Chapter 2: Reports

2.6 Independent external auditor's report

To the shareholders of Exxaro Resources Limited

Report on the audit of the consolidated and separate financial statements

Opinion

We have audited the consolidated and separate financial statements of Exxaro Resources Limited (the group and company) set out here, which comprise:

The group and company statements of financial position at 31 December 2025
The group and company statements of comprehensive income
The group and company statements of changes in equity
The group and company statements of cash flows for the year then ended
Notes to the group and company financial statements, including material accounting policy information

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Exxaro Resources Limited at 31 December 2025, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and the requirements of the Companies Act of South Africa.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of our report. We are independent of the group and company in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the corresponding sections of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In terms of the IRBA Rule on Enhanced Auditor Reporting for the Audit of Financial Statements of Public Interest Entities, published in Government Gazette No. 49309 dated 15 September 2023 (EAR Rule), we report:

Final materiality

The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:


	Consolidated financial statements	Separate financial statements
Final materiality	R635 million, which is 4.57% of adjusted Profit Before Tax (PBT).	R450 million, which is 4.84% of adjusted Profit Before Tax (PBT)
Rationale for benchmark and percentage applied	We chose PBT as it is an appropriate benchmark for an entity that is listed and profit orientated. Profitability is a key performance measure and metric for decision making to the users of the consolidated and separate financial statements. In respect of the consolidated financial statements, we adjusted PBT for the tax effect of the post-tax share of income of equity-accounted investments. In respect of the separate financial statements, we adjusted PBT for significantly higher dividends income received that does not represent normal operating conditions. We applied 4.57% and 4.84% (consolidated and separate financial statements respectively) to PBT which is consistent with quantitative materiality thresholds used for profit-orientated companies in this sector and is further based on our professional judgement after consideration of qualitative factors that impact both the group and company.

Consolidated financial statements

Separate financial statements

Final materiality

R635 million, which is 4.57% of adjusted Profit Before Tax (PBT).

R450 million, which is 4.84% of adjusted Profit Before Tax (PBT)

Rationale for benchmark and percentage applied

We chose PBT as it is an appropriate benchmark for an entity that is listed and profit orientated. Profitability is a key performance measure and metric for decision making to the users of the consolidated and separate financial statements.

In respect of the consolidated financial statements, we adjusted PBT for the tax effect of the post-tax share of income of equity-accounted investments.

In respect of the separate financial statements, we adjusted PBT for significantly higher dividends income received that does not represent normal operating conditions.

We applied 4.57% and 4.84% (consolidated and separate financial statements respectively) to PBT which is consistent with quantitative materiality thresholds used for profit-orientated companies in this sector and is further based on our professional judgement after consideration of qualitative factors that impact both the group and company.

Group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the group, the accounting processes and controls, and the industry in which the group operates.

We performed risk assessment procedures to determine which of the group’s components are likely to include risks of material misstatement to the consolidated financial statements and which further audit procedures to perform at these components to address those risks. Our judgement included assessing the size of the components, nature of assets, liabilities and transactions within the components as well as specific risks.

In total, we identified eight (8) components which required further audit procedures to be performed on one or more classes of transactions, account balances or disclosures based on the assessed risks of material misstatement to the consolidated financial statements.

Accordingly, component auditors were involved in the work performed for each of these eight components.

For the remaining financial information, we performed an analysis at an aggregated group level to re-examine our risk assessment to support our final determination that there is less than a reasonable possibility of a material misstatement in the remaining financial information.

Key audit matter

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to report in respect of the separate financial statements.

In terms of the EAR Rule, we are required to report the outcome of audit procedures or key observations with respect to the key audit matters, and these are included below.


Key audit matter		How the matter was addressed in our audit
Environmental rehabilitation provisions Refer to the following material accounting policies and notes to the consolidated and separate financial statements: Chapter 13, note 13.1 – Accounting policies relating to provisions and contingencies Chapter 13, note 13.2 – Significant judgements and assumptions made by management in applying the related accounting policies Chapter 13, note 13.3 – Provisions
Determining the present value of the total environmental rehabilitation provisions required the exercise of challenging, subjective and complex auditor judgment. This included specialised skills and knowledge in evaluating the environmental rehabilitation provisions, particularly in relation to: Estimation of the undiscounted environmental rehabilitation costs (unscheduled restoration and decommissioning closure costs) which includes: determination of the closure cost estimate plans or activities required to achieve the fulfilment of the legal and regulatory obligations quantification of the extent of the unscheduled closure and post-closure cost estimates the water management and treatment obligations that are based on largely unobservable data and are subject to considerable uncertainty Expected date of cessation of mining activities (LoM) The group's estimates of the undiscounted environmental rehabilitation costs are based on significant judgements and assumptions made by management, which may not be reasonable or appropriate, resulting in an inaccurate or inappropriately valued provision. Based on the above factors we have determined the environmental rehabilitation provisions to be a key audit matter in respect of the consolidated financial statements.		Our team included senior, experienced audit team members and our internal environmental rehabilitation provisions specialists. The procedures we performed included the following: We updated our understanding of management's processes, procedures and controls implemented by following the process from initiation to recording We identified and tested the design and implementation of relevant controls by determining if the process risk points were addressed by the designed control We obtained and aligned our understanding of the methods, models, data and assumptions selected and applied by management (and management's environmental experts) to determine both the undiscounted environmental rehabilitation costs, as well as the present value of the obligation by performing an analysis of the selection and application of methods, models, data and assumptions against industry practice, and our understanding of the entity and environmental rehabilitation provisions We evaluated the appropriateness of the accounting policies based on the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets (IAS 37), and our understanding of the business and industry practice We evaluated the mathematical accuracy of management's models through analysis, recalculation and reasonability checks We evaluated the reasonableness of and challenged the selection and application of management's key assumptions and judgements, including: the determination of the plan or activity required to achieve the fulfilment of the legal and regulatory obligations against the applicable laws and regulations, industry practice and our understanding of the entity the quantification of the extent of disturbance and the cost rate to rehabilitate to determine the undiscounted environmental rehabilitation costs by assessing the reasonableness of those quantities, rates and specific adjustments through inspection of surveyor reports, invoices or quotations and market related practice the expected date of the cessation of mining activities to determine the term of the valuation through analysis of managements expert's assessments and our understanding of the entity the costs and present value of all of the associated water treatment provisions through recalculation, validating the assumption to the market and assessing feasibility of plans We evaluated the completeness, accuracy, relevance and reliability of the data used in managements models through vouching to support and assessing managements expert We evaluated the objectivity, knowledge, skills and ability of management's environmental experts by obtaining an understanding and evidence of their independence, professional qualifications, experience, affiliations and scope of work We recalculated the present value of the obligation using independently sourced discount rates and inflation rates, in order to assess the reasonability of the present value of the total environmental rehabilitation provisions We evaluated the appropriateness of accounting for the change in estimates recognised in profit or loss or allocated to the related decommissioning asset by performing a recalculation and determining an expectation We evaluated the appropriateness of the disclosures made as presented in the consolidated financial statements against the requirements of IAS 37 Based on the procedures performed above in respect of the environmental rehabilitation provisions, we did not identify any significant matters requiring further consideration.

Key audit matter

How the matter was addressed in our audit

Environmental rehabilitation provisions

Refer to the following material accounting policies and notes to the consolidated and separate financial statements:

Chapter 13, note 13.1 – Accounting policies relating to provisions and contingencies
Chapter 13, note 13.2 – Significant judgements and assumptions made by management in applying the related accounting policies
Chapter 13, note 13.3 – Provisions

Determining the present value of the total environmental rehabilitation provisions required the exercise of challenging, subjective and complex auditor judgment. This included specialised skills and knowledge in evaluating the environmental rehabilitation provisions, particularly in relation to:

Estimation of the undiscounted environmental rehabilitation costs (unscheduled restoration and decommissioning closure costs) which includes:
- determination of the closure cost estimate plans or activities required to achieve the fulfilment of the legal and regulatory obligations
- quantification of the extent of the unscheduled closure and post-closure cost estimates
- the water management and treatment obligations that are based on largely unobservable data and are subject to considerable uncertainty
- Expected date of cessation of mining activities (LoM)

The group's estimates of the undiscounted environmental rehabilitation costs are based on significant judgements and assumptions made by management, which may not be reasonable or appropriate, resulting in an inaccurate or inappropriately valued provision.

Based on the above factors we have determined the environmental rehabilitation provisions to be a key audit matter in respect of the consolidated financial statements.

Our team included senior, experienced audit team members and our internal environmental rehabilitation provisions specialists.

The procedures we performed included the following:

We updated our understanding of management's processes, procedures and controls implemented by following the process from initiation to recording
We identified and tested the design and implementation of relevant controls by determining if the process risk points were addressed by the designed control
We obtained and aligned our understanding of the methods, models, data and assumptions selected and applied by management (and management's environmental experts) to determine both the undiscounted environmental rehabilitation costs, as well as the present value of the obligation by performing an analysis of the selection and application of methods, models, data and assumptions against industry practice, and our understanding of the entity and environmental rehabilitation provisions
We evaluated the appropriateness of the accounting policies based on the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets (IAS 37), and our understanding of the business and industry practice
We evaluated the mathematical accuracy of management's models through analysis, recalculation and reasonability checks
We evaluated the reasonableness of and challenged the selection and application of management's key assumptions and judgements, including:
- the determination of the plan or activity required to achieve the fulfilment of the legal and regulatory obligations against the applicable laws and regulations, industry practice and our understanding of the entity
- the quantification of the extent of disturbance and the cost rate to rehabilitate to determine the undiscounted environmental rehabilitation costs by assessing the reasonableness of those quantities, rates and specific adjustments through inspection of surveyor reports, invoices or quotations and market related practice
- the expected date of the cessation of mining activities to determine the term of the valuation through analysis of managements expert's assessments and our understanding of the entity
- the costs and present value of all of the associated water treatment provisions through recalculation, validating the assumption to the market and assessing feasibility of plans
We evaluated the completeness, accuracy, relevance and reliability of the data used in managements models through vouching to support and assessing managements expert
We evaluated the objectivity, knowledge, skills and ability of management's environmental experts by obtaining an understanding and evidence of their independence, professional qualifications, experience, affiliations and scope of work
We recalculated the present value of the obligation using independently sourced discount rates and inflation rates, in order to assess the reasonability of the present value of the total environmental rehabilitation provisions
We evaluated the appropriateness of accounting for the change in estimates recognised in profit or loss or allocated to the related decommissioning asset by performing a recalculation and determining an expectation
We evaluated the appropriateness of the disclosures made as presented in the consolidated financial statements against the requirements of IAS 37

Based on the procedures performed above in respect of the environmental rehabilitation provisions, we did not identify any significant matters requiring further consideration.

Other information

The directors are responsible for the other information. The other information comprises the information included in the document titled “Exxaro Resources Limited group and company annual financial statements for the year ended 31 December 2025”, which includes the report of the directors, the audit committee report and the certificate by the group company secretary as required by the Companies Act of South Africa. The other information does not include the consolidated and separate financial statements and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information, and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated and separate financial statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group and company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group and company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the consolidated and separate financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a highlevel assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group and company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group and company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that KPMG Inc. has been the auditor of Exxaro Resources Limited for four (4) years.

KPMG Inc.

Registered Auditor

Per SM Loonat
Chartered Accountant (SA)
Registered Auditor
Director

29 April 2026