Exxaro Resource limited Report Selector 2018
Currently viewing Annual Financial Report 2018
Currently viewing Annual Financial Report 2018
Exxaro Resources Limited Group and company annual financial statements
9.1.1 NON-CURRENT ASSETS AND LIABILITIES HELD-FOR-SALE
When the carrying amount of non-current assets and liabilities (or a disposal group) will be recovered principally through a disposal rather than through continuing use, such assets and liabilities are classified as non-current assets and liabilities held-for-sale and are measured at the lower of carrying amount and fair value less costs of disposal. This condition is regarded as met only when the disposal is highly probable and the assets and liabilities (or a disposal group) are available for immediate disposal in its present condition. Management must be committed to the disposal, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
| Group | |||
| For the year ended 31 December 2018 | NBC Operation1 Rm |
Manyeka2 Rm |
|
| Consideration received: | |||
| – Cash received | 17 | 90 | |
| – Cash disposed | (15) | ||
| Net disposal consideration | 17 | 75 | |
| Carrying amount of net liabilities/(assets) sold | 85 | (6) | |
| – Property, plant and equipment | (112) | (41) | |
| – Inventories | (93) | ||
| – Trade and other receivables | (30) | ||
| – Other current assets | (1) | ||
| – Trade and other payables | 14 | 30 | |
| – Shareholder loan | 18 | ||
| – Provisions | 273 | ||
| – Deferred tax | 8 | ||
| – Post-retirement employee obligations | 3 | ||
| – Non-controlling interests | 10 | ||
| Gain on disposal3 | 102 | 69 | |
| 1 | On 2 March 2018, Exxaro concluded a sale of asset agreement with North Block Complex Proprietary Limited (a subsidiary of Universal Coal plc) to dispose of certain assets and liabilities of NBC. Although the section 11 for the Paardeplaats right has not been granted yet, it was agreed with the buyer to conclude and close the transaction on 31 October 2018, on which date the proceeds of R17 million, relating to the Glisa and Eerstelingsfontein reserves, were received. |
| 2 | During 2018 Exxaro concluded a sale of share agreement with Universal Coal for ECC’s 100% shareholding in Manyeka, which includes a 51% interest in Eloff. |
| 3 | After tax of nil. |
TRONOX LIMITED
In September 2017, the directors of Exxaro formally decided to dispose of the investment in Tronox Limited. As part of this decision, Tronox Limited was required to publish an automatic shelf registration statement of securities of well-known seasoned issuers which allowed for the conversion of Exxaro’s Class B Tronox Limited ordinary shares to Class A Tronox Limited ordinary shares. From this point, it was concluded that the Tronox Limited investment should be classified as a non-current asset held-forsale as all the requirements in terms of IFRS 5 were met. As of 30 September 2017, the Tronox Limited investment, totalling 42.66% of Tronox Limited’s total outstanding voting shares, was classified as a non-current asset held-for-sale and the application of the equity method ceased.
Subsequent to the classification as a non-current asset held-for-sale, Exxaro sold 22 425 000 Class A Tronox Limited ordinary shares during October 2017. On 24 May 2018, Exxaro obtained shareholder approval to sell the remainder of its shares in Tronox Limited. On 31 December 2018, management concluded that the investment continues to meet the criteria to be classified as a non-current asset held-for-sale in terms of IFRS 5. Exxaro continues to assess market conditions for further possible sell downs of the remaining 28 729 280 Class B Tronox Limited ordinary shares.
The Tronox Limited investment is presented within the total assets of the TiO2 reportable operating segment and is presented as a discontinued operation (refer note 7.1.4).
TRONOX UK
During November 2018, Exxaro and Tronox Limited reached an agreement in relation to the disposal of Exxaro’s 26% members interest in Tronox UK. It was concluded that Exxaro’s investment in Tronox UK should be classified as a non-current asset held-for-sale as all the requirements in terms of IFRS 5 have been met. As of 30 November 2018, Exxaro’s 26% investment in Tronox UK was classified a non-current asset held-for-sale and the application of the equity method ceased.
The Tronox UK investment is presented within the total assets of the TiO2 reportable operating segment. Tronox UK does not meet the criteria to be classified as a discontinued operation since it does not represent a separate line of business nor does it represent a major geographical area of operation.
EMJV
As part of the ECC acquisition in 2015, Exxaro acquired non-current liabilities held-for-sale relating to the EMJV. The sale of the EMJV is conditional on section 11 approval required in terms of the MPRDA for transfer of the new-order mining right to the new owners, Scinta Energy Proprietary Limited, as well as section 43(2) approval for the transfer of environmental liabilities and responsibilities. The EMJV remains a non-current liability held-for-sale for the Exxaro group on 31 December 2018, as the required approvals are still pending. The EMJV does not meet the criteria to be classified as a discontinued operation since it does not represent a separate major line of business, nor does it represent a major geographical area of operation.
The major classes of assets and liabilities classified as non-current assets and liabilities held-for-sale are as follows:
| Group | Company | ||||||||
| 2018 Rm |
2017 Rm |
2018 Rm |
2017 Rm |
||||||
| Assets | |||||||||
| Property, plant and equipment | 282 | 82 | |||||||
| Investment in associates | 5 183 | 3 396 | 4 317 | 6 110 | |||||
| – Tronox Limited | 3 396 | 3 396 | 3 226 | 6 110 | |||||
| – Tronox UK | 1 787 | 1 091 | |||||||
| Non-current other financial asset at amortised cost | 408 | ||||||||
| Deferred tax | 9 | ||||||||
| Inventories | 133 | ||||||||
| Trade receivables | 39 | ||||||||
| Current tax receivable | 27 | ||||||||
| Cash and cash equivalents | 14 | ||||||||
| Other current assets | 10 | ||||||||
| Non-current assets held-for-sale | 5 183 | 3 910 | 4 725 | 6 192 | |||||
| Liabilities | |||||||||
| Non-current provisions | (1 320) | (1 494) | |||||||
| Post-retirement employee obligations | (17) | (22) | |||||||
| Trade and other payables | (62) | ||||||||
| – Trade payables | (54) | ||||||||
| – Other payables | (8) | ||||||||
| Shareholder loans | (18) | ||||||||
| Current provisions | (18) | ||||||||
| Other current liabilities | (37) | ||||||||
| Non-current liabilities held-for-sale | (1 337) | (1 651) | |||||||
| Net non-current assets held-for-sale | 3 846 | 2 259 | 4 725 | 6 192 | |||||
The following items of other comprehensive income that may subsequently be reclassified to profit or loss relate to non-current assets classified as held-for-sale:
| Group | ||||
| 2018 Rm |
2017 Rm |
|||
| Cumulative share of comprehensive income/(losses) of equity-accounted investments | ||||
| – Unrealised gains on translation of foreign operations | 1 708 | 1 708 | ||
| – Losses on financial instrument revaluations | (1) | (1) | ||
