Exxaro Resources Limited

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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Acronyms

Adjusted Group Earnings

Group core net profit after tax (excluding SIOC core equity-accounted income) less NOI of Exxaro subsidiaries (excluding WCI of Eyesizwe)

AGM

Annual general meeting

Amakhala SPV

Amakhala Emoyeni RE Project 1 (RF) Proprietary Limited

Anglo

Anglo South Africa Capital Proprietary Limited

ADX

K2018621183 (South Africa) Proprietary Limited

API4

All publications index 4 (FOB Richards Bay 6000/kcal/kg)

Arnot Opco

Arnot Opco Proprietary Limited

AU$

Australian dollar

B-BBEE

Broad-based black economic empowerment

BEE

Black economic empowerment

BEE Parties

External shareholders of Eyesizwe

Black Mountain

Black Mountain Proprietary Limited

CAF

Combined Assurance Forum

Cennergi

Cennergi Proprietary Limited or Cennergi group of companies

CEO

Chief Executive Officer

CFR

Cost and freight

CGU

Cash-generating unit

Chifeng

Chifeng NFC Zinc Co. Limited

Companies Act

Companies Act No 71 of 2008, as amended

CPI

Consumer price index

cps

Cents per share

Curapipe

Curapipe Systems Limited

Calorific value

DBP

Deferred bonus plan

DCF

Discounted cash flow

DEA

Department of Environmental Affairs

DMRE

Department of Mineral Resources and Energy

DMTN

Domestic Medium-Term Note

Dorstfontein

Dorstfontein Coal Mines Proprietary Limited

DVA

Debit value adjustment

EBITDA

Net operating profit before interest, tax, depreciation, amortisation, impairment charges or reversals and net losses or gains on the disposal of assets and investments (including translation differences recycled to profit or loss)

ECC

Exxaro Coal Central Proprietary Limited

ECL(s)

Expected credit loss(es)

EMJV

Ermelo joint venture

ERP

Enterprise Resource Planning

ESD

Enterprise and supplier development

ESG

Environment, social and governance

ESOP

Employee share option scheme

Exxaro

Exxaro Resources Limited

Exxaro Beijing

Exxaro Resources (Beijing) Commercial Company Limited

Exxaro Community NPC

Exxaro Matla Setshabeng Development NPC

Exxaro ESOP SPV

Exxaro ESOP SPV RF Proprietary Limited

Eyesizwe

Eyesizwe (RF) Proprietary Limited, a special purpose private company which has a 30.81% (2020:30%) shareholding in Exxaro

FCTR

Foreign currency translation reserve

FEC(s)

Forward exchange contract(s)

FTSE

Financial Times Stock Exchange

Ferroland

Ferroland Grondtrust Proprietary Limited

FOB

Free on board

FPR:2015

Financial provisioning regulations, 2015

FVOCI

Fair value through other comprehensive income

FVPL

Fair value through profit or loss

GAM

Global Asset Management Limited

Grootegeluk

GHG

Greenhouse gas

GWh

Gigawatt hour

HDSA

The meaning given to it, or any equivalent or replacement term, in the broad-based socio-economic empowerment charter for the South African Mining Industry, developed under section 100 of the MPRDA, as amended or replaced from time to time

HEPS

Headline earnings per share

IAS

International Accounting Standards

IASB

International Accounting Standards Board

IBOR

Inter bank offer rate

ICT

Information and communication technology

IFRIC

IFRS Interpretations Committee

IFRS

International Financial Reporting Standard(s)

Information management

Insect Technology

Insect Technology Group Holdings UK Limited

IPP

Independent Power Producer

Information technology

JIBAR

Johannesburg Interbank Average Rate

JSE

JSE Limited

Joint venture

kcal

Kilocalorie

King IV^TM

King IV Report on Corporate Governance^TM for South Africa, 2016¹

KIO

Kumba Iron Ore Limited

KPI(s)

Key performance indicator(s)

ktCO₂eq

Kilotonnes of carbon dioxide equivalent

LGD

Loss given default

LightApp

LightApp Technologies Limited

Listings Requirements

JSE Listings Requirements

LoM

Life of mine

LTIFR

Lost-time injury frequency rate

LTIP

Long-term incentive plan

Mafube

Mafube Coal Proprietary Limited

MOI

Memorandum of Incorporation

MPRDA

Mineral and Petroleum Resources Development Act 28 of 2002

Million tonnes

NCI(s)

Non-controlling interest(s)

NCOE

Notional cost of employment

NEMA

National Environmental Management Act, 1998

NPC

Not-for-profit company

OCI

Other comprehensive income

Overlooked Colliery

Overlooked Colliery Proprietary Limited

Probability of default

PIC

Public Investment Corporation

PPI

Producer Price Index

Prime Rate

South African prime bank rate

Photovoltaic

PwC

PricewaterhouseCoopers Inc.

RBCT

Richards Bay Coal Terminal Proprietary Limited

Replacement BEE Transaction

BEE transaction which was implemented in 2017 and resulted in Exxaro being held 30% by HDSAs

Rand million

ROCE

Return on capital employed

RSA

Republic of South Africa

SAICA

South African Institute of Chartered Accountants

SAMREC Code

The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves

SIOC

Sishen Iron Ore Company Proprietary Limited

SME(s)

Small and medium enterprise(s)

SMME(s)

Small, medium and micro enterprises

SPA

Sale and purchase agreement

SPPI

Solely payments of principal and interest

SSCC

Semi-soft coking coal

Tata Power

Tata Power Company Limited

TCFD

Task Force on Climate-Related Financial Disclosures

Thungela

Thungela Resources Limited, through its subsidiary South Africa Coal Operations Proprietary Limited

TiO₂

Titanium dioxide

Tronox

Exxaro's investment in Tronox entities

Tronox SA

Tronox KZN Sands Proprietary Limited and Tronox Mineral Sands Proprietary Limited

Tsitsikamma SVP

Tsitsikamma Community Wind Farm Proprietary Limited

TSR

Total shareholder return

Tumelo

Tumelo Coal Mines Proprietary Limited

TVP(s)

Targeted Voluntary Severance Package(s)

United Kingdom

US$

United States dollar

USA

United States of America

VAT

Value Added Tax

WANOS

Weighted average number of shares

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Acronyms

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