CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION What are the STI performance criteria for the year ending 30 June 2023? For the year ended 30 June 2023, the following performance financial and non-financial measure were reviewed and considered by the Remuneration Committee to be appropriate, aligned with the Company’s strategy: – Achievement of construction schedule & budget milestones for the Thunderbird Mineral Sands Project, measured against forecast performance contained within public disclosures by the Company prior to commencement of construction in 2022. The STI performance criteria for actual Group EBITDA for the 2023 financial year were set at the following levels: STI Performance Criteria Construction Milestones Stretch 1 month ahead of Project Schedule (Feb 2024) Target On Project Schedule (March 2024) Threshold 2 months behind Project Schedule (May 2024) Budget Milestones Stretch 5% Below Budget - $461m Target On Budget - $484m Threshold 10% Above Budget - $532m Are there any overriding financial performance or other conditions? The Remuneration Committee also recommended that above performance measures should be further qualified by the following factors: – Health, Safety, Environmental and Governance objectives being met. In the event of a fatality or other catastrophic event, the Board would be expected to exercise its discretion to award no STI cash or equity bonus for the period; and – Satisfactory individual performance by the executive, whereby the executive must achieve a minimum personal scorecard target of 50% or greater to be eligible for the award; and – The executive must be employed during the entire period to be eligible for the award (noting applicable good leaver provisions may apply). How much value is ascribed to the STI opportunity? The Executive Chair had a target STI opportunity of 37.5% of FAR, with a minimum opportunity (if only threshold level is met) of 0% of FAR and a maximum opportunity (if the stretch targets are achieved) of 50% of TFR. Other Senior Executives had a target STI opportunity of 30% of FAR, with a minimum opportunity (if only threshold level is met) of 0% of TFR and a maximum opportunity (if the stretch targets are achieved) of 40% of TFR. These percentages were set based on mining industry benchmark data to achieve the remuneration policy intent at the 50th market percentile. What is the STI assessment process? Individual criteria: Based upon a scale in respect of a particular area of accountability, with consideration given to the extent to which the behaviours and performance indicators have been modelled and observed. The assessment is undertaken by the Remuneration & Nomination Committee and approved by the Board. Corporate criteria: Based upon objective performance measures and data points collected, the Board determines the extent to which corporate performance criteria has been satisfied and achieved. How is the STI paid? STI award outcomes are typically paid as cash remuneration to an employee. However, in order to provide greater alignment with shareholder value, Sheffield provides 50% of the STI award in cash, with the remaining 50% balance awarded via vesting of performance rights, subject to shareholder approval provisions. What happens to the STI award opportunity if a Senior Executive ceases employment? Unless the Board determines otherwise, where a participant ceases to be employed by the Company, their award opportunity for the applicable financial year will be reduced to reflect the portion of the financial year not completed at the end of their employment. For the purposes of determining the actual STI award, assessment of the extent of their achievement of individual criteria will be based on performance up to the cessation of their employment, while the extent of achievement of the corporate criteria will be assessed by the Board in the ordinary course at the conclusion of the financial year. 23 Sheffield Resources Limited Annual Report 2023
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