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Whitehaven Coal Limited : Annual Report 2013
129 Whitehaven Coal Limited Annual Report 2013 Notes to the Financial Statements 30 June 2013 Australian Government's Carbon Pricing Mechanism The Australian Government's Clean Energy Act 2011 introduced a Carbon Pricing Mechanism beginning on July 1st, 2012. The carbon price has the potential to signi cantly impact the assumptions used for the purpose of the value in use calculations in asset impairment testing. The Group has re-assessed the potential impact in its impairment testing at 30 June 2013, and does not believe any impairment of assets would be required. The carrying amount of the assets that could be a ected by the implementation of the government's proposed emissions trading scheme as at 30 June 2013 are disclosed in note 19. 5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Overview The consolidated entity has exposure to the following risks from their use of nancial instruments: • market risk • credit risk • liquidity risk This note presents information about the consolidated entity's exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout this nancial report. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board has established the Audit and Risk Committee, which is responsible for developing and monitoring risk management policies. The Committee reports regularly to the Board on its activities. Risk management policies are established to identify and analyse the risks faced by the consolidated entity, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to re ect changes in market conditions and the consolidated entity's activities. The consolidated entity, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit and Risk Management Committee oversees how management monitors compliance with the consolidated entity's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the consolidated entity. Capital management The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market con dence and to sustain future development of the business. The consolidated entity de nes capital as total shareholders' equity and debt. The Board monitors the capital structure on a regular basis including the gearing ratio and level of dividends paid to ordinary shareholders. The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security a orded by a sound capital position. There were no changes in the consolidated entity's approach to capital management during the year. The Group's gearing ratio is calculated as net debt divided by total capital plus net debt. In thousands of AUD 2013 2012 Interest-bearing loans and borrowings 582,080 489,446 Less: cash and cash equivalents (110,516) (513,625) Net debt 471,564 (24,179) Equity 3,297,276 3,424,268 Total capital 3,297,276 3,424,268 Capital and net debt 3,768,840 3,400,089 Gearing ratio 13% 0%
Annual Report 2012