Kasbah Resources Limited Annual Report 2018

39 Kasbah Resources Limited Annual Report 2018 1. BASIS OF PREPARATION These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, including Australian Accounting Interpretations and the Corporations Act 2001 . Kasbah Resources Limited is a for-profit entity domiciled in Australia for the purpose of preparing the financial statements. The financial statements are presented in Australian dollars. Compliance with IFRS The consolidated financial statements of Kasbah Resources Limited comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB). Historical Cost Convention These financial statements have been prepared on the accruals basis under the historical cost convention. Going Concern For the year ended 30 June 2018 the consolidated entity recorded a loss of $6,343,602 (2017: $5,204,945) and had net cash outflows from operating activities of $6,416,240 (2017: $4,578,818) and has a net working capital deficit of $921,310 at 30 June 2018 (2017: 705,326). The Group has completed the 2018 Achmmach Tin Project Definitive Feasibility Study (2018 DFS). Following completion of the 2018 DFS, the Company has commenced preliminary development and funding activities, including engaging with debt and equity providers, offtake parties and engineering firms. The Company together with its Joint Venture partners expect to be in a position to approve a decision to mine in conjunction with related offers of debt and equity to facilitate construction of the Achmmach Tin Project by the first quarter of 2019. Short term funding needs are expected to be met through a combination of an extension of existing loan facilities, an interim loan from related parties or an interim capital raise. At this stage, the ability of the consolidated entity to continue as a going concern is dependent on this future finalisation of debt and equity as well as successful commercialisation of the Achmmach Tin Project. The above conditions indicate a material uncertainty that may cast a significant doubt about the consolidated entity’s ability to continue as a going concern and, therefore, whether it will be unable to realise its assets and discharge its liabilities in the normal course of business. At this stage, based on preliminary engagement with debt and equity providers, there are reasonable grounds to believe that debt and equity funding will be available to secure the development of the Achmmach Tin Project. The annual report has been prepared on the basis that the entity is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business. Should the entity not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements and that the financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going concern. Critical Accounting Judgements, Estimates and Assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. There are no critical accounting judgements, estimates and assumptions that are likely to materially affect the current or future financial years apart from those detailed below. –– Note 5 – Taxation –– Note 10 – Recoverability of Exploration and Evaluation Expenditure –– Note 24 – Share Based Payments Principles of Consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Kasbah Resources Limited (the Company) or (Parent Entity) as at 30 June 2018 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de‑consolidated from the date control ceases. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless a transaction provides evidence of the impairment of the asset transferred. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated balance sheet respectively. Accounting Policies Refer to Note 26 for further information as to the Group’s accounting policies. Notes to the Consolidated Financial Statements