28 Icon Energy Annual Report 2024 ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2024 NOTE 1 - MATERIAL ACCOUNTING POLICY INFORMATION - - - - - The 30 June 2024 end of year financial statements have been prepared on a going concern basis as management do not intend to liquidate the entity nor cease operations and have determined that the Company does not meet the threshold of having no realistic alternative but to do so. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 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. Icon Energy Limited is a listed public company, incorporated and domiciled in Australia. The Company's registered office is located at Level 3, 2 Corporate Court, Bundall Queensland 4217 and principal place of business is Unit 2/3 William Banks Drive, Burleigh Heads Queensland 4220. The Group is a for-profit entity, with the primary activity during the year related to the renewal of ATP 855. It is a requirement of the Australian Accounting Standards, that ‘when preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties. 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") for the year ended 30 June 2024 and were authorised for issue in accordance with a resolution of the Board of Directors on 27 September 2024. The financial statements have been prepared on an accrual and historical cost basis, except for provisions that have been measured at the present value of board of directors' best estimate of the expenditure required to settle the present obligation at the end of the reporting period. All amounts are presented in Australian dollars, unless otherwise noted. This is also the functional currency of the parent. Details of Icon Energy Limited material accounting policies are included in Note 22. Going concern The going concern basis of preparation contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business and at the amounts stated in the financial report. The Group recorded an operating loss for the year ended 30 June 2024 of $1,156,056 (2023: $5,537,787) and net operating cash outflows for the 12 months ended 30 June 2024 was $1,049,919 (2023: $1,501,747). The Group’s current liabilities exceeded its current assets by $3,671,489. These conditions indicate there are material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern, and therefore, it may be unable to realise its assets and discharge its liabilities in the normal course of business. Significant events and critical assumptions impacting the directors' assessment of going concern include: Renewal of ATP 855: On 4 October 2022, the Company applied to the Queensland Department of Resources (Department) to renew ATP 855 (Renewal Application). The Department initially rejected this application on 17 October 2022. In response, the Company sought judicial review of the decision, and on 5 September 2023, the Supreme Court of Queensland ruled in the Company’s favor. The Court directed the Department to process the renewal application. The renewal application is currently under review by the Department. Decommissioning and Rehabilitation Costs: The Company has estimated that the cost for decommissioning and rehabilitation related to ATP 855 is $4,954,842. The critical assumption used by the directors is that neither the Department of Resources nor the Department of Environment & Science will seek the commencement of outstanding decommissioning or rehabilitation requirements in respect to ATP 855 before the outcome of the renewal application is determined. Likelihood of Renewal Success: The Directors assess the likelihood of a successful outcome for the Renewal Application to be no less than 50%. The Directors are confident that the Company is being able to meet all the necessary requirements set forth by the Petroleum and Gas (Production and Safety) Act 2004. Additional Funding: The Directors believe that the Company can raise additional capital to support its operations. Should ATP 855 be renewed, the Directors anticipate raising funding through a capital raising or by partnering with a farm-out partner. If the renewal application is unsuccessful, the Directors will explore alternative options, including deferring rehabilitation work and pursuing further legal actions, given the estimated value of resources in the tenement. Support from Related Parties: The Directors also believe that further support can be provided by related parties if required. Notes to the Consolidated Financial Statements for the year ended 30 June 2024
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