Half Yearly Report

23 December 2015

MoneySwap Plc

("MoneySwap", the "Company" or the "Group")

Interim results for six months ended 30 September 2015

MoneySwap (AIM: SWAP), the provider of payment solutions to online and point of sale merchants licenced for UnionPay in the UK and the provider for UnionPay MoneyExpress service enabling overseas persons to send funds directly to UnionPay cardholders in China, is pleased to announce the Group's results for the six months ended 30 September 2015.

A copy of the interim accounts will shortly be made available on the Company's website, www.moneyswapholdings.com.

For further information, please contact:

About MoneySwap (www.moneyswap.com)

MoneySwap provides payment solutions and gateways to merchants which allow both online and point of sale transactions to be settled using UnionPay cards in the UK. In addition, UnionPay has licensed MoneySwap for its MoneyExpress service which enables overseas persons to send funds directly to UnionPay cardholders in China. The Company also offers an online peer to peer platform for currency exchange and payments. The Company's shares are traded on the London Stock Exchange's AIM market (AIM: SWAP). More information can be found at www.moneyswap.com.

MONEYSWAP PLC

CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT

Financial Review

For the six month period ended 30 September 2015, revenues were US$135,000 (H1 2014: US$101,000). Operating expenses increased for the period to US$2.2 million (H1 2014: US$1.8 million), which was mainly resulted from the commission paid for the £2.3 million investment received as further described below. Excluding this commission, operating expenses slightly decreased by 1% from the six months ended 30 September 2014. This led to the increase of the Group's operating loss for the period to US$2.1 million (H1 2014: loss of US$1.7 million).

Working Capital

The Company has, during the period under review, primarily been financed through equity investment to the Company totaling £2.3 million (US$3.4 million) in April 2015, which involved the Company issuing 287,500,000 ordinary shares. Furthermore, the Company has received loans of US$254,000 from an unrelated party during the period. Under the terms of the loans, US$120,000 of the loans bear interest at 5% per annum and the Company, at its sole discretion, can choose to repay or convert the loans to ordinary shares of the Company within two years from the issue date of the loans, ranging from 28 August 2017 to 18 September 2017. The conversion price shall be calculated as the average closing market price of an ordinary share in the Company in the ten business days prior to the conversion dates. US$134,000 of the loans bear interest at 20% per annum and are repayable within two months from the issue date of the loans, 29 November 2015. In November 2015, the Company has agreed with the unrelated party to extend the loans for three months to 29 February 2016.

Subsequent to the period under review, the Company has received a further loan of US$430,000 from the same unrelated third party on identical terms with the US$120,000 loans. The total loan outstanding to this third party is now US$684,000. The Company will be required to raise additional funds in the near term in order to continue its operations at the current level. The Company has historically received the support of certain of its key shareholders and directors, who have indicated that they will be willing to continue to support the business. In addition, the Company is in discussions with a number of external parties in relation to a potential investment into MoneySwap. It is not yet known whether such investment, should it be secured, will take the form of debt or equity. Notwithstanding this, the Directors are confident in the Group's ability to continue as a going concern and consider that the Group is poised for revenue growth.

Outlook

Merchant Acquisition

As previously announced by the Company, we have successfully integrated with Sage Pay and FIS, two of the major payment service providers in the UK and Europe. The MoneySwap payment gateway is their preferred and/or sole UnionPay payment gateway option. These integrations have created a one device solution for all their payment and inventory needs. An important part of Sage Pay's offering to merchants is access to Global Blue's tax free technology. Global Blue is both a tourism shopping tax refund company as well as a reseller of Sage Pay payment solutions. Therefore we now work closely with Global Blue as an excellent source of customer referrals from their sales team.

With this advanced technical solution, we have begun signing new merchants, including tier 1 shops in the UK, and we expect to continue this progress throughout 2016. We have also applied to the Financial Conduct Authority of the UK to become an Authorised Payment Institution including European passporting. This status will allow us to enlarge our market base into Europe and by replicating our partner strategy, we can provide UnionPay services to their merchants who see an opportunity to leverage the interest from inbound Chinese consumers.

Fast Remittance to China

Since January 2015 (full launch in February 2015), Xoom has been providing its online community (1.5 million active US customers) a remittance corridor to China using the MoneyExpress service. MoneyExpress allows Xoom's customers to send funds to UnionPay cards in China within 40 seconds. We are happy to report a gradual increase in Xoom's transactions using our MoneyExpress service. With Xoom's upcoming effort in promoting their China remittance service (including new Chinese television commercials, a Chinese website, new mobile platform in Chinese, and social media representation in China), we expect Xoom's China remittance transactions to continue to grow.

On 12 November 2015, Paypal completed its acquisition of Xoom. Our relationship with Xoom (now a 100% subsidiary of PayPal) remains unchanged. We look forward to further growth in our Xoom business.

We are also in discussions with other online remittance providers to provide our UnionPay MoneyExpress remittance corridor to their online customers.

Cross-Border SME Payments

We have formalized our contractual relationship with a government-licensed cross-border payment institution in China. This institution will allow documented transfer of larger payments in and out of China. Moving legitimate funds of larger amounts cross-border in China has been problematic and we hope our expertise in the payment industry and the government license of this China partner can work towards resolving this cross-border problem.

In addition, we are also in the process of establishing a Southeast Asia corridor with a partner. We are also in active discussions with partners in Europe as well as those in China and Southeast Asia who have large communities of SMEs needing to send and/or receive payments between China, Southeast Asia, and Europe.

With China's One Belt One Road initiative spanning across China, Southeast Asia, and Europe, we believe our cross-border payment corridors will help ease the way for business fund flow.

Kung-Min Lin

Chairman and Chief Executive Officer

Date: 23 December 2015

MONEYSWAP PLC

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015

MONEYSWAP PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2015

MONEYSWAP PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015

MONEYSWAP PLC

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015

1 Basis of preparation

The interim consolidated financial statements incorporate the results of MoneySwap Plc (the "Company") and entities controlled by the Company (its subsidiaries) (collectively the "Group").

The interim consolidated financial statements of the Group have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and do not include all of the information required for full annual financial statements.

The interim consolidated financial statements are unaudited, do not constitute statutory accounts within the meaning of the accounting and audit provisions of the Gibraltar Companies Act 2014, and were approved by the Board of directors on 23 December 2015. The consolidated financial statements for the year ended 31 March 2015 were prepared under International Financial Reporting Standards ("IFRSs"). The auditors reported on the financial statements. Their report was unqualified and included reference to a matter to which the auditors drew attention by way of emphasis without qualifying their report.

The preparation of interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing the interim consolidated financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the consolidated financial statements as at and for the year ended 31 March 2015.

The accounting policies applied by the Group in the interim consolidated financial statements comply with each IFRSs that is mandatory for accounting for the six months ended 30 September 2015. These policies are consistent with those adopted in the Group's consolidated financial statements for the year ended 31 March 2015 and those which will be adopted in the Group's consolidated financial statements for the year ending 31 March 2016.

The principal risks and uncertainties of the Group have not changed since the last annual financial statements where a detailed explanation of such risks and uncertainties can be found.

2 Segmental information

In the opinion of the directors, the Group has three business lines as described below, which are managed separately as they require different strategies:

- Prepaid cards ("PP cards")

- Merchant acquisition and remittance services for China UnionPay ("Merchant acquisition and remittance")

- Peer to peer foreign exchange and payment ("P2P")

For the Group's internal reporting process, operating performance for peer to peer foreign exchange and payment are assessed together and therefore, their segmental results are combined.

The directors consider that it is neither possible nor meaningful to distinguish aggregate amortisation and depreciation, other administrative and operating expenses and taxation between the business segments, nor segmental net assets and liabilities. As a result these amounts are not reported to the chief operating decision maker on a segmental basis.

The Group is organised around two main geographical areas and a split of the geographical segments is as follows:

The major changes in segment assets during the period mainly relate to the decrease in property, plant and equipment and intangible assets for normal depreciation/amortisation, and in cash and cash equivalents as used in daily operations.

3 Other income

4 Taxation

Taxation of the Company and its subsidiaries is recognised based on the rules and regulations of their respective countries of incorporation. During the period, there is refund of income tax overpaid in previous years.

A deferred tax asset has not been recognised in respect of all tax losses available to carry forward against suitable future trading profits as the directors consider there is insufficient evidence that it is more likely than not all the assets will be recovered. These assets can be recovered against suitable future trading profits.

5 Loss per share

Basic loss per share has been calculated by dividing the net results attributable to ordinary shareholders by the weighted average number of shares in issue during the period/year.

Due to the Company and Group being loss making, the share options and convertible loan notes are anti-dilutive.

6 Property, plant and equipment

During the six months ended 30 September 2015, the Group acquired assets with a cost of US$3,300 (six months ended 30 September 2014: US$nil; year ended 31 March 2015: US$6,200).

7 Goodwill

The goodwill relates to the excess of consideration paid over the net assets acquired in MoneySwap Limited and MoneySwap FX Limited. The directors consider that it is neither possible nor meaningful to distinguish segmental net assets and liabilities between the business segments.

The goodwill is tested annually for impairment and the last goodwill impairment test was carried out as at 31 March 2015, where the recoverable amount of the cash-generating unit was determined based on value-in-use calculations.

The recoverable amount of the cash-generating unit was determined based on value-in-use calculations. These calculations use cash flow projections based on financial budgets prepared by the directors of the Company covering a five-year period with a growth rate of 2% from 2017 onwards and a discount rate of 14%. The discount rate is the average of selected comparable companies' weighted average cost of capital.

As at 30 September 2015, the directors did not consider there to be any impairment in respect of the goodwill.

Movement in goodwill during the period/year is as follows:

8 Trade receivables

All trade receivables are denominated in Philippine Peso which are due upon billing. The ageing of trade receivables at the reporting date that were not impaired was as follows:

The directors believe that no impairment allowance is necessary in respect of the trade receivables and consider that the carrying amount as at 30 September 2015 of trade receivables approximates to their fair value.

9 Capital and reserves

Share capital and share premium

For details of the shares issued for settlement of payables to directors and other payables, please refer to notes 16(a) and (b).

Dividends

The directors do not recommend the payment of a dividend for the six months ended 30 September 2015 (six months ended 30 September 2014: US$nil; year ended 31 March 2015: US$nil).

10 Share-based payments

Share benefit charges

Share options

On 17 May 2011, the Group adopted a share option scheme that entitles directors, employees, consultants and professional advisers to purchase shares in the Company.

The terms and conditions relating to the grants of share options are as follows, all options are to be settled by physical delivery of shares:

The number and weighted average exercise prices of share options are as follows: