Annual Report and Accounts 2013
Petra Diamonds Limited 125
Overview
Performance Review
Strategic Review
Sustainability
Corporate Governance
Group Accounts
25. Financial instruments
continued
Other market price risk
The Group generates revenue from the sale of rough and polished diamonds. The significant number of variables involved in
determining the selling prices of rough diamonds, such as the uniqueness of each individual rough stone, the content of the rough
diamond parcel and the ruling US$/R spot rate at the date of sale, makes it difficult to accurately extrapolate the impact the
fluctuations in diamond prices would have on the Group’s revenue.
Capital disclosures
Capital is defined by the Group to be the capital and reserves attributable to equity holders of the parent company.
The Group’s objectives when maintaining capital are:
$
to safeguard the ability of the entity to continue as a going concern; and
$
to provide an adequate return to shareholders.
The Group monitors capital on the basis of the debt to equity ratio. This ratio is calculated as net debt to equity. Net debt is calculated
as total liabilities (excluding provisions and deferred tax liabilities) less restricted and unrestricted cash and cash equivalents.
Equity comprises all components of equity attributable to equity holders of the parent company.
The debt to equity ratios at 30 June 2013 and 30 June 2012 are as follows:
US$ million
2013
2012
Total debt
277.0
184.6
Cash and cash equivalents
(26.2)
(47.3)
Net debt
250.8
137.3
Total equity attributable to equity holders of the parent company
571.1
637.6
Net debt to equity ratio
0.44:1
0.21:1
The Group manages its capital structure by the issue of ordinary shares, raising debt finance where appropriate, and managing
Group cash and cash equivalents.
26. Contingent liabilities
Environmental
The controlled entities of the Company provide for all known environmental liabilities. While the Directors believe that, based
upon current information, the current provisions for environmental rehabilitation are adequate, there can be no assurance that
new material provisions will not be required as a result of new information or regulatory requirements with respect to known
mining operations or identification of new rehabilitation obligations at other mine operations.
27. Share-based payments
The Company has established share plans to address the retention of Directors and Senior Management over the period to FY 2016,
which is a pivotal period as the expansion programmes are rolled out across the Group. The total share-based payment charge of
US$3.9 million (30 June 2012: US$1.0 million) comprises US$3.3 million (30 June 2012: US$1.0 million) charged to the income
statement and US$0.6 million (30 June 2012: US$nil) capitalised within property, plant and equipment.
Share grants to Directors: 2011 LTSP, 2012 PSP and deferred awards
The share-based payment awards are considered to be equity settled, albeit they can be cash settled at the Company’s option.
The fair value of the 2011 LTSP and 2012 PSP granted during the current and prior year and the assumptions used in the Monte Carlo
model are as follows:
2011 LTSP – non-market-based subject to performance conditions
2012
Fair value
133.0p
Grant date
15 May 2012
Share price at grant date
133.0p
Life of award
3.4 years–4.4 years
Expected dividends
1...,117,118,119,120,121,122,123,124,125,126 128,129,130,131,132,133,134,135,136,137,...142