NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Impact Minerals Ltd Annual Report 2021 103 NOTE 2: STATEMENT OF COMPLIANCE (Continued) The Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting policies a) Basis of measurement Historical cost convention These consolidated financial statements have been prepared under the historical cost convention, except where stated. Critical accounting estimates The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed where appropriate. b) Going concern The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Consolidated Group incurred a loss for the year of $4,760,174 (2020: loss of $1,685,165); included in this loss were impairment expenses of $3,712,774 (2020: $113,146). During the year the Consolidated Group incurred net cash outflows from operating and investing activities of $817,796 (2020: $448,257). As at 30 June 2021 the Consolidated Group had a cash balance of $3,415,778 (2020: $2,431,426). The ability of the Consolidated Group to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflow in line with available funds. These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern. In the event the above matters are not achieved, the Company will be required to raise funds for working capital from debt or equity sources. Management have prepared a cash flow forecast, which indicates that the Consolidated Group will have sufficient cash flows to meet all commitments and working capital requirements for the 12 month period from the date of signing this financial report. Based on the cash flow forecast and other factors referred to above, the Directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company’s history of raising capital to date, the Directors are confident of the Company’s ability to raise additional funds as and when they are required.