The vision of the Trust is to help its beneficiary communities derive a long-term benefit from mining operations so that when the mines close, they are in a much stronger position than before and are more likely to be able to thrive and sustain themselves. In accordance with the Trust Deed, the Trust has an obligation to spend or distribute 70% of Trust Income (mostly comprising of dividends received from SIOC-CDT) in Public Benefit Activities and operational/administrative expenditures. This spending policy was approved as such by the South African Revenue Services in approving the Trust’s status as a Public Benefit Organisation.

The Trustees believe that to achieve this vision, the Trust itself needs to be sustainable beyond the Life of the Mine. It requires a sustainable pattern of spending, whereby the current needs of the community are not sacrificed in the interests of future generations, nor are future needs sacrificed to those of the present. To achieve the desired level of spending while preserving and enhancing the Trust’s purchasing power over time, the Trust would need to invest its excess resources to generate a return that is greater than its spending rate.

For this purpose, the Trust can invest up to 30% of Trust Income on a long-term basis through InvestCo. The returns of this investment(s) would be contributed back to the Trust to continue its mission to improve the conditions of its beneficiary communities beyond the Life of the Mine.

The investment objectives of the Trust have been established in conjunction with a comprehensive review of the Trust’s current circumstances. The investments of the Trust will be managed with a medium- to long-term perspective and structured to:

• Earn a net investment return (after investment manager fees and any other investment-related costs) which exceeds inflation, as measured by the Consumer Price Index (CPI) determined by STASSA, by at least 6.5% per annum over any rolling 5-year period, within a moderate risk budget of between 7% and 12% risk, as measured using annualised standard deviation.

• Ensure that a sufficient asset base is present to cover all Trust debt and liabilities (solvency).

• Ensure sufficient liquid assets are available to meet benefit payments as and when those payments are due to be paid (liquidity).

• Control risk through diversification of asset classes and by establishing risk-adjusted return expectations.

• Maximize net investment return (after investment manager fees and any other investment-related costs) proportionate with the risk tolerance of the Trust.

• Invest the Trust’s assets while considering the impact of each investment on environmental, social, and governance (ESG) issues.

• Provide adequate investment returns and act as agents of transformation by assessing service providers based on the merits of a sound proposition, as well as a credible black economic empowerment and effective transformation imperative.

InvestCo seeks new investments with the main principles of risk diversification as the main driver. The company is cognisant that the capital markets are volatile and will therefore aim to have a diversified portfolio of investments. By allocating InvestCo Assets to asset classes whose returns are not highly correlated over time, InvestCo aims to mitigate some of the volatility inherent in equities and thereby provide greater stability in spending distributions than might be possible with a more concentrated portfolio. To achieve a prudent level of portfolio diversification, InvestCo employs a strategic asset allocation between private equity, bonds, listed equity and global equities.