Integrated report 2019
Exxaro Resources Limited
Group and company annual financial statements
for the year ended 31 December 2019
| Nature of business1 |
Country of incorporation |
Percentage interest |
||||
| Note | 2019 % |
2018 % |
||||
|---|---|---|---|---|---|---|
| Unlisted | ||||||
| Associates | ||||||
| SIOC3 | M | RSA | 20.62 | 20.62 | ||
| Tronox SA | M | RSA | 26.00 | 26.00 | ||
| RBCT4 | T | RSA | 10.36 | 10.82 | ||
| Black Mountain5 | M | RSA | 26.00 | 26.00 | ||
| Curapipe6 | R&D | Israel | 15.00 | 10.53 | ||
| Insect Technology7 | WC | UK | 25.86 | 26.37 | ||
| LightApp8 | EN | Israel | 28.59 | 28.98 | ||
| Tumelo4 | M | RSA | 49.00 | |||
| GAM9 | EN | RSA | 22.00 | |||
| – Gross | ||||||
| – Accumulated impairment | 9.5 | |||||
| Joint ventures | ||||||
| Mafube | M | RSA | 50.00 | 50.00 | ||
| Cennergi | EN | RSA | 50.00 | 50.00 | ||
| Total equity-accounted investments per statement of financial position | 9.5 | |||||
| Unincorporated joint operations |
||||||
| Moranbah coal project | M | AUS | 50.00 | 50.00 | ||
| Refer below for other balances relating to associates and joint ventures | ||||||
| Included in non-current assets held-for-sale: | 8.4 | |||||
| Associates | ||||||
| Listed: Tronox Holdings plc | M | UK | 10.38 | 23.35 | ||
| Unlisted: Tronox UK | F | UK | 26.00 | |||
| Unlisted: Black Mountain5 | ||||||
| Other financial assets | ||||||
| Unlisted: Tronox UK | ||||||
| Included in financial assets: | 10.2.2 | |||||
| Loan to associate: Tumelo | ||||||
| – Current gross | ||||||
| – Current impairment allowances | ||||||
| Loan to joint venture: Mafube | ||||||
| – Non-current gross | ||||||
| – Current gross |
| Group | Company | Fair value2 | Fair value hierarchy level |
Valuation technique |
||||||||||||||||
| Note | 2019 Rm |
2018 Rm |
2019 Rm |
2018 Rm |
2019 Rm |
2018 Rm |
||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Unlisted | ||||||||||||||||||||
| Associates | 15 056 | 15 477 | 2 039 | 2 025 | ||||||||||||||||
| SIOC3 | 9 835 | 9 511 | 29 033 | 19 705 | 2 Adjusted equity value | |||||||||||||||
| Tronox SA | 2 472 | 2 185 | 1 181 | 1 181 | ||||||||||||||||
| RBCT4 | 2 067 | 2 157 | ||||||||||||||||||
| Black Mountain5 | 818 | |||||||||||||||||||
| Curapipe6 | 37 | 22 | 41 | 27 | ||||||||||||||||
| Insect Technology7 | 534 | 643 | 674 | 674 | ||||||||||||||||
| LightApp8 | 111 | 141 | 143 | 143 | ||||||||||||||||
| Tumelo4 | ||||||||||||||||||||
| GAM9 | 58 | 58 | ||||||||||||||||||
| Gross | (58) | (58) | ||||||||||||||||||
| Accumulated impairment | 9.5 | |||||||||||||||||||
| Joint ventures | 1 574 | 1 569 | 696 | 696 | ||||||||||||||||
| Mafube | 1 335 | 1 237 | ||||||||||||||||||
| Cennergi | 239 | 332 | 696 | 696 | ||||||||||||||||
| Total equity-accounted investments per statement of financial position | 9.5 | 16 630 | 17 046 | 2 735 | 2 721 | |||||||||||||||
| Unincorporated joint operations |
||||||||||||||||||||
| Moranbah coal project | ||||||||||||||||||||
| Refer below for other balances relating to associates and joint ventures | ||||||||||||||||||||
| Included in non-current assets held-for-sale: | 8.4 | 2 613 | 5 183 | 2 377 | 4 725 | |||||||||||||||
| Associates | 2 613 | 5 183 | 2 377 | 4 317 | ||||||||||||||||
| Listed: Tronox Holdings plc | 1 741 | 3 396 | 2 377 | 3 226 | ||||||||||||||||
| Unlisted: Tronox UK | 1 787 | 1 091 | ||||||||||||||||||
| Unlisted: Black Mountain5 | 872 | |||||||||||||||||||
| Other financial assets | 408 | |||||||||||||||||||
| Unlisted: Tronox UK | 408 | |||||||||||||||||||
| Included in financial assets: | 10.2.2 | 133 | 259 | |||||||||||||||||
| Loan to associate: Tumelo | 133 | |||||||||||||||||||
| Current gross | 182 | |||||||||||||||||||
| Current impairment allowances | (49) | |||||||||||||||||||
| Loan to joint venture: Mafube | 259 | |||||||||||||||||||
| Non-current gross | 250 | |||||||||||||||||||
| Current gross | 9 | |||||||||||||||||||
| 1 | M – Mining, F – Financing, EN – Energy, T – Export terminal, R&D – Research and Development, WC – Waste Conversion. |
| 2 | Fair value represents the directors’ valuation at the reporting date. |
| 3 | The fair value of SIOC is determined by applying an adjusted equity valuation technique, based on the share price of KIO on 31 December 2019 of R417.05 per share (31 December 2018: R283.05 per share), adjusted for a liquidity discount rate of 20% (2018: 20%). |
| 4 | On 1 January 2019, Exxaro lost control of the management function of Tumelo. This resulted in Tumelo being accounted for as an associate at an initial carrying value of nil, and a dilution of the effective interest in RBCT. |
| 5 | The investment in Black Mountain was classified as a non-current asset held-for-sale (refer note 8.4) and a discontinued operation (refer note 6.1.4) on 30 November 2019. Black Mountain’s financial year end is 31 March and therefore not co-terminous with that of Exxaro. Financial information has been obtained from published information or management accounts as appropriate. |
| 6 | On 25 January 2019, Exxaro acquired an additional 4.47% equity interest in Curapipe. |
| 7 | The equity interest in Insect Technology was acquired on 31 May 2018. During 2019 the interest has been diluted as a result of a new share issue to further expand the Insect Technology group as well as share options being exercised. Insect Technology develops municipal organic water-conversion plants to generate high-quality, natural protein sold for use in animal feed and agriculture. |
| 8 | The equity interest in LightApp was acquired on 18 September 2018. During 2019 the interest has been diluted as a result of share options being exercised. LightApp is one of the leading start-ups in industrial energy analytics. |
| 9 | A 22% equity interest in GAM was acquired in exchange for the settlement of the Lebonix debt. The investment has been fully impaired. GAM is in the business of recycling waste tyres into bio-fuel. |
Restrictions
There are no significant restrictions on the ability of associates or joint ventures to transfer funds to Exxaro in the form of cash dividends, or to repay loans or advances made by Exxaro.
Risks
Refer note 10.1.4 for details with regard to capital commitments relating to associates and joint ventures.
Refer note 16.3.4 for details with regard to loan commitments relating to associates and joint ventures.
