Impala Platinum Holdings Limited (Implats, the Company or the Group) is a leading producer of platinum group metals (PGMs). Implats is structured around seven mining operations and Impala Refining Services (IRS), a 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 29 August 2024 by the board of directors.

The summarised consolidated financial statements have been derived from the audited consolidated financial statements which have been published on the Company's website (www.implats.co.za). The summarised consolidated financial statements for the year ended 30 June 2024 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 in the Independent 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 2024 have been prepared in accordance with the Listings Requirements of the JSE Limited, the framework concepts and the measurement and recognition requirements of IFRS Accounting Standards as issued by the International Accounting Standards Board, 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 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 2024, which were prepared in accordance with IFRS Accounting Standards, and the commentary included in the results.

The summarised consolidated financial statements were 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.

Sustainability and climate change-related disclosures

Implats adheres to existing legislation and financial reporting frameworks. The Group additionally notes the current developments in corporate sustainability reporting, particularly in relation to their financial impacts. Implats supports the work of the IFRS International Sustainability Standards Board (ISSB) toward achieving this goal through its published sustainability disclosure standards, whose impact on the Group is currently being evaluated.

Climate change and other sustainability-related matters have been considered to the extent that these have materially impacted the carrying amounts of assets and liabilities, cash flows or the related estimates and judgements contained in the consolidated financial statements and have been disclosed in the relevant notes. Other climate and sustainability-related disclosures are available in the accompanying management commentary in the front pages of the summarised consolidated annual results.

The principal accounting policies and methods used by the Group are in accordance with IFRS Accounting Standards and are consistent with those of the prior year, except for changes due to the adoption of new or revised IFRS Accounting Standards. 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 EJ.

The Group identified Mining, Impala Refining Services (IRS) 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.

Revenue flows

The Group's segments generate revenues from their respective geographical locations in which they operate. The 'All other segments' includes the Group's equity-accounted entities, Mimosa and Two Rivers.

Prior to 30 May 2023, Impala Bafokeng (previously known as RBPlat) was included in 'All other segments', as it was an equity-accounted associate of the Group. On 30 May 2023, Implats obtained control of Impala Bafokeng, and it then formed part of the Mining segment:

• Impala mines and refines its own metal inventories and sells externally to third parties. Sales are disaggregated geographically in the revenue note (note 6)
• Impala Canada and Impala Bafokeng sell their mined PGM concentrate to one customer each in North America and South Africa, respectively
• IRS, a division of Impala, is dedicated to the refining of metal concentrate/matte purchases built up by Implats. Situated in Springs, some 35km east of Johannesburg in South Africa, IRS provides smelting and refining services through offtake agreements with Group companies (except Impala, Impala Canada and Impala Bafokeng) and third parties
• The Marula and Zimplats mining segment revenues are therefore made intra-group to IRS, which ultimately sells the refined metal externally to the third parties disaggregated geographically as indicated in note 6.

Sales to the two largest customers were 11% and 8% (2023: 12% and 10%) of total revenue, from Impala and IRS.

Capital expenditure comprises additions to property, plant and equipment (note 11).

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

Impairment – Impala Rustenburg mining operation

In the current year, Impala performed a recoverability assessment of its Impala Rustenburg mining operation due to a lower PGM price profile, as well as changes to the mine life. The assessment concluded in the impairment of R10 626 million to property, plant and equipment and an offsetting impact on deferred tax of R2 869 million that resulted in a post-tax loss of R7 757 million. The recoverable amount of the Impala Rustenburg mining cash-generating unit (CGU) of R21 026 million was determined on the basis of its fair value less costs of disposal. The recoverable amount is based on future discounted cash flows (value in use of the CGU), including an in situ 4E ounce value for mineral resources outside the approved mine plan. This is a level 3 valuation in terms of the fair value hierarchy (note 25).

Impairment – Canada

Impala Canada performed a recoverability assessment of its Lac des Iles mine due to decreased consensus pricing and changes to the mine life and mineral reserves estimates. The assessment concluded in the impairment of R1 632 million (C$120 million) (2023: R10 872 million (C$771 million)) to property, plant and equipment and an offsetting impact on deferred tax of Rnil (C$nil) (2023: R3 058 million (C$217 million)) that resulted in a post-tax loss of R1 632 million (C$120 million) (2023: R7 814 million (C$554 million)). The recoverable amount of the CGU of Rnil (C$nil) (2023: R2 334 million (C$164 million)) was determined on the basis of its fair value less costs of disposal.

The key financial assumptions for the CGU used in the recoverable amount calculations were:

• An overall long-term real palladium price per ounce of US$970 (2023: US$1 350)
• A long-term post-tax real discount rate range of 10% to 11% (2023: 11% to 12%)
• If the long-term metal prices were to increase by 5%, the recoverable amount would increase by approximately R468.3 million (C$35.2 million) (2023: R1 120 million (C$78.7 million)). Conversely, a decrease of 5% would negatively affect the recoverable amount by approximately Rnil (C$nil) (2023: R1 241 million (C$87.2 million))
• If the real discount rate were to increase or decrease by 50 basis points, there would be no impact on the recoverable amount (2023: the recoverable amount would decrease or increase by approximately R28 million (C$2 million)).

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

The goodwill of R14 114 million associated with RBPlat arose on the business combination at acquisition date on 30 May 2023 and was impaired by R4 244 million to its recoverable amount of R9 870 million in the prior year. The carrying amount of R9 870 million was allocated to the relevant cash-generating units (CGUs), with R6 347 million allocated to the Impala Rustenburg mining CGU, R3 333 million to the Impala Refining Services (IRS) CGU and R190 million (post-impairment) to the Impala Bafokeng CGU, respectively.

During the current year, goodwill allocated to the Impala Rustenburg mining CGU of R6 347 million was impaired in full as part of the impairment of the Impala Rustenburg mining operation. Refer to note 11.

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 has subsequently sold their shareholding in the Company. At year-end, the carrying amount of the prepaid royalty (R3 247 million) was impaired in full as part of the impairment of the Impala Rustenburg mining operation.

2. Deposits on property, plant and equipment

   Property, plant and equipment prepayments mainly relates to amounts prepaid on capital equipment at Zimplats for the smelter expansion and SO₂ abatement plant projects, replacement mines, duty and value added tax on capital equipment, power supply, tailings dam extension implementation and base metal refinery.

3. Business-related prepaid expenditure

   The business-related prepaid expenditure mainly relate to amounts prepaid on operating activities at Zimplats for power supply, import duty as well as other consumables.

4. Employee housing benefit

   The current year movement in the employee housing benefit comprised an increase of R22 million (2023: R1 million) for additional houses sold to employees, an amortisation charge of R22 million (2023: R2 million), and reversals of R39 million (2023: R2 million) as a result of agreements being terminated.

The net realisable value (NRV) adjustment included in the inventory value is impacted by the prevailing metal prices at the reporting date. The current year adjustment of R361 million (2023: R2 879 million) comprised R65 million (2023: R923 million) for refined metal and R296 million (2023: R1 956 million) for in-process metal.

Purchased metal consists mainly of Impala Refining Services inventory.

The total year-on-year deferred tax movement is mainly attributable to temporary difference movements relating to property, plant and equipment (R1 639 million), prepaid royalty (R856 million), assessed losses (R1 068 million) and withholding taxes on undistributed profits.

Number of ordinary shares in issue outside the Group

The authorised share capital of the Company consists of 1 044.01 million (2023: 944.01 million) ordinary no par value shares. The additional 100 million ordinary no par value shares were approved by shareholders at the previous annual general meeting. The authorised but unissued share capital is 139.64 million (2023: 77.61 million) ordinary no par value shares and remains under the control of the directors.

Broad-based black economic empowerment (B-BBEE)

During the current year, Implats concluded a broad-based black economic empowerment (B-BBEE) transaction which resulted in an aggregate 13% B-BBEE ownership at Impala Platinum Limited (Impala), which owns Impala Rustenburg and Impala Refineries assets, and Impala Bafokeng, through its wholly owned subsidiary, Impala Bafokeng Resources Proprietary Limited (IBR). The B-BBEE equity ownership at Impala and IBR is held through the use of an employee share ownership trust (ESOT) and a community share ownership trust (CSOT), each holding 4%, as well as a strategic empowerment consortium, the Siyanda-led Bokamoso Consortium, holding another 5%. The purchase consideration due by the Impala CSOT and the IBR ESOT and CSOT was funded by interest-free vendor loans from Impala and IBR which will be repaid by 35% of future dividends receivable. The purchase consideration due by the Bokamoso Consortium was funded by way of a R100 million equity injection and vendor funding by Impala and IBR of the remaining amount at market-related coupon rates. The vendor funding will be repaid by 70% of future dividends. The transaction resulted in an IFRS 2 charge of R1 932 million. This charge represents the difference between the fair values of the interests in Impala and IBR and the fair values of the consideration received from the B-BBEE shareholders. The non-controlling interest resulting from the B-BBEE transaction will only be recognised once the loans are repaid.

The key financial assumptions for the IFRS 2 charge on the B-BBEE transaction calculation were:

• An overall long-term real basket price per 6E ounce of R27 470
• A long-term real post-tax discount rate of 12% and a long-term real pre-tax discount rate of 16%
• An estimated dividend yield range of 4% to 13% for Impala over the next 11 years and 1.5% to 8% for IBR over the next 25 years
• An estimated historical equity volatility of 50.2%
• A minority discount of between 12% to 20%
• If the dividend yield was to increase by 5%, the IFRS 2 charge would increase by approximately R110 million. Conversely, a decrease by 5% would result in the IFRS 2 charge decreasing by approximately R300 million
• If the historical equity volatility was to increase by 5%, the IFRS 2 charge would increase by approximately R80 million. Conversely, a decrease by 5% would result in the IFRS 2 charge decreasing by approximately R77 million.

Bank borrowings

Implats entered into a revolving borrowing base facility of R1 092 million (US$60 million) with Standard Bank of South Africa Limited in the current year. The facility bears interest at the Secured Overnight Financing Rate plus 285 basis points per annum which is paid quarterly, with a tenor of 12 months. The facility was fully drawn at the end of the year.

Implats has a committed revolving credit facility with various financial institutions consisting of a R6.5 billion South African rand tranche (2023: R6.5 billion) and a US$93.8 million US dollar tranche (2023: US$93.8 million). Impala Canada is also a borrower under the US dollar tranche.

The committed revolving credit facility of R6.5 billion (2023: R6.5 billion) bears interest at the three-month Johannesburg Interbank Acceptance Rate (JIBAR) 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 R2.2 billion (2023: R2.2 billion). In the current year, the facility was extended for another year and will mature on 24 February 2026. The facility was undrawn at year-end.

Subsequent to year-end, the committed revolving credit facility was amended and restated to add Impala Bafokeng Resources as an additional guarantor to the facilities agreement and the accordion option was increased from R2.2 billion to R4.2 billion.

The US dollar tranche of the committed revolving credit facility of US$93.8 million (2023: US$93.8 million) bears interest at the three-month Secured Overnight Financing Rate plus a credit adjustment spread, margin and a utilisation fee of between 211 and 251 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$37.5 million (June 2023: US$37.5 million). During the current year, the facility was extended for another year and will mature on 24 February 2026, with no further option to extend. The facility was undrawn at year-end.

The R3 billion Impala Bafokeng credit facilities comprise a revolving credit facility of R2 billion (2023: R2 billion) which bears interest at JIBAR plus 250 basis points, as well as a general banking facility of R1 billion (2023: R1 billion) which bears interest at the prime rate less 140 basis points. Impala Bafokeng provided a cession and pledge of its shares in and claims against Impala Bafokeng Resources (IBR) as security under a subordination agreement of its claims against IBR in favour of the banks. IBR also provided a cession in which it cedes and pledges its rights, title and interest in respect of, or connected with the IBR operations. The revolving credit facility had an accordion option to increase the facility by an additional R1 billion (2023: R1 billion). The revolving credit facility was undrawn at year-end and Rnil (2023: R123.6 million) of the general banking facility was utilised for guarantees as at year-end.

Subsequent to year-end the revolving credit facility, the general banking facility and the associated security were cancelled.

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 R41 million (2023: R57 million) in respect of liabilities held by companies in the Group. Guarantees of R4 018 million (2023: R15 291 million) have been issued by third parties and financial institutions on behalf of the Group consisting mainly of guarantees to the Department of Mineral Resources for R3 487 million (2023: R3 254 million). The guarantees to the Takeover Regulation Panel (TRP) required in terms of the mandatory offer for RBPlat were cancelled following the closure of the mandatory offer on 21 July 2023 (2023: R11 417 million).

Uncertain income 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 legislation 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 2024, the Group has an unresolved historical tax matter relating to deductions at its South African operations. The South African Revenue Service (SARS) had issued an additional assessment relating to this matter which the Group had lodged an appeal to the Tax Court. The Tax Court found in favour of SARS. Management is in the process of lodging an appeal to the High Court to settle this matter. Should the Group be successful in its appeal, it could result in a tax credit of up to R718 million (2023: R673 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.

Irrespective of whether potential economic outflows of matters have been assessed as probable or possible, individually significant matters are included as follows 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. Subsequent to year-end, the Supreme Court of Zimbabwe ruled in favour of ZIMRA in respect of one of the tax matters. The ruling did not have any financial impact as Zimplats has on a without prejudice basis, settled the disputed liabilities involved in these cases.

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 R257 million (2023: R258 million).

Background and basis of preparation

The impact of external factors such as climate change, geopolitical tensions and other global and domestic economic factors are deemed to be priced into the valuation of financial instruments, 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 (DCF) valuations to factor in impacts of the various micro and macro-economic factors 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 the 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.

No hedge accounting has been applied in respect of these derivative financial instruments.

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

Collateral – Triple Flag

Impala Bafokeng issued a guarantee in favour of Triple Flag, guaranteeing the due payment and performance of all present and future obligations under the stream. Under the guarantee, Triple Flag will have recourse only to Impala Bafokeng shares in Impala Bafokeng Resources. In addition, Impala Bafokeng also granted a second lien security, over all its property, assets and undertakings which have been provided as security in favour of senior lenders.

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 19), 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 were 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:

¹ Relates to metal purchases that were still in the refining process at year-end.

Due to the significant decrease in the metal prices in the prior year in relation to the fair value movements in trade payables and inventory, there was hedge ineffectiveness identified in the hedging relationship at 30 June 2023. A R138 million fair value loss was recognised in other expenses (notes 10 and 16) in the prior year.

The 'Acquisition of Royal Bafokeng Platinum from non-controlling interests' of R275 million was incorrectly presented as a cash outflow from investing activities and has now been reclassified to a cash outflow from financing activities. The previous presentation was restated as follows:

Dividends

The Company has a dividend policy which is aligned with the Company's capital allocation framework which prioritises the Company's commitment to providing sustainable and attractive returns to shareholders while retaining a strong and flexible balance sheet and sufficiently capitalising the business to allow the Group to take advantage of future value-accretive growth opportunities. The dividend policy recommends a minimum payout of 30% of free cash flow, pre-growth capital for the period. However, at the time of the dividend declaration, the board will consider market conditions, the balance sheet position and the Company's forecast funding requirements and exercise its discretion in determining the final quantum of the dividend. This allows the board to adjust the minimum threshold through the cycle depending on the capital allocation priorities and enable the board to pay out much higher ratios at the top of the PGM cycle.

The persistence of weak PGM pricing and significant capital cash outflows resulted in a free cash outflow of R4.0 billion. After adding back growth capital of R4.1 billion and other non-discretionary outflows of R0.6 billion, an adjusted free cash outflow for the financial year of R0.5 billion was recorded. In line with the approved dividend policy, and after consideration of market conditions and capital requirements, no final dividend for the year-end 30 June 2024 was declared.

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 amendments to the credit facilities as disclosed in note 20.