3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 Financial Report For The Year Ended 30 June 2021 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 Financial Report For The Year Ended 30 June 2021 CONTENTS Corporate Governance Statement Directors' Report Remuneration Report Auditor's Independence Declaration Statement of Consolidated Statement of Profit or Loss and Other Comprehensive Income Statement of Consolidated Statement of Financial Position Statement of Consolidated Statement of Changes in Equity Statement of Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Auditor's Report Additional Information for Listed Public Companies Page 1 10 13 17 18 19 20 21 22 45 46 48 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT The Board of Directors of 3D Resources Limited (the Company) is committed to the principle of good practice in corporate governance. The Board believes that a genuine commitment to good corporate governance is essential to the performance and sustainability of the Company's business and as such depends upon the corporate culture, values and behaviours which underlies its day-to-day activities. The Board continually reviews its corporate governance practices and regularly monitors developments in good corporate governance practices both in Australia and overseas. Where International and Australian guidelines are not consistent, the good practice guidelines of the ASX Corporate Governance Council has been adopted as the minimum base for corporate governance practices. Board of Directors The Board has adopted a former charter which allocates responsibilities between the Board and management of the Company which is available from the corporate governance section of the Company's website at www.3dresources.com.au. The charter details the composition, responsibilities and code of conduct under which the Board operates. The Board has resolved unanimously that the Company will at all times aspire to "good practice" in Corporate Governance. Unless otherwise indicated in this statement, the practices specified in the charter have been followed throughout the reporting period and will remain in force until amended by resolution of the Board. Role of the Board The Board acknowledges its accountability to shareholders for creating shareholder value within a framework that protects the rights and interest of shareholders and ensures the Company is properly managed. The Board aims to achieve these objectives through the adoption and monitoring of strategies, plans, policies and performance as follows: - - - - - - Providing input info, and approval of, the Group's strategic direction; approval and monitoring of budgets and business plans; and ensuring that appropriate resources are available, including capital management and budgeting for major capital expenditure. Approving the Group's system of risk management, monitoring their effectiveness and maintaining a dialogue with the Group's auditors; Considering, approving and monitoring internal and external financial and other reporting, including reporting to shareholders, the ASX and other stakeholders; Selection and evaluation of Directors, the Managing Director, senior executives and planning for their succession; Setting the Managing Director and Director's remuneration within shareholder approved limits and ensuring that the remuneration and conditions of service of senior executives are appropriate; Ensuring, and setting standards for ethical behaviour and compliance within the Group's own governing documents, including the Group's Code of Conduct and corporate governance standards. Board Processes The Board aims to perform its role and objectives through the adoption and monitoring of strategies, plans, policies and performance; the review of the Managing Director and senior management's performance, conduct and reward; monitoring of the major risks of the Company's business; and by ensuring the Company has policies and procedures to satisfy its legal and ethical standards. The Board determines the strategic direction of the Company and sets policies accordingly. In addition to maintaining oversight of the Company's executive management and operations, the Board monitors substantive issues such as ethical standards and social environmental responsibilities. Composition of the Board The names of the current Directors of the Company at the date of this statement are set out in the Directors' Report accompanying this financial report. The composition of the Board is determined using the following principles: - - - - a maximum of nine Directors and a minimum of three Directors; a Non-Executive Director as Chairman; a majority of Non-Executive Directors; and a balance of independent and non-independent Directors. The Board is currently comprised of three Directors; two Non-Executive Directors and one Executive Director. The Company's Constitution provides for a maximum of 9 directors. The Board periodically reviews its size as appropriate. The Managing Director, who is appointed by the Board, attends all Board meetings where possible. Directors are considered to be independent if they are not major shareholders, are independent of management, and are free from any business or other relationship that could materially interfere with their exercise of free and independent judgement. Mr Chegwidden is considered to fall within this category. 1 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Mr Hastings and Mr Mitchell are considered to be non-independent Directors as they are major shareholders in the Company. Mr Mitchell also provides management services to the Company. The Board regards the present composition of Directors and Board Committees as a good balance at this stage of the Company's development with the appropriate mix of expertise, experience and ability to represent the interest of all shareholders. Future Director appointees will receive a formal letter of appointment setting out the responsibilities, rights, terms and conditions of their appointment. Directors participate in a comprehensive induction which covers the operations, financial position, strategic and risk management issues, as well as the operation of the Board and any sub-committees. Meetings The Board meets on a regular basis to retain full and effective control and monitor executive management. During the financial year to 30 June 2021, the full Board met 8 times. The Directors' attendance at meetings is detailed in the Directors' Report. Members of the management team may attend meetings at the invitation of the Board. Role of Chairman and Managing Director or Chief Executive Officer (CEO) The Chairman is a non-independent Director elected by the full Board and he has not previously been an employee of the Company. The Chairman is responsible for leading the Board, ensuring Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and managing the Board's relationship with the Company's senior executives. The Managing Director is responsible for implementing the Group's strategies and policies. The Board Charter specifies that these are separate roles to be undertaken by separate people. Terms of Office The Board reviews its performance and composition on an annual basis and aims to have members with high levels of intellectual ability, experience, soundness of judgement and integrity to maximise its effectiveness and contribution. Directors serve a maximum three-year term before being required to be re-elected by the Company's members. The Company's constitution provides that at least one third (or the nearest whole number) of directors must retire at each Annual General Meeting, but are eligible for re- election at that meeting. There is no compulsory retiring age. Independent professional advice In performing their duties, Directors have the right to seek independent, professional advice at the Company's expense, in furtherance of their duties as Directors, with the approval of the Chairman, which approval shall not be unreasonable withheld. Board committees The Company currently has no committees, the tasks that would ordinarily be assigned to a committee are undertaken by the full board of the Company. Code of business conduct The Board has adopted a Code of Conduct (the Code) and a policy "Behaviour Standards - Standards of Business Conduct" setting out parameters for ethical behaviour and business practices which applies to all of the Company's Directors, officers and employees. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism necessary to maintain confidence in the Group's integrity. In summary, the Code requires that at all times, all group personnel act with the utmost integrity, objectivity and in compliance with both the letter and the spirit of the law and the Company's best interest. Conflicts of interest All Directors of the Company must keep the Board advised, on an ongoing basis, of any private interest that could potentially conflict with the interests of the Company. Where the Board believes that a significant conflict exists, the Director or Directors concerned do not receive the relevant board papers and is excused at the meeting whilst the item is considered. The Board has developed procedures to assist Directors in disclosing potential conflicts of interest. All Directors and executive officers of the Company are required to disclose to the Company any material transaction, commercial relationship or corporate opportunity that reasonably could be expected to give rise to such a conflict. Insider trading Trading in shares by any Director or senior executive of the Company whether during a blackout period which incorporates the periods between the close of each financial quarter and the release of quarterly, half yearly interim and full year results by the Company and 30 Days prior to the Company's AGM or not requires the express written approval of the Chairman before any trading is conducted or the entry into any share trading agreements in accordance with the Company's share trading policy. Fair dealing and ethical standards The Code requires all directors, officers and employees of the Company to behave honestly and ethically at all times with all stakeholders, people and other organisation. 2 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT The Directors are satisfied that the Company has complied with its policies on ethical standards, including trading in securities. Financial Reporting Reporting Standards The Company is committed to providing shareholders with clear, transparent, and high quality financial information in a timely manner. The Company's continuous disclosure policy underpins this approach. The financial reports of the Company are produced in accordance with International Financial Reporting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act. The financial statements and reports are subject to review every half year and the auditor issues an audit opinion accompanying the full year results for each year. External auditors The Company policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually, taking into consideration assessment of performance, existing value and tender costs. An analysis of fees paid to external auditors, including a breakdown of fees for non-audit services, is provided in Note 7 to the financial statements. It is the policy of the external auditors to provide an annual declaration of their independence to the Board. The external auditor is requested to attend the annual general meeting either in person or via phone linkup and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report. Management Certification The Company requires that the Managing Director and the Company Secretary make the following certifications to the Board: 1. 2. that the Company's financial reports are complete and present a true and fair value, in all material respects, of the financial condition and operational results of the Company and Group and are in accordance with relevant accounting standards; that the above statement is founded on a sound system of risk management together with internal compliance and control which implements the policies adopted by the board and that the Company's risk management and internal compliance and control is operating efficiently and effectively in all material respects. Risk assessment The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. In summary, the Company's policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed and efficiently managed and monitored to enable achievement of the Company's business objectives. Considerable importance is placed on maintaining a strong control environment. There is an organisational structure with clearly drawn lines of accountability and delegation of authority. Adherence to the Code of Conduct is required at all times and the Board actively promotes a culture of quality and integrity. Detailed control procedures cover management accounting, purchases and payments, financial reporting, capital expenditure requests, project appraisal, environment, health and safety, IT security, compliance, and other risk management issues. There is a systematic review and monitoring of key business operational risks by management which reports on current future risks and mitigation activities to the Board. The Company recognises the importance of environmental and occupational health and safety (OH&S) issues and is committed to the highest levels of performance with the systematic identification of environmental and OH&S issues to ensure they are managed in a structured manner. This systems allows the Company to: - - - - - - monitor its compliance with all relevant legislation; continually assess and improve the impact of its operations on the environment; encourage employees to actively participate in the management of environmental and OH&S issues; work with industry peers to raise standards; use energy and other resources efficiently; and encourage the adoption of similar standards by the entity's principle suppliers and contractors with particular emphasis on exploration contractors. Continuous disclosure and shareholder communication The Company is a disclosing entity under the Corporations Act and is subject to the continuous disclosure requirements under ASX Listing Rules. Communications with shareholders and other stakeholders are given a high priority. In addition to statutory disclosure documents such as Annual Reports and Quarterly activity reports, the Board is committed to keeping all stakeholders informed of all material developments that affect the Company in a timely manner. 3 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT The Company has a formal policy and comprehensive procedures on continuous disclosure. Once the Board or management becomes aware of information concerning the Company that would be likely to have a material effect on the price or value of the Company's securities (and which does not fall within the exceptions to the disclosure requirements contained in the Listing Rules), that information is released to the ASX. The Board has appointed the Company Secretary (or in his absence, the Chairman) as the person responsible for communications to ASX. This role includes responsibility or ensuring compliance with the continuous disclosure requires of ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX. All Company announcements, presentations or other briefings are posted on the Company's website after release to the ASX. The Board also endorses full and regular communication with and between Directors, the Managing Director, senior management and the external auditors. All shareholders have the opportunity to elect to receive a copy of the Company's annual report at the same time they receive by post a copy of the Notice of the Annual General Meeting. Full use is made of annual general meetings to inform shareholders of current developments through appropriate presentations and to provide opportunities for questions. Diversity Policy Diversity includes, but is not limited to, gender, age, ethnicity and cultural background. The company is committed to diversity and recognises the benefits arising from employee and board diversity and the importance of benefitting from all available talents. Accordingly, the company has established a diversity policy. This diversity policy outlines requirements for the Board to develop measurable objectives for achieving diversity, and annually assess both the objectives and the progress in achieving those objectives. Accordingly, the Board has developed the following objectives regarding gender diversity and aims to achieve these objectives as Director and senior executive positions become vacant and appropriately qualified candidates become available: - - - - - achieve a diverse and skilled workforce, leading to continuous improvement in the achievement of its corporate goals; the development of clear criteria on behavioural expectations in relation to promoting diversity; create a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives; ensure that personnel responsible for recruitment take into account diversity issues when considering vacancies; and create awareness in all employees of their rights and responsibilities with regards to fairness, equity and respect for all aspects of diversity. The number of women employed by the Group and their employment classification are as follows: Women on the Board Women in senior management roles Women employees in the company 2021 2020 No. - - - % - - - No. - - - % - - - Compliance with ASX Corporate Governance Council Good Practice Recommendations The table below outlines each of the ASX Best Practice Recommendations and the Company's compliance with those recommendations. Where the Company has met the relevant recommendations during the reporting period, this is indicated by a "Yes" in the relevant column. Where the Company has not met or complied with a recommendation, this is indicated by a "No" and an accompanying note explaining the reasons why the Company has not met the recommendation. Principles and Recommendations Complied Note Principle 1: Lay solid foundations for management and oversight Recommendation 1.1 A listed entity should have and disclose a board charter setting out: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management. Recommendation 1.2 A listed entity should: (a) undertake appropriate checks before appointing a director or senior executive or putting (b) provide security holders with all material information in its possession relevant to a decision on No No 1 1 4 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Recommendation 1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment. Recommendation 1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board. Recommendation 1.5 A listed entity should: (a) (b) have and disclose a diversity policy; through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (1) (2) the measurable objectives set for that period to achieve gender diversity; the entity's progress towards achieving those objectives; and (3) either: (A) (B) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's Recommendation 1.6 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and (b) disclose for each reporting period whether a performance evaluation has been undertaken in Recommendation 1.7 A listed entity should: (a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period. (b) Principle 2: Structure the Board to be effective and add value Recommendation 2.1 The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) (4) (5) the charter of that committee; the members of the committee; and as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or Yes Yes Yes No No No 1 1 2 (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively. Recommendations 2.2 Yes A listed entity should have and disclose a board skills matrix setting out the mix of skills that the board currently has or is looking to achieve in its membership. 5 Yes No No Yes Yes Yes Yes No No 3 4 5 6 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Recommendation 2.3 A listed entity should disclose: (a) (b) the names of the directors considered by the board to be independent directors; if a director has an interest, position, affiliation or relationship of the type described in Box 2.3 but the board is of the opinion that it does not comprise the independence of the director, the nature of the interest, position or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director. Recommendations 2.4 A majority of the board of a listed entity should be independent directors. Recommendations 2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity. Recommendations 2.6 A listed entity should have a program for inducting new directors and for periodically reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and knowledge needed to perform their role as directors effectively. Principle 3 - Instil a culture of acting lawfully, ethically and responsibly Recommendation 3.1 A listed entity should articulate and disclose its values. Recommendation 3.2 A listed entity should: (a) (b) have and disclose a code of conduct for its directors, senior executives and employees; and ensure that the board or a committee of the board is informed of any material breaches of that code by a director or senior executive; and any other material breaches of that code that call into question the culture of the organisation. (c) Recommendation 3.3 A listed entity should: (a) (b) have and disclose a whistle-blower policy; and ensure that the board or a committee of the board is informed of any material incidents reported Recommendation 3.4 A listed entity should: (a) (b) have and disclose an anti-bribery and corruption policy; and ensure that the board or committee of the board is informed of any material breaches of that policy. Principle 4 - Safeguard the integrity of corporate reports Recommendation 4.1 The board of a listed entity should: (a) have an audit committee which: (1) (2) has at least three members, a majority of whom are non-executive directors and a majority of whom are independent directors; and is chaired by an independent director, who is not the chair of the board, and disclose: (3) (4) (5) the charter of that committee; the relevant qualifications and experience of the members of the committee; and in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have an audit committee, disclose that fact and the process it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner. 6 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Recommendations 4.2 The board of a listed entity should, before it approves the entity's financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. Recommendations 4.3 A listed entity should disclose its processes to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor. Principle 5 - Make timely and balanced disclosure Recommendations 5.1 A listed entity should have and disclose a written policy for complying with its continuous disclose obligations under listing rule 3.1 Recommendations 5.2 A listed entity should ensure that its board receives copies of all material market announcements promptly after they have been made. Recommendations 5.3 A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials on the ASX Market Announcements Platform ahead of the presentation. Principle 6 - Respect the rights of security holders Recommendations 6.1 A listed entity should provide information about itself and its governance to investors via its website. Recommendations 6.2 A listed entity should have an investor relations program that facilitates effective two-way communication with investors. Recommendations 6.3 A listed entity should disclose how it facilitates and encourages participation at meetings of security holders. Recommendations 6.4 A listed entity should ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. Recommendations 6.5 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically. Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Principle 7 - Recognise and manage risk Recommendation 7.1 No 7 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) (2) has at least three members, a majority of whom are independent directors; and is chaired by an independent director, and disclose: (3) (4) (5) the charter of that committee; the members of the committee; and in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) If it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity's risk management framework. 7 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Recommendation 7.2 The board or a committee of the board should: (a) review the entity's risk management framework at least annually to satisfy itself that it continues to be sound and that the entity is operating with due regard to the risk appetite set by the board; and (b) disclose, in relation to each reporting period, whether such a review has taken place. Recommendation 7.3 A listed entity should disclose: (a) (b) if it has an internal audit function, how the function is structure and what role it performs; or if it does not have any internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its governance, risk management and internal control processes. Recommendations 7.4 A listed entity should disclose whether it has any material exposure to environmental or social risks and, if it does, how it manages or intends to manage those risks. Yes Yes Yes Principle 8 -Remunerate fairly and responsibly Recommendation 8.1 The board of a listed entity should: (a) have a remuneration committee which: No 8 (1) (2) has at least three members, a majority of whom are independent directors; and is chaired by an independent director, and disclose: (3) (4) (5) the charter of that committee; the members of the committee; and in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. Recommendations 8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non- executive directors and the remuneration of executive directors and other senior executives. Recommendation 8.3 Yes Yes A listed entity which has an equity-based remuneration scheme should: (a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and disclose that policy or a summary of it. (b) Note 1 All Executives and Officers of the Company are expected to contribute to the Company's activities and the performance of Senior Executives are reviewed informally by the Chairman and where desirable is discussed with the individual concerned. Due to the small size of the Board and the limited number of Senior Executives, the Company is not proposing a formal review mechanism at this moment. Note 2 The Company currently has no nomination committee. The Board considers those matters and issues arising that would usually fall to a nomination committee. The Board considers that no efficiencies or other benefits would be gained be establishing a separate nomination committee. Note 3 The Board Charter requires that where practical, the majority of the Board will consist of independent Directors. Details of each Director's independence is provided within the Directors Report, noting Mr John Chegwidden is the only independent director. Mr Ian Hastings and Mr Peter Mitchell are not deemed to be independent due to the nature of their shareholdings in the Company. 8 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CORPORATE GOVERNANCE STATEMENT Note 4 The current Chairman of the Company, Mr Ian Hastings, is not deemed an independent director due to his shareholding in the Company. Note 5 Note 6 The Company currently has no audit committee. The Board considers those matters and issues arising that would usually fall to an audit committee. The Board considers that no efficiencies or other benefits would be gained by establishing a separate audit committee. Note 7 Due to the size and nature of the existing Board and the magnitude of the Company's operations, the Company does not currently have a Risk Management Committee. The full Board carries out the duties that would ordinarily be assigned to the Risk Management Committee and devotes time annually to fulfilling the rules and responsibilities associated with overseeing risk and maintaining the entity's risk management framework and associated internal compliance and control procedures. Note 8 The Company currently has no remuneration committee. Due to the small size and structure of the Board and the limited number of employees, a separate remuneration committee is not considered to add any efficiency to the process of determining the levels of remuneration for the directors and key executives. The Board considers that it is more appropriate to set aside time at Board meetings each year to specifically address matters that would ordinarily fall to a remuneration committee. 9 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT The Directors of 3D Resources Limited submit herewith the financial report of 3D Resources Limited and its subsidiaries ("the Group") for the year ended 30 June 2021. General Information Directors The names and details of the Group's Directors in office during the financial year and until the date of this report are as follows: Directors were in office for this entire period unless otherwise stated. Ian Hastings Chairman Non-Executive Director appointed 23 July 2010 Peter Mitchell Managing Director Appointed 3 December 2010 John Chegwidden (CA) Non-Executive Director Appointed 1 November 2006 Mr Hastings is a corporate advisor with many years' experience in the field of finance, investment, securities markets compliance and regulation and has almost 40 years experience in the finance industry and regulatory bodies. He is a former Member of the ASX and former Principal of several ASX Member Stock Brokers. Mr Hastings is a Practitioner Member (Master Stockbroking) of the Stockbrokers Association of Australia and holds a Bachelor of Commerce and Bachelor of Laws Degree. Other current directorships of listed companies Gladiator Resources Limited Former directorships of listed companies in last three years None Mr Mitchell is a qualified Geologists with experience in gold, uranium, mineral sands, and base metals projects, and in recent time, Mr Mitchell has been focused on coal projects in several countries, including Australia, China and Indonesia. Mr Mitchell is a former mining advisor to the Department of Mines & Energy, Northern Territory and has many years' experience as a Business Development Manager. Mr Mitchell has also worked as a Corporate Advisor for Lowell Capital where he provided financial and technical analysis of projects and companies, including projects in Australia and various other countries such as USA, China, North Korea, Mongolia, Zambia, Egypt, Romania and Zimbabwe, and as Resource Analyst for Prudential Bache. Mr Mitchell has experience in public companies and managed investment schemes and has held positions including Senior and Chief Geologists for numerous mining companies in the world. Other current directorships of listed companies None Former directorships of listed companies in last three years None Mr Chegwidden has over 20 years' experience as an accountant, including managing his own chartered accounting practice, providing advise in management, accounting and taxation, and consulting to manufacturing, mining, primary production and earthmoving operations. Mr Chegwidden has a strong knowledge of the mining and resources sector in Australia, with competencies in exploration, materials processing, marketing and financial management in relation to junior mining companies. More recently, he has consulted to a number of listed companies and negotiated with capital financiers for junior exploration companies. Other current directorships of listed companies None Former directorships of listed companies in last three years None 10 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT Company Secretary Andrew J Draffin Appointed 1 July 2013 Mr Draffin is a Director of DW Accounting & Advisory Pty Ltd. He holds a Bachelor of Commerce and is a member of the Chartered Accountants Australia and New Zealand. Andrew is a Director, Chief Financial Officer and Company Secretary of listed, unlisted and private companies operating across a broad range of industries. His focus is on financial reporting, treasury management, management accounting and corporate services, areas where he has gained over 20 years of experience. Shareholdings of directors and other key management personnel The interests of each Director and any other key management personnel, directly and indirectly, in the shares and options of the Company at the date of this report are as follows: Directors and other key management personnel Ordinary Shares Share Options Ian Hastings Peter Mitchell John Chegwidden John Chegwidden* Andrew Draffin Note: 160,209,660 161,226,018 36,954,687 650,000 12,501,000 16,500,000 21,750,000 6,437,500 - - *John Chegwidden has a beneficial interest in 650,000 ordinary shares held by 189 Project Pty Ltd. Corporate Information Corporate Structure 3D Resources Limited is a company limited by shares that is incorporated and domiciled in Australia. 3D Resources Limited have prepared a consolidated financial report incorporating its subsidiaries (Refer to Note 12 : Interest in Subsidiaries for more information) which it controlled during the financial year and which are included in the financial statements. Principal Activities and Change in State of Affairs During the 2020/21 financial year the Company was active with the continued development of its NSW based Adelong Gold Project, the sale of its WA based Halls Creek Copper project and the spin out of its WA based Cosmo Newberry Gold project. During the year the Company continued to progress its flagship Adelong Gold project located in southern NSW: - - - - Following completion of the acquisition in late May 2020 the Company undertook the significant task of consolidating the substantial amounts of data generated over the previous 40 odd years by the several prior owners. In August 2020, the Company restarted exploration at Adelong with the first program of drilling since 2013. The initial program was completed in September 2020 with a second drilling program commencing in June 2021. These Drilling Programs were designed to explore the deposits at Currajong, Donkey Hill and the Challenger deposits. Completed a Resource Estimate for the Currajong, Caledonian and Donkey Hill deposits that created a substantial upgrade in the project resources (as announced on 17th August 2020). Completed extensive metallurgical testing, plant designs and mine designs to assess the different options for restarting production. These analysis and studies were designed to determine the most efficient way to recommission the existing plant and operations to recommence gold production and as at year end have been brought together into a Scoping Study expected to be released soon. In October 2020 the Company announced that its Joint Venture Partner Cazaly Resources Ltd. had purchased the Company’s 80% interest in the Halls Creek Copper project. The Company had held the project for some years and considered it too small to be commercial deciding to divest it in order to focus on the Adelong Gold project. During the year the Company also completed a spin out of its WA based Cosmo Gold Project. The Company successfully completed Native Title Access negotiations during the year with both the Yilka Talintji and Waturta native groups who each have interest in the project tenements and following delays due to the WA Government elections finally received a Mining Entry Permit to access the ground in May 2021. The Company had expected to IPO the Cosmo project but unfortunately due to the permit delays was forced to withdraw the IPO and return the approximately $5.5 million of capital raised. The Company nonetheless completed an in specie distribution of all of its Cosmo shares to transfer ownership of the project out of the Company to its shareholders, giving Cosmo Gold control of its own future. The Company received $500,000 in sale proceeds from the sale of Cosmo with a further $250,000 outstanding. The Company has continued to fund Cosmo by way of secured loan convertible into equity at the company’s option and expects to continue to do so until Cosmo completes either its anticipated IPO or other liquidity event. The Company is excited to release its maiden scoping study on the Adelong Gold project once all necessary approvals have been obtained which it expects to occur in the short term. The study reveals the project to be commercially viable and once released the Company will focus on financing and developing this very promising gold opportunity and seek to become a gold producer. 11 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT Dividends No dividends in respect of the current financial year have been paid, declared or recommended for payment. Operating and Financial Review Group Overview 3D Resources Limited was established in July 2006 with a strategy to consolidate and further explore some under-explored mineral properties located within selected geologically prospective areas in Western Australia. The Company has since expanded its scope in include the search of projects in other locations within Australia, Asia and the Pacific Region. Financial Overview Operating Results for the year The loss for the Group is $692,644 (2020: Loss of $601,468). This result is consistent with the expectation of the costs associated with the exploration programme and reflected: - - costs associated with managing various exploration programs; and corporate overheads associated with statutory and regulatory requirements as a consequence of being listed on the Australian Securities Exchange. Review of financial position The net assets of the Group have increased by $2,114,786 from $2,655,278 as at 30 June 2020 to $4,770,064 as at 30 June 2021. The Directors believe the Group is in a stable financial position to continue its current programs not withstanding future capital raisings will be required. Capital Raising and Capital Structure During the year under review, the Company issued 569,250,000 fully paid ordinary shares raising a total of $2,499,154, net of capital raising costs. Summary of options on issue During the year, 429,500,000 unlisted options were issued. 375,395,120 unlisted options were subsequently converted to listed options 375,395,120 listed options have an exercise price of $0.0042 and expiry date of 31 May 2022. 66,500,000 unlisted options have an exercise price of $0.0022 and expiry date of 7 February 2022. 122,500,000 unlisted options have an exercise price of $0.0062 and expiry date of 31 August 2022. Events after the Reporting Period The Company completed a 12 hole drill program at the Challenger Gold Project in late July. Initial drill results were released on 12 August with the Company awaiting final results at the date of this report. Future Developments, Prospects and Business Strategies Disclosure of information regarding likely developments in the operations of the Group in future financial years and the expected results of those operations are likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in this report. Environmental Issues The Group is subject to and compliant with all aspects of environmental regulation with regards to its exploration activities. The Directors are not aware of any environmental law that is not being complied with. 12 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT Meetings of Directors During the financial year, 8 meetings of directors (including committees of directors) were held. Attendances by each director during the year were as follows: Ian Hastings Peter Mitchell John Chegwidden Indemnifying Officers or Auditor Directors' Meetings Number Number 8 8 8 8 8 8 During the year, the Group entered into an insurance policy to insure certain officers of the Company and its controlled entities. The officers of the Company covered by the insurance policy include the Directors named in this report. The Directors' and Officers' Liability Insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of indemnity and that may be brought against the officers in their capacity as officers of the Company or a related body corporate. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the premium paid is subject to a confidentiality clause under the insurance policy. The Company has entered into an agreement with the Directors and certain officers to indemnify these individuals against any claims and related expenses which arise as a result of work completed in their respective capabilities. The Company nor any of its related bodies corporate have provided any insurance for any auditor of the Company or a related body corporate. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not party to any such proceedings during the year. Non-audit Services There were no non-audit services provided by auditor during the period. Auditor's Independence Declaration The lead auditor's independence declaration for the year ended 30 June 2021 has been received and can be found on page 17 of the Financial Report. REMUNERATION REPORT - AUDITED This remuneration report, which forms part of the Directors' report, sets out information about the remuneration of the Group's Directors and other key management personnel for the year ended 30 June 2021. The prescribed details for each person covered by this report are detailed below. Details of directors and other key management personnel Directors and other key management personnel of the Group during and since the end of the financial year are as follows: Ian Hastings Peter Mitchell John Chegwidden Andrew Draffin Remuneration policy Non-Executive Chairman Executive Director (Managing Director) Non-Executive Director Company Secretary The Company's remuneration policy has been designed to align Director and Executive objectives with shareholder and business objectives by providing remuneration packages comprising of a fixed remuneration component and an options component. The Board believes the remuneration policy for its Directors and senior management to be appropriate and effective to attract and retain people with necessary qualifications, skills and experience to assist the company in achieving its desired results. Due to the size of the company, a remuneration committee has not been formed. Remuneration is reviewed on an annual basis, taking into consideration a number of performance indicators. While no performance based remuneration component has been built into Director and senior management remuneration packages, it is envisaged that as the Company further progresses, consideration will be given to this component of remuneration. 13 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT The Group's earnings and movement in shareholders' wealth for five years to 30 June 2021 are detailed in the following table: 30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017 170,679 (692,644) (692,644) $0.003 $0.005 - (0.02) 887 (601,468) (601,468) $0.001 $0.003 - (0.04) 706 (923,266) (923,266) $0.005 $0.001 - (0.09) 16,889 (1,484,763) (1,484,763) $0.006 $0.005 - (0.02) 1,309 (771,388) (771,388) $0.004 $0.006 - (0.18) Revenue and other income Net (loss) /profit before tax Net (loss) /profit after tax Share price at start of year Share price at end of year Dividends paid Basic (loss)/earnings per share Remuneration Structure In accordance with best practice corporate governance, the structure of Non-Executive and Executive director remuneration is separate and distinct. Remuneration of Directors and Senior Management The Directors (both Executive and Non-Executive) and senior management of the Company received remuneration during the year commencing 1 July 2020 and ending 30 June 2021 based on the following agreements. Remuneration of Executive Directors Objective The Board aims to reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the reward Executives for Company, business unit and individual performance against targets set by reference to appropriate benchmarks; align the interest of Executives with those of shareholders; link award with the strategic goals and performance of the Company; and ensure total remuneration is competitive by market standards - - - - Structure In determining the level and mark-up of Executive remuneration, the Board considers external reports on market levels of remuneration for comparable executive roles. It is the Board's policy that employment contracts are entered into with all senior Executives. Remuneration of Non-Executive Directors Objective The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders. Structure The Constitution and ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting of the Company's shareholders. An amount not exceeding the amount determined is then divided between the Directors as agreed whilst maintaining a surplus amount that can be attributable to further Non-Executive Directors should they be appointed at any time. The current aggregate remuneration amount is $150,000. The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers advice from external consultants as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. The Non-Executive Directors are paid a set amount per year. The Non-Executive Directors may receive consultant's fees through related entities for services rendered on a commercial basis. Non-Executive Directors have long been encouraged by the Board to hold shares in the Company. It is considered good governance for Directors to have a stake in the company on whose board he or she sits. Position Held as at 30 June 2021 and any changes during the year Contract details (duration Group KMP Mr Ian Hastings Mr Peter Mitchell Mr John Chegwidden Mr Andrew Draffin Non-Executive Director and Chairman Executive Director Non-Executive Director Company Secretary No fixed term No fixed term No fixed term No fixed term 14 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT Remuneration of Senior Management Remuneration of Directors and other Key Management Personnel (KMP) for the Year Ended 30 June 2021 Short-term Benefits Post employment Benefits Share based payments Total Share based payments Total outstanding as at 30 June 2021 $ 26,400 81,467 9,900 14,300 132,067 Salaries, fees Superannuation $ $ Shares, $ 96,000 144,000 36,000 60,000 336,000 - - - - - $ 96,000 144,000 36,000 60,000 336,000 - - - - - % - - - - Short-term Post Salaries, fees Superannuation $ $ Share based Shares, $ 96,000 96,000 36,000 60,000 288,000 - - - - - - - - - - Total Share based Total $ 96,000 96,000 36,000 60,000 288,000 % - - - - $ 116,058 141,953 65,791 85,300 409,102 2021 Group KMP Mr Ian Hastings Mr Peter Mitchell Mr John Chegwidden Mr Andrew Draffin 2020 Group KMP Mr Ian Hastings Mr Peter Mitchell Mr John Chegwidden Mr Andrew Draffin KMP Shareholdings The number of ordinary shares in 3D Resources Limited held by each KMP of the Group during the financial year are as follows: Balance at beginning of Year Granted as Remuneration during the year Issued on Exercise of Options during the year Other changes during the year Balance at End of Year Group KMP Mr Ian Hastings Mr Peter Mitchell Mr John Chegwidden Mr Andrew Draffin 160,209,660 161,226,018 36,954,687 12,501,000 - - - - - - - - - - - - 160,209,660 161,226,018 36,954,687 12,501,000 The number of listed options in 3D Resources Limited held by each KMP of the Group during the financial year are as follows: Balance at beginning of Year Granted as Remuneration during the year Issued on Exercise of Options during the year Other changes during the year Balance at End of Year Group KMP Mr Ian Hastings Mr Peter Mitchell Mr John Chegwidden Mr Andrew Draffin 16,500,000 21,750,000 6,437,500 - - - - - - - - - - - - - 16,500,000 21,750,000 6,437,500 - Reimbursement transactions with related parties Reimbursement of business expenses incurred by the Company and initially settled by Mr Ian Hastings. All expenses were incurred on an arm's length basis. Reimbursement of business expenses incurred by the Company and initially settled by China Connect, of which Mr Peter Mitchell is the Manager. All expenses were incurred on an arm's length basis. Reimbursement of business expenses incurred by the Company and initially settled by DW Accounting & Advisory Pty Ltd, of which Mr Andrew Draffin is a director and shareholder. All expenses were incurred on an arm's length basis. 2021 $ 2020 $ 193 59,904 40,535 46,709 21,668 8,528 15 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS' REPORT Shares options granted to directors and executives No shares or options were granted to Directors or Executives during the year. The Directors' Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors made pursuant to s.298(2) of the Corporations Act 2001. Mr Peter Mitchell Dated: 30 September 2021 16 AUDITOR’S INDEPENDENCE DECLARATIONUNDER SECTION 307C OF THE CORPORATIONS ACT 2001TO THE DIRECTORS OF 3D RESOURCES LTDI declare that, to the best of my knowledge and belief, during the year ended 30 June 2021 there have been:(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 inrelation to the audit; and(ii) no contraventions of any applicable code of professional conduct in relation to the audit. MORROWS AUDIT PTY LTD I.L. JENKINSDirectorMelbourne: 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 Continuing operations Revenue and other income Administration expenses Audit fees Share registry costs Depreciation and amortisation expense Employee benefits expense Directors' fees Consulting fees Exploration costs Insurance Legal and professional fees Tenancy costs Travel and accomodation Finance costs Profit before income tax Tax expense Net profit from continuing operations Net profit for the year Earnings per share From continuing and discontinued operations Basic and diluted loss per shaer (cents) Consolidated Group 2021 $ 2020 $ 170,679 (193,804) (27,500) (42,882) (68,436) (95,778) (168,000) (88,324) (5,103) (32,438) (101,122) (26,733) (13,203) - (692,644) - (692,644) (692,644) 887 (79,847) (27,100) (14,049) (33,601) (3,413) (156,000) (8,830) 11,596 (16,317) (148,637) (19,922) (106,196) (39) (601,468) - (601,468) (601,468) (0.02) (0.04) Note 3 5 8 The accompanying notes form part of these financial statements. 18 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other financial assets Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Exploration expenditure Property, plant and equipment TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Retained earnings TOTAL EQUITY Consolidated Group Note 2021 $ 2020 $ 9 10 13 15 11 14 16 17 24 1,858,578 64,224 788,608 659,574 3,370,984 897,991 889,372 1,787,363 5,158,347 405,957 54,783 - 647,692 1,108,432 1,062,554 955,399 2,017,953 3,126,385 388,283 388,283 388,283 471,107 471,107 471,107 4,770,064 2,655,278 17,496,212 389,976 (13,116,124) 4,770,064 15,009,488 69,270 (12,423,480) 2,655,278 The accompanying notes form part of these financial statements. 19 Issued Capital Accumulated Losses Option Reserve $ $ $ Foreign Currency Translation Reserve $ Total $ 12,346,827 (11,858,012) 36,000 125 524,940 - - - - 69,145 (36,000) 33,145 69,145 69,145 - - - - - 321,456 (750) 320,706 389,851 - - - - - - - 125 125 - - - - - - - - (601,468) (601,468) 2,836,126 (173,465) 69,145 - 2,731,806 2,655,278 2,655,278 (692,644) (692,644) 2,719,250 (12,430) (220,846) 321,456 - 2,807,430 125 4,770,064 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021 Balance at 1 July 2019 Comprehensive income Profit for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Shares issued during the year Transaction costs net of tax Options issued during the year Options lapsed during the year - - (601,468) (601,468) 2,836,126 (173,465) - - - - - 36,000 36,000 Total transactions with owners and other transfers 2,662,661 Balance at 30 June 2020 Balance at 1 July 2020 Comprehensive income Profit for the year Total comprehensive income for the year Transactions with owners, in their capacity as owners, and other transfers Shares issued during the year Return of capital via in-specie distribution Transaction costs net of tax Options issued during the year Options exercised during the year Total transactions with owners and other transfers 15,009,488 (12,423,480) 15,009,488 (12,423,480) - - (692,644) (692,644) 2,719,250 (12,430) (220,846) - 750 2,486,724 - - - - - - Balance at 30 June 2021 17,496,212 (13,116,124) The accompanying notes form part of these financial statements. 20 Consolidated Group Note 2021 $ 2020 $ 20(a) (822,424) 4,239 (818,185) 250,000 - (2,409) - (670,825) (423,234) 2,525,000 234,500 194,250 (133,890) (125,820) 2,694,040 1,452,621 405,957 1,858,578 (363,428) 481 (362,947) - (1,410,000) - (211,594) (111,794) (1,733,388) 2,486,125 69,145 - (217,065) - 2,338,205 241,870 164,087 405,957 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Net cash generated by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposals of tenements Payments for subsidiary, net of cash acquired Payments for property, plant and equipment Payment for security bonds Payments for exploration expenses Net cash (used in)/generated by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from issue of options Proceeds from exercise of options Payments for capital raising costs Loan payments made Net cash provided by/(used in) financing activities Net increase/(decrease) in cash held Cash and cash equivalents at beginning of financial year Cash and cash equivalents at end of financial year 9 The accompanying notes form part of these financial statements. 21 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 The Directors of 3D Resources Limited and its subsidiaries ("the Group") submit herewith the annual report of the Group for the financial year ended 30 June 2021. The separate financial statements of the parent entity, 3D Resources Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. The financial statements were authorised for issue on 30 September 2021 by the directors of the company. Note 1 Summary of Significant Accounting Policies Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit-entity for financial reporting purposes under the Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financials statements and notes also comply with the International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of the financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (a) Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by 3D Resources Limited at the end of the reporting period. A controlled entity is any entity over which 3D Resources Limited has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity's activities. Where controlled entities have entered or left the Group during the year, the financial performance of those entities are included only for the period of the year that they were controlled. A list of controlled entities are contained in Note 12 to the financial statements. In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation. (b) Income Tax The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to profit or loss is the tax payable on taxable income for the current period. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss or arising from a business combination. A deferred tax liability shall be recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from: (a) the initial recognition of goodwill; or (b) the initial recognition of an asset or liability in a transaction which: (i) is not a business combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. With respect to non-depreciable items of property, plant and equipment measured at fair value and items of investment property measured at fair value, the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of the asset will be recovered entirely through sale. When an investment property that is depreciable is held by the entity in a business model whose objective is to consume substantially all of the economic benefits embodied in the property through use over time (rather than through sale), the related deferred tax liability or deferred tax asset is measured on the basis that the carrying amount of such property will be recovered entirely through use. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised, unless the deferred tax asset relating to temporary differences arises from the initial recognition of an asset or liability in a transaction that: - - is not a business combination; and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). 22 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (i) a legally enforceable right of set-off exists; and (ii) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (c) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Property Freehold land and buildings are carried at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction), based on periodic, but at least triennial, valuations by external independent valuers, less accumulated impairment losses and accumulated depreciation for buildings. Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity. Decreases that offset previous increases of the same asset are recognised against revaluation surplus directly in equity; all other decreases are recognised in profit or loss. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Plant and equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss. A formal assessment of recoverable amount is made when impairment indicators are present (refer to Note 1(f) for details of impairment). The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Plant and equipment Depreciation Rate 20% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in profit or loss in the period in which they arise. Gains shall not be classified as revenue. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings. 23 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) (d) Exploration and Development Expenditure Exploration, evaluation and development expenditures incurred are capitalised in respect of each identifiable area of interest. These costs are only capitalised to the extent that they are expected to be recovered through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit or loss in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise costs in relation to that area. Costs of site restoration are provided for over the life of the project from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and regulations and clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an undiscounted basis. Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. (e) Financial Instruments Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments (except for trade receivables) are initially measured at fair value plus transactions costs except where the instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant financing component or if the practical expedient was applied as specified in AASB 15.63. Classification and Subsequent Measurement Financial liabilities Financial instruments are subsequently measured at: — — amortised cost; or fair value through profit or loss. A financial liability is measured at fair value through profit and loss if the financial liability is: — — — a contingent consideration of an acquirer in a business combination to which AASB 3: Business Combinations applies; held for trading; or initially designated as at fair value through profit or loss. All other financial liabilities are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the expected life of the instrument to the net carrying amount at initial recognition. A financial liability is held for trading if: — — — it is incurred for the purpose of repurchasing or repaying in the near term; part of a portfolio where there is an actual pattern of short-term profit taking; or a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a derivative that is in a effective hedging relationships). Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship are recognised in profit or loss. The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred to retained earnings upon derecognition of the financial liability. If taking the change in credit risk in other comprehensive income enlarges or creates an accounting mismatch, then these gains or losses should be taken to profit or loss rather than other comprehensive income. A financial liability cannot be reclassified. 24 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) Financial assets Financial assets are subsequently measured at: — — — amortised cost; fair value through other comprehensive income; or fair value through profit or loss. Measurement is on the basis of two primary criteria: — — the contractual cash flow characteristics of the financial asset; and the business model for managing the financial assets. A financial asset that meets the following conditions is subsequently measured at amortised cost: — — the financial asset is managed solely to collect contractual cash flows; and the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates. A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income: — — — — — the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates; the business model for managing the financial assets comprises both contractual cash flows collection and the selling of the financial asset. By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other comprehensive income are subsequently measured at fair value through profit or loss. The Company initially designates a financial instrument as measured at fair value through profit or loss if: it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as “accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases; it is in accordance with the documented risk management or investment strategy, and information about the groupings was documented appropriately, so that the performance of the financial liability that was part of a group of financial liabilities or financial assets can be managed and evaluated consistently on a fair value basis; it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows otherwise required by the contract. The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option on initial classification and is irrevocable until the financial asset is derecognised. Derecognition Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement of financial position. Derecognition of financial liabilities A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability and recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. Derecognition of financial assets A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred in such a way that all the risks and rewards of ownership are substantially transferred. All of the following criteria need to be satisfied for derecognition of financial asset: — — — the right to receive cash flows from the asset has expired or been transferred; all risk and rewards of ownership of the asset have been substantially transferred; and the Company no longer controls the asset (ie the Company has no practical ability to make a unilateral decision to sell the asset to a third party). On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. On derecognition of a debt instrument classified as at fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss. On derecognition of an investment in equity which was elected to be classified under fair value through other comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings. 25 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) Impairment The Company recognises a loss allowance for expected credit losses on: — — — — — financial assets that are measured at amortised cost or fair value through other comprehensive income; lease receivables; contract assets (eg amounts due from customers under construction contracts); loan commitments that are not measured at fair value through profit or loss; and financial guarantee contracts that are not measured at fair value through profit or loss. Loss allowance is not recognised for: — — financial assets measured at fair value through profit or loss; or equity instruments measured at fair value through other comprehensive income. Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows expected to be received, all discounted at the original effective interest rate of the financial instrument. The Company uses the following approaches to impairment, as applicable under AASB 9: Financial Instruments: — the simplified approach Simplified approach The simplified approach does not require tracking of changes in credit risk at every reporting period, but instead requires the recognition of lifetime expected credit loss at all times. This approach is applicable to: — trade receivables or contract assets that result from transactions within the scope of AASB 15: Revenue from Contracts with Customers and which do not contain a significant financing component; and — lease receivables. In measuring the expected credit loss, a provision matrix for trade receivables was used taking into consideration various data to get to an expected credit loss (ie diversity of customer base, appropriate groupings of historical loss experience, etc). Evidence of credit impairment includes: — — — — — significant financial difficulty of the issuer or borrower; a breach of contract (eg default or past due event); a lender granting to the borrower a concession, due to the borrower's financial difficulty, that the lender would not otherwise consider; high probability that the borrower will enter bankruptcy or other financial reorganisation; and the disappearance of an active market for the financial asset because of financial difficulties. A financial asset is considered to have low credit risk if: — — — there is a low risk of default by the borrower; the borrower has strong capacity to meet its contractual cash flow obligations in the near term; adverse changes in economic and business conditions in the longer term may, but not necessarily will, reduce the ability of the borrower to fulfil its contractual cash flow obligations. A financial asset is not considered to carry low credit risk merely due to existence of collateral, or because a borrower has a risk of default lower than the risk inherent in the financial assets, or lower than the credit risk of the jurisdiction in which it operates. Recognition of expected credit losses in financial statements At each reporting date, the Company recognises the movement in the loss allowance as an impairment gain or loss in the statement of profit or loss and other comprehensive income. The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that asset. Assets measured at fair value through other comprehensive income are recognised at fair value, with changes in fair value recognised in other comprehensive income. Amounts in relation to change in credit risk are transferred from other comprehensive income to profit or loss at every reporting period. For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a provision for loss allowance is created in the statement of financial position to recognise the loss allowance. 26 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) (f) Impairment of Assets At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance with the revaluation model in AASB 116: Property, Plant and Equipment ). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard. Where it is not possible to estimate the recoverable amount of an individual asset, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. (g) Employee Benefits Short-term employee benefits Provision is made for the Company’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees render the related service, including wages, salaries and sick leave. Short-term employee benefits are measured at the (undiscounted) amounts expected to be paid when the obligation is settled. The company’s obligations for short-term employee benefits such as wages, salaries and sick leave are recognised as part of current trade and other payables in the statement of financial position. The company’s obligations for employees’ annual leave and long service leave entitlements are recognised as provisions in the statement of financial position. Other long-term employee benefits Provision is made for employees’ long service leave and annual leave entitlements not expected to be settled wholly within 12 months after the end of the annual reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on government bonds that have maturity dates that approximate the terms of the obligations. Any remeasurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods in which the changes occur. The company’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where the company does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the obligations are presented as current provisions. (h) Provisions Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. (i) Cash and Cash Equivalents Cash and cash equivalents include cash on hand and deposits available on demand with banks. (j) Revenue and Other Income Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest income is recognised using the effective interest method. All revenue is stated net of the amount of goods and services tax. 27 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) (k) Trade and Other Receivables Trade and other receivables include amounts due from customers for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months at the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets. Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. Refer to Note 1(f) for further discussion on the determination of impairment losses. (l) Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the entity that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. Trade and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. (m) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. (n) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. Where the company retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented. (o) Critical Accounting Estimates and Judgements In applying the Group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities. These estimates and assumptions are made based on past experience and other factors that are considered relevant. Actual results may differ from these estimates. All estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is reviewed if the revision affects both current and future periods. The following describes critical judgments that management has made in the process of applying the Group's accounting policies and that have the most significant effect n the amounts recognised in the financial statements. Impairment of deferred exploration costs The Group's accounting policy for exploration expenditure results in some items being capitalised for an area of interest where it is considered likely to be recoverable in the future where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. Management is required to make certain estimates and assumptions as to future events and circumstances, which may change as new information becomes available. If a judgement is made that recovery of a capitalised expenditure is unlikely, the relevant amount will be written off to the income statement. Environmental Issues Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the directors' understanding thereof. At the current stage of the Group's development and its current environmental impact, the directors believe such treatment is reasonable and appropriate. Taxation Balances disclosed in the financial statements and the notes thereto related to taxation are based on the best estimates of the directors. These estimates take into account both the financial performance and position of the Group as they pertain to current income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that directors' best estimate, pending an assessment by the Australian Taxation Office. 28 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 1: Summary of Significant Accounting Policies (continued) (p) Going Concern The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and realisation of assets and the settlement of liabilities in the ordinary course of business. The Company incurred a loss for the year of $692,644 (2020: $601,468) and net cash outflows from operating activities of $818,185 (2020:$362,947). These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern. In the event the above matters are not achieved, the Company will be required to raise funds for working capital from debt or equity source. The ability of the Company to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflow in line with available funds. The directors have prepared a cash flow forecast, which indicates that the Company will have sufficient cash flows to meet all commitments and working capital requirements for the 12 month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company's history of raising capital to date, the directors are confident of the Company's ability to raise additional funds as and when they are required. Should the Company be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due. Note 2 Revenue and Other Income The following information has been extracted from the books and records of the financial information of the parent entity set out below and has been prepared in accordance with Australian Accounting Standards. 2021 $ 2020 $ STATEMENT OF FINANCIAL POSITION ASSETS Current Assets Non-current assets TOTAL ASSETS LIABILITIES Current Liabilities Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued Capital Reserves Retained earnings TOTAL EQUITY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Loss for the year Other comprehensive income Total comprehensive income CONTINGENT LIABILITIES Please refer to Note 19. COMMITMENTS Not longer than 1 year Longer than 1 year and not longer than 5 years Longer then 5 years 29 1,891,174 3,322,692 5,213,866 428,883 2,700,225 3,129,108 177,917 - 177,917 405,608 - 405,608 5,035,949 2,723,500 17,496,223 389,851 (12,850,125) 5,035,949 15,078,643 - (12,355,143) 2,723,500 (494,982) - (494,982) (558,649) - (558,649) - - - 370,000 512,000 60,000 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 3 Revenue and Other Income The Group has recognised the following amounts relating to revenue in the statement of profit or loss. Revenue from continuing operations Other revenue Interest received realised foreign currency gain/(loss) (a) (b) (c) Other miscellaneous revenue (d) (e) Gain on deconsolidation of subsidiary sale of tenements Note 4 Profit for the Year Profit before income tax from continuing operations includes the following specific Write-off capitalised exploration expenditure Note 5 Tax Expense (a) The components of tax (expense) income comprise: Current tax Deferred tax (b) The prima facie tax on profit from ordinary activities before income tax is Prima facie tax payable on profit from ordinary activities before income tax at 26% (2020: 27.5%) — consolidated group Add: Tax effect of: — Deferred tax not brought to account Income tax attributable to entity Balance of franking account at year end (c) Deferred tax assets Tax losses Other Set-off deferred tax liabilities Net deferred tax liabilities Less deferred tax assets not recognised (d) Deferred tax liabilities Exploration expenditure Set-off deferred tax liabilities Net deferred tax liabilities (e) Deferred tax assets Consolidated Group 2021 2020 $ $ 4,536 - - 109,661 56,482 170,679 255 2 630 - - 887 Consolidated Group 2021 2020 $ $ 5,103 5,103 (11,596) (11,596) Consolidated Group 2021 2020 $ $ - - - - - - (180,087) (165,404) 180,087 - - 165,404 - - nil nil 3,094,052 28,328 3,122,380 (225,460) 2,896,920 (2,896,920) - 3,235,133 95,482 3,330,615 (292,202) 3,038,413 (3,038,413) - 225,460 225,460 (225,460) - (225,460) 292,202 292,202 (292,202) - (292,202) Unused tax losses for which no deferred tax asset has been recognised 12,375,794 12,113,650 Potential deferred tax assets attributable to tax losses and exploration expenditure carried forward have not been brought to account at 30 June 2021 because the directors do not believe it is appropriate to estimate the realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if: - - - the company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the loss and exploration expenditure to be realised; the company continues to comply with conditions for deductibility imposed by law; and no changes in tax legislation adversely affect the company in realising the benefit from the deductions for the loss incurred and exploration expenditure. 30 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 6 Key Management Personnel Compensation Refer to the 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 2021. The totals of remuneration paid to KMP of the company and the Group during the year are as follows: Short-term employee benefits Total KMP compensation The table below reconciles the total remuneration paid to KMPs of the company and the Group. Directors fees Consulting fees paid to Directors Company secretarial and accounting fees Less: Directors fees capitalised Company secretarial and accounting fees listed under Administration expenses Directors fees declared in Consolidated Statement of Profit or Loss and Other Comprehensive Income Further information in relation to KMP remuneration can be found in the Remuneration Report. Note 7 Auditor’s Remuneration Remuneration of the auditor for: — auditing or reviewing the financial statements Note 8 Earnings per Share (a) Reconciliation of earnings to profit or loss Losses Losses used to calculate basic EPS (b) Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 2021 $ 2020 $ 276,000 276,000 228,000 228,000 2021 $ 276,000 - 60,000 336,000 108,000 60,000 168,000 168,000 2020 $ 228,000 - 60,000 288,000 72,000 60,000 132,000 156,000 Consolidated Group 2021 2020 $ $ 27,500 27,500 27,100 27,100 Consolidated Group 2021 2020 $ $ (692,644) (692,644) (601,468) (601,468) No. 3,584,733,736 No. 1,511,111,644 Weighted average number of ordinary shares outstanding during the year 3,584,733,736 1,511,111,644 Basic loss per share from continuing and discontinued operations (0.02) (0.04) Note 9 Cash and Cash Equivalents Cash at bank and on hand Reconciliation of cash Cash and cash equivalents at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Bank overdrafts 31 Consolidated Group 2021 2020 $ $ 1,858,578 1,858,578 405,957 405,957 1,858,578 - 1,858,578 405,957 - 405,957 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 10 Trade and Other Receivables CURRENT Trade receivables Provision for impairment Other receivables — — — TFN withholding other receivables deposit paid Total current trade and other receivables Note 10(a)(i) Consolidated Group 2021 2020 $ $ 1,000 (1,000) - 1,195 56,186 6,843 64,224 64,224 1,000 (1,000) - 989 46,951 6,843 54,783 54,783 The following table shows the movement in lifetime expected credit loss that has been recognised for trade and other receivables in accordance with the simplified approach set out in AASB 9: Financial Instruments. (a) Lifetime Expected Credit Loss: Credit Impaired i. ii. Current trade receivables Current term receivables i. ii. Current trade receivables Current term receivables Opening 1 July 2019 $ 1,000 - 1,000 Opening 1 July 2020 $ 1,000 - 1,000 Consolidated Group Net Amounts $ $ - - - Consolidated Group Net Amounts $ $ - - - Closing 30 June 2020 $ 1,000 - 1,000 Closing 30 June 2021 $ 1,000 - 1,000 - - - - - - The Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The loss allowance provision as at 30 June 2021 is determined as follows; the expected credit losses also incorporate forward-looking information. The "amounts written off" are all due to customers declaring bankruptcy, or term receivables that have now become unrecoverable. 2021 Expected loss rate Gross carrying amount Loss allowing provision 2020 Expected loss rate Gross carrying amount Loss allowing provision Credit risk Current >30 days past due >60 days past due >90 days past due Amounts written off Total $ $ $ $ - - - - - - - - - - - - - - - - - - - - 100% 1,000 (1,000) 100% 1,000 (1,000) $ - 1,000 (1,000) - 1,000 (1,000) The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties other than those receivables specifically provided for and mentioned within Note 10. The class of assets described as Trade and Other Receivables is considered to be the main source of credit risk related to the Group. (a) Financial Assets Measured at Amortised Cost Trade and other Receivables — Total current — Total non-current Total financial assets measured at amortised cost 32 Consolidated Group 2021 2020 $ $ 64,224 - 64,224 64,224 54,783 - 54,783 54,783 Note 24 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 11 Deferred Exploration and Evaluation Balance at beginning of year Current year expenditure capitalised Deconsolidation of subsidiary Sale of tenement Exploration costs written off Balance at end of year Consolidated Group 2021 2020 $ $ 1,062,554 976,326 (995,486) (140,339) (5,064) 897,991 837,730 224,824 - - - 1,062,554 The value of the Company's interest in exploration expenditure is dependent upon the: - - - continuance of the economic entity's right to tenure of the areas of interest; the results of future exploration; and the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale. 75% of Peter Mitchell's Directors Fees have been capitalised as Deferred Exploration and Evaluation Assets. On 17 December 2020, the Company announced it had completed the sale of its 80% interest in the Mt Angelo North Copper Project. A total consideration of $250,000 was received with a further $250,000 cash payment due on production. The total capitalised expenditure in relation to the Mt Angelo project was $140,339. On 29 March 2021, the Company completed its in-specie distribution of Cosmo Gold Limited's shares. Cosmo Gold holds all the Cosmo Newberry tenements. As such, Cosmo Gold Limited is no longer a subsidiary of 3D Resources Limited. The total capitalised expenditure in relation to the Cosmo Newberry tenements was $995,486. The recovery of deferred exploration and evaluation costs is dependent upon the success of pre-feasibility studies, exploration and evaluation or sale or farm-out of the exploration interest. A percentage of the CEO's salary and associate costs are capitalised in line with the Company's policy for capitalising costs directly relating to pre-feasibility and exploration. Broadly, the Company has three cost centres, Corporate, Pre- feasibility and Exploration. Where identifiable, costs associated with Pre-feasibility and Exploration cost centres are capitalised. These costs are annually reviewed for impairment and a charge is made direct to the Statement of profit or loss and other comprehensive income of the Company where an impairment is identified. No impairment (2020: $Nil) was brought to account for the financial year. The Company still intends to exploit for economical gain the remaining tenements under its control. The Group's exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or site of significance to Aboriginal people. As a result, exploration properties or areas within the tenements may be subjected to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist and therefore, the quantum of such potential claims cannot be estimated. The Group has reviewed all of its tenements and has only carried forward the expenses on the tenements that give rise to a potential economic benefit to the Company through development or exploration. The Group has considered the impairment indicators below and confirms no such indicators are applicable at 30 June 2021. As such, the Group does not consider that a full impairment test is necessary. Impairment indicators - - - - - - The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed; Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale; Evidence is available of obsolescence or physical damage of an asset; and The net assets of the Group exceeds its market capitalisation. 33 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 12 Interests in Subsidiaries (a) Information about Principal Subsidiaries The subsidiaries listed below have share capital consisting solely of ordinary shares or ordinary units which are held directly by the Group. The proportion of ownership interests held equals the voting rights held by Group. Each subsidiary’s principal place of business is also its country of incorporation. Name of subsidiary Principal place of Platquest Resources Pty Ltd Haiti Gold Aust Pty Ltd Challenger Mines Pty Ltd Australia Australia Australia Ownership interest held 2021 100% 100% 100% 2020 100% 100% - Subsidiary financial statements used in the preparation of these consolidated financial statements have also been prepared as at the same reporting date as the Group’s financial statements. (b) Significant Restrictions There are no significant restrictions over the Group's ability to access or use assets, and settle liabilities, of the Group. Note 13 Other Financial Assets CURRENT Loan to Cosmo Gold Limited Total current assets The above loan was provided to Cosmo Gold Limited. Note Consolidated Group 2021 $ 788,608 788,608 2020 $ - - On 16 November 2020, the Company entered into a loan agreement with Cosmo Gold Limited on the assumption that an initial public offering of securities of Cosmo Gold (IPO) and subsequent listing on ASX would be completed. The IPO has now been formally withdrawn by Cosmo Gold Limited. The loan agreement was varied on 1 February 2021, 9 June 2021 and 7 July 2021. Terms of the loan agreement are as follows: - - - - loan facility provided is up to AUD $1 million; repayment of the facility is secured by the General Security Deed; repayment terms are as follows: (a) (b) immediately upon the occurrence of an Event of Default; or on 17 December 2021. whichever occurs first accrual of interest at 5% per annum will occur in the event that Cosmo Gold defaults in performing its obligations under the loan agreement or upon the occurrence of an Event of Default. Interest shall accrue on the Principal on and from the date of default. Event of Default occurs on the happening of any of the following: - - - - - - Cosmo Gold failing to pay any of the monies required to be paid under the agreement at the time or in a manner required under the Agreement; Cosmo Gold failing to observe or perform any of its obligations under the Agreement, the General Security Deed or any other agreement or instrument in connect with the Agreement and: (a) (b) if such failure is capable of remedy, such failure is not remedied within 14 days of receipt by Cosmo Gold of Notice from the Company of such failure; or if such failure is not capable of remedy, upon the Company serving Notice of such failure on Cosmo Gold; without the prior written consent of the Company: (a) (b) Cosmo Gold granting an Encumbrance in any property the subject of the Security other than in the Company's favour; or any property the subject of the Security being removed form the effective management or control of Cosmo Gold; a change in the composition of the Board of Cosmo Gold; Cosmo Gold committing any act or experiencing any event which, in the opinion of the Company, shows or tends to show that it is not able to pay its debts as and when they fall due, or Cosmo Gold otherwise enters into any form of bankruptcy or insolvency administration; and Cosmo Gold having a receiver or receiver and manager appointed to any asset of Cosmo Gold. 34 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 14 Property, Plant and Equipment LAND AND BUILDINGS Freehold land at: — at cost Total land PLANT AND EQUIPMENT Plant and equipment: At cost Accumulated depreciation Total plant and equipment Total property, plant and equipment (a) Movements in Carrying Amounts Consolidated Group 2021 2020 $ $ 330,000 330,000 330,000 330,000 661,409 (102,037) 559,372 659,000 (33,601) 625,399 559,372 625,399 889,372 955,399 Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year. Consolidated Group: Balance at 1 July 2019 Acquisitions through acquiring subsidiary Depreciation expense Balance at 30 June 2020 Additions Depreciation expense Balance at 30 June 2021 Note 15 Other Assets CURRENT Prepayments Security bonds paid Total Other Assets Current Non-Current Freehold Land $ Plant and Equipment $ Total $ - 330,000 - 330,000 - - 330,000 - 659,000 (33,601) 625,399 2,409 (68,436) 559,372 - 989,000 (33,601) 955,399 2,409 (68,436) 889,372 Consolidated Group 2021 2020 $ $ 26,889 632,685 659,574 15,098 632,594 647,692 659,574 - 659,574 647,692 - 647,692 35 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 16 Trade and Other Payables CURRENT Unsecured liabilities Trade payables Sundry payables and accrued expenses (a) Financial liabilities at amortised cost classified as trade and other payables Trade and other payables — Total current — Total non-current Financial liabilities as trade and other payables Note 17 Issued Capital 3,880,372,092 (2020: 3,311,122,092) fully paid ordinary shares The Group has authorised share capital amounting to 3,331,122,092 ordinary shares. Consolidated Group 2021 2020 $ $ 273,200 115,083 388,283 147,546 323,561 471,107 Consolidated Group 2021 2020 $ $ 388,283 - 388,283 471,107 - 471,107 Consolidated Group 2021 2020 $ $ 17,496,212 17,496,212 15,009,488 15,009,488 (a) Ordinary Shares At the beginning of the reporting period Shares issued during the year Less transaction costs arising from issue of shares Less capital reduction At the end of the reporting period Consolidated Group 2021 2020 No. 3,311,122,092 569,250,000 $ No. 15,009,488 1,107,221,092 2,720,000 2,203,901,000 $ 12,346,827 2,836,126 - - 3,880,372,092 (220,846) - (173,465) (12,430) - 17,496,212 3,311,122,092 - 15,009,488 In July 2020, a total of 10,000,000 fully paid ordinary shares were issued as a result of the exercise of 10,000,000 unlisted options. A total of $30,000 before capital raising costs were raised. In September 2020, a total of 245,000,000 fully paid ordinary shares were issued at a price of $0.005 per share, raising a total of $1,225,000 before capital raising costs. In September 2020, a total of 49,250,000 fully paid ordinary shares were issued as a result of the exercise of 49,250,000 options. A total of $149,250 was raised before capital raising costs. 750,000 shares were issued at $0.005 per share whilst the remaining were issued at $0.003 per share. In February 2021, a total of 5,000,000 fully paid ordinary shares were issued as a result of the exercise of 5,000,000 options. A total of $15,750 was raised before capital raising costs. In June 2021, a total of 260,000,000 fully paid ordinary shares were issued at a price of $0.005 per share, raising a total of $1,300,000 before capital raising costs. 36 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 17: Issued Capital (continued) (b) Options The following reconciles the outstanding listed options to subscribe for fully paid ordinary shares in the Company at the beginning and end of the financial year. At the beginning of the reporting period Converted to listed options during the year Lapsed during the year Balance at the end of financial year Exercisable at the end of the financial year Consolidated Group 2021 2020 No. No. - 375,395,120 - 375,395,120 375,395,120 - - - - - The following reconciles the outstanding unlisted options to subscribe for fully paid ordinary shares in the Company at the beginning and end of the financial year. At the beginning of the reporting period Issued during the year Converted to listed options during the year Exercised during the year Lapsed during the year Balance at the end of financial year Exercisable at the end of the financial year Listed Options Unlisted options Unlisted options (c) Capital Management Consolidated Group 2021 2020 No. No. 199,145,120 280,694,304 429,500,000 199,145,120 (375,395,120) (64,250,000) - - - (280,694,304) 189,000,000 199,145,120 189,000,000 199,145,120 Number Issue Date Expiry Date 375,395,120 66,500,000 122,500,000 Various 5/02/2020 21/09/2020 31/05/2022 7/02/2022 31/08/2022 Exercise Price $ 0.0042 0.0022 0.0062 Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long-term shareholder value and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital include ordinary share capital, and financial liabilities, supported by financial assets. The Group is not subject to any externally imposed capital requirements. Management effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. Total liabilities Less cash and cash equivalents Net debt Total equity Total capital Gearing ratio Note 18 Capital and Leasing Commitments (a) Exploration Commitments Not longer than 1 year Longer than 1 year and not longer than 5 years Longer than 5 years Committed at reporting date but not recognised as liabilities 37 Note 9 Consolidated Group 2021 $ 388,283 (1,858,578) (1,470,295) 4,770,064 3,299,769 2020 $ 471,107 (405,957) 65,150 2,655,278 2,720,428 N/A 2% Consolidated Group 2021 2020 $ $ 70,000 370,000 - - 512,000 60,000 70,000 942,000 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 19 Operating Segments General Information Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and in determining the allocation of resources. Unless stated otherwise, all accounts are reported to the Board of Directors, being the chief decision makers with respect to operating segments, which are determined in accordance with accounting policies that are consistent to those adapted in the annual financial statements of the consolidated entity. (a) Segment information (i) Segment performance 30 June 2021 REVENUE Total segment revenue Total segment revenue Reconciliation of segment revenue to group revenue Other revenue Administrative expenses Directors' fees Consultancy fees Occupancy costs Travel and marketing costs Other costs Net loss before tax from continuing operations 30 June 2020 REVENUE Total segment revenue Total segment revenue Reconciliation of segment revenue to group revenue Other revenue Administrative expenses Directors' fees Consultancy fees Occupancy costs Travel and marketing costs Other costs Net loss before tax from continuing operations 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ - - - - - - - - - - 170,679 (168,000) (88,324) (26,733) (13,203) (567,063) (692,644) 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ - - - - - - - - - - 887 (156,000) (8,830) (19,922) (106,196) (311,407) (601,468) 38 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 19: Operating Segments (continued) (ii) Segment assets 30 June 2021 Segment assets - opening balance Segment assets increases for the year: Capital expenditure/exploration Write off/exploration Sale of tenements Deconsolidation of subsidiary Reconciliation of segment assets to group assets Unallocated assets: — Cash — Receivables — Other assets — Other financial assets — Property, plant and equipment Total group assets 30 June 2020 Segment assets - opening balance Segment assets increases for the year: Capital expenditure/exploration Write off/exploration Reconciliation of segment assets to group assets Unallocated assets: — Cash — Receivables — Other assets — Property, plant and equipment Total group assets (iii) Segment liabilities 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ 1,031,718 30,836 109,171 (5,064) (140,339) (995,486) 867,155 - - - - 897,991 - - - - - - - - - - - - 1,062,554 - 976,326 (5,064) (140,339) (995,486) 897,991 1,858,578 64,224 788,608 659,574 889,372 5,158,347 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ 837,730 - 193,988 - 1,031,718 30,836 - 30,836 - - - - - - - - 837,730 - 224,824 - 1,062,554 405,957 54,783 647,692 955,399 3,126,385 30 June 2021 Segment liabilities- opening balance Reconciliation of segment liabilities to group liabilities Unallocated liabilities — Trade and other payables Total group liabilities 30 June 2020 Segment liabilities- opening balance Reconciliation of segment liabilities to group liabilities Unallocated liabilities — Trade and other payables Total group liabilities 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ - - - - - - - - - - 388,283 388,283 3D Resources $ Challenger Platquest Alltower Total $ $ $ $ - - - - - - - - - - 471,107 471,107 39 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 20 Cash Flow Information (a) Reconciliation of Cash Flows from Operating Activities with Profit after Income Tax Profit after income tax Non-cash flows in profit - - - Gain on deconsolidation of subsidiary Depreciation Directors fees capitalised Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries: (Increase)/decrease in trade and term receivables Increase/(decrease) in other assets (Decrease)/Increase in trade payables and accruals Net cash generated by operating activities Note 21 Events After the Reporting Period Consolidated Group 2021 2020 $ $ (692,644) (601,468) 56,482 68,436 (108,000) (9,441) (11,882) (121,136) (818,185) - 33,601 (72,000) (32,772) 273,487 36,205 (362,947) Other than the following, the directors are not aware of any significant events since the end of the reporting period. The Company completed a 12 hole drill program at the Challenger Gold Project in late July. Initial drill results were released on 12 August with the Company awaiting final results at the date of this report. Note 22 Related Party Transactions Related Parties (a) The Group's main related parties are as follows: i. Key Management Personnel: Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel. The aggregate compensation made to directors and other members of key management personnel of the Company and the Group is set out below: Short-term employee benefits Consulting fees Accounting and Secretarial fees ii. Other Related Parties 2021 $ 2020 $ 276,000 228,000 - - 60,000 60,000 336,000 288,000 Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel have joint control. (a) Transactions with related parties: Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. The following transactions occurred with related parties: Consolidated Group 2021 $ 2020 $ i. Director related entities - - - - Consulting and Directors' fees paid to Tomik Nominees Pty Ltd, of which Mr Ian Hastings is a director and shareholder 96,000 96,000 Consulting and Directors' fees paid to China Connect, of which Mr Mitchell is a director and shareholder 144,000 96,000 Consulting and Directors' fees paid to Ausnom Pty Ltd, of which Mr Chegwidden is a director and shareholder 36,000 36,000 Accounting and Secretarial fees paid to DW Accounting & Advisory Pty Ltd, of which Mr Andrew Draffin is a director and shareholder 60,000 60,000 40 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 22: Related Party Transactions (continued) ii. Reimbursement Transactions with related parties Reimbursement of business expenses incurred by the Company and initially settled by Mr Ian Hastings. All expenses were incurred on an arm's length basis. 193 59,904 Reimbursement of business expenses incurred by the Company and initially settled by China Connect, of which Mr Peter Mitchell is a director and Shareholder. All expenses were incurred on an arm's length basis. 40,535 46,709 Reimbursement of business expenses incurred by the Company and initially settled by DW Accounting & Advisory Pty Ltd , of which Mr Andrew Draffin is a director and Shareholder. All expenses were incurred on an arm's length basis. 21,668 8,528 (d) Amounts outstanding from related parties Tomik Nominees Pty Ltd China Connect Ausnom Pty Ltd DW Accounting & Advisory Pty Ltd Note 23 Financial Risk Management Consolidated Group 2021 2020 $ 26,400 81,467 9,900 14,300 132,067 $ 116,058 141,953 65,791 85,300 409,102 The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable, bills, leases, preference shares and derivatives. The totals for each category of financial instruments, measured in accordance with AASB 9: Financial Instruments as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Financial assets at amortised cost — cash and cash equivalents — — trade and other receivables other financial assets Total Financial Assets Financial Liabilities Financial liabilities at amortised cost — trade and other payables Total Financial Liabilities Note 9 10 13 16 Consolidated Group 2021 2020 $ $ 1,858,578 405,957 64,224 788,608 54,783 - 2,711,410 460,740 388,283 388,283 471,107 471,107 Specific Financial Risk Exposures and Management The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, foreign currency risk and other price risk (commodity and equity price risk). There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks from the previous period. a. Credit risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited as the counterparties are banks with high credit ratings assigned by international credit rating agencies. The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represent the Group's maximum exposure to credit risk. 41 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 23: Financial Risk Management (continued) Significant increase in credit risk for financial instruments The Company evaluates and compares the risk of a default on a financial instrument at the reporting date with the risk of a default on the financial instrument at the date of initial recognition. To support the evaluation process, the Company takes into consideration both quantitative and qualitative information that is reasonable and justifiable, including past experience and prospective information that is publicly available. Prospective information taken into consideration includes the future volatility of the industries in which the Company’s debtors are in, obtained from industry expert reports, financial news report, governmental bodies, as well as taking into consideration multiple external sources of current and future economic information that Company’s core operations can relate to. b. Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations • preparing forward-looking cash flow analyses in relation to its operating, investing and financing activities; • obtaining funding from a variety of sources; • maintaining a reputable credit profile; Financial liability and financial asset maturity analysis Consolidated Group 2021 $ 2020 $ 2021 $ 2020 $ 2021 $ 2020 $ 2021 $ 2020 $ Within 1 Year 1 to 5 years Over 5 years Total Financial liabilities due for payment Trade and other payables Total expected outflows Consolidated Group 388,283 471,107 388,283 471,107 - - Within 1 Year 1 to 5 years 2021 $ 2020 $ 2021 $ 2020 $ Financial Assets - cash flows realisable Cash and cash equivalents Trade, term and loan receivables 1,858,578 405,957 64,224 54,783 Other financial assets 788,608 - Total anticipated inflows 2,711,410 460,740 2,323,127 (10,367) Net (outflow) / inflow on financial instruments c. Market Risk i. Interest rate risk - - - - - - - - - - - - - - Over 5 years 2021 $ 2020 $ - - - - - - - - - - - - 388,283 471,107 388,283 471,107 Total 2021 $ 2020 $ 1,858,578 405,957 64,224 54,783 788,608 - 2,711,410 460,740 2,323,127 (10,367) The Group's exposure to market risk primarily consists of financial risks associated with changes in interest rates as detailed below. As the level of risk is low, the Group does not use any derivatives to hedge its exposure. The Group is exposed to interest rate risks as it holds funds at variable interest rates. The Group holds no borrowed funds. ii. Foreign currency risk Exposure to foreign currency risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD functional currency of the Group. Sensitivity Analysis The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity prices. The table indicates the impact of how profit and equity values reported at the end of the reporting period would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables. Year ended 30 June 2021 +/- 0.75% in interest rates Consolidated Group Profit $ Equity $ 13,939 13,939 42 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 23: Financial Risk Management (continued) Year ended 30 June 2020 +/- 0.75% in interest rates Consolidated Group Profit Equity $ $ 3,045 3,045 There have been no changes in any of the methods or assumptions used to prepare the above sensitivity analysis from the prior year. Fair Values The Directors consider that the carrying amounts of financial assets and liabilities recorded at cost less any accumulated impairments in the financial statements approximates their fair values. The fair values of financial assets and financial liabilities are determined as follows: - Other financial assets and financial liabilities are determined in accordance with generally accepted pricing models. Fair value estimation The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying amounts as presented in the statement of financial position. Fair value is the amount at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Differences between fair values and carrying amounts of financial instruments with fixed interest rates are due to the change in discount rates being applied by the market since their initial recognition by the Group. Consolidated Group Financial assets Financial assets at amortised cost: Cash and cash equivalents Trade and other receivables: Total financial assets Financial liabilities at amortised cost Trade and other payables Total financial liabilities Note 2021 Carrying Amount $ Fair Value $ Carrying Amount $ 2020 Fair Value $ 9 10 16 1,858,578 64,224 1,922,802 1,858,578 64,224 1,922,802 405,957 54,783 460,740 405,957 54,783 460,740 388,283 388,283 388,283 388,283 471,107 471,107 471,107 471,107 (i) Cash and cash equivalents, trade and other receivables, and trade and other payables are short-term instruments in nature whose carrying amounts are equivalent to their fair values. Note 24 Reserves a. Option Reserve The option reserve records items recognised as expenses on valuation of employee share options and options issued as a result of capital raising exercises. Balance at the beginning of the year Issue of options during the year Exercise of options during the year Expiry of options during the year Balance at the end of the year Consolidated Group 2021 2020 $ $ 69,145 321,456 (750) - 389,851 36,000 69,145 - (36,000) 69,145 The reserve arisen on the grant of share options to third parties as equity based payments and the issue of options as a result of a capital raise exercise. b. Foreign Currency Translation Reserve The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary. Balance at the beginning of the year Foreign currency movements during the year Balance at the end of the year c. Total Reserves Option reserve Foreign currency translation reserve 43 Consolidated Group 2020 2019 $ $ 125 - 125 125 - 125 389,851 125 389,976 69,145 125 69,270 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 25 Economic Dependency All subsidiaries and controlled entities are dependent on the Parent Company, 3D Resources Limited. Note 26 Company Details The registered office of the company is: 3D Resources Limited Level 4 91 William Street Melbourne Vic 3000 The principal places of business are: 3D Resources Limited Level 4 91 William Street Melbourne Vic 3000 44 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 DIRECTORS’ DECLARATION In accordance with a resolution of the directors of 3D Resources Limited, the directors of the company declare that: 1. the financial statements and notes, as set out on pages 20 to 44, are in accordance with the Corporations Act 2001 and: (a) (b) comply with Australian Accounting Standards applicable to the entity, which, as stated in accounting policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the consolidated group; in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and the directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer. 2. 3. Director Dated this Mr Peter Mitchell 30 September 2021 45 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 3D RESOURCES LIMITED Report on the Financial Report Opinion We have audited the financial report of 3D Resources Limited, (the Company and its subsidiaries (the Group)), which comprises the consolidated statement of financial position as at 30 June 2021, 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 statements, including a summary of significant accounting policies, 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 2021 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 (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 3D RESOURCES LIMITED 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. Key audit matter How our audit addressed the key audit matter 1) Carrying value of Capitalised Exploration Expenditure Refer to Note 11 ($897,991) Capitalised Exploration Expenditure relates to costs incurred in relation to the various tenements. For the financial year ended 30 June 2021, the Directors have assessed and determined that no further write off or impairment is required. The auditor’s procedures included: obtaining a copy of the Directors’ assessment of the carrying value of capitalised Exploration Expenditure and reviewing and challenging assertions made by the Directors. discussing with Directors the existence of any potential impairment indicators, including if: i. ii. iii. iv. v. vi. vii. the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed; substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned; exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area; sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale; significant changes with an adverse effect on the entity have taken place during the period, or will take place in the near future, in the technological, market, economic or legal environment in which the entity operates or in the market to which an asset is dedicated; the carrying amount of the net assets of the entity is more than its market capitalisation; and evidence is available of obsolescence or physical damage of an asset. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 3D RESOURCES LIMITED Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly 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 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, 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. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material 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. The Directors are responsible for overseeing the Company’s financial reporting process. INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 3D RESOURCES LIMITED Auditor’s Responsibility 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. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar1.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 included in the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of 3D Resources Limited, for the year ended 30 June 2021, 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. MORROWS AUDIT PTY LTD I.L. JENKINS Director Melbourne: 3D RESOURCES LIMITED AND CONTROLLED ENTITIES ABN: 15 120 973 775 ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES The following information is current as at 27 September 2021. 1. Shareholding a. Distribution of Shareholders Category (size of holding) 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over No. of Holders No. of Ordinary 35 17 79 619 2,283 3,033 5,429 54,235 758,339 45,643,314 3,833,910,775 3,880,372,092 b. The number of shareholdings held in less than marketable parcels is 1,009 (2020: 483) with a combined total of 78,445,812 securities (2020: 18,053,814). c. The names of the substantial shareholders listed in the holding company’s register are: Shareholder Number No. of Fully Paid Ordinary Shares % Held of Issued Ordinary Capital Mr Peter Andrew Proksa Mr Peter Robert Mitchell + Mrs Robin Mary Mitchell
Tomik Nominees Pty Ltd
Mr Adrian Alexander Venuti
Tomik Nominees Pty Ltd
Mr Adrian Alexander Venuti Continue reading text version or see original annual report in PDF
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