Exxaro report selector 2019

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Exxaro Resources Limited
Group and company annual financial statements for the year ended 31 December 2019

Currently viewing: CHAPTER 6 / 6.2 Working capital

6.2 Working capital

6.2.1 ACCOUNTING POLICIES RELATING TO WORKING CAPITAL ITEMS

Inventories

Inventories are stated at the lower of cost (determined on the weighted average basis) and net realisable value.

The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and fixed production overheads, but excludes interest charges. Fixed production overheads are allocated on the basis of normal capacity.

Net realisable value represents the estimated selling price in the ordinary course of business less applicable selling expenses. Write-downs to net realisable value and inventory losses are expensed in the period in which the write-downs or losses occur.

Inventory is presented as non-current when it is not expected to be sold or used within the normal business operating cycle.

Trade receivables

Trade receivables are amounts due from customers for the sale of goods and services performed in the ordinary course of business. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Also refer note 16.1.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Also refer note 16.1.

6.2.2 INVENTORIES

  Group     Company  
At 31 December 2019
Rm
  2018
Rm
    2019
Rm
  2018
Rm
 
Non-current                  
Finished products 101                
Total non-current inventories 101                
Current                  
Finished products1 1 152   1 080            
Work-in-progress 44   30            
Raw materials 8   14            
Plant spares and stores 597   474     3      
Merchandise 8   6            
Total current inventories 1 809   1 604     3      
Total inventories 1 910   1 604     3      
1 Includes inventory carried at net realisable value amounting to: 45                

Included in merchandise are biological assets classified as inventories. No inventories were pledged as security for liabilities in neither 2019 nor 2018.

6.2.3 TRADE AND OTHER RECEIVABLES

  Group     Company  
At 31 December 2019 
Rm 
  2018 
Rm 
    2019 
Rm 
  2018
Rm
 
Trade receivables 2 928    2 971             
– Gross 3 023    3 052             
– Impairment allowances (95)   (81)            
Other receivables 313    169      15    19  
– Gross1 464    223      26    19  
– Impairment allowances (151)   (54)     (11)      
Indebtedness by subsidiaries           615    194  
– Gross           615    194  
Total trade and other receivables 3 241    3 140      630    213  
1 Includes sundry receivables and reclassifications of creditors with debit balances.

6.2.3.1 Impairment allowances and write-offs

Trade and other receivables are stated after the following allowances for impairment:

  Group     Company  
At 31 December 2019 
Rm 
  2018 
Rm 
    2019 
Rm 
  2018 
Rm 
 
Trade receivables                  
Opening balance  (81)    (68)                  
– Performing  (8)    (7)                  
– Non-performing  (73)    (61)                  
Movement in impairment allowances  (14)    (13)                  
– Performing     (1)                  
– Under-performing  (1)                        
– Non-performing  (16)    (12)                  
At end of the year  (95)    (81)                  
– Performing  (5)    (8)                  
– Under-performing  (1)                        
– Non-performing  (89)    (73)                  
Other receivables                            
Opening balance  (54)                        
– Non-performing  (54)                        
Movement in impairment allowances  (97)    (54)       (11)         
– Non-performing  (97)    (54)       (11)         
At end of the year  (151)    (54)       (11)         
– Non-performing  (151)    (54)       (11)         
Indebtedness by subsidiaries                            
Opening balance                       (1)   
– Non-performing                       (1)   
Movement in impairment allowance                         
– Non-performing                         
At end of the year                            
– Non-performing                            

Trade and other receivables are stated after the following write-offs recognised in profi t or loss:

  Group   Company  
For the year ended 31 December 2019
Rm
  2018
Rm
  2019
Rm
  2018
Rm
 
Trade receivables (10)   (5)          
Other receivables     (2)       (2)  
  (10)   (7)       (2)  

For a detailed age analysis of the trade and other receivables refer note 16.3.3.4.2.

6.2.4 TRADE AND OTHER PAYABLES

  Group   Company  
At 31 December 2019
Rm
  2018
Rm
  2019
Rm
  2018
Rm
 
Non-current                
Other payables1 121   152          
Total non-current other payables 121   152          
Current                
Trade payables 1 164   1 456   102   36  
Other payables2 1 439   1 504   75   135  
Indebtedness to subsidiaries             5  
Total current trade and other payables 2 603   2 960   177   176  
Total trade and other payables 2 724   3 112   177   176  
1 Relates to retention creditors
2 Includes sundry payables and reclassifi cation of receivables with credit balances.