Notes to the reviewed condensed group interim financial statements

Exxaro, a public company incorporated in South Africa, is a diversified resources group with interests in the coal (controlled and non-controlled), energy (controlled and non-controlled) and ferrous (controlled and non-controlled) markets. These reviewed condensed group interim financial statements as at and for the six-month period ended 30 June 2021 (interim financial statements) comprise the company and its subsidiaries (together referred to as the group) and the group's interest in associates and joint ventures.

2.1 Statement of compliance

The interim financial statements have been prepared in accordance with IFRS (as issued by the IASB), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides (as issued by the Accounting Practices Committee), Financial Reporting Pronouncements (as issued by the Financial Reporting Standards Council), the requirements of the Companies Act of South Africa and the JSE Listings Requirements.

The interim financial statements have been prepared under the supervision of Mr PA Koppeschaar CA(SA), SAICA registration number: 00038621.

The interim financial statements should be read in conjunction with the group annual financial statements as at and for the year ended 31 December 2020, which have been prepared in accordance with IFRS. The interim financial statements have been prepared on the historical cost basis, except for financial instruments, share-based payments and biological assets, which are measured at fair value.

The interim financial statements were authorised for issue by the board of directors on 10 August 2021.

2.2 Judgements and estimates

Management made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The significant judgements and the key source of estimation uncertainty were similar to those applied to the group annual financial statements as at and for the year ended 31 December 2020.

The accounting policies applied are consistent with those of the previous financial year. The policy for recognising and measuring income taxes in the interim reporting period is consistent with that applied in the previous interim reporting period as described in 3.1 below. A number of new or amended standards became effective for the current reporting period. The group did not have to change its accounting policies nor make retrospective adjustments as a result of adopting these standards.

3.1 Income tax

Income tax expense is recognised based on management's estimate of the weighted average effective annual tax rate expected for the full financial year. As such, the effective tax rate used in the interim financial statements may differ from management's estimate of the effective tax rate for the group annual financial statements. The estimated weighted average effective annual tax rate used for the six-month period ended 30 June 2021 is 8.4%, compared to 11.1% for the six-month period ended 30 June 2020.

The main reconciling items between the standard tax rate of 28% and the effective tax rate result from:

• Share of income of equity-accounted investments and dividend income (-16.2%)
• Exempt income and distributions to beneficiaries of the ESOP Trust (-0.5%)
• Share based-payment deductions (-0.6%)
• Translation differences recycled to profit or loss on disposal of investment in foreign associate (-2.1%)
• Capital gains (0.1%) from:
  • the divestment of the Tronox investments (-0.7%)
  • a deemed capital gain (0.8%) on the intercompany sale and purchase of the RBCT shares between ECC (seller) and Exxaro Coal Proprietary Limited (purchaser) in 2017 as a result of the de-grouping corporate tax rule triggered by the ECC group leaving the Exxaro group of companies as which is expected to take place in the second half of 2021
• Non-residents tax (0.1%)
• Prior year tax adjustments (-0.2%)
• Deferred tax assets not recognised (0.1%)
• Other deductions (-0.3%).

3.2 Impact of new, amended or revised standards issued but not yet effective

New accounting standards, amendments to accounting standards and interpretations issued, that are relevant to the group, but not yet effective on 30 June 2021 have not been early adopted. The group continuously evaluates the impact of these standards and amendments.

3.3 Impact of COVID-19 on financial reporting

Management assessed the impact that the COVID-19 pandemic had on financial reporting, (in particular revenue, inventory, impairment of non-current assets and allowances for ECLs) and concluded that it was not material.

From a solvency and liquidity perspective, in addition to operational measures implemented to combat the spread of COVID-19 and the drawdown on the new facility, further downside scenarios have been used to stress test our position. The group was not at risk of breaching its debt covenants. As a result, management and our board of directors believe that the group has sufficient liquidity to withstand an interruption to our operations and will remain a going concern for the foreseeable future.

The condensed group statement of comprehensive income (and related notes) and condensed group statement of financial position (and related notes) have been re-presented as follows:

4.1 Reporting period: 30 June 2020

The 30 June 2020 reporting period was re-presented for the following items:

Finalisation of the Cennergi business combination

The accounting for the acquisition of Cennergi in terms of IFRS 3 Business Combinations was provisionally reported on for the six-month period ended 30 June 2020. Subsequently, the following changes to the purchase price allocation were made:

• Recognition of non-controlling interests of R147 million for the existing in-substance share options held by Cennergi's BEE minorities
• Resultant increase in goodwill of R147 million to R521 million (previously reported: R374 million).

At 31 December 2020 the accounting for the acquisition of Cennergi was concluded.

The impact of the re-presentation was as follows:

	Previously presented	Re-presented	Impact
Condensed group statement of financial position
Intangible assets: Goodwill (Rm)	3 032	3 179	147
Non-controlling interests (Rm)	8 914	9 061	(147)

Non-current assets classified as held-for-sale and discontinued operations

• The investment in Black Mountain no longer met the criteria to be classified as a non-current asset held-for-sale nor a discontinued operation due to the suspension of the sales process in December 2020. This resulted in the retrospective application of the equity method.
• The investment in Tronox SA has been identified as a discontinued operation (refer note 8).

The impact of the re-presentation was as follows:

	Previously presented	Re-presented	Impact
Condensed group statement of comprehensive income
Share of income of equity-accounted investments (Rm)	2 355	2 260	(95)
Profit for the period from discontinued operations (Rm)	36	131	95
Attributable earnings per share
Continuing operations
– Basic (cents)	1 713	1 687	(26)
– Diluted (cents)	1 713	1 687	(26)
Discontinued operations
– Basic (cents)	14	40	26
– Diluted (cents)	14	40	26
Condensed group statement of financial position
Equity-accounted investments (Rm)	17 438	18 310	872
Non-current assets held-for-sale (Rm)	2 613	1 741	(872)

4.2 Reporting period: 31 December 2020

The 31 December 2020 reporting period was re-presented for the following item:

Discontinued operations

The investment in Tronox SA has been identified as a discontinued operation (refer note 8).

The impact of the re-presentation was as follows:

	Previously presented	Re-presented	Impact
Condensed group statement of comprehensive income
Share of income of equity-accounted investments (Rm)	6 411	6 204	(207)
Profit for the period from discontinued operations (Rm)	69	276	207
Attributable earnings per share
Continuing operations
– Basic (cents)	2 880	2 817	(63)
– Diluted (cents)	2 880	2 817	(63)
Discontinued operations
– Basic (cents)	22	85	63
– Diluted (cents)	22	85	63

	Gross  Rm	Tax  Rm	Non-  controlling  interest  Rm	Net  Rm
6 months ended 30 June 2021 (Reviewed)
Profit attributable to owners of the parent				8 224
Adjusted for:	(2 210)	376	414	(1 420)
– IAS 16 Net losses on disposal of property, plant and equipment	10	(4)	(1)	5
– IAS 21 Net gains on translation differences recycled to profit or loss on disposal of investment in foreign associate	(876)		197	(679)
– IAS 28 Net gains on disposal of associates	(1 339)	379	217	(743)
– IAS 28 Share of equity-accounted investments' separately identifiable remeasurements	(5)	1	1	(3)
Headline earnings				6 804
Continuing operations				6 748
Discontinued operations				56
6 months ended 30 June 2020 (Reviewed) (Re-presented)1
Profit attributable to owners of the parent				4 334
Adjusted for:	(1 319)	3	297	(1 019)
– IAS 16 Gain on transfer of operation	(14)		3	(11)
– IAS 16 Net gains on disposal of property, plant and equipment	(9)	(3)	3	(9)
– IAS 16 Compensation from third parties for items of property, plant and equipment impaired, abandoned or lost	(18)	5	3	(10)
– IAS 28 Gain on deemed disposal of JV	(1 321)		298	(1 023)
– IAS 28 Share of equity-accounted investments' separately identifiable remeasurements	(3)	1		(2)
– IAS 36 Impairment charges of non-current assets	46		(10)	36
Headline earnings				3 315
Continuing operations1				3 184
Discontinued operations1				131
12 months ended 31 December 2020 (Audited) (Re-presented)1
Profit attributable to owners of the parent				7 283
Adjusted for:	560	(258)	(168)	134
– IFRS 11 Gain on disposal of joint operation	(17)		4	(13)
– IAS 16 Gain on transfer of operation	(4)		1	(3)
– IAS 16 Net losses on disposal of property, plant and equipment	92	(29)	(14)	49
– IAS 16 Compensation from third parties for items of property, plant and equipment impaired, abandoned or lost	(18)	5	3	(10)
– IAS 21 Net gains on translation differences recycled to profit or loss on deregistration and liquidation of foreign entities	(103)		23	(80)
– IAS 21 Net gains on translation differences recycled to profit or loss on disposal of investment in foreign associate	(13)		3	(10)
– IAS 28 Losses on dilution of investments in associates	20		(5)	15
– IAS 28 Net gain on deemed disposal of JV	(1 321)		298	(1 023)
– IAS 28 Share of equity-accounted investments' separately identifiable remeasurements	42	2	(10)	34
– IAS 36 Net impairment charges of non-current assets	1 882	(236)	(471)	1 175
Headline earnings				7 417
Continuing operations1				7 122
Discontinued operations1				295

1	Relates to the re-presentation of Tronox SA's financial performance from continuing operations to discontinued operations (refer note 4.1 and 4.2).

 

	6 months ended 30 June 2021 Reviewed cents		(Re-presented)1 6 months    ended    30 June    2020    Reviewed    cents	(Re-presented)1 12 months    ended    31 December    2020    Audited    cents
Headline earnings per share
Aggregate
– Basic	2 722		1 321	2 955
– Diluted	2 722		1 321	2 955
Continuing operations1
– Basic	2 699		1 269	2 837
– Diluted	2 699		1 269	2 837
Discontinued operations1
– Basic	23		52	118
– Diluted	23		52	118

1	Relates to the re-presentation of Tronox SA's financial performance from continuing operations to discontinued operations (refer note 4.1 and 4.2).

Refer note 6 for details regarding the number of shares.

The final dividend relating to the 2020 financial year of 1 243 cents per share (R3 119 million to external shareholders) was paid in May 2021.

Following the disposal of Exxaro's shareholding in Tronox Holdings plc in March 2021, a special dividend of 543 cents per share (R1 363 million to external shareholders) was also paid in May 2021.

An interim cash dividend, number 37, for 2021 of 2 077 cents per share, was approved by the board of directors on 10 August 2021. The dividend is payable on 4 October 2021 to shareholders who will be on the register on 1 October 2021. This interim dividend, amounting to approximately R5 076 million (to external shareholders), has not been recognised as a liability in these interim financial statements. It will be recognised in shareholders' equity in the year ending 31 December 2021.

The interim dividend declared will be subject to a dividend withholding tax of 20% for all shareholders who are not exempt from or do not qualify for a reduced rate of dividend withholding tax. The net local dividend payable to shareholders, subject to dividend withholding tax at a rate of 20% amounts to 1 661.60000 cents per share. Exxaro company's tax reference number is 9218/098/14/4.

	6 months ended 30 June 2021 Reviewed Rm		6 months ended 30 June 2020 Reviewed Rm		12 months ended 31 December 2020 Audited Rm
Dividends paid	4 482		1 420		3 034
Final dividend	3 119		1 420		1 420
Special dividend	1 363
Interim dividend					1 614
	cents		cents		cents
Dividend per share (paid)	1 786		566		1 209
Final dividend	1 243		566		566
Special dividend	543
Interim dividend					643

 

	At 31 December
	At 30 June 2021 Reviewed		At 30 June 2020 Reviewed		At 31 December 2020 Audited
Issued share capital (number of shares)1	352 625 931		358 706 754		358 706 754
Ordinary shares (million)
– Weighted average number of shares	250		251		251
– Diluted weighted average number of shares	250		251		251

1	On 30 June 2021, 6 080 823 ordinary shares were cancelled in terms of the share repurchase programme.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker, who is responsible for allocating resources and assessing performance of the reportable operating segments. The chief operating decision maker is the group executive committee. Segments reported are based on the group's different commodities and operations.

During the second half of 2020, the chief operating decision maker, in line with reporting trends and better disclosure, revised the allocation of corporate costs to the segments since emphasis is placed on controllable costs. Indirect corporate costs are no longer allocated between the different segments but now reported on a gross level in the other reportable segment. The comparative segmental information for the six-month period ended 30 June 2020 has been re-presented to reflect this change.

The segments, as described below, offer different goods and services, and are managed separately based on commodity, location and support function grouping. The group executive committee reviews internal management reports on these operating segments at least quarterly.

Coal

The coal reportable segment is split between commercial (Waterberg and Mpumalanga), tied and other operations. The commercial Mpumalanga operations include a 50% (30 June 2020: 50%; 31 December 2020: 50%) investment in Mafube (a JV with SACO, previously known as Anglo) and a 49% (30 June 2020: 49%; 31 December 2020: 49%) equity interest in Tumelo which was classified as a non-current asset held-for-sale on 31 December 2020 as part of the ECC operation. The 10.26% (30 June 2020: 10.36%; 31 December 2020: 10.26%) effective equity interest in RBCT is included in the other coal operations. The ECC operation, included in the commercial Mpumalanga reportable segment, was classified as a non-current asset held-for-sale on 31 December 2020 (refer note 17). The coal operations produce thermal coal, metallurgical coal and SSCC.

The export revenue and related export cost items have been allocated between the coal reportable segments based on the origin of the initial coal production.

Energy

The energy reportable segment includes Cennergi as a controlled operation from 1 April 2020 (an equity interest of 50% up to 31 March 2020). It further includes an equity interest of 28.59% (30 June 2020: 28.59%; 31 December 2020: 28.59%) in LightApp, as well as an equity interest of 22% (30 June 2020: 22%; 31 December 2020: 22%) in GAM.

Ferrous

The ferrous reportable segment mainly comprises the 20.62% (30 June 2020: 20.62%; 31 December 2020: 20.62%) equity interest in SIOC (located in the Northern Cape province) reported within the other ferrous reportable segment as well as the FerroAlloys operation (referred to as Alloys). The Alloys operation manufactures ferrosilicon.

TiO₂

Following the disposal of Tronox Holdings plc and Tronox SA, the TiO2 reportable segment has been discontinued (refer note 8).

Other

The other reportable segment is split between the base metals and other reportable segments. The 26% (30 June 2020: 26%; 31 December 2020: 26%) equity interest in Black Mountain (located in the Northern Cape province) is included in the base metals reportable segment. The other reportable segment comprises a 25.85% (30 June 2020: 26.86%; 31 December 2020: 25.85%) equity interest in Insect Technology, the Ferroland agricultural operation and the corporate office which renders services to operations and other customers. The equity interest in Curapipe was sold on 9 November 2020.

The following table presents a summary of the group's segmental information:

	Coal
	Commercial
6 months ended 30 June 2021 (Reviewed)	Waterberg  Rm		Mpumalanga   Rm		Tied   Rm		Other   Rm		Energy   Rm
External revenue (note 9)	8 168		3 960		2 386		11		539
Segmental net operating profit/(loss)	3 549		(149)		75		(145)		225
– Continuing operations	3 549		(149)		75		(145)		225
– Discontinued operations
External finance income (note 11)	11		1				2		5
External finance costs (note 11)	(21)		(73)				(22)		(251)
Income tax (expense)/benefit	(1 036)		87		(26)		173		6
– Continuing operations	(1 036)		87		(26)		173		6
– Discontinued operations
Depreciation and amortisation (note 10)	(692)		(299)		(7)		(17)		(194)
Net gains on disposal of associates
– Discontinued operations
Share of income/(loss) of equity-accounted investments			98				3		(5)
– Continuing operations (note 12)			98				3		(5)
– Discontinued operations (note 8)
Cash generated by/(utilised in) operations	4 311		(11)		126		(761)		368
Capital spend (note 13)	(928)		(215)		(1)		(6)
At 30 June 2021 (Reviewed)
Segmental assets and liabilities
Deferred tax1			130		(185)		637		91
Equity-accounted investments (note 15)			1 511				2 056		91
External assets	30 419		5 933		1 153		2 247		9 098
Assets	30 419		7 574		968		4 940		9 280
Non-current assets held-for-sale (note 17)			2 391
Total assets	30 419		9 965		968		4 940		9 280
External liabilities	2 096		1 475		1 002		930		5 380
Deferred tax1	7 113		201				155		936
Liabilities	9 209		1 676		1 002		1 085		6 316
Non-current liabilities held-for-sale (note 17)			1 156
Total liabilities	9 209		2 832		1 002		1 085		6 316

 

	Ferrous			Other
6 months ended 30 June 2021 (Reviewed)	Alloys  Rm	Other  ferrous  Rm	TiO2  Rm	Base  metals  Rm	Other  Rm		Total  Rm
External revenue (note 9)	74				6		15 144
Segmental net operating profit/(loss)	6	(1)	2 217		(529)		5 248
– Continuing operations	6	(1)			(529)		3 031
– Discontinued operations			2 217				2 217
External finance income (note 11)	2				61		82
External finance costs (note 11)					(100)		(467)
Income tax (expense)/benefit	(1)		(379)		208		(968)
– Continuing operations	(1)				208		(589)
– Discontinued operations			(379)				(379)
Depreciation and amortisation (note 10)	(5)				(74)		(1 288)
Net gains on disposal of associates			1 339				1 339
– Discontinued operations			1 339				1 339
Share of income/(loss) of equity-accounted investments		6 321	54	199			6 670
– Continuing operations (note 12)		6 321		199			6 616
– Discontinued operations (note 8)			54				54
Cash generated by/(utilised in) operations	(17)	(2)			(41)		3 973
Capital spend (note 13)					(24)		(1 174)
At 30 June 2021 (Reviewed)
Segmental assets and liabilities
Deferred tax1	16				249		938
Equity-accounted investments (note 15)		15 469		1 197			20 324
External assets	322	26			4 937		54 135
Assets	338	15 495		1 197	5 186		75 397
Non-current assets held-for-sale (note 17)							2 391
Total assets	338	15 495		1 197	5 186		77 788
External liabilities	25	1			7 087		17 996
Deferred tax1	(1)				(51)		8 353
Liabilities	24	1			7 036		26 349
Non-current liabilities held-for-sale (note 17)							1 156
Total liabilities	24	1			7 036		27 505

1	Offset per legal entity and tax authority.

The following table presents a summary of the group's segmental information:

	Coal
	Commercial
6 months ended 30 June 2020 (Reviewed) (Re-presented)	Waterberg Rm		Mpumalanga Rm		Tied Rm		Other Rm		Energy Rm
External revenue (note 9)	7 615		4 076		2 005		34		283
Segmental net operating profit/(loss)1	3 501		(240)		80		(30)		1 402
– Continuing operations	3 501		(240)		80		(30)		1 402
External finance income (note 11)	23		2		3		10		5
External finance costs (note 11)	(27)		(90)				(23)		(143)
Income tax (expense)/benefit	(1 059)				(31)		255		17
– Continuing operations	(1 059)				(31)		255		17
Depreciation and amortisation (note 10)	(685)		(260)		(11)		(12)		(97)
Gain on deemed disposal of JV									1 321
Gain on transfer of operation							14
Share of income/(loss) of equity-accounted investments			35				10		4
– Continuing operations (note 12)			35				10		4
– Discontinued operations (note 8)
Cash generated by/(utilised in) operations	4 283		105		168		144		189
Capital spend (note 13)	(796)		(392)		(1)
At 30 June 2020 (Reviewed) (Re-presented)
Segmental assets and liabilities
Deferred tax2			(117)		(137)		485		155
Equity-accounted investments (note 15)			1 372				2 078		126
Loans to equity-accounted investments			113
External assets	28 872		9 714		1 065		2 489		9 520
Assets	28 872		11 082		928		5 052		9 801
Non-current assets held-for-sale (note 17)
Total assets	28 872		11 082		928		5 052		9 801
External liabilities	1 917		2 404		864		1 251		5 550
Deferred tax2	6 690		675				54		964
Liabilities	8 607		3 079		864		1 305		6 514
Non-current liabilities held-for-sale (note 17)			612
Total liabilities	8 607		3 691		864		1 305		6 514

1	Segmental net operating profit or loss has been re-presented to reflect the change in the allocation of corporate costs.
2	Offset per legal entity and tax authority.

 

	Ferrous						Other
6 months ended 30 June 2020 (Reviewed) (Re-presented)	Alloys  Rm		Other  ferrous  Rm		TiO2 Rm		Base  metals  Rm		Other  Rm			Total  Rm
External revenue (note 9)	60								5			14 078
Segmental net operating profit/(loss)1	9								(653)			4 069
– Continuing operations	9								(653)			4 069
External finance income (note 11)									93			136
External finance costs (note 11)									(174)			(457)
Income tax (expense)/benefit									237			(581)
– Continuing operations									237			(581)
Depreciation and amortisation (note 10)	(3)								(63)			(1 131)
Gain on deemed disposal of JV												1 321
Gain on transfer of operation												14
Share of income/(loss) of equity-accounted investments			2 259		95				(48)			2 355
– Continuing operations (note 12)			2 259						(48)			2 260
– Discontinued operations (note 8)					95							95
Cash generated by/(utilised in) operations	5								(162)			4 732
Capital spend (note 13)									(75)			(1 264)
At 30 June 2020 (Reviewed) (Re-presented)
Segmental assets and liabilities
Deferred tax2	14								353			753
Equity-accounted investments (note 15)			10 770		2 494		872		598			18 310
Loans to equity-accounted investments												113
External assets	281		25						6 522			58 488
Assets	295		10 795		2 494		872		7 473			77 664
Non-current assets held-for-sale (note 17)			1 741									1 741
Total assets	295		10 795		4 235		872		7 473			79 405
External liabilities	32		6						11 650			23 674
Deferred tax2									(52)			8 331
Liabilities	32		6						11 598			32 005
Non-current liabilities held-for-sale (note 17)												612
Total liabilities	32		6						11 598			32 617

1	Segmental net operating profit or loss has been re-presented to reflect the change in the allocation of corporate costs.
2	Offset per legal entity and tax authority.

The following table presents a summary of the group's segmental information:

	Coal
	Commercial
12 months ended 31 December 2020 (Audited) (Re-presented)	Waterberg  Rm		Mpumalanga  Rm		Tied  Rm		Other  Rm		Energy  Rm
External revenue (note 9)	15 449		8 037		4 355		34		889
Segmental net operating profit/(loss)	6 668		(2 419)		145		(114)		1 619
– Continuing operations	6 668		(2 419)		145		(114)		1 619
External finance income (note 11)	33		3				8		12
External finance costs (note 11)	(48)		(171)				(52)		(402)
Income tax (expense)/benefit	(2 020)		530		(46)		782		1
– Continuing operations	(2 020)		530		(46)		782		1
Depreciation and amortisation (note 10)	(1 373)		(611)		(19)		(2)		(291)
Impairment charges			(1 378)
Gain on deemed disposal of JV (note 10)									1 321
Gains on disposal of joint operation and transfer of operation (note 10)			17				4
Share of income/(loss) of equity-accounted investments			67				5		(5)
– Continuing operations (note 12)			67				5		(5)
– Continuing operations (note 12)
Cash generated by/(utilised in) operations	8 223		(879)		241		(1 717)		693
Capital spend (note 13)	(2 326)		(717)		(1)		(16)		(1)
At 31 December 2020 (Audited)
Segmental assets and liabilities
Deferred tax1			112		(158)		589		146
Equity-accounted investments (note 15)			1 412				2 053		98
External assets	30 155		6 160		1 138		2 468		8 825
Assets	30 155		7 684		980		5 110		9 069
Non-current assets held-for-sale (note 17)			2 008
Total assets	30 155		9 692		980		5 110		9 069
External liabilities	2 129		1 288		926		1 308		5 715
Deferred tax1	6 934		229				189		937
Liabilities	9 063		1 517		926		1 497		6 652
Non-current liabilities held-for-sale (note 17)			1 138
Total liabilities	9 063		2 655		926		1 497		6 652

1	Offset per legal entity and tax authority.

 

	Ferrous						Other
12 months ended 31 December 2020 (Audited) (Re-presented)	Alloys  Rm		Other  ferrous  Rm		TiO2 Rm		Base  metals  Rm		Other  Rm			Total  Rm
External revenue (note 9)	147								13			28 924
Segmental net operating profit/(loss)	4						93		(1 703)			4 293
– Continuing operations	4						93		(1 703)			4 293
External finance income (note 11)									159			215
External finance costs (note 11)	(1)								(373)			(1 047)
Income tax (expense)/benefit	7								27			(719)
– Continuing operations	7								27			(719)
Depreciation and amortisation (note 10)	(6)								(134)			(2 436)
Impairment charges									(504)			(1 882)
Gain on deemed disposal of JV (note 10)												1 321
Gains on disposal of joint operation and transfer of operation (note 10)												21
Share of income/(loss) of equity-accounted investments			6 125		207		122		(110)			6 411
– Continuing operations (note 12)			6 125				122		(110)			6 204
– Discontinued operations (note 8)					207							207
Cash generated by/(utilised in) operations	(38)		(4)						1 251			7 770
Capital spend (note 13)	(2)								(112)			(3 175)
At 31 December 2020 (Audited)
Segmental assets and liabilities
Deferred tax1	17		1						369			1 076
Equity-accounted investments (note 15)			12 820		2 628		995					20 006
External assets	309		26						4 694			53 775
Assets	326		12 847		2 628		995		5 063			74 857
Non-current assets held-for-sale (note 17)					1 741							3 749
Total assets	326		12 847		4 369		995		5 063			78 606
External liabilities	29		3						9 713			21 111
Deferred tax1									(53)			8 236
Liabilities	29		3						9 660			29 347
Non-current liabilities held-for-sale (note 17)												1 138
Total liabilities	29		3						9 660			30 485

1	Offset per legal entity and tax authority.

The discontinued operations are:
Tronox SA
On 23 February 2021, Tronox Holdings plc exercised its "flip-in" call option over Exxaro's 26% shareholding in Tronox SA, for which Tronox Holdings plc delivered 7 246 035 newly issued Tronox Holdings plc Ordinary Shares to Exxaro on 24 February 2021. This resulted in the derecognition of the investment in Tronox SA and recognition of an additional investment in Tronox Holdings plc.

It was concluded that the related performance and cash flow information be presented as a discontinued operation as the investment in Tronox SA represents a separate geographical area of operation of the TiO² reportable segment.

Tronox Holdings plc
On 1 March 2021, Exxaro concluded a public offering in the United States of its 21 975 315 Tronox Holdings plc Ordinary Shares. The shares were sold at a public offering price of US$18.25 per share which was reduced by underwriting discounts and commissions resulting in an achieved price per share of US$17.43.

It was concluded that the related performance and cash flow information be presented as a discontinued operation as the investment in Tronox Holdings plc represents a major geographical area of operation as well as the majority of the TiO² reportable segment.

Financial information relating to the discontinued operations is set out below:

		6 months  ended  30 June  2021  Reviewed  Rm		(Re-presented)1 6 months  ended  30 June  2020  Reviewed  Rm	(Re-presented)2 12 months   ended   31 December   2020   Audited   Rm
Financial performance
Net gains on translation differences recycled to profit or loss on disposal of investment in foreign associate		876
Gains on financial instruments revaluations recycled to profit or loss		2
Operating profit		878
Net gains on disposal of associates3		1 339
– Total disposal consideration		7 781
– Carrying amount of investments sold		(6 442)
Net operating profit		2 217
Dividend income received from non-current assets held-for-sale				36	69
Share of income of equity-accounted investments		54		95	207
Profit before tax		2 271		131	276
Income tax expense		(379)
Profit for the period from discontinued operations		1 892		131	276
Other comprehensive loss, net of tax		(878)		(74)	(50)
Items that have subsequently been reclassified to profit or loss:		(878)
– Recycling of share of OCI of equity-accounted investments		(878)
Items that may subsequently be reclassified to profit or loss:				(72)	(50)
– Share of OCI of equity-accounted investments				(72)	(50)
Items that will not be reclassified to profit or loss:				(2)
– Share of OCI of equity-accounted investments				(2)
Total comprehensive income for the period		1 014		57	226
Cash flow information
Cash flow attributable to investing activities
– Dividend income received from non-current assets held-for-sale				36	69
– Proceeds from disposal of associate classified as non-current assets held-for-sale		5 763
Cash flow attributable to discontinued operations		5 763		36	69

1	Refer note 4.1.
2	Refer note 4.2.
3	Comprises a loss of R664 million on the disposal of Tronox SA and a gain of R2 003 million on the disposal of Tronox Holdings plc.

Revenue is derived from contracts with customers. Revenue has been disaggregated based on timing of revenue recognition, major type of goods and services, major geographic area and major customer industries.

	Coal
	Commercial
6 months ended 30 June 2021 (Reviewed)	Waterberg  Rm		Mpumalanga  Rm		Tied  Rm		Other  Rm
Segmental revenue reconciliation
Segmental revenue1	8 168		3 960		2 386		11
Export sales allocated to selling entity	(1 063)		(3 559)				4 622
Total revenue	7 105		401		2 386		4 633
By timing and major type of goods and services
Sale of goods at a point in time	7 105		401		1 904		4 622
Coal	7 105		401		1 904		4 622
Renewable energy
Ferrosilicon
Biological goods
Rendering of services over time					482		11
Stock yard management services					104
Project engineering services					378
Other mine management services							11
Transportation services
Other services
Total revenue	7 105		401		2 386		4 633
By major geographic area of customer2
Domestic	7 105		401		2 386		11
Export							4 622
Europe							2 888
Asia							1 612
Other							122
Total revenue	7 105		401		2 386		4 633
By major customer industries
Public utilities	6 051				2 386
Merchants	105		256				4 622
Steel	497		68				11
Mining	25		73
Manufacturing	220
Food and beverage	108
Cement	82		2
Other	17		2
Total revenue	7 105		401		2 386		4 633

 

			Ferrous		Other
6 months ended 30 June 2021 (Reviewed)	Energy  Rm		Alloys  Rm		Other  Rm		Total  Rm
Segmental revenue reconciliation
Segmental revenue1	539		74		6		15 144
Export sales allocated to selling entity
Total revenue	539		74		6		15 144
By timing and major type of goods and services
Sale of goods at a point in time	539		71		6		14 648
Coal							14 032
Renewable energy	539						539
Ferrosilicon			71				71
Biological goods					6		6
Rendering of services over time			3				496
Stock yard management services							104
Project engineering services							378
Other mine management services							11
Transportation services			1				1
Other services			2				2
Total revenue	539		74		6		15 144
By major geographic area of customer2
Domestic	539		74		6		10 522
Export							4 622
Europe							2 888
Asia							1 612
Other							122
Total revenue	539		74		6		15 144
By major customer industries
Public utilities	539						8 976
Merchants							4 983
Steel							576
Mining			52				150
Manufacturing			16				236
Food and beverage							108
Cement							84
Other			6		6		31
Total revenue	539		74		6		15 144

1	Coal segmental revenue is based on the origin of coal production.
2	Determined based on the customer supplied by Exxaro.

 

	Coal
	Commercial
6 months ended 30 June 2020 (Reviewed)	Waterberg  Rm		Mpumalanga  Rm		Tied  Rm		Other  Rm
Segmental revenue reconciliation
Segmental revenue1	7 615		4 076		2 005		34
Export sales allocated to selling entity	(1 091)		(3 757)				4 848
Total revenue	6 524		319		2 005		4 882
By timing and major type of goods and services
Sale of goods at a point in time	6 524		319		1 732		4 800
Coal	6 524		319		1 732		4 800
Renewable energy
Ferrosilicon
Biological goods
Rendering of services over time					273		82
Stock yard management services					73
Project engineering services					200
Other mine management services							34
Transportation services							48
Other services
Total revenue	6 524		319		2 005		4 882
By major geographic area of customer2
Domestic	6 524		319		2 005		34
Export							4 848
Europe							1 910
Asia							2 249
Other							689
Total revenue	6 524		319		2 005		4 882
By major customer industries
Public utilities	5 721				2 005		263
Merchants	92		184				4 192
Steel	375		17				77
Mining	83						127
Manufacturing	126
Cement	50
Food and beverage	61
Chemicals			116
Other	16		2				223
Total revenue	6 524		319		2 005		4 882

 

			Ferrous		Other
6 months ended 30 June 2020 (Reviewed)	Energy  Rm		Alloys  Rm		Other  Rm		Total  Rm
Segmental revenue reconciliation
Segmental revenue1	283		60		5		14 078
Export sales allocated to selling entity
Total revenue	283		60		5		14 078
By timing and major type of goods and services
Sale of goods at a point in time	283		56		5		13 719
Coal							13 375
Renewable energy	283						283
Ferrosilicon			56				56
Biological goods					5		5
Rendering of services over time			4				359
Stock yard management services							73
Project engineering services							200
Other mine management services							34
Transportation services			1				49
Other services			3				3
Total revenue	283		60		5		14 078
By major geographic area of customer2
Domestic	283		60		4		9 229
Export					1		4 849
Europe					1		1 911
Asia							2 249
Other							689
Total revenue	283		60		5		14 078
By major customer industries
Public utilities	283						8 272
Merchants			2				4 470
Steel							469
Mining			45				255
Manufacturing			11				137
Cement							50
Food and beverage							61
Chemicals							116
Other			2		5		248
Total revenue	283		60		5		14 078

1	Coal segmental revenue is based on the origin of coal production.
2	Determined based on the customer supplied by Exxaro.

 

	Coal
	Commercial
12 months ended 31 December 2020 (Audited)	Waterberg  Rm		Mpumalanga  Rm		Tied  Rm		Other  Rm
Segmental revenue reconciliation
Segmental revenue1	15 449		8 037		4 355		34
Export sales allocated to selling entity	(2 002)		(7 357)				9 359
Total revenue	13 447		680		4 355		9 393
By timing and major type of goods and services
Sale of goods at a point in time	13 447		680		3 744		9 293
Coal	13 447		680		3 744		9 293
Renewable energy
Ferrosilicon
Biological goods
Rendering of services over time					611		100
Stock yard management services					154
Project engineering services					457
Other mine management services							34
Transportation services							66
Other services
Total revenue	13 447		680		4 355		9 393
By major geographic area of customer2
Domestic	13 447		680		4 355		34
Export							9 359
Europe							3 904
Asia							4 539
Other							916
Total revenue	13 447		680		4 355		9 393
By major customer industries
Public utilities	11 508				4 355		260
Merchants	174		345				8 525
Steel	1 014		79				77
Mining	56		103				126
Manufacturing	275
Cement	132
Food and beverage	250
Chemicals			145
Other	38		8				405
Total revenue	13 447		680		4 355		9 393

 

			Ferrous		Other
12 months ended 31 December 2020 (Audited)	Energy  Rm		Alloys  Rm		Other  Rm		Total  Rm
Segmental revenue reconciliation
Segmental revenue1	889		147		13		28 924
Export sales allocated to selling entity
Total revenue	889		147		13		28 924
By timing and major type of goods and services
Sale of goods at a point in time	889		139		12		28 204
Coal							27 164
Renewable energy	889						889
Ferrosilicon			139				139
Biological goods					12		12
Rendering of services over time			8		1		720
Stock yard management services							154
Project engineering services							457
Other mine management services							34
Transportation services			2				68
Other services			6		1		7
Total revenue	889		147		13		28 924
By major geographic area of customer2
Domestic	889		147		8		19 560
Export					5		9 364
Europe					3		3 907
Asia					2		4 541
Other							916
Total revenue	889		147		13		28 924
By major customer industries
Public utilities	889						17 012
Merchants			2				9 046
Steel							1 170
Mining			119				404
Manufacturing			26				301
Cement							132
Food and beverage					8		258
Chemicals							145
Other					5		456
Total revenue	889		147		13		28 924

1	Coal segmental revenue is based on the origin of coal production.
2	Determined based on the customer supplied by Exxaro.

	6 months  ended  30 June  2021  Reviewed  Rm		6 months  ended  30 June  2020  Reviewed  Rm		12 months  ended  31 December  2020  Audited  Rm
Raw materials and consumables	(1 883)		(1 844)		(3 744)
Staff costs	(2 643)		(2 523)		(5 103)
Royalties	(389)		(348)		(575)
Contract mining	(1 065)		(1 175)		(2 409)
Repairs and maintenance	(1 402)		(1 208)		(2 421)
Railage and transport	(1 211)		(1 528)		(3 101)
Movement in provisions	187		1 049		1 100
Movement in indemnification asset			(798)		(798)
Depreciation and amortisation	(1 288)		(1 131)		(2 436)
– Depreciation of property, plant and equipment	(1 172)		(1 053)		(2 237)
– Depreciation of right-of-use assets	(32)		(35)		(71)
– Amortisation of intangible assets	(84)		(43)		(128)
Gain on deemed disposal of JV1			1 321		1 321
Loss on financial instruments revaluations recycled to profit or loss on deemed disposal of JV1			(59)		(59)
Fair value adjustments on contingent consideration					(3)
Hedge ineffectiveness on interest rate swaps	(3)		(11)		(57)
Legal and professional fees	(287)		(286)		(653)
Net (losses)/gains on disposal of property, plant and equipment	(10)		9		(92)
Net gains on translation differences recycled to profit or loss on deregistration and liquidation of foreign entities					103
Net gains on translation differences recycled to profit or loss on disposal of investment in foreign associate					13
Gain on disposal of joint operation					17
Gain on transfer of operation			14		4
Loss on dilution of investment in associates					(20)
Expected credit losses2	65		77		144
Write-off of trade and other receivables	(79)		(5)		(35)
Write-down of inventories to net realisable value			(105)		(9)
Insurance recoveries for			32		32
– Business interruption			14		14
– Property, plant and equipment			18		18

1	Relates to the step-up acquisition of Cennergi.
2	30 June 2021 relates mainly to a reversal of an ECL recognised on the loan to Tumelo, amounting to R27 million, as well as a non-performing trade debtor which was written off, amounting to R78 million, which was offset by an ECL recognised on the ESD loans, amounting to R37 million.

		6 months  ended  30 June  2021  Reviewed  Rm		6 months  ended  30 June  2020  Reviewed  Rm		12 months  ended  31 December  2020  Audited  Rm
Finance income		82		136		215
Interest income		79		131		209
Reimbursement of interest income on environmental rehabilitation funds		(2)				(5)
Finance lease interest income		4		4		8
Commitment fee income		1		1		3
Finance costs		(467)		(457)		(1 047)
Interest expense		(390)		(490)		(984)
Net fair value loss on interest rate swaps designated as cash flow hedges: recycled from OCI		(72)		(26)		(107)
– Realised fair value loss		(93)		(48)		(153)
– Unrealised fair value gain		21		22		46
Unwinding of discount rate on rehabilitation costs		(133)		(160)		(305)
Recovery of unwinding of discount rate on rehabilitation costs		15		19		38
Interest expense on lease liabilities		(27)		(26)		(54)
Amortisation of transaction costs		(9)		(4)		(9)
Borrowing costs capitalised1		149		230		374
Total net financing costs		(385)		(321)		(832)
1 Borrowing costs capitalisation rate (%)		6.34		8.88		7.79

	6 months  ended  30 June  2021  Reviewed  Rm		(Re-presented) 6 months  ended  30 June  2020  Reviewed  Rm	(Re-presented) 12 months  ended  31 December  2020  Audited  Rm
Unlisted investments
Associates	6 518		2 212	6 124
SIOC	6 321		2 259	6 125
RBCT	3		10	5
Black Mountain	199			122
Insect Technology			(48)	(109)
LightApp	(5)		(9)	(18)
Curapipe				(1)
Joint ventures	98		48	80
Mafube	98		35	67
Cennergi			13	13
Share of income of equity-accounted investments	6 616		2 260	6 204

	At 30 June 2021 Reviewed Rm		At 30 June 2020 Reviewed Rm	At 31 December 2020 Audited Rm
Capital spend
To maintain operations	686		672	2 225
To expand operations	488		592	950
Total capital spend on property, plant and equipment	1 174		1 264	3 175
Capital commitments
Contracted	1 449		2 589	2 339
– Contracted for the group (owner-controlled)	760		2 313	1 990
– Share of capital commitments of equity-accounted investments	689		276	349
Authorised, but not contracted	1 913		1 839	1 484

	Goodwill  Rm	Customer  contracts  Rm	Patents and  licenses  Rm	Total  Rm
At 30 June 2021 (Reviewed)
Gross carrying amount
At beginning of the period	521	2 685	39	3 245
At end of the period	521	2 685	39	3 245
Accumulated amortisation
At beginning of the period		(123)	(27)	(150)
Charges for the period		(82)	(2)	(84)
At end of the period		(205)	(29)	(234)
Net carrying amount at end of the period	521	2 480	10	3 011
At 30 June 2020 (Reviewed) (Re-presented)
Gross carrying amount
At beginning of the period	1 524		43	1 567
Acquisition of subsidiaries	521	2 685		3 206
At end of the period	2 045	2 685	43	4 773
Accumulated amortisation
At beginning of the period			(27)	(27)
Charges for the period		(41)	(2)	(43)
At end of the period		(41)	(29)	(70)
Accumulated impairment
At beginning of the period	(1 524)			(1 524)
At end of the period	(1 524)			(1 524)
Net carrying amount at end of the period	521	2 644	14	3 179
At 31 December 2020 (Audited)
Gross carrying amount
At beginning of the period	1 524		43	1 567
Additions			2	2
Acquisition of subsidiaries	521	2 685		3 206
Exchange differences			1	1
Reclassification to non-current assets held-for-sale	(1 524)		(7)	(1 531)
At end of the period	521	2 685	39	3 245
Accumulated amortisation
At beginning of the period			(27)	(27)
Charges for the period		(123)	(5)	(128)
Reclassification to non-current assets held-for-sale			5	5
At end of the period		(123)	(27)	(150)
Accumulated impairment
At beginning of the period	(1 524)			(1 524)
Reclassification to non-current assets held-for-sale	1 524			1 524
At end of the period
Total intangible assets	521	2 562	12	3 095

	At 30 June 2021 Reviewed Rm		(Re-presented) At 30 June  2020  Reviewed  Rm	At 31 December 2020 Audited Rm
Associates	18 813		16 938	18 594
SIOC	15 469		10 770	12 820
Tronox SA1			2 494	2 628
RBCT	2 056		2 078	2 053
Black Mountain2	1 197		872	995
Insect Technology3			598
LightApp	91		126	98
Joint Ventures	1 511		1 372	1 412
Mafube	1 511		1 372	1 412
Total equity-accounted investments	20 324		18 310	20 006

1	The investment in Tronox SA was sold on 24 February 2021 (refer note 8).
2	Refer note 4.1 for the reclassification of Black Mountain from non-current assets held-for-sale to equity-accounted investments.
3	The investment in Insect Technology was fully impaired on 31 December 2020.