Alpha Pro Tech, Ltd. Annual Report 2021

FY2021 Annual Report · Alpha Pro Tech, Ltd.

Loading PDF…

Unlock.
Afterpay Limited FY21 Annual Report

Performance
Highlights.
Afterpay
Underlying
Sales
1
Afterpay
Active
Customers
1, 2
Afterpay
Active
Merchants
1, 2
$11.1b
FY20
FY20
FY20
FY21
FY21
FY21
9.9m
55.4k
$22.4b
16.2m
98.2k
Up 102%
constant
currency
3
Up
63%
Up
77%

Afterpay
Underlying
Sales
1
Income
Margin
1,4
Exceeded objective to reach
$20 billion - 12 months early
Sustained
$21.1billion Underlying Sales – up 90%
Afterpay
3.9%
Net
Margin
1,5
Maintained
Afterpay
+2%
Gross
Losses
Below
of Underlying
Sales
of Underlying
Sales
of Underlying
Sales
1%
EBITDA
1
(excluding
Significant items)
Down 13% on prior year
$38.7 million
Notes: Change calculations may not equate due to rounding. 1. Unaudited information. 2. Active is defined as having transacted at least once in the last 12 months.
3. Constant currency is a non-IFRS measure and has been calculated by translating the results for the full year ended 30 June 2021 at the effective exchange rates for the
prior comparative period ended 30 June 2020. 4. Afterpay income margin is Afterpay Income as a percentage of Underlying Sales. 5. Afterpay Net Margin reflects merchant
transaction margin earned directly from Underlying Sales, plus other revenue and margin items associated with the Afterpay platform (such as Money by Afterpay).

About Afterpay
Founded six years ago in Sydney,
Australia, Afterpay has over 16 million
customers and 100,000-plus merchants
now using the platform globally across
Australia, New Zealand, the United
States, Canada, and in the United
Kingdom and Europe (where it is called
Clearpay). Afterpay’s global team is
currently made up of more than 1,300
people and growing.
Afterpay’s business model is
completely free for customers who
pay on time – helping people spend
responsibly without incurring interest,
fees or extended debt. Afterpay
empowers customers to access the
things they want and need, while still
allowing them to maintain financial
wellness and control, by splitting
payments in four, for both online and
in-store purchases.
Afterpay is deeply committed to
delivering positive outcomes for
customers. The majority of Afterpay’s
income is derived from merchants,
rather than customers. If a customer
misses a payment, they won’t be able
to use Afterpay until the payments
are up-to-date. Late payment fees are
charged but are fixed, capped and do
not accumulate over time. We aim to
never trap customers in revolving debt
and customers never incur interest.
We are focused on supporting our
community of shoppers.
We trust in the next generation and
share a vision of a more accessible and
sustainable world in which people are
rewarded for doing the right thing.
Afterpay’s mission is to power an
economy in which everyone wins.
4

Contents.
2 Performance Highlights
6 FY21 in Review
24 Directors’ Report
53 Remuneration Report
80 FY21 Financial Statements
139 Auditor’s Report
5

Message from the Chair
Dear Shareholders,
It seems incredible that at this time last
year, we were acknowledging the global
impacts of COVID-19 and the resilience
of our teams around the world.
Twelve months later, much
progress has been made in terms
of vaccine advancement and medical
improvement worldwide. Yet in
each of the regions in which we
operate, the pandemic continues
to have deep economic, social,
and community impacts.
In light of these ongoing and
challenging circumstances, and on
behalf of all the Directors, I would
like to thank all our teams who have
worked tirelessly through another
year of disruption and dislocation.
While our merchants, customers,
employees, and shareholders have all
been affected, we are reminded of the
resilience and tenacity of the human
spirit, and the power of supporting
each other. We remain focused on
our commitment to creating financial
fairness and freedom for all.
Global research continues to indicate
that credit cards and credit-based
products are in decline, while BNPL
continues to expand as a preferred
way to pay. Millennials and Gen Z are
less likely than their parents to use a
credit card, and more likely to engage
with organisations and brands that
they trust. These factors underpin the
important role that Afterpay now plays
in social and economic empowerment.
The forthcoming launch of the Money
by Afterpay product is a great example.
This is a testament to the skill and
innovation of the team in bringing a
new and inclusive financial product to
life. It also signals our commitment to
supporting and enhancing financial
inclusion, particularly for younger
women. Data shows that female
engagement with financial services is
comparatively low, but they are seeing
that this issue is theirs to solve. This
demographic has seen several societal
shifts during the past 20 years, and yet
less than a third of women1 have been
taught about investing, and the wage
and superannuation gaps remain.
These same women make up the
majority of the Afterpay consumer
base. They want a sensible way to
afford discretionary items, using their
own money, and greater financial
empowerment. Money by Afterpay will
make money management simple
and frictionless for these consumers,
as they improve their financial literacy,
grow their wealth, and ultimately secure
future life goals by saving alongside
responsible spending.
FY21 in
Review.
Millennials and
Gen Z are less likely
than their parents
to use a credit card,
and more likely to
want to engage
with organisations
and brands that
they trust.
1
Money by Afterpay Research 2021
6

Diversity and Inclusion
We are also working to build out our
organisational response to creating
a diverse and inclusive workplace for
our people. During FY21, we launched
refreshed principles to guide our
diversity and inclusion (D&I) goals and
initiatives into the future. In addition,
the Board approved D&I measurable
objectives for the financial year which
are detailed within the Corporate
Governance statement, which is
available on our corporate website.
These are actionable measures that
demonstrate our commitment to
diversity and fostering an inclusive
culture which supports, values and
celebrates our differences. There is
further information in the do the right
thing section of this annual report,
which details the important initiatives
implemented by our team.
Sustainability
As a business built on trust and
transparency, Afterpay has worked
alongside consumers, merchants
and stakeholders to understand and
engage on the issues that matter most
to them. We know that Millennial and
Gen Z consumers are placing increased
focus on brands that minimise
environmental impact and improving
outcomes for people employed in
those industries.
In recognition, we partnered with
Good On You, the world’s leading
source for sustainable fashion brand
ratings, using expert analysis and
proprietary technology. The Good
On You team provides information
on fashion brands, producing an easy-
to-understand score based on ethical
and sustainable criteria. These ratings
form the basis for our Shop Directory
category, which is powered by
Good On You.
As part of our broader commitment to
environmental sustainability, we have
commenced the process to join the
Race to Zero via The Climate Pledge,
a UN-backed global campaign that is
bringing together hundreds of cities,
thousands of businesses, and global
investors to raise awareness and focus
efforts on achieving net-zero carbon
emissions by 2040 at the latest.
Afterpay is also working towards
achieving carbon-neutral certification
from Climate Active and has
independently calculated our carbon
footprint across global operations. We
continued to enhance our partnerships
throughout FY21 and are consistent
with our commitment to do the right
thing, which can be found on page 22
of this report.
countries
We have transitioned
from a top 100
company to a top 20
company in Australia
9
Actionable measures and initiatives
that demonstrate
which supports, values and
celebrates our differences
our commitment to
diversity and fostering
an inclusive culture
We
operate in
We have grown
from <30 employees
in FY16 to
~1,300
employees
in FY21
7

We welcome the opportunity
to engage with regulators,
governments, and other
stakeholders across all our
regions to talk about what makes
us different and our commitment
to promoting fairness and
financial freedom for all

Governance
We think of good governance as part of
doing the right thing. It’s one of our key
values and strategic pillars, and during
FY21 we continued to strengthen
Afterpay’s governance framework. Our
framework is detailed in our Corporate
Governance Statement, which is
available on our corporate website
together with our key governance
policies and charters.
FY21 was another very busy year for
the Board who continue to be well
supported by its Audit, Risk and
Compliance Committee (ARCC) and its
People, Remuneration and Nomination
Committee (PRNC). During FY21, Gary
Briggs replaced me as appointed Chair
of the PRNC, and his global experience
has enhanced our remuneration
practices across our operating
geographies.
The Board also established special-
purpose Sub-Committees to provide
oversight of significant projects. These
include the transaction to increase our
underlying interest in the Afterpay US
business, completed in April 2021, and
the proposed acquisition by Square, Inc
of Afterpay announced in August 2021
(see further below).
Remuneration
Our global compensation and
remuneration framework has been
designed to attract and retain leading
talent and to appropriately link Group
performance with remuneration
outcomes. The framework seeks to
ensure fair and consistent outcomes
for all team members globally while
reflecting regional practices. The
Remuneration Report outlines the
FY21 remuneration outcomes for key
management personnel in detail.
Regulatory engagement
and participation
During the year, Afterpay continued
to proactively engage with regulators,
governments, and stakeholders
across all regions in which it operates.
This included engagement in the
establishment of the landmark Buy
Now Pay Later (BNPL) Code of Conduct
in Australia, which recognises the
diversity of our industry, incorporating
scalable standards and protections
to ensure the industry continues to
deliver strong consumer outcomes.
More recently, Afterpay engaged
with ASIC on the forthcoming Design
and Distribution Obligations (DDO).
We are on track to implement these
requirements before the DDO’s
commencement in October 2021.
Elsewhere we continue to engage with
HM Treasury and the UK Government
regarding the proportionate regulatory
framework for BNPL in the UK and
the review of the EU Consumer
Credit Directive, which has not been
adjusted for more than 10 years and
precedes the emergence of BNPL
as an alternative to credit products
in that region.
As always, we welcome the
opportunity to engage with regulators,
government, and other stakeholders
across all our regions to talk about
what makes us different and our
commitment to promoting fairness
and financial freedom for all.

We think of good governance as part
of doing the right thing, one of our key
values and strategic pillars, and during
FY21 we continued to strengthen
Afterpay’s governance framework.
Shape
the
Future
Keep
it Real
Be
Brave
Our Values
ght
Do the
Ri
Thing
9

Unlocking
Shareholder value
In the six years since Afterpay began, as a forthright
and tenacious advocate for a better way to pay,
the Company has evolved to become a much
loved and trusted consumer brand globally.
Our growth and commitment to
improving financial wellbeing echoes
and aligns us well with Square, Inc.
(NYSE: SQ) with whom we have since
entered into a Scheme Implementation
Deed for Square to acquire all
issued shares in Afterpay by way of
a recommended court-approved
Scheme of Arrangement (Transaction)
for an implied value of approximately
US$29 billion (A$39 billion)2.
Square and Afterpay share an aligned
purpose to improve consumer
outcomes, to make the financial
system fairer and more inclusive. The
complementary nature of the two
businesses presents an opportunity to
grow both organisations via strategic
synergy and deepen the relationships
between merchants and consumers
across these two well-established
ecosystems. Likewise, it will bring
added value and differentiation to
Afterpay, enabling the business to
further grow to more than 70 million
annual active Cash App customers and
millions of sellers. Afterpay consumers
will also be able to use the benefits of
Cash App’s financial tools, including
money transfer, Stock, and Bitcoin
purchases.
It is for these reasons that your
Directors unanimously recommend
that shareholders vote in favour of
the Transaction. The Transaction is
contingent upon certain customary
shareholder and regulatory approvals
and conditions and is expected to
close in the first quarter of CY22.
Shareholders can expect to receive the
Scheme Booklet during November.
As Chair of Afterpay, I could not
be prouder of what this incredible
company has achieved in its short but
impactful history. From our original
launching point, as a Sydney-based
start-up six years ago, it is remarkable
to see what has been delivered by our
teams around the world, who work
every day to ensure that everyone has
equitable financial access without
fear of expensive interest payments
and revolving debt cycles. For our
merchants with whom we have
partnered to date, the incremental
value that Afterpay has driven we
believe will grow further on successful
completion of the Transaction.
On behalf of the Board of Directors,
I thank the founders, management
teams, and our global teams. Each
of you has worked tirelessly through
another difficult year, and your
commitment and passion for our
vision have never waived. As we
look ahead with excitement at the
opportunity that FY22 presents, I thank
all shareholders for your support of
this business as it unlocks the next
phase of growth.
Elana Rubin AM
Independent Chair
Afterpay
2
As at the close of trade on 30 July 2021
10

It is remarkable to see what
has been delivered by our
teams around the world,
who work every day to ensure
that everyone has equitable
financial access without fear
of expensive interest payments
and revolving debt cycles

Message from the Co-CEOs
Taking care of our people has always
been our primary focus. Seeing how
our growing teams supported each
other during the past year has been
very special, and we’re extremely
grateful to lead such an incredible
group of people.
The long-lasting impacts of COVID-19
will further accelerate the shift from
traditional credit to debit products.
This ongoing shift in consumer
behaviour is the reason why Afterpay
was founded six years ago. We wanted
to flip the traditional credit model
on its head and empower the next
generation to spend responsibly.
Our leadership team has worked with
teams around the world to execute
Afterpay’s strategy, with a focus on
driving our vision of ‘fairness and
financial freedom for all’, and our
mission ‘to power an economy in
which everyone wins’. Our actions
are underpinned by our strategic
focus on being led by the needs of
our customers and merchants, while
ensuring that we put our people first.
Dear fellow shareholders
The complex and ever-changing COVID-19
environment has continued to present challenges
during the past 12 months. We would like to
thank our incredible teams around the world
for working so passionately to ensure our
customers and merchants were at the centre of
everything we did during these difficult times.
Millennials at our core
With a focus on millennials and Gen Z,
we have redefined our vision that aspires
to fairness and financial freedom for all.
Our Vision
Fairness
and financial
freedom for all
Our Mission
To power an
economy
in which
everyone wins
12

Connecting the world’s
most-loved brands
with next-generation
consumers
We have built a global platform that
Millennial and Gen Z consumers trust,
because they can shop responsibly
with brands they love. More and more
customers choose Afterpay to avoid
getting trapped in a revolving cycle of
debt. They trust us to create a seamless
experience across online and offline
shopping that provides greater control,
flexibility and transparency over their
finances. Our shop directory has
generated ~1 million customer referrals
to our retail partners every day during
H2 FY21, creating additional value
and connection.
Our teams never stop listening to our
customers and merchants because
they are passionate about driving value
that meets their evolving needs. We
have focused on delivering value for
both our customers and merchants
through unlocking innovation to scale
and grow.
We’ve enhanced our loyalty program,
Pulse Rewards, which sees our
customers earn points for responsible
spending behaviour. Customers move
through tiers to unlock new benefits
including exclusive offers from much-
loved brands, flexible payment dates,
and early access to sales.
We successfully launched a one-time-
use card to select US app customers,
enabling them to shop their favourite
brands with retailers who aren’t yet
integrated onto our platform, and we
are looking forward to expanding this
over the coming months. The addition
of our Favourites feature gives our
customers the ability to save their
favourite retailers and popular items for
a time that suits them to shop.
It was an exciting time as we
announced the launch of Money by
Afterpay. Our new Money app has
been designed to help customers build
financial confidence by equipping
them with a money management
experience better suited to their lives.
We’re thrilled that our Australian team
members have already started to trial
the app ahead of the full-scale launch.
We have seen continued success
and momentum with our in-store
offering in Australia, New Zealand and
the US. It was fantastic that we could
support our merchants during FY21
as they started to reopen their physical
stores. We were able to enhance
the experience for our customers by
launching in-store card across these
three regions, and following the
successful launch of the ANZ Afterpay
Card, more than 1.4 million customers
have added the Afterpay Card to their
digital wallets. Our UK team will also
launch in-store in Q2 FY22.
Our obsession with delivering
merchant value has amplified during
the past year. We continued to support
our merchants with improvements to
the online experience.
During FY21 we launched Express
Checkout across more than four
thousand merchants who have seen
an increase in sales conversions as a
result of integrating this feature. We
continued to grow our cross-border
trade (XBT) offering during FY21,
with consumers now able to shop
from merchants across all regions.
And, we’re excited about launching
Afterpay iQ to our merchant partners,
who will be able to access leading
consumer marketing insights to help
grow their business and optimise their
marketing investment.
Money by Afterpay
13

Becoming a
truly global brand
We expanded our presence into
Europe by welcoming Pagantis into
our Clearpay family and successfully
launching in Spain, France and Italy.
We are thrilled to be working with
these talented employees, who
have more than 450 merchants live,
integrating or signed.
To further build on the love and trust
of our customers, we launched our
first ever global marketing campaign
- Pay Better - we shared engaging
messages that reminded people that
there is a better way to pay without
interest, fees or debt. Our brilliant
marketing team did a fantastic job of
educating the next generation through
humorous, simple and engaging
messages across all our key regions.
When the retail and fashion industry
most needed support, we were
absolutely honoured to partner with
three of the world’s biggest fashion-
week events in Australia, London and
New York. The opportunity to support
the sustainable success of the industry
in which we grew up was a really proud
moment for us and our teams. Bringing
the themes of diversity and inclusion,
sustainability and accessibility to the
forefront of our conversations through
these partnerships was important
and rewarding.
We delivered solid
results in FY21
The hard work and passion of our
teams around the world has helped
deliver a solid set of results in FY21.
We continued on our global growth
trajectory, with strong operating
performance achieved across all
regions.
The Group delivered a 90% increase
in FY21 Underlying Sales ($21.1
billion) on pcp or 102% on a constant
currency basis ($22.4 billion) and
our Group Total Income of $924.7
million, 78% higher than FY20, was
driven by the strong performance of
the Afterpay business growing from
a much larger base.
Our active customers during FY21
grew to 16.2 million, an increase of
63% compared to the same time
last year, with approximately 25k
new customers joined the platform
globally per day during FY21. Our
global integrated active merchant
network now exceeds 100k,
following an increase of 77% in FY21
(98.2K as at 30 June 2021).
Underlying Sales
$22.4b
1
Up 102% on FY20
Active Customers
16.2 million
Up 63% on FY20
Active Merchants
98.2k
Up 77% on FY20
1. Constant currency
14

Doing the right thing
We have a continual focus on the
health and wellbeing of our people.
Creating an environment where
everyone feels able to be their
authentic self is our top priority.
The appointment of our first Diversity
and Inclusion Director was a critical
step on our journey to fostering an
inclusive culture and embracing
diversity of thought and inclusive
behaviours across our business.
Through our D&I strategy and
principles, we launched initiatives to
raise awareness within our business
and across our external communities,
as well as celebrating important
moments around the world.
The blurring of personal and
professional life, and the lack of
social connectedness, presented
challenges during the past year. We
responded by appointing a Director
of Wellbeing and staying close to our
teams through regular Q&A sessions
and wellbeing surveys. This ensured
we were listening to and acting on the
concerns of our people. The initiatives
we introduced include quarterly
Wellness Days and a dedicated
Wellbeing Hour each week. These give
our teams a chance to disconnect and
focus on their mental and physical
health in a way that best suits them.
Our team further built on the
support we provided our merchants,
particularly our small to medium-sized
business (SMB) partners during the
continued challenges of FY21. Our
‘Support Small’ campaign enabled
us to spotlight some of the incredible
partners we have and connect them to
millions of customers worldwide.
The passion our team continued to
show for our community partners has
been inspiring. We have had teams
volunteering with Thread Together and
Global Sisters, and it was an absolute
privilege to help raise awareness and,
together with our customers, funds
for both these amazing not-for-profit
organisations.
Shaping the future
together
We are excited about the opportunity
to bring two of the fastest-growing
fintechs together through our
announcement with Square. Our
shared purpose of economic and
financial inclusion will offer an
even more attractive platform, with
compelling financial products and
services that expand access to more
consumers and merchants across
geographies, categories and segments.
We are so proud of what we have
achieved as a team during the past
six years. Leading such a talented
group of ~1,300 employees, who are so
committed to delivering on our mission
of powering an economy in which
everyone wins, is an absolute privilege.
Thank you is never enough. What each
and every one of you brings to Afterpay
is invaluable and we couldn’t have
achieved what we have without you.
To our Board and leadership team,
we could not have wished for a
better group of people to work with.
Your experience and insights have
enabled us to scale and evolve like
we never imagined.
We would also like to thank our
customers and merchants for your
continued loyalty and trust. We look
forward to writing our next chapter
with you, creating even more value
and opportunities.
To our shareholders, thank you for your
support and coming on this journey
with us. You have enabled us to grow
beyond our wildest dreams and for
that we will be forever grateful.
We are energised for the future
and remain fully committed to our
aspirational vision of a world with
fairness and financial freedom for
all. We will continue to work with our
awesome team to power an economy
in which everyone wins.
Anthony Eisen
Co-CEO and Co-Founder
Afterpay
Nick Molnar
Co-CEO and Co-Founder
Afterpay
15

Mental health is a
particularly important
aspect of our wellbeing
culture, and we continue
to create conversation
around this subject

Sustainability
Do the
Right Thing.
Putting our
people first
Over the past 12 months
we have grown from
~650 to ~1,300 incredible
people and our
commitment continues
to be creating a holistic
wellbeing culture and
an environment where
our team feel safe to
be their authentic self.
We appointed a dedicated Director of
Wellbeing in FY21 to ensure we had
the right focus. Our people and their
wellbeing continues to be one of our
top priorities.
Our Employee Assistance Program
is available to all team members
and their loved ones. We have
implemented quarterly Wellness
Days, where all global employees are
encouraged to take the day to rest,
relax, and reset. We recently piloted a
dedicated Wellness Hour, where our
teams are encouraged to step away
from their screens and do something
to support their wellbeing.
Mental health is a particularly
important aspect of our wellbeing
culture, and we continue to create
conversation around this subject.
We held a series of fireside chats with
Afterpay leaders anchored around
RUOK Day, and leaders regularly
share how they are looking after
their mental health.
We offer the Headspace app to all
employees as well as their friends and
family. The majority of our workforce
has taken this up, so we feature
programs and resources regularly in
our employee communications to drive
awareness and engagement.
We continue to listen to our employees
through anonymous surveys, gathering
feedback to implement programs
based on these insights. We keep
our global teams connected through
monthly All Hands, giving everyone
an opportunity to ask questions of
our leaders. Our teams live our values
– Be Brave, Keep it Real, Do the Right
Thing and Shape the Future – to ensure
the continued success of the business.
17

Building a diverse and
inclusive culture, together
Afterpay is a dynamic global
organisation. We understand that
diversity and inclusion is at the heart
of our success. We appointed a
Director of Diversity and Inclusion in
FY21 and strengthened our focus on
this integral aspect of our culture.
Our new set of principles provides
a framework for our D&I goals and
initiatives. We created a range of
internal team and communications
initiatives to start to bring our
principles to life. These were focused
on education, resources, events
and initiatives anchored to diversity
and inclusion moments.
Our learning journey began by
providing opportunities for our
people to learn about diversity and
inclusion, bias awareness, and inclusive
leadership. An ally skills talk taught
us all concrete ways to stand tall
in our commitments to inclusion.
A newly created online space includes
ongoing resources to support learning
with articles, event recordings,
and company D&I information
and materials.
To encourage engagement and
spark conversations around these
ideas, we created an internal
employee communications group
‘Together@Afterpay’ for sharing
D&I communications and raising
awareness about key diversity days and
months. These included Black History
Month, International Women’s Day,
Asian American and Pacific Islander
(AAPI) Heritage Month, National
Reconciliation Week and Pride Month.
Each of these was brought to life
with different campaigns such as
internal storytelling from employees
and community partners, panel
discussions, learning resources and
external communications. In some
of these events, we also had a focus
on spotlighting and celebrating the
diverse merchants on our platform.
Responding to the needs of our teams
is also a key part of how we foster
inclusion and promote a sense of
belonging. We ran surveys to capture
inclusion experience feedback and
formed employee resource groups for
women and the LGBTQI+ community.
We promoted LGBTQI+ inclusion
through various initiatives. This
included joining Pride in Diversity in
Australia, running awareness training,
delivering initiatives for Pride Month,
introducing options for employees
to identify as non-binary or gender
diverse, and providing access to
learning resources. During Pride
Month, we created a video where
employees around the world shared
thoughts on what ‘Pride is to me’.
We also heard moving stories from
members of our team in a ‘Sharing Our
Stories’ event. In the US, we launched
a ‘GenderFree’ shopping experience
to encourage self expression.
We formed partnerships with hiring
platforms that support diversity
including People of Color in Tech,
Power to Fly and Work180. We work
collaboratively with these platforms to
attract talent and promote our culture.
We also developed new guidelines to
promote D&I in hiring, and delivered
training for the talent acquisition team.
We leaned into community support
by engaging with organisations
promoting gender equality. This
included joining Code Like A Girl’s
internship program, sponsoring Grad
Girls and the Australian Women in
Security Network, and being a member
of the Corporate Program in Stanford’s
VMware Women’s Leadership
Innovation Lab.
We support the global movement
to tackle systemic racial inequality,
focusing on racial equality and diversity
through several US initiatives during
FY21. In addition to celebrating Black
History Month, we amplified the voices
of Black women from our merchant
community through our International
Women’s Day panel. We honoured
Juneteenth by encouraging our US
employees to participate in community
activities and to engage in activism
and self-education. During AAPI
Heritage Month, we highlighted the
importance of ally skills in response to
the escalation of violence against Asian
communities, as well as celebrating the
work of our AAPI merchants.
As a company born in Australia, we
recognise the importance of fostering
respectful, authentic and sustainable
relationships with First Nations
communities. We formed an internal
working group to support our focus
on engagement with Aboriginal and
Torres Strait Islander communities
in FY21. We launched an internal
Welcome to and Acknowledgement
of Country guide to help employees
understand why these cultural
protocols are important, what they
mean and how to use them in
meetings and events. We held events
for National Reconciliation Week, and
we continue to look for ways to support
the work of Indigenous merchants in
Australia. We know there is more work
to do but we’re committed to ongoing
learning, education and raising
awareness with our team.
18

Developing strong and
meaningful community
partnerships
We partner with community
organisations around the world, giving
back and underpinning our mission to
power an economy in which everyone
wins. These partnerships bring our
Do The Right Thing value to life, and
our people are absolutely passionate
about this work.
This year, we continued our principal
partnership with Australian start-up
charity Thread Together, whose mission
is to source excess new clothing from
fashion retailers and redistribute
items to vulnerable families and
individuals. As well as restoring dignity
and hope for those doing it tough,
Thread Together’s work has resulted
in tonnes of new clothing being
diverted from landfill.
In FY21, Afterpay raised $200,000 for
Thread Together through numerous
‘add $1’ at the checkout’ campaigns.
Afterpay has also committed to
topping up the campaigns , ensuring
that Thread Together receives
a minimum of $400,000 each year
from FY22. The Afterpay team also
regularly volunteers at Thread
Together’s distribution centres and
stores, where they sort through
clothing and pack orders to be sent out
to people in need.
We created a new partnership with
Global Sisters in FY21, a leading
Australian not-for-profit that makes
business possible for women
experiencing barriers to traditional
work. In this multi-year partnership,
Afterpay will raise a minimum of
$50,000 annually through fundraising
initiatives such as the ‘add $1’ at the
checkout’ campaign, the first of which
ran for the month of March to celebrate
International Women’s Day.
Afterpay is also an ongoing participant
in Global Sisters’ corporate coaching
program, which supports women
starting their own business. The first
round of this program, which began
in May, saw 15 Afterpay employees
coach budding entrepreneurs in
developing their own businesses,
offering 1:1 mentoring in skills such
as marketing, lead generation, and
time management.
We continue to encourage greater
awareness of the environmental
impacts generated by our suppliers
and their retail supply chains through
our partnership with Good On You.
This is the world’s leading source
of sustainable fashion brand ratings,
using expert analysis and proprietary
technology to give each fashion brand
an easy-to-understand score based on
ethical and sustainable criteria. This
year, we launched a category powered
by Good On You on Afterpay’s Shop
Directory. This ethical fashion category
features retailers which have been
rated highly (4 or 5 out of 5) by Good
On You and helps connect conscious
shoppers to ethical brands. To help this
category grow, we have funded the
rating of over 300 merchants during
the partnership.
Good On You
We partner
with community
organisations
around the world,
giving back and
underpinning our
mission to power an
economy in which
everyone wins.

We support these
businesses and
encourage our
customers to
support local
through a range of
marketing activities
and regional
activations.
Supporting industry
and small business
Afterpay is dedicated to supporting
small and medium-sized businesses
(SMBs) and shining a light on this
critical segment of our economy. We
connected our SMB partners around
the world to our millions of customers
by highlighting what makes these
businesses unique, whether it’s
original products, interesting stories or
sustainable initiatives.
We encourage our customers to
support local SMBs through a range
of marketing activities and regional
activations such as our evergreen
‘Support Small’ Saturdays and quarterly
‘Support Small’ weekends in Australia.
This initiative saw us visit different
regional areas around the country,
lighting up the streets with pop-ups
and entertainment, as well as an online
sale with traffic driven from our Shop
Directory and social media channels
directly to these businesses.
Afterpay Access is a one-stop online
hub for the small business community
that offers resources, tools, and
expert advice on how to grow and
thrive during this challenging period
and beyond.
Afterpay also continues to support the
future of the retail industry through
numerous initiatives. In FY21, we
continued our partnership with the
Australian Retailers Association. This
included jointly launching financial
literacy courses for retail employees, as
well as participating in key ARA events
like the Leaders Forum, and providing
insights briefings for members.
As part of our partnership with
the Australian Fashion Council we
helped launch High Fashion to High
Vis on the economic contribution of
Australia’s fashion and textile industry.
We also generated coverage on the
announcement of the ‘Edit Collection’,
a partnership between Afterpay,
Australian Fashion Council and Vicinity
Centres to showcase local fashion
designers at Chatswood Chase.
In the UK, support for Clearpay’s
London Fashion Week included the
launch of a report on the outlook for
the local fashion and beauty retail
industries with the British Fashion
Council by Oxford Economics.
Commissioning the report, alongside
the BFC, demonstrates Clearpay’s
commitment to supporting the
fashion industry.

Responsible
spending
Afterpay has revolutionised how
consumers pay for goods and services
by turning the traditional model of
high-cost consumer credit on its head.
Afterpay is a no-cost service to the
customer if instalment payments are
made on time.
Responsible spending rules and
consumer protections are built
into the service – these rules
help ensure customers never
get stuck in debt cycles, with no
exceptions. In circumstances where
the customer does not pay their
instalment payments on time, their
service is immediately suspended.
Our late payment fees are fixed,
capped and do not accumulate
or compound over time.
Although our product is simple by
design, we are always looking for
ways to improve the experience and
empower customers to take control
of their financial commitments. We
launched a range of new product
features in FY21, including the ability
for customers to move payment
dates. Unlike other products, Afterpay
does not charge customers a fee
for doing this.
Another feature allows customers to
notify us when they wish to return
a product. We then push back the
next instalment by two weeks from
the original due date, allowing the
customer to return the item and
the retailer to process a refund.
Again, there is no customer charge
for this service.
Afterpay also launched the next
phase of Pulse Rewards in FY21. Every
customer can join the program and
earn points as a reward for responsible
spending. Unlike other reward schemes
that encourage people to spend, our
program rewards on-time payment
behaviour. A $50 on-time payment is
rewarded in the same way as a $200
on-time payment. Customers move
through different tiers and unlock
new benefits like exclusive offers from
much-loved brands, flexible payment
dates, and early access to sales.
In partnership with the Australian
Retailers Association (ARA), Afterpay
has commissioned the creation of a
free financial literacy program for retail
workers. The program aims to address
the education gap in financial literacy
experienced by retail workers, which
include a high proportion of Millennials
and Gen Z.
Afterpay also
launched the next
phase of Pulse
Rewards. Every
Afterpay customer
can join the
program and earn
points as a reward
for responsible
spending.
21

Environmental
sustainability
Afterpay is committed to
environmental sustainability and
recognises the direct impact of
our business. To demonstrate this
commitment, we have begun the
process of joining the Race to Zero
via The Climate Pledge, a UN-backed
global campaign that aims to build
momentum around the shift to a
decarbonised economy and halve
all global emissions by 2040.
In addition, we are independently
calculating our carbon footprint across
global operations. We are currently
working towards achieving carbon
neutral certification from Climate
Active.
Alongside the business becoming
carbon neutral, Anthony and Nick
will also become carbon neutral
in their personal capacities. They
have started the process to join
Leaders For Climate Action, a global
coalition of entrepreneurial leaders
who are passionate about fighting
climate change.
Broader impact
Afterpay is a platform that connects
consumers with merchants. We
recognise the important role we have
in understanding and influencing
the indirect environmental impacts
generated by the retail industry.
We empower our customers to
make informed decisions about
fashion brands through our ongoing
partnership with Good On You,
the world’s leading sustainable
and ethical fashion brands rating
system. In addition, our partnership
with Thread Together has resulted
in tonnes of new clothing being
diverted from landfill. This is the best
possible response to Australia’s textile
waste problem.
For Earth Month, Afterpay introduced
a ‘top-up’ program that allowed
customers to donate to Magpies
& Peacocks, a non-profit design
house disrupting the cycle of
waste in the fashion industry, and
Surfrider, a non-profit environmental
organisation focused on protecting
clean water and healthy beaches.
We also integrated a live shopping
technology platform in partnership
with MagicLinks, a B-Corp Certified
social commerce company, to inspire
customers to ship more consciously.
Customers are able to watch their
favourite influencers and shop live
for their favourite eco-friendly brands.
We have begun
the process of
joining the Race
to Zero via The
Climate Pledge,
a UN-backed
global campaign
that aims to
build momentum
around the shift to
a decarbonised
economy and
halve all global
emissions by 2040.
22

Regulatory
update
Afterpay strongly supports fit-for-
purpose regulation of the BNPL
sector. We proactively engage with
regulators, government, policymakers,
consumer advocates and financial
counsellors in each of our regions
to ensure we achieve the best possible
consumer outcomes.
In Australia, Afterpay welcomed the
launch of the Buy Now Pay Later
Industry Code of Practice (BNPL Code).
Drafted under the guidance of the
Australian Finance Industry Association
(AFIA), the Code goes above and
beyond the law, setting best practice
standards for the diverse and growing
BNPL sector.
We are well advanced in preparing
for the forthcoming Design and
Distribution Obligations, which come
into effect from early October in
Australia. These obligations will ensure
that providers create products that
are suitable for their customers and
operate alongside ASIC’s existing
product intervention powers. These
outcome-based regulatory tools,
in conjunction with the minimum
standards in the BNPL Code, will
ensure the industry is held accountable
for customer outcomes.
The RBA recently confirmed that it will
not require BNPL providers to remove
their no-surcharge rules at this time.
It acknowledged that these rules
promote payment service competition
and innovation by helping new
providers to compete with incumbents.
We provided submissions to Scott
Farrell’s review of the Payments
Systems and the Senate Select
Committee on Financial Technology
and Regulatory Technology.
In October 2020, AUSTRAC confirmed
that it had finalised its review of the
Final Audit Report, undertaken by
Independent Auditor Neil Jeans,
examining the Afterpay’s compliance
with the Anti-Money Laundering
and Counter-Terrorism Financing Act
2006. AUSTRAC considered the Final
Audit Report and Afterpay’s response
to the findings and decided it would
not be taking any further regulatory
action. AUSTRAC noted that Afterpay
had uplifted its AML/CTF compliance
framework and financial crime
function, and satisfactorily completed
all required remediation activity.
Clearpay welcomed the publication
of the UK’s Woolard Review. This
acknowledged the varied nature of
the market and how proportionate
regulation of the BNPL market protects
consumers. We are working with
the FCA, the UK Government and
stakeholders to build on the consumer
protections we already provide
to create strong safeguards and
appropriate industry regulation.
We proactively
engage with
regulators,
government,
policymakers,
consumer advocates
and financial
counsellors in
each of our regions
to ensure we can
achieve good
consumer outcomes.
23

Directors’
Report.
Afterpay ended the year with
16.2 million Active Customers,
an increase of 63% on the prior
year. The average number
of orders per Active Customer
1
in the period also continued
to increase across all regions
1. Active is defined as having transacted at least once in the last 12 months.

Directors’ Report
The Directors submit their report on the consolidated entity consisting of Afterpay Limited (Company)
and the entities it controlled (Group) at the end of, or during, the year ended 30 June 2021.
Directors
As at the date of this report, the Directors of Afterpay Limited are:
Elana Rubin AM
Chair, Independent Non-Executive Director
Anthony Eisen
Co-Chief Executive Ofﬁcer and Managing Director
Nick Molnar
Co-Chief Executive Ofﬁcer and Managing Director
Gary Briggs
Independent Non-Executive Director
Pat O’Sullivan
Independent Non-Executive Director
Sharon Rothstein
Independent Non-Executive Director
Dana Stalder
Independent Non-Executive Director
The Directors listed above each held ofﬁce as a Director of Afterpay Limited throughout the period and
until the date of this report.
Principal Activities
The principal activities of the Group are to provide technology-driven payments solutions for customers
and merchants through its Afterpay and Pay Now services and businesses.
Financial Result
The Group reported a Loss after tax of $159.4 million for the year ended 30 June 2021 (2020: $22.9 million
loss).
26

Operating & Financial Review
The year ended 30 June 2021 was a period of high growth and investment as the Group continued to
scale its differentiated business model. With the economies that Afterpay operates in at varying stages
of reopening, the Group beneﬁted from both online and ofﬂine spending and the continued shift away
from traditional credit card and point of sale lending products.
Overall, in the year ended 30 June 2021, Afterpay:
●
Grew Underlying Sales to $21.1 billion (AUD), exceeding our publicly stated ambition to achieve $20
billion by FY22, a year early. On a constant currency basis1, Underlying Sales was $22.4 billion, up
102% on the prior year. Rapid growth in North America has largely driven the result for the year,
diversifying the geographic proﬁle of Afterpay
●
Maintained Afterpay Income Margin at 3.9% of Underlying Sales, whilst increasing our number of
merchant partners to nearly 100,000 globally, including a growing number of global enterprise
merchant partners
●
Added 6 million new customers to the platform, with over 16 million active customers2 around the
world
●
Continued to successfully manage losses, with Gross losses within Receivables Impairment
Expense at 0.9% of Underlying Sales. Our risk management process and decision engine have
continued to outperform during a period of high business growth and despite signiﬁcant
economic uncertainty during the pandemic
●
Sustained Afterpay Net Margin3 at over 2% of Underlying Sales, despite increasing contribution
from less mature regions
●
Continued to invest and scale the business, with increased spend on exceptional talent,
operations, brand awareness, customer marketing and merchant acquisition
●
Further strengthened the Group’s balance sheet position, with the ability to fund over $40
billion4 in incremental Underlying Sales over the current Underlying Sales run rate of $24 billion (Q4
annualised).
Afterpay Net Margin was sustained above 2% during
yet another year of high growth, despite increased
contribution from international regions which are
initially lower margin.
While Asia Paciﬁc5 (APAC) continues to contribute
the largest EBITDA (excluding signiﬁcant items)
to the Group, North America5 is now the largest
contributor to Underlying Sales.
1.
Constant currency is provided to facilitate comparability of Afterpay’s operational performance, excluding the impact of
foreign currency ﬂuctuations. Constant currency is a non-IFRS measure and has been calculated by translating the results for
the year ended 30 June 2021 at the effective exchange rates for the prior year ended 30 June 2020 for each of Underlying Sales,
Total Income and Afterpay Income.
2.
Active is deﬁned as having transacted at least once in the last 12 months.
3.
Afterpay Net Margin has replaced Afterpay Net Transaction Margin as a key performance metric for current and future
reporting periods. In addition to merchant margin earned directly from Underlying Sales, Afterpay Net Margin includes other
income and margin items associated with the Afterpay platform (such as Money by Afterpay).
4.
Estimated calculation based on the terms of Afterpay’s existing warehouse funding facilities and historical performance of
receivables.
5.
Asia Paciﬁc: Comprises the Afterpay platforms in Australia, New Zealand and Asia; North America: Comprises the Afterpay
platforms in the United States of America and Canada.
27

1. Group Summary
Total income was $924.7 million for the year ended 30 June 2021, up 78% on the prior year driven by
growth in Underlying Sales. On a constant currency¹ basis, Total income was $978.9 million for the year
ended 30 June 2021, up 89% on the prior year.
Afterpay Net Margin2 was $434.1 million, up 74% on the prior year, slightly lower than growth in
Underlying Sales. This was primarily the result of a lower contribution from late fees while merchant
margin and other variable costs were stable as a percentage of Underlying Sales. Afterpay Net Margin is
Afterpay Net Transaction Margin (earned directly from Underlying Sales), plus other income and margin
items associated with the Afterpay platform (such as Money by Afterpay). The shift to Afterpay Net
Margin, which will continue to be used for future reporting periods, reﬂects new revenue streams
announced by the Group that were not present in the prior corresponding period.
The Group achieved EBITDA (excluding signiﬁcant items) of $38.7 million for the year ended 30 June
2021, down from $44.4 million in the prior year. The Group continued to deliver strong results while
increasing investment in people, operations and marketing to accelerate current and future Underlying
Sales through heightened brand awareness and customer acquisition across three regions (APAC,
North America and Clearpay3) and nine countries.
The Group recorded a Loss after tax of $159.4 million for the year ended 30 June 2021, an increase on the
prior year loss of $22.9 million. The Loss after tax was primarily driven by the net loss on ﬁnancial
liabilities at fair value of $96.8 million, one-off items of $18.1 million and share-based payments of $59.0
million.
●
The net loss on ﬁnancial liabilities at fair value is non-cash and relates to an increase in the
valuation of the Clearpay Put Options liability for the remaining shares in Clearpay Finance Limited
(Afterpay’s UK operations or Clearpay UK) held by ThinkSmart Limited. The increased valuation
reﬂects better than expected results for the year, improvements due to the forecast future cash
ﬂows and increases in broader market valuations for similar businesses.
●
One-off amounts relate to items and investments that are non-recurring in nature.
●
Share-based payments relate to the investment in eligible employees across the Group who were
issued share-based equity in line with the Group’s remuneration framework. The increase on prior
year was due to the increase in Afterpay’s share price and growth in employee numbers.
Table 1 Summary Financial Results
2021
2020
Change
Change
For the year ended 30 June
$m
$m
$m
%
Total income
924.7
519.2
405.5
78%
Cost of sales⁴
(249.6)
(134.3)
(115.3)
(86)%
Receivables impairment expenses⁴
(195.1)
(94.5)
(100.6)
(106)%
Employment expenses⁴
(150.9)
(86.1)
(64.8)
(75)%
Operating expenses⁴
(298.6)
(146.3)
(152.3)
(104)%
Afterpay Net Margin²
434.1
250.2
183.9
74%
EBITDA (excl. signiﬁcant items)⁵
38.7
44.4
(5.7)
(13)%
Loss before tax
(194.2)
(26.8)
(167.4)
(625)%
Loss after tax
(159.4)
(22.9)
(136.5)
(597)%
Change calculations may not equate due to rounding.
1.
Constant currency is provided to facilitate comparability of Afterpay’s operational performance, excluding the impact of foreign
currency ﬂuctuations. Constant currency is a non-IFRS measure and has been calculated by translating the results for the year ended
30 June 2021 at the effective exchange rates for the prior year ended 30 June 2020 for each of Underlying Sales, Total Income and
Afterpay Income.
2.
Afterpay Net Margin is a non-IFRS measure that is not audited but is a key ﬁnancial metric used at a Group level. Pay Now is not
included within Afterpay Net Margin as it is not related to the Afterpay platform
3.
Clearpay: Comprises the Clearpay platforms in the United Kingdom and Europe
4.
Expenses include one-off items of $18.1 million (2020: $6.4 million) and foreign currency gains of $9.9 million (2020: $19.9 million) which
are not included in the calculation of EBITDA (excluding signiﬁcant items). One-off items relate to international expansion costs,
business combinations, and impairment. There were no AUSTRAC or regulatory related one-off costs in the period.
5.
EBITDA (excluding signiﬁcant items) is a non-IFRS measure that is not audited but is a key ﬁnancial metric used by management at a
Group level. EBITDA (excluding signiﬁcant items) excludes foreign currency gains, share-based payment expenses, net loss on
ﬁnancial liabilities at fair value, share of loss of associate, gain on dilution of shareholding in associate and one-off items.
28

2. Afterpay Platform Key Drivers
The ﬁnancial results of Afterpay are supported by a number of underlying drivers including Underlying
Sales, Active Customers, and Active Merchants. Afterpay tracks and reports on these drivers in its half
year and full-year results announcements.
Table 2 Summary Platform Drivers
For the year ended 30 June
2021
2020
Change
Change %
Underlying Sales ($m)
21,087.4
11,114.2
9,973.2
90%
Underlying Sales ($m) - const. currency¹
22,422.8
11,114.2
11,308.6
102%
Active Customers (millions)²
16.2
9.9
6.3
63%
Active Merchants ('000s)²
98.2
55.4
42.8
77%
Change calculations may not equate due to rounding. 1. Constant currency is a non-IFRS measure and has been calculated by translating
the results for the year ended 30 June 2021 at the effective exchange rates for the prior year ended 30 June 2020 for Underlying Sales. 2.
Active is deﬁned as having transacted at least once in the last 12 months to 30 June.
2.1.
Underlying Sales
Underlying Sales were $21.1 billion in the year ended 30 June 2021, a 90% increase on the prior year
driven by strong growth across all regions.
Table 3 Underlying Sales
For the year ended 30 June
2021
2020
Change
Change %
APAC
9,447.1
6,566.9
2,880.3
44%
North America
9,818.9
3,990.4
5,828.6
146%
Clearpay
1,821.3
557.0
1,264.4
227%
Underlying Sales ($m)
21,087.4
11,114.2
9,973.2
90%
Change calculations may not equate due to rounding.
For the ﬁrst time, North America exceeded APAC as our largest region as measured by Underlying
Sales. Expansion within North America, the world’s largest retail region, continues at an impressive rate
despite growing off a larger base.
Clearpay growth was driven primarily by the UK, with Clearpay EU launched during the last quarter of
the period.
29

2.2.
Active Customers
Afterpay ended the year with 16.2 million Active Customers1, an increase of 63% on the prior year. The
average number of orders per Active Customer in the period (otherwise referred to as customer
frequency) also continued to increase across all regions. Afterpay continues to attract a signiﬁcant
number of new and repeat customers to the platform, as the offering is enhanced and our list of
merchant partners expands.
North America and Clearpay are driving growth in new customers while customer frequency is highest
in Afterpay’s more mature APAC market, reaching an average of 17x for active APAC customers.
Frequency in North America and Clearpay also increased, as both regions experienced growth of over
40% compared to the prior period. These combined factors continue to power growth in Underlying
Sales.
Table 4 Active Customers
As at 30 June
2021
2020
Change %
APAC
3.6
3.3
8%
North America
10.5
5.6
88%
Clearpay
2.1
1.0
104%
Active Customers (millions)¹
16.2
9.9
63%
Change calculations may not equate due to rounding. 1. Active is deﬁned as having transacted at least once in the last 12 months.
2.3.
Active Merchants
Afterpay Active Merchants1 grew to more than 98,000 by the end of the year, an increase of
approximately 43,000 or 77%.
Afterpay continues to add merchants of all sizes to the platform across each region. Enterprise
merchants contributed 65% of Group Underlying Sales in FY21, a slight increase on the prior year.
As regions reopen from COVID-19 restrictions, Afterpay has continued to integrate merchants to both its
in-store and online offering. This omnichannel approach is continuing to drive higher customer
frequency and higher incremental spend across APAC and the United States where Afterpay has
launched its in-store card.
Table 5 Active Merchants
As at 30 June
2021
2020
Change %
APAC
63.1
42.8
47%
North America
28.4
11.5
148%
Clearpay
6.7
1.1
501%
Active Merchants ('000s)
98.2
55.4
77%
Change calculations may not equate due to rounding. 1. Active is deﬁned as having transacted at least once in the last 12 months.
30

3. Total Income by Service
Total Income for the Group was $924.7 million for the year ended 30 June 2021, an increase of 78% on
the prior year. Afterpay generates income primarily from its Afterpay service, together with a smaller
contribution from Pay Now, each of which are discussed separately below.
Table 6 Total Income
For the year ended 30 June
2021
2020
Change
Afterpay Total Income ($m)¹
910.9
502.7
81%
Pay Now Revenue ($m)
13.8
16.5
(16)%
Total Income ($m)
924.7
519.2
78%
Change calculations may not equate due to rounding. 1. Afterpay Total Income includes Afterpay Income and Other Income, excludes Pay
Now Revenue
3.1.
Afterpay
Afterpay Total Income comprises Afterpay Income (including merchant income, afﬁliate fees and
interchange earned from the US virtual one time use card) and Other Income. Other Income is
primarily Late Fees, and also includes contributions associated with Money by Afterpay and newly
acquired non-core international products that will be discontinued.
In the year ended 30 June 2021, Afterpay Income increased by 90% on the prior year to $822.3 million.
Afterpay Income as a percentage of Afterpay Underlying Sales was 3.9% in the year, in line with the prior
year. Maintaining this key metric at 3.9% despite Underlying Sales from regions outside of APAC
increasing during the year demonstrates the value the Afterpay ecosystem is delivering to merchants.
Late Fees increased to $87.3 million from $68.8 million in the prior year. However, Late Fees have
decreased as a percentage of Underlying Sales and now represent less than 10% of Afterpay Total
Income.
Afterpay also generates revenue from the provision of the ‘Money by Afterpay’ platform for customers in
Australia. Non-core international income relates to products acquired through the Pagantis acquisition;
all related products are planned to be discontinued.
Table 7 Afterpay Total Income
For the year ended 30 June
2021
2020
Change
Afterpay Income ($m)
822.3
433.8
90%
% of Afterpay Underlying Sales
3.9%
3.9%
0.0 pp
Late Fees
87.3
68.8
27%
Money by Afterpay
0.9
-
-
Non-core international¹
0.4
-
-
Other Income ($m)
88.6
68.8
29%
Afterpay Total Income ($m)
910.9
502.7
81%
Late Fees Share of Afterpay Total Income
9.6%
13.7%
-4.1 pp
Change calculations may not equate due to rounding. 1. Non-core international includes revenue associated with Pagantis products that
are planned to be discontinued
3.2.
Pay Now
Pay Now Revenue declined by $2.7 million to $13.8 million for the year ended 30 June 2021, primarily due
to the wind down of the e-Services Australia business unit.
31

4. Expenses
Expenses increased in the year ended 30 June 2021 as the Group continued its growth and investment
in people, the Afterpay platform, customer and merchant acquisition, and expansion into new regions,
verticals and products. These investments have further solidiﬁed the Group's competitive advantage
fueling growth in this and subsequent periods. In the year ended 30 June 2021, the Group launched in
Canada as well as a number of European countries following the Pagantis transaction.
The Group did not receive any government grants or beneﬁts related to COVID-19 during the year.
4.1.
Cost of Sales
Cost of Sales for the year ended 30 June 2021 was $249.6 million, up 86% on the prior year, largely due to
increased processing and other variable costs associated with higher Underlying Sales.
Cost of Sales represented 1.2% of Underlying Sales, unchanged compared to the prior year, as beneﬁts
from global payments partnerships have offset the increased contribution from international regions
which typically have higher processing costs.
Afterpay contributed $244.8 million to Cost of Sales in the period relative to $4.6 million for Pay Now
and $0.2 million for non-core international products.
Table 8 Cost of Sales
For the year ended 30 June
2021
2020
Change %
Cost of Sales ($m)
249.6
134.3
86%
% of Afterpay Underlying Sales
1.2%
1.2%
0 pp
Change calculations may not equate due to rounding.
4.2.
Losses
4.2.1.
Receivables Impairment Expense
Receivables Impairment Expense was $195.1 million for the year ended 30 June 2021, an increase of
$100.6 million on the prior year. Gross Loss represented $194.9 million of the Receivables Impairment
Expense, with Non-Core International products representing the balance.
Gross Loss represented 0.9% of Underlying Sales. Gross Loss remained consistent with the prior period,
a strong result given increased Underlying Sales contribution from the newer Clearpay and North
American regions which, due to their earlier growth phase, have initially higher losses relative to the
more mature APAC region.
Afterpay’s proprietary risk management techniques and high proportion of returning customers (who
are lower risk), has ensured Gross Loss as a percentage of Underlying Sales remained ﬂat during a
period in which 6 million new customers joined the platform and Underlying Sales increased by 90%.
Ongoing enhancement of Afterpay’s risk management and the beneﬁts and insights derived from
returning customers means Afterpay is able to continuously manage Gross Loss.
Table 9 Gross Loss
For the year ended 30 June
2021
2020
Change %
Gross Loss ($m)
194.9
94.5
106%
% of Afterpay Underlying Sales
0.9%
0.9%
0.0 pp
Non-core international
0.2
-
-
Receivables impairment expense ($m)¹
195.1
94.5
106%
Change calculations may not equate due to rounding. 1. Receivables impairment expenses equals the sum of Afterpay Gross Loss
($194.9m) and non-core international receivable impairment expenses ($0.2m). Non-core international receivable impairment expense is
included in one-off items.
32

4.2.2.
Net Transaction Loss
Gross Loss is a key input into Afterpay’s Net Transaction Loss (NTL), a management metric comprising
the sum of Gross Loss, Chargebacks, and Debt Recovery Costs, less Afterpay Late Fees. Chargebacks
and Debt Recovery Costs are reported within Other Operating Expenses.
NTL for the year ended 30 June 2021 was $132.6 million, or 0.6% of Underlying Sales, increasing by 0.2
percentage points. This increase was driven by a lower contribution of Late Fees, which declined by 0.2
percentage points to 0.4% of Underlying Sales.
All other inputs to NTL were held ﬂat during yet another year of high Underlying Sales growth.
Table 10 NTL
For the year ended 30 June
2021
2020
Change %
NTL ($m)
132.6
42.8
210%
% of Afterpay Underlying Sales
0.6%
0.4%
0.2 pp
Change calculations may not equate due to rounding.
4.3.
Employment Expenses
Employment Expenses were $150.9 million for the year ended 30 June 2021, up 75% on the prior year but
slightly lower as a percentage of Underlying Sales by 0.1 percentage points.
The growth in Employment Expenses in dollar terms reﬂects the Group’s continued investment in
talent globally, particularly across the sales, marketing, technology and product functions, to support
Afterpay’s continued global expansion and to position the Group for accelerated growth. Afterpay has
doubled the number of employees with the team now comprising approximately 1,300 employees
globally.
Afterpay plans to continue to invest in talent to accelerate sector penetration as well as regional and
global expansion. In the current ﬁnancial year the Group has invested in skills and talents to build new
product offerings for customers, such as Money by Afterpay. This and other innovations will allow the
Group to continue to serve Afterpay customers and merchants in new ways.
Table 11 Employment Expenses
For the year ended 30 June
2021
2020
Change %
Employment Expenses ($m)¹
150.9
86.1
75%
% of Afterpay Underlying Sales
0.7%
0.8%
-0.1 pp
Change calculations may not equate due to rounding. 1. Employment expenses include $1.4m of one-off items relating to non-core
operations.
4.4.
Operating Expenses
Operating Expenses, which comprise Marketing and Other Operating Expenses, were $298.6 million for
the year ended 30 June 2021, up 104% on the prior year. Operating Expenses excluding signiﬁcant items
such as one-off items and foreign currency gains were $292.1 million for the year ended 30 June 2021, up
83% on the prior year and in line as a percentage of Underlying Sales.
Table 12 Operating Expenses
For the year ended 30 June
2021
2020
Change %
Operating Expenses ($m)
298.6
146.3
104%
% of Afterpay Underlying Sales
1.4%
1.3%
0.1 pp
Operating Expenses
(excl. Signiﬁcant Items) ($m)¹
292.1
159.8
83%
% of Afterpay Underlying Sales
1.4%
1.4%
0.0 pp
Change calculations may not equate due to rounding. 1. Operating Expenses included $16.4 million of one-off items (2020: $6.4 million)
and $9.9 million of foreign currency gains (2020: $19.9 million gain)
33

4.4.1.
Marketing Expenses
Marketing Expenses were $168.8 million in the year ended 30 June 2021, up by 139% and 0.2 percentage
points of Underlying Sales compared to the prior year. Marketing Expenses includes co-marketing
initiatives with major brand merchant partners, investment in growing Afterpay brand awareness
including the global roll-out of our Pay Better campaign, growth and lifecycle marketing to support
new customer acquisition, and investments in in-store partnerships and visual merchandising.
Investment in Marketing Expenses is consistent with the stated strategy of the Group, driving merchant
and customer engagement across each region, and therefore contributing to the growth in Underlying
Sales. Further investment in marketing will continue into next ﬁnancial year.
Table 13 Marketing Expenses
For the year ended 30 June
2021
2020
Change %
Marketing Expenses ($m)
168.8
70.5
139%
% of Afterpay Underlying Sales
0.8%
0.6%
0.2 pp
Change calculations may not equate due to rounding.
4.4.2.
Other Operating Expenses
Other Operating Expenses comprise technology costs which support the global Afterpay businesses,
costs for outsourced customer services teams, and corporate costs such as legal, compliance, ﬁnance,
and other general and administrative costs.
Other Operating Expenses were $129.8 million in the year ended 30 June 2021, up 71% on the prior year
but lower as a percentage of Underlying Sales. Afterpay has been able to scale successfully over the
ﬁnancial year due to the performance of these support teams and functions, and will continue to
appropriately invest in these areas.
Other Operating Expenses included $16.4 million of one-off items1 (2020: $6.4 million) and $9.9 million of
foreign currency gains (2020: $19.9 million). Other Operating Expenses, excluding the net impact of
these items, would have been $123.3 million, representing 0.6% of Afterpay Underlying Sales, 0.2
percentage points lower than the prior year.
Table 14 Other Operating Expenses
For the year ended 30 June
2021
2020
Change %
Other Operating Expenses ($m)
129.8
75.8
71%
% of Afterpay Underlying Sales
0.6%
0.7%
-0.1 pp
Other Operating Expenses
(excl. Signiﬁcant Items) ($m)¹
123.3
89.3
38%
% of Afterpay Underlying Sales
0.6%
0.8%
-0.2 pp
Change calculations may not equate due to rounding. 1. Total one off items of $18.1 million includes $16.4 million in Other Operating
Expenses, $0.2 million in receivables impairment expense and $1.4 million in Employment Expenses.
34

5. Margin & EBITDA
5.1.
Afterpay Net Margin
Afterpay Net Margin is a non-IFRS measure that is not audited but is a key ﬁnancial metric used by
management to track Afterpay’s Gross Proﬁt inclusive of losses and funding costs.
Afterpay Net Margin was $434.1 million in the year ended 30 June 2021, up 74% on the prior year.
Afterpay Net Margin is equal to Afterpay Net Transaction Margin1 earned directly from Underlying Sales
($432.8 million), plus other income and margin associated with the Afterpay platform ($1.3 million,
primarily related to Money by Afterpay).
Afterpay Net Margin as a percentage of Underlying Sales was 2.1%, down from the prior period primarily
due to lower late fees. The low percentage contribution of late fees is a distinguishing characteristic of
the Afterpay business model and contributes to customer loyalty and trust.
Table 15 Afterpay Net Margin
For the year ended 30 June
2021
2020
Change %
Afterpay Net Margin ($m)
434.1
250.2
74%
% of Afterpay Underlying Sales
2.1%
2.3%
-0.2 pp
Change calculations may not equate due to rounding.
A reconciliation of Gross Proﬁt as presented in the Consolidated Statement of Comprehensive Income
to Net Margin is set out in Figure 1.
Figure 1 Gross Proﬁt bridge to Afterpay Net Margin ($ million)
Note: Change calculations may not equate due to rounding.
1.
Afterpay Net Transaction Margin is comprised of Afterpay Income less Afterpay variable costs, including Cost of Sales (excluding Pay
Now cost of sales), NTL, and ﬁnance costs associated with external receivables funding.
2.
Finance cost associated with external receivables funding: reported in ﬁnance costs but included in Net Margin. Excludes ﬁnance
costs relating to the APT Convertible Notes, amortisation of capitalised borrowing costs, lease expense, and interest income.
Methodology consistent with prior periods.
35

5.2.
EBITDA (excluding signiﬁcant items)
The Group’s EBITDA (excluding signiﬁcant items) was $38.7 million in the year ended 30 June 2021,
down 13% on the prior year. The decline in EBITDA (excluding signiﬁcant items) compared to the prior
year reﬂects investments in total operating expenses, including investment to drive product innovation
and launch Afterpay into new regions. This investment has marginally exceeded the growth in Group
Net Margin during the year, and was considered necessary to accelerate current and future Underlying
Sales growth.
Table 16 EBITDA (excluding signiﬁcant items)
For the year ended 30 June
2021
2020
Change %
EBITDA (excl. signiﬁcant items) ($m)
38.7
44.4
(13)%
Change calculations may not equate due to rounding.
A reconciliation from Loss after tax as presented in the Consolidated Statement of Comprehensive
Income to EBITDA (excluding signiﬁcant items) is set out in Figure 2 below. EBITDA (excluding
signiﬁcant items) is a non-IFRS measure that has not been audited but is a key ﬁnancial metric used by
management to operate the business at a Group level.
Figure 2 Reconciliation from Loss after tax to EBITDA (excluding signiﬁcant items) ($ million)
36

6. Constant Currency
Afterpay’s reported results are impacted by movements in foreign exchange rates given the extent of
the Group’s global operations and growth in contribution from international markets outside of
Australia.
Constant currency (CC) is provided to facilitate comparability of Afterpay’s operational performance,
excluding the impact of foreign currency ﬂuctuations. Constant currency is a non-IFRS measure and
has been calculated by translating the results for the year ended 30 June 2021 at the effective exchange
rates for the prior year ended 30 June 2020 for each of Underlying Sales and Afterpay Income.
Table 17 Constant Currency
For the year ended 30 June
2021 CC
2021
2020
Change
in CC %
Reported
Change %
Underlying Sales ($m)
22,422.8
21,087.4
11,114.2
102%
90%
Total Income ($m)
978.9
924.7
519.2
89%
78%
Afterpay Income ($m)
875.1
822.3
433.8
102%
90%
Change calculations may not equate due to rounding.
7. Financial Position
The Group’s ﬁnancial position has increased to Net Assets of $1,303.9 million as at 30 June 2021, up from
$946.4 million at 30 June 2020. The Group’s ﬁnancial position, across both assets and liabilities, was
impacted by the capital raising of $786.2 million in July 2020 and issuance of the $1,500.0 million APT
Convertible Note in March 2021.
Total Assets were $3,116.2 million, an increase of $1,507.7 million, which is primarily due to growth in Cash
and cash equivalents (up $541.1 million) and Receivables (up $672.2 million). The increase in Receivables
to $1,454.1 million at 30 June 2021 was primarily due to the continued growth in Underlying Sales.
Total Liabilities were $1,812.3 million, an increase of $1,150.1 million from 30 June 2020 primarily due to
the growth in Borrowings (up $824.8 million), Other ﬁnancial liabilities (up $163.6 million) and Trade and
other payables (up $123.6 million). The increase in Borrowings to $1,286.4 million at 30 June 2021 was due
to the issuance of the $1,500.0 million APT Convertible Notes, while the increase in Trade and other
payables was due to merchant payments. The increase in Other ﬁnancial liabilities is primarily due to
the increase in the valuation of the Clearpay Put Option liability of $96.8 million, reﬂecting
improvements to forecast future cash ﬂows of Afterpay’s UK operations and increases in broader
market valuations for similar businesses. Other ﬁnancial liabilities also includes $66.8 million for the
deferred and contingent consideration for the Pagantis acquisition completed in March 2021.
37

8. Capital Management
The Group is focused on capital management to ensure that it has sufﬁcient cash and available facilities
to meet current and future funding requirements and growth aspirations. As at 30 June 2021, the
Group’s Balance Sheet and Liquidity position remained strong with the launch of new, and extension of
existing warehouse funding facilities during the period. The Group’s Balance Sheet and Liquidity
position was further enhanced following an equity capital raising in July 2020 and the issuance of the
APT Convertible Notes in March 2021.
8.1. Net Cash / Debt
As at 30 June 2021, Net Debt was $125.4 million, comprising Total Cash of $1,161.0 million less Borrowings
of $1,286.4 million. Net Debt was $271.4 million lower than the prior year Net Cash position of $146.0
million. Movements are primarily due to funding of growth in Receivables (which have increased by
$672.2 million from the prior year) and payments made to US ESOP participants and Matrix, partially
offset by the issuance of the $1,500.0 million APT Convertible Notes and equity capital raisings during
the year.
Table 18 Net Cash / (Debt)
As at 30 June
2021
$m
2020
$m
Change
$m
Cash and Cash Equivalents
1,147.1
606.0
541.1
Restricted Cash1
13.8
1.5
12.3
Total Cash2
1,161.0
607.6
553.4
Borrowings
(1,286.4)
(461.6)
(824.8)
Net (Debt) / Cash
(125.4)
146.0
(271.4)
Change calculations may not equate due to rounding.
1.
Restricted Cash relates to cash held with banks and other ﬁnancial service providers as collateral for daily cash settlements with
merchants and payments to funding providers. Included within Other Financial Assets in the Financial Statements.
2.
Sum calculation for Total Cash may not equate due to rounding.
8.2 Debt Funding
The Group’s debt funding is diversiﬁed by both source and maturity. During the year ended 30 June
2021, Afterpay:
●
Extended all previously existing facilities for a period of at least 12 months;
●
Increased the NZ$50 million NZ receivables warehouse funding facility with Bank of New
Zealand to NZ$100 million;
●
Established a £125 million UK receivables warehouse funding facility with Citi with a FY23
maturity;
●
Established a £50 million UK receivables warehouse funding facility with NAB with a FY23
maturity; and
●
Issued the $1.5 billion APT Convertible Notes with a FY26 maturity.
Afterpay has no debt maturity within the next 12 months (earliest maturity is December 2022), with a
weighted average debt facility maturity of ~3.3 years as at the date of this report.
38

The table below sets out the Group’s debt funding sources as at the date of this report.
Table 19 Debt funding sources
Facility
Region
Provider
Facility size
Drawn
Maturity
Receivables Warehouse Funding
AU
Citi
$200m
nil
Dec-23
Receivables Warehouse Funding
AU
NAB
$300m
nil
Dec-23
Receivables Warehouse Funding
NZ
BNZ
NZ$100m
NZ$35.0m
Jun-23
Receivables Warehouse Funding
UK
Citi
£125m
nil
Feb-23
Receivables Warehouse Funding
UK
NAB
£50m
nil
Feb-23
Receivables Warehouse Funding
US
GS
US$200m
nil
Dec-22
Receivables Warehouse Funding
US
Citi
US$200m
nil
May-24
APT Convertible Notes
Group
-
$1.5bn
$1.5bn
Mar-26
8.3 Liquidity & Growth Capacity
The Group maintains a strong liquidity position and capacity to fund future growth.
Liquidity for Afterpay is calculated as:
●
$1,147.1 million Cash and Cash Equivalents balance; plus
●
$1,151.6 million undrawn capacity under receivables warehouse facilities.
Afterpay had Liquidity of $2,298.7 million at 30 June 2021 to fund the business. Undrawn capacity under
the receivables warehouse facilities can be readily converted into cash at any time by drawing down
debt.
The nature of Afterpay’s warehouse facilities is that funds become available in line with the growth in
Receivables. Growth Capacity for Afterpay reﬂects:
●
the facility limit; less
●
drawn debt; less
●
the undrawn capacity under available receivables warehouse facilities.
Afterpay had Growth Capacity of $264.4 million at 30 June 2021. Growth capacity represents headroom
in existing warehouse facilities to fund growth in Receivables. As Receivables grow, growth capacity
transitions to undrawn warehouse capacity which contributes to liquidity.
The combination of Liquidity and Growth Capacity is $2,563.2 million. This provides Afterpay with the
ability to fund in excess of $40 billion1 in annualised Underlying Sales above the current annualised
Underlying Sales run-rate of $24 billion (Q4 FY21 annualised).
Table 20 Liquidity and Growth Capacity
2021
2020
Change
As at 30 June
$m
$m
$m
Cash and Cash Equivalents
1,147.1
606.0
541.1
Undrawn warehouse capacity
1,151.6
122.4
1,029.2
Liquidity
2,298.7
728.4
1,570.3
Growth capacity
264.4
541.8
(277.4)
Total Liquidity & Growth Capacity
2,563.2
1,270.2
1,293.0
Change calculations may not equate due to rounding. 1. Estimated calculation based on the terms of Afterpay’s existing warehouse
funding facilities and historical performance of receivables.
39

9. Outlook for FY22
Afterpay will continue to invest for growth in FY22. With newer regions tracking in line with APAC
blueprint, and additional regions coming online in FY22, we will continue to strategically invest in order
to:
●
Appropriately scale our infrastructure and people resources to continue topline growth in
established and new regions.
●
Pursue co-marketing opportunities and invest in our global and local retail partnerships.
●
Launch and grow new and innovative products such as Money by Afterpay, and develop new
revenue streams that leverage our established ecosystem.
10. Other
This Operating and Financial Review should be read in conjunction with the FY21 in Review section of
this Annual Report.
Any other detail on likely developments in the operations of the consolidated entity and prospects for
future ﬁnancial years have not been included in this report because the Directors believe it to be
commercial-in-conﬁdence and therefore likely to result in unreasonable prejudice to the Group.
40

Key Risks & Business
Challenges
The Group effectively manages risks and will continue to strengthen and invest in enterprise risk
resources and capability to proactively identify and manage risks as our operations expand. The
principal risks and business challenges for the Group are:
Key Risks
Loss of, or failure to attract or retain, key management personnel
●
Risks associated with an increase in personnel working from home and any associated
workplace health and safety issues.
Ability to continue driving customer and merchant growth
●
Ability to retain and grow retail merchant client base;
●
Ability to retain and grow customers in all regions;
●
Ability to increase transaction volumes, merchant and customer numbers;
●
Increased competition and new sector entrants;
●
Ability of the Group’s technology to integrate with third-party platforms, particularly
websites, point of sale systems, and other merchant systems;
●
Risks associated with the emergence of new technologies and customer requirements; and
●
Risks associated with macroeconomic factors, including a slowdown in merchant and
customer growth resulting from the COVID-19 pandemic.
Risks related to technology infrastructure, performance and intellectual property
●
Failures or disruption to technology systems and communication networks;
●
Third party banking and payment processing performance;
●
Exposure to potential security breaches and data protection issues;
●
Protection and ownership of technology and intellectual property;
●
Capacity constraints on platform and network infrastructure; and
●
Risks that the Group’s technology may be superseded by other technology or changes in
business practice.
Credit, fraud and other related risks
●
Risk of Afterpay customers not repaying;
●
Risk of fraud, both internal and external; and
●
Other credit and fraud related risks driven by the macro-economic environment.
Access to funding to support the growth in instalment payments receivables
●
Access to equity funding sources; and
●
Access to debt funding sources.
Risks associated with compliance and changes to the regulatory environment that may impact the
Group’s products, product delivery, brand and/or ﬁnancial returns (due to potential higher
compliance costs). Some of these risks may include:
●
Financial product regulation;
●
Payment system regulation;
●
Regulatory interpretation;
●
AML / CTF laws; and
●
Privacy laws.
41

Information on Directors
Elana Rubin AM (63, Melbourne AU)
Independent Chair and
Non-Executive Director
Member of the Audit, Risk & Compliance Committee
Member of the People, Remuneration & Nomination
Committee
Chair of the AML/CTF & Regulatory Review Sub-Committee
Anthony Eisen (49, Melbourne AU)
Co-founder, Co-Chief Executive Ofﬁcer and
Managing Director
Member of the AML/CTF & Regulatory Review Sub-Committee
Background and Experience: Elana was
appointed Chair on 25 May 2020. She previously
served as Interim Chair from 1 July 2019 and has
been an Independent Non-Executive Director
of Afterpay since 30 March 2017.
Elana has over 20 years’ experience as a director
of a number of public and private companies,
with extensive experience in property,
insurance and ﬁnancial services.
Elana has a Bachelor of Arts (Hons) and Master
of Arts from University of Melbourne. She is a
Fellow of the Australian Institute of Company
Directors and a Senior Fellow of Financial
Services Institute of Australasia.
Other Roles: Elana is currently Acting Chair of
Slater and Gordon Limited (ASX: SGH) and a
Non-Executive Director of Telstra Corporation
Limited (ASX: TLS). She is also a director of
several unlisted companies and/or government
bodies. Elana was previously a Non-Executive
Director of Mirvac Limited (ASX: MGR). She was
the former Chair of AustralianSuper and the
Victorian WorkCover Authority.
Interests in Shares and Options1:
●
65,151 ordinary shares in Afterpay Limited
Background and Experience: Anthony was
appointed CEO and Managing Director on 1
July 2019. Prior to this, he served as Executive
Chairman of Afterpay for two years.
Anthony has over 25 years’ experience in
investing, public company directorships and
providing corporate advice across a variety of
sectors. Prior to co-founding Afterpay, he was
the Chief Investment Ofﬁcer at Guinness Peat
Group (GPG). He was actively involved in a
number of ﬁnancial services, software and
technology companies in which GPG was a
major shareholder. Before GPG, Anthony was
involved in investment banking, specialising in
mergers and acquisitions.
Anthony holds a Bachelor of Commerce
(Finance and Accounting) from UNSW and he
is a member of the Institute of Chartered
Accountants ANZ..
Other Roles: Anthony is currently a Director of
Stone & Chalk Pty Ltd.
Interests in Shares and Options1:
●
19,455,963 ordinary shares in Afterpay
Limited
●
125,000 unlisted options, with an exercise
price of $37.31 per option and an expiry
date of 1 July 2024
●
40,203 unlisted options, with an exercise
price of $98.97 per option and an expiry
date of 1 July 2025
1. As at 30 June 2021.
42

Nick Molnar (31, Sydney AU)
Co-founder, Co-Chief Executive Ofﬁcer and
Managing Director
Gary Briggs (58, Seattle US)
Independent Non-Executive Director
Chair of the People, Remuneration & Nomination Committee
Background and Experience: Nick has been
an Executive Director of Afterpay since 5 July
2017. He was Global Chief Revenue Ofﬁcer from
1 July 2019 until his appointment as Co-CEO and
Managing Director on 17 November 2020.
Nick has extensive experience in online retail.
Prior to co-founding Afterpay, Nick launched
the leading American online jeweller, Ice.com,
into Australia under the local brand
Iceonline.com.au. Nick successfully grew Ice in
Australia to become the largest online-only
jewellery and watch retailer. Prior to launching
Ice, Nick was an Investment Analyst at venture
capital fund M.H. Carnegie & Co., where he was
primarily responsible for growth stage
investment opportunities in the technology
sector.
Nick holds a Bachelor of Commerce from
Sydney University.
Interests in Shares and Options1:
●
19,455,963 ordinary shares in Afterpay
Limited
●
125,000 unlisted options, with an exercise
price of $37.31 per option and an expiry
date of 1 July 2024
●
40,203 unlisted options, with an exercise
price of $98.97 per option and an expiry
date of 1 July 2025
Background and Experience: Gary was
appointed as an independent Non-Executive
Director on 1 January 2020.
From 2019-2021 Gary was Chairman of
Hawkﬁsh, a digital agency focused on
Democratic causes and initiatives. Prior to this,
he was the Chief Marketing Ofﬁcer of Facebook
(responsible for the Company’s brand,
consumer, and product marketing), and he
worked at Google where he led marketing
efforts for search, maps, commerce, Chrome,
Google+, Google.org, and the Google brand
overall. He also led marketing for Motorola
Mobility, upon its acquisition by Google. Before
Google, Gary was CEO at Plastic Jungle, a gift
card startup, and he worked at eBay in the roles
of Vice President of Consumer Marketing,
General Manager of eBay Canada, Global
Marketing Head of PayPal, and CMO of eBay
North America. Earlier in his career, Gary
worked for Pepsi, where he launched Aquaﬁna,
Pepsi's joint venture with Starbucks and was
Director of Brand, and for IBM running
worldwide brand strategy. He was also an
engagement manager at McKinsey.
Gary has a Bachelor of Arts degree from Brown
University and a Masters in Management from
the Kellogg School of Management,
Northwestern University.
Other Roles: Gary also serves on the Boards of
Etsy, Inc (NASDAQ: Etsy) and Petco, and is an
advisor to several early stage companies.
Interests in Shares and Options1:
●
2,630 ordinary shares in Afterpay Limited
1. As at 30 June 2021.
43

Pat O’Sullivan (57, Sydney AU)
Independent Non-Executive Director
Chair of the Audit, Risk & Compliance Committee
Member of the People, Remuneration & Nomination
Committee
Sharon Rothstein (64, New York US)
Independent Non-Executive Director
Member of the People, Remuneration & Nomination
Committee
Background and Experience: Pat was
appointed as an independent Non-Executive
Director on 1 March 2020.
Pat previously worked for 30 years in various
senior ﬁnancial and operational roles in Ireland,
the US, Australia and New Zealand across a
number of industries including traditional and
online media, telecommunications, fast moving
consumer goods and professional accounting.
He was previously the Chief Financial Ofﬁcer of
Optus and the Chief Operating Ofﬁcer and
Finance Director of Nine Entertainment Co Pty
Limited (formerly PBL Media Pty Ltd).
Pat is a member of The Institute of Chartered
Accountants in Ireland and Australia. He is a
graduate of the Harvard Business School’s
Advanced Management Program.
Other Roles: Pat is currently Chairman of
carsales.com Limited (ASX:CAR), Independent
Non-Executive Director of TechnologyOne
Limited (ASX:TNE) and Deputy Chair of Calvary
Health. Pat was previously an Independent
Non-Executive Director of the following ASX
listed companies; APN Outdoor (ASX: APO),
iSentia (ASX:ISD), Marley Spoon (ASX:MMM),
iSelect (ASX:ISU) and iiNet (ASX: IIN). He is also
Chairman of dreams2live4 an Australian charity
that grants dreams to people with metastatic
cancer.
Interests in Shares and Options1:
●
7,473 ordinary shares in Afterpay Limited
Background and Experience: Sharon was
appointed as an independent Non-Executive
Director on 1 June 2020.
Sharon currently serves as an Operating
Partner at growth equity ﬁrm, Stripes Group.
She was previously the Executive Vice
President, Global Chief Marketing Ofﬁcer of
Starbucks Corporation for ﬁve years, following
her position as Senior Vice President of
Marketing at Sephora. Sharon has held senior
marketing and brand management positions
with Godiva, Starwood Hotels and Resorts,
Nabisco Biscuit Company and Procter &
Gamble.
She holds a Bachelor of Commerce from the
University of British Columbia and an M.B.A.
from the University of California, Los Angeles.
Other Roles: Sharon is currently a Director of
Yelp Inc (NYSE: YELP), and Non-Executive
Director of InterContinental Hotels Group (LON:
IHG).
Interests in Shares and Options1:
●
3,350 ordinary shares in Afterpay Limited
1. As at 30 June 2021.
44

Dana Stalder (53, San Francisco US)
Independent Non-Executive Director
Member of the Audit, Risk & Compliance Committee
Background and Experience: Dana was
appointed as an independent Non-Executive
Director on 24 January 2018.
He brings over 20 years’ experience as a
technology company operator and investor. His
experience spans multiple disciplines including
sales, marketing, ﬁnance, technology and
product management at companies such as
eBay, Netscape and PayPal. Dana is an expert in
FinTech and an active FinTech and consumer
internet investor in Silicon Valley. Dana holds a
Bachelor of Science in Commerce from Santa
Clara University, and began his career at Ernst &
Young advising technology companies. His
executive experience extends to positions held
at Netscape Communications, AOL,
Respond.com, eBay and PayPal before joining
Matrix Partners in 2008 as a General Partner.
His investments focus primarily on FinTech,
Consumer Marketplaces, and Enterprise
Software.
Other Roles: Dana currently serves on the
Board of Directors of several private US based
technology companies.
Interests in Shares and Options1:
●
19,300 ordinary shares in Afterpay Limited
●
Dana is a General Partner in Matrix
Partners, which is the general partner of
Matrix Partners X, L.P. and Weston & Co. X
LLC, however he does not have a relevant
interest in the APT shares and convertible
notes held by those two entities
1. As at 30 June 2021.
45

Company Secretary
Amanda Street
Company Secretary
Company Secretary since 18 August 2020
Nat McKaig
Deputy Company Secretary
Company Secretary since 15 May 2020
Background and Experience: Amanda has
over 20 years of legal, governance, company
secretariat, and other relevant experience.
Before joining Afterpay, Amanda was the
Company Secretary of Transurban Group. Prior
to Transurban, Amanda was Assistant Company
Secretary at AusNet Services, and Senior
Corporate Counsel at National Australia Bank.
Prior to her in-house work, Amanda was a
solicitor specialising in public company M&A
work with Australian law ﬁrm, King & Wood
Mallesons. Amanda has a Bachelor of Law
(Honours) and Bachelor of Commerce from the
University of Melbourne.
Background and Experience: Nat has over 15
years of legal and company secretariat
experience. Before joining Afterpay, Nat held
governance / company secretariat roles at
various listed entities, including BHP Limited,
National Australia Bank Limited and Treasury
Wine Estates Limited. Prior to that, Nat was a
solicitor specialising in commercial and
corporate law. Nat has a Bachelor of Laws,
Graduate Diploma in Company Secretarial
Practice and is a Fellow of the Governance
Institute of Australia.
46

Meetings of Directors
The number of meetings of the Board and each Board Committee held during the year ended 30 June
2021, and the number of meetings attended by each Director, are set out below:
Table 21 Board and Committee meetings
Board of Directors
Audit, Risk &
Compliance
Committee 1
People,
Remuneration &
Nomination
Committee 2
AML/CTF &
Regulatory Review
Sub-Committee 3
Board
Sub-Committees 4
Attended
Held**
Attended
Held**
Attended
Held**
Attended
Held**
Attended
Held**
Elana Rubin
AM
17
17
4
4
5
5
8
8
6
6
Anthony
Eisen
17
17
4
#
5
#
8
8
5
5
Nick Molnar
16
17
4
#
5
#
-
#
5
5
Gary Briggs
17
17
-
#
5
2
-
#
-
#
Pat O’Sullivan
17
17
4
4
5
5
-
#
6
6
Sharon
Rothstein
17
17
2
#
5
5
-
#
-
#
Dana Stalder
16
17
4
4
-
#
-
#
2
2
#
Not a member of the relevant Committee during FY21. Details of current Committee memberships are set out in our Corporate
Governance Statement (https://corporate.afterpay.com/investors/corporate-governance).
**
Number of meetings held during FY21 that the Director was eligible to attend.
1.
Anthony Eisen, Nick Molnar and Sharon Rothstein were not members of the Audit, Risk & Compliance Committee during FY21 but
attended meetings as observers.
2.
Anthony Eisen and Nick Molnar were not members of the People, Remuneration & Nomination Committee during FY21 but
attended meetings as observers. They were excluded from discussions involving their remuneration during meetings that they
attended. Gary Briggs was appointed Chair of the Committee on 24 February 2021. Prior to that he attended meetings as an
observer.
3.
The Executive Vice President, Public Policy and External Affairs and the Chief Enterprise Risk Ofﬁcer are also members of the
AML/CTF & Regulatory Review Sub-Committee.
4.
During FY21 the Board established other Sub-Committees to provide oversight of signiﬁcant projects (and ﬁnal approvals within
certain Board-approved parameters). For example, Sub-Committees were established to oversee transactions to increase our
underlying interest in Afterpay US completed in April 2021 , and in respect of the proposed acquisition by Square, Inc of 100% of
Afterpay’s issued share capital by way of a scheme of arrangement announced on 2 August 2021. Between 1 July 2021 and 2 August
2021, a further 17 Board and Sub-Committee meetings were held in respect of the Square transaction.
47

Signiﬁcant Changes in the
State of Affairs
In the opinion of the Directors, there were no signiﬁcant changes in the state of affairs of the
consolidated entity during the ﬁnancial period, except as otherwise noted in this report.
Signiﬁcant Events Subsequent
to the End of the Year
With the exception of the items listed below, the Directors are not aware of any other matters or
circumstances that have arisen since 30 June 2021 that have signiﬁcantly affected or may signiﬁcantly
affect the operations of the consolidated entity in subsequent ﬁnancial years, the results of those
operations, or the state of affairs of the consolidated entity in future ﬁnancial years.
Proposed acquisition by Square, Inc.
In August 2021, Square, Inc. (Square) and Afterpay entered into a Scheme Implementation Deed (SID)
under which Square has agreed to acquire all of the issued shares in Afterpay by way of a
recommended court-approved Scheme of Arrangement (The Transaction). The Transaction has an
implied value of approximately US$29 billion ($39 billion) based on the closing price of Square common
stock on 30 July 2021.
The acquisition aims to enable Square and Afterpay to better deliver compelling ﬁnancial products and
services that expand access to more consumers and drive incremental revenue for merchants of all
sizes.
Under the terms of the SID, which has been approved by the members of the Boards of Directors of
both Square and Afterpay, Afterpay shareholders will receive a ﬁxed exchange ratio of 0.375 Square
shares for each Afterpay ordinary share held on the record date (Consideration). Square may elect to pay
1% of Consideration in cash.
Square has agreed to establish a secondary listing on the Australian Securities Exchange (ASX) to allow
Afterpay shareholders to trade Square shares via CHESS Depositary Interests (CDIs) on the ASX. These
CDIs are expected to be eligible for S&P index inclusion in Australia. Afterpay shareholders will be able
to elect whether to receive the Consideration in NYSE listed Square Class A common stock or CDIs.
The ﬁnancial effects of the Transaction, including impact on any existing contractual arrangements,
have not been recognised as at 30 June 2021.
The Transaction is expected to complete in the ﬁrst quarter of calendar year 2022, subject to the
satisfaction of certain closing conditions, including approval from both Square and Afterpay
shareholders.
Investment in Postpay
In July 2021, the Group acquired a 12.5% equity stake in Postpay Technology Limited, a Dubai-based
BNPL business, for US$5.0 million.
48

Dividends
No dividends were declared or paid to shareholders during the year.
Share-based Payment Plans
Details of share-based payment plans are set out in Note 22 of the Financial Statements.
Sustainability
Afterpay understands the importance of considering the impact of environmental and social factors on
the sustainability of its businesses. Pages 17 to 23 disclose climate change information and sustainability
initiatives that are in place across the Group.
The Group conﬁrms that it is not subject to any particular or signiﬁcant environmental legislation under
a law of the Commonwealth, State or Territory law of Australia or in any of the other jurisdictions that
Afterpay currently, or is soon to, have a presence in.
Corporate Governance
Afterpay is committed to good governance, transparency and accountability. The Board believes this is
essential for the performance and sustainability of the business, and to protect and enhance the
interests of shareholders and other stakeholders.
Afterpay’s governance framework plays a critical role in helping the business deliver on its strategy. It
provides the structure through which business objectives are set, performance is monitored, and risks
are managed, and it provides guidance on the standards of behaviour expected of Afterpay’s people.
Afterpay’s governance framework, including our statement of compliance with the 4th edition of the
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, is
outlined in our FY21 Corporate Governance Statement, which is available on Afterpay’s website at
https://corporate.afterpay.com/investors/corporate-governance, together with key governance
documents, including charters and policies.
Remuneration Report
The Remuneration Report set out on pages 53 to 79 forms part of this Directors’ Report.
49

Insurance of Directors
and Ofﬁcers
During the year, the Group paid a premium for a Directors and Ofﬁcers Liability Insurance Policy. This
policy covers Directors and Ofﬁcers of the Group and the Consolidated entity. In accordance with
normal commercial practices under the terms of the insurance contracts, the disclosure of the nature of
the liabilities insured against and the amount of the premiums are prohibited by the policy.
Indemniﬁcation of Auditors
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for
an unspeciﬁed amount). No payment has been made to indemnify Ernst & Young during or since the
ﬁnancial year.
Proceedings on Behalf
of the Group
There are no proceedings brought or intervened in, or applications to bring or intervene in proceedings,
on behalf of the company by a member or other person entitled to do so under section 237 of the
Corporations Act 2001 (Cth).
Non-Audit Services
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Group and/or the consolidated entity are
important.
The Board of Directors has considered the services provided by the external auditor, EY, during the year
and, in accordance with the advice received from the Audit, Risk & Compliance Committee, is satisﬁed
that the provision of non-audit services (including assurance related services) by EY is compatible with
the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors
are satisﬁed that the provision of non-audit services by EY did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
●
the engagement of EY to provide non-audit services was authorised by the Chief Financial Ofﬁcer,
and where relevant, the Audit, Risk & Compliance Committee in accordance with the Group’s
External Audit Policy to ensure it did not impact the impartiality and objectivity of EY; and
●
none of the services provided by EY undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants.
Details of the audit, assurance and non-audit fees paid or payable for services provided by the auditor of
the parent entity, and its subsidiaries, are detailed in Note 26.
50

Auditor Independence
A copy of the Auditors’ Independence Declaration as required under Section 307C of the Corporations
Act 2001 is included in this Report.
Rounding Off of Amounts
The amounts contained in this report have been rounded to the nearest $100,000 (unless otherwise
stated) and the amounts contained in the ﬁnancial report have been rounded to the nearest $1,000
(unless otherwise stated) under the options available to the Group under ASIC Corporations (Rounding
in Financial/Directors’ Reports) Instruments 2016/191. The Group is an entity to which the legislative
instrument applies.
This report is made in accordance with a resolution of the Directors.
Elana Rubin AM
Independent Chair and Non-Executive Director
Melbourne
25 August 2021
51

As lead auditor for the audit of the financial report of Afterpay Limited for the financial year ended 30
June 2021, I declare to the best of my knowledge and belief, there have been:

a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Afterpay Limited and the entities it controlled during the financial year.

Ernst & Young

Fiona Campbell
Partner
25 August 2021

Remuneration
Report.
We have a continual focus
on the health and wellbeing
of our people. Creating an
environment where everyone
feels able to be their authentic
self is our top priority

1. Executive Summary
On behalf of the Board of Directors of Afterpay Limited (Afterpay or the Group), we are pleased to
present the audited FY21 Remuneration Report (Report).
At Afterpay, our people are our greatest asset and our business is all about human connection. Having
the right culture and a team of people with shared values and a clear purpose is critical to the
sustainability of our business. We recognise that remuneration is only one of a number of reasons why
our people come to work for us every day. Further detail on people and culture at Afterpay is set out in
the FY21 in Review section of this Annual Report.
1.1
FY21 – Continued global growth and strong operating
performance achieved across all regions
The year ended 30 June 2021 was a period of continued high growth and investment as the Group
scaled to achieve a vision for a world that delivers fairness and ﬁnancial freedom for all.
Operational milestones that Afterpay has achieved include reaching $21.1 billion in Underlying Sales on
the platform, an increase of 90% on FY20, and exceeding the publicly stated ambition to achieve $20
billion by FY22 a year early. The Group ended the year with 16.2 million Active Customers, an increase of
63% on the prior year. Notably, the North America platform is now the largest contributor to both
Underlying Sales and Active Customers, reaching $9.8 billion and 10.5 million respectively. The
integration of Pagantis (now Clearpay Europe) has also been a notable milestone in Afterpay’s
international expansion this year.
Financially, Afterpay Net Margin1 of $434.1 million was up 74% on FY20, driven by growth in Underlying
Sales. Afterpay continued to manage losses and achieved Net Margin in excess of 2% of Underlying
Sales despite more than 6 million new customers added in the year and increasing contribution from
less mature regions. EBITDA (excluding signiﬁcant items) of $38.7 million was delivered in an
environment of continued investment as planned in Afterpay’s people, operations, and marketing.
Further discussion is available in the Operating & Financial Review in the Directors’ Report.
Afterpay’s results have been achieved in an environment of continued uncertainty with the COVID-19
global pandemic. Our response and approach in this environment continues to be centred upon taking
care of our people, preserving our strong relationships with customers and merchants, limiting losses,
preserving margins and maintaining our strong balance sheet and capital position.
Figure 1
FY21 Group Performance Summary
FY21 Group Performance Summary
▲
Underlying
Sales
▲
Active
Customers
▼
Net Transaction
Loss
▼
Afterpay
Net Margin1
▼
EBITDA (excl.
signiﬁcant items)
90%
on FY20
63%
on FY20
0.6%
of Underlying
Sales
2.1%
of Underlying
Sales
$38.7
million
1.
Afterpay has adopted Net Margin as a key performance metrics for current and future reporting periods. Afterpay Net Margin is
Afterpay Net Transaction Margin (merchant margin earned directly from Underlying Sales), plus other income and margin items
associated with the Afterpay platform (such as Money by Afterpay). Pay Now is not included within Afterpay Net Margin as it is not
related to the Afterpay platform. Refer to Section 5.1 of the Operating and Financial Review in the Directors Report for additional detail.
In August 2021, the Board announced plans for Square, Inc. to acquire Afterpay, which would bring
together two of the fastest growing global ﬁn-tech companies to advance the companies’ shared
mission of economic empowerment and ﬁnancial inclusion. Subject to satisfaction of certain closing
conditions, the transaction is expected to close in the ﬁrst quarter of calendar year 2022.
54

1.2
FY21 Remuneration and Outcomes Review
The Group’s executive remuneration framework (summarised in section 3) is designed to ensure there
is a strong link between remuneration outcomes and the Group’s performance (as outlined above).
During FY21:
●
no increases were made to ﬁxed remuneration for the Executive Key Management Personnel
(KMP). Fixed remuneration comprises a cash component (base salary and superannuation) and
RSUs (which vest over 3 years), other than for the Co-CEOs who elected not to receive RSUs in FY21,
consistent with previous years;
●
the FY21 STI vested at 93% of maximum. The Group’s current Chief Financial Ofﬁcer (CFO),
Rebecca Lowde, was the only KMP eligible to receive an STI in FY21. The Co-CEOs elected not to
participate in the STI, consistent with previous years; and
●
there were no LTI grants under the current framework (as summarised in section 4.4) which
were eligible to vest in FY21. The Co-CEOs have elected not to receive an LTI grant for FY22.
In respect of Non-Executive Directors, no changes to Board and Committee fees or the fee pool were
made in respect of FY21.
2. Who is covered
by this Report
This Report outlines the remuneration arrangements in place for KMP of the Group in FY21, which
comprises all Non-Executive Directors and senior executives who have authority and responsibility for
planning, directing and controlling the activities of the Group. Table 1 below sets out the Group’s KMP
during FY21.
During the year, the former Global CFO - Luke Bortoli - ceased as a KMP on 5 October 2020 and the
current CFO - Rebecca Lowde - became a KMP effective 6 October 2020.
Afterpay remains committed to maintaining the representation of independent Non-Executive
Directors. The Independent Chair and four Non-Executive Directors of the Board all served throughout
FY21.
Table 1
Overview of FY21 KMP
KMP
Position
Term as KMP
Executive KMP
Anthony Eisen
Co-CEO
Full Year
Nick Molnar
Co-CEO
Full Year
Rebecca Lowde1
Chief Financial Ofﬁcer
Effective 6 October 2020
Luke Bortoli2
Global Chief Financial Ofﬁcer
Ceased as KMP on 5 October 2020
Non-Executive Directors
Elana Rubin AM
Independent Chair
Full Year
Dana Stalder
Non-Executive Director
Full Year
Gary Briggs
Non-Executive Director
Full Year
Pat O’Sullivan
Non-Executive Director
Full Year
Sharon Rothstein
Non-Executive Director
Full Year
1.
Rebecca Lowde started in the position of CFO during the 2021 ﬁnancial year, effective from her starting date of 6 October 2020.
2. Luke Bortoli held the position of Global CFO during the 2021 ﬁnancial year effective from 1 July 2020. Luke ceased as Global CFO and
KMP on 5 October 2020. Luke ceased formal employment with the Group on 30 June 2021.
55

3. FY21 Executive Remuneration
Framework
3.1
Snapshot
1. Our Strategic Priorities
Brand
Grow
Innovate
Perform
Do the Right
Thing
It’s not pay in
four, or BNPL, it’s
Afterpay.
We are the verb
and our own
category.
New visual
identity to
enhance
alignment with
our global
customer base
and
differentiation.
Expand globally
to deepen
retailer
partnerships.
Increased focus
on SMB
acceptance in
newer regions.
Utilise brand
and innovation
to drive
customer
acceptance and
retention.
Drive greater
ecosystem value
to customers
and merchants.
Customer-led
differentiation
via platform
enhancements.
Merchant
insights, tools
and value-added
outcomes.
Maintain focus
in every aspect
of our
performance.
Accelerate
investment in
the global
addressable
opportunity.
Maintain focus
on our people,
protecting the
business, caring
for communities
and good
corporate
governance.
2. Remuneration Policy & Principles
Acting like owners
and pay for
performance
Strategy-led and
customer-centric
Attract, motivate and
retain world’s best
talent
Doing the right thing
Strong alignment
between executive
reward and
shareholder outcomes
Drive an “ownership
mindset” and
encourage a focus on
long-term sustainable
decision making in the
interests of all of our
stakeholders
Aligned with the
Group’s key value
drivers and strategic
objectives
Support the Group’s
high-performance
culture and focus
executives on
delivering exceptional
results and the best
possible user
experience for our
customers
Market competitive
remuneration to
attract and retain
world-class talent
from the global
technology talent pool,
with the skills and
experience to drive our
global expansion and
shareholder returns
Meeting the
expectations of our
shareholders,
customers, regulators
and the broader
community
56

3. Our Executive KMP Remuneration Framework – Visualised
Fixed Cash Base Salary + Super
Fixed Remuneration
Aggregate of cash
base salary and super,
and RSUs, is positioned
at or around the
median of total ﬁxed
remuneration of peer
companies
Positioned below median of peer companies (in recognition of the annual RSU
grant)
Fixed Annual RSU Grant
Annual RSU grants as part of ﬁxed remuneration to reﬂect the higher focus on
equity under the framework
Vesting in equal annual tranches over 3 years (subject to service)
Subject to malus and clawback
Short-Term Incentive
Variable
Remuneration
Heavy weighting in
variable remuneration
towards LTI (as against
STI) to support
long-term sustainable
decision making
Positioned below the median of peers
Paid in cash at end of ﬁnancial year
Subject to clawback and a Board discretion modiﬁer for “doing the right thing”
LTI Performance Tested Options
Annual LTI grants subject to formal performance testing
Positioned above the median of peers
Subject to malus and clawback
1.
The Co-CEOs agreed not to receive STIs or RSUs in FY21 (as in previous years). Total ﬁxed remuneration for the Co-CEOs is shown on an
annualised basis and does not take into account the voluntary 20% reduction in base salaries for July 2020.
2. CFO pay mix reﬂects the annual FY21 package of the CFO (Rebecca Lowde). The CFO’s initial grant and total remuneration package is
positioned well below market. The Board intends to review the CFO’s LTI arrangements in FY22 to align them more closely with the
Group’s remuneration framework and market competitive remuneration for her role.
57

3.2 More Detail
We set out below a more detailed description of each element of the FY21 executive remuneration
framework and the rationale and positioning relative to peer companies.
Table 2
Detailed Overview of FY21 Executive Remuneration Framework
Element
Description
Positioning against peers and rationale
Fixed Remuneration
Fixed cash
remuneration
(SECTION 4.2)
●Comprises base salary and
superannuation
●Set conservatively having regard to
the individual’s role, responsibilities,
skills, experience and performance,
and remuneration levels offered by
comparable companies with whom
the Group competes for talent
●Positioned below median of peer companies
in recognition of the annual RSU grant which
is also part of ﬁxed compensation
●Reviewed periodically with adjustments only
for change in role or promotion, internal
relativities and signiﬁcant market changes,
including material market relativity changes
(not CPI / wage growth increases)
Annual RSU
grant
(SECTION 4.2)
●Instrument: RSUs (i.e. a right to a
share upon satisfaction of vesting
conditions) granted annually
●Allocation methodology: Annual
grants at market price (i.e. face value
allocation methodology)
●Vesting period / conditions: three
equal tranches vesting annually over
three years (subject to continued
employment at vesting dates)
●Subject to malus / clawback and no
dividend or voting rights over vesting
period
●Compensates for conservative positioning of
ﬁxed cash remuneration and is awarded as
part of ﬁxed remuneration to reﬂect the higher
focus on equity
●Restricted equity component generates strong
alignment between executives and
shareholders and provides a retention
mechanism for key talent (as vesting is subject
to continued employment at the respective
vesting dates)
●The Co-CEOs elected to forego RSUs in FY21 (as
in previous years)
Fixed cash remuneration is positioned low relative to peers in recognition of the annual RSU grant. The sum of
these two elements represents “total ﬁxed remuneration” and is positioned at or around the median of peer
companies (having regard to market capitalisation and comparable companies in relevant industries), with a
higher weighting to equity than cash to encourage alignment with shareholders
Variable Remuneration
Short-term
incentive
(SECTION 4.3)
●Instrument: cash
●Performance period: ﬁnancial year
●Vesting conditions: balanced
scorecard comprising ﬁnancial (50%),
customers (25%), innovation (15%), and
people (10%) measures
●Subject to clawback and Board
discretion modiﬁer for “doing the
right thing” (i.e. downward
adjustments for conduct, risk,
regulatory and reputational issues,
and quality of results)
●Positioned below the median of peer
companies in favour of heavy weighting
towards LTI to provide for a stronger alignment
to shareholder interests and to support
long-term decision making
●To reward the achievement of challenging
annual goals set in line with the Group’s
mid-term objectives and to reﬂect the key
value drivers of the business to deliver returns
for shareholders
●The Co-CEOs elected to forego a STI in FY21 (as
in previous years)
Long-term
incentive
(SECTION 4.4)
●Instrument: options granted annually
using a Binomial Model
●Exercise Price: set based on volume
weighted average price (VWAP) of
Afterpay Limited shares based on the
10 day VWAP post release of the full
year results (with a 20% premium for
the Co-CEOs for FY21)1
●Performance period: three years
●Performance conditions: GMV (i.e.
Underlying Sales) (50%) and NTM
(50%)
●Subject to malus and clawback
●LTI opportunity is positioned above market (i.e.
packages are highly leveraged to LTI)
●To reward for achievement of challenging
long-term goals, generate strong alignment
between executives and shareholders, and
encourage sustainable decision making in the
long-term interests of shareholders
●Market price options (with a premium for the
Co-CEOs for FY21) also encourage a focus on
growing the share price and shareholder
return
Cash STI levels are conservative relative to peers, with packages highly leveraged to the LTI to support long term
sustainable decision making and alignment with shareholders
1.
The exercise price on the CFO’s LTI grant for FY21 was equal to the 10-day VWAP of Afterpay Limited shares in the period up to and
excluding her commencement date of 6 October 2020, reﬂecting that the CFO commenced after the annual cycle.
58

4. FY21 Executive Remuneration
Outcomes
4.1
Overview of Group performance
The Group is committed to ensuring strong alignment between the Group’s performance and
shareholder experience, and what is paid to its executives in remuneration. During FY21, the Group
achieved strong growth in respect of key ﬁnancial and non-ﬁnancial indicators set out in Table 3 below.
Group performance is only shown from FY18 as the Group was only formed in June 2017.
Table 3
FY21 Group performance relative to FY20, FY19, and FY18
$m (unless otherwise stated)
Change¹ %
FY21
FY20
FY19
FY18
Share price performance as at y/e ($/sh)
94%
118.17
60.99
25.07
9.35
Total dividends paid
-%
-
-
-
-
GMV (i.e. Underlying Sales)
90%
21,087.4
11,114.2
5,247.2
2,184.6
Active Customers (m)
63%
16.2
9.9
4.6
2.0
Active Merchants ('000s)
77%
98.2
55.4
32.3
16.0
Afterpay Income
90%
822.3
433.8
200.9
88.3
% of Afterpay Underlying Sales
-0.0 pp
3.9%
3.9%
3.8%
4.0%
Total Income²
78%
924.7
519.2
264.1
142.3
Net Transaction Loss³
210%
(132.6)
(42.8)
(22.2)
(9.3)
% of Afterpay Underlying Sales
-0.2 pp
(0.6%)
(0.4%)
(0.4%)
(0.4%)
Afterpay Net Margin⁴
74%
434.1
250.2
119.3
55.7
% of Afterpay Underlying Sales
-0.2 pp
2.1%
2.3%
2.3%
2.6%
EBITDA (excluding signiﬁcant items)⁵
(13%)
38.7
44.4
25.7
33.8
1.
Change percentage based on FY21 compared to FY20.
2. Total income comprises Afterpay income, Pay Now revenue and Other income.
3. NTL comprises gross loss, chargebacks, debt recovery costs, less late fees.
4 Afterpay Net Margin is a non-IFRS measure that is not audited but is a key ﬁnancial metric used by management. Afterpay Net Margin
is Afterpay Net Transaction Margin (merchant margin earned directly from Underlying Sales), plus other income and margin items
associated with the Afterpay platform (such as Money by Afterpay).
5. EBITDA is a non-IFRS measure that is not audited but is a key ﬁnancial metric used by management at a Group level. EBITDA
(excluding signiﬁcant items) excludes foreign currency gains, share-based payment expenses, net loss on ﬁnancial liabilities at fair
value, share of loss of associate, gain on dilution of shareholding in associate, and one-off items.
Delivery of strong operational and ﬁnancial performance in FY21 translated to strong returns for
Afterpay’s shareholders. The Group’s share price increased by 94% from a closing share price of $60.99
at 30 June 2020 (the last trading day of FY20) to $118.17 on 30 June 2021. By comparison, the S&P/ASX
200 Index increased by 24% from 5,898 points to 7,313 points over the same period.
59

Figure 2
FY21 APT share price performance compared to the S&P/ASX 200 Index
Source: Bloomberg.
4.2 Total ﬁxed remuneration
4.2.1 Overview of FY21 total ﬁxed remuneration levels
As outlined in section 3, under the FY21 remuneration framework, the ﬁxed remuneration component
for Executive KMP comprises two elements being (1) ﬁxed cash remuneration which includes cash base
salary and superannuation; and (2) ﬁxed annual grant of RSUs which vests in equal tranches annually
over 3 years (subject to service at the respective vesting dates).
Table 4 below outlines Executive KMPs’ contractual ﬁxed remuneration on an annualised basis. The
Co-CEOs elected to forego the RSU component for FY21 under the framework and no increases were
made to their cash base salary. The current CFO’s total ﬁxed remuneration was positioned having
regard to external market data sourced from independent remuneration consultants. The former
Global CFO (Luke Bortoli) did not receive an RSU grant during FY21.
Table 4
FY21 ﬁxed remuneration levels for Executive KMP (contract values)
Total Fixed Remuneration (FY21)
Executive KMP
Fixed cash
remuneration1
Face value of RSUs
Face value of RSUs
(% of ﬁxed cash
remuneration)
Total ﬁxed
remuneration2
Anthony Eisen3
$450,000
N/A
N/A
$450,0003
Nick Molnar3
$450,000
N/A
N/A
$450,0003
Rebecca Lowde (annualised)4
$525,000
$262,500
50%
$787,500
Luke Bortoli (annualised)5
$300,000
N/A
N/A
$300,000
1.
Fixed cash remuneration represents the contract value and includes cash base salary and superannuation.
2. Total ﬁxed remuneration represents the sum of ﬁxed cash remuneration and the face value of RSUs (as applicable).
3. In May 2020, the Co-CEOs elected to take a 20% reduction in their cash base salaries for three months from May 2020, reﬂecting the
uncertainty of the impact of COVID-19 on the community. The impact of this decision affected July 2020 in FY21. Total ﬁxed
remuneration for the Co-CEOs is shown on an annualised basis and excludes the voluntary 20% reduction in salaries.
4. Total ﬁxed remuneration for the CFO is shown on an annualised basis. The CFO commenced employment on 6 October 2020 and
received a pro-rated RSU issuance of $192,740, representative of 50% of her pro-rated ﬁxed cash remuneration.
5. Total ﬁxed remuneration for the former Global CFO is shown on an annualised basis. The former Global CFO ceased as a KMP on 5
October 2020.
60

4.2.2 FY21 RSUs key terms – further detail
Table 5 sets out the key terms which apply to RSUs granted as part of total ﬁxed remuneration in FY21.
The Group’s current CFO was the only Executive KMP to receive RSU grants during the period.
Table 5
RSUs – key terms
Restricted Stock Units (RSUs) – Key Terms
Term
Further Detail
Allocation
methodology
RSUs would typically be granted on a face value basis by dividing the participant’s RSU dollar value
opportunity in Australian dollars for FY21 by the 10-day VWAP of Afterpay Limited shares traded in
the period immediately following the release of the 2020 full year results.
The Group’s current CFO was the only Executive KMP to receive RSU grants during the period. The
RSUs to the current CFO were granted based on a 10-day VWAP of APT shares up to and excluding
the CFO’s commencement date on 6 October 2020 (reﬂecting that the CFO commenced after the
annual cycle).
Entitlement
Upon satisfaction of the vesting conditions, each RSU entitles the participant to one fully paid
ordinary share in Afterpay Limited (or a cash equivalent payment in lieu of a share at the discretion
of the Board). Participants are not required to pay any amount (e.g. an exercise price) upon vesting
of the RSUs.
Vesting
conditions and
schedule
The RSUs will vest subject to the participant remaining employed by, or continuing to provide
services to, the Group at each vesting date. The vesting schedule in respect of the RSUs granted
during FY21 to the CFO is set out below:
Tranche
Vesting Date
Percentage of FY21 RSUs
1
1 July 2021
One-third
2
1 July 2022
One-third
3
1 July 2023
One-third
Treatment on
cessation of
employment
If the participant ceases to be employed, any unvested RSUs will immediately lapse.
However, the Board may, in its absolute discretion and subject to any requirement for shareholder
approval, determine to treat any of the unvested RSUs in a different manner (e.g. in the case of a
“good leaver”).
A “good leaver” may include, for example, an employee who leaves the company due to death,
total or permanent disablement, illness, genuine redundancy, or other factors determined by the
Board to constitute sufﬁcient reason to treat the person as a ‘‘good leaver’’.
Malus and
clawback
Amongst other things, the Board may elect to forfeit any unvested awards (i.e. malus) or recoup
any vested and paid awards (i.e. clawback) in the following circumstances:
●
a participant has engaged in serious misconduct (including but not limited to fraud,
dishonesty, gross negligence or a breach of employment conditions);
●
a material misstatement in, or omission from the Group’s ﬁnancial statements or a
misstatement of an applicable vesting condition;
●
a participant has acted or failed to act in a way that has contributed to material reputational
damage to the Group; or
●
in the opinion of the Board, acting in good faith, all or part of the initial RSU award is no
longer justiﬁed having regard to the circumstances or information which has subsequently
come to light after a grant was made.
Change of
control
Where a transaction or event is proposed that, in the opinion of the Board, may result in a person
becoming entitled to control of Afterpay Limited, the Board retains the discretion (to be exercised
consistently with the ASX Listing Rules) to determine that a particular treatment will apply to
unvested RSUs.
Where this discretion is not exercised and a change of control event (as deﬁned) occurs, any
unvested RSUs will vest on a pro-rata basis to time, based on the portion of the vesting period that
has passed at the time of the change of control event (unless the Board determines otherwise).
Voting and
dividends
RSUs do not carry any dividend or voting rights.
Hedging
Participants are not permitted to enter into any arrangement for the purpose of hedging,
borrowing or otherwise affecting their economic exposure to RSUs.
61

4.3 FY21 short-term incentive outcomes
4.3.1 Overview of FY21 STI outcomes
The maximum STI awards that Executive KMP were eligible to receive in respect of FY21 are set out in
Table 6 below. The CFO was the only Executive KMP eligible to receive an STI in FY21, reﬂecting that
the Co-CEOs elected to continue to not be eligible for an STI award under the new framework.
FY21 STI awards were assessed against a balanced scorecard of annual objectives that are aligned with
the Group’s value drivers, achievement of Afterpay’s mid-term objectives and generation of long-term
value for our shareholders. The FY21 STI scorecard and performance against it (which determines the
CFO’s STI) is set out at section 4.3.2 below. The ﬁnal outcomes reﬂect the Group’s strong performance
including exceptional growth across all key platform metrics, strong risk management outcomes, and
achievement of targeted EBITDA, notwithstanding the accelerated investment in global expansion.
Table 6
FY21 STI opportunities and outcomes
FY21 STI Opportunities and Outcomes
Executive KMP
Maximum STI
opportunity1
($)
Maximum STI
opportunity
(% of total ﬁxed
remuneration2)
STI awarded
% of
maximum
FY21 STI
awarded
% of
maximum
FY21 STI
award
unrealised
Anthony Eisen3
N/A
N/A
N/A
N/A
N/A
Nick Molnar3
N/A
N/A
N/A
N/A
N/A
Rebecca Lowde (annualised)4
$393,750
50%
$366,188
93%
7%
Luke Bortoli5
N/A
N/A
N/A
N/A
N/A
1.
These ﬁgures represent the maximum STI that can be earned by Executive KMP when performance targets are met.
2. Total ﬁxed remuneration is based on the ﬁgures disclosed in section 4.2.
3. As noted above, the Co-CEOs are not eligible for any STI awards.
4. Total ﬁxed remuneration, STI opportunity, and STI awarded for the CFO is shown on an annualised basis. As the CFO commenced
employment on 6 October 2020, she had a maximum pro-rated STI opportunity of $289,110 for FY21, representative of 50% of her
pro-rated total ﬁxed remuneration. The CFO was awarded a pro-rated STI of $268,872 for FY21, reﬂective of 93% of the maximum.
5. The Board determined that the former Global CFO will not receive a STI award for FY21.
62

4.3.2 Performance against the FY21 STI scorecard
Performance against the FY21 STI scorecard is set out below. Targets are set at challenging levels to ensure Executive KMP are rewarded for exceptional performance.
For each measure, 50% vesting occurs at threshold, with up to 100% vesting at target (with straight line vesting in between). No vesting occurs below threshold.
Threshold performance is generally set at 90% of target. Final STI outcomes are subject to a Board discretion modiﬁer for “doing the right thing” and assessment of
the quality of results.
Figure 3
FY21 STI scorecard and performance
Measure
Weight
Strategic Link
Vesting Outcome1
Outcome Commentary
Financial measures (50%)
Threshold
(50% vesting)
Target
(100% vesting)
Underlying
Sales
25%
Strong ﬁnancial performance, including EBITDA (excluding
Signiﬁcant Items) and GMV (i.e. Underlying Sales), is critical to
delivering long-term shareholder value.
GMV of $21.1b exceeded the FY21 target and was 90% higher than FY20. The almost
doubling of GMV was driven by growth across all regions. In particular in FY21, North
America grew rapidly and now exceeds APAC as Afterpay’s largest region.
EBITDA
25%
EBITDA (excluding signiﬁcant items) of $38.7m was above target, and included
planned investments in people, operations and marketing to drive brand awareness
and customer acquisition globally.
Non-ﬁnancial measures (50%)
Customers
Active
Customers
12.5%
At Afterpay, we are committed to putting our customers ﬁrst and
achieving our mission to power an economy in which everyone
wins. Execution of our mid-term plan is underpinned by strong
customer expansion annually. STI measures reﬂect both the
number of active customers and customer defaults.
Active Customers of 16.2m exceeded the FY21 target, an increase of 63% on prior year.
North America and Clearpay (UK and Europe) have particularly driven growth in new
customers to Afterpay.
Net Transaction
Loss (NTL)
12.5%
NTL of 0.6% was better than the FY21 target, with lower gross loss due to continued
focus on risk management and higher proportion of returning customers (who are
lower risk) offsetting lower late fees.
Innovation
Innovation
15%
We are a platform. We are focussed on providing new and
valuable experiences to customers and merchants. “Innovation”
reﬂects achievement of key product, technology and network
build milestones.
Achieved delivery of key product plan milestones including: launch of Canada,
integration of Clearpay in Europe, growth of US instore, launch of Afterpay card in ANZ,
continued enhancement of loyalty, integration of new global channel partners, growth
in cross-border activity, and development of new revenue streams and customer and
merchant value such as in-app advertising, Afterpay iQ, and Money by Afterpay
People
People
10%
Our people are at the heart of everything we do. A high-
performing and engaged workforce is critical to delivering
superior returns.
Achieved positive results in employee engagement surveys assessed using the
CultureAMP methodology with a higher score than FY20. Continued to prioritise the
health and wellbeing of employees through COVID-19 including providing robust
remote working arrangements and employee support initiatives.
FY21 STI outcome: 93%
1. Vesting bar chart is a guide only and not to scale.
63

4.3.3 FY21 STI terms - further detail
The table below outlines the key terms and conditions applying to the STI arrangements for the CFO
during FY21.
Table 7
Description of key terms of FY21 Executive KMP STI
FY21 STI – Key Terms
Term
Further Detail
Performance period
STI awards are assessed over the 12-month ﬁnancial year. Any STI award payments are
made after performance is tested at the end of the performance period.
Assessment of
performance measures
Performance against the scorecard measures is assessed annually by the Board based
on recommendations from the People, Remuneration & Nomination Committee (with
input from the Co-CEOs) after the end of the performance period, as part of the
broader performance review process for each Executive KMP.
Financial and non-ﬁnancial measures are assessed quantitatively against
predetermined benchmarks where applicable. When testing ﬁnancial measures,
ﬁnancial results are extracted from the Group's accounting system.
These methods of assessing performance were chosen because they are, as far as
practicable, objective and fair. The use of the Group’s accounting system ensures the
integrity of the measure and alignment with the true ﬁnancial performance of the
Group.
In determining ﬁnal outcomes, the Board will also have regard to the quality of the
result in each category (facilitated by contra / supplementary indicators, including
customer complaints and customer Net Promoter Score (NPS)).
Board discretion
modiﬁer for “doing the
right thing”
The Board retains absolute discretion in respect of STI awards and ﬁnal vesting
outcomes. As part of its overarching discretion, the Board may reduce ﬁnal STI
outcomes having regard to affordability considerations and the Group’s ﬁnancial
performance over the period.
In addition to this overarching discretion, ﬁnal STI outcomes will be subject to a Board
discretion modiﬁer for “doing the right thing” whereby the Board may make
downward adjustments (including to zero) for regulatory issues, conduct issues, brand
and reputational issues, and non-ﬁnancial and ﬁnancial risk issues.
Treatment on cessation
of employment
Subject to Board discretion, if an Executive KMP ceases to be employed:
●
in “bad leaver” circumstances (e.g. termination for cause) during the
performance period, the Executive KMP will not be eligible for an STI award
(unless the Board determines otherwise); or
●
in “good leaver” circumstances (i.e. other than as a bad leaver), the treatment of
their unvested STI awards will be at the absolute discretion of the Board.
Malus and clawback
The Board may elect to forfeit an Executive KMP’s FY21 STI award (i.e. malus) or recoup
any vested and paid awards (i.e. clawback) in the circumstances speciﬁed in respect of
the FY21 RSUs at section 4.2.2.
Change of control
Where a transaction or event is proposed that, in the opinion of the Board, may result
in a person becoming entitled to control of Afterpay Limited during the performance
period, the Board retains the discretion (to be exercised consistently with the ASX
Listing Rules) to determine that a particular treatment will apply to STI awards.
Where this discretion is not exercised and a change of control event (as deﬁned)
occurs during the performance period, any unvested STI awards will vest on a pro-rata
basis to time, based on the portion of the vesting period that has passed at the time of
the change of control event (unless the Board determines otherwise).
64

4.3.4 Withheld FY19 STI awards
As disclosed in the FY19 Remuneration Report, while the Board assessed performance of the FY19 STI
awards, the Executive KMP volunteered for their STI awards to be withheld until the outcomes of the
ﬁnal report of the external AUSTRAC audit were known. The Board reserved the discretion to make any
adjustments to ﬁnal STI outcomes (as appropriate), having regard to the outcomes of the AUSTRAC
audit.
AUSTRAC announced on 14 October 2020 that it had considered the Final Audit Report and Afterpay’s
response to the ﬁndings; and decided it will not be taking any further regulatory action. The FY19 STI
awards that were withheld from the Co-CEOs and former CFO were paid in November 2020.
4.4 FY21 long-term incentive awards
4.4.1 Overview
Key features of the Group’s FY21 LTI program are as follows:
●
the LTI component of the Group’s FY21 remuneration framework is tested against two equally
weighted measures, being the Group’s GMV (i.e. Underlying Sales) and Afterpay Net
Transaction Margin (NTM) over the three-year performance period (refer section 4.4.3);
●
delivery of LTI awards in market price options for the Executive KMP (other than the Co-CEOs
where the exercise price on their FY21 LTI awards was set at a 20% premium to market) so that
the LTI awards only deliver value to executives where the share price increases. While a
number of ASX listed companies have some form of share price measure in their LTI (e.g. relative
total shareholder return), the use of market value options under the LTI (with an exercise price
based on Afterpay’s share price at grant) has an implicit share price hurdle. That is, executives are
incentivised to drive share price performance in the interests of our shareholders, as the market
price at the time of exercise will need to exceed the exercise price for the options to deliver any
value to executives (in addition to performance hurdles being met); and
●
in general, Executive KMP remuneration packages are also highly leveraged to the
performance-tested LTI to encourage long-term, sustainable decision making in the interests
of our shareholders (refer section 4.4.2)
4.4.2 FY21 LTI awards
Table 8 below outlines the face value of LTI awards granted to Executive KMP during FY21.
The maximum LTI opportunity level for the Co-CEOs as a percentage of total ﬁxed remuneration
reﬂects the intended heavy weighting of Executive KMP packages towards the LTI, as well as the
modest positioning of total ﬁxed remuneration relative to market. The Co-CEOs’ options were approved
by shareholders at the 2020 AGM in accordance with LR 10.14.
As noted above, the Co-CEOs have elected not to receive an LTI grant for FY22.
65

Table 8
FY21 LTI awards to Executive KMP
Executive KMP
Maximum LTI Opportunity
Maximum LTI opportunity
(% of total ﬁxed remuneration)1
Anthony Eisen2
$1,500,000
333%
Nick Molnar2
$1,500,000
333%
Rebecca Lowde3 (annualised)
$262,500
33%
Luke Bortoli4
N/A
N/A
1.
Total ﬁxed remuneration is based on the ﬁgures disclosed in section 4.2. For the Co-CEOs, this represents total ﬁxed cash
remuneration. For the CFO, this represents total ﬁxed cash remuneration plus the face value of RSUs.
2.
The exercise price of the performance-tested LTI options granted to the Co-CEOs was set at a 20% premium to the market value of
Afterpay Limited shares, where the market value was set equal to the 10-day VWAP of Afterpay Limited shares immediately following
the release of 2020 full year results.
3. The CFO commenced employment on 6 October 2020 and received a pro-rated LTI issuance of $192,740, representative of 33% of her
pro-rated total ﬁxed remuneration. The exercise price of the CFO’s performance-tested LTI options was based on the market value of
Afterpay Limited shares, where the market value was set equal to the 10-day VWAP of Afterpay Limited shares in the period up to and
excluding commencement date.
4. The former Global CFO was not eligible to participate in the FY21 LTI plan.
4.4.3 FY21 LTI key terms – further detail
The table below outlines the key terms of the LTI awards granted to Executive KMP during FY21.
Table 9
Key terms of FY21 LTI awards granted to Executive KMP
Long-Term Incentive (FY21) – Key Terms
Term
Further Detail
Entitlement
Subject to the satisfaction of the performance conditions and payment of the exercise price,
each LTI option entitles the holder to one fully paid ordinary share in Afterpay Limited (or a
cash equivalent payment at the discretion of the Board).
Allocation
methodology
The number of LTI options granted was calculated by dividing the participant’s dollar value LTI
opportunity for FY21 (as outlined in section 4.4.2 above) by the market value of the options.
The market value of options was calculated by using a Binomial Model, based on
●
for the Co-CEOs, the 10-day VWAP of Afterpay Limited shares in the period immediately
following the release of full year results and the exercise price of the options outlined
below; and
●
For the CFO, the 10-day VWAP of Afterpay Limited shares in the period up to and
excluding commencement date of 6 October 2020 (reﬂecting that the CFO commenced
after the annual cycle) and the exercise price of the options outlined below.
The market value of options is not reduced for the likelihood of performance hurdles being
met.
Exercise price
Participants are required to pay an exercise price to exercise their LTI options upon vesting. In
respect of the FY21 LTI awards, the exercise price for the:
●
Co-CEOs is $98.97. This was set at a 20% premium to the market value of Afterpay Limited
shares, equal to the 10-day VWAP of Afterpay Limited shares in the period immediately
following the release of 2020 full year results; and
●
CFO is $78.87. This was set at the market value of Afterpay Limited shares, being equal to
the 10-day VWAP of Afterpay Limited shares in the period up to and excluding
commencement date of 6 October 2020 (reﬂecting that the CFO commenced after the
annual cycle)
Expiry date
The FY21 LTI options will expire on 1 July 2025.
Performance
period
The performance period is 3 years, commencing on 1 July 2020 to 30 June 2023.
66

Performance
conditions and
vesting schedule
The options are subject to performance testing against the following performance conditions
over the performance period:
●
GMV (i.e. Underlying Sales) – 50%. GMV is a measure of the total order value processed on
the Afterpay platform; and
●
Afterpay NTM – 50%. NTM is a measure of gross proﬁt margin (post-receivables
impairment expense and receivables ﬁnancing costs, pre-operating costs) generated by
transactions on the Afterpay platform.
GMV performance condition
The vesting schedule in respect of the GMV performance condition is set out below. Vesting
will occur on a straight-line basis between target and maximum levels of performance. No
vesting occurs if target performance is not achieved. Speciﬁc targets in respect of GMV will be
disclosed at the end of the performance period.
Level of
performance
Vesting of
GMV-target related
measure (%)
GMV (targets)
Target
50%
Targets to be disclosed at the end of the
performance period due to commercial sensitivity
Maximum
100%
Targets to be disclosed at the end of the
performance period due to commercial sensitivity
Afterpay NTM performance condition
The vesting schedule in respect of the Afterpay NTM performance condition is set out below.
Vesting will occur on a straight-line basis between target and maximum levels of performance.
No vesting occurs if target performance is not achieved.
Speciﬁc targets in respect of Afterpay NTM will be disclosed at the end of the performance
period due to commercial sensitivity. A transparent disclosure of the calculation of Afterpay
NTM (that reconciles to the statutory accounts) will be provided at the end of the performance
period.
Level of
performance
Vesting of
NTM-target related
measure (%)
Afterpay NTM (targets)
Target
50%
Targets to be disclosed at the end of the
performance period due to commercial sensitivity.
Maximum
100%
Targets to be disclosed at the end of the
performance period due to commercial sensitivity.
Treatment on
cessation of
employment
Subject to Board discretion, if an Executive KMP ceases to be employed:
●
in “bad leaver” circumstances (e.g. termination for cause) during the performance period,
all of the unvested LTI options will lapse (unless the Board determines otherwise); and
●
in “good leaver” circumstances (i.e. other than as a bad leaver), the treatment of unvested
LTI options will be at the discretion of the Board (subject to applicable law). The Board’s
intention is that the LTI options would be pro-rated to time served in employment and
left on foot to be tested and vest in the ordinary course.
Malus and
clawback
The Board may elect to forfeit any unvested LTI awards (i.e. malus) or recoup any vested and
paid LTI awards (i.e. clawback) in the circumstances speciﬁed in respect of the FY21 RSUs at
section 4.2.2.
Change of
control
Where a transaction or event is proposed that, in the opinion of the Board, may result in a
person becoming entitled to control of Afterpay Limited, the Board retains the discretion (to be
exercised consistently with the ASX Listing Rules) to determine that a particular treatment will
apply to unvested LTI awards.
Where this discretion is not exercised and a change of control event (as deﬁned) occurs, any
unvested LTI awards will vest on a pro-rata basis to time served in employment, based on the
portion of the vesting period that has passed at the time of the change of control event (unless
the Board determines otherwise).
Voting and
dividend rights
LTI awards do not carry any dividend or voting rights over the performance period.
Hedging
Participants are not permitted to enter into any arrangement for the purpose of hedging,
borrowing or otherwise affecting their economic exposure to LTI options.
67

4.5 Legacy one-off equity awards
As part of the Group’s legacy executive remuneration arrangements, Executive KMP received one-off
grants of equity (in the form of options, loan shares or rights) at the time they commenced
employment with the Group, which were subject to continued employment and the achievement, in
some cases, of KPIs. No one-off equity grants were made during FY20 or FY21 to Executive KMP (as the
Group has transitioned to a new remuneration framework in FY20).
The former Global CFO (Luke Bortoli) was granted 1,350,000 options in June 2018 under the Group’s
legacy one-off equity arrangements (with an exercise price of $5.00 and expiry date of 31 December
2022). The options were eligible to vest in equal tranches over three years. As noted above, the former
Global CFO ceased as a KMP on 5 October 2020 and remained employed with the Group until 30 June
2021. The third and ﬁnal tranche of the former Global CFO’s options vested in full on 1 June 2021.
68

4.6 Executive KMP remuneration statutory table
Table 10 below sets out Executive KMP remuneration for FY21 (and FY20 for comparative purposes) in accordance with the requirements of the Accounting Standards
and Corporations Act 2001 (Cth). The table reﬂects the accounting value of Executive KMP remuneration, derived from the various components of their remuneration.
Table 10
Statutory remuneration table
Afterpay Remuneration ($)
For the years ending
30 June 2021 and 30 June 2020
Short term
Long term
Share-based
payments
Total
Financial
Year
Salary and
Fees
Cash Bonus
Other Monetary
Beneﬁts
Non-Monetary
Beneﬁts1
Super-
annuation
Long-Service
Leave
Termination
Options
and RSUs
Total
Anthony Eisen
2021
450,155
-2
-
-
25,000
9,671
-
1,191,403
1,676,229
2020
470,897
-
-
-
25,000
9,360
-
233,668
738,925
Nick Molnar
2021
450,192
-2
-
-
25,000
12,231
-
1,191,403
1,678,826
2020
464,353
-
-
79,861
25,000
13,932
-
233,668
816,814
Rebecca Lowde
(part year)3
2021
400,093
268,872
-
-
16,271
971
-
179,602
865,809
Luke Bortoli
(part year)4
2021
77,777
-
-
13,676
5,670
-
-
135,154
232,277
2020
300,079
344,000
-
9,797
21,120
1,504
-
1,228,136
1,904,636
Frerk-Malte Feller5
2021
-
-
-
-
-
-
-
-
-
2020
279,176
-
100,000
71,056
21,444
-
-
1,383,170
1,854,846
David Hancock6
2021
-
-
-
-
-
-
-
-
-
2020
75,002
-
-
-
7,334
-
-
1,190,600
1,272,936
Total
2021
1,378,217
268,872
-
13,676
71,941
22,873
-
2,697,562
4,453,141
2020
1,589,507
344,000
100,000
160,714
99,898
24,796
-
4,269,242
6,588,157
1.
Non-monetary beneﬁts include beneﬁts such as insurance, rent and relocation expenses.
2. No cash bonus for the Co-CEOs. In FY21, the Co-CEOs were paid for their FY19 bonus which had been withheld pending the outcome of the AUSTRAC audit.
3. Rebecca Lowde commenced as KMP on 6 October 2020.
4. Luke Bortoli ceased as a KMP on 5 October 2020 and was not entitled to a FY21 STI cash bonus. Luke’s cash bonus for FY20, plus his FY19 STI payment, which was withheld pending the outcome of the AUSTRAC audit
(which was completed in FY21), was paid post him ceasing as KMP.
5. Frerk-Malte Feller ceased as KMP on 12 June 2020.
6. David Hancock ceased as KMP on 8 October 2019.
69

4.7 Actual remuneration snapshot
Table 11 below provides a summary of the actual take-home pay received by Executive KMP during the
Reporting Period. Unlike the statutory remuneration tables in section 4.6, the below table has not been
prepared in accordance with the requirements of the Australian Accounting Standards and is
unaudited. It is included on a voluntary basis to show the remuneration actually received by Executive
KMP during the Reporting Period.
The options exercised in FY21 by the Co-CEOs represent legacy one-off equity arrangements. The value
delivered from these options is aligned with the value delivered to shareholders over the vesting period.
Anthony and Nick remain fully committed to Afterpay and remain the largest shareholders of the
Group.
Table 11
FY21 Actual Remuneration—Executive KMP
Actual Remuneration
KMP
Fixed
remuneration1
(A)
Other
monetary
beneﬁts
(B)
Non-monetary
beneﬁts2
(C)
Cash Bonus
(D)
Options vested and
exercised in FY213
(E)
Total actual
remuneration
(A) + (B) + (C) + (D) + (E)
Anthony Eisen
442,500
-
-
300,0004
131,625,000
132,367,500
Nick Molnar
442,500
-
-
300,0004
131,625,000
132,367,500
Rebecca Lowde
(part year)5
387,937
-
-
-
-
387,937
Luke Bortoli
(part year)6
77,323
-
13,676
-
-
90,999
1.
Fixed remuneration includes base salary and superannuation. This ﬁgure excludes Rebecca’s FY21 RSUs which have not yet vested.
2. Non-monetary beneﬁts represent beneﬁts such as insurance, rent and relocation expenses.
3. Options vested and exercised is calculated as the difference between the share price at the date of exercise less the exercise price, and
includes options vested in prior years that were exercised in FY21.
4. Cash bonus for the Co-CEOs relate to the withheld STI bonus from FY19 pending the outcome of the AUSTRAC audit, which was
completed in FY21.
5. Rebecca Lowde commenced as KMP on 6 October 2020. Annualised total ﬁxed remuneration is $525,000.
6. Actual remuneration is shown for Luke Bortoli up until the date he ceased as KMP on 5 October 2020. Luke’s cash bonus for FY20, plus
his FY19 STI payment, which was withheld pending the outcome of the AUSTRAC audit (which was completed in FY21), was paid post
him ceasing as KMP.
70

5. Non-Executive Director
Remuneration
5.1 Overview of FY21
5.1.1
Composition of the Board
The Board currently has seven directors: ﬁve independent Non-Executive Directors and two Executive
Directors (being the co-CEOs). The composition of the Board was signiﬁcantly strengthened during
FY20, with the appointment of three independent Non-Executive Directors, Gary Briggs, Pat O’Sullivan
and Sharon Rothstein, and no changes were made to composition during FY21.
The Board will continue to assess its collective skills, knowledge, experience and diversity (including
diversity of thought, gender, relationships and background), with a view to identifying any particular
competencies and perspectives that will best increase its effectiveness and support the Group’s
continued growth, global expansion and long-term success (refer section 2 of the Group’s FY21
Corporate Governance Statement for further detail).
5.2 Remuneration policy and arrangements
The Board sets the fees for its Non-Executive Directors in line with the key objectives of the Group’s
Non-Executive Director remuneration policy set out below. The People, Remuneration & Nomination
Committee makes recommendations to the Board regarding remuneration for Non-Executive Directors
(refer section 6.1 for further detail regarding “Remuneration Governance”).
As in previous years, the Group’s Executive Directors (Co-CEOs Anthony Eisen and Nick Molnar) are not
entitled to be paid Directors’ fees.
The Group does not make sign-on payments to new Non-Executive Directors nor provide for retirement
allowances / beneﬁts for Non-Executive Directors (other than superannuation for Australian based
Directors).
Table 12
Non-Executive Director remuneration policy
Market competitive to secure and
retain talented, qualiﬁed Directors
Preserving and safeguarding
independence and impartiality
Aligning Director and
security holder interests
The Board’s policy is to
remunerate Non-Executive
Directors at market-competitive
rates to attract and retain
Non-Executive Directors of the
highest calibre and requisite
expertise having regard to:
●
fees paid by comparable
companies;
●
the size, complexity and
international spread of the
Group’s operations; and
●
the workload and time
commitment of
Non-Executive Directors.
Director remuneration consists
of base fees, and additional fees
for the Chair and members of
any Board Committee (with the
exception of the role of Board
Chair who receives an
all-inclusive fee).
No element of Non-Executive
Director remuneration is “at
risk” (i.e. Non-Executive
Directors are not entitled to any
performance-related
remuneration) to preserve the
Directors' independence and
impartiality.
In accordance with
Afterpay’s Non-Executive
Director Shareholding
Requirement Policy,
Non-executive Directors are
required to hold securities in
the Group, with a view to
strengthening the
alignment between the
interests of Directors and
shareholders (refer section
5.4).
71

5.3 Fees and other beneﬁts
5.3.1 Board and Committee fees
Table 13 sets out the fees (inclusive of superannuation) payable to the Non-Executive Directors of the
Group in respect of FY21 and how they are positioned relative to market. Committee fees are paid in
addition to the Non-Executive Director base fee, with the exception of fees payable to the Board Chair
who receives an “all-inclusive fee” (i.e. is not eligible for additional Committee fees).
As shown in Table 13, the Group’s fees (which are consistent with FY20) are positioned conservatively
relative to market. To support the attraction and retention of overseas Directors (particularly out of the
US where director fee levels are signiﬁcantly higher than Australian fees), the Board retains the
discretion to provide overseas Directors with an uplift to the base member fee (as set out below) of up
to 50% (as required). This uplift was provided to US-based Directors Gary Briggs and Sharon Rothstein in
FY21.
Table 13
Non-Executive Director fees
Board and Committee fees (per annum)
FY211
Chair of the Board – base fee
$350,000
(all inclusive)2
Non-Executive Director – base fee3
$150,0003
Committee Chair (Audit, Risk & Compliance)
$30,000
Committee Chair (People, Remuneration & Nomination)
$25,000
Committee Member (Audit, Risk & Compliance)
$15,000
Committee Member (People, Remuneration & Nomination)
$12,500
1. Fees shown on an annualised basis. Non-Executive Directors’ fees (including Committee fees) were adjusted by the Board for FY22 to
reﬂect the increased size, complexity, and geographical reach of Afterpay. The increased NED fees remain within the aggregate fee pool
of $1,800,000 (noted in section 5.3.2 below).
2. The Chair of the Board fee is all-inclusive, i.e. the Board Chair does not receive additional fees for permanent Committees.
3. The Board will retain the discretion to provide overseas directors with an uplift to the base member fee of up to 50% (as required).
During FY21, a 50% uplift in the base member fee was paid to US-based directors Gary Briggs and Sharon Rothstein.
Non-Executive Directors are entitled to be reimbursed for all reasonable business-related expenses in
addition to Board Fees (including travel), as may be reasonably incurred in the discharge of their duties.
5.3.2 Aggregate fee pool
Non-Executive Directors’ fees (including Committee fees) apply within the aggregate fee pool of
$1,800,000, which was approved by the Group’s shareholders at the AGM held in November 2019.
Afterpay’s aggregate fee pool would continue to be positioned conservatively relative to the market,
with the median fee pool of companies within the market capitalisation comparator group (noted
above) being $3,000,000.
Any proposal to increase the aggregate fee pool will be subject to shareholder approval at a future AGM.
72

5.4 Minimum shareholding requirements
Afterpay’s Non-Executive Director Shareholding Requirement Policy is designed to strengthen the
alignment between the interests of Directors and shareholders. The policy requires Non-Executive
Directors to acquire and maintain Afterpay shares worth at least one year’s base fee (gross) within the
later of three years of appointment or the Policy’s effective date of 16 October 2019. This must be
achieved by each Director using personal funds.
The shareholdings of the Group’s Non-Executive Directors at the end of the Reporting Period are
outlined in detail in section 6.4 of this Report. All Non-Executive Directors held shareholdings in excess
of the minimum shareholding requirement as at 30 June 2021.
5.5 Non-Executive Directors – statutory remuneration
The fees paid or payable to the Non-Executive Directors of the Group in respect of FY21 are set out in the
table below. These fees include the temporary reduction in Board base member and Committee fees as
noted in the FY20 Remuneration Report (which impacted July 2020 in FY21), with Non-Executive
Directors electing to forego 20% of their base member and Committee fees from May 2020 to July 2020
inclusive.
Table 14
Non-Executive Directors – statutory remuneration
Afterpay remuneration ($)
for the years ending 30 June
2021 and 30 June 2020
Financial year
Short-term
Beneﬁts
Long-term
Beneﬁts
Share-based
payments
Total
Salary & Fees
Superannuation
Options
Elana Rubin
2021
344,167
-
-
344,167
2020
377,832
10,501
-
388,333
Dana Stalder
2021
162,250
-
-
162,250
2020
169,500
-
-
169,500
Gary Briggs1
2021
229,872
-
-
229,872
2020
105,000
-
-
105,000
Pat O’Sullivan2
2021
172,869
16,423
-
189,292
2020
50,266
4,775
-
55,041
Sharon Rothstein3
2021
233,542
-
-
233,542
2020
15,833
-
-
15,833
Clifford Rosenberg4
2021
-
-
-
-
2020
170,996
-
170,996
Total
2021
1,142,700
16,423
-
1,159,123
2020
889,427
15,276
-
904,703
1.
Gary Briggs was appointed as a Non-Executive Director on 1 January 2020.
2. Pat O’Sullivan was appointed as a Non-Executive Director on 1 March 2020.
3. Sharon Rothstein was appointed as a Non-Executive Director on 1 June 2020.
4. Clifford Rosenberg ceased to be Non-Executive Director on 24 May 2020.
73

6. Remuneration Governance
6.1
Responsibility for setting remuneration
The People, Remuneration & Nomination Committee of the Board represents one element of the
Group’s robust remuneration governance framework (summarised below), which aims to ensure that
the Group’s remuneration practices are fair, reasonable, aligned with best practice and consistent with
the Group’s remuneration principles outlined in section 3.1.
In addition to maintaining a robust remuneration governance framework, Afterpay meets with
shareholders and proxy advisors regularly in relation to feedback on remuneration practices and
outcomes.
Figure 4
Overview of the Group’s remuneration governance framework
Afterpay Board
The Board is responsible for reviewing and approving the remuneration framework (including key policies and
practices), the remuneration structure, quantum and outcomes for Executive KMP (including exercising discretion
where required) and the remuneration of Non-Executive Directors.
People, Remuneration & Nomination Committee
Role and Responsibilities
The People, Remuneration & Nomination Committee Charter sets out the Committee's role, responsibilities, and
how it operates. During FY21, the Board reviewed and updated the Charter to reﬂect a continued uplift in
governance practices generally and to more clearly delineate the Committee’s responsibilities.
The People, Remuneration & Nomination Committee is responsible for assisting the Board to set the remuneration
framework (ensuring it is aligned with Afterpay’s purpose, values, strategic objectives and risk appetite), and
determine the appropriate remuneration for the co-CEOs and senior executives (having regard to their
performance) and Non-Executive Directors. The People, Remuneration & Nomination Committee considers the
remuneration framework when developing recommendations for the Board regarding the remuneration structure,
quantum and outcomes for Executive KMP. In addition, the Committee has oversight and responsibilities in respect
of monitoring corporate culture, employee engagement, and other people-related policies (including talent
identiﬁcation, training and development, and diversity).
The People, Remuneration & Nomination Committee Charter sets out the Committee's role and responsibilities,
composition, structure and membership requirements.
Composition
It is critical that the People, Remuneration & Nomination Committee is independent of management when making
decisions affecting employee remuneration. Accordingly, the People, Remuneration & Nomination Committee
consists entirely of Non-Executive Directors, all of whom are independent. Where appropriate, the Group’s Co-CEO’s
(Anthony Eisen and Nick Molnar), Chief People Ofﬁcer and CFO attend Committee meetings. However, they do not
participate in formal decision-making or discussions relating to their own remuneration.
The People, Remuneration & Nomination Committee also has appropriate access to the Chief Enterprise Risk
Ofﬁcer and Audit, Risk & Compliance Committee to ensure that risk considerations (both ﬁnancial and
non-ﬁnancial) are reﬂected in ﬁnal remuneration outcomes for Executive KMP.
Management
Proposals on executive remuneration outcomes
and implementing remuneration policies
Remuneration Advisers
External and independent remuneration advice
and information (refer section 6.2 for further
detail).
For further details of the composition and responsibilities of the People, Remuneration & Nomination
Committee (including a copy of the Committee’s Charter), please refer to the Corporate Governance
section on our website (https://corporate.afterpay.com/investors/corporate-governance).
74

6.2 Use of remuneration consultants
The People, Remuneration & Nomination Committee (through the Chair of the Committee) may seek
and consider advice from external advisers from time to time to assist the Committee to discharge its
duties. Any advice from consultants is used as a reference point by the Committee and the Board and
does not serve as a substitute for thorough consideration by the Non-Executive Directors.
During the Reporting Period, KPMG was engaged by the People, Remuneration & Nomination
Committee to provide independent advice in respect of a range of remuneration related matters. In
FY21, KPMG provided remuneration recommendations as deﬁned in section 9B of the Corporations Act
2001 in relation to the quantum of Executive KMP remuneration. KPMG was paid $12,000 (plus GST) for
these services.
The Board is satisﬁed that the recommendation was made free from undue inﬂuence by the member
or members of Executive KMP to whom the recommendations relate. In addition to adhering to
Board-approved protocols, KPMG provided a formal declaration in this regard to the Chair of the People,
Remuneration & Nomination Committee.
KPMG Australia also provided other advice relating to incentive design and the provision of data and
market practice, as well as legal, tax, accounting, valuations, global mobility and migration during FY21.
KPMG Australia was paid a total of $668,909 (excluding GST and disbursements) for services provided to
the Group during FY21.
6.3 Details of Executive Service Agreements
All Executive KMP have a written Executive Service Agreement with the Group. The key terms of these
agreements are detailed in the table below.
Table 15
Key terms of Executive KMP contracts in FY21
Executive service agreements
Element
Further detail
Duration
Ongoing term
Periods of
notice required
to terminate
Either party may terminate the contract by giving:
●
six months’ written notice for Co-CEOs (Anthony Eisen and Nick Molnar);
and CFO (Rebecca Lowde); and
●
three months’ written notice for the former Global CFO (Luke Bortoli).
The notice period provisions for the Co-CEOs also provide that notice of
termination given by one co-CEO must not overlap with any notice of
termination given by the other co-CEO, unless approved by the Board in writing.
For all current and former Executive KMP, the Group may terminate the service
agreement immediately without notice in certain circumstances, including (but
not limited to) where the relevant Executive KMP engages in a serious breach of
agreement or serious misconduct.
Termination
payments
Members of the Executive KMP are not entitled to any termination payments. A
payment may be made in lieu of notice at the discretion of the Board where
termination occurs other than for cause.
As noted in section 3, Afterpay’s former Group CFO (Luke Bortoli) ceased as a KMP of Afterpay Limited
on 5 October 2020. Luke Bortoli remained employed with Afterpay to assist with transition to the new
Chief Financial Ofﬁcer, Rebecca Lowde, and ceased employment with the Group on 30 June 2021.
6.4 Executive KMP and Director share ownership
The two tables below set out the number of shares held directly, indirectly or beneﬁcially by Directors
and Executive KMP (including their related parties).
75

As disclosed to the market in July 2020, concurrent with the Group’s Share Purchase Plan, the Co-CEOs
sold 2.05 million shares, representing 10% of their respective holdings in the Group. In February 2021, the
Co-CEOs announced the intention to establish Private Ancillary funds for charitable purposes. The
Co-CEOs have since each transferred 950,000 APT shares from their personal shareholdings to those
funds and sold down 450,000 APT shares. The Co-CEOs remain fully committed to Afterpay and are the
two largest shareholders in the Group.
Table 16
Movements in shareholdings not held under an employee share plan
Opening balance
1-Jul-20
Purchase
of shares
Disposal
of shares
Balance
30-Jun-21
Non-Executive Directors
Elana Rubin
64,847
304
-
65,151
Dana Stalder
19,300
-
-
19,300
Gary Briggs
-
2,630
-
2,630
Pat O’Sullivan
7,169
304
-
7,473
Sharon Rothstein
-
3,350
-
3,350
Executive KMP
Anthony Eisen
20,450,659
1,500,3041
(2,495,000)
19,455,963
Nick Molnar
20,450,659
1,500,3041
(2,495,000)
19,455,963
Rebecca Lowde
(part year)
-
-
-
-
Luke Bortoli
(part year)2
-
-
-
-2
1.
Includes 1,500,000 shares resulting from the exercise of options under an employee share plan (see Table 17 below).
2. As at 5 October 2020, being the date that Luke Bortoli ceased as a KMP.
Table 17
Movements in shareholdings held under an employee share plan
Instrument
Opening
balance
1-Jul-20
Granted
Exercised
Lapsed /
cancelled
Balance
30-Jun-21
Exercisable
30-Jun-21
Non-Executive Directors
Elana Rubin
N/A
-
-
-
-
-
-
Dana Stalder
N/A
-
-
-
-
-
-
Gary Briggs
N/A
-
-
-
-
-
-
Pat O’Sullivan
N/A
-
-
-
-
-
-
Sharon Rothstein
N/A
-
-
-
-
-
-
Executive KMP
Anthony Eisen
Options
1,625,000
40,203
(1,500,000)
-
165,203
-
Nick Molnar
Options
1,625,000
40,203
(1,500,000)
-
165,203
-
Rebecca Lowde
(part year)1
Options
-
4,282
-
-
4,282
-
RSUs
-
2,443
-
-
2,443
-
Luke Bortoli
(part year)2
Options
450,000
-
-
-
450,0002
-2
1.
Rebecca Lowde commenced as KMP on 6 October 2020, her start date.
2. As at 5 October 2020, being the date that Luke Bortoli ceased as a KMP.
76

7. Further Information
7.1
US ESOP
(a)
US ESOP
The Afterpay US, Inc. 2018 Equity Incentive Plan (US ESOP) is a share option plan under which the
Group may issue options to eligible participants to acquire shares in Afterpay US, Inc., the Group’s US
based subsidiary. US ESOP options typically vest over a four-year period and are subject to vesting
conditions. On vesting and exercise of US ESOP options, eligible participants are allocated shares in
Afterpay US, Inc. (exercised shares). In order to provide eligible participants with a mechanism to
liquidate their exercised shares, the exercised shares may be exchanged for fully paid ordinary APT
shares in speciﬁed circumstances. The total US ESOP pool was limited to options over a maximum of
10% of Afterpay US, Inc. fully diluted shares on issue.
The US ESOP was established to facilitate the attraction and retention of top-tier talent in the US, who
have been critical to delivering the Group’s US growth aspirations, and has been successful in achieving
these objectives. As previously announced, the US ESOP is now closed to new offers. New incentive
awards made to US employees are being provided by way of awards over APT equity to ensure a
globally aligned and consistent approach going forward and to provide greater transparency for
Afterpay stakeholders. No Executive KMP participates in the US ESOP.
(b)
US ESOP Modiﬁcation
During the period, eligible US ESOP participants were offered an ability to exchange their vested shares
and options, and unvested shares in Afterpay US, Inc. (FY21 US ESOP Modiﬁcation). Participants that
chose to participate in the FY21 US ESOP Modiﬁcation received a combination of cash, APT shares, and
restricted APT shares based on an agreed value of Afterpay US, Inc. shares. The FY21 US ESOP
Modiﬁcation resulted in:
●
Purchase of 2,009,106 vested shares and vested options from US ESOP participants for $202.6
million;
●
Exchange of 3,874,478 vested shares for 2,784,186 APT shares;
●
Exchange of 987,058 unvested shares for 709,289 restricted APT shares (restricted until vesting
period concludes).
Further detail in respect of the US ESOP and US ESOP Modiﬁcation is available in Note 22 of the Notes
to the Financial Statements.
7.2 UK ESOP
The Group had previously conﬁrmed that it would establish an equity incentive plan comprising
options over equity in Afterpay’s UK based subsidiary ClearPay Finance Limited (Clearpay) (UK ESOP),
in accordance with the terms of the acquisition of Clearpay from ThinkSmart. As part of these terms,
ThinkSmart agreed to provide for an equity pool of 3.5% Clearpay shares on issue (out of its remaining
10% shareholding in Clearpay) that could be used for the purposes of a UK ESOP in the form of options
over the 3.5% of Clearpay shares.
The Board of Afterpay and Clearpay adopted the UK ESOP Rules on 24 June 2020. As previously
disclosed, after the UK ESOP pool has been fully allocated to UK employees, new incentive awards
made to UK employees will be provided by way of awards over APT equity to ensure consistency with
market practice and transparency for our shareholders going forward. No Executive KMP participates in
the UK ESOP.
Further detail in respect of the UK ESOP, including the exchange mechanism and maximum dilution
impact, is outlined in detail in Note 22 of the Notes to the Financial Statements.
77

7.3 Movement of securities
The table below discloses the number of options or RSUs granted, vested or lapsed during FY21 for Executive KMP.
Table 18
Options or RSUs awarded, vested and lapsed during the reporting period for Executive KMP
Awarded
No. vested
during the
reporting
period
No. lapsed
during the
reporting
period
Exercised
Key Management
Personnel
Financial
year
Instrument
Awarded
during the
reporting
period
Award date
Fair value
at award
date1
$
Vesting date2
Exercise
price
$
Expiry date
Value of
options
granted
during the
reporting
period $
No. exercised
during the
reporting
period
Value of
options
exercised
during the
reporting
period
$3
Executive KMP
Anthony Eisen
2021
Options
40,203
17/11/2020
51.62
30/06/2023
98.97
01/07/2025
2,075,451
-
-
1,500,000
131,625,000
Nick Molnar
2021
Options
40,203
17/11/2020
51.62
30/06/2023
98.97
01/07/2025
2,075,451
-
-
1,500,000
131,625,000
Rebecca Lowde
(part year)4
2021
Options
4,282
22/11/2020
57.27
30/06/2023
78.87
01/07/2025
245,238
-
-
-
-
RSUs
2,443
22/11/2020
97.59
01/07/2023
-
-
238,412
-
-
-
-
Luke Bortoli
(part year)5
2021
N/A
-
-
-
-
-
-
-
-
-
-
-
1.
The fair value of options are calculated using the Binomial Model.
2. Vesting date of options is the earliest date the vested options can be exercised. Vesting date of RSUs is the date when all RSUs are fully vested (refer section 4.2.2).
3. Options vested and exercised is calculated as the difference between the share price at the date of exercise less the exercise price, and includes options vested in prior years that were exercised in FY21.
4. Rebecca Lowde commenced as KMP on 6 October 2020, her start date.
5. Luke Bortoli ceased as KMP on 5 October 2020.
78

7.4 Other transactions and balances with Executive KMP
7.4.1 Loans to Executive KMP
No Executive KMP or their related parties held any loans with the Group during the Reporting Period.
7.4.2 Other Executive KMP transactions
The Group did not engage in any transactions with Executive KMP or their related parties during the
Reporting Period.
79

FY21 Financial
Statements.
Our leadership team has
worked with teams around
the world to execute Afterpay’s
strategy, with a focus on driving
our vision of fairness and
financial freedom for all, and
our mission to power an economy
in which everyone wins

121 Group structure
121 Note 18–Business combinations
124 Note 19–Related party disclosure
126 Note 20–Information relating to Afterpay
Limited (The Parent)
126 Note 21–Deed of cross guarantee
128 Employee remuneration
128 Note 22–Share-based payment plans
134 Note 23–Key management
personnel compensation
135 Items not recognised in
the financial statements
135 Note 24–Commitments and contingencies
135 Note 25–Events occurring
after the reporting period
137 Other information
137 Note 26–Auditor’s remuneration
137 Note 27–Other significant
accounting policies
138 Directors’ declaration
139 Auditor’s Report
149 Additional Securities
Exchange Information
153 Corporate Information
Contents.
82 Consolidated statement of comprehensive income
83 Consolidated statement of financial position
84 Consolidated statement of changes in equity
85 Consolidated statement of cash flows
86 Notes to the financial
statements
86 Note 1–Basis of preparation
87 Group Performance
87 Note 2–Segment information
89 Note 3–Other income
90 Note 4–Expenses
91 Note 5–Taxation
94 Note 6–Earnings per share (EPS)
98 Assets and liabilities
98 Note 7–Cash and cash equivalents
99 Note 8–Receivables
102 Note 9–Other financial assets
102 Note 10–Property, plant and equipment
103 Note 11–Right-of-use assets
104 Note 12–Intangible assets
108 Capital structure, financing
& risk management
108 Note 13–Equity
110 Note 14–Lease liabilities
111 Note 15–Borrowings
113 Note 16–Other financial liabilities
116 Note 17–Financial risk management
objectives and policies

Consolidated statement
of comprehensive income
2021
2020
For the year ended 30 June
Note
$'000
$'000
Afterpay income
2
822,258
433,815
Pay Now revenue
2
13,788
16,493
Other income
3
88,624
68,843
Total income
924,670
519,151
Cost of sales
(249,564)
(134,295)
Gross proﬁt
675,106
384,856
Depreciation and amortisation expenses
4
(38,989)
(30,035)
Employment expenses
4
(150,911)
(86,129)
Share-based payment expenses
(59,003)
(30,454)
Receivables impairment expenses
8
(195,056)
(94,493)
Net loss on ﬁnancial liabilities at fair value
16
(96,835)
(1,999)
Operating expenses
4
(298,596)
(146,305)
Operating loss
(164,284)
(4,559)
Share of loss of associate
(2,271)
(1,101)
Gain on dilution of shareholding in associate
19
5,683
-
Finance income
965
1,408
Finance costs
(34,307)
(22,530)
Loss before tax
(194,214)
(26,782)
Income tax beneﬁt
5
34,819
3,925
Loss after tax
(159,395)
(22,857)
Other comprehensive loss
Other comprehensive loss to be reclassiﬁed to proﬁt or loss in
subsequent periods (net of tax)
Exchange differences on translation of foreign operations
(31,323)
(17,904)
Total comprehensive loss, net of tax
(190,718)
(40,761)
Loss after tax attributable to:
Ordinary shareholders of Afterpay Limited
(156,298)
(19,780)
Non-controlling interests
(3,097)
(3,077)
Earnings per share for loss attributable to the ordinary
shareholders of the company
6
$
$
Basic loss per share
(0.55)
(0.08)
Diluted loss per share
(0.55)
(0.08)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
82

Consolidated statement
of ﬁnancial position
2021
2020
As at 30 June
Note
$’000
$’000
ASSETS
Current Assets
Cash and cash equivalents
7
1,147,147
606,041
Receivables
8
1,454,072
781,895
Other ﬁnancial assets
9
26,788
10,660
Other assets
18,780
6,695
Income tax receivable
10,970
-
Total Current Assets
2,657,757
1,405,291
Non-Current Assets
Property, plant and equipment
10
8,112
5,127
Right-of-use assets
11
33,958
6,999
Intangible assets
12
227,513
106,589
Deferred tax assets
5
156,127
78,291
Investment in associate
19
23,578
5,166
Other ﬁnancial assets
9
3,217
893
Other assets
5,965
170
Total Non-Current Assets
458,470
203,235
TOTAL ASSETS
3,116,227
1,608,526
LIABILITIES
Current Liabilities
Trade and other payables
306,259
182,613
Employee beneﬁt provision
10,323
5,279
Other provisions
501
-
Contract liabilities
3,636
224
Lease liabilities
14
2,201
4,278
Income tax payable
2,477
1,158
Total Current Liabilities
325,397
193,552
Non-Current Liabilities
Employee beneﬁt provision
672
513
Other provisions
1,222
305
Lease liabilities
14
31,999
3,167
Borrowings
15
1,286,383
461,600
Other ﬁnancial liabilities
16
166,648
3,038
Total Non-Current Liabilities
1,486,924
468,623
TOTAL LIABILITIES
1,812,321
662,175
NET ASSETS
1,303,906
946,351
EQUITY
Issued capital
13
2,204,450
975,317
Accumulated losses
(246,653)
(90,355)
Reserves
(654,704)
58,711
Equity attributable to the ordinary shareholders of Afterpay Limited
1,303,093
943,673
Non-controlling interests
813
2,678
TOTAL EQUITY
1,303,906
946,351
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
83

Consolidated statement
of changes in equity
Issued
Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserve
Other
reserves
(Note 13)
Total
Non-
Controlling
Interest
Total
For the year ended 30 June 2021
$’000
$’000
$’000
$’000
$’000
$’000
$’000
At 1 July 2020
975,317
(90,355)
(18,725)
77,436
943,673
2,678
946,351
Loss after tax
-
(156,298)
-
-
(156,298)
(3,097)
(159,395)
Other comprehensive loss
-
-
(31,323)
-
(31,323)
-
(31,323)
Total comprehensive loss
-
(156,298)
(31,323)
-
(187,621)
(3,097)
(190,718)
Transactions
Issue of share capital
786,167
-
-
-
786,167
-
786,167
Issue of ordinary shares, as
consideration for a business
combination, net of transaction
costs and tax
1,737
-
-
-
1,737
-
1,737
Share and APT Convertible
Notes issue expenses
(net of tax)
(11,741)
-
-
(4,705)
(16,446)
-
(16,446)
Share options, RSUs and loan
shares exercised (net of tax)
51,617
-
-
(316,466)
(264,849)
415
(264,434)
Share-based payments
-
-
-
41,319
41,319
817
42,136
FY21 US ESOP Modiﬁcation
(Note 22)
401,353
-
-
(195,579)
205,774
-
205,774
Matrix Transaction (Note 22)
-
-
-
(372,465)
(372,465)
-
(372,465)
Issue of APT Convertible Notes
(net of tax) (Note 15)
-
-
-
165,804
165,804
-
165,804
At 30 June 2021
2,204,450
(246,653)
(50,048)
(604,656)
1,303,093
813
1,303,906
Issued
Capital
Accumulated
Losses
Foreign
Currency
Translation
Reserve
Other
reserves
Total
Non-
Controlling
Interest
Total
For the year ended 30 June 2020
$’000
$’000
$’000
$’000
$’000
$’000
$’000
At 1 July 2019
674,769
(70,575)
(821)
42,186
645,559
2,957
648,516
Loss after tax
-
(19,780)
-
-
(19,780)
(3,077)
(22,857)
Other comprehensive loss
-
-
(17,904)
-
(17,904)
-
(17,904)
Total comprehensive loss
-
(19,780)
(17,904)
-
(37,684)
(3,077)
(40,761)
Transactions
Issue of share capital
233,012
-
-
-
233,012
-
233,012
Share issue expenses
(net of tax)
(1,782)
-
-
-
(1,782)
-
(1,782)
Share options and loan shares
exercised (net of tax)
69,318
-
-
6,637
75,955
957
76,912
Share-based payments
-
-
-
28,613
28,613
1,841
30,454
At 30 June 2020
975,317
(90,355)
(18,725)
77,436
943,673
2,678
946,351
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
84

Consolidated statement
of cash ﬂows
2021
2020
For the year ended
Note
$'000
$'000
Cash ﬂows from operating activities
Receipts from customers
18,645,746
9,954,963
Payments to employees
(146,483)
(80,895)
Payments to merchants and suppliers
(19,068,588)
(10,103,761)
Income taxes paid
(1,870)
(4,260)
Net cash outﬂow from operating activities
7
(571,195)
(233,953)
Cash ﬂows from investing activities
Interest received
949
1,476
(Increase)/decrease in short-term deposits
(12,653)
560
Payments for development of intangible assets
(60,734)
(40,754)
Purchase of intangibles
(5,502)
(1,452)
Purchase of plant and equipment
(4,353)
(3,389)
Acquisition of subsidiaries, net of cash acquired
(13,616)
-
Contributions to associate
(15,000)
(5,088)
Net cash outﬂow from investing activities
(110,909)
(48,647)
Cash ﬂows from ﬁnancing activities
Proceeds from borrowings
793,268
1,386,247
Repayment of borrowings
(1,226,098)
(970,826)
Issue of APT Convertible Note
1,500,000
-
Matrix Transaction, net of transaction costs
22
(377,647)
-
Cash settlement of FY21 US ESOP Modiﬁcation
22
(202,587)
-
Proceeds from issue of shares
786,167
233,012
Share and APT Convertible Notes issue expenses
(46,041)
(5,208)
(Increase)/decrease in restricted cash
(12,271)
494
Proceeds from exercise of share options
27,400
30,550
Payment of lease liabilities
(6,209)
(5,307)
Interest and bank fees paid
(15,581)
(19,514)
Net cash inﬂow from ﬁnancing activities
1,220,401
649,448
Net increase in cash and cash equivalents
538,297
366,848
Foreign exchange on cash balance
2,809
7,737
Cash and cash equivalents at beginning of the year
606,041
231,456
Cash and cash equivalents at end of the year
7
1,147,147
606,041
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
85

Notes to the ﬁnancial
statements
1.
Basis of preparation
Afterpay Limited is a for-proﬁt company incorporated on 30 March 2017 and domiciled in Australia. The
securities of Afterpay Limited (the Company) are listed on the Australian Securities Exchange (ASX).
Afterpay Limited’s ASX code is ‘APT’. The activities of Afterpay Limited and its subsidiaries (together
referred to as ‘the Group’) are described in the Directors’ Report. The Group’s principal place of business
is 406 Collins Street, Melbourne, Victoria, Australia.
The Consolidated Financial Statements of Afterpay Limited as at and for the year ended 30 June 2021
were authorised for issue in accordance with a resolution of the Directors on 25 August 2021.
These ﬁnancial statements:
●
are general-purpose ﬁnancial statements, which have been prepared in accordance with
Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (AASB), and the Corporations Act 2001;
●
comply with Australian Accounting Standards and International Financial Reporting Standards
(IFRS), as issued by the International Accounting Standards Board;
●
have been prepared on a going concern basis using historical cost basis, except for the revaluation
of certain ﬁnancial instruments that are measured at fair value;
●
are presented in Australian dollars. All values are rounded to the nearest thousand ($’000), except
when otherwise indicated, in accordance with the Australian Securities and Investments
Commission (ASIC) Corporations Instrument 2016/191;
●
where necessary, comparative information has been restated to conform to changes in
presentation in the current year; and
●
apply signiﬁcant accounting policies consistently to all periods presented, unless otherwise stated.
Signiﬁcant judgements, estimates and assumptions
Management has identiﬁed a number of accounting policies for which signiﬁcant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect ﬁnancial results or the ﬁnancial position
reported in future periods.
Further details of signiﬁcant judgements, estimates and assumptions may be found in the following
notes to the ﬁnancial statements:
●
Note 5 Taxation;
●
Note 8 Receivables;
●
Note 12 Intangible assets;
●
Note 16 Other ﬁnancial liabilities; and
●
Note 22 Share-based payment plans.
86

Group performance
2. Segment information
The Group’s reportable operating segments have been identiﬁed based on the ﬁnancial information
currently provided to the Chief Operating Decision Makers (CODMs). The CODMs, who are responsible
for allocating resources and assessing performance of the operating segments, have been identiﬁed as
the Co-Chief Executive Ofﬁcers and Chief Financial Ofﬁcer. The business operates under the following
segments:
●
Afterpay Asia Paciﬁc: Comprises the Afterpay platforms in Australia, New Zealand and Asia;
●
Afterpay North America: Comprises the Afterpay platforms in the United States of America and
Canada;
●
Clearpay: Comprises the Clearpay platforms in the United Kingdom and Europe;
●
Pay Now: Comprises Mobility, Health and e-Services; and
●
Corporate: Comprises Group expenses that are not directly attributable or allocated to the Afterpay,
Clearpay or Pay Now segments.
Non-IFRS ﬁnancial measures are reviewed by the CODMs for decision making purposes. EBITDA
(excluding signiﬁcant items) has been disclosed as it is the most IFRS-like measure reported to the
CODMs.
The Group continuously reviews its global operating model, ﬁnancial reporting systems and relevant
ﬁnancial measures reviewed by the CODMs for decision making purposes in light of its expansion into
regions outside of Australia. In the current year, this has resulted in the following changes:
●
Afterpay ANZ has been renamed to Afterpay Asia Paciﬁc to reﬂect changes to the Group’s
operating model during the year;
●
Afterpay Canada, which launched in August 2020, is included within Afterpay North America
(previously referred to as Afterpay US); and
●
Clearpay Europe, which launched in March 2021, is included within the Clearpay segment.
These changes have not resulted in any changes to the comparatives for the year ended 30 June 2021.
The Group’s reportable operating segments may change in the future in line with expansion and
review.
Services provided between operating segments are on an arm’s-length basis and are eliminated on
consolidation.
Segment EBITDA (excluding signiﬁcant items) does not include an allocation of operating costs related
to group functions (e.g. legal, human resources, ﬁnance, information technology etc.).
87

Afterpay Asia
Paciﬁc
Afterpay
North
America
Clearpay
Pay Now
Corporate
Total
Segments
For the year ended 30 June 2021
$’000
$’000
$’000
$’000
$’000
$’000
Total segment income1
427,384
390,841
92,657
13,788
-
924,670
Segment EBITDA (excl. signiﬁcant
items)2
195,232
(101,078)
13,559
8,794
(77,778)
38,729
Foreign currency gains
9,865
Share-based payment expenses
(59,003)
Net loss on ﬁnancial liabilities at fair
value
(96,835)
Share of loss of associate
(2,271)
Gain on dilution of shareholding in
associate
5,683
One-off items
(18,051)
EBITDA
(121,883)
Net ﬁnance cost
(33,342)
Depreciation and amortisation
(38,989)
Loss before tax
(194,214)
Income tax beneﬁt
34,819
Loss after tax
(159,395)
Afterpay
Asia Paciﬁc
Afterpay
North
America
Clearpay
Pay Now
Corporate
Total
Segments
For the year ended 30 June 2020
$’000
$’000
$’000
$’000
$’000
$’000
Total segment income1
313,687
162,724
26,247
16,493
-
519,151
Segment EBITDA (excl. signiﬁcant
items)2
142,177
(47,000)
(12,922)
6,532
(44,387)
44,400
Foreign currency gains
19,948
Share-based payment expenses
(30,454)
Net loss on ﬁnancial liabilities at fair
value
(1,999)
Share of loss of associate
(1,101)
One-off items
(6,419)
EBITDA
24,375
Net ﬁnance cost
(21,122)
Depreciation and amortisation
(30,035)
Loss before tax
(26,782)
Income tax beneﬁt
3,925
Loss after tax
(22,857)
1.
Total segment income includes Afterpay income, Pay Now revenue and Other income.
2.
Segment EBITDA (excluding signiﬁcant items) excludes the impact of share-based payment expenses, foreign currency gains, net
loss on ﬁnancial liabilities at fair value, share of loss of associate, gain on dilution of shareholding in associate, and one-off items. No
government grants or other beneﬁts relating to COVID-19 have been recognised in the year (2020: nil).
88

Signiﬁcant accounting policies
Afterpay income
Afterpay income is primarily derived from the difference between the consumer’s underlying order
value processed on the Afterpay platform and the net amount paid to the merchant by Afterpay,
referred to as Merchant fees. Afterpay generally pays merchants the net amount of the order value
less the Merchant fees, which consists of ﬁxed and variable rates, and Afterpay then assumes all
non-repayment risk from the consumer. There are no interest or fees charged by Afterpay to the
consumer, other than late fees described below.
Afterpay income is recognised in the Consolidated Statement of Comprehensive Income using the
Effective Interest Rate (EIR) method, accreting Merchant fees and other transaction related fees over
the average period from initial payment to the merchant by Afterpay to the ﬁnal instalment paid by
the consumer to Afterpay. The Group defers Afterpay income over the average time it takes for the
collection of the receivable to occur, with the current weighted average duration to recoup
end-consumer payments being approximately 23 days or less (2020: 25 days or less). This deferred
income is recorded as a reduction in the consumer receivables balance in Note 8.
Pay Now revenue
The Pay Now business primarily generates its revenue via transaction fees for delivery of completed
transactions and integration fees to connect new, or grant existing customers access to additional
service models. The transaction revenue is generated from facilitating the sales of electronic
products and services where the Group receives a fee (either ﬁxed or a percentage of the transaction
volume) for every successful transaction. Revenue is recognised on completion of a successful
transaction or when products are delivered and activated by end-customers. The Group is generally
remunerated for the transactional services on a weekly and monthly basis.
Revenue from these services are considered distinct and are recognised by reference to the stage of
completion of a contract or contracts in progress at balance date, as required by AASB 15 Revenue
from Contracts with Customers. Stage of completion is measured by reference to labour hours of
each contract, which aligns with the transfer of the services. Where there is a ﬁnal customer
acceptance condition in the contract, revenue is recognised only upon customer acceptance.
Contract liabilities are recorded in the Consolidated Statement of Financial Position in respect of any
unsatisﬁed performance obligations. The Group does not have any contract assets due to the
invoicing and payment terms generally being in advance of the service provision. Payments are
generally collected within 30 days of the provision of services.
3.
Other income
2021
2020
For the year ended 30 June
$'000
$'000
Late fees
87,306
68,843
Money by Afterpay
909
-
Other
409
-
Total other income
88,624
68,843
Signiﬁcant accounting policies
Late fee charges are currently used by Afterpay as an incentive to encourage end-customers to pay
their outstanding balances as and when they fall due. Late fees are recognised as Other income when
late fees become payable and are expected to be recovered.
Afterpay also generates revenue from other streams, including ‘Money by Afterpay’ in Australia.
89

4. Expenses
2021
2020
For the year ended 30 June
$'000
$'000
Depreciation and amortisation expenses
Depreciation
(9,592)
(7,607)
Amortisation
(29,397)
(22,428)
Total depreciation and amortisation expenses
(38,989)
(30,035)
Employment expenses
Wages and salaries
(131,348)
(74,113)
Employee on-costs
(19,563)
(12,016)
Total employment expenses
(150,911)
(86,129)
Operating expenses
Debt recovery costs, including chargebacks
(25,018)
(17,135)
Consulting and contractor costs
(55,614)
(32,896)
Marketing expenses
(168,809)
(70,520)
Communication and technology
(29,563)
(18,536)
Operating lease expenses1
(236)
(1,159)
Foreign currency gains
9,865
19,948
AUSTRAC related costs
-
(3,723)
Impairment2
(4,790)
-
General and administrative expenses
(24,431)
(22,284)
Total operating expenses
(298,596)
(146,305)
1.
Includes expenses relating to short-term leases and leases of low value assets.
2.
Includes goodwill impairment expense of $4.3 million (note 12).
Signiﬁcant accounting policies
Functional and presentation currency
Items included in the ﬁnancial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the functional
currency). The Consolidated Financial Statements are presented in Australian dollars ($), which is the
Company’s functional and presentation currency. Exchange differences arising on translation of the
foreign controlled entities are recognised in other comprehensive income and accumulated in the
Foreign currency translation reserve within equity. The cumulative amount is reclassiﬁed to the
Consolidated Statement of Comprehensive Income upon disposal of any net investment in foreign
controlled entities.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of
such transactions, and from the translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates, are generally recognised in the Consolidated Statement of
Comprehensive Income. They are deferred in equity if they relate to qualifying cash ﬂow hedges and
qualifying net investment hedges or are attributable to part of the net investment in a foreign
operation. Foreign exchange gains and losses are presented in the Consolidated Statement of
Comprehensive Income on a net basis within operating expenses.
90

5. Taxation
Income tax expense
2021
2020
For the year ended 30 June
$'000
$'000
The major components of income tax expense:
Current income tax charge
Current income tax expense
(42,096)
(21,945)
Adjustments in respect of current income tax of previous years
333
734
Deferred income tax
Relating to origination/reversal of temporary differences
70,537
25,619
Adjustment in relation to deferred income tax of previous years
6,045
(483)
Income tax beneﬁt
34,819
3,925
Statement of changes in equity
2021
2020
For the year ended 30 June
$'000
$'000
Current income tax related to share-based payments
(122,942)
(46,420)
Deferred income tax related to APT Convertible Notes
71,059
-
Deferred income tax related to capital raising costs
(5,032)
(764)
Total income tax related to items credited directly to equity
(56,915)
(47,184)
Numerical reconciliation between aggregate Income tax expense recognised
in the Consolidated Statement of Comprehensive Income and Income tax
expense calculated per the statutory income tax rate
A reconciliation between tax expense and the product of accounting loss before income tax multiplied
by the Group's applicable income tax rate is as follows:
2021
2020
For the year ended 30 June
$'000
$'000
Loss before tax
(194,214)
(26,782)
At the Group's statutory rate of 30% (2020: 30%)
58,264
8,035
Expenditure not allowed for income tax purposes
(27,591)
(2,199)
Foreign tax rate differential
401
(1,339)
Amount over provided in prior years
6,378
252
Non-recoverable foreign taxes
(259)
(824)
Tax losses not recognised
(2,374)
-
Income tax beneﬁt
34,819
3,925
91

Deferred income tax
2021
2020
As at 30 June
$'000
$'000
Deferred tax liabilities
Capitalisation of development expenditure
3,019
-
Acquired intangibles
2,554
1,530
Unrealised foreign exchange
1,295
1,331
Deferred receivables
12,071
5,772
APT Convertible Notes
67,113
-
Other
455
2,312
Gross deferred tax liabilities
86,507
10,945
Deferred tax assets
Capitalisation of development expenditure
4,303
708
Employee beneﬁts
16,053
5,768
Other provisions
1,722
580
Capital raising costs
6,140
3,314
Research and development offsets
3,763
1,000
Property, plant and equipment
843
640
Provision for expected credit losses
29,252
10,028
Deferred receivables
2,993
2,583
Losses
175,284
63,434
Other
2,281
1,181
Gross deferred tax assets
242,634
89,236
Net deferred tax assets
156,127
78,291
Signiﬁcant accounting judgements, estimates and assumptions
Timing of recognition of deferred tax balances
Deferred tax assets are recognised only to the extent that it is probable they will be utilised against
future taxable proﬁts not arising from the reversal of existing deferred tax liabilities. Judgement is
required in determining the probability, timing and extent of the forecast future proﬁts, particularly
in tax jurisdictions where there is a history of losses.
The determination of future forecast proﬁts uses operating budgets and strategic business plans
based on management’s view of the expected long-term growth proﬁle, adjusted for permanent and
temporary tax differences. The utilisation of the deferred tax asset is dependent on future taxable
proﬁts in excess of the proﬁts arising from the reversal of existing taxable temporary differences
(future taxable proﬁts). The amount of deferred tax assets dependent on future taxable proﬁts and
which relate to tax jurisdictions where the taxable entities have suffered a loss in the current or
preceding year was $175.3 million at 30 June 2021 (2020: $63.4 million). The Group also has $9.3
million in deferred tax assets which have not been recognised at 30 June 2021 (2020: nil) as they are
not considered probable to be recoverable based on current forecasts.
The inclusion of forward-looking information increases the degree of judgement required.
Differences between the future proﬁts of the Group (and the timing of these proﬁts) and the tax
positions in the ﬁnancial report of the Group could necessitate future adjustments to the deferred
tax balances recorded.
92

Signiﬁcant accounting policies
Income tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the
Consolidated Statement of Comprehensive Income except for those items recognised directly in
equity. Current tax in respect of the taxable income for the year is measured at the amount expected
to be recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively enacted by the reporting date.
Deferred tax is recognised using the balance sheet method in which temporary differences are
calculated based on the difference between the tax bases of assets and liabilities and their carrying
amounts for ﬁnancial reporting purposes. Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset is realised, or the liability is settled, based
on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax assets are recognised for deductible temporary differences and unused tax credits and
tax losses only to the extent that it is probable that future taxable proﬁt will be available against
which the assets can be utilised. Unrecognised deferred tax assets are reassessed at each reporting
date and are recognised to the extent that it has become probable that future taxable proﬁt will
allow the deferred tax asset to be recovered.
The tax effect of awards granted under the Group’s equity incentive plans (see Note 22) is recognised
in the Consolidated Statement of Comprehensive Income except to the extent that the total tax
deductions are expected to exceed the cumulative share-based payments expense of an award. In
this situation, the excess of the associated current or deferred tax is recognised in equity within the
Share-based payments reserve.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to
the same taxable entity and the same taxation authority.
Tax consolidation legislation
Afterpay Limited and its wholly-owned Australian controlled subsidiaries formed a tax consolidated
group effective from 15 August 2017. Afterpay Limited and the members of the tax consolidated
group recognise their own current tax and deferred tax assets and liabilities arising from temporary
differences using the ‘standalone taxpayer approach’ by reference to the carrying amounts of assets
and liabilities in the separate ﬁnancial statements of each entity and the tax values applying under
tax consolidation. In addition to its current and deferred tax balances, Afterpay Limited, as the head
entity, has assumed the current tax liabilities and any deferred tax assets arising from unused tax
credits or losses of the members in the tax consolidated group.
Nature of tax funding arrangements and tax sharing arrangements
Entities in the tax consolidated group entered into a tax funding agreement with the head entity.
The arrangements require payments to/(from) the head entity equal to the current tax liability/(asset)
assumed by the head entity and any deferred taxes relating to unused tax losses or unused tax
credits transferred to the head entity, resulting in the head entity recognising an inter-entity
receivable/(payable) equal in amount to the tax liability/(asset) assumed.
The inter-entity receivables/(payables) are at call. Contributions to fund the current tax liabilities are
payable as per the tax funding agreement. The head entity, in conjunction with other members of
the tax consolidated group, has entered into a tax sharing agreement. The tax sharing agreement
provides for the determination of the allocation of income tax liabilities between the entities should
the head entity default on its tax payment obligations. No amounts have been recognised in the
ﬁnancial statements in respect of this agreement as payment of any amounts under the tax sharing
agreement is considered remote.
Other taxes
Revenues, expenses and assets are recognised net of the amount of sales tax (goods and services tax
(GST) or value-added tax (VAT)) except:
●
when the sales tax incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
●
receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the Consolidated Statement of Financial Position. Cash ﬂows are
included in the Consolidated Statement of Cash Flows on a gross basis and the sales tax component
of cash ﬂows arising from investing and ﬁnancing activities, which is recoverable from, or payable to,
the taxation authority, is classiﬁed as operating cash ﬂows. Commitments and contingencies are
disclosed net of the amount of sales tax recoverable from, or payable to, the taxation authority.
93

6. Earnings per share (EPS)
The following table outlines the loss and share data used in the basic and diluted EPS calculations:
2021
2020
$'000
$'000
Loss attributable to ordinary shareholders of Afterpay Limited
(156,298)
(19,780)
No.'000
No.'000
Weighted average number of ordinary shares for basic EPS
284,713
259,147
Adjustment for calculation of diluted EPS1
2,832
6,839
Weighted average number of ordinary shares adjusted for the effect of
dilution
287,545
265,986
1.
Includes the effect of dilution from share options, loan shares and rights (e.g. restricted stock units) if they are not anti-dilutive.
Basic EPS amounts are calculated by dividing the loss for the period attributable to ordinary equity
holders of Afterpay Limited by the weighted average number of ordinary shares outstanding during the
period.
Diluted EPS amounts are calculated by dividing the loss attributable to ordinary equity holders of
Afterpay Limited by the sum of the weighted average number of ordinary shares outstanding during
the period and the weighted average number of ordinary shares that would be issued if all securities
which have the potential to cause dilution are converted into ordinary shares.
The adjustment for the calculation of diluted EPS in the table above does not take into account any
options or similar conversion or exchange rights issued under the Matrix Convertible Notes, Clearpay
Put and Call Option, US ESOP, UK ESOP, Pagantis Convertible Note or the APT Convertible Notes.
Further details on these arrangements are included below.
The potential number of APT shares that could be issued under these arrangements were excluded
from the adjustment for the calculation of diluted EPS in the table above given the number of APT
shares to be issued will only be determined on exercise and conversion or exchange (as applicable)
which will occur at a future date and based on future valuations which are unable to be reliably
estimated today. In all arrangements, the number of APT shares which may be issued on conversion or
exchange is subject to maximum levels, details of which are included below.
The potential impact of the Square Acquisition (Note 25) has not been reﬂected in the potentially
dilutive impacts of the following arrangements as at 30 June 2021.
Matrix Convertible Notes
On 19 January 2018, Afterpay US, Inc. issued two convertible notes to Matrix Partners X L.P and Weston &
Co X LLC (Matrix Convertible Notes). The Matrix Convertible Notes may be converted into APT shares in
certain circumstances between 5 and 7 years from the date of issue of the notes (being 19 January
2018), with conversion at the noteholder’s election. Conversion of the Matrix Convertible Notes may also
be accelerated, at the Group’s election, in the event of a change in control of APT.
On 25 February 2021, Afterpay entered into an agreement to extinguish 35% of the Matrix Convertible
Notes for $373.3 million in cash (the FY21 Matrix Transaction). All other terms of the Matrix Convertible
Notes remain unchanged. See Note 22 for further details.
The number of APT shares which may be issued on conversion is determined by a conversion value
calculated based on 6.5% (2020: 10%) of the future value of Afterpay US, Inc. in excess of US$50 million
(to be determined by an independent valuation at the time of conversion) divided by the volume
weighted average price (VWAP) of APT shares over the 30 trading days up to (but excluding) the date
on which an exercise notice is delivered.
Subsequent to the FY21 Matrix Transaction, the maximum number of shares in APT that may be issued
in the future on conversion of the remaining Matrix Convertible Notes is capped at 14,155,480 being 6.5%
of the number of APT shares on issue at the date the Matrix Convertible Notes were issued (2020:
21,777,661 and 10%). This now equates to less than 5% of current APT shares on issue due to subsequent
share issues since the Matrix Convertible Notes were issued.
94

US ESOP
The Afterpay US, Inc. 2018 Equity Incentive Plan (US ESOP) is a share option plan established in 2018
under which the Group may issue options to eligible participants to acquire shares in Afterpay US, Inc.,
the Group’s US based subsidiary. On vesting and exercise of US ESOP options, eligible participants are
allocated shares in Afterpay US, Inc. (exercised shares). In order to provide eligible participants with a
mechanism to liquidate their exercised shares, the exercised shares may be exchanged for fully paid
ordinary APT shares in speciﬁc circumstances.
The number of APT shares which are issued in exchange for exercised shares in Afterpay US, Inc. will be
based on the future value of Afterpay US, Inc. shares (based on the same valuation as referred to in the
Matrix Convertible Notes, or based on an independent valuation in the case of exchange occurring at
the discretion of the APT Board, as applicable).
During the year, the Group exchanged 3,493,475 APT shares for exercised shares or options in Afterpay
US, Inc as part of the FY21 US ESOP Modiﬁcation (see Note 22 for further details). The maximum
number of APT shares that could be issued in the future under the US ESOP in exchange for exercised
shares cannot exceed 18,284,186 APT shares (2020: 21,777,661), being 10% of the number of APT shares on
issue at the date the Matrix Convertible Notes were issued, less the number of APT shares issued as part
of the FY21 US ESOP Modiﬁcation. This now equates to less than 7% of current APT shares on issue due
to subsequent share issues since the Matrix Convertible Notes were issued.
Further detail in respect of the US ESOP, including the exchange mechanism and details of the FY21 US
ESOP Modiﬁcation, are outlined in Note 22.
Clearpay Put and Call Option
On 23 August 2018, the Group acquired 90% of the issued shares in ClearPay Finance Limited (Clearpay)
(an unlisted entity based in the United Kingdom, 100% owned by ThinkSmart Limited) (ThinkSmart) for
total consideration of 1.0 million APT shares. The Group has a call option to acquire the remaining
Clearpay shares held by ThinkSmart, which is exercisable any time after 5 years from the completion of
the acquisition of 90% of Clearpay (being 23 August 2018). If the Group does not exercise its call option
within that period, then ThinkSmart has a put option to sell all the remaining shares it holds in Clearpay
to the Group, exercisable any time after 5.5 years from the above mentioned date of completion.
APT has the right to exercise the call option earlier than 5 years from the above mentioned date of
completion in the event of a change of control of either APT or ThinkSmart. APT may also exercise the
call option early on certain events of default or insolvency events in relation to ThinkSmart, in which
case the exercise price will be based on Clearpay's net tangible assets instead of the valuation principles
described below.
Consideration for the remaining Clearpay shares held by ThinkSmart at the time of exercise of the put
or call option will be determined by agreement, or failing agreement, by an independent expert
valuation of Clearpay shares. Consideration may be paid by the Group in cash or APT shares, at APT's
election. The number of APT shares that may be issued and exchanged as consideration for the
remaining Clearpay shares will be based on the value of the remaining Clearpay shares divided by the
VWAP of APT shares over the 5 trading days up to the date of option exercise. The maximum number of
APT shares that may be issued or exchanged for the remaining Clearpay shares held by ThinkSmart as a
result of its exercise of the put option is capped at 5% of APT shares on issue at the time of exchange.
95

UK ESOP
The Group has established an equity incentive plan comprising options over equity in Afterpay’s UK
based subsidiary Clearpay Finance Limited (Clearpay) (UK ESOP), in accordance with the terms of the
acquisition of Clearpay from ThinkSmart. As part of these terms, ThinkSmart agreed to provide for an
equity pool of 3.5% Clearpay shares on issue (out of its remaining 10% shareholding in Clearpay) that
could be used for the purposes of a UK ESOP in the form of options over the 3.5% of Clearpay shares. In
this way, the UK ESOP does not dilute Afterpay’s 90% shareholding in Clearpay.
On exercise of UK ESOP options, eligible participants will be allocated shares in Clearpay (exercised
shares). In order to provide eligible participants with a mechanism to liquidate their exercised shares, it
is intended that exercised shares may be exchanged for fully paid ordinary APT shares or cash (at the
Group’s election) in speciﬁed circumstances. It is intended that exercised shares in Clearpay will be
exchanged into APT shares or cash at the same valuation of Clearpay shares as the Clearpay Put and
Call Option (as applicable) outlined above.
The maximum number of APT shares that can be issued in exchange for exercised Clearpay shares
under the UK ESOP is subject to a capped at 8,039,024, being 3% of APT shares on issue at the date of
adoption of the UK ESOP Rules on 24 June 2020.
Further detail in respect of the UK ESOP, including the exchange mechanism, is outlined in Note 22.
Pagantis Convertible Note
On 9 March 2021 (the Pagantis Completion Date), the Group acquired 100% of the issued shares and
voting rights in Pagantis SAU and PMT Technology SLA (collectively, Pagantis) from NBQ Corporate SLU
(NBQ). Pursuant to the Share Purchase Agreement, the Group has issued a convertible note (the
Pagantis Convertible Note) to NBQ or its permitted assigns (the noteholders) with a face value of €45
million (subject to certain adjustments). The Pagantis Convertible Note will be used to settle the
Pagantis Deferred Consideration and the Pagantis Contingent Consideration that will be paid in three
(or, in certain circumstances, three-and-a-half) years subsequent to the Pagantis Completion Date.
Conversion may also be accelerated, at the Group’s election, in the event of a change in control of APT.
The face value of the Pagantis Convertible Note represents the Pagantis Deferred Consideration and
will be settled in cash.
The Pagantis Contingent Consideration (see Note 16) will also be settled by the Pagantis Convertible
Note and may be settled in APT shares or cash, at the Group’s election.
The number of APT shares which may be issued on conversion is determined by the value of the
Pagantis Contingent Consideration divided by the VWAP of APT shares over the 5 trading days up to
the date of conversion. The value of the Pagantis Contingent Consideration is determined with
reference to the equity value of Pagantis on the conversion date (the Equity Value). If the Equity Value
exceeds €45 million (subject to certain adjustments), the Pagantis Contingent Consideration is equal to:
●
50% of the Equity Value above €45 million (subject to certain adjustments), up to €100 million, plus
●
40% of the Equity Value above €100 million, up to €150 million, plus
●
10% of the Equity Value above €150 million.
Should Afterpay choose to settle a portion of the Pagantis Contingent Consideration with APT shares
(as opposed to cash), the value of that portion is increased by 1%.
Further details on the Pagantis Contingent Consideration, including the current valuation, are included
in Note 16.
The number of APT shares that may be issued is unknown, as the actual number of shares to be issued
will depend on the future Equity Value of Pagantis, the future market price of APT shares, and the
exercise of the Group of the election to settle the Pagantis Contingent Consideration in cash or APT
shares. However, the maximum Pagantis Deferred and Contingent Consideration is capped at
8,573,499, being 3% of the total number of APT shares on issue on the Pagantis Completion Date,
multiplied by the VWAP of APT shares over the 5 trading days up to the date of conversion.
96

APT Convertible Notes
On 12 March 2021, Afterpay Limited completed the settlement of $1.5 billion zero coupon convertible
notes (APT Convertible Notes). The 7,500 APT Convertible Notes were listed on the Singapore Exchange
on 15 March 2021 and have a maturity date of 12 March 2026. The APT Convertible Notes may also be
converted into APT shares in certain circumstances (including a change of control) at any time on or
after 22 April 2021 up to the maturity date, with conversion at the noteholder’s election.
The number of APT shares which may be issued on conversion is determined by dividing the principal
amount of the APT Convertible Notes to be converted by the Conversion Price on the conversion date.
The Conversion Price at 12 March 2026 is $194.8220 per APT share, subject to adjustment for term yet to
run.
The maximum number of shares in APT that may have been issued on conversion of the APT
Convertible Notes as at 30 June 2021 was 10,955,320. This equates to less than 4% of current APT shares
on issue.
97

Assets and liabilities
7.
Cash and cash equivalents
2021
2020
As at 30 June
$'000
$'000
Cash at bank
1,136,441
512,984
Short-term deposits
10,706
93,057
Total cash and cash equivalents
1,147,147
606,041
Reconciliation from the net loss before tax to the net cash outﬂow from operations
2021
2020
For the year ended 30 June
$'000
$'000
Loss before tax
(194,214)
(26,782)
Adjustments for:
Depreciation and amortisation expenses
38,989
30,035
Share-based payment expenses
59,003
30,454
Net loss on ﬁnancial liabilities at fair value
96,835
1,999
Share of loss of associate
2,271
1,101
Gain on dilution of shareholding in associate
(5,683)
-
Finance costs
34,307
22,530
Finance income
(965)
(1,408)
Foreign currency gains
(9,865)
(19,948)
Impairment
4,790
-
Changes in assets and liabilities:
Increase in total receivables
(672,177)
(329,196)
Increase in other working capital assets
(11,407)
(11,981)
Increase in working capital liabilities
93,105
73,503
Acquired net working capital
(4,314)
-
Tax paid
(1,870)
(4,260)
Net cash outﬂow from operating activities
(571,195)
(233,953)
98

Signiﬁcant accounting policies
Cash and cash equivalents in the Consolidated Statement of Financial Position comprises cash at
bank and in hand, cash in transit and cash in escrow for daily receipts and settlements that is settled
within one to seven days. Cash and cash equivalents also comprise short-term deposits with an
original maturity of three months or less that are readily convertible to known amounts of cash and
which are subject to an insigniﬁcant risk of changes in value. For the purposes of the Consolidated
Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as deﬁned
above.
8. Receivables
2021
2020
As at 30 June
$'000
$'000
Consumer receivables - face value
1,555,774
816,812
Consumer receivables - recognised over time1
(22,387)
(16,678)
Consumer receivables
1,533,387
800,134
Provision for expected credit losses - consumer receivables
(99,605)
(33,951)
Trade and other receivables
20,290
15,712
Total receivables
1,454,072
781,895
Provision for expected credit losses - consumer receivables
Opening balance
(33,951)
(27,760)
Provided in the year
(195,056)
(94,493)
Debts written off/collected
129,402
88,302
Total provision for expected credit losses - consumer
receivables
(99,605)
(33,951)
1.
Recognised over time represents the consumer transactions completed by period end but earned over the collection period of the
consumer receivables. Refer to Note 2 for further details.
Signiﬁcant accounting judgements, estimates and assumptions
Judgement is applied in measuring the Provision for expected credit losses (ECL) and determining
whether the risk of default has increased signiﬁcantly since initial recognition of the Consumer
receivable. The Group considers both quantitative and qualitative information, including historical
loss experience, internal expert risk assessment and data examination, and forward-looking
information and analysis. Historical balances, as well as the proportion of those balances that have
defaulted over time, are used as a basis to determine the probability of default.
The Group also considers forward looking adjustments, including macro-economic seasonality
trends that are not captured within the base ECL calculations. The inclusion of forward-looking
information increases the degree of judgement required to assess effects on the Group’s ECLs.
COVID-19 continues to impact economies around the globe on both a micro- and
macro-economic level. Consistent with 30 June 2020, the Group continues to review judgements,
estimates and assumptions speciﬁc to the impact of COVID-19, where relevant, in the
measurement of ECL. However, the Group’s collections subsequent to year end have not
deteriorated relative to past experience.
The assumptions and methodologies applied are reviewed regularly.
99

Signiﬁcant accounting policies
Trade and other receivables
Trade and other receivables are primarily amounts due from merchants as a result of transactions
with consumers. A receivable represents the Group’s right to an amount of consideration that is
unconditional (i.e. only the passage of time is required before payment of the consideration is
due). The Group’s business model is to hold the receivables with the objective to collect the
contractual cash ﬂows. Trade and other receivables are measured at amortised cost and generally
have 1 - 30 day payment terms. There are no contract assets at 30 June 2021 (2020: nil).
Collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts that
are known to be non-collectable are written off when identiﬁed. The Group has established a
provision matrix that is based on the Group’s historical credit experience adjusted for
forward-looking factors speciﬁc to the debtors and the economic environment.
The Group applies a simpliﬁed approach in calculating the expected credit losses (ECLs) for trade
receivables based on lifetime expected credit losses. The Group applies the general provision
approach prescribed under AASB 9 Financial Instruments to account for ECLs on other
receivables measured at amortised cost. Due to the short-term nature of the other receivables
(due on invoice) and the Group’s historical credit experience, the other receivables are written off
once overdue and there is no reasonable expectation of recovery.
Consumer receivables
Consumer receivables are amounts due from consumers for outstanding instalment payments on
orders processed on the Afterpay platform. The Group’s business model is to hold the receivables
with the objective to collect the contractual cash ﬂows. Consumer receivables are measured at
amortised cost using the Effective Interest Rate (EIR) method. They are generally due within 14 –
56 days.
The Group applies the general provision approach prescribed under AASB 9 to account for ECLs
on Consumer receivables measured at amortised cost. ECLs are based on the difference between
the contractual cash ﬂows due in accordance with the Afterpay terms and all the cash ﬂows that
the Group expects to receive. Due to the short-term nature of the Consumer receivables, the ECLs
are based on the lifetime ECL.
The Group uses ageing of Consumer receivables as the basis for ECL measurement given the
short duration of consumer payment terms (maximum 56 days). For consumers experiencing
hardship, payment terms may be extended which is determined on a per case basis.
At each reporting date, the Group assesses impairment risk on initial recognition of the Consumer
receivable and movements in the ageing of outstanding Consumer receivables to estimate the
ECL.
100

Under this impairment approach, AASB 9 requires the Group to classify Consumer receivables into
three stages, which measure the ECL based on credit migration between the stages. The Group
has deﬁned these stages as follows:
Stage
Ageing
Measurement basis
Stage 1
Not yet due
While the Consumer receivables are not yet due, an ECL has
been determined based on a probability of a default event
occurring over the life of the Consumer receivables.
Stage 2
1 to 61 days past due
Although there is usually no objective evidence of impairment,
when a consumer has not paid by the due date, it is an
indication that credit risk has increased. As a result, the loss
allowance for that Consumer receivable is measured at an
amount equal to the lifetime ECL for increased credit risk.
Lifetime ECL is the expected credit losses that result from all
possible default events over the expected life of the Consumer
receivables.
Stage 3
Greater than 61 days
past due
When the Consumer receivable is greater than 61 days past due,
there is considered to be objective evidence of impairment.
Ageing greater than 61 days is considered to have an adverse
impact on the estimated future cash ﬂows of the Consumer
receivable.
Receivables are written off when the Group has no reasonable expectation of recovery. Prior
period receivable balances are either fully written off or collected during the current ﬁnancial year.
Any subsequent recoveries following write off are credited to Receivables impairment expenses
within the Consolidated Statement of Comprehensive Income in the period in which they were
recovered.
Stage 1
Stage 2
Stage 3
Total
As at 30 June 2021 1
$'000
$'000
$'000
$'000
Consumer receivables - face value2
1,447,729
81,579
26,466
1,555,774
Provision for expected credit losses
(16,365)
(57,749)
(25,491)
(99,605)
Net consumer receivables
1,431,364
23,830
975
1,456,169
Stage 1
Stage 2
Stage 3
Total
As at 30 June 2020 1
$'000
$'000
$'000
$'000
Consumer receivables - face value2
783,679
25,007
8,126
816,812
Provision for expected credit losses
(11,473)
(14,910)
(7,568)
(33,951)
Net consumer receivables
772,206
10,097
558
782,861
1.
The simpliﬁed approach prescribed in AASB 9 is used for Trade receivables, therefore the related provision for expected credit losses
is excluded from the ECL staging table for both 2021 and 2020. While the general approach is used for other receivables, staging has
not been provided as all balances that are at risk of non-recovery have been written off. The provision for expected credit losses
related to Trade and other receivables was $0.3 million (2020: nil).
2.
ECL for Consumer receivables is calculated on the Consumer receivables – face value.
As the Group’s receivables are short-term in nature, the staging transfer disclosures have not been
provided.
101

9. Other ﬁnancial assets
2021
2020
As at 30 June
$'000
$'000
Restricted cash
13,808
1,536
Short-term deposits
16,101
3,448
Other
96
6,569
Total other ﬁnancial assets
30,005
11,553
Total Current
26,788
10,660
Total Non-Current
3,217
893
Total other ﬁnancial assets
30,005
11,553
Restricted cash are cash assets held with banks and other ﬁnancial service providers as collateral for
daily cash settlements with merchants and payments to funding providers. Refer to Note 15 for further
information on the Group’s receivables warehouse facilities. Short-term deposits are cash assets held
with banks as collateral for bank guarantees (see Note 24) and as part of the Group’s normal business
operations.
10. Property, plant and equipment
The net book value of property, plant and equipment of $8.1 million (2020: $5.1 million) primarily
includes computer equipment, furniture ﬁttings and leasehold improvements. During the period, the
Group purchased property, plant and equipment of $5.7 million (2020: $3.4 million), acquired $0.2
million via business combinations (note 18) (2020: nil), disposed of $0.1 million (2020: $nil million) and
recognised depreciation of $2.8 million (2020: $2.2 million) in the Consolidated Statement of
Comprehensive Income.
Signiﬁcant accounting policies
Property, plant and equipment is stated at historical cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is calculated on the straight-line basis over the estimated useful life of the speciﬁc
assets of 3 - 5 years.
102

11. Right-of-use assets
Commercial property
leases
Other
Total
$'000
$'000
$'000
Cost
At 1 July 2019
8,614
-
8,614
Additions
4,480
-
4,480
Modiﬁcations
(749)
-
(749)
Cessations
(1,255)
-
(1,255)
At 30 June 2020
11,090
-
11,090
Additions
32,946
-
32,946
Additions through business combinations
716
77
793
Modiﬁcations
(218)
-
(218)
Cessations
(3,010)
-
(3,010)
Foreign exchange movement
172
1
173
At 30 June 2021
41,696
78
41,774
Accumulated depreciation
At 1 July 2019
-
-
-
Depreciation
(5,338)
-
(5,338)
Disposals
1,247
-
1,247
At 30 June 2020
(4,091)
-
(4,091)
Depreciation
(6,741)
(10)
(6,751)
Cessations
3,010
-
3,010
Foreign exchange movement
16
-
16
At 30 June 2021
(7,806)
(10)
(7,816)
Net book value
At 30 June 2020
6,999
-
6,999
At 30 June 2021
33,890
68
33,958
Signiﬁcant accounting policies
Leases are recognised as a right-of-use asset and a corresponding liability in the Consolidated
Statement of Financial Position at the date at which the leased asset is available for use by the
Group.
Right-of-use assets are measured at cost comprising the following:
●
the amount of the initial measurement of lease liability (see Note 14);
●
any lease payments made at or before the commencement date less any lease incentives
received; and
●
any initial direct costs.
Depreciation is calculated on the straight-line basis over the shorter of the asset’s useful life and the
lease term. Rental contracts are typically made for ﬁxed periods between one and ﬁve years but may
include extension options.
103

12. Intangible assets
Core
Technology
Customer
Contracts and
Relationships
Other
Intangibles
Goodwill
Total
$'000
$'000
$'000
$'000
$'000
Cost
At 1 July 2019
68,868
14,104
4,814
39,807
127,593
Additions - internally generated
38,884
-
228
-
39,112
Other additions
-
-
834
-
834
At 30 June 2020
107,752
14,104
5,876
39,807
167,539
Additions - internally generated
60,342
-
-
-
60,342
Other additions
4,544
-
1,140
-
5,684
Acquisition of a subsidiary
6,566
2,862
4,726
75,917
90,071
Impairment
(678)
(250)
(111)
(4,325)
(5,364)
Disposals
(8,546)
-
(296)
-
(8,842)
Foreign exchange
(1,458)
-
-
897
(561)
At 30 June 2021
168,522
16,716
11,335
112,296
308,869
Amortisation
At 1 July 2019
(27,150)
(8,932)
(2,439)
-
(38,521)
Amortisation
(19,029)
(2,591)
(809)
-
(22,429)
At 30 June 2020
(46,179)
(11,523)
(3,248)
-
(60,950)
Amortisation
(25,308)
(2,969)
(1,120)
-
(29,397)
Disposals
8,546
-
296
-
8,842
Foreign exchange
151
-
(2)
-
149
At 30 June 2021
(62,790)
(14,492)
(4,074)
-
(81,356)
Net book value
At 30 June 2020
61,573
2,581
2,628
39,807
106,589
At 30 June 2021
105,732
2,224
7,261
112,296
227,513
Signiﬁcant accounting judgements, estimates and assumptions
Goodwill is tested for impairment at least annually. The impairment assessment requires
management judgement with respect to determining the recoverable amount of the cash
generating unit (CGU) using a discounted cash ﬂow methodology. This calculation uses cash ﬂow
projections based on operating budgets and strategic business plans, after which a terminal value is
applied, based on management’s view of the expected long-term growth proﬁle of the business. The
determination of cash ﬂows over the life of an asset requires management judgement in assessing
the future number of merchant acquisitions, customer usage, potential price changes as well as any
changes to the costs of the product and of other operating costs incurred by the Group. The implied
pre-tax discount rate is calculated with reference to long-term government bond rates, external
analyst views and the Group’s pre-tax cost of debt and equity.
104

Signiﬁcant accounting policies
Goodwill
On acquisition, goodwill is initially measured as the excess of the purchase consideration of the
acquired business over the fair value of the identiﬁable net assets.
Goodwill is allocated to each of the cash generating units expected to beneﬁt from the business
combination. Goodwill has an indeﬁnite useful life and is not amortised but is measured at cost less
any accumulated impairment losses. Goodwill is tested for impairment at least annually.
Intangible assets (excluding Goodwill)
Intangible assets, including Core technology, Customer contracts and Relationships and Other
intangible assets are recognised when control of the asset is obtained and measured at cost on
initial recognition. Intangible assets acquired as a result of a business combination are measured at
fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less accumulated amortisation and any accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and
the related expenditure is reﬂected in the Consolidated Statement of Comprehensive Income in the
period in which the expenditure is incurred.
Where costs are incurred that do not result in the creation of a resource which is identiﬁable and
where the Group does not have the power to obtain the future economic beneﬁts ﬂowing from the
underlying resource and to restrict the access of others to those beneﬁts, these costs are recognised
as an expense in the Consolidated Statement of Comprehensive Income in the period in which the
expenditure is incurred.
Core technology
Core technology includes internally generated software being developed as research and
development projects. Research costs are expensed as incurred. Development expenditures on an
individual project are recognised as an intangible asset when the Group can demonstrate:
●
the technical feasibility of completing the intangible asset so that the asset will be available for
use or sale;
●
its intention to complete, and its ability to use or sell the asset;
●
how the asset will generate future economic beneﬁts;
●
the ability to reliably measure the expenditure during development; and
●
the ability to use the intangible asset generated.
Following initial recognition of the development expenditure as an asset, the asset is carried at cost
less accumulated amortisation and any accumulated impairment losses. Amortisation of the asset
begins when development is complete, and the asset is available for use. It is amortised over the
period of expected future beneﬁt.
A summary of the policies applied to the Group’s Intangible assets (excluding Goodwill) is as follows:
Core technology
Customer
Contracts and
Relationships
Other intangibles
Internally Generated/ Acquired
Internally generated
and acquired
Acquired
Acquired
Useful Lives
Finite: 3 - 5 years
Finite: 3 - 5 years
Finite: 2 - 7 years
Amortisation Method Used
Amortisation method is reviewed at every reporting period.
Reviewed annually for indicators of impairment.
105

Impairment tests for Intangible assets, including Goodwill
The Group initially considers the relationship between its market capitalisation and its book value,
among other factors speciﬁc to each cash generating unit (CGU), when reviewing for indicators of
impairment.
As the Group continues to acquire operations and reorganise the way operations are managed,
reporting structures may change giving rise to a reassessment of CGUs and/or the allocation of
goodwill to those CGUs.
For the purpose of the impairment test, goodwill is allocated to CGUs. The carrying amount of each
CGU is compared to its recoverable amount. In assessing for impairment, the Group’s assets are
grouped at the lowest level of separately identiﬁable cash inﬂows, which are largely independent of
the cash ﬂows from other assets or CGUs. Assets apart from goodwill that have previously recognised
impairment in the past are reviewed for possible reversal at the end of each reporting period.
The Group’s impairment tests during the year ended 30 June 2021 resulted in the identiﬁcation of
impairment of the goodwill associated with the Afterpay Asia and PayNow CGUs. At 30 June 2021, the
market capitalisation of the Group was signiﬁcantly greater than the Group’s equity book value,
supporting no further impairment of goodwill or other assets of the CGUs.
A summary of the goodwill allocation and impairment testing assumptions are presented below:
Afterpay
AU
Afterpay
Asia
Clearpay
UK
Clearpay
EU
Pay Now
Total
Note
$'000
$'000
$'000
$'000
$'000
$'000
Goodwill allocation
At 1 July 2020
21,220
-
16,232
-
2,355
39,807
Additions - business combinations
18
-
1,970
-
73,947
-
75,917
Impairment
-
(1,970)
-
-
(2,355)
(4,325)
Foreign exchange
-
-
-
897
-
897
At 30 June 2021
21,220
-
16,232
74,844
-
112,296
Risk weighted pre-tax discount rate
8.4%
n/a
10.3%
n/a
n/a
n/a
Risk adjusted growth rate
2%
n/a
n/a
n/a
n/a
n/a
Revenue exit multiple
n/a
n/a
35.4x
n/a
n/a
n/a
The Group has performed a detailed sensitivity analysis as part of its impairment testing to ensure that
the results of its testing are reasonable.
Afterpay AU
The recoverable amount has been determined based on a value-in-use calculation using ﬁve-year
pre-tax cash ﬂow projections. The pre-tax cash ﬂow projections are based on the Group’s expectations
of growth, excluding the impact of possible future acquisitions, business improvement and
restructuring. The discount rate would need to increase by approximately 3,300 basis points before the
recoverable amount would equal its carrying value.
Afterpay Asia
The recoverable amount has been determined based on a value-in-use calculation. When Afterpay
acquired EmpatKali in August 2020 (see Note 18 for details), EmpatKali had not yet received the
Indonesian Business License (the License) required to operate as an Information Technology Based
Peer-to-Peer Lending Services Provider in Indonesia. In May 2021, the Indonesian Financial Services
Authority advised that the License would not be granted. Without this License, EmpatKali is unable to
provide payment instalment services in Indonesia, and thus revenue forecasts do not support the
carrying value of the goodwill balance. An impairment expense of $2.0 million has been recorded in the
Consolidated Statement of Comprehensive Income (see Note 4).
106

Clearpay UK
The recoverable amount has been determined based on a fair value less costs of disposal calculation
using a number of inputs including cash ﬂow projections based on ﬁve years of ﬁnancial forecasts
approved by senior management. The valuation is measured using inputs that are not based on
observable market data. Therefore, they are considered to be level 3 within the fair value hierarchy as
per AASB 13 Fair Value Measurement. Further details on the valuation, including the sensitivity to the
most signiﬁcant inputs are included in Note 16.
Pay Now
During the period, the Pay Now revenue forecasts were updated from those used in the VIU calculation
at 30 June 2020. This was considered an indicator of impairment and a detailed impairment
assessment was performed. Other than the future revenue projections and associated costs, there were
no changes to the key assumptions used in the VIU calculation from those at 30 June 2020.
The assessment indicated an impairment of $2.4 million which has been recorded in the Consolidated
Statement of Comprehensive Income (see Note 4).
107

Capital structure, ﬁnancing
& risk management
13. Equity
Issued Capital
2021
2020
As at 30 June
$'000
$'000
Issued and fully paid
2,204,450
975,317
Movement in ordinary shares on issue
Note
No.'000
$'000
At 1 July 2019
251,492
674,769
Shares issued
8,453
233,012
Share options and loan shares exercised
7,680
69,318
Capital raising costs (net of tax)
-
(1,782)
At 30 June 2020 1
267,625
975,317
Shares issued
11,919
786,167
Share options, RSUs and loan shares exercised
6,271
51,617
Issue of ordinary shares, as consideration for a business
combination
23
1,737
FY21 US ESOP Modiﬁcation
22
3,493
401,353
Capital raising costs (net of tax)
-
(11,741)
At 30 June 2021 1
289,331
2,204,450
1.
The total number of ordinary shares on issue excludes 0.3 million loan shares (2020: 0.4 million).
During the ﬁnancial year ended 30 June 2021, the Group raised capital totalling $786.2 million. This
comprised:
●
$650.0 million Institutional Placement
●
$136.2 million Share Purchase Plan (SPP).
For the ﬁnancial year ended 30 June 2020, the Group raised capital totalling $233.0 million. This
comprised:
●
$200.0 million Institutional Placement completed on 27 November 2019; and
●
$33.0 million Share Purchase Plan (SPP) completed on 10 February 2020.
108

Other reserves
2021
2020
As at 30 June
Note
$'000
$'000
Share-based payments reserve
(764,716)
78,475
Convertible debt option reserve
161,099
-
Other
(1,039)
(1,039)
Total other reserves
(604,656)
77,436
Signiﬁcant accounting policies
Ordinary shares are classiﬁed as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds raised via the
issue of new shares.
Information relating to employee options, including details of options issued, exercised and lapsed
during the ﬁnancial year and options outstanding at the end of the reporting period, is included in
Note 22.
Information relating to the Convertible debt option reserve is included in Note 15.
109

14. Lease liabilities
2021
2020
As at 30 June
$'000
$'000
Commercial property leases
34,133
7,445
Other
67
-
Total lease liabilities
34,200
7,445
Total Current
2,201
4,278
Total Non-Current
31,999
3,167
Total lease liabilities
34,200
7,445
The Group leases various ofﬁces across Australia, New Zealand, Asia, Europe, the United Kingdom and
the United States. Rental contracts are typically made for ﬁxed periods of one to ﬁve years. The Group
has several lease contracts that include extension options where the exercise is at the Group’s
discretion. These options are negotiated by management to provide ﬂexibility in managing the Group’s
leasing portfolio and align with the Group’s business needs. Gross lease extensions, for which the Group
is not reasonably certain of exercise and has not been included in lease liabilities, total $13.5 million. This
relates to extension options beyond 2026.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and
conditions.
Signiﬁcant accounting policies
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease. The
determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulﬁlment of the arrangement is
dependent on the use of the speciﬁc asset and whether the arrangement conveys a right to use the
asset.
Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
●
ﬁxed payments (including in-substance ﬁxed payments), less any lease incentives receivable;
●
variable lease payment that are based on an index or a rate;
●
amounts expected to be payable by the lessee under residual value guarantees;
●
the lease component of contracts that include non-lease components and other services, within
the lease liability;
●
the extension option if the lessee is reasonably certain to exercise that option; and
●
payments of penalties for terminating the lease, if the lease term reﬂects the lessee exercising
that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would
have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions. Refer to Note 17(d) for maturity of future lease
payments.
Each lease payment is allocated between the liability and ﬁnance cost. The ﬁnance cost is charged to
proﬁt or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Payments associated with short-term leases, leases of low-value assets and variable leases are
recognised as operating expenses as incurred. Short-term leases are leases with a lease term of less
than 12 months. Low-value assets comprise point of sale equipment (terminals) and small items of
ofﬁce furniture.
110

15. Borrowings
2021
2020
As at 30 June
$'000
$'000
Secured interest bearing borrowings
33,330
461,444
Matrix Convertible Notes
99
156
APT Convertible Notes
1,252,954
-
Total borrowings
1,286,383
461,600
Total Current
-
-
Total Non-Current
1,286,383
461,600
Total borrowings
1,286,383
461,600
Borrowings are classiﬁed as non-current when there is no obligation or expectation at 30 June that the
liability will be settled within the next 12 months at the reporting date.
Secured interest bearing borrowings
The Group has several warehousing facilities that are secured against the respective receivables, which
are transferred into the facilities.
30 June 2021
Facility
Carrying value of
receivable
$’000
Provider
Maturity date
Weighted
average
interest rate
Facility Limit
$’000
Facility drawn
$’000
Afterpay AU
595,912
NAB
Dec 2023
0.09%
300,000
-
Citi
Dec 2023
200,000
-
Afterpay US
664,154
Citi
May 2024
1.69%
266,454
-
Goldman
Sachs
Dec 2022
266,454
-
Afterpay NZ
66,816
BNZ
Jun 2023
1.64%
93,119
32,591
Clearpay UK
114,830
NAB
Feb 2023
nil
92,166
-
Citi
Feb 2023
230,415
-
Total
1,448,606
32,591
Accrued interest
949
Capitalised borrowing costs
(210)
Total Secured interest bearing borrowings
33,330
111

30 June 2020
Facility
Carrying value of
receivable
$’000
Provider
Maturity date
Weighted
average interest
rate
Facility Limit
$’000
Facility
drawn
$’000
Afterpay AU
368,028
NAB
Dec 2022
2.20%
300,000
79,973
Citi
Dec 2022
200,000
75,000
Afterpay US
329,889
Citi
May 2022
3.20%
291,418
5,872
Goldman
Sachs
Dec 2021
291,418
281,218
Afterpay NZ
35,390
BNZ
Mar 2022
1.65%
46,716
23,358
Total
1,129,552
465,421
Accrued interest
962
Capitalised borrowing costs
(4,939)
Total Secured interest bearing borrowings
461,444
Matrix Convertible Notes
On 19 January 2018, Afterpay US, Inc. issued two convertible notes to Matrix Partners X L.P and Weston &
Co X LLC (Matrix Convertible Notes). The Matrix Convertible Notes have a carrying value of US$0.1 million
(2020: US$0.1 million), carry a ﬁxed interest rate of 6.0% for a seven year maximum term and may be
converted into APT shares in certain circumstances (subject to a cap) between ﬁve and seven years
from the date of issue of the notes (being 19 January 2018), with conversion at the noteholder’s election.
Further detail in respect of the Matrix Convertible Notes, including the conversion mechanism and
maximum dilution impact, is outlined in Note 6.
APT Convertible Notes
On 12 March 2021, Afterpay Limited completed the settlement of $1,500 million zero coupon convertible
notes (APT Convertible Notes). The APT Convertible Notes are interest free and have a maximum term
of ﬁve years. They may be converted into APT shares in certain circumstances (subject to a cap) before
the maturity date of 12 March 2026, with conversion at the noteholder’s election. The conversion price is
$194.8220.
The APT Convertible Notes are presented in the Consolidated statement of ﬁnancial position as follows:
2021
As at 30 June
$'000
Face value of APT Convertible Notes issued
1,500,000
Value of conversion rights recognised in equity
(236,863)
Capitalised borrowing costs
(23,336)
Finance cost1
13,153
APT Convertible Notes
1,252,954
1.
Finance cost is calculated by applying the effective interest rate of 3.83% per annum to the liability component. The increase in the
liability due to passage of time over the term of the APT Convertible Notes is recognised as a ﬁnance cost in the Consolidated
Statement of Comprehensive Income.
Further detail in respect of the APT Convertible Notes, including the conversion mechanism and
maximum dilution impact, is outlined in Note 6.
112

Signiﬁcant accounting policies
The component of convertible notes that exhibits characteristics of a liability is recognised as a
liability in the balance sheet, net of transaction costs. On issuance of convertible notes, the fair value
of the liability component is determined using a market rate for an equivalent non-convertible note;
and this amount is carried as a long term liability on the amortised cost basis until extinguished on
conversion or redemption. The remainder of the proceeds are allocated to the conversion rights that
is recognised and included in shareholders’ equity, net of transaction costs. The carrying amount of
the conversion option is not re-measured in subsequent years. Transaction costs are apportioned
between the liability and equity components of the convertible notes based on the allocation of
proceeds to the liability and equity components when the instruments are ﬁrst recognised.
16. Other ﬁnancial liabilities
2021
2020
As at 30 June
$'000
$'000
Clearpay Put Option
99,873
3,038
Pagantis Contingent Consideration
6,398
-
Pagantis Deferred Consideration
60,377
-
Total other ﬁnancial liabilities
166,648
3,038
Total Current
-
-
Total Non-Current
166,648
3,038
Total other ﬁnancial liabilities
166,648
3,038
Clearpay Put Option
As outlined in Note 6, the Group has a call option to acquire the remaining Clearpay Finance Limited
(Clearpay) shares held by ThinkSmart Limited (ThinkSmart), which is exercisable any time after 5 years
from the date of completion of the acquisition of 90% of Clearpay (being 23 August 2018). If the Group
does not exercise its call option within that period, then ThinkSmart has a put option to sell the
remaining shares it holds in Clearpay to the Group, exercisable any time after 5.5 years from the above
mentioned date of completion (Clearpay Put Option).
Pagantis Contingent Consideration
As outlined in Note 6 and Note 18, the consideration for Pagantis includes an earn-out style contingent
consideration arrangement (the Pagantis Contingent Consideration) payable via the Pagantis
Convertible Note, 3 to 3.5 years post completion.
The value of the Pagantis Contingent Consideration is determined with reference to the equity value of
Pagantis three years post completion (the Equity Value). If the Equity Value exceeds €45 million
(subject to certain adjustments), the Pagantis Contingent Consideration is equal to:
●
50% of the Equity Value above €45 million (subject to certain adjustments), up to €100 million, plus
●
40% of the Equity Value above €100 million, up to €150 million, plus
●
10% of the Equity Value above €150 million.
113

Signiﬁcant accounting judgements, estimates and assumptions
The Clearpay Put Option and Pagantis Contingent Consideration are recorded at fair value and the
valuation is re-assessed at each reporting period.
The valuations are conducted by a reputable, licensed and qualiﬁed independent valuer using the
valuation principles outlined in the relevant Share Purchase Agreements and use cash ﬂow
projections based on operating budgets which reﬂect management’s view of the expected
long-term growth proﬁle of the businesses.
The determination of cash ﬂows over the life of a business requires management judgement in
assessing the future number of merchant acquisitions, customer usage, potential price changes as
well as any changes to the costs of the product and of other operating costs incurred by the
business.
The valuations are then derived by discounting the cash ﬂow projections to present value using
discount rates that reﬂect current market conditions, external analyst views, industry benchmarks,
and, where available, the underlying businesses cost of debt and/or equity.
Because the valuations are determined using cash ﬂow inputs that are not based on observable
market data, they are considered to be level 3 within the fair value hierarchy as per AASB 13 Fair
Value Measurement (see Note 17)
The most signiﬁcant inputs into the valuation are as follows:
As at 30 June
Clearpay Put Option
Pagantis Contingent
Consideration
Discount rate
10.25%
18.30%
Revenue exit multiple
35.4x
n/a
Volatility
n/a
60%
Changes in these inputs would result in the following increase/(decrease) in the fair value of the
recognised liability (all other variables being held constant):
Fair value of liability
(Higher)/Lower
Loss for the year
Higher/(Lower)
2021
2020
2021
2020
Judgements of reasonable possible movements:
$'000
$'000
$'000
$'000
-1.0% Discount rate (2020: -2.5%)
(19,242)
(250)
19,242
250
+1.0% Discount rate (2020: +2.5%)
14,724
235
(14,724)
(235)
-1.0x Revenue exit multiple (2020: -0.1x)
22,376
677
(22,376)
(677)
+1.0x Revenue exit multiple (2020: +0.1x)
(22,376)
(677)
22,376
677
-10% Volatility
626
n/a
(626)
n/a
+10% Volatility
(424)
n/a
424
n/a
114

Reconciliation of liabilities arising from ﬁnancing activities
Cash movements
Non-cash movements
Opening
balance
Cash ﬂows 2
Interest and
amortisation
Other 1
Fair value
gain or loss
Closing
balance
2021
Note
$'000
$'000
$'000
$'000
$'000
$'000
Secured interest bearing
borrowings 3
15
461,444
(447,708)
19,019
575
-
33,330
Matrix Convertible Notes
15
156
(377,647)
29
377,561
-
99
APT Convertible Notes
15
-
1,475,438
14,379
(236,863)
-
1,252,954
Total borrowings
461,600
650,083
33,427
141,273
-
1,286,383
Lease liabilities 4
14
7,445
(6,209)
343
32,621
-
34,200
Other ﬁnancial liabilities
16
3,038
-
-
66,775
96,835
166,648
Total liabilities arising from
ﬁnancing activities
472,083
643,874
33,770
240,669
96,835
1,487,231
Cash movements
Non-cash movements
Opening
balance
Cash ﬂows 2
Interest and
amortisation
Other 1
Fair value
gain or loss
Closing
balance
2020
Note
$'000
$'000
$'000
$'000
$'000
$'000
Secured interest bearing
borrowings 3
15
-
449,638
5,567
6,239
-
461,444
Senior unsecured notes
49,737
(50,000)
263
-
-
-
Matrix Convertible Notes
15
144
-
12
-
-
156
Total borrowings
49,881
399,638
5,842
6,239
-
461,600
Lease liabilities 4
14
342
(4,867)
-
11,970
-
7,445
Other ﬁnancial liabilities
16
1,039
-
-
-
1,999
3,038
Total liabilities arising from
ﬁnancing activities
51,262
394,771
5,842
18,209
1,999
472,083
1.
Includes movements recorded directly in equity, new or modiﬁed lease arrangements, liabilities recognised as a result of business
combinations (Note 18), foreign exchange movements and other non-cash movements.
2.
Movements include the net cash inﬂows (e.g. drawdowns) and outﬂows (e.g. repayments and interest payments).
3.
Other includes foreign exchange movement of $0.6 million (2020: $6.2 million).
4.
Other includes foreign exchange movement of $0.2 million (2020: $0.0 million) and additions via acquisitions of $0.8 million (2020:
nil). Remaining relates to new or modiﬁed lease arrangements.
115

17. Financial risk management objectives and policies
The Group’s activities expose it to certain ﬁnancial risks. The Group manages its exposure to key
ﬁnancial risks, including interest rate, foreign currency, credit and liquidity risk in accordance with the
Group's ﬁnancial risk management policy; the objective of which is to support the delivery of the
Group's ﬁnancial targets, while protecting future ﬁnancial security. The ﬁnancial risk management
policy is reviewed and approved by the Board on an annual basis to ensure that risk mitigations are still
ﬁt for purpose. These mitigations include monitoring levels of exposure to interest rate and foreign
exchange risk and assessments of market forecasts for interest rate and foreign exchange, and by
depositing funds with several different banking institutions. Ageing analysis and monitoring of speciﬁc
credit allowances are undertaken to manage credit risk. Liquidity risk is monitored through the
development of future rolling cash ﬂow forecasts.
The Group’s principal ﬁnancial instruments comprise cash and cash equivalents, receivables, other
ﬁnancial assets, trade and other payables, other ﬁnancial liabilities and borrowings.
(a)
Interest rate risk
The Group’s exposure to market interest rates relate primarily to the Group’s Cash and cash equivalents
and Secured interest bearing borrowings. There are no other ﬁnancial liabilities subject to interest rate
risk. The Group had the following mix of ﬁnancial assets and liabilities exposed to variable interest rate
risk:
2021
2020
As at 30 June
Note
$'000
$'000
Financial Assets
Cash and cash equivalents
7
1,147,147
606,041
Other ﬁnancial assets
3,222
2,693
Total ﬁnancial assets
1,150,369
608,734
Financial Liabilities
Secured interest bearing borrowings
15
(33,330)
(461,444)
Total ﬁnancial liabilities
(33,330)
(461,444)
Net Exposure
1,117,039
147,290
The following sensitivity analysis is based on the interest rate risk exposures in existence at the
reporting date. At the reporting date, if interest rates had moved, as illustrated in the table below, with
all other variables held constant, loss after tax and equity would have been affected as follows:
Loss after tax
Equity
(Higher)/Lower
(Higher)/Lower
2021
2020
2021
2020
Judgements of reasonably possible
movements:
$'000
$'000
$'000
$'000
-0.25% (25 basis points)
(1,955)
(258)
1,955
258
+1.00% (100 basis points)
7,819
1,031
(7,819)
(1,031)
The Group’s receivables warehouse funding facilities are on a variable rate (30 day) basis. This aligns
closely to the weighted average life of the Afterpay consumer receivables they ﬁnance. The Matrix
Convertible Notes are on a ﬁxed interest rate basis. The APT Convertible Notes are interest-free. The
ﬁnancial liabilities, as disclosed in Note 16, are not exposed to interest rate risks. The Group is not
exposed to signiﬁcant interest rate risk and has not hedged any interest rate risk during the year or at
30 June 2021.
116

(b)
Foreign currency risk
Fluctuations in foreign exchange rates may impact the Group’s results. The Group’s Consolidated
Statement of Financial Position can be affected by movements in the US Dollar, New Zealand Dollar,
Great British Pound, Euro and Canadian Dollar.
The following sensitivity analysis is based on the foreign currency risk exposures in existence at the
reporting date.
At 30 June, if exchange rates had moved, as illustrated in the table below, with all other variables held
constant, loss after tax and equity would have been affected as follows:
Loss after tax
Equity
(Higher)/Lower
Higher/(Lower)
2021
2020
2021
2020
Judgements of reasonably possible
movements:
$'000
$'000
$'000
$'000
AUD/NZD +10%
(3,337)
(1,492)
3,337
1,492
AUD/NZD -5%
1,932
864
(1,932)
(864)
AUD/USD +10%
(52,834)
(9,277)
52,834
9,277
AUD/USD -5%
30,588
5,371
(30,588)
(5,371)
AUD/GBP +10%
(10,374)
(3,930)
10,374
3,930
AUD/GBP -5%
6,006
2,275
(6,006)
(2,275)
AUD/EUR +10%
2,994
-
(2,994)
-
AUD/EUR -5%
(1,733)
-
1,733
-
AUD/CAD +10%
(2,841)
15
2,841
(15)
AUD/CAD -5%
1,645
(9)
(1,645)
9
AUD/Other +10%
(23)
-
23
-
AUD/Other -5%
13
-
(13)
-
The Group has not hedged any material foreign currency risk during the year or at 30 June 2021.
(c)
Credit risk
Credit risk arises from the ﬁnancial assets of the Group. The Group’s exposure to credit risk arises from
potential default of the Consumer receivables, with a maximum exposure equal to the carrying amount
of these instruments.
The Group utilises its proprietary fraud engine and risk decisioning rules to mitigate credit risk for its
Consumer receivables. The Group regularly reviews the adequacy of the provision for expected credit
losses to ensure that it is sufﬁcient to mitigate credit risk exposure in terms of ﬁnancial reporting. The
provision for doubtful debts represents management’s best estimate at the reporting date of the
expected credit losses based on their experienced judgement. Further details have been provided in
Note 8.
Credit risk also arises from cash held with banks and ﬁnancial institutions, and from the investment of
ﬁnancial assets when they are available with designated counterparties. The Group’s bank and ﬁnancial
institution counterparties maintain high long-term credit ratings across both Moody’s and S&P.
117

(d)
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and ﬂexibility through the
use of credit facilities. The Group mitigates funding and liquidity risks by ensuring it has:
●
sufﬁcient funds on hand to meet its working capital and investment objectives;
●
is focused on improving operational cash ﬂow; and
●
adequate ﬂexibility in ﬁnancing facilities to balance the growth objectives with short-term and
long-term liquidity requirements.
The Group’s receivables warehouse funding facilities all have maturity dates greater than 12 months
after balance date as per below.
Maturity analysis of ﬁnancial assets and liabilities
The table below reﬂects all contractually ﬁxed payments and receivables for settlement, repayments
and interest resulting from recognised ﬁnancial assets and liabilities.
< 1 year
1-2 years
2-3 years
> 3 years
Total
As at 30 June 2021
$'000
$'000
$'000
$'000
$'000
Financial assets
Cash and cash equivalents
1,147,147
-
-
-
1,147,147
Receivables
1,576,064
-
-
-
1,576,064
Other ﬁnancial assets
26,788
3,217
-
-
30,005
Total ﬁnancial assets
2,749,999
3,217
-
-
2,753,216
Financial liabilities
Trade and other payables
306,259
-
-
-
306,259
Secured interest bearing borrowings
1,483
33,125
-
-
34,608
Matrix Convertible Notes
-
-
99
-
99
APT Convertible Notes
-
-
-
1,500,000
1,500,000
Financial liabilities
-
-
166,648
-
166,648
Lease liabilities
2,206
10,009
9,561
13,450
35,226
Total ﬁnancial liabilities
309,948
43,134
176,308
1,513,450
2,042,840
Net maturity
2,440,051
(39,917)
(176,308)
(1,513,450)
710,376
118

< 1 year
1-2 years
2-3 years
> 3 years
Total
As at 30 June 2020
$'000
$'000
$'000
$'000
$'000
Financial assets
Cash and cash equivalents
606,041
-
-
-
606,041
Receivables
832,524
-
-
-
832,524
Other ﬁnancial assets
10,660
893
-
-
11,553
Total ﬁnancial assets
1,449,225
893
-
-
1,450,118
Financial liabilities
Trade and other payables
182,613
-
-
-
182,613
Secured interest bearing borrowings
6,499
316,947
157,705
-
481,151
Matrix Convertible Notes
-
-
-
207
207
Financial liabilities
-
-
-
3,038
3,038
Lease liabilities
4,517
1,774
1,003
573
7,867
Total ﬁnancial liabilities
193,629
318,721
158,708
3,818
674,876
Net maturity
1,255,596
(317,828)
(158,708)
(3,818)
775,242
The fair value of the APT Convertible Notes on 30 June 2021 was $1,148.0 million (2020: n/a). The carrying
value of all other ﬁnancial assets and liabilities approximates their fair value.
Capital management
The Group reviews its capital management position on a regular basis to ensure that it maintains
adequate funding for near-term and medium-term obligations.
In particular, the Group periodically reviews its capital management strategy to ensure that funding
initiatives are in place to support medium-term growth objectives and other working capital
requirements.
During the year, the Group:
●
raised capital totalling $786.2 million (2020: $233.0 million) (Note 13)
●
raised $1,500.0 million via the APT Convertible Notes (Note 15).
As detailed in Note 15, the Group has receivable warehouse funding facilities in Australia, New Zealand,
the United States and the United Kingdom. The receivables warehouse funding facilities contain
portfolio parameters. The Group satisﬁed the portfolio parameters during the ﬁnancial year ended and
at 30 June 2021.
The Group’s cash and net debt position as at the end of the reporting period is as follows:
2021
2020
As at 30 June
Note
$'000
$'000
Cash and cash equivalents
1,147,147
606,041
Restricted cash
13,808
1,536
Borrowings
(1,286,383)
(461,600)
Net (debt)/cash
(125,428)
145,977
119

Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the ﬁnancial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
signiﬁcant to the fair value measurement as a whole:
●
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
●
Level 2 — Valuation techniques for which the lowest level input that is signiﬁcant to the fair value
measurement is directly or indirectly observable; and
●
Level 3 — Valuation techniques for which the lowest level input that is signiﬁcant to the fair value
measurement is unobservable.
The following table summarises the levels of the fair value hierarchy for ﬁnancial liabilities held at fair
value:
Level 1
Level 2
Level 3
Total
As at 30 June 2021
$'000
$'000
$'000
$'000
Clearpay Put Option (Note 16)
-
-
99,873
99,873
Pagantis Contingent Consideration (Note 16)
-
-
6,398
6,398
Total ﬁnancial liabilities
-
-
106,271
106,271
Level 1
Level 2
Level 3
Total
As at 30 June 2020
$'000
$'000
$'000
$'000
Clearpay Put Option (Note 16)
-
-
3,038
3,038
Total ﬁnancial liabilities
-
-
3,038
3,038
The movements in Level 3 ﬁnancial liabilities measured at fair value is as follows:
2021
2020
Year ended 30 June
Note
$'000
$'000
Opening balance
3,038
1,039
Additions
6,317
-
Net loss on ﬁnancial liabilities at fair value recognised in the
Consolidated Statement of Comprehensive Income
96,835
1,999
Foreign exchange loss
81
-
Closing balance
106,271
3,038
Details of the key inputs included in the valuations of these level 3 ﬁnancial liabilities, as well as the
sensitivities of these inputs, are included in Note 16.
120

Group structure
18. Business combinations
Pagantis
On 9 March 2021 (the Pagantis Completion Date), the Group acquired 100% of the issued shares and
voting rights in Pagantis SAU and PMT Technology SLA (collectively, Pagantis) from NBQ Corporate SLU
(NBQ).
The acquisition of Pagantis met the recognition criteria for consolidation from the Pagantis Completion
Date. The ﬁnancial statements for the year ended 30 June 2021 therefore include 100% of the results of
Pagantis for the three-month period from the Pagantis Completion Date.
Pagantis contributed income of $0.5 million and $5.5 million of losses to the Group for the period from 9
March 2021 to 30 June 2021. If the acquisition had taken place on 1 July 2020, Pagantis would have
contributed income of $3.1 million and $17.3 million of losses to the Group. Acquisition-related costs of
approximately $2.5 million were included in operating expenses in the Consolidated Statement of
Comprehensive Income for the year ended 30 June 2021.
The Pagantis acquisition will accelerate the Group’s planned launch into Europe and continues the
preferred model of partnering with a local market presence to de-risk global expansion (consistent with
the Group’s UK expansion strategy). Pagantis provides a range of buy now, pay later and traditional
credit services across Spain, France and Italy, with regulatory approval to also operate in Portugal and a
pending application to passport its payment institution licence into Germany.
NBQ will receive a minimum €50 million in consideration (subject to the acquired net assets and
working capital adjustments), paid or payable as follows:
●
Upfront consideration - €5 million in cash paid at completion;
●
Deferred consideration - €45 million payable in cash, 3 years post completion (Pagantis Deferred
Consideration); and
●
Contingent consideration - if the equity value of Pagantis 3 years post completion exceeds €45
million, any excess is calculated using a sliding scale payable in cash or shares in Afterpay Limited
at Afterpay’s election (Pagantis Contingent Consideration).
Both the deferred consideration and the contingent consideration will be settled 3 to 3.5 years post
completion.
The transaction resulted in the acquisition of provisional net assets with a fair value of $26,000 and
goodwill of $73.9 million (see Note 12). At the Pagantis Completion Date, the goodwill comprised the
value of expected synergies arising from the acquisition, as well as the value attributed to the existing
Pagantis workforce, which was not able to be separately recognised under the criteria established in
AASB 138 Intangible Assets (AASB 138). The goodwill was allocated to the Clearpay EU CGU and is not
deductible for income tax purposes.
121

Details of the purchase consideration and the fair values of the provisional identiﬁable assets and
liabilities of Pagantis as at the Pagantis Completion Date were as follows:
Provisional Fair value
recognised on
acquisition
Note
$'000
Assets
Cash and cash equivalents
3,833
Receivables
10,845
Other current assets
1,120
Intangible assets
12,875
Right-of-use assets
793
Other non-current assets
203
Total assets
29,669
Liabilities
Trade and other payables
(15,014)
Other current liabilities
(1,265)
Lease liabilities
(793)
Deferred tax liabilities
(3,219)
Other non-current liabilities
(9,404)
Net assets acquired at fair value
(26)
Goodwill acquired on acquisition
12
73,947
Total identiﬁable net assets at fair value
73,921
Purchase consideration
Cash consideration paid
7,837
Pagantis Deferred Consideration
59,767
Pagantis Contingent Consideration
16
6,317
Total purchase consideration
73,921
1.
Gross contractual receivables at the Pagantis acquisition date was $11.9 million. A provision for expected credit losses of $1.1 million
reﬂects the best estimate of the contractual cash ﬂows not expected to be collected.
Due to the proximity of the Pagantis Completion Date to the reporting date and the terms of the Sale
and Purchase Agreement, the identiﬁable assets and liabilities are provisional as at 30 June 2021 and
may change if additional assets or liabilities in existence at the Pagantis Completion Date are identiﬁed.
Further details on the settlement of the Pagantis Deferred and Contingent Consideration are included
in Note 6.
122

EmpatKali
On 31 August 2020 (the EmpatKali Completion Date), Afterpay acquired 100% of the shares outstanding
and voting rights in Setelah Bayer Pte Ltd, the Singapore-based holding company for a buy now, pay
later ﬁnancial services business operating in Indonesia through its subsidiary PT EmpatKali Indonesia
(collectively, EmpatKali). Afterpay agreed to pay US$2.0m (subject to acquired assets and working
capital adjustments) to acquire EmpatKali, paid or payable as:
●
23,235 ($1.7 million) APT shares valued using the APT 30-day VWAP share price, paid upon
completion; and
●
US$0.5 million shares valued using the APT 30-day VWAP share price (up to and including the
trading day before the date the Indonesian Business License is received), contingent upon the
Indonesian Business Licence being received and subject to any ﬁnal adjustments to the acquired
net assets.
The acquisition of EmpatKali met the recognition criteria for consolidation from the EmpatKali
Completion Date. The ﬁnancial statements for the year ended 30 June 2021 therefore include the
EmpatKali results from the EmpatKali Completion Date. EmpatKali contributed $2.2 million of losses to
the Group for the period from 31 August 2020 to 30 June 2021. If the acquisition had taken place on 1
July 2020, EmpatKali would have contributed approximately $2.4 million in statutory losses to the
Group’s results.
The transaction resulted in the acquisition of net assets with a fair value of $0.7 million and goodwill of
$2.0 million (see Note 12). At the EmpatKali Completion Date, the goodwill comprised the value of
expected synergies arising from the acquisition, as well as the value attributed to the existing
EmpatKali workforce, which was not able to be separately recognised under the criteria established in
AASB 138. The goodwill was allocated to the Afterpay Asia CGU and was not deductible for income tax
purposes. As a result of not receiving the Indonesian Business License, the goodwill has subsequently
been impaired. See Note 12 for further detail.
Signiﬁcant accounting policies
Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, which is measured at acquisition date
fair value, and the amount of any non-controlling interests in the acquiree. For each business
combination, the Group elects whether to measure the non-controlling interests in the acquiree at
fair value or at the proportionate share of the acquiree’s identiﬁable net assets. Acquisition-related
costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the ﬁnancial assets and liabilities assumed for
appropriate classiﬁcation and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests and any previous interest held
over the net identiﬁable assets acquired and liabilities assumed).
If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the
Group re-assesses whether it has correctly identiﬁed all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the amounts to be recognised at the
acquisition date. If the reassessment still results in an excess of the fair value of the net assets
acquired over the aggregate consideration transferred, the gain is recognised in the Consolidated
Statement of Comprehensive Income.
123

19. Related party disclosure
The ultimate controlling entity is Afterpay Limited, otherwise described as the parent company. The
Consolidated Financial Statements include the ﬁnancial statements of Afterpay Limited and its
subsidiaries. These are listed in the following table:
% Equity interest
Name
Country of
incorporation
30 June 2021
30 June
2020
Afterpay Holdings Pty Ltd 1
Australia
100%
100%
Afterpay Australia Pty Ltd 1
Australia
100%
100%
Afterpay Warehouse Trust
Australia
100%
100%
Afterpay Touch Group Employee Share Plan Trust
Australia
100%
100%
Afterpay NZ Limited
New Zealand
100%
100%
Afterpay NZ Warehouse Trust
New Zealand
100%
100%
Afterpay International Holdings Pty Ltd (formerly Afterpay Touch Group No.2 Pty Ltd) 1
Australia
100%
100%
Afterpay US, Inc. 4
United States
99%
96%
Afterpay Receivables Warehouse-C LLC 2
United States
99%
96%
Afterpay Receivables Warehouse-GS LLC 2
United States
99%
96%
Afterpay US Services, LLC 2
United States
99%
96%
Afterpay Canada Limited
Canada
100%
100%
Setelah Bayar Pte. Ltd 6
Singapore
100%
0%
PT Empat Kali Indonesia 6,7
Indonesia
85%
0%
Clearpay (International) Finance Holding Limited 5
United Kingdom
100%
0%
Clearpay (UK) Finance Services Limited 5
United Kingdom
100%
0%
Clearpay (International) Limited 5
United Kingdom
100%
0%
Clearpay (Europe) Limited 5
United Kingdom
100%
0%
Clearpay Technology, S.L (formerly PMT Technology SLA) 6
Spain
100%
0%
Clearpay, S.A.U (formerly Pagantis SAU) 6
Spain
100%
0%
Clearpay Finance Limited
United Kingdom
90%
90%
Clearpay Receivables Warehouse 2020-1 Limited 3
United Kingdom
90%
90%
Clearpay Receivables Warehouse 2020-2 Limited 3
United Kingdom
90%
90%
Clearpay Finance HCB Limited 3
United Kingdom
90%
90%
Touchcorp Limited 1
Bermuda
100%
100%
Touch Holdings Pty Ltd 1
Australia
100%
100%
Touch Australia Pty Ltd 1
Australia
100%
100%
Afterpay Corporate Services Australia Pty Ltd (formerly known as Touch Networks
Australia Pty Ltd) 1
Australia
100%
100%
Touch Networks Pty Ltd 1
Australia
100%
100%
Afterpay China Holdings Pty Ltd
Australia
100%
100%
Afterpay Information Technology Service (Shanghai) Co., Ltd
China
100%
100%
Afterpay Asia Pte. Ltd (formerly known as Touchcorp Singapore Pte Ltd)
Singapore
100%
100%
1.
Refer to Note 21 for further information on the parties subject to a deed of cross guarantee.
2.
Wholly owned subsidiaries of Afterpay US, Inc.
3.
Wholly owned subsidiary of Clearpay Finance Limited.
4.
The Group’s equity interest in Afterpay US, Inc is approximately 96% due to vested and exercised options under the US ESOP. Refer
to Note 22 for further information.
5.
New legal entity established during the year.
6.
Acquired during the year. Refer to Note 18 for further details.
7.
15% of PT Empat Kali Indonesia’s shares are owned by a local employee, as required by Indonesian Law. There are no voting rights
attached to these shares and PT Empat Kali Indonesia is considered fully controlled by the Group.
124

The following tables provide the total amount of transactions that have been entered into with related
parties.
2021
2020
For the year ended 30 June
Sales to related
parties
$'000
Purchases from
related parties
$'000
Sales to related
parties
$'000
Purchases from
related parties
$'000
Associate
AP Ventures Limited
-
-
1,180
-
No amounts are owed to or from the associate as at 30 June 2021 (2020: nil).
AP Ventures Limited
AP Ventures Limited (APV) is an Australian company whose principal activity is the identiﬁcation and
assessment of potential investment opportunities including, but not limited to opportunities that are
referred by Afterpay.
Afterpay owns 32.0% of the common shares of APV (2020: 43.9%), is entitled to 21.8% of the voting rights
(2020: 24.2%), has no representation on the Board, no ability to appoint a representative to the Board,
and has no involvement in the management of APV through contractual arrangements. Afterpay is
thus considered to have signiﬁcant inﬂuence, but not control over APV. Afterpay’s investment is
measured using the equity method described within AASB 128 Investments in Associates and Joint
Ventures. APV is not considered a material associate.
2021
$'000
Investment in associate
At 1 July 2020
5,166
Contributions to associate
15,000
Share of loss of associate
(2,271)
Gain on dilution of shareholding in associate
5,683
At 30 June 2021
23,578
The dilution of Afterpay’s shareholding during the year ended 30 June 2021 occurred as a result of
capital raising activities completed by APV, which Afterpay did not fully participate in. APV raised $68.5
million during the year to fund investment opportunities.
125

20. Information relating to Afterpay Limited (The Parent)
2021
2020
As at 30 June
$'000
$'000
Current Assets
18,788
57,486
Non-Current Assets
3,745,344
971,893
Total Assets
3,764,132
1,029,379
Current Liabilities
2,962
6,754
Non-Current Liabilities
1,352,941
-
Total Liabilities
1,355,903
6,754
Net Assets
2,408,229
1,022,625
Issued Capital
2,204,450
957,932
Reserves
355,634
82,409
Accumulated Losses
(151,855)
(17,716)
Total Equity
2,408,229
1,022,625
Loss of the Parent entity
(133,813)
(1,598)
Total comprehensive loss of the Parent entity
(133,813)
(1,598)
21. Deed of cross guarantee
The subsidiaries identiﬁed in Note 19 ‘Related Party Disclosure’ are parties to a deed of cross guarantee
under which each guarantees the debts of the others. By entering into the Deed, the wholly-owned
entities have been relieved of the requirement to prepare a ﬁnancial report and Directors’ Report under
ASIC Corporations (Wholly-owned Companies) Instruments 2016/785. These subsidiaries and Afterpay
Limited together referred to as the ‘Closed Group’, originally entered into the Deed on 29 November
2017. The effect of the Deed is that each party to it has guaranteed to pay any deﬁciency in the event of
the winding up of any of the entities in the Closed Group.
The Consolidated Statement of Comprehensive Income of the subsidiaries that are members of the
Closed Group is as follows:
2021
2020
For the year ended 30 June
$'000
$'000
(Loss) / proﬁt before tax
(17,375)
65,991
Income tax expense
(28,676)
(19,805)
Total comprehensive (loss) / income for the year, net of tax
(46,051)
46,186
126

The Consolidated Statement of Financial Position of the Closed Group is as follows:
2021
2020
As at 30 June
$'000
$'000
ASSETS
Current Assets
Cash and cash equivalents
47,898
185,154
Receivables
592,190
369,518
Other ﬁnancial assets
9,258
3,015
Other assets
7,727
5,314
Income tax receivable
10,970
-
Total Current Assets
668,043
563,001
Non-Current Assets
Investments in associates
23,578
5,166
Investments in subsidiaries
3,608,316
570,527
Tangible assets
18,758
9,482
Intangible assets
68,770
73,280
Deferred tax asset
60,756
43,144
Other ﬁnancial assets
3,217
893
Other assets
259
170
Total Non-Current Assets
3,783,654
702,662
TOTAL ASSETS
4,451,697
1,265,663
LIABILITIES
Current Liabilities
Trade and other payables
87,140
61,700
Employee beneﬁt and other provision
8,075
5,131
Contract liabilities
3,636
226
Lease liabilities
(4,506)
2,528
Financial liabilities
113
631
Income tax payable
-
917
Total Current Liabilities
94,458
71,133
Non-Current Liabilities
Employee beneﬁt and other provision
1,894
513
Lease liabilities
16,677
3,167
Borrowings
1,252,952
-
Related party payables
471,586
121,474
Financial liabilities
99,873
3,038
Total Non-Current Liabilities
1,842,982
128,192
TOTAL LIABILITIES
1,937,440
199,325
NET ASSETS
2,514,257
1,066,338
EQUITY
Contributed equity
2,204,450
975,317
Accumulated losses
(17,684)
17,266
Reserves
327,491
73,755
TOTAL EQUITY
2,514,257
1,066,338
127

Employee remuneration
22. Share-based payment plans
Overview of plans
(a)
Purpose of incentive plans
Employees of the Group may receive remuneration in the form of share-based payments under the
Group’s equity incentive plans, whereby employees render services as consideration for equity
instruments (i.e. equity-settled transactions).
The purpose of these plans is to:
●
Attract, retain and motivate world-class talent from the global technology talent pool to deliver on
the Group’s growth aspirations;
●
Align the interests of employees with the Group’s shareholders; and
●
Encourage long term decision making and drive sustainable performance in the interests of the
Group’s shareholders, customers and other stakeholders.
(b)
Plans operated during the year
During the year ended 30 June 2021, the Group operated share-based payment plans across the
following instruments:
●
Awards over APT equity comprising of options and restricted stock units (RSUs) under the Group’s
Afterpay Equity Incentive Plan;
●
Awards over APT equity comprising of options, loan shares and performance rights under the
Group’s legacy remuneration plan, the Afterpay Employee Incentive Plan (which was adopted prior
to listing in July 2017);
●
Equity in APT issued to participating employees in the Group’s Employee Share Matching Plan
which was launched in November 2020;
●
Equity in Afterpay US, Inc. (a subsidiary of Afterpay Limited) under the Afterpay US, Inc. 2018 Equity
Incentive Plan (US ESOP); and
●
Equity in Clearpay Finance Limited (Clearpay) (a subsidiary of Afterpay Limited) under the Clearpay
Finance Limited 2020 Share Option Plan (UK ESOP).
The potential impact of the Square Acquisition (Note 25) has not been reﬂected in the share-based
payment plans of the Group for the year ended 30 June 2021.
Signiﬁcant accounting judgements, estimates and assumptions
The cost of equity-settled transactions is determined by the fair value at the date when the grant
is made using the Binomial Model. The fair value of options is determined in accordance with the
fair market value of the shares available at the grant date.
The value of the US and UK businesses are a signiﬁcant estimate used to determine the fair value
of the options issued under the UK and US ESOPs (including the FY21 US ESOP Modiﬁcation) and
the fair value of the share-based payments component of the Matrix Convertible Notes. These fair
values are determined by valuations conducted by independent valuers using cash ﬂow
projections based on operating budgets which reﬂect management’s view of the expected
long-term growth proﬁle of the businesses. The determination of cash ﬂows over the life of a
business requires management judgement in assessing the future number of merchant
acquisitions, customer usage, potential price changes as well as any changes to the costs of the
product and of other operating costs incurred by the business. The valuations are then derived by
discounting the cash ﬂow projections to present value using discount rates that reﬂect current
market conditions, external analyst views, industry benchmarks, and, where available, the
underlying businesses cost of debt and/or equity.
128

Some inputs to the Binomial Model require the application of judgement. The fair value of options
granted during year were estimated on the grant date using the assumptions set out below:
FY21
FY20
FY21
FY20
FY21
APT ESOP
US ESOP
UK ESOP
Expected volatility
60-80%
50-80%
N/A
60%
60%
Risk-free interest rate
0.40%
1.00%
N/A
1.39%
0.29%
Expected life of share options (years)
3
4
N/A
5
3
Dividend yield
0%
0%
N/A
0%
0%
The expected volatility and life of share options are based on historical data and current expectations
and are not necessarily indicative of actual outcomes.
The weighted average fair value of the awards granted under the APT ESOP, US ESOP and UK ESOP
during the year was $51.91, N/A and $0.18, respectively (2020: $12.96, $1.72 and N/A, respectively).
At the modiﬁcation date, the fair value of the original awards granted to participants of the FY21 US
ESOP Modiﬁcation (see below) was $96.35 and the fair value of the modiﬁed award was $101.03 based
on expected volatility of 60%, risk-free interest rate of 0.0% and dividend yield of 0%.
Signiﬁcant accounting policies
The cost of equity-settled transactions is determined by the fair value at the date when the grant is
made using the Binomial Model. That cost is recognised in employee beneﬁts expense together with
a corresponding increase in equity reserves over the period in which the service and, where
applicable, the performance conditions are fulﬁlled (the vesting period).
Where the transaction is with a non-employee, the cost is based on the fair value of the asset or
service received. That cost is recognised, together with a corresponding increase in other capital
reserves or share capital in equity, over the period in which the performance and/or service conditions
are fulﬁlled and/or the asset or service is delivered/received.
Settlement of share options upon vesting are recognised as contributed equity.
The share-based payments expense considers the impact of any non-vesting conditions but ignores
the effect of any service and non-market performance vesting conditions. Non-market vesting
conditions are taken into account when considering the number of options expected to vest and at
the end of each reporting period, the Group revisits the estimate. Revisions to the prior period
estimate are recognised in the Consolidated Statement of Comprehensive Income.
When an equity-settled award is modiﬁed, the fair value of both the original award (immediately prior
to the modiﬁcation) and the modiﬁed award is determined on the modiﬁcation date. To the extent
that the fair value of the modiﬁed award is greater than the original award, the difference is expensed
by share-based payments over the remaining vesting period. The remaining difference is recognised
directly in equity.
129

Awards over APT equity
(a)
Overview
As noted above, the Afterpay Equity Incentive Plan was approved by the Group’s shareholders at the
2019 AGM. Under this plan, eligible employees may be granted equity awards in the listed company
(including options, rights (e.g. RSUs) and restricted shares), which are subject to vesting conditions. The
Group also has a legacy Afterpay Employee Incentive Plan (adopted prior to listing).
(b)
Detail of APT equity awards during the period
Set out below is an overview of the APT equity awards for the year ended 30 June 2021.
Options
During the year, 84,688 LTI options were granted to Key Management Personnel (KMP) in accordance
with the FY21 Executive KMP Remuneration Framework (as detailed in the Remuneration Report).
No new options were granted under the legacy Afterpay Employee Incentive Plan during the year.
Restricted Stock Units (RSUs)
During the year, 769,767 RSUs were granted under the Afterpay Equity Incentive Plan, comprising:
●
2,443 RSUs granted to KMP in accordance with the FY21 Executive KMP Remuneration Framework
(as detailed in the Remuneration Report); and
●
767,324 RSUs granted to other eligible employees.
Share Matching Plan
Employees may contribute up to $2,500 to acquire APT shares in any plan year. On the ﬁrst anniversary
of each quarterly contribution, subject to meeting certain criteria, the Group will match the number of
acquired shares. During the year, 3,852 shares were granted under Afterpay’s Share Matching Plan.
FY21 US ESOP Modiﬁcation
709,289 restricted APT shares were awarded to eligible US employees who participated in the FY21 US
ESOP Modiﬁcation (see US ESOP below).
Legacy arrangements—loan shares and performance rights
Historically, and as part of Afterpay’s legacy remuneration arrangements, Afterpay has issued
performance rights to certain employees under the legacy Afterpay Employee Incentive Plan (adopted
prior to listing) which vest over a one to two-year period and loan shares (non-interest bearing, limited
recourse loans from the Group for the sole purpose of acquiring shares in APT) which vest over a one to
four-year period. Under AASB 2 Share-based payment, these performance rights and loan shares are
treated as ‘in substance options’ even where the equity instrument itself is not a share option. No new
loan shares or performance rights were granted during the year.
130

Detailed breakdown of APT equity awards
The following table provides a detailed breakdown of the movement in APT equity awards during the
period.
2021
2020
2021
2020
2021
2020
Share options
Loan shares
Rights 1 & RSUs
No.
WAEP
No.
WAEP
No.
WAEP
No.
WAEP
No.
No.
’000
$
’000
$
’000
$
’000
$
’000
’000
Outstanding at the
beginning of the
year
9,391.00
10.28
14,907
5.49
419
4.50
1,143
3.91
998
-
Granted during
the year
85.00
97.95
1,341
32.85
-
-
-
-
774
1,006
Forfeited during
the year
(438.00)
18.37
(63)
21.61
-
-
-
-
(213)
(8)
Exercised during
the year
(5,763)
4.31
(6,794)
4.12
(127)
3.38
(724)
3.56
(387)
-
Outstanding at
the end of the
year
3,275
21.59
9,391
10.28
292
4.99
419
4.50
1,172
998
Exercisable at the
end of the year
1,660
13.46
5,668
3.65
222
4.71
264
3.69
-
-
1.
Performance rights relating to legacy remuneration arrangements were fully exercised in the prior comparable period and no
further awards have been granted. Granted during the year includes 3,852 share rights that were awarded under the Afterpay Share
Matching Plan. It does not include 709,289 restricted APT shares issued to US employees who participated in the FY21 US ESOP
Modiﬁcation (see below), of which 133,483 vested prior to year-end.
US ESOP
(a)
Overview
The Afterpay US, Inc. 2018 Equity Incentive Plan (US ESOP) is a share option plan under which the Group
may issue options to eligible participants to acquire shares in Afterpay US, Inc., the Group’s US based
subsidiary.
US ESOP options typically vest over a four-year period and are subject to vesting conditions. On vesting
and exercise of US ESOP options, eligible participants are allocated shares in Afterpay US, Inc. (exercised
shares). In order to provide eligible participants with a mechanism to liquidate their exercised shares,
the exercised shares may be exchanged for fully paid ordinary APT shares in speciﬁed circumstances.
Speciﬁcally, the exercised shares in Afterpay US, Inc. will be automatically exchanged for APT shares if
conversion of the Matrix Convertible Notes occurs between 5 and 7 years from the date of issue of the
notes (being 19 January 2018) (the Matrix Convertible Note conversion mechanism is outlined in Note 6).
Exchange for APT shares may also occur at the discretion of the APT Board if the Matrix Convertible
Notes are not converted and are no longer on issue, at least 5 years have elapsed since the US ESOP was
initially adopted and other speciﬁed corporate events have not occurred. Holders of exercised shares do
not have a separate right to require exchange for APT shares.
The total US ESOP pool was limited to options over a maximum of 10% of Afterpay US, Inc. fully diluted
shares on issue and the Group has no intention to expand this pool. In light of this limit, the Group’s
ownership interest in Afterpay US, Inc. will not decline below 90% due to the exercise of options on
Afterpay US, Inc. shares under the US ESOP and will increase to 100% following the exchange of
exercised shares for APT shares (assuming no other issues of shares in Afterpay US, Inc. in the
intervening period).
The US ESOP was established in 2018 to facilitate the attraction and retention of top-tier talent in the
US, who have been critical to delivering the Group’s US growth aspirations. While successful in
achieving these aims, the US ESOP is now closed to new offers and new incentive awards made to US
employees are being provided by way of awards over APT equity to ensure a globally aligned and
consistent approach going forward.
131

(b)
FY21 US ESOP Modiﬁcation
During the period, eligible US ESOP participants were offered an ability to exchange their vested and
unvested shares in Afterpay US, Inc. (FY21 US ESOP Modiﬁcation). For each participant who chose to
participate in the FY21 US ESOP Modiﬁcation, Afterpay acquired, for cash, the lower of:
●
The aggregate number of a participants’ vested shares and vested options; or
●
The number of vested shares and vested options which was equal to 25% of all the participant’s
eligible shares and options.
Any remaining vested shares of the participants were exchanged for APT shares. In addition, all
unvested shares of the participants were exchanged for restricted shares in APT (subject to original
vesting terms). The cash or number of APT shares which were issued was based on the agreed value of
Afterpay US, Inc. shares (based on the same valuation used for the Matrix Transaction as referred to in
the Matrix Convertible Notes below). Any unvested options were not eligible for the FY21 US ESOP
Modiﬁcation and these awards were not modiﬁed.
The FY21 US ESOP Modiﬁcation resulted in:
●
Purchase of 2,009,106 vested shares and vested options from US ESOP participants for $202.6
million;
●
Exchange of 3,874,478 vested shares for 2,784,186 APT shares; and
●
Exchange of 987,058 unvested shares for 709,289 restricted APT shares (restricted until original
vesting period concludes).
The FY21 US ESOP Modiﬁcation was determined to be a modiﬁcation of a share-based payment
arrangement and an additional share-based payment expense of $7.0 million has been recognised
during the period. The remaining impact of the FY21 US ESOP Modiﬁcation has been recognised
directly in equity.
(c)
Detail of US ESOP awards during the period
The table below provides a breakdown of the movement in US ESOP share options during the period.
2021
2020
Share options
No.
WAEP 1
No.
WAEP 1
’000
$
’000
$
Outstanding at the beginning of the year
5,764
0.42
8,998
0.27
Granted during the year
-
-
392
2.64
Forfeited during the year
(80)
0.36
(756)
0.30
Exercised during the year
(2,307)
0.39
(2,870)
0.30
Outstanding at the end of the year2
3,377
0.45
5,764
0.42
Exercisable at the end of the year
319
0.59
1,136
0.43
1.
The exercise price for options granted is set on a periodic basis by reference to a third-party valuation of Afterpay US, Inc. which is
conducted for US tax purposes.
2.
This number includes options that have been exercised early but remain subject to vesting and a re-purchase right by Afterpay US,
Inc.
During the year, the Group received $0.3 million (2020: $0.1 million) from US ESOP option holders who
elected to early exercise unvested options. An early exercise mechanism is provided under the US ESOP
whereby option holders may elect to exercise options and receive unvested shares in Afterpay US, Inc.
before full vesting of the options occurs. Any unvested options and any such unvested shares may be
subject to, among other things, a repurchase right whereby Afterpay US, Inc. can, at its election,
repurchase those securities if the Board determines it to be appropriate (e.g. if the vesting conditions
are not met).
132

If Afterpay US, Inc. elects to exercise the repurchase right, it has the contractual obligation to return the
funds to the option holder in accordance with the terms of the US ESOP. The repurchase price is set at
the lower of the fair market value and the early exercise price. A liability of $1.0 million (2020: $1.1 million)
has been recognised as a current liability in the ﬁnancial statements to account for this potential
repurchase event.
The US ESOP provides for options on non-voting shares in Afterpay US, Inc. and when vested and
exercised will be recognised as a non-controlling interest in Afterpay US, Inc. in accordance with AASB
10 Consolidated Financial Statements.
Matrix Convertible Notes
When originally issued in January 2018, the Group determined the US$0.1 million Matrix Convertible
Notes included a share-based payment component, for services to be delivered by Matrix. The fair value
of the Matrix Convertible Notes when initially issued of US$1.7 million exceeded their face value and
were determined to be a share-based payment in accordance with AASB 2 Share-based payment. The
fair value of the Matrix Convertible Notes was initially determined by using a multi-stage process,
including calculating the equity value of Afterpay US, Inc., which was then used as an input into the
Binomial Model. The share-based payment expense will be recognised over the expected period the
services will be performed.
On 25 February 2021, Afterpay entered into an agreement to extinguish 35% of the Matrix Convertible
Notes for $373.3 million in cash (the Matrix Transaction). This resulted in a modiﬁcation of the initial
share-based payment and the fair value of the original award was determined with reference to the
equity value of Afterpay US, Inc. at the modiﬁcation date.
Similar to the FY21 US ESOP Modiﬁcation (see above), the Matrix Transaction resulted in an incremental
increase to the fair value of the Matrix Convertible Notes and an additional share-based payment
expense of $0.8 million has been recognised during the period. The remaining impact has been
recognised directly in equity. The remaining 65% of the Matrix Convertible Notes has not been revalued
or modiﬁed and continues to vest at the original fair value through to the maturity date.
Further details on the Matrix Convertible Notes are outlined in Note 6.
UK ESOP
(a)
Overview
The Group had previously conﬁrmed that it would establish an equity incentive plan comprising
options over equity in Afterpay’s UK based subsidiary Clearpay Finance Limited (Clearpay) (UK ESOP), in
accordance with the terms of the acquisition of Clearpay from ThinkSmart. As part of these terms,
ThinkSmart agreed to provide for an equity pool of 3.5% Clearpay shares on issue (out of its remaining
10% shareholding in Clearpay) that could be used for the purposes of a UK ESOP in the form of options
over the 3.5% of Clearpay shares.
The Board of Afterpay and Clearpay adopted the UK ESOP Rules on 24 June 2020. The UK ESOP options
have both continued service and performance-based vesting conditions. On exercise of UK ESOP
options, eligible participants will be allocated shares in Clearpay (exercised shares). In order to provide
eligible participants with a mechanism to liquidate their exercised shares, it is intended that exercised
shares may be exchanged for fully paid ordinary APT shares or cash (at the Group’s election) in speciﬁed
circumstances. Speciﬁcally, the exercised shares in Clearpay may only be exchanged for APT shares or
cash at the same time as the exercise of the Clearpay Put and Call Option by APT or ThinkSmart, as
applicable (the Clearpay Put and Call Option mechanism is outlined in Note 6). If UK ESOP options are
not exercised and exchanged with such event, the UK ESOP options will lapse. This mechanism is
intended to ensure that there are no outstanding UK ESOP options once APT moves to a 100%
shareholding in Clearpay via exercise of the Clearpay Put and Call Option.
Further, it is intended that exercised shares in Clearpay will be exchanged into APT shares or cash at the
same valuation of Clearpay shares as the Clearpay Put and Call Option (as applicable). Consistent with
the Clearpay Put and Call Option, the number of APT shares that may be issued and exchanged as
consideration for the exercised shares in Clearpay will be based on the value of the exercised shares in
Clearpay divided by the volume weighted average price (VWAP) of APT shares over the 5 trading days
up to the date of option exercise.
133

As noted above, consideration for exercised shares may be paid by the Group in cash or APT shares (at
the Group’s election). The maximum number of APT shares that can be issued in exchange for exercised
Clearpay shares under the proposed UK ESOP will be subject to a cap of 8,039,024 APT shares, being 3%
of APT shares on issue at the date of ﬁrst adoption of the UK ESOP Rules on 24 June 2020. Separately,
and as outlined in Note 6, any exchange of Clearpay shares held by ThinkSmart as a result of its exercise
of the put option is capped at 5% of APT shares on issue at the time of exchange.
The UK ESOP was contemplated in the terms of the acquisition of Clearpay to facilitate the attraction
and retention of top-tier talent in the UK, who will be critical to delivering the Group’s UK growth
aspirations. As noted above, after the UK ESOP pool has been fully allocated to UK employees, new
incentive awards made to UK employees will be provided by way of awards over APT equity to ensure a
globally aligned and consistent approach going forward.
(b)
Detail of UK ESOP awards during the period
The table below provides a breakdown of the movement in UK ESOP share options during the period.
2021
Share options
No.
WAEP
’000
$
Outstanding at the beginning of the year
-
-
Granted during the year
1,860
0.18
Forfeited during the year
(40)
0.16
Exercised during the year
-
-
Outstanding at the end of the year
1,820
0.17
Exercisable at the end of the year
1,050
0.17
23. Compensation of Executive Key Management Personnel
and Non-executive Directors
2021
2020
For the year ended 30 June
$
$
Short-term employee beneﬁts
2,803,465
3,083,648
Post-employment beneﬁts
88,364
115,174
Other long-term beneﬁts
22,873
24,796
Share-based payment
2,697,562
4,269,242
Total compensation
5,612,264
7,492,860
Compensation of Key Management Personnel (KMP) includes Executive KMP and Non-Executive
Directors. Compensation details for KMP are included in Sections 4.6 and 5.5 of the Remuneration
Report.
134

Items not recognised in the
ﬁnancial statements
24. Commitments and contingencies
Contingent liabilities and contingent assets
Details of contingent liabilities and contingent assets where the probability of future payments is not
considered remote are set out below as well as details of contingent liabilities, which although
considered remote, the Directors consider should be disclosed as they are not disclosed elsewhere in
the notes to the ﬁnancial statements.
(a)
Legal commitments and claims
Claims can be raised by customers and suppliers against the Group in the ordinary course of business.
To the extent that a future outﬂow is probable and able to be reliably estimated, a liability has been
recorded.
(b)
Bank guarantees
The Group had entered into bank guarantee arrangements totalling $6.0 million relating to the Group’s
normal business operations (2020: $2.9 million).
25. Events occurring after the reporting period
With the exception of the items listed below, the Directors are not aware of any other matters or
circumstances that have arisen since 30 June 2021 that have signiﬁcantly affected or may signiﬁcantly
affect the operations of the consolidated entity in subsequent ﬁnancial years, the results of those
operations, or the state of affairs of the consolidated entity in future ﬁnancial years.
Proposed acquisition by Square, Inc.
In August 2021, Square, Inc. (Square) and Afterpay entered into a Scheme Implementation Deed (SID)
under which Square has agreed to acquire all of the issued shares in Afterpay by way of a
recommended court-approved Scheme of Arrangement (The Transaction). The Transaction has an
implied value of approximately US$29 billion ($39 billion) based on the closing price of Square common
stock on 30 July 2021. The acquisition aims to enable Square and Afterpay to better deliver compelling
ﬁnancial products and services that expand access to more consumers and drive incremental revenue
for merchants of all sizes.
Under the terms of the SID, which has been approved by the members of the Boards of Directors of
both Square and Afterpay, Afterpay shareholders will receive a ﬁxed exchange ratio of 0.375 Square
shares for each Afterpay ordinary share held on the record date (Consideration). Square may elect to pay
1% of Consideration in cash.
Square has agreed to establish a secondary listing on the Australian Securities Exchange (ASX) to allow
Afterpay shareholders to trade Square shares via CHESS Depositary Interests (CDIs) on the ASX. These
CDIs are expected to be eligible for S&P index inclusion in Australia. Afterpay shareholders will be able
to elect whether to receive the Consideration in NYSE listed Square Class A common stock or CDIs.
The ﬁnancial effects of the Transaction, including impact on any existing contractual arrangements,
have not been recognised as at 30 June 2021.
The Transaction is expected to complete in the ﬁrst quarter of calendar year 2022, subject to the
satisfaction of certain closing conditions, including approval from both Square and Afterpay
shareholders.
135

Investment in Postpay
In July 2021, the Group acquired a 12.5% equity stake in Postpay Technology Limited, a Dubai-based
BNPL business, for US$5.0 million.
136

Other information
26. Auditor’s remuneration
2021
2020
$
$
Amounts received or due and receivable by Ernst & Young (Australia) for:
Audit fees
Fee for auditing the statutory ﬁnancial report of the parent, including the
Group’s annual and half-year report
1,493,812
1,351,686
Fee for auditing the statutory ﬁnancial reports of any controlled entities
177,594
32,200
Fees for assurance services that are required by legislation to be provided
by the auditor
67,600
29,120
Assurance Related Services
Fees for other assurance and agreed-upon-procedures services under other
legislation or contractual arrangements where there is discretion as to who
provides the service
312,500
52,800
Non-audit services
Fees for non-audit services
-
-
Total auditor's remuneration
2,051,506
1,465,806
27. Other signiﬁcant accounting policies
New and amended standards adopted by the Group
The following new accounting standards and interpretations became applicable and were adopted
during the current reporting period:
●
IFRIC agenda decision Conﬁguration or Customisation Costs in a Cloud Computing Arrangement
The Group has also chosen to early adopt the following amendment(s):
●
Amendments to AASB 101 Classiﬁcation of Liabilities as Current or Non-current
●
Amendments to AASB 101 and AASB Practice Statement 2 Disclosure of Accounting Policies
The adoption of these amendments did not have a material impact on the Group’s accounting policies
and does not require retrospective adjustment to the disclosures included in these ﬁnancial
statements.
A number of other amendments also became effective during the period, but did not have a material
impact on the Group’s accounting policies.
137

Directors’ declaration
In accordance with a resolution of the Directors of Afterpay Limited, I state that:
In the opinion of the Directors:
a)
The ﬁnancial statements and notes of Afterpay Limited for the year ended 30 June 2021 are in
accordance with the Corporations Act 2001, including:
i)
giving a true and fair view of its ﬁnancial position as at 30 June 2021 and of the Group’s
performance for the year ended on that date; and
ii)
complying with Accounting standards (including the Australian Accounting Interpretations)
and Corporations Regulations 2001.
b)
There are reasonable grounds to believe that the Group will be able to pay its debts as and when
they become due and payable;
c)
The remuneration disclosures set out in the Directors’ Report comply with Accounting Standards
AASB 124 Related Party Disclosures and the Corporations Regulations 2001; and
d)
The ﬁnancial statements and notes also comply with International Financial Reporting Standards
as disclosed in the ﬁnancial statements.
The Directors have been given the declarations by the Co-Chief Executive Ofﬁcers and Chief Financial
Ofﬁcer required by section 295A of the Corporations Act 2001.
On behalf of the Board.
Elana Rubin AM
Independent Chair
Melbourne
25 August 2021
138

Auditor’s
Report.
We have built a powerful
global platform that
Millennial and Gen Z
consumers trust, because
they can shop responsibly
with brands they love

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000 Australia
GPO Box 67 Melbourne VIC 3001
Tel: +61 3 9288 8000
Fax: +61 3 8650 7777
ey.com/au
Independent Auditor's Report to the Members of Afterpay Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Afterpay Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2021, the consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, notes to the financial
statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2021 and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
1. Afterpay Convertible Notes
Why significant
How our audit addressed the key audit matter
On 12 March 2021, the Group issued $1.5 billion
of zero coupon convertible notes which have a
maturity date of 12 March 2026. The
convertible notes are listed on the Singapore
Exchange Securities Trading Limited (SGX-ST).
Decisions regarding the appropriate accounting
treatment and valuation of these convertible
notes are complex and involved the application
of significant judgement.
Notes 6 and 15 of the financial report describe
this transaction and the related valuation of the
convertible notes and how they have been
accounted for.
Our audit procedures on the convertible notes
focused on the appropriateness of the accounting
treatment and the judgements made in determining
their valuation. Our audit procedures included the
following:
•
We assessed the terms and conditions of the
convertible notes as disclosed in the Offering
Circular, focusing on the conversion features
and key terms.
•
We involved our financial instrument accounting
specialists to consider and challenge the
accounting treatment of the convertible notes
including the allocation between debt and equity
and the valuation of any embedded derivatives,
and our financial instrument valuation specialists
to assess the appropriateness of the discount
rate adopted to determine the fair value of the
liability component at inception.
•
We assessed the adequacy of the related
disclosures in the financial report.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
2. Judgements in Cash Flow Models
Why significant
How our audit addressed the key audit matter
On 25 February 2021, the Group entered into an
agreement to extinguish 35% of the Matrix
Convertible Notes for cash consideration of
$373.3 million. At the same time, the Group
launched a tender offer to eligible participants
under the Afterpay US, Inc. 2018 Equity
Incentive Plan (US ESOP). These agreements
resulted in modifications to existing share-based
payment arrangements related to the US
business.
Also, the Group has a put option liability to
acquire the remaining Clearpay Finance Limited
(Clearpay) shares held by ThinkSmart Limited
(ThinkSmart), which is exercisable at any time
after 23 August 2023, which relates to the UK
business.
Significant judgements were required to be made
by the Group in preparing the US and UK cash
flow models. The cash flow models are highly
sensitive to changes in underlying assumptions
such as future cash flows and discount rates.
The US cash flow model is a significant input in
the calculation of the fair value of the share-
based payment awards at modification date, and
the UK cash flow model in the valuation of the
put liability at 30 June 2021.
Refer to Notes 6, 15 and 22 of the financial
report for the relevant disclosures in relation to
the Matrix Convertible Notes and awards under
the US ESOP.
Refer to Notes 6 and 16 of the financial report
for the relevant disclosures in relation to the
Clearpay Put Option liability.
Our audit procedures included the following:
•
We understood and assessed the respective
transactions and key terms.
•
We assessed the competence, qualifications and
objectivity of the valuation specialists engaged by
the Group.
•
We involved our valuation specialists to challenge
and evaluate the valuation approach, terminal
growth rates and discount rates applied by the
Groups external valuation experts.
•
We assessed the underlying cash flow
assumptions to determine whether reasonably
possible changes to the cash flow model inputs
would result in a material misstatement to the
accounting outcomes.
•
We assessed the adequacy of the related
disclosures in the financial report.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
3. Business Combinations
Why significant
How our audit addressed the key audit matter
On 9 March 2021, the Group completed the
acquisition of Pagantis SAU and PMT Technology
SLU (collectively, Pagantis) for $73.9 million
including deferred consideration of $59.8 million
and contingent consideration of $6.3 million.
The valuation of goodwill, other intangible assets
and deferred and contingent consideration in a
business combination is complex and highly
sensitive to underlying assumptions such as
future cash flows and discount rates. These
judgements could have an impact on the
recognition of the amount of goodwill ($73.9
million) if alternative assumptions had been
adopted.
Refer to Note 18 of the financial report for the
relevant disclosures in relation to the acquisition
of Pagantis.
Our audit procedures included the following:
•
We assessed the terms and conditions of the
share purchase agreement to obtain an
understanding of the transaction and the key
terms.
•
We assessed and recalculated the value of the
purchase consideration, inclusive of the deferred
and contingent consideration.
•
We assessed the competence, qualifications and
objectivity of the specialists engaged by the
Group to determine the fair value of the deferred
and contingent consideration and the acquired
identifiable intangible assets at the acquisition
date.
•
We involved our valuation specialists to challenge
and evaluate the valuation approach,
methodology and assumptions applied to
determine the fair value the contingent
consideration and acquired identifiable intangible
assets at the acquisition date.
•
We assessed the adequacy of the disclosures in
the financial report in respect of the acquisition
of Pagantis.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
4. Capitalised Software Development Costs
Why significant
How our audit addressed the key audit matter
The Group’s income is generated through the
processing of transactions using internally
developed software platforms disclosed as Core
Technology in Note 12 of the financial report.
Software development is core to the Company’s
operations and s judgement is required in
determining whether development expenditure
meets the capitalisation criteria set out in
Australian Accounting Standards.
Internally developed software is inherently
judgemental with respect to technical feasibility,
intention and ability to complete the intangible
asset, ability to generate future economic
benefits and the ability to measure the costs
reliably. This increases the risk that expenditures
may be inappropriately capitalised.
The Group’s disclosure for capitalised software
costs is included in Note 12 of the financial
report.
Our audit procedures included the following:
•
We selected a sample of projects and evaluated
the nature of the project, the status of the
project and assess whether the project met the
capitalisation criteria as set out in Australian
Accounting Standards.
•
For a sample of capitalised employee and sub-
contractor costs, we agreed the pay rates applied
to employment contracts, supplier invoices and
obtained evidence to support the time charged to
development projects.
•
We assessed the useful lives and amortisation
rates allocated to capitalised development costs.
•
We recalculated the amortisation expense for the
period.
•
We assessed the consistency of the capitalisation
methodology applied by the Group in comparison
to prior reporting periods.
•
We challenged whether there were any indicators
of impairment present during the reporting
period.
•
We assessed the adequacy of the related
disclosures in the financial report in respect of
the capitalised costs.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
5. Provision for expected credit losses on consumer receivables
Why significant
How our audit addressed the key audit matter
The nature of the Group’s business is to assume
the credit risk of merchant transactions with
consumers. In accordance with Australian
Accounting Standards, the Group has applied a
forward-looking model to determine the
provision for expected credit loss (ECL).
Significant judgement is involved in determining
the estimated loss rates on outstanding
receivables including any impact of the COVID-
19 pandemic, along with forward-looking factors.
The Group’s disclosure for the provision for
expected credit losses is disclosed in Note 8 of
the financial report.
Our audit procedures included the following:
•
We assessed whether the methodology applied
by management in their model is in accordance
with the requirements of Australian Accounting
Standards.
•
We assessed the mathematical accuracy of the
model and recalculated the ageing of the
consumer receivables at period end.
•
We assessed the integrity of current and
historical loss rates assumptions on consumer
receivables and compared these assumptions to
those of the prior period and investigated any
significant differences.
•
We assessed the impact of the COVID-19
pandemic on the loss rates along with forward-
looking factors in the measurement of the
provision for ECL.
•
We assessed the adequacy of the provision by
comparing the cash receipts after period end to
the outstanding consumer receivables balance at
period end.
•
We assessed the adequacy of the related
disclosures in the financial report in respect of
the consumer receivables.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2021 Annual Report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:

•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.

•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.

•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.

•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.

•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 58 to 83 of the directors' report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Afterpay Limited for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.

Ernst & Young

Fiona Campbell
Partner
Melbourne
25 August 2021

Additional Securities
Exchange Information
In accordance with ASX Listing Rule 4.10, the Company provides the following information to
shareholders not elsewhere disclosed in this Annual Report. The information provided is current as at 9
August 2021.
Corporate Governance Statement
Afterpay’s FY21 Corporate Governance Statement, together with the ASX Appendix 4G, have been
lodged with the ASX and are available at https://corporate.afterpay.com/investors/corporate-governance.
Substantial holders
Unless otherwise stated below, as at 9 August 2021, the names of the substantial holders of the
Company and the number of equity securities in which those substantial holders and their associates
have a relevant interest, as disclosed in substantial holding notices1 given to the Company, are as
follows:
Holder of Equity Securities
Number of Equity
Securities held
% of total issued
securities capital in
relevant class
Anthony Eisen
19,455,963
6.71%
Nicholas Molnar
19,455,963
6.71%
Vanguard Group
19,386,851
6.68%
BlackRock Group
14,852,759
5.12%
1.
The equity securities held by Anthony Eisen and Nicholas Molnar reﬂect their current interests as disclosed in their Appendix 3Y
change of director’s interest notices released to the ASX on 2 March 2021 (noting their last substantial shareholder notices were
released on 13 July 2020).
Number of holders
As at 9 August 2021, the number of holders in each class of equity securities is as follows:
Class of Equity Securities
Number of holders
Fully paid ordinary shares
62,019
Options to acquire ordinary shares
61
Convertible Notes
7,503
Restricted Stock Units
621
Rights
379
Less than marketable parcels of ordinary shares (UMP Shares)
As at 9 August 2021, the number of shareholders holding less than a marketable parcel of $500 worth of
shares, based on the closing market price on that date of $130.05 per share, is 459.
149

Voting rights of equity securities
The only class of equity securities on issue in the Company which carries voting rights is fully paid
ordinary shares. As at 9 August 2021, there were 62,019 holders of a total of 290,073,416 ordinary shares of
the Company.
At a general meeting of the Company, every holder of ordinary shares present in person or by proxy,
attorney or representative has one vote on a show of hands and, on a poll, one vote for each ordinary
share held. On a poll, every member (or his or her proxy, attorney or representative) is entitled to vote for
each fully paid share held and, in respect of each partly paid share, is entitled to a fraction of a vote
equivalent to the proportion which the amount paid up (not credited) on that partly paid share bears to
the total amounts paid and payable (excluding amounts credited) on that share. Amounts paid in
advance of a call are ignored when calculating the proportion.
Distribution of holders of equity securities
The distribution of holders of equity securities on issue in the Company as at 9 August 2021 is as follows:
Distribution of ordinary shareholders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
57,644
8,407,469
2.90
1,001 – 5,000
3,643
7,591,783
2.62
5,001 – 10,000
365
2,582,109
0.89
10,001 – 100,000
306
7,773,436
2.68
100,001 – and over
61
263,718,619
90.91
Totals
62,019
290,073,416
100.00
Distribution of option holders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
-
-
-
1,001 – 5,000
4
10,782
0.38
5,001 – 10,000
9
71,266
2.52
10,001 – 100,000
41
1,494,869
52.93
100,001 – and over
7
1,247,667
44.17
Totals
61
2,824,584
100.00
Distribution of Restricted Stock Unit (RSU) holders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
417
148,378
14.48
1,001 – 5,000
159
367,222
35.83
5,001 – 10,000
27
180,253
17.58
10,001 – 100,000
18
329,118
32.11
100,001 – and over
-
-
-
Totals
621
1,024,971
100.00
150

Distribution of Rights holders
Holdings Ranges
Holders
Total Units
%
1 – 1,000
379
3,852
100.00
1,001 – 5,000
-
-
-
5,001 – 10,000
-
-
-
10,001 – 100,000
-
-
-
100,001 – and over
-
-
-
Totals
379
3,852
100.00
Convertible note holders
One convertible note has been issued to each of Matrix Partners X L.P, Weston & Co X LLC and NBQ
Corporate, S.L.U.
Escrow
Class of restricted securities
Type of restriction
Number of securities
End date of escrow period
Ordinary shares
Voluntary escrow
10,018
31 August 2022
Ordinary shares
Voluntary escrow
1,440,213
16 January 2025
Ordinary shares
Voluntary escrow
732,396
On APT’s instructions
Unquoted equity securities
The number of each class of unquoted equity securities on issue, and the number of holders in each
such class, are as follows:
Class of Equity Securities
Number of unquoted
Equity Securities
Number of holders
Convertible Notes
7,503
7,503
Options to acquire ordinary shares
2,824,584
61
Restricted Stock Units
1,024,971
621
Rights
3,852
379
No person holds 20% or more of any class of Unquoted Equity Securities on issue.
151

Twenty largest shareholders
The Company only has one class of quoted securities, being ordinary shares. The names of the 20
largest holders of ordinary shares, and the number of ordinary shares and percentage of capital held by
each holder is as follows:
Rank
Holder Name
Total shares
%
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
72,942,637
25.15
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
42,809,788
14.76
3
CITICORP NOMINEES PTY LIMITED
34,851,381
12.01
4
ANTHONY MATHEW EISEN
18,505,963
6.38
5
NICHOLAS MOLNAR PTY LTD
17,005,963
5.86
5
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
12,698,504
4.38
7
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
11,029,607
3.80
8
CLEEVECORP PTY LTD
5,517,000
1.90
9
NATIONAL NOMINEES LIMITED
5,055,672
1.74
10
CITICORP NOMINEES PTY LIMITED
4,050,768
1.40
11
BNP PARIBAS NOMS PTY LTD
3,288,602
1.13
12
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,097,894
1.07
13
BNP PARIBAS NOMINEES PTY LTD
2,677,289
0.92
14
CITICORP NOMINEES PTY LIMITED
2,645,648
0.91
15
BNP PARIBAS NOMINEES PTY LTD
2,420,022
0.83
16
ATC CAPITAL PTY LTD
2,319,475
0.80
17
NICHOLAS MOLNAR PTY LTD
1,500,000
0.52
18
WOODROSS NOMINEES PTY LTD
1,425,347
0.49
19
ESTATE LATE ADRIAN CLEEVE
1,410,470
0.49
20
NATIONAL NOMINEES LIMITED
1,405,689
0.48
Total number of shares of Top 20 Holders
246,657,719
85.03
Total Remaining Holders Balance
43,415,697
14.97
152

Corporate
information.
Afterpay Limited ACN 618 280 649
Board of Directors
Elana Rubin AM (Independent Chair
and Non-Executive Director)
Anthony Eisen (Co-Chief
Executive Officer)
Nick Molnar (Co-Chief
Executive Officer)
Gary Briggs (Independent
Non-Executive Director)
Pat O’Sullivan (Independent
Non-Executive Director)
Sharon Rothstein (Independent
Non-Executive Director)
Dana Stalder (Independent
Non-Executive Director)
Registered Office
The address and telephone number of
the Company’s registered office is:
Level 5, 406 Collins Street
Melbourne VIC 3000
Telephone: +61 1300 100 729
Company Secretaries
Amanda Street
Nat McKaig
Auditor
Ernst & Young
8 Exhibition Street
Melbourne VIC 3000
Share Registry
The address and telephone number of the Company’s
share registry, Computershare Investor Services, is:
Computershare Investor Services
Yarra Falls
452 Johnson Street
Abbotsford Victoria 3067
Telephone: +61 1300 137 328
Stock Exchange Listing
The Company’s ordinary shares are quoted on the Australian
Securities Exchange (ASX). The Company was admitted to the
official list of the ASX on 29 June 2017 (ASX issuer code: APT).
Other Information
The Company is not currently conducting an on-market
buy-back.
There are no issues of securities approved for the purposes
of item 7 of section 611 of the Corporations Act which have
not yet been completed.
No securities were purchased on-market during the
reporting period under or for the purposes of an employee
incentive scheme or to satisfy the entitlements of the holders
of options or other rights to acquire securities granted under
an employee incentive scheme.