Axiom Mining 2015 Annual Report

GROUP FINANCIAL REPORT

Notes to the financial statements for the year ended 30 September 2015

43

The preparation of financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Significant accounting estimates and assumptions The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgements made by management in the application of AASBs that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are disclosed in Note 24. Going concern The Group has recorded a net loss of $12,460K (2014: $15,880K), had net cash outflows from operations of $8,494K (2014: $12,397K) for the year and has no ongoing source of income. At 30 September 2015, the Group had net assets of $5,342K (2014: $2,984K). The financial report has been prepared on a going concern basis that assumes the realisation of assets and extinguishment of liabilities in the normal course of business and at the amounts stated in the financial statements. The Directors believe the going concern basis is appropriate for the following reasons: – at 30 September 2015, the Group had cash and cash equivalents of $1,306K – on 4 November 2015 the Company announced that it had entered into a convertible note facility agreement for up to $15 million to project fund the development of the Isabel Nickel Project through a strategic partnership with experienced resource venture capitalist and project incubator InCor Holdings Plc (‘InCoR’). As part of the agreement, Axiom issued one secured convertible note with a face value of $5,000,000, convertible to a maximum issue of 13,513,514 fully paid ordinary shares based on a conversion price of $0.37 per share – the ability to raise additional share capital by share placements, options, convertible notes, or rights issue – the ability to farm out all or part of its exploration projects – the ability to sell particular exploration projects; and – the ability to renew pending exploration applications based on previous experience.

1. Company information Axiom Mining Limited (the ‘Company’) is a Company incorporated in Hong Kong. Registered office: 2303-7 Dominion Centre, 43-59 Queen’s Road East, Hong Kong. Principal place of business: Level 6, 15 Astor Terrace, Spring Hill QLD 4000 The Company’s shares are listed on the Australian Securities Exchange. The Company and its subsidiaries (the ‘Group’) are principally engaged in mineral exploration in Australia, Solomon Islands and Vietnam. a. Statement of compliance The consolidated financial statements and notes represent those of Axiom Mining Limited and the Controlled Entities (the ‘Consolidated Group’ or ‘Group’). The separate financial statements of the parent entity, Axiom Mining Limited, have not been prepared within this financial report as permitted by the Corporations Act 2001 . The financial statements were authorised for issue on 21 December 2015. These general purpose financial statements have been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (‘AASB’) and International Financial Reporting Standards as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The AASB has issued certain new and revised AASB Standards (‘AASBs’) that are first effective or available for early adoption for the current accounting period of the Group and of the Company. Note 2(x) provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current and prior accounting periods reflected in these financial statements. b. Basis of preparation of the financial statements The financial statements have been prepared under the historical cost basis except that property, plant and equipment are stated at their revalued amount, being the fair value at the date of revaluation as explained in the accounting policy set out in Note 2(e). The financial statements are presented in Australian dollars (‘AUD’), which is also the functional currency of the Company. 2. Significant accounting policies

AXIOM MINING LIMITED ANNUAL REPORT 2015