AECI Integrated Report and annual Financial Statements 2018

Integrated reporting demonstrates an organi- sation’s ability to create and sustain value over the short, medium and long term. The objective of this report, therefore, is to provide stakeholders with a greater understanding of the strategic direction, overall sustainability and related initiatives, operational perfor- mance, risks and opportunities, prospects and major economic, social and environmental impacts of AECI Ltd (“the Company”) and its operating business entities (“the AECI Group” or “the Group”). The Group’s Internal Audit function appraises Group entities’ internal controls and submits its assessment of these to the Board on an annual basis. The management of each operating business also submits an annual self-assessment of internal controls (Inter- nal Control Matrix) to the Audit Committee affirming that the systems of internal control, in entities for which they have responsibility, are adequate for their operations and are functioning effectively. INVITATION TO STAKEHOLDERS The AECI Group engages with a broad spectrum of stakeholders. These include employees, trade unions, customers, shareholders and investment managers, financiers, suppliers, technology and business partners, local and national government structures in countries where the Group operates, other regulatory and industry bodies, the communities in which the Group operates, special interest groups and the media. The Company welcomes written comments and feedback from its stakeholders on this integrated report and on other general matters. These should be addressed to the Group Company Secretary. APPROVALS The Board acknowledges its responsibility to ensure the integrity of the integrated report. The Directors confirm that individually and collectively they have reviewed the content of the integrated report and believe it addresses material issues, as determined by using AECI’s Risk Management Framework as a screening mechanism, and is a fair presentation of the integrated performance of the Group. The Board approved the AFS for the year ended 31 December 2018 on 25 February 2019 and the release of the integrated report on 5 April 2019. For and on behalf of the Board Khotso Mokhele Mark Dytor Chairman Chief Executive Woodmead, Sandton 5 April 2019 SCOPE AND BOUNDARIES The scope of this report includes all of AECI’s subsidiaries and joint ventures. A list of princi- pal subsidiaries is provided in note 32 to the full annual financial statements (“AFS”) and information on joint ventures is in note 6. The report relates to the financial reporting period 1 January 2018 to 31 December 2018. Issues which are identified as being of material significance to stakeholders guide integrated reporting. For the AECI Group, it is of paramount importance that this identification adequately address the diversity and complexity of its businesses. Accordingly AECI’s overall Risk Management Framework, which mirrors issues of interest and concern to the Company and its stakeholders, underpins the determination of materiality for the purposes of the content of this integrated report. The methodology and framework for risk management are based on the Committee of Sponsoring Organization of the Treadway Commission and enhanced with the adoption of ISO 31000 for managing risks. Other than the Risk Management Framework and feedback from stakeholder engagements, the reporting principles applied in the prepa- ration of this report include: the Companies Act, No. 71 of 2008 (“the Companies Act”), in South Africa; the Listings Requirements of the JSE Limited (“JSE”); the King Report on Corpo- rate Governance for South Africa (“King IV”); the International Integrated Reporting Council’s International Framework; International Finan- cial Reporting Standards (“IFRS”); the South African Institute of Chartered Accountants (“SAICA”) Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council; the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants; the CDP Climate Change and Water Programs; the international chemical industry’s Responsible Care® programme, as well as AECI’s own internal reporting standards and its Memorandum of Incorporation (“MOI”). ASSURANCE AND COMPARABILITY The Board of Directors (“the Board”) is required in terms of the Companies Act and the JSE Listings Requirements to prepare AFS which fairly present the state of affairs of the Company and the Group as at the end of the financial year and of the profit or loss and the cash flows for that period, in conformity with IFRS. The external auditor is responsible for auditing the AFS of the Company and the Group and for expressing an opinion on these statements to shareholders. The external auditor has also expressed limited assurance on selected sustainability information which AECI believes is material in view of the nature of its businesses and the environment in which they operate. 2 AECI  INTEGRATED REPORT AND SUMMARISED FINANCIAL STATEMENTS 2018 ABOUT THIS REPORT