Integrated Annual Report 2015

Transcription

1 Integrated Annual Report

2 CONTENTS IFC Welcome IFC Directors statement of responsibility IFC Forward looking statements 2 Our material issues for Corporate profile and structure 4 About Traxys 5 Key performance indicators 6 Chairman s message 8 How we create value our business model 16 Our strategy 16 Our allocation of resources 18 Chief executive officer s report 20 Operating and financial report 23 Our leadership 28 Corporate responsibility and ethical supply chains 31 Corporate governance 35 Summary of King III compliance 39 Report of the remuneration and nominations committee 41 Report of the social, ethics and transformation committee 42 Basis for preparation and presentation 43 Shareholder analysis 44 Annual financial statements IBC Administration Welcome Welcome to Metmar Limited s integrated annual report for. This is our fourth integrated annual report and, we believe, represents continued progress in our reporting journey. Details regarding the basis of the report s preparation and presentation are provided on page Comments can be sent to Mr Sizwe Nkosi at sizwe@metmar.co.za We trust that you will find this report valuable in enhancing your understanding and appraisal of Metmar and its prospects. We welcome all feedback and criticism that will enable us to improve our reporting in future periods.

3 Directors statement of responsibility The board of directors acknowledges its responsibility to ensure the integrity of the integrated annual report. This report was prepared in accordance with the IIRC International Integrated Reporting Framework and the board believes that it presents fairly the performance of the Group and its material matters. On the recommendation of the audit and risk committee, the board of directors approved the integrated annual report on 26 May. Forward looking statements Certain statements in this document are forward looking. These relate to, among other things, the plans, objectives, goals, strategies, future operations and performance of Metmar Limited, its subsidiaries (the Company, or Group) and its investments. Words such as anticipates, estimates, expects, projects, believes, intends, plans, may, will and should and similar expressions are typically indicative of a forward looking statement. These statements are not guarantees of Metmar s future operating, financial or other results, and involve certain risks, uncertainties and assumptions. Accordingly, actual results and outcomes may differ materially from those expressed or implied by such statements. Metmar makes no representations or warranty, express or implied, that the operating, financial or other results anticipated by such forward looking statements will be achieved, and such forward looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Due to the point-in-time nature of this integrated annual report, Metmar cannot undertake to continuously update the historical information or forward looking statements in this document.

4 2 Metmar Limited Integrated Annual Report OUR MATERIAL ISSUES FOR 2016 Implementing and integrating Traxys Africa (Traxys) take over deal Financial performance, a return to profitability, and generating wealth for shareholders Ramp up delivery volumes in our manganese and chrome off-take agreements Risk and investment management Governance, corporate responsibility and ethical behaviour. Returning to profitability During the financial year Metmar refocused on core trading activities and investments as its strategy for returning to profitability. Our efforts proved insufficient to return the Group to profitability in the period under review, primarily due to further declines in commodity prices and the onset of a liquidity crunch as South African banks and trade finance facility providers became more risk-averse. Some South African institutions were exposed to major commodities fraud in China and the insolvency of a local metals trader that occurred during the financial year under review. These events were outside our control, while our manganese tolling operation at Kalagadi was severely hampered by inefficient transport logistics and the poor quality of the early batches of sinter produced. Combined with falling manganese prices, this key project was unprofitable for most of the financial year. The manganese tolling logistics and quality issues were resolved at the end of the financial year. Metmar and Kalagadi signed a 10-year offtake agreement to uptake 40% of all Kalagadi production, which means the Kalagadi investment will commence generating steady revenue two years behind schedule. The Sefateng Chrome operation received its mining right in the second half of FY. Mining operations commenced in February and are ramping up to reach full production in the 2016 financial year. The first tonnages have already been delivered to the FPT terminal in Maputo port to be loaded into containers and shipped to the customer. For accounting purposes, only Sefateng s and Kalagadi s start-up costs can be reflected for this year, although these operations should generate profitable revenue streams from 2016 onwards. The persisting difficult trading conditions and reducing trade finance facilities meant that Metmar needed a capital injection or investment from an international player with the institutional capacity and reach to remain sufficiently funded thus securing the capacity to keep trade flowing, pay suppliers on time, deliver to customers on time and equip traders to generate more trade flows until the commodities cycle inevitably turns upward. In April Metmar signed a binding implementation agreement with Traxys, a highly reputed international commodities trader with global reach and financial capacity, to acquire 100% of issued share capital of the Company. The full implications of this corporate transaction are discussed further in this report.

5 Metmar Limited Integrated Annual Report 3 CORPORATE PROFILE AND STRUCTURE Metmar is an established commodities trading business based in South Africa. Listed on the Johannesburg Stock Exchange (JSE), we operate on six continents and in 44 countries through a network of agents and associates. At 28 February, our market capitalisation approximated R217 million. We specialise in the international trade of ferrous and non-ferrous metals and minerals, coal/carbon, plastic raw material and chemical products, with strategic suppliers and customers. The search and identification of further trading opportunities to diversify our product range continues. The board consists of three independent non-executive directors, two non-executive directors and three executive directors. Details of individual directors and their abbreviated résumés appear on pages 23 and 24. Our operating structure consists of two closely integrated business units: Metmar Trading Metmar Investments. With nearly three decades of experience behind it and built on the supply of commodities, Metmar Trading Proprietary Limited is the core of the Group s business, generating nearly 98% of Group revenue. The Trading business unit employs 34 personnel from a Group total of 103. Responsibility for the day-to-day trading activities of Metmar Trading is distributed between two of the Group s Trading executive directors, based on their commodity and geographic experience. Metmar Investments and Resources Proprietary Limited manages our longer-term approach to securing the supply of commodities. Investment and funding agreements are concluded with the specific intention of establishing long-term supply arrangements for commodities that can feed into our Trading business. Investments are not speculative in nature and are based on sound investment criteria and due diligence. Our portfolio of investments is managed by a senior executive. Metmar Limited Group structure Ultimate holding company and JSE-listed entity Arengo 203 Proprietary Limited Metmar Investments and Resources Proprietary Limited Metmar Trading Proprietary Limited Alphamin Resources Corporation (66,7%) (100%) (100%) (5 million shares) Kalahari Resources Proprietary Limited Eastern Belt Chrome Mines Proprietary Limited Other non-core investments Metmar Mauritius Limited Mauritius (11,6%) (100%) (100%) Kalagadi Manganese Proprietary Limited Bolepu Holdings Proprietary Limited Steelpoort Chrome Mines Proprietary Limited FPT Mineral Terminal Limitada - Mozambique Alphamin Resources Alphamin Corporation Resources Corporation (40%) (49,9%) (51%) (26%) (5 million (5 shares) million shares) Sefateng Chrome Mine Proprietary Limited (40%) Note: The above Group structure excludes investments held-for-sale and dormant companies Subsidiaries of the holding Company and fellow subsidiaries Listed core financial assets Unlisted core financial assets Core investments in associate companies

6 4 Metmar Limited Integrated Annual Report CORPORATE PROFILE AND STRUCTURE continued Corporate developments after year end During the period under review, Metmar faced considerable difficulty in raising trade finance due to the growing scarcity of liquidity in the market for commodity transactions. As a result, we sought out an international partner with the resources that Metmar requires to continue trading profitably. On 30 April, Metmar signed a scheme of arrangement for Traxys to acquire all Metmar Limited shares. Once all due processes are completed, Metmar s corporate structure will inevitably be amended to merge with Traxys. The Traxys binding offer requires the approval of Metmar Limited s shareholders; therefore, a special general meeting of shareholders is planned for early July. The normal regulatory compliance process is running in parallel and expected to conclude in September, after which the Metmar Group should be 100% owned by Traxys. The benefits of a Traxys takeover of Metmar will be to: increase the funding pool and reduce cost of funding through economies of scale; enhance Metmar s trade financing through access to committed and uncommitted facilities in several major currencies; improve diversification and access to international markets; facilitate access to private equity funding for developing and operating core investments; increase the pool of trading and management skills; and facilitate the consolidation of resources and synergistic benefits. Milestones achieved to date in the Traxys transaction Deteriorating trading conditions and a clearly nervous banking fraternity raised the possibility of a liquidity crunch, which prompted management to proactively request the board to approve a decision to recapitalise Metmar through an equity injection, or by partnering with a reputable international player that has access to a reserve of trade finance facilities. The board decided that an equity injection would severely dilute shareholder interests, given the mediocre share price against previous levels. At the same time executive management commenced renegotiating existing facilities and seeking out new trade finance facilities, while also evaluating a shortlist of potential suitors to invest in Metmar. By the end of September, the list of potential investors had narrowed down to Traxys. Metmar issued the first of three cautionary notices and intense negotiations commenced late October. A due diligence exercise began in November and culminated in Traxys presenting a non-binding offer in early December, subject to certain pre-conditions being met. Fulfilling these pre-conditions proved time-consuming and at the same time an independent expert was commissioned to evaluate whether the Traxys offer is fair and reasonable. The consultant s report was positive, therefore the final binding offer was signed and a firm intention announced to the market on 30 April. In essence, the agreement is for Traxys to acquire 100% of Metmar s shares listed on the JSE through a scheme of arrangement in terms of section 114 of the Companies Act 71 of 2008, as amended, subject to approval by Metmar Limited shareholders and regulatory compliance. These processes are expected to conclude by September. About Traxys Servicing raw materials industries From exploration to mining to marketing, Traxys offers financial and logistical solutions for the ferro alloy, metal, mineral, mining and energy industries. Traxys is a privately owned corporation with Carlyle Group as a major shareholder. Its head office is in New York. The company employs over 300 people and generates an annual turnover of more than US$6 billion. It conducts business through 20 offices strategically located around the world. In South Africa the corporation operates through a wholly owned subsidiary, Traxys Africa Proprietary Limited, which is based in Rosebank, Johannesburg. Traxys has a clear mandate and the balance sheet to develop the corporation s African interests. Traxys focuses primarily on the marketing and sourcing of base metals and concentrates, metals, industrial minerals and chemicals, as well as materials for steel mills and foundries. In so doing, Traxys can manage all parts of the supply chain, from producer to consumer, anywhere in the world. By acquiring Metmar, Traxys will significantly grow its presence in the African commodity market. Traxys management The executive management and traders of Traxys are internationally reputed for their deep insight and experience in global commodities. Services The marketing and trading services offered by Traxys cover virtually every point along the supply chain: Off-take agreements Market support Agencies Logistics Hedging Credit risk coverage and insurance Trade finance. Products Traxys provides seamless solutions for supplying and accessing raw materials such as: Base metals and concentrates Materials for steel mills and foundries Minor and alloying metals Industrials minerals Energy uranium Rare earths. Investments Traxys Projects, L.P. offers a full range of financial and commercial solutions for mining and other production projects anywhere in the world. These include any combination of: equity finance; debt finance; buyouts; and marketing and trading.

7 Metmar Limited Integrated Annual Report 5 KEY PERFORMANCE INDICATORS Volumes Kt 841,4 731,4 696,4 898,9 594,0 Revenue Rm 1 951, , , , EBITDA/(LBITDA) Rm (32,6) 40,4 (34,1) 165,2 112,2 (Loss)/earnings before taxation Rm (142,2) (165,7) (146,6) 108,1 70,1 Basic (loss)/earnings per share Cents (54,6) (60,9) (39,5) 34,5 22,2 Headline (loss)/earnings per share Cents (65,1) (17,6) (31,6) 34,1 23,1 Distribution per share Cents 16,5 11,0 Net asset value per share Cents 109,9 165,5 241,1 277,5 261,8 Net tangible asset value per share Cents 91,8 147,4 184,9 210,8 235,2 Current ratio 0,9 1,0 1,2 1,2 1,5 Quick ratio 0,4 0,5 0,6 0,9 1,1 Debt:equity ratio % 76:24 72:28 61:39 65:35 55:45 Share price opening Cents Share price closing Cents Market capitalisation Rm 216,5 414,3 481,2 578,8 976,3 Number of shares in issue m 267,3 267,3 267,3 232,4 232,4 Volumes (kt) Revenue (Rm) Distribution (cents per share) 594,0 898,9 696,4 731,4 841, , , , , ,3 11,0 16, Headline (loss)/earnings per share (cents) Basic (loss)/earnings per share (cents) 23,1 34,1 (31,6) (17,6) (65,1) 22,2 34,5 (39,5) (60,9) (54,6) 11 Profit 12 Profit 13 Loss 14 Loss 15 Loss 11 Profit 12 Profit 13 Loss 14 Loss 15 Loss

8 6 Metmar Limited Integrated Annual Report CHAIRMAN S MESSAGE Dear Metmar stakeholder Perfect storm For the last few years your Company has been in a perfect storm as a series of unrelated negative events and circumstances have converged upon it. This storm has worsened throughout the past year and the Company has reported a loss after tax of R147 million. While much of this storm relates to external factors beyond the immediate control of your Company, its ability to withstand the storm s forces have been weakened by the impact that past strategic decisions have had on its balance sheet. Curate s egg the good, bad and ugly In many ways your Company is like the proverbial curate s egg. The good core Trading component of Metmar has remained strong and, despite the impact of lower commodity prices and volumes, this division continues to generate positive earnings. The balance of the business, its strategic investments in the bad have proved a costly departure from the Company s core trading competence, and resultant losses and impairments have weakened Metmar at the very time in the commodities cycle when it can afford it least. Finally, Metmar support for the manganese tolling the ugly has been beset by a litany of costly delays, technical challenges and price weakness. Core Trading contributed R74,5 million (: 145,5 million) towards the Group margin but incurred a small loss of R16,4 million (: profit of R50,3 million) after associated finance costs, overheads and taxation. The major factors leading to reduced earnings were lower commodity prices and margins, a deteriorating product mix, increased unrealised foreign exchange differences, and limits to available trade finance. New and prospective trading opportunities and relationships, however, were established during the year, especially in chrome, coal and consumer soft commodities, which augurs well for the future. In addition, the long-awaited manganese sinter trading should finally commence in FY2016. By contrast, the strategic investments made by your Company in years past have generally failed to meet expectations. While the strategic objective of making selected investments to generate future locked-in trading rights is clear and self-evident, the skills required to execute this strategy successfully were foreign to Metmar s core capability. This weakness was exacerbated by the strategy being pursued at the top of the super-cycle bull market, with attendant pricing pressures and irrational exuberance. For the last two years your Company has sought to tidy up and end this misadventure. The cost of these failed strategic investments in impairments and realised losses in the last three years alone amount to R232 million. Finally, the Kalagadi Manganese project has stretched Metmar s funding capacity to an extent neither envisaged nor planned. For myriad reasons the Kalagadi project, incorporating the mining operation, the sinter plant and associated logistical solutions, has been delayed, with production and rail of sinter manganese scheduled to start in a meaningful manner only in mid-. In 2012 Metmar procured manganese and coke fines on risk to facilitate the early commissioning of the Kalagadi sinter plant via a toll treatment arrangement. The inordinate period of project delays has regretfully seen significant declines in manganese ore and sinter prices, which have materially reduced the envisaged tolltreatment margins. Although it is still likely that the manganese and coal fines stocks will be profitably converted over the next 12 months, the R360 million trade finance supporting this project has critically weakened the Group s remaining facilities. While direct finance holding costs of this support amount to R36 million for this financial year alone, total indirect costs have also been material. Long-term benefits It must be clearly stated, however, that Metmar s management, in securing long-term off-take trading arrangements for both Kalagadi and Sefateng Chrome, has delivered major shareholder value to Metmar. The future value that these contracts represent far exceeds the impairments and costs associated with the entire strategic investments programme and the costs of supporting the Kalagadi project commissioning. Regrettably, our current accounting system conventions do not recognise the mediumterm value thus created, while financiers and analysts are presently focused only on the associated short-term costs. Trade finance Access to trade finance is the very lifeblood of any commodity trading organisation. During the past year, the availability of trade finance tightened both locally and internationally. In addition to R360 million being committed to financing manganese and coke fines for Kalagadi, Metmar faced the withdrawal by certain of its trade finance providers from the South African market, while other traditional providers lowered their trade finance facilities. This was mainly triggered by events unrelated to Metmar. In essence, Metmar s core commodity trading activities were curtailed by the restricted availability of trade finance and this situation is unlikely to improve in the near future.

9 Metmar Limited Integrated Annual Report 7 The Traxys offer On 30 April, Metmar announced that Traxys, an international trading organisation, had issued a firm but conditional intent to make an offer for all Metmar shares at R1,10 per share by scheme of arrangement. The offer of R1,10 represents a significant premium to the traded market price of your Company, both at the time of the announcement and relative to the time when cautionary announcements in this regard were first published. A circular to shareholders explaining this offer will be mailed on or about 1 June and a general meeting of shareholders to vote thereon is scheduled for 2 July. This Metmar announcement also noted that the independent board convened under the Companies Act 71 of 2008 and comprising Rob Still, Dawn Earp and Luigi Matteucci, has considered the terms of the proposed transaction and the report of the independent expert and has concluded that the proposed transaction is fair and reasonable. The Metmar announcement also reported that shareholders holding over 52% of the total issued shares of the Company, which included all executive management, had irrevocably accepted the Traxys offer. Given that the fundamental core trading business of Metmar remains solid and that the investment in the Kalagadi Manganese and Sefateng Chrome projects are poised to begin bearing fruit, one may be tempted to reject the Traxys offer as being inadequate. This would be understandable. Indeed, a materially higher consideration had been agreed with Traxys late in, subject only to the signing of the Kalagadi off-take agreement. Regrettably, the inordinate fivemonth delay in finalising this agreement was characterised by a further significant deterioration in manganese prices and tightening of trade finance facilities. This unavailability of adequate trade finance has tipped the balance decisively towards accepting the Traxys offer. It has been suggested that a recapitalisation of the Metmar balance sheet via a rights offer may have been preferable to the Traxys offer. Your board has concluded that even with a strengthened balance sheet and improving core trading, the ongoing appetite and requisite skills of the local banking system to supply trade finance have materially reduced, making viable commodity trading impossible. Finally, certain major Metmar shareholders are now deploying their considerable skills and capital in offshore ventures and may not have been prepared to back this rights issue. 15% increase in traded volume. Appreciation As a consequence of his deteriorating health, Greg Lotis resigned as an executive director of Metmar with effect from 28 February. A founding director and key executive, Greg is missed. We all wish Greg well in tackling and overcoming his health challenges. As a new director of Metmar since May and, given the difficult circumstances that the company has endured, I am extremely appreciative of the advice, counsel and assistance offered by my fellow board members. Finally, a word about your chief executive David Ellwood and all Metmar staff. I have learnt to appreciate their entrepreneurial flair and deep expertise in commodity trading. They have all gone the extra mile and more to overcome the perfect storm your Company has endured in the past three years. Now, they may well have succeeded. Rob Still Chairman 29 May

10 8 Metmar Limited Integrated Annual Report HOW WE CREATE VALUE OUR BUSINESS MODEL VISION To be a leading international commodity trading business, supported by finance, logistics and strategic investments to secure future marketing opportunities. MISSION To create sustainable long-term stakeholder value through operational excellence and the efficient management of our comprehensive international trading business, while unlocking the value of strategic sources and investments. Other stakeholders Warehouse Insurance providers Banks INPUTS Government Human capital Financial capital Human capital Social capital Intellectual capital Off-take agreements Trade finance providers COMMODITIES Logistics providers Legislation Relationships Commodity prices Investments Supply agreements Shareholder investors Customers Other stakeholder

11 Metmar Limited Integrated Annual Report 9 VALUES Integrity Metmar conducts business in a principled and truthful manner. Relationships Metmar is a relationshipdriven business steered by a long standing, global network of contacts which is sustained by respect for diversity and trusted partnership. Reliability Metmar values reliable supplier relations and offers consistent supply chain solutions to clients, ensuring on-time delivery within cost parameters. Efficiency Metmar believes in the meticulous and efficient execution of work when dealing with customers, clients, suppliers, shareholders and all relevant stakeholders. OUTPUTS Relationships Tonnage sold Return on investment Compliance OUTCOMES Wealth Inputs into industry economy Satisfied customers Shareholder returns Employee returns Governance Adding value Metmar does not simply buy and sell commodities, but adds value in the supply chain through administration excellence, risk mitigation, quality service delivery and business continuity. Balance Metmar follows an approachable leadership style.

12 10 Metmar Limited Integrated Annual Report HOW WE CREATE VALUE OUR BUSINESS MODEL continued Trading As one of only two diversified trading companies listed in Africa, Metmar has built unrivalled continental expertise and has become a gateway for imports and exports, funding, and logistics solutions. The Group is structured to enable our committed and experienced team of traders to focus on and deliver in the trading side of the business. Commodity trading is a cyclical business; therefore, positioning Metmar for the next global economic upswing is a strategic imperative. COMMODITIES CONTRIBUTION CONTRIBUTION TO REVENUE (%) CONTRIBUTION TO PROFIT (%) 0% 1% 7% 7% 0% 1% 7% 27% 37% 48% 16% 49% Chemicals FMCG Plastics and rubber Non-ferrous alloys Carbons Ferroalloys Chemicals FMCG Plastics and rubber Non-ferrous alloys Carbons Ferroalloys COMPOSITION OF TRADING COMPOSITION OF REVENUE (%) 0% 1% 7% 7% 37% 48% COMPOSITION OF TRADING PROFIT (%) 50% 3% 22% 25% 49% 0% 14% 37% Exports Imports Local sales Merchanting Exports Imports Merchanting Local sales

13 Metmar Limited Integrated Annual Report 11 Our core investments Kalahari Resources EBCM: Steelpoort Chrome Mine Alphamin Resources FPT Mineral Terminal EBCM: Sefateng Chrome Mine 11,6% interest holds 40% of the shares in a recently established manganese project in the Northern Cape province of South Africa 51% interest a brownfields chrome project in the Limpopo province of South Africa 3% effective interest a greenfields tin project in the Democratic Republic of Congo 26% interest a containerisation facility at the Maputo port in Mozambique 20% effective interest a producing chrome mine in the Limpopo province of South Africa

14 12 Metmar Limited Integrated Annual Report HOW WE CREATE VALUE OUR BUSINESS MODEL continued Investments Recognising that the security of the supply of underlying commodities is central to profitable trading, Metmar Investments and Resources was established to house investments and to secure marketing opportunities for key commodities. As trading becomes ever more competitive, increasing our mining and metals investment portfolio will feed growth in our trading volumes. Managing our supply chain and exceeding customer expectations We strive to build long-term relationships with all of our suppliers and continually look for opportunities to establish strategic partnerships with suppliers by providing trade finance and, where appropriate, equity funding. These partnerships are designed to provide the underlying project with access to funding and a marketing channel for its products. The strategy will be stepped up once the implementation agreement with Traxys has been fully approved. As important as supply is, customers are the reason for our existence. Customers expect us to continue to deliver unparalleled and cost-efficient service through logistics chains that can be lengthy and complex. Once again, sound relationships with customers and logistics providers enable us to exceed these expectations. Metmar opened a dedicated office in Shanghai, China, in January. Operating through our own office rather than agents has proven invaluable in getting closer to customers and monitoring deliveries into China. Managing risk Central to our strategy and objectives is our ability to identify and manage risk. The nature of our business carries inherent risk. Our ability to manage diverse risks is founded on: robust risk management practices that are consistently applied and monitored, and regularly measured against global best practice; and a thorough understanding of different geographic and commodity markets. Primary Group risks are commodity prices, foreign exchange, credit and liquidity risks. Each country and/or commodity presents its own specific risks. Metmar manages country risks through continual environmental scanning to stay abreast of issues that may impact on countries in which we trade and invest. We invest only in conjunction with other reputable shareholders, and build strong relationships with the relevant government authorities. Our business practices are based on the utmost transparency and we subscribe to ethical business conduct in all countries we do business in. More information regarding our management of risk and our identified residual risks is provided in the governance section from page 31. The report of the audit and risk committee appears on pages 46 and 47. Details of our financial risk management are provided in note 47 to the annual financial statements.

15 Metmar Limited Integrated Annual Report 13 VALUE ADDED STATEMENT 28 February Rm 28 February Rm Revenue from all operations Paid to suppliers for material and services (1 947) (2 003) Value added from Trading 4 94 Income from investments* 8 1 Total value created Value distribution Employees Capital providers Finance costs Dividends to equity holders of the company Payments to minorities Central and local government 8 20 Company taxation 7 19 Secondary tax on companies Skills Development Levy 1 1 Corporate social investment (CSI)** Reinvested in the Company to maintain and develop operations (128) (46) Depreciation and amortisation Loss attributable Equity holders of the Company (146) (163) Other outside shareholders (1) (20) Deferred taxation (3) (24) Total value distributed Value added statistics Number of employees*** Revenue per employee (Rand) 18,9 19,4 Value created per employee (Rand) 0,1 0,8 Corporate social investment percentage of profit after tax * Income from investments includes interest received and share of associate profit or loss ** CSI includes social upliftment projects *** Average number of permanent Group employees throughout the year

16 14 Metmar Limited Integrated Annual Report CORPORATE PROFILE AND STRUCTURE continued

17 Metmar Limited Integrated Annual Report 15 KEY PERFORMANCE INDICATORS 15% increase in traded volumes CORPORATE DEVELOPMENTS TRAXYS AFRICA A CONDITIONAL OFFER TO ACQUIRE 100% SHARE CAPITAL OF METMAR LIMITED THROUGH A SCHEME OF ARRANGEMENT SUBJECT TO SHAREHOLDER APPROVAL AND REGULATORY COMPLIANCE APPROVALS.

18 16 Metmar Limited Integrated Annual Report OUR STRATEGY Strategic priorities To develop a strong international resources trading business To secure meaningful investments in support of cost-effective long-term off-take agreements. Business objectives: Metmar aims to create wealth for shareholders and other stakeholders through trading opportunities and investments. Our business objectives are to: create value and wealth for shareholders, employees and other stakeholders through profitable commodity trading; generate revenue through securing the supply and subsequent trading of ores, alloys, carbons, plastics, and chemicals; identify sound investments and projects within our risk parameters (these should preferably be long-term engagements); build a sustainable business based on strict risk management; continually identify new sources of supply; invest wisely in commodity projects and be a respected finance and logistics facilitator; secure flexible finance facilities to create competitive advantages; gain sustainable long-term off-takes through longstanding relationships and investments; and provide an efficient service to both consumers and producers of various commodities, at any point in the supply chain. Our allocation of resources Key inputs to our business model are the following four capitals or resources: financial, intellectual, human and relationship capital. The remaining two capitals identified by the IIRC are natural and manufactured, neither of which represents a significant input into our business model. Financial capital Our financial capital, represented by shareholder funds and trade finance facilities, is applied through both the Investment and Trading business units. Control of financial capital rests with the executive committee and the chief financial officer. The audit and risk committee, per its terms of reference, may also seek any information regarding the financial affairs of the Company. Financial capital is applied in the business model to facilitate profitable business through: acquiring commodities and products for resale; raising debtors in the process of selling commodities and products; meeting day-to-day operating expenditure; facilitating and advancing trade finance and/or credit to suppliers of commodities or products; and investing in strategic investments to secure profitable supplies of commodities and products. Intellectual and human capital Metmar s intellectual capital is held within the organisation through its employees (human capital) extensive knowledge of commodities and geographies. This knowledge has been built up over three decades and represents a significant institutional resource. We obtain additional knowledge and experience through a defined recruitment process and by paying above market-related remuneration. Retaining, developing and growing intellectual capital is a priority, with training provided to continually develop employees in their roles at Metmar. The combination of fixed and variable pay is an important element in retaining employees. Details of the basis of remuneration are provided in the report of the remuneration and nominations committee on pages 39 and 40. Human capital is applied in areas of the business where it is most suited and promotes value creation. This is not to say that employees are pigeonholed. Rather, employees often rotate between various positions to broaden their general knowledge of commodities and investments and ultimately increase their value to Metmar. Relationship capital We value our relationships with all our stakeholders. Details of our approach to stakeholder engagement are provided in the section on corporate responsibility and ethical supply chains commencing on page 28. Our long-term relationships with suppliers and customers lead to value creation. Maintaining these relationships is the responsibility of everyone at Metmar through exceeding expectations and engaging with suppliers and customers to identify and respond to their unique needs. In many instances these relationships are formalised through various off-take, supply and marketing contracts. The proposed scheme of arrangement with Traxys will vastly broaden Metmar s relationships with stakeholders, albeit indirectly in many instances. Metmar will merge with the current Traxys to engage with the Group s African stakeholders.

19 Metmar Limited Integrated Annual Report 17

20 18 Metmar Limited Integrated Annual Report Chief executive officer s report Dear Shareholders This year was characterised by a sequence of events in the commodity trading market that placed most commodity traders under pressure and resulted in well-known competitors being liquidated. Commodity prices continued to slide, with iron ore falling by more than 50% and manganese close to 50% in less than a year. Metmar did benefit to an extent from the Rand s weakening against the US Dollar, but not nearly enough to compensate for the weaker prices. I personally believe that the commodity cycle is close to the bottom, but anticipate minimal improvement before Q4. Nevertheless, general consumption is ticking up again in the USA and Europe, with commodities requiring real consumption to have an impact on the current oversupplied scenario. Metmar s biggest challenge this year was the availability of trade finance lines, as was experienced by many of the smaller trading operations. Some local and international financial institutions are re-evaluating commodity trade finance as an asset class, particularly after the massive aluminium fraud uncovered last year in China. It emerges that there are similar scandals emerging in other commodities linked to China. While the authorities are investigating, the banks are looking to distance themselves from increased exposure. The financing of our existing business has been a major challenge over the past eight months. It became clear to management a year ago that if we were to compete on an international basis we would need to align ourselves with an international platform with access to international trade lines to provide the firepower we would need to compete with the majors. After extended months this has resulted in the firm intention offer from Traxys on 30 April. The Kalagadi Manganese project After a delayed start, the Kalagadi sinter plant commenced production in February and during the period was able to produce tonnes of manganese sinter. This material was predominantly exported to China and South East Asia. We experienced excessive fines upon discharge of the material and a decision was taken to stop production until the results of extensive tests were final. We have all the technical solutions and are ready to produce as soon as the rail has been commissioned. Unfortunately, the price of manganese has weakened over the period, as have iron ore prices. At the current price levels achieved, transporting the sinter with a road component no longer makes commercial sense, hence the requirement for the rail commissioning, which is almost complete. Metmar has signed a 10-year off-take agreement with Kalagadi for a minimum of 40% of its annual production, which means that, after some technical challenges over the past two years, we should be able to rely on a consistent and profitable stream of manganese sinter for export. Sefateng and FPT start moving chrome exports Metmar had also invested into the Sefateng Chrome Mine near Steelpoort, which commenced production and delivered its first consignment of tonnes in March. We expect production to ramp up to tonnes a month. FPT Minerals Terminal in Maputo, Mozambique, in which Metmar holds a 26% share, is now operational, with the first chrome exports sent through this facility. When the nearby Steelpoort Chrome Mine (51% owned by Metmar) has completed licensing requirements, its export tonnages will also be loaded via the Maputo facilities. The delays in getting Sefateng through the regulatory processes required longer-thananticipated funding commitments, without the revenue stream associated with production. The Traxys agreement After 30 years as an independent commodity trader, we came to realise that without access to significantly increased trade lines it would be impossible for us to organically expand our business into a global player. As a result, Metmar entered discussions with Traxys, a private equity owned trading house based in the USA with US$6 billion in annual sales. Through major shareholders such as the Carlyle Group and Moore Capital Management, Traxys has access to committed credit lines and trades through

21 Metmar Limited Integrated Annual Report offices around the world, focusing primarily on the sourcing and marketing of base metals and concentrates, minor and alloying metals, industrial minerals and chemicals. Our respective management teams are similarly conservative; Traxys operates through a dynamic group of individuals and the synergies between the two companies is potentially enormous. The two companies are a natural fit, with Metmar able to provide additional, experienced African feet on the ground, with local trading experience. Traxys provides the leverage and support for Metmar to enter into opportunities that we have identified but lack the financial backing to exploit. At the time of writing this report, the agreement between Metmar and Traxys is undergoing the process of being ratified by shareholders and regulators. Nevertheless, we have worked with the hand we have been dealt and, by tying in with Traxys, have arrived at what I believe is the most equitable solution for all at this time. To all our shareholders, colleagues and employees, I thank you for many years spent in your company. Your contribution has been pivotal in Metmar s long history, and in building our reputation for excellent customer service under the trying circumstances of the past few years. David Ellwood Chief executive officer 29 May A last word The last three years have been difficult for Metmar and our loyal shareholders that backed us through the tough times. Close to three decades of consistent profits were curtailed by the sharpest commodity downturn of recent times and an unpredictable series of events that have impaired asset values or delayed the anticipated revenue streams from the same investments.

22 20 Metmar Limited Integrated Annual Report OPERATING AND FINANCIAL REPORT Key focus area results Nearly 98% of the Group s revenue is generated by the Trading division. The following table provides an analysis of the Group s profit or loss after tax by business unit for the current and prior year: Divisional analysis R million R million % change Core Trading activities (18) 50 (132) Toll conversion (38) (16) (145) Discontinued operations (22) 100 Investments (81) (140) 42 Intercompany and eliminations 12 (55) 122 Group loss after tax (147) (183) 20 Trading The Trading business unit performed below expectations in FY due to lower volumes, combined with depressed commodity prices, negatively impacting both revenue and margins. While on the face of it total volumes are 15% higher than last year, this result includes the tonnes of manganese sinter shipped in the early part of the year. When setting the marginally profitable sinter tonnage aside, volumes in FY declined by 10,5% compared with FY. This like-on-like decline in volumes resulted from reduced supply due to low commodity prices and decreased demand as Chinese growth slowed, all exacerbated by the banks reducing their trade finance facilities. As per the adjacent diagram, trading volumes fell in all product groups apart from carbon and manganese. Internally, the intense focus on finalising the Traxys agreement prompted experienced traders to depart, which contributed to the lower performance. The fall of over 50% in the indexed iron ore price caused iron ore producers to temporarily halt their operations. The volume of manganese delivered reduced following supplier restrictions with regard to markets that we can participate in. On the other hand, the manganese sinter from the toll agreement is expected to fill this unplanned decrease and potentially more than double the manganese product group trades going forward. Carbon volumes increased on the back of the off-take agreements signed during the current year. These agreements are expected to more than double volumes in the 2016 financial year. Overall, Metmar Trading increased its total traded volumes, despite the challenging resources cycle over the past five years, due to its ability to diversify into a variety of commodities, confirming its positive reputation in the market and its ability to exploit opportunities. Trading Non-ferrous Carbon Chrome Manganese Iron ore Magnetite Other Despite a 15% increase in sales volume, the Group s gross revenue decreased by 7% due to declining commodity prices and changes in the product mix. The 9% weakening in the value of the Rand compared to the US Dollar was not significant enough to offset the general reduction in commodity prices. The average Rand/tonne commodity price of our basket decreased 25% during the year. If the impact of the exchange rate rise was excluded, the price per tonne decreased by 34%. Gross margin declined from 6,4% in FY to 4,3% in FY. This 33% decline in margin was mainly due to the fall of commodity prices quoted in US Dollars, while most of the Rand-based cost of sales remained constant. This is especially true for manganese sinter, for which the input costs were already incurred, yet inland logistics costs did not decline in line with the reducing manganese price index. While cost control remained tight during the year, the 6,7% increase in operating expenses follows the unplanned and uncontrollable costs of care and maintenance in the FPT Minerals Terminal. These were due to delays in chrome deliveries and higher unrealised losses from 3% 5% 41% 13% 12% 16% 24% 23% 14% 19% 2% 5% 4% 5% foreign exchange differences as a result of reduced US Dollar denominated debtors. Creditors remaining showed an insignificant decrease. Significant overheads such as staff costs remained constant, meaning that on a real cost basis these decreased year on year. Financing costs increased significantly due to the lengthy delays in liquidating manganese sinter-related input materials. This resulted from the temporary shutdown of the sinter plant due to low manganese indexed prices and costly road-based inland logistics, meaning that sinter would be sold at a loss. PERCENTAGE CONTRIBUTION TO VOLUMES (OUTER) VS (INNER) Non-ferrous Carbon Chrome Manganese Iron ore Magnetite Other 21% 6% 14% 24% 6% 6% 4% 3% 12% 27% 41% 15% 19%

23 Metmar Limited Integrated Annual Report 21 Overall the Trading division incurred a loss before tax of R66,0 million (: profit before tax of R50,5 million). Tolling During the year tonnes of sinter were produced through the sinter toll agreement. Of this amount tonnes were loaded out of plant to be transported to customers and tonnes were sold to customers during the FY period. The majority of the product was exported to China, with the remainder sold locally and to Europe. Sinter sales generated R350,5 million turnover and 1% gross profit due to decreased manganese indexed prices and expensive inland logistics. The prices paid in China were further discounted due to the fines percentage being significantly higher than the customer s specifications. This excess fines problem was identified and resolved before the end of FY. The inland logistics model we used handled the material excessively, causing it to break up. The initial manganese ore being processed did produce a high-strength sinter, but would generate excessive fines within six weeks. Going forward, handling of the material will be reduced significantly due to a switch to rail inland transport from the completed rail siding at Kalagadi Manganese. The manganese pot test conducted at three independent locations and completed in January provided conclusive proof that the existing manganese ore needs to be blended with material from other already identified sources to significantly improve material strength. Most importantly, the pot test proved that the Kalagadi Manganese mine ore is far superior to other sources, which proves that once the Kalagadi mine starts producing we are unlikely to have sinter quality problems. Overall, the toll agreement returned a loss of R38 million due to a low manganese indexed price and high finance charges. The sinter plant delays, resolution of fines generation issues and completion of the rail siding have resulted in sinter raw materials, which are financed through trade finance facilities, not liquidating as intended. Investments While the Group s focus was on trading activities our investments provided some notable successes in the financial year. Following the aggressive write-down of investments in, there were no further write-downs in FY. We were able to write up the Sefateng Chrome investment, as explained further in this commentary. Investment name Valuation R million Description Basis Write up/(down) R million Alphamin Resources 20,63 Greenfields project in the DRC Mark to market (17,00) FPT Minerals 5,41 Containerisation facility, Maputo port, Mozambique Cost (1,89) Kalahari Resources 192,90 Brownfield manganese project in the Northern Cape province, RSA DCF Sefateng Chrome Mine 56,20 Mining project in the Limpopo province, RSA DCF 27,40 Sefateng Chrome Mine intangibles 5,92 Mining project in the Limpopo province, RSA DCF Steelpoort Chrome Mine 32,97 Greenfields chrome project in the Limpopo province, RSA DCF Pering Base Metals 1,00 Brownfield zinc and lead project in RSA Liquidation value SA Metals Equity 8,00 Greenfields pig iron project in RSA Purchase cost 323,03 8,51 Kalahari Resources (11,66% interest) Metmar signed a 10-year manganese take-or-pay off-take agreement with Kalagadi Manganese, an investment 40% owned by Kalahari Resources. The off-take tonnage signed for is 40% of Kalagadi s production, although Metmar is in discussion with the other Kalagadi shareholders to increase off-take tonnage. Pricing is formulabased and driven by the manganese indexed price obtainable from the metal bulletin. Metmar will receive a commission calculated from the indexed price. The pricing formula will be reviewed and updated annually to ensure that it is practical and beneficial to both parties. Mining is expected to commence in the second half of the calendar year, pending the second payment of a US$100 million senior loan by the African Development Bank. The mine is expected to ramp up to full production of 2,4 million tonnes a year in The sinter plant commenced producing saleable product during FY and produced tonnes of sinter over a four-month period. Production was halted due to the poor quality of material produced, the rail siding not being completed, and falling manganese prices. These issues have been resolved to enable the sinter plant to start production in June, although profit margins will remain low until manganese prices rise. Sefateng Chrome Mine (effective 20% interest) The 30-year mining right was awarded to Sefateng Chrome Mine (Sefateng) in July, followed by the signing of the off-take agreement with Metmar Trading (a subsidiary of the Group) to purchase all opencast produced material. Up to tonnes per annum can be produced without upgrading the current mining infrastructure. Opencast mining will continue between three and five years, after which the mine will go underground. Sefateng is already working on various models to extend the mining plan for the underground operations. Discussions are underway with Sefateng to reach an agreement on its underground production. Following the mining right award, Sefateng commenced mining activities in January and produced tonnes in February, followed by tonnes in March and tonnes in April.

24 22 Metmar Limited Integrated Annual Report OPERATING AND FINANCIAL REPORT continued The award of the mining right enabled Metmar to reverse the investment impairment recorded in the financial year. Steelpoort Chrome Mine (effective 51% interest) The Group holds a 51% interest in the smaller Steelpoort Chrome Mine nearby. This opencast operation has not commenced operations as it has not yet received its water use licence, which is expected in nine to 12 months. The mine has all other regulatory approvals and appropriate infrastructure, therefore can start mining relatively quickly. FPT Minerals (effective 26% interest) FPT Minerals (FPT) owns and operates a specialist minerals containerisation facility in the vicinity of Maputo. The terminal received its first chrome parcel in March following a year without operational demand. The terminal has a capacity of tonnes, which can increase through infrastructure upgrades. Alphamin Resources (effective 3% interest) The project owns the Bisie high-grade tin project in the Democratic Republic of the Congo (DRC). Exploration activities are returning encouraging results and the maiden resource estimate is being used to establish a preliminary economic assessment. This should be released during. Non-core investments The list of non-core investments has been reduced to Pering Base Metals (Pering) and SA Metals Equity. The list of potential investors for Pering has been narrowed down to one candidate with the resources to fund a restart of production. SA Metals Equity has completed a bankable feasibility study and is now in final negotiations on where to locate the project and its feedstock. The Afarak investment and the property, plant and equipment reported as non-core in FY were disposed of in FY. The Tufflex Plastics (Tufflex) investment was restructured and new 50% shareholders were brought in to manage the business. Tufflex has returned to profits, therefore Metmar is retaining and supporting its investment. Other non-core investments such Metmar Speciality Metals and Clay Fusion technologies will be made dormant once the inter-group loans are cleared. Metmar did not made any further investments in FY. In future, identified opportunities will be funded through Traxys once the deal is unconditional, or will be considered only if they are fully fundable on their own merits. Balance sheet The net asset value per share (NAV) reduced by 34% to 109,8 cents (: 165,5 cents) in FY. The attributable loss of R143 million significantly contributed to the decline in NAV per share, as well as the 22% reduction in total assets to R1,22 billion (: R1,57 billion) and 18% reduction in total liabilities to R926 million (: R1,13 billion). Debt in the business further increased, as evidenced by the increase in the debt to equity ratio to 76:24 (: 72:28). The net current liability position of R68 million was caused mainly by the delayed sale of the trade-financed sinter materials. These are expected to be consumed in FY2016 with the sinter plant back in production and the commencement of logistics via the new rail siding at Kalagadi Manganese. The reduction in current assets is indicative of the low commodity prices, given that the volumes for the year are 15% higher than last year, as well as the high stock volumes of non-performing sinter input materials. The cash generated from operations remained positive at R19,3 million (: R41,9 million), while net cash from operating activities was negative, increasing to R48,7 million (: R13,6 million). Dividends The policy of the Company is to declare 50% of earnings after tax as a dividend. As the Company made a loss after tax in this period, the board has not declared a dividend for the financial year. Sizwe Nkosi Chief financial officer 29 May

25 Metmar Limited Integrated Annual Report 23 OUR LEADERSHIP Board of directors 1. Rob Still (60) BCom (Hons), CTA, CA(SA) Independent non-executive director Appointed 1 May Rob has vast experience in mining, specialising in mining finance. He started his career as a chartered accountant, becoming a partner of Ernst & Whinney before leaving in 1986 to co-found Rhombus Exploration Limited. Since then, he has been involved in the mining industry worldwide and has held executive and non-executive directorships in companies listed in South Africa, Australia, Canada and the United Kingdom. He has participated in the evaluation and development of several new mining projects and companies including Rhovan, Ticor Titanium, Pangea GoldFields Limited, Southern Mining Corporation Limited (Corridor Sands), Metorex Limited and Zimbabwe Platinum Mines Limited. Rob is currently chairman of Pangea Exploration Proprietary Limited which company provides information and analysis to private equity finance within Africa and a partner in Denham Capital Partners, global leaders in private equity for energy, oil and gas and mining. In addition to the chairmanship, Rob holds the following positions at Metmar: Member of the audit and risk committee Chairman of the nominations committee A member of the remuneration committee 2. Luigi Matteucci (61) BCom (Wits), CTA (Wits), CA (SA) Non-executive director Appointed 2 April 2008 Luigi served his articles with PricewaterhouseCoopers and qualified as a chartered accountant in In 1981 he joined Highveld Steel and Vanadium Corporation Limited becoming an executive director and general manager: finance before leaving them in October Luigi holds the following positions at Metmar: Chairman of the audit and risk committee Chairman of the remuneration committee Member of the nominations committee 3. David John Ellwood (56) Executive director Chief executive officer Appointed 8 May 2006 After five years with the international trading group Asoma, David was one of the founding shareholders of Metmar Trading in David has been an active part of the Metmar management since inception. He has also been a part of the effective trading team handling a variety of bulk commodities. David has more than 30 years experience in the international trading arena and is committed to the future management of Metmar. 4. Thomas Ignatius Borman (48) BCom (Hons) Non-executive director Appointed 12 March 2013 Tom graduated with a BCom Honours degree from the University of Pretoria in 1989 and qualified as a practising chartered accountant in 1992, having served his articles with PriceWaterhouseCoopers. Since leaving the auditing profession, Tom has accumulated vast experience in the mining and minerals industry. He served in excess of 11 years in the employ of the BHP Billiton group in various senior managerial capacities including that of chief financial officer of an Australian listed mining company. Tom has also occupied leading positions in strategy and business development, and served as project manager for the merger integration transaction between BHP Limited and Billiton Limited. Tom has extensive global business experience, having worked in several countries including South Africa, Kenya, the Netherlands, the United Kingdom and Australia. Tom resigned his position at BHP Billiton Limited in March 2006 in order to join Warrior Coal Investments Proprietary Limited, in which capacity he was part of the executive team which established and consolidated the portfolio of assets now constituting the Optimum Group of companies. Optimum was listed on the JSE on March 2010 and was bought by Glencore in March Tom is still an active director of Beacon Rock Corporate Services, a company which provides advisory services to the mining industry, as well as in Albion Holdings, a property trading and investment company. Tom also holds directorships in Univeg South Africa and Mouton Citrus.

26 24 Metmar Limited Integrated Annual Report OUR LEADERSHIP continued Board of directors continued 5. Daphne Mashile-Nkosi (56) Small Business Management Diploma (Wits Business School) Non-executive director Appointed 8 May 2006 Daphne is deeply committed to the development of women, the elderly and rural communities, and is a gender activist and proud patriot. Daphne is the chairperson of Kalahari Resource Manganese Mining Company Proprietary Limited, executive chairperson of Kalagadi Manganese Proprietary Limited, a trustee and chairperson of the Women s Development Bank Trust, chairperson of Women s Development Bank Investment Holdings Proprietary Limited and was nominated by the Women s Development Bank to study development economics in Nagoya, Japan in She is also a director of various Eyesiswe group companies. She is the chairperson of the Eyesiswe transformation committee and acts as an ongoing catalyst to the empowerment and transformation process within the mining sector. Daphne represents shareholder interests as a director of various companies, including Kalahari Resources, Kalagadi Manganese and Metmar. She is the chairperson of Bakhazi-Banalima Proprietary Limited. She is also a trustee of the FirstRand Empowerment Trust and directly involved in the successful structuring of the Cell C third network operator in South Africa. She has a strong development background and activism in gender issues bringing focus to the activities of the business on issues that improve the quality of life of poor communities and the nurturing of women entrepreneurs and business leaders. Daphne is a member of the remuneration and nominations committee. 6. Sizwe Mfundo Sydney Nkosi (39) BCom (Hons) (University of Natal), CA(SA), MBA (University of Cape Town) Executive director Chief financial officer Appointed 1 October 2011 Sizwe s beginnings are in Madadeni where he completed his matric in Bethamoya Secondary School. He secured his CTA in the University of Natal (Durban), completed his articles with Ernst & Young and qualified as a chartered accountant in Sizwe also completed an MBA at the University of Cape Town s Graduate School of Business. His 12 years experience after completion of articles includes mining, investment banking and manufacturing. Having been a bursary student of Anglo American, he worked for De Beers, Foskor, Sekoko Resources (in joint venture with Firestone Energy Limited), Investec Bank Limited and Nampak Limited. He held both an executive and a non-executive director position at Firestone Energy Limited. 7. Dawn Earp (53) BCom (Wits), BAcc (Wits), CA(SA) Independent non-executive director Appointed 1 October 2011 Dawn graduated from the University of the Witwatersrand in 1986 and completed her articles with BDO. She joined Anglo American in 1989 and moved through the ranks to the position of vice president of financial accounting and was transferred to AngloGold Ashanti in 2000 where she was later appointed executive officer: finance. Dawn was appointed as the finance director of Impala Platinum Limited in March In February 2011 she was appointed as the finance director of Rand Refinery. She holds directorships of various companies in South Africa, Asia, Hong Kong and India and is a member of the Financial Reporting Standards Council. Dawn is: a member of the audit and risk committee a member of the remuneration and nominations committee chairperson of the social, ethics and transformation committee chairperson of the remuneration committee 8. Petrus (Piet) Philip Boshoff (55) BCom (Stellenbosch), MBL (UNISA), Honours in International Marketing (UNISA) Executive director Appointed 8 May 2006 Piet started his career in banking with the Absa banking group in 1984 and joined the Samancor Group in 1985, handling the sales and marketing of the full range of Samancor s chrome and manganese ores and alloys. In 1995 he joined Samtem, a joint venture marketing company between Samancor and Metmar Trading, marketing the full range of Samancor s ores and alloys into the Middle East. During 2002 he joined the Metmar team and is trading in a variety of bulk ferro alloys and carbon products. He is also responsible for various projects in South Africa, Zimbabwe and abroad.

27 Metmar Limited Integrated Annual Report 25 Management Committee (MANCO) The management committee meets regularly and assists the Group chief executive officer in managing the Group s businesses when the board is not in session. This assistance is subject to the statutory limits and the board s limitation on delegation of authority to the executive directors. The management committee assists the chief executive officer to guide and control the overall direction of the business of the Group and acts as a medium of communication and coordination between business units, Group companies and the board. Sizwe Nkosi Chairman of MANCO and chief financial officer David Ellwood Chief executive officer Metmar Limited Piet Boshoff Executive director Molleen de Wet Chief financial officer Metmar Trading Proprietary Limited Anlia Swart Company secretary Metmar Limited