ENERGY METALS LIMITED AND ITS CONTROLLED ENTITY

A.B.N. 63 111 306 533

FULL YEAR STATUTORY ACCOUNTS 2015

CORPORATE DETAILS

Directors

He, Zuyuan (Non-executive Chairman) Xing, Jianhua (Non-executive Director, alternate director of He, Zuyuan) Xiang, Weidong (Managing Director) Lindsay George Dudfield (Non-executive Director) Geoffrey Michael Jones (Non-executive Director) Zhong, Yu (Non-executive Director) Zhang, Zimin (Non-executive Director)

Company Secretary Li, Xuekun

Registered Office

Level 2 8 Colin Street WEST PERTH WA 6005 Telephone: +61 8 9322 6904 Facsimile: +61 8 9321 5240 Email: [email protected] Web: www.energymetals.net

Auditor

Deloitte Touche Tohmatsu Brookfield Place Tower 2 123 St Georges Terrace Perth WA 6000 Australia

Share Registry

Security Transfer Registrars Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Telephone: +61 8 9315 2333 Facsimile: +61 8 9315 2233

Stock Exchange Listing

The Company's shares are listed by the Australian Securities Exchange Limited (“ASX”) - Code EME . The home exchange is Perth.

Bankers

National Australia Bank Limited 100 St Georges Terrace PERTH WA 6000

Solicitors

Minter Ellison Allendale Square 77 St Georges Terrace PERTH WA 6000

CONTENTS	PAGE
Directors’ Report	3
Remuneration Report	7
Consolidated Financial Statements	13
Directors' Declaration	38
Auditor’s Independence Declaration	39
Auditor's Report	40

DIRECTORS’ REPORT

DIRECTORS’ REPORT

The Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Energy Metals Limited and the entity it controlled at the end or during the year ended 31 December 2015.

DIRECTORS

The following persons were directors of Energy Metals Limited during the whole of the financial year (or as disclosed) and up to the date of this report:

PRINCIPAL ACTIVITIES

During the year the principal continuing activity of the Group was uranium exploration.

DIVIDENDS

No dividends have been paid or declared and no dividends have been recommended by the Directors.

REVIEW OF OPERATIONS

Exploration

Northern Territory

The Company continued various exploration targeting work on its tenements in the Ngalia Basin, with four key target areas identified. A work program of reprocessing and compilation of historical data was performed on uranium deposits and prospects located in the Ngalia Basin.

Walbiri Deposit – Located 50km east of Bigrlyi, Walbiri was discovered in 1972 by Central Pacific Minerals (CPM) Ltd and explored until 1976. A review of historical exploration data allowed a maiden JORC resource of 7,037t U3O8 at 641ppm (200ppm cut-off grade) to be estimated (refer October 2015 ASX release).

Walbiri Satellite Deposits – The Sundberg and Hill One deposits are located immediately west and east of Walbiri, respectively. A review of historical exploration data allowed estimation of maiden JORC resources of 260t U3O8 at 259ppm for Sundberg and 159t U3O8 at 321ppm for Hill One, both at 200ppm cut-off grade (refer October 2015 ASX release).

Bigrlyi Joint Venture

On 1 July 2015, after reprocessing and compiling the historical data, the Company announced a maiden JORC (2012) mineral resource estimate of 691 tonnes eU3O8 (200 ppm cut-off) for the historical Karins uranium deposit.

A trial lead isotope study was commissioned to detect shallowly buried uranium with soil radiogenic lead on the Bigrlyi Project. The Company completed site rehabilitation works at Anomaly-15 and received a significant environmental bond refund.

Western Australia

The Company successfully completed a passive seismic survey to detect the base of the Manyingee palaeochannel.

Uranium Trading

During the year, the Company did not conduct any uranium trading activities.

Full details of the Company’s operations during the year are included within the Review of Activities section of the Annual Report.

DIRECTORS’ REPORT

OPERATING RESULTS FOR THE YEAR

The consolidated loss of the Group for the year ended 31 December 2015 was $1,025,258 (31 December 2014: loss of $552,074).

REVIEW OF FINANCIAL CONDITIONS

The net assets of the Group were $54,576,147 at 31 December 2015 (2014: $55,601,405).

Use of cash and assets by the Company for the year ended 31 December 2015 was consistent with the Company’s business objectives since listing on the Australian Securities Exchange on 9 September 2005.

CHANGES IN STATE OF AFFAIRS

There was no significant change in the state of affairs of the consolidated entity during the financial year.

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

There has been no matter or circumstance which has arisen since 31 December 2015 that has significantly affected, or may significantly affect:

(a) the Group’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the Group’s state of affairs in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

While the Company reduced its spending on the BJV project and some tenements, exploration activities continued to be carried out in the Ngalia region and tenements in Western Australia. The Company will increase its exploration expenditure on the tenements when considered to be appropriate.

The Directors are not aware of any developments that might have a significant effect on the operations of the Group in subsequent financial years that are not already disclosed in this report.

ENVIRONMENTAL REGULATION

The Company is subject to significant environmental regulation in respect of its exploration activities. Tenements in the Northern Territory and Western Australia are granted subject to adherence to environmental conditions with strict controls on clearing, including a prohibition on the use of mechanized equipment or development without the approval of the relevant government agencies and with rehabilitation required on completion of exploration activities.

Energy Metals Limited conducts its exploration activities in an environmentally sensitive manner and the Company is not aware of any breach of statutory environmental conditions or obligations.

The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. For the measurement year 1 January 2015 to 31 December 2015 the Directors have assessed that there is no current reporting required, but there may be a requirement in the future.

DIRECTORS’ REPORT

INFORMATION ON DIRECTORS

Name	Director’s Experience	Special
		Responsibilities
Mr He, Zuyuan	Mr He holds a Bachelor degree in Geology and an MBA from Tsinghua	Non-Executive
	University in China and has over 25 years’ experience in uranium exploration	Chairman
	and financial management. Mr He was previously the Chief Financial Officer
	and Vice President of Nanjing Zhong Da Group for a period of 3 years.
	He is currently a director of the following affiliate Companies: Beijing Sino-
	Kaz Uranium Investment Company Limited and Semizbay-U LLP. Mr He
	was an Executive Director of Extract Resources Ltd (currently known as
	Extract Resources PtyLimited)from March 2012 to January2013.
Dr Xiang, Weidong	Dr Xiang is a qualified geologist and has 20 years’ experience in geology and	Managing
	uranium exploration. Dr Xiang holds a Doctor degree of Exploration and	Director
	Prospecting for Mineral Resources. He worked for CNNC Beijing Research
	Institution of Uranium Geology for approximately twelve years before he
	joined CGNPC-Uranium Resources Co. Ltd, a subsidiary of China General
	Nuclear Power Corporation (formerly known as China Guangdong Nuclear
	Power Holding Co. Ltd.), as a senior executive. Dr Xiang is a member of
	Nuclear Geology and Mineral Committee, China Mining Association. Dr
	Xiang is a member of the AusIMM. Dr Xiang does not currently hold
	directorships of other Australianpublic companies.
Mr Lindsay Dudfield	Mr Dudfield is a qualified geologist with over 30 years’ experience exploring	Non-executive
BSc	for gold and base metals in Australia and overseas, including close	Director
	involvement with a number of greenfields discoveries. Member of the
	AusIMM, SEG, AIG and GSA. He is currently the Managing Director of
	Jindalee Resources Ltd.
	Other public company directorships held by Mr Dudfield over the last three
	years are: Jindalee Resources Limited – current; Alchemy Resources
	Limited, from November 2011 to current, Extract Resources Ltd (currently
	known as Extract Resources PtyLtd),from March 2012 to June 2012.
Mr Geoff Jones	Mr Jones is a Fellow of the Institution of Engineers, Australia, with a	Non-Executive
BEng FIEAust CPEng	Bachelor of Engineering (Civil) degree. He has over 25 years’ experience	Director
	covering the areas of construction, engineering, mineral processing and
	project development. Mr Jones has been responsible for the preparation of
	feasibility studies for gold and base metals projects and has completed
	numerous project evaluations and due diligence reviews and has managed the
	successful development of projects both domestically and overseas.
	Mr Jones has operated his own project management and engineering
	consultancy, JMG Projects Pty Ltd, servicing the mining industry. In this
	capacity Mr Jones has completed works on gold and base metal projects for
	Australian and overseas based mining groups. Mr Jones is currently the
	Managing Director of GR Engineering Services Limited.
	Other public company directorships held by Mr Jones over the last three years
	are: GR Engineering Services Limited - (June 2013 to current);Marindi Metals
	Limited (formerly known asBrumby Resources Ltd) – (February 2006 to
	current);and Azumah Resources Limited –(October 2009to current).

DIRECTORS’ REPORT

Mr Zhong, Yu	Mr Zhong has over 30 years’ experience in engineering and specialises in	Non-executive
	research and development of new engineering technology. Mr Zhong has a	Director
	Master degree of Management and does not currently hold directorships of
	otherpublic Australian companies.
Mr Xing, Jianhua	Mr Xing is a qualified accountant with over 20 years’ experience in	Non-executive
	accounting and finance, especially in the industry of exploration and mining.	Director
	He holds a Master degree from Wuhan University of Technology and has
	worked as a senior manager for China General Nuclear Power Group since	(alternate director
	2006. He is currently the Chief Finance Officer of CGNPC-Uranium	of Mr	He,
	Resources Co. Ltd.	Zuyuan)
Mr Zhang, Zimin	Mr Zhang is a senior engineer with over 25 years’ experience in the uranium	Non-executive
	industry. He holds a Master degree from Beijing Research Institute of	Director
	Uranium Geology and has worked as a senior manager for China General
	Nuclear Power Group since 2008. He is currently the Chief Engineer of the
	Department of Overseas Business Development of CGNPC-Uranium
	Resources Co. Ltd.

DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

The particulars of Directors’ interest in shares and options are as at the date of this report.

He, Zuyuan Xiang, Weidong Lindsay G Dudfield Geoff M Jones Zhong, Yu* Xing, Jianhua Zhang, Zimin	Ordinary Shares - - 3,255,165 - 26,553,722 - -	Options
		- - - - - - -

*: shares indirectly held through KangDe Investment Group. Mr Zhong controls KangDe Investment Group by holding more than 50% holding.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company’s Directors held during the year ended 31 December 2015 and the numbers of meetings attended by each Director.

015 and the numbers of meetings attended by each Director.
He, Zuyuan Xiang, Weidong Lindsay G Dudfield Geoff M Jones Zhong, Yu Xing, Jianhua Zhang, Zimi	Number Held Whilst in Office Number Attended
	2 1 2 2 2 2 2 1 2 1 2 2 2 2

As at the date of this report, the Group did not have an Audit Committee. The Board considers that due to the Group’s size, an audit committee’s functions and responsibilities can be adequately and efficiently discharged by the Board as a whole, operating in accordance with the Group’s mechanisms designed to ensure independent judgement in decision making.

DIRECTORS’ REPORT

DIRECTORS’ SHAREHOLDING

IRECTORS’ SHAREHOLDING
He, Zuyuan Xiang, Weidong Lindsay G Dudfield Geoff M Jones Zhong, Yu* Xing, Jianhua Zhang, Zimin	Fully Paid Ordinary Shares Options
	- - - - 3,255,165 - - - 26,553,722 - - - - -

*: Including shares held by the director directly and indirectly.

**: Shares indirectly held through KangDe Investment Group.

Retirement, election and continuation in office of directors

Mr He, Zuyuan and Mr Lindsay Dudfield are the directors retiring by rotation who, being eligible, may offer themselves for re-election at Annual General Meeting.

COMPANY SECRETARY INFORMATION

Ms Li, Xuekun, ACCA, ACIS, was appointed the Company Secretary on 15 June 2010. Ms Li has completed a Bachelor of Management. She has nearly 20 years’ experience in finance and corporate governance.

REMUNERATION REPORT (AUDITED)

This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of the Company’s key management personnel for the financial year ended 31 December 2015. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity. The prescribed details for each person covered by this report are detailed below under the following headings:

remuneration policy
key management personnel emoluments
service agreements
options granted as part of remuneration
share-based compensation
securities policy

Key Management Personnel (“KMP”)

H. Zuyuan Non-Executive Chairman L. Dudfield Non-Executive Director G. Jones Non-Executive Director Z. Yu Non-Executive Director X. Jianhua Non-Executive Director Z. Zimin Non-Executive Director X. Weidong Managing Director L. Xuekun Company Secretary and CFO S. Xiaohua CFO (resigned on 25 May 2015)

DIRECTORS’ REPORT

Remuneration Policy

The remuneration policy of the Group has been designed to align directors’ objectives with shareholders and business objectives. The Board of Energy Metals 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 Group, as well as create goal congruence between directors, executives and shareholders. The Board’s policy for determining the nature and amount of remuneration for Board members of the Company is as follows:

All executives receive either consulting fees or a salary, part of which may be taken as superannuation, and from time to time, options. Options issued to directors are subject to approval by Shareholders. The Board reviews executive packages annually by reference to the executive’s performance and comparable information from industry sectors and other listed companies in similar industries. An Employee Share Option Plan was adopted by the Group following approval by shareholders at the Group’s Annual General Meeting held on 24[th] November 2006.

Board members are allocated superannuation guarantee contributions as required by law, and do not receive any other retirement benefits. From time to time, some individuals may choose to sacrifice their salary or consulting fees to increase payments towards superannuation. All remuneration paid to directors and specified executives is valued at the cost to the Company and expensed. Options are valued using the Black-Scholes methodology.

The Board’s policy is to remunerate non-executive directors at commercial market rates for comparable companies for their time, commitment and responsibilities. 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 and is currently set at $200,000 per annum. Fees for non-executive directors are not linked to the performance of the Group. Non-executive directors’ remuneration may also include an incentive portion consisting of options, subject to approval by Shareholders.

The policy, setting the terms and conditions for the executive directors and specified executives, was developed and approved by the Board and is considered appropriate for the current exploration phase of the Group’s development. Emoluments of Directors are set by reference to payments made by other companies of similar size and industry, and by reference to the skills and experience of Directors. Fees paid to directors are not linked to the performance of the Group. This policy may change once the exploration phase is complete. At present the existing remuneration policy is not impacted by the Group’s performance including earnings and changes in shareholder wealth (dividends, changes in share price or returns of capital to shareholders).

The following table shows the share price and the market capitalisation of the Company at the end of each period in the past four financial years. No dividends have been paid during the year.

	At 31 December	At 31 December	At 31 December	At 31 December	At 31 December
	2011	2012	2013	2014	2015
Share Price	$0.31	$0.25	$0.24	$0.13	$0.065
Market Capitalisation	$46.7M	$37.7M	$36.9M	$27.3M	$13.6M
Dividend	-	-	-	-	-

Directors and Executives (Key Management Personnel) Emoluments

The Group’s policy for determining the nature and amount of emoluments of key management personnel is that Directors are to be paid by salaries or consulting fees at commercial rates for professional services performed.

Details of the nature and amount of each element of the emoluments of each director of Energy Metals Limited are set out in the following tables.

DIRECTORS’ REPORT

				Post-	Share-			%
		Short-term benefits		employment	based			remuneration
					payment			consisting
		Directors	Cash Salary,	Super-	Options		Total	of options
		Fees	Consulting Fees	annuation
Non-Executive Directors		$	$	$	$		$	%
H. Zuyuan	2015	-	-	-		-	-		-
	2014	-	-	-		-	-		-
L. Dudfield	2015	-	24,000	-		-	24,000		-
	2014	-	26,450	-		-	26,450		-
G. Jones	2015	22,831	-	2,169		-	25,000		-
	2014	22,857	-	2,143		-	25,000		-
Zhong. Yu	2015	25,000	-	-		-	25,000		-
	2014	25,000	-	-		-	25,000		-
Xing. Jianhua	2015	-	-	-		-	-		-
	2014	-	-	-		-	-		-
Zhang. Zimin	2015	-	-	-		-	-		-
	2014	-	-	-		-	-		-
Executive Directors
Xiang. Weidong	2015	200,000	-	-		-	200,000		-
	2014	200,000	-	-		-	200,000		-
Key Management
Song. Xiaohua	2015	70,047	-	-		-	70,047		-
	2014	155,000	-	-		-	155,000		-
Li. Xuekun	2015	-	65,310	-		-	65,310		-
	2014	-	34,676	-		-	34,676		-
Total	2015	317,878	89,310	2,169		-	409,357		-
	2014	402,857	61,126	2,143		-	466,126		-

Service Agreements

On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms of appointment, including compensation relevant to the office of director. Remuneration and other terms of employment for the Executive Director and other senior management are also formalised in service agreements as summarised below.

He, Zuyuan

On 23 December 2009 the Company entered into an agreement (via a letter of appointment), appointing Mr He, Zuyuan as a Non-Executive Chairman. Mr He is entitled to a director’s fees of $25,000 (2014: $25,000) per annum. According to a consent letter dated on 22 November 2013, Mr He, Zuyuan agreed to forgive his remuneration from 1 April 2013 to 31 December 2014 as his service as a director had been considered and compensated by other related corporate bodies. The agreement was extended to 31 December 2015.

Xiang Weidong

Dr Xiang was appointed a director on 8 December 2010 pursuant to the terms and conditions of his employment contract with the Company. Dr Xiang has been the Managing Director since 1 January 2011. His salary is $200,000 per annum (2014: $200,000 per annum). The agreement may be terminated by either party on 1 month’s written notice.

Lindsay Dudfield

Mr Dudfield, as a Non-executive Director, is contracted via a Consultancy Agreement between the Company and Jopan Management Pty Ltd trading as Western Geological Services. The Company pays Western Geological Services at a rate of $750/day (2014: $750/day) in return for Mr Dudfield’s services. The agreement may be terminated by either party on 1 month’s written notice.

DIRECTORS’ REPORT

Zhong, Yu

On 8 December 2010, the Company entered into an agreement (via a letter of appointment), appointing Mr Zhong, Yu as a Non-Executive Director. Mr Zhong is entitled to a director’s fees of $25,000 (2014: $25,000) per annum.

Geoff Jones

On 29 August 2008, the Company entered into an agreement (via a letter of appointment), appointing Mr Geoff Jones as a Non-Executive Director. Mr Jones is entitled to a director’s fees of $25,000 (2014: $25,000) per annum.

Xing, Jianhua

Mr Xing was appointed a Non-Executive director on 30 June 2014. According to a letter of appointment, Mr Xing, Jianhua is entitled to a director’s fee of $25,000 per annum. Mr Xing consented to forgive his remuneration from 1 July 2014 to 31 December 2014 as his service had been considered and compensated by other related corporate bodies. The agreement was extended to 31 December 2015.

Zhang, Zimin

Mr Zhang was appointed a Non-Executive director on 30 June 2014. According to a letter of appointment, Mr Zhang, Zimin is entitled to a director’s fee of $25,000 per annum. Mr Zhang consented to forgive his remuneration from 1 July 2014 to 31 December 2014 as his service had been considered and compensated by other related corporate bodies. The agreement was extended to 31 December 2015.

Li, Xuekun

Ms Li is the Company Secretary of Energy Metals Limited and has been the Chief Finance Officer since Mr Song, Xiaohua resigned. She provides her service via L.X.K. Consulting. On 25 May 2015, the Company entered into a Professional Service Agreement with Ms. Li and pays a rate of $105/hour in return for her professional services. The agreement expires at 31 December 2016 and may be terminated by a party if the other party commits a breach of the agreement and the breach is not corrected within 30 days.

Options granted as part of remuneration

Options over shares in Energy Metals Limited are granted under the Energy Metals Employee Share Option Plan. Participation in the plan and any vesting criteria, are at the Board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Any options issued to directors of the Company are subject to shareholder approval and are not linked to Company financial performance. There were no options issued during the year to any of the KMP.

Share-based compensation

No shares in the Company were provided as remuneration to directors of Energy Metals Limited and senior managers of the Company during the year (2014: Nil). No options were vested during the year (2014: Nil).

Securities Policy

The Company has implemented a policy on trading in the Company’s securities designed to ensure that all directors, senior management and employees of the Company act ethically and do not use confidential inside information for personal gain. The policy states acceptable and unacceptable times for trading in Company securities and outlines the responsibility of directors, senior management and employees to ensure that trading complies with the Corporations Act 2001, the Australian Securities Exchange (ASX) Listing Rules and Company Policy.

Any transaction conducted by Directors with regards to shares of the Company requires notification to the ASX. Each Director has entered into an agreement to provide any such information with regards to Company dealings directly to the Company Secretary promptly to allow the Company to notify the ASX within the required reporting timeframes.

DIRECTORS’ REPORT

Shares provided on exercise of options

No ordinary shares in the Company were provided as a result of the exercise of remuneration options to directors of Energy Metals Limited and senior managers of the Company during the year (2014: Nil).

End of Remuneration Report (Audited).

SHARES UNDER OPTION

At 31 December 2015, there were no shares under option (2014: Nil).

SHARES ISSUED ON EXERCISE OF OPTIONS

There were no shares issued on exercise of options during the financial year and up to the date of this report.

DIRECTORS AND OFFICERS INSURANCE

The Company has paid a premium to insure the directors and officers of the Company for the period 30/06/2015 to 30/06/2016 against those liabilities for which insurance is permitted under section 199B of the Corporations Act 2001. Details of the nature of the liabilities insured for and the amount of the premium are subject to a confidentiality clause under the contract of insurance.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to 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 part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required by section 307C of the Corporations Act 2001 is included on page 39 of this report.

NON-AUDIT SERVICES

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 22 to the financial statements.

The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise the external auditor’s independence, based on advice received from the Board of Directors, for the following reasons:

• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and

DIRECTORS’ REPORT

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.

11 March 2016, at Perth, Western Australia

==> picture [93 x 47] intentionally omitted <==

XIANG, WEIDONG Managing Director

	Page
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income	14
Consolidated Statement of Financial Position	15
Consolidated Statement of Changes in Equity	16
Consolidated Statement of Cash flows	17
Notes to the Consolidated Financial Statements	18
Directors’ Declaration	38
Auditors’ Independence Declaration	39
Independent Auditors’ Report to the Members	40

These financial statements cover the consolidated financial statements for the controlled entity consisting of Energy Metals Limited and its subsidiary and its joint venture. The financial statements are presented in the Australian currency.

Energy Metals Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Energy Metals Limited Level 2, 8 Colin Street West Perth WA 6005

A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities in the directors’ report on pages 3 to 12 are not part of these financial statements.

The financial statements were authorised for issue by the directors on 11 March 2016. The directors have the power to amend and reissue the financial statements.

Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, financial reports and other information are available at our Investor Information on our website: www.energymetals.net

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

Notes Other revenue 3a Depreciation expense 3b Exploration expense Receivable written off Employee benefits expense 3c Corporate and regulatory expenses Office rental Legal advisory expense Other administrative expense Loss before income tax Income tax expense 4 Loss for the year Total comprehensive expense for the year Loss attributable to owners of Energy Metals Limited Total comprehensive expense attributable to owners of Energy Metals Limited Loss per share attributable to the ordinary equity holders of the Company: Basic loss per share (cents per share) 6 Diluted earnings per share (cents per share) 6	Year ended 31 December 2015 $ Year ended 31 December 2014 $
	707,123 929,844 (87,855) (108,054) (512,018) - - (43,625) (549,994) (590,265) (38,844) (39,052) (216,977) (207,201) (536) (14,973) (326,157) (478,748)
	(1,025,258) (552,074) - -
	(1,025,258) (552,074)
	(1,025,258) (552,074)
	(1,025,258) (552,074)
	(1,025,258) (552,074)
	(0.49) (0.27) NA NA

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015

Notes CURRENT ASSETS Cash and cash equivalents 8 Term deposits 8 Trade and other receivables 9 Total Current Assets NON-CURRENT ASSETS Receivables 9 Plant and equipment 10 Exploration and evaluation expenditure 11 Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 12 Provisions 13 Total Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 14 Accumulated losses Capital and reserves attributable to owners of Energy Metals Limited TOTAL EQUITY	31 December 2015 $ 31 December 2014 $
	190,491 11,609,364 21,571,236 11,307,540 264,241 232,579
	22,025,968 23,149,483
	- 143,910 319,542 405,783 32,656,336 32,127,774
	32,975,878 32,677,467
	55,001,846 55,826,950
	343,547 132,234 82,152 93,311
	425,699 225,545
	425,699 225,545
	54,576,147 55,601,405
	59,051,644 59,051,644 (4,475,497) (3,450,239)
	54,576,147 55,601,405
	54,576,147 55,601,405

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Balance at 1 January 2014 Total comprehensive expense for the year Issue of capital Balance at 31 December 2014 Total comprehensive expense for the year Balance at 31 December 2015	Attributable to owners of EnergyMetals Limited
	Contributed equity $ Accumulated losses $ Total $
	49,677,832 (2,898,165) 46,779,667 - (552,074) (552,074) 9,373,812 - 9,373,812
	59,051,644 (3,450,239) 55,601,405
	- (1,025,258) (1,025,258)
	59,051,644 (4,475,497) 54,576,147

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

Notes Cash flows from operating activities Payments to suppliers and employees Payments for exploration operation Income received from Joint Venture Interest received Grant and rebate received Net cash used in operating activities 5 Cash flows from investing activities Payments for exploration, evaluation and development expenditure Payments for property, plant and equipment Acquisition of term deposits Withdrawal of term deposits Receipt of environmental guarantee bond Net cash used in investing activities Cash flows from financing activity Return of share application fund Net cash used in financing activity Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 5	Year ended 31 December 2015 $ Year ended 31 December 2014 $
	Inflows (Outflows) Inflows (Outflows) (1,317,271) (1,209,807) (137,017) - 14,289 17,128 809,189 831,637 1,921 30,029
	(628,889) (331,013)
	(1,106,710) (2,347,262) (1,615) (40,670) (20,989,199) (14,828,162) 11,088,477 15,169,748 219,063 41,823
	(10,789,984) (2,004,523)
	- (24,011)
	- (24,011)
	(11,418,873) (2,359,547) 11,609,364 13,968,911
	190,491 11,609.364

The above Consolidated Statement of Cash flows should be read in conjunction with the accompanying notes.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented.

(a) Statement of Compliance

These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.

The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the company and the Group comply with International Financial Reporting Standards (“IFRS”). The financial statements were authorised for issue by the directors on 11 March 2016.

Basis of Preparation

These financial statements have been prepared under the historical cost convention.

Critical Accounting Estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 1(s).

Removal of Parent

Separate financial statements for Energy Metals Limited, as an individual entity, are no longer presented as a consequence of a change to the Corporations Act 2001 . Financial information for Energy Metals Limited as an individual entity is included in note 24.

(b) Principles of Consolidation
(i) Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and 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.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Principles of Consolidation (continued)

(i) Subsidiaries (continued)

any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meeting.

(ii) Joint Operation

The Company has an interest in a joint arrangement that is a jointly controlled operation. A joint arrangement is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. The Company recognises its interest in the joint operation by recognising the assets that it controls and the liabilities that it incurs. The Company also recognises the expenses that it incurs and its share of the income that it earns from the sale of goods or services by the joint operation. Details of the joint operation are set out in note 23.

(c) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Board. The Board is responsible for allocating resources and assessing performance of the operating segments.

(d) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as described below.

Revenue is recognised for the major business activities as follows:

(i) Management Fee

Management fee from joint venture activities is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, allowances, rebates and amounts collected on behalf of third parties.

(ii) Interest Income

Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

(e) Income Tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiary operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Income Tax (continued)

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(f) Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.

(g) Impairment of Assets

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. The 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 of which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(h) Cash and Cash Equivalents

For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand, and deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities 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.

(i) Trade and Other Receivables

Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Receivables are generally due for settlement within 30 days.

Collectability of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the receivable is impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(i) Trade and Other Receivables (continued)

The amount of the impairment loss is recognised in the consolidated profit or loss and other comprehensive income. When a receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the profit or loss.

(j) Investments and Other Financial Assets

Classification

The Group classifies its financial assets in the following categories: loans and receivables and held-to-maturity investments. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period.

(i) Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are included in trade and other receivables (note 9) and in the consolidated statement of financial position.

(ii) Held-to maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. If the Group were to sell other than an insignificant amount of held-to-maturity financial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.

Recognition and Derecognition

Regular purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Subsequent Measurement

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Impairment

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or Group of financial assets is impaired. If there is evidence of impairment for any of the Group’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in profit or loss.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(k) Plant and Equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced, All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Depreciation is calculated using the diminishing value and prime cost methods and is brought to account over the estimated economic lives of all property, plant and equipment. The rates used are based on the useful life of the assets and range from 10% to 40%.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.

(l) Exploration and Evaluation Expenditure

The Group’s policy with respect to exploration and evaluation expenditure is to use the area of interest method. Under this method exploration and evaluation expenditure is carried forward on the following basis:

i) Each area of interest is considered separately when deciding whether, and to what extent, to carry forward or write off exploration and evaluation costs.
ii) Exploration and evaluation expenditure related to an area of interest is carried forward provided that rights to tenure of the area of interest are current and that one of the following conditions is met:
such evaluation costs are expected to be recouped through successful development and exploitation of the area of interest or alternatively, by its sale; or
exploration and/or evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in relation to the area are continuing.

Exploration and evaluation costs accumulated in respect of each particular area of interest include only net direct expenditure.

The application of the Group’s policy in regards to the recognition and measurement of capitalised exploration and evaluation expenditure requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. The Group reviews the carrying value of exploration and evaluation expenditure at each reporting date. This requires judgement as to the status of the individual projects and their future economic value. The factors impacting on economic value include the size of the total available resource, the grade of the resource, expected costs of developing the project, technical feasibility of the project, expected costs of mining production and future commodity prices.

If, after having capitalised exploration and evaluation expenditure, the area of interest is disposed or surrendered or management concludes that the capitalised expenditure is unlikely to be recovered by future sale or successful development and exploitation of the area, then the relevant capitalised amount will be written off through the Consolidated Profit or Loss and Other Comprehensive Income. Expenditure that is not deemed fit for capitalisation is costed directly through the Consolidated Profit or Loss and Other Comprehensive Income.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(m) Trade and Other Payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(n) Employee Benefits

(i) Short-term and Long-term Employee Benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

(ii) Share-based Payments

Share-based compensation benefits are provided to employees via the Energy Metals Limited Employee Option Plan.

The fair value of options granted under the Energy Metals Limited Employee Option Plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions but excludes the impact of any service and non-market performance vesting conditions and the impact of any non-vesting conditions.

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.

(o) 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.

(p) Earnings Per Share

(i) Basic Earnings Per Share

Basic earnings per share is determined by dividing:

the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
By the weighted average number of ordinary shares outstanding during the financial year.

(ii) Diluted Earnings Per Share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(r) New Accounting Standards and Interpretations

There were no new accounting standards and interpretations issued, that were effective for the financial year beginning 1 January 2015.

Standards and Interpretations in issue not yet adopted

At the date of authorisation of the consolidated financial statements, the Standards and Interpretations listed below were in issue but not yet effective. The potential effect of the revised Standards/Interpretations on the Group’s financial statements has not yet been determined.

AASB 9 “Financial Instruments” and the relevant amending standards, effective for annual reporting periods beginning on or after 1 January 2018;

AASB 1056 ‘Superannuation Entities’, effective for annual reporting periods beginning on or after 1 January 2018;

AASB 2014-3 “Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operation”, effective for annual reporting periods beginning on or after 1 January 2016;

AASB 2014-4 “Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation”, effective for annual reporting periods beginning on or after 1 January 2016;

AASB 15 ‘Revenue from Contracts with Customers’, AASB 2014-5 ‘Amendments to Australian Accounting Standards arising from AASB 15’ and AASB 2015-8 ‘Amendments to Australian Accounting Standards – Effective Date of AASB 15’, effective for annual reporting periods beginning on or after 1 January 2016;

AASB 2014-6 ‘Amendments to Australian Accounting Standards – Agriculture: Bearer Plants’, effective for annual reporting periods beginning on or after 1 January 2016;

AASB 2014-9 ‘Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements’, effective for annual reporting period beginning on or after 1 January 2016’;

AASB 2014-10 “Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture ”, effective for annual reporting periods beginning on or after 1 January 2016;

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(r) New Accounting Standards and Interpretations (continued)

AASB 2015-1 “Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting Standards 2012–2014 Cycle”, effective for annual reporting periods beginning on or after 1 January 2016.

(s) Critical Accounting Estimates and Judgements

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Accounting for capitalised exploration and evaluation expenditure

The Group has capitalised significant exploration and evaluation expenditure on the basis either that it is expected to be recouped through future successful development or alternatively sale of the Areas of Interest. If ultimately the area of interest is abandoned or is not successfully commercialised, the carrying value of the capitalised exploration and evaluation expenditure would be written down to its recoverable amount.

Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, cost of drilling and production, production rates and changes to commodity prices. As at 31 December 2015 the carrying value of capitalised exploration and evaluation expenditure is $32,656,336 (2014: $32,127,774).

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

2. SEGMENT INFORMATION

(a) DESCRIPTION OF SEGMENTS

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on three reportable segments of its business, being exploration, trading and corporate segments.

(b) SEGMENT REVENUE AND RESULTS

CONTINUING OPERATIONS Uranium exploration Uranium trading Corporate	Consolidated SEGMENT REVENUE SEGMENT RESULT 2015 2014 2015 2014 $ $ $ $ 14,289 46,855 (552,003) (51,030) - - - (43,625) 692,834 882,989 (473,255) (457,419) 707,123 929,844 (1,025,258) (552,074)	Consolidated SEGMENT REVENUE SEGMENT RESULT 2015 2014 2015 2014 $ $ $ $ 14,289 46,855 (552,003) (51,030) - - - (43,625) 692,834 882,989 (473,255) (457,419) 707,123 929,844 (1,025,258) (552,074)
		2015 2014 $ $
		(552,003) (51,030) - (43,625) (473,255) (457,419)
		(1,025,258) (552,074)

Segment revenue of uranium exploration represents revenue generated from service provided to Bigrlyi Joint Operation while segment revenue of uranium trading generated from services provided to China Uranium Development Company Limited or its affiliates. There were no inter-segment sales in the current year (2014: nil).

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 1. Segment result represents the profit/(loss) before tax earned by each segment. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

(c) SEGMENT ASSETS AND LIABILITIES

SEGMENT ASSETS Uranium exploration Uranium trading Corporate TOTAL ASSETS TOTAL ASSETS INCLUDES ADDITIONS TO NON-CURRENT ASSETS SEGMENT LIABILITIES Uranium exploration Uranium trading Corporate TOTAL LIABILITIES	Consolidated 31 December 2015 31 December 2014 $ $
	32,967,053 32,704,338 - 366 22,034,793 23,122,246
	55,001,846 55,826,950
	442,298 2,064,853
	(131,394) (31,078) - (12,000) (294,305) (182,467)
	(425,699) (225,545)

(d) INFORMATION ABOUT MAJOR CUSTOMERS

The Group does not have any external revenue at this stage. The Group is not reliant on any of its major customers.

(e) URANIUM TRADING

The Group did not have any uranium trading during the year as no business opportunities had been identified..

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

3. REVENUES AND EXPENSES

(a) Other Revenue includes the following revenue items: Interest income Management fee from Joint Operation Fuel rebate (b) Loss includes the following specific expenses: Depreciation (c) Employee benefit expenses: Wages & superannuation - Including: Executive Director’s fee Non-executive Directors fees* Others	Consolidated 2015 $ 2014 $
	692,834 882,988 12,368 16,827 1,921 30,029
	707,123 929,844
	87,855 108,054
	484,205 513,888 200,000 200,000 48,373 47,857 17,416 28,520
	549,994 590,265

*The payment in exchange for Mr. Lindsay Dudfield’s service was included in the Corporate and Regulatory Expense in the profit or loss accounts.

4. TAXATION

The reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Company’s
applicable income tax rate is as follows:
Loss before income tax	(1,025,258)	(552,074)
Income tax expense (benefit) @ 30%	(307,577)	(165,622)
Tax effect of amounts which are not deductible in calculating
taxable income:
Non-deductible expenses	128	1,394
Timing differences not recognised	(157,506)	(604,787)
Deferred tax assets relating to tax losses not recognised	519,987	966,191
Prior year true up	(55,032)	(197,179)
Income tax expenses/benefit reported in the income statement	-	-
The franking account balance at period end was $nil (2014: $nil).
Deferred tax assets and liabilities not recognised relate to the following:
Deferred tax assets
Tax losses	10,689,762	10,321,040
Non-refundable R&D tax offsets	1,386,721	1,248,545
Other temporary differences	29,057	27,993
Deferred tax liabilities
Exploration assets	(9,796,901)	(9,638,332)
Other temporary differences	(52,715)	(52,715)
Net deferred tax assets not recognised	2,255,925	1,906,531

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

4. TAXATION (CONTINUED)

Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will be available against which deductible temporary differences and tax losses can be utilised.

The use of losses is dependent on the Company satisfying the required criteria within the Income Tax Assessment Act 1936 & 1997 at the time the losses are incurred and used. The provisions of the Acts may change or the business may alter (past the change of ownership) and as a result the Company’s losses may be lost in the future.

Tax Consolidation

Energy Metals Limited and its 100% owned Australian resident subsidiary, NT Energy Pty Ltd have implemented the tax consolidation legislation.

5. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES

Loss after income tax Depreciation Non-cash exploration expense Receivable written off Annual leave provision Change in operating assets and liabilities during the financial period: (Increase)/Decrease in trade and other receivables Increase in trade and other payables Net cash outflow from operating activities Reconciliation of cash balance comprises: Cash and cash equivalents*	Consolidated 2015 $ 2014 $
	(1,025,258) (552,074) 87,855 108,054 375,001 - - 43,625 (11,159) 11,724 (31,662) 25,740 113,351 31,918
	(491,872) (331,013)
	190,491 11,609,364

*: Cash at bank earns interest at 2.50% - 3% (2014: 3.5 %). Cash on term deposit are denominated in A$ with an average maturity of 90 - 180 days (2014: 80 days) and effective interest rates between 2. 5% and 3.1%.

There were no significant non-cash transactions during the year.

6. LOSS PER SHARE

The loss or earnings and weighted average number of ordinary shares used in the calculation of basic (loss)/earnings per share are as follows.

Reconciliation of loss used in calculation of loss per share:

Loss attributable to owners of the Company Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share.	(1,025,258) (552,074)
	2015 Number 2014 Number 206,313,060 206,313,060

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

7. DIVIDENDS

There were no dividends paid or declared by the Company during the year.

8. CASH AND CASH EQUIVALENTS

Cash and cash equivalents Share of Joint Operation cash Term deposits classified separate to cash on face of statement of Financial Position	Consolidated 31 December 2015 $ 31 December 2014 $
	128,174 11,559,174 62,317 50,190
	190,491 11,609,364
	21,571,236 11,307,540

As at 31 December 2015, the Company had approximately total $21.6 million term deposits (2014: $11.3 million) with maturities from 4 months to 6 months in various financial situations earning interest income at an average rate of 3.03% (2014: 3.5%).

The Company’s exposure to interest rate risk is disclosed in Note 16.

9. TRADE AND OTHER RECEIVABLES

9. TRADE AND OTHER RECEIVABLES
CURRENT GST receivable Trade receivables Other receivables NON- CURRENT Other receivables	Consolidated 31 December 2015 $ 31 December 2014 $
	17,791 54,394 20,119 - 226,331 178,185
	264,241 232,579
	- 143,910

Trade receivables are denominated in Australian dollars and are interest free. The settlement terms varies depending on business transactions. Other receivables are mainly interest receivables and receivables due from joint operations. Due to the short-term nature of receivables their carrying value is assumed to be their fair value. Non-current receivables as at 31 December 2014 mainly included environment security bond of $143,910. No trade and other receivables, including current and non-current, are impaired.

Trade receivables disclosed above included amounts that are past due at the end of the reporting period for which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts were still considered recoverable.

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is moderate due to the fact that the trading transactions are limited and the balance of the trade receivable is mainly due from joint operations. Of the trade receivables balance at the end of the year, there is one (1) customer who represents more than 5% of the total balance of trade receivables.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

10. NON-CURRENT ASSETS - PLANT AND EQUIPMENT

Plant and equipment - at cost Less accumulated depreciation Motor vehicle – at cost Less accumulated depreciation Total Reconciliation of the carrying amount of fixed assets: Carrying amounts at 1 January 2014 Additions Depreciation expenses Carrying amount at 31 December 2014 Carrying amount at 1 January 2015 Additions Depreciation expenses Carrying amount at 31 December 2015	Consolidated 31 December 2015 $ 31 December 2014 $ 893,269 891,655 (638,071) (568,538) 255,198 323,117 200,806 200,806 (136,462) (118,140) 64,344 82,666 319,542 405,783
	Plant & equipment $ Motor vehicle $ Total $
	366,798 106,369 473,167 40,670 - 40,670 (84,351) (23,703) (108,054)
	323,117 82,666 405,783
	323,117 82,666 405,783 1,615 - 1,615 (69,534) (18,322) (87,856)
	255,198 64,344 319,542

11. NON-CURRENT ASSETS – EXPLORATION AND EVALUATION EXPENDITURE

Balance at beginning of the year Additions of capitalised exploration expenditure Written-off exploration expenditure Balance at the end of the year	Consolidated 31 December 2015 $ 31 December 2014 $ 32,127,774 30,103,590 903,563 2,024,184 (375,001) -
	32,656,336 32,127,774

The balance carried forward represents projects in the exploration and evaluation phase. Ultimate recoupment of exploration expenditure carried forward is dependent on successful development and commercial exploitation, or alternatively, sale of respective areas.

The written-off exploration expenditure related to the tenements that the Group surrendered during the year.

Employee benefits expense capitalised during the year were:

Wages and superannuation 675,027 675,027

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

12. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES

Trade payables Other payables	Consolidated 31 December 2015 $ 31 December 2014 $
	230,405 117,348 113,142 14,886
	343,547 132,234

Trade payables are unsecured and are usually paid within 30 – 60 days of recognition. The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature.

13. PROVISIONS

Employee benefits	Consolidated 31 December 2015 $ 31 December 2014 $
	82,152 93,311

The provision relates to the Group’s liability for employee’s annual leave entitlements. Based on past experience, the Group expects all employees to take the full amount of accrued leave or require payment within the next 12 months. The carrying amounts of provisions are assumed to be the same as their fair values.

14. CONTRIBUTED EQUITY

The Company had 209,683,312 ordinary shares, fully paid at 31 December 2015 (31 December 2014: 209,683,312). No movement in contributed equity during the year.

Contributed equity Balance at 1 January 2014 Issue of shares in 2014 Balance at 31 December 2014 and 31 December 2015	Consolidated 31 December 2015 $ 31 December 2014 $
	59,051,644 59,051,644
	Number of shares $
	153,767,762 49,677,832 55,915,550 9,373,812
	209,683,312 59,051,644

Ordinary Shares

Ordinary shares entitled the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

14. CONTRIBUTED EQUITY (CONT’D)

Options

Information relating to the Energy Metals Limited Employee Option Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 15.

Capital Risk Management

The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to achieve this objective, the Group seeks to maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain a sufficient funding base to enable the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve these aims, either through new share issues, or the reduction of debt, the Group considers not only its short-term position but also its long-term operational and strategic objectives.

There have been no other significant changes to the Group’s capital management objectives, policies and processes in the year nor has there been any change in what the Group considers to be its capital.

15. SHARE BASED PAYMENT TRANSACTIONS

Share based payments transactions are recognised at fair value in accordance with AASB 2. The expense in the year was nil (2014: Nil).

Employee Option Plan

The establishment of the Energy Metals Employee Share Option Plan was approved by shareholders at the 2006 annual general meeting. The Employee Share Option Plan is designed to provide eligible employees, executive officers and directors of the Company an opportunity, in the form of Options to subscribe for Shares in the Company. An “eligible employee” is a person who is at the time of an offer under the plan, a full or part time employee or director of the Company or an associated body corporate of the Company. Any offer of options to Directors will be subject to shareholder approval.

Under the plan, the Board may offer to eligible persons the opportunity to subscribe for such number of Options in the Company as the Board may decide and on the terms set out in the rules of the plan. Options granted under the plan will be offered to participants in the plan on the basis of the Board’s view of the contribution of the eligible person to the Company. When exercisable, each option is convertible into one ordinary share. Options granted under the plan carry no dividend or voting rights.

No options were granted or exercised during the year ended 31 December 2015. (2014: nil)

There are no options on issue as at 31 December 2015 under the Employee Share Option Plan.

16. FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group does not use any derivative financial instruments to hedge risk exposures. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and other price risks, and aging analysis for credit risk.

Risk management is carried out by the Board as a whole.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

16. FINANCIAL RISK MANAGEMENT (CONT’D)

The Group holds the following financial instruments:

*Financial Assets -Current* Cash and cash equivalents Term deposits Trade and other receivables Financial Liabilities -Current** Trade and other payables	Consolidated 31 December 2015 $ 31 December 2014 $
	190,491 11,609,364 21,571,236 11,307,540 264,241 232,579
	22,025,968 23,149,483
	343,547 143,910

(a) Market Risk

(i) Foreign Exchange Risk The Group does not have significant foreign currency holding. No financial instruments have been entered into to manage this risk.

(ii) Price Risk The Group is in the stage of a junior explorer and the price of commodity does not constitute a significant risk to the business. The Group may adjust its strategy on the progress of its projects to adapt to the change of the market environment.

(iii) Cash flow and fair value interest rate risk The Group’s exposure to interest rate risk arises from assets and liabilities bearing variable interest rates. The weighted average interest rate on cash holdings and term deposits was 3.03% at 31 December 2015 (31 December 2014: 3.5%). All other financial assets and liabilities are non interest bearing.

(iv) Group Sensitivity

At 31 December 2015, if interest rates had increased by 70 or decreased by 100 basis points from the period end rates with all other variables held constant, post-tax profit for the period would have been $156,000 higher/$223,000 lower (31 December 2014 –: $160,000 higher/$229,000 lower), mainly as a result of higher/lower interest income from cash and time deposits.

(b) Credit Risk

Credit risk arises from cash and deposits with banks and financial institutions, as well as outstanding receivables. The Group invests its surplus funds mainly with Australian banking financial institutions, namely National Australia Bank, Westpac Banking Corporation and Bank of China Limited Australia. All these banks have an A rating or above with Standard & Poors. The maximum credit risk of the Company was the exposure of its term deposits and trade and other receivables.

(c) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through the equity market to meet obligations when due. At the end of the reporting period the Group held deposits of $21.6 million (2014: $22.9 million) with maturities from 1 month to 5 months that are expected to readily generate cash inflows for managing liquidity risk and also fulfill the commitments disclosed in Note 18.

(d) Fair Value Measurements

The net fair value of the Group’s financial assets and liabilities approximates their carrying value.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

17. CONTINGENCIES

Contingent Liabilities

Claims of Native Title

To date the Company has been notified by the Native Title Tribunal of native title claims which cover some of the Company’s licence holdings. Until further information arises in relation to the claims and its likelihood of success, the Company is unable to assess the likely effect, if any, of the claims.

18. COMMITMENTS

The Company is required to maintain current rights of tenure to tenements, which require outlays of expenditure in 2016. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations, however, they are expected to be fulfilled in the normal course of operations. Estimated expenditure on mining, exploration and prospecting leases for 2016.

Tenement Expenditure Commitments:	Consolidated
	31 December 2015 $ 31 December 2014 $
	1,070,746 1,879,357

Capital Commitments

There are no capital expenditure commitments for the Group as at 31 December 2015.

Lease Commitments: Group as lessee

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:

Within one year Later than one year but not later than five years	Consolidated 31 December 2015 $ 31 December 2014 $
	35,345 121,180 - 35,345
	35,345 156,525

19. KEY MANAGEMENT PERSONNEL

Key Management Personnel are persons having authority and responsibility for planning, directing and controlling the activities of the Company. The aggregate compensation made to directors of the Company and the Group is set out below:

Short-term benefits Post-employment benefits	Consolidated 31 December 2015 $ 31 December 2014 $
	407,188 463,983 2,169 2,143
	409,357 466,126

Detailed remuneration disclosures are provided in the remuneration report on pages 7 to 11.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

20. CONTROLLED ENTITIES

						Investment at Cost	Investment at Cost
	%	held		State of	Date of
Controlled Entities	31December	31December	Class	Incorporation	Incorporation	31December	31December
	2015	2014				2015	2014
NT Energy Pty Ltd	100%	100%	Ord	VIC	15/11/2006	100	100

The date of acquisition of the controlled entities was on the date of incorporation. The fair value of net assets acquired at the date of acquisition was nil. The principal activity of NT Energy Pty Ltd is uranium trading. The Group continued to develop the trading business during the year.

21. RELATED PARTY TRANSACTIONS

(a) Parent entities

The parent entity within the Group is Energy Metals Limited. The ultimate parent entity is China General Nuclear Power Corporation (formerly known as China Guangdong Nuclear Power Holding Co. Ltd.) (incorporated in the P.R. China) (“CGN”) which at 31 December 2015 owned 66.45% (31 December 2014: 66.45%) of the issued ordinary shares of Energy Metals Limited.

(b) Subsidiaries

Interests in subsidiaries are set out in Note 20.

(c) Key Management Personnel

Disclosures relating to key management personnel are set out in Note 19.

(d) Transactions with related parties

The Company earned $12,368 (2014: $16,287) in management and facility administration fees from the Bigrlyi Joint Operation during the year.

(f) Loans to/from related parties

At 31 December 2015, the Company had other receivable of $78,139 (2014: $69,183) from NT Energy Pty Limited. The other receivable was unsecured, interest free and repayable on demand. The receivable was eliminated in the consolidated financial statements.

(g) Guarantees

There were no guarantees provided to the related parties during the year.

22. REMUNERATION OF AUDITORS

Audit and review of the financial reports Other services	Consolidated 31 December 2015 $ 31 December 2014 $
	52,750 65,000 - -
	52,750 65,000

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

23. INTEREST IN JOINT OPERATIONS

The Company has the following interest in unincorporated joint operations:

		% Interest	% Interest
Joint Operation	Principal Activity	31 December	31 December
		2015	2014
Bigrlyi Joint Operations	Uranium Exploration	53.29	53.29

The joint operation is a contractual arrangement between participants for the sharing of costs and outputs and did not generate revenue and profit. The joint Operation does not hold any assets and the Group’s share of exploration and evaluation expenditure is accounted for in accordance with the policy set out in Note 1.

The Group’s share of assets employed in the joint operation is:

CURRENT ASSETS Cash and cash equivalents Term deposit TOTAL CURRENT ASSETS NON CURRENT ASSETS Receivable Exploration and evaluation expenditure TOTAL NON CURRENT ASSETS TOTAL ASSETS	Consolidated
	31 December 2015 $ 31 December 2014 $
	62,317 50,190 91,765 -
	154,082 50,190
	- 88,566 14,046,382 13,984,598
	14,046,382 14,073,164
	14,200,464 14,123,354

a) Commitments

There are no capital expenditure commitments for the Joint Operation as at 31 December 2015.

The Group’s share of estimated Year 2016 minimum expenditure commitments for the Joint Operation tenements is $103,248 which is included in the commitment disclosed in Note 18.

b) Contingent liabilities

Claims of Native Title

There are no claims of Native Title that affect the Joint Operation licence holdings.

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

24. PARENT ENTITY INFORMATION

The following details information related to the parent entity, Energy Metals Limited, at 31 December 2015. The information presented here has been prepared using consistent accounting policies as presented in note 1.

Current assets Non-current assets Total assets Current liabilities Total liabilities Contributed equity Accumulated losses Total equity Income for the year Total comprehensive expense for the year	31 December 2015 $ 31 December 2014 $
	22,103,641 23,010,371 32,975,878 32,901,044
	55,079,519 55,911,415
	425,699 207,334
	425,699 207,334
	59,051,644 59,051,644 (4,397,824) (3,347,563)
	54,653,820 55,704,081
	707,123 927,430 (1,050,261) (500,667)

The principal activity of Energy Metals Limited subsidiary NT Energy Pty Ltd is uranium trading. The Group continued to develop the trading business of NT Energy Pty Ltd during the year and expect to recover its investment within NT Energy Pty Ltd.

25. EVENTS OCCURRING AFTER REPORTING DATE

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 significantly the operations, the results of those operations, or the state of affairs of the Company in future financial years.

ENERGY METALS LIMITED AND ITS CONTROLLED ENTITIES ACN 111 306 533

DECLARATION BY DIRECTORS

The directors of the Company declare that:

The financial statements, comprising the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Cash flows, Consolidated Statement of Changes in Equity and accompanying notes are in accordance with the Corporations Act 2001 , including:
(a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) giving a true and fair view of the financial position as at 31 December 2015 and of the performance for the year ended on that date of the consolidated entity.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer as required by section 295A of the Corporations Act 2001.
The consolidated entity has included in the notes to the financial statements an unreserved and explicit statement of compliance with International Financial Reporting Standards.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

==> picture [93 x 47] intentionally omitted <==

WEIDONG XIANG

Managing Director

Perth, Western Australia 11 March 2016

==> picture [124 x 23] intentionally omitted <==

Deloitte Touche Tohmatsu ABN 74 490 121 060

Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000

GPO Box A46 Perth WA 6837 Australia

Tel: +61 (0) 8 9365 7000 Fax: +61 (0) 8 9365 7001 www.deloitte.com.au

The Board of Directors Energy Metals Limited Level 2, 8 Colin Street West Perth WA 60051

11 March 2016

Dear Board Members

Energy Metals Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Energy Metals Limited.

As lead audit partner for the audit of the financial statements of Energy Metals Limited for the year ended 31 December 2015, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit ; and
(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

==> picture [193 x 17] intentionally omitted <==

DELOITTE TOUCHE TOHMATSU

Leanne Karamfiles

Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

==> picture [130 x 25] intentionally omitted <==

Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 (0) 2 9365 7000 Fax: +61 (0) 2 9365 7001 www.deloitte.com.au

Independent Auditor’s Report to the members of Energy Metals Limited

Report on the Financial Report

We have audited the accompanying financial report of Energy Metals Limited, which comprises the consolidated statement of financial position as at 31 December 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity, comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 13 to 38.

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 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 Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the consolidated financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

==> picture [92 x 18] intentionally omitted <==

Auditor’s Independence Declaration

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Energy Metals Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

Opinion

In our opinion,

(a) the financial report of Energy Metals Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 7 to 11 of the directors’ report for the year ended 31 December 2015. 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.

Opinion

In our opinion the Remuneration Report of Energy Metals Limited for the year ended 31 December 2015, complies with Section 300A of the Corporations Act 2001.

==> picture [194 x 18] intentionally omitted <==

DELOITTE TOUCHE TOHMATSU

Leanne Karamfiles

Partner Chartered Accountants Perth, 11 March 2016

AI assistant

ENERGY METALS LTD — Annual Report 2015

64845_rns_2016-03-10_735af5e7-777b-439e-b239-30079008fdcb.pdf

ENERGY METALS LIMITED AND ITS CONTROLLED ENTITY

CORPORATE DETAILS

Directors

Registered Office

Auditor

Share Registry

Stock Exchange Listing

Bankers

Solicitors

DIRECTORS’ REPORT

DIRECTORS

PRINCIPAL ACTIVITIES

DIVIDENDS

REVIEW OF OPERATIONS

Exploration

Northern Territory

Bigrlyi Joint Venture

Western Australia

Uranium Trading

OPERATING RESULTS FOR THE YEAR

REVIEW OF FINANCIAL CONDITIONS

CHANGES IN STATE OF AFFAIRS

MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

ENVIRONMENTAL REGULATION

INFORMATION ON DIRECTORS

DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

MEETINGS OF DIRECTORS

DIRECTORS’ SHAREHOLDING

Retirement, election and continuation in office of directors

COMPANY SECRETARY INFORMATION

REMUNERATION REPORT (AUDITED)

Remuneration Policy

Directors and Executives (Key Management Personnel) Emoluments

Service Agreements

He, Zuyuan

Xiang Weidong

Lindsay Dudfield

Zhong, Yu

Geoff Jones

Xing, Jianhua

Zhang, Zimin

Li, Xuekun

Options granted as part of remuneration

Share-based compensation

Securities Policy

Shares provided on exercise of options

End of Remuneration Report (Audited).

SHARES UNDER OPTION

SHARES ISSUED ON EXERCISE OF OPTIONS

DIRECTORS AND OFFICERS INSURANCE

PROCEEDINGS ON BEHALF OF THE COMPANY

AUDITOR’S INDEPENDENCE DECLARATION

NON-AUDIT SERVICES

Contents

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2015

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

ENERGY METALS LIMITED CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

Critical Accounting Estimates

Removal of Parent

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(i) Subsidiaries (continued)

(ii) Joint Operation

(c) Segment Reporting

(d) Revenue Recognition

(i) Management Fee

(ii) Interest Income

(e) Income Tax

ENERGY METALS LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(e) Income Tax (continued)

(f) Leases

(g) Impairment of Assets

ENERGY METALS LTD Annual Report 2015