NOTES TO THE FINANCIAL STATEMENTS for the year ended 30 June 2020 1.
CORPORATE INFORMATION
The consolidated financial report of Sipa Resources Limited (the Company or the parent) and its subsidiaries (collectively, the Group) for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the directors on 22 September 2020. The Company is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the company are described in the Directors’ report. The presentation currency of the Group is the Australian dollar ($).
2.
BASIS OF PREPARATION
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report also complies with IFRS as issued by the International Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except for financial assets that have been measured at fair value.
The accounting policies adopted are consistent with those of the previous financial year, except for the adoption of the new and amended accounting standards and interpretations which became mandatory for the first time this reporting period commencing 1 July 2019.
New and amended accounting standards and interpretations
The Group has adopted all Australian Accounting Standards and Interpretations effective from 1 July 2019.
AASB16 Leases – impacts on adoption
The Group has applied AASB 16 from 1 July 2019. On transition no adjustments were required as the group applied the practical expedient permitted by the standards which exempts any leases with a remaining term of less than 12 months.
New accounting standards and interpretations issued but not yet effective
There are no Australian Accounting Standards and Interpretations that have been issued or amended but are not yet effective which have an impact on the group for the year ended 30 June 2020.
2.1. Going concern
These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a net profit of $336,361 and had net cash outflows from operating activities of $2,634,315 for the year ended 30 June 2020. As at 30 June 2020 the Group had cash and cash equivalents of $2,378,083 and a working capital surplus of $3,549,419. The ability of the Group to continue as a going concern is principally dependent upon the ability of the Group to continue to secure funds by raising capital from equity markets and managing cash flows in line with available funds.
These factors indicate a material uncertainty which may cast significant doubt as to whether the Group will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the financial report.
The directors are satisfied that at the date of signing of the financial report, there are reasonable grounds to believe that the Group will be able to continue to meet its debts as and when they fall due and that it is appropriate for the financial statements to be prepared on a going concern basis. The directors have based this on the following pertinent matters:
–
The Directors believe that future funding will be available to meet the Group’s objectives and debts as and when they fall due, including through engaging with parties interested in joint venture arrangements and/or raising additional capital through equity placements to existing or new investors. The Group has a demonstrated a consistent history of success in this regard as demonstrated by the $2.3m raising completed subsequent to year end.
–
The Group has the capacity, if necessary, to reduce its operating cost structure in order to minimise its working capital requirements;
The financial report does not include adjustments relating to the recoverability or classification of the recorded assets nor to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.
b
SipaSipa Resources Limited Resources Limited 2019 Annual Report Sipa Resources Limited
Annual Report 2020 – Page 29
