Audit committee

Audit committee report

Composition as at 31 December 2024

Nondumiso Medupe
Chairperson

Billy Mawasha

Chanda Nxumalo

Nosipho Molope

Role and purpose

The committee is an independent, statutory committee whose members are appointed annually by Exxaro's shareholders in compliance with section 94 of the Companies Act and the principles of good governance. In terms of the Companies Act, this committee has an independent role with accountability to the board and shareholders of the company. The committee does not assume the functions of management, which remain the responsibility of the executive directors, prescribed officers and other members of senior management, nor does it assume accountability for the functions performed by other committees of the board. In addition to the Companies Act, the committee's duties are guided by the JSE Listings Requirements and King IV.

The committee is governed by its terms of reference that codify its role and responsibilities. To assist the board, the committee plays an essential role in providing independent oversight of the:

• Quality and integrity of the financial statements and related public announcements
• Integrity of the integrated reporting process and content of the reporting suite
• Qualification and independence of the external auditor
• Scope and effectiveness of the external audit function
• Scope and effectiveness of the overall combined/integrated assurance process
• Efficacy of internal controls and the internal audit function
• Assessment of the adequacy of Exxaro's insurance arrangements regarding the nature of our business and insurable risks
• Integrity and efficacy of the risk management process relating specifically to internal controls and financial reporting risks assurance over system controls and policies in place

Terms of reference

The committee's terms of reference are reviewed annually. The review took place in the first quarter of 2025 and the revised terms of reference were subsequently approved by the board. The review ensured the terms of reference remain aligned to relevant legislation, regulations and King IV.

Key focus areas 2024/2025

Monitor the progress and implementation of the strategy concerning the deployment of new post-modern enterprise resource planning solutions to ensure acceptable cost, risk and alignment with the Exxaro strategy

Evaluate whether the company has incorporated digitalisation and utilisation of advanced technologies, eg AI

Review Exxaro’s future strategy regarding insurance cover and self-insurance, considering global resistance to thermal coal and insurance markets

Monitor the impact of cybersecurity risks in the finance and internal control environment

Monitor talent challenges in the finance and internal audit functions as a result of the global war for talent

Confirmation

The committee is satisfied that it has discharged its responsibilities and fulfilled its mandate in accordance with its terms of reference, the Companies Act, the JSE Listings Requirements (paragraph 3.84(g) in particular) and King IV.