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Australian Settlements Limited 2021 Annual ReportDirectors’ Report (continued)Principal ActivitiesImpact of COVID-19 on our businessThe principal activities of ASL during the financial yearended 30 June 2021 were providing Members (knownas System Participants) with settlement services forATM/eftpos, VISA, Mastercard, direct entry, BPAY, NPP,PEXA and high value transactions, maintaining a riskmanagement system, acting as a focal point forMembers to participate in the payments system, anddeveloping payments services and strategies.The impact of the COVID-19 pandemic is ongoing andthe extent and duration of the impact of actions bygovernment, business and consumers in response toCOVID-19 continues to have significant economicimpacts and will continue to evolve. The economicoutlook continues to improve with the vaccine rollout,however further incidence of further localised citylockdowns or state border closures may continue.Profit for the financial year was 443,139 (2020: 1,099,288).To date the company has been able to commerciallynavigate the challenges posed by the impact of thepandemic and expects to be able to do so for theforeseeable future assuming there is no significantdeterioration of conditions. The company will continueto follow government guidelines, policies and adviceand endeavour to maintain the company’s operations inthe best and safest way possible while maintaining thehealth and safety of our people.Review of OperationsASL is an Authorised Deposit-taking Institution (ADI)subject to prudential supervision by the AustralianPrudential Regulation Authority (APRA) and operates anExchange Settlement Account (ESA) at the Reserve Bankof Australia (RBA) which is used for the settlement ofpayment obligations of System Participants.ASL is a principal member of AusPayNet, BPAY, VISA,Mastercard, eftpos, Austraclear, PEXA, and NPP, andaccepts responsibility for settling the payment systemobligations of System Participants that arise withinpayment streams. System Participants provide ASL withfunds which are used to meet their settlementobligations. The ASL Board has set the level of the fundsrequired appropriate to the level of risk.ASL is committed to maintaining best practice in all itsactivities, including risk management, having regard tothe size and nature of its operations. In so doing, ASLcomplies with all applicable prudential standards andguidance notes issued by APRA.Since inception, ASL has successfully met all itssettlement and other obligations as they have fallendue.Significant Changes in the State of AffairsLikely Developments and Expected Resultsof OperationsThere are no expected developments that are likely toaffect the operations of ASL or the expected results ofthose operations in financial years subsequent to thefinancial year ended 30 June 2021, other than COVID-19impacts as above.9Insurance of OfficersInsurance premiums have been paid to insure each ofthe Directors and Officers of the company against anycosts and expenses incurred by them in defending anylegal proceeding arising out of their conduct whileacting in their capacity as a Director or Officer of thecompany. In accordance with normal commercialpractice, disclosure of the premium amount and thenature of the insured liabilities is prohibited under theterms of the contracts. No additional cover has beenprovided for the benefit of the auditors of the company.There were no significant changes in the company’sstate of affairs during the year ended 30 June 2021.Environmental RegulationThe company’s operations are not regulated by anysignificant environmental regulation under a law of theCommonwealth or of a state or territory.7

Australian Settlements Limited 2021 Annual ReportDividendNo dividend was declared nor paid during the financialyear (2020: nil).Matters Subsequent to the end of theFinancial YearAt the date of this report the Directors are not aware ofany matter or circumstance, other than transactionsdisclosed in the financial statements, that has arisenand has significantly affected or may significantly affectthe operations of ASL, the results of those operations orthe state of affairs of ASL in the financial yearssubsequent to 30 June 2021.Auditor’s Independence DeclarationA copy of the auditor’s independence declaration asrequired under section 307C of the Corporations Act2001 is set out on page 9.Signed in accordance with a resolution of directors. Thedirectors have the power to amend and reissue thefinancial statements.Graeme Douglas WillisDirectorGarry Donald DinnieDirectorDated this 24th day of September 20218

Australian Settlements Limited 2021 Annual ReportAuditor’s Independence Declaration9

Australian Settlements Limited 2021 Annual ReportStatement of Comprehensive IncomeFor the year ended 30 June 2021Note20212020 Interest revenue2552,6532,722,355Borrowing 2016,734,463(9,836,465)(8,659,914)Net non-interest revenue9,557,0558,074,549Gross 1,399,796)(814,484)-Employee benefits expenses(5,720,137)(5,067,322)Administrative 3,1391,099,288--443,1391,099,288--Net interest incomeFee Income2Processing costsMiscellaneous income2Depreciation and amortisation expensesImpairment loss on plant and equipment9Profit for the year before income taxIncome tax expenseProfit for the year after income taxOther comprehensive income for the yearTotal comprehensive income for the yearDividends per share4The above statement of comprehensive income should be read in conjunction with the accompanying notes.10

Australian Settlements Limited 2021 Annual ReportStatement of Financial PositionAs at 30 June 2021Note20212020 ash and cash equivalents6Financial Assets - amortised costTrade and interest receivables72,429,5252,157,137Other assets8827,760810,783Plant and equipment91,930,2163,299,1459 2,000,000504,033,426464,180,482Right-of-use assetsIntangiblesEquity Instruments - other comprehensive incomeTotal assetsLiabilitiesTrade and other ,524Borrowings17483,869,058445,051,869Lease liability141,171,0251,352,687System participant 7815,437,739Total liabilitiesNet assetsEquityContributed equityRetained earningsTotal equity13The above statement of financial position should be read in conjunction with the accompanying notes.11

Australian Settlements Limited 2021 Annual ReportStatement of Changes in EquityFor the year ended 30 June 2021ContributedEquityRetainedEarningsTotal Equity 3,979,00510,359,44614,338,451Profit for the year-1,099,2881,099,288Other comprehensive income---1,099,2881,099,288Balance at 1 July 2019Total comprehensive income for the year-Transactions with owners in their capacities as owners:---Dividends provided for or paid---3,979,00511,458,73415,437,739Profit for the year-443,139Other comprehensive 80,878Balance at 30 June 2020Total comprehensive income for the yearTransactions with owners in their capacities as owners:Dividends provided for or paidBalance at 30 June 2021The above statement of changes in equity should be read in conjunction with the accompanying notes.12

Australian Settlements Limited 2021 Annual ReportStatement of Cash FlowsFor the year ended 30 June 2021Note20212020 ,528,7296,862,450(38,174)(224,689)Proceeds from sale of plant and equipment-9,500Net cash flows (used in) investing 174,681)(323,735)Net cash inflows from financing activities38,642,50629,285,308Net increase in cash and cash 673402,451,929339,212,987Cash flows from operating activitiesInterest receivedInterest paidReceipts from customers (inclusive of GST)Payments to suppliers and employees (inclusive of GST)Net cash inflows from operating activities16(b)Cash flows from investing activitiesLoans and InvestmentsPurchase of plant and equipment and intangiblesCash flows from financing activitiesNet movement in System Participants depositsLease Liabilities paymentsCash and cash equivalents at the beginning of thefinancial yearCash and cash equivalents at end of the year16(a)The above statement of cash flows should be read in conjunction with the accompanying notes.13

Australian Settlements Limited 2021 Annual ReportNotes to the Financial StatementsFor the year ended 30 June 2021Note 1: Summary of Significant Accounting PoliciesThe principal accounting policies adopted in the preparation of these financial statements are set out below. Thesepolicies have been consistently applied to all the years presented, unless otherwise stated. The financial statementshave been prepared for ASL as an individual entity.a)Basis of preparationThese general purpose financial statements have beenprepared in accordance with Australian AccountingStandards and Interpretations issued by the AustralianAccounting Standards Board (AASB) and theCorporations Act 2001. ASL is a for profit entity for thepurpose of preparing the financial statements. Allamounts are presented in Australian dollars.(i) Compliance with IFRSThese financial statements also comply withInternational Financial Reporting Standards (IFRS) asissued by the International Accounting StandardsBoard (IASB).(ii) Historical cost conventionThe financial statements have been prepared on ahistorical cost basis, except for certain financialassets and liabilities (including derivativeinstruments), which are measured at fair value.(iii) Changes in ComparativesWhere applicable comparative information has beenrestated to conform to presentation in the currentyear.b)Critical accounting estimates and judgementsThe preparation of financial statements in conformitywith Australian Accounting Standards requires the useof certain critical accounting estimates. Management isalso required to exercise its judgement in the process ofapplying the company’s accounting policies.Estimates and judgements are continually evaluatedand are based on historical experience and otherfactors, including expectations of future events thatmay have a financial impact on the company and thatare believed to be reasonable under the circumstances.significant effect in the amounts recognised in thefinancial statements:Note 9 - the carrying amount of plant & equipmentNote 10 - the carrying amount of intangible assetsNote 22 - the fair value of financial instrumentsc)COVID-19 impactThe COVID-19 pandemic has significantly impactedequity, debt, commodity markets and the overall globaleconomy. The company has considered the impact ofCOVID-19 and other market volatility in preparing itsfinancial statements. Judgement has been exercised inconsidering the impacts that the COVID-19 pandemichas had, or may have, on the company based on knowninformation. This consideration extends to the nature ofservices offered, members, supply chain, staffing, andgeographic regions in which the company operates.Other than as addressed in specific notes, there is nomaterial change in the significant estimates, judgementsand assumptions in the preparation of financialstatements. However, the ongoing COVID-19 pandemicmay impact the estimation uncertainty due to theextent and duration of actions by governments,business, and consumers to contain the spread of thevirus.d)Application of new and revised AccountingStandardsASL has adopted all new or amended AccountingStandards and Interpretations issued by the AustralianAccounting Standards Board (AASB) that are mandatoryfor the current reporting period. Any new or amendedAccounting Standards or Interpretations that are not yetmandatory have not been early adopted.The following are the critical judgements thatmanagement have made in the process of applying thecompany’s accounting policies and that have the most14

Australian Settlements Limited 2021 Annual ReportNotes to the Financial StatementsFor the year ended 30 June 20219Te)Income TaxThe income tax expense or revenue for the period is thetax payable on the current period’s taxable incomebased on the applicable income tax rate for eachjurisdiction adjusted by changes in deferred tax assetsand liabilities attributable to temporary differences andto unused tax losses. Under the concept of mutuality,ASL is only assessed for income tax on the portion ofincome derived from non-member services, includinginterest income.The current income tax charge is calculated on the basisof the tax laws enacted or substantively enacted at theend of the reporting period. Management periodicallyevaluates positions taken in tax returns with respect tosituations in which applicable tax regulation is subject tointerpretation. It establishes provisions whereappropriate on the basis of amounts expected to bepaid to the tax authorities.Deferred income tax is provided in full, using the liabilitymethod, on temporary differences arising between thetax bases of assets and liabilities and their carryingamounts in the financial statements. However, deferredtax liabilities are not recognised if they arise from theinitial recognition of goodwill. Deferred income tax isalso not accounted for if it arises from initial recognitionof an asset or liability in a transaction other than abusiness combination that at the time of the transactionaffects neither accounting nor taxable profit or loss.Deferred income tax is determined using tax rates andlaws that have been enacted or substantially enacted bythe end of the reporting period and are expected toapply when the related deferred income tax asset isrealised or deferred income tax liability is settled.Deferred tax assets are recognised for deductibletemporary differences and unused tax losses only if it isprobable that future taxable amounts will be availableto utilise those temporary differences and losses.relates to items recognised in other comprehensiveincome or directly in equity. In this case, the tax is alsorecognised in other comprehensive income or directly inequity, respectively.f)Financial instrumentsASL initially recognises financial assets on the trade dateat which the company becomes a party to thecontractual provisions of the instrument.Financial assets are initially measured at fair value. If thefinancial asset is not subsequently measured at fairvalue through profit or loss, then the initialmeasurement includes transaction costs that aredirectly attributable to the asset’s acquisition ororigination. The company subsequently measuresfinancial assets at either amortised cost or fair value.Premiums or discounts are amortised using the effectiveinterest method. Any decline in value of theseinvestments leading to the inability to recover theinvestment or part thereof are recorded, and anyimpairment is recognised in the Statement of Profit orLoss.All recognised financial assets are measured atamortised cost or fair value on the basis of the entity’sbusiness model for managing the financial assets andthe contractual cash flow characteristics of the financialassets.Specifically: Deferred tax assets and liabilities are offset when thereis a legally enforceable right to offset current tax assetsand liabilities and when the deferred tax balances relateto the same taxation authority.Debt investments that are held within a businessmodel whose objective is to collect the contractualcash flows, and that have contractual cash flowsthat are solely payments of principal and intereston the principal amount outstanding, aresubsequently measured at amortised cost.Debt investments that are held within a businessmodel whose objective is both to collect thecontractual cash flows and to sell the debtinstruments, and that have contractual cash flowsthat are solely payments of principal and intereston the principal amount outstanding, aresubsequently measured at fair value through othercomprehensive income (FVTOCI).All other debt investments and equity investmentsare subsequently measured at fair value throughprofit or loss (FVTPL).Current tax assets and tax liabilities are offset where theentity has a legally enforceable right to offset andintends either to settle on a net basis, or to realise theasset and settle the liability simultaneously. Current and deferred tax is recognised in the statementof comprehensive income, except to the extent that itWhen a debt investment measured at FVTOCI isderecognised, the cumulative gain or loss previously15

Australian Settlements Limited 2021 Annual ReportNotes to the Financial StatementsFor the year ended 30 June 2021recognised in other comprehensive income isreclassified from equity to profit or loss as areclassification adjustment. In contrast, for an equityinvestment designated as measured at FVTOCI, thecumulative gain or loss previously recognised in othercomprehensive income is not subsequently reclassifiedto profit or loss.Financial assets are not reclassified subsequent to theirinitial recognition, except when there is a change tobusiness model for managing financial assets.Financial assets are derecognised when the rights toreceive cash flows from the financial assets haveexpired. Derecognition also occurs when the rights toreceive cash flows from financial assets have beentransferred together with substantially all of their risksand rewards. Financial liabilities are derecognised whenthe obligation specified in the contract is discharged,cancelled or expired.g)Plant and equipmentPlant and equipment is stated at historical cost lessaccumulated depreciation and impairment losses.Historical cost includes expenditure that is directlyattributable to the acquisition of the items.The carrying amount of plant and equipment isreviewed annually to ensure it is not stated above itsrecoverable amount. The recoverable amount isassessed on the basis of the expected net cash flowsthat will be received from the assets’ employment andsubsequent disposal. The expected net cash flows havebeen discounted to their present values in determiningrecoverable amounts.Subsequent costs are included in the assets’ carryingamount or recognised as a separate asset, asappropriate, only when it is probable that futureeconomic benefits associated with the item will flow tothe company and the cost of the item can be measuredreliably. All other repairs and maintenance are chargedto profit and loss during the financial period in whichthey are incurred.The depreciable amount of all fixed assets, includingleased assets, is depreciated on a straight-line basis overthe asse

Business and has completed the Harvard Advanced Management Program and is a member of the companys Digital Committee and Risk Committee. Robert James RYAN Mr Ryan is the Chief Executive Officer of IMB Limited. Mr Ryan joined IMB Limited in 1999. Mr Ryan is a director of IMB Financial Planning Limited and The Flagstaff Group.