Northam Platinum : Annual financial statements 2021

The new Northam: continuing to create value for all stakeholders

Annual financial statements 30 June 2021

CONTENT

Chief executive officer and the Finance Director responsibility statement	2
Directors' responsibilities and approval of annual financial statements	3
Company secretary's confirmation	3
Audit and risk committee report	4
Independent auditor's report for Northam Platinum Limited	15
Independent auditor's report for Northam Platinum Holdings Limited	18
Directors' report	20
Statements of profit or loss and other comprehensive income	36
Statements of financial position	37
Statements of changes in equity	38
Statements of cash flows	39
Accounting policies and notes to the annual financial statements	40
Analysis of Northam Shareholders	165
Administration and contact information	166

Basis of preparation

As detailed in the combined circular to Shareholders of Northam, accompanied by the prospectus in respect of Northam Holdings, both dated Monday, 31 May 2021 (collectively, the Transaction Documents) and the announcement published on SENS on 20 September 2021, the Northam Scheme (as defined therein) was implemented on 20 September 2021, in terms of which, inter alia, Northam Holdings acquired all of the Northam Shares in issue (excluding Treasury Shares) by way of a share for share transaction and Northam became a subsidiary of Northam Holdings.

The disclosures regarding the Composite Transaction (as defined in the Transaction Documents) included in the various group publications, including the annual financial statements of the company and the group are made in accordance with the requirements included in International Accounting Standards 10 Events after the Reporting Period (IAS 10). IAS 10 paragraph 21 requires the disclosure of material non-adjusting events occurring after the reporting period when non-disclosure could influence the decisions of users of the annual financial statements made on the basis of those annual financial statements. The Composite Transaction constitutes such an event. The following disclosures are required in respect thereof: (a) the nature of the event; and (b) an estimate of its financial effect, or a statement that such an estimate cannot be made.

In line with the reporting requirements of International Financial Reporting Standards (IFRS) and following the guidance of IAS 10 as disclosed above, unless otherwise stated, all values and number of shares relating to the Composite Transaction have been disclosed based on calculations as at the Last Practicable Date prior to the finalisation of the Transaction Documents, being 30 April 2021, in accordance with the disclosures made in the Transaction Documents. Such disclosure is provided for illustrative purposes only, to provide an estimate of the financial effect of the Composite Transaction as required by IAS 10. The actual financial effect of the Composite Transaction may vary.

Users of the various group publications (which includes the annual financial statements) are referred to the Transaction Documents for additional information relating to the Composite Transaction, as well as the underlying assumptions and judgements applied in calculating the number of shares, as well as the values disclosed, in order to obtain a fully informed view of the nature and potential impact of the Composite Transaction.

Defined terms

Unless otherwise defined, capitalised words and terms contained in these annual financial statements shall bear the same meaning ascribed thereto in the Glossary included in both the annual integrated report as well as the summarised year-end results and Composite Transaction Glossary included in the summarised year-end results.

These annual financial statements have been prepared under the supervision of the chief financial officer, AH Coetzee CA(SA).

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CHIEF EXECUTIVE OFFICER AND THE FINANCE DIRECTOR RESPONSIBILITY STATEMENT

The directors, whose names are stated below, hereby confirm that:

• The annual financial statements set out on pages 36 to 164 of this document, fairly present in all material respects the financial position, financial performance and cash flows of Northam and the group in terms of IFRS.
• 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 Northam and its consolidated subsidiaries have been provided to effectively prepare the financial statements of Northam and the group.
• The internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, having fulfilled our role and function within the combined assurance model pursuant to principle 15 of the King IV Report on Governance for South Africa, 2016. Where we are not satisfied, we have disclosed to the audit and risk committee and the auditors the deficiencies in design and operational effectiveness of the internal financial controls and any fraud that involves directors, and have taken the necessary remedial action.

PA Dunne	AH Coetzee
Chief executive officer	Chief financial officer
Johannesburg
23 September 2021

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DIRECTORS' RESPONSIBILITIES AND APPROVAL OF ANNUAL FINANCIAL STATEMENTS

In approving the annual financial statements, the directors hereby confirm:

• That they are responsible for the preparation, integrity and fair presentation of the annual financial statements of Northam and its subsidiaries. The auditors are responsible for auditing and reporting on whether the annual financial statements are fairly presented.
• The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can only provide reasonable and not absolute, assurance against material misstatement or loss.
• The annual financial statements have been prepared in accordance with IFRS. They conform and adhere to applicable accounting standards and are presented after applying accounting policies supported by reasonable and prudent judgements and estimates made by management, which have been consistently applied.
• Adequate accounting records and an effective system of internal controls and risk management have been maintained during the entire financial year.
• They have reviewed the additional information included in the annual integrated report and are responsible for both the accuracy and consistency of the annual financial statements.
• The going concern basis has been adopted in preparing the annual financial statements. The directors have no reason to believe that the group will not be a going concern in the foreseeable future based on forecasts and available cash resources. These financial statements support the viability of the company and the group.
• The annual financial statements have been audited by the independent auditors, Ernst & Young Inc. who were given unrestricted access to all financial records and related data including minutes of all meetings of shareholders, the board of directors and committees of the board. The directors believe that all representations made to the independent auditors during their audit are valid and appropriate. The unmodified audit report of Ernst & Young Inc. is included in these annual financial statements.

The annual financial statements were approved by the board of directors on 23 September 2021 and are signed on its behalf by:

DH Brown	PA Dunne	HH Hickey
Chairman	Chief executive officer	Chairperson - audit and risk committee
Johannesburg
23 September 2021

COMPANY SECRETARY'S CONFIRMATION

I, PB Beale, in my capacity as company secretary of Northam, hereby certify in terms of section 88(2) of the Companies Act, No. 71 of 2008, as amended (Companies Act) that all returns and notices required of a public company in terms of the Companies Act, in respect of the year under review, have been lodged with the Companies and Intellectual Property Commission and that all such returns are true, correct and up to date.

PB Beale

Company secretary

Johannesburg

23 September 2021

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AUDIT AND RISK COMMITTEE REPORT

This audit and risk committee report has been prepared in terms of section 94(7) of the Companies Act, No. 71 of 2008, as amended (the Companies Act), the King IV Report on Governance for South Africa, 2016 (King IV™), the JSE Limited (JSE) Listings Requirements and other applicable regulatory requirements.

This report sets out how the audit and risk committee of Northam and/or Northam Holdings (as the case may be) (the committee) has satisfied its various statutory obligations during the year, as well as some of the focus areas considered, and how these have been addressed by the committee.

Associated capitals addressed by the committee

• Financial
• Manufactured
• Intellectual

Risks and opportunities addressed by the committee

• Exchange rate and commodity price volatility
• Liquidity
• Fraud and theft
• Information Technology and cyber security
• Empowerment transaction
• Capital allocation

Related material issues addressed by the committee

• Maintaining our legislative and regulatory compliance, focussing on the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter
• Maintaining constructive communication channels with all our stakeholders
• Liquidity management to mitigate market volatility
• Ongoing impact of COVID-19

Role and mandate

The committee's main role is to assist the board of directors (board) in fulfilling its oversight responsibilities relating to the safeguarding of assets, the operation of adequate risk management and internal control processes, as well as the preparation of financial statements in compliance with all applicable legislation and regulations.

In addition, the committee has oversight of the external and internal audit appointments, and is responsible for assessing the effectiveness of the internal audit function, the chief financial officer (CFO), as well as the independence and effectiveness of the group's external auditor and the designated individual audit partner.

As part of its mandate, the committee has the authority to investigate matters within the scope of its defined responsibility and to request information or explanations necessary for the performance of its functions.

The committee does not assume the functions of management, as these functions remain the responsibility of the executive directors and senior management.

The committee also does not provide relief to board members in terms of their collective and individual fiduciary duties.

These responsibilities are in terms of the mandate of the committee as defined in section 94(7) of the Companies Act, JSE Listings Requirements and the audit and risk committee charter.

Refer to the audit and risk committee charter at www.northam.co.za/governance/policies-and-procedures.

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