |  | Executive Vice President                       
|Eamon Keating            |  | 46  |  | 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 and President since February 1, 2005. Since February 1997, Mr. Byrne has also served as a director and secretary. Before joining the Company, 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.



55



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Kevin C. Sheahas served as a director since January 2000 and from October 2001 to May 2002, Mr.
Shea served as Chief Strategy Officer. Mr. Shea is currently Chairman and CEO of Elan Investments, LLC, a private investment company. He also serves as Chairman and CEO of Elan Group, LLC, a consulting firm to financial services and manufacturing
sectors. He currently serves on the board of several private companies. 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, serving as Chairman from 1991 to August 1999. Mr. Sullivan is currently a director of several private companies. 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. From 1981 until 1985, Mr. Sullivan held other senior management positions at Memorex International. Before 1981, Mr. Sullivan held several senior
management positions at IBM, a computer company. Mr. Sullivan currently resides in Dublin, Ireland.



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 capital 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.



Dr. Jim Mountjoy has served as a director since June
2004. From 1990 until February 1999, he was co-founder and CEO of Euristix Limited, a software development company which specialised in telecommunications signaling systems solutions and element management systems. From February 1999 to November
1999, he was vice president business development of Fore Systems, a Nasdaq listed company which acquired Euristix Limited in February 1999. From November 1999 to July 2000 he was vice president network management for Marconi Communications, which
had acquired Fore Systems in April 1999. Since that time, Dr. Mountjoy has served as non-executive director of a number of companies in the technology sector. He is a director of science foundation Ireland, Chairman of ICT Ireland R&D
Advisory Committee and an advisory board member of a number of private, Irish-based venture capital companies. Dr. Mountjoy currently resides in Dublin, Ireland.



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.



56



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Eamon Keating joined us in November 2000 following the acquisition of Exceptis Technologies
Limited, an electronic payment software company. Since March 2002, Mr. Keating has been an executive vice president and general manager. From September 2001 to March 2002, Mr. Keating was a general manager. From November 2000 to August 2001, Mr.
Keating served in a number of roles as a vice president of finance. Mr. Keating was Chief Financial Officer of Exceptis Technologies from January 1999 to November 2000. From 1994 to 1998, Mr. Keating was Finance Director of Concern, an overseas
aid agency. From 1988 to 1993, Mr. Keating was Chief Financial Officer and Company Secretary of Ryanair Limited, a commercial airline. Mr. Keating received a bachelor of commerce from University College Dublin and is a fellow of the Institute of
Chartered Accountants in Ireland. Mr. Keating currently resides in Dublin, Ireland.



The Companys Advisory Board



In March 1999, the Company 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 following table presents information regarding the Companys Advisory Board members as of April 29, 2005:



|                 |  |     |  |            
|---------------- |  | --- |  | -----------
|Name             |  | Age |  | Position   
|Edmund Jensen    |  | 67  |  | Chairperson
|Magdalena Yesil  |  | 46  |  | Member     
|Robert Schneider |  | 56  |  | Member     
|Patrick Byrne    |  | 61  |  | Member     
|Denis Goggin     |  | 60  |  | Member     
|David Leech      |  | 55  |  | 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.



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.



57



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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 Optimise 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.



The Company currently does 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.



The Company does not currently have any outstanding loans to any members of the Companys advisory board. In addition, the Company does not currently have any 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 may also purchase and maintain for any of its officers or auditors
insurance in respect of any liability arising from negligence, default breach of duty or breach of trust of which he may be guilty in relation to us.



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.



58



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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 fiscal 2005 totaled US$1,576,519. All of the US$1,576,519 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 Outstanding
to the Companys directors and executive officers as of January 31, 2005:



|                    |  |                                                  |  |                         |  |               
|------------------- |  | ------------------------------------------------ |  | ----------------------- |  | --------------
|Name                |  | Number ofOptions Outstanding(in Equivalent ADSs) |  | Exercise Price$ per ADS |  | ExpirationDate
|R. Paul Byrne       |  | 491,544                                          |  | 2.22    5.82           |  | 20052012     
|Cyril P. McGuire    |  | 194,167                                          |  | 2.22    4.71           |  | 20092011     
|Kevin C. Shea       |  | 141,250                                          |  | 2.05    7.28           |  | 20062010     
|Trevor D. Sullivan  |  | 36,250                                           |  | 2.22  30.00            |  | 20062010     
|Robert M. Wadsworth |  | 65,000                                           |  | 2.22  30.00            |  | 20062011     
|Dr Jim Mountjoy     |  | 35,000                                           |  | 5.29                    |  | 2011          
|John M. Harte       |  | 130,000                                          |  | 1.07    4.71           |  | 20092011     
|Eamon Keating       |  | 215,214                                          |  | 2.22    4.71           |  | 20092011     



We have entered into
indefinite term employment agreements with each of Cyril P. McGuire, R. Paul Byrne, John Harte and Eamon Keating 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 currently have any 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 six 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.



59



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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 BoardService Began |  | Termination /Renewal Date ofCurrent Office
|Robert M. Wadsworth |  | Director               |  | 1998                    |  | Annual General Meeting 2007               
|Kevin C. Shea       |  | Director               |  | 2000                    |  | Annual General Meeting 2006               
|Cyril P. McGuire    |  | Director/Chairman/CEO  |  | 1987                    |  | Annual General Meeting 2007               
|Trevor D. Sullivan  |  | Director               |  | 1991                    |  | Annual General Meeting 2005               
|R. Paul Byrne       |  | Director/CFO/President |  | 1997                    |  | Annual General Meeting 2005               
|Dr Jim Mountjoy     |  | Director               |  | 2004                    |  | Annual General Meeting 2006               



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 SEC or other regulatory bodies. The members of the Audit Committee are Kevin C. Shea, Robert M. Wadsworth and Trevor D. Sullivan
(Chairman). The Board of Directors has determined that Kevin C. Shea and Robert M. Wadsworth are Audit Committee Financial Experts as defined by the applicable rules and regulations of the SEC. As a result of certain termination payments that the
Company paid Mr. Shea in August 2002 as part of the termination of his employment with the Company in May 2002, Mr. Shea will be deemed not to be independent under the applicable rules and regulations of Nasdaq from the period beginning
on July 31, 2005, when such rules and regulations take effect for the Company, until September 1, 2005, at which time Mr. Shea will once again be deemed to be independent under the applicable rules and regulations of Nasdaq. The Board of
Directors has determined that, under these exceptional and limited circumstances, Mr. Shea should remain as a member of the Audit Committee throughout this period on the basis that his membership is required by the best interests of the Company.



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 also:



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



| |  |  | reviews 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 Dr. Jim Mountjoy, Kevin C. Shea and Robert M. Wadsworth (Chairman).



60



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|D. | Employees
|-- | ---------



We employed the following numbers of employees as of January 31, 2003, 2004 and 2005:



|                                  |  |                   |  |      |  |     
|--------------------------------- |  | ----------------- |  | ---- |  | ----
|                                  |  | As of January 31,
|Category                          |  | 2003              |  | 2004 |  | 2005
|Research and development          |  | 160               |  | 136  |  | 114 
|Professional and support services |  | 91                |  | 104  |  | 98  
|Sales and marketing               |  | 63                |  | 54   |  | 56  
|Administration                    |  | 46                |  | 42   |  | 47  
|                                  |  |                   |  |      |  |     
|Total                             |  | 360               |  | 336  |  | 315 
|                                  |  |                   |  |      |  |     



Of the Companys
total number of employees, as of January 31, 2005, 102 are located in Ireland, 73 are located in Europe outside Ireland, 113 are located in North America and 27 are located in South America. The decrease in employee headcount in fiscal 2004 and
fiscal 2005 was primarily due to 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 6,700,000 ordinary shares (3,350,000 equivalent ADSs) to be allocated among the plans by
the board of directors. The 6,700,000 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 6,700,000
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 the Companys 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 1997 scheme at any time.



61



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As of January 31, 2005, 1,266,504 ordinary shares (633,252 equivalent ADSs) have been issued upon the
exercise of share options granted under the 1997 scheme and 4,354,384 ordinary shares (2,177,192 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$6.78, or approximately 4.68 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 the Companys 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, 2005, 55,710 ordinary shares (27,855 equivalent ADSs) have been issued upon the exercise of share options granted under the directors and consultants scheme, and 465,500 ordinary shares (232,750 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$4.67, or approximately 3.58 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 Companys 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, 2005, 5,338 ordinary shares (2,669 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$3.65, or approximately 2.80 per equivalent ADS.



62



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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 exercises. 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, 2005, 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 employee 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 period following exercise and automatically enrolled in a new offering period. The new offering period will use



63



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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 employee share purchase plan will terminate in 2009. The Board of Directors has the authority to amend or terminate the 1999 employee share
purchase plan, except that no board action may adversely affect any outstanding rights to purchase shares under the 1999 employee share purchase plan. As of January 31, 2005, 350,188 Ordinary Shares (175,094 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 January 31, 2005, there were outstanding options to purchase an aggregate of 4,825,222 ordinary shares (2,412,611
equivalent ADSs) at exercise prices ranging from US$0.50 to US$49.50 per ordinary share and expiration dates ranging from February 2005 to January 2012 under the Companys employee benefit plans. As of January 31, 2005, the Companys
directors and executive officers held net options to purchase an aggregate of 2,616,850 ordinary shares (1,308,425) equivalent ADSs) at exercise prices ranging from US$0.54 to US$15.00 per ordinary share and expiration dates ranging from September
2006 to January 2012.



64



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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 29, 2005 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 AmericanDepositary SharesBeneficially Owned(1) | 
|Beneficial Owner                                   |  | Number                                                    |  | Percent |  
|Cyril P. McGuire (2)(3)                            |  | 2,947,193                                                 |  | 18.9    | %
|Instove Limited (3)                                |  | 1,602,804                                                 |  | 10.3    |  
|R. Paul Byrne (4)                                  |  | 192,903                                                   |  | 1.2     |  
|Kevin C. Shea (5)                                  |  | 111,568                                                   |  | *       |  
|Trevor D. Sullivan (6)                             |  | 10,085                                                    |  | *       |  
|Robert M. Wadsworth (7)                            |  | 37,500                                                    |  | *       |  
|Dr Jim Mountjoy (8)                                |  | 8,750                                                     |  | *       |  
|John Harte (9)                                     |  | 84,750                                                    |  | *       |  
|Eamon Keating (10)                                 |  | 128,125                                                   |  | *       |  
|Officers and directors as a group (8 persons) (11) |  | 5,123,678                                                 |  | 32.8    |  

---

|* | 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, 2004 and 2005 with the SEC. The percentage ownership of each director, executive officer, and shareholder is based on 15,619,503 equivalent ADSs outstanding at April 29, 2005. Beneficial
ownership is determined in accordance with rules of the SEC 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 29, 2005 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) | Includes 2,855,318 equivalent ADSs held of record and 91,875 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Equivalent ADSs are held by Instove Limited, which in turn is owned by two Jersey discretionary trusts, Hacke Trust and Belte Trust. Neither Cyril P. McGuire nor any of his family
members are trustees or beneficiaries of these trusts, but the trustees may, in their sole discretion, select any beneficiaries. Cyril P. McGuire has disclaimed any beneficial interest in the equivalent ADSs held by Instove Limited or the trusts.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes 32,153 equivalent ADSs held of record and 160,750 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes 5,000 equivalent ADSs held of record and 106,568 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes 1,335 equivalent ADSs held of record and 8,750 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Represents 37,500 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(8) | Represents 8,750 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | -----------------------------------------------------------------------------------------------------------------------



65



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|(9) | Represents 375 equivalent ADSs held of record and 84,375 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) | Represents 12,500 equivalent ADSs held of record and 115,625 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) | Includes 661,276 equivalent ADSs subject to options that are exercisable currently or within 60 days of April 29, 2005.
|---- | -----------------------------------------------------------------------------------------------------------------------



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 SEC.



In December 2004, John McGuire filed a Form 13G with the SEC to report that he was the beneficial owner of 284,453 ADSs and had ceased to be the beneficial owner of more than 5% of the class of shares.



Cyril P. McGuire was the beneficial owner of 2,879,485, 2,899,693 and
2,912,401 equivalent ADSs as of January 31, 2003, January 31, 2004 and January 31, 2005, respectively. The change in beneficial ownership was due to an increase in the number of vested options over the periods. Cyril P. McGuire also purchased
502,814 ADSs during fiscal 2003. Additionally, the percentage of equivalent ADSs held by Cyril P. 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 the repurchase by the Company of its shares through its Share Buyback Program.



As of April 29, 2005, the number of holders of record of the Companys ordinary shares was 87 and the number of holders of record of the
Companys ADSs was approximately 123. 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 23 U.S. record holders. U.S. record holders
hold approximately 67% 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 P. McGuire under which we currently lease approximately 22,565 square
feet of space in a building located in Dublin, Ireland which is owned by John and Cyril P. McGuire. The term of the lease is for a period of 25 years. The Companys rent under the lease is 528,481 or US$688,875 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 between us and John and Cyril P. McGuire. The Company has the right to terminate the lease on
September 1, 2006.



We have entered into a second lease
agreement with John and Cyril P. 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 P. 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$1,115,705 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 between us and John and Cyril P. McGuire. The Company has the right to terminate the lease on February 1, 2009.



66



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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 P. McGuire, R. Paul Byrne and Eamonn Keating, three of the Companys executive officers, but is otherwise unrelated to us. The Company owns 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. The Company 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. The Company 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.



In July 2001, 2002, 2003 and 2004, 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 16, 2004 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,
2005, the Company had repurchased 753,396 shares at a cost of approximately US$990,000. As of January 31, 2005 approximately US$4.0 million remained available for future repurchases under this program.



The Company believes 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-34 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.



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. This claim was adjudicated by a court
in July 2004. Resolution of this claim did not have a material effect on our business. 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 or 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. For example, in August 2004 a complaint was filed by Verve in the Northern District of California alleging that we, along with six other parties, had breached Verves intellectual property rights in relation to point of sale products.
Verve sought unspecified damages. Whilst this claim was dismissed, there can be no assurance that other parties will not make claims in the future. Any infringement



67



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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.



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.



The Company is currently engaged in litigation with the former shareholders
of Checkline plc, which we acquired in August 2000. We are seeking damages for misstatement of contracted business at the time of acquisition. We are also defending a counter claim for the payment of US$1.25 million in respect of earnout payments .
We do not believe this litigation will have a material adverse effect upon the Companys business, financial condition or results of operations.



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. The Company currently intends to retain future earnings,
if any, to fund the development and growth of the Companys business.



Under Irish law, the Company 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, the Company 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 the Company will not be required to pay dividends to a shareholder who has not claimed these dividends within 12 years of their declaration if resolved by the Board of Directors. Unclaimed dividends will be used by the Company as decided by the
Companys Board of Directors.



68



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|B. | Significant Changes
|-- | -------------------



None.



|Item 9. | The Offer and Listing
|------- | ---------------------



|A. | Offer and Listing
|-- | -----------------



On September 24, 1999, the Company consummated a public offering in the U.S. and the Federal Republic of Germany of 5,800,000 ordinary shares. On October
26, 1999, the Company 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, the Company 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 the Company 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 income (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.



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 the Company was 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 U.S. dollars has been made at the daily conversion
rate for each day during the respective period. This conversion is provided solely for your convenience.



On January 21, 2005, the Company announced its application to revoke the admission of the ADSs on the FSE, and on February 22, 2005, the Company announced
that its application had been approved by the FSE. The revocation will be effective on May 11, 2005. Until then, the ADSs will continue to be traded on the FSE.



69



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On January 21, 2005, the Company also affirmed its commitment to maintain its listing on the Nasdaq
National Market.



|                                       |  |                                       |  |                                |  |        |  |      
|-------------------------------------- |  | ------------------------------------- |  | ------------------------------ |  | ------ |  | -----
|                                       |  | Price per ADSon NasdaqNational Market |  | Price per ADSon NeuerMarkt/FSE
|                                       |  | High $                                |  | Low $                          |  | High  |  | Low 
|Annual Highs and Lows                  |  |                                       |  |                                |  |        |  |      
|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                                   |  | 6.82                                  |  | 3.79                           |  | 4.78   |  | 3.16 
|2005 (through April 29, 2005)          |  | 6.24                                  |  | 4.70                           |  | 4.60   |  | 3.80 
|                                       |  |                                       |  |                               
|Quarterly Highs and Lows               |  |                                       |  |                                |  |        |  |      
|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                          |  | 5.74                                  |  | 3.85                           |  | 4.48   |  | 3.16 
|Second Quarter                         |  | 5.50                                  |  | 3.79                           |  | 4.40   |  | 3.50 
|Third Quarter                          |  | 5.30                                  |  | 4.11                           |  | 4.39   |  | 3.55 
|Fourth Quarter                         |  | 6.82                                  |  | 5.01                           |  | 4.78   |  | 3.77 
|                                       |  |                                       |  |                               
|2005                                   |  |                                       |  |                                |  |        |  |      
|First Quarter (through April 29, 2005) |  | 6.24                                  |  | 4.70                           |  | 4.60   |  | 3.80 
|                                       |  |                                       |  |                               
|Monthly Highs and Lows (2004 and 2005) |  |                                       |  |                                |  |        |  |      
|November                               |  | 6.15                                  |  | 5.01                           |  | 4.50   |  | 3.77 
|December                               |  | 6.82                                  |  | 5.23                           |  | 4.78   |  | 4.10 
|January                                |  | 6.37                                  |  | 5.26                           |  | 4.60   |  | 4.06 
|February                               |  | 6.24                                  |  | 5.06                           |  | 4.60   |  | 4.00 
|March                                  |  | 6.07                                  |  | 5.26                           |  | 4.45   |  | 4.05 
|April (through April 29, 2005)         |  | 5.91                                  |  | 4.70                           |  | 4.50   |  | 3.80 



|B. | Plan of Distribution
|-- | --------------------



Not required.



|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. On January 21, 2005, the Company applied to delist its American Depository Receipts from the Frankfurt Stock Exchange and the Frankfurt
Stock Exchange approved such delisting. The revocation of the listing is expected to become effective on May 11, 2005 and accordingly, the ADSs will terminate trading on the Frankfurt Stock Exchange on such date.



70



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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 2004. The aggregate annual turnover of the Frankfurt Stock Exchange in 2004 of approximately 2.9 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, 2004, the equity securities of 6,209 corporations, including 5,393 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 reorganized its equity market effective January 1, 2004 and decided to discontinue the Neuer
Markt after a transition period. As a 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 (U.S. 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, the Company decided to terminate its 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 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.



71



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|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
|-- | ------------------



The Company has 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 (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.), 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 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, certain financial transactions to or by the order of or on behalf of residents of Angola, to persons formerly related to governmental functions in Liberia and
Burma/Myanmar 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.



72



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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 3.0 million. 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 3.0 million. 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,
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.



73



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Enforcement of Civil Liabilities under United States Federal Securities Laws



The Company is 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. The Company has 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, the federal law of the United States
and the laws of the Federal Republic of Germany relating to the purchase, ownership and disposition of ordinary shares or ADSs, as the case may be, by Irish, U.S. and German holders. For the purposes of this discussion, an Irish holder means any
person who is resident or is ordinarily resident in Ireland or who is carrying on a trade in Ireland through a branch or an agency; 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; and 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.



This summary is of a general nature only and does not discuss all aspects of Irish, U.S. and German taxation that may be relevant to a particular holder. For example, the following summary does not address the tax treatment of Irish holders
or U.S. holders who own, actually or constructively, 10% or more of the Companys outstanding voting stock, nor does this summary address the tax consequences certain classes of holders, such as broker-dealers, insurance companies, tax-exempt
organizations, financial institutions, persons subject to the alternative minimum tax persons who are taxable on capital gains in more than one jurisdiction and persons who do not hold ordinary shares or ADSs as capital assets. Such holders, who are
not addressed in this summary, may be subject to special rules and should consult their own tax advisors.



The statements of Irish, U.S. and German tax laws described herein are based on the laws in force and as interpreted by the relevant taxation authorities
as of April 29, 2005 and are subject to any changes in Irish, U.S. or German law, or in the interpretation of these laws by the relevant taxation authorities, or in changes to the double taxation conventions among any two of the Republic of Ireland,
the United States and Germany occurring after the date hereof. 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 as of the date hereof, all of which are subject to change, possibly with retrospective effect.



74



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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 (other than Ireland) 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 ultimately 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 (other than Ireland) 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 on a gross basis 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 the holder 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 for 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 such holders
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 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.



75



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United States Taxation. For U.S. federal income tax purposes, the gross amount of any distribution
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 the Companys 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.



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 Ireland
and the U.S. A U.S. holder will be eligible for this reduced rate only if such holder has held the ADSs 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 ADSs 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.



Irish withholding tax in an amount of 18% of the net dividend can be credited against that portion of the German income or corporation tax attributable to
the dividend payment. It is, however, unclear regarding whether ADS 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 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.



76



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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 12 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 equal the purchase price paid for the ADSs.



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.



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. The trade tax is credited against the income tax of the shareholder in whole or in part.



77



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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 50% 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.



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 increase in the value of the Companys stock, we are not 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 may 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 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 may be revoked only with the consent of the Internal Revenue Service, or IRS.



78



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As an alternative to making the QEF election, a U.S. holder of PFIC ADSs which are publicly traded could
mitigate the consequences of the PFIC rules by electing to mark the ADSs 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 ADSs. 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 strongly advised to consult their own tax advisors about
the PFIC rules and about the advisability, procedures and timing of their making any of the available tax elections, including the 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 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.



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.



79



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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 capital gains and in general
to dividends. 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
capital gains and generally the dividends received are in general fully taxable and tax exemptions do not apply.



Other Taxes in Germany



Wealth Tax.At present, for assessment periods after 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 or its place
of management or seat 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.



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.



80



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|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.



As of January 31, 2005, 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 US dollar. In particular, the
value of the U.S. dollar to the euro and the pound 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. As of January 31, 2005 the Company had five forward exchange contracts maturing in 2005 to sell US$2.25 million and receive euro in return. The fair value of the contracts
as of January 31, 2005 was US$39,000 negative.



81



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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 gain, net 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 fair value of the options as of January 31, 2004 was US$80,000 negative. As of January 31, 2005, the Company had no currency options.



The table below provides information about the derivative financial instruments we have entered into that are sensitive to foreign currency exchange
rates. The table presents fair values, notional amounts (at the contract exchange rates) and the weighted-average contractual foreign currency exchange rates.



|                                                  |  |                                                     |  |                                 |   |  |                                         
|------------------------------------------------- |  | --------------------------------------------------- |  | ------------------------------- | - |  | ----------------------------------------
|Foreign Currency Risk                             |  | Contract Notional AmountsExpected Maturity Date2005 |  | Fair Value as ofJanuary 31,2005 |   |  | Weighted-averageContractualExchange Rate
|                                                  |  | (U.S. dollars in thousands)                         |  |                                 |  
|Derivatives used to manage anticipated cash flows |  |                                                     |  |                                 |   |  |                                         
|(Receive euro, Sell U.S. dollars) U.S. dollars    |  | 2,250                                               |  | (39                             | ) |  | 1.3266                                  



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



For further discussion of the Companys market risk, please see Item 5.B Operating ResultsLiquidity and Capital Resources.



|Item 12. | Description of Securities Other Than Equity Securities
|-------- | ------------------------------------------------------



Not required.



82



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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 income(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 and President, 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. Securities Exchange Act of 1934 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 U.S. Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC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 Mr. Kevin C. Shea and Mr. Robert M. Wadsworth are audit committee financial experts serving on
our Audit Committee. As a result of certain termination payments that the Company paid Mr. Shea in August 2002 as part of the termination of his employment with the Company in May 2002, Mr. Shea will be deemed not to be independent under
the applicable rules and regulations of Nasdaq from the period beginning on July 31, 2005, when such rules and regulations take effect for the Company, until September 1, 2005, at which time Mr. Shea will once again be deemed to be
independent under the applicable rules and regulations of Nasdaq. The Board of Directors has determined that, under these exceptional and limited circumstances, Mr. Shea should remain as a member of the Audit Committee throughout this
period on the basis that his membership is required by the best interests of the Company.



|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 President, 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.



83



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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 2005, no amendments to our
waivers from the Code of Ethics were made or given for any of our executive officers.



|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 2005 and 2004, respectively. The
Audit Committee 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 the year endedJanuary 31, 2005US$ |         | For the year endedJanuary 31, 2004US$
|Audit fees (1)         |  | $                                     | 236,816 |                                       | $ | 242,703
|Audit related fees (2) |  |                                       | 14,302  |                                       |   | 2,147  
|Tax fees (3)           |  |                                       | 19,616  |                                       |   | 98,995 
|All other fees (4)     |  |                                       | 78,791  |                                       |   | 5,788  
|                       |  |                                       |         |                                       |   |        
|Total fees             |  | $                                     | 349,525 |                                       | $ | 349,633
|                       |  |                                       |         |                                       |   |        

---

|(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



The 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 100% of the
audit-related fees, tax fees and all other fees listed in the table above.



|Item 16D. | Exemptions from the Listing Standards for Audit Committees
|--------- | ----------------------------------------------------------



Not applicable.



84



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|Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers
|--------- | ----------------------------------------------------------------------



The following tables summarize, as ordinary shares and ADSs, purchases of equity securities under our Share Buyback Plan as approved in July 2001,
2002, 2003 and 2004.



Ordinary Shares



|                 |  |                                |  |                            |      |                                                                               |         |                                                                                       |          
|---------------- |  | ------------------------------ |  | -------------------------- | ---- | ----------------------------------------------------------------------------- | ------- | ------------------------------------------------------------------------------------- | ---------
|                 |  | (a)                            |  | (b)                        |      | (c)                                                                           |         | (d)                                                                                  
|Period           |  | Total Numberof SharesPurchased |  | Average PricePer SharePaid |      | Total Number of SharesPurchased as Part ofPublicly AnnouncedPlans or Programs |         | Approximate Dollar Valueof Shares That MayYet Be Purchased Underthe Plans or Programs
|2/1/04-2/29/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|3/1/04-3/31/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|4/1/04-4/30/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|5/1/04-5/31/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|6/1/04-6/30/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|7/1/04-7/31/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|8/1/04-8/31/04   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,346,052
|                 |  |                                |  |                           
|9/1/04-9/30/04   |  | 135,440                        |  |                            | 2.48 |                                                                               | 135,440 |                                                                                       | 4,010,161
|                 |  |                                |  |                           
|10/1/04-10/31/04 |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,010,161
|                 |  |                                |  |                           
|11/1/04-11/30/04 |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,010,161
|                 |  |                                |  |                           
|12/1/04-12/31/04 |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,010,161
|                 |  |                                |  |                           
|1/1/05-1/31/05   |  |                               |  |                            |     |                                                                               |        |                                                                                       | 4,010,161
|                 |  |                                |  |                            |      |                                                                               |         |                                                                                       |          
|Total            |  | 135,440                        |  | $                          | 2.48 |                                                                               | 135,440 |                                                                                       |          
|                 |  |                                |  |                            |      |                                                                               |         |                                                                                       |          



85



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ADSs



|                 |  |                              |  |                          |      |                                                                             |        |                                                                                     |          
|---------------- |  | ---------------------------- |  | ------------------------ | ---- | --------------------------------------------------------------------------- | ------ | ----------------------------------------------------------------------------------- | ---------
|                 |  | (a)                          |  | (b)                      |      | (c)                                                                         |        | (d)                                                                                
|Period           |  | Total Numberof ADSsPurchased |  | Average PricePer ADSPaid |      | Total Number of ADSsPurchased as Part ofPublicly AnnouncedPlans or Programs |        | Approximate Dollar Valueof ADSs That MayYet Be Purchased Underthe Plans or Programs
|2/1/04-2/29/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|3/1/04-3/31/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|4/1/04-4/30/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|5/1/04-5/31/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|6/1/04-6/30/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|7/1/04-7/31/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|8/1/04-8/31/04   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,346,052
|                 |  |                              |  |                         
|9/1/04-9/30/04   |  | 67,720                       |  |                          | 4.96 |                                                                             | 67,720 |                                                                                     | 4,010,161
|                 |  |                              |  |                         
|10/1/04-10/31/04 |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,010,161
|                 |  |                              |  |                         
|11/1/04-11/30/04 |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,010,161
|                 |  |                              |  |                         
|12/1/04-12/31/04 |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,010,161
|                 |  |                              |  |                         
|1/1/05-1/31/05   |  |                             |  |                          |     |                                                                             |       |                                                                                     | 4,010,161
|                 |  |                              |  |                          |      |                                                                             |        |                                                                                     |          
|Total            |  | 67,720                       |  | $                        | 4.96 |                                                                             | 67,720 |                                                                                     |          
|                 |  |                              |  |                          |      |                                                                             |        |                                                                                     |          



All purchases were
made in accordance with a shareholder approved agreement between Trintech and 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 16, 2004 up until the
date which is 18 months after that date, to purchase not more than US$5.0 million of the Companys capital from Deutsche Bank AG for a total consideration including premium of not more than US$100 per ADS. Any such purchases of ADSs may only be
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 purposes of financing any such purchase.
All purchases indicated in the table above were for ADSs on the Nasdaq Stock Exchange.



86



---

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-34 are herein
incorporated by reference.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Report of
Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements 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, 2005, 2004 and 2003 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.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



87



---

SCHEDULE II



TRINTECH GROUP PLC



VALUATION AND QUALIFYING ACCOUNTS



|                                      |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|------------------------------------- |  | ---------------------------- |  | ----------------------------------------------- | --- |  | ---------------------------------- | --- |  | ------------------- |  | ---------- | - |  | ----------------------
|Description                           |  | Balance atbeginningof period |  | Additionscharged (credited)to costs andexpenses |     |  | Additionscharged to other accounts |     |  | Exchangedifferences |  | Deductions |   |  | Balance atend ofperiod
|                                      |  | (U.S. dollars in thousands)  |  |                                                 |    
|Year ended January 31, 2005           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Provisions for bad and doubtful debts |  | 1,595                        |  | 159                                             |     |  |                                   |     |  | 86                  |  | (1,053     | ) |  | 787                   
|                                      |  |                              |  |                                                 |     | 
|Year ended January 31, 2004           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Provisions for bad and doubtful debts |  | 1,884                        |  | 700                                             |     |  |                                   |     |  | 202                 |  | (1,191     | ) |  | 1,595                 
|                                      |  |                              |  |                                                 |     | 
|Year ended January 31, 2003           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Provisions for bad and doubtful debts |  | 1,036                        |  | 2,668                                           |     |  |                                   |     |  | 222                 |  | (2,042     | ) |  | 1,884                 
|                                      |  |                              |  |                                                 |     | 
|Year ended January 31, 2005           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Warranty Reserve                      |  | 356                          |  | 159                                             |     |  |                                   |     |  | 18                  |  | (138       | ) |  | 395                   
|                                      |  |                              |  |                                                 |     | 
|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, 2005           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Inventory Provision                   |  | 2,640                        |  | 6                                               |     |  |                                   |     |  | 85                  |  | (2,126     | ) |  | 605                   
|                                      |  |                              |  |                                                 |     | 
|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, 2005           |  |                              |  |                                                 |     |  |                                    |     |  |                     |  |            |   |  |                       
|Tax Valuation Allowance               |  | 19,140                       |  | (1,128                                          | )   |  | 2,863                              | (3) |  | 365                 |  | (1,049     | ) |  | 20,191                
|                                      |  |                              |  |                                                 |     | 
|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                

---

|(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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | US$83 relates to disqualifying dispositions and the balance relates to revisions to net operating losses and other deferred benefits on finalization of tax returns in a number of
jurisdictions.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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.



88



---

|Item 19. | Exhibits
|-------- | --------



|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                                                                                                                                                                                                                                                                                                                                       
|1.1           |  | Memorandum and Articles of Association of Trintech Group PLC, as amended, dated July 12, 2002 (filed as exhibit to Trintechs Annual Report on Form 20-F (File No. 0-30320) for the year
ended January 31, 2003 and incorporated herein by reference)                                                                                                                                                                                         
|              | 
|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 16, 2004                                                                                                                                                                                                                                                                                                                                                        
|              | 
|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)                                                                                                                                                                          
|              | 
|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)                                                                                                                                                                                   



89



---

|              |  |                                                                                                                                                                                                                                                                                                        
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                                                                                                                                                                                                
|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)                                                                             
|              | 
|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)                                                                             



90



---

|              |  |                                                                                                                                                                                                                                                                                  
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                                                                                                                                                                          
|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)             
|              | 
|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)                    



91



---

|              |  |                                                                                                                                                                                                                                                                                                                                 
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                                                                                                                                                                                                                                                                                         
|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 (filed as Exhibit 4.43
to Trintechs Annual Report on Form 20-F (File No. 0-30320) for the year ended January 31, 2004 and incorporated herein by reference)
|              | 
|4.44          |  | Share Subscription Agreement dated November 1, 2003 between Trintech Group PLC, Trintech Inc. and Jeffrey Wiggins (filed as Exhibit 4.44 to Trintechs Annual Report on Form 20-F (File
No. 0-30320) for the year ended January 31, 2004 and incorporated herein by reference).                                                 
|              | 
|4.45          |  | Grant to Trintech Technologies Limited from Enterprise Ireland dated April 26, 2004 (filed as Exhibit 4.45 to Trintechs Annual Report on Form 20-F (File No. 0-30320) for the year ended
January 31, 2004 and incorporated herein by reference)                                                                                
|              | 
|8.1           |  | Subsidiaries of Trintech Group PLC (See pages 32 and 33 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.
|- | -----------------------------------------------------------------------



92



---

SIGNATURES



The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.



TRINTECH GROUP PLC(Registrant)By:

/s/    RICHARD PAUL
BYRNER. Paul ByrneChief Financial Officer and President




Date: May 17, 2005



93



---

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

OF TRINTECH GROUP PLC



|                                                           |  |     
|---------------------------------------------------------- |  | ----
|                                                           |  | Page
|Report of Independent Registered Public Accounting Firm    |  | 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



---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



The Board of Directors and Shareholders of

Trintech Group PLC



We have audited the accompanying consolidated balance sheets of Trintech
Group PLC and subsidiaries (the Company) as of January 31, 2004 and 2005, 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, 2005. Our audits also included the financial statement schedule 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 schedule based on our audits.



We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Companys internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys
internal control over financial reporting. Accordingly we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and 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, 2004 and 2005, and the consolidated results of their operations and their cash flows for each of the three years in the period ended January 31, 2005, in
conformity with U.S Generally Accepted Accounting Principles. 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.



ERNST &
YOUNG

Dublin, Ireland



February 25, 2005



F-2



---

TRINTECH GROUP PLC



CONSOLIDATED BALANCE SHEETS

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



|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | -------- | - | ---- | - | -------- | -
|                                                                                                                                                                                             |  | January 31, |         
|                                                                                                                                                                                             |  | 2004        |          |   | 2005 |  
|ASSETS                                                                                                                                                                                       |  |             |          |   |      |   |          |  
|Current assets                                                                                                                                                                               |  |             |          |   |      |   |          |  
|Cash and cash equivalents                                                                                                                                                                    |  | $           | 36,864   |   |      | $ | 39,180   |  
|Accounts receivable, net of allowance for doubtful accounts of $1,595 and $787 at January 31, 2004 and 2005, respectively (note
4)                                                           |  |             | 10,832   |   |      |   | 9,479    |  
|Inventories (note 5)                                                                                                                                                                         |  |             | 824      |   |      |   | 1,184    |  
|Value added taxes                                                                                                                                                                            |  |             | 471      |   |      |   | 531      |  
|Prepaid expenses and other current assets                                                                                                                                                    |  |             | 1,674    |   |      |   | 2,105    |  
|Amounts prepaid to related parties (note 19)                                                                                                                                                 |  |             |         |   |      |   | 451      |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total current assets                                                                                                                                                                         |  |             | 50,665   |   |      |   | 52,930   |  
|Restricted cash (notes 7 and 20)                                                                                                                                                             |  |             | 1,211    |   |      |   | 672      |  
|Property and equipment, net (notes 8 and 9)                                                                                                                                                  |  |             | 988      |   |      |   | 824      |  
|Other non-current assets, net (note 10)                                                                                                                                                      |  |             | 3,994    |   |      |   | 3,147    |  
|Goodwill, net (note 21)                                                                                                                                                                      |  |             | 7,459    |   |      |   | 8,613    |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total assets                                                                                                                                                                                 |  | $           | 64,317   |   |      | $ | 66,186   |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                                         |  |             |          |   |      |   |          |  
|Current liabilities                                                                                                                                                                          |  |             |          |   |      |   |          |  
|Bank overdraft                                                                                                                                                                               |  | $           |         |   |      | $ | 568      |  
|Accounts payable                                                                                                                                                                             |  |             | 4,804    |   |      |   | 4,806    |  
|Accrued payroll and related expenses                                                                                                                                                         |  |             | 1,864    |   |      |   | 1,884    |  
|Deferred consideration                                                                                                                                                                       |  |             | 1,400    |   |      |   | 2,398    |  
|Other accrued liabilities (notes 7 and 11)                                                                                                                                                   |  |             | 4,299    |   |      |   | 3,413    |  
|Value added taxes                                                                                                                                                                            |  |             | 819      |   |      |   | 630      |  
|Warranty reserve                                                                                                                                                                             |  |             | 356      |   |      |   | 395      |  
|Deferred revenues                                                                                                                                                                            |  |             | 8,739    |   |      |   | 8,946    |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total current liabilities                                                                                                                                                                    |  |             | 22,281   |   |      |   | 23,040   |  
|Non-current liabilities                                                                                                                                                                      |  |             |          |   |      |   |          |  
|Capital lease due after more than one year (note 8)                                                                                                                                          |  |             | 84       |   |      |   |         |  
|Government grants repayable and related loans (note 17)                                                                                                                                      |  |             | 157      |   |      |   |         |  
|Provision for lease abandonment (note 7)                                                                                                                                                     |  |             | 441      |   |      |   |         |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total non-current liabilities                                                                                                                                                                |  |             | 682      |   |      |   |         |  
|Series B preference shares, $0.0027 par value:                                                                                                                                               |  |             |          |   |      |   |          |  
|10,000,000 authorized at January 31, 2004 and 2005, respectively                                                                                                                             |  |             |          |   |      |   |          |  
|None issued and outstanding                                                                                                                                                                  |  |             |         |   |      |   |         |  
|Shareholders equity:                                                                                                                                                                        |  |             |          |   |      |   |          |  
|Ordinary Shares, $0.0027 par value: 100,000,000 shares authorized; 30,851,283 and 31,160,091 issued, 30,596,775 and 30,908,635 shares
outstanding at January 31, 2004 and 2005, respectively |  |             | 83       |   |      |   | 84       |  
|Additional paid-in capital                                                                                                                                                                   |  |             | 245,965  |   |      |   | 246,283  |  
|Treasury shares (at cost, 254,508 and 251,456 shares at January 31, 2004 and 2005, respectively)                                                                                             |  |             | (268     | ) |      |   | (416     | )
|                                                                                                                                                                                             |  |            
|Accumulated deficit                                                                                                                                                                          |  |             | (202,175 | ) |      |   | (200,154 | )
|Accumulated other comprehensive loss                                                                                                                                                         |  |             | (2,251   | ) |      |   | (2,651   | )
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total shareholders equity                                                                                                                                                                   |  |             | 41,354   |   |      |   | 43,146   |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  
|Total liabilities and shareholders equity                                                                                                                                                   |  | $           | 64,317   |   |      | $ | 66,186   |  
|                                                                                                                                                                                             |  |             |          |   |      |   |          |  



See accompanying
notes



F-3



---

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF OPERATIONS

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



|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|--------------------------------------------------------------------- |  | ---------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|                                                                      |  | Year ended January 31, |           
|                                                                      |  | 2003                   |            |   | 2004 |   |            | 2005 | 
|Revenue:                                                              |  |                        |            |   |      |   |            |      |  |   |            |  
|Product                                                               |  | $                      | 9,165      |   |      | $ | 10,318     |      |  | $ | 18,848     |  
|License                                                               |  |                        | 22,418     |   |      |   | 22,867     |      |  |   | 23,567     |  
|Service                                                               |  |                        | 11,273     |   |      |   | 9,886      |      |  |   | 13,380     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total revenue                                                         |  |                        | 42,856     |   |      |   | 43,071     |      |  |   | 55,795     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Cost of revenue:                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Product                                                               |  |                        | 11,148     |   |      |   | 7,586      |      |  |   | 13,088     |  
|License                                                               |  |                        | 9,248      |   |      |   | 5,313      |      |  |   | 3,725      |  
|Service                                                               |  |                        | 8,456      |   |      |   | 6,020      |      |  |   | 5,812      |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total cost of revenue                                                 |  |                        | 28,852     |   |      |   | 18,919     |      |  |   | 22,625     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Gross margin                                                          |  |                        | 14,004     |   |      |   | 24,152     |      |  |   | 33,170     |  
|Operating expenses:                                                   |  |                        |            |   |      |   |            |      |  |   |            |  
|Research and development                                              |  |                        | 10,349     |   |      |   | 8,280      |      |  |   | 9,169      |  
|Sales and marketing                                                   |  |                        | 10,297     |   |      |   | 8,689      |      |  |   | 9,473      |  
|General and administrative                                            |  |                        | 15,354     |   |      |   | 10,587     |      |  |   | 12,007     |  
|Restructuring charge (note 22)                                        |  |                        | 4,270      |   |      |   | 745        |      |  |   | 288        |  
|Amortization of purchased intangible assets                           |  |                        | 2,573      |   |      |   | 507        |      |  |   | 847        |  
|Impairment of goodwill (note 21)                                      |  |                        | 12,849     |   |      |   |           |      |  |   |           |  
|Impairment of purchased intangible assets(note 10)                    |  |                        | 3,686      |   |      |   |           |      |  |   |           |  
|Adjustment of acquisition liabilities (note 20)                       |  |                        | 804        |   |      |   |           |      |  |   | (249       | )
|Adjustment of acquisition deferred consideration (note 20)            |  |                        |           |   |      |   | (1,149     | )    |  |   |           |  
|Stock-based compensation                                              |  |                        | 20         |   |      |   |           |      |  |   | 116        |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Total operating expenses                                              |  |                        | 60,202     |   |      |   | 27,659     |      |  |   | 31,651     |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Income (loss) from operations                                         |  |                        | (46,198    | ) |      |   | (3,507     | )    |  |   | 1,519      |  
|Interest income, net                                                  |  |                        | 716        |   |      |   | 268        |      |  |   | 428        |  
|Exchange gain, net                                                    |  |                        | 771        |   |      |   | 79         |      |  |   | 197        |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Income (loss) before provision for income taxes                       |  |                        | (44,711    | ) |      |   | (3,160     | )    |  |   | 2,144      |  
|Provision for income taxes (note 15)                                  |  |                        | (108       | ) |      |   |           |      |  |   | (123       | )
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Net Income (loss)                                                     |  | $                      | (44,819    | ) |      | $ | (3,160     | )    |  | $ | 2,021      |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per Ordinary Share                            |  | $                      | (1.47      | ) |      | $ | (0.10      | )    |  | $ | 0.07       |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Shares used in computing basic net income (loss) per Ordinary Share   |  |                        | 30,559,410 |   |      |   | 30,314,419 |      |  |   | 30,786,268 |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per Ordinary Share                          |  | $                      | (1.47      | ) |      | $ | (0.10      | )    |  | $ | 0.06       |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Shares used in computing diluted net income (loss) per Ordinary Share |  |                        | 30,559,410 |   |      |   | 30,314,419 |      |  |   | 32,361,102 |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Basic net income (loss) per equivalent ADS                            |  | $                      | (2.93      | ) |      | $ | (0.21      | )    |  | $ | 0.13       |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  
|Diluted net income (loss) per equivalent ADS                          |  | $                      | (2.93      | ) |      | $ | (0.21      | )    |  | $ | 0.12       |  
|                                                                      |  |                        |            |   |      |   |            |      |  |   |            |  



See accompanying
notes



F-4



---

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

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



|                                                                                    |  |                         |   |  |                |    |                          |   |         |                |  |   |                    |   |  |                                 |          |   |                                   |   |      |                          |  |   |        |   |  |   |         |  
|----------------------------------------------------------------------------------- |  | ----------------------- | - |  | -------------- | -- | ------------------------ | - | ------- | -------------- |  | - | ------------------ | - |  | ------------------------------- | -------- | - | --------------------------------- | - | ---- | ------------------------ |  | - | ------ | - |  | - | ------- | -
|                                                                                    |  | Number ofOrdinaryShares |   |  | OrdinaryShares |    | AdditionalPaid-inCapital |   |         | TreasuryShares |  |   | AccumulatedDeficit |   |  | DeferredStock-basedCompensation |          |   | AccumulatedOtherComprehensiveLoss |   |      | TotalShareholdersEquity | 
|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                                                          |  | 363,448                 |   |  |                |   |                          |   | 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  |  
|Issuance of Ordinary Shares on exercise of options (a)                              |  | 308,808                 |   |  |                | 1  |                          |   | 282     |                |  |   |                   |   |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | 283     |  
|Expense of share issues                                                             |  |                        |   |  |                |   |                          |   | (10     | )              |  |   |                   |   |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | (10     | )
|Purchase of treasury shares                                                         |  | (135,440                | ) |  |                |   |                          |   |        |                |  |   | (338               | ) |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | (338    | )
|Reissue of treasury shares                                                          |  | 138,492                 |   |  |                |   |                          |   | (70     | )              |  |   | 190                |   |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | 120     |  
|Stock-based compensation                                                            |  |                        |   |  |                |   |                          |   | 116     |                |  |   |                   |   |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | 116     |  
|Net income                                                                          |  |                        |   |  |                |   |                          |   |        |                |  |   |                   |   |  |                                 | 2,021    |   |                                   |   |     |                          |  |   |       |   |  |   | 2,021   |  
|Currency translation adjustment                                                     |  |                        |   |  |                |   |                          |   |        |                |  |   |                   |   |  |                                 |         |   |                                   |   |     |                          |  |   | (400   | ) |  |   | (400    | )
|                                                                                    |  |                         |   |  |                |    |                          |   |         |                |  |   |                    |   |  |                                 |          |   |                                   |   |      |                          |  |   |        |   |  |   |         |  
|Comprehensive income                                                                |  |                        |   |  |                |   |                          |   |        |                |  |   |                   |   |  |                                 |         |   |                                   |   |     |                          |  |   |       |   |  |   | 1,621   |  
|                                                                                    |  |                         |   |  |                |    |                          |   |         |                |  |   |                    |   |  |                                 |          |   |                                   |   |      |                          |  |   |        |   |  |   |         |  
|Balance at January 31, 2005                                                         |  | 30,908,635              |   |  | $              | 84 |                          | $ | 246,283 |                |  | $ | (416               | ) |  | $                               | (200,154 | ) |                                   | $ |     |                          |  | $ | (2,651 | ) |  | $ | 43,146  |  
|                                                                                    |  |                         |   |  |                |    |                          |   |         |                |  |   |                    |   |  |                                 |          |   |                                   |   |      |                          |  |   |        |   |  |   |         |  

---

|(a) | See note 14 to these statements
|--- | -------------------------------



F-5



---

TRINTECH GROUP PLC



CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands)



|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|---------------------------------------------------------------------------------------- |  | ---------------------- | -------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                         |  | Year ended January 31, |         
|                                                                                         |  | 2003                   |          |   | 2004 |   |        | 2005 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |                        |          |   |      |   |        |      |  |   |        |  
|Net income (loss)                                                                        |  | $                      | (44,819  | ) |      | $ | (3,160 | )    |  | $ | 2,021  |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                        |          |   |      |   |        |      |  |   |        |  
|Depreciation, amortization and impairment                                                |  |                        | 29,461   |   |      |   | 3,061  |      |  |   | 1,567  |  
|Stock-based compensation                                                                 |  |                        | 20       |   |      |   |       |      |  |   | 116    |  
|(Profit) on marketable securities                                                        |  |                        | (569     | ) |      |   |       |      |  |   |       |  
|Purchase of marketable securities                                                        |  |                        | (206,867 | ) |      |   |       |      |  |   |       |  
|Sale of marketable securities                                                            |  |                        | 255,412  |   |      |   |       |      |  |   |       |  
|Effect of changes in foreign currency exchange rates                                     |  |                        | (1,779   | ) |      |   | 673    |      |  |   | (384   | )
|Changes in operating assets and liabilities:                                             |  |                        |          |   |      |   |        |      |  |   |        |  
|Inventories                                                                              |  |                        | 1,528    |   |      |   | 2,378  |      |  |   | (324   | )
|Accounts receivable                                                                      |  |                        | 8,179    |   |      |   | 2,667  |      |  |   | 2,917  |  
|Prepaid expenses and other assets                                                        |  |                        | 274      |   |      |   | (1,020 | )    |  |   | (1,568 | )
|Amounts prepaid to related parties                                                       |  |                        |          |   |      |   |        |      |  |   | (451   | )
|Value added tax receivable                                                               |  |                        | (10      | ) |      |   | 223    |      |  |   | (32    | )
|Accounts payable                                                                         |  |                        | (2,836   | ) |      |   | 301    |      |  |   | (224   | )
|Accrued payroll and related expenses                                                     |  |                        | (1,193   | ) |      |   | (685   | )    |  |   | (19    | )
|Deferred revenues                                                                        |  |                        | (229     | ) |      |   | (73    | )    |  |   | 52     |  
|Value added tax payable                                                                  |  |                        | (67      | ) |      |   | 411    |      |  |   | (236   | )
|Warranty reserve                                                                         |  |                        | 136      |   |      |   | (344   | )    |  |   | 13     |  
|Government grants repayable and related loans                                            |  |                        |         |   |      |   | (399   | )    |  |   | (168   | )
|Other accrued liabilities                                                                |  |                        | (547     | ) |      |   | (4,403 | )    |  |   | (575   | )
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Net cash provided by operating activities                                                |  |                        | 36,094   |   |      |   | (370   | )    |  |   | 2,705  |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |  |                        |          |   |      |   |        |      |  |   |        |  
|                                                                                         |  |                        |         
|Purchases of property and equipment                                                      |  |                        | (283     | ) |      |   | (605   | )    |  |   | (528   | )
|Payments relating to acquisitions                                                        |  |                        | (2,270   | ) |      |   | (6,855 | )    |  |   | (771   | )
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Net cash used in investing activities                                                    |  |                        | (2,553   | ) |      |   | (7,460 | )    |  |   | (1,299 | )
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |                        |          |   |      |   |        |      |  |   |        |  
|                                                                                         |  |                        |         
|Reductions from restricted cash deposits                                                 |  |                        | 2,237    |   |      |   | 1,921  |      |  |   | 539    |  
|Principal payments on capital leases                                                     |  |                        | (443     | ) |      |   | (446   | )    |  |   | (380   | )
|Issuance of ordinary shares                                                              |  |                        | 123      |   |      |   | 761    |      |  |   | 403    |  
|Purchases of treasury shares                                                             |  |                        | (140     | ) |      |   | (512   | )    |  |   | (338   | )
|Expenses of share issue                                                                  |  |                        | (19      | ) |      |   |       |      |  |   | (10    | )
|Proceeds under bank overdraft facility                                                   |  |                        |         |   |      |   |       |      |  |   | 568    |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Net cash provided by (used in) financing activities                                      |  |                        | 1,758    |   |      |   | 1,724  |      |  |   | 782    |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                        | 35,299   |   |      |   | (6,106 | )    |  |   | 2,188  |  
|Effect of exchange rate changes on cash and cash equivalents                             |  |                        | 510      |   |      |   | 411    |      |  |   | 128    |  
|Cash and cash equivalents at beginning of period                                         |  |                        | 6,750    |   |      |   | 42,559 |      |  |   | 36,864 |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Cash and cash equivalents at end of period                                               |  | $                      | 42,559   |   |      | $ | 36,864 |      |  | $ | 39,180 |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Supplemental disclosure of cash flow information:                                        |  |                        |          |   |      |   |        |      |  |   |        |  
|                                                                                         |  |                        |         
|Interest paid                                                                            |  | $                      | 53       |   |      | $ | 85     |      |  | $ | 30     |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Taxes paid                                                                               |  | $                      | 339      |   |      | $ | 110    |      |  | $ | 584    |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  
|Supplemental disclosure of non-cash flow information:                                    |  |                        |          |   |      |   |        |      |  |   |        |  
|                                                                                         |  |                        |         
|Acquisition of property and equipment under capital leases                               |  | $                      | 331      |   |      | $ | 87     |      |  | $ |       |  
|Reissue of treasury shares                                                               |  | $                      |         |   |      | $ | 606    |      |  | $ | 120    |  
|                                                                                         |  |                        |          |   |      |   |        |      |  |   |        |  



See accompanying
notes



F-6



---

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 markets: electronic PoS systems that securely process card-payment transactions in a physical point-of-sale (PoS) environment and 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, merchants and other financial transaction processors in the United States, United Kingdom, 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 income (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 U.S. generally accepted accounting principles (U.S. GAAP)
and include Trintech Group Plc and its wholly-owned subsidiaries. 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 in conformity with U.S. GAAP
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



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, 2004 and 2003. Copies of full group accounts for each of the years ended January 31, 2004 and 2003 have been so annexed to the relevant annual
returns, and a copy of the full group accounts for the year ended January 31, 2005 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 2005.



F-7



---

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 U.S. 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.



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 Commissions 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 production, modification or customization of the software, the Company recognizes 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 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.



F-8



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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. The Company obtains VSOE for maintenance from substantive renewal rates based on consistent
percentages of the license fee.



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.



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 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.



F-9



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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 (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities, 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, and related guidance. 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. SFAS No. 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, 2005, 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 e-commerce payment management solution aimed at large retailers, financial
institutions, network operators and other multiple service providers. During January 2003, the Company recognized other non-current asset impairments of US$1.7 million in relation to the ePS product, equivalent to the carrying value of the assets,
which reduced the carrying value of the assets to US$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



F-10



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



described in Note 20. 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, 2003, 2004 and 2005, was US$7,292,000, US$1,641,000 and US$847,000, 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 20. In accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, the Company no longer amortizes goodwill but tests it at least
annually for impairment.



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. 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, (1) significant under performance
relative to historical or expected operating results, (2) significant changes in the manner of use of the acquired assets or the strategy for the Companys overall business, (3) significant negative industry or economic trends, (4) a
significant decline in the Companys stock price for a sustained period, and (5) 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 tests for 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 goodwill impairments of US$36,540,000 and US$12,849,000 for fiscal 2002 and 2003, respectively. No
impairments were recognized for fiscal 2004 and 2005.



The
Company also assesses the impairment of long-lived assets, in accordance with SFAS No. 144, Accounting for the Impairment of Disposal of Long-Lived Assets on a periodic basis. SFAS 144 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. For the purpose of SFAS No. 144,
impairment is the condition that exists when the carrying value of a long-lived asset exceeds its fair value. An impairment loss shall be recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value.



Factors the Company considers important which could trigger an
impairment review include, but are not limited to, (1) increased customer competition, (2) significant changes in the manner of use of the acquired assets or the strategy for the Companys overall business and (3) significant negative industry
or economic trends. When the Company determines that an impairment review of other long-lived intangible assets is required, the Company tests for impairment using a projected undiscounted cash flow model.



The Company recognized other non-current asset impairments, principally a
non-compete covenant and purchased technology, of US$3.7 million for fiscal 2003. No further impairments were recognized were recognized for fiscal 2004 and 2005.



F-11



---

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 income (loss) per share is calculated using net income (loss) divided by the weighted-average number of ordinary shares outstanding for the period.
Diluted net income per share is calculated using net income (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
were excluded from the calculations of the diluted net income (loss) per share for fiscal 2003 and 2004 because all such shares were anti-dilutive. In fiscal 2005, 492,068 potential ordinary shares were excluded from the calculations of the diluted
net income (loss) per share because the shares were anti-dilutive.



Basic and diluted net income (loss) per share is calculated in accordance with SFAS No. 128 Earnings per Share.



Concentration of Credit Risk



The Company sells its products primarily to banks, merchants 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. The Company had an allowance for doubtful accounts of approximately US$1.6 million
and US$787,000 at January 31, 2004 and 2005 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, United Kingdom
and Ireland. At January 31, 2005, US$39.2 million 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



F-12



---

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 were credited to a balance sheet liability
account and all were repaid by January 31, 2005. The Company repaid approximately US$399,000 and US$78,000 in relation to these loans during fiscal 2004 and fiscal 2005, respectively.



Stock-based 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-based compensation and credited to additional paid-in capital.



The Company has followed the provisions of SFAS No. 123, Accounting for Stock-Based Compensation 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 No. 123 in determining the fair value of the
warrants and options issued and the resultant compensation expense.



In November 2000, in connection with the acquisition of Exceptis Technologies Limited, the Company exchanged unvested options in that entity for Trintech options. The Company recorded US$20,000 in stock-based compensation related to these
options in 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 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 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, 2005, 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 SFAS
No. 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 2003, 2004 and 2005: risk free interest rate of 3%, 2% and 3% respectively; dividend yields of 0%; volatility factors of the expected market price of the Companys ordinary shares of 1.1 in
fiscal 2003, 1.1 for fiscal 2004 and .92 for fiscal 2005, and a weighted-average expected life of the options of four years.



F-13



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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,      |        
|                                                                                                                                            |  | 2003                        |         |   | 2004 |   |        | 2005 | 
|                                                                                                                                            |  | (U.S. dollars in thousands) |        
|Net income (loss), as reported                                                                                                              |  | $                           | (44,819 | ) |      | $ | (3,160 | )    |  | $ | 2,021  |  
|                                                                                                                                            |  |                             |        
|Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects                           |  |                             | 20      |   |      |   |       |      |  |   |       |  
|                                                                                                                                            |  |                             |        
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax
effects |  |                             | (5,171  | ) |      |   | (3,797 | )    |  |   | (2,088 | )
|                                                                                                                                            |  |                             |         |   |      |   |        |      |  |   |        |  
|Pro forma net loss                                                                                                                          |  | $                           | (49,970 | ) |      | $ | (6,957 | )    |  | $ | (67    | )
|                                                                                                                                            |  |                             |         |   |      |   |        |      |  |   |        |  
|Earnings (loss) per share:                                                                                                                  |  |                             |         |   |      |   |        |      |  |   |        |  
|Basicas reported                                                                                                                           |  | $                           | (1.47   | ) |      | $ | (0.10  | )    |  | $ | 0.07   |  
|Basicpro forma                                                                                                                             |  | $                           | (1.64   | ) |      | $ | (0.23  | )    |  | $ | (0.00  | )
|Dilutedas reported                                                                                                                         |  | $                           | (1.47   | ) |      | $ | (0.10  | )    |  | $ | 0.06   |  
|Dilutedpro forma                                                                                                                           |  | $                           | (1.64   | ) |      | $ | (0.23  | )    |  | $ | (0.00  | )



Advertising and
Promotion Expense



All costs associated with advertising
are expensed as incurred. Advertising and promotion expense was US$777,000, US$636,000 and US$846,000 for fiscal 2003, 2004 and 2005, respectively.



Inventories



Inventories are stated at the lower of cost or market value.



Accounting for Income Taxes



Deferred income taxes are recognized based on temporary timing differences between the financial statement and tax bases of assets and liabilities.
Deferred tax assets and liabilities are measured using the statutory tax rates and laws expected to apply to taxable income in the years in which temporary differences are expected to reverse. Valuation allowances are provided against the net
deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependant upon the generation of future
taxable income and the timing of the temporary differences becoming deductible. Management considers, among other available information, scheduled reversals of deferred tax liabilities, projected future taxable income and other matters in making
this assessment.



F-14



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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 fiscal 2003, 2004 and 2005:



|                                                |  |                             |      |   |      |   |      |      |  |   |      |  
|----------------------------------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                                |  | Year ended January 31       |     
|                                                |  | 2003                        |      |   | 2004 |   |      | 2005 | 
|                                                |  | (U.S. dollars in thousands) |     
|Opening reserve balance                         |  | $                           | 397  |   |      | $ | 625  |      |  | $ | 356  |  
|Deductions                                      |  |                             | (397 | ) |      |   | (516 | )    |  |   | (138 | )
|Provision for new product warranties issued     |  |                             | 102  |   |      |   | 155  |      |  |   | 159  |  
|Adjustment of pre-existing warranties provision |  |                             | 463  |   |      |   | 30   |      |  |   |     |  
|Exchange differences                            |  |                             | 60   |   |      |   | 62   |      |  |   | 18   |  
|                                                |  |                             |      |   |      |   |      |      |  |   |      |  
|Closing reserve balance                         |  | $                           | 625  |   |      | $ | 356  |      |  | $ | 395  |  
|                                                |  |                             |      |   |      |   |      |      |  |   |      |  



Recent Accounting
Pronouncements



In July 2004, the FASB ratified EITF
consensus on Issue No. 02-14, Whether an Investor Should Apply the Equity Method of Accounting to Investments Other Than Common Stock, which provides guidance regarding application of the equity method of accounting to investments other
than common stock. EITF Issue No. 02-14 will be effective beginning with our second quarter of fiscal 2006. We do not believe the adoption of EITF Issue No. 02-14 will have a material impact on the Companys consolidated financial statements.



In December, 2004, the FASB issued SFAS No. 123 (revised
2004), Share-Based Payment (SFAS No. 123(R)), which is a revision of SFAS No. 123. SFAS No. 123(R) supersedes APB No. 25, and amends SFAS No. 95, Statement of Cash Flows. Generally the approach in SFAS No. 123(R)
is similar to the approach described in SFAS No. 123. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Pro forma
disclosure is no longer an alternative upon adoption of SFAS No. 123(R).



For Trintech, SFAS No. 123(R) must be adopted no later than the fiscal year beginning on February 1, 2006. Early adoption is permitted in periods in which financial statements have not yet been issued. SFAS No. 123(R)
allows companies to adopt its requirements using one of two methods:



| |  |  | A modified prospective method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS No. 123(R) for all
share-based payments granted after the effective date and (b) based on the requirements of SFAS No. 123(R) for all awards granted to employees prior to the effective date of SFAS No. 123(R) that remain unvested on the effective date.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A Prospective method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts
previously recognized under SFAS No. 123(R) for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company has not yet decided on which method it will adopt. Pro Forma
disclosure currently required under SFAS No. 123 is included in Note 1 Stock-Based Compensation. The Company is currently assessing the impact of SFAS 123(R) on its results of operations.



F-15



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Reclassifications



As of January 31, 2004, the Company presented restricted cash as a current asset in the balance sheet. As of January 31,
2005, the Company has determined that restricted cash is a long-term asset as at January 31, 2004 and 2005, and therefore has reclassified restricted cash in the 2004 balance sheet.



As of January 31, 2004, the Company presented unbilled receivables within prepaid expenses and other current assets in the
balance sheet. As of January 31, 2005, the Company has deemed unbilled receivables a component of accounts receivable. Therefore unbilled receivables have been reclassified into accounts receivable in the 2004 balance sheet.



|2. | Marketable Securities
|-- | ---------------------



Marketable securities are considered to be trading securities per SFAS No. 115 and are carried on the balance sheet at their market value. The change in
unrealized gains (losses) included in net income (loss) are as follows:



|                                       |  |                             |     |   |      |   |      |  |   |  
|-------------------------------------- |  | --------------------------- | --- | - | ---- | - | ---- |  | - | -
|                                       |  | Year ended January 31,     
|                                       |  | 2003                        |     |   | 2004 |   | 2005
|                                       |  | (U.S. dollars in thousands)
|Unrealized gain at beginning of year   |  | $                           | 61  |   |      | $ |     |  | $ | 
|Included in income (loss) for the year |  |                             | (61 | ) |      |   |     |  |   | 
|                                       |  |                             |     |   |      |   |      |  |   |  
|Unrealized gain at end of year         |  | $                           |    |   |      | $ |     |  | $ | 
|                                       |  |                             |     |   |      |   |      |  |   |  



|3. | Revolving Credit Facility: Bank Overdraft Facility and Overdrafts
|-- | -----------------------------------------------------------------



The Company has an unsecured overdraft facility of 2.5 million (approximately US$3.2 million) from Bank of Ireland. Advances under this facility
bear interest at the Banks prime overdraft rate, 2.65% as at January 31, 2005. The bank overdraft amount of US$568,000 at January 31,2005 represented outstanding cheques as at this date. The facility does not have a stated expiration date, but
all amounts drawn thereunder are repayable on demand.



|4. | Accounts Receivable
|-- | -------------------



The accounts receivable balance includes billed and unbilled receivables as follows:



|                          |  |                             |        |      |   |      
|------------------------- |  | --------------------------- | ------ | ---- | - | -----
|                          |  | As of January 31,          
|                          |  | 2004                        |        | 2005
|                          |  | (U.S. dollars in thousands)
|Billed receivables, net   |  | $                           | 9,800  |      | $ | 8,338
|Unbilled receivables, net |  |                             | 1,032  |      |   | 1,141
|                          |  |                             |        |      |   |      
|Total                     |  | $                           | 10,832 |      | $ | 9,479
|                          |  |                             |        |      |   |      



Included in the
unbilled receivables balance above are the unbilled percentage of completion amounts of US$127,000 for fiscal 2005 and US$268,000 for fiscal 2004.



F-16



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The Company makes judgments as to its ability to collect outstanding receivables and provide
allowances for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at differing
rates, based upon the age of the receivable. In determining these percentages, the Company analyzes its historical collection experience and current economic trends. If the historical data the Company uses to calculate the allowance provided for
doubtful accounts does not reflect the future ability to collect outstanding receivables, additional provisions for doubtful accounts may be needed and the future results of operations could be materially affected.



|5. | Inventories
|-- | -----------



|               |  |                             |     |      |   |      
|-------------- |  | --------------------------- | --- | ---- | - | -----
|               |  | As of January 31,          
|               |  | 2004                        |     | 2005
|               |  | (U.S. dollars in thousands)
|Raw materials  |  | $                           | 95  |      | $ | 693  
|Finished goods |  |                             | 729 |      |   | 491  
|               |  |                             |     |      |   |      
|Total          |  | $                           | 824 |      | $ | 1,184
|               |  |                             |     |      |   |      



|6. | 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
expected to occur within the next 12 months. The Company enters into these foreign exchange contracts to hedge anticipated sales or purchase transactions in the normal course of business for which there is 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.



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 held by the Company as of January 31, 2004 and January 31, 2005 did not qualify as accounting
hedges as of January 31, 2004 and January 31, 2005, respectively. The fair value losses on derivatives held as of January 31, 2004 and January 31, 2005 were recognized in the Consolidated Statements of Operations.



As of January 31, 2003 and 2004 the Company had no forward exchange
contracts. As of January 31, 2005, the Company had five forward exchange contracts maturing in 2005 to sell US$2.25 million and receive euro in return. The fair value of the contracts as of January 31, 2005 was US$39,000 negative.



F-17



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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. As of January 31, 2005 the company had no currency options outstanding.



|                                   |  |                             |        |   |           |   |        |                |  |   |           |   |  |   |        |  
|---------------------------------- |  | --------------------------- | ------ | - | --------- | - | ------ | -------------- |  | - | --------- | - |  | - | ------ | -
|                                   |  | Year ended January 31,      |       
|                                   |  | 2004                        |        |   | 2005      |  
|                                   |  | CarryingAmount              |        |   | FairValue |   |        | CarryingAmount |  |   | FairValue |  
|                                   |  | (U.S. dollars in thousands) |       
|Non-Derivatives                    |  |                             |        |   |           |   |        |                |  |   |           |   |  |   |        |  
|Cash and cash equivalents          |  | $                           | 36,864 |   |           | $ | 36,864 |                |  | $ | 39,180    |   |  | $ | 39,180 |  
|Restricted cash                    |  | $                           | 1,211  |   |           | $ | 1,211  |                |  | $ | 672       |   |  | $ | 672    |  
|Accounts receivable, net           |  | $                           | 10,832 |   |           | $ | 10,832 |                |  | $ | 9,479     |   |  | $ | 9,479  |  
|Accounts payable                   |  | $                           | 4,804  |   |           | $ | 4,804  |                |  | $ | 4,806     |   |  | $ | 4,806  |  
|                                   |  |                             |        |  
|Derivatives                        |  |                             |        |   |           |   |        |                |  |   |           |   |  |   |        |  
|Foreign exchange currency options  |  | $                           | (80    | ) |           | $ | (80    | )              |  | $ |          |   |  | $ |       |  
|Foreign exchange forward contracts |  | $                           |       |   |           | $ |       |                |  | $ | (39       | ) |  | $ | (39    | )



| |  |  | The fair value of cash equivalents, accounts receivable and accounts payable approximates fair value due to the short maturities of those instruments.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The fair value of the foreign exchange currency options was obtained from financial institutions.
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | The fair value of the contracts was calculated as the present value of the settlement amount less the current valuation based on the January 31, 2005 spot rate.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



The carrying amounts for derivatives in the
table are included in the statements of financial position under Other Accrued Liabilities caption.



|7. | Operating Lease Commitments
|-- | ---------------------------



The Companys significant operating leases are for the premises in Dublin, Ireland; Frankfurt, Germany; Dallas, Texas; and London, United Kingdom. In
Dublin, the Company leases its corporate headquarters from Cyril P. McGuire, an officer and director of the Company, and John McGuire, a former 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 2007. 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$2,206,000, US$2,069,000 and US$1,823,000 for the years ended January 31, 2003, 2004, and 2005, respectively. For the year ended January
31, 2005, lease abandonment costs totaled US$504,000.



For its
Frankfurt facility and the Montague Court, Dublin (facility 3) premises, the Company has provided security deposits of US$51,000 and US$227,000 respectively. These amounts are classified as restricted cash on the Consolidated Balance Sheets.



F-18



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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$3.9 million at January 31, 2005. The Company has provisions for abandonments of approximately US$424,000 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 in thousands)
|Year ending January 31,                  |  |                             |        |                      |   |      
|2006                                     |  | $                           | 3,011  |                      | $ | 802  
|2007                                     |  |                             | 2,663  |                      |   | 791  
|2008                                     |  |                             | 1,612  |                      |   | 791  
|2009                                     |  |                             | 1,548  |                      |   | 937  
|2010                                     |  |                             | 1,690  |                      |   | 362  
|Thereafter                               |  |                             | 1,975  |                      |   |     
|                                         |  |                             |        |                      |   |      
|Total minimum lease payments outstanding |  | $                           | 12,499 |                      | $ | 3,683
|                                         |  |                             |        |                      |   |      



Provisions for
abandonments relating to future minimum lease payments of US$424,000 are included in other accrued liabilities at January 31, 2005.



|8. | 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 atJanuary 31, |       
|                               |  | 2004                         |        |   | 2005 |  
|                               |  | (U.S. dollars in thousands)  |       
|Computers and office equipment |  | $                            | 2,170  |   |      | $ | 2,284  |  
|Motor vehicles                 |  |                              | 70     |   |      |   | 73     |  
|                               |  |                              |        |   |      |   |        |  
|Total cost                     |  |                              | 2,240  |   |      |   | 2,357  |  
|Accumulated depreciation       |  |                              | (2,027 | ) |      |   | (2,315 | )
|                               |  |                              |        |   |      |   |        |  
|Total, net                     |  | $                            | 213    |   |      | $ | 42     |  
|                               |  |                              |        |   |      |   |        |  



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, 2005 (US dollars in thousands):



|                                            |  |   |    |  
|------------------------------------------- |  | - | -- | -
|Year ending January 31,                     |  |   |    |  
|2006 minimum lease payments                 |  |   | 85 |  
|Less: Amount representing interest          |  |   | (2 | )
|                                            |  |   |    |  
|Present value of net minimum lease payments |  | $ | 83 |  
|                                            |  |   |    |  



The present value of
net minimum lease payments as of January 31, 2005 was US$83,000 which is due to be paid in total during fiscal 2006.



F-19



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|9. | Property and Equipment
|-- | ----------------------



Property and equipment consist of the following:



|                               |  |                             |         |   |      |   |         |  
|------------------------------ |  | --------------------------- | ------- | - | ---- | - | ------- | -
|                               |  | Year ended January 31,      |        
|                               |  | 2004                        |         |   | 2005 |  
|                               |  | (U.S. dollars in thousands) |        
|Computers and office equipment |  | $                           | 8,351   |   |      | $ | 8,900   |  
|Motor vehicles                 |  |                             | 70      |   |      |   | 116     |  
|Fixtures and fittings          |  |                             | 2,855   |   |      |   | 3,024   |  
|                               |  |                             |         |   |      |   |         |  
|Total cost                     |  |                             | 11,276  |   |      |   | 12,040  |  
|Accumulated depreciation       |  |                             | (10,288 | ) |      |   | (11,216 | )
|                               |  |                             |         |   |      |   |         |  
|Property and equipment, net    |  | $                           | 988     |   |      | $ | 824     |  
|                               |  |                             |         |   |      |   |         |  



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.



|10. | Other Non-Current Assets
|--- | ------------------------



Other non-current asset amortization for the years ended January 31, 2003, 2004 and 2005 was US$7,292,000, US$1,641,000 and US$847,000 respectively. Other
noncurrent asset amortization is estimated to be approximately US$847,000 in the year ending January 31, 2006, US$832,000 in the year ended 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$292,000 in the year ending January 31, 2010.



|                                      |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|------------------------------------- |  | --------------------------- | ------ | -------------- | - | --------------------------- |  | --- | ------ | ------------------- | - | -------------- |  | ----------------------- | ------ | --- | - | ----- |  | - | ------ |  | - | -----
|                                      |  | As of January 31, 2004      |        |                |   | As of January 31, 2005      |  |    
|                                      |  | 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                  |  | $                           | 14,926 |                | $ | 3,392                       |  | $   | 11,470 |                     | $ | 64             |  | $                       | 14,926 |     | $ | 3,392 |  | $ | 11,493 |  | $ | 41   
|Trade names                           |  |                             | 120    |                |   |                            |  |     | 10     |                     |   | 110            |  |                         | 120    |     |   |      |  |   | 50     |  |   | 70   
|Customer base                         |  |                             | 9,735  |                |   | 567                         |  |     | 5,348  |                     |   | 3,820          |  |                         | 9,735  |     |   | 567   |  |   | 6,132  |  |   | 3,036
|Covenants                             |  |                             | 2,492  |                |   | 1,232                       |  |     | 1,260  |                     |   |               |  |                         | 2,492  |     |   | 1,232 |  |   | 1,260  |  |   |     
|Total identifiable Intangible         |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|                                      |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      
|Assets                                |  | $                           | 27,273 |                | $ | 5,191                       |  | $   | 18,088 |                     | $ | 3,994          |  | $                       | 27,273 |     | $ | 5,191 |  | $ | 18,935 |  | $ | 3,147
|                                      |  |                             |        |                |   |                             |  |     |        |                     |   |                |  |                         |        |     |   |       |  |   |        |  |   |      



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, reflected



F-20



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



managements best estimates. As a result, the Company recorded a US$3.7 million impairment charge in the year 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 are amortized using the straight-line method over their remaining estimated useful economic lives.



During fiscal 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 quarters of fiscal 2004 and fiscal 2005, the Company completed its annual impairment tests and assessments of the carrying value of
identifiable indefinite-lived intangible assets and goodwill as required by SFAS 142 and determined its recorded non-current assets were not impaired as of January 31, 2004 and January 31, 2005.



|11. | Other Accrued Liabilities
|--- | -------------------------



Other accrued liabilities consist of the following:



|                                |  |                             |       |      |   |      
|------------------------------- |  | --------------------------- | ----- | ---- | - | -----
|                                |  | As of January 31,          
|                                |  | 2004                        |       | 2005
|                                |  | (U.S. dollars in thousands)
|Provision for lease abandonment |  | $                           | 541   |      | $ | 424  
|Other                           |  |                             | 3,758 |      |   | 2,989
|                                |  |                             |       |      |   |      
|Total                           |  | $                           | 4,299 |      | $ | 3,413
|                                |  |                             |       |      |   |      



|12. | 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, 2003 and 2004, 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, 2005, the Company had repurchased 753,396 shares at a cost of approximately US$990,000. As of January 31, 2005 approximately US$4.0 million remained available for future
repurchases under this program.



In fiscal 2005 the
Companys Advisory Board was issued options to purchase 88,000 of the Companys Ordinary Shares (44,000 equivalent ADSs) at an exercise price of US$2.63 (US$5.25 per equivalent ADS) granted at fair market value on the date of grant. The
options were treated as non employee stock-based compensation under SFAS No. 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-based compensation for the period was measured as the fair market value of the option, determined using the Black-Scholes method on the grant date multiplied by the number
of options. The option grants vested immediately, resulting in the full stock-based compensation expense of US$101,000 relating to these options being recognized in the three months ended April 30, 2004. An additional US$15,000 of non-employee
stock-based compensation was recognized in fiscal 2005.



F-21



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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 Technologies Limited, the Company exchanged unvested options in that entity for Trintech options. The Company recorded US$20,000, US$nil and US$nil in stock-based compensation related to these options in
the years ended January 31, 2003, 2004 and 2005 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 income 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.



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 and are recorded in accordance with U.S. GAAP. There were no dividends declared or payable by the Company in any of the
years presented. At January 31, 2003, 2004 and 2005, the Company did not have any profits available for distribution.



|13. | Net Income (Loss) Per Ordinary Share
|--- | ------------------------------------



|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|--------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------- | ---------- | - | ---- | - | ---------- | ---- |  | - | ----------
|                                                                                                                      |  | Year ended January 31,                            
|                                                                                                                      |  | 2003                                               |            |   | 2004 |   |            | 2005
|                                                                                                                      |  | (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 |  | $                                                  | (44,819    | ) |      | $ | (3,160     | )    |  | $ | 2,021     
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Denominator:                                                                                                          |  |                                                    |            |   |      |   |            |      |  |   |           
|Denominator for basic earnings per Shareweighted-average Ordinary Shares                                             |  |                                                    | 30,559,410 |   |      |   | 30,314,419 |      |  |   | 30,786,268
|Effect of employee stock options                                                                                      |  |                                                    |           |   |      |   |           |      |  |   | 1,574,834 
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Denominator for diluted net income (loss) per Ordinary Share                                                          |  |                                                    | 30,559,410 |   |      |   | 30,314,419 |      |  |   | 32,361,102
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Basic net income (loss) per Ordinary Share                                                                            |  | $                                                  | (1.47      | ) |      | $ | (0.10      | )    |  | $ | 0.07      
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Diluted net income (loss) per Ordinary Share                                                                          |  | $                                                  | (1.47      | ) |      | $ | (0.10      | )    |  | $ | 0.06      
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|ADS used in computing basic net income (loss) per equivalent ADS                                                      |  |                                                    | 15,279,705 |   |      |   | 15,157,210 |      |  |   | 15,393,134
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|ADS used in computing diluted net income (loss) per equivalent ADS                                                    |  |                                                    | 15,279,705 |   |      |   | 15,157,210 |      |  |   | 16,180,551
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Basic net income (loss) per ADS                                                                                       |  | $                                                  | (2.93      | ) |      | $ | (0.21      | )    |  | $ | 0.13      
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           
|Diluted net income (loss) per ADS                                                                                     |  | $                                                  | (2.93      | ) |      | $ | (0.21      | )    |  | $ | 0.12      
|                                                                                                                      |  |                                                    |            |   |      |   |            |      |  |   |           



F-22



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|14. | Employee Benefit Plans
|--- | ----------------------



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). An aggregate of 6,700,000 Ordinary Shares (3,350,000 equivalent ADSs) has been allocated for
issue collectively under the Stock Plans. 1,874,778 Ordinary Shares (937,389 equivalent ADSs) remain available for option grants 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, 2005 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, 2005, 350,188 Ordinary Shares (175,094 equivalent ADSs) had been issued under this plan, of which 138,492 Ordinary Shares (69,246 equivalent ADSs) were issued for a total
consideration of approximately US$120,000 during the year ended January 31, 2005.



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



F-23



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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, 2003, 2004 and 2005 is as follows:



|                                 |  |                  |   |                  |                                |                  |         |           |   |                                |   |         |  |           |                                |  |   |     
|-------------------------------- |  | ---------------- | - | ---------------- | ------------------------------ | ---------------- | ------- | --------- | - | ------------------------------ | - | ------- |  | --------- | ------------------------------ |  | - | ----
|                                 |  | January 31, 2003 |   | January 31, 2004 |                                | January 31, 2005
|                                 |  | Options          |   |                  | Weighted-averageexercise price |                  | Options |           |   | Weighted-averageexercise price |   | Options |  |           | Weighted-averageexercise price
|Outstanding at beginning of year |  | 4,153,708        |   |                  | $                              | 10.54            |         | 4,438,432 |   |                                | $ | 6.67    |  | 4,515,240 |                                |  | $ | 4.32
|Granted                          |  | 1,826,078        |   |                  |                                | 0.90             |         | 1,710,500 |   |                                |   | 1.28    |  | 1,813,050 |                                |  |   | 2.52
|Cancelled                        |  | (400,000         | ) |                  |                                | 11.56            |         | (950,116  | ) |                                |   | 7.37    |  | (836,656  | )                              |  |   | 7.44
|Forfeited                        |  | (1,113,976       | ) |                  |                                | 10.01            |         | (471,000  | ) |                                |   | 10.92   |  | (353,674  | )                              |  |   | 7.07
|Exercised                        |  | (27,378          | ) |                  |                                | 0.73             |         | (212,576  | ) |                                |   | 0.73    |  | (312,738  | )                              |  |   | 0.92
|                                 |  |                  |   |                  |                                |                  |         |           |   |                                |   |         |  |           |                                |  |   |     
|Outstanding at end of year       |  | 4,438,432        |   |                  | $                              | 6.67             |         | 4,515,240 |   |                                | $ | 4.32    |  | 4,825,222 |                                |  | $ | 3.12
|                                 |  |                  |   |                  |                                |                  |         |           |   |                                |   |         |  |           |                                |  |   |     
|Exercisable at end of year.      |  | 1,941,874        |   |                  | $                              | 10.71            |         | 2,235,096 |   |                                | $ | 6.89    |  | 2,312,086 |                                |  | $ | 4.21
|                                 |  |                  |   |                  |                                |                  |         |           |   |                                |   |         |  |           |                                |  |   |     



|                                                                                                                                                                    |  |                  |      |                                |   |                  |  |                                |      |           |   |                                |  |   |      |  |   |     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ---- | ------------------------------ | - | ---------------- |  | ------------------------------ | ---- | --------- | - | ------------------------------ |  | - | ---- |  | - | ----
|                                                                                                                                                                    |  | January 31, 2003 |      | January 31, 2004               |   | January 31, 2005
|                                                                                                                                                                    |  | Fairvalue        |      | Weighted-AverageExercise Price |   | Fairvalue        |  | Weighted-averageexercise price |      | Fairvalue |   | Weighted-averageexercise 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 |  | $                | 0.58 |                                | $ | 0.90             |  | $                              | 0.92 |           | $ | 1.28                           |  | $ | 1.70 |  | $ | 2.52



Exercise prices for
options outstanding as of January 31, 2005 ranged from US$0.50 to US$49.50 per share. The breakdown of outstanding options at January 31, 2005 by price range is as follows:



|                         |  |                           |  |                                       |  |                                |       |                        |           |                                |   |      
|------------------------ |  | ------------------------- |  | ------------------------------------- |  | ------------------------------ | ----- | ---------------------- | --------- | ------------------------------ | - | -----
|                         |  | Outstanding share options |  | Excercisable share options           
|Range of exercise prices |  | Number ofshareoptions     |  | Weighted-averageremaining life(years) |  | Weighted-averageexercise price |       | Number of shareoptions |           | Weighted-averageexercise price
|$ 0.50  1.11            |  | 1,062,630                 |  | 4.73                                  |  | $                              | 0.85  |                        | 782,680   |                                | $ | 0.78 
|$ 1.12  1.25            |  | 1,045,000                 |  | 5.46                                  |  |                                | 1.25  |                        | 670,000   |                                |   | 1.25 
|$ 1.26  2.36            |  | 1,169,338                 |  | 5.95                                  |  |                                | 2.05  |                        | 237,056   |                                |   | 1.67 
|$ 2.37  2.91            |  | 1,064,542                 |  | 6.01                                  |  |                                | 2.71  |                        | 178,142   |                                |   | 2.66 
|$ 2.92  49.50           |  | 483,712                   |  | 2.86                                  |  |                                | 15.64 |                        | 444,208   |                                |   | 16.70
|                         |  |                           |  |                                       |  |                                |       |                        |           |                                |   |      
|                         |  | 4,825,222                 |  | 5.28                                  |  | $                              | 3.12  |                        | 2,312,086 |                                | $ | 4.21 
|                         |  |                           |  |                                       |  |                                |       |                        |           |                                |   |      



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.



F-24



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|15. | Income Taxes
|--- | ------------



Income (loss) before provision for income taxes consists of the following:



|        |  |                             |         |   |      |   |        |      |  |   |       |  
|------- |  | --------------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ----- | -
|        |  | Year ended January 31,      |        
|        |  | 2003                        |         |   | 2004 |   |        | 2005 | 
|        |  | (U.S. dollars in thousands) |        
|Ireland |  | $                           | (40,348 | ) |      | $ | (9,549 | )    |  | $ | (804  | )
|Foreign |  |                             | (4,363  | ) |      |   | 6,389  |      |  |   | 2,948 |  
|        |  |                             |         |   |      |   |        |      |  |   |       |  
|Total   |  | $                           | (44,711 | ) |      | $ | (3,160 | )    |  | $ | 2,144 |  
|        |  |                             |         |   |      |   |        |      |  |   |       |  



The provision for
income taxes consists of the following:



|                                 |  |                             |     |      |   |      |      |  |   |      |  
|-------------------------------- |  | --------------------------- | --- | ---- | - | ---- | ---- |  | - | ---- | -
|                                 |  | Year ended January 31,      |    
|                                 |  | 2003                        |     | 2004 |   |      | 2005 | 
|                                 |  | (U.S. dollars in thousands) |    
|Current:                         |  |                             |     |      |   |      |      |  |   |      |  
|Ireland                          |  | $                           | 59  |      | $ | 137  |      |  | $ | (149 | )
|ForeignNational                 |  |                             | 49  |      |   | (306 | )    |  |   | 259  |  
|ForeignState and Local Taxes    |  |                             |    |      |   | 169  |      |  |   | 63   |  
|                                 |  |                             |     |      |   |      |      |  |   |      |  
|Total current                    |  | $                           | 108 |      | $ |     |      |  | $ | 173  |  
|                                 |  |                             |     |      |   |      |      |  |   |      |  
|Deferred:                        |  |                             |     |      |   |      |      |  |   |      |  
|Ireland                          |  | $                           |    |      | $ |     |      |  | $ |     |  
|ForeignNational                 |  |                             |    |      |   |     |      |  |   | (50  | )
|                                 |  |                             |     |      |   |      |      |  |   |      |  
|Total deferred                   |  | $                           |    |      | $ |     |      |  | $ | (50  | )
|                                 |  |                             |     |      |   |      |      |  |   |      |  
|Total provision for income taxes |  | $                           | 108 |      | $ |     |      |  | $ | 123  |  
|                                 |  |                             |     |      |   |      |      |  |   |      |  



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,      |       
|                                                                                                                     |  | 2003                        |        |   | 2004 |   |        | 2005 | 
|                                                                                                                     |  | (U.S. dollars in thousands) |       
|Income taxes computed at the Irish statutory income tax rate of 15.71% for 2003, 12.50% for 2004 and 12.50% for 2005 |  | $                           | (7,019 | ) |      | $ | (395   | )    |  | $ | 268    |  
|Income (losses) from Irish manufacturing operations taxed/relieved at lower rates                                    |  |                             | 1,755  |   |      |   | 320    |      |  |   | 74     |  
|Income (losses) subject to higher rates of tax                                                                       |  |                             | 21     |   |      |   | 1,160  |      |  |   | 954    |  
|Changes in valuation allowancesOperating losses utilized                                                            |  |                             |       |   |      |   | (1,881 | )    |  |   | (1,867 | )
|Changes in valuation allowancesOperating losses not utilized                                                        |  |                             | 3,243  |   |      |   | 1,309  |      |  |   | 739    |  
|Income not subject to tax                                                                                            |  |                             | (93    | ) |      |   | (42    | )    |  |   | (124   | )
|State and local tax                                                                                                  |  |                             |       |   |      |   | 169    |      |  |   | 63     |  
|Withholding tax                                                                                                      |  |                             | 108    |   |      |   |       |      |  |   | 16     |  
|Non-deductible expenses                                                                                              |  |                             | 2,405  |   |      |   |       |      |  |   |       |  
|Capital allowances in excess of depreciation                                                                         |  |                             | (315   | ) |      |   | (640   | )    |  |   |       |  
|Non-deductible stock-based compensation                                                                              |  |                             | 3      |   |      |   |       |      |  |   |       |  
|                                                                                                                     |  |                             |        |   |      |   |        |      |  |   |        |  
|Total provision for income taxes.                                                                                    |  | $                           | 108    |   |      | $ |       |      |  | $ | 123    |  
|                                                                                                                     |  |                             |        |   |      |   |        |      |  |   |        |  



F-25



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|                                 |  |                             |         |   |      |   |         |      |  |   |         |  
|-------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                 | 
|                                 |  | January 31,                 |        
|                                 |  | 2003                        |         |   | 2004 |   |         | 2005 | 
|                                 |  | (U.S. dollars in thousands) |        
|Deferred tax assets              |  |                             |         |   |      |   |         |      |  |   |         |  
|Net operating loss carryforwards |  | $                           | 15,863  |   |      | $ | 19,140  |      |  | $ | 20,241  |  
|                                 |  |                             |         |   |      |   |         |      |  |   |         |  
|Total deferred tax assets        |  |                             | 15,863  |   |      |   | 19,140  |      |  |   | 20,241  |  
|Valuation allowance              |  |                             | (15,863 | ) |      |   | (19,140 | )    |  |   | (20,191 | )
|                                 |  |                             |         |   |      |   |         |      |  |   |         |  
|Net deferred tax assets          |  | $                           |        |   |      | $ |        |      |  | $ | 50      |  
|                                 |  |                             |         |   |      |   |         |      |  |   |         |  



As at January 31,
2005, the Company has net operating tax loss carryforwards (NOLs) of approximately US$165 million for tax purposes, which will be available for offset against future taxable income. If not used, the US carryforwards of US$11.7 million will expire
between 2014 and 2023. To the extent NOLs, when realized, relate to non-qualified stock option and share deductions, the resulting benefits will be credited to shareholders equity.



The Company has provided full valuation allowances against the NOLs and other deferred benefits in the Irish, US and UK
entities due to the history of operating losses in the related tax jurisdictions. No valuation allowance has been provided for against the deferred tax asset recognized in the German entity due to the likelihood of taxable profits in future years to
offset the NOLs.



The Company has NOLs and other deferred
benefits that are available to offset against future taxable income. Operating activities contributed to the NOLs and the remaining NOLs are attributable to tax deductions related to the exercise of non-qualified stock options and shares.



The Companys deferred tax asset related to operations
and exercised stock options and shares amounted to:



|                            |  |                             |        |      |   |        |  |   |       
|--------------------------- |  | --------------------------- | ------ | ---- | - | ------ |  | - | ------
|                            |  | January 31,                
|                            |  | 2003                        |        | 2004 |   | 2005  
|                            |  | (U.S. dollars in thousands)
|Operations                  |  | $                           | 8,342  |      | $ | 11,599 |  | $ | 12,524
|Non-qualified stock options |  |                             | 7,521  |      |   | 7,541  |  |   | 7,717 
|                            |  |                             |        |      |   |        |  |   |       
|Net deferred tax assets     |  | $                           | 15,863 |      | $ | 19,140 |  | $ | 20,241
|                            |  |                             |        |      |   |        |  |   |       



When realization of
the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. The benefit related to non-qualified stock option and
share deductions is credited to additional paid in capital when realized.



F-26



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|16. | 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 in accordance with SFAS No. 131 Disclosures about segments of an enterprise and related information and
related interpretations. The Companys chief operating decision maker is the Chief Executive Officer. During fiscal 2005, the Company changed the way it views its operations. Prior to fiscal 2005, the Company split its operations between
Product and Licenses & Services. The Company now views its operations as a split between its Payments and Funds Management Systems (FMS) Groups. Prior years have been reclassified for comparative purposes.



Year ended January 31, 2005

(U.S. dollars in thousands)



|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       
|------------------------- |  | ------------- | ------ | --------------------------- | - | ------------- |  | -------- | ------ |  | ----------------- | ------ | - |  | - | ------
|                          |  | PaymentsGroup |        | FundsManagementSystemsGroup |   | SegmentsTotal |  | AllOther |        |  | ConsolidatedTotal
|Revenue                   |  | $             | 36,687 |                             | $ | 19,108        |  | $        | 55,795 |  | $                 |       |   |  | $ | 55,795
|Cost of sales             |  |               | 18,570 |                             |   | 4,055         |  |          | 22,625 |  |                   |       |   |  |   | 22,625
|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       
|Gross profit              |  |               | 18,117 |                             |   | 15,053        |  |          | 33,170 |  |                   |       |   |  |   | 33,170
|Operating expenses        |  |               | 15,156 |                             |   | 9,041         |  |          | 24,197 |  |                   | 7,454  |   |  |   | 31,651
|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       
|Operating profit          |  |               | 2,961  |                             |   | 6,012         |  |          | 8,973  |  |                   | (7,454 | ) |  |   | 1,519 
|Non-operating income, net |  |               |       |                             |   |              |  |          |       |  |                   | 502    |   |  |   | 502   
|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       
|Net income                |  | $             | 2,961  |                             | $ | 6,012         |  | $        | 8,973  |  | $                 | (6,952 | ) |  | $ | 2,021 
|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       
|Segment assets            |  | $             | 7,410  |                             | $ | 3,253         |  | $        | 10,663 |  | $                 | 56,523 |   |  | $ | 66,186
|                          |  |               |        |                             |   |               |  |          |        |  |                   |        |   |  |   |       



Year ended January
31, 2004

(U.S. dollars in thousands)



|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  
|------------------------- |  | -------- | ------ | --- | - | ------------- |  | -------- | ------ |  | ----------------- | ------ | - |  | - | ------ | -
|                          |  | Payments |        | FMS |   | SegmentsTotal |  | AllOther |        |  | ConsolidatedTotal |       
|Revenue                   |  | $        | 29,047 |     | $ | 14,024        |  | $        | 43,071 |  | $                 |       |   |  | $ | 43,071 |  
|Cost of sales             |  |          | 14,687 |     |   | 3,097         |  |          | 17,784 |  |                   | 1,135  |   |  |   | 18,919 |  
|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  
|Gross profit              |  |          | 14,360 |     |   | 10,927        |  |          | 25,287 |  |                   | (1,135 | ) |  |   | 24,152 |  
|Operating expenses        |  |          | 13,943 |     |   | 7,798         |  |          | 21,741 |  |                   | 5,918  |   |  |   | 27,659 |  
|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  
|Operating loss            |  |          | 417    |     |   | 3,129         |  |          | 3,546  |  |                   | (7,053 | ) |  |   | (3,507 | )
|Non-operating income, net |  |          |       |     |   |              |  |          |       |  |                   | 347    |   |  |   | 347    |  
|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  
|Net loss                  |  | $        | 417    |     | $ | 3,129         |  | $        | 3,546  |  | $                 | (6,706 | ) |  | $ | (3,160 | )
|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  
|Segment assets            |  | $        | 8,969  |     | $ | 2,687         |  | $        | 11,656 |  | $                 | 52,661 |   |  | $ | 64,317 |  
|                          |  |          |        |     |   |               |  |          |        |  |                   |        |   |  |   |        |  



F-27



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Year ended January 31, 2003

(U.S. dollars in thousands)



|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  
|------------------------- |  | -------- | ------ | - | --- | - | ------------- |  | - | --------- | - |  | ----------------- | ------- | - |  | - | ------- | -
|                          |  | Payments |        |   | FMS |   | SegmentsTotal |  |   | All Other |   |  | ConsolidatedTotal |        
|Revenue                   |  | $        | 30,792 |   |     | $ | 12,064        |  | $ | 42,856    |   |  | $                 |        |   |  | $ | 42,856  |  
|Cost of sales             |  |          | 21,781 |   |     |   | 2,351         |  |   | 24,132    |   |  |                   | 4,720   |   |  |   | 28,852  |  
|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  
|Gross profit              |  |          | 9,011  |   |     |   | 9,713         |  |   | 18,724    |   |  |                   | (4,720  | ) |  |   | 14,004  |  
|Operating expenses        |  |          | 17,486 |   |     |   | 6,322         |  |   | 23,808    |   |  |                   | 36,394  |   |  |   | 60,202  |  
|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  
|Operating loss            |  |          | (8,475 | ) |     |   | 3,391         |  |   | (5,084    | ) |  |                   | (41,114 | ) |  |   | (46,198 | )
|Non-operating income, net |  |          |       |   |     |   |              |  |   |          |   |  |                   | 1,379   |   |  |   | 1,379   |  
|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  
|Net loss                  |  | $        | (8,475 | ) |     | $ | 3,391         |  | $ | (5,084    | ) |  | $                 | (39,735 | ) |  | $ | (44,819 | )
|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  
|Segment assets            |  | $        | 11,357 |   |     | $ | 2,742         |  | $ | 14,099    |   |  | $                 | 59,414  |   |  | $ | 73,513  |  
|                          |  |          |        |   |     |   |               |  |   |           |   |  |                   |         |   |  |   |         |  



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.



The following tables reconcile segment income (loss) before provision for income taxes to consolidated income (loss) before
provision for income taxes and segment assets to consolidated total assets.



|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                         |  | Year ended January 31,      |        
|                                                         |  | 2003                        |         |   | 2004 |   |        | 2005 | 
|                                                         |  | (U.S. dollars in thousands) |        
|Total income (loss) before taxes for reportable segments |  | $                           | (5,084  | ) |      | $ | 3,546  |      |  | $ | 8,973  |  
|Unallocated amounts:                                     |  |                             |         |   |      |   |        |      |  |   |        |  
|Central overheads                                        |  |                             | (12,997 | ) |      |   | (4,667 | )    |  |   | (6,452 | )
|Amortization                                             |  |                             | (7,292  | ) |      |   | (1,641 | )    |  |   | (847   | )
|Impairment of goodwill                                   |  |                             | (12,849 | ) |      |   |       |      |  |   |       |  
|Impairment of purchased intangible assets                |  |                             | (3,686  | ) |      |   |       |      |  |   |       |  
|Adjustment of acquisition liabilities                    |  |                             |        |   |      |   |       |      |  |   | 249    |  
|Stock-based compensation                                 |  |                             | (20     | ) |      |   |       |      |  |   | (116   | )
|Restructuring charge                                     |  |                             | (4,270  | ) |      |   | (745   | )    |  |   | (288   | )
|Interest income (expense), net                           |  |                             | 716     |   |      |   | 268    |      |  |   | 428    |  
|Exchange gain, net                                       |  |                             | 771     |   |      |   | 79     |      |  |   | 197    |  
|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  
|Income (loss) before income taxes                        |  | $                           | (44,711 | ) |      | $ | (3,160 | )    |  | $ | 2,144  |  
|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  
|Provision for income taxes                               |  |                             | (108    | ) |      |   |       |      |  |   | (123   | )
|Net income (loss)                                        |  | $                           | (44,711 | ) |      | $ | (3,160 | )    |  | $ | 2,144  |  
|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  
|Total assets for reportable segments as of January 31    |  | $                           | 14,099  |   |      | $ | 11,656 |      |  | $ | 10,663 |  
|Unallocated amounts:                                     |  |                             |         |   |      |   |        |      |  |   |        |  
|Cash and cash equivalents                                |  |                             | 42,559  |   |      |   | 36,864 |      |  |   | 39,180 |  
|Restricted cash                                          |  |                             | 3,132   |   |      |   | 1,211  |      |  |   | 672    |  
|Value added taxes                                        |  |                             | 617     |   |      |   | 471    |      |  |   | 531    |  
|Prepaid expenses and other current assets                |  |                             | 1,728   |   |      |   | 1,674  |      |  |   | 2,556  |  
|Property and equipment, net                              |  |                             | 1,674   |   |      |   | 988    |      |  |   | 824    |  
|Other non-current assets                                 |  |                             | 3,095   |   |      |   | 3,994  |      |  |   | 3,147  |  
|Goodwill                                                 |  |                             | 6,609   |   |      |   | 7,459  |      |  |   | 8,613  |  
|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  
|Total Assets as of January 31                            |  | $                           | 73,513  |   |      | $ | 64,317 |      |  | $ | 66,186 |  
|                                                         |  |                             |         |   |      |   |        |      |  |   |        |  



F-28



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The distribution of net revenue by geographical area was as follows:



|                                             |  |                             |        |      |   |        |  |   |       
|-------------------------------------------- |  | --------------------------- | ------ | ---- | - | ------ |  | - | ------
|                                             |  | Year ended January 31,     
|                                             |  | 2003                        |        | 2004 |   | 2005  
|                                             |  | (U.S. dollars in thousands)
|Ireland                                      |  | $                           | 1,128  |      | $ | 312    |  | $ | 79    
|Germany                                      |  |                             | 8,236  |      |   | 6,889  |  |   | 10,646
|United Kingdom                               |  |                             | 6,398  |      |   | 10,528 |  |   | 19,986
|United States of America                     |  |                             | 17,513 |      |   | 18,918 |  |   | 19,685
|Europe (excluding Germany, Ireland and U.K.) |  |                             | 6,922  |      |   | 4,616  |  |   | 3,772 
|Rest of World                                |  |                             | 2,659  |      |   | 1,808  |  |   | 1,627 
|                                             |  |                             |        |      |   |        |  |   |       
|Total Revenue                                |  | $                           | 42,856 |      | $ | 43,071 |  | $ | 55,795
|                                             |  |                             |        |      |   |        |  |   |       
|                                             | 
|                                             |  | As of January 31,          
|                                             |  | 2003                        |        | 2004 |   | 2005  
|                                             |  | (U.S. dollars in thousands)
|Long Lived Assets:                           |  |                             |        |      |   |        |  |   |       
|                                             |  |                             |       
|Ireland                                      |  | $                           | 10,800 |      | $ | 8,822  |  | $ | 8,213 
|Germany                                      |  |                             | 36     |      |   | 9      |  |   | 11    
|United Kingdom                               |  |                             | 201    |      |   | 137    |  |   | 172   
|United States of America                     |  |                             | 67     |      |   | 3,356  |  |   | 4,149 
|Europe (excluding Germany, Ireland and U.K.) |  |                             |       |      |   |       |  |   |      
|Rest of World                                |  |                             | 274    |      |   | 117    |  |   | 39    
|                                             |  |                             |        |      |   |        |  |   |       
|Total                                        |  | $                           | 11,378 |      | $ | 12,441 |  | $ | 12,584
|                                             |  |                             |        |      |   |        |  |   |       



|17. | Government Grants Repayable and Related Loans
|--- | ---------------------------------------------



The Company received non-interest bearing loans which were repayable at rates linked to future revenues earned in the related markets. The loans were
repayable at a rate of 1.4% of total export sales in the period January 1999 to December 2001. Repayments commenced in January 2000 and were completed in November 2004. The Company had credited all such loan amounts to the balance sheet liability
account Government Grants repayable and related loans as of January 31, 2004. As of January 31, 2005, there were no government grants repayable or related loans outstanding. The Company repaid approximately US$399,000 and US$78,000 in
relation to these loans during fiscal 2004 and fiscal 2005, respectively.



Under a research and development agreement between the Company and Enterprise Ireland, the Company has offset US$nil, US$280,000 and US$122,000 against related research and development expenditure for the years ended
January 31, 2003, 2004 and 2005. 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, 2005.



|18. | Selected Statement of Operating Data
|--- | ------------------------------------



There were no customers who accounted for more than 10% of revenue in any one of the years ended January 31, 2003, 2004 and 2005.



F-29



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|19. | 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 Company
in its financial statements prepared in accordance with U.S. GAAP 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, 2004 or 2005. The amount of dividends included in compensation expense are as follows:



| |  |                             |  |      |  |     
| |  | --------------------------- |  | ---- |  | ----
| |  | Year ended January 31,     
| |  | 2003                        |  | 2004 |  | 2005
| |  | (U.S. dollars in thousands)
| |  | 315                         |  | 582  |  | 384 
| |  |                             |  |      |  |     



As described in Note
7, the Company leases its corporate headquarters in Dublin, Ireland from Cyril P. McGuire, an officer and director of the Company and John McGuire, a former 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 P. McGuire and John McGuire in relation to these
leases as of January 31, 2004 or 2005. The amounts paid by the Company in relation to these leases included in rent expense are as follows:



| |  |                             |  |       |  |      
| |  | --------------------------- |  | ----- |  | -----
| |  | Year ended January 31,     
| |  | 2003                        |  | 2004  |  | 2005 
| |  | (U.S. dollars in thousands)
| |  | 1,400                       |  | 1,647 |  | 1,724
| |  |                             |  |       |  |      



An additional amount
was paid in advance, in accordance with the Companys contractual obligation of the lease, to Cyril P. McGuire and John McGuire, of US$451,000 as of January 31, 2005. There was US$nil prepaid as of January 31, 2004.



|20. | Acquisitions
|--- | ------------



On August 25, 2000, the Company acquired the outstanding shares of Trintech Limited (formerly known as 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, 2005, 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, 2005,
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



F-30



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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, 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 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 paid an additional final amount of US$125,000 in fiscal 2005 which was based on the achievement of agreed performance criteria. 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$1.1 million. In connection with the amended agreement, the
Company had a restricted cash balance of approximately US$394,000 as of January 31, 2005, in relation to potential employee restructuring costs associated with its research and development facility in Uruguay. 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. During January 2003, the company recognized other
non-current asset impairments, principally a non compete covenant, of US$109,000. 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.



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. 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 impairment of US$12,849,000 for the year ended January 31, 2003, in connection with these acquisitions as fully described
in Note 20.



F-31



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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 has been and will be required to pay additional performance related contingent consideration equal to 50% of profits, as defined in the purchase
agreement, earned by the acquired business for fiscal 2005 and fiscal 2006. The fiscal 2005 performance related consideration of US$1.2 million was paid in the quarter ended April 30, 2005. The additional contingent consideration is subject to
certain top-up provisions from profits for fiscal 2007 if the aggregate payments under the provisions for fiscal 2005 and 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.



During
fiscal 2005 in connection with a lease termination settlement relating to the Companys Austin facility, the Company recorded an adjustment which reduced acquisition liabilities by US$249,000. 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 adjustment of acquisition liabilities was recognized in the consolidated statement of
operations in the three months ended April 30, 2004.



|21. | Goodwill
|--- | --------



Goodwill is analyzed as follows:



|                            |  |                |        |                             |   |        |  |                     |       |                |   |                         |  |     |        |  |   |        |  |   |      
|--------------------------- |  | -------------- | ------ | --------------------------- | - | ------ |  | ------------------- | ----- | -------------- | - | ----------------------- |  | --- | ------ |  | - | ------ |  | - | -----
|As of January 31, 2004      |  |                |        | As of January 31, 2005      |   |       
|GrossCarryingAmount         |  | ImpairmentLoss |        | AccumulatedAmortization     |   | Net    |  | GrossCarryingAmount |       | ImpairmentLoss |   | AccumulatedAmortization |  | Net
|(U.S. dollars in thousands) |  |                |        | (U.S. dollars in thousands) |   |       
|                            |  |                |        |                             |   |        | 
|                            |  |                |        |                             |   |        |  |                     |       |                |   |                         |  |     |        |  |   |        |  |   |      
|                            |  |                |        |                             |   |        |  |                     |       |                |   |                         |  |     |        |  |   |        |  |   |      
|$91,930                     |  | $              | 49,308 |                             | $ | 35,163 |  | $                   | 7,459 |                | $ | 93,084                  |  | $   | 49,308 |  | $ | 35,163 |  | $ | 8,613
|                            |  |                |        |                             |   |        |  |                     |       |                |   |                         |  |     |        |  |   |        |  |   |      



In January 2003, the
Company recognized an adjustment of an assumed liability of US$1.0 million in connection with the acquisition of Globeset. The adjustment reduced the impairment of goodwill charge for the year ended January 31, 2003 from US$13.9 million to US$12.8
million.



F-32



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



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.



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$1.1 million. 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. During fiscal 2005, the Company recorded an adjustment which increased goodwill by US$1.1 million. This related to
an additional performance related contingent payment equal to 50% of profits, as defined in the purchase agreement, earned by the acquired business for fiscal 2005. During the fourth quarter of fiscal 2005, 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, 2005.



The Company changed its reporting segments in fiscal 2005, as described in
note 16, from Product and Licence & Services to Payments and FMS. The impairment analysis at January 31, 2005 was performed using the Licence and Services reporting segment. The carrying value of Goodwill and the other non-current assets at
January 31, 2005 relate entirely to the FMS Group. We do not believe that the impairment conclusions reached at this date would have materially changed if the impairment analysis was updated to use the FMS reporting segment.



F-33



---

TRINTECH GROUP PLC



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Continued)



|22. | Restructuring Charges
|--- | ---------------------



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. 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 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.



In the first and second quarters of fiscal 2005, the Company recorded restructuring charges of US$306,000 and US$45,000 respectively, related to staff terminations in connection with our research and development
facility in Uruguay and excess sales and marketing employees in Ireland and the U.S. In the fourth quarter of fiscal 2005, a credit of US$63,000 was recorded which related to a refund of costs associated with staff terminations. In connection with
these activities the Company reduced its workforce by 18 employees.



As of January 31, 2005, accrued restructuring charges related to future lease commitments of US$32,000 and staff terminations of US$36,000 which will be paid during fiscal 2006. The following table summarizes the Companys
restructuring activity for the years ended January 31, 2004 and 2005:



|                                                   |  |                                                   |      |   |                                           |   |       |       |  |   |        |  
|-------------------------------------------------- |  | ------------------------------------------------- | ---- | - | ----------------------------------------- | - | ----- | ----- |  | - | ------ | -
|                                                   |  | Year ended January 31,(U.S. dollars in thousands) |     
|                                                   |  | EmployeeSeverance and Benefits                    |      |   | Consolidation ofFacilities and Operations |   |       | Total | 
|Reserve balance February 1, 2003                   |  | $                                                 | 45   |   |                                           | $ | 1,231 |       |  | $ | 1,276  |  
|Restructuring provision during fiscal 2004         |  |                                                   | 745  |   |                                           |   |      |       |  |   | 745    |  
|Reclassification of restructuring provision        |  |                                                   | 289  |   |                                           |   | (289  | )     |  |   |       |  
|Amounts paid                                       |  |                                                   | (951 | ) |                                           |   | (657  | )     |  |   | (1,608 | )
|                                                   |  |                                                   |      |   |                                           |   |       |       |  |   |        |  
|Reserve balance January 31, 2004                   |  | $                                                 | 128  |   |                                           | $ | 285   |       |  | $ | 413    |  
|Restructuring provision during fiscal 2005         |  |                                                   | 351  |   |                                           |   |      |       |  |   | 351    |  
|Refund of costs associated with staff terminations |  |                                                   | (63  | ) |                                           |   |      |       |  |   | (63    | )
|Reclassification of restructuring provision        |  |                                                   | 61   |   |                                           |   | (61   | )     |  |   |       |  
|Amounts paid                                       |  |                                                   | (441 | ) |                                           |   | (192  | )     |  |   | (633   | )
|                                                   |  |                                                   |      |   |                                           |   |       |       |  |   |        |  
|Reserve balance January 31, 2005                   |  | $                                                 | 36   |   |                                           | $ | 32    |       |  | $ | 68     |  
|                                                   |  |                                                   |      |   |                                           |   |       |       |  |   |        |  



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