2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 18 Contributed equity Notes 2021 $'000 2020 $'000 Ordinary shares 2,651,223 1,897,126 Treasury shares (2,649) - 2,648,574 1,897,126 (a) Ordinary shares Movements in ordinary share capital: Details 2021 Number of shares 2021 $'000 2020 Number of shares 2020 $'000 Balance at beginning of financial year 590,797,034 1,897,126 590,477,819 1,895,855 Share placement and entitlement offers 166,470,779 765,766 - - Less: Transaction costs arising on share placement (net of tax) - (11,669) - - Issue of shares under the Employee Incentive Plan - - 319,215 1,271 Balance at end of financial year 757,267,813 2,651,223 590,797,034 1,897,126 (b) Treasury shares Treasury shares are shares in IGO Limited that are held by the Company's Employee Share Trust for the purpose of issuing shares under the IGO Employee Incentive Plan (refer to note 28 for further information). Shares issued to employees are recognised on a first-in-first-out basis. Movements in treasury shares: 2021 Number of shares 2021 $'000 2021 Number of shares 2021 $'000 Balance at beginning of financial year - - - - Acquisition of shares by the Trust (average price: $4.95 per share) (1,164,600) (5,764) - - Issue of deferred shares under the Company's Employee Incentive Plan 1,028,074 3,115 - - Balance at end of financial year (136,526) (2,649) - - (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: 2021 2020 Current ratio (times) 3.3 6.2 Debt to equity -% 3% Underlying EBITDA margin 52% 52% The Group's capital comprises equity, including reserves, and net debt/(cash). As at 30 June 2021 this totalled $2,671,363,000 (2020: $1,472,643,000), an increase of 81% over 2020. Contributing to this increase was a share placement and institutional entitlement offer, net of costs, totalling $749,097,000, an ongoing reduction of debt as a result of debt repayments of $57,145,000 and the continued strong cash flow generation during the year from deploying our existing capital. IGO Limited 36 Notes to The Consolidated Financial Statements 30 June 2021 106 — IGO ANNUAL REPORT 2021