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Presentation of the Annual Report for the year ended 31 March 2013

This presentation covers the predetermined objectives, corporate governance, PSJV operations, human resources, control environment, audit committee statement, auditor's report, and annual financial statements for the year ended March 2013. It provides an overview of the company's performance and achievements.

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Presentation of the Annual Report for the year ended 31 March 2013

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  1. Presentation of the Annual Report for the year ended 31 March 2013 18 February 2014

  2. Contents • Predetermined objectives (performance overview) • Corporate governance • PSJV operations • Human resources and social development • Control environment • Statement of the audit & risk committee • Auditor’s report • Annual financial statements

  3. Predetermined objectives • Alexkor had 30 approved targets during the year. 28 of the 30 objectives were achieved resulting in a success rate of 93% (2012: 66%). The two targets not achieved are listed below: Source: * Refer to the report on predetermined objectives for the year ended 31 March 2013.

  4. Corporate governance (1 of 2) • Board members for Alexkor SOC Ltd:

  5. Corporate governance (2 of 2) • Three additional board members were appointed in June 2013 (after financial year end), they were: • Ms S Zilwa • Mr B Grobbelaar • Mr D Mkhwanazi • Alexkor SOC Ltd had four sub-committees during the year being the: • Audit and risk committee • Social, ethics & human resources committee • Rehabilitation committee • Tender committee • The PSJV’s sub-committees included the technical and audit and risk committee.

  6. PSJV operations (1 of 4) • Diamond revenue amounted to R184.1m (2012: R196.1m). • The PSJV produced 35 358 carats (2012: 37 016 carats). • Sea-days increased to 22 (2012: 8 sea-days) for the year. • A net profit of R4.7m was achieved for the year. Both the guesthouses and the fuel station made small profits. • Cash reserves were stable during the year. • Capital expenditure of just over R8m was incurred.

  7. Comparative annual diamond production (2 of 4)

  8. Carat production per sector (3 of 4)

  9. Sea-days compared to previous decade (4 of 4) Note: A sea-day is defined as when more than 50% of the production units (sea vessels) leave the harbour in a day to dive for diamonds in the marine concessions.

  10. Human resources and social development (1 of 3) The staff complement at 31 March 2013: • Union membership at 31 March 2013:

  11. Human resources and social development (2 of 3)

  12. Human resources and social development (3 of 3)

  13. Control environment • Internals control are designed to provide reasonable but not absolute assurance as to the reliability of the financial statements, safeguarding of assets and to prevent and detect misstatements and losses. • Alexkor’s internal audit function is outsourced and provides an independent appraisal to examine and evaluate the company’s activities. • Alexkor’s fraud hotline facility has also been effective throughout the financial year to enable all stakeholders or any other parties to report fraudulent, corrupt and unethical practices in the work place. The line is implemented at both Alexkor and the PSJV. • Internal audit has identified internal control issues within the PSJV’s environment with regards to their fixed asset register, HR and payroll, procurement and IT management. Alexkor raised its concerns to the PSJV and processes are in place to rectify these weaknesses.

  14. Annual Financial Statement (AFS) (1 of 7) • The AFS was approved and signed by the Board on 6 August 2013. • The audit and risk committee’s report was included in the annual report on pages 50 and 51. • The external auditor’s opinion was unqualified, issues were however raised with regards to: • Fruitless and wasteful expenditure (VAT interest and penalties to the amount of R146 980) and; • Procurement and contract management with regards to marine contracts within the PSJV.

  15. Annual Financial Statement (AFS) (2 of 7) • Statement of financial position (material movements): • Cash in the rehabilitation trust R109.5m (2012: R48.1m); • Pension fund surplus R16.3m (2012: R0.4m); • Cash and cash equivalents R556.6m (2012: 341.2m); • Share capital R400m (2012: R50m); • Retirement benefit obligation settled (2012: R46.9m); and • Trade and other payables R234.9m (2012: 278.9m).

  16. Annual Financial Statement (AFS) (3 of 7) • Statement of comprehensive income: • Revenue R93.9m (2012: R113.4m); • Provision for the rehab liability R10.7m (2012: R1.3m); • Operating loss R20.7m (2012: R19.1m); • Net finance income R51.0m (2012: R7.0m); and • Profit for the year R29.7m (2012: loss of R14.0m).

  17. Annual Financial Statement (AFS) (4 of 7) • Alexkor’s cash position at 31 March 2013:

  18. Annual Financial Statement (AFS) (5 of 7) • Government funded obligations: • All four phases with regards to the Township upgrade have been completed. The balance of the funds are retention funds that will become payable once the retention period expires. Note: The R 41 million utilised during the year for PSJV recapitalisation relates to accumulated interest which was paid to Alexkor.

  19. Annual Financial Statement (AFS) (6 of 7) • Litigation matters at 31 March 2013: • Nabera mining • Ruslyn mining • Restitution claim • No provision were made for the above cases in consultation with legal representation.

  20. Thank You

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