As the ultimate parent and reporting entity, Exxaro is responsible for the preparation and submission of the country-by-country report for the Exxaro group in South Africa. The master file was prepared in accordance with commentary in chapter V of the 2017 Transfer Pricing Guidelines (TPG) for Multinational Enterprises and Tax Administrations issued by the OECD, and in line with the requirements of the public notice published by SARS for the submission of the country-by-country report, master file and local file by persons specified therein.
Exxaro is a diversified resources group with business interests in South Africa, Switzerland, China, Australia, the United Kingdom (UK) and Israel.
Refer to who we are for a description of Exxaro's key business areas locally.
Refer to the annual financial statements for a full list of Exxaro's entities per jurisdiction.
Adopted approach
The OECD TPG require that the reporting MNE should list all the tax jurisdictions in which constituent entities of the MNE group are resident for tax purposes. Accordingly, Exxaro has reported on the following jurisdictions within which it does its business:
Business interests in the UK, China and Israel are not regarded as constituent entities as per the OECD guidelines and are thus not reported as such.
Revenue includes revenues from sales of inventory and properties, services, interest and any other amounts, including extraordinary income and gains from investment activities.
According to the OECD TPG, the reporting MNE should report the sum of the profit or loss before income tax for all the constituent entities resident for tax purposes in the relevant tax jurisdiction. The profit or loss before income tax should include all extraordinary income and expense items.
Taxes paid include corporate income tax and dividend withholding tax (foreign and local) paid during the year, and taxes accrued exclude deferred tax and provisions for uncertain tax liabilities.
Offshore business areas
Coal extracted from the South African mines is sold into the overseas markets through the Swiss marketing company, EITAG, which is Exxaro's central offshore sales company. EITAG buys coal from Exxaro Coal and Exxaro Coal Mpumalanga and on-sells the coal products to the ultimate customer. The goods are delivered to Richards Bay Coal Terminal Proprietary Limited (RBCT) and other ports and, from there, directly to the foreign customer. EITAG is responsible for the coal-blending process and the RBCT port cost.
EITAG attracts new customers and develops new markets for Exxaro coal products. Based on the contract concluded with customers, EITAG manages the scheduling of coal volumes, quality types and shipping dates.
EITAG's business strategy is to use the following regional advantages:
Having a central offshore sales company ensures the application of consistent policies and the growth of the Exxaro brand and offshore customer base. EITAG has five employees – one expat employee, one local employee and three contractors.
Exxaro Australia Holdings Proprietary Limited (EAH) is the holding company of the Australian group of companies (the EAH Australian tax group) and does not have any employees. Exxaro Australia Proprietary Limited, a subsidiary of EAH, holds a 50% interest in a JV with Anglo Coal (Grosvenor) Proprietary Limited (Anglo Coal) in the Moranbah project, which is an undeveloped coal resource in exploration stage. Anglo Coal manages the project.
The Moranbah project is located in the Queensland district of Australia.
Exxaro holds a minority investment in the Chifeng Hongye Zinc Smelting Co Limited smelting operations, incorporated in China.
Exxaro owns a 25.85% interest in Insect Technology Group Holdings UK Limited, which is in the process of deregistration.
Exxaro owns a 28.01% interest in LightApp Technologies Limited.
Significant intercompany transactions
Exxaro's transfer pricing policy requires cross-border transactions with group companies to be conducted on an arm's length basis. The policy describes the method to be used as the basis for price determination of coal sales and logistical services rendered.
Important service arrangements within the group are shown in the table below. During 2023, there were no loans between Exxaro and any of its foreign group companies. Exxaro does not maintain unilateral advance pricing agreements in support of its intercompany transactions or tax rulings relating to the allocation of income across countries.
Service | Supply entity | Supply country | Receiving entity | Receiving country | Transfer pricing policy |
Sale of coal | Exxaro Coal and Exxaro Coal Mpumalanga | South Africa | EITAG | Switzerland | Yes |
Provision of warehousing, logistics and blending support | Exxaro Coal | South Africa | EITAG | Switzerland | Yes |
Provision of various business and management support services, including, but not limited to:
|
Exxaro Resources | South Africa | Various | South Africa | Not applicable |
Country-by-country reporting for the year ended 31 December 2023
2023 country-by-country report
Revenues | Profit/(loss) before income tax |
Taxes paid (on cashbasis)2 |
Income tax accrued – current year3 |
Tax rates | |||||||
Tax jurisdiction (country) | Unrelated party | Related party | Total | Stated capital Rm |
Number of employees1 |
Statutory (%) |
Withholding tax (%) |
Effective (%) |
|||
Switzerland | 11 079 | 0 | 11 079 | 236 | (67) | 28 | 205 | 3 | 12 | 5 | |
---|---|---|---|---|---|---|---|---|---|---|---|
Australia | 46 | 0 | 46 | (84) | 0 | 0 | 4 413 | 0 | 30 | ||
South Africa | 30 778 | 12 437 | 43 215 | 21 965 | (2 535) | 2 740 | 30 468 | 6 810 | 27 | ||
Total | 41 903 | 12 437 | 54 340 | 22 117 | (2 602) | 2 768 | 35 086 | 6 813 | 18 |
2022 country-by-country report
Revenues | Profit/(loss) before income tax (Rm) |
Taxes paid (on a cash basis)2 (Rm) |
Income tax accrued – current year3 (Rm) |
Tax rates | |||||||
Tax jurisdiction (country) |
Unrelated party (Rm) |
Related party (Rm) |
Total (Rm) |
Stated capital (Rm) |
Number of employees1 |
Statutory (%) |
Withholding tax (%) |
Effective (%) |
|||
Switzerland | 21 393 | 0 | 21 393 | 453 | (24) | 54 | 174 | 2 | 12 | 5 | |
Australia | 42 | 0 | 42 | (77) | 0 | 0 | 4 302 | 0 | 30 | ||
South Africa | 43 940 | 22 365 | 66 305 | 38 748 | (4 097) | 3 722 | 30 830 | 6 743 | 28 | ||
Total | 65 375 | 22 365 | 87 740 | 39 124 | (4 121) | 3 776 | 35 306 | 6 745 | 19 |
Note that equity-accounted investment income is reflected in the country of incorporation.
1 | The number of employees includes permanent employees and excludes FTEs and contractors. |
2 | Taxes paid include corporate income tax and dividend withholding tax |
3 | Income tax accrued excludes deferred tax and provision for uncertain tax liabilities. |
Our legal entities and investments
Tax jurisdiction and nature of business
Name of entity | Main business activity | Tax residency | Segment | Nature |
Exxaro FerroAlloys Proprietary Limited | Manufacturing of ferrosilicon powder | South Africa | Ferrous | Subsidiary |
Gravelotte Iron Ore Company Proprietary Limited | Land rental | South Africa | Ferrous | Subsidiary |
Sishen Iron Ore Company Proprietary Limited | Exploration, extraction, beneficiation, marketing, sale and shipping of iron ore | South Africa | Ferrous | Investment |
Exxaro Resources Limited | Shareholder with interests in coal, energy and ferrous markets | South Africa | Ultimate shareholder | Ultimate shareholder |
Exxaro Coal Proprietary Limited | Mining company focused on the extraction, processing and selling of coal | South Africa | Coal | Subsidiary |
Exxaro Coal Mpumalanga Proprietary Limited | Mining company focused on the extraction, processing and selling of coal | South Africa | Coal | Subsidiary |
Exxaro Reductants Proprietary Limited | Carbon reductant production/marketing – the company ceased all activities at the end of 2023 | South Africa | Coal | Subsidiary |
Coastal Coal Proprietary Limited | The company is in a mining rehabilitation stage and delivers rehabilitation services to other subsidiaries | South Africa | Coal | Subsidiary |
The Vryheid (Natal) Railway, Coal and Iron Company Proprietary Limited | The company is in a mining rehabilitation stage | South Africa | Coal | Subsidiary |
Richards Bay Coal Terminal Proprietary Limited | Coal exporter | South Africa | Coal | Investment |
Mafube Coal Mining Proprietary Limited | Mining company focused on the extraction, processing and selling of coal | South Africa | Coal | Investment |
Rocsi Holdings Proprietary Limited | Investment holding company | South Africa | Investment holding company | Subsidiary |
Exxaro International Trading AG, Zug | Exxaro’s central offshore sales company | Switzerland | Coal | Controlled foreign company |
Exxaro Australia Holdings Proprietary Limited | Austria Investment holding company | Australia | Investment holding company | Controlled foreign company |
Exxaro Australia Proprietary Limited | Mineral project evaluation and development | Australia | Coal | Controlled foreign company |
Cennergi Holdings Proprietary Limited | Investment holding company | South Africa | Energy | Subsidiary |
Cennergi Proprietary Limited | Service provider to energy sector | South Africa | Energy | Subsidiary |
Amakhala Emoyeni Re Project 1 Proprietary Limited | Generation and supply of electricity | South Africa | Energy | Subsidiary |
Tsitsikamma Community Wind Farm Proprietary Limited | Generation and supply of energy | South Africa | Energy | Subsidiary |
Cennergi Services Proprietary Limited | Dormant company | South Africa | Energy | Subsidiary |
Lephalale Solar Proprietary Limited | Provider of photovoltaic energy – in construction phase | South Africa | Energy | Subsidiary |
K2021699141 South Africa Proprietary Limited | Dormant company | South Africa | Energy | Subsidiary |
Exxaro Insurance Company Limited | Registered short-term insurer | South Africa | Insurance | Subsidiary |
Eyesizwe RF Proprietary Limited | Investment holding company | South Africa | SPV | Subsidiary |
Exxaro ESOP SPV (RF) Proprietary Limited | Holding company | South Africa | SPV | Subsidiary |
Exxaro Employee Share Ownership Trust | Empowerment of beneficiaries | South Africa | SPV | Trust |
Exxaro Aga Setshaba NPC | Public benefit organisation | South Africa | SPV | Subsidiary |
Exxaro People Development Initiative NPC | Dormant company | South Africa | SPV | Subsidiary |
Exxaro Chairman’s Fund | Public benefit organisation (activities ceased end 2023) | South Africa | SPV | Trust |
Exxaro Foundation Trust | Dissolved | South Africa | SPV | Trust |
Exxaro Mountain Bike Academy NPC | Mountain biking to historically disadvantaged | South Africa | SPV | Subsidiary |
Exxaro Employee Empowerment Trust | Exxaro shares employees incentives | South Africa | SPV | Trust |
Exxaro Environment Rehabilitation Fund | Rehabilitation of mine upon closure | South Africa | SPV | Fund |
Matla and Arnot Rehabilitation Trust Fund | Rehabilitation of mine upon closure | South Africa | SPV | Fund |
Ferroland Grondtrust Proprietary Limited | Farming activities | South Africa | Farming | Subsidiary |
Colonna Properties Proprietary Limited | Property lessor | South Africa | Property lessor | Subsidiary |
Exxaro Properties (Groenkloof) Proprietary Limited | Property holding company | South Africa | Property holding company | Subsidiary |
Exxaro Base Metals and Industrial Minerals Holdings Proprietary Limited | Investment holding company | South Africa | Base metals | Subsidiary |
Black Mountain Mining Proprietary Limited | Exploration, development, treatment, production and sale of zinc, lead, copper and associated mineral concentrates | South Africa | Base metals | Investment |
Exxaro Holdings Proprietary Limited | Investment holding company | South Africa | Investment holding company | Subsidiary |
Chifeng Hongye Zinc Smelting Co Limited | Smelting operations | China | Smelting operations | Investment |
Insect Technology Group Holdings UK Limited | Dormant, process of deregistration | United Kingdom | Dormant, process of deregistration | Investment |
LightApp Technologies Limited | Technology company | Israel | Energy | Investment |
Disclaimer
Opinions expressed herein are, by nature, subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Exxaro Resources (the company) to differ materially from those expressed or implied in the forward-looking statements. Financial forecasts and data given herein are estimates based on the reports prepared by experts who, in turn, relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data. No representation is made as to the completeness or correctness of the opinions, forecasts or data contained herein. Neither the company, nor any of its affiliates, advisers or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made, and the company does not undertake any obligation to publicly update or revise any of its opinions or forward-looking statements, whether to reflect new data or future events or circumstances. Any forward-looking information has not been audited, reviewed or otherwise reported on by the external auditors.