State Diamond Trader

1. State Diamond Trader Strategic Plan 2012/13

2. Introduction The State Diamond Trader (SDT): • Has been in operation for 5 years • Has 92 registered clients • Has sold diamonds to an average of 60 clients annually • Has provided support to its small clients • Has inspected & purchased from all large & medium producers • Has been participating in KPCS processes • Is currently working on inspecting & purchasing from small producers & diggers • Is planning further growth through support for its clients and other work

3. Strategic Goals • To ensure continued sustainability of the State Diamond Trader • Be an efficient and professionally managed organization • Promote and uphold efficient governance • Ensure constant access to rough diamonds

4. Strategic Objectives • Improve profitability of SDT operations to ensure its sustainability • Facilitate support to SDT clients • Develop and acquire appropriate Human Resource capacity • Develop, implement and maintain systems, procedures and controls in line with PFMA and other applicable policies • Develop and maintain trading relations with other African diamond producing countries • Improve positive relations with producers to access better quality goods • Enforce compliance with the legislation on trading matters

5. Improve profitability of SDT operations - ensure its sustainability Key Activities • Improve stock turnaround time in terms of SDT Stock Holding Policy • Maintain gross margin rates • Review and streamline operational expenditure • Ensure that trading policies create an enabling environment to deliver required profit • Increase number of and value of sales to HDSA clients

6. Measures 2012/13 Measures: • Reduced turnaround times on stocks • Gross margin maintained at target • Improve efficiencies • A review of trading policies • Increased number of and percentage value of sales to HDSA clients

7. Targets 2012/13 Targets: • Below a weighted average of 14 days • Minimum of 4% per trading cycle • Operating expenses not exceeding budget • September-Annually • 20% p.a. for 2012-2014

8. Facilitate support to SDT clients Key activities: • Facilitate technical and business management training • Training on branding and marketing • Facilitation of training and mentoring of HDSA clients • Provide market intelligence • Market briefings at Client information sessions on a quarterly basis • To sponsor small client participation at JewellexShow in Sep 2012 • Facilitate access to finance

9. Measures 2012/13 Measures: • Number of clients trained • Market Intelligence briefings • Increased number of trading clients

10. Targets 2012/13 Targets: • 10 HDSA clients p.a. • Growth in business management confidence • Quarterly • 10% p.a.

11. Develop and acquire appropriate Human Resource capacity Key Activities: • Implement HR policy • Review HR Plan • Ensure continuous capacity building for all personnel • Review and monitor training provided to ensure appropriateness

12. Measures 2012/13 Measure: • Compliant HR processes • HR Plan responding to SDT requirements • Relevant training for all diamond trainee personnel • Skills gaps identified and relevant courses/ training initiated

13. Targets 2012/13 Targets: • On going, annually • April 2012 • Annually • Quarterly and on going

14. Implement and maintain admin systems, procedures and controls Key Activities: • Improve the use of admin processes • Ensure quarterly Internal Audits are conducted • Training staff on all policies and business processes • Develop and get approval of Asset Management Policy • Maintain asset register • Develop and approve IT Policies and Procedures • Acquire and maintain adequate insurance for diamond stock and SDT assets • Review and maintain compliant procurement procedures in line with SDT Supply Chain Policy

15. Measures 2012/13 Measures: • All approved procedures implemented and monitored • Tested internal controls and systems • Implementation of and compliance with all policies and procedures • Compliant legislative framework on assets • Secured assets • Secured IT environment • Appropriate IT support for SDT business • Sufficient insurance for all stock and assets • Compliant procurement procedures

16. Targets 2012/13 Targets: • Positive Internal Audit results • Quarterly • Quarterly • April 2012 • On going • March 2012 • On going • May 2012 • April 2012

17. Adhere to Corporate Governance, Legislation and Policies Key Activities: • Ensure Audit and Risk Management Committee meetings are held • Preparation and approval of Statutory reports • Address All Audit findings • Conduct annual Risk Assessment

18. Measures 2012/13 Measures: • Compliance monitoring and guidance to Board • Submission of quarterly and annual reports • Improved performance on systems and controls • Frequently assessed risk profile • Risk appropriate mitigation plans

19. Targets 2012/13 Targets: • Minimum of 4 Meetings per annum • Quarterly and annually reporting • Quarterly and annually reporting • March 2012 • Controlled risk environment, • On going monitoring of environment

20. Enforce legislation compliance Key Activities: • Ensure all producers declare their production cycles • Inspect rough diamonds produced in SA • Purchase up to 10% of total SA production (volume and value)

21. Measures 2012/13 Measures: • Increased amount of rough diamonds available to SDT and its clients • Increased % of Productions inspected • % of SA production purchased

22. Targets 2012/13 Targets: • 10 additional Producers trading with SDT by end 2013 • 90% by 2013 • 9% by 2012-2013

23. Improve relations with producers Key Activities: • Update client demand analysis • Engage producers on suitability of supply per SDT Producer Engagement strategy

24. Measures 2012/13 Measures: • Report produced December annually • Reduced number of disputes with producers

25. Targets 2012/13 Targets: • 5% increase of preferred rough diamonds bought by 2014 • 50% reduction in disputes and on going

26. Develop and maintain trading relations with other African diamond producing countries Key Activities: • Test purchasing with 3 African countries producing diamonds • Negotiate supply agreements with 3 selected diamond producing countries • Contribute to KPCS development and in RSA KPCS compliance processes • Attend KPCS meetings as part of RSA team

27. Measures 2012/13 Measures: • Costs and sales analysis of purchases made from 3 countries • Supply agreements concluded • Compliant KPCS processes locally and internationally • Compliance with KPCS on international rough purchases

28. Targets 2012/13 Targets: • March 2013 • 1 country agreement by March 2013 • 1 KPCS compliant purchase of rough by March 2013 • June and November annually

29. In Conclusion The State Diamond Trader: • Has spent its formative years creating capacity, and developing skills • Instigated procedures that have enabled it to establish itself in the diamond industry

30. State Diamond Trader • Has proved itself as a viable commercial operation during the most volatile conditions the industry has seen in living memory • With no recourse to public funding, it has had to constantly innovate to ensure its sustainability • Will continue to improve on its competencies during the year

31. State Diamond Trader Thank you