Notes to the Consolidated Financial Statements continued ANNUAL REPORT June 2026 Notes to the Consolidated Financial Statements 1. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report pertains to the consolidated entity of EQ Resources Limited (Parent entity) and its subsidiaries (the “Company”, “Group” or “EQR”) (b) Going Concern Basis for Preparation of Financial Statements These financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. To ensure the Group can meet its working capital, sustaining capital and expansionary capital expenditure requirements in the ordinary course of business, the Group routinely monitors its available cash and liquidity. For the full year ended 30 June 2026, the consolidated entity incurred a total profit after tax of A$7.1 million (2025: restated loss of A$39.2 million) and had a positive net working capital position of A$16.2 million. Whilst cash flows from operations for the full year were a negative A$5.6 million, cash generated from operations in the second half of the financial year approximately over A$11.0 million. In addition, the Group's external borrowings were refinanced during the year, reducing from A$43.6 million at 30 June 2025 to A$24.5 million at 30 June 2026, on a three-year term with Traxys Europe S.A., refer to Note 8(c)). Cash on hand at 30 June 2026 was A$28.2 million. (c) Basis of Preparation These general-purpose financial statements have been prepared in accordance with the requirements of the Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial report is presented in Australian currency. The consolidated entity operates on a for-profit basis. (i) Basis of measurement These financial statements have been prepared under the historical cost convention, except for investments which are measured at fair value. (ii) Compliance with IFRS The financial report of EQR complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). (iii) Critical accounting estimates The preparation of financial statements requires the use of certain critical accounting estimates and for management to exercise its judgement in the process of applying the Company'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 in note 2. EQ Resources Limited Annual Report 2026 49
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