IGO Interactive Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2019 Notes to the consolidated financial statements 30 June 2019 (continued) 17 Contributed equity (continued) (b) Movements in ordinary share capital Details 2019 Number of shares 2019 $'000 2018 Number of shares 2018 $'000 Balance at beginning of financial year 586,923,035 1,879,094 586,747,023 1,878,469 Issue of shares under the Employee Incentive Plan 459,376 1,036 176,012 625 Issue of shares on acquisition of Southern Hills Tenements 3,095,408 15,725 - - Balance at end of financial year 590,477,819 1,895,855 586,923,035 1,879,094 (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: 2019 2018 Current ratio (times) 4.4 2.9 Debt to equity 5% 8% Underlying EBITDA margin 43% 44% The Group's capital comprises equity, including reserves, and net debt/(cash). As at 30 June 2019 this totalled $1,586,568,000 (2018: $1,782,997,000), a decrease of 11% over 2018. Contributing to this decrease was the reduction in debt as a result of debt repayments of $57,142,000 during the year and the strong cash flow generation during the year from deploying our existing capital. 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 in accordance with the Company's capital allocation policy. This policy targets the return of between 15 and 25 percent of free cash flow to shareholders with the policy to be reviewed every two years based on financial results, outlook for commodity prices, long-term growth capital requirements for the business and balance sheet strength. 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 34 96 — IGO ANNUAL REPORT 2019