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Exxaro Resources Limited
Annual Financial Statements 2022
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CHAPTER 13:Provisions and contingencies

  • 13.3 PROVISIONS
  Group 
Environmental rehabilitation      
Note  Restoration 
Rm
 
Decommis- 
sioning 
Rm
 
Residual 
impact 
Rm
 
Other site 
closure 
cost 
Rm
 
Other1
Rm
 
Total 
Rm
 
At 31 December 2022 
At beginning of the year  1 479  350  407  56  10  2 302 
Charge/(reversal) to operating expenses  6.1.3  81  (72) 385  80      474 
– Additional provisions  116      390  80      586 
– Unused amounts reversed  (35) (72) (5)         (112)
Unwinding of discount rate on rehabilitation costs  12.1.2  148  37  43          228 
Provisions capitalised to property, plant and equipment  10.1.3      (10)         (10)
Utilised during the year  (15)     (3) (18) (6) (42)
Utilised not yet paid  (11)                 (11)
Total provisions at end of the year  1 682  305  832  118  2 941 
Non-current  1 565  305  800  92      2 762 
Current  117      32  26  179 
1 Relates to a constructive obligation created with certain BEE minorities within the Cennergi group to receive distributions in proportion to their percentage interest prior to their in-substance share options being exercised.

 

Group 
Environmental rehabilitation      
Note  Restoration 
Rm
 
Decommis- 
sioning 
Rm
 
Residual 
impact 
Rm
 
Other site 
closure 
cost 
Rm
 
Other1
Rm
 
Total 
Rm
 
At 31 December 2021 
At beginning of the year  1 420  295  323  79  14  2 131 
(Reversal)/charge to operating expenses  6.1.3  (46) (11) 63  (1) (1)
– Additional provisions  122  10  109  241 
– Unused amounts reversed  (168) (21) (46) (1) (1) (237)
Unwinding of discount rate on rehabilitation costs  12.1.2  161  36  44  242 
Provisions capitalised to property, plant and equipment  10.1.3  32  32 
Utilised during the year  (14) (6) (24) (4) (48)
Reclassification to non-current liabilities held-for-sale  (42) (2) (17) (59)
Total provisions at end of the year  1 479  350  407  56  10  2 302 
Non-current  1 408  350  398  43  2 201 
Current  71  13  101 
1 Relates to a constructive obligation created with certain BEE minorities within the Cennergi group to receive distributions in proportion to their percentage interest prior to their in-substance share options being exercised.

 

Company
Environmental
rehabilitation
Note Restoration
Rm
Total
Rm
At 31 December 2022
At beginning of the year 39 39
Charge to operating expenses 6.1.3 7 7
– Unused amounts reversed 7 7
Unwinding of discount rate on rehabilitation costs 12.1.2 3 3
Total provisions at end of the year 49 49
Non-current 49 49

 

Company
Environmental
rehabilitation
Note Restoration
Rm
Total
Rm
At 31 December 2021
At beginning of the year 37 37
Reversal to operating expenses 6.1.3 (1) (1)
– Unused amounts reversed (1) (1)
Unwinding of discount rate on rehabilitation costs 12.1.2 3 3
Total provisions at end of the year 39 39
Non-current 39 39

Funding

The FPR:2015 contains funding requirements in the form of financial guarantees as well as trust funds. Exxaro has financial guarantees per mine, which are ceded to the DMRE, as well as environmental trust funds.

The current funding excess compared to the present values of the environmental provisions is demonstrated as follows:

    Group 
At 31 December  Note  2022 
Rm
 
2021 
Rm 
Total environmental provisions  (2 819) (2 236)
Present value of unscheduled restoration and decommissioning costs discounted over LoM  (1 987) (1 829)
Present value of unscheduled post-closure residual impact costs discounted over LoM and five years of rehabilitation  (832) (407)
Environmental rehabilitation funds in trust1  10.3.2  2 286  2 267 
Financial guarantees ceded to the DMRE  13.4.1  3 606  3 606 
Current funding excess    3 073  3 637 
1 Includes both the environmental rehabilitation funds classified as financial assets at FVPL and financial assets at amortised cost.

The table below demonstrates the undiscounted environmental rehabilitation cost in the event of immediate closure:

    Group 
At 31 December    2022 
Rm
 
2021 
Rm
 
Estimated unscheduled restoration and decommissioning closure costs    (7 105)  (6 404) 
Estimated unscheduled post-closure residual impact cost    (1 322)  (1 177)
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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 Directors' approval
2.3 Certificate by the group company secretary
2.4 Report of the directors
2.5 Audit committee report
2.6 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 Disposals of subsidiaries
8.4 Impairment charges of non-current assets

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 and contingent assets

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: 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