Report of the audit and risk committee

for the year ended 31 December 2015

The audit and risk committee reports that it has adopted formal terms of reference as its audit and risk committee Charter, and that it has discharged all of its responsibilities for the current financial year, in compliance with the Charter.

The audit and risk committee is satisfied that an adequate system of internal control is in place to reduce significant risks faced by the group to an acceptable level, and that these controls have been effective throughout the period under review.  The system is designed to manage, rather than eliminate, the risk of failure and to maximise opportunities to achieve business objectives.  This can provide only reasonable, but not absolute assurance.  In addition, the audit and risk committee reviews the financial control systems, the accounting systems and sets the Group’s policy on non-audit services provided by the external auditors. It also monitors compliance with legal requirements, assesses the performance of financial management, approves external audit fees, budgets, plans and performance, and conducts an annual review and assessment of the business risks the group faces.

As required by the JSE Limited Listings Requirements 3.84(h), the audit and risk committee has satisfied itself that Kajal Bissessor, the Chief Financial Officer during the current financial year has the appropriate experience and expertise to fulfil the responsibilities of the finance function.

The approval of the Integrated Report is also the responsibility of the audit and risk committee. The committee members are appointed annually by the shareholders at the Annual General Meeting.

The audit and risk committee has evaluated the consolidated and separate financial statements of Merafe Resources Limited for the year ended 31 December 2015 and based on the information provided to the audit and risk committee, considers that it complies, in all material respects, with the requirements of the various Acts governing disclosure and reporting in the consolidated and separate financial statements.

The audit and risk committee has evaluated the independence of the external auditors and the audit and risk committee is satisfied that the external auditors have remained independent. The audit and risk committee therefore recommends the adoption of the consolidated and separate financial statements by the board.

Karabo Nondumo CA(SA)
Chairperson – Audit and Risk Committee
8 March 2016