Impala Platinum Holdings Limited (Implats, the Company or the Group) is a leading producer of platinum group metals (PGMs). Implats is structured around six mining operations and Impala Refining Services (IRS), a toll refining business. The mining operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe – the two most significant PGM-bearing ore bodies in the world – and the Canadian Shield, a prominent layered igneous complex domain for PGMs.

Implats has its primary listing on the JSE Limited (JSE) and a secondary listing on A2X Markets in South Africa, as well as a level 1 American Depositary Receipt programme in the United States of America.

The summarised consolidated financial statements were approved for issue on 1 September 2022 by the board of directors.

The summarised consolidated financial statements have been derived from the audited consolidated financial statements. The summarised consolidated financial statements for the year ended 30 June 2022 have been audited by our external auditor, Deloitte & Touche, who has expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion on the consolidated financial statements, which included key audit matters, from which these summarised consolidated financial statements were derived. A copy of the auditor's report on the summarised consolidated financial statements is available above. The auditor's report does not necessarily report on all the information contained in this announcement. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement, they should refer to auditor's report above. Any forward-looking statements have not been reviewed or reported on by the Company's external auditor.

The summarised consolidated financial statements for the year ended 30 June 2022 have been prepared in accordance with the Listings Requirements of the JSE Limited and A2X Markets, the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guidelines as issued by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting Standards Council, the Companies Act, 71 of 2008 and the minimum requirements of International Accounting Standards (IAS) 34 Interim Financial Reporting.

The summarised consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 30 June 2022, which have been prepared in accordance with IFRS, and the commentary included in the results.

The summarised consolidated financial statements have been prepared under the historical-cost convention except for certain financial assets, financial liabilities and derivative financial instruments which are measured at fair value and liabilities for cash-settled share-based payment arrangements which are measured using a binomial option pricing model.

The summarised consolidated financial statements are presented in South African rand, which is the Company's functional currency.

The summarised consolidated financial statements and consolidated financial statements have been prepared under the supervision of the chief financial officer, Ms M Kerber, CA(SA).

The directors take full responsibility for the preparation of the consolidated financial statements from which the summarised consolidated financial statements are derived.

The principal accounting policies and methods used by the Group are in accordance with IFRS and are consistent with those of the prior year, except for changes due to the adoption of new or revised IFRSs. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in the notes where necessary and indicated with .

The Group identified Mining, Impala Refining Services and "All other segments" as reportable segments.

Management has defined the operating segments based on the business activities and management structure within the Group. Management considers factors such as the nature of the products and services, as well as the geographical location of operations in their judgement to identify reportable segments.

Capital expenditure comprises additions to property, plant and equipment (note 10).

The measure of profit or loss for reportable segments is profit after tax. The basis of accounting for reportable segments is consistent with the Group's consolidated financial statements.

Sales to the two largest customers amounted to 13% and 12% (2021: 14% and 11%) of total revenue, from Impala and Impala Refining Services.

Capital expenditure will be funded by internally generated funds and from borrowings, where necessary. All right-of-use assets are encumbered by leases and no other fixed assets are pledged as collateral.

Royal Bafokeng Platinum (RBPlat)

On 29 November 2021, following the acquisition by Implats of approximately 24.52% of the total issued ordinary shares in RBPlat, other than treasury shares (RBPlat shares), the Group announced its firm intention to make a general offer to acquire all of the remaining RBPlat shares it did not already hold. During the period between the announcement of the offer and 9 December 2021, the Group acquired a further 10.79% of RBPlat shares. On 9 December 2021, as a result of the acquisition of more than 35% of the voting rights attached to the RBPlat shares in issue, the Group announced that the general offer to acquire the remaining RBPlat shares had become a mandatory offer under section 123 of the Companies Act, 71 of 2008 (Companies Act) with the same consideration as offered under the general offer.

On 17 January 2022, Implats issued a circular to all RBPlat shareholders setting out both the terms and conditions, as well as the conditions precedent, relating to the mandatory offer to acquire all the remaining RBPlat shares. The key condition precedent related to both Implats and RBPlat receiving all the approvals required for the implementation of the offer from the Competition Commission, the Competition Tribunal and/or the Competition Appeal Court (as the case may be) as required under the Competition Act, 1998. The total offer consideration remained the same as the RBPlat shares acquired prior to 31 December 2021, being a cash amount of R90 and 0.30 Implats shares issued for each RBPlat share acquired. The cash consideration of R90 per RBPlat share, may be reduced on a rand-for-rand basis by any dividend declared or distribution made by RBPlat prior to the settlement date. At 24 November 2021, as a reference date, the offer consideration amounted to R150 per RBPlat share, consisting of R90 cash and 0.30 of an Implats share which was valued at R60, at the three-day VWAP of an Implats share as at the close of business on 24 November 2021. The offer opened on 18 January 2022 and the anticipated closing date was 17 June 2022. This mandatory offer is regulated by sections 117(1)(c)(vi) and 123 of the Companies Act and the Takeover Regulations.

On 11 February 2022, RBPlat issued its offeree response circular to the mandatory offer to RBPlat shareholders. The response circular included the opinion of the independent expert appointed by the RBPlat independent board, on whether the terms and conditions of the Implats offer were fair and reasonable to RBPlat shareholders. In the independent expert's opinion, a fair exchange ratio for an RBPlat share, after deduction of the cash amount of R90, lies between 0.22 and 0.34 Implats share for every one RBPlat share, with a midpoint value of 0.28 Implats share. The Implats offer of 0.30 is above the midpoint and close to the top of the independent expert's range of 0.34.

On 29 April 2022, in a joint announcement by RBPlat and Implats, shareholders of both companies were notified that the parties had received confirmation that the Competition Commission made a positive recommendation to the Competition Tribunal to approve the transaction. Due to an application by Northam Platinum Holding Limited to intervene in the Competition Tribunal process, the finalisation of the approval by the Competition Tribunal has been delayed. Consequently, on 27 May 2022, the Group announced the extension of the date for the fulfilment or waiver of the conditions precedent to 8 August 2022. On 15 July 2022, the Group announced the further extension of this date to 26 September 2022.

At 30 June 2022, the Group had acquired in aggregate 109 836 594 RBPlat shares representing approximately 37.83% of the shares in issue for a total consideration that comprised:

• The issue of 32 950 982 Implats shares (note 15) with a fair value of R6 544 million
• Cash consideration, including directly related transaction costs, of R9 939 million.

Subsequent to year-end, the Group had acquired a further 1 612 308 RBPlat shares for a total consideration of R145 million in cash and the issue of 438 692 Implats shares, thus increasing the shareholding in RBPlat to approximately 38.39%.

Implats had initially provided cash confirmation guarantees to the value of R19 650 million, representing the maximum cash consideration payable under the offer, to the Takeover Regulation Panel (TRP) in order to comply with regulations 111(4) and 111(5) of the Takeover Regulations (note 19). The cash confirmations have been issued by JPMorgan Chase Bank NA, Johannesburg Branch, Nedbank Limited and the Standard Bank of South Africa Limited. In early March 2022, these guarantees were reduced to R16 830 million. In early August 2022, the guarantees were further reduced to R16 218 million. These guarantees are expected to remain in place to satisfy the cash consideration payable in terms of the mandatory offer.

The aggregate shareholding acquired in RBPlat of 37.83% has provided Implats with significant influence over RBPlat and therefore, the investment has been equity accounted from 1 December 2021.

12.1 Royal Bafokeng Nation (RBN) prepaid royalty

In March 2007, the Group agreed to pay the RBN all future royalties due to them, thus effectively discharging any further obligation to pay royalties. In turn, the RBN purchased shares through Royal Bafokeng Impala Investment Company and Royal Bafokeng Tholo Investment Holding Company, giving them a 13.2% holding in the Company at the time. The RBN have subsequently sold their shareholding in the Company.

12.2 Deposits on property, plant and equipment

Property, plant and equipment prepayments mainly relate to amounts prepaid on capital equipment at Zimplats for the tailings storage facility, employee housing development, replacement mines, the third concentrator module at Ngezi and the smelter expansion and SO₂ abatement plant projects.

The net realisable value (NRV) adjustment impacted by prevailing metal prices at the reporting date included in inventory comprised Rnil million (2021: R140 million) for refined metal and Rnil million (2021: R428 million) for in-process metal.

Purchased metal consists mainly of Impala Refining Services inventory.

14.1 Deferred tax

The total year-on-year deferred tax movement is mainly attributable to temporary difference movements relating to property, plant and equipment (R837 million), foreign currency translation adjustment on deferred tax (R883 million), offset by undistributed profits (R540 million).

14.2 Current tax

Number of ordinary shares in issue outside the Group

The authorised share capital of the Company consists of 944.01 million (2021: 944.01 million) ordinary no par value shares. The authorised but unissued share capital is 93.79 million (2021: 126.75 million) ordinary no par value shares and remains under the control of the directors.

ZAR convertible bonds

During the prior year, 167 036 of the ZAR-denominated convertible bonds (the convertible bonds) were converted into 35 480 632 ordinary shares. The Group also repurchased 157 905 of the convertible bonds in the prior year through a combination of a tender offer to bondholders (26 146 bonds) and on-market purchases (131 759). The accounting for the total R8.8 billion purchase consideration resulted in a R1.5 billion reduction in the carrying value of the bond liability, a reduction in equity of R7.1 billion and a charge of R0.2 billion to earnings in the prior year. During the current period, the remaining 59 bonds, with a par value of R0.59 million, were converted into 12 678 ordinary shares. The value of this conversion option derivative was R676 million at the time of issue. The bonds carried a coupon of 6.375% per annum and the effective interest rate of the bonds was 12.8%.

Implats has a committed revolving credit facility with various financial institutions consisting of a R6 billion ZAR tranche and a US$125 million US$ tranche. Impala Canada is also a borrower under the US$ tranche.

The committed revolving credit facility of R6 billion bears interest at the three-month Johannesburg Interbank Acceptance Rate plus a margin and utilisation fee of between 210 and 260 basis points, subject to the level of utilisation and the total net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) levels of the Group. The facility has an accordion option to increase the facility by an additional R2 billion. The facility matures on 24 February 2024 with an option to extend for another two years. The facility was undrawn at year-end.

The US dollar tranche of the committed revolving credit facility of US$125 million bears interest at the three-month London Interbank Offered Rate plus a margin and utilisation fee of between 185 and 225 basis points, subject to the level of utilisation and the total net debt to EBITDA levels of the Group. The facility has an accordion option to increase the facility by an additional US$50 million. The facility matures on 24 February 2024 with an option to extend for another two years. The facility was undrawn at year-end.

Contingent liabilities and guarantees

At year-end, the Group had contingent liabilities in respect of matters arising in the ordinary course of business from which it is anticipated that no material liabilities will arise.

The Group has issued guarantees of R69 million (2021: R80 million). Guarantees of R19 607 million (2021: R2 439 million) have been issued by third parties and financial institutions on behalf of the Group consisting mainly of guarantees to the Takeover Regulation Panel (TRP) of R16 830 million (2021: Rnil) for the acquisition of Royal Bafokeng Platinum and the Department of Mineral Resources and Energy (DMRE) for R2 346 million (2021: R2 042 million).

Uncertain tax matters

Implats is subject to income taxes under the various income tax regimes in the countries in which it operates. The Group has filed, and continues to file, all the required income tax returns and to pay the taxes, as reasonably determined, to be due. In some jurisdictions tax authorities are yet to complete all their annual assessments and the income tax assessments, where completed by the tax authorities, remain subject to further examination within prescribed periods. Significant judgement is required in determining the Group's provisions for income taxes due to the complexity of legislation, which is often subject to interpretation. As a result, disputes can arise with the tax authorities over the interpretation or application of certain rules in respect of the Group's tax affairs within the country involved and the outcome of these claims and disputes cannot be predicted with certainty. On tax matters which are particularly complex or require judgement in applying, management has obtained and will continue to obtain, independent legal and/or tax practitioner opinions which inform and support the tax positions adopted.

Implats' companies are involved in tax queries, litigation and disputes with various tax authorities in the normal course of business. A detailed review is performed regularly on each matter and a provision is recognised, where appropriate. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially reported, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

Regardless of whether potential economic outflows of matters have been assessed as probable or possible, individually significant matters are included below.

South Africa

At 30 June 2022, the Group has an unresolved historical tax matter relating to deductions at its South African operations. The South African Revenue Service had issued an additional assessment relating to this matter which the Group had objected to. The Group has a tax practitioner and legal counsel opinion to support its objection. Should the Group be successful in its objection, it could result in a tax credit of up to R647 million (including interest).

Zimbabwe

Foreign currency taxes

Zimplats has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due. The fiscal legislation in Zimbabwe is volatile, highly complex and subject to interpretation. From time to time, Zimplats is subject to a review of its historic income tax returns and in connection with such reviews, disputes can arise with the Zimbabwe Revenue Authority (ZIMRA) over the interpretation and/or application of certain legislation.

Significant judgement is required in determining the provision for income taxes due to the complexity and differences of interpretation of fiscal legislation, and application which may require determination through the courts. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.

Zimplats recognises liabilities for anticipated tax audit issues and uncertain tax positions based on estimates of whether additional taxes will be due. The assessment is based on objective, unbiased interpretation of the fiscal legislation, informed by specialist independent tax and legal advice. Where ZIMRA as the tax authority makes an assessment that differs from that determined and initially recorded by the Company, such difference in computation will impact the income tax expenses and liabilities in the period in which such determination is made.

The matter of the currency in which income taxes and royalties should be paid was settled amicably during the year ended 30 June 2021.

Irrespective of whether potential economic outflows of matters have been assessed as probable or possible, individually significant matters are included below to the extent that disclosure does not prejudice the Company.

Matters before the courts

Zimplats filed legal proceedings in the Special Court for Income Tax Appeals and the Supreme Court of Zimbabwe in relation to various historical income tax matters and these cases are pending in the courts. Zimplats has on a without prejudice basis settled the disputed liabilities involved in these cases and therefore no further liabilities will arise in respect of these disputed tax matters.

There is no contractual relationship governing the Group's transactions with Mimosa. These are conducted through an intermediary. For accounting purposes, and to demonstrate the economic substance of the transactions, they are disclosed as related-party transactions, as though the Group had transacted directly with Mimosa.

Fixed and variable key management compensation was R412 million (2021: R406 million).

Background and basis of preparation

The impact of Covid-19 and geopolitical factors are deemed to be priced into the inputs, which for the Group, mostly relates to securities price risk and commodity price risk used in the level 1 and 2 fair valuation techniques as determined by the market. The level 3 valuation techniques were adjusted by amending the cash flows associated with the discounted cash flow valuations to factor in the impacts of the pandemic where applicable. The outcome of these considerations and the resulting adjustments are reflected in the respective carrying amounts of the financial assets and financial liabilities measured at fair value.

The following table summarises the Group's classification of financial instruments:

Fair value hierarchy

The table below represents significant financial instruments measured at fair value at the reporting date. The calculation of fair value requires various inputs into the valuation methodologies used. The source of the inputs used affects the reliability and accuracy of the valuations. Significant inputs have been classified into hierarchical levels in line with IFRS 13 valuations.

• Level 1 – Quoted prices in active markets for identical assets or liabilities
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability (directly or indirectly)
• Level 3 – Inputs for the asset or liability that are unobservable.

There were no transfers between fair value hierarchy levels in the current year.

The carrying amount of financial assets and liabilities which are not carried at fair value is a reasonable approximation of their fair value.

Reconciliation of level 3 fair value measurements

Cash and cash equivalent exposure by country and currency

Fair value hedge accounting

The Group has a hedging strategy and accounting policy to manage the fair value risk (commodity price and foreign currency exchange risk) to which purchased metal (note 13), the hedged item, is exposed. The financial instrument used to hedge this risk is trade payables related to metal purchases, included in trade payables, measured at fair value through profit or loss. The fair value movements on this financial liability have been designated to hedge the price and foreign currency exchange risk on purchased metal inventory.

To the extent that the hedging relationship is effective, that is, to the extent that an economic relationship exists between the hedged item and hedging instrument, the fair value gains and losses on both the hedged item and hedging instrument are offset against each other. Where the hedge is ineffective the gains and losses on trade payables and purchased metal inventory are recognised in profit or loss in other income and other expenses respectively.

The effects of the fair value hedge are as follows:

Due to the high correlation between the fair value movements in trade payables and inventory, there has been no hedge ineffectiveness, nor identified sources thereof, in the hedging relationship during the current period.

Dividends

The board declared a final cash dividend on 1 September 2022 in respect of the financial year ended 30 June 2022. In terms of the approved dividend policy, a minimum dividend of 30% of free cash flow pre-growth capital should be declared. The board has discretion to vary this percentage depending on the current and forecast financial performance, as well as market and other factors, including sufficiently capitalising the business to allow the Group to take advantage of future value-accretive growth opportunities.

The dividend of 1 050 cents per ordinary share or R8 889 million in aggregate (excluding treasury shares) is to be paid out of retained earnings, but not recognised as a liability at year-end. The dividend will have no tax consequence for the Group, but will be subject to 20% withholding tax for shareholders who are not exempt from or do not qualify for a reduced rate of withholding tax.

The dividend is payable on Monday, 26 September 2022 to shareholders recorded in the register at the close of business, 23 September 2022.

Other events occurring after the reporting period

The directors are not aware of any other subsequent events which materially impact the annual financial statements, aside from developments in the Group's acquisition of the equity interest in Royal Bafokeng Platinum that occurred after 30 June 2022, as disclosed in note 11.