ASE Annual Report 2020 | Quarterlytics

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FY2020 Annual Report · ASE

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ASX Limited
Annual Report 2020

Contents
Who we are

Our vision and strategy

Chairman's letter

CEO's year in review

Operating and financial review

Sustainability

Corporate governance

Remuneration report

Directors' report

Auditor's independence declaration

Statutory report – consolidated financial
statements

Key financial ratios

Transaction levels and statistics

Shareholder information

Directory

110

111

114

116

ASX Annual General Meeting

The AGM will be held at 10am (Sydney time) on
Wednesday 30 September 2020 and conducted virtually.
Further details are available at www.asx.com.au/agm

ASX Limited ABN 98 008 624 691

FY20 HIGHLIGHTS

For our
stakeholders
during COVID-19 of ASX employees

95%

transitioned to working
from home over a
single weekend

5.2m

equity trades facilitated
on Friday 13 March 2020,
up 113% on the previous
volume record

$34bn

secondary capital raised
between March and
June 2020

For our
customers

For our
shareholders

For our
people

For Australia's
financial
markets

100%

uptime availability of ASX's
five main trading and
post-trade systems

Equities $6bn

Bonds $69bn

Futures $214bn

average daily value
of transactions settled
electronically

$97bn

total capital raised to enable
companies to manage their
operations and plan for
the future

Eight

$498.6m

238.9cps

consecutive years of
revenue growth

statutory net profit after
tax, up 1.4% on last year

total dividends per share,
fully franked, up 4.5% on
last year

$513.8m

underlying net profit after
tax, up 4.4% on last year

89%

of employees proud to
work at ASX

97%

believe ASX is serious about
creating a culture of risk
awareness, accountability
and speaking up

85%

of our people feel ASX
provides a supportive
work-life balance

XTX

S&P/ASX All Technology
Index launched, increasing
opportunities for investors
and enhancing the
attractiveness of
Australia’s market

180k

daily average number
of unique visitors to
www.asx.com.au,
up 32% on last year

new or updated listing rule
guidance notes to improve
disclosures to market, make
the rules easier to understand
and enable ASX to better
monitor compliance

ASX Annual Report 2020 FY20 highlights

WHO WE ARE

ASX has a proud history as an early and successful adopter
of new technology. Today, we continue to embrace innovative
solutions to make life easier for customers, help companies
grow, create value for shareholders and advance the
Australian economy.

ASX is an integrated exchange offering listings, trading, clearing,
settlement, technical and information services, and other post-
trade services.

We operate markets for a wide range of asset classes, including
equities, fixed income, commodities and energy. We are a top 10
global securities exchange by value and the largest interest rate
derivatives market in Asia.

Companies, corporates and issuers of capital from Australia and
around the world engage with ASX to manage risk and raise
capital to grow.

We operate liquid, transparent and reliable markets of
integrity. The certainty and security of our clearing and
settlement activities help underpin the systemic stability
of the Australian economy.

ASX also provides data and technology services to
intermediaries, banks, information vendors and software
developers to help them make informed decisions, offer services
to their clients and connect with one another.

Through the expertise, experience and passion of our people,
ASX strives to be the world's most respected financial
marketplace, built on the foundations of openness, quality
and trust.

More information about ASX can be found at
www.asx.com.au

ABOUT
ASX

ASX operates at the
heart of the globally
attractive, deep and
liquid Australian
financial markets

ASX Annual Report 2020 Who we are

OUR VISION

The world's most respected
financial marketplace

OUR STRATEGY

Diverse ecosystem

Provide an open system
to support partnerships,
products and services
across the Australian
financial ecosystem

Innovative solutions
and technology

Offer innovative solutions
and technology to drive
efficiency and deliver
benefits to customers,
employees and the wider
financial marketplace

Enduring trust, integrity
and resilience

Earn trust and deliver
resilience by making
sure our systems and
processes are stable,
secure, reliable and fair,
and our people act with
integrity towards the
market and each other

Customer-focused

Think deeply about
how we can improve
the experience for our
customers, deliver them
value and make their
lives easier

Collaborative culture

Foster collaboration
and agility within our
businesses, across our
teams and among our
customers, regulators
and other stakeholders

ASX Annual Report 2020 Our vision and strategy

Chairman's letter

This is essential for ASX, our customers and our shareholders. It is
also vital for Australia’s financial markets and the broader economy.

Exchanges like ASX, with our connected financial activities, play an
important economic role. Remaining open and ensuring continuity of
markets supports price discovery, capital allocation and risk transfer.
These are critical in periods of uncertainty and high volatility.

Having a reliable, well-capitalised and trusted company at the heart
of Australia’s financial markets has never been more important.

Thank you for your confidence in what we do and how we do it.

Financial highlights

The strength of ASX’s business model and its ability to weather
changing market conditions was evident in FY20.

Statutory net profit after tax grew 1.4% to $498.6 million – up $6.6
million – compared to last year (FY19), and underlying net profit
after tax rose 4.4% to $513.8 million – up $21.8 million.

Statutory earnings per share (EPS) grew 1.4% to 257.6 cents,
and underlying EPS rose 4.4% to 265.4 cents per share, up from
254.1 cents.

Our dividend for the second half of FY20 was 122.5 cents per share
(cps), fully franked, bringing total ordinary dividends (interim and
final) for FY20 to 238.9 cps, up 4.5% on the previous year. It is the
seventh consecutive year of higher total ordinary dividends and
represents 90% of underlying profit.

Dear fellow shareholders,

Relief

What a difference a year makes. When we presented our Annual
Report 12 months ago, no one imagined the COVID-19 global
pandemic that is now disrupting all aspects of our lives. There is
no precedent for the current situation and its impact on the global
economy. A new normal awaits us. ASX sincerely hopes you, and
your family and friends remain safe and well.

Strength

It is said that character is forged in adversity. Financial markets
have certainly been under pressure, as has ASX. Our infrastructure
and operational capabilities withstood extreme tests, and handled
record volatility and volumes. At the same time, our staff were well
prepared for the challenge of managing the heightened activity
largely from home.

The 2020 financial year (FY20) was a period when the resilience and
the adaptability of ASX’s people and processes were tested. So too
was the faith of our customers, investors and other stakeholders. I’m
proud to report that ASX performed as we would have expected. As
such, strength is an appropriate theme for this year’s Annual Report.

Throughout this volatile period, ASX markets remained open. The
investments we made to strengthen our foundations and position
the company for future growth are paying off.

Despite the necessary isolating and distancing, it would appear
communities, including business communities, have become
connected like never before. As was often said in public health
messages, we’re all in this together.

For ASX, that starts with our people, whose wellbeing is our primary
concern. This includes the care taken when moving to work from
home, which 95% of our staff did over one weekend. Our employees
are supported with the resources required to work safely and
effectively, including for their physical and mental health. The
seamless and successful way our people embraced new ways of
working and collaborating reflects ASX’s strong culture. It also
highlights the thoroughness of our business continuity arrangements.
Our staff told us they generally felt comfortable and connected,
well-informed and safe.

We are also mindful of the damaging impact the virus is having on
others, especially our customers. We have made extra effort to be
responsive to their circumstances and flexible wherever possible.

Across our business we offered relief by freezing fees for some
services and lengthening payment periods for others. We also
extended some market-facing project delivery dates to ease
resourcing pressures and allow customers to focus on their
immediate operations during the uncertainty.

ASX Annual Report 2020 Chairman's letter

Chairman's letter continued

The highest profile example was our CHESS replacement project. In
mid-2020 we consulted users on a proposed new implementation
timetable, moving the target start date from April 2021 to April
2022. The extra 12 months is to give all participants, including ASX,
more time to manage the ongoing impact of COVID-19 and complete
their readiness activities. We are in the process of reviewing all
of the consultation feedback prior to finalising the new schedule.

We are making good progress on the project, which renews core
technology and builds a modern digital platform that will benefit
the whole industry. The COVID-19 crisis has underlined why the
implementation of the next generation of technology for Australia’s
equity market is a priority.

We continue to listen to all of our stakeholders as we work through
this together. That includes our regulators – the Australian Securities
and Investments Commission (ASIC) and the Reserve Bank of
Australia (RBA) – with whom we worked closely during the crisis;
not just on the replan for CHESS but on a range of other matters
too. This included the package of temporary capital raising relief
and updated guidance to assist companies manage their disclosure
obligations to help investors stay informed during the pandemic.
ASX offered companies the rule flexibility to deal with urgent
financial needs, while ensuring fairness and protection for retail
investors. The measures helped Australia’s capital markets continue
to perform well.

A market sector that performed particularly well during the
pandemic was technology. In February, we launched the S&P/
ASX All Technology Index. The development of a listed technology
sector has been one of ASX’s signature initiatives. The index has
enhanced the profile and understanding of listed tech companies in
Australia, and increased opportunities for investors. A vibrant tech
sector helps drive innovation and strengthens the attractiveness
of our capital markets.

‘ Having a reliable, well-
capitalised and trusted
company at the heart of
Australia’s financial markets
has never been more
important.’

Rick Holliday-Smith

Your Board is conscious of the role ASX plays within Australia’s
financial community and the responsibilities that come with that
to our stakeholders.

I thank my Board colleagues for their commitment in FY20, as I do
the whole ASX team for its hard work and performance over the
last 12 months.

The challenges that arose in the past year are not over, and may
extend for some time to come. I am confident ASX will continue to
manage them successfully and is positioned well for the recovery.

Board leadership

Thank you for your support.

Quality leadership is critical, especially during crises. We work hard
to ensure the ASX Board is match fit, with the right mix of skills,
diversity and experience. Despite the challenges of COVID-19, your
Board has not lost sight of ASX’s direction and purpose.

We were pleased to welcome Rob Woods to the ASX Board in
January 2020. He has over 30 years’ experience in financial markets,
and a deep understanding of ASX’s businesses and regulatory
obligations, having served on our Clearing and Settlement boards.
Rob will stand for election at ASX’s Annual General Meeting (AGM)
on 30 September 2020.

Retiring from the Board after the AGM will be Peter Warne. Peter
joined the ASX Board in July 2006 and has made an outstanding
contribution over 14 years. I thank him for his expertise, wisdom
and dedication to the company and its stakeholders.

Rick Holliday-Smith
Chairman

ASX Annual Report 2020 Chairman's letter continued

CEO's year in review

Dear fellow shareholders,

The last 12 months proved to be – to use a word we’ve heard a lot
recently – unprecedented. It may seem long ago, but this time last
year, Australia was experiencing one of its most severe droughts of
the last 100 years. We then headed into one of the worst bushfire
seasons in recent memory. Parts of the country, Sydney in particular,
were then subjected to intense and damaging rains.

And just when we thought things couldn’t get any worse, the world
was struck by COVID-19.

Reflecting on this past year, I am inspired by the resilience, courage
and generosity of my fellow Australians. While we don’t want a
repeat of the last 12 months any time soon, as a nation we do rise
to a challenge.

The foreseeable future will present many challenges – not just for
ASX, but for the Australian community. However, with the right mix
of people, technology and tenacity, I am certain we will overcome
what lies ahead.

FY20 financial performance

Notwithstanding the difficulties of the last 12 months, ASX proved
its strength and resilience by reporting solid financial results for
the 2020 financial year (FY20).

ASX Annual Report 2020 CEO's year in review

Operating revenue (as per ASX's segment reporting) increased
by 8.6% to $938.4 million, driven by growth in each of our four
core businesses:

• Listings and Issuer Services delivered a 7.3% rise in revenue

supported by higher secondary capital raisings

• Derivatives and OTC Markets was up 4.5% due to strong growth

in Austraclear

• Trading Services lifted by 11.5%, underpinned by greater cash
market trading activity and higher usage of information and
technical services

• Equity Post-Trade Services revenue grew 17.0%, in line with

higher cash market trading activity.

Expenses (as per ASX's segment reporting) rose 9.0%. This is above
guidance by 1.0% as a result of heightened costs associated with
COVID-19, in particular higher variable costs and ASIC fees attached
to market activity.

Capital expenditure was $80.4 million, reflecting our ongoing
investment to refresh ASX’s technology capabilities.

We also reduced the carrying value of our shareholding in trading
venue Yieldbroker by $15.2 million. While we remain committed to
Yieldbroker and the electronification of fixed income markets, the
pace of change has been slower than expected.

Earnings before interest and tax (as per ASX's segment reporting)
for the period was $652.2 million, up 8.5% on the prior year, enabling
a 4.5% increase in total ordinary dividends paid in FY20.

Responding to a once-in-a-generation
pandemic

ASX operates at the heart of Australia’s financial markets. It is vital
that our services are available, reliable and resilient at all times, and
most especially during periods of heightened activity.

Across the period, ASX’s systems remained open and operational,
while managing record trading volumes and volatility levels. The fact
that this was achieved with 95% of our staff working from home, is a
credit to the tirelessness and expertise of our people, and validates
the work done to strengthen ASX's foundations.

Here are some of the records across the period.

• During March 2020, the S&P/ASX 200 recorded eight of its 10

biggest intraday moves since its launch in 2000, with the largest
being 13.7% on Friday 13 March.

• Equities trading volumes also peaked on 13 March 2020, when

5.18 million trades transacted through ASX, double the previous
pre-COVID-19 daily record set in August last year.

• Futures volumes set a new high in March too, exceeding the

previous monthly record set in March 2019 by 11%.

• $169 billion of bonds were settled in Austraclear on 20 March
2020, surpassing the previous pre-COVID-19 record set on 15
March 2019 by 29%.

• February 2020 saw a new monthly record of 11,327 market

announcements; more than 4,000 were price sensitive.

CEO's year in review continued

• ASX-listed companies raised $31 billion in secondary capital

during the June quarter 2020, second only to the amount raised
in the December quarter 2009.

• There were 3.6 million unique visitors to ASX's website in

March 2020, with a one-day record peak of 363,241 visitors on
16 March.

Supporting our listed companies

ASX provided a package of temporary relief and updated guidance
to assist listed companies raise capital and manage their disclosure
obligations. It was also designed to help investors remain informed
during this challenging time.

These measures included:

• Temporary emergency capital raising measures to enable

companies to raise urgently needed capital, while requiring
follow-on offerings to allow retail shareholders to participate

• Practical guidance on managing disclosure obligations, includ-
ing earnings guidance and decisions not to pay a dividend or
distribution

• Support for ASIC’s ‘no action’ position on AGMs and financial

reporting requirements

• Relief for ASX/NZX dual-listed entities to facilitate the oper-
ation of waivers announced by the New Zealand Financial
Markets Authority.

ASX also provided relief on annual listing fees by allowing payments
to be made by instalment.

‘ ASX has a long history of being
at the forefront of the global
exchange industry in the
adoption of technology for the
benefit of customers, investors
and regulators.’

Dominic Stevens

Strengthening our operating resilience

ASX has now completed our multi-year Building Stronger
Foundations enhancement program. Throughout this program,
we worked closely with our regulators, ASIC and the RBA, which
were engaged and constructive.

ASX-listed companies raised a total of $51.4 billion (initial and
secondary capital combined) from 1 March to 30 June 2020. This
was at the height of the pandemic, and saw ASX lead the exchange
world in its ability to facilitate urgently needed capital quickly, fairly
and cost effectively. The Australian market demonstrated similar
agility during the GFC.

We’ve upgraded and consolidated ASX Net from six independent
networks that support various products and services, to one
integrated system that improves the network’s reliability and
speed. To give a sense of its importance, the RBA’s RITS high-value
settlement and transfer system that supports Australia’s banking
sector travels over ASX Net.

Throughout the challenging period ASX worked closely with ASIC,
supporting steps to ensure market stability and resiliency. We
will continue to engage with the regulator and the industry in the
interests of the Australian market overall.

Our new secondary data centre is fully operational and is a significant
upgrade to the facility that supported the exchange for more than
20 years. The new facility enables a lower risk failover and backup,
and will better align with our primary data and liquidity centre.

Building an exchange for the future

Despite the headwinds the pandemic blew our way, we remained
committed to our customer-focused and technology-driven strategy:

• Customer-focused because we see there are many areas where
we can help our customers grow their businesses or make their
operations more efficient

• Technology-driven as we believe the digital, contemporary and
open nature of the technology we’re building will power our
ability to add value for our customers.

ASX has a long history of being at the forefront of the global
exchange industry in the adoption of technology for the benefit of
customers, investors and regulators.

We are transforming our entire technology stack, from the
operational databases and communications infrastructure we use,
to the way we deploy distributed ledger, cloud, big data and AI tools.

ASX has completed the second and penultimate phase of its
enhanced corporate actions straight-through-processing (STP)
project. All corporate action event notifications are now published
in the ISO 20022 global messaging standard.

ASX is one of the few securities exchanges in the world with a fully
functioning, end-to-end corporate action STP notification ability in
the ISO 20022 format.

Completion of the STP project means investors receive issuer
data more quickly, with fewer errors, enabling more informed and
timely investment decisions. Listed entities benefit from more
efficient and timely processing of their shareholders’ corporate
action instructions. A validation feature also helps them comply
with the ASX listing rules.

Intermediaries benefit from international standard data sets
allowing easier implementation and standardisation of their own
systems and services for their customers.

ASX Annual Report 2020 CEO's year in review continued

CEO's year in review continued

ASX is also in the final stages of upgrading the ASX Trade equities
trading platform. The platform will offer improved system
performance and the ability to introduce new functionality
more efficiently.

And our cyber resilience program continues to be enhanced each
year. This not only gives comfort to ASX and our regulators, but also
to our customers who rely on the safety and security of ASX services.

Focusing on our sustainability

In FY20, we updated our sustainability framework. This new
framework sharpens our focus on how we create long-term value
for all stakeholders. It brings together the activities we undertake to
manage our non-financial risks, operate as a responsible corporate
citizen and influence our external environment.

ASX’s ability to create long-term value is founded on the level of trust
in our actions, the resilience of our operations and the efficiency of
our markets. It is bolstered by our risk management expertise and
our experience as a regulated provider of critical financial market
infrastructure.

Our new framework reinforces the importance of good corporate
governance, engaging our people, investing in risk awareness and
training, and being a responsible corporate citizen. It also captures
the value we create for the industry via our market oversight
activities and investment in innovation.

For more information, please see the Sustainability section starting
on page 20 of this report.

Improving the experience and
delivering value for our customers

New website and customer portals

In FY20, we launched our new website (which will operate in
parallel with our existing website for a time), and have upgraded
and consolidated our multiple web presences to make them fresher
and more usable.

With an average of almost 180,000 unique visitors each day, our
website is one of the most prominent and trusted aspects of our brand.

We now offer customers a digital home that reflects the contemporary
and innovative nature of our business, and ASX’s place as a leading
and respected global exchange.

Launch of the S&P/ASX All Technology Index

Mirroring the importance of technology to ASX as a company,
there has been a steady rise in technology companies listing on
our exchange in recent years.

Our new S&P/ASX All Technology Index, with the code XTX, launched
earlier this year. It enhances the profile and understanding of the
tech sector in Australia. It also increases opportunities for companies
to access capital, and investors to gain exposure to some of the
world’s most exciting new enterprises.

Throughout the recent crisis, technology has been the best
performing sector on ASX, highlighting the growing strength and
attractiveness of listed technology companies within our market.

ASX Annual Report 2020 CEO's year in review continued

Exploring adjacencies

ASX seeks opportunities that leverage our skills into adjacent
areas. The execution of this strategy has gained momentum over
the past year, and our plans could produce new revenue streams
in the medium term.

While there is much work still to do, the CHESS replacement project
will provide a contemporary clearing and settlement solution for the
Australian equity market. The optional distributed ledger technology
(DLT) that is available with the new system, will generate value
by helping participants, software vendors, service providers and
fintechs to innovate by leveraging the distributed nature of the
technology. This will allow them to develop new functionality for
use in the cash equities market or to develop new applications for
use outside of clearing and settlement.

Our DataSphere platform is being used internally and is providing
a ‘big data’ technology solution for ASX. Data and workspaces can
now be provided externally to customers. We are also looking to sign
up external data partners to join the initiative. Importantly, similar
to CHESS replacement, ASX is building open technology that can
be better accessed and leveraged by our customers.

Finally, we are using ASX’s payments expertise to build a new
solution in the growing e-conveyancing market, called Sympli. Here,
ASX is the challenger rather than the incumbent. We believe Sympli
is a superior solution that will integrate better with the banking and
conveyancing market.

There is strong support from the Australian Competition and
Consumer Commission (ACCC), federal and state governments, and
industry associations to help facilitate competition in this sector. We
are connected with the RBA, and almost all of the state registrars
and revenue offices. However, the Banking Royal Commission and
COVID-19 have slowed our progress connecting to the major banks.

Nevertheless, Sympli has completed both financial and non-financial
conveyancing transactions, and expects to connect to all the major
banks in the coming financial year.

Update to CHESS replacement timetable

In mid-2020 ASX consulted on an updated CHESS replacement
timetable in response to the COVID-19 pandemic. This was to give
the industry more time to focus on day-to-day operations in this
environment of heightened volatility and activity levels.

The replan was also in response to user feedback on timing,
requested functionality changes and the need for ASX to complete
aspects of its own readiness.

The aggregate effect of these considerations produced a proposed
revised timetable with a new target go-live date of April 2022 –
12 months beyond the original proposed date. Consultation with
CHESS users has now been completed and we are reviewing the
feedback received. The early findings from the consultation was
pleasing, with over 90 per cent of CHESS users saying they can
meet the new schedule.

CEO's year in review continued

Throughout this project, consultation and collaboration have been
deep and wide. For example, in FY20 ASX held 165 bilateral meetings
with stakeholders, 14 focus groups, seven Implementation and
Transition working group meetings, nine Connectivity and Integration
working group meetings, nine Technical Committee meetings and
received on average over 1,500 stakeholder emails to the dedicated
CHESS replacement mailbox. I thank all our stakeholders for their
input and support.

This is a world-leading project. At its core, the new CHESS system
will deliver existing services, new and enhanced functionality, high
availability, reliability and performance, and will underpin Australia’s
financial markets for the next decade and beyond.

We are approaching an important and exciting phase of the project.
While it is complex and the challenges created by COVID-19 remain,
ASX is focused on delivering the solution in a safe and timely manner.
We will continue to listen to our stakeholders as we work through
this together.

Looking ahead

ASX’s investment in technology and risk management over the past
three years has strengthened our ability to deal with the unexpected.
Navigating through COVID-19 has reaffirmed our technology-driven
growth strategy, underpinned by strong operations, which strives
to make business easier for customers and seeks opportunities that
benefit ASX and our stakeholders. Consistent with our history, ASX
continues to position itself at the forefront of innovation, digitisation
and efficiency within our industry.

It’s likely that we will continue to see volatility across our markets
in the coming financial year. Together with regulators, other
exchanges, participants and investors, it is ASX’s mission to ensure
that whatever challenge presents itself, we maintain the integrity
and attractiveness of Australia’s financial markets.

My thanks to our employees for their hard work and to our customers
for their loyalty throughout the year. And to you, our shareholders,
thanks for your ongoing support.

Dominic Stevens
Managing Director and Chief Executive Officer

ASX Annual Report 2020 CEO's year in review continued

OPERATING
AND FINANCIAL
REVIEW

Operating and financial review

The Operating and Financial Review outlines
ASX’s activities, performance, financial position
and main business strategies. It also discusses the
key risks and uncertainties that could impact on
ASX and its subsidiaries (together referred to as
the Group), and its ability to achieve its financial
and other objectives. The statements are
prepared and audited in accordance with the
Corporations Act 2001 and Australian Accounting
Standards, which comply with International
Financial Reporting Standards (IFRS).

Business model and operating environment

ASX operates a significant part of the infrastructure that supports
Australia's financial markets. ASX is a multi-asset class and
integrated exchange group. The Group operates markets for cash
equities and derivatives, and provides a full service offering including
listings, trading, clearing, settlement, registry, and information and
technical services.

The business is conducted through a number of regulated legal
entities. ASX holds market operator licences and clearing and
settlement licences to undertake its activities. ASX is subject to
oversight by the Australian Securities and Investments Commission
(ASIC) and the Reserve Bank of Australia (RBA).

ASX’s activities and revenues are grouped into four key businesses,
being Listings and Issuer Services, Derivatives and OTC Markets,
Trading Services, and Equity Post-Trade Services. These are each
discussed separately later in this report.

In March 2020, COVID-19 was declared a global pandemic. Market
conditions deteriorated and the RBA lowered the cash rate target
to 0.25 percent to help reduce economic and financial disruption.
Large movements in equity prices and a low interest rate environ-
ment led to ensuing speculation and heightened market activity and
volatility. Throughout, ASX's operating functions remained resilient
and reliably managed the impacts of these extraordinary events.

Group financial performance

Net profit after tax

Statutory net profit after tax (NPAT) for FY20 increased 1.4% on the
prior comparative period (pcp) to $498.6 million. Statutory earn-
ings per share (EPS) were 257.6 cents, up 1.4% from the previously
reported EPS of 254.1 cents per share, reflecting the growth in
earnings. FY20 included the non-cash impairment of $15.2 million
on the Group’s investment in Yieldbroker. There were no significant
items in FY19.

The Group’s underlying NPAT, which excludes significant items,
increased 4.4% on the prior year. Underlying EPS was up 4.4%.

Dividends

The Board’s dividend policy is to pay 90% of underlying profit after
tax. This is reviewed each time the Board considers payment of
a dividend. Underlying profit reflects NPAT adjusted for any
significant revenues or expenses such as those associated with
major restructuring, transactions or other material items that are
not commonly recurring.

ASX paid an interim dividend of 116.4 cents per share in March
2020 and directors have determined a final dividend of 122.5 cents
per share. Total interim and final dividends per share for FY20 of
238.9 cents are 4.5% higher than the prior year, and reflect the
increase in underlying earnings. The final dividend will be paid on
30 September 2020.

FY19 included proceeds from the sale of ASX’s investment in IRESS
Limited paid to shareholders as a special dividend of 129.1 cents
per share.

Statutory net profit after tax ($million)

426.2

434.1

445.1

492.0

498.6

FY16

FY17

FY18

FY19

FY20

Statutory earnings per share (EPS) (cents)

220.4

224.5

230.0

254.1

257.6

FY16

FY17

FY18

FY19

FY20

Dividends per share (DPS) (cents)

99.0

99.1

FY16

99.8

102.0

FY17

Interim

109.1

107.2

FY18

Final

129.1

114.3

114.4

FY19

Special

122.5

116.4

FY20

ASX Annual Report 2020 Operating and financial review

Operating and financial review continued

Summary income statement for the year ending 30 June 2020

Based on the Group segment reporting note

Operating revenue

Operating expenses

EBITDA
Depreciation and amortisation

Total expenses

EBIT
Interest and dividend income

Underlying profit before tax

Tax expense

Underlying profit after tax
Significant items after tax¹

Statutory profit after tax
Statutory earnings per share (cents)¹

Underlying earnings per share (cents)

Dividends per share (cents)
¹ Refer to note D2 of the financial statements for further detail.

Operating revenue

FY20
$m
938.4

(235.7)

702.7
(50.5)

(286.2)

652.2
83.8

736.0

(222.2)

513.8
(15.2)

498.6
257.6

265.4

238.9

FY19
$m
863.8

(214.8)

649.0
(47.8)

(262.6)

601.2
103.9

705.1

(213.1)

492.0
-

492.0
254.1

254.1

228.7

Variance fav/(unfav)

$m
74.6

(20.9)

53.7
(2.7)

(23.6)

51.0
(20.1)

30.9

(9.1)

21.8
(15.2)

6.6

%
8.6

(9.7)

8.3
(5.6)

(9.0)

8.5
(19.3)

4.4

(4.3)

4.4
-

1.4
1.4

4.4

4.5

Operating revenue as reflected in the Group's segment note in FY20
increased 8.6% on the pcp to $938.4 million.

Cash Market
Settlement
7%

Overall, COVID-19 impacted each of our four businesses differently,
with the net impact positive.

Cash Market
Clearing
7%

Listings
19%

The key components of operating revenue:
• Listings and Issuer Services revenue increased 7.3%, as a result
of strong secondary capital raisings, elevated CHESS holding
statement volumes, and an increase in the use of the Primary
Market Facilitation (PMF) service.

• Derivatives and OTC Markets revenue increased 4.5%,

reflecting higher futures and OTC clearing revenues, and
higher transactions and balances for Austraclear services.

• Trading Services revenue increased 11.5%, resulting from

heightened cash market trading activity and growth in demand
for information services.

• Equity Post-Trade Services revenue increased 17.0%, reflecting

higher value cleared and settlement messages.

Cash Market
Trading
7%

Equity
Post-Trade
Services
14%

Listings and
Issuer Services
25%

Information
Services
11%

Trading Services
27%

Derivatives and
OTC Markets
34%

Issuer Services
6%

Equity Options
2%

Technical
Services
9%

Austraclear
6%

Futures and
OTC Clearing
26%

Variance fav/(unfav)

Listing and Issuer
Services

Derivatives and
OTC Markets

Trading Services

Equity Post-Trade
Services

FY20
$m

237.1

317.6

256.3

127.4

FY19
$m

221.0

304.0

230.0

108.8

16.1

13.6

26.3

18.6

Total operating
revenues
FY20 revenue classification includes the allocation of ‘other revenue’ into
respective revenue lines. Prior period comparative balances have been
restated accordingly.

938.4

863.8

74.6

7.3

4.5

11.5

17.0

8.6

12 ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

Total expenses

Net interest income

As reflected in the segment note, total expenses (excluding signifi-
cant items) increased 9.0% to $286.2 million. This is above previously
provided guidance by 1.0% as a result of heightened expenses
attached to COVID-19, namely heightened variable and ASIC fees
attached to market activity, and lower annual leave taken by staff.

Variance fav/(unfav)

Staff

Occupancy

Equipment

Administration

Variable

ASIC levy

Operating expenses
Depreciation and
amortisation

FY20
$m
145.4

9.7

35.4

26.0

10.7

8.5

235.7

50.5

FY19
$m
127.7

17.9

30.7

22.5

8.4

7.6

$m
(17.7)

8.2

(4.7)

(3.5)

(2.3)

(0.9)

214.8

(20.9)

47.8

(2.7)

Total expenses

286.2

262.6

(23.6)

%
(13.8)

46.0

(15.1)

(15.6)

(28.5)

(12.9)

(9.7)

(5.6)

(9.0)

• Staff costs increased 13.8% to $145.4 million. This reflects the
impact of expanding headcount to support both project and
'licence to operate' initiatives, coupled with the annual remu-
neration review and lower annual leave taken as a result of
COVID-19. The average full-time equivalent (FTE) headcount
increased to 709 compared to 650 in the pcp.

• Occupancy costs decreased 46.0% to $9.7 million. With the

adoption of AASB 16 Leases (AASB 16), certain leasing costs,
previously captured within rental expense, are now split
between depreciation and interest on the income statement
resulting in a reduction in group occupancy costs. Other occu-
pancy costs were broadly flat on pcp.

• Equipment costs increased 15.1% to $35.4 million, including

additional licence subscriptions for cyber security and digital
initiatives.

• Administration costs increased 15.6% to $26.0 million, due to a
number of factors including higher consulting costs associated
with initiatives, a Red Cross Disaster Relief donation and higher
insurance premiums.

• Variable costs increased 28.5% to $10.7 million, due to higher

postage costs and elevated volumes of CHESS statements amid
heightened market activity due to COVID-19.

• ASIC supervision levy increased 12.9% to $8.5 million, due to fee

revisions provided during 2H20 and heightened activity.

• Depreciation and amortisation expenses increased 5.6% to

$50.5 million, primarily reflecting the recognition of right-of-use
assets following adoption of AASB 16.

Capital expenditure

The Group invested $80.4 million in capital expenditure during
the year, compared to $75.1 million in the pcp. This is in-line with
previously provided guidance.

FY20 expenditure included the continued investment in distributed
ledger technology (DLT) for CHESS replacement, ASX Trade plat-
form upgrades, the new secondary data centre, as well as various
initiatives to strengthen resiliency of ASX services by continuing to
contemporise platforms.

ASX Group net interest
income

Net interest on collateral
balances

Total net interest income
Dividend income

Interest and dividend
income

FY20
$m

FY19
$m

Variance fav/(unfav)

7.6

23.4

(15.8)

(67.5)

76.2

83.8
-

83.8

75.4

98.8
5.1

0.8

(15.0)
(5.1)

1.2

(15.1)
-

103.9

(20.1)

(19.3)

Net interest and dividend income decreased 19.3% to $83.8 million.
Net interest consists of two components: interest earned on ASX’s
cash balances and net interest earned from the investment of
collateral balances lodged by participants.

Interest income on ASX’s cash balances decreased 67.5% to $7.6 million
due to decreased earning rates and the inclusion of lease finance costs
under AASB 16 from FY20. Net interest earned from the investment
of participant balances increased 1.2% to $76.2 million. This increase
was driven by a 31.2% increase in average collateral balances to
$10.7 billion, reflective of larger positions. Investment earnings on
this portfolio averaged 37 basis points compared to 51 basis points
in the pcp above the official overnight cash rate.

FY19 dividend revenue reflected amounts entitled prior to the sale
of ASX's shareholding in IRESS in February 2019.

Financial position

At 30 June 2020, the net assets of the Group were $3,720.4 million,
down 5.0% from 30 June 2019.

Summary balance sheet for year ending 30 June 2020

30 June
2020
$m

30 June
2019
$m

Variance increase/
(decrease)

Assets
Cash

858.1

333.1

Other financial assets¹

12,998.9

11,937.2

Intangibles
(excluding software)

Investments²

Right-of-use assets

Other assets³

Total assets

Liabilities
Amounts owing to
participants

Lease liabilities

Other liabilities

Total liabilities

Equity
Capital

Retained earnings

Reserves

525.0

1,061.7

(0.2)

9.3

74.9

413.8

2,325.9

2,326.1

85.6

74.9

1,071.4

76.3

657.6

17,414.8

15,330.3

2,084.5

12,677.2

10,801.0

1,876.2

81.1

936.1

612.9

81.1

323.2

13,694.4

11,413.9

2,280.5

3,027.2

603.8

89.4

801.7

87.5

(197.9)

1.9

157.6

8.9

(0.0)

12.1

100.0

62.9

13.6

17.4

100.0

52.7

20.0

(24.7)

2.2

Total equity
(5.0)
1 Includes other financial assets at amortised cost and financial assets at fair

3,720.4

3,916.4

(196.0)

value through profit or loss.

2 Prior period balance includes Digital Asset convertible note and accrued

interest reclassified in the above for comparative purposes.

3 Other assets include software.

ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

Investments

Listings and Issuer Services

Investments for the period were up $9.3 million or 12.1% on the
prior year. The increased investments in Digital Asset and Sympli
were partly offset by the impairment of Yieldbroker. Investments
are detailed below. The movement reflects the change in fair value
of these investments.

• 44.8% shareholding in Yieldbroker Pty Limited, down $15.5
million primarily representing the impairment treated as
a significant item. An unlisted entity licensed to operate in
electronic markets for trading Australian and New Zealand debt
securities.

• 8.2% shareholding in Digital Asset Holdings LLC, up $20.8

million as a result of a further USD 10 million investment and
USD 3.9 million convertible note to equity conversion. An
unlisted US domiciled technology entity. In July 2020, a further
USD 2 million investment was made bringing ASX's sharehold-
ing to 8.7%.

• 49.1% shareholding in Sympli, up $4.0 million representing

additional investment partly offset by share of equity loss. A joint
venture established to provide electronic property conveyanc-
ing and settlement services. In FY20, the Sympli joint venture
completed its first four-party e-settlement property transaction.

Right-of-use assets and lease liabilities

In accordance with AASB 16, ASX recognised assets and liabilities
for all leases with a term more than 12 months. As at 30 June
2020, $74.9 million of right-of-use assets and $81.1 million of lease
liabilities are recognised on the balance sheet, representing ASX's
right to use the underlying leased asset and obligations to make
lease payments respectively.

Amounts owing to participants

Amounts owing to participants were up $1,876.2 million or 17.4%
compared to the prior year, reflecting an increase in the open posi-
tions held in interest rate and equity index futures, as well as equity
margins and OTC derivative positions. ASX holds these collateral
positions to cover cash market and derivatives exposures as part
of its clearing operations.

The increase in participant balances results in a corresponding
increase in cash and other financial assets, as the balances are
invested by ASX.

Total equity

Total equity was down $196.0 million or 5.0%. This was primarily
due to payment of dividends, comprised of FY19 final dividend of
$221.3 million and special dividend of $249.9 million, as well as the
FY20 interim dividend of $225.3 million. This was partly offset by the
$498.6 million annual profit in FY20.

Business model and operating environment

ASX, through its listing rules and infrastructure, provides a facility for
companies to list, raise capital and have their securities publicly traded.

The Group provides a range of services to issuers of capital, including
the generation of issuer holding statements and other shareholder and
sub-register services. ASX also lists debt securities (including govern-
ment debt securities) and exchange-traded investment products.

The Group earns revenue from listed entities for initial listing, annual
listing, secondary capital raisings, and for issuer services. The main
drivers of revenue in this category include the:

• Number of listed entities and their market value

• Number and value of initial public offerings (IPOs)

• Level of corporate actions, such as secondary capital raisings

• Number of holding statements.

Results of operations

Listings and Issuer Services revenue was $237.1 million, up 7.3%,
reflecting the following.

• Annual listing revenue down 1.6% to $92.4 million. A decrease

in the number of billed listed entities resulted in lower revenue,
partially offset by annual fee changes.

• Initial listing revenue down 4.1% to $18.4 million. Historical

revenues accounted for $17.1 million and $1.3 million of revenue
related to a more subdued current period. In FY20, the number
of new listings decreased from 111 to 83 and the amount of
capital raised was $27.0 billion, down 27.9% on the pcp.

• Secondary capital raisings revenue up 9.7% to $56.1 million.
Historical revenues accounted for $44.4 million and $11.7
million of revenue related to strong secondary capital raisings
in the current period. In FY20 capital raised was $70.2 billion,
up 44.5% compared to the pcp, generating revenue of $68.2
million which is amortised over three years.

• Other listings revenue up 15.0% to $9.0 million. Exchange-traded
products (ETP) revenue increased as a result of strong growth in
funds under management (FUM) balances year-on-year. There
was also an increase in re-instatements, 13 compared to 11 in the
pcp, and initial and secondary debt raisings were up on pcp.

• Issuer services revenue up 25.0% to $61.2 million. With elevated
activity particularly since March, there was a notable increase
in the number of CHESS holding statements, up 34.9% and
other issuer-related CHESS messages compared to pcp.

Total capital raised ($billion)

78.6

56.0

81.7

86.0

97.2

FY16

FY17

FY18

FY19

FY20

Market cap of new listings

Scrip-for-scrip

Secondary capital

14 ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

Initial listing fee revenue contribution per year under AASB 15
($million)

17.3

19.2

18.4

$2.6

$1.3

15.2

13.8

• ETPs – in recent years ASX has increased the number and

range of ETPs. The value of ETPs listed on ASX increased 29.2%
to $65.8 billion in FY20

• Managed funds (mFund) – mFund allows investors to apply for

and redeem unlisted managed funds using their broker platform.
At 30 June 2020, there were 234 funds available on mFund with a
market capitalisation of $1,144.0 million, 22.1% up on the pcp.

$16.6

$17.1

Derivatives and OTC Markets

FY16

FY17

FY18

FY19

FY20

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Colours represent the year in which revenue was generated and the periods over which
it is amortised.

Secondary listing fee revenue contribution per year under
AASB 15 ($million)

41.3

44.2

48.4

51.2

56.1

$10.0

$11.7

$41.2

$44.4

FY16

FY17

FY18

FY19

FY20

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

Colours represent the year in which revenue was generated and the periods over which
it is amortised.

Business strategies

ASX has implemented a range of initiatives in recent years aimed at
enhancing the attractiveness of Australia as a place to list and raise
capital. These include updates to the listing rules and guidance notes.

ASX has continued to focus on expanding the number of foreign
companies and those from the technology sector listed on the
exchange. ASX has 264 foreign entities and 201 technology
companies listed (45 of the technology companies are also foreign).

Leveraging on the increasing number of technology companies listed,
ASX launched the S&P/ASX All Technology Index. The new index has
enhanced the profile and understanding of the technology sector in
Australia, and increased opportunities for investors.

In order to broaden the choice for customers, ASX has a range
of products and asset classes available for issuers and investors.
Some of the investment products that complement traditional
equities include:

• Bonds – ASX provides the ability for clients to trade Australian
Government bonds on exchange in the same way as equities
are traded

Business model and operating environment

ASX offers exchange-traded derivatives, including the trading and
clearing of futures and options on futures on interest rate, equity
index, agricultural and energy contracts, as well as exchange-traded
options over individual securities. The number of contracts traded
is the primary revenue driver.

Through the licensed ASX Clear (Futures), ASX provides central
counterparty clearing (CCP) of these exchange-traded derivatives
as well as clearing of over-the-counter (OTC) derivatives. This entity
provides risk management services supported by clearing participant
collateral and funds provided by both ASX and participants, which
are available in the event participants fail to meet their obligations.
Through a process known as novation, the CCP assumes the credit
risk of all trades centrally cleared and thus facilitates an efficient
and orderly clearing and settlement function for the market.

In recent months we have seen a notable decline in futures volumes
and have entered a period of historical low interest rates. The short
to medium-term outlook for futures activity is more than likely to
be subdued.

Austraclear provides settlement, depository and registry services
for debt securities and cash transactions. ASX’s model for debt
securities settles transactions on a trade-by-trade basis, which
provides for certainty of settlement. The number of transactions
is the main revenue driver.

Depository services are provided through the Austraclear central
securities depository (CSD). These securities consist of fixed income
securities including government bonds. Settlement of transactions
on these securities occurs through real-time gross settlement (RTGS).
The value of securities held is the main revenue driver.

Registry services are provided whereby Austraclear facilitates
security registration and the subsequent cash transfers associated
with the terms of the individual securities. The main drivers of registry
revenue are the number and value of securities held in the registry.

ASX Collateral service allows customers of ASX to utilise collateral
held in Austraclear to meet obligations to other customers or to
ASX’s clearing subsidiaries. The value of collateral balances managed
is the main revenue driver.

ASX's investments in Yieldbroker and Sympli are equity accounted
for within the Derivatives business line.

ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

Results of operations

Trading Services

Derivatives and OTC Markets revenue was $317.6 million, up 4.5%,
reflecting the following.

• Futures and OTC revenue up 4.1% to $242.9 million. Despite a

strong volume result for 1H20, futures activity declined post the
RBA cash rate cut in March, and volumes for the year ended up
down 1.5% on the pcp. However, revenue growth was supported
by an increase in the average futures fee with a change in the
product and customer mix. Value cleared through the OTC clearing
service was up 28.3% on the pcp.

• Equity options revenue down 7.0% to $18.5 million. Subdued
activity resulted in lower index options volumes, down 12.8%,
and single stock option volumes, down 10.7%.

• Austraclear revenue up 10.6% to $56.2 million. The increase
was primarily due to higher balances in the depository, and
increased transactions and growth in the ASX Collateral service
across the period. At 30 June 2020, the value of assets in the
ASX Collateral service was $43.4 billion compared to $22.4
billion in the pcp. However, average balances throughout the
year were up 23.0% on pcp to $26.9 billion.

ASX futures and options on futures contract volume (million)

137

142

156

172

169

FY16

FY17

FY18

FY19

FY20

Business strategies

Through ASX’s Austraclear platform, ASX delivers collateral
efficiency to customers with its collateral management service.
This service allows customers to utilise collateral held in ASX’s
Austraclear debt registry to meet obligations to other customers
(mainly repo transactions) or to ASX’s clearing subsidiaries.

The OTC Clearing service includes A$ and NZ$ interest rate swaps
and client clearing. Notional open interest at the end of June 2020
was $5.1 trillion, down 29.3% on the pcp.

In FY18, ASX invested in a joint venture, Sympli, which has been
established as an electronic lodgement network operator (ELNO).
Sympli is approved to operate as an ELNO in Victoria, Queensland,
South Australia and New South Wales. Integration with the RBA
and the first major commercial bank is complete.

Business model and operating environment

Trading Services comprises the trading of securities in the cash market,
as well as the information and technical services offered by ASX.

Cash market comprises the trading of equities, warrants,
exchange-traded funds and listed debt securities. The value of
turnover transacted on the ASX market is the primary revenue driver.

Information services includes the provision of real-time market data
for the cash and derivative markets, and the provision of indices,
company news, and index and other reference data. The main revenue
drivers are the number of end-users accessing real-time market
data and customer enterprise agreements for the provision of data.

Technical services consists of four main categories of services to
facilitate market connectivity and access to ASX and third-party
services by customers. These are:

• ASX's distribution platform, hosting of customer infrastructure
within the Australian Liquidity Centre (ALC) and ASX Net site
management

• Connection services to facilitate connectivity to the ALC

• ASX service access including access and sessions for market

data products and clearing and settlement systems

• Market access to trading sessions, liquidity cross-connects and

order entry, as well as trade gateways.

Revenue drivers for each category consist of the volume of services
used by customers, such as the number of connections to ASX
markets or the number of cabinets hosted in the ALC.

Results of operations

Trading Services revenue was $256.3 million, up 11.5%, reflecting
the following.

• Cash market trading revenue up 23.9% to $64.2 million.

The increase in revenue resulted from:

- Higher on-market trading value of $6.0 billion per day, up

29.0%. ASX’s share of on-market trading averaged 89.4% in
FY20, up 0.8% on the average of 88.6% in the pcp

- Auctions and Centre Point value was up 18.6% on pcp, both of
which have higher associated revenues. Auctions accounted
for 26.9% of the on-market value while Centre Point usage
was 7.9%. Together, these accounted for 51.9% of ASX trading
revenue, down from 55.7% in the pcp.

• Information services revenue up 10.7% to $106.8 million.

The increase in revenue resulted from:

- Increase in equities and futures market data distribution, and

fee changes to certain data products

- Increased index royalties from S&P, additional bank bill swap

rate (BBSW) distribution and annual fee increases.

• Technical services revenue up 4.4% to $85.3 million.

The increase in revenue was due to:

- Stable cabinet hosting with 326 cabinets at 30 June 2020
and growth in connections with the number of ALC cross-
connections up from 1,068 to 1,078.

16 ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

Business strategies

Cash market clearing

The Trading Services strategy is to provide innovative services to
maximise the attractiveness of trading on ASX, and to meet the
needs of a varied customer base. This includes providing leading
price discovery and liquidity access execution types, such as Auctions
and Centre Point.

The Centre Point order type is an example of ASX innovation
following feedback from end investors. The various Centre Point
order types provide customers with optionality and control over
how their orders are executed.

Auctions and Centre Point value traded ($billion)

78.9

209.4

107.0

237.0

106.5

262.1

120.4

409.9

113.0

334.0

FY16

FY17

FY18

FY19

FY20

Auctions

Centre Point

ASX DataSphere is ASX’s open data infrastructure solution offering
customers the ability to unlock value through insights and analysis
in a secure and governed ecosystem. ASX’s broad range of data
combined with other data sources, provides the ability to offer
additional data and analytics to a range of users.

Within the information and technical services offerings, ASX’s
strategy is predominantly driven by the needs of clients in equities
and derivatives. These requirements include the hosting of hardware
and connectivity, as well as low latency (high speed) services to
access information and ASX’s trading platforms.

Demand for information services is impacted by the level of market
activity and the number of users accessing ASX market data. ASX’s
services are tailored to meet changing customer requirements such
as electronic usage of data. ASX provides enterprise licences for
large users of data that offer pricing certainty to customers along
with standard monthly royalty plans.

ASX’s success in expanding its technical services follows the
investment in the ALC and communications network (ASX Net).
ASX will continue to invest in its product and service offerings in
its efforts to be the leading provider for the financial community.

Equity Post-Trade Services

Business model and operating environment

ASX’s clearing and settlement infrastructure provides risk
management services through its CCP and delivery-versus-payment
settlement of cash market trades. ASX’s post-trade operations are
backed by significant Australian-based capital and collateral, and
are overseen by Australia’s regulators. Through a process known
as novation, the CCP assumes the credit risk of all trades centrally
cleared and thus facilitates an efficient and orderly clearing and
settlement function for the market.

The CCP supports these risk management activities with collat-
eral lodged by clearing participants and ASX funds in the clearing
guarantee fund. These collateral and guarantee fund resources can
be called upon if a clearing participant does not meet its obligation to
finalise a trade that has been novated to the CCP. The main revenue
driver is the value of equity securities centrally cleared.

Cash market settlement

Cash market settlement is conducted through the Clearing House
Electronic Sub-register System (CHESS). This system registers the
title (ownership) of shares. ASX’s model for cash market settlement
maximises efficiency through the netting of settlement obligations
in each individual security and the netting of all payment obligations,
while minimising the risk of settlement failure. The main driver of
settlement revenue is the number of settlement messages, which
can be impacted by a number of variables including the level of
transactions and the netting efficiency.

Results of operations

Equity Post-Trade operating revenue was $127.4 million, up 17.0%,
reflecting the following.

• Cash market clearing revenue up 19.5% to $65.3 million.

This resulted from an increase of 28.8% in the value of trades
centrally cleared in the market in line with the higher total value
traded in the market. An average of $6.3 billion on-market
value was centrally cleared each day by ASX Clear and no calls
were made on the clearing guarantee fund in the current or
prior year. Elevated year-on-year activity resulted in a clearing
revenue rebate of $8.3 million, $2.5 million was paid in the pcp.

• Cash market settlement revenue up 14.5% to $62.1 million.

The number of messages increased year-on-year, with the main
message type 14.6% higher than the previous year. Strong year-
on-year activity resulted in a settlement revenue rebate of $6.1
million, with $0.9 million paid in the pcp.

Business strategies

ASX is the sole provider of cash market clearing and settlement
services to the Australian market.

ASX’s Equity Post-Trade strategy is to innovate to improve the
efficiency of clearing and settlement, so to allow our customers to
offer new products and services to benefit issuers and investors.

ASX's CHESS replacement project continues to progress. In June–July
2020, users were consulted on a proposed new implementation
timetable, moving the target start date from April 2021 to April
2022. The extra 12 months is to give all participants, including ASX,
more time to manage the ongoing impact of COVID-19 and complete
their readiness activities.

Further details on this initiative are included on page 8.

ASX Annual Report 2020 Operating and financial review continued

Operating and financial review continued

The table below describes ASX’s key risks and how we respond to them. For more information on ASX's approach to risk management
please see page 27 of this report.

Risk
Regulation,
market structure
and competition

The risk and its impact
ASX operates in highly regulated markets. Changes in regula-
tions and/or market structure can impact on ASX or its custom-
ers and the environment in which we operate.

How we are responding
• We regularly engage with government, regulators and indus-
try participants on market structure issues to promote the
best industry-wide efficiency outcomes.

Examples of how ASX’s business could be impacted include if:

• We engage with our customers to seek feedback on the

• Regulatory requirements were changed for certain important

services

• ASX’s products or services did not meet industry expectations

in terms of quality or value

• New competitors commenced operation in Australia.

Economic
environment and
market activity

ASX’s business can be impacted by the level
of market activity. Market activity levels are influenced by
economic performance, government policy, and general finan-
cial market conditions in Australia and overseas.

Slowing economic conditions or a lessening of general market
volatility can lead to a reduction in activity and revenues.

Examples of how ASX’s business could be impacted if there was
a slowdown in the Australian economy include:

• Fewer new listings

• Less secondary capital raisings

• Decline in the volume and value of equities traded

• Slowdown of growth rates associated with data products

and/or technical services.

quality and value of our products and services, and continually
look for ways to improve these.

• We monitor the performance of individual products and

services against those available elsewhere to support ASX's
ability to deliver a strong value proposition.

• We consider the impact of ASX-driven change on our

customers.

• We invest in technology enabling us to stay at the forefront of

innovative products and services.

• We constantly engage with government on the future direc-

tion of policy impacting our business.

• We continue to build resilience into our business model

through the diversification of revenue streams.

• We have been growing those services that have annuity-style

revenue streams.

• We have been focusing on enhancing our reputation as a

listing venue with emphasis on both technology and foreign
companies.

• We continually look to introduce new domestic and interna-
tional participants to our trading markets and clearing and
settlement facilities.

Operational
excellence

The resilience, continuity and quality of our operational
processes are critical to our ability to operate.

• We have people, processes, systems and controls in place

designed to meet our operational benchmarks.

This risk arises when failures in our people, processes, systems
or controls impact on the delivery of our products or services to
our customers.

The occurrence of such a failure may result in reduced customer
service, the inability to provide services, reduced revenues,
increased costs, fines or regulatory issues.

This category also captures the risk that our project execution
is poor, which could lead to a failure of our strategic projects to
deliver expected outcomes.

Technology
availability

ASX operates critically important financial market infrastruc-
ture which is expected to be open and available at all relevant
business times.

A risk to ASX arises where infrastructure and technology are
unreliable and have slow recoverability or have insufficient
capacity and where this cannot be quickly increased. Issues that
would heighten this risk are the prevalence of ageing infrastruc-
ture, systems or applications that are near their end of life, and
a significant increase in cyber attack activity.

The risk may result in reduced ability or an inability to deliver
ASX’s trading, clearing and settlement services, reduced
customer service, reduced revenues, unplanned remediation or
replacement costs or further licence conditions.

18 ASX Annual Report 2020 Operating and financial review continued

• We regularly assess how we can make improvements to the

resilience and reliability of our operational processes.

• We regularly consider the effectiveness of our controls.

• We monitor customer complaints for feedback on where we

could improve performance.

• We have project management disciplines in place to reduce

the likelihood that milestones are missed leading to delays in
key strategic projects.

• We have business continuity plans that are regularly tested.

• We have an incident management framework requiring that
timely attention be paid to rectifying incidents as they occur.

• We undertake resource planning and have staff training and

retention programs.

• We regularly monitor our systems availability against targets

and test to understand maximum throughput capacity.

• We monitor the health of critical systems and have contin-

gency plans in place for disruptions.

• We replace ageing technology in a phased and planned

manner. Recent examples include the replacement of SYCOM
with NTP, the announcement to replace CHESS with a DLT
solution, and upgrading our secondary data centre.

• We constantly engage with our vendor partners who provide

some of our critical systems and applications.

• We have a regular disaster recovery testing program in place.

• We have a cyber security strategy in place and continually

look to improve our capability.

Operating and financial review continued

Counterparty
default risk

This risk arises in our licensed clearing and settlement facilities
when a participant fails to meet its contractual obligations to
any of the facilities.

Depending on the size and complexity of the defaulting coun-
terparty, the default could lead to extremely volatile conditions
in global financial markets. This, along with ASX’s default
management strategy, will determine the size of any possible
loss sustained by ASX.

Investment returns

Financial losses may arise from investment decisions taken in
relation to the management of collateral balances received from
clearing and settlement activity, from the investment of ASX’s
own capital, or the clearing and settlement facilities' pre-funded
default capital resources.

ASX also makes equity investments in support of its broader
business objectives (e.g. Yieldbroker, Digital Asset, Sympli).

Reputation and
stakeholder
confidence

The ongoing success of ASX is highly dependent on its reputa-
tion for trust, integrity and resilience in everything that we do.

Reputation risk arises in a wide variety of situations, for exam-
ple, where ASX is perceived to have not acted with integrity or
failed to deliver resiliency in its activities.

Any outcome that causes detriment to this reputation has the
potential to damage ASX’s future business prospects through
reduced business volumes or regulatory impact or intervention.

• As part of our regulatory framework, ASX has the financial

resources in place to withstand the concurrent default of our
two largest participants under extreme but plausible market
conditions.

• We enforce minimum financial and operating criteria for

participants.

• We require participants to provide collateral in the form of

initial margin, and to make regular, frequent and at least daily
variation margin payments.

• We hold pre-funded default risk financial resources.

• We have technology and risk policies and procedures to
constantly monitor and manage counterparty exposures.

• We have default management strategies that are regularly

fire-drilled.

• We have recovery plans for extreme default scenarios.
• We have investment limits in place under which ASX is

required to invest its funds in highly rated counterparties,
with short-term maturities.

• We closely monitor financial markets activity, performance

and sentiment to inform investment decisions.

• We monitor the business strategy and financial performance

of companies that we have invested in, and follow the
prescribed accounting treatment in terms of impairment or
loss recognition should that be necessary.

• We aspire to be the world’s most respected financial

marketplace.

• Understanding the importance of our reputation and protect-

ing it is at the centre of everything we do.

• ASX considers the possible reputation risk in all its business

activities and decisions.

• We have refreshed our company values and focus on trust-

worthy behaviours.

• We have regular and open engagement with customers and
wider stakeholders to seek feedback on our performance.

• We have regular interaction with our regulators and govern-

ment at management, CEO and Board level to facilitate
thorough coverage of issues.

• We regularly engage with media so they understand and

report on the role ASX plays.

ASX Annual Report 2020 Operating and financial review continued

SUSTAINABILITY

Sustainability

Our approach

Continuing to generate long-term value for all our
stakeholders is central to ASX's ability to operate
at the heart of Australia's financial markets.
We understand that optimising our economic,
social and environmental outcomes requires
ongoing focus and effort.

Inherent within our vision to be the world’s most respected financial
marketplace is having trusted actions, resilient operations and a
commitment to providing efficient markets.

We recognise that as a market operator it is critical that we lead
by example, with good corporate governance and effective risk
management. We are committed to being a responsible corporate

Sustainability governance

citizen and having engaged and energised people. In addition, as a
provider of critical financial infrastructure we have a responsibility to
support the integrity of our markets and encourage innovation for the
benefit of all Australians.

In 2020, we refreshed our approach to Sustainability following our
work over the last three years to strengthen our technology and risk
management governance, resources and processes – fundamental
building blocks for the long-term success and sustainability of our
business. Updating our approach was a natural extension of this work.
It brings together the broad range of activities occurring within our
business to manage our non-financial material risks.

Our 2020 Sustainability disclosures have been prepared in accordance
with the GRI Standards: Core Option, and can be found throughout this
Annual Report and on ASX's website.

ASX Limited Board

Audit and Risk Committee

Responsible for corporate governance policies and risk management, including those relevant to sustainability.

Oversees and guides ASX’s sustainability approach, reporting requirements and management of environment,
social and governance (ESG) risk.

CEO and the Executive Committee
ASX’s Sustainability Working Group Develops and coordinates the implementation of ASX’s sustainability approach and initiatives across the Group.

Approves ASX's sustainability agenda and priorities, and is responsible for implementation.

Our focus areas

Our Sustainability approach supports the delivery of ASX’s strategy
and helps us manage our non-financial risks, which are important
to our business and stakeholders.

There are six focus areas, each one considered to be material to
ASX’s ability to create long-term value for all stakeholders.

They were identified following a review of global peers, industry
standards and benchmarks, including the Sustainability Accounting
Standards Board’s specified risks for securities and commodity
exchanges, and after engagement with internal stakeholders. This
process also included an assessment of each area’s importance to
our business and our ability to make a meaningful impact.

Encouraging innovation

• New products and services
• Supporting economic growth

Leading by example
with good governance

• Policies setting out protocols,
practices and accountability
• Policies articulating minimum
standards of behaviour

Engaging our people

• Community: giving, volunteering
and fundraising
• Diversity and inclusion
• Training, learning and development
• Wellbeing

M I C G
E

ECO N

R O W T H
MARKET O
I C I E NT MARKET
i an econom

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I

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h olders •
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G E M ENT
S I L I E
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R I S K M A

Supporting market integrity

• Education
• Market oversight

H
T
E

S
S
E
N
I
S
U
B

Adopting responsible
business practices

• Responsible resource use
• Supplier management
• Tax transparency

Managing our
long-term risks

• Data, fraud and security risk
• Systemic risk
• Technology risk

ASX Annual Report 2020 Sustainability

Sustainability continued

Meeting the challenges of COVID-19

The COVID-19 pandemic has changed the way
individuals, companies and societies live and
work. During this period, ASX has focused on the
health and wellbeing of its people, as well as on
the reliability and resilience of its infrastructure
for the benefit of our customers and Australia's
financial markets.

The challenging conditions of 2020 have demonstrated the calibre
of our employees and the resilience of our technology. In mid-March,
during a period of extreme trading conditions, 95% of our employees
transitioned to working from home at short notice – while keeping
our markets open, customers supported and regulators informed.
This has been maintained throughout the ongoing uncertainty
caused by the pandemic.

Trusted actions
Preserving the health and supporting the wellbeing of our people
are at the heart of how we are responding to COVID-19.

Over a weekend in mid-March 2020, we transitioned our workforce
to working from home. To assist with out of pocket expenses, a $200
(after tax) one-time payment per employee was made.

We are taking a conservative approach to managing the challenges
arising from this pandemic. A range of protective measures are in
place, including:

• All staff work from home except for critical onsite employees

• Daily staff roll-calls to understand working locations in

real-time

• Restrictions on international and interstate travel

• Sanitisation and social distancing measures at our locations

• Isolating overseas travellers and ‘close contact’ cases.

We have also undertaken surveys to assess employee wellbeing
and understand their flexibility requirements. An all-staff weekly
wellness and working from home communication has been
introduced and supported with a new online wellbeing library.

Additional training was also offered to managers and employees
in the areas of resilience, mental toughness and how to have
'courageous conversations'. And our CEO gives regular staff briefings
to provide updates and insights on the evolving situation.

Resilient operations
Providing our customers with open, reliable and functional
infrastructure is never more important than during periods of
crisis. In March and April 2020, ASX's systems proved their reliability
and resiliency by delivering uninterrupted access, enabling record
volumes and volatility to be transacted.

Across the business, ASX teams worked extended hours to support
the delivery of our services to customers and the functioning of our
markets. We have offered relief to our customers by freezing fees
for some services and lengthening the payment period for others.
In addition, we moved back market-facing project delivery dates
to ease resourcing pressures and allow customers to focus on their
immediate operations during the uncertainty.

Efficient markets

Regulatory support

ASX moved quickly to provide relief to its listed entities exposed to
COVID-19. Through class waivers and updated disclosure guidelines,
ASX enabled companies to raise urgently needed capital, while
ensuring fairness and protection for retail investors. Just as it did
through the GFC, the agility and efficiency of ASX’s rules framework
enabled Australia's capital markets to remain open and effective
during a period of extreme uncertainty.

Systemic risk management

ASX’s two clearing houses, ASX Clear and ASX Clear (Futures), play
important roles in reducing systemic risk in Australia’s financial
markets. This was critical in March and April 2020, during which
they were monitoring margin requirements on a near real-time basis.

Our two clearing houses successfully navigated these unprecedented
conditions, in part because of the initiatives taken to enhance their
robustness over the past three years. These included implementing
improved credit stress tests, increasing the frequency of margin
calls, and introducing new capital and liquidity margin models.

In FY20, we introduced new calibration on initial margin models.
This was to enable our clearing houses to cater for Australia’s
low interest rate environment and for periods of extreme market
volatility, such as experienced as a result of the COVID-19 pandemic.
These changes help ensure ASX’s clearing operations have sufficient
financial resources to support the stability of Australia's financial
services industry.

22 ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Leading by example with good governance

Why it matters?

Our approach

Practising good governance is central to ASX’s
ability to act with transparency, accountability and
effectiveness. This is ultimately in the best interests
of ASX and all its stakeholders.

Good corporate governance promotes stakeholder
confidence and is crucial for our ability to compete
for capital. Well-executed corporate governance
increases organisational accountability and drives
company performance. Delivering transparency and
good governance are the foundations of our ability
to earn and preserve the trust of our stakeholders.

ASX is committed to fulfilling its corporate governance obligations
and responsibilities in the best interests of the Group and its
stakeholders. We believe good governance policies and practices
provide the foundation for operating effectively in an accountable
and transparent manner. As a market operator, we need to lead
by example.

ASX undertakes regular reviews of our policies, practices and
reporting activities to ensure they are in line with regulatory
requirements, meet stakeholder expectations and support our
ability to deliver our business objectives.

Embedding and managing standards of behaviour

For more information regarding ASX’s approach to corporate
governance, please see pages 32 to 45 of this report, as well
as ASX’s website.

ASX’s Board-approved Code of Conduct, and Anti-bribery and
Corruption and Whistleblower Protection policies provide the
foundations for our culture of acting lawfully, ethically and
responsibly. These policies are detailed further on page 42
of the Corporate Governance section, and are available on
ASX’s website.

ASX periodically requires staff to attest to their understanding
of, and compliance with, ASX’s Code of Conduct and Anti-
bribery and Corruption Policy. They also undertake mandatory
compliance training in the areas of customer complaints, fraud
and dealing rules. In FY20, this training was completed by 99%
of all employees.

ASX also monitors and investigates any breaches of the Board-
approved policies. In FY20, remedial action was taken in relation
to nine code of conduct investigations, and there were no
reported instances of bribery or corruption.

ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Engaging our people

Why it matters?

Our approach

Our people are central to achieving ASX’s vision
of being the world’s most respected financial
marketplace. How we support and inspire our
workforce influences their commitment to ASX
and the quality of their work. Striving to have an
inclusive work environment, which cares for our
people’s wellbeing and provides them the
opportunity to achieve their professional
ambitions, contributes to our ability to retain and
attract talent. It also helps deliver tangible results,
such as improved financial performance.

We are committed to building an engaged, skilled and responsible
workforce guided by values and behaviours that support our
strategy. To do this, we:

• Make clear the behaviours we expect of employees through our

values-based culture

• Commit to protecting the confidentiality of employees who

wish to raise matters concerning the integrity of ASX

• Strive to create a diverse and inclusive workplace

• Have a strategy to attract and retain talent through our remu-
neration practices, and training and development programs

• Provide a safe and enjoyable work environment, with programs

to support employee wellbeing.

Values-based culture

Our workforce

Our people’s actions and decisions are as important as the outcomes
they deliver. That is why we are committed to building a values
-driven culture.

Our values are to:

Be Open, Be Trustworthy, Be Original, Be The Example.

We work to instil and reinforce a culture of acting lawfully, ethically
and responsibly, and know this is key to creating long-term value.
We are committed to maintaining a high standard of integrity and
stakeholder confidence.

Management and the Board monitor ASX’s culture and behaviour
with regular surveys and during annual performance reviews with
employees. Results are reviewed by the Remuneration Committee.

The below chart outlines the demographic split of the organisation
as at 30 June 2020.

Percentage of employees

45.6%

43.9%

43.7%

44.3%

8.0%

7.4%

2.7%

4.4%

Baby Boomers
(1945–1964)

Gen X
(1965–1979)

Millennial
(1980–1995)

Gen Z
(1996–)

FY19

FY20

24 ASX Annual Report 2020 Sustainability continued

In FY20, our permanent employee base increased by 5.5%. This was
a marked slowdown from the 17% increase in FY19, which saw the
hiring of resources to achieve our strategic initiative to uplift our
technology and risk capabilities.

In FY20, voluntary turnover remained consistent with the previous
year at 11%, which is slightly below the diversified financials industry
average of 12% as measured by the Australian-based Financial
Institutions Remuneration Group. Voluntary turnover is at a level
that allows workforce stability, while enabling ASX to introduce
new skills and talent.

Remuneration

ASX employees receive a competitive fixed remuneration package.
Subject to performance, employees also participate in a short-term
incentive plan, which rewards individual behaviour and performance
with ASX shares and/or cash (depending on the role). Details
about our remuneration practices and policies are included in the
Remuneration Report on pages 46 to 62.

ASX also provides employee benefits to all permanent and fixed-
term employees. Through the General Employee Share Plan, ASX
supports employees wanting to be shareholders by offering them
the opportunity to buy $1,000 of ASX shares at a 10% discount on
a pre-tax salary sacrifice basis. ASX covers the brokerage costs. In
FY20, this offer was accepted by 61% of staff.

Other benefits offered by ASX include salary continuance insurance,
an Employee Assistance Program, discount and corporate rewards
suite, and subsidised sport and social programs.

Sustainability continued

Managing performance and development

Diversity and inclusion

We believe that our sustainability is strongly supported by high
performing individuals who seek to improve their skills, performance,
and careers. Equally, we know that career development and training
are crucial to employee engagement and retention.

ASX’s performance management system helps all employees achieve
their best. Ninety-three percent of employees have documented
deliverables and behavioural goals. The system also encourages
the creation of developmental goals, performance conversations
and career progression.

Learning programs are available for all roles and levels within the
organisation via a global online learning platform. Additionally, ASX
partners with best-in-class learning providers to deliver tailored
development programs for leaders and team members.

Employee safety and wellbeing

Workplace health and safety

ASX is committed to the health and safety of all employees, visitors
and contractors. Employees are encouraged to identify and address
potential causes of workplace risk, injury and illness. Ongoing
consultation with employees is conducted through the Health and
Safety Committee, which meets on a quarterly basis. All employees
have access to all relevant workplace health and safety (WHS)
policies, risk assessments, procedures and statements, and complete
mandatory annual e-training on WHS obligations.

The Audit and Risk Committee receives quarterly updates on ASX’s
compliance with WHS laws. WHS performance is audited periodically
by an independent third party.

ASX’s FY20 lost-time injury frequency rate (the number of lost time
injuries per total hours worked) was below industry average at 1.41.

Prevention of harassment and discrimination

ASX works to prevent discrimination and harassment in the
workplace. Some of the highest scores in our 2019 staff survey
included statements about the intolerance of sex-based harassment,
and the belief that greater diversity leads to better business
outcomes. ASX has processes in place to monitor and address
discrimination, and employees must complete online training
periodically.

ASX Life Wellbeing Centre

The ASX Life Wellbeing Centre was launched at the annual ASX
Benefits Expo in February 2020. A centralised hub and app, it
provides free access to exercise workouts, information sessions
on mind wellness, and healthy recipes.

The annual ASX Benefits Expo brings together all benefit providers
to educate employees on what is available to them. Showcased
wellbeing benefits include the Wellbeing Centre, flu vaccinations, the
ability to purchase annual leave, Families at Work, corporate health
cover providers, corporate gym membership offers, ASX employee
networking groups, and the ASX Employee Assistance Program.

ASX knows that a diverse and inclusive work environment brings
performance benefits.

We support a workplace where employees have equal access to
career opportunities, training and benefits. We treat employees
fairly and respectfully and ensure they are not judged by their
gender, age, ethnicity, race, cultural background, religion, sexual
orientation, disability or caring responsibilities.

Gender equality

We have a target of 40% female representation for all management
levels. ASX is working towards achieving this target, with an overall
representation of females in management of 39% as at 30 June
2020. To encourage greater representation of women at all levels
in the organisation, we:

• Set gender diversity targets. Achievement against the targets is

monitored by the Remuneration Committee

• Undertake annual pay equity reviews and make adjustments

where a gap is identified

• Introduced gender-balanced shortlists and panels for interviews

when recruiting

• Embed gender equality targets as part of an executive’s balanced
score card and review the executive’s achievement against these
targets when determining their short-term incentive.

The following table captures ASX’s gender diversity targets and
performance at various levels within the organisation. In FY21, ASX
will continue to execute its gender diversity strategy by focusing
on leadership accountability, gender pay equity, workforce gender
composition, and talent pipeline and building capability, with the
aim of reaching its gender diversity targets across the Group.

Reporting

Diversity % of women

On the Board

Executive committee roles

Management executive roles

Management/team leader roles

Total % of women in
management roles
Professional/technical roles

Administrative roles

Across the entire organisation

Target

FY20

FY19

40%

50%

40%

27%

29%

36%

41%

39%

36%

82%

40%

30%

29%

42%

39%

38%

79%

41%

Work life balance

ASX’s commitment to support working families was particularly
evident throughout the COVID-19 period. A pulse survey in April
2020 generated results to help ensure our policies and benefits
remain relevant and effective.

The results told us, for example, that 48% of ASX’s workforce have
primary aged children or younger. Such insights are fundamental
in providing additional support and individual flexibility work
arrangements to our employees.

ASX Annual Report 2020 Sustainability continued

ASX in the community

Giving our employees the opportunity to contribute to society and
causes close to their heart is an important aspect of strengthening
employee engagement at ASX.

In January 2020, ASX increased paid volunteer leave to up to two
days; and up to 20 days per calendar year was introduced for
Emergency Services Leave. ASX also encourages employees to
make donations to their chosen charities through a workplace
giving program, with ASX matching the donations.

In FY20, the workforce giving program was utilised by 18.5% of
the ASX workforce and donations were made to 52 organisations.

The ASX Giving ENG had an immediate impact after launching in
November 2019. As the bushfires raged in late 2019, the group
developed a strategy to get people involved to complement the
ASX corporate donation. The result was 210 volunteers signing up
to help with bushfire relief, in addition to their current volunteering
activities. In addition, 160 koalas were adopted and 42 animal beds
were made in a staff-led workshop.

The group has provided valuable advice regarding ASX donations
to the Red Cross, the Rural Fire Service, and the Salvation Army
Disaster Relief, and on the decision to double volunteering leave
for all staff. It has also managed volunteering and donation
opportunities for the Wayside Chapel, Giant Steps working bee,
and Dress for Success charity.

At the 2019 JPM Corporate Challenge, following a combined effort from
ASX’s Sports Committee and ASX’s Giving ENG, ASX had a record turnout
with 135 employees running the course and raising funds for charity.

Sustainability continued

ASX’s parental leave policy provides 16 weeks’ paid leave for
primary carers and four weeks’ paid leave for secondary carers.
Superannuation contributions foregone during unpaid parental
leave are paid as a one-time contribution on return to work up to a
maximum of 36 weeks. In FY20, 70 people took 16 weeks' parental
leave, and 32.6% of these employees were male. Graduated return
to work options are available to support employees’ transition back
to the workplace.

ASX has also maintained its Breastfeeding Friendly Workplace
(BFW) accreditation since 2013.

ASX was recognised by Direct Advice for Dads as one of the ‘Best
Australian Workplaces for New Dads.’ This recognition reflects ASX’s
commitment to creating a flexible workplace through a range of
gender-neutral policies and strategies.

Empowering employees passionate about inclusion

ASX recognises the power and passion of its employees and strives
to support them through our employee-led networking groups
(ENGs). These groups, developed, chaired and run by employees,
raise awareness and provide education in areas its members are
passionate about.

ASX supports these groups through:

• The provision of resources and guidance on the governance,

structure and goals of the group

• Financial support to enable events, communication and raising

awareness of the aims of the ENG

• Executive sponsorship to advocate for the ENG and provide

mentorship to ENG leaders.

Two new ENGs were formed in FY20, joining ASX's Our Women’s
Network and Culture and Heritage groups. The first was ASX Giving,
which encourages and supports ASX employees to give to the wider
community. This was followed by the launch of Q at ASX (Q ASX) in
February 2020. This group is focused on inclusivity and awareness
of the LGBTIQ+ community. The group provides a voice for LGBTIQ+
employees, friends and supporters, and helps us continue to create
a diverse and inclusive culture at ASX.

Culture&Heritage@ASX events celebrate the diverse cultural
backgrounds, behaviours, thoughts and practices of our workforce.
From Diwali to Lunar New Year, and Bastille Day to Naidoc week,
these events foster understanding, awareness and inclusivity about
the rich and fascinating cultural mix of our employees.

In FY20, the Culture&Heritage@ASX ENG’s focus broadened to
include developing – not just celebrating – our diverse workforce.
This included a live panel event that discussed the benefits of
mentoring. Almost a quarter of ASX employees attended in person
or virtually.

As the second half of FY20 unfolded, the Culture&Heritage@ASX
ENG adapted to the new working from home arrangements by
taking their events online. Harmony Week was celebrated with
employees sharing photos of themselves dressed in orange as
they supported multiculturalism at ASX.

26 ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Managing our long-term risks

Why it matters?

Our approach

Risk management is a critical component of
ASX’s day-to-day operations and of our ability
to achieve long-term success. A focus on risk
management reduces the impact and likelihood
of negative outcomes. Thereby, it increases the
likelihood of ASX achieving its strategic and
financial goals.

ASX has a Board-approved Risk Appetite statement that describes
the types of risk we encounter in our business, along with our
tolerance for outcomes that impact on our stakeholders.

Complementing this is a governance structure, starting with the
Board and flowing down through executive level management
committees to individuals, which articulates roles and responsibilities
for managing risk within the organisation. This is underpinned by
the 3 Lines of Defence risk management framework.

How ASX manages its risks is outlined in the table on pages 18 and
19 of this report.

Strengthening our risk management

Ongoing focus on data security

In FY20, ASX continued to focus on strengthening its risk management
approach, and embedding its risk and compliance culture.

We continued to invest in new tools and processes that assist with
risk oversight, accountability and generating insights for more
effective risk management and decision-making. Across ASX, we
rolled out a new Governance, Risk and Compliance tool to enable
our businesses to more effectively manage their risk and compliance
responsibilities. We also implemented a new Incident Management
tool to enable ASX to better manage, and lessen the impact of,
incidents when they arise.

FY20 was the first full year of having our Risk Champions program
in place. Located throughout the business, ASX Risk Champions
play an active role in facilitating and coordinating risk management
responsibilities in their teams. They are integral to strengthening
ASX’s 3 Lines of Defence risk model, and helping support the risk
framework and strategy.

Following the adoption of a new Group-wide Risk Appetite statement
in 2018, we established organisational level Key Risk Indicators
for each of ASX’s businesses to improve the assessment and
monitoring of risk across the company. More recently, we developed
an Enterprise Compliance uplift plan to improve the identification,
assessment and management of our regulatory obligations.

Managing and protecting our data and that of our customers are
critical to maintaining trust and confidence in Australia’s financial
markets, and in strengthening the resilience of our operations.
Continually strengthening our cyber security risk controls, procedures
and prevention strategies is fundamental to protecting our systems
and customer information from fraud-related incidents and cyber
attacks, as they evolve in their sophistication and frequency.

Our dedicated information security and risk team continued to
implement and update the tools and strategies we use to manage
and monitor cyber attacks in FY20. Among these initiatives was the
implementation of a more contemporary email platform, which is
better equipped to deal with the growing volume of sophisticated
email threats. It also strengthens our cyber resilience through
advanced configuration, analysis and assessment capabilities.

Key to our efforts in mitigating the risk of cyber crime is the data
security training all ASX employees receive, particularly in relation
to recognising phishing emails and ransomware activities. We also
send out regular communications keeping employees informed of
the latest trends in email scams.

ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Adopting responsible business practices

Why it matters?

Our approach

Our stakeholders have growing expectations
about how we manage our supplier partnerships,
minimise our impact on the environment and
continue to be a respected corporate citizen.

ASX takes its responsibility as a corporate citizen seriously. We are
committed to doing the right thing by all our stakeholders and the
community in which we operate. We believe this is more than just
managing our business in accordance with all applicable laws and
regulations. It also includes being ethical and responsible in how
we conduct ASX’s operations.

Included within the 220 were our critical service providers and those
considered key to the functioning of our business. Of the sample of
suppliers investigated, approximately 42% were found in ASX’s view
to have made satisfactory disclosures of their modern slavery risks
through the publication of either a UK Modern Slavery Statement
or USA Human Trafficking Statement. ASX is following up with
those suppliers who had no or insufficient disclosures about their
modern slavery risks and actions, with a view to assessing and
addressing any such risks.

As part of ASX’s commitment to the policy and as required under
Australian modern slavery legislation, each year we will strive to
improve how we manage risk in our supply chain. As captured in
ASX’s 2020 Modern Slavery Statement, in the next 12 months, we
will commence a review of suppliers not assessed in FY20 and
enhance, for example, staff training materials so that ASX can
improve its understanding of its material suppliers and potential
modern slavery risks.

Tax transparency

As a responsible corporate citizen, ASX believes in paying its fair
share of tax. We are a signatory to the voluntary Tax Transparency
Code issued by the Australian Government Board of Taxation. Each
year we release our Tax Transparency Report as part of the suite of
annual reporting documents published on ASX’s website.

Tax is an important sub-segment of ASX’s robust corporate
governance and risk management framework. We take a low risk
strategy to managing our tax position by meeting all our taxation
obligations, adopting a conservative approach to the interpretation
of applicable legislation, seeking professional third party advice
when the potential taxation outcome is unknown, and not entering
into transactions or structures that have the primary objective of
reducing tax liabilities.

In FY20, ASX’s total tax contribution was $357.0 million.

Building supplier partnerships

We actively manage our supplier relationships
with a view to our supply chain being cost-
effective, innovative, risk managed, sustainable,
fair and ethical.

Supplier relationships

We seek to work with suppliers who share our commitment to
fostering responsible practices across all aspects of their business.
Material suppliers are required to comply with ASX’s Supplier Code
of Conduct. ASX's Supplier Code of Conduct sets minimum standards
across a range of topics including labour and human rights, diversity
and inclusion, health and safety, environment and sustainability.

Our primary supply chain includes the manufacture, delivery,
installation and maintenance of the technology required to operate
our infrastructure and provide our services. Our supply chain also
includes the suppliers of the various goods and services that
contribute to our general operation. These include our property
agents, insurance providers, external consultants, the companies
that provide our kitchen and stationery supplies, the manufacturers
of ASX uniforms and apparel, and our security providers.

During the reporting period, our global supply chain numbered
approximately 600 direct suppliers from a total of 17 countries,
comprising Australia, Belgium, Canada, China, the Czech Republic,
England, Hong Kong, Ireland, Israel, Luxembourg, New Zealand,
the Philippines, Singapore, South Africa, Sweden, Switzerland
and the USA.

A new Modern Slavery Policy

During the year, ASX introduced a Board-approved Modern Slavery
Policy. The policy articulates ASX’s commitment to identifying and
addressing risks of modern slavery occurring in ASX’s supply chain.

In FY20, we undertook an analysis of the extent and nature of
modern slavery disclosures for 220 of ASX's suppliers as part of
assessing the risk of modern slavery in ASX’s supply chain.

28 ASX Annual Report 2020 Sustainability continued

Sustainability continued

ASX and climate change

Optimising our resource consumption

As a technology-based infrastructure and services
company we do not believe ASX has a material
exposure to climate change risks. This reflects
our low reliance on energy, physical supply chains,
water and raw materials. Notwithstanding this,
we recognise that climate change presents
significant challenges and opportunities for
society and the global economy. We also know
we have our part to play, alongside government,
business, investors and the community.

Minimising our own carbon footprint

During FY20, we refreshed our approach to Sustainability and have
begun a process to better understand our own carbon footprint.
In FY21, we will continue to assess what we can do to manage the
carbon footprint of our operations.

As the market operator, ASX supports the important work of the
Task Force on Climate-related Financial Disclosures (TCFD). We are
reviewing how the TCFD recommendations may apply to ASX and
whether we will report under the recommendations.

FY20 environmental outcomes

FY19

FY20

% change from
prior year

0.0097 0.0087

-10%

0.0125 0.0077

-38%

Electricity and paper usage
Electricity GHG1 emission (excluding
ASX’s data centre hosting) per
$1,000 of revenue generated
(in t CO2-e2)
Paper usage (excluding CHESS
statements and notifications)
by headcount (tonnes)
1 Greenhouse gas (GHG) emissions.
2 Tonnes of carbon dioxide equivalent.

Greenhouse gas (GHG) emissions
Scope 1 – diesel and gas¹

Scope 2 – electricity

GHG emissions by activity
Scope 1 – Combustion of diesel and gas¹

Scope 2 – electricity (data centre hosting)
– electricity (remainder ASX's business)

Scope 3 – travel (business travel and commuting)
– paper usage (office)
– paper usage (CHESS statements and notifications)2

Paper usage
Office use

Managing our consumption of natural resources
is an important aspect of operating our business,
given the economic and environmental benefits
to be gained from optimising our consumption.

Energy usage

Approximately 30% of ASX’s reported electricity usage relates to
our direct operations. The balance is consumed by the customers at
our data centre, the Australian Liquidity Centre (ALC), which offers
ALC customers productivity efficiencies by being co-located with
ASX and each other.

In FY20, the electricity used by ASX's operations was largely
unchanged. The vast majority of ASX's own electricity usage relates
to the operation of the technology that powers Australia's financial
markets infrastructure.

ASX uses diesel to power the back-up generators at the ALC, our
primary data centre. These generators are utilised when there
is a power disruption to the ALC and as part of monthly back-up
testing procedures.

Paper usage

Since 2015, ASX’s own paper usage and the paper CHESS statements
are printed on, have been carbon neutral. In FY20, with the majority
of ASX's workforce working from home since mid-March 2020, ASX's
paper consumption declined 38% on the previous year.

Over the past 12 months, ASX has made significant progress
towards developing the ability for issuers to offer their shareholders
the option of electronic CHESS statements. This will create an
opportunity for the entire industry to reduce its paper consumption.

Unit
t CO2-e
t CO2-e

Unit
t CO2-e
t CO2-e
t CO2-e
t CO2-e
t CO2-e
t CO2-e

Unit
tonnes

2018
44.71

14,330

2018
45

10,031
4,299

660
0
0

2018
6.80

2019
29.56

15,065

2019
30

10,546
4,520

758
0
0

2019
8.12

2020
30.12

14,762

2020
30

10,334
4,429

514
0.12
0

% change from
prior year
2%

-2%

% change from
prior year
2%

-2%
-2%

-32%
NA
0

2020
5.46

% change from
prior year
-33%

CHESS statements and notifications
1 In FY20 this calculation has been updated to more accurately reflect actual emissions during the period. Past years have also been updated for consistency.
2 GHG emissions reported are inclusive of carbon offset. ASX commenced using 100% carbon neutral paper in 2015.

tonnes

103

34%

ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Supporting market integrity

Why it matters?

Our approach

Market integrity creates investor confidence,
which is vital to the long-term success of any
market place. A market's integrity reflects how
effectively it helps provide equal and timely
access to information. It also reflects its ability to
operate in a fair, orderly and transparent manner.

Enhancing market integrity

In October 2019, ASX released a major package
of listing rules changes, and new and updated
guidance notes. The changes were designed to
improve disclosures to the market, make the
listings rules easier to understand and comply
with, and enable ASX to better monitor and
enforce compliance with the listing rules.

The changes took into account feedback received through an extensive
public consultation process and were received positively.

ASX undertook a national roadshow providing an opportunity for
listing rule users to learn about the changes and ask questions. The
roadshow was held in each major capital city, and attended by more
than a thousand people representing issuers, financial intermediaries
and professional advisers.

ASX plays an important role in supporting the integrity of our
markets, alongside regulators, the media, investors, financial
intermediaries and professional service providers, such as proxy
advisers, lawyers and accountants.

ASX undertakes a broad range of activities to support the
integrity of our equity and derivatives markets. For our equity
market, this includes ASX’s listing rules and the ASX Corporate
Governance Principles and Recommendations. ASX's listing rules
are complemented by ASX's participant rules, which outline the
requirements of becoming a participant within ASX's markets or
a user of our facilities.

Supporting the transition to a low
carbon economy

ASX is playing an important role in supporting a smooth and orderly
transition to a low carbon economy by fulfilling our purpose as a
marketplace for capital to be allocated and risk to be assessed
and priced.

Company reporting and disclosure is central to how capital is
allocated and risk priced. ASX supports and promotes disclosure
of material risks, including climate change risks, so that investors
can make informed decisions when allocating capital.

In 2019, ASX endorsed the TCFD framework as best practice
disclosure for those companies that have a material exposure
to climate change risks. This endorsement has two important
outcomes. For companies, it encourages self-assessment of their
climate change exposure, which can have significant implications
for their ability to create long-term value. For investors, it allows
meaningful comparison across companies, sectors and segments
of the listed market.

FY20 listing rule
package numbers

5 improved

listing rule appendix forms

12 updated

guidance notes

6 new

guidance notes

48 submissions

2 years

taken into consideration

of consultation and development

30 ASX Annual Report 2020 Sustainability continued

Sustainability continued

TRUSTED ACTIONS

RESILIENT OPERATIONS

EFFICIENT MARKETS

Corporate
governance

People

Risk
management

Business
ethics

Market
oversight

Economic
growth

Encouraging innovation

Why it matters?

Our approach

As is the case for any business, innovation is
fundamental to ASX’s ability to deliver sustainable
growth. However, from our position at the heart
of Australia’s financial markets, we have the added
privilege and responsibility of supporting and
encouraging innovation across our industry for
the benefit of all Australians.

At ASX, innovation takes various shapes and forms. Whether it’s
through customers leveraging our infrastructure to drive efficiency
or build new products; the development of our own products and
services in new asset classes; or the promotion of technology as a
sector growing in importance in the Australian economy. Innovation
at ASX seeks to make business easier for our customers and our
industry more efficient.

S&P/ASX All Technology Index

Supporting industry innovation

ASX continued to support the evolution of Australia’s technology
industry with the launch of the S&P/ASX All Technology Index (All
Tech Index) in early 2020.

Developed in partnership with S&P, the new index recognises the
critical mass of technology companies now listed on ASX. The All Tech
Index provides investors with an opportunity to see how the sector
is tracking and gives them a benchmark to measure its performance.

At its launch in February 2020, it had 46 constituents with a
combined market capitalisation of over $100 billion. It featured
domestic and international companies, including from the United
States, New Zealand and Ireland, which saw the opportunity to
list and grow on ASX. Reflecting this growth, at its June 2020
rebalance, the number of constituents had increased to 50, with a
total value of $110 billion.

The All Tech Index provides investors with exposure to this
high growth and exciting sector. It also adds to the profile and
attractiveness of Australia’s financial market.

Globally we have been at the forefront of the digitisation of financial
services for many decades – delivering customers the time and cost
benefits that come from evolving manual, paper-based processes into
electronic processes that can complete multiple steps in rapid sequence.

In FY20, we continued our work on a range of digitisation projects that
will simplify the costly and time consuming back office processes for
the benefit of our customers and industry. For example, our project
to replace CHESS will increase the opportunity for our customers to
digitise their workflows and create efficiencies. Also, our corporate
actions straight-through-processing initiative will reduce average
processing times from almost half-an-hour to seconds.

Digitisation creates opportunities for innovation. We believe our DLT
Solutions infrastructure, an extension of our CHESS replacement work.
will enable customers to develop new products and services that will
play an important role in the vibrancy and growth of our industry well
into the future.

Health Care
Technology

Interactive
Media and
Services

Internet
and Direct
Marketing

Consumer
Electronics

GICS sectors represented
in the All Tech Index

Information
Technology

GICS se c t o r

GICS industry

u p

y g

i n d u s

G I C S

GICS sub-industry

All Tech Index inclusion requirements

0.3

minimum investable
weight factor

30%

minimum relative
liquidity ratio

$120k

minimum daily
value traded

$120m

market capitalisation
(minimum 3 monthly
average float adjusted)

Quarterly

index rebalance

ASX Annual Report 2020 Sustainability continued

CORPORATE
GOVERNANCE

Corporate governance

ASX Limited Board

Rick Holliday-Smith
Independent, Non-Executive Chairman

BA (Hons), FAICD

Dominic Stevens
Managing Director and CEO, Executive Director

BCom (Hons)

Mr Rick Holliday-Smith has served as Chairman of ASX since March
2012, and as a director since July 2006. He was previously Chairman
of SFE Corporation Limited from 1998 until 2006.

Mr Dominic Stevens was appointed Managing Director and CEO of
ASX in August 2016. He was an independent non-executive director
of ASX from December 2013 until his appointment as CEO.

Mr Stevens is also a director of the ASX clearing and settlement
licensees and their intermediate holding companies.

Mr Stevens has over 30 years experience in financial markets. He was
CEO of Challenger Limited from 2008 to 2012, before which he was
the company’s Deputy CEO and head of capital, risk and strategy.

Prior to Challenger, he held senior positions during a long career
at Bankers Trust Australia, where he had responsibility for the
Australian derivatives and global metals and agricultural commodity
derivatives businesses.

Mr Holliday-Smith is Chairman of the Nomination Committee
and the intermediate holding companies of the ASX clearing and
settlement facility licensees. He is also a member of the Audit and
Risk Committee and the Remuneration Committee.

Mr Holliday-Smith has global executive and leadership experience
in capital markets and derivatives, and a background in venture
capital activities.

His previous roles include CEO of futures and options trading firm
Chicago Research and Trading (CRT), President responsible for global
trading and sales at Nations Bank-CRT (a predecessor of Bank of
America), both based in Chicago, and Managing Director of Hong
Kong Bank Limited (a wholly owned merchant banking subsidiary
of HSBC Bank), based in London.

Mr Holliday-Smith was appointed Chairman of Cochlear Limited in
July 2010, having joined the Board in March 2005. He is a member
of the Macquarie University Faculty of Business and Economics
Advisory Board. Mr Holliday-Smith was a director of Servcorp
Limited between October 1999 and April 2020.

Yasmin Allen
Independent, Non-Executive Director
BCom, FAICD

Melinda Conrad
Independent, Non-Executive Director

MBA, FAICD

Ms Yasmin Allen was appointed a director of ASX in February 2015.
She is a member of the Audit and Risk Committee.

Ms Allen is also a director of ASX Clear (Futures) Pty Limited and
Austraclear Limited, the ASX clearing and settlement licensees for
Australia’s derivatives, OTC and debt markets, and their intermediate
holding companies.

Ms Allen has extensive financial services, strategy and corporate
governance experience, gained during a career of over 20 years in
finance and investment banking.

Ms Melinda Conrad was appointed a director of ASX in August
2016. She is a member of the Nomination Committee and the
Remuneration Committee.

She has over 20 years’ experience in business strategy and
marketing, and brings skills and insights as an executive and director
from a range of industries, including retail, financial services and
healthcare.

Ms Conrad has been a strategy and marketing adviser, an executive
with Colgate-Palmolive, and founded and managed a retail business.

She was formerly a vice president at Deutsche Bank, a director at
ANZ Investment Bank and an associate director at HSBC Group UK.

Ms Allen was appointed Chairman of Digital Skills Organisation
(Department of Employment) in January 2020 and Chairman of
Faethm.ai in February 2020. Ms Allen was appointed a director of
Santos Limited in October 2014 and Cochlear Limited in August 2010.
Ms Allen’s previous appointments include director of Insurance Australia
Group Limited between November 2004 and September 2015.

She was appointed a director of Stockland Corporation Limited
and Stockland Trust in May 2018 and Ampol Limited in March 2017.
Ms Conrad’s previous appointments include director of OFX Group
Limited between September 2013 and September 2018, and Reject
Shop Limited between August 2011 and June 2017.

Ms Conrad is also a director of the Centre for Independent Studies
and the George Institute for Global Health and a member of the AICD
Corporate Governance Committee.

Ms Allen is also Chairman of Advance, a director of the George
Institute for Global Health and the National Portrait Gallery and
Acting President of the Australian Government Takeovers Panel.

ASX Annual Report 2020 Corporate governance

Corporate governance continued

Dr Ken Henry AC
Independent, Non-Executive Director

BCom (Hons), PhD, DB h.c, FASSA

Peter Marriott
Independent, Non-Executive Director

BEc (Hons), FCA, MAICD

Dr Ken Henry was appointed a director of ASX in February 2013. He
is a member of the Audit and Risk Committee and the Nomination
Committee.

Dr Henry is also a director of ASX Clear Pty Limited and ASX
Settlement Pty Limited, the ASX clearing and settlement licensees
for Australia’s equity markets, and their intermediate holding
companies.

Dr Henry has extensive experience as an economist in Australia and
overseas, and has worked as a senior policy adviser to successive
Australian governments.

Dr Henry served as the Secretary of the Federal Department of
the Treasury from 2001 to 2011. He is Chairman of the Sir Roland
Wilson Foundation at the Australian National University, Governor
of the Committee for Economic Development of Australia, and a
member of the Advisory Board of the John Grill Centre for Project
Leadership at the University of Sydney.

Dr Henry was Chairman of National Australia Bank Limited from
December 2015 to November 2019, having joined the board in
November 2011.

Mr Peter Marriott was appointed a director of ASX and Chair of the
Audit and Risk Committee in July 2009.

He is a director of each ASX clearing and settlement facility licensee
and their intermediate holding companies.

Mr Marriott has spent over 30 years in senior management roles
in the finance industry, spanning international banking, finance
and auditing.

Mr Marriott was Chief Financial Officer of Australia and New Zealand
Banking Group Limited (ANZ) from 1997 to May 2012. He also spent
two years as Group Head of Risk Management. Prior to his career
at ANZ, he was a partner of KPMG Peat Marwick specialising in the
banking and finance and information technology sectors.

Mr Marriott was appointed a director of Westpac Banking
Corporation in June 2013. He is a member of the Council of Monash
University and is Chairman of the Resources and Finance Committee
of the Monash University Council.

Peter Nash
Independent, Non-Executive Director

BCom, FCA, F Fin

Heather Ridout AO
Independent, Non-Executive Director

BEc (Hons)

Mr Peter Nash was appointed a director of ASX in June 2019. He was
appointed a member of the Audit and Risk Committee in June 2020.

Mr Nash was formerly a Senior Partner with KPMG until September
2017. He was admitted to the partnership in 1993. Mr Nash served
as National Chairman of KPMG Australia from 2011 until August
2017. In this role, he also served as a member of the Global Board of
KPMG and was the Chair of KPMG’s Global Investment Committee.

Mr Nash is Chairman of Johns Lyng Group Limited and a non-executive
director of Westpac Banking Corporation and Mirvac Group Limited.
He is a board member of Reconciliation Australia, Koorie Heritage
Trust, Migration Council Australia and Golf Victoria.

Mr Nash’s previous appointments include member of the Business
Council of Australia and member of the Economic and Regulatory
Committee.

Mrs Heather Ridout was appointed a director of ASX in August 2012.

Mrs Ridout is also Chair of the Remuneration Committee and a member
of the Nomination Committee.

Mrs Ridout is a company director with a long history as a leading figure
in the public policy debate in Australia. She was formerly Chief Executive
of the Australian Industry Group, a major national employer organisation
representing a cross-section of industries including manufacturing,
construction, defence, ICT and labour hire, until April 2012.

Mrs Ridout has been a director of Sims Metal Management Limited since
September 2011 and a director of the Australian Chamber Orchestra
since December 2012. Mrs Ridout was appointed as a director of
AustCyber – the Australian Cyber Security Growth Network – in July
2017, and as an Investment Committee member and Alternate Director
of the AustralianSuper Trustee Board in September 2019.

Mrs Ridout’s previous appointments include Chair of the
AustralianSuper Trustee Board from May 2013 to September 2019,
having joined that Board as a director in 2007, and a member of the
Board of the Reserve Bank of Australia from February 2012 until
February 2017, Infrastructure Australia, the Australian Workforce
and Productivity Agency, the Henry Tax Review panel and the
Climate Change Authority.

34 ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Damian Roche
Independent, Non-Executive Director

BCom

Peter Warne
Independent, Non-Executive Director

BA, FAICD

Peter Warne was appointed a director of ASX in July 2006. He was
previously a director of SFE Corporation Limited from 2000 to
2006. He is also a member of the Audit and Risk, Nomination and
Remuneration Committees.

Mr Warne is also Chairman of Austraclear Limited and a director of
ASX Clear (Futures) Pty Limited, the ASX clearing and settlement
licensees for Australia’s derivatives, OTC and debt markets, and
their intermediate holding companies.

Mr Warne has over 30 years’ experience in financial markets and
brings a deep practical and technical understanding of debt, equities
and derivatives markets, and risk management.

Mr Warne is a director of Securities Exchanges Guarantee
Corporation, NSW Treasury Corporation and Allens. He is also a
member of the ASIC External Advisory Panel.

Mr Warne has been Chairman of Macquarie Group Limited and
Macquarie Bank Limited since April 2016, having served as a director
since July 2007.

Mr Warne’s previous appointments include Chairman of OFX Group
Limited (formerly OzForex Group) between September 2013 and
November 2016, Chairman of Australian Leisure and Entertainment
Property Management Limited between September 2003 and May
2017, Deputy Chairman of Crowe Horwath Australasia Limited
between May 2007 and January 2014, and Adjunct Professor at
the University of Sydney Business School between November 2011
and November 2014.

Mr Damian Roche was appointed a director of ASX in August 2014.

Mr Roche is also Chairman of ASX Clear (Futures) Pty Limited and
a director of Austraclear Limited, the ASX clearing and settlement
licensees for Australia’s derivatives, OTC and debt markets, and
their intermediate holding companies.

Mr Roche has 20 years' experience in global investment banks, with
extensive cross-asset class expertise spanning the equities, fixed
income and commodities markets, with a specific focus on the Asia
Pacific region, including Australia.

Mr Roche was a member of the global Corporate and Investment
Bank Operating Committee for J.P. Morgan. His most recent role at
the bank was as Head of Markets and Investor Services, Sales and
Distribution for Asia Pacific, based in Hong Kong.

Mr Roche is a director of Kaldor Public Arts Projects and HRL
Morrison & Co Limited.

Rob Woods
Independent, Non-Executive Director

BCom

Mr Woods was appointed a director of ASX in January 2020. He was
appointed a member of the Audit and Risk Committee in June 2020.

Mr Woods is also a director of ASX Clear (Futures) Pty Limited and
Austraclear Limited, the ASX clearing and settlement licensees for
Australia’s derivatives, OTC and debt markets, and their intermediate
holding companies. He was previously the Chairman of ASX Clear
Pty Limited and ASX Settlement Pty Limited.

Mr Woods has over 30 years' experience in financial markets.

He was Chief Executive, Strategy at Challenger Limited, and
has previously served as Chief Executive of Challenger's Funds
Management and Asset Management businesses. Mr Woods started
his career at Bankers Trust Australia and became Executive Vice-
President and Head of Equity Derivatives.

ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Laying solid foundations for
management and oversight

Corporate governance framework

ASX operates an integrated exchange group in Australia and
provides a range of related data and technology services to its
customers, both local and global. ASX also maintains offices in other
global financial hubs. ASX shares are listed on the ASX market.

ASX is regulated by Australian Securities and Investments
Commission (ASIC), and the clearing and settlement licensees
within the ASX Group are also regulated by the Reserve Bank of
Australia (RBA).

Below is a diagram that provides an overview of ASX’s corporate
governance framework.

Corporate governance statement

ASX is committed to maintaining and promoting high standards of
corporate governance. We believe this underpins strong business
performance and the trust and goodwill of stakeholders – including
shareholders, customers, employees and regulators.

By corporate governance we mean the structures for accountability
and the framework of rules, relationships, systems and processes
by which authority is exercised and managed within our company.

This report outlines ASX’s principal governance arrangements and
practices. It is current as at 20 August 2020 and has been approved
by the Board.

The ASX Board and its committees regularly review ASX’s governance
arrangements and practices to ensure they are in line with regulatory
requirements and developments in industry expectations, and
continue to support ASX’s strategic objectives.

Our governance arrangements have been consistent with the
fourth edition of the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (Principles and
Recommendations) throughout the reporting period. This statement
reports compliance with the fourth edition.

More information on ASX’s corporate governance including
ASX’s Appendix 4G, is available on ASX’s website at
www.asx.com.au/about/corporate-governance.htm

Shareholders

ASX Board

CS Boards

Audit and Risk
Committee

Nomination
Committee

Remuneration
Committee

Managing Director and CEO

Internal audit

ASX executives

External audit

ASX staff

36 ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

The role of the Board

Board committees

The Board is committed to promoting long-term value creation and
is accountable to shareholders for the performance of ASX.

The Board has established three committees to assist it in discharging
its role and responsibilities:

• Audit and Risk Committee

• Nomination Committee

• Remuneration Committee.

The role and responsibilities of the committees are set out in each
Board Committee Charter and are summarised in this corporate
governance statement.

The ASX Board Committee Charters are available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

Responsibilities of management

The matters reserved to the Board are set out in the ASX Board
Charter. The Board has delegated other matters to management,
subject to financial and other limits.

The Managing Director and CEO (CEO) has been delegated authority
for matters that are not reserved to the Board or delegated to the
Board Committees or Chief Compliance Officer.

The CEO’s responsibilities include (but are not limited to):

• Executing the Board-approved strategy and achieving ASX's
strategic objectives (within the risk appetite set by the Board)

• Instilling the Code of Conduct

• The timely presentation of information to the Board to enable it

to fulfil its responsibilities.

The CEO is supported by executives who regularly attend and
present at Board meetings. The CEO has determined delegations
to executives who report to him.

The Company Secretary is accountable directly to the Board, through
the Chairman, on all matters to do with the proper functioning of the
Board. The Board appoints the Company Secretary with their role
set out in the Board Charter. Details of ASX’s company secretaries
are on page 63.

The ASX Board Charter and biographies of
ASX executives are available on ASX’s website at
www.asx.com.au/about/corporate-governance.htm and
www.asx.com.au/about/executive-team.htm, respectively.

The Board’s role and responsibilities are detailed in its Charter.
ASX’s constitution also governs the Board’s conduct.

The role of the Board is to provide leadership, guidance and oversight
for ASX and its related bodies corporate.

Its responsibilities include defining ASX's purpose and setting its
strategic objectives, approving the annual budget and financial
plans, approving ASX’s statement of values and code of conduct,
setting ASX’s risk strategy and risk appetite, and appointing the
Managing Director and CEO.

The Board monitors the execution of strategies by Management,
including for consistency with ASX's risk management strategy
and risk appetite.

The Board has set the company’s vision to become the world’s
most respected financial marketplace. This is a long-term goal.
ASX’s progress in FY20 towards achieving this vision is set out in
the Chairman's Letter and CEO's Review.

The ASX Board Charter and ASX constitution are available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

FY20 governance activities

During the year, the Board’s governance priorities and areas
of focus included:

• Oversight and monitoring of ASX's organisational

performance in response to the COVID-19 pandemic,
including overseeing the conduct of the affairs of the
ASX Group consistent with its licence obligations and
public policy objectives directed at financial markets
and payment systems integrity. This included a focus on
people and culture

• Operational and technical resilience of ASX’s business

including oversight of its Building Stronger Foundations
initiative, CHESS replacement project, updates to other
ASX core technology, cyber resilience, and secondary
data centre operationalisation and customer migration

• Board renewal and succession planning, including the
appointment of Rob Woods in January 2020 and ASX
Chairman succession planning for FY21 (noting that the
ASX Chairman has announced his intention to retire as
an ASX director at the end of his current term in 2021)

• Scheduled private meetings with external auditors and

head of internal audit

• Scheduled engagements with regulators including ASIC

and the RBA.

The Board continued to review its governance policies and
practices in FY20 to identify further enhancements and
efficiencies. This included a review of its Board Charter.

ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Director tenure

Board gender diversity

Age of directors

0–3 years
4–6 years
7–8 years
>10 years

19%

27%

Female directors
Male directors
CEO

27%

45-54
55-64
65-74

27%

64%

46%

Nomination and appointment of directors

Director election and Board renewal

The Board has established a Nomination Committee to help bring the
focus and independent judgement needed for decisions regarding
the composition of the Board.

The role and responsibilities of the Nomination Committee are set
out in its Charter. Its responsibilities include to evaluate and make
recommendations regarding the mix of knowledge, experience,
independence and diversity on the Board and Board Committees, and
to review and make recommendations on Board succession planning.

The Nomination Committee Charter is available on ASX’s website
at www.asx.com.au/about/corporate-governance.htm

The Nomination Committee is comprised of five independent,
non-executive directors. The ASX Chairman, Rick Holliday-Smith,
chairs the Nomination Committee. Melinda Conrad, Ken Henry,
Heather Ridout and Peter Warne are also Committee members.

The number of times the Committee met during FY20 and the
individual attendance of its members at those meetings are disclosed
on page 41.

ASX undertakes checks before appointing directors and senior
executives. These checks include education, employment, character,
criminal history and bankruptcy checks. A statutory ‘fit and proper’
assessment applies to directors due to their involvement with market
licensees and/or clearing and settlement facilities. It is a condition of
appointment that any new director is not a disqualified person under
this assessment. Directors make an annual declaration to this effect.

Any director (except the CEO) who has been appointed during the
year must stand for election at the next Annual General Meeting
(AGM). ASX provides shareholders with all material information in
its possession that is relevant to a decision on whether to elect (or
re-elect) a director.

New directors receive a letter of appointment that outlines ASX’s
expectations about time commitments, compliance with ASX policies
and regulatory requirements. The letter of appointment is between
ASX and the director personally.

ASX has a program for inducting new directors. As part of this
program, new directors typically receive briefings from executives
and Committee Chairs (as relevant) on strategic initiatives and
operational matters.

The Board, in consultation with the Nomination Committee, regularly
reviews its succession plans.

Directors are generally elected for a three-year term. Retiring
directors are not automatically reappointed.

Damian Roche will retire by rotation in 2020 and stand for re-election
at the 2020 AGM. Rob Woods, who was appointed a director on
1 January 2020, will stand for election. Details of their respective
skills and experience are set out on page 35 and are also outlined in
the Notice of Annual General Meeting 2020. The Board considers that
their experience in financial markets complements and strengthens
the Board’s existing skills and experience. The re-election of Damian
Roche and election of Rob Woods are unanimously supported by
all other directors.

Peter Warne has indicated his intention to retire as an ASX director
at the end of his current term (being the end of the 2020 AGM).
The Board thanks Peter Warne for the valuable contribution he has
made to ASX over his 14 years as a director.

The Notice of Annual General Meeting 2020 is available on ASX’s
www.asx.com.au/about/annual-general-meeting.htm

Diversity

ASX’s Board and workforce are comprised of individuals with a
range of skills, backgrounds and experiences. ASX values diversity
and inclusion, and recognises the organisational capabilities and
business performance these bring.

ASX has adopted a Diversity and Inclusion Policy, which describes
how ASX promotes diversity. The diversity objectives adopted by
the Board and achievements in FY20 are set out on page 25, along
with further details on ASX’s initiatives to support diversity.

The Board is committed to maintaining the gender diversity of its
membership. The Board has adopted a target of a minimum of 40%
female directors. Currently, 27% of ASX’s directors are female and
30% of non-executive directors are female. Upon the retirement
of Peter Warne at the 2020 AGM, 33% of non-executive directors
will be female.

ASX also discloses its performance against gender equality indicators
in its annual report to the Workplace Gender Equality Agency.

ASX’s Diversity and Inclusion Policy, and its latest report to
the Workplace Gender Equality Agency are available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

38 ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Performance assessments

Board and individual directors

Under its Charter, the Board and directors are required to undergo
regular performance reviews. The reviews are conducted to help
ensure the Board continues to operate effectively and efficiently.

The performance of the Board, its committees and individual
directors are reviewed annually. Typically, the review process
includes interviews by the ASX Chairman with each ASX director and
a confidential survey. A report summarising the results of the survey
is presented to the Board for private discussion at a Board meeting.

This evaluation took place in FY20.

Periodically, the Board engages an external consultant to facilitate
its performance review. The last review facilitated by an external
consultant took place in FY19.

Chairman

The Chairman of ASX, Rick Holliday-Smith, is an independent,
non-executive director. He was elected Chairman by the directors
in 2012.

The Chairman’s role is to lead the Board. The responsibilities include
chairing Board meetings and facilitating open and effective discussions
at those meetings (including with management). The Chairman also
serves as the primary link between the Board and management. The
Chairman’s role and responsibilities are set out in the Board Charter.

The roles of the Chairman and CEO are separate and are not performed
by the same person. The CEO may not become the Chairman.

In 2018, Mr Holliday-Smith announced his intention to retire as ASX
Chairman at the conclusion of his current term, being the end of
the 2021 AGM. A process is underway to identify a successor to Mr
Holliday-Smith.

The Board takes the results of the performance review into
consideration when recommending directors for re-election.

Director skills and experience

ASX is a provider of critical infrastructure to Australia’s financial
markets and has a leading position in the Asia-Pacific region. The
Board is comprised of experienced business leaders with a variety
of professional backgrounds. Many have extensive experience in
financial services.

The Board considers that individually and collectively, the directors
have an appropriate mix of skills, experience and expertise to enable
it to define ASX's strategic objectives, approve strategies developed
by management and monitor the execution of those strategies.

To guide the assessment of the skills and experience of non-executive
directors and to identify any gaps in the collective skills of the
Board, the Board uses the skills matrix over the page. This matrix
also shows the Board’s current assessment of its skills coverage.

Executives

The CEO and ASX’s executives have written agreements setting
out their employment terms. The agreements are between ASX
and the executives personally.

The Board assesses each executive’s performance on an annual
basis. The process for evaluating executive performance and
remuneration is set out in the Remuneration Report on pages 46
to 62. Performance evaluations for the CEO and ASX’s executives
took place in FY20 in accordance with the process disclosed in the
Remuneration Report.

Structure the board to be effective and
add value

Board composition

The Board currently comprises eleven directors. This includes ten
non-executive directors and one executive director, being the CEO.
As noted above, Rob Woods was appointed during the financial
year and Peter Warne has indicated his intention to retire as an ASX
director at the end of his current term (being the end of the 2020
AGM). Following the retirement of Peter Warne as an ASX director,
there will be nine non-executive directors on Board.

The names, qualifications and tenure of each director are provided
on pages 33 to 35.

Director biographies are published on ASX’s website at
www.asx.com.au/about/board-and-management.htm

ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Skills matrix

Category

Description

Number of non-executive
directors with these skills
(ten current NEDs)

Executive leadership

Successful career as a CEO or senior executive in a large, complex organisation

Strategy

Experience in defining strategic objectives, constructively questioning business plans and
implementing strategy

Financial acumen

Qualifications or experience in accounting, financial reporting and corporate finance.
Experience in assessing the quality of internal accounting and financial reporting controls

Risk and compliance

Forward looking, able to identify the key risks to the organisation. Experience in monitoring the
effectiveness of risk management frameworks and practices

Public policy

Ability to assess the impact of legal, public and regulatory policy matters on markets and
corporations, and experience in managing such impacts

Technology and data

Experience in overseeing the use and governance of critical information technology infrastructure;
setting, and overseeing the implementation of complex technology strategies (including adoption of
new technologies); commercialisation of data products and provision of technology services

Business development and
customer management

Commercial and business experience, including development of products and services. Ability
to understand customer needs and trends. Experience in implementing changes to enhance
customers’ experience

People and change
management

Experience in overseeing and assessing senior management, remuneration frameworks,
strategic human resource management and organisational change. Experience in overseeing and
monitoring corporate culture

Corporate governance

Knowledge, experience, and commitment to the highest standards of governance

Financial services

Extensive experience in the financial services industry (for example, broking, funds
management, superannuation, investment banking and/or experience in international financial
markets or exchange groups, including post-trade services)

10/10

8/10

7/10

9/10

10/10

9/10

The Board keeps up-to-date with market and industry developments
through regular briefings at Board and Committee meetings, Board
workshops, meetings with customers and regulators, and through
site visits. At Board meetings, the Board is also briefed on material
developments in laws, regulations and accounting standards relevant
to ASX.

The Board periodically reviews whether there is a need for directors
to undertake professional development to maintain the skills and
knowledge required to perform their role effectively. In FY20, the
Board participated in a workshop on cyber security and received
deep dive presentations from executives on topics specific to the
executives' respective business functions.

Director independence and length of service

The Board requires the majority of its directors to be independent.

ASX recognises that having a majority of independent directors
helps to ensure that the decisions of the Board reflect the best
interests of ASX and its shareholders. It also helps to ensure that
those decisions are not biased towards the interest of management
or any other group. ASX also considers that having a majority of
independent directors supports the Board to challenge management
and hold them to account.

In determining whether a director is independent, the Board
considers whether the director is free of interests that could (or
could be perceived to) materially interfere with the independent

40 ASX Annual Report 2020 Corporate governance continued

exercise of the director’s judgement and the capacity to act in the
best interests of ASX as a whole, rather than of an individual security
holder or other party.

The Board has adopted a policy to assess a director’s independence.
This policy includes guidelines for assessing the materiality of the
director's relationship that may affect their independence.

The Board regularly assesses the independence of its directors,
including by way of an annual, formal assessment. The Board has
assessed each non-executive director as independent.

ASX has not adopted a limit on director tenure. The tenure of each
director is set out on pages 33 to 35. Rick Holliday-Smith (ASX’s
Chairman) and Peter Warne have been directors of ASX for more
than 14 years. Peter Marriott has been a director of ASX for more
than 11 years. In FY20, the Board reviewed and determined that
their tenure had not impacted on their independence.

As noted above, Mr Warne has advised that he will retire as an
ASX director at the conclusion of the 2020 AGM. Mr Holliday-Smith
has previously announced his intention to retire as ASX Chairman
when his current term expires at the conclusion of the 2021 AGM.

The mix of directors’ tenure is shown in a diagram on page 38.

ASX’s policy and guidelines on relationships affecting
independent status is available on ASX’s website at
www.asx.com.au/about/corporate-governance.htm

Corporate governance continued

Conflicts of interest

Directors are required to disclose all interests that may conflict
with their duties. A register of directors’ interests is provided to
the Board at each meeting.

If a director has a material personal interest in a matter being
considered by the Board, they must not be present during the
consideration of that matter or vote on the matter (unless approved
by other directors who do not have a material personal interest in
the matter).

Aligning interests of the Board
with shareholders

To underscore the alignment of the Board with shareholders’
interests, the Board has adopted a non-executive director
shareholding guideline. This requires that all non-executive directors
accumulate ASX shares to the value of their base level annual
director fee within three years of their appointment.

All non-executive directors who have served at least three years
meet this guideline.

Details regarding director remuneration and ASX’s remuneration
policies and practices are detailed in the Remuneration Report on
pages 46 to 62.

Access to information and advice

Directors have unrestricted access to all staff and all relevant records
of ASX they consider necessary to fulfil their obligations (including
access to members of the internal audit function and the external
auditor without management present). They also have the right to
seek explanations and additional information from management
and auditors.

Directors are also entitled, with the approval of the Chairman, to
obtain independent professional advice at ASX’s expense relating
to their role as an ASX director.

Attendance at meetings

Details of director attendance at Board and committee meetings in
the last 12 months up to 30 June 2020 are set out below. Provided
there is no conflict of interest, directors are also invited to, and
frequently attend as observers, meetings of Board committees
of which they are not members. The CEO is not present for
Remuneration Committee discussion on his remuneration.

All directors receive copies of agendas, papers and minutes of committee
meetings to ensure that they have equal access to information,
regardless of whether they are appointed to particular committees.

Instil a culture of acting lawfully,
ethically and responsibly

ASX is committed to conducting business in an open and accountable
way. We believe that lawful, ethical and responsible business
practices are a driver of shareholder value.

ASX’s Values program

An overview of ASX's Values program is set out on page 24. ASX
values are behaviours that guide the actions and decision-making of
staff, and reflect ASX’s brand and culture. The values are to Be Open,
Be Trustworthy, Be Original, Be The Example.

The program was developed collaboratively by management and
endorsed by the ASX Board. Management is responsible for instilling
these values across the ASX Group.

Our Values are published on ASX's website at
www.asx.com.au/about/corporate-social-responsibility.htm

Director name
Rick Holliday-Smith

Dominic Stevens

Yasmin Allen
Melinda Conrad1
Ken Henry2
Peter Marriott
Peter Nash3
Heather Ridout

Damian Roche

Peter Warne
Rob Woods4

Board
meetings

Attended
/Held
11/11

Audit and Risk
Committee meetings

Nomination
Committee meetings

Remuneration
Committee meetings

CS boards
(concurrent) meetings

Attended
/Held
4/4

Observed
-

Attended
/Held
5/5

Observed
-

Attended
/Held
5/5

Observed
-

Attended
/Held
10/10

Observed
-

11/11

10/11

11/11

5/5

4/4

3/4

4/4

2/2

5/5

4/4

5/5

1/1

5/5

3/3

10/10

9/10

10/10

9/10

10/10

9/10

10/10

Directors on CS boards (non-ASX)
Carolyn Colley5
Stephen Knight6
Adrian Todd7
1 Melinda Conrad was appointed to the Nomination Committee and Remuneration Committee on 16 October 2019.
2 Ken Henry was appointed to the Nomination Committee on 16 October 2019.
3 Peter Nash was appointed to the Audit and Risk Committee on 21 May 2020.
4 Rob Woods was appointed the ASX Limited Board on 1 January 2020 and to the Audit and Risk Committee on 21 May 2020.
5 Carolyn Colley was appointed to the CS boards on 1 January 2020.
6 Stephen Knight was appointed to the CS boards on 20 June 2019. He was appointed Chairman of ASX Clear Pty Limited and ASX Settlement Pty Limited on

10/10

5/5

1 January 2020.

7 Adrian Todd was appointed to the CS boards on 1 August 2019.

ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Code of Conduct, Whistleblower Policy and
Anti-bribery and Corruption Policy

ASX has adopted a:

The Board sets the policy regarding payments to political parties,
including limits on the amounts paid. Payments within these limits
are approved by the CEO and the General Counsel. All payments to
political parties are disclosed by ASX.

• Code of Conduct underpinned by the ASX Values. The Code of
Conduct applies to all directors, employees and contractors. It
sets the standards for how we work at ASX and outlines the
importance of the values to anyone dealing with ASX

• Whistleblower Protection Policy. ASX seeks to identify and
assess any wrongdoing as early as possible. ASX’s values
support a culture that encourages staff to speak up on matters
or conduct that concerns them. This policy provides information
to assist staff to make disclosures and sets out how ASX will
protect them from any form of retaliation or victimisation when
they make a legitimate whistleblowing disclosure

• Anti-bribery and Corruption Policy. ASX is committed to a high
standard of integrity. This policy states ASX’s requirements for
the management of gifts and benefits.

ASX also has a framework to report material breaches of the Code
of Conduct or the Anti-bribery and Corruption Policy, or material
incidents reported under the Whistleblower Protection Policy to
the Audit and Risk Committee and/or Board.

Periodic employee training is conducted on the Code and these Policies.

ASX’s Code of Conduct, Whistleblower Protection Policy, and
Anti-bribery and Corruption Policy are published on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

Securities trading

ASX has adopted dealing rules that restrict dealing in ASX and
non-ASX securities. These dealing rules apply to directors and all
employees. The dealing rules document the procedure for dealing in
securities and are designed to help prevent directors and employees
from contravening laws on insider trading.

Additional dealing restrictions apply to employees working
in specified functions (including Listings Compliance, Market
Announcements and Surveillance functions).

Derivatives and hedging arrangements for unvested ASX securities,
or vested ASX securities subject to a holding lock, are prohibited.

ASX’s dealing rules are published on ASX’s website at
www.asx.com.au/about/corporate-governance.htm

Payments to political parties

ASX has a responsibility to its shareholders and stakeholders to
articulate the opportunities and challenges facing its business,
communicate its position on relevant public policy issues and
contribute to well-informed decision-making by government.

ASX actively engages with government and political decision-makers
about our role, the investments we are making to build world-class
infrastructure, and the dynamic and globally competitive market
environment in which ASX operates.

Similar to previous years, in FY20 ASX paid $100,000 in membership
fees to each of the Liberal Party Australian Business Network and
the Federal Labor Business Forum. ASX’s membership of these
business networks provides an opportunity to engage with a wide
range of policy and decision-makers.

42 ASX Annual Report 2020 Corporate governance continued

Safeguard the integrity of
corporate reports

ASX believes that accurate and timely corporate reporting underpins
effective risk management and is key to executing ASX’s strategy.

The Board is responsible for overseeing that appropriate monitoring
and reporting mechanisms are in place. It is also supported in this
regard by the Audit and Risk Committee.

The role of the Audit and Risk Committee in safeguarding the
integrity of ASX’s corporate reporting includes reviewing ASX’s
financial reports and the adequacies of the Group’s corporate
reporting processes.

Additional information on the role and responsibilities of the Audit
and Risk Committee, its membership and the number of times the
Committee met in FY20 are detailed on pages 41 and 44.

Integrity of financial reporting

Before it approves the financial statements for the half-year
and full-year, the Board receives a statement from the CEO and
Chief Financial Officer (CFO) consistent with the requirements
of the Corporations Act 2001. These statements are made after
the CEO and CFO receive attestations from executives regarding
their respective areas of responsibility. The Board also receives a
statement from the CEO and Chief Risk Officer (CRO) that ASX’s risk
management and internal control systems are operating effectively
for the management of material business risks.

External auditor

ASX has appointed PricewaterhouseCoopers (PwC) as its external
auditor. The appointment was approved by shareholders at the
2008 Annual General Meeting. In accordance with auditor rotation
requirements, the lead audit partner changed in FY19.

Among its key responsibilities, PwC reviews ASX’s financial reporting
and provides an opinion on whether ASX’s financial report gives a
true and fair view of the ASX Group’s financial position and financial
performance, and whether it complies with Australian Accounting
Standards and the Corporations Regulations 2001. PwC’s opinion
on the FY20 financial report is on pages 105 to 109.

PwC attends each Audit and Risk Committee meeting and meets with
the Committee without management present at least once annually.

PwC has provided confirmation that there have been no contraventions
of the auditor independence requirements of the Corporations Act
2001 and no contraventions of any applicable code of professional
conduct in relation to its audit (refer to page 65). The fees paid to
PwC for non-audit services are disclosed on page 103.

PwC’s lead audit partner will attend the 2020 AGM to answer
questions related to the external audit.

Corporate governance continued

Periodic corporate reports

Respect the rights of security holders

Processes are in place to verify the integrity of ASX’s periodic
corporate reports (as defined in the Principles and Recommendations)
released to the market and not audited or reviewed by the external
auditor. Examples of periodic corporate reports released by ASX
include the Directors’ Report in this Annual Report.

ASX has adopted a Continuous Disclosure Policy which sets out how
market announcements are prepared and released.

ASX has established a Continuous Disclosure Committee which makes
disclosure decisions, oversees the drafting of announcements and
approves announcements. The Committee members include the CEO,
General Counsel (Committee Chairman), CFO, Chief Compliance Officer
(CCO) and Chief Strategy Officer.

ASX’s Continuous Disclosure Committee approves all ASX
announcements, other than administrative announcements of the
type set out in the Continuous Disclosure Policy. Written processes
are in place for the approval of administrative market announcements.

Where ASX’s Continuous Disclosure Committee has determined
that information will be publicly disclosed, one or more Committee
members oversee the preparation of that announcement. The
Committee is responsible for satisfying itself that the content of
any announcement is accurate and not misleading, and is supported
by appropriate verification.

ASX also releases a monthly activity report which includes, among
other things, information regarding listings and capital raisings,
trading volumes and values on ASX’s equity and derivatives markets
in the preceding month. These reports are reviewed by a senior
manager against source documents before being provided for review
and approval by the CFO (or their delegate). The reports are then
released on the market announcements platform by the Company
Secretariat function.

ASX’s Continuous Disclosure Policy is available on ASX’s website
at www.asx.com.au/about/corporate-governance.htm

Make timely and balanced disclosures

Continuous disclosure

ASX is committed to providing shareholders and the market with
equal access to material information about its activities in a timely
and balanced manner. ASX's Continuous Disclosure Policy sets out
the processes adopted to manage this commitment.

ASX will not disclose market sensitive information (or provide new
and substantive investor or analyst presentations) to any analyst or
investor unless it has first provided that information to the market and
received an acknowledgement that the information has been released.

Security holders have an opportunity to participate in the presentation
of ASX's half-year and full-year results by being provided a link to
a live webcast.

ASX provides copies of all market announcements to directors
promptly after they have been released to the market.

ASX’s Continuous Disclosure Policy is available on ASX’s website
at www.asx.com.au/about/corporate-governance.htm

Shareholder engagement and provision
of information

ASX provides information about the ASX Group and its governance
practices on its website, including this corporate governance
statement (and Appendix 4G), ASX’s constitution, Board and
committee Charters and key governance policies, as well as the
qualifications, skills and backgrounds of its directors and senior
executives. ASX also makes available on its website copies of its
Annual Reports, market announcements, notices of meeting and
copies of presentations delivered to investors or analysts.

ASX has a section of the website dedicated to ASX's Corporate
Governance, which can be found via the 'About ASX' navigation
ribbon at the top of the home page.

ASX is committed to communicating promptly, accurately and in
plain language with shareholders. This commitment is detailed in
ASX’s Shareholder Communication Policy.

All market announcements (including financial results and Annual
Reports) are published on ASX’s website after they have been
released on the market announcements platform. ASX also publishes
media releases and other relevant information on its website.

ASX uses a number of channels and technologies, including webcasting
and social media, to communicate promptly, transparently and widely.
We encourage shareholders to participate in shareholder meetings
and we deal with shareholder enquiries fairly and respectfully.

Further information about ASX’s governance practices, including
its Shareholder Communication Policy, is available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

Investor relations program

ASX has an investor relations program to facilitate effective two-way
communication with investors. The program provides greater
understanding of ASX and involves engagement throughout the year
via both scheduled and ad hoc interactions with institutional and private
investors, sell-side and buy-side analysts, and proxy advisors. ASX has
a framework for management to report to the Board any significant
comments or concerns raised by investors or their representatives.

ASX does not hold meetings with investors or analysts to discuss
ASX’s financial performance within a ‘blackout’ period of six weeks
in advance of the half-year and full-year results announcements.

ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

Annual General Meeting

Audit and Risk Committee

Details about ASX’s 2020 AGM are provided on page 115. ASX has
been monitoring the impact of the COVID-19 pandemic. Having
regard to the social distancing requirements in New South Wales
and in the interests of the health and safety of our shareholders and
staff, ASX has decided that its 2020 AGM will be held as a virtual
meeting. This approach is in line with temporary modifications to
the law and current regulatory guidance.

As outlined above, the Board has established an Audit and Risk
Committee. The Audit and Risk Committee reports to the ASX
Board. Its role and responsibilities are set out in its Charter. The
Committee’s responsibilities include:

• Reviewing the enterprise risk management framework
• Overseeing the process for identifying significant risks

facing ASX

The AGM is an opportunity for shareholders to hear from and to
put questions to the Board and external auditor.

• Reviewing and overseeing risk management processes, internal

controls and compliance systems.

Detailed information about how shareholders can participate in
the 2020 AGM is set out in the Notice of Annual General Meeting
which is published on our website.

Shareholders are able to submit written questions to ASX in advance
of the meeting. Details about how to do so are contained in the
Notice of Meeting. These questions and comments are typically
addressed at the meeting through the Chairman or CEO speeches.

All resolutions put to the AGM are decided by way of a poll. This is
to support the principle of ‘one share, one vote’.

ASX's 2020 Notice of Annual General Meeting is available at
www.asx.com.au/about/annual-general-meeting.htm

Shareholder communications

ASX encourages shareholders to receive communications
electronically. Electronic communication allows ASX to communicate
with shareholders quickly and reduces ASX’s paper usage. ASX
emails shareholders when important information becomes available
such as financial results, dividend statements, notice of meetings,
voting forms and Annual Reports.

Shareholders who receive postal communication from ASX can log
into www.linkmarketservices.com.au to provide their email address
and elect to receive communication electronically.

Recognise and manage risk

The Board recognises that effective risk management is critical to
maintaining ASX’s reputation.

Division of responsibilities

The Board's responsibilities regarding risk management include:

• Setting ASX’s risk strategy and risk appetite
• Overseeing systems of risk management and internal control

and compliance

• Overseeing the process for identifying significant risks facing ASX

• Satisfying itself that appropriate controls, monitoring and

reporting mechanisms are in place.

Management executes the Board-approved strategy and manages
ASX’s operations within the Board-approved risk appetite.
Management is responsible for identifying, monitoring, mitigating
and reporting on risks.

The Audit and Risk Committee receives regular reports from the CFO
on financial matters, the CRO on enterprise risks, the Chief Operations
Officer (COO) on operational, technology and cyber security risks,
the CCO on compliance matters, as well as reports from ASX's
Internal Auditor, Enterprise Compliance function, and from ASX's
external auditor.

In addition to the responsibilities above, the Audit and Risk
Committee has a role in safeguarding the integrity of ASX’s corporate
reporting. Further details about that role are set out on page 42.

The Committee is currently comprised of seven independent,
non-executive directors. Peter Marriott is the Committee’s Chairman.
Rick Holliday-Smith, Yasmin Allen, Ken Henry, Peter Nash, Peter
Warne and Rob Woods are also Committee members.

Consistent with the Board's approach to other Board Committees,
all other directors are invited to the Audit and Risk Committee
meetings, and frequently attend as observers.

The number of times the Committee met during FY20 and the individual
attendance of its members and other directors at those meetings are
detailed on page 41.

The Audit and Risk Committee Charter is available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

Risk management framework

ASX has an established enterprise risk management framework. The
framework encompasses, among other matters, the risk governance
structure across ASX, the risk strategy and appetite, risk culture and
behaviours, and supporting frameworks and processes governing
risk assessment, monitoring and reporting.

ASX’s risk management function has day-to-day responsibility for
the implementation of the enterprise risk management framework.

The Audit and Risk Committee reviews the enterprise risk management
framework annually. This review took place in FY20.

Management committees

ASX has established the following internal management committees
comprised of senior executives to assist with the oversight and
management of risks:

• Risk Committee chaired by the CRO. The Risk Committee has

oversight of the implementation of ASX’s enterprise risk manage-
ment framework, approves risk policies and considers general risk
matters consistent with the ASX Board’s risk appetite

44 ASX Annual Report 2020 Corporate governance continued

Corporate governance continued

• Regulatory Committee chaired by the Group General Counsel.
The Regulatory Committee has oversight of licence compliance
matters, develops and approves policies, and considers updates on
regulatory and government engagement and on ASX rule changes

• Technology Operations and Security Committee (TOSC) chaired

by the COO. The TOSC has oversight of IT security matters,
systems updates and incident management, and considers
emerging technology, operational and security risks.

Internal audit

ASX’s Internal Audit function reviews and reports on internal control
systems and procedures. Its role and responsibilities are set out in
its Charter.

The General Manager, Internal Audit reports to the Chairman of the
Audit and Risk Committee for functional audit purposes, and to the
CRO for administrative purposes. The Audit and Risk Committee
determines Internal Audit’s scope, function and budget each year.

Internal Audit has full access to the Audit and Risk Committee. It also
has unrestricted access to all ASX records, property and personnel.
The Internal Audit function is independent of ASX’s External Auditor.

ASX’s Internal Audit Charter is published on its website at
www.asx.com.au/about/corporate-governance.htm

Enterprise compliance

ASX’s Enterprise Compliance function maps the compliance
frameworks for ASX’s regulatory obligations, oversees ASX’s conflict
handling arrangements, and provides training to the business to ensure
key Australian and international obligations are understood and
complied with. It also undertakes compliance reviews and reporting to
regulators. The General Manager of Enterprise Compliance has a direct
reporting line to the Audit and Risk Committee and to ASX’s clearing
and settlement (CS) boards for key licence obligations and conflict
handling arrangements. It reports to the CRO for other matters.

Exposure to environmental and social risks

Information on ASX’s material business risks and how these are managed
are provided on pages 18 and 19 in the Operating and Financial Review.

ASX’s exposure to environmental and social risks, and how these
are managed (including ASX’s assessment of its exposure to climate
change risks), is set out on pages 20 to 31 in the Sustainability report.

Clearing and Settlement boards

ASX has four subsidiary companies that hold licences to operate clearing
and settlement facilities and two intermediate holding companies.

The CS boards focus on risk management and oversight of the operation
of the clearing and settlement licensees. The responsibilities of these
boards include the management of clearing and settlement risk and
compliance with the Financial Stability Standards determined by the
RBA. Details of the CS boards’ responsibilities, functions and governance
are set out in the CS boards' Charter.

In FY20, two new directors were appointed to the CS boards –
Mr Adrian Todd in August 2019 and Ms Carolyn Colley in January 2020.
Mr Stephen Knight, who was appointed a director in June 2019, was

appointed Chairman of ASX Clear Pty Limited and ASX Settlement
Pty Limited in January 2020. Details of their experience are set out
on ASX's website.

The Audit and Risk Committee serves as the audit and risk committee
for the CS boards where such matters relate to clearing and settlement
operations outside of those matters carried out by the CS boards (and
detailed in the CS boards' Charter).

The CS boards' Charter is available on ASX’s website at
www.asx.com.au/about/corporate-governance.htm

Remunerate fairly and responsibly

ASX aims to attract and retain high quality directors and to attract,
motivate and retain high quality senior executives.

The Board oversees executive remuneration and non-executive director
remuneration arrangements. It has established a Remuneration
Committee to assist it in this regard.

The Remuneration Committee helps bring the focus and independent
judgement needed for remuneration decisions.

The Remuneration Committee’s responsibilities are set out in its
Charter. These include reviewing and making recommendations
(or reporting) to the Board on:

• The remuneration policy and remuneration framework (includ-

ing incentive arrangements) for ASX staff

• Compliance of remuneration arrangements with the Financial

Stability Standards and other regulatory requirements

• Incentives and behaviours arising from ASX’s remuneration

framework

• The performance of senior executives
• Recruitment and retention strategies as well as succession

plans

• Remuneration by gender

• Remuneration framework for non-executive directors.

The Remuneration Committee Charter is available on ASX’s
website at www.asx.com.au/about/corporate-governance.htm

The Remuneration Committee is currently comprised of four
independent, non-executive directors. Heather Ridout is the
Committee Chair. Rick Holliday-Smith, Melinda Conrad and Peter
Warne are also Committee members.

It is a requirement under the Remuneration Committee Charter
that the Committee Chair be an independent director who is not
the Chairman of the ASX Board.

Under its Charter, the Remuneration Committee has unrestricted
access to all staff and relevant records of the ASX it considers
necessary to fulfil its obligations. It also has the right to seek
explanations and additional information from management and
auditors. The Committee Chair may directly seek independent
professional advice at ASX’s expense as required for the Committee
to fulfil its responsibilities.

The number of times the Committee met during FY20 and the
individual attendance of its members at those meetings are disclosed
on page 41.

Details of executive and director remuneration and ASX’s remuneration
policies are disclosed in the Remuneration Report on pages 46 to 62.

ASX Annual Report 2020 Corporate governance continued

REMUNERATION
REPORT

Remuneration report

Dear fellow shareholders,

On behalf of the Board, I am pleased to present the Remuneration
Report for the 2020 financial year (FY20).

The Board is committed to ensuring that remuneration outcomes for
Executives are aligned with the value created for our shareholders
and customers. This value is generated by the collective effort of our
employees. In a year when the impacts of COVID-19 are felt throughout
the economy and in communities around the globe, supporting our
employees is more important than ever.

Value created for shareholders

ASX's performance was resilient to the challenges of FY20 on both
an absolute and relative basis. The Group’s net profit after tax was
$498.6 million, allowing total dividends for the year of 238.9 cents per
share. This represents a payment equivalent to 90% of our underlying
earnings. Earnings per share were 257.6 cents, up 1.4% compared
to the prior year. These solid achievements in FY20 are consistent
with ASX's long-term performance. ASX's total shareholder return
as measured by the long-term incentive plan over the four-years to
30 September 2019, was 147%. This compared to the median for ASX
100 companies of 47%.

Value created for customers

FY20 saw unprecedented volatility in all of our markets. There were
43 days where the daily trading volume for equities exceeded the
record from prior financial years and the highest daily volume in
FY20 was 150% higher than the previous record. Also during this
period, our BBSW benchmark saw a 100% increase on its previous
record number of trades. Throughout this heightened activity,
ASX continued to deliver customers the value of open, reliable and
transparent markets. Operational uptime was maintained across
the year for all key systems.

Supporting our employees

To deliver value to our shareholders and customers, ASX relies on
the talent, skill and dedication of our people. Much of the market
volatility was managed while moving all employees to work from
home, except on-site critical staff. In fact, the first day of ASX
working from home coincided with the largest drop in our equity
market since the 1987 share market crash.

• Delivering customer value by progressing our CHESS

replacement project, product enhancements and directly
supporting issuers during the COVID-19 period

• Continuing to pursue new business opportunities with initia-

tives like our DataSphere offering.

Executive remuneration outcomes

Fixed remuneration
For FY20, the Board increased the fixed remuneration of the Chief
Operating Officer and Chief Risk Officer by 7% and 9% respectively.
This reflects their strong performance and the market benchmarks
for these roles. The fixed remuneration for these roles was unchanged
for the two prior financial years.

In August 2020, the Board determined that fixed remuneration will
remain unchanged for all Executives, including the CEO, in the 2021
financial year.

Short-term incentive (STI) outcomes
Target STI amounts for Executives are established at the commence-
ment of each year and revised annually. A Group incentive pool is
determined each year, being the sum of all target STI amounts for
Executives and other employees within that STI Plan. In each year,
the maximum value available under the Group incentive pool is
determined by the Board. The Board determines the Group incentive
pool based on the achievement of goals in the Group Scorecard,
Vision, Strategy and Execution goals, and the management of risk.

Based on the Group’s performance, the Board determined that the
Group incentive pool will be 100% of target. Further detail regarding
how the Group incentive pool was determined is discussed in section
3.2 of this Remuneration Report.

Subject to the Group incentive pool, Executives may typically receive
an STI payment around their target opportunity, where they have
achieved their goals. An Executive's goals are drawn from the
Group Scorecard, the Vision, Strategy and Execution goals, division-
specific goals and individual goals based on the accountabilities of that
Executive’s role. The ASX values and risk management are also explicitly
considered, as they guide the way Executives behave in achieving
their goals and how they manage risk.

In FY20, the STI outcomes for Executives ranged from 95% to 110%
of their target STI, with the average STI outcome being 104%.

Employees were supported with technology, home ergonomic assess-
ments, and mental and physical wellbeing resources to help them
adapt to new modes of working. Employees reported 96% confidence
in ASX leadership and decision-making during this period.

Long-term incentive (LTI) outcomes
The performance rights granted under the LTI Plan are measured
against underlying earnings per share (EPS) targets and relative
total shareholder return (TSR) targets.

Strategic delivery

Despite the impact of COVID-19 on markets and economies in FY20,
ASX continued to strike a balance between day-to-day operational
management and long-term strategic priorities, which support the
company’s vision to be the world’s most respected financial market-
place. Highlights include:

• Strengthening our foundational platform through the

completion of the Building Stronger Foundations initiative in
late 2019 and the rollout of Group-wide risk reporting tools,
mitigation plans and heat maps

• Building an exchange for the future with the continued

implementation of our multi-year technology refresh program

In FY20, the LTI granted in FY16 was tested. ASX’s relative TSR
was in the 88th percentile of the peer group and therefore the
TSR-related portion of this award vested in full. ASX's underlying
EPS compound annual growth rate over the performance period
was 5.08%, below the threshold of 5.10% required for vesting. The
EPS portion of the LTI subsequently lapsed. Further details of the
LTI Plan can be found in section 4.5 of this Remuneration Report.

The Board believes these remuneration outcomes are aligned with
the results achieved for our shareholders, customers and other
stakeholders. We thank you for your support.

Heather Ridout
Chair, Remuneration Committee

ASX Annual Report 2020 Remuneration report

Remuneration report continued

Contents

1. Key Management Personnel covered in this report

2. Glossary of key terms

3. Snapshot of FY20 Group performance and reward

4. Executive remuneration framework

5. Remuneration governance

6. Statutory remuneration disclosure – Executives

7. Non-executive director remuneration arrangements

1. Key Management Personnel covered in this report

This Remuneration Report details the performance and remuneration of Key Management Personnel (KMP) for FY20. KMP is defined
as persons having authority and responsibility for planning, directing and controlling the activities of an entity, directly or indirectly. The
KMP comprise of:

• Non-executive directors of ASX Limited

• The CEO and members of the executive team who are accountable for managing critical operational activities, financial control or risk

functions (collectively termed Executives).

Name

Non-executive directors
R Holliday-Smith

Y A Allen

M B Conrad

K R Henry

P R Marriott

P S Nash

H M Ridout

D Roche

P H Warne

R Woods

Executives
D J Stevens

P D Hiom

T J Hogben

G L Larkins

H J Treleaven

Role

Chairman

Non-executive director

Term as KMP

Full year

Commenced 1 January 2020

Managing Director and Chief Executive Officer (CEO)

Deputy Chief Executive Officer (Deputy CEO)

Chief Operating Officer

Chief Financial Officer

Chief Risk Officer

Full year

2. Glossary of key terms

Term

EPS

Meaning
Earnings per share, defined as the underlying net profit after tax divided by the weighted average number of issued shares
during the year. The LTI Plan has two performance measures, one of which is EPS.

Executives

The CEO, Deputy CEO, Chief Financial Officer, Chief Operating Officer and Chief Risk Officer.

KMP

TSR

Key Management Personnel are those people with authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly. KMP comprise non-executive directors, as well as Executives as defined above.

Relative total shareholder return, defined as share price growth plus dividends paid over the measurement period
compared to peers. Dividends are assumed to be reinvested on the ex-dividend date. The LTI Plan has two performance
measures, one of which is TSR.

48 ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

3. Snapshot of FY20 Group performance and reward

3.1 Remuneration received or available in the financial year

This section provides a snapshot of the performance of the Group and the corresponding remuneration outcomes. The remuneration
illustrated in section 3.1 has been provided as additional non-statutory information to assist in understanding the total value of remuner-
ation received by Executives in the current and prior financial years. The value of equity in this section is calculated in a different way to
the statutory disclosure in section 6.

Previous year awards that
vested during the year

Current
D J Stevens
CEO
P D Hiom
Deputy CEO

T J Hogben
Chief Operating Officer
G L Larkins6
Chief Financial Officer

H J Treleaven
Chief Risk Officer

Total

Year

2020
2019

Total fixed
remuneration1
a

Other
remuneration2
b

STI awarded
and paid3
c

Total
payments

d=a+b+c

Deferred STI
vested4
e

LTI vested5
f

2,000,000
2,000,000

1,000,000
1,000,000

725,000
675,000

800,000
538,462

875,000
800,000

5,400,000
5,013,462

1,999
2,610

380,447
1,757

101,999
202,610

488,443
212,197

840,000
868,000

380,000
434,000

231,000
195,300

320,000
225,534

132,000
133,334

1,903,000
1,856,168

2,841,999
2,870,610

1,381,999
1,436,610

957,999
872,910

1,500,447
765,753

1,108,999
1,135,944

7,791,443
7,081,827

789,693
-

431,489
395,767

204,021
138,535

-
-

43,434
-

1,468,637
534,302

-
-

531,555
-

-
-

531,555
-

Total
remuneration
received

g=d+e+f

3,631,692
2,870,610

2,345,043
1,832,377

1,162,020
1,011,445

1,500,447
765,753

1,152,433
1,135,944

9,791,635
7,616,129

1 Base salary, superannuation, non-monetary benefits and benefits that have been salary sacrificed such as participation in the employee share plan.
2 Salary continuance insurance for all Executives. Benefits to specific Executives include:

– Hamish Treleaven: deferred cash payments were made in FY19 and FY20 in connection to the commencement of his employment, which were subject to his

service and sufficient performance standards being met.

– Gillian Larkins: a tranche of deferred equity vested on 1 September 2019. The value has been calculated using the total number of shares vested and the five-

day volume weighted average price of ASX ordinary shares up to and including the vesting date.

3 The portion of STI awarded for the financial year in cash. The remaining portion of STI in respect of FY20 but deferred for two and four years, is shown in

table 6.1.

4 The value of deferred STI awarded in prior years as restricted ASX ordinary shares, that vested in the current financial year. The value disclosed is based on the

five-day volume weighted average price of ASX ordinary shares up to and including the vesting date.

5 The FY20 value for Peter Hiom relates to the vesting of the 2015 LTI offer. It has been calculated using the total number of rights vested, multiplied by the five-

day volume weighted average price of ASX ordinary shares up to and including the vesting date. No LTI vested during FY19.

6 Gillian Larkins commenced in her role on 29 October 2018. Her 2019 remuneration reflects the portion of the year worked.

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

3.2 FY20 Group performance

The Board assesses the performance of the Group against the Group Scorecard, the achievement of Vision, Strategy and Execution goals,
and the management of risk. This assessment informs the Board’s determination of the Group incentive pool, which limits the total value of
STI payments available.

The Board believes ASX has a robust remuneration governance framework in place, which supports the exercise of discretion to ensure
variable remuneration outcomes are appropriate. In FY20, ASX delivered resilient financial performance and achieved many of the Group's
key strategic priorities, however the delivery of some goals has been delayed. The Board considered the operating and financial impact of
COVID-19 on the Group’s performance and believes the Group incentive pool of 100% appropriately reflects the underlying performance of
the Group. The following table summarises the Group’s FY20 performance against ASX’s financial measures and five strategic priority areas.

Performance
against expectations

Not met

Met

Exceeded

Measure

Actual outcome

Financial objectives

Revenue

$938.4 million, up 8.6% on FY19

Total expenses

9.0% growth, above guidance

Earnings before interest and tax
(EBIT)

Statutory net profit after tax
(NPAT)

$652.2 million, up 8.5% on FY19

$498.6 million, up 1.4% on FY19

Underlying NPAT

$513.8 million, up 4.4% on FY19

Earnings per share (EPS)

257.6 cents, up 1.4% on FY19

Underlying EPS

265.4 cents, up 4.4% on FY19

Dividends per share (DPS)

238.9 cents, fully franked, up 4.5% (excluding FY19 special dividend)
Payout ratio 90%

Capital expenditure

$80.4 million, in line with guidance

Enduring trust, integrity and resilience

Increase employee focus on risk
awareness, accountability and
speaking up

ASX measures employee risk awareness through our annual risk survey. Employees
reported increased focus on risk awareness, accountability and speaking up, with all
three reporting favourable scores above 90%.

Deliver improved risk ownership
and effective risk management
practices

Launched new risk management tool to improve the way business owners and risk
champions capture, manage and monitor risks and controls in their businesses, as part
of a three-year program to uplift risk management practices.

Implement listing rule and
guidance changes

Major listing rule reforms came into effect 1 December 2019, which help improve
disclosures to the market, make the listings rules easier to understand and comply
with, and enable ASX to better monitor and enforce compliance with the rules.

Complete secondary data centre
system migration

Complete equities infrastruc-
ture upgrade to production
ready status

Enhance ASX’s privacy frame-
work to meet increasing
demands for the protection and
ethical use of personal data

All activities operated within
regulatory requirements

All systems meet availability
targets

Secondary data centre system migration complete.

Equities infrastructure upgrade re-prioritised for October 2020 completion.
Milestones are currently tracking to the revised plan to be production ready.

A review of ASX's privacy framework has been conducted. ASX remains compliant
with Australian Privacy Principles, and further enhancements in the management
of personally identifiable data have been implemented.

No significant regulatory breaches (legal, compliance, finance, tax or operations).

Average system uptime for our critical systems over the past 12 months was 100%.

50 ASX Annual Report 2020 Remuneration report continued

Performance
against expectations

Not met

Met

Exceeded

Remuneration report continued

Measure

Actual outcome

Innovative solutions and technology

Delivery of CHESS replacement
program milestones

Implement system upgrade
to enhance ASX 24 market
surveillance

System development continues in preparation to open the industry test environ-
ment in FY21. Significant progress has been made with seven software releases
deployed, progressed rule consultation and extensive industry engagement. A
consultation was undertaken on a revised implementation timetable in response
to the COVID-19 pandemic, requested functionality changes, and to provide more
time for both ASX and all participants to complete their readiness activities.

Market surveillance upgrade completed and successfully operating during critical
periods of heightened activity and volatility in FY20.

Deliver ASX Trade platform
refresh project milestones

Significant progress made on this multi-year project, with major milestones related
to infrastructure installation and software acceptance met.

Customer-focused

Drive a customer-focused
culture to deepen insights, and
improve customer value and
service experience

Enhance ASX digital founda-
tion and customer connection
through development and
launch of new asx.com.au site

Diverse ecosystem

Diversified listings strategy to
expand the investment ecosys-
tem and attract foreign and
technology listings

Strengthen the rates ecosystem
by developing a new secured
funding reference rate and
diversifying the client base

ASX has developed a new approach to customer experience in FY20.
Enhancements to support ASX's customer-focused culture include the innovative
use of data, targeted customer dialogue and improved management tools.

Refreshed ASX digital portal now available and being progressively rolled out,
providing a clear and modern channel for all ASX customers to interact with the
exchange.

In FY20, 59 new technology and foreign company listings, 60 new products and
135 advisers joined the ecosystem. The S&P/ASX All Technology Index was also
launched.

Client base diversification has occurred throughout the year. Development of
secured funding reference rate rescheduled for FY22 in line with operational
considerations.

Expand DataSphere with exter-
nal, listed company and fixed
income products

ASX equities historical order book data, listed company products and fixed income
products now available through the DataSphere webstore. Over 50 ASX datasets
have been onboarded to the platform to support product development.

Collaborative culture

Design and deliver a new
graduate recruitment program
to build future skills and
capabilities

A new graduate program was designed and delivered in FY20 to grow ASX's data
science, analytics, and digital capabilities.

Support a diverse and inclusive
culture at ASX with the develop-
ment of four diversity initiatives

Diversity and inclusion have been a focus of our people. Programs to enhance
diversity of thought, inclusion, community participation and gender-balanced
talent acquisition have been delivered.

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

3.3 FY20 Executive STI outcomes

The STI for Executives is based on a combination of the Group’s performance (the Group incentive pool) and an individual’s performance. Subject
to the Group incentive pool, Executives may typically receive an STI payment around their target opportunity, where they have achieved their
goals. An Executive's goals are drawn from the Group Scorecard, the Vision, Strategy and Execution goals, division-specific goals and individual
goals based on the accountabilities of that Executive’s role. The ASX values and risk management are also explicitly considered, as they guide
the way Executives behave in achieving their goals and how they manage risk.

Total STI awarded1,2

Current
D J Stevens

P D Hiom

T J Hogben

G L Larkins

2,100,000

950,000

577,500

800,000

105%

95%

110%

100%

Cash payment paid
August 2020

STI deferred for 2 years
(vesting August 2022)3

STI deferred for 4 years
(vesting August 2024)3

840,000

380,000

231,000

320,000

630,000

285,000

173,250

240,000

630,000

285,000

173,250

240,000

H J Treleaven
1 Total STI award including cash payment and deferred component.
2 The STI forfeited is determined by subtracting the ‘total STI awarded %’ from the maximum potential STI of 150% of target. The average STI forfeited by

330,000

132,000

99,000

110%

99,000

Executives in FY20 was 46% of target (compared to 41% of target in 2019).

3 The deferred STI awards are subject to continued employment and satisfactory performance over the deferral period.

3.4. Long-term performance

Our long-term performance can be measured by our progress to achieve our vision to be 'the world's most respected financial marketplace'.
This means being respected by analysts and investors, by customers, staff, government, regulators and peer markets.

The strategy to achieve our vision involves five interdependent elements. There has been significant progress in each of these areas.
A summary of some significant achievements over the last four years is provided in the following table:

Outcomes for customers and stakeholders

Achievements

We are continuing to build diverse ecosystems to improve
the service offering to our customers and the resilience of
our business model.

Within each business unit, we have diversified their respective ecosys-
tems. Highlights include:
• The revitalised BBSW benchmark with world-leading calculation meth-

Customer

centric

Enduring trust,

integrity and resilience

Innovative solutions
and technology

Diverse
Diverse
ecosystem
ecosystem

Collaborative
culture

Creating a diverse ecosystem is about more than products
and services. It is also about providing an open system of
collaboration and partnerships with benefits across the
entire system.

Our focus on enduring trust, integrity and resilience is funda-
mental to our core offering, our brand value and our licence
to operate in the Australian market.

Diverse
ecosystem

Innovative solutions
and technology

Our work in this area contributes to us operating a resilient,
fair and open marketplace, especially in the face of volatility
and under market pressure. These demonstrated capabil-
ities have enhanced the open, respectful and constructive
relationship ASX has with its regulators.

Collaborative
culture

odology and robustness

• The offshore expansion of ASX’s futures client base following the tech-

nology upgrade of ASX’s futures trading platform

• The launch of the S&P/ASX All Technology Index, reflecting the growth in

the size and value of the listed technology sector

• The development of DataSphere, a data platform enabling ASX to offer

new data sets as well as analytics capability and third party data.

• Completion of the three-year Building Stronger Foundations program.
• Enhancement of risk management in ASX’s clearing houses.
• Embedded a risk and compliance-focused culture, with 97% of our

people believing ASX is serious about creating a culture of risk aware-
ness, accountability and speaking up.

• Delivered consecutive years of 100% uptime availability of the five main

trading and post-trade systems for Australia’s financial markets.

Embracing innovation and being open to change supports
ASX’s position as a leading global market, earning the
respect of our stakeholders and peer markets.

• Developing a vision for, and progressing the modernisation of, the

settlement of transactions through the replacement of CHESS using
distributed ledger technology.

Diverse
ecosystem

Collaborative
culture

Our capability to innovate, to make life easier for customers
and to help companies grow, creates value for shareholders
and advances the Australian economy.

ASX promotes customer-focused thinking across the whole
of ASX. Companies, corporates and issuers of capital from
Australia and around the world engage with ASX to manage
risk and raise capital to grow. Our customers value ASX’s
Enduring trust,
Collaborative
operating strength, resilience and dependability. Having a
integrity and resilience
culture
reliable, well-capitalised and trusted company at the heart of
Australia’s financial markets has never been more important.

Innovative solutions
and technology

Diverse
ecosystem

Customer
Customer-
centric
focused

• Updating legacy systems and technologies to improve our operating
resilience and efficiency, including opening our secondary data centre
and upgrading our market surveillance tools.

• In FY20, ASX released a major package of listing rule amendments to

make the rules easier to use and comply with, as well as to enhance the
monitoring and enforcement of compliance.

Customer
centric

Enduring trust,
Enduring
integrity and resilience
trust,
integrity and
resilience

Customer

centric

Enduring trust,
integrity and resilience

Innovative
Innovative solutions
and technology
solutions and
technology

Customer

centric

Enduring trust,

Innovative solutions

integrity and resilience

and technology

Diverse
ecosystem

Collaborative
Collaborative
culture
culture

The way we treat our employees drives engagement and
alignment between our people and ASX, ultimately allowing
us to attract and retain great people. Our people deliver the
innovation, proactive risk management and customer-
focused thinking that drives our company forward.

• Launched new employee ‘BE Values’ and embedded these in the organi-

sation. In FY20, 98.5% of employees demonstrated the values.

• ASX launched three new employee networking groups to celebrate our
people’s culture and heritage, support LGBTIQ+ employees and encour-
age community participation and giving.

52 ASX Annual Report 2020 Remuneration report continued

82.37

85.38

64.39

53.61

45.76

129.1

99.0

99.8

109.1

114.3

122.5

99.1

102.0

107.2

114.4

116.4

Remuneration report continued

Through the continued execution of our customer-focused, technology-driven strategy, we are working towards the ongoing delivery of attrac-
tive returns to shareholders over time. The following charts illustrate the long-term performance of the Group against key financial metrics.

Underlying earnings per share (cents)

Dividends per share (cents) and
share price ($ at end of financial year)

Statutory net profit after tax ($million)
and STI outcome (% of target) for
Executives

109%

104%

99%

92%

77%

492.0

498.6

220.4

224.5

240.4

254.1

265.4

426.2

434.1

445.1

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

FY16

FY17

FY18

FY19

FY20

STI outcome % for executives

Interim Final

Special

Share price ($)

Impact on Executive reward
ASX’s remuneration framework focuses Executives on attaining long-term, sustainable performance. This is achieved by connecting our
Executives to the experience of shareholders through equity-based deferral of their STI and through the LTI. The LTI rewards the achievement
of meeting challenging performance hurdles based on the underlying EPS compound annual growth rate and the relative TSR compared
to other ASX 100 companies, excluding property trusts. Both performance measures are assessed over four years.

In FY20, the 2015 LTI grant was tested.

• ASX’s underlying EPS compound annual growth rate over the four years to 30 June 2019 was 5.08%, which did not meet the

minimum performance hurdle of 5.10%, and this award subsequently lapsed. ASX's long-term underlying EPS can be seen on the
preceding chart.

• ASX’s relative TSR was in the 88th percentile of the peer group and therefore the TSR-related portion of this award vested in full.

The relative TSR of ASX compared to the peer group can be seen in the following chart.

ASX four-year relative TSR against the ASX 100 excluding property trusts

500%

300%

200%

100%

-100%

147%

47%

1 3 5 7 9

X
S
A

3
1

5
1

7
1

9
1

1
2

3
2

5
2

7
2

9
2

1
3

3
3

5
3

7
3

9
3

1
4

3
4

5
4

7
4

9
4

1
5

3
5

5
5

7
5

9
5

1
6

3
6

5
6

7
6

9
6

1
7

3
7

5
7

7
7

9
7

1
8

Total shareholder Return (4 years)

ASX

Median

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

4. Executive remuneration framework

4.1 Executive remuneration principles

The Board have determined six principles which provide a clear link between our vision, our business strategy and our remuneration
framework. A summary of the new remuneration principles and their delivery through the remuneration framework is provided below.

Principle

Execution

Vision and strategy

• To support the realisation of ASX’s vision and delivery of our strategy, Executives are rewarded for

Supports the realisation of
ASX’s vision and its strategy, to
create long-term, sustainable
shareholder value

Vision and
strategy

Customer
focussed

Holistic
performance

both the short-term and long-term performance of the Group.

• The STI is based on the achievement of short-term goals aligned to ASX’s strategy.
• The LTI is aligned to the creation of shareholder value through the relative TSR and EPS hurdles.
• A portion of an Executive’s total variable award is managed through the compulsory deferral in ASX

shares, creating alignment with shareholders through the performance of ASX’s share price.

Risk aligned

Market
competitive

Fair and
equitable

Customer-focused

Reflects the outcomes achieved
for ASX’s customers

• Both the performance of the overall Group and the performance of individual Executives are

assessed against the strategic priorities, with customer-focused goals playing a significant role.

• In determining final variable remuneration outcomes, the Board assesses Executives’ roles in

leading a customer-focused culture and takes into account the range of customer outcomes that
have been achieved in the performance period.

Applies appropriate financial
and non-financial performance
measures and reflects the
accountabilities of each role
Risk aligned

• An Executive delivers value through their achievement of financial goals, quantifiable non-

financial goals and delivering against the core accountabilities of their role. ASX believes it is also
important how an Executive achieves their results, and measures their demonstration of behav-
iours aligned to the ASX values.

• To determine what reward may be provided to Executives, each year a performance assessment
is undertaken that includes a self-assessment, manager assessment and Board assessment. This
process incorporates subsidiary board or committee feedback where appropriate.

Fair and
equitable

Market
competitive

Risk aligned

Encourages behaviours aligned
to our values, our risk manage-
ment framework and our
licence to operate
Market
competitive

Market competitive

Attracts and retains employ-
ees with the skills required to
deliver ASX’s strategy

• The Board considers the management of risks undertaken in determining variable remuneration

outcomes, including the vesting of performance rights previously awarded.

• ASX defers a portion of STI awards over two and four years to ensure risks are appropriately

considered over the longer term before value is received by the Executive. ASX measures the LTI
over a period of four years. All variable remuneration is subject to satisfactory performance and
the Board has discretion to make adjustments to deferred remuneration. Adjustments can include
partial reductions or complete forfeiture of deferred awards.

Fair and
equitable

• ASX provides competitive total remuneration that is benchmarked against market data for

comparable roles in companies of a similar size and other publicly available market information.

Vision and
strategy

Customer
focussed

Holistic
Holistic performance
performance

Risk aligned

Market
competitive

Fair and
equitable

Vision and

strategy

Customer
focussed

Holistic
performance

Vision and

strategy

Customer

focussed

Holistic
performance

Risk aligned

Vision and

strategy

Customer

focussed

Holistic

performance

Risk aligned

Market
competitive

Fair and equitable

Fair and
equitable

Awards fairly and equitably

• The Board regularly reviews remuneration outcomes across the whole organisation to ensure

there is no bias in how employees are rewarded due to any employee’s personal characteristics.

Vision and

strategy

Customer

focussed

Holistic

performance

Risk aligned

Market
competitive

Fair and
equitable

4.2 Executive remuneration components

The remuneration arrangements for Executives are made up of both fixed and variable remuneration. Variable remuneration is provided
through the STI and LTI.

4.3 Fixed remuneration

ASX provides competitive fixed remuneration to attract and retain talent. Fixed remuneration is paid as cash and comprises salary,
superannuation, and salary sacrificed items including non-monetary benefits and share-based payments. Fixed remuneration is set with
reference to relevant market benchmarks, which are typically within the banking, finance, legal, technology and other sectors relevant to
ASX’s functions, or to the broader market. Fixed remuneration is reviewed annually.

54 ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

4.4 Short-term incentive

The considerations in determining the STI outcomes for Executives are illustrated in the following diagram.

Group incentive pool %
Determines the available pool
based on Group performance

Target STI in $
Target reward model

On-target STI as % of total reward

Individual performance rating
Individual goals linked to ASX strategy
determine the individual performance
outcome and range of STI outcomes

Behaviours and risk management
used as a ‘moderator’ to determine
the initial STI recommendation

STI outcome
Board determines the ﬁnal STI outcome

60% of STI award is deferred into
equity for between two and four years

The following table outlines the key elements of the STI Plan.

Purpose

Performance

• Encourage the achievement of financial and non-financial goals that support the Group's strategy.
• Reflect the appropriate management of risk.
• Deferral periods extend the reward timeframe to consider risks being managed.
• Reflects behaviours to ensure employees act in accordance with ASX’s values.
Group performance
• The target STI pool for Executives is calculated as the

Individual performance
• Individual performance is based on a holistic assessment of

sum of individual target STIs.

• Following an assessment of the Group’s performance, the
Board determines what percentage of the pool may be
released. This is referred to as the Group incentive pool.

• The Group incentive pool represents the maximum

amount available for STI payments across employees
under the STI Plan. Less than this amount may be spent
depending on individual performance.

an Executive's performance and behaviours across their core
accountabilities and their delivery of strategic projects.

• An Executive's goals are cascaded from the Group Scorecard,
the Vision, Strategy and Execution goals, and the division-
specific goals drawn from the accountabilities of an Executive’s
role.

• An Executive’s performance rating determines what percentage

of individual STI targets are received.

• The CEO's STI is determined separately to the target STI

• The range is 0% to 150%.

pool.

Evaluation and
approval

• The CEO presents the Board with an assessment of the
Group’s performance based on achievement against the
Group Scorecard, the Vision, Strategy and Execution
goals, and management of risk.

• The Chief Risk Officer makes an assessment of risk management
for all Executives, incorporating feedback from other control
functions. The Chief Risk Officer subsequently provides this
assessment directly to the Remuneration Committee.

• The Board incorporates feedback from the CEO and the
Chief Risk Officer and other relevant control functions to
determine the Group incentive pool.

• The CEO recommends to the Remuneration Committee the

individual performance ratings and the percentage of STI target
to be applied for Executives reporting to him, considering feed-
back from the Chief Risk Officer, the Audit and Risk Committee,
and Clearing and Settlement boards where appropriate. The
Chairman of the Board provides performance and STI recom-
mendations for the CEO, considering the Chief Risk Officer and
Board feedback to the Remuneration Committee.

• The Remuneration Committee considers the Chairman's and
CEO’s recommendations, as well as the Chief Risk Officer's
assessment, and then determines the final recommendations for
all Executives that will be submitted to the Board for approval.

Instrument

Treatment upon
departure

• 40% of the STI is delivered in cash, with 60% deferred into restricted ordinary shares. Half of the deferred portion vests after
two years of ongoing employment, with the remainder vesting after four years of ongoing employment. Restricted shares
hold the same rights as ordinary shares, including voting and receiving dividends.

• Under the rules of the STI Plan, unless the Board determines otherwise, shares subject to a holding lock will be forfeited if

the participant’s employment is terminated other than for a qualifying reason, or if a condition of the invitation to participate
in the plan has not been met in the time specified in the invitation. A qualifying reason means death, permanent disability,
retirement, hardship, redundancy or another reason determined by the Board. If the participant’s employment is terminated
for a qualifying reason, the Board retains a discretion to determine that some or all shares will not be forfeited and release
the holding lock.

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

4.5 Long-term incentives

Key features of the plan are summarised below.

Purpose

• Encourage performance that creates long-term value for shareholders. The combination of relative TSR and underlying EPS

Performance

Performance
measures

hurdles provides balance to the plan by measuring performance on a relative and absolute basis:

- Relative: rewards participating Executives for performance that exceeds that of peer companies

- Absolute: ensures there is a continued focus on providing positive growth, a core measure of value created.

Participation is limited to the CEO and Deputy CEO.
The face value of the maximum potential LTI award for the CEO and Deputy CEO is 50% of their fixed remuneration.

External performance measure
Relative total shareholder return (50%)
• Relative TSR is measured over a four-year period against a

peer group determined by the Board at the time of the offer.
Currently, it is based on the ASX 100, excluding property
trusts.

Internal performance measure
Underlying earnings per share growth (50%)
• Underlying EPS performance is measured over a four-year
period using the most recent financial year-end prior to the
granting of the award as the base year, and the final financial
year in the performance period as the end-year.

• The peer group may change as a result of specific events
such as mergers and acquisitions or de-listings. The plan
rules determine the adjustments of the peer group following
such events.

Vesting schedule

Performance
Less than 51st percentile

51st percentile

Vesting
0%

25%

Greater than 76th percentile

100%

Calculation

Vesting occurs in a straight line between the 51st and 76th
percentile
• TSR of ASX and the peer group is calculated as the move-
ment in share price and dividends received, assuming the
re-investment of dividends.

• The TSR is calculated over a four-year period, using the
three-month volume weighted average price up to (and
including) the start date, and the three-month volume
weighted average price including the reinvestment of divi-
dends up to (and including) the end date of the performance
period.

Performance p.a.
Less than 5.1%

5.1%

Greater than 10%

Vesting
0%

50%

100%

Vesting occurs in a straight line between 5.1% and 10%

• Underlying EPS is calculated by dividing the underlying profit
after tax for the relevant reporting period (profit after tax
adjusted for the after tax effect of any significant items) by
the weighted average number of ordinary shares of ASX. This
is then compared to the starting EPS, calculated in a similar
fashion to determine the EPS performance.

• To arrive at underlying profit after tax, significant items may
be excluded. These items are determined by the Board and
may include revenues and expenses associated with specific
events or the results of corporate actions. Exclusion of these
items would be clearly identified and explained if such action
impacted any vesting outcome. An example of an excluded
significant item is the Yieldbroker impairment in FY18. The
impairment has not impacted the vesting outcome of any
prior award.

Performance period

Four years

Instrument

Determining
the number of
performance rights

Expiry

Dividends

Retesting

Treatment upon
departure

Performance rights over ASX ordinary shares. For grants made from FY19 onwards, the Board may, at its discretion, elect
to settle vested LTI allocations with a cash equivalent payment. The value of the cash payment will be determined based on
the number of rights that have vested, multiplied by the volume weighted average price over the 20 trading days prior to the
vesting date.

The number of performance rights allocated is based on the volume weighted average price of ASX shares (face value) on the
10 business days preceding the grant date.

At the end of the performance period, any performance rights that have not vested will lapse.

Dividends are not paid on performance rights.

Performance rights will lapse if an Executive’s employment is terminated for cause or poor performance, or if the Executive
resigns. If an Executive ceases employment in other circumstances (for example, by mutual agreement with ASX, termination of
employment by ASX on notice, redundancy or retirement), any performance rights will remain on foot in accordance with their
original terms, except that any service condition will be waived, unless the Board determines otherwise. The Board retains a
discretion to determine the proportion of performance rights that remain on foot, vest or lapse.

56 ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

4.6 Executive remuneration mix

The Executives' remuneration is aligned to the executive remuneration principles set out in section 4.1. All Executives receive fixed remu-
neration and STI. In addition, the CEO and Deputy CEO receive an LTI component. The chart below sets out the remuneration structure
and mix for the CEO and Deputy CEO.

At-risk

Fixed remuneration
40%

Target STI
40%
Equity deferred 2 years
30%

Cash
40%

LTI grant face value
20%

Equity deferred 4 years
30%

TSR (50%
of award)

EPS (50%
of award)

The chart below sets out the remuneration structure and mix for Executives other than the CEO and Deputy CEO. These Executives consist
of the Chief Financial Officer, Chief Operating Officer and Chief Risk Officer.

Fixed remuneration
50-74%

At-risk

Target STI
26-50%
Equity deferred 2 years
30%

Cash
40%

Equity deferred 4 years
30%

4.7 Executive remuneration delivery

The chart below sets out the periods for awarding remuneration to the CEO and Deputy CEO. Other Executives are not eligible to receive
the LTI. For all Executives, a significant portion of their potential remuneration is deferred between two and four years from the end of
the current performance year.

FY20

FY21

FY22

FY23

FY24

Fixed remuneration

Cash STI

Deferred STI (equity)

LTI (equity)

Cash STI paid

Deferred STI and LTI grant

Deferred STI and LTI vesting

5. Remuneration governance

The diagram below provides an overview of governance arrangements relating to remuneration.

The Chief Risk Ofﬁcer
provides an independent
assessment of risk
management

The Audit and Risk
Committee and the
Clearing and Settlement
Boards provide input to the
Remuneration Committee

External advisers provide
independent advice

Remuneration
Committee

ASX Board

Shareholders

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

5.1 Role of the ASX Board

The Board oversees and approves the non-executive director remuneration and Executive remuneration arrangements. The Board has
established a Remuneration Committee for recommending remuneration policy for the Group. The ultimate responsibility for remuneration
policy matters rests with the Board.

5.2 Role and responsibilities of the Remuneration Committee

The Remuneration Committee develops the remuneration principles, framework and policies for the Group. The Remuneration Committee’s
responsibilities are outlined below.

Recommend to the Board:

• Remuneration arrangements and all reward outcomes for Executives

• Performance against goals and targets for Executives, incorporating an evaluation of risk management performance

• Remuneration for Executive appointments and retention matters

• ASX’s remuneration and incentive framework, including STI and LTI arrangements and participation

• Non-executive director fees.

Conduct reviews of:

• The ongoing monitoring of the effectiveness of the remuneration policy in supporting ASX’s values while complying with regulatory

requirements

• Executive succession and key staff succession plans

• Progress against gender diversity objectives and actively promoting a collaborative and inclusive culture

• The capabilities required to deliver the organisation’s strategy.

5.3 Board discretion relating to variable remuneration

The Board understands that to make good remuneration decisions it needs both a robust framework and to proactively and consistently
exercise judgement. The Board retains discretion to adjust any variable reward outcome, both prior to a payment being made or before
deferred remuneration vests.

The Board takes into account information from a range of sources to ensure decisions are well-informed, are not unduly influenced by
the views of interested executives, and consider the outcomes achieved for the company’s stakeholders. The Board has an established
process to seek feedback on Executive performance from the Audit and Risk Committee and the Clearing and Settlement boards, as well
as reports on risk management from the Chief Risk Officer and other control functions. Using this information, the Board evaluates remu-
neration outcomes against an agreed set of remuneration principles and relevant precedents. Executives are not able to participate in
discussions that impact their own remuneration. This approach ensures independence, objectivity, fairness and consistency in the process
of determining appropriate remuneration outcomes.

5.4 Clawback Policy

The Board retains discretion to adjust performance-based remuneration that has not yet been realised or vested without restrictions,
for any employee or group of employees within the ASX Group, if it considers that such remuneration would be an inappropriate benefit.

The Board has absolute discretion to determine what constitutes an ‘inappropriate benefit’. Examples that may lead to an inappropriate
benefit include:

• Mismanagement of material risk issues for the Group

• Fraudulent or dishonest behaviour

• A material misstatement or omission in ASX’s financial statements

• A breach of obligations to ASX

• Acting in a manner that brings ASX into disrepute

• Any other circumstances which the Board determines in good faith to have resulted in an 'inappropriate benefit'.

5.5 External advice

When an external perspective is needed, the Remuneration Committee may seek professional advice from remuneration advisers.
Remuneration advisers are engaged by the Committee independently of management when receiving remuneration recommendations,
as defined by the Corporations Act 2001. During FY20, the Committee did not engage any external advisers to provide remuneration
recommendations as defined by the Corporations Act.

58 ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

5.6 Engagement with external stakeholders

Each year, the ASX Chairman meets with investors and proxy advisers. These meetings provide an opportunity to discuss remuneration
practices and policies, and any issues raised by the investor or proxy adviser.

5.7 Share ownership

Share ownership is encouraged among non-executive directors to strengthen the alignment between their interests and the interests
of shareholders.

It is expected that all ASX non-executive directors hold a number of ASX shares equivalent in value to their base annual director fee
(and in the case of the ASX Chairman, the base annual director fee plus the Chairman fee), by the third anniversary of their appointment.

All non-executive directors who have served at least three years meet this guideline.

6. Statutory remuneration disclosure – Executives

6.1 Statutory remuneration

The remuneration table below has been prepared in accordance with accounting standards as required by the Corporations Act 2001. The
accounting standards require the disclosure of the expense or cost to the company in the financial years presented, which may result in
only a portion of cash remuneration being disclosed where payments are deferred to future financial years. In addition, the accounting
standards require the share-based payments expense to be calculated using the grant date fair value of the shares, rather than current
market prices.

Short-term

Long-term

Share-based payments

³
y
r
a
t
e
n
o
m
-
n
o
N

e
v
a
e

e
c
i
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a
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a

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e
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t
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6
n
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i
t
a
u
n
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r
e
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u
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e
s
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s
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e
h
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s
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n
e
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y
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n
a
P

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S

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L

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f
r
e
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e
r

a
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r
a
e
Y

y
r
a
a
S

²
I
T
S

2020
2019

1,963,513
1,962,590

840,000
868,000

963,513
962,590

380,000
434,000

15,484
16,878

9,648
2,610

13,166
7,709

21,003
20,531

1,061,784
820,603

152,768
220,172

2,004
70,419

15,693
(44,002)

21,003
20,531

622,875
513,750

85,900
43,503

695,251
644,978

231,000
195,300

8,746
9,490

24,690
(12,529)

25,822
10,761

21,003
20,531

274,171
227,819

-
-

778,997
522,610

320,000
225,534

-
-

17,043
36,008

837,668
769,335

132,000
133,334

5,238,942
4,862,103

1,903,000
1,856,168

16,329
10,133

56,043
53,379

62,684
52,786

116,069
149,294

2,284
1,044

4,783
2,870

21,003
15,851

126,863
-

-
-

270,993
355,678

1,537,183
1,156,725

21,003
20,531

156,626
94,877

-
-

1,231,093
1,083,866

61,748
(21,618)

105,015
97,975

2,242,319
1,657,049

238,668
263,675

270,993
355,678

10,232,797
9,273,703

-
-

4,077,366
3,919,093

2,106,472
2,017,669

1,280,683
1,096,350

50%
49%

52%
49%

39%
39%

29%
19%

23%
21%

43%
41%

Current

D J Stevens
CEO

P D Hiom
Deputy CEO

T J Hogben
Chief Operating
Officer
G L Larkins11
Chief Financial
Officer

H J Treleaven
Chief Risk Officer

Total

2020
2019

¹ Base salary excluding payments made under the compulsory superannuation guarantee.
2 The cash component of the STI earned over FY20, paid in cash in August 2020.
³ Salary-sacrificed items paid over the year including car parking (and associated fringe benefits tax) and participation in the employee share plan.
4 The value of annual leave accrued over the year and salary continuance insurance provided by the company. This column also shows the amortised value of

payments to Hamish Treleaven relating to his commencement of employment.

5 Long service leave accrued over the year.
6 Post-employment benefits, comprising the compulsory superannuation guarantee.
7 Annual share-based payments expense for restricted shares issued under the deferred STI Plan.
8 Annual share-based payments expense for performance rights issued under the LTI Plan. The expense is calculated using the fair value of performance rights

at grant date, less any write-back for performance rights lapsed as a result of non-market hurdles not attained. The LTI may be either equity or cash settled, as
determined by the Board. The FY20 and FY19 values reflect the reversal of the accrued expense of previous awards which did not vest.

9 The amortised value of 11,604 restricted shares granted to Gillian Larkins on 15 February 2019, with a volume weighted average price of $58.38. The restriction

on 40% of this allocation of shares lifted on 1 September 2019 with the restriction on the remaining 60% expected to lift on 1 September 2020, subject to ongoing
employment and satisfactory performance.

10 Reflects the percentage of total remuneration that is performance-related (short-term cash settled STI and shared-based payments relating to the LTI and

STI Plans).

11 Gillian Larkins commenced in her role on 29 October 2018. Her 2019 remuneration reflects the portion of the year worked.

ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

6.2 Current LTI grants

Shares relating to grants of performance rights that have vested are allocated from a trust established to hold shares for this purpose.
The table below sets out a summary of the LTI grants that were in operation during FY20.

Grant year

Grant date

Performance period

Vesting date

Vesting period

Participation

Performance rights awarded

Performance measure

EPS vesting commences at

TSR vesting commences at

Dividends paid

Retesting

Share price at grant date

Volatility p.a.

Discount rate (risk free rate) p.a.

Dividend yield p.a.

Fair value of performance rights
(EPS awards)
Fair value of performance rights
(TSR awards)
Weighted average AASB 2 share-based
payment fair value

2019

2018

2017

2016

24 September 2019

4 October 2018

26 September 2017

28 September 2016

25 September 2019
– 24 September 2023

5 October 2018
– 4 October 2022

27 September 2017
– 26 September 2021

28 September 2016
– 29 September 2020

24 September 2023

4 October 2022

26 September 2021

29 September 2020

4 years

CEO
12,281

Deputy CEO
6,141

CEO
15,843

Deputy CEO
7,921

CEO
18,975

Deputy CEO
9,488

CEO
20,889

Deputy CEO
10,445

50% EPS and 50% TSR

5.1% compound growth

51st percentile

$81.61

15%

0.72%

3.2%

$71.80

$29.83

$50.82

$62.01

16%

2.2%

3.70%

$53.48

$24.34

$38.91

$52.62

17%

2.24%

4.00%

$44.83

$23.78

$34.30

$47.78

17%

1.70%

4.60%

$39.75

$19.62

$29.68

As is customary, ASX will voluntarily submit Dominic Stevens' 2020 LTI grant for shareholder approval at the 2020 Annual General Meeting (AGM).

6.3 FY20 Executive LTI allocations

The following table shows the movement during the financial year in the number of performance-related rights over issued ordinary shares
in ASX held directly, indirectly or beneficially by the Executives, including their personally related parties.

Held as at
1 July 2019

Granted as
compensation
during the year

Vested during
the year

Lapsed during
the year

Held at
30 June 2020

Current
D J Stevens
P D Hiom
No other KMP had performance-related rights over issued ordinary shares in ASX directly, indirectly or beneficially.

55,707
40,895

12,281
6,141

-
(6,520)

-
(6,521)

67,988
33,995

6.4 Potential future value of LTI allocations for CEO and Deputy CEO

The following table shows the minimum and maximum values of performance rights that may be received by the CEO and Deputy CEO
as remuneration in future financial years:

Grant date:
Vesting date:

28 September 2016
29 September 2020
Min $1

Max $2

26 September 2017
26 September 2021

4 October 2018
4 October 2022

Min $1

Max $2

Min $1

Max $2

24 September 2019
24 September 2023
Min $1

Max $2

Current
D J Stevens
P D Hiom
1 Since the performance rights are issued with a zero exercise price, their minimum total value is nil, on the basis that they will not vest if the applicable perfor-

616,451
308,206

650,843
325,438

619,986
310,008

624,120
312,086

-
-

mance/vesting conditions are not met.

2 The amounts represent the maximum fair value for future years of the performance rights yet to vest, as at their grant date. The maximum total value is the

number of rights issued multiplied by the weighted average fair value.

60 ASX Annual Report 2020 Remuneration report continued

Remuneration report continued

6.5 Beneficial holdings of ordinary shares

Held at 1 July
2019

Received on vesting
of rights over
deferred shares

Allocated under
deferred STI Plan

Other changes

Held at 30 June
2020

47,640

63,989

13,060

11,604

3,991

6,520

15,272

7,636

3,436

3,968

2,346

(9,127)

(33,566)

(4,380)

(4,642)

53,785

44,579

12,116

10,930

6,349

Current
D J Stevens

P D Hiom

T J Hogben

G L Larkins

H J Treleaven

6.6 Service agreements

Minimum notice periods (months)

Name
D J Stevens

P D Hiom

T J Hogben

G L Larkins

Position held
CEO

Deputy CEO

Chief Operating Officer

Chief Financial Officer

Contract effective date1
1 August 2016

Executive
6

1 July 2015

1 April 2010

29 October 2018

ASX
12

Poor performance
3
31
11
31
31

H J Treleaven
1 All Executives have permanent ongoing contracts. Amounts payable on termination include the contractual notice period and any incentives that may be payable

Chief Risk Officer

1 March 2017

under the terms of the STI and LTI Plans, which are outlined in sections 4.4 and 4.5.

² The notice period for termination for poor performance requires an initial written notice of one month.

7. Non-executive director remuneration arrangements

Non-executive directors receive fees for their contribution on the boards and associated committees on which they serve. The Remuneration
Committee reviews and recommends to the Board the fees provided to non-executive directors.

Non-executive director fees are set to ensure:

• ASX non-executive directors are remunerated fairly for their services, recognising the workload and level of skill and experience

required for the role

• ASX can attract and retain talented non-executive directors.

7.1 Remuneration structure

ASX has not increased its non-executive director fees since October 2017. Under the non-executive director fee structure, remuneration
comprises one base fee (plus superannuation) in respect of a non-executive director appointment to the ASX Limited Board and any commit-
tee and/or its subsidiaries. An additional amount is paid to the chairperson of the ASX Limited Board or a committee or subsidiary board.

The aggregate amount paid to non-executive directors is approved by shareholders at the AGM. The maximum aggregate amount that
may be paid to all ASX non-executive directors in their capacity as members of the ASX Limited Board and its committees, and as non-ex-
ecutive directors of subsidiary boards, is $3 million per annum. This was approved by shareholders at the 2017 AGM. The amount paid in
FY20 was $2.87 million. Non-executive directors of independent subsidiary boards who do not serve on the ASX Limited Board are not
included in the fee pool.

Non-executive directors have no entitlement to any performance-based remuneration or participation in any share-based incentive
schemes. ASX does not have a non-executive director retirement scheme.

ASX Annual Report 2020 Remuneration report continued

2019

550,000

235,000

45,000

20,000

35,000

20,000

Total

571,003
570,531

256,003
255,531

301,003
300,531

256,003
7,230

276,003
275,531

291,003
290,531

276,003
275,531

128,001

Remuneration report continued

7.2 Non-executive director fee schedule

The following table summarises the fees received for each role on the Board.

Fees excluding superannuation ($)

Board/Committee

Board1

Audit and Risk Committee

Remuneration Committee

ASX Clear (Futures)

Austraclear

Role

Chair

Member

Chair

2020

550,000

235,000

45,000

20,000

35,000

20,000

1 ASX Limited Board fees include payment for membership of ASX Limited Board committees and Clearing and Settlement boards.

7.3 Director fees for FY19 and FY20

The following table sets out the statutory remuneration details for non-executive directors for FY19 and FY20.

Current

R Holliday-Smith

Y A Allen

M B Conrad

K R Henry

P R Marriott

P S Nash1

H M Ridout

D Roche2

P H Warne3

R Woods4

Total

Year

2020
2019

2020

2020
2019

Short-term salary
and fees

Post-employment
superannuation

550,000
550,000

235,000
235,000

280,000
280,000

235,000
6,603

255,000
255,000

270,000
270,000

255,000
255,000

117,500

21,003
20,531

21,003
627

21,003
20,531

10,501

2,667,500
2,321,603

199,528
164,875

2,867,028
2,486,478

1 Fees disclosed for Peter Nash in 2019 reflect the partial year worked, having commenced 19 June 2019.
2 Fees disclosed for Damian Roche include $35,000 per annum for his role as Chairman of ASX Clear (Futures) Pty Ltd.
3 Fees disclosed for Peter Warne include $20,000 per annum for his role as Chairman of Austraclear Ltd.
4 Fees disclosed for Rob Woods in 2020 reflect the partial year worked, having commenced 1 January 2020.

7.4 Equity holdings

The table below sets out current equity holdings for non-executive directors.

R Holliday-Smith

Y A Allen

M B Conrad

K R Henry

P R Marriott

P S Nash

H M Ridout

D Roche

P H Warne
R Woods1
1 The opening balance for Rob Woods is taken at his commencement date of 1 January 2020.

62 ASX Annual Report 2020 Remuneration report continued

Held as at
1 July 2019
12,000

Other changes
-

Held at
30 June 2020
12,000

5,000

5,316

5,000

10,000

6,000

2,000

3,000

5,000

5,316

2,000

5,000

10,000

6,000

3,000

Directors' report

The directors present their report which includes the Remuneration
Report, together with the financial statements of ASX Limited (ASX
or the Company) and its subsidiaries (together referred to as the
Group), for the year ended 30 June 2020 (FY20) and the auditor’s
report thereon. The financial statements have been reviewed and
approved by the directors on the recommendation of the ASX Audit
and Risk Committee.

The FY20 consolidated net profit after tax attributable to the owners
of ASX was $498.6 million (2019: $492.0 million).

Directors

The directors of ASX in office during the financial year and at the
date of this report (unless otherwise stated) were as follows:

• Rick Holliday-Smith (Chairman)
• Dominic J Stevens (Managing Director and CEO)
• Yasmin A Allen
• Melinda B Conrad
• Ken R Henry AC
• Peter R Marriott
• Peter S Nash
• Heather M Ridout AO
• Damian Roche
• Peter H Warne
• Rob Woods (appointed 1 January 2020).

Directors’ meetings and attendance at those meetings for FY20
(including meetings of committees of directors) are disclosed on
page 41. The qualifications and experience of directors, including
current and recent directorships, are detailed on pages 33 to 35.

Company secretaries

Daniel Moran
Group General Counsel and Company Secretary,
BA (UTS) LLB (UNSW)

Daniel Moran is Group General Counsel and Company Secretary.
Mr Moran joined ASX as Deputy General Counsel in 2010. Prior to
that he was a Senior Associate in the Australian law firm Herbert
Smith Freehills. Since joining ASX he has worked across ASX's
businesses and engaged closely with ASX's boards and committees
as a lawyer and company secretary.

Daniel Csillag
General Manager Company Secretariat and Senior
Legal Counsel, BA LLB (UNSW), FGIA

Daniel Csillag, General Manager Company Secretariat and Senior
Legal Counsel, is also a Company Secretary. He is responsible for
managing company secretariat and corporate governance support
across the Group.

Report on the business

Principal activities

During the year the principal activities of the Group consisted
of providing:

• Securities exchange and ancillary services

• Derivatives exchange and ancillary services

• Central counterparty clearing services

• Registry, depository, settlement and delivery-versus-payment

clearing of financial products

• Technical and information services.

Review of operations

Information on the operations and financial position of the Group,
and its business strategies and prospects, is disclosed in the
Operating and Financial Review on pages 10 to 19.

The global COVID-19 pandemic and the subsequent restrictions
imposed by various governments, including in Australia, caused
major disruptions to business operations. ASX implemented its
business contingency plan (BCP) to ensure the health and safety of
its employees, contractors and customers in line with government
social distancing measures and recommended guidelines. Despite
extraordinary global events, ASX’s BCP measures ensured that
the Group's core business functions remained resilient and strong
in FY20.

Operating revenue benefits from ASX's diverse business model,
where key revenue streams complement each other in changing
market conditions. For example, increased market volatility could
see a decrease in futures and OTC revenue due to lower volumes,
while being offset by an increase in listings revenue due to higher
secondary capital raisings. There have not been any significant
adverse financial or operational impacts as a result of the COVID-
19 pandemic to date and any known impacts to date have been
reflected in the FY20 financial statements.

Dividends

Information relating to dividends for the current and prior financial
year, including dividends determined by the Board since the end of
the financial year, is disclosed in note B3 of the financial statements
on page 77.

Significant changes in the state of affairs

There were no significant changes in the Group's state of affairs
during the year.

Events subsequent to balance date

Subsequent to balance date, ASX invested a further $2.9 million (USD
2.0 million) in Digital Asset in July 2020 using the same pre-money
valuation and pricing as in the previous Series C funding round
completed prior to balance date. This additional investment has
increased ASX’s shareholding in Digital Asset to 8.7%.

There have been no other matters or circumstances that have arisen
which have significantly affected the operations of the Group, the
results of those operations or the state of affairs of the Group from
the end of the period to the date of this report.

ASX Annual Report 2020 Directors' report

Directors' report continued

Likely developments

Non-audit services

Details of the amounts paid or payable to the Group's auditor
PricewaterhouseCoopers (PwC) and its related practices for non-audit
services provided during the year are set out in note F5.3 of the
financial statements on page 103.

Directors’ declaration of satisfaction with independence
of auditor

The Board of directors has considered the non-audit services
provided during the year by the auditor and in accordance with advice
provided by resolution of the Audit and Risk Committee, is satisfied
that the provision of those non-audit services is compatible with,
and did not compromise, the auditor independence requirements of
the Corporations Act 2001 for the following reasons:

• Non-audit services were subject to the corporate governance
procedures adopted by the Group and have been reviewed by
the Audit and Risk Committee

• Non-audit services provided do not undermine the general

principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants, as they did not
involve reviewing or auditing the auditor’s own work, acting in
a management or decision-making capacity for the Company,
acting as an advocate for the Company or jointly sharing risks
and rewards.

A copy of the Auditor’s Independence Declaration as required under
section 307C of the Corporations Act 2001 is on page 65.

Rounding of amounts
ASX is a company of the kind referred to in ASIC Legislative
Instrument 2016/191. Amounts in the financial statements and
the Directors' Report have been rounded to the nearest thousand
or hundred thousand dollars in accordance with that instrument,
unless otherwise indicated.

Signed in accordance with a resolution of the directors:

Rick Holliday-Smith
Chairman

Dominic Stevens
Managing Director and Chief Executive Officer

Sydney, 20 August 2020

For further information about likely developments in the opera-
tions of the Group, refer to the Operating and Financial Review
on pages 10 to 19. The expected results from those operations in
future financial years have not been included because they depend
on factors such as general economic conditions, the risks outlined,
and the success of ASX's strategies, some of which are outside the
control of the Group.

At the date of signing there is a high level of uncertainty regarding
the depth and duration of the impacts on domestic and global
economies, business activity and investment market indices from
actions taken to address the COVID-19 pandemic. The directors and
management will continue to manage and monitor this situation.

Environmental regulation

The operations of the Group are not subject to any particular or
significant environmental regulations under a Federal, State or
Territory law.

Indemnification and insurance of officers

The Group has paid insurance premiums for directors’ and officers’
liability for current and former directors and officers of the Company,
its subsidiaries and related entities.

The insurance policies prohibit disclosure of the nature of the liabilities
insured against and the amount of the premiums.

The constitution of ASX provides that every person who is or has
been a director, secretary or executive officer of the Company,
and each other officer or former officer of the Company (or of its
related bodies corporate as the directors in each case determine),
is indemnified by the Company to the maximum extent permitted
by law. The indemnity covers losses or liabilities incurred by the
person as a director or officer, including but not limited to liability
for negligence and for legal costs on a full indemnity basis.

Performance rights over issued shares

At the date of this report, ASX had 101,983 performance rights
outstanding (2019: 96,602). For further details on the performance
rights including performance hurdles for vesting, refer to the
Remuneration Report on pages 46 to 62.

During the year, 6,520 performance rights vested as a result of
partial attainment of hurdles under the September 2015 Long-Term
Incentive Plan (LTIP) and 6,521 rights lapsed. In the prior year no
performance rights vested or lapsed.

Proceedings on behalf of the Group

No application for leave has been made under section 237 of the
Corporations Act 2001 in respect of the Group and no proceedings
have been brought or intervened in on behalf of the Group under
that section.

Remuneration Report

Information on remuneration for the ASX Limited Board and Key
Management Personnel (KMP), is contained in the Remuneration
Report on pages 46 to 62 which forms part of the Directors' Report.

64 ASX Annual Report 2020 Directors' report continued

Auditor’s independence declaration
As lead auditor for the audit of ASX Limited for the year ended 30 June 2020, I declare that 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 ASX Limited

and the entities it controlled during the period.

Voula Papageorgiou
Partner

PricewaterhouseCoopers

Sydney, 20 August 2020

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

ASX Annual Report 2020 Auditor’s independence declaration

Statutory report – consolidated financial statements

Contents

Consolidated financial statements

Consolidated statement of
comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

Consolidated statement of cash flows

Notes to the consolidated financial statements

Significant accounting policies

A1 Significant accounting policies

A2 New and amended standards

A3 Changes in accounting policies

Performance of the Group

B1 Segment reporting

B2 Revenue from contracts with customers

B3 Dividends

B4 Capital management

B5 Earnings per share

B6 Taxation

Risk management

C1 Clearing risk

C2 Cash

C3 Financial risk

Investments

D1 Investments in equity instruments

D2 Equity accounted investments

D3 Financial assets at fair value through profit or loss

Other balance sheet assets and liabilities
E1 Trade and other receivables
E2 Intangible assets

E3 Property, plant and equipment

E4 Trade and other payables

E5 Provisions

E6 Leases

Group disclosures

F1 Subsidiaries

F2 Deed of Cross Guarantee

F3 Related party transactions

F4 Parent entity financial information

F5 Other disclosures

F5.1 Commitments

F5.2 Share-based payments

F5.3 Auditor’s remuneration

F5.4 Subsequent events

Directors’ declaration

Independent auditor’s report

100

101

103

104

105

66 ASX Annual Report 2020 Statutory report – consolidated financial statements

Consolidated statement of comprehensive income

For the year ended 30 June

Revenue

Listings and Issuer Services¹

Derivatives and OTC Markets¹

Trading Services¹

Equity Post-Trade Services¹

Interest income

Dividend income

Share of net (loss) of equity accounted investments

Expenses

Staff

Occupancy²

Equipment

Administration

Finance costs

Note

2020
$m

239.7

323.6

258.3

127.4

151.3

(5.0)

2019
$m

223.6

310.0

231.0

108.6

216.2

5.1

(5.1)

1,095.3

1,089.4

(145.4)

(9.7)

(37.3)

(47.4)

(67.5)

(52.0)

(15.2)

(374.5)

720.8

(222.2)

498.6

(0.5)

0.2

(0.3)

498.3

257.6

(127.7)

(17.9)

(32.2)

(41.3)

(117.4)

(47.8)

(384.3)

705.1

(213.1)

492.0

(7.9)

484.1

254.1

Depreciation and amortisation

Impairment of equity accounted investments

E2, E3, E6

Profit before income tax expense

Income tax expense

Net profit for the year attributable to owners of the Company

Other comprehensive income

Items that may be reclassified to profit or loss
Change in the fair value of cash flow hedges

Items that cannot be reclassified to profit or loss
Change in the fair value of investments in equity instruments

Other comprehensive income for the year, net of tax

Total comprehensive income for the year attributable to owners of the Company

Earnings per share

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)
¹ FY20 revenue classification includes the allocation of 'other revenue' into respective revenue lines. Corresponding prior period comparative balances have been

257.6

254.1

restated accordingly.

² Under AASB 16 Leases, certain operating lease expenses are now allocated between depreciation and interest.

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

ASX Annual Report 2020 Consolidated statement of comprehensive income

Consolidated balance sheet

As at 30 June

Current assets

Cash

Other financial assets at amortised cost

Financial assets at fair value through profit or loss

Trade and other receivables¹

Prepayments

Total current assets

Non-current assets
Investments in equity instruments

Equity accounted investments

Intangible assets

Net deferred tax asset

Property, plant and equipment

Right-of-use assets

Prepayments

Total non-current assets

Total assets

Current liabilities
Amounts owing to participants

Trade and other payables¹

Current tax liabilities

Provisions

Lease liabilities

Revenue received in advance

Total current liabilities

Non-current liabilities
Amounts owing to participants

Provisions

Lease liabilities

Revenue received in advance

Total non-current liabilities

Total liabilities

Net assets

Equity
Issued capital

Retained earnings

Reserves

Total equity

Note

C3,D3

2020
$m

858.1

12,511.4

487.5

761.6

23.3

2019
$m

333.1

10,825.4

1,111.8

390.6

17.5

14,641.9

12,678.4

45.1

40.5

2,496.8

44.8

62.1

74.9

8.7

2,772.9

17,414.8

12,477.2

726.8

25.8

17.9

9.5

89.1

24.3

52.0

2,458.3

45.3

61.5

10.5

2,651.9

15,330.3

10,601.0

349.3

89.9

15.2

83.1

13,346.3

11,138.5

200.0

5.5

71.6

71.0

348.1

13,694.4

3,720.4

3,027.2

603.8

89.4

3,720.4

200.0

9.6

65.8

275.4

11,413.9

3,916.4

3,027.2

801.7

87.5

3,916.4

¹ The movements in ‘Trade and other receivables’ and ‘Trade and other payables’ reflect the material changes in the margin requirements as a result of the move-
ment in the underlying positions of relevant clearing participants on the last trading day of the reporting period. These were settled the following business day.

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

68 ASX Annual Report 2020 Consolidated balance sheet

Consolidated statement of changes in equity

For the year ended 30 June

Note

Opening balance at 1 July 2019
Profit for the year

Other comprehensive income
for the year

Total comprehensive income for
the period, net of tax

Transactions with owners in their
capacity as owners:
Incentive plans –
value of employee services

Dividends paid

Closing balance at 30 June 2020

Opening balance 1 July 2018
Change in accounting policies

Restated balance at 1 July 2018

Profit for the year

Other comprehensive income
for the year

Transfers within equity

Total comprehensive income for
the period, net of tax

Transactions with owners in their
capacity as owners:
Incentive plans –
value of employee services

Dividends paid

Issued
capital
$m

3,027.2
-

3,027.2

3,027.2
-

3,027.2

Closing balance at 30 June 2019

3,027.2

Retained
earnings
$m

801.7
498.6

498.6

(696.5)

603.8

666.7
(85.0)

581.7

492.0

160.7

652.7

(432.7)

801.7

Reserves
$m

87.5
-

(0.3)

2.2

89.4

251.6
0.6

252.2

(7.9)

(160.7)

(168.6)

3.9

87.5

Total
equity
$m

3,916.4
498.6

(0.3)

498.3

2.2

(696.5)

3,720.4

3,945.5
(84.4)

3,861.1

492.0

(7.9)

484.1

3.9

(432.7)

3,916.4

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

ASX Annual Report 2020 Consolidated statement of changes in equity

Consolidated statement of cash flows

For the year ended 30 June

Cash flows from operating activities
Receipts from customers

Payments to suppliers and employees

Increase in participants’ margins and commitments¹

Net movement in financial assets at amortised cost

Interest received

Interest paid

Dividends received

Income taxes paid

Net cash inflow from operating activities

Cash flows from investing activities
Receipts from the sale of equity instruments

Payments for investments in equity instruments

Payments for equity accounted investments

Payments for other non-current assets

Net cash (outflow)/inflow from investing activities

Cash flows from financing activities
Dividends paid

Proceeds from borrowings

Repayment of borrowings

Principal payments for leased assets

Net cash (outflow) from financing activities

Net increase/(decrease) in cash
(Decrease) in the fair value of cash

(Decrease)/increase in cash due to changes in foreign exchange rates

Cash at the beginning of the year

Cash at the end of the year

Total funds available for the Group to invest comprises the following:

As at 30 June
ASX Group funds

Participants’ margins and commitments

Less: non-cash collateral

Total

Cash

Other financial assets at amortised cost

Total

Note

F4(d)

2020
$m

1,038.5

(309.4)

729.1
2,496.5

(1,630.3)

101.8

(76.1)

(285.7)

1,335.3

(14.9)

(8.7)

(82.2)

(105.8)

(696.5)

100.0

(100.0)

(6.1)

(702.6)

526.9
(0.7)

(1.2)

333.1

858.1

1,179.8

12,677.2

(487.5)

13,369.5

858.1

12,511.4

13,369.5

2019
$m

941.8

(297.3)

644.5
1,603.3

(1,969.7)

133.5

(116.2)

5.1

(210.6)

89.9

380.7

(4.0)

(84.6)

292.1

(432.7)

(50.7)
-

6.6

377.2

333.1

1,464.0

10,801.0

(1,106.5)

11,158.5

333.1

10,825.4

11,158.5

¹ Commitments are cash backed and included under 'Amounts owing to participants' in non-current liabilities.

70 ASX Annual Report 2020 Consolidated statement of cash flows

Consolidated statement of cash flows continued

Reconciliation of the operating profit after income tax to the net cash flows from operating activities

For the year ended 30 June

Net profit after tax

Non-cash items
Depreciation and amortisation

Share-based payments

Share of net loss of equity accounted investments

Foreign currency revaluation

Impairment of equity accounted investments

Total non-cash items

Changes in operating assets and liabilities
(Increase) in other financial assets at amortised cost¹

Decrease/(increase) in financial assets at fair value through profit or loss (FVTPL)

(Decrease)/increase in tax balances
Decrease/(increase) in receivables2
(Increase) in prepayments

Increase in amounts owing to participants³
Increase in trade and other payables2
Increase in revenue received in advance

Increase in provisions

Net cash inflow from operating activities

2020
$m

498.6

52.0

2.2

5.0

1.2

15.2

75.6

(1,686.0)

619.0

(63.5)

3.2

(4.7)

1,876.2

2.4

11.2

3.3

1,335.3

2019
$m

492.0

47.8

3.9

5.1

(6.8)

50.0

(2,048.0)

(695.3)

2.5

(15.6)

(10.3)

2,305.2

2.5

5.3

1.6

89.9

¹ Reconciliation of this line item to the statement of cash flows on page 70 includes interest from discount securities reflected within net profit after tax.
² Changes in assets and liabilities from investing and financing activities such as margins receivable/payable, certain accruals, makegood provisions and securities

pledged under repurchase agreements are excluded.

³ Reconciliation of this line item to the statement of cash flows on page 70 includes foreign currency revaluation on amounts owing to participants reflected within

the non-cash items above. The line item reflects the net effect of changes in FVTPL and changes in amounts owing to participants.

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

ASX Annual Report 2020 Consolidated statement of cash flows continued

Notes to the consolidated financial statements
Significant accounting policies

A1 Significant accounting policies

(a) Basis of preparation

ASX Limited (ASX or the Company) is a company limited by shares,
incorporated and domiciled in Australia and is a for-profit entity for
the purposes of preparing the financial statements. The financial
statements for the year ended 30 June 2020 are for the consoli-
dated entity which consists of ASX and its subsidiaries (together
referred to as the Group) and were authorised for issue by the Board
of Directors on 20 August 2020. The directors have the power to
amend and reissue the financial statements.

The financial statements are general purpose financial statements that:

• Have been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards and
other authoritative pronouncements issued by the Australian
Accounting Standards Board (AASB) and International Financial
Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB)

• Include the assets and liabilities of all subsidiaries of the

Company as at 30 June 2020 and the results of the subsidiar-
ies for the year then ended. Inter-entity transactions with, or
between, subsidiaries are eliminated in full on consolidation

• Have been prepared on a historical cost basis, except for financial
assets at FVTPL and investments in equity instruments which
have been measured at fair value through other comprehensive
income (FVTOCI) (refer to notes C3, D1 and D3)

• Are measured and presented in Australian dollars which is
ASX’s functional and presentation currency with all values
rounded to the nearest thousand or hundred thousand dollars
in accordance with ASIC Legislative Instrument 2016/191, unless
otherwise indicated.

(b) Key judgements and estimates

In the process of applying the Group’s accounting policies,
management has made a number of judgements and applied
estimates concerning future events. Judgements and estimates that
are material to the financial report are found in the following notes:

• B2 Revenue from contracts with customers

• D1 Investments in equity instruments

• D2 Equity accounted investments

• E2 Intangible assets

• E6 Leases.

Key judgements and estimates are contained in shaded text and
included in the relevant note.

Foreign currency translation
Foreign currency transactions are translated into Australian
dollars, being the currency of the primary economic environment
in which the group operates (the functional currency), using the
exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such
transactions, and from the translation at period end exchange rates of
monetary assets and liabilities denominated in foreign currencies, are
recognised in profit or loss, except where they are deferred in equity
as qualifying cash flow hedges (refer to note C3) and investments
in equity instruments (refer to note D1).

Goods and Services Tax (GST)
Revenues and expenses are recognised net of the amount of GST,
except where the amount of GST is not recoverable from the taxation
authority. In these circumstances the GST is recognised as part of
the item of expense to which it relates.

Assets are recognised net of the amount of GST, except where the
amount of GST is not recoverable from the taxation authority. In these
circumstances the GST is recognised as part of the cost of acquisition
of the asset. Receivables and payables are stated with the amount of
GST included. The net amount of GST recoverable from, or payable
to, the taxation authority is included as a current asset or liability.

Cash flows are reported on a gross basis and inclusive of GST. The
GST components of cash flows arising from investing and financing
activities which are recoverable from, or payable to, the taxation
authority are classified as operating cash flows.

Other accounting policies
Other significant accounting policies are contained in shaded text
and are included in the relevant note. These policies have been
consistently applied to all years presented, unless otherwise stated.

(d) Reclassification of prior year balances

Certain comparative balances have been reclassified to ensure
consistency with changes to current period presentation and clas-
sification. Refer to the consolidated statement of comprehensive
income and note B1.

A2 New and amended standards

(a) New and amended standards and interpretations
adopted by the Group

The AASB has issued a number of standards and amendments to
standards that are mandatory for the first time in the reporting
period commenced 1 July 2019. The Group has identified AASB 16
Leases (AASB 16) as having a material impact on adoption and in
future reporting periods.

The impact of adopting AASB 16 is disclosed in note A3.
All other standards and amendments to standards issued
by the AASB do not materially affect the amounts recognised
in prior, current or future periods. The Group did not apply any
pronouncements before their operative date in the financial year
ended 30 June 2020.

(b) New and amended standards and interpretations
not yet adopted by the Group

The AASB has issued a number of new or amended accounting
standards and interpretations that are not mandatory for the first
time in the reporting period commenced 1 July 2019. The Group has
assessed these standards and interpretations and determined that
there are no standards or amendments to standards that are not yet
effective that are expected to have a material impact on the Group
in the current or future reporting period.

72 ASX Annual Report 2020 Notes to the consolidated financial statements

Notes to the consolidated financial statements continued

Performance of the Group

A3 Changes in accounting policies

B1 Segment reporting

The Group adopted AASB 16 with a date of initial application of
1 July 2019. The Group has updated its accounting policy for lease
contracts as detailed in note E6.

The Group applied the modified retrospective approach on transition.
Under this approach, comparative amounts have not been restated
and the right-of-use (ROU) asset was equal to the amount of the
lease liability less any accrued amounts under AASB 117 Leases
(AASB 117) as of 1 July 2019.

AASB 16 replaces AASB 117 and contains a revised definition of a
lease removing the distinction between operating and finance leases
by lessees. As a lessee, the Group previously classified leases as
operating or finance leases based on its assessment of whether the
lease transferred significantly all of the risks and rewards incidental
to the ownership of the underlying assets to the Group.

(a) Description of segment

Operating segments are reported in a manner consistent with the
internal reporting provided to the Chief Operating Decision Maker
(CODM). The CODM, who is responsible for allocating resources
and assessing performance of the operating segments, has been
identified as the Managing Director and CEO.

The CODM assesses performance of the Group as a single segment,
being an integrated organisation that provides a multi-asset class
product offering which includes:

• Listing and issuer services offered to public companies and

other issuers

• Trading venue or exchange activities for trading

• Clearing and settlement activities

Under AASB 16, the Group recognises a non-financial asset that
represents the right to use the leased item and a financial liability
that represents the obligation to pay rent on the balance sheet.

• Exchange-traded and over-the-counter (OTC) products

• Information and technical services supporting the Group's

activities.

Short-term leases or leases of low value assets are exempt from
the application of this standard and will continue to be expensed
on a straight-line basis within occupancy expense.

On adoption of AASB 16, the Group recognised lease liabilities in
relation to leases which had previously been classified as ‘operating
leases’ under the principles of AASB 117. These lease liabilities were
measured at the present value of the remaining lease payments,
discounted at the Group’s incremental borrowing rate as at 1 July
2019. In applying AASB 16 for the first time, the Group used the
following practical expedients to leases previously classified as
operating leases under AASB 117:

• Applied a single discount rate to a portfolio of leases with

similar characteristics

• Applied the exemption not to recognise ROU assets and liabili-
ties for leases with less than 12 months to end of lease term

• Excluded initial direct costs from measuring the ROU asset at

the date of initial application

• Used hindsight when determining the lease term if the contract

contains options to extend or terminate the lease.

On adoption of AASB 16 the Group recognised a lease liability of
$87.2 million and a lease ROU asset of $83.3 million and these
amounts have been tax effected. The weighted average lessee’s
incremental borrowing rate applied to the lease liabilities on
1 July 2019 was 4.0%. The lease provisions of $3.9 million as at
30 June 2019 recognised under AASB 117 were reversed and adjusted
against the ROU asset.

Operating lease commitments disclosed at 30 June 2019
Discounted using the incremental borrowing rate

Add adjustment as a result of a different treatment of
extension options

Add leases not recognised as a lease under AASB 117

Lease liability recognised as at 1 July 2019

70.2
68.8

12.7

5.7

87.2

Multi-asset class service offerings include equities, interest rate,
commodity and energy products across cash and derivatives
markets.

In addition to reviewing performance based on statutory profit after
tax, the CODM assesses the performance of the Group based on
underlying profit after tax. This measure excludes amounts regarded
as significant items of revenue and expense such as those that may
be associated with significant business restructuring or individual
transactions of an infrequent nature. In the current reporting period,
the impairment to the carrying value of the equity investment in
Yieldbroker has been treated as a significant item and excluded
from underlying profit after tax.

Group performance measures, including earnings before inter-
est and tax (EBIT) and earnings before interest, tax, depreciation
and amortisation (EBITDA), are also reviewed by the CODM. In
assessing performance, expected credit loss (ECL) allowances and
arrangements where revenue is shared with external parties are
reclassified from expenses to operating revenue; certain expenses
are reclassified within operating expenses; and interest income is
presented net of interest expense.

(b) Segment results

The information provided on a regular basis to the CODM, along with
a reconciliation to statutory profit after tax for the period attributa-
ble to owners of the Company, are presented on the following page.

ASX derives all external customer revenue within Australia with
some services accessible, and some customers located, offshore.

No single customer generates revenue greater than 10% of the
Group’s total revenue.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

For the year ended 30 June

Revenue
Listings¹

Issuer services¹

Listings and Issuer Services
Equity options

Futures and OTC clearing¹

Austraclear¹

Derivatives and OTC Markets
Cash market trading¹

Information services¹

Technical services¹

Trading Services

Cash market clearing¹

Cash market settlement¹

Equity Post-Trade Services

Operating revenue
Interest income

Dividend income

Share of net (loss) of equity
accounted investments

Total revenue

Expenses
Staff

Occupancy

Equipment

Administration

Variable

ASIC levy

Operating expenses

EBITDA
Finance costs

Depreciation and amortisation

Impairment of equity accounted
investments

Total expenses

EBIT

Net interest and dividend income
Net interest income

Net interest on participant
balances

Dividend income

Net interest and dividend income

Underlying profit before tax

Income tax expense

Underlying profit after tax

Significant items²

2020

2019

Segment
information
$m

Adjustments
$m

Consolidated
income statement
$m

Segment
information
$m

Adjustments
$m

Consolidated
income statement
$m

175.9

61.2

237.1
18.5

242.9

56.2

317.6
64.2

106.8

85.3

256.3

65.3

62.1

127.4

938.4

(145.4)

(9.7)

(35.4)

(26.0)

(10.7)

(8.5)

(235.7)

702.7
-

(50.5)

652.2

7.6

76.2

83.8

736.0

(222.2)

513.8

(15.2)

2.5

0.1

2.6
0.2

1.0

4.8

6.0
-

2.0

151.3

(5.0)

156.9

(1.9)

(21.4)

10.7

8.5

(67.5)

(1.5)

(15.2)

(88.3)

(7.6)

(76.2)

(83.8)

(15.2)

15.2

178.4

61.3

239.7
18.7

243.9

61.0

323.6
64.2

106.8

87.3

258.3

65.3

62.1

127.4

151.3

(5.0)

1,095.3

(145.4)

(9.7)

(37.3)

(47.4)

(67.5)

(52.0)

(15.2)

(374.5)

720.8

(222.2)

498.6

172.0

49.0

221.0
19.9

233.3

50.8

304.0
51.9

96.5

81.6

230.0

54.6

54.2

108.8

863.8

(127.7)

(17.9)

(30.7)

(22.5)

(8.4)

(7.6)

(214.8)

649.0
-

(47.8)

601.2

23.4

75.4

5.1

103.9

705.1

(213.1)

492.0

2.5

0.1

2.6
0.3

0.5

5.2

6.0
(0.2)

(0.2)

1.4

1.0

(0.2)

216.2

5.1

(5.1)

225.6

(1.5)

(18.8)

8.4

7.6

(117.4)

(121.7)

(23.4)

(75.4)

(5.1)

(103.9)

174.5

49.1

223.6
20.2

233.8

56.0

310.0
51.7

96.3

83.0

231.0

54.4

54.2

108.6

216.2

5.1

(5.1)

1,089.4

(127.7)

(17.9)

(32.2)

(41.3)

(117.4)

(47.8)

(384.3)

705.1

(213.1)

492.0

Statutory profit after tax
¹ FY20 revenue classification includes the allocation of 'other revenue' into respective revenue lines. Corresponding prior period comparative balances have been

492.0

498.6

492.0

restated accordingly.

² Relates to the impairment of equity accounted investments. Refer to note D2 for further details.

Revenues and expenses are recognised net of the amount of GST, except where the amount of GST is not recoverable from the taxation authority.
In these circumstances the GST is recognised as part of the item of expense to which it relates.

74 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

B2 Revenue from contracts with customers

(b) Revenue received in advance

(a) Disaggregation of revenue

The Group derives its revenue from the transfer of services over time
and at a point in time. The following table provides a breakdown of
revenue by the timing of when performance obligations are satisfied
and by major business line.

The Group has recognised the following revenue received in advance
related to contracts with customers. The balances represent the
aggregate transaction price allocated to contract liabilities for
performance obligations that are partially unsatisfied at reporting
date. There is no consideration that has been excluded from the
transaction price.

For the year ended
30 June 2020
Listings and Issuer Services

Derivatives and OTC Markets

Trading Services

Equity Post-Trade Services

Total revenue from contracts
with customers

Services
satisfied at a
point in time
$m
56.4

291.6

68.1

127.0

543.1

Services
satisfied
over time
$m
183.3

32.0

190.2

0.4

Total
$m
239.7

323.6

258.3

127.4

405.9

949.0

For the year ended
30 June 2019
Listings and Issuer Services

Derivatives and OTC Markets

Trading Services

Equity Post-Trade Services

Services
satisfied at a
point in time
$m
43.5

280.5

56.3

108.1

Services
satisfied
over time
$m
180.1

29.5

174.7

0.5

Total
$m
223.6

310.0

231.0

108.6

Total revenue from contracts
with customers
Comparative balances have been restated to allocate 'other revenue' into
respective revenue lines.

488.4

384.8

873.2

As disclosed in note B1, the Group has one operating segment,
the disaggregated revenue in this note differs from the reportable
segment as the ECL allowance and certain revenue share agree-
ments with external parties are reclassified from expenses to
operating revenue.

As at 30 June

Current
Listings and Issuer Services

Austraclear

Information services

Memberships

Total current revenue received in advance

Non-current
Listings and Issuer Services

Austraclear

Total non-current revenue received in
advance

2020
$m

68.8

12.6

6.4

1.3

89.1

71.0

2019
$m

65.9

11.7

4.3

1.2

83.1

65.7

0.1

65.8

Total revenue received in advance

160.1

148.9

The Group expects 55% (2019: 55%) of the transaction price allocated
to the above contract liabilities to be recognised as revenue within
the next financial year. The remaining 45% (2019: 45%) all relates
to initial and subsequent listings and will be recognised as revenue
between FY22 and FY25.

(i) Significant changes in contract liabilities
The opening balance of the revenue received in advance at 1 July
2019 was $148.9 million. The increase in the contract liabilities in
the current year is largely related to secondary listing activities.
The Group bills companies upfront and recognises this amount as a
contract liability for unsatisfied performance obligations. Revenue
recognition commences from the date the company lists on the
exchange and is amortised over the estimated period the listing
service is expected to be provided.

(ii) Revenue recognised in relation to carried forward
contract liabilities
The following table shows the revenue recognised in the current and
prior year that relates to the opening balance of revenue received
in advance.

For the year ended 30 June
Listings and Issuer Services

Austraclear

Information services

Memberships

Total

2020
$m
64.3

11.7

4.3

1.2

81.5

2019
$m
60.2

10.5

3.2

1.2

75.1

The Group did not have any contract assets at 30 June 2020.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

Revenue from contracts with customers is recognised using a five
step approach to depict the transfer of promised goods or services
to customers. It is measured at the transaction price specified in the
contract and is net of amounts expected to be refunded to the customer
such as rebates. Revenue also excludes any taxes collected on behalf
of third parties.

The following five steps are applied to determine when revenue is
recognised:
1.

Identify the contract with a customer

2. Identify the separate performance obligations in the contract

3. Determine the transaction price

4. Allocate the transaction price to the separate performance obliga-

tions in the contract

5. Recognise revenue when (or as) the entity satisfies a

performance obligation.

Performance obligations that have not been satisfied at the reporting
date are recognised as revenue received in advance on the balance sheet.

There are no contracts with customers that have significant financing
components. The Group has considered the time difference between
when it provides the initial and subsequent listing service to the customer
and when the customer pays for the service and determined that this
does not result in a significant financing component.

All contracts have standard 30 day payment terms.

The transaction price is based on the price specified in the contract or
in accordance with published fee schedules and is net of any applicable
rebates. Rebates are calculated based on actual transactions or trading,
clearing or settlement volumes. Where this information is not immediately
available within the relevant accounting period, the expected amount is
estimated based on previous experience with the customer and revenue
is only recognised to the extent that it is highly probable that a significant
reversal will not occur. A liability for the rebates is recognised within
trade and other payables and typically have payment terms of 30 days
following the end of the relevant period.

Revenue is recognised for the major revenue lines as described below.

Listings and Issuer Services
Initial and subsequent listing fees are recognised evenly over the period
the listing service is expected to be provided which is five years for initial
listings and three years for subsequent listings. These fees are billed
prior to the quotation of initial or secondary capital and are recognised
within receivables and revenue received in advance at the time of billing.
The recognition of revenue commences from the date that the entity
is admitted to the official list or on quotation of the secondary capital.

Annual listing fees are billed at the commencement of the financial year or
prior to an entity listing on the exchange, at which point the fee is recog-
nised within receivables and revenue received in advance. The revenue
is recognised evenly over the financial year as the service is provided.

Issuer services revenue includes revenue for the provision of holding
statements and other related activities, and is recognised at the point
that the service is provided.

Derivatives and OTC Markets
Revenue from trading and clearing of futures and equity options, and
clearing of OTC interest rate derivatives is recognised at the point the
service is provided which is the trade date. The revenue includes vari-
able consideration for rebates on certain volumes traded. A liability for
rebates is recognised at trade date and they are paid following the end
of the quarter.

Fees for registry services for debt securities are billed upfront and are net
of rebates. They are recognised within receivables and revenue received
in advance and the revenue is recognised evenly over a 12 month period
in which the service is provided.

Fees for Austraclear settlement and cash transactions are billed monthly
net of rebates and are recognised at the point the service is provided
which is the transaction date. Fees for depository services for debt
securities are billed monthly net of rebates and are recognised as the
service is provided during the month.

Austraclear membership fees are billed at the commencement of the
calendar year or at the time an entity becomes a member. The revenue is
recognised evenly over the calendar year in which the service is provided.

ASX Collateral service fees are recognised over the period the service
is provided.

Trading Services
Cash market trading revenue is recognised at the point the service is
provided which is the settlement date. The normal market convention
is that settlement occurs two days after the initial trade date (T+2).
Accordingly, revenue for trades transacted in the last two days prior to
period end is deferred and recognised in the subsequent reporting period.

Memberships for cash market trading participants are billed at the
commencement of the financial year and recognised within receivables
and revenue received in advance. The revenue is recognised evenly over
the financial year as the service is provided.

Revenue in relation to information and technical services is recognised
over the period the service is provided.

Equity Post-Trade Services
This includes revenue from clearing and settlement of quoted securities
including equities, debt securities, warrants and exchange-traded funds
and is recognised at the point that the service is provided which is the
settlement date. Accordingly, clearing and settlement fees for trades
transacted in the last two days prior to period end are deferred and
recognised in the subsequent reporting period. The revenue recognised
is net of rebates expected to be paid which are estimated based on prior
experience with customers. The rebate is paid in the following year.

Key judgements
The Group has applied critical judgement in determining the period that
it expects to satisfy its performance obligations in relation to listing
services. The model to determine the five and three year listing periods
has taken into account historical information in relation to the length
of time companies have been listed and excluded those outside one
standard deviation of the mean.

76 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

B3 Dividends

B4 Capital management

The Board's policy is to pay a dividend based on 90% of underlying
net profit after tax. This is reviewed each time the Board considers
payment of a dividend. The policy is unchanged from the prior year.

The following table includes information relating to dividends
recognised and paid by ASX during the financial year.

For the year ended 30 June 2020
Special dividend for the year ended
30 June 2019

Final dividend for the year ended
30 June 2019

Interim dividend for the year ended
30 June 2020

Total

For the year ended 30 June 2019
Final dividend for the year ended
30 June 2018

Interim dividend for the year ended
30 June 2019

Total

Cents per
share

Total amount
$m

129.1

114.3

116.4

359.8

109.1

114.4

223.5

249.9

221.3

225.3

696.5

211.2

221.5

432.7

The above dividends paid by the Company include amounts
attached to certain shares held by the Group's Long-Term Incentive
Plan Trust (LTIPT). The dividend revenue recognised by LTIPT has
been eliminated on consolidation. In the current and prior years,
the dividend revenue was less than $0.1 million.

Since the end of the financial year, the directors have determined
a final dividend of 122.5 cents per share totalling $237.2 million. The
dividend will be fully franked based on tax paid at 30%.

A liability is recognised for the amount of any dividends determined
on or before the balance date but not yet paid. Typically, the final
dividend in respect of a financial year is determined after balance
date, and therefore no provision is recognised.

Dividend franking account

As at 30 June
Franking credits available for future
years at 30% adjusted for the
payment of current income tax

2020
$m

290.5

2019
$m

367.6

Adjusting for the payment of the final dividend for the year ended
30 June 2020, the franking balance would be $188.9 million
(2019: $165.6 million).

At 30 June 2020, equity of the Group totalled $3,720.4 million (2019:
$3,916.4 million). The Group’s capital supports a range of activities
and risks. Capital requirements are subject to change from time
to time. Some factors that may impact the amount of capital the
Group requires to support its business include:

• The level of goodwill recognised from business combinations.
This goodwill may be impacted by the performance of the
Group and subsequent impairment leading to a reduction
in capital

• Regulatory standards, both domestic and international, which
may impact the level of capital supporting the clearing and
settlement activities or other licensed activities. Regulatory
standards applying to many financial market participants have
increased in recent years and there is an expectation that these
may increase further over time. There may also be uncertainty
over the application of new regulatory standards

• The competitive environment in which ASX operates may lead to
higher levels of capital in order to provide competitive services,
noting that customers may be able to access competing
services internationally

• The level or concentration of activity undertaken in markets

and clearing and settlement facilities operated by ASX.
Generally a higher level of activity may result in higher capital
requirements, however the relationship is not necessarily linear

• The general economic or credit conditions that may impact on
capital requirements as the level of risk generally increases as
credit conditions deteriorate. The level of operational risk capital
held by the Group can be impacted by any revision to future
loss assessments and regulatory requirements

• The level of investments made, their fair value and the potential

movement in their market values. Capital requirements are
also impacted by ASX’s level of investment in existing or new
services. These investments are predominantly in intangible
software assets and other equity investments which may be
subject to write-down under certain circumstances.

The Board's policy is to maintain an appropriate level of capital
within the Group and relevant subsidiaries with the objectives of:

• Meeting its compliance obligations with respect to the Financial
Stability Standards and other regulations, including international
regulations, as required by the various licences held

• Sustaining prudential stability through maintaining an adequate
level of equity at the Group level, cognisant of the fact that a
significant allocation of capital supports the activities of the
two licensed central counterparty clearing (CCP) subsidiaries as
discussed in note C1 and the two licensed settlement facilities

• Facilitating growth of the Group's exchange-traded and OTC
markets, and providing appropriate risk-adjusted returns to
shareholders

• Reflecting the risks associated with the Group's operations.

In accordance with the Group's objectives and policies, capital
represented by cash is invested at an appropriate liquidity profile,
taking into consideration the potential claims on that equity that
may arise from the Group's activities, predominantly CCP clearing.

The Group's objective is also to maintain its credit rating at the current
AA- long-term and A-1+ short-term as rated by Standard & Poor’s (S&P).

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

(a) Ordinary share capital

Fully paid ordinary shares carry the right to participate in dividends.
Ordinary shares also entitle the holder to the proceeds on winding
up of the Company in proportion to the number of and amounts paid
on the shares held. Ordinary shares have no par value and ASX does
not have a limited amount of authorised capital. At 30 June 2020,
all ordinary shares issued were fully paid. On a show of hands, every
holder of ordinary shares present in person or by proxy, is entitled to
one vote and upon a poll each share is entitled to one vote.

As at 30 June 2020, the closing balance of ordinary share capital was
$3,027.2 million (2019: $3,027.2 million) and the number of shares
outstanding was 193,595,162 (2019: 193,595,162). There were no
movements in the balance of ordinary share capital or the number
of shares outstanding in the current or prior financial years.

Asset revaluation reserve
Changes in the fair value of investments in equity instruments are
recognised in the asset revaluation reserve. The cumulative gain or
loss that has been recognised within reserves is transferred directly
to retained earnings and is not recycled through profit or loss when
the associated equity instrument is sold.

The effective portion of gains or losses on assets designated as part
of a cash flow hedging relationship are recognised in the hedging
reserve which is included within asset revaluation reserves. The
ineffective portion of a hedge is recognised directly in profit or loss.

Equity compensation reserve
The equity compensation reserve is used to recognise the fair value
of performance rights issued under ASX equity plans.

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 from the proceeds, net of tax.

(b) Treasury shares

The following table presents the movement in treasury shares
during the financial year:

B5 Earnings per share

As at 30 June
Basic and diluted earnings
per share (cents)

Weighted average number of
ordinary shares used in calculating
basic and diluted earnings per share

2020

257.6

2019

254.1

193,587,739

193,576,187

2020
No. of shares

2019
No. of shares

9,844

(6,520)

61,060

(11,604)

The increase in the weighted average number of ordinary shares
reflects lower treasury shares held during the current financial
year. The basic and diluted earnings per share (EPS) amounts have
been calculated on the basis of net profit after tax of $498.6 million
(2019: $492.0 million).

Basic EPS is calculated by dividing the consolidated net profit after
tax attributable to the owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average
number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the
year and excluding treasury shares.

Diluted EPS adjusts the figures used in the determination of basic EPS
to take into account the after income tax effect of interest and other
financing costs associated with dilutive potential ordinary shares,
and the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.

For the year ended 30 June

Opening balance
Issue of shares under the Long-Term
Incentive Plan

Issue of deferred shares under
employee equity plans

Shares transferred to the LTIPT

Closing balance

(50,000)

3,897

7,221

10,388

9,844

Treasury shares are shares in ASX held by a trust for the benefit of
employees under the ASX Long-Term Incentive Plan (LTIP) as described
in the Remuneration Report. The original purchase price of the shares,
net of any tax effect, is deducted from the equity compensation reserve
in equity.

Shares allocated to employees under the Deferred Short-Term
Incentive Plan (DSTIP) are held as treasury shares when forfeited
until such time that they are reallocated under another DSTIP or LTIP.

The Group's reserves in equity includes the restricted capital reserve,
the asset revaluation reserve and the equity compensation reserve.

As at 30 June 2020, the closing balance of reserves in equity was
$89.4 million (2019: $87.5 million).

Restricted capital reserve
The restricted capital reserve was created when funds were
transferred from the National Guarantee Fund (NGF) to ASX
Clear Pty Ltd (ASX Clear) in 2005. At this point in time ASX
Clear started assuming the clearing participant default risk of
the clearing house. Under the terms of the transfer, ASX Clear
must not, without first obtaining the consent in writing of
the Assistant Treasurer (the Minister), take action to use these
funds for a purpose other than clearing support.

78 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Performance of the Group

As at 30 June

2020
$m

2019
$m

Deferred tax (liability) comprises the estimated future expense at an
income tax rate of 30% (2019: 30%) of the following items:

Fixed assets
Right-of-use assets
Revaluation of cash flow hedges
Revaluation of investments in equity
instruments – unlisted entities
Long-Term Incentive Plan
Deferred tax (liability)

Net deferred tax asset

(16.6)
(22.5)
-

(0.1)

(0.3)
(39.5)

44.8

(11.0)
-
(0.2)

(0.3)
(11.5)

45.3

Income tax expense is recognised in profit or loss except to the extent
that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity respectively. Income tax
expense recognised in profit or loss comprises current and deferred
income tax.

Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantively enacted at the balance
sheet date, and any adjustment to tax payable in respect of previous
years. Current tax assets and tax liabilities are offset if there is a legally
enforceable right to offset and the Group intends to either settle on a
net basis, or to realise the asset and settle the liability simultaneously.

Deferred income tax is provided using the balance sheet liability
method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes,
and the amounts used for taxation purposes. Deferred income tax is
not recognised for certain temporary differences such as the initial
recognition of goodwill.

The amount of deferred income tax is determined using tax rates
enacted or substantively enacted at the balance sheet date and
expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.

A deferred tax asset is recognised only to the extent that it is
probable that future taxable amounts will be available against which
the asset can be utilised, and is reduced to the extent that it is no longer
probable that the related tax benefit will be realised.

Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset current tax liabilities and assets, and when
the deferred tax balances relate to income taxes levied by the same
tax authority.

Further information on the Group's tax obligations can be found in
the Tax Transparency Report available on ASX's website.

B6 Taxation

The movements during the year in the following components of
deferred tax asset and liability were recognised in profit or loss with
the exception of revaluations of investments in equity instruments
and cash flow hedges which were recognised in other comprehen-
sive income.

As at 30 June
(a) Income tax expense
Profit before income tax expense
Prima facie income tax expense calculated
at 30% (2019: 30%) on the profit before tax

Movement in income tax expense due to:
Non-deductible items
Equity accounted investments
Equity accounted investments impairment
Franking credit offset
Research and development tax offset
Adjustments to current tax for
prior years
Total income tax expense

(b) Major components of income tax expense
Current tax expense

Movement in deferred tax liability
Movement in deferred tax asset
Adjustments to current tax for
prior years
Total income tax expense

(c) Income tax on items recognised directly
in equity
Sale of investments in equity instruments
Deferred revenue on adoption of AASB 15
ECL allowance on adoption of AASB 9

Deferred STI shares returned to trust

Total

(d) Income tax on items recognised directly
in other comprehensive income
Revaluation of AFS financial assets
Revaluation of investments in equity
instruments – listed entities
Revaluation of investments in equity
instruments – unlisted entities
Revaluation of cash flow hedges
Total

(e) Deferred tax asset/(liability)

2020
$m

720.8

(216.2)

(1.1)
(1.5)
(4.6)
-
1.0

0.2

2019
$m

705.1

(211.5)

(1.6)
(1.5)
-
0.9
0.5

0.1

(222.2)

(213.1)

(221.7)

(214.6)

(2.5)
1.8

0.2

(1.6)
3.0

0.1

(222.2)

(213.1)

-
-
-

0.1

(0.1)

0.2
0.1

68.9
36.3
0.1

0.1

105.4

(0.3)

2.0

1.4

-
3.1

Deferred tax asset comprises the estimated future benefit at an income
tax rate of 30% (2019: 30%) of the below items:

Doubtful debts provisions
Employee entitlements provisions
Premises provisions
Lease liabilities
Accrued expenses
Revenue received in advance
ECL allowance
Deferred tax asset

0.2
10.1
-
24.3
1.4
48.2
0.1
84.3

0.3
9.8
2.1
-
0.3
44.2
0.1
56.8

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

The Group is subject to a variety of risks including clearing and
settlement risk, and operational risk.

C1 Clearing risk

As at 30 June

Current
Cash

Debt securities

The Group undertakes CCP clearing and collects margins and other
balances (commitments) from clearing participants as security for
clearing risk undertaken.

Sub-sections (a) and (b) below discuss participants’ obligations and
the nature of collateral and commitments lodged, as well as ASX’s
recognition principles concerning these liabilities.

Total current amounts owing
to participants

Non-current
Cash commitments

Total non-current amounts owing
to participants

2020
$m

2019
$m

11,989.7

487.5

9,494.5

1,106.5

12,477.2

10,601.0

200.0

(a) Novation

The Group has two wholly owned subsidiaries that provide CCP
clearing services:

• ASX Clear Pty Limited (ASX Clear), which provides novation of

cash market securities and derivatives

• ASX Clear (Futures) Pty Limited (ASX Clear (Futures)), which

provides novation of both exchange-traded and OTC derivatives.

As a CCP, transactions between two clearing participant organisations
are novated to the CCPs. This makes the CCPs contractually responsible
for the obligations entered into by clearing participants on both the
buying and selling legs of the same transaction. Through novation,
the respective CCP assumes the credit risk of the underlying clearing
participant in the event of a participant default. The novation process
results in all positions held by the CCPs being matched.

(b) Participants’ margins

Clearing participants are required to lodge an amount (initial margin)
on open cash market, derivative and OTC positions novated to
the Group’s CCPs. These margins are based on risk parameters
attached to the underlying security or contract at trade date and
may include additional margins called on participants. The margin
rates are subject to regulatory standards including a high level of
confidence that they meet expected movements based on historical
events. However, there could be circumstances where losses are
greater than the margins held.

Clearing participants may lodge cash or certain equity and debt
securities to cover their margin obligations. In accordance with
Group policies, the cash lodged by participants may subsequently
be invested into approved products which are recognised as cash or
financial assets at amortised cost on the balance sheet. The follow-
ing table shows the form in which participants lodged margins and
commitments at 30 June. This excludes equity securities lodged by
participants which are not recognised on the balance sheet.

Total amounts owing to participants

12,677.2

10,801.0

Current amounts owing to participants represent collateral lodged
to cover margin requirements on unsettled derivative contracts and
cash market trades. Non-current amounts owing to participants
represent cash balances lodged by participants as commitments
to clearing guarantee funds, which at reporting date had no deter-
mined repayment date.

Margins that are settled by cash or debt securities are recognised
on balance sheet at fair value and are classified as amounts owing
to participants within current liabilities. Balances lodged in cash are
interest bearing and are carried at the amounts deposited which
represent fair value. Margins that are settled by equity securities
are not recognised on balance sheet as the Group is not party to the
contractual provisions of the instruments other than in the event of
a default.

In addition to the initial margin, participants must also settle changes
in the fair value of derivatives contracts (variation margin), and in
certain circumstances must lodge additional margins. Participants
must settle both initial and variation margins daily, including
possible intraday and additional margin calls. The amounts owing to
participants are repayable on settlement or closure of the contracts.

In the event of default by a clearing participant, ASX Clear and ASX
Clear (Futures) are required to provide funds or settle securities of
the defaulting participant. The CCPs also have the authority to retain
collateral and commitments deposited by the defaulting clearing
participant to satisfy its obligations. Clearing participants lodged
the following collateral and commitments at 30 June:

As at 30 June 2020
Cash

Debt securities

Total amounts owing to
participants

ASX Clear
$m
1,286.4

ASX Clear
(Futures)
$m
10,903.3

487.5

Total
$m
12,189.7

487.5

1,286.4

11,390.8

12,677.2

Equity securities¹

3,191.4

As at 30 June 2019
Cash

Debt securities

Total amounts owing to
participants

843.6

8,850.9

1,106.5

9,694.5

1,106.5

9,957.4

10,801.0

Equity securities¹
¹ Equity securities are not recognised on the balance sheet.

3,351.8

80 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

All net delivery and net payment obligations relating to cash market
and derivative securities owing to or by participants as at 30 June
2020 were subsequently settled.

The Financial Stability Standards require each CCP to have adequate
financial resources to cover its exposures in the event of default by
the two participants and their affiliates that would potentially cause
the largest aggregate credit exposure for the CCP in extreme but
plausible market conditions. Financial resources include the clearing
default funds shown in the next two tables as well as eligible collat-
eral and commitments. The level of clearing default funds which
the CCPs must maintain may therefore increase from time to time.
The Financial Stability Standards also require each CCP to have
a process for replenishing clearing default funds after depletion
caused by a default loss. The replenished fund, which may be less
than the original fund, is then available to support new activity post
the loss. To comply with this obligation, the Group has undertaken,
in certain circumstances, to provide funds up to pre-determined
levels for replenishment of the clearing default funds. The Group
may utilise a number of alternative funding sources to contribute
to an increase in, or replenishment of, the CCPs’ clearing default
funds, including its own cash reserves. In certain circumstances
participants may have an obligation to the CCP to contribute to an
increase in, or replenishment of, the clearing default funds.

The CCPs’ operating rules also provide for the CCPs to undertake
certain actions to deal with events of default and utilisation of
collateral, commitments and clearing default funds. These include
the ability to call recovery assessments, impose payment reductions
or implement termination of positions.

The following tables show the financial resources available to the
CCPs to support their clearing activities (over and above the collateral
lodged by participants).

ASX Clear

As at 30 June
Restricted capital reserve

Equity provided by the Group

Paid-in resources
Recovery assessments

Total financial resources

2020
$m
71.5

178.5

250.0
300.0

550.0

2019
$m
71.5

178.5

250.0
300.0

550.0

The financial resources at 30 June 2020 available to ASX Clear in the
event of a participant default would be applied in the following order:

1. Collateral and other margins lodged by the defaulting

participant

2. Restricted capital reserve of $71.5 million

3. Equity capital of $178.5 million

4. Contributions lodged by non-defaulting participants under the
ASX Clear operating rules (no contributions were lodged in
the current or prior year)

5. Recovery assessments of $300.0 million which can be levied
on participants (no amounts were levied in the current or
prior year).

ASX Clear (Futures)

As at 30 June
Equity provided by the Group

Cash commitments

Equity provided by the Group

Cash commitments

Equity provided by the Group

Paid-in resources
Recovery assessments1

2020
$m
120.0

100.0

150.0

100.0

180.0

650.0
200.0

2019
$m
120.0

100.0

150.0

100.0

180.0

650.0
200.0

Total financial resources
850.0
1 $200 million for a single default event and up to $600 million for more than

850.0

one default event.

The financial resources at 30 June 2020 available to ASX Clear
(Futures) in the event of a participant default would be applied in
the following order:

1. Collateral and commitments lodged by the defaulting participant

2. Equity capital of $120.0 million

3. Commitments lodged by non-defaulting participants, totalling
$100.0 million less the defaulting participants' commitments
included in item 1 above

4. Equity capital of $150.0 million

5. Commitments lodged by participants, totalling $100.0 million

6. Equity capital of $180.0 million

7. Recovery assessments of $200.0 million which can be levied on
participants (no amounts were levied in the current or prior year).

The order of application with respect to items 3 and 5 above will
depend on the market in which the defaulting participant operates.
If the defaulting participant is a futures participant, then item 3
will comprise the cash commitments lodged by non-defaulting
futures participants and item 5 will comprise the cash commitments
lodged by OTC participants. If the defaulting participant is an OTC
participant, then item 3 will comprise the cash commitments lodged
by non-defaulting OTC participants and item 5 will comprise the cash
commitments lodged by futures participants. If the defaulting partic-
ipant is both a futures and OTC participant, then the non-defaulting
participants' commitments are apportioned for items 3 and 5.

C2 Cash

The cash balance is comprised of the Group’s own cash funds as
well as cash collateral and commitments lodged by participants
in accordance with note C1 that has not been invested in debt or
money market instruments.

Cash at bank and on hand

Overnight cash deposits

Total cash

468.6

389.5

858.1

90.1

243.0

333.1

Cash comprises cash on hand and deposits with banks that can be
withdrawn with no or minimal notice.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

C3 Financial risk

The Group’s activities expose it to a variety of financial risks including
market risk (comprising interest rate, foreign currency and equity
price risk), credit risk and liquidity risk.

The Group’s overall risk management strategy seeks to manage poten-
tial adverse effects on the financial performance of the Group. Risk
management is carried out under policies approved by the Board of
Directors. Management monitors investment credit, foreign currency,
liquidity and cash flow interest rate risk, and manages clearing default
credit risk with counterparties in accordance with approved Board
mandates with ongoing reporting to the respective boards.

The Group holds the following financial assets and liabilities by
category:

As at 30 June

Financial assets at amortised cost
Cash

Trade and other receivables

Note

Other financial assets at amortised cost

– Term deposits

– Reverse repurchase agreements

– NCDs

– P-Notes

– T-Notes

– FRNs

2020
$m

858.1

761.6

6,617.2

923.6

4,179.3

791.3

2019
$m

333.1

390.6

231.9

6,197.6

1,097.0

3,280.3

18.6

Financial assets at FVTPL
Non-cash collateral

Convertible notes

Financial assets at FVTOCI
Investments in equity instruments

Total financial assets

Financial liabilities at amortised cost
Trade and other payables¹

Amounts owing to participants

Lease liabilities

487.5

1,106.5

5.3

45.1

24.3

14,663.7

12,685.2

719.2

342.3

12,677.2

10,801.0

81.1

Total financial liabilities
1 Excludes transaction taxes payable which are not financial instruments as

13,477.5

11,143.3

they are statutory obligations.

The maximum exposure to credit risk at the end of the reporting period
for each class of financial asset, other than amounts owing to partic-
ipants, is the carrying amount as detailed in the previous table. If the
financial asset is attributed to participants’ collateral, the maximum
credit exposure to ASX is $75 million per counterparty. However, if
it is attributed to ASX’s own financial resources, the maximum credit
exposure is the carrying amount of the financial asset.

Financial liabilities and financial assets other than trade receivables
without a significant financing component are initially measured at fair
value. This includes transaction costs that are directly attributable to
the acquisition of the asset or issue of the liability for financial assets
and liabilities not at FVTPL. Financial liabilities are subsequently
measured at amortised cost while financial assets are subsequently
measured in accordance with one of the following categories.

Amortised cost – this includes financial assets managed under a
business model to hold the assets in order to collect the CCFs and
those cash flows represent solely payments of principal and interest
(SPPI). Interest income from these financial assets is included in
interest income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss.
Impairment losses are included within administration expense in the
statement of profit or loss.

FVTOCI – this includes financial assets managed under a business
model to sell the assets and collect the CCFs and those cash flows
represent SPPI. Fair value gains or losses are recognised directly in
the asset revaluation reserve in equity. Any cumulative gain or loss
recognised in equity is subsequently reclassified to profit or loss on
disposal. Interest income from these financial assets is included in
interest income using the effective interest rate method. An irrevo-
cable election can also be made to measure certain investments in
equity instruments at FVTOCI on initial recognition. In this case, fair
value gains or losses are recognised directly in the asset revaluation
reserve in equity however are not reclassified to profit or loss on
disposal but remain in equity.

FVTPL – this includes financial assets that do not meet the criteria
to be measured at amortised cost or FVTOCI. Any fair value gains or
losses are recognised in profit or loss.

Refer to the relevant note for further details of the accounting policies
for trade and other receivables, convertible notes and investments
in equity instruments.

Reverse repurchase agreements are measured at the amount of the
cash consideration paid. The securities purchased under the agreement
are not recognised on the balance sheet as substantially all the risks
and rewards of ownership are retained by the counterparty to the
agreement.

Interest income comprises interest earned on the Group’s own funds,
as well as interest earned from the investment of funds lodged by
participants as collateral. Interest income is recognised using the
effective interest rate method.

Interest expense is recognised as a finance cost in the statement
of comprehensive income using the effective interest rate method.

82 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

(a) Market risk

Market risk is the risk of loss arising from movements in observable market variables such as interest rates, foreign exchange rates and
other market prices.

(i) Interest rate risk

Exposure arising from
Variable rate cash investments and money
market instruments expose the Group to cash
flow interest rate risk.

Risk management
• The Boards of the relevant subsidiaries have set limits with respect to maximum and weighted

average maturity and value at risk.

• Managed by policies that enable the Group to pay a variable rate of interest to participants on the

funds held.

Interest bearing assets is comprised of the investment of the Group’s cash resources (participant collateral lodged in cash and Group
funds). Interest bearing liabilities is comprised of cash collateral and commitments lodged by participants and finance leases. Non-cash
collateral lodged by participants is non-interest bearing.

The Group’s trade and other receivables, investments in equity instruments and trade and other payables are non-interest bearing so
are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate (directly) due to
a change in market interest rates.

The following table presents the Group’s interest bearing financial assets and liabilities at 30 June.

As at 30 June

Interest bearing financial assets
Cash

Other financial assets at amortised cost

Financial assets at FVTPL

Total interest bearing financial assets
Weighted average interest rate at period end

Interest bearing financial liabilities
Amounts owing to participants

Lease liabilities

Total interest bearing financial liabilities
Weighted average interest rate at period end

Floating
interest
rate
$m

2020

Fixed
interest
rate
$m

Total
$m

858.1

12,511.4

13,369.5

858.1
0.18%

12,677.2

12,677.2
(0.11%)

12,511.4
0.48%

81.1

81.1
4.04%

Floating
interest
rate
$m

333.1

18.6

351.7
1.29%

2019

Fixed
interest
rate
$m

Total
$m

333.1

10,806.8

10,825.4

5.3

10,812.1
1.64%

-
-

5.3

11,163.8

10,801.0

12,677.2

10,801.0

81.1

12,758.3

10,801.0
0.80%

Net interest bearing financial (liabilities)/assets

(11,819.1)

12,430.3

611.2

(10,449.3)

10,812.1

362.8

With respect to the above table:
• Floating interest rate refers to financial instruments where the interest rate is subject to change prior to maturity or repayment –
predominantly deposits at call and FRNs. The floating interest rate of (0.11%) (2019: 0.80%) for interest bearing financial liabilities
represents the net of the interest paid and the Futures Client charge revenue on participant balances. In the current year the RBA
cash rate has fallen below the weighted average Futures Client charge and therefore the negative interest rate represents the interest
the Group received on participant balances

• Fixed interest rate refers to financial instruments where the interest rate is fixed up to maturity – predominantly term deposits,
NCDs, P-Notes, T-Notes, reverse repurchase agreements, bonds, convertible notes and finance leases. The fixed interest rate of
4.04% for interest bearing financial liabilities represents the weighted average incremental borrowing rate applied for evaluating the
present value of leases under AASB 16. The range of interest rates applied on the Group’s leases is between 3.10% and 4.30%. Refer to
note E6 for additional details on accounting treatment and policy.

Sensitivity analysis (net of tax)
Changes in interest rates affect the Group's profit or loss due to higher/lower interest income earned on its cash and other financial assets
at amortised cost and higher/lower interest paid to clearing participants.

An analysis of this sensitivity and its impact on the Group's profit or loss and equity net of tax for the year is provided in the following
table. The analysis is based on a hypothetical 25 basis point change in interest rates at 30 June and has been applied to the interest rate
risk exposures that exist at that date. All other variables have been held constant.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

+25 basis point change in interest rates

-25 basis point change in interest rates

2020

2019

Impact on profit
$m
(1.7)

Impact on profit
$m
(0.5)

1.7

0.5

Changes in interest rates affect the Group’s profit or loss due to interest income earned on the Group’s own cash resources and treasury
earnings on clearing participants' balances offset by interest paid to clearing participants on margins lodged. The interest earned side
references a range of rates such as BBSW, while the interest paid side references overnight cash rates. ASX is exposed to the movement
between these two rates. The table above assumes overnight cash rates and BBSW rates move in line.

(ii) Foreign currency risk

Exposure arising from
Cash flow commitments in foreign currencies
entered into by the Group.

Risk management
• Where the Group enters into material cash flow commitments in foreign currencies, its policy is to

enter into hedging arrangements to mitigate the exchange risk where possible.

Collateral on clearing participants’ derivatives
exposures lodged in foreign currency and held
by the Group's CCPs.

• The collateral held in foreign currency is offset by an equal payable in the same currency to the

participant, which reduces foreign currency risk in the normal course of business. Where non-matching
currency is lodged as collateral, a discount is applied to its value.

The majority of the Group’s net foreign currency risk is associated with foreign denominated cash, net interest income and exchange fees
receivable. Such exposure is converted to AUD on a regular basis. Investments in equity instruments denominated in USD are subject to
foreign currency risk, impacting their carrying value.

The following table shows the Group’s exposure on its balance sheet to foreign currency risk at the end of the year, expressed in AUD.

As at 30 June

Financial assets
Cash

Trade and other receivables

Other financial assets at amortised cost

Investment in equity instruments

Financial asset at FVTPL

Financial liabilities
Trade and other payables

Amounts owing to participants

Net exposure

2020

2019

NZD
$m

123.0

0.8

52.9

173.6

3.1

USD
$m

46.7

45.1

23.1

68.7

EUR
$m

51.0

0.1

49.0

2.1

JPY
$m

1.5

NZD
$m

109.8

1.0

68.4

0.2

176.7

2.3

USD
$m

12.4

24.3

5.3

42.0

EUR
$m

17.9

17.8

0.1

Exchange rate for conversion AUD 1:

1.0698

0.6856

0.6114

73.86

1.0461

0.7014

0.6168

JPY
$m

18.1

66.2

83.0

1.3

75.57

Sensitivity analysis (net of tax)
Changes in exchange rates affect the Group's profit or loss due to the gain/loss recognised on translation of foreign currency denominated
financial assets other than financial assets at FVTOCI and all foreign currency denominated financial liabilities at balance date. Equity
is affected due to USD foreign currency cash flow commitments designated as cash flow hedges and the valuation of foreign currency
equity investments.

An analysis of this sensitivity and its impact on the Group's profit or loss and equity net of tax for the year is provided in the following
table. The analysis is based on a hypothetical 10% change in the market exchange rate of the AUD against other currencies at 30 June
and has been applied to the foreign currency risk exposures that exist at that date. All other variables, including interest rates, have been
held constant. The impact is expressed in AUD.

+10% strengthening of AUD

-10% weakening of AUD

2020

2019

Impact on profit
$m
(0.4)

Impact on equity
$m
(4.9)

Impact on profit
$m
(0.7)

Impact on equity
$m
(2.5)

0.4

4.9

0.7

2.5

84 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

Cash flow hedges
At 30 June 2020, the Group had designated cash at bank of USD 15.7 million (2019: USD 7.9 million) as the hedging instrument in quali-
fying cash flow hedges for committed expenditure to be paid in USD. These amounts are included within cash on the balance sheet. The
cash flows are 100% hedged and the weighted average hedged rate during the year was AUD 1: USD 0.7402 (2019: AUD 1: USD 0.7498).
During the current financial year, the use of cash flow hedges resulted in a $1.1 million (2019: $0.9 million) increase in cash flow required
for committed capital and operating expenses.

The following table shows the movement in the Group's hedge reserves.

For the year ended 30 June

Opening balance at 1 July
Revaluation of hedging instrument

Less: deferred tax

Closing balance at 30 June

2020
$m

0.5
(0.7)

0.2

2019
$m

0.5
-

0.5

All movements in the hedge revaluation reserve, including gains or losses in the hedging instrument and amounts reclassified from equity
to profit or loss were less than $0.1 million in the current and prior years.

At the inception of the hedging transaction, the Group documents the relationship between hedging instruments and hedged items, as well as
its risk management objective and strategy for undertaking various hedge transactions. The Group documents its assessment, both at hedge
inception and also on an ongoing basis, of whether the hedging relationship meets the following effectiveness requirements:

• There is an economic relationship between the hedged item and the hedging instrument

• Credit risk does not dominate the value changes that result from that economic relationship

• The hedge ratio is the same as that resulting from the actual quantity of both the item hedged and the hedging instrument used.

For cash flow hedges, the effective portion of any change in the fair value of the instrument that is designated and that qualifies as a cash flow
hedge is recognised in the hedge reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

At the time the hedged item affects the income statement or when the hedged item is no longer expected to occur, the cumulative gain or loss
recognised in the hedge reserve is taken to finance costs in the income statement.

(iii) Price risk

Exposure arising from
Other price movements associated with
underlying equities and derivatives on trades
novated to the CCPs.

Risk management
• Under normal circumstances, this risk is minimal as the trades are matched. However price

movements may impact on credit risk associated with participant obligations (as discussed in
the following section).

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

(b) Credit risk

Exposure arising from
Through its CCP activities, the Group is exposed
to the potential loss that may arise from the
failure of a counterparty to meet its obligations
or commitments. The obligations mainly relate
to T+2 settlement risk for cash market trades
and daily mark-to-market movements on
open derivative positions. Failure of clearing
participants to meet these obligations exposes
the Group to potential losses.

Investment counterparty credit risk arises on
certain financial assets including cash, other
financial assets at amortised cost, and trade
and other receivables.

Risk management
• Clearing participant membership requirements and admission standards, including minimum capital

requirements.

• Participant surveillance, including capital monitoring.
• Daily and intraday counterparty credit risk control, including margining and collateral management.
• Position limits based on the capital of the participant.
• Financial resource adequacy, including fixed capital and stress-testing of clearing participants’

exposure limits against the amount and liquidity of variable and fixed financial resources available.
• Operating rules that deal with recovery and resolution of losses in the event of a clearing participant

default. Refer to note C1(c).

• Initial margin calls outside of Australian business hours.
• Board policies that limit the amount of credit exposure and concentration to any one counterparty, as
well as minimum credit ratings for counterparties. Investments are limited to non-derivative assets.

• Recovery rules that address the allocation of losses between the Group and clearing participants.
• Active debt collection procedures and regular review of trade receivables ageing.

The Group’s ongoing monitoring of participants’ market positions and exposures, coupled with daily margining and collateral management,
including possible intraday and additional margin calls, enable it to manage its central counterparty credit risk and meet its regulatory
obligations. Further information on the resources available to the CCPs in the event of a participant default is shown in note C1.

S&P credit ratings are used in determining the credit quality of the counterparty with whom cash and other financial assets at amortised
cost are held.

Counterparties are limited to the Commonwealth of Australia, Australian state governments and banks, and foreign governments and
banks with a minimum short-term credit rating of A2. The Group’s largest single counterparty exposure at the end of the reporting period
was $4,311.0 million (2019: $5,215.7 million) to an Australian licensed bank with a S&P short-term credit rating of A-1+. The majority of this
exposure was secured against Australian State Government securities. The risk ratings of the counterparties that the Group has exposure
to at the end of the period are shown in the following table.

2020

2019

As at 30 June
Cash at bank and on hand

Overnight cash deposits

Total cash
Reverse repurchase agreements¹

Term deposits

NCDs

P-Notes

T-Notes

FRNs

Total other financial assets at amortised cost
Bonds (lodged by participants)

A1+
$m
438.1

193.0

631.1
3,162.6

489.4

4,179.3

791.3

8,622.6
487.5

A1
$m
30.6

196.4

227.0
3,454.6

434.2

3,888.8
-

Total
$m
468.7

389.4

858.1
6,617.2

923.6

4,179.3

791.3

12,511.4
487.5

A1+
$m
89.6

136.3

225.9
4,571.1

90.0

758.8

3,280.3

18.6

8,718.8
1,106.5

Total financial assets at FVTPL
487.5
1 Reverse repurchase agreements are collateralised by Commonwealth, foreign government or Australian state government securities.

1,106.5

487.5

A1
$m
0.5

106.7

107.2
1,626.5

141.9

338.2

2,106.6
-

Total
$m
90.1

243.0

333.1
6,197.6

231.9

1,097.0

3,280.3

18.6

10,825.4
1,106.5

1,106.5

The Group uses other measures to monitor the credit of other financial assets, which include trade and other receivables, margins
receivable from participants, accrued revenue, interest receivable and investments in equity instruments. Intercompany receivables
consist of balances owing between the entities of the Group and are eliminated on consolidation. The parent entity considers the credit
risk on these balances to be low. The maximum exposure to credit risk for these financial assets is the carrying value as at reporting date.

86 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

(i) Impairment of financial assets
The Group has the following financial assets that are subject to
impairment:

• Cash

• Trade and other receivables

• Other financial assets at amortised cost.

Trade receivables
The Group has used the simplified approach for measuring expected
credit losses for trade receivables whereby the lifetime ECL is
recognised. To measure the loss allowance, the receivables have
been grouped based on the number of days overdue. Expected
loss rates have been determined for each group based on historical
credit losses in the previous six years. These historical rates are
adjusted to reflect current and forward looking information on
macroeconomic factors that affect the ability of customers to settle
the receivables. These rates have been applied to the gross carrying
value of trade receivables to calculate the loss allowance. Where
this calculation results in an immaterial amount no loss allowance
is recognised. A loss allowance is also recognised for any debtors
individually identified as being credit impaired.

The following table shows the aged analysis for gross trade
receivables of the Group.

As at 30 June
Not past due

Past due 0-30 days

Past due 31-60 days

Past due 61-90 days

Past due 91 days and over

Trade receivables

2020
$m
102.9

2.2

0.5

1.4

2019
$m
102.2

3.1

0.4

0.6

1.0

107.5

107.3

As at 30 June 2020, the Group provided $0.7 million (2019: $0.9
million) for trade receivables that were identified as being impaired.

The Group recognised $0.3 million (2019: $0.2 million gain) of impair-
ment loss in profit or loss during the year.

The movement in the loss allowance for trade receivables is as
follows:

Other financial assets at amortised cost
The ECL model for the Group's debt and money market instruments
is based on the probability of default, loss given default and the
Group's exposure to the counterparty. The probability of default
is based on historical default rates and has been sourced from an
external study of global corporate defaults by S&P. These rates have
been adjusted for the loss given default to calculate the ECL rate.

The following tables show the gross carrying amounts of the other
financial assets at amortised and the ECL rates that have been
applied to determine the carrying amount net of the ECL allowance.

As at 30 June 2020

S&P long-
term credit
rating

AAA

AA+

AA-

A+

ECL
rate

0.02%

0.03%

0.05%

As at 30 June 2019

S&P long-
term credit
rating

AAA

AA+

AA-

A+

ECL
rate

0.01%

0.02%

0.03%

0.04%

Gross carrying
amount
$m

ECL loss
allowance
$m

Net carrying
amount
$m

9,078.1

2,456.9

52.9

489.5

209.7

224.7

12,511.8

(0.1)

(0.2)

(0.4)

9,078.1

2,456.9

52.9

489.4

209.6

224.5

12,511.4

Gross carrying
amount
$m

ECL loss
allowance
$m

Net carrying
amount
$m

7,386.7

2,025.1

867.5

252.5

294.0

10,825.8

(0.1)

(0.2)

(0.4)

7,386.7

2,025.1

867.4

252.4

293.8

10,825.4

The ECL rates have been applied to the gross carrying values of
the Group's debt and money market instruments held at amortised
cost as at 30 June. There were no material movements in the loss
allowance for the current or prior years. A reconciliation of the loss
allowance is provided in the following table.

For the year ended 30 June

Opening loss allowance at 1 July
Increase in loss allowance recognised in
profit or loss during the year

Amounts written off during the year

Loss allowance subsequently reversed

Closing balance at 30 June

(0.9)

(1.1)

0.5

0.8

(0.7)

(0.8)

(1.4)

0.3

1.0

(0.9)

For the year ended 30 June
Opening loss allowance at 1 July
Increase in loss allowance recognised in
profit or loss during the year
Closing loss allowance at 30 June

2020
$m
0.4

0.4

2019
$m
0.4

0.4

Cash and other receivables
Other receivables includes margins receivable, accrued revenue,
interest receivable and other debtors. A default event in relation
to margin obligations is defined in the ASX Clear and ASX Clear
(Futures) operating rules. No loss allowance has been recognised for
cash and other receivables as the assessed amount is immaterial.

There were no significant changes to estimation techniques or
assumptions made during the reporting period.

The debt and money market instruments are all considered to have
low credit risk at the reporting date as all counterparties have an
S&P long-term credit rating of A or higher. The credit risk for these
financial assets has not increased significantly since the prior year
and the impairment allowance is measured at an amount equal to
12-month expected credit losses.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

Impairment
The Group recognises a loss allowance on financial assets at amortised cost using a three stage approach as described in the below table.

Stage

Stage 1

Stage 2

Stage 3

Credit risk

No significant increase since initial recognition

Significant increase since initial recognition

Asset is credit impaired

Recognition of ECL

12 month ECLs

Lifetime ECLs

A simplified approach for measuring the loss allowance is applied for trade receivables where the lifetime ECLs are recognised. Loss rates for
trade receivables are determined based on historical loss rates over a four year period and are adjusted for current and forward looking
macroeconomic factors that may affect the customers' ability to settle the receivable.

Assets are credit impaired when there is objective evidence that the Group will not be able to collect all of the original amounts due.

The collectability of trade receivables is reviewed on a regular basis. Debts known to be uncollectable are written off by reducing the carrying
amount directly. Other financial assets are written off when there is no reasonable expectation of recovery. Indicators that this may be the case
include the debtor entering bankruptcy or failure to enter into a payment plan.

Impairment losses are recognised in the statement of comprehensive income in administration expenses.

Exposure arising from
Margins to cover derivatives and cash market
exposures are settled with participants and
invested in the short-term money market on a
daily basis. The investment of these balances
requires strict management to provide sufficient
liquidity for the routine daily margin settlement.

Risk management
• The Board has implemented policies that specify liquidity requirements, based on whether assets can
be liquidated and converted to cash on a same-day basis, including maximum average maturity limits.
Instruments that are eligible for repurchase agreements with the Reserve Bank of Australia are treated
as liquid.

• Forward planning and forecasting of liquidity requirements.

The expected undiscounted contractual cash flows of the Group's financial assets and liabilities are shown in the following table. All other
financial assets at amortised cost are eligible for repurchase in the secondary market. All financial assets and liabilities are non-derivative.

The values on the balance sheet may differ to the assets and liabilities in the following table due to the difference in fair value at balance
date compared to the contractual cash flows up to maturity.

As at 30 June 2020

Financial assets
Cash

Other financial assets at amortised cost

Financial assets at FVTPL

Trade and other receivables

Investments in equity instruments

Total financial assets

Financial liabilities
Trade and other payables

Amounts owing to participants

Lease liabilities

Total financial liabilities

Commitments
Capital and operating commitments

Total commitments

Up to
1 month
$m

>1 month
to 3 months
$m

>3 months
to 1 year
$m

>1 year
$m

No specific
maturity
$m

858.1

4,095.0

487.5

756.0

6,196.6

698.5

12,477.2

1.0

13,176.7

1.0

6,797.0

2.5

1,629.6

3.1

6,799.5

1,632.7

19.9

2.1

22.0

5.8

9.5

18.3

84.9

60.0

45.1

0.8

200.0

200.8

Total
$m

858.1

12,521.6

487.5

761.6

45.1

14,673.9

719.2

12,677.2

97.5

13,493.9

85.1

88 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

As at 30 June 2019

Financial assets
Cash

Other financial assets at amortised cost

Financial assets at FVTPL

Trade and other receivables

Investments in equity instruments

Total financial assets

Financial liabilities
Trade and other payables

Amounts owing to participants

Total financial liabilities

Commitments
Capital and operating commitments

Operating lease commitments

Total commitments

Up to
1 month
$m

>1 month
to 3 months
$m

>3 months
to 1 year
$m

>1 year
$m

No specific
maturity
$m

333.1

5,339.8

1,106.5

390.1

7,169.5

336.0

10,601.0

10,937.0

1.6

0.8

2.4

3,378.9

0.2

2,133.6

0.1

3,379.1

2,133.7

5.4

5.0

1.6

6.6

17.4

7.3

24.7

8.8

0.2

9.0

59.7

60.5

120.2

24.3

0.8

200.0

200.8

Total
$m

333.1

10,852.3

1,115.3

390.6

24.3

12.715.6

342.2

10,801.0

11,143.2

83.7

70.2

153.9

While amounts owing to participants may have contractual cash flows greater than one month, they have been classified as having
maturities up to one month on the basis of the shortest possible obligation for repayment.

(d) Fair value measurements

(i) Financial instruments at fair value
The following table presents the Group’s financial assets measured at fair value at 30 June. The Group does not have any financial liabilities
measured at fair value.

As at 30 June

Financial assets
Investments in equity instruments

Financial assets at FVTPL

Total financial assets

2020

Level 1
$m

Level 2
$m

Level 3
$m

305.5

182.0

45.1

Total
$m

45.1

487.5

532.6

2019

Level 1
$m

Level 2
$m

Level 3
$m

1,044.9

61.6

24.3

5.3

29.6

Total
$m

24.3

1,111.8

1,136.1

There were no transfers between levels for recurring measurements during the year. The Group did not measure any financial assets at
fair value on a non-recurring basis at 30 June in the current or prior year.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Risk management

The classification of financial instruments within the fair value
hierarchy and the valuation techniques used to determine
their values are detailed below.

(iii) Level 3 fair value instruments
The following table presents the changes in Level 3 fair value
instruments during the year:

Level 1
Level 1 inputs are unadjusted quoted prices in active markets at
the measurement date for identical assets and liabilities. Financial
instruments included in this category are Australian Government
bonds. The fair value of Australian Government bonds are deter-
mined by reference to readily observable quoted prices for identical
assets in active markets.

Level 2
Level 2 inputs are inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices). Financial instruments
included in this category include Semi Government bonds as their fair
values are determined using observable market prices for identical
assets that were not actively traded.

Level 3
Level 3 inputs are based on unobservable market data. The fair
values of the Group's unlisted equity investment and convertible
note at FVTPL are determined using unobservable inputs and
therefore are classified as Level 3 instruments.

(ii) Financial instruments at amortised cost
The Group has a number of financial instruments which are not
measured at fair value on the balance sheet. The carrying amounts
of current trade and other receivables, cash, term deposits, reverse
repurchase agreements, current trade and other payables and
current amounts owing to participants are assumed to approximate
their fair value due to their short-term nature. The carrying amount
of non-current amounts owing to participants approximates their
fair value as the impact of discounting is not significant.

The table below presents other financial assets at amortised cost
(excluding those mentioned above) had they been measured on a
fair value basis.

As at 30 June
NCDs

P-Notes

T-Notes

FRNs

Total

2020
$m
924.8

4,183.7

791.6

2019
$m
1,098.5

3,283.6

18.6

5,900.1

4.400.7

The fair values of the above financial assets are determined in
accordance with the level 2 fair value hierarchy described in note
C3(d)(i).

For the year ended 30 June

Opening balance at 1 July 2019
Additions

Disposals

FX revaluation gain:

– Recognised in equity

– Recognised in profit or loss

– Recognised in deferred tax

Closing balance at 30 June 2020

Opening balance at 1 July 2018
Additions

Price revaluation:

– Recognised in equity

– Recognised in deferred tax

FX revaluation gain:

– Recognised in equity

– Recognised in profit or loss

– Recognised in deferred tax

Investments
in unlisted
entities1
$m

Investments
at FVTPL2
$m

24.3
20.5

0.2

0.1

45.1

28.9
-

(4.2)

(1.8)

1.0

0.4

5.3
-

(5.4)

0.1

4.8
0.3

0.2

Total
$m

29.6
20.5

(5.4)

0.2

0.1

45.1

33.7
0.3

(4.2)

(1.8)

1.0

0.2

0.4

29.6
Closing balance at 30 June 2019
1 The revaluation gain/(loss), net of tax, has been recognised within the asset

24.3

5.3

revaluation reserve. Refer to note D1 for further details.

2 The gain, net of tax, has been recognised within administration expenses in

the statement of comprehensive income.

A change in the unobservable inputs used to determine the fair
value of the unlisted equity investment would not have a material
impact on the financial statements.

(e) Enforceable netting arrangements

There are no financial assets and financial liabilities recognised on a
net basis. In the event that a clearing participant defaults and ASX
assumes open positions under novation, ASX’s policy is to recognise
the net open positions where it has the right to offset exposures.

In the event that a clearing participant defaults, ASX may utilise
collateral and commitments lodged by that participant to offset
net losses realised from the close-out of positions. While ASX has
the right to offset this collateral from the open position, its policy
is to only offset following the close-out. The aggregate amount of
collateral and commitments lodged by participants at 30 June 2020
was $12,677.2 million (2019: $10,801.0 million).

90 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Investments

D1 Investments in equity instruments

D2 Equity accounted investments

Investments in unlisted entities

Total investments in equity
instruments

2020
$m
45.1

45.1

2019
$m
24.3

24.3

The investments in equity instruments have been designated
at FVTOCI on initial recognition. The election to measure the
investments at FVTOCI rather than FVTPL has been made as the
Group considers this to be more relevant as they are held for
strategic purposes.

The investments are initially recognised at fair value, being
the consideration given plus transaction costs that are directly
attributable to acquiring the asset. After initial recognition, they
continue to be measured at fair value and any fair value gains or
losses are recognised directly in the asset revaluation reserve in
equity. Any gains or losses on disposal remain within equity.

The fair value of investments in unlisted entities is determined
by reference to unobservable market data at balance date. Refer
to note C3(d)(iii).

Dividend income is recognised when the right to receive the dividend
has been established.

Key judgements
The Group has applied judgement in determining if it has significant
influence or control over the investees and has concluded that it does
not have significant influence over any of its investees as it holds
less than 20% of the voting power and does not have the power to
participate in financial and operating policy decisions.

(a) Investments in unlisted entity

As at 30 June 2020, ASX held 8% (2019: 7%) equity interest in
Digital Asset (DA), which specialises in developer tools and smart
contract applications using its own purpose built programming
language to be used in conjunction with distributed ledgers and
traditional databases.

In August 2019, ASX invested an additional $14.9 million (USD 10
million) in DA and converted the DA convertible note and interest
which was held at $5.6 million (USD 3.9 million) into DA shares.

No dividends were received during the current or prior year. Refer
to note C3(d)(iii) for details of the movement in the fair value in the
current and prior year.

The Group has interests in the following associates and joint ventures
which are individually immaterial to the Group.

Ownership interest

Carrying amount

Nature of
relationship

2020
%

2019
%

2020
$

2019
$

Name of entity
Yieldbroker
Pty Limited
(Yieldbroker)

Associate

Sympli Australia
Pty Ltd (Sympli)

Joint
venture

31.0

46.5

9.5

5.5

40.5

52.0

The country of incorporation and principal place of business for both
entities is Australia. Both Yieldbroker and Sympli are private entities
and therefore quoted market prices are not available.

Yieldbroker operates licensed electronic markets for trading Australian
and New Zealand debt securities and interest rate derivatives.

Sympli intends to offer electronic conveyancing solutions for prop-
erty settlements, known as an Electronic Lodgement Network
Operator (ELNO).

Impairment
During the year the carrying amount of Yieldbroker was reduced
by $15.2 million to recognise the decline in current market value
based on value-in-use using projected cash flows. This impairment
is a result of underperformance by the company and slower than
expected revenue growth. The pre-tax discount rate used is 13.9%
(12.0% post-tax discount rate) and the growth rate applied to extrap-
olate cash flow projections beyond 5 years is 3.5%. The impairment
loss is included in impairment of equity accounted investments
expenses in the consolidated statement of comprehensive income.

The assumptions used for the current reporting period may differ
from the assumptions in the next reporting period as internal and
external circumstances and expectations change.

In particular, if the growth rate and discount rate were revised to
2.0% and 11.5% respectively, the impairment loss recognised in the
carrying amount of Yieldbroker would increase by $2.0 million.
Conversely, if the growth rate and discount rate were revised to
5.0% and 13.0% respectively, the impairment loss recognised in the
carrying amount of Yieldbroker would decrease by $0.6 million.

No impairment was recognised in the current year or prior year
for Sympli.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Investments

The following table shows ASX's aggregated interests in equity
accounted investments.

D3 Financial assets at fair value through
profit or loss

For the year ended 30 June
(Loss) from continuing operations

Impairment loss

Total comprehensive income

2020
$m
(5.0)

(15.2)

(20.2)

2019
$m
(5.1)

(5.1)

In December 2017, ASX acquired a convertible note (the note) issued
by DA for USD 3.5 million.

In August 2019, ASX converted the note into DA shares. Refer to
note C3(d)(iii) for further details of the movement of financial assets
at FVTPL at period end.

The convertible note is initially recognised at fair value being the
consideration given. It is subsequently measured at FVTPL as
the contractual terms of the agreement do not give rise to solely
payments of principal and interest. Any fair value gains or losses
are recognised in profit and loss. If the notes are converted to
equity prior to or at maturity date, the converted shares will be
designated at FVTOCI on initial recognition in accordance with the
Group's accounting policy for investments in equity instruments.

Associates are entities over which the Group has significant influence
but not control.

Joint ventures are arrangements in which the Group and another party
have joint control and have rights to the net assets of the arrangement.

Investments in associates and joint ventures are accounted for using
the equity method. The investments are initially recognised at cost and
the carrying value is subsequently adjusted to recognise the Group’s
share of the investee’s post-acquisition profit or loss and movement
in other comprehensive income. This is recognised in the Group’s
profit and loss and comprehensive income respectively. Dividends
received or receivable from associates are recognised as a reduction
in the carrying amount of the investment.

The carrying amount of each equity accounted investment is tested for
impairment at each reporting date and whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable. Indicators of impairment include a significant or prolonged
decline in the fair value of the investment below its cost. Where the
recoverable amount is less than the carrying amount, an impairment
loss is recognised as an expense in the statement of comprehensive
income. The recoverable amount is the higher of the assets' fair value
less costs of disposal and value in use, and is assessed at the end of
each reporting period.

Key judgements
The Group has applied judgement in determining if it has significant
influence, control or joint control of the investees. Through its appoint-
ment of two directors to the Board of Yieldbroker, ASX participates
in the financial and operating policy decisions of the investee. It also
holds more than 20% of the voting rights so it is presumed that ASX
has significant influence over the investee. The Group however does
not have the power to unilaterally direct these decisions to affect
the returns of the investee so does not have control of the investee.
The investment in Yieldbroker has therefore been classified as an
interest in an associate.

The arrangement in relation to Sympli requires unanimous consent
from both parties about relevant activities. As ASX has joint control
over Sympli and has rights to the net assets of the arrangement the
investment has been classified as a joint venture.

92 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Other balance sheet assets and liabilities

E1 Trade and other receivables

As at 30 June

Current
Trade receivables

Margins receivable

Accrued revenue

Interest receivable

Other debtors

Less: loss allowance

Total trade and other receivables

Refer to note C3(b)(i) for further details of the loss allowance.

2020
$m

107.5

643.0

3.6

4.6

3.6

(0.7)

761.6

2019
$m

107.3

268.6

4.4

11.1

0.1

(0.9)

390.6

Trade receivables which generally have terms of 30 days are initially recognised at their transaction price and subsequently measured at amortised
cost using the effective interest method, less any loss allowance.

Margins receivable represents collateral receivable from clearing participants on cash markets and derivative positions held at the end of the day,
and are received on the next business day. The amounts include the movement in the fair value of derivative positions and are recognised on trade
date. A corresponding margins payable is recognised and disclosed within trade and other payables.

E2 Intangible assets

The movements in the intangible asset balances are as follows:

For the year ended 30 June

Software
$m

2020

Trade-
marks
$m

Customer
lists
$m

Goodwill
$m

Total
$m

Software
$m

2019

Trade-
marks
$m

Customer
lists
$m

Goodwill
$m

Total
$m

Opening balance
Cost

Accumulated amortisation
and impairment

Net book value at 1 July

Movement
Additions¹

Disposals – cost

Disposals – accumulated
amortisation

Amortisation expense

Net book value at 30 June²

Closing balance
Cost

Accumulated amortisation
and impairment

377.1

(244.9)

132.2

65.7

(27.0)

170.9

442.8

(271.9)

7.9

1.2

2,317.6

2,703.8

347.5

(0.6)

(245.5)

(235.7)

0.6

2,317.6

2,458.3

111.8

(0.2)

0.4

65.7

(27.2)

2,317.6

2,496.8

54.3

(24.7)

24.7

(33.9)

132.2

1.2

2,317.6

2,769.5

377.1

(0.8)

(272.7)

(244.9)

Net book value at 30 June²
1 Primarily relates to internal development costs.
² The carrying value of intangible assets under development is $127.9 million (2019: $70.2 million).

2,496.8

2,317.6

170.9

0.4

7.9

132.2

7.9

1.2

2,317.6

2,674.2

(0.4)

(236.1)

0.8

2,317.6

2,438.1

(0.2)

0.6

54.3

(24.7)

24.7

(34.1)

2,317.6

2,458.3

1.2

2,317.6

2,703.8

(0.6)

(245.5)

0.6

2,317.6

2,458.3

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Other balance sheet assets and liabilities

(a) Software

There was no impairment expense recognised during the year for software.

Costs incurred in developing products or systems, and acquiring software and licences that will contribute to future benefits, are capitalised at cost
and amortised on a straight-line basis over their expected useful lives, from the time the assets are in use. Certain staff costs are capitalised when
they can be specifically attributed to software development projects. Software purchased from external vendors is classified as externally acquired
and may include capitalised staff costs that have been incurred in the implementation of the software.

Software is subject to amortisation and is reviewed for indicators of impairment at the end of each reporting period or when events or changes
in circumstances have arisen that indicate the carrying value may be impaired. Where the recoverable amount is less than the carrying amount,
an impairment loss is recognised as an expense in the statement of comprehensive income. The recoverable amount is the higher of an asset’s
fair value less costs of disposal and value-in-use. Determining whether the intangibles are impaired requires an estimation of their useful lives,
residual values and amortisation method. The effect of any changes will be recognised on a prospective basis.

Intangible assets not yet available for use are tested for impairment at least annually, or more frequently if events or changes in circumstances
indicate that they might be impaired. For the purpose of assessing impairment, assets are grouped at the lowest levels for which they are separate
cash generating units (CGUs). Intangible assets not yet available for use are allocated to the Group's CGUs that include the asset. Refer to E2(c)
(ii) for the details of the details of the impairment assessment performed over the Group's CGUs.

The estimated useful lives of significant computer software systems is as follows:

Trading platforms

Clearing platforms

Depository/registry platforms

5 years

10 years

(b) Trademarks and customer lists

There was no impairment expense recognised during the year for trademarks or customer lists.

Trademarks and customer lists have been externally acquired and are measured at cost. Customer lists are amortised on a straight-line basis over
their estimated useful life of five years while the registered trademark has an indefinite useful life and is not amortised. The trademark is assessed
for impairment at each reporting date or when there are indicators of impairment.

(i) Impairment test for goodwill
The Group consists of two CGUs, namely exchange-traded and non exchange-traded. The goodwill attributable to each CGU at the time
of acquisition is as follows:

• Exchange-traded: $2,242.2 million

• Non exchange-traded: $75.4 million.

No impairment charge arose in the current or prior financial year.

(ii) Key estimates and assumptions used for value-in-use calculations
Management has determined the budgeted operating results based on past performance and expectations for the future. The growth
rates used for revenue and expense projections are consistent with, or lower than, historical trends for the CGUs.

The pre-tax discount rate used is 11.8% (9.3% post-tax discount rate (2019: 9.3%)) for all CGUs. The growth rate used to extrapolate cash
flow projections beyond five years is 3.2% (2019: 3.5%) per annum for the exchange-traded CGU and 3.2% (2019: 3.5%) per annum for the
non exchange-traded CGU. These calculations support the carrying value of goodwill and intangible assets not yet available for use. There
is no reasonably possible change in any key assumptions that management has based its determination of the CGU's recoverable amount
on that would result in an impairment charge being recognised.

94 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Other balance sheet assets and liabilities

Goodwill on acquisition is initially measured at cost, being the excess of the consideration paid over the acquirer's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree. Following initial recognition, goodwill is measured at cost less any accumulated
impairment losses.

Goodwill has an indefinite useful life and as such is not subject to amortisation and is tested semi-annually for impairment, or more frequently if
events or changes in circumstances indicate that they might be impaired. For the purpose of assessing impairment, assets are grouped at the lowest
levels for which they are separately identifiable CGUs. A CGU includes in its carrying amount an intangible asset that is not yet available for use and
that asset is tested for impairment only as part of the CGU. Goodwill is allocated to each of the Group's CGUs that are expected to benefit from the
business combination in which the goodwill arose.

Goodwill is tested on an annual basis. Where the recoverable amount is less than the carrying amount, an impairment loss is recognised as an
expense in the statement of comprehensive income. The recoverable amount of each CGU is determined based on value-in-use calculations. These
calculations use cash flow projections based on financial estimates reviewed by management covering a five-year period. Cash flows beyond this
five-year period are extrapolated using estimated growth rates that do not exceed the long-term average growth rate for the business in which the
CGU operates and are consistent with external sources of information.

E3 Property, plant and equipment

The movements in the property, plant and equipment asset balances are as follows:

For the year ended 30 June

Opening balance
Cost

Accumulated depreciation

Net book value at 1 July

Movement
Additions

Transfers¹

Disposals – cost

Disposals – accumulated
depreciation

Depreciation expense

Net book value at 30 June

Closing balance
Cost

Accumulated depreciation

Net book value at 30 June

2020

2019

Leasehold
improvements
$m

Plant and
equipment
$m

Computer
equipment
$m

Leasehold
improvements
$m

Total
$m

Plant and
equipment
$m

Computer
equipment
$m

32.7

(25.8)

6.9

(0.3)

(2.4)

4.2

32.4

(28.2)

4.2

30.3

(21.5)

8.8

94.9

(49.1)

45.8

0.9

13.8

(2.9)

6.8

31.2

(24.4)

6.8

(8.5)

51.1

108.7

(57.6)

51.1

157.9

(96.4)

61.5

14.7

(0.3)

(13.8)

62.1

172.3

(110.2)

62.1

33.0

(24.3)

8.7

0.6

(0.9)

0.8

(2.3)

6.9

32.7

(25.8)

6.9

29.9

(19.6)

10.3

1.3

(0.9)

0.9

(2.8)

8.8

30.3

(21.5)

8.8

85.2

(49.8)

35.4

18.9

(9.2)

9.2

(8.5)

45.8

94.9

(49.1)

45.8

Total
$m

148.1

(93.7)

54.4

20.8

(11.0)

10.9

(13.6)

61.5

157.9

(96.4)

61.5

¹ Transfers of $0.3 million to property leases ROU assets on adoption of AASB 16. Refer to note E6 and note A3 for details on changes in accounting policies.

Property, plant and equipment is measured at cost less accumulated depreciation and any impairment in value. Cost includes expenditure that is
directly attributable to the acquisition of the assets. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. Repairs and maintenance are recognised in profit or loss during the financial period in which they are incurred.

The cost of improvements to leasehold property is capitalised and amortised over the unexpired period of the lease or the estimated useful lives of
the improvements, whichever is the shorter.

Assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposal are determined by comparing the proceeds on disposal with the carrying amount and are included in profit or loss.

Depreciation of assets begins from the time an asset is implemented and available for use. Depreciation is provided on a straight-line basis on all
plant and equipment, over their estimated useful lives.

The depreciation periods for each class of asset, for the current and previous years, are as follows:

Leasehold improvements

Plant and equipment

Computer equipment

The shorter of minimum lease term and useful life

3 – 10 years

3 – 5 years

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Other balance sheet assets and liabilities

E4 Trade and other payables

As at 30 June
Trade payables

Margins payable

Interest payable

Rebates payable

Transaction taxes payable

Employee-related payables

Accrued expenses

Other payables

Total

2020
$m
5.6

643.0

1.4

25.9

7.6

21.1

21.3

0.9

2019
$m
3.4

268.6

10.0

21.4

7.0

18.6

19.4

0.9

726.8

349.3

Trade and other payables are initially recognised at fair value and are
subsequently measured at amortised cost using the effective interest
method. They represent liabilities for goods and services provided to
the Group prior to the end of the reporting period that are unpaid.

All trade and other payables are unsecured and usually paid within 30
days of recognition other than certain rebates and accrued expenses
which are typically paid within three months of recognition.

Trade and other payables are presented as current liabilities unless
payment is not due within 12 months of the reporting date.

Refer to the accounting policy in note E1 for details of the margins
payable.

Interest payable includes interest owed to participants on cash collat-
eral and commitments lodged. Interest is recognised as a finance
cost in the statement of comprehensive income using the effective
interest rate method.

Rebates payable represent refund liabilities. Refer to the accounting
policies in note B2 for further details of the rebates.

E5 Provisions

As at 30 June

Current
Employee provisions

Premises provisions

Total

Non-current
Employee provisions

Premises provisions

Total

17.9

3.6

1.9

5.5

The movements in the premises provision are as follows:

For the year ended 30 June

Opening balance at 1 July
Provisions used during the period

Additions during the period

Unwinding of discount

Provisions reversed on adoption
of AASB 16

Closing balance at 30 June

6.5
-

0.1

(4.7)

1.9

14.7

0.5

15.2

3.6

6.0

9.6

6.0
(0.5)

0.8

0.2

6.5

The provisions for employee benefits predominantly relate to annual
and long service leave obligations. Premises provisions comprises
of make-good provisions. In FY19, premise provisions also included
lease rental amortised on a straight-line basis over the term of the
lease and lease incentives.

Provisions are recognised when the Group has a present legal or
constructive obligation as a result of a past event, that it is probable
the obligation will be settled and the amount can be reliably estimated.
If the effect is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and when appropriate, the risks
specific to the liability. The increase in the provision due to the passage
of time is recognised as a finance cost in profit or loss.

Contingent liabilities are possible obligations whose existence will be
confirmed only by uncertain future events, and present obligations where
the transfer of economic resources is not probable or cannot be reliably
measured. There are ongoing legal claims and possible claims against the
Group and its subsidiaries. Contingent liabilities exist in respect of actual
and potential claims. An assessment of any likely loss has been made
on a case-by-case basis and a provision is raised where appropriate.

Current employee provisions include liabilities for annual leave and wages
and salaries, including non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the
employees render the related service. These are recognised in respect of
employees’ services up to the end of the reporting period. Long service
leave provisions that the Company does not have an unconditional right
to defer for 12 months after the reporting date are recognised as a current
provision, regardless of when the actual settlement is expected to occur.
Current employee provisions are measured at the amounts expected to
be paid when the liabilities are settled.

Non-current employee provisions include long service leave provisions
where the Company has an unconditional right to defer settlement for
at least 12 months after the reporting period. Non-current employee
provisions are not expected to be wholly settled within 12 months after
the end of the reporting date, and are therefore measured as the present
value of expected future payments.

When determining whether employees qualify or are expected to qualify
for the Group’s long service leave arrangements, consideration is given
to history of employee departures and periods of service. Expected
future wage and salary levels are discounted using the rates attached
to a basket of comparable liquid corporate bonds at the end of each
reporting period, which most closely match the terms to maturity of
the related liabilities.

For short-term cash incentives offered to staff the Group recognises
a liability and an expense. A provision is recognised where there is a
contractual obligation or where there is past practice that gives clear
evidence of the amount of the obligation.

Where short-term incentives are deferred to a future period the value of
the incentives is expensed over the term of the deferral and recognised
as a liability. Amounts expected to be wholly settled within 12 months
after the end of the reporting date are recognised as current, all others
are recognised as non-current.

Make-good obligations are provided for office space under operating
leases that require the premises to be returned to the lessor in their
original condition. The operating lease payments do not include the
make-good payment at the end of the lease term. Provisions for make-
good obligations are recognised when the Group becomes party to lease
contracts that include make-good clauses.

Prior year accounting policy
In the prior year lease incentives received or receivable, such as rent-free
periods and premises fit-out allowances, may have been included in oper-
ating leases entered into by the Group. The value of lease incentives was
included in the premises provision and was recognised as a reduction in
occupancy expense in profit or loss on a straight-line basis over the term
of the lease. Where the original lease term had been extended, these
incentives were continued to be recognised over the original lease term.

96 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Other balance sheet assets and liabilities

E6 Leases

As allowed by AASB 16, the prior year has not been restated and
comparative disclosures have not been provided in this note.

The movements in the right-of-use asset balances are as follows:

2020

Property
leases
$m

Other
$m

Total
$m

For the year ended 30 June

Opening balance

Net book value at 1 July¹

77.6

5.7

83.3

Movement
Additions

Disposals – cost

Disposals – accumulated
depreciation

Depreciation expense

Net book value at 30 June

Closing balance
Cost

Accumulated depreciation

(9.1)

68.5

77.6

(9.1)

3.4

(1.2)

0.4

(1.9)

6.4

7.9

(1.5)

3.4

(1.2)

0.4

(11.0)

74.9

85.5

(10.6)

74.9
Net book value at 30 June
¹ Net book value at 1 July includes assets recognised on adoption of AASB 16.
The balance includes $0.3 million transfers from leasehold improvements.
Refer to note A3 for details on changes in accounting policies.

68.5

6.4

The movements in the lease liabilities balance are as follows:

For the year ended 30 June
Liability recognised on adoption of AASB 16

Interest incurred

Payment of interest expense

Payments of lease liabilities

Total lease liabilities

2020
$m
87.2

3.4

(3.4)

(6.1)

81.1

The consolidated statement of other comprehensive income shows
the following amounts relating to leases:

For the year ended 30 June

Interest on lease liabilities

Expense relating to short-term & low value leases

Depreciation expense

Total

2020
$m

3.4

0.6

11.0

15.0

The consolidated statement of cash flows shows the following
amounts relating to leases:

For the year ended 30 June
Principal payments for leased assets

Payment of interest expense

Total cash outflow for leases

2020
$m
6.1

3.4

9.5

The right-of-use asset is initially measured at cost which comprises of
the amount of the initial measurement of the lease liability, adjusted
for any lease payments made at or before commencement date, plus
any initial direct costs incurred, and an estimate of costs to restore
the underlying asset, less any lease incentives received.

Depreciation is charged on a straight-line basis on all right-of-use
assets over the term of the lease. The right-of-use asset is periodically
assessed for impairment and is adjusted for certain remeasurements
of the lease liability.

Lease liabilities are initially measured on a present value basis of the
following lease payments:

• Fixed payments (including in-substance fixed payments), less

any lease incentives receivable

• Variable lease payments that are based on an index or a rate

• Payments of penalties for terminating the lease, if the lease

term reflects the group exercising that option.

Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease.

Application of the incremental borrowing rate is adopted where
the interest rate implicit in the lease cannot be readily determined,
which is generally the case for leases in the Group. The incremental
borrowing rate is the rate that the Group would have to pay to borrow
funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment, with similar terms, security
and conditions.

The lease liability is measured at amortised cost using the effective
interest method. It is re-measured when there is a change in future
lease payments arising from a change in an index or rate, or if the
Group changes its assessment of whether it will exercise a purchase,
extension or termination option with a corresponding adjustment to
the right-of-use asset.

Lease payments due within the next 12 months are recognised within
current lease liabilities. Payments due after 12 months are recognised
within non-current lease liabilities.

Interest expense on the lease liability is a component of finance cost
and is presented in the consolidated statement of comprehensive
income.

For short-term leases of 12 months or less, and leases of low-value
assets, the Group has elected not to recognise right-of-use assets
and lease liabilities for these leases. The Group recognises the lease
payments associated with these leases as an expense on a straight-
line basis over the lease term.

Critical judgements in determining lease term
In determining the lease term, the Group considers all facts and circum-
stances that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term
if the lease is reasonably certain to be extended (or not terminated).
The lease term is reassessed if an option is actually exercised (or not
exercised) or the Group becomes obliged to exercise (or not exercise) it.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Group disclosures

ASX Limited and Australian Securities Exchange Limited are licensed
to operate financial markets while ASX Clear, ASX Clear (Futures),
Austraclear Limited and ASX Settlement Pty Limited are licensed
to operate clearing and settlement facilities.

In accordance with the Corporations Act 2001, the Group maintains
two fidelity funds for claims about the defalcation of monies in
relation to cash market and derivative trading. ASX Limited acts as
manager for the ASX Division 3 Compensation Fund and Australian
Securities Exchange Limited acts as trustee for the Sydney Futures
Exchange Limited Fidelity Fund. ASX is also the sole member of the
Securities Exchanges Guarantee Corporation (SEGC) which is respon-
sible for administering the NGF, a compensation fund available to
meet certain types of claims arising from dealings with participants
of ASX and, in limited circumstances, participants of ASX Clear, in
accordance with the Corporations Act 2001.

ASX Division 3 Compensation Fund, Sydney Futures Exchange
Limited Fidelity Fund and SEGC are not consolidated into the Group.

All subsidiaries are incorporated in Australia except for Australian
Securities Exchange (US) Inc (incorporated in the US), New Zealand
Futures and Options Exchange Limited and ASX Energy Limited
(both incorporated in New Zealand). All subsidiaries have the same
reporting date.

Subsidiaries are consolidated from the date on which control is
transferred to the Group and are de-consolidated from the date
that control ceases. Control exists when the Company is exposed
to, or has rights to, variable returns from its involvement with that
entity and has the ability to affect those returns through its power
to direct the activities of the entity. In addition to considering the
existence of potential voting rights that are presently exercisable
or convertible, the Company also considers relationships with other
parties that may result in the Company controlling an entity on the
basis of de facto circumstances.

The Group has two established trusts. LTIPT administers the Group’s
employee share scheme while ASX Clearing Corporation Trust manages
the cash and financial assets at amortised cost of the two CCP subsidi-
aries. Both trusts are consolidated as the substance of the relationship
is that they are controlled by the Group.

F1 Subsidiaries

Parent entity¹: ASX Limited

Subsidiaries of ASX Limited:
ACN 611 659 664 Limited2
ASX Acceler8 Pty Limited
ASX Benchmarks Pty Limited
ASX Clearing Corporation Limited
ASX Compliance Pty Limited
ASX Data Analytics Pty Limited
ASX Energy Limited
ASX Financial Settlements Pty Limited
ASX Futures Exchange Pty Limited
ASX Long-Term Incentive Plan Trust
ASX Operations Pty Limited2
ASX Settlement Corporation Limited2
Australian Securities Exchange Limited2
Australian Stock Exchange Pty Limited
SFE Corporation Limited2

Subsidiaries of ASX Operations Pty Limited:
ASX Collateral Management Services Pty Limited
Australian Clearing Corporation Limited2
Australian Clearing House Pty Limited
Equityclear Pty Limited
New Zealand Futures and Options Exchange Limited
Options Clearing House Pty Limited
Sydney Futures Exchange Pty Limited

Subsidiaries of ASX Clearing Corporation Limited:
ASX Clear (Futures) Pty Limited
ASX Clear Pty Limited
ASX Clearing Corporation Trust

Subsidiaries of ASX Settlement Corporation Limited:
ASX Settlement Pty Limited
Austraclear Limited

Subsidiaries of ASX Settlement Pty Limited:
CHESS Depositary Nominees Pty Limited

Subsidiaries of Austraclear Limited:
Austraclear Services Limited

Subsidiaries of Australian Securities Exchange Limited:
Australian Securities Exchange (US) Inc

1 Parent entity refers to the immediate controlling entity of the entity in which

the investment is shown. The parent entity’s investment in relation to all
subsidiaries during the financial year was 100% (2019: 100%).

2 These subsidiaries are parties to the Deed of Cross Guarantee (the Deed) and
have been granted relief from preparing financial statements in accordance
with ASIC Legislative Instrument 2016/785. Refer to note F2 for details of
the Deed.

98 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Group disclosures

F2 Deed of Cross Guarantee

(b) Consolidated balance sheet

The consolidated balance sheet for the closed group is set out
below.

ASX Limited and the wholly owned subsidiaries listed below are
parties to a Deed of Cross Guarantee. In accordance with the Deed,
each party guarantees the debts of the others.

Subsidiary name
ACN 611 659 664 Limited

ASX Operations Pty Limited

Australian Clearing Corporation Limited

Australian Securities Exchange Limited

ASX Settlement Corporation Limited

SFE Corporation Limited

ABN/ACN
611 659 664

42 004 523 782

068 624 813

83 000 943 377

48 008 617 187

74 000 299 392

Pursuant to ASIC Legislative Instrument 2016/785, the wholly owned
subsidiaries are relieved from the requirement to prepare financial
reports and directors’ reports.

The entities represent a ‘closed group’ for the purposes of the
instrument, and as there are no other parties to the Deed that
are controlled by the Company, they also represent the ‘extended
closed group’.

As at 30 June

Current assets
Cash

Other financial assets at amortised cost

Trade and other receivables

Prepayments

Total current assets

Non-current assets
Investments in subsidiaries

Investments in equity instruments

Equity accounted investments

Financial assets at FVTPL

Intangible assets

Property, plant and equipment

Leased assets

Net deferred tax asset

Prepayments

No entities were added or removed from the Deed during the year.

Total non-current assets

Total assets

Current liabilities
Trade and other payables

Current tax liabilities

Provisions

Lease liabilities

Revenue received in advance

Total current liabilities

Non-current liabilities
Provisions

Lease liabilities

Revenue received in advance

Total non-current liabilities

Total liabilities

Net assets

Equity
Issued capital

Retained earnings

Reserves

Total equity

(a) Consolidated statement of comprehensive income
and summary of movements in retained earnings

The consolidated statement of comprehensive income and summary
of movements in consolidated retained earnings for the closed
group is set out below.

Statement of comprehensive income

For the year ended 30 June
Total revenue

Total expenses

Profit before income tax expense
Income tax expense

Net profit for the period

Items that may be reclassified to
profit or loss:

Change in the fair value of
investments in equity instruments

Change in the fair value of cash flow hedges

Other comprehensive income for the
period, net of tax

2020
$m
1,014.0

(312.0)

702.0
(197.0)

505.0

0.2

(0.5)

(0.3)

2019
$m
937.1

(267.3)

669.8
(186.0)

483.8

(7.9)

Total comprehensive income for the period

504.7

475.9

Summary of movements in consolidated retained earnings

Opening retained earnings at 1 July
Adjustments on adoption of new
accounting standards

Transfers from reserves to
retained earnings

Dividends paid

Profit for the period

Closing retained earnings at 30 June

792.7

(696.5)

505.0

601.2

665.7

(84.8)

160.7

(432.7)

483.8

792.7

2020
$m

64.7

184.7

111.5

23.3

384.2

922.1

45.1

40.5

2019
$m

129.7

568.4

125.6

17.5

841.2

731.1

24.3

52.0

5.3

2,433.7

2,395.0

62.1

74.9

44.8

8.7

61.5

45.3

10.5

3,631.9

3,325.0

4,016.1

4,166.2

79.4

25.8

17.9

9.5

89.1

221.7

5.5

71.6

71.0

148.1

369.8

66.7

89.9

15.2

83.1

254.9

9.6

65.8

75.4

330.3

3,646.3

3,835.9

3,027.2

601.2

17.9

792.7

16.0

3,646.3

3,835.9

ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Group disclosures

F3 Related party transactions

F4 Parent entity financial information

(a) Transactions between subsidiaries

(a) Summary financial information

ASX Operations Pty Limited provides operational support for the
majority of the Group’s activities. Expenses paid, revenues collected
and purchase of capital items on behalf of other entities within the
Group are booked into inter-entity accounts. Interest is not charged
on any inter-entity account, other than trust balances.

Transactions between the Company and subsidiaries are eliminated
on consolidation.

Balances receivable by the Company from wholly owned subsidiaries
within the Group are as follows:

As at 30 June

Current
Amounts due from subsidiaries

2020
$000

2019
$000

146,667

599,121

The following transactions occurred between subsidiaries and the
Company during the year:

For the year ended 30 June
Dividends paid to the parent entity

521,000

399,000

(b) Transactions with other related entities

The following transactions occurred with other related entities
during the year:

Purchase of services from associates

339

265

These transactions are on an arm's length basis and under normal
commercial terms and conditions.

KMP compensation (including non-executive directors) provided
during the financial year is set out in the following table. Further
details are disclosed in the Remuneration Report on pages 46 to 62.

Short-term employee benefits

Post-employment benefits

Long-term benefits

Share-based payments

Total

9,982

305

2,752

13,101

9,857

273

(18)

2,425

12,537

The share-based payments reflects the expense for performance
rights issued under the ASX Long-Term Incentive Plan, shares
issued under equity plans and shares purchased under the employee
share scheme. The expense is calculated using the fair value of
performance rights or shares at grant date, less any write-back
for performance rights lapsed as a result of non-market hurdles
not attained.

The individual financial statements for the parent entity show the
following aggregate amounts:

Statement of comprehensive income

For the year ended 30 June
Total revenue

Total expenses

Profit before income tax expense
Income tax expense

Net profit for the period

Other comprehensive income for the
period, net of tax

Total comprehensive income for
the period

Balance sheet

As at 30 June
Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Issued capital

Retained earnings

Asset revaluation reserve

Equity compensation reserve

Total equity

2020
$m
516.0

(16.4)

499.6
0.4

500.0

(0.1)

499.9

147.4

3,459.6

3,607.0

25.8

0.1

25.9

3,581.1

3,027.2

538.2

0.1

15.6

2019
$m
399.4

(0.4)

399.0
(0.6)

398.4

0.1

398.5

600.6

3,264.7

3,865.3

89.9

3,775.4

3,027.2

734.8

(0.1)

13.5

3,581.1

3,775.4

The financial information for the parent entity, ASX, has been prepared
on the same basis as the consolidated financial statements, except
as set out below.

Unlisted shares in subsidiaries are accounted for at cost in the financial
statements of ASX.

ASX elected to form a tax consolidated group (tax group) for income
tax purposes. ASX is the head entity and is therefore liable for the
income tax liabilities of the tax group. The consolidated current
and deferred tax amounts arising from temporary differences
of the members of the tax group are recognised in the separate
financial statements of the members of the tax group using the
‘separate taxpayer within group’ approach. ASX has entered into a
tax funding agreement with members of the Australian tax group.
The agreement has the objective of achieving an appropriate
allocation of the Group’s income tax expense to the main operating
subsidiaries within the Group. The tax funding agreement also has
the objective of allocating deferred tax assets relating to tax losses
only, and current tax liabilities of the main operating subsidiaries
to ASX. The subsidiaries will reimburse ASX for their portion of
the Group’s current tax liability and will recognise this payment as
an inter-entity payable or receivable in their financial statements
for that financial year. ASX will reimburse the subsidiaries for the
deferred tax asset from any unused tax losses or credits by making
a payment equal to the carrying value of the deferred tax asset.

100 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Group disclosures

(b) Guarantees entered into by the parent entity

F5 Other disclosures

The parent entity, ASX, is party to a Deed of Cross Guarantee
together with the entities defined in note F2. Under the Deed, the
Company guarantees to each creditor payment in full of any debt
in the event of winding up of any of the subsidiaries under certain
provisions of the Corporations Act 2001. No deficiencies of assets
exist in any of these entities.

ASX has an agreement with ASX Clear for a $230.0 million (2019:
$150.0 million) standby liquidity loan facility that may be used in
limited and specific circumstances following the default of clearing
participants.

ASX has an agreement with CHESS Depositary Nominees Pty Limited
(CDN) which provides $10.0 million (2019: $10.0 million) in funds to
support CDN’s licence obligations if required.

No payments were made under either facility in the current or prior
financial year.

The NGF, which is administered by SEGC, is maintained to provide
compensation for prescribed claims arising from dealings with
market participants as set out in the Corporations Act 2001. If the
net assets of the NGF fall below the minimum amount determined
by the Minister, SEGC may determine that ASX or participants must
pay a levy to SEGC. No levies were called on ASX in the current or
prior financial year.

In accordance with the Financial Stability Standards recovery
rules, the parent entity, ASX, is obligated in certain circumstances
to replenish a shortfall in the financial resources available to
the CCPs up to predetermined levels for any one participant default.
No replenishments were made in the current or prior year. In
accordance with the Australian Financial Services Licence of ASX
Collateral Management Services Pty Limited, ASX Limited has an
obligation to fund any amounts required by the subsidiary.

F5.1 Commitments

(a) Capital commitments
Capital commitments contracted for but not yet incurred as at
balance date are as follows:

As at 30 June
Intangible assets – software

2020
$m
22.3

2019
$m
19.8

(b) Operating lease commitments
Commitments for minimum lease payments of non-cancellable
leases are as follows:

Due:
Not later than one year

Later than one year but not later
than five years

Later than five years

Total

9.7

36.1

24.4

70.2

Upon adoption of AASB 16 on 1 July 2019, what the Group recognised
as operating leases under the previous standard AASB 117, are now
recognised as lease liabilities on the balance sheet. See note E6 for
further details. In the prior year the Group’s major operating leases
were for the premises from which it operates.

Prior year accounting policy
Operating leases are those in which a significant portion of the risks
and rewards of ownership are not transferred to the Group as lessee.
Minimum lease payments, which includes fixed rental increases, are
recognised in profit or loss on a straight-line basis over the period
of the lease.

ASX Limited did not have any other contractual commitments or
contingent liabilities for the years ended 30 June 2020 or 2019.

F5.2 Share-based payments

(d) Borrowings

ASX Limited has an unsecured committed facility that can only be
called upon to provide short-term liquidity to ASX Clear following a
clearing participant default. The facility limit is $180.0 million (2019:
$100.0 million) and remained undrawn at the date of this report.

In November 2019, ASX Limited established a new bilateral corporate
debt facility to assist with short-term working capital requirements.
The facility limit is $300.0 million and there are no outstanding
balances owed at the end of the current reporting period.

The movements in borrowings is summarised below:

For the year ended 30 June

As at 1 July

Cash flows
Proceeds

Repayments

Total

2020
$m
-

100.0

(100.0)

2019
$m
-

(a) Long-Term Incentive Plan
The Group provides performance rights to ordinary shares of
the Company to employees as part of the LTI Plan to recognise
performance, skills and behaviours that deliver sustainable
long-term shareholder value. They entitle certain KMP to
performance rights over ASX Limited shares.

Participants are granted performance rights that only vest if certain
performance conditions are met. All performance rights are to be
settled by physical delivery of ordinary shares in ASX Limited subject
to the performance conditions being attained. The number of rights
that vest depends on an EPS hurdle being achieved and ASX’s total
shareholder return (TSR) relative to a comparator group. Under all of
the plans, 50% of the performance rights are dependant on relative
EPS growth and 50% on relative TSR. All plans have a contractual
life of four years and do not carry rights to dividends.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

101

Notes to the consolidated financial statements continued
Group disclosures

The following table shows the movement in the number of
performance rights during the current and prior year.

For the year ended 30 June

Opening balance at 1 July
Granted during the year

Vested during the year

Lapsed during the year

Closing balance at 30 June

2020
No. of rights

2019
No. of rights

96,602
18,422

(6,520)

(6,521)

101,983

72,838
23,764

96,602

Details of each of the plans and the number of grants outstanding
at the end of the reporting period is shown in the following table.

Grant date/employees entitled
Performance rights granted to
KMP on 24 September 2019

Performance rights granted to
KMP on 4 October 2018

Performance rights granted to
KMP on 26 September 2017

Performance rights granted to
KMP on 28 September 2016

Total

Number of
instruments
granted

Weighted
average fair
value

18,422

23,764

28,463

31,334

101,983

$50.82

$38.91

$34.30

$29.68

(b) Deferred equity plans
The Group operates deferred equity plans for KMPs and other
employees. Under the plan, an employee receives between 40%–50%
of their STI in cash and the remainder as shares which are deferred
for two to four years in equity. If the employee ceases employment
during the deferred share period, the shares are forfeited, except
in certain limited circumstances.

Employees have full ownership rights of the shares under the
schemes including voting rights and entitlement to dividends.
Provided the employee remains employed by the ASX Group and
maintains satisfactory individual performance, the shares are subject
to a holding lock until vesting. Post vesting, employees can only
deal with the shares in accordance with ASX's dealing rules. The
shares cannot be transferred to another person or disposed of
during this period.

The number of shares allocated to each eligible employee is the
amount of the STI award deferred into shares divided by the volume
weighted average price (VWAP) over the five business days up to
and including the offer close date, rounded to the nearest share.

During the year, there were 103,900 (2019: 100,544) shares allo-
cated. The shares are recognised at their fair value, being the market
price on purchase date. The weighted average fair value of the
shares issued under the deferred equity plans during the year was
$83.79 (2019: $67.00).

(c) Employee share purchase plan
The ASX employee share purchase plan offers the opportunity for
employees to purchase fully paid ordinary shares in ASX through
salary sacrifice up to the value of $1,000 at a discount of 10%. All
Australian permanent full-time and part-time employees, and
maximum-term contractors with end dates beyond 30 June are
eligible to participate in the scheme.

Employees have full ownership rights of the shares under the
scheme including voting rights and entitlement to dividends. The
shares are subject to a three-year holding lock and as such cannot
be transferred to another person or disposed of until the earlier
of cessation of employment or three years from grant date, and
subject to compliance with ASX's dealing rules.

The number of shares allocated to each employee is the offer
amount divided by the VWAP over the five business days up to and
including the offer close date, rounded down to the nearest share.

Under the plan, 5,232 shares (2019: 5,852) were issued in total. The
shares are recognised at their fair value of $74.30 (2019: $70.67),
being the market price on the purchase date.

(d) Employee expenses
The following table shows the total share-based payments
recognised within staff expenses during the year and includes the
impact of reversals resulting from non-market based performance
hurdles not being achieved.

Long-Term Incentive Plan

Deferred equity plans

Employee share purchase plan

Total

2020
$m
0.2

6.9

0.4

7.5

2019
$m
0.3

5.4

0.4

6.1

The fair value of the performance rights for the EPS component is
calculated using the share price at market close on the grant date,
less the present value of the expected dividends over the performance
period. The fair value of performance rights for the TSR component
is calculated by an independent valuer using a Black-Scholes option
valuation model.

Fair values are recognised over the vesting period as an expense with a
corresponding increase in the equity compensation reserve. Fair values
include the impact of any market performance conditions and the
impact of any non-vesting conditions, but excludes the impact of any
service and non-market performance vesting conditions. Non-market
vesting conditions are included in assumptions about the number
of performance rights that are expected to vest. The impact of any
revisions to the original estimates are recognised in profit or loss with
a corresponding adjustment to equity.

102 ASX Annual Report 2020 Notes to the consolidated financial statements continued

Notes to the consolidated financial statements continued
Group disclosures

F5.3 Auditor’s remuneration

The following fees were paid or payable by the Group for and on
behalf of all Group entities for services provided by the auditor and
its related practices during the financial year:

PricewaterhouseCoopers Australia

Statutory audit services:
Audit and review of the financial
statements and other audit work
under the Corporations Act 2001

Audit of information technology
platforms

Other audit services:
Code of Practice compliance

Non-audit services:
Tax compliance services

Other review services

2020
$'000

2019
$'000

687

196

157

729

191

154

Total remuneration for
PricewaterhouseCoopers Australia

1,120

1,205

F5.4 Subsequent events

Subsequent to balance date, ASX has invested a further $2.9
million (USD 2.0 million) in Digital Asset in July 2020 using the
same pre-money valuation and pricing as in the previous Series
C funding round completed prior to balance date. This additional
investment has increased ASX’s shareholding in Digital Asset to 8.7%.

ASX Annual Report 2020 Notes to the consolidated financial statements continued

103

Directors' declaration

In the opinion of the directors of ASX Limited (the Company):

a. the financial statements and notes that are contained in pages 66 to 103 and the Remuneration Report set out on pages 46 to 62 in

the Annual Report, are in accordance with the Corporations Act 2001, including:

i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the finan-

cial year ended on that date, and

ii. complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting

requirements

b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable

c. at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group identified

in note F2 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross
Guarantee described in note F2, and

d. the financial statements also comply with International Financial Reporting Standards.

The directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer
and the Chief Financial Officer for the financial year ended 30 June 2020.

Signed in accordance with a resolution of the directors:

Rick Holliday-Smith
Chairman

Dominic Stevens
Managing Director and Chief Executive Officer

Sydney, 20 August 2020

104 ASX Annual Report 2020 Directors' declaration
104

Independent auditor’s report to the members of ASX Limited

Report on the audit of the financial report

Our audit approach

Our opinion

In our opinion:

The accompanying financial report of ASX Limited (the Company)
and its controlled entities (together the Group) is in accordance with
the Corporations Act 2001, including:

a. giving a true and fair view of the Group's financial position as
at 30 June 2020 and of its financial performance for the year
then ended

b. complying with Australian Accounting Standards and the

Corporations Regulations 2001.

What we have audited

The Group financial report comprises:

• the consolidated balance sheet as at 30 June 2020

• the consolidated statement of comprehensive income for the

year then ended

• the consolidated statement of changes in equity for the year

then ended

• the consolidated statement of cash flows for the year then ended

• the notes to the consolidated financial statements, which include

a summary of significant accounting policies

• the directors’ declaration.

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 finan-
cial report section of our report.

We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor inde-
pendence 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 (includ-
ing 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.

An audit is designed to provide reasonable assurance about
whether the financial report is free from material misstatement.
Misstatements may arise due to fraud or error. They are considered
material if individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the
basis of the financial report.

We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial report
as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls, and
the industry in which it operates.

Materiality
• For the purpose of our audit we used overall Group materiality of
$36.8m, which represents approximately 5% of the Group’s profit
before tax, adjusted to exclude an impairment in the year.

• We applied this threshold, together with qualitative considera-

tions, to determine the scope of our audit and the nature, timing
and extent of our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.

• We chose Group profit before tax because, in our view, it is the

benchmark against which the performance of the Group is most
commonly measured. We adjusted for impairment because it is
an infrequently occurring item.

• We utilised a 5% threshold based on our professional judgement,
noting it is within the range of commonly acceptable thresholds.

Audit scope
• Our audit focused on where the Group made subjective judge-
ments; for example, significant accounting estimates involving
assumptions and inherently uncertain future events.

PricewaterhouseCoopers, ABN 52 780 433 757

One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

ASX Annual Report 2020 Independent auditor’s report to the members of ASX Limited

105

Independent auditor’s report to the members of ASX Limited continued

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 for
the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular
audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee.

Key audit matter

How our audit addressed the key audit matter

We performed testing over the Group’s impairment assessment of
each CGU (exchange-traded and non-exchange traded), which included
the following procedures, amongst others:

• Evaluating the Group’s cash flow forecasts and the process by
which they were developed, including considering the mathe-
matical accuracy of the underlying calculations in the discounted
cash flow model and assessing whether the value in use cash
flow forecasts were consistent with previous performance, the
Board-approved budgets and that key assumptions in the budg-
ets were subject to oversight by the directors

• Performing a sensitivity analysis over the key assumptions used
by the Group to establish the impact on results from using alter-
native growth rates and discount rates.

Together with PwC valuation experts, we also:

• Compared the Group’s assumptions for forecast cash flows and
growth rates used in the cash flow forecasts to historical results
and economic and industry forecasts

• Assessed the reasonableness of the discount rate used in the

model by comparing the cost of capital for the Group to market
data and industry research.

Impairment of assets

A) Goodwill impairment assessment
(Refer to note E2)

The Group’s goodwill is allocated to two Cash Generating Units
(CGUs): ‘exchange-traded’ ($2,242.2m) and ‘non-exchange traded’
($75.4m).

We considered this a key audit matter due to the financial signif-
icance of the goodwill balance ($2.3bn as at 30 June 2020) and
the inherent judgement and estimation uncertainty in the Group’s
assessment of the value in use of each CGU. This includes the
impact of COVID-19 on the Group’s judgements over future cash
flows in light of economic and financial market uncertainty, and the
terminal growth and discount rates applied to cash flow forecasts.

The Group performed an annual impairment assessment over the
goodwill balance, as required by Australian Accounting Standards, by:

1. Calculating the value in use for each CGU using a discounted
cash flow model. The key assumptions in this model include
cash flows (revenues, expenses and capital expenditure) for
each CGU for five years and a growth rate to extrapolate
cash flow projections beyond 5 years (terminal growth rate).
The cash flows were discounted to net present value using a
discount rate determined to be appropriate by the Group

2. Comparing the value in use of each CGU to their respective

carrying values.

The Group also performed a sensitivity analysis over the value in
use calculations, by varying the assumptions used (terminal growth
rate and discount rate) to assess the impact on the impairment
assessment.

106 ASX Annual Report 2020 Independent auditor’s report to the members of ASX Limited continued

Independent auditor’s report to the members of ASX Limited continued

Key audit matter

How our audit addressed the key audit matter

Impairment of assets – continued

B) Yieldbroker impairment assessment
(Refer to note D2)

At 30 June 2020, the Group’s investment in Yieldbroker is carried
at $31.0m (2019 $46.5m), reflecting the impact of an impairment
charge of $15.2m (2019 $nil).

Where there is an indication that an asset may be impaired, the
Group is required under Australian Accounting Standards to esti-
mate the recoverable amount of the asset and where this is less
than its carrying amount, recognise any impairment loss imme-
diately in profit or loss. The Group determined that indicators of
impairment existed as at 30 June 2020 year end and, following an
estimation of the recoverable amount of Yieldbroker, recorded an
impairment loss in relation to the investment. This was determined
by the Group as follows:

1. Calculating the recoverable amount of Yieldbroker, being the
value in use, using a discounted cash flow model. The key
assumptions in this model include projected future cash flows
for five years, a terminal growth rate and a discount rate

2. Comparing the recoverable amount to Yieldbroker’s carrying

value at 30 June 2020, which identified an impairment
charge of $15.2m.

We considered this a key audit matter due to the inherent judge-
ment required by the Group in determining the recoverable amount
of Yieldbroker. This includes the impact of COVID-19 on the Group’s
judgements over future cash flows in light of economic and finan-
cial market uncertainty, and the terminal growth and discount
rates applied to cash flow forecasts.

We performed testing over the Group’s impairment assessment of
Yieldbroker, which included the following procedures, amongst others:

• Evaluating the Group’s assessment of indicators of impairment
in the asset by considering whether any impairment indicators
were present in line with Australian Accounting Standards

• Evaluating the Group's cash flow forecasts for Yieldbroker and
the process by which they were developed, including consider-
ing the mathematical accuracy of the underlying calculations
in the discounted cash flow model and assessing the Group’s
forecasting ability by having regard to historical forecasts
relative to actual results and reasonable expectations of future
performance

• Assessing the sensitivity of the recoverable amount by varying
the key assumptions, including cash flow growth rates, the
discount rate and terminal growth rate.

Together with PwC valuation experts, we also:

• Assessed the methodology used by the Group to calculate

the recoverable amount of the investment against Australian
Accounting Standards

• Compared the Group’s assumptions for forecast cash flows and
growth rates used in the cash flow forecasts to historical results
and economic and industry forecasts

• Assessed the reasonableness of the discount and growth rates
by comparing them to market data, comparable companies and
industry research.

Key audit matter

How our audit addressed the key audit matter

Valuation and existence of financial instruments

A) Valuation and existence of other financial assets at
amortised cost
(Refer to note C3)

At 30 June 2020, other financial assets at amortised cost were
$12.5bn and comprised of reverse repurchase agreements, nego-
tiable certificates of deposit and promissory notes.

We considered this a key audit matter due to the financial signif-
icance of the balance.

We performed testing over the valuation of other financial assets at
amortised cost, which included the following procedures, amongst
others:

• Assessing the accuracy of the Group’s valuation calculations by
agreeing a sample of key inputs from the calculations to source
documentation

• Assessing the mathematical accuracy of the Group’s valuation

calculations through reperformance.

We confirmed the existence of other financial assets at amortised
cost with counterparties as at 30 June 2020.

ASX Annual Report 2020 Independent auditor’s report to the members of ASX Limited continued

107

Independent auditor’s report to the members of ASX Limited continued

Key audit matter

How our audit addressed the key audit matter

Valuation and existence of financial instruments –
continued

B) Valuation and existence of financial assets at fair value
(Refer to note C3)

We performed testing over the valuation of both ‘level 1’ and ‘level
2’ financial assets at fair value, which included developing our own
expectation of the valuation, together with PwC valuation experts,
for financial assets at FVTPL held by the Group at 30 June 2020, by
reference to quoted prices in active markets.

We confirmed the existence of both ‘level 1’ and ‘level 2’ financial
assets at fair value with counterparties as at 30 June 2020.

We assessed the appropriateness of fair value disclosures in the
financial statements, including the classification of the financial assets
as ‘level 1’ and as ‘level 2’ in light of the requirements of Australian
Accounting Standards.

In addition to the above procedures, for ‘level 2’ financial assets at
fair value, we considered the design of key controls over valuation
and existence and tested the operating effectiveness of a sample of
these controls.

At 30 June 2020, financial assets at fair value through profit and
loss (FVTPL) were $487.5m and comprised non-cash collateral.

$305.5m of the financial assets are classified as ‘level 1’ in accord-
ance with the categorisation criteria under Australian Accounting
Standards, where quoted prices in active markets are available
for identical assets.

The remaining $182.0m is classified as ‘level 2’, where values are
derived from observable prices (or inputs to valuation models)
other than quoted prices included within ‘level 1’. The valuation of
‘level 2’ securities therefore requires a higher degree of judgement
by the Group.

We considered this a key audit matter due to the financial signif-
icance of the balance, as well as the inherent judgement involved
in valuing 'level 2' financial instruments at fair value. This includes
the heightened judgement required by the Group to identify
appropriate observable inputs in light of economic and financial
market uncertainty as a result of COVID-19.

Key audit matter

How our audit addressed the key audit matter

Accuracy of revenue recognition

(Refer to note B2)

At 30 June 2020, revenue recognised under AASB 15 Revenue
from contracts in the consolidated statement of comprehensive
income totalled $949m.

Listings and Issuer Services ($239.7m) comprises: initial and subse-
quent listing fees, which are deferred and recognised evenly over
the period the listing services are expected to be provided, which
is five years for initial listings and three years for subsequent
listings; and annual listing fees, which are recognised evenly over
the financial year as the service is provided.

All other revenue streams ($709.3m) (Derivatives and OTC Markets;
Trading Services; and Equity Post-Trade Services) are recognised
at the point in time the service is provided.

We considered this a key audit matter due to the financial signif-
icance of total revenue and the inherent judgement required by
the Group in determining the period that it expects to satisfy its
performance obligations in relation to listing services, within the
Listings and Issuer Services revenue stream.

We performed the following procedures, amongst others:

• Assessing the accuracy of inputs to revenue calculations by

agreeing a sample of inputs to source documentation

• Assessing the mathematical accuracy of a sample of revenue

calculations through reperformance

• Considering whether revenue recognised during the current year
was recognised in the appropriate accounting period and did not
relate to an earlier or later period

• Evaluating the appropriateness of the Group’s methodology and
key assumptions used to determine the deferral periods applied
to initial and subsequent listings revenue in light of the require-
ments of Australian Accounting Standards

• Assessing the mathematical accuracy of the Group’s calculations
of the deferral periods by recalculating revenue recognised and
revenue received in advance for a sample of initial and subse-
quent listing fees, using the Group’s methodology.

108 ASX Annual Report 2020 Independent auditor’s report to the members of ASX Limited continued

Independent auditor’s report to the members of ASX Limited continued

Other information

Report on the Remuneration Report

The directors are responsible for the other information. The other
information comprises the information included in the annual report
for the year ended 30 June 2020 but does not include the financial
report and our auditor’s report thereon.

Our opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 46 to
62 of the directors’ report for the year ended 30 June 2020.

In our opinion, the Remuneration Report of ASX Limited for the year
ended 30 June 2020 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.

PricewaterhouseCoopers

Voula Papageorgiou
Partner

Sydney, 20 August 2020

Our opinion on the financial report does not cover the other infor-
mation and accordingly we do not express any form of assurance
conclusion thereon.

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 on the other information
that we obtained prior to the date of this auditor’s report, 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 ability of the Group to continue as a going concern,
disclosing, as applicable, matters related 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 assur-
ance, 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 deci-
sions of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of
the financial report is located at the Auditing and Assurance
Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our auditor's report.

ASX Annual Report 2020 Independent auditor’s report to the members of ASX Limited continued

109

Key financial ratios

Year ended 30 June
Basic earnings per share (EPS)

Diluted EPS

Underlying EPS

Dividend per share – interim

Dividend per share – final

Dividend per share – special

Statutory return on equity

Underlying return on equity

EBITDA/operating revenue

EBIT/operating revenue

Total expenses (including depreciation and amortisation)/
operating revenue

Capital expenditure ($m)

Net tangible asset backing per share

Net asset backing per share

Shareholders’ equity as a % of total assets (excluding
participants’ balances)

Shareholders’ equity as a % of total assets (including
participants’ balances)

Share price at end of period

Ordinary shares on issue at end of period

Weighted average number of ordinary shares
(excluding treasury shares)

Market value of ordinary shares on issue at end of period ($m)

Market to book ratio at end of period

Full-time equivalent permanent staff
Number at period end

Average during the period

Notes
1

5,6

FY16
220.4c

220.4c

99.1c

99.0c

11.4%

77.1%

71.4%

28.6%

$50.2

$7.25

$19.75

87.6%

36.6%

$45.76

FY17
224.5c

224.5c

102.0c

99.8c

11.4%

76.3%

70.3%

29.7%

$50.3

$7.59

$20.19

76.2%

29.6%

$53.61

FY18
230.0c

230.0c

240.4c

107.2c

109.1c

11.5%

12.0%

76.2%

70.5%

29.5%

$54.1

$7.79

$20.38

89.1%

30.5%

$64.39

FY19
254.1c

254.1c

114.4c

114.3c

129.1c

12.8%

75.1%

69.6%

30.4%

$75.1

$7.53

$20.23

86.5%

25.5%

$82.37

FY20
257.6c

257.6c

265.4c

116.4c

122.5c

13.6%

14.0%

74.9%

69.5%

30.5%

$80.4

$6.32

$19.22

78.5%

21.4%

$85.38

193,595,162

193,413,893

193,415,430

193,507,104

193,576,187

193,587,739

$8,859

2.32

$10,379

2.66

$12,466

3.16

$15,946

4.07

$16,529

4.44

546

534

554

556

587

560

689

650

726

709

1. Based on statutory net profit after tax (NPAT) including significant items and weighted average number of shares.
2. Based on underlying NPAT excluding significant items and weighted average number of shares.
3. Based on statutory NPAT including significant items.
4. Based on underlying NPAT excluding significant items.
5. Operating revenue excludes interest and dividend revenue (underlying).
6. EBITDA – earnings before interest, tax, depreciation and amortisation; EBIT – earnings before interest and tax.

These metrics along with total expenses exclude significant items.
7. Weighted average number of ordinary shares used to calculate EPS.

110 ASX Annual Report 2020 Key financial ratios

Transaction levels and statistics

Year ended 30 June

Listings and Issuer Services

Total domestic market capitalisation ($bn) – period end

Total number of listed entities (includes stapled entities) – period end

Number of new listings

Average annual listing fee

Initial capital raised ($m)

Secondary capital raised ($m)

Other secondary capital raised including scrip-for-scrip ($m)

Total capital raised ($m)

Number of new warrant series quoted

Total warrant series quoted

Cash market

Trading days

Total cash market trades (‘000)

Average daily cash market trades

Continuous trading ($bn)

Auctions ($bn)

Centre Point ($bn)

Trade reporting ($bn)

Total cash market value ($bn)
Average daily on-market value ($bn)

Average daily value (including trade reporting) ($bn)

Average trade size

Average trading fee per dollar of value (bps)

Velocity (total value/average market capitalisation)1
Number of dominant settlement messages (m)
1 Total value transacted on all venues.

FY16

FY17

FY18

FY19

FY20

$1,620

2,204

124

$34,101

$23,587

$45,299

$9,704

$78,590

2,959

2,886

$1,777

2,239

152

$35,419

$14,652

$37,160

$4,156

$55,968

1,828

2,827

$1,957

2,285

137

$37,569

$25,693

$43,022

$12,998

$81,713

1,967

2,976

$2,069

2,269

111

$41,356

$37,402

$38,830

$9,783

$86,015

1,849

2,789

$1,918

2,188

$42,214

$26,964

$65,033

$5,193

$97,190

2,060

2,516

254

253

252

255

235,923

928,829

$770.805

$209.412

$78.941

$144.991

266,433

1,053,096

$735.447

$236.983

$107.043

$167.377

292,528

1,160,826

$677.893

$262.126

$106.481

$185.316

359,985

1,428,512

$722.111

$333.979

$113.030

$211.568

$1,204.149
$4.170

$1,246.850
$4.267

$1,231.816
$4.153

$1,380.688
$4.639

$4.741

$5,104

0.33

92%

17.1

$4.928

$4,680

0.37

88%

17.8

$4.888

$4,211

0.37

83%

17.9

$5.479

$3,835

0.37

87%

19.6

460,789

1,807,015

$995.319

$409.876

$120.436

$266.053

$1,791.684
$5.983

$7.026

$3,888

0.36

107%

22.5

ASX Annual Report 2020 Transaction levels and statistics

111

Transaction levels and statistics continued
Transaction levels and statistics continued

Year ended 30 June

Equity options (excluding ASX SPI 200)
Trading days (exchange-traded options)

Total contracts traded – equity options (‘000)
Single stock options

Index options and futures

Average daily single stock options contracts

Average daily index options contracts

Average fee per derivatives contract

Futures
Trading days (futures and options)

Total contracts traded – futures (‘000)
ASX SPI 200

90 day bank bills

3 year bonds

10 year bonds

20 year bonds

30 day interbank cash rate

Agricultural

Electricity
Other1
NZ$ 90 day bank bills

Total futures

Total contracts traded – options on futures (‘000)
ASX SPI 200

3 year bonds

Overnight 3 year bonds

Intraday 3 year bonds
10 year bonds2
Electricity
Other3

Total options on futures

Total futures and options on futures contract volume (‘000)

Daily average contracts – futures and options

Average fee per contract – futures and options

OTC markets
Total notional cleared value ($bn)4

Open notional cleared value ($bn) – period end
1 Other includes VIX and sector futures.
2 10 year bonds includes overnight and intraday 10 year bonds.
3 Other includes agricultural and 90 day bank bills.
4 Cleared notional value is double sided.

FY16

254

88,701

12,768

349,218

50,269

$0.23

FY17

253

93,295

10,388

368,755

41,060

$0.21

FY18

252

80,091

12,461

317,822

49,449

$0.24

FY19

252

73,825

11,282

292,957

44,770

$0.23

FY20

255

65,894

9,842

258,406

38,596

$0.24

257

256

255

257

12,105

29,567

50,105

36,079

423

4,112

132

257

137

1,915

134,832

363

356

579

660

1,991

136,823

532,386

$1.42

12,255

28,931

53,233

41,697

545

2,455

344

102

1,422

141,075

202

152

478

460

1,343

142,418

556,321

$1.39

13,782

33,226

56,041

47,729

383

1,952

371

149

1,697

155,414

140

314

344

955

156,369

613,211

$1.36

15,994

34,698

60,488

51,883

256

4,268

413

112

2,329

170,534

227

279

610

1,274

171,808

673,757

$1.36

19,246

24,967

58,091

56,772

190

5,743

539

118

2,354

168,115

177

269

508

1,125

169,240

658,522

$1.44

$2,742.002

$5,165.949

$1,600.194

$2,924.287

$6,314.322

$3,773.703

$9,710.616

$12,454.307

$7,207.582

$5,098.019

112 ASX Annual Report 2020 Transaction levels and statistics continued

Transaction levels and statistics continued
Transaction levels and statistics continued

Year ended 30 June

Austraclear
Settlement days

Transactions (‘000)
Cash transfers

Fixed interest securities

Discount securities

Foreign exchange

Other

Total transactions (‘000)

Average daily settlement volume

Securities holdings ($bn) – monthly average

Securities holdings ($bn) – period end

FY16

FY17

FY18

FY19

FY20

254

590

717

150

253

582

741

146

252

605

770

146

253

610

812

147

255

645

975

131

1,470

5,786

$1,857.6

$1,895.6

1,479

5,844

$1,915.4

$1,860.3

1,531

6,076

$1,908.5

$1,948.8

1,578

6,239

$2,003.7

$2,054.5

1,757

6,889

$2,142.0

$2,358.2

Average settlement and depository fee (including portfolio holdings)
per transaction (excludes registry services revenue)

$15.60

$16.34

$16.63

$16.88

$16.55

ASX Collateral ($bn) – average

ASX Collateral ($bn) – period end

System uptime (period average)
ASX Trade

CHESS

Futures trading

Futures clearing

Austraclear

Technical services (number at period end)

ASX distribution platform
Australian Liquidity Centre cabinets

Connection services
ASX Net connections

ASX Net service feeds

Australian Liquidity Centre service connections

ASX service access
ASX ITCH access

Futures ITCH access

ASX market access
ASX sessions

ASX gateways

ASX liquidity cross-connections

ASX OUCH access

Futures gateways

Futures liquidity cross-connections

$4.9

$10.3

$16.2

$19.9

$23.5

$21.9

$22.4

$26.9

$43.4

100.00%

99.98%

99.96%

100.00%

99.93%

99.79%

100.00%

99.98%

100.00%

99.99%

100.00%

99.98%

100.00%

231

116

382

819

1,113

192

208

306

285

123

437

871

1,033

179

199

334

301

112

444

984

922

160

251

381

324

104

447

1,068

886

155

329

482

326

103

455

1,078

882

160

245

378

ASX Annual Report 2020 Transaction levels and statistics continued

113

Shareholder information

ASX Limited – ordinary shares

Largest 20 shareholders at 30 July 2020

ASX has ordinary shares on issue. These are listed on the Australian
Securities Exchange under code: ASX. Details on trading activity are
published daily in most major Australian newspapers (print, online
and mobile) and by electronic information vendors.

At a general meeting, every shareholder present in person or by
direct vote, proxy, attorney or representative has one vote on a
show of hands and, on a poll, one vote for each fully paid share
held unless that share is a default share.

The ASX constitution classifies default shares as any share held
above the 15% voting power limit by one party and its associates.

Distribution of shareholdings at 30 July 2020

Number of shares
held
1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and over

Total

Number of
holders
37,223

8,663

712

605

Number of
shares
12,421,888

17,167,423

4,959,054

18,790,601

140,256,196

47,287

193,595,162

% of issued
capital
6.42

8.87

2.56

9.70

72.45

100.00

Marketable parcel

As at 30 July 2020, there were 266 holders holding less than a
marketable parcel of ASX shares.

A marketable parcel of ASX shares was five shares, based on a
closing price of $84.51 on 30 July 2020.

On-market buy-back

Name
1. HSBC Custody Nominees (Australia) Limited

Number
of shares
45,891,468

2. J P Morgan Nominees Australia Pty Limited

35,478,907

3. BNP Paribas Nominees Pty Ltd

4. Citicorp Nominees Pty Limited

5. National Nominees Limited

6. Australian Foundation Investment

Company Limited

7. Milton Corporation Limited

8. BKI Investment Company Limited

9. Pacific Custodians Pty Limited

10. The Senior Master of the Supreme Court

11. Mutual Trust Pty Ltd

12. Law Venture Pty Limited

13. AMP Life Limited

14. Netwealth Investments Limited

15. Navigator Australia Ltd

16. Gwynvill Trading Pty Limited

17. Mr Michael Denis Briody

17. Mr Gillies Thomas Kryger

17. Mr Leslie Guy Julian Paynter

17. Raffael Pty Ltd

17. Trevorann Investment Pty Ltd

17. Mr Kevin Joseph Troy

17. Vaucluse Skyline Pty Limited

29,893,704

11,018,606

4,827,386

1,054,029

548,965

397,750

348,054

337,032

311,915

308,999

277,553

264,466

245, 058

241,559

183,474

% of
issued
capital
23.71

18.33

15.44

5.70

2.50

0.54

0.28

0.21

0.18

0.17

0.16

0.14

0.13

0.12

0.09

Total

132,729,769

68.54

Shareholders’ calendar

FY20

There is no current on-market buy-back.

Full-year financial results announcement

20 August 2020

Substantial shareholders at 30 July 2020

Full-year dividend
Ex-dividend date

Record date for dividend entitlements

As at 30 July 2020, the following organisations have disclosed a
substantial shareholder notice to ASX.

Payment date
Annual General Meeting

7 September 2020

8 September 2020

30 September 2020
30 September 2020

Name

UniSuper Limited

BlackRock Group

Vanguard Group Inc

Number
of shares

% of voting
power

FY211

25,491,073

11,712,985

9,684,443

13.17

6.05

5.00

Half-year financial results announcement

11 February 2021

Half-year dividend
Ex-dividend date

Record date for dividend entitlements

Payment date

4 March 2021

5 March 2021

24 March 2021

Full-year financial results announcement

19 August 2021

Full-year dividend
Ex-dividend date

Record date for dividend entitlements

Payment date
Annual General Meeting
1 Dates are subject to final ASX Board approval.

6 September 2021

7 September 2021

29 September 2021
29 September 2021

114 ASX Annual Report 2020 Shareholder information

Shareholder information continued

Annual General Meeting 2020

The ASX Annual General Meeting will be held at 10am (Sydney
time) on Wednesday 30 September 2020 and conducted virtually.
Information on how shareholders can view and participate in the
meeting can be found on ASX’s website and in the Notice of Meeting.

ASX’s Notice of Annual General Meeting has been released on the
Market Announcements Platform.

The proceedings will be archived on ASX's website for viewing
after the live event.

The external auditor will be present at the meeting to answer
questions relevant to the external audit.

Electronic communication

ASX encourages shareholders to receive information electronically.

Shareholders who currently receive information by post can log in
at www.linkmarketservices.com.au to provide their email address
and elect to receive electronic communications.

ASX emails shareholders when important information becomes
available such as financial results, dividend statements, notices of
meeting, voting forms and annual reports.

Electronic communication allows ASX to communicate with
shareholders quickly and reduces ASX’s paper usage.

For further information, please contact ASX’s share
registry, Link Market Services, on 1300 724 911 or at
asx@linkmarketservices.com.au

Important information about dividend
payments

Australian and New Zealand shareholders receive their dividend
payments by direct credit only. No cheque payments are made to
these shareholders.

If you have not already done so, please provide your direct credit
instructions by visiting www.linkmarketservices.com.au

ASX Annual Report 2020 Shareholder information continued

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