Group (R’million) |
Freehold land and buildings |
Leasehold land and buildings |
Plant, vehicles and equipment |
Right of use assets** |
Total | |
11 | Property, plant and equipment | |||||
11.1 | Movement of the group property, plant and equipment | |||||
2020 | ||||||
Carrying value at the beginning of the year | ||||||
Cost | 2 021,2 | 10,8 | 8 567,5 | 16,3 | 10 615,8 | |
Accumulated depreciation and impairment | (619,8) | (10,4) | (4 994,9) | (14,3) | (5 639,4) | |
Net balance at beginning of year# | 1 401,4 | 0,4 | 3 572,6 | 2,0 | 4 976,4 | |
Current year movements – cost | ||||||
Effective adoption of IFRS 16 as at 1 October 2019 | – | – | – | 356,4 | 356,4 | |
Additions | 212,5 | – | 724,6 | 84,4 | 1 021,5 | |
Disposals | (50,6) | – | (328,8) | (45,8) | (425,2) | |
Transfer to assets held for sale (refer note 34) | (137,4) | – | (545,7) | (7,8) | (690,9) | |
Lease modifications*** | – | – | – | (35,9) | (35,9) | |
Cost movements for current year | 24,5 | – | (149,9) | 351,3 | 225,9 | |
Current year movements – accumulated depreciation and impairment | ||||||
Depreciation* | (66,4) | – | (590,4) | (123,2) | (780,0) | |
Impairment (refer note 13) | – | – | (282,4) | – | (282,4) | |
Disposals | 16,0 | – | 292,6 | 45,5 | 354,1 | |
Transfer to assets held for sale (refer note 34) | 33,5 | – | 517,4 | 3,7 | 554,6 | |
Lease modifications*** | – | – | – | 12,6 | 12,6 | |
Exchange rate adjustments | – | – | (1,8) | – | (1,8) | |
Accumulated depreciation and impairment movement for current year | (16,9) | – | (64,6) | (61,4) | (142,9) | |
Carrying value at the end of the year | ||||||
Cost | 2 045,7 | 10,8 | 8 417,6 | 367,6 | 10 841,7 | |
Accumulated depreciation and impairment | (636,7) | (10,4) | (5 059,5) | (75,7) | (5 782,3) | |
Net balance at end of year | 1 409,0 | 0,4 | 3 358,1 | 291,9 | 5 059,4 | |
2019 | ||||||
Carrying value at the beginning of the year | ||||||
Cost | 1 892,8 | 10,8 | 7 897,0 | 16,3 | 9 816,9 | |
Accumulated depreciation and impairment | (540,1) | (10,4) | (4 654,2) | (13,0) | (5 217,7) | |
Net balance at beginning of year | 1 352,7 | 0,4 | 3 242,8 | 3,3 | 4 599,2 | |
Current year movements – cost | ||||||
Additions | 159,5 | – | 944,0 | – | 1 103,5 | |
Disposals | (0,8) | – | (65,3) | – | (66,1) | |
Transfer to assets held for sale (refer note 34) | (35,6) | – | (210,9) | – | (246,5) | |
Exchange rate adjustments | 5,3 | – | 2,7 | – | 8,0 | |
Cost movements for current year | 128,4 | – | 670,5 | – | 798,9 | |
Current year movements – accumulated depreciation and impairment | ||||||
Depreciation* | (65,2) | – | (555,1) | (1,3) | (621,6) | |
Disposals | 0,8 | – | 62,9 | – | 63,7 | |
Impairment (refer note 13) | (34,0) | – | (63,8) | – | (97,8) | |
Reversal of impairment | – | – | 8,7 | – | 8,7 | |
Transfer to assets held for sale (refer note 34) | 20,3 | – | 208,7 | – | 229,0 | |
Exchange rate adjustments | (1,6) | – | (2,1) | – | (3,7) | |
Accumulated depreciation and impairment movement for current year | (79,7) | – | (340,7) | (1,3) | (421,7) | |
Carrying value at the end of the year | ||||||
Cost | 2 021,2 | 10,8 | 8 567,5 | 16,3 | 10 615,8 | |
Accumulated depreciation and impairment | (619,8) | (10,4) | (4 994,9) | (14,3) | (5 639,4) | |
Net balance at end of year | 1 401,4 | 0,4 | 3 572,6 | 2,0 | 4 976,4 |
* | Relates to depreciation for total operations. | |
** | Refer 11.4 for detailed breakdown of right of use assets. | |
*** | Relates to modifications to leases due to changes in terms and rates. | |
# | Opening balance includes assets previously reported as capitalised leases which has now become right-of-use assets. |
11.2 | Borrowing costs amounting to R7,4 million relating to plant was capitalised during the year (2019: R11 million) at an average effective rate of 6,5% (2019: 8%). A full list of title deeds are available at the registered office for inspection. |
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11.3 | Adoption of IFRS 16 Leases IFRS 16 introduces significant changes to lease accounting as it removes the distinction between operating and finance leases under IAS 17 and requires a lessee to recognise a right of use asset and a lease liability at commencement for all leases, except for short-term leases and leases of low-value assets. IFRS 16 brings the majority of the group’s long-term property, equipment, vehicles and other leases onto the statement of financial position. The group has elected to apply IFRS 16 using the modified retrospective approach. As prescribed by IFRS 16, lease liabilities are measured at the present value of remaining lease payments discounted at the incremental borrowing rate at the date of initial application. The group has elected to measure right-of-use assets on transition date (1 October 2019) at their carrying amounts as if IFRS 16 had applied since the lease commencement dates, discounted using the incremental borrowing rate at the date of initial application. |
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11.4 | Right of use assets The group has lease contracts for various items of property, vehicles, information technology and plant and equipment used in its operations. The property leases have lease terms between two to 10 years, vehicles between one to eight years, and all other leases are between two to five years. The group’s obligations under its leases are secured by the lessor’s title to the leased assets. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
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