CHAPTER 1: Broad-based economic value creation

1.1 GROUP CASH VALUE ADDED STATEMENT (UNAUDITED)
 

The cash value added statement shows the wealth the group has created through mining operations and investing activities.

Exxaro generates and creates value to its various stakeholders as follows:

  • Employees receive salaries or wages, share-based payments as well as bonuses (where certain performance conditions are met) and distributions from Mpower 2012
  • The governments of the countries where Exxaro has operations and investments receive various taxes and royalty payments
  • Suppliers and contractors are supported through the procurement of consumables, services and capital goods
  • Shareholders receive a return on their investment through dividends and capital growth in the share price
  • Providers of finance receive a return through interest and other loan costs
  • Communities surrounding the operations of Exxaro benefit through corporate social investment initiatives
  • All stakeholders benefit from continuous reinvestment into the group to ensure sustainability and expansion.

The statement below summarises the total cash wealth created and how it was disbursed among the group's stakeholders. The retained amount was reinvested into the group for the replacement of assets and further development of operations (further value add over time).

VALUE DISTRIBUTION (Rm)

      Group       
For the year ended 31 December     2017 
Rm
 
   2016 
Rm
 
   
Direct economic value generated     13 020     11 226     
Gross revenue from the sale of products and services (including VAT)    25 855     23 369     
Income from investments and interest received     1 688     884     
Operating costs     (14 523)    (13 027)    
Economic value distributed     (8 120)    (6 560)    
Employee salaries, wages and benefits (excluding PAYE)    (2 930)    (3 283)    
PAYE deducted from remuneration paid     (882)    (837)    
Payments to government (taxation contribution)    (1 433)    (1 171)    
Cost of financing (interest paid and other loan costs)    (597)    (595)    
Cash dividend paid, excluding Mpower 2012 beneficiaries     (2 214)    (596)    
Cash dividend paid to Mpower 2012 beneficiaries     (13)    (29)    
Community investments and volunteerism (including donations)    (51)    (49)    
Net economic value retained in the group to maintain and develop operations     4 900     4 666     
Included in the above are:                 
Payments to government (taxation contribution)    (1 433)    (1 171)    
Direct taxes per country (excluding deferred tax)    (790)    (547)    
– RSA     (774)    (529)    
– Netherlands     (16)    (18)    
VAT     (434)    (441)    
– Levied on purchases of goods and services     2 254     1 824     
– Charged on turnover     (2 688)    (2 265)    
Additional amounts collected by the group on behalf of government                 
– Unemployment Insurance Fund     (12)    (13)    
Levies paid to government     (197)    (170)    
– Rates and taxes     (10)    (9)    
– Royalties     (133)    (105)    
– Workers' Compensation Fund     (7)    (7)    
– Unemployment Insurance Fund     (12)    (13)    
– Skills Development Levy     (35)    (36)    
Community investments and volunteerism per region     (51)    (49)    
– Gauteng and corporate projects     (19)    (18)    
– Limpopo     (15)    (12)    
– Mpumalanga     (17)    (19)