Dear shareholders,
I am pleased to present the investment committee report as we work to responsibly further the strategic objective of transitioning at speed and scale in support of Exxaro's purpose and vision for the year ended 31 December 2023.
Ben Magara
Investment committee chairperson
The board appoints committee members on the recommendation of the nomination committee. The board ensures that there is a balanced blend of skills and experience so the committee is able to discharge its function.
In 2023, the committee had four independent non-executive directors and two non-executive directors. The board is satisfied that the committee members have the necessary experience.
Isaac Mophatlane (former chairperson of the committee) and Vuyisa Nkonyeni (former committee member) retired by rotation at the AGM on 18 May 2023.
The committee welcomed the appointment of Ben Magara as a member and chairperson of the committee from 18 May 2023.
The CEO, finance director and chief growth officer 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 required.
Refer to our board of directors for members' qualifications and experience.
Gender and racial diversity
The committee held two scheduled quarterly meetings and three special meetings in 2023:
| Members | Designation | Attendance at scheduled meetings |
Attendance at special meetings |
| Ben Magara | Independent non-executive director and committee chairperson | 1/1* | 3/3 |
| Isaac Malevu | Non-executive director | 1/2 | 2/3 |
| Billy Mawasha | Independent non-executive director | 2/2** | 2/3 |
| Mandlesilo Msimang | Non-executive director | 2/2 | 2/2 |
| Chanda Nxumalo | Independent non-executive director | 2/2 | 3/3 |
| Peet Snyders | Independent non-executive director | 2/2 | 3/3 |
| Isaac Mophatlane | Independent non-executive director | 1/1*** | |
| Vuyisa Nkonyeni | Independent non-executive director | 1/1*** |
| * | Ben Magara appointed as member and chairperson, effective after the 2023 AGM. |
| ** | Billy Mawasha was recused from one meeting and one agenda item of another meeting. |
| *** | Isaac Mophatlane (former committee chairperson) and Vuyisa Nkonyeni (former member) retired by rotation at the AGM on 18 May 2023. |
This committee plays a key role in the execution of the Exxaro Sustainable Growth and Impact strategy.
The committee has an independent role where it:
Importantly, the committee reviews the strategic fit, risk assessment and outcomes of financial, technical and legal due diligence for major investments. It ensures adherence to all Exxaro's governance processes and that we meet the approved hurdle rates, set from time to time, before we commit any funds.
An investment opportunity will, therefore, first serve at the investment committee, where a detailed review will be conducted in line with the investment criteria approved by the board. After the review, the committee may recommend the investment opportunity to the board for final approval.
We reviewed the committee's terms of reference in line with principle 8 of King IV, with minor amendments and rephrasing enhancements. The board approved the revised terms of reference which align with legislation, regulations and King IV.
The committee's mandate requires that disclosure of interest is in focus at the time of circulating information to the committee members and before the commencement of any meeting. Any declaration or recusal by members is captured in the meeting minutes to ensure transparency.
As there is no regulatory requirement to conduct an annual external independent performance assessment, while King IV recommends regular performance evaluations for all board committees, it is a governance practice at Exxaro to conduct such independent assessments every second year.
At the end of 2023, an internal evaluation of the performance and effectiveness of the committee was conducted in accordance with King IV recommendations. The evaluation aimed to identify and record areas needing strengthening or refinement while considering internal and external dynamics and factors that may positively or negatively impact the committee's ability to enhance its performance and effectiveness in these areas. The assessment concluded that the committee functions effectively.
| Key highlights | Material themes |
| Monitored the minerals and energy growth pipelines |  |
| Reviewed the energy investment criteria | |
| Monitored progress in the implementation of the LSP and recommended the investment decision for board approval | |
| Considered, guided and recommended participation in proposed acquisitions to fit long-term minerals and energy strategy | |
| Noted outcomes of due diligence processes and monitored progress regarding various proposed transactions in line with executing the Exxaro strategy | |
Key focus areas 2023/2024
| Monitoring divestments and acquisitions |
| Reviewing and recommending for approval investment guidelines for minerals (energy review completed) |
| Monitoring the energy and minerals ESG KPIs and dashboard |
| Continuing to guide and recommend participation in proposed acquisitions that fit our long-term minerals and energy strategy |
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 conducted its affairs and discharged its responsibilities in accordance with its terms of reference.
On behalf of the investment committee
Ben Magara
Investment committee
chairperson
10 April 2024
Report Index
IR