B. DIVIDEND REINVESTMENT
A Dividend Reinvestment Plan (DRP) operates which allows shareholders with ordinary shares to elect to receive their dividend
entitlement in the form of IAG shares. The price of DRP shares is the volume weighted average share price, less a discount if any
(determined by the Directors) calculated over the pricing period (which is at least five trading days) as determined by the Directors for
each dividend payment date.
The DRP for the 2015 interim dividend paid on 1 April 2015 was settled with the on-market purchase of 9.8 million shares priced at
$5.9916 per share (based on a daily volume weighted average price for 10 trading days from 9 March 2015 to 20 March 2015
inclusive, with no discount applied).
A copy of the terms and conditions for the DRP are available at
.
C. DIVIDEND NOT RECOGNISED AT REPORTING DATE
In addition to the above dividends, the Board determined to pay the following dividend after the reporting date but before finalisation of
this financial report and it has not been recognised in this financial report.
CENTS PER
SHARE
TOTAL
AMOUNT
EXPECTED
PAYMENT DATE
TAX RATE FOR
FRANKING
CREDIT
PERCENTAGE
FRANKED
$m
2015 final dividend
16.0
389 7 October 2015
30%
100%
On 21 August 2015 the Board determined the final dividend will be payable to shareholders on 7 October 2015.
The Company's DRP will operate for the final dividend by acquiring shares on-market with no discount applied. The DRP Issue Price will
be based on a volume weighted average share price as defined in the DRP terms. The last date for the receipt of an election notice
for participation in the DRP is 10 September 2015. Information about IAG’s DRP is available at
-
centre/dividends/reinvestment.
D. HISTORICAL SUMMARY
The table below provides an historical summary over the last ten years of dividend payments (cents per share) by aggregating
dividends based on the financial period for which they were declared and not the financial period in which they were recognised and
paid:
YEAR
ENDED
30 JUNE
2006
YEAR
ENDED
30 JUNE
2007
YEAR
ENDED
30 JUNE
2008
YEAR
ENDED
30 JUNE
2009
YEAR
ENDED
30 JUNE
2010
YEAR
ENDED
30 JUNE
2011
YEAR
ENDED
30 JUNE
2012
YEAR
ENDED
30 JUNE
2013
YEAR
ENDED
30 JUNE
2014
YEAR
ENDED
30 JUNE
2015
Interim dividend
13.5 13.5 13.5
4.0
8.5
9.0
5.0 11.0 13.0
13.0
Final dividend
16.0 16.0
9.0
6.0
4.5
7.0 12.0 25.0 26.0
16.0
Special dividend
12.5
-
-
-
-
-
-
-
-
-
E. DIVIDEND POLICY
The Group's dividend policy is to pay dividends equivalent to 50%-70% of reported cash earnings on a full year basis. Cash earnings
are defined as:
net profit after tax attributable to IAG shareholders;
plus amortisation and impairment of acquired identifiable intangible assets (post-tax); and
excluding any unusual items (non-recurring in nature, for example the expenses associated with restructuring) after tax.
F. RESTRICTIONS THAT MAY LIMIT THE PAYMENT OF DIVIDENDS
There are currently no restrictions on the payment of dividends by the Parent other than:
the payment of dividends is subject to provisions of the Corporations Act 2001 and IAG's constitution;
the payment of dividends generally being limited to profits subject to ongoing solvency obligations noting that under the APRA
Level 2 insurance group supervision requirements, IAG is required to obtain approval from APRA before payment of dividends on
ordinary shares that exceeds the Group’s after tax earnings as defined by APRA; and
no dividends can be paid and no returns of capital can be made on ordinary shares, if distributions are not paid on the convertible
preference shares or reset exchangeable securities, unless certain actions are taken by IAG. For further details refer to the
interest bearing liabilities note.
There are currently no restrictions on the payment of dividends from subsidiaries to the Parent other than:
the payment of dividends generally being limited to profits subject to ongoing solvency obligations of the subsidiary; and
for certain subsidiaries which are required to meet the statutory reserve and regulatory minimum capital requirements. In
particular, APRA has advised Australian general insurers that a general insurer under its supervision must obtain approval from it
before declaring a dividend if the general insurer has incurred a loss, or proposes to pay dividends which exceed the level of
profits earned in the current period.
68 IAG ANNUAL REPORT 2015
