Cullen Resources Limited
Annual Report 2022

Plain-text annual report

CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 DIRECTORS' REPORT Your Directors submit their report for the year ended 30 June 2022. 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 $ 1,379,364 (2021: loss $1,346,651). No income tax was attributable to this result (2021: $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. - 22 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Review of Operations Cullen is a mineral exploration company currently focused on a search for gold, lithium, 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 at Cue, with a first pass air core drilling programme completed at Barlee. Preparations were made for drilling programmes to commence at the Bromus Project and soil sampling has been planned for Yornup. The Company also continued to market projects as potential farm-out opportunities. The Company farmed out it’s Finland interests to Capella Minerals Ltd. 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 $1,048,745 (2021: $865,793) 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 2022 available cash totalled $594,563 (2021: $1,413,662). 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. - 23 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Options As at the date of this report the Company has 18,000,000 (2021: 18,454,545) options which were outstanding. During the year Nil (2021: 18,000,000) options were issued and 454,545 (2021: 909,090) 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 (2021: Nil). Since the end of the financial year no shares have been issued by virtue of the exercise of options (2021: 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 2022 J. Horsburgh C. Ringrose W. Kernaghan Fully Paid Shares - 5,643,494 - Options - 12,000,000 - Fully Paid Shares 13,447,639 - 12,734,404 Options 3,000,000 - 3,000,000 Directors' Meetings During the year the Company held four meetings of directors. The attendance of the directors at meetings of the Board were: J.Horsburgh C. Ringrose W. Kernaghan No. of meetings attended 4 4 4 Maximum possible eligible to attend* 4 4 4 *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 $15,261 (2021: $13,833) 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 Audit & Assurance Pty Ltd, 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 Audit & Assurance Pty Ltd during or since the financial year. Employees The Consolidated Entity employed one employee as at 30 June 2022 (2021: 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 2022 which is on page 30 and forms part of this directors’ report. For the year Rothsay Audit & Assurance Pty Ltd have provided non- audit services to the Consolidated Entity in the amount of $Nil (2021: $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. - 24 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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. - 25 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2018 30 June 2019 30 June 2020 30 June 2021 30 June 2022 Loss After Tax $ 918,006 1,082,812 773,710 1,346,651 1,379,364 EPS Cents (0.04)* (0.74) (0.40) (0.44) (0.35) Share Price Cents 0.1* 1.0 1.4 2.6 1.2 * 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 July 2021 Dr Ringrose’s salary is $210,500 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 current financial year. During the year the Board paid a discretionary bonus of Nil (2021: 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 current financial year. Directors’ and Executives’ Remuneration Details of remuneration provided to directors for the year ended 30 June 2022 are as follows: Directors Short Term Director Fees $ Salary/ Consulting $ Bonus $ J.Horsburgh 27,500 - C. Ringrose - 210,500 W. Kernaghan 25,000 **26,750 Total 52,500 237,250 - - - - * This relates to the provision of a motor vehicle. Post Employ- ment Super- annuation $ 2,750 21,050 2,500 26,300 Long Term Long Service Leave $ - 10,919 - 10,919 Share Based Payments Options $ - - - - Non Monetary Benefits $ - * 5,417 - 5,417 Perfor- mance Related % - - - - Total $ 30,250 247,886 17 54,250 332,386 5 **Consultancy payments were made to Mosman Corporate Services Pty Ltd totalling $26,750 which is a company controlled by Mr W Kernaghan. There was $1,125 outstanding at 30 June 2022. - 26 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Details of remuneration provided to directors for the year ended 30 June 2021 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 **26,500 206,500 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 3,638 1,900 - Share Based Payments Options $ 19,800 79,200 19,800 Total $ 45,350 285,35517 68,200 21,217 3,638 118,800 398,9055 Perfor- mance Related % - - - - **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. Shares issued on exercise of remunerated options During the financial year nil (2021: Nil) remunerated options were exercised. During the financial year 909,090 (2021: Nil) options expired. The directors exercised nil (2021: Nil) options during the year. Options granted as part of remuneration for the year ended 30 June 2022 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 $ - - - Options granted as part of remuneration for the year ended 30 June 2021 There were 18,000,000 options granted as a 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 Option holdings of directors Balance at beginning of year 1 July 2021 Number 3,000,000 12,000,000 3,000,000 18,000,000 Directors J Horsburgh C Ringrose W Kernaghan Total Options issued Number Options lapsed Number Balance at end of year 30 June 2022 Number Total Number Vested and exercisable at 30 June 2022 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 1.42 years. - 27 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Balance at beginning of year 1 July 2020 Number Options issued Number Options lapsed Number Balance at end of year 30 June 2021 Number Total Number Vested and exercisable at 30 June 2021 Number - 909,090 - 909,090 3,000,000 12,000,000 3,000,000 18,000,000 - (909,090) - (909,090) 3,000,000 12,000,000 3,000,000 18,000,000 3,000,000 12,000,000 3,000,000 18,000,000 3,000,000 12,000,000 3,000,000 18,000,000 Directors J Horsburgh C Ringrose W Kernaghan Total 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 Shareholdings of directors Directors J Horsburgh C Ringrose W Kernaghan Total Directors J Horsburgh C Ringrose W Kernaghan Total Balance 1 July 2021 Number 11,682,933 3,878,788 10,969,698 26,531,419 Balance 1 July 2020 Number 8,012,199 2,909,091 8,227,273 19,148,563 Options Exercised Number - - - - Options Exercised Number - - - - Net Change Purchase Number 1,764,706 1,764,706 1,764,706 5,294,118 Net Change Purchase Number 3,670,734 969,697 2,742,425 7,382,856 Balance 30 June 2022 Number 13,447,639 5,643,494 12,734,404 31,825,537 Balance 30 June 2021 Number 11,682,933 3,878,788 10,969,698 26,531,419 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 $26,750(2021: $26,500) which is a company controlled by Mr W Kernaghan. There was $1,125 (2021: $825) outstanding at 30 June 2022. End of Remuneration Report - 28 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Signed in accordance with a resolution of the directors C. Ringrose Director Perth, WA 21 September 2022 - 29 - AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead auditor of the audit of Cullen Resources Limited for the year ended 30 June 2022, 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 Limited and the entities it controlled during the year. Rothsay Audit & Assurance Pty Ltd Donovan Odendaal Director 21 September 2022 CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 have released the fourth edition of Corporate Governance Principles and Recommendations. 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. - 31 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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. - 32 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2022, 100 % (2021: 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 Audit & Assurance Pty Ltd. 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 - 33 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Consolidated Statement of Financial Position as at 30 June 2022 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 2022 $ 594,563 7,121 601,684 23,917 8,760 4,747,995 4,780,672 5,382,356 31,873 112,413 144,286 2021 $ 1,413,662 41,274 1,454,936 4,665 14,162 4,747,995 4,766,822 6,221,758 62,826 101,498 164,324 144,286 164,324 5,238,070 6,057,434 48,859,395 118,800 (43,740,125) 5,238,070 48,299,395 127,891 (42,369,852) 6,057,434 These financial statements should be read in conjunction with the accompanying notes. - 34 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Consolidated Statement of Changes in Equity for the year ended 30 June 2022 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 Note Issued Capital $ Share Based Payment Reserve $ Accumulated Losses $ Total Equity $ At 1 July 2021 48,299,395 127,891 (42,369,852) 6,057,434 Loss for the year Other comprehensive income Total comprehensive income/(loss) for the year - - - Issue of share capital 560,000 Share issue costs Options that have expired Share based payments 12 12 - - - - - - - - (9,091) - (1,379,364) (1,379,364) - - (1,379,364) (1,379,364) - - 9,091 - 560,000 - - - At 30 June 2022 48,859,395 118,800 (43,740,125) 5,238,070 These financial statements should be read in conjunction with the accompanying notes. - 35 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Consolidated Statement of Comprehensive Income for the year ended 30 June 2022 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 2022 $ 55,655 (36,095) (171,242) (91,356) - (1,054,147) (12,653) (69,526) Consolidated 2021 $ 69,504 (35,556) (177,381) (132,373) (118,800) (874,706) (1,769) (75,570) (1,379,364) (1,346,651) - - (1,379,364) (1,346,651) Other Comprehensive Income: - - Total comprehensive loss for the period Basic (loss) per share (cents per share) Diluted (loss) per share (cents per share) (1,379,364) (1,346,651) 22 22 (0.35) (0.44) (0.35) (0.44) These financial statements should be read in conjunction with the accompanying notes. - 36 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Consolidated Statement of Cash Flows for the year ended 30 June 2022 Note Consolidated 2022 $ 2021 $ Cash flows from operating activities Reimbursement of past exploration expenditure Cash payments in the course of operations GST refunded and ATO cash flow boost Sundry income Interest received 50,000 (476,886) 122,782 - 200 - (493,687) 125,141 17,189 269 Net operating cash outflows 21(ii) (303,904) (351,088) Cash flows from investing activities Payment for plant and equipment Sale proceeds from 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 (31,905) 5,455 (1,048,745) (1,075,195) (6,434) - (865,793) (872,227) 560,000 - 2,454,742 (88,800) 560,000 2,365,942 (819,099) 1,142,627 1,413,662 271,035 21(i) 594,563 1,413,662 These financial statements should be read in conjunction with the accompanying notes. - 37 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2021. 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 $594,563 at 30 June 2022. 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 2022, 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 - 38 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 • 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 operations in, or relating to, the area of interest are continuing. - 39 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2022, 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. Joint Operations (m) The Consolidated Entity undertakes a number of activities through joint arrangements. A joint arrangement is an arrangement over which two or more parties have joint control. Joint control is the contractually agreed sharing of control over an arrangement which - 40 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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. - 41 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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. - 42 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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. - 43 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 3. REVENUE AND EXPENSES Other Revenues Interest received Reimbursement of past exploration expenditure Sale of plant & equipment 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% (2021: 26.0%) Non-deductible expenses Non-assessable income Income tax losses recognised Total income tax (expense)/benefit Consolidated 2022 $ 2021 $ 200 50,000 5,455 - - 55,655 269 - - 52,046 17,189 69,504 8,000 18,000 36,095 35,556 31,830 28,540 - - - - - - (1,379,364) (1,346,651) (358,635) (350,129) - - - - 358,635 350,129 - - 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. - 44 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 Consolidated Deferred Tax Liabilities Statement of Financial Position Statement of Comprehensive Income 2022 $ 2021 $ 2022 $ 2021 $ Exploration (2,278) (3,682) (1,405) (2,317) Deferred Tax Assets Provisions Accruals 29,227 1,560 26,389 1,560 2,838 - 4,772 (7,813) Deferred tax assets used to offset deferred tax liabilities/(not recognised) (i) (28,509) (24,267) 1,433 (5,358) Net Deferred Tax Recognised in the Statement of Financial Position - - - - (i) As at 30 June 2022 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 2022 in respect of tax losses not brought to account is $10,601,683 (2021: $10,243,048) 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 2022 $ 2021 $ 7,121 41,274 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 2022 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 - 45 - Consolidated 2022 $ 2021 $ 122,246 31,905 (49,663) 104,488 115,812 6,434 - 122,246 CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 (117,581) (12,653) 49,663 (80,571) (115,812) (1,769) - (117,581) 23,917 4,665 4,665 31,905 - (12,653) 23,917 - 6,434 - (1,769) 4,665 14,162 1,048,745 1,062,907 23,075 865,793 888,868 (1,054,147) (874,706) 8,760 14,162 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 $1,048,745 (2021: $865,793) 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 $1,054,147 (2021: $874,706). 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. - 46 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 8. INTANGIBLE ASSETS Deferred consideration (a) and royalty stream(b) Consolidated 2022 $ 4,747,995 4,747,995 2021 $ 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 2022, 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 2022. 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 31,873 62,826 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 2022 $ 2021 $ 112,413 101,498 - 47 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 11. CONTRIBUTED EQUITY Issued capital 406,858,855 ordinary shares (2021: 373,917,657) Movement in issued shares for the year: 48,859,395 48,299,395 2022 2021 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 1.7 cents each(ii) Less share issue expenses End of financial year: 373,917,657 - - 32,941,198 - 406,858,855 48,299,395 - - 560,000 - 48,859,395 (i) Issued under a rights issue (ii) Issued under a placement (iii) Issued under a Shareholder Share Purchase Plan. Shares 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 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 2022 there are 18,000,000 (2021: 18,454,545) 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 Nil Vesting Conditions Exercise Price $0.028125 Expiry Date 30 November 2023 Fair Value at Grant Date 0.0066 The options have no rights until they are exercised and become ordinary shares. During the year 454,545 (2021: 909,090) options lapsed. During the year Nil (2021: 18,000,000) options were issued to Directors as approved by shareholders on 30 November 2020. During the year nil (2021: 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. - 48 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2022 $ 2021 $ 127,891 - (9,091) 118,800 1,480,016 118,800 (1,470,925) 127,891 (42,369,852) (1,379,364) 9,091 (43,740,125) (42,494,126) (1,346,651) 1,470,925 (42,369,852) 14. PARTICULARS IN RELATION TO CONTROLLED ENTITIES The consolidated financial statements at 30 June 2022 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 June 2022 100 100 100 30 June 2021 100 100 100 100 Investment $ June 2022 June 2021 - - - - - - - - 15. KEY MANAGEMENT PERSONNEL Compensation for key management personnel Short-term employee benefits Post-employment benefits Other long-term benefits Share-based payments Total compensation - 49 - Consolidated 2022 $ 2021 $ 295,167 26,300 10,919 - 332,386 255,250 21,217 3,638 118,800 398,905 CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 16. SHARE BASED PAYMENTS (a) Recognised share based payment expenses Director options Third party options 2022 $ 2021 $ - - - 118,800 - 118,800 Employee Options (b) For details/movements around the director options, please refer to note 11. Nil employee and director options were issued during the year. (2021: 18,000,000) Nil employee or director options lapsed during the year. (2021: 909,090) (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 2022 Years - 1.42 2022 cents - 2.8125 2022 cents - 0.066 2021 Years 0.33 2.42 2021 cents 6.6 2.8125 2021 cents - 0.066 (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: 2022 2021 Expected volatility (i) Risk free interest rate Exercise price Share price at measurement date Expected dividend yield - - - - - 74.97% 0.1% $0.028125 $0.018 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 2022: Principal Activity Other Participant (a) Paraburdoo Exploration Fortescue Mining Group Limited (Fortescue) (b) Killaloe Exploration Liontown Resources Limited (Liontown) - 50 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 (c) Mt Eureka Exploration Rox Resources Limited (Rox) (d) Finland Exploration Capella Minerals Limited (Capella) a) b) c) d) Fortescue can earn up to 80% in the iron ore rights, Cullen has a 100% interest. Liontown has an 80% interest; Cullen is 20% free carried to decision to mine. Rox can earn up to a 75% interest. Cullen 30%, Capella 70% owners of Cullen Finland Oy and its assets in Finland. 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 (2021: $nil). The Consolidated Entity’s assets employed in the jointly controlled assets, are recorded as nil. 18. COMMITMENTS Minimum exploration work 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 $673,500 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 (2021: $26,500) which is a company controlled by Mr W Kernaghan. There was $1,125 (2021: $875) outstanding at 30 June 2022. 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. - 51 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 Profit on sale of plant and equipment 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 2022 $ 594,563 2021 $ 1,413,662 (1,379,364) (1,346,651) 1,054,147 (5,455) 12,653 - 10,915 (30,953) 34,153 874,706 - 1,769 118,800 18,352 (16,866) (1,198) (303,904) (351,088) Consolidated 2022 2021 (0.35) (0.35) (0.44) (0.44) (1,379,364) (1,346,651) 390,884,630 308,746,910 18,000,000 18,454,545 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. - 52 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2022 $ 2021 $ 594,563 1,413,662 594,563 1,413,662 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 2022 $ (2,973) 2,973 2021 $ (7,068) 7,068 The selection of 0.5% sensitivity check was based on recent interest rate adjustments. The same basis was adopted in 2021. (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 - 53 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 expectations of management of the expected statement of financial assets and liabilities. (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 Audit & Assurance Pty Ltd (current 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 2022 $ 5,238,070 2021 $ 6,057,434 Consolidated 2022 $ 18,000 - 18,000 2021 $ 18,000 - 18,000 2022 $ 582,640 4,662,353 6,923 6,923 48,859,395 43,740,125 118,800 5,238,070 2021 $ 1,408,097 6,075,008 17,574 17,574 48,299,395 42,369,852 127,891 6,057,434 1,379,364 1,379,364 1,346,651 1,346,651 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 2022 was authorised for issue in accordance with a resolution of the directors on 21 September 2022. Cullen Resources Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Stock Exchange. - 54 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 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 2022 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 2022. On behalf of the Board C. Ringrose Director Perth, WA 21 September 2022 - 55 - 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 2022, 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 2022 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 8 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 2022, 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 2022, 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 report for the year ended 30 June 2021 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 2021, 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 2021 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 The Group has expensed $1,054,147 on exploration and evaluation during the year. 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. How our Audit Addressed the Key Audit Matter Our procedures in assessing exploration and evaluation expenditure included but were not limited to the following: • 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 2022, 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 2022. In our opinion the remuneration report of Cullen Resources Limited for the year ended 30 June 2022 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 Audit & Assurance Pty Ltd Donovan Odendaal Director Dated 21 September 2022 CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 SHAREHOLDER INFORMATION CAPITAL STRUCTURE As at 16 September 2022, 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 406,858,855 180,973,500 44.48% 1,024 746 181 582 373 2,906 Unmarketable Parcels as at 16 September 2022 Minimum $500.00 2,242 OPTIONS As at 16 September 2022, 18,000,000 unissued shares in respect of options were outstanding. These are as follows: Number 18,000,000 Exercise Price Expiry Date $0.028125 30 November 2023 SUBSTANTIAL SHAREHOLDERS The company has one Substantial Shareholder as at 16 September 2022 Name Perth Capital Pty Ltd& Associates % 11.20 No. of shares 45,546,648 - 61 - CULLEN RESOURCES LIMITED - ANNUAL REPORT 2022 TWENTY LARGEST SHAREHOLDERS The names of the twenty holders of the fully paid shares at 16 September 2022 are listed below: Name Perth Capital Pty Ltd Perth Capital Pty Ltd Dr Raphael Blum WJK Investments Pty Ltd Innerleithen Pty Ltd Bellarine Gold Pty Ltd Chiatta Pty Ltd W L Houghton Pty Ltd Glyde Street Nominees Pty Ltd Trebble Sum Pty Limited C Y T Investment Pty Ltd Denkey Pty Ltd Mr Christopher Robert Ringrose Mr Herbert Choy Bikini Atoll Investments Pty Ltd Mr Alexander Angelopoulos Warramboo Holdings Pty Ltd Aquila Resources Ltd Mr Zhilei Yang Vemac Ascent Investments Pty Ltd No. of Shares % Held Rank 19,764,706 16,946,833 14,039,409 12,734,404 12,552,206 12,130,674 11,764,706 9,764,706 8,835,109 8,000,000 7,750,000 7,400,000 5,643,494 5,569,735 5,544,993 5,000,000 4,725,000 4,651,973 4,215,379 3,940,173 4.86 4.17 3.45 3.13 3.09 2.98 2.89 2.40 2.17 1.97 1.90 1.82 1.39 1.37 1.36 1.23 1.16 1.14 1.04 0.97 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Total 180,973,500 44.48 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. - 62 - 

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