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.
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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	8	18
– Share-based payments movement	15	30	8	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)	7	(131)
Share-based payments	121	51	172
Other accruals and provisions	(2)	197	195
Bad debt reassessment	40	5	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	6	1	7
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	6	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	7			(122)	(2)	(124)
Share-based payments	12		15	134	65	199
Other accruals and provisions	24			58	161	219
Bad debt reassessment	(35)			3	7	10
Restoration provisions	(114)			209	204	413
Decommissioning provisions	1			39	59	98
Leave pay accrual	2			31	37	68
Retention payables	(63)			2	67	69
Prepayments	(14)			(15)	(42)	(57)
Environmental rehabilitation funds	(88)			(242)	(383)	(625)
Income received in advance				7		7
Inventories	6				19	19
Lease receivables	2				(15)	(15)
Local tax losses carried forward	(514)			766	456	1 222
Revaluation of financial assets at FVOCI					(82)	(82)
Retirement employee obligations	3			44		44
Deferred tax assets not recognised or derecognised	830			(228)	(86)	(314)
Investment in RBCT	196
Unclaimed donations	(24)			47	1	48
Lease liabilities	(10)			139	2	141
Cash flow hedge reserve	1	(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	4	8	119
Other accruals and provisions	27	15		42
Bad debt reassessment	23	(23)
Restoration provisions	10	1		11
Leave pay accrual	9	1		10
Environmental rehabilitation funds	(8)	(2)		(10)
Lease liabilities	127	(4)		123
Capital losses	286	(286)
Unclaimed donations	16	(10)		6
Contributions to Exxaro ESOP Trust	4			4
Total	459	(272)	8	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.

CHAPTER 7:Taxation

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CHAPTER 7:
Taxation