2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 19 Reserves and retained earnings (continued) (a) Reserves (continued) (i) Movements in reserves The following table shows a breakdown of the movements in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table. Distributable profits reserve $'000 Hedging reserve $'000 Share- based payments reserve $'000 Foreign currency translation reserve $'000 Total $'000 Balance at 1 July 2020 - 244 18,645 (15) 18,874 Revaluation - gross - 2,403 - - 2,403 Deferred tax - (721) - - (721) Currency translation differences - current period - - - 63 63 Reclassification to profit or loss on disposal of subsidiary - - - (48) (48) Share-based payment expenses - - 4,917 - 4,917 Issue of shares under the Employee Incentive Plan - - (3,115) - (3,115) Transfer of 2021 profits from retained earnings 483,171 - - - 483,171 Balance at 30 June 2021 483,171 1,926 20,447 - 505,544 Balance at 1 July 2019 - 339 15,427 11 15,777 Revaluation - gross - (2,006) - - (2,006) Deferred tax - 602 - - 602 Transfer to profit or loss - gross - 1,870 - - 1,870 Deferred tax - (561) - - (561) Currency translation differences - current period - - - (26) (26) Share-based payment expenses - - 4,489 - 4,489 Issue of shares under the Employee Incentive Plan - - (1,271) - (1,271) Balance at 30 June 2020 - 244 18,645 (15) 18,874 (ii) Nature and purpose of reserves Distributable profits reserve The distributable profits reserve is used to record profits generated by the Parent entity, IGO Limited for the purpose of future dividend distributions by the Company. As approved by resolution of the Directors on 30 June 2021, current period profits of $483,171,000 were transferred to the reserve that was established during the period. Hedging reserve The hedging reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss. Share-based payments reserve The share-based payments reserve is used to record the value of share-based payments provided to employees, including key management personnel, as part of their remuneration. Refer to note 28 for further details of these plans. IGO Limited 38 Notes to the consolidated financial statements 30 June 2021 (continued) 19 Reserves and retained earnings (continued) (a) Reserves (continu d) (ii) Nature and purpose of reserves (continued) Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. (b) Retained earnings Movements in retained earnings were as follows: Notes 2021 $'000 2020 $'000 Balance at beginning of financial year 9,809 (62,572) Net profit for the period 548,661 155,093 Dividends paid during the period 20 (29,540) (82,712) Transfer to distributable profits reserve 19(a) (483,171) - Notes to The Consolidated Financial Statements 30 June 2021 108 — IGO ANNUAL REPORT 2021