Crescita Therapeutics Inc.
Annual Report 2020

Plain-text annual report

A m p o l L i m i t e d 2 0 2 0 A n n u a l R e p o r t Annual Report 2020 Powering better journeys, today and tomorrow Powering better journeys, today and tomorrow Our company has always been about more than fuel. Fuel may be the foundation of our business, but our motivation and purpose comes from the passion of our people and our dedication to the customers, industries and communities we serve. From our origins until today, we’ve always been inspired by the role we can play in people’s lives – to keep them moving, to make journeys happen. Today, Ampol is back to being the momentum behind every journey. From delivering the very best in fuels, lubricants, convenience and quality service, to solving our customers’ energy needs now and into the future, we enable them to go further. We’ve been powering journeys for over 100 years, leveraging our market-leading infrastructure and the knowledge and passion of our people, and we’ll be here powering journeys for 100 more. Our Values The Ampol Values underpin everything we do. In particular, the Ampol Value of ‘Never stop caring’ encourages us to always do the right thing and have a positive impact on the communities and economies in which we operate. Connect to win We collaborate as an integrated business to drive growth. Find new ways We innovate to deliver positive outcomes. Own it We make bold decisions and are accountable for the outcomes. Make a difference for customers We are connected to our customers and support their changing needs. Never stop caring We keep safety front of mind and make a positive contribution to those around us. Contents 2020 highlights Chairman’s report 02 04 Managing Director and CEO’s report 06 Bringing back Ampol Our operations Fuels and Infrastructure Convenience Retail Sustainability Financial report 08 10 12 16 20 24 About this report This 2020 Annual Report for Ampol Limited (ACN 004 201 307) has been prepared as at 30 March 2021. Throughout this document, terms such as Ampol and Ampol Australia have the same meaning as Ampol Group, unless the context states otherwise. Shareholders can request a printed copy of the Annual Report, free of charge, by emailing ampol@Boardroomlimited.com.au or writing to Boardroom Pty Limited Level 12, 225 George Street, Sydney NSW 2000 2020 highlights Despite the significant challenges and disruptions in 2020, we continued the execution of our strategy and delivered on our promises to shareholders Strong progress made delivering our International growth strategy Execution of retail strategy supporting improved shop performance Fuels and Infrastructure International EBIT Convenience Retail RCOP EBIT 18% on 2019  43% on 2019  76 new Seaoil sites added 10 new Gull sites added $25m increase in shop contribution margin on 2019 7% increase in like-for-like sales Group RCOP EBIT $401m Operating cash flow $268m Dividend 48cps full year dividend (fully franked) 26 sites rebranded to Ampol 4 pilot Ampol Woolworths Metro stores added International volumes up 36% on 2019 02 Ampol LimitedWe delivered on our strategic commitments to shareholders Keeping our people, communities and environment safe $500m subordinated notes issuance completed $300m Off-market Buy-back announced. Completed in January 2021 Charter Hall and GIC consortium acquired a 49% interest in 203 core $682m freehold sites for Safety — TRIFR Fuels and Infrastructure FY18 FY19 FY20 4.6 Convenience Retail FY18 FY19 FY20 7.7 10.7 10.4 10.1 14.0 $2.47m community investment via Ampol Foundation 0.8 Scope 1 & 2 GHG emissions (Mt CO2-e) 37.7% female representation at leadership level $15.7b direct economic value generated in 2020 03 Annual Report 2020Chairman’s report Ampol delivered a resilient financial result in 2020 in a challenging operating environment Executing our growth strategies In 2020, we made strong progress in the delivery of our growth strategies. In Fuels and Infrastructure International, we achieved 18% earnings growth, and volumes increased by 36% in volatile market conditions. Milestones in the evolution of our international operations were also achieved, with the extension of our international storage program and the opening of our Houston Trading and Shipping office. Ongoing government restrictions implemented in response to COVID-19 and the depth and breadth of the challenges to the Australian economy impacted demand for our products throughout the year, while sustained weakness in refining margins negatively impacted the performance of our Lytton refinery. On a historic cost profit basis, Ampol’s net profit after tax (NPAT) was a loss of $485 million, impacted by a $360 million inventory loss and $337 million loss in Significant Items. Our replacement cost of sales operating profit EBIT result was $401 million, down 34% on 2019. Despite this, there were several highlights as we continued to execute our strategy and deliver on commitments made to shareholders. Significant capital was released through our Convenience Retail property transaction, we issued a $500 million hybrid bond as part of our capital management strategy and announced a $300 million Off-market Buy-back which has benefited all shareholders. We also completed our CEO transition process, made two new appointments to the Ampol Board and began the execution of our exciting transition to Ampol. Responding to COVID-19 Faced with challenging conditions created by COVID-19, the business responded quickly throughout the year to protect our balance sheet and cash flow and enable us to emerge in a strong position as markets recover. In just a few weeks from March 2020, we brought forward and extended our Lytton refinery Turnaround and Inspection (T&I), reduced our capital expenditure for 2020 and took strong action on costs, including reducing fees and salaries for our Board and executive team members. Unfortunately, many of our employees were also impacted, with stand-downs, reduced working hours and other changes to employment required. I am proud of the efforts of all our employees in responding to the challenges of COVID-19. Despite the significant disruption to global hydrocarbon markets, throughout the year our supply chains remained resilient and we continued to deliver safely and reliably for our customers and the broader Australian community. 04 Ampol LimitedCEO transition and Board appointments In June 2020, I was pleased to announce the completion of our CEO transition process, with Matthew Halliday appointed as Managing Director and Chief Executive Officer. Matt did an outstanding job as Interim Chief Executive Officer, leading Ampol through a period of unprecedented disruption following the onset of COVID-19. His skills and knowledge of the business and track record in 2020 give the Board every confidence in Matt’s ability to successfully deliver our strategy. In June, I was also pleased to announce the appointment of Michael Ihlein and Gary Smith to the Ampol Board as Independent Non-executive Directors. Michael and Gary bring substantial experience as executives and directors and will be significant assets to the Board over the coming years. Looking ahead Market conditions in 2021 will continue to be challenging and there remains considerable uncertainty over the outlook and timing for economic recovery. We will continue to execute our strategy for the benefit of shareholders, with a focus on cost and capital efficiency. On behalf of the Board, I would like to extend our thanks to Matt, his leadership team and to all employees for their efforts to deliver for customers and shareholders in a tough environment. I would also like to thank the shareholders for their continued support of Ampol as we move forward to execute our strategy for the medium and long term. Steven Gregg Chairman These milestones support opportunities for further expansion into new geographies, products and services over the medium to long term. In Convenience Retail, we delivered a 7% increase in like-for-like sales and a $25 million increase in shop contribution margin, reflecting improvements in our operational performance and customer offer. We also reached practical completion of our transition from franchise operations. As the Australian convenience market continues to grow, we will continue to execute our retail growth strategy to achieve our non-fuel earnings uplift target of $85 million by 2024. “ There were several highlights as we continued to execute our strategy and deliver on commitments made to shareholders. Significant capital was released through our Convenience Retail property transaction, we issued a $500 million hybrid bond as part of our capital management strategy and announced a $300 million Off-market Buy-back which has benefited all shareholders. We also completed our CEO transition process, made two new appointments to the Ampol Board and began the execution of our exciting transition to Ampol.” Annual Report 2020 05 Managing Director and CEO’s report Our strategic priorities are well established and we remain focused on advancing them I am honoured to have been appointed to lead this great Australian company. Ampol has a rich history here in Australia and our track record of delivering for shareholders, customers and communities remains at the heart of everything that we do. While it has been a difficult 12 months with myriad challenges impacting our financial performance, I am optimistic about our future. I believe we can sustainably deliver value and growth for shareholders, people and customers, while being a positive contributor in local communities as we execute our established strategy in the years ahead. Delivering on our promises Despite a year of significant volatility and uncertainty, with severe economic impact from bushfires, adverse weather and the COVID-19 pandemic, we have made excellent progress on delivering the strategic initiatives outlined to shareholders in 2019. I am proud of how Ampol has responded to the challenges faced throughout the year. We successfully completed our Convenience Retail property transaction, with the Charter Hall and GIC consortium acquiring a 49% interest in 203 of our core freehold retail property sites, and executed a $500 million hybrid bond issuance. Fuels and Infrastructure International EBIT grew by 18%, with strong momentum in Convenience Retail shop and our successful tender to redevelop four high-volume New South Wales highway sites giving us confidence in our Convenience Retail growth strategy. We were also able to deliver on our commitment to release franking credits to shareholders, with a $300 million Off-market Buy-back announced in November and completed in January 2021, which was further supplemented by a 48 cents per share fully franked full-year dividend. Improving safety performance The safety of our people and our customers is always a priority and I am extremely pleased with the strong improvement in our safety performance in 2020. The extended T&I at our Lytton refinery was completed incident-free and we also recorded our best process safety result in the past five years. Fuels and Infrastructure benefited from targeted personal safety improvement plans to reduce the frequency of injuries Case study Being a positive contributor Ampol has a history of giving back to communities across the country and, under my leadership as CEO, we will reignite our commitment to leveraging our employees, skills and infrastructure to make a positive impact wherever we operate. In 2020, we relaunched our Ampol Foundation which is aimed at supporting better access to education and employment opportunities for young Australians. We launched a new partnership with The Smith Family and extended our relationships with the Clontarf Foundation and Stars Foundation. 06 Ampol Limited and accidents such as strains, slips, trips and falls. Convenience Retail safety also improved significantly due to our focus on behavioural safety and the execution of our safety roadmap, driving a reduction in the frequency of low-consequence injuries, especially around manual handling tasks. Our customer commitment Delivering for customers is one of the key reasons we exist and as CEO I will ensure we continue to have customers at the heart of our decision making. I am pleased to say that there have been many examples that have brought this commitment to life over the past 12 months as we have navigated COVID-19 and responded to a range of other challenges. From providing a new customer with reassurance about our ability to deliver on a key project as COVID-19 hit global supply chains, to our work delivering for essential services and the local community during the bushfires of early 2020, customers can always rely on Ampol. This constant focus is also evidenced by the strength of our depot operations and partnerships with distributors that has allowed us to support primary producers recovering from drought. In 2021 we will relaunch the Ampol Best All Rounder Award. For over 35 years this program has celebrated Australia’s leaders of tomorrow, recognising qualities such as leadership, service and community, sport, arts and culture, attitude and personal conduct among tens of thousands of final year students across Australia. I am also proud of our ongoing engagement with state and federal governments to ensure the safe and reliable supply of transport fuels throughout the COVID-19 pandemic. Leveraging the Ampol rebrand I have no doubt that now is the right time to be rebranding to Ampol. We have a proud history as an Australian company, and this sets us apart from our competitors as the only major Australian fuel brand in the market. Becoming Ampol is more than just a name change. It’s about repositioning what our business stands for, clearly articulating why we exist and leveraging our brand to win customers and improve financial performance. Our new purpose is: Powering better journeys, today and tomorrow. Ampol has always been passionate about keeping people and businesses moving and fuelling them at every point of their journey. This new purpose captures our commitment to our customers and the central role we play in keeping people, businesses and the broader economy moving. In 2020, we delivered the rebrand of our first 26 Ampol retail sites and the transition of our network will accelerate in 2021. We also launched our Amplify premium fuels and AmpolCard brands, engaged key customers to share our strategy and strengthened relationships. In addition, we finalised new partnerships with Red Bull Ampol Racing, the National Rugby League as the naming rights sponsor of the Ampol State of Origin, Surf Life Saving Australia and The Smith Family. Delivering value and growth Our strategic priorities are well established and we remain focused on advancing them in 2021. We will leverage our market-leading infrastructure and skills in Australia to deliver for customers and shareholders. We will focus on international growth and continue to expand our international operations toward regional market leadership, while continuing to execute our Convenience Retail growth strategy. We will also invest in our brand and bring our story to life as a proud and independent Australian company, being local in the way we deliver for customers and communities and leveraging this as a competitive advantage. Finally, we will continue our work to support the energy transition and the ongoing focus on decarbonisation across our economy. Ampol has a key role to play in this transition and, while I don’t expect our energy mix to change significantly in the near term, we need to spend the time now to understand the technologies that will shape our future as we look to leverage our core business to deliver new energy solutions for our customers. We have identified a broad set of future energy themes and are mapping these to our proven strengths to develop multiple areas where we have a right to play. This will allow us to protect and grow value for shareholders as the energy transition progresses. Heading into 2021, we remain focused on cost and capital efficiency and will continue to make decisions to improve returns and deliver growth for our shareholders. Ampol has a proud history and record of delivering through a range of market conditions and I have no doubt we are well positioned as the economy recovers. I would like to thank all of our employees for their contribution to our strategic success and persistent efforts to deliver for customers and shareholders in a very challenging market. Matthew Halliday Managing Director and CEO 07 Annual Report 2020Bringing back Ampol We have reawakened an Australian icon Key milestones December 2019 May 2020 May 2020 Ampol to return Ampol announced that it would be  revitalising the iconic Australian brand. New logo revealed Ampol revealed its new logo, which draws on key elements from the heritage Ampol brand, including the original red and blue bands, with a new, modern and distinctive leaning ‘A’, symbolising the company’s forward momentum. Shareholders back Ampol At the Ampol Annual General Meeting, shareholders gave approval for the change of company name to Ampol Limited. Uniquely Australian The revitalisation of the iconic Ampol brand is a key part of our business strategy. It provides a unique opportunity to re-engage our people, reinforce our customer connections and redefine who we are as a company. Ampol captures the best of our history and our aspirations for the future. Born Australian, we have grown to become the largest Australian-owned and fully independent fuel brand in the market, with a focus on evolving with the needs of our customers and delivering sustainable value and growth for shareholders. Fundamental to our success is the continuation of the qualities that we have long been known for, such as safe and reliable supply and leadership in premium fuels and convenience. 08 As we look towards our future and executing our strategy, the reinvigoration of Ampol allows us to enhance our market-leading position in transport fuels, execute on the convenience market opportunity and reaffirm our commitment to communities. As we deliver the rebrand works across our retail network, we are refreshing the shopfronts of our company-controlled sites to align with our format strategy. This includes transitioning our shops to our Foodary brand and the continued rollout of our Ampol Woolworths Metro format. Powering ahead after a strong start in 2020 We have made strong progress since we announced the return of Ampol in December 2019. We opened our first two Ampol retail sites in Sydney in August, with a total of 26 sites rebranded across the country in 2020. We are on track to rebrand our entire network of more than 1,900 sites by the end of 2022. In 2020, we revealed our new Amplify premium fuels brand, and the new face of our market-leading fuel card with AmpolCard. We also formally introduced the brand to our employees and business customers, sharing our views on the future of fuels, the evolution of our products and what a modern Ampol looks like and stands for. Reaffirming our commitment to communities As a proud and independent Australian company, we are committed to being a positive contributor to the communities in which we work and live. Ampol is a brand that strongly resonates with Australians and our revitalisation has renewed our focus on leveraging our network and our employees to help improve the lives of all Australians. Ampol LimitedAugust 2020 August 2020 October 2020 Ampol back on Australian forecourts Ampol opened its first two sites in Concord and Granville, Sydney, seeing the brand back on Australian forecourts for the first time in 25 years. Unveiling of Amplify premium fuels Ampol’s new premium fuels brand was unveiled with the Red Bull Holden Racing team, featuring the new brand on the racing car’s livery at the Darwin Triple Crown for the first time. Ampol reveals new partnerships with the National Rugby League and The Smith Family Ampol announced it would be naming rights sponsor of the Ampol State of Origin through to 2023. It also revealed a new partnership with The Smith Family, with Ampol’s investment helping to support 480 students through the Learning for Life program. Our community focus is on powering better journeys for young Australians by supporting organisations that champion education, employment and community engagement for youth, and in 2020 we announced new partnerships with The Smith Family and Surf Life Saving Australia. We are also focused on delivering sponsorships and partnerships that bring the new Ampol brand to life for both old and new customers. Recent announcements include a partnership with Red Bull Ampol Racing and the National Rugby League as naming rights sponsor of the Men’s and Women’s State of Origin series. November 2020 November 2020 Australia’s leading fuel card brand relaunched as AmpolCard Ampol revealed the new face of its market-leading fuel card brand, with the introduction of AmpolCard. Red Bull Ampol Racing and Surf Life Saving Australia partnerships announced Ampol revealed an expanded partnership with Triple Eight Race Engineering that would see Ampol become a co-naming rights sponsor of the Red Bull Ampol Racing team. The company also revealed a new national partnership with Surf Life Saving Australia, with the aim of coming together to improve water safety on Australian beaches. Annual Report 2020 09 Our operations Ampol is Australia’s market-leading fuels and retail business, underpinned by strategic infrastructure and customer positions We operate a portfolio of highly strategic assets, including privileged infrastructure located across key demand centres, and have the leading branded retail network with more than 1,900 sites nationwide. Our strong infrastructure position is augmented by our supply chain expertise, including a rapidly growing international presence through our trading and shipping operations in Singapore and the United States. This position and expertise allows us to safely and reliably serve our deep customer base, which is diversified across both wholesale and retail channels. This includes our network of approximately 80,000 B2B customers, a retail network that serves over three million customers each week and our market-leading card offer that maintains 38% market share*. Philippines Strategic partnership designed to augment international growth 20% Owned since 2018 Singapore Trading and Shipping office Ampol’s Trading and Shipping business was established in 2013 to source petroleum products from global markets and leverage our privileged infrastructure 10 Houston Houston Trading and Shipping office, which came online in October 2020 New Zealand Owner of Gull, New Zealand’s leading independent fuel brand 100% Owned since 2017 Retail network Fuels and Infrastructure (Australia) Gull network (New Zealand) Seaoil network (Philippines) Ampol Limited Principal activities Fuels and Infrastructure Convenience Retail Our Fuels and Infrastructure business sources, imports, refines and distributes fuels and lubricants for a diverse customer base. Our Convenience Retail business manages a network of 708 sites to deliver fuel, lubricants and a range of convenience and essential products to more than three million customers every week. ~80,000 B2B customers 74 fuel storage and distribution hubs 20.1BL total fuel sales in 2020 36% increase in international volumes in 2020 3m weekly customers 708 controlled sites 38%* market share maintained by our market-leading fuel card, AmpolCard 7% increase in like-for-like shop sales in 2020 Trading and Shipping Refining Infrastructure and Distribution Retail With capability and scale across the transport fuels supply chain, we are the market leader in Australia and an emerging player in the Asian region. Our capability in product sourcing, peerless infrastructure and network assets, coupled with our deep customer relationships, allows us to run an integrated business and to drive value from international sourcing through to wholesale supply of fuels and lubricants. In a competitive and evolving market, Fuels and Infrastructure has transitioned successfully over the past five years from a single market supply function to a long-term growth engine that has delivered increased volumes, capabilities and geographies. Through new formats, products, technology and services, we are redefining what convenience means for Australians. Our national network of 708 controlled sites delivers customers a premium fuel and card offer through Amplify and AmpolCard, with a growing convenience offer that is unparalleled in the Australian market. Over recent years, we have evolved our convenience offer to meet the changing needs of customers and to capture the growing market opportunity. This includes the introduction of our Foodary and Ampol Woolworths Metro formats, and partnerships with Uber Eats as well as quick service restaurant (QSR) partners such as Boost and Guzman Y Gomez. See page 12 See page 16 * Includes volumes from Ampol’s branded retail network 11 Annual Report 2020 Fuels and Infrastructure The success of our Fuels and Infrastructure business is underpinned by the capabilities of our people in managing complex supply chains, as well as our privileged assets, deep customer base and strong international partnerships Houston office achieves operational readiness 10 sites added to Gull New Zealand retail network International volumes increased by 36% International EBIT uplift of 18% on 2019 76 sites added to Seaoil network in the Philippines 12 Ampol Limited In 2020, Fuels and Infrastructure was impacted by significant demand destruction due to COVID-19, including impacts on earnings at the Lytton refinery. Despite these tough conditions, we continued to deliver our strategy, maintained our focus on safely and reliably serving our customers, and delivered projects critical for future growth. Milestones included the commencement of operations at our Houston Trading and Shipping office, expansion of our international storage program and significantly improved safety performance. Financial performance Fuels and Infrastructure delivered an RCOP EBIT of $154 million in 2020, which was below the $450 million RCOP EBIT in 2019, largely due to lower earnings from Lytton and loss of scale in Fuels and Infrastructure Australia from COVID-19 related demand destruction. Excluding Lytton, the result was impacted by the significant decline in Australian fuel volumes and associated efficiencies, and effects from managing rapidly changing supply chains. Earnings were supported by increased imports during the extended Lytton T&I, continued growth in the International business, strong cost discipline and $30 million in foreign exchange gains. The reduction in Lytton RCOP EBIT by $215 million compared to 2019 was reflective of the extremely weak external  refiner margin environment, impacted first by IMO2020 and then by COVID-19. Action was taken to mitigate impacts by bringing forward and extending the T&I, with a renewed focus on costs and efficiency. Total Australian fuels sales volumes were 13.6 billion litres in 2020, a 17% decline on 2019, reflecting adverse weather impacts at the start of the year and demand destruction, including the significant impact of government restrictions implemented in response to COVID-19. Pleasingly, international volumes were 36% higher than 2019 at 6.5 billion litres, driven by an increase in third-party sales in volatile market conditions, supported by our expanded international storage initiatives. Strong progress executing our International growth strategy In 2020, we remained focused on executing our International growth strategy, with strong organic earnings growth delivered in volatile market conditions. Fuel and Infrastructure International’s EBIT of $85 million was up 18% on 2019. Trading and Shipping plays a key role in our success, sourcing petroleum products from global markets that allow us to meet the needs of our customers in Australia and overseas. Our sourcing capabilities and geographic reach have significantly expanded in recent years, with strong growth observed in third-party fuel volumes in 2020 and storage in the South East Asian region providing scope for our Trading and Shipping business to deliver strong returns on working capital in volatile market conditions. In addition to managing price volatility and volume shock over a disruptive period, the Trading and Shipping business focused on growth through customer, geographic and product expansion. In 2020, this included the extension of our international storage program from the introduction of diesel and jet fuel in 2019, to crude oil in 2020. Our Houston office, which we announced in 2019 as a new strategic initiative to capitalise on the USA’s unique and growing position in international oil markets, achieved operational readiness in October 2020. The recently established Houston office has been supporting our Singapore team with investigating new international markets and identifying sourcing improvement opportunities, and they will continue to work together to identify further growth potential in 2021. Our Gull business in New Zealand performed well during the year, with volumes growing by 4%. The business opened 10 new sites in 2020, with 9 more planned for 2021. For Seaoil in the Philippines, of which we own a 20% equity interest, volumes showed resilience, despite impacts from government travel restrictions. The business opened an additional 76 sites, with significant potential for long-term network expansion. In 2020, we provided expertise to assist Seaoil’s development of an emerging B2B capability, demonstrating further growth potential. We are tracking well against our 2019 commitment to deliver $70 million in earnings uplift through international growth by 2024. Case study International builds momentum with new office and storage This new office works in combination with our existing team in Singapore to improve sourcing optionality, hours of operation and market insights. We also expanded our international storage program, from jet and diesel in 2019 to crude oil in 2020. Our international storage position brings new flexibility to generate value from blending, storing and re-parcelling products and creates optimisation opportunities. In combination with our Trading and Shipping teams, our storage program has played an important role in 2020 as we managed significant price volatility and volume shock in global markets following the onset of COVID-19. In 2021, we will continue to explore opportunities to expand our storage activities by product and geography in an efficient capital manner that optimises returns for shareholders. In 2020, Ampol reached several milestones in its International growth strategy, with the opening of a new Trading and Shipping office in Houston and the expansion of our international storage program supported by favourable market conditions. First established in 2013, our Trading and Shipping operations play a key role in our success, sourcing petroleum products from global markets that connect to customer needs in both Australia and other international markets. Over the past seven years, we have leveraged this skill base to expand capabilities and increase opportunities to capture value and sustainably grow long-term earnings. This has included expanding the number of countries we source from and continuing to build our international customer base, along with the acquisition of Gull New Zealand and a 20% interest in Seaoil in the Philippines. In 2020, we achieved operational readiness at our Houston Trading and Shipping office, which aims to capitalise on the USA’s unique position in international crude markets. 13 Annual Report 2020Fuels and Infrastructure continued Maximising the value of our assets Returns from our assets were impacted by lower demand in 2020 due to COVID-19 restrictions, which reinvigorated our focus on maximising value, cost efficiency and capital effectiveness within our infrastructure network. We have the leading position in two of the largest demand centres in the country, being New South Wales and Queensland, with our position entrenched by the scale of our supply position and the quality of our privileged infrastructure. This includes our significant holdings at Kurnell and Lytton, which remain valuable assets that are key to our ongoing operations and have significant future optionality. To capture further value, we are investigating opportunities to augment our infrastructure positions in other markets, as well as considering repurposing assets for the short-term, releasing small non-strategic assets, and finally, conducting a review of our operations at the Lytton refinery. In 2020, regional refining margins came under sustained pressure from weak product demand and global economic conditions following the onset of COVID-19, and this resulted in a Lytton RCOP EBIT loss for the year of $145 million. Ampol took strong action throughout the year to protect cash flows, and in April we brought forward and successfully delivered our planned T&I. Lytton returned to operation from September 2020, with a production volume of 3.5 billion litres for the full year. As well as the global economic impact of COVID-19, there are a range of other headwinds that have and will continue to impact refining. These include the stronger Australian dollar, the continued growth in new supply capacity in the region and, in the longer term, significant capital investment required to meet new fuel quality standards. Due to these factors, and the impact of COVID-19 demand destruction on refiner margins, Ampol made the decision to commence a comprehensive review of the Lytton refinery to determine the best operating model over the medium-term. 14 We took steps to improve our safety performance in 2020 Total Recordable Injury Frequency Rate (TRIFR) of 4.6 60% on 2019 Days Away From Work Injury Frequency Rate (DAFWIFR) of 1.1 70% on 2019 The review, which commenced in October 2020 and will conclude in the first half of 2021, will consider all options for the facility’s operations and for the connected supply chains and markets it serves. These options include closure and permanent transition to an import model, the continuation of existing refining operations and other alternate models of operation, including the necessary investment required to execute each of the options. All relevant strategic, economic and operational factors are being considered, including measures announced by the Australian Government to support refining and bolster fuel security. We have maintained our position as the number one transport fuels provider Despite a challenging year, Ampol remains the number one provider of transport fuels in Australia. While Australian fuel volumes were impacted by COVID-19 related demand destruction, and the associated loss of scale across the supply chain, our performance was resilient and we have continued to build on our strong customer and industry knowledge. Ampol LimitedIn 2020, key sectors such as aviation and retail were significantly impacted by government restrictions. This was partly balanced against strong demand in mining and agriculture, with our diversified customer portfolio also supporting resilience in our sales volumes. Australian sales volumes, including to Convenience Retail and to our broader base of Australian wholesale customers, fell by 17% to 13.6 billion litres in 2020, with jet fuel volumes declining by 56%. The demand outlook for 2021 will remain uncertain as Australia continues to manage the spread of COVID-19. Jet fuel demand is expected to remain extremely challenged as the travel restrictions continue, with international flights representing more than 75% of Ampol’s 2019 jet fuel volumes. Finally, while traditional transport fuels are expected to remain resilient and growing in the Australian market in the medium-term, we are maintaining a focus on understanding the energy transition and the ongoing focus on decarbonisation. We have identified a broad set of future energy themes and are mapping these to our proven strengths to develop multiple areas where we have a right to play. This will allow us optionality in the near-term and, over the long-term, help us build a portfolio of positions to protect and grow value for shareholders as the energy transition pathway becomes clearer. We will continue to do this through test and learn opportunities and potential larger-scale opportunities as commercial viability improves. Improving our safety performance In 2020, Fuels and Infrastructure saw a 60% reduction in its Total Recordable Injury Frequency Rate (TRIFR), achieving a 4.6 for the year. It also saw a 70% reduction in the Days Away From Work Injury Frequency Rate (DAFWIFR), achieving a 1.1. This was an outstanding result that reflects a concerted effort by management, supervision and frontline team members on maintaining a strong safety culture. This was supported by targeted strategies and fit-for-purpose initiatives and campaigns, including a slips, trips and falls campaign, back to basics campaign and our Move4Life program. 15 Annual Report 2020Convenience Retail Convenience Retail delivered a strong result in 2020, with improved performance in both fuel and shop earnings RCOP EBIT up 43% on 2019 7% increase in like-for-like sales 10.1 TRIFR, down 28% on 2019 108 sites returned to core network given improved performance Essential pharmaceuticals delivery range launched through Uber Eats 4 new pilot Ampol Woolworths Metro stores added to network 26 sites transitioned to Ampol brand Major milestones included the practical completion of the transition of franchise stores to company operations, the launch of our first rebranded Ampol retail stores, the opening of another four Ampol Woolworths Metro sites and further improvement in our operational performance. These milestones have built on our ongoing transformation toward being a market leader in the fuel and convenience sector. Financial performance Convenience Retail delivered strong performance in 2020, with improvement in both fuel and shop earnings. Overall, the business delivered an RCOP EBIT of $287 million, an increase of 43% on 2019. Retail fuel earnings were driven by significant improvement in retail fuel margins. This offset volume weakness caused by bushfires and floods in the early part of the year, followed by government restrictions implemented in response to COVID-19 from late March. Total fuel sales volumes were 4.1 billion litres in 2020, 14% lower than the 4.8 billion litres in 2019. Strong momentum in execution of our retail growth strategy is evidenced through a 7% increase in like-for-like sales in 2020, with strong growth in basket size reflecting ongoing improvement in our customer offer. This shop growth also reflects a behaviour that accelerated during COVID-19, with Australians spending more time in their local area and seeking out the convenience of our network and range to meet their daily shopping needs. The $25 million increase in shop contribution margin in 2020 was achieved despite a reduced network size as we progressed the refinement of our network footprint. Improving the quality of our network In 2020, we made significant progress in refining our network footprint to position the business to deliver stronger returns. This work has leveraged our network review announced in 2019, which identified 500 sites within our controlled network that had a clear opportunity to deliver growth through disciplined execution and an enhanced convenience offer, as well as 240 sites that were identified as non-core. Pleasingly, through improved execution of fuel and shop performance, we have lifted ROCE at 108 non-core sites and pulled them back into the core network. The return of 108 sites to the core network, as well as the closure of marginal sites, has seen our non-core network reduce to approximately 100 sites. Approximately 20 further non-core sites are planned for closure in 2021 and we will continue to explore alternative avenues to maximise returns from the approximately 80 remaining non-core sites as part of business as usual activity, with a large number likely to be closed or transferred to alternative operators. Further to these initiatives, we completed our Convenience Retail property transaction, with the Charter Hall and GIC consortium acquiring a 49% interest in 203 of our core freehold retail property sites. We also successfully completed the divestment of 25 higher and better use sites, which was announced late in 2019, for $136 million. Moving forward, we will continue to look for opportunities to release capital and optimise site utilisation. We will also continue to review property markets and ongoing site performance in 2021. 16 Ampol Limited Case study Ampol and Uber Eats supporting Australians through COVID uncertainty In 2020, Ampol and Uber Eats partnered to deliver an Australian first in the convenience industry, providing consumers the ability to order essential pharmaceutical items right to their front door. Accessible through the Ampol Foodary shop on the Uber Eats app, over-the-counter pharmaceutical products, such as Panadol, Nurofen, Zyrtec, Codral and Advil, are available for delivery from Ampol stores across Australia, with delivery times averaging less than 30 minutes. The offer supports Australians to isolate when they are sick and keep themselves and their families safe. This pharmaceutical category complements the broad range of items already available through the Foodary Uber Eats shop that was launched in 2019, including healthy ready-to-eat meals, sandwiches, protein snacks, hot food, coffee, health and beauty and general grocery products. Joanne Taylor, Ampol’s Executive General Manager, Convenience Retail, said that Ampol’s Uber Eats offering is adapting to changing consumer needs in the new ‘COVID-normal’, and supporting all shopper missions from a late-night snack to a top-up grocery shop. “Our Uber Eats delivery offer forms part of our strategy to achieve growth through targeted consumer-focused programs that deliver more convenience to Australians. “Our Foodary Uber Eats shop was a huge success in 2020, with strong performance confirming that Australians are increasingly looking to safely access essential products from the comfort of their home. “As cities and states around the country have continued to enter short lockdowns, our Uber Eats offer has supported Australians to isolate by giving them all the essentials items they need, right at their fingertips, with basket sizes continuing to increase as customers become more familiar with the breadth of our range.” Uber Eats is available at more than 400 Ampol locations across the country. 17 Annual Report 2020Convenience Retail continued In 2020, we made strong progress on delivering network upgrades and completed the first 26 Ampol transitions. We were also selected by the New South Wales Government as the preferred proponent to redevelop four existing highway service centres located on the M4 Motorway at Eastern Creek and on the M31 Hume Highway at Pheasants Nest. These four tier-one sites are exposed to high traffic flow – given their privileged locations on major motorways – with expected total fuel volumes post redevelopment of approximately 150ML. They offer strong potential for growth by leveraging Ampol’s innovative convenience formats and QSR offerings. The award of these new contracts in 2020 reflects our market-leading position in fuel and the strength of our formats. The redevelopment of these sites will strengthen our network. Transition of franchise network reaches practical completion Optimisation and range driving growth in shop performance In 2020, we added another 112 sites to company operations. Over four years, we have progressed from having less than 1,000 employees in retail, to over 6,800. The successful completion of the franchise transition provides us with the platform to focus on the execution of our retail strategy that will deliver improved returns for shareholders. In 2020, we delivered strong performance in shop, with total network shop sales growing by 4% and like-for-like sales by 7%. This improvement was underpinned by the breadth of our range and strong growth in chilled perishables, groceries, beverages, tobacco and general merchandise. This improved performance is also a result of the execution of key customer-focused initiatives, including our integration with Uber Eats, as well as range and format improvements. In 2020, we added another approximately 75 sites to Uber Eats, and launched a new essential pharmaceuticals category in our delivery range, which was an Australian first for the convenience industry. We also benefited from scale and range advantages enabled by our wholesale supply agreement with Woolworths, with strong performance in categories including chilled items, confectionery and groceries. 18 Ampol LimitedExecuting our format strategy and leveraging the rebrand In 2020, we were encouraged by the strong results from our first two flagship Ampol Woolworths Metro pilot stores that were opened in late 2019. Over the course of the year, we observed strong sales uplift and margin expansion, while driving a significant reduction in operational costs. We maintained a disciplined approach to format upgrades in 2020, pausing during the middle of the year due to COVID-19 and resuming these works in the fourth quarter, delivering an additional four Ampol Woolworths Metro stores across Sydney. We applied learnings from the first two pilot stores and achieved a reduction in capital spend ranging from 20–30%, with an enhanced layout designed to enable further labour and waste optimisation. In 2021, we will extend the pilot with plans to open a further 20 Ampol Woolworths Metro sites, applying the insights from our pilot stores. The revitalisation of Ampol across our network will present an opportunity to refresh the appearance of our company-controlled sites in 2021, enabling us to transition our shops to a base-level Foodary format. Upon the conclusion of the rebrand, our convenience shops will carry either the Foodary or Ampol Woolworths Metro brand. Improvement in operational performance In 2020, we delivered improvements in operational performance, with new initiatives to enhance the customer experience, become more efficient and reinforce the right safety behaviours. Our retail teams responded quickly to the onset of COVID-19 to ensure the safety of customers, employees, and partners, including reducing customer touch points in-store and increasing sanitation practices. We also implemented initiatives such as additional cleaning procedures for shift changeovers, protective screens at high-volume sites, temporarily stopping use of reusable coffee cups, increasing signage and making hand sanitiser and wipes available for customers wherever possible. We also continued to work towards improving our safety culture with an objective of reducing the number of safety incidents through a focus on behavioural safety and improving safety leadership. We saw an overall improvement in our key safety metric, TRIFR, achieving 10.1 for the period. Recordable injuries remained stable throughout the year and most incidents related to the performance of everyday tasks, highlighting the criticality of safety culture and behaviours. In 2021, we will remain focused on improving our safety performance, with key priorities for the year including the delivery of a behavioural safety program, continued safety inspections and leadership visits. 19 Annual Report 2020Sustainability We take a responsible and long-term view to delivering sustainable value for our stakeholders Safety People Environment Community Total Recordable Injury Frequency Rate 1 Female representation at leadership level Carbon emissions 3 4.6 10.1 Fuels and Infrastructure Convenience Retail 37.7% 798,708 Total emissions Total community investment 5 $2.47m Days Away from Work Injury Frequency Rate 2 Overall female representation 0 major spills (Vol (l) >=8,000L) Community complaints 1.1 4.8 42.8% Fuels and Infrastructure Convenience Retail 4 minor spills (160 < Vol (l) <8,000L) 34 Overall 44% from FY19 Process safety Employee engagement score 0 marine spills (Any quantity) Supporting the education of more than 0 1 Tier One Safety event Tier Two Safety event 76% 1 Category 3 environmental incident 4 12,080 children6 across Australia Corresponding United Nations Sustainable Development Goals Aligning our approach with global standards To help play our role in addressing the significant sustainability challenges our world faces, we have mapped out the United Nations Sustainable Development Goals (SDGs) against our Sustainability Strategy. 4 Quality education 7 Affordable and clean energy 8 9 Decent work and economic growth Industry, innovation and infrastructure In 2020, we also became a signatory to the United Nations Global Compact. 10 Reduced inequalities 13 Climate action 20 Ampol Limitedf a S n future o b r a c w o l a o t n o i t i s n a r T A e a n d r e s ponsible busine s s C o n o t p i t n i u m o i u s i s a t i m o p n r o o v f a e m s s e e n ts t a nd n ities u s Contribution t o t h e tralian economy a n d c o m m u Strategy and approach In executing our corporate strategy and delivering on our company purpose – Powering better journeys, today and tomorrow – we recognise the need to take a responsible and long-term view to delivering sustainable value for our customers, shareholders, local communities and employees. Our approach involves making sustainability core to decision making and balancing environmental, social and governance aspects with our broader strategic objectives. In 2019, we prepared a three-year Sustainability Strategy, which is an integral part of our overarching corporate strategy. We have defined sustainability across four pillars Safe and responsible business Being safe and ethically responsible in how we do business. Developing and looking after our people to support the delivery of our strategy Continuous improvement and optimisation of assets Delivering operational excellence, utilising resources efficiently Contribution to the Australian economy and communities Generating economic benefits for Australia and helping to develop communities in the areas we operate Transition to a low carbon future Future-proofing Ampol and supporting our customers in the transition to a low carbon future. Engaging with our key stakeholders, including shareholders 1. Total number of occupational injuries per one million hours worked. Occupational injuries include an injury requiring days away from work, restrictions in the work performed or medical treatment 2. Total number of days away from work per one million hours worked. Days away from work is defined as the number of days a worker is certified by a physician to be unfit to perform normal duties, starting from the day after the incident occurred 3. Emission estimates are prepared in accordance with the Australian National Greenhouse and Energy Reporting Determination 2008. This includes emissions and energy consumption at corporate offices, pipelines, depots and diesel stops and marine fuels 4. Incident resulting in medium to long-term environmental harm and remediation effort (>3 months) 5. Total community investment value includes management costs and additional contributions to the community including employee volunteering 6. Clontarf Foundation: 9,000; Stars Foundation: 1,000; The Smith Family: 480; Ampol Best All Rounder: 1,600 Safe and responsible business Safety performance improved significantly in 2020 2020 saw a significant reduction in recordable injuries and days away from work across the business. This was a result of the focus put on improving safety leadership, as well as the execution of targeted initiatives and campaigns aimed at educating employees on safety practices and procedures. Our Fuels and Infrastructure business saw a 60% reduction in recordable injuries and a 70% reduction in days away from work injuries, with no Category 2 injuries during the year. These results were achieved during a period of disruption due to COVID-19, and an extended T&I at the Lytton refinery, which are recognised as times of enhanced risk. Recordable injuries within our Convenience Retail business remained stable compared to 2019, with most incidents relating to the performance of everyday tasks, and regrettably, the business recorded one Category 2 injury in 2020. We recognise the need to continue our focus on improving safety culture and safety leadership to reduce these incidents, with key priorities for 2021 including the delivery of our Safety Blackspot Program and continued safety inspections by the senior leadership team. Managing health and safety risks associated with the COVID-19 pandemic The health and safety of our people and customers has been a primary focus for Ampol in 2020 as we dealt with the onset of COVID-19. In early March, a crisis team was activated with the key objectives of keeping our people, customers and community safe, and ensuring that our business could continue to operate as an essential service. 21 Annual Report 2020 We adopted stringent protocols to mitigate infection risk across our network. This included complying with changing regulatory requirements and investing in the necessary controls to support health and safety. In Convenience Retail, we developed COVID-Safe training, implemented alternate rosters to limit employee cross-over, reinforced hygiene standards, increased sanitation and installed Perspex screens at our checkout points. In Fuels and Infrastructure, we implemented thermal screening at the Lytton refinery, excluded non-essential personnel from small indoor areas, such as control rooms, and we also implemented restrictions at our wharfs for both Ampol and ship personnel. To support our people, front-line employees were supported with additional COVID-19 leave, and office-based employees were enabled with remote working capability, including the use of Microsoft Teams to conduct virtual meetings. Managing environmental risk During the year, we continued the delivery of our group-wide environmental management governance framework, with the objective of aligning our business operations with the principles set out in ISO14001:2015 Environmental Management Systems. Key focus areas in 2020 included regular reporting on environmental performance, delivering legal obligation training to the Ampol Leadership Team and preparing guidance materials for senior leaders for site visits. Unfortunately, during 2020, Ampol recorded one Category 3 environmental event as a result of a leak from an underground tank at a retail site. A detailed investigation and environmental site assessment was executed, with a remediation plan put in place, and we continue to engage with local residents and businesses. To prevent future incidents of this nature occurring, Ampol has reviewed and updated its underground petroleum storage risk model and implemented initiatives to improve control effectiveness, such as more frequent Statistical Inventory Reconciliation Analysis (SIRA) reporting, proactive Equipment Integrity Testing (EIT) and the roll out of Automatic Tank Gauging (ATGs) across our network. 22 Supporting our people In 2020, we conducted our annual employee engagement survey to improve our understanding of the experience of our people, and the areas where we need to improve. Despite the significant disruption to our workforce because of COVID-19, our engagement levels remained strong at 76%. We will look to improve on this result in 2021 by enhancing the clarity of our company strategy, better celebrating the achievements of individuals and teams and supporting more courageous thinking in the way we work and make decisions. To promote general employee wellbeing, in 2020 we launched our inaugural Ampol Wellbeing Month – an education program designed to encourage employees to take care of their health, while educating on the support provided by our Employee Assistance Program. During the year, we continued to encourage an inclusive work environment with the celebration of a number of cultural days, such as NAIDOC Week, Wear it Purple Day, Close the Gap and National Reconciliation Week. These celebrations were managed by our employee-led working groups – Women in the Fuels Industry (WIFI), Indigenous Trailblazers and the Rainbow Alliance – which are supported by our Diversity and Inclusion Council. In acknowledgement of our focus on gender equality, we were ranked 26th on Equileap’s Global Top 100 gender-equal companies. Respecting human rights We support fundamental human rights and the prevention of modern slavery and human trafficking. We have developed a Human Rights Policy and framework and responded to our obligations under the Modern Slavery Act 2018 (Cth). This included mapping our supply chain, conducting a high-level modern slavery risk assessment and conducting a prioritisation exercise for high-risk areas in our supply chain. We have delved into the risk areas which we identified as top priorities and introduced steps to assess and address modern slavery risk within our operations and supply chain. Key activities in 2020 included risk assessments, supplier engagement, training and strengthening grievance mechanisms. Our first Modern Slavery Statement will be published in 2021. Continuous improvement and optimisation of assets Being efficient with our energy and water use We recognise that we expend large amounts of energy and water, and we are focused on delivering initiatives to reduce the use of these resources. Our Lytton refinery constitutes the largest component of our energy footprint, comprising 99.6% in 2020. To reduce Lytton’s energy use, we have continued the delivery of efficiency projects and operational optimisation opportunities, including the upgrade of the analysers on its furnaces and the reinstatement of steam raiser economisers. We are also continuing our focus on minimising Lytton’s impact on water resources, which comprises 80% of our total water use. In 2020, approximately 67% of Lytton’s water use came from recycled sources. To reduce energy use across our retail operations, in 2021 we will deliver an energy management program, which will be focused on improving energy efficiency across our retail sites and increasing the use of renewable energy. $2.47m invested in communities via the Ampol Foundation In 2020, more than 1,600 students received the Ampol Best All Rounder Award for demonstrating exceptional leadership and community spirit in unprecedented circumstances The Ampol Foundation supports the education of more than 12,080 children across Australia Ampol LimitedPartnership with The Smith Family announced in October 2020 Contribution to the Australian economy As a proud and independent Australian company, we are committed to being a positive contributor to communities and using our network and employee base to improve the lives of all Australians. Our revitalisation as Ampol has renewed our focus on communities in 2020 and provided an opportunity to ensure our activities have proven social impact, make a meaningful difference and align with our new company purpose of Powering better journeys, today and tomorrow. Powering better journeys for young Australians through the Ampol Foundation At Ampol, we are passionate about championing education and employment opportunities for Australia’s youth, and have made this a major focus of the Ampol Foundation in 2020. We believe that investment in youth development and education has a long-lasting impact on broader society. In 2020, we announced a new partnership with The Smith Family, complementing our existing long-term partnerships with Stars Foundation and Clontarf Foundation, along with our Ampol Best All Rounder program which reaches thousands of schools each year. Through these programs, Ampol supports the education of more than 12,080 children1 across Australia. The Ampol Best All Rounder Award, Australia’s most iconic secondary education recognition program, entered its 35th year in 2020 and recognised more than 1,600 students who demonstrated exceptional leadership and community spirit during unprecedented circumstances. Ampol also announced a new partnership with Surf Life Saving Australia in December 2020. 1. Clontarf Foundation: 9,000; Stars Foundation: 1,000; The Smith Family: 480; Ampol Best All Rounder: 1,600 The Smith Family In October 2020, Ampol announced a new partnership with The Smith Family. Through our partnership, we are investing directly in the Learning for Life program, which provides young Australians experiencing disadvantage with the extra tools and support they need to stay at school and go onto further study or work. We are also supporting The Smith Family through fundraising activities and engaging our employees in volunteering and other programs, such as iTrack mentoring and work inspiration. Surf Life Saving Australia Our partnership with Surf Life Saving Australia will see the Ampol brand on the sleeve of the iconic surf lifesaving patrol shirt on beaches across the country, with Ampol to also have a presence at major surf lifesaving events, including the Coolangatta Gold and the Australian Surf Life Saving Championships Being a positive contributor In 2020, as we revitalised the Ampol brand and reaffirmed our commitment to communities, we enabled our employees to engage with social issues and organisations that are important to them. This was launched through our inaugural Positive Contributor Day held in October 2020 as part of the internal launch of Ampol. On Positive Contributor Day, employees were encouraged to take a day off from work and donate their time to a charity or community group of their choice, while our retail network conducted a fundraising effort that raised more than $40,000 for The Smith Family. Transition to a low carbon future Climate change considerations for our business We are committed to publishing climate disclosures in line with the recommendations of the Task Force on Climate-related Financial Disclosures Case study Ampol named in Top 20 Best Workplaces to Give Back In 2020, Ampol was honoured to be ranked 20th in Australia’s Top 40 Best Workplaces to Give Back. The list, an initiative of Good Company, recognises businesses that, despite being in the first recession in three decades, continue to demonstrate responsible leadership and support employees to give back to local communities. Ampol was recognised for its support of non-profit organisations, volunteer leave, payroll giving, the Ampol Best All Rounder program and our actions to support affected communities during the 2019-2020 Australian bushfire crisis.  (TCFD). In 2019, we conducted a qualitative assessment to determine the physical and transitional climate risks most relevant to our business. In 2020, we built on this important work by further integrating management of climate change into our financial and strategic planning processes and tracking our performance against the recommendations of TCFD. In 2020, we made progress on our climate change risk strategy that we launched in 2019. Key activities over the course of the year included the introduction of an internal carbon price for investment and strategic decision making, undertaking climate scenario analysis and engagement with our stakeholders, including holding an ESG investor roadshow. Climate scenario analysis Undertaking climate scenario analysis allows our business to estimate how we are positioned for different climate futures over the medium to long-term. In 2020, we tested our operations and corporate strategy against two plausible climate futures including a business-as-usual scenario (3-4 degrees C). We will be providing a report of this analysis in our Decarbonisation and Energy Transition Strategy, to be released in Q2 2021. 23 Annual Report 2020Financial report The 2020 Financial Report for Ampol Limited includes: − Directors’ Report − Lead Auditor’s Independence Declaration − Directors’ Declaration − Independent Auditor’s Report to the Shareholders of Ampol Limited − Consolidated Income Statement − Consolidated Statement of Comprehensive Income − Consolidated Balance Sheet − Consolidated Statement of Changes in Equity − Consolidated Cash Flow Statement − Notes to the Financial Statements for the year ended 31 December 2020 Ampol Group For the purposes of this report, the Ampol Group (collectively, the “Group”) refers to: − Ampol Limited (Ampol), the parent company of the Group listed on the Australian Securities Exchange (ASX) − Major operating companies, including Ampol Australia Petroleum Pty Ltd (formerly Caltex Australia Petroleum Pty Ltd) − Wholly owned entities and other entities that are not controlled by the Group Contents Directors’ report Financial statements Ampol Limited ACN 004 201 307 Shareholder Information 25 78 132 Directors’ Report Directors’ Report 5 The Board Introduction Ampol Limited (formerly Caltex Australia Limited) presents the 2020 Directors’ Report (including the Remuneration Report) and the 2020 Financial Report for Ampol Limited (Ampol) and its controlled entities (Ampol Group) for the year ended 31 December 2020. An Independent Audit Report from KPMG, as external auditor, is also provided. Board of Directors The Board of Ampol comprises Steven Gregg (Chairman), Matthew Halliday (Managing Director and CEO), Mark Chellew, Melinda Conrad, Michael Ihlein, Gary Smith, Barbara Ward AM and Penny Winn. Bruce Morgan retired from the Ampol Board as an Independent Non-executive Director, effective 14 May 2020. 1 3 5 7 2 4 6 8 1 Steven Gregg Chairman and Independent Non-executive Director Date of appointment: 9 October 2015 Board Committees: Nomination Committee (Chairman) Steven has over 30 years’ experience in investment banking and management consulting in Europe and Australia. He brings to the Board extensive executive, corporate finance and strategic experience. Steven is Chairman of Tabcorp Holdings Limited and a director of Challenger Limited and Challenger Life Company Limited, and William Inglis & Son Limited. He is also the Chairman of Unisson Disability Limited and a trustee of the Australian Museum. He has previously served as Chairman of Goodman Fielder Limited and Austock Group Limited. Steven has extensive Australian and international experience, with ABN AMRO (as Senior Executive Vice President and Global Head of Investment Banking), Chase Manhattan, Lehman Brothers and AMP Morgan Grenfell. His most recent executive role was as a Partner at McKinsey & Company. Steven holds a Bachelor of Commerce from the University of New South Wales. 2 Matthew Halliday Managing Director and CEO Date of appointment: 29 June 2020 Matthew Halliday was appointed Managing Director and Chief Executive Officer in June 2020. He joined Ampol in April 2019 as Chief Financial Officer. Prior to joining Ampol, Matthew enjoyed a successful career with Rio Tinto spanning 20 years, where he held senior finance and commercial roles across several divisions and geographies. Matthew is a Chartered Accountant and holds a Bachelor of Commerce from the University of Western Australia and an MBA from London Business School. 3 Mark Chellew  Independent Non-executive Director Date of appointment: 2 April 2018 Board Committees: Safety and Sustainability Committee, Human Resources Committee and Nomination Committee Mark brings to the Board international expertise in industry, strategy, governance and large capital projects with a background in manufacturing, mining and process industries. He is currently Chairman of Cleanaway Waste Management Limited. Mark was formerly Chairman of the industry body Manufacturing Australia and a director of Virgin Australia Holdings Limited and Infigen Energy Limited. Mark was the Chief Executive Officer and Managing Director of Adelaide Brighton and prior to that, held executive positions at Blue Circle Industries and CSR Limited. Mark holds a Bachelor of Science (Ceramic Engineering) from the University of New South Wales, a Master of Engineering (Mechanical) from the University of Wollongong and a Graduate Diploma of Management from the University of New South Wales. 25 Annual Report 2020 6 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Directors’ Report continued 6 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Directors’ Report continued The Board continued 4 Melinda Conrad Advisor with Poten & Partners, working with the LNG Commercial team Gary holds a Bachelor of Engineering (Mechanical Engineering) and Master of Science (Chemical Engineering and Chemical Commercial team Technology) from the University of New South Wales. Advisor with Poten & Partners, working with the LNG Independent Non-executive Director Date of appointment: 1 March 2017 Audit Committee, Human Resources Committee and Nomination Committee The Board continued 4 Melinda Conrad Independent Non-executive Director Date of appointment: 1 March 2017 Melinda brings to the Board over 25 years’ experience in Board Committees: Audit Committee, Human Resources Committee business strategy, marketing and technology led transformation, and Nomination Committee and brings skills and insights as an executive and director from a range of industries, including retail, financial services and Board Committees: healthcare. 5 Michael Ihlein Board Committees: 6 Gary Smith Board Committees: Gary holds a Bachelor of Engineering (Mechanical Engineering) and Master of Science (Chemical Engineering and Chemical Technology) from the University of New South Wales. 7 Barbara Ward AM Independent Non-executive Director Date of appointment: 1 April 2015 Board Committees: 7 Barbara Ward AM Human Resources Committee (Chairman), Audit Committee Independent Non-executive Director and Nomination Committee Date of appointment: 1 April 2015 Board Committees: Human Resources Committee (Chairman), Audit Committee and Nomination Committee Barbara brings to the Board strategic and financial expertise in senior management roles. Barbara is a director of Qantas Airways Limited, a number of Brookfield Multiplex Group companies and Crestone Holdings Limited. Melinda brings to the Board over 25 years’ experience in business strategy, marketing and technology led transformation, and brings skills and insights as an executive and director from a range of industries, including retail, financial services and healthcare. Melinda is currently a director of ASX Limited, a director of Stockland Group and a director of the George Institute for Global Health and the Centre for Independent Studies. She is a member of the Australian Institute of Company Directors Corporate Governance Committee and an Advisory Board member of Five V Capital. Melinda is currently a director of ASX Limited, a director of Stockland Group and a director of the George Institute for Global Health and the Centre for Independent Studies. She is a member of the Australian Institute of Company Directors Melinda has previously served as a director of OFX Group Corporate Governance Committee and an Advisory Board Limited, The Reject Shop Limited, David Jones Limited, APN member of Five V Capital. News & Media Limited, the Garvan Medical Research Institute Foundation and as a member of the ASIC Director Advisory Panel. Melinda held executive roles at Harvard Business School, Colgate-Palmolive, several retail businesses as founder and CEO, and in strategy and marketing advisory. Barbara was formerly a director of the Commonwealth Bank of Australia, Lion Nathan Limited, Multiplex Limited, Data Advantage Limited, O'Connell Street Associates Pty Ltd, Allco Finance Group Limited, Rail Infrastructure Corporation, Delta Electricity, Ausgrid, Endeavour Energy and Essential Energy. She was also Chairman of Country Energy, NorthPower and HWW Limited, a Board member of Allens Arthur Robinson, The Sydney Opera House Trust and Sydney Children's Hospital Foundation and served on the Advisory Board of LEK Consulting. Melinda has previously served as a director of OFX Group Limited, The Reject Shop Limited, David Jones Limited, APN News & Media Limited, the Garvan Medical Research Institute Foundation and as a member of the ASIC Director Advisory Panel. Melinda held executive roles at Harvard Business School, Colgate-Palmolive, several retail businesses as founder and CEO, and in strategy and marketing advisory. Melinda holds a BA (Hons) from Wellesley College in Boston, an MBA from Harvard Business School, and is a Fellow of the Australian Institute of Company Directors. Barbara was formerly a director of the Commonwealth Bank of Australia, Lion Nathan Limited, Multiplex Limited, Data Advantage Limited, O'Connell Street Associates Pty Ltd, Allco Finance Group Limited, Rail Infrastructure Corporation, Delta Electricity, Ausgrid, Endeavour Energy and Essential Energy. She was also Chairman of Country Energy, NorthPower and HWW Limited, a Board member of Allens Arthur Robinson, The Sydney Opera House Trust and Sydney Children's Hospital Foundation and served on the Advisory Board of LEK Consulting. Barbara brings to the Board strategic and financial expertise in senior management roles. Barbara is a director of Qantas Airways Limited, a number of Brookfield Multiplex Group companies and Crestone Holdings Limited. Barbara was Chief Executive Officer of Ansett Worldwide Aviation Services from 1993 to 1998. Prior to that, she held various positions at TNT Limited, including General Manager Finance, and also served as a Senior Ministerial Advisor to The Hon PJ Keating. Melinda holds a BA (Hons) from Wellesley College in Boston, an MBA from Harvard Business School, and is a Fellow of the Australian Institute of Company Directors. Barbara holds a Bachelor of Economics and a Master of Political Economy from the University of Queensland and is a member of the Australian Institute of Company Directors. Barbara was Chief Executive Officer of Ansett Worldwide Aviation Services from 1993 to 1998. Prior to that, she held various positions at TNT Limited, including General Manager Finance, and also served as a Senior Ministerial Advisor to The Hon PJ Keating. Independent Non-executive Director Date of appointment: 1 June 2020 5 Michael Ihlein Audit Committee (Chairman), Safety and Sustainability Independent Non-executive Director Committee and Nomination Committee Date of appointment: 1 June 2020 Board Committees: Audit Committee (Chairman), Safety and Sustainability Committee and Nomination Committee Mike brings to the Board financial expertise and experience as an international executive from a range of industries, including previous roles as CEO and CFO of Brambles Limited and CFO of Coca-Cola Amatil Limited. Mike is currently a director of Scentre Group, CSR Limited, Inghams Group Limited and the not-for-profit mentoring organisation Kilfinan Australia Ltd. Mike brings to the Board financial expertise and experience as an international executive from a range of industries, including previous roles as CEO and CFO of Brambles Limited and CFO of Coca-Cola Amatil Limited. 8 Penny Winn Independent Non-executive Director Date of appointment: 1 November 2015 Board Committees: Safety and Sustainability Committee (Chairman), Audit Committee and Nomination Committee Mike holds a Bachelor of Business Studies (Accounting) from the University of Technology, Sydney. He is a fellow of the Australian Institute of Company Directors, CPA Australia and the Financial Services Institute of Australasia. Mike is currently a director of Scentre Group, CSR Limited, Inghams Group Limited and the not-for-profit mentoring organisation Kilfinan Australia Ltd. Mike holds a Bachelor of Business Studies (Accounting) from the University of Technology, Sydney. He is a fellow of the Australian Institute of Company Directors, CPA Australia and the Financial Services Institute of Australasia. Independent Non-executive Director Date of appointment: 1 June 2020 Human Resources Committee, Safety and Sustainability Committee and Nomination Committee Gary brings to the Board substantial Australian and international oil industry experience with a career in oil and gas which spans 40 years, including 20 years with Shell and various executive roles within the industry, including General Manager Refining, Supply and Distribution of Ampol Limited (formerly Caltex Australia Limited). Gary is currently employed as a Senior 6 Gary Smith Independent Non-executive Director Date of appointment: 1 June 2020 Board Committees: Human Resources Committee, Safety and Sustainability Committee and Nomination Committee Gary brings to the Board substantial Australian and international oil industry experience with a career in oil and gas which spans 40 years, including 20 years with Shell and various executive roles within the industry, including General Manager Refining, Supply and Distribution of Ampol Limited (formerly Caltex Australia Limited). Gary is currently employed as a Senior 8 Penny Winn Independent Non-executive Director Date of appointment: 1 November 2015 Board Committees: Safety and Sustainability Committee (Chairman), Audit Committee and Nomination Committee Penny brings to the Board Australian and international strategic, major transformation and business integration, technology and retail marketing experience. Penny is currently a director of CSR Limited, a director of Goodman Limited, Goodman Funds Management Limited and a director of Coca-Cola Amatil Limited. She has previously served as Chair and a director of Port Waratah Coal Services Limited, a director of a Woolworths business, Greengrocer.com, a Myer business, sass & bide, and Quantium Group. Prior to her appointment to Ampol, Penny was Director Group Retail Services with Woolworths Limited. She has over 30 years of experience in retail with senior management roles in Australia and internationally. Penny brings to the Board Australian and international strategic, major transformation and business integration, technology and retail marketing experience. Penny is currently a director of CSR Limited, a director of Goodman Limited, Goodman Funds Management Limited and a director of Coca-Cola Amatil Limited. She has previously served as Chair and a director of Port Waratah Coal Services Limited, a director of a Woolworths business, Greengrocer.com, a Myer business, sass & bide, and Quantium Group. Penny holds a Bachelor of Commerce from the Australian National University and a Master of Business Administration from the University of Technology, Sydney and is a graduate of the Australian Institute of Company Directors. Prior to her appointment to Ampol, Penny was Director Group Retail Services with Woolworths Limited. She has over 30 years of experience in retail with senior management roles in Australia and internationally. Penny holds a Bachelor of Commerce from the Australian National University and a Master of Business Administration from the University of Technology, Sydney and is a graduate of the Australian Institute of Company Directors. Barbara holds a Bachelor of Economics and a Master of Political Economy from the University of Queensland and is a member of the Australian Institute of Company Directors. 26 Directors’ Report (continued)Ampol Limited Directors’ Report continued Leadership Team 1 3 5 2 4 6 7 1 Michael Abbott Chief Governance and Risk Officer Michael Abbott was appointed as Chief Governance and Risk Officer in January 2021. He is responsible for risk, audit, legal, secretariat, corporate affairs and sustainability. Prior to joining Ampol, Michael spent 15 years at Woodside Energy, holding a variety of senior roles, including Senior Vice President, Corporate and Legal, where he was responsible for multiple corporate disciplines, including government affairs, emergency management, audit, governance, as well as business climate and economic outlook. Before Woodside, Michael spent 13 years working as a private practice lawyer in Australia and Hong Kong. Michael holds a Bachelor of Law and Arts and a Master of Business Administration from the University of Western Australia. 2 Andrew Brewer Executive General Manager, Infrastructure Andrew Brewer was appointed Executive General Manager, Infrastructure in November 2020 and manages Ampol’s Australian manufacturing and distribution assets as well as the Information Technology business. He is an experienced senior executive in the energy and resources sector, having held leadership roles for large-scale facilities and integrated supply chains in the minerals processing, resources and energy industries across Australia, New Zealand and Canada. This includes former roles at Ampol, where he was General Manager of the Kurnell refinery, and later Executive General Manager of Supply Chain Operations and Executive General Manager Transformation. Andrew has returned to Ampol from Refining New Zealand where he held the position of Chief Operating Officer. Andrew has a Bachelor of Engineering (Honours) and a Bachelor of Science from the University of Adelaide and a Diploma in Management from Deakin University. 3 Jeff Etherington Interim Chief Financial Officer Jeff Etherington was appointed Interim Chief Financial Officer in March 2020. He is responsible for finance, accounting, treasury, taxation and procurement. Jeff joined Ampol in November 2014 as Group Treasurer, before being appointed Deputy Chief Financial Officer and Group Treasurer in March 2019. Prior to joining Ampol, Jeff spent over 15 years at Qantas Airways Limited, holding various senior roles including Group Treasurer and Head of Investor Relations. Before Qantas, Jeff spent four years working in treasury at Southcorp Limited, and six years in foreign exchange and trade finance at National Australia Bank Limited. Jeff was a Non-executive Director of Qantas Credit Union (now Qudos Bank) from 2008 to 2015. Jeff is a CPA and holds a Bachelor of Business Studies and a Master of Applied Finance from Monash University. Jeff is also a member of the Australian Institute of Company Directors. 27 Annual Report 2020 6 Joanne Taylor Executive General Manager, Retail, Brand and Culture Joanne Taylor was appointed Executive General Manager of Retail, Brand and Culture in August 2020. She is responsible for Ampol’s retail business, human resources, brand and marketing, and internal communications. Joanne, who joined Ampol in 2016, has over 20 years’ experience in the retail, QSR, hospitality and manufacturing sectors, and brings significant experience in operations, supply chain, communications and human resources to Ampol. In her role she is focused on transforming Ampol’s national network of stores with the revitalisation of the Ampol brand and evolving its retail offer to make life easier every day for millions of Australian consumers and business customers. Prior to joining Ampol, Joanne spent 11 years at McDonald's Australia in operations, franchise, people and supply chain roles. Joanne holds a Bachelor of Commerce from the University of New South Wales. 8 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Leadership Team continued 4 Brent Merrick Executive General Manager, Commercial Brent Merrick was appointed Executive General Manager, Commercial in September 2020. Brent is responsible for the commercial functions of the Fuels and Infrastructure business, including trading and shipping, B2B sales, supply and commercial optimisation across the value chain, as well as building future energy solutions for our customers. Brent joined Ampol in 2000, with his career at the company spanning a range of roles, including his first job as a Process Engineer at the Lytton refinery in Queensland. Brent gained commercial and trading experience through roles in the Australian supply and trading teams, before being seconded to Chevron Singapore. Brent held the roles of National Sales Manager and Transformation Officer in the marketing business before returning to Singapore as a trader. More recently, he was responsible for expanding Ampol’s international operations by establishing offices in Singapore and the United States, which drive the company’s global trading and shipping business. Brent holds a Bachelor of Engineering (Chemical) from the University of Queensland. 5 Alan Stuart-Grant Executive General Manager, Strategy and Corporate Development Alan Stuart-Grant was appointed as Executive General Manager, Strategy and Corporate Development in November 2017 and manages Ampol’s strategy, corporate development, mergers and acquisitions and transformation activities. Prior to joining Ampol, Alan held a senior position in the Oil and Gas department of Glencore plc, and prior to that spent more than a decade in private equity and investment banking, working in Sydney, London and Singapore. Alan holds a Bachelor of Science (Business Administration) degree from the University of Bath and is also a member of the Australian Institute of Company Directors. 28 Directors’ Report (continued)Ampol Limited   Directors’ Report continued 9 Operating and financial review The purpose of the operating and financial review (OFR) is to enhance the periodic financial reporting and provide shareholders with additional information regarding the Group’s operations, financial position, business strategies and prospects. The review complements the Financial Report on pages 58 to 111. 78-131. The OFR may contain forward-looking statements. These statements are based solely on the information available at the time of this report, and there can be no certainty of outcome in relation to the matters to which the statements relate. Company overview Ampol Limited is an independent Australian company and the nation’s leader in transport fuels. We supply the country’s largest branded petrol and convenience network as well as refining, importing and marketing fuels and lubricants. We have a deep history spanning over 120 years, having grown to become the largest transport fuels company listed on the Australian Securities Exchange (ASX). Ampol supplies fuel to around 80,000 customers in diverse markets across the Australian economy, including defence, mining, transport, marine, agriculture, aviation and other commercial sectors. Across our retail network, we serve more than three million customers every week with fuel and convenience products. Our ability to service our broad customer base is supported by our robust supply chain and strategic infrastructure positions across the country, which includes 17 terminals, five major pipelines, 57 depots, 1,926 branded sites (including approximately 708 company-controlled retail sites) and one refinery located in Lytton, Queensland. This network is supported by over 8,200 people across Australia and overseas. In recent years, we have leveraged our Australian business to extend our supply chain and operations into international markets. This includes our Trading and Shipping business that operates out of Singapore and Houston in the USA, and our international storage positions across the Asia Pacific region. We also have a growing presence in New Zealand as owner of Gull New Zealand, which operates the largest independent import terminal in the country and a retail network. Ampol also owns a 20% equity interest in Seaoil, a leading independent fuel company in the Philippines. Ampol Limited returned to its iconic Australian name following shareholder approval on 14 May 2020. The national roll-out of the Ampol brand across our retail network has begun and will be completed by the end of 2022. 29 Annual Report 2020 10 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Operating and financial review continued Group strategy Ampol’s strategy is focused around three elements underpinned by our market-leading position in transport fuels, strategic assets, customer positions and supply chain expertise. 30 Directors’ Report (continued)Ampol Limited Directors’ Report continued 11 Operating and financial review continued We are delivering on our promises Despite the many challenges and disruptions faced in 2020, Ampol made significant progress over the last 12 months delivering on our strategic commitments to shareholders. Completion of the sale of 49% interest in 203 core freehold sites to Charter Hall and GIC consortium has demonstrated the value of our high-quality freehold sites and released significant capital. We have also delivered performance improvements in a significant number of our non-core retail sites and divested 25 higher and better use sites for $136 million in 2019. Good progress has been made on our targeted $195 million earnings before interest and tax (EBIT) uplift by 2024, with the completion of our $40 million cost out program, the strong performance in our Fuels and Infrastructure International business and positive momentum in retail shop performance. We also delivered on our promise to return capital to shareholders with the announcement of a $300 million Off-market Buy-back which completed in early 2021 and released franking credits to Australian investors and is expected to deliver earnings per share accretion. Late in 2020 we also successfully completed a $500 million subordinated notes issuance to wholesale investors in the domestic fixed income market. These subordinated notes are an effective long-term source of capital and proceeds of the issue will be used for general corporate purposes. 31 Annual Report 2020 12 AMPOL LIMITED 2020 Annual Report Directors’ Report continued AMPOL LIMITED AMPOL LIMITED 2020 Annual Report Operating and financial review continued 12 Ampol Group results 31 December 2020 12 Directors’ Report continued On an historical cost profit basis, Ampol recorded an after-tax loss of $485 million for the 2020 full year, including significant items of $337 million loss. This compares with the 2019 full year profit of $383 million, which included significant items of $53 million gain. Directors’ Report continued The 2020 result includes a product and crude oil inventory loss of $360 million after tax, which compares with an inventory loss of $14 million after tax in 2019. 2020 Annual Report A reconciliation of the underlying result to the statutory result is set out in the following table: Operating and financial review continued Operating and financial review continued Ampol Group results 31 December 2020 2019 $m On an historical cost profit basis, Ampol recorded an after-tax loss of $485 million for the 2020 full year, including significant items Ampol Group results 31 December 2020 Reconciliation of the underlying result to the statutory result (after tax) of $337 million loss. This compares with the 2019 full year profit of $383 million, which included significant items of $53 million gain. On an historical cost profit basis, Ampol recorded an after-tax loss of $485 million for the 2020 full year, including significant items The 2020 result includes a product and crude oil inventory loss of $360 million after tax, which compares with an inventory loss of of $337 million loss. This compares with the 2019 full year profit of $383 million, which included significant items of $53 million gain. Net (loss)/profit attributable to equity holders of the parent entity 383 $14 million after tax in 2019. The 2020 result includes a product and crude oil inventory loss of $360 million after tax, which compares with an inventory loss of Deduct/add: Significant items loss/(gain) $14 million after tax in 2019. A reconciliation of the underlying result to the statutory result is set out in the following table: 2020 $m (after tax) (485) (53) 337 A reconciliation of the underlying result to the statutory result is set out in the following table: Deduct/add: Inventory loss RCOP(i) NPAT (excluding significant items) Reconciliation of the underlying result to the statutory result Reconciliation of the underlying result to the statutory result On an RCOP basis, Ampol recorded an after-tax profit for the 2020 full year of $212 million, excluding significant items. This Net (loss)/profit attributable to equity holders of the parent entity compares with an RCOP after-tax profit of $344 million for the 2019 full year, excluding significant items. Net (loss)/profit attributable to equity holders of the parent entity Deduct/add: Significant items loss/(gain) (485) 337 Deduct/add: Significant items loss/(gain) Deduct/add: Inventory loss 337 360 Deduct/add: Inventory loss RCOP(i) NPAT (excluding significant items) RCOP(i) NPAT (excluding significant items) On an RCOP basis, Ampol recorded an after-tax profit for the 2020 full year of $212 million, excluding significant items. This compares with an RCOP after-tax profit of $344 million for the 2019 full year, excluding significant items. On an RCOP basis, Ampol recorded an after-tax profit for the 2020 full year of $212 million, excluding significant items. This compares with an RCOP after-tax profit of $344 million for the 2019 full year, excluding significant items. 360 212 212 383 (53) (53) 14 14 344 344 360 2020 $m 212 2020 (after tax) $m (after tax) (485) 14 2019 $m 344 2019 (after tax) $m (after tax) 383 RCOP NPAT ($m) 180 175 165 256 135 209 120 92 265 341 262 287 296 263 294 344 2013 2014 2015 2016 2017 2018 2019 2020 1H RCOP NPAT 2H RCOP NPAT Dividend The Board has declared a final fully franked dividend of 23 cents per share for the second half of 2020, in line with the Dividend Policy pay-out ratio of 50% to 70% of RCOP NPAT excluding Significant Items. Combined with the interim dividend of 25 cents per share for the first half, this equates to a total dividend of 48 cents per share for 2020 (fully franked). This compares with a total dividend payout of 83 cents per share for 2019 (fully franked). The record and payment dates for the final dividend are referenced 93. on page 73. Dividend The Board has declared a final fully franked dividend of 23 cents per share for the second half of 2020, in line with the Dividend Dividend Policy pay-out ratio of 50% to 70% of RCOP NPAT excluding Significant Items. Combined with the interim dividend of 25 cents per The Board has declared a final fully franked dividend of 23 cents per share for the second half of 2020, in line with the Dividend share for the first half, this equates to a total dividend of 48 cents per share for 2020 (fully franked). This compares with a total Policy pay-out ratio of 50% to 70% of RCOP NPAT excluding Significant Items. Combined with the interim dividend of 25 cents per (i) Replacement cost of sales operating profit (RCOP) excluding significant items (on a pre- and post-tax basis) is a non-International Financial Reporting dividend payout of 83 cents per share for 2019 (fully franked). The record and payment dates for the final dividend are referenced share for the first half, this equates to a total dividend of 48 cents per share for 2020 (fully franked). This compares with a total Standards (IFRS) measure. It is derived from the statutory profit adjusted for inventory (gains)/losses, as management believes this presents a clearer on page 73. dividend payout of 83 cents per share for 2019 (fully franked). The record and payment dates for the final dividend are referenced picture of the Company’s underlying business performance as it is consistent with the basis of reporting commonly used within the global oil industry. This on page 73. is unaudited. RCOP excludes the unintended impact of the fall or rise in oil and product prices (key external factors). It is calculated by restating the cost of sales using the replacement cost of goods sold rather than the historical cost, including the effect of contract-based revenue lags. (i) Replacement cost of sales operating profit (RCOP) excluding significant items (on a pre- and post-tax basis) is a non-International Financial Reporting Standards (IFRS) measure. It is derived from the statutory profit adjusted for inventory (gains)/losses, as management believes this presents a clearer (i) Replacement cost of sales operating profit (RCOP) excluding significant items (on a pre- and post-tax basis) is a non-International Financial Reporting picture of the Company’s underlying business performance as it is consistent with the basis of reporting commonly used within the global oil industry. This Standards (IFRS) measure. It is derived from the statutory profit adjusted for inventory (gains)/losses, as management believes this presents a clearer is unaudited. RCOP excludes the unintended impact of the fall or rise in oil and product prices (key external factors). It is calculated by restating the cost of picture of the Company’s underlying business performance as it is consistent with the basis of reporting commonly used within the global oil industry. This sales using the replacement cost of goods sold rather than the historical cost, including the effect of contract-based revenue lags. is unaudited. RCOP excludes the unintended impact of the fall or rise in oil and product prices (key external factors). It is calculated by restating the cost of sales using the replacement cost of goods sold rather than the historical cost, including the effect of contract-based revenue lags. 32 Directors’ Report (continued)Ampol Limited Directors’ Report continued Directors’ Report Directors’ Report CONTINUED CONTINUED 13 Operating and financial review continued COVID-19 The full year ending 31 December 2020 has been marked by the impact of the Coronavirus (COVID-19) pandemic. Ampol’s priority during this time has been to take necessary action to safeguard the health of our people and customers, ensure business continuity, optimise cashflow and ensure we are well placed to capture opportunities when market conditions improve. In response to the unfolding COVID-19 crisis and the broader dynamics in the global fuel oil markets, Ampol has taken a number of initiatives that together will protect the business and assist in navigating this challenging period, while ensuring both the wellbeing of our people and the safe and reliable supply of high-quality transport fuels to our customers. The Group has taken early and decisive action to mitigate the impacts of COVID-19 including: (i) bringing forward and extending the Lytton refinery Turnaround and Inspection (T&I) in order to execute it safely; (ii) optimising retail and aviation fuel cost base; (iii) reducing corporate overheads; and (iv) deferring non-critical capital spend. These steps have enabled Ampol to continue to execute the strategy in a disciplined manner and continue to focus on improving cost and capital efficiency to deliver value for shareholders. COVID-19 has had an adverse impact on the operating environment and financial performance for the Group for the year ending 31 December 2020 including:  Unprecedented challenges for the global hydrocarbon industry, as various government restrictions significantly impacted product demand, and in turn external refiner margins.   Total Australian fuels sales volumes were 13.6 BL in 2020, 17% lower than the 16.3 BL in 2019, reflecting adverse weather impacts at the start of the year and the significant impact of government restrictions implemented in response to the COVID-19 pandemic. Jet fuel, which made up 19% of Australian wholesale volumes in 2019, continues to be the most impacted product. The significant inventory loss of $360 million after tax which contributed materially to the Historic Cost Operating Profit (HCOP) loss of $485 million. During the COVID-19 pandemic there was high volatility of oil prices and exchange rates with Dated Brent hitting a low of US$18.55/bbl whole month average in April 2020 that contributed to the material inventory loss recorded in 2020.  Global hydrocarbon demand weakness due to government travel restrictions arising from the COVID-19 pandemic, including the impact on regional refiner margins and global trade balances, has impacted the profitability of Lytton Refinery. With refiner margins at historic low levels and hydrocarbon demand weakness globally and in Australia, the Group has assessed the recoverable amount of its Lytton Refinery cash-generating unit which determined the carrying value of the refinery as at 30 June 2020 was $80 million in excess of its recoverable amount. This was reassessed at 31 December 2020 with no further impairment.  The impact of demand reduction due to the uncertainty introduced by COVID-19 indicated that the assets at the Convenience Retail site cash-generating unit level may be impaired and caused the Group to assess the recoverability of the carrying value of the Convenience Retail site assets which were determined to be in excess of their recoverable amount as at 30 June 2020 by $233 million and a further $59 million at 31 December 2020.  Other significant items caused by COVID-19 include: (i) The divestment of marginal depots and retail sites resulting in asset impairment of $23 million and site remediation provision of $32 million; (ii) Other specific asset impairment due to review of company priorities across projects and future investment was undertaken to ensure a clearer focus on the organisational priorities post the COVID-19 impact resulted in ceasing IT projects; (iii) Increase in provision for doubtful debts as a result of the expected impact on Ampol customers from COVID-19 of $3.7 million; (iv) The above expenses have been partially offset by other revenue received from government assistance for wage support of $6.8 million. Whilst COVID-19 has adversely impacted 2020, Ampol’s liquidity position and balance sheet remain strong. The Group has maintained substantial committed undrawn debt capacity with a diverse group of high-quality financial institutions, on appropriate terms with a prudent weighted average maturity of 3.6 years. Significant headroom remains to key financial covenants under all the Group’s borrowing arrangements. The Group has taken a conservative approach to further bolster its funding arrangements. During the first half of 2020, the Group extended the tenor on $500 million (AUD equivalent) of its existing bank facilities and upsized its bank facilities by $385 million. On 20 November 2020, Ampol completed an agreement with a Charter Hall and GIC consortium that acquired a 49% interest in 203 freehold convenience retail sites, which delivered net proceeds of $655 million. On 9 December 2020, Ampol successfully issued $500 million of subordinated notes (or hybrid). These notes will diversify Ampol’s funding sources and support its credit profile in line with its Capital Allocation Framework. The total available funds at 31 December 2020 was $2,940 million (31 December 2019: $2,649 million), with $2,140 million in undrawn committed bank debt facilities. 33 Annual Report 2020 14 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Operating and financial review continued Income statement For the year ended 31 December 1. Total revenue(i) Share of net profit of entities accounted for using the equity method 2. Total expenses(ii) Replacement cost earnings before interest and tax Finance income Finance expenses 3. Net finance costs Income tax expense(iii) Non-controlling interest Replacement cost of sales operating profit (RCOP) 4. Significant items gain/(loss) after tax 5. Inventory loss after tax Historical cost net (loss)/profit after tax Interim dividend per share Final dividend per share Earnings per share (cents) Historical cost basis including significant items – Basic Historical cost basis including significant items – Diluted Replacement cost basis excluding significant items – Basic Discussion and analysis – Income statement 2020 $m 2019 $m 15,434 22,352 11 4 (15,044) (21,749) 401 1 (110) (109) (75) (5) 212 (337) (360) (485) 25c 23c (194.2) (194.2) 84.8 607 1 (121) (120) (142) (1) 344 53 (14) 383 32c 51c 151.3 151.1 135.9 1. Total revenue ▼ 31% 2. Total expenses – replacement cost basis ▼ 31% Total revenue decreased due to a 17% decline in Australian sales volumes resulting from reduced demand as a result of the COVID-19 pandemic. Australian Dollar product prices are also on average 34% lower than 2019. Lower product prices in 2020 were driven by lower weighted average Dated Brent crude oil price (2020: US$42/bbl vs 2019: US$64/bbl). Revenue includes assistance from governments for wage support of $6.8 million received from Australia, New Zealand and Singapore government programs. Total expenses also decreased primarily as a result of lower replacement cost of goods sold, driven by the same components noted above for fuel revenue. (i) Includes other income of $28 million (2019: $45 million). (ii) Excludes significant item loss of $337 million (2019: $53 million gain). (iii) Excludes tax receivable/benefit on inventory loss of $154 million and tax receivable/benefit on significant items of $167 million. (2019: tax receivable/benefit on inventory loss of $6 million). 34 Directors’ Report (continued)Ampol Limited   15 Directors’ Report continued Operating and financial review continued Income statement continued Discussion and analysis – Income statement RCOP EBIT breakdown(i) Fuels and Infrastructure EBIT Fuels and Infrastructure EBIT consists of the segment’s earnings on fuel products through the Lytton refinery, other Australian earnings (including earnings on sales to the Convenience Retail segment) and International earnings. F&I delivered EBIT of $154 million in 2020, which was below the $450 million EBIT in 2019, largely due to lower earnings from Lytton and loss of scale in F&I Australia from COVID-19 related demand destruction. F&I EBIT (excluding Lytton) was $299 million, which is a decrease of $81 million compared to 2019. The result was impacted by the significant decline in Australian fuel volumes and associated efficiencies, and effects from managing rapidly changing supply chains. Earnings in the period were supported by increased imports during the extended Lytton Turnaround & Inspection (T&I), continued growth in International RCOP EBIT, strong cost discipline and $30 million of foreign exchange gains. Lytton delivered an EBIT loss of $145 million, which was down $215 million compared to 2019. The reduction in Lytton EBIT was reflective of the extremely weak external refiner margin environment, impacted by sustained weakness in global hydrocarbon demand from COVID-19. Action was taken to mitigate impacts by bringing forward and extending the refinery T&I, and a renewed focus on costs and efficiency. Convenience Retail EBIT Convenience Retail EBIT consists of earnings on fuel products and shop products at Ampol convenience stores. Convenience Retail delivered an EBIT result of $287 million, which is up 43% compared to 2019. Retail fuel earnings were supported by margin benefits from oil price timing lags and rational industry behaviour, offsetting volume weakness. The result also reflects continued improvement in shop performance. Corporate EBIT Corporate operating expenses decreased by $3 million compared to 2019. RCOP EBIT excluding significant items $154m $287m ($41m) $401m (i) The breakdown of RCOP shown here represents a management reporting view of the breakdown and, therefore, individual components may not reconcile to statutory accounts. 35 Annual Report 2020   16 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Operating and financial review continued Income statement continued Discussion and analysis – Income statement 3. Net finance costs ▼ 9% Net finance costs decreased by $11 million compared with 2019. The decreased interest cost is due to lower average daily borrowings combined with lower interest rates in 2020. 4. Significant items The significant item loss of $337 million after tax or $504 million before tax relates to: Impairment of Non-Current Assets The Group has recognised a total impairment loss of $413 million on non-current assets. These impairments relate to Lytton Refinery cash-generating unit of $80 million at 30 June 2020, Convenience Retail site cash-generating units of $233 million at 30 June 2020 and $59 million at 31 December 2020 and other specific assets of $42 million. Ampol Rebranding Expense Ampol has recognised an expense of $66 million in respect to rebranding due to its contractual obligation to remove Caltex signage and install Ampol branding of sites owned by a third party ($46 million), accelerated depreciation ($11 million) and other operating expenses ($9 million). Higher Better Use Sites In 2019, the Group recognised a net gain of $53 million on sale from the divestment of the 25 Higher and Better Use (HBU) sites after environmental remediation. The environmental remediation activity commenced in 2020 and a reassessment of the remediation provision was undertaken as at 31 December 2020. This resulted in recognition of an additional provision of $17 million. Gain on sale of investment in joint operation On 1 October 2020, the Group sold its investment in the Sydney Joint User Hydrant Installations (JUHI) of a gain on sale of $21 million. Other Expenses Site Remediation Provisions The divestment of Convenience Retail and Depot sites resulted in an environmental remediation provision of $32 million recognised in respect of the cost of remediating these sites for alternative use. Provision for Doubtful Debts The provision for doubtful debt has increased by $4 million as a result of the expected impact on Ampol customers from COVID-19. Other income Other income includes assistance from governments for wage support of $6.8 million received from Australia, New Zealand and Singapore government programs. Significant items tax benefit Significant items tax benefit of $151 million represents tax at the Australian corporate tax rate of 30% on Significant items before tax and utilisation of previously unrecognised capital losses (tax benefit of $16 million) which has been applied to a capital gain on the sale of the 49% interest in 203 freehold convenience retail sites with Charter Hall and GIC consortium. There was an inventory loss of $360 million after tax or $514 million before tax in 2020. Over time revenues will increase/decrease as the price of products changes, this includes impacts from the AUD/USD exchange rate movements. As Ampol holds crude and product inventory, the price at which the inventory was purchased will often vary from the price at the time of the revenue, thereby creating an inventory gain or loss. During the COVID-19 pandemic there was particularly high volatility of prices and exchange rates, which have resulted in the loss. after tax $337m 5. Inventory loss after tax $360m 36 Directors’ Report (continued)Ampol Limited Directors’ Report continued Directors’ Report continued 17 Operating and financial review continued Income statement continued Business unit performance - Fuels and Infrastructure Fuels and Infrastructure delivered an EBIT result of $154 million, including $299 million from F&I excluding Lytton and $145 million loss from Lytton. Total Australian fuels sales volumes were 13.6 BL in 2020, 17% lower than the 16.3 BL in 2019, reflecting adverse weather impacts at the start of the year and demand destruction, including the significant impact of government restrictions implemented in response to the COVID-19 pandemic. International volumes of 6.5 BL in 2020, were 36% higher than 4.8 BL in 2019, underpinned by continued growth of international businesses. Business unit performance - Convenience Retail Convenience Retail delivered RCOP EBIT of $287 million in 2020, compared to $201 million RCOP EBIT in 2019. Total Convenience Retail fuels sales volumes were 4.1 BL in 2020, 14% lower than the 4.8 BL fuels sales volumes in 2019, due to the impacts on industry demand from bushfires and floods in 1Q 2020, followed by COVID-19 restrictions since late March 2020. Balance sheet As at 31 December 1. Working capital 2. Property, plant and equipment 3. Intangibles 4. Interest-bearing liabilities net of cash 5. Other non-current assets and liabilities Total equity Discussion and analysis – Balance sheet 2020 $m 421 3,468 558 2019 $m 632 3,702 579 (1,348) (1,746) 127 3,225 110 3,271 Change $m ▼211 ▼234 ▼21 ▼398 ▲17 ▼46 1. Working capital ▼ $211m 2. Property, plant and equipment ▼ $234m 3. 4. Intangibles ▼ $21m Interest-bearing liabilities ▼$398m 5. Other non-current assets and liabilities ▲$17m The decrease in working capital was primarily driven by lower product and crude price impacting receivables, inventory and payables. The decrease in property, plant and equipment (PP&E) is driven by Convenience Retail ($292 million), Lytton ($80 million) and other asset impairments ($42 million) and depreciation of $394 million. This is partially offset by 2020 capital expenditure and accruals (including major cyclical maintenance) of $205 million, site dismantling and remediation asset of $241 million and additions of lease right of use assets of $147 million. Intangibles decreased primarily due to amortisation of $28 million and software impairment loss of $20 million. This is partially offset by additions of $39 million. Interest-bearing liabilities relates to net borrowings of $434 million and lease liabilities $914 million as at 31 December 2020. The decrease in interest-bearing liabilities was primarily due to the completion of the core freehold retail property transaction with net proceeds of $655m. Ampol’s gearing at 31 December 2020 was 12%, decreasing from 21% at 31 December 2019. On a lease-adjusted basis, gearing at 31 31 December 2019. December 2020 was 29%, compared with 35% at Other non-current assets and liabilities increased primarily due to the increase in deferred tax assets offset by the increase in non-current site remediation and dismantling provision. 37 Annual Report 2020 18 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Operating and financial review continued Cash flows For year ended 31 December 1. Net operating cash inflow 2. Net investing cash inflows/(outflows) 3. Net financing cash outflows Net increase/(decrease) in cash held(i) (i) Including effect of exchange rates on cash and cash equivalents. Discussion and analysis – Cash flows 2020 $m 268 463 (392) 333 2019 $m 844 (139) (679) (29) Change $m ▼576 ▲602 ▲287 ▲362 1. Net operating cash inflows ▼$576m 2. Net investing cash inflows ▲ $602m 3. Net financing cash outflows ▲ $287m Net operating cash inflows were lower in 2020 driven by COVID-19 induced hydrocarbon demand impacts, as well as the cash component of inventory loss resulting from a decline in crude and product prices coinciding with a decline in customer demand.  Investing cash flows represent the cash components (i.e. excluding any accruals) for capex, Lytton T&I, and purchases of intangibles. 2020 includes the once-off benefit from the net proceeds from the sale of 49% interest in 203 freehold convenience retail sites and the gain on sale of the investment in joint operations. 2019 includes the once-off benefit from the gain on sale for HBU Tranche 1 sites. Financing cashflows in 2020 include repayment from borrowing of $93m, the Dividend payment of $190m and repayment of lease principal $108m. The 2019 result included impact of the $260m share buy-back. Capital Expenditure Capital expenditure totalled $227 million including major T&I spending at Lytton refinery of $64 million and $22 million in intangible software. Business outlook and prospects for future financial years This section includes information on Ampol’s future financial prospects. Given the significant influence of external factors – such as market competitiveness, economic conditions, including ongoing impacts from COVID-19, exchange rates and regional refiner margins – the discussion of our financial prospects is general in nature. To the extent that there are statements which contain forward-looking elements, they are based on Ampol’s current expectations, estimates and projections. Such statements are not statements of fact, and there can be no certainty about outcomes in the areas that these statements relate to. Ampol does not make any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment of any forward-looking statements. Overview We will continue to execute our business strategy in 2021 with a core focus on creating value for shareholders. We have a clear list of priorities which focus on delivering improved returns across the integrated business, with a focus on improved cost and capital efficiency. With the completion of our original $100 million cost out program, in 2021 we will begin work on a further $40 million of structural savings to be delivered by 2022. We will also continue to focus on delivering our targeted $195 million EBIT uplift by 2024, progressing key initiatives in our Fuels and Infrastructure International strategy and in Convenience Retail. Our rebrand to Ampol will be a key focus, with our national rollout to reach scale by the end of the year. Investment in our iconic Australian brand will allow us to enhance our market-leading position in retail fuel and provides a strong platform to execute on the attractive and growing convenience market opportunity. Ampol also remains committed to releasing our substantial franking credit balance to shareholders, in accordance with our capital allocation framework and subject to business performance. Our announced $300 million Off-market Buy-back has been completed in January 2021 which derived a $119 million release of franking credits. 38 Directors’ Report (continued)Ampol Limited Directors’ Report continued Directors’ Report continued 19 Operating and financial review continued Business outlook and prospects for future financial years continued Fuels and Infrastructure In 2021, we will protect returns in Fuels and Infrastructure Australia by completing the review of our Lytton refinery in the first half of the year, to determine the best path forward to maximise value for shareholders. More broadly across the non-refining Australian business, we will take a disciplined approach to capital effectiveness and cost efficiency, while also selectively pursuing investments that can deliver strong returns. Influencing our performance in 2021 will be global economic conditions, including recovery in demand for hydrocarbons in the markets in which we operate following the social and economic impacts of COVID-19. The performance of our Lytton refining business will continue to be influenced by external factors, including foreign exchange rates and regional refiner margins, along with domestic market conditions such as demand for Ampol refined products and input costs. Earnings growth in Fuels and Infrastructure will be targeted through the continued delivery of our International strategy, with our plan to deliver $70 million EBIT growth in this part of our business by 2024. In 2021, we will focus on executing the organic growth initiatives that underpin this target, leveraging the scale and capabilities we possess across the broader business and the strong progress we have made over the last few years. Our ambitions in our International business are built off our key strengths of strategic assets, supply chain expertise and deep customer relationships. Finally, in 2021 we will also continue to build foundations for energy transition by working with our customers, focusing on a targeted set of energy and decarbonisation themes, each of which has clear linkages to our capabilities and assets. As part of this work we will announce our decarbonisation strategy along with our TCFD report during the first half of 2021. Convenience Retail Ampol’s company-operated retail network provides an important foundation to deliver value to shareholders through extracting share from both the $31 billion retail fuel market and the growing $8.8 billion convenience market in Australia. In 2021, as we transition to Ampol, we are confident our fuels position will be strengthened by the network refurbishment and the introduction of our Amplify premium fuels, which are formulated leveraging our strong premium fuels pedigree. Amplify premium fuels are specifically designed for Australian driving conditions and engineered to clean and protect engines. Our retail fuel strategy will focus on leveraging our high-quality network, premium fuels and leading card offer, to continue to generate strong earnings, through the targeted combination of value and volume. Our strong earnings base from retail fuel provides the platform to generate further earnings growth through our retail shop offer. We remain well positioned to deliver on our potential $85 million non-fuel EBIT uplift in Convenience Retail by 2024. COVID-19 has driven changes in customer behaviour with people spending more time in their local community, preferencing smaller format stores like ours and taking advantage of the convenience that our well-located network of stores offer. This experience has served to strengthen our conviction in our strategy. In 2021, we will further build on the strategy in place by enhancing our merchandise offer and increasing the efficiency of store operations, while continuing to execute our network rebrand. We will also continue to focus on deploying the right formats in the right location to meet customer needs and generate strong returns. 39 Annual Report 2020 20 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Risk management There are a number of material risks that have the potential to impact on Ampol achieving its financial goals and business strategy. The Ampol Risk Management Framework (ARMF) has been developed to proactively and systematically identify, assess and address events that could impact business objectives. The ARMF integrates the consideration of risk into the Company’s activities so that:   risks in relation to the effective delivery of the Company’s business strategy are identified; control measures are evaluated; and  where potential improvements in controls are identified, improvement plans are scheduled and implemented. The Board reviews the ARMF with management on an annual basis to ensure that it remains sound. Risks identified through the ARMF are also assessed on a regular basis by management, and material risks are regularly reported to the Board and its committees. These reports include performance against the Board-approved risk appetite and the status and effectiveness of control measures for each material risk. The Board, the Audit Committee, the Safety and Sustainability Committee and the Human Resources Committee each receive reports on material risks relevant to their responsibilities. Following is a table outlining our material risks, along with a description of each risk and an outline of the mitigation strategies that are in place. In this table, we have not included information that could result in unreasonable prejudice to Ampol, including information that is confidential, commercially sensitive or that could give a third party a commercial advantage. Ampol’s approach to risk management is also outlined in our Corporate Governance Statement, which is available on our website. Material risk Description Monitor and manage Strategic and commercial risks 1. Customer and competitors 2. Business transformation The transport fuels and Convenience Retail landscapes are continually evolving. Ampol needs to be able to transform along with this landscape to seize opportunities and ensure the ongoing viability and success of the business. Changes in customer demand, technology and products have the potential to materially impact Ampol’s earnings. Ampol must respond and adapt to these changes by optimising current earnings streams and creating new earnings streams in both domestic and international markets in order to support the growth of Ampol and deliver value to customers, the community and shareholders. 3. Climate change Risks associated with the transition to a low carbon economy have the potential to impact Ampol’s socio-political and regulatory environment, earnings and growth opportunities, and brand and reputation. Ampol must balance the needs of the current economy, our customers and shareholders, while demonstrating active integration of climate associated risk into strategic and financial planning processes to inform its investment decisions. In parallel, Ampol actively assesses and models the physical impact of climate change on the business and manages the energy intensity of our operations to limit carbon emissions. For Ampol’s TCFD disclosures, please refer to Ampol’s 2020 Sustainability Report. Ampol’s strategic decision-making framework ensures that strategies are in place to manage competitive risks that sustain and improve value accretion. These strategies include:  enhancing the core business through relentless focus on cost efficiency, capital effectiveness and customer delivery;   delivering earnings growth in International and Convenience Retail; and building foundations for the energy transition, leveraging the strength of our assets, customer positions and capabilities. The Board oversees Ampol’s sustainability approach, with the Board’s Safety and Sustainability Committee assisting with governance and monitoring as reflected in the Committee’s Charter. Ampol focuses on building resilience to the transitional and physical risks posed by climate change, including undertaking scenario analysis, helping our customers respond to climate change, reducing the carbon intensity of our operations, undertaking external engagement and advocacy, and improving transparency and reporting. Ampol supports the recommendations of the Task Force on Climate-related Financial Disclosures and has developed an implementation plan to ensure full alignment by 2021. 40 Directors’ Report (continued)Ampol Limited 21 Directors’ Report continued Risk management continued 4. Cyber and information security As a leading transport fuels provider and convenience retailer, Ampol faces an ever-evolving cyber security threat. Ampol must be able to detect, prevent and respond to these threats by maintaining a high standard of information and cyber security controls. Ampol’s information technology (IT) and systems are subject to regular review and maintenance, and business continuity plans are in place. Ampol actively monitors and responds to potential local and global IT security threats. 5. Organisational capability Successful execution of Ampol’s strategy and business objectives is driven by the capability and talent of our people. A lack of organisational capability can negatively impact Ampol’s ability to maximise returns. Ampol aims to be an employer of choice. It has in place and actively manages retention and attraction of critical capabilities, its employee agreements, and it monitors employee engagement and the external labour markets. Operational risks 6. Process safety 7. Personal safety, health and wellbeing 8. Environmental The manufacturing and transportation of transport fuels and the operation of Ampol’s retail network gives rise to an inherent risk to the health and safety of our employees, contractors, the public and the environment in which we operate. Ampol invests the necessary capital and resources to reduce these risks so far as is reasonably practicable. 9. Product quality – fuels and lubricants 10. Product quality – food 11. Business interruption An inability to produce and supply high quality, fit for purpose fuel and lubricant products that meet our customers’ needs, conform to specifications and satisfy our contractual and regulatory requirements, has the potential to put our customers at risk. In turn, this may damage Ampol’s brand, reputation and impact earnings. Similarly, in the convenience retail environment, Ampol aims to produce and supply quality, fit for purpose food products that meet customer needs, conform to specifications, and satisfy our contractual and regulatory requirements. Business interruption may arise from several circumstances, including:  operational difficulties throughout the supply chain, such as extended industrial disputes or manufacturing interruptions;     loss of externally-supplied utilities; pandemics; security breaches affecting operational systems; and natural disasters, such as bushfires and floods. Any of these events could result in a significant interruption to operations leading to commercial loss.  To manage these risks, Ampol has in place:  an integrated management system for managing safety, health and environment; and a comprehensive risk management framework which actively manages and mitigates these risks from the corporate level through to the local site operating level and involves active engagement from senior management. Ampol also mitigates certain major risk exposures through its comprehensive corporate insurance program, which provides cover for damage to facilities and associated business interruption as well as product liability. Ampol has designed and implemented robust quality control measures throughout the supply chain to ensure both fuel and food products are safe and to protect our brand and reputation. A governance structure is in place to monitor and report on the status of these risks and the effectiveness of their control measures to the Board’s Safety and Sustainability Committee. Almost all operational risks are potential sources of business interruption. Ampol manages these risks through the framework and governance structures described in this report, including those focused on security and resilience. It also mitigates certain major risk exposures through its comprehensive corporate insurance program, which provides cover for damage to facilities and associated business interruption as well as product liability. 41 Annual Report 2020 22 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Directors’ Report continued Risk management continued Financial risks 12. Capital management and allocation An inability to successfully manage and allocate capital erodes Ampol’s profitability, cash flows, growth aspirations, investor confidence, licence to operate and relationships with key stakeholders. 13. Liquidity Inadequate access to liquidity may limit Ampol’s ability to raise funds to meet the forecast requirements of the business, for planned expenditure or to seize emerging opportunities. A weak balance sheet also limits Ampol’s ability to withstand material levels of liquidity-related stress from other material risk events and/or a major economic downturn. 14. Financial markets Commodity prices, refiner margin (RM) and other associated markets driven by supply and demand for Ampol’s products may vary outside of expectations from time to time. Foreign exchange rate variations can offset or exacerbate this risk. Compliance and conduct risks 15. Regulatory and compliance 16. Fraud or ethical misconduct Ampol is exposed to a wide range of economic and regulatory environments since its operations are located across several jurisdictions. Ampol’s brand, reputation and licence to operate can be negatively impacted through actual or perceived breaches of law, and/or behaviours and actions that are inconsistent with the Company’s values or breach its Code of Conduct. 42 Ampol governs capital allocation in accordance with a well-defined capital allocation framework that is underpinned by operational and capital efficiency and ensures a strong return on capital employed (ROCE) across all parts of the portfolio. An Investment Committee supports this framework, which is comprises senior leaders with the necessary governance and processes to successfully prioritise and execute its capital investments and manage capital allocation. Ampol seeks to prudently manage liquidity risk by maintaining a capital structure that is consistent with its capital allocation framework, supports its activities and centrally monitors cash flow forecasts, including the degree of access to debt and equity markets. A key element of its funding strategy is the use of committed undrawn debt facilities, with an extended facility maturity profile. Ampol balances its exposure to financial market risk in accordance with the Board approved Group Treasury Policy. The policy sets a range of quantitative and volumetric limits to reduce the inherent risk to levels within the desired risk appetite threshold. Ampol regularly monitors financial market exposures and reports this as part of its updates to senior management and the Board. Ampol applies strict operating standards, policies, procedures and training to ensure that it remains in compliance with its various permits, licences, approvals and authorities. In addition, Ampol proactively manages regulatory risks through a combination of vigilance regarding current regulations, contact with relevant bodies/ agencies and working in partnership with various stakeholders to reduce the likelihood of significant incidents that could impact Ampol and/ or the communities in which it operates. Ampol engages with regulatory bodies and industry associations to keep abreast of changes to laws. It has a stakeholder engagement plan that is actively managed to mitigate the impact of major policy changes. Directors’ Report (continued)Ampol Limited Directors’ Report continued Events subsequent to the end of the year On 22 January 2021 the Group completed an off market buy back of 11,404,848 shares at a price of $26.34 per share which included a capital component of $2.01 per share. The total amount of the buy back was $300.4 million and the impact of this transaction on the issued share capital of the Company was to reduce it by $22.9 million with the remainder from retained earnings. The number of issued shares post the buy back is 238.3 million. On 22 February 2021, the Directors declared a fully franked final dividend of 23 cents per share. At the date of issue of this report, the future impact of COVID-19 on global and domestic economies and the impact on the Group remains uncertain. The Group continues to actively monitor this situation. There were no other items, transactions or events of a material or unusual nature that are likely to significantly affect the operations of Ampol, the results of those operations or the state of affairs of the Group subsequent to 31 December 2020. Environmental regulations Ampol is committed to complying with the relevant laws, regulations and standards of the jurisdictions in which we operate, as well as to minimising the impact of our operations on the environment. The Board’s Safety and Sustainability Committee addresses the appropriateness of Ampol’s OHS and environmental practices to manage material health, safety and environmental risks, so that these risks are managed in the best interest of Ampol and its stakeholders. Ampol sets key performance indicators to measure environmental, health and safety performance and drive improvements against targets. In addition to review by the Board, progress against these performance measures is monitored regularly by the Managing Director and CEO and executive general managers. Risks are examined and communicated through the Ampol Risk Management Framework, which includes environmental risks. Under the framework, risks and controls are assessed and improvements are identified, with regular reports being made to management and the Board. The Ampol Operational Excellence Management System is designed to ensure as reasonably practicable that operations are carried out in an environmentally sound, safe, secure, reliable and efficient manner. Its operating standards and procedures support the Ampol Environment Policy and the Ampol Health and Safety Policy. Ampol meets reporting requirements under the National Greenhouse and Energy Reporting Scheme, reporting energy consumption and production as well as greenhouse gas emissions from Group operations. Ampol also continues to disclose information on emissions under the National Pollutant Inventory. Ampol continues to remain a signatory to the Australian Packaging Covenant. 23 Compliance with environmental regulations For the year ended 31 December 2020, regulators were notified of a total of six environmental reportable non-compliances. Of these, one incident resulted in environmental impacts of greater than 12 months duration. For the period, the group received nine formal notices from the regulator. Remediation action has been taken in relation to the incidents and notices. The business received no fines during the period. All incidents were investigated and lessons captured and shared across the Group. Lead auditor’s independence declaration The lead auditor’s independence declaration is set out on page 50 and forms part of the Directors’ Report for the financial year ended 31 December 2020. 70 43 Annual Report 2020 24 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report Message from the Human Resources Committee Dear Shareholder, I am pleased to present Ampol’s Remuneration Report for the year ended 31 December 2020. The Remuneration Report provides information about the executive remuneration framework and remuneration outcomes for Key Management Personnel (KMP). KMP comprises:  Non-Executive Directors (NED); and  the Managing Director and Chief Executive Officer (MD & CEO) and select direct reports to the MD & CEO (collectively, Senior Executives). 2020 was a year that presented many challenges for Ampol. Despite the impacts of bushfires on the east coast of Australia, followed by the onset of COVID-19, our people’s agility and discipline ensured that we delivered for our customers while enhancing our position as a positive contributor in the local communities in which we operate. I am proud of how our people responded, living our values and demonstrating the Ampol ‘can do’ spirit that underpins our market- leading reputation. This was evident in our safety performance which saw some of the best results in Ampol’s history. Targeted improvement plans led to material reductions in the frequency of recordable injuries across both Convenience Retail and Fuels and Infrastructure (F&I). Our process safety result was also the best that Ampol has ever recorded. Company performance in 2020 Ampol delivered resilient performance in 2020. Strong action was taken throughout the year to control costs and optimise operations across our integrated supply chain to protect our balance sheet and maximise value for shareholders, during a time of sustained weakness in refining margins and the destruction in fuel demand, particularly in aviation. As a result of these impacts, our refinery and aviation business experienced large declines in turnover. During this time, Ampol welcomed the support of the Government’s JobKeeper scheme which provided necessary assistance to both the refining and aviation businesses. JobKeeper payments were not claimed across the remainder (being the majority) of Ampol’s business. Despite the significant impacts to both aviation and refining, performance across our broader F&I business was resilient when considering the challenges of declining volumes, reduced scale efficiencies and changing global supply chains. In particular, our International business performed strongly. Convenience Retail results were also strong, reflecting effective management of operating costs, improved shop performance and favourable industry retail fuel margins, which offset volume weakness. Throughout 2020, we also delivered key capital initiatives for shareholders, including executing the Convenience Retail property transaction, delivering a hybrid bond issuance and announcing an Off-market Buy-back that will benefit all shareholders. Ampol also commenced its rebrand, which presents a unique opportunity to deepen customer relationships and increase our market share.  2020 remuneration outcomes The following are the key remuneration decisions and outcomes from FY2020. They demonstrate the strong alignment between company performance and our executive remuneration framework:     The transition of the MD & CEO early in the year resulted in several changes to Senior Executive portfolios and, as a result, three Senior Executives received temporary increases to their fixed remuneration through this transitionary period; There were no changes to NED fees;  All KMP had their fixed remuneration and fees reduced by 20% for three months, as part of cost reduction activities adopted in response to COVID-19;  For the second consecutive period, no short-term incentives (STIs) were paid to Senior Executives, as RCOP NPAT did not meet threshold performance requirements; and  Approximately 7% of the 2018 long-term incentive plan (LTIP) grant vested, following performance testing over the three-year period to 31 December 2020. As reported in the 2019 Remuneration Report, retention awards were granted to Senior Executives in March 2020, which vest in March 2021. These awards were one-off, made in the context of heightened retention risk through a protracted take-over bid and to support the MD & CEO transition. The retention awards are conditional on continued service, successful performance and appropriate conduct. 44 Directors’ Report (continued)Ampol Limited Directors’ Report continued 25 Remuneration Report continued Message from the Human Resources Committee continued Changes to Key Management Personnel 2020 saw the successful transition of Ampol’s MD & CEO and several Senior Executives, with the Company’s internal succession plans activated and key external appointments made. The key changes made to KMP in FY2020 were:  Matthew Halliday was permanently appointed as MD & CEO, having acted as Interim CEO;  Brent Merrick was promoted to Executive General Manager, Commercial, having most recently served as General Manager, Trading and Shipping for five years;  Joanne Taylor was promoted into an expanded role covering people and brand, in addition to her existing retail portfolio;  Andrew Brewer was appointed Executive General Manager, Infrastructure, returning to Ampol from Refining NZ; and  Michael Ihlein and Gary Smith were appointed to the Ampol Board as Independent Non-Executive Directors. Changes to the executive remuneration structure for 2021 In 2020, the Board conducted a comprehensive review of the executive remuneration framework, to identify opportunities to further drive our strategic priorities, strengthen our ability to attract and retain executive talent, and improve alignment with the interests of shareholders. Key changes for 2021 include:  Updated STI gate-opener and reduced maximum STI opportunity, to appropriately incentivise MD & CEO and Senior Executive behaviours;  Introduction of STI deferral delivered in equity and a new minimum shareholding requirement, to enhance Senior Executive and shareholder alignment;  Revised long-term incentive (LTI) program to support long-term share ownership, through a simplified one-year holding requirement for 100% of vested shares at the end of the three-year performance period, and an adjusted vesting schedule for the relative total shareholder return (TSR) performance measure to align with market practice; and  Enhanced malus and clawback requirements across the framework to strengthen risk and remuneration consequences. Overall, the redesigned executive remuneration framework reduces the maximum incentive opportunity, and increases the weighting on equity in the mix of total remuneration. The Board is confident that the changes to the executive remuneration framework will deliver improved value to shareholders at a lower cost, while continuing to ensure focus on delivery of our strategic priorities. Additional information on the changes are provided in Table 1d. of this report. On behalf of the Board, I thank you for your continued interest in Ampol. We trust that this overview, and the accompanying detail in the Remuneration Report are helpful when forming your views on Ampol’s Senior Executive and NED remuneration arrangements. Kind regards, Barbara Ward AM Chairman, Human Resources Committee 45 Annual Report 2020 26 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued The Directors of Ampol Limited present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act) for the Ampol Group for the year ended 31 December 2020. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act, apart from where it is indicated that the information is unaudited. 1. Remuneration snapshot 1a. Key Management Personnel This Remuneration Report is focused on the KMP of Ampol, being those persons with authority and responsibility for planning, directing and controlling the activities of Ampol. Unless otherwise indicated, the KMP were classified as KMP for the entire financial year. Current Non-executive Directors Steven Gregg Mark Chellew Melinda Conrad Michael Ihlein(i) Gary Smith(ii) Chairman and Independent, Non-executive Director Independent, Non-executive Director Independent, Non-executive Director Independent, Non-executive Director Independent, Non-executive Director Barbara Ward AM Independent, Non-executive Director Penny Winn Independent, Non-executive Director Former Non-executive Directors Bruce Morgan(iii) Independent, Non-executive Director Current Senior Executives Matthew Halliday(iv) Andrew Brewer(v) Jeff Etherington(vi) Brent Merrick(vii) Joanne Taylor Former Senior Executives Julian Segal(viii) Louise Warner(ix) Managing Director and Chief Executive Officer Executive General Manager, Infrastructure Interim Chief Financial Officer Executive General Manager, Commercial Executive General Manager, Retail, Brand and Culture Managing Director and Chief Executive Officer Chief Commercial Officer (i) Mr Ihlein was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (ii) Mr Smith was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (iii) Mr Morgan retired from the Board as an Independent, Non-executive Director effective 14 May 2020. (iv) Mr Halliday was appointed Interim CEO effective 2 March 2020 and then permanently as MD & CEO effective 29 June 2020. (v) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (vi) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (vii) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (viii) Mr Segal ceased as MD & CEO effective 2 March 2020. (ix) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 46 Directors’ Report (continued)Ampol Limited 27 Directors’ Report continued Remuneration Report continued 1. Remuneration snapshot continued 1b. Senior Executive remuneration outcomes in 2020 (unaudited) Remuneration element Outcome Fixed remuneration Senior Executives had their base salary reduced by 20% for a period of three months in 2020 to assist in the organisational response to COVID-19. STI LTI There were no changes made to the remuneration of the MD & CEO following his permanent appointment effective June 2020. As reported in the 2019 Remuneration Report, there were no permanent increases to fixed remuneration for Senior Executives, except for the Executive General Manager, Retail, Brand and Culture, who received a 2.5% salary increase in April 2020 to better align salary with market. Portfolios were temporarily expanded for Matthew Halliday from Chief Financial Officer to Interim Chief Executive Officer; Louise Warner from Executive General Manager, Fuels and Infrastructure to Chief Commercial Officer; and for Joanne Taylor who temporarily had accountability for the Government and Corporate Affairs portfolio in addition to Retail, Brand and Culture. Higher duties salaries were temporarily provided to Senior Executives through these temporary expansions to role. These amounts are included in the salary amounts reported in table 4a below. RCOP NPAT performance in 2020 was 43% of target, which is below the threshold level of performance and results in no 2020 STI awards being payable. The 2017 LTI grant vested in April 2020, following Board assessment of performance measures over the 1 January 2017 to 31 December 2019 performance period. Overall, 6.66% of the 2017 LTI award vested in April 2020. This grant was subject to the achievement of relative TSR against S&P/ASX 100 companies (60%), a profit growth measure (20%) and a strategic measure (20%).  Ampol’s relative TSR performance compared to S&P/ASX 100 companies over this period was below threshold performance (50th percentile). No portion of the performance rights subject to this measure vested on 1 April 2020.  A profit growth target attributable to merger and acquisition ventures was defined at the beginning of the performance period. While a number of ventures were successful in generating substantial NPAT over the period, performance was below threshold requirements and no portion of the performance rights subject to this measure vested on 1 April 2020.  The strategic measure was based on the implementation of our Convenience Retail strategy measured through both quantitative and qualitative metrics. Net Promoter Score increased 10% over the period and total shop sales achieved a 19% uplift; both measures were above the threshold performance requirements. The Board determined that threshold performance was achieved and 33.3% of the performance rights subject to this measure vested on 1 April 2020. Retention award To mitigate the heightened retention risk during a protracted take-over bid and to ensure Senior Executive team stability through the transition of the MD & CEO, one-off cash retention awards to the value of 100% of fixed annual remuneration were established in March 2020. The payments will be made in March 2021 to the MD & CEO, Interim Chief Financial Officer, and Executive General Manager, Retail, Brand and Culture. 1c. Summary of 2020 Non-executive Director fees NED fees are fixed and do not have any variable components. The Chairman receives a fee for chairing the Ampol Limited Board and is not paid any other fees. Other NEDs receive a base fee and additional fees for committee chairmanship and membership, except for the Nomination Committee where no additional fee is paid. NEDs base fees did not change in 2020. NED fees were reduced by 20% for a period of three months in 2020 to assist in the organisational response to COVID-19. Superannuation contributions were made at a rate of 9.5%. No additional retirement benefits were paid. Fees paid to NEDs are subject to a maximum annual NED fee pool of $2.5 million (including superannuation). The fee pool was approved by shareholders at the 2016 Annual General Meeting and is unchanged since that time. See sections 4a and 4b for further detail. 47 Annual Report 2020 28 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 1. Remuneration snapshot continued 1d. Outlook for 2021 (unaudited) Key changes to remuneration arrangements in FY21 are outlined below: Change Commentary Senior Executive fixed remuneration The Board determined there would be no increase to the fixed remuneration of the MD & CEO for 2021, and there are no anticipated increases for Senior Executives in 2021. STI The operation of the STI will be revised to incorporate:  Updated STI gate-opener: The RCOP NPAT financial gate-opener (requiring 80% of target performance) will continue to apply to the Ampol (Company) Scorecard, representing the majority of STI opportunity (65% weighting of overall STI, including 40% weighted to RCOP NPAT).  Introduction of STI deferral: A portion of awards will be deferred in restricted shares for two years (where the deferred component is over $25,000), 40% for the MD & CEO, and 25% for other Senior Executives. In conjunction with these changes, the maximum STI opportunity for Senior Executives has been reduced from 200% to 150% of STI target opportunity. LTI LTI awards will continue to be split into two equally weighted components, with the following performance hurdles:  Relative TSR: Measured against the S&P ASX100, with 50% vesting at median and pro-rata vesting up to 100% vesting for 75th percentile performance. The relative TSR vesting schedule has been set in line with prevalent market practice.  Return on Capital Employed (ROCE): Consistent with the 2020 LTI awards, the ROCE hurdle will provide for 33% vesting at threshold performance, 66% at target performance and 100% vesting at stretch performance. The ROCE threshold has been set above our Weighted Average Cost of Capital and with target ROCE aligned to the three-year business plan target. Subject to meeting performance conditions, 100% of LTI awards will convert to restricted shares following the end of the three-year performance period and placed into a holding lock until the end of year four. (This varies from LTI awards of previous years where 25% is held for four years, noting that this requirement can be waived if shareholding is greater than one times base salary). Minimum shareholding requirement A new minimum shareholding requirement will be introduced as 100% of fixed annual remuneration for the MD & CEO and 50% for other Senior Executives. The minimum shareholding is to be obtained within five years. Malus and clawback Enhanced malus and clawback requirements for variable remuneration will also be implemented. Board discretion will be retained. Non-executive Director fees Non-executive Director fee pool Non-executive Director fees will not change in 2021. There will be no change to the Non-executive Director fee pool in 2021. As a result of the above changes to the executive framework in 2021, Senior Executive maximum total remuneration will be reduced by approximately 10%. 2. Oversight and external advice 2a. Board and Human Resources Committee The Board takes an active role in the governance and oversight of Ampol’s remuneration policies and practices. Approval of certain key human resources and remuneration matters are reserved for the Board, including setting remuneration for KMP and any discretion applied in relation to the targets or funding pool for Ampol’s incentive plans. The Human Resources Committee assists the Board to fulfil its corporate governance responsibilities in relation to Ampol’s remuneration framework, incentive plans, succession planning, as well as diversity and inclusion. 48 Directors’ Report (continued)Ampol Limited Directors’ Report continued 29 Remuneration Report continued 2. Oversight and external advice continued 2a. Board and Human Resources Committee continued The Human Resources Committee seeks to put in place appropriate remuneration arrangements and practices that are clear and understandable, attract and retain talent and capability, and support superior performance and long-term growth in shareholder value. Further information about the role of the Board and the Human Resources Committee is set out in their charters, which are available on the Company’s website (www.ampol.com.au). 2b. External advice The Human Resources Committee is independent of management and is authorised to obtain external professional advice as necessary. The use of external specialists to provide advice and recommendations specifically in relation to the remuneration of KMP is either initiated directly, or approved by, the Human Resources Committee, and these specialists are directly engaged by the Human Resources Committee Chair. During 2020, Ampol received no ‘remuneration recommendations’ (as defined in the Corporations Act). 3. Senior Executive remuneration 3a. Remuneration philosophy and structure The guiding philosophy underpinning the way Ampol rewards Senior Executives and all other employees is outlined below: Guiding philosophy Commentary Alignment with shareholders’ interests The payment of STI is dependent upon achieving threshold financial and non-financial performance aligned with Ampol’s strategy. The vesting of LTI is aligned with achieving strong returns for shareholders with the key measures of success being both relative TSR and ROCE. Share restriction arrangements within the LTI scheme require all Senior Executives to build up and maintain shareholdings to encourage further alignment with Ampol shareholders. Further detail on these measures is outlined in section 3d. Performance focused and differentiated The Company’s performance and reward processes enable individual connection to Ampol’s strategy and values – Connect to win, Find new ways, Own it, Make a difference, and Never stop caring – and appropriately weight company and individual objectives based on role level of accountability and contribution. Assessment of performance drives differentiated reward outcomes. Market competitive Ensure gender equity in remuneration outcomes Total reward offerings are set at competitive levels for comparable, similarly sized roles in each of the geographies we operate and allow Ampol to attract and retain quality talent. The Company’s remuneration philosophy is to position fixed remuneration at the median of a customised peer group of companies, and total remuneration generally aligned to the upper quartile for stretch performance. Market benchmarking compares against two peer groups; a primary customised peer group consisting of 20 companies of comparable size and complexity, and which the Board considers to be leading competitors for capital and people; and a secondary peer group based on pure market capitalisation, consisting of 20 companies. Externally managed trusts and overseas domiciled companies are excluded. Remuneration is reviewed to understand and address any gender-based pay differences on a like-for-like job level basis. Remuneration structure Our Senior Executive annual remuneration structure consists of:   fixed remuneration: base salary, non-monetary benefits, and superannuation; and variable remuneration: short-term and long-term incentives delivered in cash and equity that vests over future years. Variable remuneration is “at risk” and subject to individual and Group performance objectives. This comprises a mix of cash STIs (only payable if a threshold level of 80% RCOP NPAT target is met) and equity-based incentives awarded upon the achievement of relative TSR and a return-based performance measure. Superannuation is payable at a rate of 9.5% of base salary and on any STI payments delivered in cash. The remuneration structure (including the remuneration mix) is approved annually by the Board. 49 Annual Report 2020 30 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3b. Remuneration mix The maximum total remuneration mix for Senior Executives representing stretch performance is outlined below for 2020. The remuneration mix is weighted more heavily towards variable remuneration to better align remuneration outcomes to executive performance. See section 3d for further information on the LTI performance hurdles and vesting schedules. MD & CEO MD & CEO Other Senior Executives Other Senior Executives % 0 27% 33% 20 37% 40 40% 60 0% 10% 20% 30% 40% 50% 60% 36% 27 37 36 33 40 27 27% 80 70% 80% 100 90% 100% ■ Fixed remuneration Fixed remuneration ■ Variable remuneration – STI Variable remuneration - STI ■ Variable remuneration – LTI Variable remuneration - LTI (i) The remuneration mix for other Senior Executives uses the average fixed remuneration of the cohort. STI reflects 120% of fixed remuneration and LTI reflects 90% of base salary. (ii) Variable remuneration includes the superannuation payable on the cash portion and assumes all annual objectives and performance rights granted under the Ampol Equity Incentive Plan (AEIP) achieve target performance. 3c. Variable remuneration – 2020 STI Plan Plan STI awards are made under the Rewarding Results Plan. Plan rationale The plan rewards a combination of financial and non-financial performance measures that are aligned to the creation of shareholder value. Primary emphasis is placed on Company RCOP NPAT. Non-financial measures focus on safety and executing critical business plan objectives. Performance period The performance period is for the 12 months ending 31 December 2020. 2020 target and maximum stretch opportunity levels Financial gateway For the MD & CEO the target STI opportunity is 70% of base salary and the maximum stretch STI opportunity is 140% of base salary. For other Senior Executives the target STI opportunity is 60% of base salary and the maximum stretch STI opportunity is 120% of base salary. RCOP NPAT performance, including the cost of incentives, needs to be at least 80% of target before any short-term incentives are payable. In 2020, RCOP NPAT achieved 43% of target, resulting in no STI being payable to Senior Executives. Use of discretion In 2020, the Human Resources Committee decided against exercising discretion in relation to any exceptional unforeseen and uncontrollable impacts on the agreed performance measures. Payment vehicle STI awards are delivered in cash. Payment frequency STI awards are paid annually. Payments are made in the April following the end of the performance period. Senior Executive performance objectives Senior Executive performance objectives were defined in support of the 2020 business plan and Ampol’s longer-term strategic objectives. The Board has regularly monitored progress against business plan milestones and targets within each Senior Executive portfolio where specific performance measures were defined for teams and individuals. The Board approves the performance objectives of the MD & CEO and following recommendation from the MD & CEO, the Human Resources Committee reviews the performance objectives of the other Senior Executives. Senior Executive performance assessment The following table outlines the common performance objectives that applied to two or more Senior Executives in 2020. These measures accounted for between 50% and 55% of the Senior Executives’ performance scorecards. The remaining performance objectives were specific to each Senior Executive portfolio, including delivery of specific strategic growth projects/milestones, achievement of divisional EBIT targets, and achievement of key development targets. If all performance objectives are assessed at threshold, 60% of the target STI opportunity would be payable. If target performance is achieved, 100% of the STI target opportunity would be payable. If all objectives are assessed at stretch, 200% of the STI target opportunity would be payable. Payments are pro-rated between threshold and target, and between target and maximum on this basis noting this pay-out schedule deliberately incentivises above target performance. 50 Directors’ Report (continued)Ampol Limited Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3c. Variable remuneration – 2020 STI Plan continued Senior Executive performance assessment continued Measure Description RCOP NPAT RCOP NPAT is the primary performance measure in determining Senior Executive STI outcomes.(i) Weighting 40% 31 Performance assessment Commentary Below threshold Personal safety – F&I Performance is measured based on the Total Recordable Injury Frequency Rate (TRIFR) 5-7.5% Target to stretch Personal safety – Convenience Retail Performance is measured based on the TRIFR 5-7.5% Target to stretch The FY2020 financial result was impacted by challenging market conditions, with sustained weakness in refining margins, and severe demand destruction arising from COVID-19. At a business unit level, F&I International and Convenience Retail achieved above target performance, however the impact of refining led to an overall result below threshold. F&I personal safety performance was between target and stretch with a TRIFR of 4.6, which is the best result since Ampol began measuring TRIFR. This represents an improvement of ~57% over the previous year and was achieved as a result of targeted improvement plans. The Days Away from Work Injury Frequency Rate (DAFWIFR) was 1.1 and there was no high severity (Cat 2) injuries. Convenience Retail personal safety performance was between target and stretch with a TRIFR of 10.1. This represents an improvement of ~28% over the previous year and was a result of the implementation of targeted safety plans. The DAFWIFR was 4.8 and there was one high severity (Cat 2) injury. Performance is measured based on the number of spills Process safety (assessed at company or business unit level) 5-7.5% Target Process safety performance met target with four minor spills and there were no Tier 1 Process Safety incidents for the second year in a row. This result is the strongest ever from Ampol, resulting from targeted improvement plans. Free cash flow (FCF) FCF excluding growth capital expenditure and dividends 5% Below threshold Free cash flow performance was below threshold for 2020. (i) The RCOP NPAT methodology calculates the cost of goods sold on the basis of theoretical new purchases instead of actual costs from inventory. The cost of these theoretical new purchases is calculated as the average monthly cost of cargoes received during the month of those sales. Similarly, where there are sales revenues on a different basis to current month pricing, the revenue is recalculated on current pricing with the resulting pricing lag a component of reported inventory gains and losses. Each year, the Board reviews any significant items, positive and negative, and considers their relevance to the RCOP NPAT result. The Board may exclude any exceptional events from RCOP NPAT that management and the Board consider to be outside the scope of usual business. Exclusions may be made to give a clearer reflection of underlying financial performance from one period to the next. 51 Annual Report 2020 32 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3d. Variable remuneration – 2020 LTI Plan Plan LTI awards are granted under the Ampol Equity Incentive Plan (AEIP). Plan rationale LTI instrument The AEIP aligns Senior Executive rewards with the shareholder experience. This is done using relative TSR and ROCE performance measures to ensure capital is maximised to deliver strong shareholder returns. Performance rights are granted by the Company for nil consideration. Each performance right is a right to receive a fully paid ordinary share at no cost provided performance and service-based vesting conditions are achieved. Performance rights do not carry voting or dividend rights. The Board may determine to pay Senior Executives the cash value of a share in satisfaction of a vested performance right, instead of providing a share or restricted share. It is expected such discretion will only be exercised in limited cases, typically where the Senior Executive is a ‘good leaver’ from Ampol, that is where the employee ceases employment due to redundancy or retirement. Overseas based Senior Executives may also receive rights which can only be cash-settled (but these awards have the same service conditions and performance hurdles). Allocation methodology The number of performance rights granted is determined by dividing the maximum opportunity level by the 20-day volume weighted average share price up to the first day of the performance period, discounted by the value of the annual dividend to which the performance rights are not entitled. No discount is applied for the probability of achieving the performance measures. Performance period The performance period is three years commencing on 1 January in the year the awards are made. For the 2020 awards, this is the three-year period from 1 January 2020 to 31 December 2022. Target and stretch opportunity The MD & CEO received a grant of performance rights based on a maximum stretch LTI value of 150% of base salary. The target LTI value is 100% of base salary. Other Senior Executive grants were based on a maximum stretch LTI value of 90% of base salary with target LTI value of 60% of base salary. Performance measure weightings The performance measures of relative TSR assessed against a comparator group of S&P/ASX 100 companies and ROCE assessed against business plans were equally weighted in the 2020 awards. Vesting Vesting will occur in the April following the performance period once the performance measures have been assessed per the vesting schedule. For the 2020 awards, this will be April 2023. Vesting schedule Threshold (50th percentile): 33.3% Relative TSR performance and percentage of the rights that will vest:  Below threshold: 0%      Stretch (90th percentile): 100% Target (75th percentile): 66.6% Target to stretch: Pro-rata vesting occurs between these relative performance levels Threshold to target: Pro-rata vesting occurs between these relative performance levels ROCE is determined as RCOP EBIT over Capital Employed using the monthly average values for the performance period. ROCE performance and percentage of the rights that will vest are the same as the relative TSR measure(i); at threshold performance 33.3% of rights vest, at target 66.6% of rights vest, and at stretch 100% with pro- rata vesting occurring between these relative vesting levels. Shares acquired upon vesting of the performance rights Shares to satisfy vested performance rights are usually purchased on market. Shares allocated upon vesting of performance rights will carry the same rights as other ordinary shares (including dividends and voting rights). (i) Threshold ROCE performance has been set above our Weighted Average Cost of Capital and target aligned to the three-year business plan target approved in 2020. The Board has full discretion in relation to its assessment of ROCE performance and may include or exclude items to appropriately reflect the impact of corporate actions such as mergers and acquisitions or major projects which, while in shareholders’ long-term interests, may adversely impact near-term ROCE. Specific details of the ROCE targets have not been disclosed due to commercial sensitivity, although, the Remuneration Report for the year ending December 2022 will present Ampol’s performance against the ROCE targets. 52 Directors’ Report (continued)Ampol Limited 33 Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3d. Variable remuneration – 2020 LTI Plan continued Share restriction arrangements Share restriction arrangements are designed to encourage Senior Executive shareholding in Ampol over a longer period and further align with shareholder interests. 25% of the vested portion of performance rights will be converted into restricted shares. These shares are unable to be sold for a further period of four years (until 1 April 2027 for the 2020 LTI awards). This effectively extends the life of the AEIP from three years to seven years. For LTI awards from 2016, restriction arrangements may be waived if the Senior Executive can demonstrate he or she holds the equivalent of 100% of their base salary in shares prior to vesting. On ceasing employment, all dealing restrictions on the restricted shares cease to apply, subject to the application of the Clawback Policy. Clawback Policy See section 3e for information on the Ampol Clawback Policy. Termination provisions Should an AEIP participant cease to be an employee due to resignation, all unvested equity awards held by the participant will lapse, except in exceptional circumstances as approved by the Board. The Board has the discretion to determine the extent to which equity awards granted to a participant under the AEIP vest on a pro-rated basis, where the participant ceases to be an employee for reasons including retirement, death, total and permanent disablement, and redundancy. In these cases, the Board’s usual practice is to pro-rate the award to reflect the portion of the period from the date of grant to the date the participant ceased to be employed. In addition, the portion of the award that ultimately vests is determined by testing against the relevant performance measures at the usual time. Change of control provisions Any unvested performance rights may vest at the Board’s discretion. 2018 and 2019 LTI awards The 2018 and 2019 LTI awards will vest in April 2021 and April 2022 respectively, with a 60% weighting on relative TSR performance and 40% on other measures. For the 2018 LTI award, 40% of the award is based upon three strategic measures. The performance assessment for the 2018 award that will vest in April 2021 is as follows:     The vesting performance of the relative TSR measure (60%) was below threshold. Ampol’s three-year TSR performance compared to S&P/ASX 100 companies over the period from 1 January 2018 to 31 December 2020 was -4.5%, placing it at the 38th percentile of the comparator group. No portion of the performance rights subject to the relative TSR performance measure will vest on 1 April 2021, given performance below the 50th percentile. The vesting performance of the F&I profit growth measure (20%) was below threshold. In 2018, Ampol set strategic objectives to deliver increased earnings through merger and acquisition ventures related to entry into or development of new markets, products and/or services. This excludes business-as-usual improvement efforts, including cost-out or continuous improvement efforts and growth in current business activities. The vesting performance of the Convenience Retail EBIT growth measure (10%) was below threshold. Since the establishment of the Convenience Retail EBIT growth measure in 2018, several factors have contributed to a decline in earnings. The most significant contribution during 2019 was the softening of the retail fuel margin. While margins have improved during 2020, this has been somewhat offset by demand destruction due to COVID-19. Regardless of the effect of COVID-19 on the 2020 result, the incremental EBIT is below threshold. The vesting performance of the franchisee transition measure (10%) was at target. In 2018, Ampol commenced a long-term project to transition more than 400 franchised retail stores to Ampol ownership. The Board has assessed the project as meeting target objectives across the balance of qualitative and quantitative performance criteria, including project budget and timeline delivered between target and stretch, and success of the change management program. Just 12 sites continue to trade as franchised sites through to their agreement expiry dates. The at target performance assessment of the franchise transition measure results in 66.6% of this measure vesting (6.66% of the total 2018 LTI award). 53 Annual Report 2020 34 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3d. Variable remuneration – 2020 LTI Plan continued 2018 and 2019 LTI awards (continued) For the 2019 LTI award, 60% of the award is based on relative TSR and 40% ROCE. The performance assessment of both relative TSR and ROCE are consistent with what has been outlined above under the 2020 awards. The ROCE measure reflects the importance placed on capital discipline and the need to grow earnings in our Convenience Retail and F&I business areas, but only where this can be done at an appropriate return on the invested capital to maximise value for shareholders. 3e. Clawback Policy Ampol has a Clawback Policy which allows the Company to recoup incentives which may have been awarded and/or vested to Senior Executives in certain circumstances. The specific triggers which allow Ampol to recoup the incentives include Senior Executives acting fraudulently or dishonestly; acting in a manner which has brought a Group company into disrepute; where there has been a material misstatement or omission in the financial statements in relation to a Group company in any of the previous three financial years; or any other circumstances the Board determines in good faith to have resulted in an ‘unfair benefit’ to the Senior Executive. Upon the occurrence of any of the triggers, the Board may then take such actions it deems necessary or appropriate to address the events that gave rise to an ‘unfair benefit’. Such actions may include: 1. 2. requiring the Senior Executive to repay some or all cash or equity incentive remuneration paid in any of the previous three financial years; requiring the Senior Executive to repay any gains realised in any of the previous three financial years through the AEIP or on the open-market sale of vested shares; 3. cancelling or requiring the forfeiture of some or all the Senior Executive’s unvested performance rights, restricted shares, or 4. shares; reissuing any number of performance rights or restricted shares to the participant subject to new vesting conditions in place of the forfeited performance rights, restricted shares or shares; 5. adjusting the Senior Executive’s future incentive remuneration; and/or 6. initiating legal action against the Senior Executive. 3f. Hedging and margin lending policies The Ampol Securities Trading Policy prohibits KMP from entering into any arrangements that would have the effect of limiting their exposure relating to Ampol securities, including vested Ampol securities or unvested entitlements to Ampol securities under Ampol employee incentive schemes. KMP are prohibited from entering into any margin lending arrangements and other secured financing arrangements in respect of Ampol securities. KMP are required to undertake training to ensure that they are aware of and understand their obligations and responsibilities under the Securities Trading Policy, which is available on our website. A contravention is a serious matter and may lead to disciplinary action, including termination of employment. 54 Directors’ Report (continued)Ampol Limited 35 Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3g. Senior Executive remuneration and service agreements MD & CEO The MD & CEO’s remuneration is determined by the Board following receipt of a recommendation from the Human Resources Committee. In making its remuneration recommendation, the Human Resources Committee considered the performance of the MD & CEO and external market remuneration levels for companies of a similar size and complexity. The split between the MD & CEO’s 2020 annual total target and maximum remuneration is outlined below. Fixed remuneration Variable remuneration STI (ii) LTI (iii) Target $1,264,725 (70% of base salary) $1,650,000 (100% of base salary) Where target performance is achieved; all Company and individual financial and non- financial (incl. strategic) measures are assessed as meeting target objectives. Where target performance is achieved; relative TSR 75th percentile of ASX 100 companies and ROCE measure meets target objective. $1,806,750(i) Maximum $2,529,450 (140% of base salary) $2,475,000 (150% of base salary) Where stretch performance is achieved; all Company and individual financial and non- financial (incl. strategic) measures are assessed as meeting stretch objectives. Where stretch performance is achieved; relative TSR 90th percentile of ASX 100 companies and ROCE measure meets stretch objective. (i) The MD & CEO’s fixed remuneration remains unchanged since his appointment effective 29 June 2020. It consists of a base salary of $1,650,000 and superannuation of $156,750. (ii) Values include the superannuation contributions of 9.5% in addition to STI target and maximum amounts. (iii) LTI performance measures are tested at the end of a three year performance period. Share restriction arrangements encourage share retention and promote alignment with shareholders over the longer term. Table 1. Summary of MD & CEO’s service agreement Term Duration Conditions Ongoing until notice is given by either party Termination by MD & CEO Six months’ notice Termination by Company for cause Termination by Company (other) Company may elect to make payment in lieu of notice No notice requirement or termination benefits (other than accrued entitlements) Six months’ notice Termination payment of six months’ base salary (reduced by any payment in lieu of notice) Treatment of unvested STI and LTI in accordance with plan terms Post-employment restraints Restraint applies for six months if employed in the same industry within Australia Mr Matthew Halliday was appointed as Chief Financial Officer in April 2019. Mr Halliday received an award of restricted shares to compensate him for forgone LTI at his prior employer. The restricted share grant will vest in four tranches over three years and reflects the vesting schedule of the LTI forgone. Each unvested tranche will lapse if his employment ceases due to resignation, negligent behaviour, unsatisfactory performance or circumstances requiring immediate termination prior to each respective vesting date. This arrangement was established prior to his appointment to the MD & CEO role. 55 Annual Report 2020 36 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3g. Senior Executive remuneration and service agreements continued Other Senior Executives The remuneration and terms of employment for the other Senior Executives are formalised in service agreements (contracts of employment). Other Senior Executives are appointed as permanent Ampol employees and the terms and conditions reflect market conditions at the time of the contract negotiation and appointment. The durations of the service agreements are open-ended (i.e. ongoing until notice is given by either party). The material terms of the service agreements are set out below. For all permanently appointed Senior Executives the termination on notice (by the Company) is six (6) months and the notice period for resignation (by the Senior Executive) is six (6) months. Table 2. Service agreements for Senior Executives Termination on notice (by the Company) Resignation (by the Senior Executive) Permanently appointed Senior Executives 6 months 6 months Should a Senior Executive resign, their entitlement to unvested shares payable through the AEIP would generally be forfeited and, if resignation was on or before 1 April of the year, any entitlement under the Rewarding Results Plan would also be forfeited subject to the discretion of the Board. Should a Senior Executive be made redundant, their redundancy payment is determined by the Ampol Redundancy Policy with the payment calculated based on years of service and the applicable notice period. Other than prescribed notice periods, there is no special termination benefit payable under the service agreements. Statutory benefits (such as long service leave) are paid in accordance with the legislative requirements at the time the Senior Executive ceases employment. Former Managing Director and Chief Executive Officer – Julian Segal Mr Julian Segal retired effective 2 March 2020. On retirement his unvested 2018 and 2019 LTI awards were pro-rated based on the portion of the vesting period he was employed. The portion of LTI awards he retains will remain subject to the applicable performance hurdles and will vest, if applicable, in accordance with original terms of offer and at the end of the performance periods in April 2021 and April 2022. He did not receive a 2020 LTI award and no STI was payable for 2020. Former Chief Commercial Officer – Louise Warner Ms Louise Warner resigned effective 28 September 2020. Upon resignation her unvested LTI awards and retention award lapsed in accordance with original terms of offer. 56 Directors’ Report (continued)Ampol Limited Directors’ Report continued 37 Remuneration Report continued 3. Senior Executive remuneration continued 3h. Link between Company performance and Senior Executive remuneration The link between Senior Executive remuneration and Company performance is outlined in section 1 where the 2020 remuneration outcomes are provided, and section 3 where the STI and LTI performance measures are explained. Table 3 outlines Ampol’s TSR, dividend, share price, earnings per share, RCOP NPAT results and safety performance each year from 2016 to 2020 together with the linkage to actual STI and LTI outcomes. Table 3. Link between Company performance and Senior Executive remuneration (unaudited) Summary of performance over 2016-20 12-month TSR %(i) Dividends (cents per share) Share price(ii) RCOP excluding significant items earnings per share RCOP NPAT excluding significant items (million)(iii) Ampol Safety – TRIFR (iv) Ampol Safety – DAFWIFR(v) Link to remuneration STI – percentage of business plan RCOP NPAT target achieved STI – average Senior Executive outcome (relative to target) LTI – percentage vesting three years after grant date 2020 -14.1 76c 2019 36.9 93c 2018 -21.7 118c 2017 11.8 121c 2016 -16.4 102c $28.42 $33.95 $25.48 $34.05 $30.46 $0.84 $212 7.4 3.1 $1.36 $344 11.5 5.7 $2.06 $538 8.3 2.0 $2.38 $2.01 $621 $524 5.2 1.4 5.6 1.7 43% 65% 89% 119% 87% 0% 0% 88% 121% 95% Year of grant Percentage of grant vesting 2018 6.66% 2017 2016 2015 2014 6.66% 21.22% 22.38% 84.78% (i) TSR is a measure of the return to shareholders in respect of each financial year. It is calculated as the change in share price for the year, plus dividends announced for the year, divided by the opening share price. (ii) The price quoted is the trading price for the last day of trading (31 December) in each calendar year. (iii) Measured using the RCOP method which excludes the impact of inventory gains and losses and significant items as determined by the Board providing a truer reflection of underlying financial performance. (iv) Total Recordable Injury Frequency Rate (TRIFR). (v) Days Away from Work Injury Frequency Rate (DAFWIFR). The total number of occupational injuries resulting in 'Days Away from Work' as certified by a physician during a nominated reporting period per 1,000,000 hours worked for a nominated reporting period. 57 Annual Report 2020 38 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration tables Table 4a. Total remuneration earned by Senior Executives in 2020 (unaudited, non-statutory disclosures) The following table sets out the actual remuneration earned by Senior Executives in 2020. The value of remuneration includes the equity grants where the Senior Executive received control of the shares in 2020. The purpose of this table is to provide a summary of the “past” and “present” remuneration outcomes received in either cash or equity. Due to this, the values in this table will not reconcile with those provided in the statutory disclosures in table 4b. For example, table 4b discloses the value of LTI grants which may or may not vest in future years amortised over the vesting period and may be negative when adjustments for actual vesting outcomes are applied. Table 4a discloses the value of LTI grants from previous years which vested in 2020. Salary and fees(i) Other remuneration (ii) Bonus (short-term incentive) Termination Benefit(iii) Retention Award(iv) LTI vested during the year(v) Remuneration ‘earned’ for 2020(vi) Current Senior Executives Matthew Halliday (Managing Director and Chief Executive Officer) (vii)(viii) 2020 1,470,278 205,110 Andrew Brewer (Executive General Manager, Infrastructure) (ix) 2020 67,659 14,584 Jeff Etherington (Interim Chief Financial Officer) (vii)(x) 2020 594,730 67,891 Brent Merrick (Executive General Manager, Commercial) (xi) 2020 181,777 64,610 - - - - Joanne Taylor (Executive General Manager, Retail, Brand and Culture) (vii) 2020 854,695 90,244 - Former Senior Executives Julian Segal (Former Managing Director and Chief Executive Officer) (vii)(xii) 2020 408,083 150,094 Louise Warner (Former Chief Commercial Officer) (vii)(xiii) 2020 749,964 108,133 Total remuneration: 2020 4,327,186 700,666 - - - - - - - - 1,533,000 408,489 3,616,877 - - 82,243 766,500 17,358 1,446,479 - - 246,387 886,676 28,915 1,860,530 1,074,250 237,567 - - - 1,632,427 36,441 1,132,105 1,311,817 3,186,176 491,203 10,017,048 (i) Salary and fees comprise base salary and cash payments in lieu of employer superannuation (on 2020 base salary and/or on STI payments). (ii) Other remuneration includes superannuation, annual leave and long service leave entitlements, and any fringe benefits tax payable on non-monetary benefits. For Mr Merrick this includes relocation assistance provided in support of his return to Australia from Singapore. (iii) Termination benefits includes salary paid during the Senior Executives’ notice period. (iv) To manage heightened retention risk through a protracted take-over bid and to support the MD & CEO transition, a one-off cash retention award to the value of 100% of fixed annual remuneration was established in March 2020. The retention awards are conditional on continued service, successful performance and appropriate conduct. (v) This refers to cash and equity based LTI plans from prior years that have vested in the current 2020 year. The value is calculated using the closing share price of Company shares on the vesting date. The 2020 LTI figures reflect 6.66% of the 2017 LTI Award vested. For Mr Halliday, this amount refers to the value of the restricted shares which vested to him during 2020 (refer to tables 5 and 6 below for more detail). (vi) This refers to the total value of remuneration earned during 2020, being the sum of the prior columns. (vii) These Senior Executives elect to receive an equivalent cash payment in lieu of employer superannuation that is in excess of the quarterly Superannuation Guarantee Maximum. (viii) Mr Halliday was appointed Interim CEO effective 2 March 2020 and then permanently MD & CEO on 29 June 2020. (ix) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (x) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (xi) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (xii) Mr Segal ceased as MD & CEO effective 2 March 2020. (xiii) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 58 Directors’ Report (continued)Ampol Limited Directors’ Report continued 39 Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration tables continued Table 4b. Total remuneration for Senior Executives in 2020 (statutory disclosures) The following table sets out the audited total remuneration for Senior Executives in 2019 and 2020, calculated in accordance with statutory accounting requirements: Primary Bonus (short- term incentive) Non- monetary benefits(ii) Salary and fees(i) Post- employment Other long-term Equity Total Super- annuation Other(iii) Termination Benefit (iv) Retention Award(v) Share benefits (long-term incentive) (vi) Rights benefits (long-term incentive) (vii) Current Senior Executives Matthew Halliday (Managing Director and Chief Executive Officer) (vi)(viii)(ix) 59,972 21,348 41,305 - 1,277,500 809,972 63,016 3,825,875 2020 1,552,762 2019 761,279 - - 25,378 15,634 16,914 Andrew Brewer (Executive General Manager, Infrastructure) (x) 2020 2019 72,874 - - - 1,242 6,428 1,699 - - - Jeff Etherington (Interim Chief Financial Officer) (viii)(xi) 2020 620,225 2019 - - - 13,550 16,098 12,748 - - - Brent Merrick (Executive General Manager, Commercial) (xii) 2020 195,306 2019 - - - 29,360 17,124 4,597 - - - Joanne Taylor (Executive General Manager, Retail, Brand and Culture) (viii) 2020 882,719 2019 845,526 - - Former Senior Executives 20,632 21,348 20,240 18,469 20,767 19,746 - - - - - - - - - Julian Segal (Former Managing Director and Chief Executive Officer) (viii)(xiii) 2020 501,690 2019 2,264,809 - - 3,965 16,667 35,856 1,074,250 16,044 25,000 53,619 - Louise Warner (Former Chief Commercial Officer) (viii)(xiv) 2020 800,435 2019 995,956 - - Total remuneration: 14,410 21,348 21,904 237,567 16,280 20,767 21,837 - 1,028,564 115,871 1,963,640 - - - - - - - - - - - - - - 82,243 - (8,516) 1,292,855 - - 53,164 299,551 - - (1,499) 1,682,337 176,909 1,081,417 (261,957) 1,370,471 907,296 3,266,768 (354,231) 741,433 214,295 1,269,135 - 638,750 - 738,897 - - 2020 4,626,011 - 143,131 120,361 138,349 1,311,817 2,655,147 809,972 (510,023) 9,294,765 2019 4,867,570 - 76,171 82,168 112,116 - - 1,028,564 1,414,371 7,580,960 59 Annual Report 2020 40 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration tables continued Table 4b. Total remuneration for Senior Executives in 2020 (statutory disclosures) continued (i) Salary and fees include base salary and cash payments in lieu of employer superannuation. For 2020 the cash payments in lieu of employer superannuation is on 2020 base salary. These figures also include any annual leave accruals for Senior Executives. (ii) The non-monetary benefits received by Senior Executives include car parking benefits, employee AmpolCard benefits, the payment of the default premiums for death and total and permanent disability insurance cover and related fringe benefits tax payments made by Ampol. (iii) Other long-term remuneration represents the long service leave accruals for all Senior Executives. For Mr Merrick this includes relocation assistance provided in support of his return to Australia from Singapore. (iv) Termination benefits includes salary paid during notice periods. (v) This value represents the amount of the retention award accrued for in 2020 being 10 out of 12 months of the total retention award. (vi) Share benefits represent the value of the restricted shares awarded to Mr Halliday on commencing employment. These values have been calculated in accordance with accounting standards with further details regarding these awards set out in Table 5. (vii) These values have been calculated in accordance with accounting standards. The values may not represent the future value that the Senior Executive will receive, as the vesting of the performance rights is subject to Ampol achieving pre-defined performance measures. The value of restricted shares and performance rights is amortised over the applicable vesting period. The amount shown is the amortisation relating to the 2020 reporting year (and 2019 as a comparison). The accounting value of share-based payments may be negative where an executive’s share-based payment expense includes adjustments for previously incurred expenses relating to an award that has not met its vesting conditions. For Mr Merrick this value includes a one-off retention award of share rights granted in 2019 vesting in equal tranches in April 2021 and April 2022. (viii) These Senior Executives elect to receive an equivalent cash payment in lieu of employer superannuation that is in excess of the quarterly Superannuation Guarantee Maximum. (ix) Mr Halliday was appointed Interim CEO effective 2 March 2020 and then permanently MD & CEO on 29 June 2020. (x) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (xi) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (xii) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (xiii) Mr Segal ceased as MD & CEO effective 2 March 2020. (xiv) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 60 Directors’ Report (continued)Ampol Limited 41 Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration Tables continued Table 5. Unvested shareholdings of Senior Executives during 2020 Unvested shares at 31 Dec 2019 Restricted shares granted Shares vested in current performance year Unvested shares at Forfeited 31 Dec 2020 Matthew Halliday(i) 76,898 - 16,268 - 60,630 (i) The restricted shares awarded to Mr Halliday represent the grant received on commencement with Ampol in lieu of the LTI forgone with his previous employer (refer to section 3g for further detail). 17.5% vested in October 2019 and 17.5% vested in October 2020. 30.2% will vest in October 2021 and the final tranche of 34.8% will vest in October 2022. Table 6. Restricted share grant to a Senior Executive – other awards The following table provides an estimate of the future cost to Ampol of unvested restricted shares based on the progressive vesting of the restricted shares. One award was made to Matthew Halliday in 2019 in respect of unvested LTI which lapsed upon his resignation with his prior employer. The estimated future cost of the unvested shares has been supplied below. Type of award Year of award Vested (% of shares vested) Future years when shares will vest Future cost to Ampol of unvested shares ($) Matthew Halliday Sign-on 2019 35.0% 2021 (30.2%) 704,486 2022 (34.8%) Table 7. 2020 Senior Executive performance rights LTIs for Senior Executives are awarded as performance rights under the AEIP as explained in section 3d. The following table sets out details of movements in performance rights held by Senior Executives during the year, including details of the performance rights that vested as presented in table 4a. Performance rights at 1 Jan 2020(i) Current Senior Executives Matthew Halliday Andrew Brewer(vi) Jeff Etherington(vii) Brent Merrick(viii) Joanne Taylor 37,505 8,717 42,308 45,653 66,045 Former Senior Executives Julian Segal(ix) Louise Warner(x) 366,450 81,935 Granted in 2020(ii) Vested in 2020(iii) Lapsed in 2020(iv) Balance at 31 December 2020(v) 67,604 - 10,836 - 23,462 - 28,974 - - (745) - (1,241) - (1,564) - - (17,013) - (17,374) (99,038) (109,345) 105,109 8,717 35,386 45,653 70,892 267,412 - (i) This relates to the 2017, 2018 and 2019 performance rights. If the service-based and performance-based vesting conditions are achieved, the 2018 and 2019 performance rights will vest in 2021 and 2022 respectively. For Senior Executives appointed during the year this includes performance rights held at the time of appointment. For Mr Merrick this value includes a one-off retention award of share rights granted in 2019 vesting in equal tranches in April 2021 and April 2022. This relates to the 2020 performance rights. If the service-based and performance-based vesting conditions are achieved, these performance rights will vest in 2023. (ii) (iii) This relates to the 2017 performance rights of which 6.66% vested. Senior Executives received one Ampol share for each right that vested. (iv) This relates to the 2017 performance rights of which 93.33% lapsed and for the former Senior Executives the full or pro-rated portion of unvested performance rights which lapsed on cessation of employment. Refer to section 3g. The performance rights for any former Senior Executives are as at the date they ceased employment or retired from their office. (v) (vi) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (vii) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (viii) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (ix) Mr Segal ceased as MD & CEO effective 2 March 2020. (x) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 61 Annual Report 2020 42 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration tables continued Table 8. Valuation assumptions of performance rights granted The fair value of performance rights granted under the AEIP is determined independently by Deloitte using an appropriate numerical pricing model. The model considers a range of assumptions and the fair values for each year of grant have been calculated incorporating the assumptions below. 2020 grant(i)(ii) 2019 grant(i) 2018 grant(i) Relative TSR against S&P/ASX 100 ROCE measure Relative TSR against S&P/ASX 100 ROCE measure Relative TSR against S&P/ASX 100 Strategic measure Grant date 03 April 2020 03 April 2020 4 April 2019/ 4 April 2019/ 4 April 2018/ 4 April 2018/ 20 May 2019 20 May 2019 18 May 2018 18 May 2018 Vesting date 1 April 2023 1 April 2023 1 April 2022 1 April 2022 1 April 2021 1 April 2021 Exercise price Volatility Risk-free interest rate Dividend yield Nil 29% 0.2% 3.6% Nil 29% 0.2% 3.6% Nil Nil Nil Nil 20%/20% 20%/20% 23%/22% 23%/22% 1.4%/1.2% 1.4%/1.2% 2.2%/2.3% 2.2%/2.3% 4.5%/4.4% 4.5%/4.4% 3.6%/3.9% 3.6%/3.9% Expected life (years) 3.0 years 3.0 years 3.0/2.9 years 3.0/2.9 years 3.0/2.9 years 3.0/2.9 years Share price at grant date $23.00 $23.00 $26.50/$27.01 $26.50/$27.01 $31.42/$30.81 $31.42/$30.81 Valuation per right $9.07 $20.65 $8.23/$8.08 $23.19/$23.83 $11.88/$9.74 $28.24/$27.53 (i) Market performance measures, such as relative TSR, must be incorporated into the option-pricing model valuation used for the AEIP performance rights, which is reflected in the valuation per performance right. Non-market vesting conditions such as ROCE and strategic measures are not taken into account when determining the value of the performance right. This explains the higher valuation for these performance rights. However, the value of the ROCE and strategic measures may be discounted during the performance period to reflect the Board’s assessment of the probability of the number of equity instruments that will vest based on progress against the performance measures. These values are reflected in table 4b. (ii) In 2020 AEIP performance grants were made on 3 April 2020. In previous years the MD & CEO’s awards were made after shareholder approval was obtained at the Annual General Meeting held in May. Approval for Mr Halliday’s 2020 award was not sought as he was Interim CEO and not a Managing Director at this time. Table 9. Mix of fixed and variable remuneration based on 2020 statutory remuneration table The fixed and variable proportion of each Senior Executive’s remuneration for 2020 is outlined below. The percentages are based on the 2020 statutory remuneration disclosures in table 4b (including the LTI values which are determined in accordance with accounting standards), and do not correspond to the target remuneration percentages outlined in section 3b. Fixed 44% 100% 51% 82% 56% 100% 100% Variable (including short-term and long-term incentive payments) 56% - 49% 18% 44% - - Current Senior Executives Matthew Halliday Andrew Brewer Jeff Etherington Brent Merrick Joanne Taylor Former Senior Executives Julian Segal(i) Louise Warner(ii) (i) Mr Segal ceased as MD & CEO effective 2 March 2020. (ii) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 62 Directors’ Report (continued)Ampol Limited Directors’ Report continued Remuneration Report continued 3. Senior Executive remuneration continued 3i. Remuneration tables continued Table 10. FY2020 STI outcomes The following table sets out the actual STI outcome for each Senior Executive as a percentage of their maximum STI opportunity. 43 Current Senior Executives Matthew Halliday(i) Andrew Brewer(ii) Jeff Etherington(iii) Brent Merrick(iv) Joanne Taylor Former Senior Executives Julian Segal(v) Louise Warner(vi) Average(vii) 2020 0% 0% 0% 0% 0% 0% 0% 0% 2019 0% - - - 0% 0% 0% 0% (i) Mr Halliday was appointed Interim CEO effective 2 March 2020 and then permanently MD & CEO on 29 June 2020. (ii) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (iii) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (iv) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (v) Mr Segal ceased as MD & CEO effective 2 March 2020. (vi) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. (vii) This is the average of those KMP eligible to receive an STI payment in each year. 4. Non-executive Director fees 4a. Our approach to Non-executive Director fees Ampol’s business and corporate operations are managed under the direction of the Board. The Board oversees the performance of Ampol’s management in seeking to deliver superior business performance and long-term growth in shareholder value. The Board recognises that providing strong leadership and strategic guidance to management is important to achieve our goals and objectives. Under the Ampol Constitution and the ASX Listing Rules, the total annual fee pool for NEDs is determined by shareholders. Within this aggregate amount, NED fees are reviewed by the Human Resources Committee, considering recommendations from an independent remuneration consultant, and set by the Board. Fees for NEDs are set at a level to attract and retain directors with the necessary skills and experience to allow the Board to have a proper understanding of, and competence to deal with, current and emerging issues for Ampol’s business. The Board seeks to attract directors with different skills, experience, expertise and diversity. Additionally, when setting NED fees, the Board considers factors such as external market data on fees and the size and complexity of Ampol’s operations. The NEDs’ fees are fixed, and NEDs do not participate in any Ampol incentive plan. 4b. Board and committee fees for 2020 The current maximum annual fee pool for NEDs is $2.5 million, including statutory entitlements. This amount was approved by shareholders at the 2016 Annual General Meeting. Table 11. 2020 Non-executive Director fees The following table outlines the 2020 NED fees. Board Committees(i) 2020 fee(ii) Chairman $502,207 Member Committee Chairman Member $167,402 $46,000 $20,000 (i) Comprising the Audit Committee, Human Resources Committee, and Safety and Sustainability Committee. No fees are paid to the Chair or members of the Nomination Committee. (ii) Ampol paid superannuation of 9.5% for Non-executive Directors in addition to the above fees in 2020. 63 Annual Report 2020 44 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 4. Non-executive Director fees continued 4c. Remuneration table Table 12. Non-executive Director fees in 2020 (statutory disclosures) The following table sets out the audited NED fees in 2019 and 2020, calculated in accordance with statutory accounting requirements and which reflect the actual remuneration received during the financial year. NED fees were reduced by 20% for a period of three months in 2020 to assist in the organisational response to COVID-19. NEDs are not eligible to receive any cash or equity-based incentives. Primary Post-employment Total Salary and fees Non-monetary benefits Superannuation(i) Current Non-executive Directors Steven Gregg (Chairman) 2020 2019 Mark Chellew 2020 2019 Melinda Conrad 2020 2019 Michael Ihlein(ii)(iii) 2020 2019 Gary Smith(iv) 2020 2019 Barbara Ward AM 2020 2019 Penny Winn 2020 2019 Former Non-executive Directors Bruce Morgan(ii)(v) 2020 2019 477,097 502,207 197,033 207,403 197,033 207,403 133,915 - 114,072 - 221,733 233,403 221,733 233,403 87,762 233,403 - 921 - - 220 160 - - - - 406 221 - - 1,006 1,036 45,324 47,710 18,718 19,703 18,718 19,703 6,652 - 10,837 - 21,065 22,173 21,065 22,173 5,543 22,173 522,421 550,838 215,751 227,106 215,971 227,266 140,567 - 124,909 - 243,204 255,797 242,798 255,576 94,311 256,612 (i) Superannuation contributions are made on behalf of Non-executive Directors to satisfy Ampol’s obligations under the Superannuation Guarantee legislation. Fees paid to Non-executive Directors may be subject to fee sacrifice arrangements for superannuation. (ii) These Non-executive Directors were provided superannuation guarantee employer shortfall exemption from the Australian Tax Office and were provided employer superannuation contributions as a cash allowance for part of the year. (iii) Mr Ihlein was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (iv) Mr Smith was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (v) Mr Morgan retired from the Board as an Independent, Non-executive Director effective 14 May 2020. 64 Directors’ Report (continued)Ampol Limited Directors’ Report continued 45 Remuneration Report continued 5. Shareholdings of Key Management Personnel Table 13: Shareholdings of Key Management Personnel The movement during the reporting period in the number of shares of Ampol Limited held directly or indirectly by each KMP, including their personally related entities, is in the following table. Held at 31 Dec 2019 Purchased Vested Sold Held at 31 Dec 2020(I) Current Directors Steven Gregg Mark Chellew Melinda Conrad Michael Ihlein(ii) Gary Smith(iii) Barbara Ward AM Penny Winn Former Directors Bruce Morgan(iv) Current Senior Executives Matthew Halliday Andrew Brewer(v) Jeff Etherington(vi) Brent Merrick(vii) Joanne Taylor Former Senior Executives Julian Segal(viii) Louise Warner(ix) 6,000 1,400 8,000 - - 6,500 5,911 10,500 16,268 17,063 3,967 874 3,008 351,274 469 - - - - - - - - - - - - - - - - - - - - - - - 16,268 - 745 - 1,241 - 1,564 - - - - - - - - - - - - - - - 6,000 1,400 8,000 - - 6,500 5,911 10,500 32,536 17,063 4,712 874 4,249 351,274 2,033 65 Annual Report 2020 46 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Remuneration Report continued 5. Shareholdings of Key Management Personnel continued Table 13: Shareholdings of Key Management Personnel continued Current Directors Steven Gregg Mark Chellew Melinda Conrad Michael Ihlein(ii) Gary Smith(iii) Barbara Ward AM Penny Winn Former Directors Bruce Morgan(iv) Current Senior Executives Matthew Halliday Andrew Brewer(v) Jeff Etherington(vi) Brent Merrick(vii) Joanne Taylor Former Senior Executives Julian Segal(viii) Louise Warner(ix) Held at 31 Dec 2018 Purchased Vested Sold Held at 31 Dec 2019(i) 6,000 1,400 8,000 - - 6,500 5,911 10,500 - - - - - - - - - - - - - - - - - - 325,585 469 4,150 - - - - - - - - - 16,268 - - - 3,008 21,539 - - - - - - - - - - - - - - - - 6,000 1,400 8,000 - - 6,500 5,911 10,500 16,268 - - - 3,008 351,274 469 (i) The shareholdings for any former Directors or former Senior Executives are as at the date they ceased employment or retired from their office. (ii) Mr Ihlein was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (iii) Mr Smith was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (iv) Mr Morgan retired from the Board as an Independent, Non-executive Director effective 14 May 2020. (v) Mr Brewer was appointed Executive General Manager, Infrastructure effective 1 December 2020. (vi) Mr Etherington was appointed Interim Chief Financial Officer effective 2 March 2020. (vii) Mr Merrick was appointed Executive General Manager, Commercial effective 28 September 2020. (viii) Mr Segal ceased as MD & CEO effective 2 March 2020. (ix) Ms Warner resigned as Chief Commercial Officer effective 28 September 2020. 6. Other Key Management Personnel transactions Apart from as disclosed in the indemnity section of the Directors' Report, no KMP have entered into a material contract, loan or other transaction with any entity in the Ampol Group during the year ended 31 December 2020 (2019: nil). 66 Directors’ Report (continued)Ampol Limited Directors’ Report continued 47 Directors’ interests The Directors’ relevant interests in the shares of Ampol Limited at 31 December 2020 are set out in the following table. Director Shareholding Nature of interest Steven Gregg 6,000 shares Indirect interest Matthew Halliday 32,536 shares Direct interest (32,536 shares) 105,109 performance rights Direct interest in 105,109 performance rights Mark Chellew 1,400 shares Melinda Conrad 8,000 shares Michael Ihlein Gary Smith 0 shares 0 shares Barbara Ward AM 6,500 shares Penny Winn 5,911 shares Former Directors(i) Indirect interest Indirect interest Not applicable Not applicable Direct interest Indirect interest Bruce Morgan 10,500 shares Indirect interest Julian Segal 351,274 shares Direct Interest (296,367 shares) 267,412 performance rights Indirect Interest (81,907 shares) Direct Interest in (267,412 performance rights) (i) The shareholdings for any Former Directors are as at the date they ceased employment or retired from their office. No other Director has acquired or disposed of any relevant interests in the Company’s shares in the period from 1 January 2020 to the date of this Annual Report. 67 Annual Report 2020 48 AMPOL LIMITED 2020 Annual Report Directors’ Report continued Board and committee meetings The Ampol Board met 38 times during the year ended 31 December 2020. In addition, Directors attended Board strategy sessions and workshops, site visits and special purpose committee meetings during the year. The number of Board and committee meetings attended by each Director during 2020 are set out in the following table. Director(i) Board(ii) Audit Committee Human Resources Committee Nomination Committee Safety and Sustainability Committee Current Directors Held Attended Held Attended Held Attended Held Attended Held Attended Steven Gregg Matthew Halliday(iii) Mark Chellew Melinda Conrad Michael Ihlein (iv) Gary Smith(v) Barbara Ward AM Penny Winn Former Directors Bruce Morgan(vi) Julian Segal(vii) 38 15 38 38 17 17 38 38 19 6 38 15 38 36 17 17 38 38 17 6 - - - 5 4 - 5 5 1 - - - - 5 4 - 5 5 1 - - - 3 3 - 2 3 - - - - - 3 3 - 2 3 - - - 1 - 1 1 - - 1 1 1 - 1 - 1 1 - - 1 1 1 - - - 4 - 2 2 - 4 2 - - - 4 - 2 2 - 4 2 - (i) All Directors are invited to (and regularly attend) committee meetings; this table lists attendance only where a Director is a member of the relevant committee. A number of Directors also participated in Board Committees convened for special purposes. Includes out of session meetings but excludes strategy workshops and briefings. (ii) (iii) Mr Halliday attended all Board meetings from the time of appointment as MD & CEO from 29 June 2020. (iv) Mr Ihlein was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (v) Mr Smith was appointed to the Board as an Independent, Non-executive Director effective 1 June 2020. (vi) Mr Morgan retired from the Board as an Independent, Non-executive Director effective 14 May 2020. (vii) Mr Segal ceased as MD & CEO effective 2 March 2020. 68 Directors’ Report (continued)Ampol Limited Directors’ Report continued Shares and interests The total number of ordinary shares on issue at 31 December 2020 was 249,706,947 shares, prior to the completion of a 11,404,848 share buy back in 2021 (2019: 249,706,947 shares on issue). The total number of rights on issue at the date of this report is 1,385,590 (2019: 1,700,742). 426,101 rights were issued during 2020 (2019: 908,182). 757,022 rights vested or lapsed during the year (2019: 516,578), with an additional 2,026 rights lapsing in 2021 prior to the date of this report. On vesting, Ampol is required to allocate one ordinary share for each right. For each right that vests, Ampol intends to purchase a share on market. Non-audit services KPMG is the external auditor. In 2020, KPMG performed non-audit services for Ampol in addition to its statutory audit and review engagements for the full year and half year. KPMG received, or was due to receive, the following amounts for services performed for Ampol during the year ended 31 December 2020:  for audit and review services – total fees of $1,666,800 (2019: $1,748,700);   for assurance services – total fees of $41,600 (2019: $132,100); and for other services – total fees $574,000 (2019: $80,940). Other services includes transaction services in respect of Ampol’s disposal of a 49% interest in certain freehold convenience retail sites and remuneration benchmarking services. The Board has received written advice from the Audit Committee in relation to the independence of KPMG, as external auditor, for 2020. The advice was made in accordance with a resolution of the Audit Committee. The Directors are satisfied that:  the provision of non-audit services to the Ampol Group during the year ended 31 December 2020 by KPMG is compatible with the general standard of independence for auditors imposed by the Corporations Act; and  the provision of non-audit services during the year ended 31 December 2020 by KPMG did not compromise the auditor independence requirements of the Corporations Act for the following reasons: – – – The provision of non-audit services in 2020 was consistent with the Board’s policy on the provision of services by the external auditor; The non-audit services provided in 2020 are not considered to be in conflict with the role of external auditor and The Directors are not aware of any matter relating to the provision of the non-audit services in 2020 that would impair the impartial and objective judgement of KPMG as external auditor. 49 Company Secretaries The following person is the current Company Secretary of Ampol as at the date of this report: Georgina Koch Georgina Koch was appointed to this position in March 2020. Georgina manages Ampol’s legal, secretariat and compliance teams. As General Counsel, she is responsible for managing legal risk for Ampol and providing legal advice to Ampol’s Board, CEO and broader leadership team. Georgina, who joined Ampol in 2017, has over 20 years’ experience in advising on commercial, competition and corporate legal issues. Prior to Ampol, she held senior roles at Commonwealth Bank and Clayton Utz. Georgina holds a Bachelor of Economics, a Bachelor of Laws and a Masters in Labour Law and Relations from the University of Sydney. Indemnity and insurance Ampol has paid insurance premiums for Directors’ and officers’ liability for current and former Directors and officers of the Company, its subsidiaries and related entities. The insurance policies prohibit disclosure of the nature of the liabilities insured against and the amount of the premiums. The Constitution provides that each officer of the Company and, if the Board considers it appropriate, any officer of a subsidiary of the Company be identified out of the assets of the Company to the relevant extent against any liability incurred by the officer in or arising out of the conduct of the business of the Company or the subsidiary (as the case may be) or in or arising out of the discharge of the duties of the officer, unless incurred in circumstances that the Board resolves do not justify indemnification. Where the Board considers it appropriate, the Company may execute a documentary indemnity in any form in favour of any officer of the Company or a subsidiary of the Company, provided that such terms are not inconsistent with the Constitution. For more information, refer to the Constitution on the Ampol website. Rounding of amounts Ampol Limited is an entity to which Australian Securities and Investments Commission Corporations Instrument 2016/191 applies. Amounts in the 2020 Directors’ Report and the 2020 Financial Report have been rounded off to the nearest hundred thousand dollars (unless otherwise stated) in accordance with that instrument. The Directors’ Report is made in accordance with a resolution of the Board of Ampol Limited. Steven Gregg Chairman Matthew Halliday Managing Director & Chief Executive Officer Sydney, 22 February 2021 69 Annual Report 2020 Auditor’s Independence Declaration 2020 Annual Report AMPOL LIMITED 50 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Ampol Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Ampol Limited for the financial year ended 31 December 2020 there have been: i. ii. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Julian McPherson Partner Sydney 22 February 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 70 Ampol LimitedDirectors’ Declaration Directors’ Declaration 51 In the opinion of the Directors of Ampol Limited (the Company): a) the financial statements and notes that are contained in pages 58 to 111 and the Remuneration Report set out on pages 24 to 66 46 are in accordance with the Corporations Act 2001 (Cth), including 78 to 131 44 (i) giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its performance for the financial year ended on that date; and (ii) complying with Australian Accounting Standards, and the Corporations Regulations 2001; b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; c) at the date of this declaration, there are reasonable grounds to believe that the companies in the Ampol Group that are parties to the Deed of Cross Guarantee as identified in note F1 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the Deed of Cross Guarantee described in note F1, and d) a statement of compliance with International Financial Reporting Standards has been included in note A to the financial statements for the year ended 31 December 2020. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 (Cth) from the Managing Director and CEO and the Chief Financial Officer for the financial year ended 31 December 2020. Signed in accordance with a resolution of the Directors: Steven Gregg Chairman Matthew Halliday Managing Director & Chief Executive Officer Sydney, 22 February 2021 71 Annual Report 2020 Independent Auditor’s Report TO THE SHAREHOLDERS OF AMPOL LIMITED AMPOL LIMITED 2020 Annual Report 52 Independent Auditor’s Report To the shareholders of Ampol Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Ampol Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its financial performance for the year ended on that date; and The Financial Report comprises the: • Consolidated balance sheet as at 31 December 2020 • Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated cash flow statement for the year then ended • Notes including a summary of significant accounting policies • Directors’ Declaration. • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. 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 (including Independence Standards) (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: • Site remediation and dismantling provisions • Taxation of Singaporean entities • Impairment of non-current assets Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. 72 Ampol LimitedSite remediation and dismantling provisions (A$586.7m) Refer to Note C6 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s determination of the site remediation and dismantling provisions is considered a key audit matter. This is due to the inherent complexity in estimating the amounts and timing of future remediation and dismantling costs, particularly those forecast to be incurred several years in the future. This is influenced by:  Current environmental, regulatory and contractual requirements, and the impact of the completeness of environmental remediation activities incorporated into the provision estimate;   The expected environmental management strategy, and the nature of costs incorporated into the provision estimate; Third party expert advice obtained by management regarding their obligations and estimates of future costs;  Historical experience, and whether this is a reasonable predictor when evaluating forecast costs; and  The expected timing of the expenditure. Our procedures included: • Assessing the consistency of the basis for recognition and measurement of the provisions with environmental and regulatory requirements, contractual lease terms and the requirements of the accounting standards. • Reading the Group’s board minutes, litigation register and correspondence with regulatory authorities to identify legal environmental obligations and checking these were appropriately considered in the determination of the provisions. • Recalculating the mathematical accuracy for a sample of the provision calculations. • Comparing the expected timing of remediation work against the Group’s remediation plans or expected period of site operation which was determined with reference to the useful life of underlying site assets or site lease term. • Evaluating the completeness of the provisions by comparing the site listing for which a provision has been recognised to other internal and external records of Group sites. • Working with our environmental specialists, we: o evaluated the scope, competence, experience and objectivity of the Group’s internal and external experts; and o corroborated a sample of estimates used in the provision calculations to underlying evidence such as third party support and actual expenditure incurred by the Group. • Performing sensitivity analysis over key estimates and assumptions, including discount rate and inflation rate by making changes that we consider reasonably possible to assess the impact on the provision determined by management. 53 73 Annual Report 2020Independent Auditor’s Report (continued) TO THE SHAREHOLDERS OF AMPOL LIMITED AMPOL LIMITED 2020 Annual Report 54 Taxation of Singaporean entities (A$178.9m) Refer to Note E1 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s determination as to whether the earnings from its Singaporean entities are subject to income tax in Australia is a key audit matter. This is due to the judgement required in assessing the Group’s current estimate of taxation amounts, which required senior audit team member and tax specialist involvement. The critical elements of this were: • • The significant uncertainty surrounding the timing of resolution of the matter with the Australian Taxation Office (ATO) and the final tax rate that will be levied in respect of the Group’s Singaporean entities’ earnings; and The judgement in the Group’s current estimate of taxation by applying the Australian income tax rate of 30% to the Singaporean entities’ earnings, which may differ to the final tax that applies if the income is deemed to be non-assessable or only partially assessable in Australia. Our procedures included: • Working with our tax specialists to evaluate the estimate by: o o reading documentation received from the ATO as well as documentation prepared by the Group’s internal and external advisors; and updating our understanding of the issue, including the current status of discussions with the ATO, expected timing for resolution and the extent of any potential changes to the estimate. • Evaluating the disclosures of the Group, in particular disclosure of potential adjustments to future period income tax expense, by comparing them to our understanding of the matter. 74 Ampol LimitedImpairment of non-current assets (A$371.6m) Refer to Note C4 to the Financial Report The key audit matter How the matter was addressed in our audit Assessment of the recoverability of non-current assets associated with the Lytton refinery and Convenience Retail site CGUs was a key audit matter due to: • • the estimates and assumptions used in the cashflow projections, including the impact of COVID-19 on key assumptions, which form the basis of the recoverable amounts attributable to the CGUs require significant judgement; and the recognition of an impairment of $80m and $291.6m relating to the Lytton Refinery CGU and Convenience Retail site CGUs respectively. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: • Considering the appropriateness of and assessing the integrity of the impairment modelling used, including the accuracy of the underlying calculations. • Assessing the consistency of assumptions to the Group’s plan and strategy, past performance of the CGUs and information on key industry metrics, including the impact of COVID-19 on these metrics. • Considering the sensitivity of the models by varying key assumptions noted above. We did this to identify those assumptions at higher risk of bias or inconsistency in application to focus additional procedures, particularly in the context of the COVID-19 pandemic. • Working with our valuation specialists, we independently developed a discount rate range using market data for comparable entities, adjusted by risk factors specific to the CGUs. • Assessing the disclosures in the financial report using our understanding of the issues obtained from our testing and against the requirements of the accounting standards, including those made with respect to judgements and estimates. 55 75 Annual Report 2020Independent Auditor’s Report (continued) TO THE SHAREHOLDERS OF AMPOL LIMITED AMPOL LIMITED 2020 Annual Report 56 Other Information Other Information is financial and non-financial information in Ampol 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. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do 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. 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. 76 Ampol LimitedReport on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Ampol Limited for the year ended 31 December 2020, complies with Section 300A of the Corporations Act 2001. The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 24 to 46 of the Directors’ report for the year ended 31 December 2020. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Julian McPherson Partner Sydney 22 February 2021 57 77 Annual Report 2020Financial Statements Contents Primary statements Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Consolidated Statement of Changes In Equity Consolidated Cash Flow Statement Notes to the Financial Statements A Overview A1 Reporting entity A2 Basis of preparation A3 Use of judgement and estimates A4 Changes in significant accounting policies B Results for the year B1 Revenue and other income B2 Costs and expenses B3 Segment reporting B4 Earnings per share B5 Dividends C Operating assets and liabilities C1 Receivables C2 Inventories C3 Intangibles C4 Property, plant and equipment C5 Payables C6 Provisions D Capital, funding and risk management D1 Going concern, liquidity and interest-bearing liabilities D2 Risk management D3 Capital management D4 Fair value of financial assets and liabilities D5 Master netting or similar agreements D6 Issued capital E Taxation E1 Income tax benefit/(expense) E2 Deferred tax E3 Tax consolidation F Group structure F1 Controlled entities F2 Business combinations F3 Equity-accounted investees F4 Joint operations F5 Parent entity disclosures F6 Non-controlling interest disclosures G Other information G1 Commitments G2 Contingent liabilities G3 Related party disclosures G4 Key management personnel G5 Notes to the cash flow statement G6 Auditor remuneration G7 Net tangible assets per share G8 New standards and interpretations not yet adopted G9 Events subsequent to the end of the year 78 Ampol Limited 79 80 81 82 83 84 84 84 84 84 85 86 86 87 88 92 93 94 94 95 95 98 104 105 107 107 108 113 114 115 116 117 117 118 119 120 120 124 124 125 126 127 128 128 128 128 129 130 131 131 131 131 Consolidated Income Statement Consolidated Income Statement FOR THE YEAR ENDED 31 DECEMBER 2020 For the year ended 31 December 2020 Millions of dollars Revenue Cost of goods sold – historical cost Gross profit Other income Other expense Net foreign exchange gain Selling and distribution expenses General and administration expenses (Loss)/profit from operating activities Finance costs Finance income Net finance costs Share of net profit of entities accounted for using the equity method (Loss)/profit before income tax expense Income tax benefit/(expense) Net (loss)/profit (Loss)/profit attributable to: Equity holders of the parent entity Non-controlling interest Net (loss)/profit Basic and diluted (loss)/earnings per share Historical cost – cents per share - basic Historical cost – cents per share - diluted 59 2020 2019 15,406.3 22,307.1 (14,200.5) (20,388.7) 1,205.8 28.0 (434.8) 39.1 1,918.4 44.7 - 3.7 (1,125.7) (1,122.2) (339.6) (627.2) (109.7) 0.6 (109.1) 10.7 (725.6) 245.8 (479.8) (484.9) 5.1 (479.8) (194.2) (194.2) (207.3) 637.3 (121.0) 1.2 (119.8) 4.2 521.7 (137.9) 383.8 382.8 1.0 383.8 151.3 151.1 Note B1 B1 B2 B2 F3.2 E1 F6 B4 B4 The Consolidated Income Statement is to be read in conjunction with the notes to the Financial Statements. 79 Annual Report 2020 60 AMPOL Limited Annual Report 2020 Consolidated Statement of Comprehensive Income Consolidated Statement of Comprehensive Income FOR THE YEAR ENDED 31 DECEMBER 2020 For the year ended 31 December 2020 Millions of dollars (Loss)/profit for the period Other comprehensive income Note 2020 (479.8) Items that will not be reclassified to income statement: Actuarial (loss)/gain on defined benefit plans Tax on items that will not be reclassified to income statement E2.2 Total items that will not be reclassified to income statement Items that may be reclassified subsequently to income statement: Foreign operations – foreign currency translation differences Net change in fair value of net investment hedges Effective portion of changes in fair value of cash flow hedges Net change in fair value of cash flow hedges reclassified to income statement Tax on items that may be reclassified subsequently to income statement Total items that may be reclassified subsequently to income statement Other comprehensive (loss)/income for the period, net of income tax (0.4) 0.1 (0.3) (13.7) 1.6 24.0 (22.1) (2.0) (12.2) (12.5) 2019 383.8 3.6 (1.1) 2.5 11.0 (1.2) 4.5 (10.5) 2.1 5.9 8.4 Total comprehensive (loss)/income for the period (492.3) 392.2 Attributable to: Equity holders of the parent entity Non-controlling interest Total comprehensive (loss)/income for the period F6 (497.4) 5.1 (492.3) 391.2 1.0 392.2 The Consolidated Statement of Comprehensive Income is to be read in conjunction with the notes to the Financial Statements. 80 Ampol Limited Consolidated Balance Sheet Consolidated Balance Sheet AS AT YEAR ENDED 31 DECEMBER 2020 For the year ended 31 December 2020 Millions of dollars Current assets Cash and cash equivalents Receivables Inventories Other Total current assets Non-current assets Receivables Investments accounted for using the equity method Intangibles Property, plant and equipment Deferred tax assets Employee benefits Other Total non-current assets Total assets Current liabilities Payables Interest-bearing liabilities Current tax liabilities Employee benefits Provisions Total current liabilities Non-current liabilities Payables Interest-bearing liabilities Deferred tax liabilities Employee benefits Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Treasury stock Reserves Retained earnings Total parent entity interest Non-controlling interest Total equity (i) Refer to note A4 for further information. 61 Note 2020 2019(i) C1 C2 C1 F3 C3 C4 E2 C5 D1 C6 C5 D1 E2 C6 D6 F6 367.6 859.8 1,333.6 50.9 2,611.9 2.5 173.0 558.4 3,467.7 453.8 2.9 47.7 4,706.0 7,317.9 35.0 1,479.2 2,109.5 34.2 3,657.9 8.7 154.9 578.8 3,702.5 172.2 4.0 68.1 4,689.2 8,347.1 1,489.1 2,732.6 160.2 90.7 65.1 178.7 221.5 118.8 50.5 88.7 1,983.8 3,212.1 16.0 1,555.5 9.7 39.9 488.3 2,109.4 4,093.2 3,224.7 502.6 (1.6) 5.6 2,444.5 2,951.1 273.6 3,224.7 21.3 1,559.3 - 40.5 243.4 1,864.5 5,076.6 3,270.5 502.6 (2.0) 19.4 2,737.0 3,257.0 13.5 3,270.5 81 The Consolidated Balance Sheet is to be read in conjunction with the notes to the Financial Statements. Annual Report 2020 62 AMPOL Limited Annual Report 2020 Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity FOR THE YEAR ENDED 31 DECEMBER 2020 For the year ended 31 December 2020 Millions of dollars Balance at 1 January 2020 Total comprehensive income for the year (Loss)/profit for the year Total other comprehensive (loss)/income Total comprehensive (loss)/income for the year Ampol Property Trust – Divestment of Minority Interest, net of tax Ampol Property Trust – Distribution Own shares acquired net of tax Shares vested to employees Expense on equity settled transactions Dividends to shareholders Balance at 31 December 2020 Balance at 1 January 2019 Total comprehensive income for the year Profit for the year Total other comprehensive income/(loss) Total comprehensive income/(loss) for the year Own shares acquired net of tax Shares vested to employees Expense on equity settled transactions Dividends to shareholders Balance at 31 December 2019 Issued capital Treasury stock Foreign currency translation reserve Equity compen- sation reserve Hedging reserve Retained earnings Total Non- controlling interest Total equity 502.6 (2.0) 42.9 (5.0) (18.5) 2,737.0 3,257.0 13.5 3,270.5 – – – – – – – – – – – – – – (0.4) 0.8 – – – – – (484.9) (484.9) 5.1 (479.8) (12.1) (0.1) – (0.3) (12.5) – (12.5) (12.1) (0.1) – (485.2) (497.4) 5.1 (492.3) – – – – – – – – – – – – – – 0.1 (0.3) (1.4) 382.5 382.5 256.2 638.7 – – – – – (1.2) (1.2) (0.3) 0.5 (1.4) – – – (0.3) 0.5 (1.4) – (189.8) (189.8) – (189.8) 502.6 (1.6) 30.8 (5.1) (20.1) 2,444.5 2,951.1 273.6 3,224.7 524.9 (2.5) 33.1 (1.1) (20.8) 2,828.6 3,362.2 13.1 3,375.3 – – – – – – – – – – (4.3) 4.8 – – – – – – 382.8 382.8 1.0 383.8 9.8 (3.9) – 2.5 8.4 – 8.4 9.8 (3.9) – 385.3 391.2 1.0 392.2 – – – – – – – – – – 1.3 (4.8) 5.8 – – – – – (3.0) – 5.8 (237.9) (260.2) – – – – (3.0) – 5.8 (260.2) (239.0) (239.0) (0.6) (239.6) 502.6 (2.0) 42.9 (5.0) (18.5) 2,737.0 3,257.0 13.5 3,270.5 Shares bought back(i) (22.3) (i) 11,103,572 shares were bought back during the year ended 31 December 2019.  The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the Financial Statements. 82 Ampol Limited Consolidated Cash Flow Statement Consolidated Cash Flow Statement FOR THE YEAR ENDED 31 DECEMBER 2020 For the year ended 31 December 2020 63 Millions of dollars Cash flows from operating activities Receipts from customers Payments to suppliers, employees and governments Shares acquired for vesting employee benefits Dividends and distributions received Interest received Interest and other finance costs paid Income taxes paid Net operating cash inflows Cash flows from investing activities Net proceeds from sale of investment in joint operations Proceeds from sale of non-controlling interest in Ampol Property Trust Transaction costs from sale of non-controlling interest in Ampol Property Trust Note 2020 2019 23,267.0 30,419.3 (22,845.0) (29,385.6) (0.4) 1.8 0.3 (100.9) (55.2) 267.6 24.8 682.0 (26.8) (4.3) 0.5 1.3 (113.1) (73.8) 844.3 - - - G5.2 F4 Purchases of property, plant and equipment (140.3) (184.3) Major cyclical maintenance Purchases of intangibles Proceeds from sale of property, plant and equipment, net of selling costs Net investing cash inflows/(outflows) Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Repayment of lease principal Payments for shares bought back Distributions/dividends received/(paid) to non-controlling interest Dividends paid Net financing cash outflows Net increase in cash and cash equivalents Effect of exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period F6 B5 Cash and cash equivalents at the end of the period G5.1 (64.4) (21.9) 9.2 462.6 (48.0) (48.4) 141.7 (139.0) 9,675.9 10,486.4 (9,769.0) (10,556.1) (107.7) - (1.2) (189.8) (391.8) 338.4 (5.8) 332.6 35.0 367.6 (109.5) (260.2) (0.6) (239.0) (679.0) 26.3 2.6 28.9 6.1 35.0 The Consolidated Cash Flow Statement is to be read in conjunction with the notes to the Financial Statements. 83 Annual Report 2020 64 AMPOL Limited Annual Report 2020 A Overview Notes to the Financial Statements A Overview For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 A1 Reporting entity Ampol Limited (Ampol or the Company formerly Caltex Australia Limited) is a company limited by shares, incorporated and domiciled in Australia. The shares of Ampol are publicly traded on the Australian Securities Exchange. The Consolidated Financial Statements for the year ended 31 December 2020 comprise of the Company and its controlled entities (together referred to as the “Group”) and the Group’s interest in associates and jointly controlled entities. The Group is a for-profit entity and is primarily involved in the purchase, refining, distribution and marketing of petroleum products and the operation of convenience stores. A2 Basis of preparation The consolidated financial statements were approved by the Ampol Board on 22 February 2021. The financial report has been prepared as a general-purpose financial report and complies with the requirements of the Corporations Act 2001 (Cth) (Corporations Act) and Australian Accounting Standards (AASBs). The consolidated financial report also complies with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB). The consolidated financial report is prepared on the historical cost basis, except for derivative financial instruments, which are measured at fair value, and the defined benefit liability, which is recognised as the net total of the plan assets, plus unrecognised past service costs less the present value of the defined benefit obligation. The consolidated financial Report is presented in Australian dollars, which is the Group’s functional currency. The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 dated 24 March 2016. In accordance with that Instrument, amounts in the consolidated financial report and Directors’ Report have been rounded to the nearest hundred thousand dollars, unless otherwise stated. This is a change compared to the 2019 Annual Financial Report which presented to the nearest thousand. Comparative figures have been updated accordingly, to comply with the current period presentation. The Group has adopted all the mandatory amended Accounting Standards issued that are relevant to its operations and effective for the current reporting period. A number of new standards, amendments to standards and interpretations effective for annual periods beginning on or after 1 January 2021 have not been applied in preparing these Consolidated Financial Statements. Refer to note G8. A3 Use of judgement and estimates The preparation of a Consolidated Financial Report in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the Group, except as noted in section A4. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods if the revision affects both current and future periods. Judgements made by management in the application of AASBs that have a significant effect on the Consolidated Financial Report and estimates with a significant risk of material adjustment in future financial years are found in the following notes:  Information about the assumptions and the risk factors relating to impairment is provided in notes C1 (Receivables), C3 (Intangibles) and C4 (Property, Plant and Equipment).  Note C4 (Property, Plant and Equipment) includes disclosure of the key assumptions and sources of estimates related to lease liabilities.  Note C6 provides key sources of estimation, uncertainty and assumptions used in regard to estimation of provisions.  Note D1 provides consideration to the appropriateness of adopting the going concern basis in preparing the financial report, including the impacts of COVID-19 pandemic.  Note D2 provides an explanation of the foreign exchange, interest rate, credit risk and commodity price exposures of the Group and the risk in relation to foreign exchange, interest rate, credit risk and commodity price movements.  Note E1 provides information around the extent to which earnings from the Group’s Singaporean entities may be subject to income tax in Australia. 84 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements A Overview continued FOR THE YEAR ENDED 31 DECEMBER 2020 A4 Changes in significant accounting policies AASB 12 Deferred taxes on intangible assets The Group has adopted the International Financial Reporting Interpretations Committee final agenda decision on multiple tax consequences of recovering an asset. As a result, the Group recognises a deferred tax liability on the carrying amount of indefinite life acquired assets. Accordingly, the comparative information presented for 2019 has been restated as set out below. 65 Impacts on Financial Statements Impacts on change in accounting policy The change in accounting policy is summarised below: Millions of dollars Intangible assets Deferred tax liabilities There are no further impacts for the period. 2020 - - 2019 5.6 (5.6) 85 Annual Report 2020 66 AMPOL Limited Annual Report 2020 B Results for the year Notes to the Financial Statements B Results for the year For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 This section highlights the performance of the Group for the year, including revenue and other income, costs and expenses, results by operating segment, earnings per share and dividends. B1 Revenue and other income Revenue Sale of goods Revenue from the sale of goods in the ordinary course of activities is measured at the fair value of consideration received or receivable, net of product duties and taxes, rebates, discounts and allowances. Gross sales revenue excludes amounts collected on behalf of third parties such as goods and services tax (GST). Sales revenue is recognised when customers gain control, which is the date products are delivered to the customer. Contracts entered into by the Group for the sale of petroleum are typically priced by reference to quoted prices. In line with market practice, certain of these contracts are based on average prices over a period that is partially or entirely after delivery. Revenue relating to such contracts is recognised initially based on the estimated forward price at the time of delivery and subsequently adjusted as prices are finalised. Whilst these post-delivery adjustments are changed in the value of receivables, the distinction between revenue recognised at the time of delivery and revenue recognised as a result of post-delivery changes in quoted commodity prices relating to the same transaction is not considered to be significant. All revenue from these contracts, both that recognised at the time of delivery and that from post-delivery price adjustments, is disclosed as revenue from sale of goods. For contracts with variable considerations (i.e. changes in market price, quality and quantity variances), revenue is recognised to the extent that it is highly probable that a reversal of previously recognised revenue will not occur. Contract assets On 5 July 2018, Ampol Limited entered into a new supply agreement for 15 years with a one-off upfront payment of $50.0 million. This amount has been deferred and recognised against sale of goods over the life of the agreement. The closing balance as at 31 December 2020 in relation to this contract asset is $41.9 million (2019: $45.0 million). Other revenue Rental income from leased sites is recognised in the Consolidated Income Statement on a straight-line basis over the term of the lease. Franchise fee income is deferred and recognised in accordance with the substance of the agreement. Royalties are recognised in line with franchise agreements. Transaction and merchant fees are generated from AmpolCard and credit card transactions processed across the network. Dividend income is recognised at the date the right to receive payment is established. Other income Net gain on disposal of property, plant and equipment and sale of investment in joint operations The gain on disposal of property, plant and equipment and sale of investment in joint operations is brought to account at the time that:   the control of ownership of the property, plant and equipment and sale of investment in joint operations has been transferred to the buyer. the costs incurred, or to be incurred, in respect of the sale can be measured reliably; and Assets that are held for sale are carried at the lower of the net book value and fair value less cost to sell. Millions of dollars Revenue Sale of goods Other revenue Rental income Royalties and franchise income Transaction and merchant fees Other Total other revenue Total revenue Other income Government assistance(i) Net gain on sale of property, plant and equipment Net gain on sale of investment in joint operations Total other income 2020 2019 15,175.6 22,059.9 22.0 52.5 123.6 32.6 230.7 29.9 65.6 104.0 47.7 247.2 15,406.3 22,307.1 6.8 - 21.2 28.0 - 44.7 - 44.7 (i) Other income includes assistance from governments for wage support of $6.8 million received from Australia, New Zealand and Singapore government programs. 86 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements B Results for the year continued FOR THE YEAR ENDED 31 DECEMBER 2020 B2 Costs and expenses Finance costs are recognised as incurred unless they relate to qualifying assets. Qualifying assets are assets which take more than 12 months to get ready for their intended use or sale. In these circumstances, finance costs are capitalised to the cost of the assets. Where borrowings are not specific to an asset, finance costs are capitalised using an average rate based on the general borrowings of the Group. 67 Millions of dollars Finance costs Interest expense Finance charges on leases Unwinding of discount on provisions Less: capitalised finance costs Finance costs Finance income Net finance costs Depreciation and amortisation Depreciation of: Buildings Leasehold property Plant and equipment Amortisation of: Intangibles Total depreciation and amortisation Personnel expenses Other expenses Net loss on disposal of property, plant and equipment Impairment of non-current assets Total other expenses Note 2020 2019 43.4 57.2 9.4 (0.3) 109.7 (0.6) 109.1 18.2 148.1 228.0 394.3 27.9 422.2 578.4 21.4 413.4 434.8 C4 C4 C4 C3 C3,C4 53.7 58.6 8.8 (0.1) 121.0 (1.2) 119.8 16.0 133.6 210.6 360.2 27.1 387.3 527.1 - - - 87 Annual Report 2020 68 AMPOL Limited Annual Report 2020 B Results for the year (continued) Notes to the Financial Statements B Results for the year continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 B3 Segment reporting B3.1 Segment disclosures An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. These segments align to the areas of the business for which discrete financial information is available. Segment results that are reported to the chief operating decision maker include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Inter-entity sales are recognised based on an internally set transfer price. Sales between segments are based on arm’s length principles appropriate to reflect prevailing market pricing structures at that time. Where possible, relevant import parity pricing is used to determine arm’s length pricing between the two segments. Revenue from external parties reported to the chief operating decision maker is measured in a manner consistent with that in the Consolidated Income Statement. Income taxes and net financial costs are dealt with at a Group level and not within the reportable segments. The performance of each reportable segment is measured based on segment replacement cost of sales operating profit before interest and income tax excluding significant items. This measurement base excludes the impact of the rise or fall in oil or product prices (key external factors) and presents a clearer picture of the reportable segments' underlying business performance. Segment replacement cost of sales operating profit before interest and income tax excluding significant items is measured as management believes that such information is most useful in evaluating the performance of the differing internal business units relative to each other, and other like business units in the industry. Segment replacement cost of sales operating profit excluding significant items, interest and income tax is also used to assess the performance of each business unit against internal performance measures. Cost of goods sold measured on a replacement cost basis Cost of goods sold measured on a replacement cost basis excludes the effect of inventory gains and losses, including the impact of exchange rate movements. Inventory gains or losses arise due to movements in the landed price of crude oil and product prices and represent the difference between the actual historic cost of sales and the current replacement value of that inventory. The net inventory gain or loss is adjusted to reflect the impact of contractual revenue lags. Types of products and services The following summary describes the operations in each of the Group's reportable segments: Convenience Retail The Convenience Retail segment includes revenues and costs associated with fuels and shop offerings at Ampol’s network of stores, including royalties and franchise fees on remaining franchise stores. Fuels and Infrastructure The Fuels and Infrastructure segment includes revenues and costs associated with the integrated wholesale fuels and lubricants supply for the Group, including the Company’s international businesses. This includes Lytton refining, Bulk Fuels sales, Trading and Shipping, Infrastructure, and the Gull and Seaoil businesses. Transfer price between segments The Group operates as a vertically integrated supply chain including trading and shipping, infrastructure, refining and marketing of fuel products in Australia and internationally to customers, including retail service stations. Segment results are based on commercial pricing between segments, most notably Fuels and Infrastructure and Convenience Retail, that is determined by a reference to relevant import parity prices for refining output and other commercial arrangements between the business segments. 88 Notes to the Financial StatementsAmpol Limited 69 Notes to the Financial Statements B Results for the year continued FOR THE YEAR ENDED 31 DECEMBER 2020 B3 Segment reporting continued B3.2 Information about reportable segments Convenience Retail Fuels and Infrastructure Total operating segments Millions of dollars 2020 2019 2020 2019 2020 2019 External segment revenue 4,067.4 5,201.1 11,338.9 17,106.0 15,406.3 22,307.1 Inter-segment revenue - - 2,176.1 3,611.0 2,176.1 3,611.0 Total segment revenue 4,067.4 5,201.1 13,515.0 20,717.0 17,582.4 25,918.1 Share of profit of associates and joint ventures - - 10.7 4.2 10.7 4.2 Depreciation and amortisation (210.2) (194.3) (183.4) (177.0) (393.6) (371.3) Replacement Cost of sales Operating Profit (RCOP) before interest and income tax(i) Other material items: Inventory loss Capital expenditure(ii) 287.4 201.0 154.4 450.2 441.8 651.2 - - (62.1) (100.7) (513.8) (135.1) (19.3) (155.2) (513.8) (197.2) (19.3) (255.9) (i) Replacement Cost of sales Operating Profit (RCOP) (on a pre- and post-tax basis) is a non-International Financial Reporting Standards (IFRS) measure. It is derived from the statutory profit adjusted for inventory (losses)/gains as management believes this presents a clearer picture of the Group’s underlying business performance as it is consistent with the basis of reporting commonly used within the global downstream oil industry. This is un-audited. RCOP excludes the unintended impact of the fall or rise in oil and product prices (key external factors). It is calculated by restating the cost of sales using the replacement cost of goods sold rather than the historical cost, including the effect of contract-based revenue lags. (ii) Capital expenditure includes the purchase of Property, Plant and Equipment (including acquisitions) and purchase of intangible software (excludes intangible rights and licences). B3.3 Reconciliation of reportable segment revenues, profit or loss and other material items Millions of dollars Revenues Total revenue for reportable segments Elimination of inter-segment revenue Consolidated revenue Profit or loss Segment RCOP before interest and income tax, excluding significant items Other expenses RCOP before interest and income tax, excluding significant items Significant items excluded from profit or loss reported to the chief operating decision maker: Impairment of non-current assets Ampol rebranding expense Higher and Better Use sites Gain on sale of investment in joint operation Other expenses Other income Significant items before tax RCOP before interest and income tax Inventory loss before tax Consolidated historical cost (loss)/profit before interest and income tax 2020 2019 17,582.4 25,918.1 (2,176.1) (3,611.0) 15,406.3 22,307.1 441.8 (40.6) 401.2 (413.4) (65.6) (16.9) 21.2 (36.0) 6.8 (503.9) (102.7) (513.8) (616.5) 651.2 (43.1) 608.1 - - 52.7 - - - 52.7 660.8 (19.3) 641.5 89 Annual Report 2020 70 AMPOL Limited Annual Report 2020 B Results for the year (continued) Notes to the Financial Statements B Results for the year continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 B3 Segment reporting continued B3.3 Reconciliation of reportable segment revenues, profit or loss and other material items continued Millions of dollars Net financing costs Consolidated (loss)/profit before income tax RCOP income tax expense Significant items tax benefit/(expense) Inventory loss tax benefit Consolidated historical cost income tax benefit/(expense) Net (loss)/profit 2020 2019 (109.1) (725.6) (75.2) 166.9 154.1 245.8 (479.8) (119.8) 521.7 (143.5) (0.2) 5.8 (137.9) 383.8 Significant Items Impairment of non-current assets The Group has recognised a total impairment loss of $413.4 million on non-current assets. These impairments relate to the Lytton refinery cash-generating unit (CGU) of $80.0 million at 30 June 2020, Convenience Retail site CGU of $233.0 million at 30 June 2020 and a further $58.6 million at 31 December 2020 and other specific assets of $41.8 million. This impairment loss has been disclosed in other expenses in the Consolidated Income Statement. Refer to note C3 and note C4 for further information. Ampol rebranding expense The Group has recognised an expense of $65.6 million in respect to rebranding due to its contractual obligation to remove Caltex signage and install Ampol branding at sites owned by a third party ($46.0 million), accelerated depreciation ($10.8 million) and other operating expenses ($8.8 million). This expense is included within general and administration expenses for $54.8 million and selling and distribution for $10.8 million in the Consolidated Income Statement. Higher and Better Use sites In 2019, the Group recognised a net gain of $52.7 million on sale from the divestment of the 25 Higher and Better Use (HBU) sites after environmental remediation. The environmental remediation activity commenced in 2020 and a reassessment of the remediation provision was undertaken as at 31 December 2020. This resulted in recognition of an additional provision of $16.9 million. This expense has been disclosed in other expenses in the Consolidated Income Statement. Gain on sale of investment in joint operation On 1 October 2020, the Group sold its investment in the Sydney Joint User Hydrant Installations (JUHI) for proceeds of $24.8 million and a net accounting gain of $21.2 million. The net gain is included within other income in the Consolidated Income Statement. Refer to note F4 for further information. Other expenses Site remediation provision The impairment of the non-current other specific assets discussed in note C4, includes the impact of the divestment of Convenience Retail and Depot sites. An environmental remediation provision of $32.3 million has been recognised in respect of the cost of remediating these sites for alternative use. This expense is included within general and administration expenses in the Consolidated Income Statement. Provision for doubtful debts The provision for doubtful debt has increased by $3.7 million as a result of the expected impact on Ampol customers from COVID-19. This expense is included within general and administration expenses in the Consolidated Income Statement. Other Income Assistance from government Other income includes assistance from governments for wage support of $6.8 million received from Australia, New Zealand and Singapore government programs. This income is included within other income in the Consolidated Income Statement. Significant items tax benefit Significant items tax benefit of $151.2 million represents tax at the Australian corporate tax rate of 30% on Significant items before tax (2019 expense: $0.2 million) and utilisation of previously unrecognised capital losses (tax benefit of $15.7 million) which has been applied to a capital gain on the sale of the 49% interest in 203 freehold Convenience Retail sites with a Charter Hall and GIC consortium. 90 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements B Results for the year continued FOR THE YEAR ENDED 31 DECEMBER 2020 B3 Segment reporting continued B3.3 Reconciliation of reportable segment revenues, profit or loss and other material items continued Other material items 71 Millions of dollars Other material items 2020 Depreciation and amortisation Inventory loss Capital expenditure Other material items 2019 Depreciation and amortisation Inventory loss Capital expenditure Reportable segment totals Consolidated totals Other (393.6) (513.8) (197.2) (371.3) (19.3) (255.9) (28.7) - (29.4) (422.3) (513.8) (226.6) (16.1) (387.4) - (19.3) (14.3) (270.2) B3.4 Geographical segments The Group operates in Australia, New Zealand, United States and Singapore. External revenue is predominantly generated in Australia. The Group generated the following revenue and holds the following non-current assets across the geographical segments. Millions of dollars Australia New Zealand Singapore US Total 2020 Revenue Non-current assets 12,016.7 4,267.8 572.2 414.7 2,793.2 24.2 15,406.3 22.7 0.8 4,706.0 Millions of dollars Australia New Zealand Singapore US Total 2019 Revenue Non-current assets 18,933.2 4,270.2 623.2 397.9 2,750.7 21.1 - - 22,307.1 4,689.2 B3.5 Major customer Revenues from one customer of the Group's Fuels and Infrastructure segment represent approximately $2.6 billion (2019: $4.3 billion) of the Group's total gross sales revenue (excluding product duties and taxes). B3.6 Revenue from products and services Millions of dollars Petrol Diesel Jet Lubricants Specialty and other products Crude Non-fuel income Other revenue 2020 4,559.0 7,397.6 860.6 201.4 155.5 903.0 1,098.5 230.7 2019 7,226.3 10,246.1 2,688.8 229.2 221.7 563.0 884.8 247.2 Total product and service revenue 15,406.3 22,307.1 91 Annual Report 2020 72 AMPOL Limited Annual Report 2020 B Results for the year (continued) Notes to the Financial Statements B Results for the year continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 B4 Earnings per share Cents per share Historical cost net (loss)/profit attributable to ordinary shareholders – basic Historical cost net (loss)/profit attributable to ordinary shareholders – diluted RCOP after tax and excluding significant items – basic RCOP after tax and excluding significant items – diluted 2020 (194.2) (194.2) 84.8 84.8 2019 151.3 151.1 135.9 135.7 Calculation of earnings per share Basic historical earnings per share is calculated as the net loss attributable to ordinary shareholders of the parent entity divided by the weighted average number of ordinary shares outstanding during the year ended 31 December 2020. Diluted historical cost earnings per share is calculated as the profit attributable to ordinary shareholders of the parent entity divided by the weighted average number of ordinary shares which has been adjusted to reflect the number of shares that would be issued if all outstanding rights and restricted shares were exercised. When the Company has made a loss, basic and diluted earnings per share are calculated using the same weighted average number of ordinary shares and exclude all outstanding rights and restricted shares on issue as to include them in the calculation of diluted earnings per share would result in a lower loss per share. Earnings per share has been disclosed for both the historical cost net loss as well as the RCOP segment method of reporting net profit. The RCOP segment method, adjusts statutory profit for significant items and inventory gains and losses. A reconciliation between historical cost net profit attributable to ordinary shareholders of the parent entity and RCOP after tax and excluding significant items is included below. Millions of dollars Net (loss)/profit after tax attributable to equity holders of the parent entity Add/Less: Significant items loss/(gains) after tax Add/Less: Inventory losses after tax RCOP excluding significant items after tax Weighted average number of shares (millions) Issued shares as at 1 January Shares bought back and cancelled Issued shares as at 31 December Weighted average number of shares as at 31 December - basic Weighted average number of shares as at 31 December - diluted 2020 (484.9) 337.0 359.7 211.8 2020 249.7 - 249.7 249.7 249.7 2019 382.8 (52.5) 13.5 343.8 2019 260.8 (11.1) 249.7 253.0 253.4 92 Notes to the Financial StatementsAmpol Limited   Notes to the Financial Statements B Results for the year continued FOR THE YEAR ENDED 31 DECEMBER 2020 B5 Dividends A provision for dividends payable is recognised in the reporting period in which the dividends are declared, for the entire undistributed amount. B5.1 Dividends declared or paid Dividends recognised in the current year by the Group are: 73 Millions of dollars 2020 Interim 2020 Final 2019 Total amount 2019 Interim 2019 Final 2018 Total amount Date of payment Franked/ unfranked Cents per share Total amount 2 October 2020 3 April 2020 Franked Franked 4 October 2019 5 April 2019 Franked Franked 25 51 76 32 61 93 62.4 127.4 189.8 79.9 159.1 239.0 Subsequent events Since 31 December 2020, the Directors declared the following dividend. The dividend has not been provided for and there are no income tax consequences for the Group in relation to 2020. Final 2020(i) 1 April 2021 Franked 23 54.8 (i) The final dividend was calculated based on the ordinary shares on issue post the Off-market Buy-back of 238.3 million (a reduction of 11.4 million) which closed on 22 January 2021. B5.2 Dividend franking account Millions of dollars 30% franking credits available to shareholders of Ampol Limited for subsequent financial years 2020 2019 777.1 825.5 The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact on the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability, is to reduce the balance by $23.5 million (2019: $54.6 million). 93 Annual Report 2020 74 AMPOL Limited Annual Report 2020 C Operating assets and liabilities Notes to the Financial Statements C Operating assets and liabilities For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 This section provides information on the assets used to generate the Group’s trading performance and the liabilities incurred as a result. C1 Receivables The following balances are amounts due from the Group’s customers and others. Millions of dollars Current Trade debtors Accrued receivables Allowance for impairment Associated and joint venture entities Derivative assets Other debtors Total current receivables Non-current Other loans 2020 2019 493.1 98.4 (8.6) 44.1 22.0 210.8 859.8 821.1 433.2 (6.4) 33.4 11.0 186.9 1,479.2 2.5 8.7 Receivables are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost less impairment losses. Impairment testing is performed at reporting date. A provision for impairment losses is raised based on a risk matrix for expected credit losses across customer categories. Impaired receivables As at 31 December 2020, current trade receivables of the Group with a nominal value of $8.6 million (2019: $6.4 million) were provided for as impaired based on the expected credit loss model. No collateral is held over these impaired receivables. As at 31 December 2020, trade receivables of $11.5 million (2019: $37.1 million) were overdue. The ageing analysis of receivables is as follows: Millions of dollars Past due 0 to 30 days Past due 31 to 60 days Past due greater than 60 days Total impaired receivables Movements in the allowance for impairment of receivables are as follows: Millions of dollars At 1 January Provision for impairment recognised during the year Receivables written off during the year as uncollectible Balance at 31 December 2020 11.5 - - 11.5 2020 6.3 4.7 (2.4) 8.6 2019 26.7 4.7 5.7 37.1 2019 7.0 3.6 (4.2) 6.4 The creation and release of the provision for impaired receivables has been included in general and administration expenses in the Income Statement. Amounts charged to the allowance account are written off when there is no expectation of recovering additional cash. The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on the credit history of these other classes, it is expected that these amounts will be received when due. 94 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C2 Inventories Millions of dollars Crude oil and raw materials Inventory in process Finished goods Materials and supplies Balance at 31 December 75 2020 389.8 50.8 869.9 23.1 2019 409.9 72.4 1,605.4 21.8 1,333.6 2,109.5 Inventories are measured at the lower of cost and net realisable value. Cost is based on the first in first out (FIFO) principle and includes direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure incurred in acquiring the inventories and bringing them into their existing location and condition. The amount of any write-down or loss of inventory is recognised as an expense in the period it is incurred. Inventory write-downs may be reversed when net realisable value increases subsequent to initial write-down. The reversal is limited to the original write- down amount. There was no inventory written down to net realisable value at 31 December 2020 and 31 December 2019. C3 Intangibles Millions of dollars Cost At 1 January 2020 Additions and transfers Disposals Foreign currency translation Balance at 31 December 2020 Cost At 1 January 2019 Additions and transfers Disposals Foreign currency translation Change in accounting policy(i) Balance at 31 December 2019 Amortisation and impairment At 1 January 2020 Amortisation for the year Impairment losses(ii) Disposals Foreign currency translation Balance at 31 December 2020 Amortisation and impairment At 1 January 2019 Amortisation for the year Disposal Goodwill Rights and licences Software Total 430.7 - - (5.5) 425.2 426.9 - (3.7) 1.9 5.6 87.5 16.0 (5.1) (1.0) 97.4 77.1 10.4 - - - 254.9 22.6 - - 773.1 38.6 (5.1) (6.5) 277.5 800.1 217.7 38.0 (0.9) 0.1 - 721.7 48.4 (4.6) 2.0 5.6 430.7 87.5 254.9 773.1 (19.5) - - - - (40.4) (7.7) - - 0.1 (134.4) (194.3) (20.2) (20.1) - 0.5 (27.9) (20.1) - 0.6 (19.5) (48.0) (174.2) (241.7) (19.5) - - (36.6) (3.8) - (111.4) (23.3) 0.3 (167.5) (27.1) 0.3 Balance at 31 December 2019 (19.5) (40.4) (134.4) (194.3) (i) Refer to note A4 for further information. (ii) Refer to note C4 (Impairment - Other specific assets) for further information. 95 Annual Report 2020 76 AMPOL Limited Annual Report 2020 C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C3 Intangibles continued Millions of dollars Carrying amount At 1 January 2020 Balance at 31 December 2020 Carrying amount At 1 January 2019 Balance at 31 December 2019 Goodwill Rights and licences Software Total 411.2 405.7 407.4 411.2 47.1 49.4 40.5 47.1 120.5 103.3 106.3 120.5 578.8 558.4 554.2 578.8 The amortisation charge of $27.9 million (2019: $27.1 million) is recognised in selling and distribution expenses and general and administration expenses in the Income Statement. Goodwill Goodwill arising on the acquisition of subsidiaries is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is tested annually for impairment. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the associate. Other intangible assets Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation Amortisation is charged to the Consolidated Income Statement on a straight-line basis over the estimated useful lives of intangible assets. Other intangible assets are amortised from the date they are available for use. The estimated useful lives in the current and comparative periods are reflected by the following amortisation percentages: Software development Software not integrated with hardware Rights and licences 7 to 17% 7 to 18% 4 to 33% Impairment The carrying amounts of intangible assets are reviewed to determine if there is any indication of impairment. If any such indication exists, the cash-generating unit’s recoverable amounts are estimated and, if required, an impairment is recognised in the Income Statement. There was impairment loss of $20.1 million recognised in the Income Statement in 2020 for software as detailed in note C4 Impairment other specific assets. Carrying value assessment of cash-generating unit groups containing goodwill and indefinite life intangibles The Group tests the carrying amount of intangible assets for impairment to ensure they are not carried at above their recoverable amounts at least annually for goodwill with indefinite lives and where there is an indication that the assets may be impaired. As a result of the impact of COVID-19 on the Group’s business and the external operating environment it was determined that there were indicators of impairment and accordingly the recoverable amount of CGU Groups have been estimated. Goodwill and indefinite life intangibles have been allocated to the group of CGUs as follows: Total goodwill and indefinite life intangibles Millions of dollars Goodwill Indefinite life intangibles Balance at 31 December 2020 Gull New Zealand Fuels and Infrastructure other Convenience Retail 224.3 20.1 244.4 68.2 1.1 69.3 113.2 - 113.2 Total 405.7 21.2 426.9 The recoverable amount of the group of CGUs including goodwill and indefinite life intangibles has been determined based on a value- in-use calculation. There were no goodwill impairment losses recognised during the year ended 31 December 2020 (2019: nil). 96 Notes to the Financial StatementsAmpol Limited 77 Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C3 Intangibles continued Carrying value assessment of cash-generating unit groups containing goodwill and indefinite life intangibles continued Key assumptions used in value-in-use calculations Key assumption Cash flow Basis for determining value-in-use assigned to key assumption Estimated future cash flows are based on the Group’s most recent best estimate of cash flows covering a five-year plan period from 2021 to 2025. Cash flows beyond the period in 2025 are extrapolated using estimated long-term growth rates. Estimated long-term average growth rate The cash flows have been extrapolated using a constant growth rate of: Discount rate Australia and New Zealand 2.5%. The growth rates used do not exceed the long-term growth rate for the industry. Pre-tax discount rates used vary depending on the nature of the business and the country of operation. The cash flows have been discounted using post-tax discount rates of 7.08% to 11.82% and pre-tax discount rates of 10.19% to 16.00% p.a. Sensitivities Determining recoverable amount requires the exercise of significant judgements for both internal and external factors. Changes in the long-term view of both internal and external judgements may impact the estimated recoverable value. The recoverable amount of the CGU Groups containing goodwill and indefinite life intangibles would equal its carrying amount if any of the following key assumptions were to change: CGU Groups Gull New Zealand Key assumptions Cash contributions reduce by 44% for each year modelled Post-tax discount rate increases from 8.3% to 13.0% Fuels and Infrastructure other Cash contributions reduce by 38% for each year modelled Post-tax discount rate increases from 8.5% to 12.1% Convenience Retail Cash contributions reduce by 25% for each year modelled Post-tax discount rate increases from 7.1% to 8.9% 97 Annual Report 2020 78 AMPOL Limited Annual Report 2020 C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment Millions of dollars Freehold land At cost Accumulated impairment losses Net carrying amount Buildings At cost Accumulated depreciation and impairment losses Net carrying amount Leasehold property At cost Accumulated depreciation and impairment losses Net carrying amount Plant and equipment At cost Accumulated depreciation and impairment losses Net carrying amount Capital projects in progress At cost Net carrying amount Total net carrying amount 2020 2019 455.5 (70.1) 385.4 764.9 (326.6) 438.3 1,331.7 (379.7) 952.0 458.8 (37.3) 421.5 780.7 (287.9) 492.8 1,223.8 (250.3) 973.5 6,091.6 5,942.2 (4,636.9) (4,403.0) 1,454.7 1,539.2 237.3 237.3 275.5 275.5 3,467.7 3,702.5 Owned assets Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labour and an appropriate proportion of production overheads. The cost of property, plant and equipment includes the cost of decommissioning and restoration at the end of their economic lives if a present legal or constructive obligation exists. More details of how this cost is estimated and recognised is contained in note C6. Subsequent expenditure Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for separately, including cyclical maintenance, is capitalised. Other subsequent expenditure is capitalised only when it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be reliably measured. All other expenditure is recognised in the Consolidated Income Statement as an expense as incurred. Major cyclical maintenance Major cyclical maintenance expenditure is separately capitalised as an asset component to the extent that it is probable that future economic benefits, in excess of the originally assessed standard of performance, will eventuate. All other such costs are expensed as incurred. Capitalised cyclical maintenance expenditure is depreciated over the lesser of the additional useful life of the asset or the period until the next major cyclical maintenance is scheduled to occur. Depreciation Items of property, plant and equipment, including buildings and leasehold property but excluding freehold land, are depreciated using the straight-line method over their expected useful lives. Leasehold improvements are amortised over the shorter of the lease term or useful life. 98 Notes to the Financial StatementsAmpol Limited 79 Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued The depreciation rates used in the current and prior year for each class of asset are as follows: Freehold buildings Leasehold property Plant and equipment Leased plant and equipment 2% 2% to 10% 3% to 25% 3% to 25% Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and held ready for use. Impairment of non-current assets Carrying value assessment cash-generating units The carrying amounts of assets are reviewed to determine if there is an indication of impairment. These tests for impairment are performed by assessing the recoverable amount of each individual asset or, if this is not possible, then the recoverable amount of the CGU to which the asset belongs. CGUs are the lowest levels at which assets are grouped and generate separately identifiable cash flows. If any such indicator exists, the CGU recoverable amounts are estimated and, if required, an impairment is recognised in the Income Statement. Impairment Lytton refinery cash-generating unit The global hydrocarbon demand weakness due to government travel restrictions arising from the COVID-19 pandemic, including the impact on regional refiner margins and global trade balances, has impacted the profitability of Lytton refinery. With refiner margins near historic low levels and hydrocarbon demand weakness globally and in Australia, the Group has assessed the recoverable amount of its Lytton refinery CGU. 30 June 2020 The Group determined the recoverable amount of its Refinery assets with the assessment determining that the carrying value of the refinery was $80 million in excess of its recoverable amount at 30 June 2020. An impairment loss of $80.0 million was recognised with respect to plant and equipment at 30 June 2020. The loss has been recognised in other expenses in the Consolidated Income Statement. 31 December 2020 The Group re-assessed the recoverable amount of its Refinery assets as at 31 December 2020 using a discounted value-in-use cash-flow analysis. The analysis uses cash flows projected over a ten-year useful life with a discount rate of 8.07% post-tax (pre-tax of 16.00%). Based on this assessment it was determined the carrying value of the refinery (post the 30 June 2020 impairment loss) was supported by the recoverable amount. Determining recoverable amount requires the exercise of significant judgement for both internal and external factors. This includes but is not limited to external foreign exchange forecasts and reference to industry-specific external analyst forecasts of regional refiner margins. Judgements for internal factors, including but not limited to applicable discount rate, production volumes, wage growth and, other operating costs, have been made with reference to historical data and forward-looking business plans. Assumptions have been risk adjusted as appropriate to take account of the inherent uncertainty of the future operating environment and market conditions impacting Lytton refinery, arising from the COVID-19 pandemic. On 8 October 2020, the Group announced it is undertaking a comprehensive review of the Lytton refinery to determine the best operating model over the medium-term. The review is considering all options for the facility’s operations and for the connected supply chains and markets it serves and will be completed in the first half of 2021. The assessment of the recoverable amount of the refinery assets was based on the refinery producing at historic production levels, albeit the Group will continue to evaluate make versus buy decisions based on prevailing market conditions. The Group believes that market conditions for refining will continue to be highly uncertain, with the COVID-19 pandemic continuing to impact current conditions and outlook. Any decisions with respect to the refinery operations may impact future assessments of the recoverability of non-current assets relating to Lytton refinery, and these will be assessed when the review is completed in the first half of 2021. Sensitivities Changes in the long-term view of both internal and external judgements may impact the estimated recoverable value. The discounted cash flows are most sensitive to the following assumptions: Key assumption Long-term refining margins decreasing by US$1/bbl over a ten-year period Foreign exchange rate (USD/AUD) increasing by 1 cent Reduction over a ten-year period in annual production volume by 100ML for each year modelled Discount rate increase by 1% Impact on impairment assessment ~$237 million +/- ~$30 million +/- ~$35 million +/- ~$25 million +/- 99 Annual Report 2020 80 AMPOL Limited Annual Report 2020 C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued Impairment of non-current assets continued Carrying value assessment cash-generating units continued Impairment Convenience Retail site CGUs The impact of demand reduction due to the uncertainty introduced by COVID-19 indicated that the assets at the site CGU level may be impaired and caused the Group to assess the recoverability of the carrying value of CGUs for Convenience Retail sites. 30 June 2020 The Group determined the recoverable amount of the site level CGU assets with the assessment determining that the carrying value of the Convenience Retail site assets was $233.0 million in excess of its recoverable amount at 30 June 2020. An impairment loss of $233.0 million was recognised with respect to property, plant and equipment at 30 June 2020. The loss has been recognised in other expenses in the Consolidated Income Statement. 31 December 2020 The Group re-assessed the recoverable amount of the site level CGU assets as at 31 December 2020 by using a value-in-use discounted cash flow analysis. The analysis uses cash flow forecasts based on a five-year period. The forecasts have been risk adjusted to reflect the uncertainty around the timing and level of recovery from the impact of COVID-19. Cash flows beyond this period have been extrapolated using a long-term growth rate of 2.5%. Cash flow forecast, for leased site assets are consistent with the term of the lease assessed under AASB 16. The recoverable amount of the CGUs was based on its value-in-use (with a discount rate of 7.08% post-tax and pre-tax of 10.19%). Based on this assessment at 31 December 2020 it was determined that the carrying value of the Convenience Retail site assets (post 30 June impairment loss) was $58.6 million in excess of its recoverable amount. An impairment loss of $58.6 million was recognised with respect to property, plant and equipment with a full year 2020 impairment loss of $291.6 million. The 2020 impairment loss has been recognised in other expenses in the Consolidated Income Statement. Despite the challenges of the current environment, the fundamentals of Convenience Retail business remain strong with the Convenience Retail CGU Group carrying value including goodwill assessed above its recoverable amount following recognition of the site CGU impairments. Determining recoverable amount requires the exercise of significant judgements for both internal and external factors. Judgements for external factors, including but not limited to fuel margin has been made with reference to historical data and observable market data. Judgements for internal factors, including but not limited to applicable discount rate, sale volumes, shop contribution, wage growth and other operating costs have been made with reference to historical data and risk adjusted forward looking business plans given the uncertainty caused by the COVID-19 pandemic. Sensitivities Changes in the long-term view of both internal and external judgements may impact the estimated recoverable value. The discounted cash flows are most sensitive to the following assumptions: Key assumption EBIT reduction by 10% Long-term growth rate reduction by 1% Discount rate increase by 1% Impact on impairment assessment for site level CGU’s ~$22 million ~$10 million ~$21 million Impairment other specific assets COVID-19 has had a significant impact on the operating environment and financial outlook for the Group. A review of company priorities across projects and future investment has been undertaken, to ensure a clearer focus on the organisational priorities post the COVID-19 impact. This has included ceasing IT projects and identifying Convenience Retail and Depot sites to be closed and divested. Based on this assessment it was determined that an asset write down of $41.8 million was required in respect of software intangible assets ($20.1 million), buildings and plant and equipment ($21.7 million). 100 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued Millions of dollars Freehold land Carrying amount at the beginning of the year Additions Disposals Impairment losses Transfers from capital projects in progress Foreign currency translation Carrying amount at the end of the year Buildings Carrying amount at the beginning of the year Additions Disposals Impairment losses Transfers from capital projects in progress Depreciation Foreign currency translation Carrying amount at the end of the year Leasehold property Carrying amount at the beginning of the year Additions Disposals Impairment losses Transfers from capital projects in progress Depreciation Foreign currency translation Carrying amount at the end of the year Plant and equipment Carrying amount at the beginning of the year Additions Disposals Impairment losses Transfers from capital projects in progress Depreciation Foreign currency translation Carrying amount at the end of the year Capital projects in progress Carrying amount at the beginning of the year Additions Borrowing costs capitalised Transfers to property, plant and equipment and intangible assets Reclassification Carrying amount at the end of the year 81 2020 2019 421.5 1.8 (4.5) (32.8) 0.8 (1.4) 385.4 492.8 0.3 (9.5) (44.4) 17.4 (18.2) (0.1) 438.3 973.5 207.0 (4.7) (85.6) 10.4 428.2 8.6 (15.8) - 0.5 - 421.5 509.0 - (23.1) - 22.9 (16.0) - 492.8 998.4 93.7 (0.6) - 15.6 (148.1) (133.6) (0.5) 952.0 - 973.5 1,539.2 1,573.6 255.6 (2.3) (230.5) 121.3 (228.0) (0.6) 1,454.7 275.5 128.1 0.3 26.2 (28.5) - 178.9 (210.6) (0.4) 1,539.2 274.4 195.2 (0.1) (166.6) (217.9) - 237.3 23.9 275.5 101 Annual Report 2020 82 AMPOL Limited Annual Report 2020 C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued C4.1 Leased assets Definition of a lease At the inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. At inception or on reassessment of a contract that contains a lease and non-lease component, the Group allocates the consideration in the contract to each lease and non-lease component on the basis of their relative stand-alone prices. Non-lease components are items that are not related to securing the use of the underlying asset. The Group as a lessee The Group leases many assets including and predominantly related to property leases for service stations, terminals, pipelines and wharves. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost. The cost comprises:     the amount of the initial measurement of the lease liability; lease payments made at or before commencement, less lease incentive (if any); initial direct costs incurred, including legal fees, agency fees or other fees in relation to negotiation or arrangement of the lease and estimated costs to be incurred in restoring the asset as required by the terms and conditions of the lease. The right-of-use asset is subsequently measured at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. The right-of-use assets are depreciated to the earlier of the end of the useful life of the underlying asset or the lease term using the straight-line method. Right-of-use asset depreciation expense is included in the “Selling and distribution expenses" and “General and administration expenses” in the Income Statement based on the function of associated activities. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Group’s incremental borrowing rate. The Group determines its incremental borrowing rate with reference to external market data, making certain adjustments to reflect the terms of the lease and the type of assets leased. Lease payments included in the measurement of the lease liability comprise the following:   fixed payments, less any lease incentive receivable and the exercise price under a purchase option that the Group is reasonably certain to exercise lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease term is determined to be the non-cancellable period of the lease, considering the broader economics of the contract including economic penalties associated with exiting the lease and the useful life of the leasehold improvements on the relevant site. The lease liability is subsequently increased by the interest cost on the lease liability (recognised in “Finance costs” in the Income Statement) and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including motor vehicles and IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. 102 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued C4.1 Leased assets continued Right-of-use assets Right-of-use assets are presented within property, plant and equipment and leasehold property. Millions of dollars Balance at 1 January 2020 Additions Disposals Impairment losses Depreciation charge for the year Foreign currency translation Balance at 31 December 2020 Balance at 1 January 2019 Additions Depreciation charge for the year Balance at 31 December 2019 Leasehold property Plant and equipment 852.2 204.0 (4.7) (64.1) (134.1) (0.3) 853.0 881.9 91.3 (121.0) 852.2 7.7 0.1 (0.7) - (3.4) - 3.7 11.9 0.1 (4.3) 7.7 83 Total 859.9 204.1 (5.4) (64.1) (137.5) (0.3) 856.7 893.8 91.4 (125.3) 859.9 Amounts recognised in Income Statement Millions of dollars Leases Interest on lease liabilities Expenses relating to short-term leases, leases of low-value assets and variable leases 2020 2019 57.2 59.9 58.6 52.9 Amounts recognised in the statement of cash flows For the purposes of presentation in the cash flow statement, principal lease payments of $107.7 million (2019: $109.5 million) are presented within the financing activities and interest of $57.2 million (2019: $58.6 million) within operating activities. Lease payments of short-term leases and leases of low-value assets of $59.9 million (2019: $52.9 million) are included within operating activities. In addition to the disclosure in the statement of cash flows, note D2.5 provides a maturity analysis of lease liabilities. Extension options Some leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstances within its control. Group as lessor In contracts where the Group is a lessor, the Group determines whether the lease is an operating lease or finance lease at inception of the lease. The accounting policies applicable to the Group as a lessor are not different from those under AASB 117. However, when the Group is an intermediate lessor, the sub-leases are classified with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. The impact of sub-leases on the Financial Statements is immaterial. The Group leases consist of owned commercial properties. All leases of owned property are classified as operating leases from a lessor perspective. Rental income recognised by the Group during 2020 was $22.0 million (2019: $29.9 million). 103 Annual Report 2020 84 AMPOL Limited Annual Report 2020 C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C4 Property, plant and equipment continued C4.1 Leased assets continued Group as lessor (continued) The Group has granted operating leases expiring from one to forty-three years. The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. Millions of dollars Operating leases under AASB 16 Within one year Between one and five years After five years (i) Comparative information has been restated to appropriately reflect the actual 2019 balances. C5 Payables Millions of dollars Current Trade creditors unsecured Other creditors and accrued expenses Derivative liabilities Non-current Other creditors and accrued expenses 2020 2019(i) 7.1 16.5 1.1 24.7 13.1 17.2 2.2 32.5 2020 2019 935.8 485.4 67.9 2,354.2 335.4 43.0 1,489.1 2,732.6 16.0 21.3 Payables are recognised for amounts to be paid in the future for goods and services received, whether it is billed to the Group or not. Trade accounts payable are normally settled on between 30-day and 60-day terms. Payables are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost. 104 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements C Operating assets and liabilities continued FOR THE YEAR ENDED 31 DECEMBER 2020 C6 Provisions Millions of dollars Balance at 1 January 2020 Provisions made during the year Provisions used during the year Provisions released during the year Discounting movement Balance at 31 December 2020 Current Non-current Site remediation and dismantling 315.3 312.9 (44.0) (3.9) 6.4 586.7 114.4 472.3 586.7 Other 16.8 77.3 (13.8) - - 80.3 64.3 16.0 80.3 85 Total 332.1 390.2 (57.8) (3.9) 6.4 667.0 178.7 488.3 667.0 A provision is recognised when there is a present legal or constructive obligation as a result of a past event that can be measured reliably and it is probable that a future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain. The provision is the best estimate of the present value of the expenditure to settle the obligation at the reporting date. These costs are reviewed annually and any changes are reflected in the provision at the end of the reporting period. A provision is determined by discounting the expected future cash flows (adjusted for expected future risks) required to settle the obligation at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Subsequent accretion to the amount of a provision due to unwinding of the discount is recognised as a financing cost. In general, the further in the future that a cash outflow for a liability is expected to occur, the greater the degree of uncertainty around the amount and timing of that cash outflow. Examples are of cash outflows that are expected to occur a number of years in the future and, as a result, there is uncertainty on the amounts involved, including asset decommissioning and restoration obligations. Estimates of the amount of an obligation are based on current legal and constructive obligations, technology and price levels. Actual outflows can differ from estimates due to changes in laws, regulations, public expectations, technology, prices and conditions and can take many years in the future. The carrying amounts of provisions are regularly reviewed and adjusted to take account of such changes. Site remediation and dismantling Costs for future dismantling and removal of assets, and remediation of the site on which assets are located, are provided for and capitalised upon initial construction of the asset, where an obligation to incur such costs arises under regulatory requirements and/or the contractual terms of a lease. The present value of the expected future cash flows required to settle these obligations is capitalised and depreciated over the useful life of the asset or the lease term. A change in estimate of the provision is added to or deducted from the cost of the related asset in the period of the change, to the extent that any amount deducted does not exceed the carrying amount of the asset. If an adjustment results in an addition to the cost of the related asset, consideration will be given to whether an indication of impairment exists and the impairment policy will be applied. An adjustment in circumstances where there is no such related asset is recognised in the Consolidated Income Statement immediately. Remediation identified in the period resulting from ongoing or past operations, where a legal or constructive obligation exists and the amount can be reliably estimated is recognised as a provision with a corresponding expense to the Consolidated Income Statement. In assessing the value of provisions the Company uses assumptions and estimates. These include the current legal, contractual or constructive obligations for remediation, expected timings of settlements and amounts (based on past experience or third-party estimates of cost of asset removal, site assessment and additional soil remediation), discount rates and cost inflation rates. The provision for environmental liabilities is estimated based on current legal and constructive requirements, technology, price levels and expected plans for remediation. Actual costs and timing of cash outflows can differ from current estimates because of changes in regulations, public expectations, prices, new information on site conditions and changes in technology. The timing and amount of future expenditures relating to site dismantling and remediation liabilities are reviewed annually, together with the interest rate used in discounting the cash flows. Changes in assumptions in relation to the Company’s provisions can result in material changes to their carrying amounts. 105 Annual Report 2020 AMPOL Limited 86 Annual Report 2020 Notes to the Financial Statements C Operating assets and liabilities (continued) Notes to the Financial Statements C Operating assets and liabilities continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 C6 Provisions continued Site remediation and dismantling continued Set out below are the key components of the site remediation and dismantling provision including, where relevant, a description of material changes to the estimates made during the year:      the environmental remediation obligation associated with the Kurnell oil refinery following its conversion to an import terminal. Following the completion of the Kurnell refinery processing plant demolition activities in 2019 the Group obtained an updated environmental remediation cost estimate utilising a third-party expert. During the year the provision has been reassessed by internal experts in the year taking into account progress against the Kurnell remediation management strategy, interaction with regulatory and local government authorities, latest site information and the cost and scope of remediation activity. No material change to the provision was identified. An updated cost estimate utilising a third-party expert will be obtained in 2021; restoration and remediation costs for sites identified for divestment including the cost of restoration to a level of non-sensitive industrial use. During the year, marginal Convenience Retail and Depot sites met this criterion which resulted in an increase in the provision of $32.3 million; restoration and remediation costs for 25 sites that were sold in 2019 for a “higher and better” use reflecting their significant value as future residential sites. The expense reflects the Group’s commitment to remediate to these sites to a standard which would allow residential development. During the year the provision was revised following reassessments of the cost of remediation as site work progressed resulting in an increase in the provision of $16.9 million; the estimated cost of dismantling and removal of assets from owned and leased operational sites. During the year the provision for the cost of dismantling and removal of assets from owned and leased operational sites was reassessed. This followed significant changes to the Group’s site network including site closures and changes to site use and was made to better reflect the Group’s future estimates of the cost of legal and contractual restoration obligations. Estimated assumptions include current legal, contractual or constructive obligations for dismantling assets and site restoration, expected timings of settlements, expenses based on past experience or third party estimates of cost of asset removal, site assessment and additional soil remediation, as well as discount rates and cost inflation rates. This resulted in an increase in the provision of $241.4 million and a corresponding increase in Property, Plant and Equipment for owned and leased assets and the estimated cost of remediation for site specific identified contamination. The estimated liability for these costs is dependent on the actions required to meet regulatory standards and other requirements. There was no material change to the provision in the year. Other The largest portion of Other includes the provision for rebranding obligations to third-party owned sites for $46.0 million that was recognised in 2020 with the Income Statement expense treated as a significant item. The remainder of provision includes legal and other provisions. 106 Ampol Limited Notes to the Financial Statements D Capital, funding and risk management Notes to the Financial Statements D Capital, funding and risk management For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 87 This section focuses on the Group’s capital structure and related financing costs. This section also describes how the Group manages the capital and the financial risks it is exposed to as a result of its operating and financing activities. D1 Going concern, liquidity and interest-bearing liabilities The Group manages its capital to ensure Ampol will be able to continue as a going concern while maximising value for shareholders. Whilst COVID-19 has adversely impacted 2020 cash flows, Ampol’s liquidity position and balance sheet remain strong. The Group has maintained substantial committed undrawn debt capacity with a diverse group of high-quality financial institutions, on appropriate terms with a weighted average maturity of 3.6 years. Significant headroom remains key to financial covenants under all the Group’s borrowing arrangements. Management actions have also been taken to support cash flow, liquidity and strengthened the balance sheet including cost-out initiatives, capital expenditure rationalisation, optimising funding sources made up of committed bank debt facilities and bonds, operational responses and asset sales. On 20 November 2020, Ampol completed an agreement with a Charter Hall and GIC consortium that acquired a 49% interest in 203 freehold convenience retail sites, which delivered net proceeds of $655.2 million in 2020. On 23 November 2020, Ampol announced an Off-market Buy-back which was completed on 22 January 2021 for $300.4 million. Refer to note G9 Events subsequent to the end of the year for further details. On 9 December 2020, Ampol successfully issued $500.0 million of subordinated notes. These notes will diversify Ampol’s funding sources, support its credit profile and increase its financial flexibility in line with its Capital Allocation Framework. D1.1 Interest-bearing liabilities Millions of dollars Current Bank facilities Lease liabilities Current interest-bearing liabilities Non-current Bank facilities(i) Capital market borrowings(ii) Subordinated notes(iii) Lease liabilities Non-current interest-bearing liabilities Total interest-bearing liabilities 2020 2019 - 160.2 160.2 (5.3) 313.5 493.3 754.0 1,555.5 1,715.7 61.0 160.5 221.5 532.2 309.8 - 717.3 1,559.3 1,780.8 (i) Bank facilities comprises of no drawn bank debt at 31 December 2020 (less borrowing costs of $5.3 million (2019: $6.0 million)). (ii) Capital market borrowings of $313.5 million (2019: $309.8 million) includes a fair value adjustment of $14.8 million (2019: $11.3 million) relating to the fair value hedge of the $300.0 million Australian Medium-Term Notes (less borrowing costs of $1.3 million (2019: $1.4 million)). (iii) Subordinated Notes were issued on 9 December 2020 and are unlisted. They are denominated in Australian dollars. The Notes have a maturity date of 9 December 2080, with the first optional redemption date on 9 March 2026 totalling $500.0 million (less borrowing costs of $6.7 million). Interest-bearing liabilities (excluding lease liabilities) are initially recorded at fair value, less transaction costs. Subsequently, interest-bearing liabilities are measured at amortised cost, using the effective interest method. Any difference between proceeds received net of transaction costs and the amount payable at maturity is recognised over the term of the borrowing using the effective interest method. Refer to note C4.1 for accounting policies on lease liabilities. Significant funding transactions During 2020, the Group extended the tenor on the AUD equivalent $1,503.0 million (2019: $1,773.8 million) of its existing bilateral bank facilities and downsized its committed bank facilities by $200.0 million (2019: upsized by $400.0 million). 107 Annual Report 2020 88 AMPOL Limited Annual Report 2020 D Capital, funding and risk management (continued) Notes to the Financial Statements D Capital, funding and risk management continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management The Group currently finances its operations through a variety of financial instruments including bank facilities, capital markets borrowings, subordinated notes and leasing transactions. Surplus funds are invested in cash and short-term deposits. The Group has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and commodity price risk), as well as credit and liquidity risk. Group Treasury centrally manages foreign exchange risk, interest rate risk, liquidity risk, financial institutional credit risk, funding and capital management. Risk management activities with respect to customer credit risk are carried out by the Group’s Credit Risk department, and risk management activities with respect to commodity price risk are carried out by Ampol Singapore. The Group operates under policies approved by the Board of Directors. Group Treasury, Credit Risk and Ampol Singapore evaluate and monitor the financial risks in close co-operation with the Group’s operating units. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to reduce potential adverse effects on financial performance. The Group uses a range of derivative financial instruments to hedge market exposures. The Group enters into derivative transactions; principally, interest rate swaps, foreign exchange contracts (forwards, swaps and options) and crude and finished product swap and futures contracts. The purpose is to manage the market risks arising from the Group's operations and its sources of finance. Derivative financial instruments are recognised at fair value. The gain or loss on subsequent remeasurement is recognised immediately in the Consolidated Income Statement. However, where derivatives qualify for hedge accounting, recognition of any resulting gain or loss depends on the nature of the item being hedged. It is the Group's policy that no speculative trading with derivative instruments shall be undertaken. The magnitude of each type of financial risk that has arisen over the year is discussed in notes D2.1 to D2.5 below. Hedge accounting There are three types of hedge accounting relationships that the Group utilises: Type of hedge Objective Hedging instruments Accounting treatment Cash flow hedges To hedge the Group’s exposure to variability in cash flows of an asset, liability or forecast transaction caused by interest rate or foreign currency movements. Foreign exchange contracts (forwards, swaps and options). Interest rate swap contracts (floating-to- fixed). Fair value hedges To hedge the Group’s exposure to changes to the fair value of an asset or liability arising from interest rate movements. Interest rate swap contracts (fixed-to- floating). Net investment hedges Foreign currency borrowings. To hedge the Group’s exposure to exchange rate differences arising from the translation of our foreign operations from their functional currency to Australian dollars. 108 The effective portion of changes in fair value of these financial instruments is recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Income Statement. The cumulative gain or loss in equity is transferred to the Consolidated Income Statement in the period when the hedged item affects profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, the cumulative gain or loss existing in equity at the time remains in equity and is recognised when the forecast transaction ultimately affects profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the Consolidated Income Statement. Changes in the fair value of derivative financial instruments that are designated and qualify as fair value hedges are recorded in the consolidated Income Statement, together with any changes in the fair value of the hedged asset or liability or firm commitment attributable to the hedged risk. Foreign exchange differences arising from the translation of the net investment in foreign operations, and of related hedges that are effective, are recognised in other comprehensive income and presented in the foreign currency translation reserve within equity. They may be released to the Consolidated Income Statement upon disposal of the foreign operation. Notes to the Financial StatementsAmpol Limited 89 Notes to the Financial Statements D Capital, funding and risk management continued FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management continued D2.1 Interest rate risk Interest rate risk is the risk that fluctuations in interest rates adversely impact the Group’s results. Borrowings issued at variable interest rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Interest rate risk exposure The Group’s exposure to interest rate risk (after hedging) for classes of financial assets and liabilities is set out as follows: Millions of dollars Financial assets Cash at bank and on hand Financial liabilities Variable rate borrowings Bank facilities Subordinated notes Fixed interest rate – repricing dates including lease liabilities: 12 months or less One to five years Over five years 2020 2019 367.6 367.6 144.8 73.3 160.2 1,171.2 166.2 1,715.7 35.0 35.0 323.2 - 160.5 819.6 477.5 1,780.7 Management of interest rate risk The Group manages interest rate risk by using a floating versus fixed rate debt framework. The relative mix of fixed and floating interest rate funding is managed by using interest rate swap contracts. Maturities of swap contracts are principally between one and five years. The Group manages its cash flow interest rate risk by entering into floating-to-fixed interest rate swap contracts. At 31 2020, the fixed rates under these swap contracts varied from 1.6% to 2.5% per annum, at a weighted average rate of 2.2% per annum (2019:1.6% to 2.5% per annum, at a weighted average rate of 2.2% per annum). December The Group manages its fair value interest rate risk by using fixed-to-floating interest rate swap contracts. The net fair value of interest rate swap contracts at 31 December 2020 was a $6.9 million gain (2019: $1.2 million gain). Interest rate sensitivity analysis At 31 December 2020, if interest rates had changed by -/+1% from the year-end rates, with all other variables held constant, the impact on post-tax profit for the year for the Group and equity would have been: Millions of dollars Interest rates decrease by 1% Interest rates increase by 1% 2020 2019 Post-tax profit Hedge reserve Post-tax profit Hedge reserve (5.1) 5.0 (10.7) 10.1 3.8 (3.8) (7.1) 6.9 109 Annual Report 2020 90 AMPOL Limited Annual Report 2020 D Capital, funding and risk management (continued) Notes to the Financial Statements D Capital, funding and risk management continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management continued D2.2 Foreign exchange risk Foreign exchange risk is the risk that fluctuations in exchange rates will adversely impact the Group’s results. Foreign currency transactions are recorded on initial recognition in Australian dollars by applying the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate applicable for that date. Foreign exchange differences arising on translation are recognised in the Consolidated Income Statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates at the dates the fair value was determined. The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Australian dollars at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into Australian dollars at the exchange rates at the date of the transactions. Foreign currency differences are recognised in the Consolidated Statement of Comprehensive Income and accumulated in the foreign currency translation reserve. The Group is exposed to the effect of changes in exchange rates on its operations and investments. Foreign exchange risk exposure Millions of dollars (Australian dollar equivalent amounts) Bank facilities Cash and cash equivalents Trade receivables Trade payables Forward exchange contracts (forwards, swaps and options) Crude and finished product swap and futures contracts US dollar NZ dollar - 65.5 264.3 (794.2) (2.4) (49.8) - 9.6 4.4 (63.2) (0.6) - Australian dollar - 292.5 593.6 2020 Total - 367.6 862.3 (594.9) (1,452.3) - - (3.0) (49.8) 2019 Total Millions of dollars (Australian dollar equivalent amounts) US dollar NZ dollar Australian dollar Bank facilities Cash and cash equivalents Trade receivables Trade payables - (292.2) (301.0) (593.2) 11.6 171.5 5.4 4.9 18.0 35.0 1,311.5 1,487.9 (2,202.5) (31.9) (486.3) (2,720.7) Forward exchange contracts (forwards, swaps and options) Crude and finished product swap and futures contracts (6.0) (27.0) (0.2) - - - (6.2) (27.0) Management of foreign exchange risk In accordance with Group Treasury Policy, the Group’s transactional and translational foreign currency exposures are managed as follows:   transactional foreign currency exposure - foreign exchange instruments (forwards, swaps and options) are used to economically hedge transactional foreign currency exposure and translational foreign currency exposure – foreign currency borrowings are used to hedge the Group's exposure arising from the foreign currency translation risk from its net investment in foreign operations. As at 31 December 2020, the total fair value of all outstanding foreign exchange contracts (forwards, swaps and options) amounted to a $3.0 million loss (2019: $6.2 million loss). 110 Notes to the Financial StatementsAmpol Limited   Notes to the Financial Statements D Capital, funding and risk management continued FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management continued D2.2 Foreign exchange risk continued Foreign exchange rate sensitivity analysis At 31 December 2020, had the Australian dollar strengthened/weakened by 10% against the following currencies respectively, with all other variables held constant, the impact on post-tax profit for the year for the Group and equity would have been: 91 Millions of dollars AUD strengthens against US dollar by 10% AUD weakens against US dollar by 10% AUD strengthens against NZ dollar by 10% AUD weakens against NZ dollar by 10% 2020 2019 Post-tax profit Equity (4.3) 13.4 - - - - - - Post-tax profit 11.9 (14.6) - - Equity - - 12.6 (15.4) D2.3 Commodity price risk Commodity price risk is the risk that fluctuations in commodity prices will adversely impact the Group’s results. The Group is exposed to the effect of changes in commodity prices on its operations. The Group utilises crude and finished product swap and futures contracts to manage the risk of price movements. The Enterprise Commodity Risk Management Policy seeks to minimise adverse price timing risks and basis exposures brought about by purchase and sales transactions. As at 31 December 2020, the total fair value of all outstanding crude and finished product swap and futures contracts amounted to a $49.8 million loss (2019: $27.0 million loss). Commodity price sensitivity analysis At 31 December 2020, if commodity prices had changed by -/+10% from the year-end prices, with all other variables held constant, the impact on post-tax profit for the year for the Group and equity would have been: Millions of dollars Commodity prices decrease by 10% Commodity prices increase by 10% 2020 2019 Post-tax profit Hedge reserve Post-tax profit Hedge reserve 14.7 (14.7) - - 39.0 (49.1) - - D2.4 Credit risk Customer credit risk Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The credit risk on financial assets of the Group which have been recognised on the Consolidated Balance Sheet is the carrying amount of trade debtors and other receivables, net of allowances for impairment (see note C1). The Group has a Board-approved Credit Policy and manual which provide the guidelines for the management and diversification of the credit risk to the Group. The guidelines provide the scope in which the credit risk of customers is assessed and the use of credit rating and other information in order to set appropriate limits of trade with customers. The credit quality of customers is consistently monitored in order to identify any potential adverse changes in the credit risk of the customers. Expected customer credit losses are assessed on a portfolio basis between small business individuals and bulk fuel customers. The Group also minimises concentrations of credit risk by undertaking transactions with a large number of customers across a variety of industries and networks. Security is required to be supplied by certain groups of Ampol customers to minimise risk. The security could be in the form of a registered personal property security interest over the customer's assets and/or mortgages over real property. Bank guarantees, other contingent instruments or insurance bonds are also provided in some cases. 111 Annual Report 2020 Bank facilities - Drawn Bank facilities - Undrawn Capital market borrowings(i) Subordinated notes(ii) 92 AMPOL Limited Annual Report 2020 D Capital, funding and risk management (continued) Notes to the Financial Statements D Capital, funding and risk management continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management continued D2.4 Credit risk continued Financial institution credit risk Credit risk on cash, short-term deposits and derivative contracts is reduced by transacting with relationship banks which have acceptable credit ratings determined by a recognised ratings agency. Interest rate swaps, foreign exchange contracts (forwards, swaps and options), crude and finished product swap and futures contracts, bank guarantees, and other contingent instruments are subject to credit risk in relation to the relevant counterparties, which are principally large relationship banks. The maximum credit risk exposure on foreign exchange contracts, crude and finished product swap and futures contracts, bank guarantees, and other contingent instruments is the fair value amount that the Group receives when settlement occurs, should the counterparty fail to pay the amount which it is committed to pay the Group. The credit risk on interest rate swaps is limited to the positive mark-to-market amount to be received from counterparties over the life of contracts. D2.5 Liquidity risk management Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Due to the dynamic nature of the underlying business, the liquidity risk policy requires maintaining sufficient cash and an adequate amount of committed credit facilities to be held above the forecast requirements of the business. The Group manages liquidity risk centrally by monitoring cash flow forecasts and maintaining adequate cash reserves and debt facilities. The debt portfolio is periodically reviewed to ensure there is funding flexibility across an appropriate maturity profile. The debt facility maturity profile of the Group as at 31 December 2020 is as follows: Millions of dollars 2021 2022 2023 2024 Beyond 2024 Funds available Drawn Undrawn - - - - - - 225.0 419.5 240.0 462.5 793.5 2,140.5 - - - 2,140.5 - - - - - - - - 300.0 300.0 300.0 500.0 500.0 500.0 800.0 - - 2,140.5 Total 225.0 419.5 240.0 462.5 1,593.5 2,940.5 (i) Capital market borrowings were drawn for the year ended 31 December 2020. Refer to note D1.1 annotation (ii) for the reconciliation back to $313.5 million (2019: $309.8 million). (ii) Subordinated notes were drawn for the year ended 31 December 2020. Refer to note D1.1 annotation (iii) for the reconciliation back to $493.3 million. The Group maintains a strong balance sheet and liquidity position by accessing diversified funding sources made up of committed bank debt facilities and bonds, with a weighted average debt maturity profile of 3.6 years. The total available funds at 31 December 2020 was $2,940.5 million (2019: $2,648.8 million), with $2,140.5 million (2019: $1,816.6 million) in undrawn committed bank debt facilities. The tables below set out the contractual timing of undiscounted cash flows on derivative and non-derivative financial assets and liabilities at the reporting date, including drawn borrowings and interest. Millions of dollars Derivative financial instruments Less than one year One to five years Over five years Derivative financial liabilities Derivative financial assets (1,469.2) 1,462.3 (6.6) - 17.1 - 2020 Net derivative financial (liabilities)/ assets (6.9) 10.5 - 3.6 Derivative financial liabilities Derivative financial assets (1,017.5) 1,008.4 (12.1) (1.1) 16.2 1.9 2019 Net derivative financial (liabilities)/ assets (9.1) 4.1 0.8 (4.2) 112 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements D Capital, funding and risk management continued FOR THE YEAR ENDED 31 DECEMBER 2020 D2 Risk management continued D2.5 Liquidity risk management continued Millions of dollars Non-derivative financial instruments liabilities Less than one year One to five years Over five years Millions of dollars Lease liabilities Less than one year One to five years Over five years 93 2020 2019 (1,448.0) (2,760.4) (438.6) (505.7) (526.5) (381.0) (2,392.3) (3,667.9) 2020 2019 (160.2) (587.7) (166.3) (914.2) (160.5) (573.9) (521.9) (1,256.3) D3 Capital management The Group’s primary objective when managing capital is to safeguard the ability to continue as a going concern, while delivering on strategic objectives. The Group’s Financial Framework is designed to support the overarching objective of top quartile Total Shareholder Return, relative to the S&P/ASX 100. The Framework’s key elements are to:  maintain an optimal capital structure that delivers a competitive cost of capital by holding a level of net debt (including lease liabilities) relative to EBITDA that is consistent with investment-grade credit metrics;  deliver Return on Capital Employed (ROCE) that exceeds the weighted average cost of capital; and  make disciplined capital allocation decisions between investments, debt reduction and distribution of surplus capital to shareholders. The Group’s gearing ratio is calculated as net borrowings/total capital. Net debt is a non-statutory measure calculated as total interest-bearing liabilities (excluding liabilities arising under AASB 16 Leases; refer to note D1.1) less cash and cash equivalents. Total capital is calculated as equity as shown in the balance sheet plus net borrowings. Millions of dollars Interest-bearing liabilities Less: cash and cash equivalents Net borrowings Total equity Total capital Gearing ratio 2020 801.5 (367.6) 433.9 3,224.7 3,658.6 11.9% 2019 903.0 (35.0) 868.0 3,270.5 4,138.5 21.0% 113 Annual Report 2020 94 AMPOL Limited Annual Report 2020 D Capital, funding and risk management (continued) Notes to the Financial Statements D Capital, funding and risk management continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 D4 Fair value of financial assets and liabilities The Group’s accounting policies and disclosures may require the measurement of fair values for both financial and non-financial assets and liabilities. The Group has an established framework for fair value measurement. When measuring the fair value of an asset or a liability, the Group uses market observable data where available. Fair values are categorised into different levels in a fair value hierarchy based on the following valuation techniques:    Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability are categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The fair value of cash, cash equivalents and non-interest-bearing financial assets and liabilities approximates their carrying value due to their short maturity. Fair values of recognised financial assets and liabilities with their carrying amounts shown in the balance sheet are as follows: Millions of dollars Asset/(Liability) Crude and finished product swap and futures contracts (49.8) (49.9) (22.0) (27.9) Total (847.4) (986.8) (22.0) (964.8) (i) Relates to capitalised borrowing costs recorded at amortised cost on undrawn bank facility Millions of dollars Asset/(Liability) 31 December 2020 Interest-bearing liabilities Bank facilities(i) Capital market borrowings Subordinated notes Derivatives Interest rate swaps Foreign exchange contracts (forwards, swaps and options) 31 December 2019 Interest-bearing liabilities Bank facilities Capital market borrowings Derivatives Interest rate swaps Foreign exchange contracts (forwards, swaps and options) Carrying amount Fair value total Quoted market price (Level 1) Observable inputs (Level 2) Non-market observable inputs (Level 3) 5.3 (313.5) (493.3) 6.9 (3.0) - (347.9) (592.9) 6.9 (3.0) - - - - - - (347.9) (592.9) 6.9 (3.0) Carrying amount Fair value total Quoted market price (Level 1) Observable inputs (Level 2) Non-market observable inputs (Level 3) (593.2) (309.8) (590.4) (344.5) 1.2 (6.2) 1.2 (6.2) - - - - (590.4) (344.5) 1.2 (6.2) - - - - - - - - - - - - - Crude and finished product swap and futures contracts (27.0) (27.0) 10.3 (37.4) Total (935.0) (966.9) 10.3 (977.2) 114 Notes to the Financial StatementsAmpol Limited 95 Notes to the Financial Statements D Capital, funding and risk management continued FOR THE YEAR ENDED 31 DECEMBER 2020 D4 Fair value of financial assets and liabilities continued Estimation of fair values Interest-bearing liabilities Bank facilities These are estimated as the present value of future cash flows using the applicable market rate. Capital market borrowings and subordinated notes These are determined by quoted market prices or dealer quotes for similar instruments Derivatives Interest rate swaps This is an estimated amount that the Group would receive or pay to terminate the swap at balance date taking into account current interest rates and credit adjustments. Foreign exchange contracts (forwards, swaps and options) These are calculated by reference to current forward exchange rates for contracts with similar maturity profiles as at reporting date. The fair value of foreign exchange options is determined using standard valuation techniques. Crude and finished product swap and futures contracts The fair value of crude and product swap contracts is calculated by reference to market prices for contracts with similar maturity profiles at reporting date. The fair value of crude and product futures contracts is determined by quoted market prices. D5 Master netting or similar agreements The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a net amount payable by one party to the other. The Group purchases and sells petroleum products with a number of counterparties with contractual offsetting arrangements, referred to as “buy sell arrangements”. The following table presents the recognised amounts that are netted, or subject to master netting arrangements but not offset, as at reporting date. The column “Net amount” shows the impact on the Group’s balance sheet if all set-off rights were exercised. 2020 Millions of dollars (Australian dollar equivalent amounts) Derivative financial assets Buy sell arrangements Total financial assets Derivative financial liabilities Buy sell arrangements Total financial liabilities 2019 Millions of dollars (Australian dollar equivalent amounts) Derivative financial assets Buy sell arrangements Total financial assets Derivative financial liabilities Buy sell arrangements Total financial liabilities Gross amount Amount offset in the balance sheet Amount in the balance sheet Related amount not offset 210.3 152.3 362.6 (256.2) (204.3) (460.5) (188.3) (125.5) (313.8) 188.3 125.5 313.8 22.0 26.8 48.8 (67.9) (78.8) (146.7) (6.5) - (6.5) 6.5 - 6.5 Gross amount Amount offset in the balance sheet Amount in the balance sheet Related amount not offset 122.1 347.8 469.9 (154.2) (343.2) (497.4) (111.2) (317.1) (428.3) 111.2 317.1 428.3 10.9 30.7 41.6 (43.0) (26.1) (69.1) (2.9) - (2.9) 2.9 - 2.9 Net amount 15.5 26.8 42.3 (61.4) (78.8) (140.2) Net amount 8.0 30.7 38.7 (40.1) (26.1) (66.2) 115 Annual Report 2020 AMPOL Limited 96 Annual Report 2020 Notes to the Financial Statements D Capital, funding and risk management (continued) Notes to the Financial Statements D Capital, funding and risk management continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 D6 Issued capital Millions of dollars Ordinary shares Shares on issue at beginning of period – fully paid Shares repurchased for cash Shares on issue at end of period – fully paid 2020 2019 502.6 - 502.6 524.9 (22.3) 502.6 In the event of the winding up of the Group, ordinary shareholders rank after all creditors and are fully entitled to any proceeds of liquidation. The Group grants performance rights to Senior Executives; see the 2020 Remuneration Report for further detail. For each right that vests, the Group intends to purchase shares on-market following vesting. Subsequent to the year end the Group completed an Off-Market Buy-Back. Refer to note G9 for further details. 116 Ampol Limited Notes to the Financial Statements E Taxation Notes to the Financial Statements E Taxation For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 97 This section provides details of the Group’s income tax expense, current tax provision and deferred tax balances and the Group’s tax accounting policies.   E1 Income tax benefit/(expense) E1.1 Recognised in the Income Statement Millions of dollars Current tax (expense)/benefit Current year Adjustments for prior years Total current tax expense Deferred tax benefit/(expense) Origination and reversal of temporary differences Benefit of tax losses Benefit of carry forward tax offsets Adjustments for prior years Total deferred tax benefit/(expense) Total income tax benefit/(expense) in the income statement E1.2 Reconciliation between income tax expense and profit before income tax expense Millions of dollars (Loss)/profit before income tax Income tax benefit/(expense) using the domestic corporate tax rate of 30% (2019: 30%) Effect of tax rates in foreign jurisdictions Change in income tax benefit/(expense) due to: Share of net profit of associated entities Tax on minority interest portion of flow through entity profits Income not subject to attribution under controlled foreign company regime Capital tax losses utilised for which no deferred tax asset was recognised Step-up to market value on pre-CGT sites Research and development allowances Other Income tax under provided in prior years Total income tax benefit/(expense) in the income statement 2020 2019 (18.5) (12.1) (30.6) 170.7 101.8 1.9 2.0 276.4 245.8 2020 (725.6) 217.7 (9.7) 3.2 1.3 12.8 16.2 13.4 0.4 0.6 (10.1) 245.8 (126.9) 2.6 (124.3) (3.9) - - (9.7) (13.6) (137.9) 2019 521.7 (156.5) 8.4 1.3 - - 9.8 6.1 0.6 (0.5) (7.1) (137.9) Income tax benefit/(expense) comprises current tax expense and deferred tax expense. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any adjustments to tax payable in respect of previous years. Deferred tax expense represents the changes in temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. . 117 Annual Report 2020   98 AMPOL Limited Annual Report 2020 E Taxation (continued) Notes to the Financial Statements E Taxation continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 E1 Income tax benefit/(expense) continued Taxation of Singaporean entities At the date of this report, the Australian Taxation Office (ATO) had not finalised its position in relation to the extent to which earnings from the Group’s Singaporean entities would be subject to income tax in Australia. Due to the uncertainty over the ATO’s final position, the Group has estimated and recognised tax liabilities for 2014 to date based on the income tax rate of 30%, being the Australian corporate income tax rate. The Singaporean corporate income tax rate is 17%; however, due to some of the Group’s Singaporean entities having status as Global Trader Companies, specified income of those entities is subject to a lower tax rate. The cumulative current and deferred tax expense for the differential between the Australian and Singapore tax rates recognised in the Financial Statements from 2014 to 31 December 2020 is $178.9 million (2019: $163.1 million). Under an administrative agreement made with the ATO, 50% of the differential in tax on earnings under the Australian and Singaporean taxation rates for the years 2014 to 2019 years has been paid or payable pending resolution of the matter. No Australian tax was paid or payable on earnings in respect of the 2020 year because the Ampol Australian tax consolidated group was in a tax loss position. As a result, as at 31 December 2020 in relation this matter, $81.0 million is recognised in current tax payable and $10.9 million (being the Australian tax payable on the 2020 earnings of the Group’s Singaporean entities) has reduced the deferred tax asset recognised on the Australian tax consolidated group’s carry forward tax loss. If the outcome of the ATO’s decision is in Ampol’s favour, an amount of income tax expense recognised to date could be written back in future periods. If the tax matter is resolved such that the ATO’s position is sustained, there would be no impact on the Ampol Income Statement or net assets. E2 Deferred tax Deferred tax is recognised using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Net movement in deferred tax Millions of dollars Net deferred income tax assets arising on temporary differences Net deferred income tax liabilities arising on temporary differences Tax losses – revenue recorded as asset Total net deferred income tax assets E2.1 Movement in deferred tax Millions of dollars Asset/(Liability) Cash and receivables Inventories Property, plant and equipment and intangibles Payables Interest-bearing liabilities Provisions Lease liabilities Tax asset recognised on tax losses Other Net deferred tax asset 118 2020 434.3 (61.1) 70.9 444.1 2019 172.2 - - 172.2 Balance at 1 Jan 20 Recognised in income Recognised in equity Balance at 31 Dec 20 2.8 6.8 (208.8) 22.5 4.7 111.4 250.6 - (17.8) (3.5) 1.4 13.7 8.7 (0.6) 118.5 27.8 101.8 8.5 172.2 276.3 - - 28.6 (0.6) (0.5) 0.1 (0.1) (30.9) (1.0) (4.4) (0.7) 8.2 (166.5) 30.6 3.6 230.0 278.3 70.9 (10.3) 444.1 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements E Taxation continued FOR THE YEAR ENDED 31 DECEMBER 2020 E2 Deferred tax continued Millions of dollars Asset/(Liability) Cash and receivables Inventories Property, plant and equipment and intangibles Payables Interest-bearing liabilities Provisions Lease liabilities Other Net deferred tax asset (i) Refer to note A4. Balance at 1 Jan 19 Adoption of AASB 16 Recognised in income Recognised in equity (17.9) (8.3) (1.4) - 50.8 (256.3) 22.1 15.1 2.3 (4.0) (15.2) 39.5 4.6 131.7 - - - 267.9 (16.2) 184.2 - 6.2 0.1 (19.2) (17.3) (1.6) (13.7) E2.2 Deferred tax recognised directly in equity Millions of dollars Related to actuarial gains Related to derivatives Related to change in fair value of net investment hedges Related to foreign operations – foreign currency translation differences Related to share-based payments Related to retained earnings Ampol Property Trust – Divestment of Minority Interest E2.3 Unrecognised deferred tax assets Millions of dollars Capital tax losses 99 Change in accounting policy(i) Balance at 31 Dec 19 - - 2.8 6.8 (5.6) (208.8) - - - - - 22.5 4.7 111.4 250.6 (17.8) - - - 2.2 - (1.1) - - 1.1 (5.6) 172.2 2020 0.1 (0.6) (0.5) (0.9) 0.5 - (3.0) (4.4) 2020 0.5 2019 (1.1) 1.8 0.4 - - 6.2 - 7.3 2019 58.8 Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which these benefits can be utilised by the Group. These have not been tax effected. E3 Tax consolidation Ampol recognises all current tax balances relating to its wholly owned Australian resident entities included in the tax consolidated group (TCG). Ampol, in conjunction with the other members of the TCG, has entered into a tax funding arrangement which sets out the funding obligations of members of the TCG in respect of tax amounts. 119 Annual Report 2020   100 AMPOL Limited Annual Report 2020 F Group structure Notes to the Financial Statements F Group structure For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 This section provides information on the Group’s structure and how this impacts the results of the Group as a whole, including details of joint arrangements, controlled entities, transactions with non-controlling interests and changes made to the structure during the year. F1 Controlled entities Controlled entities are those entities controlled by the Group. Control exists when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns from its involvement with the entity and through its power over the entity. The following entities were controlled during 2020: Name Companies Ampol Bendigo Pty Ltd Ampol International Holdings Pte Ltd Ampol Management Services Pte Ltd Ampol Procurement Services Pte Ltd Ampol Property (Holdings) Pty Ltd Ampol Property Manager Pty Ltd (formerly Ampol Convenience REIT FinCo Pty Ltd) Ampol Refineries (Matraville) Pty Ltd Ampol Road Pantry Pty Ltd Ampol Singapore Trading Pte Ltd Ampol US Trading LLC Ampol US Holdings LLC Ampol US Management Services LLC Ampol Shipping & Logistics Pte Ltd Ampol Convenience PropCo Pty Ltd (formerly Australian Petroleum Marine Pty Ltd) B & S Distributors Pty Ltd Bowen Petroleum Services Pty Ltd Ampol Aviation Pty Ltd (formerly Caltex Aviation Pty Ltd) ALD Group Holdings NZ Limited (formerly CAL Group Holdings NZ Ltd) Ampol LPG Pty Ltd (formerly Calgas Pty Ltd) Ampol Retail Pty Ltd (formerly Calstores Pty Ltd) Ampol Australia Custodians Pty Ltd (formerly Caltex Australia Custodians Pty Ltd) Ampol Australia Management Pty Ltd (formerly Caltex Australia Management Pty Caltex Australia Nominees Pty Ltd Ampol Australia Petroleum Pty Ltd (formerly Caltex Australia Petroleum Pty Ltd) Ampol Fuel Services Pty Ltd (formerly Caltex Fuel Services Pty Ltd) Ampol Lubricating Oil Refinery Pty Ltd (formerly Caltex Lubricating Oil Refinery Pty Ampol Petroleum (Qld) Pty Ltd (formerly Caltex Petroleum (Qld) Pty Ltd) Ampol Petroleum (Victoria) Pty Ltd (formerly Caltex Petroleum (Victoria) Pty Ltd) Ampol Petroleum Pty Ltd (formerly Caltex Petroleum Pty Ltd) Ampol Petroleum Distributors Pty Ltd (formerly Caltex Petroleum Services Pty Ltd) Ampol Refineries (NSW) Pty Ltd (formerly Caltex Refineries (NSW) Pty Ltd) Ampol Refineries (Qld) Pty Ltd (formerly Caltex Refineries (Qld) Pty Ltd) Centipede Holdings Pty Ltd Circle Petroleum (Q'land) Pty Ltd Cocks Petroleum Pty Ltd Cooper & Dysart Pty Ltd Graham Bailey Pty Ltd Gull New Zealand Ltd 120 % Interest Note 2020 2019 (xv)(xii)(iii) (ii) (ii) (ii) (iii) (xiv) (xii) (xv)(xii) (ii) (x) (x) (x) (ii)(xi) (iii) (iv) (xv)(xii) (v) (iii) (iii) (iii) (xii) (iii) (iii) (iii) (iii) (iii) (iii) (iii) (iii) (iii) (xv)(xii) (x) (iii) (v) 100 100 100 100 100 100 100 100 100 100 100 100 100 100 50 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100 100 100 - - - - 100 50 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements F Group structure continued FOR THE YEAR ENDED 31 DECEMBER 2020 F1 Controlled entities continued Name Hanietee Pty Ltd Hunter Pipe Line Company Pty Ltd Jayvee Petroleum Pty Ltd Jet Fuels Petroleum Distributors Pty Ltd Link Energy Pty Ltd Manworth Pty Ltd Newcastle Pipe Line Company Pty Ltd Northern Marketing Management Pty Ltd Northern Marketing Pty Ltd Octane Insurance Pte Ltd Pilbara Fuels Pty Ltd R & T Lubricants Pty Ltd Real FF Pty Ltd Ruzack Nominees Pty Ltd Sky Consolidated Property Pty Ltd Solo Oil Australia Pty Limited Solo Oil Corporation Pty Ltd Solo Oil Investments Pty Ltd Solo Oil Pty Ltd South Coast Oils Pty Ltd South East Queensland Fuels Pty Ltd Sydney Metropolitan Pipeline Pty Ltd Teraco Pty Ltd Terminals New Zealand Ltd Tulloch Petroleum Services Pty Ltd Western Fuel Distributors Pty Ltd Zeal Achiever Ltd Unit trusts Ampol Property Trust (formerly Caltex Real Estate Investment Trust) Eden Equity Unit Trust Petroleum Leasing Unit Trust Petroleum Properties Unit Trust South East Queensland Fuels Unit Trust 101 % Interest 2020 2019 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100 100 - 100 100 100 100 60 50 100 100 50 100 51 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 60 50 100 100 50 100 100 100 100 100 100 Note (iii) (iii) (xv)(xii) (iii) (iii) (iii) (ii) (iii) (iii) (xii) (xii) (iii) (iii) (xv)(xii) (iv) (v) (xv)(xii)(iii) (iv) (xiii) (ix) (vi) (vii) (vii) (viii) Incorporated in Singapore. (i) All companies are incorporated in Australia, except where noted otherwise. (ii) (iii) These companies are parties to a Deed of Cross Guarantee dated 22 December 1992 as amended, varied and restated with Ampol and each other. (iv) Included as controlled entities in accordance with AASB 10 Consolidated Financial Statements. In each case, control exists because a company within the Group has the ability to dominate the composition of the entity's Board of Directors or enjoys the majority of the benefits and is exposed to the majority of the risks of the entity. Incorporated in New Zealand. (v) (vi) Ampol Petroleum Distributors Pty Ltd is the sole unit holder. (vii) Solo Oil Pty Ltd is the sole unit holder. (viii) Ampol Australia Petroleum Pty Ltd and Ampol Petroleum Distributors Pty Ltd each own half of the units in this trust. (ix) On 20 November 2020, a Charter Hall and GIC consortium acquired a 49% interest of Ampol Property Trust. (x) (xi) (xii) The directors of the companies listed above declared that the companies were solvent pursuant to section 494 of the Corporations Act 2001. The Incorporated in Delaware, United States of America, on 12 November 2019. Incorporated in Singapore, on 12 February 2019. companies were wound up by their shareholders voluntarily on 20 December 2019. (xiii) Australian tax resident incorporated in the British Virgin Islands. (xiv) Incorporated in Australia, on 5 March 2020. (xv) On 20 January 2021, the companies were deregistered with ASIC. 121 Annual Report 2020 102 AMPOL Limited Annual Report 2020 F Group structure (continued) Notes to the Financial Statements F Group structure continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 F1 Controlled entities continued F1.1 Deed of Cross Guarantee The parent entity has entered into a Deed of Cross Guarantee through which the Group guarantees the debts of certain controlled entities. The controlled entities that are party to the deed are shown in note F1. Income Statement for entities covered by the Deed of Cross Guarantee Millions of dollars Revenue Cost of goods sold – historical cost Gross profit Other income(ii) Other expense Selling, distribution and general and administration expenses Results from operating activities Finance costs Finance income Net finance costs Share of net profit of entities accounted for using the equity method Profit before income tax expense Income tax benefit/(expense)(iii) Net profit Items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income for the period, net of income tax Total comprehensive income for the period Retained earnings at the beginning of the year Adjustment adoption of AASB 16 Current year earnings Movement in reserves Shares bought back Transactions with owners Dividends provided for or paid Retained earnings at the end of the year 2020 2019(i) 11,996.3 18,863.2 (10,978.0) (17,390.4) 1,018.3 1,472.8 897.1 (434.8) (1,380.5) 100.1 (109.7) 0.6 (109.1) 10.7 1.7 264.1 265.8 (0.3) (0.1) (0.4) 265.4 2,417.6 - 265.8 (0.4) - - (189.8) 2,493.2 44.7 - (977.5) 540.0 (121.0) 1.2 (119.8) 4.2 424.4 (290.6) 133.8 2.5 (3.9) (1.4) 132.4 2,670.2 13.8 133.8 2.5 (237.9) 74.2 (239.0) 2,417.5 (i) Comparative information has been restated to appropriately reflect the actual 2019 balances. (ii) Other income includes profit on sale of $869.0 million on a 49% interest in an unlisted real estate property trust. (iii) An income tax benefit arises in the Deed of Cross Guarantee group in the current period due to the sale of assets to the Ampol Property Trust. The gain on sale recorded for accounting purposes is larger than the taxable gain on this transaction creating a tax benefit in the Financial Statements. 122 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements F Group structure continued FOR THE YEAR ENDED 31 DECEMBER 2020 F1 Controlled entities continued F1.1 Deed of Cross Guarantee continued Balance sheet for entities covered by the Deed of Cross Guarantee Millions of dollars Current assets Cash and cash equivalents Receivables Inventories Other Total current assets Non-current assets Receivables Investments accounted for using the equity method Ampol Property Trust investment Other investments Intangibles Property, plant and equipment Deferred tax assets Employee benefits Other Total non-current assets Total assets Current liabilities Payables Interest-bearing liabilities Current tax liabilities Employee benefits Provisions Total current liabilities Non-current liabilities Payables Interest-bearing liabilities Deferred tax liabilities Employee benefits Provisions Total non-current liabilities Total liabilities Net assets Equity Issued capital Treasury stock Reserves Retained earnings Total equity (i) Comparative information has been restated to appropriately reflect the actual 2019 balances. 103 2020 2019(i) 286.5 1,037.4 801.2 49.7 2,174.8 415.0 173.0 728.5 4.2 283.0 3,732.5 443.5 2.9 43.5 5,826.1 8,000.9 1,423.4 230.9 169.6 65.1 173.0 24.8 606.0 1,186.7 202.2 2,019.7 54.0 154.9 - 19.2 295.6 3,522.1 161.9 4.0 48.9 4,260.6 6,280.3 1,247.3 217.6 97.0 50.5 81.4 2,062.0 1,693.7 16.0 2,415.0 9.7 39.9 484.0 2,964.6 5,026.6 2,974.3 502.6 (1.6) (19.9) 2,493.2 2,974.3 21.3 1,361.9 - 40.5 242.9 1,666.6 3,360.4 2,919.9 502.6 (2.0) 1.7 2,417.6 2,919.9 123 Annual Report 2020 104 AMPOL Limited Annual Report 2020 F Group structure (continued) Notes to the Financial Statements F Group Structure continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 F2 Business combinations There were no material business combinations during the years ended 31 December 2020 or 31 December 2019. F3 Equity-accounted investees Associates are those entities over whose financial and operating policies the Group has significant influence, but not control. Joint ventures are those entities whose financial and operating policies the Group has joint control over and where the Group has rights to the net assets of the entity. The Consolidated Financial Statements include the Group’s share of the total recognised gains and losses of associates and joint ventures on an equity-accounted basis, from the date that significant influence or joint control commences until the date that it ceases. When the Group’s share of losses exceeds the carrying amount of the associate or joint venture, the carrying amount is reduced to nil and recognition of future losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Other movements in reserves are recognised directly in the consolidated reserves. Unrealised gains arising from transactions with associates and joint ventures are eliminated to the extent of the Group’s interest in the entity. Unrealised losses arising from transactions with associates and joint ventures are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. F3.1 Investments in associates and joint ventures Name Investments in associates Seaoil Philippines Inc. Geraldton Fuel Company Pty Ltd Bonney Energy (Tasmania) Pty Ltd (formerly Caltas Pty Ltd)(i) Investments in joint ventures Airport Fuel Services Pty Limited Australasian Lubricants Manufacturing Company Pty Ltd(ii) Cairns Airport Refuelling Service Pty Ltd % Interest Country of incorporation 2020 2019 Philippines Australia Australia Australia Australia Australia 20 50 50 40 50 20 50 - 40 50 33.33 33.33 (i) On 31 January 2020, Ampol Australia Petroleum Pty Ltd converted its $15.0 million 2016 convertible note to a 50% equity interest in Bonney Energy (Tasmania) Pty Ltd. The carrying amount of this investment at 31 December 2020 was $15.6 million. (ii) Australasian Lubricants Manufacturing Company Pty Ltd ceased joint venture operations on 17 April 2015 and had a nil carrying value at 31 December 2020. The companies listed in the above table were incorporated in Australia and the Philippines, have a 31 December balance date and are principally concerned with the sale, marketing and/or distribution of fuel products and the operation of convenience stores. 124 Notes to the Financial StatementsAmpol Limited 105 Notes to the Financial Statements F Group structure continued FOR THE YEAR ENDED 31 DECEMBER 2020 F3 Equity-accounted investees continued F3.2 Investments in associates Millions of dollars Revenue (100%) Profit (100%) Share of associates’ net profit recognised Total assets (100%) Total liabilities (100%) Net assets as reported by associates (100%) Share of associates net assets equity accounted Elimination of unrealised loss in inventories Goodwill Total share of associates’ net assets equity accounted 2020 2019 1,562.6 46.3 10.7 604.5 332.2 272.4 72.3 0.1 99.8 172.2 1,651.6 14.1 4.2 610.2 395.5 214.7 50.7 0.2 103.2 154.1 F3.3 Investments in joint ventures Millions of dollars Revenue (100%) Profit (100%) Share of joint ventures’ net profit recognised Total assets (100%) Total liabilities (100%) Net assets as reported by joint venture (100%) Share of joint ventures’ net assets equity accounted 2020 2019 5.0 10.5 - - - - 1.9 4.7 - 2.8 1.9 1.9 0.8 0.8 F4 Joint operations Joint operations are those entities over whose financial and operating policies the Group has joint control, and where the Group has rights to the assets and obligations for the liabilities of the entity. The interests of the Group in unincorporated joint operations are brought to account by recognising in its Financial Statements the assets it controls and the liabilities it incurs, and the revenue and expenses it incurs and share of income it earns from the the sale of goods or services by the joint operation. The Group has joint interests in multiple Joint User Hydrant Installations (JUHIs), which are based at airports across Australia. The Group’s interest in the JUHIs ranges from 20% to 50%. The principal activity of the JUHIs is refuelling aircraft at the airports. On 1 October 2020, the Group sold its interest in the Sydney JUHI for net proceeds on the sale of $24.8 million with a net gain on disposal of $21.2 million. For the year ended 31 December 2020, the contribution of the JUHIs to the operating profit of the Group was nil (2019: nil). Included in the assets and liabilities of the Group are the Group’s interests in the assets and liabilities employed in the joint operation. Millions of dollars Non-current assets Plant and equipment Less: accumulated depreciation Total non-current assets Total assets 2020 2019 62.7 (23.3) 39.4 39.4 84.1 (38.1) 46.0 46.0 125 Annual Report 2020   106 AMPOL Limited Annual Report 2020 F Group structure (continued) Notes to the Financial Statements F Group structure continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 F5 Parent entity disclosures As at and throughout the financial year ended 31 December 2020, the parent entity of the Group was Ampol Limited. Millions of dollars Result of the parent entity Profit for the period Other comprehensive income/(loss) Total comprehensive income for the period Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising Issued capital Treasury stock Reserves Retained earnings Total equity 2020 2019(i) 201.0 16.5 217.5 29.8 5,668.7 108.4 5,098.3 502.6 (1.6) (18.8) 88.2 570.4 284.3 (18.6) 265.7 122.2 6,536.0 239.0 6,050.2 502.6 (2.0) (18.0) 3.2 485.8 (i) Comparative information has been restated to appropriately reflect the actual 2019 balances. Parent entity guarantees in respect of the debts of its subsidiaries The parent entity has entered into a Deed of Cross Guarantee with the effect that each company agrees to guarantee all of the debts (in full) of all companies that are parties to the deed subject to, and in accordance with, the terms set out in the deed. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are disclosed in note F1. The bank guarantee and letter of credit arrangements provided by the parent entity are consistent with those held by the Group as disclosed in note G2. 126 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements F Group structure continued FOR THE YEAR ENDED 31 DECEMBER 2020 F6 Non-controlling interest disclosures Presented below is the financial information of the Group relating to Ampol Property Trust. This subsidiary of the Group has a non-controlling interest (NCI) which is material to the Group. The information below is before the elimination of intercompany transactions with the exception of the fair value adjustment that the Ampol Property Trust recorded in relation to the investment properties acquired. This fair value adjustment is not recognised in the Consolidated Group accounts and is therefore not reflected in the Net assets attributable to NCI shown in the Consolidated Financial Statements. 107 Millions of dollars NCI percentage Balance sheet Current assets Non-current assets Current liabilities Non-current liabilities Net assets attributable to unit holders Net assets attributable to NCI(ii) Income Statement Revenue Expenses Total comprehensive income for the year Profit allocated to NCI Statement of cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase (decrease) in cash held Transactions with non-controlling interests Profit allocated to non-controlling interests(iii) Distributions paid to non-controlling interests(iv) 2020 Ampol Property Trust (i) 49% 7.0 522.9 (0.9) - 529.0 259.2 8.9 (0.2) 8.7 4.3 2.7 (700.9) 698.2 0.0 4.3 (1.2) (i) On 20 November 2020, the Group sold a 49% interest in the unlisted real estate property trust to a Charter Hall and GIC consortium. (ii) Net assets to other non-controlling interests was $14.4 million (2019: $13.5 million) with total net assets of all non-controlling interests ($273.6 million). (iii) Profit allocated to other non-controlling interests was $0.8 million (2019: $1.0 million) with total profit allocated to all non-controlling interests of $5.1 million. (iv) Dividends paid to other non-controlling interests were nil (2019: $0.6 million). 127 Annual Report 2020 108 AMPOL Limited Annual Report 2020 G Other information Notes to the Financial Statements G Other information For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 This section includes other information to assist in understanding the financial performance and position of the Group, or items to be disclosed to comply with accounting standards and other pronouncements. G1 Commitments Capital expenditure Millions of dollars Capital expenditure contracted but not provided for in the financial report and payable 2020 2019 23.0 7.4 On 25 August 2020, Ampol announced, after successfully applying to a tender with Transport for New South Wales that Ampol had won the right to lease and redevelop four existing highway service centres located on the M4 Motorway at Eastern Creek and on the M31 Hume Highway at Pheasants Nest. The estimated redevelopment capital expenditure of ~$100 million is expected to be contracted and spent across 2021 and 2022. G2 Contingent liabilities Discussed below are items where either it is not probable that the Group will have to make future payments or the amounts of the future payments are not able to be measured. Legal and other claims In the ordinary course of business, the Group is involved as a plaintiff or defendant in legal proceedings. Where appropriate, Ampol takes legal advice. The Group does not consider that the outcome of any current proceedings is likely to have a material effect on its operations or financial position. A liability has been recognised for any known losses expected to be incurred where such losses are capable of reliable measurement. Bank guarantees The Group has entered into letters of credit in the normal course of business to support crude and product purchase commitments and other arrangements entered into with third parties. In addition, the Group has granted indemnities to banks to cover bank guarantees given on behalf of controlled entities. The probability of having to make a payment under these arrangements is remote. Deed of Cross Guarantee and class order relief Details of the Deed of Cross Guarantee are disclosed in note F1. G3 Related party disclosures Associates In 2020, the Group sold petroleum products to associates totalling $712,897,000 (2019: $407,088,000). The Group received income from associates for rental income of $2,119,000 (2019: $938,000). Details of associates are set out in note F3. Amounts receivable from associates are set out in note C1. Dividend and disbursement income from associates is $1,877,000 (2019: $1,815,000). The Group has interests in associates primarily for the marketing, sale and distribution of fuel products. Details of the Group’s interests are set out in note F3. Joint venture and joint operations The Group has interests in joint arrangements primarily for the marketing, sale and distribution of fuel products and the operation of convenience stores. There were no other material related party transactions with the Group’s joint arrangements entities during 2020 (2019: nil). Details of the Group's interests are set out in notes F3 and F4. 128 Notes to the Financial StatementsAmpol Limited 109 Notes to the Financial Statements G Other information continued FOR THE YEAR ENDED 31 DECEMBER 2020 G4 Key Management Personnel The Key Management Personnel of the Group during 2020 and 2019 were: Current Directors  Steven Gregg, Chairman and Independent Non-executive Director  Matthew Halliday, Managing Director and Chief Executive Officer  Mark Chellew, Independent Non-executive Director  Melinda Conrad, Independent Non-executive Director  Michael Ihlein, Independent Non-executive Director (from 1 June 2020)  Gary Smith, Independent Non-executive Director (from 1 June 2020)  Barbara Ward AM, Independent Non-executive Director  Penny Winn, Independent Non-executive Director Former Directors  Bruce Morgan, Independent Non-executive Director (to 13 May 2020) Senior Executives  Matthew Halliday, Managing Director and Chief Executive Officer (appointed Interim Chief Executive Officer from 2 March 2020 and then formally Managing Director and Chief Executive Officer from 29 June 2020) Jeffrey Etherington, Interim Chief Financial Officer (from 2 March 2020)   Andrew Brewer, Executive General Manager, Infrastructure (from 1 December 2020)  Brent Merrick, Executive General Manager, Commercial (from 28 September 2020)  Joanne Taylor, Executive General Manager, Retail, Brand and Culture (from 1 April 2019) Former Senior Executives   Julian Segal, Managing Director and Chief Executive Officer (to 1 March 2020) Louise Warner, Chief Commercial Officer (to 27 September 2020) Key Management Personnel compensation Thousands of dollars Short-term benefits Other long-term benefits Post-employment benefits Termination benefits Retention payments Share-based payments 2020 6,421.2 138.3 268.3 1,311.8 2,655.1 299.9 2019 7,309.3 139.7 342.2 1,103.3 - 2,514.2 Total Key Management Personnel compensation 11,094.6 11,408.7 Information regarding Directors’ and Executives’ compensation and some equity instrument disclosures is provided in the Remuneration Report section of the Directors' Report. 129 Annual Report 2020 110 AMPOL Limited Annual Report 2020 G Other information (continued) Notes to the Financial Statements G Other information continued For the year ended 31 December 2020 FOR THE YEAR ENDED 31 DECEMBER 2020 G5 Notes to the cash flow statement G5.1 Reconciliation of cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the Consolidated Cash Flow Statement. For the purposes of the cash flow statement, cash and cash equivalents includes: Millions of dollars Cash at bank Total cash and cash equivalents G5.2 Reconciliation of net profit to net operating cash flows Millions of dollars Net (loss)/profit Adjustments for: Loss/(gain) on sale of property, plant and equipment Impairment of fixed assets Impairment of intangible assets Finance charges on leases Interest paid capitalised Amortisation of finance costs Depreciation of property, plant and equipment Amortisation of intangibles Treasury stock movements net of expense Share of associates' and joint ventures' net profit Movements in assets and liabilities: Decrease/(increase) in receivables Decrease/(increase) in inventories (Increase)/decrease in other assets (Decrease)/increase in payables (Decrease)/increase in current tax balances (Increase)/decrease in deferred tax assets Increase/(decrease) in provisions Interest and other finance costs paid Income taxes paid Net operating cash inflows (i) Comparative information has been restated to appropriately reflect the actual 2019 balances. 2020 367.6 367.6 2020 (484.9) 0.2 393.3 20.1 57.2 (0.3) 3.9 394.3 28.0 (1.6) (10.7) 625.6 775.9 (11.3) (1,416.0) (28.1) (271.9) 350.0 (100.9) (55.2) 267.6 2019 35.0 35.0 2019(i) 383.8 (44.7) - - 58.6 (0.1) 0.3 360.3 27.1 1.5 (4.2) (295.9) (493.4) 25.8 968.7 56.6 7.5 (20.7) (113.1) (73.8) 844.3 130 Notes to the Financial StatementsAmpol Limited Notes to the Financial Statements G Other information continued FOR THE YEAR ENDED 31 DECEMBER 2020 G6 Auditor remuneration Thousands of dollars Audit and review services Auditors of the Group - KPMG Audit and review of financial statements – Group Audit and review of financial statements – controlled entities Assurance services Auditors of the Group – KPMG Regulatory assurance services Other assurance services Other services Auditors of the Group – KPMG Taxation advice and tax compliance services Other services(i) 111 2020 2019 1,492.9 173.9 1,666.8 1,573.2 175.5 1,748.7 31.5 10.1 41.6 14.5 559.5 574.0 19.6 112.5 132.1 52.5 28.4 80.9 (i) Other services include transaction services in respect of Ampol’s disposal of a 49% interest in certain freehold convenience retail sites and remuneration benchmarking services. G7 Net tangible assets per share Millions of dollars Net tangible assets per share 2020 11.77 2019(i) 10.73 (i) Restated due to change in accounting policy. Refer to note A4 for further information. Net tangible assets are net assets attributable to members of Ampol less intangible assets. The number of ordinary shares used in the calculation of net tangible assets per share was 249.7 million (2019: 249.7 million). G8 New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after 1 January 2021 and have not been applied in preparing these Consolidated Financial Statements. None of these are expected to have a significant effect on the Consolidated Financial Statements of the Group. G9 Events subsequent to the end of the year On 22 January 2021, the Group completed an Off-market Buy-back of 11,404,848 shares at a price of $26.34 per share which included a capital component of $2.01 per share. The total amount paid for the buy back was $300.4 million and the impact of this transaction on the issued share capital of the Company was to reduce it by $22.9 million with the remainder from retained earnings. The number of issued shares post the buy back is 238.3 million. On 22 February 2021, the Directors declared a fully franked final dividend. Refer to note B5 for further information. At the date of issue of this report, the future impact of COVID-19 on global and domestic economies and the impact on the Group remains uncertain. The Group continues to actively monitor this situation. There were no other items, transactions or events of a material or unusual nature that, in the opinion of the Board, are likely to significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group that have arisen in the period from 31 December 2020 to the date of this report. 131 Annual Report 2020 Shareholder Information As at 28 February 2021 Share capital There are 238,302,099 fully paid ordinary shares on issue, held by 30,611 holders. Holders with less than a marketable parcel 676 shareholders hold less than a marketable parcel of $500 based on a share price of $24.58 per share. Shares purchased on-market From 1 January 2020, 23,530 fully paid ordinary shares were purchased on-market at an average cost of $27.41 per share for the purpose of the Ampol Limited Employee Share Plan. From 1 January 2020, 19,079 fully paid ordinary shares were purchased on-market at an average cost of $20.27 per share for the purpose of the Ampol Limited Equity Incentive Plan. Number of shares held % of issued capital 27,279,003 16,280,145 15,379,030 14,262,760 12,609,754 11.45 6.83 6.45 5.99 5.29 Total holders Units % of issued capital 24,300 5,579 485 220 27 8,955,399 11,836,834 3,482,988 5,091,960 208,934,918 30,611 238,302,099 3.76 4.97 1.46 2.14 87.68 100.00 Substantial shareholders Substantial shareholder Australian Retirement Fund BlackRock Inc State Street Corporation The Vanguard Group, Inc Arlie Funds Mgt Shareholder distribution Range 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 Over 100,001 Total 132 Ampol LimitedTop 20 shareholders Details of the 20 largest shareholders of Ampol Limited are listed in the table below. Rank Shareholders Number of shares held % of issued shares 1 2 3 4 5 6 7 8 9 10 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED CITICORP NOMINEES PTY LIMITED NATIONAL NOMINEES LIMITED BNP PARIBAS NOMINEES PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BNP PARIBAS NOMS PTY LTD CITICORP NOMINEES PTY LIMITED MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD MUTUAL TRUST PTY LTD MILTON CORPORATION LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED AMP LIFE LIMITED SUNSET POWER PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 BNP PARIBAS NOMINEES PTY LTD UBS NOMINEES PTY LTD NETWEALTH INVESTMENTS LIMITED 11 12 13 14 15 16 17 18 19 20 Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total) Total remaining holders balance Voting rights 79,135,389 71,596,786 23,770,302 11,321,143 5,889,689 5,170,169 5,120,419 1,624,074 656,813 635,038 469,701 412,329 394,000 363,204 317,154 262,150 254,707 230,355 194,114 187,820 208,005,356 30,296,743 33.21 30.05 9.96 4.75 2.47 2.17 2.15 0.68 0.28 0.27 0.20 0.17 0.17 0.15 0.13 0.11 0.11 0.10 0.08 0.08 87.29 12.71 Shareholders in Ampol Limited have a right to attend and vote at all general meetings in accordance with the company’s Constitution, the Corporations Act 2001 (Cth) and the ASX Listing Rules. Corporate Governance Statement A copy of the Corporate Governance Statement can be found on our website. Visit: www.ampol.com.au Australian Securities Exchange The company’s fully paid ordinary shares (ASX:ALD) are listed on the Australian Securities Exchange. Company secretaries Michael Abbott is appointed as Company Secretary of Ampol Limited. Annual Report 2020 133 A m p o l L i m i t e d 2 0 2 0 A n n u a l R e p o r t Directory Share registry Boardroom Pty Limited Level 12, 225 George Street Sydney NSW 2000 GPO Box 3993 Sydney NSW 2001 T: 1300 737 760 (within Australia) T: +61 2 9290 9600 (outside Australia) F: +61 2 9279 0664 www.boardroomlimited.com.au ampol@boardroomlimited.com.au Queensland/Northern Territory New South Wales Ampol Refineries (Qld) Pty Ltd Ampol Banksmeadow terminal ACN 008 425 581 South Street Lytton QLD 4178 Australia T: +61 7 3362 7555 F: +61 7 3362 7111 Ampol Lytton terminal Tanker Street, off Port Drive Lytton QLD 4178 Australia T: +61 7 3877 7333 F: +61 7 3877 7464 Penrhyn Road Banksmeadow NSW 2019 Australia T: +61 2 9695 3600 F: +61 2 9666 5737 Ampol Kurnell import terminal 2 Solander Street Kurnell NSW 2231 Australia T: +61 2 8543 8622 Victoria/Tasmania Western Australia Ampol Newport terminal 411 Douglas Parade Newport VIC 3015 Australia T: +61 3 9287 9555 F: +61 3 9287 9572 Level 1 2 Sabre Crescent Jandakot WA 6164 Australia T: +61 8 6595 2888 F: +61 8 9335 3062 Singapore New Zealand Ampol Singapore Unit #31-63, Tower 2 1 Raffles Place Singapore 048616 T: +65 6622 0010 Gull New Zealand 507 Lake Rd Takapuna, Auckland 0622 New Zealand T: +64 9 489 1452 www.ampol.com.au 

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