IGO Interactive Annual Report 2020

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2020 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2020 Notes to the consolidated financial statements 30 June 2020 (continued) 5 Income tax (continued) (i) Significant estimates In addition, deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future forecast taxable profits are available to utilise those temporary differences and losses, and the tax losses continue to be available having regard to the relevant tax legislation associated with their recoupment. The Australian consolidated tax group has recognised a deferred tax asset relating to carry forward tax losses of $91,730,000 at 30 June 2020 (2019: $154,388,000). The utilisation of this deferred tax asset amount depends upon future taxable amounts in excess of profits arising from the reversal of temporary differences. The Group believes this amount to be recoverable based on taxable income projections. 6 Earnings per share (a) Earnings used in calculating earnings per share Profit used in calculating basic and diluted earnings per share attributable to ordinary equity holders of the parent is $155,093,000 (2019: $76,085,000). (b) Weighted average number of shares used as the denominator 2020 Number 2019 Number Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 590,747,969 590,335,278 Adjustments for calculation of diluted earnings per share: Share rights 2,894,952 2,524,470 Weighted average number of ordinary and potential ordinary shares used as the denominator in calculating diluted earnings per share 593,642,921 592,859,748 (c) Information concerning the classification of securities Share rights Performance rights granted to Executives and employees under the Company's Employee Incentive Plan and any outstanding service rights are included in the calculation of diluted earnings per share as they could potentially dilute basic earnings per share in the future. The share rights are not included in the determination of basic earnings per share. Further information about the share rights is provided in note 26. (d) Calculation of earnings per share (i) Basic earnings per share Basic earnings per share is calculated by dividing: • the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares, • by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares. (ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: • the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and • the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. IGO Limited 18 Notes to the consolidated financial statements 30 June 2020 (continued) Working Capital and Provisions This section of the notes provides further information about the Group's working capital and provisions, including accounting policies and key judgements and estimates relevant to understanding these items. 7 Cash and cash equivalents 2020 $'000 2019 $'000 Cash at bank and in hand 490,312 108,208 Deposits at call 20,000 240,000 510,312 348,208 The Group has cash balances of $7,396,000 (2019: $1,633,000) not generally available for use as the balances are held by the Tropicana Joint Venture and may only be used in relation to joint venture expenditure. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 22. (a) Reconciliation of profit after income tax to net cash inflow from operating activities 2020 $'000 2019 $'000 Profit for the period 155,093 76,085 Depreciation and amortisation 243,633 237,118 Impairment of exploration and evaluation expenditure 1,018 - Net gain on sale of non-current assets (3,494) (2,636) Fair value of movement of financial investments (33,207) 6,915 Non-cash employee benefits expense - share-based payments 4,489 3,123 Gain on disposal of subsidiaries - (2,587) Amortisation of borrowing expenses 919 916 Amortisation of lease incentive (78) (79) Foreign exchange losses (gains) on cash balances 3,110 (784) Change in fair value measurement of receivables (1,065) (1,574) Change in operating assets and liabilities: (Increase) decrease in trade receivables (21,215) 25,371 (Increase) in inventories (20,713) (7,375) Decrease in deferred tax assets 60,503 24,204 (Increase) decrease in other operating receivables and prepayments (116) 9,855 Increase (decrease) in trade and other payables 1,120 (2,080) Increase in deferred tax liabilities 3,916 5,159 Increase in other provisions 3,604 679 Net cash inflow from operating activities 397,517 372,310 (b) Non-cash investing and financing activities During the current year, the Group had acquisitions of right-of-use assets totalling $12,577,000 (2019: $nil). During the previous year, the Company issued 3,095,408 shares totalling $15,725,000 for the acquisition of the Southern Hills tenements (refer to note 18(b)). The Company also received 7,777,778 shares in Mincor Resources NL totalling $3,500,000 relating to the sale of the Long Operation during the previous year. IGO Limited 19 88 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 89