Petratherm : + Annual Report 2014

Petratherm Limited

ABN 17 106 806 884

Annual Report

For the Year Ended 30 June 2014

Contents

For the Year Ended 30 June 2014

Page

Consolidated Financial Statements

Corporate Information 1

Chairman's Report 2

Directors' Report 3

Auditors Independence Declaration under Section 307C of the Corporations Act 2001 15

Corporate Governance Statement 16

Consolidated Statement of Profit or Loss and Other Comprehensive Income 21

Consolidated Statement of Financial Position 22

Consolidated Statement of Changes in Equity 23

Consolidated Statement of Cash Flows 24

Notes to the Financial Statements 25

Directors' Declaration 62

Independent Audit Report 63

ASX Additional Information 66

Corporate Information

Directors

Derek Carter (Chairman) (retired 31 March 2014) Terry Kallis (Managing Director)

Richard Bonython (retired 31 March 2014)

Richard Hillis (retired 31 March 2014) Simon O'Loughlin

Lewis Owens (retired 31 March 2014)

Donald Stephens (Appointed 31 March 2014)

Company Secretary

Donald Stephens

Registered Office

Cl- HLB Mann Judd (SA) Pty Ltd 169 Fullarton Road

DULWICH SA 5065

Principal place of business Cl- HLB Mann Judd (SA) Pty Ltd 169 Fullarton Road

DULWICH SA 5065

Share Registry

Computershare Investor Services Pty Ltd Level 5, 115 Grenfell Street

ADELAIDE SA 5000

Legal Advisors O'Loughlins Lawyers Level 2, 99 Frome Street

ADELAIDE SA 5000'

Bankers

National Australia Bank 22 - 28 King William Street

ADELAIDE SA 5000

Auditors

Grant Thornton Audit Pty Ltd Chartered Accountants Level 1

67 Greenhill Road

WAYVILLE SA 5034

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Petratherm Limited

ABN 17 106 806 884

Chairman's Report 30 June 2014

Dear Fellow Shareholders,

The Company worked diligently throughout the year to attract additional joint venture partners to the Paralana project, however the market sentiment toward geothermal energy investment in Australia and internationally continued to be negative.

In late 2013, the Company undertook a capital raising by way of a non-renounceable pro rata rights issue at an issue price of

$0.01 per new share on a one to one basis for every one ordinary share held. The rights issue was partially underwritten by Taylor Collison Limited to the extent of $600,000. A sum of $649,000 (before costs) was raised which together with existing cash was applied to continue our efforts to meet the conditions of the $13 million Emerging Renewables Program (ERP) grant from ARENA for the Paralana project and to develop new projects.

From 1 April 2013 the Board of Petratherm reduced directors' fees by half and also deferred payment of the reduced directors' fees. The Directors have, following shareholder approval, received those previously unpaid directors' fees in the form of Petratherm shares.

In April 2014, the Company advised it had restructured its Board and put in place contingency plans should the Company be unable to satisfy the conditions of the Paralana Project ERP grant by 19 July 2014.

In the post reporting period the Company advised that despite the technical success the Paralana Project has achieved and its best efforts in Australia and internationally, the Company was unable to raise the necessary funds to satisfy the ERP grant conditions. Consequently, the Company foreshadowed the impairment of Paralana project assets.

To the extent possible ongoing expenditure has been reduced by the company to preserve funds while carrying on essential activities and will continue to seek new investment opportunities that will potentially reward shareholders. The Company had

$524,000 in cash as at 30 June 2014.

The Company wishes to express its sincere thanks to and the retiring directors for their contributions and service to Petratherm and its shareholders for their continued support of the Company.

Sincerely,

Simon O'Loughlin Chairman

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