IGO Interactive Annual Report 2020

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2020 About this report IGO Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Group are described in the directors' report. The financial report of IGO Limited (the Company) and its subsidiaries (collectively, the Group) for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the Directors on 25 August 2020. Basis of preparation This financial report is a general purpose financial report, prepared by a for-profit entity, which: • Has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB); • Has been prepared on a historical cost basis, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit or loss and certain classes of property, plant and equipment; • Is presented in Australian dollars with values rounded to the nearest thousand dollars or in certain cases, the nearest dollar, in accordance with the Australian Securities and Investments Commission 'ASIC Corporation Legislative Instrument 2016/191'; • Presents comparative information where required for consistency with the current year's presentation; and • Adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July 2019 as disclosed in note 31. Key estimates and judgements In the process of applying the Group's accounting policies, management has made a number of judgements and applied estimates of future events. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in the following notes: Note 2 Revenue Note 5 Income tax Note 8 Trade and other receivables Note 9 Inventories Note 12 Provisions Note 13 Property, plant and equipment Note 14 Leases Note 15 Mine properties Note 16 Exploration and evaluation expenditure Note 26 Share-based payments Coronavirus (COVID-19) pandemic The COVID-19 pandemic has developed rapidly in 2020, with a significant number of cases. Measures taken by various governments to contain the virus have affected economic activity. We have taken a number of measures to monitor and mitigate the effects of COVID-19, such as safety and health measures for our people and securing the supply of materials that are essential to our production process. At this stage, the impact on our business and results has not been significant and, based on our experience to date, we expect this to remain the case. We will continue to follow the various government policies and advice and, in parallel, we will do our utmost to continue our operations in the best and safest way possible without jeopardising the health of our people. Basis of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities (subsidiaries) at year end is contained in note 23. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. IGO Limited 6 t t i r rt I Li ited is a co pany li ited by shares incorporated and do iciled in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the roup are described in the directors' report. The financial report of I Li ited (the Co pany) and its subsidiaries (collectively, the roup) for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the Directors on 25 August 2020. Basis of preparation This financial report is a general purpose financial report, prepared by a for-profit entity, which: • Has been prepared in accordance with the require ents of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronounce ents of the Australian Accounting Standards Board (AASB) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB); • Has been prepared on a historical cost basis, as odified by the revaluation of financial assets and liabilities (including derivative instru ents) at fair value through profit or loss and certain classes of property, plant and equip ent; • Is presented in Australian dollars with values rounded to the nearest thousand dollars or in certain cases, the nearest dollar, in accordance with the Australian Securities and Invest ents Co ission 'ASIC Corporation Legislative Instrument 2016/191'; • Presents co parative infor ation where required for consistency with the current year's presentation; and • Adopts all new and a ended Accounting Standards and Interpretations issued by the AASB that are relevant to the operations of the roup and effective for reporting periods beginning on or after 1 July 2019 as disclosed in note 31. Key esti ates and judge ents In the process of applying the roup's accounting policies, manage ent has ade a nu ber of judge ents and applied esti ates of future events. The areas involving a higher degree of judge ent or co plexity, or areas where assu ptions and esti ates are significant to the financial state ents, are disclosed in the following notes: Note 2 Revenue Note 5 Inco e tax Note 8 Trade and other receivables Note 9 Inventories Note 12 Provisions Note 13 Property, plant and equip ent Note 14 Leases Note 15 Mine properties Note 16 Exploration and evaluation expenditure Note 26 Share-based pay ents Coronavirus (COVID-19) pande ic The COVID-19 pande ic has developed rapidly in 2020, with a significant nu ber of cases. easures taken by various govern ents to contain the virus have affected econo ic activity. e have taken a nu ber of easures to onitor and itigate the effects of COVID-19, such as safety and health easures for our people and securing the supply of aterials that are essential to our production process. At this stage, the i pact on our business and results has not been significant and, based on our experience to date, we expect this to re ain the case. e will continue to follow the various govern ent policies and advice and, in parallel, we will do our ut ost to continue our operations in the best and safest way possible without jeopardising the health of our people. Basis of consolidation The consolidated financial state ents co prise the financial state ents of the roup. A list of controlled entities (subsidiaries) at year end is contained in note 23. The financial state ents of subsidiaries are prepared for the sa e reporting period as the parent entity, using consistent accounting policies. I Li ited 6 Basis of consolidation ( ontinued) In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and profit or losses resulting from intra-Group transactions have been eliminated. Subsidiaries are consolidated from the date on which control is obtained to the date on which control is disposed. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. CONTENTS OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PAGE FINANCIAL PERFORMANCE 80 1 Segment information 80 2 Revenue 83 3 Other income 84 4 Expenses and losses 84 5 Income tax 85 6 Earnings per share 88 WORKING CAPITAL AND PROVISIONS 89 7 Cash and cash equivalents 89 8 Trade and other receivables 90 9 Inventories 91 10 Financial assets at fair value through profit or loss 92 11 Trade and other payables 92 12 Provisions 92 INVESTED CAPITAL 94 13 Property, plant and equipment 94 14 Leases 95 15 Mine properties 98 16 Exploration and evaluation 100 CAPITAL STRUCTURE AND FINANCING ACTIVITIES 101 17 Borrowings 101 18 Contributed equity 102 19 Reserves and retained earnings/(accumulated losses) 104 20 Dividends paid and proposed 105 RISK 106 21 Derivatives 106 22 Financial risk management 107 GROUP STRUCTURE 115 23 Subsidiaries 115 OTHER INFORMATION 116 24 Commitments and contingencies 116 25 Events occurring after the reporting period 117 26 Share-based payments 117 27 Related party transactions 121 28 Parent entity financial information 122 29 Deed of cross guarantee 123 30 Remuneration of auditors 125 31 Summary of significant accounting policies 125 78 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 79