CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
DIRECTORS' REPORT
Your Directors submit their report for the year ended 30 June 2021.
Directors
The names and details of the company’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.
Current Directors
John Horsburgh BSc, MSc, FAIMM (Non-Executive Chairman) (Appointed 1 April 1999)
•
Mr John Horsburgh, a graduate of the Royal School of Mines, has over 40 years industry experience including 11 years
with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas with Getty
Oil Development Co., Billiton and RTZ Group. Mr Horsburgh was a co-founder and Non-Executive Chairman of AIM
and TSX listed public company Mariana Resources Limited, prior to its takeover by Sandstorm Gold Ltd. Mr Horsburgh
has had no other directorships of ASX listed companies in the last three years.
Dr Chris Ringrose BSc, PhD, MBA, MAIMM, MAICD (Managing Director) (Appointed 19 June 2003)
•
Dr Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his geology
degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to joining Cullen,
he was Exploration Manager with Troy Resources Limited for nine years. Dr Ringrose has also completed an MBA at
Deakin University and brings to the Company significant management, exploration and project evaluation experience
gained both in Australia and overseas. Dr Ringrose has had no other directorships of listed companies in the last three
years.
•
Wayne John Kernaghan BBus, ACA, FAICD, ACIS (Non-Executive Director and Company Secretary)
(Appointed 11 November 1997)
Mr Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years
experience in various areas of the mining industry. He is also a Fellow of the Australian Institute of Company Directors.
During the past three years Mr Kernaghan has held, and is currently a director and holds, the following listed company
directorships:
-
Cassius Mining Limited (from 30 June 2005 to present)
Principal Activities
The principal activity for the Consolidated Entity comprising Cullen Resources Limited ("the Company") and its
controlled entities (together "the Consolidated Entity") during the course of the financial year was mineral
exploration. There was no significant change in the nature of the Consolidated Entity's activities during the year.
Results
The loss attributable to the Consolidated Entity for the financial year was $ 1,346,651 (2020: loss $773,710). No
income tax was attributable to this result (2020: $Nil).
Dividends
The directors do not recommend the payment of a dividend for this financial year. No dividend has been declared or
paid by the Company since the end of the previous financial year.
Significant Changes in the State of Affairs
In the opinion of the directors there were no significant changes in the state of affairs of the Consolidated Entity that
occurred during the financial year under review not otherwise disclosed in this report or the consolidated financial
statements.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Review of Operations
Cullen is a mineral exploration company currently focused on a search for gold, base metals and nickel-copper-PGE
deposits, either in its own right, or in Joint Ventures managed by other partners.
During the year under review, the Company’s mineral exploration has included: project generation; database reviews;
field mapping; geochemical and geophysical surveying; and drilling programmes. Most field activities were focused
on exploration for gold and base metals at Wongan Hills, W.A., and preparations were made for drilling programmes
to commence at the Barlee and Bromus Projects. The Company also continued to market projects as potential farm-
out opportunities.
Exploration, including joint operations, was exclusively in Western Australia with on-going project generation in
Finland.
Current Key Projects are:
• Wheatbelt, WA , Wongan Hills, (gold, base metals and Ni-Cu-PGE)
• Murchison, WA , North Tuckabianna, (copper and gold)
• Murchison, WA, Barlee, (gold)
•
• North Eastern Goldfields, WA, Mt Eureka JV (gold, VHMS and nickel)
•
Eastern Goldfields, WA, Bromus, (gold)
Eastern Goldfields, WA , Killaloe JV (gold and nickel)
Finland (Project Generation for gold)
•
A total of $865,793 (2019: $495,523) was spent on exploration by Cullen during the year, with Joint Venture Partners
contributing further exploration funds on Cullen tenements.
Cullen will continue to identify and evaluate both advanced and "grass roots" opportunities throughout Australia.
Cullen’s portfolio is under continual evaluation to focus on projects likely to result in discovery of an economic mineral
deposit.
Corporate
At 30 June 2021 available cash totalled $1,413,662 (2020: $271,035). Refer note 1 (c) for discussion on going concern
basis of preparation.
After Balance Date Events
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect the operations
of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in the
subsequent financial years.
Likely Developments and Future Results
Other than as referred to in this report, further information as to likely developments in the operations of the
Consolidated Entity and the expected results of those operations would, in the opinion of the directors, be speculative
and not in the best interests of the Consolidated Entity.
Environmental Regulation
The exploration activities of the Consolidated Entity in Australia are subject to environmental regulation under the
laws of the Commonwealth and the States in which those exploration activities are conducted. The environmental
laws and regulations generally address the potential impact of the Consolidated Entity's activities in the areas of water
and air quality, noise, surface disturbance and the impact upon flora and fauna. The directors are not aware of any
environmental matter which would have a materially adverse impact on the overall business of the Consolidated
Entity.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Options
As at the date of this report the Company has 18,454,545 (2020: 1,363,635) options which were outstanding. During
the year 18,000,000 (2020: Nil) options were issued and 909,090 (2020: Nil) options expired. Refer to Note 11 of the
financial statements for further details of the options outstanding.
During the year no fully paid ordinary shares were issued by virtue of the exercise of options (2020: Nil). Since the
end of the financial year no shares have been issued by virtue of the exercise of options (2020: Nil).
Directors’ Interest
At the date of this report, the interest of the directors in the shares and options of the company were:
Direct
Indirect
2021
J. Horsburgh
C. Ringrose
W. Kernaghan
Fully Paid Shares
-
3,878,788
-
Options
-
12,000,000
-
Fully Paid Shares
11,682,933
-
10,969,698
Options
3,000,000
-
3,000,000
Directors' Meetings
During the year the Company held seven meetings of directors. The attendance of the directors at meetings of the
Board were:
J.Horsburgh
C. Ringrose
W. Kernaghan
No. of meetings
attended
7
7
7
Maximum possible
eligible to attend*
7
7
7
*Number of meetings eligible to attend while a director.
Indemnification and insurance of Directors and Officers
The Company has entered into deeds of indemnity with the Directors indemnifying them against certain liabilities
and costs to the extent permitted by law. The Company has paid premiums totalling $13,833 (2020: $17,157) in
respect of Directors and Officers Liability Insurance and Company reimbursement policies, which covers all Directors
and Officers of the Company. The policy conditions preclude the Company from any detailed disclosures.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Rothsay Auditing, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Rothsay Auditing during or since the financial year.
Employees
The Consolidated Entity employed one employee as at 30 June 2021 (2020: one).
Corporate Governance
In recognising the need for the highest standard of corporate behaviour and accountability, the directors of Cullen
Resources Limited support and have adhered to the principles of good corporate governance. The Company’s
corporate governance statement is on page 25.
Auditor Independence
The directors have received the auditor’s independence declaration for the year ended 30 June 2021 which is on
page 27 and forms part of this directors’ report. For the year Rothsay Auditing have provided non-audit services to
the Consolidated Entity in the amount of $Nil (2020: $Nil).
The directors are satisfied that non-audit services are compatible with the independence requirements of the
Corporations Act 2001. The nature and scope of the non-audit services provided has meant that auditor
independence was not compromised.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest Australian Dollar
(unless otherwise stated) under the option available to the Company under the ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which the instrument applies.
- 21 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of Cullen Resources Limited.
This remuneration report outlines the director and executive remuneration arrangements of the Consolidated Entity
in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report,
key management personnel (KMP) of the Consolidated Entity are defined as those persons having authority and
responsibility for planning, directing and controlling the exploration activities of the Consolidated Entity, directly or
indirectly, including any director (whether executive or otherwise) of the parent company. Only directors of the
Consolidated Entity meet the definition of key management personnel as the executive role is performed by the
executive director.
Details of key management personnel:
Directors
J. Horsburgh
C. Ringrose
W. Kernaghan
Chairman (Non-Executive)
Managing Director
Director (Non-Executive)
Remuneration Policy
The remuneration policy of Cullen Resources Limited has been designed to align director objectives with shareholder
and business objectives by providing a fixed remuneration component and offering specific long-term incentives. The
board of Cullen Resources Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the best executives and directors to run and manage the Company as well as create goal congruence
between directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows.
The remuneration policy, setting the terms and conditions for the executive director was developed by the Board. The
executive receives a base salary on factors such as length of service and experience, superannuation, options and
incentives. The Board reviews executive packages annually by reference to executive performance and comparable
information from industry sectors and other listed companies in similar industries.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to either
long term or short term performance of the Consolidated Entity. However, to align directors’ interest with shareholder
interests, the directors are encouraged to hold shares in the Company. There is a specified aggregate directors fees
of $250,000 for non-executive directors which was approved by shareholders at a general meeting of the Company.
The $250,000 excludes other services outside of non-executive directors' fees. No remuneration consultants have
been engaged during the current and prior years.
Remuneration Incentives
Director and executive remuneration is currently not linked to either long term or short term performance conditions.
The Board feels that the expiry date and exercise price of options when issued to the directors and executives are
sufficient to align the goals of the directors and executives with those of the shareholders to maximise shareholder
wealth, and as such, has not set any performance conditions for the directors or the executives of the Company. The
Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Group performance and shareholder wealth
Below is a table summarising key performance and shareholder wealth statistics for the Consolidated Entity over the
last five years.
Financial Year
30 June 2017
30 June 2018
30 June 2019
30 June 2020
30 June 2021
Loss After Tax
$
918,042
918,006
1,082,812
773,710
1,346,651
EPS
Cents
(0.05)*
(0.04)*
(0.74)
(0.40)
(0.44)
Share Price
Cents
0.1*
0.1*
1.0
1.4
2.6
* The comparative EPS and share prices have not been adjusted for the 1:22 share consolidation on 26 October 2018.
Employment Contract - Managing Director
Pursuant to an agreement Dr Ringrose will provide managing director services to the Company. The term of this
arrangement is from 1 November 2006 and will continue thereafter unless terminated on not less than three months'
notice given at any time. Effective from 1 April 2018 Dr Ringrose’s salary is $180,000 pa. The position of the director
will become redundant under this agreement in the limited circumstances where the employment of the Managing
Director is terminated as a result of a takeover or merger of the Company. The Company will pay the Managing
Director the equivalent of four weeks per year of service or part thereof of his base salary as a redundancy payment.
As part of Dr Ringrose's employment package he was issued with 12,000,000 options on 21 December 2020 with the
following terms. The options will expire on the earlier of the date which is one month after the Director to whom the
options are issued ceases to be a Director of the Company (or such longer period as determined by the Board of
Directors) or at 5.00 pm on 30 November 2023 ("the Expiry Date") with an exercise price of $0.028125 which vested
on issue. No options were issued to Dr Ringrose in the previous financial year.
During the year the Board paid a discretionary bonus of Nil (2020: Nil) to Dr Ringrose.
Non-Executive Directors
The non-executive directors have been issued with 3,000,000 options each on 21 December 2020 with the following
terms. The options will expire on the earlier of the date which is one month after the Director to whom the options
are issued ceases to be a Director of the Company (or such longer period as determined by the Board of Directors) or
at 5.00 pm on 30 November 2023 ("the Expiry Date") with an exercise price of $0.028125 which vested on issue. No
options were issued to Non-Executive Directors in the previous financial year.
Directors’ and Executives’ Remuneration
Details of remuneration provided to directors for the year ended 30 June 2021 are as follows:
Directors
Short Term
Director
Fees
$
Salary/
Consulting
$
Bonus
$
J.Horsburgh
23,333
-
C. Ringrose
-
180,000
W. Kernaghan
20,000
**26,500
Total
43,333
206,500
-
-
-
-
* This relates to the provision of a motor vehicle.
Post
Employ-
ment
Super-
annuation
$
2,217
17,100
1,900
21,217
Long
Term
Long
Service
Leave
$
-
3,638
-
Share
Based
Payments
Options
$
19,800
79,200
19,800
3,638
118,800
Non
Monetary
Benefits
$
-
* 5,417
-
5,417
Perfor-
mance
Related
%
-
-
-
-
Total
$
45,350
285,355
17
68,200
398,905
5
**Consultancy payments were made to Mosman Corporate Services Pty Ltd totalling $26,500 which is a company controlled
by Mr W Kernaghan. There was $825 outstanding at 30 June 2021.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Details of remuneration provided to directors for the year ended 30 June 2020 are as follows:
Directors
J.Horsburgh
C. Ringrose
W. Kernaghan
Total
Short Term
Director
Fees
$
23,333
Salary/
Consulting
$
-
-
180,000
20,000
43,333
**23,500
203,500
Bonus
$
-
-
-
-
Non
Monetary
Benefits
$
-
* 5,417
-
5,417
* This relates to the provision of a motor vehicle.
Post
Employ-
ment
Super-
annuation
$
Long
Term
Long
Service
Leave
$
2,217
-
17,100
3,243
1,900
-
21,217
3,243
Share
Based
Payments
Options
$
-
-
-
-
Perfor-
mance
Related
%
-
-
-
-
Total
$
25,550
205,760
45,400
276,710
**Consultancy payments were made to Mosman Corporate Services Pty Ltd totalling $23,500 which is a company
controlled by Mr W Kernaghan. There was $2,750 outstanding at 30 June 2020.
Shares issued on exercise of remunerated options
During the financial year nil (2020: Nil) remunerated options were exercised. During the financial year 909,090
(2020: Nil) options expired. The directors exercised nil (2020: Nil) options during the year.
Options granted as part of remuneration for the year ended 30 June 2021
Directors
J. Horsburgh
C. Ringrose
W. Kernaghan
Value of options
granted during the
year
$
19,800
79,200
19,800
Value of options
exercised during the
year
$
-
-
-
Value of options
expired during the year
$
-
(11,200)
-
Total value of options
granted, exercised and
expired during the year
$
19,800
68,000
19,800
Options granted as part of remuneration for the year ended 30 June 2020
There were no options granted as a part of remuneration for the year ended 30 June 2020.
Directors
J. Horsburgh
C. Ringrose
W. Kernaghan
Value of options
granted during the
year
$
-
-
-
Value of options
exercised during the
year
$
-
-
-
Value of options
expired during the year
$
-
-
-
Total value of options
granted, exercised and
expired during the year
$
-
-
-
Option holdings of directors
Balance at
beginning of
year 1 July 2020
Number
Options
issued
Number
-
3,000,000
909,090 12,000,000
3,000,000
-
909,090 18,000,000
Directors
J Horsburgh
C Ringrose
W Kernaghan
Total
Options
lapsed
Number
-
(909,090)
-
(909,090)
Balance at end
of year
30 June 2021
Number
Total
Number
Vested and
exercisable at
30 June 2021
Number
3,000,000
12,000,000
3,000,000
3,000,000
12,000,000
3,000,000
3,000,000
12,000,000
3,000,000
18,000,000
18,000,000
18,000,000
The outstanding options are exercisable at $0.028125 and have an expiry date of 30 November 2023.
These options had a weighted average exercise price of $0.028125 and a weighted average remaining contractual life
of 2.42 years.
- 24 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Balance at
beginning of
year
1 July 2019
Number
-
909,090
-
909,090
Directors
J Horsburgh
C Ringrose
W Kernaghan
Total
Options
issued
Number
Options
lapsed
Number
Balance at end
of year
30 June 2020
Number
Total
Number
Vested and
exercisable at
30 June 2020
Number
-
-
-
-
-
-
-
-
-
909,090
-
909,090
-
909,090
-
909,090
-
909,090
-
909,090
The outstanding options are exercisable at $0.066 and have an expiry date of 30 November 2020.
These options had a weighted average exercise price of $0.066 and a weighted average remaining contractual life of
0.42 years
Shareholdings of directors
Directors
J Horsburgh
C Ringrose
W Kernaghan
Total
Directors
J Horsburgh
C Ringrose
W Kernaghan
Total
Balance
1 July 2020
Number
8,012,199
2,909,091
8,227,273
19,148,563
Balance
1 July 2019
Number
5,284,926
1,829,682
5,000,000
12,114,608
Options
Exercised
Number
-
-
-
-
Options
Exercised
Number
-
-
-
-
Net Change
Purchase
Number
3,670,734
969,697
2,742,425
7,382,856
Net Change
Purchase
Number
2,727,273
1,079,409
3,227,273
7,033,955
Balance
30 June 2021
Number
11,682,933
3,878,788
10,969,698
26,531,419
Balance
30 June 2020
Number
8,012,199
2,909,091
8,227,273
19,148,563
The directors' shareholdings are held directly and indirectly.
There were no loans to KMP’s and their related parties.
Other transactions between related parties are on normal commercial terms and conditions no more favourable
than those available to other parties unless otherwise stated. Consultancy payments were made to Mosman
Corporate Services Pty Ltd totalling $26,500(2020: $23,500) which is a company controlled by Mr W Kernaghan.
There was $825 (2020: $2,750) outstanding at 30 June 2021.
End of Remuneration Report
- 25 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Signed in accordance with a resolution of the directors
C. Ringrose
Director
Perth, WA
16 September 2021
- 26 -
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead auditor of the review of Cullen Resources Limited for the year ended 30 June 2021,
I declare that, to the best of my knowledge and belief, there have been:
• no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
• no contraventions of any applicable code of professional conduct in relation to the
audit.
This declaration is in respect of Cullen Resources Ltd and the entities it controlled during
the year.
Rothsay Auditing
Donovan Odendaal
Partner
16 September 2021
Liability limited by a scheme approved under Professional Standards Legislation
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
CORPORATE GOVERNANCE STATEMENT
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of Cullen
Resources Limited have adhered to the principles of corporate governance and this statement outlines the main
corporate governance practices in place throughout the financial year. The ASX Corporate Governance Council
released the fourth edition of Corporate Governance Principles and Recommendations in March 2020 which has not
been early adopted by the Company. Having regard to the size of the Company and the nature of its enterprise, it is
considered that the Company complies as far as possible with the spirit and intentions of the ASX Corporate
Governance Council's Corporate Governance Principles and Recommendations. Unless otherwise stated, the
practices were in place for the entire year.
Board of Directors
The Board of Directors of the Company is responsible for the corporate governance of the Company. The Board guides
and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and
to whom they are accountable.
As the Board acts on behalf of shareholders, it seeks to identify the expectations of shareholders, as well as other
ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business
risk and ensuing arrangements are in place to adequately manage those risks.
The primary responsibility of the Board includes:
•
formulation and approval of the strategic direction, objectives and goals of the Company;
• monitoring the financial performance of the Company, including approval of the Company’s financial statements;
•
•
•
•
ensuring that adequate internal control systems and procedures exists and that compliance with these systems
and procedures is maintained;
the identification of significant business risks and ensuring that such risks are adequately managed;
the review of performance and remuneration of executive directors; and
the establishment and maintenance of appropriate ethical standards.
The responsibility for the operation and administration of the Company is carried out by the directors, who operate
in an executive capacity, supported by senior professional staff. The Board ensures that this team is suitably qualified
and experienced to discharge their responsibilities, and assesses on an ongoing basis the performance of the
management team, to ensure that management’s objectives and activities are aligned with the expectations and risks
identified by the Board.
The Directors of the Company are as follows:
John Horsburgh
Dr Chris Ringrose
Wayne Kernaghan
For information in respect to each director refer to the Directors' Report.
- 28 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Independent Directors
Under ASX guidelines, two of the current Board of three directors are considered to be independent directors.
Dr Ringrose is the executive director and under the ASX guidelines deemed not to be independent by virtue of his
position. The Board is satisfied that the structure of the Board is appropriate for the size of the Company and the
nature of its operations and is a cost effective structure for managing the Company.
Board Composition
When the need for a new director is identified, selection is based on the skills and experience of prospective directors,
having regard to the present and future needs of the Company. Any director so appointed must then stand for
election at the next Annual General Meeting of the Company.
Terms of Appointment as a Director
The constitution of the Company provides that a Director, other than the Managing Director, may not retain office
for more than three calendar years or beyond the third annual general meeting following his or her election,
whichever is longer, without submitting for re-election. One third of the Directors must retire each year and are
eligible for re-election. The Directors who retire by rotation at each annual general meeting are those with the longest
length of time in office since their appointment or last election.
Board Committees
In view of the size of the Company and the nature of its activities, the Board has considered that establishing formally
constituted committees for audit, board nominations and remuneration would contribute little to its effective
management. Accordingly audit matters, the nomination of new Directors and the setting, or review, of remuneration
levels of Directors and senior executives are reviewed by the Board as a whole and approved by resolution of the
Board (with abstentions from relevant Directors where there is a conflict of interest). Where the Board considers that
particular expertise or information is required, which is not available from within their number, appropriate external
advice may be taken and reviewed prior to a final decision being made by the Board.
Remuneration
Remuneration and other terms of employment of executives, including executive directors, are reviewed periodically
by the Board having regard to performance, relevant comparative information and, where necessary, independent
expert advice. Remuneration packages are set at levels that are intended to attract and retain executives capable of
managing the Company’s operations.
The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with
recommendations being made by the non-executive directors. Where the remuneration of a particular executive
director is to be considered, the director concerned does not participate in the discussion or decision making.
Make Timely and Balanced Disclosure
The board has in place written policies and procedures to ensure the Company complies with its obligations under
the continuous disclosure rule 3.1 and other ASX Listing Rule disclosure requirements.
Independent Professional Advice
Directors have the right, in connection with their duties and responsibilities as directors, to seek independent
professional advice at the Company’s expense. Prior approval of the Chairman is required, which will not be
unreasonably withheld.
- 29 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Code of Conduct
In view of the size of the Company and the nature of its activities, the Board has considered that an informal code of
conduct is appropriate to guide executives, management and employees in carrying out their duties and
responsibilities.
Diversity Policy
The Company is in the process of establishing a diversity policy having regard to the size of the company and the
nature of its business.
As at 30 June 2021, 100 % (2020: 100%) of the workforce is male with no females at board or senior management
level. There is only one employee who is male.
Communication to Market & Shareholders
The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all
information necessary to assess the performance of the directors and the Company. Information is communicated
to shareholders and the market through:
•
•
•
•
•
•
the Annual Report which is available to all shareholders;
other periodic reports which are lodged with ASX and available for shareholder scrutiny;
other announcements made in accordance with ASX Listing Rules;
special purpose information memoranda issued to shareholders as appropriate;
the Annual General Meeting and other meetings called to obtain approval for board action as appropriate; and,
The Company's website.
Share Trading
Dealings are not permitted at any time whilst in the possession of price sensitive information not already available
to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst a person is in
possession of inside information.
External Auditors
The external auditor is Rothsay Auditing. The external auditors are invited to attend the annual general meeting and
be available to answer shareholder questions about the conduct of the audit and the preparation and content of the
auditor's report.
Full details of
www.cullenresources.com.au.
the company’s corporate governance practices can be viewed at
its website
- 30 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Consolidated Statement of Financial Position
as at 30 June 2021
Current Assets
Cash and cash equivalents
Receivables
Total Current Assets
Non Current Assets
Plant & equipment
Exploration & evaluation
Intangible assets
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Share based payment reserve
Accumulated losses
Total Equity
Note
21(i)
5
6
7
8
9
10
11
12
13
Consolidated
2021
$
1,413,662
41,274
1,454,936
4,665
14,162
4,747,995
4,766,822
6,221,758
62,826
101,498
164,324
2020
$
271,035
40,076
311,111
-
23,075
4,747,995
4,771,070
5,082,181
79,692
83,146
162,838
164,324
162,838
6,057,434
4,919,343
48,299,395
127,891
(42,369,852)
6,057,434
45,933,453
1,480,016
(42,494,126)
4,919,343
These financial statements should be read in conjunction with the accompanying notes.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
Note
Issued
Capital
$
Share Based
Payment
Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2019
45,261,253
1,480,016
(41,720,416)
5,020,853
Loss for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Issue of share capital
Share issue costs
-
-
-
690,200
(18,000)
Share based payments
12
-
-
-
-
-
-
-
(773,710)
(773,710)
-
-
(773,710)
(773,710)
-
-
-
690,200
(18,000)
-
At 30 June 2020
45,933,453
1,480,016
(42,494,126)
4,919,343
Note
Issued
Capital
$
Share Based
Payment
Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2020
45,933,453
1,480,016
(42,494,126)
4,919,343
Loss for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Issue of share capital
Share issue costs
Options that have expired
Share based payments
12
12
-
-
-
2,454,742
(88,800)
-
-
-
-
-
-
-
(1,346,651)
(1,346,651)
-
-
(1,346,651)
(1,346,651)
-
-
2,454,742
(88,800)
(1,470,925)
1,470,925
-
118,800
-
118,800
At 30 June 2021
48,299,395
127,891
(42,369,852)
6,057,434
These financial statements should be read in conjunction with the accompanying notes.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Note
3
3
3
7
4
Revenues
Rent
Salaries and consultants' fees
Compliance expenses
Share based payments
Impairment of exploration expenditure
Depreciation
Other expenses
Loss before income tax
Income tax
Net loss attributable to members of
Cullen Resources Limited after tax
2021
$
69,504
(35,556)
(177,381)
(132,373)
(118,800)
(874,706)
(1,769)
(75,570)
Consolidated
2020
$
78,553
(36,817)
(135,838)
(117,671)
-
(487,490)
-
(74,447)
(1,346,651)
(773,710)
-
-
(1,346,651)
(773,710)
Other Comprehensive Income:
-
-
Total comprehensive loss
for the period
Basic (loss) per share
(cents per share)
Diluted (loss) per share
(cents per share)
(1,346,651)
(773,710)
22
22
(0.44)
(0.40)
(0.44)
(0.40)
These financial statements should be read in conjunction with the accompanying notes.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Note
Consolidated
2021
$
2020
$
Cash flows from operating activities
Sale of tenements
Cash payments in the course of operations
GST refunded and ATO cash flow boost
Sundry income
Interest received
-
(493,687)
125,141
17,189
269
40,000
(379,960)
49,196
-
277
Net operating cash outflows
21(ii)
(351,088)
(290,487)
Cash flows from investing activities
Payment for plant and equipment
Payment for exploration and evaluation
Net investing cash inflows
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Net financing cash inflows
Net (decrease)/increase in cash
and cash equivalents
Cash and cash equivalents at the
beginning of the financial year
Cash and cash equivalents at the end
of the financial year
(6,434)
(865,793)
(872,227)
-
(495,524)
(495,524)
2,454,742
(88,800)
690,200
(18,000)
2,365,942
672,200
1,142,627
(113,811)
271,035
384,846
21(i)
1,413,662
271,035
(i)
Prior year comparatives have been reclassified, refer to Note 1(c) for further details.
These financial statements should be read in conjunction with the accompanying notes.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
(a)
The financial statements of Cullen Resources Limited (“Consolidated Entity” or “The Company”) are general purpose financial
statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, and Australian Accounting
Standards. The financial statements have also been prepared in accordance with the historical cost convention using the accounting
policies described below.
Statement of compliance
(b)
The financial statements comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Accounting policies and disclosures
(c)
The Consolidated Entity has adopted all new and amended Australian Accounting Standards and AASB interpretations , which were
applicable as of 1 July 2020. Adoption of other new and amended Australian Accounting Standards and AASB interpretations did not
have any effect on the financial position or performance of the Consolidated Entity.
The Consolidated Entity has not elected to early adopt any new standards or amendments.
Going Concern
The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities and the
realisation of assets and liabilities in the normal course of business.
The Consolidated Entity had cash and cash equivalents of $1,413,662 at 30 June 2021. The directors acknowledge that continued
exploration and development of the Consolidated Entity’s mineral exploration projects will necessitate further capital raisings.
The Consolidated Entity remains dependent on its ability to raise funding in volatile capital markets. However, the directors continue
to believe that the going concern basis of accounting by the Consolidated Entity is appropriate as the Consolidated Entity has
successfully completed capital raisings during the year to 30 June 2021, notwithstanding the challenging conditions in equity markets.
In consideration of the above matters, the directors have determined that it is reasonably foreseeable that the Consolidated Entity will
continue as going concern and that it is appropriate that the going concern method of accounting be adopted in the preparation of the
financial statements. In the event that the Consolidated Entity is unable to continue as a going concern (due to inability to raise future
funding requirements), it may be required to realise its assets at amounts different to those currently recognised, settle liabilities other
than in the ordinary course of business and make provisions for other costs which may arise as a result of cessation or curtailment of
normal business operations.
Accordingly, the financial statements do not include adjustments relating to the recoverability and classification of assets amount or
to the amounts and classification of liabilities that might be necessary if the Consolidated Entity does not continue a going concern.
Principles of consolidation
(d)
The consolidated financial statements include the financial statements of Cullen Resources Limited and the results of all of its
controlled entities which are referred to collectively throughout these financial statements as the “Consolidated Entity”. The results
of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter-entity
balances and transactions, and unrealised profits arising from intra-economic entity transactions, have been eliminated in full.
Taxes
(e)
Income tax
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; or
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint venture,
where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences
will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
•
•
where the deferred income tax asset relating to the deductible temporary difference 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 the
accounting profit nor taxable profit or loss; or
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated Statement of
Comprehensive Income.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
Consolidated Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis
and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Provision for employee benefits
(f)
Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service
leave. Annual leave provisions expected to be settled within twelve months are measured at their nominal amounts. Long service
leave provisions are measured at the present value of the estimated future cash outflow to be made in respect of services provided
by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to
Australian corporate bond securities which have terms to maturity approximating the terms of the related liabilities are used.
Investments in controlled entities
(g)
Investments in controlled entities are carried in the company’s financial statements at cost less impairment. Dividends and
distributions are brought to account when they are proposed by the controlled entities.
Exploration and Evaluation Expenditure
Expenditure is deferred
(h)
(i)
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method. Exploration and
evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current (or in the process of being re-
applied for) and either:
•
•
the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage that permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
operations in, or relating to, the area of interest are continuing.
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised
exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised
exploration and evaluation expenditure is assessed for impairment.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the area of interest level
whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
An impairment exists when the carrying amount of an area of interest exceeds its estimated recoverable amount. The area of interest
is then written down to its recoverable amount. Any impairment losses are recognised in the Consolidated Statement of
Comprehensive Income.
(i)
Both the functional and presentation currency of Cullen Resources Limited and its Australian subsidiaries is Australian dollars ($A).
Foreign currency
Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions.
Monetary items in foreign currencies at balance date are translated at the rates of exchange ruling on that date.
Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Consolidated
Statement of Comprehensive Income in the financial year in which the exchange rates change, as exchange gains or losses.
(j)
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Plant and equipment
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 3 to 8 years.
The assets residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate at each financial year
end.
Intangible Asset
(k)
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are
carried at cost less amortisation and any impairment losses. Intangible assets with finite lives are amortised over their useful life and
tested for impairment whenever there is an indication that they may be impaired. The amortisation period and method is reviewed
at each financial year-end.
The Consolidated Entity’s intangible assets represent the deferred consideration payable by the acquirer on the unconditional final
investment decision to proceed and royalties on all iron ore extracted from the area of the tenements of the Mt Stuart Iron Ore Joint
Venture.
These, although entitling the Consolidated Entity to cash upon the unconditional final investment decision to proceed and the
commencement of production, are not considered to fall within the definition of financial assets in accordance with AASB 9 Financial
Instruments (“AASB 9”). The Consolidated Entity considers, amongst the characteristics listed in AASB 9 that they do not contain an
absolute right to receive cash as the Consolidated Entity cannot force the owner to make the investment decision to proceed and to
produce and, furthermore, the counterparty can avoid the payment of cash by deciding not to proceed.
The useful life of the intangible assets will be determined by reference to planned development schedule and mine life on
commencement of mining and the cost of the royalty contract will be amortised on a systematic basis over the life of the mine.
Amortisation rates are adjusted on a prospective basis for all changes to estimates of the life of mine. At 30 June 2021, the decision
to proceed has not been made and hence the assets remain unamortised.
Revenue
(l)
Other revenue includes interest revenue on short term deposit received. It is brought to account using the effective interest rate
method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected
life of the financial asset to the net carrying amount of the financial asset.
Refundable research and development tax offset is brought to account when the funds are received.
(m)
The Consolidated Entity undertakes a number of activities through joint arrangements. A joint arrangement is an arrangement over
Joint Operations
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement which
exists only when the decisions about the relevant activities (being those that significantly affect the returns of the arrangement)
require the unanimous consent of the parties sharing control. The Consolidated Entity’s joint arrangements are in the form of joint
operations.
A joint operation is a type of joint arrangement in which the parties with joint control of the arrangement have rights to the assets
and obligations for the liabilities relating to the arrangement.
The Consolidated Entity recognises in relation to its joint operations:
-
-
-
-
-
Assets, including its share of any assets held jointly
Liabilities, including its share of any liabilities incurred jointly
Revenue from the sale of its share of the output arising from the joint operation
Share of the revenue from the sale of the output by the joint operation
Expenses, including its share of any expenses incurred jointly
Payables
(n)
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future
for goods and services received, whether or not billed to the Consolidated Entity.
Cash and cash equivalents
(o)
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity
of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes
in value. For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks, and money market
investments readily convertible to cash within two working days.
Leases
(p)
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement
conveys a right to use the asset.
Operating lease payments are recognised as an expense in the Consolidated Statement of Comprehensive Income on a straight-line
basis over the lease term.
Issued capital
(q)
Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
Earnings / (losses) per share
(r)
Basic EPS is calculated as net profit/(loss) attributable to members, adjusted to exclude costs of servicing equity, divided by the
weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit/ (loss)
attributable to members, adjusted for:
•
costs of servicing equity;
•
the after tax effect of interest associated with dilutive potential ordinary shares that have been recognised as expenses;
•
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares; and
divided by the weighted average number of ordinary shares, adjusted for the effects of all dilutive potential ordinary shares.
•
(s)
The accounting policies adopted are consistent with those of the previous year.
Change in accounting policies
Share based payments
(t)
At each subsequent reporting date until vesting, the cumulative charge to the Consolidated Statement of Comprehensive Income is
the product of:
(i)
(ii)
The grant date fair value of the option.
The current best estimate of the number of options that will vest, taking into account such factors as the likelihood of
employee turnover during the vesting period and the likelihood of non-market performance conditions being met.
The expired portion of the vesting period.
(iii)
The charge to the Consolidated Statement of Comprehensive Income for the period is the cumulative amount as calculated above
less the amounts already charged in previous periods. There is a corresponding entry to equity.
The company may also issue options that do not have any vesting conditions.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Until an option has vested, any amounts recorded are contingent and will be adjusted if more or fewer options vest than were
originally anticipated to do so. Any option subject to a market condition is considered to vest irrespective of whether or not that
market condition is fulfilled, provided that all other conditions are satisfied.
If the terms of an equity-settled option are modified, as a minimum an expense is recognised as if the terms had not been modified.
An additional expense is recognised for any modification that increases the total fair value of the share-based payment arrangement,
or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity-settled option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised
for the option is recognised immediately. However, if a new option is substituted for the cancelled option and designated as a
replacement option on the date that it is granted, the cancelled and new option are treated as if they were a modification of the
original option, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per
share.
Impairment of non-financial assets
(u)
Non-financial assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable
amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are tested for possible reversal of the impairment whenever events or changes in circumstances
indicate that the impairment may have reversed.
2.
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
In applying the Consolidated Entity’s accounting policies management continually evaluates estimates and assumptions based on
experience and other factors, including expectations of future events that may have an impact on the Consolidated Entity. All
estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to
management. Actual results may differ from the estimates and assumptions. Significant estimates and assumptions made by the
management in the preparation of these financial statements are outlined below.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure
(a)
The future recoverability of capitalised exploration expenditure is dependent on a number of factors, including whether the
Consolidated Entity decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and
evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration
obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined
not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made. In
addition, exploration and evaluation is capitalised if activities in the area of interest have not yet reached a stage that permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the
future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this
determination is made.
Share-based payment transactions
(b)
The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an external valuer using either a binomial or Black-
Scholes model, with the assumptions detailed in Note 16. The accounting estimates and assumptions relating to equity-settled share-
based payments would have no impact on the carrying amount of assets and liabilities within the next annual reporting period but
may impact expenses and equity.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Intangibles
(c)
The recoverable amount of intangible assets is estimated on the basis of the discounted value of future cash flows. The estimates of
future cash flows are based on significant assumptions including:
•
•
•
•
•
timing of the unconditional investment decision to proceed;
estimates of the quantities of ore reserves and mineral resources for which there is a high degree of confidence of economic
extraction and the timing of access to these reserves and resources;
future iron ore prices and exchange rates based on forecasts by a range of recognized economic forecasters as well as
recent spot prices and rates;
construction and production timetable and production rates; and
the discount rate used.
Refer to notes 1(k) and 8 for more information.
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
3. REVENUE AND EXPENSES
Other Revenues
Interest received
Sale of tenements
ATO Cash Flow Boost
Government Drilling grant
Expenses
(Loss) before tax was after crediting the
following expenses:
Auditors remuneration in respect of the Audit or review of the financial
statements
Rent payments
Superannuation
4.
INCOME TAX
The major components of income tax expenses
are:
Income Statement
Current Income Tax
Current income tax charge/(benefit)
Deferred Income Tax
Relating to origination and reversal of
temporary differences
Income tax expense/(benefit) reported in the
statement of comprehensive income
Operating loss before income tax
Prima facie income tax (benefit)
calculated at 26.0% (2020: 27.5%)
Non-deductible expenses
Non-assessable income
Income tax losses recognised
Total income tax (expense)/benefit
Consolidated
2021
$
2020
$
269
-
52,046
17,189
69,504
277
40,000
38,276
-
78,553
18,000
46,000
35,556
36,278
28,540
25,534
-
-
-
-
-
-
(1,346,651)
(773,710)
(350,129)
(212,770)
-
-
-
-
350,129
212,770
-
-
Cullen Resources Limited and its 100% owned Australian subsidiaries have entered the tax consolidation regime from 1
July 2002. The head entity of the tax consolidation group is Cullen Resources Limited.
The entity has adopted the stand alone taxpayer method for measuring current and deferred tax amounts. The members
of the income tax consolidated group have entered into a tax funding agreement.
- 41 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Consolidated
Deferred Tax Liabilities
Statement of Financial
Position
Statement of Comprehensive
Income
2021
$
2020
$
2021
$
2020
$
Exploration
(3,682)
(6,346)
(2,317)
2,209
Deferred Tax Assets
Provisions
Accruals
26,389
1,560
22,865
9,914
4,772
(7,813)
1,058
5,101
Deferred tax assets used to
offset deferred tax liabilities/(not recognised) (i)
(24,267)
(26,433)
(5,358)
8,368
Net Deferred Tax Recognised
in the Statement of Financial Position
-
-
-
-
(i)
As at 30 June 2021 future income tax benefits were available to the Consolidated Entity in respect of operating
losses and prospecting and exploration expenditure incurred. The directors estimate the potential income tax
benefit at 30 June 2021 in respect of tax losses not brought to account is $10,243,048 (2020: $9,892,919) and
there is no expiry date. The benefit of these losses has only been brought to account to the extent needed to
offset deferred tax liabilities. The remaining benefit will only be obtained if:
(a)
(b)
the Consolidated Entity derives future assessable income of a nature and of sufficient amount to
enable the benefit to be realised.
the Consolidated Entity continues to comply with the conditions for deductibility imposed by the law;
and
(c) no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit.
5. RECEIVABLES
Current
Other debtors
Consolidated
2021
$
2020
$
41,274
40,076
Other debtors includes GST receivable which is non-interest bearing. All other debtors are not past due and are not
credit impaired. Considering the size and the credit quality of other debtors, the expected credit loss on the balance at
30 June 2021 is considered insignificant.
The carrying amount of other debtors is a reasonable approximation of fair value.
6. PLANT & EQUIPMENT
Plant & Equipment at cost
Opening balance
Additions
Disposals
Closing balance
- 42 -
Consolidated
2021
$
2020
$
115,812
6,434
-
122,246
115,812
-
-
115,812
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Plant & Equipment – Accumulated depreciation
Opening balance
Depreciation
Disposals
Closing balance
Total written down amount
(a) Reconciliation
Plant & Equipment
Carrying amount at beginning
Additions
Disposals
Depreciation expense
7. EXPLORATION & EVALUATION
Costs carried forward in respect of
areas of interest in the exploration
and evaluation phase
Opening balance
Expenditure incurred during the year
Less
Write off (refer to below)
Closing balance net of write off
(115,812)
(1,769)
-
(117,581)
4,665
-
6,434
-
(1,769)
4,665
(115,812)
-
-
(115,812)
-
-
-
-
-
-
23,075
865,793
888,868
15,042
495,523
510,565
(874,706)
(487,490)
14,162
23,075
Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.
As discussed in the Directors Report, during the financial year, the Company continued its mineral exploration activities
including: project generation, database reviews, field mapping, geochemical surveying, and drilling programmes.
Company exploration activities, including joint operations, were focused in Western Australia with additional activities
in Finland.
A total of $865,793 (2020: $495,523) of exploration expenditure was capitalised by Cullen during the year. The Directors
have reviewed all exploration projects for indicators of impairment in light of approved budgets. Where substantive
expenditure is neither budgeted nor planned the area of interest has been written down to its fair value less costs to
dispose. In determining fair value less cost of disposal the Directors had regard to the best evidence of what a willing
participant would pay in an arms length transaction (Level 3 fair value hierarchy). Where no such evidence was available,
areas of interest were written down to nil pending the outcome of any future farm-out arrangement. This resulted in a
write off of $874,706 (2020: $487,490). The Company will continue to look to attract farm-in partners and/or
recommence exploration should circumstances change.
The ultimate recoupment of the book value of deferred costs relating to areas of interest in the exploration and
evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale of
the respective areas of interest and the Consolidated Entity’s ability to continue to meet its financial obligations to
maintain the areas of interest.
- 43 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
8.
INTANGIBLE ASSETS
Deferred consideration (a) and royalty stream(b)
Consolidated
2021
$
4,747,995
4,747,995
2020
$
4,747,995
4,747,995
On 12 April 2017, the consolidated entity sold its 30% contributing interest in the Mt Stuart Iron Ore Joint Venture and
all of its other rights and interests in the Joint Venture tenements. Part of the consideration includes:
(a) A deferred consideration of $1 million payable on the making of an unconditional final investment decision to
proceed with the development of an iron ore mine on the tenements which were previously the Mt Stuart
Joint Venture.
(b) An uncapped 1% FOB royalty on all iron ore extracted from the area of the Joint Venture tenements.
At the disposal date, the above consideration was recognised as an intangible asset. Its carrying value was determined
based on a Net Present Value calculation using a discounted cash flow model with a number of assumptions including
timing of unconditional investment decisions to proceed, future iron ore prices, exchange rate, timing for the
development and production, future product volumes and discount rates (Level 3 fair value hierarchy).
As at 30 June 2021, the directors have adopted a similar Net Present Value calculation with the updated key
assumptions to reflect changes in the market environment to determine the recoverable amount of the intangible asset
as part of their impairment assessment of the carrying value of the asset. In their opinion, this assessment supports the
carrying value of the assets and supports the conclusion that no impairment of the intangible asset is required as at 30
June 2021.
In July 2015 the Consolidated Entity sold its interest in the Wyloo project tenements to its partner Fortescue Metals
Group Limited and the deferred consideration is a 1.5 % F.O.B. royalty up to 15 Mt of iron ore production from Wyloo
project tenements, and will receive $900,000 cash if and when a decision is made to commence mining on a commercial
basis – E47/1649, 1650, ML 47/1490, and ML 08/502.
9. TRADE AND OTHER PAYABLES
Current
Trade creditors - unsecured
62,826
79,692
Trade creditors are non-interest bearing and are normally settled on 30 day terms. The carrying amount of trade
creditors is a reasonable approximation of fair value.
10.
PROVISIONS
Current
Employee benefits
Consolidated
2021
$
2020
$
101,498
83,146
- 44 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
11. CONTRIBUTED EQUITY
Issued capital
373,917,657 ordinary shares (2020: 224,937,584)
Movement in issued shares for the year:
48,299,395
45,933,453
2021
2020
Number of
Shares
$
Number of
$
Beginning of the financial year:
Issued at 1.3 cents each(i)
Issued at 2.0 cents each(ii)
Issued at 1.5 cents each(ii)
Issued at 1.1 cents each(iii)
Less share issue expenses
End of financial year:
224,937,584
74,980,073
74,000,000
-
-
-
373,917,657
45,933,453
974,742
1,480,000
-
-
(88,800)
48,299,395
(i) Issued under a rights issue
(ii) Issued under a placement
(iii) Issued under a Shareholder Share Purchase Plan.
Shares
169,464,828
-
-
20,000,000
35,472,756
-
224,937,584
45,261,253
-
-
300,000
390,200
(18,000)
45,933,453
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Options
As at 30 June 2021 there are 18,454,545 (2020: 1,363,635) unissued shares in respect of which options were outstanding
and the details of these are as follows:
Number
Grant Date
Vesting Date
18,000,000
21/12/20
454,545
19/12/18
Nil Vesting
Conditions
Nil Vesting
Conditions
Exercise
Price
$0.028125
Expiry Date
30 November 2023
Fair Value at
Grant Date
0.0066
$0.066
1 November 2021
0.02
The options have no rights until they are exercised and become ordinary shares.
During the year 909,090 (2020: nil) options lapsed.
During the year 18,000,000 (2020: nil) options were issued to Directors as approved by shareholders on 30 November
2020.
During the year nil (2020: Nil) options were issued to a third party for exploration.
Since the end of the financial year no shares have been issued by virtue of the exercise of options.
- 45 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
12. SHARE BASED PAYMENT RESERVE
The share based payment reserve represents the cost of share-based payments to directors, employees and third
parties.
Beginning of the year
Share based payments (Note 16)
Options that have lapsed
End of the year
13. ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net loss
Transfer from share based payment reserve
Accumulated losses at the end of the year
Consolidated
2021
$
2020
$
1,480,016
118,800
(1,470,925)
127,891
1,480,016
-
-
1,480,016
(42,494,126)
(1,346,651)
1,470,925
(42,369,852)
(41,720,416)
(773,710)
-
(42,494,126)
14. PARTICULARS IN RELATION TO CONTROLLED ENTITIES
The consolidated financial statements at 30 June 2021 include the following controlled entities. The financial years of
all controlled entities are the same as that of the parent entity.
Place of
Incorporation
Interest
%
Name
Cullen Minerals Pty Limited
Cullen Exploration Pty Ltd
Bearmark Investments Pty Ltd
Cullen Finland OY
Australia
Australia
Botswana
Finland
15. KEY MANAGEMENT PERSONNEL
June
2021
100
100
100
100
June
2020
100
100
100
100
Compensation for key management personnel
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share-based payments
Total compensation
- 46 -
Investment
$
June
2021
June
2020
-
-
-
-
-
-
-
-
Consolidated
2021
$
2020
$
255,250
21,217
3,638
118,800
398,905
252,250
21,217
3,243
-
276,710
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
16. SHARE BASED PAYMENTS
(a)
Recognised share based payment expenses
Director options
Third party options
2021
$
118,800
-
118,800
2020
$
-
9,091
9,091
Employee Options
(b)
For details/movements around the director options, please refer to note 11.
18,000,000 employee and director options were issued during the year. (2020: Nil)
909,090 employee or director options lapsed during the year. (2020: Nil)
(c) Weighted average remaining contractual life
Options - Third party
Options - Directors
(d) Range of exercise prices
Options - Third party
Options - Directors
(e) Weighted average fair value at date of issue
Options - Third party
Options - Directors
2021
Years
0.33
2.42
2021
cents
6.6
2.8125
2021
cents
-
0.066
2020
Years
1.33
0.42
2020
cents
6.6
6.6
2020
cents
2.0
-
(f) Option pricing model
The fair value of the equity settled share options granted are estimated as at the date of allocation using a Black-
Scholes Model taking into account the terms and conditions upon which they were granted.
The following table lists the inputs to the models used at the date of allocation for employee and directors’ options:
74.97%
Expected volatility (i)
0.1%
Risk free interest rate
$0.028125
Exercise price
Share price at measurement date
$0.018
Expected dividend yield 0.00%
2021
2020
334%
1.9%
$0.066
$0.02
0.00%
(i)
The expected volatility was based on the historical volatility of the underlying shares over a period
equivalent to the expected life of the option.
17. JOINT OPERATIONS
The Consolidated Entity has interests in the following joint operations as at 30 June 2021:
Principal Activity
Other Participant
(a) Paraburdoo
Exploration
Fortescue Mining Group Limited (Fortescue)
(b) Killaloe
Exploration
Liontown Resources Limited (Liontown)
(c) Mt Eureka
Exploration
Rox Resources Limited (Rox)
a)
Fortescue can earn up to 80% in the iron ore rights, Cullen has a 100% interest.
- 47 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
b)
c)
Liontown has an 80% interest; Cullen is 20% free carried to decision to mine.
Rox can earn up to a 75% interest.
The joint operations are not separate legal entities. They are contractual arrangements between the participants for
the sharing of costs and any outputs and do not, in themselves, generate revenue and profit. The net contribution of
any joint operations to the operating profit before income tax is $nil (2020: $nil). The Consolidated Entity’s assets
employed in the jointly controlled assets, are included in the balance sheet of the Consolidated Entity as follows:
Current Assets
Receivables
Non-Current Assets
Exploration and expenditure
Current Liabilities
Trade and other payables
18. COMMITMENTS
Minimum exploration work
Consolidated
2021
$
2020
$
-
-
-
-
-
-
The Consolidated Entity has certain obligations to perform minimum exploration work and expend minimum amounts
of money on mineral exploration tenements. The Consolidated Entity is required to expend a minimum of $450,500
over the next year to keep its current tenements in good standing.
19. RELATED PARTIES
Payments to director related companies
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. Consultancy payments were made to Mosman Corporate Services
Pty Ltd totalling $26,500(2020: $23,500) which is a company controlled by Mr W Kernaghan. There was $875 (2020:
$2,750) outstanding at 30 June 2021.
20. OPERATING SEGMENTS
Identification of Reportable Segments
The Consolidated Entity has based its operating segment on the internal reports that are reviewed and used by the
executive management team in assessing performance and in determining the allocation of resources.
The Consolidated Entity currently does not have production and is only involved in exploration. As a consequence,
activities in the operating segment are identified by management based on the manner in which resources are
allocated, the nature of the resources provided and the identity of the manager and country of expenditure. Discrete
financial information about each of these areas is reported to the executive management team on a monthly basis.
Based on this criteria, the Consolidated Entity has only one operating segment, being exploration, and the segment
operations and results are the same as the Consolidated Entity’s results.
- 48 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
21. STATEMENT OF CASH FLOWS
(i) Reconciliation of cash
For the purposes of the Consolidated Statement of Cash Flows, cash includes cash at bank and short term deposits at
call. Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the
related items in the Consolidated Statement of Financial Position as follows:
Cash at bank
(ii) Reconciliation of operating (loss)
after income tax to net cash used in operating activities
Operating (loss) after income tax
Add/(less) non cash items
Impairment of exploration
Depreciation
Share based payments
(Decrease) / Increase in provisions for employee benefits
(Decrease) / Increase in trade and other payables
Decrease / (Increase) in receivables
-
Net operating cashflows
22.
EARNINGS/(LOSS)PER SHARE
Basic (loss) per share (cents per share)
Diluted (loss) per share (cents per share)
The following reflects the income and share data used
in the calculations of basic and diluted (loss) per share
Net (loss)
Weighted average number of ordinary shares used in
the calculation of basic and diluted earnings per share
Options on issue at year end are not dilutive and hence
not used in the calculation of diluted EPS
23. FINANCIAL INSTRUMENTS
Consolidated
2021
$
1,413,662
2020
$
271,035
(1,346,651)
(773,710)
874,706
1,769
118,800
18,352
(16,866)
(1,198)
487,490
-
-
3,846
9,141
(17,255)
(351,088)
(290,488)
Consolidated
2021
2020
(0.44)
(0.44)
(0.40)
(0.40)
(1,346,651)
(773,710)
308,746,910
193,422,744
18,454,545
1,363,635
The Consolidated Entity's financial instruments comprise receivables, payables, and cash and short-term deposits.
The Consolidated Entity manages its exposure to key financial risks, including interest rate risk in accordance with the
Consolidated Entity's financial risk management policy. The objective of the policy is to support the delivery of the
Consolidated Entity's financial targets whilst protecting future financial security.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board of Directors. Due to the size
and nature of the company's operations, and as the company does not use derivative instruments or debt, the directors
do not believe the establishment of a risk management committee is warranted.
- 49 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
Interest Rate Risk
(a)
The Consolidated Entity's exposure to market interest rates relates primarily to the Consolidated Entity's cash and cash
equivalents.
The Consolidated Entity's exposure to interest rate risk for each class of financial assets and financial liabilities is set out
below.
Financial Instruments
Financial Assets
Cash and cash equivalents
Total Financial Assets
Consolidated
Floating
interest rate
Floating
interest rate
2021
$
2020
$
1,413,662
271,035
1,413,662
271,035
Cash gives rise to interest rate risk because the interest rate is variable.
The following summarises the effect on loss and equity of financial instruments held at balance date as a result of a 0.5%
movement in interest rates, with all other variables remaining constant.
Interest rate +0.5%
Interest rate -0.5%
Consolidated
(Decrease)/Increase in loss/equity
2021
$
(7,068)
7,068
2020
$
(1,355)
1,355
The selection of 0.5% sensitivity check was based on recent interest rate adjustments. The same basis was adopted in
2020.
(b) Currency Risk
The Consolidated Entity has limited exposure to foreign currency risk as it pays for its overseas exploration activities from
Australia in various overseas currencies.
(c) Credit Risk
Credit risk arises from the financial assets of the Consolidated Entity, namely cash at bank, trade and other receivables.
The Consolidated Entity's exposure to credit risk arises from potential default of the counter party, with a maximum
exposure equal to its carrying amount. Exposure at balance date is addressed in each applicable note.
The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.
Cash at bank and receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity's
exposure to bad debts is not significant. Receivables are due from the Australian Taxation Office and other government
bodies while bank balances are with reputable Australian banks which have very low default risk.
There are no significant concentrations of credit risk within the Consolidated Entity and cash and cash equivalents are
spread amongst the big four Australian Banks.
(d) Liquidity Risk
The liquidity position of the Consolidated Entity is managed to ensure sufficient liquid funds are available to meet the
Consolidated Entity's financial commitments in a timely and cost-effective manner. The Consolidated Entity funds its
activities through capital raisings in order to limit its liquidity risk which is monitored on a monthly basis.
Contractual maturity of the trade payables is within 30 day terms.
The Consolidate Entity manages its liquidity risk by monitoring the total cash inflows and outflows expected on a monthly
basis. The Consolidated entity has established comprehensive risk reporting covering its business units that reflect
expectations of management of the expected statement of financial assets and liabilities.
- 50 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
(e) Capital Management
Management controls the capital of the Consolidated Entity in order to provide the shareholders with adequate returns
and ensure that the Consolidated Entity can fund its operations and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the group's capital by assessing the Consolidated Entity's financial risks and adjusting
its capital structure in responses to include the management of debt levels, distributions to shareholders and share issues.
The Consolidated Entity uses cash flow forecasts to manage and adjust its capital management.
There have been no changes in the strategy adopted by management to control the capital of the Consolidated Entity
since the prior year.
Capital managed by the Consolidated Entity consists of shareholders equity.
Shareholders equity
24. AUDITOR'S REMUNERATION
Amounts received or due and receivable by :
-
-
-
an audit or review of the financial report of the entity and any other entity in
the Consolidated Entity – Rothsay Auditing (current auditor)
an audit or review of the financial report of the entity and any other entity in
the Consolidated Entity – Ernst and Young (previous auditor)
taxation services provided to the Consolidated Entity
25. PARENT ENTITY INFORMATION
Information relating to Cullen Resources Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Share based payment reserve
Total shareholders' equity
Loss of the parent entity
Total comprehensive income of the parent entity
Consolidated
2021
$
6,057,434
2020
$
4,919,343
Consolidated
2021
$
18,000
-
-
18,000
2020
$
-
46,000
-
46,000
2021
$
1,408,097
6,075,008
17,574
17,574
48,299,395
42,369,852
127,891
6,057,434
1,346,651
1,346,651
2020
$
258,112
4,961,865
42,522
42,522
45,933,453
42,494,126
1,480,016
4,919,343
773,710
773,710
The parent entity has no contingent liabilities, nor does it have any contractual commitments for the acquisition of property, plant
or equipment.
26. SUBSEQUENT EVENTS
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event
of a material and unusual nature likely, in the opinion of the directors, to affect the operations of the Consolidated Entity, the results
of those operations or the state of affairs of the Consolidated Entity in the subsequent financial years.
27. CORPORATE INFORMATION
The financial report of Cullen Resources Limited for the year ended 30 June 2021 was authorised for issue in accordance with a
resolution of the directors on 16 September 2021.
Cullen Resources Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange.
- 51 -
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of Cullen Resources Limited, I state that:
In the opinion of the directors:
(a)
the financial statements and notes of the Consolidated Entity are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2021 and
of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
(c)
(d)
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1(b).
subject to the achievement of the matters in Note 1(c), there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable.
this declaration has been made after receiving the declaration required to be made to the directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ended
30 June 2021.
On behalf of the Board
C. Ringrose
Director
Perth, WA
16 September 2021
- 52 -
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
CULLEN RESOURCES LIMITED
Report on the Audit of the Financial Report
Qualified Opinion
We have audited the financial report of Cullen Resources Limited (“the Company”) and its controlled entities
(“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 on that date and
notes to the financial statements, including a summary of significant accounting policies and the directors’
declaration of the Company.
In our opinion, except for the effects of the matters described in the Basis for Qualified Opinion section of
our report, 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 Qualified Opinion
As detailed in Note 12 to the financial report, on 12 April 2017, the Group sold its 30% contributing interest
in the Mt Stuart Iron Ore Joint Venture and recognised a royalty intangible asset of $4,747,995 being the
Directors’ estimated fair value of the consideration receivable at the disposal date. In estimating the fair
value of the consideration receivable, the directors used a discounted cash flow model with a number of
assumptions as to the timing, quantum and discounting of cash flows. The intangible asset recognised by
the company includes a deferred consideration of $1,000,000, which has not been separately disclosed. At
30 June 2021, the directors have adopted a similar net present value calculation with updated market
assumptions to determine the recoverable amount of the intangible asset as part of their impairment
assessment of the carrying value of the deferred consideration and the royalty intangible asset. The
directors have determined that the net present value calculation supports that the recoverable amount of
these assets is higher than their carrying value.
For the audit of the Group’s financial report for the year ended 30 June 2021, we have been unable to
obtain sufficient appropriate audit evidence to assess the reasonableness of the directors’ assumptions
adopted in determining the recoverable value of the deferred consideration and the intangible asset as part
of the asset’s impairment assessment. Consequently, we are unable to determine the accuracy and
appropriateness of the carrying value of these assets, their classification and related disclosures as disclosed
in the financial report.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
CULLEN RESOURCES LIMITED (continued)
The Group’s audit reports for the year ended 30 June 2020 was qualified as sufficient appropriate audit
evidence to assess the reasonableness of the directors’ assumptions adopted in determining the recoverable
value of the deferred consideration and the intangible asset as part of the asset’s impairment assessment
was unable to be obtained. The consolidated statement of financial position as at 30 June 2020, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity, the
consolidated statement of cash flows for the year ended 30 June 2020 and associated notes are shown as
comparatives in the Group’s financial report.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under these
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of this report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (Including Independence
Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
Emphasis or Matter - Material Uncertainty Related to Going Concern
We draw attention to Note 1 of the financial report, which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our conclusion is not modified in respect of this matter.
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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
CULLEN RESOURCES LIMITED (continued)
Key Audit Matter – Exploration and Evaluation
Expenditure
How our Audit Addressed the Key Audit Matter
The Group has impaired a significant amount of
exploration and evaluation expenditure during
the year.
Our procedures
in assessing exploration and
evaluation expenditure included but were not limited
to the following:
We do not consider exploration and evaluation
expenditure to be at a high risk of significant
misstatement, or to be subject to a significant
level of judgement. However due to the
materiality in the context of the financial
statements as a whole, this is considered to be an
area which had an effect on our overall strategy
and allocation of resources in planning and
completing our audit.
• We assessed exploration and evaluation
expenditure with reference to AASB 6
Exploration for and Evaluation of Mineral
Resources.
• We tested a sample of exploration and
evaluation
supporting
expenditure
documentation to ensure they were bona
fide payments; and
to
• We documented and assessed the processes
and controls in place to record exploration
and evaluation transactions.
We have also assessed the appropriateness of the
disclosures included in the financial report.
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 there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibility 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 the 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.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
CULLEN RESOURCES LIMITED (continued)
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 cease operations,
or have no realistic alternative but to do so.
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 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: www.auasb.gov.au/Home.aspx.
We communicate with the directors regarding, amongst other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe those matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communications.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in the directors’ report for the year ended 30 June 2021.
In our opinion the remuneration report of Cullen Resources Ltd for the year ended 30 June 2021 complies
with section 300A of the Corporations Act 2001.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
CULLEN RESOURCES LIMITED (continued)
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.
Rothsay Auditing
Dated 16 September 2021
Donovan Odendaal
Partner
CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
SHAREHOLDER INFORMATION
CAPITAL STRUCTURE
As at 15 September 2021, the company had the following securities on issue:
Issued Capital
Top 20 Shareholders
Total holding of twenty largest shareholders
% of total shares on issue
Distribution of shareholders
1 - 1,000 shares
1,001 - 5,000 shares
5,001 - 10,000 shares
10,001 - 100,000 shares
100,001 and over
Total
Fully paid
Ordinary shares
373,917,657
158,308,680
42.34%
1,027
773
195
647
415
3,057
Unmarketable Parcels as at 15 September 2021
Minimum $500.00
2,301
OPTIONS
As at 15 September 2021, 18,454,545 unissued shares in respect of options were outstanding.
These are as follows:
Number
18,000,000
454,545
Exercise Price
Expiry Date
$0.028125
$0.066
30 November 2023
1 November 2021
SUBSTANTIAL SHAREHOLDERS
The company has one Substantial Shareholder as at 15 September 2021
Name
Perth Capital Pty Ltd, Wythenshawe Pty
Ltd & Associates
%
14.07
No. of shares
52,621,985
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CULLEN RESOURCES LIMITED - ANNUAL REPORT 2021
TWENTY LARGEST SHAREHOLDERS
The names of the twenty holders of the fully paid shares at 15 September 2021 are listed below:
Name
Perth Capital Pty Ltd
Bellarine Gold Pty Ltd
Perth Capital Pty Ltd
WJK Investments Pty Ltd
Innerleithen Pty Ltd
Chiatta Pty Ltd
W L Houghton Pty Ltd
Denkey Pty Ltd
Glyde Street Nominees Pty Ltd
Trebble Sum Pty Limited
Mr Damian Francis Hall
Warramboo Holdings Pty Ltd
Bikini Atoll Investments Pty Ltd
Mr Herbert Choy
Aquila Resources Ltd
Vemac Ascent Investments Pty Ltd
Mr Christopher Robert Ringrose
Farrington Corporate Services Pty Ltd
Bikini Atoll Investments Pty Limited
BIMH Pty Ltd
Total
No. of Shares
% Held
Rank
18,000,000
15,630,674
15,182,127
10,969,698
10,787,500
10,000,000
8,000,000
7,400,000
7,070,403
6,500,000
6,257,198
6,029,528
5,544,993
4,981,500
4,651,973
3,940,173
3,878,788
3,817,458
3,666,667
3,000,000
4.81
4.18
4.06
2.93
2.88
2.67
2.14
1.98
1.89
1.74
1.67
1.61
1.48
1.33
1.24
1.05
1.04
1.02
0.98
0.80
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
158,308,680
42.34
VOTING RIGHTS
Every member present in person or by representative shall on a show of hands have one vote, and on a poll every
member present in person or by representative, proxy or attorney shall have one vote in respect of each fully paid
share held by him.
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