R emuner a tion r epor t A le tt er fr om the Chairman De ar Shar eholders On behalf o f the ALS Limit ed Boar d I am ple ased t o pr esen t the FY19 r emuner a tion r epor t outlining the Gr oup s r emuner a tion s tr a t egy the per f ormanc e out c omes o f the pas t y e ar and ho w the y r ela t e t o the as socia t ed r emuner a tion out c omes f or the Gr oup s K e y M anagemen t P ersonnel the KMP including e x ecutiv e managemen t the M anaging Dir ec t or CE O the Ex ecutiv es T his r epor t also c o v ers the f ee arr angemen ts f or NonEx ecutiv e Dir ec t ors the Dir ec t ors T he Gr oup deliv er ed ano ther s tr ong fnancial per f ormanc e f or the y e ar e v en a f t er the good per f ormanc e in FY2018 Underlying Ne t Pr o ft A f t er T a x UNP A T Underlying Earnings P er Shar e EPS and Dividends f or FY2019 incr e ased b y 273 per c en t 306 per c en t and 324 per c en t r espec tiv ely T he s tr ong c orpor a t e per f ormanc e bo th in absolut e t erms and r ela tiv e t o our indus try peers has r esult ed in our e x ecutiv es achie ving mos t o f their a t risk r emuner a tion including an outper f ormanc e c omponen t T he shor t t erm inc en tiv e S TI P lan c on tinued t o emphasise Financial 70 per c en t S tr a t egic 20 per c en t and HSE 10 per c en t KPIs and t o penalise poor deb t or c ol lec tion T he outper f ormanc e pa ymen ts e arned b y c er t ain Ex ecutiv es wil l be de f err ed in t o equit y F r om a shar eholder perspec tiv e the out c omes ensur e alignmen t o f e x ecutiv es pa ymen ts t o o v er al l fnancial per f ormanc e o f the C ompan y Examples o f the e x ecutiv e KMPs S TI P lan KPIs ar e included in the r epor t T he e x ecutiv es 201619 long t erm inc en tiv e L TI a w ar d which wil l v es t on 1s t July 2019 w as achie v ed a t the o v er al l r a t e o f 857 per c en t o f the ma ximum po t en tial as thr ee o f the f our per f ormanc e hur d les EPS T SR r ela tiv e t o the A SX100 and EBITD A r ela tiv e t o indus try peers w er e ful ly achie v ed T he R OCE per f ormanc e hur d le w as par tial ly achie v ed a t 107 per c en t o f a po t en tial t o t al o f 25 per c en t f or tha t hur d le Ex ecutiv e pa y out c omes f or FY201819 align with shar eholders out c omes and demons tr a t e tha t the Gr oup s a t risk r emuner a tion pr ogr ams and our policies func tion w el l and c orr ela t e with c ompan y per f ormanc e During the y e ar KMP fx ed r emuner a tion w as r e vie w ed and incr e ased on a v er age b y 9 per c en t r e fec ting incr e ased sc ope and r esponsibilities f ol lo wing the e x ecutiv e r es truc tur e and t o align t o mark e t c onditions in the TIC indus try Upon appr o v al b y shar eholders the Dir ec t ors f ee pool w as incr e ased b y 10 per c en t during the y e ar t aking in t o ac c oun t the incr e ased busines s siz e and c omple xit y Impor t an tly this incr e ase also pr o vided the fe xibilit y t o r ecruit ALS frs t in t erna tion al ly based non e x ecutiv e dir ec t or Dr Sidd har tha Kadia who brings mor e div erse e xperienc e and e xper tise t o our boar d A f t er e xt ernal benchmarking NonEx ecutiv e Dir ec t ors f ees pr e viously unchanged sinc e 2012 w er e also incr e ased b y 5 per c en t and the Chair f ee b y 10 per c en t T he 201821 L TI Shar e Righ ts a w ar ds c on tinued t o include the f our hur d les o f T SR EPS EBITD A and R OCE T he EPS and EBITD A hur d les bo th r ec eiv ed ad jus tmen ts during the y e ar t o incr e ase the chal lenge t o achie v e pa y out T he curr en t mix o f per f ormanc e hur d les ensur es ac tiv e capit al managemen t and wil l driv e sus t ainable fnancial per f ormanc e and ensur e a f air out c ome f or bo th shar eholders and e x ecutiv es T he Boar d r emains c ommitt ed t o a s tr ong gr o w th f ocus and designs its e x ecutiv e r emuner a tion s tr a t egies t o dir ec t beha v iours t o w ar ds achie ving gr o w th in shar eholder v alue o v er the long t erm W hils t no signifcan t changes ha v e been planned f or FY201920 it should be no t ed tha t a r e vie w is underw a y in r ela tion t o the Gr oup L TI and S TI P lans t o enable the C ompan y t o a ttr ac t mo tiv a t e and r e t ain high per f orming e x ecutiv es acr os s man y global loca tions in a dynamic and c ompe titiv e en vir onmen t o v er the medium t o long t erm T he Boar d belie v es its appr oach t o NED and KMP r emuner a tion r emains balanc ed f air and equit able and tha t it r e w ar ds busi nes s gr o w th whils t balancing agains t risk and unin t ended c onsequenc es t o mee t the e xpec t a tions o f shar eholders o v er the longer t erm Y ours f aith ful ly Bruc e P hil lips Chairman 20 ALS LIMITED AND IT S SUBSIDIARIES A NNU AL F INANCIAL R EPOR T F OR THE Y EAR E NDED 31 M AR CH 2019 F INANCIAL REPOR T D IRE CT ORS REPOR T R EM UNERA TION REPOR T