Exxaro Resources Limited – Group and company annual financial statements 2021 | 9.4 Investments in associates and joint arrangements

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 9:
Associates and joint arrangements

9.4INVESTMENTS IN ASSOCIATES AND JOINT ARRANGEMENTS

		Nature of business¹	Country of incorporation	Percentage holding
At 31 December	Note			2021 %	2020 %
Unlisted
Associates
SIOC³		M	RSA	20.62	20.62
Tronox SA⁴		M	RSA		26.00
RBCT		T	RSA	10.26	10.26
Black Mountain⁵		M	RSA	26.00	26.00
Insect Technology⁶	8.4	WC	UK	25.85	25.85
LightApp		EN	Israel	28.59	28.59
GAM⁷		EN	RSA	22.00	22.00
Joint ventures
Mafube		M	RSA	50.00	50.00

Total investments in associates and JVs	9.5
Unincorporated joint operations
Moranbah coal project		M	AUS	50.00	50.00
Refer below for other balances relating to associates and JVs
Included in non-current assets held-for-sale:
Associates
Listed: Tronox Holdings plc		M	UK		10.26
Unlisted: Tumelo⁸		M	RSA		49.00
Loans to associates: Tumelo
– Current gross
– Current impairment allowances

	Group			Company			Fair value²			Fair value hierarchy level	Valuation technique
At 31 December		2021 Rm	2020 Rm		2021 Rm	2020 Rm		2021 Rm	2020 Rm
Unlisted
Associates		15 542	18 594		143	1 324
SIOC³		12 037	12 820					32 030	43 358	2	Adjusted equity value
Tronox SA⁴			2 628			1 181
RBCT		2 034	2 053
Black Mountain⁵		1 350	995
Insect Technology⁶
LightApp		121	98		143	143
GAM⁷
Joint ventures		1 780	1 412
Mafube		1 780	1 412

Total investments in associates and JVs		17 322	20 006		143	1 324
Unincorporated joint operations
Moranbah coal project
Refer below for other balances relating to associates and JVs
Included in non-current assets held-for-sale:			1 880			3 133
Associates			1 741			3 133
Listed: Tronox Holdings plc			1 741			3 133
Unlisted: Tumelo⁸
Loans to associates: Tumelo			139
– Current gross			170
– Current impairment allowances			(31)

¹	M – Mining, EN – Energy, T – Export terminal, 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 2021 of R460.09 per share (31 December 2020: R622.81 per share), adjusted for a liquidity discount of 20% (2020: 20%).
⁴	The investment in Tronox SA was sold on 24 February 2021. (Refer note 6.1.4)
⁵	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	The investment in Insect Technology was fully impaired in 2020.
⁷	The investment in GAM was fully impaired in 2019.
⁸	The investment in Tumelo was classified as a non-current asset held-for-sale on 31 December 2020 and subsequently sold on 3 September 2021 as part of the divestment of the ECC operation.

Restrictions

There are no significant restrictions on the ability of associates or JVs 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 JVs.

Refer note 16.3.4 for details with regard to loan commitments relating to associates and JVs.

Refer note 13.4.1 for details with regard to contingent liabilities relating to associates and JVs.

CHAPTER 9: Associates and joint arrangements

Restrictions

Risks

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CHAPTER 9:
Associates and joint arrangements