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NORTHERN MINERALS _ ANNUAL REPORT 2021<br />
NORTHERN MINERALS LIMITED<br />
NOTES TO THE FINANCIAL STATEMENTS<br />
This section sets out the accounting policies that relate to the financial statements of Northern Minerals<br />
Limited (“the Company”) and its subsidiaries (“the Group”). Where an accounting policy, critical<br />
accounting estimate, assumption and judgement is specific to a note, these are described within the<br />
note to which they relate. These policies have been consistently applied to all periods presented, except<br />
as described in Note 23 New standards and Interpretations.<br />
The consolidated financial statements of “the Company” and “the Group” for the year ended 30 June<br />
2021 were authorised for issue in accordance with a resolution of the directors on 10 September 2021.<br />
1. <strong>Report</strong>ing Entity<br />
Northern Minerals Limited is a company limited by shares incorporated and domiciled in Australia where<br />
its shares are publicly traded on the Australian Securities Exchange (ASX), and the entity is a for profit<br />
entity.<br />
The nature of the operations and principal activities of the Company are described in the Directors'<br />
<strong>Report</strong>.<br />
2. Basis of Preparation<br />
The financial report is a general purpose financial report, which has been prepared in accordance with<br />
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative<br />
pronouncements of the Australian Accounting Standards Board. The financial report has also been<br />
prepared on a historical cost basis, except for derivative financial instruments and certain other financial<br />
assets and liabilities, which are required to be measured at fair value.<br />
The financial report complies with Australian Accounting Standards, as issued by the Australian<br />
Accounting Standards Board and International Financial <strong>Report</strong>ing Standards (IFRS) as issued by the<br />
International Accounting Standards Board.<br />
The financial report is presented in Australian dollars which is the Group’s functional currency and all<br />
values are rounded to the nearest dollar.<br />
The Group has, where applicable, adopted all of the new and revised Standards and Interpretations<br />
issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations<br />
and effective for the year ended 30 June 2021. Refer to note 23 New Standards and Interpretations for<br />
further details. The Group did not early adopt any Accounting Standards and Interpretations that have<br />
been issued or amended but are not yet effective.<br />
a) Financial Position<br />
The financial report has been prepared on the going concern basis, which contemplates the continuity<br />
of normal business activity and the realisation of assets and the settlement of liabilities in the normal<br />
course of business.<br />
The Group has incurred a loss for the year ended 30 June 2021 of A$8,528,318 (<strong>2020</strong>:<br />
A$54,328,360) and experienced net cash outflows from operating activities of A$885,013 (<strong>2020</strong>:<br />
A$31,756,314). As at 30 June 2021 the Group had cash on hand of A$19,897,420 (<strong>2020</strong>: A$6,660,568)<br />
and a net working capital surplus of A$22,031,954 (<strong>2020</strong>: A$6,147,783).<br />
In addition, the claim for the refundable R&D tax offset for FY21 is expected to be lodged and received<br />
within the December 2021 quarter and is estimated at A$4.4 million.<br />
The directors carefully manage discretionary expenditure in line with the Group’s cash flow forecast.<br />
Based on the matters described above, the Directors consider the going concern basis of preparation<br />
appropriate.<br />
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