1. The State Diamond Trader STRATEGIC PLAN and BUDGET 2014 – 2015

2. State Diamond Trader: MANDATE The State Diamond Trader’s (SDT) mandate is:  To Promote the diamond beneficiation industry in South Africa through research and development of the Industry.  The Mandate is derived from Section 14 the Diamonds Amendment Act, 29 of 2005. 2

3. SDT: VISION VISION: It is the Vision of the SDT to be a catalyst for the transformation and growth of the local diamond beneficiation industry. 3

4. SDT: MISSION The Mission of the SDT is to: – Ensure acquisition of and equitable access to rough diamonds with particular focus on HDSAs; – Promote the growth of the diamond beneficiation industry through relevant interventions; and to – Establish and maintain a transformed client base of local diamond beneficiators. 4

5. THE BUSINESS OF THE SDT The SDT sells rough diamonds to approved customers through an application and approval process conducted annually The entity is eligible by law and proclamation to purchase up to 10% of the run of the mine from all diamond producers in South Africa 5

6. Strategic Objective 1 To contribute to the growth of the local diamond beneficiation industry 6

7. Key Activities: Implement the Marketing & Promotion strategy Implement Sales Strategy Develop and establish an incubation facility Facilitate training for 10 new HDSA entrants Facilitate access to international and local exhibitions and marketing platforms for HDSA clients and new entrants Identify enterprises for growth into large scale beneficiation businesses Increase supply to the enterprise targeted for growth 7

8. Outcomes: Objective 1 Strategic Objective 1 is intended to achieve the following outcomes: - A sustainable, growing and transformed diamond beneficiation industry; - An increase in the amount of rough diamonds beneficiated in SA; 8

9. Outcomes: Objective 1 (continued) - Enterprise Development in the Diamond Industry (SMMEs); and - The establishment of large scale HDSA owned entities which are sustainable in the diamond cutting and polishing industry. 9

10. Impact: Strategic Objective 1 The impact of the strategic objective will be, inter alia: - Job creation; - The promotion of South Africa as a diamond beneficiation centre; - An enabling environment and a platform for sustainable enterprise development client. 10

11. Strategic Objective 2 To develop efficient means to market diamonds not suitable for local beneficiation 11

12. Key Activities Engage and agree with relevant stakeholders in the diamond pipeline on special purchasing model Unlock and increase rough diamonds suitable for local beneficiators 12

13. Outcome: Objective 2 - To be the leading and innovative rough diamond trader for the local beneficiation industry 13

14. Impact: Strategic Objective 2 - An enhanced supply and increased availability of diamonds for local beneficiation - To have all available rough diamonds suitable for local beneficiation made available to the local industry 14

15. Strategic Objective 3 To develop and acquire appropriate financial and human resource capacity for the SDT 15

16. Outcome: Objective 3 To be an efficient, innovative and development orientated organisation (in terms of learning and development) 16

17. Key Activities Develop and implement a funding strategy for the SDT Review HR Plan Efficiently implement HR Plan Identify skills gaps and capacity building requirements Implement HR capacity building dashboard 17

18. Impact: Objective 3 The impact of the strategic objective will be: - A highly motivated and satisfied workforce; - Staff that can provide an excellent service to stakeholders; and - Staff that will essentially act as ambassadors of the State Diamond Trader 18

19. Strengths and Limitations Strengths Legislated position of the SDT Access to rough diamonds Perception of diamonds Limited competition Limitations Funding Model Availability of rough diamonds suitable for beneficiation in South Africa 19

20. Budget for 2014-2015 20 Sales534,254,933 Cost of Goods Sold(513,706,667) Gross Profit20,548,267 Overheads(16,818,827) EBIT3,729,440 Interest income2,811,885 Interest expenses(2,484,798) Net income/(loss)4,056,526

21. Strategic objectives linked to DMR and National outcomes National OutcomeDMR ProgrammeSDT Strategic Objectives SDT Mandate Promote the diamond beneficiation industry through research and development Create a better South Africa and contribute to a better and safer Africa Mineral Regulation To contribute to the growth of the local diamond beneficiation industry Effective,efficient and development orientated Public Service Administration Develop and acquire appropriate financial and human resource capacity 21

22. The State Diamond Trader