Integrated Annual Report 2020
DISCOVER DEVELOP DELIVER DIVERSIFY
INTEGRATED
CO-PRODUCER
OF PGMs AND
CHROME
CONCENTRATES
Enriching lives
through innovating
the resources
company of the
future
Tharisa is an integrated
resource group engaged in
exploration, mining,
processing and the
beneficiation, marketing,
sales and logistics of platinum
group metals (PGMs) and
chrome concentrates.
www.tharisa.com
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CONTENTS
OVERVIEW
Group profile
Investment case
Group strategy
Competitive strengths
ESG highlights
Scope and boundary
The vital numbers
Financial and non-financial highlights
Group structure and overview
Group history
6 Pillars driving growth
STRATEGIC REVIEW
Chairman’s review
How Tharisa creates value
Chief executive officer’s review
Chief finance officer’s review
Market review
Principal business risks
OPERATIONAL REVIEW
SUSTAINABILITY
Safety and health
Environment
Human resources
Human resources development
MINERAL RESOURCE AND
MINERAL RESERVE STATEMENT
GOVERNANCE
Board of directors
Corporate governance
King IV™* application
Remuneration report
Directors’ report
Report of the Audit Committee
IFC – 14
IFC
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15 – 31
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38 – 49
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50 – 55
56 – 93
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FINANCIAL REVIEW
Condensed consolidated financial
statements
Notes to the annual financial
statements
SHAREHOLDER INFORMATION
Investor relations report
Notice of virtual annual general
meeting
Form of proxy
Summary of the principal terms of the
Tharisa PLC long-term incentive plan
2021
Glossary
Stakeholder engagement
Corporate information
94 – 135
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136 – IBC
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159
IBC
* Copyright and trademarks are owned by the Institute
of Directors in South Africa NPC and all of its rights
are reserved.
GROUP PROFILE
Tharisa is an integrated resource group engaged in exploration, mining, processing, and
the beneficiation, marketing, sales and logistics of platinum group metals (PGMs) and
chrome concentrates. The Group has set a near-term production target of 200 koz of
PGMs and 2.0 Mt of chrome concentrates.
Purpose statement
Enriching lives through innovating the resources company of the future.
Strategic initiatives
Leading natural resources group
Innovation
Globally significant, diversified
low-cost operations
Innovative research and development
feeding organic growth and adding
value to our resources
Optimisation initiatives
Marketing, sales and logistics
Maximise value extraction through
process engineering
Expansion into multi-commodities,
building geographic diversity
Capital discipline
Disciplined capital distribution with a
dividend policy of distributing at least
15% of net profit after tax (NPAT) and
capital allocation to low-risk projects,
making us an investment of choice
Values
(cid:3)(cid:79) The safety and health of our people is a core value.
(cid:3)(cid:79) We take responsibility for the effect that our operations may have on the environment.
(cid:3)(cid:79) We are taking steps to reduce our carbon footprint in line with the principles of the 2015 Paris Agreement.
(cid:3)(cid:79) We are committed to the upliftment of our local communities.
(cid:3)(cid:79) We conduct ourselves with integrity and honesty.
(cid:3)(cid:79) We strive to achieve superior returns for our shareholders.
(cid:3)(cid:79) We originate new opportunities and will continue to challenge convention through innovation.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
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Discover
• Large-scale resource mining five MG Chromitite Layers
• Long-life, low-cost co-producer of PGMs and chrome
concentrates
• Highly prospective exploration project in Zimbabwe
• Complementary opportunities
Develop
• Sustainable polymetallic business
model that maximises the value of
the commodities we produce
• Innovative approach to viable
mineral extraction and beneficiation
• Independent processing plants
providing operational flexibility at
the Tharisa Mine
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Deliver
• Safe production, strive for
zero harm
• Maximise value of the
commodities we produce
• Disciplined capital allocation
= growth + dividends
• Cash generative through
commodity cycles
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Diversify
• Into a multi-asset, multi-commodity,
multi-jurisdictional business
• Using technology as our catalyst
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
INVESTMENT CASE
Positioned for value creation
The Tharisa Mine produced 142.1 koz of PGMs and 1.34 Mt of chrome concentrates in
FY2020 and has provided FY2021 production guidance of between 155 koz and 165 koz
of PGMs (on a 5PGE + Au basis) and 1.45 Mt to 1.55 Mt of chrome concentrates.
COVID-19 remains a risk to the Group and our forecasts and guidance are premised on
the current level of economic activity being permitted by various governments.
The Group has set a near-term production target of 200 koz of PGMs and 2.0 Mt of
chrome concentrates.
(cid:3)(cid:79) Achieved the safety milestone of five years fatality free
(cid:3)(cid:79) The only JSE- and LSE-listed co-producer of PGM and
chrome concentrates
(cid:3)(cid:79) Successfully navigating the COVID-19 pandemic and
ensuring the sustainable direct employment of over 1 700
people
(cid:3)(cid:79) Sixth largest listed South African PGM producer
(cid:3)(cid:79) South Africa’s fourth largest chrome producer and the
largest producer from a single resource
(cid:3)(cid:79) One of the world’s largest producers of specialty grade
chrome concentrates
MARKETING AND SALES
The majority of PGM concentrate is sold
to Impala Platinum under an offtake
agreement and to Sibanye-Stillwater.
EXTRACTION AND BENEFICIATION
The Group’s key differentiator is its
large-scale and open pit resource that
allows for the extraction of five
MG Chromitite Layers using mechanised
mining. The Tharisa Mine, located in the
South African Bushveld Complex, the
world’s largest PGM deposit, also taps
into one of the world’s largest single
chrome resources of 859.5 Mt.
The Tharisa Mine has a 14-year open pit
life of mine (LOM) and the ability to
extend operations underground by at
least 40 years. The open pit is planned
with a strike length of 5 km and a high
wall height of approximately 200 m.
The mechanised nature of the open pit
operation has ensured that the operations
remain within the lowest cost quartile of
PGM and chrome producers.
The Group has a marketing platform for
the sale of its metallurgical chrome
concentrate to end-users, stainless steel
producers and global commodity traders.
Tharisa Minerals has two independent
processing plants with a combined
4.8 Mtpa nameplate capacity. The
integrated process involves primary
extraction of chrome followed by PGM
flotation, then secondary chrome
extraction from the tailings. The two
plants offer operational flexibility,
allowing one plant or a portion thereof to
be shut down without impacting the
entire operation.
Metallurgical chrome concentrate is
mainly shipped to China and Indonesia,
where it is utilised primarily by the
stainless steel industry.
Specialty chrome concentrates, which
include chemical and foundry grades, are
sold into global diversified markets.
Production of specialty grade chrome
concentrates made up 23.9% of the
year’s total own chrome production.
GROUP STRATEGY
THARISA PLC INTEGRATED ANNUAL REPORT 2020
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Tharisa’s core strategy is to generate value
by becoming a globally significant low-cost
producer of strategic commodities that are
required to deliver a sustainable future.
We help to meet global demand for our
products using an integrated model for mining,
processing, marketing, sales and logistics
operations, which we believe adds maximum
value to the commodities we mine.
The Group’s expansion strategy focuses on
diversified growth through value-accretive
acquisitions and development of large-scale,
low-cost projects that are in, or close to,
production.
Our philosophy is to enrich lives responsibly,
moving beyond causing zero harm to active
healing.
Discover
Tharisa seeks to grow and expand its business by investing in
operations or projects that have the potential to add
significant value. The Group proactively seeks out investment
or acquisition opportunities in strategic commodities,
especially those required for the achievement of net-zero
carbon emissions, and in countries offering geographic
diversity.
The Group gives preference to opportunities to develop
large-scale and low-cost projects that are either producing or
at an advanced stage of evaluation. The Board, when making
investment decisions, factors in climate risk as well as the
opportunities that arise from the decarbonisation of energy,
to ensure that the Group’s business model is sustainable. All
opportunities must meet Tharisa’s stringent investment
criteria, which include generating a minimum return on
investment of 25%.
In FY2018, the Group
diversified
geographically by
making low-risk entry
options into Karo
Holdings, a highly
prospective PGM
opportunity on the
mineral-rich Great
Dyke in Zimbabwe.
Develop
The Group has demonstrated that it has the skills to develop a mine
from exploration through to steady state operations. Its phased
approach to development has derisked current operations, allowing
it to look for additional low-cost, large-scale operations. This
innovative approach has delivered continuous improvement through
increased volumes and metal recoveries at its operations. The Group
is examining initiatives to minimise its carbon footprint in order to
support the Paris Climate Agreement.
All of this is aligned with the Group’s innovative thinking
philosophy and agility, making use of technology as our
enabler and as our differentiator.
Deliver
Tharisa continues to explore ways to expand its marketing and sales
capabilities to enable the Group to capture additional margin by
leveraging its existing capability, experience and relationships through
third-party sales and logistics. Tharisa is able to compete effectively
with other commodity traders as a result of its tailored and high-quality
service offering, market knowledge and strong customer relationships.
.
Diversify
Tharisa’s strategy is to add development projects to the portfolio that
will ensure diversification while maintaining the discipline of being a
mechanised, low-cost miner and beneficiator of metals. In FY2018, the
Group took its first step towards diversifying geographically into
neighbouring Zimbabwe. Karo Holdings is a highly prospective PGM
opportunity on the mineral-rich Great Dyke in Zimbabwe. This
diversification builds on Tharisa’s existing business model with a
view to applying our proprietary technology.
.
TOTAL PROPOSED DIVIDEND
FOR THE YEAR
US 3.5
CENTS PER SHARE
+366.7%
Discipline
With management of costs and improved efficiencies, Tharisa continues to be positioned in
the lowest cost quartile for both PGMs and chrome concentrates.
The Group subscribes to a capital allocation framework where potential projects are
assessed against stringent investment criteria. The basis for the framework is investment in
low-risk entry points and the staged capital investment and development of new projects.
Tharisa is operationally cash flow positive, which has allowed it to maintain its returns to
shareholders. The Company has a dividend policy of distributing a minimum of 15% of
consolidated net profit after tax. It did not declare an interim dividend during the peak of
the COVID-19 pandemic in South Africa, focusing on cash discipline, while the
Company has proposed a total dividend of US 3.5 cents per share for FY2020.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
COMPETITIVE STRENGTHS
Shallow and large-scale
PGM and chrome
resource - one of the
world’s largest chrome
resources from a single
pit - enabling Tharisa to
be a large-scale producer
for several decades
Mining of five MG
Chromitite Layers
allowing for the
co-production of PGMs
and chrome concentrates
Extensive research
and development
programmes developing
new technologies and
beneficiation capabilities
Independent
processing plants
providing operational
flexibility
Direct relationships
with South African and
international customers
Capacity to produce metallurgical and specialty grade
concentrates for differentiated markets
Exploring large-scale Karo
Platinum resource
Salene Chrome offers
option to rapid path to
production
Positioned in the lowest
cost quartile of the PGM
and chrome concentrate
cost curves, underpinned by
low-risk mining and
beneficiation processes
Profitable through the
commodity cycles
Mechanised operations
and skilled labour force
Integrated marketing, sales
and logistics platforms
Leverage existing
platforms with third-
party operations and
trading
Pioneering innovative
and unique approach to
viable mineral extraction
and beneficiation
Replication of phased
development in exploration
projects
Capital discipline with a
dividend policy of
distributing at least 15%
of NPAT
Derisked – Major capex
complete
Optimisation –
Extensive industry and
management experience
with a successful track
record of identifying,
developing and operating
open pit and underground
mining and processing
operations
ESG HIGHLIGHTS
THARISA PLC INTEGRATED ANNUAL REPORT 2020
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LETTER FROM THE CHAIRMAN OF THE SHE COMMITTEE AND LEAD INDEPENDENT NON-EXECUTIVE DIRECTOR, DAVID SALTER
I may be justified in describing 2020 clichédly as a watershed year but in no way was I prepared to deal with the circumstances that have
enveloped our Company for the past year, with no end in sight. But it is also a great pleasure to write this synopsis of our ESG and SHE
achievements as I cannot describe in enough words how proud, I, as the Chairman of the SHE Committee, and my fellow directors are of the
results Tharisa has delivered in these times. Our commitment to ever increasing our focus on safety, the development of our people and instilling
pride in every single employee and ensuring they are #proudlytharisa was evident in the manner in which we all analysed, planned, tackled and
thus far, have beaten the odds of the pandemic.
Safety is a core value and we base all our decisions on this. Tharisa has celebrated five fatality-free years and a number of other significant
milestones, including four million fatality-free shifts, that are outlined in this report. Our operations are modern, open pit and mechanised. By
design they are as safe as possible but we are not complacent. In this regard it was pleasing to see that our in-house audit against the principles
of the Global Industry Standard on Tailings Management showed compliance.
We were ultra-cautious in our return to work policy when we got the green light from government to return to production, albeit at reduced
levels in early April, following the lockdown in South Africa on 27 March 2020. This return meant operating on a completely new shift system to
minimise the number of people on site and the crowds at shift change. Our people took these changes in their stride as did those who were able
to work from home connected on our secure networks.
We prepared well, put in place all safety measures and communicated to and with our employees. To date, we have conducted over 10 000
rigorous screenings, conducted over 170 COVID-19 tests, and are fortunate that we have had only 56 positive cases, yet we are saddened by the
loss of one of our colleagues. The reality of COVID-19 is evident in his passing, yet we have also bravely shown that we are able to overcome this
global pandemic if we work collectively, whilst at the same time maintaining our important work on HIV/AIDS and TB in the workplace.
The commitment and drive shown by management to establish, equip and staff a 125-bed quarantine facility, a 24/7 COVID-19 and Occupational
Health Clinic, and a 24/7 COVID-19 Command Centre is simply magnificent.
Our renewed focus is now on ensuring we remain a safe mine as we turn our energy to expanding our operations and developing our new
projects. At the same time, we are all too aware of the environmental impact we, as an extractive industry, have, both on our immediate vicinity
and as far away as our customers.
Our journey towards a more sustainable future begins with our social licence to operate and Tharisa has demonstrated its commitment to its
stakeholders and I believe has demonstrated that it truly has this licence. Our initiatives on people development reach beyond the mine gate and
we are proud of having facilitated adult basic education for over 275 people over the last two years. We have had over 58 engineering
learnerships and over 40 interns and graduates at Tharisa. We have supported the immediate community through the provision of basic services
and are proud of our ability to recruit locally with over 700 members of our workforce being from our community. The more vulnerable members
of the community received food parcels during the most severe phase of the pandemic and blankets and clothing were distributed during a
particularly cold spell. Sanitisers, face masks, thermometers and educational
posters and information packs were supplied to three local schools and social
distancing barriers and handrails were installed. The recent community sports day
showed that our community is as vibrant as ever despite these trying times.
The past year has also been one when sharp focus has turned to making concrete
steps towards mitigation of climate change. Our attention is firmly on this and our
next focus will be on the active role we can play in reducing our carbon footprint.
Together with our major suppliers, we have initiated programmes to reduce
greenhouse gas emissions from our large vehicle fleet. We are also assessing
renewable energy opportunities in power generation at our operations.
Furthermore, we are directing our research and development budget towards the
decarbonisation of energy and the place our produced commodities have in
delivering this in line with the 2015 Paris Agreement goals.
Alongside this, our programmes to reduce our water and energy consumption
continue.
I would like to thank all our stakeholders for their commitment to making Tharisa
the resource company that we can all be proud of and wish them a safe journey
into 2021 with us.
David Salter
Highlights
(cid:3)(cid:79) Total Tharisa operations achieved five years and four million shifts fatality free
(cid:3)(cid:79) Demonstrated our commitment to the Minerals Council’s Khumbul’ekaya
“remember home” safety initiative, which aims to ensure that the mining
industry becomes fatality free
(cid:3)(cid:79) Establishment of a COVID-19 Command Centre and appointment of a
COVID-19 Officer while building an Occupational Health Centre and
quarantine facilities.
(cid:3)(cid:79) Provided food parcels to over 3 000 families at the height of the infection
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
SCOPE AND BOUNDARY
Tharisa is pleased to present this, its seventh Integrated Annual Report since listing on
the JSE, and the fifth since the standard listing of its depositary interests on the LSE.
This Integrated Annual Report presents the Group’s operations in Cyprus and South
Africa, its exploration activities in Zimbabwe, as well as its governance, strategy, risks,
opportunities, and prospects. The report covers the financial year from 1 October 2019
to 30 September 2020.
APPROACH
The approach in this Integrated Annual
Report is to inform investors and
stakeholders of the fundamentals of
Tharisa’s operating context and business
model, risks, and strategic approach to
value creation to enable them to make a
more informed assessment of Tharisa, its
prospects and the sustainable value it
creates. The Integrated Annual Report
presents a concise view of the Company,
its progress and strategy, with readers
directed to relevant sections on the
Group’s website – www.tharisa.com –
for additional disclosure. While written
primarily to address the interests of
providers of capital, this report also
addresses matters considered important
to a wide range of stakeholders.
FRAMEWORKS
Tharisa applies the principles of King IV to
its decision making, strategy formulation
and implementation. These principles
have also been applied in compiling this
report. The Company further adheres to
the JSE Listings Requirements and
complies with the LSE Listing Rules and
Disclosure and Transparency Rules
applicable to a standard listing.
Tharisa accepts that integrated reporting
is a journey, and in line with its
commitment to the principles of
integrated reporting, it has expanded on
its broader social, environmental and
economic performance as far as possible
throughout this report. While the
Company has been guided by the
International Integrated Reporting
Committee’s Framework, it will only be
fully applied to future reports.
In line with these frameworks,
recommendations, and what it considers
to be best practice, this report contains a
number of forward-looking statements.
Various factors, conditions and
developments beyond the control of the
Company and its management may cause
the conditions predicted and implied in
these forward-looking statements to be
materially different to those envisaged at
the time of writing. Such variance
between expectation and future realities
may have a material impact on the
Company’s future performance and
results.
ASSURANCE
The Board acknowledges its responsibility
for ensuring the integrity of this
Integrated Annual Report. The Audit
Committee recommended the 2020
Integrated Annual Report to the Board
for approval, which approval the Board
consented to give, believing that the
report addresses all material issues and
gives a balanced and truthful
representation of the Company’s
performance.
The condensed consolidated financial
statements on pages 94 to 135 of this
Integrated Annual Report and the
consolidated annual financial statements
on Tharisa’s website have been prepared
in accordance with IFRS as issued by the
International Accounting Standards Board
and the Cyprus Companies Law.
A glossary of abbreviations, definitions
and technical terms appears from pages
151 to 158.
THE VITAL NUMBERS
THARISA PLC INTEGRATED ANNUAL REPORT 2020
7
Reef mined
Stripping ratio
Reef milled
PGM flotation feed
PGM rougher feed grade
PGM recovery
6E PGMs produced
Average PGM contained metal basket price
Average PGM contained metal basket price
Cr2O3 ROM grade
Chrome recovery
Chrome yield
Chrome concentrates produced (excluding third
party)
Metallurgical grade
Specialty grades
Third-party chrome production
Metallurgical grade chrome concentrate contract
price
Metallurgical grade chrome concentrate contract
price
Average exchange rate
Group revenue
Gross profit
Net profit for the year
EBITDA
Headline profit
Headline earnings per share
Gross profit margin
Net cash flow from operating activities
Net debt
Capital expenditure
On-mine lost time injury frequency rate**
On-mine employees including contractors
Other group employees
Unit
2020
2019
2018
2017
2016
kt
m3: m3
kt
kt
g/t
%
koz
US$/oz
ZAR/oz
%
%
%
kt
kt
kt
kt
US$/t
CIF China
ZAR/t
IF China
ZAR:US$
US$m
US$m
US$m
US$m
US$m
US cents
%
US$m
US$m
US$m
4 971.1
12.1
5 036.1
3 765.9
1.46
80.1
142.1
1 704
27 691
18.2
62.1
26.7
1 344.8
1 023.2
321.6
169.8
4 627.1
8.3
4 836.0*
3 605.9
1.47
82.1
139.7
1 081
15 531
18.1
62.0
26.7
1 290.0
977.9
312.1
241.1
4 875.0
7.9
5 105.3
3 718.1
1.51
84.1
152.2
923
12 038
18.2
66.0
28.4
1 448.0
1 080.3
367.7
221.8
5 025.1
7.5
4 916.2
3 599.2
1.56
79.7
143.6
786
10 492
17.8
64.1
27.1
1 331.2
1 008.1
323.1
20.0
4 837.2
7.3
4 656.3
3 575.6
1.65
69.9
132.6
736
10 881
18.0
62.7
26.7
1 243.7
974.3
269.4
–
140
162
186
200
120
2 231
16.2
406.0
130.4
54.9
113.4
44.9
16.9
32.1
73
21.1
70.6
0.09
3 082
48
2 322
14.4
342.9
60.4
8.4
51.6
12.8
5
17.7
69.9
12.0
43.9
0.27
2 826
129
2 415
13.1
406.3
108.5
51.0
101.9
49.1
19
26.7
89.8
10.6
48.2
0.18
2 430
86
2 667
13.4
349.4
122.7
67.7
115.6
57.8
22
35.1
75.7
(0.1)
26.4
0.07
2 256
75
1 751
14.8
219.6
54.5
15.8
43.0
14.3
6
24.8
22.2
41.4
12.3
0.36
2 187
52
Includes the processing of 99.0 kt of commissioning tails through the processing plants
*
** Per 200 000 man hours worked
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8
THARISA PLC INTEGRATED ANNUAL REPORT 2020
FINANCIAL AND NON-FINANCIAL
HIGHLIGHTS
REEF MINED
4.97 Mt
up 7.6%
(2019: 4.62 Mt)
PGM PRODUCTION
(5PGE + Au)
142.1 koz
up 1.7%
(2019: 139.7 koz)
CHROME CONCENTRATE
PRODUCTION
1.34 Mt
up 3.9%
(2019: 1.29 Mt)
REVENUE
OPERATING PROFIT
EBITDA
US$406.0 m
US$87.6 m
US$113.4 m
up 18.4%
(2019: US$342.9 m)
up 262.0%
(2019: US$24.2 m)
up 119.8%
(2019: US$51.6 m)
PROFIT BEFORE TAX
US$75.8 m
up 576.8%
(2019: US$11.2 m)
EARNINGS AND HEADLINE
EARNINGS PER SHARE
TOTAL PROPOSED DIVIDEND
US 16.2/16.9 c
US 3.5 cents
up 305.0/244.9%
(2019: US 4/5 cents)
up 366.7%
(2019: US 0.75 cents)
PGM production (koz)
Chrome production (Mt)
Group revenue (US$m)
155.0
150.0
145.0
140.0
135.0
130.0
125.0
120.0
100.0
1.6
100.0
450.0
.
2
2
5
1
.
6
3
4
1
.
1
2
4
1
.
7
9
3
1
.
6
2
3
1
2016
2017
2018
2019 2020
90.0
80.0
70.0
60.0
50.0
40.0
30.0
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1
1
.
0
1
.
0
1
.
0
1
.
0
1
.
4
0
.
3
0
.
3
0
.
3
0
.
3
0
.
2016
2017
2018
2019 2020
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
.
3
6
0
4
.
0
6
0
4
.
4
9
4
3
.
9
2
4
3
.
6
9
1
2
2016
2017
2018
2019
2020
(cid:81) PGM production (kozpa) (cid:81) PGM recovery (%)
(cid:81) Speciality production (Mtpa)
(cid:81) Metallurgical production (Mtpa)
(cid:81) Chrome recovery (%)
THARISA PLC INTEGRATED ANNUAL REPORT 2020
9
NUMBER OF FATALITIES
0
(2019: 0)
NUMBER OF PERMANENT
EMPLOYEES*
1 736
(2019: 1 747)
TOTAL SPENT ON TRAINING
US$3.2 m
(2019: US$3.5 m)
* Data is applicable to Tharisa Minerals
NUMBER OF COVID-19
SCREENINGS*
10 724
COVID-19 TEST RATE*
10.22%
(*AS AT 1 DECEMBER 2020)
(*AS AT 1 DECEMBER 2020)
NUMBER OF CONTRACTORS*
FEMALE EMPLOYEES*
1 346
(2019: 1 079)
22%
(2019: 21%)
EMPLOYEES AWARDED
STUDY ASSISTANCE*
INTERNS, GRADUATES AND
LEARNERSHIPS*
11
(2019: 20)
98
(2019: 20)
Gross profit and margin (US$m)
EBITDA (US$m)
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
.
4
0
3
1
.
7
2
2
1
.
5
8
0
1
.
5
4
5
.
2
0
6
2016 2017 2018 2019 2020
(cid:81) Gross profit (US$m)
(cid:81) Gross profit margin (%)
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
.
6
5
1
1
.
9
1
0
1
.
4
3
1
1
.
0
3
4
.
5
1
5
2016
2017
2018
2019
2020
Net cash flows from operating
activities (US$m)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
.
8
9
8
.
7
5
7
.
0
3
7
.
0
0
7
.
2
2
2
2016
2017
2018
2019
2020
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10
THARISA PLC INTEGRATED ANNUAL REPORT 2020
GROUP STRUCTURE AND OVERVIEW
Scotland
d
England
ern
Northern Ireland
Wales
London - LSE: THS
UK
EUROPE
CYPRUS
6
8
ZI
ZIMBABWE
WE
Dt
Great Dyke
eat Dy
Gre
8
9
9
A
SOUTH AFRICA
UT
3
2
5
1
4
10
Johannesburg -
nnha
JSE: THA
7
Richards Bay
7
Durban
CHINA
Tianjin
Lianyungang
Sh
Shanghai
INDONESIA
Qinzhou
Bahodopi
INDONESIA
1
THARISA PLC INTEGRATED ANNUAL REPORT 2020
11
INVESTMENT HOLDING COMPANY
Tharisa plc (Cyprus)
is
RAPEO
OPERATING/PRODUCING COMPANIES
OO
BEE SHAREHOLDERS
uce
al
Tharisa Minerals (South Africa) 74%
(
Tharisa Minerals produces PGM
d
concentrate and metallurgical and specialty
grade chrome concentrates from a shallow
open pit mine near Rustenburg, North
Vo
West province. The Genesis and Voyager
e
plants have a combined nameplate
capacity of 4.8 Mt of ROM
o
ore per annum.
gi
ntrate
t
g,
fr
2
3
THARI RESOURCES
(South Africa)
20%
THE THARISA COMMUNITY
TRUST (South Africa)
6%
h A
Arxo Metals (South Africa) 100%
m
Arxo Metals produces specialised higher margin chemical and foundry grade chrome
arg
rgin chemical an
mar
high
3 U
llwa
Stillwa
wa
concentrates, operates Sibanye-Stillwater’s K3 UG2 chrome plant in Rustenburg and is the
t
t ar
men
Group’s research and development arm. It also commissioned a 1MW DC furnace to produce
PGM-rich metal alloys. Arxo Metals conducts extensive research and development into
technologies and beneficiation opportunities.
nd
d
ndd fo
pla
a
h
er
ater
.
t in Rus
DC fu
pme
en
co
n
MetQ manufactures equipment used in
the mining industry, with a particular
focus on beneficiation.
ciat
o M
es
ate
nd
o
be
4
44
4
5 MetQ (South Africa) 100%
7
Arxo Logistics (South Africa) 100%
Arxo Logistics manages the rail and road
distribution of PGM concentrate and
chrome concentrates produced by the
Tharisa Mine, and chrome concentrates
from Sibanye-Stillwater’s K3 UG2 chrome
plant. These products are transported to
customers in South Africa and
international customers via port facilities in
Richards Bay and Durban.
9
Salene Chrome
(Zimbabwe) Option for 90%
Open pit chrome adjacent to the Great
Dyke in Zimbabwe.
TRADING AND SERVICE PROVIDER COMPANIES
Arxo Resources (Cyprus) 100%
Arxo Resources markets and sells
metallurgical and chemical grade
chrome concentrate to customers
primarily in Asia.
6
EXPLORATION AND GROWTH PROJECTS
8
Karo Mining Holdings
(Cyprus) 26.8%
Karo Holdings is establishing an
integrated PGM mining and refining
complex in Zimbabwe. Karo Platinum,
an indirect subsidiary of Karo Holdings,
has been awarded a Special Grant of
over 23 903 ha in the Great Dyke to
develop a PGM mining complex.
10
Salene Manganese (South Africa)
Option for 70%
Salene Manganese’s principal activity is
a manganese exploration and mining
company. The Mining Right is for the
mining of iron ore and manganese ore.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
GROUP HISTORY
2006
February
Prospecting rights granted
March
Tharisa Minerals
incorporated
2009
March
Acquired 74%
shareholding in Tharisa
Minerals
November
Commenced production of
first chrome concentrate
2012
February
Secured project finance facility of ZAR1 billion
May
First bulk rail shipment
July
Tharisa Minerals water use licence granted
December
Voyager Plant is commissioned at 300 ktpm
capacity
2006
2008
2009
2011
2012
2013
2008
February
Tharisa Limited
incorporated
September
Mining rights for Tharisa
Mine granted
October
Commenced trial mining
December
US$65 million seed
capital raised
2013
July
Challenger Plant is
commissioned
2011
January
US$95 million investment by
Fujian Wuhang and HongKong
HeYi Mining
April
US$150 million pre-listing capital
raised
August
Genesis Plant is commissioned at
100 ktpm capacity
Tharisa Community Trust
registered
November
Tharisa Community Trust receives
6% of Tharisa Minerals donated
by Tharisa PLC
THARISA PLC INTEGRATED ANNUAL REPORT 2020
13
2014
April
Listed on JSE, capital raised
US$47.9 million
September
Commissioning of high energy
PGM flotation circuit
2017
May
Agreement entered into for the
purchase of mining fleet and
transfer of employees from mining
contractor to owner-operated
mining model
August
Entered into strategic cooperation
agreement with Tisco for chrome
concentrate supply.
Secured first third-party operating
and trading agreement
October
Transaction for the
acquisition of mining fleet
effective
November
Increased dividend declared
and an improved dividend
policy
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2016
2017
2018
2019
2020
DISCOVER DEVELOP DELIVER DIVERSIFY
2016
June
Listed on the LSE
November
Maiden distribution to
shareholders
2020
March
COVID-19 pandemic
September
Five years fatality free
October
Vulcan project restart
2018
March
Maiden interim dividend
declared
June
Shareholding acquired in
Karo Holdings
September
Record operational year
Salene Chrome’s
shareholder grants call
option for 90%
shareholding
2019
February
Listed on A2X
August
Approval of
Vulcan Plant, a
groundbreaking use
of existing
technologies in fine
chrome recovery
September
Achieved three
million
fatality-free shifts
October
Acquisition of MetQ
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
6 PILLARS DRIVING GROWTH
ENNRRICHING LIVES
th
ttthroouugh
INNOVATING
tthhe RESOURCES
of the
CCO
CCOOMPANY
FU
FUTURE
Expansion and
project roll-out
Optimised existing
operations
Innovative thinking
(Technology)
Global and
diversified
Investment
of choice
Responsibly
enriching lives
CHAIRMAN’S REVIEW
THARISA PLC INTEGRATED ANNUAL REPORT 2020
15
D
Dear Stakeholder
T
The year under review has seen our Company deliver on almost every
operational and financial metric, be that in improvements in
o
o
operational performance and financial returns, the consolidation of
o
our strategic positions in our long-term growth projects, and our
c
continued progress with our safety record. In any given year, this
p
performance would be highly credible. To achieve such milestones in
the face of the largest global health challenge in three generations,
t
COVID-19, is an extraordinary feat, which was enabled by the quality
C
and capability of our people.
a
Tharisa has a strong track record in balancing
the extraction of returns for its stakeholders
with care for its employees, local communities
and the environment. This year passed will be
remembered for the significant examination of
our business model in tackling the tumultuous
challenge of COVID-19. The effects of
COVID-19 will be long lasting and, as the
international community struggles to contain
and expel the impact of the disease, we at
Tharisa will continue to work with the
communities with whom we share our
operating footprint in Southern Africa,
particularly those who have been hardest hit,
including one of our highly valued colleagues.
In looking at how our Company performed
during this last reporting period in relation
to the strategic goals outlined in 2019, the
foundation of our business lies in the
significant investments we made in the
Tharisa Mine. The improvements in the open
pit, from the pit redesign and ongoing
optimisation, through to the handling of the
significant improvement in mining both ore
and waste, were further underpinned by the
adaptability of our processing solutions in both
our Voyager and Genesis plants.
Tharisa’s focus on investment in innovative
research in maximising recoveries of both
PGMs and chrome and continued to make
significant progress, even as we mine higher
volumes and the planned mining of lower-
grade materials during the year under review.
Despite the challenges to our complex supply
chains, as well as the disruptions to our
employees during the second and third
quarters in particular, I am delighted as your
Chairman to confirm that our business model
has not only come through the most thorough
of examinations driven by external factors, but
has thrived through the extraordinary
application of the skillsets from our employees.
Though the Tharisa Mine will continue to
be the engine of our short- and medium-term
growth plans, our operation in Zimbabwe,
a key pillar of our growth, saw the completion
of the first phase of drilling and assaying at
Karo. Zimbabwe, though impacted by a
combination of an acute COVID-19 dislocation
and an equally challenging economic
backdrop, is blessed with an extraordinary
geological endowment and we have only seen
a glimpse of the potential of our assets in the
Great Dyke region to date.
The prospect of developing this asset further
has been assisted by the awarding
of a Special Economic Zone over our land
package, which adds more certainty to
accessing the required skills and financial
capital to build this long-life project.
We remain confident that our project in
Zimbabwe can make a positive contribution to
the local and broader economies similar to the
Tharisa Mine, which has created and sustained
over 3 000 direct and contractor jobs, with the
far-reaching and multiplying impact a project
of such a size can bring to local and regional
communities.
As you will see in our review of FY2020, we
have identified six pillars that we see as the
drivers of our growth strategy. These are:
(cid:3)(cid:79) expand and roll out our business
sustainably;
(cid:3)(cid:79) further optimise our existing operations;
(cid:3)(cid:79) continue to invest in innovative thinking;
(cid:3)(cid:79) become a global and diversified business;
(cid:3)(cid:79) be the investment of choice in our chosen
sector; and
(cid:3)(cid:79) responsibly enrich the lives of all of our
stakeholders.
The future of the Company will be
underpinned by the continued growth in
production from our South African PGM and
chrome platform, which will benefit from the
recommencement of construction of the
Vulcan Project. Together with our ethos of
innovative thinking and incorporating
technology into our business even further,
we see our ability to diversify operationally
and into other commodities as a major step
in the growth of Tharisa.
Our strategy to develop our Company into
a globally significant, low-cost producer of
strategic metals remains firmly on track,
underpinned by the progress we continue to
make with our existing asset portfolio that
continues to generate the returns we need to
invest in the future. As the global economy
begins to look beyond the impact of the
COVID-19 pandemic, the longer-term
challenges of climate change remain at the
forefront. Building the solutions for the future,
is at the very centre of our ethos. As such, we
continue to engage with a number of
multinational blue chip organisations that
share our vision of sustainability and look
forward to announcing progress on these as
and when they reach fruition.
Tharisa is today ideally positioned to not only
grow its business from the significant asset
base it has, but it also has the financial
strength of a combination of the generation of
free cash flow, a robust and low debt position
with its balance sheet, as well as the ability to
reward shareholders for their loyalty through
the delivery of an industry-leading dividend
policy. Growth opportunities will be pursued
but not at the risk of destabilising the strong
platform we have striven to build over the last
five years. We want to be the investment of
choice in the sector, but will only be so if we
are able to meet the demanding criteria we
have set ourselves in protecting our business,
as well as seeking growth opportunities, which
will benefit all of our stakeholders.
Underpinning these growth pillars is our
commitment to enriching the lives of our
stakeholders through responsible and
sustainable mining. The positive impact we
make on our local, national and international
stakeholders can only be sustained if Tharisa
continues to strive towards both
environmental and safety concerns in our
approach to delivering on our business model.
I remain excited about the prospects of
Tharisa. Having seen its growth since its
infancy, I remain as committed as I have
always been to the successful development of
this business.
Loucas Pouroulis
Executive Chairman
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16
THARISA PLC INTEGRATED ANNUAL REPORT 2020
HOW THARISA CREATES VALUE
Business model
INPUTS
People
• Skilled workforce
• Experienced entrepreneurial leadership
• Human resource development
• Fully committed to zero-harm culture
Assets and infrastructure
• Mining and exploration
rights
• Significant resource
• Long-term open pit life of
mine
• Processing plants
• Regulatory compliance
• Access to road and rail
networks
• Access to port facilities
Financial
• Operationally cash flow positive
• Capital expenditure – stay-in-business capex and
optimisation projects
• Access to capital
• JSE and LSE listing – capital markets
Innovation
• Optimisation – mining and processing
• Research and development
– New technology
– Development of niche products
– Piloting PGM-rich alloy smelting and refining technology
Stakeholders
• Employees
• Shareholders
• Communities
• Customers
Environment
• Suppliers
• Government
• Municipalities
• Regulators
• Resource management i.e. energy use and water availability
• Land management, including biodiversity conservation,
rehabilitation and closure planning
• Environmental compliance
• Managing and minimising waste streams
Tharisa’s
vision is to be
a leading natural
resources company,
generating value by
being a globally
significant low-cost
producer of diversified
strategic commodities.
The Group is engaged in
exploration, mining, processing,
beneficiation, marketing, sales,
and logistics. Tharisa Minerals is a
low-cost producer of PGMs and
chrome concentrates, resulting in
two distinct revenue streams from
a single resource with costs
shared between the
commodities.
The Group continues to
explore beneficiation
opportunities through
innovation and
technology.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
17
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WHAT WE DO
1
Mineral extraction
• Mining of five MG
Chromitite Layers
• Owner mining
model
• Exploration for
the future
2
Beneficiation
• Producing PGMs and
chrome concentrates,
including metallurgical
grade
• Specialty grade
3
Research and
development
• Improving recoveries
• 1 MW DC furnace
to produce PGM-rich
alloys
• Development of
Vulcan process
4
Marketing and sales
• Sales of PGM
concentrate
• Marketing and sales
of chrome concentrates
to customers globally
• Agency agreement to
third-party businesses
5
Logistics
• Road transport of
PGM concentrate
• Road and rail
transport of chrome
concentrates to port
• Shipment of product
to customers
18
THARISA PLC INTEGRATED ANNUAL REPORT 2020
HOW THARISA CREATES VALUE CONTINUED
OUTCOMES
• Employment: more than 700 people
from local community
• A total of 98 interns, graduates and
learnerships
• Skills development: US$0.4 million
spent on training
• Production of saleable product:
5.0 Mt reef milled with 142.1 koz
PGMs and 1.34 Mt chrome
concentrates produced
• Depletion of resources:
4.9 Mt reef mined
• Operating profit:
US$87.6 million
• Cash generated from operations:
US$73.0 million
• Social upliftment
Delivery of over 3 000 food parcels
to families
• Process improvements
• Operates across the value chain –
from mine to end customer
People
Assets and
infrastructure
Financial
Innovation
• Low LTIFR: 0.09 per
200 000 man hours
worked
• Five years fatality free
• Responsible management and
efficient use of our assets
• Direct and indirect taxes and royalties:
US$51.9 million
• Total dividend:
US 3.5 cents per share
• Large-scale open pit resource for extraction
of five MG Chromitite Layers
• Total salary cost: US$56.6 million
• Community upliftment: US$0.4 million
• Shareholder returns (HEPS):
US 16.9 cents per share
Stakeholders
spent on education
• Customers – quality of products,
consistent deliveries
• Total energy consumption:
185 807 MWh
• Cumulative rehabilitation provision:
Environment
US$17.1 million
• T otal water consumption:
1 290 346 m3
• Total CO2 emissions (Scope 3):
2 285 059 tCO2e
Tharisa Minerals
Resource
• 859.58 Mt resources
at 1.47 g/t 5PGE +
20.01% Cr2O3
Mining
• 14-year open pit
LOM
• 40-year underground
extension
• Mined 4.9 Mt
of ROM reef
Processing
• Milled 5.0 Mt of
ROM
• Production of
142.1 koz of PGMs
• 1.34 Mt of chrome
concentrates
Large scale
• One of the world’s
•••
largest single
chrome resources
Mechanised
• Mechanised open
pit mining with
a skilled labour
force
THARISA PLC INTEGRATED ANNUAL REPORT 2020
19
Arxo Metals
Beneficiation
• Production of specialty grade chrome
concentrates
Research & Development
• New technologies
• Development of niche products
• Piloting PGM-rich alloy technology with
1 MW DC smelter
Third party
• Improving quality of K3 UG2 chrome
plant production
Arxo Resources
Marketing and sales
• Significant trader of chrome
concentrates
• Global reach for specialty chrome
concentrates
• Third-party trading
Arxo Logistics
Logistics
• Road transport of PGMs
• Road/rail transport, warehouse and port
facilities for bulk chrome concentrates
MetQ
• Manufacturing
• Equipment used in the mining industry,
with a particular focus on beneficiation
• Based in Pretoria
Customers
• PGM off-take agreement – Impala
Platinum and Sibanye-Stillwater
• Specialty chrome off-take/joint
THARISA
MINERALS
ARXO
METALS
ARXO
RESOURCES
ARXO
LOGISTICS
METQ
marketing agreement
CUSTOMERS
KARO
MINING
HOLDINGS
• Metallurgical chrome agency agreement
– Noble Group
• Strategic volume off-take chrome
agreement – Tisco
• Relationships with stainless steel and
ferrochrome producers and global
commodity traders
Karo Mining Holdings
• Development of highly prospective
integrated PGM mining complex
• Replication of phased development and
innovative approach
Salene Chrome
• Potential quick-to-market chrome
business expansion
• Addition of higher grade chrome
concentrate to the Tharisa basket of
chrome products
Salene Manganese
• Salene Manganese’s principal activity is
a manganese exploration and mining
company.
• The mining right is for the mining of
iron ore and manganese ore.
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SALENE
CHROME
Derisked
• In production
• Major capex
complete
SALENE
MANGANESE
20
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CHIEF EXECUTIVE OFFICER’S REVIEW
The year under review saw Tharisa’s robust business
model tested by the consequences of the global
coronavirus pandemic, COVID-19. Our focus on safety
above all, and the benefits of the co-product strategy, has
seen our Company pass with flying colours, as well as
consolidate the foundation for years of further growth.
We firmly believe that technology and technological
innovation are major enablers of our success.
ore body. The mine has benefited from
the remedial action taken in 2018 and
2019 with the optimisation of the pit
layout, improved waste stripping, and the
substantial further investment in our
mining fleet, coupled with the continuous
optimisation of the production plants.
These actions have positioned Tharisa to
benefit from an increasing PGM basket
price contributing to the revenue increase
of 18.4% to US$406.0 million and
EBITDA rising by 119.8% to US$113.4
million, equating to earnings per share of
US 16.2 cents, up 305%. Tharisa
generated net cash from operating
activities of US$73.0 million (2019:
US$69.9 million). Taking into account the
disruption of the COVID-19 pandemic,
which saw South Africa implement one of
the harshest national lockdowns not only
in Africa but globally, Tharisa delivered
record production across several months
during the financial year, underscoring the
health of the business in the face of
unparalleled uncertainty.
Group revenue (US$m)
450.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
.
3
6
0
4
.
0
6
0
4
.
4
9
4
3
.
9
2
4
3
.
6
9
1
2
2016
2017
2018
2019
2020
EARNINGS
PER SHARE (US$)
US 16.2
CENTS
REVENUE (US$)
US406.0 m
+305.0%
+18.4%
It is with pride that our LTIFR rate showed
0.09 per 200 000 man hours worked at
the end of September 2020, being one of
the best safety records in the South
African mining industry.
Safety is a core value and Tharisa
continues to strive for zero harm at its
operations. The Company achieved a
number of safety milestones throughout
the year:
(cid:3)(cid:79) 28 September 2020 – five years fatality
free
(cid:3)(cid:79) 16 September 2020 – 365 days LTI-free
for the mining production team
(cid:3)(cid:79) 30 July 2020 – Genesis Plant achieved
365 LTI-free days
(cid:3)(cid:79) 19 June 2020 - Tharisa Mine achieved
4 million fatality-free shifts
(cid:3)(cid:79) 5 March 2020 – five years LTI-free for
the Tharisa Mine laboratory and R&D
Beyond delivering on the operational and
financial metrics, Tharisa should be
measured on its ability to grow
sustainably from the asset base we have
developed over the past decade, through
the development of our pipeline for the
future benefit of all our stakeholders. It is
therefore extremely rewarding to inform
you that Tharisa is firmly on that path for
long-term sustainable growth.
The engine of our business is the Tharisa
open-pit mine in the Bushveld Complex in
South Africa. It is one of the few mines
that co-produces both PGMs and chrome
concentrates commercially from the same
THARISA PLC INTEGRATED ANNUAL REPORT 2020
21
Tharisa has benefited from the increase in
its PGM basket price, supported by
demand fundamentals, which increased
to US$1 704/oz (2019: US$1 081/oz).
Tharisa’s production of PGMs saw an
improvement to the previous year, with
142.1 koz versus 139.7 koz. Of this
production, rhodium comprised 13.5 koz
and, with the relatively higher rhodium
content within our prill split, resulted in a
meaningful contribution to the revenue
line with the metal trading at an average
price of US$8 348/oz for the year. Driven
by growing demand and an increasing
deficit, current rhodium spot prices are
trading at above US$16 000/oz.
Notwithstanding growth in the stainless
steel industry, which is reliant on chrome
as an input, metallurgical grade chrome
concentrate prices reduced from an
average of US$162/t to US$140/t, down
13.6%. Tharisa is a key producer in the
global and diversified market of specialty
grade chrome concentrates and cash
flows benefited from a 3.0% increase in
production of 321.6 kt of higher margin
specialty grade chrome versus 312.1 kt
the previous year, out of our total
production of 1.34 Mt of chrome
concentrate, up 4.2% from 1.29 Mt.
This means PGM demand fundamentals
will continue to support the pricing
environment and in turn benefit Tharisa
for years to come.
With a stainless steel industry that has
seen sustained growth even in 2020,
chrome remains in demand with forecast
growth for stainless steel of 5%
CAGR in 2021. Tharisa continues to be a
significant supplier to the Asian
economies of chrome concentrate. With
approximately one-third of our output in
specialty products, we continue to benefit
from other markets beyond the stainless
steel market and remain one of the
largest suppliers of chemical grade
chrome to the world’s chemical industries.
In October 2020, we announced the
re-start of the Vulcan Plant construction,
which, using proprietary groundbreaking
existing technologies developed by our
wholly owned subsidiary, Arxo Metals, will
process the chrome fines from the
Voyager and Genesis plants, boosting our
production by some 25% of chrome
concentrates per annum. This project
should achieve project completion within
FY2021 with the benefits being derived in
the following year.
The commodities that we mine have
excellent fundamentals and we believe
the pricing of these will remain favourable
for some time to come. Driven by the
demand for PGMs, which remain largely
unsubstitutable, as emission controls
continue to tighten for the internal
combustion engine and the rapid
development of the hydrogen economy.
As with any business, we continue to face
headwinds. Of concern is the South
African government’s recent proposal to
impose an export tax on chrome ores
in an effort to support the ailing
ferrochrome industry. It remains unclear
how, when or if the tax will be
administered. A detailed third-party
analysis has shown that any potential
benefits, which rely on a multitude of
factors occurring in parallel, are far
outweighed by the harm the primary
and non-integrated chrome industry will
suffer. This proposed tax will not provide
lasting or coherent support to the
ferrochrome industry and the only
sustainable and viable aid to this
downstream industry is subsidised
electricity pricing. As Tharisa, like other
members of ChromeSA, we are opposed
to any export tax or intervention that may
prejudice our business and as such we
have a duty of care to protect and defend
our position and indeed our stakeholders’
interests.
At the Karo operation in Zimbabwe, we
have commenced the second phase of
drilling, which is progressing well. The
original timelines for the Karo Project
have been negatively impacted by the
constraints of COVID-19, and we
estimate that we have incurred a
12-month delay. We still are of the view
that the Great Dyke of Zimbabwe
presents a fantastic opportunity to mine
high-grade, low-cost shallow PGMs and
remains a focal area for our expansion
strategy.
In closing, I would like to personally thank
all the staff of Tharisa, without whom
these strong results would not have been
possible. I would also like to thank the
Board, the management, stakeholders
and suppliers who have worked with us
this past year and look forward to our
continued partnership in the years to
come.
Phoevos Pouroulis
Chief Executive Officer
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22
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CHIEF FINANCE OFFICER’S REVIEW
The sustainability of Tharisa’s business, built on the
co-product business model and robust balance sheet, was
proven in this financial year, with strong earnings growth,
with earnings per share increasing to US 16.2 cents
(2019: US 4.0 cents) and net debt to equity at a healthy
6.6%. These results are against a backdrop of extended
national lockdowns as a consequence of the coronavirus,
which came at a substantial cost to global economic growth.
With this strong financial performance, Tharisa continued to
generate healthy operating cash flows, providing returns to
shareholders while in parallel investing in the business,
ensuring all stakeholders benefit in the long term.
The return on invested capital (ROIC),
calculated as the net operating profit
after tax divided by the average invested
capital (comprising total assets less cash
and non-interest-bearing, short-term
liabilities), for the period under review
was 18.8% (2019: 5.2%).
The Group’s commodities are priced in
US$ and the base cost currency for the
Group’s South African mining operation
is mainly in ZAR. The ZAR exchange rate
remained volatile on the back of global
markets suffering from “trade wars,”
a weak South African economy and the
sovereign downgrade by all the major
ratings agencies to sub-investment grade,
with the ZAR depreciating on average
against the US$ by 12.5% to ZAR16.2
(2019: ZAR14.4)
KEY FINANCIAL METRICS
Revenue
EBITDA
Profit before tax
Profit attributable to owners of the
Company
Earnings per share
Dividend per share
Return on equity
Return on invested capital
Total debt
Net debt
Net debt/EBITDA
Net debt/equity
Unit
US$’000
US$’000
US$’000
US$’000
US cents
US cents
%
%
US$’000
US$’000
%
2020
405 995
113 386
75 752
43 296
16.2
3.50
12.3
18.8
70 613
21 320
0.2
6.6
2019
342 885
51 557
11 155
10 616
4.0
0.75
3.3
5.2
71 216
12 015
0.2
3.7
Group revenue totalled US$406.0 million (2019: US$342.9 million), of which
US$218.6 million (2019: US$130.1 million) was derived from the sales of PGM
concentrate and US$161.3 million (2019: US$177.9 million) derived from the sale of
chrome concentrates. The agency and trading segment contributed US$24.1 million
(2019: US$34.9 million). Following the acquisition of the issued share capital of MetQ
Proprietary Limited – a manufacturer of equipment principally for the mining industry –
on 1 October 2019, a new segment, the manufacturing segment, was introduced and
contributed US$2.0 million to revenue.
Overall, revenue increased by 18.4%, on the back of increased sales volumes of both
PGMs and chrome concentrates, and a strong increase in the PGM basket price.
A breakdown of the PGM revenue is
depicted below, reflecting the
performance in the rhodium price, which
made up over half of the PGM revenue at
an average price ofUS$8 348/oz (versus a
spot above US$16 000/oz at the time of
writing) and therefore increased
contribution to the revenue basket:
As a co-producer of PGMs and chrome
concentrates, the shared costs of
production for segmental reporting
purposes are based on the relative
contribution to revenue on an ex-works
basis, allocating 75% (2019: 55%) to the
PGM segment and 25% (2019: 45%) to
the chrome segment.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
23
Overall inflationary pressures in South
Africa, as measured by the producer price
index (PPI), were well contained at 2.5%
(2019: 4.1%). The cost of diesel, which
comprises approximately 13% of the
on-mine cost of production, decreased
with the average price per litre of diesel
reducing by 8.2% per litre from
ZAR14.25 (US$1.0) per litre to ZAR13.08
(US$0.8) per litre. Electricity costs, while
not being a significant input cost at
approximately 7% of the on-mine cost of
production, increased by 12.4% per
kilowatt hour.
On a unit cost basis, the reef mining cost
per tonne increased by 6.5% from
US$24.7/t to US$26.3/t. This cost per reef
tonne was incurred on a stripping ratio of
12.1 (m³ waste: m³ reef). On a per cube
mined basis, i.e. including both waste
and reef, the cost reduced by 22.0%
from US$9.1/m³ to US$7.1/m³ (the prior
year stripping ratio was 8.3) on the back
of the increased volumes moved. In all,
US$22.7 million (2019: US$0.2 million)
was capitalised to deferred stripping.
The consolidated cash cost per tonne
milled (i.e. including mining but excluding
transport and freight) increased by 2.9%
from US$41.9/t to US$43.1/t.
Selling costs incurred with the transport of
the metallurgical grade chrome concentrate
from the mine to the customer at China
main ports decreased from US$63.2/t to
US$59.2/t.
Gross profit amounted to US$130.4
million (2019: US$60.4 million) with a
gross profit margin of 32.1% (2019:
17.6%). The major factors contributing to
the improved gross margin were the
increase in the PGM basket price, and
increasing sales volume and the benefits
of the weaker ZAR:US$ exchange rate.
The major cash cost of sales categories
(excluding selling expenses) are
summarised below:
Cash cost of sales (%)
21.4
21.6
33.5
2020
12.1
4.8
6.6
(cid:81) Mining
(cid:81) Diesel
(cid:81) Utilities
(cid:81) Consumables
(cid:81) Labour
(cid:81) Overheads
Metric
Cubes mined
Cost per cube mined
Reef tonnes mined
Cost per reef tonne mined
Tonnes milled
Consolidated cash cost per
tonne milled
Chrome inland and freight
costs
Unit
Mm3
US$/m3
Mt
US$/t
Mt
US$
US$/t
2020
18.5
7.1
5.0
26.3
5.0
38.5
59.2
2019
12.5
9.1
4.6
24.7
4.8
41.9
63.2
%
47.7
(22.0)
7.4
6.5
4.1
(8.1)
(6.3)
Administration expenses amounted to US$35.3 million (2019: US$37.3 million), a
decrease of 5.4%. The major cost within administration expenses was employee costs at
US$19.9 million (2019: US$22.8 million), comprising 56.4% of the administrative costs
(2019: 61.1%).
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PGM revenue (%)
131
0
0
25
19
2020
51
(cid:81) Pt
(cid:81) Pd
(cid:81) Rh
(cid:81) Au
(cid:81) Ru
(cid:81) Ir
(cid:81) Ni
(cid:81) Copper
PGM revenue (%)
1
2
0
0
29
4
42
2019
22
(cid:81) Pt
(cid:81) Pd
(cid:81) Rh
(cid:81) Au
(cid:81) Ru
(cid:81) Ir
(cid:81) Ni
(cid:81) Copper
24
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CHIEF FINANCE OFFICER’S REVIEW
CONTINUED
After accounting for the administration expenses, results from operating activities amounted to US$87.6 million (2019: US$24.2 million).
EBITDA amounted to US$113.4 million (2019: US$51.6 million).
Finance costs of US$6.9 million (2019: US$8.8 million), benefiting from a global reduction in interest rates, relate primarily to the
corporate facilities in Tharisa Minerals, asset equipment finance and trade finance facility utilisation.
The Group generated a profit before tax of US$75.8 million (2019: US$11.2 million).
The tax charge amounted to US$20.8 million (2019: US$2.8 million), an effective charge of 27.5% (2019: 24.9% charge). A normalised
tax rate should be circa 25%. However, certain expenditure incurred by the Company is not tax deductible. Cash tax paid amounted to
US$3.4 million (2019: US$4.4 million).
The comprehensive income for the period, as a consequence of foreign currency translation differences of US$24.1 million (2019:
US$14.0 million), amounted to US$30.8 million (2019: US$5.6 million loss).
FY2020
(USc)
FY2019
(USc)
Basic earnings per share
Headline earnings per share
Diluted earnings per share
Diluted headline earnings per share
16.2
16.9
16.2
16.8
4
4.9
4
4.9
Change
%
up 305.0
up 244.9
up 305.0
up 242.9
The total debt amounted to US$69.2
million, resulting in a debt-to-total equity
ratio of 22.0% and a net debt-to-total
equity ratio of 6.6%.
Of the total capex spend of US$70.6
million for the period, approximately
US$24.7 million related to additions to
the mining fleet, US$22.7 million to
deferred stripping and US$11.4 million
to other mining assets. US$11.8 million
related to expansion capital. The
depreciation charge amounted to
US$27.9 million (2019: US$27.2 million).
FY2021 Planned capex (US$m)
2.1 1.6
8.8
27.4
2020
46.4
14.7
(cid:81) Mining
(cid:81) Processing
(cid:81) Optimisation and vulcan
(cid:81) Land puchases
(cid:81) Tailing storage facility
(cid:81) Other
Unredeemed capex available within the
Group for set-off against future taxable
profits amounts to US$36.5 million.
The Group generated net cash from
operations before working capital of
US$127.1 million (2019: US$54.5 million)
and, after taking into account the capex
and a free cash flow of US$43.8 million
(2019: US$26.0 million), cash on hand
amounted to US$49.3 million
(2019: US$59.2 million).
There is continued focus on working
capital management, with the current
ratio at 1.8 times.
Financial impact of COVID-19
During the South African national
lockdown imposed by the government to
help prevent the spread of the
coronavirus, operations at the Tharisa
Mine were curtailed.
Due to the global uncertainty at that
time, Tharisa engaged with its lenders to
manage its liquidity and reached
agreements with its key lenders to a debt
repayment “holiday” for a period of three
months, in some instances a capital and
interest holiday, and in other instances a
capital holiday only. In addition, major
creditors agreed to an extension of their
credit terms, increasing the period to
between 60 and 90 days. The impact of
these arrangements is reflected in the
annual financial statements.
The off-takers for the PGM concentrate
declared force majeure during the hard
lockdown period and deliveries of
concentrates were suspended. The
off-takers continued to honour their
payment terms. Subsequent to the easing
of the lockdown restrictions, deliveries of
PGM concentrate resumed.
Certain capex was incurred as additional
safety and health protocols were
implemented to ensure continued
operations. The capex spend included the
construction and equipping of an on-site
occupational healthcare facility, the
purchase of land and buildings for an
isolation and quarantine facility, and the
upgrade and equipping of this facility.
Excluding the operational costs associated
with the facilities, the capex spend was
ZAR20.6 million (US$1.2 million).
Direct and indirect taxes
Tharisa, a major employer in the region of
its flagship Tharisa Mine, is also a major
user of supply services. As part of the
Company’s assessment of its direct
financial contribution to the fiscus, the
Company has paid the following taxes in
the year under review, with employee
income tax, value-added tax (VAT), and
the fuel levy making up over 80% of the
taxes.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
25
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2020
US$’000
2019
US$’000
3 271
13 717
104
1 206
18 298
6 380
108
6 820
798
14 107
32 405
2 733
17 353
147
2 120
22 353
(7 028)
–
3 899
1 911
(1 217)
21 135
THARISA GROUP
Direct and indirect tax liability
Direct taxes
Income tax
PAYE and related payroll taxes
Farm tax and rates
Mining royalty
Indirect
VAT
Dividend withholding taxes
Fuel levy
Other
Total tax liability
Dividend
In accordance with Tharisa’s dividend policy of distributing at least 15% of annual NPAT, the Board has proposed a final dividend of
US 3.5 cents per ordinary share (17.1% payout ratio), subject to the necessary shareholder approval. The Company did not declare an
interim dividend due to the uncertainty arising as a consequence of the coronavirus pandemic and the South African national hard
lockdown at that time.
Appreciation
I would like to take this opportunity to thank our financiers, key suppliers and customers for their support during a period of such
uncertainty for all of us. This support contributed to our successful financial year.
Michael Jones
Chief Finance Officer
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26
THARISA PLC INTEGRATED ANNUAL REPORT 2020
MARKET REVIEW
South Africa is home to the world’s largest PGM and chrome resources.
The country’s mining industry is an
essential component of the global
commodity supply chain, with a particular
emphasis on the PGM and chrome
sectors, without which, major global
industries would not be able to function
as efficiently as they are.
South Africa hosts approximately 80% of
the world’s PGM and 72% of the world’s
chrome resources. These industries have
benefited from significant investment,
increased employment and community
upliftment, while the country benefits
from foreign revenue generation
According to statistics published by The
Minerals Council South Africa (of which
Tharisa is a member), employment in the
chrome industry has increased more than
70% compared to the prior decade.
PGMs – STANDOUT PERFORMER OF
THE YEAR
The overall basket price attained by
Tharisa reached record highs, notably on
the back of palladium and rhodium price
levels. The average basket price for the
year was US$1 704/oz, up from an
average price of US$1 081 for the 2019
financial year. A weaker exchange rate
caused by COVID-19 and global macro
forces, saw the PGM basket price rally to
ZAR27 691/oz for the year compared to
ZAR15 531/oz the year prior.
PGM MARKET
PGMs are vital industrial metals valued for
their durability, resistance to corrosion
and catalytic properties. The automotive
industry is the world’s largest consumer
of PGMs, which are used in catalytic
converters for vehicle exhaust systems.
Other drivers of demand are jewellery,
industrial uses and investment.
With its rich mineral wealth, South Africa
is home to the world’s largest PGM
deposits and remains the world’s principal
producer, responsible for roughly 70% of
the total refined platinum production.
Fundamentals for the platinum group
metals remain robust. Tharisa believes
that while demand has slowed,
particularly in autocatalysts as they are
directly linked to economic activity and
manufacturing supply chains, supply will
remain interrupted for longer than
anticipated as mines, in particular in
South Africa, deal with complex
recommencement of operations and
COVID-19 related disruptions.
PGM price (US$/oz)
3 000
1 500
0
7
1
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2
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2
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1
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3
0
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2
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1
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4
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1
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2
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5
0
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2
0
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1
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/
6
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1
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7
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1
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9
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2
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2
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3
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4
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5
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2
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1
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2
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2
0
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3
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2
0
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2
0
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/
4
0
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5
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6
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7
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(cid:81) Platinum $/oz
(cid:81) Palladium $/oz
(cid:81) Rhodium $/oz
16 000
8 000
0
Metallurgical chrome concentrate price (US$/t)
260
240
220
200
180
160
140
120
100
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2018
2018
2019
2019
2020
Data from Johnson Matthey sees an
interesting dynamic, where autocatalyst
demand is expected to fall by at least
15% to 20%, while in parallel PGM
supply will slow by more than 20%, as
mines shut and network disruptions lead
to a slowing in recyclable material coming
back to the market.
Tharisa is the sixth largest South African
listed PGM producer, having mined more
than 142 koz of PGMs in the past
financial year. Significantly, the
Company’s favourable prill split towards
palladium and rhodium, the latter of
which Tharisa produced over 13 500
ounces for the year, means it has an
exposure to the two PGM metals that
remain in deficit from a primary
production point of view, and rhodium
irreplaceable in the catalytic process of an
internal combustion engine process. The
increased demand for palladium, and
rhodium is likely to continue as structural
demand changes take place in
autocatalytic demand from India, China
and Europe as a result of tightening
emission standards. Further advances in
the deployment of fuel cell technology
and hydrogen economy, influenced by
the pressure to reduce carbon footprints,
should be supportive for continued
platinum demand. The above is,
notwithstanding the interruptions in the
platinum supply demand fundamentals,
as a result of the COVID-19 pandemic.
Tharisa believes in the unique properties
of PGMs, which will mean the long-term
demand for the metals remain healthy,
coupled with reduced and disciplined
producer supply of new ounces into the
market. This will underpin the balance
and ensure prices remain strong for the
next 24 months at least. Delays in
projects, together with tighter capital
markets for new developments from
proposed new entrants, will mean new
supply will be delayed.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
27
CHROME MARKET
South Africa hosts the largest chromite
reserves in the world with annual
production, measured both in local sales
and export sales, making up two-thirds of
the world’s total production. Of South
Africa’s exports, over 90% were destined
for China, with Indonesia remaining an
important new player in the downstream
chrome industry, with Tharisa supplying
some of the most modern and largest
mills in Indonesia.
With annual output of 1.34Mt in FY2020
and similar output in 2019, when
Uses of chrome concentrates
measured against the total demand of
12.5Mt of chrome ore from South Africa
to China in the year 2019, Tharisa
remains a significant player in the chrome
industry, supplying between 10% and
12% of China’s annual demand of the
metal.
The chrome market had a weak start to
the year, however, prices spiked during
the peak of COVID-19 in South Africa, as
buyers competed for material. The
average sales price achieved for the year
was US$140/t, 13.6% lower than for the
previous year.
93%
4%
Metallurgical grade
– Cr2O3 – 30% to 45%
– SO2 – <4%
– Chrome is the key
ingredient for stainless
steel
Chemical grade
– Cr2O3 – 45% to 47%
– SO2 – <1.2%
– Used to produce sodium
dichromate
2%
<1%
Foundry grade
– Cr2O3 – >46%
– SO2 – <1%
– High-thermal conductivity and
low-thermal expansion
– Moulds for metal castings
Refractory grade
– Cr2O3 – 46%
– SiO2 – <1.2%
– 98% <2 mm
– Refractory bricks for furnace
linings
CHROME END USES
Chrome ore demand is driven by
ferrochrome use, with more than 90% of
chrome ore being used for metallurgical
purposes. Approximately 4% of demand
is derived from the chemical industry and
the balance from the foundry and
refractory industries. The majority of
metallurgical grade chrome concentrate is
utilised in the production of ferrochrome.
In turn, the largest consumer of
ferrochrome is stainless steel. As such, the
dynamics in the stainless steel industry
have an impact on both the ferrochrome
and chrome ore industries.
To produce one tonne of stainless
steel requires:
CHROME ORE
0.6 tonnes
FERROCHROME
0.25 tonne
STAINLESS STEEL
1 tonne
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
PRINCIPAL BUSINESS RISKS
Tharisa regards principal business risks as issues that may, if they materialise, substantially
affect the Group’s ability to create and sustain value in the short, medium and long term.
The risks that are material, i.e. the possibility of loss or harm occurring whether
permanent in nature or causing significant damage, whether physical or financial, to
Tharisa and its stakeholders are determined by an analysis of the Group’s risks, the
external environment and the Group’s engagement with stakeholders. Material risks may
impact the achievement of the Group’s strategy. Each risk also carries with it challenges
and opportunities. The Group’s strategy takes into account known risks and these are
assessed regularly, updated and included in the organisational risk matrix.
Material risks are considered and reported on an ongoing basis by those members of the management team responsible for risk
management. The Tharisa Risk Committee comprises all members of the Board. Risks are identified in the Group Risk Register and are
considered by management on a quarterly basis and reported to the Board at least twice a year.
Mitigation of risks, whether partial or in full, forms part of management’s responsibility and is aligned with the Group’s strategy.
The following tables summarise the material risks identified by management in consultation with stakeholders and with reference to the
Group’s business model and strategy.
RISK
Safety
IMPACT
MITIGATION
Keeping people healthy is of
paramount importance to
Tharisa. Mining and processing safely is
a key performance indicator for all
executives and managers at Tharisa
Disruptions to operations pending
root cause investigations
Potential section 54 and section 55
instructions from the DMRE in
terms of the South African Mine
Health and Safety Act that impact
on production
Strive for zero-harm working environment
Implement culture of safety risk intolerance
Comprehensive training on standard operating procedures
Continuous training and adherence to global best practices
Transparent and open relationships with DMRE inspectorate
Key performance indicator in Group cash bonus scheme to
incentivise safe behaviour
Ensuring Zimbabwe operations align with Group safety standards
COVID-19 pandemic
Keeping people healthy is of
paramount importance to Tharisa
Political uncertainty
South Africa – the burgeoning
unemployment, increasing government
debt and negligible
GDP growth have led to a negative
response to political certainty
Negative business confidence
Zimbabwe – international sanctions still
exist and may affect the stability of the
economy
Hyperinflation and monetary policy
uncertainty
Negative business confidence and
policy uncertainty
Lack of currency liquidity
The impact of the COVID-19
pandemic is as yet not fully
quantifiable as the pandemic is
ongoing and no vaccine has as yet
been developed
Tharisa has put in place measures that at a minimum comply with
government regulations and adhere to best practices. Rigorous
screening and testing measures are in place. Succession planning is
in place in the event of illness. The Company has taken these steps
proactively but there are no guarantees that the measures put in
place will ensure the Company and its operations will not be
affected by the pandemic
Unattractive investment
destination(s) for international
investors
Potential for further credit rating
downgrades
Civil unrest adversely impacting
mine production
The South African government has indicated commitment and
intent in ensuring South Africa remains politically stable and that the
economy advances
Pledges by global concerns to invest in the country, which will serve
to improve business confidence, unlock investment by local concerns
and build GDP growth
Lifting of certain indigenisation restrictions in Zimbabwe has and
should attract further investment into the mining sector
The President’s willingness to attract international investment by his
declaration that “Zimbabwe is open for business”
Establishment and awarding of Special Economic Zones to assist
capital flows and investment
THARISA PLC INTEGRATED ANNUAL REPORT 2020
29
RISK
IMPACT
MITIGATION
Regulatory compliance
Tharisa Minerals’ right to mine
is dependent on strict adherence
to various legal and legislative
requirements
Non-compliance with the Mineral and
Petroleum Resources Development Act
2002 (MPDRA) and/or Mining Charter
and/or the Group’s Social and Labour
Plan.
The Group is required to comply with a
range of health and safety laws and
regulations in connection with its
mining, processing and on mine
logistics activities. Any perceived
violation of the regulations could lead
to a temporary shutdown of all
or a portion of the Group’s
mining activities.
Non-compliance with the Mines and
Minerals Act of Zimbabwe and mining
regulations promulgated under such
Act
Production/location concentration
Tharisa currently owns and operates
one primary producing asset, located
in South Africa
The Group has made early entry
investments into Zimbabwean
exploration projects. However, the
Group is still exposed to the potential
of political risk and instability within
the country of its operation
Cost of compliance to changes
in the Mining Charter
Non-compliance resulting in
potential legal sanction including
fines, penalties and risks to the
right to mine via
a forfeiture or cancellation
Capital raising hindered
Ensure compliance with current MPRDA and applicable legislation
Ensure compliance with the terms of the Mining Charter while
making use of the phasing-in period
Ensure compliance with the Group’s Social and Labour Plan
Proactive engagement with regulatory authorities and industry
organisations
Ongoing communication and awareness with investors
Ensure compliance with all relevant Zimbabwean legislation,
including the Mines and Minerals Act, Mining regulations
promulgated under section 403 of the Mines and Minerals Act, the
Labour Act, Exchange Control regulations and other laws and
enactments governing investment
Routine audits are carried out by the DMRE to ensure compliance
Regular inspections are conducted by the DMRE to ensure
compliance.
Exposure to potential
macroeconomic, social and
socio-political risks and instability
Sovereign ratings downgrades
of the country of operation can
limit the Group’s ability to raise
financing and increase the
cost thereof
Exposure to only two main
commodities
Third-party operations, such as the operations of Sibanye-
Stillwater’s K3 UG2 chrome plant, provides additional revenue from
an alternate operation
Diversification into higher grade chrome products has opened new
markets for Tharisa
Exploration projects in Zimbabwe provide geographic diversification,
as well as access to higher grade chrome products
Align strategy to identify and execute on the ability to diversify into
other commodities
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Global commodity prices and currency volatility
The Group’s revenues, profitability and
future rate of growth depend on the
prices of PGMs and chrome
The state of the world’s economies
impact on demand and market prices
for PGMs and chrome
Volatility in the ZAR:US$ exchange rate
affects the Group’s profitability, of
which South Africa’s land reform
uncertainty and effects of other
emerging markets are contributing
factors
Financing and liquidity
The activities of the Group expose it to
a variety of financial risks, including
market, commodity prices, credit,
foreign exchange and interest rate risks
Static share price trading
Downward pressure on the prices
of PGMs and/or chrome may
negatively affect the Group’s
profitability and cash flows
The Group’s reporting currency is
US$. The Group’s current
operations are predominately
based in South Africa, with a
ZAR cost base, while the majority
of the revenue stream is in US$,
exposing the Group to the volatility
and movement in the currencies
Risk of competitor product
dumping and undercutting market
prices
Significant changes in the financial
assumptions made by the Group
could impact on its ability to
continue operating and jeopardise
its ability to raise financing in the
future
Adverse impact on the ability
to raise capital for growth and
acquisitions
Monitor costs closely to ensure that the Group remains in the lowest
cost quartile
Stringent cost control
Improved operating efficiencies and production, driving down unit
costs
Service providers appointed to manage the Group’s foreign
exchange and PGM hedging strategy
Production of higher value-add specialty grade chrome concentrates
comprising 23% of Group chrome concentrate production
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Positioned as a low-cost producer of both PGM and chrome
concentrates
Production of higher value-add specialty grade chrome concentrates
Leveraging third-party operations
Diversified customers and markets
Stable Group performance assisted by free cash flows generated
from operating activities
Undrawn banking facilities
Trade finance facilities assist with working capital requirements
Secondary listing on the LSE and an additional listing on A2X in
South Africa provide additional trading platforms and increased
liquidity
Marketing and roadshow efforts have enhanced the Group’s profile
and investor awareness
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
PRINCIPAL BUSINESS RISKS CONTINUED
RISK
IMPACT
MITIGATION
Market/customer concentration
The bulk of Tharisa’s chrome
production is exported to China. This
gives the Group a significant exposure
to a single market
Proposal by the South African
government to impose a chrome tax
Customer base largely located
in China, with accompanying
exposure to Chinese markets
Environmental impacts
Tharisa is obliged in terms of
its undertaking to stakeholders,
including government, providers
of capital and the community,
to monitor, minimise and mitigate our
impact on the physical environment and
not to infringe on the rights to a safe
and healthy environment. Non-
compliance with this undertaking may
infringe on the terms of the mining
licence and the ability to continue
mining
Climate change
The Group is exposed to risks caused by
climate change, both physical changes
to the earth’s climate and investor
sentiment towards the issue of climate
change
Harm to the environment
Increased costs of remediation and
rehabilitation due to legislative
changes
Potential legal sanction and class
action suits
Poor image of mining companies
Rising temperature levels can have
an effect on the natural elements
that are required by the mine, such
as access to water
Rising temperatures will have an
effect on the physical wellbeing of
the workforce
Investor sentiment changing
towards companies that have
adopted best practice to climate
change policies
Carbon tax liabilities
Local stakeholders and communities
Tharisa Minerals’ neighbours are
impacted by its operations in terms of
dust, noise, water usage and security
The perceptions of stakeholders,
including different sections of the
community and various levels of
government, are varied and multi-
layered
Local stakeholder discontent has
the potential to disrupt operations
Safety and health of the community
Complaints to regulatory authorities
and risk of intervention
Potential for adverse litigation
Poor image of mining companies
No reliance on a dominant customer within that market
Tharisa has strategically diversified its production through the
increase of specialty grade chrome concentrates, which make up
approximately 25% of Tharisa’s total chrome production
Chemical and foundry grade chrome concentrates sold into
diversified global markets
Exploration project in Zimbabwe is focusing on higher grade chrome
products
PGM concentrate sold to leading precious metal refiners on a
long-term offtake basis
Conduct all mining and processing operations in an environmentally
responsible manner
Compliance with applicable national and local laws and regulations
Monitor compliance against Equator Principles
Financial provision for rehabilitation and mine closure
Ongoing environmental impact monitoring
In Zimbabwe, we are fully compliant with all relevant legislation
governing the environment, including the Environmental
Management Act, and legislation covering air quality, emissions,
land-use planning, soil conservation/soil improvement, waste
management, hazardous substances, hazardous waste, water quality
standards and biodiversity
Expand and implement roadmap to reducing greenhouse gas (GHG)
emission at the operations
Closer co-operation with suppliers and ensuring latest technology is
employed to reduce GHG onsite
Ongoing environmental impact monitoring
Property purchase agreements being concluded with local
landowners
Partner with government and local municipality to develop identified
land within the municipal spatial development area to which the
community may be relocated
Ongoing discussions with the DMRE and other government bodies
Positive engagements with the local community with focus on
sustainable community projects
Focus on recruiting from local communities as much as possible if
there is a skills match
THARISA PLC INTEGRATED ANNUAL REPORT 2020
31
RISK
IMPACT
MITIGATION
Access to resources and infrastructure
Tharisa’s mining, processing and
marketing operations rely on
sustainable access to water, electricity
and road and rail infrastructure
Production interruptions
Failure to meet delivery commitments
Two independent processing plants provide flexibility in
times of electricity curtailments
Multi-modal transport optionality via bulk or containers,
road and/or rail
Integrated agreement for rail transportation and port
facilities concluded with Transnet
Open-pit diesel-powered mining fleet reduces reliance on
electricity
Generators installed at the processing plants to mitigate
electrical supply curtailments
Labour
The consistent, assured availability of
appropriately skilled human resources
at economical rates is essential to the
sustainability of Tharisa’s operations.
Similarly important is the efficiency and
discipline of the Group’s workforce
Labour disruptions in South Africa
remain a risk, particularly with the
current political climate, which may
contribute to heightened labour and
community unrest
Potential damage to property
Loss of production
Monthly liaison with shop stewards and regular contact
with regional leadership
Ongoing training programmes
Adequate insurance cover in the event of damage
to property arising from unrest
All levels of employees incentivised through bonus and
incentive schemes leading to improved productivity and
employee retention
Management of resources and reserves
Management and planning of the
extraction of the multiple MG layers of
the reef are critical to the business
model
Tharisa’s success depends on it
extracting the maximum value per
tonne of reef while avoiding in-pit
dilution and undue sterilisation of the
resource
Sub-optimal quantity and quality of
reef results in poor processing plant
recoveries, which impacts on
production and financial performance
Sterilisation of resources reduces life of
mine and inhibits mining flexibility
Loss of production as a result of low
ROM stockpiles ahead of the plants
Owner mining model enables in-house management and
control of all mining activities, with focus on correct
mining practices with optimal quality and quantity of
ROM
Investment in latest technology and machinery for optimal
mining practices
In-house mining skills
Accuracy and execution of mine plan
Mining employees managed on key performance
indicators (KPIs)
Unscheduled breakdowns
The Group’s performance is reliant on
the consistent mining and production
of PGM and chrome concentrates from
the Tharisa Mine
Cybersecurity
The Group performance may be
materially and adversely impacted by a
cyber-attack on its IT system
Any unscheduled breakdown leading to
a prolonged reduction in mining and/or
production may have a material impact
on the Group’s financial performance
and results of operations
Loss of production as a result of low
ROM stockpiles ahead of the plants
Optimisation of the existing mining fleet
Developed engineering and geological skills that are
integral to in-house mining
Preventative maintenance programme for the fleet and
plant
Long-lead item spares in stock
Purchase of ROM from third parties to increase stockpiles
The processing plants at the mine are
controlled by a supervisory control and
data acquisition operating system and
a cyber-attack could potentially subject
the Group to a ransomware demand
and/or cause a shutdown of the
processing operations until a back-up
system is operational or a work-around
solution is obtained
The Group has carried out an audit of its potential
exposure to a cyber-attack in respect of all its IT and has
implemented mitigating measures that limit its exposure
to internal and third-party access.
The Group has implemented and continuously ensures
globally accepted best-in-class software and protocols to
filter malicious and criminal content, as well as the latest
antivirus and security programmes
Insurance against cyber-attacks, including back-up and
restoration assistance
Internal back-ups and scheduled back-up tests for integrity
and continuity
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
OPERATIONAL REVIEW
Tharisa’s flagship mine delivered significant
operational improvements following the
investment in the assets, the ongoing
optimisation of the pit, and the flexibility of the
processing and distribution capacity, notably
during the time of COVID-19.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
33
REEF MINED
4.97 Mt
up 7.6%
(2019: 4.62 Mt)
PGM PRODUCTION (5PGE + AU)
142.1 koz
up 1.7%
(2019: 139.7 koz)
CHROME CONCENTRATE
PRODUCTION
1.34 Mt
up 3.9%
(2019: 1.29 Mt)
Tharisa’s co-product model utilising highly
skilled workforce using modern
mechanised mining in an open pit
environment proved effective during this
difficult period.
The impact of COVID-19, along with the
national lockdowns and the disruptions
associated with the pandemic, has been
significant in South Africa, the African
continent, and globally. The ongoing
impact of the pandemic is likely to remain
for the foreseeable future and, as a
business, Tharisa has adapted accordingly,
protecting the staff, suppliers and other
stakeholders as best as possible, while
continuing to deliver on the Company’s
stated strategic targets.
COVID-19 remains a risk to the Company,
and the forecasts and guidance are
premised on the current level of
economic activity being permitted by
various governments.
Tharisa’s FY2021 production guidance is
155 koz to 165 koz PGMs (6E basis) and
1.45 Mt to 1.55 Mt of chrome
concentrates.
Reef mined
Stripping ratio
Reef milled
PGM flotation feed
PGM rougher feed grade
PGM recovery
6E PGMs produced
Platinum produced
Palladium produced
Rhodium produced
Average PGM contained metal
basket price
Platinum price
Palladium price
Rhodium price
Average PGM contained metal
basket price
Cr2O3 ROM grade
Chrome recovery
Chrome yield
Chrome concentrates produced
(excluding third party)
Metallurgical grade
Specialty grades
Third-party chrome production
Metallurgical grade chrome
concentrate contract price
Metallurgical grade chrome
concentrate contract price
Average exchange rate
Unit
kt
m3: m3
kt
kt
g/t
%
koz
koz
koz
koz
US$/oz
US$/oz
US$/oz
US$/oz
ZAR/oz
%
%
%
kt
kt
kt
kt
US$/t CIF China
ZAR/t CIF China
ZAR:US$
2020
2019
4 971.1
12.1
5 036.1
3 765.9
1.46
80.1
142.1
78.7
23.0
13.5
1 704
876
2 147
8 348
27 691
18.2
62.1
26.7
1 344.8
1 023.2
321.6
169.8
140
2 231
16.2
4 627.1
8.3
4 836.0
3 605.9
1.47
82.1
139.7
77.0
23.6
13.2
1 081
840
1 415
3 018
15 531
18.1
62.0
26.7
1 290.0
977.9
312.1
241.1
162
2 525
14.4
THARISA MINERALS
Tharisa Minerals is 74% owned by
Tharisa and is uniquely positioned as the
world’s only co-producer of both PGMs
and chrome concentrates. Tharisa
Minerals’ core asset is the Tharisa Mine,
which is situated on South Africa’s
Western Limb of the Bushveld Complex –
home to more than 70% of the world’s
platinum and chrome resources.
Tharisa Minerals mines and processes five
MG Chromitite Layers. Through
innovative engineering, the mined reef is
processed at two independent integrated
plants extracting both PGMs and chrome
concentrates. This reduces unit costs and
positions Tharisa Minerals in the lowest
cost quartile of operating costs in South
Africa for both PGMs and chrome
concentrates.
Tharisa Minerals’ low unit costs and
multiple polymetallic products have
ensured that it is well placed to manage
commodity price volatility and exchange
rate volatility.
Its dual revenue streams provide a natural
hedge against different commodity cycles
with the products being used in different
applications.
Safety
Tharisa acknowledges that the safety of
its people is critical to its success. The
LTIFR for FY2020 was 0.09 (2019: 0.27)
per 200 000 man hours worked. The
mine achieved five years fatality free and
four million fatality-free shifts.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
OPERATIONAL REVIEW CONTINUED
Mining operations
Tharisa Minerals holds a Mining Right
over 5 475 ha of land near the town of
Rustenburg in the North West province of
South Africa. The Mining Right was
granted on 19 September 2008 for an
initial period of 30 years, providing access
to MG Chromitite Layers, which outcrop
with a strike length of approximately
5 km.
The Tharisa Mine has a remaining open
pit life of 14 years with a projected
40-year underground mining operation.
The open pit is divided into the east pit
and west pit, and extracts reef from five
MG Chromitite Layers.
Mining (Mtpa)
7.0
6.0
5.0
4.0
8
4
.
0
5
.
9
4
.
7
4
.
9
4
.
3.0
2.0
1.0
0.0
2016
2017
2018
2019 2020
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
(cid:81) Reef mined (Mtpa) (cid:81) Stripping ratio (m3:m3)
Tharisa transitioned from a contractor
mode to an owner-operator mining
model two years ago. In FY2019, the
Company redesigned the open pit of the
Tharisa Mine, in order to ensure optimal
use of our non-renewable resource.
Despite the impact of COVID-19 on the
mining and processing operations of the
Tharisa Mine, the reconfiguration
contributed to the mine improving
operationally on all metrics.
Plant feed (Mt)
PGM production (koz)
5.2
5.1
5.0
4.9
4.8
4.7
4.6
4.5
15.2
155.0
100.0
.
1
5
0
5
.
9
4
.
9
4
.
7
4
.
2016
2017
2018
2019 2020
5.1
5.0
4.9
4.8
4.7
4.6
4.5
150.0
145.0
140.0
135.0
130.0
125.0
120.0
.
2
2
5
1
.
6
3
4
1
.
1
2
4
1
.
7
9
3
1
.
6
2
3
1
2016
2017
2018
2019 2020
90.0
80.0
70.0
60.0
50.0
40.0
30.0
(cid:81) Plant feed (Mtpa) (cid:81) Nameplate capacity (Mtpa)
(cid:81) PGM production (kozpa) (cid:81) PGM recovery (%)
Tharisa Minerals’ mining division mined
4.9 Mt of ROM for FY2020, a 7.4%
increase year on year. These volumes
were attained while increasing the mine’s
stripping ratio to 12.1 m3:m3, well ahead
of the LOM requirements of 9.8 m3:m3,
further increasing access over the reef
systems. The opening of the pit, which
has seen bench lengths increase, has also
meant improved flexibility in the reef mix
fed into both metallurgical plants, with
over 360 kt of ROM stockpile ahead of
the plant at the end of the financial year.
Processing
The PGMs in the MG ore mined by
Tharisa Minerals occur in the silicates and
are not associated with the chromite,
thus enabling the process to extract
chrome before PGMs without sacrificing
PGM recovery.
This lowers the chrome content in the
PGM circuit and results in much lower
chrome content in the PGM concentrate
compared to typical UG2 operations.
Base metal content in the MGs is also
significantly lower than Merensky and
UG2 ores, resulting in a low matte fall
during smelting, reducing base metal
refining requirements.
Tharisa Minerals’ two independent
processing plants are designed specifically
to treat the MG Chromitite Layers of the
Bushveld Complex. The smaller 1.2 Mtpa
Genesis Plant, with the 100 ktpm chrome
circuit, was commissioned in August
2011 with the PGM circuit being
commissioned in December 2011. The
larger 3.6 Mtpa Voyager Plant was
commissioned in December 2012. Both
plants operate at above nameplate
capacity and milled 5 Mt collectively.
The plants have a similar process flow
that includes crushing and grinding,
primary removal of chrome concentrate
by spirals, followed by PGM flotation
from the chrome tails and a second spiral
recovery of chrome from the PGM tails.
Operating in parallel, the independent
plants provide processing flexibility and
production stability by allowing one plant
to be shut down without hampering the
production of the other. The modular
design of the processing circuits allows
sections of the plant to be stopped
without affecting the rest of the
operation (i.e. a crushing circuit can be
stopped independently of the milling,
spiral and flotation circuits).
Using off-the-shelf technology, the
processing circuits are uniquely
engineered to produce both PGM and
chrome concentrates. This innovative
approach to production has made Tharisa
THARISA PLC INTEGRATED ANNUAL REPORT 2020
35
a world-class PGM and chrome
concentrate co-producer.
The PGM rougher feed grade was steady
for the year at 1.46 g/t, while the Cr2O3
ROM feed grade was marginally up at
18.2% for the year.
Tharisa targets recoveries of 85% for
PGMs and 65.0% for chrome. In FY2020
PGM recoveries were 80.1% while
chrome recoveries were 62.1%.
During the year, the Group produced
PGM concentrates containing 142.1 koz
of contained PGMs (5PGE + Au) and
chrome concentrates of 1.34 Mt with
321.6 kt being specialty grade
concentrates. Third-party chrome
concentrate produced was 169.8 kt.
Specialty chrome recovery circuits are
integrated into the feed circuit of the
Genesis Plant, known as the Challenger
Plant. The Challenger Plant, which is
owned by fellow subsidiary Arxo Metals,
was commissioned in July 2013 and
produces chemical and foundry grade
chrome concentrates.
Production of specialty grade
concentrates accounted for 23.9% of
Tharisa’s chrome production in FY2020,
and will be maintained at current levels to
ensure that it maintains a strategic
market share.
The previously announced projects aimed
at optimisation to the crushing circuit and
PGM recoveries have been completed.
Vulcan Plant
Tharisa’s R&D team has developed the
Vulcan process to extract the fine chrome
from current in-line tailings from the
combined feed of the Genesis and
Voyager Plants. The primary aim of the
Vulcan Plant is to increase chrome
recovery from the current 65% target to
82% at the Tharisa Mine, capable of
adding an additional 400 ktpa (ca. 25%
of current production) of chrome
concentrate output. The Vulcan process
utilises existing technologies to improve
chrome recoveries, with the process
having been rigorously tested and proven
through pilot plant test work and the
operation of a production scale
demonstration plant. The total capital
cost of US$54.2 million includes
contingency and owner’s cost.
This project was approved and
commenced at the end of FY2019. The
lockdown, which affected South Africa
from March 2020, meant this project was
put on hold as economic activity was
limited. Project restart was approved at
the end of FY2020 following the
relaxation of economic activity in South
Africa, with anticipated completion in 12
months using internal cash flows and
available facilities to finance the
construction.
Sales and marketing
The Group’s market advantage is its
exposure to both the PGM and chrome
markets. This dual exposure gives the
Group a hedge against volatility in either
of the commodity prices.
Tharisa Minerals continues to supply the
majority of its PGM concentrate to Impala
Platinum in terms of its offtake
agreement and is paid a variable
percentage of the contained PGMs
and base metals contained within each
tonne of concentrate in terms of an
agreed market formula. The remainder
of the PGM concentrate is sold to
Sibanye-Stillwater.
The PGM basket price improved by
57.6% to US$1 704/oz in FY2020.
Chrome concentrate sales totalled
1.34 Mt, 321.6 kt of which was Tharisa’s
higher margin specialty chemical and
foundry grade chrome concentrates. The
bulk of Tharisa’s sales are derived from
metallurgical grade chrome concentrate,
which included 169.8 kt of third-party
chrome concentrates.
Specialty grade chrome concentrates
produced within the Group are sold in
terms of an agency and offtake
agreement. The chemical grade chrome
concentrate is jointly marketed by Tharisa
and an independent third party.
Spot metallurgical chrome concentrate
prices were volatile during the financial
year, but overall lower than in the
previous two years. Prices received ranged
between US$170/t and US$113/t, with
the average price for metallurgical grade
chrome concentrate on a CIF main ports
China basis, decreasing in US dollar terms
from US$162/t to US$140/t the previous
year.
The production of the higher value
specialty chrome concentrates, which
typically command a premium of US$30/t
to US$50/t, provided additional margin.
The Group continued to deliver
metallurgical grade chrome concentrate
in terms of its five-year strategic
co-operation agreement with Taiyuan Iron
& Steel’s (Tisco’s) joint venture company
Shanxi Taigang Wanbang Furnace Charge
Co. In terms of the agreement, which
was effective as of September 2017, Arxo
Resources will supply Tisco with a
minimum of 240.0 ktpa of metallurgical
grade chrome concentrate at a market-
related price.
Metallurgical chrome production, at a
market-related price, is shipped in bulk
and containers via South African ports to
major stainless steel and ferrochrome
producers in China and Indonesia.
Arxo Metals
Arxo Metals owns the Challenger Plant,
which is integrated into Tharisa Minerals’
Genesis Plant. The Challenger Plant is
dedicated to the production of chemical
and foundry grade concentrates.
Specialty grade concentrates carry more
stringent specifications and therefore
fetch a higher selling price. Arxo Metals
has an offtake agreement for the sale of
its concentrates to customers in the
chemical and foundry industries globally.
Arxo Metals accounted for 83.9 kt of
chemical grade chrome concentrate
(2019: 64.3 kt) and 30.1 kt of foundry
grade chrome concentrate (2019: 15.5 kt)
in FY2020.
In August 2017, Arxo Metals entered into
an agreement with now Sibanye-
Stillwater on the operation of its K3 UG2
chrome plant and for the sales and
marketing of the UG2 chrome
concentrate produced. Arxo Metals
unlocks greater value from the K3 UG2
chrome plant using innovative processing
already in use at our operations. The
chrome production for FY2020 from the
K3 UG2 chrome plant was 169.8 kt,
down from 241.1 kt in FY2020, as a
result of the stoppage due to the
stoppage of the operation for several
months due to COVID-19 curtailments.
Arxo Metals is also the beneficiation,
research and development arm of the
Group. Arxo Metals conducts extensive
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
OPERATIONAL REVIEW CONTINUED
research into technologies and
downstream beneficiation opportunities
that have the potential to improve yields
and recoveries at the Tharisa Mine. The
creation of increased value PGM and
chrome products through the expansion
and optimisation of the Group’s
processing operations is its core focus.
Arxo Metals has commissioned a 1 MW
DC furnace, operated by Tharisa
Minerals, which produces PGM alloy, and
is continuing its research work into
refining processes.
Arxo Metals continues to evaluate
low-capital, low-energy, value-adding
beneficiation projects through in-house
research and development.
Arxo Resources
Arxo Resources has the exclusive right to
sell the metallurgical grade chrome
concentrate produced by Tharisa Minerals
to customers in China and other
international markets. It has established a
strong platform with global customers in
China, including stainless steel and
ferrochrome producers, as well as global
commodity traders.
Arxo Resources has a marketing
agreement with Noble, a global
commodities trading company listed on
the Singapore Stock Exchange, whereby
Noble acts as an agent for the marketing
of metallurgical grade chrome
concentrate produced by Tharisa
Minerals.
Arxo Resources also has a joint marketing
agreement for Tharisa Minerals’ chemical
grade chrome concentrate production.
In FY2020, Arxo Resources sold 1.17Mt
(2019: 1.1 Mt) metallurgical grade
chrome concentrates, of which 1.0 Mt
was produced by Tharisa Minerals.
The scale of Arxo Resources’ operations
allows for direct access to market and
price discovery. Its established contacts
with customers also directly creates an
excellent platform for additional sales of
third-party products.
Arxo Logistics
Arxo Logistics provides an integrated
logistics platform that reduces the risk
and costs of transporting concentrates. It
manages the road transportation of
Tharisa’s PGM concentrates to Impala
Platinum and the long haul transportation
of chrome concentrates from the Tharisa
Mine and K3 UG2 chrome plant to
international customers through bulk and
container shipping. Exports take place via
the Richards Bay Dry Bulk Terminal and
the Durban container port on the South
African coast.
Arxo Logistics has a good relationship
with both South Africa’s transport
parastatal, Transnet, and the port
authorities. Arxo Logistics has the
exclusive use of the Marikana railway
siding for chrome exports.
Arxo Logistics shipped a total of 1.45 Mt
(2019: 1.1 Mt) of chrome concentrate in
FY2020, mostly to main ports in China,
including third-party materials.
Of this, 99.6% was shipped in bulk,
which is preferred by customers due to
ease of handling and reduced port
charges, as well as reduced levels of
administration.
The logistics arm of the Group has the
necessary road and rail transport capacity,
warehousing facilities and port facilities at
the Richards Bay Dry Bulk Terminal and
the Durban container port to manage
Tharisa Minerals’ full production capacity.
It also serves as a platform from which
the Group can provide services to
additional third-party customers.
Arxo Logistics provided third-party
logistics services during the year under
review and is planning to expand this
service offering in the year ahead.
MetQ
MetQ Proprietary Limited, a manufacturer
of equipment principally for the mining
industry, was acquired by Tharisa with
effect 1 October 2019. The Company has
a 40-year track record of supplying
specialist processing equipment to the
mining industry, with a number of
long-term clients. The business
contributed US$2.0 million in revenue
to Tharisa for FY2020
Exploration projects
The Great Dyke in Zimbabwe is a
geological feature of great significance,
as it hosts the world’s second largest
deposits of PGMs and chrome, outside of
South Africa’s Bushveld Complex. The
Great Dyke is over 550 km long and up
to 11 km wide. There are two mineralised
horizons, namely the main sulphide zone
(MSZ) and the lower sulphide zone (LSZ).
Mining operations located on the Great
Dyke exploit the MSZ, while the LSZ is
largely under explored.
Karo Holdings
In June 2018, Tharisa acquired a 26.8%
shareholding in Karo Holdings. Karo
Holdings entered into an investment
agreement with the Republic of
Zimbabwe on 22 March 2018, in terms of
which Karo Holdings has undertaken to
establish an integrated PGM mining
complex.
Karo Platinum, an indirect subsidiary of
Karo Holdings, applied for and was
awarded PGM rights under a Special
Grant under the Zimbabwe Mines and
Minerals Act, covering an area of 23 903
ha. The licence area is situated on the
Great Dyke in the Mashonaland West
District of Zimbabwe. This area of land
had been released by Zimbabwe Platinum
Mines (Private) Limited from its mining
lease area in support of the government
of Zimbabwe’s efforts to enable
participation by other investors in the
country’s platinum mining industry. In
terms of the Special Grant, Karo Platinum
will be entitled to mine PGMs situated
within the licence area. Karo Platinum will
be responsible for the mine development
and mining operations, which will deliver
ROM ore to Karo Refining.
Most recently Karo Platinum completed
238 boreholes, comprising 32 400 m
drilled. Drilling has focused on the
western boundary of the Great Dyke,
with average depths of 50 m to 150 m
below surface targeted. Significantly, the
Zimbabwe Special Economic Zones
Authority has declared a portion of
Selous, measuring 50 667 hectares, as a
special economic zone. The zone is
located on certain pieces of land covered
by special mining grants issued to a
subsidiary of Karo Holdings. The second
phase of drilling has commenced
following partial lifting of COVID-19
restrictions.
Salene Chrome
Tharisa was granted a call option to
acquire a 90% shareholding in Salene
Chrome. Salene Chrome was awarded
three Special Grants covering an area of
THARISA PLC INTEGRATED ANNUAL REPORT 2020
37
approximately 9 500 ha on the eastern
side of the Great Dyke in Zimbabwe. The
Special Grants entitle Salene Chrome to
mine the minerals thereon, including
chrome, being at-surface chrome fines
generated from seams as a result of
weathering.
In the year under review, Salene Chrome
completed 78 boreholes or 3 000 m of
drilling, the ultimate aim being the
mining of surface and gravity separation,
with lumpy product being sold to local
off-takers.
Outlook
Tharisa’s co-product model utilising highly
skilled workforce using modern
mechanised mining in an open pit
environment proved effective during this
difficult period. Increased mine
development over the past year positions
the mine to continue its strong operating
performance into this coming year, with
the cost base unlikely to be impacted by
above inflationary increases. COVID-19
remains a risk to the Company and the
forecasts and guidance are premised on
the current level of economic activity
being permitted by various governments.
Tharisa’s FY2021 production guidance is
155 koz to 165 koz PGMs (6E basis) and
1.45 Mt to 1.55 Mt of chrome
concentrates.
PRODUCTS
The Tharisa Mine produces the following
products:
PGM concentrate: PGM concentrate is
produced from both processing
facilities. The concentrate produced
from the Voyager Plant is a higher
grade than the concentrate from the
Genesis Plant, due to the different
chromitite reefs treated by the
respective plants. The major
component of the PGMs is platinum,
followed by palladium and rhodium.
Average market price
Platinum
Palladium
Rhodium
FY2020
US$/oz
876
2 147
8 348
FY2019
US$/oz
840
1 415
3 018
Change
%
4.3
51.7
176.6
Metallurgical grade chrome concentrate: The typical metallurgical grade produced by
Tharisa is 40.0% to a 42.0% chrome (as Cr2O3) with the silica (SiO2) lower than 5.0%.
Chemical grade chrome concentrate: The typical chemical grade produced by Tharisa is
44.0% to 46.0% Cr2O3 with the SiO2 lower than 1.0%. This is a higher value chromite
product than the metallurgical grade chrome concentrate.
Foundry grade chrome concentrate: The typical foundry grade produced by Tharisa is
45.0% to 46.0% Cr2O3 with the SiO2 lower than 1.0%. The American Foundryman
Society Grain Fineness Number (AFS Number) is managed between 45 and 50. As with
the chemical grade chromite, this is a higher value chrome concentrate than the
metallurgical grade chrome concentrate.
Average chrome price
42% metallurgical grade
Chrome production (Mt)
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1
1
.
0
1
.
0
1
.
0
1
.
0
1
.
4
0
.
3
0
.
3
0
.
3
0
.
3
0
.
2016
2017
2018
2019 2020
(cid:81) Speciality production (Mtpa)
(cid:81) Metallurgical production (Mtpa)
(cid:81) Chrome recovery (%)
100.0
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
FY2020
US$/t
140
FY2019
US$/t
162
Change
%
(13.6)
Prill split (%)
18.9
9.5
2020
55.4
16.2
(cid:81) Pt
(cid:81) Pd
(cid:81) Rh
(cid:81) Ir, Ru and Au
Tharisa chrome production split (%)
11.2
21.2
2020
67.6
(cid:81) Tharisa metallurgical
(cid:81) Tharisa specialty grade
(cid:81) Third-party product
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY
SAFETY
0
FATALITIES
0.00
FATALITY FREQUENCY RATE
5 Years Fatality Free
SAFETY MILESTONES
22
MEDICAL
TREATMENT CASES
4
LOST-TIME INJURIES
0.00
TARGET LTIFR
HEALTH
3 842
EMPLOYEES AND CONTRACTORS
VOLUNTARILY
TESTED FOR HIV/AIDS
504
EMPLOYEES WHO
TESTED POSITIVE FOR HIV/AIDS
14%
HIV/AIDS PREVALENCE RATE AMONG
EMPLOYEES
AND CONTRACTORS
10 724*
NUMBER OF COVID-19 SCREENINGS
4 715
EMPLOYEES AND CONTRACTORS
SCREENED FOR TB/SILICOSIS (VIA
MEDICAL SURVEILLANCE
PROGRAMME)
4 715
EMPLOYEES AND CONTRACTORS
WHO UNDERWENT HEARING
TESTS (VIA MEDICAL
SURVEILLANCE PROGRAMME)
ENVIRONMENT
185 807 MWh
TOTAL ENERGY CONSUMPTION
82 829 tCO2e
TOTAL CO2 EMISSIONS (SCOPE 1)
US$17.3 m
CUMULATIVE
REHABILITATION PROVISION
1 290 346 m3
TOTAL WATER CONSUMPTION
38.2 m litres
TOTAL DIESEL USAGE
637.4 tonnes
DOMESTIC WASTE
Data is applicable to Tharisa Minerals for FY2020
Medical surveillance programme includes initial, periodic and exit medicals for employees and contractors
* As at 1 December 2020
THARISA PLC INTEGRATED ANNUAL REPORT 2020
39
The goal of zero harm is of the utmost importance to Tharisa and takes precedence over
all production objectives. In order to achieve this, the business is reliant on sound safety,
health and environmental monitoring systems and procedures, and a competent, trained
and committed workforce. Tharisa in turn is committed to explore, mine, process, market
and distribute our products to customers and stakeholders without compromising on our
goal of zero harm.
obtained. This added to the success rate,
as employees with symptoms, as well as
co-contacts, could be quarantined to
prevent the spread of the disease. Tharisa
also adopted a zero-tolerance approach
in this regard. Any possible contact was
immediately blocked from site and
quarantined at the onsite facility or
self-quarantined until the results were
available and the employee was declared
fit to return to work by the Occupational
Medical Practitioner.
Tharisa Minerals introduced their onsite
Occupational Health Centre, with
state-of-the-art medical equipment, on
1 August 2020, where employees could
undergo medical examinations to ensure
compliance with its annual medical
surveillance programme. All mining and
processing employees, including
contractors, undergo an annual medical
fitness examination and complete annual
induction training to ensure they stay
abreast of any changes in procedural
requirements.
Tharisa Minerals has taken extra care to
ensure its processes and policies are
adhered to and that employees are kept
well informed of potential health and
safety hazards through continual
communication and training. On return
to work after the lockdown, supervisory
training and holding supervisors
accountable for their actions continued.
Throughout the year, the focus was on
the quality of incident investigations and
ensuring that all incidents were reported
for investigation in order to ensure that
corrective and preventive actions focused
and on eliminating, redesigning and
Tharisa Minerals continued to deliver an
exemplary safety performance during
FY2020. Tharisa Minerals achieved its
four million fatality-free shifts on 19 June
2020. The Mine in total celebrated its
five-year fatality-free performance on
28 September 2020. The Process division
celebrated 6 000 fatality-free production
shifts on 28 April 2020.
Tharisa is pleased to report that there
have been no fatalities during FY2016,
FY2017, FY2018, FY2019 and FY2020.
At 30 September 2020, Tharisa Minerals
achieved 38 545 082 fatality-free hours
and 4 335 571 fatality-free shifts.
Although there was uncertainty in the
2020 financial year after the COVID-19
pandemic outbreak, Tharisa Minerals rose
to the challenge. While there was a shift
in focus for the larger part of the year,
Tharisa continued to ensure employees
and contractor employees remained
compliant in terms of company
procedures and requirements. Tharisa
established a COVID-19 Committee to
ensure compliance with newly required
regulations with regards to COVID-19.
No stone was left unturned to ensure a
safe, healthy, and compliant environment
for all employees and to ensure
employees remain focused during these
trying times. A status quo shift was
required with a COVID-19 Command
Centre established and a COVID-19
Officer being appointed to monitor
compliance of the workforce as regulated
by the Disaster Management Act. All
employees went through rigorous
screening and COVID-19 induction, prior
to return to work after the COVID-19
lockdown period.
A COVID-19 quarantine facility and clinic
were established where employees with
COVID-19 symptoms could be tested and
quarantined until their results could be
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY CONTINUED
separating risks in line with the hierarchy
of controls. Where injuries occurred,
Tharisa Minerals’ focus was on
completing effective investigations and
root cause analysis to prevent repeat
incidents. For full details on all the
preventative measures Tharisa has
implemented, please go to https://www.
tharisa.com/pdf/covid-19/covid-19-
presentation-of-compliance.pdf.
The Group employs a safety management
system. The system requires a baseline
risk assessment to identify the major risks
at the operations. These risks are then
examined further by conducting
issue-based risk assessments and
continuous risk assessments with the
identification of appropriate control
measures to mitigate these risks.
Measures include standards and
procedures updates, operating checklists,
as well as training lesson plans. To ensure
compliance, a system of “over-
inspection” by supervisors and safety
staff is implemented. Further mitigation
measures include visible felt leadership
and ongoing training.
As required by South African regulations,
Tharisa Minerals has established a mine
Safety, Health and Environment (SHE)
Committee. The SHE Committees, at
both the holding company and operating
subsidiary levels, are responsible for
overseeing compliance with health and
safety legislation and policies. The
committees approve and implement all
mandatory codes of practice and
procedural requirements as determined
through the risk assessment process and
ensure relevant training is conducted on
these requirements. Safety staff oversee
inspections of workplace performance
and site conditions, and identify and
allocate any necessary corrective actions.
Tharisa remains committed to the health
of its employees and has implemented a
number of programmes to facilitate
wellbeing among those who work for the
Group. Chief among these programmes
is Tharisa Minerals’ occupational health
programme, which has as its key focus
tuberculosis (TB), HIVV/AIDS, dust
exposure and noise-induced hearing loss.
TB and HIV/AIDS are being addressed via
a strong focus on prevention through
education and awareness initiatives.
Antiretroviral treatment (ARV) is offered
through state-funded and medical
aid-funded resources to eligible persons.
The programme is managed through
Tharisa’s wellness service provider.
The HIV prevalence rate among Tharisa
Minerals’ own employees is 14%. The
prevalence rate including contractors is
also at 14%. This information is derived
from medical examinations, which all
employees undertake (initial, periodical
and exit medicals) including contractors,
and are encouraged to undergo voluntary
counselling and testing (VCT). Due to
COVID-19, Tharisa Minerals did not host
a Wellness Day this year and VCT was
offered to employees during annual
medical examinations. Every employee
who tests positive is provided with
counselling and is encouraged to
participate in the ARV programme.
The Tharisa Minerals Thusanang Wellness
Programme has been running since
December 2011 with the aid of Calibre
Clinical Consultants (Calibre).
“Thusanang” is a Setswana word
meaning “helping each other”. The
programme was designed to provide
support, counselling and training to
employees, their families, and the
community about their lifestyle, wellbeing
and work environments. During the
COVID-19 pandemic, the Wellness
Programme was utilised to assist
employees and their families through a
COVID-19 Hotline. Employees could
utilise this Hotline to receive information
on COVID-related symptoms and obtain
assistance on what to do if they
experience any symptoms. Counselling
and support was offered through this
programme to employees and family
members exposed to COVID-19.
The Tharisa Minerals’ Peer Educator
Programme was launched in September
2012. The course trains a group of
employees who champion the
programme and provide further wellness
education to employees and the
community. Tharisa Minerals has 30
active peer educators and 42 trained peer
educators. In 2020, the peer educators
underwent annual refresher training, as
well as COVID-19-related training in order
to raise awareness and to support
employees.
HEARING
The Mine Health and Safety Committee
(MHSC) 2025 Health and Safety
Milestones stipulate that no employee’s
standard threshold shift (STS) should
exceed 25 dB from the baseline when
THARISA PLC INTEGRATED ANNUAL REPORT 2020
41
averaged over 2 000 Hz, 3 000 Hz and
4 000 Hz in one or both ears from
December 2016. This milestone is
monitored during annual medical
examinations. High-noise zone areas have
been identified and Tharisa Minerals
ensures that personnel working in these
high-risk areas are issued with
personalised hearing protection. These
high-noise zones are assessed and
updated regularly. The issuing of
personalised hearing protection has been
extended to the medium-risk areas.
Safety staff oversee inspections of the
high-noise zones to ensure compliance
with the wearing of hearing protection in
the zones identified.
All cases of noise-induced hearing loss
have been investigated and reported to
the DMRE as per the legislated
requirements.
The MHSC has also set a December 2024
target where the total operational or
process noise emitted by any equipment
must be below 107 dB (A). Tharisa
Minerals has achieved this target.
Continuous hygiene monitoring is done
to ensure compliance. Procurement and
Engineering staff continue to ensure that
all new equipment meets this
requirement.
TUBERCULOSIS
The Tharisa Minerals Thusanang Wellness
Programme actively campaigns for the
awareness of TB and its symptoms. These
campaigns encourage all employees,
including contractors, to participate in
screening.
The MHSC’s 2025 milestones aim to
reduce the rate of TB among
mineworkers to the national incident rate
or below.
Tharisa Minerals’ interventions to address
and reduce TB among its workforce
include increased TB screening, TB
awareness campaigns, questionnaires to
identify symptoms, and the enlisting of
trade union involvement in and
commitment to improving
TB awareness and lowering incident rates
among employees and their families.
TB screening is done on an ad-hoc basis
and during the occupational medical
examinations. Sputum tests are
conducted on employees who are
potentially at risk of having TB.
To further prevent the spread of TB,
contact screening is done on employees
who may have been exposed to the
disease by being in contact with other
employees working in the same exposure
group.
All cases of TB have been reported to the
Medical Bureau of Occupational Diseases,
Compensation for Occupational Injuries
and Diseases, and the DMRE as per the
legislated requirements.
HIV
As legislated, HIV testing at Tharisa
Minerals is voluntary; however, all
employees undergo counselling, prior to
voluntary testing. Tharisa Minerals
actively campaigns to increase awareness
of HIV, its cause, its symptoms and
treatment. All employees, including
contractors, are encouraged to participate
in the screening.
All of Tharisa Mine’s employees are
offered haematocrit blood tests annually,
through the medical surveillance
programme, and all eligible employees
are counselled and asked whether they
would like to join an ARV programme,
which is run and managed by the
third-party service provider, Calibre.
Tharisa Minerals, the Occupational
Medical Practitioner, and Calibre work
together to increase the uptake of ARV.
These interventions include pre- and
post-test counselling, awareness
programmes, and roadshows and are a
focus of the Peer Educator Programme.
HIV statistics are based on HIV testing
done during medical examinations.
Tharisa Minerals Community Peer
Educator continues to conduct home
visits in the community and health
campaigns are conducted in the
community by the service provider. The
main objective is to help prevent the
spread of HIV in our community. This is
done through community outreach and
the distribution of HIV and TB
information, as well as information on
where to seek assistance. The Tharisa
Mine also distributes condoms in places
like community shops and taverns.
SILICOSIS
In compliance with the MHSC 2025
Health and Safety Milestones, levels of
respirable crystalline silica have to be
reduced in 95% of all individuals (not
averages) to below occupational exposure
limits (OEL) of 0.05 mg/m3 by December
2024. Tharisa Minerals is monitoring
respirable crystalline silica levels through
its Occupational Hygiene monitoring
programme and by issuing quality dust
masks to its workforce. Mask wearing is
monitored during visible field leadership
and SHE inspections. Tharisa Minerals
complies with the 95% milestone as
stipulated.
WELLNESS CAMPAIGNS
Focus was on COVID-19 training and
awareness campaigns, while other
interventions include:
Sexually transmitted
infection (STI) and
HIV awareness
presentation
TB
Hypertension
Cholesterol
February 2020
March 2020
August 2020
September 2020
AN INNOVATIVE APPROACH TO
SAFETY PERFORMANCE
Over the last four years, Tharisa has
evolved its safety culture from one of
compliance to one that places the
individual at the heart of safety, as part of
a system, which sees safety driven by
values. This innovative approach differs
from industry norms in that it allows
individuals to own their safety
programme. Tharisa’s focus for 2020 was
moved from SLAM (Stop, Look, Analyse
and Manage) to SLAF (Stop, Look, Assess
and Fix), where employees pledged: “IF IT
IS NOT SAFE I WILL NOT DO IT!”.
Employees were encouraged to take a
stance on safety and own their safety in
the workplace. Tharisa Minerals
introduced #proudlyTharisa to their
workforce in order for employees to take
pride in their work and their compliance.
This campaign is monitored through SHE
compliance audits and a disciplined
approach.
By following this innovative approach
over the last four years, Tharisa Minerals
achieved a lost-time injury frequency rate
(LTIFR) of 0,06/200 000 man hours
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY CONTINUED
worked. We endeavour to continue on
this road in order to achieve our goal of
Zero Harm.
ENVIRONMENT
Mining by its very nature has an impact
on the environment. Tharisa aims to
manage and mitigate its impacts in an
environmentally responsible manner and
to ensure the wellbeing of all
stakeholders. Growing regulatory and
social pressures, increasing demands for
limited and threatened natural resources,
and changing energy and water costs all
highlight the business imperative of
responsible environmental management.
TOTAL ENERGY CONSUMPTION
185 807 MWh
TOTAL CO2 EMISSIONS (SCOPE 1)
82 829 tCO2e
CUMULATIVE REHABILITATION
PROVISION
US$17.3 m
TOTAL WATER CONSUMPTION
1 290 346 m3
Environmental management involves
taking measures not only to address
security of resource supply (through
efficiency and recycling), but also to
actively minimise the Group’s impacts on
natural resources and on the communities
around its operations. Taking such
measures has direct benefits in terms of
reduced costs and liabilities, enhanced
resource security, and improved security
of its licence to operate.
Tharisa Minerals’ Environmental
Management Programme (EMP) aims to
minimise its impact on the natural
environment and reduce its consumption
of scarce natural resources. Tharisa
believes that its commitment to
responsible mining and beneficiation
helps it achieve its strategic goals and
also establishes a sustainable competitive
advantage.
A precautionary approach is exercised in
all processes and include the exploration,
planning, licensing, construction,
operation, closure and rehabilitation
stages of all operations and projects.
Tharisa Minerals has the relevant and
applicable environmental authorisations
required for its operating licence to
operate,including an approved and
amendedEMP in terms of the MPRDA, a
positiveRecord of Decisions in terms of
theNational Environmental Management
Act(No. 107 of 1998) (NEMA) and an
Integrated Water Use Licence (IWUL)
under the National Water Act (No. 36
of 1998) (NWA).
Tharisa’s material environmental matters
are:
(cid:3)(cid:79) Resource management, particularly
energy use and water availability
(cid:3)(cid:79) Land management, including
biodiversity conservation, rehabilitation,
and closure planning
(cid:3)(cid:79) Environmental compliance – ensuring
that operations remain legally
compliant with new and incoming
legislation requirements
(cid:3)(cid:79) Managing and minimising waste
streams
(cid:3)(cid:79) Implementation of the new regulations
on financial provisions for rehabilitation
– ensuring compliance and appropriate
funding mechanisms to adequately
provide for concurrent rehabilitation,
as well as rehabilitation at mine
closure and post-closure stages, to
be implemented by February 2021
(as per the South African regulations)
(cid:3)(cid:79) Climate change and the effects thereof
– greenhouse gas emissions and
carbon tax.
Water management remains a key
challenge for Tharisa Minerals’
operations. While water scarcity is
currently not a challenge, it does pose a
potential constraint on production and
future expansion. Water availability is also
a concern for local communities. The
reliability of current water infrastructure
and the long lead-time in rolling out new
infrastructure is a risk for current
operations and future expansion plans.
Tharisa Minerals is also dependent on a
reliable and sufficient supply of energy
with applicable internal energy efficiency
plans in case of emergency or unplanned
cut-offs. Interruptions to energy supply
have the potential to affect production
efficiencies and can affect the safety of
workers.
The potential reputational and financial
implications of non-compliance with the
rapidly evolving environmental regulatory
framework are significant, as are the
direct and indirect costs of ensuring
compliance. Proposed legal
developments, among others, that are
likely to have a significant impact on the
business include the Carbon Tax Bill, the
Greenhouse Gas Reporting Regulations,
Company level carbon budgets, delays in
issuing critical authorisations/permits by
applicable competent authorities, newly
promulgated regulatory requirements/
acts/regulations such as the Disaster
Management Act, and the financial
provisions for rehabilitation and closure.
Climate change is recognised in the
mining industry as one of the most
material issues to have a potential impact
on the industry’s ability to achieve its
milestones through the effects on energy
prices, access to natural resources,
weather-related production disruptions
and related impacts on the industry’s
value chain.
The Board is ultimately responsible for
sustainable development and delegates
the monitoring of this area to the SHE
Committees at both the Tharisa Group
and the Tharisa Minerals Board level. The
Environmental Coordinator, together with
the SHE Manager, are responsible for
managing and reporting on
environmental performance, impacts and
mitigation, as well as ensuring that all
operations are legally compliant with the
applicable environmental legislation and
associated regulations. This is further
driven through the functional reporting
structure where the SHE Manager reports
to the Head: Sustainable Development,
who has a direct reporting line to the
Group Chief Technical Officer and the
Group Chief Operating Officer. The SHE
policy is reviewed annually and was most
recently revised and signed off by the
Chief Technical Officer and union
representatives on 30 October 2020.
Employees and contractors receive
environmental training at their initial
induction and regular refresher courses,
internal awareness and job-specific
training are part of effectively
implementing this policy.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
43
Tharisa Minerals monitors its
environmental compliance on an ongoing
basis, including the status of its EMPR
through Internal and External
Environmental Performance Assessments
conducted every second year,
Environmental Authorisations (‘EA’)
annual internal audits, Integrated Water
Use Licence (‘IWUL’) through annual
internal and external WUL audits and
environmental impact assessments
(‘EIAs’). In addition to internal operational
compliance, monitoring is conducted as
part of the Board’s instruction to monitor
compliance in areas of safety,
occupational health, and environmental
management.
Environmental expenditure for measuring,
monitoring and mitigating risks and
impacts represents a sizeable proportion
of the operations’ operating and capital
budgets. In the year under review,
ZAR9 million was spent on environmental
management including, among others,
pollution control and prevention and
environmental operational expenditure
(2019: ZAR12.1 million).
WATER MANAGEMENT
Water is used at the Tharisa Minerals
operations for milling, beneficiation and
for dust suppression during blasting, on
haul roads and at ore transfer points. The
operation is situated in a water-scarce
region of the North West province of
South Africa, where water conservation is
a priority for all the mining houses in the
area. Tharisa Mine has undertaken to
educate the community and employees
on the importance of conserving water as
a natural resource, and security of supply
is the mine’s prioritised business risk. This
is achieved through the use of posters
and banners strategically placed inside
the mine and in the neighbouring
community of Mmaditlhokwa,
Lapologang and Mamba, which has
assisted in creating a greater awareness
of this invaluable resource.
Water for the Tharisa Mine operation is
sourced from boreholes strategically
drilled within the mining right area, an
allocation from the Buffelspoort Irrigation
Scheme (strictly for agricultural usage), a
portion from Randwater and water
pumped from the open pits during
mining.
All water is reused and recycled as far as
practically possible to achieve effective
and efficient utilisation of water resources
based on reducing water demand,
reusing process water and preventing any
discharges into the environment. Dirty
and clean water are separated, and
Tharisa Minerals implements a hierarchy
of water use to ensure that “dirty” or
process water is recycled for reuse in the
operations before clean water is
abstracted from the natural environment.
Water consumption is metered as
required by Tharisa’s IWUL and regular
reporting of the quality and quantities of
the mine’s water is submitted where
applicable, monthly, quarterly and
annually or as per the requirements, to
the DHSWS.
During drought conditions, which are
experienced regionally, the mine
experiences a serious drop in water
contained in surface impoundments. This
has required Tharisa Minerals to be more
reliant on groundwater and thus increase
its borehole water consumption during
the year under review.
Tharisa Minerals submitted an application
to amend its IWUL, which includes both
minor amendments to the licence, as well
as new water uses. The final technical
report in support of this amendment
application was submitted to the DHSWS
in September 2017 and the amended
IWUL was received in the second half of
2020.
Tharisa Mine provides water for the
nearby community of Mmaditlhokwa for
domestic purposes by drilling and
equipping boreholes. The pumped water
is then piped and purified using on-site
purification systems (mini reverse osmosis)
located in the community.
Water quality is monitored to assess the
impact on the receiving environment, to
immediately warn management when
mitigation action is required and to
measure compliance with the IWUL
conditions. Ground and surface water
levels and quality are monitored regularly
by biomonitoring of aquatic/riverine
environments as appropriate and as
stipulated in the IWUL conditions.
MATERIALS
Measuring explosives used is important,
as explosives contribute to greenhouse
gas (GHG) emissions. The following
materials were consumed at Tharisa
Minerals’ operations during the year:
Consumed
materials
FY2020
FY2019
Explosives (t)
15 763
10 597
ENERGY
A consistent supply of electricity is critical
for efficient operations. Electricity is
sourced from Eskom, the state-run
electricity utility. From Tharisa Mine’s
on-site substation, power is distributed
throughout the operations. The most
significant impact electricity supply
interruptions have on the operations are
on workplace safety, production
efficiencies and diesel consumption with
resulting emissions when generators are
used to supply electricity to critical
functions.
Tharisa Minerals’ direct and indirect
energy consumption has been calculated
as part of its GHG inventory in December
2019. Fuels consumed in operations
include diesel, acetylene and liquid
petroleum gas (LPG). Diesel was the most
used fuel at 38.2 million litres in FY2020
and accounts for 99% of carbon
emissions from fuel use.
Tharisa Minerals’ indirect energy
consumption is from grid electricity.
For the year 2020, Tharisa Minerals used
185 807 110 MWh of electricity.
Managing energy consumption also
reduces GHG emissions since electricity
for South African operations is generated
mainly from fossil fuels and is included in
Scope 2 emissions below.
CARBON EMISSIONS
The GHG inventory for Tharisa Minerals
was calculated for the base year in
December 2016. These calculations have
been updated for FY2019 and will be
used to conduct energy optimisation
studies and to set practical energy and
emission targets to drive reductions in the
operations. These calculations are based
on the Greenhouse Gas Protocol –
Corporate Standard (GHG Protocol),
published by the World Resources
Institute and World Business Council for
Sustainable Development in March 2004.
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44
THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY CONTINUED
GHG emissions are measured and
reported in terms of Scope 1, Scope 2
and Scope 3 emissions. Direct GHG
emissions (Scope 1) are emissions from
sources that are owned or controlled by
Tharisa Minerals. These include the
emissions generated by the fuels that are
purchased and subsequently combusted
by the Tharisa Mine. Energy indirect GHG
emissions (Scope 2) are from the
consumption of grid electricity.
Other indirect GHG emissions (Scope 3)
are the emissions (other than energy
indirect GHG emissions) that are created
as a result of Tharisa Minerals’ activities
but occur at sources owned or controlled
by another company. These emissions will
include the emissions generated by the
mining contractors onsite, by the
combustion of fuels that they purchase
(emissions from explosives) and fuel
consumption. Other indirect emissions
can either occur upstream or downstream
of business operations. Upstream
emissions are typically related to
purchased or acquired goods and
services. Downstream indirect GHG
emissions are those pertaining to sold
goods and services.
The GHG inventory for FY2019 is
provided in the infographic below. The
assessment for FY2020 will be conducted
from April 2021.
Scope 1
Scope 2
Scope 3
Tharisa Minerals’ direct
emissions for FY2019 amounted
to 82 829 tCO2e. Diesel
purchased and consumed directly
by the mine decreased by 1% in
FY2019 when compared to
FY2018.
Energy indirect emissions
amounted to 182 343 tCO2e.
Electricity consumption increased
by 12% between FY2018 and
FY2019. This was due to the
increase in electricity
consumption and an increase in
the grid emission factor.
Overall, Tharisa Mine’s emissions
decreased by 1% to
2 285 059 tCO2e in FY2019
compared to FY2018. This is due
to the increased purchasing of
mining equipment, especially
large earth moving equipment.
CARBON TAX
South Africa is a significant global emitter
of GHG, with an ongoing reliance on
fossil fuels. The country is therefore
required to honour international emission
reduction commitments and reduce its
GHG emissions in line with the National
Development Plan (NDP) policy
framework.
“Tharisa Minerals will not have a carbon
tax liability, as all emissions from diesel
consumption will be paid as part of the
fuel levy paid at the pump.” However,
Tharisa has registered to SARS as a
carbon taxpayer and will be submitting
their Carbon Tax returns annually as
prescribed by the South African Revenue
Service rules.
As part of these commitments, the South
African Carbon Tax Act was passed in
Parliament on February 19, 2019. The Act
includes a ZAR120 per tonne carbon tax
for primary GHG emitters, a carbon tax
on liquid fuels, economic incentives for
energy efficiency and carbon offsets to
reduce the tax burden and it will be
introduced in a phased approach.
Investor sentiment around the impact of
the tax has been largely muted for Phase
1, owing to carbon allowances and
offsets, which will result in an effective
tax rate of between ZAR6 and ZAR48 per
tonne. Phase 2, from 2022 onwards, will
see a higher tax as the programme aligns
with global rates.
Tharisa commissioned a report from
advisory firm Deloitte to fully understand
the possible impact of carbon tax on the
business. The key finding is that:
AIR QUALITY
Dust originating from mining and
processing operations is rigorously and
continuously monitored, both in terms of
occupational health (dust that may
contain silica and that is harmful to
health) and fall-out dust (particulate
matter/fugitive dust). Fugitive dust is
monitored at various locations within the
operation, as well as specific sites in
neighbouring areas, to ensure compliance
with applicable legislation. A dust
suppression spray system through the use
of water bowsers reduces fugitive dust
levels from the respective crushers,
conveyors and transfer points. In
addition, Tharisa Minerals applies a dust
suppressant on its access roads to further
reduce the mine’s dependence on water
for dust suppression.
WASTE MANAGEMENT
Tharisa Minerals manages its activities to
ensure compliance with the relevant
waste legislation and to minimise its
impact on the natural environment and
surrounding communities. Tharisa
Minerals’ current activities and
infrastructure do not trigger the
requirements for a Waste Management
Licence (WML) as stipulated in the
National Environmental Management
Waste Act (NEMWA) as they are
regulated under the MPRDA. However,
for the planned expansion projects an
application for a WML will be submitted
to the relevant regulatory authorities in
case a WML is triggered.
Domestic waste generated at the
operations is disposed of in licenced
municipal landfill sites. Hazardous waste
such as used oil is recycled through
specialist service providers while other
hazardous waste such as oil
contaminated material and used filters is
sent to registered waste disposal facilities
and safe disposal certificates are
obtained.
Mineral waste produced by the
operations includes tailings and waste
rock. Waste rock is non-ore bearing rock
removed in the mining process and is
disposed of on waste rock dumps or used
to backfill open pit workings to
rehabilitate and minimise aesthetic
impact. Tailings generally consist of finely
milled waste material suspended in water
and are disposed of in tailings dams.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
45
These dams are lined appropriately to
prevent pollution of groundwater.
Groundwater around tailings disposal
facilities is closely monitored and
groundwater modelling assists in
predicting the potential impact of tailings
disposal on aquifers.
Ongoing monitoring of surface water
runoff and groundwater in the vicinity of
the infrastructure alerts operations to any
negative impact from waste disposal.
Tharisa Minerals has the relevant
authorisations for the disposal and
storage of both tailings and waste rock.
Waste inventories describing the source,
volume, and type of waste generated by
each process at the operation, as well as
the disposal method, are being managed
and give management a better sense of
volumes of waste generated onsite to
effectively manage the waste generated.
Waste produced
Waste rock
Tailings
Domestic waste
Hazardous waste: used oil
Hazardous waste: other
Tharisa applied for authorisation to
upgrade the current sewage treatment
plant. The mine has grown significantly
from 2012 when the current sewage
plant was constructed. The original
sewage plant catered for process
employees only, as mining was
outsourced, with the contractor using
septic tanks. The upgrade will incorporate
both process and mining in one sewage
plant, prompting the proposed
authorisation application, which
commenced end 2018. In August 2020
Tharisa received the authorisation from
DMRE and construction work is
scheduled to commence in November
2020. Completion is planned between
the 2nd and 3rd quarter of 2021.
BIODIVERSITY
Mining has a direct impact on the
physical environment and both mining
and beneficiation can affect the biomes
in their vicinity. Ensuring that the
processes and controls are in place to
safeguard the biodiversity in the biomes
in which Tharisa Minerals operates is an
important aspect of its sustainability
model. Biodiversity Action Plans (BAPs)
are in place at the operations and were
compiled as part of the initial EIA process.
Tharisa Minerals is implementing the
biodiversity management programmes.
The BAPs include commitments to
conserve protected areas such as
wetlands, zones of endemism,
archaeological and heritage sites and
protected and endangered species.
The EIA and the EMP include land-use
planning that involves engagements with
community forums, local municipalities
and other affected stakeholders.
Unit
Mm3
Mm3
t
kℓ
t
FY2020
FY2019
16.1
3.7
637.4
357.8
356.386
11.1
3.5
697.6
319.9
258.9
provisions for rehabilitation and closure,
requiring further provisions to be made
from operating expenses. Assessments
aligned to these regulations need to be
completed and submitted to the DMRE
by February 2021.
EMPR AMENDMENT
Due to the ever-evolving environment
and the growing mining footprint,
Tharisa has again applied for an
amendment to the EMPR. The application
was triggered by the following activities:
(cid:3)(cid:79) The need for an increase in diesel
capacities
(cid:3)(cid:79) Change in the current mining waste
footprint (tailings and waste rock
dumps)
(cid:3)(cid:79) The need for an additional waste rock
storage area
(cid:3)(cid:79) The inclusion of portion 113, which
was not part of the mining right
The application for authorisation in this
regard was submitted at the end of 2019.
Due to lockdown regulations and the fact
that Tharisa had submitted multiple
individual applications, the DMRE
requested Tharisa to re-submit a
consolidated application in August 2020.
HUMAN RESOURCES
Introduction
As emanated from the concluded wage
negotiations post FY2018, the
Harmonisation Task Team consisting of
management and majority trade union
stakeholders finalised the terms of
reference and submitted its final report to
management in October 2020 with
harmonised conditions of employment
and other issues of mutual interest. The
two-year wage agreement concluded in
Awareness training is planned for
employees, contractors and communities
regarding sensitive and endangered
species around the operation.
ENVIRONMENTAL REHABILITATION
Tharisa Minerals considers the impact of
its operations on local landscapes at each
stage of the mining cycle from initial
exploration to construction, operation
and eventual decommissioning and
closure. Operations rehabilitate
concurrently with ongoing mining
activities wherever possible.
The cost of rehabilitation and closure is
assessed annually by independent
specialists in alignment with the
requirements of relevant legislation,
EMPR closure commitments and
applicable good practice. Financial
provision is then made in the form of a
financial guarantee, which is submitted to
the DMRE.
The total cumulative mine closure and
environmental rehabilitation provision for
the year 2019-2020 is R 283 520 665
The regulations in terms of NEMA
pertaining to financial provision for
rehabilitation and closure for prospecting,
exploration, mining or production
operations were published in November
2015. These regulations have significant
financial implications for the mining
industry and the Mineral Council of South
Africa is engaging with the DMRE around
this impact and the industry’s concerns.
These regulations require mines to
provide for ongoing expenses after mine
closure and effectively freeze the existing
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY CONTINUED
2018 elapsed on 30 June 2020 and
management, together with the three
recognised unions, began wage
negotiations on 8 October 2020. The
wage agreement concluded will be
effective from 1 July 2020 with a period
to be agreed at pending wage
negotiations.
With COVID-19 cases being reported in
South Africa in March 2020, the
Company responded positively by
adhering to the World Health
Organization’s hygienic protocols and
constructed a quarantine facility for its
employees. COVID-19 communicative
forums are held with the union
representatives on a bi-weekly basis for
information sharing and awareness
purposes.
In addition to this approach, the human
resources (HR) department has placed a
great emphasis on cost-saving initiatives,
while still developing and supporting our
employees. Some of these approaches
include:
Psychometrics
Tharisa has embarked on in-sourcing all
psychometric assessments, with a full-
time Registered Industrial Psychologist
administering, scoring, interpreting and
providing feedback on these results. This
process has allowed Tharisa to save costs
on outsourced services and aid in the HR
life cycle of employees with more
contextual knowledge.
HDSA
HDSA management (Grade F)
HDSA management (Grade E)
Number of permanent employees
Number of permanent contractors
Lost days to labour action
Women
AMCU members
NUM members
Solidarity members
* Not previously recognised
Culture
Key leadership processes were initiated,
with a Tharisa Hero campaign taking
centre stage for the conditioning of the
new culture. Leadership training was
rolled out to the workforce with a merger
process initiated for online e-learning,
which will allow individuals to complete
training at their own pace and minimise
operational requirements. Gratitude
boards were also launched to make
employees aware of the positives that
surround us.
Communication
An interactive software programme was
launched for all computer users to give
up-to-date messages, with state-of-the-
art designs and rosters allowing for a
more transparent workforce culture and
informative content. TV communication,
grouped with videos and booklets, have
allowed employees to feel part of the
culture.
2019
91%
100%
44%
1 747
1 079
0
21%
51%
10%
0
2020
92%
100%
47%
1 736
1 346
0
22%
32%
12%
29%*
Coaching and counselling
Coaching programmess, as well as one-on-one counselling conducted by the Industrial Psychologist, were initiated for leaders to create
peer accountability and continuous development, while creating a safe environment for followers to raise their views with the support of
their respective leaders. This also allowed for counselling through hindrances that affected personal well-being and organisational
output.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
47
Forty-one employees enrolled for Mineral Processing NQF Level 2 Learnership with the
Mining Qualifications Authority, and 40 of them successfully completed the course.
issuing system was automised through
the introduction of an electronic
workflow system.
Adult Education enrolment for the year
2020 has dropped significantly by 23%
as compared to 2019. This drop is partly
due to the effects of the COVID-19
pandemic.
Adult education and training (AET) enrolments
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300
250
200
150
100
50
0.0
4
2
2
5
7
2
0
5
8
5
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Level 1
4
8
2
6
1
7
1
7
7
5
1
5
3
1
4
1
6
4
6
1
Level 2
Level 3
Level 4
Grand total
(cid:81) 2019 (cid:81) 2020 (cid:81) Total
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EMPLOYEE COMPETENCY DEVELOPMENT
Thirteen Mining Production Supervisors completed a Programme in Technical and Surface
Mining Operations in 2020 with five having received completion with distinction. To
ensure the availability of critical skills and leadership, three middle management
employees are studying a Management Development Programme. In addition,
12 employees are on Six Sigma (Black Belt) training. Tharisa funded 13 employees to
study at different tertiary institutions in South Africa.
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Training
Key training initiatives were launched to
facilitate skill transfers such as coaching
application modules, communication
training, personality insights training,
emotional intelligence training, leadership
training etc. All of these training
initiatives catered for key skill gaps that
were identified at the beginning of the
year.
HUMAN RESOURCES
DEVELOPMENT
COVID-19 awareness training
In compliance with COVID-19 Pandemic
Guidelines and Regulations, Tharisa
Minerals has trained 7289 of its
employees, including contractors and
visitors.
COVID-19 awareness
training – April to October 2020
(number of candidates)
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0.0
9
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2
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Trackless Mobile Machinery (TMM)
Operators Simulator Training Intervention
resulted in the drop of transmission abuse
by 16% and engine overspeed by 74%.
This magnificent intervention is ongoing.
In addition, original equipment
manufacturers found five Drilling Section
Artisans ompetent in SmartRoc T45
technical maintenance training. In our
quest for effectiveness, efficiency, and
alignment with the Fourth Industrial
Revolution, the TMM Operating Licences
48
THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUSTAINABILITY CONTINUED
NEW INITIATIVES
Our commitment towards sustainable growth, an empowered workforce and an invested
employee culture are but a few of the driving inspirations behind these initiatives.
A formal Coaching
Programme was
launched for all newly
recruited individuals
who completed
psychometric testing,
and for all employees, who
managers felt
could benefit
from coaching
exposure.
An Assessment
centre was
launched for
supervisors.
The evaluation aided in
investigating current
skill sets and, competency gaps
and helped to inform IDP development
programmes. Simply put, it allowed us
to make informal decisions.
Due to an increase in applications
for learnership programmes,
Tharisa formalised the recruitment
process and introduced
psychometric testing
as a screening tool.
This allowed for
objective and
factual decisions
to be made.
Training
designed and
rolled out for
120 key leadership
positions within Tharisa.
These individuals account for a
64% leadership pool within the
company. How to set standards,
spend time and showcase care
were covered.
360-degree feedback sessions combined
with psychometrics have allowed for an
increased awareness among managers.
This project allowed for a custom-built
approach for the specific needs of
Tharisa.
Leadership
training, regardless
of the level, was
initiated to increase
personal
responsibility and
ownership.
This training is one
of a few key
initiatives to address
cultural change
within Tharisa.
Evaluation
projects of
competence,
motivation and
potential were
initiated.
These initiatives aid
in decision-making
processes, to ensure
alignment and
expectations are
met.
A rapid results 100-day project
was launched for mining
supervisors to aid in compliance
with plan, sticking to the
ground rules and initiating a
grade-control improvement project.
This project is imperative
for the sustainable
mining culture
Tharisa is
aiming for.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
49
In addition to providing key donations in the surrounding communities, Tharisa has also been focused
on uplifting the community through skill transfer initiatives, socio-awareness interventions and
supporting resources for navigation of everyday life.
GARDEN TRAINING
INITIATIVE
SCHOOL CLOTHES
DONATIONS
BIO DIVERSITY
AWARENESS
ENVIRONMENT
UPSKILLING
HOSPITALITY
TRAINING
CHRISTMAS
DONATIONS
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
MINERAL RESOURCE AND
MINERAL RESERVE STATEMENT
INTRODUCTION
The Mineral Resource and Mineral
Reserve of Tharisa Minerals was prepared
under the guidance of the Competent
Person (CP) in accordance with the
requirements of the South African Code
for the Reporting of Exploration Results,
Mineral Resources and Mineral Reserves,
2016 (SAMREC Code). The estimates are
as of 30 September 2020.
The previous declaration of the Mineral
Resource and Mineral Reserve was dated
September 2019. The current Mineral
Resource declaration relies on the
geological model and resource model of
May 2020 for the MG Chromitite Layers,
the June 2018 model for the UG1
Chromitite Layer and the end of FY2020
mining faces. The Mineral Reserve
declaration is based on the latest pit
design and LOM schedule.
Overview
Since the commencement of operations
at the Tharisa Mine, additional geological
information was obtained from
observation in the operating pits and
resource drilling. The Mineral Resource
and Mineral Reserve information in the
tables on the following pages are based
on information compiled by the CP.
Definitions
The declaration of the Mineral Resource
and Reserve was undertaken in terms of
the guidelines of the SAMREC Code
(2016 edition).
Location
The Tharisa Mine is located 35 km east of
Rustenburg and 120 km northwest of
Johannesburg in the North West Province
of South Africa.
Statement by Competent Person
Ken Lomberg of Pivot Mining Consultants
Proprietary Limited (previously Coffey
Mining South Africa Proprietary Limited)
(Island House, Constantia Office Park,
Cnr 14th Ave and Hendrik Potgieter Str,
Johannesburg, 1709), is the CP for the
Mineral Resource declaration, and is
registered with the South African Council
for Natural Scientific Professions (Private
Bag X540, Silverton, 0127, Gauteng
province, South Africa), registration
number 400038/01. He holds BSc (Hons)
Geology, BCom and MEng (Mining
engineering) degrees. Mr Lomberg is a
geologist with 35 years’ experience,
including the Mineral Resource estimation
in respect of PGM and chromitite in the
Bushveld Complex.
The Mineral Reserve declaration is by
Jaco Lotheringen of Ukwazi Mining
Studies (2nd Floor, Block D, Southdowns
Office Park, 22 Karee Street, Southdowns,
Centurion, 0157), who is the CP for the
Mineral Reserve declaration. He holds a
BEng (Mining). He is registered with the
Engineering Council of South Africa
(ECSA, Private Bag X691, Bruma, South
Africa), registration number 20030022.
The current address of the CP is Unit
DSF01, 2nd Floor, Block D, Southdowns
Office Park, 22 Karee Street, Southdowns,
Centurion, 0157. He is a principal mining
engineer with appropriate experience in
the estimation, assessment and
evaluation of relevant Mineral Reserves
based on the class of deposit and mining
methodology.
The Company has written confirmation
from Messrs Lomberg and Lotheringen
that the information disclosed is in
compliance with the SAMREC Code
(2016) and that they have consented to
the inclusion of this information in the
form and context in which it appears.
Mining rights summary
Tharisa Minerals holds a mining right,
granted by the Department of Mineral
Resources and Energy (DMRE) (then the
Department of Minerals and Energy
(DME)) in terms of MPRDA on
19 September 2008, for a period of
30 years, to various portions of the farm
342 JQ and the whole of the farm
Rooikoppies 297 JQ. On 13 August 2009,
the mining right was registered in the
Mining and Petroleum Titles Registration
Office, under Reference No 49/2009(MR).
In July 2011, an application was granted
in terms of section 102 of the MPRDA, to
amend the existing mining right by the
addition of Portions 96, 183 and 286 of
the property 342 JQ to the mining right
49/2009(MR).
Mineral Resource
Geology and mineralisation
The Tharisa Mine is situated on the
southwestern limb of the Bushveld
Complex, one of the world’s largest
layered mafic intrusions, which hosts
layers rich in PGM, chromium and
vanadium, and constitutes the largest
known resource of these metals. The
Tharisa Mine is underlain by the Middle
Group (MG) and Upper Group (UG)
Chromitite Layers straddling the boundary
between the Marikana and Rustenburg
facies.
The MG Chromitite Layers outcrop is on
the property, striking roughly east to west
with a gentle change in strike to
northwest-southeast in the far west. The
layers dip at between 9° and 15° to the
north. Towards the western extent of the
outcrop, the dip is steeper. The
stratigraphy typically narrows to the west
and the dip steepens. The dip typically
shallows out at depth across the extent of
the mine area.
The MG Chromitite Layer package
consists of five groups of chromitite
layers, being the MG0 Chromitite Layer at
the bottom, followed by the MG1
Chromitite Layer, the MG2 Chromitite
Layer (sub-divided into A, B and C
Chromitite Layers), the MG3 Chromitite
Layer and the MG4 Chromitite Layer
(sub-divided into 4(0), 4 and 4A
Figure 1: Location of the Tharisa Mine
THARISA PLC INTEGRATED ANNUAL REPORT 2020
51
Chromitite Layers). The layers between
the chromitite layers frequently include
stringers or disseminations of chromite.
The MG Chromitite Layers at the Tharisa
Mine are a typical stack of tabular
deposits.
The structural interpretation of the
Tharisa Mine geology is based on the
aeromagnetic data, the available drilling
and observations in the operating open
pits. The only significant fault is a steeply
dipping northwest-southeast trending
normal fault with a downthrow of less
than 30 m to the east. This fault occurs
only on the far north-eastern corner of
the property and will have little effect on
mining of the MG Chromitite Layers on
the mine. A northwest-southeast
sub-vertical dyke of some 10 m thickness
was exposed in the east pit. The dyke is
not expected to have a major impact on
mining. The other major feature of
interest is the Spruitfontein upfold or
pothole, which is located on the
properties immediately west of the mine.
It affects the UG2 Chromitite Layer and
the rest of the critical zone below. No
new major structural features were
exposed by the current mining operation.
Figure 2: Stratigraphic map
Figure 3: Image of the Tharisa Mine plan showing borehole locations and the
extent of the open pits.
The Mineral Resource estimate was
completed over the mining right of
Tharisa Minerals to a depth of 750 m
for the MG Chromitite Layers. The UG1
Chromitite Layer Mineral Resource
estimate was limited to the area within
the planned pit perimeter.
The previous declaration of the Mineral
Resource and Mineral Reserve was dated
September 2019. The current Mineral
Resource declaration relies on the
geological model and resource model of
May 2020 for the MG Chromitite Layers,
the geological and resource model of
June 2018 for the UG1 Chromitite Layer
and the end of FY2020 mining faces.
Additional diamond drill boreholes were
added to the database. These boreholes
are located predominantly in the west
and far west parts of the mine. Most
significantly the geological interpretation
was reviewed with emphasis on the west
and far west pit areas. The geological
interpretation includes the construction
of three-dimensional models for each of
the units estimated.
The results from the samples confirmed
the geological assumptions and the
grades of the various chromitite layers,
providing additional confidence in the
mining operations. Observations on the
operation confirm the details observed
from the drilling. In-pit drilling continues
for the purposes of mining operations,
mine planning and grade control.
Prior to the estimation, the data was
collated and verified with the quality
controls for logging, sampling and assays
being used. The Mineral Resource
estimate was undertaken on each
chromitite layer and interburden
independently. Each element was
estimated separately by inverse distance
weighting (power2). The classification of
the Mineral Resource is predominately
determined by the distribution of the
boreholes with the consideration of the
complexity of the geology, especially in
the extreme western side of the property.
Changes to the Mineral Resource
declaration are due to the production
during the previous financial year and a
revised interpretation in the west and far
west. The estimated thicknesses in these
areas is slightly lower, mostly affecting
the Indicated and Inferred Mineral
Resources in these areas.
Some decrease in tonnage is also
attributed to a re-evaluation of the
material immediately adjacent to the
MG3 Chromitite Layer due to
consideration of the revised economics
related to these units and the realistic
prospects of eventual economic
extraction.
Tharisa Minerals Resource at
30 September 2020 is reported inclusive
of Mineral Reserve. The drilling, which
was located ahead of the open pit mining
faces, has allowed the CP to declare
additional Measured Mineral Resources.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
MINERAL RESOURCE AND
MINERAL RESERVE STATEMENT CONTINUED
As the drilling has not occurred beyond
the previously declared Indicated Mineral
Resource, the Indicated Mineral Resource
was reduced. Additional drilling further
downdip is expected to allow the
extension of the Indicated Mineral
Resource.
As a result of the additional information,
the delineation boundary was moved
northwards and downdip, increasing the
reported Measured Mineral Resource,
which now underlies the total footprint
of the planned open pit. The Indicated
Mineral Resource was decreased as no
additional information was obtained
ahead of this boundary. Additional work
was undertaken on the MG0 Chromitite
Layer which resulted in a redefinition of
the MG0 package into three separate
units. These were reclassified as Indicated
Mineral Resource. Work on the area in
the far west was largely responsible for
the decrease in the reported tonnage of
the Mineral Resource.
Mineral resource estimate
2020
Tonnes
6PGE + Au grade
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 6PGE + Au
Contained 5PGE + Au
Contained 3PGE + Au
Contained Cr2O3
2019
Tonnes
6PGE + Au grade
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 6PGE + Au
Contained 5PGE + Au
Contained 3PGE + Au
Contained Cr2O3
Sibanye-
Stillwater
Figure 4: Map of the location of the Tharisa Mine
Unit
Mt
g/t
g/t
g/t
%
Moz
Moz
Moz
Mt
Unit
Mt
g/t
g/t
g/t
%
Moz
Moz
Moz
Mt
Measured
Indicated
Inferred
Total
105.69
1.77
1.69
1.32
22.66
6.01
5.73
4.50
23.95
85.74
1.50
1.43
1.07
22.60
4.14
3.83
2.95
19.38
668.15
1.52
1.45
1.12
19.26
32.63
31.10
24.13
128.67
Measured
Indicated
Inferred
111.51
1.73
1.67
1.29
22.40
6.18
5.99
4.61
24.98
87.99
1.48
1.37
1.06
21.72
4.18
3.87
3.00
19.11
691.20
1.52
1.47
1.12
19.79
33.86
32.67
24.92
136.79
859.58
1.55
1.47
1.14
20.01
42.79
40.67
31.57
172.00
Total
890.70
1.54
1.49
1.14
20.31
44.22
42.54
32.53
180.88
THARISA PLC INTEGRATED ANNUAL REPORT 2020
53
MINERAL RESERVE DECLARATION
Mineral Reserve declaration
The Mineral Reserve estimate for September 2020 was based on a revised and updated
LOM plan for the open pit. This estimation was underpinned by an updated mining
model and incorporates the current economic conditions, current on-mine mining
methodology and survey depletion into the Whittle optimisation. Appropriate technical
aspects were considered in the mine design and schedule as basis for the Mineral Reserve
estimate, including economic pit limits, geotechnical parameters, mining methodology
and sequence, pit access, ramp placement, equipment capability, production rates and
practical mining considerations. The mining-related modifying factors applied included
geological losses, mining losses, mining dilution and metallurgical recovery. During the
LOM process a reconciliation was done as basis for the modifying factors to be applied
during the LOM process. The reconciliation completed with the below modifying factors
on the different pits was deemed appropriate and formed the basis of the Mineral
Reserve estimation.
Parameter
MG4A dilution thickness
MG4 dilution thickness
MG3 dilution thickness
MG2 dilution thickness
MG1 dilution thickness
Mining losses
Geological losses
Unit
m
m
m
m
m
%
%
East pit
0.53
0.83
0.75
1.30
0.48
6.0
5.0
West pit Far-west pit
0.51
0.71
0.60
0.83
0.44
10.0
15.0
0.51
0.71
0.60
0.83
0.44
6.0
7.5
The variance between the 2019 and 2020
Mineral Reserve estimation is due to:
(cid:3)(cid:79) Depletion
(cid:3)(cid:79) Updated MG3 mining cut wireframes
(cid:3)(cid:79) Geological structures.
The LOM plan was designed to extract
the MG Chromitite Layers, firstly from
open pit mining to a maximum depth
of 220 m and subsequently from
underground extraction (MG2 and MG4
Chromitite Layers) by means of a bord
and pillar mining method. During 2019,
a pre-feasibility study was done for the
underground mining area and remained
unchanged for the 2020 Mineral Reserve
process.
The Mineral Reserve tonnage remained
unchanged. Pit design and updated MG
Chromitite Layers accounted for a 4.3 Mt
increase, which was offset by a depletion
of Mineral Reserves from mining of
4.3 Mt.
An increase in PGM (3PGE + Au) grade
of 3.2% was estimated and a decrease of
1.7% in Cr2O3 grades was estimated. No
Inferred Mineral Resources were included
in the open pit LOM plan. Inferred
Mineral Resources formed part of the
underground mine plan, but were not
included as part of the Mineral Reserve
estimate. If excluded from the
underground mine plan, the underground
project may not be feasible.
The open pit LOM schedule was based
on a targeted ROM production rate of
5.5 Mtpa over a period of 14 years. The
final ore from the open pit is produced
during 2034. The open pit LOM increased
by one year due to an updated MG3
mining cut and a reduced ore production
rate compared to the 2019 mine plan.
The open pit transitions to underground
mining were from 2031 onwards.
The Mineral Reserve declared for the
underground project was derived from
the Measured and Indicated Mineral
Resource portion included as part of the
underground LOM plan. The
underground section was scheduled to
ramp up during the final phase of the
open pit operation. A pre-feasibility study
was completed in 2013, with an update
of the study for the underground mining
of the MG2 and MG4 Chromitite Layers
from the final open pit highwall being
undertaken during 2019. The Mineral
Reserve for the underground section
extends to a maximum depth of 270 m.
However, the underground LOM can be
expected to extend to a maximum depth
of 700 m, pending further fieldwork and
study work.
The 2021 Mineral Reserve estimate was
based on the approved Mineral Resource
models, modified mining models and
mine designs. An updated LOM
production schedule was completed for
the open pit as basis for the 2021 Mineral
Reserve estimate. The Proved Mineral
Reserve was derived from the Measured
Mineral Resource and the Probable
Mineral Reserve from the Indicated
Mineral Resource. No Probable Mineral
Reserve was derived from the Measured
Mineral Resource.
Open pit 2020
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3
Open pit 2019
(2)
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3
Unit
Mt
g/t
g/t
%
Moz
Mt
Mt
g/t
g/t
%
Moz
Mt
Proved
Probable
66.2
1.40
1.08
18.43
2.2
12.2
64.5
1.35
1.03
18.9
2.1
12.2
6.1
1.09
0.84
14.09
0.3
0.9
7.8
1.09
0.82
15.2
0.2
1.2
Total
72.4*
1.37
1.06
18.06
2.4
13.1
72.4
1.32
1.01
18.5
2.4
13.4
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
MINERAL RESOURCE AND
MINERAL RESERVE STATEMENT CONTINUED
Underground 2020
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3
Underground 2019
(2)
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au
Contained Cr2O3
Total open pit and underground 2020
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au(1)
Contained Cr2O3
Total open pit and underground 2019
(2)
Tonnes
5PGE + Au grade
3PGE + Au grade
Cr2O3 grade
Contained 3PGE + Au
Contained Cr2O3
* Due to rounding up of the figures, some totals may not add up in the table
(1) Average PGE process plant recovery estimates range from 78.9% to 83.9%
(2) Average Chrome yield estimates range from 33.9% to 37.8%
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Unit
Mt
g/t
g/t
%
Moz
Mt
Proved
Probable
Total
8.1
1.57
1.23
19.3
0.3
1.6
17.1
1.62
1.24
20.6
0.7
3.5
Proved
Probable
8.1
1.57
1.23
19.3
0.3
1.6
17.1
1.62
1.24
20.6
0.7
3.5
25.1
1.6
1.24
20.1
1.0
5.1
Total
25.1
1.6
1.24
20.1
1.0
5.1
Proved
Probable
Total
74.3
1.42
1.09
18.5
2.5
13.8
23.2
1.48
1.13
18.9
1.0
4.4
Proved
Probable
72.6
1.38
1.05
18.9
2.4
13.8
24.9
1.45
1.11
18.9
0.9
4.7
97.5
1.43
1.10
18.6
3.4
18.2
Total
97.5
1.40
1.07
18.9
3.4
18.5
Material risks
Year-on-year deferral of waste could have a substantial impact on the open pit Mineral Reserve and sustained delivery of chrome and
PGM product. Waste stripping production risks have been addressed significantly with an increase in waste removal of 44% from the
previous year, but is still below production targets by 23% from the 2019 budget.
An auditable reconciliation process could add significant value to the appropriate understanding of the systematic contribution of
process plant recoveries and dilution and losses on the mining operations related to plant feed grades, mining methodology and
equipment allocation to sustain cost-effective production performance. Currently plans are being investigated to address this risk.
Current long-term PGM and chrome prices were adopted with a full optimisation process completed for the open pit area from which
the economic pit limit was selected. Sustained low commodity prices over the long term materially influence the overall value of the
operation and can have a material impact on the size of the open pit portion of the Mineral Reserve.
Due to the selection of an ultimate pit with value and extended life strategy, sustained low-cost and efficient mining, with specific focus
on waste backfill and processing recoveries, are critical to creating sustained value from the open pit operation.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
55
Reporting codes and compliance
The Mineral Resource and Mineral
Reserve estimates for Tharisa Minerals are
stated in accordance with the principles
and guidelines of the SAMREC Code. All
the required regulatory permits have been
obtained or applied for. The directors are
unaware of any legal proceedings or
impediments to the continued operation
of Tharisa Mine.
Environmental management and
funding
Tharisa Minerals has obtained all
environmental approvals and
authorisations required for the operation
of the Tharisa Mine. The estimated
long-term environmental provision,
comprising rehabilitation and mine
closure, was based on the Group’s
environmental policy, considering the
current technological, environmental, and
regulatory requirements. Details of the
Group’s environmental liability and
funding can be found in notes 18 and 26
of the consolidated financial statements.
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56
THARISA PLC INTEGRATED ANNUAL REPORT 2020
BOARD OF DIRECTORS
LOUCAS POUROULIS (82)
Chairman
Appointed:
27 October 2010
Mining and Metallurgical Engineering (Hons)
(National Technical University, Athens, Greece)
PHOEVOS POUROULIS (46)
Chief Executive Officer (CEO)
Appointed:
27 October 2010
Bachelor of Science and Business
Administration (Boston University, USA)
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Loucas Pouroulis is the Executive Chairman of the Group, with responsibility for the
development of strategy and the identification of new opportunities for the Group.
He began his career in Cyprus in 1962, and his initial post-graduate training took
place in Germany, Sweden and Cyprus. Loucas is trained as a mining and metallurgical
engineer and has more than 50 years’ experience in mining exploration, project
management, financing and production in open pit and underground mining
operations, including PGM and gold mines. He immigrated to South Africa in 1964
and joined Anglo American, where he rose rapidly through the management ranks
and received extensive training and experience. In 1971, Loucas began to pursue his
own mining interests, initially focusing on gold mining opportunities considered
uneconomical by the majors. By the 1990s, he had established Petra Diamonds and,
since 2000, has established among others, Eland Platinum, Tharisa, Kameni, Keaton
Energy, Salene Chrome and the Karo Mining Group.
Phoevos Pouroulis is the Chief Executive Officer of the Group, with responsibility for
overall strategy and management. Phoevos has held various senior managerial and
operational positions in his career spanning more than 18 years. He has extensive
experience in project management, mining design, commissioning and mining
operations, including coal, chrome and PGM mines, having been involved in South
Africa’s mining industry since 2003. He has served as Commercial Director for
Chromex Mining and was a founding member of Keaton Energy. Phoevos is currently
the President of the International Chromium Development Association (‘ICDA’).
MICHAEL JONES (58)
Chief Finance Officer (CFO)
Appointed:
30 January 2013
Bachelor of Accounting (University of KwaZulu-
Natal, Pietermaritzburg, South Africa); CA (SA);
Member of the South African Institute of
Chartered Accountants
DAVID SALTER (62)
Lead independent non-executive director
Appointed:
27 October 2010
Bachelor of Science Engineering (Hons); PhD in
Mineral Technology (Imperial College, London);
Fellow of the South African Institute of Mining and
Metallurgy (FSAIMM)
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Michael Jones is the Chief Finance Officer of the Group and is responsible for the
overall financial operation, funding and the financial reporting management of the
Group. Michael has more than 11 years’ executive financial management experience
in the mining sector. In addition, he has 20 years’ experience in investment banking,
focusing on mergers and acquisitions and capital raisings of both equity and debt.
David Salter has more than 30 years’ experience in the development and management
of mining companies, including both open pit and underground PGM mining
operations. David’s most recent public company roles were Chairman of Keaton
Energy until its sale to Wescoal in 2017, and Managing Director of Eland Platinum
until its sale to Xstrata in 2007. He is a non-executive director of a number of unlisted
mining companies.
ANTONIOS DJAKOURIS (73)
Independent non-executive director
Appointed:
11 October 2011
Chartered Accountant and Fellow of the Institute
of Chartered Accountants in England and Wales
C
C
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Antonios Djakouris is a qualified Chartered Accountant and has over 30 years’
experience as a manager and director, having served in the accounting profession
and in a number of posts with the Bank of Cyprus, including internal audit, credit
review and retail banking, and as Group General Manager in charge of operations.
From 2003 to 2009, he directed the Bank of Cyprus group’s overseas operations,
including banks in the United Kingdom, Australia, Russia, Romania and Ukraine.
Antonios currently serves in an honorary capacity on the Board and Executive
Committee of the Cyprus Anti-Cancer Society, one of the largest charities in Cyprus.
Audit
Committee
Risk
Committee
Safety, Health and
Environment Committee
Social and Ethics
Committee
Nomination Committee
New Business Committee
Remuneration Committee
C Chairman
I By invitation
THARISA PLC INTEGRATED ANNUAL REPORT 2020
57
OMAR KAMAL (48)
Independent non-executive director
Appointed:
11 June 2014
Bachelor in Economics and Political Science
(University of Jordan); PhD in Management
(Finance and Banking) (Coventry University in
collaboration with Harvard Islamic Finance
Programme at Harvard University)
CAROL BELL (62)
Independent non-executive director
Appointed:
22 March 2016
Master of Arts in Natural Sciences
(University of Cambridge); PhD Archaeology
(University College, London)
Omar Kamal has more than 26 years’ international experience in banking, investment
management, strategic advisory services and high-growth entrepreneurship. He has
served at high-growth companies and multibillion-dollar corporates in various
executive capacities.
Until August 2015, he was the co-Group CEO of a business group owned by a
prominent family with global reach based in Geneva, Switzerland. Prior to that he
was one of the initial founders and acted as the CIO of a regional bank in the Middle
East and, before that, was a partner with Ernst & Young on the advisory and
consulting side.
Omar continues to serve on the boards of a number of listed and unlisted companies,
among others, Cambridge Scientific Innovation (CSI), Cybsafe, Crowdemotion,
Quiqup and Arab Bank Switzerland as Chairman of the Fintech Committee. In the
same context, Omar makes a personal strategic contribution towards digital
innovation and transformation.
Omar is a member of the Young President Organisation (YPO) and a Learning Chair
of the London Stars Chapter in the UK.
Carol Bell has more than 40 years’ experience in the energy and allied industries,
including a successful career as a Managing Director of Chase Manhattan Bank’s
Global Oil & Gas Group, Head of European Equity Research at JP Morgan and several
years as an equity research analyst in the oil and gas sector at Credit Suisse First
Boston and UBS Phillips & Drew. Carol began her career in corporate planning and
business development at Charterhouse Petroleum and RTZ Oil and Gas.
Carol has broad public company experience and currently serves on the boards of
TransGlobe Energy and Bonheur. She is also a non-executive director of the BlackRock
Energy and Resources Income Trust and serves on the Board of the Development
Bank of Wales and The Football Association of Wales. Carol is one of the founder-
directors of Chapter Zero, a network for non-executive directors to engage with
climate risk. She is also Vice President the National Museum of Wales, Vice Chair of
the Wales Millennium Centre, Chair of the British School at Athens, and Treasurer of
the Institute for Archaeo-metallurgical Studies.
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ROGER DAVEY (75)
Independent non-executive director
Appointed:
1 June 2017
Master of Science in Mineral Production
Management
(Royal School of Mines,
Imperial College, London); Master of
Science in Water Resource Management
(Bournemouth
and Water Environment
University); Associate of the Camborne
School of Mines
(‘ACSM’); Chartered
Engineer; European Engineer; Member of
the Institute of Materials, Minerals and
Mining (‘IMMM’)
Roger Davey, a British national, has more than 40 years’ operational experience at
senior management and director level in the mining industry in South America, Africa
and Europe. His experience at senior management level includes financing, feasibility
studies, construction, development, commissioning and operational management of
both underground and surface mining operations in gold and base metals.
Previous positions include being the Senior Mining Engineer at NM Rothschild
(London) (1998 to 2010) in the Mining and Metals project finance team, where he
had responsibility for the assessment of the technical risk associated with current and
prospective project loans; Director, Vice-President and General Manager of Minorco
(AngloGold) subsidiaries in Argentina (1994 to 1997), where he was responsible for
the development of the Cerro Vanguardia open pit gold-silver mine in Patagonia;
Operations Director of Greenwich Resources plc, London (1984 to 1992), with gold
interests in Sudan, Egypt and Australia; Production Manager for Blue Circle Industries
in Chile (1979 to 1984); and various production roles from graduate trainee to mine
manager, in Gold Fields of South Africa (1971 to 1978).
Roger serves on a number of boards, including Atalaya Mining Plc, Atalaya Riotinto
Project UK, Ltd, Atalaya Touro (UK) Ltd, Central Asia Metals plc, Piazza Barnaloft Mgt
Ltd and Highfield Resources Limited.
ZHONG LIANG HONG (56)
Non-executive director
Appointed:
1 April 2018
Bachelor (Ferrous Metallurgy)
(Shanghai Metallurgy Technology Academy)
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Zhong Liang Hong is a Chinese national with 34 years’ experience in commodity
trading. Representing Fujian Wuhang Stainless Steel Co. Limited and Huachuang
Singapore Pte Limited, Zhong has a strong understanding of analysis and forecasting
of commodity markets and end-user demand. He started his career in 1980 at the
Baosteel Group. In 2001 he founded Shanghai Hongli Metal Material Co. Limited and
is still the Chairman of this company. In 2002 he expanded his business to import
manganese into China and became the sole manganese agent in China acting for
BHP Billiton.
VANEESE WING YE CHU (35)
Non-executive director
Appointed:
17 September 2020
Bachelor of Science (Operations Research and
Industrial Engineering) (Cornell University, New
York); Member of the Hong Kong Institute of
Certified Public Accountants
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Vaneese Wing Ye Chu, a Chinese national, has more than 10 years’ experience in
mergers and acquisitions, investments and management.
She is a Senior Manager of NWS Infrastructure Management Limited, a wholly
owned subsidiary of NWS Holdings Limited (‘NWS’) (Hong Kong Stock: 659). Before
joining the NWS group, she worked at KPMG Corporate Finance Limited.
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58
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE
INTRODUCTION
Tharisa is incorporated in Cyprus and is
therefore subject to Cyprus Companies
Law. With a primary listing on the JSE
under the general mining sector, Tharisa is
subject to the JSE Listings Requirements
and the requirements of the South African
Code of Corporate Practices and Conduct
laid out in King IV. Tharisa also has a
secondary standard listing of its depositary
interests on the London Stock Exchange
(‘LSE’) and is subject to the LSE Listing
Rules and Disclosure and Transparency
Rules applicable to a secondary standard
listing. In addition, Tharisa listed on the
A2X exchange in South Africa with effect
from 6 February 2019. Tharisa’s primary
listing on the JSE and secondary standard
listing on the main board of the LSE
remain unaffected by the secondary listing
on A2X. The A2X is a licensed stock
exchange authorised to provide a
secondary listing venue for companies and
is regulated by the South African Financial
Sector Conduct Authority in terms of the
Financial Markets Act 19 of 2012. The
listing on A2X provides an opportunity to
improve liquidity and attract new investors
through the lower trading costs offered
by this trading platform. There are no
additional regulatory requirements or
ongoing obligations to comply with.
The Company has its registered office in
Cyprus and is subject to Cyprus disclosure
and transparency legislation, Cyprus
market abuse legislation and the
European Commission Market Abuse
Regulation EU596/2014, and for such
purposes considers Cyprus as its home
state, where such term requires
interpretation. The LSE Listing Rules
invoke the application of certain
provisions of the UK Disclosure and
Transparency Rules where similar
provisions do not exist under the national
law of its home state. The Company
considers that the requirements under the
UK Disclosure and Transparency Rules are
met under corresponding national law,
but nonetheless the Company aims to
apply the relevant UK Disclosure and
Transparency Rules applicable to the
Company in circumstances where there
may be a deemed discrepancy. For the
purposes of the present corporate
governance report, a reference to
Disclosure and Transparency Rules shall be
a joint reference to applicable UK and
Cyprus transparency rules. While the UK
Corporate Governance Code published by
the Financial Reporting Council does not
apply to the Company, the Board
recognises the importance of good
governance and considers the principles
and recommendations contained therein.
The Board is fully committed to the fact
that accountability, integrity, fairness,
transparency and integrated thinking are
essential to the Group’s long-term
sustainability and to its ongoing ability to
create value for investors and other
stakeholders. It endorses and accepts full
responsibility for the application of the
principles necessary to ensure that
effective corporate governance is
practised consistently throughout the
Group.
In discharging this responsibility, the Board
strives to comply with the requirements
set out in King IV. The Company’s
disclosure on its application of King IV
principles is set out on page 69.
The Board believes that the Company is
compliant with the Cyprus Companies
Law and the Company’s Articles of
Association.
In terms of King IV, independent non-
executive directors serving for more than
nine years are subject to a rigorous annual
review by the Board to evaluate their
continued independence. Having served
for more than nine years, David Salter and
Antonios Djakouris’ independence was
considered and reviewed by the Board
during the year under review. In doing so,
the Board considered and assessed the
presence or absence of any interest,
position, association or relationship which
could potentially influence or cause bias in
their decision-making process and
concluded that it was satisfied that there
were no such factors present that
impaired their independence. Both David
Salter and Antonios Djakouris continued
to bring an independent and objective
view distinct from that of shareholders
and management and continue to be
classified as independent non-executive
directors.
The Board is also of the opinion that the
Company is compliant with the JSE
Listings Requirements and King IV in all
material respects, other than having an
Executive Chairman and not having an
in-house independent internal audit
function. The former has been mitigated
by the appointment of David Salter as the
Lead Independent Director and the latter
by the appointment of Deloitte as the
internal auditor of the Group.
BOARD COMPOSITION
Executive directors
Loucas Pouroulis (Executive Chairman)
Phoevos Pouroulis (CEO)
Michael Jones (CFO)
Independent non-executive directors
David Salter (Lead Independent Director)
Antonios Djakouris
Omar Kamal
Carol Bell
Roger Davey
Non-executive directors
Zhong Liang Hong
Vaneese Wing Ye Chu
The Company has a unitary board, which
both leads and controls the Company. It
comprises three executive directors and
seven non-executive directors. Five of the
seven non-executive directors are
independent.
The Board is structured in such a way that
there is a clear balance of authority,
ensuring that no one director has
unfettered powers. The size of the Board
is regulated by the Company’s Articles of
Association and directors are appointed
through a formal process.
The Nomination Committee identifies
suitable candidates for appointment as
directors. Directors are required to be
individuals of calibre and credibility with
the necessary skills and experience to
bring judgement, independent of
management, on issues of strategy,
performance, resources, diversity,
standards of conduct and evaluation of
performance. Merit, commitment,
integrity and diversity are the core
considerations in ensuring that the Board
and its committees have an appropriate
blend and balance of perspectives,
knowledge and experience to discharge
their duties effectively and competently,
having regard to the strategic direction of
the Group.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
59
Age (%)
AGE
(%)
20
Tenure (%)
TENURE
(%)
30
50
40
30
Average:
6 years
Average:
4.5 years
30
20
20
20
30
Gender
GENDER
Male
8
Male 8
Female
2
10
10
30
Average:
60 years
Average:
60 years
20
20
20
(cid:81) <40 years
(cid:81) 41 to 50 years
(cid:81) 41 to 50 years
(cid:81) 51 to 60 years
(cid:81) 51 to 60 years
(cid:81) 61 to 70 years
(cid:81) 71 to 80 years
(cid:81) >80 years
(cid:81) 61 to 70 years
(cid:81) 71 to 80 years
(cid:81) 1 – 5 years
(cid:81) 0 to 3 years
(cid:81) 5 – 10 years
(cid:81) 3 to 5 years
(cid:81) > 10 years
(cid:81) 5 to 8 years
EXPERIENCE
Female 2
80%
80%
20%
20%
Independence (%)
INDEPENDENCE
(%)
50
30
30
Nationalities (%)
10
50
2020
30
2020
30
10
20
20
(cid:81) Independent
(cid:81) Executive
(cid:81) Non-executive
directors
(cid:81) Executive
(cid:81) Non-executive directors
* Includes a lead independent non-executive director
(cid:81) Independent non-executive directors
non-executive
directors*
BOARD DIVERSITY
The Nomination Committee reviews and
assesses the size, structure and
composition of the Board on an ongoing
basis to ensure it is appropriately
diversified. In this assessment, it takes into
account that the perspective of Board
members is influenced by a combination
of three different sets of attributes, being
(cid:3)(cid:79) experiential attributes such as skills,
education, functional experience,
industry experience and
accomplishments,
(cid:3)(cid:79) demographic attributes such as gender,
race, ethnicity, culture, religion and
generational cohort, and
(cid:3)(cid:79) personal attributes such as personality,
interests and values. The Board
recognises that having a blend of
attributes across all facets of diversity
will lead to more thorough and robust
decision-making processes and
direction and therefore strives to ensure
its diverse composition.
Acknowledging the benefits that can be
achieved through diversity, and specifically
20
(cid:81)
(cid:81) Cyprus
(cid:81) South Africa
(cid:81) Peoples Republic of China
(cid:81)
(cid:81) United Kingdom
(cid:81) Jordan
the meaningful participation of women
who possess the appropriate skills and
experience as members of the Board, the
Board will continue to focus on the
long-term goal of improving gender
representation at Board level.
At present, the two female directors
represent 20% of the total number of
directors and 29% of the non-executive
directors.
Similarly, recognising the value of age,
ethnic and cultural diversity at Board level,
the Board encourages the inclusion and
consideration of prospective candidates
with diverse backgrounds, a range of
suitable skills, based on merit and against
objective criteria, and with due regard for
the benefits of diversity on the Board.
In compliance with King IV, the JSE
Listings Requirements and international
best practice, the Nomination Committee
and Board have adopted a Board level
diversity policy, without introducing
voluntary targets with regard to gender
and racial diversification of the Board. The
Nomination Committee and the Board
5
1
5
6
3
1
Mining and metallurgy
Experience
Energy, oil and gas
5 Mining and metallurgy
Finance
1 Energy, oil and gas
5 Finance
Strategy and risk
6 Strategy and risk
Commodity markets
3 Commodity markets
Information technology
1 Information technology
Please note that some Board members have skills
Please note that some Board members have
and expertise in more than one area
skills and expertise in more than one area
believe that fixed targets will not
necessarily result in the best candidates
being identified for appointment to the
Board, given that the achievement of
specific targets would be dependent on a
number of factors outside of the Board’s
control, including the frequency at which
Board positions become vacant, the need
to appoint additional Board members and
the availability of appropriately skilled
candidates. It is, however, the objective to
include diverse candidates in the process
of identifying suitably qualified candidates
for appointment as Board members. The
Board will also pursue opportunities to
increase the number of female and racially
and ethnically diverse Board members
over time, provided that it is consistent
with the skills and diversity requirements
of the Board. In identifying suitable
candidates, the Nomination Committee
considers diverse candidates with a range
of suitable skills against objective criteria
and with due regard for the benefits of
diversity on the Board. Whenever
practically and commercially possible, the
Board gives preference to those
candidates whose appointment will
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60
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE CONTINUED
contribute to the achievement of suitable
diversity of the Board.
During the assessment process, the
Nomination Committee also considers the
relationship between executive and
non-executive directors. The Board
believes that there is an appropriate
balance between executive and non-
executive directors. The Board is satisfied
that the current members of the Board
collectively possess the skills, knowledge
and experience required to effectively
discharge the responsibilities of the Board
to achieve the Group’s objectives,
promote shareholder interests and to
create value for stakeholders over the
long term.
ROLE AND RESPONSIBILITIES OF
THE BOARD
The Board is the ultimate governing
authority, responsible for the Company’s
strategy, key policies, ethics and corporate
governance, as well as approving the
Company’s financial objectives and
targets. The Board recognises that
strategy, performance, risk and
sustainability are inseparable and that the
execution of strategy can have a material
impact on the Company’s creation of
value and its various stakeholders. The
Board is fundamentally important to the
achievement of the Company’s mission,
financial objectives and fulfilment of its
corporate responsibilities in a sustainable
manner and provides effective leadership
on an ethical foundation.
The Board is the ultimate custodian of the
governance framework, which commits
the Company and its representatives to
act according to the highest standards of
fairness, accountability, responsibility,
transparency, ethics and sustainability. The
Company’s approach to corporate
governance strives to be stakeholder
inclusive and based on good
communication. This approach has been
integrated into every aspect of the
Company’s business.
The Board ensures that the Group is, and
is seen to be, a responsible corporate
citizen, by having regard not only to the
financial aspects of the business of the
Group, but also the impact that the
business operations have on the
environment and the society in which they
operate.
The Board has adopted a Board Charter
setting out the role, functions, obligations,
rights, responsibilities and powers of the
Board and the policies and practices of
the Board in respect of its duties,
functions and responsibilities. The Board
has also adopted terms of reference for
each of its committees. The Board Charter
and terms of reference are available on
the Company’s website.
The directors who are also members of
the Executive Committee of the Company
are involved in the day-to-day business
activities of the Company and are
responsible for ensuring that the decisions
of the Executive Committee as approved
by the Board, are implemented in
accordance with the mandate given by
the Board and Executive Committee.
The Board is satisfied that the approved
delegation of authority framework
contributes to role clarity and the effective
exercise of responsibilities.
All non-executive directors have
unrestricted access to the Chairman,
management, the Company Secretary, the
Assistant Company Secretary and the
external and internal auditors. Directors
are entitled to seek independent
professional advice on any matter
pertaining to the Company and the
Group, at the Company’s expense.
The Board considers and satisfies itself, on
an annual basis, of the qualifications,
experience and arm’s length relationship
between the Company Secretaries and
the Board.
Board meetings are held on a regular
basis, at least quarterly, and all directors
participate in the key areas of decision
making.
ROLE OF THE EXECUTIVE
CHAIRMAN
There is a clear distinction between the
roles of the Executive Chairman and the
CEO. The Executive Chairman is
responsible for ensuring the integrity and
effectiveness of the Board and its
committees, which includes:
(cid:3)(cid:79) providing overall leadership to the
Board, without limiting the principle of
collective responsibility for Board
decisions
(cid:3)(cid:79) presiding over meetings of the Board
and meetings of shareholders
(cid:3)(cid:79) acting as facilitator at Board meetings
to ensure that no director, or group of
directors, dominate the discussion, that
sufficient debate takes place, that the
opinions of all directors relevant to the
subject under discussion are solicited
and expressed freely, that conflicts of
interests are managed and that Board
discussions lead to appropriate
decisions
(cid:3)(cid:79) actively participating in the selection of
Board members and overseeing a
formal succession plan for the Board
and certain senior management
appointments
(cid:3)(cid:79) encouraging collegiality among Board
members and management while at
the same time maintaining an arm’s
length relationship
(cid:3)(cid:79) mentoring to enhance directors’
confidence, especially new or
inexperienced directors and
encouraging them to make an active
contribution at meetings.
The Chairman’s performance is appraised
by the non-executive directors on an
annual or such other basis as the Board
may determine.
ROLE OF THE CEO
The Board’s authority conferred on
management is delegated through the
CEO and the authority and accountability
of management is accordingly considered
to be the authority and accountability of
the CEO.
The CEO provides executive leadership
and is accountable to the Board for the
implementation of strategies, objectives
and decisions within the framework of
the delegated authorities, values and
policies of the Company, which includes:
(cid:3)(cid:79) recommending or appointing the
executive members and ensuring proper
succession planning and performance
appraisals
(cid:3)(cid:79) developing the Company’s strategy and
vision for Board consideration and
approval
(cid:3)(cid:79) developing and recommending annual
business plans and budgets that
support the Company’s long-term
strategy to the Board
(cid:3)(cid:79) monitoring and reporting to the Board
on performance against and
conforming with strategic imperatives
(cid:3)(cid:79) ensuring that the Company has
appropriate management structures
and a management team to effectively
carry out the Company’s objectives,
strategy and business plans
(cid:3)(cid:79) ensuring that the assets of the
Company are properly maintained and
safeguarded and not unnecessarily
placed at risk
(cid:3)(cid:79) setting the tone from the top in
providing ethical leadership and
creating an ethical environment and not
THARISA PLC INTEGRATED ANNUAL REPORT 2020
61
causing or permitting any decision,
internal or external practice or activity
by the Company that may be contrary
to commonly accepted business
practice, good corporate governance or
professional ethics
(cid:3)(cid:79) acting as the chief spokesperson of the
Company.
The non-executive directors monitor and
evaluate the CEO in achieving the
approved targets and objectives and the
results of such evaluation are considered
by the Remuneration Committee to guide
it in its appraisal of the performance and
remuneration of the CEO.
ROLE OF THE LEAD INDEPENDENT
DIRECTOR
The Lead Independent Director chairs the
Nomination Committee, Safety, Health
and Environment Committee and Social
and Ethics Committee, facilitates meetings
of the non-executive directors and is a
member of the Audit, Remuneration, Risk
and New Business Committees. He acts as
a sounding board to the Executive
Chairman and the CEO and leads the
non-executive directors in the appraisal of
the Executive Chairman and CEO. He
provides leadership and advice to the
Board when the Executive Chairman has a
conflict of interest, without detracting
from the authority of the Executive
Chairman. He acts as an intermediary for
the other Board members and
shareholders with regard to concerns that
have not been resolved through the
normal channels.
ROLE OF THE NON-EXECUTIVE
DIRECTORS
The role of non-executive directors is to
bring independent judgement and to
challenge executive directors in a
constructive manner, without becoming
involved in the day-to-day running of the
business.
The key responsibilities of non-executive
directors include oversight to the board
on issues relating to:
(cid:3)(cid:79) strategic direction, by providing an
objective, informed and creative insight
based on own experience, to act as a
constructive critic in assessing the
strategic objectives devised by the CEO
and to ensure that the necessary
financial and human resources are in
place for the Company to meet its
objectives
(cid:3)(cid:79) monitoring performance of executive
management with regard to the
progress made towards achieving the
Company’s strategy and objectives and,
in doing so, playing an important role in
key executive appointments, removals
where necessary, and succession
planning
(cid:3)(cid:79) remuneration, through the work of the
of the Board Charter, appointments to the
Board are made on recommendation of
the Nomination Committee. A formal
policy detailing the procedures for
appointments to the Board has been
adopted by the Company.
Remuneration Committee, by
objectively and independently
determining appropriate levels of
remuneration of executive directors
(cid:3)(cid:79) risk and strategic risk in particular,
through the work of the Risk
Committee, by reviewing the risk
philosophy, strategy and policies as
recommended by executive
management, ensuring compliance
with such policies, and with the overall
risk profile of the Company
(cid:3)(cid:79) integrity of financial information,
through the work of the Audit
Committee, by ensuring that the
Company accounts properly to its
shareholders by presenting a true and
fair reflection of its actions and financial
performance and that the necessary
internal control systems are
implemented and monitored on a
regular basis
(cid:3)(cid:79) standards of conduct of the Board and
executive management.
Tharisa’s non-executive directors bring
diverse experience and expertise to the
Board. They are required to have a clear
understanding of the Group’s strategy and
must be sufficiently familiar with the
Group’s businesses to be effective
contributors to the development of the
Group’s strategy and identification and
monitoring of risks faced by the Group.
Non-executive directors are required to
have sufficient time to perform their
duties as directors and to make a
meaningful contribution. They should be
prepared to question and challenge the
opinions of executive directors and
provide fresh insight into the Group’s
strategic direction. Non-executive directors
assess the performance of the Executive
Chairman and CEO and serve on various
Board committees. Non-executive
directors meet without the presence of
the executive directors at least twice a
year. Non-executive directors met four
times during the year under review.
BOARD APPOINTMENTS
Members of the Board are appointed by
the Company’s shareholders. The Board
also has the power to appoint directors,
subject to such appointments being
approved by shareholders at the next
annual general meeting (‘AGM’) following
such appointment. Pursuant to the terms
Non-executive directors are required to be
individuals of calibre and credibility, be
independent of management and possess
the necessary skills and expertise to bring
judgement to bear on issues of strategy,
performance, resources, diversity,
standards of conduct and evaluation of
performance.
Directors are required to conduct
themselves, at all times, in a professional
manner, having due regard to their
fiduciary duties and responsibilities to the
Company and to ensure that sufficient
time is made available to devote to their
duties as Board members. Directors are
further required to be diligent in
discharging their duties to the Company,
seek to acquire sufficient knowledge of
the business of the Company and
endeavour to keep abreast of changes
and trends in the business environment
and markets in which the Company
operates, in order to be able to provide
meaningful direction to the Company’s
business activities and operations.
DIRECTOR INDUCTION
Upon appointment, all new directors are
provided with induction materials to
familiarise them with the Group’s
operations, business environment,
executive management and to induct
them in their fiduciary duties and
responsibilities. The induction programme
typically involves an information pack
comprising, inter alia, the Group structure,
a list of the top shareholders, Board packs
and minutes of previous Board meetings,
annual and interim reports, Articles of
Association, the Board Charter, committee
terms of reference, information on
directors’ and officers’ insurance, a guide
to the JSE Listings Requirements and a
memorandum on dealings in securities,
market abuse and insider trading. Periodic
site visits are arranged for existing and
new non-executive directors to improve
their understanding of the Group’s
operations.
RETIREMENT BY ROTATION AND
RE-ELECTION OF DIRECTORS
In terms of the Company’s Articles of
Association, any directors appointed by
the Board during the course of the
financial year shall hold office only until
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62
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE CONTINUED
the next AGM of the Company following
their appointment and shall then retire
and be eligible for election. Vaneese Wing
Ye Chu was appointed on 17 September
2020 and will accordingly retire at the
next AGM and will be eligible for election.
In accordance with the Company’s Articles
of Association, one-third of non-executive
directors must retire from office at each
AGM. Executive directors are not subject
to retirement by rotation. The non-
executive directors retiring at each AGM
are those directors who have been the
longest serving since their last election.
Retiring directors are eligible for
re-election, and if so re-elected, are
deemed to not have vacated their office.
Roger Davey, Zhong Liang Hong and
Vaneese Wing Ye Chu will be retiring by
rotation at the upcoming AGM. All three
directors have made themselves available
for re-election. A brief curriculum vitae of
each director standing for election or
re-election appears on pages 56 to 57.
Board support for election or re-election
is not automatic. The Nomination
Committee assesses the composition of
the Board and performance of individual
Board members on an annual basis prior
to recommending any directors for
election or re-election by shareholders at
the AGM. Upon recommendation by the
Nomination Committee, the Board makes
a determination as to whether it will
endorse a director standing for election or
re-election. Having assessed the
performance of the directors standing
for election, it is the recommendation
of the Board that Roger Davey and
Vaneese Wing Ye Chu be re-elected.
BOARD MEETINGS
The Board meets formally at least four
times per year and at such other times as
may be required. The Board met four
times during the year under review. In
addition to the informal mid-cycle briefing
calls which are held at least twice a year,
bi-weekly video briefing Board calls had
been scheduled during the height of the
COVID-19 pandemic, and 12 such calls
had been held during the period.
Furthermore, the Board participated in
two strategy sessions during the year.
BOARD COMMITTEES
Certain responsibilities are reserved for the
Board, while others are delegated to
The Company’s Board committees are constituted as follows:
Board committees, each with formal
mandates and terms of reference, without
reducing the individual and collective
responsibilities of Board members’ overall
fiduciary duties and responsibilities. The
terms of reference of each Board
committee determines, inter alia, the
composition, purpose, scope of mandate,
and powers and duties of the committee.
Board committees provide feedback to
the Board through reports by their
respective chairmen and provide the
Board with copies of minutes of
committee meetings. All directors receive
notice and packs for committee meetings
and are welcome to join meetings of
Board committees of which they are not
members. Terms of reference of the
various committees are compliant with
the provisions of the Company’s Articles
of Association and the JSE Listings
Requirements. The terms of reference are
reviewed on a regular basis and are
available on the Company’s website. All
committees have satisfied their
responsibilities in compliance with their
respective terms of reference during the
year under review.
Chairman
Members
By standing invitation
Audit Committee
Antonios Djakouris
Risk Committee
Antonios Djakouris
Nomination Committee
David Salter
Remuneration Committee
Antonios Djakouris
Safety, Health and Environment Committee
David Salter
Social and Ethics Committee
David Salter
New Business Committee
Roger Davey
David Salter
Omar Kamal
Carol Bell
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Omar Kamal
Carol Bell
Roger Davey
Zhong Liang Hong
Vaneese Wing Ye Chu
Loucas Pouroulis
Antonios Djakouris
David Salter
Carol Bell
Roger Davey
Antonios Djakouris
Carol Bell
Roger Davey
Antonios Djakouris
Omar Kamal
Carol Bell
Phoevos Pouroulis
David Salter
Carol Bell
Loucas Pouroulis
Phoevos Pouroulis
CFO
CEO
COO
Group Executive: Legal
CTO
CEO
CEO
CFO
CEO
COO
CFO
COO
Group Executive: Legal
CTO
THARISA PLC INTEGRATED ANNUAL REPORT 2020
63
AUDIT COMMITTEE
The Audit Committee, which must
comprise at least three independent
non-executive directors, is chaired by
Antonios Djakouris, an independent
non-executive director. Other members of
the Audit Committee are David Salter,
Omar Kamal and Carol Bell, all
independent non-executive directors. The
Board is satisfied that the committee’s
members have the appropriate mix of
qualifications and experience in order to
fulfil their responsibilities appropriately.
The Group’s independent external auditor,
independent internal auditors, CFO and
CEO attend committee meetings by
invitation. The Audit Committee meets
with the internal and external auditor,
without any executive directors being
present.
Both the internal and external auditors
have unrestricted access to the Chairman
of the Audit Committee and to the Lead
Independent Director.
The Audit Committee provides the Board
with additional assurance regarding the
quality and reliability of financial
information used by the Board and the
financial statements of the Group. The
committee reviews the internal and
financial control systems, accounting
systems and reporting and internal audit
functions. It liaises with the Group’s
external auditor and monitors compliance
with legal requirements.
Furthermore, the Audit Committee
assesses the performance of financial
management, approves external audit
fees and budgets, monitors non-audit
services provided by the external auditor
against an approved policy and ensures
that management addresses any identified
internal control weakness. In addition, the
Audit Committee oversees the integrated
reporting process, risk management
systems, information technology risks (as
they relate to financial reporting), the
Group’s whistleblowing arrangements
and policies and procedures for
preventing corrupt behaviour and
detecting fraud and bribery.
In terms of the committee’s oversight role
in the integrated reporting process, it
takes into account all factors and risks
that may impact on the integrity of the
integrated report. In this regard, the
committee considers and reviews the
findings and recommendations of the
Risk and Safety, Health and Environment
Committees insofar as they are relevant to
the functions of the Audit Committee.
The committee also reviews and evaluates
the disclosure of material sustainability
issues in the integrated report, in
conjunction with the Risk and Safety
Health and Environment Committees,
with specific focus on ensuring that the
disclosure is reliable and does not conflict
with the financial information. It
recommends and/or approves the
engagement of external assurance
providers on material sustainability issues
and ensures that the appropriate
measures of progress towards achieving
disclosed climate change risk mitigation
actions are included in the integrated
report disclosures.
The committee has unrestricted access to
all Company and Group information and
may seek information from any emploYe.
The committee may also consult external
professional advisers in executing its
duties.
The Chairman of the Audit Committee is
required to report to the Board after each
meeting of the Committee and the
minutes of meetings of the Audit
Committee are provided to the Board.
For more information on the activities of
the committee during the year under
review, refer to the report of the Audit
Committee on page 92.
The Audit Committee is satisfied as to the
appropriateness of the expertise of
Michael Jones, the CFO. The
appropriateness of the expertise and
experience of the CFO is considered on an
annual basis.
The Audit Committee meets as often as is
deemed necessary, but is required to meet
at least twice a year. The committee met
four times during the year under review.
RISK COMMITTEE
Control of the complete process of risk
management, the evaluation of its
effectiveness and approval of
recommended risk management and
internal control strategies, systems and
procedures are key Board responsibilities.
For this reason, the Risk Committee
comprises the entire Board. The Risk
Committee is chaired by Antonios
Djakouris. Risk Committee meetings are
attended by the Chief Operating Officer
(COO), Group Executive: Legal and Chief
Technical Officer (CTO) by invitation.
The Risk Committee reviews management
reports on the adequacy and effectiveness
of the Group’s operational risk
management functions, ensures
compliance with the Group’s risk
management policies and reviews the
adequacy of the Group’s insurance
coverage.
During the year under review, in-depth
risk reviews had been undertaken at
operating subsidiary and business unit
level throughout the Tharisa Group, with
specific focus on COVID-19 specific risks
and committee conducted a high-level
review of the residual risks identified by
management during these reviews. It
continues to monitor progress made by
risk owners in identifying mitigating
factors, performing gap analyses and
implementing additional mitigating
measures where required. In addition, the
Risk Committee identifies reviews and
evaluates non-operational and strategic
risks impacting on the Company and the
Group on an ongoing basis. The Risk
Committee meets as often as is deemed
necessary and met twice during the year
under review.
NOMINATION COMMITTEE
The Nomination Committee is chaired by
David Salter, the Lead Independent
Director. Other members of the
Nomination Committee are Antonios
Djakouris, an independent non-executive
director, and Loucas Pouroulis, the
Executive Chairman. Loucas Pouroulis is
entitled to participate and contribute to
the Nomination Committee, but is not
entitled to vote on any matter before the
Nomination Committee. In the event of a
tied vote, David Salter has a casting vote.
The CEO attends meetings by invitation, if
required.
The Nomination Committee ensures that
the procedures for appointments to the
Board are formal and transparent by
making recommendations to the Board on
all new Board appointments in accordance
with the Company’s policy for Board
appointments. It does so by regularly
evaluating the Board performance,
undertaking performance appraisals of
the Chairman and directors, evaluating
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64
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE CONTINUED
the effectiveness of Board committees
and making recommendations to the
Board. The Nomination Committee also
considers and approves the Board
succession plans.
The work of the Nomination Committee
during the year followed both its terms of
reference and established good practice in
corporate governance. The committee
conducted a review of the structure, size
and composition of the Board, with
specific emphasis on skills, knowledge,
independence and diversity of the Board
members. During the period under review,
the committee considered the proposal to
appoint Julia Hu as non-executive director
to replace Joanna Cheng, who retired by
rotation at the AGM held in January
2020, and recommended the
appointment to the Board. The
appointment of Vaneese Wing Ye Chu to
the Board had also been considered and
recommended to the Board for approval.
The committee also considered the
independence of non-executive directors.
Consideration was given, among others,
as to whether the individual non-executive
directors are sufficiently independent of
the Company so as to effectively carry out
their responsibilities as directors, whether
they are independent in judgement and
character and that there are no conflicts
of interest in the form of contracts,
relationships, shareholding, remuneration,
employment or related-party disclosures
that could affect their independence.
The committee determined that
David Salter, Antonios Djakouris,
Omar Kamal, Carol Bell and Roger Davey
are independent. Zhong Liang Hong and
Vaneese Wing Ye Chu are not considered
independent due to their association with
significant shareholders.
The Nomination Committee met twice
during the year under review.
REMUNERATION COMMITTEE
All members of the Remuneration
Committee are independent non-
executive directors. The committee is
chaired by Antonios Djakouris and other
members of the committee are David
Salter, Carol Bell and Roger Davey. The
CEO and CFO are invited to attend
meetings of the committee to make
presentations, except when their own
remuneration is under consideration.
The Remuneration Committee considers
the remuneration framework of the
Executive Chairman, CEO, CFO and other
members of the executive management
of the Company and its subsidiaries, with
reference to local and international
benchmarks. As far as the remuneration
of the Executive Chairman and the CEO is
concerned, the committee considers and
if appropriate, recommends the
remuneration of the Executive Chairman
and the CEO to the Board for final
approval.
The committee also considers bonuses,
which are discretionary and based upon
general economic variables, the
performance of the Company and each
individual’s performance against
personalised key performance indicators,
allocations in terms of the Group’s
incentive schemes and certain other
emploYe benefits and schemes.
During the year, the committee reviewed
various aspects of the Group’s
remuneration structure, including
executive salaries, and performance-based
remuneration schemes.
In addition, the committee continued its
engagement with an independent
consulting firm, Korn Ferry, to assist with
the design of a new long-term incentive
arrangement to support Tharisa’s strategic
objectives while also reflecting the
expectations of leading institutional
investors. This work was completed
during the year under review and
shareholders will be asked to approve a
new Long-Term Incentive Plan at the AGM
to be held on 10 February 2021. The
committee believes that the new plan will
successfully motivate and retain key
employees, while strengthening the
relationship between long-term
performance and reward. The plan is
designed to be fully consistent with good
practice for companies listed in
Johannesburg and London and introduces
a number of features which help create
long-term alignment with institutional
investor expectations. It is the committee’s
recommendation that the Long-Term
Incentive Plan be approved by
shareholders.
The committee met five times during the
year under review.
The remuneration report may be found on
pages 78 to 89 of this Integrated Annual
Report
SAFETY, HEALTH AND
ENVIRONMENT COMMITTEE
All members of the committee are
independent non-executive directors. The
committee is chaired by David Salter and
other members are Antonios Djakouris,
Carol Bell and Roger Davey. The CEO and
Chief Operating Officer attend the
meeting by invitation.
The Safety, Health and Environment
Committee develops and reviews the
Group’s framework, policies and
guidelines on safety, health and
environmental management, monitors key
indicators on accidents and incidents and
considers developments in relevant safety,
health and environmental practices and
regulations.
The committee met four times during the
year under review.
SOCIAL AND ETHICS COMMITTEE
As required by the JSE Listings
Requirements, the Board established a
Social and Ethics Committee. The
committee is chaired by David Salter and
other members are Antonios Djakouris,
Omar Kamal, Carol Bell and Phoevos
Pouroulis.
The committee’s objective is, inter alia, to
assist the Board in ensuring that the
Company and the other entities in the
Group are and remain committed, socially
responsible corporate citizens by creating
a sustainable business and having regard
to the Company’s economic, social and
environmental impact on the communities
in which it operates which, among others,
includes public safety, HIV/Aids,
environmental management, corporate
social investment, consumer relationships,
labour and employment, the promotion of
equality and ethics management.
The committee has an independent role
with accountability to both the Board and
the Company’s shareholders. The
committee does not assume the functions
of management of the Company. These
functions remain the responsibility of the
Company’s executive directors, executive
management and senior managers.
It is the committee’s responsibility to
monitor the Group’s activities, having
regard to any relevant legislation, other
legal requirements or prevailing codes of
best practice, with regard to matters
relating to, among others, the following:
THARISA PLC INTEGRATED ANNUAL REPORT 2020
65
(i) Social and economic development,
focusing on the Company’s standing
in terms of the goals and purposes of
the 10 United Nations Global
Compact Principles, among others:
(cid:3)(cid:79) upholding and respecting human
rights
(cid:3)(cid:79) fair labour practices, which include
the freedom of association, right
to collective bargaining and the
elimination of forced labour, child
labour and discrimination
(cid:3)(cid:79) promotion of greater responsibility
toward the environment
(cid:3)(cid:79) prevention of bribery and
corruption
(cid:3)(cid:79) the Organisation for Economic
Co-operation and Development’s
recommendations regarding
corruption
(cid:3)(cid:79) the Equator Principles
(cid:3)(cid:79) the Employment Equity Act and
the Broad-Based Black Economic
Empowerment Act, applicable to
South African subsidiaries.
(ii) Good corporate citizenship and the
impact of the Group’s activities and
of its products or services on the
environment, health and public safety
and the Company’s employment
relationships and its contribution
toward the educational development
of its employees. In order to ensure
that Tharisa is and is seen to be a
responsible corporate citizen, the
committee oversees and monitors, on
an ongoing basis, the consequences
of the Group’s activities and outputs
on:
(cid:3)(cid:79) the workplace, by ensuring
employment equity, fair
remuneration, safety, health,
dignity and development of
employees and the Group’s
standing in relation to the
International Labour Organisation
Protocol on decent work and
working conditions
(cid:3)(cid:79) the economy, by working towards
economic transformation
(cid:3)(cid:79) the prevention, detection and
response to fraud and corruption
(cid:3)(cid:79) society, by upholding public health
and safety, consumer protection,
community development and
protection of human rights
(cid:3)(cid:79) the environment, by ensuring the
prevention of pollution, minimising
waste disposal and protecting
biodiversity.
(iii) Ethical leadership and ethical
behaviour, by reviewing the
Company’s Code of Ethics and
making recommendations to the
Board for approval, reviewing results
of whistleblowing activities,
reviewing significant cases of
emploYe conflicts of interest,
misconduct or fraud, or any other
unethical activity by employees or the
Company and ensuring that the
Company’s ethics performance is
assessed, monitored, reported and
disclosed.
The committee is pleased to report that it
has fulfilled its mandate in terms of its
Terms of Reference and that there are no
ATTENDANCE AT MEETINGS
Attendance at Board and committee meetings is set out below:
instances of material non-compliance to
report.
The committee meets as often as it deems
necessary but, in any case, at least once a
year and at such other times as
determined. The committee met once
during the year under review.
NEW BUSINESS COMMITTEE
The New Business Committee is
responsible for the investigation and
assessment of new projects and business
opportunities, particularly from a strategic,
technical and operational point of view,
and the identification of project-related
risks, and safety, health and
environmental risks. The Committee is not
authorised to approve individual projects
or investments or commit the Company,
but works with executive management to
review and evaluate new business
opportunities and initiatives and make
recommendations to the Board for
approval. The committee has the right of
access to management and/or external
consultants and the right to seek
additional information or explanations.
The committee is chaired by Roger Davey
and other members are David Salter, Carol
Bell, Loucas Pouroulis and Phoevos
Pouroulis. The CFO, COO, Group
Executive: Legal and CTO attend
meetings as invitees.
Meetings of the committee will be held as
often as necessary to undertake its role
effectively. The committee met four times
during the year under review.
Director
Number of meetings held
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Antonios Djakouris
Omar Kamal
Carol Bell
Roger Davey
Zhong Liang Hong
Joanna Cheng*
Julia Zhengzhi Hu**
Vaneese Wing Ye Chu***
Board
Audit
Committee
Nomination
Committee
Remunera-
tion
Committee
Risk
Committee
SHE
Committee
Social and
Ethics
Committee
New
Business
Committee
4
3
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By invitation
Retired by rotation on 29 January 2020
#
*
** Appointed 29 January 2020/ Resigned 17 September 2020
*** Appointed 17 September 2020
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66
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE CONTINUED
GROUP COMPANY SECRETARY
The role of the Group Company Secretary
is, inter alia, to provide guidance and
advice to the Board with respect to
matters relating to the JSE Listings
Requirements, the LSE Listings Rules,
Disclosure and Transparency Rules, Cyprus
Companies Law, King IV, market abuse
laws and regulations and other corporate
governance-related matters. In addition to
her statutory duties, the Company
Secretary provides individual directors, the
Board as a whole, and the various
committees with guidance as to the
manner in which their responsibilities
should be discharged in the best interests
of the Group.
Sanet Findlay is a full-time employee
within the Group and based in South
Africa. She holds a Bachelor of Science
and a Bachelor of Law, a CIS professional
post-graduate qualification: Company
Secretarial and Governance Practice and is
an Associate member of the Chartered
Governance Institute of Southern Africa
(formerly Chartered Secretaries Southern
Africa) since 2003. She has experience as
a Group Company Secretary of JSE and
LSE listed companies since 2009. She is
not a director of Tharisa or any of its
subsidiaries and maintains an arm’s length
relationship with the Board.
Lysandros Lysandrides acts as the Assistant
Company Secretary and holds a Bachelor
of Law and a post-graduate diploma in
Legal Practice (UK). He is an associate
member of the Institute of Chartered
Secretaries and Administrators (UK), a
Fellow of the Chartered Institute of Legal
Executives (UK) and a registered practising
Cyprus attorney at law. He has experience
as a company secretary and legal adviser
to companies listed on the LSE and Cyprus
Stock Exchange. Lysandros is appointed as
an external adviser to Tharisa and its
Cyprus subsidiaries and maintains an
arm’s length relationship with the Board.
The Board formally assessed and
considered the performance and
qualifications of the Company Secretaries
and is satisfied that the Company
Secretaries are competent, suitably
qualified and experienced.
The appointment and removal of the
Company Secretaries are matters reserved
for the Board as a whole.
BOARD EVALUATION
The Nomination Committee, under
leadership of the Lead Independent
Director, conducts an evaluation of the
performance of the Board, its committees,
the Executive Chairman, CEO, CFO, the
Company Secretary and the performance
and contribution of the individual
non-executive directors. The Board
committees conduct a self-evaluation
against their respective terms of reference
and each individual Board member is
evaluated by fellow Board members using
an evaluation questionnaire. The results of
the evaluation process are considered by
the Nomination Committee prior to their
presentation to the Board. Results and any
identified training requirements are
discussed with individual directors if
deemed necessary. Board evaluations are
performed on an annual or biennial basis.
An extensive evaluation was conducted
during October 2019. There were no
material findings and remedial action is
being taken to address areas that can be
improved upon.
The Board is satisfied that the evaluation
process assists in the improvement of
performance and effectiveness of the
Board.
CONFLICTS OF INTEREST
Disclosure of other directorships, personal
financial interests and any other conflicts
of interest, and those of related persons,
in any matter before the Board is a
standing Board agenda item and a
register is kept of all such disclosures.
Directors recuse themselves from
discussion on any matters in which they
may have a conflict of interest. Non-
executive directors are required to inform
the Board of any proposed new
directorships and the Board reserves the
right to review such additional
appointments to ensure that no conflict of
interest would arise and to ensure that a
director accepting a new appointment
would be able to continue to fulfil his or
her obligations as a member of the Board.
SHARE DEALING AND INSIDER
TRADING
All directors of the Company and its major
subsidiaries, senior executives, the
Company Secretaries and employees and
advisers who, by virtue of their positions
have access to financial and other price
sensitive information, are regarded as
insiders and are required, at all times, to
obtain prior authorisation to deal in the
Company’s shares.
Directors of the Company and its major
subsidiaries and Persons Discharging
Managerial Responsibilities (PDMRs) are
reminded of their obligation to inform all
their associates, as defined by the JSE
Listings Requirements, and investment
managers of the fact that dealings by the
directors and their associates in Tharisa
shares have to be pre-approved and/or
disclosed to the Company within the
stipulated timeframe to facilitate release
of the required announcements in terms
of the JSE Listings Requirements. A similar
requirement exists under the European
Union’s Market Abuse Regulations for
persons discharging managerial
responsibilities and persons closely
associated with them. The Company’s
directors, executives and employees who
are classified as insiders are not permitted
to deal in the Company’s shares during
closed periods or when they are in
possession of non-public information.
An appropriate communication is sent to
all such directors, PDMRs and employees
alerting them that the Company is
entering a closed period. Closed periods
are observed as required by the JSE
Listings Requirements, including the
period from the end of the interim and
annual financial reporting periods to the
announcement of the financial results for
the respective periods, and during periods
that the Company is under a cautionary
announcement. The EU Market Abuse
Regulation stipulates a closed period of 30
calendar days before announcement of
the interim and/or annual results. The
Company applies the longer duration in
any given financial reporting period.
Directors of the Company and its major
subsidiaries and PDMRs were made aware
of an amendment to the JSE Listings
Requirements, which expands the
definition of a transaction (for purposes of
directors’ dealings in securities) to include
the use of the issuer’s securities as
security, guarantee, collateral or otherwise
granting a charge, lien or other
encumbrance over the securities. In the
past, disclosure of such security
arrangements had only been required at
the time of enforcement against the
security, and not at the time that the
relevant security agreement was entered
into. In terms of the amended Listings
Requirements, separate transactions are
regarded to occur, and an announcement
is required, at the time a security
agreement is entered into, at the time
when a right of the secured party is
THARISA PLC INTEGRATED ANNUAL REPORT 2020
67
exercised, and at the time that an existing
security agreement is amended or
terminated. All existing transactions
entered into prior to the amendment of
the Listings Requirements must be
disclosed in the annual report. None of
the directors or company secretaries of
the Company, or of its major subsidiaries,
or any PDMRs had entered into any such
transactions prior to the amendment to
the Listings Requirements which came
into effect on 2 December 2019.
SUCCESSION PLANNING
The Board, assisted by the Nomination
Committee, is responsible for overseeing
succession planning and ensuring that
appropriate strategies are in place to
ensure the smooth continuation of roles
and responsibilities of members of the
Board and senior management.
COMPLIANCE
Compliance with financial reporting
requirements and accounting standards
falls within the ambit of the Audit
Committee. The Group’s statutory and
regulatory compliance resides with the
Legal, Risk and Compliance Officer and
reports on compliance are presented to
the Audit and Social and Ethics
Committees. In addition to the formal
authorisation processes required for
dealings in the Company’s shares, the
Group has various policies and procedures
in place governing the declaration of
interests, accepting and granting of gifts
and an approved delegation of authorities
matrix which governs the delegation of
authority and value limits within the
Group and ensures that all transactions
are approved appropriately.
No incidents of non-compliance were
identified and no significant penalties or
regulatory censures were imposed on the
Company or any of its subsidiaries during
the year under review.
The Board is satisfied that the Company
complied with the Cyprus Companies
Law, its Articles of Association and the
requirements of the JSE Listings
Requirements pursuant to the Company’s
primary listing on the JSE during the year
under review. The Board also
acknowledges the role and responsibilities
of its JSE sponsor, Investec Bank Limited,
and is of the opinion that the sponsor has
discharged its responsibilities with due
care during the period.
INFORMATION TECHNOLOGY
GOVERNANCE
The Board Charter commits the Board to
assuming ultimate responsibility for
ensuring that effective information
technology (‘IT’) systems, internal control,
auditing and compliance policies,
procedures and processes are
implemented in order to avoid or mitigate
key IT-related business risks. The Board has
delegated responsibility for the governing
of IT to the Audit Committee. Assurance
on the IT systems and processes is
provided by the Group’s internal auditors,
and/or other professional consultants if
required, and findings are reported to the
Audit Committee, which ensures that any
and all material findings are addressed
appropriately.
CLIMATE CHANGE GOVERNANCE
The Board is ultimately responsible for
strategic direction of the Group and
monitoring that Tharisa and its
subsidiaries are operating responsibly.
Tharisa has evolved its approach to
dealing with stakeholders, focusing on
actively healing, rather than merely
avoiding harm. Both the risks and
opportunities presented by climate
change are actively debated by the Board
when developing the Group’s strategy.
Investment decisions, likewise, factor in
climate risk as well as the business
opportunities that arise from
decarbonisation of energy in order that
the Group’s capital investment is allocated
appropriately and responsively to ensure
that Tharisa’s business model remains
both sustainable and competitive. The
Group produces a number of raw
materials required for decarbonising the
global economy and it also directs its
research and development activities
towards not only minimising its direct
carbon footprint, but also to contribute to
the global goal of achieving net-zero
carbon emissions by 2050. The Board
supports the Paris Climate Agreement,
which was adopted in 2015 to address
the negative impact of climate change by
substantially reducing global greenhouse
gas emissions in an effort to limit the
global increase in temperature. The Board
is working towards defining short and
medium-term greenhouse gas emission
targets.
EXTERNAL AUDIT
Ernst & Young Cyprus Limited acts as
external auditor to the Group and its
independence is reviewed by the Audit
Committee on an annual basis. The
appointment of the external auditor was
approved at the AGM on 29 January 2020.
The external auditor has unrestricted
access to the Chairman of the Audit
Committee and the Lead Independent
Director.
INTERNAL AUDIT
The Company does not have an in-house
independent internal audit function.
The Audit Committee reviews, on a
regular basis, whether there is a need for
an in-house internal audit function and
makes the necessary recommendation to
the Board. The Audit Committee is of the
opinion that given the size and stage of
development of the Company and the
Group, an in-house internal audit function
is not currently justified. The appointment
of Deloitte as internal auditor for the
Group is considered to sufficiently
mitigate the risk of not having an
in-house internal audit function.
INTERNAL CONTROL SYSTEMS
To meet the Company’s responsibility to
provide reliable financial information, the
Company maintains financial and
operational systems of internal control.
These controls are designed to provide
reasonable assurance that transactions are
concluded in accordance with
management’s authority, that the assets
are adequately protected against material
losses, unauthorised acquisition, use or
disposal and that transactions are properly
authorised and recorded. The systems
include a documented organisational
structure and division of responsibility,
established policies and procedures, which
are communicated throughout the Group,
and the careful selection, training and
development of people.
The Audit Committee monitors the
operation of the internal control systems
to determine whether there are
deficiencies. Corrective actions are taken
to address control deficiencies as they are
identified. The Board, operating through
the Audit Committee, oversees the
financial reporting process and internal
control systems.
There are inherent limitations to the
effectiveness of any system of internal
control, including the possibility of human
error and the circumvention or overriding
of controls.
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68
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE GOVERNANCE CONTINUED
CODE OF BUSINESS ETHICS AND
CONDUCT
The Group’s Code of Business Ethics and
Conduct reaffirms the high standards of
business conduct required of all
employees, officers and directors of
Tharisa. It forms part of the Company’s
continuing effort to ensure that it
complies with all applicable laws, as an
effective programme to prevent and
detect violations of law, and for the
education and training of employees,
officers and directors. In most
circumstances, the code sets standards
that are higher than the law requires and
adherence to the code aims to preserve
the confidence and support of the public
and Tharisa’s shareholders.
Tharisa expects its employees, officers and
directors to:
(cid:3)(cid:79) act with honesty, integrity and fairness
in all dealings, both internally and
externally
(cid:3)(cid:79) comply with all laws and regulations
applicable to the Group
(cid:3)(cid:79) comply with Group policies and
procedures
(cid:3)(cid:79) protect the health, safety and wellbeing
of co-workers, suppliers and the
communities in which the Group
operates
(cid:3)(cid:79) protect the environment by prudent use
of resources such as water and energy
and to limit waste disposal by recycling
(cid:3)(cid:79) protect and not disclose Tharisa’s
confidential information
(cid:3)(cid:79) avoid any potential conflicts of private
interests with the interests of the
Group, including, but not limited to,
improper communications with
competitors or suppliers regarding bids
for contracts, having close relationships
with contractors or suppliers,
involvement with any other businesses
that have interests adverse to Tharisa,
interests in Tharisa or compete with
Tharisa
(cid:3)(cid:79) not give or accept gifts, gratuities, or
hospitality from customers or suppliers
of inappropriate value, that could incur
obligations or that could influence
judgement
(cid:3)(cid:79) avoid any situations or relationships
that could interfere with an individual’s
ability to make decisions in Tharisa’s
best interests
(cid:3)(cid:79) to act in a courteous, dignified and
respectful manner when dealing with
co-workers and third parties and to
refrain from discriminatory, harassing or
bullying behaviour, whether expressed
verbally, in gesture or through
behaviour.
Furthermore, it is Tharisa’s policy not to
discriminate against any emploYe on the
basis of race, religion, national origin,
language, gender, sexual orientation, HIV
status, age, political affiliation or physical
or other disability. Tharisa desires to create
a challenging and supportive environment
where individual contributions and
teamwork are highly valued. In order to
establish such an environment, all
individuals are expected to support this
policy of non-discrimination and Tharisa’s
equal employment opportunity policies.
HUMAN RIGHTS, MODERN SLAVERY
AND HUMAN TRAFFICKING
Tharisa acts ethically and with integrity in
all business dealings and has the
necessary systems and controls in place to
safeguard against any form of
transgression of human rights. Tharisa will
continue to raise awareness of human
rights among its employees, suppliers and
the communities in which it operates.
Modern slavery encapsulates slavery,
servitude and forced or compulsory
labour. Tharisa has a zero tolerance
approach to any form of modern slavery
and is committed to ensuring that there is
no slavery or human trafficking in its
supply chain, or in any part of its business.
Anti-bribery and corruption policy
Tharisa is committed to doing business
ethically. Tharisa does not tolerate
corruption, fraud and bribery and does
not allow donations to any political parties
by any of its operations. The Group’s
anti-corruption policy outlines potential
risks, steps to mitigate the risk of bribery
and corruption, together with a reporting
guideline. All employees, suppliers and
other associated persons are made aware
of these policies and procedures with
regard to ethical behaviour, business
conduct and transparency.
INDEPENDENT ANONYMOUS
SAFETY AND ETHICS HOTLINE
The Group has a zero tolerance approach
to safety transgressions, theft, fraud,
corruption, violation of the law and
unethical business practices by employees
or suppliers.
A 24-hour independent anonymous safety
and ethics hotline monitored by an
independent external party is fully
operational and facilitates the reporting
and resolution of safety and ethical
violations. This confidential and
anonymous hotline provides an impartial
facility for employees, service providers,
customers and other stakeholders to
report any safety or ethics-related matter
such as safety concerns, unsafe behaviour
and practices, hazardous conditions,
fraudulent activity, corruption, statutory
malpractice, financial and accounting
reporting irregularities and other
deviations from safe and ethical
behaviour. It is the duty of the Audit
Committee to ensure that arrangements
are in place for the independent
investigation of such matters and
appropriate follow-up action. No action
will be taken against anyone reporting
legitimate concerns, even if there is no
proven unlawful conduct.
Each report received via the Safety and
Ethics Hotline, or through any other
channel, is considered and a decision
is taken whether the report should be
investigated internally, or whether an
independent external investigation is
called for. During the year under review,
a number of anonymous reports were
received via the Safety and Ethics Hotline.
These reports were duly investigated, and
appropriate disciplinary action was taken
where necessary.
INVESTOR RELATIONS
The CEO and CFO, supported by the
Investor Relations function, interact with
institutional investors and qualified private
investors on a regular basis on the
performance of the Group through
presentations, and scheduled meetings.
The Company also participates in selected
South African and international
conferences and conducts roadshows in
South Africa and internationally.
A wide range of information and
documents, including copies of
presentations given to investors, annual
reports and notices of shareholder
meetings, are made available on the
Company’s website www.tharisa.com on
an ongoing basis.
Shareholders are encouraged to visit the
investors’ section of the website
frequently to be kept informed of the
corporate timetable, including dates for
the AGMs, forms of proxy and relevant
shareholder information relating thereto.
KING IV APPLICATION
THARISA PLC INTEGRATED ANNUAL REPORT 2020
69
Principle
Summary of how Tharisa applies the King IV Principles
Leadership, ethics and corporate citizenship
1. Leadership
The governing body should lead ethically
and effectively
Integrity
The Board is guided in all matters by the Board Charter, which sets out its role and
responsibilities. The Board subscribes to and promotes the highest standards of integrity and
good corporate governance, itself acting ethically and setting the tone for an ethical
organisational culture. The Board’s ethical approach is further strengthened by the diverse
experience of its non-executive directors, the majority of whom are independent.
Disclosure of other directorships, personal financial interests and any other conflicts of interest,
and those of related persons, in any matter before the Board is a standing Board agenda item
and a register is kept of all such disclosures. Directors recuse themselves from discussion on
any matters in which they may have a conflict of interest.
The values and principles of Tharisa are defined in the Company’s Code of Business Ethics and
Conduct, which seeks to ensure compliance with relevant legislation and regulations, in a
manner that is beyond reproach.
The Social and Ethics Committee assists the Board by monitoring ethical leadership and ethical
behaviour, by reviewing the Company’s Code of Ethics and making recommendations to the
Board for approval, reviewing results of whistleblowing activities, reviewing significant cases of
employee conflicts of interest, misconduct or fraud, or any other unethical activity by
employees or the Company and ensuring that the Company’s ethics performance is assessed,
monitored, reported and disclosed.
Competence
Upon appointment, all new directors are provided with induction materials to familiarise them
with the Group’s operations, business environment and members of executive management.
Periodic site visits are arranged for existing and new non-executive directors to improve their
understanding of the Group’s operations.
Directors are required to be diligent in discharging their duties to the Company, seek to acquire
sufficient knowledge of the business of the Company and endeavour to keep abreast of
changes and trends in the business environment and markets in which the Company operates,
in order to be able to provide meaningful direction to the Company’s business activities and
operations.
The Nomination Committee, under leadership of the Lead Independent Director, conducts an
evaluation of the effectiveness and performance of the Board, its committees, and individual
directors. Results and any identified training requirements are discussed with individual
directors if deemed necessary.
Responsibility
The Board is responsible for control of the Company and the strategic direction of the Group.
The Board exercises such control through the governance framework of the Board and its
committees. The Board Charter contains a list of matters reserved for the Board.
The non-executive directors bring diverse experience and expertise to the Board. They are
required to have a clear understanding of the Group’s strategy and must be sufficiently familiar
with the Group’s businesses to be effective contributors to the development of the Group’s
strategy and identification and monitoring of risks faced by the Group. Non-executive directors
are required to have sufficient time to perform their duties as directors and to make a
meaningful contribution. They should be prepared to question and challenge the opinions of
executive directors and provide fresh insight into the Group’s strategic direction.
Leadership, ethics and corporate citizenship continued
1. Leadership continued
The governing body should lead ethically
and effectively
Accountability
Certain responsibilities are reserved for the Board, while others are delegated to Board
committees, each with formal mandates and terms of reference. This delegation, however,
does not reduce the individual and collective responsibilities of Board members’ overall
fiduciary duties and responsibilities.
Fairness and transparency
The Board is the ultimate custodian of the governance framework, which commits the
Company and its representatives to act according to the highest standards of fairness,
accountability, responsibility, transparency, ethics and sustainability. The Board ensures that the
Group is, and is seen to be, a responsible corporate citizen, by having regard not only to the
financial aspects of the business of the Group, but also the impact that the business operations
have on the environment and the societies in which it operates.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
KING IV APPLICATION CONTINUED
2. Organisational ethics
The governing body should govern the
ethics of the organisation in a way that
supports the establishment of an ethical
culture
3. Responsible corporate citizenship
The governing body should ensure that
the organisation is, and is seen to be, a
responsible corporate citizen
Strategy, performance and reporting
4. Strategy and performance
The governing body should appreciate
that the organisation’s core purpose, its
risks and opportunities, strategy, business
model, performance and sustainable
development are all inseparable elements
of the value creation purpose
The Board Charter outlines the Board’s effective management of ethics. The Group’s Code of
Business Ethics and Conduct reaffirms the high standards of business conduct required of all
employees, officers and directors of Tharisa. In most circumstances, the Code sets standards
that are higher than the law requires.
A 24-hour safety and ethics hotline, monitored by an independent external party, facilitates
the detection and resolution of safety and ethics violations. This confidential and anonymous
hotline provides an impartial facility for employees, service providers, customers and other
stakeholders to report any safety or ethics-related matter such as safety concerns, unsafe
behaviour and practices, hazardous conditions, fraudulent activity, corruption, statutory
malpractice, financial and accounting reporting irregularities and other deviations from safe
and ethical behaviour. The Audit Committee ensures that arrangements are in place for the
independent investigation of such matters and appropriate follow-up action.
The Board ensures that the Group is, and is seen to be, a responsible corporate citizen by
having regard not only for the financial aspects, but also the impact that the business
operations have on the environment and the society in which they operate.
The Board Charter outlines the Board’s responsibilities in this regard. Tharisa is committed to
the promotion of sound safety, health and environmental practices in order to protect,
enhance and invest in the wellbeing of the economy, society and the environment. The Board
agrees with the principles of the 2015 Paris Afreement to mitigate climate change and the
Group is taking steps to reduce its carbon footprint. Tharisa has evolved its approach to
dealing with stakeholders and the environment, focusing actively on healing, rather than
merely avoiding harm.
The Board focuses on these matters through its Risk, Safety, Health and Environment and
Social and Ethics Committees.
The Social and Ethics Committee assists the Board by monitoring the Group’s activities relating
to good corporate citizenship and the impact of the Group’s activities and its products or
services on the environment, health and public safety, the Company’s employment
relationships and its contribution toward the educational development of its employees. In
order to ensure that Tharisa is seen to be a responsible corporate citizen, the committee
oversees and monitors, on an ongoing basis, the consequences of the Group’s activities and
outputs on:
(cid:3)(cid:79) the workplace, by ensuring employment equity, fair remuneration, safety, health, dignity and
development of employees and the Group’s standing in relation to the International Labour
Organisation Protocol on decent work and working conditions
(cid:3)(cid:79) the economy, by working towards economic transformation
(cid:3)(cid:79) the prevention, detection and response to fraud and corruption
(cid:3)(cid:79) society, by upholding public health and safety, consumer protection, community
development and protection of human rights and
(cid:3)(cid:79) the environment, by ensuring the prevention of pollution, minimising waste disposal and
protecting biodiversity.
The Board recognises that strategy, risk, performance and sustainability are inseparable. The
Board is responsible for aligning the strategic objectives, vision and mission of the Group with
performance and sustainability considerations. The Board reviews and approves Group
strategy, ensuring alignment with the purpose of the Company, key value drivers, sustainability
and legitimate interests and expectations of stakeholders.
In terms of the Board Charter, approval of the strategy, business plans and annual budgets and
any subsequent material changes in strategic direction or material deviations in business plans
and/or annual budgets are matters reserved for the Board.
The CEO provides executive leadership and is accountable to the Board for the implementation
of strategies, objectives and decisions within the framework of the delegated authorities,
values and policies of the Company, which include:
(cid:3)(cid:79) developing the Company’s strategy and vision for Board consideration and approval
(cid:3)(cid:79) developing and recommending annual business plans and budgets that support the
Company’s long-term strategy to the Board
(cid:3)(cid:79) monitoring and reporting to the Board on performance against and conformance with
strategic imperatives
(cid:3)(cid:79) ensuring that the Company has appropriate management structures and a management
team to effectively carry out the Company’s objectives, strategy and business plans.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
71
Strategy, performance and reporting continued
5. Reporting
The governing body should ensure that
reports issued by the organisation enable
stakeholders to make informed
assessments of the organisation’s
performance, and its short, medium and
long-term prospects
Governing structures and delegation
6. Primary role and responsibilities of
the governing body
The governing body should serve as the
focal point and custodian of corporate
governance in the organisation
The Company has controls to ensure the integrity of the Integrated Annual Report. It is
reviewed by the finance team, CFO, CEO, the Company Secretaries, senior management, JSE
sponsor, external auditor and the Audit Committee to ensure that the information is a true
reflection of the Group’s activities, prior to approval by the Board.
The Audit Committee provides the Board with additional assurance regarding the quality and
reliability of financial information and the financial statements of the Group. The Audit
Committee also has an oversight role in the integrated reporting process and takes into
account all factors and risks that may impact the integrity of the annual report.
The Board Charter sets out the Board’s responsibilities in relation to reporting and the
following are matters reserved for the Board:
(cid:3)(cid:79) Adoption of any material change to or departure from the accounting policies and practices
of the Company and its subsidiaries.
(cid:3)(cid:79) Approval of annual financial statements and interim reports and of any ancillary documents
related thereto.
The Board is the ultimate custodian of the governance framework, which commits the
Company and its representatives to act according to the highest standards of fairness,
accountability, responsibility, transparency, ethics and sustainability. The Board’s approach to
corporate governance strives to be stakeholder inclusive and based on good communication.
The Board is committed to the highest standards of corporate governance and believes that
accountability, integrity, fairness, transparency and integrated thinking are essential to the
Group’s long-term sustainability and to its ongoing ability to create value for investors and
other stakeholders.
The Board is responsible for aligning the strategic objectives, vision and mission of the Group
with performance and sustainability considerations. In terms of the Board Charter, approval of
the strategy, business plans and annual budgets and any subsequent material changes in
strategic direction or material deviations in business plans and/or annual budgets are matters
reserved for the Board. The Board ensures that risks impacting the business are adequately
examined and mitigated by management.
The Board, its committees and individual directors have unrestricted access to all Company and
Group information, the Company Secretaries, and may also consult external professional
advisers in executing their duties.
The number of meetings of the Board and its committees held and attendance thereat is set
out in the Integrated Annual Report.
The Board is satisfied that it has fulfilled its responsibilities in accordance with the Board
Charter during the financial year.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
KING IV APPLICATION CONTINUED
Governing structures and delegation continued
7. Composition of the governing body
The governing body should comprise
an appropriate balance of knowledge,
skills, experience, diversity and
independence for it to discharge its
governance role and responsibilities
objectively and effectively
Composition
The unitary Board, which both leads and controls the Company, comprises three executive
directors, being the Executive Chairman, CEO and CFO, and seven non-executive directors. Five
of the seven non-executive directors are independent of management. The Board is structured
in such a way such that there is a clear balance of authority, ensuring that no one director has
unfettered powers.
Size and composition of the Board
The size of the Board is regulated by the Company’s Articles of Association and directors are
appointed through a formal process. The Nomination Committee assists with the process by
identifying suitable candidates for appointment as directors. Directors are required to be
individuals of high calibre and credibility with the necessary skills and experience to bring
judgement independent of management, on issues of strategy, performance, resources,
diversity, standards of conduct and evaluation of performance.
The Nomination Committee also assesses the structure and composition of the Board on an
ongoing basis, taking into account the size of the Board and the knowledge, skills, experience
and demographics of the directors to ensure it is appropriately diversified with regard to
among others, gender, race, nationality, skills, geographic and industry experience, age,
personalities and other characteristics of directors. Merit and diversity are the core
considerations in ensuring that the Board and its committees have an appropriate blend of
perspectives to effectively and competently discharge their duties having regard to the
strategic direction of the Group. The Nomination Committee has adopted a Board level
diversification policy without introducing a voluntary target. At present, the two female
directors represent 20% of the total number of directors and 29% of the non-executive
directors.
As part of the assessment process, the Nomination Committee considers the relationship
between executive and non-executive directors and makes recommendations to the Board.
The Board believes that there is an appropriate balance between executive and non-executive
directors and is satisfied that the current members of the Board collectively possess the skills,
knowledge and experience required to effectively discharge the responsibilities of the Board to
achieve the Group’s objectives, promote shareholder interests and to create value for
stakeholders over the long term.
Independence
The Nomination Committee considers the independence of non-executive directors.
Consideration is given, among others, as to whether the individual non-executive directors are
sufficiently independent of the Company so as to effectively carry out their responsibilities as
directors, whether they are independent in judgement and character and that there are no
conflicts of interest in the form of contracts, relationships, shareholding, remuneration,
employment or related-party disclosures that could affect their independence.
Independent non-executive directors serving for more than nine years are subject to a rigorous
annual review by the Board to evaluate their continued independence. The Board assesses,
among others, the presence or absence of any interest, position, association or relationship
that could potentially influence or cause bias in their decision-making process.
Periodic rotation and nomination for re-election
In accordance with the Company’s Articles of Association, one-third of non-executive directors
must retire from office at each AGM. Retiring directors are eligible for re-election. Executive
directors are not subject to retirement by rotation.
The Nomination Committee reviews and assesses the composition of the Board on an annual
basis prior to recommending any individual director for election or re-election by shareholders
at the AGM.
Board support for re-election is not automatic and directors who are seeking election or
re-election are subject to a performance appraisal and the Board, upon recommendation by
the Nomination Committee, makes a determination as to whether it will endorse a director
standing for election or re-election.
Succession planning
The Board, assisted by the Nomination Committee, is responsible for overseeing succession
planning and ensuring that appropriate strategies are in place to ensure the smooth
continuation of roles and responsibilities of members of the Board and senior management.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
73
Governing structures and delegation continued
7. Composition of the governing body
continued
The governing body should comprise
an appropriate balance of knowledge,
skills, experience, diversity and
independence for it to discharge its
governance role and responsibilities
objectively and effectively
Induction and mentorship
Upon appointment, all new directors are provided with the necessary information to induct
them in their fiduciary duties and responsibilities. In this respect, the induction programme
typically includes Articles of Association, the Board Charter, committee terms of reference,
information on directors’ and officers’ insurance, a guide to the JSE Listings Requirements and
a memorandum on dealings in securities, market abuse and insider trading. Periodic visits are
arranged for new and existing non-executive directors to improve their understanding of the
Group’s operations.
All directors, new and existing, have access to the Company Secretaries for guidance as to the
manner in which their responsibilities should be discharged in the best interests of the Group.
It is the Executive Chairman’s role to mentor and enhance directors’ confidence, especially new
or inexperienced directors and to encourage them to make an active contribution at meetings
and to undergo training if required.
Conflicts of interests
Disclosure of other directorships, personal financial interests and any other conflicts of interest,
and those of related persons, in any matter before the Board is a standing Board agenda item
and a register is kept of all such disclosures. Directors recuse themselves from discussion on
any matters in which they may have a conflict of interest. Non-executive directors are required
to inform the Board of any proposed new directorships and the Board reserves the right to
review such additional appointments to ensure that no conflict of interest would arise and to
ensure that a director accepting a new appointment would be able to continue to fulfil his or
her obligations as a member of the Board.
Lead independent non-executive director
The Lead independent non-executive director chairs the Nomination Committee, Safety, Health
and Environment Committee and Social and Ethics Committee, facilitates meetings of the
non-executive directors and is a member of the Audit, Remuneration, Risk and Social and
Ethics Committees. He acts as a sounding board to the Executive Chairman and the CEO and
leads the non-executive directors in the appraisal of the Executive Chairman and CEO. He
provides leadership and advice to the Board when the Executive Chairman has a conflict of
interest, without detracting from the authority of the Executive Chairman. He acts as an
intermediary for the other Board members and shareholders with regard to concerns that have
not been resolved through the normal channels.
The Board is assisted in fulfilling its duties by well-structured committees, namely the Audit
Committee, Risk Committee, Remuneration Committee, Nomination Committee, Safety, Health
and Environment Committee, Social and Ethics Committee and New Business Committee.
These committees function according to the Board-approved terms of reference in executing
their mandates for which the Board remains ultimately responsible. The terms of reference of
all committees are available on the Company’s website.
The committees are appropriately constituted and all committees are empowered to obtain
such external independent advice as may be required to enable them to discharge their duties.
The majority of the directors on the committees are non-executive and independent.
Details of the various Board committees, their composition, role and responsibilities are set out
in the Integrated Annual Report.
The Board and its committees conduct annual or biennial self-evaluation of the performance of
the Board, its committees, the Executive Chairman, CEO, CFO, Company Secretary and
individual directors. The results of the evaluations are reviewed and considered by the
Nomination Committee, the Board and the respective committees. The Lead Independent
Director, assisted by the Company Secretary, coordinates the evaluation process. The Board is
satisfied that the evaluation process assists in the improvement of performance and
effectiveness of the Board.
8. Committees of the governing body
The governing body should ensure that its
arrangements for delegation within its
own structures promote independent
judgement, and assist with balance of
power and the effective discharge of its
duties
9. Evaluation of performance of the
governing body
The governing body should ensure that
the evaluation of its own performance
and that of its committees, its chair and
its individual members, support continued
improvement in its performance and
effectiveness
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
KING IV APPLICATION CONTINUED
Governing structures and delegation continued
10. Appointment and delegation to
management
The governing body should ensure that
the appointment of, and delegation to,
management contribute to role clarity and
the effective exercise of authority and
responsibilities
CEO
The Board’s authority conferred on management is delegated through the CEO and the
authority and accountability of management is accordingly considered to be the authority and
accountability of the CEO. The CEO is the highest decision-making officer in the Group and is
accountable to the Board for the successful implementation of the Group strategy and overall
management of the Group.
In addition to the CEO’s responsibilities relating to the development and implementation of the
Group strategy, he is responsible for:
(cid:3)(cid:79) recommending or appointing the executive members and ensuring proper succession
planning and performance appraisals
(cid:3)(cid:79) ensuring that the assets of the Company are properly maintained and safeguarded and not
unnecessarily placed at risk
(cid:3)(cid:79) setting the tone from the top in providing ethical leadership and creating an ethical
environment and not causing or permitting any decision, internal or external practice or
activity by the Company that may be contrary to commonly accepted business practice,
good corporate governance or professional ethics
(cid:3)(cid:79) acting as the chief spokesperson of the Company.
The CEO is not a member of any Board committees other than the Risk Committee, which
comprises the whole Board, and the Social and Ethics Committee. He attends the Audit,
Remuneration, Nomination Committee and Safety, Health and Environment Committee
meetings as an invitee, if required.
The non-executive directors monitor and evaluate the CEO in achieving the approved targets
and objectives and the results of such evaluation are considered by the Remuneration
Committee to guide it in its appraisal of the performance and remuneration of the CEO.
The Board and Nomination Committee oversee succession planning of the CEO and other
senior executives and officers.
The roles of the Executive Chairman and the CEO are not fulfilled by the same person and
there is a clear distinction between the roles and responsibilities of the Chairman and the CEO,
as set out in the Board Charter.
Subsidiary companies and delegation of authority
While boards of subsidiary companies function independently, the Company requires
decision-making involvement in a defined list of matters to ensure that material decisions are in
the interest of the Group.
The Group has approved delegation of authorities matrices in place, which govern the
delegation of authority and value limits within the Group and ensure that all transactions are
approved appropriately. The Board is satisfied that the approved delegation of authorities
matrices contribute to role clarity and the effective exercise of responsibilities.
Company Secretaries
The role of the Company Secretaries is, inter alia, to provide guidance and advice to the Board
with respect to statutory, regulatory and corporate governance-related matters. In addition to
their statutory duties, the Company Secretaries provide individual directors, the Board as a
whole, and the various committees with guidance as to the manner in which their
responsibilities should be discharged in the best interests of the Group.
The appointment and removal of the Company Secretaries are matters reserved for the Board
as a whole.
The Board formally assesses and considers the performance and qualifications of the Company
Secretaries and is satisfied that the Company Secretaries are competent, suitably qualified and
experienced, while maintaining an arm’s length relationship with the Board.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
75
Governance functional areas
11. Risk governance
The governing body should govern risk in
a way that supports the organisation in
setting and achieving its strategic
objectives
The Board has delegated responsibility to monitor risk activities of the Company to the Risk
Committee while remaining ultimately accountable. The Risk Committee comprises the full
Board. The Board has delegated the responsibility to design, implement and monitor Tharisa’s
risk management plan to the senior management. The Board, through the Risk Committee,
sets limits for the levels of risk tolerance and appetite and the implementation and
management of the risk management plan is monitored by the Risk Committee. Management
performs risk assessments on a continuous basis and provides regular feedback to the Risk
Committee and the Board.
A risk register is maintained by management and presented to the Risk Committee and the
Board to ensure continuous monitoring of the management of risk. The Risk Committee and
the Audit Committee provide assurance to the Board regarding the efficacy of the risk
management process, after consultation with the internal and external auditors, where
applicable.
12. Technology and information
governance
The governing body should govern
technology and information in a way that
supports the organisation setting and
achieving its strategic objectives
The Board Charter commits the Board to assuming ultimate responsibility for ensuring that
effective IT systems, internal control, auditing and compliance policies, procedures and
processes are implemented in order to avoid or mitigate key IT-related business risks. The
Board has delegated responsibility for the governing of IT to the Audit Committee. Assurance
on the IT systems and processes is provided by the Group’s internal auditors and findings are
reported to the Audit Committee, which ensures that any and all material findings are
addressed appropriately.
13. Compliance governance
The governing body should govern
compliance with applicable laws and
adopted, non-binding rules, codes and
standards in a way that supports the
organisation being ethical and a good
corporate citizen
Tharisa is incorporated in Cyprus and is subject to Cyprus Companies Law. The Board believes
that the Company is compliant with both Cyprus Companies Law and the Company’s Articles
of Association. Being listed on the JSE and LSE, Tharisa is subject to the JSE Listings
Requirement, and the requirements of King IV. It is also subject to the LSE Listings Rules and
Disclosure and Transparency Rules applicable to a standard listing, as well as Cyprus disclosure
and transparency legislation.
Compliance with financial reporting requirements and accounting standards falls within the
ambit of the Audit Committee.
The Group’s statutory and regulatory compliance resides with the Legal, Risk and Compliance
Officer and reports on compliance are presented to the Audit and Social and Ethics
Committees.
In addition to the formal authorisation processes required for dealing in the Company’s shares,
the Group has various policies and procedures in place governing the declaration of interests,
accepting and granting of gifts and approved delegation of authorities matrices, governing the
delegation of authority and value limits within the Group.
The Board is also of the opinion that the Company is compliant with the JSE Listings
Requirements and King IV in all material respects, other than having an Executive Chairman and
not having an in-house independent internal audit function. The former has been mitigated by
the appointment of David Salter as the Lead Independent Director and the latter by the
appointment of Deloitte as the internal auditor of the Group.
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
KING IV APPLICATION CONTINUED
Governance functional areas continued
14. Remuneration governance
Remuneration policy
The Remuneration Committee ensures that the policies around the remuneration of directors
and executives are fair and effected responsibly. The remuneration policy applies to all
employees who are permanently employed and is not applicable to employees of third-party
contractors. The non-executive directors’ fees are determined by the Board.
The objective of the Group’s remuneration policy is to establish responsible, fair and
equitable reward, which does not discriminate on the basis of race, gender, sex,
pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual
orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture,
language, birth or on any other arbitrary ground.
The Group’s remuneration policy reflects the dynamics of the market and the context in which
the Group operates. The policy plays a vital role in attracting, motivating and retaining
employees, management and directors with the necessary skills to effectively manage
operations and grow the business, creating a strong performance-orientated environment and
aligning employee and shareholders’ interests. The Group regularly seeks and uses
remuneration survey services.
The Group aims to create and enforce a high-performance culture that motivates employees to
achieve more than just satisfactory levels of performance by differentiating between excellent
and mediocre performance. By ensuring that employees are recognised and rewarded for their
performance in a fair and equitable manner, the Group strives to remunerate employees
equitably according to the value they contribute to the Group.
Basic remuneration packages and benefits are set at a competitive level by benchmarking
prevailing market rates in the mining industry and are reviewed on an annual basis.
Guaranteed cost-to-company remuneration consists of a cash component plus certain benefits.
Short-term and long-term incentives are geared to a number of performance factors in the
business and achievement of individual performance. The remuneration philosophy establishes
accountability by linking total reward to business objectives in a fair and transparent manner in
a bid to find a balance between shareholder return requirements, affordability and
incentivisation.
Remuneration policy and remuneration implementation report
The Company provides full disclosure of remuneration of executive and non-executive directors
as well as key management, as required by the JSE Listings Requirements and King IV.
The remuneration policy is published in the remuneration policy and remuneration
implementation report, which forms part of the Integrated Annual Report, and is subject to
separate non-binding advisory votes by shareholders at the AGM.
15. Assurance
The governing body should ensure that
assurance services and functions enable
an effective control environment, and that
these support the integrity of information
for internal decision making and of the
organisation’s external reports
The Audit Committee oversees the combined assurance framework and receives regular
reports on assurance matters from the external auditor, internal auditors and executive
management.
The Audit Committee oversees the internal audit function, including reviewing the
effectiveness of internal controls, approving the annual internal audit plans and fees, and
recommending appointment of the internal auditors.
The Audit Committee approves the non-audit services provided by the external auditors,
recommends approval of the audit fees, considers the effectiveness and independence of the
external auditor, and recommends the appointment/reappointment of the external auditor.
The Risk Committee and the Audit Committee provide assurance to the Board regarding the
efficacy of the risk management process, after consultation with the internal and external
auditors, where applicable.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
77
Stakeholder relationships
16. Stakeholder relationships
In the execution of its governance role
and responsibilities, the governing body
should adopt a stakeholder-inclusive
approach that balances the needs,
interests and expectations of material
stakeholders in the best interests of the
organisation over time
The Board has delegated authority to management to proactively deal with stakeholder
relationships.
Stakeholder perceptions are closely managed through engagement on multiple levels, which
allows management to manage and mitigate any potential issues, reducing the likelihood of
reputational risk.
The Board and management are striving to achieve the appropriate balance between various
stakeholder groupings, in the best interests of the Company.
The Cyprus Companies Law and the JSE Listings Requirements contain appropriate protection
of shareholders and the Articles of Association do not remove such protection. Senior
management and the investor relations team ensure that all shareholders are treated equitably.
Senior management ensures that timely, relevant and accurate information is provided to all
stakeholders to maintain their trust and confidence in the Group.
The CEO and CFO, (supported by the investor relations function) interact with institutional
investors on a regular basis on the performance of the Group through presentations and
scheduled meetings. The Company also participates in selected international conferences and
conducts roadshows internationally.
A wide range of information and documents, including copies of presentations given to
investors, Integrated Annual Reports and notices of shareholder meetings, are made available
on the Company’s website www.tharisa.com on an ongoing basis. Shareholders are
encouraged to visit the investors’ section of the website frequently to be kept informed of
relevant shareholder information.
The Board encourages directors, shareholders and relevant stakeholders to attend the AGM
and other shareholders’ meetings. The AGM is also attended by the chairmen of the Audit,
Remuneration and Social and Ethics committees and the designated partner responsible for the
external audit.
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78
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT
Statement from the Chairman of the Remuneration Committee
SUMMARY OF YEAR
The focus of the Remuneration
Committee (the “committee”) during the
year has been on ensuring that Tharisa’s
remuneration policy and the
implementation of the policy remain
relevant in the context of the disruption
caused by the COVID-19 pandemic. The
committee has deliberated at length on
the impact of the pandemic on the
business and how this should be reflected
in decisions around remuneration.
We have been impressed by the resilience
of the business and the leadership shown
by Tharisa’s executive team during an
exceptionally challenging period. As a
consequence of the South African
national lockdown and to conserve
liquidity during this time, bonuses, other
than for direct production related
bonuses, were suspended and a freeze
was placed on recruitment. As the risk
adjusted lockdown status was reduced
and operations returned to full
production capacity, the short term bonus
schemes were reintroduced with effect
from 1 October 2020. In recognition of
the performance of the employees, the
committee agreed to the payment of the
backdated short term incentive scheme
for the last two quarters of FY2020. The
committee is pleased to advise that
throughout the South African national
lockdown period, salaries were paid in
full and there were no retrenchments.
During the year the committee approved
a further award under the Share Award
Plan, Tharisa’s existing long-term
incentive scheme. The Share Award Plan
provides for Conditional Awards of shares
and Appreciation Rights to be granted to
selected members of staff, although for
the 2020 award we limited the grants to
Conditional Awards only. This was done
to simplify the award structure and also
ensure a prudent approach to managing
share allocations in the plan. The overall
structure of the Conditional Awards
granted in 2020 is the same as those
granted in previous years in that the
awards are split into three annual
tranches, with performance measured
separately for each tranche. In addition,
we retained the safety “gatekeeper” such
that there must be no fatality at the
Tharisa Mine during the vesting period.
We did, however, amend the
performance conditions for the award
and adopted a different approach to that
of previous years, as explained below:
(cid:3)(cid:79) The ability for a portion of each
tranche to vest based on continued
employment only has been removed,
recognising that this feature is not
consistent with international best
practice.
(cid:3)(cid:79) An increased weighting has been
applied to the metrics covering PGM
and chrome concentrate production,
recognising the importance of
production to investors over the short
to medium-term. The targets have also
been structured such that vesting will
depend upon Tharisa achieving market
guidance over each vesting period.
(cid:3)(cid:79) Separate targets have been applied
relating to the construction of, and
production from, the Vulcan Plant. This
is a project of strategic importance for
Tharisa and the committee wishes to
ensure that management is
appropriately rewarded for successful
project completion.
Further details of the targets are included
in the remuneration implementation
report.
For the financial year beginning
1 October 2020, the committee will
continue to apply the existing
remuneration policy, save for the Share
Award Plan. A key change to the policy
for the new financial year relates to the
proposal to introduce a new Long-Term
Incentive Plan.
NEW LONG-TERM INCENTIVE PLAN
As advised in the remuneration report in
the 2019 Integrated Annual Report, the
committee engaged an independent
consulting firm, Korn Ferry, to assist with
the design of a new long-term incentive
arrangement to support Tharisa’s
strategic objectives while also reflecting
the expectations of leading institutional
investors. This work was undertaken
during the 2020 financial year and
shareholders will be asked to approve a
new Long-Term Incentive Plan at the
AGM to be held on 10 February 2021.
Assuming shareholders approve the new
plan, no further awards will be granted
under the existing Share Award Plan.
The committee believes that the new plan
will motivate and retain key employees,
while strengthening the relationship
between long-term performance and
reward. The plan is designed to be fully
consistent with good practice for
companies listed in Johannesburg and
London and introduces a number of
features which help create long-term
alignment with institutional investor
expectations.
Under the new Long-Term Incentive Plan,
executive directors and other members of
senior management will receive
Performance Share Awards. These have a
similar structure to the Conditional
Awards granted under the existing Share
Award Plan. Appreciation Rights will not
be available under the new Long-Term
Incentive Plan. It is the committee’s
current intention to make grants of
Performance Share Awards on an annual
basis.
Central to the operation of the new plan
is a shift to measuring performance over
a three-year period, consistent with
standard practice for incentive schemes
of this kind at listed companies in both
South Africa and the UK. This differs from
the approach under the current Share
Award Plan, where performance is
assessed over three one-year periods for
each award of shares. Measuring
performance over three years ensures
focus on continued performance over a
longer-term period. In addition, and
recognising the preferences of
institutional investors based in the UK, a
separate post-vesting holding period will
apply to Performance Share Awards
granted to executive management. This
will mean that any shares which vest at
the end of the three-year performance
period must be held for a minimum of a
further two years before they can be sold
(this excludes any shares which are
required to be sold to satisfy tax liabilities
due at the point of vesting). Once vested,
these shares will not be forfeited if the
participant resigns within the two-year
period.
Among other things, the new plan also
includes extended recovery and
withholding provisions, giving the
committee the flexibility to apply
THARISA PLC INTEGRATED ANNUAL REPORT 2020
79
clawback to awards in a broader set of
circumstances than currently applies
under the Share Award Plan.
The new plan also provides the flexibility
for the committee to grant Restricted
Stock Awards to employees, recognising
that this is common practice among
global companies and so this approach
will enable Tharisa to compete on a level
playing field for the best executive talent.
The Committee intends to use Restricted
Stock Awards for selected members of
staff who will not receive Performance
Share Awards. Executive directors will not
receive Restricted Stock Awards.
More information on the terms of the
new plan is included in the remuneration
policy section of this report and a detailed
summary of the rules of the plan is
included in the explanatory notes to the
notice of AGM.
Subject to shareholder approval of the
new plan, the committee proposes to
make the first Performance Share Awards
under the plan to selected participants
(including executive directors) in early
2021. The intention is to grant initial
awards at a level of between 80% and
125% of cost to company remuneration
to executive management.
The performance conditions to apply to
the first awards are set out below:
(cid:3)(cid:79) Full vesting of the awards is subject to
there being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during the
vesting period, the committee will
assess the event and determine what
reduced portion of the award, if any,
should vest based on performance
against the conditions described below.
(cid:3)(cid:79) Subject to there being no fatality
during the vesting period, the vesting
of the awards will be subject to the
following conditions:
– 33.33% of the vesting is conditional
on achieving market guidance in
respect of PGM production as
advised to the market at the
commencement of the financial year
– 33.33% of the vesting is conditional
on achieving market guidance in
respect of chrome concentrate
production as advised to the market
at the commencement of the
financial year
– 33.34% of the vesting is conditional
on the achievement of certain
specific long-term strategic targets
for the business as determined by
the committee at the time of
granting the award
As noted above, performance will be
measured over a three-year period. For
the first awards, this three-year period
will be the three financial years starting
1 October 2020.
In considering the achievement of the
production targets, the committee will
also have regard to EBITDA performance
over the performance period. The
committee will have the discretion to
reduce the level of vesting against the
production measures if it is not satisfied
with EBITDA performance over the period
based on the Board’s planning at the start
of the performance period. This is
intended to reduce the risks of executives
being incentivised on the basis of
“production at all costs”. In addition, and
notwithstanding the extent to which any
performance targets are satisfied, the
committee also has the ability to reduce
the level of vesting to ensure that the
ultimate level of vesting is reflective of
the underlying business performance of
the Group or wider circumstances.
In addition to setting out actual
performance against the three primary
performance targets noted above on the
vesting the awards in the relevant
remuneration implementation report, the
committee will also provide an
appropriate narrative of the wider factors
considered when determining the vesting
result (e.g. including safety over the
period and EBITDA performance).
The committee is satisfied that this
framework provides an appropriate mix
of targets for the first award under the
new Long-Term Incentive Plan. The
committee will review on an annual basis
the measures and targets to apply to
future awards under the plan.
It is worth highlighting that the
committee did consider whether to apply
a Total Shareholder Return (TSR) measure
to a portion of the award, recognising
that TSR links reward closely to the
shareholder experience and is commonly
used in long-term incentives by
companies in the mining sector. However,
we have not gone down this route at this
stage as we have been unable to identify
an appropriate number of genuine
comparator companies against which we
can measure performance, and there is
limited correlation between the historic
TSR performance of other listed miners
and Tharisa. As the Company continues
to develop we will actively review
whether it would be appropriate to use a
TSR measure for long-term incentive
awards to be made in the future.
NON-BINDING ADVISORY VOTE AT
THE AGM
In terms of King IV recommendations,
and the JSE Listings Requirements, the
Company’s remuneration policy and the
remuneration implementation report,
must be tabled for two separate
non-binding advisory votes at every AGM.
The purpose of the non-binding advisory
votes is to enable shareholders of the
Company to express their views on the
Group’s remuneration policy, and on its
implementation.
At the AGM held on 29 January 2020,
the resolutions to approve the
remuneration policy and the
remuneration implementation report
were passed, with both resolutions
receiving 86.4% support. The
Remuneration Committee and the Board
were thankful for this strong level of
support from shareholders, and for the
feedback received from those
shareholders who voted against (which
included requesting the introduction of a
two-year holding period on vested
long-term share awards which, as noted
above, has been included as a feature of
the new plan).
At the forthcoming AGM to be held on
10 February 2021, shareholders will again
be asked to approve the remuneration
policy and the remuneration
implementation report by way of separate
resolutions. In addition, and as noted
above, approval will also be sought for
the new Long-Term Incentive Plan. It is
the recommendation of the
Remuneration Committee and the Board
that the remuneration policy, the
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80
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT CONTINUED
remuneration implementation report and
the new Long-Term Incentive Plan be
approved.
A summary of the principal terms of the
proposed new Long-Term Incentive Plan
can be found on pages 149 to 150,
which forms part of the Notice of annual
general meeting.
REMUNERATION COMMITTEE
All members of the committee are
independent non-executive directors. The
committee is chaired by Antonios
Djakouris and other members of the
committee are David Salter, Carol Bell and
Roger Davey.
The responsibilities and duties of the
committee are governed by terms of
reference that are aligned with the
recommendations of King IV and
incorporate best practice. The terms of
reference are available on the Company’s
website.
While the committee establishes,
maintains, reviews and governs the
Group’s remuneration policy, it focuses
mainly on the remuneration of executive
directors, executives and senior
management. The committee considers
the remuneration framework of the
Executive Chairman, CEO, CFO and other
members of the executive management
of the Company and its subsidiaries, with
reference to international and local
benchmarks.
The committee also considers the rules
and performance requirements for the
Group-wide cash bonus scheme,
allocations in terms of the Group’s
long-term incentive schemes,
discretionary bonuses and certain other
employee benefits and schemes.
Both internal and external factors are
taken into account in determining the
remuneration framework, to ensure
ongoing relevance and appropriateness in
the context of the macroeconomic
climate and the Group’s business
objectives, among others:
(cid:3)(cid:79) inflation
(cid:3)(cid:79) commodity prices
(cid:3)(cid:79) bargaining unit negotiations and
settlements in the industry
(cid:3)(cid:79) production
(cid:3)(cid:79) position on the cost curve
(cid:3)(cid:79) profitability and cash flows
(cid:3)(cid:79) skills availability and retention
(cid:3)(cid:79) individual productivity and key
performance indicators
During the year, the committee
(cid:3)(cid:79) reviewed various aspects of the Group’s
remuneration policy, structure, and
performance-based remuneration
schemes
(cid:3)(cid:79) considered the fixed total guaranteed
packages and variable short-term and
long-term incentives of executive
management against market data of a
comparator group comprising
companies with a similar profile to
Tharisa from an investor’s point of view
and approved annual increases for all
employment levels outside of the
bargaining unit
(cid:3)(cid:79) reviewed and approved targets for the
cash bonus scheme
(cid:3)(cid:79) reviewed and approved the vesting
conditions for the awards made during
the year under the Group’s existing
long-term incentive scheme, and
approved the awards granted under
the scheme
(cid:3)(cid:79) considered a proposal from
independent external advisers on the
terms of a new long-term incentive
plan for executive directors and other
senior executives.
Members of the committee are entitled
to seek independent professional advice
on any matter pertaining to the Company
and the Group, at the Company’s
expense.
The committee met five times during the
year under review.
GROUP REMUNERATION POLICY
Objective and philosophy
The objective of the Group’s
remuneration policy is to establish
responsible, fair and equitable reward,
which does not discriminate on the basis
of race, gender, sex, pregnancy, marital
status, family responsibility, ethnic or
social origin, colour, sexual orientation,
age, disability, religion, HIV status,
conscience, belief, political opinion,
culture, language, birth or on any other
arbitrary ground.
The Group’s remuneration policy reflects
the dynamics of the market and the
context in which the Group operates. The
policy plays a vital role in attracting,
motivating and retaining high-calibre
human resources with the necessary skills
to effectively manage operations and
grow the business, creating a strong
performance-orientated environment and
aligning employee interests with those of
the Group’s stakeholders in order to
achieve the Group’s strategic objectives
and to promote an ethical culture and
responsible citizenship among all Group
companies and employees.
Furthermore, it aims to encourage and
support a high performance and safety
conscious culture while remaining flexible
and adaptable to changes in the business
and the market in which the Group
operates. The Group regularly refers to
independent remuneration surveys and
benchmarks.
The remuneration policy applies to all
employees who are permanently
employed and is not applicable to
employees of third-party contractors. The
policy seeks to set out principles and
practices around the management of
employee remuneration.
Executive and employee remuneration
comprises fixed and variable components,
including:
(cid:3)(cid:79) a fixed basic annual package, including
benefits
(cid:3)(cid:79) variable performance bonuses
(cid:3)(cid:79) ownership of shares through
participation in a long-term incentive
scheme.
The Group aims to create and enforce a
high-performance culture that motivates
employees to achieve more than just
satisfactory levels of performance by
differentiating between excellent and
mediocre performance. By ensuring that
employees are recognised and rewarded
for their performance in a fair and
equitable manner, the Group strives to
remunerate employees equitably
according to the value they contribute to
the Group.
The continual striving for, and
achievement of, increased volumes
mined, improved plant recoveries and
increased production together with the
retention of high calibre employees,
supported by low management turnover
are indicators that the policy is being
achieved.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
81
There is no dominant bargaining unit
with the Association of Mineworkers and
Construction Union of South Africa
(‘AMCU’), National Union of Mineworkers
(‘NUM’) and Solidarity being represented
on the mine. As at 30 September 2020,
some 73% of employees eligible to
belong to a union were unionised with
27% not being members of any of the
bargaining units.
Executive directors
The remuneration of the executive
directors is consistent with the
remuneration policy principles as set out
above. Each director is remunerated fairly
and the remuneration paid to each
director takes into account the individual
director’s level of responsibility, skills and
experience. All executive directors have
employment contracts, are remunerated
in accordance with their function and
position, and are not remunerated for
their roles as directors.
Executive directors are subject to the
Group’s standard terms and conditions of
employment with notice periods being six
months. In line with the remuneration
guidelines of King IV, no executives have
extended employment contracts or
special termination benefits. Should the
Group elect to invoke the non-compete
provisions of the employment contracts
on termination, payments linked to the
duration of the non-compete will be
made.
Remuneration of key positions such as
CEO and CFO is determined by making
reference to remuneration surveys and
benchmarking to peer companies in the
mining sector for companies listed on the
JSE and the LSE.
The executive directors are eligible to
participate in the short-term cash bonus
scheme and long-term incentive
arrangements, as set out below.
While ensuring that the total
remuneration of executive management
remains fair and reasonable in the context
of the achievement of the Group’s
strategic objectives, the Remuneration
Committee is committed to reviewing
and monitoring the overall Group
remuneration and wage gap.
Fixed remuneration
Across the Group, guaranteed cost-to-
company (fixed) remuneration packages
and benefits (guaranteed pay) are
determined per job grade, set at a
competitive level by benchmarking
prevailing market rates in the mining
industry and are reviewed on an annual
basis. The objective is to set levels of fixed
remuneration for South African
employees based on the 50th percentile
for mining companies in South Africa and
the 75th percentile for all companies
nationally in South Africa, the purpose
being to broaden the sample size and to
include mining areas situated outside of
the major mining economic hubs. The
mining industry is, however, a very
competitive market with a scarcity of
appropriate skills and top-end salary
scales are often paid to attract and retain
critical skills. While the employee
remuneration is set at a guaranteed
cost-to-company amount, the employee
is required to participate in the
compulsory group provident fund,
medical aid and risk benefits with the
costs thereof being deducted from the
cost to company amount. The risk
benefits include life cover, disability,
funeral and dread disease cover. Various
other allowances are paid at certain job
levels or to certain job categories.
Salaries are reviewed annually, taking into
consideration the economic environment,
country inflation, overall business and
financial performance of the Group,
affordability, market trends, individual
merit and scarcity of skills.
Variable remuneration
Short-term and long-term incentives are
geared to a number of performance
factors in the business and achievement
of individual performance, and do not
form part of guaranteed remuneration.
The remuneration philosophy establishes
accountability by linking total reward to
business objectives and execution thereof,
in a fair and transparent manner in a bid
to find a balance between shareholder
return requirements, affordability and
incentivisation. Actual participation in
both short-term and long-term incentive
schemes remains subject to approval by
the Remuneration Committee.
Short-term cash bonus scheme
The Group has implemented a short-term
cash bonus scheme for all bands of
employees. The primary purpose of the
cash bonus scheme is to create a culture
of zero tolerance concerning non-
compliance with safety requirements in
supporting injury free, sustainable
operations. A further objective of the
bonus scheme is to reward superior
performance, drive a culture of cost
efficiency, and enhance teamwork and
productivity.
Throughout all employee grades, the cash
bonus is calculated at 15% of the
individual employee’s guaranteed annual
remuneration package for on-target
performance, capped at a maximum of
25% of the employee’s guaranteed
remuneration package for ‘stretch’
performance. These bonuses are not
guaranteed, but are dependent on the
achievement of safety standards and are
payable only upon the achievement of
production targets and personal
performance standards. The quantum of
bonuses is calculated in terms of a
number of different bonus formulae,
specific to an individual’s area and grade
of employment. The bonus formulae
include a number of factors, with varying
weighting, including:
(cid:3)(cid:79) safety and fatality factors, which take
into account the number of lost-time
injuries (LTIs) and fatalities at the
Tharisa Mine during the bonus period
(cid:3)(cid:79) the value-added factor applicable to
employees, which is a combined
calculation of the performances of a
number of measures relating to the
mining and processing plants at the
Tharisa Mine compared to budget,
such as reef tonnes delivered to ROM
pad, chrome feed grade and PGM feed
grade, tonnes milled, plant running
time, chrome recoveries, PGM
recoveries with a different percentage
being allocated to threshold, on-target
and exceptional performance, and a
zero percentage being applied for
unacceptable performance
(cid:3)(cid:79) the key performance indicator (‘KPI’)
factor, which is dependent on the
individual’s performance assessment for
the applicable bonus period
(cid:3)(cid:79) the profit factor, which is determined
with reference to the achievement of a
specified EBITDA for the applicable
bonus period as determined by the
Remuneration Committee
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82
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT CONTINUED
(cid:3)(cid:79) the disciplinary factor, which is
determined with reference to the
aggregate number of written warnings
received by an individual as a result of
misconduct in terms of the Group’s
policies and procedures.
In addition to the fatality and safety
factors, the bonus formula for executive
management (including executive
directors) includes the performance factor
applicable to executive management,
which is dependent on:
(cid:3)(cid:79) the executive’s KPI factor
(cid:3)(cid:79) the value-added factor for executive
management, which is measured with
respect to the achievement of annual
Group consolidated EBITDA against
budget for the bonus period, with a
different percentage being allocated to
on-target and exceptional
performance, and zero percentage
being allocated for unacceptable
performance.
The bonuses are payable bi-annually in
arrears for executive management
(including executive directors), quarterly
in arrears for senior management,
management and employees graded
Patterson grade E2 and above, and
monthly in arrears for employees of
grades E1 and below.
For employees at the Tharisa Mine
working in various mining disciplines
(drilling, blasting, loading and hauling,
and engineering) a bonus scheme is in
operation which pays bonuses based on
individualised targets and performance,
rather than on generic principles. The
bonuses are paid weekly and bonus
calculations are based on individual
performance per shift or per day,
ensuring that employees are motivated to
perform on a daily basis.
An employee will not be entitled to any
bonus in the event that prior to the
payment date, the employee had been
suspended pending a disciplinary enquiry
or had been given a final written warning
in terms of the employer company’s
policies and procedure in the quarter
applicable to the bonus. If an employee
ceases to be employed before the
payment date of the cash bonus, the
bonus will be forfeited.
However, if an employee’s employment
with any employer company terminates
before the end of the quarter applicable
to the bonus due to death, ill-health,
injury or disability as established to the
satisfaction of the Remuneration
Committee, retirement, retrenchment, or
such other reason provided for in the
rules of the cash bonus scheme, such
employee will qualify for a pro rata
bonus, based on the number of days
served in the relevant bonus period.
The Remuneration Committee reviews
and approves bonus targets to ensure
that they are fair and transparent and
that they support the aim to achieve
maximum shareholder return.
Long-term incentives: Share Award
Plan (existing plan)
To date, long-term incentives have been
provided through the Tharisa Share
Award Plan, approved by shareholders in
2014.
Under the Share Award Plan, the
following awards may be made:
(cid:3)(cid:79) Conditional Awards represent a
specified number of shares in the
Company, contingent on the
achievement of performance
conditions established by the
Remuneration Committee. The vesting
dates for these awards are also
established by the Remuneration
Committee and vesting takes place in
three equal tranches.
(cid:3)(cid:79) Appreciation Rights, which are rights to
receive such number of shares in the
Company equal to the increase in the
market price of such shares on the JSE,
between the date of grant and the
date of exercise of the award. The
award may be exercised between the
vesting date as set by the
Remuneration Committee and the fifth
anniversary of the date of grant.
Vesting of Appreciation Rights may also
be contingent upon the achievement
of performance conditions set by the
Remuneration Committee and vesting
takes place in two equal tranches.
Performance conditions have been
attached to the vesting of the Conditional
Awards and Appreciation Rights awarded
to various employees at Paterson grade
C5 and above, including:
(cid:3)(cid:79) the achievement of certain minimum
safety standards to reinforce the
Tharisa Group’s emphasis on safety and
the strive for a zero harm work
environment, the vesting of all tranches
of the Conditional Awards and
Appreciation Rights awarded in terms
of the Share Award Plan being
conditional upon there being no
fatality at the Tharisa Mine during the
vesting period
(cid:3)(cid:79) continued employment in good
standing at the date of vesting
(cid:3)(cid:79) the achievement of certain PGM and
chrome concentrate production metrics
(cid:3)(cid:79) the achievement of the individual key
performance metrics set for the
individual participant
(cid:3)(cid:79) the achievement of certain financial
metrics.
The number of awards and the
performance conditions attached thereto
are determined by the Remuneration
Committee at the date of grant and
included in the notice of the award. A
summary of the awards granted to the
executive directors and the performance
conditions attached to the awards is
included in the remuneration
implementation report.
The Share Award Plan makes provision
for the partial vesting of awards in the
event of a participant ceasing to be in the
employ of the Group due to death, injury,
disability, ill-health, redundancy or
retirement and in the event of certain
corporate actions, including an offer to
acquire the entire share capital of the
Company, a scheme of arrangement,
restructuring and voluntary winding up of
the Company. Provided that the
performance and safety metrics are met,
the vesting is prorated based on the
number of days served during the
relevant vesting period under these
circumstances.
The Share Award Plan also makes
provision for individual participant and
plan limits. On an individual basis, the
aggregate number of shares realisable by
any individual participant may not exceed
1 273 903 shares, being 0.5% of the
ordinary issued share capital at the date
of approval of the Share Award Plan. The
aggregate number of shares that can be
issued to all participants, is limited to 12
739 032 shares, being 5% of the ordinary
issued share capital at the date of
approval of the Share Award Plan. Vested
awards may, at the election of the
Remuneration Committee, be either
share-settled or cash-settled as provided
THARISA PLC INTEGRATED ANNUAL REPORT 2020
83
in the rules of the Share Award Plan. To
date, the preferred approach has been to
issue treasury shares to settle vested
awards.
During the financial year, the Company
issued 5 000 000 new ordinary shares
into the treasury share account and
transferred 1 865 992 ordinary shares
from its treasury shares account to satisfy
the vesting of the Conditional Awards
and exercise of Appreciation Rights by the
participants of the Share Award Plan.
There is currently no minimum
shareholding requirement for executive
directors and executive management.
Long-term incentives: Long-Term
Incentive Plan (new plan)
As set out in the Statement from the
Chairman of the Remuneration
Committee, a new Long-Term Incentive
Plan will replace the Share Award Plan
following shareholder approval at the
AGM on 10 February 2021.
Under the Long-Term Incentive Plan, the
following awards may be made:
(cid:3)(cid:79) Performance Share Awards represent a
right to acquire a specified number of
shares in the Company, contingent on
the achievement of performance
conditions established by the
committee. The vesting dates for these
awards are also established by the
committee and will be at least three
years from the date of grant.
(cid:3)(cid:79) Restricted Stock Awards represent a
right to acquire a specified number of
shares in the Company conditional on
the achievement of performance
conditions. The vesting dates for these
awards are established by the
committee.
Performance Share Awards are intended
to be granted to executive directors and
other senior executives. Restricted Stock
Awards will be granted to selected other
employees at the discretion of the
committee typically with a Patterson
Grade E2 and above.
The number of awards and the
performance conditions attached thereto
will be determined by the committee at
the date of grant and included in the
notice of the award. The committee will
set targets for the Performance Share
Awards which are challenging but
achievable and which are consistent with
Tharisa’s long-term strategic goals. A
summary of the measures which the
committee intends to apply to the first
awards are set out on page 149. These
include targets linked to PGM and
chrome concentrate production as well as
strategic measures, always subject to a
profitability criteria, all of which are
critical to the successful implementation
of Group strategy over the longer-term.
Awards will also be reduced in the event
of a fatality at the Tharisa Mine during
the vesting period.
Notwithstanding the extent to which any
performance targets are satisfied, the
committee also has the ability under the
rules of the plan to reduce the level of
vesting to ensure that the ultimate level
of vesting is reflective of the underlying
business performance of the Group or
wider circumstances.
Dividends will be payable on all vested
shares.
The Long-Term Incentive Plan provides for
a post-vesting holding period to be
applied to awards at the discretion of the
committee. It is the committee’s intention
that such a holding period will only be
applied to Performance Share Awards
granted to executive management, and
will require these participants to hold any
shares which vest at the end of the
three-year vesting period for a further
two years (subject to any sales which are
required to settle any tax liabilities due at
the point of vesting).
The Long-Term Incentive Plan makes
provision for the partial vesting of awards
in the event of a participant ceasing to be
in the employ of the Group due to death,
injury, disability, ill-health, redundancy,
retirement and in the event of certain
corporate actions, including an offer to
acquire the entire share capital of the
Company, a scheme of arrangement and
voluntary winding up of the Company. In
these circumstances, and subject to the
achievement of the relevant performance
conditions, awards will vest and will be
subject to a reduction based on the
period between the award date and the
date of leaving.
The Long-Term Incentive Plan includes
recovery and withholding provisions
which permit the committee to require
individuals to repay amounts in the event
of the occurrence of certain specific
circumstances, including a material
misstatement of financial results, an error
or miscalculation in the calculation of
awards, fraud or gross misconduct having
been committed by the relevant
individual, or actions by the relevant
individual which lead to corporate failure
or material reputational damage having
been suffered by the Company.
The Long-Term Incentive Plan also makes
provision for individual participant and
plan limits. On an individual basis, the
aggregate number of Performance Share
Awards and/or Restricted Stock Awards
which may be held by any individual
participant may not exceed 2 750 000
shares, being 1.0% of the ordinary issued
share capital at the anticipated date of
approval of the Long-Term Incentive Plan.
The aggregate number of shares that can
be issued to all participants is limited to
13 750 000 shares, being 5% of the
ordinary issued share capital at the
anticipated date of approval of the
Long-Term Incentive Plan. Vested awards
may, at the election of the committee, be
either share-settled or cash-settled as
provided in the rules of the Long-Term
Incentive Plan.
No Award shall be granted under the
Long-Term Incentive Plan more than ten
years after the Adoption Date.
A summary of the rules of the new
Long-Term Incentive Plan is set out in the
explanatory notes to the notice of Annual
General Meeting.
Remuneration of non-executive
directors
Appointment of non-executive directors is
governed by the Company’s Articles of
Association and the terms of
appointment are set out in a formal letter
of appointment. The initial term of
appointment is three years and
appointment can be extended thereafter.
Continuation of appointment is
conditional upon satisfactory
performance, retirement by rotation and
re-election at AGMs as required by the
Articles of Association.
Appointment as a non-executive director
may be terminated at any time by the
Company in accordance with the Articles
of Association and Cypriot Companies
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84
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT CONTINUED
Law, or upon resignation. Upon
termination of the appointment or
resignation as a director for any reason,
non-executive directors are not entitled to
any damages for loss of office and no fee
is payable in respect of any unexpired
portion of the term.
Non-executive directors are entitled to
receive fees for their time, responsibilities
and services as non-executive directors.
An annual fee is paid to all directors and
additional fees are paid based on
membership and chairmanship of Board
committees. Non-executive directors’ fees
are determined by the Board and are
payable quarterly in arrears. Non-
executive directors are not entitled to
bonuses or to participate in the Group’s
short-term and long-term incentives. The
office of a non-executive director is not
pensionable.
The Board has agreed to maintain the
non-executive directors’ fees for the 2020
financial year unchanged, as follows:
US$
Annual fee
Committee
chairman
Committee
member
FY2020
FY2019
42 500
42 500
25 000
25 000
18 000
18 000
REMUNERATION IMPLEMENTATION
REPORT
This remuneration implementation report
explains the application of the
remuneration policy for the 2020
financial year and sets out the
remuneration received by the directors in
respect of the year.
The Group Remuneration Policy was
complied with during the year under
review.
Fixed remuneration
The executive directors guaranteed
remuneration, which is USD
denominated, was adjusted with effect
from 1 October 2019 by a cost of living
factor of 2%. The majority of the
employees of the group are based in
South Africa and the guaranteed
remuneration is paid in ZAR. Similarly, the
employees at Patterson Grade C5 and
above received a cost of living factor
adjustment with effect from 1 October
2019 of 5%.
Short-term incentives
Due to the operational uncertainty during
the South African national lockdown as a
consequence of the COVID-19 pandemic
and to conserve liquidity, the committee
suspended the payment of the short term
incentives to employees, other than for
production specific bonuses that were
paid to employees working on the mine
during this period. Following the easing
of the risk adjusted lockdown provisions,
the committee lifted the suspension of
the bonus payments with effect from 1
October 2020. In addition, based on the
operational performance of the Tharisa
Mine during this period, the committee
agreed to the backdating of the bonus
for the last two quarters of the financial
year. In calculating the performance
metrics, adjustments were made by the
committee to take account of the period
of reduced production during the
lockdown period i.e. normalising the
production over this period as well as
taking account of the unseasonally heavy
rainfall. The EBITDA metric was not
adjusted and, while the production
metrics were met in part, the profitability
metric was not met. The bonuses were
calculated and provided for on this basis.
Long-term incentives
Awards of long-term incentives have to
date been granted under the Share
Award Plan. Details of the performance
conditions attaching to awards granted
under this plan and still subject to vesting
are set out below.
2015 award
The second awards under the Share
Award Plan were made on 30 June 2015,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards was subject to:
(cid:3)(cid:79) There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche would be forfeited.
(cid:3)(cid:79) Subject to there being no fatality
during a vesting period, the vesting of
each tranche was subject to the
following conditions, as determined on
the date of the awards:
– 33.34% of the vesting was
conditional upon the participant’s
continued employment in good
standing
– 33.33% of the vesting was
conditional on the achievement of
certain PGM production metrics
– 33.33% of the vesting was
conditional on the achievement of
certain chrome concentrate
production metrics.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, were
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
As a consequence of the fatality that
occurred on 28 September 2015, the
vesting of the first tranche of the 2015
awards granted on 30 June 2015 was
forfeited. The second tranche of the
Conditional Awards vested on 30 June
2017 and the second and final tranche of
the Appreciation Rights vested on the
same date. The final tranche of the
Conditional Awards vested on 30 June
2018. All the tranches of the 2015 award
have now vested.
The Appreciation Rights granted on
30 June 2015 were scheduled to lapse on
30 June 2020, being five years from the
date of the award. During the 2020
financial year, the committee exercised its
discretion in terms of the rules of the
Share Award Plan and approved an
extension of the exercise period by 12
months to 30 June 2021. Against the
backdrop of the considerable market
volatility triggered by the COVID-19
global pandemic, the committee agreed
that, although the Appreciation Rights
were not “out the money” (i.e. they
could have been exercised as the market
price remained above the exercise price at
the time of extending the exercise
window), it would not be in the interests
of the Company for participants to be
forced to exercise Appreciation Rights
and sell shares (to settle the associated
tax obligations) by 30 June 2020,
recognising the negative external
message that this may send. The
committee’s decision to extend the
exercise period applies to all participants
holding vested but unexercised
Appreciation Rights (not just executive
directors).
THARISA PLC INTEGRATED ANNUAL REPORT 2020
85
2016 award
The third awards under the Share Award
Plan were made on 30 June 2016,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards for eligible and participating
employees other than executive directors
and members of the Group executive
management was subject to:
(cid:3)(cid:79) There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche would be forfeited.
(cid:3)(cid:79) Subject to there being no fatality
during a vesting period, the vesting of
each tranche was subject to the
following conditions, as determined on
the date of the awards:
– 33.34% of the vesting was
conditional upon the participant’s
continued employment in good
standing
– 33.33% of the vesting was
conditional on the achievement of
certain PGM production metrics
– 33.33% of the vesting was
conditional on the achievement of
certain chrome concentrate
production metrics.
Vesting conditions for executive directors
and members of the Group executive
management were as follows:
(cid:3)(cid:79) There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche would be forfeited.
(cid:3)(cid:79) Subject to there being no fatality
during a vesting period, the vesting of
each tranche was subject to the
following conditions, as determined on
the date of the awards:
– 65.0% of the vesting was
conditional upon the achievement of
the individual key performance
metrics set for the participant
– 17.5% of the vesting was
conditional on the achievement of
certain PGM production metrics
– 17.5% of the vesting was
conditional on the achievement of
certain chrome concentrate
production metrics.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, were
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
The first and second tranches of both the
Conditional Awards and Appreciation
Rights vested on 30 June 2017 and 30
June 2018 respectively, and the third
tranche of the Conditional Awards vested
on 30 June 2019. All the tranches of the
2016 award have now vested.
2017 award
The fourth awards under the Share
Award Plan were made on 30 June 2017,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards was subject to:
(cid:3)(cid:79) There being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche would be forfeited.
(cid:3)(cid:79) Subject to there being no fatality
during a vesting period, the vesting of
each tranche was subject to the
following conditions, as determined on
the date of the awards:
– 33.34% of the vesting was
conditional upon the participant’s
continued employment in good
standing
– 33.33% of the vesting was
conditional on the achievement of
certain PGM production metrics,
being
– 33.33% of which vesting on a
minimum production of 147.4 k
6E PGM ounces
– 16.67% of which vesting on
production above 140.0 k 6E PGM
ounces, but below 147.4 6E PGM
ounces and
– 33.33% of which forfeited in the
event that production was below
140.0 k 6E PGM ounces
– 33.33% of the vesting was
conditional on the achievement of
certain chrome concentrate
production metrics, being
– 33.33% of which vesting on a
minimum production of 1.33 Mt
of total chrome concentrates
– 16.67% of which vesting on
production above 1.26 Mt, but
below 1.33 Mt of total chrome
concentrates and
– 33.33% of which forfeited in the
event that production was below
1.26 Mt of total chrome
concentrates.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, were
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date. The first and
second tranches of both the Conditional
Awards and Appreciation Rights vested
on 30 June 2018 and 30 June 2019
respectively, and the third tranche of the
Conditional Awards vested on 30 June
2020.
Based on the fact that the vesting period
had been fatality free and taking into
account the impact of the COVID-19
pandemic on production, the committee
exercised its discretion in determining the
vesting percentages applicable to the
third and final vesting on 30 June 2020,
and determined the third tranche to vest
in full for participants employed in good
standing at the vesting date,
notwithstanding the fact that the 6E
PGM production during the vesting
period had been 142.1 koz. Chrome
production during the vesting period
qualified for full vesting (33.33%). All the
tranches of the 2017 award have now
vested.
2018 award
The fifth awards under the Share Award
Plan were made on 30 June 2018,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards is subject to:
(cid:3)(cid:79) there being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited
(cid:3)(cid:79) subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 33.33% of the vesting is conditional
upon the participant’s continued
employment in good standing
– 16.67% of the vesting is conditional
on the achievement of certain PGM
production metrics, being
– 16.67% of which vesting on a
minimum production of 163.7 k
6E PGM ounces
– 8.34% of which vesting on
production above 155.5 k 6E PGM
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86
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT CONTINUED
ounces, but below 163.7 6E PGM
ounces and
– 16.67% of which forfeited in the
event that production was below
155.5 k 6E PGM ounces
– 16.67% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics, being
– 16.67% of which vesting on a
minimum production of 1.49 Mt
of total chrome concentrates
– 8.34% of which vesting on
production above 1.42 Mt, but
below 1.49 Mt of total chrome
concentrates and
– 16.67% of which forfeited in the
event that production was below
1.42 Mt of total chrome
concentrates
– 33.33% of the vesting is conditional
on the achievement of certain
financial metrics (measured against
budgeted EBITDA (adjusted for
actual commodity selling prices and
USD:ZAR exchange rates) of Tharisa
Minerals for employees in Patterson
band D and lower, and measured
against budgeted EBITDA of the
Tharisa Group for executive directors,
Group executive management and
employees in Patterson band E and
higher) being:
– 33.33% of which vesting in the
event that the budgeted (adjusted)
EBITDA is achieved or exceeded
– 16.67% of which vesting in the
event that between 95% and
100% of the budgeted (adjusted)
EBITDA is achieved and
– 33.33% of which forfeited in the
event that the EBITDA was below
95% of the budgeted, adjusted
EBITDA.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, are
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
As reported last year, the committee
determined that only 50% of the first
tranches of both the Conditional Awards
and Appreciation Rights vested on 30
June 2019. The remaining 50% was
forfeited as a consequence of the
production and EBITDA metrics not
having been met.
Based on the fact that the vesting period
was fatality free, the committee
determined during FY2020 that only
33.33% of the second tranches of both
the Conditional Awards and Appreciation
Rights vested on 30 June 2020 for
participants employed in good standing
on the vesting date. The remaining
66.67% was forfeited as a consequence
of the production and EBITDA metrics not
having been met.
2019 award
The sixth awards under the Share Award
Plan were made on 30 June 2019,
comprising both Conditional Awards and
Appreciation Rights. The vesting of these
awards is subject to:
(cid:3)(cid:79) there being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited
(cid:3)(cid:79) subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the following
conditions, as determined on the date
of the awards:
– 33.33% of the vesting is conditional
upon the participant’s continued
employment in good standing
– 16.67% of the vesting is conditional
on the achievement of certain PGM
production metrics, being
– 16.67% of which vesting on a
minimum production of 177.6 k
6E PGM ounces
– 8.34% of which vesting on
production above 168.7 k 6E PGM
ounces, but below 177.6 6E PGM
ounces and
– 16.67% of which forfeited in the
event that production was below
168.7 k 6E PGM ounces
– 16.67% of the vesting is conditional
on the achievement of certain
chrome concentrate production
metrics, being
– 16.67% of which vesting on a
minimum production of 1.57 Mt
of total chrome concentrates
– 8.34% of which vesting on
production above 1.49 Mt, but
below 1.57 Mt of total chrome
concentrates and
– 16.67% of which forfeited in the
event that production was below
1.49 Mt of total chrome
concentrates
– 33.33% of the vesting is conditional
on the achievement of certain
financial metrics (measured against
budgeted EBITDA (adjusted for
actual commodity selling prices and
USD:ZAR exchange rates) of Tharisa
Minerals for employees in Patterson
band E1 and lower, and measured
against budgeted EBITDA of the
Tharisa Group for executive directors,
Group executive management and
employees in Patterson band E2 and
higher), being
– 33.33% of which vesting in the
event that the budgeted (adjusted)
EBITDA is achieved or exceeded
– 16.67% of which vesting in the
event that between 95% and
100% of the budgeted (adjusted)
EBITDA is achieved and
– 33.33% of which forfeited in the
event that the EBITDA was below
95% of the budgeted, adjusted
EBITDA.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, are
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
Based on the fact that the vesting period
has been fatality free, the committee
determined that only 33.33% of the first
tranches of both the Conditional Awards
and Appreciation Rights vested on 30
June 2020 for participants employed in
good standing on the vesting date. The
remaining 66.67% was forfeited as a
consequence of the production and
EBITDA metrics not having been met.
2020 award
The seventh awards under the Share
Award Plan were made on 30 June 2020,
comprising Conditional Awards only. The
vesting of these awards is subject to:
(cid:3)(cid:79) there being no fatality at the Tharisa
Mine during the vesting period. In the
event of a fatality occurring during a
particular vesting period, the vesting
for that tranche is forfeited
(cid:3)(cid:79) subject to there being no fatality
during a vesting period, the vesting of
each tranche is subject to the
participant’s continued employment in
good standing during the vesting
period
THARISA PLC INTEGRATED ANNUAL REPORT 2020
87
(cid:3)(cid:79) vesting is also subject to the following
conditions, as determined on the date
of the awards:
– 40% of the vesting is conditional
upon the achievement of market
guidance for PGM production
publicly disclosed and referenced to
the commencement of the respective
financial reporting period
– 40% of the vesting is conditional on
the achievement of market guidance
for chrome concentrate production
publicly disclosed and referenced to
the commencement of the respective
financial reporting period, adjusted
to exclude the production from the
Vulcan Plant
– 20% of the vesting is conditional on
the achievement of specific targets
linked to the construction of, and
production from, the Vulcan Plant.
These targets are currently
considered commercially confidential
but the current intention is to
disclose them retrospectively at the
end of the vesting period for the
final tranche of the awards.
These performance conditions for the
performance period, being 1 July to 30
June for each vesting period, are
measured at each vesting date and
applied to the tranche which was eligible
for vesting at that date.
Subject to shareholder approval of the
new Long-Term Incentive Plan at the
AGM to be held on 10 February 2021,
no further awards will be granted under
the Share Award Plan.
Executive directors’ and other key management remuneration
Fixed remuneration
Variable remuneration
US$’000
L Pouroulis
P Pouroulis
M Jones
Other key management
Provident
fund
contributions
and risk
benefits
Share-based
payments
Bonus
paid
–
42
31
113
146
146
95
279
25
17
17
60
Basic
salary
735
494
408
1 098
Expense
allowance
-
7
–
24
Total
2020
906
706
551
1 574
Total
2019
1 278
993
800
2 451
Non-executive directors’ fees for the year under review
Annual
fee
Audit
Committee
Nomination
Committee
Remuneration
Committee
SHE
Committee
Other in
Group
companies
Total
2020
Total
2019
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US$’000
JD Salter
A Djakouris
OM Kamal
C Bell
RO Davey
ZL Hong
J Cheng1
JZ Hu2
VWY Chu3
43
43
43
43
43
43
14
27
2
18
25
18
18
–
–
–
-
-
25
18
–
–
–
–
–
-
-
18
25
–
18
18
–
–
-
-
25
18
–
18
18
–
–
-
-
45
–
–
–
–
–
–
-
-
174
129
61
97
79
43
14
27
2
1 Retired from the Board on 29 January 2020
2 Appointed to the Board on 29 January 2020 and resigned on 17 September 2020
3 Appointed to the Board on 17 September 2020
The Risk Committee comprises all members of the Board and does not carry a fee. The Social and Ethics and the New Business
Committees do not carry a fee.
Other disclosures
No payments were made in relation to loss of office during FY2020 nor were any payments made to any former directors.
177
129
61
97
79
43
43
-
-
6
6
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88
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REMUNERATION REPORT CONTINUED
Executive directors’ interests in the Tharisa Share Award Plan
Conditional awards
Opening
balance of
unvested
awards
Market
value at
date of
award
ZAR Allocated
Value at
date of
award
ZAR
Director and offer date
L Pouroulis
30 June 2017
30 June 2018
30 June 2019
30 June 2020
Total
P Pouroulis
30 June 2017
30 June 2018
30 June 2019
30 June 2020
Total
M Jones
30 June 2017
30 June 2018
30 June 2019
30 June 2020
Total
107 196
176 092
325 530
17.53
17.96
20.08
608 818
94 294
159 728
359 568
613 590
79 404
128 984
196 164
404 552
578 424
578 424
13.27
635 664
635 664
13.27
345 804
345 804
13.27
17.53
17.96
20.08
17.53
17.96
20.08
As at 30 September 2020
Vesting
price
ZAR Forfeited
Total
unvested
Market
value of
unvested
awards#
US$’000
12.50
12.50
12.50
–
12.50
12.50
12.50
–
12.50
12.50
12.50
–
–
58 700
72 344
–
–
88 046
217 020
578 424
131 044
883 490
–
53 245
79 908
–
–
79 864
239 712
635 664
133 153
955 240
–
42 997
43 594
–
–
64 492
130 776
345 804
86 591
541 072
78
192
513
783
71
212
564
847
57
116
307
480
Vested
107 196
29 346
36 166
–
172 708
94 294
26 619
39 948
–
160 861
79 404
21 495
21 794
–
122 693
# Market value based on closing share price of ZAR14.81 and ZAR/USD exchange rate of ZAR16.70 at 30 September 2020
THARISA PLC INTEGRATED ANNUAL REPORT 2020
89
Appreciation rights
As at 30 September 2020
Director and offer date
Unvested
balance
Market
value at
date of
award
ZAR Allocated
Value at
date of
award
Vested
Exercised
L Pouroulis
30 June 2015*
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
P Pouroulis
30 June 2015*
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
M Jones
30 June 2015*
30 June 2016
30 June 2017
30 June 2018
30 June 2019
Total
6.44
10.14
17.53
17.96
20.08
6.44
10.14
17.53
17.96
20.08
6.44
10.14
17.53
17.96
20.08
132 069
325 530
457 599
119 796
359 568
479 364
96 738
196 164
292 902
44 019
54 250
98 269
39 928
59 922
99 850
32 243
32 691
64 934
Total
vested
but not
exercised
79 192
402 306
321 588
110 054
54 250
Forfeited
Lapsed
Total
unvested
88 050
108 515
162 765
967 390
196 565
–
162 765
65 993
335 255
282 882
99 826
59 922
79 868
119 862
179 784
843 878
199 730
–
179 784
59 394
301 730
238 212
80 612
32 691
64 495
65 391
712 639
129 886
–
98 082
98 082
*As explained on page 84, the committee extended the exercise period of the 2015 Appreciation Rights by 12 months to 30 June 2021.
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90
THARISA PLC INTEGRATED ANNUAL REPORT 2020
DIRECTORS’ REPORT
The Board of Directors of Tharisa plc (‘the
Company’) presents to the members its
report together with the condensed
consolidated financial statements of the
Company and its subsidiaries (together
with the Company, ‘the Group’) for the
year ended 30 September 2020.
The Company is a Cypriot incorporated
public company with a primary listing on
the main board of the Johannesburg
Stock Exchange and a secondary standard
listing on the main board of the London
Stock Exchange.
PRINCIPAL ACTIVITY
The principal activity of the Company is
that of an investment holding company.
Tharisa maintains a primary listing on the
Johannesburg Stock Exchange under the
general mining sector and a secondary,
standard listing of its depositary interests
on the London Stock Exchange. The
Company has controlling interests in
PGMs and chrome mining, processing
operations and associated sales and
logistics operations. The Group holds
a 74% shareholding in Tharisa Minerals
Proprietary Limited (‘Tharisa Minerals’).
Tharisa Minerals owns and operates the
Tharisa Mine, an open pit PGM and
chrome mine located in the Bushveld
Complex of South Africa.
FINANCIAL RESULTS
The results of the Group are disclosed in
the condensed consolidated statement of
profit or loss and other comprehensive
income on page 94 of this report.
DIVIDENDS
It is the Group’s policy to pay a minimum
of 15% of its consolidated net profit after
tax as a dividend.
A dividend of US 0.25 cents per share
was proposed by the Board on
26 November 2019, approved by
shareholders on 29 January 2020 and
paid on 26 February 2020.
The following dividends were declared in
respect of the year ended 30 September
2020:
(cid:3)(cid:79) A final ordinary dividend of US 3.5
cents per share was proposed by the
Board on 27 November 2020, and is
subject to shareholder approval at the
AGM.
The total dividend for FY2020 is therefore
US 3.5 cents per share, equating to
17.1% of its consolidated net profit after
tax (2019: US 0.75 cent per share).
SHARE CAPITAL AND TREASURY
SHARES
The authorised share capital of the
Company comprises 10 000 million
ordinary shares of US$0.001 each and
1 051 convertible redeemable preference
shares of US$1 each.
On 22 September 2020, the Company
issued 5 000 000 shares in treasury
shares. Of the 275 000 000 shares in
issue at 22 September 2020, 8 389 049
shares were in treasury to satisfy the
Company’s obligations relating to the
vesting of the Conditional Awards of the
Tharisa Share Award Plan (‘TSAP’) on
30 June 2020 and to make provision for
the potential requirement to allot shares
on participants in the TSAP exercising
vested Appreciation Rights, and 266 610
951 had voting rights.
During the financial year, the Company
transferred 1 865 992 ordinary shares
from its treasury shares account to satisfy
the vesting of the Conditional Awards
and exercise of Appreciation Rights by
the participants of the Share Award Plan.
Following these transactions,
268 476 314 shares had voting rights and
6 523 686 were held in treasury at
30 September 2020. At 30 September
2020, the issued and fully paid ordinary
share comprised 275 000 000 ordinary
shares.
MAIN RISKS
The main financial risks faced by the
Group are disclosed in notes 32 and 34
of the consolidated annual financial
statements which are available on the
Company’s website, www.tharisa.com.
FUTURE DEVELOPMENTS
Vulcan Plant
Tharisa’s R&D team has developed the
Vulcan process to extract the fine chrome
from current in-line tailings from the
combined feed of the Genesis and
Voyager Plants. The primary aim of the
Vulcan Plant is to increase chrome
recovery from the current 65% target to
82% at the Tharisa Mine, capable of
adding an additional 400 ktpa (ca. 30%
of current production) of chrome
concentrate output. Vulcan will use
a proprietary process using existing
technologies to improve chrome
recoveries with the process having been
rigorously tested and proven through
pilot plant test work and the operation
of a production scale demonstration
plant. The total capital cost of US$54.2
million includes contingency and owner’s
cost. This project was approved and
commissioned at the end of FY2019.
The South African national lockdown as
a consequence of the coronavirus
pandemic, which affected South Africa
commencing in March 2020, meant this
project was put on hold as economic
activity was limited. Project restart was
approved at the end of FY2020 following
the relaxation of the lockdown provisions
with economic activity in South Africa
resuming with anticipated completion in
12 months, funded from internal cash
flows and available facilities.
Karo Holdings
In June 2018, Tharisa acquired a 26.8%
shareholding in Karo Holdings.
Karo Holdings entered into an investment
agreement with the Republic of
Zimbabwe on 22 March 2018, in terms
of which Karo Holdings has undertaken
to establish an integrated PGM mining
complex. The project aims to include
PGM mines, concentrators, smelters,
a base metal and precious metals refinery,
as well as renewable power generation
capacity made available to the Zimbabwe
power grid.
Karo Platinum, an indirect subsidiary of
Karo Holdings, applied for and was
awarded PGM rights under a Special
Grant under the Zimbabwe Mines and
Minerals Act, covering an area of
23 903 ha. The licence area is situated on
the Great Dyke in the Mashonaland West
District of Zimbabwe. This area of land
had been released by Zimbabwe Platinum
Mines (Private) Limited from its mining
lease area in support of the government
of Zimbabwe’s efforts to enable
participation by other investors in the
platinum mining industry in Zimbabwe.
In terms of the Special Grant, Karo
Platinum will be entitled to mine PGMs
situated within the licence area.
Significantly, the Zimbabwe Special
Economic Zones authority has declared a
portion of Selous measuring 50 667 ha as
a Special Economic Zone. The zone is
THARISA PLC INTEGRATED ANNUAL REPORT 2020
91
located on certain pieces of land covered
by special mining grants issued to a
subsidiary of Karo Holdings. Karo
Platinum completed an initial exploration
drilling campaign during the past year.
The determination of the code compliant
mineral resource is in process, to be
supported by a follow-up drilling
campaign.
Tharisa remains committed to the project
and the work leading up to a feasibility
study is ongoing.
Salene Chrome
Tharisa was granted a call option to
acquire a 90% shareholding in Salene
Chrome, exercisable on completion of the
exploration programme. This option has
been mutually extended to 31 December
2020 given the impact of COVID-19.
Salene Chrome holds three Special Grants
covering an area of approximately
9 500 ha on the eastern side of the Great
Dyke in Zimbabwe. The Special Grants
entitle Salene Chrome to mine the
minerals thereon including chrome.
Salene Chrome, in the year under review,
established a working site and began
lumpy chrome ore extraction from
surface. Operations were intermittent
during the COVID-19 lockdown
measures. Initial sales have taken place
and the logistics routes, benefiting from
the Special Economic Zone status, are
being proven with the successful routing
of lumpy chrome to port in South Africa.
Salene is planned to ramp up operations
in 2021.
BRANCHES
The Group did not operate any branches
during the financial year ended
30 September 2020.
MEMBERS OF THE BOARD OF
DIRECTORS
The members of the Board as at
30 September 2020 and at the date of
this report are:
(cid:3)(cid:79) Loucas Christos Pouroulis (Executive
Chairman)
(cid:3)(cid:79) Phoevos Pouroulis (CEO)
(cid:3)(cid:79) Michael Gifford Jones (CFO)
(cid:3)(cid:79) John David Salter (Lead Independent
non-executive director)
(cid:3)(cid:79) Antonios Djakouris (independent
non-executive director)
(cid:3)(cid:79) Omar Marwan Kamal (independent
non-executive director)
(cid:3)(cid:79) Carol Bell (independent non-executive
director)
(cid:3)(cid:79) Roger Owen Davey (independent
non-executive director)
(cid:3)(cid:79) Zhong Liang Hong (non-executive
director)
(cid:3)(cid:79) Vaneese Wing Ye Chu (non-executive
director)
Biographical details of the members
of the Board appear in the Board of
Directors section of the Integrated
Annual Report, which is available at
www.tharisa.com.
There has been no change in the
allocation of responsibilities of the
Board between 30 September 2019 and
30 September 2020. During the year, the
composition of the board changed as
follows:
(cid:3)(cid:79) Joanna Ka Ki Cheng retired by rotation
on 29 January 2020
(cid:3)(cid:79) Julia Zhengzhi Hu was appointed on
29 January 2020 and resigned on
17 September 2020
(cid:3)(cid:79) Vaneese Wing Ye Chu was appointed
on 17 September 2020
GROUP COMPANY SECRETARY
Sanet Findlay serves as the Company
Secretary and Lysandros Lysandrides as
the Assistant Company Secretary.
The Board formally assessed and
considered the performance and
qualifications of the Company Secretaries
and is satisfied that they are competent,
suitably qualified and experienced. They
are not directors of the Company, nor are
they related or connected to any of the
directors and the Board is satisfied that
they maintain an arm’s length relationship
with the Board. Their contact details are
as follows:
Sanet Findlay
2nd Floor, The Crossing
372 Main Road
Bryanston, 2191
South Africa
Lysandros Lysandrides
26 Vyronos Avenue
1096, Nicosia
Cyprus
EVENTS AFTER THE REPORTING
PERIOD
Events after the reporting period are
disclosed in note 22 of the consolidated
financial statements, which are available
on the Company’s website.
INDEPENDENT AUDITOR
Ernst & Young Cyprus Limited, with
Stavros Pantzaris being the designated
registered auditor, was appointed as the
independent external auditor of the
Company and of the Group on
29 January 2020. Ernst & Young Cyprus
Limited has expressed its willingness to
continue in office and its reappointment
will be proposed at the AGM.
On behalf of the Board
Phoevos Pouroulis
Michael Jones
Cyprus
27 November 2020
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92
THARISA PLC INTEGRATED ANNUAL REPORT 2020
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is pleased to present its report for the 2020 financial year.
COMPOSITION
All members of the committee are
independent non-executive directors. The
committee is chaired by Antonios
Djakouris and other members of the
committee are David Salter, Omar Kamal
and Carol Bell. The Board is satisfied that
the members of the committee have the
appropriate mix of qualifications and
experience in order for the committee to
fulfil its responsibilities appropriately.
The Group’s independent external
auditor, independent internal auditors,
Chief Finance Officer and Chief Executive
Officer attend committee meetings by
invitation. As with all other committees,
all directors are able to attend Audit
Committee meeting in line with King IV
recommendations. The committee also
meets with the internal and external
auditors without any executive directors
being present.
The committee met four times during the
year under review and discharged its
responsibilities in terms of the approved
terms of reference, which is available on
the Company’s website.
ROLE
The committee is accountable to the
Board and to shareholders. It provides the
Board with additional assurance
regarding the quality and reliability of the
financial statements of the Group and
financial information used by the Board.
It, however, does not relieve members of
the Board of their fiduciary duties and
responsibilities and Board members must
exercise due care and judgement so as to
comply with their legal obligations. The
committee has unrestricted access to all
Company and Group information and
may seek information from any
employee. The committee may also
consult external professional advisers in
executing its duties.
The Chairman of the committee reports to
the Board after each meeting of the
committee and the minutes of meetings of
the committee are provided to the Board.
ACTIVITIES OF THE COMMITTEE
DURING THE YEAR
Annual financial statements and
integrated annual report
The committee reviewed and monitored
the integrity of financial reports, including
the interim financial statements and
annual financial statements, and assessed
the financial reporting process,
procedures and controls, which it found
to be effective. It reviewed the
accounting policies and procedures
adopted by the Group and ensured that
financial statements were prepared based
on appropriate accounting policies and in
accordance with IFRS, IFRS as adopted by
the EU, the Cyprus Companies Law and
the JSE Listings Requirements.
The committee considered, with the
assistance of the Tharisa Subsidiaries’
Audit Review Committee, all entities
included in the consolidated Group IFRS
financial statements, to ensure that it has
access to all the financial information of
the Company and the Group. The
Chairman of the Tharisa Subsidiaries’
Audit Review Committee reports on its
meetings to the committee and minutes
of the meetings of the Tharisa
Subsidiaries’ Audit Review Committee are
circulated to the committee.
The committee also assessed and
confirmed the appropriateness of the
going concern assumption used in the
annual financial statements, taking into
account management budgets and
forecasts.
The committee reviewed the integrated
annual report, reporting process and
governance and financial information
included in the integrated annual report
for accuracy and recommended to the
Board that the annual financial
statements and the financial information
included in the integrated annual report
be approved.
External audit
During the year under review, the
committee considered and approved the
terms of engagement, scope of the
external audit and audit fees.
It reviewed audit findings and
management’s response thereto and
monitored and encouraged cooperation
between external and internal auditors. It
considered the nature and extent of the
non-audit services that may be provided
by the external auditor. All non-audit
services provided by the external auditor
are preapproved on the basis that the
provision of these services does not affect
the independence of the external auditor.
During the year, EY provided only tax
compliance services as non-audit services.
None of the non-audit services were
provided on a contingent fee basis.
The committee also discussed with the
external auditor their opinion of the level
of ethical conduct of the Group, its
executives and senior managers and held
separate meetings with management and
the external auditor. The external auditor’s
right to direct access to the Chairman of
the Audit Committee and the Chairman of
the Board was reiterated.
In addition, the committee evaluated the
independence, effectiveness, expertise
and performance of the external auditor.
As part of this process, the committee
considered and assessed the Partner
Accreditation Pack provided by EY Cyprus
in compliance with section 22 of the
JSE Listings Requirements, which
comprised the following documents:
(cid:3)(cid:79) The most recent firm-wide control
procedures review report for EY Cyprus
as a firm (European Standards/ISQC1
inspection), issued by the Cyprus Public
Audit Oversight Board (‘CyPAOB’)
(cid:3)(cid:79) The most recent Association of
Chartered Certified Accountants
(‘ACCA’) and Institute of Certified
Public Accountants of Cyprus (‘ICPAC’)
inspection report of EY Cyprus as a
firm (ISQC1 inspection) which also
includes the engagement review
inspection
(cid:3)(cid:79) A summary of the outcome of the
engagement partner’s latest internal
quality review
(cid:3)(cid:79) A copy of the EY Cyprus 2019
Transparency Report which contains
the ISQC1 information as specified by
the JSE
(cid:3)(cid:79) The results of the Audit Quality Review
Programme, together with the most
recent independent regulatory
inspection visits, combined with other
ongoing monitoring procedures which
provide EY Cyprus with a basis to
conclude that its internal quality
control systems are designed
appropriately and are operating
effectively, and that no systemic
deficiencies have been identified
(cid:3)(cid:79) A summary of legal and disciplinary
proceedings against EY Cyprus, which
were concluded within the past seven
years (none).
(cid:3)(cid:79) The latest proof of registration of EY
Cyprus as a JSE accredited audit firm.
Based on the information provided in the
Partner Accreditation Pack, the
committee confirmed that EY Cyprus and
the designated individual audit partner,
Stavros Pantzaris, are accredited on the
JSE’s list of auditors and following an
assessment of their suitability for
THARISA PLC INTEGRATED ANNUAL REPORT 2020
93
appointment, it is the committee’s
recommendation that EY Cyprus, and
Stavros Pantzaris as the designated audit
partner, be reappointed as external
auditor at the Company’s AGM to be
held on 10 February 2021.
Internal control, risk management
and information technology
The committee is responsible for
reviewing the effectiveness and adequacy
of internal controls, including financial
controls, risk management systems and
information technology risks relating to
financial reporting. It is also responsible
for considering the major findings of any
internal investigations into control
weaknesses, fraud or misconduct, and
management’s response thereto.
The Board has delegated responsibility for
IT governance to the committee.
Assurance on the IT systems and
processes is provided by the Group’s
internal auditors and external consultants
for more specialised work, and findings
are reported to the committee. This
ensures that any and all material findings
are addressed appropriately. The
committee receives quarterly reports
prepared by the Group IT Manager on
and monitors the adequacy and
effectiveness of the Group’s information
technology controls and risks.
Having considered, analysed, reviewed and
debated information provided by
management, internal auditors and
external auditor, the committee considered
that the internal controls of the Group
were effective in all material aspects
throughout the year under review.
Budget
The committee reviewed and
recommended the FY2021 budget for
approval by the Board.
Dividend
The committee reviewed and
recommended the final dividend proposal
for approval by the Board.
Internal audit
The independent internal audit function
is fulfilled by Deloitte.
During the year under review, the
committee reviewed the effectiveness and
adequacy of the internal control systems
and reviewed and considered reports
from the internal auditors. It monitored
the status of implementation of
recommendations on identified control
weaknesses by management and
discussed with the internal auditors their
opinion of the level of ethical conduct of
the Group, its executives and senior
managers.
The committee also considered and
approved the terms of engagement,
scope of the internal audit workstreams
and any deviations or changes thereto,
and the internal audit plan for FY2021.
It reviewed significant findings,
management comments thereon and
action plans. The committee discussed
with the internal auditors their
experiences and views on the level of
access to required information and
resources, and any difficulties
encountered relating to their internal
audit work, such as restrictions in the
identification of risk areas and/or the
scope of internal control workstreams
and reiterated their right to direct access
to the chairman of the Audit Committee
and the chairman of the Board.
Furthermore, the committee evaluated
the independence, effectiveness and
performance of the internal auditors and
recommended Deloitte’s continued
employment as internal auditors of the
Company and the Group.
Combined assurance
The committee considered the combined
assurance received from management
and the internal and external auditors
and is satisfied that the significant risks
facing the Group were being
appropriately addressed. To this end, the
Audit Committee examined and
encouraged the cooperation between the
internal and external auditors.
Chief Finance Officer and finance
function
The committee reviewed the
performance, qualifications and expertise
of Michael Jones, the Chief Finance
Officer, and is satisfied as to his suitability
to act as Chief Finance Officer of the
Company and the Group. It also
confirmed that the finance department
as a whole was adequately resourced and
experienced to execute the Group’s
finance function.
JSE Proactive monitoring process
The JSE implemented a proactive review
and monitoring process in 2010. In terms
of this process, the financial statements
of every listed company will be selected
for review at least once every five years.
The JSE has partnered with the
Department of Accountancy at the
University of Johannesburg (UJ) whose
academic employees assist with the initial
review process. The process involves the
JSE identifying the companies to be
reviewed during a particular calendar year
and providing the names of these
companies and the appropriate financial
information to the UJ Team. The JSE and
UJ have jointly developed a framework
under which each review is to be
conducted. The reviewed reports are then
considered by the JSE who then engages
with the listed company.
During the year under review, the
committee considered the JSE’s Report
on the proactive monitoring of financial
statements for 2019, which outlined
issues identified by the JSE during its
normal proactive monitoring of listed
companies’ financial statements for
compliance with IFRS.
Tharisa’s annual financial statements for
the year ended 30 September 2019 and
its interim results for the six months
ended 31 March 2020 had been selected
as part of the JSE’s proactive review
process. The committee studied the
correspondence received from the JSE
and considered and approved the
responses prepared by the Company.
Other
During the year under review, the
committee confirmed the adequacy of
the Group’s whistleblowing arrangements
and policies and procedures for
preventing corrupt behaviour and
detecting fraud and bribery. It also
conducted a self-evaluation to establish
whether the committee operated
effectively and identified areas for
improvement.
The Chairman of the Audit Committee
reported to the Board after each meeting
of the Audit Committee.
On recommendation of the Audit
Committee, the Board approved:
(cid:3)(cid:79) the annual financial statements for
the year ended 30 September 2020
(cid:3)(cid:79) the integrated annual report for the
year ended 30 September 2020 and
(cid:3)(cid:79) the notice of the annual general
meeting to be held on 10 February
2021.
For more information on the composition
and responsibilities of the Audit
Committee, please refer to pages 62
and 63.
A Djakouris
Chairman of the Audit Committee
27 November 2020
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94
THARISA PLC INTEGRATED ANNUAL REPORT 2020
THARISA PLC INTEGRATED ANNUAL REPORT 2020
95
7
8
FINANCIAL REVIEW
94 – 135
Condensed consolidated financial statements
Notes to the annual financial statements
96
102
SHAREHOLDER INFORMATION
136 – IBC
Investor relations report
Notice of virtual annual general meeting
Form of proxy
Summary of the principal terms of the
Tharisal PLC long-term incentive plan 2021
Glossary
Stakeholder engagement
Corporate information
136
138
147
149
151
159
IBC
Enriching lives through innovating
the resources company of the future
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96
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The condensed consolidated financial statements for the year ended 30 September 2020 have been extracted from the audited financial
statements of the Group, but have not been audited. The auditor’s report on the audited financial statements does not report on all of
the information contained herein. Shareholders are therefore advised that in order to obtain a full understanding of the financial position
and results of the Group, these condensed consolidated financial statements should be read together with the full audited financial
statements and full audit report.
These condensed consolidated financial statements and the audited financial statements, together with the audit report, are available on
the Company’s website, www.tharisa.com, and are available for inspection at the registered address of the Company.
The directors take full responsibility for the preparation of this report and the correct extraction of the financial information from the
underlying financial statements.
The directors of the Company are responsible for the maintenance of adequate accounting records and the preparation of the financial
statements and related information in a manner that fairly presents the state of affairs of the Company. These financial statements are
prepared in accordance with International Financial Reporting Standards and incorporate full and responsible disclosure in line with the
accounting policies of the Group, which are supported by prudent judgement.
The directors are also responsible for the maintenance of effective systems of internal control, which are based on established
organisational structure and procedures. These systems are designed to provide reasonable assurance as to the reliability of the financial
statements, and to prevent and detect material misstatement and loss.
Ernst & Young Cyprus Limited has expressed an unmodified audit opinion in the Independent Auditor’s Report dated 27 November 2020
on the audited consolidated financial statements. That report also includes the communication of key audit matters and is available on
the Company’s website: www.tharisa.com.
The preparation of these condensed results was supervised by the Chief Finance Officer, Michael Jones, a Chartered Accountant (SA).
The condensed consolidated financial statements have been prepared on a going concern basis, as the directors believe that the
Company and Group will continue to be in operation in the foreseeable future.
The consolidated annual financial statements have been approved by the Board on 27 November 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
97
Condensed consolidated statement of profit or loss and other
comprehensive income
for the year ended 30 September 2020
Notes
2020
US$’000
2019
US$’000
Revenue
Cost of sales
Gross profit
Other income
Net foreign exchange (loss)/gain
Administrative expenses
Results from operating activities
Finance income
Finance costs
Changes in fair value of financial assets at fair value through profit or loss
Changes in fair value of financial liabilities at fair value through profit or loss
Share of loss of investment accounted for using the equity method
Profit before tax
Tax
Profit for the year
Other comprehensive income
Items that may be classified subsequently to profit or loss:
Foreign currency translation differences for foreign operations, net of tax
Other comprehensive income, net of tax
Total comprehensive income/(loss) for the year
Profit for the year attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive income for the year attributable to:
Owners of the Company
Non-controlling interest
Earnings per share
Basic earnings per share (US$ cents)
Diluted earnings per share (US$ cents)
The notes are an integral part of these condensed consolidated financial statements.
5
6
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22
22
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405 995
(275 563)
130 432
918
(8 378)
(35 327)
87 645
944
(6 926)
476
(5 773)
(614)
75 752
(20 801)
54 951
342 885
(282 461)
60 424
687
354
(37 252)
24 213
1 437
(8 812)
312
(4 343)
(1 652)
11 155
(2 779)
8 376
(24 118)
(13 985)
(24 118)
30 833
(13 985)
(5 609)
43 296
11 655
54 951
27 431
3 402
30 833
16.2
16.2
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10 616
(2 240)
8 376
1 835
(7 444)
(5 609)
4.0
4.0
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98
THARISA PLC INTEGRATED ANNUAL REPORT 2020
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS CONTINUED
Condensed consolidated statement of financial position
as at 30 September 2020
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investment accounted for using the equity method
Other financial assets
Deferred tax assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Contract assets
Other financial assets
Current taxation
Cash and cash equivalents
Total current assets
Total assets
EQUITY AND LIABILITIES
Share capital and premium
Other reserve
Foreign currency translation reserve
Retained earnings
Equity attributable to owners of the Company
Non-controlling interests
Total equity
Non-current liabilities
Provisions
Borrowings
Deferred tax liabilities
Total non-current liabilities
Current liabilities
Borrowings
Other financial liabilities
Current taxation
Trade and other payables
Contract liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2020
US$’000
2019
US$’000
10
11
12
13
14
12
15
16
17
18
18
19
20
278 960
1 427
10 303
6 791
1 140
298 621
41 864
112 056
2 101
2 169
497
49 293
207 980
506 601
286 929
47 245
(104 850)
122 085
351 409
(30 580)
320 829
14 684
16 132
39 102
69 918
54 481
6 144
176
52 952
2 101
115 854
185 772
506 601
263 980
750
8 781
6 080
1 013
280 604
36 334
73 857
1 039
1 390
926
59 201
172 747
453 351
285 193
47 245
(88 985)
79 318
322 771
(33 982)
288 789
13 101
19 903
25 984
58 988
51 313
2 384
60
50 778
1 039
105 574
164 562
453 351
The consolidated financial statements were authorised for issue by the Board of Directors on 27 November 2020.
The notes are an integral part of these condensed consolidated financial statements.
Phoevos Pouroulis
Director
Michael Jones
Director
THARISA PLC INTEGRATED ANNUAL REPORT 2020
99
Condensed consolidated statement of changes in equity
for the year ended 30 September 2020
Attributable to owners of the Company
Share
capital
US$’000
Share
premium
US$’000
Other
reserve
US$’000
Note
Foreign
currency
translation
reserve
US$’000
Non-
Retained
earnings
US$’000
Total
US$’000
controlling
interest
US$’000
Total
equity
US$’000
Balance at 1 October
2018
Total comprehensive
income for the year
Profit for the year
Other comprehensive
income:
Foreign currency translation
differences
Total comprehensive
income for the year
Transactions with owners
of the Company
Contributions by and distributions
to owners
Dividends paid
Issue of ordinary shares
Equity-settled share-based
payments
Deferred tax on equity-settled
share-based payments
Contributions by owners of the
Company
Total transactions with owners of
the Company
Balance at 30 September
2019
27
16
16
261
280 545
47 245
(80 204)
77 025
324 872
(26 538) 298 334
–
–
–
–
6
–
–
6
6
–
–
–
–
4 381
–
–
4 381
4 381
–
–
–
–
–
–
–
–
–
–
10 616
10 616
(2 240)
8 376
(8 781)
–
(8 781)
(5 204)
(13 985)
(8 781)
10 616
1 835
(7 444)
(5 609)
–
–
–
–
–
–
(6 594)
–
(6 594)
4 387
(859)
(859)
(870)
(870)
(8 323)
(3 936)
(8 323)
(3 936)
–
–
–
–
–
–
(6 594)
4 387
(859)
(870)
(3 936)
(3 936)
267
284 926
47 245
(88 985)
79 318
322 771
(33 982) 288 789
The notes are an integral part of these condensed consolidated financial statements.
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100 THARISA PLC INTEGRATED ANNUAL REPORT 2020
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS CONTINUED
Condensed consolidated statement of changes in equity continued
for the year ended 30 September 2020
Attributable to owners of the Company
Share
capital
US$’000
Share
premium
US$’000
Other
reserve
US$’000
Note
Foreign
currency
translation
reserve
US$’000
Retained
earnings
US$’000
Total
US$’000
Non-
controlling
interest
US$’000
Total
equity
US$’000
Balance at 1 October 2019
267
284 926
47 245
(88 985)
79 318
322 771
(33 982)
288 789
Total comprehensive income
for the year
Profit for the year
Other comprehensive income:
Foreign currency translation
differences
Total comprehensive income
for the year
Transactions with owners of
the Company
Contributions by and distributions to
owners
Dividends paid
Issue of ordinary shares
Equity-settled share-based payments
Contributions by owners of the
Company
Total transactions with owners of the
Company
Balance at 30 September
2020
27
16
16
–
–
–
–
2
–
2
2
–
–
–
–
1 734
–
1 734
1 734
–
–
–
–
–
–
–
–
–
43 296
43 296
11 655
54 951
(15 865)
–
(15 865)
(8 253)
(24 118)
(15 865)
43 296
27 431
3 402
30 833
–
–
–
–
–
(667)
–
138
(667)
1 736
138
(529)
1 207
(529)
1 207
–
–
–
–
–
(667)
1 736
138
1 207
1 207
269
286 660
47 245
(104 850)
122 085
351 409
(30 580)
320 829
Companies which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the Defence of the
Republic Law, during the two years after the end of the year of assessment to which the profits refer, will be deemed to have
distributed this amount as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent
that the ultimate shareholders at the end date of the period of two years from the end of the year of assessment to which the profits
refer are both Cypriot tax residents and Cypriot domiciled entities. The amount of this deemed dividend distribution is reduced by any
actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid by the Company for
the account of the shareholders. These provisions do not apply for ultimate beneficial owners that are non-Cypriot tax resident
individuals. Retained earnings is the only reserve that is available for distribution.
The notes are an integral part of these condensed consolidated financial statements.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
101
Condensed consolidated statement of cash flows
for the year ended 30 September 2020
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
(Profit)/loss on disposal of property, plant and equipment
Share of loss of investment accounted for using the equity method
Impairment loss and net realisable value write down of inventory
Impairment and write off of property, plant and equipment
Changes in fair value of financial assets at fair value through profit or loss
Changes in fair value of financial liabilities at fair value through profit or loss
Net foreign exchange loss/(gain)
Interest income
Interest expense
Tax
Equity-settled share based payments
Changes in:
Inventories
Trade and other receivables and contract assets
Trade and other payables and contract liabilities
Provisions
Cash from operations
Income tax paid
Net cash flows from operating activities
Cash flows from investing activities
Interest received
Additions to property, plant and equipment
Additions to intellectual property
Net cash outflow from business combination
Proceeds from disposal of property, plant and equipment
Additions to investments accounted for using the equity method
Additions to other financial assets
Net cash flows used in investing activities
Cash flows from financing activities
Net proceeds from/(payment of) bank credit facilities
Advances received
Repayment of borrowings
Lease payments
Dividends
Interest paid
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
The notes are an integral part of these condensed consolidated financial statements.
Notes
2020
US$’000
2019
US$’000
54 951
8 376
10
10
11
10
10
10
21
10
11
12
18
18
18
18
27
15
15
27 949
(9)
614
(114)
3 090
(476)
5 773
8 378
(944)
6 926
20 801
138
127 077
(7 352)
(50 577)
5 419
1 767
76 334
(3 376)
72 958
867
(70 558)
(311)
(1 486)
770
(2 136)
(1 556)
(74 410)
2 487
18 118
(15 609)
(5 673)
(667)
(4 311)
(5 655)
(7 107)
59 201
(2 801)
49 293
27 236
33
1 652
114
4 141
(312)
4 343
(354)
(1 437)
8 812
2 779
(859)
54 524
(15 207)
9 686
25 097
250
74 350
(4 408)
69 942
1 333
(43 881)
–
–
403
(7 995)
(2 277)
(52 417)
(14 347)
28 476
(19 024)
(6 647)
(6 594)
(4 665)
(22 801)
(5 276)
66 791
(2 314)
59 201
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102 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS
Notes to the condensed consolidated financial statements
for the year ended 30 September 2020
1. REPORTING ENTITY
Tharisa plc (‘the Company’) is a company domiciled in Cyprus. These condensed consolidated financial statements of the Company
for the year ended 30 September 2020 comprise the Company and its subsidiaries (together referred to as ‘the Group’). The Group
is primarily involved in platinum group metals (‘PGM’) and chrome mining, processing, trading and the associated logistics. The
Company is listed on the main board of the Johannesburg Stock Exchange and has a secondary standard listing on the main board
of the London Stock Exchange and a secondary listing on the A2X Exchange in South Africa.
2. BASIS OF PREPRATION
Statement of compliance
These condensed consolidated financial statements have been prepared in accordance with the Listings Requirements of the
Johannesburg Stock Exchange and, as a minimum, contain the information required by International Accounting Standards
34 Interim Financial Reporting. Selected explanatory notes are included to explain events and transactions that are significant to
obtain an understanding of the changes in the financial position and performance of the Group since the last consolidated financial
statements as at and for the year ended 30 September 2019. These condensed consolidated financial statements do not include all
the information required for full consolidated financial statements prepared in accordance with International Financial Reporting
Standards (‘IFRS’). The condensed consolidated financial statements should be read in conjunction with the consolidated financial
statements for the year ended 30 September 2020, which have been prepared in accordance with IFRS.
Statutory consolidated financial statements of the Company were additionally prepared in accordance with IFRS as adopted by the
EU and the requirements of the Cyprus Companies Law, Cap. 113. These have been approved and issued on the same date and
there are no differences in the two sets of consolidated financial statements.
These condensed consolidated financial statements were approved by the Board of Directors on 27 November 2020.
Use of estimates and judgements
Preparing the condensed consolidated financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
In preparing these condensed consolidated financial statements, significant judgements made by management in applying the
Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated
financial statements at and for the year ended 30 September 2020. The condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements for the year ended 30 September 2020 which contain detail
of significant judgements and estimates.
Basis of measurement
The condensed consolidated financial statements are prepared on the historical cost basis except as otherwise stated in the
accounting policies set out below.
Functional and presentation currency
The condensed consolidated financial statements are presented in United States Dollars (‘US$’) which is the Company’s functional
currency and presentation currency. Amounts are rounded to the nearest thousand.
Operating environment and going concern
On 11 March 2020, the World Health Organization declared the coronavirus COVID-19 (also known as the coronavirus) outbreak
to be a pandemic in recognition of its rapid spread across the globe. Many governments are taking increasingly stringent and
economically costly steps to help contain and, in many jurisdictions, now delay, the spread of the virus. These steps include
requiring self-isolation/quarantine by those potentially affected, implementing social distancing measures, controlling or closing
borders and “locking-down” cities/regions or even entire countries. These measures have slowed down economies globally
including both the economies of Cyprus and South Africa. These measures also have the potential of having wider impacts on the
respective economies as the measures may persist for an extended period.
On 15 March 2020, the Cyprus Council of Ministers in an extraordinary meeting, announced that it considers that Cyprus is
entering a state of emergency considering the uncertain situation as it unfolds daily, the growing spread of COVID-19 outbreak and
the World Health Organization’s data on the situation.
On 15 March 2020, the President of South Africa announced the declaration of the COVID-19 pandemic as a “national disaster”.
Effective 27 March 2020, South Africa was placed in a five-week lockdown (initially three weeks which was subsequently
extended), which imposed significant restrictions on economic and other activities.
The Group is fully supportive of the respective governments’ initiatives in dealing with the COVID-19 pandemic and has and will
implement all measures as instructed by the respective governments.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
103
2. BASIS OF PREPRATION (continued)
Operating environment and going concern (continued)
To this effect, mining operations with limited exceptions such as coal mines supplying the national energy producer, were required
to be placed on care and maintenance. The Group proceeded with a systematic process of placing its assets on care and
maintenance while ensuring both the health and wellbeing of its employees. Mining was suspended on 25 March 2020 and the
plants were placed on care and maintenance.
During the lockdown period, the Group developed and submitted an interim essential production plan whereby operations
continued with a significantly reduced number of personnel on a shift basis. This plan received government support and permission
and mining and limited processing operations at the Group’s Voyager Plant (300 ktpm name plate capacity) resumed with the
reduced number of personnel onsite. Transport of chrome concentrate resumed on 1 April 2020 while limited deliveries of PGM
concentrates resumed on 18 April 2020 with the PGM customers having declared force majeure for the lockdown periods.
On 23 April 2020, the President of South Africa announced the basis for a risk adjusted strategy for the return to economic activity
following the national lockdown in South Africa. Effective 1 May 2020, South Africa was reduced from a level 5 lockdown to a
level 4 lockdown. Level 4 provided inter alia for resumption of open pit mining at 100%. The Tharisa Mine accordingly resumed full
operations post the initial lockdown period. Logistics resumed operating in the normal course.
There has been a gradual easing of lockdown restrictions in South Africa with South Africa being placed on a risk adopted level 1
lockdown, with the resumption of most economic activities with effect from 21 September 2020.
The financial effect of the current crisis on the global economy and overall business activities cannot be estimated with reasonable
certainty at this stage, due to the pace at which the outbreak expands and the high level of uncertainties arising from the inability
to reliably predict the outcome. Management has considered the unique circumstances and the risk exposures of the Group and
has concluded that the main impact on the Group’s business may arise from:
(cid:3)(cid:79) an interruption of production either on a partial or whole basis;
(cid:3)(cid:79) a disruption of the logistics operations;
(cid:3)(cid:79) partial supply chain disruptions;
(cid:3)(cid:79) the unavailability of personnel; and
(cid:3)(cid:79) the impact on the demand fundamentals for its products thereby impacting on commodity prices.
The Group reassessed its operating and relevant cash flows using revised assumptions and incorporating downside scenarios in
assessing actual and potential financing needs, taking into consideration the main impacts identified above. To strengthen the
Group’s liquidity and ultimately ensure the sustainability of operations, the Group proactively negotiated certain payment holidays,
in some instances capital only and for others both capital and interest, with financial institutions (refer to note 18). The financier
payment holiday was conditional inter alia on no dividends being paid by the Company. Major suppliers have been successfully
engaged for extended credit terms. Capital expenditures projects, including the Vulcan Plant, were placed on hold.
From the analysis performed and taking into account the above factors and borrowing facilities available to the Group, the
directors have a reasonable expectation that the Group has adequate financial resources to continue in operational existence for
the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the condensed consolidated
financial statements.
Standards and interpretations adopted in the current year
The Group has adopted the following new and/or revised standards, interpretations and amendments which became effective for
the year ended 30 September 2020:
(cid:3)(cid:79) IFRIC 23 Uncertainty over Income Tax Treatment
(cid:3)(cid:79) IAS 23 Borrowing Costs (Amendment)
(cid:3)(cid:79) IFRS 16 Amendment to Leases
The adoption of these interpretations and amendments did not have a material impact on the Group.
Standards and interpretations issued but not yet effective
A number of standards, amendments to standards and interpretations have been issued but are not yet effective for annual periods
beginning on 1 October 2019. Those that are relevant to the Group are presented below.
(cid:3)(cid:79) IFRS 3 Business Combinations (Amendment)
(cid:3)(cid:79) IAS 1 and IAS 8 Definition of material (Amendment)
(cid:3)(cid:79) Conceptual Framework
(cid:3)(cid:79) Classification of Liabilities as Current or Non-current - Amendments to IAS 1
(cid:3)(cid:79) Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
(cid:3)(cid:79) Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37
The Group will adopt these standards and interpretations as they become effective.
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104 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with those
applied in the preparation of the Group’s consolidated financial statements for the year ended 30 September 2020.
4. OPERATING SEGMENTS
For management purposes, the chief operating decision maker of the Group, being the executive directors of the Company and
the executive directors of the subsidiaries, reports its results per segment. The Group currently has the following four segments:
(cid:3)(cid:79) PGM segment
(cid:3)(cid:79) Chrome segment
(cid:3)(cid:79) Agency and trading segment
(cid:3)(cid:79) Manufacturing segment
The Group established the manufacturing segment following the acquisition of the manufacturing entity (refer to note 21).
The operating results of each segment are monitored separately by the chief decision maker in order to assist them in making
decisions regarding resource allocation as well as enabling them to evaluate performance. Segment performance is evaluated on a
PGM ounce production and sales basis and a chrome concentrate tonnes production and sales basis. The Agency and trading
segment performance is evaluated on third-party chrome concentrate tonnes production and sales basis. Third-party logistics,
third-party trading and third-party chrome operations are evaluated individually but aggregated together as the Agency and trading
segment. For the manufacturing segment, performance is evaluated on sales and gross profit basis.
The Group’s administrative costs, financing (including finance income and finance costs) and income taxes are managed on a
Group basis and are not allocated to a segment.
The accounting policies used by the Group in reporting segments internally are the same as those applied to the consolidated
financial statements.
Due to the intrinsic nature of the Group’s PGM and chrome concentrate production processes, assets are reported on a
consolidated basis and cannot necessarily be allocated to a specific segment. Consequently, assets are not disclosed per segment in
the following segmental information.
2020
Revenue
Cost of sales
Manufacturing costs
Selling costs
Freight services
Gross profit
2019
Revenue
Cost of sales
Manufacturing costs
Selling costs
Freight services
Gross profit
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Manufacturing
US$’000
Total
US$’000
218 619
161 267
24 109
2 000
405 995
(132 038)
(396)
–
(132 434)
86 185
(58 761)
(44 140)
(17 979)
(120 880)
40 387
(12 584)
(4 477)
(3 590)
(20 651)
3 458
(1 598)
–
–
(1 598)
402
130 064
177 881
34 940
(100 735)
(899)
–
(101 634)
28 430
(88 861)
(41 302)
(17 910)
(148 073)
29 808
(17 061)
(10 012)
(5 681)
(32 754)
2 186
–
–
–
–
–
–
(204 981)
(49 013)
(21 569)
(275 563)
130 432
342 885
(206 657)
(52 213)
(23 591)
(282 461)
60 424
The shared costs relating to the manufacturing of PGM and chrome concentrates are allocated to the relevant operating segments
based on the relative sales value per product on an ex-works basis. During the year ended 30 September 2020, the relative sales
value of PGM concentrate increased compared to the relative sales value of chrome concentrates and consequently the allocation
basis of shared costs was revised to 75.0% for PGM concentrate and 25.0% for chrome concentrates. The allocation basis of
shared costs was 55.0% (PGM concentrates) and 45.0% (chrome concentrate) for the year ended 30 September 2019.
Cost of sales includes a charge for the write off/impairment of property, plant and equipment totalling US$3.1 million (2019:
US$4.1 million) which mainly relates to mining equipment. The write off/impairment has been allocated to the PGM and chrome
segments in accordance with the allocation basis of shared costs as described in the preceding paragraph.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
105
4. OPERATING SEGMENTS (continued)
Geographical information
The following table sets out information about the geographical location of:
(i)
(ii)
the Group’s revenue from external customers and
the Group’s property, plant and equipment, intangible assets and investment accounted for using the equity method
(‘specified non-current assets’).
The geographical location analysis of revenue from external customers is based on the country of establishment of each customer.
The geographical location of the specified non-current assets is based on the physical location of the asset in the case of property,
plant and equipment and intellectual property and the location of the operation to which they are allocated in the case of
goodwill.
Revenue from external customers
2020
South Africa
China
Singapore
Hong Kong
United Arab Emirates
Other countries
2019
South Africa
China
Singapore
Hong Kong
Other countries
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Manufacturing
US$’000
Total
US$’000
218 619
–
–
–
–
–
218 619
130 064
–
–
–
–
130 064
24 497
39 719
33 918
50 005
9 344
3 784
161 267
40 320
53 070
10 046
67 106
7 339
177 881
918
12 108
8 075
2 382
–
626
24 109
695
3 558
30 182
-
505
34 940
2 000
–
–
–
–
–
2 000
–
–
–
–
–
–
246 034
51 827
41 993
52 387
9 344
4 410
405 995
171 079
56 628
40 228
67 106
7 844
342 885
Revenue represents the sales value of goods supplied to customers, net of value added tax. The following table summarises sales to
customers with whom transactions have individually exceeded 10.0% of the Group’s revenues.
2020
Segment
US$’000
2019
Segment
US$’000
Customer 1
Customer 2
Customer 3
Customer 4
PGM
PGM and Agency and trading
Chrome and Agency and trading
Chrome
174 592
44 433
33 416
24 507
Specified non-current assets
South Africa
Zimbabwe
Cyprus
PGM
Chrome
Chrome
Chrome
2020
US$’000
280 029
10 303
358
290 690
110 209
42 582
41 858
39 769
2019
US$’000
264 627
8 781
103
273 511
Non-current assets includes property, plant and equipment, intangible assets and the investment accounted for using the equity
method.
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106 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
5. REVENUE
2020
Revenue recognised at a point in time
Variable revenue based on initial results
Quantity adjustments
Revenue based on fixed selling prices
Revenue recognised over time
Freight services
Revenue from contracts with customers
Fair value adjustments (refer to note 22)
Total revenue
2019
Revenue recognised at a point in time
Variable revenue based on initial results
Quantity adjustments
Revenue based on fixed selling prices
Revenue recognised over time
Freight services
Revenue from contracts with customers
Fair value adjustments (refer to note 22)
Total revenue
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Manufacturing
US$’000
Total
US$’000
191 066
(2 465)
–
–
188 601
30 018
218 619
119 081
211
23 996
17 979
161 267
–
161 267
19 427
(47)
1 139
3 590
24 109
–
24 109
–
–
2 000
–
2 000
–
2 000
329 574
(2 301)
27 135
21 569
375 977
30 018
405 995
PGM
US$’000
Chrome
US$’000
Agency and
trading
US$’000
Manufacturing
US$’000
Total
US$’000
118 188
1 788
–
–
119 976
10 088
130 064
118 604
1 048
40 319
17 910
177 881
-
177 881
28 891
64
304
5 681
34 940
-
34 940
–
–
–
–
–
–
–
265 683
2 900
40 623
23 591
332 797
10 088
342 885
During the year ended 30 September 2020, revenue from freight services of US$1.0 million (2019: US$2.2 million) was recognised,
which was classified as a contract liability at 30 September 2019.
Variable revenue recognised:
PGM revenue recognised in preceding year based on initial results
PGM revenue based on final results
PGM revenue adjustment recognised in current year
Chrome revenue recognised in preceding year based on initial results
Chrome revenue based on final results
Chrome revenue adjustment recognised in current year
2020
US$’000
2019
US$’000
(35 296)
36 715
1 419
(35 153)
35 199
46
(29 352)
28 957
(395)
(45 805)
45 618
(187)
The period ended 30 September 2020 includes PGM revenue of US$62.0 million (2019: US$39.9 million) and chrome revenue of
US$32.4 million (2019: US$37.7 million) that was based on provisional results as final prices and surveys were not yet available at
30 September 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
107
2020
US$’000
2019
US$’000
21 496
16 011
17 117
22 524
23 090
15 506
14 870
3 090
15 360
9 165
23 076
30 607
31 318
13 278
22 391
4 141
133 704
149 336
13 587
11 699
15 862
8 830
2 250
11 581
63 809
9 814
(2 346)
49 013
21 569
13 906
11 586
19 597
2 813
3 067
13 142
64 111
4 267
(11 057)
52 213
23 591
275 563
282 461
6. COST OF SALES
Mining
Drill and blast
Load and haul
Diesel
Salaries and wages
Maintenance
Depreciation
Cost of commodities
Impairment and write off of property, plant and equipment
Processing
Salaries and wages
Utilities
Materials and consumables
Contractor and equipment hire
Overhead
Depreciation
State royalties
Change in inventories – finished products and ore stockpile
Selling costs
Freight services
Cost of sales
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a
t
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n
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a
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l
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S
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u
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s
t
t
a
a
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a
a
b
b
i
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l
i
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y
S
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a
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G
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7
7
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F
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I
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m
a
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S
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h
h
o
o
d
d
e
e
r
r
l
l
108 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
7. ADMINISTRATIVE EXPENSES
Directors and staff costs
Non-executive directors
Employees: salaries
bonuses
pension fund, medical aid and other contributions
Audit – external audit services
Audit – other services*
Consulting and business development cost
Corporate and social investment
Depreciation
Discount facility and related fees
Equity-settled share based payment expense
Internal audit
Listing fees and investor relations
Health and safety
Insurance
Legal and professional
Loss on disposal of property, plant and equipment
Office administration, rent and utilities
Research and development
Security
Telecommunications and IT-related
Training
Travelling and accommodation
Sundry
Number of employees
2020
US$’000
2019
US$’000
626
14 701
784
1 854
17 965
436
19
2 454
366
862
711
1 939
28
152
1 426
1 817
556
-
1 060
183
1 110
3 259
159
304
521
35 327
2020
1 868
629
15 234
1 518
1 836
19 217
353
6
2 678
198
816
759
3 583
60
180
1 132
743
600
33
985
351
1 443
2 331
505
702
577
37 252
2019
1 872
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THARISA PLC INTEGRATED ANNUAL REPORT 2020
109
8. TAX
Corporate income tax for the year
Cyprus
South Africa
Special contribution for defence in Cyprus
Deferred tax: originating and reversal of temporary
differences
Dividend withholding tax
Tax charge
2020
US$’000
2019
US$’000
1 032
2 535
3 567
1
17 128
105
20 801
1 243
1 488
2 731
3
45
–
2 779
Reconciliation between tax charge and accounting
profit at applicable tax rates:
2020
US$’000
2019
US$’000
2020
US$’000
2019
US$’000
Profit before tax
Add share of loss of investment accounted for using the
equity method
Tharisa plc and subsidiary companies’ profit before tax
Notional tax on profit before tax, calculated at the Cypriot/
South African income tax rate of 12.5%/28.0%
(2019: 12.5%/28.0%)
Tax effects of:
75 752
11 155
75 752
11 155
614
76 366
1 652
12 807
614
76 366
1 652
12 807
9 546
1 601
21 382
3 586
Different tax rates from the standard Cypriot/South African
income tax rate
Tax exempt income
10 895
Fair value adjustments
Interest received
Currency gains
Other
Non-deductible expenses
Investment related
Interest paid
Capital expenses
Special contribution for defence in Cyprus
Dividend withholding tax
Recognition of deemed interest income for tax purposes
(22)
(137)
(18)
(1)
345
9
50
1
105
28
860
-
(2)
–
10
–
146
8
76
3
–
77
(1 388)
240
(50)
(306)
(41)
(1)
773
20
111
2
236
63
–
(1 764)
–
21
–
328
18
172
6
–
172
2 779
G
o
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r
n
a
n
c
e
7
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w
F
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a
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c
i
a
l
Tax charge
20 801
2 779
20 801
Tax is recognised on management’s best estimate of the weighted average annual income tax rate expected for the full financial
year applied to the pre-tax income of the year.
The Group’s consolidated effective tax rate for the year ended 30 September 2020 was 27.5% (2019: 24.9%).
At 30 September 2020, the Group’s unredeemed capital balance available for offset against future mining taxable income in
South Africa amounted to US$106.2 million (2019: US$100.2 million). Other than Cyprus and South Africa, no provision for tax in
other jurisdictions was made as these entities either sustained losses for taxation purposes or did not earn any assessable profits.
Judgement and estimates: most meaningful tax rate
IAS 12 requires entities to disclose a tax rate reconciliation to enable users to understand whether the relationship between the accounting
profit and taxation is unusual and to understand significant factors that could affect that relationship in the future. In preparation of the tax
rate reconciliation, entities select a most meaningful tax rate to which the profit before tax is applied and to which the tax charge for the year
is then reconciled. The Group previously selected the Cyprus corporate income tax rate as the most meaningful tax rate. Since the majority of
the Group’s profits are currently earned in South Africa, management considers that it is appropriate to include a tax rate reconciliation for
which the South African income tax rate is selected as the most meaningful tax rate.
I
n
f
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r
m
a
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i
o
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S
h
a
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e
h
o
d
e
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110 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
9. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share and headline and diluted headline earnings per share have been based
on the profit attributable to the ordinary shareholders of the Company and the weighted average number of ordinary shares
outstanding. Treasury shares are excluded from the weighted average number of ordinary shares outstanding. Vested Share
Appreciation Rights (‘SARS’) issued to employees at award prices lower than the current share price, results in a potential dilutive
impact on the weighted average number of issued ordinary shares and have been included in the calculation of dilutive weighted
average number of issued ordinary shares. The average market value of the Company’s shares for the purposes of calculating the
potential dilutive effect of SARS was based on quoted market prices for the year during which the options were outstanding.
Basic and diluted earnings per share
Profit for the year attributable to ordinary shareholders (US$’000)
Weighted average number of issued ordinary shares for basic earnings per share (‘000)
Weighted average number of issued ordinary shares for diluted earnings per share (‘000)
Earnings per share
Basic (US$ cents)
Diluted (US$ cents)
Headline and diluted headline earnings per share
Headline earnings for the year attributable to ordinary shareholders (US$’000)
Weighted average number of issued ordinary shares for basic headline earnings per share (‘000)
Weighted average number of issued ordinary shares for diluted headline earnings per share (‘000)
Headline earnings per share
Basic (US$ cents)
Diluted (US$ cents)
2020
2019
43 296
266 611
267 355
16.2
16.2
10 616
263 131
264 877
4.0
4.0
2020
2019
44 938
266 611
267 355
16.9
16.8
12 840
263 131
264 877
4.9
4.9
THARISA PLC INTEGRATED ANNUAL REPORT 2020
111
9. EARNINGS PER SHARE (continued)
Reconciliation of profit to headline earnings
Profit attributable to ordinary shareholders
Adjustments:
Impairment of property, plant and
equipment
(Profit)/loss on disposal of property, plant
and equipment
Headline earnings
2020
2019
Gross
US$’000
Tax
US$’000
Non-
controlling
interest
US$’000
Net
US$’000
Net
US$’000
43 296
10 616
3 089
(8)
(865)
2
(578)
1 646
2 206
2
(4)
44 938
18
12 840
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7
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i
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I
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S
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a
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e
h
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d
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112 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
10. PROPERTY, PLANT AND EQUIPMENT
30 September 2020
Cost
Balance at 30 September 2019
Additions
Lease agreements entered into
Transfers
Business combination (note 21)
Disposals
Re-measurement
Impairment and write offs
Exchange differences on translation
Balance at 30 September 2020
Accumulated depreciation
Balance at 30 September 2019
Charge for the year
Business combination (note 21)
Disposals
Impairment and write offs
Exchange differences on translation
Balance at 30 September 2020
30 September 2019
Cost
Balance at 30 September 2018
Additions
Lease agreements entered into
Transfers
Disposals
Re-measurement
Impairment and write offs
Exchange differences on translation
Balance at 30 September 2019
Accumulated depreciation
Balance at 30 September 2018
Charge for the year
Transfers
Disposals
Impairment
Exchange differences on translation
Balance at 30 September 2019
Freehold land
and buildings
US$’000
Mining assets
and
infrastructure
US$’000
Mining fleet
US$’000
Right-of-use
asset: mining
fleet
US$’000
14 731
303
–
11
660
–
–
–
(1 425)
14 280
865
202
–
–
–
(85)
982
14 861
918
–
–
–
–
–
(1 048)
14 731
740
185
–
–
–
(60)
865
273 346
44 067
–
254
682
–
–
(2 759)
(26 327)
289 263
79 483
11 439
340
–
(2 759)
(7 587)
80 916
276 345
12 620
–
3 528
(86)
407
(26)
(19 442)
273 346
72 390
12 691
–
(39)
(16)
(5 543)
79 483
58 085
24 731
–
–
–
(3 017)
–
(3 040)
(5 874)
70 885
16 719
11 772
–
(2 303)
(140)
(1 803)
24 245
36 872
27 474
–
1 622
(1 278)
–
(2 781)
(3 824)
58 085
8 274
8 763
682
(889)
955
(1 066)
16 719
16 543
–
617
–
–
–
74
(919)
(1 516)
14 799
4 674
2 867
–
–
(745)
(491)
6 305
14 182
–
5 854
(1 622)
–
2
(733)
(1 140)
16 543
2 732
3 273
(682)
–
(346)
(303)
4 674
THARISA PLC INTEGRATED ANNUAL REPORT 2020
113
Motor
vehicles
US$’000
Computer
equipment
and software
US$’000
Office
equipment
and furniture,
community
and site office
improvements
US$’000
Right-of-use
asset:
buildings
US$’000
1 284
175
–
–
58
(66)
–
–
(126)
1 325
398
122
31
(19)
–
(43)
489
651
715
–
–
–
–
–
(82)
1 284
341
85
(1)
–
(27)
398
5 338
1 194
–
(265)
25
(8)
(4)
(1 912)
(500)
3 868
4 741
1 086
12
(8)
(1 906)
(397)
3 528
7 223
2 061
–
(3 528)
(2)
–
(26)
(390)
5 338
3 340
1 732
1
(2)
(25)
(305)
4 741
807
88
–
–
40
–
–
(308)
(60)
567
586
89
29
–
(298)
(40)
366
771
93
–
–
(3)
–
(7)
(47)
807
541
86
–
(3)
(5)
(33)
586
2 108
–
–
–
–
–
(31)
–
(186)
1 891
796
372
–
–
–
(81)
1 087
2 296
–
70
–
–
–
(77)
(181)
2 108
532
421
–
–
(72)
(85)
796
Total
US$’000
372 242
70 558
617
–
1 465
(3 091)
39
(8 938)
(36 014)
396 878
108 262
27 949
412
(2 330)
(5 848)
(10 527)
117 918
353 201
43 881
5 924
–
(1 369)
409
(3 650)
(26 154)
372 242
88 890
27 236
–
(933)
491
(7 422)
108 262
–
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a
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h
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114 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
10. PROPERTY, PLANT AND EQUIPMENT (continued)
Net book value
Freehold land and buildings
Mining assets and infrastructure
Mining fleet
Right-of-use mining fleet
Motor vehicles
Computer equipment and software
Office equipment and furniture, community and site office improvements
Right-of-use buildings and premises
2020
US$’000
2019
US$’000
13 298
208 347
46 640
8 494
836
340
201
804
278 960
13 866
193 863
41 366
11 869
886
597
221
1 312
263 980
Included in additions to mining assets and infrastructure are additions to the deferred stripping asset of US$22.7 million
(2019: US$0.2 million).
The estimated economically recoverable proved and probable mineral reserve was reassessed at 1 October 2019 which gave rise
to a change in accounting estimate. The remaining reserve that management had previously assessed was 92.7 Mt
(at 1 October 2018). At 1 October 2019, the remaining reserve was assessed to be 97.5 Mt.
As a result, and taking into account depletion of the reserve during the year ended 30 September 2020 (4.9 Mt), the expected
useful life of the plant increased. The impact of the change on the actual depreciation expense, included in cost of sales, is a
reduced depreciation charge of US$0.8 million. The change in estimate was recognised prospectively.
Included in mining assets and infrastructure are projects under construction of US$25.6 million (2019: US$14.8 million).
Freehold land and buildings comprises various portions of the farms Elandsdrift 467 JQ, Buffelspoort 343 JQ and 342 JQ,
North West province, South Africa. All land is freehold.
Property, plant and equipment, with the exception of motor vehicles, is insured at approximate cost of replacement. Motor vehicles
are insured at market value. Land is not insured.
Capital commitments
At 30 September 2020, the Group’s capital commitments for contracts to purchase property, plant and equipment amounted to
US$30.7 million (2019: US$17.9 million).
Securities
At 30 September 2020, the majority of the Group’s mining fleet was pledged as security against the equipment loan facility.
Impairment
During the year ended 30 September 2020, the Group impaired and scrapped individual assets totalling US$3.1 million
(2019: US$4.1 million). The impairment during both the financial years relate to yellow fleet equipment identified as no longer fit
for use and premature component failures. The impaired assets are not part of a cash generating unit for which any goodwill has
been recognised.
The mining component premature failures are identified through the measurement of the hours depreciated for each component
in relationship to the expected useful live. An impairment loss is recognised for each component that did not reach its expected
useful life. Further to this mining fleet impairment is also identified from fleet that is confirmed as obsolete by management. Where
equipment was not in use for a period of longer than six months, an impairment is raised as future value would be expected to be
lower than book value.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
115
11. INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD
During the year ended 30 September 2018, the Group acquired 26.8% of the issued share capital of Karo Mining Holdings Limited
(‘Karo Holdings’), a company incorporated in Cyprus, for a total cash consideration of US$4.5 million from the Leto Settlement,
a related party.
Karo Holdings entered into an Investment Project Framework Agreement with the Republic of Zimbabwe in terms of which
Karo Holdings, through any of its subsidiaries, has undertaken to establish a platinum group metals mine, concentrators, smelters,
a base metal and precious metals refinery as well as power generation capacity for the operations with surplus energy capacity
made available to the Zimbabwe power grid (collectively referred to as ‘the Project’).
Karo Holdings’ principal place of business is in Cyprus. The functional and presentation currency of Karo Holdings and its
subsidiaries is the US$. The table below details Karo Holdings’ interest in subsidiaries as at 30 September 2020 and
30 September 2019.
Company name
Karo Zimbabwe Holdings
(Private) Limited
Karo Platinum (Private) Limited*
Karo Coal Mines (Private)
Limited**
Karo Power Generation (Private)
Limited**
Karo Refinery (Private) Limited**
Effective
interest
Country of incorporation
and principal place of
business
100%
100%
100%
100%
100%
Zimbabwe
Zimbabwe
Zimbabwe
Principal activity
Investment holding
Platinum mining
Coal
Zimbabwe
Zimbabwe
Power generation
PGM smelting and refining
*
In terms of the Investment Project Framework Agreement, 50% of the shareholding in this company is required to be transferred to an investment entity
owned by the Republic of Zimbabwe, the communities and employees.
** In terms of the Investment Project Framework Agreement, 25% of the shareholding in this company is required to be transferred to an investment entity
owned by the Republic of Zimbabwe, the communities and employees.
The Group entered into a Shareholders’ Agreement with Leto Settlement whereby management of the Project will exclusively vest
in the Company or any of its subsidiaries. Any decisions about the relevant activities require unanimous consent of the
shareholders. The Group has determined that a joint arrangement exists and consequently has classified its investment in Karo
Holdings as a joint venture. The Group accounts for joint ventures using the equity method in the condensed consolidated financial
statements.
Investment in Karo Holdings
Opening balance
Advances during the year
Share of total comprehensive loss
Shares acquired
Loan advance
Total share of comprehensive loss from joint venture
Total investment
Summarised consolidated financial information of Karo Holdings
Summarised statement of financial position
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net deficit (100%)
Summarised statement of comprehensive income
Operating expenses
Finance costs
Tax
Total comprehensive loss
2020
US$’000
2019
US$’000
8 781
2 136
(614)
10 303
4 500
8 131
(2 328)
10 303
216
634
(8 431)
(1 106)
(8 687)
(2 004)
(274)
(14)
(2 292)
4 438
5 995
(1 652)
8 781
4 500
5 995
(1 714)
8 781
574
27
(5 995)
(1 000)
(6 394)
(6 106)
–
(60)
(6 166)
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7
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116 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
11. INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD (continued)
Summarised statement of changes in equity
Share
capital
US$’000
2020
Retained
earnings
US$’000
Total
US$’000
Share
capital
US$’000
2019
Retained
earnings
US$’000
Balance at 1 October
Net loss for the year
Balance at 30 September
1
–
1
(6 395)
(2 292)
(8 687)
(6 394)
(2 292)
(8 686)
1
–
1
(229)
(6 166)
(6 395)
Total
US$’000
(228)
(6 166)
(6 394)
Contingencies and commitments
Arxo Finance Limited, a wholly-owned subsidiary of the Company, has provided funding up to US$8.0 million (excluding accrued
interest) to Karo Holdings as a repayable debt facility. This was utilised in part to undertake initial geological exploration and
sampling work to determine a compliant mineral resource which will enhance the value of the investment in Karo Holdings.
At 30 September 2020, US$7.9 million (2019: US$6.0 million) had been advanced to Karo Holdings. Interest receivable of
US$0.3 million was capitalised to the loan receivable. The loan bears interest US Libor plus 250 basis points and is unsecured.
Judgements and estimates: joint arrangement
Judgement is required to determine when the Group has joint control of joint arrangements. This requires an assessment when
the decisions in relation to relevant activities require unanimous consent. Relevant activities are those relating to the operating
and capital decisions of the arrangement, such as the approval of the capital expenditure programme for each year, and
appointing, remunerating and terminating the key management personnel or service providers of the operations.
Judgement is also required in determining the classification of a joint arrangement between a joint venture or a joint operation
through an evaluation of the rights and obligations arising from the arrangement and in particular, if the joint arrangement has
been structured through a separate vehicle, further consideration is required of whether:
(cid:3)(cid:79) the legal form of the separate vehicle gives the parties rights to the assets and obligations for the liabilities;
(cid:3)(cid:79) the contractual terms and conditions give the parties rights to the assets and obligations for the liabilities; and
(cid:3)(cid:79) other facts and circumstances give the parties rights to the assets and obligations for the liabilities.
Differing conclusions around these judgements may materially impact how these businesses are presented in the condensed
consolidated financial statements.
Joint arrangements typically convey substantially all the economic benefits of the assets to the parties and judgement is required
in assessing whether the terms of the agreements and any other obligations for liabilities of the arrangement result in the
parties being substantially the only source of cash flows contributing to the continuity of the operations of the arrangement.
The investment in Karo Holdings is accounted for as a joint venture. The parties are not obligated to cover any potential funding
shortfalls. In management’s judgement, the Group is not the only possible source of funding and does not have a direct or
indirect obligation to the liabilities of the arrangement, but rather shares in its net assets and, therefore, the arrangement has
been accounted for as a joint venture.
Judgements and estimates: impairment of joint venture
The application of the Group’s accounting policy for the assessment of impairment of joint ventures involved in exploration and
evaluation activities requires judgment to determine whether future economic benefits are probable, specifically when activities
have not yet reached a stage which permits a reasonable assessment of the existence of reserves and resources. The
determination of reserves and resources is in itself an estimation process that requires consideration to varying degrees of
uncertainty. The Group periodically evaluates the recoverability of its investments in joint ventures whenever indicators of
impairment are present. Indicators of impairment include such items as unfavourable results in exploration activities or material
adverse changes in the economic or political stability of a particular country, which may indicate that the carrying amount of an
asset is no longer recoverable. If facts and circumstances indicate that the Group’s investment in joint ventures may be impaired,
the estimated recoverable amount of the investment would be compared to its carrying amount to determine if a write down is
required. The Group believes that no impairment is required as at 30 September 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
117
11. INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD (continued)
Judgements and estimates: impairment of joint venture (continued)
The investment in Karo Holdings was considered against (a) the results of its exploration activities; and (b) the economic and
political stability of Zimbabwe as it pertains to its exploration activities.
The results of the exploration programme to date are in line with initial expectations supported by publicly available information
relating to PGM projects on the Great Dyke. It is probable that, based on the extensive exploration area, continued drilling
programme will be required to properly delineate the resource and reserve and the optimal site for commencement of mining
operations. Based on the exploration activity results there is therefore no reason to consider impairing the investment.
While it is common purpose/knowledge based on press coverage that the economic situation in Zimbabwe may be considered
unstable, Karo Holdings is undertaking exploration activities and is contributing to the economy of the country. The economic
situation in Zimbabwe, while presenting a more challenging environment in which to operate, has not impacted on the
exploration programme in such a manner as to require an impairment to the investment. The currency policies and the changes
thereto have needed to be navigated. Expenditure is mainly denominated in US$, the functional currency of Karo Holdings.
It is worth noting that the major PGM producers have mining operations in Zimbabwe that are operating profitably.
The operations are currently at an exploration phase. The Zimbabwean government has historically respected the sanctity of
mining tenements and the special grants awarded to Karo Platinum (Private) Limited (‘Karo Platinum’) were awarded in terms of
the applicable legal framework. The political position of Zimbabwe is that it ‘is open for business’ and is endeavouring to attract
foreign inward investment. This is supported by the restitution of farm land and/or agreement to settle amounts owing to
previous farmers in Zimbabwe. As such, while the political stability of Zimbabwe was considered as part of the impairment
review process, there is no indication that the investment should be impaired.
The Karo Platinum exploration area was afforded Special Economic Zone status which provides certain benefits to companies
operating within such zones including the importation of equipment on a duty free basis, retention of sales proceeds in US$,
payment of certain suppliers in US$ and numerous other benefits. The Company needed to navigate the currency regulations,
which it did in consultation with the Zimbabwean Reserve Bank, finance and mining ministries.
Judgements and estimates: functional currency
In accordance with IAS21, Karo Holdings has considered the following factors in the determination of the functional currency:
(cid:3)(cid:79) Currency of sales and future sales. While operations are still in exploration phase, PGM concentrates and chrome concentrate
sales are concluded in US$;
(cid:3)(cid:79) Currency of operating costs. The majority of costs are paid in US$ to service providers in Zimbabwe, South Africa, Cyprus and
Australia. Fees for services are quoted in US$. Karo Zimbabwe Holdings (Private) Limited obtained foreign exchange control
approval to allow funds to be transferred into its Zimbabwean local account during the 2019 financial year. While local
transactions in foreign currency were outlawed on 24 June 2019 as a result of the introduction of the sole Zimbabwean
currency, such transactions were limited due to the pending foreign exchange control application. Thus, on the basis of costs,
the operating currency would be the US$;
(cid:3)(cid:79) Funding: the funding made available to Karo Holdings is denominated in US$. Using funding as the basis for the
determination of functional currency, it is clear that the functional currency is the US$.
(cid:3)(cid:79) Cash flows: the cash flows comprised US$ denominated intergroup loans paid directly to the service providers and suppliers
of goods; and
(cid:3)(cid:79) Group considerations: Karo Zimbabwe Holdings (Private) Limited is a 100% subsidiary of Karo Holdings domiciled in Cyprus.
In terms of degree of autonomy of Karo Zimbabwe Holdings (Private) Limited and its subsidiaries, the group is dependent on
the parent.
The Group concludes that the functional currency of the Karo Group is the US$. The Zimbabwean government has issued a
number of statutory instruments while it has been managing in a hyperinflationary economic environment with a shortage
of hard foreign currency reserves. There are various advantages to a Special Economic Zone, ranging from beneficial tax rates for
a certain period of time, to no licences required and no import duty for the import of equipment. The benefits of the Special
Economic Zone therefore mitigated the risks associated with the currency regulations and the functional currency of Karo being
US$ addressed the weakening ZWL supported by nominal expenses being denominated in ZWL which would, in any event,
benefit Karo Holdings.
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118 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
12. OTHER FINANCIAL ASSETS
Non-current assets:
Investments in money markets, current accounts, cash funds and
income funds
Current assets:
Investments in equity instruments
Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited
Prepaid investment in Salene Chrome Zimbabwe (Private) Limited
Loan receivable
Fair value hierarchy
2020
US$’000
2019
US$’000
Level 2
6 791
6 080
Level 1
Level 3
Amortised cost
Amortised cost
8
178
1 976
7
2 169
23
–
1 367
–
1 390
Investments in money markets, current accounts, cash funds and income funds – fair value through profit or loss
Investment in money market and current accounts totalling US$5.6 million (2019: US$4.8 million) is managed by Centriq Insurance
Company Limited (‘Centriq’). The investment serves as security for the guarantee issued by Centriq to the Department of
Mineral Resources and Energy (‘DMRE’) for the rehabilitation provision. The guarantee issued by Centriq has a fixed cover period
from 1 December 2014 to 30 November 2020.
Investment in cash funds and income funds of US$1.2 million (2019: US$1.3 million) managed by Stanlib Collective Investments.
The investment is ceded to Lombard Insurance Group (‘Lombard’) against a ZAR12.0 million (2019: ZAR12.0 million) guarantee
issued by Lombard on behalf of Arxo Logistics Proprietary Limited to Transnet Freight Rail, a division of Transnet SOC Limited.
These investments are separately administered and the Group’s right of access to these funds is restricted.
The investments in cash funds and income funds are held at fair value through profit or loss (designated). The underlying
investments are in money market and other funds and the fair value has been determined by reference to their quoted prices.
Investments in equity instruments – fair value through profit or loss
Investments at fair value through profit or loss are valued based on quoted market prices at the end of the reporting period
without any deduction for transaction costs. The investment represents shares in the Bank of Cyprus Public Co Limited.
Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited
Management assessed the terms and conditions of this call option and considered whether the potential voting rights in Salene
from the future exercise of the option are substantive, as defined in IFRS 10. This assessment took into account, among others, a
number of conditions precedent, including the JSE Listings Requirements pertaining to related party transactions, as well as other
regulatory approvals that preclude the Company from exercising its right. Based on this evaluation, management concluded that it
did not have the practical ability to exercise the right as at 30 September 2020.
The Company has been granted a call option to acquire a 90.0% shareholding in Salene Chrome Zimbabwe (Private) Limited
(‘Salene’) a company incorporated in Zimbabwe from the Leto Settlement, a related party (refer to note 35). Salene has been
awarded special grants under the Zimbabwe Mines and Minerals Act covering an area of approximately 9 500 hectares (95 km²)
on the eastern and western sides of the Great Dyke in Zimbabwe, which entitles it to mine the minerals thereon. The call option
originally expired on 30 September 2020 but was extended to 31 December 2020. The decision to exercise the call option is at
the Group’s election and is exercisable upon either the completion of an initial exploration programme or the Group being in
possession of appropriate and reliable information about the project value. In consideration of the call option, the Group will
undertake the initial exploration programme including the costs thereof up to an amount of US$3.2 million. At 30 September
2020, the Group incurred US$2.0 million (2019: US$1.4 million) of exploration costs relating to the initial exploration programme.
At the date of this report, the call option has not yet been exercised.
During the year ended 30 September 2020, notwithstanding that the exploration programme being undertaken by Tharisa was
not complete, the Leto Settlement, the shareholder of Salene, funded and commenced with mining operations on a trial basis. This
practice of trial mining is typical for mining chrome on the Great Dyke. Consequently, site clearance commenced followed by bulk
stripping. The trial mining operations commenced on 20 April 2020. The commercial viability of producing chrome from the Salene
deposit will form part of the assessment on the exercise of the call option in Salene. Following the commencement of mining
operations, the Group decided to suspend the initial exploration programme.
With the results available from the exploration activities concluded, preliminary mining being undertaken and the mining producing
lumpy chrome material, the Group is better positioned to assess the project value. The Group completed a discounted cash flow
model by using the following significant inputs:
Life of open pit mine
Annual chrome concentrate production
Discount rate
Chrome lumpy ore FCA selling price
Four years
60 kt
11.8%
US$70 per tonne
As at 30 September 2020, US$2.0 million (2019: US$1.4 million) relates to exploration costs invested in the initial exploration
programme. Taking this into account, as at 30 September 2020 the fair value of the option to acquire the shares amounts to
US$0.2 million (2019: US$ nil) for which a fair value gain of US$0.2 million was recognised in prior or loss.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
119
12. OTHER FINANCIAL ASSETS (continued)
Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited (continued)
Management assessed the terms and conditions of this call option and considered whether the potential voting rights in Salene
from the future exercise of the option are substantive, as defined in IFRS 10. This assessment took into account, among others, a
number of conditions precedent, including the JSE Listings Requirements pertaining to related party transactions, as well as other
regulatory approvals that preclude the Company from exercising its right. Based on this evaluation, management concluded that it
did not have the practical ability to exercise the right as at 30 September 2020.
13. INVENTORIES
Finished products
Ore stockpile
Consumables
Impairment reversal/(impairment) of consumables
Total carrying amount
2020
US$’000
2019
US$’000
12 978
8 962
19 810
41 750
114
41 864
16 436
3 158
16 854
36 448
(114)
36 334
Inventories are stated at the lower of cost or net realisable value. The Group reversed certain previously impaired consumables and
spares during the year ended 30 September 2020. These consumables and spares were impaired during the year ended
30 September 2019. The reversal of the impairment is allocated 75.0% and 25.0% respectively to the PGM and chrome operating
segments) (2019: allocated 55.0% to the PGM operating segment and 45.0% to the chrome operating segment).
PGM finished products were written down to the net realisable value during the year ended 30 September 2020. The net realisable
write down amounted to US$0.5 million (2019: US$0.2 million) and is allocated to the PGM segment.
Inventories serve as collateral for the bank credit facilities, refer to note 18.
14. TRADE AND OTHER RECEIVABLES
Trade receivables
PGM discounting receivable
Total trade receivables
Other receivables – related parties (refer to note 23)
Deposits, prepayments and other receivables
Accrued income
Value added tax receivable (VAT)
2020
US$’000
2019
US$’000
61 474
37 059
98 533
1 440
4 250
1 119
6 714
112 056
26 119
33 686
59 805
342
3 757
1 659
8 294
73 857
Trade and other receivables of the Group are expected to be recoverable within one year from each reporting date. Trade
receivables are unsecured, non-interest bearing and payment terms vary from 0 to 120 days (2019: 0 to 120 days). No impairment
of trade receivables was recognised during the year ended 30 September 2020 (2019: no impairment).
The table below summarises the maturity of trade receivables:
Current
Less than 90 days past due but not impaired
Greater than 90 days past due but not impaired
2020
US$’000
2019
US$’000
98 011
13
509
98 533
58 714
164
927
59 805
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120 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
14. TRADE AND OTHER RECEIVABLES (continued)
The credit exposure of trade receivables by country is as follows:
South Africa
China
Hong Kong
Singapore
United Arab Emirates
The foreign currency denominated balances, included in trade receivables were as follows:
ZAR’000
EUR’000
GBP’000
2020
US$’000
2019
US$’000
70 873
10 723
8 890
4 232
3 815
98 533
58 783
7
34
43 982
7 049
5 125
363
3 286
59 805
126 998
6
22
At 30 September 2020, the Group had certain unresolved tax matters. Included in trade and other receivables is an amount of
US$5.5 million (ZAR91.2 million) which relates to diesel rebates receivable from the South African Revenue Service (‘SARS’) in
respect of the mining operations. The amount of US$0.5 million (ZAR8.8 million) of this receivable relates to the amount that is
undisputed in the current year. SARS rejected diesel claims of US$4.3 million (ZAR71.1 million) for the period September 2011 to
April 2017 and also rejected the claim of US$1.8 million (ZAR30.0 million) relating to May 2017 to February 2018. An accounting
receivable of ZAR82.3 million has been raised in relation to the total amount of ZAR101.0 million in dispute. The Group is taking
the necessary action to recover the amount due.
15. CASH AND CASH EQUIVALENTS
Bank balances
Short-term bank deposits
The credit exposure by country is as follows:
South Africa
Hong Kong
Mauritius
Cyprus
Other countries
The credit exposure by bank and credit ratings are as follows:
Nedbank
HSBC
Bank of China
Bank of Cyprus
Citibank
Absa
Other
BB+
AA+
A
B-
A
BB+
B- to BB+
2020
US$’000
2019
US$’000
47 103
2 190
49 293
29 093
13 813
644
5 247
496
49 293
19 679
13 843
6 345
5 259
2 652
994
521
49 293
55 409
3 792
59 201
48 391
8 482
923
649
756
59 201
24 663
10 956
12 611
666
8 696
987
622
59 201
The amounts reflected above approximate fair value.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are generally call deposit
accounts and earn interest at the respective short-term deposit rates.
At 30 September 2020, an amount of US$0.9 million (2019: US$1.3 million) was provided as security for a bank guarantee issued
in favour of a trade creditor of a subsidiary of the Group and US$0.3 million (2019: US$0.3 million) was provided as security
against certain credit facilities of the Group.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
121
16. SHARE CAPITAL AND RESERVES
Share capital
30 September 2020
30 September 2019
Number of
Shares
US$’000
Number of
Shares
US$’000
Authorised – ordinary shares of US$0.001
each
As at 30 September
Authorised – convertible redeemable
preference shares of US$1 each
As at 30 September
Issued
Ordinary shares
Balance at the beginning of the year
Issued to treasury shares
Balance at the end of the year
Treasury shares
Balance at the beginning of the year
Issued
Transferred as part of management share award
plans
Balance at the end of the year
10 000 000 000
10 000
10 000 000 000
10 000
1 051
1
1 051
1
270 000 000
5 000 000
275 000 000
3 389 678
5 000 000
(1 865 992)
6 523 686
270
5
275
3
5
(2)
6
265 000 000
5 000 000
270 000 000
4 097 571
5 000 000
(5 707 893)
3 389 678
265
5
270
4
5
(6)
3
Issued and fully paid
268 476 314
269
266 610 322
267
Share premium
Balance at the beginning of the year
Shares issued
Balance at the end of the year
Total share capital and premium
266 610 322
1 865 992
268 476 314
284 926
1 734
286 660
286 929
260 902 429
5 707 893
266 610 322
280 545
4 381
284 926
285 193
Share capital
Allotments during the year were in respect of 5 000 000 (2019: 5 000 000) ordinary shares issued as treasury shares to satisfy the
vesting of Conditional Awards and potential future settlement of Appreciation Rights of the participants’ of the Tharisa Share
Award Plan.
During the year ended 30 September 2020, 1 865 992 (2019: 5 707 893) ordinary shares were transferred from treasury shares
to satisfy the vesting/exercise of Conditional Awards and Appreciation Rights by the participants of the Tharisa Share Award Plan.
At 30 September 2020, 6 523 686 (2019: 3 389 678) ordinary shares were held in treasury.
All shares rank equally with regard to the Company’s residual assets. The holders of ordinary shares, other than treasury shares,
are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
Share premium
The share premium represents the excess of the issue price of ordinary shares over their nominal value, to the extent that it is
registered at the Registrar of Companies in Cyprus, less share issue costs. The share premium is not distributable for dividend
purposes.
During the years ended 30 September 2020 and 30 September 2019, the increases in the share premium account related to the
issue and allotment of ordinary shares granted in terms of the Share Award Plan.
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122 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
17. PROVISIONS
The Group has a legal obligation to rehabilitate the mining area, once the mining operations cease. The provision has been
calculated based on total estimated rehabilitation costs, discounted back to their present values. The pre-tax discount rates are
adjusted annually and reflect current market assessments. These costs are expected to be utilised mostly towards the end of the
life of mine and associated infrastructure, which is currently estimated to be between financial years 2032 and 2046
(2019: life of open pit mine, 14 years). The provision is determined using commercial closure cost assessments and not the inflation
adjusted Department of Mineral Resources and Energy published rates.
Provision for
rehabilitation
Restoration
US$’000
2020
Decommis-
sioning
US$’000
Total
provision
US$’000
Restoration
US$’000
2019
Decommis-
sioning
US$’000
Total
provision
US$’000
Opening balance
Recognised in profit or
loss
Capitalised/(reversal) to
mining assets and
infrastructure
Unwinding of discount
Exchange differences
Closing balance
6 424
6 677
13 101
5 921
6 713
12 634
(183)
–
(183)
415
–
415
–
541
(601)
6 181
1 949
562
(685)
8 503
1 949
1 103
(1 286)
14 684
-
536
(448)
6 424
(166)
604
(474)
6 677
The table below illustrates the movement in the provision as a result of mining operations and changes in variables.
30 September 2020
Provision for restoration
Provision for decommissioning
30 September 2019
Provision for restoration
Provision for decommissioning
Opening
balance
US$’000
Mining
operations
US$’000
Changes
on variables
S$’000
Exchange
differences
US$’000
6 424
6 677
13 101
5 921
6 713
12 634
(363)
1 164
801
3 057
162
3 219
722
1 348
2 070
(2 106)
276
(1 830)
(602)
(686)
(1 288)
(448)
(474)
(922)
(166)
1 140
(922)
13 101
Closing
Balance
US$’000
6 181
8 503
14 684
6 424
6 677
13 101
The current estimated rehabilitation cost to be incurred mostly between financial years 2032 and 2046 (2019: at the end of the life
of mine) taking escalation factors into account is US$24.2 million (ZAR404.9 million) (2019: US$25.6 million (ZAR388.4 million)).
The estimate was calculated by an independent external expert.
The current estimated rehabilitation cost is projected to a future value based on a weighted average long-term inflation rate of
6.7% (2019: 5.51%). The net present value of the rehabilitation estimated future value is discounted based on a weighted average
SWAP curve (2019: 10 year and longer daily average yield based on government bonds). The calculated interest rate was 9.3%
(2019: 9.0%).
An insurance company has provided a guarantee to the DMRE to satisfy the legal requirements with respect to environmental
rehabilitation and the Group has pledged as collateral its investments in interest- bearing instruments to the insurance company to
support this guarantee.
18. BORROWINGS
Non-current
Facilities
Equipment loan facility
Finance leases
Loan
Property loans
Current
Facilities
Equipment loan facility
Finance leases
Loan
Property loans
Bank credit facilities
THARISA PLC INTEGRATED ANNUAL REPORT 2020
123
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a
l
S
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b
i
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i
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y
2020
US$’000
2019
US$’000
-
12 738
2 838
–
556
16 132
23 849
7 730
3 844
1 670
43
17 345
54 481
4 279
7 901
5 873
1 850
–
19 903
25 000
3 698
5 707
2 008
–
14 900
51 313
Facilities
Effective 28 March 2018, the Group concluded the US$47.9 million (ZAR800 million) Facilities which comprise of:
(cid:3)(cid:79) a three-year senior secured amortising term loan of US$24.0 million (ZAR400 million) (‘Term loan’),
(cid:3)(cid:79) a three-year secured committed revolving facility of US$18.0 million (ZAR300 million) (‘Revolving facility’); and
(cid:3)(cid:79) an overdraft facility of US$6.0 million (ZAR100 million) (‘Overdraft’).
The financing was obtained by Tharisa Minerals Proprietary Limited and guaranteed by the Company.
The Term loan bears interest at the three-month JIBAR plus 320 (2019: 320) basis points nominal annual compounded quarterly
and is repayable in twelve equal consecutive quarterly instalments commencing on 30 June 2018. The Revolving facility is available
for three years and bears interest at the one-month JIBAR plus 330 (2019: 340) basis points nominal annual compounded quarterly
and is repayable in full at least once every twelve months. The Revolving facility is available until 31 March 2021. Interest is payable
monthly in arrears. The Overdraft facility is available for one year and bears interest at the South African prime rate payable
monthly in arrears.
The Facilities contain the following financial covenants for Tharisa Minerals Proprietary Limited:
(cid:3)(cid:79) Debt to equity ratio of less than 0.67 times;
(cid:3)(cid:79) Net debt to EBITDA of less than 2.0 times; and
(cid:3)(cid:79) EBITDA to interest of greater than 3.0 times.
During the year ended 30 September 2020, the terms of the Term loan were amended to allow for a capital repayment holiday for
the quarter ended 31 March 2020. Consequently, the Term loan will be fully repaid by 30 June 2021 (2019: 31 March 2021).
At 30 September 2020, Tharisa Minerals Proprietary Limited complied with all financial covenants.
The unutilised facilities at 30 September 2020 amounted to US$17.3 million (ZAR289.7 million) (2019: US$9.9 million
(ZAR150 million)).
Loan
A subsidiary of the Company, Arxo Metals Proprietary Limited, entered into a loan agreement with Rand York Minerals Proprietary
Limited for the advance of ZAR90 million. The loan is repayable in thirty-six equal monthly instalments that commenced on
31 August 2018. The loan is unsecured and interest is calculated at the South African prime rate plus 100 basis points.
Bank credit facilities
The bank credit facilities relate to pre-shipment finance and discounting of the letters of credit by the Group’s banks following
performance of the letter of credit conditions by the Group, which results in funds being received in advance of the normal
payment date. Interest on these facilities at the reporting date varied between US Libor plus 1.6% pa and US Libor plus 3.0% pa
(2019: US Libor plus 1.6% pa and US Libor plus 3.0% pa).
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124 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
18. BORROWINGS (continued)
Equipment loan facility
During the year ended 30 September 2018, Tharisa Minerals Proprietary Limited entered into an equipment loan facility of
US$25 million with Caterpillar Financial Services Corporation for the funding of certain Caterpillar mining equipment, both
replacement parts and new mining equipment. The loan was structured in three tranches and repayment of each tranche varies
between twenty-four and forty-eight equal monthly instalments, payable in arrears. Interest was calculated on the three-month US
Libor plus 350.
During the year ended 30 September 2020, the terms were renegotiated and a fourth revolving tranche was added to the facility.
The total facility was increased to US$30 million, bears interest at the one-month US Libor plus 325 basis points and is repayable
over 48 months. The first instalment date was 31 December 2019. The facility requires a 15% deposit on all finance transactions.
The Group negotiated a three-month capital and interest payment holiday that commenced on 1 March 2020. The repayment term
and interest rate remain unchanged. The equipment loan facility is secured by a first notarial bond over the equipment and
is guaranteed by the Company.
The equipment loan facility contains the following Group financial covenants:
(cid:3)(cid:79) Net debt to tangible net worth not higher than 1.4 times;
(cid:3)(cid:79) Net debt to EBITDA lower than 2.0 times; and
(cid:3)(cid:79) EBITDA to interest greater than 4.0 times.
At 30 September 2020, the Group complied with all financial covenants.
Finance leases
The Group entered into a number of lease arrangements for the renting of office buildings, premises, computer equipment,
vehicles and mining fleet. The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases of low-value assets such as computer equipment. Lease expenses of
US$0.1 million (2019: US$0.1 million) and US$0.1 million (2019: US$0.1 million) were included in cost of sales and administrative
expenses respectively for the year ended 30 September 2020.
The duration of leases relating to buildings and premises are for a period of five years, payments are due at the beginning of the
month escalating annually on average by 8.0%. At 30 September 2020, the remaining term of these leases varies between three
and three and a half years (2019: four and four and a half years). These leases are secured by cash deposits varying from one to
three times the monthly lease payments.
The duration of leases relating to the mining fleet and manufacturing equipment are for periods between 14 and sixty-one months
(2019: 14 and thirty-six months) and bear interest at interest rates between the South African prime interest rate and the
South African prime interest rate plus 375 basis points (2019: South African prime interest rate plus 300 basis points). The leases
are secured by the mining fleet leased. During the year ended 30 September 2020, certain of the lease agreements terms were
amended. The Group negotiated a three-month lease payment holiday that commenced on 1 March 2020. Consequently, the
repayment term was extended by three months.
Minimum lease payments due:
Within one year
Two to five years
Less future finance charges
Present value of minimum lease payments due
Present value of minimum lease payments due:
Within one year
Two to five years
2020
US$’000
2019
US$’000
4 281
3 018
7 299
(617)
6 682
3 840
2 842
6 682
6 682
6 491
13 173
(1 593)
11 580
5 687
5 893
11 580
Property loans
As part of the business combination (refer to note 21), the Group acquired industrial premises and buildings. MetQ Proprietary
Limited acquired these buildings and premises immediately before the business combination and secured funding in the form of
loans owing to the previous owners. These loans bear interest at the RSA prime rate and are repayable in 10 years from
1 October 2019.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
125
18. BORROWINGS (continued)
Facilities
US$’000
Equipment
loan facility
US$’000
Finance
leases
US$’000
Bank
credit
facilities
US$’000
Loan
US$’000
Property
loans
US$’000
Other
US$’000
Total
borrowings
US$’000
Balance
30 September 2019
Changes from financing
cash flows
Advances: bank credit
facilities
Repayment: bank credit
facilities
Net repayment of bank
credit facilities
Advances received
Repayment of borrowings
Lease payments
Repayment of interest
Changes from
financing cash flows
Foreign currency
translation differences
Liability–related
changes
Lease agreements
entered into
Re–measurement of lease
liabilities
Business combination
(note 21)
Interest expense
Revaluation of foreign
denominated loan
Total liability–related
changes
Balance at
30 September 2020
Non–current borrowings
Current borrowings
Total borrowings
29 279
11 599
11 580
14 900
3 858
–
–
–
6 164
(9 394)
–
(2 272)
–
–
–
11 954
(4 323)
–
(865)
–
–
95 326
(92 839)
–
–
–
(5 673)
–
2 487
–
–
–
(269)
–
–
–
–
(1 886)
–
(273)
(5 502)
6 766
(5 673)
2 218
(2 159)
(2 612)
(1 359)
(948)
–
–
–
2 684
–
–
–
957
–
2 505
715
40
–
906
62
2 684
3 462
1 723
23 849
–
23 849
23 849
20 468
12 738
7 730
20 468
6 682
2 838
3 844
6 682
–
–
–
227
–
227
17 345
–
17 345
17 345
(302)
–
–
273
–
273
1 670
–
1 670
1 670
–
–
–
–
–
–
–
–
–
(61)
–
–
660
–
–
660
599
556
43
599
–
71 216
–
–
–
–
(6)
–
–
(6)
–
–
–
6
–
–
6
–
–
–
–
95 326
(92 839)
2 487
18 118
(15 609)
(5 673)
(3 679)
(4 356)
(5 282)
715
40
666
5 047
2 567
9 035
70 613
16 132
54 481
70 613
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126 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
18. BORROWINGS (continued)
Balance 30 September
2018
Changes from financing
cash flows
Advances: bank credit
facilities
Repayment: bank credit
facilities
Net repayment of bank
credit facilities
Advances received
Repayment of borrowings
Lease payments
Repayment of interest
Changes from financing
cash flows
Foreign currency translation
differences
Liability–related changes
Lease agreements entered
into
Interest expense
Revaluation of foreign
denominated loan
Total liability–related
changes
Balance at 30 September
2019
Non–current borrowings
Current borrowings
Total borrowings
Facilities
US$’000
Equipment
loan facility
US$’000
Finance
leases
US$’000
Bank credit
facilities
US$’000
Loan
US$’000
Total
borrowings
US$’000
22 815
7 495
11 804
29 243
6 062
77 419
–
–
–
17 426
(9 294)
–
(2 549)
–
–
–
11 050
(7 831)
–
(602)
–
–
–
–
–
(6 647)
–
151 626
(165 973)
(14 347)
–
–
–
(524)
–
–
–
–
(1 899)
–
(570)
151 626
(165 973)
(14 347)
28 476
(19 024)
(6 647)
(4 245)
5 583
2 617
(6 647)
(14 871)
(2 469)
(15 787)
(1 986)
(764)
(821)
–
(305)
(3 876)
–
2 867
–
759
–
1 492
5 924
1 320
–
2 867
2 251
7 244
29 279
4 279
25 000
29 279
11 599
7 901
3 698
11 599
11 580
5 873
5 707
11 580
–
528
–
528
14 900
–
14 900
14 900
–
570
–
5 924
6 044
1 492
570
13 460
3 858
1 850
2 008
3 858
71 216
19 903
51 313
71 216
2020
US$’000
2019
US$’000
6 035
109
6 144
2 085
299
2 384
19. OTHER FINANCIAL LIABILITIES
Discount facility
Forward exchange contracts
Fair value hierarchy
Level 2
Level 2
Discount facility
Discount facility relates to fair value adjustments on the limited recourse disclosed receivables discounting facility with ABSA and
Nedbank in terms of which 98.0% of the sales of platinum, palladium and gold (included in PGM) and 50% of the sales of
rhodium are discounted at LIBOR plus 326 basis points (2019: LIBOR plus 265 points). The facility is for US$33.0 million
(2019: an amount in US$ equivalent to ZAR300.0 million). The balance is held at fair value through profit or loss.
Forward exchange contracts – fair value through profit or loss
The Group entered into a number of forward exchange contracts to hedge certain aspects of the foreign exchange risk associated
to the conversion of the US$ to the ZAR and the EUR to the ZAR. At 30 September 2020 the net exposure of these contracts was
US$12.8 million (no EUR exposure) (2019: US$12.8 million and EUR1.5 million) with various expiries no later than 15 January 2021
(2019: no later than 15 January 2020). The forward exchange contracts were mark-to-market by using applicable closing exchange
rates at 30 September 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
127
20. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Leave pay accrual
Value added tax payable
Provision for mining royalty
Other payables – related parties (note 23)
Other payables
Trade payables denominated in foreign currency balances were as follows:
ZAR (ZAR’000)
EUR (EUR’000)
GBP (GBP’000)
2020
US$’000
2019
US$’000
23 924
14 163
4 481
1 531
8 571
237
45
52 952
34 381
11 670
3 990
436
230
27
44
50 778
369 844
248
–
495 300
202
8
The amounts above are unsecured, non-interest bearing and payable within one year from the reporting period. The amounts
reflected above approximate fair value, due to the short-term thereof.
21. BUSINESS COMBINATION
Effective 1 October 2019, the Company acquired 100.0% of the issued share capital of MetQ Proprietary Limited (‘MetQ’),
a company incorporated in South Africa. MetQ manufactures equipment used in the mining industry. The total purchase
consideration was US$2.6 million (ZAR40.0 million). Of the total purchase consideration, US$1.8 million (ZAR27.5 million) was
settled in cash on the effective acquisition date while US$0.7 million (ZAR12.5 million) was deferred and subject to MetQ achieving
certain profit targets during the year ended 30 September 2020. The deferred purchase price represents a contingent
consideration.
Following the COVID-19 outbreak and the consequent adverse impact on global markets, the Group amended the purchase
agreement. Previously the contingent consideration was subject to MetQ achieving certain profits targets during the financial year
ended 30 September 2020. The required profit target for the year ended 30 September 2020 was replaced by the aggregate profit
for the six months ended/ending 31 March 2020 and 31 March 2021.Consequently, the deferred consideration will only be
finalised by 31 March 2021.
The Company continually monitors MetQ’s profit targets. At 1 October 2019, the Company believes that it is unlikely that MetQ
will achieve the required profit targets. Therefore, the Company has not recognised the contingent consideration.
In addition, the purchase agreement stipulates that at 30 September 2020, MetQ was required to maintain a certain working
capital balance. In the event that the working capital balance was below the contracted balance, the shortfall would be set-off
against any deferred consideration, if applicable. In the event that the amended profit targets are not met, the balance would
become due and payable.
At 1 October 2019, the required working capital balance was below the contracted balance and accordingly an amount of
US$0.2 million was recognised as a receivable and a reduction in the purchase consideration.
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128 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
21. BUSINESS COMBINATION
The following table summarises the fair value of the Company’s assets and liabilities at the acquisition date:
Assets
Property, plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Liabilities
Borrowings
Deferred tax
Trade and other payables
Total identifiable net assets at fair value
Less cash and cash equivalents acquired
Less amounts receivable from the Group
Goodwill arising on acquisition
Purchase consideration
Below a summary of MetQ’s statement of profit or loss included in the condensed consolidated financial
statements:
Revenue
Cost of sales
Gross profit
Net profit after tax
Fair value
recognised on
acquisition
US$’000
1 053
572
380
118
2 123
(666)
(54)
(232)
(952)
1 171
(118)
(47)
480
1 486
2 961
(2 349)
612
44
The purchase consideration was funded from existing cash resources of the Group. The transaction cost was US$0.1 million.
The goodwill recognised is attributed to existing relationships with customers, industry knowledge and technical expertise relating
to the manufacture of the mining equipment. The goodwill is not tax deductible.
22. FINANCIAL RISK MANAGEMENT
Fair values
The Board of Directors considers that the fair values of significant financial assets and financial liabilities approximate to their
carrying values at each reporting date.
Financial instruments carried at fair value:
The following table presents the carrying values of financial instruments measured at fair value at the end of each reporting period
across the three levels of the fair value hierarchy defined in IFRS 13 Fair Value Measurement, with the fair value of each financial
instrument categorised in its entirety based on the lowest level of input that is significant to that fair value measurement.
The levels are defined as follows:
Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments (highest level).
Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation
methodologies in which all significant inputs are directly or indirectly based on observable market data.
Level 3: fair values measured using valuation methodologies in which any significant inputs are not based on observable market
data.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
129
22. FINANCIAL RISK MANAGEMENT (continued)
Financial instrument
Financial assets measured at fair value
Investments in equity instruments
Investments in money markets, current accounts, cash
funds and income funds
Option to acquire shares in Salene Chrome Zimbabwe
(Private) Limited
Fair value
Fair value
level
2020
US$’000
2019
US$’000
Valuation technique
and key inputs
Level 1
Level 2
Level 3
8
6 791
178
23 Quoted market price
for the same instrument
6 080 Quoted market price
for the same instrument
Discounted cash flow model
–
Closing market metal prices
US$ exchange rate
Trade and other receivables measured at fair value
PGM receivable
Level 2
37 059
33 686 Quoted market metal prices
and exchange rate (refer
below)
Financial liabilities measured at fair value
Discount facility
Forward exchange contracts
Level 2
Level 2
6 035
109
2 085 Quoted market metal prices
and exchange rate
299 Quoted market
closing exchange rates
There have been no transfers between fair value hierarchy levels in the current year.
Refer to note 5 for the fair value recognised relating to the PGM receivable. Fair value gains and losses recognised on financial
instruments during the year:
2020
US$’000
2019
US$’000
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Changes in fair value of financial assets at fair value through profit or loss
Investments in equity instruments
Investments in money markets, current accounts, cash funds and income funds
Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited
Changes in fair value of financial liabilities at fair value through profit or loss
Discount facility
Forward exchange contracts
(15)
313
178
476
(5 940)
167
(5 773)
(16)
328
-
312
(3 234)
(1 109)
(4 343)
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Fair values Level 3: Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited
As at 30 September 2020, US$2.0 million (2019: US$1.4 million) relates to exploration costs invested in the initial exploration
programme. Taking this into account, as at 30 September 2020 the fair value of the option to acquire the shares, estimated using
a discounted cash flow model, amounts to US$0.2 million (2019: US$ nil) for which a fair value gain of US$0.2 million was recognised
in prior or loss in the year ended 30 September 2020. Significant inputs used to determine the fair value of the option are stated
below. A sensitivity analysis of the value of the project was performed by changing the significant inputs to the following:
Significant input
Assumption used Sensitivity
Impact on the project value
Life of open pit mine
Four years
3.5 years to 4.5 years
Annual chrome concentrate
production
Discount rate
60 kt
11.8%
50 kt to 70 kt
10.8% to 12.8%
Chrome lumpy ore FCA
selling price
US$70 per tonne
US$60 per tonne to US$80
per tonne
A decrease of US$272 thousand and an
increase of US$256 thousand
A decrease of US$1 000 thousand and an
increase of US$903 thousand
An increase of US$67 thousand and a
decrease of US$65 thousand
A decrease of US$1 609 thousand and an
increase of US$1 609 thousand
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130 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
22. FINANCIAL RISK MANAGEMENT (continued)
Estimation of fair values
The following key inputs were used in determining the fair value of the PGM receivable:
Platinum
Palladium
Rhodium
Gold
Ruthenium
Iridium
Metallurgical chrome concentrate +
Exchange rate
US$/oz
US$/oz
US$/oz
US$/oz
US$/oz
US$/oz
US$/tonne
2020
909
2 296
12 788
1 923
230
1 613
135
16.71
2019
944
1 601
4 588
1 511
209
1 440
149
14.85
The carrying value less impairment allowance of trade receivables and the carrying value of trade payables are assumed to
approximate their fair values as the short-term effect of discounting is not material. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is
available to the Company for similar financial instruments.
23. RELATED PARTY TRANSACTIONS AND BALANCES
In the normal course of the business, the Group enters into various transactions with related parties. Related party transactions
exist between shareholders, joint ventures, directors, directors of subsidiaries and key management personnel. Outstanding
balances at the year-end are unsecured and settlement occurs in cash. All intergroup transactions have been eliminated on
consolidation.
Loans receivable
Karo Mining Holdings Limited
Alta Steenkamp
Trade and other receivables (note 14)
Thys and Alta Steenkamp
The Tharisa Community Trust
Rocasize Proprietary Limited
Karo Mining Holdings Limited
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Salene Chrome Zimbabwe (Private) Limited
Salene Mining Proprietary Limited
2020
US$’000
2019
US$’000
8 131
7
5 995
–
169
4
27
348
255
223
135
265
14
1 440
–
4
13
–
26
18
2
264
15
342
THARISA PLC INTEGRATED ANNUAL REPORT 2020
131
23. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
2020
US$’000
2019
US$’000
Trade and other payables (note 20)
Karo Mining Holdings Limited
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited
Rocasize Proprietary Limited
Amounts due to directors
A Djakouris
J Salter
O Kamal
C Bell
R Davey
Z Hong
V Chu
J Hu
Total other payables
Property loans
Ross Two-10-Properties Proprietary Limited
Rohcon Engineering Proprietary Limited
PCMQ Proprietary Limited
Thys & Alta Properties Proprietary Limited
Revenue
Salene Manganese Proprietary Limited
Salene Technologies Proprietary Limited
Cost of sales
Rocasize Proprietary Limited
Salene Chrome (Private) Limited
Other income
Karo Zimbabwe Holdings (Private) Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Rocasize Proprietary Limited
Salene Chrome Proprietary Limited
Consulting fees received
Rocasize Proprietary Limited
Salene Chrome Proprietary Limited
Karo Platinum (Private) Limited
Karo Power Generation (Private) Limited
Karo Zimbabwe Holdings (Private) Limited
94
6
28
1
129
20
22
12
18
15
9
2
10
108
237
138
174
180
107
599
80
2
331
38
3
2
–
9
–
12
88
224
133
181
5
–
21
1
27
–
–
–
–
–
–
–
–
–
27
–
–
–
–
–
–
–
–
393
–
42
37
3
9
2
15
43
189
59
213
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132 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
23. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
Rent paid
Ross Two-10-Properties Proprietary Limited
Rohcon Engineering Proprietary Limited
PCMQ Proprietary Limited
Thys & Alta Properties Proprietary Limited
Donations paid
The Music for the Children Foundation
Interest receivable
Karo Mining Holdings Limited
Interest paid
Ross Two-10-Properties Proprietary Limited
Rohcon Engineering Proprietary Limited
Compensation to Directors and key management:
2020
Non-executive directors
Executive directors
Other key management
2019
Non-executive directors
Executive directors
Other key management
Salary and
fees
US$’000
Expense
allowances
US$’000
Share-based
payments
US$’000
Provident
fund and risk
benefits
US$’000
626
1 637
1 098
3 361
–
7
24
31
–
387
279
666
Salary and
fees
US$’000
Expense
allowances
US$’000
Share-based
payments
US$’000
629
1 590
1 196
3 415
–
8
29
37
–
1 178
907
2 085
–
73
113
186
Provident
fund and risk
benefits
US$’000
–
76
129
205
2020
US$’000
2019
US$’000
4
4
34
16
25
270
11
14
–
–
–
–
12
–
–
–
Bonus
US$’000
Total
US$’000
–
59
60
119
626
2 163
1 574
4 363
Bonus
US$’000
Total
US$’000
–
219
190
409
629
3 071
2 451
6 151
Awards to the key management in the period under review are as follows:
2020 Ordinary shares
LTIP – executive directors
LTIP – key management
2019 Ordinary shares
Opening
balance
1 626 960
1 246 246
Inclusion of
additional
employee
Allocated
Vested
Forfeited
Total
–
–
1 559 892
967 470
(456 262)
(362 384)
(350 788)
(275 174)
2 379 802
1 576 158
LTIP – executive directors
LTIP – key management
1 605 423
1 099 439
–
286 656
881 262
587 838
(743 524)
(619 289)
(116 201)
(108 398)
1 626 960
1 246 246
THARISA PLC INTEGRATED ANNUAL REPORT 2020
133
23. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
2020 Ordinary shares
SARS – executive directors
SARS – key management
2019 Ordinary shares
Opening
balance
1 229 864
913 032
Inclusion of
additional
employee
Allocated
Vested
Forfeited
Total
–
–
–
–
(263 053)
(206 350)
(526 180)
(412 763)
440 631
293 919
SARS – executive directors
SARS – key management
1 118 547
765 744
–
221 868
881 262
587 838
(595 643)
(499 821)
(174 302)
(162 597)
1 229 864
913 032
Option to acquire shares in Salene Manganese Proprietary Limited
On 9 July 2019, the Company was granted a call option to acquire a 70.0% shareholding in Salene Manganese Proprietary Limited,
a company incorporated in South Africa. The purchase consideration to acquire 70.0% of the shareholding will be equal to 70.0%
of the market value of Salene Manganese Proprietary Limited. Salene Manganese Proprietary Limited’s principal activity is a
manganese exploration and mining company. Salene Manganese Proprietary Limited purchased a mining right issued over the
farm Macarthy 559, Kuruman district in South Africa. The mining right is for the mining of iron ore and manganese ore.
At 30 September 2020 the call option had not yet been exercised. The call option is exercisable on or before 14 August 2021.
Management assessed the terms and conditions of this call option and considered whether the potential voting rights in Salene
Manganese Proprietary Limited from the future exercise of the option are substantive, as defined in IFRS 10. This assessment took
into account, among others, a number of conditions precedent, including the JSE Listings Requirements pertaining to related party
transactions, as well as other regulatory approvals that preclude the Company from exercising its right. Based on this evaluation,
management concluded that it did not have the practical ability to exercise the right as at 30 September 2020.
Relationships between parties:
The Tharisa Community Trust and Rocasize Proprietary Limited
The Tharisa Community Trust is a shareholder of Tharisa Minerals Proprietary Limited and owns 100% of the issued ordinary share
capital of Rocasize Proprietary Limited.
The Music for the Children Foundation
A director of the Company is a Trustee of this non-profit organisation.
Salene Technologies Proprietary Limited, Salene Manganese Proprietary Limited and Salene Mining Proprietary Limited
A director of the Company is also a director of these companies.
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Thys and Alta Steenkamp
Former shareholders of MetQ Proprietary Limited.
Ross Two-10-Properties Proprietary Limited, Rohcon Engineering Proprietary Limited, PCMQ Proprietary Limited and
Thys & Alta Properties Proprietary Limited
A director of MetQ Proprietary Limited is also a director of these companies.
The Leto Settlement
The beneficial shareholder of Medway Developments Limited, a material shareholder in the Company.
Salene Chrome Zimbabwe (Private) Limited
This company is a wholly owned subsidiary of the Leto Settlement, the beneficial shareholder of Medway Developments Limited,
a material shareholder in the Company.
Karo Mining Holdings Limited, Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and Karo
Power Generation (Private) Limited
The Company owns 26.8% of the issued share capital of Karo Mining Holdings Limited. Karo Mining Holdings Limited owns 100%
of the issued share capital of Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and Karo Power Generation
(Private) Limited.
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134 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE ANNUAL
FINANCIAL STATEMENTS CONTINUED
24. CONTINGENT LIABILITIES
At 30 September 2020, the Group had certain unresolved tax matters. Included in trade and other receivables is an amount of
US$5.5 million (ZAR91.2) million which relates to diesel rebates receivable from the South African Revenue Service (‘SARS’) in
respect of the mining operations. The amount of US$0.5 million (ZAR8.8 million) of this receivable relates to the amount that is
undisputed in the current year. SARS rejected diesel claims of US$4.3 million (ZAR71.1 million) for the period September 2011 to
April 2017 and also rejected the claim of US$1.8 million(ZAR30.0 million) relating to May 2017 to February 2018. An accounting
receivable of ZAR82.3 million has been raised in relation to the total amount of ZAR101.0 million in dispute. The Group is taking
the necessary action to recover the amount due.
The Group has objected to an assessment issued by SARS imposing an additional mining royalty in relation to the 2015 and
2017 years of assessment in an amount of US$6.1 million (ZAR102.3 million) (inclusive of penalties and interest). SARS increased
the gross sales value of the PGM sales to the minimum specified condition (of 150 parts per million) as set out in the legislation by
adjusting the average PGM grade on a linear basis. SARS did not take into account the increase in the associated costs to bring the
concentrate to the minimum specified condition whether on a linear basis or otherwise. This is inconsistent with both past practice
by SARS and industry applied norms. The Group objected against the assessment on the basis that it is not in terms of the
applicable legislation and is of the view that the prospects of successfully objecting to the assessment is high. The Group, together
with its legal adviser, has re-assessed the basis on which it is liable for payment of the mining royalty challenging both the linear
basis of grossing up the sales value and determining the incremental costs which would be incurred in bringing the concentrate to
the minimum specified standard.
In the event that SARS would be successful, the Group estimates the incremental mining royalty for the period up to the current
year of assessment to be US$7.4 million (ZAR124.2 million) (net of tax: US$5.4 million (ZAR89.4 million)).
If the Group is successful with a favourable outcome of calculating the mining royalty on the re-assessed basis, it would result in a
refund of past royalty payments with a net inflow to the Group.
The principles being applied have not been tested by either SARS or the judiciary and there is therefore uncertainty on the possible
outcome of the objection, which could lead to an outflow (royalty payable to SARS) or inflow (amount recovered by the Group
from SARS). Furthermore, the time period to reach finality may be protracted. Accordingly, no estimate of the contingent amount
receivable has therefore been made.
As at 30 September 2020, there is no litigation (2019: no litigation), current or pending, which is considered likely to have a
material adverse effect on the Group.
25. CAPITAL COMMITMENTS AND GUARANTEES
Capital commitments
Authorised and contracted
Authorised and not contracted
2020
US$’000
2019
US$’000
20 015
10 682
30 697
17 062
805
17 867
The above commitments are with respect to property, plant and equipment and are outstanding at the respective reporting period.
All contracted amounts will be funded through existing funding mechanisms within the Group and cash generated from
operations. Balances denominated in currencies other than the US$ were converted at the closing rates of exchange ruling at
30 September 2020.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
135
26. EVENTS AFTER THE REPORTING PERIOD
On 27 November 2020, the Board proposed a final dividend of US$ 3.50 cents per share, subject to the necessary shareholder
approval at the annual general meeting.
The Board of Directors is not aware of any matter or circumstance arising since the end of the financial year that will impact these
financial results.
27. DIVIDENDS
During the year ended 30 September 2020, the Company declared and paid a final dividend of US$ 0.25 cents per share in respect
of the year ended 30 September 2019.
During the year ended 30 September 2019, the Company declared and paid a final dividend of US$ 2 cents per share in respect of
the year ended 30 September 2018. In addition, an interim dividend of US$ 0.5 cents per share was declared and paid in respect of
the financial year ended 30 September 2019.
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136 THARISA PLC INTEGRATED ANNUAL REPORT 2020
INVESTOR RELATIONS REPORT
SHARE INFORMATION
Tharisa plc is listed on the Johannesburg Stock Exchange and the London Stock Exchange
Company
JSE share code
LSE share code
A2X share code
ISIN
LEI
Sector
Issued share capital as at 30 September 2019
Issued share capital (excluding treasury shares) as at 30 September 2020
Market capitalisation as at 30 September 2020
Closing share price as at 30 September 2020
12-month high
12-month low
SHAREHOLDER ANALYSIS
Analysis of shareholders as at 30 September 2020
Tharisa plc
THA
THS
THA
CY0103562118
213800WW4YWMVVZIJM90
General mining
275 000 000
268 476 314
JSE
LSE
ZAR3.98 billion
ZAR14.81
ZAR21.30
ZAR10.37
GBP200.01 million
74.50p
116.00p
39.50p
Analysis of ordinary shareholders
Holding 1 to 10 000 shares
Holding 10 001 to 100 000 shares
Holding 100 001 to 1 000 000 shares
Holding 1 000 001 to 5 000 000 shares
Holding 5 000 001 to 100 000 000 shares
Holding > 100 000 000 shares
Treasury shares
Total
Major shareholders
Shareholders holding 10% or more
Medway Developments Limited
Rance Holdings Limited
Shareholders holding 5% or more
FIL Limited
Fujian Wuhang Stainless Steel Co. Limited
Number of
shareholders
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
957
88
42
6
9
1
–
854 417
3 003 151
12 859 501
10 650 038
131 482 201
109 627 006
6 523 686
0.31
1.09
4.68
3.87
47.81
39.87
2.37
0.32
1.12
4.79
3.97
48.97
40.83
–
1 103
275 000 000
100.00
100.00
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
109 627 006
40 548 241
26 508 352
19 419 920
39.87
14.74
9.64
7.06
40.83
15.10
9.87
7.23
Public and non-public shareholders
Public
Non-public
Directors and associates of the Company and its subsidiaries
Persons interested (other than directors), directly or indirectly,
in 10% or more
Total
Number of
shareholders
Number
of shares
Percentage
of issued
share capital
Percentage
of voting
rights
1 086
108 258 651
39.37
40.32
15
10 042 416
3.65
3.74
2
150 175 247
1 103
268 476 314
54.61
97.63
55.94
100.00
INVESTOR RELATIONS REPORT CONTINUED
THARISA PLC INTEGRATED ANNUAL REPORT 2020
137
Disclosure of directors’ interests in the Company’s share capital
The aggregate direct and indirect interests of the directors in the issued share capital of the Company are as follows:
2020
2019
Beneficial
Direct
Indirect
Non-beneficial
Direct
Indirect
Beneficial
Direct
Indirect
Non-beneficial
Direct
Indirect
Director
Loucas Pouroulis
Phoevos Pouroulis
Michael Jones
David Salter
Antonios Djakouris
Omar Kamal
Carol Bell
Roger Davey
Joanna Cheng°
Zhong Liang Hong
Julia Zhengzhi Hu^
Vaneese Wing Ye Chu#
803 419
707 245
554 823
–
43 250
–
61 250
–
–
–
–
–
6 928 432
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
630 711
546 384
474 172
–
43 250
–
31 250
–
–
–
–
–
–
6 918 432
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
2 169 987
6 928 432
1 725 767
6 918 432
° Resigned on 29 January 2020
^ Appointed on 29 January 2020 and resigned on 17 September 2020
# Appointed 17 September 2020
–
–
–
–
–
–
–
–
–
–
–
–
–
10 000
–
–
–
–
–
–
–
–
–
–
–
10 000
There have been no changes in directors’ interests in the share capital between 30 September 2020 and the date of issue of this
Integrated Annual Report.
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138 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTICE OF VIRTUAL ANNUAL
GENERAL MEETING
THARISA PLC
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number: HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
(‘Tharisa’ or the ‘Company’)
Notice is hereby given that the annual general meeting (‘AGM’) of shareholders of Tharisa will be held via remote electronic platform
Microsoft Teams on Wednesday, 10 February 2021 at 10:00 SA time (UTC +2) to consider and, if deemed fit, pass, with or without
modification, the ordinary and special resolutions as set out in this notice of AGM and to deal with such other business as may be dealt
with at the AGM. Tharisa will be assisted by Computershare Investor Services Proprietary Limited, who will also act as scrutineers.
This notice of AGM, the Integrated Annual Report containing the condensed, consolidated financial statements and the audited annual
financial statements together with all relevant reports, are available on the Company’s website www.tharisa.com and available for
inspection at the registered office of the Company.
Under the Companies Law, a member has the right to request an item to be included in the agenda for an AGM, as well as to request
that a specific resolution be tabled and resolved upon, provided that such request is accompanied by an adequate explanation and
justification for its inclusion which the Company deems to be reasonable and within the best interests of the Company and its
stakeholders as a whole and provided further that such member, or members acting collectively, hold in aggregate 5% of the ordinary
share capital of the Company. Requests of this nature are to be received by the Company in writing or electronically, at least 42 days
before the scheduled date of the AGM.
IDENTIFICATION
Shareholders are advised that any person attending or participating in an AGM of shareholders must present reasonably satisfactory
identification before being entitled to participate in and vote at the AGM and the person presiding at the AGM must be reasonably
satisfied that the right of any person to participate in and vote (whether as shareholder or proxy for a shareholder) has been reasonably
verified.
IMPORTANT DATES
Record date to receive notice of the AGM
Last day to trade to be eligible to vote
Record date to be eligible to vote at the AGM
Last day for lodging forms of instruction (by 08:00 UK time)
Last day for lodging forms of proxy (by 10:00 SA time)
Annual general meeting (10:00 SA time (UTC +2))
Friday, 11 December 2020
Tuesday, 2 February 2021
Friday, 5 February 2021
Friday, 5 February 2021
Monday, 8 February 2021
Wednesday, 10 February 2021
Accordingly, the date on which a person must be registered as a shareholder in the register of the Company to be entitled to attend and
vote at the AGM will be Friday, 5 February 2021.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
139
RESOLUTIONS FOR CONSIDERATION AND ADOPTION
Ordinary business
1. ORDINARY RESOLUTION NUMBER 1
Adoption of the annual financial statements
To receive the audited annual financial statements for the year ended 30 September 2020, including the management report and
the report of the independent auditor, such annual financial statements having been approved by the Board on
27 November 2020.
Additional information in respect of ordinary resolution number 1
The condensed consolidated financial statements for the year ended 30 September 2020 are included in the Integrated Annual
Report of which this notice of AGM forms part. The complete audited annual financial statements, together with the relevant
reports for the year ended 30 September 2020, are available on the Company’s website, www.tharisa.com. Copies of the audited
financial statements, management report and report of the auditor are also available for collection at the registered office of the
Company, and available for dispatch at the request of shareholders, free of charge and either in printed copy or in electronic
(email) format, by contacting the Company Secretary at secretarial@tharisa.com.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 1.
2. ORDINARY RESOLUTION NUMBER 2
Reappointment of external auditor
“RESOLVED THAT Ernst & Young Cyprus Limited, with Stavros Pantzaris being the designated registered auditor, be reappointed as
the independent external auditor of the Company and of the Group for the financial year ending 30 September 2021, to hold
office until conclusion of the next AGM of the Company, and that the remuneration for the financial year ending 30 September
2021 be determined by the Audit Committee.”
Additional information in respect of ordinary resolution number 2
In accordance with clause 195 of the Company’s Articles of Association and sections 153 to 155 of the Companies Law,
Ernst & Young Cyprus Limited is proposed to be reappointed as the external auditor of the Company, until the conclusion of
the next AGM. The Audit Committee conducted an assessment of the performance and the independence of the external
auditor and compliance with the JSE Listings Requirements and recommends the reappointment as independent auditor of
the Company and the Group.
The percentage of voting rights required for ordinary resolution number 2 to be adopted is more than 50% in favour, of the voting
rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
3. ORDINARY RESOLUTION NUMBER 3 (COMPRISING ORDINARY RESOLUTIONS NUMBERS 3.1 AND 3.2)
Re-election of directors retiring by rotation
3.1 “RESOLVED THAT Roger Davey, who retires in accordance with the Company’s Articles of Association and who, being eligible,
offers himself for re-election, be re-elected as a director of the Company.”
3.2 “RESOLVED THAT Zhong Liang Hong, who retires in accordance with the Company’s Articles of Association and who, being
eligible, offers himself for re-election, be re-elected as a director of the Company.”
Election of director appointed by the Board
3.3 “RESOLVED THAT Vaneese Wing Ye Chu, who retires in accordance with the Company’s Articles of Association and who,
being eligible, offers himself for election, be elected as a director of the Company.”
Additional information in respect of ordinary resolutions numbers 3.1, 3.2 and 3.3
In terms of clause 110 of the Company’s Articles of Association, one-third of the non-executive directors of the Company for the
time being are required to retire from office at each AGM. The directors of the Company to retire in every year shall be those who
have been longest serving since their last election. A retiring director shall be eligible for re-election. Roger Davey and Zhong Liang
Hong are retiring by rotation.
In terms of clause 156 of the Company’s Articles of Association, the Board has the power to appoint any person as an additional
director to the Board, provided that a director so appointed shall hold office only until the next AGM of the Company and shall
then be eligible for election. Vaneese Wing Ye Chu was appointed by the Board on 17 September 2020, and is accordingly
required to retire. Being eligible, she is offering herself for election.
A brief curriculum vitae in respect of the directors referred to in ordinary resolutions numbers 3.1, 3.2 and 3.3 above appears on
pages 56 and 57 of the Integrated Annual Report of which this notice of AGM forms part and the Board recommends to
shareholders the re-election of the retiring directors as set out in ordinary resolutions numbers 3.1, 3.2 and 3.3.
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140 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTICE OF VIRTUAL ANNUAL
GENERAL MEETING CONTINUED
The percentage of voting rights required for ordinary resolutions numbers 3.1, 3.2 and 3.3 to be adopted is more than 50% in
favour of the voting rights exercised on such resolution by all shareholders present or represented by proxy and entitled to vote at
the AGM.
SPECIAL BUSINESS
4. ORDINARY RESOLUTION NUMBER 4
General authority to directors to allot and issue ordinary shares
“RESOLVED THAT the authorised but unissued shares in the capital of the Company, limited to 27 500 000 (twenty seven million
five hundred thousand) ordinary shares, being 10% of the number of listed equity securities in issue at the date of this notice,
being 275 000 000 (two hundred and seventy-five million) ordinary shares (for which purposes any shares approved to be allotted
and issued by the Company in terms of the Share Award Plan for the benefit of employees shall be excluded), be and are hereby
placed under the control and authority of the directors and that they be and are hereby authorised to allot, issue and grant
options over and otherwise dispose of such shares to such persons on such terms and conditions and at such times as they may
from time to time and at their discretion deem fit. This is subject to the provisions of the Companies Law, as may be amended
from time to time, the Company’s Articles of Association, the JSE Listings Requirements and the LSE Listing Rules and Disclosure
and Transparency Rules which may apply to the Company. Such authority shall be valid until the conclusion of the next AGM of
the Company.”
Additional information in respect of ordinary resolution number 4
The Board may only allot and issue shares or grant rights over shares if authorised to do so by the shareholders. This resolution
seeks authority for the Board to allot, issue and deal in shares up to a maximum of 10% of the Company’s issued share capital.
The percentage of votes required for ordinary resolution number 4 to be adopted is more than 50% in favour of the voting rights
exercised on such resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
5. ORDINARY RESOLUTION NUMBER 5
Dis-application of pre-emption rights
“RESOLVED THAT, subject to the JSE Listings Requirements, the Board be and is hereby authorised to dis-apply the pre-emption
rights, with respect to the authority conferred on the Board to issue and allot ordinary shares, up to a maximum of 10% of the
Company’s issued share capital. This authority will expire at the conclusion of the Company’s next AGM.”
Additional information in respect of ordinary resolution number 5
In terms of section 60B of the Companies Law, if the Board wishes to allot any unissued shares, grant rights over shares or sell
treasury shares for cash (other than pursuant to an employee share scheme) it must first offer them to existing shareholders in
proportion to their holdings. There may be circumstances, however, where the Board requires the flexibility to finance business
opportunities through the issue or sale of shares or related securities without a pre-emptive offer to existing shareholders. This can
only be done under the Companies Law if the shareholders have first waived their pre-emption rights. This resolution seeks
authority for the Board to dis-apply pre-emption rights for shares up to a maximum of 10% of the Company’s issued share capital.
If granted, this authority will expire at the conclusion of the Company’s next AGM.
The percentage of votes required for ordinary resolution number 5 to be adopted is more than 50%, in favour, of the voting rights
exercised on such resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
6. ORDINARY RESOLUTION NUMBER 6
ii.
General authority to issue shares for cash
“RESOLVED THAT, subject to ordinary resolutions numbers 4 and 5 being passed, the Board be authorised, by way of a general
authority, to allot and issue shares (and/or any options or convertible securities) for cash to such persons on such terms and
conditions as the Board may from time to time in its discretion deem fit, subject to the provisions of the Company’s Articles of
Association, the Companies Law, as may be amended from time to time, the JSE Listings Requirements and the LSE Listing Rules
and Disclosure and Transparency Rules which may apply to the Company, and subject to the following limitations, namely that:
The equity securities which are the subject of the issue for cash must be of a class already in issue, or where this is not the
i.
case, must be limited to such securities or rights that are convertible into a class already in issue.
Any such issue will only be made to “public shareholders” as defined in the JSE Listings Requirements and not to related
parties, unless the JSE otherwise agrees.
In respect of securities which are the subject of the general issue of shares for cash, such issue may not exceed 27 500 000
(twenty seven million five hundred thousand) ordinary shares, representing 10% of the number of listed equity securities in
issue as at the date of this notice, being 275 000 000 (two hundred and seventy-five million) ordinary shares, provided that:
any equity securities issued under this authority during the period must be deducted from the number above in the event of a
subdivision or consolidation of issued equity securities during the period contemplated above, the existing authority must be
adjusted accordingly to represent the same allocation ratio the calculation of the listed equity securities is a factual assessment
of the listed equity securities as at the date of the notice of AGM, excluding treasury shares
iii.
.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
141
iv. This authority shall be valid until the Company’s next AGM.
v.
vi.
A SENS announcement giving full details of the issue will be published at the time of any issue representing, on a cumulative
basis within the period of this authority, 5% or more of the number of ordinary shares in issue prior to the issue concerned.
The maximum discount permitted at which equity securities may be issued is 10% of the weighted average traded price on
the JSE of those shares measured over the 30 business days prior to the date that the price of the issue is agreed between the
Company and the party subscribing for the securities. The JSE should be consulted for a ruling if the Company’s securities
have not traded in such 30 business day period.”
Additional information in respect of ordinary resolution number 6
In accordance with the Company’s Articles of Association, and the JSE Listings Requirements, the shareholders of the Company
have to approve a general issue of shares for cash. This authority will be subject to the Company’s Articles of Association, the
Companies Law and the JSE Listings Requirements. The Board considers it advantageous to renew this authority to enable the
Company to take advantage of any business opportunity that may arise in the future.
Any issue of shares for cash will be subject to approval by 90% of the Board members.
This ordinary resolution number 6 is required, under the JSE Listings Requirements, to be passed by achieving a 75% majority of
the voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
7. ORDINARY RESOLUTION NUMBER 7 (COMPRISING ORDINARY RESOLUTIONS NUMBERS 7.1 AND 7.2)
7.1
Approval of remuneration policy
“RESOLVED THAT the Group remuneration policy, as described in the remuneration report on page 78 of the Integrated Annual
Report of which this notice of AGM forms part, be approved by way of a non-binding advisory vote, as recommended in King IV.”
Additional information in respect of ordinary resolution number 7.1
In terms of King IV recommendations and the JSE Listings Requirements, the Company’s remuneration policy should be tabled for
a non-binding advisory vote at every AGM.
The purpose of the non-binding advisory vote is to enable shareholders of the Company to express their views on the Group’s
remuneration policies. Accordingly, the shareholders of the Company are requested to endorse the Company’s remuneration policy
as recommended by King IV.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 7.1.
7.2 Approval of remuneration implementation report
“RESOLVED THAT the Group remuneration implementation report, as described in the remuneration report on page 78 of the
Integrated Annual Report of which this notice of AGM forms part, be approved by way of a non-binding advisory vote.”
Additional information in respect of ordinary resolution number 7.2
In terms of King IV recommendations and the JSE Listings Requirements, the Company’s remuneration implementation report
should be tabled for a non-binding advisory vote at every AGM.
The purpose of the non-binding advisory vote is to enable shareholders of the Company to express their views on the Group’s
implementation of the remuneration policy. Accordingly, the shareholders of the Company are requested to endorse the
Company’s remuneration implementation report.
This resolution is non-binding, therefore no minimum voting threshold is required for ordinary resolution number 7.2.
8.
ORDINARY RESOLUTION NUMBER 8 – APPROVAL AND ADOPTION OF THE THARISA LONG-TERM INCENTIVE
PLAN 2021 (THE ‘LTIP’)
“RESOLVED THAT, subject to such amendments as may be required by the applicable regulators, the rules embodied in the LTIP,
which LTIP has been tabled at this AGM and initialled by the chairperson of the AGM for purposes of identification, be and are
hereby approved and adopted.”
Additional information in respect of ordinary resolution 8
The LTIP will be available for inspection on the Company’s website at www.tharisa.com up to and including the date of the AGM.
The salient features of the LTIP are set out in the remuneration report on pages 82 and 83. The LTIP has been reviewed and
approved by the JSE, the Remuneration Committee, and the Board, excluding the executive directors, being Loucas Pouroulis,
Phoevos Pouroulis and Michael Jones, who have a personal financial interest in respect of the approval and adoption of the LTIP.
The Board is of the opinion that the adoption of such LTIP will be beneficial to Tharisa and its shareholders and accordingly
recommends that shareholders vote in favour of this ordinary resolution number 8.
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142 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTICE OF VIRTUAL ANNUAL
GENERAL MEETING CONTINUED
The abovementioned executive directors, participants in the LTIP and the existing Tharisa Share Award Plan, which will be replaced
by the LTIP, once approved and adopted, are precluded from exercising any voting rights attached to the shares held by them.
This ordinary resolution number 8 is required, under the JSE Listings Requirements, to be passed by achieving a 75% majority of
the voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
9.
SPECIAL RESOLUTION NUMBER 1
General authority to repurchase shares
“RESOLVED THAT the Company, and any of its subsidiaries, be authorised, by way of a general authority, in terms of the provisions
of the JSE Listings Requirements, the Companies Law and as permitted by the Company’s Articles of Association, to acquire, as a
general repurchase, the issued ordinary shares of the Company, upon such terms and conditions and in such manner as the Board
may from time to time determine, but subject to the applicable requirements of the Company’s Articles of Association, the
provisions of the Companies Law, the JSE Listings Requirements and the LSE Listing Rules and Disclosure and Transparency Rules,
where applicable, and provided that:
i.
The maximum number of ordinary shares to be acquired shall not exceed 10% of the Company’s ordinary shares in issue at
the date on which this special resolution number 1 is passed.
The repurchase of shares will be effected through the order books operated by the JSE and LSE trading system and done
without any prior understanding or arrangement between the Company and the counterparty (reported trades are
prohibited).
ii.
v.
iii. The Company has been given authority to repurchase its shares by its Articles of Association.
iv.
This general authority shall only be valid until the Company’s next AGM, provided that it shall not extend beyond 12 months
from the date of passing of this special resolution number 1.
In determining the price at which the Company’s ordinary shares are acquired by the Company in terms of this general
authority, the maximum premium and/or discount at which such ordinary shares may be acquired shall not exceed the lesser
of:
•
5% of the weighted average of the market price at which such ordinary shares are traded on the JSE, as determined over
the five business days immediately preceding the date of the repurchase of such ordinary shares by the Company
the price quoted for the last independent trade of, or the highest current independent bid for any number of shares on
the JSE where the purchase is carried out.
•
vi. At any point in time, the Company may only appoint one agent to effect any repurchases on the Company’s behalf.
vii.
A resolution has been passed by the Board confirming that the Board has authorised the repurchase and that the Company
satisfied the net assets test contemplated under section 169A of the Companies Law.
viii. The Company may not repurchase ordinary shares during a prohibited period, as defined in the JSE Listings Requirements or
ix.
x.
any applicable EU Market Abuse Regulations, unless the Company has a repurchase programme in place where the dates and
quantities of the ordinary shares to be traded during the relevant period are fixed and not subject to any variation and full
details of the programme have been disclosed to the JSE in writing prior to the commencement of the prohibited period.
A SENS announcement will be published giving such details as may be required in terms of the JSE Listings Requirements as
soon as the Company has cumulatively repurchased 3% of the number of shares in issue at the date of the passing of this
special resolution number 1 and for each 3% in aggregate of the initial number of shares acquired thereafter, and in the
media when required in terms of the Companies Law.
The Board undertakes that it will not implement the proposed authority to repurchase shares, unless the directors are of the
opinion that, for a period of 12 months after the date of the repurchase:
•
•
the Company and the Group will be able, in the ordinary course of business, to pay its debts
the assets of the Company and the Group, fairly valued in accordance with IFRS, will be in excess of the liabilities of the
Company and the Group
the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes and
the working capital of the Company and the Group will be adequate for ordinary business purposes.”
•
•
Additional information in respect of special resolution number 1
Under section 57A of the Companies Law, the Board must obtain authorisation by special resolution from the shareholders before
they can effect the purchase by the Company of any of its own shares. In certain circumstances it may be advantageous for the
Company to purchase its own shares and this resolution seeks authority to do so. The Board will exercise this power only in
accordance with the requirements of the Companies Law and the JSE Listings Requirements, and when, in view of market
conditions prevailing at the time, it believes that the effect of such purchases will be to increase earnings per share and is in the
best interests of the shareholders generally. Save to the extent purchased pursuant to the Companies Law, any shares purchased in
this way will be cancelled and the number of shares in issue will be reduced accordingly.
The Company may hold in treasury any of its own shares that it purchases pursuant to the Companies Law and the authority
conferred by this resolution. Repurchased shares may be held in treasury for a period not exceeding a maximum of two calendar
THARISA PLC INTEGRATED ANNUAL REPORT 2020
143
years from the repurchase date. This gives the Company the ability to reissue treasury shares quickly and cost-effectively and
provides the Company with greater flexibility in the management of its capital base. It also gives the Company the opportunity to
satisfy awards under the Share Award Plan using treasury shares. Once held in treasury, the Company is not entitled to exercise
any rights, including the right to attend and vote at meetings, in respect of the shares and no dividend or other distribution of the
Company’s assets may be made to the Company in respect of treasury shares.
In accordance with the Companies Law, this resolution specifies the maximum number of shares that may be acquired and
the maximum and minimum prices at which shares may be bought. If granted, this authority will expire at the conclusion of
the Company’s next AGM, provided that it shall not extend beyond 12 months from the date of passing of this special resolution
number 1.
Please refer to the additional disclosure of information contained in this notice of AGM, which disclosure is required in terms of
the JSE Listings Requirements.
The percentage of the voting rights required for special resolution number 1 to be adopted is 75% in favour of the voting rights
exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
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Additional disclosure requirements in terms of the JSE Listings Requirements
In compliance with the JSE Listings Requirements, the information listed below has been included in the Integrated Annual Report
of which this notice of AGM forms part:
• Major shareholders – refer to page 136 of the Integrated Annual Report
•
Share capital of Tharisa – refer to page 121 of the Integrated Annual Report.
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Material changes
Other than the facts and developments reported on in the Annual Report, there have been no material changes in the affairs or
the financial position of the Company and its subsidiaries since the date of signature of the audit report and the date of this notice
of AGM.
Directors’ responsibility statement
The directors, whose names appear on pages 56 and 57 of this Integrated Annual Report, collectively and individually accept full
responsibility for the accuracy of the information pertaining to this special resolution number 1 and certify that to the best of their
knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, that all
reasonable enquiries to ascertain such facts have been made and that the proposed resolution contains all such information
required by law and the JSE Listings Requirements.
10. ORDINARY RESOLUTION NUMBER 9
Final dividend
“RESOLVED THAT a final cash dividend in the amount of US 3.50 cents per ordinary share is declared for the financial year ending
30 September 2020, such dividend being payable to shareholders registered on the register of members of the Company as of
close of business on the record date, being Friday, 26 February 2021.”
Additional information in respect of ordinary resolution number 9
The Board has proposed a final cash dividend of US 3.50 cents per ordinary shares for the financial year ended
30 September 2020.
If approved by shareholders, the recommended final dividend will be paid on Wednesday, 10 March 2021. Shareholders on the
principal Cyprus register will be paid in US dollar, shareholders whose shares are held through Central Securities Depositary
Participants (‘CSDPs’) and brokers and are traded on the JSE will be paid in South African rand (‘ZAR’) and holders of depositary
interests traded on the LSE will be paid in sterling (‘GBP’). The currency equivalents of the dividend will be based on the weighted
average of the South African Reserve Bank’s daily rate at approximately 10:30 (UTC +2) on 27 November 2020, being the currency
conversion date.
Tax implications of the dividend
Shareholders are advised that the dividend declared will be paid out of income reserves and may therefore be subject to dividend
withholding tax depending on the tax residency of the shareholder.
South African tax residents
South African shareholders are advised that the dividend constitutes a foreign dividend. For individual South African tax resident
shareholders, dividend withholding tax of 20% will be applied to the gross dividend of US 3.50 cents per share. Shareholders who
are South African tax resident companies are exempt from dividend tax and will receive the dividend of US 3.50 cents per share.
This does not constitute legal or tax advice and is based on taxation law and practice in South Africa. Shareholders should consult
their brokers, financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.
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144 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTICE OF VIRTUAL ANNUAL
GENERAL MEETING CONTINUED
UK tax residents
UK tax residents are advised that the dividend constitutes a foreign dividend and that they should consult their brokers, financial
and/or tax advisers with regard to how they will be impacted by the payment of the dividend.
Cyprus tax residents
Individual Cyprus tax residents are advised that the dividend constitutes a local dividend and that they should consult their brokers,
financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.
Shareholders and depositary interest holders should note that information provided should not be regarded as tax advice.
The timetable for the dividend declaration is as follows:
Declaration and currency conversion date
Currency conversion rates announced
Last day to trade cum dividend rights on the JSE
Last day to trade cum dividend rights on the LSE
Shares will trade ex dividend rights on the JSE
Shares will trade ex dividend rights on the LSE
Record date for payment on both JSE and LSE
Dividend payment date
Friday, 27 November 2020
Thursday, 11 February 2021
Tuesday, 23 February 2021
Wednesday, 24 February 2021
Wednesday, 24 February 2021
Thursday, 25 February 2021
Friday, 26 February 2021
Wednesday, 10 March 2021
No dematerialisation or rematerialisation of shares within Strate will be permitted between Wednesday, 24 February 2020 and
Friday, 26 February 2021, both days inclusive. No transfers between registers will be permitted between Thursday, 11 February
2021 and Friday, 26 February 2021, both days inclusive.
The percentage of the voting rights required for ordinary resolution number 9 to be adopted is 50% in favour of the voting rights
exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM. By virtue of
Article 176 of the Articles of Association of the Company, shareholders are informed that they may vote to decrease the dividend
declaration proposed by the Board but shall not be entitled to increase it.
11. ORDINARY RESOLUTION NUMBER 10
Directors’ authority to implement ordinary and special resolutions
“RESOLVED THAT each and every director of the Company and/or the Company Secretary be and are hereby authorised to do all
such things and sign all such documents as may be necessary for or incidental to the ordinary and special resolutions passed at the
AGM.”
Additional information in respect of ordinary resolution number 10
The percentage of voting rights required for ordinary resolution number 10 to be adopted is more than 50% in favour of the
voting rights exercised on this resolution by all shareholders present or represented by proxy and entitled to vote at the AGM.
PROXIES
An ordinary shareholder entitled to attend and vote at the virtual AGM is entitled to appoint a proxy or proxies to attend and act
in his/her stead. A proxy need not be a member of the Company. For the convenience of registered members of the Company, a
form of proxy is attached hereto.
In terms of section 128C of the Companies Law, shareholders and their proxies shall have the right to ask questions on the items
to be discussed and resolutions proposed to be passed at the AGM. The Company shall endeavour to answer such questions,
provided that they are relevant to the matters at hand, do not disrupt or delay proceedings, have not already been previously
answered or contained in information readily available to shareholders elsewhere and the answers do not constitute sensitive
information that may harm the Company or its business operations if disclosed.
Voting by shareholders whose shares are registered on the Cyprus principal register and the South African branch
register (‘JSE’)
The attached form of proxy is only to be completed by those ordinary shareholders who:
•
•
hold ordinary shares in certificated form or
are recorded on the sub-register in ‘own name’ dematerialised form.
Ordinary shareholders who have dematerialised their ordinary shares through a CSDP or broker other than with “own name”
registration and who wish to attend the virtual AGM, must instruct their CSDP or broker to provide them with the relevant letter
of representation to attend the AGM by electronic means and they must provide the CSDP or broker with their voting
instructions in terms of their custody agreement entered into between them and the CSDP or broker. Please also refer to
“Electronic Participation” below.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
145
Unless shareholders advise their CSDP or broker, in terms of their agreement, by the cut-off time stipulated therein, that they wish
to attend the AGM or send a proxy to represent them, their CSDP or broker will assume that they do not wish to attend the AGM
or send a proxy.
Shareholders who are unsure of their status or the action they should take, are advised to consult their CSDP, broker or financial
adviser.
The attached form of proxy must be executed in terms of the Company’s Articles of Association and in accordance with the
relevant instructions set out on the form and for administrative reasons, it is requested that forms of proxy be lodged with the
Company’s transfer secretaries not less than 48 hours before the time set down for the AGM. If required, additional forms of proxy
may be obtained from the transfer secretaries or through the Company’s website.
Voting by depositary interest holders (‘LSE’)
Holders of depositary interests will be sent a form of instruction separately to this Notice of AGM by the depositary,
Computershare Investor Services PLC. On receipt, holders of depositary interests should complete the form of instruction in
accordance with the instructions printed thereon to direct Computershare Company Nominees Limited as the custodian of their
shares how to exercise their votes or (by following the instructions on the form of instruction) indicate that they intend to attend
the AGM in person or by proxy. If a holder of depositary interests indicates, in this manner, that they intend to attend the AGM,
Computershare Company Nominees Limited shall issue a letter of representation to the holder of depositary interests giving them
authorisation to attend the AGM. To be valid, the form of instruction must be completed in accordance with the instructions set
out in the form and returned as soon as possible to the offices of the depositary at Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZY, England so as to be received no later than 08:00 UTC on Friday, 5 February 2021.
Please also refer to “Electronic Participation” below.
Depositary interest holders who are CREST members and who wish to issue an instruction through the CREST electronic voting
appointment service may do so by using the procedures described in the CREST manual (available from www.euroclear.com/
CREST). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting
service provider(s), should refer to their CREST sponsor or voting services provider(s), who will be able to take the appropriate
action on their behalf.
In order for instructions made using the CREST service to be valid, the appropriate CREST message (a CREST voting instruction)
must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited (‘EUI’) and must contain
the information required for such instructions, as described in the CREST manual (available via www.euroclear.com/CREST).
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The message, regardless of whether it relates to the voting instruction or to an amendment to the instruction given to the
depositary must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID 3RA50) no later than 08:00 UTC
on Friday, 5 February 2021. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp
applied to the CREST voting instruction by the CREST applications host) from which the issuer’s agent is able to retrieve the CREST
voting instruction by enquiry to CREST in the manner prescribed by CREST.
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CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in
relation to the transmission of CREST voting instructions. It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that
the CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a CREST voting instruction
is transmitted by means of the CREST service by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST manual concerning
practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST voting instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
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VOTING
In accordance with the Company’s Articles of Association, all resolutions put to a vote at the AGM shall be decided on a poll. Every
shareholder of the Company shall have one vote for every share held in the Company by such shareholder. If you are in any doubt as to
what action you should take in respect of the resolutions provided for in this notice, please consult your CSDP, broker, banker, attorney,
accountant or other professional adviser. An abstention from voting is not a vote and will accordingly not be counted in the calculation
of votes for and against resolutions.
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146 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTICE OF VIRTUAL ANNUAL
GENERAL MEETING CONTINUED
LODGEMENT OF FORMS OF PROXY AND LETTERS OF REPRESENTATION
Forms of proxy and letters of representation should be delivered or posted to the Company’s transfer secretaries, Computershare Investor
Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South Africa (PO Box 61051, Marshalltown, 2107,
South Africa), or can be emailed to Computershare at proxy@computershare.co.za or to the Company at ir@tharisa.com, so as to be
received by no later than 10:00 (SA time) on Monday, 8 February 2021, in accordance with clause 99 of the Company’s Articles of
Association. Any shareholder who completes and lodges a form of proxy will nevertheless be entitled to attend the virtual AGM,
provided that he has obtained a letter of representation to attend the AGM from his CSDP and taken the necessary steps outlined below.
ELECTRONIC PARTICIPATION
The AGM will be held electronically and Tharisa has made provision for shareholders (or their proxies) to participate in the AGM by
joining a Microsoft Teams virtual meeting room.
Shareholders or their duly appointed proxy(ies) (‘Participant/s’) who wish to participate in the AGM via electronic communication, must
apply to the Company’s transfer secretaries at proxy@computershare.co.za by no later than 10:00 on Friday, 5 February 2021.
Participants are advised that they will not be able to vote during the meeting. Should they wish to have their vote counted at the
meeting, Participants must act in accordance with the general proxy and form of instruction submission instructions outlined on pages
147 and 148 of this notice.
Shareholders must take note of the following:
(cid:3)(cid:79) A limited number of telecommunication lines will be available.
(cid:3)(cid:79) Each Participant will be contacted between 08:00 and 10:00 on Wednesday, 10 February 2020 via email and/or SMS. Participants will
be provided with a link to the virtual meeting room and a PIN code to allow them to dial in.
(cid:3)(cid:79) The cut-off time for dialling in on the day of the meeting will be at 10:10 on Wednesday, 10 February 2020, and no late dial-in will be
possible.
The following information is required:
(cid:3)(cid:79) Full name of the shareholder
(cid:3)(cid:79) Identity number, passport number or other form of identification of the shareholder
(cid:3)(cid:79) Email address
(cid:3)(cid:79) Mobile phone number
(cid:3)(cid:79) Name of CSDP/broker (if the shares are in dematerialised form)
(cid:3)(cid:79) Contact person at the CSDP/broker
(cid:3)(cid:79) Contact number at the CSDP/broker
(cid:3)(cid:79) Number of shares held
(cid:3)(cid:79) Letter of representation issued by ............................
Terms and conditions for participation in the virtual AGM via electronic communication
1.
The cost of dialling in using a telecommunication line to participate in the AGM is for the expense of the Participant and will be
billed separately by the Participant’s own telephone service provider.
The Participant acknowledges that the telecommunication lines are provided by a third party and indemnifies Tharisa against any
loss, damage, penalty or claim arising in any way from the use or possession of the telecommunication lines whether or not the
problem is caused by any act or omission on the part of the shareholder/ Participant or anyone else.
Shareholders who wish to participate in the meeting by dialling in must note that they will not be able to vote during the meeting.
Such shareholders, should they wish to have their votes counted at the meeting, must act in accordance with the general
instructions contained in this notice of AGM by:
(a) completing the form of proxy; or
(b) contacting their CSDP/broker with their voting instructions.
The application will only be successful if the emailed application contains the required information and the terms and conditions
have been complied with.
2.
3.
4.
By order of the Board
Sanet Findlay
Company Secretary
11 December 2020
THARISA PLC INTEGRATED ANNUAL REPORT 2020
147
FORM OF PROXY
THARISA PLC
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number: HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
(‘Tharisa’ or the ‘Company’)
This form of proxy relates to the virtual annual general meeting (‘AGM’) of shareholders of the Company to be held via remote electronic platform
Microsoft Teams on Wednesday, 10 February 2021 at 10:00 SA time (UTC +2) and should be completed only by registered certificated shareholders
and shareholders who have dematerialised their shares with “own name” registration.
All other dematerialised shareholders holding shares other than with ‘own name’ registration who wish to attend the virtual AGM must inform their
CSDP or broker of their intention to attend the AGM and request their CSDP or broker to issue them with the relevant letter of representation.
In order to have their votes counted, shareholders must provide their CSDP or broker with their voting instructions in terms of the relevant custody
agreement entered into between them and the CSDP or broker whether or not they choose to attend the virtual AGM. These shareholders must
not complete this form of proxy. Please also refer to notes 14 and 15 below.
This form of proxy should be read with the notice of AGM. Please print clearly and refer to the notes at the end of this form for an explanation on
the use of this form of proxy and the rights of the shareholder and the proxy.
I/We ........................................................................................................................................................................................................................
of address ...............................................................................................................................................................................................................
being the holder of ................................... Tharisa shares, hereby appoint (see notes 1 and 3)
1................................................................................................................................................................................................. or failing him/her
2................................................................................................................................................................................................. or failing him/her
the Chairman of the AGM, as my/our proxy to act for me/us and on my/our behalf at the AGM which will be held for the purpose of considering
and, if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof; and to vote for
and/or against the resolutions and/or abstain from voting in respect of the Tharisa shares registered in my/our name(s), in accordance with the
following instructions (see note 3):
For
Against Abstain
Ordinary business
Ordinary resolution number 1 is non-binding and does not require a minimum threshold
Ordinary resolutions numbers 2 and 3 require support of a simple majority (more than 50%) of the votes
exercised in respect of each resolution adopted
Ordinary resolution number 1: Adoption of annual financial statements
Ordinary resolution number 2: Reappointment of external auditor
Ordinary resolution number 3.1: Re-election of Roger Davey as a director
Ordinary resolution number 3.2: Re-election of Zhong Liang Hong as a director
Ordinary resolution number 3.3: Election of Vaneese Wing Ye Chu as director
Special business
Ordinary resolutions numbers 4 and 5 require support of a simple majority (more than 50%) of the votes
exercised in respect of each resolution to be adopted
Ordinary resolution number 6 requires a 75% majority of the votes exercised to be adopted
Ordinary resolutions 7.1 and 7.2 are non-binding and do not require a minimum threshold
Ordinary resolution 8 requires support of at least 75% of the votes exercised to be adopted
Special resolution number 1 requires support of at least 75% of the votes exercised to be adopted
Ordinary resolutions numbers 9 and 10 require support of a simple majority (more than 50%) of the votes
exercised in respect of each resolution to be adopted
Ordinary resolution number 4: Control of authorised but unissued shares
Ordinary resolution number 5: Dis-application of pre-emptive rights
Ordinary resolution number 6: General authority to issue shares for cash
Ordinary resolution number 7.1: Approval, through a non-binding advisory vote, of the Group remuneration
policy
Ordinary resolution number 7.2: Approval, through a non-binding advisory vote, of the Group remuneration
implementation report
Ordinary resolution number 8: Approval and adoption of the 2021 LTIP
Special resolution number 1: General authority to repurchase shares
Ordinary resolution number 9: Final dividend
Ordinary resolution number 10: Directors’ authority to implement ordinary and special resolutions
Please indicate with an “X” in the space provided above how you wish your votes to be cast.
Signed at ...................................................................................... on ................................................................................................. 2020/2021
Signature ................................................................................................................................................................................................................
Assisted by (if applicable) (see note 7) .....................................................................................................................................................................
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148 THARISA PLC INTEGRATED ANNUAL REPORT 2020
NOTES TO THE FORM OF PROXY
CONTINUED
1. A registered shareholder may appoint an individual as a proxy, including an individual who is not a shareholder of the Company,
to participate in, speak and vote at a shareholders’ meeting on his/her behalf. Should this space be left blank, the proxy will be
exercised by the Chairman of the meeting.
2. The person whose name appears first on the form of proxy and who is present at the AGM will be entitled to act as proxy to the
exclusion of those whose names follow.
3. A proxy may delegate his/her authority to act on your behalf to another person, subject to any restriction set out in this form of
proxy.
6.
5.
4. A shareholder’s instructions to the proxy must be indicated by the insertion of an “X”, or the number of votes exercisable by that
shareholder, in the appropriate box provided. The proxy is entitled to exercise, or abstain from exercising, any voting right of the
shareholder at the AGM, but only as directed on this form of proxy.
If there is no clear indication as to the voting instructions to the proxy, the form of proxy will be deemed to authorise the proxy to
vote or to abstain from voting at the AGM as he/she deems fit in respect of all the shareholder’s votes exercisable.
For administrative reasons, it is requested that the completed form of proxy be lodged with the transfer secretaries of the
Company, Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, South
Africa (PO Box 61051, Marshalltown, 2107, South Africa) or emailed to proxy@computershare.co.za, so as to be received by them
by no later than 10:00 SA time on Monday, 8 February 2021, being no later than 48 hours before the AGM to be held at 10:00
SA time on Wednesday, 10 February 2021. Forms of instruction must be lodged with Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol BS13 8AE, United Kingdom, so as to be received by them by no later than 08:00 on Friday,
8 February 2021. The Chairman of the AGM may, in his discretion, accept proxies that have been delivered after the expiry of
the aforementioned period up to and until the time of commencement of the AGM, at his sole discretion.
7. This form of proxy must be dated and signed by the shareholder appointing the proxy. The completion of blank spaces does not
have to be initialled, but any alteration or correction made to this form of proxy must be initialled by the signatory/ies. A minor
must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced or
have been registered by the Company.
8. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be
attached to this form of proxy unless previously recorded by the Company or waived by the Chairman of the AGM. CSDPs or
brokers registered in the Company’s sub-register voting on instructions from beneficial owners of shares registered in the
Company’s sub-register, are requested to identify the beneficial owner in the sub-register on whose behalf they are voting and
return a copy of the instruction from such owner to the Company’s transfer secretaries, together with this form of proxy.
9. The Chairman of the meeting shall be entitled to decline or accept the authority of a person signing the form under a power of
attorney or on behalf of a company, unless the power of attorney is deposited at the Company’s transfer secretaries not later than
48 hours before the meeting.
10. The appointment of the proxy or proxies will be suspended at any time to the extent that the shareholder chooses to act directly
and in person in the exercise of any of his/her rights as a shareholder at the AGM.
11. The appointment of the proxy is revocable unless expressly stated otherwise in this form of proxy. The proxy appointment may be
revoked by cancelling it in writing, or making a later inconsistent appointment of a proxy and delivering a copy of the revocation
instrument to the proxy and to the Company’s transfer secretaries. Please note the revocation of a proxy appointment constitutes
a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder, as of the date stated in the
revocation instrument, if any, or the date on which the revocation instrument was delivered to the Company’s transfer secretaries
and the proxy, as aforesaid.
12. The appointment of the proxy remains valid only until the end of the AGM or any adjournment or postponement thereof, unless
it is revoked by the shareholder before then on the basis set out above.
13. Holders of depositary interests on the LSE must not complete this form of proxy. Holders of depositary interests will be sent a
separate form of instruction by the depositary, Computershare Investor Services PLC. On receipt, holders of depositary interests
should complete the form of instruction in accordance with the instructions printed thereon to direct Computershare Company
Nominees Limited as the custodian of their shares how to exercise their votes.
14. The AGM will be held electronically and Tharisa has made provision for shareholders (or their proxies) to participate in the AGM
by joining a Microsoft Teams virtual meeting room.
15. Shareholders or their duly appointed proxy(ies) are advised that they will not be able to vote during the meeting. Should they
wish to have their vote counted at the meeting, they must provide their CSDP or broker with their voting instructions or lodge
their proxies or letters of instruction with Computershare, whichever is applicable.
THARISA PLC INTEGRATED ANNUAL REPORT 2020
149
SUMMARY OF THE PRINCIPAL
TERMS OF THE THARISA PLC
LONG-TERM INCENTIVE PLAN 2021
(THE ‘LTIP’)
1. OVERVIEW
It is proposed that the Company will adopt the LTIP and seek approval for the grant of Performance Share Awards and Restricted Stock Awards
to employees of the Company’s group. For completeness, a full summary of the principal terms of the LTIP following the proposed
amendments is set out below.
2. ADMINISTRATION
The LTIP will be administered by the remuneration committee of the Board (the ‘Committee’). In adminstering the Plan, the Committee shall
act fairly and reasonably in any exercise of its discretion.
3.
ELIGIBILITY
Employees (including executive directors) of the Company or of any of its subsidiaries will be eligible to participate in the LTIP.
4. NATURE OF THE LTIP AND FORM OF AWARDS
Overview
The LTIP is an “umbrella” arrangement which, to give the Committee maximum flexibility, allows various types of award to be granted.
Annual grants – long-term incentives
It is intended that the LTIP will be used annually to grant “Performance Share Awards” to the executive directors of the Company and other
members of the executive committee and certain member of the senior management team.
Performance Share Awards must be granted subject to performance targets.
Restricted Stock Awards may be granted subject to a performance target.
Form of awards
Awards may be granted in the form of:
(cid:3)(cid:79) contingent rights to receive Shares; or
(cid:3)(cid:79) cash-based awards.
5.
6.
7.
INDIVIDUAL LIMIT
The LTIP contains an individual limit which provides that the number of shares that may be held by any one participant pursuant to awards
granted under the LTIP cannot exceed 2 750 000.
SOURCE OF SHARES AND DILUTION LIMITS
Awards may be satisfied by newly issued shares, shares purchased on the market by an employee benefit trust or by the transfer of shares held
in treasury.
The number of new shares issued or remaining capable of being issued under the LTIP will not exceed 13 750 000.
If awards are to be satisfied by a transfer of existing shares, the limit stated above will not apply. Insofar as it is necessary to ensure compliance
with the guidelines issued from time to time by institutional investors, the limit will apply to awards satisfied by the transfer of shares held in
treasury.
GRANT OF AWARDS
Awards may be granted within 42 days of the date of adoption. Thereafter, awards may be granted
(cid:3)(cid:79) within 42 days of any dealing day following an announcement of the results of the Company for any period;
(cid:3)(cid:79) within 28 days of a person first joining the Company’s group; or
(cid:3)(cid:79) on any other day on which the Committee determines that circumstances have arisen which justify the award;
(cid:3)(cid:79) provided that no awards may be granted at any time when their grant would be prohibited under any relevant dealing restriction, or any
other relevant requirement, guideline, regulation or law, and no awards may be made more than 10 years after the date of adoption. No
payment will be required for the grant of an award.
8.
PERFORMANCE TARGETS
Performance Share Awards
Performance Share Awards will always be subject to performance targets.
It is intended that the first set of Performance Share Awards will be subject to performance targets relating to PGM production
(33.3% weighting), Chrome concentrate production (33.3% weighting) and strategic measures (33.4% weighting), each measured over a
three-year performance period. In addition, the Committee will need to be satisfied that the level of vesting achieved against these headline
metrics is appropriate in the context of EBITDA performance achieved over the period and capex versus the business plan in place at the time
of grant of the awards. Furthermore, full vesting will depend upon there being no fatality at the Tharisa Mine during the vesting period. A
proportion of the award will be forfeited in the event of a fatality at the mine, with the extent of forfeiture depending upon the specific
circumstances.
For Performance Share Awards granted in future, the Committee will review whether the performance targets remain appropriate and
challenging taking into account the industry’s outlook and shareholders’ interests.
Amendments
The Committee may amend a performance target if it considers it appropriate. The Committee may, however, only amend a performance
target imposed on an award if it considers that the existing target should be amended to ensure that the revised target will then be a fairer
measure of performance and provided that the amended performance target shall not be materially more or less demanding to satisfy than
the original performance target was when first set.
9.
VESTING OF AWARDS
Performance Share Awards
Performance Share Awards will normally vest on the third anniversary of grant, subject to (i) the award holder remaining in employment with
the Company or any of its subsidiaries, and (ii) the satisfaction of the performance targets.
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150 THARISA PLC INTEGRATED ANNUAL REPORT 2020
SUMMARY OF THE PRINCIPAL
TERMS OF THE THARISA PLC
LONG-TERM INCENTIVE PLAN 2021
(THE ‘LTIP’) CONTINUED
Post-Vesting Holding Period – Performance Share Awards
Performance Share Awards may be granted subject to a post-vesting holding period of up to two years from the date of vesting. It is currently
intended that Performance Share Awards granted to the executive directors of the Company will be subject to a two-year post-vesting holding
period which will prevent them from selling any shares received pursuant to their award (other than those sold
to raise funds to discharge the tax liabilities arising on vesting) until the fifth anniversary of grant.
Restricted Stock Awards
Restricted Stock Awards may be subject to performance targets and will normally vest on such date as the Committee may determine
on or before the grant of the awards.
10. LEAVING EMPLOYMENT
If a participant leaves employment with the Company’s group his award will lapse unless he is a “good leaver”.
A participant will be a “good leaver” if the reason for leaving is death, ill-health, injury, disability, the transfer of the employing business or
company, redundancy, retirement or otherwise at the discretion of the Committee.
If the participant is a good leaver then any Performance Share Awards or Restricted Stock Awards shall vest on the date on which they would
have vested had the cessation not occurred subject to any performance targets being satisfied and, unless the Committee determines
otherwise, taking into account a time pro-rata reduction to reflect the period of time between grant and cessation relative to the length of the
vesting period.
If the participant is a good leaver, the Committee may instead allow any Performance Share Awards or Restricted Stock Awards to vest on
leaving, again subject to the performance targets being satisfied and, unless the Committee determines otherwise, a time pro-rata reduction in
the number of shares which vest.
11. RECOVERY AND WITHHOLDING
The LTIP contains recovery and withholding provisions which the Committee may operate until two years after vesting if:
(cid:3)(cid:79) the Company materially misstated its financial results for any reason;
(cid:3)(cid:79) there has been an error in calculating the level of vesting;
(cid:3)(cid:79) circumstances of corporate failure have arisen as a result of the acts or omissions of the award holder;
(cid:3)(cid:79) the Company, any member of its group or a relevant business unit has been the victim of fraud committed by the award holder;
(cid:3)(cid:79) the award holder has committed an act (or acts) amounting to gross misconduct and/or gross negligence; or
(cid:3)(cid:79) the Company, or another member of the Group, has suffered serious reputational damage as a result of the conduct of the award holder.
If the Committee decides to operate the recovery and withholding provisions it may then recover such sum as it sees fit by:
(cid:3)(cid:79) reducing (including to zero) the amount of any future annual bonus; and/or
(cid:3)(cid:79) reducing (including to zero) the number of unvested shares under any share award; and/or
(cid:3)(cid:79) requiring the award holder to make a payment to the Company or such member of its group as the committee may direct.
The Committee may also reduce the number of shares under an award granted under the LTIP to give effect to any recovery and/or
withholding provision contained in any other incentive plan operated by the Company’s group.
12. CORPORATE EVENTS
In the event of a takeover of the Company awards shall vest early.
Awards shall vest subject to the satisfaction of any performance targets and, unless the committee determines otherwise, taking into account
a time pro rata reduction to reflect the period of time between grant and takeover relative to the length of the relevant vesting period.
In the event of a demerger, delisting, special dividend or other event which, in the opinion of the committee, would affect the market
price of a share to a material extent the Committee may allow awards to vest on the basis described above, subject to the JSE Listings
Requirements.
Awards will not normally vest on an internal reorganisation.
13. DIVIDEND EQUIVALENTS
An award may be made on terms that the participant will be entitled to receive additional shares with a value equal to the aggregate dividends
in respect of which the record date occurred between the award date and the date of vesting on the vested number of shares. The calculation
of the number of shares to be so received may assume the reinvestment of dividends. Alternatively, the committee may decide to deliver the
dividend equivalent in cash.
14. ADJUSTMENT OF AWARDS
If there is any variation of the Company’s share capital, or in the event of a demerger or payment of a special dividend or similar event which
would otherwise materially affect the value of an award, the committee may adjust the number of shares under award provided that the
proportion of the Company’s share capital under the award remains the same before and after such adjustment.
15. RIGHTS ATTACHING TO SHARES AND TRANSFERABILITY
Shares allotted or transferred under the LTIP will rank alongside shares of the same class then in issue. The Company will apply to the Financial
Conduct Authority and/or the Johannesburg Stock Exchange for the listing of any newly issued shares. Awards are not transferable (except on
death or, if the Committee so permits, to an inter vivos trust) and are not pensionable benefits.
16. AMENDMENT
The Committee may amend the LTIP in any respect. However, the provisions governing eligibility, equity dilution, individual participation limits,
the basis for determining the rights of participants to acquire shares or to receive cash and the adjustments that may be made following a
variation of capital cannot be altered without the prior approval of shareholders. There is an exception to this rule in respect of minor
amendments to benefit the administration of the LTIP, to take account of a change in legislation or to obtain or maintain favourable tax,
exchange control or regulatory treatment for participants in the LTIP or for any member of the Company’s group. In addition, no alteration may
be made if it would adversely affect the rights of a participant without that participant’s consent.
This summary does not form part of the rules of the LTIP and should not be taken as affecting the interpretation of the detailed terms and conditions
of the rules of the LTIP. The Committee reserves the right up to the date of adoption to make such amendments and additions to the rules of the LTIP
as it sees fit provided that such amendments do not conflict in any material respect with this summary.
GLOSSARY
THARISA PLC INTEGRATED ANNUAL REPORT 2020
151
In this Integrated Annual Report, unless otherwise indicated, the words in the first
column have the meanings stated opposite them in the second column, words in the
singular include the plural and vice versa, words denoting one gender include the other,
and words denoting natural persons include juristic persons and associations of persons
and vice versa.
4PGE or 3PGE + Au
Platinum Group Metals comprising platinum, palladium, rhodium and gold
5PGE + Au
6PGE + Au
AET
AGM
AMCU
Appreciation right
ART
Arxo Logistics
Arxo Metals
Arxo Resources
Award
Au
BAPS
BEE
BMI
Board
Bushveld Complex
Calibre
CBT
certificated shares
Platinum Group Metals comprising platinum, palladium, rhodium, ruthenium, iridium
and gold
5PGE plus osmium
adult education and training
the Annual General Meeting of the Company
the Association of Mineworkers and Construction Union of South Africa
the award which takes the form of a right to call for shares of an aggregate market
value or receive a cash amount equal to the increase (if any) between the date an
award is granted and the exercise date of the market value of such number of shares
as is specified in the notice of award and has vested
antiretroviral treatment
Arxo Logistics Proprietary Limited (Registration number 2009/006720/07), a private
company duly registered and incorporated in South Africa, a wholly owned subsidiary
of the Company
Arxo Metals Proprietary Limited (Registration number 2011/143342/07), a private
company duly registered and incorporated in South Africa, an indirect wholly owned
subsidiary of the Company
Arxo Resources Limited (Registration number HE221459), a public company duly
registered and incorporated in Cyprus, a wholly owned subsidiary of the Company
the award granted under the Share Award Plan in the form of a conditional award or
an appreciation right
gold
biodiversity action plans
Black Economic Empowerment, as defined in the MPRDA and “broad-based
socioeconomic empowerment” as defined in the Mining Charter
BMI Drilling Proprietary Limited (Registration number 2010/001913/07)
the Board of Directors of the Company
a major intrusive igneous body in the northern part of South Africa, that has
undergone remarkable magmatic differentiation, and the leading source of PGMs and
chromium
Calibre Clinical Consultants Proprietary Limited (Registration number
2005/005494/07), a private company duly registered and incorporated in South Africa
computer-based training
Shares which are held and represented by a share certificate or other tangible
document of title, which shares have not been dematerialised in terms of the
requirements of Strate
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Challenger or Challenger Plant
the integrated beneficiation plant adjacent to the Genesis Plant for the production of
chemical and foundry grade concentrate owned by Arxo Metals
Charter Scorecard
the Scorecard for the Mining Charter published pursuant to section 100(2)(a) of the
MPRDA under Government Gazette No. 26661 of 13 August 2004, as amended by
General Notice 1002 of 27 September 2018
chemical grade concentrate
the main ingredient in the production of chrome chemicals. The critical specifications
are a minimum of 45% Cr2O3, and a maximum of 1.28% SiO2
chrome
chrome concentrate
chrome alloys
chromite
chromitite
chromitite layers
chromium or Cr
CIF
cm
Coffey
used to reference any form of chromium, Cr or chrome concentrate
any combination of chemical, foundry and/or metallurgical grade concentrate with a
predominance of metallurgical grade concentrate
a chrome alloy produced directly through smelting using carbon as a reducing agent
in the presence of fluxes, which alloy is used as primary raw material in the production
of stainless steel
a hard, black, refractory chromium-spinel mineral consisting of varying proportions of
the oxides of iron chromium, aluminium and magnesium
a rock composed essentially of chromite, that typically occurs as layers or irregular
masses exclusively associated with magmatic complexes. The bulk of the world’s
exploitable chromitite occurs almost exclusively in layered complexes
thick accumulations of chromite grains to form monomineralic bands or layers, which
chromitite layers are typically greater than 30 cm thick
the element chromium (Cr) is classified as a metal and is situated between other
metals such as vanadium (V), manganese (Mn) and molybdenum (Mo) in the periodic
table of elements
cost, insurance and freight as defined in Incoterms 2010
centimetres
Coffey Mining (South Africa) Proprietary Limited (Registration number
2006/030152/07), a private company duly registered and incorporated in South Africa
Company, Tharisa
Tharisa plc, a company incorporated under the laws of Cyprus with registration
number HE223412
Competent Person’s Report or CPR
a report compiled by an independent Competent Person (CP) relating to the technical
aspects of a mine that may include a techno-financial model
Conditional award
an award which takes the form of a contingent right to receive, at no or nominal cost,
such number of ordinary shares or receive a cash amount as is specified in the notice
of award and has vested
CSE
CSI
Cr2O3
CREST
the Cyprus Stock Exchange
corporate social investment
chromium (III) oxide
the relevant system (as defined in the Uncertificated Securities Regulations) in respect
of which Euroclear UK & Ireland is the operator
CSDP Markets Act
a Central Securities Depository Participant as defined in section 1 of the Financial
Markets Act
Cyprus
the Republic of Cyprus
Cyprus Companies Law
Companies Law, Chapter 113 of the laws of Cyprus, as amended, supplemented or
otherwise modified from time to time
THARISA PLC INTEGRATED ANNUAL REPORT 2020
153
dematerialise, dematerialised or
dematerialisation
the process by which physical share certificates are replaced with electronic records of
ownership in accordance with the rules of Strate
dematerialised shares
shares which are held in electronic form as uncertificated securities in accordance with
the requirements of Strate
Depositary
Computershare Investor Services PLC
Depositary interests or DI
the dematerialised depositary interests issued by the Depositary in respect of the
underlying ordinary shares
Disclosure and Transparency Rules or
DTR
the Disclosure and Transparency Rules made by the FCA under Part VI of the Financial
Markets Act, 2000
DMRE
DWS
EIA
EMP
EMPR
Eskom
Equator Principles
the South African Department of Mineral Resources and Energy
Department of Water and Sanitation, South Africa
environmental impact assessment
the environmental management plan in terms of the MPRDA
environmental management programme report
Eskom Holdings SOC Limited
the set of voluntary guidelines adopted and interpreted in accordance with
International Finance Corporate Performance Standards and the World Bank’s EHS
guidelines, adopted by Equator Principle Financial Institutions, as updated from time to
time
Euroclear UK & Ireland
Euroclear UK & Ireland Limited, the operator of CREST
the FCA
FCA
FEED
FIFR
foundry grade
g/t
GBP
the Financial Conduct Authority of the United Kingdom
Free carrier – a trade term requiring the seller to deliver goods to the carrier or another
person nominated by the buyer at the seller’s premises or another named place. Costs
for transportation and risk of loss transfer to the buyer after delivery to the carrier
front-end engineering and design
fatality injury frequency rate
concentrate saleable chromium-rich product typically more than 45% Cr2O3 less than
1% SiO2 and a specific particle size distribution
grammes per tonne
British pound, the lawful currency of the United Kingdom
Genesis or Genesis Plant
the 100 000 tpm nameplate capacity processing plant for the production of PGM and
chrome concentrate, owned by Tharisa Minerals
GHG
Group
HDSA
HRD
ICDA
IDP
IFRS
greenhouse gas
the Company including all its subsidiaries
historically disadvantaged South Africans as defined in the MPRDA and the Mining
Charter
human resources development
the International Chromium Development Association
Individual development plans
International Financial Reporting Standards
illuvial chrome
at surface chrome fines generated from seams as a result of weathering
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Impala Platinum
Incoterms 2010
Indicated Mineral Resource
Inferred Mineral Resource
Investec Bank
Investment agreement
Ir
IWUL
Impala Platinum Limited, a subsidiary of Impala Platinum Holdings Limited
(Registration number 1957/001979/06), a public company duly registered and
incorporated in South Africa
the Incoterms rules are a series of predefined commercial terms published by the
International Chamber of Commerce that are widely used in international commercial
transaction or procurement processes
an Indicated Mineral Resource is that part of a Mineral Resource for which tonnage,
densities, shape, physical characteristics and mineral content can be estimated with a
reasonable level of confidence. Designating a resource as “Indicated” is based on
information from exploration, sampling and testing of material gathered from
locations such as outcrops, trenches, pits, workings and drill holes. The locations are
too widely or inappropriately spaced to confirm geological or grade continuity but are
spaced close enough for continuity to be assumed
an Inferred Mineral Resource is that part of a Mineral Resource for which volume or
tonnage, grade and mineral content can be estimated with only a low level of
confidence. It is inferred from geological evidence and sample and assumed but not
verified geologically or through analysis of grade continuity. Designating a Mineral
Resource “Inferred” is based on information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill holes that may be
limited in scope or of uncertain quality and reliability
Investec Bank Limited (Registration number 1969/004763/06), a public company duly
registered and incorporated in South Africa
the Investment Project Framework Agreement entered into between Karo Holdings
and the Republic of Zimbabwe on 22 March 2018
Iridium
integrated water use licence
JSE or Johannesburg Stock Exchange
JSE Limited (Registration number 2005/022939/06), a public company duly registered
and incorporated in South Africa and licensed in terms of the Financial Markets Act,
No. 19 of 2012
JSE Listings Requirements
the Listings Requirements of the JSE, as amended from time to time
K3 UG2 chrome plant
the chrome concentrate recovery plant associated with Sibanye-Stillwater’s K3 plant
Karo Holdings
Karo Platinum
King IV
km
koz
kt
ktpm
Leto Settlement
Listing
Karo Mining Holdings Limited (Registration number HE380340), a public company
duly registered and incorporated in Cyprus
Karo Platinum Mines (Private) Limited (Registration number 7178/2013), a private
company duly registered and incorporated in Zimbabwe
the King IV Code on Corporate Governance 2016 (South Africa)
thousand metres
thousand ounces
thousand tonnes
thousand tonnes per month
a discretionary trust established in accordance with the trusts (Guernsey) Law 1989 by
Artemis Trustees Limited, in its capacity as trustee of the Zeus Settlement, out of a
portion of the trust assets of the Zeus Settlement, for the benefit of Adonis Pouroulis,
his wife and children
the primary listing of Tharisa, a foreign registered company, in the “General Mining”
sector of the Main Board of the JSE under the abbreviated name “Tharisa”, JSE code
“THA” and ISIN CY0103562118
Listing Rules
the Listing Rules made by the FCA under Part VI of the Financial Markets Act, 2000
THARISA PLC INTEGRATED ANNUAL REPORT 2020
155
LOM
life of mine, being the expected remaining years of production based on production
rates and ore Mineral Reserves
London Stock Exchange or LSE
the London Stock Exchange plc
LTI
LTIFR
lost-time injury resulting in the injured being unable to attend/return to work to
perform the full duties of his/her regular work, as per advice of a suitably qualified
medical professional, on the next calendar day after the injury
lost-time injury frequency rate, the number of lost-time injuries per 200 000 hours
worked
Main Market
the Main Market of the LSE
Measured Mineral Resource
a Measured Mineral Resource is that part of a Mineral Resource for which the
tonnage, densities, physical characteristics, grade and mineral content can be
estimated with a high level of confidence. Describing a resource as “Measured” is
based on detailed and reliable information from exploration, sampling and testing of
material from locations such as outcrops, trenches, pits, workings and drill holes. The
locations are spaced closely enough to confirm geological and grade continuity
metallurgical grade concentrate
saleable chromium-rich product typically of 42% Cr2O3
MG0
MG1
MG2
MG3
MG4
MG4A
MG Chromitite Layers
MHSA
MHSC
Mineral Reserve
chromitite layer that consists of chromitite dissemination with more chromitite layers
and stringers, that are developed in the footwall pyroxenite of the MG1 Chromitite
Layer
chromitite layer that typically has a massive chromitite content with minor feldspathic
pyroxenite partings or layering. In some areas the MG1 Chromitite Layer has
developed into two chromitite layers separated by a feldspathic pyroxenite
chromitite layer that consists of three groupings of chromitite layers which from the
base are the MG2A Chromitite Layer, MG2B Chromitite Layer and the MG2C
Chromitite Layer. The partings are typically feldspathic pyroxenite. The parting
between the MG2B Chromitite Layer and MG2C Chromitite Layer includes a
platiniferous chromitite stringer
chromitite layer that is occasionally a massive chromitite layer but more often a very
irregular assemblage of chromitite layers and stringers within a norite and/or
anorthosite. The top of the package typically consists of thin chromitite stringers and
dissemination of chromite in norite which develops into a massive layer at the base
the MG4 Chromitite Layer consists of a lower chromitite (MG4(0) Chromitite Layer)
(approximately 0.6 m thick) immediately overlain by a norite (approximately 0.85 m
thick) followed by the chromitite layer of the MG4 Chromitite Layer (approximately
1.8 m thick), overlain by another parting, of feldspathic pyroxenite composition, some
3.2 m thick and finally overlain by the chromitite of the MG4A Chromitite Layer
(approximately 1.5 m thick)
the MG4A Chromitite Layer consists of a number of chromitite layers within a
pyroxenite host rock
group of five chromite layers that are known in the lower and upper critical zone of
the Bushveld Complex
the Mine Health and Safety Act, 1996 of South Africa
the Mine Health and Safety Council of South Africa
the economically mineable material derived from a measured or indicated Mineral
Resource or both, which includes diluting and contaminating materials and allows for
losses that are expected to occur when the material is mined. Appropriate
assessments to a minimum of a pre-feasibility study for a project and a LOM plan for
an operation must have been completed, including consideration of, and modification
by, realistically assumed mining, metallurgical, economic, marketing, legal,
environmental, social and governmental factors (the modifying factors)
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Mineral Resource
a concentration or occurrence of material of economic interest in or on the earth’s
crust in such form, quality and quantity that there are reasonable and realistic
prospects for eventual economic extraction. The location, quantity, grade, continuity
and other geological characteristics of a Mineral Resource are known, or estimated
from specific geological evidence, sampling and knowledge interpreted from an
appropriately constrained and portrayed geological model. Mineral Resources are
subdivided, and must be so reported, in order of increasing confidence in respect of
geoscientific evidence, into Inferred, Indicated or Measured categories
Mines and Minerals Act
the Mines and Minerals Act of Zimbabwe [Chapter 21:05]
Mining Charter
Mining Right
MPRDA
MQA
Mt
MTC
Mtpa
MW
MWh
NEMA
NEMWA
Noble
NQF
NUM
NWA
OEM
the Broad-based Socio-economic Empowerment Charter for the South African Mining
Industry (together with the Charter Scorecard), published pursuant to section 100(2)
(a) of the MPRDA under Government Gazette No. 26661 of 13 August 2004 and
thereafter amended by General Notice 1002 of 27 September 2018
a new order Mining Right, granted by the DMRE in terms of the MPRDA, which
provides the holder thereof the required legal title to mine
Mineral Petroleum Resources Development Act
Mining Qualifications Authority of South Africa
million tonnes
medical treatment case
million tonnes per annum
megawatt
megawatt hour
National Environmental Management Act of 2008 of South Africa
National Environmental Management Waste Act of 2008 of South Africa
Noble Resources International PTE Limited, (Registration number 201115304N), a
company duly registered and incorporated in Singapore
National Qualifications Framework of South Africa
the National Union of Mineworkers of South Africa
National Water Act of 1998 of South Africa
original equipment manufacturer
Official List
the official list of the FCA
oz
ozpa
pa
Pd
PDMRs
Pivot
PGE
PGMs
a troy ounce which is exactly 31.1034768 grams
oz per annum
per annum
Palladium
Person/s Discharging Managerial Responsibility – persons who have access to price
sensitive information on a regular basis and who may therefore not deal in a
company’s securities in a closed period
Pivot Mining Consultants Proprietary Limited (Registration number 2006/030152/07),
a private company duly registered and incorporated in South Africa
Platinum group elements
Platinum group metals being platinum, palladium, rhodium, ruthenium, iridium, and
osmium
THARISA PLC INTEGRATED ANNUAL REPORT 2020
157
PGM concentrate
the commercially acceptable flotation concentrate containing PGMs
PRC or China
prill split
the Peoples Republic of China
a breakdown by mass of the various PGM metals contained in PGM containing
materials
Prospecting Right
a prospecting right granted by the DMRE in terms of the MPRDA
Pt
reef
Rh
RNS
ROM
Ru
Salene Chrome
SAMREC Code
SAMVAL Code
SENS
SETA
Platinum
in the context of this Integrated Annual Report, reef refers to any or all of the MG and
UG chromitite layers
Rhodium
the Regulatory News Service of the LSE
run of mine, being the ore tonnage extracted to be processed
Ruthenium
Salene Chrome Zimbabwe (Private) Limited (Registration number 920/2015), formerly
Maroon Blue Consultants (Private) Limited, a private company duly incorporated and
registered in Zimbabwe
the South African Code for Reporting of Exploration Results, Mineral Resources and
Reserves (prepared by the South African Mineral Resource Committee (‘SAMREC’)
Working Group) (2016)
the South African Code for the Reporting of Mineral Asset Valuation (2016) prepared
by the South African Mineral Asset Valuation Committee (‘SAMVAL’) Working Group
the Stock Exchange News Service of the JSE
Sector Education Training Authority, South Africa
Share Award Plan or TSAP
the Tharisa Share Award Plan approved by the shareholders
Shares
SHE
SIB
all the issued ordinary shares of the Company of nominal value of US$0.001 each
safety, health and environment
stay in business capital expenditure
Sibanye-Stillwater
Sibanye Gold Limited (Registration number 2002/031431/06), a public company duly
incorporated and registered in South Africa
SiO2
SLP
SOP
South Africa or SA
Standard listing
Strate
silicon dioxide
Social and Labour Plan aimed at promoting employment and advancement of the
social and economic welfare of all South Africans while ensuring economic growth
and socioeconomic development as stipulated in the MPRDA
standard operating procedures
the Republic of South Africa
a listing on the standard segment of the official list
Strate Limited (Registration number 1998/022242/06), a limited liability public
company duly registered and incorporated in South Africa, which is a registered
central securities depositary and which is responsible for the electronic settlement
system used by the JSE
stripping ratio
the ratio, measured in m3 to m3 at which waste and inter-burden are removed, relative
to ore mined
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GLOSSARY CONTINUED
STS
t
tCO2e
TB
Tharisa
Tharisa Mine
Tharisa Minerals
The Disclosure and Transparency Law
Tisco
tpa
tpm
Transnet
UG1
UG2
standard threshold shift
tonne
tonnes of carbon dioxide equivalent
tuberculosis
Tharisa plc (Registration number HE223412), a public company duly registered and
incorporated in Cyprus
Tharisa Minerals’ wholly owned PGM and chrome mining and processing operations
located in the magisterial district of Rustenburg (North West region), South Africa,
situated in the Bushveld Complex
Tharisa Minerals Proprietary Limited (Registration number 2006/009544/07), a
company duly registered and incorporated in South Africa, held 74% by Tharisa
Law 190(I)/2007, as amended (law providing for transparency requirements in relation
to information about issuers whose securities are admitted to trading on a regulated
market), governed by the Cyprus Securities and Exchange Commission
Taiyuan Iron and Steel’s Joint Venture Company Shanxi Taigang Wanbang Furnace
Charge Co. Limited
tonnes per annum
tonnes per month
Transnet SOC Limited
the Upper Group 1 chromitite layer that is a well developed and consistent marker in
the critical zone of the Bushveld Complex that consists of a massive chromitite,
chromitiferous pyroxenite, bands of anorthosite, chromitite and norites and stringers
of chromitites
the Upper Group 2 chromitite layer of the Bushveld Complex that is well known and
typically contains PGMs in a concentration that is sufficient for economic extraction
UG Chromitite Layers
the Upper Group chromitite layers of the Bushveld Complex
UK or United Kingdom
the United Kingdom of Great Britain and Northern Ireland
UK Listing Authority or UKLA
the Financial Conduct Authority acting in its capacity as the competent authority for
the purposes of Part VI of the FSMA and in the exercise of its functions in respect of
admission to the official list
USA
US$
VCT
the United States of America
United States dollar, the lawful currency of the US
voluntary counselling and testing
Voyager or Voyager Plant
a 300 000 tpm nameplate capacity processing plant for the production of PGM and
chrome concentrate, owned by Tharisa Minerals
Vulcan or Vulcan Plant
ground-breaking use of existing technologies in fine chrome recovery
WPIC
ZAR or R or rand
Zimbabwe
World Platinum Investment Council
South African rand, the lawful currency of South Africa
the Republic of Zimbabwe
STAKEHOLDER ENGAGEMENT
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Tharisa believes that stakeholder engagement is a business imperative and that strong
lines of communication between stakeholders ensure the success of the Group and
secure its place within the community. The Group’s stakeholder engagement strategy
aims to maintain good working relations, manages social risk and develops solutions to
social challenges faced by its stakeholders. Tharisa’s stakeholder engagement framework
will be further developed for the new jurisdictions that it is entering as those operations
are established.
SHAREHOLDERS
COMMUNITIES
(cid:3)(cid:79) Interim and integrated annual
reporting
(cid:3)(cid:79) Quarterly production updates
(cid:3)(cid:79) Annual general meeting (‘AGM’)
(cid:3)(cid:79) SENS/RNS announcements
(cid:3)(cid:79) Annual report
(cid:3)(cid:79) Company website
(cid:3)(cid:79) Face to face and online meetings
(cid:3)(cid:79) AET, leadership and bursaries
(cid:3)(cid:79) Community forums
(cid:3)(cid:79) Local upliftment and wellness
programmes and projects
(cid:3)(cid:79) Regular meetings with various
community leadership structures
(cid:3)(cid:79) CSI programmes
(cid:3)(cid:79) Career-sharing information for pupils
SOUTH AFRICAN
STATE-OWNED ENTITIES
(cid:3)(cid:79) Regular face-to-face meetings
(cid:3)(cid:79) Electronic communication
(cid:3)(cid:79) Joint task team with Transnet to
develop rail siding
FINANCIERS
(cid:3)(cid:79) Reporting on a monthly, bi-annual
and annual basis
EMPLOYEES
CUSTOMERS
(cid:3)(cid:79) Presentations and meetings with
(cid:3)(cid:79) Regular employee engagement forum
meetings at the Tharisa Mine
(cid:3)(cid:79) Tharisa newsletters and posters
(cid:3)(cid:79) Tharisa induction and ongoing skills
development training
(cid:3)(cid:79) Company website
(cid:3)(cid:79) Daily supervisor/manager interaction
(cid:3)(cid:79) Ongoing safety training on the
Tharisa Mine
(cid:3)(cid:79) Regular customer meetings
(cid:3)(cid:79) Electronic and telephonic
communication
(cid:3)(cid:79) Customer site visits
(cid:3)(cid:79) Commodity conferences
GOVERNMENT
(cid:3)(cid:79) Tharisa wellness programmes and
(cid:3)(cid:79) Monthly, quarterly and integrated
campaigns
(cid:3)(cid:79) Social media campaigns using
LinkedIn and twitter
LABOUR UNIONS
(cid:3)(cid:79) Union recognition and negotiations at
Tharisa Minerals
(cid:3)(cid:79) Monthly liaison with shop stewards
(cid:3)(cid:79) Regular contact with union leadership
(cid:3)(cid:79) Tharisa Mine labour forum meets
monthly
annual reports to the DMRE
(cid:3)(cid:79) Regular engagement with local and
provincial government and
municipalities
(cid:3)(cid:79) Scheduled and unannounced site
visits by regulators
SUPPLIERS
(cid:3)(cid:79) Procurement policies, tender process
(cid:3)(cid:79) Verbal and electronic communication
(cid:3)(cid:79) Contract terms negotiated and
agreed
(cid:3)(cid:79) Standard contract terms for suppliers
of goods
management
(cid:3)(cid:79) Tharisa Mine site visits by debt
providers
(cid:3)(cid:79) Telephonic and electronic
communication, particularly on
working capital facilities
(cid:3)(cid:79) Annual review of working capital
facilities
ANALYSTS
(cid:3)(cid:79) Roadshows and analyst briefings
(cid:3)(cid:79) Interim and annual reporting
(cid:3)(cid:79) Annual report
(cid:3)(cid:79) Four quarterly production reports
(cid:3)(cid:79) Company website
(cid:3)(cid:79) SENS/RNS announcements
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160 THARISA PLC INTEGRATED ANNUAL REPORT 2020
CORPORATE INFORMATION
THARISA PLC
Incorporated in the Republic of Cyprus with limited liability
Registration number: HE223412
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
REGISTERED ADDRESS
Office 108 – 110
S. Pittokopitis Business Centre
17 Neophytou Nicolaides and Kilkis Streets
8011 Paphos
Cyprus
Postal address
PO Box 62425
8064 Paphos
Cyprus
Website
www.tharisa.com
DIRECTORS OF THARISA
Loucas Christos Pouroulis (Executive Chairman)
Phoevos Pouroulis (Chief Executive Officer)
Michael Gifford Jones (Chief Finance Officer)
John David Salter (Lead independent non-executive director)
Antonios Djakouris (Independent non-executive director)
Omar Marwan Kamal (Independent non-executive director)
Carol Bell (Independent non-executive director)
Roger Davey (Independent non-executive director)
Vaneese Wing Ye Chu (Non-executive director)
Zhong Liang Hong (Non-executive director)
GROUP COMPANY SECRETARY
Sanet Findlay
The Crossing, 372 Main Road
Bryanston, Johannesburg 2021
South Africa
Email: secretarial@tharisa.com
ASSISTANT COMPANY SECRETARY
Lysandros Lysandrides
26 Vyronos Avenue
1096 Nicosia
Cyprus
INVESTOR RELATIONS
Ilja Graulich
The Crossing, 372 Main Road
Bryanston, Johannesburg 2021
South Africa
Email: ir@tharisa.com
FINANCIAL PUBLIC RELATIONS
Buchanan
107 Cheapside, London EC2V 6DN
England, United Kingdom
+44 020 7466 5000
TRANSFER SECRETARIES
Cymain Registrars Limited
Registration number: HE174490
26 Vyronos Avenue
1096 Nicosia
Cyprus
COMPUTERSHARE INVESTOR SERVICES PROPRIETARY
LIMITED
Registration number: 2004/003647/07
Rosebank Towers
15 Biermann Avenue
Rosebank 2196
South Africa
COMPUTERSHARE INVESTOR SERVICES PLC
Registration number: 3498808
The Pavilions, Bridgwater Road, Bristol BS13 8AE
England, United Kingdom
JSE SPONSOR
Investec Bank Limited
Registration number: 1969/004763/06
100 Grayston Drive
Sandown, Sandton 2196
South Africa
AUDITORS
Ernst & Young Cyprus Limited
Registration number: HE222520
Jean Nouvel Tower, 6 Stasinos Avenue
1060 Nicosia
Cyprus
BROKERS
Peel Hunt LLP (UK joint broker)
Moore House 120, London Wall EC 2Y 5ET
England, United Kingdom
+44 207 7418 8900
BMO Capital Markets Limited (UK joint broker)
55 Basinghall Street, London, EC2V 5DX,
England, United Kingdom
+44 020 7236 1010
Joh. Berenberg, Gossler & Co. KG (UK joint broker)
60 Threadneedle Street, London EC2R 8HP
England, United Kingdom
+44 20 3207 7800
Nedbank Limited (acting through its Corporate and Investment
Banking division) (RSA broker)
135 Rivonia Road
Sandown, Sandton 2196
South Africa
+27 11 295 6575
https://twitter.com/tharisa_sa
https://www.linkedin.com/company/8630834/admin/
https://www.youtube.com/channel/UCae5tLPf9W_CK5P024AKFyA
www.tharisa.com