Investment committee report

The committee's role is to review the strategic fit and risk appetite, and financial, technical and legal due diligences for major investments. It shall further ensure adherence to all Exxaro's governance processes at all times and that the approved hurdle rates, set from time to time, are met before any funds are committed. An investment opportunity will therefore first serve at the investment committee where a detailed review shall be conducted in line with the investment criteria approved by the board. After the review, the investment opportunity may be recommended by the committee to the board for final approval.

The committee's role expanded in 2022 to include consideration of Exxaro's capital allocation strategy.

Composition

Committee members are appointed by the board, on recommendation of the nomination committee, and ensure there is a balanced blend of skills and experience so that the committee is able to discharge its function.

For the year under review, the committee had five independent non-executive directors and two non-executive directors. The board is satisfied that the committee members have the necessary experience. The committee welcomed the appointment of Billy Mawasha as a member of the committee with effect from 7 February 2022.

The CEO, FD and managing director: minerals attend investment committee meetings as standing invitees. Other members of the executive team and senior managers representing areas relevant to investment committee discussions attend meetings as and when required.

 Refer to board of directors for members' qualifications and experience.

Meetings

The committee held three scheduled meetings during 2022 and five special meetings. The committee's satisfactory attendance illustrates high levels of engagement by committee members.

The following table provides an overview of designations and members' attendance at meetings during the period under review:

Members	Designation	Attendance at four quarterly meetings	Attendance at one special meeting
Isaac Mophatlane	Independent non-executive director and chairperson	3/3	5/5
Billy Mawasha	Independent non-executive director	3/3	2/4*
Isaac Malevu	Non-executive director	2/3**	2/5**
Mandlesilo Msimang	Non-executive director	3/3	5/5
Chanda Nxumalo	Independent non-executive director	3/3	5/5
Vuyisa Nkonyeni	Independent non-executive director	3/3	3/5
Peet Snyders	Independent non-executive director	3/3	5/5

*Billy Mawasha appointed member with effect from 7 February 2022 and was recused from one special meeting.
** Isaac Malevu was recused from three special meetings.

Terms of reference

The committee's terms of reference were reviewed and are aligned with legislation, regulations and King IV. The committee is satisfied that it has conducted its affairs and discharged its responsibilities in accordance with its terms of reference.

2022 in review

The committee oversaw the following during the year under review:

• Divestments: The committee received updates on ongoing and proposed divestments in line with Exxaro's strategy
• Acquisitions: The committee considered potential acquisitions by the energy and minerals business in line with Exxaro's strategic objectives
• Governance: The committee reviewed its terms of reference
• Investment framework: To ensure it fulfils its role, the committee considered a framework that would serve as a guideline for presentations of investment and acquisition opportunities

Key focus areas for 2023

The committee identified the following key focus areas for 2023:

Continue to monitor and oversee divestments and acquisitions

Review and recommend for approval investment guidelines for energy and minerals businesses

Monitor the energy and minerals strategic KPIs and dashboard

Review the discount policy and the weighted average cost of capital

Performance evaluation

During the period under review, an independent evaluation of the performance and effectiveness of the board, its committees and specific individuals was conducted. The purpose was also to identify and record possible areas in need of strengthening and/or refinement while considering internal and external dynamics, and factors that may positively or negatively impact the board's ability to enhance its performance and effectiveness. From the evaluation report, an action plan was developed and its implementation will be monitored by the nomination committee.

Conclusion

The committee, in carrying out its duties, has due regard of its terms of reference and the principles and recommended practices of King IV. The committee is satisfied that it has considered and discharged its responsibilities.

The committee would like to thank management for all the hard work during the year under review.

On behalf of the investment committee

Isaac Mophatlane
Investment committee chairperson
14 April 2023