exxaro - Notes


	Notes

1.	Basis of preparation
	The format of the condensed report has been revised to bring it in line with the amendments to International Accounting Standard (IAS) 34, Interim Financial Reporting. IAS 34 has been amended following the revision of IAS 1 Presentation of Financial Statements and IFRS 8 Operating Segments. These amendments were early adopted in 2008. This condensed report complies with International Accounting Standard 34, Interim Financial Reporting, and schedule 4 Part iv of the South African Companies Act. The financial statements from which these group financial results have been derived are prepared on the historical basis excluding financial instruments and biological assets, which are fair valued, and conform to International Financial Reporting Standards. The accounting policies adopted are consistent with those applied in the annual financial statements for the year ended 31 December 2008. During 2009 the following accounting pronoucements became effective: Amended IFRS 2 Share-based Payments, Revised IAS 23 Borrowing Costs, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Constructions of Real Estate, IFRIC 16 Hedges of Net Investments in a Foreign Operation, Improvements to Financial Reporting Standards 2008 (amendments to various standards) and Circular 3/2009 Headline Earnings. These pronouncements had no material impact on the accounting of transactions or the disclosure thereof.


	Year ended 31 December	2009 Audited Rm	2008 Audited Rm
2.	Profit before tax is arrived at after
	Depreciation and amortisation of intangible assets	(1 136)	(898)
	Financing costs	(560)	(394)
	Interest received	145	153
	Net realised foreign currency exchange (losses)/gains	(576)	476
	Net unrealised foreign currency exchange (losses)/gains	(45)	39
	Derivative instruments held for trading gains/(losses)	379	(69)
	Fair value adjustments on financial instruments	26	(26)
	Impairment charges and reversals (note 3)	(1 435)	(20)
	Net profit on disposal of investments		7
	Net deficit on disposal of property, plant and equipment	(88)	(66)
3.	Impairment charges and reversals
	Impairment of property, plant and equipment	(1 435)	(21)
	Reversal of impairment of investments		1
	Total impairments and reversals before and after tax	(1 435)	(20)
4.	Net financing cost
	Interest expense and loan costs	460	283
	Finance leases	66	63
	Interest income	(145)	(153)
	Net interest expense	381	193
	Interest adjustment on non-current provisions	34	48
	Net financing cost as per income statement	415	241
5.	Tax rate reconciliation	%	%
	Tax as a percentage of profit before tax	42,8	13,1
	Tax effect of
	– assessed losses not provided for	(1,5)	(0,3)
	– capital (losses)/profits	(1,3)	0,2
	– disallowable expenditure	(1,3)	(0,7)
	– reclassification of previously disallowable expenditure		1,1
	– exempt income	2,2	1,0
	– special tax allowances	2,1
	– share of associates' and joint ventures'	29,6	11,9
	– tax rate differences	0,5	0,4
	– Secondary Tax on Companies (STC)		(0,1)
	– withholding tax		(0,4)
	– Controlled Foreign Company profits (CFC)	(0,8)	(0,1)
	– foreign exchange differences		(0,1)
	– prior year adjustment	1,7	1,7
	– rate change on deferred tax balance		0,3
	– derecognition of deferred tax asset	(46,0)
		28,0	28,0

	At 31 December	2009 Audited Rm	2008 Audited Rm
6.	Investments
	Unlisted investments in associates
	– directors’ valuation	14 165	13 162
	Unlisted investments included in other financial assets
	– directors’ valuation	408	387
	Year ended 31 December
7.	Dividends paid
	Cash dividends	1 050	957
	Cash dividends paid to minorities		27
	Total dividends paid	1 050	984
8.	Increase in joint venture
	During July 2009, the group invested R1 082 million in Mafube Coal Mining
	(Pty) Limited, its joint venture with Anglo South Africa Capital (Pty) Limited,
	which is included in the coal segment results.
	The increase consist of the following:
	Property, plant and equipment	1 156
	Non-current financial assets	3
	Inventories	36
	Trade and other receivables	49
	Deferred tax	(26)
	Provisions	(30)
	Trade and other payables	(106)
		1 082

9.	Net debt
	Net debt is calculated as being interest-bearing borrowings less cash and cash equivalents.

10.	Contingent liabilities
	Includes guarantees in the normal course of business from which it is anticipated that no material liabilities will arise. This includes guarantees to banks and other institutions. The increase in 2008 and 2009 is mainly attributable to guarantees to the Department of Minerals and Energy in respect of environmental liabilities on immediate closure of mining operations.

11.

Contingent assets

An outstanding insurance claim of R99 million for the Furnace 2 incident at Exxaro TSA Sands (Pty) Limited for which it is probable that settlement will be received in the first half of 2010.
A surrender fee of R59 million in exchange for the exclusive right to prospect, explore, investigate and mine for coal within a designated area in Central Queensland and Moranbah, Australia, conditional on the grant of a mining lease.

12.	Related-party transactions
	During the period the company and its subsidiaries, in the ordinary course of business, entered into various sale and purchase transactions with associates and joint ventures. These transactions were subject to terms that are no less favourable than those arranged with third parties.

13.	Post-balance sheet event
	The directors are not aware of any matter or circumstance arising after the balance sheet date up to the date of this report, not otherwise dealt with in this report.

14.	JSE Limited Listings Requirements
	The announcement has been prepared in accordance with the Listings Requirements of the JSE Limited.

15.	Corporate governance
	The Group complies in all material respects with the Code of Corporate Practice and Conduct published in the King III Report on Corporate Governance.

16.

Audit opinion

The auditors, Deloitte & Touche, have issued their opinion on the group’s financial statements for the year ended 31 December 2009. The audit was conducted in accordance with International Standards on Auditing. They have issued an unmodified audit opinion. A copy of their audit report is available for inspection at the company’s registered office. These summarised financial results have been derived from the group financial statements and are consistent in all material respects, with the group annual financial statements.