for the year ended 30 June 2018

To the shareholders of Assore Limited

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Opinion

We have audited the consolidated and separate financial statements of Assore Limited and its subsidiaries (the group) set out herein, which comprise the directors' report, consolidated and separate statements of financial position as at 30 June 2018, and the consolidated and separate income statement, the consolidated and separate statement of comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Assore Limited and the group as at 30 June 2018, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of South Africa.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report. We are independent of the group in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA Code), the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA code) and other independence requirements applicable to performing the audit of Assore Limited. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code, IESBA code, and in accordance with other ethical requirements applicable to performing the audit of Assore Limited. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated and separate financial statements.

Key audit matter (KAM)			How the matter was addressed in the audit
Environmental rehabilitation (Consolidated financial statements only) The nature of the mining industry’s mineral extraction is such that environmental disturbance is inevitable. In terms of NEMA regulations, IAS 37 and IFRIC 1 the group provides for the estimated costs of rehabilitation which include both restoration and decommissioning of associated assets. Management calculates a rehabilitation provision based on the present value of the estimated future decommissioning and restoration costs at the end of the group's mine and plant lives. The key risks associated with this provision are: the key uncertainty surrounding the future life of mines; the forward-looking nature of the provisions; and the uncertainty regarding the underlying assumptions. The disclosure associated with the environmental rehabilitation is set out in the consolidated financial statements in note 15.			Our audit procedures involved, among others, the following: As the Assore group's only significant rehabilitation provision relates to the mining operations of the subsidiary Dwarsrivier Chrome Mine (Dwarsrivier), our review focused on Dwarsrivier's rehabilitation provision. We engaged, as part of our team, environmental valuation specialists to assist us in our assessment of the measurement of the environmental rehabilitation provision. We reviewed the work performed by Dwarsrivier management’s independent environmental experts who were appointed to perform the evaluation of Dwarsrivier’s environmental rehabilitation and mine closure costs. Our procedures included a review of: The experts’ assessment of environmental risk. Their estimation of Dwarsrivier’s environmental rehabilitation costs on the “current disturbance” and life-of-mine basis. The assessment of the Dwarsrivier environmental rehabilitation, decommissioning and mine closure plan prepared by the experts. The contextual information and the underlying assumptions applied for calculation of the rehabilitation and closure costs and the related financial provision. Dwarsrivier management’s recorded long-term provision for rehabilitation costs to be included in Dwarsrivier’s financial records and compared this with the expert’s independent estimate of the NEMA financial provision relating to current mine closure rehabilitation and mine closure/decommissioning costs. The team tested and reperformed management’s calculation of environmental rehabilitation provisions recorded. The team obtained the report from independent experts to assess the reasonability of the assumptions used in the calculations. Assessed the reasonability of management’s economic assumptions in their rehabilitation models. The most significant of these assumptions include the risk-free discount rates and the expected future inflation factors, as they have the most significant impact on the balance of the provision. Evaluated the adequacy of financial statement disclosures in compliance with IFRS. Inspected the accounting entries.

Other information

The directors are responsible for the other information. The other information comprises the audit committee's report and the company secretary's certificate as required by the Companies Act of South Africa, and the information included in the integrated annual report, which we obtained prior to the date of this report. Other information does not include the consolidated and separate financial statements and our auditor's report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the consolidated and separate financial statements

The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the consolidated and separate financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Ernst & Young Inc., and its predecessor firm, has been the auditor of Assore Limited for 29 years.

Ernst & Young Inc.
Director: Dave Ian Cathrall
Registered auditor
Chartered Accountant (SA)

19 October 2018