Appendix 4E Preliminary Final Report Year ended 30 September 2018

Appendix 4E Preliminary final report LIMITED ABN 24 004 145 868

1. Details of the reporting period and the previous corresponding period Reporting Period Year Ended 30 September 2018 Previous Corresponding Period Year Ended 30 September 2017 2. Results for announcement to the market

Change Consolidated: $m $m 2.1 Consolidated revenue from operations up 334.6 6.6% to 5,373.8 2.2 Profit/(loss) after tax attributable to shareholders down (434.3) N/A to (48.1) 2.3 Net profit for the period attributable to shareholders before individually significant items down (62.0) (16.1)% to 324.2

Franked amount Amount per per security at Dividends se curity 30% tax Current period 2.4 Final dividend - Ordinary Cents 31.5 0.0 2.4 Interim dividend - Ordinary Cents 20.0 0.0 Previous corresponding period 2.4 Final dividend - Ordinary Cents 28.0 0.0 2.4 Interim dividend - Ordinary Cents 23.5 3.0

2.5 Record date for determining entitlements to the dividend: Ordinary Shares 13-Nov-18

Payment date of dividend: Ordinary Shares 7-Dec-18

2.6 Brief explanation of figures 2.1 to 2.4: i) It is anticipated that dividends in the near future will be franked at a rate of no more than 20%. ii) Conduit foreign income (CFI) component: Current period Previous corresponding period Interim dividend: Interim dividend: Ordinary 20.0 cents Ordinary 20.5 cents Final dividend: Final dividend: Ordinary 31.5 cents Ordinary 28.0 cents iii) For the profit commentary and any other significant information needed by an investor to make an informed assessment of Orica's results please refer to the accompanying Orica Limited Results for the Full Year Ended 30 September 2018.

Orica Limited 1

Appendix 4E Preliminary Final Report Year ended 30 September 2018

3. Income Statement - refer attached

4. Balance Sheet - refer attached

5. Statement of Cash Flows - refer attached

6. Reserves and retained earnings - refer attached, Statement of Changes in Equity

7. Details of individual dividends and payment dates - refer attached, Note 4 Contributed Equity and Reserves

8. Details of dividend reinvestment plan

The Company's Dividend Reinvestment Plan (DRP) continues to be available to eligible shareholders. For the final dividend, shares will be allocated based on the arithmetic average of the daily volume weighted average market price of all shares sold through a normal trade on the ASX for a period of 7 trading days from 16 November to 26 November inclusive. The last date for receipt of election notices for participation in the final dividend under the DRP is Wednesday 14 November 2018. Shares issued and/or purchased on market pursuant to the DRP will rank equal to all other ordinary shares. No discount applies to the DRP.

9. Net tangible assets Previous Current period corresponding period Cents Cents Net tangible asset backing per ordinary security 317.8 367.4

10. Control lost over entities - refer attached, Note 16 Businesse s dispose d

11. Details of associates and joint venture entities - refer attached, Note 14 Investments accounted for using the equity method and joint operations

12. Significant information - refer press release attached

13. For foreign entities, which set of accounting standards is used in compiling the report - not applicable

14. Commentary on results for the period - refer press release attached 15. This report is based on a financial report which has been audited

2 Orica Limited

Review of Operations

Earnings down 3% with strong second half mitigating first half weakness

Statutory net profit after tax (NPAT) attributable to the shareholders of Orica was a loss of $48 million; NPAT before individually significant items(1) was $324 million, down 16% on the prior corresponding period (pcp)

EBIT before individually significant items(2) was $618 million, down 3% on the pcp

EBIT(2) in the second half was up 46% on the first half, and up 14% on the second half of the 2017 financial year

Summary  Ammonium nitrate (AN) volumes up 5% on the pcp at 3.82 million tonnes  Sales revenue increased by 7% from higher volumes and favourable mix  Individually significant items of $372 million include non-cash items of $353 million from the first half  Net operating and investing cash outflows(3) of $63 million include the acquisition of GroundProbe(4)  Capital expenditure of $322 million(5), up 5% on the pcp  Net debt(6) of $1.6 billion and gearing(7) at 36%  Final dividend of 31.5 cents per share, bringing the full year dividend to 51.5 cents per share

Group Results

2018 2017 Change Year ended 30 September A$M A$M %

Sales revenue 5,373.8 5,039.2 7%

EBITDA(8) 885.0 896.3 (1%)

EBIT(2) 618.1 635.1 (3%)

Net interest expense (121.3) (71.7) (69%) Tax expense (158.0) (164.0) 4%

Non-controlling interests (14.6) (13.2) (11%)

NPAT before individually significant items(1) 324.2 386.2 (16%)

Individually significant items after tax (372.3) - (100%) NPAT after individually significant items (statutory) (48.1) 386.2 (112%)

Note: numbers in this report are subject to rounding and stated in Australian dollars unless otherwise noted

Review of Operations

Business Summary

A summary of the performance of the segments for the 2018 and 2017 financial years is presented below:

Year ended AN Sales Capital 30 September 2018 Tonnes (i) Revenue EBITDA EBIT Expenditure A$M (‘000) (ii)

Australia Pacific & (APA) 1,626 1,944.2 505.5 381.9 109.7 1,112 1,430.3 226.8 185.6 38.6 , Middle East & Africa (EMEA) 462 807.2 78.8 54.8 35.5 618 899.8 67.1 43.2 21.7 Minova - 519.0 6.2 (2.3) 8.5 Auxiliaries - 66.7 10.5 4.8 5.7 Global Support - 1,041.6 (9.9) (49.9) 102.4 Eliminations - (1,335.0) - - -

Orica Group 3,818 5,373.8 885.0 618.1 322.1

Year ended AN Sales Capital 30 September 2017 Tonnes (i) Revenue EBITDA EBIT Expenditure A$M (‘000) (ii) Pacific & Asia 1,424 1,725.9 492.2 367.6 147.7 North America 1,121 1,362.8 223.8 187.5 48.0

Europe, Middle East & Africa 468 812.2 98.2 74.5 23.6 Latin America 637 915.9 86.7 61.3 20.7 Minova - 455.6 22.2 13.1 9.0

Auxiliaries - 20.3 3.6 3.1 2.4 Global Support - 990.6 (30.4) (72.0) 54.6 Eliminations - (1,244.1) - - -

Orica Group 3,650 5,039.2 896.3 635.1 306.0

(i) Includes ammonium nitrate prill and solution as well as bulk and packaged emulsion (ii) Includes external and inter-segment sales

Auxiliaries 1%

Latin America Thermal Europe, 6% Middle East Other coal & Africa 24% 18% 8%

Revenue by EBIT by commodity region (iv) Australia Iron ore North Pacific & 2018 7% America 2018 Asia 28% 57% Gold 19% Q&C 12%(iii) Copper 15%

Note: The above charts exclude Global Support and Eliminations (iii) Quarry and Construction (iv) Minova is excluded due to negative EBIT result

Review of Operations

Safety is our priority and we achieved our most important target of no fatalities in 2018. The work we have done to prioritise major hazard identification and verification aims to eliminate fatalities, serious injury and illness. While our Total Recordable Injury Frequency Rate increased from 2.0 cases per million hours worked to 2.4 cases per million hours worked, the severity of injuries has reduced. More work and continued vigilance is needed but we are confident every part of the organisation maintains this as a high priority and we are on the right path to making Orica a safer place to work.

AN volumes were up 5% on the pcp, reflecting strong demand from both new and existing customers, particularly in Indonesia and Australia. Sales revenue increased by 7% on the pcp to $5.4 billion from higher volumes and favourable mix.

EBIT of $618 million was down 3% on the pcp. The benefit of volume growth was offset by known headwinds and contract pricing. EBIT was further impacted by unplanned maintenance shutdowns at Yarwun and Island as well as operational issues at the Burrup plant, resulting in increased sourcing and plant administration costs. This was compounded by a partial loss of a customer contract in Latin America.

A$M

635 70

(12) 32 618

(25)

(26) (16) 2

(15)

(27)

EBIT FX & Headw inds Contract Volume Global Burrup Minova Auxiliaries Reduced (i) EBIT 2017 Inflation on - Material Pricing Mix Manufacturing Plant Overheads 2018 Overheads Input Mar gin Impac ts & Other Costs

(i) Includes savings on business improvement implementation costs

Key items in the above chart:

FX & Inflation on Overheads Inflation on fixed cost overheads had an adverse effect of $26 million. The impact from foreign exchange was marginal at $1 million.

Headwinds - Material Input Costs Contracted increases in gas and third party AN prices, effective from the second quarter of the pcp, reduced margins by $16 million.

Contract Pricing Contract renewals have continued to align pricing with prevailing market prices. The impact of contract pricing for the year was lower than previously expected due to the deferral of some contract renegotiations to the 2019 financial year. We remain focused on maintaining a balanced outlook between retaining profitable market share and securing plant loading.

Review of Operations

Volume, Mix & Margin New business and improved demand from existing customers, particularly in Indonesia and Australia, drove an increase in AN volumes of 5%. A higher proportion of emulsion product sales also contributed positively to EBIT.

Sales of Electronic Blasting Systems (EBS) grew across most regions, with a combined increase of 12% in EBS volumes compared to the pcp. Total initiating system sales volumes were flat on the pcp.

Global Manufacturing Impacts The Global Manufacturing result in APA was reduced by unplanned maintenance shutdowns at Yarwun and Kooragang Island manufacturing plants in the first half, which led to unrecovered labour and operational costs as well as higher short term third party product purchases. Operations at Gyttorp were also reduced as the site recovers from the explosion in May 2017.

Burrup Plant Our joint venture operating partner, Yara, has been addressing technical issues over the past 12 months. Orica’s engineers are working onsite, together with Yara to resolve these issues. While it was previously anticipated that the plant would be operational by the end of the 2018 financial year, the replacement of some key components is expected to delay production until the first half of the 2020 financial year. All nine new replacement heat exchangers and the absorption tower are currently expected to be installed in the second half of 2019 calendar year. It is anticipated that this installation will take around two months.

Depreciation and amortisation will commence when the plant is available for use, expected to be in the first half of the 2020 financial year. The plant is expected to be essentially loaded from the 2020 financial year.

The negative EBIT impact in 2018 from the Burrup plant represents both the continued increased sourcing costs as well as the commencement of administration overhead costs in anticipation of the plant operating.

Minova Adjusting for the profit from the divestment of a business in the pcp of $8 million, EBIT declined $7 million despite increases in volume and revenue, due to unfavourable mix and cost pressures.

Reduced Overheads & Other This comprises lower implementation costs and fees on business improvement activities and the early benefit from reduced people costs following the restructuring activity that took place during the year. Following the increased provision on the Botany groundwater treatment plant taken in the first half, all related costs are now offset against the provision.

Review of Operations

Australia Pacific & Asia

Year ended 30 September 2018 2017 Change Other 8% Total AN & emulsion volumes ('000 tonnes) 1,626 1,424 14% Gold Emulsion as a % of total volumes 62% 61% 1pt 16% Thermal Revenue by coal 40% commodity

Copper Total sales revenue (A$M) 1,944.2 1,725.9 13% 8% 2018 EBITDA (A$M) 505.5 492.2 3% Q&C EBIT (A$M) 381.9 367.6 4% 6% Iron ore Coking coal 11% 11%

Commodity exposure Thermal coal represents the largest commodity exposure in the APA region. More stringent emissions reduction requirements in North Asia have resulted in an increased demand for higher grade thermal and coking coal exported from Australia. Gold and iron ore conditions remained stable.

EBIT performance drivers

Volumes and mix Explosives volumes were 14% higher than the pcp, underpinned by stronger demand in Indonesia and Australia, from both new contracts and organic growth from existing customers. The already strong growth in the first half improved further in the second half, led by strengthening in the Pilbara and from mine ramp ups and recent contract wins. Indonesia benefited from higher volumes from new contracts, improved demand from existing customers, and sales to competitors.

Sales of EBS were up 30% on the pcp from increased demand and customer conversion. Cyanide volumes were relatively flat on the pcp, impacted by the maintenance shutdown at the Yarwun cyanide plant in the first half.

Margin and price The ongoing challenges at the Burrup plant resulted in incremental costs of $26 million, including additional sourcing costs as alternate AN products were sourced from various locations across the region to meet supply commitments, as well as the commencement of administration costs in anticipation of the plant operating.

The negative impact of contract pricing was lower than expected for the year, due to some contract negotiations being deferred to the 2019 financial year.

Unplanned maintenance shutdowns at the Yarwun and Kooragang Island manufacturing plants in the first half resulted in unrecovered labour and operational costs as well as higher short term third party sourcing to cover lost production. This adversely impacted business, offsetting much of the benefit from increased volume and improved mix. In line with expectations, Kooragang Island’s gas costs were up $8 million in the first half due to the roll through of a contracted price increase which came into effect in January 2017.

Outlook EBIT in APA is expected to grow, despite the delayed commencement of the Burrup plant, with market share increasing from recent profitable contract wins. Continued growth in EBS products and a focus on new technology offerings, enabling productivity improvements, will further support growth in the region. Deferred contract renegotiations will take effect in the 2019 financial year.

Review of Operations

North America

Year ended 30 September 2018 2017 Change Thermal Other coal 19% 9% Total AN & emulsion volumes ('000 tonnes) 1,112 1,121 (1%) Emulsion as a % of total volumes 48% 45% 3pts Iron ore 7% Revenue by commodity

Total sales revenue (A$M) 1,430.3 1,362.8 5% Q&C Gold 2018 20% EBITDA (A$M) 226.8 223.8 1% 27% EBIT (A$M) 185.6 187.5 (1%) Copper 13%

Commodity exposure The gold sector in North America, the most significant commodity exposure for the region, has remained steady, aided by firm prices and stable customer operations. Activity in the Q&C sector was down in the first half, impacted by extreme weather conditions and tightening in the skilled labour market, however experienced strong growth during the summer period in the second half of the year. Copper remained strong, despite prices softening from recent highs, with longer term demand expected to outweigh supply.

EBIT performance drivers

Volume and mix Overall explosives volumes were slightly down on the pcp, driven by a decline in the USA where a joint venture partner sourced bulk AN directly from the manufacturer from the second quarter of the pcp. Excluding the impact of joint venture partner sourcing, AN volumes were strong, increasing 5% on the pcp. Explosives volumes in saw positive volume growth, from indirect channels as well as from the re- start of several customers’ coal mines in Western Canada. Explosives volumes also increased in Mexico, buoyed by the full year benefit of contracts won in the second half of the pcp.

Higher customer uptake on advanced products led to improved product mix, however increased sales through indirect channels in Canada offset some of this impact.

Initiating system volumes, across both EBS and conventional initiating systems, increased on the back of new business and customer production increases in Canada and Mexico.

Margin and price Despite the oversupplied market, pricing headwinds were controlled and better than expectations. A known contractual increase in third party AN sourcing costs in the USA adversely impacted the first half cost base, relative to the pcp, by $8 million. This largely offset the net benefit from the non-repeat of alternate sourcing cost headwinds experienced primarily in the second half of the pcp, from the extended turnaround of the Carseland plant and a temporary supply shortage of non-electric detonators from lower component production in Latin America.

The completion of the Carseland plant turnaround in the pcp drove an increase in depreciation expense.

Income from associates declined on the pcp, largely driven by contract losses and unfavourable weather conditions in the USA in the first half which impacted our joint venture partners’ margin. Second half performance was stronger, aligned with improving market conditions.

Outlook Volume and EBIT growth are expected to be steady in the 2019 financial year, despite the oversupply of AN which is driving ongoing competitive pressure on pricing. Increased penetration of new technology offerings will help drive EBIT growth.

Review of Operations

Europe, Middle East & Africa

Thermal coal 4% Year ended 30 September 2018 2017 Change Iron ore 3%

Total AN & emulsion volumes ('000 tonnes) 462 468 (1%) Other 25% Emulsion as a % of total volumes 90% 89% 1pt Revenue by Q&C commodity 31% Total sales revenue (A$M) 807.2 812.2 (1%) EBITDA (A$M) 78.8 98.2 (20%) 2018 Gold EBIT (A$M) 54.8 74.5 (26%) 23% Copper 14%

Commodity exposure The region is well diversified across geographies, commodities and customers. Exposure to gold was impacted by a carry-over of oversupply and aggressive pricing of cyanide by Chinese and Korean suppliers in the pcp.

EBIT performance drivers

Volumes and mix Explosives volumes were 1% below the pcp, with varied growth across the region. Activity in the Commonwealth of Independent States (CIS) was up, underpinned by the ramp up of new contract wins in Russia and Kazakhstan, particularly in the second half. Sales in the Middle East were marginally up on the pcp and remain challenged by the impact of the embargo between the Arab States and Qatar. Sales volumes in Southern Africa were down through a combination of customer mine plan changes, mine closures and poor drill availability. Continued political and economic uncertainty in Turkey unfavourably impacted results with volumes down 15% on the pcp.

Increased market penetration of EBS was achieved in West Africa (gold miners) and the Nordics (Q&C). This was offset by lower sales of conventional initiating systems in Turkey and lower activity in East Africa. Overall initiating system volumes were lower but with improved product mix across the portfolio given greater sales of advanced products.

Cyanide volumes were significantly behind the pcp, resulting from a contract loss in the Democratic Republic of Congo and a customer mine closure in Egypt, both occurring in the second half of the pcp.

Margin and price EBIT was 26% lower than the pcp due to unfavourable results in the first half. Manufacturing performance was down on the pcp, particularly at Gyttorp as the site recovers from the explosion in May 2017, negatively affecting the first half results. One-off items in the first half included the relocation of the regional head office. In addition, the pcp included the benefit of profit on divestment of businesses.

Across the year, EBIT from services was down on the pcp, driven by mine plan changes and operational delays at customer sites in Africa.

Overall, prices held stable on the pcp, however the contribution from Turkey was impacted by significant deterioration in the Turkish lira.

EBIT in the second half strengthened significantly, largely from higher explosives volumes in the CIS and increased initiating system volumes across the region.

Outlook Momentum from the second half is expected to continue into the 2019 financial year with EBIT growth to be underpinned by volume growth.

Review of Operations

Latin America

Year ended 30 September 2018 2017 Change Other Thermal 6% coal 14% Total AN & emulsion volumes ('000 tonnes) 618 637 (3%) Iron ore Emulsion as a % of total volumes 69% 68% 1pt Gold 7% 26% Revenue by commodity Q&C 4%

Total sales revenue (A$M) 899.8 915.9 (2%) 2018 EBITDA (A$M) 67.1 86.7 (23%) EBIT (A$M) 43.2 61.3 (30%) Copper 43%

Commodity exposure Copper remained the most significant commodity for the region, maintaining a strong outlook given an anticipated global deficit. Gold continued to be strong, with new areas of exploration opening, and was the fastest growing commodity exposure for the Latin America region.

EBIT performance drivers

Volume and mix Explosives volumes were 3% lower than the pcp, predominantly due to lower sales in from reduced consumption following operational delays at a customer site. In favourable customer mine plan changes drove an increase in AN volumes. This was despite a partial contract loss in the second half which impacted AN and EBS sales, as well as services margin. Ongoing instability in Venezuela led to a complete halt in cash trading activity.

Despite the stability in gold activity and pricing, cyanide volumes decreased by 16% on the pcp, given mine plan changes, and the wind-down of a customer mine in as it moves towards closure in the next two to three years.

Margin and price The significant fall in EBIT was impacted by one-off costs associated with the partial contract loss in Chile, continued competitive pricing pressure, and the halt in trading activity in Venezuela. A shift in volumes towards lower margin customers also compounded the EBIT reduction.

Continued high inflation resulted in increased overhead costs across the region.

Other income in the pcp included a $3 million profit on sale of assets in Chile.

Outlook An operational review of the Latin America business is underway following the appointment of a new President with extensive global experience. The outlook for new business wins is positive, albeit in a highly competitive market. Competitor pricing pressure is expected to continue while the AN market remains oversupplied. Cost control and right-sizing the business will continue to be a core focus.

Review of Operations

Minova

Year ended 30 September 2018 2017 Change

Steel products ('000 tonnes) 142 129 10% Resins & powders ('000 tonnes) 109 127 (14%)

Total sales revenue (A$M) 519.0 455.6 14% EBITDA (A$M) 6.2 22.2 (72%) EBIT (A$M) (2.3) 13.1 (118%)

Revenue increased 14% compared to the pcp, aided by higher steel product sales.

The EBIT result in the pcp included the $8 million profit from the divestment of a business in China.

Margins have been impacted by a change in product mix from proportionately higher sales of steel products with coal customers in Australia Pacific and the Americas, raw material costs and lower demand for higher margin injection chemicals.

EBIT in the second half strengthened, largely driven by pricing initiatives which became fully effective in the half and overhead cost reductions.

An impairment charge of $204 million was recognised in the first half of the year.

Looking forward, Minova will continue to drive revenue growth from new sectors and across expanded products and services. The benefits of overhead cost reductions that commenced during the year will continue to materialise. Positive EBIT in the last quarter of the year is expected to carry into the 2019 financial year.

Auxiliaries

Year ended 30 September 2018 2017 Change

EBIT (A$M) 4.8 3.1 55%

Auxiliaries represent a newly created segment, comprising Nitro Consult AB (Nitro Consult) and the GroundProbe business which was acquired in January 2018. Nitro Consult and GroundProbe are highly complementary, driving a strong value proposition to customers. The full year Auxiliaries EBIT result includes acquisition costs of $6 million. Integration has been successfully completed, and the positive contribution is slightly ahead of expectations. Since its acquisition, GroundProbe has benefited from Orica’s global customer base, and going forward is expected to further leverage these customer relationships to drive growth in conjunction with an extended product offering.

Review of Operations

Global Support

Year ended 30 September 2018 2017 Change

EBIT (A$M) (49.9) (72.0) 31%

Global Support EBIT was 31% favourable to the pcp. Costs associated with the ongoing business improvement activities were lower than the pcp as the programme is in a mature state. Following the increased provision on the Botany groundwater treatment plant taken in the first half, all related costs are now offset against the provision.

Net interest expense Statutory net interest expense of $121 million was higher than the pcp due to $30 million of interest associated with the Burrup plant being capitalised in the pcp. After adjusting for capitalised interest and the unwind of the discount effect on provisions, net interest expense of $118 million increased from the pcp primarily as a result of higher net debt levels impacted by the acquisitions in the first half.

2018 2017 Year ended 30 September Change A$M A$M

Statutory net interest expense 121.3 71.7 69% Adjusted for: Capitalised interest 4.8 30.8 (84%) Unwinding of discount on provisions (7.9) (1.0) 690% Adjusted net interest expense 118.2 101.5 16%

Tax expense An effective rate of 31.8% (pcp 29.1%) was higher due to reduced profitability in jurisdictions where the tax rate is below 30% and reduced foreign deductions. This was partially offset by an increase in non-taxable gains on the disposal of assets compared to pcp.

Review of Operations

Group Cash Flow

2018 2017 Variance Year ended 30 September A$M A$M A$M

Net operating cash flows 614.7 466.4 148.3 Net investing cash flows (552.0) (254.8) (297.2) Net operating and investing cash flows(3) 62.7 211.6 (148.9)

Dividends – Orica Limited (143.2) (157.9) 14.7 Dividends – non-controlling interest shareholders (13.5) (7.1) (6.4) Adjusted net cash flows (94.0) 46.6 (140.6)

Movement in borrowings and other net financing cash flows(9) 75.9 162.7 (86.8) Net cash flows(10) (18.1) 209.3 (227.4)

Performance highlights The Group delivered net operating and investing cash outflows of $63 million. Group cash conversion(11) improved slightly from the pcp at 71%.

Net operating cash flows Net cash generated from operating activities was underpinned by earnings across the year and lower net income tax payments. Significant improvement was delivered in the second half of the year with performance finishing ahead of the pcp.

Net investing cash flows Net investing cash outflows comprised acquisitions and capital expenditure. Payments for the purchase of businesses/controlled entities and investments was $264 million, comprising predominantly $208 million for the acquisition of GroundProbe and $46 million for a 5% increase in our Burrup joint venture interest.

Capital expenditure of $322 million included spend on the new SAP system as the project rollout progresses, as well as ongoing investment in the global Mobile Manufacturing Unit (MMUTM) fleet. Other key capital expenditure includes maintenance shutdowns at the Kooragang Island and Yarwun plants in Australia.

Review of Operations

Debt Management and Liquidity

2018 2017 Variance

A$M A$M A$M Interest bearing liabilities 2,162.9 1,957.8 205.1 Less: cash and cash equivalents 514.6 516.9 (2.3) Net debt(6) 1,648.3 1,440.9 207.4

Gearing %(7) 35.7% 32.7% 3.0pts

Interest bearing liabilities of $2,163 million comprise $1,947 million of US Private Placement bonds and $216 million of committed and other bank facilities. The average duration of drawn debt is 5.0 years (2017: 6.1 years).

Undrawn committed bank facilities are $1,383 million, with total committed debt facilities of $3,545 million providing for a strong liquidity position.

Gearing is at 35.7% and since September 2017, has increased by 3.0 percentage points, largely due to acquisitions, the impairment of Minova and the increase in the environmental provision in the year.

The chart below illustrates the movement in net debt from September 2017.

Movement in net debt (A$M)

(61) Net debt 30 September 2017 1,441

EBITDA (885)

Trade & non-trade w orking capital 56

Net interest & income tax paid 184

Proceeds from sale of PP&E (36)

Non-cash items in EBITDA 27

Foreign exchange 3

Sub-total 790

Capital expenditure 322

Acquisitions 266

Dividends 156

Sub-total 1,534

Non-cash movement on net debt 114 (i)

Net debt 30 September 2018 1,648

(i) Non-cash movements on net debt comprise foreign exchange translation

Review of Operations

Group Balance Sheet

Movement in net assets (A$M)

Net assets 30 September 2017 2,964

Trade w orking capital 45

Non trade w orking capital (10)

Fixed & intangible assets 233

Other net assets 67

Net debt 42

Sub-total 3,341

Net assets acquired 249 Major

acquisitions Total consideration (249)

Individually significant items (373)

Net assets 30 September 2018 2,968

Performance highlights 109)

Trade working capital (12) overall increased by $45 million, excluding acquired assets, from the pcp. A reduction of $79 million has been achieved in the second half, through a focus on working capital management.

Fixed & intangible assets increased by $233 million on the pcp, excluding acquired assets and significant items, as net additions outweighed the depreciation and amortisation expense, together with foreign exchange translation impacts.

(215)

Review of Operations

Dividend

The Board has declared an unfranked final ordinary dividend of 31.5 cents per share. The dividend represents a payout ratio(13) of 60% and brings the full year payout ratio to 60%.

The dividend is payable to shareholders on 7 December 2018 and shareholders registered as at the close of business on 13 November 2018 will be eligible for the final dividend. It is anticipated that dividends in the near future will be franked at a rate of no more than 20%.

Individually significant items

Gross Tax Net

(A$M) (A$M) (A$M) Impairment of Minova business (204.2) 0.6 (203.6) Botany environmental provision expense (114.7) 34.4 (80.3) Write down of US deferred tax assets - (47.9) (47.9) Impairment of other assets (21.2) 6.4 (14.8) Restructuring (35.2) 8.5 (26.7) Individually significant items (375.3) 2.0 (373.3) Non-controlling interests in individually significant items 1.0 - 1.0 Individually significant items attributable to shareholders of Orica (374.3) 2.0 (372.3)

Impairment of Minova business Management’s assessment of the performance of Minova identified indicators of impairment and required an estimate of the recoverable value to be calculated. At the interim reporting period, operating results were lower than expected as compared to the short to medium term outlook. The assessment indicated that the carrying value of Minova exceeded its recoverable value by approximately $204 million. This shortfall resulted in the carrying value of the goodwill being unsupported and therefore impaired.

The impairment charge recognised during the year resulted in the write-down in the carrying value of Minova to $119 million at 30 September 2018.

Botany environmental provision expense The Botany environmental provision was increased by $115 million. This resulted from a detailed review of the costs and operational duration of the Groundwater Treatment Plant which is an intermediate containment measure for contamination at the Botany Industrial Park. The findings from the review indicated that the cessation of the containment measures is possible within an 18-year timeframe. As such, the provision has been increased to reflect the change in the current estimates.

Write down of US deferred tax assets The changes to the US tax legislation, which were signed into law in December 2017, reduced the federal corporate tax rate from 35% to 21%. This change resulted in the write down of the net deferred tax asset of $48 million (encompassing the deferred tax asset write down and the impact on the deferred tax liability).

Impairment of other assets The impairment review undertaken during the year, and the transition to a new SAP operating system, identified $21 million of IT and other assets which are no longer being utilised by the business and were impaired in the first half of the year.

Restructuring As part of a global restructuring programme redundancy costs were recognised across all segments except Auxiliaries. This programme was undertaken over the course of the year.

Further information on these items is included in note 1(d) within Appendix 4E – Preliminary Final Report.

Review of Operations

Outlook

Higher revenue and EBIT will be underpinned by increased demand and manufacturing improvements, with earnings skewed to the second half of the year.

Key assumptions for the 2019 financial year are:

Operations

• Global AN product volumes are expected to be ~3% higher than the 2018 financial year from North America, APA and EMEA • Continued firming of AN pricing across most regions • Contribution from new advanced products and services contracts in the second half • EBIT growth expected from all regions/businesses except Latin America

Manufacturing

• Improved average utilisation rates expected in operational manufacturing plants • ~20% utilisation rate expected at Burrup TAN plant as construction continues in order to get the plant available for use at its nameplate capacity; skewed towards second half. Marginal impact, relative to the 2018 financial year, expected in the 2019 financial year

Other

• ~$25 million negative impact from deferred contract renewals and price reset flow through (as previously disclosed); offset by business streamlining benefits • Interest expense to be similar to the 2018 financial year

Capital

• Capital expenditure in the 2019 financial year is expected to be ~$350 million due to higher sustenance spend on manufacturing plants, continuous investment in the MMU fleet and SAP implementation ramp up • Depreciation and amortisation expense to be ~10% higher than the 2018 financial year

Review of Operations

Footnotes

The following footnotes apply to this results announcement:

(1) Equivalent to profit after income tax expense before individually significant items attributable to shareholders of Orica Limited disclosed in Note 1(b) within Appendix 4E – Preliminary Final Report

(2) Equivalent to profit/(loss) before financing costs and income tax and individually significant items in Note 1(b) within Appendix 4E – Preliminary Final Report

(3) Equivalent to net cash flows from operating activities and net cash flows used in investing activities as disclosed in the Statement of Cash Flows within Appendix 4E – Preliminary Final Report

(4) GP Holdco Pty Ltd and its Companies

(5) Comprises total payments for property, plant and equipment and payments for intangibles as disclosed in the Statement of Cash Flows within Appendix 4E – Preliminary Final Report

(6) Total interest bearing liabilities less cash and cash equivalents as disclosed in note 3 within Appendix 4E – Preliminary Final Report

(7) Net debt / (net debt + total equity), as disclosed in note 3 within Appendix 4E – Preliminary Final Report

(8) EBIT before individually significant items plus depreciation and amortisation expense

(9) Equivalent to net cash used in financing activities (as disclosed in the Statement of Cash Flows within Appendix 4E – Preliminary Final Report) excluding dividends paid to Orica ordinary shareholders and non-controlling interests

(10) Equivalent to net (decrease) / increase in cash held disclosed in the Statement of Cash Flows within Appendix 4E – Preliminary Final Report

(11) (EBITDA add / less movement in trade working capital less sustaining capital expenditure excluding SAP project spend) / EBITDA

(12) Comprises inventories, trade receivables and trade payables disclosed in the Balance Sheet within Appendix 4E – Preliminary Final Report

(13) Dividend amount / NPAT before individually significant items

Forward-looking statements This announcement has been prepared by Orica Limited. The information contained is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. This announcement has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Orica Limited, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this announcement. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies.

Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances.

Past performance is no guarantee of future performance.

Non-International Financial Reporting Standards (Non-IFRS) information This report makes reference to certain non-IFRS financial information. This information is used by management to measure the operating performance of the business and has been presented as this may be useful for investors. This information has not been reviewed by the Group’s auditor. The 2018 Full Year Results presentation includes non-IFRS reconciliations. Forecast information has been estimated on the same measurement basis as actual results.

Review of Operations

Risk Management

Orica’s risk management framework is consistent with AS/NZS ISO31000:2009 Risk Management – Principles and Guidelines, and facilitates the ongoing assessment, monitoring and reporting of risks, which otherwise could impede progress in delivering our strategic priorities. Our risk management framework supports us in achieving risk management integrated into our operations and culture so that we continue on our path to sustainable change.

Understanding and managing our risks is everyone’s responsibility. Group Risk is responsible for designing the risk management framework, supporting its implementation in the business, and coordinating and aligning risk management activities across the Group. The effectiveness of Orica’s risk management framework is self-assessed and evaluated externally by independent parties and is overseen by the Board Audit and Risk Committee.

During 2018 we continued to review and improve the design and implementation of our risk management framework. The process was further embedded with a specific focus on manufacturing and supply chain, mergers and acquisitions, strategic growth projects and Group-wide transformational programs. Material strategic risks are reported to the Board and material operational risks are reported to the Board Audit and Risk Committee. These risks are monitored for changes in their exposure and are reported during the course of the year, along with their controls and plans to manage them. Periodic deep dives are undertaken throughout the year and presented to the respective committee. A summary of material risks that can adversely impact the achievement of Orica’s future business performance is provided in the following pages.

During 2018 an external review of our risk management framework was completed, and the results reported to the Board Audit & Risk Committee. The review took into account relevant findings from APRA’s CBA inquiry, and the results of the review have been utilised to inform our plans to further improve our framework. Priorities for 2019 include: increasing risk management capability in regions, central functions and in ‘front line’ business; improving coordination of governance and reporting across risk, audit, safety, health and environment and compliance; increasing the use of data to inform the status of operational risks; and increasing leaders’ visibility of control effectiveness and enhancements. The Board Audit & Risk Committee has conducted its annual review of our risk management framework and satisfied itself that it continues to be sound.

Review of Operations

Material Business risks that could adversely affect the achievement of future business performance Through our risk assessment process, we have identified the following material business risks that may affect the future financial performance of Orica. They are not listed in any order of significance.

i. Macro-economic

Global economic growth outlook is uncertain and may result in volatility in demand for commodities and subsequently sales. Our key inputs, particularly gas, are also linked to international traded commodities and are subject to the movements of the market that have the potential to increase our cost of production. Oversupply of ammonium nitrate through increased capacity may also create a supply/demand imbalance which will result in margin erosion, lost customers and downward price pressure. Adverse foreign exchange rates can impact the cost of inputs and products and impact sales denominated directly or indirectly in foreign currencies.

Orica operates in many countries, which provides diversified exposure across commodities and industries. The global nature of Orica’s operations also allows supply contracts to be coordinated and optimised. ii. Markets

A number of external factors may impact and change the markets in which we operate or in which we are seeking growth opportunities. Changing customer and competitive behaviours which can result in margin pressures, loss in customers and downward price pressures however may also result in demand for new products and applications. We are also exposed to changes in regulation and policy which can negatively impact our license to operate, impose additional regulatory requirements and cause significant business interruption e.g. increased trade protection measures. National and global efforts to transition towards a low carbon future may increase operational and compliance costs in the short term but result in a more fundamental change in the energy mix and drive innovation and technology adoption.

We monitor and analyse external factors including global growth and industrialisation, political changes and industry and technology trends to assist with the management of existing operations and pursuit of new opportunities. iii. Manufacturing and Supply

Having a supply chain which enables us to source and deliver quality products and services in a safe and timely manner is key to delivering on our customer promise. Material risks which are inherent in our supply chain include a supply chain interruption and the production of poor quality products.

An interruption to our supply chain may be driven by external events such as adverse weather conditions or natural disasters; if we are unavailable to supply for a sustained period (e.g. trade restrictions), or we experience a major disruption in a key manufacturing site (e.g. accident leading to immediate shutdown, industrial action). To manage this risk, we focus on our manufacturing reliability and the resilience within our network. Supply dependencies are considered in product design and customer demand, and a sourcing strategy supports reliable internal and external supply.

To manage the risk of poor product quality, we conduct trials and testing of new products, processes and suppliers, define contractual quality requirements, monitor ongoing performance of our suppliers, conduct quality assurance audits, and have quality control procedures in place for raw materials and finished goods. We continue to focus on our customer feedback mechanism as a way of measuring product quality; and are further developing and implementing key quality requirements and processes at our manufacturing sites to support continuous improvement.

Review of Operations iv. Workplace Safety

Orica operates within hazardous environments, particularly in the areas of manufacturing, storage and transportation of raw materials, products and wastes. Material safety, health, environment and security (‘SHES’) risks include: an explosion during the storage and transportation of explosives, a fire or explosion at a manufacturing site or storage location, loss of containment of toxic materials, and risk of raw materials or finished goods being used for illegal purposes. These risks can cause personal injury and/or loss of life, damage to property and contamination of the environment. They may also result in the suspension of operations and the imposition of civil or criminal penalties, including fines, expenses for remediation and claims brought by governmental entities or third parties.

Core to managing our material SHES risks is our SHES Management System which is underpinned by the Orica Charter and the SHES Policy. These are supported by the Group SHES Standards and Procedures which mandate the required controls, systems and processes that must be in place to prevent and mitigate these risks. These include plant and equipment design specifications, maintenance programs, operator procedures, requirements for the transportation and storage of explosives, physical controls to safeguard our sites, assets and infrastructure, and emergency response and crisis management plans.

We also manage these risks through our focus on safety culture which is based on visible and engaged senior leadership and encouraging employees and contractors to speak up when they see risks and hazards. Safety culture and behaviours are re-enforced through training our employees and third parties in the operation and safe-handling of inventory and materials, and on the importance of identifying and managing major hazards and key controls. In 2016 we launched the Major Hazard Initiative to increase awareness of major safety hazards and to verify controls are effective. We have maintained this focus and the program has now transitioned into standard work via our SHES Management System. v. Cyber Security

Another aspect of security is our ability to protect our network, systems and data from cyber-attacks which can result in critical services outages, loss of production and business services, damage to reputation, regulatory action and financial loss. To manage this risk, we have an IT security strategy supported by a multi-year security program aimed at delivering improved controls and improving our service continuity and disaster recovery capabilities. A cyber security control framework is supported by a governance structure that spans the corporate, manufacturing site and field operation environments. vi. Climate Change

Orica’s manufacturing processes include the release of greenhouse gases. The business also faces a period of long-term change as the global economy decarbonises and adopts new technologies and sources of energy. In both regards, the business is taking steps to identify and minimise our risks. Our planning and actions are guided by our Climate Change Policy.

The Orica Board formally considers climate-related risk in the annual risk management and planning processes. This work identifies: material risk; causes and impacts; signposts for monitoring; and, our long-term strategic response. It also analyses the challenges presented by climate change and related regulation under various scenarios over the longer term and informs our planning in anticipation of emerging commodity markets including carbon markets.

Our efforts to reduce emissions will prioritise abatement at major production facilities where we can make the most difference by lowering direct nitrous oxide (N2O) emissions. We will also continue to assess opportunities to reduce direct and indirect carbon dioxide (CO2) emissions across all our sites and value chain.

The global transition to a lower carbon future will also impact our customers and commodities, however we believe demand for our core products and services will remain strong while emerging areas of the business continue to grow.

The impact of climate change may also change the physical environment impacting local, national and global socio-economics. We will continue to monitor the leading indicators of change to assess the impacts that may ensue including any risk to our physical assets.

Review of Operations vii. Ethical Business Practices and Good Governance

As a global company with diverse operations, it is essential that we understand and comply with our regulatory requirements so that we maintain our license to operate. Core to this is our ability to comply with regulatory requirements in the areas of occupational health and safety, product security; competition; anti-bribery; corruption; sanctions; and taxation.

We have a program designed to manage the risk of non-compliance with competition, anti-bribery and corruption requirements including: screening, monitoring and reporting of customers, business partners, suppliers, and countries against related obligations and sanctions; delivery of anti-corruption training, and processes to monitor and report requests for bribery or duress payments; and the requirement for legal review of agreements with competitors, suppliers and customers.

Mis-alignment with tax regulators on the treatment of transactions can also have a material financial impact. To manage this risk, we proactively engage with taxation authorities and legal representatives in various jurisdictions to enhance our understanding of our obligations. We have a tax strategy, policy and requirements in place which guide and govern our compliance with our regulatory requirements.

For additional detail on a safe workplace, product stewardship and security, environment and community, climate change, ethical business practices and human capability please refer to our sustainability report.

Tax Transparency Reporting

Orica believes that enhanced tax transparency is a critical element of ethical business behaviour.

Tax Policy - Orica’s approach to tax Orica’s tax policy and approach to tax is published on orica.com. Some important aspects of that policy are set out in this report.

As an Australian mining services company with global operations, Orica generates a substantial amount and variety of taxes across its jurisdictions including income taxes, stamp duties, employment taxes and other taxes. Orica also collects and remits a number of taxes on trust including employment taxes and indirect taxes such as GST/VAT.

The taxes Orica pays and collects form a significant part of the economic contribution to the countries of operation.

Tax strategy and governance Orica’s tax strategy is reviewed by the Board of Directors annually. The tax strategy is aligned with the overall corporate strategy and supplements the Risk Management Policy.

The Chief Financial Officer has oversight responsibility over the tax risk management framework. Operational and governance responsibility for the execution of the Group’s tax strategy rests with the Vice President Taxation, supported by a team of tax professionals. External tax expertise is used where required.

The Vice President Taxation reports on tax matters bi-annually to the Board Audit and Risk Committee.

Orica’s approach to tax is applicable across the Orica Group and is reviewed and updated annually.

Compliance Orica is committed to complying with all relevant revenue laws in a responsible manner, with all taxes properly due, accounted for and paid. A tax standard and relevant procedures are in place to ensure tax compliance obligations are managed.

There is an in house global tax team that manages Orica’s tax affairs which is supplemented with external compliance support where required.

Review of Operations

Structure Orica does not support the use of artificial structures that are established just to avoid paying tax and have no commercial purpose. Orica will not enter into any tax avoidance activities.

Relationships with tax authorities Orica aims for open, transparent and respectful relationships with the Australian Taxation Office and other tax authorities globally. Orica seeks advance rulings from taxation authorities on transactions where appropriate.

Use of tax havens Tax havens are not used for tax planning purposes. Orica has operations in countries that are ‘low tax’ jurisdictions. There is genuine operational substance in these locations, or the entities are dormant.

Orica’s overseas companies are subject to Australia’s international tax rules (Controlled Foreign Corporation rules).

Transparency Orica supports the ongoing global development of improved tax transparency to increase understanding of tax systems and build public trust.

On 3 May 2016, the Treasurer of Australia released a Corporate Tax Transparency Code. The Code was developed by the Board of Taxation in Australia and Orica has signed the Corporate Tax Transparency Code Register and is committed to applying the principles and the details of the Code.

Tax contribution summary In 2018, Orica paid $69 million (2017 $189 million) globally in corporate income taxes and $56 million (2017 $48 million) globally in payroll taxes. Orica collected and remitted $124 million (2017 $120 million) globally in GST / VAT.

The charts show 2018 corporate income tax paid / (refunded) in each region (including withholding tax and trade taxes), and an analysis of total tax paid by type.

In Australia, Orica received corporate income tax refunds of $42 million relating to tax on prior years and resolution of a tax dispute with the Australian Taxation Office (Orica paid tax in 2017 of $91 million). Orica also paid $19 million (2017 $17 million) in payroll tax and $2 million (2017 $2 million) in fringe benefits tax. Orica collected and remitted $43 million (2017 $48 million) in GST and $105 million (2017 $92 million) in ‘pay as you go’ withholding taxes.

Review of Operations

A reconciliation of accounting profit to income tax payable Consolidated Consolidated 2018 2017 A$M A$M

Before individually significant items:

Accounting profit/(loss) before tax 496.8 563.4

Prima facie income tax expense/(benefit) calculated at 30% on accounting profit 149.0 169.0

Material non-temporary differences variation in tax rates of foreign controlled entities (16.3) (38.6) tax under provided in prior years 2.0 8.0 de-recognition of booked tax losses 3.5 4.0 taxable/(non taxable) gains on disposal of assets (3.2) 12.3 other foreign deductions (3.7) (23.0) non creditable withholding taxes 11.2 13.8 non allowable interest deductions 11.3 14.9 non allowable share based payments 4.4 3.0 utilisation of unbooked prior year tax losses (8.0) (6.4) sundry items 7.8 7.0

Income tax expense/(benefit) before individually significant items 158.0 164.0

Individually significant items:

Individually significant items before tax (375.3) -

Prima facie income tax expense/(benefit) calculated at 30% on individually significant items (112.6) -

Material non-temporary differences variation in tax rates of foreign controlled entities 2.1 - impairment of Minova business 60.6 - write down of US deferred tax assets 47.9 -

Income tax expense/(benefit) on individually significant items (2.0) -

Income tax expense/(benefit) 156.0 164.0

Material temporary differences deferred tax (6.3) (26.9) write down of US deferred tax assets (47.9) -

Tax payments more/(less) than tax charges (18.6) 14.2 Tax payments/(refunds) on matters in dispute with tax authorities (13.9) 37.8

Income tax paid per the statement of cash flows 69.3 189.1

Effective tax rate for Australian and global operations

Notes Consolidated Consolidated 2018 2017 Before individually significant items

Australia 1 39.9% 34.5% Global operations (including Australia) 31.8% 29.1% 1. The tax rate is the percentage of income tax expense to accounting profit/loss before tax (before individually significant items) adjusted to exclude exempt dividend income.

Review of Operations

International related party dealings Orica prices its international related party dealings to reflect the substance in its operations in accordance with the ‘arm’s length principle’ as defined in the Organisation for Economic Co-operation and Development (OECD) guidelines and in accordance with the laws in both Australia and the countries in which it operates.

Orica has transfer pricing procedures which govern the pricing of all international related party dealings. These procedures require all international related party dealings to be priced in accordance with the arm’s length standard. Orica maintains contemporaneous records to support the pricing of its international related party dealings and benchmarks and documents the outcome of its material dealings on an annual basis.

The material international related party dealings impacting Orica’s Australian taxable income may be summarised as follows:

 The purchase of raw materials and finished products from related parties in Singapore, Indonesia and China. The products purchased are , caustic soda, gas, bulk explosives and initiating systems;  The sale of raw materials and finished products to related parties in Peru, Singapore, Papua New Guinea, Russia, Panama and . The products sold include bulk explosives, packaged explosives, and initiating systems;  The provision and receipt of services from entities resident in Singapore, Chile, the Philippines, , the , Canada and . The nature of the services include general management, information technology, sales and marketing and logistics;  The use of intellectual property held by a related party in Singapore. The nature of the intellectual property includes technical knowhow related to the manufacture of Orica’s products and the Orica name and trademarks; and  The provision of contract research and development activities for a related party in Singapore.

Orica has a treasury function based in which provides loans and accepts deposits from in excess of 40 group companies at market interest rates. The material transactions are with related parties in Germany, Indonesia, Russia and Mexico. It also has a subsidiary in Singapore which acts as the Group’s captive insurer.

Australian Tax Return Data Notes 2017 2016 A$M A$M

Total income 1 1,999 2,629 Taxable income 2 108 95 @ Tax Rate 3 30% 30% Tax liability 32 29 Offset reductions 4 (26) (23) Tax payable 6 6

1. Total Australian income (includes sales, dividends, interest income etc.) before all expenses (for example, Interest, employee costs, depreciation etc.). 2. Taxable income after allowing for all deductible expenses and tax exempt income. 3. Australian Statutory tax rate. 4. Offset reductions of $26 million (2016 $23 million) relating to franking credits, foreign income tax credits and research and development.

Additional information in relation to taxation is included in note 11 of the financial statements.

'LUHFWRUV¶5HSRUW  7KH'LUHFWRUVRI2ULFD/LPLWHG µWKH&RPSDQ\¶RUµ2ULFD¶ SUHVHQWWKH$QQXDO5HSRUWRIWKH&RPSDQ\DQGLWVFRQWUROOHGHQWLWLHV FROOHFWLYHO\µWKH *URXS¶ IRUWKH\HDUHQGHG6HSWHPEHUDQGWKHDXGLWRU¶VUHSRUWWKHUHRQ 'LUHFWRUV 7KH'LUHFWRUVRIWKH&RPSDQ\GXULQJWKHILQDQFLDO\HDUDQGXSWRWKHGDWHRIWKLVUHSRUWDUH 0:%URRPKHDG&KDLUPDQ $&DOGHURQ0DQDJLQJ'LUHFWRUDQG&KLHI([HFXWLYH2IILFHU &(2  01%UHQQHU ,'&RFNHULOO /LP&2 ':*LEVRQ DSSRLQWHG-DQXDU\  .$0RVHV *77LOEURRN  .*UD\LV&RPSDQ\6HFUHWDU\RI2ULFD  3DUWLFXODUVRI'LUHFWRUV¶DQG&RPSDQ\6HFUHWDU\TXDOLILFDWLRQVH[SHULHQFHDQGVSHFLDOUHVSRQVLELOLWLHVDUHGHWDLOHGLQWKH$QQXDO5HSRUW 'LUHFWRUV¶PHHWLQJV  7KHQXPEHURI'LUHFWRUV¶PHHWLQJV LQFOXGLQJPHHWLQJVRIFRPPLWWHHVRI'LUHFWRUV DQGQXPEHURIPHHWLQJVDWWHQGHGE\HDFKRIWKH GLUHFWRUVRIWKH&RPSDQ\GXULQJWKHILQDQFLDO\HDUDUHOLVWHGEHORZ

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µH[RIILFLR¶PHPEHURIWKDW&RPPLWWHH  7KH0DQDJLQJ'LUHFWRUDQG&(2DWWHQGV&RPPLWWHHPHHWLQJVRQDQµDVQHHGV¶EDVLV 'LUHFWRUV¶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

)LQDOGLYLGHQGDWWKHUDWHRIFHQWVSHUVKDUHRQRUGLQDU\VKDUHVXQIUDQNHGSDLG'HFHPEHU   ,QWHULPGLYLGHQGGHFODUHGDWWKHUDWHRIFHQWVSHUVKDUHRQRUGLQDU\VKDUHVXQIUDQNHGSDLG-XO\ 

7RWDOGLYLGHQGVSDLG  6LQFHWKHHQGRIWKHILQDQFLDO\HDUWKH'LUHFWRUVKDYHGHFODUHGDILQDOGLYLGHQGWREHSDLGDWWKHUDWHRIFHQWV SHUVKDUHRQRUGLQDU\VKDUHV7KLVGLYLGHQGZLOOEHXQIUDQNHG

2ULFD/LPLWHG 1 'LUHFWRUV¶5HSRUW  &KDQJHVLQWKHVWDWHRIDIIDLUV

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¶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¶V/DQGLQJ$PPRQLD7HUPLQDO7KHPDWWHUFRQWLQXHVWREH SURJUHVVHGDQGLV\HWWREHFRQFOXGHG 0RUHVSHFLILFGHWDLOVDERXW2ULFD VVXVWDLQDELOLW\LQLWLDWLYHVDQGSHUIRUPDQFHLQFOXGLQJVDIHW\KHDOWKDQGHQYLURQPHQWFDQEHIRXQGRQWKH 2ULFDZHEVLWH±ZZZRULFDFRPVXVWDLQDELOLW\ ,QGHPQLILFDWLRQRIRIILFHUV 7KH&RPSDQ\ V&RQVWLWXWLRQUHTXLUHVWKH&RPSDQ\WRLQGHPQLI\DQ\SHUVRQZKRLVRUKDVEHHQDQRIILFHURIWKH&RPSDQ\LQFOXGLQJWKH 'LUHFWRUVWKH6HFUHWDULHVDQGRWKHU([HFXWLYHRIILFHUVDJDLQVWOLDELOLWLHVLQFXUUHGZKLOVWDFWLQJLQJRRGIDLWKDVVXFKRIILFHUVWRWKHH[WHQW SHUPLWWHGE\ODZ ,QDFFRUGDQFHZLWKWKH&RPSDQ\ V&RQVWLWXWLRQWKH&RPSDQ\KDVHQWHUHGLQWRD'HHGRI$FFHVV,QGHPQLW\DQG,QVXUDQFHZLWKHDFKRI WKH&RPSDQ\¶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¶VDXGLWRUSHUIRUPHGFHUWDLQRWKHUVHUYLFHVLQDGGLWLRQWRLWVDXGLWUHVSRQVLELOLWLHV 7KH%RDUGLVVDWLVILHGWKDWWKHSURYLVLRQRIQRQDXGLWVHUYLFHVGXULQJWKH\HDUE\WKHDXGLWRULVFRPSDWLEOHZLWKDQGGLGQRWFRPSURPLVH WKHDXGLWRULQGHSHQGHQFHUHTXLUHPHQWVRIWKHCorporations Act 2001IRUWKHIROORZLQJUHDVRQV x DOOQRQDXGLWVHUYLFHVZHUHVXEMHFWWRWKHFRUSRUDWHJRYHUQDQFHSURFHGXUHVDGRSWHGE\WKH&RPSDQ\DQGKDYHEHHQUHYLHZHGE\WKH %RDUG$XGLWDQG5LVN&RPPLWWHHWRHQVXUHWKH\GRQRWLPSDFWWKHLQWHJULW\DQGREMHFWLYLW\RIWKHDXGLWRUDQG x WKHQRQDXGLWVHUYLFHVSURYLGHGGRQRWXQGHUPLQHWKHJHQHUDOSULQFLSOHVUHODWLQJWRDXGLWRULQGHSHQGHQFHDVVHWRXWLQAPES 110 Code of Ethics for Professional AccountantsDVWKH\GLGQRWLQYROYHUHYLHZLQJRUDXGLWLQJWKHDXGLWRU¶VRZQZRUNDFWLQJLQD PDQDJHPHQWRUGHFLVLRQPDNLQJFDSDFLW\IRUWKH&RPSDQ\DFWLQJDVDQDGYRFDWHIRUWKH&RPSDQ\RUMRLQWO\VKDULQJULVNVDQG UHZDUGV $FRS\RIWKHOHDGDXGLWRU¶VLQGHSHQGHQFHGHFODUDWLRQDVUHTXLUHGXQGHU6HFWLRQ&RIWKHCorporations Act 2001LVFRQWDLQHGRQSDJH RIWKH$QQXDO5HSRUWDQGIRUPVSDUWRIWKLV'LUHFWRUV¶5HSRUW 'HWDLOVRIWKHDPRXQWVSDLGWRWKHDXGLWRURIWKH&RPSDQ\.30*DQGLWVUHODWHGSUDFWLFHVIRUDXGLWDQGQRQDXGLWVHUYLFHVSURYLGHG GXULQJWKH\HDUDUHGLVFORVHGLQQRWHWRWKH$QQXDO5HSRUW

2 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW //,(5&5($7,9( &RYHU/HWWHU XQDXGLWHG WRWKH5HPXQHUDWLRQ5HSRUW  'HDU6KDUHKROGHUV  2QEHKDOIRIWKH%RDUG,DPSOHDVHGWRSUHVHQW2ULFD¶V5HPXQHUDWLRQ5HSRUWIRUZKLFKZHVHHN\RXUVXSSRUWDWRXU$QQXDO*HQHUDO 0HHWLQJWKLV'HFHPEHU  &KDQJHVIRU  'XULQJZHLPSOHPHQWHGWKHUHYLVHG([HFXWLYH5HPXQHUDWLRQ)UDPHZRUN WKH)UDPHZRUN DVRXWOLQHGODVW\HDU7KH)UDPHZRUNLV GHVLJQHGWRSURPRWHDQRZQHU¶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¶V RYHUDOOOHYHORIILQDQFLDOSHUIRUPDQFHGLGQRWPHHWRXUexpectations, nRUthose of VKDUHKROGHUs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¶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¶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ed LQFUHDVLQJDOLJQPHQWEHWZHHQUHZDUGVDQGVKDUHKROGHURXWFRPHV    

2ULFD/LPLWHG 3 'LUHFWRUV¶5HSRUW  &RYHU/HWWHU XQDXGLWHG WRWKH5HPXQHUDWLRQ5HSRUW  &XOWXUHDQGRUJDQLVDWLRQDOKHDOWK  7KH%RDUGDQGPDQDJHPHQWEHOLHYHWKDWFXOWXUHDQGSHUIRUPDQFHDUHLQH[WULFDEO\OLQNHG$SRVLWLYHHQJDJHGFXOWXUHZKLFKPRWLYDWHVDQG VXSSRUWVHPSOR\HHVWRUHDFKWKHLUSRWHQWLDOLVFULWLFDOWRDFKLHYLQJZRUOGFODVVSHUIRUPDQFH5HEXLOGLQJWKLVSRVLWLYHFXOWXUHKDVEHHQDSULRULW\ IRUWKH%RDUGDQGPDQDJHPHQWVLQFHZLWKDFWLRQVLQFOXGLQJGHYHORSPHQWRI2ULFD¶VSXUSRVHDQGYDOXHV 2XU&KDUWHU VWUHQJWKHQLQJULVN DQGVDIHW\FXOWXUHWKURXJKWKH0DMRU+D]DUGV,QLWLDWLYHDQGWKURXJKLQYHVWPHQWLQ(WKLFVDQG&RPSOLDQFHDQG%XVLQHVV&RQGXFWIXQFWLRQV VWDQGDUGVDQGV\VWHPVGHPRQVWUDWLQJRXUFRPPLWPHQWWRLPSURYHPHQW  $NH\REMHFWLYHRIWKH+XPDQ5HVRXUFHVDQG&RPSHQVDWLRQ&RPPLWWHHLVWRUHYLHZDQGPRQLWRUSURJUHVVRQVXVWDLQDEOHHQJDJHPHQWRI HPSOR\HHVZLWK2ULFD¶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¶VSRVLWLRQRQWKHFRQVHTXHQFHRISRRUVDIHW\FXOWXUH DQGRXWFRPHVRQUHPXQHUDWLRQLVFOHDU±LQDQGWKH%RDUGKDVPDGHGRZQZDUGDGMXVWPHQWVWR67,RXWFRPHVIRUDOO([HFXWLYHVLQ UHVSRQVHWRWKHWUDJLFIDWDOLWLHVLQ2ULFD¶VRSHUDWLRQV,QIRUPHGE\IXUWKHULQVLJKWLQWRULVNDQGVDIHW\FXOWXUHWKH&RPPLWWHHZLOOXQGHUWDNHD UHYLHZLQDVWRKRZEURDGHUULVNDQGFXOWXUHPDWWHUVPD\EHUHIOHFWHGWKURXJK2ULFD¶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

4 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   ([HFXWLYHVXPPDU\

+RZDUH5HPXQHUDWLRQ6WUDWHJ\DQGRXWFRPHVOLQNHGWREXVLQHVVVWUDWHJ\DQGSHUIRUPDQFH" $W2ULFDUHPXQHUDWLRQLVOLQNHGWRWKHGULYHUVRIRXUEXVLQHVVVWUDWHJ\KHOSLQJWRFUHDWHORQJWHUPVXFFHVVIRUVKDUHKROGHUV7KHDWULVN FRPSRQHQWVRIUHPXQHUDWLRQDUHWLHGWRPHDVXUHVWKDWUHIOHFWRSHUDWLQJDQGFDSLWDOHIILFLHQFLHVERWKLQWKHVKRUWDQGORQJWHUP6WUDWHJLF GULYHUVDUHUHIOHFWHGLQ67,DQG/7,SHUIRUPDQFHPHDVXUHV±VR2ULFD¶VDFWXDOSHUIRUPDQFHGLUHFWO\DIIHFWVZKDW([HFXWLYHVDUHSDLG7KH GLDJUDPEHORZSURYLGHVDQRYHUYLHZRIWKH)UDPHZRUNDQGWKHVSHFLILFSHUIRUPDQFHOLQNDJHV.H\WHUPVRIWKH6KRUW7HUPDQG/RQJ7HUP ,QFHQWLYH3ODQVDUHRXWOLQHGLQ6HFWLRQ   DUHUHIOHFWHGLQ67,DQG/7, VR2ULFD¶VDFWXDOSHUIRUPDQFHLQ OLQNVWRZKDW([HFXWLYHVDUH  2XUVWUDWHJLFGULYHUV« SHUIRUPDQFHPHDVXUHV« )<« SDLG    3RVLWLYHSURJUHVVLQLPSOHPHQWDWLRQ  RI2ULFD¶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¶VV\VWHPV LQFOXGLQJJURZWKHQKDQFLQJ UHQHZDOSURJUDP3RVLWLYHSURJUHVV  2ULFD¶VGHYHORSPHQWDQGXVHRI RQFXOWXUHDQGRUJDQLVDWLRQKHDOWK WHFKQRORJ\DQGFXOWXUH         'XULQJ)<WKH)<DZDUG 5HWXUQRQ1HW$VVHWVWRJHWKHU ZDVHOLJLEOHIRUWHVWLQJ7KLVDZDUG  /RQJWHUP ZLWKLQFUHDVHGKROGLQJORFNV ZDVVXEMHFWWRWHVWLQJDJDLQVW5765 1R/7,YHVWHGLQ)<IRUWKH VKDUHKROGHUYDOXH 'ULYHVXVWDLQDEOHSURGXFWLYLW\  DQG52&PHDVXUHV &(2DQGHOLJLEOH([HFXWLYH.03 FUHDWLRQ LPSURYHPHQWDQGHIILFLHQWFDSLWDO 7KUHVKROGSHUIRUPDQFHZDVQRW  DOORFDWLRQ DFKLHYHGIRUHLWKHUPHWULF     :KLOHQRWVSHFLILFDOO\LQFOXGHGDVDQ67,PHWULFIRUWKH&(2WKH%RDUGFRQWLQXHVWRPHDVXUHSURJUHVVDJDLQVWULJRURXVH[WHUQDOO\YDOLGDWHGHPSOR\HH HQJDJHPHQWDQGRUJDQLVDWLRQKHDOWKEDVHOLQHVDQGDJDLQVWSODQVWRLPSURYHHQJDJHPHQWDQGVWUHQJWKHQEXVLQHVVFRQGXFWHWKLFVDQGFRPSOLDQFH%XLOGLQJDQG VWUHQJWKHQLQJGLYHUVLW\DQGFRQGXFWLVDVSHFLILFIRFXVDUHDIRUWKH+XPDQ5HVRXUFHVDQG&RPSHQVDWLRQ&RPPLWWHHDQGLVLQFOXGHGLQWKHDVVHVVPHQWRIDQ\ H[HUFLVHRIGLVFUHWLRQE\WKH%RDUGLQUHODWLRQWRUHPXQHUDWLRQRXWFRPHV  

2ULFD/LPLWHG 5 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   &RQWHQWV

6HFWLRQ.H\0DQDJHPHQW3HUVRQQHO  ([HFXWLYH.H\0DQDJHPHQW3HUVRQQHO  1RQ([HFXWLYH'LUHFWRUV.H\0DQDJHPHQW3HUVRQQHO 6HFWLRQ.H\VWDNHKROGHUTXHVWLRQV  :KDWLV2ULFD¶V([HFXWLYHUHPXQHUDWLRQVWUDWHJ\"  +RZLV([HFXWLYHUHPXQHUDWLRQVWUXFWXUHG"  :KHQLVUHPXQHUDWLRQHDUQHGDQGUHFHLYHG"  :KDWLVWKHUHPXQHUDWLRQPL[IRU([HFXWLYH.03"  +RZPXFKGLG([HFXWLYHVJHWSDLGLQ)<"  6HFWLRQ([HFXWLYHUHPXQHUDWLRQ  ([HFXWLYH5HPXQHUDWLRQ)UDPHZRUN  6KRUWWHUPLQFHQWLYHRXWFRPHV±OLQNWRSHUIRUPDQFH  /RQJWHUPLQFHQWLYHRXWFRPH  :KDWHTXLW\ZDVJUDQWHGLQ)<"  2YHUYLHZRIEXVLQHVVSHUIRUPDQFH±ILYH\HDUFRPSDULVRQ  6HUYLFHDJUHHPHQWV  )<6KRUWWHUPLQFHQWLYHPHWULFV  6HFWLRQ1RQ([HFXWLYH'LUHFWRUDUUDQJHPHQWV  2YHUYLHZ  )HHVDQGRWKHUEHQHILWV 6HFWLRQ5HPXQHUDWLRQJRYHUQDQFH  5HVSRQVLELOLW\IRUVHWWLQJUHPXQHUDWLRQ  8VHRIUHPXQHUDWLRQDGYLVRUVGXULQJWKH\HDU  6KDUHWUDGLQJSROLF\DQG0DOXV  ([HFXWLYHDQG'LUHFWRUVKDUHRZQHUVKLS  6HFWLRQ.03VWDWXWRU\GLVFORVXUHV  ([HFXWLYH.03UHPXQHUDWLRQ  6XPPDU\RIDZDUGVKHOGXQGHU2ULFD¶V/7,DQG67,GHIHUUHGVKDUHDUUDQJHPHQWV  1RQ([HFXWLYH'LUHFWRUUHPXQHUDWLRQ

6 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±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iQ0RUDOHV *URXS([HFXWLYHDQG3UHVLGHQW/DWLQ$PHULFD 6HSWHPEHU &KLOH 6HEDVWLDQ3LQWR   *URXS([HFXWLYHDQG3UHVLGHQW/DWLQ$PHULFD 2FWREHU &KLOH 7KRPDV6FKXWWH *URXS([HFXWLYHDQG3UHVLGHQW(XURSH 2FWREHU 8QLWHG.LQJGRP 0LGGOH(DVWDQG$IULFD    &HDVHGWREHDUHSRUWDEOH.03RQ$SULO  &KDQJHVLQ.H\0DQDJHPHQW3HUVRQQHOHIIHFWLYH2FWREHU x &KULVWRSKHU'DYLVZDVDSSRLQWHGDV&KLHI)LQDQFLDO2IILFHUHIIHFWLYH2FWREHUDQG x 9LQFHQW1LFROHWWL&KLHI)LQDQFLDO2IILFHUFHDVHGWREHDUHSRUWDEOH.03IURP6HSWHPEHUDQGZLOOOHDYH2ULFDDWWKHHQGRI 'HFHPEHU  3DUWLFXODUVRI([HFXWLYHV¶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

2ULFD/LPLWHG 7 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   6HFWLRQ.H\VWDNHKROGHUTXHVWLRQV

 :KDWLV2ULFD¶V([HFXWLYHUHPXQHUDWLRQVWUDWHJ\" 2ULFD¶V([HFXWLYH5HPXQHUDWLRQ6WUDWHJ\LVLOOXVWUDWHGEHORZ   2%-(&7,9(&203(7,79(5(081(5$7,217+$7$/,*16(;(&87,9(6:,7+7+(/21*7(5068&&(662)  25,&$$1',766+$5(+2/'(56              6WURQJDOLJQPHQW )LWIRUSXUSRVHDQG 6LPSOHDQG *OREDOO\FRPSHWLWLYH  ZLWKVKDUHKROGHU DOLJQHGWREXVLQHVV WUDQVSDUHQW HQDEOLQJ2ULFDWRDWWUDFW UHWXUQV VWUDWHJ\ DQGUHWDLQWKHEHVW

 %2$5' WDOHQW  35,25,7,(6  

 +RZLV([HFXWLYHUHPXQHUDWLRQVWUXFWXUHG" 2ULFD¶V)<([HFXWLYH5HPXQHUDWLRQ)UDPHZRUNIRFXVHVRQGHOLYHU\RIWKHRQJRLQJWXUQDURXQGRIWKH&RPSDQ\WKURXJKRSHUDWLQJ VDIHO\HQKDQFLQJRSHUDWLQJDQGFDSLWDOHIILFLHQF\DQGHPEHGGLQJWKRVHHIILFLHQFLHVIRUORQJWHUPLPSURYHPHQWLQFDSLWDOUHWXUQV7KH GLDJUDPEHORZSURYLGHVDQRYHUYLHZRIWKHGLIIHUHQWFRPSRQHQWVZLWKLQWKH)UDPHZRUN  7KUHHNH\HOHPHQWVWKDWXQGHUSLQQHGWKHGHVLJQZHUH x ,QFUHDVLQJWKHTXDQWXPDQGOHQJWKRIPDQDJHPHQWVKDUHKROGLQJ x ,QFUHDVLQJWKHZHLJKWLQJRIILQDQFLDOPHWULFV±ILQDQFLDOSHUIRUPDQFHPHWULFVDSSOLHGWRWKH&(2ZLWKRYHUULGLQJ%RDUG GLVFUHWLRQWRDGMXVWIRUDSSURSULDWHRXWFRPHVDQG x ,PSURYLQJWUDQVSDUHQF\±PHWULFVGLUHFWO\OLQNHGWRORQJWHUPYDOXHFUHDWLRQ 2YHUDOO%RDUGGLVFUHWLRQLVUHWDLQHGWRDGMXVWLQFHQWLYHRXWFRPHVDVDSSURSULDWH   6LJQLILFDQWSURSRUWLRQDWULVN  ([WHQGHGHTXLW\µORFNLQ¶ ILYH\HDUWRWDOKROG   2YHUULGLQJ%RDUGGLVFUHWLRQWRDGMXVWIRUDSSURSULDWHRXWFRPHV   5(081(5$7,21 ),;('$118$/5(081(5$7,21 6+2577(50,1&(17,9( 67,  /21*7(50,1&(17,9( /7,   &20321(17 )$5     3URYLGHFRPSHWLWLYHEDVHSD\WR 'ULYHORQJWHUPYDOXHFUHDWLRQ DWWUDFWDQGUHWDLQWKHVNLOOVQHHGHGWR 'ULYHSHUIRUPDQFHDOLJQHGWRORQJ IRUVKDUHKROGHUV  385326( PDQDJHDJOREDOEXVLQHVVLQD WHUPYDOXHFUHDWLRQ (QFRXUDJHDQRZQHU¶VPLQGVHW  FRPSOH[RSHUDWLQJHQYLURQPHQW DQGORQJWHUPGHFLVLRQPDNLQJ   'HIHUUHGLQWR 3HUIRUPDQFHULJKWV YHVWLQJ  VKDUHULJKWV DIWHUWKUHH\HDUVVXEMHFWWR %DVHVDODU\VXSHUDQQXDWLRQDQG $QQXDOFDVK IRURQH\HDU  SHUIRUPDQFH  '(/,9(5< DOORZDQFHV SHUORFDOPDUNHW SD\PHQW ZLWKDIXUWKHU  ZLWKDIXUWKHUWZR\HDUKROGLQJ SUDFWLFH  WKUHH\HDU ORFN  KROGLQJORFN   67,3HUIRUPDQFH0HDVXUHV /7,3HUIRUPDQFH0HDVXUH 7DUJHW)L[HG5HPXQHUDWLRQ  &(2   SRVLWLRQLQJLVPHGLDQRIFRPSDUDWRU  5HWXUQRQ1HW$VVHWV 521$ ±  JURXS DYHUDJHGRYHUWKUHH\HDUV  &RPSDUDWRUVFXVWRPJURXSWKDW ^ĂĨĞƚLJ;ϮϱйͿ  UHIOHFWV2ULFD¶VRSHUDWLRQVVL]HDQG  )<$3352$&+ )RUHDFK\HDU521$LV KDVVXEVWDQWLDOJOREDORSHUDWLRQVSOXV FDOFXODWHGDVDQQXDO(DUQLQJV  DGGLWLRQDOUHIHUHQFHWR$6;OLVWHG /dͬ^ĂůĞƐ ;ϰϱйͿ %HIRUH,QWHUHVWDQG7D[ (%,7  FRPSDQLHVZLWKVLPLODUPDUNHW divided by:  ^ĂůĞƐͬEK FDSLWDOLVDWLRQDQGJHRJUDSKLFUROH 5ROOLQJPRQWK1HW2SHUDWLQJ  ;ϯϬйͿ VSHFLILFEHQFKPDUNV $VVHWV 12$       

8 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG  

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



 :KDWLVWKHUHPXQHUDWLRQPL[IRU([HFXWLYH.03"  7KHUHPXQHUDWLRQPL[IRU([HFXWLYH.03LVZHLJKWHGWRZDUGVYDULDEOH DWULVN UHPXQHUDWLRQWRSURYLGHDOLJQPHQWZLWKWKHLQWHUHVWVRI VKDUHKROGHUVDQGWRGULYHSHUIRUPDQFHDJDLQVW2ULFD¶VVKRUWWHUPDQGORQJWHUPEXVLQHVVREMHFWLYHV $VVXPLQJWDUJHW67,DQGWKHIDFHYDOXHRI/7,JUDQWHGWR([HFXWLYHVWKHUHPXQHUDWLRQPL[LVDVIROORZV x &(2RIKLVUHPXQHUDWLRQLVSHUIRUPDQFHEDVHGSD\DQGLVGHOLYHUHGDVVKDUHVRUVKDUHULJKWV x 2WKHU([HFXWLYH.03RIWKHLUUHPXQHUDWLRQ RQDYHUDJH LVSHUIRUPDQFHEDVHGSD\DQGLVGHOLYHUHGDVVKDUHVRUVKDUH ULJKWV /7,LVJUDQWHGDWIDFHYDOXH EDVHGRQWKHYROXPHZHLJKWHGDYHUDJHSULFH 9:$3 RI2ULFDVKDUHVGXULQJWKHILYHWUDGLQJGD\VIROORZLQJWKH IXOO\HDUUHVXOWVDQQRXQFHPHQWURXQGHGGRZQWRWKHQHDUHVWZKROHQXPEHURIULJKWV ([HFXWLYH.03KDYHPLQLPXPVKDUHKROGLQJ UHTXLUHPHQWV   3HUIRUPDQFHGHSHQGHQW    &(2 )$5 7DUJHW67, )DFHYDOXHRI/7,JUDQW 3HUIRUPDQFH5LJKWV          &DVK 'HI6KDUHV         3HUIRUPDQFHGHSHQGHQW   2WKHU )DFHYDOXHRI/7,JUDQW 3HUIRUPDQFH  )$5 7DUJHW67, ([HFXWLYHV     5LJKWV     DYHUDJH   'HI &DVK  6KDUHV        2ULFD/LPLWHG 9 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG    +RZPXFKGLG([HFXWLYHVJHWSDLGLQ)<"  7KHWDEOHEHORZSUHVHQWVWKHUHPXQHUDWLRQSDLGWRRUYHVWHGIRU([HFXWLYH.03LQ)<      3ULRU\HDU    )L[HGDQQXDO 67,WREH 7RWDO HTXLW\DZDUGV    5HPXQHUDWLRQ SDLG FDVK YHVWHG  7RWDO ([HFXWLYHV .03    LQFDVK SD\PHQW GXULQJ\HDU 2WKHU UHPXQHUDWLRQ         UHFHLYHG             $OEHUWR&DOGHURQ       9LQFHQW1LFROHWWL         -DPHV%RQQRU       'DUU\O&X]]XEER       &DUORV'XDUWH       $QJXV0HOERXUQH       *HUPi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

10 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   6HFWLRQ([HFXWLYHUHPXQHUDWLRQ   ([HFXWLYH5HPXQHUDWLRQ)UDPHZRUN  7KHIROORZLQJWDEOHRXWOLQHVWKH)<([HFXWLYH5HPXQHUDWLRQ)UDPHZRUN  5(081(5$7,21326,7,21,1* 0DUNHWSRVLWLRQ 0HGLDQIRU)$5DQGEHWZHHQ0HGLDQDQGWKSHUFHQWLOHIRUWRWDOUHPXQHUDWLRQZKHUHRXWVWDQGLQJ SHUIRUPDQFHLVGHOLYHUHG &RPSDUDWRUV 3ULPDU\FRPSDUDWRUJURXS±OLVWHGFRPSDQLHVIURPZLWKLQWKH$6;LQVLPLODULQGXVWULHVZLWKDWOHDVW RIUHYHQXHJHQHUDWHGRYHUVHDVDQGZLWKPDUNHWFDSLWDOLVDWLRQRIDWOHDVWEQ %DVHGRQGDWDDYDLODEOHDVDW$XJXVWWKHFXVWRPFRPSDUDWRUJURXS H[FOXGLQJ2ULFD FRPSULVHGWKH IROORZLQJFRPSDQLHV$PFRU$QVHOO%+3%OXH6FRSH6WHHO%RUDO%UDPEOHV&6/)RUWHVFXH0HWDOV*URXS *RRGPDQ*URXS-DPHV+DUGLH1HZFUHVW0LQLQJ1XIDUP5HV0HG5LR7LQWR6LPV0HWDO6RXWK :RRGVLGHDQG:RUOH\3DUVRQV 6HFRQGDU\FRPSDUDWRUJURXS UHIHUHQFH ±$6;OLVWHGFRPSDQLHVZLWKPDUNHWFDSLWDOLVDWLRQEHWZHHQ DQGRI2ULFD¶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

2ULFD/LPLWHG 11 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   /7, &KDQJHVLQ)< )RU)<WKH/7,RXWFRPHLVGHWHUPLQHGVROHO\E\521$ VHH3HUIRUPDQFH0HDVXUHEHORZ  7KHKROGLQJORFNZDVLQWURGXFHGWREHPRUHDOLJQHGZLWKVKDUHKROGHUH[SHULHQFH 3D\PHQWYHKLFOH 3HUIRUPDQFHVKDUHULJKWV 2SSRUWXQLW\ IDFH &(2RI)$5JUDQWDWIDFHYDOXH YDOXH  2WKHU([HFXWLYHVRI)$5JUDQWDWIDFHYDOXH 7KHDFWXDOQXPEHURISHUIRUPDQFHVKDUHULJKWVLVVXHGWRHDFK([HFXWLYHZDVGHWHUPLQHGE\GLYLGLQJ WKHLUUHVSHFWLYHJUDQWYDOXHVE\WKHILYHGD\9:$3RI2ULFDVKDUHVIROORZLQJWKHDQQRXQFHPHQWRI 2ULFD¶V)<DQQXDOUHVXOWV    3HUIRUPDQFHSHULRG 3HUIRUPDQFHLVPHDVXUHGRYHUWKUHHILQDQFLDO\HDUV )<)<DQG)<  3HUIRUPDQFHPHDVXUH521$±FDOFXODWHGDVDQQXDO(%,7UROOLQJPRQWK1HW2SHUDWLQJ$VVHWV FDOFXODWHGRQDQDYHUDJH EDVLVRYHUWKUHHILQDQFLDO\HDUV  7DUJHWVDQGYHVWLQJ 7KH)<YHVWLQJVFKHGXOHIRUWKH521$SHUIRUPDQFHPHDVXUHLVDVIROORZV VFKHGXOH  $YHUDJH521$RYHU\HDUV RI5LJKWVYHVWLQJ %HORZ   1RYHVWLQJ $W RIULJKWVYHVW %HWZHHQDQG 6WUDLJKWOLQHYHVWLQJEHWZHHQDQGRIULJKWVYHVW $W RIULJKWVYHVW %HWZHHQDQG 6WUDLJKWOLQHYHVWLQJEHWZHHQDQGRIULJKWVYHVW $WRUDERYH RIULJKWVYHVW

  7KH%RDUGRULJLQDOO\DSSURYHGWKH521$PLQLPXPWKUHVKROGDW7KLVZDVVXEVHTXHQWO\DPHQGHG LQ'HFHPEHUWRLQOLQHZLWKWKHDFWXDO521$DFKLHYHGLQ)<

521$WDUJHWVUHIOHFWWKH%RDUG¶VH[SHFWDWLRQVIRUUHWXUQVWKURXJKWKHFXUUHQWLQGXVWU\PDUNHWF\FOH 2ULFD¶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¶VPLQGVHWDQGSURYLGH DOLJQPHQWZLWKVKDUHKROGHUV'LVSRVDOUHVWULFWLRQVPD\EHUHOD[HGZKHUHDQ([HFXWLYHLVUHTXLUHGWR IXQGSHUVRQDOWD[REOLJDWLRQVDULVLQJIURPWKHYHVWLQJRISHUIRUPDQFHVKDUHULJKWV W\SLFDOO\DSSOLHVWR QRQ$XVWUDOLDQEDVHG([HFXWLYHV  $FFHVVWRGLYLGHQGV ([HFXWLYHVDUHQRWHQWLWOHGWRUHFHLYHGLYLGHQGVRQXQYHVWHGSHUIRUPDQFHVKDUHULJKWVGXULQJWKH WKUHH\HDUSHUIRUPDQFHSHULRG2QFHYHVWHGKRZHYHU([HFXWLYHVDUHHQWLWOHGWRUHFHLYHGLYLGHQGV LQFOXGLQJZKHQVKDUHVDUHUHVWULFWHGIURPGLVSRVDOGXULQJWKHWZR\HDUKROGLQJORFN



12 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG    6KRUWWHUPLQFHQWLYHRXWFRPHV±OLQNWRSHUIRUPDQFH  D  6XPPDU\RI)<67,SHUIRUPDQFHFRQGLWLRQVDQGSHUIRUPDQFHOHYHODFKLHYHG )RU)<EXVLQHVVDQGSHUVRQDOSHUIRUPDQFHWDUJHWZHLJKWLQJRIHDFKFRPSRQHQWRIWKH&(2¶VVFRUHFDUGDQGSHUIRUPDQFH OHYHODFKLHYHGDUHVXPPDULVHGEHORZ  &DWHJRU\ 0HDVXUH 3HUIRUPDQFHDQG :HLJKWLQJ  2XWFRPHFRPPHQWDU\ UHZDUGDOLJQPHQW DWWDUJHW  RXWFRPH

6DIHW\ $OO:RUNHU5HFRUGDEOH 5HZDUGVDFRQWLQXRXV   3RVLWLYHSURJUHVVLQ &DVH5DWH $:5&5    IRFXVRQVDIHDQG LPSOHPHQWDWLRQRI2ULFD¶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¶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¶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¶VRYHUDOOOHYHORISHUIRUPDQFHGLGQRWPHHWVKDUHKROGHU H[SHFWDWLRQV  :KLOHSOHDVLQJSURJUHVVZDVPDGHRQDVSHFWVRIVDIHW\SHUIRUPDQFHIXOO\HDU(%,7DQG521$RXWFRPHVLQ)<ZHUHORZHUWKDQLQ )<LPSDFWHGE\RQHRIIILUVWKDOILPSDFWVLQFOXGLQJ%XUUXSRSHUDWLRQDOLVVXHVDQGXQSODQQHGPDLQWHQDQFHDWWKH

2ULFD/LPLWHG 13 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   2XWFRPHVIRU([HFXWLYH.03YDULRXVO\UHIOHFWHG*URXSDQG5HJLRQDO6DIHW\RXWFRPHV*URXSDQG5HJLRQDO)LQDQFLDORXWFRPHV DGMXVWHGDV DERYH DQGDFKLHYHPHQWRIVWUDWHJLFLQLWLDWLYHVVSHFLILFWR([HFXWLYHV¶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¶VHIIRUWVDUHIRFXVHGRQGULYLQJJURZWKLQ)<EXLOGLQJRQLPSURYHGVHFRQGKDOIUHVXOWV  E  6KRUWWHUPLQFHQWLYHRXWFRPH±)< 'HWDLOVRIWKH)<RXWFRPHVIRUHOLJLEOH([HFXWLYH.03DUHVHWRXWLQWKHWDEOHEHORZ     $FWXDO67,     SDLGLQ   0D[LPXP67, $FWXDO67, GHIHUUHG $FWXDO67, RI )RUWKH\HDUHQGHG6HSWHPEHU  SDLG  RSSRUWXQLW\ LQFDVK HTXLW\ SD\PHQWDV PD[LPXP      RIPD[LPXP 67,IRUIHLWHG   &XUUHQW([HFXWLYH.03   $OEHUWR&DOGHURQ      9LQFHQW1LFROHWWL      -DPHV%RQQRU      'DUU\O&X]]XEER      &DUORV'XDUWH      $QJXV0HOERXUQH      *HUPiQ0RUDOHV      7KRPDV6FKXWWH      )RUPHU([HFXWLYH.03       6HEDVWLDQ3LQWR (1) )RU$XVWUDOLDQEDVHG([HFXWLYHV.03PD[LPXP67,RSSRUWXQLW\LVFDOFXODWHGRQ)$5LQFOXVLYHRIVXSHUDQQXDWLRQ)RURYHUVHDVEDVHG ([HFXWLYHV.03PD[LPXP67,RSSRUWXQLW\GRHVQRWLQFOXGHWKHHTXLYDOHQWSHQVLRQFRQWULEXWLRQV (2) 8QGHU$$6%Share-based Payments67,SDLGWR([HFXWLYHVDVGHIHUUHGHTXLW\LVDFFRXQWHGIRUDVDVKDUHEDVHGSD\PHQWDQGH[SHQVHGRYHU WZR\HDUV$FFRUGLQJO\RIWKHYDOXHRIWKHGHIHUUHGHTXLW\DULVLQJIURPWKH67,RXWFRPHKDVEHHQLQFOXGHGLQHDFK([HFXWLYH.03¶VVKDUH EDVHGSD\PHQWVH[SHQVHLQDQGWKHUHPDLQGHUZLOOEHLQFOXGHGLQ (3) 1RWHOLJLEOHWRSDUWLFLSDWHLQWKH)<67,SODQ   /RQJWHUPLQFHQWLYHRXWFRPH 7KHWDEOHEHORZVXPPDULVHVWKH/7,3ODQDZDUGVWHVWHGLQWKHFXUUHQWILQDQFLDO\HDUWRJHWKHUZLWKDZDUGVWKDWUHPDLQXQYHVWHG  3ODQ *UDQW 3HUIRUPDQFHSHULRG 3HUIRUPDQFHPHDVXUHVDSSOLFDEOHWRDZDUG 2XWFRPH /7,3 )< )<±)< 9HVWLQJRI5LJKWVLVVXEMHFWWR )RUIHLWHG ƒ $YHUDJH52&  DQG ƒ 5HODWLYH765UDQNLQJDJDLQVW$6;   /7,3 )< )<±)< $VDERYH 1RW\HWWHVWHG /7,3 )< )<±)< $VDERYH 1RW\HWWHVWHG /7,3 )< )<±)< 521$   1RW\HWWHVWHG 7KH )< /7,3 ZDV WHVWHG LQ 1RYHPEHU  7KH PLQLPXP SHUIRUPDQFH KXUGOHV IRU ERWK 52& DQG 5765 ZHUH QRW PHW $FFRUGLQJO\QRYHVWLQJRFFXUUHGDQGDOODZDUGVZHUHIRUIHLWHG$VSUHYLRXVO\DGYLVHGWKH%RDUGGHWHUPLQHGWKDW52&IRUWKH )</7,3JUDQWVKRXOGEHFDOFXODWHGIRUWKHSHUIRUPDQFHSHULRG )< EDVHGRQXQLPSDLUHG(QWHUSULVH9DOXHLHWKH LPSDLUPHQWDQQRXQFHGLQ)<ZDVDGGHGEDFNWRWKH(QWHUSULVH9DOXHIRUWKHSXUSRVHVRIWHVWLQJ     

14 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG  

 :KDWHTXLW\ZDVJUDQWHGLQ)<" 7KHWDEOHEHORZSUHVHQWVWKHHTXLW\JUDQWHGDWIDFHYDOXHWR([HFXWLYH.03IRU)<           )< ([HFXWLYHV )</7, 6LJQRQ 'HIHUUHG   ULJKWV VKDUHV     7RWDO   $OEHUWR&DOGHURQ     9LQFHQW1LFROHWWL     -DPHV%RQQRU     'DUU\O&X]]XEER     &DUORV'XDUWH     $QJXV0HOERXUQH     *HUPiQ0RUDOHV     6HEDVWLDQ3LQWR     7KRPDV6FKXWWH     7RWDO     (1) 6XEMHFWWRSHUIRUPDQFHFRQGLWLRQVDQGGXHWRYHVWLQ1RYHPEHUDQGWKHQVXEMHFWWRWZR\HDUKROGLQJORFN (2) 1RWVXEMHFWWRDQ\IXUWKHUSHUIRUPDQFHFRQGLWLRQVH[FHSWFRQWLQXHGHPSOR\PHQWIRUGXUDWLRQRIGHIHUUDOSHULRGDQGWKHQVXEMHFWWRDWKUHH\HDUKROGLQJORFN    2YHUYLHZRIEXVLQHVVSHUIRUPDQFH±ILYH\HDUFRPSDULVRQ 7KHWDEOHEHORZVXPPDULVHVNH\LQGLFDWRUVRIWKHSHUIRUPDQFHRIWKH&RPSDQ\UHOHYDQWVKDUHKROGHUUHWXUQVRYHUWKHSDVWILYH ILQDQFLDO\HDUVDQGWKHLPSDFWWKLVKDVKDGRQ67,DQG/7,YHVWLQJRXWFRPHVZKLFKVKRZVDOLJQPHQWRI2ULFD¶VLQFHQWLYHDZDUGV ZLWKLWVSHUIRUPDQFH  )LQDQFLDO\HDUHQGHG6HSWHPEHU     3URILW ORVV IURP2SHUDWLRQV P        ,QGLYLGXDOO\VLJQLILFDQWLWHPV±QHWH[SHQVH P    ±   ±  (%,7 P         'LYLGHQGVSHURUGLQDU\VKDUH FHQWV       &ORVLQJVKDUHSULFH DVDW6HSWHPEHU        

PRQWKDYHUDJHVKDUHSULFH -XO\WR6HSWHPEHU HDFK      \HDU (36JURZWK             13$7 P         ([WHUQDO6DOHV P       &XPXODWLYH765            $YHUDJH67,UHFHLYHGDVRIPD[LPXPRSSRUWXQLW\IRU      ([HFXWLYHV (1) 7KLVILJXUHLVEHIRUHLQWHUHVWWD[DQGQRQFRQWUROOLQJLQWHUHVW (2) %HIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV (3) 7KHRSHQLQJVKDUHSULFHIRUILQDQFLDO\HDUZDV (4) &XPXODWLYH765KDVEHHQFDOFXODWHGXVLQJWKHVDPHVWDUWGDWHIRUHDFKSHULRGPHDVXUHG 2FWREHU ,QFDOFXODWLQJWKHFXPXODWLYH765 WKUHHPRQWKDYHUDJHVKDUHSULFHV -XO\WR6HSWHPEHUIRUHDFK\HDU KDYHEHHQXVHG            

2ULFD/LPLWHG 15 'LUHFWRUV¶5HSRUW±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¶VDODU\LQDGGLWLRQWRWKHQRWLFH SHULRG6KRXOGWKH0' &(2¶VVHUYLFHDJUHHPHQWEHWHUPLQDWHGE\PXWXDO DJUHHPHQWPRQWKV¶VDODU\LVSD\DEOH LQZKLFKFDVHQRQRWLFHLVUHTXLUHG WREHJLYHQ  2WKHU([HFXWLYHV ([HFXWLYHVKDYHHLWKHUZHHNVRUZHHNVQRWLFHSHULRGZLWKWKH H[FHSWLRQRI*HUPiQ0RUDOHV,QDFFRUGDQFHZLWK&KLOHDQHPSOR\PHQW ODZ0U0RUDOHV¶QRWLFHSHULRGLVRQHPRQWK ([HFXWLYHVDUHHQWLWOHGWREHSDLGDQDPRXQWHTXDOWRZHHNVIL[HG DQQXDOUHPXQHUDWLRQRQWHUPLQDWLRQ ZHHNVLQWKHFDVHRI-DPHV %RQQRUDQG7KRPDV6FKXWWH  ,QDFFRUGDQFHZLWK&KLOHDQHPSOR\PHQWODZ*HUPiQ0RUDOHVLV HQWLWOHGWRRQHPRQWK¶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ed LQFUHDVLQJDOLJQPHQWEHWZHHQUHZDUGVDQGVKDUHKROGHURXWFRPHV                              

16 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   6HFWLRQ1RQ([HFXWLYH'LUHFWRUDUUDQJHPHQWV  2YHUYLHZ )HHVIRU1RQ([HFXWLYH'LUHFWRUV 'LUHFWRUV DUHVHWE\UHIHUHQFHWRWKHIROORZLQJ x 7KHLQGLYLGXDO¶VUHVSRQVLELOLWLHVDQGWLPHFRPPLWPHQWDWWDFKLQJWRWKHUROHRI'LUHFWRUDQG&RPPLWWHHPHPEHUVKLS x 7KH&RPSDQ\¶VH[LVWLQJUHPXQHUDWLRQSROLFLHVDQGVXUYH\GDWDVRXUFHGIURPH[WHUQDOVSHFLDOLVWV x )HHVSDLGE\FRPSDUDEOHFRPSDQLHVDQGWKHOHYHORIUHPXQHUDWLRQUHTXLUHGWRDWWUDFWDQGUHWDLQ'LUHFWRUVRIWKHDSSURSULDWH FDOLEUHDQG x 7RSUHVHUYHWKHLULQGHSHQGHQFH'LUHFWRUVGRQRWUHFHLYHDQ\IRUPRISHUIRUPDQFHEDVHGSD\ 7KHFXUUHQWDJJUHJDWHIHHSRROIRU'LUHFWRUVRIZDVDSSURYHGE\VKDUHKROGHUVDWWKH&RPSDQ\¶V$QQXDO*HQHUDO 0HHWLQJ7KH&RPSDQ\SD\VERWKVXSHUDQQXDWLRQDQGFRPPLWWHHIHHVWRWKH'LUHFWRUVIURPWKLVSRRO&RPPLWWHHIHHVDUHQRWSDLGWR WKH&KDLUPDQRIWKH%RDUG   )HHVDQGRWKHUEHQHILWV 7KHWDEOHEHORZVHWVRXWWKHHOHPHQWVRI'LUHFWRUV¶IHHVDQGRWKHUEHQHILWV     ,QFOXGHGLQ  VKDUHKROGHU )HHVEHQHILWV 'HVFULSWLRQ  DSSURYHGFDS %RDUGIHHV 0DLQ%RDUG  Chairman ±0DOFROP%URRPKHDG    

+XPDQ5HVRXUFHVDQG&RPSHQVDWLRQ&RPPLWWHH +5 &  

Chairman±0D[LQH%UHQQHU 

2WKHUIHHVEHQHILWV 'LUHFWRUVUHFHLYHDWUDYHODOORZDQFHEDVHGRQWKHKRXUVWUDYHOOHGWRD  1R %RDUGPHHWLQJ7KHDOORZDQFHSDLGLVSHUPHHWLQJIRUWUDYHO EHWZHHQDQGKRXUVRULIWUDYHOWLPHH[FHHGVKRXUV 'LUHFWRUVDUHDOVRHQWLWOHGWREHSDLGDGGLWLRQDOIHHVIRUH[WUDVHUYLFHV RUVSHFLDOH[HUWLRQV

2ULFD/LPLWHG 17 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   6HFWLRQ5HPXQHUDWLRQJRYHUQDQFH

 5HVSRQVLELOLW\IRUVHWWLQJUHPXQHUDWLRQ 7KH+XPDQ5HVRXUFHVDQG&RPSHQVDWLRQ&RPPLWWHH WKH&RPPLWWHH LVGHOHJDWHGUHVSRQVLELOLW\E\WKH%RDUGIRUUHYLHZLQJDQG PDNLQJUHFRPPHQGDWLRQVRQUHPXQHUDWLRQSROLFLHVIRUWKH&RPSDQ\LQFOXGLQJSROLFLHVJRYHUQLQJWKHUHPXQHUDWLRQRI([HFXWLYHV $FWLYLWLHVRIWKH&RPPLWWHHDUHJRYHUQHGE\LWV7HUPVRI5HIHUHQFHZKLFKDUHDYDLODEOHRQWKH&RPSDQ\¶VZHEVLWHDWZZZRULFDFRP $PRQJVWRWKHUUHVSRQVLELOLWLHVWKH&RPPLWWHHDVVLVWVWKH%RDUGLQLWVRYHUVLJKWRI (a) UHPXQHUDWLRQSROLF\IRU([HFXWLYHV (b) OHYHODQGVWUXFWXUHRIUHPXQHUDWLRQIRU6HQLRU([HFXWLYHVLQFOXGLQJVKRUWWHUPDQGORQJWHUPLQFHQWLYHSODQV (c) WKH&RPSDQ\¶VFRPSOLDQFHZLWKDSSOLFDEOHOHJDODQGUHJXODWRU\UHTXLUHPHQWVLQUHVSHFWRIUHPXQHUDWLRQPDWWHUVDQG (d) DSSURYDORIWKHDOORFDWLRQRIVKDUHVDQGDZDUGVXQGHU2ULFD¶V/7,3DQG*HQHUDO(PSOR\HH([HPSW6KDUH3ODQ   8VHRIUHPXQHUDWLRQDGYLVRUVGXULQJWKH\HDU 1RUHPXQHUDWLRQUHFRPPHQGDWLRQVZHUHUHFHLYHGIURPUHPXQHUDWLRQFRQVXOWDQWVDVGHILQHGXQGHUWKHCorporations Act 2001   6KDUHWUDGLQJSROLF\DQG0DOXV

0DOXV

2ULFD¶V0DOXV6WDQGDUGDOORZVWKH%RDUGWRUHTXLUHDQ\([HFXWLYHWRIRUIHLWLQIXOORULQSDUWDQ\XQYHVWHG/7,3RUGHIHUUHG67, DZDUGDVDUHVXOWRI x DPDWHULDOPLVVWDWHPHQWLQILQDQFLDOUHVXOWV x EHKDYLRXUWKDWEULQJV2ULFDLQWRGLVUHSXWHRUKDVWKHSRWHQWLDOWRGRVR x VHULRXVPLVFRQGXFWRU x DQ\RWKHUFLUFXPVWDQFHZKLFKWKH%RDUGKDVGHWHUPLQHGLQJRRGIDLWK ,QFRQVLGHULQJZKHWKHUDQ\DGMXVWPHQWLVQHFHVVDU\LQUHVSHFWRIDQ\RUDOOSDUWLFLSDQWVWKH%RDUGPD\WDNHLQWRDFFRXQWWKH LQGLYLGXDO¶VOHYHORIUHVSRQVLELOLW\DFFRXQWDELOLW\RULQIOXHQFHRYHUWKHDFWLRQRULQDFWLRQWKHTXDQWXPRIWKHDFWXDOORVVRUGDPDJHDQ\ LPSDFWRQ2ULFD¶VILQDQFLDOVRXQGQHVVWKHH[WHQWWRZKLFKDQ\LQWHUQDOSROLFLHVH[WHUQDOUHJXODWLRQVDQGRUULVNPDQDJHPHQW UHTXLUHPHQWVZHUHEUHDFKHGDQGDQ\RWKHUUHOHYDQWPDWWHUV  6HFXULWLHVGHDOLQJ $OO([HFXWLYHVDUHUHTXLUHGWRFRPSO\ZLWK2ULFD¶V6HFXULWLHV¶'HDOLQJ3ROLF\DWDOOWLPHVDQGLQUHVSHFWRIDOO2ULFDVKDUHVKHOG LQFOXGLQJDQ\GHILQHGHPSOR\HHVKDUHSODQV7UDGLQJLVVXEMHFWWRSUHFOHDUDQFHDQGLVQRWSHUPLWWHGGXULQJGHVLJQDWHGEODFNRXW SHULRGVXQOHVVWKHUHDUHH[FHSWLRQDOFLUFXPVWDQFHV([HFXWLYHVDUHSURKLELWHGIURPXVLQJDQ\2ULFDVKDUHVDVFROODWHUDOLQDQ\PDUJLQ ORDQRUGHULYDWLYHDUUDQJHPHQW   ([HFXWLYHDQG'LUHFWRUVKDUHRZQHUVKLS

7KH%RDUGFRQVLGHUVWKDWDQLPSRUWDQWIRXQGDWLRQRI2ULFD¶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¶VEDVHIHHV6XFKKROGLQJVPXVWEHDFTXLUHGRYHUDUHDVRQDEOHWLPHXVLQJSHUVRQDOIXQGV 

18 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG   7KHWDEOHEHORZVHWVRXWWKHQXPEHURIVKDUHVKHOGGLUHFWO\DQGLQGLUHFWO\E\'LUHFWRUVDQG([HFXWLYH.03HPSOR\HGDW6HSWHPEHU   %DODQFHDW %DODQFHDW 0LQLPXP 'DWH0LQLPXP 2FWREHU 6HSWHPEHU 6KDUHKROGLQJ 6KDUHKROGLQJ  $FTXLUHG  'LVSRVHG  5HTXLUHG   5HTXLUHGWREHPHW ([HFXWLYH.03   $OEHUWR&DOGHURQ      'HFHPEHU 9LQFHQW1LFROHWWL     QD QD -DPHV%RQQRU      'HFHPEHU 'DUU\O&X]]XEER      6HSWHPEHU &DUORV'XDUWH       6HSWHPEHU $QJXV0HOERXUQH      6HSWHPEHU *HUPiQ0RUDOHV      $XJXVW 7KRPDV6FKXWWH      'HFHPEHU 1RQ([HFXWLYH'LUHFWRUV  0DOFROP%URRPKHDG       0D[LQH%UHQQHU       ,DQ&RFNHULOO       'HQLVH*LEVRQ      .DUHQ0RVHV       /LP&KHH2QQ       *HQH7LOEURRN         6KDUHVDFTXLUHGLQFOXGLQJWKURXJKWKH'LYLGHQG5HLQYHVWPHQW3ODQ '53    &DOFXODWHGXVLQJWKH2ULFDFORVLQJVKDUHSULFHRQ6HSWHPEHU   6HFWLRQ.03VWDWXWRU\GLVFORVXUHV

 ([HFXWLYH.03UHPXQHUDWLRQ 'HWDLOVRIWKHQDWXUHDQGDPRXQWRIHDFKHOHPHQWRIUHPXQHUDWLRQRI([HFXWLYH.03DUHVHWRXWLQWKHWDEOHEHORZ 5HPXQHUDWLRQRXWFRPHVSUHVHQWHGLQWKHVHWDEOHVDUHFDOFXODWHGZLWKUHIHUHQFHWRWKHCorporations Act 2001DQGUHOHYDQW$XVWUDOLDQ $FFRXQWLQJ6WDQGDUGVUDWKHUWKDQWKHEDVLVRIWDNHKRPHSD\

2ULFD/LPLWHG 19 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG     3RVW  6KRUWWHUPHPSOR\HHEHQHILWV HPSOR\PHQW  EHQHILWV

 7RWDO 2WKHU 6XSHU 7HUPL H[FOXGLQJ 6%3 %DVH &DVK67, 2WKHU /RQJ7HUP DQQXDWLRQ QDWLRQ 6%3  ([SHQVH )L[HG 3D\ 3D\PHQW  %HQHILWV   %HQHILWV  %HQHILWV %HQHILWV ([SHQVH    7RWDO          &XUUHQW([HFXWLYH'LUHFWRUV  $OEHUWR&DOGHURQ                       &XUUHQW([HFXWLYH.03 9LQFHQW1LFROHWWL              -DPHV%RQQRU                        'DUU\O&X]]XEER                        &DUORV'XDUWH                  $QJXV0HOERXUQH                          *HUPiQ0RUDOHV               7KRPDV6FKXWWH                         7RWDO&XUUHQW([HFXWLYH.03                     )RUPHU([HFXWLYH.03 6HEDVWLDQ3LQWR                             7RWDO([HFXWLYH    .03                     7RWDO                    

6KDUHEDVHGSD\PHQW 6%3  (1) &DVK67,3D\PHQWLQFOXGHVSD\PHQWVUHODWLQJWR)<SHUIRUPDQFHDFFUXHGEXWQRWSDLGXQWLO)< (2) 7KHVHEHQHILWVLQFOXGHUHORFDWLRQFRVWVFDUSDUNLQJPHGLFDODQGLQVXUDQFHFRVWVDQGPRYHPHQWVLQDQQXDOOHDYHDFFUXDO LQFOXVLYHRIDQ\DSSOLFDEOH IULQJHEHQHILWVWD[ )RURYHUVHDVEDVHG([HFXWLYHVRWKHUEHQHILWVLQFOXGHUHLPEXUVHPHQWRIDFFRPPRGDWLRQDQGKHDOWKLQVXUDQFH (3) 7KLVEHQHILWLQFOXGHVWKHPRYHPHQWLQORQJVHUYLFHOHDYHDFFUXDO (4) 7KLVLQFOXGHVWKHYDOXHFDOFXODWHGXQGHU$$6% Share-based Payment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hare-based Payment67,SDLGWR([HFXWLYHVDVGHIHUUHGHTXLW\LVDFFRXQWHGIRUDVDVKDUHEDVHGSD\PHQWDQGH[SHQVHGRYHUWZR\HDUV $FFRUGLQJO\RIWKHYDOXHRIWKHGHIHUUHGHTXLW\KDVEHHQLQFOXGHGLQWKH([HFXWLYHVVKDUHEDVHGSD\PHQWH[SHQVHLQ)<DQGWKHUHPDLQGHUZLOOEH LQFOXGHGLQ)<

20 2ULFD/LPLWHG 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG 

 6XPPDU\RIDZDUGVKHOGXQGHU2ULFD¶V/7,DQG67,GHIHUUHGVKDUHDUUDQJHPHQWV 'HWDLOVRI/7,3ULJKWVVLJQRQULJKWVDQGGHIHUUHGVKDUHVDZDUGHGXQGHUWKH67,SODQDUHVHWRXWLQWKHWDEOHEHORZ 

               9DOXHRIHTXLW\        LQVWUXPHQWV       )DLUYDOXHRI LQFOXGHGLQ      %DODQFHDW LQVWUXPHQWVDW FRPSHQVDWLRQ )RUWKH\HDUHQGHG  *UDQWHGGXULQJ   \HDU JUDQWGDWH IRUWKH\HDU 6HSWHPEHU *UDQWGDWH )< 9HVWHG /DSVHG HQG   &XUUHQW([HFXWLYH'LUHFWRUV   $OEHUWR&DOGHURQ  /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       'HIHUUHGVKDUHV 'HF       &XUUHQW([HFXWLYH.03  9LQFHQW1LFROHWWL  /7,3ULJKWV -DQ       -DPHV%RQQRU        /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       'HIHUUHGVKDUHV 'HF       'DUU\O&X]]XEER  /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       &DUORV'XDUWH  /7,3ULJKWV -DQ    0 53  6LJQRQULJKWV   2FW       $QJXV0HOERXUQH  /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       'HIHUUHGVKDUHV 'HF       6LJQRQULJKWV -DQ       *HUPiQ0RUDOHV        6LJQRQULJKWV   6HS       7KRPDV6FKXWWH        /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       'HIHUUHGVKDUHV 'HF              )RUPHU([HFXWLYH.03 6HEDVWLDQ3LQWR      /7,3ULJKWV -DQ       /7,3ULJKWV 'HF       /7,3ULJKWV )HE       /7,3ULJKWV )HE       'HIHUUHGVKDUHV   'HF       'HIHUUHGVKDUHV 'HF                 'HIHUUHGVKDUHVDZDUGHGRQ'HFHPEHULQUHVSHFWRIWKH)<67,DZDUG   5LJKWVWR2ULFDVKDUHVJUDQWHGLQ)<DVSDUWRIDQHPSOR\PHQWDJUHHPHQWRIULJKWVZLOOYHVWPRQWKVIURPJUDQWGDWHDQGWKHUHPDLQLQJ ZLOOYHVWPRQWKVIURPJUDQWGDWH  

2ULFD/LPLWHG   21 'LUHFWRUV¶5HSRUW±5HPXQHUDWLRQ5HSRUW DXGLWHG 

7KHQXPEHURI5LJKWVLVVXHGXQGHUWKH/7,3LVVXHGWR([HFXWLYH.03DQGVHQLRUPDQDJHPHQWDQGDFFRXQWLQJYDOXHVLVGHWDLOHG EHORZ   1XPEHURI 1XPEHURI 1XPEHURI 1XPEHURI 1XPEHURI ULJKWVKHOGDW ULJKWVKHOGDW SDUWLFLSDQWVDW SDUWLFLSDQWVDW )DLUYDOXH 9HVWLQJ ULJKWV 6HSWHPEHU 6HSWHPEHU 6HSWHPEHU 6HSWHPEHU RIULJKWV *UDQWGDWH GDWH LVVXHG     DWJUDQW -XO\   1RY       -DQ 1RY       -XO\   1RY       'HF 1RY       -XO\   1RY       )HE 1RY       )HE 1RY          7KHDVVXPSWLRQVXQGHUO\LQJWKHULJKWVYDOXDWLRQVDUH   3ULFHRI2ULFD ([SHFWHG 'LYLGHQGV )DLUYDOXH)DLUYDOXHSHU )DLUYDOXH  6KDUHVDWJUDQW YRODWLOLW\LQ H[SHFWHGRQ 5LVNIUHH SHUULJKW ULJKW52&  SHUULJKW  GDWH VKDUHSULFH VKDUHV LQWHUHVWUDWH 521$   5765  *UDQWGDWH       -XO\        -DQ      -XO\         'HF       -XO\         )HE       )HE      

  $VXSSOHPHQWDU\/7,RIIHUZDVPDGHLQ-XO\-XO\DQG-XO\WRVHOHFWHGVHQLRUPDQDJHPHQWRWKHUWKDQ([HFXWLYHVZKR MRLQHG2ULFDDIWHUWKHJUDQWGDWHRIWKHPDLQRIIHULQ)HEUXDU\'HFHPEHUDQG-DQXDU\7KHWHUPVDQGFRQGLWLRQVRIWKLV VXSSOHPHQWDU\RIIHUDUHWKHVDPHDVWKHPDLQRIIHU   )RUWKH)</7,SODQULJKWVJUDQWHGDUHVXEMHFWWRDVLQJOHSHUIRUPDQFHFRQGLWLRQ5HWXUQRQ1HW2SHUDWLQJ$VVHWV 521$    )RU([HFXWLYHVRIULJKWVJUDQWHGDUHVXEMHFWWRD5HWXUQRQ&DSLWDO 52& SHUIRUPDQFHFRQGLWLRQDQGDUHVXEMHFWWR5HODWLYH7RWDO 6KDUHKROGHU5HWXUQ 5765 SHUIRUPDQFH  

 2ULFD/LPLWHG 22  'LUHFWRUV¶5HSRUW

 1RQ([HFXWLYH'LUHFWRUUHPXQHUDWLRQ 'HWDLOVRI1RQ([HFXWLYH'LUHFWRUV¶UHPXQHUDWLRQDUHVHWRXWLQWKHIROORZLQJWDEOH        3RVWHPSOR\PHQW 6KRUWWHUPHPSOR\HHEHQHILWV EHQHILWV  &RPPLWWHH 2WKHU    'LUHFWRUVIHHV IHHV EHQHILWV   6XSHUDQQXDWLRQ 7RWDO     

&XUUHQW'LUHFWRUV      0DOFROP%URRPKHDG&KDLUPDQ               0D[LQH%UHQQHU               ,DQ&RFNHULOO                  'HQLVH*LEVRQ         .DUHQ0RVHV               /LP&KHH2QQ               *HQH7LOEURRN                  7RWDO1RQ([HFXWLYH'LUHFWRUV                   (1) 7KHVHEHQHILWVLQFOXGHWUDYHODOORZDQFHVDQGFDUSDUNLQJEHQHILWV                      

2ULFD/LPLWHG   23

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Orica Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Orica Limited for the financial year ended 30 September 2018 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit.

KPMG Penny Stragalinos Partner

Melbourne 1 November 2018

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG Liability limited by a scheme approved under International Cooperative (“KPMG International”), a Swiss entity. Professional Standards Legislation. 25 /ŶĐŽŵĞ^ƚĂƚĞŵĞŶƚ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ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

2ULFD/LPLWHG 26   ^ƚĂƚĞŵĞŶƚŽĨŽŵƉƌĞŚĞŶƐŝǀĞ/ŶĐŽŵĞ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ

 &RQVROLGDWHG     1RWH V P  P

 1HW ORVV SURILWIRUWKH\HDU      2WKHUFRPSUHKHQVLYHLQFRPH  ,WHPVWKDWPD\EHUHFODVVLILHGVXEVHTXHQWO\WR,QFRPH6WDWHPHQW Exchange differences on translation of foreign operations  ([FKDQJHJDLQRQWUDQVODWLRQRIIRUHLJQRSHUDWLRQV F    1HWJDLQ ORVV RQKHGJHRIQHWLQYHVWPHQWVLQIRUHLJQVXEVLGLDULHVQHWRIWD[ F    1HWH[FKDQJHGLIIHUHQFHVRQWUDQVODWLRQRIIRUHLJQRSHUDWLRQV    Sundry items:  1HWFDVKIORZ KHGJHV F   ,WHPVWKDWZ LOOQRWEHUHFODVVLILHGVXEVHTXHQWO\WR,QFRPH6WDWHPHQW  1HWDFWXDULDOJDLQQHWRIWD[ F    2WKHUFRPSUHKHQVLYHLQFRPH ORVV IRUWKHSHULRG    7RWDOFRPSUHKHQVLYHLQFRPHIRUWKHSHULRG  

 $WWULEXWDEOHWR  6KDUHKROGHUVRI2ULFD/LPLWHG    1RQFRQWUROOLQJLQWHUHVWV   7RWDOFRPSUHKHQVLYHLQFRPHIRUWKHSHULRG     7KH6WDWHPHQWRI&RPSUHKHQVLYH,QFRPHLVWREHUHDGLQFRQMXQFWLRQZ LWKWKHDFFRPSDQ\LQJQRWHVWRWKHILQDQFLDOVWDWHPHQWV                           

2ULFD/LPLWHG  27  ĂůĂŶĐĞ^ŚĞĞƚ ƐĂƚϯϬ^ĞƉƚĞŵďĞƌ

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

2ULFD/LPLWHG 28   ^ƚĂƚĞŵĞŶƚŽĨŚĂŶŐĞƐŝŶƋƵŝƚLJ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ 

 )RU H LJQ  FXUUHQF\ &DVKIORZ 1RQ  2UGLQDU\ 5H WDLQH G WUDQVODWLRQ KHGJH 2WKH U FRQWUROOLQJ VKDUHV HDUQLQJV UHVHUYH UHVHUYH UHVHUYHV 7RWDO LQWHUHVWV 7RWDOHTXLW\  PPPPPPPP    %DODQFHDW2FWREHU         3URILWIRUWKH\HDU          2WKHUFRPSUHKHQVLYHORVV          7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU          7UDQVDFWLRQVZ LWKRZ QHUVUHFRUGHGGLUHFWO\LQHTXLW\  7RWDOFKDQJHVLQFRQWULEXWHGHTXLW\          6KDUHEDVHGSD\PHQWVH[SHQVH          'LYHVWPHQWRIQRQFRQWUROOLQJLQWHUHVWV         'LYLGHQGVGLVWULEXWLRQV          'LYLGHQGVGHFODUHGSDLGWRQRQFRQWUROOLQJLQWHUHVWV          %DODQFHDWWKHHQGRIWKH\HDU           %DODQFHDW2FWREHU          3URILW ORVV IRUWKH\HDU          2WKHUFRPSUHKHQVLYHLQFRPH          7RWDOFRPSUHKHQVLYHLQFRPHIRUWKH\HDU        7UDQVDFWLRQVZ LWKRZ QHUVUHFRUGHGGLUHFWO\LQHTXLW\  7RWDOFKDQJHVLQFRQWULEXWHGHTXLW\          6KDUHEDVHGSD\PHQWVH[SHQVH          $FTXLVLWLRQRIQRQFRQWUROOLQJLQWHUHVWV         'LYLGHQGVGLVWULEXWLRQV          'LYLGHQGVGHFODUHGSDLGWRQRQFRQWUROOLQJLQWHUHVWV          %DODQFHDWWKHHQGRIWKH\HDU          7KH6WDWHPHQWRI&KDQJHVLQ(TXLW\LVWREHUHDGLQFRQMXQFWLRQZ LWKWKHDFFRPSDQ\LQJQRWHVWRWKHILQDQFLDOVWDWHPHQWV        

2ULFD/LPLWHG  29  ^ƚĂƚĞŵĞŶƚŽĨĂƐŚ&ůŽǁƐ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ 

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

2ULFD/LPLWHG 30   EŽƚĞƐƚŽƚŚĞ&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ

3DJH About this report  6HFWLRQ$)LQDQFLDOSHUIRUPDQFH  7KLVLVWKH$QQXDO5HSRUWRI2ULFD/LPLWHG µWKH 6HJPHQWUHSRUW  &RPSDQ\¶RUµ2ULFD¶ DQGRILWVFRQWUROOHGHQWLWLHV FROOHFWLYHO\µWKH*URXS¶ IRUWKH\HDUHQGHG (DUQLQJVSHUVKDUH (36   6HSWHPEHU    ,WLVDJHQHUDOSXUSRVH)LQDQFLDO5HSRUWZKLFKKDV 6HFWLRQ%&DSLWDOPDQDJHPHQW  EHHQSUHSDUHGE\DIRUSURILWHQWLW\LQDFFRUGDQFH ZLWKWKHUHTXLUHPHQWVRIDSSOLFDEOH$XVWUDOLDQ 1HWGHEW  $FFRXQWLQJ6WDQGDUGVDQGWKHCorporations Act &RQWULEXWHGHTXLW\DQGUHVHUYHV  2001DQGFRPSOLHVZLWK,QWHUQDWLRQDO)LQDQFLDO 5HSRUWLQJ6WDQGDUGV ,)56 DGRSWHGE\WKH ,QWHUQDWLRQDO$FFRXQWLQJ6WDQGDUGV%RDUG  6HFWLRQ&2SHUDWLQJDVVHWVDQGOLDELOLWLHV  ,WKDVEHHQSUHSDUHGRQDKLVWRULFDOFRVWEDVLV :RUNLQJFDSLWDO  H[FHSWIRUGHULYDWLYHILQDQFLDOLQVWUXPHQWV VXSHUDQQXDWLRQFRPPLWPHQWVDQGLQYHVWPHQWVLQ 3URYLVLRQV  ILQDQFLDODVVHWVZKLFKKDYHEHHQPHDVXUHGDWIDLU 3URSHUW\SODQWDQGHTXLSPHQW  YDOXH,WLVSUHVHQWHGLQ$XVWUDOLDQGROODUVZKLFKLV 2ULFD¶VIXQFWLRQDODQGSUHVHQWDWLRQFXUUHQF\ ,QWDQJLEOHDVVHWV   7KHDPRXQWVVKRZQKDYHEHHQURXQGHGRII ,PSDLUPHQWWHVWLQJRIDVVHWV  H[FHSWZKHUHRWKHUZLVHVWDWHGWRWKHQHDUHVW WHQWKRIDPLOOLRQGROODUVLQDFFRUGDQFHZLWKASIC Corporations (Rounding in Financial/Directors’ 6HFWLRQ'0DQDJLQJILQDQFLDOULVNV  Reports) Instrument 2016/191 GDWHG0DUFK )LQDQFLDOULVNPDQDJHPHQW  .  2ULFD¶V'LUHFWRUVKDYHLQFOXGHGLQIRUPDWLRQLQWKLV UHSRUWWKDWWKH\GHHPWREHPDWHULDODQGUHOHYDQW 6HFWLRQ(7D[DWLRQ  WRWKHXQGHUVWDQGLQJRIWKHFRQVROLGDWHGILQDQFLDO 7D[DWLRQ  VWDWHPHQWV  'LVFORVXUHPD\EHFRQVLGHUHGPDWHULDODQG UHOHYDQWLIWKHGROODUDPRXQWLVVLJQLILFDQWGXHWR 6HFWLRQ)*roup structure  VL]HRUQDWXUHRUWKHLQIRUPDWLRQLVLPSRUWDQWWR ,QYHVWPHQWVLQFRQWUROOHGHQWLWLHV  XQGHUVWDQGWKH 1RQFRQWUROOLQJLQWHUHVWVLQFRQWUROOHGHQWLWLHV  x *URXS¶VFXUUHQW\HDUUHVXOWV x LPSDFWRIVLJQLILFDQWFKDQJHVLQ2ULFD¶V ,QYHVWPHQWVDFFRXQWHGIRUXVLQJWKHHTXLW\PHWKRG  EXVLQHVVRU DQGMRLQWRSHUDWLRQV  x DVSHFWVRIWKH*URXS¶VRSHUDWLRQVWKDWDUH %XVLQHVVHVDQGQRQFRQWUROOLQJLQWHUHVWVDFTXLUHG  LPSRUWDQWWRIXWXUHSHUIRUPDQFH  %XVLQHVVHVGLVSRVHG  'LVFORVXUHRILQIRUPDWLRQWKDWLVQRWPDWHULDOPD\ XQGHUPLQHWKHXVHIXOQHVVRIWKH)LQDQFLDO5HSRUW 3DUHQW&RPSDQ\GLVFORVXUH±2ULFD/LPLWHG  E\REVFXULQJLPSRUWDQWLQIRUPDWLRQ 'HHGRI&URVV*XDUDQWHH   ,QRUGHUWRGHYHORSWKLV)LQDQFLDO5HSRUW PDQDJHPHQWLVUHTXLUHGWRPDNHDQXPEHURI 6HFWLRQ*5HZDUGDQGUHFRJQLWLRQ  MXGJHPHQWVDQGDSSO\HVWLPDWHVRIWKHIXWXUHDV SDUWRIWKHDSSOLFDWLRQSURFHVVRIWKH*URXS¶V (PSOR\HHVKDUHSODQVDQGUHPXQHUDWLRQ  DFFRXQWLQJSROLFLHV-XGJHPHQWVDQGHVWLPDWHV ZKLFKDUHPDWHULDOWRWKLVUHSRUWDUHKLJKOLJKWHGLQ 6XSHUDQQXDWLRQFRPPLWPHQWV  WKHIROORZLQJQRWHV  1RWH Working capital 6HFWLRQ+2WKHU  1RWH Provisions &RPPLWPHQWV  1RWH Property, plant and equipment 1RWH Intangible assets &RQWLQJHQWOLDELOLWLHV  1RWH Impairment testing of assets 1RWH Taxation $XGLWRU¶VUHPXQHUDWLRQ   1RWH Businesses and non-controlling (YHQWVVXEVHTXHQWWREDODQFHGDWH  interests acquired 1RWH Superannuation commitments ,QYHVWPHQWVLQFRQWUROOHGHQWLWLHV  1RWH Contingent liabilities  1HZDFFRXQWLQJSROLFLHVDQGDFFRXQWLQJVWDQGDUGV  

2ULFD/LPLWHG  31  EŽƚĞƐƚŽƚŚĞ&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐʹ&ŝŶĂŶĐŝĂůWĞƌĨŽƌŵĂŶĐĞ &ŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ^ĞƉƚĞŵďĞƌ

6HFWLRQ$)LQDQFLDOSHUIRUPDQFH

$NH\HOHPHQWRIWKH*URXS¶VFXUUHQWVWUDWHJ\LVWRFUHDWHVXVWDLQDEOHVKDUHKROGHUYDOXH7KLVVHFWLRQKLJKOLJKWVWKHUHVXOWVDQG SHUIRUPDQFHRIWKH*URXSIRUWKH\HDUHQGHG6HSWHPEHU

 6HJPHQWUHSRUW

D ,GHQWLILFDWLRQDQGGHVFULSWLRQRIVHJPHQWV 2ULFD¶VUHSRUWDEOHVHJPHQWVDUHEDVHGRQWKHLQWHUQDOPDQDJHPHQWVWUXFWXUHDVUHSRUWHGWRWKH*URXS¶V&KLHI2SHUDWLQJ'HFLVLRQ 0DNHU WKH*URXS¶V0DQDJLQJ'LUHFWRUDQG&(2 

7KHUHSRUWLQJVHJPHQWVDUHDVIROORZV

5HSRUWDEOHVHJPHQWV 3URGXFWVVHUYLFHV y $XVWUDOLD3DFLILF $VLD 0DQXIDFWXUHDQGVXSSO\RIFRPPHUFLDOH[SORVLYHVDQGEODVWLQJV\VWHPVLQFOXGLQJ y 1RUWK$PHULFD WHFKQLFDOVHUYLFHVDQGVROXWLRQVWRWKHPLQLQJDQGLQIUDVWUXFWXUHPDUNHWVDQGVXSSO\ y /DWLQ$PHULFD RIPLQLQJFKHPLFDOVLQFOXGLQJVRGLXPF\DQLGHIRUJROGH[WUDFWLRQ y (XURSH0LGGOH(DVW $IULFD

y 0LQRYD 0LQRYDLVDSURYLGHURIFKHPLFDODQGPHFKDQLFDOHDUWKFRQWUROSURGXFWVDGKHVLYHV DQGJURXQGVXSSRUWVROXWLRQVIRUWKHXQGHUJURXQGPLQLQJFRQVWUXFWLRQWXQQHOOLQJ DQGFLYLOHQJLQHHULQJLQGXVWULHV

y $X[LOLDULHV 0DQXIDFWXUHDQGVXSSO\RIDGYDQFHGKDUGZDUHDQGVRIWZDUHVROXWLRQVWRWKHPLQLQJ LQGXVWU\DQGVSHFLDOLVWFRQVXOWDWLRQIRUEODVWLQJDQGURFNHQJLQHHULQJYLEUDWLRQ FRQWURODQGVXUYH\V

y *OREDO6XSSRUW &RUSRUDWHDQGVXSSRUWFRVWVZKLFKFDQQRWRWKHUZLVHEHDOORFDWHGWRRWKHUVHJPHQWV RQDUHDVRQDEOHEDVLVRSHUDWLRQRIOHJDF\HQYLURQPHQWDOVLWHVDQGQRQRSHUDWLQJ DVVHWV

3ULRUSHULRGFRPSDUDWLYHVHJPHQWLQIRUPDWLRQKDVEHHQUHVWDWHGIRU$XVWUDOLD3DFLILF $VLD(XURSH0LGGOH(DVW $IULFDDQG $X[LOLDULHV

2ULFD/LPLWHG 32 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±)LQDQFLDOSHUIRUPDQFH )RUWKH\HDUHQGHG6HSWHPEHU

 6HJPHQWUHSRUW FRQWLQXHG 

E  5HSRUWDEOHVHJPHQWV 

P $XVWUDOLD3DFLILF $VLD 1RUWK$PHULFD /DWLQ$PHULFD (XURSH0LGGOH (DVW $IULFD 0LQRYD $X[LOLDULHV *OREDO6XSSRUW (OLPLQDWLRQV &RQVROLGDWHG 5HYHQXH ([WHUQDOVDOHV          ,QWHUVHJPHQWVDOHV          7RWDOVDOHVUHYHQXH          2WKHULQFRP H  UHIHUWRQRWHF           7RWDOUHYHQXHDQGRWKHULQFRPH          5HVXOWVEHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV 3URILW ORVV EHIRUHILQDQFLQJFRVWVDQGLQFRPHWD[          )LQDQFLDOLQFRPH  )LQDQFLDOH[SHQVHV  3URILWEHIRUHLQFRPHWD[H[SHQVH  ,QFRPHWD[H[SHQVH  3URILWDIWHULQFRPHWD[H[SHQVH  /HVV3URILWDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV  3URILWDIWHULQFRPHWD[H[SHQVHEHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV DWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LPLWHG  ,QGLYLGXDOO\VLJQLILFDQWLWHPV UHIHUWRQRWHG *URVVLQGLYLGXDOO\VLJQLILFDQWLWHPV               7D[RQLQGLYLGXDOO\VLJQLILFDQWLWHPV          1HWLQGLYLGXDOO\VLJQLILFDQWLWHPVDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV  ,QGLYLGXDOO\VLJQLILFDQWLWHPVDWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LPLWHG  /RVV IRUWKHSHULRGDWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LPLWHG  6HJPHQWDVVHWV          6HJPHQWOLDELOLWLHV          ,QYHVWPHQWVDFFRXQWHGIRUXVLQJWKHHTXLW\PHWKRG          $ F TXLV LWLRQV RI 33(DQGLQWDQJLEOHV          ,PSDLUPHQWRI33(          ,PSDLUPHQWRILQWDQJLEOHV          ,PSDLUPHQWRILQYHQWRULHV          ,PSDLUPHQWRIWUDGHUHFHLYDEOHV          'HSUHFLDWLRQDQGDPRUWLVDWLRQ          1RQFDVKH[SHQVHVVKDUHEDVHGSD\PHQWV              6KDUHRIQHWSURILWRIDVVRFLDWHVDFFRXQWHGIRUXVLQJWKHHTXLW\PHWKRG            ,QFOXGHVIRUHLJQFXUUHQF\JDLQV ORVVHV LQYDULRXVUHSRUWDEOHVHJPHQWV 2ULFD/LPLWHG  33 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±)LQDQFLDOSHUIRUPDQFH )RUWKH\HDUHQGHG6HSWHPEHU

 6HJPHQWUHSRUW FRQWLQXHG 

E  5HSRUWDEOHVHJPHQWV 

P $XVWUDOLD3DFLILF $VLD 1RUWK$PHULFD /DWLQ$PHULFD (XURSH0LGGOH (DVW $IULFD 0LQRYD $X[LOLDULHV *OREDO6XSSRUW (OLPLQDWLRQV &RQVROLGDWHG 5HYHQXH ([WHUQDOVDOHV          ,QWHUVHJPHQWVDOHV          7RWDOVDOHVUHYHQXH          2WKHULQFRPH UHIHUWRQRWHF           7RWDOUHYHQXHDQGRWKHULQFRPH          5HVXOWVEHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV 3URILW ORVV EHIRUHILQDQFLQJFRVWVDQGLQFRPHWD[          )LQDQFLDOLQFRPH  )LQDQFLDOH[SHQVHV  3URILWEHIRUHLQFRPHWD[H[SHQVH  ,QFRPHWD[H[SHQVH  3URILWDIWHULQFRPHWD[H[SHQVH  /HVV3URILWDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV  3URILWDIWHULQFRPHWD[H[SHQVHEHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV DWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LPLWHG  ,QGLYLGXDOO\VLJQLILFDQWLWHPV UHIHUWRQRWHG *URVVLQGLYLGXDOO\VLJQLILFDQWLWHPV          7D[RQLQGLYLGXDOO\VLJQLILFDQWLWHPV          1HWLQGLYLGXDOO\VLJQLILFDQWLWHPVDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV  ,QGLYLGXDOO\VLJQLILFDQWLWHPVDWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LP LWHG  1HWSURILWIRUWKHSHULRGDWWULEXWDEOHWRVKDUHKROGHUVRI2ULFD/LPLWHG 

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±&DSLWDOPDQDJHPHQW )RUWKH\HDUHQGHG6HSWHPEHU

 6HJPHQWUHSRUW FRQWLQXHG   &RQVROLGDWHG    P P  F 2WKHULQFRPH 2WKHULQFRPH    1HWIRUHLJQFXUUHQF\ORVVHV   3URILWIURPVDOHRILQYHVWPHQWVEXVLQHVVHV    1HWSURILWRQVDOHRISURSHUW\SODQWDQGHTXLSPHQW   7RWDORWKHULQFRPH   

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

H  *HRJUDSKLFDOVHJPHQWV

7KHSUHVHQWDWLRQRIJHRJUDSKLFDOUHYHQXHLVEDVHGRQWKHJHRJUDSKLFDOORFDWLRQRIFXVWRPHUV6HJPHQWDVVHWVDUH EDVHGRQWKHJHRJUDSKLFDOORFDWLRQRIWKHDVVHWV

5HYHQXH 1RQFXUUHQWDVVHWV      P P P P

$XVWUDOLD     8QLWHG6WDWHVRI$PHULFD     2WKHU      &RQVROLGDWHG    

  ([FOXGLQJILQDQFLDOGHULYDWLYHV LQFOXGHGZ LWKLQRWKHUDVVHWVDQGRWKHUOLDELOLWLHV GHIHUUHGWD[DVVHWVDQGSRVWHPSOR\PHQW EHQHILWDVVHWV

 2WKHUWKDQ$XVWUDOLDDQG8QLWHG6WDWHVRI$PHULFDVDOHVWRRWKHUFRXQWULHVDUHLQGLYLGXDOO\OHVVWKDQRIWKH*URXS V WRWDOUHYHQXHV

2ULFD/LPLWHG  35 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±&DSLWDOPDQDJHPHQW )RUWKH\HDUHQGHG6HSWHPEHU

 6HJPHQWUHSRUW FRQWLQXHG 

Recognition and measurement

Sales revenue

([WHUQDOVDOHVDUHPHDVXUHGDWWKHIDLUYDOXHRIWKHFRQVLGHUDWLRQUHFHLYHGRUUHFHLYDEOHQHWRIUHWXUQVWUDGHGLVFRXQWVDQGYROXPH UHEDWHV([WHUQDOVDOHVDUHUHFRJQLVHGZKHQWKHVLJQLILFDQWULVNVDQGUHZDUGVRIRZQHUVKLSDUHWUDQVIHUUHGWRWKHSXUFKDVHUUHFRYHU\ RIWKHFRQVLGHUDWLRQLVSUREDEOHWKHDVVRFLDWHGFRVWVDQGSRVVLEOHUHWXUQRIJRRGVFDQEHHVWLPDWHGUHOLDEO\WKHUHLVQRFRQWLQXLQJ PDQDJHPHQWLQYROYHPHQWZLWKWKHJRRGVDQGWKHDPRXQWRIUHYHQXHFDQEHPHDVXUHGUHOLDEO\

Other income

3URILWVDQGORVVHVIURPVDOHRIEXVLQHVVHVFRQWUROOHGHQWLWLHVDQGRWKHUQRQFXUUHQWDVVHWVDUHUHFRJQLVHGZKHQWKHUHLVDVLJQHG FRQWUDFWRIVDOHDQGQRFRQWLQXLQJPDQDJHPHQWLQYROYHPHQW'LYLGHQGVDUHUHFRJQLVHGLQWKH,QFRPH6WDWHPHQWZKHQWKHULJKWWR UHFHLYHWKHPLVHVWDEOLVKHG

2WKHULQFRPHLQFOXGHVSURILWRQVDOHRISURSHUW\SODQWDQGHTXLSPHQWSURILWIURPWKHVDOHRIEXVLQHVVHVDQGFRQWUROOHGHQWLWLHVIRUHLJQ FXUUHQF\JDLQV ORVVHV DQGUR\DOWLHV

 (DUQLQJVSHUVKDUH (36 &RQVROLGDWHG   P  P L $VUHSRUWHGLQWKH,QFRPH6WDWHPHQW (DUQLQJVXVHGLQWKHFDOFXODWLRQRIEDVLF(36DWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUV RI2ULFD/LPLWHG 1HW ORVV SURILWIRUWKHSHULRGIURPFRQWLQXLQJRSHUDWLRQV   /HVV1HWSURILWIRUWKHSHULRGDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV   7RWDO  

1XP EH U RIV KDU H V :HLJKWHGDYHUDJHQXPEHURIVKDUHVXVHGLQWKHFDOFXODWLRQ

1XPEHUIRUEDVLFHDUQLQJVSHUVKDUH   (IIHFWRIGLOXWLYHVKDUHRSWLRQVDQGULJKWV   1XPEHUIRUGLOXWHGHDUQLQJVSHUVKDUH  

7KHZ HLJKWHGDYHUDJHQXPEHURIQRQGLOXWLYHRSWLRQVDQGULJKWVWKDWKDYHQRWEHHQLQFOXGHGLQ WKHFDOFXODWLRQRIGLOXWHGHDUQLQJVSHUVKDUH  

&HQWV &HQWV  SHUVKDUH SHUVKDUH 7RWDODWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUVRI2ULFD/LPLWHG %DVLFHDUQLQJVSHUVKDUH   'LOXWHGHDUQLQJVSHUVKDUH  

&RQVROLGDWHG LL $GMXVWHGIRULQGLYLGXDOO\VLJQLILFDQWLWHPV   P P (DUQLQJVXVHGLQWKHFDOFXODWLRQRIEDVLF(36DGMXVWHGIRULQGLYLGXDOO\VLJQLILFDQW LWHPVDWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUVRI2ULFD/LPLWHG

1HW ORVV SURILWIRUWKHSHULRG   /HVV1HWSURILWIRUWKHSHULRGDWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV   $GMXVWHGIRULQGLYLGXDOO\VLJQLILFDQWLWHPV UHIHUWRQRWH G    7RWDODGMXVWHG  

&HQWV &HQWV SHUVKDUH SHUVKDUH 7RWDODWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUVRI2ULFD/LPLWHGEHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV %DVLFHDUQLQJVSHUVKDUH   'LOXWHGHDUQLQJVSHUVKDUH 2ULFD/LPLWHG   36  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±&DSLWDOPDQDJHPHQW )RUWKH\HDUHQGHG6HSWHPEHU

6HFWLRQ%&DSLWDOPDQDJHPHQW

2ULFD¶VREMHFWLYHVZKHQPDQDJLQJFDSLWDO QHWGHEWDQGWRWDOHTXLW\ DUHWRVDIHJXDUGWKH*URXS¶VDELOLW\WRFRQWLQXHDVDJRLQJ FRQFHUQDQGWRHQVXUHWKDWWKHFDSLWDOVWUXFWXUHHQKDQFHVSURWHFWVDQGEDODQFHVILQDQFLDOIOH[LELOLW\DJDLQVWPLQLPLVLQJWKHFRVWRI FDSLWDO7KLVVHFWLRQRXWOLQHVWKHSULQFLSDOFDSLWDOPDQDJHPHQWLQLWLDWLYHVWKDWKDYHEHHQXQGHUWDNHQFXUUHQW\HDUGULYHUVRIWKH *URXS¶VFDVKIORZVDVZHOODVWKHNH\RSHUDWLQJDVVHWVXVHGDQGOLDELOLWLHVLQFXUUHGWRVXSSRUWILQDQFLDOSHUIRUPDQFH 1HWGHEW ,QRUGHUWRPDLQWDLQDQDSSURSULDWHFDSLWDOVWUXFWXUHWKH*URXSPD\DGMXVWWKHDPRXQWRIGLYLGHQGVSDLGWRVKDUHKROGHUVXWLOLVHD GLYLGHQGUHLQYHVWPHQWSODQUHWXUQFDSLWDOWRVKDUHKROGHUVVXFKDVDVKDUHEX\EDFNRULVVXHQHZHTXLW\LQDGGLWLRQWRLQFXUULQJDQ DSSURSULDWHOHYHORIERUURZLQJV&XUUHQWO\2ULFDPDLQWDLQVDGLYLGHQGSD\RXWUDWLRSROLF\DQGH[SHFWVWKHWRWDOSD\RXWUDWLRWREHLQWKH UDQJHRIWRSHUFHQWRIXQGHUO\LQJHDUQLQJV,WLVDOVRH[SHFWHGWKDWWKHWRWDOGLYLGHQGSDLGHDFK\HDUZLOOEHZHLJKWHGWRZDUGVWKH ILQDOGLYLGHQG

2ULFDPRQLWRUVGHEWFDSDFLW\DJDLQVWDQXPEHURINH\FUHGLWPHWULFVSULQFLSDOO\WKHJHDULQJUDWLR QHWGHEWGLYLGHGE\GHEWSOXVHTXLW\  DQGWKHLQWHUHVWFRYHUUDWLR (%,7H[FOXGLQJLQGLYLGXDOO\VLJQLILFDQWLWHPVGLYLGHGE\QHWILQDQFLQJFRVWVDGMXVWHGIRUFDSLWDOLVHG ERUURZLQJFRVWV 7KHVHUDWLRVWRJHWKHUZLWKSHUIRUPDQFHPHDVXUHFULWHULDGHWHUPLQHGE\6WDQGDUG 3RRU¶VDUHWDUJHWHGLQVXSSRUWRI WKHPDLQWHQDQFHRIDQLQYHVWPHQWJUDGHFUHGLWUDWLQJZKLFKIDFLOLWDWHVDFFHVVWRERUURZLQJVIURPDUDQJHRIVRXUFHV

7KH*URXS¶VFXUUHQWWDUJHWOHYHOIRUJHDULQJLVWRDQGLQWHUHVWFRYHULVWLPHVRUJUHDWHU5DWLRVPD\PRYHRXWVLGHRIWKHVH WDUJHWUDQJHVIRUUHODWLYHO\VKRUWSHULRGVRIWLPHDIWHUPDMRUDFTXLVLWLRQVRURWKHUVLJQLILFDQWWUDQVDFWLRQV

,QDGGLWLRQWKHJHDULQJDQGLQWHUHVWFRYHUUDWLRVDUHPRQLWRUHGWRHQVXUHDQDGHTXDWHEXIIHUDJDLQVWFRYHQDQWOHYHOVDSSOLFDEOHWRWKH YDULRXVILQDQFLQJIDFLOLWLHV

7KHJHDULQJUDWLRLVFDOFXODWHGDVIROORZ V &RQVROLGDWHG

  P P

,QWHUHVWEHDULQJOLDELOLWLHV UHIHUWRQRWHD   OHVVFDVKDQGFDVKHTXLYDOHQWV UHIHUWRQRWHE    

1HWGHEW   7RWDOHTXLW\   1HWGHEWDQGWRWDOHTXLW\   *HDULQJUDWLR    7KHLQWHUHVWUDWLRLVFDOFXODWHGDVIROORZ V (%,7 H[FOXGLQJLQGLYLGXDOO\VLJQLILFDQWLWHPV  UHIHUWRQRWHE   1HWILQDQFLQJFRVWVH[FOXGLQJXQZ LQGLQJRIGLVFRXQWRQSURYLVLRQV   8QZ LQGLQJRIGLVFRXQWRQSURYLVLRQV   &DSLWDOLVHGERUURZ LQJFRVWV  

*URVVILQDQFLQJFRVWV  

,QWHUHVWFRYHUUDWLR WLPHV  

D ,QWHUHVWEHDULQJOLDELOLWLHV 2SHQLQJ 1RQFDVK 1HWFDVK &ORVLQJ &XUUHQW %DODQFH PRYHPHQWV PRYHPHQWV %DODQFH 8QVHFXUHG 3ULYDWH3ODFHPHQW         ([SRUWILQDQFHIDFLOLW\         2WKHUORDQV                /HDVHOLDELOLWLHV         1RQFXUUHQW 8QVHFXUHG 3ULYDWH3ODFHPHQW         ([SRUWILQDQFHIDFLOLW\         %DQNORDQV         2WKHUORDQV     /HDVHOLDELOLWLHV             

7RWDO          2ULFD/LPLWHGSURYLGHVJXDUDQWHHVRQWKHVHIDFLOLWLHVUHIHUWRQRWHIRUIXUWKHUGHWDLOV  P P RISURSHUW\SODQWDQGHTXLSPHQWLVSOHGJHGDVVHFXULW\IRUILQDQFHOHDVHV,QWKHHYHQWRIGHIDXOWE\2ULFD  WKHULJKWVWRWKHOHDVHGDVVHWVWUDQVIHUWRWKHOHVVRU

'XULQJWKHFXUUHQWDQGSULRU\HDUWKHUHZHUHQRGHIDXOWVRUEUHDFKHVRIFRYHQDQWVRQDQ\ORDQV 

2ULFD/LPLWHG  37 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±&DSLWDOPDQDJHPHQW )RUWKH\HDUHQGHG6HSWHPEHU

1HWGHEW FRQWLQXHG  &RQVROLGDWHG   P P

E 1RWHVWRWKHVWDWHPHQWRIFDVKIORZV 5HFRQFLOLDWLRQRIFDVK &DVKDWWKHHQGRIWKH\HDUFRPSULVHV &DVKDQGFDVKHTXLYDOHQWV   %DQNRYHUGUDIW    

5HFRQFLOLDWLRQRI ORVV SURILWDIWHULQFRPHWD[WRQHWFDVKIORZV

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

 LQFUHDVH LQWUDGHDQGRWKHUUHFHLYDEOHV    LQFUHDVH LQLQYHQWRULHV  

GHFUHDVHLQQHWGHIHUUHGWD[HV   LQFUHDVH GHFUHDVH LQSD\DEOHVDQGSURYLVLRQV   LQFUHDVH GHFUHDVH LQLQFRPHWD[HVSD\DEOH   1HWFDVKIORZ VIURPRSHUDWLQJDFWLYLWLHV  

Recognition and Measurement

Cash and cash equivalents

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

Interest bearing liabilities

,QWHUHVWEHDULQJOLDELOLWLHVDUHLQLWLDOO\UHFRJQLVHGDWIDLUYDOXHOHVVDWWULEXWDEOHWUDQVDFWLRQFRVWV6XEVHTXHQWWRLQLWLDOUHFRJQLWLRQ LQWHUHVWEHDULQJOLDELOLWLHVDUHVWDWHGDWDPRUWLVHGFRVWZLWKDQ\GLIIHUHQFHEHWZHHQFRVWDQGUHGHPSWLRQYDOXHEHLQJUHFRJQLVHGLQWKH ,QFRPH6WDWHPHQWRYHUWKHSHULRGRIWKHOLDELOLWLHVRQDQHIIHFWLYHLQWHUHVWEDVLVXQOHVVWKH\DUHOLDELOLWLHVGHVLJQDWHGLQDIDLUYDOXH UHODWLRQVKLSLQZKLFKFDVHWKH\FRQWLQXHWREHPHDVXUHGDWIDLUYDOXH UHIHUWRQRWHD 

$PRUWLVHGFRVWLVFDOFXODWHGE\WDNLQJLQWRDFFRXQWDQ\LVVXHFRVWVDQGDQ\GLVFRXQWRUSUHPLXPRQLVVXDQFH*DLQVDQGORVVHVDUH UHFRJQLVHGLQWKH,QFRPH6WDWHPHQWLQWKHHYHQWWKDWWKHOLDELOLWLHVDUHGHUHFRJQLVHG

Borrowing costs

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

2ULFD/LPLWHG 38  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±&DSLWDOPDQDJHPHQW )RUWKH\HDUHQGHG6HSWHPEHU

&RQWULEXWHGHTXLW\DQGUHVHUYHV  D &RQWULEXWHG(TXLW\

0RYHPHQWVLQLVVXHGDQGIXOO\SDLGVKDUHVRI2ULFDVLQFH2FWREHUZ HUHDVIROORZ V 1XPEHU ,VVXH 'HWDLOV 'DWH RIVKDUHV SULFH P 2UGLQDU\VKDUHV 2SHQLQJEDODQFHRIVKDUHVLVVXHG 2FW   6KDUHVLVVXHGXQGHUWKH2ULFDGLYLGHQGUHLQYHVWPHQWSODQ 'HF    6KDUHVLVVXHGXQGHUWKH2ULFDGLYLGHQGUHLQYHVWPHQWSODQ -XO    'HIHUUHGVKDUHVLVVXHGWRVHWWOH6KRUW7HUP,QFHQWLYH  

6KDUHVLVVXHGXQGHUWKH2ULFD*((63SODQ   %DODQFHDWWKHHQGRI\HDU 6HS  

6KDUHVLVVXHGXQGHUWKH2ULFDGLYLGHQGUHLQYHVWPHQWSODQ 'HF    6KDUHVLVVXHGXQGHUWKH2ULFDGLYLGHQGUHLQYHVWPHQWSODQ -XO    'HIHUUHGVKDUHVLVVXHGWRVHWWOH6KRUW7HUP,QFHQWLYH  6KDUHVLVVXHGXQGHUWKH2ULFD*((63SODQ   %DODQFHDWWKHHQGRIWKH\HDU 6HS    E 5HVHUYHV

Recognition and Measurement

Foreign currency translation reserve: 7KHIRUHLJQFXUUHQF\WUDQVODWLRQUHVHUYHUHFRUGVWKHIRUHLJQFXUUHQF\GLIIHUHQFHVDULVLQJIURPWKH WUDQVODWLRQRIIRUHLJQRSHUDWLRQVWKHWUDQVODWLRQRIWUDQVDFWLRQVWKDWKHGJHQHWLQYHVWPHQWVLQDIRUHLJQRSHUDWLRQRUWKHWUDQVODWLRQRI IRUHLJQFXUUHQF\PRQHWDU\LWHPVIRUPLQJSDUWRIWKHQHWLQYHVWPHQWLQDIRUHLJQRSHUDWLRQ

Cash flow hedge reserve: 7KHDPRXQWLQWKHFDVKIORZKHGJHUHVHUYHUHSUHVHQWVWKHFXPXODWLYHQHWFKDQJHLQWKHIDLUYDOXHRIFDVK IORZKHGJLQJLQVWUXPHQWVUHODWHGWRKHGJHGWUDQVDFWLRQVWKDWKDYHQRW\HWRFFXUUHG

Other reserves:2WKHUUHVHUYHVUHSUHVHQWVVKDUHEDVHGSD\PHQWVUHVHUYHVDQGHTXLW\UHVHUYHVDULVLQJIURPWKHSXUFKDVHRIQRQ FRQWUROOLQJLQWHUHVWV

F 'LYLGHQGV &RQVROLGDWHG   P P 'LYLGHQGVSDLGRUGHFODUHGLQUHVSHFWRIWKH\HDUHQGHG6HSWHPEHUZ HUH 2UGLQDU\VKDUHV LQWHULPGLYLGHQGRIFHQWVSHUVKDUHIUDQNHGDWSDLG-XO\  LQWHULPGLYLGHQGRIFHQWVSHUVKDUHXQIUDQNHGSDLG-XO\  ILQDOGLYLGHQGRIFHQWVSHUVKDUHIUDQNHGDWSDLG'HFHPEHU  ILQDOGLYLGHQGRIFHQWVSHUVKDUHXQIUDQNHGSDLG'HFHPEHU 

'LYLGHQGVSDLGLQFDVKRUVDWLVILHGE\WKHLVVXHRIVKDUHVXQGHUWKHGLYLGHQG UHLQYHVWPHQWSODQ '53 GXULQJWKH\HDUZ HUHDVIROORZ V SDLGLQFDVK   '53VDWLVILHGE\LVVXHRIVKDUHV   



 6LQFHWKHHQGRIWKHILQDQFLDO\HDUWKH'LUHFWRUVGHFODUHGWKHIROORZLQJGLYLGHQG

)LQDOGLYLGHQGRQRUGLQDU\VKDUHVRIFHQWVSHUVKDUHXQIUDQNHGSD\DEOH'HFHPEHU7RWDOIUDQNLQJFUHGLWVUHODWHGWRWKLV GLYLGHQGDUHQLO QLO 

7KHILQDQFLDOHIIHFWRIWKHILQDOGLYLGHQGRQRUGLQDU\VKDUHVKDVQRWEHHQEURXJKWWRDFFRXQWLQWKHILQDQFLDOVWDWHPHQWVIRUWKH\HDU HQGHG6HSWHPEHUKRZHYHUZLOOEHUHFRJQLVHGLQWKHILQDQFLDOVWDWHPHQWV

)UDQNLQJFUHGLWV )UDQNLQJFUHGLWVDYDLODEOHDWWKHFRUSRUDWHWD[UDWHDIWHUDOORZLQJIRUWD[SD\DEOHLQUHVSHFWRIWKHFXUUHQW\HDU VSURILWDQGWKH SD\PHQWRIWKHILQDOGLYLGHQGIRUDUHPLOOLRQ PLOOLRQ 

 2ULFD/LPLWHG  39 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

6HFWLRQ&2SHUDWLQJDVVHWVDQGOLDELOLWLHV

7KLVVHFWLRQKLJKOLJKWVFXUUHQW\HDUGULYHUVRIWKH*URXS¶VRSHUDWLQJDQGLQYHVWLQJFDVKIORZVDVZHOODVWKHNH\RSHUDWLQJDVVHWV XVHGDQGOLDELOLWLHVLQFXUUHGWRVXSSRUWGHOLYHULQJILQDQFLDOSHUIRUPDQFH   :RUNLQJFDSLWDO  D 7UDGHZRUNLQJFDSLWDO  7UDGHZRUNLQJFDSLWDOLQFOXGHVUHFHLYDEOHVDQGSD\DEOHVWKDWDULVHIURPQRUPDOWUDGLQJFRQGLWLRQV7KH*URXSFRQWLQXRXVO\ORRNVWR LPSURYHZRUNLQJFDSLWDOHIILFLHQF\LQRUGHUWRPD[LPLVHRSHUDWLQJFDVKIORZ &RQVROLGDWHG   P P ,QYHQWRULHV L   7UDGHUHFHLYDEOHV LL   7UDGHSD\DEOHV LLL   7UDGHZ RUNLQJFDSLWDO   

L ,QYHQWRULHV 7KHFODVVLILFDWLRQRILQYHQWRULHVLVGHWDLOHGEHORZ  &RQVROLGDWHG   P P 5DZ PDWHULDOV   :RUNLQSURJUHVV   )LQLVKHGJRRGV      

Recognition and Measurement

,QYHQWRULHVDUHYDOXHGDWWKHORZHURIFRVWDQGQHWUHDOLVDEOHYDOXH,QYHQWRULHVKDYHEHHQVKRZQQHWRISURYLVLRQIRULPSDLUPHQWRI PLOOLRQ PLOOLRQ 1HWUHDOLVDEOHYDOXHLVWKHHVWLPDWHGVHOOLQJSULFHLQWKHRUGLQDU\FRXUVHRIEXVLQHVVOHVVWKH HVWLPDWHGFRVWRIFRPSOHWLRQDQGVHOOLQJH[SHQVHV&RVWLVEDVHGRQDILUVWLQILUVWRXWRUZHLJKWHGDYHUDJHEDVLV)RUPDQXIDFWXUHG JRRGVFRVWLQFOXGHVGLUHFWPDWHULDODQGIL[HGRYHUKHDGVEDVHGRQQRUPDORSHUDWLQJFDSDFLW\)RUSXUFKDVHGJRRGVFRVWLVQHWFRVW LQWRVWRUH

LL 7UDGHUHFHLYDEOHV 7KHDJHLQJRIWUDGHUHFHLYDEOHVDQGDOORZ DQFHIRULPSDLUPHQWLVGHWDLOHGEHORZ 

&RQVROLGDWHG &RQVROLGDWHG    

*URVV $OORZ DQFH *URVV $OORZ DQFH P P P P 1RWSDV WGXH     3DVWGXHGD\V     3DVWGD\V        

Recognition and Measurement

7KHFROOHFWDELOLW\RIWUDGHUHFHLYDEOHVLVDVVHVVHGFRQWLQXRXVO\DQGDWEDODQFHGDWHVSHFLILFDOORZDQFHVDUHPDGHIRUDQ\GRXEWIXOWUDGH UHFHLYDEOHVEDVHGRQDUHYLHZRIDOORXWVWDQGLQJDPRXQWVDW\HDUHQG7KHQHWFDUU\LQJDPRXQWRIWUDGHDQGRWKHUUHFHLYDEOHV DSSUR[LPDWHVWKHLUIDLUYDOXHV$ULVNDVVHVVPHQWSURFHVVLVXVHGIRUDOODFFRXQWVZLWKDVWRSFUHGLWSURFHVVLQSODFHIRUPRVWORQJ RYHUGXHDFFRXQWV

   2ULFD/LPLWHG 40  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

:RUNLQJFDSLWDO FRQWLQXHG  LLL 7UDGHSD\DEOHV

Recognition and Measurement

7UDGHSD\DEOHVLQFOXGLQJDFFUXDOVIRUFRVWVQRW\HWELOOHGDUHUHFRJQLVHGZKHQWKH*URXSEHFRPHVREOLJHGWRPDNHIXWXUHSD\PHQWV DVDUHVXOWRIWKHSXUFKDVHRIJRRGVRUDVVHUYLFHVDUHSURYLGHG7UDGHSD\DEOHVDUHQRUPDOO\VHWWOHGZLWKLQGD\VIURPLQYRLFHGDWH RUZLWKLQWKHDJUHHGSD\PHQWWHUPVZLWKWKHVXSSOLHU7UDGHSD\DEOHVDUHQRQLQWHUHVWEHDULQJDQGLQFOXGHOLDELOLWLHVLQUHVSHFWRIWUDGH ILQDQFLQJZLWKLQWKHQRUPDORSHUDWLQJF\FOHRIWKHEXVLQHVV7KHFDUU\LQJDPRXQWRIWUDGHSD\DEOHVDSSUR[LPDWHVWKHLUIDLUYDOXHVGXHWR WKHLUVKRUWWHUPQDWXUH

E  1RQWUDGHZRUNLQJFDSLWDO  1RQWUDGHZRUNLQJFDSLWDOLQFOXGHVDOORWKHUUHFHLYDEOHVDQGSD\DEOHVQRWUHODWHGWRSXUFKDVHRIJRRGVDQGLVUHFRJQLVHGQHWRI SURYLVLRQVIRULPSDLUPHQWRIPLOOLRQ PLOOLRQ 

,QWKHFXUUHQW\HDURWKHUQRQFXUUHQWDVVHWVLQFOXGHDUHFHLYDEOHRIPLOOLRQIRUDPRXQWVSDLGWRWKH$XVWUDOLDQ7D[2IILFH $72 LQ )<7KLVDPRXQWUHSUHVHQWVRIWKHSULPDU\WD[SD\DEOHDVSHUDPHQGHGDVVHVVPHQWVZKLFKKDYHEHHQLVVXHGE\WKH$72LQ UHODWLRQWRWKH$XVWUDOLDQWD[DXGLWVDVGLVFORVHGLQQRWH

Recognition and Measurement

2WKHUUHFHLYDEOHVDUHFDUULHGDWDPRXQWVGXH3D\PHQWWHUPVYDU\$ULVNDVVHVVPHQWSURFHVVLVXVHGIRUDOODFFRXQWVZLWKDVWRS FUHGLWDQGIROORZXSSURFHVVLQSODFHIRUPRVWORQJRYHUGXHDFFRXQWV,QWHUHVWPD\EHFKDUJHGZKHUHWKHWHUPVRIUHSD\PHQWH[FHHG DJUHHGWHUPV

7KHFROOHFWDELOLW\RIRWKHUUHFHLYDEOHVLVDVVHVVHGDWEDODQFHVKHHWGDWHDQGVSHFLILFDOORZDQFHVDUHPDGHIRUDQ\GRXEWIXOUHFHLYDEOHV EDVHGRQDUHYLHZRIDOORXWVWDQGLQJDPRXQWVDW\HDUHQG7KHUHDUHQRLQGLYLGXDOO\VLJQLILFDQWUHFHLYDEOHVWKDWKDYHKDGUHQHJRWLDWHG WHUPVWKDWZRXOGRWKHUZLVHZLWKRXWWKDWUHQHJRWLDWLRQKDYHEHHQSDVWGXHRULPSDLUHG

Critical accounting judgements and estimates

,QWKHFRXUVHRIQRUPDOWUDGLQJDFWLYLWLHVPDQDJHPHQWXVHVLWVMXGJHPHQWLQHVWDEOLVKLQJWKHFDUU\LQJYDOXHRIYDULRXV HOHPHQWVRIZRUNLQJFDSLWDO±SULQFLSDOO\LQYHQWRU\DQGDFFRXQWVUHFHLYDEOH3URYLVLRQVDUHHVWDEOLVKHGIRUREVROHWHRUVORZ PRYLQJLQYHQWRULHVDQGEDGRUGRXEWIXOUHFHLYDEOHV$FWXDOH[SHQVHVLQIXWXUHSHULRGVPD\EHGLIIHUHQWIURPWKHSURYLVLRQV HVWDEOLVKHGDQGDQ\VXFKGLIIHUHQFHVZRXOGLPSDFWIXWXUHHDUQLQJVRIWKH*URXS

 3URYLVLRQV &RQVROLGDWHG   P P &XUUHQW (PSOR\HHHQWLWOHPHQWV   

(QYLURQPHQWDODQGGHFRPPLVVLRQLQJ    2WKHU     1RQFXUUHQW   (PSOR\HHHQWLWOHPHQWV   5HWLUHPHQWEHQHILWREOLJDWLRQV VHHQRWHF    (QYLURQPHQWDODQGGHFRPPLVVLRQLQJ    2WKHU    

 P P Z DVH[SHQVHGWRWKH,QFRPH6WDWHPHQWLQUHODWLRQWRHPSOR\HHHQWLWOHPHQWVGXULQJWKH\HDU  3D\PHQWVRIP P Z HUHPDGHGXULQJWKH\HDULQUHODWLRQWRHQYLURQPHQWDODQGGHFRPPLVVLRQLQJSURYLVLRQV

Recognition and Measurement

$SURYLVLRQLVUHFRJQLVHGZKHQWKH*URXSKDVDOHJDORUFRQVWUXFWLYHREOLJDWLRQDVDUHVXOWRIDSDVWHYHQWLWLVSUREDEOHWKDWDIXWXUH VDFULILFHRIHFRQRPLFEHQHILWVZLOOEHUHTXLUHGWRVHWWOHWKHREOLJDWLRQDQGDUHOLDEOHHVWLPDWHRIWKHOLDELOLW\FDQEHDVVHVVHG7KH DPRXQWRIWKHSURYLVLRQLVGHWHUPLQHGE\GLVFRXQWLQJWKHH[SHFWHGIXWXUHFDVKIORZVDWDSUHWD[UDWHWKDWUHIOHFWVWKHFXUUHQWPDUNHW DVVHVVPHQWVRIWKHWLPHYDOXHRIPRQH\DQGWKHULVNVVSHFLILFWRWKHOLDELOLW\7KHXQZLQGLQJRIWKHGLVFRXQWLVUHFRJQLVHGDVDILQDQFH FRVW

2ULFD/LPLWHG  41 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

3URYLVLRQV FRQWLQXHG 

Employee entitlements

$OLDELOLW\IRUHPSOR\HHHQWLWOHPHQWVLVUHFRJQLVHGIRUWKHDPRXQWH[SHFWHGWREHSDLGZKHUHWKH*URXSKDVDSUHVHQWOHJDORU FRQVWUXFWLYHREOLJDWLRQWRSD\WKLVDPRXQWDVDUHVXOWRISDVWVHUYLFHSURYLGHGE\WKHHPSOR\HHDQGWKDWREOLJDWLRQFDQEHUHOLDEO\ PHDVXUHG/LDELOLWLHVIRUHPSOR\HHHQWLWOHPHQWVZKLFKDUHQRWH[SHFWHGWREHVHWWOHGZLWKLQWZHOYHPRQWKVRIEDODQFHVKHHWGDWHDUH DFFUXHGDWWKHSUHVHQWYDOXHRIIXWXUHDPRXQWVH[SHFWHGWREHSDLG

Decommissioning

,QFHUWDLQFLUFXPVWDQFHVWKH*URXSKDVDQREOLJDWLRQWRGLVPDQWOHDQGUHPRYHDQDVVHWDQGWRUHVWRUHWKHVLWHRQZKLFKLWLVORFDWHG 7KHSUHVHQWYDOXHRIWKHHVWLPDWHGFRVWVRIGLVPDQWOLQJDQGUHPRYLQJWKHDVVHWDQGUHVWRULQJWKHVLWHRQZKLFKLWLVORFDWHGDUH UHFRJQLVHGDVDQDVVHWZLWKLQSURSHUW\SODQWDQGHTXLSPHQWDQGGHSUHFLDWHGRQDVWUDLJKWOLQHEDVLVRYHULWVHVWLPDWHGXVHIXOOLIH$ FRUUHVSRQGLQJSURYLVLRQLVUDLVHGZKHUHDOHJDORUFRQVWUXFWLYHREOLJDWLRQH[LVWV

$WHDFKUHSRUWLQJGDWHWKHOLDELOLW\LVUHPHDVXUHGLQOLQHZLWKFKDQJHVLQGLVFRXQWUDWHVWLPLQJDQGHVWLPDWHGFDVKIORZV$Q\FKDQJHV LQWKHOLDELOLW\DUHDGGHGRUGHGXFWHGIURPWKHUHODWHGDVVHWRWKHUWKDQWKHXQZLQGLQJRIWKHGLVFRXQWZKLFKLVUHFRJQLVHGDVDILQDQFH FRVW

Environmental

(VWLPDWHGFRVWVIRUWKHUHPHGLDWLRQRIVRLOJURXQGZDWHUDQGXQWUHDWHGZDVWHDUHUHFRJQLVHGZKHQWKHWKHUHLVDOHJDORUFRQVWUXFWLYH REOLJDWLRQWRUHPHGLDWHDQGWKHDVVRFLDWHGFRVWVFDQEHUHOLDEO\HVWLPDWHG7KHWLPLQJRIUHFRJQLWLRQRIWKHSURYLVLRQJHQHUDOO\ FRLQFLGHVZLWKWKHFRPPLWPHQWWRDUHJXODWRU\RUIRUPDOUHPHGLDWLRQSODQ

:KHUHWKHFRVWUHODWHVWRODQGKHOGIRUUHVDOHWKHQWRWKHH[WHQWWKDWWKHH[SHFWHGUHDOLVDWLRQH[FHHGVERWKWKHERRNYDOXHRIWKHODQG DQGWKHHVWLPDWHGFRVWRIUHPHGLDWLRQWKHFRVWLVFDSLWDOLVHGDVSDUWRIWKHKROGLQJYDOXHRIWKDWODQGRWKHUZLVHLWLVH[SHQVHG

7KHDPRXQWRISURYLVLRQUHIOHFWVWKHEHVWHVWLPDWHRIWKHH[SHQGLWXUHUHTXLUHGWRVHWWOHWKHREOLJDWLRQKDYLQJUHJDUGWRDUDQJHRI SRWHQWLDOVFHQDULRVLQSXWIURPVXEMHFWPDWWHUH[SHUWVRQDSSURSULDWHUHPHGLDWLRQWHFKQLTXHVDQGUHOHYDQWWHFKQRORJLFDODGYDQFHV

Individually significant items

Botany Groundwater Remediation

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¶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¶VEHVWHVWLPDWHIRUWKHSURYLVLRQ7KLVFKDQJHLQHVWLPDWHUHVXOWHGLQDQLQFUHDVHFRPSDUHG WRWKH\HDUHQGHG6HSWHPEHUWRWKHHQYLURQPHQWDOSURYLVLRQE\PLOOLRQIRUDFDUU\LQJYDOXHRIPLOOLRQ2ULFDKDV UHIOHFWHGWKLVLQFUHDVHLQWKHSURYLVLRQLQWKHILQDQFLDOUHSRUW    

2ULFD/LPLWHG 42  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

3URYLVLRQV FRQWLQXHG   2ULFDZLOOFRQWLQXHWRDVVHVVWKHDVVXPSWLRQVXVHGWRHVWLPDWHWKHHFRQRPLFRXWIORZVDQGZLOOPDLQWDLQHQJDJHPHQWZLWKH[SHUWVWR VHHNVROXWLRQV  Critical accounting judgements and estimates

Provisions for other sites

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

Contingent environmental liabilities

&RQWLQJHQWOLDELOLWLHVDUHSRVVLEOHREOLJDWLRQVZKRVHH[LVWHQFHZLOORQO\EHFRQILUPHGE\IXWXUHHYHQWVQRWZKROO\ZLWKLQWKHFRQWURORI WKH*URXS$FRQWLQJHQWOLDELOLW\PD\DOVREHDSUHVHQWREOLJDWLRQWKDWLVQRWUHFRJQLVHGDVLWLVQRWSUREDEOHWKDWDQRXWIORZRI UHVRXUFHVZLOOEHUHTXLUHGRUWKHDPRXQWRIWKHREOLJDWLRQFDQQRWEHUHOLDEO\PHDVXUHG

(QYLURQPHQWDOFRQWLQJHQWOLDELOLWLHV

,QUHVSHFWRIKLVWRULFDODQGFXUUHQWRSHUDWLRQVFHUWDLQVLWHVRZQHGRUXVHGE\WKH*URXSPD\UHTXLUHIXWXUHUHPHGLDWLRQDFWLRQV)RU VLWHVZKHUHWKHUHPHGLDWLRQDFWLRQVDUHLGHQWLILHGDJUHHGZLWKUHJXODWRU\DXWKRULWLHVDQGUHOLDEOHHVWLPDWHVDUHSRVVLEOHSURYLVLRQV IRUHVWLPDWHGUHJXODWRU\DQGUHPHGLDWLRQFRVWVKDYHEHHQUHFRJQLVHG

6LWHVZLWKVLJQLILFDQWXQFHUWDLQWLHVUHODWLQJWRWKHIROORZLQJDUHGLVFORVHGDVFRQWLQJHQWOLDELOLWLHV

x 6LWHVZKHUHFRQWDPLQDWLRQLVNQRZQRUOLNHO\WRH[LVWKRZHYHUWKHLPSDFWFDQQRWEHUHOLDEO\PHDVXUHGGXHWRXQFHUWDLQWLHVUHODWHG WRWKHH[WHQWRI2ULFD¶VUHPHGLDWLRQREOLJDWLRQVRUWKHUHPHGLDWLRQWHFKQLTXHVWKDWPD\EHXWLOLVHGRU x 6LWHVZKHUHNQRZQFRQWDPLQDWLRQH[LVWVEXWGRHVQRWSRVHDFXUUHQWWKUHDWWRKXPDQKHDOWKRUWKHHQYLURQPHQWWKHUHIRUHQR UHJXODWRU\RUIRUPDOUHPHGLDWLRQDFWLRQLVSUREDEOH  $Q\FRVWVDVVRFLDWHGZLWKWKHVHPDWWHUVDUHH[SHQVHGDVLQFXUUHG

%RWDQ\±UHPHGLDWLRQRIVRXUFHFRQWDPLQDWLRQ

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

&RQVROLGDWHG   P P %RWDQ\*URXQGZ DWHUUHPHGLDWLRQ   %RWDQ\ +&% Z DVWH   %XUUXSGHFRPPLVVLRQLQJ   'HHU3DUNUHPHGLDWLRQ  





2ULFD/LPLWHG  43 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

 3URSHUW\SODQWDQGHTXLSPHQW /DQG 0DFKLQHU\

EXLOGLQJVDQG SODQWDQG LPSURYHPHQWV HTXLSPHQW 7RWDO &RQVROLGDWHG P P P  &RVW   

$FFXPXODWHGGHSUHFLDWLRQ    7RWDOFDUU\LQJYDOXH   

0RY HPHQW &DUU\LQJDPRXQWDWWKHEHJLQQLQJRIWKH\HDU    $GGLWLRQV    'LVSRVDOV     'LVSRVDOVWKURXJKGLVSRVDORIHQWLWLHV     'HSUHFLDWLRQH[SHQVH     ,PSDLUPHQWH[SHQVH VHHQRWH     )RUHLJQFXUUHQF\H[FKDQJHGLIIHUHQFHV      &DUU\LQJDPRXQWDWWKHHQGRIWKH\HDU   

 &RVW    $FFXPXODWHGLPSDLUPHQWORVVHV    $FFXPXODWHGGHSUHFLDWLRQ    7RWDOFDUU\LQJYDOXH     0RY HPHQW &DUU\LQJDPRXQWDWWKHEHJLQQLQJRIWKH\HDU     $GGLWLRQV     $GGLWLRQVWKURXJKDFTXLVLWLRQVRIHQWLWLHV VHHQRWH    'LVSRVDOV      'HSUHFLDWLRQH[SHQVH     ,PSDLUPHQWH[SHQVH VHHQRWH      )RUHLJQFXUUHQF\H[FKDQJHGLIIHUHQFHV      &DUU\LQJDPRXQWDWWKHHQGRIWKH\HDU    

,QFOXGHGLQWKHDERYHDUHVLJQLILFDQWDVVHWVXQGHUFRQVWUXFWLRQ %XUUXSSODQW RIPLOOLRQ PLOOLRQ 

Recognition and Measurement

3URSHUW\SODQWDQGHTXLSPHQWLVVWDWHGDWFRVWOHVVDFFXPXODWHGGHSUHFLDWLRQDQGLPSDLUPHQW&RVWLQFOXGHVH[SHQGLWXUHWKDWLVGLUHFWO\ DWWULEXWDEOHWRWKHDFTXLVLWLRQRIWKHLWHPDQGLQFOXGHVFDSLWDOLVHGLQWHUHVW UHIHUWRQRWH 6XEVHTXHQWFRVWVDUHLQFOXGHGLQWKHDVVHW¶V FDUU\LQJDPRXQWRUUHFRJQLVHGDVDVHSDUDWHDVVHWDVDSSURSULDWHRQO\ZKHQLWLVSUREDEOHWKDWIXWXUHHFRQRPLFEHQHILWVDVVRFLDWHG ZLWKWKHLWHPZLOOIORZWRWKH*URXSDQGWKHFRVWRIWKHLWHPFDQEHPHDVXUHGUHOLDEO\

Critical accounting judgements and estimates

0DQDJHPHQWUHYLHZVWKHDSSURSULDWHQHVVRIXVHIXOOLYHVRIDVVHWVDWOHDVWDQQXDOO\DQGDQ\FKDQJHVWRXVHIXOOLYHVPD\DIIHFW SURVSHFWLYHGHSUHFLDWLRQUDWHVDQGDVVHWFDUU\LQJYDOXHV

'HSUHFLDWLRQLVUHFRUGHGRQDVWUDLJKWOLQHEDVLVXVLQJWKHIROORZLQJXVHIXOOLYHV

/DQG  ,QGHILQLWH %XLOGLQJVDQGLPSURYHPHQWV   WR\HDUV 0DFKLQHU\SODQWDQGHTXLSPHQW   WR\HDUV

       

2ULFD/LPLWHG 44  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

 ,QWDQJLEOHDVVHWV 3DWHQWV &XVWRPHU WUDGHPDUNV FRQWUDFWV DQG DQG *RRGZLOO ULJKWV UHODWLRQVKLSV 6RIWZDUH 2WKHU 7RWDO &RQVROLGDWHG P P P P P P  &RVW           $FFXPXODWHGLPSDLUPHQWORVVHVRIJRRGZ LOO       $FFXPXODWHGDPRUWLVDWLRQ          1HWFDUU\LQJDPRXQW        

0RY HPHQW &DUU\LQJDPRXQWDWWKHEHJLQQLQJRIWKH\HDU      

$GGLWLRQV       'LVSRVDOVWKURXJKGLVSRVDORIHQWLWLHV VHHQRWH       $PRUWLVDWLRQH[SHQVH        )RUHLJQFXUUHQF\H[FKDQJHGLIIHUHQFHV          &DUU\LQJDPRXQWDWWKHHQGRIWKH\HDU      



&RV W        $FFXPXODWHGLPSDLUPHQWORVVHV        $FFXPXODWHGDPRUWLVDWLRQ       1HWFDUU\LQJDPRXQW       0RYHPHQW &DUU\LQJDPRXQWDWWKHEHJLQQLQJRIWKH\HDU       $GGLWLRQV       'LVSRV DOV        $GGLWLRQVWKURXJKDFTXLVLWLRQRIHQWLWLHV VHHQRWH       $PRUWLVDWLRQH[SHQVH        ,PSDLUPHQWH[SHQVH       )RUHLJQFXUUHQF\H[FKDQJHGLIIHUHQFHV       &DUU\LQJDPRXQWDWWKHHQGRIWKH\HDU      

Recognition and Measurement

Identifiable intangibles

,GHQWLILDEOHLQWDQJLEOHDVVHWVZLWKDILQLWHOLIH FXVWRPHUFRQWUDFWVDQGUHODWLRQVKLSVSDWHQWVVRIWZDUHFDSLWDOLVHGGHYHORSPHQWFRVWV WUDGHPDUNVDQGULJKWV DUHDPRUWLVHGRQDVWUDLJKWOLQHEDVLVRYHUWKHLUH[SHFWHGXVHIXOOLIHWRWKH*URXSEHLQJXSWRWKLUW\\HDUV ,GHQWLILDEOHLQWDQJLEOHDVVHWVZLWKDQLQGHILQLWHOLIHDUHQRWDPRUWLVHGEXWWKHUHFRYHUDEOHDPRXQWRIWKHVHDVVHWVLVWHVWHGIRU LPSDLUPHQWDWOHDVWDQQXDOO\

Unidentifiable intangibles - Goodwill

:KHUHWKHIDLUYDOXHRIWKHFRQVLGHUDWLRQSDLGIRUDEXVLQHVVDFTXLVLWLRQH[FHHGVWKHIDLUYDOXHRIWKHLGHQWLILDEOHDVVHWVOLDELOLWLHVDQG FRQWLQJHQWOLDELOLWLHVDFTXLUHGWKHGLIIHUHQFHLVWUHDWHGDVJRRGZLOO*RRGZLOOLVQRWDPRUWLVHGEXWWKHUHFRYHUDEOHDPRXQWLVWHVWHGIRU LPSDLUPHQWDWOHDVWDQQXDOO\

Subsequent expenditure

6XEVHTXHQWH[SHQGLWXUHRQFDSLWDOLVHGLQWDQJLEOHDVVHWVLVFDSLWDOLVHGRQO\ZKHQLWLQFUHDVHVWKHIXWXUHHFRQRPLFEHQHILWVHPERGLHGLQ WKHVSHFLILFDVVHWWRZKLFKLWUHODWHV$OORWKHUH[SHQGLWXUHLVH[SHQVHGDVLQFXUUHG

Critical accounting judgements and estimates

0DQDJHPHQWUHYLHZVWKHDSSURSULDWHQHVVRIXVHIXOOLYHVRIDVVHWVDWOHDVWDQQXDOO\DQGDQ\FKDQJHVWRXVHIXOOLYHVPD\DIIHFW SURVSHFWLYHDPRUWLVDWLRQUDWHVDQGDVVHWFDUU\LQJYDOXHV

2ULFD/LPLWHG  45 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

 ,PSDLUPHQWWHVWLQJRIDVVHWV

Recognition and Measurement

Methodology

)RUPDOLPSDLUPHQWWHVWVDUHFDUULHGRXWDQQXDOO\IRUJRRGZLOO,QDGGLWLRQIRUPDOLPSDLUPHQWWHVWVIRUDOODVVHWVDUHSHUIRUPHGZKHQ WKHUHLVDQLQGLFDWLRQRILPSDLUPHQW7KH*URXSFRQGXFWVDQLQWHUQDOUHYLHZRIDVVHWYDOXHVDWHDFKUHSRUWLQJSHULRGZKLFKLVXVHGDVD VRXUFHRILQIRUPDWLRQWRDVVHVVIRUDQ\LQGLFDWLRQVRILPSDLUPHQW([WHUQDOIDFWRUVVXFKDVFKDQJHVLQH[SHFWHGIXWXUHSULFHVFRVWV DQGRWKHUPDUNHWIDFWRUVDUHDOVRPRQLWRUHGWRDVVHVVIRULQGLFDWLRQVRILPSDLUPHQW,IDQ\VXFKLQGLFDWLRQH[LVWVDQHVWLPDWHRIWKH DVVHW¶VUHFRYHUDEOHDPRXQWLVFDOFXODWHG

,IWKHFDUU\LQJDPRXQWRIWKHDVVHWH[FHHGVLWVUHFRYHUDEOHDPRXQWWKHDVVHWLVLPSDLUHGDQGDQLPSDLUPHQWORVVLVFKDUJHGWRWKH ,QFRPH6WDWHPHQWWRUHGXFHWKHFDUU\LQJDPRXQWLQWKH%DODQFH6KHHWWRLWVUHFRYHUDEOHDPRXQW7KHUHFRYHUDEOHDPRXQWLV GHWHUPLQHGXVLQJWKHKLJKHURIYDOXHLQXVHRUIDLUYDOXHOHVVFRVWVWRGLVSRVH9DOXHLQXVHLVWKHSUHVHQWYDOXHRIWKHHVWLPDWHGIXWXUH FDVKIORZVH[SHFWHGWRDULVHIURPWKHFRQWLQXHGXVHRIWKHDVVHWLQLWVSUHVHQWIRUPDQGLWVHYHQWXDOGLVSRVDO9DOXHLQXVHLV GHWHUPLQHGE\DSSO\LQJDVVXPSWLRQVVSHFLILFWRWKH*URXS¶VFRQWLQXHGXVHDQGGRHVQRWFRQVLGHUIXWXUHGHYHORSPHQW7KHYDOXHLQXVH FDOFXODWLRQVXVHFDVKIORZSURMHFWLRQVZKLFKGRQRWH[FHHG\HDUVEDVHGRQDFWXDORSHUDWLQJUHVXOWVDQGWKHRSHUDWLQJEXGJHWV DSSURYHGE\WKH%RDUGRI'LUHFWRUV)DLUYDOXHOHVVFRVWVWRGLVSRVHLVWKHYDOXHWKDWZRXOGEHUHFHLYHGLQH[FKDQJHIRUDQDVVHWLQDQ RUGHUO\WUDQVDFWLRQ

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

Key assumptions

3RVWWD[ GLVFRXQW 7HUPLQDO 3RVWWD[GLVFRXQW 7HUPLQDO UDWHV JURZ WKUDWHV *RRGZ LOO UDWHV JURZ WKUDWHV *RRGZ LOO       P P $XVWUDOLD3DFLI LF $VLD       1RUWK$PHULFD       /DWLQ$PHULFD       (XURSH0LGGOH(DVW $IULFD       0LQRYD       $X[LOLDULHV        *OREDO6XSSRUW       7RWDO   

 $X[LOLDULHVLQFOXGHV*URXQG3UREH$VWKLVZ DVSXUFKDVHGLQWKH\HDULWVUHFRYHUDEOHDPRXQWZ DVGHWHUPLQHGXVLQJIDLUYDOXHOHVV FRVWVWRVHOO 



Critical accounting judgements and estimates

0LQRYD

$WWKHLQWHULPUHSRUWLQJSHULRGWKHSHUIRUPDQFHRIWKH0LQRYDEXVLQHVVZDVUHYLHZHGZKLFKUHVXOWHGLQDUHYLVLRQWRWKHRSHUDWLRQ¶V VKRUWWRPHGLXPWHUPRXWORRN7KHSHUIRUPDQFHRIWKHEXVLQHVVZDVEHORZEXGJHWDQGIRUHFDVWHGHDUQLQJVZKLFKLGHQWLILHG LQGLFDWRUVIRULPSDLUPHQWDQGDQHVWLPDWHRIWKH&*8¶VUHFRYHUDEOHYDOXHZDVFDOFXODWHG,WZDVGHWHUPLQHGWKDWWKHFDUU\LQJYDOXH RIWKH0LQRYD&*8H[FHHGHGLWVUHFRYHUDEOHDPRXQWZLWKUHIHUHQFHWRWKHYDOXHLQXVHFDOFXODWLRQV

7KHNH\DVVXPSWLRQVXVHGLQGHWHUPLQLQJWKHYDOXHLQXVHJHQHUDWHGDWWKHLQWHULPUHSRUWLQJSHULRGZHUH

x *URZWKLQ(%,7WRPLOOLRQLQ x $ZHLJKWHGDYHUDJHWHUPLQDOJURZWKUDWHLQOLQHZLWKORFDOFRXQWU\HFRQRPLFIRUHFDVWVRI x $ZHLJKWHGDYHUDJHSRVWWD[GLVFRXQWUDWHRI

2ULFD/LPLWHG 46  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2SHUDWLQJDVVHWVDQGOLDELOLWLHV )RUWKH\HDUHQGHG6HSWHPEHU

  ,PSDLUPHQWWHVWLQJRIDVVHWV FRQWLQXHG 

&RQVLGHULQJWKHVKRUWIDOOLQHDUQLQJVYHUVXVWKHIRUHFDVWWKHEXVLQHVVUHYLVHGWKHJURZWKUDWHVXVHGDFURVVWKHSURMHFWHGILYH\HDU WLPHKRUL]RQWRUHIOHFWWKHVHLWHPVLQWKHHDUQLQJVSURILOH7KHFDOFXODWLRQSHUIRUPHGDWWKHLQWHULPUHSRUWLQJSHULRGLQGLFDWHGDQ LPSDLUPHQWRIPLOOLRQZKLFKUHVXOWHGLQWKHZULWHRIIRIDOOJRRGZLOOLQWKH0LQRYDVHJPHQW

7KH0LQRYDFDUU\LQJYDOXHDVDW6HSWHPEHULVDVIROORZV

 P 3URSHUW\SODQWDQGHTXLSPHQW  ,QWDQJLEOHDVVHWV  :RUNLQJFDSLWDO  7RWDO  

7KHUHFRYHUDEOHDPRXQWRIWKHLQWDQJLEOHVZRXOGEHLPSDFWHGE\DQ\IXUWKHUDGYHUVHFKDQJHVLQHDUQLQJVRUSURMHFWHGWHUPLQDO JURZWKUDWHV$QXSGDWHGFDOFXODWLRQZDVSHUIRUPHGDW6HSWHPEHUZKLFKVKRZHGQRIXUWKHULPSDLUPHQWZDVUHTXLUHG

/DWLQ$PHULFD /$7$0 

7KHFDUU\LQJYDOXHRIWKH/$7$0VHJPHQWLQFOXGHVJRRGZLOORIPLOOLRQ7KHSHUIRUPDQFHRIWKHEXVLQHVVZDVEHORZEXGJHW DQGIRUHFDVWHGHDUQLQJVZKLFKLGHQWLILHGLQGLFDWRUVIRULPSDLUPHQWDQGDQHVWLPDWHRIWKH&*8¶VUHFRYHUDEOHYDOXHZDVFDOFXODWHG %DVHGRQWKHODWHVWSURMHFWHGFDVKIORZVRIWKHRSHUDWLRQWKHFDUU\LQJYDOXHDSSUR[LPDWHVLWVYDOXHLQXVH7KHYDOXHLQXVH FDOFXODWLRQVDUHVHQVLWLYHWRHDUQLQJVIRUHFDVWVFKDQJHVLQGLVFRXQWUDWHVDQGWHUPLQDOJURZWKUDWHV

7KHFDUU\LQJYDOXHRI/$7$0LVUHOLDQWRQDFKLHYLQJJURZWKLQHDUQLQJV&RQWLQXLQJUHFHQWFRQWUDFWZLQVWKDWKDYHDOUHDG\RFFXUUHG LQLVFULWLFDOWR/$7$0¶VIRUHFDVWHDUQLQJVDQGXQGHUSLQVWKHIXWXUHFDVKIORZIRUHFDVWVXVHGWRGHWHUPLQHWKHUHFRYHUDEOH DPRXQW

,Q/$7$0KDVLQFXUUHGRQHRIIFRVWVUHODWLQJWRWKHUHVWUXFWXULQJRIWKHEXVLQHVV7KLVUHVWUXFWXULQJFRPELQHGZLWK RSSRUWXQLWLHVIRUJURZWKOHYHUDJLQJ2ULFD¶VQHZWHFKQRORJLHVZLOOFRQWULEXWHWRWKHWXUQDURXQGRIWKHEXVLQHVV

$Q\YDULDWLRQLQWKHNH\DVVXPSWLRQVRIWKH/$7$0FDVKIORZVZRXOGUHVXOWLQDFKDQJHLQWKHDVVHVVHGYDOXHLQXVH,IWKHLPSDFWRI WKHFKDQJHKDGDQHJDWLYHLPSDFWLWFRXOGLQWKHDEVHQFHRIRWKHUIDFWRUVUHTXLUHDQLPSDLUPHQWWRJRRGZLOO

.H\DVVXPSWLRQVXQGHUO\LQJWKHYDOXHLQXVHDUHDVIROORZV

x *URZWKLQ(%,7IURPPLOOLRQLQWRPLOOLRQLQ x $ZHLJKWHGDYHUDJHWHUPLQDOJURZWKUDWHLQOLQHZLWKORFDOFRXQWU\HFRQRPLFIRUHFDVWVRI x $ZHLJKWHGDYHUDJHSRVWWD[GLVFRXQWUDWHRI

2WKHU$VVHWV

$VSDUWRIWKHLPSDLUPHQWUHYLHZDQGWKHWUDQVLWLRQWRWKHQHZ6$3RSHUDWLQJV\VWHP2ULFDLGHQWLILHGPLOOLRQRI,7DQGRWKHU DVVHWVWKDWZHUHQRORQJHUEHLQJXWLOLVHGE\WKHEXVLQHVV 

   

2ULFD/LPLWHG  47 NotestotheFinancialStatements–Managingfinancialrisks For the year ended 30 September

Section D. Managing Financial Risks Orica’s Review of Operations and Financial Performance highlights funding and other treasury matters as material business risks that could adversely affect the achievement of future business performance. This section discusses the principal market and financial risks the Group is exposed to and the risk management program, which seeks to mitigate these risks and reduce the volatility of Orica’s financial performance.

10. Financial risk management Financial risk factors The Group’s overall risk management program seeks to mitigate risks and reduce the volatility of Orica’s financial performance. Financial risk management is carried out centrally by the Group’s Treasury department under policies approved by the Board. The Group’s principal financial risks are associated with: ƒ interest rate risk (note 10a) ƒ foreign exchange risk (note 10b) ƒ credit risk (note 10c) ƒ liquidity risk (note 10d) and ƒ commodity risk (note 10e)

(a) Interest rate risk management Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. The Group is primarily exposed to interest rate risk on outstanding interest-bearing liabilities. Non-derivative interest-bearing assets are predominantly short-term liquid assets. Interest bearing liabilities issued at fixed rates expose the Group to fair value interest rate risk while borrowings issued at a variable rate give rise to cash flow interest rate risk. Interest rate risk on long-term interest-bearing liabilities is managed by adjusting the ratio of fixed interest debt to variable interest debt. This is managed within policies determined by the Board via the use of interest rate swaps and cross currency interest rate swaps. Under the policy, up to 90% of debt with a maturity of less than one year can be fixed. This reduces on a sliding scale to year five where a maximum 50% of debt with a maturity of between five and ten years can be fixed. Beyond this, a maximum 25% of the debt with a maturity of between ten and twenty years can be fixed. The Group operated within this range during both the current year and the prior year. As at September, the fixed rate borrowings after the impact of interest rate swaps and cross currency swaps were $1,204 million (2017 $1,113 million) and the borrowings designated in a fair value relationship were $743 million (2017 $714 million).

Interest rate sensitivity Orica has exposure to interest rate movements in the underlying currencies it deals in. A 10% movement in interest rates without management intervention would have a $5.1 million (2017 $1.7 million) impact on profit before tax and a $3.6 million (2017 $1.1 million) impact on shareholders’ equity.

(b) Foreign exchange risk management i) Foreign exchange risk - transactional Foreign exchange risk refers to the risk that the value of a financial commitment, recognised asset or liability or cash flow will fluctuate due to changes in foreign currency rates. The Group is exposed to foreign exchange risk primarily due to significant sales and/or purchases denominated, either directly or indirectly, in currencies other than the functional currencies of the Group’s subsidiaries. As at reporting date, cross currency interest rate swaps entered into to hedge debt principal had a fair value gain of $56.2 million (2017 $5.0 million gain).

Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the Balance Sheet date are translated to the functional currency of the entity at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Income Statement. Non-monetary assets and liabilities that are measured at historical cost in a foreign currency are translated using the exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency of the entity at foreign exchange rates ruling at the dates the fair value was determined.

Orica Limited

48  NotestotheFinancialStatements–Managingfinancialrisks For the year ended 30 September

10. Financial risk management (continued) In regard to foreign currency risk relating to sales and purchases, the Group hedges up to 100% of committed exposures. Anticipated exposures are hedged by applying a declining percentage of cover the further the time to the transaction date. Only exposures that can be forecast to a high probability are hedged. Transactions can be hedged for up to five years. The derivative instruments used for hedging purchase and sale exposures are bought vanilla option contracts and forward exchange contracts. Forward exchange contracts may be used only under Board policy for committed exposures and anticipated exposures expected to occur within 12 months. Bought vanilla option contracts may be used for all exposures. These contracts are designated as cash flow hedges and are recognised at their fair value.

Exchange rate sensitivity The table below shows the Group's exposure to foreign currency risk ( equivalent) and the effect on profit and equity had exchange rates been 10% higher or lower than the year end rate with all other variables held constant. The 10% higher sensitivity represents the Australian dollar strengthening against the other currencies. The analysis takes into account all underlying exposures and related hedges but not the impact of any management actions that might take place if these events occurred. The net exposure includes both external and internal balances (eliminated on consolidation). USD CAD NZD NOK SEK EUR GBP 2018 $m$m$m$m$m$m$m (1) Cash and internal deposits 2,010.4 38.7 - - 138.8 1,015.6 361.5 154.4 19.0 0.2 0.7 1.5 29.2 41.0 Trade and other receivables Trade and other payables (184.9) (41.4) - (0.2) (22.0) (49.0) (3.6)

Interest bearing liabilities (1) (2,602.3) (244.2) (23.1) (31.9) (29.1) (1,232.6) (155.2)

Net derivatives 1,386.3 68.7 7.5 (54.1) 4.6 47.6 44.8 Net ex pos ure 763.9 (159.2) (15.4) (85.5) 93.8 (189.2) 288.5 Effect on profit/(loss) before tax If exchange rates w ere 10% low er 8.1 (3.0) (0.1) (0.1) (2.3) (1.7) 4.2 If exchange rates w ere 10% higher (6.7) 2.4 0.0 0.0 1.8 1.4 (3.4) Increase/(decrease) in equity If exchange rates w ere 10% low er 54.1 (12.4) (1.3) (6.7) 7.3 (14.7) 22.5

If exchange rates w ere 10% higher (44.2) 10.1 1.0 5.4 (6.0) 12.0 (18.4)

USD CAD NZD NOK SEK EUR GBP 2017 $m$m$m$m$m$m$m Cash and internal deposits (1) 1,844.5 3.5 0.6 9.2 126.2 800.8 337.7

Trade and other receivables 154.7 22.8 0.2 1.1 1.7 22.8 29.6

Trade and other payables (162.5) (32.1) - (1.1) (7.2) (52.4) (0.6)

Interest bearing liabilities (1) (2,548.1) (198.8) (19.3) (18.6) (41.0) (891.1) (151.5) Net derivatives 1,270.6 42.7 2.4 (63.0) 15.7 51.1 48.0 Net exposure 559.2 (161.9) (16.1) (72.4) 95.4 (68.8) 263.2 Effect on profit/(loss) before tax If exchange rates w ere 10% low er 12.0 (0.1) (0.1) (0.2) (0.6) (2.4) 3.3 If exchange rates w ere 10% higher (9.9) 0.0 0.1 0.2 0.5 1.9 (2.7) Increase/(decrease) in equity

If exchange rates w ere 10% low er 79.0 (12.6) (1.2) (5.7) 7.4 (5.3) 20.5

If exchange rates w ere 10% higher (77.6) 10.3 1.0 4.6 (6.1) 4.4 (16.8) (1) Includes internal deposits and interest bearing liabilities w hich comprise part of the Group's capital structure.

ii) Foreign currency risk - translational Foreign currency earnings translation risk arises primarily as a result of earnings generated by foreign operations with functional currencies of USD, CAD, MXN, PHP, NOK and PEN being translated into AUD. Derivative contracts to hedge earnings exposures do not qualify for hedge accounting under Australian Accounting Standards. However, Board approved policy allows hedging of this exposure in order to reduce the volatility of full year earnings resulting from changes in exchange rates.

 OricaLimited49 NotestotheFinancialStatements–Managingfinancialrisks For the year ended 30 September

10. Financial risk management (continued) Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Australian dollars at foreign exchange rates applying at the balance sheet date. The revenues and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to Australian dollars at rates approximating the foreign exchange rates applying at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity.

Net investment in foreign operations Exchange differences arising from the translation of the net investment in foreign operations, and of related hedges are taken to the translation reserve. They are released into the Income Statement upon disposal. Hedging of exposures is undertaken primarily through originating debt in the currency of the foreign operation or by raising debt in a different currency and effectively swapping the debt to the currency of the foreign operation. The remaining translation exposure is managed, where considered appropriate, through forward foreign exchange derivative instruments or cross currency swaps. Gains and losses resulting from these hedging activities are recorded in the foreign currency translation reserve within the equity section of the Balance Sheet and offset against the foreign exchange impact resulting from the translation of the net assets of foreign operations. 34.7% of the Group’s investment in foreign operations was hedged in this manner as at 30 September 2018 (2017 32.5%). As at reporting date, derivative instruments designated as hedging net investment exposures had a fair value of $4.7 million liability (2017 $2.9 million liability).

(c) Credit risk management Credit risk represents the loss that would be recognised if counterparties failed to meet their obligations under a contract or arrangement. The Group is exposed to credit risk from trade and other receivables and financial instrument contracts that are outstanding at year end. The creditworthiness of customers is reviewed prior to granting credit, using trade references and credit reference agencies. Credit limits are established and monitored for each customer, and these limits represent the highest level of exposure that a customer can reach. Trade credit insurance is purchased when required. Orica’s maximum exposure to trade and other receivables at 30 September 2018 is $830.8 million (2017 $765.0 million). In regard to credit risk arising from derivatives and cash, this is the credit exposure to financial institutions that are counterparties to derivative contracts and cash deposits, with a positive fair value from Orica’s perspective. As at 30 September 2018, the sum of all derivative contracts with a positive fair value was $76.8 million (2017 $70.8 million). The Group does not hold any credit derivatives to offset its credit exposures.

(d) Liquidity risk management Liquidity risk arises from the possibility that there will be insufficient funds available to make payment as and when required. The Group manages this risk via: ƒ maintaining an adequate level of undrawn committed facilities in various currencies that can be drawn upon at short notice; ƒ using instruments that are readily tradeable in the financial markets; ƒ monitoring duration of long-term debt; ƒ spreading, to the extent practicable, the maturity dates of long-term debt facilities; and ƒ comprehensively analysing all forecast inflows and outflows that relate to financial assets and liabilities.

Facilities available and the amounts drawn and undrawn are as follows: 2018 2017

$m $m

Unsecured bank overdraft facilities Unsecured bank overdraft facilities available 99.1 88.2 Amount of facilities undraw n 99.1 88.1 Committed standby and loan facilities Committed standby and loan facilities available 3,544.9 3,529.8 Amount of facilities unused 1,382.6 1,578.6 The bank overdrafts are payable on demand and are subject to an annual review. The repayment dates of the committed standby and loan facilities range from 7 October 2018 to 25 October 2030 (2017: 28 April 2018 to 25 October 2030).

Orica Limited

50  NotestotheFinancialStatements–Managingfinancialrisks For the year ended 30 September

10. Financial risk management (continued) The contractual maturity of the Group’s fixed and floating rate financial instruments and derivatives are shown in the table below. The amounts shown represent the future undiscounted principal and interest cash flows:

2018 2017 1 year or 1 to 2 2 to 5 Over 5 1 year 1 to 2 2 to 5 Ove r 5

less years years years or less years years years Consolidated $m $m $m $m $m $m $m $m Non-derivative financial assets Cas h 514.6 - - - 516.9 - - - Trade and other receivables 748.1 82.7 - - 665.7 97.6 - - Derivative financial assets 1,775.0 57.7 659.0 397.3 1,415.6 354.6 539.4 488.4

Financial assets 3,037.7 140.4 659.0 397.3 2,598.2 452.2 539.4 488.4

Non-derivative f inancial liabilities Trade and other payables 1,198.9 6.1 - - 1,059.8 3.9 - - Bank overdrafts 3.2 ------Bank loans 6.3 139.4 45.0 - 1.7 1.3 76.7 - Export finance facility 17.5 16.6 - - 16.2 15.9 15.2 - Private Placement 228.7 85.6 1,263.4 925.0 86.7 210.3 634.8 1,462.8 Other loans 3.6 2.9 - - 10.9 2.7 - -

Lease liabilities 1.1 0.1 - - 1.2 1.1 0.1 - Derivative financial liabilities 1,787.6 61.6 595.3 383.7 1,438.2 393.4 529.1 516.2 Financial liabilities 3,246.9 312.3 1,903.7 1,308.7 2,687.4 627.3 1,179.2 1,979.0 Net outflow (209.2) (171.9) (1,244.7) (911.4) (89.2) (175.1) (639.8) (1,490.6)

(e) Commodity risk management Commodity risk refers to the risk that Orica’s profit/loss or equity will fluctuate due to changes in commodity prices. At reporting date Orica has derivative contracts which are exposed to fluctuations in the price of Brent Crude Oil entered into to fix the price of future gas supply contracts. The table below includes Orica’s derivative contracts that are exposed to changes in Brent Crude Oil at 30 September and the impact of a 10 per cent change in observable prices (holding all other things constant) on profit/loss or equity based solely on Orica’s price exposures existing at the reporting date but does not take into account any mitigating actions that management might undertake if the price change occurred. 2018 2017 Increase/ Effect on Ef f e ct o n Increase/ (decrease) profit/(loss) profit/(loss) (decrease) in in equity before tax before tax equity

$m $m $m $m

10% decrease in observable prices - (5.2) - (6.3) 10% increase in observable prices - 5.2 - 6.3

Recognition and Measurement Valuation of financial assets and liabilities (included within other on Balance Sheet) Derivatives are carried at fair value and categorised as Level 2 under AASB 7 Financial Instruments: Disclosures. The inputs are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices). There has been no movement between levels since prior year. Valuation techniques include, where applicable, reference to prices quoted in active markets, discounted cash flow analysis, fair value of recent arm’s length transactions involving the same instruments or other instruments that are substantially the same, and option pricing models. Changes in default probabilities are included in the valuation of derivatives using credit and debit valuation adjustments. The fair values of forward exchange contracts are calculated by reference to forward exchange market rates for contracts within similar maturity profiles at the time of valuation. The fair values of cross currency interest rate swaps and interest rate swaps and other financial liabilities measured at fair value are determined using valuation techniques which utilise data from observable markets. Assumptions are based on market conditions existing at each balance date. The fair value is calculated as the present value of the estimated future cash flows using an appropriate market based yield curve, which is independently derived and representative of Orica’s cost of borrowings.

 OricaLimited51 NotestotheFinancialStatements–Managingfinancialrisks For the year ended 30 September

10. Financial risk management (continued) Offsetting financial assets and liabilities Financial assets and liabilities are offset and the net amount reported in the Balance Sheet where Orica currently has a legally enforceable right to offset the recognised amounts, and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Orica also entered into master netting arrangements that do not meet the criteria for offsetting but allow for the related amounts to be set-off in certain circumstances, such as the event of default.

Hedge accounting The Group uses financial instruments to hedge its exposure to certain market risks arising from operational, financing and investing activities. The Group holds financial instruments that qualify for hedge accounting under one of the three arrangements:

Fair value hedges Cash flow hedges Net investment hedges What the financial To mitigate the risk of As a hedge of the variability As a hedge of risk of instrument is designated to changes in the fair value of in cash flows of a recognised changes in foreign currency hedge? its foreign currency asset or liability, or a highly when net assets of a foreign borrowings from foreign probable forecasted operation are translated from currency and interest rate transaction. their functional currency to fluctuations. Australian dollars. Where are gains or losses Recognised in the Income The effective portion is The effective portion is on fair value movements of Statement, together with recognised in other recognised in the foreign the financial instrument gains or losses in relation to comprehensive income. The currency translation reserve recorded? the hedged item. ineffective portion is in equity. The ineffective recognised immediately in portion is recognised the Income Statement. immediately in the Income Statement. Discontinuation of hedge The cumulative gain or loss When a hedging instrument accounting that has been recorded to the expires or is sold, terminated carrying value of the hedged or exercised, or the entity item is amortised to the revokes designation of the Income Statement using the hedge relationship but the effective interest method. hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point remains in equity.

For a cash flow hedge arrangement that has a forecasted transaction that is being hedged, when the transaction occurs, the cumulative gain or loss is removed from equity and: ƒ included in the initial cost or other carrying amount of the non-financial asset or liability when the forecasted transaction subsequently results in the recognition of a non-financial asset or non-financial liability; ƒ reclassified into the Income Statement in the same period or periods during which the asset acquired or liability assumed affects the Income Statement, where a hedge of a forecasted transaction subsequently results in the recognition of a financial asset or a financial liability; ƒ recognised in the Income Statement in the same period or periods during which the hedged forecast transaction affects the Income Statement, when the transaction is not covered by the above two statements.

Derivatives not in a designated hedge arrangement Financial instruments that do not qualify for hedge accounting but remain economically effective, are accounted for as trading instruments. These instruments are classified as current and are stated at fair value, with any resultant gain or loss recognised in the Income Statement. The Group policy is to not hold or issue financial instruments for trading purposes.

Orica Limited

52  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±7D[DWLRQ )RUWKH\HDUHQGHG6HSWHPEHU  6HFWLRQ(7D[DWLRQ

7KLVVHFWLRQRXWOLQHVWKHWD[HVSDLGE\2ULFDDQGWKHLPSDFWWD[KDVRQWKHILQDQFLDOVWDWHPHQWV  2ULFDKDVRSHUDWLRQVLQPRUHWKDQFRXQWULHVZLWKFXVWRPHUVLQPRUHWKDQFRXQWULHV,Q2ULFDSDLGPLOOLRQ  PLOOLRQ JOREDOO\LQFRUSRUDWHWD[HVDQGSD\UROOWD[HV2ULFDFROOHFWHGDQGUHPLWWHGPLOOLRQ PLOOLRQ  JOREDOO\LQ*679$7  $V2ULFDRSHUDWHVLQDQXPEHURIFRXQWULHVDURXQGWKHZRUOGLWLVVXEMHFWWRORFDOWD[UXOHVLQHDFKRIWKRVHFRXQWULHV2ULFD¶VWD[UDWH LVVHQVLWLYHWRWKHJHRJUDSKLFPL[RISURILWVHDUQHGLQGLIIHUHQWFRXQWULHVZLWKGLIIHUHQWWD[UDWHVDVWD[ZLOOEHGXHLQWKHFRXQWU\ ZKHUHWKHSURILWVDUHHDUQHG0DQ\RIWKHMXULVGLFWLRQV2ULFDKDVRSHUDWLRQVLQKDYHKHDGOLQHWD[UDWHVORZHUWKDQ  7D[DWLRQ

D ,QFRPHWD[H[SHQVHUHFRJQLVHGLQWKH

,QFRPH6WDWHPHQW &RQVROLGDWHG   P P &XUUHQWWD[H[SHQVH &XUUHQW\HDU   'HI HUUHGWD[   :ULWHGRZ QRI86GHIHUUHGWD[DVVHWV   8QGHUSURYLGHGLQSULRU\HDUV   7RWDOLQFRPHWD[H[SHQVHLQ,QFRPH6WDWHPHQW  

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

,QFRPHWD[H[SHQVHUHSRUWHGLQWKH,QFRPH6WDWHPHQW  

2ULFD/LPLWHG 53 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±7D[DWLRQ )RUWKH\HDUHQGHG6HSWHPEHU   7D[DWLRQ FRQWLQXHG F ,QFRPHWD[UHFRJQLVHGLQ&RPSUHKHQVLYH,QFRPH &RQVROLGDWHG   P P P P P P 7D[ 7D[ %H IRU H %HIRUH H[SHQVH  1H WRIWD[ H[SHQVH  1HWRIWD[ WD[ WD[ EHQHILW EHQHILW

1HWJDLQ ORVV RQKHGJHRIQHWLQYHVWPHQWV LQIRUHLJQVXEVLGLDULHV       &DVKIORZ KHGJHV (IIHFWLYHSRUWLRQRIFKDQJHVLQIDLUYDOXH       7UDQVIHUUHGWR,QFRPH6WDWHPHQW       ([FKDQJHJDLQVRQWUDQVODWLRQRIIRUHLJQRSHUDWLRQV       $FWXDULDOEHQHILWVRQGHILQHGEHQHILWSODQV            

G 5HFRJQLVHGGHIHUUHGWD[DVVHWVDQGOLDELOLWLHV %DODQFH6KHHW ,QFRPH6WDWHPHQW     &RQVROLGDWHG P P P P 'HIHUUHGWD[DVVHWV 7UDGHDQGRWKHUUHFHLYDEOHV     ,QYHQWRULHV     3URSHUW\SODQWDQGHTXLSPHQW     ,QWDQJLEOHDVVHWV     7UDGHDQGRWKHUSD\DEOHV     C ,QWHUHVWEHDULQJOLDELOLWLHV     3URYLVLRQIRUHPSOR\HHHQWLWOHPHQWV    

3URYLVLRQIRUUHWLUHPHQWEHQHILWREOLJDWLRQV     3URYLVLRQVIRUHQYLURQPHQWDODQGGHFRPPLVVLRQLQJ     7D[ORVVHV     2WKHULWHPV     'HIHUUHGWD[DVVHWV   /HVVVHWRIIDJDLQVWGHIHUUHGWD[OLDELOLWLHV   1HWGHIHUUHGWD[DVVHWV   'HIHUUHGWD[OLDELOLWLHV ,QY HQWRULHV     3URSHUW\SODQWDQGHTXLSPHQW     ,QWDQJLEOHDVVHWV    

8QGLVWULEXWHGSURILWVRIIRUHLJQVXEVLGLDULHV     2WKHULWHPV     'HIHUUHGWD[OLDELOLWLHV   /HVVVHWRIIDJDLQVWGHIHUUHGWD[DVVHWV   1HWGHIHUUHGWD[OLDELOLWLHV   'HIHUUHGWD[H[SHQVH  



H 8QUHFRJQLVHGGHIHUUHGWD[DVVHWV &RQVROLGDWHG  

P P 7D[ORVVHVQRWERRNHG   &DSLWDOORVVHVQRWERRNHG   7HPSRUDU\GLIIHUHQFHVQRWERRNHG  

7D[ORVVHVQRWERRNHGH[SLUHEHWZ HHQDQG

54 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±7D[DWLRQ )RUWKH\HDUHQGHG6HSWHPEHU   7D[DWLRQ FRQWLQXHG 

Recognition and Measurement

,QFRPHWD[RQWKHSURILWRUORVVIRUWKH\HDUFRPSULVHVFXUUHQWDQGGHIHUUHGWD[DQGLVUHFRJQLVHGLQWKH,QFRPH6WDWHPHQW

&XUUHQWWD[LVWKHH[SHFWHGWD[SD\DEOHRQWKHWD[DEOHLQFRPHIRUWKH\HDUXVLQJWD[UDWHVHQDFWHGRUVXEVWDQWLYHO\HQDFWHGDW UHSRUWLQJGDWHDQGDQ\DGMXVWPHQWVWRWD[SD\DEOHLQUHVSHFWRISUHYLRXV\HDUV

8QGHU$$6% 112 Income TaxesGHIHUUHGWD[EDODQFHVDUHGHWHUPLQHGXVLQJWKH%DODQFH6KHHWPHWKRGZKLFKFDOFXODWHVWHPSRUDU\ GLIIHUHQFHVEDVHGRQWKHFDUU\LQJDPRXQWVRIDQHQWLW\ VDVVHWVDQGOLDELOLWLHVLQWKHEDODQFHVKHHWDQGWKHLUDVVRFLDWHGWD[EDVHV &XUUHQWDQGGHIHUUHGWD[HVDWWULEXWDEOHWRDPRXQWVUHFRJQLVHGGLUHFWO\LQHTXLW\DUHDOVRUHFRJQLVHGLQHTXLW\

7KHDPRXQWRIGHIHUUHGWD[SURYLGHGZLOOEHEDVHGRQWKHH[SHFWHGPDQQHURIUHDOLVDWLRQRIWKHDVVHWRUVHWWOHPHQWRIWKHOLDELOLW\XVLQJ WD[UDWHVHQDFWHGRUVXEVWDQWLYHO\HQDFWHGDWUHSRUWLQJGDWH

$GHIHUUHGWD[DVVHWZLOOEHUHFRJQLVHGRQO\WRWKHH[WHQWWKDWLWLVSUREDEOHWKDWIXWXUHWD[DEOHSURILWVZLOOEHDYDLODEOHDJDLQVWZKLFKWKH DVVHWFDQEHXWLOLVHG'HIHUUHGWD[DVVHWVZLOOEHUHGXFHGWRWKHH[WHQWLWLVQRORQJHUSUREDEOHWKDWWKHUHODWHGWD[EHQHILWZLOOEH UHDOLVHG

Tax consolidation 2ULFD/LPLWHGLVWKHSDUHQWHQWLW\LQWKHWD[FRQVROLGDWHGJURXSFRPSULVLQJDOOZKROO\RZQHG$XVWUDOLDQHQWLWLHV

'XHWRWKHH[LVWHQFHRIDWD[VKDULQJDJUHHPHQWEHWZHHQWKHHQWLWLHVLQWKHWD[FRQVROLGDWHGJURXSWKHSDUHQWHQWLW\UHFRJQLVHVWKHWD[ HIIHFWVRILWVRZQWUDQVDFWLRQVDQGWKHFXUUHQWWD[OLDELOLWLHVDQGWKHGHIHUUHGWD[DVVHWVDULVLQJIURPXQXVHGWD[ORVVHVDQGXQXVHGWD[ FUHGLWVDVVXPHGIURPWKHVXEVLGLDU\HQWLWLHV

Individually significant items

Impact of Tax Reform in the United States

7KHFKDQJHVWRWKH86WD[OHJLVODWLRQZKLFKZHUHVLJQHGLQWRODZLQ'HFHPEHUUHGXFHGWKHIHGHUDOFRUSRUDWHWD[UDWHIURP WR7KLVFKDQJHUHVXOWHGLQWKHZULWHGRZQRIWKHQHWGHIHUUHGWD[DVVHWRIPLOOLRQ HQFRPSDVVLQJWKHGHIHUUHGWD[DVVHWZULWH GRZQDQGWKHLPSDFWRQWKHGHIHUUHGWD[OLDELOLW\ 

Critical accounting judgements and estimates

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

,QDGGLWLRQGHIHUUHGWD[DVVHWVDUHUHFRJQLVHGIRUGHGXFWLEOHWHPSRUDU\GLIIHUHQFHVDQGXQXVHGWD[ORVVHVRQO\LILWLVSUREDEOHWKDW IXWXUHWD[DEOHSURILWVDUHDYDLODEOHWRXWLOLVHWKRVHWHPSRUDU\GLIIHUHQFHVDQGORVVHVDQGWKHWD[ORVVHVFRQWLQXHWREHDYDLODEOH KDYLQJUHJDUGWRWKHQDWXUHDQGWLPLQJRIWKHLURULJLQDWLRQDQGFRPSOLDQFHZLWKWKHUHOHYDQWWD[OHJLVODWLRQDVVRFLDWHGZLWKWKHLU UHFRXSPHQW

$VVXPSWLRQVDUHDOVRPDGHDERXWWKHDSSOLFDWLRQRILQFRPHWD[OHJLVODWLRQ7KHVHDVVXPSWLRQVDUHVXEMHFWWRULVNDQGXQFHUWDLQW\ DQGWKHUHLVDSRVVLELOLW\WKDWFKDQJHVLQFLUFXPVWDQFHVRUGLIIHUHQFHVLQRSLQLRQVZLOODOWHURXWFRPHVZKLFKPD\LPSDFWWKHDPRXQW RIGHIHUUHGWD[DVVHWVDQGGHIHUUHGWD[OLDELOLWLHVUHFRUGHGRQWKH%DODQFH6KHHWDQGWKHDPRXQWRIWD[ORVVHVDQGWLPLQJGLIIHUHQFHV QRW\HWUHFRJQLVHG,QWKHVHFLUFXPVWDQFHVWKHFDUU\LQJDPRXQWRIGHIHUUHGWD[DVVHWVDQGOLDELOLWLHVPD\FKDQJHUHVXOWLQJLQDQ LPSDFWRQWKHHDUQLQJVRIWKH*URXS

Contingent tax liabilities

,QWKHQRUPDOFRXUVHRIEXVLQHVVFRQWLQJHQWOLDELOLWLHVPD\DULVHIURPWD[LQYHVWLJDWLRQVRUOHJDOSURFHHGLQJV:KHUHPDQDJHPHQW DUHRIWKHYLHZWKDWSRWHQWLDOOLDELOLWLHVKDYHDORZSUREDELOLW\RIFU\VWDOOLVLQJRULWLVQRWSRVVLEOHWRTXDQWLI\WKHPUHOLDEO\WKH\DUHQRW SURYLGHGIRUDQGDUHGLVFORVHGDVFRQWLQJHQWOLDELOLWLHV



2ULFD/LPLWHG 55 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±7D[DWLRQ )RUWKH\HDUHQGHG6HSWHPEHU  (i) Investigations and audits &RQVLVWHQWZLWKRWKHUFRPSDQLHVRIWKHVL]HDQGGLYHUVLW\RI2ULFDWKH*URXSLVWKHVXEMHFWRIRQJRLQJLQIRUPDWLRQUHTXHVWV LQYHVWLJDWLRQVDQGDXGLWDFWLYLWLHVE\WD[DQGUHJXODWRU\DXWKRULWLHVLQMXULVGLFWLRQVLQZKLFK2ULFDRSHUDWHV2ULFDFRRSHUDWHVIXOO\ ZLWKWKHWD[DQGUHJXODWRU\DXWKRULWLHV,WLVSRVVLEOHWKDW2ULFDPD\LQFXUILQHVDQGRURWKHUSHQDOWLHVDVDFRQVHTXHQFHRIWKHVH LQYHVWLJDWLRQVDQGDXGLWV

ii) Brazilian Tax Action 7KH%UD]LOLDQ7D[DWLRQ$XWKRULW\ %7$ LVFODLPLQJXQSDLGWD[HVLQWHUHVWDQGSHQDOWLHVRIDSSUR[LPDWHO\PLOOLRQIRUWKH ILQDQFLDO\HDUUHODWLQJWRDQDOOHJHGXQGHUVWDWHPHQWRILQFRPHEDVHGRQDQDXGLWRISURGXFWLRQUHFRUGV2ULFDEHOLHYHVWKHDXGLWRU KDVPLVUHDGWKRVHSURGXFWLRQUHFRUGV,&,SOFWKHYHQGRURIWKHEXVLQHVVWR2ULFDKDVEHHQQRWLILHGWRSUHVHUYH2ULFD VULJKWVXQGHU WKHWD[LQGHPQLW\REWDLQHGXSRQDFTXLVLWLRQRIWKHEXVLQHVVZKLFKSURYLGHVLQGHPQLW\IRUDPRXQWVH[FHHGLQJFHUWDLQOLPLWV7KH%7$ KDVEHHQJUDQWHGDEDQNJXDUDQWHHRIXSWRDSSUR[LPDWHO\PLOOLRQ  (iii) Australian Tax Audit $VDUHVXOWRIDQLQFRPHWD[DXGLWFRYHULQJWKHWR\HDUVWKH$XVWUDOLDQ7D[DWLRQ2IILFH $72 KDVFKDOOHQJHG2ULFD VWD[ UHWXUQVLQUHODWLRQWRWKLQFDSLWDOLVDWLRQYDOXDWLRQVRIODQGDQGEXLOGLQJVDQGLQWHOOHFWXDOSURSHUW\UHVXOWLQJLQDGHQLDORILQWHUHVW GHGXFWLRQV$VVHVVPHQWVIRUWRDPRXQWLQJWRDSSUR[LPDWHO\PLOOLRQKDYHEHHQUHFHLYHGIURPWKH$72,QWHUHVWDQG SHQDOWLHVIRUWKLVSHULRGKDYHEHHQDVVHVVHGE\WKH$72DWDSSUR[LPDWHO\PLOOLRQ2ULFDEHOLHYHVWKDWWKHYDOXDWLRQVDUHLQ DFFRUGDQFHZLWKWKHWD[ODZDQGKDVORGJHGREMHFWLRQVDJDLQVWWKHDVVHVVPHQWV

(iv) Ghana and Senegal Tax Audits $VDUHVXOWRIWD[DXGLWV*KDQDDQG6HQHJDOWD[DXWKRULWLHVKDYHLVVXHGDVVHVVPHQWVRIDSSUR[LPDWHO\PLOOLRQDQGPLOOLRQ UHVSHFWLYHO\7KH*KDQDDVVHVVPHQWFRYHUVWKHSHULRGIURPWRDQGWKH6HQHJDODVVHVVPHQWFRYHUVWKHSHULRGIURP WR7KHVHDVVHVVPHQWVZHUHXQH[SHFWHGDQGDUULYHGZLWKYHU\OLPLWHGVXSSRUWLQJGRFXPHQWDWLRQDQGFUHGLEOHDUJXPHQW %DVHGRQDGYLFH2ULFDEHOLHYHVWKDWWKHDVVHVVPHQWVDUHQRWLQDFFRUGDQFHZLWKWKHWD[ODZDQGLQWHQGVWRVWURQJO\GHIHQGERWK PDWWHUV 



56 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

6HFWLRQ)*URXSVWUXFWXUH

2ULFDKDVDGLYHUVHVSUHDGRIJOREDORSHUDWLRQVZKLFKLQFOXGHVFRQWUROOHGHQWLWLHVLQFRUSRUDWHGLQRYHUFRXQWULHVDVZHOODV HQWHULQJVWUDWHJLFSDUWQHULQJDUUDQJHPHQWVZLWKFHUWDLQWKLUGSDUWLHV7KLVVHFWLRQKLJKOLJKWVWKH*URXSVWUXFWXUHLQFOXGLQJ2ULFD¶V FRQWUROOHGHQWLWLHVDVZHOODVWKRVHZKHUH2ULFDKROGVOHVVWKDQLQWHUHVW   ,QYHVWPHQWVLQFRQWUROOHGHQWLWLHV

Recognition and Measurement

7KHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVDUHSUHSDUHGE\FRPELQLQJWKHILQDQFLDOVWDWHPHQWVRIDOOWKHHQWLWLHVWKDWFRPSULVHWKH*URXS EHLQJWKH&RPSDQ\ WKHSDUHQWHQWLW\ DQGLWVVXEVLGLDULHVDVGHILQHGLQ$$6% Consolidated Financial Statements.

&RQVLVWHQWDFFRXQWLQJSROLFLHVDUHHPSOR\HGLQWKHSUHSDUDWLRQDQGSUHVHQWDWLRQRIWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWV2Q DFTXLVLWLRQWKHDVVHWVOLDELOLWLHVDQGFRQWLQJHQWOLDELOLWLHVRIDVXEVLGLDU\DUHPHDVXUHGDWWKHLUIDLUYDOXHVDWWKHGDWHRIDFTXLVLWLRQ

$Q\H[FHVVRIWKHFRVWRIDFTXLVLWLRQRYHUWKHIDLUYDOXHVRIWKHLGHQWLILDEOHQHWDVVHWVDFTXLUHGLVUHFRJQLVHGDVJRRGZLOO,IDIWHU UHDVVHVVPHQWWKHIDLUYDOXHVRIWKHLGHQWLILDEOHQHWDVVHWVDFTXLUHGH[FHHGWKHFRVWRIDFTXLVLWLRQWKHH[FHVVLVFUHGLWHGWRWKH,QFRPH 6WDWHPHQWLQWKHSHULRGRIDFTXLVLWLRQ

7KHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVLQFOXGHWKHLQIRUPDWLRQDQGUHVXOWVRIHDFKVXEVLGLDU\IURPWKHGDWHRQZKLFKWKH&RPSDQ\ REWDLQVFRQWUROXQWLOVXFKWLPHDVWKH&RPSDQ\FHDVHVWRFRQWUROVXFKHQWLW\,QSUHSDULQJWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVDOO LQWHUFRPSDQ\EDODQFHVWUDQVDFWLRQVDQGXQUHDOLVHGSURILWVDULVLQJZLWKLQWKH*URXSDUHHOLPLQDWHGLQIXOO

5HIHUWRQRWHIRUWKHOLVWRILQYHVWPHQWVLQFRQWUROOHGHQWLWLHV

 1RQFRQWUROOLQJLQWHUHVWVLQFRQWUROOHGHQWLWLHV &RQVROLGDWHG    P P 1RQFRQWUROOLQJLQWHUHVWVLQVKDUHKROGHUV HTXLW\DWEDODQFHGDWHLVDVIROORZ V &RQWULEXWHGHTXLW\   5HVHUYHV     5HWDLQHGHDUQLQJV     

7KHIROORZ LQJWDEOHVXPPDULVHVWKHLQIRUPDWLRQUHODWLQJWRQRQFRQWUROOLQJLQWHUHVWVRQDEDVLV 7KHDPRXQWVGLVFORVHGDUHEHIRUHLQWHUFRPSDQ\HOLPLQDWLRQV &XUUHQWDVVHWV   &XUUHQWOLDELOLWLHV   &XUUHQWQHWDVVHWV   1RQFXUUHQWDVVHWV   1RQFXUUHQWOLDELOLWLHV   1RQFXUUHQWQHWOLDELOLWLHV     1HWDVVHWV OLDELOLWLHV   

&DUU\LQJDPRXQWRIQRQFRQWUROOLQJLQWHUHVWV  

6DOHV5HYHQXH   1HWSURILWIRUWKH\HDU   2WKHUFRPSUHKHQVLYH ORVV     7RWDOFRPSUHKHQVLYHORVV  

3URILWDOORFDWHGWRQRQFRQWUROOLQJLQWHUHVWV   2WKHUFRPSUHKHQVLYHLQFRPHUHODWHGWRQRQFRQWUROOLQJLQWHUHVWV     7RWDO   'LYLGHQGVSDLGQRQFRQWUROOLQJLQWHUHVWV     &DVKIORZ VIURPRSHUDWLQJDFWLYLWLHV   &DVKIORZ VXVHGLQLQYHVWPHQWVDFWLYLWLHV     &DVKIORZ VIURP XVHG LQILQDQFLQJDFWLYLWLHV    1HWLQFUHDVHLQFDVKDQGFDVKHTXLYDOHQWV  

2ULFD/LPLWHG 57 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 ,QYHVWPHQWVDFFRXQWHGIRUXVLQJWKHHTXLW\PHWKRGDQGMRLQWRSHUDWLRQV

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

6XPPDU\RISURILWDQGORVVRIDVVRFLDWHV   P P 7KHDJJUHJDWHQHWSURILWDIWHUWD[RIDVVRFLDWHVRQDEDVLVDUH   2ULFD VVKDUHRIQHWSURILWDIWHUWD[RIDVVRFLDWHVLV  

(b) Joint operations

7KH*URXSRZQVDLQWHUHVWRI

      6DOHVRIJRRGVWRDVVRFLDWHV   3XUFKDVHVRIJRRGVIURPDVVRFLDWHV   'LYLGHQGLQFRPHUHFHLYHGIURPDVVRFLDWHV    G 7UDQVDFWLRQVZLWKUHODWHGSDUWLHV   $OOWUDQVDFWLRQVZLWKRWKHUUHODWHGSDUWLHVDUHPDGHRQQRUPDOFRPPHUFLDOWHUPVDQGFRQGLWLRQVDQGLQWKHRUGLQDU\FRXUVHRI EXVLQHVV

 

58 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 ,QYHVWPHQWVDFFRXQWHGIRUXVLQJWKHHTXLW\PHWKRGDQGMRLQWRSHUDWLRQV FRQWLQXHG 

Recognition and Measurement

Associate entities

:KHUH2ULFDKROGVDQLQWHUHVWLQWKHHTXLW\RIDQHQWLW\JHQHUDOO\RIEHWZHHQSHUFHQWDQGSHUFHQWDQGLVDEOHWRVLJQLILFDQWO\ LQIOXHQFHWKHGHFLVLRQVRIWKHHQWLW\WKDWHQWLW\LVDQDVVRFLDWHGHQWLW\,QYHVWPHQWVLQDVVRFLDWHVDUHDFFRXQWHGIRULQWKHFRQVROLGDWHG ILQDQFLDOVWDWHPHQWVXVLQJWKHHTXLW\PHWKRGRIDFFRXQWLQJ

Joint operations

$MRLQWRSHUDWLRQLVDMRLQWDUUDQJHPHQWZKHUHE\WKHSDUWLHVWKDWKDYHMRLQWFRQWURORIWKHDUUDQJHPHQWKDYHULJKWVWRWKHDVVHWVDQG REOLJDWLRQVIRUWKHOLDELOLWLHVUHODWLQJWRWKHDUUDQJHPHQW2ULFDUHFRJQLVHVLWVVKDUHRIDQ\MRLQWO\KHOGRULQFXUUHGDVVHWVOLDELOLWLHV UHYHQXHDQGH[SHQVHVLQWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVXQGHUDSSOLFDEOHKHDGLQJV



2ULFD/LPLWHG 59 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 %XVLQHVVHVDQGQRQFRQWUROOLQJLQWHUHVWVDFTXLUHG

&RQVROLGDWHG $FTXLVLWLRQRIEXVLQHVVHVDQGFRQWUROOHGHQWLWLHV

%XVLQHVVFRPELQDWLRQVDUHDFFRXQWHGIRUXQGHUWKHDFTXLVLWLRQPHWKRGZ KHQFRQWUROLVWUDQVIHUUHGWRWKH*URXSLQDFFRUGDQFH Z LWK$$6%Business Combinations 2QDFTXLVLWLRQWKHDVVHWVOLDELOLWLHVDQGFRQWLQJHQWOLDELOLWLHVRIDVXEVLGLDU\DUH PHDVXUHGDWWKHLUIDLUYDOXHVDWWKHGDWHRIDFTXLVLWLRQ$Q\H[FHVVRIWKHFRVWRIDFTXLVLWLRQRYHUWKHIDLUYDOXHVRIWKHLGHQWLILDEOH QHWDVVHWVDFTXLUHGLVUHFRJQLVHGDVJRRGZ LOO7KHWUDQVDFWLRQFRVWVDUHH[SHQVHGLQWKH,QFRPH6WDWHPHQW

7KH*URXSDFTXLUHGWKHIROORZ LQJEXVLQHVVHVDQGHQWLWLHV XQOHVVVWDWHGRWKHUZ LVH  

7KHVHILQDQFLDOVWDWHPHQWVLQFOXGHWKHSURYLVLRQDOSXUFKDVHSULFHDOORFDWLRQRIDFTXLUHGQHWDVVHWV$FFRXQWLQJVWDQGDUGVSHUPLW DPHDVXUHPHQWSHULRGRIXSWRRQH\HDUGXULQJZ KLFKDFTXLVLWLRQDFFRXQWLQJFDQEHILQDOLVHGIROORZ LQJWKHDFTXLVLWLRQGDWH

7KHYDOXDWLRQWHFKQLTXHVXVHGIRUPHDVXULQJWKHIDLUYDOXHRIPDWHULDOLQWDQJLEOHVZ HUHWKHUHOLHIIURPUR\DOW\PHWKRGDQG UHSODFHPHQWFRVWDSSURDFK7KHUHOLHIIURPUR\DOW\PHWKRGZ DVXVHGWRYDOXH*URXQG3UREH¶VEUDQGDQGDVVRFLDWHGWUDGHPDUNV SDWHQWHGDQGXQSDWHQWHG,QWHOOHFWXDO3URSHUW\DQGH[SHULHQFHGDWDEDVH7KLVPHWKRGPHDVXUHVWKHDIWHUWD[UR\DOWLHVRUOLFHQFH IHHVVDYHGE\RZ QLQJWKHLQWDQJLEOHDVVHW*URXQG3UREH¶VVRIWZ DUHKDVEHHQYDOXHGXVLQJWKHUHSODFHPHQWFRVWDSSURDFK 7KLVPHWKRGPHDVXUHVWKHFRVWWRUHFUHDWHRUUHSODFHWKHVRIWZ DUHEDVHGRQWKHQRWLRQWKDWDPDUNHWSDUWLFLSDQWZ RXOGQRWSD\ PRUHWKDQWKHFRVWWRFUHDWHDFRPSDUDEOHDVVHW)RURWKHUPDWHULDODVVHWVDFTXLUHGERRNYDOXHDSSUR[LPDWHVWRIDLUYDOXH

7KH*URXSLQFXUUHGDFTXLVLWLRQUHODWHGFRVWVRIP7KHVHDPRXQWVKDYHEHHQLQFOXGHGLQRWKHUH[SHQVHVLQWKH,QFRPH 6WDWHPHQWIRUWKH\HDUHQGHG6HSWHPEHU

5HVXOWVFRQWULEXWHGE\DFTXLUHGHQWLWLHVVLQFHDFTXLVLWLRQGDWH P 5HYHQXHIRUWKH\HDU  3URILWEHIRUHWD[IRUWKHSHULRG 

,IWKHDFTXLVLWLRQVKDGRFFXUUHGRQ2FWREHUWKHXQDXGLWHGRSHUDWLQJUHYHQXHDQGSURILW EHIRUHWD[IRUWKH*URXSIRUWKH\HDUWR6HSWHPEHUZ RXOGKDYHEHHQ P 5HYHQXHIRUWKHSHULRG  3URILWEHIRUHWD[IRUWKHSHULRG 

7KHXQDXGLWHGLQIRUPDWLRQDWWKHWLPHRIDFTXLVLWLRQZ DVFRPSLOHGE\2ULFDPDQDJHPHQWEDVHGRQILQDQFLDOLQIRUPDWLRQ DYDLODEOHWR2ULFDGXULQJGXHGLOLJHQFHDQGDVVXPLQJQRPDWHULDOWUDQVDFWLRQVEHWZ HHQ2ULFDDQGWKHDFTXLUHGEXVLQHVVHV *RRGZ LOORQWKHSXUFKDVHRIWKH*URXQG3UREH*URXSLVDWWULEXWDEOHPDLQO\WRWKHVNLOOVDQGWHFKQLFDOWDOHQWRIWKHDFTXLUHGEXVLQHVVHV Z RUNIRUFHVDQGWKHV\QHUJLHVH[SHFWHGWREHDFKLHYHGIURPLQWHJUDWLQJWKHVHEXVLQHVVHV1RQHRIWKHJRRGZ LOOUHFRJQLVHG LVH[SHFWHGWREHGHGXFWLEOHIRULQFRPHWD[SXUSRVHV

'XULQJWKH\HDUWKH*URXSKDVLQFUHDVHGLWVLQWHUHVWLQLQGLYLGXDOO\LPPDWHULDOVXEVLGLDULHVSD\LQJPUHIHUWRQRWHIRU DGGLWLRQDOLQIRUPDWLRQ &RQVROLGDWHG 'XULQJILQDQFLDO\HDUWKHFRQVROLGDWHGHQWLW\GLGQRWDFTXLUHDQ\EXVLQHVVHVVRUHQWLWLHV

60 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 %XVLQHVVHVGLVSRVHG            'LVSRVDORIEXVLQHVVHVDQGFRQWUROOHGHQWLWLHV 7KHIROORZ LQJEXVLQHVVHVDQGFRQWUROOHGHQWLWLHVZ HUHGLVSRVHGRI   

  7KH*URXSGLGQRWGLVSRVHRIDQ\EXVLQHVVHVRUHQWLWLHVLQ)<

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

2ULFD/LPLWHG 61 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 3DUHQW&RPSDQ\GLVFORVXUH2ULFD/LPLWHG

&RPSDQ\   P P 7RWDOFXUUHQWDVVHWV   7RWDODVVHWV   7RWDOFXUUHQWOLDELOLWLHV   7RWDOOLDELOLWLHV   (TXLW\ 2UGLQDU\VKDUHV   5HWDLQHGHDUQLQJV   7RWDOHTXLW\DWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUVRI2ULFD/LPLWHG   

1HWSURILWIRUWKH\HDUDQGWRWDOFRPSUHKHQVLYHLQFRPH  

7KH&RPSDQ\GLGQRWKDYHDQ\FRQWUDFWXDOFRPPLWPHQWVIRUWKHDFTXLVLWLRQRISURSHUW\SODQWRUHTXLSPHQWLQWKHFXUUHQWRU

SUHYLRXV\HDUV

&RQWLQJHQWOLDELOLWLHVDQGFRQWLQJHQWDVVHWV

8QGHUWKHWHUPVRID'HHGRI&URVV*XDUDQWHHHQWHUHGLQWRXQGHUASIC Corporations (Wholly-owned Companies) Instrument 2016/785 HDFKFRPSDQ\Z KLFKLVDSDUW\WRWKH'HHGKDVFRYHQDQWHGZ LWKWKH7UXVWHHRIWKH'HHGWRJXDUDQWHHWKHSD\PHQWRI DQ\GHEWVRIWKHRWKHUFRPSDQLHVZ KLFKDUHSDUW\WRWKH'HHGZ KLFKPLJKWDULVHRQWKHZ LQGLQJXSRIWKRVHFRPSDQLHV$ FRQVROLGDWHG%DODQFH6KHHWDQG,QFRPH6WDWHPHQWIRUWKLVFORVHGJURXSLVVKRZ QLQQRWH 2ULFD/LPLWHGKDVSURYLGHGJXDUDQWHHVWR([SRUW)LQDQFHDQG,QVXUDQFH&RUSRUDWLRQDQGEDQNVIRUORDQVUHODWLQJWRWKH %RQWDQJ$PPRQLXP1LWUDWHSODQW

2ULFD/LPLWHGJXDUDQWHHGVHQLRUQRWHVLVVXHGLQWKH863ULYDWH3ODFHPHQWPDUNHWLQDQG7KHQRWHV KDYHPDWXULWLHVEHWZ HHQFDOHQGDU\HDUVDQG EHWZ HHQFDOHQGDU\HDUVDQG  VHHQRWHVDQG  2ULFD/LPLWHGKDVDOVRSURYLGHGJXDUDQWHHVIRUVHQLRUFRPPLWWHGEDQNIDFLOLWLHV

62 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±*URXSVWUXFWXUH )RUWKH\HDUHQGHG6HSWHPEHU

 'HHGRI&URVV*XDUDQWHH 7KHSDUHQWHQWLW\2ULFD/LPLWHGDQGFHUWDLQVXEVLGLDULHVDUHVXEMHFWWRD'HHGRI&URVV*XDUDQWHH 'HHG XQGHUZ KLFKHDFKFRPSDQ\ JXDUDQWHHVWKHGHEWVRIWKHRWKHUV

7KHSDUWLHVWRWKHGHHGDUH ͻ,QLWLDWLQJ([SORVLYHV6\VWHPV3W\/WG ͻ2ULFD([SORVLYHV+ROGLQJV1R3W\/WG DGGHGLQ)< ͻ2ULFD$XVWUDOLD3W\/WG ͻ2ULFD([SORVLYHV7HFKQRORJ\3W\/WG DGGHGLQ)< ͻ2ULFD,QYHVWPHQWV3W\/WG ͻ2ULFD,&$VVHWV3W\/WG DGGHGLQ)< ͻ2ULFD([SORVLYHV+ROGLQJV3W\/WG DGGHGLQ)<

%\HQWHULQJLQWRWKH'HHGWKHZ KROO\RZ QHGVXEVLGLDULHVKDYHEHHQUHOLHYHGIURPWKHUHTXLUHPHQWWRSUHSDUHDILQDQFLDOUHSRUWDQG 'LUHFWRUV UHSRUWXQGHUASIC Corporations (Wholly-owned Companies) Instrument 2016/785 

$FRQVROLGDWHGLQFRPHVWDWHPHQWDQGFRQVROLGDWHGEDODQFHVKHHWLVVKRZ QEHORZ 

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

6XPPDULVHGLQFRPHVWDWHPHQWDQGUHWDLQHGSURILWV 3URILWEHIRUHLQFRPHWD[H[SHQVH   ,QFRPHWD[H[SHQVH   3URILWIURPRSHUDWLRQV   5HWDLQHGSURILWVDWWKHEHJLQQLQJRIWKH\HDU   5HWDLQHGORVVHVRIFRPSDQLHVHQWHULQJWKH'HHG   $FWXDULDOORVVHV JDLQV UHFRJQLVHGGLUHFWO\LQHTXLW\   2UGLQDU\GLYLGHQGV±LQWHULP   2UGLQDU\GLYLGHQGV±ILQDO   5HWDLQHGSURILWVDWWKHHQGRIWKH\HDU  

 2WKHUDVVHWVLQFOXGHQHWWD[UHFHLYDEOHVZLWK*URXSHQWLWLHVRXWVLGHWKH'HHGR I&UR VV*XDUDQWHH 

2ULFD/LPLWHG 63 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

6HFWLRQ*5HZDUGDQGUHFRJQLWLRQ

2ULFDRSHUDWHVLQPRUHWKDQFRXQWULHVDQGKDVPRUHWKDQHPSOR\HHV7KLVVHFWLRQSURYLGHVLQVLJKWVLQWRWKHUHZDUGDQG UHFRJQLWLRQRIHPSOR\HHVLQDGGLWLRQWRWKHHPSOR\HHEHQHILWVH[SHQVHDQGHPSOR\HHSURYLVLRQVGLVFORVHGLQWKH,QFRPH6WDWHPHQW DQGQRWHUHVSHFWLYHO\  7KLVVHFWLRQVKRXOGEHUHDGLQFRQMXQFWLRQZLWKWKH5HPXQHUDWLRQ5HSRUWFRQWDLQHGZLWKLQWKH'LUHFWRUV¶5HSRUWZKLFKSURYLGHV VSHFLILFGHWDLOVRQWKHVHWWLQJRIUHPXQHUDWLRQIRU.H\0DQDJHPHQW3HUVRQQHO   (PSOR\HHVKDUHSODQVDQGUHPXQHUDWLRQ  7KHIROORZLQJSODQVKDYHRSWLRQVRUULJKWV ³LQVWUXPHQWV´ RYHU2ULFDVKDUHVRXWVWDQGLQJDW6HSWHPEHURU6HSWHPEHU x 7KH/RQJ7HUP,QFHQWLYH3ODQ /7,3  UHIHUWR5HPXQHUDWLRQ5HSRUW  x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

x (PSOR\HHVDUHJUDQWHGDQXPEHURIULJKWVZKLFKYHVWXSRQWKHVDWLVIDFWLRQRIDWLPHEDVHGKXUGOHJHQHUDOO\DOLJQHGWRWKHLU DQQLYHUVDU\RIMRLQLQJ2ULFD x 7KHQXPEHURIULJKWVJUDQWHGWRHDFKHPSOR\HHLVEDVHGRQHLWKHUDVSHFLILHGSHUFHQWDJHRIWKHLUIL[HGUHPXQHUDWLRQRUD VWUDLJKWGROODUYDOXH7KHYDOXHLVGHWHUPLQHGRQDQLQGLYLGXDOEDVLVEXWJHQHUDOO\DOLJQHGWRHLWKHUWKHLUIXWXUH/7,3JUDQW SHUFHQWDJHRUWKHIRUHJRQHDWULVNUHPXQHUDWLRQIURPWKHLUSUHYLRXVHPSOR\HU x (DFKULJKWLVDQHQWLWOHPHQWWREHDOORFDWHGRQHRUGLQDU\VKDUHLQ2ULFD x 5LJKWVDUHXQOLVWHGDQGGRQRWFDUU\DQ\GLYLGHQGRUYRWLQJULJKWV x 6KDUHVDOORFDWHGXSRQYHVWLQJRIULJKWVPD\EHHLWKHUQHZO\LVVXHGVKDUHVRUH[LVWLQJVKDUHVDFTXLUHGRQPDUNHW x +ROGHUVRIULJKWVWKDWOHDYHWKH*URXSSULRUWRWKHHQGRIWKHSHUIRUPDQFHSHULRGZLOOLQJHQHUDOIRUIHLWWKHLUULJKWV7KH %RDUGKDVGLVFUHWLRQWRDOORZDQXPEHURIULJKWVUHPDLQµRQIRRW¶WREHWHVWHGDQGYHVWLIWKHKROGHUOHDYHVGXHWRGHDWK GLVDELOLW\RURWKHU%RDUGDSSURYHGUHDVRQ 

6LJQRQ5LJKWVDOORFDWLRQVYDOXHVDQGUHODWHGLQIRUPDWLRQLVVKRZQLQWKHIROORZLQJWDEOH

*UDQW 9HVWLQJ 1XPEHU 1XPEHURI 1XPEHURI 1XPEHURI 1XPEHURI 9DOXHRI GDWHV GDWH RIULJKWV ULJKWVKHOG ULJKWVKHOG SDUWLFLSDQWV SDUWLFLSDQWV ULJKWVDW LVVXHG DW DW DW DW JUDQW 6HSWHPEHU 6HSWHPEHU 6HSWHPEHU 6HSWHPEHU GDWH        -DQ -XQ±       ±6HS 2FW

  7KHLQSXWVXQGHUO\LQJWKHULJKWVYDOXDWLRQVDUH  *UDQWGDWHV 3ULFHRI2ULFD ([SHFWHG 'LYLGHQGV 5LVNIUHH )DLUYDOXH VKDUHVDWJUDQWGDWH YRODWLOLW\LQ H[SHFWHGRQ LQWHUHVW SHUULJKW  VKDUHSULFH VKDUHV UDWH     -DQ±6HS       

64 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

 (PSOR\HHVKDUHSODQVDQGUHPXQHUDWLRQ FRQWLQXHG   E .H\0DQDJHPHQW3HUVRQQHOFRPSHQVDWLRQVXPPDU\ $VGHHPHGXQGHU$$6%Related Parties Disclosures.H\0DQDJHPHQW3HUVRQQHO .03 LQFOXGHHDFKRIWKH'LUHFWRUVERWK ([HFXWLYHDQG1RQ([HFXWLYHDQGWKRVHPHPEHUVRIWKH([HFXWLYH&RPPLWWHHZKRKDYHDXWKRULW\DQGUHVSRQVLELOLW\IRUSODQQLQJ GLUHFWLQJDQGFRQWUROOLQJWKHDFWLYLWLHVRI2ULFD

$VXPPDU\RIWKH.03FRPSHQVDWLRQLVVHWRXWLQWKHIROORZLQJWDEOH

 &RQVROLGDWHG      6KRUWWHUPHPSOR\HHEHQHILWV   2WKHUORQJWHUPEHQHILWV   3RVWHPSOR\PHQWEHQHILWV   6KDUHEDVHGSD\PHQWV   7HUPLQDWLRQEHQHILWV       ,QIRUPDWLRQUHJDUGLQJLQGLYLGXDO'LUHFWRUVDQG([HFXWLYHVFRPSHQVDWLRQDQGVRPHHTXLW\LQVWUXPHQWGLVFORVXUHVDVSHUPLWWHGE\ &RUSRUDWLRQ5HJXODWLRQV0DUHSURYLGHGLQWKH5HPXQHUDWLRQ5HSRUW

  

2ULFD/LPLWHG 65 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

 6XSHUDQQXDWLRQFRPPLWPHQWV

Recognition and Measurement

&RQWULEXWLRQVWRGHILQHGFRQWULEXWLRQVXSHUDQQXDWLRQIXQGVDUHUHFRJQLVHGLQWKH,QFRPH6WDWHPHQWLQWKH\HDULQZKLFKWKHH[SHQVHLV LQFXUUHG)RUHDFKGHILQHGEHQHILWVFKHPHWKHFRVWRISURYLGLQJUHWLUHPHQWEHQHILWVLVH[SHQVHGLQWKH,QFRPH6WDWHPHQWVRDVWR UHFRJQLVHFXUUHQWDQGSDVWVHUYLFHFRVWVLQWHUHVWFRVWRQQHWOLDELOLWLHVDQGWKHHIIHFWRIDQ\FXUWDLOPHQWVRUVHWWOHPHQWV$FWXDULDOJDLQV DQGORVVHVIRUSRVWUHWLUHPHQWSODQVDUHUHFRJQLVHGLQRWKHUFRPSUHKHQVLYHLQFRPH7KH*URXS¶VQHWOLDELOLWLHVLQUHVSHFWRIGHILQHG EHQHILWSHQVLRQSODQVLVFDOFXODWHGE\HVWLPDWLQJWKHDPRXQWRIIXWXUHEHQHILWWKDWHPSOR\HHVKDYHHDUQHGLQUHWXUQIRUWKHLUVHUYLFHLQ WKHFXUUHQWDQGSULRUSHULRGVWKDWEHQHILWLVGLVFRXQWHGWRGHWHUPLQHLWVSUHVHQWYDOXHDQGWKHIDLUYDOXHRIDQ\SODQDVVHWVLVGHGXFWHG 7KHGLVFRXQWUDWHLVWKH\LHOGDWWKHEDODQFHVKHHWGDWHRQKLJKTXDOLW\FRUSRUDWHERQGVRULQFRXQWULHVZKHUHWKHUHLVQRGHHSPDUNHWLQ VXFKERQGVWKHPDUNHW\LHOGVRQJRYHUQPHQWERQGVWKDWKDYHPDWXULW\GDWHVDSSUR[LPDWLQJWKHWHUPVRIWKH*URXS¶VREOLJDWLRQV7KH FDOFXODWLRQLVSHUIRUPHGDQQXDOO\E\DTXDOLILHGDFWXDU\XVLQJWKHSURMHFWHGXQLWFUHGLWPHWKRG

D 6XSHUDQQXDWLRQSODQV

7KH*URXSFRQWULEXWHVWRDQXPEHURIVXSHUDQQXDWLRQSODQVWKDWH[LVWWRSURYLGHEHQHILWIRUHPSOR\HHVDQGWKHLUGHSHQGDQWVRQ UHWLUHPHQWGLVDELOLW\RUGHDWK7KHVXSHUDQQXDWLRQSODQVFRYHUFRPSDQ\VSRQVRUHGSODQVRWKHUTXDOLI\LQJSODQVDQGPXOWLHPSOR\HU LQGXVWU\XQLRQSODQV

&RPSDQ\VSRQVRUHGSODQV

x 7KHSULQFLSDOEHQHILWVDUHSHQVLRQVRUOXPSVXPSD\PHQWVIRUPHPEHUVRQUHVLJQDWLRQUHWLUHPHQWGLVDELOLW\RUGHDWK7KH EHQHILWVDUHSURYLGHGRQHLWKHUDGHILQHGEHQHILWRUGHILQHGFRQWULEXWLRQEDVLV x (PSOR\HHFRQWULEXWLRQUDWHVDUHHLWKHUIL[HGE\WKHUXOHVRIWKHSODQVRUVHOHFWHGE\PHPEHUVIURPWLPHWRWLPHIURPD VSHFLILHGUDQJHRIUDWHV7KHHPSOR\HUHQWLWLHVFRQWULEXWHWKHEDODQFHRIWKHFRVWUHTXLUHGWRIXQGWKHGHILQHGEHQHILWVRULQ WKHFDVHRIGHILQHGFRQWULEXWLRQSODQVWKHDPRXQWVUHTXLUHGE\WKHUXOHVRIWKHSODQ x 7KHFRQWULEXWLRQVPDGHE\WKHHPSOR\HUHQWLWLHVWRGHILQHGFRQWULEXWLRQSODQVDUHLQDFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIWKH JRYHUQLQJUXOHVRIVXFKSODQVRUDUHUHTXLUHGXQGHUODZ  *RYHUQPHQWSODQV

x 6RPHFRQWUROOHGHQWLWLHVSDUWLFLSDWHLQJRYHUQPHQWSODQVRQEHKDOIRIFHUWDLQHPSOR\HHVZKLFKSURYLGHSHQVLRQEHQHILWV 7KHUHH[LVWVDOHJDOO\HQIRUFHDEOHREOLJDWLRQRQHPSOR\HUHQWLWLHVWRFRQWULEXWHDVUHTXLUHGE\OHJLVODWLRQ  ,QGXVWU\SODQV

x 6RPHFRQWUROOHGHQWLWLHVSDUWLFLSDWHLQLQGXVWU\SODQVRQEHKDOIRIFHUWDLQHPSOR\HHV x 7KHVHSODQVRSHUDWHRQDQDFFXPXODWLRQEDVLVDQGSURYLGHOXPSVXPEHQHILWVIRUPHPEHUVRQUHVLJQDWLRQUHWLUHPHQW GLVDELOLW\RUGHDWK x 7KHHPSOR\HUHQWLWLHVKDYHDOHJDOO\HQIRUFHDEOHREOLJDWLRQWRFRQWULEXWHDUHJXODUDPRXQWIRUHDFKHPSOR\HHPHPEHURI WKHVHSODQV x 7KHHPSOR\HUHQWLWLHVKDYHQRRWKHUOHJDOOLDELOLW\WRFRQWULEXWHWRWKHSODQV  E 'HILQHGFRQWULEXWLRQSHQVLRQSODQV

7KH*URXSFRQWULEXWHVWRVHYHUDOGHILQHGFRQWULEXWLRQSHQVLRQSODQVRQEHKDOIRILWVHPSOR\HHV7KHDPRXQWUHFRJQLVHGDVDQH[SHQVH IRUWKHILQDQFLDO\HDUHQGHG6HSWHPEHUZDVPLOOLRQ PLOOLRQ 

F 'HILQHGEHQHILWSHQVLRQSODQV

7KH*URXSSDUWLFLSDWHVLQVHYHUDO$XVWUDOLDQDQGRYHUVHDVGHILQHGEHQHILWSRVWHPSOR\PHQWSODQVWKDWSURYLGHEHQHILWVWRHPSOR\HHV XSRQUHWLUHPHQW3ODQIXQGLQJLVFDUULHGRXWLQDFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIWUXVWGHHGVDQGWKHDGYLFHRIDFWXDULHV7KH LQIRUPDWLRQZLWKLQWKHVHILQDQFLDOVWDWHPHQWVKDVEHHQSUHSDUHGE\WKHORFDOSODQH[WHUQDODFWXDULHV2ULFDZHUHDVVLVWHGE\:LOOLV 7RZHUV:DWVRQWRFRQVROLGDWHWKRVHUHVXOWVJOREDOO\'XULQJWKH\HDUWKH*URXSPDGHHPSOR\HUFRQWULEXWLRQVRI PLOOLRQ PLOOLRQ WRGHILQHGEHQHILWSODQV7KH*URXS¶VH[WHUQDODFWXDULHVKDYHIRUHFDVWWRWDOHPSOR\HUFRQWULEXWLRQV DQGEHQHILWSD\PHQWVWRGHILQHGEHQHILWSODQVRIPLOOLRQIRU

 

66 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

 6XSHUDQQXDWLRQFRPPLWPHQWV FRQWLQXHG  F  L %DODQFH6KHHWDPRXQWV

7KHDPRXQWVUHFRJQLVHGLQWKH%DODQFH6KHHWDUHGHWHUPLQHGDVIROORZV

    P P 3UHVHQWYDOXHRIWKHIXQGHGGHILQHGEHQHILWREOLJDWLRQV   3UHVHQWYDOXHRIXQIXQGHGGHILQHGEHQHILWREOLJDWLRQV   )DLUYDOXHRIGHILQHGEHQHILWSODQDVVHWV     'HILFLW   5HVWULFWLRQRQDVVHWVUHFRJQLVHG   1HWOLDELOLW\LQWKH%DODQFH6KHHW   $PRXQWVLQ%DODQFH6KHHW   /LDELOLWLHV   $VVHWV     1HWOLDELOLW\UHFRJQLVHGLQ%DODQFH6KHHWDWHQGRI\HDU      F  LL $PRXQWVUHFRJQLVHGLQWKH,QFRPH6WDWHPHQW

7KHDPRXQWVUHFRJQLVHGLQWKH,QFRPH6WDWHPHQWDUHDVIROORZV

    P P &XUUHQWVHUYLFHFRVW   ,QWHUHVWFRVWRQQHWGHILQHGEHQHILWOLDELOLWLHV   &XUWDLOPHQWRUVHWWOHPHQW JDLQV      7RWDOLQFOXGHGLQHPSOR\HHEHQHILWVH[SHQVH  

F  LLL $PRXQWVLQFOXGHGLQWKH6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH

    P P $FWXDULDOJDLQV ORVVHV RQGHILQHGEHQHILWREOLJDWLRQV   'XHWRFKDQJHVLQGHPRJUDSKLFDVVXPSWLRQV    'XHWRFKDQJHVLQILQDQFLDODVVXPSWLRQV   'XHWRH[SHULHQFHDGMXVWPHQWV     7RWDO    &KDQJHLQLUUHFRYHUDEOHVXUSOXVRWKHUWKDQLQWHUHVW   5HWXUQRQSODQDVVHWVJUHDWHUWKDQGLVFRXQWUDWH   7RWDOJDLQVUHFRJQLVHGYLDWKH6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH   7D[H[SHQVHRQWRWDOJDLQVUHFRJQLVHGYLDWKH6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH     7RWDOJDLQVDIWHUWD[UHFRJQLVHGYLDWKH6WDWHPHQWRI&RPSUHKHQVLYH,QFRPH    F  LY 5HFRQFLOLDWLRQV

      P P 5HFRQFLOLDWLRQRISUHVHQWYDOXHRIWKHGHILQHGEHQHILWREOLJDWLRQV   %DODQFHDWWKHEHJLQQLQJRIWKH\HDU   &XUUHQWVHUYLFHFRVW   ,QWHUHVWFRVW   $FWXDULDO JDLQV ORVVHV    &RQWULEXWLRQVE\SODQSDUWLFLSDQWV   %HQHILWVSDLG     6HWWOHPHQWVFXUWDLOPHQWV     ([FKDQJHGLIIHUHQFHVRQIRUHLJQIXQGV   %DODQFHDWWKHHQGRIWKH\HDU        

2ULFD/LPLWHG 67 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

 6XSHUDQQXDWLRQFRPPLWPHQWV FRQWLQXHG       P P 5HFRQFLOLDWLRQRIWKHIDLUYDOXHRIWKHSODQDVVHWV   %DODQFHDWWKHEHJLQQLQJRIWKH\HDU   ,QWHUHVWLQFRPHRQSODQDVVHWV   5HWXUQRQSODQDVVHWVJUHDWHUWKDQGLVFRXQWUDWH   &RQWULEXWLRQVE\SODQSDUWLFLSDQWV   &RQWULEXWLRQVE\HPSOR\HU   %HQHILWVSDLG     6HWWOHPHQWVFXUWDLOPHQWV    2WKHU     ([FKDQJHGLIIHUHQFHVRQIRUHLJQIXQGV   %DODQFHDWWKHHQGRIWKH\HDU   

7KHIDLUYDOXHRISODQDVVHWVGRHVQRWLQFOXGHDQ\DPRXQWVUHODWLQJWRWKH*URXS¶VRZQILQDQFLDOLQVWUXPHQWVSURSHUW\RFFXSLHGE\RU RWKHUDVVHWVXVHGE\WKH*URXS

     P P &RPSULVLQJ  4XRWHGLQDFWLYHPDUNHWV   (TXLWLHV   'HEWVHFXULWLHV   3URSHUW\   2WKHUTXRWHGVHFXULWLHV   2WKHU   3URSHUW\   ,QVXUDQFHFRQWUDFWV   &DVKDQGFDVKHTXLYDOHQWV       7KHSULQFLSDODVVXPSWLRQVDSSOLHGLQGHWHUPLQLQJWKHSUHVHQWYDOXHRIGHILQHGEHQHILWREOLJDWLRQVDQGWKHLUEDVHVZHUHDVIROORZV

x 5DWHVRILQFUHDVHLQSHQVLRQDEOHUHPXQHUDWLRQSHQVLRQVLQSD\PHQWDQGKHDOWKFDUHFRVWVKLVWRULFDOH[SHULHQFHDQG PDQDJHPHQWµVORQJWHUPIXWXUHH[SHFWDWLRQV x 'LVFRXQWUDWHVSUHYDLOLQJORQJWHUPKLJKTXDOLW\ERQG\LHOGVFKRVHQWRPDWFKWKHFXUUHQF\DQGGXUDWLRQRIWKHUHOHYDQW REOLJDWLRQDQG x 0RUWDOLW\UDWHVWKHORFDODFWXDULHV¶GHVLJQDWHGPRUWDOLW\UDWHVIRUWKHLQGLYLGXDOSODQVFRQFHUQHG 

7KHZHLJKWHGDYHUDJHVIRUWKRVHDVVXPSWLRQVDQGUHODWHGVHQVLWLYLW\LQIRUPDWLRQDUHSUHVHQWHGEHORZ6HQVLWLYLW\LQIRUPDWLRQLQGLFDWHV E\KRZPXFKWKHGHILQHGEHQHILWREOLJDWLRQVZRXOGLQFUHDVHRUGHFUHDVHLIDJLYHQDVVXPSWLRQZHUHWRLQFUHDVHRUGHFUHDVHZLWKQR FKDQJHLQRWKHUDVVXPSWLRQV



 :HLJKWHGDYHUDJHRI &KDQJHLQ DVVXPSWLRQVXVHGSD DVVXPSWLRQV        SD SD   P P 5DWHRILQFUHDVHLQSHQVLRQDEOHUHPXQHUDWLRQ      5DWHRILQFUHDVHLQSHQVLRQVLQSD\PHQW      'LVFRXQWUDWHIRUSHQVLRQSODQV      

7KHH[SHFWHGDJHDWGHDWKIRUSHUVRQVDJHGLV\HDUVIRUPHQDQG\HDUVIRUZRPHQDW6HSWHPEHU$FKDQJHRI\HDU LQWKHH[SHFWHGDJHRIGHDWKZRXOGUHVXOWLQDQPLOOLRQPRYHPHQWLQWKHGHILQHGEHQHILWREOLJDWLRQDW6HSWHPEHU

 

68 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±5HZDUGDQGUHFRJQLWLRQ )RUWKH\HDUHQGHG6HSWHPEHU

 6XSHUDQQXDWLRQFRPPLWPHQWV FRQWLQXHG  

Critical accounting judgements and estimates

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











































2ULFD/LPLWHG 69 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

6HFWLRQ+2WKHU

7KLVVHFWLRQLQFOXGHVDGGLWLRQDOILQDQFLDOLQIRUPDWLRQWKDWLVUHTXLUHGE\$XVWUDOLDQ$FFRXQWLQJ6WDQGDUGVDQGPDQDJHPHQWFRQVLGHUV WREHUHOHYDQWLQIRUPDWLRQIRUVKDUHKROGHUV 

 &RPPLWPHQWV &DSLWDOH[SHQGLWXUHFRPPLWPHQWV

&DSLWDOH[SHQGLWXUHRQSURSHUW\SODQWDQGHTXLSPHQWDQGEXVLQHVVDFTXLVLWLRQVFRQWUDFWHGEXWQRWSURYLGHGIRUDQGSD\DEOHQR ODWHUWKDQRQH\HDUZ DVPLOOLRQ PLOOLRQ DQGODWHUWKDQRQHEXWOHVVWKDQILYH\HDUVZ DVQLO PLOOLRQ 

&RQVROLGDWHG   P P /HDVHFRPPLWPHQWV /HDVHH[SHQGLWXUHFRQWUDFWHGIRUDWEDODQFHGDWHEXWQRW UHFRJQLVHGLQWKHILQDQFLDOVWDWHPHQWVDQGSD\DEOH QRODWHUWKDQRQH\HDU   ODWHUWKDQRQHQRODWHUWKDQILYH\HDUV   ODWHUWKDQILYH\HDUV     5HSUHVHQWLQJ FDQFHOODEOHRSHUDWLQJOHDVHV   QRQFDQFHOODEOHRSHUDWLQJOHDVHV     1RQFDQFHOODEOHRSHUDWLQJOHDVHFRPPLWPHQWV SD\DEOH QRODWHUWKDQRQH\HDU   ODWHUWKDQRQHQRODWHUWKDQILYH\HDUV   ODWHUWKDQILYH\HDUV        &RQWLQJHQWOLDELOLWLHV &RQWLQJHQWOLDELOLWLHVUHODWLQJWRHQYLURQPHQWDOXQFHUWDLQWLHVDUHGLVFORVHGLQQRWHDQGWKRVHUHODWLQJWRWD[DWLRQLQQRWH$OO RWKHUVDUHGLVFORVHGEHORZ  D *XDUDQWHHVLQGHPQLWLHVDQGZDUUDQWLHV x 7KH*URXSKDVHQWHUHGLQWRYDULRXVORQJWHUPVXSSO\FRQWUDFWV)RUVRPHFRQWUDFWVPLQLPXPFKDUJHVDUHSD\DEOH UHJDUGOHVVRIWKHOHYHORIRSHUDWLRQVEXWWKHOHYHOVRIRSHUDWLRQVDUHH[SHFWHGWRUHPDLQDERYHWKRVHWKDWZRXOGWULJJHU PLQLPXPSD\PHQWV x 7KHUHDUHJXDUDQWHHVUHODWLQJWRFHUWDLQOHDVHVRISURSHUW\SODQWDQGHTXLSPHQWDQGRWKHUDJUHHPHQWVDULVLQJLQWKH RUGLQDU\FRXUVHRIEXVLQHVV x &RQWUDFWVRIVDOHFRYHULQJFRPSDQLHVDQGDVVHWVZKLFKZHUHGLYHVWHGGXULQJWKHFXUUHQWDQGSULRU\HDUVLQFOXGHFRPPHUFLDO ZDUUDQWLHVDQGLQGHPQLWLHVWRWKHSXUFKDVHUV  E /HJDOFODLPVDQGRWKHU 7KHUHDUHDQXPEHURIOHJDOFODLPVDQGH[SRVXUHVZKLFKDULVHIURPWKHRUGLQDU\FRXUVHRIEXVLQHVV7KHUHLVVLJQLILFDQWXQFHUWDLQW\DV WRZKHWKHUDIXWXUHOLDELOLW\ZLOODULVHLQUHVSHFWRIWKHVHLWHPV7KHDPRXQWRIOLDELOLW\LIDQ\ZKLFKPD\DULVHFDQQRWEHUHOLDEO\ PHDVXUHGDWWKLVWLPH       

70 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

 &RQWLQJHQWOLDELOLWLHV FRQWLQXHG  

Critical accounting judgements and estimates

,QWKHQRUPDOFRXUVHRIEXVLQHVVFRQWLQJHQWOLDELOLWLHVPD\DULVHIURPSURGXFWVSHFLILFDQGJHQHUDOOHJDOSURFHHGLQJVIURP JXDUDQWHHVRUIURPHQYLURQPHQWDOOLDELOLWLHVFRQQHFWHGZLWKFXUUHQWRUIRUPHUVLWHV:KHUHPDQDJHPHQWDUHRIWKHYLHZWKDW SRWHQWLDOOLDELOLWLHVKDYHDORZSUREDELOLW\RIFU\VWDOOLVLQJRULWLVQRWSRVVLEOHWRTXDQWLI\WKHPUHOLDEO\WKH\DUHQRWSURYLGHGIRU DQGDUHGLVFORVHGDVFRQWLQJHQWOLDELOLWLHV Legal proceedings 7KHRXWFRPHRIFXUUHQWO\SHQGLQJDQGIXWXUHOHJDOMXGLFLDOUHJXODWRU\DGPLQLVWUDWLYHDQGRWKHUSURFHHGLQJVRIDOLWLJLRXV QDWXUH ³3URFHHGLQJV´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arranties and Indemnities ,QWKHFRXUVHRIDFTXLVLWLRQVDQGGLVSRVDOVRIEXVLQHVVHVDQGDVVHWV2ULFDURXWLQHO\QHJRWLDWHVZDUUDQWLHVDQGLQGHPQLWLHV DFURVVDUDQJHRIFRPPHUFLDOLVVXHVDQGULVNVLQFOXGLQJHQYLURQPHQWDOULVNVDVVRFLDWHGZLWKUHDOSURSHUW\0DQDJHPHQWXVHV WKHLQIRUPDWLRQDYDLODEOHDQGH[HUFLVHVMXGJHPHQWLQWKHRYHUDOOFRQWH[WRIWKHVHWUDQVDFWLRQVLQGHWHUPLQLQJWKHVFRSHDQG H[WHQWRIWKHVHZDUUDQWLHVDQGLQGHPQLWLHV,QDVVHVVLQJ2ULFD¶VILQDQFLDOSRVLWLRQPDQDJHPHQWUHOLHVRQZDUUDQWLHVDQG LQGHPQLWLHVUHFHLYHGDQGFRQVLGHUVSRWHQWLDOH[SRVXUHVRQZDUUDQWLHVDQGLQGHPQLWLHVSURYLGHG,WLVSRVVLEOHWKDWWKHILQDQFLDO SRVLWLRQUHVXOWVRIRSHUDWLRQVDQGFDVKIORZVRIWKH*URXSFRXOGEHPDWHULDOO\DIIHFWHGLIFLUFXPVWDQFHVDULVHZKHUHZDUUDQWLHV DQGLQGHPQLWLHVUHFHLYHGDUHQRWKRQRXUHGRUIRUWKRVHSURYLGHGFLUFXPVWDQFHVFKDQJHDGYHUVHO\   $XGLWRU VUHPXQHUDWLRQ &RQVROLGDWHG     7RWDOUHPXQHUDWLRQUHFHLYHGRUGXHDQGUHFHLYDEOHE\WKHDXGLWRUVIRU $XGLWVHUYLFHV $XGLWRURIWKH&RPSDQ\±.30*$XVWUDOLD ±$XGLWDQGUHYLHZ RIILQDQFLDOUHSRUWV   ±2WKHUUHJXODWRU\DXGLWVHUYLFHV   $XGLWRURIWKH&RPSDQ\±RYHUVHDV.30*ILUPV ±$XGLWDQGUHYLHZ RIILQDQFLDOUHSRUWV      2WKHUVHUYLFHV $XGLWRURIWKH&RPSDQ\±.30*$XVWUDOLD ±RWKHUDVVXUDQFHVHUYLFHV        )HHVSDLGRUSD\DEOHIRURYHUVHDVVXEVLGLDULHV ORFDOVWDWXWRU\UHTXLUHPHQWV )URPWLPHWRWLPH.30*WKHDXGLWRURI2ULFDSURYLGHRWKHUVHUYLFHVWRWKH*URXSZ KLFKDUHVXEMHFWWRVWULFWFRUSRUDWHJRYHUQDQFH SURFHGXUHVDGRSWHGE\WKH&RPSDQ\Z KLFKHQFRPSDVVWKHVHOHFWLRQRIVHUYLFHSURYLGHUVDQGWKHVHWWLQJRIWKHLUUHPXQHUDWLRQ



2ULFD/LPLWHG 71 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

 (YHQWVVXEVHTXHQWWREDODQFHGDWH 'LYLGHQGV  2Q1RYHPEHUWKH'LUHFWRUVGHFODUHGDILQDOGLYLGHQGRIFHQWVSHURUGLQDU\VKDUHSD\DEOHRQ'HFHPEHU7KH ILQDQFLDOHIIHFWRIWKLVGLYLGHQGLVQRWLQFOXGHGLQWKHILQDQFLDOVWDWHPHQWVIRUWKH\HDUHQGHG6HSWHPEHUDQGZLOOEHUHFRJQLVHG LQWKH)<ILQDQFLDOVWDWHPHQWV

7KH'LUHFWRUVKDYHQRWEHFRPHDZDUHRIDQ\RWKHUVLJQLILFDQWPDWWHURUFLUFXPVWDQFHWKDWKDVDULVHQVLQFH6HSWHPEHUWKDW KDVDIIHFWHGRUPD\DIIHFWWKHRSHUDWLRQVRIWKH*URXSWKHUHVXOWVRIWKRVHRSHUDWLRQVRUWKHVWDWHRIDIIDLUVRIWKH*URXSLQVXEVHTXHQW \HDUVZKLFKKDVQRWEHHQFRYHUHGLQWKHVHILQDQFLDOVWDWHPHQWV





72 2ULFD/LPLWHG 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

 ,QYHVWPHQWVLQFRQWUROOHGHQWLWLHV 7KHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVLQFRUSRUDWHWKHDVVHWVOLDELOLWLHVDQGUHVXOWVRIWKHIROORZ LQJFRQWUROOHGHQWLWLHV KHOGGXULQJDQG QRQFRQWUROOLQJGLUHFWLQWHUHVWVVKDUHKROGLQJGLVFORVHGLIQRWRZ QHG 

3ODFHRI 3ODFHRI LQFRUSRUDWLRQ LQFRUSRUDWLRQ 1DPHRI(QWLW\ 1DPHRI(QWLW\ LIRWKHUWKDQ LIRWKHUWKDQ $XVWUDOLD $XVWUDOLD

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

2ULFD/LPLWHG 73 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

 ,QYHVWPHQWVLQFRQWUROOHGHQWLWLHV FRQWLQXHG

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p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

D /LTXLGDWHGLQ E ,QOLTXLGDWRQ F 6PDOOSURSULHWDU\FRPSDQ\QRVHSDUDWHVWDWXWRU\DFFRXQWVDUHSUHSDUHG G ,QFRUSRUDWHGLQ H $FTXLUHGLQ I 1RQ FRQWUROOLQJLQWHUHVWDFTXLUHGLQ

2ULFD/LPLWHG 74  1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

1HZDFFRXQWLQJSROLFLHVDQGDFFRXQWLQJVWDQGDUGV  L &KDQJHVLQDFFRXQWLQJSROLFLHV ([FHSWDVGHVFULEHGEHORZWKHDFFRXQWLQJSROLFLHVDSSOLHGE\WKH*URXSLQLWVILQDQFLDOVWDWHPHQWVDUHWKHVDPHDVWKRVHDSSOLHGE\ WKH*URXSLQLWVFRQVROLGDWHGILQDQFLDOUHSRUWIRUWKH\HDUHQGHG6HSWHPEHU 7KH*URXSDVVHVVHGDQGDSSOLHGDQXPEHURIQHZDQGUHYLVHGDFFRXQWLQJVWDQGDUGVLVVXHGE\WKH$XVWUDOLDQ$FFRXQWLQJ6WDQGDUGV %RDUG $$6% ZKLFKZHUHUHTXLUHGWREHDSSOLHGIURP2FWREHU7KHDGRSWLRQRIWKHVHVWDQGDUGVKDVQRWUHVXOWHGLQDQ\ PDWHULDOFKDQJHVWRWKH*URXS¶VILQDQFLDOVWDWHPHQWVDQGSULPDULO\LPSDFWGLVFORVXUHV  LL 1HZDFFRXQWLQJVWDQGDUGVDQGLQWHUSUHWDWLRQVLVVXHGEXWQRW\HWDGRSWHG $QXPEHURIQHZDFFRXQWLQJVWDQGDUGVDQGLQWHUSUHWDWLRQVKDYHEHHQLVVXHGRUDPHQGHGEXWDUHQRW\HWHIIHFWLYH7KHVHVWDQGDUGV DUHDYDLODEOHIRUHDUO\DGRSWLRQEXWKDYHQRWEHHQDSSOLHGLQWKHVHILQDQFLDOVWDWHPHQWV7KH*URXS¶VDVVHVVPHQWRIWKHLPSDFWRI WKHVHQHZVWDQGDUGVLVVHWRXWEHORZ  $$6%Revenue from Contracts with Customers $$6%  $$6%HVWDEOLVKHVDFRPSUHKHQVLYHIUDPHZRUNIRUGHWHUPLQLQJZKHWKHUKRZPXFKDQGZKHQUHYHQXHLVUHFRJQLVHG7KHQHZ VWDQGDUGLVEDVHGRQWKHSULQFLSOHWKDWUHYHQXHLVUHFRJQLVHGZKHQDFXVWRPHUREWDLQVFRQWURORIWKHJRRGRUVHUYLFH,WUHSODFHV H[LVWLQJUHYHQXHUHFRJQLWLRQJXLGDQFHLQFOXGLQJ$$6%Revenue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¶VUHYHQXHLVGHULYHGIURPFRQWUDFWXDODJUHHPHQWVIRUHLWKHU x WKHVXSSO\RISURGXFWVRU x WKHVXSSO\RISURGXFWVDQGWKHSURYLVLRQRIVHUYLFHV  5HIHUWRQRWH D IRUGHWDLOVRISURGXFWVVROGDQGVHUYLFHVUHQGHUHG 8QGHU$$6%WKH*URXSKDVDVVHVVHGWKDW x FRQWUDFWVIRUWKHVXSSO\RISURGXFWVDUHRQHSHUIRUPDQFHREOLJDWLRQDQG x FRQWUDFWVIRUWKHVXSSO\RISURGXFWVDQGVHUYLFHVLQFOXGHRQHRUWZRVHSDUDWHSHUIRUPDQFHREOLJDWLRQVGHSHQGLQJRQZKHWKHUWKH FXVWRPHUFDQEHQHILWIURPWKHSURGXFWVLQGHSHQGHQWO\RIWKHVHUYLFHV  3URGXFWUHYHQXHLVFXUUHQWO\UHFRJQLVHGZKHQWKHJRRGVDUHGHOLYHUHGWRWKHFRQWUDFWHGSRLQWRIGHOLYHU\ZKLFKLVJHQHUDOO\DGHOLYHU\ SRLQWRQWKHFXVWRPHUVLWH5HYHQXHLVUHFRJQLVHGDWWKLVSRLQWDVWKLVLVZKHQWKHVLJQLILFDQWULVNVDQGUHZDUGVRIRZQHUVKLSDUH WUDQVIHUUHGWRWKHSXUFKDVHU8QGHU$$6%UHYHQXHZLOODOVREHUHFRJQLVHGDWWKHFRQWUDFWHGSRLQWRIGHOLYHU\DQGDWWKHFRQWUDFWHG SULFHDVWKLVLVWKHSRLQWDWZKLFKWKHFXVWRPHUJDLQVFRQWURORIWKHSURGXFWDQGWKHSHUIRUPDQFHREOLJDWLRQLVVDWLVILHGE\2ULFD 6HUYLFHUHYHQXHLVFXUUHQWO\UHFRJQLVHGDVSURYLGHGWRWKHFXVWRPHUDVWKLVLVZKHQWKHUHYHQXHDQGDVVRFLDWHGFRVWVFDQEH HVWLPDWHGUHOLDEO\DQGLWLVSUREDEOHWKDWWKHHFRQRPLFEHQHILWVDVVRFLDWHGZLWKWKHWUDQVDFWLRQZLOOIORZWRWKH*URXS8QGHU$$6% UHYHQXHIURPWKHGHOLYHU\RIVHUYLFHVZLOOEHUHFRJQLVHGRYHUWLPHDVWKHFXVWRPHUVLPXOWDQHRXVO\UHFHLYHVDQGFRQVXPHVWKHEHQHILWV RIWKH*URXS¶VSHUIRUPDQFH :KHUHSURGXFWVDQGVHUYLFHVDUHFRPELQHGLQWRRQHVLQJOHSHUIRUPDQFHREOLJDWLRQUHYHQXHZLOOEHUHFRJQLVHGRYHUWLPHDVWKH FXVWRPHUVLPXOWDQHRXVO\UHFHLYHVDQGFRQVXPHVWKHEHQHILWVSURYLGHGE\2ULFD¶VSHUIRUPDQFH Contracts to provide a designated output 7KH*URXSKDVDQXPEHURIFRQWUDFWVZLWKFXVWRPHUVWRSURYLGHDGHVLJQDWHGTXDQWLW\RIRXWSXWVXFKDVURFNRQJURXQG8QGHU$$6% WKH*URXSKDVDVVHVVHGWKDWWKHSURYLVLRQRIJRRGVDQGVHUYLFHVLQWKHVHW\SHVRIFRQWUDFWVUHVXOWVLQWKHLGHQWLILFDWLRQRIDVLQJOH SHUIRUPDQFHREOLJDWLRQWRGHOLYHUDQLQWHJUDWHGVHUYLFHWRWKHFXVWRPHU5HYHQXHIURPWKLVSHUIRUPDQFHREOLJDWLRQZLOOEHUHFRJQLVHG RYHUWLPHDQGDVSURYLGHGWRWKHFXVWRPHUDVWKHFXVWRPHUVLPXOWDQHRXVO\UHFHLYHVDQGFRQVXPHVWKHEHQHILWVRIWKH*URXS¶V SHUIRUPDQFH %DVHGRQWKHZRUNSHUIRUPHGDQGWKHDVVHVVPHQWVDERYHWKH*URXSFRQFOXGHWKDWWKHDSSOLFDWLRQRI$$6%ZLOOQRWKDYHDPDWHULDO LPSDFWRQWKHDPRXQWRIUHYHQXHUHFRJQLVHG

7KH*URXSZLOODGRSW$$6%UHWURVSHFWLYHO\WRWKHSULRUUHSRUWLQJSHULRGSUHVHQWHGZLWKWKHHIIHFWRILQLWLDOO\DSSO\LQJWKLVVWDQGDUGDW WKHEHJLQQLQJRIWKHFRPSDUDWLYHSHULRGDW2FWREHU  

2ULFD/LPLWHG 75 1RWHVWRWKH)LQDQFLDO6WDWHPHQWV±2WKHU )RUWKH\HDUHQGHG6HSWHPEHU

1HZDFFRXQWLQJSROLFLHVDQGDFFRXQWLQJVWDQGDUGV FRQWLQXHG   $$6%Financial Instruments $$6%  $$6%DGGUHVVHVWKHFODVVLILFDWLRQPHDVXUHPHQWDQGGHUHFRJQLWLRQRIILQDQFLDODVVHWVDQGILQDQFLDOOLDELOLWLHVLQWURGXFHVQHZUXOHV IRUKHGJHDFFRXQWLQJDQGDQHZLPSDLUPHQWPRGHOIRUILQDQFLDODVVHWV  7KH*URXSKDVILQDOLVHGLWVUHYLHZDQGDVVHVVPHQWRIWKHLPSDFWRI$$6%DQGGHVFULEHVWKHNH\LVVXHVFRQVLGHUHGE\WKH*URXS EHORZ  Impairment – Financial assets and contract assets $$6%LQWURGXFHVDQH[SHFWHGFUHGLWORVVPRGHOIRULPSDLUPHQWRIILQDQFLDODVVHWVZKHUHE\ORVVHVPXVWEHUHFRJQLVHGDVWKH\DUH H[SHFWHGDQGQRWRQO\ZKHQWKH\DUHLQFXUUHG 7KH*URXSFRQGXFWHGDQDVVHVVPHQWRI$$6%¶VLPSDLUPHQWUHFRJQLWLRQUHTXLUHPHQWVWRWUDGHGHEWRUVLQFOXGLQJERWKTXDQWLWDWLYH LQIRUPDWLRQIURPKLVWRULFFUHGLWORVVHVDVZHOODVTXDOLWDWLYHLQIRUPDWLRQRQGLIIHUHQWFXVWRPHUGHEWRUSURILOHVDQGVHJPHQWV%DVHGRQ WKLVDVVHVVPHQWPDQDJHPHQWKDVGHWHUPLQHGWKDWWKHUHZLOOEHDQRSHQLQJUHWDLQHGHDUQLQJVDGMXVWPHQWRIPLOOLRQUHTXLUHGRQ WUDQVLWLRQDW2FWREHU

Hedge accounting $$6%UHTXLUHVWKH*URXSWRHQVXUHWKDWKHGJHDFFRXQWLQJUHODWLRQVKLSVDUHDOLJQHGZLWKWKH*URXS¶VULVNPDQDJHPHQWREMHFWLYHVDQG VWUDWHJ\DQGWRDSSO\DPRUHTXDOLWDWLYHDQGIRUZDUGORRNLQJDSSURDFKWRDVVHVVLQJKHGJHHIIHFWLYHQHVV$$6%DOVRLQWURGXFHVQHZ UHTXLUHPHQWVRQUHEDODQFLQJKHGJHUHODWLRQVKLSVDQGSURKLELWLQJYROXQWDU\GLVFRQWLQXDWLRQRIKHGJHDFFRXQWLQJ8QGHUWKHQHZPRGHO LWLVSRVVLEOHWKDWPRUHULVNPDQDJHPHQWVWUDWHJLHVSDUWLFXODUO\WKRVHLQYROYLQJKHGJLQJDULVNFRPSRQHQWRIDQRQILQDQFLDOLWHPZLOOEH OLNHO\WRTXDOLI\IRUKHGJHDFFRXQWLQJ 7KH*URXSFXUUHQWO\DSSOLHVKHGJHDFFRXQWLQJIRUDOOWKUHHKHGJHW\SHVFDVKIORZKHGJHVIDLUYDOXHKHGJHVDQGKHGJHVRIQHW LQYHVWPHQWVLQIRUHLJQRSHUDWLRQV 7KH*URXS¶VKHGJHVWKDWFXUUHQWO\PHHWWKHKHGJHDFFRXQWLQJUHTXLUHPHQWVRI$$6%ZLOOFRQWLQXHWRTXDOLI\IRUKHGJHDFFRXQWLQJ XQGHU$$6%,QWKDWUHVSHFWWKHUHZLOOEHQRPDWHULDOLPSDFWWRWKH*URXS¶VILQDQFLDOVWDWHPHQWVIROORZLQJWKHDGRSWLRQRI$$6%RQ 2FWREHU $$6%DOORZVIRUSURVSHFWLYHDSSOLFDWLRQRIKHGJHDFFRXQWLQJUHTXLUHPHQWVH[FHSWIRUDFFRXQWLQJIRUWKHWLPHYDOXHRIRSWLRQV2ULFD GRHVQRWKDYHDQ\DFWLYHRSWLRQFRQWUDFWVLQSODFHDQGZLOOWKHUHIRUHDGRSWWKHKHGJHDFFRXQWLQJUHTXLUHPHQWVRI$$6%RQD SURVSHFWLYHEDVLV  $$6%Leases $$6%  $$6%UHSODFHVH[LVWLQJOHDVHVJXLGDQFHLQFOXGLQJ$$6%Leases,)5,&Determining whether an Arrangement contains a Lease6,&Operating Leases – IncentivesDQG6,&Evaluating the Substance of Transactions Involving the Legal Form of a Lease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±LHOHVVRUVFRQWLQXHWRFODVVLI\ OHDVHVDVILQDQFHRURSHUDWLQJOHDVHV  7KH*URXSKDVSURJUHVVHGLWVLPSOHPHQWDWLRQSURMHFWIRFXVLQJRQDUHYLHZRIFRQWUDFWVWKHFROOHFWLRQRIOHDVHGDWDDQGDVVHVVPHQWRI WKHLPSDFWRQFXUUHQWV\VWHPVDQGSURFHVVHV7KHDVVHVVPHQWRIWKHLPSDFWRQWKHFRQVROLGDWHGILQDQFLDOVWDWHPHQWVLVVWLOORQJRLQJ 7KHLPSDFWLQWKHSHULRGRILQLWLDODSSOLFDWLRQZLOOGHSHQGRQIXWXUHHFRQRPLFFRQGLWLRQVLQFOXGLQJWKH*URXS¶VERUURZLQJUDWHDW 2FWREHUWKHFRPSRVLWLRQRIWKH*URXS¶VOHDVHSRUWIROLRDWWKDWGDWHWKH*URXS¶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

76 2ULFD/LPLWHG

Independent Auditor’s Report

To the shareholders of Orica Limited

Report on the audit of the Financial Report

Opinion We have audited the Financial Report of Orica The Financial Report comprises: Limited (the Company). • Consolidated balance sheet as at 30 September 2018 In our opinion, the accompanying Financial • Consolidated income statement, Consolidated statement of Report of the Company is in accordance with comprehensive income, Consolidated statement of changes in the Corporations Act 2001, including: equity, and Consolidated statement of cash flows for the year • giving a true and fair view of the Group's then ended financial position as at 30 September 2018 • Notes including a summary of significant accounting policies and of its financial performance for the year • Directors' Declaration. ended on that date; and The Group consists of Orica Limited (the Company) and the entities • complying with Australian Accounting it controlled at the year-end or from time to time during the financial Standards and the Corporations year. Regulations 2001.

Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters The Key Audit Matters we identified are: Key Audit Matters are those matters that, in our professional judgement, were of most significance in our x Carrying value of goodwill associated with the audit of the Financial Report of the current period. Minova and Latin America (“LATAM”) segments These matters were addressed in the context of our audit x Accounting for environmental and decommissioning of the Financial Report as a whole, and in forming our provisions opinion thereon, and we do not provide a separate opinion x Accounting for uncertain tax positions on these matters.

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG Liability limited by a scheme approved under International Cooperative (“KPMG International”), a Swiss entity. Professional Standards Legislation. 78

Carrying value of goodwill associated with the Minova and LATAM Segments ($0m and $142.9m) Refer to Note 9 to the Financial Report The key audit matter How the matter was addressed in our audit A key audit matter was the Group’s testing of goodwill Our procedures included: attributable to the Minova and LATAM Segments (the x We considered the appropriateness of the value in use Segments). Given the size of the balance and recent method applied by the Group to perform the annual performance of the Segments, we exercised impairment test of goodwill against the requirements of significant judgment in evaluating the audit evidence the accounting standards. available. Minova Segment x We tested key controls in the Group’s valuation process including Board approval of budgets and review and As described in note 9 to the financial statements, at approval of the impairment assessment, including cash the interim reporting period the performance of the flow forecasts, by examining information presented to the Minova business was below budget and forecasted Board. earnings which identified indicators of impairment. At 31 March 2018, management revised the short to x We compared the forecast cash flows contained in the medium term outlook of the business due to the value in use models to Board approved budgets. underperformance. x We assessed the accuracy of previous Group forecasts for Accordingly, the Group reassessed the recoverable the Segment’s cash flows to inform our evaluation of amount of the Minova segment at 31 March 2018 forecasts incorporated in the models. We noted previous using a value in use discounted cash flow model. This trends, in particular where weakening demand and model identified that the carrying value exceeded the continuing lower prices have occurred and how this recoverable amount resulting in an impairment charge impacted the business, for use in further testing. We of $204.2 million. applied increased scepticism to forecasts in areas where LATAM Segment previous forecasts were not achieved. As described in note 9 to the financial statements, the x We challenged the Group’s significant forecast cash flow performance of the LATAM business was below assumptions in light of competitive market conditions and budget and forecasted earnings which identified weaker volumes relative to historical trends to assess the indicators of impairment. This resulted in a restructure Segment’s capacity to achieve future cash flows. We used of the business, and also caused management to our knowledge of the Segments, their past performance, review the outlook in connection with the annual business and customers and our industry experience to impairment testing. evaluate the feasibility of these plans. Significant assumptions x We assessed the scope, expertise and independence of We focused on the significant assumptions the Group the external specialists engaged by the Group to assist the applied in their value in use models including: Group determine the discount rate applicable to the x Forecast operating cash flows – the Segments operations which comprise the Segments. experienced declining cash flows in the period x Working with our valuation specialists we also due to competitive market conditions and weaker independently developed a discount rate range for key volumes and have not met prior forecasts, raising operations which form part of the Segments, using our concern for the reliability of current forecasts. publically available market data for comparable entities, These conditions, coupled with the Group’s adjusted for risk factors including country risk. We models being highly sensitive to changes in compared the discount rates applied by the Group for key forecast operating cash flows, increase the operations to our acceptable range. possibility that goodwill may be impaired. x We considered the sensitivity of the models by risk x Forecast terminal growth rates – in addition to the adjusting cash flows, varying key assumptions such as uncertainties described above, the Group’s contributions from new products and services, forecast models are highly sensitive to changes in terminal growth rates and discount rates, within a reasonably growth rates. This drives additional audit effort in possible range, to identify those assumptions at higher risk relation to the feasibility of the terminal growth of bias or inconsistency in application and to focus our rates and consistency with the Group’s strategy. further procedures. x Discount rates – the determination of discount x We compared forecast terminal growth rates for the key rates applicable to underlying cash flows is a operations which form part of the Segments to external subjective exercise, and they are influenced by information and considered the implication of any the countries in which the Group operates. The variances. Group’s models are sensitive to changes in discount rates. x We assessed the disclosures in the financial report using our understanding of the matter obtained from our testing and against the requirements of the Accounting Standards.

79

Environmental and decommissioning provisions $319.3m and contingent liability disclosures Refer to Note 6 to the Financial Report The key audit matter How the matter was addressed in our audit The estimation of environmental remediation and Our procedures included: decommissioning provisions is considered a key audit x Testing controls relating to the completeness of the matter. This is due to the inherent complexity Group’s identification of areas which contain associated with estimating remediation costs, contamination and the related recognition and particularly for potential contamination of ground measurement of provisions, including the Group’s review beneath established structures and long term legacy and authorisation of cost estimates. matters, and in gathering persuasive audit evidence thereon. x Testing the accuracy of historical remediation provisions The complexity in estimating the Group’s by comparing to actual expenditure. We used this environmental and decommissioning provisions is knowledge to challenge the Group’s current cost influenced by: estimates and to inform our further procedures. x The inherent challenges experienced by the x We conducted site visits and made enquiries of various Group in precisely determining the size and personnel regarding the Group’s strategy for remediating location of potential contamination beneath certain source contamination. established structures. x We read correspondence with regulatory authorities to x Current and potential future environmental and understand their views about acceptable remediation regulatory requirements and the impact on techniques and compared this with the assumptions made completeness of remediation activities within the in the Group’s models. provision estimate, including the activities which x We challenged the Group where provisions were unable will be acceptable to the regulator. to be made for source contamination about the existence x The expected environmental remediation strategy of information which would enable a reliable estimate of and availability of any known techniques to the provision to be made. We compared this to our remediate source contamination, in particular for understanding of the matter and the criteria in the treatment of Dense Non-Aqueous Phase Liquid accounting standards for recording a provision. source areas at Botany, . x We obtained the Group’s quotations for remediation work, x Historical experience, and its use as a reasonable as well as internal and external supporting documentation predictor when evaluating forecast costs. for the Group’s determination of future required activities, their timing and associated cost estimates. We compared x The expected timing of the expenditure given the them to the nature and quantum of cost contained in the long term nature of these exposures. provision balance. As described in note 6 to the financial statements, We assessed the environmental provision for the Botany following receipt of additional reports from internal and x Industrial Park based on the following: external environmental experts, the Group updated its analysis of the likely operational plans for the o compared the findings of internal and external Groundwater Treatment Plant (GTP) at the Botany environmental experts relating to the operational plans Industrial Park (NSW) during the current year. The new for the GTP with the assumptions adopted in the information resulted in changes in the estimated provision model for consistency; operational duration and costs associated with the o assessed the forecast net GTP running costs and GTP and an increase in the environmental provision of capital outlays by comparing to historical trends, $114.7 million. supporting quotations and the findings of external experts; o considered the sensitivity of the provision model by varying key assumptions and inputs to identify those assumptions at higher risk of bias or inconsistency in application and to develop a reasonable range for the provision; o considered the qualifications and experience of internal and external experts to determine their suitability in conducting the scope of work undertaken; and o tested the mathematical accuracy of the provision model. x We assessed the Group’s disclosures using our knowledge of the business and the requirements of the Accounting Standards. In particular, we focused on the disclosure of uncertainties associated with the provision or exposure.

80 Uncertain tax positions and contingent liability disclosure Refer to Note 11 to the Financial Report The key audit matter How the matter was addressed in our audit The Group operates in a global tax environment and its Working with our tax specialists our procedures included: corporate structure reflects the nature of global x We tested the Group’s controls for identification and operations which is driven by acquisitions, assessment of uncertain tax positions. Our testing transactions and the execution of the Group’s global included challenging senior management and the Group’s strategy. This includes external sales to customers in taxation department, and inspecting correspondence with over one hundred countries. tax authorities and the Group’s external tax advisors for A number of the Group’s tax positions are presently evidence of significant uncertain tax positions not subject to challenge by tax authorities. The ultimate identified by the controls. outcome of these matters is inherently uncertain. We considered the Group’s methodologies, assumptions Accounting for uncertain tax positions is a key audit x and estimates for significant tax positions and the matter due to: likelihood of future tax outflows. Our evaluation was based x The Group undertaking transactions in a number on application of our knowledge of the industry, tax of tax jurisdictions which require the Group to legislation and current regulatory focus areas, and recent make significant judgements about the rulings relevant to the uncertain tax positions. interpretation of tax legislation and the application We read correspondence with relevant tax authorities and of accounting requirements. x considered both external tax and legal advice provided to x The changing tax environment where there have the Group to check for any information which was been significant developments to enhance contradictory to the Group’s conclusions. transparency of tax arrangements. x We compared the Group’s accounting policy for We used significant judgment, including involvement recognition of tax provisions against the requirements of of our tax specialists, to assess the Group’s position the Accounting Standards. with reference to tax legislation and in particular the likely outcome of the Group’s defence of its positions x We compared the positions adopted by the Group to our knowledge of latest interpretations by tax authorities and through legal appeal processes. court rulings to test the positions adopted for compliance with Accounting Standards. x We made independent enquiries of the Group’s external legal advisors. We compared their responses to the assessment made by the Group. x We assessed the Group’s disclosures in respect of uncertain tax positions against the requirements of the Accounting Standards and our understanding of the matters.

Other Information Other Information is financial and non-financial information in Orica Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the About Us statement, ,QQRYDWLRQ VWDWHPHQW Chairman’s Message, Managing Director’s Message, Review of Operations, Global Presence statement, Sustainability Overview, Board Members biographies, Executive Committee biographies, Directors’ Report and Five Year Financial Statements. Shareholder Information and Corporate Directory are expected to be made available to us after the date of the Auditor's Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

81

Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error • assessing the Group and Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 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: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our Auditor’s Report.

Report on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of The Directors of the Company are responsible for the preparation and Orica Limited for the year ended 30 presentation of the Remuneration Report in accordance with Section September 2018, complies with Section 300A of the Corporations Act 2001. 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ report for the year ended 30 September 2018. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

KPMG Penny Stragalinos Partner Melbourne 1 November 2018

82 ),9(<($5),1$1&,$/6



)RUWKH\HDUHQGHG6HSWHPEHU

2ULFDFRQVROLGDWHG     

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

)LQDQFLDO3RVLWLRQ &XUUHQWDVVHWV      3URSHUW\SODQWDQGHTXLSPHQW       ,QYHVWPHQWV      ,QWDQJLEOHV      2WKHUQRQFXUUHQWDVVHWV      7RWDODVVHWV      &XUUHQWERUURZ LQJVDQGSD\DEOHV      &XUUHQWSURYLVLRQV      1RQFXUUHQWERUURZ LQJVDQGSD\DEOHV      1RQFXUUHQWSURYLVLRQV      7RWDOOLDELOLWLHV     

1HWDVVHWV      (TXLW\DWWULEXWDEOHWRRUGLQDU\VKDUHKROGHUVRI2ULFD/LPLWHG      (TXLW\DWWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV      7RWDOVKDUHKROGHUV¶HTXLW\     

 2ULFD/LPLWHG 83 ),9(<($5),1$1&,$/6

)RUWKH\HDUHQGHG6HSWHPEHU

2ULFDFRQVROLGDWHG      1XPEHURIRUGLQDU\VKDUHVRQLVVXHDW\HDUHQG PLOOLRQV      :HLJKWHGDYHUDJHQXPEHURIRUGLQDU\VKDUHVRQLVVXH P LOOLRQV      %DVLFHDUQLQJVSHURUGLQDU\VKDUH EHIRUHLQGLYLGXDOO\VLJQLILFDQWLWHPV FHQWV       LQFOXGLQJLQGLYLGXDOO\VLJQLILFDQWLWHPV FHQWV       'LYLGHQGVSHURUGLQDU\VKDUH FHQWV      'LYLGHQGIUDQNLQJ SHUFHQW       'LYLGHQG\LHOGEDVHGRQ\HDUHQGVKDUHSULFH SHUFHQW     

&ORVLQJVKDUHSULFHUDQJH± +LJK      /RZ      























 84 2ULFD/LPLWHG