Annual financial statement
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KINETIKO ENERGY LTD ABN 45 141 647 529 Financial Report for the Year Ended 30 June 2026
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KINETIKO ENERGY LTD ABN 45 141 647 529 C O N T E N T S Corporate Directory 2 Chairman’s Address 3 - 5 Directors’ Report 6 - 32 Consolidated Entity Disclosure Statement 33 Auditor’s Independence Declaration 34 Independent Audit Report 35 - 38 Directors’ Declaration 39 Consolidated Statement of Profit or Loss and Other Comprehensive Income 40 - 41 Consolidated Statement of Financial Position 42 Consolidated Statement of Changes in Equity 43 Consolidated Statement of Cash Flows 44 Notes to the Financial Statements 45 - 71
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 2 Corporate Directory Directors Adam Sierakowski Dirk Robert Bulder Donald Mzolisa Jones Ncube Robert Scharnell Mxolisi Donald Mbuyisa Mgojo Company Secretary Simon Whybrow Public Officer Adam Sierakowski Principal Activity Shallow Conventional Gas Exploration Principal Place of Business Level 24, St Martins Tower 44 St Georges Terrace PERTH WA 6000 Registered Office Level 24, St Martins Tower 44 St Georges Terrace PERTH WA 6000 Auditors BDO Audit Pty Ltd Level 9 Mia Yellagonga Tower 2 5 Spring Street PERTH WA 6000 Stock Exchange Listing Australian Securities Exchange Home Exchange: Perth Code: KKO Share Registry Automic Registry Services Level 5, 191 St Georges Terrace PERTH WA 6000
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 3 Chairman’s Address Dear Shareholders, It is with great pleasure that I present to you the Chairman’s address for the financial year ended 30 June 2026, a year in which Kine tiko Energy has made the long -anticipated transition from explorer to gas field developer. A Year of Transition In last year’s address , I described a technical turning point in the Company’s journey. The task before us in FY2026 was to demonstrate that th is turning point was real, re peatable and commercial, and I am pleased to report that our focus through the year has been to deliver exactly that. The optimised drilling procedures developed with our experienced internal tec hnical team and external consultants Oilfield Technologies Australia were applied in the field to two production test wells at Brakfontein, and both delivered results that met or exceeded our expectations. ER271 -KA03PT06 was drilled to a total depth of 405 metres, on time and on budget, and recorded a peak choke te st flow of 1,600 Mscfd — more than three times the best historical result achieved at Brakfontein. ER271 -KA03PT10 was completed to 417 metres with 144 metres of net pay and recorded a peak flow of 370 Mscfd. Extended flow test ing across the two wells reco vered a combined 7,954 Mscf of gas, with methane content consistently above 98%. ER271 -KA03PT10 flowed for 40 continuous days with no discernible dec line, and both wells sustained rates materially above the 50 Mscfd initial flo w rate that independent certi fier Sproule B.V. assessed as the threshold for commercial viability. From Testing to Development With a track record for exploration success for over a decade the board determined late last yea r that given the rapid depletion of South Africa’s only gas sourced from Mozambique and the priority for sovereign energy independence its focus should be how best to expedite development to gas production and establish a significant onshore domestic gas alternative. Rather than pursu e a single large -scale project, we spent much of the year working alongside a team of highly qualified geologists, reservoir engineers, petrophysicists and production engineers to design a staged vision for development of our gas fields. The result, annou nced in April 2026, is the Ro lling Cluster Development Strategy. It deploys capital incrementally across at least four phases, beginning with a compressed natural gas facility at Brakfontein that connects four existing wells to a central manifold and a mob ile, modular CNG plant, and s caling through hybrid CNG/LNG clusters to a full -field LNG or direct to existing infrastructure operation across our broader tenement package. Each phase is validated by the one before it, the inf rastructure is designed to carr y forward without re-engineering, and the programme has the capacity to be part -funded from early revenue. In doing so, it tr ansforms what would traditionally be a high -risk, single -site development into a sequence of manageable and well-understood gas producing phases. Underpinning that strategy is the Field Development Plan for Phase 1, completed by our technical team dur ing the June quarter and adopted by the Board shortly after year-end. The FDP is the document that turns a gas discovery into a gas producing project: it sets out the technical, commercial, regulatory and environmental steps required to produce ga s safely and efficiently, and it enables us to engage with South African government regulator, financiers, utili ties and off takers as a develo per rather than as an explore r. With the FDP adopted, we have commenced applications for a Bulk Sampling Permit — which permits limited production ahead of a full Production Right — and for a Production Right over area within Exploration Right 271. Our te nure position has also streng thened. The Petroleum Agency of South Africa granted the second of three term renewals of Explorati on Rights 270, 271 and 272 in August 2025, securing 2,983 km² for a further two years and taking our total permitted area to 5, 366 km², including ER383, on which Environmental Authorisation has been granted.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 4 Chairman’s Address (continued) Partnerships An asset of this scale is best developed in partnership, and during FY2026 o ur relationships moved from intention to firm commitment. • In September 2025 we ex ecuted a binding Joint D evelopment Agreement with FFS Refiners, converting the term sheet signed at the start of the year into a committed framework for Project Alpha. Kinetiko is the Operator for P hase 1a, which is jointly funde d to approximately R64.3 mi llion (A$5.7 million) and co vers co -funded drilling, well upgrades, gas testing and certification of reserves by a competent person. FFS advanced the first tranche of R6.2 million in November 2025. • Our joint venture with the Ind ustrial Development Corpora tion of South Africa, through Afro Gas Development SA (Pty) Ltd, remains in place as the vehicle for scaling to full-field LNG production. • We engaged Cresco, a leading South Afric an project finance group, to source development f inance and identify further project development partners now that the adoption of the FDP provides a concrete basis for their assessment. Board Enhancement We also strengthened the Board with the appointment of Mr Mxolisi Mg ojo as a Non -Executive Director in October 2025. Mr Mgojo led Exxaro Resources as Chief Executive Officer f or six years and has served as President of both the Minerals Council South Africa and Business Unity South Africa. His judgement on South African industry, government and capital markets is already proving valuable as we move into the permitting and financing phase. Capital Kinetiko was well supported by its share holders through the year. In November 2025, we raised $3.15 million, cornerstoned by Sou th African and Australian inves tors, with funds directed p rimarily to Phase 1a gas field development at Brakfontein, the production right application and gas testing. I n December we joined the OTCQB Market under the ticker KKOBF, broadening our a ccess to N orth American capital markets a nd our visibility with the energy majors, utilities, infrastructure groups and financiers that follow emerging gas developers. Subsequent to year-end, we received firm commitments for a further placement of approxi mately $5.4 million, again strongly suppo rted by our largest shareho lders as well as by new investors. Talent 10 Holdings, associated with Mr Mgojo, has committed $3 million of th at total, subject to shareholder approval. The proceeds are directed at drivi ng the fie ld development plan including, further exploration drillin g, gas production permitting, and building out our leadership team. In August 2026, we secured a further A$1.26 million in non -dilutive funding under a co -operation and settlement agreeme nt with Mu lilo Newcastle Wind Power, enab ling land use on ER 270 for the Newcastle wind power facility. The arrangement affects approximately 1.1% of that exploration right, and l eaves our rights outside the defined zones intact, and carries a right of fi rst refusal to supply gas should the Newc astle project procure gas-fired generation. The funds will be applied to expediting the Phase 1 production cluster at Brakfontein. Outlook for FY2027 The year ahead will be one of execution. Our priorities are to p rogress th e Bulk Sampling Permit and Production Right applications, to complete civil works, installation and commissioning of the Phase 1 CNG facility, to drill the Key Well that will determine the location of the Phase 2 cluster, and to advance potential for certification of additional gas reserves. With first commercial gas production targeted for in late 2027.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 5 Chairman’s Address (continued) The demand fundamentals for our product remain strong. South Africa’s energy supply constraints are acute, our granted exploration rights sit within th e country’s primary power -producing region alongside existing energy infrastructure and demand centres, and domestic appet ite for locally produced gas continues to build. Our task is to deliver into that market on schedule and within budget and, in doing s o, to begin converting our 2C contingent resource of approximately 6 Tcf into greater certified reserves and revenue. Acknowledgements On behalf of the Board, I thank our management team, staff, contractors and pa rtners in South Africa for their work thro ugh a demanding year, and f or a safety record of no accidents, injuries, health or environmental incidents across more than 15,051 person-hours. I also want to thank you, our shareholders, for your continued support and belief in Kinetiko’s vision throug h what has been a demanding b ut rewarding year. The Company enters FY2027 well funded and with a defined development plan, committed partne rs, a permitting pathway and a production target. Yours sincerely, Adam Sierakowski Executive Chairman
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 6 Directors’ Report The directors of Kinetiko Energy Ltd submit herewith the financial report o f the consolidated entity consist ing of Kinetiko Energy Ltd ( “the Company” or “Kinetiko”) and its con trolled entities ( “the Group”) for the financial year ended 30 June 2026. In order to comply wit h the provisions of the Corporations Act 2001, the Directors’ report as follows: Directors The names of the directors in office during the financial year and until the date of this report are: Adam Sierakowski Donald Mzolisa Jones Ncube Dirk Robert Bulder Robert Scharnell Mxolisi Donald Mbuyisa Mgojo (appointed 3 October 2025) Information on Directors Adam Sierakowski, Executive Chairman Mr S ierakowski is a lawyer a nd fo unding direct or of the legal firm Palisade Corporate (former ly Price Sierakowski). He has more tha n 22 years of experience in legal pra ctice, much of which he has s pent as a corporate lawyer, consulting an d advising on a range of transactions to a var iety of large private and li sted public entities. He has advised and guided ma ny companies undertaking IPO, RTO, fundraising and M&A activities in Australia and overseas. As the co-founder of Trident Capital, Mr Sierakowski has also advised a variety of public an d private clients on the structuring of transactions and has been enga ged in co -ordinating fundraising both domestically and overseas. He has acted as chairman of many listed and unlisted public companies and has expertise in a variety of sectors including resources, energy, technology, agri/aqu aculture, biotech, industrial and financial services. Mr Sierakowski is a member of the Australian Institute of C ompany Directors an d the Association of Mining Exploration Companies. Special responsibilities: - None Directorships held in other ASX-listed companies in the past 3 years: - Connected Minerals Limited, Non -Executive Director, appointed 3 December 201 8, resigned 26 August 2026. - Raptor Metals Limited, Non-Executive Chair, appointed 11 December 2025 – current. Donald Mzolisa Jones Ncube, Non-Executive Director Mr Ncube graduated w ith a master’s d egree in Ma npower Studi es at the U niversity of Manchester in December 1984. Mr Ncube is r ecognised and respected as one of the reput able pioneers of Black Economic Empowerment. He is the founder a nd former Chairman and C hief Executive Officer of Real Africa Holdings (Pty) Ltd, a listed company on the Johannesburg Securities Exchange, that unbu ndled and dist ributed assets worth 3 billio n Rand to shareholders in 2003. Mr Ncube carved his professiona l career in the mining i ndustry. He worked for t he Anglo -American Corporation for 22 co nsecutive years and was the first South African black to sit on the Board of Anglo- American Corporation. Mr Ncu be has a perform ance track r ecord as Chairman of successfu l corporations such as Sun International, Oceana Fishing Group, South African Airways and Atomic Energy Corporation.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 7 Directors’ Report (continued) Information on Directors (continued) Mr Ncube is currently the Chairman of Badimo and Afro Energy. Special responsibilities: - None Directorships held in other ASX-listed companies in the past 3 years: - None Dirk Robert Bulder, Executive Director Rob Bulder qualified as a Chartered Accountant in 1987 and has over 30 years of commercial experience. Mr Bulder has held numerous sen ior management and exec utive board positions i n the manufac turing, financial services, IT, air line and g as industries, over seeing multi -billion Rand budgets. Thes e positions included that of Group Financial Director o f Paragon Business Communications Ltd, a company listed on the Johannesburg Stock Exchange, as wel l as the pos ition of (acting) Executive Vice-President of South African Airways SOE and CEO of South Af rican Airways Tec hnical Division (Pty) Ltd, a multi -billion Rand division of SAA Ltd and that of the Vice President of Business Development for SAA Ltd. Mr Bulder has been the Finance Director of Badimo for more than a decade. Special responsibilities: - Oversee South African Governance requirements - Interim Chief Executive Officer (assumed December 2024) Directorships held in other ASX-listed companies in the past 3 years: - None Robert Scharnell, Non-Executive Director Mr S charnell is an experi enced international busi ness exe cutive with over 30 yea rs of dem onstrated achievement at C hevron Corporation in establishing and implementing business st rategy. He has conducted business in over 20 countries and under complex situations, for large values including negotiating multi-lingual agreements, sales/purchase transactions, and settling c laims and dispute s on the scale of over $1 billion in value. Mr Scharnell ’s breadth of experience extends beyond the core ener gy business, with a ca reer highl ight in managing the creation a nd implementation of an award w inning ec onomic development and soc ial impact project in Africa. This project transformed Chevron’ s approach to improving lives withi n t he communities i n which it operates. Special responsibilities: - None Directorships held in other ASX-listed companies in the past 3 years: - None
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 8 Directors’ Report (continued) Information on Directors (continued) Mxolisi Donald Mbuyisa Mgojo, Non-Executive Director (appointed 3 October 2025) Mr Mgojo is a director of Talent 10 Holdings Group, one of Kinetiko’s largest shareholders and has been in the mining industry since 2001. Prior to that, his career includes 10 years as a software engineer and 8 ye ars in the finance industry. Mr Mgojo has a BSc de gree in Computer Sc ience (Nort heastern Univeristy, USA), an Ho nours de gree in Energy Studies (Rand A frikaans University) , a Dipl oma in International Finance Management and an MBA (Henley Management College , UK) . Mr Mgojo has also completed a Societé Generale Inve stment Banking and Corporate Finance Programme (Kellogg, USA) and an Advanced Management Programme (Wharton). Career highlights include his appointment in April 2016 as CEO of Exxaro Resources Lim ited, succeeding Mr Sipho Nkosi, a position he held until his retirement in July 2022. Special responsibilities: - None Directorships held in other ASX-listed companies in the past 3 years: - None Company Secretary Simon Whybrow (ACPA, FGIA, FCG) Mr Whybrow is a Certified Practising Accountant and Chartered Secretary and h as over 25 years corporate and commercial experience within both ASX-listed and unlisted companies. Mr Whybrow was Chief Financia l Officer, Chief Operating Officer and Company Secr etary for AS X-listed security company Threat Pr otect Australia Ltd (ASX: TPS) from 2016 to 2020. Prior to that he was involved in several listed and unlisted, public and private, mining companies including chief financial officer and company secretary for RMA Energy Limited 2007 to 2010. Principal Activities The principal activity of the Group during the financial year was shallow conventional gas exploration. Operating Results The loss for the year ended 30 June 20 26 after providing f or inc ome tax amoun ted to $4,616,090 (2025: $5,542,251). The directors of the Compan y submit her ewith the operations report of th e Company for th e f inancial year ended 30 June 2026.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 9 Directors’ Report (continued) Review of Operations During the year the Group undertook the following activities: Production Testing and Drilling • Completed and tested tw o production test wells at Brakfontein w ithin Exploration Right 271 us ing the optimised drilling procedures developed during the prior year. Both wells are located within 500 metres of one another and of historic production test wells and form the foundati on of the initial producing cluster. • ER271-KA03PT06 – drilled in late August 2025 to a total depth of 405 metres, on time and on budget, with 141.5 metres of net pay sandstone logged between 175 and 388 metres. A choke test on completion recorded a peak ga s flow of 1,600 Mscfd, more than three t imes the best historical resul t at Brakfontein (500 Mscfd, January 2013) and more than four times the peak recorded at ER271 - KA03PT10. o Extended flow testing of ER271 -KA03PT06 delivered the Grou p’s highest sustained r ates to date, producing up to 188 Mscfd over the first 14 days. Follow ing an initial decline, flow plateaued after 27 days of continuous testing, by which time the well had re covered 4,432 Mscf at an average rate of 164 Mscfd. • ER271-KA03PT10 – drilled and completed in August 2025 to a total dept h of 417 metres, with geophysical logging confirming 144 metres of net pay between 199 and 395 metres. A choke test on completion recorded a peak gas flow of 370 Mscfd. o Extended flow testing of ER271-KA03PT10 showed no discern ible decline over 40 days of continuous flow, recovering 3,522 Mscf at an average rate of 91 Mscfd. • The two wells produced a combined volume of 7,954 Mscf during ext ended flow testing, with methane content consistently abov e 98%. Sustained rates from both wells materially exceeded the 50 Mscfd initial flow rate assumed by independent certifier Sproule B.V. in its July 2023 reserve assessment as the threshold for commercial viability. • Data from the extended flow tests was app lied to reservoir model ling, depl etion curve analysis and feasibility work, and subsequently incorporated into the Field Development Plan, including the identification of additional well locations for the next development phase.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 10 Directors’ Report (continued) Review of Operations (continued) Figure 1 – Project location map – a production-ready asset in South Africa’s primary energy-producing region, adjacent to major infrastructure and demand centres.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 11 Directors’ Report (continued) Review of Operations (continued) Figure 2 – Drilling rig on site for commencement of drilling at well 271-KA03PT06, Brakfontein.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 12 Directors’ Report (continued) Review of Operations (continued) Figure 3 – Production test well 271-KA03PT06 being choke tested.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 13 Directors’ Report (continued) Review of Operations (continued) Figure 4 – Production test well 2 71-KA03PT06 daily gas flow rate. The volume recovered during 27 days of continuous testing was 4,432 Mscf of approximately 98.5% methane. Rolling Cluster Development Strategy • Following completion of the production test well p rogramme, the Group worked wit h a team of geologists, seismologists, petrophysicists and production engineers to develop its understand ing of the Karoo Basin geology and to iden tify the optimal pathway to commercialise its contingent resource of approximately 6 Tcf (2C, gross). • In Apri l 2026 the Group announced the Rolling Cluster Development Strategy (RCDS), a staged, capital-efficient and risk-managed programme that replaces a single large-scale development with a sequenced roll-out in which capital is de ployed incrementally and each phase benefits from improved technical validation and commercial performance. The RCDS marks the Group’s transition from exploration to production. • Indicative phases of the RCDS, as refined during the year, are: o Phase 1 – establish a compressed natural gas (CNG) surface facility at the Brakfontein cluster using existing wells, connecting four wells to a centr al manifold and a mobile, modular CNG facility, and drill a Key Well to determine the Phase 2 cluster location; o Phase 2 – apply Phase 1 data to guide t he drilling of approximately 10 new optimised wells for a hybrid LNG/CNG production cluster; o Phase 3 – target a larger gas compartment with additional wells and a mini-LNG plant; and o Phase 4 – expand to a full -field LNG operat ion across the Group’s broader tenement package.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 14 Directors’ Report (continued) Review of Operations (continued) • Phase 1 infrastruct ure has been designed to be modular and integrated across subsequent phases, minimising re -engineering as clu sters are ad ded. The programme can be self -funded from early revenue, has optionality to attract joint -venture capital partners, and may provide access to existing South African government capital support programmes. Field Development Plan • The Group’s tech nical team c ompleted the Field Development Plan (FDP) for Phase 1 of the Brakfontein Rolling Cluster during the June 2026 quarter, with formal adop tion announced shortly after year-end. • The FDP is a strate gic blueprint setting o ut the tec hnical, commercial and environ mental steps required to extra ct natural gas from the Group’s contingent resources safely and efficiently. It covers field description and geological overview, reservoir management, drilling an d completion, productio n and processing facilities, project execution and management, regulat ory and permitting requirements, environmental and social impact assessment, technology, logistics and su pply chain, workforce development, risk and uncertainty management, and project monitoring and control. • The F DP is based on existing wells producing hi gh-methane gas with minimal impurities, which streamlines processing and supports a simplified and accele rated start -up. The gas is a shallow conventional accumula tion held in sandstone above the coals, sealed and compartmentalised by dolerite sills and dykes; it does not require fracking and is not a coal bed methane play. • The assessment underpinning the FDP facilitates engagement with South African capital partner s, including institutional financiers, government u tilities and development funds, and suppor ts access to strategic partner funding and project debt. Figure 5 – Brakfontein Phase 1 – proposed CNG production cluster (red) alongside completed pilot production wells (blue).
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 15 Directors’ Report (continued) Review of Operations (continued) Tenure and Permitting • The Petroleum Agency of South Africa (PASA) granted second -term renewals of Exploration Righ ts ER270, ER271 and ER272, w ith granting letters issued be tween 21 and 29 August 2025 for a further two-year term from the date of issue. The approved applications included work programmes providing for continued drilling of core and production test wells and further exploration acro ss all three tenements. • The re newals secure tenure ac ross 2,983 km² and bring the total permi tted area to 5,366 km² including ER383. • ER383 – Environmental Authorisation was granted during the September 2025 quarter. At 30 June 2026 the Group was awaiting a decision from the Department of Forestry, Fisheries and the Environment in respect of submissions made by interested and affected parties. • ER271 – the Production Right application progressed throughout the year. Following compl etion of the FDP, the Group commenced a Production Right a pplication and an appli cation for a Bulk Sampling Permit, the latter providing a faster permitting pathway that enables a limited volume of gas production ahead of the grant of a Production Right. Development Partnerships • In September 2025 the Group executed a binding Jo int Development Agre ement (JDA) with FFS Refiners (Pty) Ltd (FFS) and Kinetiko’s wholly owned subsidiary Afro Energy (Pty) Ltd, formalising the framework for co -developing Project Alpha, a sta ged liquefied natural gas (LNG) initiative targeting supply to the South African market. Ki netiko was appointed Operator for Phase 1a and mana ges all operational, permitting and reporting responsibilities. • Phase 1a comprises co -funded drilling of five addi tional production wells and upgrades to existing wells at Brakfontein, gas testing and appo intment of a competent person for certification of gas reserves, preparatio n of an LNG business case, a co -funded production right application, and formation of a JDA Steering Committee to oversee development activities. • Subsequent phases contemplated unde r the JDA are a 5,000 tpa LNG proof-of-concept plant to be developed through a special purpose vehicle held 50:50 by Kinetiko and FFS (Phase 1b), scale -up to approximately 25,000 tpa across an expanded production right area (Phase 2), and further expansion across additional Kinetiko tenements to a potential 125,000 tpa (Phase 3). • Phase 1a is jointly funded to an aggregate of approximately R64.3 million (A$5.7 million) . The initial R20 million budget is contributed 67.5% by K inetiko and 32.5% by FFS, with th e remaining R44.3 million funded equally. FFS advanced the first tranche of R6,200,000 (approximately A$560,000), net of a management fee of R300,000, to Afro Energy in November 2025. • The Group maintains its agreement with the Industrial Development Corporation of South Africa (IDC) to co-develop a gas pil ot plant and scale to a full production field LNG operation, through the joint venture entity Afro Gas Development SA (Pty) Ltd. • Cresco, a South African project finance gro up, was engaged to identify and s ource development finance opportunities and additional project development partners. • In October 2025 , the Executive Chairman and a majority of the Board hosted senio r South African government representatives at the Brakfont ein production test well cluster, demonstrating the scale and progress of the Group’s shallow conventional gas development in Mpumalanga.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 16 Directors’ Report (continued) Review of Operations (continued) Corporate • Mr Mxolisi Mgojo was appointed as a Non -Executive Director effective 3 Oct ober 2025. Mr Mgojo has more than 40 years’ experie nce across South African industry, includ ing as Chief Executive Officer of Exxaro Resources Limited from 2016 to 2 022, President of the Minerals Council South Africa from 2017 to 2021, and President of Business Unity South Africa from 2024. • The Company’s a pplication to join the OTCQB Market was a pproved and trading commenced on 23 December 2025 under the ticker KKOBF. The quotation broadens access to North American capital markets, supports US dollar tradin g during US market hours and i ncreases visibility w ith energy majors, utilities, infrastruct ure groups and financiers. The OTCQB structure imposes no additional reporting requirements, as the Company’s ASX disclosures already meet OTCQB standards. ESG (Environment, Social & Governance) • No accidents, injuries, health or environmental incidents wer e reported in any quarter during the year, across more than 15,051 person-hours worked. • Safety meetings were conducted before eve ry shift at well sites, with all wo rk executed in accordance with the Group’s health, safety and environment protocols. • The G roup’s activities supported 44 direct and indirect roles, comprising loca l South African employment, expatriate personnel, operatio ns c onsultants and supplier personn el across management, exploration, environmental, skilled, casual and legal functions. • Local procurement and employment continued to be prioritised, with South Afr ican suppliers and contractors engaged across drilling, wi reline logging, surface and downhol e equipment, water and waste management, environmental practice, safety management systems and legal services. • Environmental auditing, application support and comm unity engagement continued in support of the ER383 and ER271 applications. Funding • In Novembe r 2025 the Company received firm commitments from p rofessional and sophisticated investors to raise $3,152,97 1 (before costs) through the placement of 48,507,2 52 fully paid ordinary shares at $0.065 per share. The placeme nt was not underwritten and was com pleted in two tranches: 33,122,637 shares issued to unrelated participants within the Comp any’s capacity under ASX Listing Rule 7.1, and 15,38 4,615 shares subscrib ed for by related parties of Directors, which received shareholder approval at the annual general meeting held on 28 November 2025. • Funds raised were primarily allocated to Phase 1a g as production development at the Brakfontein cluster, the production righ t application, gas testing and certification of gas reserv es, with a portion applied to additional exploration activities and general working capital. • The Group ended the year with approximately $479,000 i n available funds, comprising $16 6,000 in cash and $313,000 held in joint venture entity balances (Afro Gas D evelopment SA (Pty) Ltd ) and funds advanced by FFS Refiners. The Group had no debt at 30 June 2026.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 17 Directors’ Report (continued) Review of Operations (continued) Competent Persons Statement Unless otherwise specifi ed, information in this report relating to operatio ns, exploration, and related te chnical comments has been co mpiled by reg istered Petroleum Geologist, Mr Paul Tromp, who has over 40 years of onshore oil and gas field experience. Mr Tromp consents to the i nclusion of this information in the form and context in which it appears. The Group confirms that it is not a ware of any n ew information or data that materially affects the information included in the relevant market announcements and that all material as sumptions and technical parameters underpinning the estimates in the relevant mark et announcement continue to apply and hav e not materially changed. Material Business Risks The Group makes every effort to identify ma terials risks and to manage these effective ly. This secti on does not attempt to provide an exhaustive list of risks faced by the Group or by investors in the Company, nor are they in order of significance. Actual events may be different to those described. The Boa rd aims to manage these risks by c arefully plann ing its activities and implementing risk co ntrol measures. Some of th e ris ks are, however, hig hly unpred ictable and the exten t to w hich th e Board ca n effectively manage them is limited. a) Tenure and access risk Applications While the Group does not antic ipate there to be any i ssues with the grant of its Exploration and Production Right applications, there can be no assurance that the applications (or any future applications) will be granted. While the Group considers the risk to be very low, there can als o be no assurance that when the relevant Exploration and Production Rights are granted, they will be granted in their entirety. In mitigation, however, we have received both written, verbal and impli ed support for our plans and projects from both the Regul ator (a State entity and gatekeeper for permitting) and th e Department of Minerals and Energy, the authority for the permit awarding. There is a ris k of NGO a ctivity that could delay, but not preclud e, the startup of activities in either an Exploration Right or Production Right area. Renewal Exploration rights ar e subject to periodic renewal. The extension of these rights falls under the discretion of the relevant regulatory authorities, including the Petroleum Agency of South Africa (PASA), and is subject to fulfilling all regulatory r equirements. Renewal conditi ons may include increased expenditure and wor k commitments or compulsory relinquishment of areas over a portion of the Rights. The imposition of new conditions or the inability to meet t hose condit ions may adversely affect the o perations, financial positio n and/or performance of the Group. Although w e have already entered a second renewal period, we have had no indication of any change in conditions. Access A number of the Ri ghts o verlap certain third-party interests th at may li mit the Group’s ability to c onduct exploration an d minin g activi ties, i ncluding pr ivate lan d a nd servitude s for railw ays, roads, grid lines an d pipelines. Where the Project overlaps pri vate land, exploration and mi ning ac tivity, the Company may r equire authorisation or consent from the owners of that la nd. The Group is requi red t o ente r into la nd access agreements to un dertake its proposed exp loration program on the Rights. However, the Group’s current proposed exploration program is not impacted by the kn own sites of registered heri tage significance. In any case where enviro nmental iss ues (incl uding heritage significance) ar e found to be in conflict with our field activities, our large geographical spread allows us to show flexibility to avoid said conflict.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 18 Directors’ Report (continued) Material Business Risks (continued) b) Exploration Risk Potential investors should understand that exploration and development are high-risk undertakings. There can be no assurance that exploration of the Project, or any other Rights that may be acquired in the future, will result in the disc overy of an economic gas reserve. Even if ap parently viable appraisal targets are identified, there is no guarantee that it can be economically exploited. To date, however, we have struck gas in 100% of the 46 boreholes we have drilled across our three existing tenements under Exploration Rights. The success of the Group will also depend upon the Group having access to sufficient development capital and access to gas exploration and production third party contractors to undertake e xploration activities, being able t o maint ain title to its projects and o btaining all requ ired approvals for its activitie s. In the even t tha t exploration pr ogrammes prove to be unsuccessful t his could lea d to a diminution in the value of the Exploration Rights, a reduction in the cash reserves of the Group and possible relinquishment of its projects. c) Climate Change The o perations and a ctivities of the Group are subject to changes to l ocal or int ernational compliance regulations related to climate change mitigation efforts, specific taxation or pe nalties for carbon emissions or environmental damage and othe r possible restraints on industry that may further impact the Group. While the Group will endeavour to manage these risks a nd limit any consequential impacts, there can be no guarantee that the Group will not be impacted by these occurrences. Climate chang e may also caus e certain physi cal and environmental risks that c annot be p redicted by the Group, including events such as increased severity of weather patterns, incidence of extreme weather events and longer-term physical risks such as shifting climate patterns. All these risks associated with climate change may significantly change the industry in which the Group operates. The Group’s approach is to focus on the mitigating consequence of gas as a greening effect on t he en vironmental landscape, a s it is de stined to replace coal and other polluting liquid fuels like heavy fuel oil and diesel for thermal industry usage and powe r generation. d) Reliance on Key Personnel The Group’s future depends, in part, on its ability to attract and retain key personnel. It may not be able to hire and retain s uch personne l at compensat ion l evels consis tent with its existing compensation and s alary structure. Its future also d epends on the continued c ontributions of its key m anagement a nd te chnical personnel, the loss of who se services wou ld be difficult to repl ace. In addi tion, the inab ility to continue to attract appropriately qualified personnel could have a material adverse effect on the Group’s business. e) Environmental The operat ions and proposed activit ies of the Group are subject to Australian a nd South African law s and regulations concerning the environment. As with most exploration projects, the Group’s activities are expected to have an impact on the environment, particularly if advanced exploration or development proceeds. It is the Group’s i ntention to conduct its activit ies to the highest s tandard of environmental obligation , incl uding compliance with all environmental laws. The disposal of mining and process wa ste and min e water discharge a re under constant le gislative scrutiny and regulation. The re is a risk that envir onmental laws and re gulations become more onerous makin g the Group’s op erations more exp ensive, however, thes e s tandards and specific ations follow an intern ational benchmark and are not expected to change. Approvals are required for land clearing and for ground disturbing activities. Delays in obtaining such approvals can result in the delay to anticipated exploration programmes.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 19 Directors’ Report (continued) Material Business Risks (continued) f) Black Economic Empowerment (BEE) According to relev ant legislation contained in t he Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) the BEE component of any company wishing to apply for Production Rights for mineral mining or petroleum extraction need to have no less than a 26% participation at the le vel of the Right s Holder for permit application processing to proceed. The Group is curren tly oversubscribed for their B EE part icipation due to Leve l 1 BEE investors from S outh A frica on the regis ter. The Upstream Pe troleum Resource and Development Bill was assented to on 29th October 2024 but will only come into effect at a future date determined by the Pr esident. This Act once i n ef fect requires a m inimum of 10% BEE participation and provides the state an option to acquire a 20% carried interest in all exploration and production rights. g) Economic General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Group, as well as on its ability t o fund its operations. h) Additional requirements for capital The Group’s capital requirements dep end on numerous factors. The Group may require further financing and any additiona l equity financing will dilut e shareholdings and debt financing, if available, ma y involve restrictions on financing a nd operat ing activities. If the Group is unable to obt ain addit ional financing as needed, it may b e required to r educe th e scop e of its operations. There is however no guarantee that the Group will be able to secure any additional funding or be able to secure funding on terms favo urable to the Group. Significant Changes in State of Affairs Significant changes in the state of affairs of the Group during the financial year were as follows: • On 4 September 2025, the Group announced that the Petroleum Agency of South Africa had granted the Group’s second renewal application for ER 270, 271 and 272 for a further term of two (2) years. The re newals secure tenure across 2,983 km² and bring the total permi tted area to 5,366 km² including ER383, underpinning the Group’s accelerated development strategy. • On 13 Septembe r 2025, the Group announced that it had executed a binding Joint Development Agreement (“JDA”) with FFS Refiners to co-develop Project Alpha at Brakfontein. Phase 1a provides for: • Co-funded drilling of five additional production wells • Upgrades to existing wells • Gas testing and reserve certification • Preparation of an LNG business case • Application for a production right Total Phase 1a funding is approximately R64.3 million, with staged contributions from both parties. On or about 5 November 2025, FFS advan ced the first tranche of funding of R6.2 million, net of fees, to Afro Energy (Pty) Ltd, Kinetiko’s wholly owned subsidiary. This advance form ed part of FFS’s total Phase 1a funding commitment of approximately R28.7 million.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 20 Directors’ Report (continued) Significant Changes in State of Affairs (continued) The JDA establishes a Joint Development Steering Committee and contemplates progression to: • Phase 1b, 5,000 tpa LNG proof-of-concept plant • Phase 2, 25,000 tpa LNG production • Phase 3, potential expansion to 125,000 tpa across additional tenements Execution of the JDA represented a significant milestone in the Group’s commercialisation pathway. • On 18 September 2025, following shareholder approval granted at the Company’s General Meeting to allow the Co mpany’s Directors to p articipate in the Plac ement annou nced on 12 June 2025 , 7,750,000 at $0.04 eac h and 7,750,000 free attaching options, represen ting a contribution of $310,000, were issued to Directors. Furthermore, 3,000,000 unlisted options were issued to Mr Robert Sch arnell following shareholder approval at the Company’s General Meeting. • On 3 October 2025, h ighly credentialed former Exxaro CE O, Mr Mxolisi Mgojo, was appointed as a Non-Executive Director , strengthe ning the Board as Kinetiko ad vances its S outh African gas commercialisation strategy. • On 3 December 2025, t he Group completed a placement raising approximately $3.15 million before costs t hrough the issue of 48,507,2 52 new fully paid ordinary shares at $0 .065 per share, cornerstoned by key South African and Australian investors. • On 23 December 2025, the Group commenced trading on the OTCQB Market in the United States under ticker KKO BF. The OTCQB quotation enhances visibility with North American investors and broadens access to gas -focused capital markets. The Group continues to comply with ASX r eporting requirements, which satisfy OTCQB standards. Matters subsequent to the end of the financial year • July 2026 – the Board adopted t he Field Devel opment Plan for Phase 1 of the Brakfontein Ro lling Cluster, bridging exploration and production. Adopt ion of the FDP enabled the commencement of gas production permitting applications, including a B ulk Sampling Permit and a Production Right o ver Exploration Right 271, and supports engagement with Sou th African governm ent entities, domestic energy utilities and local institutional investors. • July 2026 – the Company received firm commitments from profe ssional and sophisticated investors to raise approximately $5,400,000 (before costs) through the placem ent of approximate ly 180,000,000 fully paid ordinary shar es at $0.03 per share, a 14% discount to the last traded price of $0.035 on 27 July 2026. The pl acement was strongly supported by the Company’s largest sh areholders as well as new investors and is to be completed in t wo t ranches: 50,000,000 shares issued t o unrelated participants under ASX Listing Rules 7.1 and 7.1A, and 130,000,000 shares subject to shareholder approval under ASX Listing Rule 10.11. GBA Ca pital Pty Ltd was engaged as lead manag er and bookrunner. • Talent 10 Holdings (Pty) Ltd, a major shareh older related to Non-Executive Director Mr Mxolisi Mgojo, subscribed for 100,000,000 placement s hares representing a contribution of $3,000,000. The issue of these shares is subject to shareholder approval, to be sought at a general meeting. • Proceeds of the placement will be applied indicatively towards Phase 1 development of the CNG gas production facility, drilling of further exploration wells, gas produc tion permitting, securing a new chief executive officer, and co sts of the offer and working capital, t argeting first commercial gas in late 2027.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 21 Directors’ Report (continued) Matters subsequent to the end of the financial year (continued) • August 2026 – Afro Energy (Pty) Ltd executed a Co -operation and Settlement Agreement with Mulilo Newcastle Wind Pow er (MNWP) and Mulilo Renewable Project Developments, resol ving an overlap between Exploration Right 270 and the proposed Newcastle wind energy facility in KwaZul u-Natal. • Afro Energy granted MNWP exclusive use of a defined 18.54 km² exclusion zone, approxi mately 1.1% of ER270, and retains all exploration and related rights outside that zone, including the ability to renew or convert the Exploration Right. • Consideration is the Rand equivalent of A$1,2 60,720, non -dilutive, with a non -refundable 20% payable on execution and the balance following Financial Close of t he Newcastle project, targeted on or before 31 December 2026. Funds will be applied to expeditin g the Phase 1 gas production cluster at Brakfontein. • The Agreement also grants Afro Energy a right of first refusal to supply natural gas should gas -fired generation be procured for the project, although neither Mulilo party is obliged to procure gas. No other matters or circumstance has arisen since 30 June 2026 that has affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years. Likely developments and expected results of operations As Kinetiko Energy Ltd is listed o n the Australian Stock Exchange, it is subject to the continuous disclosure requirements of the ASX Listing Rules which require immediate disclosure to the market of information that is likely to have a material effect on the price or value of Kinetiko Energy Ltd securities. In the opinion of the Directors, it would prejudice the inter ests of the Group to provide additional information, beyond that which i s reported in this Annual Report, relating to likely developmen ts in the operations of th e Group and the expected results of those operations in financial years subsequent to 30 June 2026. Dividends Paid or Recommended No dividends were paid during the financial year (2025: nil) and no recommendation is made a s to payments of future dividends. Meetings of Directors During the financial ye ar, nine ( 9) meetings of Directors wer e held. A ttendances by each director were as follows: Number eligible to attend Number Attended Adam Sierakowski 9 9 Robert Bulder 9 9 Donald Ncube 9 9 Robert Scharnell 9 9 Mxolisi Mgojo 7 7
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 22 Directors’ Report (continued) Directors’ Share and Option Holdings As at the date of this report, the interests of the directors in the Company were: Director Ordinary Shares Unlisted Options Performance Rights Adam Sierakowski 80,325,836 6,000,000 7,500,000 Robert Bulder 35,919,384 3,250,000 5,000,000 Donald Ncube 253,120,880 5,000,000 - Robert Scharnell 3,111,865 5,500,000 - Mxolisi Mgojo 213,026,558 - - Share Options As at the date of this report, the unissued ordinary shares of the Company under option are as follows: Grant date Expiry date Exercise price Number under option 24 November 2023 31 December 2026 $0.12 24,750,000 29 August 2024 31 December 2026 $0.12 2,000,000 24 June 2025 30 June 2027 $0.07 55,075,000 4 September 2025 31 December 2026 $0.12 2,000,000 17 September 20251 23 August 2028 $0.12 3,000,000 86,825,000 1 The unlisted options were issued to Mr Robert Scharnell following shareholder approval granted on 17 September 2025. Performance Rights As at the date of this report, the performance rights on issue are as follows: Grant date Expiry date Number 27 November 2024 6 December 2029 20,000,000 20,000,000 Remuneration Report (Audited) The directors are pleased to present t he Group’s 20 26 remuneration rep ort whic h sets out re muneration information for the Group’s Non-Executive directors, managing director and other key management personnel. The report contains the following sections: (a) Principles used to determine the nature and amount of remuneration (b) Compensation of key management personnel (c) Services agreements (d) Shareholdings of key management personnel (e) Options on issue (f) Performance rights (g) Loans with key management personnel (h) Other transactions with key management personnel (i) Use of remuneration consultants (j) Voting and comments made at the Company’s 2025 Annual General Meeting The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 23 Directors’ Report (continued) Remuneration Report (continued) (a) Principles used to determine the nature and amount of remuneration The remuneration policy of the Gro up has bee n de signed to al ign director a nd execut ive o bjectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long- term incentives based on key performance areas affecting the company’s financial results. The board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the company. The board’s policy for determi ning th e natu re and amount of remunera tion for b oard members and senior executives of the Group is as follows: The remu neration policy , setting t he terms and conditions for the E xecutive Directo rs and other senior executives, was developed by the board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation. The Board of Directors (Board) rev iews executive packages annually by reference to the Group’s perfor mance, exec utive performance a nd comp arable information from industry sectors and other listed companies in similar industries. The B oard may exercise discretion in relation t o approving incentives, bonuses a nd options. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in s hareholder wealth . Exe cutives ar e a lso e ntitled to par ticipate in th e e mployee share and opti on arrangements. All remuneration paid to directors and executives is valued at the cost to the company and expensed. Shares given to directors and executives are valued as the d ifference between the market price of those shares and the amount pa id by th e director or executive. Optio ns are valued using the Black-Scholes or B inomial methodologies. Performance rights are valued based on the terms and conditions associated with the granting of the rights and recognised over time based on the vesting conditions. The Board polic y is to remunerate Non-Executive directors a t m arket rates for compar able companies fo r time, commitment and responsibilities. The Board determin es payments to the Non-Executive directors a nd reviews their remuneration annually based on market practice, duties and accountability. Independent external advice is so ught when r equired. The maxi mum aggregate a mount of fees that can be paid to Non -Executive directors is subject to ap proval by shareholders at the annual general meeting (currently $250,000). Fees f or Non-Executive directors are not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the directors a re encouraged to h old s hares in the company and a re able to participate in employee option plans. The objective of t he Group’s executive reward framework is set to att ract and retain t he most qualifi ed and experienced directors and senior exec utives. The board ensures that executive reward satisfies the following criteria for good reward governance practices: • Competitiveness • Acceptability to shareholders • Performance linkage • Capital management Directors’ fees A director may be paid fees or othe r amounts as the directors determine where a director performs special duties or otherwise performs services outside the scope of the ordinary duties of a director. A di rector may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 24 Directors’ Report (continued) Remuneration Report (continued) (a) Principles used to determine the nature and amount of remuneration (continued) Performance based remuneration An employee may be granted long term incentives by way of performance rights and options, which vest after certain predetermined periods of service. The Directors, Chief Exec utive Officer and other key m anagement personnel have been granted lo ng t erm incentives b y way of unlisted options and perfo rmance r ights which ves t upon the satisfaction of certain predetermined performance or service conditions. Details of these incentives are contained at paragraphs (e) and (f) below. Company performance, shareholder wealth and Directors’ and Executives’ remuneration The remuneration policy has been tailored to increase goal congruence between shareholders and Directors and Executives. This is facilitated through t he issue of o ptions or p erformance rights to Direc tors and Executives to encourage the alignment of personal and shareholder interests. The Group believes this policy will be effective in increasing shareholder wealth. At commencement of mine production, performance based bonuses based on key performance indicators are expected to be introduced. The table below sets out s ummary information about the Group’s earnings and mov ement in shareholder wealth for the year to 30 June 2026: 30 June 2026 $ 30 June 2025 $ 30 June 2024 $ 30 June 2023 $ 30 June 2022 $ Revenue and other income 124,152 211,456 358,224 102,403 718 Net loss before tax (4,615,260) (5,442,599) (5,232,581) (4,335,534) (5,818,849) Net loss after tax (4,616,090) (5,542,251) (5,232,581) (4,335,534) (5,818,849) Share price 0.039 0.06 0.082 0.087 0.066 Basic loss per share (cents) (0.3) (0.4) (0.4) (0.6) (0.9) Diluted loss per share (cents) (0.3) (0.4) (0.4) (0.6) (0.9) Dividends - - - - - Remuneration governance The Group has not formed a remuneration committee. The role of a remuneration committee is instead carried out by the full Board in accordance with the Nomination and Remuneration Committee charter. The Corporate Governance statement provides further information on the role of this committee.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 25 Directors’ Report (continued) Remuneration Report (continued) (b) Compensation of key management personnel The key manage ment personn el of the Group are the Directors, Chie f E xecutive Office r and the Company Secretary. There are no Executives, other than Directors, Chief Executive Officer and the Company Secretary, who have the authority and responsibility for planning, directing and controlling the activities of the Group. Directors Adam Sierakowski Executive Chairman Dirk Robert Bulder Executive Director; Interim Chief Executive Officer (assumed December 2024) Donald Mzolisa Jones Ncube Non-Executive Director Robert Scharnell Non-Executive Director Mxolisi Mgojo Non-Executive Director (appointed 3 October 2025) Company Secretary Simon Whybrow The em oluments for each Director an d ke y management personnel of the Group for the yea r e nded 30 June 2026 are as follows: Year ended 30 June 2026 Short-term Post Employment Salary & Fees $ Bonuses2 $ Non Cash $ Share Based Payments $ Superannuation $ Total $ Performance Based Remuneration % Directors A Sierakowski 208,890 34,815 7,326 - - 251,031 13.87% D Bulder 316,0001 42,000 7,326 - - 365,326 11.50% D Ncube 60,000 - 7,326 - - 67,326 - R Scharnell 60,000 - 7,326 96,8953 - 164,221 - M Mgojo (appointed October 2025) 45,000 - 7,326 - - 52,326 - Company Secretary S Whybrow 60,000 - - - - 60,000 - 749,890 76,815 36,630 96,895 - 960,230 1 Mr Bulders’ fees for the year is comprised of director fees of $60,000 plus a salary of $256,000 for his role as interim Chief Executive Officer of the Company. Refer to paragraph (c)(iii) below. 2 The Board resolved to remunerate Mr Sierakowski and Mr Bulder with discretionary bonuses as part of their performance in their respective roles as Executive Chairman and Interim Chief Executive Officer. 3 Refer to section (e) below for further details.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 26 Directors’ Report (continued) Remuneration Report (continued) (b) Compensation of key management personnel (continued) The emoluments for e ach Director a nd ke y management p ersonnel o f the Group for the year ended 30 June 2025 are as follows: Year ended 30 June 2025 Short-term Post Employment Salary & Fees $ Bonuses $ Non Cash $ Share Based Payments4 $ Superannuation $ Total $ Directors A Sierakowski 208,890 - 7,770 56,881 - 273,541 D Bulder 260,0001 - 7,770 42,661 - 310,431 D Ncube 82,0022 - 7,770 42,661 - 132,433 R Scharnell 60,000 - 7,770 - - 67,770 Chief Executive Officer N de Blocq (resigned December 2024) 191,1313 - 7,770 71,101 - 270,002 Company Secretary S Whybrow 60,000 - - 21,331 - 81,331 862,023 - 38,850 234,635 - 1,135,508 1 Mr Bulders’ fees for the year is comprised of director fees of $ 60,000 plus a salary of $200,000 for his role a s interim Chief Executive Officer of the Company. 2 Mr Ncube’s fees for the year is comprised of non-executive director fees of $60,000 plus consultancy fees of $22,002 relating to services associated with the renewal of exploration rights 271 and 272. 3 Mr de B locq resigned his role as Chief Executive Officer in December 2024. The total salary for the year includes compulsory medical contributions of $14,502. 4 Refer to Note 15(b) for further details. The total remaining bala nce of $266,631 was recognised as a share base d payment, of which $234,635 was in respect to key management personnel and $31,996 to other management personnel. (c) Service agreements The agreements related to remuneration are set out below: Current Agreements (i) The Company entered into an employment agree ment w ith Adam Sie rakowski, wher eby the base remuneration for se rvices prov ided by Mr Sierakowski as Executive Director of the Company i s $189,900 per annum. Effective from 1 January 2024, the remun eration was revised to $208,890 per annum. The term of th e e mployment agree ment commenced on 1 January 20 21 and continues until terminated in accordance with the agreement.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 27 Directors’ Report (continued) Remuneration Report (continued) (c) Service agreements (continued) (ii) The Company entered into a service agreement with Donald Ncube, whereby the remuneration for services provided by Mr Ncu be as No n-executive Director of the Company i s $ 60,000 per annum , commencing 21 September 2023. (iii) The Company entered into a service agreement with Dirk Robert Bulder, whereby the remuneration for services provided by Mr Bulder as a Director of the Company is $60,000 per annum, commencing 21 September 2023. During the year ended 30 J une 2025, the Company entered into an employment agreement with Mr Bulder, whereby the base remuneration for his services as the Interim Chief Executive Officer of the Company is $240 ,000 per ann um. The term of the emp loyment agr eement comme nced on 1 September 2024, however the effective date commenced in December 2024 upon the ceasing of Nicholas de Blocq Van Scheltinga’s role as Chief Executive Officer, and continues until terminate d in accordance with the termination provisions of the agreement. Key specifics of the terms of the employment agreement are as follows: Remuneration: $240,000 per annum Remuneration review: On or about 1 Oct ober 2025 and on each anniversary of that date thereafter Effective fro m 1 November 2025, the Company revised Mr B ulder’s remuneration to $264,000 per annum. (iv) The Company entered into a service agreement with Robert Scharnell, whereby the remuneration for services provided by Mr Scharnell as Non-executive Director of the Company is $60,000 per annum, commencing 24 November 2023. (v) The C ompany entered into a service agreement with Mxolisi Mgojo , wh ereby the remun eration for services provided by Mr Mgojo as Non-executive Director of the Compan y i s $60,000 per an num, commencing 3 October 2025. (vi) The Company has agreed wi th Trid ent Management Services Pty Ltd, a company in w hich Adam Sierakowski is a Director and shareholder, to pay $5,000 per month for Mr Simon Whybrow’s services as Company Secretary. Terminated Agreements There were no terminated agreements during the year ended 30 June 2026.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 28 Directors’ Report (continued) Remuneration Report (continued) (d) Shareholdings of key management personnel 2026 Balance at 01/07/25 No. Shares Held at Appointment No. Shares Purchased1 No. Shares Purchased2 No. Balance at 30/06/26 No. Directors A Sierakowski 78,325,836 - 2,000,000 - 80,325,836 D Bulder 35,669,384 - 250,0003 - 35,919,384 D Ncube 251,120,880 - 2,000,000 - 253,120,880 R Scharnell 361,865 - 2,500,000 250,000 3,111,865 M Mgojo (appointed October 2025) - 197,641,943 15,384,615 - 213,026,558 Company Secretary S Whybrow 573,916 - - - 573,916 366,051,881 197,641,943 22,134,615 250,000 586,078,439 1 Following shareholder approva l, shares purchased during the year related to the Company’s June and November 2025 Share Placements. 2 Shares purchased during the year through on-market purchases. 3 Pursuant to the Company ’s S eptember 2025 General Meeting, Mr Bulder and/or his nominee(s) were approved to participate in the June 2025 Share Placement a nd a pply for up to 1,250,000 shares, of which 250,000 shares were acquired under Mr Bulder’s name and the balance of 1,000,000 shares acquired by an associated nominee. (e) Options on issue 2026 Balance at 01/07/25 No. Options Held at Appointment No. Options Issued1 No. Options Issued2 No. Balance at 30/06/26 No. Directors A Sierakowski 4,000,000 - 2,000,000 - 6,000,000 D Bulder 3,000,000 - 250,000 - 3,250,000 D Ncube 3,000,000 - 2,000,000 - 5,000,000 R Scharnell - - 2,500,000 3,000,000 5,500,000 M Mgojo (appointed October 2025) - - - - - Company Secretary S Whybrow 1,750,000 - - - 1,750,000 11,750,000 - 6,750,000 3,000,000 21,500,000 1 Free attaching unlisted options were issued during the year as part of the June 2025 Share Placement. 2 Unlisted opti ons w ere issued following shareholder approval gra nted on 17 September 2025. Refer below for further details. June 2025 Placement Pursuant to shareholder appro val allowing the Com pany’s Directors to parti cipate in the June 2025 Share Placement, 7,750,000 share s at $0.04 each and 7,750,000 free att aching unlisted options were issued to the Directors and associated nominee on 18 September 2025.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 29 Directors’ Report (continued) Remuneration Report (continued) (e) Options on issue (continued) Director Options Following shareholder approval granted at a General Meeting held on 17 September 2025, 3,000,000 unlisted options were issued to Mr Robert Scharnell which vested immediately. The total fair value of the options granted was $96,895 which was calculated using the Black-Scholes option valuation methodology and applying the following inputs: Weighted average exercise price $0.12 Weighted average life of the options 2.93 years Weighted average underlying share price $0.077 Expected share price volatility 79.64% Risk-free interest rate 3.402% Expiry date 23 August 2028 Value per option $0.03230 (f) Performance rights 2026 Balance at 01/07/25 No. Balance at 30/06/26 No. Directors A Sierakowski 7,500,000 7,500,000 D Bulder 5,000,000 5,000,000 D Ncube - - R Scharnell - - M Mgojo (appointed October 2025) - - Company Secretary S Whybrow - - 12,500,000 12,500,000 During the year ended 30 June 2026, there were no changes to performance rights held by Directors. The total fair value of the performance rights granted to Directors was $850,000 which was calc ulated using the share price of $0.068 at the date that shareholder approval was granted, being 27 November 2024. Pursuant to t he terms and conditions, t he performance rights wi ll vest and conve rt into shares upon t he independent certification, in accordance with th e PRMS Guidelines, of 2P Reserves of a t least one (1) trillion cubic feet within the area comprising licences ER 270, 271, 272 and 383 (“Vesting Condition”). The performance rights were issued on 6 Decem ber 2024 and has a period of five (5) years from is sue date. To the extent tha t the perfo rmance rights have not converted into share s on or before the exp iry date, all unconverted performance rights held will automatically lapse. As the Board has assessed the probability of the vesting condition being achieved is 0%, no amount has been recognised in respect of the performance rights for the year ended 30 June 2026.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 30 Directors’ Report (continued) Remuneration Report (continued) (g) Loans with key management personnel No loans were advanced to or received from key management personnel during the year. (h) Other transactions with key management personnel Transactions with key management personnel related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. 2026 $ 2025 $ (i) Payments to Trident Management Services Pty Ltd, a company of which Adam Sierakow ski is a director and shareholder, for company secretarial services provided by Simon Whybrow. (ii) Payments to Palisade Cor porate, a company of which Adam Sierakowski is a director and s hareholder, for leg al services provided. 60,000 87,180 60,000 48,683 (iii) Payments to Trident Management Services Pty Ltd, a company of which Ad am Sierakowski is a director and shar eholder, for rental of office space. 24,000 24,000 Amounts outstanding at reporting date Aggregates amount payab le to Key Management Personnel and their related entities at reporting date. (i) Payables 163,678 172,273 (ii) Accrued expenses 39,408 - 203,086 172,273 (i) Use of remuneration consultants The Group did not employ the services of remuneration consultants during the financial year. (j) Voting and comments made at the Company’s 2025 Annual General Meeting The approval of the remuneration report was passed by way of a poll as indicated in the results of Annual General Meeting (AGM) dated 28 November 2025. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. The Company’s resolution to elect Mr Mxolisi Mgojo and re-elect Mr Donald Ncube as Directors were passed via a poll. The approval of the issue of 15,384,615 and 30,769,230 placement shares to Talent 10 Holdings (Pty) Ltd and Phefo Power (Pty) Ltd respectively, being entities related to Mr Mgojo, were passed via a poll. End of audited remuneration report
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 31 Directors’ Report (continued) Indemnification of Officers The Group has indemnified the directors and executives of the Group for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financia l year, the Group paid a p remium in respe ct of a contract to in sure th e directo rs and executives of the Group against a l iability to the extent permitt ed by the Corporations Act 2 001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium. Indemnification of Auditors The Group has not, during or s ince the financial year, ind emnified or agreed to indemnif y the auditor of the Group of any related entity against a liability incurred by the auditor. During the financial year, the Group has not paid a premium in respect of a contract to i nsure the auditor of the Company or any related party. Non-Audit Services The Group may decide to employ the auditors on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are important. The Directors are satisfied that the provision of non-audit services, during the year, by the auditor or a related practice of the auditor is compatible with the general standard of independence for a uditors imposed by the Corporations Act 2001. No non-audit services hav e be en p rovided by t he Group’s aud itors in the year e nded 30 June 202 6. Remuneration paid to the Group’s auditors is detailed in Note 17 of this report. Rounding of Amounts The Company is of a kind referred to in Corporations Instrument 2026/183, issued by the Australian Securities and In vestments Commission, relating to ‘rounding -off’. Amounts in this report have be en rounded off in accordance with that Corporation Instruments to the nearest thousand d ollars, or in certain cases, the nearest dollar. Auditor’s Independence Declaration A copy of the audi tor’s independence decl aration as req uired unde r se ction 307C of the Corporations Act 2001 is included in this Financial Report on page 34. Environmental Regulations The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. The Group has considered i ts c ompliance with t he N ational Greenhouse an d Ene rgy Reporting Act 2 007 which requires entities to report annual greenhouse gas emissions and energy use. Fo r the period of 1 July 2025 to 30 June 2026, the Directors have assessed that there are no current reporting requirements, but may be required to do so in the future.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 32 Directors’ Report (continued) Proceedings on Behalf of the Group No person has applied for leave o f Court to b ring procee dings on behalf of the Group or intervene in any proceedings to which the Group is party for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings. The Group was not a party to any such proceedings during the financial year. Signed in accordance with a resolution of the Board of Directors: Adam Sierakowski Chairman Dated at Perth, 23 September 2026
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 33 Consolidated Entity Disclosure Statement As at 30 June 2026 Name of entity Type of entity Trustee, partner or participant in joint venture % of share capital held Country of incorporation Australian resident Foreign jurisdiction(s) in which the entity is a resident for tax purposes (according to the law of the foreign jurisdiction) Kinetiko Energy Limited Body Corporate - N/A Australia Yes N/A Afro Energy (Pty) Ltd Body Corporate - 100 South Africa No South Africa Afro Gas Development SA (Pty) Ltd Body Corporate - 55 South Africa No South Africa Basis of preparation This Con solidated Entity Disclosur e Statem ent (CEDS) has been prepared in accordance with the Corporations Act 2001 , reflecting th e amendments t o sectio n 295(3A)(vi) an d (vii) which clarify the definition of foreign resident as being an entity that is treated as a resident of a foreign country under the tax laws of that fore ign country. These amendments apply for financial years begi nning on or af ter 1 July 2024. The CEDS includes certain information for each entity that was part of the cons olidated entity at the e nd of the financial year in accordance with AASB 10 Consolidated Financial Statements. Determination of tax residency Section 295(3B)(a) of the Corporation Acts 2001 defines Australian resident as having the meaning in the Income Tax Assessment Act 1997 . The dete rmination of tax residency involves judgement as the re are currently se veral differe nt interpreta tions that coul d be adopted, and w hich could give ris e to a differe nt conclusion on re sidency. Section 295(3A)(a)(vii) requires the determination of tax reside ncy in a foreign jurisdiction to be based on the law of the foreign jurisdiction relating to foreign income tax. In determining tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency The co nsolidated e ntity has applied curr ent legislati on and judicial p recedent, inc luding having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5. • Foreign tax residency Where necessary, the consolidated entity has used independent tax a dvisers in foreign jurisdictions to assist in determining tax residency and ensure compliance with applicable foreign tax legislation.
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Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. DECLARATION OF INDEPENDENCE BY DAVE ANDREWS TO THE DIRECTORS OF KINETIKO ENERGY LTD As lead auditor of Kinetiko Energy Ltd for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Kinetiko Energy Ltd and the entities it controlled during the year. Dave Andrews Director BDO Audit Pty Ltd Perth 23 September 2026 Page | 34
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Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. INDEPENDENT AUDITOR'S REPORT To the members of Kinetiko Energy Ltd Report on the Audit of the Financial Report Opinion We have audited the financial report of Kinetiko Energy Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: i) Giving a true and fair view of the Group’s financial position as at 30 June 2026 and of its financial performance for the year ended on that date; and ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. 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 auditor independence requirements of 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 audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to Note 1 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. Page | 35
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Key audit matters 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. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Carrying value of capitalised exploration and evaluation assets Key audit matter How the matter was addressed in our audit As disclosed in Note 10 to the Financial Report, the carrying value of capitalised exploration and evaluation expenditure represents a significant asset of the Group. Refer to Note 10 of the Financial Report for a description of the accounting policy and significant judgments applied to capitalised exploration and evaluation expenditure. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”), the recoverability of exploration and evaluation expenditure requires significant judgment in determining whether there are any facts or circumstances that exist to suggest that the carrying amount of this asset may exceed its recoverable amount. As a result, this is considered a key audit matter. Our procedures included, but were not limited to: Obtaining a schedule of the area of interest held by the Group and assessing whether the rights to tenure of those areas of interest remained current at balance date, which included obtaining and assessing supporting documentation such as license status records; Considering the status of the ongoing exploration programmes in the respective areas of interest by holding discussions with management, and reviewing the Group’s exploration budgets, ASX announcements and director’s minutes; Considering whether any such areas of interest had reached a stage where a reasonable assessment of economically recoverable reserves existed; Considering whether any facts or circumstances existed to suggest impairment testing was required; and Assessing the adequacy of the related disclosures in Note 10 of the financial report Other information The directors are responsible for the other information. The other information comprises the information contained in Directors’ report for the year ended 30 June 2026, but does not include the financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report, and the annual report, which is expected to be made available to us after that date. Page | 36
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Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, 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. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and will request that it is corrected. If it is not corrected, we will seek to have the matter appropriately brought to the attention of users for whom our report is prepared. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of: a) the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: i) the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 this financial report. Page | 37
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A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 22 to 30 of the directors’ report for the year ended 30 June 2026. In our opinion, the Remuneration Report of Kinetiko Energy Ltd, for the year ended 30 June 2026, complies with section 300A of the Corporations Act 2001. Responsibilities 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 responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit Pty Ltd Dave Andrews Director Perth, 23 September 2026 Page | 38
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 39 Directors’ Declaration The directors of the Group declare that: a) the financial statements and notes, as set out on pages 40 to 71 comply with A ccounting Standards and the Corporations Act 2001 and other mandatory professional reporting requirements; b) gives a true and fair view of the Group’s financial position as at 30 June 2026 and of its performance for the year ended to 30 June 2026; c) in the Directors’ op inion, the financ ial state ments and notes are pr epared in ac cordance with International Financial Re porting Standards and Interpreta tions as adopte d by the International Accounting Standards Board; and d) the information disclosed in the attached consolidated entity disclosure statement is true and correct. In the Directors’ opinion: (i) At the date of the declaration there are reasonable grounds to beli eve that the Company will be able to pay its debts as when they become due and payable; and (ii) the Directors have been given the declarat ions by the Chief Executive Officer and Chie f Financial Officer required by Section 295A of th e Corporations Act 2001 for the financial year ending 30 June 2026. This declaration is made in accordance with a resolution of the Board of Directors. Adam Sierakowski Chairman Dated at Perth, 23 September 2026
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 40 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2026 Note 30 June 2026 30 June 2025 $ $ Other Income Other income 2(a) 124,152 211,456 Total Income 124,152 211,456 Expenses Depreciation 9 (213,972) (146,235) Administration expenses (368,180) (304,715) Consultancy and professional costs 2(b) (753,836) (675,747) Employment and contractor expenses (1,132,352) (898,284) Travel expenses (108,703) (95,001) Occupancy expenses (36,588) (34,050) Foreign exchange gain/(loss) 2(b) 501,533 224,689 Share based payments 15 (145,463) (329,288) Exploration and evaluation expenditure 10 (2,478,784) (3,362,437) Interest expense and finance charges (3,067) (32,987) Total expenses (4,739,412) (5,654,055) Loss before income tax expenses (4,615,260) (5,442,599) Income tax expense 3 (830) (99,652) Loss after income tax expense for the year (4,616,090) (5,542,251) Other comprehensive income Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations 1,909,893 3,008,577 Total comprehensive loss for the year net of tax (2,706,197) (2,533,674) Total loss for the year attributable to: Owners of Kinetiko Energy Ltd (4,619,669) (5,560,481) Non-controlling interest 3,579 18,230 (4,616,090) (5,542,251) Total comprehensive loss attributable to: Owners of Kinetiko Energy Ltd (2,709,776) (2,551,904) Non-controlling interest 3,579 18,230 (2,706,197) (2,533,674)
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 41 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2026 The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. Note 30 June 2026 30 June 2025 $ $ Loss per share for loss from operations attributable to equity holders of the company: Basic loss per share (cents) 4 (0.3) (0.4) Diluted loss per share (cents) 4 (0.3) (0.4)
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 42 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2026 Note 30 June 2026 $ 30 June 2025 $ CURRENT ASSETS Cash and cash equivalents 5(a) 478,634 1,885,237 Receivables 7 40,171 168,206 Other 8 42,549 504,047 TOTAL CURRENT ASSETS 561,354 2,557,490 NON CURRENT ASSETS Property, plant & equipment 9 1,491,243 727,472 Capitalised exploration and evaluation assets 10 71,365,127 69,455,234 TOTAL NON CURRENT ASSETS 72,856,370 70,182,706 TOTAL ASSETS 73,417,724 72,740,196 CURRENT LIABILITIES Trade & other payables 11 731,883 720,196 Income tax - 11,224 Borrowings 12 124 109,984 TOTAL CURRENT LIABILITIES 732,007 841,404 TOTAL LIABILITIES 732,007 841,404 NET ASSETS 72,685,717 71,898,792 EQUITY Contributed equity 13(a) 108,267,554 104,919,895 Reserves 14(b) 7,381,284 5,325,928 Accumulated losses 14(a) (43,072,783) (38,453,114) Equity attributable to owners of Kinetiko Energy Ltd 72,576,055 71,792,709 Non-controlling interest 109,662 106,083 TOTAL EQUITY 72,685,717 71,898,792 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 43 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2026 Year ended 30 June 2026 Ordinary Shares $ Accumulated Losses $ Reserves $ Non- controlling Interests $ Total Equity $ Balance at 1 July 2025 104,919,895 (38,453,114) 5,325,928 106,083 71,898,792 Other comprehensive loss Loss for the year - (4,619,669) - 3,579 (4,616,090) Other comprehensive income - - 1,909,893 - 1,909,893 Total comprehensive loss for the year - (4,619,669) 1,909,893 3,579 (2,706,197) Transactions with owners in their capacity as owners Shares issued during the year 3,462,971 - - - 3,462,971 Share issue costs (115,312) - - - (115,312) Share based payments (refer to Note 15) - - 145,463 - 145,463 3,347,659 - 145,463 - 3,493,122 Balance at 30 June 2026 108,267,554 (43,072,783) 7,381,284 109,662 72,685,717 Year ended 30 June 2025 Ordinary Shares $ Accumulated Losses $ Reserves $ Non- controlling Interests $ Total Equity $ Balance at 1 July 2024 103,037,676 (32,892,633) 1,992,263 87,853 72,225,159 Other comprehensive loss Loss for the year - (5,560,481) - 18,230 (5,542,251) Other comprehensive income - - 3,008,577 - 3,008,577 Total comprehensive loss for the year - (5,560,481) 3,008,577 18,230 (2,533,674) Transactions with owners in their capacity as owners Shares issued during the year 1,897,200 - - - 1,897,200 Share issue costs (14,981) - - - (14,981) Share based payments (refer to Note 15) - - 325,088 - 325,088 1,882,219 - 325,088 - 2,207,307 Balance at 30 June 2025 104,919,895 (38,453,114) 5,325,928 106,083 71,898,792 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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KINETIKO ENERGY LTD ABN 45 141 647 529 Page | 44 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2026 Note 30 June 2026 30 June 2025 $ $ Cash flows from operating activities Payments to suppliers and employees (2,241,844) (1,716,404) Interest received 18,598 153,613 Interest and other costs of finance paid (12,930) (23,124) Payment of taxes (10,568) (36,284) Payments for exploration and evaluation expenditure (1,998,955) (3,400,685) Net cash used in operating activities 5(b) (4,245,699) (5,022,884) Cash flows from investing activities Deposit paid on property, plant and equipment - (256,612) Payments for property, plant and equipment (414,842) (441,924) Funds advanced from joint venture partner 142,964 - Net cash used in investing activities (271,878) (698,536) Cash flows from financing activities Proceeds from issue of ordinary shares 5(c)/13(a) 3,332,971 1,413,000 Proceeds for application of ordinary shares - 80,000 Proceeds from borrowings 12 - 500,000 Repayment of borrowings 12 (100,000) (125,000) Repayment of contributions from joint venture partners 12 - (1,400,849) Share issue costs (121,997) (72,220) Net cash provided by financing activities 3,110,974 394,931 Net decrease in cash and cash equivalents (1,406,603) (5,326,489) Cash and cash equivalents at the beginning of the financial year 1,885,237 7,211,726 Cash and cash equivalents at the end of the financial year 5(a) 478,634 1,885,237 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 Page | 45 Note 1: Summary of material accounting policies The conso lidated financial r eport includes the financial st atements and notes of K inetiko Ener gy Ltd (“Kinetiko” or “the Company”) and its controlled entities (“the Group”). The financial report is a general purpose financial report prepared in accordance with the requirements of th e Corporations Act 2001 , applic able A ccounting Standards and Interpretations and other mandatory pr ofessional reporting re quirements. The financial report of the Group also complies w ith International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IAS B). The Group is a for -profit entity for financial repo rting purp oses under Au stralian Accounting Standards. Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs. The financial statements were authorised for issue by the Directors on 23 September 2026. The notes to the financial statements are organised into the following sections: (a) Key performance: Provides a bre akdown of the key individual lin e items in the s tatement of profit o r los s a nd other comprehensive inco me that is most relevant to u nderstanding performance and shareholder returns for the year: Notes 2. Loss from operations 3. Income tax expense 4. Loss per share (b) Financial risk management: Provides information a bout the Group’s exposure and management of various financial ri sks and explains h ow these affect the Compa ny’s financial position and performance: Notes 5. Cash and cash equivalents 6. Financial risk management (c) Other assets and liabilities: Provides i nformation on othe r as sets and liabilities in t he statement of financial position that do not materially affect performance or give rise to material financial risk: Notes 7. Receivables 8. Other assets 9. Property, plant and equipment 10. Capitalised exploration and evaluation assets 11. Trade and other payables 12. Borrowings (d) Capital structure: This section o utlines how the Group manages its capital s tructure an d related financing costs (where applicable), as well as capital adequacy and reserves: Notes 13. Contributed equity 14. Reserves and accumulated losses
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 46 Note 1: Summary of material accounting policies (continued) (e) Other: Provides informat ion on i tems which require dis closure to com ply with Australian Accounting Sta ndards and other regulatory pron ouncements however, ar e not considered significant in understanding the financial performance or position of the Group: Notes 15. Share based payments 16. Key management personnel disclosures and related party transactions 17. Remuneration of auditors 18. Investment in controlled entities 19. Commitments and contingencies 20. Segment information 21. Events occurring after reporting period 22. Other accounting policies 23. Parent entity information Basis of consolidation The c onsolidated financial st atements comprise of the financ ial stateme nts of Kinetiko En ergy Ltd (“Kinetiko” or “the Company”) and its controlled entities (“the Group”) as at 30 June 2026. Subsidiaries are all those entities ( including special pu rpose entit ies) over wh ich t he Company has control. The Company co ntrols an e ntity wh en the Com pany is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. The financial statements of the subsidiaries are prepared for the same reporting pe riod as the Company, using consistent accounting policies. In preparing th e co nsolidated f inancial statements, all intercompany balances and transactions, income and expenses and profit and l osses resul ting from i ntra-company transactions have been elim inated i n full. Subsidiaries are fully consolidated from t he date o n which co ntrol is obtaine d by the Company and cease to be consolidated from the date on which control is transferred out of the Company. The acquis ition of subsidiaries is accounted for u sing the acquisition meth od of accounting. The acquisition method of accounti ng involves reco gnising a t acquisition date, separately from g oodwill, the identifiable assets acquired, the liabilities assumed and any no n-controlling interest in the acquiree. The identifiable assets acquired, and the liabilities assumed are measured at their acquisition date fair values. The difference between the above items and the fair value of the consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition. A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction. Going concern This report has been prepared on the going concern basis, which contemplates the continuity of normal business activ ity and the realisation of assets and se ttlement of l iabilities in the n ormal course of business. For the year ended 30 June 2026, the Group recorded a loss of $4,616,090 (2025: $5,542,251) and had net cash ou tflows fro m operating and investing ac tivities of $4,517,577 (2025: $5,721,420). At 30 June 2026, the Group had a working capital deficit of $170,653 (2025: surplus of $1,716,086).
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 47 Note 1: Summary of material accounting policies (continued) Going concern (continued) In context of this ope rating en vironment, the ability o f the Group to continue a s a goi ng concern is dependent on securing additional funding through debt or equity to continue to fund its operational and exploration activities. These conditions indicat e a material u ncertainty tha t ma y cast a significant dou bt about the Group’s ability to continue as a going concern and, therefore, that it ma y be un able to realise its assets an d discharge its liabilities in the normal course of business. The financial s tatements have been prepared on the basis that the Group is a goi ng concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the following reasons: • As disclosed in Note 21, subsequent to balance date, the Group announced that it has received firm commitments from professional and soph isticated investors to raise approxima tely $5.4 million before costs; • The Directors believe they can raise additional funding through debt or equity and has a recent proven history of successfully raising capital; and • Cash spending can be reduced or slowed below its current rate if required. Should the Group not be able to continue as a g oing concern, it may be r equired to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the fi nancial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern. Foreign currency The f inancial statements are pr esented in Australian do llars, which is the Company’s functional and presentation currency. Foreign curr ency transactions are t ranslated into the f unctional currency u sing the excha nge rate s prevailing a t the dates of the tra nsactions. F oreign exchange gain s and lo sses resu lting f rom the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the r eporting d ate. T he revenues an d expenses of fo reign op erations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of t he transactions, for t he pe riod. All resulting foreign e xchange di fferences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 48 Note 1: Summary of material accounting policies (continued) Critical accounting judgements, estimates and assumptions The preparation of t he financial statements requires management to m ake judgements, estimates and assumptions that af fect th e reported amount s in the financial statements. Managem ent co ntinually evaluates i ts j udgements and e stimates in r elation t o assets, li abilities, contin gent liabilitie s, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and o n oth er various factors, inclu ding e xpectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will s eldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to t he carrying amounts of assets and liabilities are d iscussed below and found in the following notes: Note 10: Capitalised exploration and evaluation assets Note 15: Share based payments New, revised or amending Accounting Standards and Interpretations adopted The Group has adopted all of the new, revised or amending Accounting Standa rds and Interpretations issued b y the Austra lian Accounting Standards Board (AASB) that are mandatory for the curr ent reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Any significant impact on the accounting policies of the Group from the adoption of these Acco unting Standards and Interpretations are disclosed in Note 22. The adoption of these Acc ounting Standards and Interpretations did not have any significant impact on the financial performance or posit ion of the Group.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 49 Note 2: Loss from operations 2026 $ 2025 $ Loss from operations before income tax includes the following items of income and expenses (a) Other Income Interest income 18,598 153,613 Other income 105,554 57,843 Other income 124,152 211,456 (b) Significant Expenses Consulting and professional costs - Auditing costs 163,951 124,957 - Legal fees 101,581 47,371 - Accountancy fees 150,734 93,714 - Bookkeeping fees 52,461 95,964 - Other professional fees 285,109 313,741 753,836 675,747 Foreign currency gain (501,533) (224,689) Accounting Policy Interest Income Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Note 3: Income Tax Expense (a) The prima facie income tax expense on pre-tax accounting loss reconciles to the income tax expense in the financial statements as follows: 2026 $ 2025 $ Loss from operations (4,615,260) (5,442,599) Income tax benefit calculated at 25% (2025: 25%) (1,153,815) (1,360,650) Non-deductible legal fees 25,395 11,843 Non-deductible share based payments 36,366 82,322 Non-deductible exploration expenditure 619,696 840,609 (Non-assessable)/non-deductible foreign exchange (125,383) (56,172) Other adjustments 623 63,672 (597,118) (418,376) Movements in unrecognised timing differences 34,855 (35,916) Unused tax losses not recognised as a deferred tax asset 563,093 553,944 Income tax expense reported in the Statement of Profit or Loss and Other Comprehensive Income 830 99,652
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 50 Note 3: Income Tax Expense (continued) (b) Unrecognised deferred tax balances: The following deferred tax assets have not been brought to account: 2026 $ 2025 $ Unrecognised deferred tax asset – tax losses 2,312,5691 2,049,6631 Unrecognised deferred tax asset – other temporary differences (59,939) 9,017 Net deferred tax assets not brought to account 2,252,630 2,058,680 1 Further to the Company’s acquisition of the remaining 51% interest in Afro Energy (Pty) Ltd, there are potential further net deferred tax assets in respect of foreign tax losses (with an estimated potential value of circa $2.3 million) that are being reviewed and therefore have not been included above due to their uncertainty. The taxation benefits of tax losses and temporary differences not brought to account will only be obtained if: (a) assessable income is derived of a nature and of a mount sufficient to enable the benefit from the deductions to be realised; (b) conditions for deductibility imposed by the law are complied with; and (c) no changes in tax legislation adversely affect the realisation of the benefit from the deductions. Accounting Policy Current tax Current tax is calculated by reference to the amount of income tax pa yable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax Deferred tax is ac counted for using the liability method in respect of temporary differences arising from differences bet ween t he c arrying amount of assets and liabilities in the fi nancial s tatements and the corresponding tax base of those items. In principle, de ferred tax l iabilities are recognised for all ta xable t emporary differences. Deferred tax assets are recognised to the extent th at it is pro bable that sufficient taxable am ounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be recognize. However, deferred tax assets an d liabilities are not recognised if the temporary differences giving rise to them a rise fro m the initial r ecognition of assets and liabilities ( other than a s a result of a b usiness combination) which a ffects nei ther t axable income nor a ccounting profit. Fu rthermore, a def erred tax liability is not recognised in relation to taxable temporary differences arising from goodwill. Deferred tax liabilities are recognised for taxable tempor ary differences a rising on inv estments in subsidiaries, branches, associate s and joint ventures e xcept where the entity is able to c ontrol t he reversal of the temporary differences and it is prob able that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these inves tments and interests are onl y recognised to th e e xtent that it i s probable that the re will be sufficient taxable profits against which to recognise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 51 Note 3: Income Tax Expense (continued) Deferred tax as sets and liabilities ar e meas ured at the ta x rates tha t are expected to a pply to th e period(s) when the asset and liability giving rise to them are recognise or settled, based on tax r ates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax a ssets and li abilities are offset when they relate to inc ome taxes levied by the same taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the period Current and deferred tax is recognised as an expense or income in the Consolidated Statement of Profit or Loss and O ther Comprehensive Income, except when it relates to items credited or d ebited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess. Note 4: Loss per Share 2026 Cents Per Share 2025 Cents Per Share Basic loss per share: (0.3) (0.4) Diluted loss per share: (0.3) (0.4) The loss for the year and the weighted average number of ordinary shares used in the calculation of basic loss per share are as follows: 2026 $ 2025 $ Loss for the year after income tax (4,619,669) (5,560,481) 2026 No. 2025 No. Weighted average number of ordinary shares for the purposes of basic earnings per share 1,514,979,951 1,433,470,553 Accounting Policy Basic earnings per share is c alculated as a net profit attributable to the owners of Kinetiko Energy Ltd , adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is ca lculated as n et profit attributable to the owners of Kineti ko Energy Ltd, adjusted for: • costs of servicing equity (other than dividends) and preference share dividends; • the after t ax ef fect of dividends and interest ass ociated wit h di lutive pot ential ordinar y shares that have been recognised as expenses; and • other non-discretionary changes i n revenues or expenses d uring the period t hat would result from the dil ution of potential or dinary shares; divided by the weighted average num ber of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 52 Note 5: Cash and Cash Equivalents (a) Reconciliation of Cash For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks. Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related items in the Consolidated Statement of Financial Position, as follows: 2026 $ 2025 $ Cash at bank and in hand 166,417 1,638,198 Restricted cash – Afro Gas Development SA (Pty) Ltd1 248,706 247,039 Restricted cash – FFS Refiners (Pty) Ltd2 63,511 - 478,634 1,885,237 1 Represents monies held in Afro Gas Development SA (Pty) Ltd, a joint development entity incorporated to pool the interests of Afro Energy (Pty) Ltd and the Industrial Development Corporation of South Africa for the development of gas fields to produce gas for industrial, commercial, transportation or power generation applications. 2 Represents monies contributed by FFS Refiners (Pty) Ltd as part of a joint development agreement to co-develop a pilot LNG plant at Brakfontein. The cash and ca sh equival ents disclosed abo ve a nd in the C onsolidated Statement of Cash Flow s includes re stricted cash ho wever these funds are n ot available for general use by the other en tities within the Group. Refer to Note 6 for the Group’s financial risk management on cash. (b) Reconciliation of Operating Loss After Income Tax to Net Cash Flow from Operations 2026 $ 2025 $ Loss for the year (4,616,090) (5,542,251) Depreciation 213,972 146,235 Share based payments 145,463 329,288 329,288 Interest accrued - 9,863 9,863 Changes in assets and liabilities: Trade and other payables (103,234) (385,949) Receivables 120,073 437,660 Provisions 14,550 (5,340) Prepayments (20,433) (12,390) (12,390) Net cash used in operating activities (4,245,699) (5,022,884) (3,636,601)
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 53 Note 5: Cash and Cash Equivalents (continued) (c) Non-Cash Financing and Investing Activities Year ended 30 June 2026 On 18 September 2025, followi ng shareho lder approval at a General Meeting , trade payables of $50,000 and share appl ication funds received in advance of $80,000 were satisfied via the issue of shares at $0.04 per share. Furthermore, 7,750,000 free attachi ng options exercisable at $0.0 7 each on or before 30 J une 2027 were issued to Directors and their related parties th at participated in the Company’s June 2025 Share Placement. Year ended 30 June 2025 On 21 N ovember 2024, 50,000 fully paid ordina ry shares at $0. 084 per sh are were issue d to an employee as part of their remuneration package. Refer to Note 15(a) for further details. On 27 November 2024, fo llowing shareholder appro val at the C ompany’s A nnual Gene ral Me eting, a total of 20,000,000 performance rights were granted to Directors and other management personnel. On 24 June 2025, as part of the C ompany’s Share Placement, trade payables a nd borrowings totalling $480,000 were satisfied v ia the issue of shares at $0.04 per sha re. Refer to Note 13(a) for furth er details. On 24 June 2025, 47,3 25,000 free attachi ng options exercisable at $0.07 each on or before 30 June 2027 were issued as part of Company’s Share Placement. Note 6: Financial Risk Management Financial risk management and policies The Group’s exploration ac tivities are being fun ded by eq uity and are not exposed to s ignificant financial risks . There are no speculative o r finan cial derivat ive instrumen ts. Funds ar e invested for various short term periods to match forecast cash flow requirements. The Company holds the following financial instruments: 2026 $ 2025 $ Financial assets Cash and cash equivalents 478,634 1,885,237 Trade and other receivables 40,171 168,206 518,805 2,053,443 Financial liabilities Trade payables and accruals 731,883 720,196 Borrowings 124 109,984 732,007 830,180 The Group’s principal financial instruments comprise cash and short-term deposits. The main purpose of these financial instruments is to fund the Group’s operations.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 54 Note 6: Financial Risk Management (continued) It is, and has been thr oughout the peri od under revi ew, the Group’s policy that no tra ding in financial instruments shall be und ertaken. T he m ain ri sks arising from t he Group are capital risk, credit ris k, liquidity risk, and interest rate risk. The Board reviews and agrees poli cies for managin g each of these risks and they are recognised below. (a) Credit risk Cash a t b ank is held w ith internationally regulated banks. A s at 30 June 2026, all c ash and cash equivalents were held with AA rated banks. The Group obtains guarantees whe re appropriate t o mitigate c redit risk. The maximum ex posure to credit risk at the reporting date to recognised financial assets is the carrying amount, as disclosed in the consolidated statement of financial position and notes to the financial statements. The Group does not hold any collateral. No p rovisions have been made against these receivables as the f ull balance are expected to be recovered. Refer to Note 7 for further details. (b) Capital risk The Group’s objectives when managing capi tal are t o safeguard thei r ability to con tinue as a going concern and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets to reduce debt. During the year ended 30 June 2 026, the Group’s strategy was to keep borrowings to a minimu m. The Group’s equi ty ma nagement is determined b y funds required to undertake exp loration activit ies and meet its corporate and other costs. (c) Liquidity risk Maturity profile of financial instruments Prudent li quidity risk ma nagement implies maint aining suf ficient c ash b alances and access to eq uity funding. The Group’s exposure to the risk of changes in market interest rates relate primarily to cash assets and floating interest rates. The d irectors mo nitor the cash -burn rate of the Group on a n on -going basis aga inst budget an d the maturity profiles of financial assets and liabilities to manage its liquidity risk. As at repor ting dat e the Group had insufficient cash reser ves to meet it s requirements, however as disclosed in Note 21 , subsequent to balance date, the Group announced th at it has received firm commitments from pro fessional and sophistic ated investors to raise approximately $5.4 million before costs. The Group has no access to credit standby fac ilities or arrangements for further funding or borrowings in place.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 55 Note 6: Financial Risk Management (continued) The finan cial liabi lities the Group had at reporting date were trade payabl es incurre d in the normal course of t he business and borrowings . T hese were non -interest bearing a nd we re due wi thin the normal 30-60 days terms of creditor payments. The f ollowing table s ets out the carr ying amount, by m aturity, of the finan cial in struments including exposure to interest rate risk: As at 30 June 2026 <1 year 1 – 5 years Over 5 years Total Weighted average effective interest rate % Financial Assets: Cash 478,634 - - 478,634 1.57 Receivables & other 40,171 - - 40,171 - 518,805 - - 518,805 Financial Liabilities: Trade payables & accruals 731,883 - - 731,883 - Borrowings 124 - - 124 - 732,007 - - 732,007 As at 30 June 2025 <1 year 1 – 5 years Over 5 years Total Weighted average effective interest rate % Financial Assets: Cash 1,885,237 - - 1,885,237 3.38 Receivables & other 168,206 - - 168,206 - 2,053,443 - - 2,053,443 Financial Liabilities: Trade payables & accruals 720,196 - - 720,196 - Borrowings 109,984 - - 109,984 24.00 830,180 - - 830,180 (d) Interest rate risk The sensitivity a nalysis h as not been d etermined f or the expo sure to interes t rate ris k, beca use the directors of the Group consider it to be immaterial. (e) Foreign exchange risk The Group operates internationally and is currently exposed to foreign exchange risk with respect to the South African Rand, the US Dollar and the Great Britain Pound sterling. Foreign exchange ri sk ar ises from future co mmercial transactions and reco gnised assets and lia bilities denominated in a cur rency t hat is not the en tity’s functional curr ency. The risk is measur ed using sensitivity analysis and cash flow forecasting. If the foreign exchange rates strengthened or weakened by 20% with all other va riables held constant the Group’s net asset value would have been $56,000 higher or $56,000 lower.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 56 Note 6: Financial Risk Management (continued) The Group’s exposure to foreign currency risk at the end of the reporting year, expressed in th e South African Rand and the US Dollar was as follows: 2026 ZAR USD AUD Cash 4,889,194 - 432,435 Receivables 43,227 - 3,823 Trade and other payables (1,769,602) - (156,516) Income tax (10,445) - (924) Borrowings (1,400) - (124) 2025 ZAR USD AUD Cash 5,899,214 - 507,804 Receivables 7,238,540 - 623,094 Trade and other payables (659,834) (22,906) (91,759) Income tax (130,393) - (11,224) Borrowings (1,400) - (121) (f) Fair value estimation The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The Group’s principal financial instruments consist of cash and deposits with banks, accounts receivable, trade payabl es and borrowings . The main purpose of t hese non -derivative fin ancial ins truments is to finance the entity’s operations. Note 7: Receivables 2026 2025 $ $ Other receivables – VAT (payable)/refundable (16,974) 82,498 Other receivables – GST refundable 52,282 26,815 Other receivables 4,863 58,893 40,171 168,206 None of th e other receivables a re past due or imp aired. Refer to Note 6 for the Group’s financial risk management and policies.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 57 Note 8: Other Assets 2026 2025 $ $ Prepayments – other 42,549 22,115 Deposits paid - 481,932 42,549 504,047 Note 9: Property, Plant and Equipment 2026 2025 $ $ Opening net book value 727,472 191,772 Additions 977,743 681,935 Depreciation charge for the year (213,972) (146,235) Closing net book value 1,491,243 727,472 Cost 1,985,977 1,025,229 Accumulated depreciation (510,960) (296,988) Foreign exchange differences 16,226 (769) 1,491,243 727,472 Accounting Policy Each clas s of property, plant a nd equipment is carried at co st less any acc umulated depreciation. T he carrying amount of plant and equipment is r eviewed annually by directors to ensure it is n ot in excess of the recoverable amount from these assets. The depreciable amount of all f ixed assets is depr eciated on a diminishing value basis over their useful lives to the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Plant and equipment 10% to 66.67% Note 10: Capitalised Exploration and Evaluation Assets 2026 2025 $ $ Opening balance 69,455,234 66,446,657 Foreign exchange differences 1,909,893 3,008,577 Closing balance 71,365,127 69,455,234 During the year ended 30 J une 2026, the Group incurred $2,478,784 (2025: $3,362,437) in exploration and evaluation related expenditure th at was expensed through the Consolid ated Statement of Pro fit or Loss and Other Comprehensive Income. Accounting Policy Exploration and evaluation costs Exploration a nd evaluation expenditur es are expensed as in curred, except for a cquisition costs associated with rights to explore.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 58 Note 10: Capitalised Exploration and Evaluation Assets (continued) Exploration assets acquired from third party are carried forward provided that either i) the carrying value is expected to be recouped thr ough the succe ssful development and exp loitation or sal e of an area of interest or ii) exploitation and/or evaluation activities in the area have not yet reached a stage that permits a reasonable assessment of the existence or otherwis e of economically recoverable reserves, active and significant operations in relation to the area are cont inuing a nd the rights of the tenure are cu rrent. If capitalised exploration and evaluation costs do not meet either of these tests, they are expensed to profit and loss. Each area of interest is reviewed at least bi-annually to determine whether it is appropriate to continue to carry forward the capitalised costs. Upon appr oval for the devel opment of a n area of interest, accumulated expendit ure for the area o f interest is transferred to capitalised development expenditure. Critical accounting judgements, estimates and assumptions The ultimate recoupment of the value of exploration and evaluation assets is dependent on the successful development and commercial exploitation, or al ternatively s ale, of t he u nderlying mineral exp loration properties. The Group undertakes at least on a bi-annual basis, a comprehensive review for indic ators of impairment of those a ssets. Should an indicator of i mpairment exist, there is significant es timation and judgement in determining the inputs and assumptions used in determining the recoverable amounts. During the year ended 30 June 2026, the Group con ducted an impairment assessment in relation to the capitalised exploration and evaluation assets. Based on the assessment, no impairment indicators were identified and therefore no impairment has been recognised. Note 11: Trade and other payables 2026 $ 2025 $ Trade payables and accruals 465,286 547,923 Trade payables and accruals – related parties1 203,086 172,273 Other payables – FFS Refiners (Pty) Ltd2 63,511 - 731,883 720,196 1 Refer to Note 16 for further details. 2 Refer to Note 19(iii) for further details. Other payables represent the balance of FFS Refiner (Pty) Ltd’s advance of ZAR 718,000 (approximately A$63,511) as part of its Tranche 1 commitment. Refer to Note 6 for the Group’s financial risk management and policies. Trade pa yables are normal ly settled o n 30 day terms. Trade pa yables are curre ntly being s ettled in excess of 60 d ay terms. The amount of payables at reporting date ex ceeding norm al tradin g te rms is $152,273. Accounting Policy Trade payables and ot her accounts payable are recognis ed when the Group becomes obliged to make future payments resulting from the purchase of goods and services.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 59 Note 12: Borrowings 2026 $ 2025 $ Opening balance 109,984 1,467,441 Loan – Other - 500,000 Repayments (100,000) (1,525,849) Conversion of debt to equity - (400,000) Accrued interest payable (9,863) 9,863 Foreign exchange differences 3 58,529 Closing balance 124 109,984 Refer to Note 6 for the Group’s financial risk management and policies. Accounting Policy Borrowings are i nitially recognis ed at fair value, net of transaction costs incurred. Borrowings are subsequently me asured at amortised cost. Any dif ference be tween the proceeds (n et of tr ansaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Borrowings are d erecognised when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability t hat has been extinguished or transferred to another party and the consideration paid, including any non- cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the Company has an unconditional rig ht to defer settlement of the liability for at least 12 months after the reporting period. Borrowing c osts i nclude interest expense calculated u sing the ef fective interest m ethod, fin ance charges in re spect of finance l eases, and ex change differences arisi ng from forei gn currency borrowings to the extent that they are regarded as an adjustment to interest costs. Borrowing costs are expensed as incurred, except for borrowing costs incurred as part of the cost of the construction of a qualifying asset, which are capitalised until the asset is re ady for its intended use or sale. Note 13: Contributed Equity (a) Issued Capital Movements in share capital were as follows: Year ended 30 June 2026 Issue Price Fully Paid Ordinary Shares $ 1 July 2025 Opening Balance 1,479,910,103 104,919,895 18 September 2025 Issue of sh ares to Directors f ollowing shareholder approval $0.040 7,750,000 310,000 21 November 2025 Issue of shares pursuant to placement $0.065 33,122,637 2,152,971 3 December 2025 Issue of shares pursuant to placement $0.065 15,384,615 1,000,000 Share issue costs - (115,312) 30 June 2026 Closing Balance 1,536,167,355 108,267,554
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 60 Note 13: Contributed Equity (continued) Year ended 30 June 2025 Issue Price Fully Paid Ordinary Shares $ 1 July 2024 Opening Balance 1,432,535,103 103,037,676 21 November 2024 Issue to shares to employee as part of remuneration package $0.084 50,000 4,200 24 June 2025 Issue of shares pursuant to placement $0.04 35,325,000 1,413,000 24 June 2025 Issue of shares to satisfy trade payables $0.04 2,000,000 80,000 24 June 2025 Issue of shares in lieu of repayment of borrowings $0.04 10,000,000 400,000 Share issue costs - (14,981) 30 June 2025 Closing Balance 1,479,910,103 104,919,895 Accounting Policy Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (b) Options The following unlisted options were on issue during the year ended 30 June 2026: Exercise price 12c 7c 12c Expiry date 31 December 2026 30 June 2027 23 August 2028 Opening balance 26,750,000 47,325,000 - Issued during the year 2,000,0001 7,750,0002 3,000,0003 Closing balance 28,750,000 55,075,000 3,000,000 1 Refer to Note 15(d) for further details. 2 The unlisted options were issued as par t of the Company’s June 2025 Share Placement. Refer to Note 16 for further details. 3 The unlisted options were issued to Mr R obert Scharnell, a Direc tor of the Company, as part of his rem uneration package. Refer to Note 15(c) for further details. The following unlisted options were on issue during the year ended 30 June 2025: Exercise price 10c 9c 12c 12c 7c Expiry date 31 July 2024 10 February 2025 31 December 2026 31 December 2026 30 June 2027 Opening balance 2,000,000 1,000,000 - 24,750,000 - Issued during the year - - 2,000,0001 - 47,325,0002 Expired during the year (2,000,000) (1,000,000) - - - Closing balance - - 2,000,000 24,750,000 47,325,000 1 Refer to Note 15(a). 2 The unlisted options were issued as part of the Company’s June 2025 Share Placement.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 61 Note 13: Contributed Equity (continued) (c) Performance Rights The following performance rights were on issue during the year ended 30 June 2026: Expiry date 6 December 2029 Opening balance 20,000,000 Closing balance 20,000,000 Note 14: Reserves and Accumulated Losses 14a) Accumulated Losses 2026 $ 2025 $ Balance at beginning of financial year (38,453,114) (32,892,633) Net loss (4,619,669) (5,560,481) Balance at end of financial year (43,072,783) (38,453,114) 14b) Reserves Share Based Payments Reserve 1,913,855 1,811,343 Options Issue Reserve 258,035 215,084 Foreign Currency Translation Reserve 5,209,394 3,299,501 Total Reserves 7,381,284 5,325,928 (i) Share Based Payments Reserve Balance at beginning of financial year 1,811,343 1,486,255 Movement for year 102,512 325,088 Share Based Payments Reserve 1,913,855 1,811,343 (ii) Options Issue Reserve Balance at beginning of financial year 215,084 215,084 Movement for the year 42,951 - Options Issue Reserve 258,035 215,084 (iii) Foreign Currency Translation Reserve Balance at beginning of financial year 3,299,501 290,924 Movement for year 1,909,893 3,008,577 Foreign Currency Translation Reserve 5,209,394 3,299,501
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 62 Note 14: Reserves and Accumulated Losses (continued) (iv) Nature and purpose of reserves Share Based Payments Reserve The Share Based Payments Reserve is u sed to rec ognise the fair value of shar es, options and performance rights granted as remuneration and in satisfaction of loans advanced to the Company. Options Issue Reserve The Options Issue Reserve is used to recognise the fair value of options issued during the year. Foreign Currency Translation Reserve The F oreign Currency Translation R eserve is used to re cord exchange di fferences arising from t he translation of the financial statements of foreign investments in subsidiaries and previously associates. Note 15: Share Based Payments During the year ended 3 0 June 2026, the foll owing transactions were recogni sed as share based payments by the Group: 2026 $ 2025 $ Employee remuneration package (Note 15(a)) 5,617 62,657 Director and management options (Note 15(b)) - 266,631 Director options (Note 15(c)) 96,895 - Corporate advisor options (Note 15(d)) 42,951 - 145,463 329,288 (a) During the year ended 30 J une 2025, 50,000 ordinary shares and 2,000,000 unlisted options were issued to an employee as part of their remuneration package. The t otal fair value of the shares and options granted to the employee was $ 4,200 and $64,074 respectively, with the fair value of the options granted calculated using the Black-Scholes option valuation methodology and applying the following inputs: Weighted average exercise price $0.12 Weighted average life of the options 2.42 years Weighted average underlying share price $0.08 Expected share price volatility1 77.50% Risk-free interest rate 3.81% Expiry date 31 December 2026 Value per option $0.03204 1 Expected volatility has been determined based on h istorical volatility of the C ompany’s share price and the life of the options granted. Based on the v esting conditions of the opt ions, the remaining balance of $5,617 (2025: $62,657) was recognised as a share based payment during the year ended 30 June 2026.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 63 Note 15: Share Based Payments (continued) (b) In January 2024, following sha reholder approval granted at the Company’s Annual General Meeting on 24 November 2023, 24,750,000 u nlisted Director and Management options exercisable at $0.12 per share on or before 31 December 2026 were issued by the Company: Director Options No. of Options Management Options No. of Options Mr Adam Sierakowski 4,000,000 Mr Nicholas de Blocq 5,000,000 Mr Dirk Robert Bulder 3,000,000 Other management personnel 3,750,000 Mr Donald Ncube 3,000,000 Total 8,750,000 Mr Thomas Fontaine 3,000,000 Mr Geoffrey Michael 3,000,000 Total 16,000,000 Pursuant to the vesting condition of the Director and Management Options, the options will vest upon the satisfaction of continuo us service fr om the grant date of the opt ions until 1 Dec ember 2024 by the relevant Director and Management personnel. Upon satisfaction of the vesting condition, the Director and Management Options are exercisable at any time on or before the expiry date, being 31 December 2026. The total fair value of the opt ions granted t o Direc tors and Mana gement was $852,455 whi ch was calculated using the Black-Scholes option valuation methodology and applying the following inputs: Weighted average exercise price $0.12 Weighted average life of the options 3.10 years Weighted average underlying share price $0.08 Expected share price volatility1 76.50% Risk-free interest rate 4.19% Expiry date 31 December 2026 1 Expected volatility has been determined based on h istorical volatility of the C ompany’s share price and the life of the options granted. During the year ended 30 June 2025, all remaining Director and M anagement options vested in full and a final amount of $266,631 was recognised as a share based payment. (c) Pursuant to shareholder approval gr anted at a General Meeting held on 17 September 2025, 3,000,000 unlisted options were issued to Mr Robert Scharnell which vested immediately. The tota l fair value of the options granted was $ 96,895 which was calculated using the Black -Scholes option valuation methodology and applying the following inputs: Weighted average exercise price $0.12 Weighted average life of the options 2.93 years Weighted average underlying share price $0.077 Expected share price volatility1 79.64% Risk-free interest rate 3.402% Expiry date 23 August 2028 Value per option $0.03230 1 Expected volatility has been determined based o n historical volatility of the Company’s share price and the life of the options granted.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 64 Note 15: Share Based Payments (continued) (d) On 4 September 2025, 2,000,000 unlisted options were issued to a corporate advisor for the provision of corporate advisory services which vested immediately. The tot al fai r value o f the options granted was $ 42,951 which was calcul ated using the Black -Scholes option valuation methodology and applying the following inputs: Weighted average exercise price $0.12 Weighted average life of the options 1.32 years Weighted average underlying share price $0.085 Expected share price volatility1 77.95% Risk-free interest rate 3.40% Expiry date 31 December 2026 Value per option $0.02148 1 Expected volatility has been determined based on h istorical volatility o f the C ompany’s share price and the life of the options granted. The followi ng t able illustrates the number and weighted aver age exercise prices of and mov ements in share options issued during the period: 2026 2025 Number Weighted average exercise price Number Weighted average exercise price $ $ Outstanding at the beginning of the year 74,075,000 0.0881 27,750,000 0.1175 Issued during the year 12,750,000 0.0896 49,325,000 0.0720 Expired during the year - - (3,000,000) (0.0967) Outstanding at the end of the year 86,825,000 0.0883 74,075,000 0.0881 Exercisable at the end of the year 86,825,000 0.0883 74,075,000 0.0881 The share opt ions outstanding at the end of the year had a weighted average exercis e price of $0.0883 (2025: $0.0881) and a weighted average remaining contractual life of 0.87 years (2025: 1.81 years). No options were exercised during the year (2025: nil). (e) During the year ended 30 June 2026, there were no changes to performance rights held by Directors and other management personnel. The total fair value of the performance rights granted to Directors was $ 1,360,000 which was calc ulated using the share price of $0.068 at the date that shareholder approval was granted, being 27 November 2024. Pursuant to the terms and conditions, the performance rights wi ll vest and convert into shares upon th e independent certification, in accordance with th e PRMS Guideline s, of 2P Re serves of a t least one (1) trillion cubic feet within the area comprising licences ER 270, 271, 272 and 383 (“Vesting Condition”). The performance rights were issued on 6 Decemb er 2024 and has a period of five (5) years from is sue date. To the extent that the perfo rmance rights have not converted into share s on or before the expiry date, all unconverted performance rights held will automatically lapse.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 65 Note 15: Share Based Payments (continued) As the Board has assessed the probability of the vesting condition being achieved is 0%, no amount has been recognised in respect of the performance rights for the year ended 30 June 2026. Critical accounting judgements, estimates and assumptions Employees The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of options granted is determined by an in ternal valuation us ing a Black-Scholes op tion pricing model t aking into acc ount t he te rms and conditions upon whi ch the instruments were g ranted. The fair value of shares issue d is determined by utilising the market price of the Company’s shares at the date which shares are issued. External Consultants The Group measures the cost of equity-settled transactions with external consultants by reference to the fair value of the equity instruments at th e date at which they are granted. The fair va lue is d etermined by utilising the market price of the Company’s shares at the date which shares are issued. Note 16: Key Management Personnel Disclosures and Related Party Transactions Refer to Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s Key Management Personnel (KMP) for the year ended 30 June 2026. 2026 $ 2025 $ Short term employee benefits 863,335 900,873 Share based payments 96,895 234,635 960,230 1,135,508 Key management personnel Disclosures relating to key management personnel are set out in the remuneration report of the directors’ report and above. Shares and options issued to key management personnel June 2025 Placement Pursuant to shareholder approval allowing the Company’s Directors to participate in the June 2025 Share Placement, 7,750,000 shares at $0.04 each and 7,750,000 free att aching unlisted options were issued to the Directors and associated nominee on 18 September 2025. Director Options Refer to Note 15(c) for details of options issued to Mr Robert Scharnell during the year.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 66 Note 16: Key Management Personnel Disclosures and Related Party Transactions (continued) Other transactions with key management personnel Transactions w ith k ey management personnel related partie s are on norm al commercial t erms and conditions no more favourable than those available to other parties unless otherwise stated. 2026 $ 2025 $ (i) Payments to Trident Management Services Pty Ltd, a company of which Adam Sierakowski is a director and shareholder, for company secretarial services provided by Simon Whybrow. (ii) Payments to Palisade Corporate, a c ompany of whi ch A dam Sierakowski is a director and s hareholder, for legal services provided. 60,000 87,180 60,000 48,683 (iii) Payments to Trident Management Services Pty Ltd, a company of which A dam Sierakowski is a director and share holder, for rental of office space. 24,000 24,000 Amounts outstanding at reporting date Aggregates amoun t payable to Ke y Manag ement Personnel an d their related entities at reporting date. (i) Payables 163,678 172,273 (ii) Accrued expenses 39,408 - 203,086 172,273 Note 17: Remuneration of Auditors 2026 $ 2025 $ BDO Audit Pty Ltd Audit or review of the financial report 139,575 120,867 139,575 120,867 BDO South Africa Incorporated Audit of the financial report of subsidiaries 24,376 4,090 24,376 4,090 163,951 124,957 The auditor of the Group is BDO Audit Pty Ltd.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 67 Note 18: Investment in Controlled Entities For the year ended 30 June 2026, the consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries: Name of entity Country of Equity holding incorporation 2026 % 2025 % Afro Energy (Pty) Ltd1 South Africa 100% 100% Afro Gas Development SA (Pty) Ltd2 South Africa 55% 55% 1 The entity was incorporated in 2015. 2 The entity was incorporated on 12 October 2021 of which Afro Energy (Pty) Ltd holds a 55% interest in the entity. The remaining 45% interest is held by the Industrial Development Corporation of South Africa. Note 19: Commitments and contingencies (i) Evaluation and Exploration Expenditure In order to maintain current rights of tenure to exploration tenements, Afro Energy is required to outlay rental and other associated expenditures to meet minimum expenditure requirements. The minimum expenditure requirements committed at the reporting date but not recognised as liabilities is as follows: 2026 $ 2025 $ Within one year 8,915,447 1,153,213 One to five years 1,485,908 16,821,295 10,401,355 17,974,508 The Group’s future expenditure requirements, as outlined in the Works Program submitted to the Petroleum Agency of S outh Africa in support of its Exploration Right renewal applications, may be amended upon application. (ii) Afro Gas Development SA (Pty) Ltd During the financial year ended 30 June 2022, Afro Energy (Pty) Ltd ( “Afro Energy”) entered into a joint development agreement (JDA) with the In dustrial Development Corporation of South Africa ( “IDC”). The JDA involves the development of gas fields to produce gas for industrial, commercial, transportation or power generation applications. The parties agreed to pool th eir interests in a joint deve lopment entity incorporated in South Africa, Afro Gas Development SA (Pty) Ltd (“Afro Gas”), which will maintain the i nterest share of 55% Afro Energy and 45% IDC. (iii) FFS Refiners (Pty) Ltd On 1 July 20 25, the Company announced that it had executed a non -binding term sheet with FFS Refiners (Pty) Ltd (“FFS Refiners”) for the proposed co -development of a pilot gas liquefaction plant for the production of liquefied natural gas (LNG). On 13 September 2025 , the Company announced that its subsidiary, Afro Energy (Pty) Ltd (“Afro Energy”), had executed a binding joint development agreement (“JDA”) with FFS Refiners (“Parties”).
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 68 Note 19: Commitments and contingencies (continued) The JDA also reco gnised the collaborative framework to scale Project Alpha to furt her phases that was established under the non-binding terms sheet, noting key phases of potential development and proposed activities as follows: Phase 1a – Gas Field Development The JDA est ablishes dev elopment initiatives in commencing Phase 1a of Projec t Alpha, including, but not limited to: • Co-funded drilling of five additional pr oduction wells and upgrading of existing production wells at Brakontein; • Gas testing and appointment of a competent person for certification of gas reserves; • Compilation of an LNG business case proposal for further gas field development; • Co-funded application for a production right; and • Creation of a JDA Steering Comm ittee for supervision and direction of the propo sed development activities. Phase 1b – LNG Proof of Concept 5,000 tpa The JDA Steering Committee preparing an LNG business case agreeable to the Parties, the execution of special purpose vehicle agreements a nd incorporate Project Alpha SPV entity with the Company and FFS eac h holding 50% of the issued capital. The SPV will be r esponsible for the ordering and c ommissioning of an LNG liquefaction pl ant cryobox of 5,000tpa capacity and design and construction of gas, water and power reticulation systems, as w ell as the m arketing and distribution of LNG to customers. The ou tcomes of the Phase 1b will be incorporate d in the full-scale LNG production business case required by the joint venture Parties to scale up LNG production. Phase 2 – Full LNG Production Subject to the objectives of the Phase 1b production being met, the Parties intend to scale up the potential production of LNG over an expanded prod uction right area, envisioned to be significantly larger than the Phase 1b development, scaling liquefaction capacity fivefold to 25,000tpa capacity. Phase 3 – LNG Production Expansion During the final phase, the Par ties intend to collaborate on the furth er expansion of LNG production over additional tenement a reas held by the Company beyond the Brakfontein area, e nvisioned to be significantly larger than the Phase 2 development, of up to 125,000tpa capacity. The Parties have agreed to an aggregate fundin g commitment to Phase 1a of approximately ZAR 64.312 million (AUD $5,675,000) with the first ZAR 20 million with respect to the Phase 1a budget comprised of a 67.50% contribution (ZAR 13.5 million) from Kinetiko and a 32.50% contribution (ZAR 6.5 million) from FFS Refiners. For the remaining balance of approxim ately ZAR 44.312 million, the funding will be split equally, 50% by Kinetiko and 50% by FFS Refiners. Further funding of Phases 1b, 2 and 3 will be subject to the success of Phase 1a and will recogn ise historic exploration costs incurred by Afro Energy and may include third party equity or debt investment. Other than noted above, there has been no other significant changes to the Group’s contingent assets or liabilities since 30 June 2025.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 69 Note 20: Segment Information The Group currently does not have production and is only in volved in explor ation. As a consequence, activities in the operati ng segments are identified by management b ased o n the m anner in which resources are allocated, the nature of the resources provided and the identity of service line manager and country o f ex penditure. Discr ete fin ancial i nformation about each o f these area s is reported to the executive management team on a monthly basis. Based on the above, management has determined that the Group has one operating segment being gas exploration in South Africa. As the Group is focused on gas exploration, the Board monitors the Group based on actual versus budg eted exploration expenditure in curred by ar ea of inte rest. These ar eas of interest me et aggregating cri teria and are a ggregated into one reporting secto r. Thi s internal reporting framework is the most relevant to assist the Board with making decisions regarding the company and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date. Accounting Policy Operating segments are reported in a ma nner consistent with the internal reporting to the chief operating decision make r. The chi ef ope rating decision mak er, who is re sponsible fo r allocating re sources and assessing performance of the operating segments, has been identified as the Board of Directors. Note 21: Events Occurring After Reporting Period • July 2026 – the Board adopted the Field Development Plan for Phase 1 of the Brakfontein Rolling Cluster, bridging exploration and production. Adoption of the FDP enabled t he commencement of gas production permitting applications, including a B ulk Sampling Permit and a Production Right over Exploratio n Right 271, and supports engagement with South Afric an governm ent entities, domestic energy utilities and local institutional investors. • July 2026 – the Company received firm commitments from profe ssional and sophisticated investors to raise approximately $5,400,000 (before costs) through the placement of approximately 180,000,000 fully paid ord inary shares at $0.03 per share, a 14% discount to the last traded price of $0.035 on 27 July 2026. The pl acement was strongly supported by the Company’s largest shareholders as well as new investors and is to be completed in two tranches: 50,000,000 shares issued to unrelated participants under ASX Listing Rules 7.1 and 7.1A, and 130,000,000 shares subject to shareholder approval under ASX Listing Rule 10.11. GBA Ca pital Pty Ltd was engaged as lead manager and bookrunner. • Talent 10 Holdings (Pty) Ltd, a ma jor shareholder related to Non -Executive Director Mr Mxolisi Mgojo, subscribed for 100,000,000 placement s hares representing a contribution of $3,000,000. The issue of these shares is subject to shareholder approval, to be sought at a general meeting. • Proceeds of the placement will be appl ied indicatively towards Phase 1 development of the CNG gas production f acility, drilling of further exploration wells, gas produc tion permitting, securing a new chief e xecutive officer, and co sts of the offer and working capital, targeting first commercia l gas in late 2027. • August 2026 – Afro E nergy (Pty) Ltd executed a Co -operation and Settlement Agreement with Mulilo Newcastle Wind Power (MNWP) and Mulilo Renewable Project Developme nts, resolving an overlap between Explo ration Right 270 and the proposed Newcastle wind energy facility in KwaZulu-Natal.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 70 Note 21: Events Occurring After Reporting Period (continued) • Afro Energy granted MNWP exclusive u se of a defined 18.54 km² exclusion zone, approximately 1.1% of ER270, and retains all exploration and rel ated rights outside that zone, including the ability to renew or convert the Exploration Right. • Consideration is the Rand equivalen t of A$1,260,720, non-dilutive, with a non-refundable 20% payable on execution and the balance following Financial Close of the N ewcastle project, targeted on or before 31 December 2026. Funds will be applied to expeditin g the Phase 1 gas production cluster at Brakfontein. • The Agreement also gr ants Afro Energy a right of first refusal to supply natural gas should gas - fired gene ration be procured for the project, although neither Mulilo party is obliged to procure gas. No other matters or circumstance has arisen since 30 June 2026 that has affected, or may significantly affect t he Group’s operations, the r esults of th ose operations, or the Group’s state of affa irs i n futur e financial years. Note 22: Other Accounting Policies New and Amended Standards and Interpretations adopted For the year en ded 30 J une 2026, the Directors have reviewed all of t he new and revised Standards and Int erpretations iss ued by the AASB that are relevant t o the Group and effec tive for the c urrent reporting periods beginning on or after 1 July 2025. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and therefore no material change is necessary to the Group’s accounting policies. New Accounting Standards and Interpretations in issue not yet adopted The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet adopted for the year ended 30 June 2026. As a re sult o f this review, the Directors have identified that AASB 18 Presentation and Disclosure in Financial Statements (AASB 18), which replaces AA SB 101 Presentation of Financial Statements, will be applicable for for-profit entities for annual reporting periods beginning on or after 1 January 2027. The standard introduces sign ificant changes to the presentation and disclosure of primary financial statements, most notably requiring categories of operating, investing, and financing in the statement of profit or loss, defining a mandatory operating profit subtotal, and setting new disclosure rules for management-defined performance measures. The Group will adopt this standard from 1 July 2027 and b ased on a preliminary assessment, the Group expects that there will be a change to the layout of the Consolidated Statement of Profit o r Loss and Other Comprehensive Income.
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KINETIKO ENERGY LTD ABN 45 141 647 529 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026 (continued) Page | 71 Note 23: Parent Entity Information The following information is related to the parent entity, Kinetiko Energy Limited, as a t 30 June 2026 and 30 June 2025. 2026 $ 2025 $ Current assets 489,414 2,486,253 Non-current assets 71,323,628 68,972,274 Total assets 71,813,042 71,458,527 Current liabilities 728,231 836,320 Total liabilities 728,231 836,320 Net assets 71,084,811 70,622,207 Contributed equity 108,267,554 104,919,895 Reserves 2,171,890 2,026,427 Accumulated losses (39,354,633) (36,324,115) Total 71,084,811 70,622,207 Loss for the year (4,619,669) (5,560,481) Other comprehensive loss for the year 1,909,893 3,008,577 Total comprehensive loss for the year (2,709,776) (2,551,904)