XML 34 R17.htm IDEA: XBRL DOCUMENT v3.21.2
INVESTMENTS IN REHABILITATION OBLIGATION FUNDS
 12 Months Ended
Jun. 30, 2021
Investments in rehabilitation obligation funds [Abstract]  
Investments in rehabilitation obligation funds
12
 
INVESTMENTS IN REHABILITATION
 
OBLIGATION
 
FUNDS
ACCOUNTING POLICIES
Cash and cash equivalents in environmental rehabilitation trusts
Cash
 
and
 
cash
 
equivalents
 
included
 
in
 
environmental
 
rehabilitation
 
trusts
 
comprise
 
low-risk,
 
interest-bearing
 
cash
 
and
 
cash
equivalents and are non-derivative financial assets categorised as financial assets measured at amortised cost.
Cash and cash
 
equivalents are initially
 
measured at fair
 
value. Subsequent to
 
initial recognition, cash
 
and cash equivalents
 
are
measured at amortised cost, which is equivalent to their fair value.
The
 
cash
 
and
 
cash
 
equivalents
 
in
 
environmental
 
rehabilitation
 
trusts
 
are
 
for
 
the
 
sole
 
use
 
of
 
material
 
future
 
environmental
rehabilitation payments and are therefore included in non-current assets.
Reimbursive right for environmental rehabilitation guarantees
Funds held in the cell captive that secure the environmental rehabilitation guarantees issued are recognised as a right to receive
a reimbursement and are
 
measured at the
 
lower of the
 
amount of the
 
consolidated environmental rehabilitation liability
 
recognised
and the consolidated fair value of the fund assets.
Changes in the carrying value
 
of the fund assets, other
 
than those resulting from contributions and
 
payments, are recognised in
finance income.
The funds held in the
 
cell captive are for the
 
sole use of material future environmental
 
rehabilitation payments and are
 
therefore
included in non-current assets
Funding of environmental rehabilitation activities
(refer note 11)
Environmental
 
rehabilitation
 
payments
 
to
 
reduce
 
the
 
environmental
 
rehabilitation
 
obligations
 
and
 
ongoing
 
rehabilitation
expenditure are mostly funded by cash generated from operations.
 
Guardrisk Insurance Company Limited ("
Guardrisk
") has guarantees in issue amounting
 
to R
430.1
 
million (2020: R
427.3
 
million)
to the Department of Mineral Resources and Energy ("
DMRE
") on behalf of DRDGOLD related to the environmental
 
obligations.
The funds in the cell captive serve as collateral for these guarantees.
Amounts in R million
Note
2021
2020
Cash and cash equivalents in environmental rehabilitation trust funds
564.7
542.2
 
Opening balance
542.2
508.9
 
Growth
6
22.5
33.3
Reimbursive right for environmental rehabilitation guarantees
87.5
83.8
 
Opening balance
83.8
78.6
 
Growth
6
3.7
5.2
652.2
626.0
CREDIT RISK
The Group
 
is exposed
 
to credit
 
risk on
 
the total
 
carrying value
 
of the
 
investments held
 
in the
 
environmental rehabilitation
 
trust
funds.
The Group manages its exposure
 
to credit risk by diversifying these
 
investments across a number of major
 
financial institutions,
as well as investing funds in low-risk, interest-bearing cash and cash equivalents.
MARKET RISK
Interest rate risk
A change of 100 basis points (bp) in interest rates at the reporting date would have increased/(decreased) equity and profit/(loss)
by the amounts shown below. This analysis assumes that all other variables, in particular the balance of the funds, remain
constant. The analysis excludes income tax.
Amounts in R million
2021
2020
100
bp increase
5.6
5.4
100bp (decrease)
(5.6)
(5.4)
FAIR VALUE
 
OF FINANCIAL INSTRUMENTS
The fair
 
value of
 
the cash
 
and cash
 
equivalents in
 
the environmental
 
rehabilitation trust
 
funds approximate
 
their carrying
 
value
due to their short-term maturities.