African Rainbow Minerals : 2023 King IV Application Register (947.58 KB)

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Application of King IV

African Rainbow Minerals Limited (ARM or the company) supports the governance outcomes, principles and practices in the King IV Code as set out in the King IV Report on Corporate Governance for South Africa, 2016TM1

Governance outcome: Ethical leadership continued Leadership, ethics and corporate citizenship continued

(King IV), effective for companies listed on the JSE Limited from 1 October 2017. ARM applies all the relevant principles of King IV.

Below we summarise the King IV principles implemented and our progress on achieving the practices and, ultimately, governance outcomes envisaged. Enhancements where required will be made over time, in line with our objective to continuously improve and entrench the highest standards of corporate governance.

Comment from sustainability assurance provider

Refer to KPMG's Independent Assurance Practitioner's Limited assurance report in ARM's 2023 ESG report on our website: www.arm.co.za.

Governance outcome: Ethical leadership

Leadership, ethics and corporate citizenship

Principle 1	Leadership
The board* should lead	ARM's board of directors exercises ethical and effective leadership. The board
ethically and effectively	confirms its commitment to and adoption of the highest standards of corporate
	governance, its charter and the code of conduct that set the ethical foundation for how
	ARM operates.
	The code of conduct is designed to ensure the effective management of ethics and
	applies to directors, employees, contractors, suppliers and joint-venture partners. The
	board and its committees regularly monitor its own ethics and those of directors
	to ensure that they individually and collectively cultivate and exhibit integrity,
	competence, accountability, fairness and transparency in their leadership. Directors are
	expected to disclose conflicts that cannot be avoided. The company maintains
	a register and disclosure is a standing agenda item. Directors act ethically

Principle 2

The board should govern the ethics of the company in a way that supports the establishment of an ethical culture

OrgLeanisationaldership ethics

The board establishes an ethical culture. It ensures that the company applies the governance principles in King IV and, where required, continues to entrench and strengthen recommended practices through the group's governance structures, systems and processes.

The board determines ARM's values, which include the broader concepts

of sustainability and our commitment to zero harm to our employees, our host communities and the environment. Through the audit and risk committee, the board approves the company's code of conduct, which integrates the principles of human rights, specifies ethical business conduct and allows no tolerance for discrimination, corruption or bribery. The code of conduct, which is reviewed annually, includes extensive anti-bribery and anti-corruption provisions as well as provisions on conflicts of interest. The board has also approved a separate human rights policy.

Management has been delegated responsibility for implementing the code of conduct. The board, assisted by the social and ethics committee and audit and risk committee, exercises ongoing oversight of the management of ethics, including monitoring and ensuring that our conduct supports our values.

The code of conduct guides interactions with all stakeholders and sets the framework to address the company's key ethical risks. Our policies and programmes, including

a whistleblower facility operated by an independent service provider, enable employees and other stakeholders to report, confidentially and anonymously, allegations of any unethical or risky behaviour and contribute to our strong ethical foundation.

The code of conduct is incorporated by reference in employee contracts and new contracts with suppliers. The company provides training on the code of conduct and there are sanctions when ethical standards are breached.

An overview of governance appears in the ESG report.	ESG

			in discharging their responsibility to provide strategic direction and control of the
			company as provided for in the board charter and the company's memorandum
			of incorporation. The board sets the strategic direction adopted by the company's
			operations to support a sustainable business, and considers, inter alia, the company's
			short- and long-term impact on the economy, society, environment and its stakeholders,
			the best interests of the company as well as risks and opportunities. The chief
			executive officer is responsible for executing the approved strategy, policy and plan;
			however, the board monitors execution by management and remains accountable for
2023			achieving strategic objectives and other positive outcomes, including the company's
		performance, even where delegated to others. As required by the Companies Act,
		ARM's directors exhibit the required ethical characteristics of integrity,
REGISTER			ESG
		competence, care and responsibility.
APPLICATION	* The governing body of the company is the board of directors.
1 Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all its rights are reserved.
		Information available on our website	ESG2023 environmental, social and governance (ESG) report
IVTM
For further reading:
KING		IAR 2023 integrated annual report	AFS2023 annual financial statements

Principle 3

The board should ensure that the company is and is seen to be a responsible corporate citizen

ResponsibleLeadership corporate citizenship

Through the code of conduct, the board is responsible for ensuring the company protects, enhances and contributes to the wellbeing of the economy, society and the natural environment.

Sustainability is an integral part of ARM's business strategy through our values-driven focus on operational excellence and operating our assets safely, responsibly and efficiently. We believe that a responsible, sustainable approach to our business minimises potential negative impacts and increases the industry's positive contribution to the country, including the communities.

The board, with the support of the social and ethics committee, oversees and monitors how ARM's operations and activities affect its status as a responsible corporate citizen. As summarised in the integrated annual report, this is achieved through, inter alia, the board charter and code of conduct, which set the policy framework, and through specific operational and corporate office structures. These structures are more fully described

in the risk section of the ESG report. This framework has been established to ensure human and financial resources are employed effectively, and benefit our communities.

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Application of King IV continued

Governance outcome: Good performance Strategy, performance and reporting

Governance outcome: Effective control Governing structures and delegation

Principle 4	StrategyLeadershipand performance
The board should	The board as a whole, and through its committees, approves and monitors
appreciate that the	implementation of ARM's strategy and business plan, sets objectives and priorities
company's core purpose,	for the business, reviews key risks and opportunities, and evaluates performance
its risks and opportunities,	against the background of economic, environmental and social issues relevant
strategy, business model,	to the company as well as national and economic conditions. The company's
performance and	material financial and sustainability-related matters are discussed throughout the
sustainable development	integrated annual report and relevant supplementary reports. Globally, competitive
are all inseparable	performance depends on optimising operational metrics, and on ensuring
elements of the value-	environmental and social issues are addressed appropriately. Driving excellence
creation process	across all these areas supports operational efficiency, long-term sustainability,
	financial returns for shareholders and broad social benefit.

Additional detail on the company's performance against its strategic objectives appears in the integrated annual report, while the approach to sustainable

development is in the ESG report.	ESG IAR

Principle 6

The board should serve as the focal point and custodian of corporate governance in the company

PrimaryLeadershiprole and responsibilities of the board

The board ensures that the company applies the governance principles of King IV and, where required, continues to entrench and strengthen recommended practices through the group's governance structures, systems and processes.

The board has an approved charter, which it reviews annually. This sets out its governance responsibilities.

The board has an approved protocol to be followed and any director or committee may obtain independent, external professional advice at the company's expense on matters within the scope of their duties. Directors may request documentation from and meet with management as required.

An appropriate governance framework and the necessary policies and processes are in place to ensure entities in ARM adhere to group requirements and governance standards. The company's governance framework and corporate governance

practices are disclosed in the integrated annual report and ESG report.	ESG IAR

Principle 5

The board should ensure that reports issued by the company enable stakeholders to make informed assessments of its performance, and its short-, medium- and long-term prospects

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ReportingLeadership

The integrated annual report and supplementary reports provide a comprehensive review of ARM's sustainability, including the group's financial, economic, social, environmental and governance performance on matters material to its strategy and key stakeholders. Structured review processes to ensure the integrity of sustainability reporting have been established. Reporting is prepared in line with recognised guidelines that ensure compliance with legal requirements and relevance to stakeholders, including International Financial Reporting Standards (IFRS), King IV, the International Sustainability Standards Board (ISSB, now under the auspices of the IFRS Foundation), GRI Standards and the sustainable development framework of the International Council on Mining and Metals (ICMM) as well as the requirements of the Global Industry Standard on Tailings Management.

The board, through the audit and risk committee and other board committees, ensures the necessary controls are in place to verify and safeguard the integrity of the annual reports and any other disclosures. The audit and risk committee oversees the integrated reporting process and reviews the annual financial statements, which are externally audited. The social and ethics committee oversees the ESG reporting process, elements of which are independently assured, and the remuneration committee monitors remuneration reporting, which is reviewed by the company's remuneration consultants.

The code of conduct includes ARM's communication policy to ensure that timely, relevant and accurate information is provided to stakeholders. The company ensures that annual reports, including the annual financial statements, integrated annual report, ESG report and other information relevant to stakeholders are published on its website, and other media as appropriate.

See ESG report for more detail.	ESG

Principle 7	CompositionLeadership of the board
The board should comprise	Composition
the appropriate balance	The independence of each director is categorised as defined in the Listings
of knowledge, skills,	Requirements of the JSE Limited, taking into consideration King IV and other
experience, diversity and	requirements outlined in the board charter. The board comprises a majority
independence for it to	of independent non-executive directors. Annually, the board rigorously reviews the
discharge its governance	independence and performance of independent non-executive directors serving more
role and responsibilities	than nine years, on the recommendation of the nomination committee.
	To ensure a formal and transparent appointment process, any new appointment
	of a director is considered by the board as a whole, on the recommendation of the
	nomination committee. The selection process involves considering the existing balance
	of knowledge, skills and experience on the board and a continual process of assessing
	the needs of the company and the board's effectiveness and ability for it to discharge its
	governance role and responsibilities objectively. Board members confirm their availability
	to perform their roles.
	The nomination committee regularly considers the board composition, applying a broad
	definition of diversity. This includes considering the balance of skills, experience,
	independence, field of knowledge and knowledge of ARM as well as aspects
	of diversity, including gender, race, culture, the ages of directors, and other factors
	relevant to the board's effectiveness.
	The board has adopted a policy on promoting diversity and inclusion at board level and
	discloses in the integrated annual report its progress towards targets in the policy. The
	process of identifying suitable candidates to be proposed for appointment considers
	diversity and inclusion. Directors are appointed in terms of the company's memorandum
	of incorporation.

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Application of King IV continued

Governance outcome: Effective control continued Governing structures and delegation continued

Governance outcome: Effective control continued Governing structures and delegation continued

Principle 7	CompositionLeadership of the board continued
The board should comprise	A formal induction programme is available for new directors, including background
the appropriate balance	material on the company's business and board matters, guidance on directors' duties
of knowledge, skills,	and responsibilities, and meetings with senior executives. All directors are invited to the
experience, diversity and	annual budget meeting. The board and budget meetings have a strategic focus. Ongoing
independence for it to	training includes workshops presented by management and external advisors, and
discharge its governance	additional training is facilitated as required. Site visits to operations take place periodically
role and responsibilities	and directors receive regular briefings on legal and other developments, including
	changes in the business and business environment.
	Executive chairman
	As ARM has an executive chairman, a lead independent non-executive director has been

Principle 9

The board should ensure the evaluation of its own performance and that of its committees, its chair and individual members, support continued improvement in its performance and effectiveness

EvaluationsLeadershipof the performance of the board

The effectiveness and performance of the board as a whole and the individual board committees are evaluated annually. The executive chairman of the board, through the nomination committee and assisted by the group company secretary and governance officer, leads the evaluation process. The lead independent non-executive director leads the process to evaluate the performance of the executive chairman. In 2023, an external service provider assisted with the board and committee evaluations on performance. The board is satisfied that the evaluation process is improving its performance and effectiveness.

Refer to integrated annual report and ESG report.	ESG IAR

appointed, as recommended by King IV. In terms of the board charter, the roles of the

executive chairman and chief executive officer are separate and clearly defined. The

board charter also documents the role and responsibilities of the executive chairman and

lead independent non-executive director, who leads, inter alia, in the absence of the

executive chairman or when the executive chairman has a conflict of interest. The

executive chairman and lead independent non-executive director are required to be

elected by the board annually.

Principle 10	AppointmentLeadership and delegation to management
The board should ensure	While retaining overall accountability and subject to matters reserved to itself, the board
that the appointment of,	has delegated authority to the chief executive officer, other executive directors and senior
and delegation to,	executives to run the day-to-day affairs of the company, subject to a delegation-of-
management contribute	authority framework that contributes to the effective exercise of responsibilities.
to role clarity and the
effective exercise	Chief executive officer

Principle 8

The board should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties

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CommitteesLeadershipof the board

As set out in the board charter, the board has six standing committees to assist

in discharging its duties and responsibilities: audit and risk; investment and technical; nomination; non-executive directors'; remuneration; and social and ethics. These committees operate under written terms of reference approved by the board, which are reviewed annually. The committees are appropriately constituted, and members are appointed by the board, except for the audit and risk committee, whose members are nominated by the board and elected by shareholders of the company. The nomination committee reviews the composition of board committees and makes recommendations to the board on their composition, considering factors such as diversity and skills as well as the need to create a balanced distribution of power.

External advisors, executive directors and members of executive and senior management attend committee meetings by invitation. Any non-executive director may also attend meetings by invitation. The committees play an important role in enhancing high standards of governance and achieving increased effectiveness within the group.

The board considers the allocation of roles and associated responsibilities and the composition of membership across committees holistically.

Any delegation by the board of its responsibilities to a committee will not constitute a discharge of its accountability.

The board applies its collective mind to the information, opinions, recommendations, reports and statements presented by the committee chairmen.

of authority and	The chief executive officer was appointed by the board, on recommendation of the
responsibilities	nomination committee. His role and responsibilities are set out in the board charter.
	The board, assisted by the nomination committee, is responsible for ensuring succession
	plans are in place for the chief executive officer and other senior executives.
	The board approves and regularly reviews the delegation-of-authority framework in terms
	of which matters are delegated to the chief executive officer. He is accountable to the
	board for the successful implementation of our strategy and overall management and
	performance of the group, consistent with our values. He is supported by a competent,
	multi-skilled team in executing his responsibilities.
	The chief executive officer is not a member of board committees but attends any meeting
	or part thereof by invitation to contribute pertinent insights and information. The board
	evaluates the performance of the chief executive officer annually against agreed
	performance measures and targets. The chief executive officer does not hold any
	external board appointments.

Group company secretary and governance officer

The group company secretary and governance officer is appointed by the board in line with the Companies Act and JSE Listings Requirements. Her performance is evaluated annually during the independent assessment of board effectiveness. The board

is satisfied that she is properly qualified and experienced to competently carry out the duties and responsibilities of a company secretary.

Refer to integrated annual report or ESG report for additional information.	ESG IAR

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Application of King IV continued

Governance outcome: Effective control continued

Governance functional areas

Governance outcome: Effective control continued Governance functional areas continued

Principle 11	RiskLeadershipgovernance
The board should govern	In terms of its charter, the board takes overall responsibility for risk management with
risk in a way that supports	an implemented formal process that is delegated to the audit and risk committee. The
the company in setting and	board sets the company's risk appetite and tolerance levels, which provide the basis for
achieving its strategic	achieving the strategic objectives detailed in our integrated annual report. The audit and
objectives	risk committee assists the board with the governance of risk and monitors risk
	management. It is supported by the management risk and compliance committee, which
	reports quarterly to the audit and risk committee on the enterprise risk management plan
	(approved annually by the audit and risk committee) and the enterprise risk management
	policy (approved annually by the board). As per the audit and risk committee's terms
	of reference, management designs, implements and monitors the plan and
	is accountable for embedding the risk management process in the business. Day-to-day
	responsibility for managing the plan rests with the finance director.
	Refer to risk section in ESG report.	ESG
Principle 12	TechnologyLeadershipand information governance

Principle 13

The board should govern in compliance with applicable laws and adopted non-binding rules, codes and standards

in a way that supports the company being ethical and a good corporate citizen

ComplianceLeadershipgovernance

The board has fulfilled its responsibilities in accordance with its charter, Companies Act provisions for the establishment of the company and the company's memorandum

of incorporation for the 2023 financial year. The board also adhered to the highest standards of corporate governance and maintained an effective framework and processes for compliance with all relevant laws and regulations.

The board takes overall responsibility for compliance management, with an implemented formal process that is delegated to the audit and risk committee. The management risk and compliance committee has oversight of risk management and legal compliance responsibilities. The code of conduct, approved by the board, sets out the requirement for legal compliance. The company has a legal compliance policy and compliance management framework and has identified the legal universe applicable to ARM. Implementation of the policy is monitored by the management risk and compliance committee, which reports to the audit and risk committee as well as the social and ethics committee. The company's compliance executive attends meetings of the management risk and compliance committee, technology and information committee, audit and risk committee, social and ethics committee, executive committee and board.

The board should govern technology and information in a way that supports the company in setting and achieving its strategic objectives

As per the board charter and audit and risk committee's terms of reference, this committee assists the board with technology and information governance. The governance framework, including procedures and structures to achieve the company's strategic objectives, was adopted by the board, which delegates implementation

to management. The technology and information committee reports via the management risk and compliance committee and, directly, to the audit and risk committee. The board approved an amendment to the information technology strategy in the 2022 financial year. Following gap analyses in prior years, areas were identified where the application of King IV required enhancement and ARM is implementing the plan to address these gaps. Management continued with implementation of the plan in the 2023 financial year.

Refer to the technology and information governance section in ESG report.	ESG

	Refer to the ESG report.	ESG
Principle 14	RemunerationLeadership governance
The board should ensure	The company's remuneration strategy ensures a balance in attracting, motivating and
that the company	retaining human capital through competitive remuneration practices, while creating
remunerates fairly,	shareholder value. The remuneration committee considers the pay gap. Our remuneration
responsibly and	policy was designed to give effect to the remuneration strategy, support business
transparently to promote	objectives in the broader operating environment and offer a balanced remuneration mix
the achievement	in line with our values and goals.
of strategic objectives and
positive outcomes in the	Refer to managing performance through remuneration in the integrated annual report,
short, medium and long	and remuneration report in the ESG report.
term	ESG IAR

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Application of King IV continued

Governance outcome: Effective control continued Governance functional areas continued

Governance outcome: Legitimacy Stakeholder relationships

Principle 15

AssuranceLeadership

Principle 16

StakeholdersLeadership

The board should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the company's external reports

Combined assurance

The board has delegated to the audit and risk committee oversight of the effectiveness of the company's assurance services, with particular focus on combined assurance. This includes external audit, internal audit and the finance function as well as the integrity

of the integrated annual report and annual financial statements and, to the extent delegated by the board, other external reports issued by the company.

The combined assurance model incorporates and optimises all assurance activities and functions so that, taken as a whole, these enable an effective control environment, support the integrity of information used for decision-making by management, the board and its committees, and support the integrity of ARM's external reports.

The audit and risk committee also annually considers and satisfies itself on the appropriateness of the expertise and experience of the finance director and the finance function.

Refer to risk section, including combined assurance, in the ESG report.	ESG

Assurance of external reports

With the assistance of independent assurers, such as the external auditor, the audit and risk committee reviews and evaluates the annual financial statements prior

to recommending them to the board for approval. Various other assurers assist the audit and risk committee and other board committees in reviewing the integrated annual report and supplementary reports. The integrated annual report and supplementary reports provide a consolidated review of ARM's sustainability, including its financial, economic, social and environmental performance on matters material to its strategy and key stakeholders. Sustainability reporting and disclosure are independently assured, and review processes are structured to ensure the integrity of sustainability reporting.

Refer to independent auditor's report in annual financial statements and	ESG AFS
assurer's report in the ESG report.

In the execution of its governance role and responsibilities, the board should adopt

1. stakeholder-inclusiveapproach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time

ARM recognises the benefits of strong long-term relationships with its stakeholders. We consider the legitimate and reasonable interests and expectations of our stakeholders as important inputs to how we conduct our business. Stakeholder interactions provide a broader context, inform our most material matters, help us refine our strategy and shape ARM's long-term direction. The company engages its stakeholders on multiple levels and this allows it to manage material matters effectively and timeously, and reduces the likelihood of reputational risks. Stakeholder relationships are a standing board agenda item.

The company identifies stakeholders through formal and informal channels at the corporate, divisional and operational levels as appropriate to the stakeholder. ARM uses many forums to facilitate effective stakeholder engagement and ensures material matters have been identified, prioritised and appropriately addressed.

The company's stakeholder communication policy, included in the ARM code of conduct, ensures that timely, relevant and accurate information is provided to stakeholders.

The company complies with the Companies Act and JSE Listings Requirements on the equitable treatment of shareholders. Directors are mindful of their fiduciary responsibilities and their duty to act in accordance with applicable legislation. Records of directors' financial, economic and other interests are kept and continually updated. The board as a whole acts as a steward of the company and each director acts with independence of mind in the best interests of the company and its stakeholders. In its deliberations, decisions and actions, the board is sensitive to the legitimate interests and expectations of the company's stakeholders.

Formal dispute-resolution policies are in place and dispute-resolution provisions are included in contracts. Where disputes occur, the main objective is to resolve these as effectively and expeditiously as possible.

For more on our stakeholder relationships and engagements.	ESG

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Internal audit

The audit and risk committee is responsible for overseeing that assurance services are performed in terms of the internal audit charter. The company has an outsourced internal audit function and its role and responsibilities are set out in a charter that requires, inter alia, performing risk-based internal audits against an internal audit plan approved by the audit and risk committee. The internal auditor submits formal reports to this committee quarterly. The annual financial statements include the audit and risk committee's confirmation of having received the internal auditor's written assessment of the effectiveness of the company's governance, risk management and control processes, including the effectiveness of its systems of internal financial controls.

Refer to risk section in the ESG report and audit and risk committee report

in the annual financial statements.	ESG AFS

Principle 17

ResponsibLeadershilitiesp of institutional investors

The governing body of an Principle 17 is not applicable as the company is not an institutional investor organisation. institutional investor

organisation should ensure that responsible investment is practiced by the company to promote the good governance and the creation of value by the companies which it serves

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