Cuscal Annual Report 2020

Annual Report 2020
Table of Contents
1 Summary year ended 30 June 2020
2 Letter from the Chairman and Managing Director
6 Review of Operations
9 Directors’ Report
11 Information on Directors
15 Auditor’s Independence Declaration
16 Independent Auditor’s Report
18 Directors’ Declaration
19 Statement of Profit and Loss
20 Statement of Other Comprehensive Income
21 Statement of Financial Position
22 Statement of Changes in Equity
23 Cash Flow Statement
24 Notes to the Financial Statements
82 Corporate Governance Statement
2020 | Annual Report

Summary
2019/2020
Summary 2019/2020 |
Letter from the Chairman Over the past 12 months, we have made significant
progress and improvements in all these areas. In
and Managing Director particular, our clients have told us they value
responsiveness and have been particularly impressed
with the speed with which we were able to adapt to
Annual Report 2020 the COVID-19 pandemic. This included transitioning
to a remote working environment whilst maintaining
The last financial year has seen a significant amount the continuity of our services, and communication
of change and pressure on Financial Services more and support under these circumstances.
broadly, and the Payments industry specifically.
The results of the work across the above programs
Even prior to the onset of COVID-19 impacts, we had
has been very positive and for the third consecutive
envisaged that the year would be financially
year we have demonstrated a positive uplift in each
challenging as we continued to sponsor 86 400
of our client experience metrics.
through its licencing, market launch and growth
phases. We are also pleased to report that many of our
Whilst our core ‘Payments’ business continued to clients have renewed their contracts with Cuscal over
deliver reasonably predictable and stable returns the past year for further terms of two to seven years.
through to March 2020, our key transactional
volumes were significantly affected by the COVID-19 People
downturn which had an immediate and adverse
impact to our revenue in the last quarter of the Throughout the year, we have continued to focus on
financial year. Further, with a delayed dilution of our ways to improve employee experience at Cuscal. This
investment in 86 400 we incurred more operating has been particularly important, as we had to very
losses than planned this year. quickly adapt and transition to new ways of working
as a result of COVID-19.
The ‘Series A’ capital raising for 86 400 was a
success, raising ~$33m of external capital at $1.35 One of our highlights is in the way we were able to
per share. quickly switch to an entirely remote workforce during
this period. This change highlighted opportunities for
Key focus areas for this year and the year ahead us and our people as we redesigned our ways of
include: working together, learned new skills and found ways
to connect and collaborate effectively.
Clients Ensuring that our employees feel engaged has been
Our Vision is to ‘Enable the Future’ for our clients. In a priority as we moved to this remote working
order to do this we are continuing to deliver environment. To support this, we have enhanced
innovative products and services to our clients. communication throughout the organisation,
Understanding what our clients need to enable the ensuring our employees are more regularly updated
success of their business and delivering positive on business performance and the impact that COVID-
client experiences is essential. 19 is having on our business, as well as providing
them with important information about our strategy
We have once again conducted our annual Voice of and priorities.
the Client Survey. The survey has now been running
for 3 years, and the feedback we receive in this We have also looked for ways to support their
survey is invaluable as it helps inform our operational wellbeing throughout this time and have introduced
excellence programs. Each year we seek to measure an online resource centre where we share all COVID-
and understand how we are performing and where 19 communications and resources to assist teams
we may need to improve. working remotely.
In FY20, we had a number of large programs focused Our employees have responded very positively to our
on delivering improvements in client experience, enhanced engagement through this process via
including: several surveys that have been conducted during the
period.
 Billing Transformation
 Thought Leadership
 Client Onboarding
 Responsiveness
 Resilience
2020 | Annual Report | 2

Letter from the Chairman and New Payments Platform Australia (“NPPA”)
Managing Director, continued Mandate Payment Services
In October 2019, the NPPA announced the Mandated
People, continued Payment Service (“MPS”) as a mandatory roadmap
capability for 2021.
Further, we have made some changes this year to
our approach to measuring employee engagement The NPP MPS will provide customers with more
and have introduced a continuous listening approach transparency and control around scheduled bill
to help us adapt and respond more effectively in payments because all authorisations will be able to
these times of rapid change. Our most recent survey be seen in one place inside their banking application.
showed very positive results in the areas of NPP MPS will open up other possibilities, such as
communication, keeping people informed, and allowing payrolls to be paid by a cloud accounting
understanding our goals and what people need to do platform without users having access to re-key
to help achieve our goals. details into banking sites.
Our continuous listening approach will continue next Cuscal (as an NPP Participant) and our clients (as
year, and we will use data to find the most important Identified Institutions) are subject to certain
drivers of engagement and put programs and mandatory compliance requirements to implement
initiatives in place to support these. debtor-related aspects of the MPS.
It is anticipated that a combination of the CDR and
Open Banking NPP MPS will support a shift towards real time
payment initiation from many of the applications and
To successfully enable our clients’ open data
services that consumers use every day, as well as
strategies, we have been building a flexible and
execution services allowing customers to shift bank,
secure data exchange platform with consent and
superannuation, telecommunications and energy
security as central core features. These foundational
accounts between different providers.
capabilities of our Open Banking solution are vital for
our clients to successfully deliver valued experiences It will be important for clients to have the right
to their customers whilst managing the data that a platform in place that integrates with ecosystem
consumer has chosen to consent to share. partners, providing a secure and compliant data
exchange service.
Cuscal has taken the approach of phasing delivery of
our Open Banking solution, focusing on client’s initial Consumer consent will be the centrepiece of this
compliance obligations and providing the option of platform. Managing the permissions and security of
leveraging other capabilities, such as receiving consumer data will require secure and efficient
consumer data as a data recipient, as the market consumer consent capabilities. Cuscal’s approach will
develops. The purpose of this functional approach be aligned to the requirements of both the NPP MPS
and our roadmap is to offer clients an end-to-end, and CDR to ensure consumer consent can be
managed solution that takes care of their compliance captured and managed and we therefore expect
needs, while also partnering with them to identify greater synergies, insights and value for our clients.
and leverage value-added opportunities enabled by
the introduction of the consumer data right (“CDR”).
86 400 Licencing Agreement
Towards the end of June 2020, the Open Banking
One of the key value propositions that drove our
Project achieved the milestone of technical go-live for
investment in 86 400 was to provide Cuscal
Phase 1 of its Product Reference Data solution.
Shareholders and clients access to 86 400 capability
Cuscal has deployed automated development and learnings.
pipelines for our Product Reference Data Solution and
we are in the process of onboarding interested clients
who could be publishing their product data to the
market in late August / early September.

Letter from the Chairman and being significantly impacted by the COVID-19
Managing Director, continued environment in the latter part of the financial year.
Our capital position and overall financial position

86 400 Licencing Agreement, continued remain strong and resilient amid the stresses of the
current economic downturn.
The underlying 86 400 business continues to perform
well. At 30 June 2020 there were over 225,000 We retained our Standard & Poors A+ credit rating.
accounts on 86 400’s platform; more than $300m in
deposits; more than 650,000 transactions and The Review of Operations section of this report
balance updates each day. While mortgage growth is provides more detail on Cuscal’s financial
slower than plan, momentum has increased over performance for the year.
recent months as more brokers are accredited.
In recognition of this and Cuscal’s founding Board

investment, the Cuscal Board and Leadership Team
Following the AGM in November 2018, we farewelled
have been actively engaging with 86 400 to agree a
William (Bill) Conn who retired as Chairman after
right for Cuscal Shareholders and Clients to licence
serving three, three-year terms. He was replaced by
86 400’s capabilities.
Paul Lahiff who resigned as Chairman in October
Over the course of the year, the Cuscal Board and 2019 due to personal reasons.
Leadership Team have determined the terms of the
Licencing Agreement and agreed with 86 400 that While Paul was only Chairman for a brief period of
Cuscal shall be the exclusive distribution partner for time, we note appreciation for his valuable
86 400 products and services to Cuscal’s contribution to Cuscal, in particular the sale of our
Shareholders and Clients. ATM network to Armaguard.
We are now working on delivering eight distinct Trudy Vonhoff was elected by the Board as Interim
services delivered as APIs built with multiple Chair while Cuscal conducted a search for a new
integration partners as part of our Day 1 service Chairman. During this period, Trudy had a positive
offering during FY21. impact on the role and made a considerable effort to
connect with, and seek feedback from, our
Digital APIs Shareholders to ensure we have a strong
engagement plan in place. She also played an
We continue to deliver a variety of card-based APIs important role in the delivery of our approach to the
with many clients recently taking up digital bundle COVID-19 crisis. We thank Trudy for her additional
offerings. During COVID-19, our digital solutions and valued contribution as Interim Chair during this
such as Card Controls, Digital Card Issuance and period.
Pays have been particularly helpful to our clients and
we expect this will continue to be the way forward We also thank the other Directors who retired during
into FY21. the year, namely Ari Sarker, Rob Goudswaard and
Mark Genovese, for their contributions over their
terms and we welcome Ling Hai and Wayne
Financial Performance Stevenson who joined the Board in September 2019
The Consolidated Net Profit After Tax (“NPAT”) and January 2020 respectively.
attributable to the owners of Cuscal was $3.3 million
for the year ended 30 June 2020.
A special note from the Managing Director
This result includes a number of key significant and After an extensive search, I was pleased to announce
‘one-off’ items, primarily being the continued that we have appointed Elizabeth Proust AO as an
absorption of 86 400 operating losses (up $8.6m on Independent Director and Chairman effective, 1 June
2019) and ATM sale benefits recognised in the prior 2020.
year. Excluding these significant and ‘one-off’
impacts, the Group Underlying Payments Net Profit Elizabeth brings broad experience to the Cuscal
after Tax was $21.9m; up $3.1m (16%) from 2019. Board, having served on a number of high-profile
public and private boards, across a range of sectors
The underlying business continued to deliver including Financial Services.
relatively predictable and stable returns – whilst

Letter from the Chairman and
Managing Director, continued
The Year Ahead

Over the course of the last year, we have worked
closely with the Cuscal Board to refine our vision and
strategic priorities to ensure that we continue to
increase our relevance in the payments landscape.
In continuing to ‘Enable the Future’ for our clients,

our focus areas are geared towards strategic
investments in innovation while at the same time
optimising our time and cost to market on existing
products – both of which we expect will allow us to
expand our client reach.
We will also continue to improve system resilience

and cyber security capability to target emerging
risks, as well as enhance our products and work with
our clients to support their needs in digital payments,
innovation and thought leadership in this rapidly
changing environment.
Cuscal’s financial position remains relatively strong;

however we will continue to focus on maintaining and
preserving our regulatory capital position and
managing risk.
Our people are key to Cuscal and our clients’

success. Supporting our people, particularly through
an uncertain environment, remains crucial to
ensuring we continue to deliver excellent client
experiences.
We are mindful of the importance of good

communication and regular engagement with our
Shareholders on our strategic priorities and
performance. We are committed to continuing these
activities in the coming year.
Elizabeth Proust AO Craig Kennedy

Chairman Managing Director
Sydney, 24 August 2020

Review of Operations
Overview
The Consolidated Net Profit After Tax (“NPAT”)
attributable to the owners of Cuscal was $3.3 million
for the year ended 30 June 2020. This result is after
$2.8 million of losses attributable to minority interests
within 86 400 Holdings Limited, a subsidiary with the
Cuscal Group.
The NPAT result for the current and prior year have
been impacted by a number of significant and ‘one-
off’ items:
 $19.5 million of operating losses associated with

the 86 400 Digital Banking business (2019:
A reconciliation of statutory NPAT to underlying NPAT
$10.9 million);
is set out below:
 a $0.9 million contribution relating to the
2020 2019
discontinued ATM business, which was sold to Pre-tax Post-tax Pre-tax Post-tax
Reconciliation
Armaguard on 13 August 2019 (2019: $5.0 $m $m $m $m
million); Net Profit 3.2 3.3 32.2 22.2
86 400 loss* 29.5 19.5 15.6 10.9

 In 2019 only, a $7.3 million after tax benefit
ATM contribution (1.2) (0.9) (7.2) (5.0)
relating to the release of impairment provisions ATM business
- - (10.4) (7.3)
against ATM assets and the release of certain provisions
other ATM related business provisions; and Licence provision - - (2.8) (2.0)
Underlying Net
31.5 21.9 27.4 18.8
 In 2019 only, a $2.0 million after tax licence Profit
*includes the impact of outside shareholder interests
provision release.
The ‘discontinued ATM business’ contribution was COVID-19 impact to FY20 result
included as part of the Underlying Result in the 2019
annual report; in the 2020 Annual Report it has been The current year result, particularly for the core
excluded from the Underlying Result from both the payments business, was impacted in late Q3/Q4 of
current and prior comparative periods. the financial year by material reductions to payment
volumes associated with the COVID-19 pandemic.
‘Underlying’ Result Increases in operating income during the year
through March 2020 were relatively strong – both
References in the Review of Operations to the compared to prior year and in line with plan – but
‘Underlying’ result excludes the significant, ‘one-off’ or were reduced in the June 2020 quarter by
discontinued items noted above. approximately $5m (pre-tax) attributable to the
macroeconomic downturn.
The prior year Underlying results have been restated
to remove the contribution relating to the now COVID-19 income impacts (Underlying NF&CI) - 2020
discontinued ATM business; which were included as $37m
2019 2020 pre-COVID 2020 COVID impacted $36.4m
part of the underlying result in previous annual
$35.3m
reports. $35m
$35.0m $34.7m
$34.4m
$33m
Underlying NPAT $31m

$31.9m
$30.9m
$30.6m
Underlying NPAT increased 16% from $18.8 million in $29m

2019 to $21.9 million for the year ended 30 June
2020. $27m
$27.4m
$25m
Q1 Q2 Q3 Q4

Cuscal mitigated the reduction in income by targeting Underlying Return on equity
discretionary spend reductions across all areas of the 9% 8.5%
7.6%
business. 8%
7%
6%
Underlying Operating Profit 5% 4.3%

4%
Underlying Net Profit before Tax increased 15% from 3% 2.7%
$27.4 million in 2019 to $31.5 million for the year 2%

1.2%
ended 30 June 2020. 1%
0%
Jun-16 Jun-17 Jun-18 Jun-19 Jun-20
Earnings and Dividend per share

Earnings per Share attributable to the owners of
Cuscal was 1.8 cents per share for the year.
Underlying Earnings per Share increased 1.7 cents per

share or 17% to 11.7 cents for the year ended 30
June 2020 from 10.0 cents per share for June 2019.
An interim ordinary dividend of 1.6 cents per share

was paid in April 2020 relating to the year ending 30
June 2020.
Underlying Net Fee & Commission income increased
10% on 2019. This includes impacts associated with No final ordinary dividend has been declared.
the COVID-19 induced economic environment.
This has resulted in total distributions of $3.0 million
Underlying Net interest income is primarily a result of having been paid for the year, a payout ratio of 91%
Balance Sheet activity to support the Payments on the full year result.
business. This decreased by 18% during the year as a
result of lower cash rates, which were partially offset
Capital and Reserves
by high average customer deposit volumes.
Capital and Reserves remain strong and well in excess
Underlying Net Operating Income increased more
of regulatory and internal capital requirements.
than the increase in Underlying Operating expenses
(6% v 4% respectively), highlighting improved At 30 June 2020, Cuscal’s capital adequacy ratio was
profitability of the core ‘Payments’ business. 19.7%, in line with the June 2019 ratio (also 19.7%)
on a post final dividend basis.
Shareholder returns Broadly, increases in risk-weighted assets arising

from the growth of 86 400’s digital banking business
Return on Equity have been somewhat offset by a reduced ‘risk-
weighted’ portfolio in Cuscal. This approach conforms
The Return on Equity (“ROE”) attributable to owners to the APRA industry guidance on ADI’s maintaining a
of Cuscal was 1.3% for the year ended 30 June 2020. strong capital position in this uncertain environment.
Underlying ROE increased 90 bps or 12% to 8.5% for

the year ended 30 June 2020 from 7.6% in 2019.
This increase reflects the impact of a higher

contribution from the Underlying Payments business
on an increased average equity base.

We will continue to balance capital preservation with
ongoing investment in strategic initiatives, whilst
remaining profitable. This investment includes our
Open Banking proposition, Fraud systems
enhancements, development of NPP mandated
payment capability and upgrades of legacy
transactional processing infrastructure. The benefits
from this ongoing investment will set us up to
emerge from the COVID-19 environment in a
stronger business and financial position.
86 400 update
A ‘Series A’ round of capital raising was completed in
April 2020; raising ~$33 million of external capital;
Outlook for 2021 settled at an issue price of $1.35 per share. A Series
B round of capital raising has now commenced
The Underlying payments business continued to deliver
seeking up to $80 million of additional capital at a
reasonably predictable and stable returns through the 9
modest uplift in price to Series A.
months to March 2020. Despite material increases in
annual compliance costs, increased investment in The underlying 86 400 business continues to perform
people capability and strategic initiatives, we were on well. At 30 June 2020 there were over 225,000
track to deliver planned results and minimum dividend accounts on 86 400’s platform; more than $300
outcomes. million in deposits; more than 650,000 transactions
and balance updates each day. While mortgage
Like most Australian businesses however, the June
growth is slower than plan, momentum has
quarter of the financial year was materially impacted
increased over the 2 months as more brokers are
by COVID-19 related influences. These impacts saw
accredited. Given the size and recent origination of
an immediate loss of revenue associated with
the lending book, we are not expecting any
reductions in transaction volumes; felt most acutely
significant impact on quality and performance due to
in our acquiring business (ATM & PoS channels). This
COVID-19.
influence has continued to impact the business into
the 2021 financial year.
The positive response from the market on the Series
The predictability of outcomes for 2021 remains A raising demonstrates confidence in 86 400 and its
challenging in this uncertain environment and are business model. The progress since then increases
clearly impacted by the pace of recovery of both the our confidence in Series B. Notwithstanding this, the
specific COVID-19 related health situation and COVID-19 environment has slowed institutional
investment appetite in general, as some potential
subsequent economic recovery; appearing to be
investors await stability and defer investment
assisted by Government initiatives. Despite the
current challenges, there is reason to remain decisions. 86 400 still expect to continue capital
optimistic with some predicted structural changes raising activities throughout 2020, but timing is less
being somewhat accelerated by the COVID-19 certain and capital may be secured later than
situation, including: anticipated.
 medium term positive momentum for our We expect to see 86 400 continue to grow their
investments in NPP, the Pays and prospects for a deposit and mortgage books and to continue to
broader industry ATM utility are all enhanced; and perform in line with expectation, and operations
continue to be successfully undertaken in the current
 increased and accelerated demand for our digital operating environment.
services (albeit this doesn’t immediately replace
the current short-term volume and revenue lost).
Future dividends
Into 2021, Cuscal’s financial position remains
relatively strong with our regulatory capital position As previously flagged, given the current uncertain
and credit risk profile well above minimum outlook around profitability, 86 400 capital raising
prudential requirements. activities and APRA’s preferred position for ADIs to
preserve capital in these challenging times, it
appears unlikely that any dividends will be paid for
the 2021 year.

Directors’ Report
 Digital applications development;
Introduction  Liquidity management and settlement services;
The directors of Cuscal Limited (“Cuscal”) submit  Specialised finance facilities;

herewith the annual financial report for the financial
year ended 30 June 2020. This Directors’ Report has  Network communication services;
been prepared in order to comply with the provisions
of the Corporations Act 2001.  Fraud management services;
 Real-time payments services via the New

Directors Payments Platform; and
The directors who held office during or since the end  Retail digital banking – through the ‘86 400’
of the financial year are: Group.
 E Proust AO, Chairman, appointed 1 June 2020

 C N Kennedy (Managing Director) Review of Operations
 S P W Laidlaw
Net Profit after Tax for the year ended 30 June 2020,
 H Ling, appointed 25 September 2019
attributable to the owners of Cuscal, was $3.3 million
 S A Petering
compared to $22.2 million for the previous year.
 W Stevenson, appointed 28 January 2020
 T Vonhoff, Interim Chair; October 2019 to June The main factors influencing the result from operating
2020 activities for the year are discussed in the Review of
Operations on pages 6 to 8 of the Annual Report.
The following directors retired during the year:
Subsequent Events
 A R Sarker, 24 September 2019
 P A Lahiff (Chairman), 31 October 2019 On July 1 2020, Cuscal began a new lease agreement
 R W Goudswaard, 31 October 2019 of its 1 Margaret Street premises. In accordance with
 M S Genovese, 24 April 2020 AASB 16, at that date Cuscal recognised a right of use
asset, and corresponding lease liability, of $22.5
million. In addition, for APRA regulatory capital
Principal Activities purposes, this adoption reduces Cuscal’s Level 2
The principal activities of the consolidated entity Capital Adequacy ratio by approximately 0.5%.
during the financial year were the provision of The impact of this event is not reflected in the 2020
payment related products and services for the benefit Annual Report.
of Australian financial and consumer centric
institutions including: There has not been any matter or circumstance that
has arisen since the end of the financial year, that has
 Electronic and paper payment processing
significantly affected, or may significantly affect, the
including EFTPOS, direct entry, BPAY and
operations of Cuscal or the Consolidated Entity, the
member and corporate chequing;
results of those operations, or the state of affairs of
 Card products including debit, credit and prepaid Cuscal or the Consolidated Entity in future financial
cards across most of the major schemes in the years.
market;
Future Developments
 Card platform services, including rewards;
The outlook for 2021 is discussed in the Review of
 ATM owner and management services of the
Operations on page 6 to 8 of the Annual Report.
rediATM network (to August 2019);

Dividends Auditor’s Independence Declaration
In respect of the financial year ended 30 June 2019, a The auditor’s independence declaration is included on
final dividend of 5.0 cents per ordinary share (franked page 15 of the Annual Report.
to 100% at the 30% corporate income tax rate) was
paid. The total amount paid was $9.4 million.
Public Prudential Disclosures
In respect of the financial year ended 30 June 2020,
an interim dividend of 1.6 cents per ordinary share As an Approved Deposit-taking Institution (“ADI”)
(franked to 100% at the 30% corporate income tax regulated by the Australian Prudential Regulation
rate) was paid on 2 April 2020. The amount paid was Authority (“APRA”), Cuscal is required to publicly
$3.0 million. disclose certain information in respect of:
 Consolidated equity and regulatory capital;
The Directors have determined there will be no final
dividend declared on the full year result.  Risk exposure and assessment; and
 Remuneration disclosures.
Indemnification of Officers and
These disclosures can be found on Cuscal’s website.
Auditors
Cuscal has agreed to indemnify the following current
Rounding Off of Amounts
directors (E Proust, C N Kennedy, S P W Laidlaw, H Cuscal is a company of a kind referred to in ASIC
Ling, S A Petering, W Stevenson, T Vonhoff), the instrument 2016/191 dated 24 March 2016 and in
former directors (A R Sarker, P A Lahiff,
accordance with that instrument, amounts in this
R W Goudswaard, M S Genovese), the Company directors’ report and the financial report have been
Secretary and all executive officers of Cuscal and of rounded off to the nearest hundred thousand dollars,
any related body corporate, against a liability that unless otherwise stated.
may arise from their positions within the Company to
the extent permitted by the Corporations Act 2001. Signed in accordance with a resolution of the
The contract of insurance prohibits disclosure of the Directors made pursuant to s.298 (2) of the
nature of the liability indemnified. Corporations Act 2001.
Cuscal has paid premiums in respect of directors’ and
officers’ liability insurance during the financial year.
The contract of insurance does not include details of On behalf of the Directors
premiums paid in respect of individual officers of the
Company and prohibits disclosure of the amount of
the premium paid.
Cuscal has not otherwise, during or since the end of

the financial year, indemnified or agreed to indemnify
an officer other than the above, or auditor of the Elizabeth Proust AO Craig Kennedy
Company or of any related body corporate, against a Chairman Managing Director
liability incurred by such an officer or auditor. Sydney, 24 August 2020
Share Transactions
As shares in Cuscal are unlisted, the Directors are
disclosing the following information on share sales
during the financial year.
Based on information registered with Cuscal in the

year, no shares were traded during the financial year
ended 30 June 2020.
This information excludes changes in shareholding

arising from mergers between shareholders.

Information on Directors  Prior to joining Cuscal, Craig served as Managing
Director of Espreon Limited for four years. He was
also head of direct banking at ING and has held a
Elizabeth Proust AO number of senior positions at Advance Bank
Australia, State Bank of New South Wales and
BA (Hons), LL.B, FAICD Monster Worldwide.
 Chairman, Independent Non-Executive Director

 Appointed 1 June 2020 Directorships in Other Entities:
 Age 69
 NPP Australia Limited
Experience:  86 400 Limited
 Australian Payments Council (member)
 Elizabeth is an experienced Chair and Company
Director, who has had an extensive leadership
career in government and financial services Other Declared Interests:
 Elizabeth was CEO of the City of Melbourne and  Nil

subsequently Secretary of the Department of
Premier and Cabinet in Victoria. She then spent 8
years at the ANZ Group, in 3 senior roles Steve Laidlaw
 Since 2005, Elizabeth has had a non-executive BEc, BCom, FCA, FAICD
career in listed and private companies and has
served on not for profit boards.  Non-Executive Director
 Appointed 16 November 2016
Special Responsibilities:  Age 50
 Chairman of the Board Experience:

 Chairman of the Board Governance and
Remuneration Committee  More than 20 years’ experience in people
leadership and general management in the retail
Directorships in Other Entities: banking and finance industry.
 Nestle Australia Ltd;  Currently the CEO & MD of People’s Choice Credit
 Lendlease Group Union.
 Advisory Board Bank of Melbourne / Westpac
Victoria Special Responsibilities:
 Member of the Board Audit Committee
Other Declared Interests:  Member of the Board Governance and
Remuneration Committee
 Nil
Directorships in Other Entities:
Craig Kennedy  Australian Central Credit Union Limited (t/as
People’s Choice Credit Union)
MBA, GAICD, FFIN  Financial Solutions Australia Pty Ltd
 Australian Central Services Pty Ltd
 Managing Director
 People’s Choice Community Foundation Limited
 Appointed 8 December 2008
 Age 51
Other Declared Interests:
Experience:  Nil
 More than 30 years’ experience in the financial
services sector with particular expertise in
electronic and online banking.

Transport Accident Commission of Victoria from
2007 to 2016.
Hai Ling (Ling Hai)
 Sonia also holds a current Australian legal
MBA practicing certificate and operates her own law
firm in Victoria.
 Non-Executive Director
 Appointed 25 September 2019 Special Responsibilities:
 Age 50
 Chairman of the Board Risk Committee
 Member of the Board Audit Committee
Experience:
 Member of the Board Governance and
 Co-President for Asia Pacific, Mastercard Remuneration Committee
 Over 9 years at Mastercard and has worked
across various regions
 Virtus Health Limited (ASX:VRT)
 Prior to joining Mastercard, he was head of
 Qantm Intellectual Property Ltd (ASX:QIP)
partnership business and co-brand marketing with
 TAL Dai-Ichi Life Australia
PCCC, a joint venture between HSBC and Bank of
Communications. He has also worked with Bank of
America and MBNA in the U.S. in product Other Declared Interests:
development and customer insights, and worked
in management consulting with Booz Allen &  Nil
Hamilton and A.T. Kearney in both the U.S. and
China. Wayne Stevenson
Directorships in Other Entities: BCom, CA, FAICD
 Trustee on The College of Saint Rose Board of
 Non-Executive Director
Trustees
 Appointed 28 January 2020
 Senior advisory board member of CDIB Capital
 Age 61
International
 Chairman, Mastercard-NUCC, a Joint Venture
Experience:
company in bankcard switching headquartered in
Beijing  Wayne brings extensive experience from within
the financial services industry including 15 years
Other Declared Interests: in CFO roles at ANZ involving a broad range of
disciplines including the undertaking of significant
 Nil
acquisitions, restructures and divestments. While
at ANZ Wayne also held senior positions across
Australia, New Zealand and Asia including Group
Sonia Petering General Manager, Group Strategy and Chief
BCom, LLB, FAICD Financial Officer Asia Pacific, Europe and America
 Independent Non-Executive Director  More recently, Wayne has developed his career as
 Appointed 17 April 2018 a professional Director.
 Age 50
Special Responsibilities:
Experience:  Member of the Board Risk Committee
 Non-executive director of various companies
serving on ASX listed, non-listed, Government, Directorships in Other Entities:
and NFP Boards since 1998 in highly regulated  Credit Union Australia Ltd
industries.  BigTinCan Holdings Ltd
 Non-Executive Director & Chair of the Board of  MediaWorks Holdings Ltd
the Rural Finance Corporation of Victoria from  ANZ Lenders Mortgage Insurance Ltd
2009 to 2016 and served on the Board of the

Information on Company
 Nil
Secretary
Trudy Vonhoff
Sean O’Donoghue
GAICD, MBA, BBus (Hons), SF Fin
BCom, CA, MBA
 Independent Non-Executive Director
 Appointed 10 April 2019  Chief Financial Officer & Company Secretary
 Age 57  Appointed 8 January 2020 (Company Secretary)
 Aged 56
Experience:
Experience:
 Experienced Non-Executive Director serving on
ASX listed & non-listed Boards. Trudy has  Over 30 years in senior financial roles in Australia
previously served as a director on the Boards of and internationally with businesses in banking,
Ruralco Holdings Limited (ASX: RHL), AMP Bank wealth management, property and the
Limited, Cabcharge Australia Limited (ASX: A2B) entertainment sector.
and Tennis NSW. Trudy also held senior
executive positions with Westpac Banking Helen Mediati resigned as Company Secretary on 20
Corporation and AMP Bank Limited. December 2019.
 Trudy brings to the Board strong financial, risk
management, operations, technology and
governance skills, together with deep experience
in financial services.
Special Responsibilities:
 Chairman of the Board Audit Committee
 Member of the Board Risk Committee

 Credit Corp Group Limited (ASX: CCP)
 IRESS Limited (ASX:IRE)

 Nil
The following directors resigned during the year:
 Ari Sarker (24 September 2019)

 Paul Lahiff (31 October 2019)
 Rob Goudswaard (31 October 2019)
 Mark Genovese (24 April 2020)

Attendance at meetings during the year
Board Governance &
Board Audit Remuneration Board Risk
Board Committee Committee Committee
A B A B A B A B
E M Proust* 1 1 1 1
C N Kennedy 15 15
S P W Laidlaw 15 15 4 4
H Ling ** 10 12
S A Petering 14 15 4 4 5 5 6 6
W Stevenson *** 5 5 3 3
T Vonhoff 15 15 4 4 2 2 6 6
P Lahiff# 6 6 2 2
M S Genovese## 12 13 4 4 1 1
R Goudswaard ### 6 6 2 2
A R Sarker#### 3 3
Additional Board meetings have occurred during the past year in response to the COVID-19 matters required to be dealt with
by the Board
A Number of meetings attended

B Number of meetings that the Director was eligible to attend
* Appointed 1 June 2020
** Appointed 25 September 2019
*** Appointed 28 January 2020
# Resigned effective 31 October 2019
## Resigned effective 24 April 2020
### Resigned 31 October 2019
#### Resigned 24 September 2019

Directors’ Declaration
The directors of Cuscal Limited declare that, in their opinion:
a. There are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable;
b. The attached financial statements are in compliance with International Financial Reporting Standards, as
stated in Note 1 to the financial statements; and
c. The attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and
performance of the company and the consolidated entity.
Signed in accordance with a resolution of the directors made pursuant to s.295 (5) of the Corporations Act
2001.
On behalf of the Directors
Elizabeth Proust AO Craig Kennedy

Chairman Managing Director
Sydney, 24 August 2020

Statement of Profit and Loss
For the financial year ended 30 June 2020
Cuscal Limited and its controlled entities
Consolidated Cuscal
2020 2019 2020 2019
Notes $m $m $m $m
Fee and commission income 2 190.9 224.3 191.9 224.6
Fee and commission expenses 2 (54.8) (84.6) (53.6) (83.9)
Net fee and commission income 136.1 139.7 138.3 140.7
Interest income 3 31.3 46.6 25.2 39.7
Interest expense 3 (20.7) (34.1) (14.7) (28.8)
Net interest income 10.6 12.5 10.5 10.9
Other operating income 4 0.1 0.6 2.0 1.2
Total net operating income 146.8 152.8 150.8 152.8
Employment expenses 5 (86.0) (75.6) (72.8) (67.2)
Occupancy expenses 5 (3.9) (4.7) (3.1) (4.3)
Non-salary technology expenses 5 (37.5) (33.4) (31.6) (30.6)
Other expenses 5 (16.2) (17.3) (9.5) (13.6)
Total operating expenses (143.6) (131.0) (117.0) (115.7)
ATM revaluation and provisions 20 - 10.4 - 10.4
Profit before income tax 3.2 32.2 33.8 47.5
Income tax expense 6 (2.7) (10.0) (9.7) (14.5)
Consolidated Profit for the financial year 0.5 22.2 24.1 33.0
Loss attributable to non-controlling interests 33 2.8 - - -

Consolidated Profit attributable to the owners
3.3 22.2 24.1 33.0
of Cuscal
The above statement of profit and loss should be read in conjunction with the accompanying notes.

Statement of Other Comprehensive Income
Consolidated Cuscal
2020 2019 2020 2019
Notes $m $m $m $m
Consolidated Profit for the year 0.5 22.2 24.1 33.0
Other comprehensive income

Items that may be reclassified to the Statement
of Profit and Loss:
Unrealised gains on Fair Value through OCI 30 0.2 1.4 0.2 1.4
financial instruments taken directly to reserves
ECL impairment charge on OCI financial 30 (0.1) - (0.1) -

instruments taken directly to reserves
Income tax expense relating to these items - (0.4) - (0.4)
Other comprehensive income (net of tax) 0.1 1.0 0.1 1.0
Total comprehensive income for the year 0.6 23.2 24.2 34.0
Other comprehensive loss attributable to non-

2.8 - - -
controlling interests
Total comprehensive income attributable to
3.4 23.2 24.2 34.0
owners of Cuscal
The above statement of other comprehensive income should be read in conjunction with the accompanying
notes.

Statement of Financial Position
Consolidated Cuscal
2020 2019 2020 2019
Notes $m $m $m $m
ASSETS
Cash and cash equivalents 10 602.1 796.7 574.5 796.6
Receivables due from financial institutions 11 114.4 146.9 109.2 144.1
Investment securities 12 1,552.2 1,141.2 1,277.6 1,141.2
Loans 13 30.6 1.6 0.6 1.6
Loans made by the Securitisation Trust 14 106.4 135.4 - -
Derivative financial assets 15 - 0.1 - 0.1
Other assets 16 30.4 27.7 29.9 27.5
Investments 17 4.1 4.0 82.6 56.5
Current tax assets 1.0 - 1.0 -
Deferred tax assets 18 12.1 13.2 8.2 11.8
Property, plant and equipment and right-of-use
19 7.5 4.3 4.0 4.3
assets
Intangible assets 21,22 57.5 57.4 15.2 19.1
Non-current assets held for sale 20 - 2.8 - 2.8
Total assets 2,518.3 2,331.3 2,102.8 2,205.6
LIABILITIES
Payables due to financial institutions 23 56.9 51.5 56.9 51.5
Client deposits 24 1,700.1 1,423.4 1,400.1 1,427.3
Securities sold under agreement to repurchase 25 144.7 140.9 144.7 140.9
Discount securities issued 26 62.4 111.7 62.4 111.7
Borrowings of the Securitisation Trust 14 110.4 137.2 - -
Other liabilities 27 133.8 174.8 129.7 174.1
Current tax liabilities - 1.0 - 1.0
Deferred tax liabilities 18 11.3 11.6 7.4 8.2
Derivative financial liabilities 15 0.2 - 0.2 -
Provisions 28 23.5 23.4 19.6 20.9
Total liabilities 2,243.3 2,075.5 1,821.0 1,935.6
Net assets 275.0 255.8 281.8 270.0
EQUITY
Issued capital 29 127.1 127.1 127.1 127.1
Reserves 30 21.7 8.2 8.3 8.2
Retained earnings 31 111.3 120.5 146.4 134.7
Equity attributable to owners of Cuscal 260.1 255.8 281.8 270.0

Non-controlling interests 33 14.9 - - -
Total equity 275.0 255.8 281.8 270.0

The above statement of financial position should be read in conjunction with the accompanying notes

Statement of Changes in Equity
Consolidated
Other Non-
Issued capital Retained controlling Total
capital reserves earnings Total interests equity
30 June 2020 Notes $m $m $m $m $m $m
As at 1 July 2019 127.1 8.2 120.5 255.8 - 255.8
Initial non-controlling
33 - - - - 17.7 17.7
ownership interest
Adjustment on dilution of
33 - 13.3 - 13.3 - 13.3
86 400
General Reserve for Credit
30 - 0.1 (0.1) - - -
Losses
Total comprehensive income - 0.1 3.3 3.4 (2.8) 0.6
Dividends paid 32 - - (12.4) (12.4) - (12.4)
As at 30 June 2020 127.1 21.7 111.3 260.1 14.9 275.0
Other Non-
As at 1 July 2018 127.1 7.2 103.0 237.3 - 237.3

Total comprehensive income - 1.0 22.2 23.2 - 23.2
Dividends paid 32 - - (4.7) (4.7) - (4.7)
As at 30 June 2019 127.1 8.2 120.5 255.8 - 255.8
Cuscal
Other Non-
As at 1 July 2019 127.1 8.2 134.7 270.0 - 270.0

Dividends paid 32 - - (12.4) (12.4) - (12.4)
As at 30 June 2020 127.1 8.3 146.4 281.8 - 281.8
Other Non-
As at 1 July 2018 127.1 7.2 106.4 240.7 - 240.7

Dividends paid 32 - - (4.7) (4.7) - (4.7)
As at 30 June 2019 127.1 8.2 134.7 270.0 - 270.0
The above statement of changes in equity should be read in conjunction with the accompanying notes.

Cash Flow Statement
Consolidated Cuscal
2020 2019 2020 2019
Notes $m $m $m $m
Fees, commissions and other income received 185.6 224.3 184.4 226.5
Fees & commissions paid (57.6) (83.5) (55.1) (84.3)
Payments to other suppliers and employees (135.9) (128.3) (115.4) (124.4)
Interest received 30.6 46.6 24.5 39.7
Interest paid (23.4) (33.9) (17.1) (28.5)
Dividends received 4 - - 1.5 0.3

Net income tax (paid) / received, net of research
(3.4) 0.6 (3.4) 0.6
and development incentives
Net (increase) / decrease in loans (29.0) 0.2 1.0 0.2
Net payments for securities (410.8) (185.7) (136.2) (185.7)

Net decrease / (increase) in receivables due
33.2 (1.7) 34.9 (3.4)
from financial institutions
Net increase / (decrease) in payables due to
5.4 (19.5) 5.4 (19.5)
financial institutions
Net repayments of discount securities issued (49.2) (19.5) (49.2) (19.5)
Net repayments to / (proceeds from) prepaid
(34.3) 1.6 (34.3) 1.6
cardholders
Net proceeds / (repayments) of repurchase
3.9 (6.2) 3.9 (6.2)
agreements
Net proceeds / (repayments) of deposits 278.8 105.8 (25.1) 90.1
(Decreases) / increase in balances with controlled
- - (1.7) 1.0
entities
Net cash used in operating activities 9 (206.1) (99.2) (181.9) (111.5)
Decrease in loans by the Securitisation Trust 28.4 29.1 - -
Investments in other entities - - (26.0) (1.0)
Payment for intangible assets (7.0) (11.6) (0.6) -
Proceeds on sale of ATMs 0.4 - 0.4 -
Payment for property, plant & equipment (2.0) (0.2) (1.6) (0.2)
Net cash provided by/(used in) investing
19.8 17.3 (27.8) (1.2)
activities
Repayments of borrowings by the Securitisation
(26.8) (30.7) - -
Trust
Dividends paid 32 (12.4) (4.7) (12.4) (4.7)
Cash payments for funding principal portion of
(0.1) - - -
lease liability
Proceeds from capital issuance - net of transaction
33 31.0 - - -
costs (86 400)
Net cash used in financing activities (8.3) (35.4) (12.4) (4.7)
Net decrease in cash (194.6) (117.3) (222.1) (117.4)
Cash at the beginning of the financial year 796.7 914.0 796.6 914.0
Cash at the end of the financial year 10 602.1 796.7 574.5 796.6
The above cash flow statement should be read in conjunction with the accompanying notes.

Notes to the Financial Statements
Note Content Note Content

1 Accounting policies 26 Discount securities issued
27 Other liabilities
Notes to the Statement of Profit and Loss 28 Provisions
2 Net Fee & Commission Income 29 Issued capital
3 Net interest income 30 Reserves
4 Other operating income 31 Retained earnings
5 Operating expenses 32 Dividends paid
6 Income tax expense 33 Non-controlling interests
7 Key management personnel remuneration
8 Remuneration of auditors Risk
9 Cash flow information 34 Capital risk management
35 Financial risk management
Notes to the Statement of Financial Position
10 Cash and cash equivalents Unrecognised items
11 Receivables due from financial institutions 36 Assets pledged as collateral
12 Investment Securities 37 Commitments for expenditure
13 Loans 38 Leases
14 Securitisation Trust loans and borrowings 39 Credit facilities
15 Derivative instruments 40 Subsequent events
16 Other assets
17 Investments Other information
18 Deferred tax assets and liabilities 41 Particulars in relation to controlled entities
19 Property, plant and equipment and right-of- 42 Related party disclosures
use assets
43 Earnings per share and net assets per share
20 ATM related assets
44 Employee share scheme
21 Intangible assets
45 Additional company information
22 Impairment of intangible assets
23 Payables due to financial institutions
24 Client Deposits
25 Securities sold under agreement to
repurchase

Fair value for measurement and/or disclosure

Note 1 – Accounting Policies purposes in these financial statements is determined
on such a basis, except for measurements that have
The information contained in this note represents the some similarities to fair value, such as “value in use”
significant accounting policies used in the preparation in AASB136.
of the Financial Statements and accompanying Notes
to the Financial Statements. The accounting policies adopted in the preparation of
this financial statements are consistent with those
(a) Statement of Compliance adopted and disclosed in the Consolidated Entity’s
annual financial report for the year ended 30 June
The financial statements are general purpose financial
2019, other than where disclosed and with the
statements which have been prepared in accordance
exception of changes in accounting policies required
with the Corporations Act 2001, Accounting Standards
following the adoption of new accounting standard
and Interpretations, and comply with other
AASB 16, effective for the Consolidated Entity from 1
requirements of the law.
July 2019. Changes to the Consolidated Entity’s key
The financial statements comprise the separate accounting policies during the year are described in
financial statements of Cuscal Limited (“Cuscal”) and this report in the section titled ‘New Australian
the consolidated financial statements of Cuscal and its Accounting Standards and amendments to Accounting
controlled entities (“Consolidated Entity”). For the Standards that are effective in the current year’, on
purposes of preparing the consolidated financial page 35 of this report.
statements, Cuscal is a for-profit entity.
Accounting policies are selected and applied in a
Accounting Standards include Australian Accounting manner that ensures that the resulting financial
Standards. Compliance with Australian Accounting information satisfies the concepts of relevance and
Standards ensures that the financial statements and reliability, thereby ensuring that the substance of the
notes of Cuscal and the Consolidated Entity comply underlying transactions or other events is reported.
with International Financial Reporting Standards
(c) COVID-19 impacts
(“IFRS”).
COVID-19, a respiratory illness, was declared a world-
The financial statements were approved by the
wide pandemic by the World Health Organisation in
directors on 24 August 2020.
March 2020. COVID-19, as well as measures to slow
(b) Basis of preparation the spread of the virus, have had a significant impact
on global economies and financial markets.
The financial report has been prepared under the
historical cost convention, except for the revaluation In response, the Australian Government has
of certain financial assets and financial liabilities implemented, and continues to iterate, fiscal stimulus
(including derivative instruments) that are measured packages to mitigate the impact on the economy.
at fair value through the profit and loss or other Notwithstanding that to date we have seen some
comprehensive income. Historical cost is generally impactful COVID-19 related reductions in payment
based on the fair values of the consideration given in transaction volumes (a key driver of revenue), these
exchange for assets, goods and services. Unless impacts have not been significant enough to allow to
otherwise indicated, all amounts are presented in Cuscal to qualify for any of these Government
Australian dollars. packages (e.g. JobKeeper). We continue to monitor
the qualifying criteria and operate in a considered
Fair value is the price that would be received to sell manner, with a flexible approach to responding to
an asset or paid to transfer a liability in an orderly current and further market disruptions.
transaction between market participants at the
measurement date, regardless of whether that price is Note 1(d) sets out areas where critical accounting
directly observable or estimated using another judgements are required. Specifically, the
valuation technique. In estimating the fair value of an Consolidated Entity has also considered the impact of
asset or a liability, the Consolidated Entity takes into COVID-19 and other market volatility by:
account the characteristics of the asset or liability if
 Updating its ECL model to include a risk uplift for
market participants would take those characteristics
Investment Securities held with counterparties
into account when pricing the asset or liability at the
with negative outlook;
measurement date.

Note 1 – Accounting policies, continued (e) Foreign currency transactions
 Running additional stress testing scenarios, All foreign currency transactions during the financial
which are an integral component of the year are brought to account using the exchange rate
Consolidated Entity’s risk management in effect at the date of the transaction. Foreign
framework and a key input to the Internal currency monetary items at reporting date are
Capital Adequacy Assessment Process (“ICAAP”), translated at the exchange rate existing at reporting
which demonstrated Cuscal’s ability to continue date.
to operate through a range of economic
Exchange differences are recognised in profit or loss
scenarios;
except for equity instruments classified as Fair Value
 Assessing the impact on Credit & Liquidity risk as through OCI, in which case the gain or loss is taken
described in Note 35; through a Foreign Currency Translation Reserve and
exchange differences on transactions entered into in
 Considering the impact of COVID-19 on the order to hedge certain foreign currency risks and are
Consolidated Entity’s financial statement designated in eligible accounting hedge relationships.
qualitative disclosures.
(f) Functional and Presentation Currency
(d) Critical accounting judgements and key sources
of estimation uncertainty (including impact of The Consolidated Entity amounts are presented in
COVID-19) Australian dollars, which is Cuscal’s functional and
presentation currency.
In the application of the Consolidated Entity’s
accounting policies, management is required to make (g) Comparative amounts
judgements, estimates and assumptions about
Where necessary, comparative figures have been
carrying values of assets and liabilities that are not
adjusted to conform to changes in presentation of
readily apparent from other sources. The estimates
current period figures in these financial statements.
and associated assumptions are based on historical
experience and other relevant factors, particularly the (h) Principles of consolidation
impact that COVID-19 has had on the Australian
economy and the Consolidated Entity’s business. The consolidated financial statements incorporate the
financial statements of Cuscal and entities (including
Actual results may differ from these estimates. The structured entities) controlled by Cuscal and its
estimates and associated assumptions are reviewed subsidiaries.
on an ongoing basis. Revisions to these estimates are
recognised in the period of the revision if the revision Control is achieved when Cuscal:
only affects that period, or in the period of the
revision and future periods if the revision affects both  has power over the investee;
current and future periods.
 is exposed, or has rights, to variable returns
The areas where assumptions require a higher degree from its involvement with the investee; and
of judgement are:
 has the ability to use its power to affect its
 The carrying amount of intangible assets returns.
presented in Note 21;
All three of these criteria must be met for Cuscal to
 The prior year’s carrying value of automatic teller have control over an investee.
machine assets (“ATMs”) presented in Note 20;
The Consolidated Entity has power over an entity
 The carrying value of financial instruments (including a structured entity) when it has existing
presented in Note 35; and substantive rights that give it the current ability to
direct the entity’s relevant activities. Relevant
The calculation of provisions presented in Note 28. activities are those activities that significantly affect
the entity’s returns. The Consolidated Entity evaluates
whether it has the power to direct relevant activities.

Note 1 – Accounting policies, continued share-based payment arrangements of the

acquiree are measured in accordance with AASB
Cuscal reassesses whether or not it controls an 2 Share-based Payment at the acquisition date.
investee if facts and circumstances indicate that there
are changes to one or more of the three elements of Goodwill is measured as the excess of the sum of the
control listed above. consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value
Consolidation of a subsidiary or structured entity of the acquirer's previously held equity interest in the
begins when Cuscal obtains control over the acquiree (if any) over the net of the acquisition-date
subsidiary or structured entity and ceases when amounts of the identifiable assets acquired and the
Cuscal loses control of the subsidiary or structured liabilities assumed.
entity.
Income Statement
When parent’s ownership interest changes in a
subsidiary that do not result in the parent losing (j) Interest Income and expense
control of the subsidiary, the transaction is considered
Interest income and expense on all interest bearing
as an equity transaction. Non-controlling interests
assets and liabilities, including those at fair value, is
(“NCI”) results and equity of the subsidiaries are
recognised in the Statement of Profit and Loss using
shown separately in the Consolidated Income
the effective interest method.
Statement, Statement of Other Comprehensive
Income and Consolidated Statement of Financial The effective interest method is a method of
Position and are determined on the basis of the calculating the amortised cost of a financial asset or a
Consolidated Entity’s present ownership in the entity. financial liability and of allocating the interest income
or interest expense over the relevant period. The
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions effective interest rate is the rate that exactly
between members of the Consolidated Entity are discounts estimated future cash payments or receipts
eliminated in full on consolidation. through the expected life of the financial instrument
or, when appropriate, a shorter period to the net
(i) Business combinations carrying amount of the financial asset or financial
liability. When calculating the effective interest rate,
Acquisitions of businesses are accounted for using the the Consolidated Entity estimates cash flows
acquisition method. The consideration transferred in a considering all contractual terms of the Financial
business combination is measured at fair value, which Instrument including transaction costs, premiums and
is calculated as the sum of the acquisition-date fair discounts, but does not consider future credit losses.
values of assets transferred by the Consolidated
Entity, liabilities incurred by the Consolidated Entity to (k) Fees and Commissions
the former owners of the acquiree and the equity
Cuscal’s fee and commission income is broadly
instruments issued by the Consolidated Entity in
categorised into the following streams:
exchange for control of the acquiree. Acquisition-
related costs are recognised in profit or loss as  Transactional processing revenue: comprises the
incurred. majority of Cuscals revenue and is relatively
simplistic in nature, i.e. the performance
At the acquisition date, the identifiable assets
obligation is deemed to have been met when the
acquired, liabilities assumed and identifiable
transaction is processed or service is provided.
intangible assets are recognised at their fair value,
Clients can only benefit once a transaction is
except:
processed and hence Cuscal will recognise the
 Deferred tax assets or liabilities and assets or revenue once a transaction is processed.
liabilities related to employee benefit
 Scheme incentive revenue: includes revenue
arrangements are recognised and measured in
from exclusivity arrangements, new accounts
accordance with AASB 112 Income Taxes and
created and volume contributions. Depending on
AASB 119 Employee Benefits respectively;
the type of incentive, the revenue can have
 Liabilities or equity instruments related to share- various performance obligations that may be met
based payment arrangements of the acquiree or over time or at a point in time. Revenue is only
share-based payment arrangements of the recognised to the extent that a significant
Consolidated Entity entered into to replace reversal is not expected to occur in future.

Note 1 – Accounting policies, continued Current and deferred tax is recognised as an expense
or income in profit or loss, except when the tax
 Project Revenue: Projects are completed to relates to items credited or debited directly to equity,
customer specifications, and control is deemed to in which case the deferred tax is also recognised
pass on to the customer upon completion. directly in equity or other comprehensive income, or
Cuscal’s Project revenue streams are broken where it arises from the initial accounting for a
down into the following two categories – small or business combination, in which case it is taken into
large scale customer projects. Revenue relating account in the determination of goodwill.
to smaller projects will be recognised at a point
in time (i.e. the end of the project), while larger Cuscal and its wholly owned subsidiaries have
projects may have specific performance adopted the tax consolidation regime in Australia,
obligations embedded into the contract at effective from 1 July 2002. Under the terms and
inception in which case they may be recognised conditions of the tax sharing and funding agreement,
over time. Cuscal, as the head entity of the tax consolidation
group charges or reimburses its wholly owned
 Treasury revenue: Treasury fee income is subsidiaries for current tax liabilities or assets it
generally recognised when the service has been incurs in connection with their activities.
provided, at a point in time. This revenue
principally falls within the scope of AASB 9. As a consequence, Cuscal recognises the current tax
balances of its wholly owned subsidiaries as if those
Fee and commission expense are generally recognised were its own in addition to the current and deferred
on an accrual basis when the service has been tax amounts arising in relation to its own
provided, or are recognised when Cuscal assesses transactions, events and balances. Amounts
that it is probable it will be obligated to pay the fee. receivable or payable under a tax sharing and funding
agreement with the tax-consolidated entities are
The majority of fees and commission expenses relate recognised as intercompany amounts receivable or
to the processing of financial transactions for clients. payable.
(l) Dividend Income The ‘stand-alone taxpayer’ basis is the method used
for measuring current and deferred taxes (other than
Dividend income is recognised on record date after
deferred tax assets relating to tax losses) of the
dividends are declared.
entities in the tax consolidation group as if each entity
(m) Distribution Income continued to be a taxable entity in its own right.
Deferred tax assets in relation to tax losses are
Distribution income is recognised on record date after measured based on the tax-consolidated group’s
distributions are declared. ability to utilise the tax loss.
(n) Operating Expenses 86 400 Group ceased being a member of Cuscal’s tax
consolidation group on 28 February 2020.
Operating expenses are recognised as the relevant
service is rendered or once a liability is incurred. Staff (p) Goods and services tax
expenses are recognised over the period that an
employee renders the service to receive the benefit. Revenues, expenses and assets are recognised net of
Occupancy and equipment expenses include the the amount of goods and services tax (GST), except:
depreciation and lease rentals that are outlined in
 where the amount of GST incurred is not
Note 5. IT expenses are recognised as incurred unless
recoverable from the taxation authority, it is
they qualify for capitalisation as an asset due to the
recognised as part of the cost of acquisition of an
related service generating probable future benefits.
asset or as part of an item of expense; or
(o) Taxation
 for receivables and payables which are
Income tax is recognised in the income statement recognised inclusive of GST.
except when it relates to items recognised directly in
The net amount of GST recoverable from, or payable
Other Comprehensive Income, in which case it is
to, the taxation authority is included as part of
recognised in Statement of Comprehensive Income.
receivables or payables.
Income tax on the profit or loss comprises both
current and deferred tax.

Note 1 – Accounting policies, continued Amortised cost
Cash flows are included in the statement of cash flows A financial asset is measured at amortised cost if the
on a gross basis. The GST component of cash flows financial asset is primarily held to derive contractual
arising from investing and financing activities which is ‘Principal + Interest’ cash flows.
recoverable from, or payable to, the taxation
Fair value through other comprehensive income
authority is classified as operating cash flows.
(FVOCI)
(q) Research and development incentives
A financial asset is measured at FVOCI if the financial
Some of the projects which Cuscal has developed asset is primarily held to derive contractual ‘Principal
qualify for Research and Development Incentives + Interest’ cash flows and is held for sale.
provided by the Australian Government. The largest
Fair value through profit and loss
such project is the development of payments
infrastructure and the ‘Customer Experience Engine’ A financial asset or financial liability at fair value
detailed in Note 21. through profit or loss is a financial asset or financial
liability that:
Research and development incentives are recognised
in accordance with Accounting Standard AASB 120 (i) has been acquired or incurred principally for the
Accounting for Government Grants and Disclosure of purpose of selling or repurchasing it in the near
Government Assistance. Where that qualifying term;
expenditure has been capitalised, the incentive is (ii) is part of a portfolio of identified financial
treated as a reduction of the carrying value of the instruments that are managed together and for
asset developed and the benefit of the grant flows to which there is evidence of a recent actual pattern
profit or loss as reduced depreciation and of short-term profit-taking;
amortisation expenses in future periods. Where that (iii) is a derivative that is not designated and
qualifying expenditure has been taken to profit or effective as a hedging instrument; or
loss, the incentive is treated as a reduction of the (iv) eliminates or significantly reduces a
expense item. measurement or recognition inconsistency
Assets and Liabilities (sometimes referred to as ‘an accounting
mismatch’) that would otherwise arise from
(r) Cash and Liquid Assets measuring assets or liabilities or recognising the
gains and losses on them on different bases.
Cash and cash equivalents are short-term, highly
liquid investments that are readily convertible to Investment securities and Investments in Other
known amounts of cash and which have an Entities are recognised and derecognised on
insignificant risk of changes in value. These comprise settlement date where the purchase or sale of an
cash on hand, cash in ATMs and cash in banks. Bank investment is under a contract, whose terms require
overdrafts are shown within payables due to financial delivery of the investment within the timeframe
institutions in the Statement of Financial Position. established by the market concerned. These are
initially measured at fair value, net of transaction
(s) Financial assets and financial liabilities costs, except for those financial assets classified as ‘at
fair value through profit or loss’ which are initially
AASB 9 has three classification categories for financial measured at fair value.
assets:
For the majority of transactions, settlement date is
 amortised cost, also the trade date. Any fair value adjustments
between trade date and settlement date are not
 Fair Value through Other Comprehensive Income
expected to be material.
(FVOCI); and
Financial instruments at fair value through the profit
 Fair Value through Profit and Loss.
and loss
The Consolidated Entity applies the following principal
Financial assets at fair value through the profit and
policies for the financial assets’ classifications in terms
loss are stated at fair value, with any resultant gain or
of AASB 9.
loss recognised in the profit and loss. Fair value is
determined in the manner described in Note 35.

Note 1 – Accounting policies, continued (t) Receivables due from financial institutions
Impairment of financial assets at Amortised Cost or All receivables due from financial institutions are
FVOCI recorded at amortised cost less any allowances for
expected credit losses. Receivables due from financial
Financial assets measured at amortised cost or FVOCI institutions include amounts due from market
are assessed for indicators of impairment at each participants for settlement of transactions initiated by
balance date. Recognition and measurement of these Cuscal for its clients on balance date and are usually
financial assets involves assessing the assets settled the next business day.
‘expected credit loss’ (“ECL”); refer Note (oo) for
further information on ECL methodology. (u) Investment Securities
Cuscal’s investment securities are fixed interest

For financial assets at Amortised Cost, the carrying
securities, discounted instruments and floating rate
amount of the financial asset is reduced by the ECL
instruments, which are purchased with the view of
charge directly against the Statement of Financial
holding for a longer period of time, including to
Position with a corresponding ECL charge taken to the
maturity date, but which may be sold prior to their
Statement of Profit and Loss.
maturity date.
If, in a subsequent period, the amount of the
These investment securities are classified as FVOCI
impairment loss decreases and the decrease can be financial assets and carried at fair value. Realised
related objectively to an event occurring after the gains and losses are recognised as other income in
impairment was recognised, the previously recognised the Statement of Profit and Loss in the period in
impairment loss is reversed through profit or loss to which they arise. Unrealised gains and losses are
the extent the carrying amount of the financial asset
taken to the fair value through OCI reserve, in Equity,
at the date the impairment is reversed does not and are recycled to profit or loss on realisation.
exceed what the amortised cost would have been had
the impairment not been recognised. 86 400 Limited purchases investment securities with
the objective of holding to maturity in order to collect
For financial assets at FVOCI, any impairment is contractual cash flows, which solely represent
recognised firstly against the balance in equity that
payments of Principal and Interest.
has arisen from changes in fair value of the
investment subsequent to its initial recognition, and These investment securities are classified as
then any remaining impairment is recognised in profit Amortised Cost. These assets are measured at the
or loss within Other Operating Income. amount recognised at initial recognition minus
principal repayments, plus or minus the cumulative
Any subsequent increase in fair value of an FVOCI
amortisation of any difference between that initial
investment after an impairment loss is recognised
amount and the maturity amount, and any expected
directly in equity.
loss allowance. Interest income is calculated using the
Derecognition of financial assets effective interest method and is recognised in the
Statement of Profit and Loss. Changes in fair value
The Consolidated Entity derecognises a financial asset are recognised in the Statement of Profit and Loss
when the contractual rights to the cash flows from the when the asset is derecognised.
asset expire, or when it transfers the financial asset
(v) Loans
and substantially all the risks and rewards of
ownership of the asset to another party. If the Loans are recorded at amortised cost less any
Consolidated Entity neither transfers nor retains allowance for expected credit losses. They include
substantially all the risks and rewards of ownership secured loans made to retail borrowers by 86 400.
and continues to control the transferred asset, the
Consolidated Entity recognises its retained interest in Interest income on loans is brought to account using
the asset and an associated liability for amounts it the effective interest rate method.
may have to pay. If the Consolidated Entity retains
substantially all the risks and rewards of ownership of
a transferred financial asset, the Consolidated Entity
continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds
received.

Note 1 – Accounting policies, continued (z) Investments in other entities
(w) Securitisation Trust Loans and Borrowings Investments in other entities, excluding subsidiaries,
are classified and carried at fair value through Profit &
The Integrity Series 2014-1 Trust (hereafter “the Loss (“FVPTL”).
Trust”) has been assessed as being a controlled entity
under AASB 10 Consolidated Financial Statements. Revaluation on these investments are booked under
The Trust is a “closed” structure and no new loans can Other Income in the Statement of Profit and Loss.
be added to the Trust.
Investments in subsidiaries (including 86 400) are
The Trust holds residential mortgages originated by carried at cost.
mutual banks and credit unions. These loans are held
(aa) Property, plant, equipment and right-of-use
at amortised cost less allowance for expected credit
assets
losses.
(i) Acquisitions
The Trust has on issue debt securities and
instruments that were initially recognised at fair
Assets acquired are recorded at the cost of
value, net of transaction costs incurred. These
acquisition, being the purchase consideration
instruments are subsequently measured at amortised
determined as at the date of acquisition plus costs
cost. Any difference between the proceeds (net of
incidental to the acquisition. Assets are reviewed for
transaction costs) and the redemption amount is
impairment annually.
recognised in profit or loss over the period of the
borrowings using the effective interest rate method. (ii) Depreciation
(x) Derivative Instruments Depreciation of plant and equipment is calculated on a
straight-line basis over the expected useful life of
Derivative instruments entered into by the
each asset.
Consolidated Entity may include futures, forwards and
forward rate agreements, swaps and options in the Leasehold improvements are depreciated over the
interest rate markets. The Consolidated Entity uses period of the lease or estimated useful life, whichever
derivative instruments to manage the risk of existing is shorter, using the straight-line method. The
Balance Sheet positions or to hedge estimated future estimated useful lives, residual values and
cash flows. depreciation method are reviewed at the end of each
annual reporting period.
All derivatives, including those used for Balance Sheet
hedging purposes, are recognised on the Statement of The following estimated useful lives are used in the
Financial Position and are disclosed as an asset where calculation of depreciation:
they have a positive fair value at balance date or as a
liability where the fair value at balance date is 2020 2019
negative. Derivatives are initially recognised at fair Plant and equipment 3-5 years 3-5 years
value on the date a derivative contract is entered into Leasehold improvements 10 years 10 years
and subsequently re-measured to their fair value.
(iii) Right-of-use (“ROU”) assets
Movements in the carrying amounts of derivatives are
ROU assets are measured at cost and are recorded at
recognised in profit or loss unless the derivative
the commencement of any new leases that are in the
meets the requirements for hedge accounting.
scope of AASB 16. The ROU asset comprises:
(y) Other Assets
 The amount of the initial lease liability, less any
Trade receivables and other receivables are carried at incentives received;
amortised cost less any allowance for expected credit
 Any initial direct costs incurred; and
losses. Other amounts receivable primarily relate to
amounts due from financial clearing systems and are  An estimate of the costs to be incurred in
generally settled daily. dismantling and removing the underlying asset,
if applicable under the terms of the lease.

Note 1 – Accounting policies, continued Where no internally-generated intangible asset can be

recognised, development expenditure is recognised in
ROU assets are depreciated over the shorter of the profit or loss in the period in which it is incurred.
asset’s useful life and the lease term on a straight-line
basis. Subsequent to initial recognition, internally-generated
intangible assets are reported at cost less
(bb) Intangible Assets accumulated amortisation and accumulated
impairment losses, on the same basis as intangible
(i) Intangible assets acquired separately assets that are acquired separately.
Intangible assets with finite lives that are acquired (ii) Classes of intangible assets
separately are carried at cost less accumulated
amortisation and accumulated impairment losses. Cuscal Group currently has the following classes of
Amortisation is recognised on a straight-line basis intangible assets:
over their estimated useful lives. The estimated useful
life and amortisation method are reviewed at the end  Payments Infrastructure: The Payments
of each reporting period, with the effect of any Infrastructure assets are development costs to
changes in estimate being accounted for on a bring transactional ‘switching’ capability to
prospective basis. Cuscal customers. This primarily includes internal
and external labor costs and licence costs. The
(ii) Internally generated intangible assets Payments Infrastructure intangible assets are
currently in-use and are being amortised over a
An internally-generated intangible asset arising period of 2-8 years. Ongoing expenditure will be
from the development of an internal project is incurred to maintain the functional capabilities of
recognised if and only if, all of the following have the assets in line with current technology.
been demonstrated:
 Customer Experience Engine (“CXE”) Intangible
(i) the technical feasibility of completing the Asset: The CXE Intangible asset comprises the
intangible asset so that it will be available costs (including eligible internal and external
for use or sale; labour costs, vendor costs and where appropriate
licence costs) associated with the development
(ii) the intention to complete the intangible
and set up of the Customer Experience Engine’s
asset and use or sell it;
core banking capability in 86 400, without which
(iii) the ability to use or sell the intangible the banking business could not operate.
asset; Amortisation for CXE intangible asset began in
October 2019 over a useful life of 8 years.
(iv) how the intangible asset will generate
probable future economic benefits;  Software: Software assets are amortised over a
useful life of 3-5 years.
(v) the availability of adequate technical,
financial and other resources to complete  Investment in New Payments Platform Australia
the development and to use or sell the Ltd (“NPPA”): NPPA was formed in December
intangible asset; and 2014 to oversee the build and operation of the
NPP Platform. Cuscal has invested in the entity
(vi) the ability to measure reliably the through a share capital subscription. This
expenditure attributable to the intangible subscription is akin to a perpetual licence to
asset during its development. access the NPP network, as such is being
amortised as an intangible asset over a useful
The amount initially recognised for internally- life of 10 years
generated intangible assets is the sum of the
expenditure incurred from the date when the  Goodwill: Goodwill arising on an acquisition of a
intangible asset first meets the recognition criteria business is carried at cost as established at the
listed above. The costs of external consultants date of the acquisition of the business less
engaged to develop the intangible asset or to modify accumulated impairment losses, if any. Goodwill
purchased intangibles such as software, internal is the Consolidated Entity’s only indefinite life
labour costs directly related to the project and project intangible asset.
management costs directly related to the intangible
asset are included.

Note 1 – Accounting policies, continued (hh) Deferred tax assets and liabilities
(cc) Payables due to financial institutions Deferred tax is accounted for using the
comprehensive Balance Sheet liability method in
All payables due to financial institutions are recorded respect of temporary differences arising from
at amortised cost. Payables due to financial differences between the carrying amount of assets
institutions include amounts due to market and liabilities in the financial statements and the
participants for settlement of transactions initiated by corresponding tax base of those items.
the customers of Cuscal clients on balance date and
are usually settled the next business day. Deferred tax assets are recognised when temporary
differences arise between the tax base of assets and
(dd) Client Deposits liabilities and their respective carrying amounts which
give rise to a future tax benefit, or where a benefit
All deposits are recorded at amortised cost. This arises due to unused tax losses. Deferred tax assets
includes 86 400’s retail deposits. Interest expense on are only recognised to the extent that it is probable
deposits is recognised in the Statement of Profit and that future taxable amounts will be available to utilise
Loss as interest expense. Any deposits overdrawn at those temporary differences or tax losses.
the end of the reporting period are reclassified to
Loans in the Statement of Financial Position. Deferred tax liabilities are recognised when such
temporary differences will give rise to taxable
(ee)Securities sold under agreement to repurchase amounts being payable in future periods.
Securities sold under agreement to repurchase are Deferred tax assets and liabilities are recognised at
held with Reserve Bank of Australia for short term the tax rates expected to apply when the assets are
funding requirements. These agreements are recovered or liabilities are settled.
recognised at amortised cost. Interest expense on
these repurchase agreements is recognised in the (ii) Provisions
statement of profit and loss as interest expense.
Provisions are recognised when the Consolidated
(ff) Discount securities issued Entity has a present obligation, arising from past
events. It is probable that the Consolidated Entity will
Discount Securities Issued comprise negotiable be required to settle the obligation and the amount of
certificates of deposit and are measured at amortised the provision can be measured reliably.
cost. Interest expense on negotiable certificates of
deposit is recognised in profit or loss as interest The amount recognised as a provision is the best
expense. estimate of the consideration required to settle the
present obligation at reporting date taking into
(gg) Other liabilities account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the
(i) Accounts payable and other liabilities
cash flows estimated to settle the present obligation,
Accounts payable and other liabilities are recognised its carrying amount is the present value of those cash
when the Consolidated Entity becomes obliged to flows.
make future payments resulting from the purchase of
Present obligations arising under onerous contracts
goods and services received, whether or not billed to
are recognised and measured as a provision. An
the Consolidated Entity.
onerous contract is considered to exist when the
(ii) Lease liabilities Consolidated Entity has a contract under which the
unavoidable costs of meeting the obligations under
Lease liabilities are initially measured at the present the contract exceed the economic benefits expected
value of the future lease payments at the to be received under it.
commencement date. Lease payments are allocated
between principal and interest expense. Interest Employee benefits
expense is shown as a separate line item in Note 3
A provision is made for benefits accruing to
Interest Income and Expense.
employees in respect of wages and salaries, annual
Lease liabilities may be remeasured when there is a leave, long service leave, and other employee benefits
change in the underlying assumptions surrounding the when it is probable that settlement will be required
lease, such as term or incremental borrowing rate. and they are capable of being measured reliably.

Note 1 – Accounting policies, continued Other notes
Provisions made in respect of wages and salaries, (oo) Expected Credit Losses
annual leave, long service leave, and other employee
AASB 9 establishes a model for recognition and
benefits expected to be settled wholly within 12
measurement of impairments in loans and receivables
months, are measured at their nominal values using
that are measured at Amortised Cost or FVOCI. This is
the remuneration rate expected to apply at the time
referred to as “expected credit losses” (“ECL”) model.
of settlement.
An ECL is required to be recognised on following
Provisions made in respect of employee benefits
items:
which are not expected to be settled wholly within 12
months are measured as the present value of the  A financial asset measured at amortised cost;
estimated future cash outflows to be made by the
Consolidated Entity in respect of services provided by  A financial asset measured at fair value through
employees up to reporting date, over the applicable other comprehensive income;
service period.
 A contract asset recognised under AASB 15;
Equity
 A loan commitment; and
(jj) Shareholders’ Equity
 Certain financial guarantees
Ordinary shares are recognised at the amount paid up
per ordinary share, net of directly attributable issue An ECL is defined as the weighted average of credit
costs. losses with the respective risks of default occurring as
the weights, and is calculated using the below
(kk) Capital Reserve formula:
The capital profits reserve and the general reserve ECL = Exposure at Default (“ED”) x Probability of
represent appropriations made from retained earnings Default (“PD”) x Loss Given Default (“LGD”).
in prior years.
The Consolidated Entity’s general approach to ECL for
The reserve for credit losses is an appropriation from assets at amortised cost or FVOCI are:
retained earnings on the adoption of IFRS to provide
general coverage for unknown credit losses and  Receivable due from financial institutions –
replaced a general provision for doubtful debts. balance primarily due to settlement processes.
Cuscal holds customer security deposits to
(ll) Fair Value through OCI reserve (“FVOCI”) guarantee settlement. ECL arising on these
exposures to Australian ADI’s will be low as there
The FVOCI reserve includes changes in the fair value is no history of default for any Australian ADI’s.
of financial assets that are classified as FVOCI. These
changes are transferred to profit or loss when the  Investment Securities – Cuscal Group holds high
asset is derecognised or impaired. rated securities with financial institutions,
predominantly Australian Banks, as well as
(mm) Foreign Currency Translation Reserve Government or Semi-Government Bonds. ECL
arising on exposures to Australian ADI’s is
The foreign currency translation reserve represents
generally low as there is no history of default.
the amount of unrealised gains and losses on Fair
Value through OCI investments denominated in  Loans – Cuscal loans are immaterial hence there
foreign currencies. is no ECL. Any ECL on the mortgage loan
portfolio of 86 400 is accessed on a case-by-case
(nn) Non-controlling interests
basis.
External interest in the equity that is controlled by the
 Trade Receivables – majority of the Consolidated
Consolidated Entity is shown as non-controlling
Entity’s debtor balances are settled next day via
interest in the controlled entities in the equity section
direct debit against customer accounts held with
of the Statement of Financial Position.
Cuscal, hence the ECL charge is immaterial.

Note 1 – Accounting policies, continued Upon transition to the new standard, Management
assessed existing lease arrangements at the time,
 Loans made by the Securitisation Trust – under and concluded no material leases were identified
this structure, should credit losses occur, those which transition relief did not apply – therefore no
losses are first subject to Loan Mortgage impact to 1 July 2019. AASB 16 has since had the
Insurance (LMI) and if LMI does not perform, following impact to Cuscal Group:
then those loans flow to funders of the Trust, not
to Cuscal. In the event of total loss on the  The existing Margaret Street Lease expired on 30
mortgages in the Trust and a total non- June 2020; under transition ‘relief’ options, the
performance of LMI, an event of extremely low lease qualified as a short term lease with no
probability, the most Cuscal can lose is the Statement of Financial Position impact required;
amount it has paid in to a special reserve
 The Margaret Street Lease; effective 1 July
account, currently $0.2m.
2020; will incur a right of use asset and lease
 Undrawn commitments – the majority of Cuscal’s liability of $22.1m from 1 July 2020;
overdrafts facilities and overdrafts are covered
 The 86 400 Clarence Street Lease; effective May
by cash security deposits, therefore in the event
2020, incurred a right of use asset and lease
of a client failing there would be no credit loss to
liability totalling $3.1m from 1 May 2020.
Cuscal.
No other changes are expected from adoption of AASB
(pp) New accounting standards and amendments to
16.
Accounting Standards that are effective in the
current year AASB Interpretation 23 ‘Uncertainty over Income
Tax Treatment’ clarified the application of the
At the date of authorisation of the financial report, the
recognition and measurement criteria in AASB 112
following Standards and Interpretations issued are
‘Income Taxes’ where there is uncertainty over
effective are considered relevant to the preparation of
income tax treatments, and requires an assessment
the financial statements of Cuscal and the
of each uncertain tax position as to whether it is
Consolidated Entity.
probable that a taxation authority will accept the
position. Where it is not probable, the effect of the
Effective for annual
reporting periods Applies to Cuscal uncertainty is reflected in determining the relevant
beginning on or for the financial taxable profit or loss, tax bases, unused tax losses
Standard after year ending and unused tax credits or tax rates.
AASB 16 Leases 1 January 2019 30 June 2020 The amount is determined as either the single most
likely amount or the sum of the probability weighted
AASB Interpretation amounts in a range of possible outcomes, whichever
23 Uncertainty over
Income Tax better predicts the resolution of the uncertainty.
Treatment 1 January 2019 30 June 2020 Judgements are reassessed as and when new facts
and circumstances are presented.
AASB 16 ‘Leases’ replaces the current AASB 117 There has been no impact to the 2020 Annual Report
Leases standard and sets out a comprehensive model on adoption of this AASB Interpretation 23.
for identifying lease arrangements and subsequent
measurement. A contract contains a lease if it
conveys the right to control the use of an identified
asset for a period of time. The majority of leases from
the lessee perspective are within the scope of AABS
16 and require the recognition of ‘right-of-use’ asset
and a related lease liability representing the present
value of future lease payments. This results in an
increase in the recognised assets and liabilities in the
Statement of Financial Position, as well as a change in
expense recognition, with interest expense and
amortisation expense replacing operating lease
expense.

Note 1 – Accounting policies, continued

(qq) New accounting standards and amendments to
Accounting Standards that are not yet effective
in the current year
Cuscal has reviewed all accounting standards and

interpretations that have been issued but are not yet
effective.
At the date of authorisation of the financial report, the

following Standards and Interpretations issued but are
not yet are effective are considered relevant to the
preparation of the financial statements of Cuscal and
the Consolidated Entity.
Effective for annual

reporting periods Applies to Cuscal
beginning on or for the financial
Standard after year ending
AASB 2019-1 1 January 2020 30 June 2021
The Consolidated Entity is not materially impacted

from the adoption of the above interpretations that
has been issued but not yet effective.

Notes to the Statement of Profit and Loss

Note 2 – Net Fee & Commission Income
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Fee & Commission income
Transactional product related income(i) 184.7 218.5 185.7 218.8
Client funded project income 6.0 5.4 6.0 5.4
Treasury and securitisation income 0.2 0.4 0.2 0.4
Total Fee & Commission income 190.9 224.3 191.9 224.6
Fee & Commission expense
Transactional product related direct expenses(ii) (54.2) (83.8) (53.0) (83.1)

Treasury and securitisation direct expenses (0.6) (0.8) (0.6) (0.8)
Total Fee & Commission expense (54.8) (84.6) (53.6) (83.9)
Net Fee & Commission income 136.1 139.7 138.3 140.7
Analysis of Fee & Commission income
Recognised at a point in time(iii) 188.5 222.2 189.5 222.5

Recognised over time 2.4 2.1 2.4 2.1
190.9 224.3 191.9 224.6

(i) Transactional product related income includes transactional volume fees, fixed monthly fees and Payment and other Scheme related income.
(ii) Transactional product related direct expenses include Payment Scheme fees and other direct processing costs.
(iii) Includes transactional volume fees recognized at the time of transaction processing.

Note 3 – Net interest Income
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Interest income
Cash and receivable due from financial institutions 3.9 9.8 3.9 9.7
Investment securities 21.8 29.5 20.9 29.5
Loans 0.6 0.5 0.4 0.5
Loans in Securitisation Trust 5.0 6.8 - -
Total interest income 31.3 46.6 25.2 39.7
Interest expense
Payables due to financial institutions (0.1) (0.3) (0.1) (0.2)
Client deposits (14.6) (23.8) (12.4) (24.0)
Discount securities (1.2) (2.4) (1.2) (2.4)
Repurchase agreements (1.0) (2.2) (1.0) (2.2)
Borrowings by Securitisation Trust (3.8) (5.4) - -
Total interest expense (20.7) (34.1) (14.7) (28.8)
Net interest income 10.6 12.5 10.5 10.9
Analysis of Interest Income by category of financial

assets
At amortised cost 10.4 17.1 4.3 10.2
At Fair Value through other comprehensive income 20.9 29.5 20.9 29.5
31.3 46.6 25.2 39.7

Analysis of Interest Expense by category of financial
liabilities
At amortised cost (20.7) (34.1) (14.7) (28.8)
At Fair Value through Profit and Loss - - - -
(20.7) (34.1) (14.7) (28.8)
Note 4 – Other operating income
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Foreign exchange gains - 0.4 - 0.4
Gain on revaluation on Investments in Other Entities 0.1 0.2 0.1 0.2
Securitisation Trust distributions - - 0.4 0.3
Dividends received - related parties - - 1.5 0.3
Total other operating income 0.1 0.6 2.0 1.2

Note 5 – Operating expenses
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Employment expenses
Salary and salary related costs 83.4 71.8 70.5 64.5
Other employment expenses 2.6 3.8 2.3 2.7
Total employment expenses 86.0 75.6 72.8 67.2
Occupancy expenses
Operating lease rentals and outgoings(i) 4.6 4.2 4.0 4.0
Depreciation: right-of-use premises assets 0.1 - - -
Other occupancy expenses(ii) (0.8) 0.5 (0.9) 0.3
Total occupancy expenses 3.9 4.7 3.1 4.3
Non-salary technology expenses
Communication 3.9 3.8 3.9 3.8
Depreciation: computer equipment and software 1.8 2.0 1.8 2.0
Amortisation of intangible assets 5.9 4.8 3.3 4.8
Repairs and maintenance 17.1 12.9 14.0 11.9
Outsourced Services 6.3 6.1 6.1 5.2
Other non-salary technology expenses 2.5 3.8 2.5 2.9
Total non-salary technology expenses 37.5 33.4 31.6 30.6
Other expenses
Auditors remuneration 1.0 1.2 0.8 1.0
Consulting 4.5 4.9 4.1 4.5
Travel, conferences and related expenses 1.1 1.7 0.8 1.6
Legal and insurance 1.9 2.5 1.3 2.2
Taxes 1.0 1.2 0.4 1.0
Marketing 4.3 2.9 0.4 0.8
Internal audit services 0.8 0.7 0.8 0.7
Other 1.6 2.2 0.9 1.8
Total other expenses 16.2 17.3 9.5 13.6
Total operating expenses (iii)

143.6 131.0 117.0 115.7
(i)
Operating lease rentals for the year ending 30 June 2020 are considered short-term in nature upon adoption of AASB 16, as they expire
within 12 months of adoption of the standard.
(ii
Other occupancy expenses at 30 June 2020 includes $1.4 million writeback of an existing makegood provision upon expiry of the Margaret
Street premises lease at 30 June 2020.
(iii)
Included in total operating expenses for 2020 is $26.4 million (2019: $15.2 million) relating 86 400 Digital Banking business.

Note 6 – Income tax expense
The income tax expense for the year is the tax payable on the current year’s taxable income based on the
company income tax rate, adjusted for changes in deferred tax assets and liabilities and unused tax losses.
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Income tax expense comprises:
Current income tax charge 1.6 4.3 6.7 10.0

Adjustments in respect of current income tax of previous
0.3 (1.7) 0.2 (1.2)
years
Adjustments in respect of previous years deferred income tax - (0.1) - (0.1)
Relating to origination and reversal of temporary differences 0.8 7.5 2.8 5.8
Income tax expense reported in income statement 2.7 10.0 9.7 14.5
Reconciliation of income tax expense at the Consolidated
Entity’s effective income tax rate is as follows:
Operating profit before income tax expense 3.2 32.2 33.8 47.5
Income tax expense at 30% thereon 1.0 9.7 10.1 14.3
86 400 losses not recognised 1.7 - - -
Research and development tax incentive - 0.4 - 0.4
Intercompany dividends - - (0.4) (0.1)
Adjustments in respect of ITE of previous years - (0.1) - (0.1)
Income tax expense 2.7 10.0 9.7 14.5
Note 7 – Key management personnel remuneration
Consolidated Cuscal
2020 2019 2020 2019
$’000 $’000 $’000 $’000
Short-term employee benefits 4,302 5,078 4,302 5,078
Post-employment benefits 167 203 167 203
Other long-term employee benefits 296 382 296 382
Total key management remuneration 4,765 5,663 4,765 5,663

Note 8 – Remuneration of auditors
Consolidated Cuscal
2020 2019 2020 2019
$’000 $’000 $’000 $’000
Audit services 805 698 600 616
Taxation services 58 96 58 76
Other non-audit services 124 360 109 284
Total remuneration of auditors 987 1,154 767 976
The auditor of Cuscal Limited for both current and comparative financial years is Deloitte Touche Tohmatsu. The
external auditor has a critical role to ensure that independent credibility is provided in respect to Cuscal’s
financial statements. The Board Audit Committee have procedures in place to review, oversee and approve
non-audit services to ensure the required independence is maintained.
Note 9 – Cash flow information

(a) Reconciliation of net cash flows from operating activities
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Profit for the year 0.5 22.2 24.1 33.0
Depreciation expense 1.9 2.0 1.8 2.0
Amortisation of intangible assets 5.9 4.8 3.3 4.8
Gain on revaluation on Investments in Other Entities (0.1) (0.2) (0.1) (0.2)
Impairment on ATM related assets - (2.8) - (2.8)
Provisions on ATM related assets - (7.6) - (7.6)
(Decrease)/increase in income tax provision (2.0) 0.4 (2.0) 0.4
Decrease in deferred tax items 0.8 7.9 2.8 6.2
Net decrease/(increase) in other assets and liabilities (42.2) 2.1 (44.0) (2.2)
(Increase)/decrease in loans & advances (29.0) 0.2 1.0 0.2

Decrease/(Increase) in receivables from financial
32.5 (2.0) 34.9 (3.5)
institutions
Increase in deposits 276.7 105.9 (27.2) 90.3
Increase in investment securities (411.0) (186.9) (136.4) (186.9)
Increase/(decrease) in payables due to financial institutions 5.4 (19.5) 5.4 (19.5)
Net decrease in notes issued (49.3) (19.5) (49.3) (19.5)
Net increase/(decrease) in repurchase agreements 3.8 (6.2) 3.8 (6.2)
Net cash used in operating activities (206.1) (99.2) (181.9) (111.5)

Note 9 – Cash flow information, continued

(b) Non-cash investing and financing activities
Non-cash investing and financing activities disclosed in other notes are:
 Deferred settlement of part proceeds of sale of ATM related assets – note 20
 Acquisition of right of use asset – note 38
Notes to the Statement of Financial Position

Note 10 - Cash and cash equivalents
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Cash at Reserve Bank 374.2 406.8 374.2 406.8
Cash at Bank 227.9 308.2 200.3 308.1
Cash in ATMs(i) - 81.7 - 81.7
Total cash 602.1 796.7 574.5 796.6
(i) Cash in ATMs was settled to $Nil in August 2019 upon sale of ATM fleet to Armaguard. Refer to Note 19 for further
information.
Note 11 – Receivables due from financial institutions
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At amortised cost:
Prepaid cardholder cash(i) 104.2 138.5 104.2 138.5
Other amounts due from other financial institutions 5.2 5.6 5.0 5.6
Cash held in the Securitisation Trust(ii) 5.0 2.8 - -
Total receivables due from financial institutions 114.4 146.9 109.2 144.1
(i) Prepaid cardholder cash is in respect of stored value cards issued by Cuscal Limited.
(ii) Cash held in the Securitisation Trust can only be used in accordance with the documentation governing the Trust.
Neither Cuscal nor its subsidiaries are able to access this asset.
The above amounts are expected to be recovered within 12 months of the balance date. Prepaid cards may be
held longer at the discretion of the cardholder.

Note 12 – Investment Securities
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At fair value through other comprehensive income:
Negotiable certificates of deposit 126.5 149.4 126.5 149.4
Medium term floating rate notes 990.2 991.8 990.2 991.8
Other bonds 160.9 - 160.9 -
Total investment securities at FVOCI 1,277.6 1,141.2 1,277.6 1,141.2
At Amortised cost:
Negotiable certificates of deposit 190.4 - - -
Medium term floating rate notes 36.6 - - -
Other bonds 47.6 - - -
Total investment securities at amortised cost 274.6 - - -
Total investment securities 1,552.2 1,141.2 1,277.6 1,141.2
Cuscal group has determined the following risk

concentrations:
With Banks, Mutual Banks and Credit Union issuers 1,067.5 1,141.2 1,045.4 1,141.2
With Australian government, semi-government and
supranational issuers 484.7 - 232.2 -
Total investment securities 1,552.2 1,141.2 1,277.6 1,141.2
Investment Securities expected to mature within 12 months of the balance date is $750.0 million
(2019: $459.6 million).

Note 13 – Loans
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Loans (secured)
At amortised cost:
Home loans – 86 400 30.1 - - -

Less: provision for impairment (0.1) - - -
Home loans net of impairment - 86400 30.0 - - -
Overdrafts 0.1 0.9 0.1 0.9

Term loans - Cuscal 0.5 0.7 0.5 0.7
Total loans 30.6 1.6 0.6 1.6
The Consolidated Entity has determined the following risk

concentrations:
Loans to credit unions and mutual banks - 0.5 - 0.5
Loans to other organisations 0.6 1.1 0.6 1.1

Loans to individuals 30.0 - - -
Total loans 30.6 1.6 0.6 1.6
Maximum loan credit exposure - Committed Facilities

(including drawn amounts detailed above)
To credit unions and mutual banks
Overdrafts 175.6 170.1 175.6 170.1
Other organisations
Overdrafts 0.1 4.5 0.1 4.5
Term Loans 0.8 1.3 0.8 1.3
Individuals – 86 400
Home loans 38.7 - - -
Total committed facilities 215.2 175.9 176.5 175.9
Unutilised loan credit exposure - Committed Facilities
To credit unions and mutual banks
Overdrafts 175.6 169.6 175.6 169.6
Other organisations
Overdrafts - 4.1 - 4.1
Term Loans 0.3 0.6 0.3 0.6
Individuals – 86 400
Home Loans 8.7 - - -
Total unutilised facilities 184.6 174.3 175.9 174.3
Overdraft facilities are primarily secured by security deposits and rights of offset from the borrower. (Refer to
Note 35 for further information in respect of credit risk).

Note 13 – Loans, continued

Term loans comprise amounts advanced under committed facilities. Overdrafts and Term Loans are expected to
be recovered within 12 months of the balance date.
Note 14 – Securitisation Trust loans and borrowings
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Loans made by the Securitisation Trust
At amortised cost:
Residential mortgages 106.4 135.4 - -
Total loans by the Securitisation Trust 106.4 135.4 - -

Specific and collective provision for impairment
At balance date the amount of the specific provision for
impairment of loans - - - -
Refer to Note 35 for further information in respect of credit risk and maturities of the Securitisation Trust loans
and borrowings.
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Borrowings of the Securitisation Trust
At amortised cost:
Borrowings – secured 110.4 137.2 - -
Total borrowings of the Securitisation Trust 110.4 137.2 - -
All borrowings by the Trust are limited in recourse to the assets of the Trust and neither Cuscal nor any of its
subsidiaries have any obligation in respect to the repayment of those borrowings, except for the $0.1 million
Extraordinary Expense Reserve outlined in Note 41 (2019: $0.1 million).

Note 15 – Derivative instruments
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Derivative financial assets
At fair value through profit or loss:
Foreign currency forward contracts - 0.1 - 0.1
Total derivative financial assets - 0.1 - 0.1
Derivative financial liabilities
Foreign currency forward contracts 0.2 - 0.2 -
Total derivative financial liabilities 0.2 - 0.2 -
Derivative instruments are expected to be recovered or due to be settled within 12 months of the balance date.
Note 16 - Other assets
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Trade Receivables(i) 3.8 4.2 3.8 3.8
Less: Provision for doubtful debts (0.1) - (0.1) -
Net trade receivables 3.7 4.2 3.7 3.8
Prepayments 7.2 7.1 6.3 6.8
Accrued income 16.2 15.8 16.2 15.8
Other amounts receivable(ii) 3.3 0.6 3.7 1.1
Total other assets 30.4 27.7 29.9 27.5
(i) The majority of trade receivables are settled on an overnight basis by direct debit against debtor deposit accounts.
(ii) Other amounts receivable includes $2.8 million (2019: $Nil) receivable from Armaguard being discounted sale proceeds of ATM assets,
less instalments received to date.
In Other Assets, amounts expected to be recovered after 12 months of the balance date are Prepayments of
$1.2 million (2019: $1.0 million) and receivables relating to the sale of ATMs of $2.8 million (2019: $Nil). All
other amounts are expected to be recovered within 12 months of the balance date.

Note 17 – Investments
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Shares in other entities 4.1 4.0 4.2 4.1
Shares in subsidiaries (refer note 41) - - 78.4 52.4
Total Investments 4.1 4.0 82.6 56.5
Shares in other entities
Balance at beginning of year 4.0 3.8 4.1 3.9
Revaluation gains 0.1 0.2 0.1 0.2
Balance at end of financial year 4.1 4.0 4.2 4.1
Shares in subsidiaries
Balance at beginning of year - - 52.4 51.4
Additions - investment in ‘86 400’ entities - - 26.0 17.0
Capital reduction in Strategic Payment Services Pty Ltd - - - (16.0)
Balance at end of financial year - - 78.4 52.4
Shares in other entities and shares in subsidiaries are expected to be held for longer than 12 months after the
balance date.
On 1 July 2019, Cuscal invested an additional $24.0 million capital into 86 400 Holdings Ltd. A further
$1.0 million was invested on 12 February 2020 and $1.0 million on 21 February 2020. The impact of these
transactions is eliminated upon consolidation.

Note 18 – Deferred tax assets and liabilities
2020 Consolidated
Opening Charge to Charge to Closing
Balance Acquired Utilised equity profit Balance
$m $m $m $m $m $m
Other liabilities 6.5 - - - (0.1) 6.4
86 400 losses (i)

- - - - 1.7 1.7
Provisions - employee entitlements 2.2 - - - 0.4 2.6
ATM Impairment & provisions 4.1 - - - (4.1) -
Property, plant and equipment 0.3 - - - 1.0 1.3
Other assets 0.1 - - - - 0.1
Total deferred tax assets 13.2 - - - (1.1) 12.1
Other income (1.7) - - - - (1.7)

Property, plant, equipment and
intangible assets (8.5) - - - 0.3 (8.2)
Fair value revaluations (1.4) - - - - (1.4)
Total deferred tax liabilities (11.6) - - - 0.3 (11.3)
Net deferred tax assets 1.6 - - - (0.8) 0.8

Net movement taken to income
tax expense (0.8)
(i) At the reporting date, a deferred tax asset (“DTA”) of $1.7 million has been recognised in respect of losses incurred by the 86 400 group of
companies (“86 400”) after Cuscal ceased to be a 100% shareholder and 86 400 exited the Cuscal consolidated tax group. Deferred tax assets
relating to current taxable losses have been recognised as the expected value of the tax losses based on a range of scenarios of future taxable
profits which are expected to be available against which they can be realised. The assumptions used to estimate future taxable profits include
expectations on product and customer growth, mortgage balances and interest margins. This DTA can be carried forward indefinitely subject to
meeting criteria as set out by the Australian Tax Office.
At the reporting date, no deferred tax liability has been recognised on the $13.3 million reserve attributable to
Cuscal’s dilution in 86 400 (refer Note 30), as a taxable event (temporary difference) has not yet arisen.
Temporary differences arising in connection with investments in subsidiaries will be recognised upon either
revaluation of the underlying 86 400 investment or when Cuscal sells down a share of its investment in the 86
400 Group.

Note 18 – Deferred tax assets and liabilities, continued
2020 Cuscal
Balance Acquired Utilised equity profit balance
$m $m $m $m $m $m
Other liabilities 5.3 - - - (1.1) 4.2
ATM impairment and provisions 4.1 - - - (4.1) -
Property, plant and equipment 0.2 - - - 0.9 1.1
Other assets 0.1 - - - 0.1 0.2
Other income (1.7) - - - - (1.7)

Fair value revaluations (1.4) - - - - (1.4)
Total deferred tax liabilities (8.2) - - - 0.8 (7.4)
Net deferred tax assets 3.6 - - - (2.8) 0.8

tax expense (2.8)
2019 Consolidated
Balance Acquired Utilised equity profit Balance
$m $m $m $m $m $m
Other liabilities 5.5 - - - 1.0 6.5

ATM Impairment and business
provisions 8.4 - - - (4.3) 4.1
Property, plant and equipment 1.7 - - - (1.4) 0.3
Other assets 0.1 - - - - 0.1
Other income (0.9) - - - (0.8) (1.7)

intangible assets (6.2) - - - (2.3) (8.5)
Fair value revaluations (1.0) - - (0.4) - (1.4)
Total deferred tax liabilities (8.1) - - (0.4) (3.1) (11.6)
Net deferred tax assets 9.5 - - (0.4) (7.5) 1.6

tax expense (7.5)

Note 18 – Deferred tax assets and liabilities, continued
2019 Cuscal
Balance Acquired Utilised equity profit balance
$m $m $m $m $m $m
Other liabilities 5.3 - - - - 5.3
ATM impairment and provisions 8.4 - - - (4.3) 4.1
Property, plant and equipment 1.6 - - - (1.4) 0.2
Other assets 0.1 - - - - 0.1
Other income (0.9) - - - (0.8) (1.7)

Fair value revaluations (1.0) - - (0.4) - (1.4)
Total deferred tax liabilities (7.5) - - (0.4) (0.3) (8.2)
Net deferred tax assets 9.8 - - (0.4) (5.8) 3.6

tax expense (5.8)

Note 19 - Property, plant and equipment and right-of-use assets
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
ATMs (1)
At Cost - 33.3 - 33.3
Accumulated depreciation - (15.5) - (15.5)
Provision for impairment - (15.0) - (15.0)
Reclassified to ‘Non-current assets held for sale’ - (2.8) - (2.8)
Total ATMs - - - -
Other Property, plant and equipment
At Cost 22.1 22.0 20.5 20.8
Accumulated depreciation (17.7) (17.7) (16.5) (16.5)
Total Other Property, plant and equipment 4.4 4.3 4.0 4.3
Right-of-use assets - Property
At Cost 3.2 - - -
Accumulated depreciation (0.1) - - -
Total Right-of-use assets 3.1 - - -

Total Property, plant and equipment and right-of-use
assets 7.5 4.3 4.0 4.3
(1)
ATM assets were reclassified to Asset Held for Sale during the 2019 financial year. Refer Note 21 for further information.
Property, Plant & Equipment with remaining expected useful lives of less than 12 months after the balance date
is $Nil (2019: $0.2 million). All other remaining items of Property, Plant & Equipment have expected useful lives
longer than 12 months after the balance date for both current and comparable period.

Note 19 - Property, plant and equipment and right-of-use assets, continued
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
ATMs (1)
Revaluation/(impairment) - 2.8 - 2.8
Reclassified to ‘Non-current assets held for sale’ - (2.8) - (2.8)
Balance at end of financial year - - - -
Other Property, plant and equipment
Carrying value at beginning of year 4.3 6.3 4.3 6.1
Additions 2.0 0.2 1.6 0.2
Disposals/written off (1.9) (1.2) (1.9) (1.0)
Depreciation (1.8) (2.0) (1.8) (2.0)
Depreciation written back on disposals/write-offs 1.8 1.0 1.8 1.0
Right-of-use asset
Carrying value at beginning of year - - - -
Additions 3.2 - - -
Depreciation (0.1) - - -
Balance at end of financial year 3.1 - - -

(1)
ATM assets were reclassified to Asset Held for Sale during the 2019 financial year. Refer Note 20 for further information.

Note 20 – Sale of ATM related assets

On 26 February 2019, Cuscal entered into a Sale & Purchase Agreement to sell all Cuscal-owned branch and
offsite ATM assets, the rediATM scheme (including all associated trademarks and IP), and all customer-owned
servicing contracts, leases and vendor agreements to the Linfox Armaguard Group (“Armaguard”).
The transaction was subject to regulatory approval and the satisfaction of certain conditions precedent, the last
of which was satisfied on 13 August 2019.
Post the completion of sale, and commercial terms agreed upon:
 ATM cash was reimbursed to Cuscal;
 $0.4m was paid to Cuscal on completion; and
 A discounted receivable of $2.5 million being proceeds to be received from Armaguard 2-3 years post-
completion.
Impact on 2019 financial period
The above transaction has had the following impacts on the 2019 financial year:
 Non-current assets held for sale: In accordance with AASB 5 ‘Non-current Assets Held for Sale and
Discontinued Operations’, and upon entering discussions with Armaguard to sell the ATM assets, Cuscal
reassessed the recoverable value of the ATM assets and revalued the ATM assets to the fair value of the
proceeds payable by Armaguard. These assets were reclassified as ‘Non-Current Assets Held for Sale’ in
the Statement of Financial Position for 30 June 2019, and were written down to $Nil at 13 August 2019.
 Provisions: At 1 July 2018, Cuscal carried onerous contract provisions in respect of the ATM business. As
a result of the reclassification and the high probability of a sale of the ATM assets at the time, Cuscal
reassessed the onerous contract provisions and released excess amounts, which were no longer required.
These are disclosed in Note 28 Provisions.
The impact to the Statement of Financial Position is detailed below:
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Assets held for sale
ATM assets reclassified from PP&E and ATMs - 2.8 - 2.8
Total assets held for sale - 2.8 - 2.8
ATM business provisions
Opening Balance - 11.0 - 11.0
Amounts utilised during the period - (3.4) - (3.4)
Write-back of provisions - (7.6) - (7.6)
Total ATM business provisions - - - -

Note 20 – Sale of ATM related assets, continued

The impact to the Statement of Profit and Loss is detailed below:
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Revaluation of ATM assets - 2.8 - 2.8
Write-back of ATM provisions - 7.6 - 7.6
ATM revaluation and provisions - 10.4 - 10.4
Note 21 - Intangible assets
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Payments Infrastructure
At cost 48.1 47.9 43.2 43.0
Accumulated amortisation (including R&D offsets) (36.1) (33.8) (31.2) (28.9)
Total Payments Infrastructure 12.0 14.1 12.0 14.1
86 400 Customer Experience Engine
At cost 24.3 17.7 - -
Accumulated amortisation (including R&D offsets) (3.6) (1.0) - -
Total Customer Experience Engine 20.7 16.7 - -
Software
At cost 2.0 3.9 2.0 3.9
Provision for impairment (0.4) (0.4) (0.4) (0.4)
Accumulated amortisation (1.5) (2.0) (1.5) (2.0)
Total Software 0.1 1.5 0.1 1.5
Investment in NPP Australia Limited (NPPA)
At cost 4.0 4.0 4.0 4.0
Accumulated amortisation (0.9) (0.5) (0.9) (0.5)
Total Investment in NPPA 3.1 3.5 3.1 3.5
Goodwill on SPS acquisition 21.6 21.6 - -
Total Intangible assets 57.5 57.4 15.2 19.1
Intangible assets with remaining expected useful lives less than 12 months after the balance date is $Nil (2019:
$0.1 million). Remaining items of Intangible assets have expected useful lives longer than 12 months after the
balance date for both current and comparable year.

Note 21 - Intangible assets, continued
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Payments Infrastructure
Carrying value at the beginning of the year 14.1 17.3 14.1 16.8
Additions 0.2 - 0.2 -
Amortisation for the year (net of R&D offsets) (i)

(2.3) (3.2) (2.3) (2.7)
Balance at the end of the year 12.0 14.1 12.0 14.1
86 400 Customer Experience Engine
Carrying value at the beginning of the year 16.7 5.0 - -
Additions 6.6 12.5 - -
Amortisation for the year (net of R&D offsets) (ii)

(2.6) (0.8) - -
Balance at the end of the year 20.7 16.7 - -
Software
Additions 0.2 - 0.2 -
Disposals/written-off (2.1) (1.2) (2.1) (1.2)
Impairment for the year(iii) - 0.7 - 0.7
Amortisation for the year (0.6) (0.4) (0.6) (0.4)
Amortisation write-back on disposals/write-offs 1.1 0.4 1.1 0.4
Investment in NPPA Australia Limited
Amortisation for the year (0.4) (0.4) (0.4) (0.4)
Goodwill on SPS acquisition 21.6 21.6 - -
Total Intangible assets 57.5 57.4 15.2 19.1
(i) Amortisation of the year includes $0.1 million R&D concession reversal during the year (2019: $Nil)
(ii) Amortisation for the year includes $0.3 million of R&D concession (2019: $0.8 million). Amortisation on the asset began in October 2019.
(iii) Impairment for the 2019 year of $0.7 million is write-back / reversal of ATM related software impairment.

Note 22 - Impairment of Intangible assets
At each reporting date, the Consolidated Entity reviews the carrying amounts of its intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. For the year
ended 30 June 2020, the Consolidated Entity divided its activities into the following Cash Generating Units
(hereafter “CGU”), with separately identifiable corporate activities:
 Corporate, this CGU covers the Consolidated Entity’s investment and securitisation activities; including
the funding of those activities. The Corporate CGU also manages the investment of the Consolidated
Entity’s surplus capital.
 Payments, the main CGU, which covers the processing, and settlement of financial transactions on behalf
of clients, generally for their customers. Payments includes Cuscal’s card issuance activities, fraud
monitoring, data analytics and Cuscal’s Acquiring switching and driving activities.
 Digital Banking, this CGU covers the activities of the 86 400 Group (“86 400”) which received its banking
licence on 18 July 2019 and is developing its operations as a digital bank through expanding its customer
base and product offering. The key changes that occurred between Cuscal and 86 400 during the financial
year and to the date of this report are summarised in Note 41.
The future strategic direction of the Consolidated Entity is focused on the Payments CGU, as the Consolidated
Entity will progressively reduce its shareholding in 86 400 from the 70% interest currently held to a minority
shareholding.
The Consolidated Entity’s net intangible assets of $57.5 million are allocated to the Payments CGU $35.9
million and to the Digital Banking CGU $20.7 million (2019: $40.7 million to Payments CGU and $16.7m to the
Digital Banking CGU).
Corporate CGU - Process and Assumptions
This CGU comprises investment and securitisation activities, whose financial assets largely fall within scope of
AASB 9 Financial Instruments. Whilst AASB 136 Impairment of Assets specifically includes investments in
subsidiaries, Cuscal’s investment in 86 400 Group is effectively represented in the Digital Banking CGU and
assessed as outlined below.
Payments CGU - Process and Assumptions
The Consolidated Entity has assessed the recoverable amount of the Payments CGU (and thus the recoverable
amount of the intangible assets allocated to the CGU) on the basis of fair value less costs of disposal (“FVLCD”).
This assessment has been carried out on the following basis:
 It is assumed that the Payments CGU is subject to the same level of prudential regulation as the Australian
Prudential Regulation Authority (“APRA”) applies to the Consolidated Equity. Accordingly, the returns from
the Payments CGU included in the recoverable amount are only after allowing for the maintenance of
capital as required under APRA Prudential Standards and applicable internal capital overlays.
 The returns from the Payments CGU are based on the projections for the Payments CGU in the
Consolidated Entity’s FY21 Corporate Plan and Budget covering the period to 30 June 2025. The FY21
Corporate Plan and Budget was approved by the Cuscal Board on 17 June 2020. The assumptions in the
Plan are based on recent past experience adjusted for management expectations for pricing on contract
renewals, new contracts and relevant product development. The Plan also considers expected further
COVID-19 impacts to key revenue drivers and Balance Sheet positions. The Budget as such applies a
conservative view to FY21. Further, the Plan allows for the investment required to ensure the Payments
CGU is able continue to provide high-level functionality to customers.
 The recoverable amount of the Payments CGU has been determined by discounting the net cash flows of
the Payments CGU.

Note 22 - Impairment of Intangible assets, continued
Payments CGU - Process and Assumptions, continued
 A terminal value growth rate of 3% (2019: 3%) has been applied at the end of the five year period in the
FY21 Corporate Plan and Budget.
 The cash flows have been discounted at the Consolidated Entity’s weighted average cost of capital
(“WACC”), which has been assessed on the basis that ongoing activities of the Consolidated Entity will be
focused on the Payments CGU.
 Discount rates of 10.0% (High), 9.5% (Mid) and 9.0% (Low) have been applied to the Net Cash Flows
(2019: 11.4% High; 10.8% Mid; 10.2% Low). The WACC is that assessed by an independent expert
advisor as being the Consolidated Entity’s WACC as at November 2019. Since the independent assessment
was carried out, the impact of COVID-19 has seen interest rates fall to historic lows. However, as a result
of the pandemic market risk premiums are likely to have increased to offset a substantial portion of the fall
in the risk free rate.
 The inputs used in determining the recoverable amount of the Payments CGU are Level 3 inputs under the
fair value hierarchy set out in accounting standard AASB 13 Fair Value Measurement .
The result of the assessment of the recoverable amount of the Payments CGU is that is it significantly above its
carrying value.
The valuation of the Payments CGU has been stress tested. Firstly, the terminal value growth rate was reduced
from 3% to 2% (2019: 3% to 2%). Secondly, the breakeven point where recoverable amount equals the
carrying value of the Payments CGU was determined. This point arises when the Net Profit After Tax of the
Payments CGU in each of the next 5 years declines by 48% (2019: 48%).
In all stress test scenarios, the recoverable amount of the Payments CGU continues to exceed its carrying
value.
Digital Banking CGU - Process and Assumptions
Cuscal has invested $57.0 million in 86 400 Holdings Ltd as at 30 June 2020 (2019: $30.9 million). This
investment represents capital invested to fund the development of the Customer Experience Engine (“CXE”)
asset, which is now operational, and initial operating losses.
The CXE asset comprises the costs associated with the development and implementation of the CXE, including
eligible internal and external labour costs and vendor costs, without which 86 400 Ltd (the licenced ADI of the
86 400 Group) would be unable to operate.
The carrying value of the Digital Banking CGU was compared to its recoverable amount under the Fair Value
less Cost of Disposal methodology using an implied valuation derived from the Series A capital raising
completed by 86 400 Holdings in February 2020 and allowing for disposal costs. The recoverable amount for the
CGU, including the CXE asset, was greater than the carrying value of Cuscal’s investment.
Additional consideration was given to the sensitivity of the determination of fair value as at the reporting date
due to the economic uncertainty brought by COVID-19 on unlisted equity values. When a 20% haircut is
applied to the implied valuation, there was still a resulting headroom to support the carrying value of the CXE.
The carrying value of the CXE was also compared to its recoverable amount using the Value in Use
methodology based on the 5-year financial forecasts of the 86 400 Group, assuming a 1% terminal value
growth rate and applying a 15% pre-tax discount rate, which reflects the 86 400 Group WACC.
The value in use of the CXE exceeded its carrying value.

Note 23 – Payables due to financial institutions
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At amortised cost:
Settlement balances due to other financial institutions,
unsecured 56.9 51.5 56.9 51.5
The above amounts are expected to be settled within 12 months of the balance date.
Note 24 – Client Deposits
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At amortised cost:
Deposits at call, unsecured 648.8 688.5 657.2 692.4
Security deposits 741.4 734.9 742.9 734.9
Retail Deposits – 86 400 309.9 - - -
Total deposits 1,700.1 1,423.4 1,400.1 1,427.3
Concentration
Banks, credit unions and mutual banks 1,194.9 1,209.7 1,194.9 1,209.7
Other organisations 195.3 213.7 195.3 213.7
Individuals – 86 400 309.9 - - -
Related parties - - 9.9 3.9
Total deposits by concentration 1,700.1 1,423.4 1,400.1 1,427.3
All Client Deposits and Retail Deposits are expected to mature within 12 months of the balance date, except for
$393.9 million, which will mature after 12 months (2019: $389.1 million).
Note 25 - Securities sold under agreement to repurchase

As part of the arrangements covering the Consolidated Entity’s Exchange Settlement Account with the Reserve
Bank of Australia, the Consolidated Entity is required to sell qualifying securities to the Reserve Bank in
exchange for funds held in the ESA account to meet outflows of funds that may occur after the normal trading
day. These repurchase transactions have term of one month, expiring on the first business day of each month.
The Reserve Bank has no recourse to the Consolidated Entity beyond the securities subject to the repurchase
agreement.
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At amortised cost:
Repurchase agreements with the Reserve Bank of Australia 144.7 140.9 144.7 140.9

Note 26 – Discount securities issued
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
At amortised cost:
Negotiable certificates of deposit – unsecured 62.4 111.7 62.4 111.7
Note 27 –Other liabilities

Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Liability to prepaid cardholders(i) 104.2 138.5 104.2 138.5
Deferred income 7.2 12.2 7.1 12.2
Sundry creditors and accrued expenses 19.5 24.1 17.7 21.0
Lease liabilities 2.9 - - -
Payables due to controlled entities - - 0.7 2.4
Total other liabilities 133.8 174.8 129.7 174.1
(i)
The liability to prepaid cardholders is in respect of stored value cards issued by Cuscal Limited, which are shown under
Receivables due from Financial Institutions in the Statement of Financial Position.
In other liabilities, all amounts are expected to be recognised within 12 months of the balance date with the
exception of Deferred Income of $3.0 million (2019: $5.2 million) and lease liability of $2.9 million (2019:
$Nil).

Note 28 - Provisions
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Employee benefits 18.8 16.4 15.3 13.9
Other provisions 4.7 7.0 4.3 7.0
Total provisions 23.5 23.4 19.6 20,9
Employee Benefits
Opening balance 16.4 13.7 13.9 13.4
Additional provisions 11.0 12.8 8.2 9.1
Amounts utilised during the year (8.6) (10.1) (6.8) (8.6)
ATM business provisions
Opening balance - 11.0 - 11.0
Amounts utilised during the year - (3.4) - (3.4)
Write-back of provisions - (7.6) - (7.6)
Balance at end of financial year - - - -
Other provisions
Opening balance 7.0 2.5 7.0 2.5
Additional provisions 1.7 5.2 1.5 5.2
Amounts utilised during the year (4.0) (0.7) (4.2) (0.7)
Provisions expected to be utilised after 12 months of the balance date is $3.9 million (2019: $3.2 million). All
other amounts are expected to be recognised and settled within 12 months of the balance date.
Note 29 – Issued capital

Cuscal has 186,858,915 ordinary shares on issue at 30 June 2020 (2019: 186,858,915). Each ordinary share is
fully paid, carries one voting right and ranks equally for ordinary dividends with all other shareholders.
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Issued and fully paid ordinary shares
Opening balance 127.1 127.1 127.1 127.1
Total issued capital at end of financial year 127.1 127.1 127.1 127.1

Note 30 – Reserves
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Capital profits reserve 0.5 0.5 0.5 0.5
General reserve 2.0 2.0 2.0 2.0
Fair Value through OCI reserve 3.3 3.2 3.3 3.2
Adjustment on dilution of 86 400 13.3 -
Reserve for credit losses 2.6 2.5 2.5 2.5
Total reserves 21.7 8.2 8.3 8.2
Fair Value through OCI reserve

Balance at beginning of financial year 3.2 2.2 3.2 2.2
Unrealised gains and losses on financial instruments
recognised in reserve (net of income tax) 0.1 1.0 0.1 1.0
Unrealised gain on dilution of 86 400

Balance at beginning of financial year - - - -
Unrealised gain on dlution of 86 400 13.3 - - -
Balance at end of financial year 13.3 - - -
Note 31 – Retained earnings
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Balance at beginning of financial year 120.5 103.0 134.7 106.4
Profit for the year attributable to the owners of Cuscal 3.3 22.2 24.1 33.0
Transfer to reserves (0.1) - - -
Dividends paid (12.4) (4.7) (12.4) (4.7)

Note 32 – Dividends paid
2020 2019
Cents per Total Cents per Total
Share $m Share $m
Dividends paid from retained earnings
Fully paid ordinary shares
Final dividend, franked to 30% 5.0 9.4 - -
Interim dividend – franked to 30% 1.6 3.0 2.5 4.7
Total dividends paid 6.6 12.4 2.5 4.7
Dividend franking account
Adjusted franking account balance (tax paid basis) 44.2 48.7
Note 33 – Non Controlling Interests (“NCI”)

The below table summarises financial information for 86 400 Group that has non-controlling interests that are
material to the Consolidated Entity. The amounts disclosed are before inter-company eliminations.
86 400
86 400 Group 2020 2019
$m $m
Summarised Statement of Financial Position
Total assets 371.3 23.9
Total liabilities (321.6) (8.8)
Net assets 49.7 15.1
Accumulated NCI 14.9 -
86 400
86 400 Group 2020 2019
$m $m
Summarised statement of Profit & Loss
Net Operating Income (3.1) (0.4)
Operating Expenses (26.4) (15.2)
Tax benefit 7.2 4.7
Loss for the year (22.3) (10.9)
Total comprehensive income (22.3) (10.9)
Loss allocated to NCI (2.8) -

Note 33 – Non Controlling Interests (“NCI”), continued
86 400
86 400 Holdings Ltd 2020 2019
$m $m
Summarised cash flows
Cash flows from operating activities 251.9 (17.2)
Cash flows from investing activities (276.3) -
Cash flows from financing activities 57.0 17.0
Net increase/(decrease) in cash and cash equivalents 32.6 (0.2)
Cash and cash equivalents at the beginning of year 2.5 2.7
Net increase/(decrease) in cash and cash equivalents 35.1 2.5
In February 2020, 86 400 Holdings Ltd completed its first planned external capital raising, which provided
$31.0 million of outside capital (net of issuance costs), which resulted in Cuscal diluting its interest in 86 400
Holdings Ltd from 100% to 70%.
The effect on the equity attributable to the owners of Cuscal Limited during the year is summarised below:
Consolidated Entity
2020 2019
$m $m
Consideration paid by NCI (net of issuance costs) 31.0 -
Less: Excess consideration paid recognised in reserves (13.3)
Carrying amount acquired by NCI 17.7 -
Less: Losses attributed to NCI (2.8) -
Non-controlling interests at 30 June 14.9 -
There were no other transactions with non-controlling interests in the current and prior comparable periods.

Risk
Note 34 – Capital risk management
Unless otherwise specified, the disclosures in this note and Note 35 are in respect of the Consolidated Entity.
The Consolidated Entity’s capital management strategy is to maximise shareholder value through the efficient
and effective use of its capital resources, within its comprehensive risk management framework.
The Consolidated Entity’s capital management objectives are:
 To ensure sufficient capital is maintained to exceed externally imposed prudential requirements;
 To ensure sufficient capital is maintained above the amounts determined under Cuscal’s Internal Capital
Adequacy Assessment Policy to support internal business and operational capital needs; and
 To ensure appropriate credit ratings are maintained.
Within the Consolidated Entity, both Cuscal Limited and 86 400 Ltd are Authorised Deposit-taking Institutions
(“ADIs”) and as such are subject to regulation by the Australia Prudential Regulation Authority (“APRA”).
All ADIs are subject to minimum capital requirements imposed by APRA. Under the definitions of the specific
regulations, the ADI in the case of the Consolidated Entity consists of Cuscal Limited and all subsidiaries,
including 86 400 Group, but excluding the Integrity Series 2014-1 Trust. The Consolidated Entity also reports to
APRA at the individual ADI level – Cuscal Limited and 86 400 Limited - and at the 86 400 Group level. APRA
requires that each reporting entity maintain a minimum ratio of capital to risk-weighted assets.
The Consolidated Entity’s Internal Capital Adequacy Assessment Policy (“ICAAP”) set by the Board requires
Cuscal ADI to maintain a minimum level of capital at the higher of:
 The level determined under the Consolidated Entity’s Economic Capital Model; or
 At a pre-determined level above the APRA regulatory required level.
In addition, the Board has set an internal “Capital Reporting Limit” above the ICAAP Capital Limit. In the event
this limit is breached Management is required to provide the Board and Board Risk Committee with an updated
capital plan, within 14 days which would clearly articulate the steps to be taken and the timeframe involved in
those steps that would ensure:
 Firstly, that the capital did not fall below the internal limit, and
 Secondly, over time, the restoration of capital above the limit.
The levels set under the ICAAP are monitored regularly by senior executive management and by the Board Risk
Committee.
The Consolidated Entity has operated with levels of capital above the limits set under the ICAAP and by APRA
during the current financial year.

Note 35 - Financial risk management

Cuscal Group (All entities other than 86 400 Group and the Securitisation Trust)
The Group’s Treasury undertakes activities in wholesale markets, borrowing and lending funds and the
management of the Consolidated Entity’s capital in accordance with the capital management plan approved by
the Board.
The Group’s Treasury has the ability to deal in a wide variety of financial instruments, including derivative
financial instruments, in accordance with detailed policies approved by the Board. These policies reflect the
conservative risk position adopted by the Board and are primarily directed at ensuring the safety and security
of the client deposits held by Cuscal Group.
The activities of Cuscal’s Treasury are subject to ongoing monitoring by Cuscal’s Risk Management Division,
which in addition to designing Cuscal’s risk management framework, acts as an independent risk assessor for
treasury activities:
 Market risk;
 Credit risk;
 Liquidity risk; and
 Operational risk.
The Risk Management Division presents regular reports to the Board Risk and Board Audit Committees.
As ADI’s regulated by APRA, both Cuscal and 86 400 are required to operate within policies and limits set by
APRA as well as providing ongoing reporting, especially in respect of financial instruments, to APRA.
Securitisation Trust
The Integrity Series 2014-1 Trust (hereafter “the Trust”) is a closed term debt issuance structure which has
issued Residential Mortgage Backed Securities (“RMBS”) Notes to investors via a private placement (refer Notes
13 & 40). The Trust has not entered into any derivative financial transactions.
The documentation of the Trust sets out the detailed requirements to be met in respect of the loans and
borrowings made, security arrangements in respect of loans and borrowings, the placement of surplus funds,
the frequency and order of priority of distributions to be made, and the reporting requirements.
The Trust Manager executes the requirements of the Trust documentation, and is a non-related entity of Cuscal
Group. Integris Securitisation Services Pty Limited, a subsidiary of Cuscal, acts as Master Servicer to the Trust.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in Note 1.
Investment securities bought and sold in the ordinary course of the Treasury management business and sales
of financial assets and liabilities are accounted for on a trade date basis, irrespective of settlement terms
(typically 1-3 days).

Note 35 - Financial risk management, continued

Foreign currency risk management
Cuscal undertakes limited foreign currency activities which are primarily related to expenses incurred in foreign
currency and hedging thereof.
All foreign currency transactions, other than hedging transactions, during the financial year are brought to
account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at
reporting date are translated at the exchange rate existing at reporting date.
Exchange differences are recognised in profit or loss except for transactions subject to hedge accounting and
equity instruments classified as Fair Value through OCI. In the latter case, the gain or loss is taken through the
Foreign Currency Translation Reserve, in the period in which they arise except for exchange differences on
transactions entered into in order to hedge certain foreign currency risks.
Derivative financial instruments
Derivative instruments are contracts whose value is derived from one or more underlying financial instruments
or indices. They include interest rate swaps, forward rate contracts, futures, options and combinations of these
instruments.
The Consolidated Entity may use derivatives in its management of interest rate risk and/or in its management
of foreign currency risk. All dealing in derivatives is subject to approved Board policies and monitoring by Risk
Management.
Market risk
Cuscal and 86 400
Market risk is defined as the risk of loss owing to changes in the general level of market prices. This includes
the following:
 Interest rate risk, the risk of loss due to changes in interest rates, arises from the management of Cuscal’s
liquidity portfolio. Funds are raised from clients and invested in highly liquid assets. The mismatch between
repricing terms for the funds raised and investments in liquid assets gives rise to interest rate risk. Cuscal’s
sensitivity to interest rate movement is largely immaterial as the majority of assets and liabilities are either
short term or in instruments where the interest rate resets every 3 months;
 Specific issuer risk, the risk of loss due to shifts in credit spreads, arises from the investment of funds in
assets, that while highly liquid, whose valuation can move relative to general market conditions;
 Foreign exchange risk, the risk of loss due to movements in foreign exchange rates, arises from supply
contracts that are denominated in foreign currency. The variance between budgeted and hedge exposures
is monitored on a monthly basis;
 Equity price risk, arises from exposure to investment in unconsolidated entities. In each case, the total
investment is approved directly by the Board. The details of these investments are described in Note 17;
 Commodity price risk, the risk of loss due to movement in commodity prices. Cuscal has no exposure to
commodity prices.
Cuscal market risk exposure is managed under the Treasury Risk Management Policy, which is reviewed by the
Board each year. The Policy requires that risks are prudently managed and monitored, using a range of
techniques such as sensitivity analysis, concentration analysis and stress testing.
Interest rate risk is managed principally through monitoring interest rate gaps, and by having pre-approved
limits for re-pricing bands. The main tools to measure and control interest rate risk exposure within the
Consolidated Entity’s interest earning assets and liabilities are:
 Net Interest Earnings at Risk (“NIER”) - NIER is the worst-case change in earnings due a 100bps parallel
shock in interest rates over a 12-month time horizon.


Market risk, continued
 Present Value of a Basis Point (“PVBP”) - Dollar impact of a 1 basis point movement in the yield curve.
The sensitivity analysis on interest rate risk is performed using the methodology of GAP IRR. The GAP IRR
methodology is a method of measuring interest rate sensitivity by classifying interest rate sensitive assets,
liabilities and off-balance sheet items. The instruments are split into specific pre-defined time buckets according
to their maturity for fixed rate instruments, or till next re-pricing date for variable rate instruments. The size of
the gap position can then be determined in each of the respective time buckets. A cumulative gap can also then
be given after summing up the individual time bucket gaps.
Result of the sensitivity analysis on a 50 bps movement is as follows:
86 400 Group
2020 2019
$m $m
Cuscal -
Increase in yield curve of 50 bps (1.0)
Decrease in yield curve of 50 bps 1.0
86 400
Increase in yield curve of 50 bps (0.2)
Decrease in yield curve of 50 bps 0.2 -
Credit risk
(a) Cuscal
Credit risk is defined as the risk of economic loss where Cuscal is exposed to adverse changes in the financial
standing of the borrower or a trading counterparty.
Under Board approved policies, the Board Risk Committee reviews and endorses credit exposures, policies and
practices, with large exposures requiring approval by the Board.
Each counterparty has an assigned total exposure limit, both individually and as a group. The limit comprises all
exposures including settlements, cash, loans, trading securities held and guarantees. In order to assess the
credit exposure of Cuscal’s financial portfolio, a series of stress tests are also conducted. These stress tests
focus on subjecting individual and portfolio exposures to a range of credit shocks including rating downgrades
and credit spread movements. Qualitative and quantitative analysis of financial information are also important
factors used in determining the financial state of a counterparty.
Overdraft exposures are managed and monitored through facility limits for individual counterparties and a
credit review process. Cuscal relies on collateral security typically in the form of cash security deposits and a
right of offset.
The maximum credit exposure in respect of committed loan facilities is shown in Note 13.
Cuscal’s loans are reviewed for impairment in accordance with the accounting policy in Note 1. Refer Note 13
for information on loan impairment, if any.

Credit risk, continued
(a) Cuscal, continued
Among the factors that mitigate against impairment of Cuscal’s credit exposure are:
 The strong and on-going monitoring of borrowers,
 The relatively strong security position of Cuscal, with clients secured by cash deposits with rights of offset,
and
 The majority of Cuscal’s clients are themselves Approved Deposit-taking Institutions, subject to regulation
by APRA.
Quantitative analysis is supported by the regular statistical generation of expected and unexpected loss
modelling on an individual and portfolio basis.
The COVID-19 pandemic environment resulted in a more frequent periodic credit review of our clients as per
credit policies, based on information provided by our clients as well as relevant settlement information. Where
appropriate, ratings of our clients have been downgraded to reflect the COVID-19 impacts. Credit policy has
also been updated to increase security requirement for the higher risk clients.
(b) 86 400
The Board of Directors of 86 400 has delegated responsibility for the day-to-day management of credit risk to
the Credit Team, Collections Team and Executive Risk Management Committee.
Credit risk is managed principally through embedded controls in the loans origination process. Lending is
carried out within the parameters of lending policies (covering approvals, documentation and management). In
the case of the 86 400 Group, where the past loss experience is measurable within the bank’s existing database
for only a 12 month period or less, wider experience from other financial institutions detailed in published
material such as from APRA has been considered. However, the small number of borrowers to date also permits
the application of the principles on an individual loan basis where the borrowers of higher risk of default are
identified based on set criteria.
To maintain the quality of the lending portfolio, prudential standards have been followed and lending policies
have been established.
Credit processes are typically structured so that loan origination, approval, document preparation, settlement
and account monitoring and control are segregated to different individuals or areas. Credit must be evaluated
against established credit policies and be structured, particularly in terms of security, to be prudent for the risk
incurred. The Credit Team assesses credit beyond the lending authorities of lending groups and/or outside
normal policies and guidelines. The Risk Management Team regularly reviews credit quality, arrears, and
expected credit losses, and reports to the 86 400 Board of Directors.
Risk and Internal Audit personnel regularly test internal controls and adherence to credit policies and
procedures. The 86 400 Group applies standard credit risk assessment criteria to all extensions of credit, from
credit scoring systems for basic retail products to complete credit assessment for commercial and business
loans.
The quantification of credit risk is performed by analytical tools and models, which provide estimates of
expected credit losses.
86 400 Management regularly reports to the 86 400 Board of Directors on arrears (if any), portfolio composition
and stress testing, all approvals with an exception to policy, and all staff loans.

(b) 86 400, continued
Counterparty risk for investments in financial instruments is generally limited to Australian-owned banks, APRA
regulated foreign subsidiary banks and other APRA-regulated ADIs.
(c) Securitisation Trust
No new loans have been originated into the Securitisation Trust since its creation in 2014. All residential
mortgages were subject to lending criteria determined at the time of origination by the Master Servicer, a
Cuscal subsidiary.
While COVID-19 will impact some of the Trust borrowers, who may seek additional redraws and/or principal and
interest deferrals, it will not change the structure of the Trust, and accordingly will not change the party who
will ultimately bear any credit loss – the note holders.
All loans in the Trust are covered by Lenders’ Mortgage Insurance (“LMI”) and LMI providers have provided
blanket approvals for lenders to provide principal and interest deferrals for borrowers affected by COVID-19,
without individual prior approval. As Master Servicer, Integris Securitisation Services is acting in accordance
with these approvals.
In the event of losses being incurred on Trust loans; the chain of recovery (in order) is:
1. The LMI provider;
2. If LMI fails, Cuscal as the residual income unit holder, but only to the extent of any amount undistributed
by the Trust;
3. Integris Securitisation Services (as Master Servicer) would not receive its Margin Entitlement and then its
Master Servicer Fee;
4. The Extraordinary Expenses Reserve. This is an amount contributed by Cuscal; and
5. Finally, the Note Holders.
Accordingly, in the event of losses in the Trust and the total failure of LMI cover, the amount that Cuscal can
lose is immaterial and is limited to a $0.1m extraordinary expense reserve and fees for services and
distributions.
At 30 June 2020, no provision for impairment is carried in respect of the residential mortgages in the Trust.

Credit risk concentrations - Risk concentration: portfolio, by economic sector
Consolidated
2020 2019
% %
Financial Assets
Financial Institutions 74.1 93.9
Government, Semi-Government and supranationals 20.2 -
Residential Mortgages 5.7 6.1
Total credit risk concentration 92.8 92.8
Maximum credit risk exposure
Consolidated
2020 2019
$m $m
Financial Assets
Cash and cash equivalents 602.1 796.7
Receivables due from financial institutions 114.4 146.9
Securities 1,552.2 1,141.2
Loans 30.6 1.6
Loans by the Securitisation Trust 106.4 135.4
Derivative financial assets - 0.1
Total financial assets 2,405.7 2,221.9
Off-Balance sheet
Undrawn facilities (including 86 400) 184.6 174.3
Total maximum credit risk exposure 2,590.3 2,396.2
Liquidity risk
(a) Cuscal
The liquidity management policy of Cuscal is approved by the Board and agreed with APRA. Cuscal manages
liquidity risk by continuously monitoring the time to liquidate and cost to liquidate its financial assets to meet
any unexpected calls on liquidity and APRA prudential standards. The cost of immediate liquidity also includes
analysis of the amount of funds immediately available from entering repurchase agreements with the Reserve
Bank of Australia for eligible securities. These factors are tested against policy limits daily. In addition, these
factors are subject to stress testing on a regular basis.

Liquidity risk, continued

(a) Cuscal, continued
Cuscal’s Liquidity Policy requires that client funds are held in highly liquid assets, which are available at call or
via repo with the Reserve Bank of Australia (repo eligible securities). Given the uncertainty regarding the
impact of the pandemic on credit ratings and valuations additional highly rated issuers of repo eligible securities
have been added to the panel of available issuers to diversify Cuscal’s investment profile. In addition, Cuscal
has tested its capability to realise the value of investments in securities via repurchase with financial
institutions.
The pandemic has resulted in a large increase in client balances held with Cuscal, which have been deployed
into highly liquid assets in accordance with the policy. The pandemic has also caused large shifts in the value of
investments. Additional daily reporting, including realistic scenarios of potential adverse valuation movements
due to credit downgrades, have been instituted to ensure that there is no adverse impact on Cuscal’s capital
adequacy.
Cuscal is not dependent on debt to fund its investment in the payment’s business and investment in 86 400.
Cuscal’s commitment to settle on behalf of clients is funded from individual client’s deposits with Cuscal or pre-
arranged overdrafts which are secured against cash deposits.
(b) 86 400
The 86 400 Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its obligations when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the 86 400 Group’s reputation. The 86 400 Group has an
overdraft facility with which it can access emergency liquidity through an RBA repo facility in place to assist in
adequately managing liquidity.
The 86 400 Group’s Risk Management Team assists with the oversight of asset and liability management –
including liquidity risk management. The 86 400 Group’s liquidity policies are approved by the Board of
Directors, after endorsement by the Risk Management Team and the Board Risk Committee. Liquidity standards
which are set and approved by the 86 400 Board ensure that at a minimum the APRA standards are sufficiently
met.
Liquidity positions are monitored daily, and monthly stress testing occurs to measure the 86 400 Group’s
capacity to withstand accelerated deterioration of liquidity. Frameworks have been set and approved by the 86
400 Board in relation to liquidity allocations and early warning indicators, which are designed to ensure
sufficient escalation channels are available with appropriate timeframes to respond to liquidity movement.
(c) Securitisation Trust
Cash received by the Trust from interest and principal repayments of residential mortgages is applied in the
order of priority set out in the Trust documentation. The outflow of cash from the Trust is generally limited to
distribution of the cash received. The Trust maintains a liquidity facility.
The Trust is a closed term debt issuance, into which no new loans can be originated. The Trust is funded by the
issue of Notes to investors backed by a liquidity facility that, subject to the conditions of the facility being met,
will provide the Trust with funding should it be necessary.

(d) Contractual undiscounted cash flows of financial liabilities
Maturity Profiles
The tables below detail the maturity distribution of certain financial liabilities on an undiscounted basis.
Maturities represent the remaining contractual period from the balance date to the repayment date.
The maturity profile for Borrowings of the Securitisation Trust in the current and prior reporting periods is based
upon the expected run-off of the Trust mortgage assets, which is different to contractual maturity.
3 No Total
months 3-12 1-5 Over 5 maturity Contractual
At call or less months years years specified cash flows
Consolidated $m $m $m $m $m $m $m
30 June 2020
Payables due to financial
56.9 - - - - - 56.9
institutions
Client deposits 786.2 922.8 - - - - 1,709.0
Securities sold under
- 144.7 - - - - 144.7
agreement to repurchase
Discount securities issued - 52.0 10.4 - - - 62.4
Borrowings of the
- 6.8 18.0 89.0 - - 113.8
Lease liabilities - 0.2 0.5 2.7 - - 3.4
Derivative financial liability - 0.2 - - - - 0.2
Liability to prepaid cardholders 104.2 - - - - - 104.2

Loans approved but not
8.7 - - - - - 8.7
advanced - 86 400
Total undiscounted cash
956.0 1,126.7 28.9 91.7 - - 2,203.3
flows
30 June 2019
51.5 - - - - - 51.5
institutions
Client deposits 422.6 1,033.3 - - - - 1,455.9
- 140.9 - - - - 140.9
Liability to prepaid cardholders 138.5 - - - - - 138.5

Borrowings of the
- 8.9 23.8 114.7 - - 147.4
612.6 1,260.1 58.8 114.7 - - 2,046.2
flows


3 No Total
months 3-12 1-5 Over 5 maturity Contractual
At call or less months years years specified cash flows
Cuscal $m $m $m $m $m $m $m
30 June 2020
56.9 - - - - - 56.9
institutions
Client deposits 476.5 922.5 - - - - 1,399.0
- 144.7 - - - - 144.7
Liability to prepaid
104.2 - - - - - 104.2
cardholders
Derivative financial liability - 0.2 - - - - 0.2
637.6 1,119.4 10.4 - - - 1,767.4
flows
30 June 2019
51.5 - - - - - 51.5
institutions
Client deposits 425.5 1,034.3 - - - - 1,459.8
- 140.9 - - - - 140.9
Liability to prepaid
138.5 - - - - - 138.5
cardholders
615.5 1,252.2 35.0 - - - 1,902.7
flows
Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique.
Fair value reflects the present value of future cash flows associated with a financial asset or financial liability.
Fair values of financial assets and liabilities are determined using quoted market prices, where available. Market
prices are obtained from independent market vendors, brokers, or market makers. Where no active market
price or rate is available, fair values are estimated using present value or other valuation techniques, using
inputs based on market conditions prevailing at balance dates.
The following methods and significant assumptions have been applied in determining the fair values of financial
assets and liabilities carried at fair value, and, for disclosure purposes, in determining whether a material
difference between the fair value and the carrying amount exists.
Cash and cash equivalents

The carrying amount of cash and cash equivalents is an approximation of fair value as they are short term in
nature or are receivable on demand.

Fair value, continued
Receivables due from financial institutions
The carrying amount of receivables due from financial institutions is an approximation of fair value as they are
short term in nature or are receivable on demand.
Securities
Security-specific yields and prices are used for all positions where possible. Where applicable, security
revaluations are conducted using standard market formulae and conventions.
Other positions are valued using a yield curve that best reflects the issuer and credit risk of the instrument.
All assets and liabilities, except for futures contracts and interest rate swaps, are valued at the most
conservative of bid and offer rates. In keeping with market convention, futures contracts are valued at the
settlement price.
Loans and loans made by the securitisation trust
For variable rate loans in the Trust, the carrying amount is an approximation of fair value.
For 86 400 loans, the carrying value of loans and advances is net of specific provisions for impairment (if any).
For variable loans and loans with rates fixed for a period less than six months, the carrying amount is a
reasonable estimate of net fair value. The fair value of fixed rate loans greater than six months was calculated
by discounting the future interest cash flows using a discount rate based on the current market rate, assuming
constant interest rate spreads, for the average remaining term.
Derivative financial assets and liabilities
The fair value of swaps is calculated by utilising discounted cash flow models, based on the estimated future
cash flows.
The fair value of forward foreign contracts is calculated on the foreign rates prevailing at the balance date.
Payables due to financial institutions
The carrying amount of payables due to financial institutions is an approximation of fair value as they are short
term in nature or are payable on demand.
Deposits
For variable rate deposits the carrying amount is an approximation of fair value.
Discount securities issued
Discount securities were revalued using a yield curve that represents Cuscal’s credit risk.
Borrowings of the Securitisation Trust
The carrying amount of Borrowings of the Securitisation Trust is an approximation of fair value. The interest
rate reset dates are short term.

Methods applied in determining fair values of financial assets and liabilities
Level 1 – Reference to published price quotations in active markets
This category includes financial instruments whose fair value is determined directly by reference to published
quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted prices
are readily available from an exchange, dealer, broker, industry group, pricing service or regulatory agency,
and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
Level 2 – Valuation techniques supported by market inputs
This category includes financial instruments whose fair value is determined using a valuation technique
(model), where inputs in the model are taken from an active market or are market observable. If certain inputs
in the model are not market observable, but all significant inputs are, the instrument is still classified in this
category, provided that the impact of those elements on the overall valuation is insignificant.
Included in this category are items whose value is derived from quoted prices of similar instruments, but for
which the prices are (more than insignificantly) modified based on other market observable external data.
Level 3 – Valuation technique not supported by market inputs
This category includes financial assets and liabilities whose fair value is determined using a valuation technique
(model) for which more than an insignificant level of input in terms of the overall valuation are not market
observable. This category also includes financial assets and liabilities whose fair value is determined by
reference to price quotes but for which the market is considered inactive.
The following table presents the estimated fair values of the Consolidated Entity’s financial assets and liabilities
held at fair value, by fair value hierarchy. Certain items from the Statement of Financial Position are not
included, as they do not meet the definition of a financial asset or liability. The aggregation of the fair values
presented below does not represent and should not be construed as representing the underlying value of the
Consolidated Entity.
Consolidated - 30 June 2020 Level 1 Level 2 Level 3 Total

$m $m $m $m
Financial Instruments – assets
Investments - - 4.1 4.1
Investment securities - 1,277.6 - 1,277.6
Total financial instruments – assets - 1,277.6 4.1 1,281.7
Level 1 Level 2 Level 3 Total

Consolidated - 30 June 2019 $m $m $m $m
Financial Instruments – assets
Investments - - 4.0 4.0
Investment securities - 1,141.2 - 1,141.2
Derivative financial asset - 0.1 - 0.1
Total financial instruments – assets - 1,141.3 4.0 1,145.3

The estimated fair values correspond with amounts at which the financial instruments at the Consolidated
Entity’s best estimate could have been traded at the balance date between knowledgeable, willing parties in
arms-length transactions.
Expected Credit Losses (“ECL”)
At the reporting date the Consolidated Entity has presented the ECL allowances in its statement of financial
position as follows:
 For financial assets measured at amortised cost – a deduction against the gross carrying amount;
 For financial assets measured at fair value through other comprehensive income – a deduction against the
revaluation reserve in other comprehensive income;
The approach to ECL is outlined in Note 1 (oo).
The table below presents the gross exposure and related ECL allowance for assets measured at amortised cost
or FVOCI and off-Balance Sheet exposures subjected to impairment requirements of AASB 9.
Gross exposure for Financial ECL allowance on Financial assets

asset carried at1 carried at
Amortised Total Amortised Total ECL
cost FVOCI exposure cost FVOCI allowance
Consolidated $m $m $m $m $m
30 June 2020
Cash 602.1 - 602.1 - - -
Receivables due from FIs 114.4 - 114.4 - - -
Investment securities 274.6 1,278.1 1,552.7 - 0.5 0.5
Loans 30.7 - 30.7 0.1 - 0.1
Loans made by the Securitisation
Trust 106.4 - 106.4 - - -
Other assets (Trade debtors) 3.8 - 3.8 0.1 - 0.1
Undrawn commitments 184.6 - 184.6 - - -
Total 1,316.6 1,278.1 2,594.7 0.2 0.5 0.7
30 June 2019
Cash 796.7 - 796.7 - - -
Receivables due from FIs 146.9 - 146.9 - - -
Investment securities - 1,141.6 1,141.6 - 0.4 0.4
Loans 1.6 - 1.6 - - -
Loans made by the Securitisation
Trust 135.4 - 135.4 - - -
Trade debtors 4.2 - 4.2 - - -
Undrawn commitments 174.3 - 174.3 - - -
Total 1,259.1 1,141.6 2,400.7 - 0.4 0.4

Unrecognised Items
Note 36 - Assets pledged as collateral
Securities
Investment Securities of $167.6 million (2019: $162.8 million) have been pledged to the Reserve Bank of
Australia as collateral for the liability for Securities sold under agreement to repurchase in Note 24.
Note 37 – Capital Commitments and contingencies
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Commitment and contingencies

IT capital expenditure commitments not longer than 1
year 8.1 1.2 1.0 1.2
Lease commitments not longer than 1 year 4.5 4.5
Lease commitments longer than 1 year 19.9 19.9
Total commitments and contingencies 32.5 1.2 25.4 1.2
Lease commitments on 35 Clarence Street (relating to 86 400) are not recognised above as they have been
recognised as a right-of-use asset and lease liability. Refer notes 19, 27 and 38.
Note 38 - Leases
This note provides information for leases where the Consolidated Entity is a lessee.
For all of the Consolidated Entity’s lease arrangement as a lessee:
 The lease agreements do not impose any covenants other than those normally found in commercial office
lease arrangements; and
 There are no future cash outflows to which the Consolidated Entity is potentially exposed which are not
reflected in the measurement of Lease Liabilities.
Nature of leases
The Consolidated Entity leases premises, namely its head office at 1 Margaret Street Sydney and its subsidiary
office at 35 Clarence Street Sydney. Rental contracts are typically made for fixed period of 5 years, but may
have extension options. Both contracts contain lease components and the Consolidated Entity allocates the
considerations in the contract to the leases based on their relative stand-alone prices. Lease terms are
negotiated on an individual basis and contain a wide range of different terms and conditions. Leased assets
cannot be used a security for borrowing purposes.
Until the 2019 financial year, leases of property were classified as operating leases. From 1 July 2019, in
accordance with the requirements of AASB 16 Leases, leases are recognised as a right-of-use asset and a
corresponding liability at the date on which the lease asset is available for use by the Consolidated Entity.
The lease payments are discounted using the interest rate implicit in the lease. The discount rate used to
calculate the lease payments is 3.20% for Margaret Street, 4.8% for Clarence Street.
The Consolidated Entity is exposed to potential future increases based on an index or rate, which are not
included in the lease liability until they take effect. When adjustments to lease payments based on an index
rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

Note 38 – Leases, continued
The Statement of Financial Position shows following amounts relating to leases, all relating to the 35 Clarence
Street lease for the year ending 30 June 2020:
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Right-of-use assets
Buildings 3.1 - - -
Total Right-of-use assets 3.1 - - -
Lease Liabilities
Current 0.5 - - -
Non-current 2.4 - - -
Total Lease liabilities 2.9 - - -
Additions to the right-of-use assets (excluding depreciation) during the 2020 financial year was $3.2 million
(2019: $Nil).
The Consolidated Entity has elected not to recognise right-of-use assets and lease liabilities for leases of low-
value assets and short-term leases, including leases of IT equipment. The Consolidated Entity recognises the
lease payments associated with these leases as an expense on a straight-line basis over the lease term.
The Statement of Profit & Loss shows following amounts relating to leases:
Consolidated Cuscal
2020 2019 2020 2019
$m $m $m $m
Profit and Loss impact relating to Leases

Depreciation charge on Property leases 0.1 - - -
Interest expense on Property Lease ROU assets - - - -

Expense relating to short-term leases (included in
4.6 4.2 4.0 4.0
Occupancy expenses)
Total Profit and Loss impact relating to leases 4.7 4.2 4.0 4.0
Upon adoption of AASB 16 on 1 July 2019, the existing leases relating to Margaret Street and York Street
premises, which were due to expire within 12 months, were treated as short-term leases for the 2020 year in
accordance with AASB 16.
The total cash outflow for leases for the year ending 30 June 2020 was $5.4 million (2019: $5.2 million). Total
cash outflow for the year ending 30 June 2020 of $5.4 million includes $0.1 million (2019: $Nil) reduction in
principal portion of lease liability relating to 35 Clarence Street.

Note 39 - Credit facilities
Consolidated
2020 2019
$m $m
(a) Committed financing activities that are available to Cuscal are as follows:
i) Bank overdraft 7.0 7.0
ii) Within the day accommodation 100.0 100.0

iii) Encashment negotiation advice, payroll delivery services, and corporate
193.0 193.0
purchasing card
iv) Bank guarantee 9.5 9.5
v) Overseas bills purchased from credit unions pending clearance of funds 2.5 2.5
vi) Purchasing card facility 1.0 1.0

(b) Committed financing facility available to the Securitisation Trust is as
follows:
i) Asset Liquidity 1.9 2.5
As at 30 June 2020, $6.1 million (2019: $6.4 million) of the bank guarantee facility was utilised and $Nil (2019:
$0.2 million) of purchasing card facility limit was utilised. The remaining credit facilities were unused at balance
date.
As at 30 June 2020, $Nil of the asset liquidity facility was utilised (2019: $Nil). This facility is only available to
the Trust in accordance with the contractual arrangements of the Trust. Neither Cuscal, nor any of its
subsidiaries are able to access this facility.
As at 30 June 2020 neither Cuscal nor any of the Consolidated Entity provided financing facilities to the Trust
(2019: $Nil).
Note 40 - Subsequent events

On July 1 2020, Cuscal began a new lease agreement of its 1 Margaret Street premises. In accordance with
AASB 16, at that date Cuscal recognised a right of use asset, and corresponding lease liability, of $22.5 million.
In addition, for APRA regulatory capital purposes, this adoption reduces Cuscal’s Level 2 Capital Adequacy ratio
by approximately 0.5%.
The impact of this event is not reflected in the 2020 Annual Report.
There has not been any matter or circumstance that has arisen since the end of the financial year, that has
significantly affected, or may significantly affect, the operations of Cuscal or the Consolidated Entity, the results
of those operations, or the state of affairs of Cuscal or the Consolidated Entity in future financial years.

Other Information
Note 41 - Particulars in relation to controlled entities
Controlled entities
The consolidated financial statements incorporate the financial statements of Cuscal and entities (including
structured entities) controlled by Cuscal and its subsidiaries.
The ’86 400 Group’ comprises 86 400 Holdings Limited, 86 400 Technology Pty Limited and 86 400 Limited.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between
members of the Consolidated Entity are eliminated in full on consolidation.
Interest Held
Class of 2020 2019
Share % %
Parent Entity
Cuscal Limited
Controlled entities(i)
CUSCAL Management Pty Limited Ord 100 100
Integris Securitisation Services Pty Limited Ord 100 100
Votraint No. 1451 Pty Limited Ord 100 100
Strategic Payments Services Pty Ltd (“SPS”) Ord 100 100
86 400 Holdings Limited (formerly 86 400 Holdings Pty Limited) Ord 70 100
86 400 Technology Pty Limited(ii) Ord 100 100

86 400 Limited (ii)
(formally 86 400 Pty Limited) Ord 100 100
(i) All controlled entities are incorporated in Australia.
(ii) Controlled entities of 86 400 Holdings Limited.
The entities listed above are proprietary limited as defined by the Corporations Act 2001, with the exception of
86 400 Holdings Limited and 86 400 Limited. All entities are incorporated and have principal place of business
in Australia. Votraint No. 1451 Pty Limited is a non-trading entity.
Cuscal Limited and 86 400 Limited are regulated by APRA as Deposit-taking Institutions and 86 400 Holdings
Limited is regulated by APRA as a non-operating holding company. Accordingly, these entities are limited by
APRA Prudential Standard APS 222 Associations with Related Entities as to the scope and size of exposures they
may have to one another and to the other controlled entities listed above.
Key changes to controlled entities during the 30 June 2020 financial year and up to the date of this report:
 On 1 July 2019, Cuscal contributed an additional $24.0 million in 86 400 Holdings Ltd.
 On 18 July 2019, 86 400 Limited was granted a licence to operate as an authorised deposit-taking
institution (“ADI”) by APRA under the Banking Act 1959. It launched mortgage and home loan products
thereafter.
 In February 2020, Cuscal further contributed an additional $2.0 million in 86 400 Holdings Ltd.
 In February 2020, 86 400 Holdings Ltd completed the 1st tranche of its planned external capital raising
program. The first tranche of capital raising provided $31.0 million of additional external capital (net of
issuing costs), which result in the dilution of Cuscal’s interest in 86 400 Holdings Ltd from 100% to 70%.

Note 41 - Particulars in relation to controlled entities, continued

Structured Entities included in the consolidated financial statements
The Integrity Series 2014-1 Trust (hereafter “the Trust”) commenced operations on 29 April 2014 and has been
included in the consolidated financial statements from that date. Cuscal and its subsidiaries currently carry out
the following roles in respect of the Trust:
 Integris Securitisation Services Pty Ltd (“Integris”) is the Master Servicer of the Trust, and
 Cuscal is the holder of the residual income unit of the Trust.
Accordingly, each of the above entities receives income from the Trust.
The relationships between Cuscal, its subsidiaries and the Trust are set out in detail in the Integris
Securitisation Trust Framework and in the Transaction documents applicable to the Trust. Cuscal and its
subsidiaries do not have the ability to amend the documentation governing the Securitisation Trust.
Under the above documentation, Cuscal and its subsidiaries do not have the right to access or use the assets of
the Trust. The flow of income from the Trust is dependent on the Trust having sufficient distributable income to
make payments in the order of priority set out in the documents.
All borrowings of the Trust are limited to the assets of the Trust and Cuscal and its subsidiaries have no
obligations in respect to the repayment of those borrowings. In respect of the Trust, Cuscal and its subsidiaries
carry out the roles set out above. In addition:
 Cuscal has provided $0.1 million to fund the Extraordinary Expense Reserve of the Trust, which is
repayable on final distribution date, and
 Integris has indemnified the Trustee against penalties arising in connection with the Trustee’s performance
of its duties or exercise of its powers under the Master Origination and Servicing Agreement to the extent
of $0.5 million.
As the Trust is a closed entity, the level of return the Trust will provide to Cuscal and its subsidiaries will decline
as the level of the mortgage loans in the Trust declines due to loan repayments and prepayments.
Tax Consolidation Group

All the above entities except the Integrity Series 2014-1 Trust and 86 400 Group were members of Cuscal’s tax
consolidation group for the full year.
86 400 Holdings Group ceased being a member of Cuscal’s tax consolidation group on 28 February 2020.
Note 42 - Related party disclosures

(a) Key management personnel
Details of the remuneration of Key management personnel are disclosed in Note 7.
(b) Loans to directors

As at 30 June 2020 the outstanding balance of loans to directors was $Nil (2019: $Nil).
(c) Directors’ interests in contracts

As required by the Corporations Act 2001, some Directors have given notice that they hold office in
specified credit unions, mutual banks and other companies and as such are regarded as having an
interest in any contract or proposed contract, which may be between Cuscal and its controlled entities
and those credit unions, mutual banks and companies.

Note 42 - Related party disclosures, continued

All transactions between credit unions and other companies in which a Director is an officer or a member and
Cuscal and its controlled entities are transacted in the normal course of business and on commercial terms and
conditions.
(d) Controlled entities
Cuscal’s controlled entities receive administrative support services from Cuscal. These transactions are
in the normal course of business and on commercial terms and conditions. Transactions between Cuscal
and its controlled entities include the provision of financial facilities on commercial terms and
conditions. Details of the amounts paid or received from related entities in the form of dividends,
interest, management charges and asset usage fees are set out in Notes 3, 4 and 5.
Amounts receivable from and payable to controlled entities are disclosed in Note 16 and 27.
Note 43 – Earnings per share and net assets per share
Consolidated
2020 2019
Cents Cents
Earnings per ordinary share
Basic earnings per share 0.1 11.9
Diluted earnings per share(1) 1.8 11.9
Net Assets per ordinary share

Basic net assets per ordinary share at year end $1.47 $1.37
Diluted net assets per ordinary share at year end(1) $1.39 $1.37
(1) Diluted refers to the component of the result excluding minority interests
Note 44 – 86 400 Employee Share Performance Rights Plan (“ESPRP”)

86 400 Holdings Ltd has an Employee Share Performance Rights Plan (“ESPRP”) for certain eligible employees
of the 86 400 Group. In accordance with the term of the plan, as approved by the Directors of 86 400 Holdings
Ltd, certain employees determined by the Plan Committee may be eligible to participate in the scheme. Under
the ESPRP, an eligible employee may be conferred performance rights upon meeting certain conditions as
described in the ESPRP offer documents and plan rules.
The performance right is a contractual right that entitles an eligible employee to be issued a certain number of
shares subject to the vesting and performance criteria. The number of shares that may be issued to the
employee upon exercise of the performance rights shall be determined in accordance with the offer letters
accepted by an eligible employee.
The fair value of the performance rights as at 30 June 2020 was $67,546 (2019: $60,721).
The movement of performance rights are as follows:
Consolidated
2020 2019
Number of performance rights
Opening balance 10 -
Granted 1 10
Closing balance 11 10
Exercisable as at financial year end - -

Note 44 – Employee Share Performance Rights Plan, continued

Equity-settled share-based payments to employees and others providing similar services are measured at the
fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is recognised as
expense in the profit or loss on a straight-line basis over the vesting period, based on the 86 400’s estimate of
equity instruments that will eventually vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding
adjustment to the equity-settled employee benefits reserve.
Equity-settled shared-based payment transactions with parties other than employees are measured at the fair
value of the goods or services received, except where that fair value cannot be estimated reliably, in which case
they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains
the goods or the counterparty renders the service.
Note 45 – Additional company information

Cuscal Limited is a limited company, incorporated in Australia. The parent entity and ultimate parent entity is
Cuscal Limited. The registered office and principal place of business is:
Level 2
1 Margaret Street
SYDNEY NSW 2000
The number of employees at 30 June 2020 of the Consolidated Entity is 521 (2019: 450).

Corporate
Governance
Statement
Corporate Governance Statement 2020
Contents Page
1 Approach to Governance 86
2 Roles and Responsibilities 86
3 Committees and Subsidiary Companies 91
4 External Auditor 92
5 Internal Audit 93
6 Risk Management 93
7 Communicating with Shareholders 94
8 Ethical and Responsible Behaviour 95
Corporate Governance Statement 2020 | 85

Corporate Governance Statement
1. Approach to Governance overall direction of Cuscal, strategy,

performance, compliance and policies.
This document reflects Cuscal’s governance
The Board has adopted a formal Board
framework as at 30 June 2020 and up to the
Charter that details the role, responsibilities,
date of publication of the 2020 Annual
composition, Committees, delegations,
Report.
operation and performance of the Cuscal
Board. The Board is also governed by
The Cuscal Board has responsibility for the regulation including prudential regulation,
overall governance of Cuscal, including the general law, the Banking Act, the
formation of strategic direction and policy, Corporations Act and the Cuscal Constitution.
approval of plans and goals for management, This includes accountability statements,
and the review of performance against those which have been implemented for Director
goals. The Board has established appropriate and Leadership team roles in line with the
structures for the management of Cuscal, requirements of the Banking Executive
including an overall framework of internal Accountability Regime (BEAR) as issued by
control, risk management, compliance and APRA. The BEAR legislation is intended to
ethical standards. strengthen the accountability obligations of
Australian Deposit Taking Institution (‘ADI’)
Cuscal subscribes to applicable best practice groups and their Directors and senior
governance principles and, where executives, and to impose enhanced
appropriate, is an early adopter of emerging consequences for being in breach of these
guidance and regulation on better practice obligations.
governance. The Board regularly reviews
developments in governance and updates The Board Charter is available on Cuscal’s
Cuscal’s governance practices accordingly. website.
Our governance references include Prudential

guidance, the ASX Corporate Governance
2.1 Board Responsibilities
Council’s (ASX CGC) ‘Corporate Governance
The main Board responsibilities, summarised
Principles and Recommendations’ and our
obligations to the Prudential Standards from its Charter, are:
issued by the Australian Prudential
- stakeholder interests;
Regulation Authority, CPS 510 Governance
- strategy;
(CPS 510) and CPS 220 Risk Management.
- Managing Director appointment and
Although Cuscal is not a listed entity, the performance;
- business performance and reporting;
Board is also committed to complying with
- risk management and compliance;
the ASX CGC recommendations to the extent
that they are applicable to Cuscal. - Board composition and performance;
and
- oversight of External audit.
During the period, the Board also considered
the outcomes of the ASIC report on “Director
The Cuscal Board exercises oversight of
and officer oversight of non-financial risk”
subsidiary entities as well as any dealings
and the APRA report and guidance on
between subsidiaries and Cuscal. This
governance, culture, remuneration and
presently includes oversight of 86 400, an
accountability (GCRA).
APRA licenced digital retail bank.
2. Roles and 86 400 is subject to its own banking license

obligations, including its own Board and
Responsibilities associated governance. 86 400 is majority
owned by Cuscal, therefore Cuscal has
The role of the Board is to provide strategic implemented a Governance model that
guidance for Cuscal and effective oversight of strikes an appropriate balance of information
management. The Directors represent the flow and enquiry between the respective
interests of shareholders and other Boards and (where relevant) across the
stakeholders and are responsible for the Leadership teams, to meet prudential, legal

and governance standards.

The skills and experience profiles of Board
2.2 Delegations of Board Authority members can be found on the Cuscal
website.
The Board has delegated to the Managing
Director the authority to manage the 2.4 Independence
operations of the Cuscal group, subject to
specific delegations and limits approved by Under CPS 510, an independent Director is a
the Board. The Managing Director can non-executive Director who is free from any
delegate authority to any other officer or business or other association with Cuscal.
employee of Cuscal (or committees
comprised of such officers or employees) A Director is not considered independent if
subject to the conditions and restrictions in they:
the applicable delegation instrument. - are an officer or Director of a
substantial shareholder (i.e. 5% or
The Managing Director regularly consults more shareholding), or otherwise
with the Chairman on matters generally as associated directly or indirectly
they arise, and is responsible for: with, a substantial shareholder of
- developing, with the Board, long-term Cuscal;
objectives and strategic plans and - have, within the last three years,
initiatives, performance measures and been employed in an executive
policies; capacity by the Cuscal group;
- ensuring efficient and effective day-to- - have, within the last three years,
day operations; been a principal or employee of a
- monitoring performance against key material professional adviser or a
performance measures, corporate material consultant to the Cuscal
strategy plans and the budget; group;
- determining the terms of appointment, - are a material supplier or client of
performance evaluation, succession the Cuscal group, or an officer of or
plans and replacement of executive otherwise associated directly or
direct reports, subject to consultation indirectly with a material supplier or
with the Board Governance & client; or
Remuneration Committee; - have a material contractual
- development and monitoring of the risk relationship with the Cuscal group,
management framework and other than as a Director of Cuscal.
maintaining an appropriate internal
control environment; and Accordingly, in terms of the above definition
- bringing relevant matters to the Board and criteria, Ms Elizabeth Proust, Ms Sonia
in a timely and factual manner. Petering and Ms Trudy Vonhoff are
considered to be independent non-executive
2.3 Structure of the Board directors.
The Board has a broad range of relevant Appointed Directors are required to complete
financial services and other skills and a declaration confirming their independent
experience to meet its objectives. The status prior to appointment. Their continuing
current Board composition is set out on independence is then subject to annual
pages 11 to 13 in this Annual Report. review and is incorporated into the annual Fit
and Proper assessment process. Appointed
The Board, with guidance from the Board Independent Directors are required to notify
Governance & Remuneration Committee, the Secretary or Fit and Proper Officer
reviews its composition annually, considering immediately of information relating to
matters such as the complexity of the changes or possible changes in their
business, the effectiveness and efficiency of independent status.
the Board, and the desired capabilities and
expertise of the collective Board and Pursuant to the Board Charter, the Board is
individual Directors to lead Cuscal in responsible for the determination of
implementing its strategic plan. Directors’ independence, taking into account

the circumstances of each Director. Cuscal is (one of whom is a non-executive, non-

largely owned by credit unions and mutual independent Director), and the Managing
banks and many of its clients are those same Director, who has been appointed as a non-
organisations. This has created the situation independent Director under the discretion
whereby elected Directors may not be given to the Board.
independent by the usual Prudential
definitions. The Board has therefore Cuscal has written agreements with each
determined that elected Directors, whose Director setting out, inter alia, the terms of
organisations have a material out-sourcing his/her appointment. The period of office
contract with Cuscal, may not be considered held by each Director in office at the date of
to be independent. the annual report and his / her status as to
independence are set out on pages 11 to 13
Cuscal’s current elected Directors are officers in this Annual Report.
of shareholders with more than 5%
shareholding in Cuscal and/or have material Cuscal’s elected Directors generally serve
out-sourcing contracts with Cuscal, so do not three-year terms, retiring at the Annual
meet the criteria of independence under CPS General Meeting closest to the expiration of
510 and Cuscal’s Board Charter. Cuscal also their term. Cuscal’s independent appointed
has (through regulatory approval) one Directors serve an initial term of no longer
appointed Director, Ling Hai, who is an than three years, with the terms of office
officer of a shareholder with more than 5% staggered to ensure continuity of
shareholding in Cuscal and therefore does experienced Directors. The Board has a
not meet the criteria of independence under selection framework for the appointment of
CPS 510 and Cuscal’s Board Charter. independent Directors, with the Board
Governance & Remuneration Committee
2.5 Composition having oversight of this process. Matters to
be considered in the selection of candidates
Both the composition of the Board and the include:
election of Directors are determined in - strategic issues, and commercial and
accordance with the Cuscal Constitution, and other pressures facing Cuscal at the
any such regulatory requirements as apply time and over the following three
from time to time. The Constitution years;
prescribes that, subject to satisfaction of any - the overall balance of skill sets
regulatory requirements, it will have an equal available on the Cuscal Board at the
number of Directors elected by shareholders time and those likely to be required
and Directors appointed by the Board. over the following three years, with
reference to competencies required
APRA’s CPS 510 on Governance mandates under the Fit & Proper Policy; and
that ADIs must have a majority of - an assessment of Cuscal’s position with
independent Directors at all times. However, respect to market-based remuneration
under the Standard, special ADI service levels for Directors.
providers are able to seek alternative Board
composition arrangements. Cuscal has All non-executive Directors and potential
obtained approval for alternative Board candidates are required to be assessed by
composition arrangements. the Board Governance & Remuneration
Committee, in accordance with the criteria
Cuscal has regulatory approval to have one contained in Cuscal’s Fit and Proper Policy
additional non-executive, non-independent and the requirements of APRA’s Prudential
Director until 1 December 2020. The Standards CPS 510 and CPS 520 Fit and
maximum number of Directors as determined Proper. Other criteria such as professional
by the current Constitution is nine, which skills, background, personal qualities,
may comprise up to four Directors elected by experience and whether the candidate’s skills
shareholders, up to four Directors appointed will augment the existing Board are also
by the Board, and the Managing Director, assessed. Appropriate details about the
who is appointed at the discretion of the candidates standing for election (or re-
Board. The Board currently comprises two election) are set out in the explanatory
elected Directors, four appointed Directors memorandum to the notice of meeting
relating to, inter alia, the election (or re-

election) of directors. their own interests. Directors are required to

disclose any actual or potential conflicts of
In addition, all Directors are registered by interest on appointment and are required to
Cuscal with APRA as ‘accountable persons’, keep this disclosure up to date. A standing
as required under the BEAR. Board meeting agenda item also serves as a
reminder to Directors to advise of any
The Board has adopted a Diversity Policy that change in circumstances which may lead to
sets out Cuscal’s objectives for achieving real or perceived conflicts of interest.
workplace diversity and flexibility, how it will
achieve these objectives and how it will Directors are bound by Cuscal’s Conflicts of
measure those achievements. To achieve Interest Policy.
its objectives, Cuscal:
- will set Board determined measurable
2.8 Board Renewal
objectives for achieving gender
diversity
The Board has a policy on renewal to ensure
- the Board will assess annually both the
the Board remains open to new ideas and
objectives and progress in achieving
independent thinking. As detailed in the
them;
Board Charter, the Board has set, as a
- will assess pay equity on an annual
general rule, that a Director’s tenure be
basis; and
reviewed if the Director is approaching a
- will encourage and support the
service period of three concurrent terms of
application of flexibility policy into
office. Matters to be considered by the Board
practice across the business.
will include:
- average tenure of Board members;
2.6 The Board Chairman - whether Directors have served on the
Board for a period which could, or
The Chairman is an independent Director and could reasonably be perceived to,
may be elected annually by Directors at the materially interfere with their ability to
first meeting of the Board after the Cuscal act in the best interests of Cuscal; and
Annual General Meeting or alternatively for a - competencies and requirements under
fixed period of more than one year. Cuscal’s Fit and Proper Policy.
The Chairman is responsible for: A Director’s tenure may be extended at the

- leading the Board; Board’s discretion when a majority of the
- chairing and overseeing meetings of Board has agreed that it is in the best
the Board and shareholders; interests of Cuscal.
- being the primary point of contact
between the Board and Managing 2.9 Ongoing Professional Development
Director;
- maintaining ongoing communication In addition to an induction program in place
with the Managing Director and for new Directors, the Board also has a policy
providing appropriate ongoing on the continuing professional development
guidance; of Directors. Directors are required to
- representing the views of the Board to undertake 10 hours professional
the shareholders; and development per annum (through recognised
- assisting with the development of professional bodies or institutions) which is
Directors. reviewed as part of the annual Board
performance and Fit and Proper assessment
The roles of the Chairman and the Managing process.
Director are strictly separated, as required by
CPS 510. In addition, Board meetings periodically
include workshops and other development
2.7 Avoidance of Conflicts of Interest sessions to build knowledge on important
issues and to ensure the Board is kept up to
Directors have a continuing responsibility to date on relevant industry matters.
avoid conflicts of interest (both real and
apparent) between their duty to Cuscal and

The Board and Committees consider various Chairman. From time to time, external
papers from management and external consultants may be engaged to assist or
speakers that cover the latest insights carry out these performance reviews. For
regarding strategy, industry and regulation. FY20, the Board evaluated its performance
adopting a continuous improvement
2.10 Board Meetings and Processes approach, pending a more detailed review in
FY21 following the implementation of the
The current meeting schedule comprises nine outcomes of the Governance review.
Board meetings per year, but this number
may be varied during the year, as required. 2.12 Directors' Remuneration
In addition to these standard meetings, the
Board participates in an annual strategy Board remuneration is fixed by shareholders,
planning forum with the Leadership Team based on the recommendations of the Board
and relevant senior Management. The forum in compliance with a policy determined by
provides an opportunity for consideration of shareholders, which states that:
longer-term strategic issues and initiatives. - shareholders approve a lump sum,
with discretion granted to the Board
The Chairman and the Managing Director for its allocation; and
establish Board meeting agendas, with the - the remuneration lump sum is to be
assistance of the Secretary. Board papers are established by comparison with similar
distributed electronically for Directors to public companies’ remuneration levels,
review in advance of each meeting. The based on a Board comprising the same
Leadership Team are regular invitees to number of non-executive Directors.
Board meetings. Directors also meet from
time to time without the Managing Director At the 2018 Annual General Meeting,
or management representatives in both shareholders approved a total sum of
Board and Board Committee meetings. $739,735.86 for Directors remuneration.
This amount has remained unchanged.
Each Director has the right to seek Allocation of this fee pool was made on the
independent professional advice at Cuscal’s following basis:
expense on a matter relevant to the - Chairman – $165,656.51
Director’s role at Cuscal and affecting a - Base Director Fee (including
Director's own position, subject to prior membership of one Board
approval from the Chairman. The Board Committee) – $87,397.31
policy is that the advice is to be made - Membership of a second
available to all Directors. Committee – additional
$10,566.93
- Chair of a second Committee –
2.11 Board, Committees & Directors additional $5,997.88
Performance Review
Additional fees may be paid to Cuscal
The Board and Committee Charters require
Directors appointed to selected subsidiary
annual performance evaluation of the Board,
Boards.
Committees and individual Directors.
The Board has established an annual 2.13 Executive Performance Evaluation

process, with advice from the Board & Remuneration
Governance & Remuneration Committee, to
conduct the performance evaluations and Executive performance is reviewed annually,
assessments. The performance evaluation is with criteria being clearly defined, time
based on assessment of the Board and each constrained and based on the achievement of
Committee as a collective. Outcomes of the specific objectives, which are aligned to
evaluation of the Board and Committees are Cuscal’s corporate goals. Performance
discussed at the Board and/or the Board evaluations against those objectives for the
Governance & Remuneration Committee and, 2020 financial year took place in July/August
for individual Directors, with the Chairman. 2020. The executive remuneration approach
The Director with the longest tenure on the is to reward performance and provide an
Board conducts the discussion with the appropriately competitive salary to attract,

retain, and engage competent and high annually and are based on the capabilities
performing executives. and experience of individual Directors, as
well as any applicable regulatory
Information is periodically sourced from requirements.
independent organisations specialising in
remuneration matters to provide comparative The three standing Committees (Governance
information on executive salaries. & Remuneration, Audit and Risk) undergo an
annual process where their performance is
The Board annually reviews the performance evaluated, by reviewing the key
and sets the remuneration for the Managing responsibilities under each Committee
Director after receiving recommendations charter and assessing its performance
from the Board Governance & Remuneration against those responsibilities.
Committee. The Managing Director’s review
involves assessing performance against The minutes of subsidiary Boards and Board
established criteria. Committee meetings are included in Cuscal
Board papers for the information of all
Employment arrangements for executive Directors and are reviewed at those
direct reports to the Managing Director meetings. The Board has appointed
(including appointment, termination and independent Directors as Chairs of the three
performance reviews) are subject to Board Committees.
consultation with the Board Governance &
Remuneration Committee. Remuneration The various Committee Charters are
arrangements for those executive direct available on Cuscal’s website.
reports and certain other management
require the Committee’s approval. Executives Details of Committee members, their
appointed to Boards of controlled entities or qualifications and their attendance at
Industry Boards do not receive any additional Committee meetings are on pages 14 of the
remuneration. Annual Report.
Cuscal’s Remuneration Policy outlines in 3.1 Board Governance & Remuneration

more detail the structure of executive
Committee
performance and remuneration
arrangements. The policy is approved by the
The Committee assists the Board on
Board
corporate governance practices, Managing
Director related matters, Board nominations
2.14 Company Secretary and appointments, performance evaluation
and remuneration, and compliance with
Under the Constitution, the Board appoints relevant regulatory standards.
the Secretary on such terms as it
determines, and the role is set out in the The Committee consists of an independent
Board Charter. Chairman plus two other non-executive
Directors. A majority of Committee members
While Directors have unfettered access to the are independent. The Managing Director is an
Secretary and the Secretary is accountable attendee at Committee meetings, except in
directly to the Board, through the Chairman, relation to discussion on matters affecting
on all matters to do with the proper his/her own remuneration or performance, or
functioning of the Board, as a matter of day- any other matters where a conflict may exist.
to-day interaction with Management, the The Secretary is an attendee, with other
Secretary reports to the Managing Director. management invited as required.
3. Committees and Activities of note for the Committee over the

2020 financial year include:
Subsidiary Companies - the review of Cuscal’s corporate
governance principles and
The Board is responsible for Committee governance framework;
composition, membership and charters. - reviewed and approval of Cuscal’s
Committee memberships are reviewed remuneration disclosures as required

under APRA Standard APS 330; (market, liquidity and credit), operational
- review and consider the Board’s risk, securitisation risk, legal risk, compliance
budget; and risk, conduct risk, other non-financial risks
- commission of an independent and regulatory risk.
Governance review taking place in
FY21. The Committee consists of an independent
Chairman plus two other non-executive
Directors. A majority of the members are
3.1 Board Audit Committee
independent. The Managing Director is an
invitee to Committee meetings as are other
The Committee assists the Board to
senior management with risk responsibilities.
discharge its responsibilities relating to the
integrity of the financial reporting, the
The Committee’s main focus over the 2020
effectiveness and independence of audit,
financial year included:
evaluation of the management processes
- oversight of the Operational Risk &
relating to compliance, accounting, internal
Compliance framework, policies and
control and audit activities.
operating model;
- oversight of Technology, Credit,
The Committee consists of an independent
Treasury and Market Risks;
Chairman plus two other non-executive - consideration of Cuscal’s Capital and
Directors. A majority of the members are Recovery Plans;
independent, and all members are financially - COVID-19 risks and
literate. The Managing Director is an invitee. considerations;
The Committee has a standing invitation to - assessment of risk appetite and
External and Internal Audit and selected strategic risks; and
senior management. - input and oversight of the Board self-
assessment of the APRA/CBA report.
Activities of note for the Committee over the
2020 financial year include:
3.4 Committee Memberships at 30
- consideration of accounting matters June 2020
including adoption of accounting
standards; Board Board Board
- oversight and endorsement of the Governance Audit Risk
year end and half year end financial & Remuneration
statements, including dividend Elizabeth Proust(1)(i) ♦(C)
considerations; Sonia Petering (1)
♦ ♦ ♦(C)
- appointment of the external and Trudy Vonhoff (1)
♦ (C)
♦
internal auditors; Steve Laidlaw(2) ♦ ♦
- review of relevant internal audit Wayne Stevenson(2(ii)) ♦
reports and approval and review of
the internal audit plan; and (C) denotes Chairman
- consideration of the external audit (1) denotes independent, non-executive Director
(2) denotes non-independent non-executive
reports and approval of the Director
external and internal audit plans; (i) Appointed 1 June 2020
- receipt of the report on auditor (ii) Appointed 28 January 2020
independence; and
Director Ling Hai does not sit on a Board
- tendering of the external audit.
Committee.
3.2 Board Risk Committee

4. External Auditor
The Committee’s duties and responsibilities
are to recommend to the Board the setting The main role of the External Auditor is to
and review of the appropriate risk appetite provide an independent assurance to
for Cuscal, including reviewing and approving shareholders that the financial statements
within its delegations all Board level policies are free from any material misstatement.
regarding, strategic risks, balance sheet risks

The External Auditor has a standing invitation the marketplace. The Board and
to and attends all Board Audit Committee management also engage in risk reviews,
meetings. The External Auditor has which culminates in Cuscal’s CPS 220
unfettered access to the Board. The Board declaration. In addition, a six-monthly
Audit Committee’s main responsibilities to update on strategic risks is provided to the
the Board relating to the External Auditor are Board.
detailed within the Committee’s charter,
located on Cuscal’s website. The Board owns the risk profile of Cuscal and
approves the risk management framework.
The External Auditor attends the Annual As such, the Board is responsible for setting
General Meeting and is available to answer the key risk parameters for the major risks
shareholder questions on the conduct of the including maintenance of a Group Risk
audit and the audit report. Appetite Statement and alignment with the
associated risk management policies. The
5. Internal Audit risk management framework including risk
appetite statement and key policies are
Internal Audit reports to the Board Audit reviewed annually. The Board evaluates the
Committee and management on the effectiveness of risk management strategies
adequacy and effectiveness of the risk and internal control processes. The Board
management framework, internal controls Audit and Risk Committees have significant
and governance processes. Cuscal’s internal roles in the risk management process. In
audit function is fully outsourced, for the addition, independent assurance on the risk
June 2020 year to KPMG. The Board Audit framework is provided through internal audit
Committee is responsible for assessing activity and external specialists.
whether the Internal Audit function is
adequate, properly resourced and Management, through the Leadership Team
independent. and management Committees, recommend
appropriate policies, practices and risk
parameters for Board and Board Committee
6. Risk Management consideration. Management develops
controls, processes and procedures for risk
The Cuscal Group risk management and compliance, and initiates and oversees
framework operates on the relationships and risk strategies within the parameters set by
dependencies of an oversight structure, the Board.
policies and internal controls.
Risks are managed through an oversight
The Board and the Leadership Team oversee structure and an internal control framework
the management of the Group’s risks through that includes:
Board and management Committees, Cuscal - continual review and development of
executives and internal control and risk ethical standards;
management systems. - continual risk identification,
assessment and control processes, at
6.1 Risk Management Framework both enterprise and business unit
levels;
The risks to which Cuscal is exposed can be - comprehensive policies and
categorised generally into strategic, written procedures on risk
technology, liquidity, market, regulatory, and compliance;
credit, compliance, legal, conduct and - appropriate risk and compliance
operational risk. The approach to risk Committee structures at Board and
management links the business strategies management levels;
and objectives, vision and values to the - assigning appropriate
internal control and risk management delegations of authority;
systems in line with the Board defined Risk - recruiting skilled, professional staff;
appetite. Risk management processes include - maintaining information systems
a regular business unit and enterprise-wide which provide relevant, timely
identification, assessment and evaluation of and accurate information on risks
risk including emerging risks and changes in and controls;

- a comprehensive business operations and financial standing. Cuscal has

continuity plan with associated a continuing engagement and disclosure to
disaster recovery capability for its shareholders through the following
major systems; channels.
- regular staff training on Cuscal risk
management frameworks and Cuscal’s Website
obligations; and Information on Cuscal, including details of its
- independent assurance on the risk Directors and Leadership Team are detailed
framework and internal controls on Cuscal’s public website.
through audit.
Annual Reports
In addition, an annual risk and controls
Each year the Annual Report provides a
survey is issued to all staff to help assess the
comprehensive explanation of the Cuscal
effectiveness of Cuscal’s risk and controls
Group’s business performance.
systems. A newly developed risk culture
survey has also been implemented to provide
a more informed understanding of Cuscal’s Half Yearly Financial Reports
risk culture. This risk survey is Each year a half-yearly financial report is
complemented by quarterly independent provided to shareholders, notwithstanding
culture assessments by our internal auditors, that there is no statutory obligation for
KPMG. Cuscal to do so.
Cuscal has provided APRA with updates to General Meetings

its own self-assessment against key The Cuscal Annual General Meeting includes
findings from their review of CBA. Cuscal addresses from both the Chairman and the
considered its framework fit for purpose Managing Director. Shareholders have the
and will continue to enhance its risk opportunity to express their views, ask
framework, ensuring the Board and questions about Cuscal’s business, and vote
associated Board Committees are provided on other items of business as appropriate.
with appropriate and relevant “insights” on Other general meetings are held as needed.
the operation of, and results from, Cuscal’s
risk management framework. Shareholder Centre
Information relevant to shareholders,
6.2 Managing Director & Chief including papers and presentations made at
Financial Officer (CFO) Assurance shareholder meetings and forums, is
available through the Shareholder Centre on
The Board receives regular reports on the Cuscal’s secure shareholder website. This
financial condition and performance of website also contains governance
Cuscal. The Managing Director and CFO also documents, dividend history and Cuscal
provide an annual statement to the Board share trading information.
that, in all material respects:
- the company’s financial statements Shareholder Announcements
present a true and fair view of the News is distributed via email to shareholder
financial position and results; and Chairs and CEOs and is also posted on the
- the risk management and internal Shareholder Centre secure website. Such
compliance and control systems are news includes financial results, dividends,
operating efficiently and effectively. material announcements and performance
updates.
7. Communicating with
Shareholder Roadshows
Shareholders From time to time the Board and members
of the Leadership team host meetings around
The Board is committed to protecting Australia. These provide the opportunity for
shareholders’ interests and aims to ensure shareholders to be consulted on significant
that shareholders are well informed of all decisions and provided with updates about
major developments affecting Cuscal’s financial results, strategic initiatives and

future plans. In the period, both the Interim interviews to encourage open lines of
Chairman and Chairman have undertaken communication amongst staff and across all
specific engagements and communications levels of Cuscal.
with shareholders on Governance and
general business matters. Cuscal is committed to the highest standards
of ethical, moral and legal business conduct.
Public Prudential Disclosures In line with this commitment, and as a
In accordance with APRA Standard APS 330, reflection of commitment to transparency, a
Cuscal displays on its website the required Whistleblower Protection Policy is in place
information on capital, capital adequacy, that aims to provide an avenue for
capital instruments on issue, risk employees, Directors, as well as a range of
external parties to raise serious concerns
assessment and exposure and remuneration
with the reassurance that they will not be
matters.
disadvantaged for reporting their reasonable
suspicions about other persons. These
8. Ethical and Responsible external parties include contractors,
consultants, suppliers, service providers,
Behaviour volunteers or auditors for Cuscal as well as
relatives, dependents or spouses of those
The Cuscal Board takes ethical and individuals. Their concerns may be reported
responsible decision-making seriously and it either through our Chief Risk Officer or
expects employees to have the same
through Cuscal’s Ethical Disclosure Alert
approach. All Directors, managers and staff
(CEDA), an independent externally hosted
are trusted to act with the utmost integrity in
disclosure facility available via the Cuscal
the best interests of the organisation and its
website.
members, while striving at all times to
enhance the reputation and performance of We recognise the importance of human
Cuscal. rights. Our Modern Slavery Statement is
available on our website. It sets out Cuscal’s
The Cuscal values define the way in which actions to understand all potential modern
employees are encouraged to work together. slavery risks related to our business and to
Quite simply, it’s “what we do around here” put in place steps that are aimed at ensuring
to achieve Cuscal’s business goals and that there is no modern slavery within our
aspirations. The values, which were own business, including our supply chain.
developed through consultation and input
from employees and the Board, are:
- Reliability
- Energy
- Partnership
All employees are required to comply with

Cuscal’s Code of Conduct. In addition,
Directors are bound by a Directors’ Code of
Conduct.
The Cuscal Code of Conduct is available on

Cuscal’s website.
The Board and the Leadership Team

acknowledge that they are responsible for
promoting high standards of ethics and
integrity and that their language, attitudes
and actions will strongly influence Cuscal's
culture.
We educate our staff through online and

team learning. We conduct surveys and

Directory
Principal Offices Company Secretary

The Registered Office and Principal Offices for
Sean O’Donoghue
Cuscal Group and the entities:
Telephone: (02) 8299 9000
Facsimile: (02) 8299 9600
 Cuscal Limited
 Strategic Payment Services Pty Ltd
 Integris Securitisation Services Pty Ltd
 Cuscal Management Pty Ltd Auditors
 Votraint No. 1451 Pty Ltd
Deloitte Touche Tohmatsu
Is as follows: Grosvenor Place
Level 2 225 George Street
1 Margaret Street Sydney NSW 2000
Sydney NSW 2000 Telephone: (02) 932 7000
Telephone: (02) 8299 9000
Facsimile: (02) 8299 9600 Facsimile: (02) 9322 7001
The Principal Offices of the 86 400 Group:

 86 400 Holdings Ltd;
 86 400 Technology Pty Ltd; and
 86 400 Ltd
Is as follows:
Level 6
35 Clarence Street
Sydney NSW 2000
Telephone: (02) 8299 9000
Facsimile: (02) 8299 9600
The Registered Offices of the 86 400 Group is as

follows:
Level 2
1 Margaret Street
Sydney NSW 2000
Telephone: (02) 8299 9000
Facsimile: (02) 8299 9600

Cuscal Annual Report 2020

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Annual Report 2020

2 Letter from the Chairman and Managing Director

15 Auditor’s Independence Declaration

16 Independent Auditor’s Report

19 Statement of Profit and Loss

20 Statement of Other Comprehensive Income

21 Statement of Financial Position

22 Statement of Changes in Equity

23 Cash Flow Statement

24 Notes to the Financial Statements

82 Corporate Governance Statement

2020 | Annual Report

2020 | Annual Report | 2

2020 | Annual Report | 3

Our capital position and overall financial position

In recognition of this and Cuscal’s founding Board

2020 | Annual Report | 4

The Year Ahead

In continuing to ‘Enable the Future’ for our clients,

We will also continue to improve system resilience

Cuscal’s financial position remains relatively strong;

Our people are key to Cuscal and our clients’

We are mindful of the importance of good

Elizabeth Proust AO Craig Kennedy

2020 | Annual Report | 5

 $19.5 million of operating losses associated with

86 400 loss* 29.5 19.5 15.6 10.9

Underlying NPAT $31m

Underlying NPAT increased 16% from $18.8 million in $29m

2020 | Annual Report | 6

Underlying Operating Profit 5% 4.3%

$27.4 million in 2019 to $31.5 million for the year 2%

Earnings and Dividend per share

Underlying Earnings per Share increased 1.7 cents per

An interim ordinary dividend of 1.6 cents per share

Shareholder returns Broadly, increases in risk-weighted assets arising

Underlying ROE increased 90 bps or 12% to 8.5% for

This increase reflects the impact of a higher

2020 | Annual Report | 7

2020 | Annual Report | 8

The directors of Cuscal Limited (“Cuscal”) submit  Specialised finance facilities;

 Real-time payments services via the New

 E Proust AO, Chairman, appointed 1 June 2020

2020 | Annual Report | 9

Cuscal has not otherwise, during or since the end of

Based on information registered with Cuscal in the

This information excludes changes in shareholding

2020 | Annual Report | 10

 Chairman, Independent Non-Executive Director

 Elizabeth was CEO of the City of Melbourne and  Nil

 Chairman of the Board Experience:

2020 | Annual Report | 11

2020 | Annual Report | 12

Directorships in Other Entities:

Other Declared Interests:

The following directors resigned during the year:

 Ari Sarker (24 September 2019)

2020 | Annual Report | 13

A Number of meetings attended