http://www.rns-pdf.londonstockexchange.com/rns/1019G_1-2024-9-27.pdf

 

 

 

 

CHAIRMAN'S REVIEW

Dear Shareholder,

Over the last year the Company has continued to deliver on its carbon reduction strategy focusing on the production of gas as a key transition energy source and carbon capture and sequestration ("CCS").

The Company's goal of monetising it's significant gas reserves at the Cambay field in India received a major boost via the signing of a farm-out agreement with Selan Exploration Technology Limited ("Selan") on 14 February 2024. Government of India approval for the Selan JV was gained on 19 July 2024. The aim of the 18‑month, US$20 million work program in which Synergia is being carried by Selan in exchange for a 50% interest in the Cambay production sharing contract is increased production, and on completion of the work program, sufficient cash flow to self-fund the full field development.

Gas production from the Cambay field can help displace coal as fuel for power stations in India, thereby reducing carbon emissions.

CCS is central to global CO₂ emissions reduction strategies and the Company is actively engaged in CCS in both the UK and India.

In the UK, Synergia are operators of the CS019 Camelot carbon storage license in the Southern North Sea which is central to its Medway Hub CCS project. Together with JV partners, Wintershall Dea, the Company has been progressing the NSTA-defined work program on the license as part of the early risk assessment and site characterisation phase of the project. The Medway Hub Camelot CCS project has the goal to permanently store 6.5 million tonnes of CO₂ per annum from 2029/2030.

In India the Company is progressing its Cambay CCS scheme which seeks to store CO₂ emissions from gas- and coal-fired power stations in the vicinity into the extensive Olpad formation that underlies the hydrocarbon reservoirs in the Cambay PSC. The Company aims to be in the vanguard of CCS development in India.

Synergia's management team's experience and expertise in gas storage projects and field development projects has given the Company an advantage in progressing its CCS and Cambay field development projects. The team is being expanded to incorporate additional technical resources.

Corporate development continues with emphasis on shareholder interaction and marketing activities to AIM institutional investors aided by the Company's brokers, Panmure Liberum.

The tangible progress made by the Company over the last 12 months would not have been possible without the ongoing support of its long-term shareholders, who have provided the management team the scope to transform the Company towards its goal of being a significant transition-orientated company in the energy sector. The outlook for the Company remains positive and Synergia's management team and the board of directors are committed to demonstrating added value to its shareholders. 

On behalf of the Board, I wish to thank our staff, contractors, local communities, shareholders and stakeholders for their ongoing support of the Company.

 

 

Mr J Salomon

Non-Executive Chairman

30 September 2024

 

 

 

 

BUSINESS REVIEW

Industry Overview

The global energy sector has adapted to the new geo-political realities with sustained high oil and gas prices caused by multiple conflict zones and the need to reduce fossil fuel reliance to address climate change concerns being the overriding factors.

In the UK and in Europe in general, the trend towards renewable energy continues to gain momentum with the realisation that natural gas for flexible power generation will be required for at least the next few decades. European governments, including the new UK government, seek to reduce fossil fuel production via licensing restrictions and higher taxation. This will result in increased reliance on imported oil and gas, the latter in the form of both pipeline gas and LNG.

In India, the Directorate of Hydrocarbons ("DGH") has publicly announced the urgent need for increased domestic production of oil and gas to address the current high levels of imports. The DGH seeks to reduce the 80% level of oil imports and the high cost of imported LNG that has driven the use of coal-fired power stations to even higher levels.

Carbon Capture and Storage ("CCS") has been adopted by most of the major industrial nations' governments as the primary method to reduce CO₂ emissions. The new UK government is believed to wish to continue the momentum for CCS developments in the UK. In India, the DGH has underlined its commitment to CCS.

The supply chain for energy sector services and equipment appears to be improving as suppliers adapt to the Covid pandemic hiatus. The cost of equipment and services is nonetheless significantly higher than pre-pandemic levels.

Synergia Energy Strategy

The Company's overarching strategy is one of carbon reduction, and we have positioned ourselves at the forefront of some very exciting initiatives. The development of the Cambay gas field in India has the potential to displace LNG imports and to reduce the reliance on coal-fired power stations thereby reducing overall CO₂ emissions. Furthermore, the Company's two CCS projects (one in the UK and one in India) have the potential to affect a material reduction in CO₂ emissions from power stations and other significant industrial CO₂ emitters.

The Synergia management team has proven in-depth experience concerning gas storage in the UK, which directly informs our strategy. Three of the Synergia team were instigators of the last commercial gas storage facility to be built in the UK - the Humbly Grove gas storage facility in Hampshire. The same three team members were founders of Star Energy, which in addition to oil and gas production and power generation, became a leading gas storage development company. Star Energy studied most of the UKCS depleted reservoirs for gas storage suitability and had multiple gas storage projects under development. This provides us with an excellent opportunity to assist in the development of the CCS industry in the UK.

In the year to 30 June 2024, the Company maintained its focus on the development of the significant reserves in its Cambay gas field in India, and also the positioning of the Company as a CCS developer via its Medway Hub Camelot CCS project in the UK and the Cambay CCS scheme in India.

In order to de-risk projects with significant capital requirements, the Company decided to farm out a 50% share of its Cambay field in India and also its UK CCS project. A successful farm out was achieved for the former whilst we continue to progress the latter.

Cambay Field, Onshore Gujarat, India

(Synergia Energy: Joint Operator and 50% Participating Interest at Report Date)

The Cambay licence area is located onshore in the state of Gujarat. Located close to gas infrastructure, the field production was resumed in April 2022 after a 3.5-year hiatus, with production of both gas and condensate from two gas wells (C-77H and C-73) in addition to oil from several intermittent legacy oil wells.

The Cambay field's 206 BCF of P50 reserves are centred on the Eocene EP-IV reservoir which extends across the field and has been penetrated by over 30 wells. The EP-IV reservoir comprises low permeability ("tight") siltstones and requires fracture stimulation to provide economic gas production rates.

Since the resumption of production in 2022, the Company has expended considerable effort in de-risking the full field development of the Cambay field.

In July 2022, the C-77H well was re-fracked to demonstrate plateau production using a heavily-revised fracking methodology; the re-fracked zones have been on continuous production demonstrating the efficacy of the revised fracking approach.

In Q3 2023, the Company commissioned a jet pump to lift the gas condensate produced in association with the gas from the reservoir.

The successful re-fracturing operation gave the Company confidence that new wells can be drilled and fracked with initial production rates of circa 4 mmscfd of gas in conjunction with the jet pump artificial lift.

Safety and Environmental Responsibility

The Company has emphasised the importance of safety and environmental responsibility relating to all aspects of its operations.

The Company has enjoyed an enviable safety record, with the last Lost Time Incident ("LTI") being recorded in 2014. The cumulative LTI rate is currently 0.82.

The Company aims to maintain excellent relationships with stakeholders and neighbours in proximity to its operations on the Cambay PSC.

Cambay PSC Production

Production on the Cambay field combined gas and gas condensate production from two Eocene gas wells, C-73 and C-77H with intermittent oil production from legacy oil wells, C-8, C-19z, C-20, C-63, C-64, C-70, C-72 and C-74.

The primary producing well, C-77H (a horizontal well drilled in 2014), produced gas and gas condensate continuously after the re-frack operation in July 2022. Since the re-frack, the well has produced at rates up to 275,000 scfd despite severe fluid loading from the associated gas condensate. In Q3 2023 a jet pump was installed in the well and the bridge plug isolating the original 4 fracked zones was removed. After the jet pump installation, increased water influx was noticed, thought to originate from the re-connected 4 original frack zones, with gas production of 150,000 scfd. Echometer surveys showed the continued presence of a liquid column in the wellbore and a workover is planned as part of the Selan JV work program to improve jet pump efficiency by increasing the diameter of the production tubing.

Oil production from legacy oil wells has made a contribution to cash flow and indicates potential "low hanging fruit" for the Selan JV work program. None of the legacy oil wells have artificial lift and the installation of pumps in selected wells could lead to continuous material production.

Selan Joint Venture

In February 2024 the Company signed a joint venture agreement with Selan Exploration Technology Limited ("Selan"), which was approved by the Government of India on 19 July 2024. The farm-out agreement with Selan was closed on 1 August 2024.

Selan is an Indian oil and gas operator listed on the Bombay Stock Exchange and the National Stock Exchange of India. Selan has currently entered into a scheme of amalgamation with Antelopus Energy Private Limited, another highly respected Indian oil and gas operator, which is currently awaiting regulatory approvals.

The terms of the joint venture agreement are summarised as follows:

·    The Company agreed to farm out 50% of the 100% interest held by the Synergia Group in the Cambay PSC to Selan.

·    Synergia and Selan will be joint operators of the Cambay PSC with Selan to be appointed as Lead Joint Operator.

·    Both Synergia and Selan are focussed on developing the Cambay PSC Eocene gas and gas condensate reservoir which contains independently certified 2P gas reserves of 206 BCF (as at 1 June 2022).

·    Synergia and Selan have executed a joint operating agreement for the Cambay PSC.

·    In exchange for the 50% interest, Synergia will be carried by Selan through an agreed US$20 million work programme ("WP") comprising 3 new wells focussed on the Eocene reservoir and at least 3 well work-overs.

·    The WP is to be completed within 18 months of the close of the farm-out agreement, extendable by a further six months in certain circumstances.

·    Synergia received a cash payment of US$2.5 million immediately following the close of the farm-out agreement.

·    Synergia retains a 50% interest in the Cambay PSC and a 50% share of the future production and revenues.

·    Synergia will be entitled to bonuses of up to US$9 million, linked to future cumulative gas sales thresholds being achieved as follows:

o  US$0.5 million, if cumulative gross gas sales from the Cambay PSC exceeds 5 Bcf;

o  US$1.0 million, if cumulative gross gas sales from the Cambay PSC exceeds 10 Bcf;

o  US$1.5 million, if cumulative gross gas sales from the Cambay PSC exceeds 15 Bcf;

o  US$2 million, if cumulative gross gas sales from the Cambay PSC exceeds 35 Bcf; and

o  US$4 million, if cumulative gross gas sales from the Cambay PSC exceeds 70 Bcf.

·    Selan has the option to participate in the Cambay CCS scheme on terms to be agreed.

The Company anticipates the incremental production and cash flow resulting from the WP will self-finance a full field development of the Cambay PSC beyond the 18-month WP period.

The work programme will commence in Q3/Q4 2024 with workovers on a number of legacy wells followed by the drilling of two new vertical wells. The drilling of a new horizontal, fracked Eocene well will comprise the final part of the WP. In addition, the WP will include an upgrading of the surface facilities on the Cambay PSC, including additional artificial lift equipment and process equipment.

Carbon Capture and Storage ("CCS")

United Kingdom Continental Shelf

Medway Hub Camelot CCS Project

The Company, together with its joint venture partner Wintershall Dea Carbon Management Solutions UK, was formally awarded a Carbon Dioxide Appraisal and Storage Licence (the "CS019 Camelot licence") by the UK Government's North Sea Transition Authority on 17 August 2023.

Under the terms of the joint venture with Wintershall Dea Carbon Management Solutions UK, the Company is the operator of the joint venture and the CS019 license.

The CS019 licence award, which covers the former Camelot gas field, marks a significant milestone for the Company's Medway Hub CCS project. The Medway Hub CCS project provides for the capture and transportation of CO₂ emissions from coastal Combined-Cycle Gas Turbine power stations in liquid form by marine tanker to a Floating Injection, Storage and Offloading vessel (FISO) from which the CO₂ would be injected into depleted gas fields and saline aquifers, which are situated in the UK Continental Shelf, for permanent sequestration. In addition, the FISO will be able to accept CO₂ cargoes transported by marine tankers originating from Continental European locations.

On 21 December 2023 Wintershall DEA's parent company BASF and key shareholder LetterOne announced that it had reached agreement with UK-listed company Harbour Energy, for the latter to acquire the majority of Wintershall DEA's Exploration and Production global assets. The deal completed on 3 September 2024.

The CS019 licence has a work program that incorporates an appraisal phase comprising seismic re-processing, technical evaluations and risk assessment, a contingent FEED study leading to the potential storage license application in 2028 following the final investment decision ("FID"). The Camelot license also includes a contingent appraisal well. First CO₂ injection is anticipated for 2029/2030. The Company's share of the initial work phase is subject to funding as would be the FID, to be made in due course.

The Company aims to permanently store up to 6.5 million tonnes per annum (MTa) of CO₂ when the project is fully operational.

Since the CS019 licence award in August 2023, the Company has managed the NSTA work programme including the delivery of an Early Risk Assessment report and re-processing and interpretation of the 3D seismic dataset on the licence. Currently a number of separate workstreams are underway including static and dynamic modelling, legacy well integrity, geochemical and geomechanical analyses as part of the site characterisation process.

India

Cambay CCS Scheme

The Company has developed the Cambay CCS scheme which comprises the transportation of CO₂ from emissions from the many significant gas- and coal-fired power stations surrounding the Cambay gas field, via onshore pipeline, to a CCS hub located at the Cambay field. The CO₂ would then be injected into the regionally extensive Olpad formation which underlies the Cambay Eocene gas reservoir. The initial goal is to provide a "Transportation and Storage" service to power stations and other significant CO₂ emitters such as refineries. CO₂ emissions from the currently targeted power stations in the proximity of the Cambay field total circa 45 MTa.

The Cambay CCS scheme is being given support by the key Government of India regulator, the DGH but its viability is contingent on, inter alia, the development of a regulatory framework that incentivises the CO₂ emitter customers. Synergia plans to assist the regulators in the development of such a framework based on its UK CCS experience.

As an initial stage of the project, the Company has proposed a proof-of-concept pilot project comprising the drilling of an appraisal well and CO₂ injectivity testing in the Olpad Formation. The pilot project is subject to funding.

JPDA 06-103, Timor Sea

In August 2020, on behalf of its Joint Venture Participants, Synergia Energy Ltd announced a Deed of Settlement and Release ("Deed") with the Autoridade Nacional Do Petroleo E Minerais ("ANPM"). Under the terms of the Deed, Synergia Energy committed to a settlement of US$800,000 payable up to the financial year 2024. This obligation was fully met when the Group made its final instalment on 7 September 2022.

To fund the settlement to ANPM, Synergia Energy entered into an unsecured loan facility agreement with two of the JPDA joint venture partners, Japan Energy E&P JPDA Pty Ltd ("JX") and Pan Pacific Petroleum (JPDA 06 103) Pty Ltd ("PPP"). The portion which was owing to PPP was fully repaid in December 2021. The portion which was owing to JX was fully repaid on 10 August 2023 when the Company made its final repayment of US$228,324 to JX, to settle the balance of the loan to nil. The details and movement in the loan payable during the current period are detailed in Note 16(a) of the Notes to the Consolidated Financial Statements.

On 13 October 2022, the non-defaulting parties to the JPDA joint venture agreed to terminate the Joint Operating Agreement. During the year, Synergia Energy continued the process of progressing the final closure of the joint venture accounts to conclude this matter.

Financial

Treasury Policy

The funding requirements of the Group are reviewed on a regular basis by the Group's Chief Financial Officer and reported to the Board to ensure the Group can meet its financial obligations as and when they fall due. Internal cash flow models are used to review and test investment decisions. Until sufficient operating cash flows are generated from its operations, the Group remains reliant on equity or debt funding, as well as assets divestiture or farmouts to fund its expenditure commitments.

Formal control over the Group's activities is maintained through a budget and cash flow monitoring process with annual budgets considered in detail and monitored monthly by the Board and forming the basis of the Company's financial management strategy.

Cash flows are tested under various scenarios to ensure that expenditure commitments can be met under all reasonably likely scenarios. Expenditures are also carefully monitored against the budget. The Company continues to actively develop funding options in order to meet its expenditure commitments and its planned future discretionary expenditure.

During the year, the following took place in relation to the Company's debt and equity capital raisings undertaken to provide working capital for the Company's activities:

September 2023 quarter

·    Placement of 704,545,454 ordinary shares ("July Placement") at an issue price of £0.0011 (A$0.0021) per share for gross proceeds of £775k (A$1.5 million);

·    The last instalment of the US$800k loan facility which was owing to JX was fully repaid in August 2023.

December 2023 quarter

·    Placement of 1,375,000,000 ordinary shares ("December Placement") at an issue price of £0.0008 (A$0.0015) per share for gross proceeds of £1.1 million (A$2.07 million);

March 2024 quarter

·    1,070 of the 6,500 convertible notes, plus interest, were converted into 140,455,821 shares at £0.0008 (A$0.0015) per share effective March 2024;

·    3,680 of the 6,500 convertible notes, plus interest, were redeemed in cash and repaid to their convertible note holders effective March 2024. The remaining 1,750 convertible notes, plus interest, had their repayment date extended to 30 September 2024 as requested by their convertible note holders;

·    The Company also obtained short-term loans of £400,000 which bore interest at a fixed rate of 17.5% for the period of the loan (three months) and penalty interest at a fixed rate of 8% per month applicable from 11 June 2024; and

June 2024 quarter

·    The Company obtained a short-term loan of £200,000 which bears interest at a fixed rate of 23.87% for the period to 11 September 2024, and penalty interest at a fixed rate of 8% per month from 11 September 2024.

After the end of the financial year, the Company obtained another short-term loan of £140,000, which bears interest at a fixed rate of 23.87% for the period to 11 September 2024 and penalty interest at a fixed rate of 8% per month thereafter.

The short-term loans obtained in March 2024 (£400,000), plus interest, were repaid after year-end on 11 September 2024.

Corporate

Following the Company's delisting on the Australian Securities Exchange ("ASX") in the previous financial year, the Company is now solely listed on the Alternative Investment Market ("AIM").

As at 30 June 2024 the Company had:

·    Available cash resources of A$1,069,782;

·    Borrowings of A$1,739,983 (refer to Note 16 of the Notes to the Consolidated Financial Statements); and

·    Issued capital of 10,637,791,979 fully paid ordinary shares and 1,865,854,839 unlisted options.

Executive and Board Changes

On 24 January 2024, Mr Peter Schwarz, one of the Company's independent non-executive directors, was appointed as Deputy Chairman. On 24 January 2024, Mr Ashish Khare, the Company's Head of India Assets, was appointed as Executive Director. Mr Khare's appointment was finalised effective on 2 April 2024. There were no other board changes during the year.

Risk Management

The full Board undertakes the function of the Audit and Risk Committee and is responsible for the Group's internal financial control system and the Company's risk management framework. Management of business risk, particularly exploration, evaluation and appraisal, development and operational risk is essential for success in the oil and gas business. The Group manages risk through a risk identification and risk management system.

Health, Safety, Security and Environment

Synergia Energy is committed to protecting the health and safety of everybody who plays a part in our operations or lives in the communities where we operate. Wherever we operate, we will conduct our business with respect and care for both the local and global, natural and social environment and systematically manage risks to drive sustainable business growth. We will strive to eliminate all injuries, occupational illness, unsafe practices and incidents of environmental harm from our activities. The safety and health of our workforce and our environmental stewardship are just as important to our success as operational and financial performance and the reputation of the Company.

Synergia Energy respects the diversity of cultures and customs that it encounters and endeavours to incorporate business practices that accommodate such diversity and that have a beneficial impact through our working involvement with local communities. We strive to make our facilities safer and better places in which to work and our attention to detail and focus on safety, environmental, health and security issues will help to ensure high standards of performance. We are committed to a process of continuous improvement in all we do and to the adoption of international industry standards and codes wherever practicable. Through implementation of these principles, Synergia Energy seeks to earn the public's trust and to be recognised as a responsible corporate citizen.

 

 

 

Qualified Person The technical information contained in the above disclosure has been prepared by or under the supervision of Mr Roland Wessel (BSc (Hons) Geology), CEO and Executive Director employed by Synergia Energy Ltd. Mr Wessel has over 45 years' experience in the oil and gas industry and is a member of the Society of Petroleum Engineers. Mr Wessel meets the requirements of and acts as the Qualified Person under the Alternative Investment Market Rules - AIM Note for Mining and Oil & Gas Companies, and consents to the inclusion of this information in this report in the form and context in which it appears.

 

 

 

 

PETROLEUM AND CCS PERMIT SCHEDULE

PETROLEUM AND CCS PERMIT SCHEDULE - 30 JUNE 2024
ASSET	LOCATION	ENTITY	CHANGE IN INTEREST DURING THE YEAR %	EQUITY %	OPERATOR
Cambay Field PSC (1)	Gujarat, India	Synergia Energy Ltd	-	85	Synergia Energy Ltd
		Oilex N.L. Holdings (India) Limited	-	15
CS019 - SNS Area 4 (Camelot Area) (2)	Southern North Sea (United Kingdom)	Synergia Energy CCS Limited	50	50	Synergia Energy CCS Limited

 

⁽¹⁾    Subsequent to year-end on 19 July 2024, the Government of India Ministry of Petroleum and Natural Gas approved the transfer of assignment of 50% participating interest in the Cambay Field Production Sharing Contract (35% originally held by the Synergia Energy Ltd entity and 15% originally held by the Oilex N.L. Holdings (India) Limited entity) to Selan Exploration Technology Limited. After the transfer of the 50%, Synergia Energy Ltd now holds 50% equity at the date of this report.

⁽²⁾    The NSTA granted the CS019 licence for the Camelot area to Synergia Energy CCS Limited and its 50% joint venture partner, Wintershall Dea Carbon Management Solutions UK, with Synergia Energy CCS Limited as operator. The licence was effective from 1 August 2023.

 

 

 

 

DIRECTORS' REPORT

FOR THE YEAR ENDED 30 JUNE 2024

For the Year Ended 30 June 2024

The directors of Synergia Energy Ltd present their report (including the Remuneration Report) together with the consolidated financial statements of the group comprising Synergia Energy Ltd (the "Company" or "Synergia Energy") and its subsidiaries (together collectively referred to as the "Group") for the financial year ended 30 June 2024 and the auditors' report thereon. Unless otherwise indicated, the directors' report is presented in Australian dollars ("A$"), which is the Company's functional and presentation currency (refer to Note 2(e) of the Notes to the Consolidated Financial Statements).

DIRECTORS

The directors of the Company at any time during the year and until the date of this report are detailed below. All directors were in office for this entire period unless otherwise stated.

Mr Jonathan Salomon	Non-Executive Chairman
Mr Peter Schwarz	Independent Non-Executive Director and Deputy Chairman (appointed Deputy Chairman from 24 January 2024)
Mr Roland Wessel	Chief Executive Officer ("CEO") and Executive Director
Mr Colin Judd	Chief Financial Officer ("CFO") and Executive Director
Mr Mark Bolton	Non-Executive Director
Mr Paul Haywood	Independent Non-Executive Director
Mr Ashish Khare	Head of Indian Assets and Executive Director (appointed Executive Director on 24 January 2024 with  appointment finalising effective 2 April 2024)

DIRECTORS' information

Mr Jonathan Salomon (B App Sc (Geology), GAICD) (Non-Executive Chairman)

Mr Salomon was appointed as a Non-Executive Director in November 2015, Managing Director on 18 March 2016, and Interim Chairman on 5 May 2020. Mr Salomon continued as Managing Director and Interim Chairman until he was appointed as Executive Chairman on 16 June 2021. Mr Salomon moved to a Non-Executive Chairman role on 29 June 2023.

Mr Salomon has a Bachelor Degree in Applied Science and is a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers, and has over 38 years of experience working for upstream energy companies. Mr Salomon has worked for a number of oil and gas companies in various senior positions including General Manager Exploration and New Ventures at Murphy Oil Corporation and Global Head of Geoscience at RISC PL, in addition to a number of Executive Director roles including Strategic Energy Resources, Norwest Energy and Nido Petroleum. At several times in his career, Mr Salomon has acted as an independent consultant for various oil and gas companies, including New Standard Energy and Pacrim Energy. Mr Salomon first worked on Indian projects in 1994 while at Ampolex and since that time has maintained a connection with the Indian industry, at various times bidding in India's exploration and field development rounds and working with Indian companies as joint venture partners, both in India and internationally.

During the last three financial years and up to the date of this report, Mr Salomon has not been a director of any other listed companies.

Mr Peter Schwarz (B Sc (Geology), M Sc (Petroleum Geology))

(Independent Non-Executive Director and Deputy Chairman)

(Appointed Deputy Chairman from 24 January 2024)

Mr Schwarz was appointed as a Non-Executive Director in September 2019. A former director of BG Exploration and Production Limited and CEO of independent exploration company Virgo Energy Ltd, Mr Schwarz is an AAPG Certified Petroleum Geologist and business development professional with over 45 years' experience in the oil and gas industry. Mr Schwarz has previously held various senior management roles with Amerada Hess, BG, and Marubeni and is currently a director of Finite Energy Limited, an oil and gas consultancy business he founded over 16 years ago, specialising in strategy and business development advice in the UK and Europe.

During the last three financial years and up to the date of this report, Mr Schwarz has not been a director of any other listed companies.

Mr Roland Wessel (CEO and Executive Director)

Mr Wessel was appointed as CEO and Executive Director on 16 June 2021. Mr Wessel is a geologist with over 45 years' experience in all of the world's major oil and gas regions. Mr Wessel founded and built Star Energy, the UK onshore operator of 25 oil and gas fields, through to its listing on AIM in 2004 and its sale to Petronas in 2008. During its evolution, Star Energy grew rapidly through acquisitions and diversification, culminating in it becoming a major gas storage developer and operator. During his career, Mr Wessel founded and managed a drilling services company and has help to develop several key oilfield technologies. He has extensive experience in both project and corporate management.

During the last three financial years and up to the date of this report, Mr Wessel has not been a director of any other listed companies.

Mr Colin Judd (CFO and Executive Director)

Mr Judd was appointed as CFO on 1 July 2021 and as Executive Director on 27 January 2022. Mr Judd is a chartered accountant with over 41 years' experience in corporate financial management. He qualified as a chartered accountant with Price Waterhouse in 1979, where he fulfilled various professional accounting positions in the UK, Europe and the Far East. Mr Judd joined Christian Salvesen plc in 1987, undertaking senior financial management roles culminating in the position of European Financial Controller. In 1994, Mr Judd moved to Aberdeen where he undertook CFO roles for two private-equity-backed oil service businesses. In 1999, Mr Judd joined Star Energy Limited as a founder member and CFO and was instrumental in the company's successful listing on AIM in 2004, various subsequent share placings and the company's ultimate sale to Petronas. Mr Judd co-founded Trans European Oil & Gas Limited, a company backed by KKR, with the strategy to develop a pan-European oil and gas business.

During the last three financial years and up to the date of this report, Mr Judd has not been a director of any other listed companies.

Mr Mark Bolton (B Business) (Non-Executive Director)

Mr Bolton joined the Company as an executive on 3 June 2016 and subsequently an Executive Director before transitioning to a Non-Executive Director on 1 July 2021. Mr Bolton has significant experience in the resource sector in Australia, having worked as CFO and Company Secretary for a number of resource companies since 2003. Prior to this, Mr Bolton worked with Ernst & Young as an Executive Director in Corporate Finance. Mr Bolton has experience in the areas of commercial management and the financing of resource projects internationally. He also has extensive experience in capital and equity markets in a number of jurisdictions including ASX, AIM and the TSX. Mr Bolton has significant experience in the development and financing of new resources projects, particularly in emerging economies.

Mr Bolton is the Managing Director of Panthera Resources PLC (AIM:PAT) and a Non-Executive Director of West Cobar Metals Limited (ASX:WC1). During the last three financial years and up to the date of this report, Mr Bolton has not been a director of any other listed company.

Mr Paul Haywood (Independent Non-Executive Director)

Mr Haywood was appointed as Non-Executive Director in May 2017. Mr Haywood has over 20 years of international experience in delivering value for his investment network through a blended skill set of corporate and operational experience, including more than six years in the Middle East, building early stage and growth projects. More recently, Mr Haywood has held senior management positions with UK and Australian public companies in the natural resource and energy sectors including oil and gas exploration and development in UK, EU and Central Asia. Mr Haywood's expertise stretches across UK and Australian public markets, with a cross-functional skill set encompassing research, strategy, implementation, capital and transactional management. Mr Haywood is currently Director and CEO of Block Energy Plc.

Mr Haywood is the Director and CEO of Block Energy plc (AIM:BLOE). During the last three financial years and up to the date of this report, Mr Haywood has not been a director of any other listed companies.

Mr Ashish Khare
(Bachelor of Engineering (BE in Chemical Engineering, including Petroleum Management))

(Head of India Assets and Executive Director)

(Appointed Executive Director on 24 January 2024 with appointment finalising effective 2 April 2024)

Mr Khare was appointed Head of India Assets on 8 November 2016 and Executive Director on 24 January 2024 (with his appointment finalising effective 2 April 2024). Mr. Khare is based in India. Mr Khare has over 23 years of experience in the petroleum industry. Mr Khare's area of expertise include upstream oil and gas, as well as midstream and downstream project implementation and operations management. Mr Khare originally worked for Synergia Energy Ltd as GM Operations & Business Development; and has experience working for various Indian companies including Cairn India Ltd and Reliance Petroleum.

He possesses a wealth of knowledge and expertise accumulated over more than two decades in the India petroleum industry. Since 2015, Mr Khare has steered the Company's Indian business through various challenges with skill and determination. Mr Khare was instrumental in securing 100% PI at Cambay PSC from GSPC and in the resumption of Cambay field production in 2022. He has recently assisted in farming out of 50% PI at Cambay PSC to Selan Exploration Technology Limited.

During the last three financial years and up to the date of this report, Mr Khare has not been a director of any other listed companies.

COMPANY SECRETARY

Mr Jack Rosagro was the Company Secretary from the beginning of the financial year until the appointment of Synergia Energy's current Company Secretary, Ms Anshu Raghuvanshi, on 8 September 2023.

Ms Raghuvanshi leads the company secretarial services for Computershare Governance Services, Melbourne, Australia. She has over 13 years' experience in company secretarial roles, working with listed companies to ensure their compliance with annual and ad-hoc reporting, and to guide them in their governance processes. Ms Raghuvanshi supports clients with the administration of their board, committee, and annual general meetings, including notices, agendas and minutes.

CORPORATE GOVERNANCE STATEMENT

During the year, the Company adopted the recommendations of the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies ("QCA Code").

To the extent they are applicable to the Company, and to the extent possible, the Board considers that the Company has complied with each recommendation of the QCA Code during the year.

The Company's Corporate Governance Statement, which reports on Synergia Energy's key governance principles and practices, and provides detailed information on the Board and committee structure, diversity and risk management, is available on the Synergia Energy website in the "Corporate Governance" section (see https://www.synergiaenergy.com/about-us/corporate-governance).

DIRECTORS' MEETINGS

Directors in office and directors' attendance at meetings during the financial year ended 30 June 2024 are as follows:

	Board Meetings (1)		Remuneration Committee Meetings (1)
	Held (2)	Attended	Held (2)	Attended
Non-Executive Directors
J Salomon (3)	13	8	-	-
P Schwarz	13	13	2	2
M Bolton	13	13	2	2
P Haywood	13	11	2	2
Executive Directors
R Wessel	13	13	-	-
C Judd	13	13	-	-
A Khare (4)	7	6	-	-

⁽¹⁾       The full Board performs the role of the Audit and Risk Committee. The Company does not have a Nomination Committee.

⁽²⁾       Held indicates the number of meetings available for attendance by the director during the tenure of each director.

⁽³⁾       Mr Salomon attended two board meetings as an observer during a period of sick leave.

⁽⁴⁾       Mr Khare was appointed as Executive Director on 24 January 2024. Mr Khare's appointment was finalised effective 2 April 2024. Prior to his appointment as Executive Director, Mr Khare also attended four Board meetings upon Board invitation.

EXECUTIVE MANAGEMENT

The executive management of the Group consists of Executive Directors, Messrs Wessel, Judd and Khare. The details of their qualifications and experience can be found in the Directors' Information section of the Director's Report.

PRINCIPAL ACTIVITIES

The principal activities of the consolidated entity during the financial year included:

·    appraisal and development of oil and gas prospects;

·    production and sale of oil and gas; and

·    development of CCS projects.

There were no significant changes in the nature of the activities during the year.

FINANCIAL AND OPERATING RESULTS

Income Statement

The Group incurred a consolidated loss after income tax of A$2,798,511 (2023: A$5,382,902) for the year.

During the year, the Group recognised total revenues from gas and oil sales of A$638,457 (2023: A$1,296,150). These revenues are recognised net of royalties and levies imposed by the Government of India directly on gas and oil sales. Net revenues from gas sales were A$442,948 (2023: A$755,589) which were from 37,847.23 MMBTU of energy supplied at an average price of US$8.45 per MMBTU (2023: from 66,285.93 MMBTU of energy supplied at an average price of US$8.12 per MMBTU). Net revenues from oil sales were A$195,509 (2023: A$540,561) which were from 2,748.642 barrels sold at an average price of US$67.819 per barrel (2023: from 7,554.05 barrels sold at an average price of US$69.976 per barrel).

Cost of sales for the year were A$1,048,993 (2023: A$2,563,873) which included A$nil (2023: A$1,850,991) refraccing costs. This resulted in the Group incurring a gross loss of A$410,536 (2023: A$1,267,723) during the year.

Net expected credit losses ("ECLs") incurred during the year were A$288,424 (2023: reversal of A$34,853), mainly due to a A$420,094 increase recorded to recognise the ECL on a total of US$247,835 of bank guarantees which was put in place by the Group during the year (refer to footnote (1) of Note 8). This was offset by A$131,670 due to amounts the Company received during the year from the ex-defaulting parties of the now terminated JPDA joint venture (refer to footnote (4) of Note 8).

An impairment of A$34,593 (2023: A$nil) was recorded on the Company's investment in Armour Energy Limited ("Armour"), to bring this investment down to nil. The impairment assessment was based on Armour's circumstances during the year, having gone into receivership and administration in November 2023, and currently in the process of liquidation (refer to Note 13 of the Notes to the Consolidated Financial Statements).

Net finance costs, not including net foreign exchange gains and losses, was A$466,662 (2023: A$626,433). These net finance costs included interest charges (including amortised effective interest charges) on borrowings totalling A$1,196,355 (2023: A$78,494), as well as the unwinding of discount on provisions of A$233,985 (2023: A$289,540). The interest charges on borrowings and the unwinding of discount was offset by a gain of A$866,382 (2023: loss of A$227,668) resulting from the fair value revaluation of the derivative liability component of the Group's convertible notes at year-end.

Net foreign exchange gains were A$1,355,302 (2023: net foreign exchange losses of A$143,548). The net foreign exchange gains included A$1,325,636 (2023: nil) of foreign exchange gains recognised on the reclassification of part of the foreign currency exchange reserve ("FCTR"). The A$1,325,636 related to accumulated exchange differences on currency translation for one of the Group's subsidiaries, Oilex (JPDA 06-103) Ltd. The amount was reclassified from FCTR to profit or loss upon its deregistration on 1 February 2024.

Cash Flow

Net cash used in operating activities for the period was A$2,752,579 (2023: A$5,374,071). The decrease was primarily due to there being no refraccing costs to be paid during the year, when compared to the previous year.

Net cash used in investing activities was A$608,954 during the year (2023: A$3,227). Out of the A$608,954, A$411,477 was invested into an artificial lift system which was installed at the Cambay field in September 2023 and A$81,430 was paid for costs related to the expected farm out of 50% participating interest in the Cambay PSC. The remaining A$116,047 was for payments (net of 50% recoveries from the Group's CCS joint venture partner) relating to the CS019 licence for the Camelot area since NSTA granted the Group the licence effective 1 August 2023.

During the year, the Company raised funds net of costs of A$3,359,697 (2023: A$502,210) from the issue of 2,079,545,454 shares (2023: 174,831,394 shares) during the year (excluding from conversion of convertible notes). 704,545,454 shares were from the July Placement, issued at £0.0011 (A$0.0021) per share, and 1,375,000,000 shares were from the December Placement, issued at £0.0008 (A$0.0015) per share.

During the year, the Company made total principal repayments of A$1,051,173 (2023: A$488,984). The repayments were for the final loan repayment to JX (A$337,374) and for the redemption of certain convertible notes into cash (A$713,799). The Company then obtained unsecured short-term loan funding from existing investors of A$1,161,226 in March and in June 2024.

Financial Position

The net assets of the Group totalled A$9,955,839 at 30 June 2024 (2023: A$10,337,516) and included the following balances:

·    Cash and cash equivalents of A$1,069,782 (2023: A$938,589);

·    Trade and other payables of A$2,373,587 (2023: A$485,968) , of which A$353,588 was overdue at 30 June 2024 (2023: nil). Subsequent to balance date, A$117,096 of this amount has been paid;

·    Borrowings of A$1,739,983 (2023: A$774,666) and

·    Derivative liabilities from convertible notes of A$167,726 (2023: A$1,050,334).

MATERIAL UNCERTAINTY RELATED TO GOING CONCERN

The independent auditor's report contains a statement of material uncertainty regarding the Company's ability to continue as a going concern. The Consolidated Financial Report has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The funding requirements of the Group are reviewed on a regular basis by the Group's Executive Directors and are reported to the Board at each board meeting to ensure the Group can meet its financial obligations as and when they fall due.

Until sufficient operating cash flows are generated from its operations, the Group remains reliant on equity raisings, joint venture contributions or debt funding, as well as asset divestitures or farmouts to fund its expenditure commitments.

The Group will require additional funding in due course to continue its activities, including CCS, meet its ongoing working capital requirements (including any loans payable), and for any new business opportunities that the Group may pursue.

Further information on the Group's going concern basis of preparation is provided in Note 2(c) of the of the Notes to the Consolidated Financial Statements.

DIVIDENDS

No dividend was paid or declared during the year and the directors do not recommend the payment of a dividend.

REVIEW OF OPERATIONS

A review of the operations of the Group during the financial year and the results of those operations are set out in the Review of Operations on pages 3 to 9 of this report.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

The Review of Operations details those changes that have had a significant effect on the Group.

Other than those matters, there have been no other significant changes in the state of affairs of the Group that occurred during the financial year.

LIKELY DEVELOPMENTS

Additional comments on expected results on operations of the Group are included in the Review of Operations on pages 3 to 9.

Further disclosure as to likely developments in the operations of the Group and expected results of those operations have not been included in this report as, in the opinion of the Board, these would be speculative and as such, disclosure would not be in the best interests of the Group.

ENVIRONMENTAL ISSUES

The Group's oil and gas evaluation, production and CCS development activities are subject to environmental regulation under the legislation of the respective states and countries in which they operate. The majority of the Group's activities involve low level disturbance associated with its drilling programmes and production from existing wells. The Board actively monitors compliance with these regulations and as at the date of this report is not aware of any material breaches in respect of these regulations.

The Group also has an active program of education, monitoring and reporting within the Group's business to identify and mitigate any other environmental risks.

SIGNIFICANT EVENTS AFTER BALANCE DATE

During July and August 2024, the Company obtained further short-term loan funding from existing investors of £140,000. The loans bear interest at a fixed rate of 23.87% for the period to 11 September 2024 and penalty interest at a fixed rate of 8% per month after 11 September 2024.

Effective on 19 July 2024, the Government of India Ministry of Petroleum and Natural Gas approved the transfer of assignment of the 50% PI in the Cambay field PSC held by the Group to Selan Exploration Technology Limited ("Selan"). Following the ratification, the farm-out agreement closed on 1 August 2024, and US$2.5 million, net of withholding taxes, was paid by Selan to the Group on 1 August 2024. The portion that was withheld is expected to be received in the coming weeks, in accordance with an agreement the Company entered into on 24 September 2024 to indemnify Selan against any liability for withholding tax effective from 1 August 2024 until 1 April 2035 (refer to Note 20 of the Notes to the Consolidated Financial Statements for further details of the indemnity agreement).

This receipt of the initial cash payment from the closing of the Cambay farm-out agreement (net of withholding taxes) enabled the Group to repay the first tranche of its short-term borrowings (which was obtained in March 2024) on 11 September 2024. The repayment was £566,000, which was based on principal of £400,000 plus interest of £166,000. The second and third tranches of the short-term borrowings, totalling £340,000 plus interest, remain outstanding at the date of this report. The balance outstanding of those loans at the date of this report is £448,358.

In August 2024, the Company received a notice from one of the Extended Notes holders indicating his intention to convert his 750 notes and interest totalling £80,866 into 101,083,050 shares effective 30 September 2024. These shares are expected to be issued and admitted to trading on AIM on or around 30 September 2024. The remainder of the Extended Notes, at the face value of 1,000 notes plus interest totalling £107,822, will also be repaid in cash to their holders on 30 September 2024.

There were no other significant subsequent events occurring after the year-end.

CAPITAL STRUCTURE AND TREASURY POLICY

As at 30 June 2024 the Group had unsecured borrowings at face value A$1,739,983 (2023: A$774,666). Refer to Note 16 of the Notes to the Consolidated Financial Statements for details of the carrying amount, terms and conditions, repayment schedule, and options attached to the borrowings.

Details of transactions involving ordinary shares during the financial year are as follows:

	Shares Issued (No.)	Value of Shares (A$)	Gross Amount Raised (A$)
August 2023 ·    Share Placements (July Placement)	704,545,454	-	1,500,194
December 2023 ·    Share Placements (December Placement)	1,375,000,000	-	2,071,563
March 2024 ·    Conversion of certain Convertible Notes	140,455,821	217,298	-
Total	2,220,001,275	217,298	3,571,757

 

As at the date of this report the Company had a total issued capital of 10,637,791,979 ordinary shares and 1,865,854,839 unlisted options exercisable at weighted average price of £0.0015 (A$0.0029) per option.

DIRECTORS' INTERESTS

The relevant interest of each director in shares and unlisted options issued by the Company at the date of this report is as follows:

	Number of Ordinary Shares		Number of Unlisted Options Over Ordinary Shares
	Direct Interest	Indirect Interest	Direct Interest	Indirect Interest
Non-Executive Directors
J Salomon	-	14,987,013	-	96,626,905(1)
P Schwarz	10,611,250	10,611,250	-	-
M Bolton	-	-	-	-
P Haywood	12,933,513	-	-	-
Executive Directors
R Wessel	-	-	163,636,363(2)	-
C Judd	-	-	118,200,000(3)	-
A Khare	-	-	16,255,208(4)	-

⁽¹⁾       88,311,688 options exercisable at £0.0022, expiring 12 August 2027. All of these options were exercisable at report date; and

8,315,217 options exercisable at nil cost, expiring 1 April 2028. All of these options were exercisable at report date.

⁽²⁾       136,363,636 options exercisable at £0.0022, expiring 12 August 2027. All of these options were exercisable at report date; and

27,272,727 options exercisable at nil cost, expiring 1 April 2028.  All of these options were exercisable at report date.

⁽³⁾       100,000,000 options exercisable at £0.0022, expiring 12 August 2027. All of these options were exercisable at report date; and

18,200,000 options exercisable at nil cost, expiring 1 April 2028.  All of these options were exercisable at report date.

⁽⁴⁾       16,255,208 options exercisable at nil cost, expiring 1 April 2028.  All of these options were exercisable at report date.

 

SHARE OPTIONS

Unissued Shares under Option

At the date of this report, unissued ordinary shares of the Company under option are:

Expiry Date	Number of Shares Under Option	Exercise Price
Unlisted Options
Granted and Issued in 2023:
12 August 2027	324,675,324	£0.0022 (A$0.0043)
1 April 2028	70,043,152	£0.0000 (A$0.0000)
Granted and Issued in 2024:
31 July 2026	13,636,363	£0.0011 (A$0.0021)
31 December 2026	1,375,000,000	£0.0014 (A$0.0027)
31 December 2026	82,500,000	£0.0014 (A$0.0027)
Total	1,865,854,839

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

Unissued Shares under Option that Expired

During or since the end of the financial year, the following unlisted options expired:

Date Lapsed	Number	Exercise Price
30 April 2024	(30,000,000)	£0.00200 (A$0.00383)
31 May 2024	(25,210,084)	£0.00238 (A$0.00457)
Total	(55,210,084)

Shares Issued on Exercise of Unlisted Options

No ordinary shares were issued, during or since the end of the financial year, as a result of the exercise of unlisted options.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During the financial year, the Group paid a premium in respect of insurance cover for the directors and officers of the Group. The Group has not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors' liability and legal expense insurance contracts, as such disclosure is prohibited under the terms of the insurance contract.

PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought on behalf of the Company, nor has any application been made in respect of the Company under Section 237 of the Corporations Act 2001.

NON-AUDIT SERVICES

The Company may decide to employ the Auditor on assignments additional to their statutory audit duties where the Auditor's expertise and experience with the Group is important.

The Board has considered the non-audit services provided during the year and is satisfied that the provision of the non-audit services is compatible with, and did not compromise, the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

·    all non-audit services were subject to the corporate governance procedures adopted by the Group and these have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the auditor; and

·    the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.

Refer to Note 31 of the Notes to the Consolidated Financial Statements for details of the amounts paid to the auditors of the Group, PKF Perth and their network firms for audit and non-audit services provided during the year.

ROUNDING OF AMOUNTS

The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar, unless otherwise indicated.

LEAD AUDITOR'S INDEPENDENCE DECLARATION

The Lead Auditor's Independence Declaration for the year ended 30 June 2024 has been received and can be found on page 34.

 

REMUNERATION REPORT - AUDITED

This remuneration report covers the following key management personnel ("KMP") of the Group:

Non-Executive Directors	Position
Joe Salomon (1)	Non-Executive Chairman
Peter Schwarz (2)	Independent Non-Executive Director and Deputy Chairman
Mark Bolton	Non-Executive Director
Paul Haywood	Independent Non-Executive Director
Executive Directors	Position
Roland Wessel	Chief Executive Officer and Executive Director
Colin Judd	Chief Financial Officer and Executive Director
Ashish Khare (3)	Head of India Assets and Executive Director

⁽¹⁾    Mr Salomon's role changed from Executive Chairman to Non-Executive Chairman on 29 June 2023.

⁽²⁾    Mr Schwarz was appointed as Deputy Chairman on 24 January 2024.

⁽³⁾    Mr Khare was appointed as Executive Director on 24 January 2024 with appointment finalising effective 2 April 2024.

On 24 November 2021, the Board established a Remuneration Committee, in accordance with the Company's Remuneration Committee Charter, comprising Messrs Paul Haywood, Peter Schwarz and Mark Bolton. The Remuneration Committee is responsible for the review and recommendation to the Board, of the Company's Remuneration Policy, senior executives' remuneration and incentives, the remuneration framework for directors, superannuation arrangements, incentive plans and remuneration reporting.

1.   PRINCIPLES OF COMPENSATION

Remuneration is referred to as compensation throughout this report. The Remuneration Report explains the remuneration arrangements for directors and senior executives of Synergia Energy Ltd ("key management personnel" or "KMP") who have authority and responsibility for planning, directing and controlling the activities of the Group

The compensation structures explained below are designed to attract, retain and motivate suitably qualified candidates, reward the achievement of strategic objectives and achieve the broader outcome of the creation of value for shareholders. The compensation structures consider:

·    the capability and experience of the KMP;

·    the ability of KMP to control the performance of the relevant segments;

·    the current downturn and uncertainty within the resources industry;

·    the Company's performance including the Group's earnings;

·    the growth in share price and delivering constant returns on shareholder wealth; and

·    development of projects.

Compensation packages include a mix of fixed compensation and long-term performance-based incentives. In specific circumstances, the Group may also provide short-term cash incentives based upon the achievement of Company performance hurdles or in recognition of specific achievements.

1.1 Fixed Compensation

Fixed compensation consists of base compensation and employer contributions to superannuation funds. Compensation levels are reviewed annually through a process that considers individual, sector and overall performance of the Group. In addition, reviews of available data on oil and gas industry companies provide comparison figures to ensure the directors' and senior executives' compensation is competitive in the market.

Compensation for senior executives is separately reviewed at the time of promotion or initial appointment.

1.2 Performance Linked Compensation

Performance linked compensation includes both short-term and long-term incentives designed to reward KMP for growth in shareholder wealth. The short-term incentive ("STI") is an "at risk" bonus provided in the form of cash or shares, while the long-term incentive plan ("LTI") is used to reward performance by granting options over ordinary shares of the Company.

Short-Term Incentives

In the prior year, the Group introduced a short-term incentive scheme for KMP with effect from 1 January 2022.

The short-term incentive scheme has been designed by the Remuneration Committee and approved by the Board, having regard to the business plans as well as the achievement of performance targets as determined by the Board. These targets include a combination of key strategic, financial and personal performance measures which have a major influence over company performance in the short term.

No short-term incentive options were issued to KMP or other staff during the year ended 30 June 2024.

Employee Incentive Plan

The primary objectives of the Employee Incentive Plan are to:

·    establish a method by which eligible participants can participate in the future growth and profitability of the Company;

·    to provide an incentive and reward for eligible participants for their contribution to the Company; and

·    attract and retain a high standard of managerial and technical personnel for the benefit of the Company.

Under the Employee Incentive Plan, an award (i.e. options or performance rights, etc.) may be awarded to an eligible participant.

The Board, at its sole and absolute discretion, may invite an eligible person selected by it to complete an application relating to a specified number of awards allocated to that eligible person by the Board. The Board may offer an award (as applicable) to any eligible person it elects and determine the extent of that person's participation in the Employee Incentive Plan (Participant).

An offer by the Board is required to specify, among other things, the type of award offered, the date and total number of awards granted, the exercise price and exercise period and any other matters the Board determines necessary, including the exercise conditions and disposal restrictions attaching to the awards.

No Employee Incentive Plan options were issued to KMP or other staff during the year ended 30 June 2024.

1.3 Non-Executive Directors

Total compensation for all Non-Executive Directors is based on a comparison with external data with reference to fees paid to Non-Executive Directors of comparable companies. Directors' fees cover all main Board activities and membership of committees, if applicable.

The annual fee for Mr Salomon was renegotiated to A$105,000 plus statutory superannuation per annum effective from the date of his appointment as Non-Executive Chairman on 29 June 2023. All other terms and conditions from Mr Salomon's previous employment contract were not changed, and as such, the following terms and conditions still apply to Mr Salomon's remuneration:

·    Mr Salomon is required to provide 3 months' resignation notice;

·    if terminated by the Company, the Company is required to provide 3 months' notice, and in which case the Company is also required to pay three months' directors' fees plus any accrued leave entitlements; and

·    where applicable, any unvested options are forfeited upon Mr Salomon's resignation.

The annual fee for Mr Schwarz, the Company's UK-based Non-Executive Director was set at £30,000 per annum on commencement in September 2019.

The annual fee for Mr Bolton was set at A$55,381 plus statutory superannuation per annum effective from 1 July 2021 when he was appointed as Non-Executive Director.

The annual fee for Mr Haywood, the Company's UK-based Non-Executive Director was set at £30,000 per annum on commencement in May 2017.

The aggregate maximum fixed annual amount of remuneration available for Non-Executive Directors of A$500,000 per annum was approved by Shareholders on 9 November 2011.

In addition to the fixed component, the Company can remunerate any director called upon to perform extra services or undertake any work for the Company beyond their general duties. This remuneration may either be in addition to, or in substitution for, the director's share of remuneration approved by Shareholders.

1.4 Clawback Policy

The Board has adopted the following Clawback Policy applicable from August 2015.

In relation to circumstances where an employee acts fraudulently or dishonestly, or wilfully breaches his or her duties to the Company or any of its subsidiaries, the Board has adopted a clawback policy in relation to any cash performance bonuses (including deferred share awards) or LTIs. The Board reserves the right to take action to reduce, recoup or otherwise adjust an employee's performance-based remuneration in circumstances where in the opinion of the Board, an employee has acted fraudulently or dishonestly or wilfully breached his or her duties to the Company or any of its subsidiaries. The Board may:

·    deem any bonus payable, but not yet paid, to be forfeited;

·    require the repayment by the employee of all or part of any cash bonus received;

·    determine that any unvested and/or unexercised LTIs will lapse;

·    require the repayment of all or part of the cash amount received by the employee following vesting and subsequent sale of a LTI;

·    reduce future discretionary remuneration to the extent considered necessary or appropriate to take account of the event that has triggered the clawback;

·    initiate legal action against the employee; and/or

·    take any other action the Board considers appropriate.

1.5 Remuneration Consultants

There were no remuneration recommendations made in relation to KMP by remuneration consultants in the financial year ended 30 June 2024.

1.6 Adoption of Year Ended 30 June 2023 Remuneration Report

At the AGM held 15 November 2023 shareholders adopted the 30 June 2023 Remuneration Report with 93,550,936 votes in favour, being 86.34% of the votes cast.