First Graphene : 2021 Annual Report

ANNUAL REPORT 2021

FIRSTGRAPHENE.NET

2			THE WORLD'S LARGEST PRODUCER OF PURE GRAPHENE

HIGHLIGHTS

OPPORTUNITY	GROWTH STRATEGY	QUALITY AND
With global demand for graphene	The appetite for graphene among	PRODUCT DIVERSITY
promising to develop an	many of the world's most important	Our focus is on unparalleled
extraordinary growth curve, now is	markets continues to grow, while
quality assurance, customer
the time to be involved with a well-	we apply a strategic focus to
satisfaction and quality products
managed and credentialed company	commercialise the business and
independently verified. We are
that has a clear commercial focus to	ramp up our global sales initiatives,
strategically positioned with a first
gain greater market share.	the opportunities for graphene are
mover advantage having already
	seemingly limitless.
	commercialised graphene into a
		diverse range of products relevant
		to many segments and applications
		including cement, composites and
		rubbers among others.

CAPACITY	GLOBAL ESG STORY
Our purpose built, large-scale production facility,	Our graphene products make industries
has the capability to respond to growing demands	and clients significantly more eco-friendly.
and sales orders quickly and efficiently. We are the	Graphene offers major benefits to all parts
largest producer of commercial grade graphene -	of everyday society and segments - from
PureGRAPH® is a commercial grade, high volume and	across the mining supply chain, to cement,
high quality/repeatable specifications adaptable to	composites and modern technological
many products and industries.	devices, renewables and energy storage.

FGR ANNUAL REPORT FY2021	3
CONTENTS
Chairman's Report ......................................................	4
CEO Report ..................................................................	6
Strategy Report ...........................................................	10
Operations/QHSE Report ............................................	13
R&D Technology Report ..............................................	14
CFO Report ...................................................................	18
Sustainability Report ....................................................	20
Annual Financial Report ..............................................	22
Corporate Directory ......................................................	83

4			THE WORLD'S LARGEST PRODUCER OF PURE GRAPHENE

CHAIRMAN'S REPORT

Every start-up company needs to go through a procession of changes as it goes from concept to production and along to commerciality. First Graphene is at the point where an influx of new blood and vision needs to take over, and it has. The new team is now charged with establishing commerciality of the business on a solid footing. It needs a different set of eyes and vision and it involves different skill sets. Different strategies and tactics are required.

The year to 30 June 2021 will be remembered as the year of the pandemic by the entire world. It has been the most significant global event that any of us alive today have experienced and we are not out of the woods yet. Everyone and every company has been affected to a lesser or greater extent, and I suppose every chairman's address will mention it as a matter of procedure.

The biggest impacts on First Graphene have been twofold. Firstly, a number of our prospective customers were significantly slower in moving to incorporate PureGRAPH® into the products due to lockdowns that restricted the availability of workers and inhibited regular production schedules. A level of heightened caution worked against any suggestion of accelerated innovation. Thus, we were not able to deliver the sales growth we had earlier anticipated. Secondly, there were many months during which our research and product development programs were interrupted by shutdowns of the University of Manchester, where we have operations in the Graphene Engineering Innovation Centre (GEIC).

Covid aside, 2021 was a year that involved a changing of the guard at First Graphene. We saw the retirement of both the CEO and CFO, who had

been with the Company since 2012. They comprised the key management team for approximately 10 years, initially as a mineral exploration company and for the last five years as a graphene visionary.

When First Graphene started out on the graphene journey there was no road map to follow. It was almost a case of the blind leading the blind. All we knew was how wonderful graphene was supposed to be and what a great future awaited those who were willing to embrace this wonderful 2D nanomaterial. It was a very steep learning curve.

First Graphene quickly realised that a major obstacle to the advancement of the segment was the availability of a reliable supply of graphene of consistent quality, irrespective of price. No manufacturing company would look to introduce graphene to their product lines if they could not see clear supply lines to make the change worthwhile. Many companies that experimented with graphene expressed frustration owing to the mixed results they achieved in test work, attributable to the lack of consistency from one batch to the next.

First Graphene set about addressing these concerns by taking a bench-scale graphene production methodology, pioneered by the University of Adelaide, and scaling it up firstly to a pilot plant size,

FGR ANNUAL REPORT FY2021			5

and then to a full commercial-scale manufacturing facility of Henderson, south of Fremantle in WA.

In getting to this position, the Company had to grapple with another chicken and egg conundrum. Nothing could happen without a production facility, but no-one was going to buy the product and make changes to their production lines if they could not see tangible evidence that there was a real and reliable supply.

The fact that the Henderson facility has been constructed and successfully commissioned, and continuously optimised, is a credit to both Craig McGuckin and Peter Youd. Their vision and commitment has placed the Company in the perfect position at this juncture, but it is still only first base. First Graphene is still just an embryonic company staring at a very steep growth curve ahead, particularly when it comes to selling the product.

As they say, Rome wasn't built in a day. The pioneering of new technology, taking it from the point of invention to commercial, profitable scale involves many steps and requires many different skills to meet the ever-evolving challenges along the way. Having shown that we can make graphene, your Company has recognised that the next major challenge is to sell volume to the target markets. It is not just a matter of putting our For Sale sign on the door because there is no established market already operating that we can simply enter with a promise of better product than what industry is already buying. We have to play a leading role in developing the market by interfacing with industry to show how much better their products will be with the incorporation of graphene. At the same time, we have to show how individual companies will achieve

stronger sales growth, through increased market share, when producing superior products.

Every start-up company needs to go through a procession of changes as it goes from concept to production and along to commerciality. Just as with a mineral exploration company, that is staffed by geologists who have to stand aside to enable the engineers to do their job, First Graphene is at the point where an influx of new blood and vision needs to take over, and it has. The recently retired team was instrumental in delivering production capability. The new team is now charged with establishing commerciality of the business on a solid footing. It needs a different set of eyes and vision and it involves different skill sets. Different strategies and tactics are required.

We are confident that the changes instituted this year have placed First Graphene in the best possible position to maximise the graphene opportunity before us.

Warwick Grigor

Chairman

ASX:FGR l