Our approach to governance

Merafe Board

The Chairperson is responsible for ensuring that:

• the Board provides effective leadership;
• the Board maintains ethical standards;
• Merafe develops and implements strategies aimed at achieving its sustainability; and
• the Board and its committees are effective.

The Board is responsible for:

• governance of the Merafe Group on behalf of its shareholders and stakeholders;
• its own governance;
• strategy, strategic decision-making and risk tolerance;
• assessment of performance;
• engagement with stakeholders;
• Merafe's approach to its social responsibility, safety, health, the environment, ethics and risk; and
• IT governance.

Abiel Mngomezulu (c)
Matsotso Vuso
Katlego Tlale
David McGluwa
Nonhlanhla Mabusela-Aikhuere
Daniel Green
Jeff Mclaughlan
Zanele Matlala (CEO)
Ditabe Chocho (FD)

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Key issues in 2023 included:

Safety, Merafe strategy, stakeholder engagement, Merafe sustainability, the Venture performance and sustainability, IT governance and risk management, approval of annual financial statements and Integrated Annual Report, approval of interim results and considering the payment of dividends, impairment considerations, review of Board committee composition, composition review and approval of various charters, policies and mandates and committees' terms of reference, King IV analysis, review of effectiveness of internal controls, review of compliance and consideration of investment and diversification opportunities and conducting new transactions, attending and finalising transactions involving PGMs, considering changes to the JSE Listings Requirements and the Companies Amendment Bill.

Key issues in 2023 included:

Review work of external auditors, assess independence of external auditors, review risk register, monitor compliance with statutory requirements, assess adequacy of internal controls and compliance, monitor and consider all tax returns and matters related to SARS, risk management workshop, oversee forex and interest rate hedging policies, IT governance implementation, assess formal tax strategy and policy document, reviewed and approved Integrated Annual Report and assurance process, recommend annual financial statements and reviewed interim results and impairment considerations, recommended Integrated Annual Report for approval by Board, assessment of Financial Director, review terms of reference, review internal audit function, King IV analysis and compliance as well as the attestation by the CEO/FD in the annual financial statements, review of JSE's pro-active financial statement monitoring report, assessing JSE guidance papers on sustainability and climate change reporting, assessing changes to the JSE Listings Requirements, noting the Companies Amendment Bill and overseeing internal auditors. The committee also reviewed and assessed relevant legislation applicable to Merafe, the Venture and the Committee and assessed the Company's compliance with King IV.

Key issues in 2023 included:

Composition of all committees, attending benchmarking exercise of directors' executive remuneration, recommended approval of remuneration policy to Board, approved CEOs (individual) and business performance KPIs, evaluated Executive Committee's individual and business performance against objectives, reviewed executive contracts, reviewed remuneration policy and approval of the Board diversity policy, and noting the Companies Amendment Bill.

Executive Committee
of the Venture

The Executive Committee consists of the heads of all the Venture's divisions and the Managing Director of the Venture. The committee meets at least once a month, recommends policies and strategies and is responsible for the implementation of strategy and carrying out the Board's mandates and directives. It deals with all executive management business and is responsible for all material matters that are not the responsibility of the Board. It also assists with the execution of Merafe's compliance and disclosure obligations.

Merafe is represented by Zanele Matlala and Ditabe Chocho.

3.84(a)

There must be a policy evidencing a clear balance of power and authority at Board level to ensure that no one director has unfettered powers.

Our Board Charter clearly demonstrates that there is a clear balance of power and authority at Board level and that no one director has unfettered powers. We refer you to governance in this report.

3.84(b)

Issuers must have a CEO and a Chairperson and these positions must not be held by the same person.

The Chairperson must either be an independent director or the issuer must appoint a lead independent director as defined in King IV.

The CEO and Chairperson positions in Merafe are held by different people and Merafe's Chairperson is an independent non-executive director as defined in King IV. We refer you to governance and chairperson's report in this report.

Mr Mngomezulu is the Chairperson. In accordance with King IV, the Board conducted an in-depth review of both his performance and independence and concluded that his independence was not affected or impaired by his length of service. Mr Mngomezulu is due to retire at the 2024 annual general meeting and has not offered himself for re-election, having served on the Board since September 2010.

3.84(c)

All issuers must in accordance with King IV appoint an (i) Audit Committee, (ii) a committee responsible for remuneration, and (iii) a Social and Ethics Committee.

The composition of such committees must comply with the Companies Act and should be considered in accordance with King IV and each committee must consist of three members.

The composition of such committees, a brief description of their mandates, the number of meetings held and any other relevant information must be disclosed in the annual report.

Merafe has combined its Audit and Risk Committee. Its membership is set out here in this report. The committee currently has three members, all of whom are independent non-executive directors, as required by the Companies Act and set out in King IV. The Chairperson of the Board, Chief Executive Officer and Financial Director are invited to attend committee meetings.

As previously indicated, Merafe has appointed a combined Remuneration and Nomination Committee. The committee has three members, two of whom are independent non-executive directors. The Chairperson of the Board is a member of the Remuneration Committee and is Chairperson of the Nomination Committee.

Merafe has a Social, Ethics and Transformation Committee. It comprises five members, with the majority being non-executive directors.

The composition of the committees, the mandates, activities and number of meetings held are set out in governance on this report.

Our Chief Executive Officer and Financial Director continued to serve as permanent invitees to the Audit and Risk Committee.

3.84(d)

A brief curriculum vitae of each director standing for election or re-election must accompany the relevant notice of meeting.

Brief curricula vitae of our directors can be found in governance in this report.

3.84(e)

Capacity of directors in relation to executive,
non-executive and independent must be categorised and disclosed in the relevant documentation.

The curricula vitae mentioned at 3.84(d) also contain information as to whether a director is independent, non-executive or executive. The composition of the Merafe committees is in accordance with the requirements of the JSE Listings Requirements, the Companies Act and King IV.

3.84(f)

Issuers must have a full-time executive financial director.

Merafe has a full-time Financial Director who does not hold any other position nor does he have any other commitments that could be considered as full or part-time employment.

3.84(g)

The provisions deal with the duties of the Audit Committee which include (i) considering, on an annual basis, and satisfying itself on the appropri-ateness of the expertise and experience of the financial director; (ii) ensuring that the issuer has appropriate financial reporting procedures which are operating, which includes consideration of all entities included in the group IFRS financial statements and en-sure that it has access to all the financial information of the issuer to allow the issuer to effectively prepare and report on its financial statements; (iii) considering the information detailed in paragraph 3.84(g)(iii) and provided by the audit firm and individual auditor in their assessment of the suitability of the appointment or reappointment of the auditor; and (iv) ensuring that the appointment of the auditor is presented and included as a resolution at the annual general meeting of the issuer pursuant to section 61(8) of the Companies Act.

Our Audit and Risk Committee annually considers and satisfies itself of the appropriateness of the expertise and experience of the Financial Director, and has reported in its Audit and Risk Committee report that it is satisfied with the appropriateness of the expertise and experience of the Financial Director. The Audit and Risk Committee, as contemplated in paragraphs 3.84(g)(ii) to (iv), also ensured that Merafe has established appropriate financial reporting procedures and that those procedures are operating, which included consideration of all entities included in the consolidated group IFRS financial statements; ensured that it has access to all the financial information of Merafe to allow Merafe to effectively prepare and report on the financial statements of Merafe; requested from the audit firm (and if necessary consults with the audit firm on) the information detailed in paragraph 3.84(g)(iii) read with paragraphs 3.86 to 3.87 in their assessment of the suitability for appointment of their current or a prospective audit firm and designated individual partner both when they are appointed for the first time and thereafter annually for every reappointment and notwithstanding the provisions of section 90(6) of the Companies Act; ensured that the appointment of the auditor is presented and included as a resolution at the annual general meeting of Merafe pursuant to section 61(8) of the Companies Act.

3.84(h)

The provision deals with the competence, qualifications and experience of the Company Secretary and the Board responsibility in relation thereto.

The Remuneration and Nomination Committee as well as the Board assessed the competence, qualifications and experience of the Company Secretary (CorpStat Governance Services, represented by William Somerville) against various criteria and a rating scale, and they have agreed that the firm is sufficiently qualified, competent and experienced to hold the position of Company Secretary. The Board made their assessment in a closed Board meeting with the Company Secretary being recused from the meeting.

3.84(i)

The provision deals with a broader diversity policy.

Merafe's diversity policy prescribes that at least 30% of the Board shall be female.

At 31 December 2023, three of the nine directors were female (33%). Merafe's diversity policy prescribes targets for the racial composition of the Company, namely that the majority of the Board should be black. Seven of the nine directors are black (78%). Please see governance depicting the Merafe board of directors and which covers the broader diversity information as contemplated by the JSE Listings Requirements.

Merafe has a Board diversity policy which includes additional diversity criteria, namely culture, age, field of knowledge, skills and experience (in addition to gender and race).

The Remuneration and Nomination Committee undertakes, when nominating and recommending directors to the Board, to take into account the principles and aims of the diversity policy of the Company.

3.84(j)

The provision deals with the remuneration policy and implementation report.

The remuneration policy and implementation report are set out in the remuneration report in this report.