TO THE DIRECTORS OF NORTHAM PLATINUM LIMITED
Our conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that:
- The selected sustainability information identified in the subject matter paragraph below, as presented in Northam Platinum Limited’s (Northam’s) annual integrated report for the year ended 30 June 2017 (the report) is not prepared, in all material respects, in accordance with Northam’s internally developed measurement and reporting criteria applied to prepare that information* and
- Northam’s assertion that the report is in accordance with the core-level Global Reporting Initiative (GRI) G4 Guidelines included under Reporting in line with GRI of the report is not, in all material respects, in accordance with the relevant GRI G4 Guideline requirements for making that assertion.
Ernst & Young Inc. (EY) has undertaken a limited assurance engagement for the selected KPIs described below presented in Northam’s annual integrated report for the year ended 30 June 2017 (the report); and for Northam’s assertion made in the report that the report is in accordance with the core-level GRI G4 Guidelines.
This engagement was conducted by a multidisciplinary team including environmental, health and safety and social specialists with extensive experience in sustainability and carbon footprint reporting and assurance.
Subject matter
Our engagement was performed for the selected KPIs listed below and related performance disclosures as presented in the report, and Northam’s self-declared assertion that the report is in accordance with the core-level GRI G4 Guidelines.
* Management’s internally developed measurement and reporting criteria for these selected KPIs may be found in the Sustainable Development Data Reporting Guideline Document
| Selected KPIs* | Coverage |
|---|---|
|
Northam’s wholly-owned operations |
These selected KPIs, prepared and presented in accordance with management’s internally defined measurement and reporting criteria (management’s measurement and reporting criteria), are marked with an ‘LA’ on the relevant pages of the report where they appear.
The scope of our work was limited to the matters stated above in relation to the report, and did not include coverage of data sets or information relating to areas other than the selected KPIs, information reported outside of the report, comparisons against historical data, or management’s forward-looking statements.
Directors’ responsibilities
You are responsible for presenting the report in accordance with the core-level GRI G4 Guidelines, and for the selection, preparation and presentation of the selected KPIs and related management disclosures in the report in accordance with management’s internally developed measurement and reporting criteria. You are also responsible for determining the appropriateness of those measurement and reporting criteria in view of the intended users of the selected KPIs disclosed in the report (i.e. Northam’s stakeholders) and for disclosing those criteria for the intended users.
Furthermore, you are responsible for the identification of stakeholders and stakeholder requirements, material issues, for commitments with respect to sustainability performance and for the design, implementation and maintenance of internal control relevant to the preparation and presentation of the selected KPIs and related disclosures, and for Northam’s assertion on application of the core-level GRI G4 Guidelines in the report, free from material misstatement, whether due to fraud or error.
Inherent limitations
Inherent limitations of assurance engagements include use of selective testing of the information being examined, which means that it is possible that fraud, error or non-compliance may occur and not be detected in the course of performing the engagement.
Carbon emissions quantification is subject to inherent uncertainty because of incomplete scientific knowledge used to determine emissions factors and the values needed to combine emissions of different gases.
There are additional inherent risks associated with assurance engagements performed for non-financial information given the characteristics of the subject matter and associated with the compilation of source data using definitions and methods for determining, calculating, and estimating such information that are developed internally by management. The absence of a significant body of established practice on which to draw, allows for the selection of different but acceptable measurement techniques which can result in materially different measurements and can impact comparability. The precision of different measurement techniques may also vary. Qualitative interpretations of relevance, materiality and the accuracy of data are subject to individual assumptions and judgements. In particular, where the information relies on factors derived by independent third parties, our assurance work has not included examination of the derivation of those factors and other third party information.
Our independence and quality control
We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants as well as the Code of Professional Conduct for Registered Auditors issued by the Independent Regulatory Board for Auditors, which includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.
In accordance with International Standard on Quality Control 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and other Assurance and Related Service Engagements, we maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our responsibility
Our responsibility is to perform our limited assurance engagement to express our conclusion on whether anything has come to our attention that causes us to believe that:
- the selected KPIs and related disclosures as presented in the report are not prepared, in all material respects, in accordance with management’s internally developed measurement and reporting criteria for those KPIs; and
- Northam’s assertion contained in the report that the report is in accordance with the core-level GRI G4 Guidelines is not, in all material aspects, in accordance with the GRI G4 Guidelines requirements for making that assertion.
We have performed our limited assurance engagement in accordance with the terms of reference for this engagement agreed with Northam, including performing the engagement in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised), Assurance Engagements other than the Audits or Reviews of Historical Financial Information and ISAE 3410, Assurance Engagements on Greenhouse Gas Statements, issued by the International Auditing and Assurance Standards Board. Those standards require that we plan and perform our engagement to obtain limited assurance about whether the selected KPIs as presented in the report, are free from material misstatement.
A limited assurance engagement undertaken in accordance with ISAE 3000 (Revised) and ISAE3410 involves assessing the suitability in the circumstances of managements’ internally developed measurement and reporting criteria as the basis of preparation for reporting the selected KPIs, assessing the risks of material misstatement of those selected KPIs, whether due to fraud or error, responding to the assessed risks as necessary in the circumstances, and evaluating the overall presentation of the selected KPIs.
A limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks.
The procedures we performed were based on our professional judgement and included inquiries, observation of processes performed, inspection of documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with underlying records.
Given the circumstances of the engagement, in performing the procedures listed above we:
- reviewed Northam’s activities, processes and documents at group-level that support the assertions and claims made in the report
- interviewed management and senior executives to obtain an understanding of the following as relevant to the sustainability reporting process:
- governance and accountability of relevant sustainability issues
- objectives and priorities for embedding and managing sustainability expectations and the progress against these
- processes for reporting progress and providing internal assurance to management on sustainability issues
- the process for determining materiality of sustainability issues
- the control environment and information systems relevant to preparing the selected KPIs and for their inclusion in the report (but not for purposes of evaluating the design of particular control activities, obtaining evidence about their implementation or testing their operating effectiveness)
- performed analytical procedures to evaluate the relevant data generation and reporting processes against management’s measurement and reporting criteria
- inspected the GRI G4 content index prepared by management to assess presentation of the report in accordance with the core-level GRI G4 Guidelines
- inspected supporting documentation on a sample basis, to corroborate the statements of management and senior executives in our interviews
- evaluated the reasonableness and appropriateness of significant estimates and judgements made by the directors in the preparation and application of the selected sustainability information subject to assurance
- evaluated whether the selected sustainability information subject to assurance as presented in the report, and management’s GRI assertion that the report is presented in accordance with the Core GRI G4 Principles, is consistent with our overall knowledge and experience of sustainability and carbon footprint management and performance at Northam. This includes challenging and reviewing the report to assess its content for coverage of material issues and consistency with observations made of processes and progress. As part of this, we seek supporting documentation for a sample of claims made in the report
- prepared our assurance statement for inclusion in the report. The statement is structured to meet the requirements for a limited assurance engagement report under ISAE3000 (Revised) and ISAE3410
- provided overall project management and feedback on relevant observations to the reporting team and selected sustainability information data owners at key stages throughout the engagement. At the end of the engagement we will prepare a summary management comment letter.
The procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, a reasonable assurance engagement. As a result the level of assurance obtained in our limited assurance engagement is substantially lower than the assurance that would have been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express a reasonable assurance opinion about whether the selected KPIs presented in the report have been prepared, in all material respects, in accordance with management’s internally developed measurement and reporting criteria for those KPIs.
Other matters
Information relating to prior reporting periods has not been subject to assurance procedures. Our report does not extend to any disclosures or assertions relating to future performance plans and/or strategies disclosed in the report.
The maintenance and integrity of Northam’s website is the responsibility of Northam’s management. Our procedures did not involve consideration of these matters and, accordingly we accept no responsibility for any changes to either the selected KPIs in the report, the GRI G4 content index or our independent assurance report that may have occurred since the initial date of presentation on the Northam website.
Restriction of use and liability
Our work has been undertaken to enable us to express a limited assurance conclusion on the matters stated above in our report provided to the directors of Northam in accordance with the terms of our engagement, and for no other purpose. Our report is intended solely for the directors of Northam and must not be used by any other parties.
To the fullest extent permitted by the law, we do not accept or assume liability to any party other than the directors of Northam, for our work, for this report, or for the conclusion we have reached. We agree to the publication of this assurance report in Northam’s report for the year ending 30 June 2017, provided it is clearly understood by recipients of the report that they enjoy such receipt for information only and that we accept no duty of care to them whatsoever in respect of this report.
Ernst & Young Inc.
Director: Mike Herbst
Registered Auditor
Chartered Accountant (SA)
Ernst & Young
102 Rivonia Road
Johannesburg
29 September 2017