Integrated report 2019
Exxaro Resources Limited
Group and company annual financial statements
for the year ended 31 December 2019
Following the merger with Eyesizwe Proprietary Limited in November 2006 and the successful creation of Exxaro, the retirement medical benefit which was provided to a group of continuation and in-service members on the Witbank Coal Medical Aid Scheme was honoured. During 2017, Exxaro Coal Mpumalanga Proprietary Limited withdrew from the Witbank Coal Medical Aid Scheme and the members were moved to the Discovery Health Medical Scheme and Bonitas Medical Aid Scheme. This benefit, which is no longer offered, applied to certain employees previously employed by Eyesizwe Proprietary Limited or Ingwe Coal and comprises a subsidy of contributions.
Exxaro Coal Mpumalanga Proprietary Limited’s contribution to the retirement medical benefit of employees for the year ended 31 December 2019 amounts to R8 million (2018: R8 million).
The obligation represents a present value amount, which is actuarially valued every two years. Any remeasurements are recognised in other comprehensive income.
The movement in the net defined benefit medical obligation over the year is summarised as follows:
| Group | |||||
| At 31 December | 2019 Rm |
2018 Rm |
|||
|---|---|---|---|---|---|
| At beginning of the year | 193 | 227 | |||
| Charge to operating expenses | 14 | 19 | |||
| – Current and past service costs | 2 | 4 | |||
| – Interest expense | 21 | 24 | |||
| – Expected employer benefit payments | (9) | (9) | |||
| Remeasurements1 | (26) | (54) | |||
| Reclassification from non-current liabilities held-for-sale | 1 | ||||
| At end of the year | 181 | 193 | |||
| The defined benefit medical obligation is composed by country as follows: | |||||
| – RSA | 181 | 193 | |||
| Present value of unfunded obligations | 181 | 193 | |||
| The actuarial assumptions were as follows: | |||||
| Discount rate (%) | 10.6 | 11.4 | |||
| Healthcare cost inflation (%) | 8.0 | 9.5 | |||
| Expected retirement age (years) | 60 | 60 | |||
| 1 | Tax on remeasurements amounts to R7 million (2018: R15 million). |
