Annual Report and Accounts 2013
Petra Diamonds Limited 121
Overview
Performance Review
Strategic Review
Sustainability
Corporate Governance
Group Accounts
25. Financial instruments
Exposures to currency, liquidity, market price, credit and interest rate risk arise in the normal course of the Group’s business.
This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
The Group uses financial instruments, in particular forward currency option contracts, to help manage foreign exchange risk.
The Directors review and agree policies for managing each of these risks. Details of the significant accounting policies and methods
adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised,
in respect of each class of financial asset, financial liability and equity instrument, are disclosed in note 1.
The details of the categories of financial instruments of the Group are as follows:
US$ million
2013
2012
Financial assets:
Loans and receivables:
– Non-current trade receivables
85.4
89.6
– Trade receivables
74.8
25.1
– Other receivables (excluding prepayments and VAT)
0.1
4.5
– Cash and cash equivalents – restricted
12.1
16.0
– Cash and cash equivalents – unrestricted
14.1
31.3
Available-for-sale financial assets (Level 1 valuation)
0.1
0.2
186.6
166.7
Financial liabilities:
Held at amortised cost:
– Non-current amounts owing to BEE partners
65.3
66.6
– Non-current loans and borrowings
109.9
46.9
– Current loans and borrowings
37.1
22.1
– Trade and other payables (includes deferred consideration)
64.7
49.0
277.0
184.6
There is no significant difference between the fair value of financial assets and liabilities and the carrying values set out in the table
above, noting that non-current receivables and payables bear interest. Available-for-sale financial assets are valued based on the share
price at the reporting date. A loss of US$0.1 million (30 June 2012: US$0.2 million) has been recognised in the Consolidated Statement
of Other Comprehensive Income in respect of the reduction of the available-for-sale financial assets to fair value.
The available-for-sale financial assets were valued using Level 1 of the financial instrument valuation hierarchy using quoted prices.
The currency profile of the Group’s financial assets and liabilities is as follows:
US$ million
2013
2012
Financial assets:
Botswana pula
0.5
0.8
Pounds sterling
8.3
2.5
South African Rand
144.9
141.4
US Dollar
32.9
22.0
186.6
166.7
Financial liabilities:
Botswana pula
0.7
Pound sterling
2.5
36.3
South African Rand
191.0
137.9
US Dollar
82.8
10.4
277.0
184.6
1...,113,114,115,116,117,118,119,120,121,122 124,125,126,127,128,129,130,131,132,133,...142