African Rainbow Minerals : 2023 Annual Financial Statements (1.38 MB)

Contents

African Rainbow Minerals (ARM) is a leading South African diversified mining and minerals company with operations in South Africa and Malaysia. ARM mines and beneficiates iron ore, manganese ore, chrome ore, platinum group metals (PGMs), nickel and coal. It also produces manganese alloys and has a strategic investment in gold through Harmony Gold Mining Company Limited (Harmony Gold).

Directors' responsibility for the annual financial statements

INTRODUCTION ANNUAL FINANCIAL STATEMENTS

Introduction

OUR 2023 SUITE OF REPORTS

The company's directors are responsible for the

Annual financial statements

A holistic assessment of ARM's ability to create sustainable value, with relevant extracts from the annual financial statements, the environmental, social and governance (ESG) report and Mineral Resources and Mineral Reserves report.

The audited annual financial statements have been prepared according

to International Financial Reporting Standards (IFRS).

A summary of how ARM implements the principles and practices in King IV to achieve the governance outcomes envisaged.

In line with JSE Listings Requirements, ARM prepares Mineral Resources and Mineral Reserves statements for all its mining operations as per SAMREC guidelines and definitions (2016).

AGM 2023 notice to shareholders

preparation, integrity and fair presentation of these consolidated and separate annual financial statements in accordance with International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, requirements of the South African Companies Act 71 of 2008 (the Companies Act) and the Listings Requirements of the JSE Limited (JSE Listings Requirements).

judgements and estimates in line with IFRS. The directors are satisfied that the annual financial statements of the group and company fairly present the results of operations and their cash flows for the year ended 30 June 2023, and the financial position at 30 June 2023.

The directors are also satisfied that additional information included in the integrated annual report is accurate and consistent with the financial statements in this report.

Shareholder information

Information available on our website

www.arm.co.za

Information available elsewhere in our reports

All monetary values in this report are in South African rand unless otherwise stated. Rounding may result

in computational discrepancies on management and operational review tabulations.

ESG 2023 ESG report

A detailed review of our performance on key environmental, social and governance matters. The ESG report includes the full remuneration report and should be read in conjunction with the GRI Index.

A detailed review of our performance on our key climate change and water matters, in line with the Task Force

on Climate-related Financial Disclosures (TCFD).

• Notice of annual general meeting
• Form of proxy
• Commitment to good governance
• Board of directors
• Report of the audit and risk committee
• Report of the social and ethics committee chairman
• Summarised remuneration report
• Summarised directors' report
• Summarised consolidated financial statements

TM Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all its rights are reserved.

This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

The going-concern basis has been used to prepare the consolidated and separate annual financial statements. The directors are satisfied that the group and company have access to adequate resources to continue as a going concern for the ensuing year.

The directors are also responsible for the group's system of internal controls. These are designed

to provide reasonable, but not absolute, assurance against material misstatement or loss.

A description of the audit and risk committee's functions appears on pages 4 to 6. This committee has confirmed that effective systems of internal control and risk management are maintained. There were no breakdowns in the functioning of internal financial control systems during the year that had a material impact on the consolidated and separate annual financial statements.

The board considers that,

in preparing the consolidated and separate annual financial statements, the most appropriate accounting policies have been consistently applied and supported

by reasonable and prudent

The responsibility of the external auditor, Ernst & Young Inc., is to express an independent opinion on the fair presentation of the annual financial statements, based on its audit of the group and company. The audit and risk committee has satisfied itself that the external auditor is independent.

The consolidated and separate annual financial statements on pages 1 to 127 were approved by the board and are signed on its behalf by:

Dr PT Motsepe

Executive chairman

VP Tobias

Chief executive officer

Johannesburg

10 October 2023

SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

1

Certificate of the group company secretary and governance officer

In my capacity as group company secretary and governance officer, I hereby confirm, to the best of my knowledge and belief, that in terms of section 88(2)(e) of the Companies Act 71 of 2008, as amended, for the year ended

30 June 2023, the company has lodged with the commissioner of the Companies and Intellectual Property Commission all such returns and notices that are required for a public company in terms of this act, and that all such returns and notices are true, correct and up to date.

AN D'Oyley

Group company secretary and governance officer

Johannesburg

10 October 2023

Chief executive officer and finance director's internal financial control responsibility statement

Each of the directors whose names are stated below hereby confirm that:

• The annual financial statements set out on pages 21 to 115 fairly present in all material respects the financial position, financial performance and cash flows of African Rainbow Minerals Limited (ARM) in terms of IFRS
• To the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading
• Internal financial controls have been put in place to ensure that material information relating to ARM and its consolidated subsidiaries have been provided to effectively prepare its financial statements
• The internal financial controls are adequate and effective and can be relied on in compiling the annual financial statements, having fulfilled our role and function as executive directors with primary responsibility for implementation and execution of controls
• Where we are not satisfied, we have disclosed to the audit and risk committee and the auditors any deficiencies in design and operational effectiveness of the internal financial controls, and have taken steps to remedy the deficiencies
• We are not aware of any fraud involving directors.

Johannesburg

10 October 2023

INTRODUCTION ANNUAL FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

Report of the audit and risk committee

This report is provided by the audit and risk committee appointed for the 2023 financial year (F2023) in compliance with section 94 of the Companies Act.

monitoring of financial statements in 2022"

For legal and regulatory requirements that may have an impact on the consolidated and separate annual financial statements, the committee:

INTRODUCTION ANNUAL FINANCIAL STATEMENTS

Information on the membership and

ESG composition of the committee, terms of reference and procedures appears in the ESG report on www.arm.co.za.

Executing designated functions

The committee has executed its duties and responsibilities during the financial year in line with its terms of reference for ARM's accounting, internal auditing, internal control, risk and financial reporting practices.

In terms of the external auditor and external audit, the committee:

• Recommended to shareholders that Ernst & Young Inc.
  be reappointed as the external auditor and that Mr PD Grobbelaar be reappointed as the designated auditor for the audit for F2023
• Recommended to shareholders that KPMG Inc. be appointed as the external auditor and that Ms S Loonat be appointed as the designated auditor for the audit for F2024 under the rules for mandatory audit-firm rotation after 10 years, notwithstanding that the rule was set aside by the Supreme Court of Appeal
• Requested the required accreditation information from the audit firm to assess its suitability for appointment as well as the suitability of the designated audit partner
• Ensured the appointment of the external auditor complied with the Companies Act and all applicable legal and regulatory requirements
• Approved the external audit plan and audit fees payable to the external auditor
• Confirmed it is satisfied that the external auditor is independent

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of the company and group, and considered the following in its determination:

• Reviewed and evaluated the effectiveness of the external auditor and its independence
• Obtained and accepted
  an annual written statement from the auditor that its independence was not impaired
• Determined the nature and extent of all non-audit services provided by the external auditor
• Pre-approvedpermissible non-audit services provided by the external auditor in terms of its policy on approving audit services and pre-approvingnon-audit services. From
  15 December 2022, in terms of amendments to the non- assurance services provisions and fee-related provisions of the International Ethics Standards Board for Accountants Code, provided concurrence of any non-assurance services
• Considered the tenure of the external audit firm, Ernst & Young Inc., and its predecessor firms, which have been the auditor of African Rainbow Minerals Limited for 50 years. It was noted that in 2004, Ernst & Young Inc. continued as the auditor of the African Rainbow Minerals Limited group, which was created following a range of indivisible transactions involving certain interests
  of Anglovaal Mining Limited, African Rainbow Minerals & Exploration Investments Proprietary Limited and Harmony Gold Mining Company

Limited (Harmony). Ernst & Young Inc. has been the auditor of the group for 20 years

• Evaluated the quality of the external audit.

For the F2023 financial statements, the committee:

• Confirmed the going-concern status of the group and company as the basis of preparing the interim, condensed and annual financial statements
• Examined and reviewed these financial statements, and all financial information disclosed to the public prior to submission and approval by the board
• Ensured that the annual financial statements fairly present the financial position of the group and company at the end of the financial year, and the results of operations and cash flows for the financial year of the group and company, in line with IFRS and the requirements
  of the Companies Act
• Considered accounting treatments, significant unusual transactions and accounting judgements
• Considered the appropriateness of accounting policies adopted and any changes
• Reviewed the independent auditor's report
• Considered the acquisition of Bokoni Platinum Mine and related accounting entries
• Considered key audit matters, as set out in the independent auditor's report
• In terms of the JSE Limited (JSE) letter on the proactive monitoring process, dated 4 November 2022, considered the JSE's report titled "Reporting back on proactive

The committee considered, inter alia:

• The internal control process for the chief executive officer and finance director to sign the responsibility statement for the F2023 annual financial statements
• The impact of global developments on our business
• Impairment indicators and reversal of impairment indicators at all operations including the impairment at Beeshoek,
  Cato Ridge Works and Sakura at 1H F2023 and at the end of F2023.

For internal control and internal audit, the committee:

• Reviewed significant issues raised by the internal audit process and the adequacy of  corrective action in response to significant internal audit findings
• Reviewed and approved the internal audit plan
• Evaluated the independence, effectiveness and performance of the internal auditor, Deloitte & Touche, and found the internal auditor to be independent and effective
• Considered reports of the internal auditor on the group's systems of internal controls

Based on the above, the committee concluded that nothing had come to its attention that would suggest internal financial controls were

not effective for the year ended 30 June 2023. In addition, the committee considered the accounting practices and annual financial statements of the group and company and consider these to be fair and reasonable.

In terms of risk management and its oversight role of the management risk and compliance committee, the audit and risk committee:

• Reviewed the enterprise risk management framework setting out ARM's policies and processes on risk assessment and risk management throughout the group and company
• Ensured the group and company have applied a combined assurance model for a coordinated approach to all assurance activities
• Considered and reviewed the findings and recommendations of the management risk and compliance committee.

The committee considered the experience, expertise and effectiveness of the finance director, Ms TTA Mhlanga, and the finance function, and concluded that these were appropriate.

In F2024, the audit and risk committee will consider, inter alia:

• Management's control over key risks including transportation, water and cybersecurity risks
• The seamless process to hand over to the new external auditor
• The effective operation of the group and company's financial systems, processes and controls, and their capacity to respond
  to industry and environment changes
• Management's implementation of the financial provisioning regulations of the National Environmental Management Act, amendments to the JSE Listings Requirements and other pronouncements and standards, as well as considering the Companies Act amendment bills
• The impact of developments in the audit industry to ensure continued audit independence and objectivity.

SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

5

Report of the audit and risk committee continued

QUALIFICATIONS OF AUDIT AND RISK COMMITTEE MEMBERS1, 2

Independent auditor's report

INTRODUCTION

TOM BOARDMAN (73)

BCom (Wits), CA(SA)

Member since

February 2011

Independent non-executive director.

Committees

Chairman of audit and risk committee, member of investment and technical, non-executive directors'

and remuneration committees

FRANK ABBOTT (68)

BCom (University

of Pretoria), CA(SA), MBL (Unisa)

Member since 2021

Independent non-executive director.

Committees

Member of audit and risk, investment and technical, and non-executive directors' committees

ANTON BOTHA (70)

BCom (marketing) (University of Pretoria), BProc (Unisa), BCom (hons) (University

of Johannesburg), senior executive programme (Stanford, USA)

Member since June 2010

Independent non-executive director.

Committees

Chairman

of remuneration committee, member of audit and risk, investment and technical, and non-executive directors' committees

ALEX MADITSI (61)3 BProc (University of the North), LLB (Wits), HDip company law (Wits), LLM company and labour law (Pennsylvania, USA), LLM international commercial law (Harvard, USA)

Member since July 2004

Lead independent non-executive director.

Committees

Chairman of nomination and non-executive directors' committees, member of audit and risk, investment and technical, remuneration and social and ethics committees

PITSI MNISI (40) BCom (acc) (University of Natal), BCom (acc) (hons) (University

of Natal), BCom (tax) (hons) (UCT), CA(SA), advanced certificate (emerging markets and country-risk analysis) (Fordham, USA), MBA (Heriot-Watt University, UK)

Member since December 2020

Independent non-executive director.

Committees

Member of audit and risk and non-executive directors' committees

B NQWABABA (57) BAcc (hons) (University of Zimbabwe), FCA (Institute of Chartered Accountants

of Zimbabwe), MBA (with merit) (jointly awarded by universities of Wales, Bangor and Manchester)

Member since 2022

Independent non-executive director.

Committees

Member of audit and risk, and non-executive directors' committees

DR REJOICE

SIMELANE (71)

BA (economics and accounting) (University of Botswana, Lesotho and Swaziland), MA (econ) (University of New Brunswick, Canada, and University of Connecticut, USA), PhD (econ) (University

of Connecticut), LLB (Unisa)

Member since July 2004

Independent non-executive director.

Committees

Chairman of social and ethics committee, member of audit and risk, nomination and non-executive directors' committees

To the Shareholders of African Rainbow

Minerals Limited

ANNUAL FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

1. The résumés of audit and risk committee members standing for re-election appear in the notice of annual general meeting, available on the website.
2. All members of the audit and risk committee standing for re-election are independent non-executive directors.
3. Mr AK Maditsi will not stand for re-election at the forthcoming annual general meeting.

Independence of external auditor

The committee is satisfied that Ernst

• Young Inc. is independent of ARM. This conclusion was arrived at, inter alia, after considering the factors

on page 4 and those below:

• Representations made by Ernst & Young Inc. to the committee
• The external auditor does not, except as external auditor or in rendering permitted non-audit services, receive any remuneration or other benefits from the group and company
• The external auditor's independence was not impaired by any consultancy, advisory or other work undertaken
• The external auditor's independence was not prejudiced by any previous appointment
  as auditor.

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Recommendation

Following our review of the consolidated and separate annual financial statements for the year ended 30 June 2023, we believe that, in all material respects, they comply with the relevant provisions of the Companies Act, IFRS as issued

by the International Accounting Standards Board (IASB), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the JSE Listings Requirements, and fairly present the consolidated and separate results of operations, cash flows, and the financial position of the group and company. On this basis, the audit and risk committee recommended the consolidated and separate annual financial statements of ARM to the board for approval.

The board subsequently approved the 2023 annual financial statements, which will be open for discussion

at the annual general meeting.

TA Boardman

Chairman of the audit and risk committee

Johannesburg

10 October 2023

ANNUAL FINANCIAL STATEMENTS 2023

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Independent auditor's report continued

The Key audit matter applies only to the audit of the consolidated financial statements.

Other information

The directors are responsible for the other information. The other

we have performed, we conclude that there is a material misstatement of this other information, we are

that an audit conducted

in accordance with ISAs will always detect a material misstatement when

INTRODUCTION

Acquisition of Bokoni Platinum Mines Proprietary Limited ('BPM')

On 20 December 2021 ARM entered into a sale and purchase agreement to acquire all of the shares (100%) of BPM from Bokoni Platinum Holdings Proprietary Limited ('BPH') through a newly formed entity, ARM Bokoni Mining Consortium Proprietary Limited ('ARM BMC'), for

a consideration of R3 500 million payable in cash.

The sale and purchase agreement included various conditions to the purchase becoming effective.

As disclosed in Note 38 Acquisition of Bokoni Platinum Mines Proprietary Limited (BPM) the fair values of the identifiable assets and liabilities acquired, as well as the gain on bargain purchase, recognised on group were as follows:

• Assets: R3 672 million
• Liabilities: R116 million
• Gain on bargain purchase: R56 million

This transaction required significant judgement and estimation by management, as disclosed in Note 38,

in applying the accounting principles of IFRS 3 - Business Combinations and determining the fair values, in the following areas:

• Effective date of the acquisition
• Determining whether the acquisition was a business combination or an assets acquisition
• The fair values and allocation thereof to the identifiable assets and liabilities as determined by the various valuation methodologies, which by its nature contain judgement and estimation uncertainty, including:
• • Methodology used;
  • Discount rates
  • Macroeconomic assumptions including foreign exchange rates and platinum group metal prices;
• Deferred tax arising on acquisition

The Group engaged specialists to assist with matters including valuation, taxation, and accounting standards application.

We determined this to be a key audit matter in the current year due to the complexity and the significant impact

on the group results, as well as the degree of audit effort involved, including the involvement of valuation, taxation, and accounting specialists in auditing the impact of the transaction.

Our audit procedures included amongst others the following:

• We obtained and read the sale and purchase agreement to consider the appropriateness
  of management's accounting treatment, the areas of required judgement, estimation, terms and conditions of the transaction;
• We obtained management's accounting paper and relevant supporting evidence on the accounting treatment and with the assistance of our specialists, we evaluated the accounting treatment and conclusions reached by management in terms
  of IFRS 3 including the following matters:
• • Effective date of the acquisition
  • Whether acquisition was a business combination or an assets acquisition
• We obtained management's external tax opinion and management's accounting treatment paper for taxation (including deferred taxation) for the acquisition and with the assistance of our specialists, we evaluated the tax treatment and conclusions reached
  by management;
• We obtained management's external purchase price allocation which included the fair values of the
  at acquisition assets and liabilities. With the assistance of our valuation specialists, we:
• • Evaluated the valuation methodologies against acceptable industry methods and accounting standards
  • Assessed the reasonability of the discount rates applied by comparing management's inputs
    to industry benchmarks and publicly available market data for comparable companies within a given range
  • Compared foreign exchange rates and platinum group metal prices to external market data
• We assessed the adequacy of the group disclosure
  in terms of IFRS 3, in the notes to the consolidated and separate annual financial statements.

information comprises the information included in the 100-page document titled "ARM Integrated Annual Report 2023", the 197- page document titled "ARM Environmental, social and governance report 2023", the

108-page document titled "ARM Mineral Resources and Mineral Reserves report 2023", the 104-page document titled "ARM Climate change and water report 2023", the 10-page document titled "ARM King IV application register 2023", the 116-page document titled "ARM Notice to shareholders 2023", and in the 128-page document titled "ARM Annual financial statements 2023", which includes the Chief executive offiicer and fiinance director's internal fiinancial control responsibility statement, Directors' report (except the directors' remuneration section on pages 14 to 19), the Report of the audit and risk committee and the Certificate of the group company secretary and governance officer as required by the Companies Act of South Africa. The other information does not include the consolidated or the separate annual financial statements and our auditor's report thereon.

Our opinion on the consolidated and separate annual financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate annual financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate annual financial statements, or our knowledge obtained in the audit,

or otherwise appears to be materially misstated. If, based on the work

required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the consolidated and separate annual financial statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate annual financial statements

in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate annual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate annual financial statements, the directors are responsible for assessing the group and company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the directors either intend to liquidate the group and company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated and separate annual financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate annual financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee

it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate annual financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the consolidated and separate annual financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
  is sufficient and appropriate
  to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
  or the override of internal control.
• Obtain an understanding
  of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
  an opinion on the effectiveness of the group and company's internal control.
• Evaluate the appropriateness
  of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events

ANNUAL FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

Independent auditor's report continued

or conditions that may cast significant doubt on the group and company's ability to continue

as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with

Report on Other Legal and Regulatory Requirements

In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Ernst & Young Inc., and its predecessor firms, have been the auditor of African Rainbow Minerals Limited for 50 years.

The directors have pleasure in presenting their report on ARM for the year ended 30 June 2023.

ANNUAL FINANCIAL STATEMENTS

annual financial statements or,

if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group and/or the company to cease to continue

as a going concern.

• Evaluate the overall presentation, structure, and content of the consolidated and separate annual financial statements, including the disclosures, and whether the consolidated and separate annual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
  or business activities within the group to express an opinion on the consolidated and separate annual financial statements. We are responsible for the direction, supervision, and performance
  of the group audit. We remain solely responsible for our audit opinion.

a statement that we have complied with relevant ethical requirements regarding independence, and

to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably

be expected to outweigh the public interest benefits of such communication.

In 2004, Ernst & Young Inc. continued as the auditor of the African Rainbow Minerals Limited group, which was created following a range of indivisible transactions involving certain interests

of Anglovaal Mining Limited, African Rainbow Minerals & Exploration Investments (Pty) Ltd and Harmony Gold Mining Company Limited. Ernst

• Young Inc. has been the auditor of the group for 20 years.

Ernst & Young Inc.

Director - Philippus Dawid Grobbelaar

Registered Auditor

Chartered Accountant (SA)

10 October 2023

102 Rivonia Road Sandton

2146

Nature of business

ARM is a diversified South African mining company with long-life operations in key commodities. ARM, its subsidiaries, joint ventures, joint operations and associates explore, develop, operate and hold interests in the mining and minerals industry.

The current operational focus is on precious metals, base metals, ferrous metals and alloys, which include platinum group metals, nickel, coal, iron ore, manganese ore and ferromanganese. ARM also has

an investment in Harmony Gold Mining Company Limited.

ARM's partners at the various South African operations are Anglo American Platinum Limited, Assore South Africa Proprietary Limited, Impala Platinum Holdings Limited, Norilsk Nickel Africa Proprietary Limited and Glencore Operations South Africa Proprietary Limited.

Holding company

The company's largest shareholder is African Rainbow Minerals & Exploration Investments Proprietary Limited (ARMI), holding 39.95% of its issued ordinary share capital at

30 June 2023 (30 June 2022:

39.87%). The sole shareholder of ARMI is Ubuntu-Ubuntu Commercial Enterprises Proprietary Limited (UUCE), the shares of which are held by trusts, all of which, except the Motsepe Foundation, own

those shares for the benefit

of Dr PT Motsepe and his immediate family. The Motsepe Foundation applies the benefits of its indirect shareholding in ARM for philanthropic purposes.

In addition, at 30 June 2023, 0.50% of the issued share capital of ARM was held by Botho-Botho Commercial Enterprises Proprietary Limited (30 June 2022: 0.50%),

in turn owned by UUCE and trusts, all of which trusts, except the Motsepe Foundation, hold those shares for the benefit of Dr Motsepe and his immediate family.

As one of the largest black-controlled mineral resource companies in South Africa, ARM is committed

to the spirit and objectives of the Mineral and Petroleum Resources Development Act 28 of 2002, and the broad-basedsocio-economic charter for the South African mining industry (the mining charter). Accordingly, and for the benefit of historically disadvantaged South Africans (HDSAs), the company created the ARM Broad-Based Economic Empowerment Trust. The beneficiaries of this trust include seven regional upliftment trusts,

a women's upliftment trust, union representatives, a church group and community leaders. The ARM Broad-Based Economic Empowerment Trust owns 15 897 412 ARM shares (30 June 2022:

15 897 412) or 7.08% of ARM's issued share capital at 30 June 2023 (30 June 2022: 7.08%).

Review of operations

See reviews by the executive chairman,

IAR chief executive officer and finance director, and reviews of operations for F2023 in the integrated annual report.

Corporate governance

The board is committed to high standards of corporate governance and continuously reviews governance matters and control systems

to ensure these are in line with global good practices. These standards are evident throughout the company's systems of internal controls, policies and procedures to ensure the sustainability of the business.

ARM applies the principles of King lV.

KING For details, see the King IV application register on our website.

Financial results

The consolidated and separate annual financial statements and accounting policies appear on pages 21 to 115.

The results for the year ended

30 June 2023 have been prepared in accordance with IFRS and interpretations of those standards as adopted by the IASB, the SAICA Financial Reporting Guides issued by the Accounting Practices Committee, Financial Reporting Pronouncements issued by the Financial Reporting Standards Council, the requirements of the Companies Act and JSE Listings Requirements. The annual financial statements fairly present the state of affairs of the group and company, and adequate accounting records have been maintained.

SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

Directors' report continued

Events after the reporting date

For events after the reporting date, see note 45 of the annual financial statements.

Share capital

The share capital of the company, both authorised and issued, is set out

Directorate

The memorandum of incorporation (MoI) provides for one-third

of elected non-executive directors to retire by rotation. The non- executive directors affected by this requirement are Messrs AD Botha, JA Chissano, WM Gule and DC Noko

in accordance with the company's MoI is to stand for election at the next annual general meeting.

The executive director affected

by this requirement is Mr VP Tobias.

At the date of this report, the directors of the company were:

INTRODUCTION ANNUAL FINANCIAL

Borrowings and cash

Borrowings of R251 million (F2022: R109 million) were repaid in the period, reducing gross debt to R242 million (F2022: R484 million). ARM was in a net cash position

of R9 779 million (30 June 2022:

R11 175 million). There are

no borrowing-power provisions in ARM's memorandum

of incorporation.

Details of cash and borrowings appear in notes 14, 17 and 22 of the financial statements.

Subsidiaries, joint arrangements, associates and investments

ARM acquired Bokoni in the financial year. Refer note 38 for more detail.

The company's direct and indirect interests in its principal subsidiaries, joint arrangements (which include joint ventures and joint operations), associates and investments are reflected

in separate schedules on pages 113 to 115.

Dividends

An interim gross dividend of

1 400 cents per ordinary share was declared on 6 March 2023 for the six

to a distribution of approximately

R2 696 million (F2022:

R4 493 million), which was payable on Monday, 9 October 2023.

The following additional information is disclosed:

in note 15 to the consolidated and separate annual financial statements. Information about the treasury shares is set out in note 16.

Shareholder analysis

A comprehensive analysis

of shareholders, together with direct or indirect beneficial holdings exceeding 3% of the ordinary shares of the company at 30 June 2023,

is set out on pages 123 and 126.

and Dr RV Simelane, each of whom is available to stand for re-election at the forthcoming annual general meeting. Their terms of office terminate at the annual general meeting in accordance with the MoI. They have made themselves available for election at the annual general meeting on Thursday,

8 December 2023, or any adjournment thereof.

In addition, an executive director

of the company who was appointed between annual general meetings and whose term of office terminates at the annual general meeting

• Executive directors: Dr PT Motsepe (executive chairman), VP Tobias (chief executive officer),
  TTA Mhlanga (finance director) and HL Mkatshana
• Independent non-executive directors: AK Maditsi (lead independent non-executivedirector), F Abbott, TA Boardman, AD Botha,
  JA Chissano, WM Gule, B Kennedy, PJ Mnisi, DC Noko, B Nqwababa, Dr RV Simelane and JC Steenkamp
• Non-executivedirector: M Arnold.

Detailed résumés of the directors

AGMESG appear in the notice of annual general meeting and in the ESG report on our website.

STATEMENTS SHAREHOLDER INFORMATION

Going concern

To determine whether the group and company are going concerns, the directors have considered facts and assumptions, including group and company cash flow forecasts for the year to 30 June 2024 and beyond. The board believes the company and group have adequate resources

to continue business in the foreseeable future. For this reason, the group and company continue to adopt the going-concern basis in preparing these financial statements.

Taxation

The latest tax assessment for the company is for the financial year ended 30 June 2022. All tax submissions up to and including those for F2022 have been submitted.

12

months ended 31 December 2022 (1H F2022: 1 200 cents), amounting to a distribution of approximately

R3 145 million (1H F2022:

R2 694 million), which was paid on Monday, 3 April 2023.

The following additional information is disclosed:

• The dividend was declared out of income reserves
• The South African dividends withholding tax (dividends tax) rate is 20%
• The gross local dividend amount was 1 400 cents per ordinary share for shareholders exempt from dividends tax
• The net local dividend amount was 1 120 cents per ordinary share for shareholders liable to pay dividends tax
• As at the date of the dividend declaration, ARM had 224 667 778 ordinary shares in issue.

A final gross dividend of 1 200 cents per ordinary share was declared on 4 September 2023 for the

year ended 30 June 2023 (F2022:

2 000 cents per share), amounting

In line with section 4 of the Companies Act, the board determined that the prescribed solvency and liquidity requirements were met for the payment

of dividends.

ARM's income tax reference number is 9030/018/60/1.

Capital expenditure

Capital expenditure for F2023 totalled R4 761 million (F2022: R2 277 million).

Full details of capital expenditure appear

IAR in the finance director's review and relevant operational reviews in the integrated annual report.

INTERESTS OF DIRECTORS

The direct and indirect beneficial and non-beneficial interests of directors in the issued share capital of the company were as follows:

13

Directors' report continued

Directors' remuneration: Executive directors and prescribed officers (audited)

The remuneration of executive directors and prescribed officers comprises:

• Total cost-to-company, which is base salary plus benefits
• Incentive-basedrewards in the form of competitive incentives compared to those offered by other employers in the mining and mineral resources sector, earned through achieving performance targets consistent with shareholder expectations over the short and long term:
• • Short-termincentives are cash bonuses based on performance measures and targets, and structured to reward effective operational performance
  • Long-term (share-based)incentives are used to align the long-term interests of management with those of shareholders and responsibly implemented to avoid exposing shareholders to unreasonable or unexpected financial impact.

ESG Full details are set out in the remuneration report in the ESG report.

Executive directors and prescribed officers do not receive directors' fees.

EXECUTIVE DIRECTORS' EMOLUMENTS*

• Details of long-term incentive awards may be found in part III the remuneration report in the ESG report. Total annual package before incentives = cost-to-company.

1 The non-cash benefit for Dr PT Motsepe, the executive chairman of ARM, comprises a deemed fringe benefit on protection services which are provided to him on the basis of a risk assessment which considers his local and global profile and the concomitant risks. For the executive chairman,

the cash bonus is based on a percentage of basic salary and excludes non-cash benefits and other benefits.

2 Mr VP Tobias was appointed chief operating officer from 14 November 2021 and as chief executive officer from 1 May 2023. His cost-to-company was increased to R8.7 million per annum from 1 May 2023. The pro-rata remuneration is shown for the periods when he was a prescribed officer and then an executive director, respectively.

1. Mr MP Schmidt stepped down as chief executive officer and an executive director from 1 May 2023. He was appointed executive: growth and strategic development from 1 May 2023 and his cost-to-company was decreased from R9.863 million to R7.8 million per annum from 1 May 2023. The pro-rata remuneration is shown for the periods when he was an executive director and then a prescribed officer, respectively.
2. Ms J Magagula resigned from the company from 31 July 2023, following the financial year end.
3. The prescribed officers of the company were determined under section 66(10) of the Companies Act, and further described in section 38 of its regulations. Their remuneration is disclosed in terms of the Companies Act, section 30(4)(a).
4. The medical aid benefits for Ms J Magagula and Ms TTA Mhlanga were structured as deductions from their cost-to-company packages. No other executives had medical aid deductions.

7 Other benefits includes UIF and optional risk benefits such as group life benefits and additional disability and death benefits.

8 No bonuses were deferred in F2023. (Full details of cash bonuses are set out in part III of the remuneration report in the ESG report.) In terms of

the sign-on arrangements when he was appointed as chief operating officer in November 2021, Mr VP Tobias received the first cash sign-on award of R1.26 million in November 2022. (Full details of the sign-on awards are set out in part III of the remuneration report in the ESG report.) There were no other sign-on awards in F2023.

EXECUTIVE DIRECTORS' EMOLUMENTS* (CONTINUED)

• Details of long-term incentive awards may be found in part III the remuneration report in the ESG report. Total annual package before incentives = cost-to-company.

1 The non-cash benefit for Dr PT Motsepe, the executive chairman of ARM, comprises a deemed fringe benefit on protection services which are provided to him on the basis of a risk assessment which considers his local and global profile and the concomitant risks. For the executive chairman,

the cash bonus is based on a percentage of basic salary and excludes non-cash benefits and other benefits.

1. Ms J Magagula was appointed an executive director from 18 December 2019. Following an independent benchmarking review of executive director remuneration paid by South African mining companies in the company's peer group, Ms Magagula received a salary adjustment of 14.3% in addition to the 5.2% annual increase paid to senior executives in the Paterson Grade F-band, for a total of 19.5%.
2. Ms TTA Mhlanga was appointed finance director from 1 October 2020. Following an independent benchmarking review of finance director and chief financial officer remuneration paid by South African mining companies in the company's peer group, Ms Mhlanga received a salary adjustment
   of 2.3% in addition to the 5.2% annual increase paid to senior executives in the Paterson Grade F-band, for a total of 7.5% for F2022.
3. The prescribed officers of the company were determined under section 66(10) of the Companies Act, and further described in section 38 of its regulations. Their remuneration is disclosed in terms of the Companies Act, section 30(4)(a).
4. Mr VP Tobias was appointed chief operating officer from 14 November 2021.

6 Mr A Joubert's non-cash benefit comprises a fringe benefit on travel.

7 The medical aid benefits for Ms J Magagula and Ms TTA Mhlanga were structured as deductions from their cost-to-company packages. No other executives had medical aid deductions.

8 Other benefits includes UIF and optional risk benefits such as group life benefits and additional disability and death benefits.

9 No bonuses were deferred in F2022. In F2022, there were no sign-on awards.

INTRODUCTION ANNUAL FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

ANNUAL FINANCIAL STATEMENTS 2023

Directors' report continued

Conditional shares under the 2018 conditional share plan

Awards of conditional shares were made to eligible participants in the Paterson grade F-band under the 2018 conditional share plan. Conditional shares will be settled after three years, subject to the company achieving prescribed performance criteria over this period.

ESG For additional information about performance criteria, see remuneration report part III in the ESG report on our website.

The total number of conditional shares awarded in F2023 was 459 334. In addition, 87 711 conditional shares were forfeited during the year, bringing the total number of conditional shares outstanding on 30 June 2023 to 1 193 745.

1. Ms J Magagula received a top-up award in May 2020 following her appointment as an executive director. These conditional shares were settled on 11 June 2023. Ms Magagula subsequently resigned from the board from 31 July 2023.
2. Ms TTA Mhlanga was appointed to the board on 1 October 2020. Conditional shares awarded to her since her appointment have not yet vested.

3 Mr VP Tobias, chief operating officer, was appointed chief executive officer from 1 May 2023. In June 2023, the board approved a top-up award for Mr Tobias following his appointment as chief executive officer. In line with policy, the award was the difference between the number of CSP share awards awarded in December 2022 based on an award ratio of 1.33 of cost-to-company and the number of CSP share awards awarded in June 2023 based on an award ratio of 1.67 of cost-to-company. The top-up award is subject to performance conditions measured over the same period as the December 2022 awards.

1. Mr MP Schmidt stepped down as chief executive officer and was appointed as executive: growth and strategic development in the executive chairman's office from 1 May 2023.
2. Additional dividend equivalent shares of 0.3377 per award were included in the number of shares settled, as assured by the independent third-party consultant Andisa. The performance measurement and applicable vesting percentage (ie 124.7%) was assured by the independent third-party consultant Bowmans. The final vesting price used to determine the pre-tax cash value on settlement of R294.26 was the closing share price
   on 9 December 2022.
3. Additional dividend-equivalent shares of 0.3486 per award were included in the number of shares settled, as assured by the independent third-party consultant Andisa. The performance measurement and applicable vesting percentage (ie 124.7%) was assured by the independent third-party consultant Bowmans. The final vesting price used to determine the pre-tax cash value on settlement of R211.91 was the closing share price on
   9 June 2023.
4. No conditional shares were awarded or settled for these directors or prescribed officers between 30 June 2023 and the date of this report.

INTRODUCTION

Conditional awards under the 2018 cash-settled conditional share plan

3No conditional shares were awarded or settled for this director between 30 June 2023 and the date of this report.

Vesting dates

Conditional shares

Annual and interim allocations

Conditional shares awarded to senior executives on or after 7 December 2018 vest and are settled after three years, subject to achieving predetermined performance criteria.

Schedule of conditional shares vesting dates

cash-settled conditional share plan vest and are settled after three years, subject to achieving predetermined performance criteria.