COMPANY CODE OF CONDUCT – Lesson 3

COMMUNITIES

We believe that our operations have a predominantly positive impact on the communities in which we operate.

We aim to build lasting relationships with our neighbours by identifying and addressing their concerns. We contribute to activities and programmes designed to improve their quality of life.

EMPLOYMENT

Where possible, we support and promote local employment and local procurement through training and small/medium enterprise development.

ENVIRONMENT

We are aware that our operations can have direct and indirect impacts on the environment. In everything we do, we seek to minimise any negative impacts on the environment in accordance with the precautionary principle. We work proactively to manage our energy and carbon footprint and support the development of low emission technologies.

COMMUNICATION

We believe in the importance of maintaining active engagement and dialogue with the stakeholders. We are committed to communicate regularly, openly and accurately with our employees, contractors, customers, suppliers, local communities and investors as well as appropriate associations, governments and other stakeholders.

COMMUNICATION

PRONOUNCEMENTS

• Important pronouncements and policy changes are communicated through the press and internal briefs

INTERNAL BRIEFS

• These are communicated to employees through the various supervisors or brief group leaders.

PRESS BRIEFS

• These are posted in the local print media

The above are the only official source of information about Barberton. There is no other source of information.

COMPLIANCE

We are committed to operating in accordance with strong ethical principles. We expect everybody working for Barberton Mines to take personal responsibility for ensuring that the conduct conforms to the following principles:

• We shall not breach the law or participate in any criminal, fraudulent or corrupt practice.
• We prevent, avoid and report any potential conflict of interest (benefiting personally in any way)
• We shall not accept any form of bribery for services to be rendered or approved. Corruption shall be reported promptly.
• We shall not participate or assist third parties in money laundering activities.
• We shall not support of permit our funds to be used for political campaigns or affiliated organisations.
• We are committed to the principles in enshrined by competition loss.
• We have systems and processes in place that ensure confidential information is secure and protected.

QUALITY AND PRODUCT SAFETY

Our marketing, logistics and product safety functions work closely together with our partners and service providers to ensure that quality and safety requirements are met through our supply chain.

We promote the responsible use and management of our products

PROTECTING AND MAINTAINING ASSETS

We are all responsible for group assets that are under our control. These assets include business opportunities, funds, property, proprietary information and personal equipment (IT and phones)-

• We use IT assets and phones for work purposes only
• We monitor the use of IT assets and phones
• We only collect and return personal information that is reasonably necessary to meet business requirements.
• We protect our intellectual property and company brand

WHISTLE BLOWING

You may remain anonymous when exercising your obligation to report non compliance to the company code of conduct.

INTRODUCTION

1.2 This whistle-blower policy applies to the Pan African Resources Group, comprising Pan African Resources PLC (the Company) and its subsidiaries (the Group). The Group is committed to maintaining the highest standards of ethics, integrity, and transparency in its operations. As part of this commitment, the Group encourages employees, contractors, vendors, customers, and other stakeholders to report any suspected or actual violations of laws, regulations, policies, or unethical behaviour, through a whistle-blowing mechanism.

1.3 Whistle-blowing is a warning system to alert management to suspected or actual violations of laws, regulations, policies, or unethical behaviour within the organisation. An effective policy that encourages whistle-blowing assists organisations in detecting potential unethical behaviour. A positive whistle-blowing culture is an important element in the risk management system of the Group.

2. PURPOSE

2.1. The purpose of this whistle-blower policy is to establish a clear and confidential process for reporting concerns, complaints, or grievances related to potential violations of laws, regulations, Company policies, or unethical behaviour. This policy aims to create a safe environment for individuals to raise concerns and protect them from any form of retaliation.

3. SCOPE

3.1. The Policy is designed to deal with disclosures by employees and third parties.

3.2. This policy covers all genuine disclosures relating to:

 Criminal offences (such as fraud, theft and cyber-crimes)
 Failure to comply with statutory obligations/requirements
 Financial misconduct
 Health and safety risks
 Environmental damage
 Unfair discrimination
 Corruption and misconduct including bribery
 Acts of sabotage, including damage to property and/or infrastructure
 Attempts to suppress or conceal any information relating to any of the above.

3.3. The policy does not apply to personal grievances, which will be dealt with under the Group’s human resources procedures.

3.4. This policy must be read in conjunction with the relevant policies addressing grievances, and disciplinary procedures as included in the Human Resources Policy.

3.5 The Group has a “Zero Tolerance” stance against corruption, fraud, theft, misconduct or any dishonesty.

4. DEFINITION OF WHISTLE-BLOWING

4.1 Whistle-blowing refers to the act of reporting any concerns, grievances, or suspicions regarding illegal activities, violations of company policies, unethical behaviour, or any other misconduct that could harm the organisation or its stakeholders.

5. REPORTING PROCESS 

5.1 Reporting channels: The Company provides multiple reporting channels for whistle-blowers to raise concerns. These channels include an anonymous whistleblowing and tip-off hotline which can be accessed by either email (whistle@paf.co.za), phone call or WhatsApp (072 470 0743). The hotline operates during office hours from Monday to Friday, from 8:00 am to 5:00 pm. We strive to ensure that all communications, including emails and WhatsApp messages (including voice notes), receive a response within 48 hours.

5.2 Confidentiality: The Company will treat all whistle-blowing reports with strict confidentiality to the extent possible while conducting thorough investigations.

5.3 Non-retaliation: The Company prohibits retaliation against whistle-blowers who make good-faith reports. Any form of retaliation, including but not limited to harassment, discrimination, demotion, termination, or other adverse actions, against whistle-blowers will not be tolerated and will be subject to disciplinary action. We encourage everyone to speak up and raise concerns without fear of retaliation or victimisation when such concerns are reasonably believed and reported in good faith, without malice and not for personal gain.

5.4 Anonymous reporting: The Company acknowledges that whistle-blowers may choose to remain anonymous while making reports. However, anonymous reports may limit the Company’s ability to investigate and address the concerns effectively. Whistle-blowers are encouraged to provide their identity and contact information which will be kept confidential for proper investigation and follow-up.

5.5 False reporting: Whistle-blowers are expected to make reports in good faith and with an honest belief in the accuracy of the information provided. Deliberate false reporting with malicious intent may result in disciplinary action, including potential legal consequences.

5.6 Investigation and follow-up: The Company will promptly investigate all whistle-blowing reports in a fair, impartial, and confidential manner. The investigation may involve gathering evidence, interviewing relevant parties, and taking appropriate actions to address the concerns. The Company will provide feedback to the whistle-blower regarding the outcome of the investigation.

6 REPORTING PROCEDURES AND RESOLUTION OF REPORTED INCIDENTS INTERNAL

6.1 Disclosures must be made to the Group’s Whistle-Blow hotline.

6.2 Disclosures must include the following:

 background and history of the alleged or suspected impropriety;
 where possible, names, dates, and places relevant to the impropriety;
 the reason why the whistle-blower reasonably believes that the conduct in question constitutes or is likely to constitute impropriety;
 where available, proof or any other evidence in support of the disclosure; allegation (invoices, bank statements, purchase orders).

6.3 While whistle-blowers are not expected to prove the truth of an allegation, they will need to demonstrate that there are reasonable and sufficient grounds for the concern raised. The information from calls received by the Group’s corporate office will be summarised in the form of reports to the authorised person (Executive: Risk and Security).

7. PROTECTION OF WHISTLE-BLOWERS

7.1 South Africa has various laws that apply to different categories of whistle-blowers, such as employees or the general public. These laws provide different levels of protection to those who come forward with information. The main laws that pertain to whistle-blowers are:

 Constitution of the Republic of South Africa, 1996.
 The Protected Disclosures Act, 2000.
 The Labour Relations Act, 1995.
 The Companies Act, 2008.
 The Protection Against Harassment Act, 2011.
 Prevention and Combating of Corrupt Activities, 2004.
 Protection of Personal Information Act, 2013.
 Protection of Information Act, 1982.
 Electronic Communications and Transactions Act, 2002.

7.2 The Company is committed to protecting whistle-blowers who make good-faith reports. Whistle-blowers who follow the reporting process outlined in this policy will be protected against retaliation. Even though this is in line with the Protected Disclosures Act, Act 26 of 2000, the Company cannot guarantee absolute protection of the whistle-blower’s identity or confidentiality in all cases, particularly in legal or regulatory proceedings.

7.3 Where deemed necessary, the Company will provide support and assistance to whistle-blowers throughout the process. This may include access to legal advice, counselling services, or any other necessary support to protect the whistle-blower’s rights and well-being.

7.4 The Company must also take the following consequences of whistle-blowing into account and protect the whistle-blower from:

 Being fired, laid off or demoted;
 Denying overtime or a promotion;
 Disciplined; denying benefits;
 Reducing pay or hours working;
 Failing to be rehired or hired again;
 Intimidation, harassment or threats;
 Social isolation; and
 Blacklisting.

8. RESPONSIBILITIES

8.1 Whistle-Blowers: It is the responsibility of employees, contractors, vendors, customers, and other stakeholders to report concerns, complaints, or grievances related to potential violations of laws, regulations, Company policies, or unethical behaviour in good faith, and through the designated reporting channels provided by the Company.

8.2 Managers: Managers and supervisors have a responsibility to create a supportive environment for whistle-blowers, ensure that whistle-blowing reports are treated with confidentiality, and promptly report any concerns or complaints related to potential violations of laws, regulations, Company policies, or unethical behaviour to the appropriate channels.

8.3 Procurement and Human Resource Managers: The procurement and Human Resource managers have the responsibility to effectively communicate the details of this policy to all employees, as well as third-party service providers such as vendors and contractors. They are tasked with ensuring that the policy is clearly understood and accessible to all relevant parties. This includes providing training, disseminating written materials, and organising awareness campaigns to promote understanding and compliance with the policy.

8.4 Executive: Risk and Security: The security executive is responsible for overseeing the whistleblowing process and investigations, receiving reports and taking appropriate actions to address the concerns by this policy and all relevant laws and regulations. The security executive will ensure that each report is handled promptly, thoroughly, and in compliance with the established procedures and legal requirements.

8.5 Audit and Risk Committee: The whistleblowing register should be reported to the audit and risk committee every quarter. This reporting mechanism enhances transparency and provides the audit and risk committee with valuable insights into the effectiveness of the organisation’s whistleblowing process.

9. POLICY APPROVAL

9.1 This Policy was approved by the Audit and Risk Committee as reflected in the approved minutes of 28 June 2023.

9.2 The policy becomes effective from 28 June 2023 and is subject to biannual review.

BACKGROUND

1.1Pan African Resources PLC is incorporated in the United Kingdom and has a number of subsidiaries incorporated in the Republic of South Africa as well as a subsidiary incorporated in Dubai and another in Sudan. This group of entities will, for purposes of this Policy, collectively be referred to as “Pan African Resources”, “Pan African” or “the Company”. This Malpractice Policy (hereinafter also referred to as the “Policy”) sets out in general Pan African’s practice and approach in preventing, detecting and dealing with alleged instances of malpractice, as described in section 6 of the Policy.

1.2 Pan African has adopted a zero-tolerance approach to any type of malpractice and is committed to protecting its revenue, expenditure, assets, information and reputation from financial gain or other benefit in an unlawful, dishonest or unethical manner. Pan African has a statutory responsibility to take an active stance against fraud, corruption and other malpractice and deal with its occurrence in terms of the legislative prescriptions. This extends to all dealings by Pan African and its representatives, wherever it conducts its business.

1.3 This Policy should not be seen as specific and all-encompassing, but rather as an overall framework that establishes the basis for the development of specific policies and control measures that will aid in the prevention, detection and investigation of serious malpractice.

2. GENERAL APPROACH

In terms of Pan African’s zero-tolerance approach to fraud, corruption and other serious malpractice, the organisation endeavours to create an environment that discourages fraud and corruption through:

• Applicable policies
• Fraud/corruption awareness campaigns and training
• Encouraging honesty, openness, co-operation and mutual respect across all functions, suppliers/vendors and contractors with whom Pan African conducts business
• An appropriate whistleblowing mechanism which maintains the confidentiality of reports and which prevent any sort of retaliation against those who have reported suspected instances of fraud, corruption or other malpractice.

3. THE NEED TO ADDRESS MALPRACTICE RISKS

3.1 Fraud and corruption harm the societies in which these acts are committed and inhibits economic growth and development. Fraud, corruption and other types of malpractice constitute a criminal offence in all the countries in which Pan African operates, and these types of unlawful acts expose Pan African, its employees and representatives to the risk of prosecution, fines and imprisonment, as well as endangering the Company’s reputation.

3.2 Pan African is also obliged, in terms of the South African Companies Act of 2008, to establish a social and ethics committee which monitors the Company’s activities with regard to (amongst other matters) the Organisation for Economic Co-operation and Development’s (OECD) recommendations regarding corruption. The said committee reports to the shareholders of the Company on their findings.

3.3 Apart from moral and corporate governance considerations, Pan African is also exposed to other risks, such as:

• The directors can be exposed to civil claims if they failed to comply with their common law and statutory duty of care, resulting in the perpetration of fraud, corruption and other serious malpractice
• Pan African may be held vicariously liable for the actions of its employees or agents who have acted unlawfully
• Pan African can be charged with money-laundering even where it negligently receives or possesses the proceeds of unlawful activities
• Pan African is subject to the United States’ Foreign Corrupt Practices Act of 1977 and may incur civil and criminal penalties where it fails to maintain proper and correct accounting records and/or where a foreign public official is bribed, in any jurisdiction in the world, by an agent or employee of Pan African
• Pan African is furthermore subject to the provisions of the United Kingdom’s Bribery Act of 2010 and can incur criminal liability if it is found that it failed to have adequate procedures in place to prevent bribery, such as where a person associated with Pan African (including an agent) bribed a person in another jurisdiction
• Pan African is also subject to the South African Prevention and Combating of Corrupt Activities Act of 2004 that criminalises the offering or acceptance of any gratification in order to influence another person to act in a biased or improper manner.

3.4 In addition, Pan African has certain legal duties to report unlawful activities, including:

• The duty to report to the South African Police Service (SAPS) its knowledge or suspicion that another person has committed a corrupt act and/or any fraud, forgery, extortion or theft in excess of the prescribed amount of R100,000 or more. The failure by persons in the position of authority within Pan African to report this, amounts to a criminal offence
• The duty to report any suspicious transaction to the Financial Intelligence Centre – failure to do so also constitutes a criminal offence.
3.5 It is therefore clear that it is in the interests of all stakeholders that the fraud, corruption and other commercial malpractice risks which Pan African may be exposed to, should be properly addressed and managed.

4. SCOPE OF THE POLICY

4.1 This Policy applies to any actual or alleged serious malpractice, as described in section 6 of the Policy that is, was or on reasonable grounds suspected to be committed by:
• Pan African and all of its subsidiaries
• the directors, shareholders and employees (whether permanent, fixed term or temporary) of Pan African
• the customers, business associates, agents, contractors, consultants, vendors, third party service providers, or any other person in a business relationship with Pan African, Pan African’s subsidiaries or entities otherwise managed or controlled by Pan African (collectively referred to as “Stakeholders” in this Policy) to the extent indicated in the Policy.
4.2 Pan African will furthermore endeavour, where applicable, to enter into disclosure agreements with relevant stakeholders where it deems it necessary to mitigate the risk of fraud and corruption. The purpose of such a disclosure agreement is to facilitate the disclosure of information relevant to the investigation of matters where there is a reasonable suspicion that a stakeholder (including its employees, agents or sub-contractors) acted fraudulently, corruptly or committed another serious malpractice. These disclosure agreements are subject to the legal constraints imposed in law, such as the South African Protection of Personal Information Act of 2013 or the United Kingdom’s Data Protection Act of 2018.

5. POLICY STATEMENT

5.1 Pan African is committed to the highest standards of personal and professional ethical behaviour. The board of directors of Pan African (the board) have adopted a zero-tolerance approach against any malpractice, and therefore appropriate action will be taken against any person who conducts him or herself in a manner which is in conflict with this Policy.

5.2 Pan African furthermore endeavours to comply with the laws and regulations of the countries in which it operates. Amongst others, Pan African will comply with:

• The Prevention and Combating of Corrupt Activities Act of 2004 (PRECCA)
• The Protected Disclosures Act of 2000 (PDA)
• The United Kingdom’s Bribery Act of 2010 (UKBA) and
• The United States of America’s Foreign Corrupt Practices Act of 1977 (FCPA).

5.3 This Policy is supplemented by and should be read in conjunction with the following Pan African policies:

• Code of Ethics
• Conflict of Interest Policy
• Protection of Personal Information Policy
• Diversity Policy
• Slavery and Human Trafficking Policy
• Human Rights Policy
• Legal Action Policy
• Share Trading Policy (trading in the presence of price sensitive information) and
• As well as any other applicable Policies.
5.4 This Policy has, furthermore, been drafted to ensure compliance with the GRI 205 Anti- Corruption Standard of 2016.

6. ACTIONS CONSTITUTING MALPRACTICE

6.1 This Policy is applicable to instances where it is on a reasonable basis suspected that bribery or a fraudulent, collusive, coercive, obstructive or corrupt act occurred, occurs or will occur (Malpractice). For purposes of this Policy (in alphabetical order):

• “bribery” is the offering, giving, soliciting, or receiving of any item of value as a means to influence improperly the actions of the Pan African, Pan African’s employees, directors, stakeholders or another person
• “coercive malpractice” is impairing or harming, or threatening to impair or harm, directly or indirectly, any person or the property of the person to influence improperly the actions of the Pan African, Pan African’s employees, directors, stakeholders or another person
• “collusive malpractice” is an arrangement between two or more persons designed to achieve an improper purpose, including to influence improperly the actions of another person
• “concealing a malpractice” is any agreement or attempt to conceal any malpractice set out in this Policy;
• “corruption/corrupt practices” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to improperly influence the actions of Pan African, Pan African’s employees, directors, stakeholders or another person
• “disclosing information” is the intentional and unintentional disclosure of confidential and proprietary Pan African information to outside parties
• “environmental offences” are offences in respect of the disposal of waste and damage to the environment
• “fraud” is the intentional making of a misrepresentation with the intent to deceive, resulting in actual or potential prejudice to Pan African or another person
• “fraudulent malpractice” is any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead Pan African, Pan African’s employees, directors, stakeholders or another person to obtain a financial or other benefit or to avoid an obligation and includes the instances referred to in this section of the Policy
• “human trafficking” is the practice of forced labour and commercial sexual exploitation among imported and exported trafficked men, women, and children
• “improper recording of financial transactions” is the intentional and improper recording, or reporting of financial transactions
• “money laundering” is the intentional or negligent involvement in an agreement or transaction to hide the proceeds of unlawful activities
• “obstructive malpractice” is deliberately destroying, falsifying, altering or concealing of evidential material to the investigation or making false statements to investigators in order to materially impede Pan African’s investigation into alleged malpractice set out in this Policy; and/or threatening, harassing or intimidating Pan African, its employees, directors, stakeholders or any other person to prevent them from disclosing their knowledge of matters relevant to the investigation or from pursuing the investigation
• “profiteering” is the unlawful making of profit by any person as a result of insider knowledge or information of company activities or disclosing such information to third parties
• “property destruction” is the destruction, damaging, removal, or inappropriate use of records, furniture, fixtures, equipment or other assets in the possession of or under the control of Pan African
• “regulatory offences” are any inappropriate act, such as collusion, bribery or coercion to procure mining licences or similar regulatory approval
• “terrorist support” is any financial or other support to an organisation, designated as a terrorist organisation by either of the United States of America, United Kingdom and South Africa
• “theft” is the taking of something that another person owns or possess. It includes the misappropriation of funds, securities, inventory, raw and processed materials, information or other assets
• “unauthorised information access” is the improper access to information or data in the possession or control of Pan African
• “unauthorised use” entails the use of Pan African’s property without consent for own purposes
• “unauthorised use of electronic devices” is the inappropriate use of electronic devices provided for use by directors, employees, subcontractors or agents of Pan African
• “unlawful conduct” is conduct which is aimed at undermining Pan African or its employees’ good name or reputation.

6.2 The terms “bribery” and “corruption” includes all the offences mentioned in the PRECCA, FCPA and the UKBA, and will include the following:

• attempts to secure an improper advantage in any area, for example environmental permits, customs, dealing with law enforcement or judicial proceedings
• the offer or acceptance of any form of undue gratification or reward, whether or not it can be measured in monetary terms, including employment or lavish hospitality
• all mechanisms for the channelling of undue payments or other benefits, or for masking their purpose, whether as “kickbacks”, subcontracts, purchase orders, consultancy agreements, through agents or any other method
• the acceptance of any unauthorised gift or hospitality
• the failure to record a transaction or the incorrect or improper recording of an entry in the accounting records in order to hide the true nature or extent of a transaction
• the failure to have adequate procedures in place to prevent bribery and
• any deal on improper concessional terms with politically influential individuals or companies or organisations linked with them.

6.2.1 The gratification can take on many different shapes and forms and may include the:

• direct or indirect promising, offering, or authorisation of anything of value
• offer or receipt of any kickback, loan, fee, reward or other advantage and
• giving of aid, donations or anything designed to exert improper influence.

6.2.2 For a criminal conviction it is not necessary to show that:

• Some unlawful act was indeed performed in exchange for the corrupt gratification (the mere offering or accepting thereof is sufficient)
• The person agreeing to the gratification had the intention to perform in terms of the corrupt agreement (mere acceptance is sufficient, even if a person did not have the power or intention to perform the corrupt act)
• The person who had been offered the gratification indeed physically accepted the gratification (an agreement to accept the gratification at some later stage is sufficient to secure a conviction) and
• The exact nature of the gratification offered to influence the receiver was specified at the time the corrupt offer was made or accepted.

6.3 From the aforesaid it clear that the offence is widely defined, and if in doubt as to whether the acceptance or offering of a gratification will be lawful, further guidance should be obtained from an employee’s immediate supervisor or the Pan African Group Financial Manager or the Executive: Risk & Security located at Pan African’s Corporate Office.

6.4 This Policy must be read with Pan African’s Anti-Bribery and Corruption Policy.

6.5 In addition to the aforesaid, the term “malpractice” also includes all instances of serious misconduct, which is:

• any intentional violation of Pan African’s Policies and/or applicable laws and regulations which Pan African and/or its directors and/or employees are compelled to adhere to, and that has not already been covered in sub-sections 6.1 to 6.2 and of which the contravention of may have serious consequences or reputational damage to Pan African.

7. MANAGEMENT RESPONSIBILITIES

7.1 Management is responsible for the detection and prevention of fraud, corruption and other malpractice as set out in section 6 of the Policy. Each member of the management team must be familiar with the types of improprieties that might occur within his or her area of responsibility, and be alert for any indication of irregularity.

7.2 Any suspected malpractice or irregularities should immediately be reported to the manager’s immediate supervisor and the Executive: Risk and Security at Pan African’s Corporate Office, as set out in the Pan African Code of Ethics and/or other applicable Policies. The matter so reported should be treated on a confidential and need-to-know basis by all involved.

7.3 For purposes of this Policy, “management” consists of any person who supervises or controls the functions performed by another person as well as the directors of any entity which forms part of Pan African. The Pan African Group Finance function however has the overall responsibility to ensure the communication, implementation, monitoring and review of this Policy.

7.4 In particular, Management will ensure that:

• It will comply with South Africa’s King IV Codes and the United Kingdom’s Corporate Governance Code of 2018, as far as the management of malpractice is concerned
• Proper processes and procedures are in place to establish the likelihood and impact of the commercial malpractice risks to which Pan African may be exposed to
• Processes and procedures to prevent malpractice, which are proportionate to the identified risks, are in place
• Conflicts of interests that employees or other stakeholders may have, are identified and appropriately managed
• Charitable donations and sponsorships made by Pan African are not used as a disguised form of corruption or bribery
• Due diligence procedures are in place in respect of stakeholders which may expose Pan African to commercial malpractice risks
• Anti-fraud and corruption communications are regularly distributed and that tailored anti-corruption training is provided on a regular basis for directors, employees and/or stakeholders that have been identified as having a high risk of incidents of corruption;
• The anti-fraud and corruption programmes and policies are effectively communicated to Pan African employees and its stakeholders, and implemented within Pan African;
• Proper records of the anti-fraud and corruption communications and training are kept in accordance with the GRI 205 Anti-Corruption Standard and Appropriate internal compliance programmes are implemented in order to ensure that:

• the offences of corruption, fraud, theft, forgery and extortion are in fact detected and reported, as envisaged by section 34 of PRECCA
• proper records are kept regarding confirmed incidents of fraud and corruption as well as Pan African’s response to these incidents in order to comply with the GRI 205
• Anti-corruption Standard and Anti-fraud and corruption programmes are appropriately reviewed and monitored.

8. THE DUTY TO REPORT IRREGULARITIES

8.1 All directors and employees (as set out in section 4 of the Policy) of Pan African must always act in the best interests of Pan African. This includes notifying management and/or another appropriate person or body, as set out in the Whistleblowing Policy, of any matter which may prejudice Pan African.

8.2 The failure by any employee to report any reasonable suspicion that any person, mentioned in the scope of this Policy (as set out in section 4 of the Policy), has committed, attempted to commit or conspired with another person to commit any of the irregularities outlined in section 6 of this Policy, in addition to other legal consequences, constitutes misconduct. If stakeholders suspect that:

• Their own actions (including those of persons associated with them) have, or may have contravened this Policy, they should immediately report the matter on the Pan African whistleblowing line and/or inform the Executive: Risk and Security at Pan African’s Corporate Office.
• An employee or another stakeholder of Pan African has contravened this Policy, they should report this promptly and confidentially, preferably in writing, to the Executive: Risk and Security at Pan African’s Corporate Office. Alternatively, they should report the matter on the Pan African whistleblowing line. The matter so reported should be treated as confidential by those who report the matter as well as those who receive the report.

9. OTHER IRREGULARITIES

9.1 Irregularities not covered in section 6 of the Policy and concerning an employee’s moral, ethical, or behavioural conduct, should be resolved by departmental management and/or the Human Resources Department and not in terms of this Policy.

9.2 If there is any question as to whether an action constitutes a commercial malpractice, guidance can be obtained from an employee’s immediate supervisor and/or the Pan African Group’s Financial Manager and/or the Executive: Risk and Security.

10. TOOLS TO IMPLEMENT THE MALPRACTICE POLICY

10.1 In order to assist the management of Pan African in carrying out their responsibilities, the following structures, policies, guidelines and systems should be in place:

a. An effective accounting system
b. Appropriate processes for internal controls, including authorisation controls, reporting and investigative procedures
c. Appropriate contracts and terms of employment
d. Adequate training and awareness programmes
e. Appropriate disciplinary processes and procedures
f. Policies related to the use of computers, e-mail and the internet
g. Controls reviewed by internal audit
h. An internal security and monitoring team
i. An external audit function
j. A procedure for the investigation of security incidents
k. A confidential reporting system (whistle-blower procedure)
l. Legal guidance on the inclusion of appropriate anti-bribery provisions, guarantees or conditions in the written contracts of employees or representatives, where applicable and
m. Due diligence processes with respect to clients and operations, in particular, for foreign commercial activities.

11. INVESTIGATION OF ALLEGATIONS

11.1 All allegations, based on reasonable grounds and reported to Pan African, will be investigated, each to its logical conclusion and reported to the appropriate levels in the organisation for action to be taken, as required by this Policy. Every director, manager, employee and stakeholder is expected to comply with lawful requests by the investigating team.

11.2 Management, at the respective operating divisions, has the primary responsibility for investigating all suspected malpractice as defined in this Policy. If this investigation supports the inference that it is likely that malpractice has occurred, the manager will report to the appropriate designated personnel and, if appropriate, to the board through the audit and risk committee.

11.3 Decisions to prosecute or to refer the preliminary examination results to the appropriate law enforcement and/or regulatory agencies and/or external forensic investigation for independent investigation will be made in conjunction with legal counsel and senior management, as will final decisions on the disposition of the case. Persons who have been mandated to investigate any alleged contravention in terms of this Policy will have:

• Free and unrestricted access to all Pan African records and premises; and
• The authority to examine, copy, and/or remove all or any portion of the contents of electronic equipment (such as computers, mobile devices, digital storage devices), files, desks, cabinets, and other storage facilities on the premises without prior knowledge or consent of any individual (taking cognizance of the Protection of Personal Information Act of 2013) who might use or have custody of any such items or facilities when it is within the scope of their investigation.

11.4 These principles will be further supplemented by Pan African’s Fraud Prevention Plan and the Investigative Protocols.

12. CONTRAVENTION OF THE POLICY

Pan African Resources regards any contravention of this Policy as a serious matter which will be investigated and which may lead to disciplinary and/or criminal action. At the same time, any suspected or alleged contravention under investigation must be treated with utmost confidentiality.

13. ADMINISTRATION

The Finance Department is responsible for the administration, revision, interpretation, and application of this Policy. This Policy shall be reviewed annually by the Group Finance Department and revised as needed. The Policy is subject to final approval by the Pan African audit and risk committee, and ratified by the board.

14. POLICY APPROVAL

This Policy was recommended by the audit and risk committee to the board as reflected in the approved minutes of 28 June 2023.
This Policy was approved by the board as reflected in the approved minutes of 29 June 2023.
The policy becomes effective from 29 June 2023 and is subject to biennial review.

1. INTRODUCTION

1.1 The Investigative Protocols serve as a comprehensive framework for conducting investigations into suspected fraud, misconduct, or other irregularities within Pan African Resources PLC (Pan African) and its subsidiary companies (the Group). Designed to uphold the highest standards of ethics, integrity, and transparency at Pan African, these protocols work in conjunction with our whistle-blowing policy. They are instrumental in fostering a culture of trust, compliance, and accountability as we strive to maintain consistency, fairness, and diligence in our investigative practices.

1.2 By adhering to these protocols, we promote transparency, ensure adherence to legal and regulatory requirements, and protect the interests of the Group, employees, and stakeholders.

1.3 Forensic investigations are often complex. They involve the conveyance of many disciplines for example legal information, technology, auditing and undercover operations using an assortment of uncommon skills.

1.4 More often than not, the investigator must have a comprehensive understanding of criminal, civil, and labour law. They also require considerable investment of time, money, and patience. Then, finally, to ensure success, the process must be highly structured and flawlessly executed.

2. OBJECTIVES

2.1 The Investigative Protocols aim to guide investigations into suspected fraud, misconduct, or irregularities, fostering a consistent, fair, and thorough approach to the process. These protocols play a vital role in maintaining the integrity of our investigations while upholding the principles of justice and due process.

3. REPORTING AND INITIAL ASSESSMENT

3.1 When becoming aware of any suspicious or alleged fraud or misconduct, it must be reported in a timeous manner to the designated investigative team or individual responsible for handling such matters.

3.2 Conduct an initial assessment to determine the alleged incident’s nature, extent, and seriousness.

3.3 Secure relevant evidence, documents, and electronic data that may be crucial for further investigation.

4. INVESTIGATION PROCESS

4.1 Forensic investigations should adhere to meaningful and well-defined objectives. They must be conducted in a lawful manner, ensuring fairness and impartiality. Accurate documentation of the investigation and comprehensive communication of its results are essential for effectiveness. To achieve this, the investigation should unfold incrementally and progress through distinct steps. These steps include the following:

4.2 Step 1: Ensure confidentiality – When an employee makes a formal or informal complaint, immediate steps should be taken by the employer to investigate the allegations. The employer must make every effort to protect the confidentiality of the employee’s claims.

4.3 Step 2: Provide interim protection – One of the initial considerations should be the need for immediate measures to protect the accuser or the alleged victim. If necessary, separating the alleged victim from the accused should be implemented to prevent further harassment or retaliation.

4.4 Step 3: Select the investigator – The investigator chosen for the investigation should possess the following:

 Objective and unbiased investigative abilities.
 No personal relationship with the involved parties, ensuring the investigator’s position within the Group is not directly affected by the outcome.
 Prior investigative knowledge and a working understanding of employment laws.
 Strong interpersonal skills to establish neutrality and fairness while building rapport with the parties involved.
 Attention to detail.
 The right temperament to conduct interviews effectively, preferably by HR personnel or internal security with appropriate training in investigation methods to ensure comprehensive information gathering.

4.5 Step 4: Create a plan for the investigation – A well-planned investigation is crucial for its effectiveness and proper execution. The plan should encompass the following elements:

4.5.1 Develop a comprehensive investigation plan that outlines objectives, timelines, and resource allocation.

4.5.2 Assign investigators with the necessary qualifications and emphasise maintaining impartiality throughout the investigation.

4.5.3 Establish clear communication channels and reporting mechanisms to ensure effective coordination among the investigative team.

4.6 Step 5: Develop interview questions – Questions should be formulated in advance during the planning stage, with flexibility to add additional questions as more evidence and information becomes available. The questions should be based on the evidence collected, reviewed documents, and other pertinent information known to the investigator.

4.7 Step 6: Conduct interviews – Once the appropriate investigator is selected, an investigation plan is in place, and interview questions have been prepared, interviews should be conducted in a professional and thorough manner.

4.8 Step 7: Exercise caution in decision-making – Throughout the investigation, the investigator must exercise caution and avoid jumping to conclusions before all the relevant facts are available.

4.9 Step 8: Closure of investigation – Once a decision is reached, the employer should promptly inform both the complaining employee and the accused of the outcome of the investigation/complaint.

4.10 Step 9: Final Report – The objective of the final report is to ensure its usability in disciplinary hearings and potential criminal proceedings. This step should encompass the following:

4.10.1 Prepare a final investigation report that presents the findings, conclusions, and recommended actions based on the investigation’s outcomes.

4.10.2 Present the report to the appropriate levels of management, the audit and risk committee, and the board for review and decision-making.

4.10.3 Determine and implement appropriate disciplinary actions, if warranted, in accordance with company policies and legal obligations.

4.10.4 Notify relevant external parties, such as law enforcement or regulatory authorities, as required by law or company policy.

5. CASE CLOSURE AND FOLLOW-UP

5.1 Close the investigation file and securely archive all relevant documents and evidence for future reference, if necessary.

5.2 Conduct a post-investigation review to identify any control weaknesses and recommend improvements to prevent similar incidents in the future.

5.3 Provide feedback to whistle-blowers and individuals involved in the investigation, as appropriate and by confidentiality protocols.

5.4 Monitor the implementation of recommended actions and conduct follow-up reviews, if deemed necessary, to ensure their effectiveness and address any residual risks.

6. POLICY APPROVAL 

6.1 This framework was approved by the audit and risk committee as reflected in the approved minutes of 28 June 2023.

6.2 The policy becomes effective from 28 June 2023 and is subject to biennial review.

1. INTRODUCTION

1.1 The fraud prevention plan outlines the strategies, policies, and procedures implemented by Pan African Resources PLC and its subsidiaries (the Group) to prevent and detect fraudulent activities. This plan aims to promote ethical behaviour, establish internal controls, and create a culture of integrity throughout the organisation.

2. OBJECTIVES

2.1 This Fraud Prevention Plan aims to prevent fraud by identifying and mitigating risks, establishing a robust control environment, promoting awareness and training, encouraging employee reporting through a confidential system, and conducting regular assessments to evaluate effectiveness.

3. FRAUD RISK ASSESSMENT

3.1 The following process management approach will be applied to the application of fraud risk assessments within the Group (as outlined in the figure below):

3.1.1 Conduct a comprehensive assessment of potential fraud risks as part of the Group’s risk management process.

3.1.2 Identify internal and external factors that may contribute to fraud occurrences.

3.1.3 Prioritise identified risks based on likelihood, potential impact and velocity.

3.1.4 Develop appropriate controls and mitigation strategies for each identified risk.

3.1.5 Refer to the Group’s management policy for a better understanding of the Group’s risk management process, summarised below.

4. CODE OF CONDUCT AND ETHICAL GUIDELINES

4.1 The Group has established a code of ethical conduct that outlines expected standards of behaviour for employees, contractors, and stakeholders. The code of ethical conduct should be read in conjunction with the Company’s commercial malpractices policy, the anti-bribery and anti-corruption policy and the conflict of interest policy which are readily available on the Group’s website.

4.2 The Group conducts regular awareness campaigns and training sessions to educate its employees and stakeholders regarding the risks associated with fraud and corruption. These initiatives aim to promote a culture of transparency, accountability, and zero tolerance for fraudulent activities.

5. INTERNAL CONTROLS

5.1 To ensure the effectiveness of internal controls in safeguarding assets and preventing fraudulent activities, the Group implements the following measures:

5.1.1 Robust internal control systems: The Group maintains robust internal control systems that are designed to safeguard assets and mitigate the risk of fraud. These systems encompass various policies, procedures, and mechanisms that promote transparency, accountability, and adherence to best practices.

5.1.2 Oversight by the audit and risk committee of the internal audit function: The audit and risk committee plays an important role in overseeing the internal audit function. While the internal audit function may be outsourced to a third party, the committee maintains direct oversight and establishes a line of communication with the head of the internal audit function. The committee reviews internal audit reports which provide insights into the adequacy and effectiveness of the Group’s governance, risk management, and internal control processes. This ensures that the committee stays informed about the progress, findings, and recommendations of the internal audit function. The committee assesses the work of the internal audit function based on these reports, which enables them to identify significant risk exposures and control weaknesses. In addition to overseeing the Group’s internal audit function, the committee extends its oversight to the external audit process, the whistle-blowing process, and the review of various management reports.

5.1.3 Internal audit function: The internal audit function assumes the responsibility of evaluating the adequacy and effectiveness of internal controls. They conduct periodic internal audits to assess the organisation’s control environment, including its ability to detect and prevent fraud. The internal audit function reports significant risk exposures, control weaknesses, fraud risks, and governance issues to the audit and risk committee, the board, and senior management. They also address any additional matters the committee or the board needs or requests.

5.1.4 Financial risk and treasury management policy: The Group has implemented a comprehensive financial risk and treasury management policy. This policy includes authorisation procedures and approval mechanisms for financial transactions and significant activities. By establishing clear processes for authorising and approving financial activities, the organisation minimises the risk of unauthorised or fraudulent actions. Additionally, the policy promotes the segregation of duties and responsibilities to further mitigate the risk of collusion.

5.2 Continual monitoring, assessment and adaptation of these internal controls are critical in maintaining their effectiveness. Pan African remains committed to regular review and improvement of its internal control systems to ensure the ongoing prevention and detection of fraudulent activities.

6. REPORTING AND WHISTLE-BLOWING MECHANISM

6.1 The Group recognises the importance of a robust reporting and whistleblowing mechanism to encourage the reporting of suspicions of fraud and other misconduct. The following measures are in place to ensure an effective reporting and whistleblowing process:

6.1.1 Confidential Reporting System: The Group has implemented a confidential reporting system in line with the whistleblowing policy. This system provides employees and stakeholders with a confidential and anonymous reporting mechanism, including an anonymous whistleblowing and tip-off hotline.

6.1.2 Communication and Awareness: The responsibility for effectively communicating the details of the whistleblowing policy lies with the procurement and HR managers. They are tasked with ensuring that all employees, as well as third-party service providers such as vendors and contractors, are aware of the policy. The policy should be clearly explained, easily accessible, and comprehensible to all relevant parties.

6.1.3 Confidentiality and Investigation: The Group’s Security Executive oversees the whistleblowing process, conducts investigations, and takes appropriate actions in line with the policy and relevant laws. They ensure that each report is promptly and thoroughly addressed, following established procedures and legal requirements. The Group is dedicated to maintaining strict confidentiality during investigations, with the Security Executive and investigative personnel handling the information discreetly and sharing it only with individuals involved in the investigation.

6.1.4 Feedback and Updates: The Group understands the importance of providing regular feedback and updates to whistle-blowers regarding the status and outcomes of reported incidents. The Security Executive will ensure that whistle-blowers are kept informed regarding progress of investigations and any actions taken as a result of their reports. This transparency helps to reinforce the commitment to addressing concerns and maintaining accountability within the Group.

7. MONITORING AND COMPLIANCE

7.1 The audit and risk committee plays a crucial role in monitoring and ensuring compliance with the Group’s fraud prevention measures. They are responsible for overseeing and evaluating the effectiveness of procedures implemented to detect, prevent and address fraudulent activities within the organisation.

7.2 To fulfil this responsibility, the audit and risk committee works closely with management, internal auditors and external auditors to assess the adequacy and efficiency of the Group’s fraud prevention measures. They review and provide guidance on the implementation of robust internal controls, risk management frameworks and anti-fraud policies and procedures.

7.3 The committee regularly reviews reports from internal auditors and receives updates on the status of whistle-blower reports and the outcomes of investigations. They assess the findings and recommendations put forth by internal auditors, ensuring that appropriate actions are taken to address identified weaknesses or gaps in the system.

7.4 Additionally, the audit and risk committee monitors the compliance of the Group with relevant laws, regulations and industry best practices related to fraud prevention. They stay abreast of changes in the regulatory landscape and recommend necessary updates to policies and procedures to maintain compliance.

7.5 Through their active oversight and monitoring, the audit and risk committee helps foster a culture of integrity, accountability and transparency within the organisation. Their commitment to effective procedures and compliance contributes to the prevention and mitigation of fraudulent activities, safeguarding the interests of stakeholders and the reputation of the Group.

8. POLICY APPROVAL

8.1 This plan was approved by the audit and risk committee as reflected in the approved minutes of 28 June 2023.

8.2 The policy becomes effective from 28 June 2023 and is subject to biennial review.