Notes to the summarised consolidated financial statements

On 6 March 2026, the Board approved the audited consolidated annual financial statements of the Group and the Company for the year ended 31 December 2025.

These summarised consolidated financial statements have been prepared under the supervision of Ditabe Chocho CA(SA) (Financial Director), in accordance with the framework concepts and the measurement and recognition requirements of the IFRS^® Accounting Standards and the Financial Pronouncements as issued by the Financial Reporting Standards Council and SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and containing the information required by IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and the Companies Act of South Africa, No. 71 of 2008.

The summarised consolidated financial statements are presented in South African Rand, which is the functional currency of the Group.

The summarised consolidated financial statements are extracted from audited information but is not itself audited and the Board is responsible for the accuracy of the extraction.

The audited consolidated annual financial statements from which the summarised consolidated financial statements were derived have been audited by the Group's auditors, Deloitte & Touche. Their unmodified audit report along with the audited consolidated annual financial statements can be obtained from the Company on written request from Merafe's Company Secretary, CorpStat Governance Services Proprietary Limited (w.somerville@mweb.co.za) and are available on the Company's website.

Any reference to future financial performance included in these summarised consolidated financial statements has not been audited or reported on by the Company's auditors.

Several of the accounting policies and disclosures require the determination of fair value for both financial and nonfinancial assets and liabilities.

Fair values are determined for measurement and disclosure purposes based on the below methods.

The calculation of headline and diluted HEPS is based on the earnings attributable to ordinary shareholders – as used in the calculation for basic earnings, adjusted in terms of Circular 1/2023.

Geographical areas of ferrochrome sales to customers

The majority of customers are stainless steel mills located at the following revenue destinations:

Geographical areas of chrome ore sales from customers

Sales to the following customers individually comprise more than 10% of total sales:

Related-party transactions and balances

During the current year, management reviewed its related party relationships in accordance with IAS 24: Related Party Disclosures. The Glencore plc Group was identified as a related party taking into consideration the shareholding and related significant influence coupled with the substance of the relationship. Significant transactions and balances with all entities within the Glencore plc Group are therefore disclosed together with the comparative figures.

All related-party transactions relate to Merafe's attributable 20.5% interest in the Venture. There are no outstanding commitments as at 31 December 2025.

The Group’s effective tax rate is 24.88% (2024: 24.72%) for the year ended 31 December 2025.

During the reporting period, impairment adjustments were made relating to these specific assets that were fully written off: the Tswelopele and Bokamoso pelletising plants and the Wonderkop smelter. This was in light of grounds pointing to the likely impairment of some of our smelting operations. This conclusion was reached after considering several critical factors, which included the adverse state of the ferrochrome market and the uncompetitive level of our operating costs. The total impairment loss at reporting period was R222 million (2024: R575 million).

During the reporting period, inventory was written down to its net realisable value due to low commodity prices at the reporting date. This resulted in a loss of R4 million (2024: R79 million).

Assumptions based on the current economic environment have been made, which management believes provide a reasonable basis upon which to estimate the future liability. Actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works, which will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically viable rates.

The change in discount rate and revision of the rehabilitation period from 30 to 15 years on the non-operating smelters, had a significant impact on the rehabilitation provision. The discount rate used in the calculation of the provision as at 31 December 2025 equalled 7.5% (2024: 7.47%).

The Group is subject to direct and indirect tax in the South African jurisdiction. The Group’s subsidiary undertakes various cross-border transactions within the Venture, subject to the Group’s transfer pricing policies. As a result, significant judgment is required to determine the Group’s provisions for income taxes. The income tax and annual assessments are subject to examination within prescribed periods by the South African Revenue Service (SARS).

As previously reported, SARS finalised the audit of the previously reported transfer pricing matter on 30 October 2024 and adjusted (increased) the Company’s taxable income for the 2016 and 2017 years. Pursuant to the finalisation of the audit, SARS issued additional assessments on 30 October 2024 levying additional income tax, dividends tax, understatement penalties, and interest in the aggregate amount of R406 million against the Company for the 2016 and 2017 years.

The Company disagrees with the additional assessments. After taking several procedural steps, including submitting an objection that was ultimately denied by SARS on 30 September 2025, the Company filed a notice of appeal in November 2025. This formally initiates the Tax Court appeal process. Furthermore, the Company is currently awaiting SARS’ response regarding its request to review the partial suspension of payment for the disputed tax debt.

Management continues to rely on opinions obtained from external legal and tax advisers to inform and support the significant judgement required in interpreting relevant tax legislation. The matter has been disclosed as a contingent liability as its outcome, due to the dispute, remains uncertain and any potential tax exposure cannot be reliably estimated. Accordingly, the consolidated financial statements have made no adjustment for any effects on the Group.

During the finalisation of the annual financial statements for the year ended 31 December 2025, the Company identified a prior period error relating to the classification of cash and cash equivalents under IAS 7: Statement of Cash Flows 7 and to enhance the breakdown of revenue from the Asian region, the Company has revised its regional revenue disclosure format for ferrochrome and chrome ore.

Eskom

In January 2026 NERSA approved a 12-month interim tariff of 87.74c/kWh. However, the interim tariff is not enough to restart all suspended smelters which require a tariff of 62c/kWh. On 27 February 2026, in-principle support for the proposed 62c/kWh electricity tariff (Proposed Tariff) was received from Eskom and the South African government (Government). Specific terms and conditions of the Proposed Tariff are critical and engagements with Eskom and Government continue. In good faith, the Venture has extended the current termination date under s189 and 189A of the Labour Relations Act, 66 of 1995 consultation process from 28 February 2026 to 31 March 2026.

Dividend

As reported above, on 6 March 2026, the Board resolved to declare a final cash dividend of 8 cents (2024: 8 cents) per share for the 2025 financial year. The total gross cash dividend for the year amounted to 12 cents (2024: 28 cents) per share.

The directors of Merafe are unaware of any material events that occurred after the reporting period and up to the date of authorisation of this report that may require adjustment or disclosure in these summarised financial statements.

Notice is hereby given that a gross final cash dividend of 8 cents per share (2024: 8 cents per share) has been declared by the Board on Friday, 6 March 2026, payable to holders of ordinary shares.

The dividend will be paid out of income reserves.

The ordinary dividend will be subject to a local dividend tax rate of 20%. The net local ordinary dividend to those shareholders who are not exempt from paying dividend tax is therefore 6.4 cents per share. Merafe’s income tax number is 9550 008 602. The number of ordinary shares issued at the date of the declaration is 2 499 126 870.

The important dates pertaining to the dividend are as follows:

Shareholders will not be permitted to dematerialise or rematerialise their ordinary shares between Tuesday, 31 March 2026 and Thursday, 2 April 2026, both days inclusive.