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Exxaro Resources Limited
Annual Financial Statements 2021
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CHAPTER 7:
Taxation

  • 7.5DEFERRED TAX
Group  Company 
At 31 December  2021 
Rm
 
2020 
Rm
 
2021 
Rm
 
2020 
Rm
 
The movements on deferred tax are as follows: 
At beginning of the year  (7 160) (6 671) 459  296 
Items charged to profit or loss  (683) 266  (272) 145 
– Current year  (673) 235  (270) 145 
– Prior year  (10) 31  (2)
Items charged directly to equity  15  30  18 
– Share-based payments movement  15  30  18 
Items charged directly to other comprehensive income  (74) 111 
– Cash flow hedges  (74) 120 
– Retirement employee obligations  (9)
Reclassification to non-current assets held-for-sale  21 
Acquisition of subsidiaries  (917)
At end of the year  (7 902) (7 160) 195  459 
– Deferred tax asset  369  1 076  195  459 
– Deferred tax liability  (8 271) (8 236)
Group
At 31 December 2020 
Assets 
Rm
 
Liabilities 
Rm
 
Total 
net liability 
Rm
 
Property, plant and equipment  (933) (6 825) (7 758)
Customer contracts  (752) (752)
Right-of-use assets  (138) (131)
Share-based payments  121  51  172 
Other accruals and provisions  (2) 197  195 
Bad debt reassessment  40  45 
Restoration provisions  151  376  527 
Decommissioning provisions  37  60  97 
Leave pay accrual  30  36  66 
Retention payables  21  111  132 
Prepayments  (11) (32) (43)
Environmental rehabilitation funds  (62) (475) (537)
Income received in advance 
Inventories  (9) 22  13 
Lease receivables  (17) (17)
Local tax losses carried forward  1 287  449  1 736 
Revaluation of financial assets at FVOCI  (82) (82)
Retirement employee obligations  41  41 
Deferred tax assets not recognised or derecognised  111  (1 255) (1 144)
Investment in RBCT  (196) (196)
Unclaimed donations  72  72 
Lease liabilities  145  151 
Cash flow hedge reserve  122  (2) 120 
Contributions to Exxaro ESOP Trust  47  79  126 
Total  1 076  (8 236) (7 160)
Group 
Movement during the year  At 31 December 2021 
Recognised  inprofit or loss 
Rm
 
Recognised 
in OCI 
Rm
 
Recognised 
directly 
in equity 
Rm
 
Assets 
Rm
 
Liabilities 
Rm
 
Total 
net liability 
Rm
 
Property, plant and equipment  (972) (579) (8 151) (8 730)
Customer contracts  81  (671) (671)
Right-of-use assets  (122) (2) (124)
Share-based payments  12  15  134  65  199 
Other accruals and provisions  24  58  161  219 
Bad debt reassessment  (35) 10 
Restoration provisions  (114) 209  204  413 
Decommissioning provisions  39  59  98 
Leave pay accrual  31  37  68 
Retention payables  (63) 67  69 
Prepayments  (14) (15) (42) (57)
Environmental rehabilitation funds  (88) (242) (383) (625)
Income received in advance 
Inventories  19  19 
Lease receivables  (15) (15)
Local tax losses carried forward  (514) 766  456  1 222 
Revaluation of financial assets at FVOCI  (82) (82)
Retirement employee obligations  44  44 
Deferred tax assets not recognised or derecognised  830  (228) (86) (314)
Investment in RBCT  196 
Unclaimed donations  (24) 47  48 
Lease liabilities  (10) 139  141 
Cash flow hedge reserve  (74) 35  12  47 
Contributions to Exxaro ESOP Trust  (14) 41  71  112 
Total  (683) (74) 15  369  (8 271) (7 902)
Company 
At 31 December 
2020
 
Movement during the year  At 31 December 
2021
 
Total asset 
Rm
 
Recognised 
in profit 
or loss 
Rm
 
Recognised 
directly in 
equity 
Rm
 
Total asset 1
Rm
 
Property, plant and equipment  (19) 16  (3)
Right-of-use assets  (123) 16  (107)
Share-based payments  107  119 
Other accruals and provisions  27  15  42 
Bad debt reassessment  23  (23)
Restoration provisions  10  11 
Leave pay accrual  10 
Environmental rehabilitation funds  (8) (2) (10)
Lease liabilities  127  (4) 123 
Capital losses  286  (286)
Unclaimed donations  16  (10)
Contributions to Exxaro ESOP Trust 
Total  459  (272) 195 
1 The deferred tax asset recognised for the company is supported by sufficient forecast profits to be utilised. The forecast profits are based on agreements in place with commodity businesses within Exxaro.

Tax on calculated assessable losses and unredeemed capital expenditure

Group 
At 31 December  2021 
Rm
 
2020 
Rm
 
Deferred tax assets not recognised, relating to: 
– Local accumulated tax losses1  (181) (1 227)
– Current year tax losses calculated  (27) (511)
– Unredeemed capital expenditure1  (867)
1 The decrease relates mainly to the disposal of the ECC operation.
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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
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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