Icon Energy Annual Report 2019

Notes to the Consolidated Financial Statements for the year ended 30 June 2019 ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2019 NOTE 1 - BASIS OF ACCOUNTING NOTE 2 - LOSS FROM OPERATING ACTIVITIES Loss from operating activities before income tax includes the following items 30 June 2019 30 June 2018 $ $ Interest received 228,445 203,027 Legal costs recovered 500,000 - Other income 3,850 9,762 732,295 212,789 Proceeds on disposal of inventory 33,400 205,971 Written down value of inventory (147,120) (1,160,036) Cost of sale (576) - (114,296) (954,065) c. Gain on sale of property, plant and equipment (sale and leaseback) Proceeds on disposal of property, plant and equipment - 7,129,321 Written down value of property, plant and equipment - (4,742,934) Costs of sale - (160,596) - 2,225,791 a. Other income The Group was required by the Accounting Standards to impair the value of its Exploration and Evaluation Expenditure and associated inventory by $28,215,219.00 in this financial year. That impairment is the major contributor to the Group’s loss of $31,372,498 for the year ended 30 June 2019 and a significant contributor to the accumulated losses of $90,340,342 as at 30 June 2019. The Group has cash of $8,834,705 at 30 June 2019 and used $3,431,950 of cash in operations, including payments for exploration and evaluation, for the year ended 30 June 2019. The Group also has a restoration commitment, currently provided for at $5,557,429. The Group intends to complete the restoration work within the next 12 months. As at 30 June 2019 the Group has not secured a joint venturer for any of its tenements. The directors have prepared cash flow projections that support the ability of the Group to continue as a going concern. The on-going operation of the Group beyond the 2019-2020 financial year is dependent upon the Group securing a joint venture arrangement to continue the exploration of its current tenements, or further reducing expenditure in-line with available funding; and/or raising additional funding from shareholders or other parties. In the event that the Group does not obtain additional funding or reduce expenditure in-line with available funding, it may not be able to continue its operations as a going concern and therefore may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the consolidated financial statements. CONSOLIDATED ENTITY b. Loss on sale of current assets During the prior year the Group sold its office building, fixtures and fittings and land under a sale and leaseback arrangement. The sale was deemed to be at fair value and the profit has been recognised immediately as a gain on sale in profit or loss. The lease was subsequently classified as an operating lease. The financial statements cover Icon Energy Limited (the "Company") and its controlled entities as a Consolidated Entity (together referred to as the "Consolidated Entity" or the "Group"). Icon Energy Limited is a listed public company, incorporated and domiciled in Australia. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The Group is a for-profit entity, primarily engaged in the acquisiton, exploration and development of oil and gas assets in Australia. The financial statements have been prepared on the historical cost basis. All amounts are presented in Australian dollars, unless otherwise noted. This is also the functional currency of the parent. The financial statements of Icon Energy Limited and its controlled entities comply with all International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board. The financial report was authorised for issue by the Board of Directors on 30 September 2019. The consolidated financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and other authorative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 . Details of Icon Energy Limited accounting policies are included in Note 24. The consolidated financial statements have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business. 49 45 Icon Energy Annual Report 2019