TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES (formerly International Cobalt Resources Ltd) A.B.N. 66 624 721 035 FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 CONTENTS Directors’ Report Auditor's Independence Declaration Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors' Declaration Independent Auditor's Report 1 3 4 5 6 7 8 20 21 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 DIRECTORS' REPORT Your directors present their report on TechGen Metals Ltd (“the Company”) and its controlled entities (“the Group”) for the financial year ended 30 June 2020. TechGen Metals Ltd is formerly known as International Cobalt Resources Ltd. The names of the directors in office at any time during, or since the end of, the year are: Shaun Cartwright Andrew Jones Ashley Hood Maja McGuire Rick (Sathiaseelan) Govender appointed: November 2018 appointed: February 2020 appointed: February 2018 re-appointed: February 2020 appointed: November 2020 appointed: December 2020 The company secretary is Rick Govender. resigned: December 2020 resigned: March 2019 Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated. Review of Operations and Principal Activities The Group incurred a loss of $343,027 for the year (2019 period: $453,925), relating mainly to tenement costs written off during the year. The principal activity of the Group during the financial year was the exploration and evaluation of mineral resources. There was no significant change in the Group’s state of affairs, other than those listed below. Events Subsequent to Balance Date The following events occurred subsequent to balance date: i. During September 2020 a capital raising of 10,623,952 shares was undertaken, resulting in net proceeds of $627,094. The purpose of the capital raising was to secure funds for the costs associated with material capital raise (as noted below). On 26 November 2020, there was a further reconfiguration to share capital with 10,000,000 promoter shares cancelled with 3,333,333 options issued in exchange, as agreed with the promoter from the previous unsuccessful IPO listing. ii. The group is currently planning a material capital raise (the “offer”) with the offer expected to be completed by 30 June 2021. The offer is planned to include the issue of shares, options and acquisition of material tenement licences. The timing and amounts of the offer details are not yet finalised and as such are not able to be disclosed. Page 1 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 DIRECTORS' REPORT Events Subsequent to Balance Date (cont’d) iii.During September raise offer will acquire minimum spending capital require 2020, the group acquired 2 exploration a further 8 tenements. tenement licences The exploration and as part of the IPO listing in the projects licences included on exploration of $226,000. No other matters may significantly Group in future financial or circumstances affect the operations periods. have arisen since the end of the financial of those operations, affected or year which significantly of the or the state of affairs of the Group, the result Likely Developments Apart from those events operations included listed of the Group and the expected as the inclusion in this report above in Events Subsequent of those operations to Balance in future Date, the likely periods financial prejudice in unreasonable developments in the have not been to the Group. of such information is likely results to result Environmental Issues The Group's Commonwealth are not regulated or of a State or Territory. operations by any significant environmental regulation under a law of the Dividends and Share Options No dividends shares options above. or interests outstanding were paid during in the Company were granted the year and no recommendation during is made as to the dividends. over issued or since the end of the financial in the Events than those stated Subsequent No options year and there were no as at the date of this report, other to Balance Date Directors' and Auditor's Indemnification No indemnities person who is or has been an officer or auditor have been given or insurance premiums of the Company. paid, during or since the end of the financial year, for any Auditor's Independence Declaration A copy of the auditor's set out on page 3. independence declaration as required under section 307C of the Corporations Act 2001 is S � ith a resolution of the Board of Directors, Director 2021 Dated this 3rd day of February Page 2 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF TECHGEN METALS LTD I declare that, to the best of my knowledge and belief, during the year ended 30 June 2020, there have been no contraventions of: (a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) any applicable code of professional conduct in relation to the audit. This declaration is in respect of TechGen Metals Ltd and the entities it controlled during the year. PKF BRISBANE AUDIT TIM FOLLETT PARTNER BRISBANE 3 FEBRUARY 2021 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 2020 $ 28 February 2018 to 30 June 2019 $ Note Revenue Other income Expenses Administration costs Tenement costs written off Profit / (loss) before income tax, attributable to members Tax expense Profit / (loss) for the year, attributable to members Other comprehensive income 2 6 3 - - (6,371) (336,656) (343,027) - (343,027) - (453,925) - (453,925) - (453,925) - Total other comprehensive income for the year, net of tax, attributable to members (343,027) (453,925) The accompanying notes form part of these financial statements. Page 4 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 Note 2020 $ 2019 $ ASSETS CURRENT ASSETS Cash and cash equivalents Other receivables TOTAL CURRENT ASSETS NON CURRENT ASSETS Exploration and evaluation assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS / (LIABILITIES) EQUITY Issued capital Accumulated losses TOTAL EQUITY 4 5 6 8 9 209 1,446 1,655 - - 1,655 123,142 123,142 - 123,142 (121,487) 675,465 (796,952) (121,487) 7,062 964 8,026 336,656 336,656 344,682 123,142 123,142 - 123,142 221,540 675,465 (453,925) 221,540 The accompanying notes form part of these financial statements. Page 5 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Note Issued Capital Total Retained earnings / (Accumulated losses) $ $ $ Balance on incorporation 28 February 2018 Profit or / (loss) for the period Other comprehensive income for the period Total comprehensive income - - - - - - (453,925) (453,925) - - (453,925) (453,925) Transactions with owners, in their capacity as owners: Shares issued Balance at 30 June 2019 Balance at 1 July 2019 Profit or / (loss) for the year Other comprehensive income for the year Total comprehensive income Transactions with owners, in their capacity as owners 675,465 - 675,465 (453,925) 675,465 221,540 675,465 (453,925) 221,540 - - - - (343,027) (343,027) - - (343,027) (343,027) - - Balance at 30 June 2020 675,465 (796,952) (121,487) The accompanying notes form part of these financial statements. Page 6 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Net cash provided by / (used in) operating activities 11 CASH FLOWS FROM INVESTING ACTIVITIES Payments for exploration and evaluation Payments for acquisition of tenements Net cash provided by / (used in) financing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share (net of costs) Net cash provided by / (used in) financing activities Net increase / (decrease) in cash held Cash at beginning of financial year Cash at end of financial year 4 2020 $ 28 February 2018 to 30 June 2019 $ - (6,853) (6,853) - - - - - (6,853) 7,062 209 - (334,960) (334,960) (14,540) (168,438) (182,978) 525,000 525,000 7,062 - 7,062 The accompanying notes form part of these financial statements. Page 7 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1 Statement of Significant Accounting Policies The financial statements cover TechGen Metals Ltd (“the Company”) and its controlled entities (“the Group”). TechGen Metals Ltd is a company limited by shares, incorporated and domiciled in Australia and is a for profit entity for the purpose of preparing the financial statements. TechGen Metals Ltd is formerly known as International Cobalt Resources Ltd. Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions to which they apply. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Except for the consolidated statement of cash flows, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. These financial statements reflect results for the 12 month period ended 30 June 2020 while the comparative is for the period 28 February 2018 to 30 June 2019. As such, the amounts presented in the financial statements are not entirely comparable. The financial statements were authorised for issue on 3 February 2021 by the directors of the company. Accounting Policies Going Concern Notwithstanding the Group reporting an operating loss after tax of $343,027 (2019: $453,925) for the year ended 30 June 2020, a net current asset deficiency of $121,487 (2019: $115,116) and a net asset deficiency of $121,487 as at 30 June 2020, the financial statements have been prepared on a going concern basis as the Company’s directors are of the opinion that there are reasonable grounds to believe that the Group will be able to pay its debts as and when they fall due and payable. The Group’s ability to continue as a going concern is dependent on the planned capital raising offer being successful (refer Events Subsequent to Balance Date note). The Directors believe that the current cash resources of the Group will not be sufficient to fund the planned execution of the Group’s principal activities and working capital requirements. Following completion of the offer, and under the minimum subscription raised, the Group expects to have a sufficient cash at bank to fund the planned execution of forecasted principal activities and working capital requirements. The Directors have determined that these funds will be sufficient to allow for the exploration and evaluation activities in accordance with its current plans and to provide the necessary working capital to meet its commitments for a period of at least 12 months from the offer. The Group may also look to complete future equity offerings in order to raise additional capital as the business progresses. Page 8 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1 Statement of Significant Accounting Policies (cont’d) Going Concern (cont’d) In the event that the Group is unable to raise sufficient capital as contemplated by the offer, there is a material uncertainty as to whether the Group will be able to continue as a going concern, and therefore, whether it will be able to realise its assets and discharge its liabilities in the normal course of business at the amounts as stated in the Consolidated Statement of Financial Position. The Consolidated Statement of Financial Position does not include adjustments relating to the recoverability and classification of recorded asset amounts, or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of TechGen Metals Ltd and all of the subsidiaries. TechGen Metals Ltd and its subsidiaries together are referred to in this financial report as the Group. The Group controls an entity when the Group is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. A list of controlled entities is contained in Note 13 to the financial statements. All inter- company balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the Group. Financial Instruments Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either purchase or sell the asset (i.e. trade date accounting adopted). Financial instruments are initially measured at fair value plus transactions costs except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately. Classification and Subsequent Measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, prices quoted in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss. Page 9 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1 Statement of Significant Accounting Policies (cont’d) Impairment of Assets At the end of each reporting period, the company assesses whether there is any indication that an asset may be impaired. The assessment will include considering external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss unless the asset is carried at a revalued amount in accordance with another Standard. Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that Standard. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. Trade and Other Payables Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of liability. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). Income Tax The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax assets and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Page 10 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1 Statement of Significant Accounting Policies (cont’d) Exploration and Evaluation Expenditure Exploration, evaluation and development expenditure incurred is accumulated in respect of each separately identifiable area of interest. These costs are only carried forward where the right of tenure for the area of interest is current and to the extent that they are expected to be recouped through the successful development and commercial exploitation of the area, or alternatively sale of the area, or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Exploration and evaluation expenditure assets acquired in a business combination are recognised at their fair value at the acquisition date. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, the exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining development. Accumulated costs in relation to an abandoned area are written off in full against the result in the year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Critical Accounting Estimates and Judgments The directors evaluate estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company. Exploration and evaluation expenditure The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in determining whether it is likely that future economic benefits are likely, which may be based on assumptions about future events or circumstances. Estimates and assumptions may change if new information becomes available. If after expenditure is capitalised information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is written off in the Consolidated Statement of Profit or Loss in the period when the new information becomes available. Page 11 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 1 Statement of Significant Accounting Policies (cont’d) New and Amended Standards Adopted in the Current Year AASB 16: Leases AASB 16: Leases (issued February 2016) will supersede the existing lease accounting requirements in AASB 117: Leases and the related Interpretations. It introduces a single lessee accounting model by eliminating the current requirement to distinguish leases as either operating leases or finance leases depending on the transfer of risks and rewards of ownership. The key requirements of AASB 16 are summarised as follows: • • • • • • recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); depreciation of right-of-use assets in line with AASB 116: Property Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability using the index or rate at the commencement date; application of a practical expedient to permit a lessee to elect not to separate non-lease components, instead accounting for all components as a lease; inclusion of additional disclosure requirements; and; accounting for lessors will not significantly change. The application of this standard has not had a material impact on the financial statements. Page 12 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 2 Administration Costs Consultancy fees Directors fees Accounting fees Legal fees Others 3 Income Tax Expense Prima facie tax payable on profit before income tax at 27.5% (2019: 27.5%): Add: Tax effect of: Tax losses not recognised as a deferred tax asset 4 Cash and Cash Equivalents Cash at bank 5 Other Receivables Other receivables 6 Exploration and Evaluation Assets Non-Current Exploration and evaluation 2020 $ 2019 $ - - - 6,371 - 6,371 183,475 70,000 36,051 137,854 26,545 453,925 (94,332) (124,829) 94,332 - 124,829 - 209 209 1,446 1,446 7,062 7,062 964 964 - 336,656 These costs represent the purchase (by way of cash and shares issued) of mineral titles in Ontario, Canada. At 30 June 2020 the Group did not meet the minimum exploration spend on existing mineral rights held in Canada, and therefore have written off these exploration assets recorded in the amount of $336,656. 7 Tax Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1 occur: Tax losses: operating losses 219,161 124,829 Page 13 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 8 Trade and Other Payables Trade payables Related party payables 9 Issued Capital Fully paid ordinary shares 2020 $ 2019 $ 89,634 33,508 123,142 89,634 33,508 123,142 675,465 675,465 675,465 675,465 Ordinary shareholders participate in dividends in proportion to the number of shares held. At shareholder's meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. Capital Management There are no externally imposed capital requirements. Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its capital structure in response to changes in these risks and in the market. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. 2020 No. 2020 $ 2019 No. 2019 $ Movements in issued capital Fully paid ordinary shares: At the beginning of the reporting period Shares issued during the year At the end of the reporting period 15,750,000 - 15,750,000 675,465 - 675,465 - 15,750,000 15,750,000 - 675,465 675,465 Page 14 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 2020 $ 2019 $ 10 Key Management Personnel and Related Party Transactions Shareholdings – Ordinary shares The number of shares held by each director, including their personally related parties, in the company are set out below: SAR Capital atf SAR Family Trust Benjamin Cooper atf Cooper Family Trust Ashley Hood atf Hood Family Trust 2,500,000 1,625,000 500,000 2,500,000 1,625,000 500,000 Transactions with related parties: At balance date an amount of $25,000 is owed to former Director Benjamin Cooper and an amount of $8,508 to current Director Shaun Cartwright. There were no other related party transactions in the year. Key Management Personnel: Key management personnel consist of the Directors. $Nil remuneration was paid to key management personnel during the current year (2019: short term benefits $70,000 relating to director fees during the period). 11 Cash Flow Information Reconciliation of cash flow from operations with profit / (loss) after income tax Profit / (Loss) after income tax Non-cash and non-operating items in profit: Tenement costs written off Changes in operating assets and liabilities: (Increase) / Decrease in other receivables Increase / (Decrease) in trade and other payables Net cash inflow/(outflow) from operating activities (343,027) (453,925) 336,656 (482) - (6,853) - (964) 119,929 (334,960) Page 15 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 2020 $ 2019 $ 12 Financial Risk Management The Group's financial instruments consist mainly of accounts with banks, other receivables and payables. The totals for each category of financial instruments, measured in accordance with accounting policies in Note 1 to these financial statements are as follows: Financial Assets Cash and cash equivalents Other receivables Total Financial Assets Financial Liabilities Trade payables Related party payables Total Financial Liabilities Financial Risk Management Policies 209 1,446 1,655 89,634 33,508 123,142 7,062 964 8,026 89,634 33,508 123,142 The directors' overall risk management strategy seeks to assist the company in meeting its financial targets, whilst minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board of Directors on a regular basis. These included the credit risk policies and future cash flow requirements. Specific Financial Risk Exposures and Management The main risk the Group is exposed to through its financial instruments is liquidity risk. There have been no substantive changes in the types of risks the Group is exposed to, how these risks arise, or the objectives, policies and process for managing these risks from the prior period. Liquidity Risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through preparing forward-looking cash flow analyses in relation to its operational, investing and financing activities and obtaining funding from a variety of sources. An undiscounted contractual maturity analysis for financial liabilities is noted below. The timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates. Page 16 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 12 Financial Risk Management (cont’d) Trade and sundry payables are expected to be paid as follows: Less than 6 months Net Fair Values 2020 $ 123,142 123,142 2019 $ 123,142 123,142 The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow analysis and other valuation techniques commonly used by market participants. Financial Assets Cash and cash equivalents Other receivables Total Financial Assets Financial Liabilities Trade payables Related party payables Total Financial Liabilities 2020 2019 Carrying Amount $ Net Fair Value $ Carrying Amount $ Net Fair Value $ 209 1,446 1,655 209 1,446 1,655 7,062 964 8,026 7,062 964 8,026 89,634 33,508 123,142 89,634 33,508 123,142 89,634 33,508 123,142 89,634 33,508 123,142 Page 17 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 13 Controlled Entities Name of Entity Parent entity TechGen Metals Ltd Controlled entities ICRL Ontario Limited ICRL Operations Pty Ltd Country of incorporation Class of shares 2020 % 2019 % Ownership Australia Canada Canada Ordinary Ordinary 100 100 100 100 14 Events Subsequent to Balance Date The following events occurred subsequent to balance date: i. During September 2020 a capital raising of 10,623,952 shares was undertaken, resulting in net proceeds of $627,094. The purpose of the capital raising was to secure funds for the costs associated with material capital raise (as noted below). On 26 November 2020, there was a further reconfiguration to share capital with 10,000,000 promoter shares cancelled with 3,333,333 options issued in exchange, as agreed with the promoter from the previous unsuccessful IPO listing. ii. The group is currently planning a material capital raise (the “offer”) with the offer expected to be completed by 30 June 2021. The offer is planned to include the issue of shares, options and acquisition of material tenement licences. The timing and amounts of the offer details are not yet finalised and as such are not able to be disclosed. iii. During September 2020, the group acquired 2 exploration tenement licences and as part of the IPO listing capital raise offer will acquire a further 8 tenements. The exploration licences included in the projects require minimum spending on exploration of $226,000. No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in future financial periods. 15 Company Details The registered office of the Company is: TechGen Metals Ltd 8 Washington Place Stretton Qld 4116 The principal place of business is same as above. Page 18 TECHGEN METALS LTD AND ITS CONTROLLED ENTITIES A.B.N. 66 624 721 035 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020 16 Auditor Remuneration The auditor of the Group is PKF Brisbane Audit. Amounts received or due for audit of the financial report of the Group 17 Parent Entity Financial Information 2020 $ 4,000 4,000 2019 $ 4,000 4,000 No separate financial information for the parent entity has been disclosed, as no financial information exists for the subsidiaries of the parent entity. The financial information disclosed in the consolidated statements and related notes reflect those of the parent entity. 18 Commitments and Contingencies As detailed in Note 6, the group held various mineral titles in Ontario, Canada of which had minimum spend requirements attached to the licences held. At 30 June 2020 the Group did not meet the minimum exploration spend on existing mineral rights held in Canada, and therefore have written off these exploration assets recorded in the amount of $336,656. During September 2020, the group has acquired 2 exploration tenement licences and as part of the IPO listing capital raise offer will acquire a further 8 tenements. The exploration licences included in the projects require minimum spending on exploration of $226,000. The group does not have any other commitments, including leases or contingencies. Page 19 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TECHGEN METALS LTD Report on the Financial Report Opinion We have audited the accompanying financial report, of TechGen Metals Ltd (the Company), which comprises the consolidated statement of financial position as at 30 June 2020, 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, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the company and the consolidated entity compromising the company and the entities it controlled at the year end or from time to time during the financial year. In our opinion the financial report of TechGen Metals Ltd is in accordance with the Corporations Act 2001, including: a) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the year ended on that date; and b) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibility for the Audit of the Financial Report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report, which indicates that the consolidated entity incurred a net loss of $343,027 during the year ended 30 June 2020 and, as of that date, the consolidated entity had a negative current asset position of $121,487 and a net asset deficiency of $121,487. As stated in Note 1, these events or conditions, along with other matters set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter. Independence We are independent of the consolidated entity in accordance with 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. Directors’ Responsibilities for the Financial Report The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using a going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our responsibility is to express an opinion on the financial report based on our audit. 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, individual or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the consolidated entity’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the consolidated entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among 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, action taken to eliminate threats or safeguards applied. PKF BRISBANE AUDIT TIM FOLLETT PARTNER BRISBANE 3 February 2021