2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 14 Leases (a) Amounts recognised in the balance sheet The balance sheet shows the following amounts relating to leases: 2021 $'000 2020 $'000 Right-of-use assets Buildings 5,505 5,339 Mining plant and equipment 19,206 33,657 24,711 38,996 Lease liabilities Current 4,421 6,235 Non-current 20,627 33,550 25,048 39,785 Additions to the right-of use assets during the year were $1,028,000 (2020: $12,577,000). (b) Amounts recognised in the statement of profit or loss The statement of profit or loss includes the following amounts relating to leases: 2021 $'000 2020 $'000 Depreciation charge of right-of-use assets Buildings 863 1,534 Mining plant and equipment - continuing operations 3,841 3,415 Mining plant and equipment - discontinued operation 1,389 1,516 6,093 6,465 Interest expense (included in borrowing and finance costs) - continuing operations 1,051 1,033 Interest expense (included in borrowing and finance costs) - discontinued operation 400 490 Total interest expense 1,451 1,523 Space The total cash outflow for leases for the financial year to 30 June 2021 was $7,582,000 (2020: $7,199,000). (c) Recognition and measurement The Group leases office space and equipment. Rental contracts are typically made for fixed periods of 5 to 15 years, but may have extension options as described below. Contracts may contain both lease and non-lease components. The Group allocated the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. Lease liabilities Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable; IGO Limited 29 Notes to The Consolidated Financial Statements 30 June 2021 IGO ANNUAL REPORT 2021 — 99