IGO Interactive Annual Report 2018

Notes to the consolidated financial statements 30 June 2018 (continued) 17 Contributed equity (continued) (a) Share capital (continued) (b) Movements in ordinary share capital Details 2018 Number of shares 2018 $'000 2017 Number of shares 2017 $'000 Balance at beginning of financial year 586,747,023 1,878,469 511,422,871 1,601,458 Issue of shares under the Employee Incentive Plan 176,012 625 268,796 820 Share placement and share purchase plan issues - - 75,055,356 281,459 Less: Transaction costs arising on share issue (net of tax) - - - (5,268) Balance at end of financial year 586,923,035 1,879,094 586,747,023 1,878,469 (c) Capital management The Board’s policy is to preserve a strong balance sheet so as to maintain investor, creditor and market confidence, and to sustain ongoing and future development of the business. Demonstrating the Company's balance sheet strength are various financing and liquidity ratios, supported by strong EBITDA margins: 2018 2017 Current ratio (times) 2.9 1.7 Debt to equity 8% 12% Underlying EBITDA margin 44% 36% The Group's capital comprises equity, including reserves, and net debt/(cash). As at 30 June 2018 this totalled $1,782,997,000 (2017: $1,897,021,000), a decrease of 6% over 2017. Contributing to this decrease was the reduction in debt as a result of debt repayments of $57,142,000 during the year. The Company's capital management framework aims to respond to a dynamic commodity and investment cycle. To this end, the goals of the framework are to: • Ensure that the Company's operations are able to generate cash flows safely, at appropriate margins, and according to plan; • Provide a buffer from future potential adverse price movements as a result of the Company operating in a cyclical commodity price environment; • Raise and repay debt and invest in growth and replenish and acquire new assets; and • Raise capital and to repay capital to shareholders by way of dividends or capital returns. Dividend payments target a minimum 30% of net profit after tax, after excluding non-recurring items. None of the Group’s entities are currently subject to externally imposed capital requirements. There were no changes in the Group’s approach to capital management during the year. (d) Recognition and measurement Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. Every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Independence Group NL 32 96 — IGO ANNUAL REPORT 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2018