DIABLO RESOURCES LIMITED — Annual Report 2021

Oct 7, 2021

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY

ACN: 639 114 962

Financial Report For The Period Ended 30 June 2021

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY

ACN: 639 114 962

CONTENTS	Page
Directors' Report	2
Auditor's Independence Declaration	4
Statement of Comprehensive Income	5
Statement of Financial Position	6
Statement of Changes in Equity	7
Statement of Cash Flows	8
Notes to the Financial Statements	9
Directors' Declaration	15
Independent Auditor’s Report	16

1

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY

Your directors present their report on HWK Utah Pty Ltd (the “Company”) and its controlled entity (the “Group”) for the period ended 30 June 2021.

Directors

The names, qualifications and experience of the directors in office at any time during, or since the end of, the period are as follows. Directors have been in office since the start of the period (14 February 2020) to the date of this report unless otherwise stated.

Mr Paul Lloyd – Managing Director (appointed 14 February 2020)

Paul Lloyd is a Chartered Accountant with over 30 years’ commercial experience. Mr Lloyd operates his own corporate consulting business, specialising in the area of corporate, financial and management advisory services. After commencing his career with an international accounting firm, he was employed for approximately 10 years as the General Manager of Finance for a Western Australian based international drilling contractor working extensively in Asia and Africa. Paul has been responsible for a number of IPOs, RTOs, project acquisitions and capital raisings for ASX listed public companies.

Company Secretary

Ms Oonagh Malone –Company Secretary (appointed 14 February 2020)

Ms Malone is a principal of a corporate advisory firm which provides company secretarial and administrative services. She has over 10 years’ experience in administrative and company secretarial roles for listed companies and is a member of the Governance Institute of Australia. She currently acts as company secretary for ASX-listed African Gold Ltd, Caprice Resources Limited, Carbine Resources Limited, European Cobalt Limited, RareX Limited and New Century Resources Limited.

Directors Meetings

The were no directors meetings held during the period ended 30 June 2021.

Principal Activities

The principal activity of the Group during the year was the exploration on the Western Desert Project in Utah, USA. No significant change in the nature of these activities occurred during the period.

Review of Operations

The loss of the Group for the financial period after providing for income tax amounted to $544,754.

Significant Changes in the State of Affairs

On 14 February 2020, the Company acquired Roughead Resources Inc.

On Q1 2020, the Company staked claims for the Western Desert Project in Utah, USA.

Other than stated above, no significant changes in the Company’s state of affairs occurred during the financial period.

Events Subsequent to the End of the Reporting Period

On 23 June 2021, the Company’s parent, Hawkstone Mining Limited entered into a Share Sale Agreement with Diablo Resources Limited (“Diablo”) to sell the Company to Diablo. Diablo is a wholly owned subsidiary of Hawkstone and the combined Diablo group will be distributed in-specie to Hawkstone shareholders post-balance date.

On 2 September 2021, the Company’s parent, Hawkstone Mining Limited approved the disposal of the Company to Diablo.

No other matters or circumstances have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

Likely Developments and Expected Results of Operations

Likely developments in the operations of the Group and the expected results of those operations in future financial periods have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Group.

2

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY

Environmental Regulation

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

Dividends

No dividends were paid or declared since the start of the financial period.

Options

No options over issued shares were granted during the period

Proceedings on Behalf of Company

No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.

The company was not a party to any such proceedings during the period.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 4.

Signed in accordance with a resolution of the Directors.

On behalf of the Directors

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Paul Lloyd Director

20 September 2021

3

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of HWK Utah Pty Ltd for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, 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.

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Perth, Western Australia 20 September 2021

M R Ohm Partner

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HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2021

Note Corporate Exploration expenditure Loss before tax Income tax expense 3 Loss for the period Other comprehensive income Total comprehensive loss for the period attributable to the members	Consolidated 2021 $ (14/02/2020 – 30/06/2021) 2,170 542,584
	544,754 -
	544,754
	9,874
	554,628

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

5

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

Note ASSETS CURRENT ASSETS Cash and cash equivalents 4 TOTAL CURRENT ASSETS TOTAL ASSETS LIABILITIES NON-CURRENT LIABILITIES Loan 5 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS/(LIABILITIES) EQUITY Issued capital 7 Reserves 8 Accumulated losses TOTAL EQUITY/(DEFICIT)	Consolidated 2021 $ 14
	14
	14
	554,641
	554,641
	554,641
	(554,627)
	1 (9,874) (544,754)
	(554,627)

The above statement of financial position should be read in conjunction with the accompanying notes.

6

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2021

Consolidated Group Balance at 14 February 2020 Loss for the period Other comprehensive income Total comprehensive loss for the period Balance at 30 June 2021	Issued Capital Reserves $ $ 1 - - - - (9,874)	Accumulated Losses Total $ $ - 1 (544,754) (544,754) - (9,874)
	(9,874)	(544,754) (554,628)
	1 (9,874)	(544,754) (554,627)

The above statement of change in equity should be read in conjunction with the accompanying notes .

7

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 JUNE 2021

Note CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from borrowings Net cash provided by financing activities Net increase in cash held Cash and cash equivalents at incorporation Cash and cash equivalents at 30 June 2021 4	Consolidated 2021 $ (14/02/2020– 30/06/2021) 1 13
	14
	14 1
	14

The above statement of cash flows should be read in conjunction with the accompanying notes.

8

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

1. CORPORATE INFORMATION

HWK Utah Pty Ltd is a proprietary limited company incorporated on 14 February 2020 and domiciled in Australia.

The Company is principally engaged in the business of mineral exploration in USA. The registered office and principal place of business of the Company is, 10 Outram Street, West Perth, WA 6005.

The financial statements of the Group for the period from 14 February 2020 to 30 June 2021 were authorised for issue in accordance with a resolution of the directors on 20 September 2021.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board.

The financial report has been prepared on an accrual basis of accounting including the historical cost convention and the going concern assumption. The parent company, Hawkstone Mining Limited has undertaken to provide financial support as required to enable the Company to continue as a going concern.

Both the functional and presentation currency of the Group is Australian dollars.

(b) Statement of compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements and notes comply with International Financial Reporting Standards (IFRS).

(c) New accounting standards and interpretations

The Group has adopted all new accounting standards and interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for annual reporting periods beginning 1 July 2020. The adoption of these new and revised standards and interpretations did not have any effect on the financial position or performance of the Group.

Accounting standards and interpretations issued but not yet effective

Certain Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the Group for the reporting period ended 30 June 2021. The Directors have not early adopted any of these new or amended standards or interpretations. The Directors have not yet fully assessed the impact of these new or amended standards (to the extent relevant to the Group) and interpretations.

(d) Basis of consolidation

The consolidated financial statements comprise the financial statements of HWK Utah Pty Ltd and entities (including special purpose entities) controlled by HWK Utah Pty Ltd (its subsidiaries).

Control is achieved when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All inter-company balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which control is transferred out of the Group. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

9

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary.

(e) Revenue recognition

Interest

Revenue is recognised as interest accrues using effective interest 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 assets.

(f) Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position 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 insignificant risk of changes in value.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

(g) Income tax

Current tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Deferred income tax is provided on all temporary differences at the reporting 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 when 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 that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

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 when 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.

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.

Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period 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 reporting date.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(h) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• when 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, which 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 Statement of Financial Position.

10

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

Cash flows are included in the 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.

(i) Exploration and evaluation expenditure

Exploration and evaluation expenditure in relation to all areas of interest, including acquisition costs, are expensed as incurred.

(j) Trade and other payables

Trade and other payables are carried at amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

The amounts are unsecured and are usually paid within 30 days of recognition.

(k) Loans and borrowings

All loans are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in the Statement of Comprehensive Income when the liabilities are derecognized.

(l) Contributed equity

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(m) Critical accounting judgements and estimates

The preparation of financial statements requires the use of certain critical accounting judgements and estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. There are no areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements.

3. INCOME TAX EXPENSE

The prima facie tax on loss before income tax is reconciled to the income tax as follows:

Loss before income tax Income tax calculated at 26% Future income tax benefit not brought to account Income tax expense	2021 $ 544,754 141,636 (141,636)
	-

4. CASH AND CASH EQUIVALENTS

	2021
	$
Cash at bank and on hand		14

11

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

(a) Reconciliation of loss after income tax to net cash from operating activities

Loss for the period Movement in assets and liabilities: Increase/(Decrease) in trade and other payables Net cash used in operating activities	2021 $ 544,754 (544,754)
	-

(b) Non-cash investing and financing activities

There were no non-cash investing and financing activities during the period ended 30 June 2021.

5. LOANS

Non-current Loan from Hawkstone Mining Limited	2021 $ 554,641

The loan from the Company’s parent is non-interest bearing and repayable on demand.

6. INVESTMENT IN SUBSIDIARY

Interests are held in the following subsidiary company:

1Acquired 14 February 2020 SUED CAPITAL Issued Capital Movement in ordinary share capital of the Company: SERVES Foreign currency translation reserve Name Principal Activity Country of Incorporation Ownership Interest Roughead Resources Inc.1 Mineral Exploration USA 100% 2021 $ 1 fully paid ordinary shares 1 Date Details No. of Shares Issue Price $ 14/02/2020 Opening balance 1 $1.00 1 30/06/2021 Closing balance 1 1 2021 $ Foreign currency translation reserve 9,874	1Acquired 14 February 2020 SUED CAPITAL Issued Capital Movement in ordinary share capital of the Company: SERVES Foreign currency translation reserve Name Principal Activity Country of Incorporation Ownership Interest Roughead Resources Inc.1 Mineral Exploration USA 100% 2021 $ 1 fully paid ordinary shares 1 Date Details No. of Shares Issue Price $ 14/02/2020 Opening balance 1 $1.00 1 30/06/2021 Closing balance 1 1 2021 $ Foreign currency translation reserve 9,874	1Acquired 14 February 2020 SUED CAPITAL Issued Capital Movement in ordinary share capital of the Company: SERVES Foreign currency translation reserve Name Principal Activity Country of Incorporation Ownership Interest Roughead Resources Inc.1 Mineral Exploration USA 100% 2021 $ 1 fully paid ordinary shares 1 Date Details No. of Shares Issue Price $ 14/02/2020 Opening balance 1 $1.00 1 30/06/2021 Closing balance 1 1 2021 $ Foreign currency translation reserve 9,874
		1
		2021 $ 9,874

7. ISSUED CAPITAL

(a) Issued Capital

(b) Movement in ordinary share capital of the Company:

8. RESERVES

(a) Foreign currency translation reserve

(b) Nature and purpose of reserves

Foreign currency translation reserve

The foreign currency translation reserve records exchange differences arising on translation of foreign subsidiary accounts.

12

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

9. CONTINGENT LIABILITIES, LEASE COMMITTMENTS AND CONTINGENT ASSETS

As at 30 June 2021 there were no contingent liabilities, lease commitments or contingent assets.

10. RELATED PARTY TRANSACTIONS

The Group’s main related parties are as follows:

a. Subsidiaries

Interests in subsidiaries are set out in note 6.

b. Transactions with related parties:

During the current period a loan was provided by the Company’s parent, Hawkstone Mining Limited. Disclosures relating to loan are set out in note 5.

11. FINANCIAL RISK MANAGEMENT

The Group’s financial instruments consistent mainly of deposits with banks, short-term investments, and accounts receivable and payables.

The carrying amount for each category of financial instruments, which approximates their fair values, is as follows:

Note Financial assets Cash and cash equivalents 5 Total financial assets Financial liabilities Loan 7 Total financial liabilities	2021 $ 14
	14
	554,641
	554,641

12. AUDITOR’S REMUNERATION

The auditor of HWK Utah Pty Ltd is HLB Mann Judd.

Amounts paid or payable to HLB Mann Judd for: Audit services	2021 $ 2,000
	2,000

17. LOSS PER SHARE

Basic and diluted loss per share (cents) Loss used in calculating basic and diluted loss per share Weighted average number of ordinary shares used in calculating basic and diluted loss per share	2021 $ 554,754 554,754
	1

13

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2021

18. EVENTS AFTER THE REPORTING PERIOD

On 23 June 2021, the Company’s parent, Hawkstone Mining Limited entered into a Share Sale Agreement with Diablo Resources Limited (“Diablo”) to sell the Company to Diablo. Diablo is a wholly owned subsidiary of Hawkstone and the combined Diablo group will be distributed in-specie to Hawkstone shareholders post-balance date.

On 2 September 2021, the Company’s parent, Hawkstone Mining Limited approved the disposal of the Company to Diablo.

There have been no other events subsequent to the financial period end that will affect the results as disclosed in this report.

14

HWK UTAH PTY LTD AND ITS CONTROLLED ENTITY

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of HWK Utah Pty Ltd, the directors of the Company declare that:

In the opinion of the directors:

• (a) the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the period ended on that date; and

• (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;

• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

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Paul Lloyd Director

20 September 2021

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INDEPENDENT AUDITOR’S REPORT

To the members of HWK Utah Pty Ltd

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of HWK Utah Pty Ltd (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year then ended; 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 Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information other than the financial report and auditor’s report thereon

The directors are responsible for the other information. The other information comprises the information included in the Group’s Financial Report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation

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of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities 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.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement 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 Group’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 Group’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 Group 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, related safeguards.

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HLB Mann Judd M R Ohm Chartered Accountants Partner Perth, Western Australia 20 September 2021