Notes to the consolidated financial statements 30 June 2022 (continued) 17 Borrowings (continued) (c) Financing arrangements The Group had the following financing arrangements in place at the reporting date: 2022 $M 2021 $M Total facilities Corporate debt facility 900.0 450.0 Asset finance facility 4.0 - Contingent instrument facility1 1.3 1.5 Security bond facility 0.5 - 905.8 451.5 Facilities used as at reporting date Corporate debt facility 900.0 - Asset finance facility 1.4 - Contingent instrument facility 1.3 1.5 Security bond facility 0.5 - 903.2 1.5 Facilities unused as at reporting date Corporate debt facility - 450.0 Asset finance facility 2.6 - 2.6 450.0 1. This facility provides financial backing in relation to non-performance of third party guarantee requirements. (d) Recognition and measurement (i) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs and amortised over the period of the remaining facility. (ii) Borrowing costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other borrowing costs are expensed in the period in which they are incurred. Notes to the consolidated financial statements 30 June 2022 (continued) 18 Contributed equity 2022 $M 2021 $M Ordinary shares 2,651.2 2,651.2 Treasury shares (9.4) (2.6) 2,641.8 2,648.6 (a) Ordinary shares Movements in ordinary share capital: Details 2022 Number of shares 2022 $M 2021 Number of shares 2021 $M Balance at beginning of financial year 757,267,813 2,651.2 590,797,034 1,897.1 Share placement and entitlement offers - - 166,470,779 765.8 Less: Transaction costs arising on share placement (net of tax) - - - (11.7) Balance at end of financial year 757,267,813 2,651.2 757,267,813 2,651.2 (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 29 for further information). Shares issued to employees are recognised on a first-in-first-out basis. Movements in treasury shares: 2022 Number of shares 2022 $M 2021 Number of shares 2021 $M Balance at beginning of financial year (136,526) (2.6) - - Acquisition of shares by the Trust (1,151,725) (10.1) (1,164,600) (5.8) Issue of deferred shares under the Company's Employee Incentive Plan 967,861 3.3 1,028,074 3.2 Balance at end of financial year (320,390) (9.4) (136,526) (2.6) The average price per share of the shares acquired by the Trust during the year was $8.75 (2021: $4.95 per share). (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, as follows: 2022 2021 Current ratio (times) 1.7 3.3 Debt to equity 34% - The Group's capital comprises equity, including reserves, and net debt/(cash). As at 30 June 2022 this totalled $3,968.0 million (2021: $2,671.4 million), an increase of 49% over 2021. Contributing to this increase was the drawdown of debt to fund the acquisition of Western Areas Limited during the year, offset by the continued strong cash flow generation during the year from deploying our existing capital. Notes to the consolidated financial statements 30 June 2022 Notes to the consolidated financial statements 30 June 2022 120 — IGO ANNUAL REPORT 2022 IGO ANNUAL REPORT 2022 — 121
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