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Exxaro Resources Limited
Annual Financial Statements 2021
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CHAPTER 6:
Operational performance and working capital

  • 6.2WORKING CAPITAL
  • 6.2.1 Accounting policies relating to working capital

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. Refer note 16.1 for further accounting policies relating to financial assets at amortised cost.

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.

  • 6.2.2Inventories
  Group   Company
At 31 December 2021
Rm
2020
Rm
2021
Rm
2020
Rm
Non-current
Finished products 145 128
Total non-current inventories 145 128
Current
Finished products1 887 1 128
Work-in-progress 12 12
Raw materials 4 7
Spares and stores 696 667 5 7
Merchandise2 7 7
Total current inventories 1 606 1 821 5 7
Total inventories 1 751 1 949 5 7
1 Includes inventory carried at net realisable value amounting to nil (2020: R37 million).
2 Included in merchandise are biological assets classified as inventories.

No inventories were pledged as security for liabilities in 2021 nor 2020.

  • 6.2.3Trade and other receivables
   Group  Company 
At 31 December  2021 
Rm 
2020 
Rm 
2021 
Rm 
2020 
Rm 
Trade receivables  2 626  2 698 
– Gross  2 647  2 793 
– Impairment allowances  (21) (95)
Other receivables  75  129 
– Gross  101  153  11 
– Impairment allowances  (26) (24) (1) (4)
Indebtedness by subsidiaries  324  639 
– Gross  326  720 
– Impairment allowances  (2) (81)
Total trade and other receivables  2 701  2 827  325  646 
  • 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  2021 
Rm
 
2020 
Rm
 
2021 
Rm
 
2020 
Rm
 
Trade receivables 
Opening balance  (95) (95)
– Performing  (15) (5)
– Under-performing  (1)
– Non-performing  (80) (89)
Movement in impairment allowances  74 
– Performing  (6) (10)
– Under-performing 
– Non-performing  80 
At end of the year  (21) (95)
– Performing  (21) (15)
– Non-performing  (80)
Other receivables 
Opening balance  (24) (151) (4) (11)
– Non-performing  (24) (151) (4) (11)
Movement in impairment allowances  (2) 127 
– Non-performing  (2) 127 
At end of the year  (26) (24) (1) (4)
– Non-performing  (26) (24) (1) (4)
Indebtedness by subsidiaries 
Opening balance  (81)
– Performing  (81)
Movement in impairment allowances  79  (81)
– Performing  79  (81)
At end of the year  (2) (81)
– Performing  (2) (81)

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

   Group     Company 
For the year ended 31 December  2021 
Rm
 
2020 
Rm
 
2021 
Rm
 
2020 
Rm
 
Trade receivables  (79) (20)
Other receivables  (1) (15) (10)
Indebtedness by subsidiaries  (79)
Total write-off of trade and other receivables  (80) (35) (79) (10)

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

  • 6.2.4Trade and other payables
  Group Company
At 31 December 2021
Rm
2020
Rm
2021
Rm
2020
Rm
Non-current
Other payables1 53 24
Total non-current other payables 53 24
Current
Trade payables 999 1 371 55 114
Other payables2 1 231 1 569 104 86
Total current trade and other payables 2 230 2 940 159 200
Total trade and other payables 2 283 2 964 159 200
1 Relates to retention creditors.
2 2020: includes an amount of R296 million owing to Arnot Opco in relation to the environmental rehabilitation funds which are being held in trust on their behalf. This amount was settled in 2021.
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CHAPTER 1: THE YEAR IN BRIEF
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The year in brief

CHAPTER 2: REPORTS
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2.1 Responsibility statement on internal financial controls
2.2 Certificate by the group company secretary
2.3 Report of the directors
2.4 Audit committee report
2.5 Independent auditor's report

CHAPTER 3: SEGMENTAL REPORTING
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3.1 Accounting policy relating to segmental reporting
3.2 Significant judgements and assumptions made by management in applying the related accounting policy
3.3 Reportable segments
3.4 Geographic location of segment assets

CHAPTER 4: FINANCIAL STATEMENTS
Add section
4.1.1 Group financial statements of comprehensive income
4.1.2 Group financial statements of financial position
4.1.3 Group financial statements of changes in equity
4.1.4 Group financial statements of cash flows
4.2.1 Company financial statement of comprehensive income
4.2.2 Company financial statement of financial position
4.2.3 Company financial statement of changes in equity
4.2.4 Company financial statement of cash flows

CHAPTER 5: EARNINGS
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5.1 Accounting policy relating to earnings
5.2 Attributable earnings per share
5.3 Reconciliation of headline earnings
5.4 Headline earnings per share
5.5 Dividend distributions
5.6 Notes to the statements of cash flows relating to earnings

CHAPTER 6: OPERATIONAL PERFORMANCE AND WORKING CAPITAL
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6.1 Operational performance
6.2 Working capital
6.3 Notes to the statements of cash flows relating to operational performance and working capital

CHAPTER 7: TAXATION
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7.1 Accounting policies relating to taxation
7.2 Significant judgements and assumptions made by management in applying the related accounting policies
7.3 Income tax (expense)/benefit
7.4 Reconciliation of tax rates
7.5 Deferred tax
7.6 Notes to the statements of cash flows relating to taxation
7.7 Tax effect of other comprehensive income

CHAPTER 8: BUSINESS ENVIRONMENT AND PORTFOLIO CHANGES
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8.1 Accounting policies relating to business environment and portfolio changes
8.2 Significant judgements and assumptions made by management in applying the related accounting policies
8.3 Divestment of non-core assets
8.4 Impairment charges of non-current assets
8.5 Non-current assets and liabilities held-for-sale

CHAPTER 9: ASSOCIATES AND JOINT ARRANGEMENTS
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9.1 Accounting policies relating to investments in associates and joint arrangements
9.2 Significant judgements and assumptions made by management in applying the related accounting policies
9.3 Income from investments in associates and joint ventures
9.4 Investments in associates and joint arrangements
9.5 Movement analysis of investments in associates and joint ventures
9.6 Summarised financial information of associates and joint ventures
9.7 Reconciliation of carrying amounts of investments in associates and joint ventures

CHAPTER 10: ASSETS
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10.1 Property, plant and equipment
10.2 Intangible assets
10.3 Financial assets
10.4 Other assets

CHAPTER 11: LEASES
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11.1 Accounting policies relating to leases
11.2 Judgements and assumptions made by management in applying the related accounting policies
11.3 Right-of-use assets
11.4 Lease liabilities

CHAPTER 12: FUNDING
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12.1 Debt
12.2 Equity

CHAPTER 13: PROVISIONS AND CONTINGENCIES
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13.1 Accounting policies relating to provisions and contingencies
13.2 Significant judgements and assumptions made by management in applying the related accounting policies
13.3 Provisions
13.4 Contingent liabilities

CHAPTER 14: PEOPLE
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14.1 Accounting policies relating to employee benefits
14.2 Significant judgements and assumptions made by management in applying the related accounting policies
14.3 Employee benefits
14.4 Retirement employee obligations
14.5 Directors' and prescribed officers' remuneration

CHAPTER 15: RELATED PARTIES
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15.1 Related-party transactions

CHAPTER 16: FINANCIAL INSTRUMENTS
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16.1 Accounting policies relating to financial instruments
16.2 Judgements and assumptions made by management in applying the related accounting policies
16.3 Financial instruments

CHAPTER 17: SUBSIDIARIES
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17.1 Accounting policies relating to subsidiaries
17.2 Significant judgements and assumptions made by management in applying the related accounting policies
17.3 Transactions with subsidiaries
17.4 Summary of investments in subsidiaries
17.5 Summary of indebtedness by/(to) subsidiaries
17.6 Detailed analysis of investments in subsidiaries
17.7 Non-controlling interests

CHAPTER 18: COMPLIANCE
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18.1 Basis of preparation
18.2 Adoption of new, amended and revised standards and interpretations
18.3 Events after the reporting period

CHAPTER 19: CHANGES TO COMPARATIVE INFORMATION
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19.1 Re-presentation of group comparative information
19.2 Restatement of company comparative information

CHAPTER 20: ANNEXURES
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Annexure 1 Shareholder analysis
Annexure 2 Definitions
Annexure 3 Administration
Annexure 4 Shareholders' diary

ACRONYMS
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Acronyms