Kalina Power : Annual Report to Shareholders 2022 2022

KALINA POWER LIMITED

Notes to the preliminary financial report

KALINA POWER LIMITED

AND ITS CONTROLLED ENTITIES

ABN 24 000 090 997

APPENDIX 4E

PRELIMINARY FINAL REPORT

FINANCIAL YEAR ENDED 30 JUNE 2022

Results for Announcement to the Market		26 August 2022
Current Period:		1 July 2021 to 30 June 2022
Previous corresponding period:		1 July 2020 to 30 June 2021
Results					AUD$
Revenues from ordinary activities		0%	to	nil
Loss from ordinary activities after tax attributable to members *	Down	40.7%	to	4,664,179
Net loss for the period attributable to members	Down	40.7%	to	4,664,179
Dividends	Amount per security		Franked amount per
						security
Final dividend - no dividend is proposed		n/a			n/a
Previous corresponding period - no dividend declared		n/a			n/a
Dividend reinvestment plan		n/a			n/a
+Record date for determining entitlements to the dividend,			n/a
(in the case of a trust, distribution) (see item 15.2)
Net Tangible Assets per security	Current Period		Previous Period
Net tangible asset backing per ordinary security		0.17 cents			(0.14) cents
Control gained over entities	Current Period		Previous Period
N/A
Associates and Joint venture entities		n/a			n/a

Audit of Financial Report

This Appendix 4E is based on audited annual accounts attached to this announcement.

This announcement was approved for release by Ross MacLachlan, CEO

KALINA POWER LIMITED

AND ITS CONTROLLED ENTITIES

ACN 000 090 997

Annual report to Shareholders for the year ended 30 June 2022

		KALINA POWER LIMITED
CORPORATE DIRECTORY
Directors:
	Mr Ross MacLachlan	CEO and current acting Chairman
	Mr Tim Horgan	Executive Director
	Mr Jeffry Myers	Executive Director
	Dr Malcolm Jacques	Non-executive Director
	Mr Peter Littlewood	Non-executive Director
Company Secretary:	Mr Kesh Thurairasa
Registered Office and Principal
Place of Business	Suite 6, 795 Glenferrie Road
	Hawthorn VIC 3122
	Telephone: + 61 3 9236 2800
	Facsimile: + 61 38 9818 3656
Share Registry:	Computershare Registry Services Pty Limited
	Yarra Falls, 452 Johnston Street,
	Abbotsford, Vic, Australia, 3067
	Telephone: + 61 3 9415 5000
Bankers:	Commonwealth Bank of Australia
	385 Bourke Street
	Melbourne VIC 3000
Auditors:	HLB Mann Judd
	Level 9, 575 Bourke Street
	Melbourne VIC 3000
	Telephone: + 61 3 9606 3888
	Facsimile: + 61 3 9606 3800
Solicitors:	Gadens Lawyers
	Level 13 Collins Arch
	447 Collins Street
	Melbourne VIC 3000
Stock Exchange:	The Company is listed in the Australian Stock Exchange. ASX code: KPO
Other Information:	KALINA POWER LIMITED, incorporated and domiciled in Australia, is a publicly listed
	company limited by shares.
Corporate Governance:	The Company's Corporate Governance Statement was released to the ASX on 26
	August 2022 and can be found on the Company's website at

www.kalinapower.com

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KALINA POWER LIMITED

Our Mission

Our mission is to be a global leader in generating zero-emissions electricity from industrial waste heat and geothermal resources. With one of the largest intellectual property portfolios in the industry, we are establishing supply chain and execution partners to deploy across a range of large-scale, addressable market applications that can immediately reduce the carbon footprint of global economies.

Our Vision

To see global economies, utilise industrial waste heat and geothermal resources to immediately reduce emissions and empower local communities with increased energy diversification and security.

Our Values and Principles

By providing a strong foundation for how we operate, engage and unite in our work.

Our ESG Values

We are proud to be utilising the technologies from our intellectual property portfolio that is contributing to the global shift away from the reliance on carbon intensive energy production. Our zero emissions processes includes the recycling of energy and the creation of renewable energy, both fundamentally important activities in addressing climate change on our planet. Our electricity is generated from the capture of discarded industrial waste heat that would otherwise be lost and also through harnessing the earth's geothermal sources of energy.

We are deeply committed to the principles of environmental, social and governance in our operations Our processes contribute to the reduction of emissions by displacing less efficient and more carbon intensive generation. We take care of the environment in which we operate through applying best in class waste heat to power technology that reduces our carbon footprint. Our saddle Hills Project is the model for application of these principles. Where our power generation also enables market integration of renewables in the areas in which we operate.

On a social level, we focus on regions where rising electricity prices and energy security issues are evident, thereby providing energy access to underserved areas and communities. Our investment in these areas also leads to job creation and diversification of the local economy, as well as the leveraging of energy infrastructure.

Our governance is maintained through clearly defined project execution plans and effective risk management strategies. We also manage our supply chains in a highly strategic manner in order to minimise both costs and risks. Our focus on regions where governments mandate for energy efficiency further reduces our risks of operation.

We are committed to undertaking our activities in a sustainable manner, and caring for our environment, ourselves, and the communities in which we operate. These principles are foundational to what we do and will therefore continue to guide us as we move forward into the next stage of development and expansion in 2023.

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KALINA POWER LIMITED

Chairman's Letter

Dear Shareholders,

I am pleased to present KALiNA Power Limited's Annual Report and financial statements for the year ended 30 June 2022. The past year marked a period in which the Group was able to achieve another round of critical objectives in its long-term strategy and mission to deploy applications of its high-efficiency Kalina Cycle® technology at an industrial scale for major international markets.

Heading into the 2023 financial year, the Board and management team are confident that KALiNA has established a strong platform for long-term growth. Significant progress was achieved in the Group's strategy to establish a profitable business in Alberta that will serve as a platform to deploy the KALiNA Cycle® to international markets and become a major player in the global Geothermal and industrial Waste Heat to Power markets.

Achievements with the Group's operations in Alberta continue to validate its strategic decision to focus on a jurisdiction with the appropriate combination of energy demand and regulatory support, as the province transitions to major reductions in emissions. That was clearly reflected by the group's key operational developments in FY22, which were a direct result of the relationships KALiNA has established with commercial partners, community stakeholders, legislative policy makers and regulatory authorities.

The 2022 financial year marked a major step forward for KALiNA with respect to its technology partnering and supply chain development strategy. Progress in Alberta has raised the profile of the KALiNA Cycle® and attracted the attention of major companies, as evidenced by KALiNA's recent MoU with US$25bn engineering multinational Baker Hughes. The MoU provides a framework by which the parties can provide modularized packaged solutions of the KALiNA Cycle® for markets that are in transition to zero-emissions and energy efficient power. While integrating the Baker Hughes vapor turbine at KALiNA's Saddle Hills project is a logical starting point for both parties, we are also assessing small-scale combined cycle opportunities across the globe.

Last October, the KALiNA Saddle Hills Energy Centre was successful in its application to the Alberta Utilities Commission, which provided regulatory approval to construct and operate the project. Following an extensive application process, the Group then announced a landmark regulatory achievement in June, with confirmation it had received an environmental permit from the Alberta Ministry of Environment & Parks.

Rigorous compliance pathways are an imperative part of the application process for major energy projects. With the Alberta team's successful procurement of development approvals in a sector with high regulatory barriers to entry, the Group is well positioned to efficiently develop additional projects going forward.

The favourable legislative backdrop in Alberta is also another clear, leading indicator that geothermal power and industrial waste heat to power are being prioritised by policy makers in the allocation of fiscal resources towards the clean energy transition. Energy solutions that help accelerate the shift to zero-emissions power are being supported across the relevant stakeholder base.

Viewed more broadly, these regulatory and policy developments also form a positive backdrop in the negotiations with major partners, gas producers and related stakeholders as the Group structures the financing for the Saddle Hills Energy Centre heading into the new financial year.

With the Baker Hughes engagement now in place, efforts are underway on modifications to improve cost efficiencies for the Saddle Hills project. The Group is also considering changes to configuration and construction timelines that will enhance overall returns. Negotiations are also continuing to secure gas reserves to mitigate risk and provide secure, attractive margins. The successful implementation of these initiatives is expected to deliver project financing on attractive terms for the Group and its shareholders.

In January, KALiNA reported the untimely passing of the Company's Chief Technology officer, Mark Mirolli. This came at a time when Mark was leading a process of migrating the engineering and modelling software to a new platform along with a new data base of historical records.

The Group's technology platform represents more than seven KALiNA Cycle® system designs for various geothermal and industrial waste heat to power applications across varying types of heat, ranges of temperatures and at various scales.

The Group was fortunate to contract with Kevin Wallace as our new Head of Technology Development and Commercialization. Kevin worked with Power Engineers for over 20 years with involvement in over 850MW of geothermal projects worldwide and was actively engaged in several projects and proposals involving the KALiNA Cycle®. Kevin is now leading the effort in completing the work initiated by Mark and is overseeing the technical developments and commercial priorities for applications of the KALiNA Cycle®. This work will be essential as the Group works with supply chain partners such as Baker Hughes in the development of packaged designs for applications that have significant addressable markets.

In addition, the Group was pleased to engage Stephen White as its Senior Industry advisor. Stephen is the former CEO of Veresen Inc; a major developer of pipeline, midstream & gas processing assets which was sold to Pembina in 2017 for CAD $9.7 billion. Stephen has been directly engaged with the Group's seasoned project development team regarding project structure and execution as well as tolling and project financing.

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