b'CENTAURUS METALS ANNUAL REPORT 2023 Financial Report31 December 2023InventoryInventory comprises of diesel fuel and is recognised and valued at the lower of cost or net realisable value (NRV). NRV is the estimated future selling price, less the estimated costs necessary to make the sale. Cost represents weighted average cost of the diesel on hand. Impairmenta)Non-derivative Financial Assets A loss allowance for expected credit loss (ECL) is recognised on financial assets measured at amortised cost. The loss allowances are measured at an amount equal to lifetime ECLs, except for, bank balances which are measured at 12-month ECLs, for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Groups historical experience and informed credit assessment and including forward-looking information.The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Group considers a financial asset to be in default when the financial asset is more than 90 days past due.Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.Measurement of ECLs ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset. Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised costs are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.Presentation of allowance for ECL in the statement of financial position Loss allowances for financial assets measured at amortised costs are deducted from the gross carrying amount of the assets. Write-off The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. b)Non-financial Assets The carrying amounts of the Groups non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determinewhetherthere is any indication of impairment.If any such indication exists, then the assets recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell.In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets.The group of assets is referred to as the Cash Generating Unit or CGU.The Groups corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. Page 34 of 54 60 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 61'