Exxaro Resources Limited – Group and company annual financial statements 2021

CHAPTERS 1 TO 3

CHAPTERS 1 TO 3

CHAPTER 1

The year in brief

CHAPTER 2

Responsibility statement on internal financial controls Certificate by the group company secretary Report of the directors Audit committee report Independent auditor's report

CHAPTER 3

Accounting policy relating to segmental reporting Significant judgements and assumptions made by management in applying the related accounting policy Reportable segments Geographic location of segment assets

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.

We're building on an existing successful platform leveraging our skills and differentiation with a long-term vision to develop a sustainable, growth-orientated, value-driven company, a leading international renewable solutions provider by the end of the decade.
CHAPTERS 4 TO 5

CHAPTERS 4 TO 5

CHAPTER 4

Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Company statement of comprehensive income Company statement of financial position Company statement of changes in equity Company statement of cash flows

CHAPTER 5

Accounting policy relating to earnings Attributable earnings per share Reconciliation of headline earnings Headline earnings per share Dividend distributions Notes to the statements of cash flows relating to earnings

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.
CHAPTERS 6 TO 7

CHAPTERS 6 TO 7

CHAPTER 6

Operational performance Working capital Notes to the statements of cash flows relating to operational performance and working capital

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.

We're building on an existing successful platform leveraging our skills and differentiation with a long-term vision to develop a sustainable, growth-orientated, value-driven company, a leading international renewable solutions provider by the end of the decade.

CHAPTER 7

Accounting policies relating to taxation Significant judgements and assumptions made by management in applying the related accounting policies Income tax (expense)/benefit Reconciliation of tax rates Deferred tax Notes to the statements of cash flows relating to taxation Tax effect of other comprehensive income
CHAPTERS 8 TO 9

CHAPTERS 8 TO 9

CHAPTER 8

Accounting policies relating to business environment and portfolio changes Significant judgements and assumptions made by management in applying the related accounting policies Divestment of non-core assets Impairment charges of non-current assets Non-current assets and liabilities held-for-sale

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.

CHAPTER 9

Accounting policies relating to investments in associates and joint arrangements Significant judgements and assumptions made by management in applying the related accounting policies Income from investments in associates and joint ventures Investments in associates and joint arrangements Movement analysis of investments in associates and joint ventures Summarised financial information of associates and joint ventures Reconciliation of carrying amounts of investments in associates and joint ventures
CHAPTERS 10 TO 13

CHAPTERS 10 TO 13

CHAPTER 10

Property, plant and equipment Intangible assets Financial assets Other assets

CHAPTER 11

Accounting policies relating to leases Judgements and assumptions made by management in applying the related accounting policies Right-of-use assets Lease liabilities

CHAPTER 12

Debt Equity

CHAPTER 13

Accounting policies relating to provisions and contingencies Significant judgements and assumptions made by management in applying the related accounting policies Provisions Contingent liabilities and contingent assets
CHAPTERS 14 TO 16

CHAPTERS 14 TO 16

CHAPTER 14

Accounting policies relating to employee benefits Significant judgements and assumptions made by management in applying the related accounting policies Employee benefits Retirement employee obligations Directors' and prescribed officers' remuneration

We're building on an existing successful platform leveraging our skills and differentiation with a long-term vision to develop a sustainable, growth-orientated, value-driven company, a leading international renewable solutions provider by the end of the decade.

CHAPTER 15

Related-party transactions

CHAPTER 16

Accounting policies relating to financial instruments Judgements and assumptions made by management in applying the related accounting policies Financial instruments
CHAPTERS 16 TO 17

CHAPTERS 16 TO 17

CHAPTER 16

Accounting policies relating to financial instruments Judgements and assumptions made by management in applying the related accounting policies Financial instruments

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.

We're building on an existing successful platform leveraging our skills and differentiation with a long-term vision to develop a sustainable, growth-orientated, value-driven company, a leading international renewable solutions provider by the end of the decade.

CHAPTER 17

Accounting policies relating to subsidiaries Significant judgements and assumptions made by management in applying the related accounting policies Transactions with subsidiaries Summary of investments in subsidiaries Summary of indebtedness by/(to) subsidiaries Detailed analysis of investments in subsidiaries and indebtedness by/(to) subsidiaries Non-controlling interests
CHAPTERS 18 TO 20

CHAPTERS 18 TO 20

CHAPTER 18

Basis of preparation Adoption of new, amended and revised standards and interpretations Events after the reporting period

CHAPTER 19

Re-presentation of group comparative information Restatement of company comparative information

CHAPTER 20

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

TRANSITIONING TO SUSTAINABLE GROWTH AND IMPACT

In this strategy-focused chapter, we outline how our business leadership has transitioned as well as our strategy. As we commence the implementation of the strategy, we outline the drivers for our strategic direction, how we will measure our success into the future as well as reflecting on our past strategic performance.
ACRONYMS
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CHAPTER 7:
Taxation

7.4Reconciliation of tax rates

Group

Company

For the year ended 31 December

2021
%

(Re-presented)¹
2020
%

2021
%

2020
%

Tax as a percentage of profit before tax from continuing operations

13.2

7.4

(0.2)

(7.8)

Tax effect of:

– Net capital (losses)/gains²

(1.0)

2.1

(0.2)

1.9

– Impairments charges

(1.5)

(38.4)

– Expenses not deductible for tax purposes³

(0.7)

(2.3)

(1.1)

– Exempt income⁴

0.1

2.6

27.9

65.9

– Post-tax equity-accounted income⁵

16.4

18.1

– Remeasurements of foreign tax rate differences

0.2

0.3

– Prior year tax adjustments

0.1

– Deferred tax assets recognised

1.8

0.5

7.5

– Imputed income from controlled foreign companies and investments

(0.3)

(0.5)

Standard tax rate

28.0

Effective tax rate for continuing operations, excluding income from equity-accounted investments

31.9

20.8

Refer note 19.1.

Group: A deemed capital gain (-1.4%) on the intercompany sale and purchase of the RBCT shares between ECC (seller) and Exxaro Coal Proprietary Limited (purchaser) in 2017 as a result of the de-grouping corporate tax rule triggered by the ECC group leaving the Exxaro group of companies. This has partly been offset by the gain made on the Chifeng investment (+0.3%).
Company: Mainly relates to forgiveness of ECC loans.

³ Expenses not deductible for tax purposes:

(0.7)

(2.3)

(1.1)

– Consulting, legal and other professional fees

(0.1)

(0.4)

– ESD grants

(0.1)

(0.4)

– Share-based payments

0.3

0.1

(0.3)

– Penalties and interest on taxes

(0.1)

– Distribution to beneficiaries of Exxaro ESOP Trust

(0.3)

(0.1)

– Other⁶

(0.5)

(2.0)

(0.1)

⁴	Group mainly relates to dividends received by Exxaro ESOP Trust and Exxaro Community NPC (a tax exempt institution). For company, relates to dividend income received.
⁵	Relates mainly to equity-accounted income of SIOC (refer note 9.3).
⁶	Relates to the environmental rehabilitation funds acquired by Exxaro Coal Proprietary Limited and Exxaro Coal Mpumalanga Proprietary Limited from Exxaro. Exxaro received the environmental rehabilitation funds as part of the divestment of the ECC operation (-1.2%). It has been partly offset by the realisation of FCTR on the deregistration of Exxaro International BV and Exxaro Base Metals International BV (+0.8%).

CHAPTER 7: Taxation

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CHAPTER 7:
Taxation