Announcement - registration of booklet - 20120514 · 2012. 5. 13. · A copy of the proposed Scheme is included in this booklet as Annexure B. A copy of this Scheme Booklet was provided

Customers Limited ABN 62 009 582 781

Customers Limited

Unit 2, 148 Chesterville Rd

Cheltenham VIC 3192

T 1300 305 600

F 1300 721 883

www.customersatm.com.au

The ATM Specialist

ASX Company Announcement 14 May 2012

SCHEME BOOKLET

Customers Limited is pleased to announce that the booklet concerning the scheme of arrangement under which DirectCash Payments Inc. would acquire Customers has been registered by the Australian Securities and Investments Commission. A copy of the Scheme Booklet is attached. The Scheme Booklet will be mailed to Customers shareholders later this week. For further information please contact: Rohan Martin, Manager Corporate Affairs and Marketing Customers Limited Ph: +61 3 9090 4745 Email: [email protected]

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This is an important document and requires your immediate attention. You should read it in its entirety before deciding whether or not to vote in favour of the Scheme. If you are in any doubt about how to deal with this document, you should contact your broker, financial adviser or legal adviser immediately.

Customers LimitedACN 009 582 781

Scheme Booklet

For a scheme of arrangement between Customers Limited and its shareholders in relation to the proposed acquisition of Customers Limited by DCP Holdings Australia Pty Ltd, a wholly-owned subsidiary of DirectCash Payments Inc.

Your directors unanimously recommend that you vote in favour of the Scheme in the absence of a superior proposal

VOTEYES

Legal Adviser Financial Adviser

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ImpOrTanT nOTIcES

Nature of this document

This Scheme Booklet provides Customers Shareholders with information about the proposed acquisition of Customers by DirectCash. If you have sold all of your Customers Shares, please ignore this booklet.

Defined terms

Capitalised terms and certain abbreviations used in this Scheme Booklet are explained in section 10 of this Scheme Booklet.

No investment advice

The information contained in this Scheme Booklet does not constitute financial product advice and has been prepared without reference to your own investment objectives, financial situation, taxation position and particular needs. It is important that you read this Scheme Booklet in its entirety before making any investment decision and any decision as to whether or not to vote in favour of the Scheme. If you are in any doubt in relation to these matters, you should consult your financial, legal, taxation or other professional adviser.

Regulatory information

This document is the explanatory statement for the scheme of arrangement between Customers and the holders of its fully paid ordinary shares as at the Scheme Record Date for the purposes of section 412(1) of the Corporations Act. A copy of the proposed Scheme is included in this booklet as Annexure B.

A copy of this Scheme Booklet was provided to ASIC for examination in accordance with section 411(2)(b) of the Corporations Act and was lodged with ASIC for registration under section 412(6) of the Corporations Act. It was then registered by ASIC under section 412(6) of the Corporations Act before being sent to Customers Shareholders.

ASIC has been requested to provide a statement, in accordance with section 411(17)(b) of the Corporations Act, that ASIC has no objection to the Scheme. If ASIC provides that statement, it will be produced to the Court at the time of the Court hearing to approve the Scheme. Neither ASIC nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

A copy of this Scheme Booklet has been provided to ASX. Neither ASX nor any of its officers takes any responsibility for the contents of this Scheme Booklet.

Important notice associated with the Court order under section 411(1) of the Corporations Act

The fact that under section 411(1) of the Corporations Act the Court has ordered that a meeting be convened and has directed that an explanatory statement accompany the notice of meeting does not mean that the Court:

• hasformedanyviewastothemeritsoftheproposedschemeorastohowmembers should vote (on this matter members must reach their own decision); or

• hasprepared,orisresponsiblefor,thecontentoftheexplanatorystatement.

Disclaimer as to forward-looking statements

This Scheme Booklet contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements.

All forward-looking statements in this Scheme Booklet reflect views only as at the date of this Scheme Booklet, and generally may be identified by the use of forward-looking words such as ‘believe’, ‘aim’, ‘expect’, ‘anticipate’, ‘intending’, ‘foreseeing’, ‘likely’, ‘should’, ‘planned’, ‘may’, ‘estimate’, ‘potential’, or other similar words. Similarly, statements that describe Customers’ or DirectCash’s objectives, plans, goals or expectations are or may be forward-looking statements.

The statements contained in this Scheme Booklet about the impact that the Scheme may have on the results of Customers’ operations and the advantages and disadvantages anticipated to result from the Scheme, are also forward-looking statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from the anticipated results, performance or achievements, expressed, projected or implied by these forward-looking statements.

The operations and financial performance of Customers are subject to various risks that are summarised in this Scheme Booklet and which may be beyond the control of Customers and/or DirectCash. Customers Shareholders should note that the historical financial performance of Customers is no assurance of future financial performance of Customers (whether the Scheme is implemented or not). Those risks and uncertainties include factors and risks specific to the industry in which Customers operates as well as general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets. As a result, the actual results of operations and earnings of Customers following implementation of the Scheme, as well as the actual advantages of the Scheme, may differ

significantly from those that are anticipated in respect of timing, amount or nature and may never be achieved.

The forward-looking statements included in this Scheme Booklet are made only as of the date of this Scheme Booklet.

Any forward-looking statements included in the Customers Information have been made on reasonable grounds. Although Customers believes that the views reflected in any forward-looking statements included in the Customers Information have been made on a reasonable basis, no assurance can be given that such views will prove to have been correct.

Any forward-looking statements included in the DirectCash Information have been made on reasonable grounds. Although DirectCash believes that the views reflected in any forward-looking statements included in the DirectCash Information have been made on a reasonable basis, no assurance can be given that such views will prove to have been correct.

None of Customers, DirectCash, Customers’ officers, DirectCash’s officers, any persons named in this Scheme Booklet with their consent or any person involved in the preparation of this Scheme Booklet makes any representation or warranty (express or implied) as to the likelihood of fulfilment of any forward-looking statement, or any events or results expressed or implied in any forward-looking statement, except to the extent required by law. You are cautioned not to place undue reliance on any forward-looking statement.

You should review all of the information in this Scheme Booklet carefully. Section 1 sets out the reasons why you should vote in favour of the Scheme and section 2 sets out the disadvantages and risks of the Scheme.

All subsequent written and oral forward-looking statements attributable to Customers or DirectCash or any person acting on their behalf are qualified by this cautionary statement.

Subject to any continuing obligations under relevant laws or the listing rules of a relevant exchange, Customers and DirectCash do not give any undertaking to update or revise any such statements after the date of this Scheme Booklet, to reflect any change in expectations in relation thereto or any change in events, conditions or circumstances on which any such statement is based.

Responsibility statement

Customers has been solely responsible for preparing the Customers Information. The information concerning Customers and the intentions, views and opinions of Customers and the Customers Directors contained in this Scheme Booklet has been prepared by Customers and the Customers Directors and is the responsibility of Customers. DirectCash and DirectCash’s directors and officers do not assume any responsibility for the accuracy or completeness of any such Customers Information.

DirectCash has been solely responsible for preparing the DirectCash Information. The information concerning DirectCash and the intentions, views and opinions of DirectCash contained in this Scheme Booklet has been prepared by DirectCash and is the responsibility of DirectCash. Customers and Customers Directors and officers do not assume any responsibility for the accuracy or completeness of any such DirectCash Information.

PricewaterhouseCoopers Securities Limited has prepared the Independent Expert’s Report in relation to the Scheme and takes responsibility for that report. The Independent Expert’s Report is set out as Annexure A.

Link Market Services Limited has had no involvement in the preparation of any part of this Scheme Booklet other than being named as the Customers Registry. Link Market Services Limited has not authorised or caused the issue of, and expressly disclaims and takes no responsibility for, any part of this Scheme Booklet.

Privacy

Customers and DirectCash may collect personal information in the process of implementing the Scheme. Such information may include the name, contact details and shareholdings of Customers Shareholders and the name of persons appointed by those persons to act as a proxy, attorney or corporate representative at the Scheme Meeting. The primary purpose of the collection of personal information is to assist Customers and DirectCash to conduct the Scheme Meeting and implement the Scheme. Personal information of the type described above may be disclosed to the Customers Registry, print and mail service providers, authorised securities brokers, Related Bodies Corporate of Customers and DirectCash, and Customers’ and DirectCash’s advisors and service providers. Customers Shareholders have certain rights to access personal information that has been collected. Customers Shareholders should contact the Customers Registry in the first instance if they wish to access their personal information. Customers Shareholders who appoint a named person to act as their proxy, attorney or corporate representative should ensure that they inform that person of these matters.

Date of this Scheme Booklet

This Scheme Booklet is dated Friday, 11 May 2012.

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1Customers Limited – Scheme Booklet

CONTENTS

Key Dates 2

Letter from the Chairman of Customers 3

Section 1: Why you should vote in favour of the Scheme 5

Section 2: Disadvantages of the Scheme 9

Section 3: Frequently asked questions 11

Section 4: How to vote 15

Section 5: Summary of the Scheme 17

Section 6: Information about Customers 23

Section 7: Information about DirectCash and DCP Holdings 33

Section 8: Taxation implications 39

Section 9: Additional information 41

Section 10: Glossary and interpretation 45

Annexure A: Independent Expert’s Report 51

Annexure B: Scheme 119

Annexure C: Deed Poll 127

Annexure D: Notice of Scheme Meeting 133

Corporate Directory 136

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2 Customers Limited – Scheme Booklet

KEy daTES

Date of this Scheme Booklet Friday, 11 May 2012

Latest date and time for receipt of proxy forms or powers of attorney for the Scheme Meeting

11.00am (Melbourne time) on Saturday, 16 June 2012

Time and date for determining eligibility to vote at the Scheme Meeting

7.00pm (Melbourne time) on Saturday, 16 June 2012

Scheme Meeting to be held at the KPMG Theatrette, Ground Floor, 147 Collins Street, Melbourne VIC 3000

11.00am (Melbourne time) on Monday, 18 June 2012

If the Scheme is approved by Customers Shareholders

Second Court Date for approval of the Scheme Friday, 22 June 2012

Effective Date

Court order lodged with ASIC and announcement to ASX

Last day of trading in Customers Shares – Customers Shares suspended from trading on ASX from close of trading

Friday, 22 June 2012

Scheme Record Date for determining entitlements to Scheme Consideration

5.00pm (Melbourne time) on Wednesday, 27 June 2012

Implementation Date

Payment of Scheme Consideration to Scheme Shareholders

Wednesday, 4 July 2012

All dates following the date of the Scheme Meeting are indicative only and, among other things, are subject to all necessary approvals from the Court and any other Regulatory Authority. Any changes to the above timetable (which may include an earlier or later date for the Second Court Hearing) will be announced through ASX and notified on Customers’ website at www.customersatm.com.au

All references to time in this Scheme Booklet are references to Melbourne time unless otherwise stated. Any obligation to do an act by a specified time in an Australian time zone must be done at the corresponding time in any other jurisdiction.

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LETTEr frOm ThE ChairmaN Of CuSTOmErS

11 May 2012

Dear Customers Shareholder,

On 2 April 2012, Customers Limited announced that it had entered into a Scheme Implementation Deed with DirectCash Payments Inc. under which it is proposed that DirectCash Payments Inc. (through its wholly-owned Australian subsidiary, DCP Holdings Australia Pty Ltd) will acquire all of the issued capital of Customers via a scheme of arrangement. If the Scheme is approved and implemented, Customers Shareholders will receive $1.27 cash per Customers Share.

The proposed cash payment of $1.27 per Customers Share represents an attractive premium on a number of metrics:

38% to the closing Customers Share price on 30 March 2012 – the last trading day prior to announcement of the Scheme •proposal;

44% to the 3 month volume weighted average price to 30 March 2012; and •

53% to the 3 month volume weighted average price to 14 October 2011 – the last trading day prior to the announcement •that Customers had held discussions with a potential bidder.

When the Scheme was announced on 2 April 2012, it was subject to DirectCash obtaining a binding commitment from a financial institution acceptable to Customers to provide sufficient funding for DirectCash to perform its obligations in respect of the Scheme. As announced to ASX on 30 April 2012, this condition has been satisfied and the Scheme is not subject to a financing condition.

Directors’ Recommendation

Your directors unanimously recommend that Customers Shareholders vote in favour of the Scheme, in the absence of a superior proposal. Each Customers Director who holds Customers Shares intends to vote in favour of the Scheme in the absence of a superior proposal.

In light of uncertainty in financial and economic markets, and in order to enhance and deliver shareholder value, your directors have explored a number of strategic options for the Customers business and evaluated proposals received from a number of interested parties in respect of Customers’ ownership. Your directors believe that the Scheme is likely to deliver greater value and certainty to Customers Shareholders than other available alternatives, including Customers continuing as a stand alone entity.

Your directors have unanimously formed the view that the Scheme is in the best interests of Customers Shareholders for the following reasons:

the proposed consideration will enable Customers Shareholders to realise an attractive and certain cash value for their •Customers Shares, particularly given:

– the uncertainty surrounding future volumes in the core business as a result of the continued decline in transactions which began in March 2009 with the introduction of direct charging, and

– that Customers’ growth initiatives are at an early stage, notwithstanding the pleasing progress made to date;

the proposed consideration represents an attractive premium to recent trading prices on the ASX and customary volume •weighted average prices; and

the Independent Expert has concluded that the Scheme is fair and reasonable, and is in the best interests of Customers •Shareholders, in the absence of a superior proposal.

Independent Expert

Your directors appointed PricewaterhouseCoopers Securities Limited as the Independent Expert to assess the merits of the Scheme. The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of Customers Shareholders, in the absence of a superior proposal. The Independent Expert has valued Customers at between $1.20 and $1.40 per Customers Share.

A copy of the Independent Expert’s Report is included as Annexure A of this Scheme Booklet.

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LETTEr frOm ThE ChairmaN Of CuSTOmErS CONTiNuEd

How to Vote

In order for the Scheme to proceed, the Scheme requires court approval and the approval of Customers Shareholders. The Scheme Meeting will be held for the purpose of Customers Shareholders to vote on the Scheme, with the Scheme Meeting commencing at 11.00am on Monday, 18 June 2012 at the KPMG Theatrette, Ground Floor, 147 Collins Street, Melbourne VIC 3000. The Scheme is also subject to a number of conditions which are summarised in section 5.5 of the Scheme Booklet.

If you wish for the Scheme to proceed, it is important you vote in favour of the Scheme and approve the Scheme.

This document sets out important information regarding the Scheme, including the reasons for your directors’ recommendation and the Independent Expert’s Report. Please read this document in its entirety before making your decision and voting at the Scheme Meeting. I would also encourage you to seek independent financial and taxation advice before making any investment decision in relation to your Customers Shares.

Further Information

If you have any questions in relation to the Scheme or this document, please contact the Shareholder Information Line on 1800 237 687 (within Australia) or +61 2 8280 7613 (outside Australia).

Your directors unanimously recommend Customers Shareholders vote in favour of the Scheme, in the absence of a superior proposal.

Yours sincerely

Peter PolsonChairmanCustomers Limited

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SECTiON 1WHY YOU SHOULD VOTE IN

FAVOUR OF THE SCHEME

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SECTiON 1WHY YOU SHOULD VOTE IN FAVOUR OF THE SCHEME

1.1 Directors’ Recommendation

The Customers Directors unanimously recommend that, in the absence of a superior proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting. The Customers Directors unanimously believe that, for the reasons set out below, the Scheme is in the best interests of Customers Shareholders.

In the absence of a superior proposal, each Customers Director intends to vote in favour of the Scheme and approve the Scheme at the Scheme Meeting in relation to Customers Shares held by them or on their behalf. The interests of Customers Directors in Customers Shares are set out in section 9.1 of this Scheme Booklet.

The Customers Directors believe that the reasons for Customers Shareholders to vote in favour of the Scheme outweigh the reasons to vote against the Scheme, in the absence of a superior proposal. These reasons and other relevant considerations are set out below. You should also read the Independent Expert’s Report which is set out in full as Annexure A of this Scheme Booklet.

1.2 Reasons to vote in favour

You should read this Scheme Booklet in full before deciding how to vote.

The Scheme has a number of advantages and disadvantages which may affect Customers Shareholders in different ways depending on their individual circumstances. Customers

Shareholders should seek professional advice on their particular circumstances as appropriate. This section should be read in conjunction with section 2 following which sets out the main disadvantages associated with the Scheme.

The Customers Directors have unanimously formed the conclusion that the Scheme is in the best interests of Customers Shareholders in the absence of a superior proposal for the reasons set out below.

(a) The Scheme Consideration represents an attractive premium to historical Customers Share prices

Under the terms of the Scheme, subject to the Scheme becoming Effective, Customers Shareholders will receive $1.27 cash per Customers Share held on the Scheme Record Date. This Scheme Consideration represents an attractive premium of:

38% to the closing Customers Share price on •30 March 2012, being the last day prior to the announcement of the Scheme proposal;

44% to the 3 month volume weighted average price •(VWAP) to 30 March 2012 and 28% to the 6 month VWAP to 30 March 2012; and

53% to the 3 month VWAP to 14 October 2011, being •the last trading day prior to the announcement that Customers had held discussions with a potential bidder and a 46% premium to the 6 month VWAP to 14 October 2011.

38%

0.92

44%

0.88

28%

0.99

53%

0.83

46%

0.87

Close pre announcement30 March 2012

Scheme Consideration: $1.27

3 month VWAP to30 March 2012

6 month VWAP to30 March 2012

3 month VWAP to14 October 2011

6 month VWAP to14 October 2011

Source: IRESS.

Figure 1: Premia to pricing benchmarks implied by $1.27 cash Scheme Consideration per Customers Share

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(b) Customers Shareholders will receive certain value for their investment

The Customers Share price has been highly volatile over the last 24 to 36 months, driven largely by the introduction of direct charging in Australia and an uncertain economic environment.

The Scheme Consideration of $1.27 cash offered by DirectCash for each Customers Share provides you with certainty of value for your Customers Shares (subject to the Conditions Precedent being satisfied or waived).

(c) Liquidity opportunity for all Customers Shareholders

Approximately 48.7% of Customers Shares are held by the four largest shareholders. The table below is extracted from the Independent Expert’s Report and shows the trading volumes of Customers Shares over various time periods up to 30 March 2012, being the last Business Day prior to announcement of the Scheme proposal.

Figure 2: Trading volumes and liquidity of Customers Shares

Time period

Highest closing

share price

Lowest closing

share price

Traded volume

(millions)

Totalshares

outstanding(millions) Liquidity

1 week 0.92 0.85 0.66 134.9 0.5%1 month 0.92 0.80 2.00 134.9 1.5%3 months 1.00 0.80 9.86 134.9 7.3%6 months 1.19 0.80 21.85 134.9 16.2%12 months 1.45 0.72 88.01 134.9 65.3%

The above table demonstrates the moderate level of liquidity in the public market for Customers Shares. This level of liquidity would make it unlikely that all Customers Shareholders would be able to exit their investment without causing significant downward pressure on the Customers Share price.

(d) The Independent Expert has concluded that the Scheme

is fair and reasonable

The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of Customers Shareholders, in the absence of a superior proposal.

The valuation analysis of the Independent Expert concluded that the value of Customers Shares is between $1.20 and $1.40 per Customers Share. Therefore, in the absence of a superior proposal, the offer of $1.27 cash per Customers Share is in the best interests of Customers Shareholders.

(e) No superior proposal has emerged

Since Customers announced the Scheme on 2 April 2012, no superior proposal to acquire Customers has emerged.

The Customers Directors have not become aware of any alternative proposal and have no basis for believing that an alternative proposal will be received.

(f) The Customers Share price may fall if the Scheme is not implemented

If the Scheme is not implemented, the trading price of Customers Shares will continue to be subject to market volatility, including general stock market movements, the impact of general economic conditions and the demand for listed securities. As such, if the Scheme is not implemented, the Customers Share price may trade below the Scheme Consideration being offered under the Scheme and return to pre-offer levels.

(g) If the Scheme does not proceed, Customers Shareholders will continue to be subject to the specific risks associated with Customers’ business and general market risks

The Customers Board considers that the underlying profitability and overall outlook for Customers remains strong and that Customers has significant growth prospects, including from current growth initiatives, as an independent ASX listed company. Nevertheless, these initiatives will take time to fully implement and carry execution risks, some of which may be outside the control of Customers.

If the Scheme does not proceed, Customers Shareholders will continue to be subject to these execution risks as well as other specific risks inherent in Customers’ business. These include changes in law that adversely impact Customers’ business, political and regulatory risks particularly in the context of ATMs at gaming venues, litigation risks, and technology risks. Additionally, structural changes within the core ATM business may adversely impact Customers’ financial performance.

In addition, the future price of Customers Shares will be subject to external economic and market factors. The Scheme removes these risks and uncertainties for Customers Shareholders and allows them to fully exit their investment in Customers at a price that the Customers Board believes is attractive. If the Scheme is approved and implemented, these risks and uncertainties will be assumed by DirectCash, as the sole shareholder of Customers following implementation of the Scheme.

(h) No brokerage or stamp duty

Customers Shareholders will not be required to pay any brokerage or stamp duty on the disposal of their Customers Shares under the Scheme. However, if Customers Shareholders sell their Customers Shares on-market prior to close of trading on ASX on the Effective Date, they may incur such costs.

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SECTiON 2DISADVANTAGES OF THE SCHEME

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SECTiON 2DISADVANTAGES OF THE SCHEME

Although the Scheme is recommended by the Customers Directors (in the absence of a superior proposal), and the Independent Expert has concluded that the Scheme is in the best interests of Customers Shareholders, factors which may lead you to consider voting against the Scheme include the following.

(a) Scheme Consideration

You may hold a different view to the Customers Directors and the Independent Expert and believe that the Scheme Consideration of $1.27 cash per Customers Share is inadequate.

(b) Loss of exposure to Customers’ current and future growth assets

DirectCash is offering to acquire Customers Shares for $1.27 per share in cash under the Scheme. If the Scheme is implemented, Customers Shareholders will no longer participate in the future performance of Customers. This will mean that Customers Shareholders will not retain any exposure to Customers’ assets or have the potential to share in the value that could be generated by Customers in the future.

(c) Loss of influence over the direction of Customers

If the Scheme is approved and implemented, you will cease to have the right to influence the future direction of Customers through your voting rights as a Customers Shareholder. DirectCash will have the right to determine the future direction of Customers following implementation of the Scheme.

(d) Future dividends

If the Scheme is implemented, Customers Shareholders will not have the opportunity to receive future dividends from Customers, although any future dividend payments are not certain and are subject to the performance of Customers and the approval of the Customers Directors.

(e) Tax consequences

Implementation of the Scheme may have tax consequences for Customers Shareholders. A general guide to the taxation implications of the Scheme is set out in section 8 of this Scheme Booklet. This guide is expressed in general terms and individual Customers Shareholders should seek professional advice regarding the tax consequences applicable to their own circumstances.

(f) A superior proposal could potentially emerge

It is possible that a more attractive proposal for Customers Shareholders could materialise in the future, such as a takeover bid with a higher offer price than the Scheme Consideration. However, as at the date of this Scheme Booklet, your directors have not received or become aware of any alternative proposal and have no basis for believing that an alternative proposal will be received.

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SECTiON 3FREqUENTLY ASKED

qUESTIONS

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SECTiON 3FREqUENTLY ASKED qUESTIONS

Question Answer

What is the Scheme? The Scheme is a scheme of arrangement between Customers and Customers Shareholders at the Scheme Record Date pursuant to which Customers is asking Customers Shareholders to consider and vote on the proposed Scheme to effect the acquisition of Customers by DCP Holdings, a wholly-owned subsidiary of DirectCash.

A scheme of arrangement is a statutory procedure that is commonly used to enable one company to acquire another company.

If the Scheme is approved and implemented, Customers Shareholders will receive a cash payment of $1.27 for each Customers Share they own.

What do the Customers Directors recommend? The Customers Directors unanimously recommend that all Customers Shareholders vote in favour of the Scheme, in the absence of a superior proposal.

Each Customers Director who holds Customers Shares intends to vote his or her Customers Shares in favour of the Scheme, in the absence of a superior proposal.

What is the opinion of the Independent Expert? The Independent Expert has concluded that the Scheme is fair and reasonable and is in the best interests of Customers Shareholders, in the absence of a superior proposal.

Who is DirectCash? DirectCash is a provider of ATMs, debit terminals and prepaid products in Canada. DirectCash also offers ATM services in the United States and Mexico and prepaid cards in Australia and the United Kingdom.

When and where will the Scheme Meeting be held? The Scheme Meeting will be held on Monday, 18 June 2012 at the KPMG Theatrette, Ground Floor, 147 Collins Street, Melbourne VIC 3000 commencing at 11.00am (Melbourne time).

What vote is required to approve the Scheme? For the Scheme to proceed, the Scheme Resolution must be passed by:

a majority in number of Customers Shareholders •who vote on the Scheme Resolution; and

at least 75% of the votes cast on the Scheme •Resolution.

The Court has the discretion to waive the first of these two requirements if it considers it appropriate to do so.

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Question Answer

How do I vote if I am not able to attend the meeting? You may complete the enclosed personalised Proxy/Voting Form in accordance with the instructions and return it in the reply paid envelope enclosed or by facsimile.

You may also appoint a proxy online by visiting www.linkmarketservices.com.au and following the online instructions. You will need your shareholder registration details.

The deadline for lodging your Proxy/Voting Form or voting online is 11.00 am on Saturday, 16 June 2012.

Am I entitled to vote? Each Customers Shareholder who is registered on the Register at 7.00pm (Melbourne time) on Saturday, 16 June 2012 is entitled to attend and vote at the Scheme Meeting.

When will I be paid? Those Customers Shareholders on the Register on the Scheme Record Date (which is expected to be at 5.00pm on Wednesday, 27 June 2012) will become entitled to the Scheme Consideration in respect of the Customers Shares they hold at that time.

Payment of the Scheme Consideration is expected to be made on or about Wednesday, 4 July 2012.

How will I be paid? All payments will be made by direct deposit into your nominated bank account, as advised to the Customers Registry as at the Scheme Record Date. If you have not nominated a bank account, payment will be by cheque sent to you by post to your registered address as shown on the Register.

Are there any conditions to be satisfied? The Scheme must be approved by the required shareholder majorities and the Court. The Scheme is also subject to a number of conditions discussed at section 5.5.

When will the result of the Scheme Meeting be known? The result of the Scheme Meeting will be available shortly after the conclusion of the meeting and will be announced to ASX once available. Even if the Scheme Resolution is passed by the Scheme Meeting, the Scheme is subject to approval of the Court.

Where can I get further information? For further information, you can call the Shareholder Information Line on 1800 237 687 (within Australia) or +61 2 8280 7613 (outside Australia).F

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SECTiON 4HOW TO VOTE

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SECTiON 4HOW TO VOTE

4.1 Your vote is important

For the Scheme to proceed, it is necessary that sufficient Customers Shareholders vote in favour of the Scheme. If you are registered as a Customers Shareholder at 7.00pm (Melbourne time) on Saturday, 16 June 2012, you will be entitled to vote on the Scheme.

4.2 Notice of Scheme Meeting

The Scheme will be voted on by Customers Shareholders at the Scheme Meeting to be held at the KPMG Theatrette, Ground Floor, 147 Collins Street, Melbourne VIC 3000 on Monday, 18 June 2012, commencing at 11.00am (Melbourne time).

The Notice of Scheme Meeting is contained as Annexure D to this Scheme Booklet.

4.3 Procedure

You may vote on the Scheme by attending the Scheme Meeting in person, by proxy, by attorney or, in the case of a corporation which is a Customers Shareholder, by corporate representative.

Information on how to vote using each of these methods is contained in the Notice of Scheme Meeting attached as Annexure D to this Scheme Booklet.

If you are in favour of the Scheme, you should vote in favour of the Scheme.

The Scheme will not proceed unless the Scheme is approved by Customers Shareholders.

4.4 Voting entitlement

Each Customers Shareholder who is registered on the Register at 7.00pm (Melbourne time) on Saturday, 16 June 2012 is entitled to attend and vote at the Scheme Meeting, in person, by proxy, by attorney or, in the case of a corporation which is a Customers Shareholder, by its representative appointed in accordance with the Corporations Act.

Information on entitlements to vote, including if you are a joint holder of Customers Shares, is contained in the Notice of Scheme Meeting which is attached as Annexure D to this Scheme Booklet.

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SECTiON 5SUMMARY OF THE SCHEME

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SECTiON 5SUMMARY OF THE SCHEME

5.1 What you will receive

If the Scheme is approved and implemented, Customers Shareholders will receive a cash payment of $1.27 per Customers Share.

Payments will be made by direct deposit into your nominated bank account, as advised to the Customers Registry as at the Scheme Record Date. If you have not nominated a bank account, payment will be by cheque sent to you by post to your registered address as shown on the Register.

Payment of the Scheme Consideration will be made on the Implementation Date, currently expected to be Wednesday, 4 July 2012.

If a Customers Shareholder does not have a registered address or Customers considers the shareholder is not known at its registered address and no bank account has been nominated, payments due to the shareholder will be held by Customers until claimed or applied under laws dealing with unclaimed money.

5.2 Determination of persons entitled to Scheme Consideration

(a) Dealings on or prior to the Scheme Record Date

For the purposes of calculating entitlements under the Scheme, any dealing in Customers Shares will only be recognised if:

in the case of dealings of the type to be effected by •CHESS, the transferee is registered in the Register as the holder of the relevant Customers Shares on or before the Scheme Record Date; and

in all other cases, registrable transmission applications •or transfers in respect of those dealings are received on or before the Scheme Record Date at the Customers Registry.

Subject to the Corporations Act, ASX Listing Rules and the Customers constitution, Customers will register registrable transmission applications or transfers of Customers Shares which it receives by the Scheme Record Date. Customers will not accept for registration or recognise for any purpose any transmission application or transfer in respect of Customers Shares received after the Scheme Record Date.

(b) Dealings after the Scheme Record Date

For the purposes of determining the entitlement to Scheme Consideration, Customers will, until the Scheme Consideration has been provided, maintain the Register, subject to the comments in section 5.2(a), in its form as at the Scheme Record Date. The Register in this form will solely determine entitlements to Scheme Consideration.

From the Scheme Record Date:

all statements of holding in respect of Customers Shares •cease to have effect as documents of title in respect of such Customers Shares; and

each entry on the Register will cease to be of any •effect except as evidence of entitlement to Scheme Consideration in respect of the Customers Shares relating to that entry.

5.3 Implementation Date

The Implementation Date for the Scheme is expected to be Wednesday, 4 July 2012. Once the Scheme Consideration has been paid, the Scheme Shares will be transferred to DirectCash without need for further acts by Scheme Shareholders.

In the case of Scheme Shares held in joint names, the Scheme Consideration will be made payable to the joint holders and sent to the holder whose name appears first in the Register as at the Scheme Record Date.

5.4 If the Scheme does not proceed

If the Scheme does not proceed, Customers Shareholders will continue to hold Customers Shares.

In the absence of any alternative or competing proposal to the Scheme, Customers will continue as a stand alone entity. Customers Shareholders will continue to be exposed to the risks relating to Customers’ business as set out in section 6.7.

In the absence of an alternative proposal which is similar or superior to the Scheme, it is possible that the price at which Customers Shares trade will fall.

Depending on the reasons why the Scheme does not proceed, Customers may be liable to pay the DirectCash Reimbursement Fee. Information on the DirectCash Reimbursement Fee is set out in section 5.5.

5.5 Scheme Implementation Deed

On 2 April 2012, Customers and DirectCash entered into a Scheme Implementation Deed in relation to the Scheme under which Customers agreed to propose the Scheme. The Scheme Implementation Deed contains terms and conditions that are standard for these types of agreements, including in relation to the parties’ obligations to implement the Scheme and Customers’ obligation to conduct its business in the ordinary course during the Scheme process.

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A summary of the key elements of the Scheme Implementation Deed is set out below. A full copy of the Scheme Implementation Deed was lodged with ASX on 2 April 2012 and can be obtained from www.asx.com.au or from www.customersatm.com.au

(a) Conditions Precedent

Implementation of the Scheme is subject to the following conditions precedent which must be satisfied or waived before the Scheme can be implemented:

Regulatory approvals:• ASIC and ASX issue any consents or approvals reasonably necessary to implement the Scheme;

• Court approval: the Court approves the Scheme;

• Shareholder approval: Customers Shareholders approve the Scheme;

Independent Expert’s Report:• the Independent Expert concludes that the Scheme is in the best interests of Scheme Shareholders and does not change its conclusion or withdraw its report prior to the Scheme Meeting;

• No Customers Prescribed Occurrence: no Customers Prescribed Occurrence occurs between 2 April 2012 and 8.00am on the Second Court Date; and

• Representations and warranties: the representations and warranties given by Customers and DirectCash to each other are true and correct in all material respects.

Full details of the Conditions Precedent and the ability of Customers and DirectCash to rely on the various Conditions Precedent and the provisions relating to satisfaction or waiver of these Conditions Precedent are set out in clause 3 of the Scheme Implementation Deed. The Scheme is not conditional on the satisfaction or waiver of the conditions precedent to the Acquisition Facility that will finance the Scheme Consideration which are summarised in section 7.4(c). As at the date of this Scheme Booklet, Customers is not aware of any reason why the Conditions Precedent will not be satisfied.

(b) Exclusivity

The Scheme Implementation Deed contains certain exclusivity arrangements in favour of DirectCash. These arrangements are in line with market practice in this regard and may be summarised as follows:

• No Talk: Customers must not participate in discussions or provide information that may lead to a Competing Transaction.

• No Shop: Customers must not directly or indirectly solicit any enquiries, discussions or proposals that may lead to a Competing Transaction.

• Notification: If Customers is approached in relation to a Competing Transaction, or a proposed or potential Competing Transaction, Customers must

notify DirectCash of any such approach, and provide DirectCash with the identity of the relevant person making or proposing the Competing Transaction (subject to the person consenting to Customers disclosing their identity).

• Matching Right: Customers is prohibited from entering into an agreement to undertake a Competing Transaction and must use its best endeavours to ensure that none of the Customers Directors recommend a Competing Transaction unless Customers has given DirectCash at least five Business Days to provide a proposal to Customers that is no less favourable than the Competing Transaction.

However, Customers is not required to comply with its obligations under the No Talk and Notification provisions in the Scheme Implementation Deed if the Customers Board determines that complying with those provisions would be likely to constitute a breach of the fiduciary duties owed by any Customers Director and, in the case of the No Talk provision, that the Competing Proposal is (or may reasonably be expected to lead to) a Superior Proposal.

These arrangements are set out in full in clause 10 of the Scheme Implementation Deed.

(c) DirectCash Reimbursement Fee

In accordance with market practice, Customers has agreed to pay DirectCash a reimbursement fee of $1.7 million (excluding GST) in certain circumstances. Those circumstances are:

• Change of recommendation: any member of the Customers Board ceases to recommend the Scheme, other than as a result of:

(1) the Independent Expert opining that the Scheme is not in the best interests of Scheme Shareholders (other than as a result of a Competing Transaction);

(2) DirectCash is in material breach of the Scheme Implementation Deed and this breach is not remedied within 5 Business Days of notice being given; or

(3) a failure of a Condition Precedent (except for a Customers Prescribed Occurrence or breach of a representation or warranty given by Customers), other than as a result of a breach by Customers of its obligations to use its best endeavours to procure that the Conditions Precedent are satisfied;

• Recommendation of Competing Transaction: any member of the Customers Board publicly recommends, promotes or otherwise endorses a Competing Transaction;

Agreement to undertake Competing Transaction:• Customers enters into a legally binding agreement to undertake a Competing Transaction;

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SECTiON 5SUMMARY OF THE SCHEME CONTINUED

Change of control of Customers:• a person other than DirectCash (or its associates) acquires voting power of 50% or more in Customers at any time prior to the date 9 months after the End Date pursuant to a transaction that is publicly announced before the Scheme Meeting and is, or becomes, free from defeating conditions; or

• Material breach: Customers is in material breach of any clause of the Scheme Implementation Deed and DirectCash terminates the Scheme Implementation Deed as a result.

The Customers Directors consider the DirectCash Reimbursement Fee to be reasonable and appropriate in amount, structure and effect. The fee is not payable if the Scheme does not proceed merely because Customers Shareholders do not vote in favour of the Scheme in sufficient numbers to satisfy the legal requirements.

(d) Customers Reimbursement Fee

DirectCash has agreed to pay Customers a reimbursement fee of $500,000 (excluding GST) if Customers terminates the Scheme Implementation Deed on the basis of a material breach of the Scheme Implementation Deed by DirectCash (Customers Reimbursement Fee). For full details of the Customers Reimbursement Fee, see clause 12 of the Scheme Implementation Deed.

(e) Termination

Customers can terminate the Scheme Implementation Deed if:

Conditions Precedent:• the Conditions Precedent are not satisfied or waived by the End Date;

• Material breach: DirectCash is in material breach of the Scheme Implementation Deed;

• Change of recommendation: the Customers Board publicly recommends a Superior Proposal; or

• Court or government action: a Court or Government Agency has taken any action permanently restraining or otherwise prohibiting the acquisition of Customers by DirectCash, or has refused to do any thing necessary to permit such transaction, and the action or refusal has become final and cannot be appealed.

DirectCash can terminate the Scheme Implementation Deed if:

• Conditions Precedent: the Conditions Precedent are not satisfied or waived by the End Date;

Customers Material Adverse Change:• there is a Customers Material Adverse Change;

• Material breach: Customers is in material breach of the Scheme Implementation Deed;

• Change of recommendation: any member of the Customers Board changes or withdraws their recommendation to Customers Shareholders to vote in favour of the Scheme, or recommends a Competing Transaction;

• Takeover bid: after a third party publicly proposes a takeover bid for all of the Customers Shares, DirectCash publicly announces an intention to make a takeover bid for all of Customers Shares under Chapter 6 of the Corporations Act. The value of the consideration offered under DirectCash’s takeover bid must be not less than the Scheme Consideration. The takeover bid must be subject to a non-waivable defeating condition that DirectCash receives acceptances which increase its Relevant Interests to at least 50% of the Customers Shares. Other than that defeating condition, the takeover bid must be subject to no defeating conditions other than those set out in clause 14.1(c)(5) of the Scheme Implementation Deed; or

Court or government action:• a Court or Government Agency has taken any action permanently restraining or otherwise prohibiting the acquisition of Customers by DirectCash, or has refused to do any thing necessary to permit such transaction, and the action or refusal has become final and cannot be appealed.

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5.6 Deed Poll

DirectCash has executed the Deed Poll, pursuant to which DirectCash has agreed, subject to the Scheme becoming Effective and in accordance with the provisions of the Scheme, to deposit an amount equal to the Scheme Consideration payable to all Scheme Shareholders in a trust account operated by Customers as trustee for the Scheme Shareholders, except that any interest on the amounts deposited (less bank fees and other charges) will be credited to DirectCash’s account.

Under the Scheme, Customers must pay this money to the Scheme Shareholders on the Implementation Date.

5.7 Warranties by Customers Shareholders

The Scheme provides that each Scheme Shareholder is taken to have warranted to Customers and DirectCash, and appointed and authorised Customers as its attorney and agent to warrant to DirectCash, that all their Customers Shares (including any rights and entitlements attaching to those shares) which are transferred under the Scheme will, at the date of transfer, be fully paid and free from all mortgages, charges, liens, encumbrances, pledges, security interests and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind, and that they have full power and capacity to sell and to transfer their Customers Shares to DirectCash or DCP Holdings (as applicable) together with any rights attaching to those shares.

5.8 No brokerage or stamp duty

Scheme Shareholders will not incur any brokerage or stamp duty in connection with the Scheme.

5.9 ASX delisting

On a date after the Implementation Date to be determined by DirectCash, Customers will apply:

for termination of the official quotation of Customers Shares •on the ASX; and

to have itself removed from the official list of the ASX.•

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SECTiON 6INFORMATION ABOUT

CUSTOMERS

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SECTiON 6INFORMATION ABOUT CUSTOMERS

6.1 Introduction

Customers Limited operates the largest independent ATM network in Australia and a growing fleet in New Zealand.

The principal activities of Customers consist of:

the provision of ATM services to the convenience market •in Australia (the core business);

the provision of ATM services and other services to the •financial institution industry and corporate markets in Australia (outsourcing); and

the provision of ATM services to the New Zealand market •via its partially owned subsidiary, New Zealand ATM Services Limited (NZATM).

Since 2003, Customers has participated in the independent ATM industry. In December 2004, Customers further established its position in the Australian ATM convenience market with the acquisition of a fleet of St George Bank Merchant ATMs. In December 2006, Customers consolidated its position when it acquired ATM Solutions Australasia Pty Limited, adding 3,300 merchant ATM locations to the existing portfolio.

6.2 Overview of operations

(a) Convenience ATMs (core business)

Customers’ core business is owning, deploying and operating ATMs across Australia. Customers has a market share of the total ATM market in Australia of approximately 19%.1 As at 31 March 2012, Customers had 5,339 convenience ATMs installed across Australia. Customers’ ATMs are located principally in the eastern states of Australia and are primarily branded with the Customers’ house brands. Customers also has branding agreements in place with Citibank, Bendigo Bank, Mortgage House and Arab Bank under which ATMs are branded with the counter-party’s brand.

Over the half financial year to 31 December 2011, the convenience business contributed 98% of total sales to external customers.

Customers has expanded its ATM fleet both organically and by acquisition, most recently in August 2011 through the acquisition of 124 merchant sites from Aussie ATM, part of MyATM Holdings Limited.

In November 2009, Customers entered into a partnership agreement with Nautilus Hyosung to distribute a range of Nautilus Hyosung’s ATM models, including the financial institutions ATM, Monimax series. Nautilus Hyosung, a subsidiary of the Korean listed Hyosung Group, is a provider of hardware and software solutions to the ATM and self-service financial services market globally.

Dec 03 Dec 04

St GeorgeAcquisition

ATMSolutions Acquisition

5,748

Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11

6,000

5,000

4,000

3,000

2,000

1,000

-

Figure 3: Number of Customers ATMs installed in Australia

Note: number of Customers ATMs are approximations and NZ ATMs are not included. Source: Customers.

1. C8 Points of Access to the Australian Payments System, RBA as at July 2011, Customers ATMs: 5,724.

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(b) Financial institutions/corporate outsourcing

Customers recently entered into ATM outsourcing service agreements with Coles Express and Bank of queensland (BOq). Under these outsourcing arrangements, Customers installs, operates and maintains ATM fleets on behalf of the client.

The Coles Express managed service agreement was announced in November 2011. It is a 5 year agreement to provide and manage 400 or more ATM terminals in Coles Express stores. The ATM terminal rollout commenced in late 2011 and, as at 31 March 2012, a total of 277 terminals were installed, with an estimated 400 expected to be installed by mid 2012.

The BOq agreement is a 5 year agreement for the provision of a full ATM managed service for 400 or more terminals that are BOq branded. As at 31 March 2012, a total of 364 terminals were deployed with full deployment anticipated prior to mid 2012.

Customers’ financial institutions and corporate outsourcing contracts provide it with the opportunity to continue to grow its market share in the Australian ATM industry with a fee for service revenue model that diversifies its traditional transaction based model.

(c) New Zealand

Customers has a 47.75% stake in NZATM. NZATM provides independent ATM services across New Zealand similar to the core Australian convenience business. Customers expects to move to full ownership within 12 months, at a cost of a further $11 million to $12 million.

The NZATM fleet has been in substantial roll out phase since November 2011 and numbered 585 as at 31 March 2012. With effect from 15 February 2012, all New Zealand major bank debit and EFTPOS card holders can access the NZATM network.

Figure 4: Composition of Customers ATM Fleet in Australia by Location and Business Type2

Source: Customers.

2. As at December 2011.

New South Wales 27%

Queensland 26%

Victoria 22%

South Australia 11%

Western Australia 8%

Northern Territory 4%

Australian Capital Territory 1%

Tasmania 1%

Gaming 26%

Petrol station 19%

Pub/Club 13%

Convenience store 10%

Other 10%

Shopping centre 8%

Supermarket 7%

Café/Restaurant 7%

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SECTiON 6INFORMATION ABOUT CUSTOMERS CONTINUED

6.3 Financial information

The following section summarises certain historical financial information regarding Customers for the years ending 30 June 2010 and 30 June 2011 and the 6 months ending 31 December 2011.

The financial information in this section is a summary only and is prepared for the purpose of this Scheme Booklet. The financial information has been prepared in accordance with the Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act. Further details on Customers financial performance is provided in the audited full year results and the audited half-year results provided to ASX. These documents are available as follows:

from ASX or on its website at • www.asx.com.au; or

from Customers’ website at • www.customersatm.com.au

(a) Income Statement

Half year ended Full year ended Full year ended$’000 31 Dec 2011 30 June 2011 30 June 2010

Revenue from continuing operations 64,563 124,398 117,025

Share of profits of associates accounted for using the equity method 37 - -

Other income 59 54 115

Expenses

ATM Network expense (32,549) (56,794) (49,115)

Employee benefits expense (7,735) (12,799) (10,165)

Depreciation and amortisation expense (11,403) (22,600) (20,567)

Non-recoverable GST (1,164) (2,516) (3,184)

Share of loss of associates accounted for using the equity method - (352) (121)

Other expenses (5,744) (8,109) (6,654)

Net finance costs (2,530) (3,854) (2,567)

Profit before income tax (expense)/benefit from continuing operations 3,534 17,428 24,767

Income tax (expense)/benefit (1,479) 1,317 (5,890)

Profit after income tax (expense)/benefit from continuing operations 2,055 18,745 18,877

Loss after income tax benefit from discontinued operations - (60) (238)

Profit after income tax (expense)/benefit 2,055 18,685 18,639

Other comprehensive income

Foreign currency translation 18 (49) 7

Net change in fair value of cash flow hedges transferred to profit or (loss), net of tax - - (83)

Other comprehensive income, net of tax 18 (49) (76)

Total comprehensive income for the half-year 2,073 18,636 18,563

Earnings per share from continuing operations attributable to the owners of Customers

Basic earnings per share 2.0 cents 13.8 cents 14.0 cents

Diluted earnings per share 2.0 cents 13.8 cents 13.7 centsFor

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(b) Balance Sheet

Half year ended Full year ended Full year ended$’000 31 Dec 2011 30 June 2011 30 June 2010

Current assets

Cash and cash equivalents 3,395 5,441 80

Trade and other receivables 4,191 3,123 3,638

Other 1,398 1,669 1,620

Total current assets 8,984 10,233 5,338

Non-current assets

Investments accounted for using the equity method 195 158 1,079

Property, plant and equipment 54,487 51,334 52,790

Intangibles 155,669 156,397 151,201

Other 4,292 4,219 5,817

Total non-current assets 214,643 212,108 210,887

Total assets 223,627 222,341 216,225

Current liabilities

Trade and other payables 10,733 11,749 10,896

Borrowings 6,157 33,654 3,500

Derivative financial instruments 232 - -

Income tax 4,053 2,513 3,988

Employee benefits 1,132 951 690

Other 2,137 - 119

Total current liabilities 24,444 48,867 19,193

Non-current liabilities

Borrowings 31,636 - 27,114

Deferred tax 1,766 1,828 1,696

Employee benefits 359 302 195

Other - 5,430 3,151

Total non-current liabilities 33,761 7,560 32,156

Total liabilities 58,205 56,427 51,349

Net assets 165,422 165,914 164,876

Equity

Contributed equity 184,826 184,826 186,123

Reserves (56) (42) 7

Accumulated losses (17,166) (17,292) (21,254)

Equity attributable to the owners of Customers Limited 167,604 167,492 164,876

Non-controlling interest (2,182) (1,578) -

Total equity 165,422 165,914 164,876

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6.4 Customers Shares

As at the date of this Scheme Booklet, Customers’ capital comprises 134,869,357 ordinary shares on issue and 1,411,465 Performance Rights. As at the date of this Scheme Booklet, the substantial Customers Shareholders (as disclosed to ASX or as separately advised by the Customers Shareholder) and their interest in Customers were:

Customers Shareholder Customers Shares % of Customers Shares

Taverners Holdings (Aust) Pty Ltd 25,714,082 19.1%

Caledonia (Private) Investments Pty Ltd 17,677,258 13.1%

Thorney Holdings Pty Ltd 13,000,000 9.6%

Regal Funds Management Pty Limited 9,999,486 7.4%

Renaissance Smaller Companies Pty Ltd 9,878,820 7.3%

6.5 Customers Board

The current Customers Board comprises the following persons:

Mr Peter Polson, Chairman and Non-Executive Director;•

Mr John Russell, Managing Director and Chief •Executive Officer;

Mr Charles Carbonaro, Non-Executive Director;•

Mr Ross Herron, Non-Executive Director; and•

Mr Ross Burney, Non-Executive Director.•

6.6 Customers Directors’ intentions

The legislation requires a statement by the Customers Directors of their intentions regarding Customers’ business. If the Scheme is implemented, the Customers Board will be reconstituted. It is for the reconstituted Customers Board to determine its intentions as to:

the continuation of the business of Customers;•

any major changes, if any, to be made to the business •of Customers; and

the future employment of the present employees •of Customers.

The current intentions of DirectCash with respect to these matters are set out in section 7.5.

If the Scheme is not implemented, the Customers Directors intend to continue to review the operation of the business in the ordinary course.

6.7 Risks relating to Customers’ business

There are existing risks relating to Customers’ business and an investment in Customers which will continue to be relevant to Customers Shareholders if the Scheme does not become Effective. These risks include but are not limited to the risks as follows.

(a) General risks

The market price of Customers Shares and future distributions made to Customers Shareholders will be influenced by a number of factors which may include changes in:

consumer and business sentiment and overall performance •of local and international stock markets;

general economic outlook in Australia and internationally;•

government fiscal, monetary and regulatory policies;•

prevailing economic conditions including inflation, interest •rates, foreign exchange rates and consumer demand; and

accounting standards which affect the financial performance •and position reported by Customers.

(b) Customers specific risks

(1) Regulatory risks

Under amendments made by the Gambling Regulation Amendment (Licensing) Act 2009 (Vic), ATMs will not be permitted in approved gaming venues in Victoria from 1 July 2012, unless specifically approved by the Victorian Commission for Gambling and Liquor Regulation. Around 120 of Customers’ ATMs will be removed as a consequence of this legislation which currently generate circa 4% to 4.5% of total core business revenues. Customers is developing an EFTPOS solution which is intended to comply with legislation governing the operation of EFTPOS devices in gaming venues, however, it is unclear how successful Customers’ EFTPOS solution will be in the market. It is also uncertain whether similar legislation will be passed in other states of Australia.

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The Commonwealth Government has released exposure drafts of the National Gambling Reform Bill 2012 and the National Gambling Reform (Related Matters) Bill 2012. The draft bills contain a requirement that by 1 February 2013, a $250 per card per day withdrawal limit be placed on all ATMs in gaming venues nationally, except in casinos and in communities where this may cause unreasonable inconvenience. The bills have yet to be introduced into Parliament and whether the bills will be passed in the current or an amended form is unknown. However, the imposition of any limitations on ATM withdrawals in gaming venues may impact Customers’ ability to earn revenue from the 23% of its convenience ATM fleet located in gaming venues (excluding Victoria).

A joint Federal Department of Treasury and Reserve Bank of Australia Taskforce is examining whether there is a need for further measures to enhance competition and transparency across Australia’s ATM industry. The measures that will be adopted and their impact on Customers are currently unknown.

(2) Competition

In its core business and NZATM business, Customers competes with a number of independent ATM businesses. There is a risk that earnings of Customers could be adversely impacted by the need to further compete with new entrants in the market place, including by paying higher levels of merchant rebates, reducing transaction pricing or reducing the rate of increase of transaction pricing. Competition could also erode Customers’ market share, transaction volumes and impact its economies of scale.

In its financial institution and corporate business, Customers competes with a number of well established global operators with significant market share. There is a risk that Customers will not be able to compete profitably in the longer term.

(3) Operational risks

Customers is exposed to a variety of risks when operating as an ATM services provider. These include process error, fraud, systems failure, security and physical protection, customer service and staff skills and performance. A failure to adequately manage these risks may adversely impact the performance and reputation of Customers.

(4) Strategic initiatives

Customers is currently in the initial phases of implementing a number of strategic initiatives including the development of its financial institutions business and the NZATM business. There can be no assurance that these initiatives will be an ongoing success given they carry execution risks. There is also risk that Customers will not be able to successfully identify new service opportunities in the future and develop and bring new products and services to the market in a timely and cost-effective manner.

(5) Loss of staff

The loss of staff, particularly sales and operational staff, could have a material adverse impact on the financial performance and position of Customers.

(6) Structural and cyclical changes occurring in the payments sector

Cash remains the most common form of payment by consumers in Australia. Nonetheless, cash use as a share of total payments has declined, falling as a share of both the number and value of payments. This may adversely affect the performance and sustainability of Customers’ business. There are also a number of ongoing technology and security developments occurring in the payments sector which Customers may not be able to successfully implement in a timely and cost-effective manner.

(7) Contracts

Customers is a party to various major contracts associated with its business, including with respect to product supply, bailment facilities, cash servicing, the provision of managed services and ATM site placement. There is no guarantee of renewal of these contracts on terms which are commercially attractive to Customers, or at all. The loss, non-renewal or renewal on less favourable terms of such agreements may adversely affect Customers’ ability to conduct its business, or to maintain its profitability.

(8) Dispute and litigation risk

Customers, like any other business, is subject to the risk of becoming involved in disputes and litigation. Any material or costly dispute or litigation could adversely impact Customers.

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6.8 Material changes in Customers’ financial position since 31 December 2011

The latest published financial statements of Customers are the financial statements for the half-year ended 31 December 2011, which were released to ASX on 28 February 2012. A copy is available free of charge on Customers’ website (www.customersatm.com.au) or by writing to the Manager Corporate Affairs and Marketing, Customers Limited, Building 2, 148 Chesterville Road, Cheltenham VIC 3192.

To the knowledge of the Customers Directors, and except as disclosed elsewhere in this Scheme Booklet, the financial position of Customers has not materially changed since 31 December 2011, except as follows:

As announced to the market on 31 January 2012, •Customers has embarked on a program designed to deliver ongoing cost savings throughout the business, however, these cost savings are not anticipated to materially benefit the business until 2013. Customers is targeting ongoing cost reductions in the order of $2 million to $3 million per annum by improving efficiency across a range of key cost items;

On 31 January and 28 February 2012, Customers •announced that the expectation of the Customers Board at those dates was that full year reported EBITDA for the year ending 30 June 2012 would be between 13% and 17% below the reported EBITDA for the year ended 30 June 2011 of $44.2 million, assuming the current trading conditions continued without deterioration; and

On 31 January 2012, Customers announced that it •anticipated total depreciation and amortisation expense for the full year to be in the range of $23 million to $24 million, driven by the substantially increased fleet size inclusive of the outsourcing and NZATM initiatives, but that depreciation and amortisation attributable to the core business would reduce from the previous corresponding period.

Further information regarding Customers’ financial performance is set out in the Independent Expert’s Report which forms Annexure A to this Scheme Booklet.

6.9 Recent Customers Share price performance

The following chart shows the closing price of Customers Shares on ASX over the 12 months before the date of this Scheme Booklet.

Figure 5: Customers Share Price Performance

Source: IRESS, 10 May 2012.

As at 10 May 2012, the last trading day before the date of this Scheme Booklet, Customers Shares closed at $1.24.

2 May 11 2 Jul 11 2 Sep 11 2 Nov 11 2 Jan 12 2 Mar 12

$1.60

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

Share Price (A$) Current share price (as at 10 May): $1.2452 week minimum: $0.7252 week maximum: $1.38Scheme Consideration: $1.27

Volume (m)

14

12

10

8

6

4

2

-

Volume (m) Customers Share Price (A$)

19 May 11: Customers announcestrading update

2 Apr 12: Customers announcesrecommended cash offer from DirectCash

17 Oct 11: Customers announces that discussions had been held with a potential purchaser

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6.10 Public information available for inspection

As a company listed on the ASX and a ‘disclosing entity’ under the Corporations Act, Customers is subject to regular reporting and disclosure obligations. Broadly, these require Customers to announce price sensitive information as soon as it becomes aware of the information, subject to exceptions for certain confidential information. Customers’ recent announcements are available from www.asx.com.au. Further announcements concerning developments at Customers will continue to be made available on this website after the date of this Scheme Booklet.

Customers is required to prepare and lodge with ASIC and ASX both annual and half-yearly financial statements accompanied by a statement and report from the Customers Directors and an audit or review report. Copies of these and other documents lodged with ASIC may be obtained from or inspected at an ASIC office and on the Customers website (www.customersatm.com.au).

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SECTiON 7INFORMATION ABOUT

DIRECTCASH AND DCP HOLDINGS

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SECTiON 7INFORMATION ABOUT DIRECTCASH AND DCP HOLDINGS

7.1 Rationale for the Scheme

DirectCash is constantly seeking opportunities to expand its business. The bulk of DirectCash’s growth since its inception in 1997 to present has been through organic growth (i.e. utilising DirectCash’s own sales and distribution network to sign up new customers to long term contracts). However, DirectCash has also participated in the consolidation of the ATM business in Canada through the purchase of smaller businesses and therefore has some experience in dealing with acquisitions and integrating acquired assets and personnel into DirectCash’s own organisational structure.

The acquisition of Customers (via DirectCash’s wholly-owned subsidiary, DCP Holdings) will provide DirectCash with an opportunity to increase its revenue base. The opportunity to acquire Customers is attractive to DirectCash for a number of reasons, including:

Customers’ business (the ATM business) is one that •DirectCash understands well and while there are some local Australian banking and network differences, the mechanics of the ATM business is fairly similar worldwide;

DirectCash considers that the Australian market for ATMs •is less saturated than Canada (measured in terms of ATM transactions per deployed ATM and ATMs per capita) which means that DirectCash may be able to apply DirectCash’s experience in the Canadian market to profitably deploy additional ATMs at lower transaction levels; and

the large manufacturers of ATMs and ATM parts (which •are typically based in the United States or Korea) sell into all markets so DirectCash is already familiar with the manufacturers of the ATMs that are being used by Customers. Both DirectCash and Customers use some of the same types of equipment and there may be opportunities for better ATM and parts pricing through the increased buying power of a larger ATM network.

7.2 DCP Holdings

DCP Holdings is an Australian company registered in Victoria for the purpose of the Scheme. DCP Holdings does not have any existing operations but has available to it funding facilities to allow it to pay the Scheme Consideration to Customers Shareholders under the Scheme (see section 7.4 for further details).

DCP Holdings is a wholly-owned subsidiary of DirectCash Payments Australia Pty Ltd, which is in turn a wholly-owned subsidiary of DirectCash (see section 7.3 for information about DirectCash).

7.3 DirectCash

(a) Overview

DirectCash is a leading provider of ATMs, debit terminals and prepaid products in Canada. DirectCash also offers ATM services in the United States and Mexico and prepaid cards in Australia and the United Kingdom. DirectCash (including its predecessor entities) has been in the ATM business since 19973 and the debit terminal and prepaid products businesses since 2002. DirectCash first went public in 2004 as an income trust and converted to a dividend paying corporation on 31 December 2010.

DirectCash is incorporated in Alberta, Canada and is listed on the TSX (ticker: DCI). As at 9 May 2012, DirectCash’s market capitalisation (based on 13,839,279 shares outstanding and a trading price of C$24.75) was approximately C$342.5 million (approximately A$339.8 million4).

DirectCash has three wholly-owned Australian-incorporated subsidiaries:

DCP Holdings, which DirectCash holds through its 100% •ownership in DirectCash Payments Australia Pty Ltd and which has been incorporated for the purpose of acquiring all the issued capital in Customers under the Scheme; and

DirectCash Management Australia Pty Ltd, which is only •involved in the prepaid card business.

(b) DirectCash’s business lines

DirectCash’s business operations are divided into three main business lines: (1) ATM products and services; (2) prepaid cards and prepaid products; and (3) debit (point of sale or POS) terminals.

(1) ATM business

DirectCash’s ATM business has three main traditional types of product/service offerings:

(a) ‘Processing Contracts’, which typically refers to an ATM which is owned by a retailer or a third party and cash loaded by the retailer or a third party, where DirectCash processes the ATM transactions and the retailer or the third party pays for the transaction processing, maintenance, service and support;

(b) ‘Partial Placement’, which refers to an ATM owned and maintained by DirectCash but which is cash loaded by the retailer or a third party; and

(c) ‘Full Placement’, which refers to an ATM owned and maintained by DirectCash and cash-loaded by DirectCash.

DirectCash operates more ATMs in Canada than any major financial institution or ATM provider. As at 31 December 2011,

3. Teal Financial Corp., one of DirectCash’s predecessors, was incorporated on 25 September 1997.

4. Based on an exchange rate of AUD0.9921/CAD.

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DirectCash was operating/processing transactions for 7,488 ATMs in Canada, 345 ATMs in Mexico and 30 ATMs in the USA.

(2) Prepaid Products & Prepaid Card business

DirectCash’s Prepaid Products & Prepaid Card business is comprised of two parts:

(a) the Prepaid Product & Prepaid Card business; and

(b) the Prepaid Cellular, Long Distance & Land Line Products business.

DirectCash’s Prepaid Product & Prepaid Card platform is used by a significant number of merchants in Canada as a method of providing cash access to their customers without the cost of maintaining physical cash at their locations. DirectCash’s Product & Prepaid Card business currently primarily operates in Canada with much smaller operations in the United Kingdom and Australia.

DirectCash’s prepaid mobile, long distance and fixed line phone card business involves the sale of prepaid telephone airtime. As of April 2012, DirectCash offers these products in Canada only.

(3) Debit/POS Terminal business

In the debit terminal business, DirectCash has two different product/service offerings:

(a) ‘Debit Processing’, which refers to a debit terminal which is owned by a retailer or a third party, where DirectCash processes the debit terminal debit transactions and the retailer or third party pays for the transaction processing, maintenance, service and support; and

(b) ‘Debit Placement’, which refers to a debit terminal which is owned by DirectCash and is placed into a retailer’s premises.

As of April 2012, all debit terminals deployed by DirectCash were located in Canada.

(c) Board of Directors

DirectCash’s directors (in alphabetical order) as at the date of this Scheme Booklet are:

Mr Gary H Dundas;•

Ms Susan M Gallacher;•

Mr R Bradley Hurtubise;•

Mr Jeffrey J Smith (also President & Chief Executive Officer);•

Mr Leroy E Thiessen; and•

Mr Kevin W Wolfe.•

(d) Public information available for inspection

As DirectCash is listed on the TSX, historical trading and stock exchange information related to DirectCash is available on the stock exchange site at www.tmx.com (enter symbol DCI). All

public regulatory filings for DirectCash (and DirectCash Income Fund) required to be filed under applicable Canadian securities laws (i.e. for the period from December 2004 to present) are available on the Canadian Securities Commission’s public information site at www.sedar.com. Select DirectCash public filings are also posted on DirectCash’s website (www.directcash.net).

7.4 Funding arrangements for Scheme Consideration

(a) Total Scheme Consideration

The Scheme Consideration is 100% cash.

DirectCash will procure that the aggregate Scheme Consideration is deposited into a bank account established for the purpose of holding those funds on trust for the Scheme Shareholders on the Business Day before the Implementation Date. If the Scheme becomes Effective, DirectCash will cause the payment of the Scheme Consideration to be made to the Scheme Shareholders on the Implementation Date.

The amount of cash that DirectCash will be required to pay in respect of all the Customers Shares on issue (as well as for the Customers Shares that would be issued on full exercise of all outstanding Performance Rights) at the date of this Scheme Booklet will be $173,076,643.94.

(b) Overview of funding arrangements

DirectCash intends to fund the aggregate Scheme Consideration through debt facilities provided by Bank of Montreal (parts of which may be syndicated to other lenders selected by Bank of Montreal) (Acquisition Facility). DirectCash also intends to use funds from the Acquisition Facility to refinance certain of Customers’ existing debt facilities (Customers Debt), which will require approximately $42 million in addition to the Scheme Consideration.

The total funds required to fund the aggregate Scheme Consideration and refinance the Customers Debt will be approximately $215 million.

DirectCash will use funds made available under the Acquisition Facility to subscribe for ordinary shares and/or redeemable preference shares in DCP Holdings for a total consideration of at least $215 million (plus costs), thereby capitalising DCP Holdings with sufficient funds to pay the Scheme Consideration and refinance the Customers Debt.

On the basis of the arrangements set out in this section, DirectCash and DCP Holdings are of the opinion that they have a reasonable basis for holding the view that DCP Holdings will have sufficient funds available to it to fund the aggregate Scheme Consideration (and refinance the Customers Debt).

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(c) Particulars of the Acquisition Facility

DirectCash and Bank of Montreal have entered into a commitment letter in relation to the Acquisition Facility (and which attaches to it a term sheet setting out the principal terms of the Acquisition Facility) and have agreed to enter into definitive finance documentation as soon as reasonably practicable with a view to finalising relevant documentation by no later than 15 June 2012.

Under the Acquisition Facility, Bank of Montreal has agreed to provide funding of up to C$340 million (C$250 million of which is available for the purpose of DirectCash satisfying its obligations under the Scheme and refinancing the Customers Debt).

The right of DirectCash to access funds under the Acquisition Facility remains subject to the following Conditions Precedent as at the date of this Scheme Booklet:

satisfaction or waiver of the Conditions Precedent •to the Scheme;

amendment to the Customers Bailment Facility Agreement •satisfactory to Bank of Montreal in its sole discretion (including any increase to the amount of the Customer Bailment Facility Agreement);

the Scheme Implementation Deed not being terminated •and DirectCash not otherwise being entitled to decline to complete the Scheme in accordance with the Scheme Implementation Deed, the Deed Poll or the Scheme;

there being no amendment to, approval under or waiver •of certain provisions in the Scheme Implementation Deed (such as the Conditions Precedent to the Scheme) or any other provisions in the Scheme Implementation Deed, the Deed Poll, the Scheme or this Scheme Booklet that would be adverse to (or be reasonably likely to be adverse to) the interests of Bank of Montreal;

the release of all existing encumbrances (not in favour of •Bank of Montreal) granted by or indebtedness incurred by DirectCash and certain other members of the DirectCash Group (other than certain permitted encumbrances) have been or will be released or transferred to Bank of Montreal or fully and finally repaid on or before the Effective Date, as a

Documents

Announcement - registration of booklet - 20120514 · 2012. 5. 13. · A copy of the proposed Scheme is included in this booklet as Annexure B. A copy of this Scheme Booklet was provided